260000001174.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. 260000001174

between

THE STATE OF MICHIGAN

and

C O

N

TR

AC

TO

R

Kyra Solutions, Inc.

4454 Florida National Dr.

Lakeland Florida 33813

Katy Fenton

850 597 2525 kfenton@kyrasolutions.com

VS0329833

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 Patrick Russell DTMB

(517) 648-7767

RussellP2@michigan.gov

CONTRACT SUMMARY

DESCRIPTION: Electronic Local Government Information & Taxation Evaluation System (ELITES)

INITIAL EFFECTIVE DATE

9/3/2026

INITIAL EXPIRATION DATE

9/2/2028

INITIAL AVAILABLE

OPTIONS

8 - 1 Year

EXPIRATION DATE BEFORE

CHANGE(S) NOTED BELOW

9/2/2028

PAYMENT TERMS

N/A

DELIVERY TIMEFRAME

N/A

ALTERNATE PAYMENT OPTIONS

P-card Payment Request (PRC) Other

EXTENDED PURCHASING

Yes No

MINIMUM DELIVERY REQUIREMENTS

N/A

MISCELLANEOUS INFORMATION

This is not an order. This Contract Agreement is awarded on the basis of the State's solicitation RFP #260000002111.

Orders for Delivery will be issued directly by the Departments through the issuance of a Delivery Order (DOIT).

ESTIMATED CONTRACT VALUE AT TIME OF EXECUTION $2,975,000.00

Program Managers for

Multi-Agency and Statewide Contracts

AGENCY NAME PHONE EMAIL

TREA Cassandra Kelly 810 423 6805 KellyC14@michigan.gov

DTMB Lucy Pline 517 896 5103 plinel@michigan.gov

CONTRACT NO. 260000001174

FOR THE CONTRACTOR:

Company Name

Authorized Agent Signature

Authorized Agent (Print or Type)

Date

FOR THE STATE:

Signature

Name and Title

DTMB Central Procurement Services Agency

Date

Michigan.gov/MiProcurement

IT PROFESSIONAL SERVICES TERMS AND

CONDITIONS

This Contract is agreed to between the State of Michigan (“State”) and Kyra Solutions, Inc.

(“Contractor”), a Florida Corporation. This Contract is effective September 3rd, 2026 (“Effective Date”), and unless terminated, will expire on September, 2nd, 2028 (“Term”).

This Contract may be renewed for up to 8 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

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 the State: If to Contractor:

Patrick Russell 320 S. Walnut Street Lansing, MI 48933

(517) 648-7767

Kyra Solutions, Inc Street Address 4454 Florida National Dr.

kfenton@kyrasolutions.com 850 597 2525

3. Duties of Contractor. Contractor will provide the Services and Deliverables as set forth in this Contract.

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 any 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

(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

(iii) 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 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 Section 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 Deliverables and Services as described in this Contract are considered part of the Deliverables and Services and, thus, will not be considered a change necessitating a Change Notice. 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.

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 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.

(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. 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, at its option, either (i) terminate a Statement of Work immediately pursuant to the termination provisions herein, or (ii) 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) 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;

(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, 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 Sections 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 Key Personnel and Unauthorized Removal of Contractor 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 then propose another qualified individual for the position for the State’s approval within 5 Business Days.

(b) Contractor must provide 30 days’ prior written notification to the State before removing any Contractor Personnel from their assigned roles in this Contract, which must include a plan for transitioning to a new resource including knowledge transfer, and further, Contractor must obtain the prior written authorization of the State before removing any Key Personnel from their assigned roles on this Contract.

(c) Unless Contractor’s removal of Key Personnel was for reasons beyond the reasonable control of Contractor, including illness, disability, leave of absence, personal emergency circumstances, resignation, or for cause termination of employment, in the event of an Unauthorized Removal, Contractor will issue to the State the corresponding Unauthorized Removal Credits set forth below:

(i) Unauthorized Removal of Contractor Personnel (not including Key Personnel):

(1) For the Unauthorized Removal of any Contractor Personnel that are not Key Personnel, the credit amount will be 1% of the previous month’s invoice total.

(ii) Unauthorized Removal of Key Personnel:

(1) For the Unauthorized Removal of any Key Personnel designated in a Statement of Work, the amount of the Unauthorized Removal Credit will be $25,000.00 per individual; and

(2) In addition to the Unauthorized Removal Credit, as an additional liquidated damage, if Contractor fails to assign a replacement to shadow the removed Key Personnel for at least 30 calendar days, Contractor will credit the State $833.33 per calendar day for each day of the 30 calendar-day shadow period that the replacement Key Personnel does not shadow the removed Key Personnel, up to $25,000 maximum per individual.

(d) 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. Engagement of any subcontractor or Permitted Subcontractor by Contractor 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, omissions and any failure to comply with the terms of this Contract of each such subcontractor (including such Permitted Subcontractor and Permitted Subcontractor's employees who, to the extent providing the Solution, will be deemed Contractor Personnel) 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 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.

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.

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

5. Provision of Deliverables.

5.1 Delivery.

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

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

5.2 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.

5.3 Documentation. Contractor will provide the State with complete and accurate Documentation for each Software Deliverable. Where the Statement of Work requires or permits delivery of Software in two or more phases, Contractor will also provide the State with integrated Documentation for the 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 Software, including configuration, integration, and systems administration of the Software and performance of all functions set forth in the Specifications.

5.4 Deliverables Limitation. Contractor will not include in any Deliverables or otherwise provide any Pre-Existing Works, except for Approved Pre-Existing Works.

6. State Materials Ownership and License.

6.1 The State will remain the sole and exclusive owner of all rights, title, and interest in and to State Materials, including all Intellectual Property Rights therein.

6.2 The State hereby grants to Contractor the limited, royalty-free, non-exclusive right and license to use State Materials solely as necessary to incorporate such State Materials into or otherwise use such State Materials in connection with provision of Services and Deliverables during the Term. All other rights in and to the State Materials are expressly reserved by the State. All State Materials are considered Confidential Information of the State.

7. Intellectual Property Rights and Licenses.

7.1 State Ownership of Software and Deliverables. Except as set forth in Section 7.2, the State is and will be the sole and exclusive owner of all rights, title, and interest in and to all Software and Deliverables, including all Intellectual Property Rights. In furtherance of the foregoing and subject to Section 7.2:

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

(b) To the extent any Deliverables and related intellectual property 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 Deliverables, including all Intellectual Property Rights; and

(ii) irrevocably waives 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 Deliverables.

(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 Section 7.1, or otherwise as may be necessary or useful for the State to prosecute, register, perfect, record, or enforce its rights in or to any Deliverable or any Intellectual Property Right therein. Contractor hereby appoints the State as Contractor’s attorney-in-fact with full irrevocable power and authority to take any such actions and execute any such documents if Contractor refuses, or within a period deemed reasonable by the State otherwise fails, to do so.

7.2 Pre-Existing Works.

(a) Ownership of all Pre-Existing Works, including all Intellectual Property Rights therein, is and will remain with its respective owners, subject to the following licenses.

(b) Pre-Existing Works License(s). To the extent any Pre-Existing Works are incorporated into or necessary for the use of the Deliverable, Contractor hereby grants to the State a non-exclusive, irrevocable, royalty free, fully paid-up, perpetual, worldwide license to its Contractor Pre-Existing Works and Contractor will secure for the State, at Contractor’s sole cost and expense, a non-exclusive, irrevocable, royalty free, fully paid-up perpetual, worldwide license or other applicable rights, licenses, consents and approvals for any Third-Party Components and Open-Source Components provided by Contractor, in each case that will allow the State to use and otherwise exploit the Deliverable throughout the world for all or any purposes whatsoever. Each license will:

(i) include the rights to use, reproduce, perform (publicly or otherwise), display (publicly or otherwise), modify, improve, create derivative works of, distribute, import, make, have made, sell and offer to sell, or sublicense the Pre-Existing Works as part of or in connection with the Deliverable, including all such modifications, improvements and derivative works thereof, solely as part of, or as necessary to use, and exploit, the Deliverable; and

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

(iii) For clarity, this license grant does not give the State the right to extract Pre- Existing Works from the Deliverable in order to use Pre-Existing Works independent of the Deliverable. Nothing in this Contract will be construed to transfer ownership of any Pre-Existing Works to the State.

(c) If Contractor is not able to secure the rights in Third-Party and Open-Source Components, as set forth in Section 7.2(b) above, Contractor will not include Third-Party and Open-Source Components in any Deliverable.

(d) Contractor will ensure that its use and incorporation of any Pre-Existing Works does not infringe upon the rights of any third party or otherwise limit the State’s rights to use the Deliverable.

8. Installation and Site Preparation. Unless otherwise set forth in a Statement of Work, Contractor is responsible for ensuring the relevant Operating Environment is set up and in working order to allow Contractor to deliver and install the Software on or prior to the applicable date.

Contractor will provide the State with such notice as is specified in the Statement of Work, prior to delivery of the Software to give the State sufficient time to prepare for Contractor’s delivery and installation of the Software. If the State is responsible for Site preparation Contractor will provide such assistance as the State requests to complete such preparation on a timely basis.

9. Software Acceptance Testing.

9.1 Acceptance Testing.

(a) Unless otherwise specified in a Statement of Work, upon installation of Software, or when Contractor notifies the State in writing that Software is ready for testing, Acceptance Tests will be conducted as set forth in this Section 9 to ensure the 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 such Software or the receipt by the State of the notification referenced in Section 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 or, if the Statement of Work does not specify, the State, 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; and

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

(c) Upon delivery or installation of any additional or modified modules or components to the Software, including but not limited to application programming interfaces, or any other applicable Software Deliverables, Integration Testing may be performed to ensure full operability, integration, and compatibility among all elements of the Software. This includes but is not limited to testing the integration of the Software with external systems, databases, and third-party services, as applicable. Integration Testing is subject to all procedural and other terms and conditions set forth in this Section 9.

(d) 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 Software or part or feature of the Software. In such event, Contractor will immediately, and in any case 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, Nonconformities, and Acceptance. Within 15 Business Days following the completion of any Acceptance Tests, including any Integration Testing, the party responsible for conducting the tests will prepare and provide to 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 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 Section 9.3 and Section 9.4.

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

(c) If such notice is provided by Contractor and no Nonconformities are identified, the State will have 30 Business Days to use the Software in the Operating Environment and determine, in the exercise of its sole discretion, whether it is satisfied that the 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 Software and of the State’s non-acceptance thereof, whereupon the parties’ rights, remedies and obligations will be as set forth in Section 9.3 and Section 9.4; or

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

9.3 Failure of Acceptance Tests. If Acceptance Tests identify any Nonconformities, Contractor, at Contractor’s sole cost and expense, will remedy all such Nonconformities and re-deliver the 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 Section 9.2 (a) or 9.2(c)(i), identifying any Nonconformities.

9.4 Repeated Failure of Acceptance Tests. If Acceptance Tests identify any Nonconformity in the Software after a second or subsequent delivery of the Software, or Contractor fails to re-deliver the 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 Software as a nonconforming Deliverable, in which case the Fees for such Software will be reduced equitably to reflect the value of the Software as received relative to the value of the Software had it conformed; or

(c) deem the failure to be a non-curable material breach of this Contract and a Statement of Work and terminate this Contract in accordance with Section 16.

9.5 Acceptance. Acceptance of each Software Deliverable (subject, where applicable, to the State’s right to Integration Testing) and Software as a whole will occur on the date that is the earliest of the State’s delivery of a notice accepting such Software under Section 9.2(b) or 9.2(c)(ii).

10. Non-Software Acceptance.

10.1 All 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 in writing 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.

10.2 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.

10.3 If Contractor is unable or refuses to correct the deficiency within the time response standards set forth in this Contract, the State may terminate this Contract 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;

(f) or 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 may 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 Deliverables and Services 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 (including, but not limited to, applicable credits or liquidated damages) 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 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.

13.7 Pricing/Fee Changes. Throughout the Term, all Fees will be as set forth in the Pricing Schedule and will not be increased.

14. Liquidated Damages.

http://www.michigan.gov/SIGMAVSS

14.1 The parties understand and agree that any liquidated damages (which include but are 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 to 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 any or all activities under this 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 this Contract or delivery order or any Statement of Work, in whole or in part.

The State will not pay for Services or Deliverables 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 within this Contract will not be construed to mean that other breaches are not material.

(b) If the State terminates this Contract under this Section 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 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 Section 16.2.

(d) The State will only pay for amounts due to Contractor for Services 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 Services from other sources.

(e) Contractor must submit all invoices for Services and 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 Services 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 Section 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 Services and 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 Services 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 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 and Deliverables 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 23, 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 termination date; and

(vi) 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 any and all actions, claims, losses, liabilities, damages, costs, attorney fees, and expenses (including those required to establish the right to indemnification), arising out of or relating to:

(a) any breach by Contractor (or any of Contractor’s employees, agents, subcontractors, or by anyone else for whose acts any of them may be liable) of any of the promises, agreements, representations, warranties, or insurance requirements contained in this Contract;

(b) any 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, 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. This indemnification obligation includes without limitation, any amounts the State is required to pay to third parties, as well as the State’s own direct and indirect losses, damages and costs resulting from the infringement or alleged infringement.

18.2 If any Deliverable, or any component thereof, other than State Materials, is found to be infringing or if any use of any Software 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 Section 18.3, the State, in its sole discretion, may terminate this Contract under Section 16.

18.5 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.

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 this 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 this 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 Deliverables and/or Services, including a license to collect, process, store, generate, and display State Data only to the extent necessary in the provision of the Deliverables and/or Services. 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 access, use, disclosure, or loss;

(b) use and disclose State Data solely and exclusively for the purpose of providing the Deliverables and/or Services, such use and disclosure being in accordance with this Contract, any applicable Statement of Work, and applicable law;

(c) keep and maintain State Data in the United States or its territories;

(d) not permit any Contractor Personnel to Access any State Data or State Systems from outside of the United States or its territories; and

(e) not use, sell, rent, transfer, mine, distribute, commercially exploit, or otherwise…