RFP 210000000570 Master Lease Pre-Qualification Program Supplementation.docx

STATE OF MICHIGAN

Department of Technology, Management and Budget—Procurement

Financial Leasing Prequalification Program Supplementation Request for Proposal 210000000570

Solicitation Manager Name: Doug Glaser Direct Phone: (517) 898-3982 Email: glaserd@michigan.gov Main Phone: 1-855-MI-PURCH 1-855-647-8724

This is a Request for Proposal (RFP) to increase competition through the provision of supplemental Financial Lease Providers to the State’s already-established Financial Leasing Prequalification Program as detailed in Schedule A – Statement of Work. CONTRACTORS WHO HAVE ALREADY BEEN AWARDED A CONTRACT FROM THE PREVIOUS RFP: 190000000197 NEED NOT RESPOND

RFP Timeline

*A bidder’s proposal received at 15:00:01 p.m. Eastern is late and subject to disqualification.

This RFP is subject to change. Check www.michigan.gov/SIGMAVSS for current information.

PROPOSAL INSTRUCTIONS

1. PROPOSAL PREPARATION. The State recommends reading all RFP materials prior to preparing a proposal, particularly these Proposal Instructions and the Vendor Questions Worksheet. Bidders must follow these Proposal Instructions and provide a complete response to the items indicated in the table below. References and links to websites or external sources may not be used in lieu of providing the information requested in the RFP within the proposal. Include the bidder’s company name in the header of all documents submitted with your proposal.

RFP Structure and Documentation

2. CONTACT INFORMATION FOR THE STATE. The sole point of contact for the State concerning this RFP is listed on the Cover Page. Contacting any other State personnel, agent, consultant, or representative about this RFP may result in bidder disqualification.

3. QUESTIONS. Bidder questions about this RFP must be emailed to glaserd@michigan.gov no later than the time and date specified on the Cover Page. In the interest of transparency, only written questions are accepted. Answers to questions will be posted on www.michigan.gov/SIGMAVSS. Submit questions using the format below; a Microsoft Excel format or similar is suggested.

4. MODIFICATIONS. The State may modify this RFP at any time. Modifications will be posted on www.michigan.gov/SIGMAVSS . This is the only method by which the RFP may be modified.

5. DELIVERY OF PROPOSAL.

Electronic – The bidder must submit its proposal, all attachments, and any modifications or withdrawals electronically through www.michigan.gov/SIGMAVSS. The bidder should submit all documents in a modifiable (native) format (examples include, but are not limited to: Microsoft Word or Excel and Google Docs or Sheets). In addition to submitting documents in a modifiable format, the bidder may also submit copies of documents in PDF. Bidder’s failure to submit a proposal as required may result in disqualification. The proposal and attachments must be fully uploaded and submitted prior to the proposal deadline. Do not wait until the last minute to submit a proposal.

6. EVALUATION PROCESS.

The State will evaluate each proposal on a Pass/Fail basis:

1. Tier I Solicitation (this RFP No. 210000000570) Bidders must agree to the terms and conditions in the attached Master Equipment Lease Agreement With Early Purchase Option (Master Agreement) to pass evaluations and be considered for award. Upon award under Tier I, bidders must execute the Master Agreement to be considered a prequalified Contractor for Tier II Solicitations.

The State strongly encourages strict adherence to the Master Agreement Terms. The State reserves the right to deem a bid non-responsive for failure to accept the Master Agreement Terms. Nevertheless, the bidder may submit proposed changes to the Master Agreement Terms in track changes (i.e., visible edits) with an explanation of the bidder’s need for each proposed change. Failure to include track changes with an explanation of the bidder’s need for the proposed change constitutes the bidder’s acceptance of the Master Agreement Terms. General statements, such as that the bidder reserves the right to negotiate the terms and conditions, may be considered non-responsive.

The State may utilize all bidder information to determine fair market value for goods or services sought. The State is not obligated to accept the lowest price proposal. If applicable, the State’s evaluation will include consideration of a bidder’s qualified disabled veteran (QDV) status under MCL 18.1261(8). Additional information on the QDV preference is available at: http://michigan.gov/micontractconnect/0,https://www.michigan.gov/dtmb/0,5552,7-358-82550_85746_48677-412612--,00.html,7-225-48677-123519--,00.html.

The State may conduct interviews, research, reference checks, and background checks; and request additional price concessions at any point during the evaluation process.

2. Tier II Solicitations The State will issue a Request for Financing Proposal to the prequalified Contractor pool on an as needed basis. The State will make an award recommendation to the responsive and responsible prequalified Contractor who offers the best value to the State, as determined by the State.

7. NOTICE OF DEFICIENCY. The State reserves the right to issue a Notice of Deficiency to bidders if the State determines after the proposal deadline that a portion of the RFP was deficient, unclear, or ambiguous. Failure to respond to a Notice of Deficiency timely may be cause for disqualification.

8. CLARIFICATION REQUEST. The State reserves the right to issue a Clarification Request to a bidder to clarify its proposal if the State determines the proposal is not clear. Failure to respond to a Clarification Request timely may be cause for disqualification.

9. RESERVATIONS. The State reserves the right to:

a. Disqualify a bidder for failure to follow these instructions.

b. Discontinue the RFP process at any time for any or no reason. The issuance of an RFP, your preparation and submission of a proposal, and the State’s subsequent receipt and evaluation of your proposal does not commit the State to award a contract to you or anyone, even if all the requirements in the RFP are met.

c. Consider late proposals if: (i) no other proposals are received; (ii) no complete proposals are received; (iii) the State received complete proposals, but the proposals did not meet mandatory minimum requirements or technical criteria; or (iv) the award process fails to result in an award.

d. Consider an otherwise disqualified proposal, if no other proposals are received.

e. Disqualify a proposal based on: (i) information provided by the bidder in response to this RFP; (2) the bidder’s failure to complete registration on www.michigan.gov/SIGMAVSS ; or (3) if it is determined that a bidder purposely or willfully submitted false or misleading information in response to the RFP.

f. Consider prior performance with the State in making its award decision.

g. Consider overall economic impact to the State when evaluating proposal pricing and in the final award recommendation. This includes but is not limited to: considering principal place of performance, number of Michigan citizens employed or potentially employed, dollars paid to Michigan residents, Michigan capital investments, job creation, tax revenue implications, and economically disadvantaged businesses.

h. Consider total-cost-of-ownership factors (e.g., transition and training costs) when evaluating proposal pricing and in the final award recommendation.

i. Refuse to award a contract to any bidder that has failed to pay State taxes or has outstanding debt with the State.

j. Enter into negotiations with one or more bidders on price, terms, technical requirements, or other deliverables.

k. Award multiple, optional-use contracts, or award by Contract Activity.

l. Evaluate the proposal outside the scope identified in Section 6, Evaluation Process, if the State receives only one proposal.

10. AWARD RECOMMENDATION FOR TIER 1 SOLICITATION (this RFP No. 190000000197). The contract will be awarded to the responsive and responsible bidder who offers the best value to the State, as determined by the State. Best value will be determined by the bidder(s) passing based on Section 6, Evaluation Process, as demonstrated by the proposal. The State will post a Notice of Recommendation for Award on www.michigan.gov/SIGMAVSS .

11. DEBRIEF MEETING AND BID PROTEST. The State will post a Notice of Recommendation for Award, which will provide instructions on how to request a debrief meeting

If you wish to initiate a protest of the award, you must submit your written protest electronically at BidProtest-DTMB@michigan.gov no later than 12:00 p.m., five (5) calendar days after posting the Notice of Recommendation for Award on SIGMA VSS, or by 12:00 p.m. the next business day if that date falls on a state holiday or weekend. The State reserves the right to adjust this timing and will publish any change on the SIGMA VSS.

Additional information about the protest process is available at www.michigan.gov/micontractconnect under the “Programs and Policies” link.

12. STATE ADMINISTRATIVE BOARD. Contracts in excess of $500,000 require approval by the State Administrative Board. The State Administrative Board’s decision is final; however, its approval does not constitute a contract. The award process is not complete until the awarded contractor receives a contract fully executed by all parties.

13. GENERAL CONDITIONS. The State will not be liable for any costs, expenses, or damages incurred by a bidder participating in this solicitation. The bidder agrees that its proposal will be considered an offer to do business with the State in accordance with its proposal, including the Contract Terms, and that its proposal will be irrevocable and binding for a period of 180 calendar days from date of submission. If a contract is awarded to the bidder, the State may, at its option, incorporate any part of the bidder’s proposal into a contract. This RFP is not an offer to enter into a contract. This RFP may not provide a complete statement of the State’s environment, or contain all matters upon which agreement must be reached. Other than verified trade secrets, proposals submitted via www.michigan.gov/SIGMAVSS are the State’s property.

14. CONFIDENTIAL TREATMENT FORM AND THE FREEDOM OF INFORMATION ACT. All portions of the bidder’s proposal and resulting contract are subject to disclosure as required under Michigan’s Freedom of Information Act (FOIA), MCL 15.231, et seq. However, some information may be exempt from disclosure. Under MCL 18.1261(13)(b), records containing “a trade secret as defined under section 2 of the uniform trade secrets act, 1998 PA 448, MCL 445.1902,” are exempt from disclosure under FOIA. In addition, “financial or proprietary information” submitted with a bidder’s proposal is exempt from disclosure under FOIA. A bidder’s failure to comply with this Section is grounds for rejecting a bidder’s proposal as non-responsive. As a part of its proposal, each bidder must follow the procedure below.

a. SUBMIT A COMPLETED “CONFIDENTIAL TREATMENT FORM” (CT FORM) WITH YOUR BID. Completion and submission of the CT Form is required regardless of whether the bidder seeks confidential treatment of information. Failure to submit a completed CT Form may be cause for disqualification from the solicitation process.

i. Complete and sign Section 1 of the CT Form if the bidder does NOT request confidential treatment of information contained in its proposal; or

ii. Complete and sign Section 2 of the CT Form if the bidder requests confidential treatment of certain information. Bidder must also submit a “Public Copy” of the proposal with the trade secret, financial, and proprietary information redacted and clearly labeled as the “Public Copy.”

b. FOIA REQUESTS. If a FOIA request is made for a bidder’s proposal, the Public Copy may be distributed to the public along with the bidder’s CT Form. The CT Form is a public document and serves as an explanation for the redactions to the Public Copy. Do not put any trade secret, financial, or proprietary information in the CT Form. Do not redact the CT Form itself.

c. NO ADVICE. The State will not advise a bidder as to the nature or content of documents entitled to protection from disclosure under FOIA or other laws, as to the interpretation of such laws, or as to the definition of trade secret or financial or proprietary information. Nothing contained in this provision will modify or amend requirements and obligations imposed on the State by FOIA or other applicable law.

d. FAILURE TO REQUEST CONFIDENTIAL TREATMENT. Failure to request material be treated as confidential as specified herein relieves the State, its agencies, and personnel from any responsibility for maintaining material in confidence.

e. Bids containing a request to maintain an entire proposal as confidential may be rejected as non-responsive. Bidders may not request confidential treatment with respect to resumes, pricing, and marketing materials. The State reserves the right to determine whether material designated as exempt by a bidder falls under MCL 18.1261 or other applicable FOIA exemptions. If a FOIA request is made for materials that the bidder has identified as trade secret, financial, or proprietary information, the State has the final authority to determine whether the materials are exempt from disclosure under FOIA.

f. Bidder forever releases the State, its departments, subdivisions, officers, and employees from all claims, rights, actions, demands, damages, liabilities, expenses and fees, which arise out of or relate to the disclosure of all or a portion of bidder’s proposal submitted under this RFP. Bidder must defend, indemnify and hold the State, its departments, subdivisions, officers, and employees harmless, without limitation, from and against all actions, claims, losses, liabilities, damages, costs, attorney fees, and expenses (including those required to establish the right to indemnification), arising out of or relating to any FOIA request, including potential litigation and appeals, related to the portion of bidder’s proposal submitted under this RFP that bidder has identified as a trade secret, or financial or proprietary information. The State will notify bidder in writing if indemnification is sought. The State is entitled to: (i) regular updates on proceeding status; (ii) participate in the defense of the proceeding; (iii) employ its own counsel; and to (iv) retain control of the defense, or any portion thereof, if the State deems necessary. Bidder will not, without the State’s written consent (not to be unreasonably withheld), settle, compromise, or consent to the entry of any judgment in or otherwise seek to terminate any claim, action, or proceeding. If a State employee, official, or law is involved or challenged, the State may control the defense of that portion of the claim. Any litigation activity on behalf of the State, or any of its subdivisions under this Section, must be coordinated with the Department of Attorney General. An attorney designated to represent the State may not do so until approved by the Michigan Attorney General and appointed as a Special Assistant Attorney General.

CONFIDENTIAL TREATMENT FORM (CT FORM)

INSTRUCTIONS. Complete either Section 1 or Section 2 of this CT Form and sign where indicated. This CT Form must be signed by the individual who signed the bidder’s proposal. A completed CT Form must be submitted with your proposal, regardless of whether your proposal contains confidential information. Failure to submit a completed CT Form with your bid is grounds for rejecting the proposal as non-responsive. See Section 16 of the Proposal Instructions for additional information.

Section 1. Confidential Treatment Is Not Requested

This section must be completed, signed, and submitted with the proposal if bidder does not request confidential treatment of any material contained in the proposal.

By signing below, the bidder affirms that confidential treatment of material contained in the proposal is not requested.

[Printed Name] [Title] [Company]

Section 2. Confidential Treatment Is Requested

The section must be completed, signed, and submitted with the proposal if bidder requests confidential treatment of any material contained in the proposal. Submission of a completed CT Form is required to request confidential treatment.

Provide the information in the table below. Bidder may add rows or additional pages using the same format shown in the table. Bidder must specifically identify the information to be protected as confidential and state the reasons why protection is necessary. The CT Form will not be considered fully complete unless, for each confidentiality request, the bidder: (1) identifies whether the material is a trade secret (TS), financial information (FI), or proprietary information (PI); (2) explains the specific legal grounds that support treatment of the material as TS, FI, or PI; and (3) provides the contact information for the person at bidder’s organization authorized to respond to inquiries by the State concerning the material. Bidders must not simply cite to an applicable act or case name; rather, bidders must provide a complete justification as to how the material falls within the scope of an applicable act or relevant case law.

CONFIDENTIAL TREATMENT FORM (CT FORM)

By signing below, the bidder affirms that confidential treatment of material contained in its proposal is requested and has attached to this form a redacted “Public Copy” of the bidder’s proposal.

[Printed Name] [Title] [Company]

VENDOR QUESTIONS WORKSHEET

Provide a detailed response to each question. “You” and “company” refers to the bidder.

1. Contact Information

Bidder’s sole contact person during the RFP process. Include name, title, address, email, and phone number.

Person authorized to receive and sign a resulting contract. Include name, title, address, email, and phone number.

2. Company Background Information

Legal business name and address. Include business entity designation, e.g., sole proprietor, Inc., LLC, or LLP.

What state was the company formed in?

Phone number

Website address

Number of years in business and number of employees

Legal business name and address of parent company, if any

Has there been a recent change in organizational structure (e.g., management team) or control (e.g., merger or acquisition) of your company? If the answer is yes: (a) explain why the change occurred and (b) how this change has affected your company.

Discuss your company’s history. Has growth been organic, through mergers and acquisitions, or both?

Has bidder ever been debarred, suspended, or disqualified from bidding or contracting with any entity, including the State of Michigan? If yes, provide the date, the entity, and details about the situation.

Has your company been a party to litigation against the State of Michigan? If the answer is yes, then state the date of initial filing, case name and court number, and jurisdiction.

Within the last 5 years, has your company or any of its related business entities defaulted on a contract or had a contract terminated for cause? If yes, provide the date, contracting entity, type of contract, and details about the termination or default.

State your gross annual sales for the last 5 years.

If receiving a contract under this RFP will increase your gross revenue by more than 25% from last year’s sales, explain how the company will scale-up to manage this increase.

Describe partnerships and strategic relationships you think will bring significant value to the State.

State the physical address of the place of business that would have primary responsibility for this account if bidder is awarded a contract under this RFP.

3. Qualified Disabled Veteran

To demonstrate qualification as a qualified disabled veteran, you must provide:

(a) Proof of service and conditions of discharge (DD214 or equivalent);

(b) Proof of service-connected disability (DD214 if the disability was documented at discharge or Veterans Administration Rating Decision Letter or equivalent if the disability was documented after discharge); and

(c) Legal documents setting forth the ownership of the business entity.

In lieu of the documentation identified above, you may provide proof of certification by the National Veterans Business Development Council.

Enter the names of documents submitted with your proposal to demonstrate status as a qualified disabled veteran.

4. Participation in RFP Development or Evaluation

Did your company, an employee, agent, or representative of your company, or any affiliated entity participate in developing any component of this solicitation? For purposes of this question, business concerns, organizations, or individuals are affiliates of each other if, directly or indirectly: (1) either one controls or has power to control the other or (2) a third party controls or has the power to control both. Indicia of control include, but are not limited to, interlocking management or ownership, identity of interests among family members, shared facilities or equipment, and common use of employees.

If you entered “YES”, you are not eligible for contract award or to work as a subcontractor for the awarded vendor.

5. State of Michigan Experience and Prior Experience

Does your company have experience working with the State of Michigan? If so, please provide a list (including the contract number) of the contracts you hold or have held with the State for the last 10 years.

Describe at least 3 relevant experiences from the last 5 years supporting your ability to successfully manage a contract of similar size and scope for the work described in this RFP.

Experience 1

Company name Contact name Contact role at time of project Contact phone Contact email

City State Zip

1. Project name and description of the scope of the project

2. What role did your company play?

3. How is this project experience relevant to the subject of this RFP?

Dollar value

Start and end date (mm/yy – mm/yy)

Status (completed, live, other – specify phase)

Results obtained

Experience 2

Company name

Contact role at time of project

City

1. Project name and description of the scope of the project

Dollar value

Start and end date (mm/yy – mm/yy)

Status (completed, live, other – specify phase)

Results obtained

Experience 3

Company name

Contact role at time of project

City

1. Project name and description of the scope of the project

Dollar value

Start and end date (mm/yy – mm/yy)

Status (completed, live, other – specify phase)

Results obtained

6. Standard Contract Terms

Bidder must affirm agreement with the attached Master Agreement Terms. If not in agreement, written exceptions in accordance with Section 6 Evaluation Process must be provided with Bidder’s proposal.

7. Other

Request For Proposal No. 20000000570 Financial Leasing Prequalification Program Supplementation

SCHEDULE A

STATEMENT OF WORK

This schedule identifies the anticipated requirements of any Contract resulting from this Request for Proposal (RFP). The term “Contractor” in this document refers to a bidder responding to this RFP.

The Contractor must respond to each requirement or question and explain how it will fulfill each requirement. Attach any supplemental information and appropriately reference within your response.

1. Project Request This RFP is issued by the State of Michigan (State) Department of Technology, Management and Budget (DTMB) for the purposes of soliciting additional qualified Contractors to supplement a list of current contractors, to participate in the Financial Leasing Prequalification Program.

2. BACKGROUND

Pursuant to Public Act (PA) 431 of 1984 (“The Management and Budget Act”), DTMB is the only agency authorized to enter into lease agreements on behalf of the State of Michigan (State). No individual, employee or agent of the State has authority to bind the State without proper authorization.

The State must purchase up-to-date Equipment to operate efficiently and ensure compliance with Federal and State guidelines related to encryption and data security. Additionally, the increase in data-driven projects by various State agencies has increased the demand for extra storage. However, there are times when agencies cannot purchase Equipment outright, thus the need for lease purchases, spreading the cost over a fixed period of time and allowing agencies to reach their business goals and needs in a cost-effective manner.

Historically, lease purchase agreements were established on an as-needed basis, which proved both time consuming and expensive. Therefore, the State has decided to establish a prequalification program to significantly reduce the time and costs associated with securing financing for equipment and software.

The original RFP this RFP is supplementing was 190000000197, which resulted in a pool of pre-approved Lessors to participate in Tier 2 of the bidding process. This new RFP is intended to increase competition to the pool of Tier 2 Lessors, by giving additional Lessors an opportunity to participate in the Tier 2 process. Contractors who have already been awarded a contract that resulted from RFP 190000000197 need not respond to this RFP.

3. SCOPE

Contractors will provide financial leasing services in agreement with the Master Equipment Lease Agreement With Early Purchase Option (“Master Agreement”) required to participate in the prequalification program. This is a prequalification program where a lease purchase is requested at the agency level and approved by DTMB. Under the State’s program, only Equipment is leasable; installation and training are excluded. Due to the specialized nature of this program, the resulting Contract(s) will not be made available to MiDEAL and Extended Purchasing Program members.

4. REQUIREMENTS

Contractor must provide deliverables, services and staff, and otherwise do all things necessary for or incidental to providing services in compliance with the Master Agreement.

a. Pre-Qualified Contractors The State reserves the right to establish additional Contractors to join its prequalified Contractor pool through this RFP, and update the pool as deemed necessary by the State. This effort may entail re-soliciting qualified Contractors by issuing an RFP on an annual basis, at a minimum.

b. Tier II Process The State will issue a Request for Financing Proposal to the prequalified Contractor pool as detailed in Section 3. Request for Financing Proposal/Implementation of Leases of the Master Agreement. Once a need for Equipment is determined. The State will provide the Contractor with the following information when requesting services:

a. Description of Equipment;

b. Applicable Purchase Order (PO), Delivery Order (DO), Quote, Leasable Invoice, etc.;

c. Desired lease term not to exceed the useful life of the Equipment; and,

d. Other reasonably requested material information necessary to fulfill the State’s need.

The State will source Equipment utilizing existing State contracts for Equipment prior to issuing a Request for Financing Proposal. The State will issue a PO/DO for leasable Equipment which allows the Equipment contractor (“Vendor”) to create a leasable invoice and send goods directly to the State agency. The PO/DO and leasable invoice is used to commence the Tier II Process, competitively bidding the financing to the prequalification pool. The State will complete the Tier II Process before the State’s payment due date to the equipment contractor.

The State will make an award recommendation to the prequalified Contractor with the lowest interest rate, obtain State Administrative Board approval and establish a standalone lease purchase Contract for the leasable items. Upon execution of the lease purchase Contract, the State will cancel the PO/DO with the Vendor and issue a PO/DO to the awarded leasing Contractor. Payment in whole for the leasable Equipment is made to the Vendor by the leasing Contractor. The State will then begin monthly or annual payments to the leasing Contractor according to the financing terms established in the standalone leasing Contract.

NOTE: Every Contract established through the Tier II Process will be subject to the terms of the Master Agreement. The State reserves the right to issue a Request for Financing Proposal prior to obtaining a PO/DO or Quote to utilize the prequalification program to determine the benefits versus costs of leasing equipment.

c. Contractor will provide financial leasing options at a fixed interest rate, amortized monthly or annually, over a leasing term specified by the State, not to exceed the useful life of the item.

d. Contractor will provide financial leasing options on lease amounts greater than or equal to $500,000.00 over a leasing term specified by the State, not to exceed the useful life of the item.

Contractor shall describe how they will comply with Section 4. Requirements.

Contractor Response to Sections Section 4. Requirements:

5. Acceptance

5.1. Acceptance, Inspection and Testing

The State will follow Section 5. Acceptance of the Master Agreement to determine acceptance of the lease purchase Contract.

6. Staffing

6.1. Contractor Representative

The Contractor must appoint an individual, specifically assigned to State of Michigan accounts, that will respond to State inquiries regarding the Master Agreement and/or any lease purchase Contracts. (the “Contractor Representative”).

The Contractor must notify the Contract Administrator at least 10 calendar days before removing or assigning a new Contractor Representative.

6.2. Customer Service Toll-Free Number

The Contractor must specify its toll-free number for the State to make contact with the Contractor Representative. The Contractor Representative must be available for calls during the hours of 8:00 a.m. to 5:00 p.m. EST.

Contractor shall describe how they will comply with Section 6. Staffing requirements.

Contractor Response to Sections 6.1. through 6.3.:

7. Ordering

7.1. Authorizing Document

The appropriate authorizing document for the Contract will be a Master Agreement and purchase order or delivery order release.

MASTER EQUIPMENT LEASE AGREEMENT

WITH EARLY PURCHASE OPTION

This Master Equipment Lease Agreement with Early Purchase Option (this “Master Agreement”) is dated _________________________, (“Effective Date”) and entered into between [Insert Lessor Name] (“Lessor”) and the State of Michigan, Department of Technology, Management and Budget, an agency of the State of Michigan (“State”).

WHEREAS, Lessor and the State desire to enter into this Master Agreement to facilitate the execution and performance of individual leases incorporating this Master Agreement under which Lessor will lease Equipment to the State, subject to the terms and conditions of and for the purpose set forth in this Master Agreement;

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

1. Definitions.

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

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

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

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

“Commencement Date” is defined in Section 10.

“Default” is defined Section 31.

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

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

“Equipment” means the items described as Equipment in each Lease, together with any and all additions, modifications, attachments, accessions, substitutions, replacements and parts thereof. All references herein to “Equipment” will (i) include Software unless otherwise expressly provided in the Lease Schedule, but (ii) exclude DTMB Software.

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

“Event of Default” is defined in Section 31.

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

“Fiscal Year” means for each Lease, the fiscal year used by the State. “Beginning Fiscal Year” means the Fiscal Year in which the first Lease payment is due. Any Fiscal Year after the Beginning Fiscal Year is a subsequent or succeeding Fiscal Year.

“Initial Term” is defined in Section 10.

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

“Lease Payments” means the basic lease payments, payable by the State pursuant to the provisions of this Master Agreement, as calculated in accordance with Addendum B to the Lease Schedule and set forth in each Lease. Lease Payments will be payable by the State to the Lessor in the amounts and at the times set forth in the Schedule of Payments. The State will pay Lessor the Lease Payments as set forth on the attached Schedule of Payments within forty-five calendar days following receipt of proper invoices.

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

“Lease Term” means the term of a Lease Schedule, which as to all items of Equipment will not exceed the useful life of the item, commencing on the first day when such items are accepted by the State, as evidenced by its execution of an Acceptance Certificate.

“Purchase Agreement” means a purchase contract or order between the State of Michigan and a Vendor for the purchase of Equipment.

“Renewal Term” is defined in Section 10.

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

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

“Software” means any computer program described in a Lease Schedule other than DTMB Software, whether in source code, object code, or in any other form, together with all of the State's rights as licensee or otherwise under any agreements with the licensor thereof, and all associated media and supporting documentation.

“State” means the State of Michigan.

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

“Vendor” as to each item of Equipment means the supplier as defined in the MCL 440.2803(1)(x).

2. General. Lessor and the State may execute Lease Schedules only in accordance with and subject to the terms and conditions of this Master Agreement. Each Lease will incorporate the terms and conditions of this Master Agreement and will, together with this Master Agreement, constitute a separate and distinct Lease. No Leases may be cross-defaulted or cross-collateralized. Anything herein to the contrary notwithstanding, this Master Agreement may not be supplemented, amended or altered in any way without the express written consent of Lessor and the State. Execution of this Agreement does not create an obligation of either party to lease to or from the other.

3. Request for Financing Proposal/Implementation of Leases. If the State desires to lease equipment it will send to Lessor a Request for Financing Proposal, which may be accompanied by: (a) the applicable Purchase Agreement, quote or equivalent setting forth a description of the Equipment, including the cost and Vendor of such Equipment; (b) the desired Lease Term (not to exceed the useful life of the item); and (c) such other material information as Lessor may reasonably request. Lessor acknowledges and agrees that the State is the only entity authorized to submit a Request for Financing Proposal. Lessor will not rely upon any representation by any other person or entity other than the State whatsoever for such purposes.

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

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

The State will attempt to notify Lessor within (5) Business Days of the Request for Financing Proposal Response deadline to respond of its decision to accept the terms of the Financing Proposal Response. Upon acceptance of a Financing Proposal Response, the State will prepare, sign and remit to Lessor a Lease Schedule together with an Equipment Description, Schedule of Payments, IRS Form 8038-G, Opinion of Counsel (see attached Exhibit E), and Signature Authority Policy (see attached Exhibit F) (collectively “Closing Documents”). The Acceptance Certificate will be executed and remitted after acceptance according to the terms of this Master Agreement.

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

4. Delivery and Installation of Equipment. The State will order the Equipment, cause the Equipment to be delivered and installed at the location agreed upon and pay any and all delivery and installation costs in connection therewith.

5. Acceptance. After delivery and inspection of the Equipment, the State will determine whether the Equipment is acceptable as described in the Purchase Agreement between the Vendor and the State of Michigan. The State will confirm to Lessor its written acceptance of the Equipment by executing a “Certificate of Acceptance.” A blank, unexecuted copy of a Certificate of Acceptance is attached as Exhibit B. The “Acceptance Date” in Exhibit B will be the Commencement Date of the Lease as provided in Section 10.

6. Payment to Vendor. On or within seven Business Days after its receipt of an executed Acceptance Certificate and Closing Documents, Lessor will pay the Equipment Cost directly to the Vendor or other party to whom payment is due as noted on a proper and valid invoice from Vendor. Lessor will not invoice the State for any Lease Payment, and no Lease Payment will be due, owing or payable with respect to any period prior to the payment in full of the Equipment Cost. Upon request, Lessor will certify to the State that the Equipment Cost of any designated item of Equipment has been paid in full.

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

8. Lessor Representations. Lessor represents as of the Commencement Date of this Lease that: (a) Lessor will pay for the Equipment as specified in Section 6; (b) Pursuant to Section 12, Lessor will convey clear title for the Equipment to the State if and when the State exercises the purchase option; (c) Lessor is neither currently engaged in nor will engage in the boycott of a person based in or doing business with a strategic partner as described in 22 USC 8601 to 8606; and (d) Lessor or any of its subcontractors, manufacturers, or suppliers does not appear in the register compiled pursuant to 1980 PA 278, as amended, MCL 423.321 et seq. (Employers Engaging in Unfair Labor Practices Act). The State may void this Lease if Lessor or any subcontractor, manufacturer, or supplier of Lessor appears in that register. A breach of this Section is a material breach of this Lease.

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

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

Each Lease Schedule will set forth the Lease Term which will consist of an Initial Term and subsequent Renewal Terms from the Commencement Date until the Lease is otherwise terminated as set forth below. The Lease Term will begin on the Commencement Date. The Commencement Date for the Lease is the date on which the Equipment is accepted by the State in the manner described in Section 5.

The Initial Term is the period from the Commencement Date, until the end of the Beginning Fiscal Year for which funds have been appropriated to make lease payments under this Lease. A Renewal Term is a subsequent Fiscal Year for which funds have been appropriated to make lease payments under the Lease.

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

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