220000000124.pdf

STATE OF MICHIGAN

ENTERPRISE PROCUREMENT

Department of Technology, Management, and Budget 320 S. Walnut Street 2nd Floor Lansing, MI 48933

P.O. BOX 30026 LANSING, MICHIGAN 48909

CONTRACT CHANGE NOTICE

CONTRACT SUMMARY

MDE EANS ClassWallet System

INITIAL EFFECTIVE DATE INITIAL EXPIRATION DATE INITIAL AVAILABLE OPTIONS EXPIRATION DATE

BEFORE

October 26, 2021 December 31, 2024 10 - 12 Months December 31, 2024

PAYMENT TERMS DELIVERY TIMEFRAME

ALTERNATE PAYMENT OPTIONS EXTENDED PURCHASING

MINIMUM DELIVERY REQUIREMENTS

P-Card Direct Voucher (PRC) Other Yes No

6100 Hollywood Blvd, Suite 108

Hollywood FL 33024

Jamie Rosenberg

877-969-5536 7980 jrosenberg@classwallet.com

VS0199348

Kleo, Inc. d/b/a ClassWallet

C O

N

TR

A C

TO

R

Brandon Samuel

(517) 249-0439

DTMB

Various Various

SamuelB@michigan.gov

C ontract

A dm inistrator Program M anagerSTA

TE

Change Notice Number 2

Contract Number MA220000000124 to

DESCRIPTION OF CHANGE NOTICE

OPTION EXTENSIONLENGTH OF OPTION LENGTH OF EXTENSION REVISED EXP. DATE

CURRENT VALUE VALUE OF CHANGE NOTICE ESTIMATED AGGREGATE CONTRACT VALUE

72 Months December 31, 2030

$520,660.00 $570,000.00 $1,090,660.00

DESCRIPTION

Effective December 11, 2024 this contract is hereby amended for the following:

1. Exercise 6-1 year options. New expiration date is December 31, 2030.

2. Additional funding of $575,000 for current services specifically - Project Public Act 120 of 2024 section 27K School Aid - Michigan Department of Education Teacher Student Loan Repayment Program. SOW will be provided in subsequent change notice.

All other terms, conditions, specifications, and pricing remain the same. Per contractor and agency agreement, DTMB Central Procurement Services approval, and State Administrative Board approval on September 10, 2024.

AGENCY NAME PHONE EMAIL

MDE Kevin Walters 517-335-0543 WaltersK5@michigan.gov

DTMB Sean Strom 517-335-6561 StromS@michigan.gov

MDE Michael Powell 517-241-6979 PowellM12@michigan.gov

Program Managers for

Multi-Agency and Statewide Contracts

CHANGE NOTICE NO. 2 TO CONTRACT NO. MA220000000124

STATE OF MICHIGAN

CENTRAL PROCUREMENT SERVICES

Department of Technology, Management, and Budget

320 S. WALNUT ST., LANSING, MICHIGAN 48933

P.O. BOX 30026 LANSING, MICHIGAN 48909

CONTRACT CHANGE NOTICE

Change Notice Number 1 to

220000000124Contract Number

Various

Jarrod Barron jrosenberg@classwallet.com

Jamie Rosenberg

Hollywood, FL 33024

Kleo, Inc. d/b/a ClassWallet

VS0199348

877-969-5536 7980

6100 Hollywood Blvd, Suite 108

(517) 249-0406 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

barronj1@michigan.gov

$520,660.00

October 26, 2021 December 31, 2024

MDE EANS CLASSWALLET SYSTEM

December 31, 2024

INITIAL AVAILABLE OPTIONS EXPIRATION DATE

BEFORE

10 - 1 Year

PAYMENT TERMS DELIVERY TIMEFRAME

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

☐ ☐ December 31, 2024

CURRENT VALUE VALUE OF CHANGE NOTICE ESTIMATED AGGREGATE CONTRACT VALUE

$0.00 $520,660.00

Effective 6/1/2022, the parties add eCommerce Marketplace functionality to the contract by revising and fully restating the Statement of Work Purpose Section with the attached language. All other terms, conditions, specifications, and pricing remain the same. Per contractor, agency and DTMB Central Procurement Services approval. Available Ad Board funds after this contract change notice: $249,999.99.

INITIAL EXPIRATION DATEINITIAL EFFECTIVE DATE

DESCRIPTION

CONTRACT SUMMARY

MDE

AGENCY NAME PHONE EMAIL

Multi-Agency and Statewide Contracts

Program Managers for

CHANGE NOTICE NO. 1 TO CONTRACT NO. 220000000124

Fred Williams 517-335-3866 williamsf3@michigan.govMDE

Sean Strom 517-335-6561 StromS@michigan.govDTMB

SCHEDULE A - STATEMENT OF WORK

FULLY RESTATED PURPOSE SECTION

1. PURPOSE

Objective: Contractor will implement and maintain a Contractor-hosted web-based virtual wallet software solution (Software), and applicable services as described below, that may be used by the State to process grant awards to eligible Beneficiaries, as designated by the State. The grants will be funded with monies awarded to the Office of the Governor by the United States Department of Education through the Governor’s Emergency Education Relief (GEER) Fund as authorized by the Emergency Assistance to Nonpublic Schools (EANS I & II) (the “Program”). Beneficiaries will receive grant funds through the Software. All initial capitalized terms in this Schedule that are not defined in this Schedule will have the respective meanings given to them in the Contract Terms and Conditions.

Scope and Deliverables: As part of the Software, Contractor will provision a platform for use by the State to distribute grant funds to eligible Beneficiaries to access and use grant funds through designated End Users. The Software will include modules to support the following functions:

1. Fiscal Management and Payment System;

2. Reporting; and

3. Training.

Additionally, Contractor will configure Software as per instructions provided by the State in respect of expenditures requested by End Users under the Program prior to approval escalation to MDE for final determination on expense eligibility.

The Fiscal Management and Payment System will provide the following:

1. Notional Virtual Wallet Account (“Account”)

a. Contractor will provide each Beneficiary an Account. The State will allocate a balance to each Account, which indicates to the Beneficiary how much they are able to spend. End Users will be able to access and view their respective account (or as applicable, subaccount) balances through electronic devices, including computers, tablets or smartphones.

b. Beneficiaries, by and through authorized actions of End Users, will be able to spend the funds in their Account through any one of the following Software features, subject to limitations imposed by the State:

1. Reimbursement request

2. Online ACH bill pay transaction (“DirectPay”)

3. Ecommerce Marketplace

c. Accounts can be:

1. Loaded periodically, at such frequency and in such amounts as the State determines appropriate, in accordance with rules established by the State.

2. Suspended.

3. De-funded, and funds returned to the State.

d. The Beneficiary and End Users will not be able to make deposits into their Account.

Only the State will be able to fund Accounts.

e. The State may establish restrictions on which payment features it will make available to Beneficaries (e.g., DirectPay, ecommerce marketplace, reimbursement, etc). By default, all Accounts will allow all three payment features unless different restrictions are assigned to a particular Account.

2. Reimbursement Management

a. Through the Software, Beneficiaries will be able to link Accounts to the school bank account securely by providing banking information via web access on the Software. Contractor will not store any Beneficiary banking information.

b. End Users will be able to upload receipts into the Software using their phone camera or a desktop scanner.

c. The State, through Sate Users, will have the ability to review receipts via web access through the Software administration dashboard.

d. The State, through State Users, will be able to approve the reimbursement either in whole or in part or deny the reimbursement request. The State will conduct this activity via web access by State Users through the Software administration dashboard.

e. The Software will automate the reimbursement by way of ACH direct deposit to the Beneficiary’s bank account.

3. DirectPay

a. Merchants will be able to link to the Software in order to receive ACH payments by providing banking information via web access on the Software.

b. Contractor will not store any banking information of merchants.

c. The State, by and through State Users and/or the State Agency Program Manager, will be able to review merchant requests to connect to the Software and make a determination to approve or reject such requests.

d. Beneficiaries, through End Users, will be able to upload documentation provided by merchants (e.g., quotes) into the Software using the Contractor mobile application and their phone camera or a desktop scanner.

e. The State, by and through State Users, will be able to review documentation via web access and approve or deny payment requests through the Contractor administration dashboard or can set default authorizations on an automated basis subject to rules established by the State.

f. Contractor will automate the ACH payment to the merchant’s bank account.

g. Contractor will be permitted to charge merchants a 2.5% fee on the value of each

DirectPay Transaction, payable by the merchant upon Transaction settlement.

Neither the State nor any Beneficiary using the system will be responsible for any part of this cost.

4. Ecommerce Marketplace

a. Users may make online purchases from approved ecommerce vendors that are integrated within the Platform.

b. The Client will have the ability to determine which ecommerce vendors shall be made available to Users via the Platform.

c. The Client will have the ability to review the ecommerce purchases via web access and can approve or deny the purchases through the ClassWallet administration dashboard or set default authorizations on an automated basis, subject to rules established by the Client.

d. ClassWallet settles and reconciles all payments with ecommerce vendors.

5. Categorization: The Software will provide the ability for the State, by and through State

Users and/or the State Agency Program Manager, to establish categories for types of purchases and require End Users to select a category as part of each payment / check out experience.

6. Reporting: Contractor will make the following reports available via the Software:

a. Listing of current Beneficiary Accounts.

b. Detail summaries of purchases and amounts.

c. Aggregate Beneficiary Account balances.

d. Year-end close-out of Accounts and balances.

Role of the Client. The State will:

1. Be solely and exclusively responsible for all matters relating to the Program administration, including but not limited to: determining which Beneficiaries are eligible for grants, the size of each grant for each Beneficiary, and all matters relating to the governance and monitoring of Program eligibility and permissible use of funds relative to the grant Program, including the use of funds on the Software by Beneficiaries and their End Users.

2. Provide Contractor with a complete list of Beneficiaries eligible to receive grants and through the Fiscal Management and Payment System, their associated authorized administrators, and the amount of each grant (“Beneficiary List”).

a. The Beneficiary List will contain, but not be limited to: first name, last name, school name, school address, school administer email address, phone number and grant award dollar amount.

b. The State will have the ability to provide updated Beneficiary Lists at a mutually agreed upon frequency.

3. Provide Contractor a deadline date by which Beneficiary must use grant funds (the “Deadline”).

4. Be solely and exclusively responsible for authorizing all payments made on the Software either through a pre-approval workflow provided through the Software or by explicit instruction to Contractor regarding which type of Transactions are authorized for settlement without pre-approval. State Users and the State Agency Program Manager will be authorized to convey such authorization and instruction on behalf of State, and Contractor will be entitled to rely on authorization or instruction from State Users and the State Agency Program Manager with respect to matters related to subsections 1-4 of this Role of the Client section.

Transaction Settlement Process

1. Reimbursement Management and DirectPay

a. All Transactions will be required to be subject to a pre-approval workflow provided through the Software, based on programmatic rules established by State.

b. Any Transaction designated as “Approved” will not facilitate a payment until the subsequent invoice and payment processes have been completed and the Transaction has been funded with Program funds by State.

c. Contractor will provide a funding invoice to the State monthly or on such other cadence as may be mutually agreed by the parties for all Approved Transactions during the respective billing period.

d. The State will fund amounts for Approved Transactions in accordance with Contract Terms. Contractor will have no obligation to process any Transaction in the event that Approved Transactions exceed the balance of paid funding invoices. If the State has Approved Transactions that exceed the paid funding invoice amount, the State will be responsible for notifying affected Beneficiaries that their Transactions may not be processed or may be subject to delay.

e. Upon receipt of payment for a funding invoice, Contractor will facilitate Software payments for the Transactions associated with the funding invoice and funding payment received.

2. Ecommerce Marketplace

a. All Ecommerce Marketplace Transactions shall be required to be subject to a pre-approval workflow provided through the Software, based on programmatic rules established by State

b. No Ecommerce Marketplace Transaction will be processed until designated “Approved” by the State.

c. Contractor will provide an invoice to the State weekly for Approved Ecommerce Marketplace Transactions processed during the respective billing period (“Ecommerce Marketplace Invoice”). The cadence of invoices and payments may be modified by agreement of both parties in writing. Email correspondence satisfies this written requirement.

d. The State is required to pay each Ecommerce Marketplace Invoice in full within 15 calendar days of receipt. For purposes of example, the State may not pay an amount less than the invoice based on a retroactive decision that an Approved Ecommerce Marketplace Transaction within that billing period was approved in error.

e. Should the State not pay any Ecommerce Marketplace Invoice in full within 45 calendar days of receipt, the State will be considered in default and ClassWallet will suspend the State’s Ecommerce Marketplace privileges. No Ecommerce Marketplace Transactions will be processed, and the State will be responsible for notifying affected Beneficiaries of the unavailability of the Ecommerce Marketplace and that any pending Transactions may not be processed or may be subject to delay.

f. In the event of a default and the subsequent suspension of the State’s Ecommerce Marketplace privileges, the State’s Ecommerce Marketplace account shall remain suspended until all outstanding Ecommerce Marketplace Invoices have been paid in full.

The State reserves the right to purchase any additional services or products from the Contractor during the duration of the Contract.

NOTICE OF CONTRACT

NOTICE OF CONTRACT NO. 171-220000000124 .

between

THE STATE OF MICHIGAN

and

C O

N

TR

A C

TO

R

Kleo, Inc. d/b/a ClassWallet

ST

A

TE

Pr og ra

M an ag er Various MDE

6100 Hollywood Blvd, Suite 108

Hollywood, FL 33024

Jamie Rosenberg

C on tra ct

Ad in is tra to r Jarrod Barron DTMB

877-969-5536 (ext. 7980) 517-249-0406 jrosenberg@classwallet.com BarronJ1@michigan.gov

VS0199348

CONTRACT SUMMARY

DESCRIPTION: MDE EANS ClassWallet System

INITIAL EFFECTIVE DATE INITIAL EXPIRATION DATE

INITIAL AVAILABLE

OPTIONS

EXPIRATION DATE BEFORE

CHANGE(S) NOTED BELOW

10/26/2021 12/31/2024 Through 9/30/2031 12/31/2024

PAYMENT TERMS DELIVERY TIMEFRAME

Net 45 N/A

ALTERNATE PAYMENT OPTIONS EXTENDED PURCHASING

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

MINIMUM DELIVERY REQUIREMENTS

MISCELLANEOUS INFORMATION

MDE EANS ClassWallet System contract awarded from ITN 171-210000000057.

Base years 10/26/2021 – 12/31/2024 with options to 9/30/2031.

Program Managers:

1. MDE: Fred Williams, williamsf3@michigan.gov, 517-335-3866.

2. DTMB: Sean Strom, stroms@michigan.gov, 517-512-3110.

ESTIMATED CONTRACT VALUE AT TIME OF EXECUTION $520,660.00

STATE OF MICHIGAN PROCUREMENT

Department of Technology, Management & Budget 525 W. Allegan Street, Lansing, MI 48909

CONTRACT NO. 171-2200000000124

FOR THE CONTRACTOR:

Company Name

Authorized Agent Signature

Authorized Agent (Print or Type)

Date

FOR THE STATE:

Signature

Jarrod Barron – IT Category Specialist Name & Title

DTMB – Central Procurement Services Agency

Date

SOFTWARE TERMS AND CONDITIONS

These Terms and Conditions, together with all Schedules (including the Statement(s) of Work), Exhibits and any other applicable attachments or addenda (Collectively this “Contract”) are agreed to between the State of Michigan (the “State”) and Kleo, Inc. d/b/a ClassWallet (“Contractor”), a Florida corporation. This Contract is effective on October 26, 2021 (“Effective Date”), and unless terminated, will expire on December 31, 2024 (the “Term”).

This Contract may be renewed for additional period(s) through September 30, 2031. Renewal is at the sole discretion of the State and will automatically extend the Term of this Contract. The State will document its exercise of renewal options via Contract Change Notice.

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

“Acceptance” has the meaning set forth in Section 9.

“Acceptance Tests” means such tests as may be conducted in accordance with Section 9.1 and a Statement of Work to determine whether the Software meets the requirements of this Contract and the Documentation.

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

“Allegedly Infringing Materials” has the meaning set forth in Section 18.2(b).

“Authorized Users” collectively, State Users and End Users, subject in each case to the maximum number of users specified in the applicable Statement of Work.

“Beneficiary or Beneficiaries” means any independent nonpublic K-12 school that has been awarded an EANS grant.

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

“Change” has the meaning set forth in Section 2.2.

“Change Notice” has the meaning set forth in Section 2.2(b).

“Change Proposal” has the meaning set forth in Section 2.2(a).

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

“Confidential Information” has the meaning set forth in Section 22.1.

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

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

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

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

“Contractor Hosted” means the Hosted Services are provided by Contractor or one or more of its Permitted Subcontractors.

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

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

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

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

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

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

“End Users” means any individual authorized by a Beneficiary to act on behalf of the Beneficiary in respect of certain of the Services, as described more specifically in the Statement of Work. For purposes of clarity, End Users will not constitute State Users.

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

“Financial Audit Period” has the meaning set forth in Section 23.1.

“Harmful Code” means any software, hardware or other technologies, devices or means, the purpose or effect of which is to: (a) permit unauthorized access to, or to destroy, disrupt, disable, encrypt, modify, copy, or otherwise harm or impede in any manner, any (i) computer, software, firmware, data, hardware, system or network, or (ii) any application or function of any of the foregoing or the integrity, use or operation of any data Processed thereby; or (b) prevent the State or any Authorized User from accessing or using the Services as intended by this Contract, and includes any virus, bug, trojan horse, worm, backdoor or other malicious computer code and any time bomb or drop dead device.

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

“Implementation Plan” means the schedule included in a Statement of Work setting forth the sequence of events for the performance of Services under a Statement of Work, including the Milestones and Milestone Dates.

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

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

“Loss or Losses” means all losses, including but not limited to, damages, liabilities, deficiencies, claims, actions, judgments, settlements, interest, awards, penalties, fines, costs or expenses of whatever kind, including reasonable attorneys' fees and the costs of enforcing any right to indemnification.

“Maintenance Release” means any update, upgrade, release or other adaptation or modification of the Software, including any updated Documentation, that Contractor may generally provide to its licensees from time to time during the Term, which may contain, among other things, error corrections, enhancements, improvements or other changes to the user interface, functionality, compatibility, capabilities, performance, efficiency or quality of the Software.

“Milestone” means an event or task described in the Implementation Plan under a Statement of Work that must be completed by the corresponding Milestone Date.

“Milestone Date” means the date by which a particular Milestone must be completed as set forth in the Implementation Plan under a Statement of Work.

“New Version” means any new version of the Software, including any updated Documentation, that the Contractor may from time to time introduce and market generally as a distinct licensed product, as may be indicated by Contractor's designation of a new version number.

“Nonconformity” or “Nonconformities” means any failure or failures of the Software to conform to the requirements of this Contract, including any applicable Documentation.

“Open-Source Components” means any software component that is subject to any open-source copyright license agreement, including any GNU General Public License or GNU Library or Lesser Public License, or other obligation, restriction or license agreement that substantially conforms to the Open Source Definition as prescribed by the Open Source Initiative or otherwise may require disclosure or licensing to any third party of any source code with which such software component is used or compiled.

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

“PAT” means a document or product accessibility template, including any Information Technology Industry Council Voluntary Product Accessibility Template or VPAT®, that specifies how information and software products, such as websites, applications, software and associated content, conform to WCAG 2.0 Level AA.

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

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

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

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

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

“Services” means any of the services, including but not limited to, Hosted Services, Contractor is required to or otherwise does provide under this Contract.

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

“Software” means Contractor’s software as set forth in a Statement of Work, and any Maintenance Releases or New Versions, made available to the State and in connection with the Services pursuant to this Contract, and all copies of the foregoing permitted under this Contract.

“State” means the State of Michigan.

“State Data” has the meaning set forth in Section 21.1.

“State Materials” means all materials and information, including documents, data, know-how, ideas, methodologies, specifications, software, content and technology, in any form or media, directly or indirectly provided or made available to Contractor by or on behalf of the State in connection with this Contract.

“State Program Managers” are the individuals appointed by the State, or their designees, to (a) monitor and coordinate the day-to-day activities of this Contract; (b) co-sign off on Acceptance of the Software and other Deliverables; and (c) perform other duties as may be specified in a Statement of Work Program Managers will be identified in a Statement of Work.

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

“State Users” means any all Persons authorized by the State to access and use the Software,on behalf of the State under this Contract. For purposes of clarity, State Users will not include End Users.

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

“Stop Work Order” has the meaning set forth in Section 15.

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

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

“Testing Period” has the meaning set forth in Section 9.1(b).

“Third Party Components” means all third party components, including Open-Source Components, that are included in or used in connection with the Software and will be specifically identified by Contractor as part of the State’s Security Accreditation Process defined in Schedule E – Data Security Requirements.

“Transaction” means the initiation or settlement of, or associated Processing or transmittal of data in connection with, a reimbursement request, ecommerce marketplace, or online ACH bill pay transaction at the request of an End User, or the loading of a Beneficiary’s Notional Virtual Wallet Account.

“Transition Period” has the meaning set forth in Section 16.3.

“Transition Responsibilities” has the meaning set forth in Section 16.3.

“User Data” means all data, information and other content of any type and in any format, medium or form, whether audio, visual, digital, screen, GUI or other, that is input, uploaded to, placed into or collected, stored, Processed, generated or output by any device, system or network by or on behalf of the State, including any and all works, inventions, data, analyses and other information and materials resulting from any use of the Software by or on behalf of the State under this Contract, except that User Data does not include the Software or data, information or content, including any GUI, audio, visual or digital or other display or output, that is generated automatically upon executing the Software without additional user input without the inclusion of user derived Information or additional user input.

“Warranty Period” means the ninety (90) calendar-day period commencing on the date of the State's Acceptance of the Software and for which Support Services are provided free of charge.

“WCAG 2.0 Level AA” means level AA of the World Wide Web Consortium Web Content Accessibility Guidelines version 2.0.

2. Duties of Contractor. Contractor will provide Services and Deliverables pursuant to Statement(s) of Work entered into under this Contract. Contractor will perform all Services in a timely, skillful, professional and workmanlike manner in accordance with commercially reasonable industry standards and practices for similar services, using personnel with the requisite skill, experience and qualifications, and will devote adequate resources to meet its obligations under this Contract. and in accordance with the terms, conditions, and specifications set forth in this Contract and the Statement(s) of Work.

2.1 Statement of Work Requirements. No Statement of Work will be effective unless signed by each party’s Contract Administrator (provided, for purposes of clarity, that the incorporation of the initial Statement of Work as Schedule A to this Contract will satisfy such execution requirement in respect of the initial Statement of Work). The term of each Statement of Work will commence on the parties' full execution of a Statement of Work and terminate when the parties have fully performed their obligations. The terms and conditions of this Contract will apply at all times to any Statements of Work entered into by the parties and incorporated into this Contract. The State will have the right to terminate such Statement of Work as set forth in Section 16. Contractor acknowledges that time is of the essence with respect to Contractor’s obligations under each Statement of Work and agrees that prompt and timely performance of all such obligations in accordance with this Contract and the Statements of Work (including the Implementation Plan and all Milestone Dates) is strictly required.

2.2 Change Control Process. The State may at any time request in writing (each, a “Change Request”) changes to a Statement of Work, including changes to the Services and Implementation Plan (each, a “Change”).

Upon the State’s submission of a Change Request, the parties will evaluate and implement all Changes in accordance with this Section 2.2.

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

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

(ii) an amended Implementation Plan reflecting: (A) the schedule for commencing and completing any additional or modified Services or Deliverables; and (B) the effect of such Changes, if any, on completing any other Services under a Statement of Work;

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

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

(b) Within thirty (30) Business Days following the State’s receipt of a Change Proposal, the State will by written notice to Contractor, approve, reject, or propose modifications to such Change Proposal. If the State proposes modifications, Contractor must modify and re-deliver the Change Proposal reflecting such modifications, or notify the State of any disagreement, in which event the parties will negotiate in good faith to resolve their disagreement. Upon the State’s approval of the Change Proposal or the parties’ agreement on all proposed modifications, as the case may be, the parties will execute a written agreement to the Change Proposal (“Change Notice”), which Change Notice will be signed by the State’s Contract Administrator and will constitute an amendment to a Statement of Work to which it relates; and

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

(i) require Contractor to perform the Services under a Statement of Work without the Change;

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

(iii) initiate a Dispute Resolution Procedure; or

(iv) notwithstanding any provision to the contrary in a Statement of Work, terminate this Contract under Section 16.1.

(d) No Change will be effective until the parties have executed a Change Notice. 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 from any Change to those necessary to perform the Change in accordance with the applicable Change Notice. Each party is responsible for its own costs and expenses of preparing, evaluating, negotiating, and otherwise processing any Change Request, Change Proposal, and Change Notice.

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

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

2.3 Contractor Personnel.

(a) Contractor is solely responsible for all Contractor Personnel and for the payment of their compensation, including, if applicable, withholding of income taxes, and the payment and withholding of social security and other payroll taxes, unemployment insurance, workers’ compensation insurance payments and disability benefits.

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

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

(ii) 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 on Contractor Personnel. Pursuant to Michigan law, all agencies subject to IRS Pub. 1075 are required to ask the Michigan State Police to perform fingerprint background checks on all employees, including Contractor and subcontractor employees, who may have access to any database of information maintained by the federal government that contains confidential or personal information, including, but not limited to, federal tax information. Further, pursuant to Michigan law, any agency described above is prohibited from providing Contractors or subcontractors with the result of such background check. For more information, please see Michigan Public Act 427 of 2018.

(c) Contractor and all Contractor Personnel will comply with all rules, regulations, and policies of the State that are communicated to Contractor in writing, including security procedures concerning systems and data and remote access, building security procedures, including the restriction of access by the State to certain areas of its premises or systems, and general health and safety practices and procedures.

(d) The State reserves the right to require the removal of any Contractor Personnel found, in the judgment of the State, to be unacceptable. The State’s request must be written with reasonable detail outlining the reasons for the removal request. Replacement personnel for the removed person must be fully qualified for the position. If the State exercises this right, and Contractor cannot immediately replace the removed personnel, the State agrees to negotiate an equitable adjustment in schedule or other terms that may be affected by the State’s required removal.

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

(a) Contractor Project Manager must:

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

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

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

(b) Contractor Project Manager must attend all regularly scheduled meetings as set forth in the Implementation Plan and will otherwise be available as set forth in a Statement of Work.

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

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

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

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

(d) Contractor will promptly replace its Contractor Project Manager on the occurrence of any event set forth in Section 2.4(c). Such replacement will be subject to the State's prior written approval.

2.5 Contractor’s Key Personnel.

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

2.6 Subcontractors. Contractor must obtain prior written approval of the State, which consent may be given or withheld in the State’s sole discretion, before engaging any Permitted Subcontractor to provide Services to the State under this Contract. Third parties otherwise retained by Contractor to provide Contractor or other clients of contractor with services are not Permitted Subcontractors, and therefore do not require prior approval by the State.

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

(b) name the State a third-party beneficiary under Contractor’s Contract with each Permitted Subcontractor with respect to the Services;

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

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

3. Notices. All notices and other communications required or permitted under this Contract must be in writing and will be considered given and received: (a) when verified by written receipt if sent by courier; (b) when actually received if sent by mail without verification of receipt; or (c) when verified by automated receipt or electronic logs if sent by facsimile or email.

If to State: If to Contractor:

Jarrod Barron 525 W. Allegan Street Lansing, MI 48933 barronJ1@michigan.gov 517-249-0406

Kleo, d/b/a/ ClassWallet 6100 Hollywood Blvd, Suite 108 Hollywood, Florida 33024 Attention: Jamie Rosenberg jrosenberg@classwallet.com

877.969.5536 (ext. 7980)

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

5. Software License.

5.1 Subscription License. The Software is Contractor Hosted and Contractor is providing the State access to use its Software during the Term of the Contract, including as the Term may be extended, only, as follows:

(a) Contractor hereby grants to the State, exercisable by and through its Authorized Users, a nonexclusive, royalty-free, irrevocable right and license during the Term and such additional periods, if any, as Contractor is required to perform Services under this Contract or any Statement of Work, to:

(i) access and use the Software, including in operation with other software, hardware, systems, networks and services, for the State’s business purposes, including for Processing State Data;

(ii) generate, print, copy, upload, download, store and otherwise Process all GUI, audio, visual, digital and other output, displays and other content as may result from any access to or use of the Software;

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

(iv) access and use the Software for all such non-production uses and applications as may be necessary or useful for the effective use of the Software hereunder, including for purposes of analysis, development, configuration, integration, testing, training, maintenance, support and repair, which access and use will be without charge and not included for any purpose in any calculation of the State’s or its Authorized Users’ use of the Software, including for purposes of assessing any Fees or other consideration payable to Contractor or determining any excess use of the Software as described in Section 5.2(c) below.

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

(c) Use. The State will pay Contractor the corresponding Fees set forth in a Statement of Work or Pricing Schedule for all Authorized Users access and use of the Software. Such Fees will be Contractor’s sole and exclusive remedy for use of the Software, including any excess use.

5.2 Certification. To the extent that a License granted to the State is not unlimited, Contractor may request written certification from the State regarding use of the Software for the sole purpose of verifying compliance with this Section 5. Such written certification may occur no more than once in any twenty four (24) month period during the Term of the Contract. The State will to respond to any such request within 45 calendar days of receipt. If the State’s use is greater than contracted, Contractor may invoice the State for any unlicensed use (and related support) pursuant to the terms of this Contract at the rates set forth in Schedule B, and the unpaid license and support fees shall be payable in accordance with the terms of the Contract. Payment under this provision shall be Contractor’s sole and exclusive remedy to cure these issues.

5.3 State License Grant to Contractor. The State hereby grants to Contractor a limited, non-exclusive, non-transferable license (i) to use the State's (or individual agency’s, department’s or division’s) name, trademarks, service marks or logos, solely in accordance with the State’s specifications, and (ii) to display, reproduce, distribute and transmit in digital form the State’s (or individual agency’s, department’s or division’s) name, trademarks, service marks or logos in connection with promotion of the Services as communicated to Contractor by the State. Use of the State’s (or individual agency’s, department’s or division’s) name, trademarks, service marks or logos will be specified in the applicable Statement of Work. Contractor is provided a limited license to State Materials for the sole and exclusive purpose of providing the Services.

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

7. Intellectual Property Rights

7.1 Ownership Rights in Software

(a) [reserved]

(b) Subject to the rights and licenses granted by Contractor in this Contract and the provisions of Section 7.1(c):

(i) Contractor reserves and retains its entire right, title and interest in and to all Intellectual Property Rights arising out of or relating to the Software; and

(ii) none of the State or Authorized Users acquire any ownership of Intellectual Property Rights in or to the Software or Documentation as a result of this Contract.

(c) As between the State, on the one hand, and Contractor, on the other hand, the State has, reserves and retains, sole and exclusive ownership of all right, title and interest in and to State Materials, User Data, including all Intellectual Property Rights arising therefrom or relating thereto.

8. Software Implementation.

8.1 Implementation. Contractor will provide and make fully operational the Software on or prior to the applicable Milestone Date in accordance with the criteria set forth in a Statement of Work and the Implementation Plan.

8.2 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 provide access to the Software on or prior to the applicable Milestone Date.

9. Software Acceptance Testing.

9.1 Acceptance Testing.

(a) Unless…