NOTICE OF CONTRACT

NOTICE OF CONTRACT NO. 230000000957 .

between

THE STATE OF MICHIGAN

and

C O

N T

R A

C T

O R

Kingsley Companies

S T

A T

E P ro g ra m M a n a g e r

David Tarrant MDOS

5525 Gibralter 517-335-3230

Ontario, CA, 91764 TarrantD2@michigan.gov

Jennifer Hubble C o n tr a ct

A d m in is tr a to r Ross Anderson MDOS

909-962-1481 517-241-1513

Jennifer@kle.com AndersonR36@Michigan.gov

VS0111391

CONTRACT SUMMARY

DESCRIPTION: As per RFP 230000001345, contract to provide MDOS Elections Absent Voter Ballot Drop Boxes.

INITIAL EFFECTIVE DATE INITIAL EXPIRATION DATE

INITIAL AVAILABLE

OPTIONS

EXPIRATION DATE BEFORE

CHANGE(S) NOTED BELOW

06/08/2023 06/08/2028 3 06/08/2028

PAYMENT TERMS DELIVERY TIMEFRAME

Net 45

ALTERNATE PAYMENT OPTIONS EXTENDED PURCHASING

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

MINIMUM DELIVERY REQUIREMENTS

As per Statement of Work, Section 2.2

MISCELLANEOUS INFORMATION

As per the Award Recommendation Synopsis posted to SIGMA VSS, there are 3 vendors being awarded a contract to supply Ballot Drop Boxes. The estimated total amount to supply all boxes was $15,000,000.00, and therefore we have split this total equally amongst the 3 vendors for now. As we begin the ordering process, MDOS will amend the totals via the process of a Contract Change Notice. As a reminder and as per the RFP instructions, “However, no order quantities are guaranteed of any specific box or vendor.”

ESTIMATED CONTRACT VALUE AT TIME OF EXECUTION $5,000,000.00

CONTRACT NO. 230000000957

STATE OF MICHIGAN PROCUREMENT

Michigan Department of State 430 W. Allegan Lansing, MI, 48133

Michigan .gov/MiProcure ment

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SCHEDULE A – STATEMENT OF WORK

CONTRACT ACTIVITIES

Master Agreement (MA) No. 230000000957

Michigan Bureau of Elections - Ballot Drop Boxes

BACKGROUND

The Secretary of State is Michigan’s chief election officer; however, State of Michigan (SOM) elections are decentralized and administered at the local level. The Bureau of Elections (BOE) within the Michigan Department of State (MDOS) provides election oversight, monitoring, and other services to the local elections jurisdictions, consisting of 83 county clerks, 280 city clerks and 1,240 township clerks.

Michigan voters passed Proposal 2 in the November 2022 election. Among other things, Proposal 2 requires at least one state-funded, secure, accessible ballot drop box for every municipality regardless of the number of registered voters in that municipality. If the municipality has more than 15,000 voters, there must be at least one such ballot box, distributed equitably, for every 15,000 voters in the municipality.

Since some local jurisdictions already have ballot boxes, the estimated need will be for approximately 600~2,000 total boxes. However, no order quantities are guaranteed of any specific box or vendor.

MDOS seeks to contract with one or more vendors to provide ballot drop boxes. About 25%~35% of these ballot boxes must be delivered and installed or available for installation at local jurisdictions by mid-June 2023 for the August 2023 election. An additional 25%~35% must be delivered and installed by August 24, 2023, for the November 2023 election. The remainder of the ballot boxes must be delivered and installed before December 14, 2023. There may be subsequent orders as well.

SCOPE

1) Provide a catalog or pricing sheet of currently available ballot boxes that meet the requirements.

a) Include pricing for ballot boxes for either interior or outside locations, or both.

b) Include pricing for any peripheral equipment such as locking or security options, etc., if not included in the ballot box price.

2) An initial series of orders of ballot boxes in mid-2023 to meet the requirements of Proposal 2 for Michigan’s August 8, 2023, election.

a) For Proposal 2, local jurisdictions will select a style(s) and quantities of ballot boxes and provide their needs to BOE.

b) BOE will aggregate the quantities for each style and vendor and send to Procurement to make a collated order to the contractor(s). These orders will likely have a regular frequency of weekly/bi-weekly. The orders will have multiple “ship to” addresses. BOE will also provide contact information and local jurisdiction business hours for each jurisdiction.

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c) Contractor will ship orders directly to each local jurisdiction and contact the jurisdiction as needed to arrange delivery times.

3) Vendor will invoice separately for each shipment to each local jurisdiction. Vendor must send all invoices to: sospaymentprocess@michigan.gov.

a) Vendor must send the name of the shipping company and tracking number to both BOE and to the local jurisdictions.

b) Vendor must have the shipping company contact the local jurisdiction to whom they are delivering with the expected date and time of delivery.

c) The shipping company must have the local jurisdiction sign for delivery.

4) BOE may make subsequent orders to fulfill Proposition 2’s requirements.

5) Provide the ability for local jurisdictions to directly purchase small quantities of ballot boxes for their needs outside of Proposal 2. These purchases will be ordered and paid for by the local jurisdiction (BOE will not be involved in these purchases, other than making the catalog of conforming boxes available).

6) Most jurisdictions are on municipal properties and are anticipated to install their own ballot boxes. However, bidder may provide pricing for optional on-site installation of ballot boxes if vendor is able to supply or subcontract for installation services.

Installation services will be paid by local jurisdictions.

REQUIREMENTS

1. General Requirements

1.1. Product Specifications

The Contractor must provide the following:

Pricing for ballot boxes, to include but not limited to exterior-located boxes, interior-located boxes, and wall-mounted boxes with exterior mail slot but interior located container. All ballot boxes must meet the following:

1.1.1. Rust-resistant (for example, aluminum, stainless steel)

1.1.2. Weather resistant

1.1.3. Fire suppressant / resistant

1.1.4. Theft deterrent / resistant

1.1.5. ADA compliant

1.1.6. Liquid drainage system, to prevent anything poured into openings from damaging the contents

1.1.7. At least two unique keys per lock. Unique keys must only open a single, particular box and may not open any other boxes. Replacement unique keys cannot be ordered and cannot be duplicated.

1.1.8. Shipped fully assembled by bidder.

1.1.9. Capable of being securely locked and bolted to ground or another object.

Bidder must provide appropriate bolts or fasteners that meet industry security, durability, and other standards.

1.1.10. Equipped with a single slot or mailbox-style lever to allow absent voter ballot return envelopes to be placed in the drop box, and all other openings on the mailto:sospaymentprocess@michigan.gov

Version 2022-4 3 of 31 drop box must be securely locked. The slot or drop opening must be large enough to easily accommodate a ballot return envelope.

1.1.11. Quantity - probable maximum of approximately 600~2,000 total boxes.

Contractor must state the quantity of each type/style of ballot box and peripheral equipment that Contractor can have on-site at local jurisdictions by mid-June 2023 for the initial order. Contractor must also state the number of each type/style of ballot box available by August 24, 2023, and by December 14, 2023. No order quantities are guaranteed of any specific box or vendor.

1.1.12. Each box must be large enough to accept a minimum of 100 ballot envelopes.

1.2. Samples

Upon notification that contractor had passed the technical evaluation, contractor was required to provide sample ballot boxes that are identical to the proposed ballot boxes.

The samples were required be received by the Bureau of Elections within 14 calendar days from the notification.

1.3. Warranties

The contractor will provide the following warranties:

https://kingsley.com/warranty

Limited Lifetime

Report issues to customer service: Jennifer@kle.com 909-962-1481

1.4. Recall Requirements and Procedures

The Contractor must communicate recalls to Michigan Department of State (MDOS) immediately and in accordance with the warranty procedures outlined in section 1.2.

Plan of action may vary based on complexity of recall.

1.5. Quality Assurance Program

The Contractor has multiple checks and balances in place from the receival of the MDOS Delivery Order (DO) through the customer service department all the way through manufacturing, assembly, packaging, and shipping to when the product is loaded and shipped. During these checks and balances, each department process the submitted DO’s so they are checked for correctness and verified to be true and the product is checked in every stage from manufacturing, Powder coating, assembly, packaging, and shipping to ensure the product has passed all Q.C. standards and stages. See below for additional details https://kingsley.com/warranty mailto:Jennifer@kle.com

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Customer service: reviews and verifies all DO’s before releasing them out to be processed.

Manufacturing: All material is put through a Q.C. process before being manufactured, and all manufactured parts are checked to spec before going onto powder coating.

Powder coating: all parts are checked for flaws again before powder coated, and the powder coated parts are checked again for Q.C. before assembly.

Assembly: All parts are checked before assembly for Q.C. and the assemblies are checked before going to packaging.

Packaging: all assembled products are checked for proper Q.C. operations before going to shipping.

Shipping: All SO/DO’s are checked to confirm the product shipping matches the paperwork and that the shipping addresses are correct and match the DO and SO.

1.6. Incentives

Quantity discounts are reflected in the price table included in Schedule B.

1.7. Transition:

A. Contract Execution: Contract will be considered executed upon being signed by both the contractor and the State of Michigan.

B. Post-Contract Transition: Invoices must be sent within 45 days after expiration of contract. Any invoices received after 45 days will result in a non-payment of invoice.

2. Service Requirements

2.1. Timeframes

All Contract Activities must be delivered within 10 weeks (70 calendar days) from receipt of order. The receipt of order date is pursuant to the Notices section of the Standard Contract Terms.

The State will provide details for the standard graphic design (see Schedule C) before the first order.

2.2. Delivery

Delivery will be expected within 10 weeks (70 calendar days) upon date of order.

Delivery will be made at local jurisdiction locations and business hours (addresses to be provided).

The State does not guarantee any minimum quantities or orders.

2.3. Installation

The Contractor will not provide installation.

2.4. Project Prevailing Wage Requirements, applicable only if construction or installation is required as part of Contract Activities

The Contractor (and its Subcontractors) must pay all mechanics and laborers employed directly on the site of the work, unconditionally and at least once a week, and without subsequent deduction or rebate on any account, the full amounts accrued at time of payment, computed at wage rates not less than those stated in the advertised

Version 2022-4 5 of 31 specifications as prevailing wages based on locality, regardless of any contractual relationship which may be alleged to exist between the Contractor or subcontractor and the laborers and mechanics.

Contractor must post the scale of wages to be paid in a prominent and easily accessible place at the site of the work.

2.5. Reserved.

2.6. Maintenance and Repairs:

The Contractor will not provide maintenance and Repairs.

2.7. Training

The Contractor must provide the following training: original manuals and documentation.

2.8. Reporting

The Contractor must submit to the Program manager any requested reports for any requested date ranges.

The Contractor must retain the following data for each shipment for the duration of the contract and one year after the contract ends: shipping date; shipping company name(s); tracking numbers; price, quantity, and name of product shipped; name and addresses of local jurisdictions to which the product was shipped; and confirmed delivery date.

Upon request of the Program Manager, the Contractor must provide a report in a format such as CSV that can be imported into Microsoft Excel of the requested data within 5 Business Days.

In addition to the required ad hoc reporting, the Contractor must provide a quarterly report of the requested information.

Any other MDOS requested reports.

2.9. Meetings

The Contractor must attend the following meetings:

Kick-off meeting within 15 days of the Effective Date.

The State may request other meetings as it deems appropriate.

3. Staffing

3.1. Contractor Representative

The Contractor must appoint a Contractor Representative specifically assigned to State of Michigan accounts who will respond to State inquiries regarding the Contract Activities, answer questions related to ordering and delivery, etc. (the “Contractor Representative”).

The Contractor must notify the Contract Administrator at least 30 calendar days before removing or assigning a new Contractor Representative.

Contractor Representative: Jennifer Hubble, jennifer@kle.com, 909-962-1481

3.2. Reserved

3.3. Reserved

mailto:jennifer@kle.com

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3.4. Reserved

3.5. Customer Service Toll-Free Number

The toll-free number for the State to contact the Contractor Representative is 909-962- 1481. The Contractor must be available for calls during the hours of 10 am to 7 pm EST Monday through Friday.

3.6. Technical Support, Repairs and Maintenance

The toll-free number for the State to contact the Contractor for technical support, repairs and maintenance is 909-962-1481. The Contractor must be available for calls and service during the hours of 10 am to 7 pm EST Monday through Friday.

3.7. Disclosure of Subcontractors

The Contractor does not intend to use Subcontractors, However, if the Contractor intends to utilize subcontractors, the Contractor must disclose the following:

The legal business name; address; telephone number; a description of subcontractor’s organization and the services it will provide; and information concerning subcontractor’s ability to provide the Contract Activities.

The relationship of the subcontractor to the Contractor. Of the total bid, the price of the subcontractor’s work. Whether the Contractor has a previous working experience with the subcontractor. If yes, provide the details of that previous relationship.

A complete description of the Contract Activities that will be performed or provided by the subcontractor.

3.8. Security

The Contractor will not be accessing any state facilities.

4. Pricing

4.1. Price Term

Pricing is firm for the entire length of the Contract.

4.2. Price Changes

Adjustments will be based on changes in actual Contractor costs. Any request must be supported by written evidence documenting the change in costs. The State may consider sources, such as the Consumer Price Index; Producer Price Index; other pricing indices as needed; economic and industry data; manufacturer or supplier letters noting the increase in pricing; and any other data the State deems relevant.

Following the presentation of supporting documentation, both parties will have 30 days to review the information and prepare a written response. If the review reveals no need for modifications, pricing will remain unchanged unless mutually agreed to by the parties. If the review reveals that changes are needed, both parties will negotiate such changes, for no longer than 30 days, unless extended by mutual agreement.

The Contractor remains responsible for Contract Activities at the current price for all orders received before the mutual execution of a Change Notice indicating the start date of the new Pricing Period.

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4.3. Reserved

5. Ordering

5.1. Authorizing Document

The appropriate authorizing document for the Contract will be Delivery Order (DO) issued by the Michigan Department of State.

Michigan Department of State will generally order as follows:

- Maximum of 10 units per vendor or every 2 weeks, whichever comes first.

- Orders will have a specific order number for those units, to allow for easier tracking.

- Each order will have separate lines for each jurisdiction which will contain the shipping information for each location.

Local jurisdictions may order and purchase additional boxes at their own expense through any method agreed upon by the bidder and the local jurisdiction. Any orders from local jurisdictions will not be on a State of Michigan DO and will have separate lead times based on availability.

5.2. Order Verification

All orders are reviewed and confirmed by the Contractor’s customer service department for correctness and Company verification. A confirmagraption email of receipt and ship date information will be sent out to MDOS.

6. Delivery

6.1. Delivery Programs

All Ballot drop boxes will be shipped via LTL or full-load, depending on how many shipments can be made at one time. The Contractor has multiple shippers that they work with to ensure all shipments are sent in a timely manner. The primary shipper is ODFL, supported by FedEx, ABF and Daylight as needed.

6.2. Packaging and Palletizing

Packaging must be optimized to permit the lowest freight rate. Shipments must be palletized whenever possible using manufacturer's standard 4-way shipping pallets.

7. Acceptance

7.1. Acceptance, Inspection and Testing

The State will use the following criteria to determine acceptance of the Contract Activities: Per Standard Contract Terms below.

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7.2. Final Acceptance

Per Standard Contract Terms below and signed Notice of Contract.

8. Invoice and Payment

8.1. Invoice Requirements

All invoices submitted to the State must include: (a) order date; (b) purchase order or delivery order number; (c) quantity; (d) description of the Contract Activities; (e) unit price; (f) shipping cost (if any); (g) vendor-generated invoice number; (h) delivery date,

(i) jurisdiction name, (j) delivery address(es), and (k) total price.

8.2. Payment Methods

The State will make payment for Contract Activities via EFT. Local jurisdictions may make payments via other methods as agreed to with the Contractor.

8.3. Procedure

Invoices will be submitted to: sospaymentprocess@michigan.gov. Vendor must include specified information and invoice for each shipment to each local jurisdiction.

9. Project Plan Jennifer Hubble will be the main point of contact as per the proposal. As needed, she will work as an in-between for the State of Michigan and the management team at Kingsley. The three main teams for this project will be Purchasing, Production, and Shipping. Purchasing will manage the procurement of all parts and services required to complete the deliverables, Production will manage all production processes to streamline the order and mitigate disruptions, and Shipping will package, ship, and notify the State of Michigan on the expected delivery dates.

The purchasing team will begin procurement upon the final order date for each delivery date. This will involve PO submittal to vendors for purchased parts, fabricated parts, services, etc. Purchasing will monitor the expected delivery date of any purchase parts and the current inventory to ensure part availability.

The Production team will be monitoring the fabrication, coating, and assembly processes. Such as alerting the powder coating company of expected raw part delivery dates to provide efficient handling. As parts have been fabricated, coated, and delivered to the Contractor’s assembly shop, Production will also manage the assembly process to create the final product before passing them to the Shipping team.

The shipping team pack and ship the products to their destination. A notice will be sent as soon as the products leave.

Quality checks throughout the process are to be performed as stated in Section 2 of this document.

10. Licensing Agreement The Contractor must provide a copy of any applicable licensing agreement.

N/A

11. Liquidated Damages

Late or improper completion of the Contract Activities will cause loss and damage to the State, and it would be impracticable and extremely difficult to fix the actual damage sustained by the State. Therefore, if there is late or improper completion of the Contract mailto:sospaymentprocess@michigan.gov

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Activities the State is entitled to collect liquidated damages in the amount of $5,000 and an additional $100 per day for each day Contractor fails to remedy the late or improper completion of the Work.

Should Contractor provide at least 10 days prior notice of potential delayed delivery of requested items under this Agreement, MDOS agree to use good faith in determining whether to exercise their rights under this clause. MDOS failing to exercise its rights does not waive the right in the future.

12. Additional Requirements

12.1. Multiple Vendors

The state does not guarantee any minimum quantity to any vendor or of any quantity of an item and may use multiple vendors.

12.2. Environmental and Energy Efficiency Product Standards

The Contractor must identify any energy efficient, bio-based, or otherwise environmentally friendly products used in the products. Contractor must include any relevant third-party certification, including the verification of a United States Department of Agriculture certified bio-based product label. Contractor must describe how products that meet these requirements are identified or otherwise labelled.

NONE LISTED

12.3. Hazardous Chemical Identification

In accordance with the federal Emergency Planning and Community Right-to-Know Act, 42 USC 11001, et seq., as amended, the Contractor must provide a Material Safety Data Sheet listing any hazardous chemicals as defined in 40 CFR §370.2, to be delivered. Each hazardous chemical must be properly identified, including any applicable identification number, such as a National Stock Number or Special Item Number.

The Contractor must identify any hazardous chemicals that will be provided under any resulting contract.

NONE LISTED

12.4. Mercury Content

Pursuant to MCL 18.1261d, mercury-free products must be procured when possible.

The Contractor must explain if it intends to provide products containing mercury, the amount or concentration of mercury, and whether cost competitive alternatives exist. If a cost competitive alternative does exist, the Contractor must provide justification as to why the particular product is essential. All products containing mercury must be labeled as containing mercury.

NONE LISTED

12.5. Brominated Flame Retardants

The State prefers to purchase products that do not contain brominated flame retardants (BFRs) whenever possible. The Contractor must disclose whether the products contain BFRs. Contractor must describe how products that meet these requirements are identified or otherwise labelled.

NONE LISTED

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12.6 Perfluoroalkyl and Polyfluoroalkyl Substances (PFAS)

The Contractor must confirm that the provided products do not intentionally contain PFAS. This consists of all components of the provided products, including product packaging.

NONE LISTED

13. Reserved

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SCHEDULE B - PRICING

Master Agreement (MA) No. 230000000957

Michigan Bureau of Elections - Ballot Drop Boxes

1. The Contractor was required to provide a pricing schedule for the proposed Contract Activities using the pricing sheet table on the next page or a substantially conforming pricing sheet. The pricing schedule was required to be submitted in a modifiable format (e.g., Microsoft Word or Excel); however, you may also submit an additional pricing schedule in a non-modifiable format (e.g., PDF). Failure to complete the pricing schedule as requested would have resulted in disqualification of the proposal.

2. Price proposals included all costs, including but not limited to, any one-time or set-up charges, fees, and potential costs that Contractor may charge the State (e.g., shipping and handling, per piece pricing, and palletizing).

3. The Contractor was encouraged to offer quick payment terms. The number of days must not include processing time for payment to be received by the Contractor's financial institution.

Quick payment terms: 1% discount off invoice if paid within 10 days after receipt of invoice.

4. By submitting its proposal, the Contractor certifies that the prices were arrived at independently, and without consultation, communication, or agreement with any other Contractor.

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Jackson Manufacturers Company Inc DBA Kingsley Companies/Collection Point

Pricing Sheet:

Stock/ Item #

Item Name Quantity Available by:

Price (not including graphics listed below

Total price (including graphics)

Mid- June

8-24-23 12-14-

62-0900 Post Mount Depository

0 100 500 $2,500.00 $2,597.00

12-8151 Ballot Thru-Wall 0 24 25 $2,799.00 $2,845.00

02-9832 Ballot Return 24in Square Base

0 400 500 $3,799.00 $3,964.00

Graphics (per Schedule C) are priced as follows:

Item # 62-0900 Graphic package (this includes the front, hood, and sides) : $97

Item # 12-8151 Graphic package (full face plate with depository cutout) : $46

Item # 02-9832 Graphic package: $165

-$50 per panel (3 total = $150)

-$15 for the faceplate

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SCHEDULE C - GRAPHICS

Master Agreement (MA) No. 230000000957

Michigan Bureau of Elections - Ballot Drop Boxes

The below is a mock-up of the graphics approved for use by the State of Michigan.

The font size is going to be dependent on the dimensions of the box.

The font used is Open Sans Extrabold Italic.

The gradient goes from blue (#222a89) to red (#d7203a) at a -40 angle (120% scale spread.

There should be sufficient space (similar to the mock-up) to add a jurisdiction name if desired.

The following text is to be used:

For the slot area:

Insert AV Ballot In Signed, Sealed Envelope

AV Applications Accepted Here

For the large area:

Official Absentee Voter Ballot Drop Box

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STANDARD CONTRACT TERMS

This STANDARD CONTRACT (“Contract”) is agreed to between the State of Michigan (the “State”) and Jackson Manufacturers Company Inc DBA Kingsley Companies/Collection Point (“Contractor”), a California C Corp. This Contract is effective on June 8, 2023 (“Effective Date”), and unless terminated, will expire on June 8, 2028 (the “Term”).

This Contract may be renewed for up to three (3) additional one-year period(s).

Renewal is at the sole discretion of the State and will automatically extend the Term of this Contract. The State will document its exercise of renewal options via Contract Change Notice.

The parties agree as follows:

Duties of Contractor. Contractor must perform the services and provide the deliverables (the “Contract Activities”) described in a Statement of Work, the initial Statement of Work is attached as Schedule A – Statement of Work. An obligation to provide delivery of any commodity is considered a service and is a Contract Activity.

Contractor must furnish all labor, equipment, materials, and supplies necessary for the performance of the Contract Activities unless otherwise specified in a Statement of Work.

Contractor must: (a) perform the Contract Activities in a timely, professional, safe, and workmanlike manner consistent with standards in the trade, profession, or industry; (b) meet or exceed the performance and operational standards, and specifications of the Contract; (c) provide all Contract Activities in good quality, with no material defects; (d) not interfere with the State’s operations; (e) obtain and maintain all necessary licenses, permits or other authorizations necessary for the performance of the Contract; (f) cooperate with the State, including the State’s quality assurance personnel, and any third party to achieve the objectives of the Contract;

(g) return to the State any State-furnished equipment or other resources in the same condition as when provided when no longer required for the Contract; (h) assign to the State any claims resulting from state or federal antitrust violations to the extent that those violations concern materials or services supplied by third parties toward fulfillment of the Contract; (i) comply with all State physical and IT security policies and standards which will be made available upon request; and (j) provide the State priority in performance of the Contract except as mandated by federal disaster response requirements. Any breach under this paragraph is considered a material breach.

Contractor must also be clearly identifiable while on State property by wearing identification issued by the State, and clearly identify themselves whenever making contact with the State.

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

Version 2022-4 16 of 31 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:

See Contract Administrator information shown below.

See below

Contract Administrator. The Contract Administrator, or the individual duly authorized for each party, is the only person authorized to modify any terms of this Contract, and approve and execute any change under this Contract (each a “Contract Administrator”):

State: Contractor:

Ross Anderson

430 W. Allegan St.

Lansing, MI, 48933

AndersonR36@michigan.gov

517-241-1513

Jennifer Hubble

5525 Gibralter St.

Ontario, CA, 91764

Jennifer@kle.com

909-962-1481

Program Manager. The Program Manager for each party will monitor and coordinate the day-to-day activities of the Contract (each a “Program Manager”):

State: Contractor:

David Tarrant

430 W. Allegan St.

Lansing, MI, 48933

TarrantD2@michigan.gov

517-335-3230

Sean Quan

5525 Gibralter St.

Ontario, CA, 91764 sean@kle.com

909-962-1478

Performance Guarantee. Contractor must at all times have financial resources sufficient, in the opinion of the State, to ensure performance of the Contract and must provide proof upon request. The State may require a performance bond (as specified in a Statement of Work) if, in the opinion of the State, it will ensure performance of the Contract.

Insurance Requirements.

Contractor, at its sole expense, must maintain the insurance coverage identified below.

With respect to Privacy and Security Liability, Contractor may, at the discretion of the MDOS Contract Administrator, defer coverage up to no more than 30 days prior to beginning any work or deliverables under this Contract. All required insurance must: (a)

Version 2022-4 17 of 31 protect the State from claims that may arise out of, are alleged to arise out of, or otherwise result from Contractor's or a subcontractor's performance; (b) be primary and non-contributing to any comparable liability insurance (including self-insurance) carried by the State; and (c) be provided by a company with an A.M. Best rating of "A-" or better, and a financial size of VII or better

TABLE 6.1

Required Limits Additional Requirements

Commercial General Liability Insurance

Minimum Limits:

$1,000,000 Each Occurrence

$1,000,000 Personal & Advertising Injury

$2,000,000 Products/Completed Operations

$2,000,000 General Aggregate

Contractor must have their policy endorsed to add “the State of Michigan, its departments, divisions, agencies, offices, commissions, officers, employees, and agents” as additional insureds using endorsement CG 20 10 11 85, or both CG 20 10 12 19 and CG 20 37 12 19.

Automobile Liability Insurance

If a motor vehicle is used in relation to the Contractor's performance, the Contractor must have vehicle liability insurance on the motor vehicle for bodily injury and property damage as required by law.

Workers' Compensation Insurance

Minimum Limits:

Coverage according to applicable laws governing work activities.

Waiver of subrogation, except where waiver is prohibited by law.

Employers Liability Insurance

Minimum Limits:

$500,000 Each Accident

$500,000 Each Employee by Disease

$500,000 Aggregate Disease

If any of the required policies provide claims-made coverage, the Contractor must: (a) provide coverage with a retroactive date before the Effective Date of the Contract or the beginning of Contract Activities; (b) maintain coverage and provide evidence of coverage for at least three (3) years after completion of the Contract Activities; and

(c) if coverage is cancelled or not renewed, and not replaced with another claims-

Version 2022-4 18 of 31 made policy form with a retroactive date prior to the Contract Effective Date, Contractor must purchase extended reporting coverage for a minimum of three (3) years after completion of work.

Contractor must: (a) provide insurance certificates to the Contract Administrator, containing the agreement or delivery order number, at Contract formation and within twenty (20) calendar days of the expiration date of the applicable policies; (b) require that subcontractors maintain the required insurance contained in this Section; (c) notify the Contract Administrator within five (5) business days if any insurance is cancelled; and (d) waive all rights against the State for damages covered by insurance. Failure to maintain the required insurance does not limit this waiver.

This Section is not intended to and is not to be construed in any manner as waiving, restricting or limiting the liability of either party for any obligations under this Contract (including any provisions hereof requiring Contractor to indemnify, defend and hold harmless the State)..

Reserved

Reserved

Relationship of the Parties. The relationship between the parties is that of independent contractors. Contractor, its employees, and agents will not be considered employees of the State. No partnership or joint venture relationship is created by virtue of this Contract. Contractor, and not the State, is responsible for the payment of wages, benefits and taxes of Contractor’s employees and any subcontractors. Prior performance does not modify Contractor’s status as an independent contractor. Neither party has authority to contract for nor bind the other party in any manner whatsoever.

Intellectual Property Rights. If a Statement of Work requires Contractor to create any intellectual property, Contractor hereby acknowledges that the State is and will be the sole and exclusive owner of all right, title, and interest in the Contract Activities and all associated intellectual property rights, if any. Such Contract Activities are works made for hire as defined in Section 101 of the Copyright Act of 1976. To the extent any Contract Activities and related intellectual property do not qualify as works made for hire under the Copyright Act, Contractor will, and hereby does, immediately on its creation, assign, transfer and otherwise convey to the State, irrevocably and in perpetuity, throughout the universe, all right, title and interest in and to the Contract Activities, including all intellectual property rights therein.

Subcontracting. Contractor may not delegate any of its obligations under the Contract without the prior written approval of the State. Contractor must notify the State at least 90 calendar days before the proposed delegation and provide the State any information it requests to determine whether the delegation is in its best interest.

If approved, Contractor must: (a) be the sole point of contact regarding all contractual matters, including payment and charges for all Contract Activities; (b) make all payments to the subcontractor; and (c) incorporate the terms and conditions contained in this Contract in any subcontract with a subcontractor. Contractor remains responsible for the completion of the Contract Activities, compliance with the

Version 2022-4 19 of 31 terms of this Contract, and the acts and omissions of the subcontractor. The State, in its sole discretion, may require the replacement of any subcontractor.

Staffing. The State’s Contract Administrator may require Contractor to remove or reassign personnel providing services by providing a notice to Contractor.

Background Checks. Pursuant to Michigan law, all agencies subject to IRS Pub.

1075 are required to ask the Michigan State Police to perform fingerprint background checks on all employees, including Contractor and Subcontractor employees, who may have access to any database of information maintained by the federal government that contains confidential or personal information, including, but not limited to, federal tax information. Further, pursuant to Michigan law, any agency described above is prohibited from providing Contractors or Subcontractors with the result of such background check. For more information, please see Michigan Public Act 427 of 2018. Upon request, or as may be specified in a Statement of Work, Contractor must perform background checks on all employees and subcontractors and its employees 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.

Assignment. Contractor may not assign this Contract to any other party without the prior approval of the State. Upon notice to Contractor, the State, in its sole discretion, may assign in whole or in part, its rights or responsibilities under this Contract to any other party. If the State determines that a novation of the Contract to a third party is necessary, Contractor will agree to the novation and provide all necessary documentation and signatures.

Change of Control. Contractor will notify the State, within 30 days of any public announcement or otherwise once legally permitted to do so, of a change in Contractor’s organizational structure or ownership. For purposes of this Contract, a change in control means any of the following: (a) a sale of more than 50% of Contractor’s stock; (b) a sale of substantially all of Contractor’s assets; (c) a change in a majority of Contractor’s board members; (d) consummation of a merger or consolidation of Contractor with any other entity; (e) a change in ownership through a transaction or series of transactions; (f) or the board (or the stockholders) approves a plan of complete liquidation. A change of control does not include any consolidation or merger effected exclusively to change the domicile of Contractor, or any transaction or series of transactions principally for bona fide equity financing purposes.

In the event of a change of control, Contractor must require the successor to assume this Contract and all of its obligations under this Contract.

Ordering. Contractor is not authorized to begin performance until receipt of authorization as identified in a Statement of Work.

Acceptance. Contract Activities are subject to inspection and testing by the State within 30 calendar days of the State’s receipt of them (“State Review Period”), unless otherwise provided in a Statement of Work. If the Contract Activities are not fully accepted by the State, the State will notify Contractor by the end of the State

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Review Period that either: (a) the Contract Activities are accepted but noted deficiencies must be corrected; or (b) the Contract Activities are rejected. If the State finds material deficiencies, it may: (i) reject the Contract Activities without performing any further inspections; (ii) demand performance at no additional cost; or (iii) terminate this Contract in accordance with Section 24, Termination for Cause.

Within 10 business days from the date of Contractor’s receipt of notification of acceptance with deficiencies or rejection of any Contract Activities, Contractor must cure, at no additional cost, the deficiency and deliver unequivocally acceptable Contract Activities to the State. If acceptance with deficiencies or rejection of the Contract Activities impacts the content or delivery of other non-completed Contract Activities, the parties’ respective Program Managers must determine an agreed to number of days for re-submission that minimizes the overall impact to the Contract.

However, nothing herein affects, alters, or relieves Contractor of its obligations to correct deficiencies in accordance with the time response standards set forth in this Contract.

If Contractor is unable or refuses to correct the deficiency within the time response standards set forth in this Contract, the State may cancel the order in whole or in part. The State, or a third party identified by the State, may perform the Contract Activities and recover the difference between the cost to cure and the Contract price plus an additional 10% administrative fee.

Delivery. Contractor must deliver all Contract Activities F.O.B. destination, within the State premises with transportation and handling charges paid by Contractor, unless otherwise specified in a Statement of Work. All containers and packaging become the State’s exclusive property upon acceptance.

Risk of Loss and Title. Until final acceptance, title and risk of loss or damage to Contract Activities remains with Contractor. Contractor is responsible for filing, processing, and collecting all damage claims. The State will record and report to Contractor any evidence of visible damage. If the State rejects the Contract Activities, Contractor must remove them from the premises within 10 calendar days after notification of rejection. The risk of loss of rejected or non-conforming Contract Activities remains with Contractor. Rejected Contract Activities not removed by Contractor within 10 calendar days will be deemed abandoned by Contractor, and the State will have the right to dispose of it as its own property. Contractor must reimburse the State for costs and expenses incurred in storing or effecting removal or disposition of rejected Contract Activities.

Warranty Period. The warranty period, if applicable, for Contract Activities is a fixed period commencing on the date specified in a Statement of Work. If the Contract Activities do not function as warranted during the warranty period, the State may return such non-conforming Contract Activities to the Contractor for a full refund.

Invoices and Payment. Invoices must conform to the requirements communicated from time-to-time by the State. All undisputed amounts are payable within 45 days of the State’s receipt. Contractor may only charge for Contract Activities provided as specified in a Statement of Work. Invoices must include an itemized statement of all charges. The State is exempt from State sales tax for direct purchases and may be exempt from federal excise tax, if Services purchased under this Agreement are for

Version 2022-4 21 of 31 the State’s exclusive use. Notwithstanding the foregoing, all fees are exclusive of taxes, and Contractor is responsible for all sales, use and excise taxes, and any other similar taxes, duties and charges of any kind imposed by any federal, state, or local governmental entity on any amounts payable by the State under this Contract.

The State has the right to withhold payment of any disputed amounts until the parties agree as to the validity of the disputed amount. The State will notify Contractor of any dispute within a reasonable time. Payment by the State will not constitute a waiver of any rights as to Contractor’s continuing obligations, including claims for deficiencies or substandard Contract Activities. Contractor’s acceptance of final payment by the State constitutes a waiver of all claims by Contractor against the State for payment under this Contract, other than those claims previously filed in writing on a timely basis and still disputed.

The State will only disburse payments under this Contract through Electronic Funds Transfer (EFT). Contractor must register with the State at http://www.michigan.gov/SIGMAVSS to receive electronic fund transfer payments. If Contractor does not register, the State is not liable for failure to provide payment.

Without prejudice to any other right or remedy it may have, the State reserves the right to set off at any time any amount then due and owing to it by Contractor against any amount payable by the State to Contractor under this Contract.

Excluding federal government charges and terms, Contractor warrants and agrees that each of the fees, economic or product terms or warranties granted pursuant to this Contract are comparable to or better than the equivalent fees, economic or product term or warranty being offered to any commercial or government customer (including any public educational institution within the State of Michigan) of Contractor. If Contractor enters into any arrangements with another customer of Contractor to provide the products or services, available under this Contract, under more favorable prices, as the prices may be indicated on Contractor’s current U.S.

and International price list or comparable document, then this Contract will be deemed amended as of the date of such other arrangements to incorporate those more favorable prices, and Contractor will immediately notify the State of such fee and formally memorialize the new pricing in a change notice.

Liquidated Damages. Liquidated damages, if applicable, will be assessed as described in a Statement of Work. The parties understand and agree that any liquidated damages (which includes but is not limited to applicable credits) set forth in this Contract are reasonable estimates of the State’s damages in accordance with applicable law. The parties acknowledge and agree that Contractor could incur liquidated damages for more than 1 event. The assessment of liquidated damages will not constitute a waiver or release of any other remedy the State may have under this Contract for Contractor’s breach of this Contract, including without limitation, the State’s right to terminate this Contract for cause under Section 24 and the State will be entitled in its discretion to recover actual damages caused by Contractor’s failure to perform its obligations under this Contract. However, the State will reduce such actual damages by the amounts of liquidated damages received for the same events causing the actual damages. Amounts due the State as liquidated damages may be set off against any fees payable to Contractor under this Contract, or the State may http://www.michigan.gov/SIGMAVSS

Version 2022-4 22 of 31 bill Contractor as a separate item and Contractor will promptly make payments on such bills.

Stop Work Order. The State may suspend any or all activities under the Contract at any time. The State will provide Contractor a written stop work order detailing the suspension. Contractor must comply with the stop work order upon receipt. Within 90 calendar days, or any longer period agreed to by Contractor, the State will either: (a) issue a notice authorizing Contractor to resume work, or (b) terminate the Contract or delivery order. The State will not pay for Contract Activities, Contractor’s lost profits, or any additional compensation during a stop work period.

Termination for Cause. (a) The State may terminate this Contract for cause, in whole or in part, if Contractor, as determined by the State: (i) endangers the value, integrity, or security of any facility, data, or personnel; (ii) becomes insolvent, petitions for bankruptcy court proceedings, or has an involuntary bankruptcy proceeding filed against it by any creditor; (iii) engages in any conduct that may expose the State to liability; (iv) breaches any of its material duties or obligations under this Contract; or (v) fails to cure a breach within the time stated by the State in a notice of breach, if in its sole discretion the State has chosen to provide a time to cure. Any reference to specific breaches being material breaches within this Contract will not be construed to mean that other breaches are not material.

(b) If the State terminates this Contract under this Section, the State will issue a termination notice specifying whether Contractor must: (i) cease performance immediately. Contractor must submit all invoices for Contract Activities accepted by the State within 30 days of the date of termination. Failure to submit an invoice within that timeframe will constitute a waiver by Contractor for any amounts due to Contactor for Contract Activities accepted by the State under this Contract or (ii) continue to perform for a specified period. If it is later determined that Contractor was not in breach of the Contract, the termination will be deemed to have been a Termination for Convenience, effective as of the same date, and the rights and obligations of the parties will be limited to those provided in Section 25, Termination for Convenience.

The State will only pay for amounts due to Contractor for Contract Activities accepted by the State on or before the date of termination, subject to the State’s right to set off any amounts owed by the Contractor for the State’s reasonable costs in terminating this Contract. Contractor must promptly reimburse to the State any fees prepaid by the State prorated to the date of such termination, including any prepaid fees. The Contractor must pay all reasonable costs incurred by the State in terminating this Contract for cause, including administrative costs, attorneys’ fees, court costs, transition costs, and any costs the State incurs to procure the Contract Activities from other sources.

Termination for Convenience. The State may immediately terminate this Contract in whole or in part without penalty and for any reason or no reason, including but not limited to, appropriation or budget shortfalls. The termination notice will specify whether Contractor must: (a) cease performance of the Contract Activities immediately. Contractor must submit all invoices for Contract Activities accepted by the State within 30 days of the date of termination. Failure to submit an invoice within

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