190000000360.pdf

STATE OF MICHIGAN

CENTRAL PROCUREMENT SERVICES

Department of Technology, Management, and Budget

525 W. ALLEGAN ST., LANSING, MICHIGAN 48913

P.O. BOX 30026 LANSING, MICHIGAN 48909

CONTRACT CHANGE NOTICE

Change Notice Number 2 to

Contract Number 190000000360

SpitzleyL4@michigan.gov

Lisa Spitzley

Lisa Spitzley tina.spanhak@dell.com

Tina Spanhak

Round Rock, TX 78682

DELL FINANCIAL SERVICES L.L.C.

CV0062710

512-723-6092

One Dell Way

(517) 249-0440 S T A T E

P ro g ra m

M a n a g e r

C o n tra ct

A d m in istra to r

C O

N T R A C T O

R

DTMB

517-249-0440

DTMB

spitzleyl4@michigan.gov

$3,154,952.95

February 1, 2019 January 31, 2024

LEASING PREQUALIFICATION PROGRAM - LEASE SCHEDULE 1

January 31, 2024

INITIAL AVAILABLE OPTIONS EXPIRATION DATE

BEFORE

5 - 1 Year

PAYMENT TERMS DELIVERY TIMEFRAME

NET 45

ALTERNATE PAYMENT OPTIONS EXTENDED PURCHASING

☐ P-Card ☐ PRC ☐ Other ☐ Yes ☒ No

MINIMUM DELIVERY REQUIREMENTS

DESCRIPTION OF CHANGE NOTICE

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

☐ N/A ☐ N/A N/A

CURRENT VALUE VALUE OF CHANGE NOTICE ESTIMATED AGGREGATE CONTRACT VALUE

N/A

$0.00 $3,154,952.95

Effective May 3, 2019 Addendum B of Leasing Schedule 1 is updated, see attached document.

All other terms, conditions, specifications and pricing remain the same per Contractor and Agency agreement, and DTMB Procurement approval.

INITIAL EXPIRATION DATEINITIAL EFFECTIVE DATE

N/A

DESCRIPTION

CONTRACT SUMMARY

Addendum B to Lease Schedule No. 1

SCHEDULE OF PAYMENTS

Compound Period:

Interest Rate:

Monthly

4.199%

Amount Financed: $ 3,083,658.48

Total Cost: $3,154,952.95

Prepayment premium (if any) $ N/A

CASH FLOW DATA

Event Date Amount Number Period End Date

1 Loan 04/15/2019 $ 3,083,658.48 1

2 Payment 04/15/2019 $ 630,990.59 5 Annual 04/15/2023

AMORTIZATION SCHEDULE

Loan 4/15/2019 $3,083,658.48

DLED* ($177,310.36) $2,906,348.12

1 $630,990.59 $0.00 $630,990.59 $2,275,357.53

2 $630,990.59 $97,401.58 $533,589.00 $1,741,768.53

3 $630,990.59 $74,560.16 $556,430.43 $1,185,338.10

4 $630,990.59 $50,740.95 $580,249.63 $605,088.47

5 $630,990.59 $25,902.12 $605,088.47 $0.00

Grand

Totals:

$3,154,952.95 $248,604.81 $2,906,348.12

Revised 5/03/2016

Lease No. I of Contract No. l 90000000360

CENTRAL PROCUREMENT SERVICES

Department of Technology, Management, and Budget

525 W. ALLEGAN ST., LANSING, MICHIGAN 48913

P.O. BOX 30026 LANSING, MICHIGAN 48909

CONTRACT CHANGE NOTICE

Change Notice Number 1 to

171190000000360Contract Number

SpitzleyL4@michigan.gov

Lisa Spitzley

Lisa Spitzley tina.spanhak@dell.com

Tina Spanhak

Round Rock, TX 78682

DELL FINANCIAL SERVICES L.L.C.

CV0062710

512-723-6092

One Dell Way

(517) 249-0440 S T A T E

P ro g n a g e r

C o n tra ct

A d m in istra to r

C O

N T R A C T O

R

DTMB

517-249-0440

DTMB

spitzleyl4@michigan.gov

$0.00

April 9, 2019 January 31, 2024

MASTER LEASE FOR STATEWIDE FINANCIAL LEASING PREQUALIFICATION PROGRAM

January 31, 2024

INITIAL AVAILABLE OPTIONS EXPIRATION DATE

BEFORE

5 - 1 Year

PAYMENT TERMS DELIVERY TIMEFRAME

NET 45

ALTERNATE PAYMENT OPTIONS EXTENDED PURCHASING

☐ P-Card ☐ PRC ☐ Other ☐ Yes ☒ No

MINIMUM DELIVERY REQUIREMENTS

DESCRIPTION OF CHANGE NOTICE

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

☐ N/A ☐ N/A N/A

CURRENT VALUE VALUE OF CHANGE NOTICE ESTIMATED AGGREGATE CONTRACT VALUE

N/A

$3,154,952.95 $3,154,952.95

Effective April 9, 2019, please note the following:

1. This Contract is updated to add Lease No. 1 and is increased by $3,154,952.95 to cover costs for EMC Equipment as identified in attached PO No. 190000004029 with first annual payment due April 15, 2019 and final annual payment due April 15, 2023.

All other terms, conditions, specifications and pricing remain the same, per Contractor and agency agreement, DTMB Procurement approval, and State Administrative Board approval on April 9, 2019.

INITIAL EXPIRATION DATEINITIAL EFFECTIVE DATE

N/A

DESCRIPTION

LEASE SCHEUDLE

LEASE SCHEDULE to Master Equipment Lease with Early Purchase Option dated _2/1/19__between Dell Financial Services, LLC and the State of Michigan.

Lease Schedule No. 1

LESSOR: Dell Financial Services, LLC ADDRESS: One Dell Way, Round Rock, Texas 78682

STATE: State of Michigan, Department of Technology, Management and Budget

This Lease Schedule, together with the Master Agreement as so incorporated is a “Lease” as defined in the Master Agreement. Lessor hereby agrees to lease to the State, and the State hereby agrees to lease from Lessor, the Equipment upon the terms and conditions of this Lease. All capitalized terms not herein defined will have the meaning set forth in said Master Agreement and all terms and conditions of the Master Agreement are incorporated herein and made a part hereof. The State and Lessor agree that this Lease Schedule and the Master Agreement as incorporated into this Lease Schedule constitute a Lease. To the extent of direct conflict between the terms of this Lease Schedule and the express terms of the Master Agreement, the Master Agreement will prevail.

Lessor and the State hereby represent that each of their representations set forth in the Master Agreement are true and correct as though made on the Commencement Date under this Lease Schedule.

Equipment Description. See Equipment Description Addendum A attached hereto and made a part hereof.

Together with any and all additions, modifications, attachments, accessions, substitutions, replacements and parts thereof, unless the context otherwise specifically requires, all references herein to “Equipment” will mean and include Software.

The Equipment is essential to and will be used only for the purpose of performing one or more governmental functions of the State consistent with the scope of the State's authority and will not be used in a private trade or business of any person or entity.

Payment Terms: See Schedule of Payments Addendum B attached hereto and made a part hereof. All Lease Payment periods will begin on the

Lease No. 1 of Contract No. 190000000360

Commencement Date. All monthly Lease Payments will be due in arrears beginning one month from the Commencement Date and monthly thereafter.

All annual Lease Payments will be due in advance on the first day of the month after the Lease Term commences.

Miscellaneous. The terms and conditions of this Lease (including those of the Master Agreement) will apply notwithstanding any additional or different terms and conditions in any other document, including without limitation, (a) a purchase order or other instrument submitted by the State(b) any invoice or other document submitted by Lessor, or (c) any privacy policy, terms of use, or end user agreement. Unless expressly incorporated into this Lease, the terms and conditions of all such documents will be void and of no effect.

Lessor and the State have caused this Lease to be executed in their names by their duly authorized representatives as of the date first above written.

Lessor: Dell Financial Services, LLC

Name: Date:

(Signature)

Name:

(Print)

Title:

STATE: State of Michigan, Department of Technology, Management and Budget

Name: Date:

(Signature)

Name: Chelsea Lugibihl (Print)

Title: Category Manager Michigan Department of Technology, Management and Budget

See Schedule of Payments Lease payment: $630,990.59 Lease term: 5 Annual Payments Interest Rate: 1.15% End-of-Lease Purchase Option Price: $1.00

Addendum A to Lease Schedule No. 1

EQUIPMENT DESCRIPTION

One hundred percent of the financing costs will be used to acquire assets that will be capitalized.

The Equipment will be new unless otherwise stated in the Lease or the Description of Equipment below.

The following items of Equipment are hereby included under this Equipment Description Addendum to the Lease Schedule:

DESCRIPTION OF EQUIPMENT

Qty Model Description 1 Equipment, Hardware and Software as described in Contract No. 071B7700099, PO No. 190000004029

Addendum B to Lease Schedule No. 1

SCHEDULE OF PAYMENTS

Compound Period: Monthly Amount Financed: $3,083,658.48 Interest Rate: 1.15% Total Cost: $ 3,154,952.95

Prepayment premium (if any) $ N/A

CASH FLOW DATA

Event Date Amount Number Period End Date 1 Loan 04/15/2019 $3,083,658.48 1 2 Payment 04/15/2019 $ 630,990.59 5 Annual 04//15/2023

AMORTIZATION SCHEDULE

Date Funding Payment Interest Principal Balance Loan 04/15/2019 $3,083,658.48

1 $ 630,990.59 $ - $630,990.59 $2,452,667.89 2 $ 630,990.59 $28,354.82 $602,635.76 $1,850,032.13 3 $ 630,990.59 $21,387.87 $609,602.72 $1,240,429.41 4 $ 630,990.59 $14,340.37 $616,650.22 $623,779.19 5 $ 630,990.59 $7,211.39 $623,779.19 ($0.00)

Grand Totals: $3,154,952.95 $71,294.45 $3,083,658.48

CERTIFICATE OF ACCEPTANCE

RE: The Equipment (as such term is defined in the Master Agreement) described in the Equipment Description Addendum A (“Addendum”) to Lease Schedule No. 1, dated April 9, 2019 which together with the incorporated Master Equipment Lease Agreement with Early Purchase Option (“Lease”) No. 190000000360, dated as of February 1, 2019, between Dell Financial Services, LLC as Lessor, and State of Michigan, Department of Technology, Management and Budget, as the State.

In accordance with the terms of the Lease, the undersigned State hereby certifies and represents to, and agrees with Lessor as follows:

(1) All of the Equipment listed in the above-referenced Addendum has been delivered, installed, and accepted on the date hereof.

(2) The State has conducted such inspection and/or testing of the Equipment listed in the Addendum, as it deems necessary and appropriate pursuant to Section 5 of the Master Agreement, and hereby acknowledges that it accepts the Equipment for all purposes.

(3) The State is self-insured as provided in Section 25 of the Lease.

(4) No event or condition that constitutes, or with notice or lapse of time, or both, would constitute, an Event of Default (as defined in the Lease) exists at the date hereof.

STATE: State of Michigan, Department of Technology, Management and Budget

By:

Name: Chelsea Lugibihl (Print)

Title: Category Manager, Services

Acceptance Date:

NOTICE OF CONTRACT

NOTICE OF CONTRACT NO. 190000000360 .

between

THE STATE OF MICHIGAN

and

C O

N T

R A

C T

O R

Dell Financial Services, LLC

S T

A T

E

P ro g n a g e r

Lisa Spitzley DTMB

One Dell Way 517-249-0440

Round Rock, Texas 78682 SpitzleyL4@michigan.gov

Tina Spanhak C o n tr a c t

A d m in is tr a to r Lisa Spitzley DTMB

512-723-6092 517-249-0440

Tina.Spanhak@Dell.com SpitzleyL4@michigan.gov

CV0062710

DESCRIPTION: Master Lease for Statewide Financial Leasing Prequalification Program

INITIAL EFFECTIVE DATE INITIAL EXPIRATION DATE

INITIAL AVAILABLE

OPTIONS

EXPIRATION DATE BEFORE

CHANGE(S) NOTED BELOW

2/1/2019 1/31/2024 Annual Successive

Renewals

PAYMENT TERMS DELIVERY TIMEFRAME

Net 45 N/A

ALTERNATE PAYMENT OPTIONS EXTENDED PURCHASING

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

MINIMUM DELIVERY REQUIREMENTS

N/A

MISCELLANEOUS INFORMATION

THIS IS NOT AN ORDER. This Contract Agreement is awarded on the basis of our inquiring RFP No.

190000000197

ESTIMATED CONTRACT VALUE AT TIME OF EXECUTION $0.00

CONTRACT NO. 190000000360

ENTERPRISE PROCUREMENT

Department of Technology Management and Budget 525 W. Allegan St, 1st Floor, Lansing, MI 48933 P.O. Box 30026, Lansing, MI 48909

FOR THE CONTRACTOR:

Dell Financial Services, LLC Company Name

Authorized Agent Signature

Authorized Agent (Print or Type)

Date

FOR THE STATE:

Signature

Lisa Spitzley, Category Analyst Name & Title

DTMB

Agency

Date

MASTER EQUIPMENT LEASE AGREEMENT

WITH EARLY PURCHASE OPTION

This Master Equipment Lease Agreement with Early Purchase Option (this

“Master Agreement”) is dated _________________________, (“Effective Date”) and entered into between Dell Financial Services, LLC (“Lessor”) and the State of

Michigan, Department of Technology, Management and Budget, an agency of the

State of Michigan (“State”).

WHEREAS, Lessor and the State desire to enter into this Master Agreement to facilitate the execution and performance of individual leases incorporating this

Master Agreement under which Lessor will lease Equipment to the State, subject to the terms and conditions of and for the purpose set forth in this Master Agreement;

NOW THEREFORE, in consideration of the above and other good and valuable consideration, the receipt and sufficiency of which is hereby mutually acknowledged, the parties hereby agree as follows:

1. Definitions.

The following terms will have the meanings indicated below (such meanings to be equally applicable to the singular and plural forms thereof):

“Acceptance Certificate” means a certificate, substantially in the form attached hereto as Exhibit B, which will be executed and delivered to Lessor as evidence of the acceptance of the Equipment by the State.

“Business Day” means a day other than a Saturday, Sunday or State Holiday.

“Concluding Payment” means the payment for a given date equal to the sum of the outstanding principal balance as of that date, plus any unpaid accrued interest as of that date, plus any prepayment premium, plus one dollar ($1.00).

“Commencement Date” is defined in Section 10.

“Default” is defined Section 31.

“DTMB Software” means any software used on the hardware other than software financed or otherwise provided by Lessor, including software owned or under license to the DTMB or the State.

“Early Purchase Option” means the State's option to purchase all of Lessor's right, title and interest in and to, all Equipment leased under any Lease, or any lesser portion thereof specified by the State, as provided in Section 12.

“Equipment” means the items described as Equipment in each Lease, together with any and all additions, modifications, attachments, accessions, substitutions, replacements and parts thereof. All references herein to “Equipment” will (i) include

Software unless otherwise expressly provided in the Lease Schedule, but (ii) exclude

DTMB Software.

“Equipment Cost” means the amount Lessor pays for the Equipment and any similar costs with respect to the Equipment.

“Event of Default” is defined in Section 31.

“Financing Proposal Response” means Lessor’s response to the State’s Request for Financing Proposal, submitted by Lessor pursuant to Section 3 and in the form attached hereto as Exhibit D; provided nothing in any Financing Proposal may supplement, amend or otherwise alter the terms of this Master Agreement.

“Fiscal Year” means for each Lease, the fiscal year used by the State. “Beginning

Fiscal Year” means the Fiscal Year in which the first Lease payment is due. Any

Fiscal Year after the Beginning Fiscal Year is a subsequent or succeeding Fiscal Year.

“Initial Term” is defined in Section 10.

“Lease” means collectively a Lease Schedule together with this Master Agreement, as incorporated in to such Lease Schedule, a Lease Payment Schedule, and an

Acceptance Certificate.

“Lease Payments” means the basic lease payments, payable by the State pursuant to the provisions of this Master Agreement, as calculated in accordance with

Addendum B to the Lease Schedule and set forth in each Lease. Lease Payments will be payable by the State to the Lessor in the amounts and at the times set forth in the

Schedule of Payments. The State will pay Lessor the Lease Payments as set forth on the attached Schedule of Payments within forty-five calendar days following receipt of proper invoices.

“Lease Schedule” means a lease schedule substantially in the form attached hereto as Exhibit A, executed by the State and Lessor. A Lease Schedule will not include terms or conditions other than those provided in or expressly contemplated by this

Master Agreement and Exhibit A.

“Lease Term” means the term of a Lease Schedule, which as to all items of

Equipment will not exceed the useful life of the item, commencing on the first day when such items are accepted by the State, as evidenced by its execution of an

Acceptance Certificate.

“Purchase Agreement” means a purchase contract or order between the State of

Michigan and a Vendor for the purchase of Equipment.

“Renewal Term” is defined in Section 10.

“Request for Financing Proposal” means a request submitted by the State to

Lessor pursuant to Section 3 and in the form attached hereto as Exhibit C; provided nothing in any Request for Financing Proposal may supplement, amend or otherwise alter the terms of this Master Agreement.

“Schedule of Payments” means the schedule of Lease Payments due under a Lease with respect to the Equipment in the form attached to a Lease Schedule as Addendum

B.

“Software” means any computer program described in a Lease Schedule other than

DTMB Software, whether in source code, object code, or in any other form, together with all of the State's rights as licensee or otherwise under any agreements with the licensor thereof, and all associated media and supporting documentation.

“State” means the State of Michigan.

“Term” means the term of this Master Agreement as provided Section 10.

“Vendor” as to each item of Equipment means the supplier as defined in the MCL

440.2803(1)(x).

2. General. Lessor and the State may execute Lease Schedules only in accordance with and subject to the terms and conditions of this Master Agreement.

Each Lease will incorporate the terms and conditions of this Master Agreement and will, together with this Master Agreement, constitute a separate and distinct Lease.

No Leases may be cross-defaulted or cross-collateralized. Anything herein to the contrary notwithstanding, this Master Agreement may not be supplemented, amended or altered in any way without the express written consent of Lessor and the

State. Execution of this Agreement does not create an obligation of either party to lease to or from the other.

3. Request for Financing Proposal/Implementation of Leases. If the State desires to lease equipment it will send to Lessor a Request for Financing Proposal, which may be accompanied by: (a) the applicable Purchase Agreement, quote or equivalent setting forth a description of the Equipment, including the cost and

Vendor of such Equipment; (b) the desired Lease Term (not to exceed the useful life of the item); and (c) such other material information as Lessor may reasonably request. Lessor acknowledges and agrees that the State is the only entity authorized to submit a Request for Financing Proposal. Lessor will not rely upon any representation by any other person or entity other than the State whatsoever for such purposes.

Lessor agrees to respond to any Request for Financing Proposal by the designated deadline with an acceptance or rejection.

If Lessor accepts the Request for Financing Proposal, Lessor will prepare a Financing

Proposal Response (see attached Exhibit D) including: the proposed interest rate quote effective for 30 days from the Request for Financing Proposal deadline, proposed prepayment premium, and a Schedule of Payments (Amortization

Schedule).

The State will attempt to notify Lessor within (5) Business Days of the Request for

Financing Proposal Response deadline to respond of its decision to accept the terms of the Financing Proposal Response. Upon acceptance of a Financing Proposal

Response, the State will prepare, sign and remit to Lessor a Lease Schedule together with an Equipment Description, Schedule of Payments, IRS Form 8038-G, Opinion of Counsel (see attached Exhibit E), and Signature Authority Policy (see attached

Exhibit F) (collectively “Closing Documents”). The Acceptance Certificate will be executed and remitted after acceptance according to the terms of this Master

Agreement.

The State reserves the right to request a Financing Proposal Response prior to obtaining a purchase order or quote, as required in the subparagraph a) in the first paragraph of this Section, for evaluating the potential to lease equipment. The State will specify in any such request that no purchase order or quote has been issued and that the request for lease terms is for evaluation purposes until the State issues a purchase order for the equipment, at which time, a formal Request for Financing

Proposal will be issued as provided above.

4. Delivery and Installation of Equipment. The State will order the

Equipment, cause the Equipment to be delivered and installed at the location agreed upon and pay any and all delivery and installation costs in connection therewith.

5. Acceptance. After delivery and inspection of the Equipment, the State will determine whether the Equipment is acceptable as described in the Purchase

Agreement between the Vendor and the State of Michigan. The State will confirm to

Lessor its written acceptance of the Equipment by executing a “Certificate of

Acceptance.” A blank, unexecuted copy of a Certificate of Acceptance is attached as

Exhibit B. The “Acceptance Date” in Exhibit B will be the Commencement Date of the Lease as provided in Section 10.

6. Payment to Vendor. On or within seven Business Days after its receipt of an executed Acceptance Certificate and Closing Documents, Lessor will pay the

Equipment Cost directly to the Vendor or other party to whom payment is due as noted on a proper and valid invoice from Vendor. Lessor will not invoice the State for any Lease Payment, and no Lease Payment will be due, owing or payable with respect to any period prior to the payment in full of the Equipment Cost. Upon request, Lessor will certify to the State that the Equipment Cost of any designated item of

Equipment has been paid in full.

7. State Representations. The State represents, as of the Commencement

Date of this Lease that: (a) the State has the full power and authority to enter into a

Lease and to perform all of its obligations; (b) the State has complied with such public bidding requirements that may apply to the applicable Lease and the acquisition by the State of the Equipment; (c) the Equipment will be used by the State solely and exclusively for the purpose of performing essential governmental functions; (d) the equipment is and will remain personal property; (e) during the Lease term, State shall not directly or indirectly, create, incur, assume, or suffer to exist any mortgage, pledge, lien, charge, encumbrance, or claim on or with respect to the Equipment, other than the respective rights of Lessor and Lessee as provided in this Lease.

8. Lessor Representations. Lessor represents as of the Commencement Date of this Lease that: (a) Lessor will pay for the Equipment as specified in Section 6; (b)

Pursuant to Section 12, Lessor will convey clear title for the Equipment to the State if and when the State exercises the purchase option; (c) Lessor is neither currently engaged in nor will engage in the boycott of a person based in or doing business with a strategic partner as described in 22 USC 8601 to 8606; and (d) Lessor or any of its subcontractors, manufacturers, or suppliers does not appear in the register compiled pursuant to 1980 PA 278, as amended, MCL 423.321 et seq. (Employers Engaging in

Unfair Labor Practices Act). The State may void this Lease if Lessor or any subcontractor, manufacturer, or supplier of Lessor appears in that register. A breach of this Section is a material breach of this Lease.

9. Nondiscrimination. Under the Elliott-Larsen Civil Rights Act, 1976 PA 453, MCL 37.2101, et seq., the Persons with Disabilities Civil Rights Act, 1976 PA 220, MCL 37.1101, et seq., and Executive Directive 2019-09, Lessor and its subcontractors agree not to discriminate against an employee or applicant for employment with respect to hire, tenure, terms, conditions, or privileges of employment, or a matter directly or indirectly related to employment, because of race, color, religion, national origin, age, sex (as defined in Executive Directive 2019-09), height, weight, marital status, partisan considerations, any mental or physical disability, or genetic information that is unrelated to the person’s ability to perform the duties of a particular job or position. Breach of this covenant is a material breach of this Master

10. Term and Lease Term. The Term of this Master Agreement is effective as of the Effective Date of this Master Agreement and will continue until terminated in accordance herewith. Lessor acknowledges that there are obligations that will continue after all Leases have expired or terminated.

Each Lease Schedule will set forth the Lease Term which will consist of an Initial

Term and subsequent Renewal Terms from the Commencement Date until the Lease is otherwise terminated as set forth below. The Lease Term will begin on the

Commencement Date. The Commencement Date for the Lease is the date on which the Equipment is accepted by the State in the manner described in Section 5.

The Initial Term is the period from the Commencement Date, until the end of the

Beginning Fiscal Year for which funds have been appropriated to make lease payments under this Lease. A Renewal Term is a subsequent Fiscal Year for which funds have been appropriated to make lease payments under the Lease.

The Lease Term may be continued, solely at the option of the State, at the end of the

Initial Term or any Renewal Term, for the next succeeding Renewal Term up to the maximum Lease Term set forth in the Lease. At the end of the Initial Term and at the end of each Renewal Term, the Lease Term will be automatically extended upon the successive appropriation by the Michigan State Legislature of amounts sufficient to pay Lease Payments and other amounts payable under this Lease during the next succeeding Fiscal Year, until all Lease Payments payable under this Lease have been paid in full, unless otherwise terminated.

11. Termination of Lease Term. The Lease Term for each item of Equipment will commence as provided in Section 10 and terminate upon the earliest to occur of any of the following events: (a) the termination of the applicable Lease pursuant to

Section 19; (b) the State's exercise of the Early Purchase Option as to the Equipment;

or (c) the expiration of the Lease Term as specified in the Lease Schedule upon payment of all Lease Payments thereunder.

12. Early Purchase Option. The State reserves the unilateral right to exercise an early purchase option for the Equipment. The State may exercise its right by paying to Lessor a Concluding Payment, based on the payment terms specified in the applicable Lease Payment Schedule. The Concluding Payment for a given date will be defined as the sum of the outstanding principal balance as of that date, plus any unpaid accrued interest as of that date, plus any prepayment premium, plus one dollar ($1.00). Upon receiving payment of the Concluding Payment, Lessor will transfer any and all of its rights, title, and interest to the Equipment without any warranty, express or implied, from Lessor and will covenant to the State that the

Equipment is free of any liens, claims or encumbrances arising by, through or under

Lessor.

13. Lease Payments. The State will promptly pay Lease Payments to Lessor in the amounts and on the dates more specifically described in the Lease Payment

Schedule, exclusively from funds appropriated for lease of the Equipment. Pursuant to 1984 PA 279, MCL 17.51-17.57, the State will pay Lessor a charge on any Lease

Payment, which remains unpaid after the date such Lease Payment is due. Lease

Payments consist of principal and interest portions. Lessor and the State understand and intend that the obligation of the State to pay Lease Payments under this Lease will constitute a current expense of the State of Michigan and will not in any way be construed to be a debt or general obligation of the State of Michigan in contravention of any applicable constitutional or statutory limitation or requirement concerning the creation of indebtedness by the State, including, but not limited to, Const 1963, art 9, §§12, 17, nor will anything contained herein or in a Lease constitute a pledge of the general tax revenues, credit, funds or monies of the State.

14. Electronic Payment Requirement. Electronic transfer of funds is required for payments on State Contracts. Contractors are required to register with the State electronically at http://www.michigan.gov/sigmavss. As stated in Public Act 431 of

1984, all contracts that the State enters into for the purchase of goods and services will provide that payment will be made by electronic fund transfer (EFT).

15. LEASE PAYMENTS TO BE UNCONDITIONAL. EXCEPT AS PROVIDED

IN SECTION 19, AND SUBJECT TO THE STATE’S ACCEPTANCE OF THE

EQUIPMENT AS PROVIDED IN SECTION 5, THE OBLIGATIONS OF THE

STATE TO MAKE LEASE PAYMENTS AND TO PERFORM AND OBSERVE THE

OTHER COVENANTS AND AGREEMENTS CONTAINED IN A LEASE WILL BE

ABSOLUTE AND UNCONDITIONAL IN ALL EVENTS WITHOUT ABATEMENT,

DIMINUTION, DEDUCTION, SET-OFF OR DEFENSE, FOR ANY REASON,

INCLUDING, WITHOUT LIMITATION, ANY DEFECTS, MALFUNCTIONS,

BREAKDOWNS OR INFIRMITIES IN THE EQUIPMENT OR ANY ACCIDENT,

CONDEMNATION OR UNFORESEEN CIRCUMSTANCES.

16. Continuation of Lease Term by the State. Each Lease will constitute confirmation by the State of its intention to continue to lease the Equipment beyond the Beginning Fiscal Year. Notwithstanding the foregoing, Lessor and the State agree that Section 19 of this Master Agreement will supersede any contrary implication in any Lease, in any agreement or statement by the State, and any contrary provision of law, including without limitation, the Uniform Commercial

Code as adopted in the State.

17. Tax Covenant. It is the intention of State and Lessor that the interest portion of the Lease Payments received by Lessor be and remain free from federal income taxation. State covenants that it will not intentionally perform or fail to perform any act or enter into any agreement or use or permit the use of the Equipment or any http://www.michigan.gov/sigmavss portion thereof in a manner that will have the effect of terminating the exemption from federal income taxation of the interest portion of the Lease Payments.

18. IRS Reporting. At Lessor’s request, the parties will cooperate to ensure compliance with IRS reporting requirements. State will prepare, sign and provide

Lessor with an IRS Form 8038-G, Lessor will provide the State Purchasing Director of the Department of Technology, Management and Budget with a copy and filing date of any IRS Form 8038-G filed with the IRS. However, the parties acknowledge that Lessor has the exclusive responsibility to file IRS Form 8038-G and has exclusive liability for any penalties, costs, damages, or other consequences resulting from

Lessor’s failure to file.

19. Non-appropriation. This Section applies notwithstanding anything to the contrary in the Master Agreement and any Lease thereunder. The State has an appropriation for the Equipment for the Beginning Fiscal Year, as defined in 1984

PA 431, MCL 18.1491. State agrees and understands that as of the date of execution of each Lease, all payment and performance obligations of the State during Fiscal

Years after the Beginning Fiscal Year are subject to the availability and appropriation of sufficient funds therefor. When funds are not appropriated or otherwise made available to support continuation of performance in a subsequent fiscal year, the applicable Lease will be terminated.

The State agrees to give Lessor written notice of such termination not more than 30 days after final determination of an event of non-appropriation. The failure of the

State to notify Lessor will not create any obligation on the part of the State to make

Lease Payments beyond the period for which funds have been appropriated.

If a Lease is terminated pursuant to this Section, the State agrees that the

Equipment will be returned to Lessor pursuant to Section 40.B. If any Lease is so terminated, no right of action or damages will accrue to the Lessor or its assignee for the payment of Lease payments, or the performance of any other obligations under this Master Agreement or any Lease thereunder. The State will, however, remain obligated to pay all Lease payments accrued through the end of the then current

Fiscal Year for which funds were appropriated. For avoidance of all doubt and, notwithstanding anything to the contrary contained in this Master Agreement, the termination of a Lease pursuant to this Section will not constitute an Event of Default by the State. The provisions of this Section will remain in full force and effect whether or not the State is in Default.

20. Marking; Inspection. Lessor will have the right to mark or affix a nonpermanent label on the Equipment for purposes of identifying it at a later date.

Lessor or its agents may upon 45 days written request, at its Lessor’s sole cost and expense, enter into and upon the property of the State for the purpose of inspecting the existence, condition and proper maintenance of the Equipment. Such requests to enter and inspect the Equipment is limited to once per year during the State’s normal business hours and is subject to the State’s security policies and procedures.

21. Use; Maintenance. The State will not install, use, operate or maintain the

Equipment improperly, carelessly, in violation of any applicable law or in a manner contrary to that contemplated by a Lease. The State agrees that it will, at the State's own cost and expense, maintain, preserve and keep the Equipment in good repair and working order.

22. Title to the Equipment. During the Term of this Lease, the State will not acquire title to the Equipment. With the exception for Software, title to the

Equipment will be conveyed to the State upon the occurrence of one of the following:

(a) the exercise by the State of the Early Purchase Option under Section 12; or (b) the payment by the State of all sums required to be paid under a Lease as specified in the Lease Payment Schedule. Upon the State’s exercise of the Early Purchase Option or the State’s payment of all sums due under the Lease Payment Schedule, Lessor will transfer free and clear title to the State.

23. Financing Statements. At Lessor’s request, the State will join Lessor in executing any necessary or appropriate Financing Statements indicating its obligation under a Lease.

24. Taxes, Other Governmental Charges, and Utility Charges. The parties contemplate that the Equipment will be used for governmental purposes of the State and that the Equipment will therefore be exempt from all property taxes. If the use, possession or acquisition of any Equipment is nevertheless determined to be subject to taxation, the State will pay when due all taxes and governmental charges lawfully assessed or levied against or with respect to such Equipment. The State will pay all utility and other charges incurred in the use and maintenance of the Equipment. The

State will pay such taxes or charges as the same may become due.

25. Insurance. The State and DTMB are self-insured for all risk, physical damage, and public liability and will provide proof of such self-insurance in letterform together with a copy of the statute authorizing this form of insurance.

26. Risk of Loss or Damage. The State will assume all risk of loss, theft, damage to, or destruction of the Equipment for any cause (“Loss or Damage”) upon acceptance, as described in Section 5. In the event of Loss or Damage to the

Equipment, the State will promptly report the same to Lessor and concerned governmental agencies. The State will not be relieved of its obligation to pay Lease

Payments or to perform any other obligations under this Lease by reason of any Loss or Damage. In the event of any Loss or Damage, the State will either: (a) promptly replace lost Equipment or promptly repair damaged Equipment and place it in good repair and working condition and continue to make all Lease Payments; or (b) within sixty (60) Business Days of notifying Lessor that the Equipment will not be repaired, pay Lessor the outstanding principal balance and any unpaid accrued interest as of the payoff date, as described in the Lease Payment Schedule. The State will have the right to retain any residual insurance benefit, which remains after payment to Lessor of the outstanding principal balance and unpaid accrued interest. Notwithstanding any of the foregoing, replaced Equipment shall be of equal or greater value and utility as the original Equipment as of the time of Loss or Damage.

27. DISCLAIMER OF WARRANTIES. LESSOR MAKES NO WARRANTY OR

REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE,

DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR PARTICULAR

PURPOSE OR FITNESS FOR USE OF THE EQUIPMENT, OR WARRANTY WITH

RESPECT THERETO WHETHER EXPRESS OR IMPLIED, AND THE STATE

ACCEPTS SUCH EQUIPMENT AS IS.

28. DISCLAIMER OF DAMAGES. IN NO EVENT WILL LESSOR BE LIABLE

FOR ANY INCIDENTAL, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGE

IN CONNECTION WITH OR ARISING OUT OF A LEASE OR THE EXISTENCE,

FURNISHING, FUNCTIONING OR THE STATE'S USE OF ANY ITEM, PRODUCT

OR SERVICE PROVIDED FOR IN THIS LEASE.

29. Vendor's Warranties. Upon execution of this Lease, Lessor irrevocably appoints the State as its agent and attorney-in-fact during this Lease, so long as the

State will not be in default under the Lease, to assert from time to time whatever claims and rights, including, but not limited to, warranties, relating to the Equipment that Lessor may have against Vendors. The State’s sole remedy for the breach of such warranty, indemnification or representation will be against Vendors of the

Equipment, and not against Lessor. Any such matter will not have any effect whatsoever on the rights and obligations of Lessor with respect to this Lease, including the right to receive full and timely payments under this Lease. The State acknowledges that Lessor has not made any representations regarding the existence or availability of warranties made by Vendors.

30. Assignment. Lessor's right, title and interest in and to this Lease, including

Lease Payments and any other amounts payable by the State thereunder and all proceeds therefrom, may only be assigned and reassigned to one or more assignees or subassignees by Lessor with the written consent of the State, which will not be delayed or unreasonably withheld. Assignments may include without limitation assignment of all of Lessor's security interest in the Equipment listed in this Lease and all rights in the Lease related to such Equipment. Notwithstanding the above, the State hereby agrees that Lessor may, without the consent of the State, but with notice to the State, sell, dispose of, or assign this Lease through a pool, trust, limited partnership, or other similar entity, whereby one or more interests are created in this

Lease, or in the Equipment listed in or the Lease Payments under a Lease. In accordance with Section 149(a) of the Internal Revenue Code of 1986, as amended, Lessor will keep a record of all such assignments and provide written notice to the

State. Lessor agrees to continue servicing the Lease or arrange for a servicer with equal standards of high quality. Lessor also agrees remittance will remain with a single servicer.

None of the State's right, title and interest in, to and under any Lease or any portion of the Equipment listed in each Lease may be assigned, subleased, or encumbered by the State for any reason without obtaining prior written consent of Lessor, except in the event of a legislative mandate or executive order.

31. Events of Default; Default Defined. The following will be “Events of

Default” with respect to a Lease and the terms “Event of Default” will mean, whenever used in this Agreement, any one or more of the following events, unless any such event occurs solely by reason of the termination pursuant to Section 11.

A. State Default. Any of the following events will constitute an Event of

Default under a Lease: (a) failure by the State to observe and perform any covenant, condition or agreement on its part to be observed or performed, including any payments required to be paid under the Lease, for a period of thirty (30) Business Days after written notice specifying such failure and requesting that it be remedied is given to the State by

Lessor; or (b) any representation or warranty made by the State in or pursuant to this Lease proves to be false in any material respect when made and such breach of representation and warranty is not cured within ten (10) Business Days of the State’s receipt of written notice of such breach.

B. Lessor Default. Any of the following events will constitute an Event of Default under a Lease: (a) failure by Lessor to, at the request of the

State, promptly forward payment to the Vendor for the Equipment after receipt of fully executed documents including a Certificate of

Acceptance, pursuant to Section 11; (b) failure by Lessor to observe and perform any covenant, condition or agreement on its part to be observed or performed, other than as referred to in subparagraph (a) above, for a period of thirty (30) Business Days after written notice specifying such failure and requesting that it be remedied is given to Lessor by the State;

(c) failure to convey clear title as required under this Lease; or (d) any representation or warranty made by Lessor in or pursuant to this Lease proves to be false in any material respect when made and such breach of representation and warranty is not cured within ten (10) Business

Days of Lessor’s receipt of written notice of such breach.

32. Lessor’s Remedies on Default by the State. Whenever the State defaults, and the default is not cured within the period specified in Section 31.A., Lessor will have the right, at its sole option without any further demand, to take one of the following remedial steps: (a) by written notice to the State, declare all Lease

Payments payable to the end of the period for which an appropriation has been made, to be immediately due and payable, or (b) take whatever action at law or in equity may appear necessary or desirable to enforce its rights under this Lease or as a secured party in any or all of the Equipment including peaceably obtaining possession of the Equipment.

33. State’s Remedies on Default by Lessor. Whenever Lessor defaults and the default is not cured within the period specified in Section 31.B., the State will have the right, at its sole option without any further demand, take whatever action at law or in equity may appear necessary or desirable to enforce its rights under this Master

34. No Remedy Exclusive. No remedy herein conferred upon or reserved to

Lessor or the State is intended to be exclusive and every such remedy will be cumulative and will be in addition to every other remedy given under this Master

Agreement now or hereafter existing at law or in equity.

35. Notices. All notices or other communications under this Master Agreement will be deemed effectively given: (a) when received, if delivered by hand (with written confirmation of receipt); (b) when received, if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by e-mail (with confirmation of transmission), if sent during normal business hours of the recipient, and on the next business day, if sent after normal business hours of the recipient; or (d) on the fifth (5th) day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid.

To Lessor: _Mark Opyd, Dell EMC___________

_708-941-9163____________________

__Mark.Opyd@dell.com____________

To the State: Lisa Spitzley, DTMB_____________

_517-249-0440____________________

_ SpitzleyL4@michigan.gov ________

36. Indemnification. Lessor does hereby agree to indemnify, defend, and hold the State harmless from and against any and all claims, losses, costs, attorneys’ fees, and expenses arising out of or directly related to the breach of Lessor's representations under this Lease.

37. Software Ownership. Software that the State acquires from the Vendor and finances with Lessor remains the property of the licensor. Ownership of the

Software is governed by the license agreement between the licensor and the State and is not affected by this Lease.

38. No Cross-Default or Cross-Collateralization. To avoid any doubt as to the intention of the parties, an Event of Default under any applicable Lease by the State will constitute an Event of Default only under such Lease and not under any other

Lease. The collateral for any Lease will be limited to the Equipment financed by that

Lease.

39. Lessor End-of-Term Obligation. Lessor will provide an end-of-term notice to the State under each Lease not less than one hundred and twenty (120) nor more than one hundred and eighty (180) days before the end of the Lease Term of such

Lease. Such notice will state that the State will exercise one of the options available under Section 40 below within sixty (60) days before the expiration of the Lease Term or be required to purchase the Equipment pursuant to Section 40.A. Under no circumstances will any Lessor bill for or receive Lease Payments with respect to any period after expiration of the Lease Term, provided that nothing in this sentence will limit any Lessor's right to pursue remedies for an Event of Default.

40. State End-of-Term Options. At the end of the Lease Term under the applicable Lease, if all Lease payments have been paid and any Event of Default, if any, has been cured, and except for Equipment purchased pursuant to any early purchase option under the Lease, including purchases due to equipment damage, the

State may, at its option, exercise one of the options provided in this Section upon not less than 60 days' notice. If the State fails to give notice of its election of either such option to Master Lessors earlier than sixty (60) days before the end of the Lease Term, then the purchase specified in Section 40.A. will be the option elected by the State.

A. Purchase. The State may purchase any or all Equipment leased under such Lease, or any lesser portion thereof, for the nominal amount of one dollar ($1.00). Upon such payment, Lessor will transfer to the State all of Lessor's right and interest in and to the Equipment, free of any lien or claim arising by, through or under Lessor. Lessor hereby agrees to waive the receipt of such $1.00 payment unless Lessor separately invoices the State for such payment.

B. Return. The State may return the Equipment to the Lessor in good condition, less ordinary wear and tear, and otherwise in accordance with this Master Agreement on the following terms and conditions:

i. The State will de-install the Equipment if de-installation is necessary by causing such Equipment to not be physically attached or connected to any other item of real or personal property, unless such attachment has become part of the Equipment as specified by the terms of the Lease, provided that the State will not be required to remove or transport any item of Equipment.

ii. The State will permanently remove all data, DTMB Software, and any other proprietary information from any Equipment returned to

Lessor.

iii. Lessor agrees that should any Equipment under this lease be replaced or substituted under Vendor’s warranty, such Equipment is deemed an acceptable replacement for the original in the event of return of Equipment at lease termination.

41. Equipment Modifications. Without the prior written consent of Lessor, which consent will not be unreasonably withheld, the State will not make any alterations, modifications or attachments to the Equipment (other than the Software) which (a) will substantially impair the value of the Equipment, and (b) cannot be removed without materially damaging the functional capabilities or economic value of the Equipment. Notwithstanding the foregoing, the State may at any time install or remove any DTMB Software.

42. Records Retention and Audit. Lessor will retain all its records related to a

Lease for a period of three years following the latter of expiration or termination of the Lease or any extension (“Audit Period”), including without limitation, all records involved in Equipment acquisition, Lease origination, invoicing and payment, warranty enforcement, claims or disputes, and any aspect of contract administration.

If an audit, litigation, or other action involving the records is initiated before the end of the Audit Period, Lessor must retain the records until all issues are resolved.

Lessor will allow and cooperate in an audit of all the above-referenced records by the

State.

43. Binding Effect. This Master Agreement will inure to the benefit of, and will be binding upon, all parties and their respective successors and assigns.

44. Severability. In the event any provision of this Master Agreement will be held invalid or unenforceable by any court of competent jurisdiction, such holding will not invalidate or render unenforceable any other provision hereof.

45. Amendments, Changes and Modifications. This Master Agreement and any Lease hereunder may be amended only by written agreement of the parties.

46. Waiver. Neither Lessor or the State waive any prior or subsequent breach of the terms of either the Master Agreement or any Lease by making or accepting payments on the applicable Lease, by failing to terminate the Master Agreement or applicable Lease for lack of performance, or by failing to strictly or promptly insist upon any term of the Master Agreement or applicable Lease.

47. Execution in Counterparts and Electronically. This Master Agreement and each Lease Schedule may be simultaneously executed in several counterparts, each of which will be an original and all of which will constitute but one and the same instrument. A scanned electronic copy of any individual executed original signed document will constitute one and the same instrument, thus negating the need to mail or retain any paper copies of the executed original document.

48. Governing Law. This Master Agreement is governed, construed, and enforced in accordance with Michigan law, excluding choice-of-law principles, and all claims relating to or arising out of this Contract are governed by Michigan law, excluding choice-of-law principles. Any dispute arising from this Master Agreement must be resolved in the Michigan Court of Claims. Complaints against the State must be initiated in Ingham County, Michigan. Lessor waives any objections, such as lack of personal jurisdiction or forum non conveniens. Lessor must appoint agents in Michigan to receive service of process.

49. Third Party Beneficiary. This Master Agreement and each Lease are made solely and specifically…