DocuSign Envelope ID: 4DF55D7B-FC7A-4620-AAFC-BA1430ED09F5

Contract Purchase Agreement : 6003161

Date : 10/30/2020

To :

Company SHOTSPOTTER, INC

Contact Karen Isotalo

Address 7979 GATEWAY BLVD. SUITE 210

NEWARK, CALIFORNIA 94560

From :

Company City of Detroit

Contact Jennie Whitfield
Address 2 WOODWARD AVENUE
STE 1100
DETROIT, MI 48226
UNITED STATES
Phone
Fax
E-mail

This document has important legal consequences. The information contained in this document is proprietary of the City of Detroit. It
shall not be used, reproduced, or disclosed to others without the express and written consent of the City of Detroit.

This agreement between the City of Detroit and SHOTSPOTTER, INC is authorized for binding commitment. This agreement will be
effective from 11/23/2020 to11/23/2024.

Chief Procurement Officer

Office of Contracting and Procurement

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Contract Purchase Agreement : 6003161

Date : 10/30/2020
Contract 6003161
Agreement
Contract 10/30/2020
Agreement Date
Change Order 0
Revision 0
Agreement Amount 1,500,000.00 USD

Procurement BU City of Detroit Supplier SHOTSPOTTER, INC

2 WOODWARD AVENUE Karen Isotalo
STE 1100 7979 GATEWAY BLVD. SUITE 210
DETROIT, MI 48226 NEWARK, CALIFORNIA 94560
UNITED STATES

Notes USD = US Dollar

Four (4) year agreement for DPD To Provide a Gunshot Detection, Location, and
Forensic Analysis Service. 6.48 square miles of coverage – 2.18 sq miles in Pct 8 and
4.3 sq miles in Pct 9.

Procurement Specialist Supplier Number Payment Terms Freight Terms FOB Shipping Method
Jennie Whitfield 2047001 Net 30 Account of Delivered Lowest Cost Carrier
Seller

Start Date End Date

11/23/2020 11/23/2024

Attachments
Type File Name or URL Title Description
File Gunshot Detection RFP Final.pdf Gunshot Detection RFP Final.pd
File New Terms and New Terms and Conditions_19JW1
Conditions_19JW18544.pdf
File City Council Contract Review City Council Contract Review Q
Questions.xlsx
File DOIT TECH PSC 4 26 2019.pdf DOIT TECH PSC 4 26 2019.pdf

Terms and Conditions :

Please see below for general conditions.

Special Terms :

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Contract Purchase Agreement : 6003161

Date : 10/30/2020
GENERAL CONDITIONS
Last Updated April 7, 2017

1. PROCUREMENT POLICY
Procurement for the City of Detroit shall be carried out in a manner which provides a transparent, open, and fair opportunity for
all eligible Suppliers to participate. This bid shall be made without collusion with any other person, firm or corporation making
any bid or proposal, or who otherwise makes a bid or proposal.

Suppliers must have a valid contract or Purchase Order with the signature of the Chief Procurement Officer to receive
payment for goods or services rendered. Suppliers who perform work without a valid contract or purchase order will not be
paid.

2. QUOTATIONS/PROPOSALS
Suppliers MUST electronically submit the bid quotation/proposal. Failure to submit will be grounds for rejection. In your
quotation, a distinction between dollars and cents must be made. Illegible bids may be grounds for rejection of your bid.

3. RESPONSIBILITIES
The responsibilities under this (proposed) contract are that the City of Detroit is obligated during the period stipulated to
purchase all its NORMAL REQUIREMENTS of the above referenced products and/or services from the Supplier, and the
Supplier is obligated to supply the quantities and/or services which the City of Detroit requires for its operations. Requirements
stated herein are approximate but are for entire normal requirements, whether more or less. Requirements stated are not
guaranteed.

4. COMPLIANCE WITH LAWS AND SECURITY REGULATIONS

The Supplier shall fully comply with and shall require its associates to comply with: (1) federal, state and local laws,
ordinances, code(s), regulations and policies applicable to this contract, including, but not limited to, all security regulations in
effect from time to time on the City's premises; (2) codes and regulations for materials, belonging to the City or developed in
relationship to this project; and (3) with the terms and conditions of the grant, and the requirements of the grantor agencies
when grant funds that are specifically related to this Contract are expended.

The Supplier shall indemnify, defend, and hold the City harmless with respect to any damages arising from any violations of
applicable laws and regulations by it or its associates. The Supplier shall commit no trespass on any public or private property
in performing any of the Services encompassed by this Contract. The Supplier shall require, as part of any subcontract that
sub-Contractors comply with all applicable laws and regulations. The Supplier shall secure, at no extra cost to the City of
Detroit, all Permits and Licenses necessary for the performance of the work and shall fully comply with all their terms and
conditions.

5. EQUAL OPPORTUNITY
It is the policy of the City that women-owned businesses (WBE), minority-owned businesses (MBE), and Detroit businesses
(DB) have a fair and equal opportunity to participate in the City's purchasing process. Therefore, the City of Detroit strongly
encourages D/M/WBEs to compete for contracts, as well as encourage suppliers to hire D/M/WBEs as subcontractors to
supply goods and/or services. The City of Detroit supports a robust free market system that seeks to include viable business
and provides opportunity for business growth and development.

6. INSURANCE
The Supplier shall maintain, at a minimum and at its expense during the term of this contract, the following insurance:

i. Worker's Compensation insurance with Michigan statutory limits and Employer's Liability insurance with limits of
$500,000.00 each accident, $500,000.00 each disease, $500,000.00 each employee. For Federal and State Funded
Training Programs, the Supplier is required to secure worker's compensation insurance for all of its participants.

ii. Commercial General Liability insurance with limits of $1,000,000.00 per occurrence, subject to a minimum aggregate
limit of $2,000,000.00

iii. Automobile Liability insurance covering all owned, hired and non-owned vehicles with personal protection insurance
and property protection insurance to comply with the provisions of the Michigan No-Fault Insurance Act, including
residual liability insurance with a minimum combined single limit of $1,000,000.00. Include MCS90 endorsement (if
hazardous waste will be transported by vendor's auto) with minimum property damage limits of $1,000,000.00 each
occurrence.

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If during the term of this contract, changed conditions or other pertinent factors, should in the reasonable judgment of the City,
render inadequate the insurance limits, the Supplier will furnish on demand such additional coverage as may reasonably be
required under the circumstances. All such insurance shall be effected at the Supplier's expense, under valid and enforceable
policies issued by insurers licensed to conduct business in Michigan.

All policies shall name the Supplier as the insured and shall be accompanied by a commitment from the insurer that such
policies shall not be canceled or reduced without at least thirty (30) days' prior notice to the City. The Commercial General
Liability insurance policy shall name the "City of Detroit" as an additional insured. Certificates of insurance evidencing such
coverage shall be submitted to the Office of Contracting and Procurement prior to the commencement of performance under
this contract and at least fifteen (15) days prior to the expiration dates of expiring policies.

7. SUBMISSION OF ANY REQUIRED BONDS OR INSURANCE

Receipt of bonds and/or insurance is part of the process of determining which Supplier may be recommended for award to the
City Council. If cause is found to change the recommendation that a Supplier be awarded the contract, or if the City Council
does not approve the recommendation, the City shall not be liable for any costs incurred by you in the bid process, including
the cost of acquiring bonds and/or insurance.

8. INVOICING
All suppliers must register in the Supplier Portal for invoicing for payment. Invoice submission instructions for Supplier Portal
usage can be found on the City of Detroit's website at http://www.detroitmi.gov/Supplier. Suppliers are required to be set up
for Automatic Clearing House (wireless payment) in order to receive payment.

Invoices Must Meet the Following Conditions for Payment:

All invoices submitted against the contract must include part or item numbers and/or description. The quantity (for goods)
and/or the amount (for services) must correlate to the price listed on the contract or purchase order.

Invoicing for goods and/or services should only be entered in the Supplier Portal after they have been shipped.
Invoicing before is prohibited and will result in the delay of payment. Failure to comply is considered non-compliant to the
terms of your contract or purchase order.

Timely submission of invoices will result in timely payments.

Questions should be directed to procurementinthecloud@detroitmi.gov.

Upon the City's registration of Contractor with the City's web-based supplier portal, Contractor shall enter into the portal the
appropriate banking information corresponding to the account to which Contractor elects to have the City send financial
payments due pursuant to this Agreement (the "Designated Account"). Contractor acknowledges and accepts that the City
shall send financial payments due to Contractor to the Designated Account, and the City shall bear no liability for any error in
the information provided by Contractor with respect to the Designated Account. The City has no obligation to independently
investigate the information provided by Contractor with respect to the Designated Account.

9. PROTECTION OF WORK, PERSONS, AND PROPERTY

During performance and up to the date of final acceptance, the Supplier shall be under absolute obligation to protect the
finished and unfinished work against any damage, loss or injury. The Supplier shall take all reasonable precautions to protect
the persons and property of the City from damage, loss or injury during performance under this contract.

10. CLEARANCES
The successful Supplier will be required to obtain approved clearances from the Income Tax Division, Revenue Collections
Division and Human Rights Department prior to City Council approval of the contract. Clearance forms for these agencies can
be found in the ERP system. It is the Supplier's responsibility to obtain and maintain clearances. Approved clearances are not
required to submit the bid, but will be required of the successful Supplier prior to City Council approval.

11. NON-DISCRIMINATION CLAUSE

In accordance with all Federal and State Legislation and Regulations governing Fair Employment, including, but not limited to,
Title VII of the Civil Rights Act of 1964 the Michigan Civil Rights Act and the Michigan Handicappers Civil Rights Act, the
Supplier agrees that it will not discriminate against employees or applicants for employment with respect to hire, tenure, terms,
conditions or privileges of employment because of religion, race, color, national origin, age, sex, height, weight, marital status
or handicap that is unrelated to the ability of the individual to perform the duties of a particular assignment or position. The
Supplier recognizes the right of the United States and the State of Michigan to seek judicial enforcement of the foregoing
covenants against the Supplier or its sub-Contractors, or both, in order to provide for efficient cooperation and coordination in
the handling of Contract compliance programs as provided in the Elliott-Larsen Civil Rights Act, as amended, and the Michigan
Handicappers Civil Rights Act, as amended. The Detroit Human Rights Department, The Detroit Human Rights Commission,
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the Michigan Department of Civil Rights and the Michigan Civil Rights Commission by mutual agreement, have authorized the
Detroit Human Rights Department in a contract compliance program to monitor all Suppliers doing business with the City and
to review the employment practices of Suppliers seeking to do business with the City prior to entering into a contract so that
the mandates of Section 209 of the Michigan Civil Rights Act are carried out. The Supplier agrees to include this paragraph
number 3 in any subcontract. Breach of this covenant may be regarded as a material breach of the contract.

12. UNIT PRICES, NOTATIONS, AND WORKMANSHIP

Prices and notations must be typed or in ink. Prices shall be for new items only unless specified otherwise in this Bid
Response Document. No erasures or "white-outs" are permitted. Mistakes may be crossed out and corrections entered and
initialed in ink by the persons signing the bid document. Unit prices shall be stated based on units specified. The Supplier may
quote on all or a portion of a quantity as specified. Quote on each item separately and indicate brand name or make. All
materials furnished must be new, of latest model and standard first-grade quality, of best workmanship and design, unless
expressly specified.

13. PRICES QUOTED

Prices quoted must be net of discounts. Discounts will be considered in the determination of best value Supplier, provided
discounts correspond for the duration of the contract. Where net is equal to bid with discount deducted, award will be made to
the net bid. The Supplier shall extend and total the bids.

14. SALES TAX EXEMPTION

The City is exempt from sales tax on those articles which the City buys for its own use. Articles bought by the Supplier and
incorporated into other products are taxable to the Supplier. Such tax should be included in the price and will not be paid as an
extra by the City. Sales tax is excluded from incorporated products when the final product is sold to non-profit housing
projects.

15. SPECIFICATIONS, CHANGE OF SPECIFICATION, AND ERRORS OR OMISSION

Specifications which refer to brand names are given for reference. Suppliers may quote on equivalent articles, provided that
brand name and catalog number(s) and any deviations are noted on the bid form and complete descriptive literature is
furnished. Exceptions will state "Do Not Substitute." The decision of the City shall be final. If any of the terms and conditions
prevent you from bidding, or if you wish to request revisions of specifications, or a change in quantity which will result in lower
unit cost to the City, or get an interpretation, your request will receive consideration if presented to the City as much in
advance of bid submission deadline as possible. If any change is found desirable while the bid is current, the City will notify the
Suppliers of the bid revision electronically and if required extend bid submission date. Suppliers are not permitted to take
advantage of any errors or omissions in specifications since full instructions will be given should they be discovered before bid
submission date.

Specifications referred to herein are used to indicate desired type, and/or construction, and/or operation. Other products
and/or services may be offered if deviations from specifications are minor and if all deviations are properly outlined and stated
in the bid document. Failure to outline all deviations will be grounds for rejection of your bid.

The decision of the City of Detroit, acting through the Chief Procurement Officer, shall be final as to what constitutes
acceptable deviations from specifications.

16. RECEIPT OF BIDS

Bids must be received by the Office of Contracting and Procurement through the electronic bid system (e.g. ERP System) prior
to the date and time specified on the face of this bid package unless otherwise authorized. Late bids cannot be accepted
except in extenuating circumstance such as ERP system failure. The responsibility of getting bids to the Office of Contracting
and Procurement on time rests entirely with the Supplier.

17. WITHDRAWAL
No bid shall be withdrawn for (90) ninety days from submission deadline unless otherwise stated in this bid form. Suppliers
may reduce this period if stated on bid, but such bids may be rejected on the basis of the reduced time period.

18. AWARD CONDITIONS

The City reserves the unqualified right to award by item(s) unless otherwise stipulated, to waive any irregularity in any bid or to
reject any and all bids when, in the judgment of the City, the best interest of the City will be served.

The award of a Contract will not be made to any Supplier who is in arrears in City taxes. Article V, Chapter 18 of the Detroit
City Code, forbids the award of any contract to person(s) who are in arrears of City real estate, personal property and/or
income taxes. To ensure compliance with the above ordinance, Suppliers may check the City of Detroit website,
www.detroitmi.gov. All awards will be made in accordance with the provisions of Article V, Chapter 18 of the Detroit City Code
which provides for purchasing and disposition of property consistent with the City Charter.

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19. CONTRACT ACCEPTANCE
The successful Supplier shall be notified of the award of a contract by the City of Detroit upon issuance of a "Contract Award
Notice" or a Purchase Order from the Office of Contracting and Procurement. The "Contract Award Notice" shall contain the
date the contract award was approved.

20. START OF WORK

No Contract shall become effective until the Contract has been approved by the required City Departments, signed by the City
of Detroit Chief Procurement Officer, and approved by resolution of the Detroit City Council. Prior to the completion of this
approval process, the Supplier will have no authority to begin work on this Contract. The Chief Procurement Officer shall not
authorize any payments to the Supplier prior to such approvals, nor shall the City incur any liability to reimburse the Supplier
regarding any expenditure for the purchase of materials or the payment of services.

21. INSPECTION
All articles are subject to inspection and testing. In case any articles are defective in material and/or workmanship, or
otherwise fail to meet requirements of this bid, the City shall have the right to reject or retain and correct such articles. The
Supplier shall pay the City for expenses incurred in correcting defects. Rejected articles will be returned to Suppliers at their
expense for handling, packing and transportation.

22. SUBCONTRACTING
None of the services covered by this Contract shall be subcontracted without the prior, written approval of the City and any
grantor agency, if required.

23. ASSIGNMENT
A Supplier shall not assign any purchase order or Contract or any monies due therefrom without prior approval of the City.
Contact the Contracting and Procurement Specialist for proper procedure.

24. DEFAULT
Default is defined as the failure of the Supplier to fulfill the obligations of their Contract. An event of default shall be construed
as a material breach of this Contract.

25. DAMAGES FOR BREACH OF CONTRACT

The Supplier shall be liable to the City for any damages it sustains by virtue of the Supplier's breach, or any reasonable costs
the City might incur enforcing or attempting to enforce this Contract, including, but not limited to, reasonable attorney's fees.
The City may withhold any payment(s) to the Supplier for the purpose of set-off until such time as the exact amount of
damages due to the City from the Supplier is determined. It is expressly understood that the Supplier will remain liable for any
damages the City sustains in excess of set-off. If the Contract is terminated for breach of Contract, the City may take over the
services, and pursue the same to completion by Contract with another party or otherwise, and the Supplier shall be liable to
the City for any and all costs occasioned to the City thereby. The City may assess upon the Supplier, for failure to meet any
provision or condition of the Contract, liquidated damages up to the amount of 15% of the total contract price, or the amount of
the cost incurred for the breach. Other remedies shall also be available to the City. The previous provisions outlined herein
shall be in addition to any and all other legal or equitable remedies permissible.

26. TERMINATION OF CONTRACT FOR CONVENIENCE

The City reserves the absolute right to terminate this contract in whole or in part, for the convenience of the City at its sole
discretion on thirty (30) days written notice to the Supplier.

27. TERMINATION OF CONTRACT FOR CAUSE

The Supplier agrees that the City shall have the right to terminate the City's Contract with the Supplier for cause, as
determined by the Chief Procurement Officer, without any liability whatsoever, upon the giving of ten (10) days' notice. Cause
is an event of default due to the Supplier's failure to fulfill its obligations under the Contract.

At any time during the term of the contract the City may terminate the agreement for reason of poor or deficient work
performance, inability of the Supplier to cure poor or deficient work performance, inability of the Supplier to supply trained
competent technicians, or lack of service as described in this agreement by giving a 10-calendar day notice in writing. EITHER
party may terminate the agreement by giving a 90-calendar day written notice to terminate.

28. AUDIT, INSPECTION OF RECORDS AND COST VERIFICATION

The City reserves the right to audit the Supplier's payroll records to verify labor charges for work performed under this Contract
upon 72 hours' notice. The Supplier shall permit the authorized representative of the City to inspect and audit all data and
records of the Supplier relating to its performance under this Contract during the term of the Contract and for three (3) years
after final payment. All records relating to this Contract shall be retained by the Supplier during the term of the Contract and for
three (3) years after final payment for the purpose of such audit and inspection.

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29. INDEMNITY
The Supplier agrees to indemnify, defend, and hold the City harmless against and from any and all liabilities, obligations,
damages, penalties, claims costs, charges, losses and expenses (including without limitation, fees and expenses for attorneys,
expert witnesses and other consultants), which may be imposed upon, incurred by or asserted against the City by reason of
any negligent or tortious acts, errors, or omissions attributable to the Supplier, or any failure by the Supplier to perform its
contractual obligations during the term of this Contract. This provision shall apply to all matters whether litigated or not, and
shall include disputes between the Supplier, the City of Detroit, and any negligent or tortious acts, errors, or omissions
attributable to the Supplier, its sub-Contractors or Agents.

30. CONFLICT OF INTEREST

The Supplier covenants that it presently has no interest and shall not acquire any interest, direct or indirect, which could
conflict in any manner or degree with the performance of the services under this Contract. The Supplier further covenants that
in the performance of this Contract no person having any such interest shall be employed. The Supplier further covenants that
no officer, agent, or employee of the City and no other public official who exercise any functions or responsibilities in the
review or approval of the undertaking or carrying out of this Contract has any personal or financial interest, direct or indirect, in
this Contract or in the proceeds thereof via corporate entity, partnership, or otherwise. The Supplier also hereby warrants that
it will not and has not employed any person to solicit or secure this Contract upon any agreement or arrangement for payment
of a commission, percentage, brokerage, contingent fee, other than bona fide employees working solely for the Supplier either
directly or indirectly, and that if this Warranty is breached, the City may, at its option, terminate this Contract without penalty,
liability or obligation, or may, at its election, deduct from any amounts owed to the Supplier hereunder, any amounts of any
such commission, percentage, brokerage, or contingent fee.

In accordance with Section 4-122 of the Detroit City Charter, the contractor shall provide a statement listing all political
contributions and expenditures ("Statement of Political Contributions and Expenditures"), as defined by the Michigan
Campaign Finance Act, MCL 169.201, et seq., made by the contractor, its affiliates, subsidiaries, principals, officers, owners,
directors, agents or assigns, to elective City officials within the previous four (4) years. Individuals shall also list any
contributions or expenditures from their spouses. The Contract is not valid unless and until the Statement of Political
Contributions and Expenditures is provided. The Statement of Political Contributions and Expenditures shall be filed by the
contractor on an annual basis for the duration of the Contract, shall be current up to and including the date of its filing, and
shall also be filed with all contract renewals and change orders, if any.

31. CHANGE IN SUPPLIER INFORMATION

Supplier shall notify the Office of Contracting and Procurement upon any change of address, telephone number, facsimile
number and electronic mail address, where applicable, within five (5) business days of such change. The notice shall be
submitted in writing to procurementinthecloud@detroitmi.gov identified on the Purchase Order and shall include all of
Supplier's changed information and the effective date of such change.

32. TAXPAYER IDENTIFICATION NUMBER

Supplier shall notify the Chief Procurement Officer and the Income Tax Administrator of the City upon the change of Supplier's
taxpayer identification number. Such notification shall be in writing; shall include at a minimum, the Supplier's taxpayer
identification number in use by the City, Supplier's new taxpayer identification number and all contract and purchase order
numbers under which the Supplier is currently providing goods and services to the City; and, shall be electronically submitted
to the City within five (5) business days of Supplier's receipt of confirmation of the registration of the new taxpayer identification
number by the Internal Revenue Service. Failure of the Supplier to supply the information required, may be deemed and event
of default at the sole discretion of the City.

33. SETOFF
In addition to Supplier's obligation to not become in arrears to the City for any obligation owed to the City, City shall have the
right to recover from payment owed to Supplier by City, delinquent withholding, corporate and property tax liabilities owed to
the City by Supplier. The City's right of recovery shall be a setoff against those payments owing to Supplier by virtue of this, or
any current City Contract. The City will provide written notice to Supplier of any intention to invoke its right to setoff payments
due to Supplier under this Contract against delinquent withholding, corporate and property tax liabilities owed. Such written
notice shall be delivered to Supplier at the address provided in the Contract/Purchase Order.

34. SUPPLIER COMMITMENT

By submitting this bid or proposal, the Supplier commits and legally binds itself to provide to the City of Detroit the
goods/services in this bid at the time, place, manner and pricing set forth in the bid as accepted by the City.

35. OFFICE OF THE INSPECTOR GENERAL

In accordance with Section 2-106.6 of the City Charter, any Contract resulting from this bid shall be voidable or rescindable at
the discretion of the Mayor or Inspector General at any time if a Public Servant who is a party to any Contract resulting from
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this bid has an interest in the Contract and fails to disclose such interest.

This Contract shall also be voidable or rescindable if a lobbyist or employee of the contracting party offers a prohibited gift,
gratuity, honoraria or payment to a Public Servant in relation to any Contract resulting from this bid. A fine shall be assessed to
the Contractor in the event of a violation of Section 2-106.6 of the City Charter. If applicable, the actions of the Contractor, and
its representative lobbyist or employee, shall be referred to the appropriate prosecuting authorities.

Pursuant to Section 7.5-306 of the City Charter, the Inspector General shall investigate any Public Servant, City agency,
program or official act, contractor and subcontractor providing goods and services to the City, business entity seeking
contracts or certification of eligibility for City contracts and person seeking certification of eligibility for participation in any City
program, either in response to a complaint or on the Inspector General's own initiative in order to detect and prevent waste,
abuse, fraud and corruption.

Any Public Servant who willfully and without justification or excuse obstructs an investigation of the Inspector General by
withholding documents or testimony, is subject to forfeiture of office, discipline, debarment or any other applicable penalty.

In accordance with Section 7.5-310 of the City Charter, it shall be the duty of every Public Servant, contractor, subcontractor,
and licensee of the City, and every applicant for certification of eligibility for a City contract or program, to cooperate with the
Inspector General in any investigation pursuant to Article 7.5, Chapter 3 of the City Charter.

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EXECUTION COPY

GUNSHOT DETECTION SERVICES CONTRACT

BETWEEN

CITY OF DETROIT, MICHIGAN

AND

SHOTSPOTTER, INC.

CONTRACT NO.
6003161

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Article 1. Definitions and Exhibits ................................................................................................ 3

Article 2. Engagement of Contractor and Subscription Services Obligations of the Contractor ......... 6
Article 3. License ............................................................................................................................ 8
Article 4. Contractor's Representations and Warranties ............................................................ 12
Article 5. Contract Effective Date and Time of Performance ................................................... 15
Article 6. Records, Work Products and Data City Obligations ................................................. 15
Article 7. Contractor Personnel and Contract Administration ................................................... 16
Article 8. Compensation and Security ......................................................................................... 17
Article 9. Maintenance and Audit of Records ..........................................................................177
Article 10. Indemnity and Limitation of Liability ......................................................................188
Article 11. Insurance ...................................................................................................................... 21
Article 12. Default and Termination............................................................................................233
Article 13. Assignment .................................................................................................................267
Article 14. Subcontracting ............................................................................................................. 27
Article 15. Conflict of Interest .....................................................................................................288
Article 16. Confidential Information and Proprietary Rights ...................................................... 29
Article 17. Compliance with Laws ............................................................................................... 30
Article 18. Office of Inspector General ......................................................................................... 30
Article 19. Amendments ................................................................................................................ 32
Article 20. Fair Employment Practices ......................................................................................... 32
Article 21. Notices .......................................................................................................................... 32
Article 22. Force Majeure .............................................................................................................. 33
Article 23. Waiver .......................................................................................................................... 33
Article 24. Miscellaneous............................................................................................................... 33
Article 25. Invoice Submission and Payment ............................................................................... 35
Article 26. Board of Ethics............................................................................................................. 35
Exhibit A – Subscription Services .................................................................................................. A-1
Exhibit B – Fee Schedule .................................................................................................................B-1
Exhibit C – Statement of Political Contributions and Expenditures .............................................C-1

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CITY OF DETROIT
GUNSHOT DETECTION SERVICES CONTRACT

This Gunshot Detection Services Contract is entered into by and between the City of
Detroit, a Michigan municipal corporation, acting by and through its Police Department, and
ShotSpotter, Inc., a corporation organized under the laws of Delaware, with its principal place of
business located at 7979 Gateway Blvd., Suite 210, Newark, California 94560.

Recitals:

Whereas, the City desires to engage the Contractor to deliver the Subscription Services as
set forth in this Contract; and

Whereas, the Contractor desires to provide the Subscription Services as set forth in this
Contract;

Accordingly, the parties agree as follows:

Article 1. Definitions and Exhibits

1.01 The following Capitalized words and expressions or pronouns used in their stead and as
used in this Contract shall have the following meanings:

"Amendment" means modifications or changes in this Contract that have been mutually
agreed upon by the City and the Contractor in writing and approved by the City Council.

"API” means application programing interface, which is a software intermediary that

allows two applications to communicate.

“Associates" means the personnel, employees, consultants, subcontractors, agents, and

parent company of the Contractor or of any Subcontractor, now existing or subsequently
created, and their agents and employees, and any entities associated, affiliated, or
subsidiary to the Contractor or to any subcontractor, now existing or subsequently created,
and their agents and employees.

"City" means the City of Detroit, a Michigan Municipal Corporation, acting through the
office or department named in the Contract as contracting for the Subscription Services on
behalf of the City.

"City Council" means the legislative body of the City.

“Contract" means each of the various provisions and parts of this document, including all
attached Exhibits and all Amendments, if any, as executed and approved by the appropriate
City departments or offices and by the City Council.

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"Contractor" means ShotSpotter, Inc., a corporation organized under the laws of Delaware
and authorized to do business in the State of Michigan.

“Coverage Area” means the area in square miles within the City of Detroit, Michigan
covered by the Subscription Services as set forth in Exhibit A.

“Data” means any and all information, including, but not limited to Personal Information,
if any, supplied by the City to the Contractor, any of the City’s information accessed or
used by the Contractor in connection with the Subscription Services or performance of this
Contract, and any other information gathered by, uploaded or transmitted to or stored
within the Subscription Services by the City. All Data is owned exclusively by the City.

“Data Storage” means the online electronic secure storage of Data during the Use of the
Subscription Services.
“Documentation” means any and all printed or electronic guides and manuals, including
sales, marketing and training materials provided by the Contractor for the authorized Use
of the Subscription Services.
“DPD” the City’s Police Department.

“Exhibit A” is the complete and detailed description of the Subscription Services.

"Exhibit B” is the Fee Schedule for this Contract and sets forth the amount of compensation
to be paid to the Contractor, including any Reimbursable Expenses.

"Exhibit C" is the Contractor’s Statement of Political Contributions and Expenditures.

“Investigator Portal” means the internet portal to which the City will have access to
Reviewed Alerts.

“PSAP” means the DPD’s call center where emergency calls initiated by any mobile or
landline subscriber is terminated.

“Personal Information” means information which relates to an identified or identifiable

individual, and includes any information defined from time to time as “personal
information” under applicable state or federal privacy legislation.

“Public Servant" means the Mayor, members of City Council, City Clerk, appointive
officers, any member of a board, commission or other voting body established by either
branch of City government or the City Charter, and any appointee, employee or individual
who provides services to the City within or outside of its offices or facilities pursuant to a
personal services contract.”

“Records" means all books, ledgers, journals, accounts, documents, and other collected
Data in which information is kept regarding the performance of this Contract and the
function of the Subscription Services.

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"Reimbursable Expenses" means only those costs incurred by the Contractor in the
performance of the Subscription Services, such as travel costs and document reproduction
costs that are identified in Exhibit B as reimbursable.

“Request for Proposals or RFP” means the City’s Solicitation 19JW18544, published
March 27, 2020.

“Reviewed Alerts” means the data reviewed by the Contractor’s incident review staff
related to gunfire incidents detected by the Subscription Services.

“Secure Sockets Layer” or “SSL” means the standard security technology for establishing
an encrypted link between a web server and a browser. This link ensures that all Data and
any other information in the Subscription Services remains private and integral. To be able
to create an SSL connection a web server requires an SSL Certificate.

“Sensors” means Contractor’s acoustic sensors that detect gunshot-like sounds and will be
installed by Contractor in the Coverage Area.

“Software” means the software embedded within the Contractor’s Subscription Services
including, Reviewed Alerts, ShotSpotter Respond™ and ShotSpotter Dispatch™
applications, and ShotSpotter® Investigator Portal user interface to which the City will
have access under this Contract on the Subscription basis.

“SQL Server” means the relational database management system developed and owned by
the Microsoft Corporation for storing and retrieving data as requested by other software
applications which may run either on the same computer or on another computer across a
network, including the Internet.

"Subcontractor" means any person, firm or corporation, other than employees of the
Contractor that contracts with the Contractor, directly or indirectly, to perform in part or
assist the Contractor in achieving the objectives of this Contract.

"Subscription” means the period for which the City is authorized to use the Subscription
Services, as set forth on Exhibit A.

“Subscription Services" means the Gunshot Detection Services provided by the

Contractor’s “ShotSpotter Gunshot Detection, Location, and Forensic Analysis Service”
and the Software provided to the City by the Contractor on a Subscription basis, including
all necessary hardware and software, as more precisely and completely defined in Exhibit
A and otherwise pursuant to the terms and conditions of this Contract.

“Unauthorized Acts" shall mean any acts by a City employee, agent or representative that
are not set forth in this Contract and have not been approved by City Council as part of this
Contract.

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"Use” shall mean the ability for the City to login with user name and password and access
the Subscription Services via the internet and conduct business on the Subscription
Services as described in Exhibit A.

“Work Product" shall mean the originals, or copies when originals are unavailable, of all
materials prepared by the Contractor under this Contract or in anticipation of this Contract,
including but not limited to the Data, Data Schemas, studies, briefs, drawings, maps,
models, photographs, files, records, computer printouts, estimates, memoranda,
computations, papers, supplies, notes, recordings, and videotapes, whether such materials
are reduced to writing, magnetically or optically stored, or kept in some other form. For
clarification, Work Product shall not include Contractor’s intellectual property.

Article 2. Engagement of Contractor and Subscription Services Obligations of the

Contractor

2.01 By this Contract, the City engages the Contractor and the Contractor hereby agrees to
provide the Subscription Services set forth in Exhibit A, in accordance with the terms and
conditions contained in this Contract. The City acknowledges that the Contractor’s ability
to perform its obligations under this Contract are predicated and conditioned upon the
City’s timely performance of, and compliance with the City’s obligations in this Contract.

2.02 The Contractor and the Subscription Services shall perform in a satisfactory manner as
shall be determined within the sole and reasonable discretion of the City. In the event that
there shall be any dispute between the parties with regard to the extent, character and
progress of the Subscription Services to be provided or the quality of performance under
this Contract, the interpretation and determination of the City shall govern.

2.02 The Contractor shall confer as necessary and cooperate with the City in order that the
implementation of the Subscription Services may proceed in an efficient and satisfactory
manner. The Contractor must attend all conferences, consultations and public hearings or
appearances deemed necessary by the City to ensure that the Contractor will be able to
properly and fully perform the objectives as set forth in this Contract.

2.03 The Subscription Services are subject to the review, approval and acceptance of the City
for completeness and fulfillment of the requirements of this Contract. Neither the City's
review, approval nor payment for any of the amounts listed on Exhibit B, including, but
not limited to the Subscription fees, shall be construed to operate as a waiver of any rights
under this Contract, and the Contractor shall be and will remain liable in accordance with
applicable law for all damages to the City caused by the Contractor's incorrect performance
or nonperformance of the Subscription Services furnished under this Contract.

2.04 The City and the Contractor expressly acknowledge their mutual understanding and
agreement that there are no third party beneficiaries to this Contract and that this Contract
shall not be construed to benefit any persons other than the City and the Contractor.

2.05 In addition to any other rights granted to the City under this Contract or by operation of
law, Contractor hereby grants the City a perpetual, royalty free license to Work Product for

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unlimited use by the City for any lawful purpose. During the term of this Contract the
Contract shall provide the City access to Work Product immediately upon the City’s
request. Upon its termination of this Contract the Contractor shall deliver or provide
immediate access to the City to the Work Product. This covenant shall survive the
termination of this Contract.

2.06 The City agrees that the Contractor may use and disclose the “City of Detroit, Michigan”
in its marketing material with prior written approval of the City, which will not be
unreasonably withheld.

2.07 The City shall be entitled to provide the Contractor with information and feedback
concerning the Subscription Services functional requirements and product definition which
are not addressed in Exhibit A and which the Contractor shall consider when formulating
the product development roadmap and plans. This co-operative process between
Contractor and the City does not create any ownership interest on the part of the City in
the products so developed by the Contractor should the Contractor determine in its sole
discretion to incorporate any of the City’s suggestions into the development plan or
ultimately into the Subscription Services.

2.08 At the City’s request, on March 1, June 1, September 1 and January 1, of each calendar
year during the term of this Contract, the Contractor shall provide “Call Center
Performance Reports” to the City which shall contain the number of calls for service, the
level of urgency of the call and whether the problem was resolved on the call.

2.09 The Contractor will install the Subscription Services in the Coverage Area. The Contractor
will host the Subscription Services and may update the functionality and Software of the
Subscription Services from time to time at its sole discretion and in accordance with this
Contract.

2.03 The Contractor will be responsible for determining the location(s) for installation of the
Sensors in the Coverage Area, and obtaining permission from the premises owner/property
manager/lessee, if any.

2.10 The Sensors may use wired, wireless, or cellular wireless communications which
necessitates the existence of a real- time data communications channel from each Sensor to
the Contractor’s hosted servers via a commercial carrier. The unavailability or deterioration
of the quality of such wired, wireless, or wireless cellular communications may impact the
ability of the Contractor to provide the Subscription Services. In such circumstances the
Contractor will use commercially reasonable efforts to obtain alternate wired or wireless
cellular communications or adjust the coverage area as necessary. In the event the
Contractor is unable to do so, the Contractor will terminate the Subscription Services and
refund a pro-rata portion of the annual Subscription fee to the City.

2.11 The Contractor will provide the City with user Documentation, online help, online training
presentation, and online training sessions as described on Exhibit A.

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2.12 The Contractor will provide reasonable efforts to respond via email to requests for support
relating to incident classification within eight (8) hours of the request.

2.13 During the term of this Contract, the Contractor will provide real-time gunfire analysis and
alert services. After an explosive (or impulsive) sound triggers enough of the Sensors that
an incident is detected and located, audio from the incident is sent to the Subscription
Services’ ShotSpotter Incident Review Center (IRC) via secure, high-speed network
connections for real-time qualification. Within seconds, a Contractor professional reviewer
analyzes audio data and recordings to confirm gunfire or explosions. The qualified alert is
then sent directly to the City’s dispatch center, PSAP, mobile/patrol officers, and any other
relevant safety or security personnel, as determined by the City. The IRC will review
gunfire incidents as further defined in the Contractor’s service level agreements set forth
in Exhibit A.

2.14 The Subscription Services provided under this Contract shall include (i) the City’s access to
the Reviewed Alerts delivered via the Investigator Portal password-protected internet
portal and user interface supplied by the Contractor; (ii) the City’s access to historical
Reviewed Alerts and incident information via the Software; and (iii) other services as
specified in this on Exhibit A.
2.16 The Contractor will assist the City in initially setting up passwords and user names for the
City’s employees, agents, or representatives to whom the City designates access to the
Subscription Services (“Authorized Users”). Thereafter, the City shall be responsible for
assigning passwords and user names for its Authorized Users. The City shall be responsible
for maintaining the confidentiality and use of the City’s password and user names and shall
not allow passwords and/or user names to be shared by Authorized Users; nor shall the
City permit any unauthorized users to access the Subscription Services.

2.17 The Contractor shall comply with all applicable laws, rules and regulations relating to the
Subscription Services provided hereunder.

Article 3. License

3.01 In consideration for and subject to the payment of the annual Subscription fees as set forth
in Exhibit B, the Contractor hereby grants the City a non-transferrable, non-exclusive and
terminable license (“License”) to use the Subscription Services as set forth in this Article 3.

3.02 The City shall have the unrestricted right to download, make copies of, distribute, and use
the Subscription Services reports and other information generated by the Subscription Services
within its own organization, exclusively for its own internal purposes, and for purposes of
detecting and locating gunfire, routine archival recordkeeping, evidence preservation, and
investigative, or evidentiary, and prosecutorial purposes.

3.03 The City shall not provide to, license the use of, or sell any of the reports or other information
generated by the Subscription Services to any third parties, provided however, the City may
use such information and reports generated by the Subscription Services to collaborate with
other law enforcement agencies for the purposes of investigating and prosecuting crimes

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detected by the Subscription Services.

3.04 License and Restrictions. The Subscription Services and the Software is the proprietary
product of the Contractor, licensed to the City a Subscription basis. The Software may
incorporate components supplied to the Contractor under license by third party suppliers,
and may be protected by United States patent, trade secret, copyright law and international
treaty provisions. All such rights in and to the Software and Subscription Services any part
thereof are the property of the Contractor or, if applicable, its suppliers. All right and title
to the Contractor’s computer programs, including, but not limited to related documentation,
technology, know-how and processes embodied in or made available to the City in
connection with the Subscription Services, patent rights, copyrights, trade secret rights,
trademarks, and services marks remain with the Contractor. The City may not make any
copies of the written materials or Documentation that accompany any component of the
Software, or use them, or any other information concerning the Subscription Services that
the Contractor has designated as confidential, for any purpose other than bona fide use of the
Subscription Services or Software for in accordance with the terms of this Contract, nor
allow anyone else to do so. Except as otherwise provided in this Contract, the City shall not:
(i) modify, adapt, alter, translate, copy, perform, or display (publicly or otherwise) or create
compilations, derivative, new, or other works based, in whole or in part, on the Software,
or on the Subscription Services; (ii) merge, combine, integrate, or bundle the Software, in
whole or in part, with other software, hardware, data, devices, systems, technologies,
products, services, functions, or capabilities; (iii) transfer, distribute, make available the
Subscription Services, or Software to any person other than employees of the City; or (iv)
sell, resell, sublicense, lease, rent, or loan the Subscription Services or Software, in whole
or in part. No component of the Subscription Services, or Software may be used to operate
a service bureau, rental or time-sharing arrangement.

3.05 Restrictions of Contractor’s Use of Data.

Contractor shall have the right to use the Data, excluding any Personal Information, for
internal research or product development. Contractor may provide the Data on an
aggregated basis to third parties (excluding press or media, or insurance carriers) to be used
for research or analytical purposes, or for law enforcement and/or security purposes,
subject to the City’s prior written consent as provided below.
Contractor may not and will not release or disseminate to any person or entity any Data,
for any purpose, including, but not limited or related to or consisting of specific forensic
or law enforcement sensitive incident information pertaining to any active inquiry,
investigation, or prosecution, unless in response to a valid order or subpoena issued by a
court or other governmental body, or as otherwise required by law. Contractor shall receive
the written consent from the City prior to any release of the Data; provided however, the
Contractor shall simply notify the City of its release of any Data pursuant to a court order
or subpoena.
Contractor may not and will not release, sell, license, or otherwise distribute the Data to
the press or media or any other entity, without the prior express written consent of an
authorized representative of the City, which consent shall not be unreasonably withheld.

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Within sixty (60) days of the termination of this Contract, the Contractor will delete all
user account information and will use commercially reasonable efforts to delete Data, The
Contractor will deactivate the Sensors installed in the Coverage Area, rendering the
Sensors inoperable. The Contractor will certify in writing to the City that all Sensors have
been deactivated and will remain deactivated.
The requirements set forth in this Section 3.05 shall survive the termination of this
Contract.
3.06 Nothing in this Contract shall be construed as granting any ownership right or title to the
Software the Subscription Services or any component thereof, or any other intellectual
property of the Contractor or its suppliers to the City.
3.07 The City shall not alter, remove or obscure any copyright, patent, trademarks, confidential,
proprietary, or restrictive notices or markings on any component of the Subscription
Services, Software or any Documentation.
3.08 The City acknowledges that the Subscription Services have been determined by the United
States Department of State to be a controlled commodity, software and/or technology
subject to the United States Export Administration Regulations of the U.S. Department of
Commerce. The City is specifically prohibited from the export, or re-export, transfer,
consignment, shipment, delivery, downloading, uploading, or transmitting in any form, any
Software, Documentation, or any component thereof or underlying information or
technology related thereto, to any third party, government, or country for any end uses
except in strict compliance with applicable U.S. export controls laws, and only with the
express prior written agreement of the Contractor. In the event that such written agreement
is provided, the City shall be responsible for complying with all applicable export laws and
regulations of the United States and destination country, including, but not limited to the
United States Export Administration Regulations of the U.S. Department of Commerce,
including the sanctions laws administered by the U.S. Department of Treasury, Office of
Foreign Assets Control (OFAC), the U.S. Anti-Boycott regulations. In this respect, no
resale, transfer, or re-export of any components of the Subscription Services exported to
the City pursuant to a license from the U.S. Department of Commerce may be resold,
transferred, or reported without prior authorization by the U.S. Government. The City
agrees not to export, re-export or engage in any “deemed export,” or to transfer or deliver,
or to disclose or furnish, to any foreign (non- U.S.) government, foreign (non- U.S.) person
or third party, or to any U.S. person or entity, any of the Subscription Services’
components, Software, or any technical data or output data or direct data product thereof,
or any service related thereto, in violation of any such restrictions, laws or regulations, or
without all necessary registrations, licenses and or approvals. The City shall bear all
expenses relating to any necessary registrations, licenses or approvals.
3.9 In addition to the foregoing, the City shall not disclose, discuss, download, ship, transfer,
deliver, furnish, or otherwise export or re-export any such item(s) to or through: (a) any
person or entity on the U.S Department of Commerce Bureau of Industry and Security’s
List of Denied Persons or Bureau of Export Administration’s anti-proliferation Entity List;
(b) any person on the U.S. Department of State’s List of Debarred Parties; (c) any person
or entity on the U.S. Treasury Department Office of Foreign Asset Control’s List of
Specially Designated Nationals and Blocked Persons; or (d) any third party or for any end-

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use prohibited by law or regulation, as any and all of the same may be amended from time
to time, or any successor thereto.
3.10 Upon reasonable notice to the City, the Contractor reserves the right at its discretion to
modify, temporarily or permanently, the Subscription Services (or any part thereof). In the
event that the Contractor modifies the Subscription Services in a manner which removes
or disables a feature or functionality on which the City materially relies, at The City’s
request, the Contractor shall use commercially reasonable efforts to restore such
functionality to the City. In the event that the Contractor is unable to substantially restore
such functionality, the City shall have the right to terminate this Contract and receive a pro-
rata refund of the annual Subscription Services fees paid under the Contract for the
Subscription term in which this Contract is terminated.
3.11 No Use by Third Parties. Use by anyone other than the City of the Subscription Services
and Documentation, is prohibited, unless pursuant to a valid assignment of this Contract as
set forth in Article 13 of this Contract.
3.12 The City shall not permit any alteration, modification, substitution, or supplementation of
the Subscription Services or web portal, or the combining, connection, merging, bundling,
or integration of the Subscription Services or web portal into or with any other system,
equipment, hardware, software, technology, function, or capability, without the
Contractor’s express prior written consent, which consent shall not be unreasonably
withheld.
3.13 Unless otherwise expressly agreed in advance in writing by the Contractor, the City shall
not authorize or appoint any contractors, subcontractors, original equipment
manufacturers, value added integrators, systems integrators, or other third parties to
operate, or have access to any part of the Subscription Services.
3.14 In order to use the Subscription Services, the City must have and maintain access to the
World Wide Web to enable a secure https connection from the City’s workstation(s) to
Subscription Services, either directly or through devices that access Web-based content. The
City must also provide all equipment necessary to make and maintain network connections
such as Internet connections
3.15 The Contractor will assist the City in initially setting up passwords and user names for the
City’s employees, agents, or representatives to whom the City designates access to the
Subscription Services (“Authorized Users”). Thereafter, the City shall be responsible for
assigning passwords and user names for its Authorized Users. The City shall be responsible
for maintaining the confidentiality and use of the City’s password and user names and shall
not allow passwords and/or user names to be shared by Authorized Users; nor shall the
City permit any unauthorized users to access the Subscription Services.
3.16 The City shall not directly, or indirectly through any third parties engaged by the City,
disassemble, decompile, or otherwise reverse engineer or attempt to reconstruct, derive, or
discover any source code, underlying ideas, algorithms, formulae, routines, file formats,
data structures, programming, routines, interoperability interfaces, drawings, or plans from
the Software, or any data or information created, compiled, displayed, or accessible
through the Subscription Services, in whole or in part.
3.17 The provisions of this Article 3 shall survive the termination or rescission of this Contract.

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Article 4. Contractor's Representations and Warranties

4.01 To induce the City to enter into this Contract, the Contractor represents and warrants that
the Contractor is authorized to do business in the State of Michigan and is duly qualified
to provide the Subscription Services as set forth in this Contract, and that the execution of
this Contract is within the Contractor's authorized powers, is not in contravention of
federal, state or local law, and will not cause a breach of any other contract to which the
Contractor is a party.

4.02 The Contractor makes the following representations and warranties specifically in
connection with the Subscription Services:

(a) The Subscription Services shall perform according to the specifications and
representations set forth in Exhibit A and the Documentation provided by the
Contractor to the City;

(b) The Contractor has the full and unencumbered rights and powers to grant the City
access to and permission to Use the Subscription Services, including all upgrades,
updates, improvements, modifications, enhancements or customizations, and
including any third party components and platforms embedded in the Subscription
Services, and the rights granted herein will not violate the terms of any of its
agreements with any third party;

(d) The Contractor’s execution, delivery, and performance of this Contract will not
constitute a violation of any judgment, order or decree, a default under any
agreement by which it or any of its assets are bound or an event that would, with
notice or lapse of time, constitute such a default;

(e) The Subscription Services and Software are free of any software, programs or
routines, commonly known as "disabling code," that are designed to cause the
Subscription Services to be destroyed, damaged, or otherwise made inoperable in
the course of the City’s Use of the Subscription Services, or any viruses, spyware,
or malware;

(f) The Subscription Services and the Software are free of any known or reasonably
discoverable computer program, code or set of instructions, commonly known as a
"computer virus," that is not designed to be a part of the Subscription Services and
that, when inserted into the computer’s memory: (i) duplicates all or part of itself
without specific user instructions to do so, or (ii) erases, alters or renders unusable
any data or the Subscription Services, with or without specific user instructions to
do so, or (iii) that provide unauthorized access to the Subscription Services;

(g) The Subscription Services are free of any spyware and malware;

(h) The Subscription Services shall:

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(1) Accurately recognize and process all time and date data including, but not
limited to, daylight savings time and leap year information, and
(2) Use accurate same-century, multi-century, and similar date value formulas
in its calculations, and use date interface values that accurately reflect the
correct time, date and century.

(i) All Data shall be and remain the sole and exclusive property of the City. Contractor
shall treat all Data as confidential information. Except as set forth in Article 3, the
Contractor will be provided access to the Data for the sole and exclusive purpose of
performing its obligations under this Contract. Contractor is prohibited from disclosing
any Data to any third party without specific written approval from the City, except as
set forth in Article 3, Section 3.05. Contractor will have no property interest in, and
may assert no lien on or right to withhold Data from the City.

(j) The Contractor has developed an Information Security Policy based on NIST 800-53
which has been adopted by the Contractor’s Board of Directors. Contractor is taking
steps to ensure compliance, which the Contractor expects to complete in 2022.

(k) The Contractor will allow the City to perform audits of the Contractor’s compliance
with the Contractor’s Information Security Policy. Any such audit shall be conducted
by a mutually agreed upon third party, at City’s expense, and following no less than
ninety (90) days prior written notice.

(l) The Subscription Services, the City’s access to the Subscription Services, the City’s
Use of the Subscription Services or the Documentation, and the Contractor’s
performance of this Contract do not and will not conflict with, infringe upon or violate,
the intellectual property rights of any other person or legal entity. In the event of a third
party claim of infringement by the Subscription Services, Contractor will defend and
indemnify the City in accordance with the provisions set forth in Article 10, section
10.3.

(m) The Subscription Services, the City’s access to the Subscription Services, the City’s
Use of the Subscription Services or the Documentation, and the Contractor’s
performance of this Contract are not alleged by any person to conflict with, infringe
upon or violate, the intellectual property rights of any other person or legal entity.

(n) There are no existing or threatened legal proceedings brought against the Contractor in
respect of the Subscription Services, the Documentation, or the Contractor’s right to
grant others the right to access and use the Subscription Services, or the
Documentation. Should the Contractor become aware of any such conflict,
infringement or violation or potential conflict, infringement or violation, the Contractor
will notify the City immediately.

(o) The Documentation is complete and will allow the City to access and use the
Subscription Services.

(p) The Contractor will meet the following data-related system requirements:

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(i) As defined in Exhibit A, section A.6, the City shall be able to receive gunfire
incident data, associated metadata, and reasonably granular subsets thereof,
as well as any associated files or attachments, from the Subscription
Services in a useable, encrypted format.

(ii) Upon termination of this Contract, the Contractor shall delete all City user
account information.

(iii) During the term of this Contract, the Contractor has and shall have the
ability to retain gunfire incident Data in a manner that is searchable and
capable of compliance with applicable records retention laws and best
practices.

(iv) At no time may Contractor suspend or terminate City’s access to any Data
or the Subscription Services for breach of contract without giving the City
at least thirty (30) days’ notice and opportunity to cure according to the
City’s dispute resolution process.

4.03 The Subscription Services are not designed, sold, or intended to be used to detect, intercept,
transmit, or record oral or other communications of any kind. The Contractor cannot
control how the Subscription Services are used, and, accordingly, other than the City’s Use
in accordance with the Documentation and this Contract, the Contractor does not warrant
or represent, expressly or implicitly, that any other use of the Subscription Services will
comply or conform to the requirements of federal, state, or local statutes, ordinances, and
laws, or that any other use of the Subscription Services will not violate the privacy rights
of third parties. The City hereby agrees that it will Use the Subscription Services in full
compliance with this Contract, including the Documentation.

4.04 The Contractor does not warrant or represent, expressly or implicitly, that the Software or
Subscription Services or its use will: result in the prevention of crime, apprehension or
conviction of any perpetrator of any crime, or detection of any criminal; prevent any loss,
death, injury, or damage to property due to the discharge of a firearm or other weapon; in
all cases result in a Reviewed Alert for all firearm discharges within the designated
coverage area; or that the Contractor-supplied network will remain in operation at all times
or under all conditions.

4.05 The Contractor expressly disclaims, and does not undertake or assume any duty, obligation,
or responsibility for any decisions, actions, reactions, responses, failure to act, or inaction,
by the City as a result of or in reliance on, in whole or in part, any Subscription Services or
Reviewed Alerts provided by the Subscription Services, or for any consequences or
outcomes, including any death, injury, or loss or damage to any property, arising from or
caused by any such decisions, actions, reactions, responses, failure to act, or inaction. It shall
be the sole and exclusive responsibility of the City to determine appropriate decisions,
actions, reactions, or responses, including whether or not to dispatch emergency responder
resources.

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4.06 The Parties acknowledge and agree that the Subscription Services is not a consumer good,
and is not intended for sale to or use by or for personal, family, or household use.

4.07 EXCEPT AS EXPRESSLY SET FORTH IN THIS ARTICLE 4, THE

CONTRACTOR MAKES AND THE CITY RECEIVES NO OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITATION ANY WARRANTIES OF QUALITY, SUITABLITY,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

Article 5. Contract Effective Date and Time of Performance

5.01 This Contract shall be approved by the required City departments, approved by the City
Council, and signed by the City’s Chief Procurement Officer. The effective date of this
Contract shall be the date upon which the Contract has been approved by resolution of the
City Council.

5.02 Prior to the approvals set forth in Section 5.01, the Contractor shall have no authority to
begin work on this Contract. The Chief Financial Officer shall not authorize any payments
to the Contractor, nor shall the City incur any liability to pay for the Subscription Services
or to reimburse the Contractor for any expenditure, prior to such award and approvals.

5.03 The City and the Contractor agree that the commencement and duration of the Contractor's
performance under this Contract shall be determined as set forth in Exhibit A.

5.04 The City and the Contractor agree that the City shall have the right to extend the term of
this Contract on the terms and conditions contained herein, as set forth in more detail on
Exhibit A.

Article 6. Records, Work Products and Data City Obligations

6.01 In order to use the Subscription Services, the City must have and maintain access to the
World Wide Web to enable a secure https connection from the City’s workstation(s) to
Subscription Services, either directly or through devices that access Web-based content.
The City must also provide all equipment necessary to make and maintain network
connections such as Internet connections.

6.02 The City agrees to use reasonable efforts to timely perform and comply with all of the
City’s obligations under this Contract, including providing assistance to the Contractor, as
needed in obtaining premise permissions for installation of the Sensors.

6.03 As further defined in Article 2, section 2.16, the City shall have the ongoing responsibility
for assigning passwords and user names for its Authorized Users and maintaining the
confidentiality and use of the City’s password and user names.

6.04 The City shall comply with all applicable laws, rules and regulations relating to the goods and services
provided hereunder.

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6.05 Copies of all Records and Work Products as are existing, available, and deemed necessary
by the City for the performance of the Subscription Services and this Contract shall be
furnished to the City upon the City’s request.
6.06 The City may retrieve Data from the Subscription Services at any time during the term of
this Contract using the download capabilities provided by the Software associated with the
Subscription Services. Except as expressly set forth in Article 3, the Contractor shall not
access, use, disclose, sell, rent, transfer or copy the Data for any purpose without the
express prior written permission of the City.

Article 7. Contractor Personnel and Contract Administration

7.01 The Contractor represents that, at its own expense, it has obtained or will obtain all
personnel and equipment required to provide the Subscription Services. It warrants that all
such personnel are qualified and possess the requisite licenses or other such legal
qualifications to perform the activities necessary for the Contractor to deliver the
Subscription Services and for the Subscription Services to function as described in this
Contract, including on Exhibit A. If requested, the Contractor shall supply a résumé of the
managerial staff project manager or consultants it proposes to assign to this Contract, as
well as a dossier on the Contractor's professional activities and major undertakings.

7.02 If, in the City’s reasonable judgment, the assigned Contractor project manager is not
adequately performing the services related to implementation of the Subscription Services,
the City may request a replacement. The Contractor shall not replace the project manager
working on this Contract without the prior written consent of the City, except in the event
of illness, or termination of employment. In either event, Contractor shall have a
reasonable timeframe to assign a replacement project manager.

7.03 When the City deems it reasonable to do so, it may assign qualified City employees or
others to work with the Contractor to provide the Subscription Services. Nevertheless, it
is expressly understood and agreed by the parties that the Contractor shall remain
ultimately responsible for the proper provision of the Subscription Services.

7.04 The relationship of the Contractor to the City is and shall continue to be that of an
independent contractor and no liability or benefits, such as workers' compensation, pension
rights or liabilities, insurance rights or liabilities, or other rights or liabilities arising out of
or related to a contract for hire or employer/employee relationship shall arise or accrue to
either party or either party's agent, Subcontractor or employee as a result of the
performance of this Contract. No relationship other than that of independent contractor
shall be implied between the parties or between either party’s agents, employees or
Subcontractors. The Contractor agrees to indemnify, defend, and hold the City harmless
against any claim based in whole or in part on an allegation that the Contractor or any of
its Associates qualify as employees of the City, and any related costs or expenses, including
but not limited to legal fees and defense costs.

7.05 The Contractor warrants and represents that all persons assigned to the performance of this
Contract shall be regular employees or independent contractors of the Contractor, unless

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otherwise authorized by the City. The Contractor’s employees’ daily working hours while
working in or about a City of Detroit facility shall be the same as those worked by City
employees working in the facility, unless otherwise directed by the City.

7.06 The Contractor shall comply with and shall require its Associates to comply with all
security regulations and procedures in effect on the City’s premises.

Article 8. Compensation and Security

8.01 Compensation for Subscription Services provided shall be in the amounts and will be paid
in the manner set forth in Exhibit B. Unless this Contract is amended pursuant to Article
18, the amount described on Exhibit B shall be the entire compensation to which the
Contractor is entitled for the Subscription Services under this Contract.

8.02 Payment for Subscription Services provided under this Contract is also governed by the
terms of Ordinance No. 42-98, entitled "Prompt Payment of Vendors," being Sections 17-
5-281 through 17-5-288 of the 2019 Detroit City Code.

The City employee responsible for accepting performance and payment requests under this
Contract is:

Art Thompson
Director Public Safety Information
1301 Third St
Detroit MI 48226
(313) 920-4955

Article 9. Maintenance and Audit of Records

9.01 The Contractor shall maintain full and complete Records reflecting all of its operations
related to this Contract. The Records shall be kept in accordance with generally accepted
accounting principles and maintained for a minimum of three (3) years after the Contract
completion date.

9.02 The City and any government-grantor agency providing funding under this Contract shall
have the right at any time with ten (10) days’ notice to examine and audit all Records and
other supporting data of the Contractor pertaining to this Contract as the City or any agency
deems necessary.

(a) The Contractor shall make all Records available for examination during normal
business hours at its Detroit offices, if any, or alternatively at its facility nearest
Detroit. The City and any government-grantor agency providing funds for the
Contract shall have this right of inspection. The Contractor shall provide copies of
all Records to the City or to any such government-grantor agency upon request.

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(b) If in the course of such inspection the representative of the City or of another
government-grantor agency should note any deficiencies in the performance of the
Contractor's agreed upon performance or record-keeping practices, such
deficiencies will be reported to the Contractor in writing. The Contractor agrees to
promptly remedy and correct any such reported deficiencies within ten (10) days of
notification.

(c) Any costs disallowed as a result of an audit of the Records shall be repaid to the
City by the Contractor within thirty (30) days of notification or may be set off by
the City against any funds due and owing the Contractor, provided, however, that
the Contractor shall remain liable for any disallowed costs exceeding the amount
of the setoff.

(d) Each party shall pay its own audit costs. However, if the dollar amount of the total
disallowed costs, if any, exceeds three percent (3%) of the dollar amount of this
Contract, the Contractor shall pay the City's audit costs.

(e) Nothing contained in this Contract shall be construed or permitted to operate as any
restriction upon the powers granted to the Auditor General by the City Charter,
including but not limited to the powers to audit all accounts chargeable against the
City and to settle disputed claims.

9.03 The Contractor agrees to include the covenants contained in Sections 9.01 and 9.02 in any
contract it has with any Subcontractor, consultant or agent who will be charged directly or
indirectly to the City for anything related to the Subscription Services.

Article 10. Indemnity and Limitation of Liability

10.01 The Contractor agrees to indemnify, defend, and hold the City harmless against and from
any and all liabilities, obligations, damages, penalties, claims, costs, charges, losses and
expenses (including, without limitation, fees and expenses for attorneys, expert witnesses
and other consultants) that may be imposed upon, incurred by, or asserted against the City
or its departments, officers, employees, or agents by reason of any of the following
occurring during the term of this Contract:

(a) Any claim arising out of or in connection with the Contractor’s or any of its
Associates performance under this Contract to the extent of the gross negligence,
or tortious act, error, or omission attributable in whole or in part to the Contractor
or any of its Associates;

(b) Any material breach of any of the warranties and representations made by the
Contractor in Article 4 of this Contract.

(c) Any and all injury to the person or property of an employee of the City where such
injury arises out of the Contractor’s or any of its Associates performance of this Contract.
10.02 The Contractor undertakes and assumes all risk of dangerous conditions when not
performing inside City offices. The Contractor also agrees to waive and release any claim

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or liability against the City for personal injury or property damage sustained by it or its
Associates while performing under this Contract on premises that are not owned by the City.

10.03 In addition, the Contractor will, at its expense, defend and indemnify the City from and
against losses, suits, damages, liability, and expenses (including reasonable attorney fees)
arising out of a claim asserted in a lawsuit or action against the City by a third party
unrelated to the City, in which such third party asserts a claim that the Subscription Services
and/or Software, when used by the City in accordance with this Contract and the
Documentation, infringes any United States patent which was issued by the U.S. Patent and
Trademark Office, or United States copyright which was registered by the U.S. Copyright
Office, as of the effective date of the City’s to License (collectively “Action”), provided
that the City provides the Contractor with reasonably prompt notice of any such Action, or
circumstances of which the City becomes aware that could reasonably be expected to lead
to such Action including but not limited to any cease and desist demands or warnings, and
further provided that the City cooperates with the Contractor and its defense counsel in the
investigation and defense of such Action.

(a) Section10.3 shall not apply and the Contractor shall have no obligation to defend
and indemnify the City in the event the City or a third party modifies, alters, substitutes, or
supplements any of the Subscription Services, or Software, or to the extent that the claim
of infringement arises from or relates to the integration, bundling, merger, or combination
of any of the same with other hardware, software, systems, technologies, or components,
functions, capabilities, or applications not licensed by the Contractor as part of the
Subscription Services, nor shall it apply to the extent that the claim of infringement arises
from or relates to meeting or conforming to any instruction, design, direction, or
specification furnished by the City, nor to the extent that the Subscription Services or
Software are used for or in connection with any purpose, application, or function other than
detecting and locating gunshots exclusively through acoustic means

(b) If, in the Contractor’s opinion, the Subscription Services, or Software may, or is
likely to become, the subject of such a suit or action, does become the subject of a claim
asserted against the City in a lawsuit which the Contractor is or may be obliged to defend
under this Section 10.3, or is determined to infringe the foregoing patents or copyrights of
another in a final, non-appealable judgment subject to the Contractor’s obligations under
this section, then the Contractor may in full and final satisfaction of any and all of its
obligations under this section, at its option: (1) procure for the City the right to continue
using the affected Subscription Services or Software, (2) modify or replace such
Subscription Services or Software to make it or them non- infringing, or (3) refund to the
City a pro-rata portion of the annual Subscription fees paid for the Subscription Services for
the term in which this Contract is terminated.

(c) This Section 10.03 states the entire liability of the Contractor and is the City’s exclusive
remedy for or relating to infringement or claims or allegations of infringement of any
patent, copyright, or other intellectual property rights in or to the Subscription
Services, its components, and Software.

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10.04 In the event any action shall be brought against the City by reason of any claim covered
under this Article 10, the Contractor, upon notice from the City, shall at its sole cost and
expense defend the same; provided however, the Contractor shall have the right to choose
counsel to defend such suit and/or action, and to control the settlement (including
determining the terms and conditions of settlement) and the defense thereof. The City may
participate in the defense of such action at its own expense. The Contractor acknowledges
that any settlement involving the City must be approved by the City Council prior to the
effectiveness of any such settlement.

10.05 The Contractor agrees that it is the Contractor's responsibility and not the responsibility of
the City to safeguard the property that the Contractor or its Associates use while performing
this Contract. Further, the Contractor agrees to hold the City harmless for any loss of such
property used by any such person pursuant to the Contractor's performance under this
Contract.

10.06 The indemnification obligation under this Article 10 shall not be limited by any limitation
on the amount or type of damages, compensation, or benefits payable under workers'
compensation acts, other employee benefit acts, or any insurance policies listed in Article
11.

10.07 The Contractor agrees that this Article 10 shall apply to all claims, whether litigated or not,
that may occur or arise between the Contractor or its Associates and the City and agrees to
indemnify, defend and hold the City harmless against any such claims.

10.08 The Contractor shall not be required to indemnify the City for any claims or actions caused
to the extent of the negligence or wrongful act of the City, its employees, agents, or
contractors. Notwithstanding the foregoing, if a claim, lawsuit, or liability results from or
is contributed to by the actions or omissions of the City, or its employees, agents, or
contractors, the Contractor’s obligations under this provision shall be reduced to the extent
of such actions or omissions based upon the principle of comparative fault.

10.09 Notwithstanding anything to the contrary in the foregoing sections, except for its
intellectual property infringement obligations set forth in Section 10.3, Contractor’s
cumulative liability for all losses, claims, suits, controversies, breaches or damages for
any cause whatsoever arising out of or related to this Contract, whether in contract,
tort, by way of indemnification or under statute, and regardless of the form of action
or legal theory shall not exceed six (6) times the amount paid to Contractor under this
Contract, for the annual subscription period in which the claim arises or the amount
of insurance maintained by ShotSpotter available to cover the loss, whichever is
greater. The foregoing limitations shall apply without regard to any failure of
essential purpose of any remedies given herein.

10.10 In no event shall either party, or any of its Associates, affiliates or any of its/their
respective directors, officers, members, attorneys, employees, or agents, be liable to
the other party under any legal or equitable theory or claim, for lost profits, lost
revenues, lost business opportunities, exemplary, punitive, special, indirect,
incidental, or consequential damages, each of which is hereby excluded by this

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Contract, regardless of whether such damages were foreseeable or whether any party
or any entity has been advised of the possibility of such damages.

Article 11. Insurance

11.01During the term of this Contract, the Contractor shall maintain the following insurance, at a
minimum and at its expense:

(a). General liability insurance insuring the Contractor’s obligations and

responsibilities with respect to the performance of Subscription Services as set out
in this Contract. The policy will be extended to include bodily injury and property
damage, products and completed operations, and contractual liability to a limit of
no less than two million dollars ($2,000,000) per occurrence. Coverage limits may
be met through a combination of the Contractor’s primary policy and umbrella
policy. The policy will include a cross liability and severability of interest clause
and be endorsed to name the Client as an additional insured;

(b) Non-owned automobile insurance to a limit of no less than one million dollars
($1,000,000);

(c) If applicable, automobile insurance (OAP1) for both owned and leased vehicles
with inclusive limits of no less than one million dollars ($1,000,000); and

(d) Errors and omissions liability insurance insuring the Contractor to a limit of no less
than one million dollars ($1,000,000) per claim and five million dollars
($5,000,000) in the aggregate. The coverage under the policy will be maintained
continuously during the Term of this Contract and for an additional two (2) years
after the termination or expiration of this Contract and will cover insurable losses
arising out of or in association with an error or omission in the rendering of or
failure to complete and provide the Subscription Services as set out in this Contract.
Coverage under the policy will respond to, but not be limited to the following
occurrences:

i. Privacy breach and violations as a result of but not limited to

unauthorized access to or wrongful disclosure or dissemination of
private information, failure to properly handle, manage, store,
destroy or control personal information and include the failure to
comply with privacy laws, and their respective regulations regarding
the collection, access, transmission, use, and accuracy. Coverage
will extend to include the costs associated with notification of
affected parties, regardless if required by statute as well as any fines
or penalties or costs imposed as a result of the breach including
defense of any regulatory action involving a breach of privacy;
ii. Network security incidents arising from Subscription Services
security failures such as, but not limited to, unauthorized access,
theft or destruction of data, electronic security breaches, denial of
service, spread of virus within the Contractor’s computer network,

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the Subscription Services or other third party computer information

systems and will further include expenses related to third party
computer forensics;
iii. Privacy breach expenses including crisis management related to
electronic and non-electronic breaches; and
iv. Content or media liability including personal and advertising
liability, intellectual property infringement coverage (copyright,
trademark, trade name, service mark, trade dress or trade secret)
arising out of media content created, produced or disseminated by
the Contractor.
(e) The Contractor will maintain coverage for damages resulting from the dishonest or
criminal acts committed by an employee of the Contractor.
(f) If coverage is to be cancelled or non-renewed for any reason, the Contractor shall
provide the City with thirty (30) days’ notice of said cancellation or non-renewal. The
City may request an Extended Reporting Endorsement be purchased by the Contractor
at the Contractor’s expense. The term of the Extended Reporting Endorsement will be
decided by the City and the Contractor.
(g) The Contractor shall notify the City in writing prior to any termination or cancellation
of coverage unless otherwise required by law and ensure that all policies of insurance
will:
i. Be written with an insurer properly licensed to do business; and be non-
contributing with and will apply only as primary and not excess to any other
insurance or self-insurance available to the City.
(h) The Contractor shall be responsible for payment of all deductibles contained in any
insurance required under this Contract.

(i) The Contractor shall deliver to the City certificates of insurance evidencing renewal
or replacement of policies required under this Contract prior to the expiration or
replacement of the current policies without demand by the City.

(j) If the Contractor fails to maintain in force any insurance required to be maintained
by it hereunder, then the City, without prejudice to any of its other remedies, may obtain
such insurance on behalf of and at the cost of the Contractor.

(k) The Contractor and its Associates and insurer(s) hereby release the City from any
and all liability or responsibility, including anyone claiming through or under them, by way
of subrogation or otherwise for any loss or damage which the Contractor may sustain
incidental to or in any way related to the Contractor’s obligations under this Contract.

11.02 Each such policy shall contain the following cross-liability wording: “In the event of a
claim being made hereunder by one insured for which another insured is or may be liable,
then this policy shall cover such insured against whom a claim is or may be made in the
same manner as if separate policies had been issued to each insured hereunder.”

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11.03 Except as otherwise provide herein, all insurance required by this Contract shall be written
on an occurrence-based policy form, if the same is commercially available. Errors and
omissions and cyber liability may be provided on a claims made basis.

11.06 Contractor’s commercial general liability and auto liability policies shall name the
Contractor as the insured and the City as an additional insured. Certificates of insurance
evidencing the coverage required by this Article 11 shall, in a form acceptable to the City,
be submitted to the City prior to the commencement of the Subscription Services and at
least fifteen (15) days prior to the expiration dates of expiring policies. In the event the
Contractor receives notice of policy cancellation, the Contractor shall immediately notify
the City in writing.

11.07 If part of this Contract is subcontracted, the Contractor shall require each Subcontractor to
effect and maintain the types and limits of insurance set forth in this Article 11 and shall
require documentation of same, copies of which documentation shall be promptly
furnished the City.

11.08 The provisions requiring the Contractor to carry the insurance required under this Article
11 shall not be construed in any manner as waiving or restricting the liability of the
Contractor under this Contract.

Article 12. Default and Termination

12.01 This Contract shall remain in full force and effect until the end of its term unless otherwise
terminated for cause or convenience according to the provisions of this Article 12.

12.02 The City reserves the right to terminate this Contract for cause. Cause is an event of
default.

(a) An event of default shall occur if there is a material breach of this Contract, and
shall include the following:

(i) The Contractor fails to provide the Subscription Services in accordance with
the terms of this Contract;

(ii) The Contractor assigns, transfers, conveys or otherwise disposes of this

Contract in whole or in part without prior approval of the City;

(iii) Any City officer or employee acquires an interest in this Contract so as to

create a conflict of interest; and

(iv) The Contractor is in material breach of any of the provisions of this

Contract, or disregards applicable laws, ordinances, permits, licenses,
instructions or orders of the City.

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(b) If the City finds an event of default has occurred, the City may issue a Notice of
Termination for Cause setting forth the grounds for terminating the Contract. Upon
receiving a Notice of Termination for Cause, the Contractor shall have thirty (30)
business days within which to cure such default. If the default is cured within said
thirty (30) business day period, the right of termination for such default shall cease.
If the default is not cured to the satisfaction of the City, this Contract shall terminate
on the tenth calendar day after the Contractor's receipt of the Notice of Termination
for Cause, unless the City, in writing, gives the Contractor additional time to cure
the default. If the default is not susceptible to cure within such thirty (30) day
period, the City may agree to an extended cure period. If the default is not cured to
the satisfaction of the City within the additional time allowed for cure, this Contract
shall terminate for cause at the end of the extended cure period. The City shall have
no obligation to pay Contractor for any of its Subscription Services performed
during an extended cure period.

(c) If, after issuing a Notice of Termination for Cause, the City determines that the
Contractor was not in default, the rights and obligations of the parties shall be the
same as if the Notice of Termination had been issued as a Notice of Termination
for Convenience.

12.03 In the event that either party is in material breach of any terms or conditions of this
Contract, the non-breaching party may terminate this Contract upon thirty (30) days’ prior
written notice to the other party, provided that the breaching party has not cured the alleged
breach within said thirty (30) day period, or extended timeframe as may be agreed to by
Contractor. In the event of a breach of Contractor’s intellectual property rights, Contractor
at its sole discretion may terminate this Contract immediately upon thirty (30) days’ written
notice to the City.

12.04 Each parties’ remedies outlined in this Article 12 shall be in addition to any and all other
legal or equitable remedies permissible.

12.05 Either Party has the right to terminate this Contract in the event that the other is adjudicated
bankrupt or insolvent or a trustee or a debtor-in-possession is appointed over any parties’
property. Each party retains all of the other termination rights set forth elsewhere in this
Contract during the period of any proceedings under the Bankruptcy Code of the United
States.

12.06 The Contractor must immediately inform the City of material changes in its operation,
ownership or financial condition. Material changes include, but are not limited to:

(a) Reduction or change in staffing assigned to the Contract.

(b) Decrease in, or cancellation of, insurance coverage.
(c) Delinquent payment, or nonpayment, of tax obligations.
(d) Delinquent payment, or nonpayment, of payroll obligations.
(e) Delinquent funding, or nonfunding, of pension or profit sharing plans.
(f) Delinquent payment, or nonpayment, of subcontractors.
(g) Termination of, or changes, in subcontracts.

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(h) Transfer, sell, assignment or delegation to an entity other than the Contractor, of
ownership or administrative Subscription Services.

12.07 The City shall have the right to terminate this Contract at any time at its convenience by
giving the Contractor five (5) business days written Notice of Termination for
Convenience. As of the effective date of the termination, the City will be obligated to pay
the Contractor the following: (a) the fees or commissions for Subscription Services
completed and accepted in accordance with Exhibit A in the amounts provided for in
Exhibit B; and (b) the Contractor's costs and expenses incurred prior to the date of the
termination for items that are identified in Exhibit B. The amount due to the Contractor
shall be reduced by payments already paid to the Contractor by the City. In no event shall
the City pay the Contractor more than maximum price, if one is stated, of this Contract.

12.08 After receiving a Notice of Termination for Cause or Convenience, and except as otherwise
directed by the City, the Contractor shall:

(a) Stop work under the Contract on the date and to the extent specified in the Notice
of Termination;

(b) Obligate no additional Contract funds for payroll costs and other costs beyond such
date as the City shall specify, and place no further orders on subcontracts for
material, the Subscription Services, or facilities, except as may be necessary for
completion of such portion of the Subscription Services under this Contract as is
not terminated;

(c) Terminate all orders and subcontracts to the extent that they relate to the portion of
the Subscription Services terminated pursuant to the Notice of Termination;

(d) Preserve all Records, Work Products and submit to the City such Records and Work
Products as the City shall specify and furnish to the City an inventory of all
furnishings, equipment, and other property purchased for the Contract, if any, and
carry out such directives as the City may issue concerning the safeguarding or
disposition of applicable files and property; and

(a) Submit within thirty (30) days, as applicable, a final report of receipts and
expenditures of funds relating to this Contract, and a list of all creditors,
Subcontractors, lessors and other parties, if any, to whom the Contractor has
become financially obligated pursuant to this Contract.

12.09 After termination of the Contract, each party shall have the duty to assist the other party in
the orderly termination of this Contract and the transfer of all rights and duties arising under
the Contract, as may be necessary for the orderly, un-disrupted continuation of the business
of each party.

12.10Upon termination of this Contract for any reason, the City’s access to the Software and
Subscription Services will be terminated and the City’s access will be disabled; provided

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however, the City shall be given access for at least thirty (30) days from the termination of
the Contract for the purpose of downloading all Data and Work Product.

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Article 13. Assignment

Neither party shall assign, transfer, convey or otherwise dispose of any interest whatsoever
in this Contract without the prior written consent of the other party which consent shall not
be unreasonable withheld; however, claims for money due or to become due to the
Contractor may be assigned to a financial institution without such approval. Notice of any
assignment to a financial institution or transfer of such claims of money due or to become
due shall be furnished promptly to the City. If the Contractor assigns all or any part of any
monies due or to become due under this Contract, the instrument of assignment shall
contain a clause stating that the right of the assignee to any monies due or to become due
shall be subject to prior liens of all persons, firms, and corporations for the Subscription
Services as delivered or materials supplied for the provision of the Subscription Services.
This Article 13 shall not apply to a merger or acquisition of all or substantially all of the
Contractor’s assets. No assignee for the benefit of the City’s creditors, custodian, receiver,
trustee in bankruptcy, debtor in possession, sheriff, or any other officer of a court, or other
person charged with taking custody of the City’s assets or business, shall have any right to
continue or to assume or to assign these without Contractor’s express consent.

Article 14. Subcontracting

14.01 The City reserves the right to withhold approval of subcontracting such portions of the
Subscription Services where the City determines that such subcontracting is not in the
City's best interests.

14.02 Each subcontract entered into shall provide that the applicable provisions of this Contract
shall apply to the Subcontractor and its Associates in all respects. The Contractor agrees
to bind each Subcontractor and each Subcontractor shall agree to be bound by the terms of
the Contract insofar as applicable to the work or the portions of the Subscription Services
worked on by that Subcontractor.

14.03 The Contractor and the Subcontractor jointly and severally agree that no approval by the
City of any proposed Subcontractor, nor any subcontract, nor anything in the Contract,
shall create or be deemed to create any rights in favor of a Subcontractor and against the
City, nor shall it be deemed or construed to impose upon the City any obligation, liability
or duty to a Subcontractor, or to create any contractual relation whatsoever between a
Subcontractor and the City.

14.04 The provisions contained in this Article 14 shall apply to subcontracting by a Subcontractor
of any portion of the work related to the Subscription Services included in an approved
subcontract.

14.05 The Contractor agrees to indemnify, defend, and hold the City harmless against any claims
initiated against the City pursuant to any subcontracts the Contractor enters into in
performance of this Contract. The City's approval of any Subcontractor shall not relieve
the Contractor of any of its responsibilities, duties and liabilities under this Contract. The
Contractor shall be solely responsible to the City for the acts or defaults of its

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Subcontractors and of each Subcontractor's Associates, each of whom shall for this purpose
be deemed to be the agent or employee of the Contractor.

Article 15. Conflict of Interest

15.01 The Contractor covenants that it presently has no interest and shall not acquire any interest,
direct or indirect, that would conflict in any manner or degree with the delivery of the
Subscription Services or otherwise in connection with its performance of this Contract.
The Contractor further covenants that in the performance of this Contract no person having
any such interest shall be employed by the Contractor.

15.02 The Contractor further covenants that no officer, agent, or employee of the City and no
other public official who exercises any functions or responsibilities in the review or
approval of the undertaking or performance of this Contract has any personal or financial
interest, direct or indirect, in this Contract or in its proceeds, whether such interest arises
by way of a corporate entity, partnership, or otherwise.

15.03 The Contractor warrants (a) that it has not employed and will not employ any person to
solicit or secure this Contract upon any agreement or arrangement for payment of a
commission, percentage, brokerage fee, or contingent fee, other than bona fide employees
working solely for the Contractor either directly or indirectly, and (b) that if this warranty
is breached, the City may, at its option, terminate this Contract without penalty, liability or
obligation, or may, at its option, deduct from any amounts owed to the Contractor under
this Contract any portion of any such commission, percentage, brokerage, or contingent
fee.

15.04 The Contractor covenants not to employ an employee of the City for a period of one (1)
year after the date of termination of this Contract without written City approval.

15.05 The Contractor shall provide a statement listing all political contributions and expenditures
(“Statement of Political Contributions and Expenditures”), as defined by the Michigan
Campaign Finance Act, MCL 169.201, et seq., made by the Contractor, its affiliates,
subsidiaries, principals, officers, owners, directors, agents or assigns, to elective City
officials within the previous four (4) years. Individuals shall also list any contributions or
expenditures from their spouses.

15.06 The Contractor’s Statement of Political Contributions and Expenditures shall be attached
to this Contract as “Exhibit C” and made a part hereof. This Contract is not valid unless
and until the Statement of Political Contributions and Expenditures is provided.

15.07 The Statement of Political Contributions and Expenditures shall be filed by the Contractor
on an annual basis for the duration of the Contract, shall be current up to and including the
date of its filing, and shall also be filed with all contract renewals and change orders, if
any.

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Article 16. Confidential Information and Proprietary Rights

16.01 In order that the Contractor may effectively fulfill its covenants and obligations under this
Contract, it may be necessary or desirable for the City to disclose confidential and
proprietary information, including the Data, to the Contractor or its Associates pertaining
to the City's past, present and future activities. Since it is difficult to separate confidential
and proprietary information from that which is not, the Contractor shall regard, and shall
instruct its Associates to regard, all information, including, but to limited to the Data,
gained as confidential and such information shall not be disclosed to any organization or
individual without the prior written consent of the City. The above obligation shall not
apply to information already in the public domain or information required to be disclosed
by a court order.

16.02 The City acknowledges and agrees that the source code, technology, and internal structure
of the Software, and Subscription Services, as well as the Documentation, operations
manual(s) and training material(s), are the confidential information and proprietary trade
secrets of the Contractor, the value of which would be destroyed by disclosure to the public.
Use by anyone other than the City of the Subscription Services, and Documentation are
prohibited, unless pursuant to a valid assignment under this Contract. Unless prohibited by
applicable law, the terms and conditions of this Contract, including pricing and payment
terms shall also be treated as the Contractor’s confidential information. The City agrees
during the term of this Contract, and thereafter, to hold the confidential information and
proprietary trade secrets of the Contractor in strict confidence and to not permit any person
or entity to obtain access to it except as required for the City’s exercise of the License rights
granted under this Contract. Nothing in this Contract is intended to or shall limit any rights
or remedies under applicable law relating to trade secrets, including the Uniform Trade
Secrets Act as enacted in applicable jurisdictions.

16.03 The Contractor agrees to take appropriate action with respect to its Associates to ensure
that the foregoing obligations in section 16.01 of non-use and non-disclosure of the City’s
confidential information shall be fully satisfied.

16.04 The Contractor has structured its technology, processes and policies in such a way as to
minimize the risk of privacy infringements from audio surveillance while still delivering
important public safety benefits to its the City’s. These efforts to maintain privacy include
the following:

(a) The Contractor will not provide extended audio to any other person
beyond the audio snippet (1 second of ambient noise prior to a gunshot,
the gunshot audio itself, and 1 second after the incident). The Contractor
will vigorously resist any subpoena or court order for extended audio
that goes beyond an audio snippet.

(b) The Contractor will not provide a list or database of the precise location
of Sensors to police or the public if requested and will challenge any
subpoenas for this location any data.

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16.05 Obligations of the Parties. The receiving Party’s (“Recipient”) obligations under this section
shall not apply to any of the disclosing Party’s (“Discloser”) Confidential Information that
Recipient can document: (a) was in the public domain at or subsequent to the time such
Confidential Information was communicated to Recipient by Discloser through no fault of
Recipient; (b) was rightfully in Recipient’s possession free of any obligation of confidence
at or subsequent to the time such Confidential Information was communicated to Recipient
by such Discloser; (c) was developed by employees or agents of Recipient independently
of and without reference to any of Discloser’s Confidential Information; or (d) was
communicated by Discloser to an unaffiliated third party free of any obligation of
confidence. A disclosure by Recipient of any Discloser Confidential Information (a) in
response to a valid order by a court or other governmental body; (b) as otherwise required
by law; or (c) necessary to establish the rights of either party under this Contract shall not
be considered to be a breach of this Contract by the Recipient; provided, however, that
Recipient shall provide prompt prior written notice thereof to the Discloser to enable
Discloser to seek a protective order or otherwise prevent such disclosure. The Recipient
shall use reasonable controls to protect the confidentiality of and restrict access to all
Confidential Information of the Discloser to those persons having a specific need to know
for the purpose of performing the Recipient’s obligations under this Agreement. The
Recipient shall use controls no less protective than Recipient uses to secure and protect its
own confidential, but not “Classified” or otherwise Government-legended, information.
Upon termination of this Contract, the Recipient, as directed by the Discloser, shall either
return the Discloser’s Confidential Information, or destroy all copies thereof and verify
such destruction in writing to the Discloser. Unless the Recipient obtains prior written
consent from the Discloser, the Recipient agrees that it will not reproduce, use for purposes
other than those expressly permitted in this Contract, disclose, sell, license, afford access
to, distribute, or disseminate any information designated by the Discloser as confidential.

Article 17. Compliance with Laws

17.01 The Contractor shall comply with and shall require its Associates to comply with all
applicable federal, state and local laws. .

17.02 The Contractor shall hold the City harmless with respect to any damages arising from any
violation of law by it or its Associates. The Contractor shall commit no trespass on any
public or private property in the performance of this Contract. The Contractor shall require
as part of any subcontract that the Subcontractor comply with all applicable laws and
regulations.

Article 18. Office of Inspector General

18.01 In accordance with Section 2-106.6 of the City Charter, this Contract shall be voidable or
rescindable at the discretion of the Mayor or Inspector General at any time if a Public
Servant who is a party to the Contract has an interest in the Contract and fails to disclose
such interest.

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18.02 This Contract shall also be voidable or rescindable if a lobbyist or employee of the
contracting party offers a prohibited gift, gratuity, honoraria or payment to a Public Servant
in relation to the Contract.

18.03 A fine shall be assessed to the Contractor in the event of a violation of Section 2-106.6 of
the City Charter. If applicable, the actions of the Contractor, and its representative lobbyist
or employee, shall be referred to the appropriate prosecuting authorities.

18.04 Pursuant to Section 7.5-306 of the City Charter, the Inspector General shall investigate any
Public Servant, City agency, program or official act, contractor and subcontractor
providing goods and Subscription Services to the City, business entity seeking contracts or
certification of eligibility for City contracts and person seeking certification of eligibility
for participation in any City program, either in response to a complaint or on the Inspector
General’s own initiative in order to detect and prevent waste, abuse, fraud and corruption.

18.05 In accordance with Section 7.5-310 of the City Charter, it shall be the duty of every Public
Servant, contractor, subcontractor, and licensee of the City, and every applicant for
certification of eligibility for a City contract or program, to cooperate with the Inspector
General in any investigation pursuant to Article 7.5, Chapter 3 of the City Charter.

18.06 Any Public Servant who willfully and without justification or excuse obstructs an
investigation of the Inspector General by withholding documents or testimony, is subject
to forfeiture of office, discipline, debarment or any other applicable penalty.

18.07 As set forth in Section 7.5-308 of the City Charter, the Inspector General has a duty to
report illegal acts. If the Inspector General has probable cause to believe that any Public
Servant or any person doing or seeking to do business with the City has committed or is
committing an illegal act, then the Inspector General shall promptly refer the matter to the
appropriate prosecuting authorities.

18.08 In accordance with Section 18-11-1(a) of the Detroit City Code, the City shall solicit offers
from, award contracts to, consent to subcontracts with, or otherwise to conduct business
with, responsible contractors only. To effectuate this policy, the debarment of contractors
and subcontractors from current and/or future City work may be undertaken.
18.09 Therefore, it will be the responsibility of all the Contractor to check the list of debarred
contractors in the City’s website and confirm that neither the Contractor nor the
subcontracting company is listed on the City’s debarment list and they will not be using
the debarred (sub)contractor(s) to conduct any City business.
18.10 In accordance with Section 18-11-2(c) of the Detroit City Code, the Contractor shall report
to the Office of Inspector General any improper, unethical or illegal activity or requests
made by elected officers of the City, including those acting on their behalf, or any Public
Servant in connection with this Contract.

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Article 19. Amendments

19.01 The City may consider it in its best interest to change, modify or extend a covenant, term
or condition of this Contract or request that the Contractor modify the Subscription
Services in any manner not described on Exhibit A. Any such change, addition, deletion,
extension or modification of Subscription Services may require that the compensation paid
to the Contractor by the City be proportionately adjusted, either increased or decreased, to
reflect such modification. If the City and the Contractor mutually agree to any changes or
modification of the Subscription Services or this Contract, the modification shall be
incorporated into this Contract by written Amendment.

19.02 Compensation shall not be modified unless there is a corresponding modification in the
Subscription Services sufficient to justify such an adjustment. If there is any dispute as to
compensation, the Contractor shall continue to perform under this Contract until the dispute
is resolved.

19.03 No Amendment to this Contract shall be effective and binding upon the parties unless it
expressly makes reference to this Contract, is in writing, is signed and acknowledged by
duly authorized representatives of both parties, is approved by the appropriate City
departments and the City Council, and is signed by the Chief Procurement Officer.

19.04 The City shall not be bound by Unauthorized Acts of its employees, agents, or
representatives with regard to any dealings with the Contractor and any of its Associates.

Article 20. Fair Employment Practices

20.01 The Contractor shall comply with, and shall require any Subcontractor to comply with, all
federal, state and local laws governing fair employment practices and equal employment
opportunities.

20.02 The Contractor agrees that it shall, at the point in time it solicits any subcontract, notify the
potential Subcontractor of their joint obligations relative to non-discrimination under this
Contract, and shall include the provisions of this Article 20 in any subcontract, as well as
provide the City a copy of any subcontract upon request.

20.03 Breach of the terms and conditions of this Article 20 shall constitute a material breach of
this Contract and may be governed by the provisions of Article 12, "Default and
Termination."
Article 21. Notices

21.01 All notices, consents, approvals, requests and other communications ("Notices") required
or permitted under this Contract shall be given in writing, mailed by postage prepaid,
certified or registered first-class mail, return receipt requested, or overnight delivery
services, and addressed as follows:

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If to the Police Department on behalf of the City:

Attn: Art Thompson
1301 Third St
Detroit, MI 48226

If to the Contractor:
ShotSpotter, Inc.
Attn: Chief Financial Officer
7979 Gateway Blvd., Suite 210
Newark, CA 94560

21.02 All Notices shall be deemed given on the day of mailing. Either party to this Contract may
change its address for the receipt of Notices at any time by giving notice of the address
change to the other party. Any Notice given by a party to this Contract must be signed by
an authorized representative of such party.

21.03 The Contractor agrees that service of process at the address and in the manner specified in
this Article 21 shall be sufficient to put the Contractor on notice of such action and waives
any and all claims relative to such notice.

Article 22. Force Majeure

No failure or delay in performance of this Contract, by either party, shall be deemed to be a breach
thereof when such failure or delay is caused by a force majeure event including, but not limited to,
any Act of God, strikes, lockouts, wars, acts of terrorism, riots, epidemics, explosions, sabotage,
breakage or accident to equipment, the binding order of any court or governmental authority, or
any other cause, whether of the kind herein enumerated or otherwise, not within the control of a
party. In the event of a dispute between the parties with regard to what constitutes a force majeure
event, the City’s reasonable determination shall be controlling.

Article 23. Waiver

23.01 Neither party shall be deemed to have waived any of its rights under this Contract unless
such waiver is in writing and signed by the party consenting to such waiver.

23.02 No delay or omission on the part of either party in exercising any right shall operate as a
waiver of such right or any other right. A waiver on any one (1) occasion shall not be
construed as a waiver of any right on any future occasion.

23.03 No failure by either party to insist upon the strict performance of any covenant, agreement,
term or condition of this Contract or to exercise any right, term or remedy consequent upon
its breach shall constitute a waiver of such covenant, agreement, term, condition, or breach.
Article 24. Miscellaneous

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24.01 If any provision of this Contract or its application to any person or circumstance shall to
any extent be invalid or unenforceable, the remainder of this Contract shall not be affected
and shall remain valid and enforceable to the fullest extent permitted by law.

24.02 This Contract contains the entire agreement between the parties and all prior negotiations
and agreements are merged into this Contract. Neither the City nor the City's agents have
made any representations except those expressly set forth in this Contract, and no rights or
remedies are, or shall be, acquired by the Contractor by implication or otherwise unless
expressly set forth in this Contract. The Contractor waives any defense it may have to the
validity of the execution of this Contract.

24.03 Unless the context otherwise expressly requires, the words "herein," "hereof," and
"hereunder," and other words of similar import, refer to this Contract as a whole and not to
any particular section or subdivision.

24.04 The headings of the sections of this Contract are for convenience only and shall not be used
to construe or interpret the scope or intent of this Contract or in any way affect the same.

24.05 This Contract and all actions arising under it shall be governed by, subject to, and construed
according to the law of the State of Michigan. The Contractor agrees, consents and submits
to the exclusive personal jurisdiction of any state or federal court of competent jurisdiction
in Wayne County, Michigan, for any action arising out of this Contract. The Contractor
also agrees that it shall not commence any action against the City because of any matter
whatsoever arising out of or relating to the validity, construction, interpretation and
enforcement of this Contract in any state, federal or foreign court of competent jurisdiction
other than one in Wayne County, Michigan.

24.06 If any Associate of the Contractor shall take any action that, if done by the Contractor,
would constitute a breach of this Contract, the same shall be deemed a breach by the
Contractor.

24.07 The rights and remedies set forth in this Contract are not exclusive and are in addition to
any of the rights or remedies provided by law or equity.

24.08 For purpose of the hold harmless and indemnity provisions contained in this Contract, the
term "City" shall be deemed to include the City of Detroit and all other associated,
affiliated, allied or subsidiary entities or commissions, now existing or subsequently
created, and their officers, agents, representatives, and employees.

24.09 The Contractor covenants that it is not, and shall not become, in arrears to the City upon
any contract, debt, or other obligation to the City including, without limitation, real
property, personal property and income taxes, and water, sewage or other utility bills.

24.10 This Contract may be executed in any number of original counterparts, any one of which
shall be deemed an accurate representation of this Contract. Promptly after the execution
of this Contract, the City shall provide a fully executed copy to the Contractor.

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24.11 As used in this Contract, the singular shall include the plural, the plural shall include the
singular, and a reference to either gender shall be applicable to both.

24.12 The rights and benefits under this Contract shall inure to the benefit of the heirs, executors,
administrators, agents, successors, and assigns of the parties hereto. This paragraph shall
not be construed as a consent to any assignment of this Contract by either party except as
provided in Article 13.

24.13 The City shall have the right to recover by setoff from any payment owed to the Contractor
all delinquent withholding, income, corporate and property taxes owed to the City by the
Contractor, any amounts owed to the City by the Contractor under this Contract or other
contracts, and any other debt owed to the City by the Contractor.

24.14 All right and title to Contractor’s trademarks or service marks (“Trademarks”) used to
identify the Contractor’s Documentation and other products and services belonging to the
Contractor prior to, or subsequent to, the effective date of this Contract, shall continue to
belong to the Contractor. Nothing herein grants, or shall be construed to grant, to the City
any rights to such Trademarks.

Article 25. Invoice Submission and Payment

25.01 All invoices submitted against the contract must include part or item numbers and part or
item description, list price, and applicable discount. Items not properly invoiced will not
be paid. It is the Contractor's responsibility to ensure the creation of invoice(s) in Oracle
Cloud. Invoices must meet the following conditions for payment: Price on invoice must
correspond to the pricing listed on purchase order and/or contract.

25.03 All suppliers must register in the Supplier Portal and be set up for ACH (wireless
payment) in order to receive payment

25.04 The Contractor’s registration and invoice submission instructions can be found on the
City of Detroit’s website at http://www.detroitmi.gov/Supplier. Questions should be
directed to procurementinthecloud@detroitmi.gov.

Article 26. Board of Ethics

26.01 In accordance with Section 2-106.10 of the City Charter, it is the duty of every Public
Servant, the Contractor and subcontractors, if any, to cooperate with the Board of Ethics in
any investigation.

26.02 Any Public Servant who willfully and without justification or excuse obstructs an
investigation of the Board of Ethics by withholding documents or testimony is subject to
forfeiture of officer, discipline, debarment or any other applicable penalty.

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26.03 The Contractor acknowledges that it subject to debarment or any other applicable penalty,
if the Contractor willfully and without justification or excuse obstructs an investigation of
the Board of Ethics by withholding documents or testimony.

(Signatures appear on next page)

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Exhibit A – Subscription Services

A.1. Notice to Proceed

The initial term of this Contract shall begin upon approval by the Detroit City Council, and
shall continue for a four (4) years, unless the City exercises its option to extend the term, as set
forth below. The Contractor shall commence performance of this Contract upon receipt of a
written “Notice to Proceed” from the City and in the manner specified in the Notice to Proceed.

A.1.2. Subscription Services Objectives and General Description

The Contractor will provide the Subscription Services for an outdoor area acoustic gunshot system
to enable the City to precisely and quickly identify where there are gunfire incidents. The City
expects that the Subscription Services will reduce gun violence in the city by identifying more
gunshot incidents, while being able to respond to the runs more quickly. The Subscription Services
will provide a gunshot detection system that will be integrated into the City’s current security
management technology to help reduce gun violence in the City and assist in locating evidence
such as shell casings which will provide investigative leads. The Subscription Services will work
in concert with the City's focused deterrence model which have had demonstrable success in
reducing gun violence.

A.1.3 Subscription Services Description

The Contractor will provide the Subscription Services that, at a minimum, will include the
following Coverage Areas:

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Coverage Areas = 6.48 square miles

The Subscription Services Reports and Expert Witness Services. The Subscription Services will
provide:

1. Forensic Reports.

a. Investigative Lead Summary (“ILS”). The Subscription Services

provides an on-demand report available through the “ShotSpotter
Respond Application.” The Investigative Lead Summary (ILS)
provides useful details about the approximate location, timing, and
sequence of each shot fired during an incident. The ILS will help
DPD officers find shell casings, confirm witness accounts, and
identify suspects. ILS reports are available immediately after an
incident occurs via the mobile, web, or desktop “ShotSpotter
Respond” application (machine-generated). The ILS is not a court-
admissible document.
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b. Detailed Forensic Report (“DFR”). The Subscription Services will

provide a DFR for any Subscription Services-detected incidents,
including Reviewed Alerts. The DFR is intended to be a court-
admissible document used by attorneys as part of a court case for
the exact, verified timing, sequence and location of each shot fired.
Secondarily, the DFR is available for use by DPD to obtain a
search warrant or to investigate an Officer Involved Shooting.

DFRs must be requested in writing and addressed to the

Contractor. Requests may be submitted via the Forensics Services
page under the Law Enforcement tab on the Contractor’s website
(www.shotspotter.com). The Contractor will use commercially
reasonable efforts to provide a DFR within ten (10) business days
of receipt of the request.

2. Expert Witness Services.

The Contractor will provide reasonable expert witness services, including

Reviewed Alerts, for an hourly fee as set forth in Exhibit B, as well as
reimbursement of all travel and per diem costs. If requested to provide
such services, the Contractor will invoice the City for the number of hours
expended to prepare for and provide expert witness testimony, and actual
travel expenses, upon completion of the services. The City understands
that the Contractor undertakes to provide individuals whose qualifications
are sufficient for such services, but does not warrant that any person or his
or her opinion will be accepted by every court. The Contractor requires at
least fourteen (14) days prior notice of such a requirement in writing from
the City. The City must include dates, times, specific locations, and a point
of contact for the Contractor personnel. Due to the nature of legal
proceedings, the Contractor cannot guarantee that its services described in
this section shall produce the outcome, legal or otherwise, which The City
desires. Payment for expert witness services described shall be due and
payable when services are rendered regardless of the outcome of the
proceedings.

A.4 Training

The Contractor will assign a Customer Success Director to the DPD to ensure that it delivers
consistent, quality training based on the DPD’s needs. In preparation for the planned cutovers, the
Contractor will train each group of users on the Subscription Services applications, including
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Service Availability

The Subscription Services will be able to detect gunfire and available to users with online access to data
99.9% of the time, on a 24x7 by 365 day per year basis, excluding: a) scheduled maintenance periods
which will be announced to the City in advance; b) select holidays; and c) third party network outages
beyond the Contractor’s control. The Subscription Services include all database, applications, and
communications services hosted by the Contractor at its data center and specifically exclude the City’s
internal network or systems or third party communications networks, e.g. Verizon, AT&T or the
Customer’s internet service provider.

City SLA Credits

Each Service Level measurement shall be determined quarterly, the results of which will be reviewed
during the periodic account review meetings with the City. For each calendar quarter that the Contractor
does not meet at least two of the three above standards, a fee reduction representing one free week of
service (for the affected Coverage Area) for each missed quarter shall be included during a future City
renewal.

Service Level Exclusions and Modifications

The Contractor shall maintain Service Levels at all times. However, Service Level performance during
New Year’s Eve and Independence Day and the 48-hour periods before and after these holidays, are
specifically excluded from Service Level standards. During these excluded periods, because of the large
amount of fireworks activity, the Subscription Services uses fireworks suppression techniques to
distinguish gunshots from fireworks.

The Contractor will put the Subscription Services system into "fireworks suppression mode" during this
period in order to reduce and distinguish the non-gunfire incidents required for human classification. The
Contractor will inform the City in writing prior to the Subscription Services being placed in fireworks
suppression mode and when the mode is disabled. While in fireworks suppression mode, the incident
alerts determined to be fireworks are not sent to the reviewer nor the City dispatch center, patrol car MDTs,
and officer smartphones; however, these non-gunfire incidents will continue to be stored in the database
for use if required at a later time.

The Subscription Services sensors send incident information to the Subscription Services cloud via third
party cellular, wireless or wired networks. The Contractor is not responsible for outages on the third party
networks.

Service Failure Notification

Should the Contractor identify any condition (disruption, degradation or failure of network, cloud, servers,
sensors etc.) that impacts the Subscription Services’ ability to meet the Gunshot Detection & Location
standard set forth in this Contract, the Contractor will proactively notify the City in writing with: a) a brief

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explanation of the condition; b) how the City’s service is affected; and c) the approximate timeframe for
resolution. The Contractor will also notify the City once any such condition is resolved.
The City Responsibilities

The purpose of the Reviewed Alert service is to provide incident data to the City, reviewed, analyzed and
classified in the manner described above. However, it is the sole responsibility of the City to interpret the
data provided, and to determine any appropriate follow-up reaction or response, including whether or not
to dispatch emergency responder resources based on a Reviewed Alert. The Contractor does not assume
any obligation, duty or responsibility for the City’s reaction, response, or dispatch decisions, or for the
consequences or outcomes of any decisions made or not made by the City in reliance, in whole or in part,
on any of the Subscription Services.

The City must inform the Contractor when Verified Incidents of gunfire are missed by the Subscription
Services in order to properly calculate Performance Rate, as defined below.

The City is responsible for providing any required workstations, mobile devices and internet access for
the City’s dispatch center, patrol car MDTs, and officer smartphones, or Investigator Portal.

ShotSpotter – Definition of Key Terms

The Subscription Services will provide data for correct detection and accurate location for ninety percent
(90%) of detectable (outdoor, unsuppressed) community gunfire which occurs within the Coverage Area,
provided the measurement is Statistically Significant, as defined below. This “Performance Rate” shall be
calculated as a percentage as follows:

𝑃𝑒𝑟𝑓𝑜𝑟𝑚𝑎𝑛𝑐𝑒 𝑅𝑎𝑡𝑒 =
𝑁𝑢𝑚𝑏𝑒𝑟𝐴𝑐𝑐𝑢𝑟𝑎𝑡𝑒𝑙𝑦𝐿𝑜𝑐𝑎𝑡𝑒𝑑
(𝑁𝑢𝑚𝑏𝑒𝑟𝐴𝑐𝑐𝑢𝑟𝑎𝑡𝑒𝑙𝑦𝐿𝑜𝑐𝑎𝑡𝑒𝑑 + 𝑁𝑢𝑚𝑏𝑒𝑟𝑁𝑜𝑡𝐷𝑒𝑡𝑒𝑐𝑡𝑒𝑑 + 𝑁𝑢𝑚𝑏𝑒𝑟𝑀𝑖𝑠𝑙𝑜𝑐𝑎𝑡𝑒𝑑)

where the “Performance Rate” is a number expressed as a percentage, “NumberAccuratelyLocated” is

the number of “Gunfire Incidents” occurring within the Coverage Area during the specified period for
which the Subscription Services produced an Accurate Location, NumberMislocated is the number of
Verified Incidents (a “Verified Incident” is an incident where The City has physical or other credible
evidence that gunfire took place) for which the Subscription Services produced an inaccurate location
(i.e., a Mislocated Incident), and NumberNotDetected is the number of Verified Incidents for which the
Subscription Services failed to report a location at all (i.e., Missed Incidents).

An “Accurate Location” shall mean an incident located by the Subscription Services to a latitude/longitude
coordinate that lies within a 25-meter radius of the confirmed shooters location (25 meters =
approximately 82 feet). “Detectable Gunfire” incidents are unsuppressed discharges of ballistic firearms
which occur fully outdoors in free space (i.e. not in doorways, vestibules, windows, vehicles, etc.) using
standard commercially available rounds of caliber greater than .25.

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The Subscription Services Review Period is measured as the period commencing when the Incident
Review Center (IRC) receives the alert and the first audio download to the time it is published to the City.

The Subscription Services detects the sound of the muzzle blast and does not rely upon the sound of the
bullet traveling through the air. Therefore, the speed in which the bullet travels (subsonic or supersonic)
has no bearing on the Performance Rate.
The Subscription Services location system is not a “point protection” system and is therefore not designed
to consistently detect gunfire at every single location within the Coverage Area, but rather to Accurately
Locate 90% of the Detectable Incidents in aggregate throughout the entire Coverage Area. There may be
certain locations within the Coverage Area where obstacles and ambient noise impede and/or overshadow
the propagation of acoustic energy such that locating the origin at those positions is inconsistent or
impossible. The Performance Rate calculation is thus specifically tied to the Community Gunfire across
the entire Coverage Area.

Statistically Significant shall be defined as measurements and calculations which shall be performed as
follows: (a) Across an entire Coverage Area; (b) Aggregating over a period of at least 30 days under
weather conditions seasonally normal for the area; and (c) Provided that the total number of gunfire
incidents being counted is equal to or greater than: (i) thirty (30) incidents for systems of up to three (3)
square miles of Coverage Area, or (ii) ten (10) incidents multiplied by the number of square miles of
Coverage Area for systems where one or more Coverage Areas are three (3) square miles or larger

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Exhibit B – Fee Schedule

I. General

(a) The Contractor shall be paid for the Subscription Services pursuant to this Contract a
maximum amount of One Million Five Hundred Thousand Dollars and 00/100 Dollars
($1,500,000.00 ) for the initial term for the Subscription Services provided under this Contract as
set forth in Exhibit A, Scope of Services.
(b) Payment for the proper performance of the Services shall be contingent upon receipt by
the City of invoices for payment to the City’s office of procurement payment portal. Each invoice
shall certify the total cost, itemizing costs when applicable. Contractor shall submit invoices in in
accordance with the following payment schedule:

• 50% of Year 1 fees due upon execution of agreement ($185,500)

• 50% of Year 1 fees due upon ShotSpotter activation (live) status ($185,500)*
• 100% of Year 2 fees due prior to 1st anniversary of ShotSpotter live status ($371,000)
• 100% of Year 3 fees due prior to 2nd anniversary of ShotSpotter live status ($371,000)
• 100% of Year 4 fees due prior to 3rd anniversary of ShotSpotter live status ($372,000)

Note: The total amount of the payments due for years 1 through 4 is One Million Four
Hundred Eighty-Four Thousand and 00/100 Dollars ($1,484,000.00). The total contract
price of One Million Five Hundred Thousand and 00/100 Dollars ($1,500,000.00) reflects
a difference of Sixteen Thousand and 00/100 Dollars ($16,000.00) which the City, at its sole
discretion, may use to pay for optional services such as Expert Witness fees, specified in
section III below.

*Should the City determine to have a phased Go Live (different sections within the
Coverage Area activated on different dates), the fees due upon service activation may be
split. The amount due for each Go Live will be based on the number of square miles
activated on that date.

Each invoice must be signed by an authorized officer or designee of the Contractor.

(c) The Fees includes unlimited Data storage during the term of this Contract.
(d) All references to currency are in US Dollars.

II. Billing All invoices submitted pursuant to this Contract must include part or item numbers
and part or item description, list price, and applicable discount. Items not properly invoiced will not
be paid. It is the Contractor’s responsibility to ensure the creation of invoice(s) in Oracle Cloud.
Invoices must meet the following conditions for payment:

(a) Price on invoice must correspond to the payment schedule above.

(b) Contractor must register in the Supplier Portal and be set up for ACH (wireless payment)
in order to receive payment.

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(c) Contractor registration and invoice submission instructions can be found on the City of
Detroit’s website at http://www.detroitmi.gov/Supplier. Questions should be directed to
procurementinthecloud@detroitmi.gov.

III. Optional Services

Expert Witness Services $350.00 per hour.

Expert Witness Services are available upon request and will be billed separately, including travel
expenses as further defined in Exhibit A. Under no circumstances shall the amount paid to the
Contractor exceed the amount stated in the first paragraph of this Exhibit B.

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____________________________ SYSTEM CONTRACT

BETWEEN

CITY OF DETROIT, MICHIGAN

AND

[CONTRACTOR NAME]

CONTRACT NO.

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Article 1. Definitions and Exhibits ........................................................................................... 3

Article 2. Engagement of Contractor ........................................................................................ 5
Article 3. Contractor's Representations and Warranties ........................................................... 7
Article 4. Contract Effective Date and Time of Performance................................................... 9
Article 5. Records, Work Products and Data .......................................................................... 10
Article 6. Contractor Personnel and Contract Administration ................................................ 10
Article 7. Compensation and Security .................................................................................... 11
Article 8. Maintenance and Audit of Records......................................................................... 11
Article 9. Indemnity ................................................................................................................ 12
Article 10. Insurance ................................................................................................................. 13
Article 11. Default and Termination ......................................................................................... 16
Article 12. Assignment ............................................................................................................. 21
Article 13. Subcontracting ........................................................................................................ 21
Article 14. Conflict of Interest .................................................................................................. 22
Article 15. Confidential Information ........................................................................................ 23
Article 16. Compliance with Laws and Privacy and Security Policies ..................................... 24
Article 17. Office of Inspector General .................................................................................... 24
Article 18. Amendments ........................................................................................................... 25
Article 19. Fair Employment Practices ..................................................................................... 25
Article 20. Notices .................................................................................................................... 25
Article 21. Force Majeure ......................................................................................................... 26
Article 22. Waiver ..................................................................................................................... 26
Article 23. Miscellaneous ......................................................................................................... 27
Exhibit A – Legislative Management System (“The Services”) ................................................ A-1
Exhibit B – Fee Schedule ............................................................................................................ B-1
Exhibit C – Statement of Political Contributions and Expenditures........................................... C-1

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CITY OF DETROIT
______________________ SYSTEM CONTRACT

This ______________________ System Contract is entered into by and between the City
of Detroit, a Michigan municipal corporation, acting by and through its [DEPARTMENT NAME],
and ____________________________, a corporation organized under the laws of
___________________, with its principal place of business located at
__________________________.

Recitals:

Whereas, the City desires to engage the Contractor to deliver the System as set forth in this
Contract; and

Whereas, the Contractor desires to provide the System as set forth in this Contract;

Accordingly, the parties agree as follows:

Article 1. Definitions and Exhibits

1.01 The following Capitalized words and expressions or pronouns used in their stead and as
used in this Contract shall have the following meanings:

ADD OR DELETE DEFINITIONS AS NECESSARY TO CONFORM TO

TRANSACTION

"Amendment" means modifications or changes in this Contract that have been mutually
agreed upon by the City and the Contractor in writing and approved by the City Council.

"API” means application programing interface, which is a software intermediary that

allows two applications to communicate.

“Associates" means the personnel, employees, consultants, subcontractors, agents, and

parent company of the Contractor or of any Subcontractor, now existing or subsequently
created, and their agents and employees, and any entities associated, affiliated, or
subsidiary to the Contractor or to any subcontractor, now existing or subsequently created,
and their agents and employees.

"City" means the City of Detroit, a Michigan Municipal Corporation, acting through the
office or department named in the Contract as contracting for the System on behalf of the
City.

"City Council" means the legislative body of the City.

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"Contract" means each of the various provisions and parts of this document, including all
attached Exhibits and all Amendments, if any, as executed and approved by the appropriate
City departments or offices and by the City Council.

"Contractor" means __________________________, a _____________________

organized under the laws of __________________ and authorized to do business in the
State of Michigan.

“Data” means any and all information, including, but not limited to Personal Information,
supplied by the City to the Contractor, any of the City’s information accessed or used by
the Contractor in connection with the System or performance of this Contract, and any
other information uploaded or transmitted to or stored on the System by the City.

“Database Schemas” means the structure for the organization of Data within the System.

“Data Storage: means to the online electronic secure storage of Data during the Use of the
System.
“Documentation” means any and all printed or electronic guides and manuals, including
sales, marketing and training materials provided by the Contractor for the authorized Use
of the System.
“Exhibit A” is the complete and detailed description of the System.

"Exhibit B” is the Fee Schedule for this Contract and sets forth the amount of compensation
to be paid to the Contractor, including any Reimbursable Expenses.

"Exhibit C" is the Contractor’s Statement of Political Contributions and Expenditures.

"Personal Information” means information which relates to an identified or identifiable

individual, and includes any information defined from time to time as “personal
information” under applicable state or federal privacy legislation.

“Privacy and Security Policies” means the City’s Data Security, Data Privacy, Identity
Management, Data Deletion, Physical Security, Business Continuity, Backup Encryption,
Incident Management and FTI Deletion policies, and any amendments or additional City
policies that may be adopted during the term of this Contract.

“Public Servant" means the Mayor, members of City Council, City Clerk, appointive
officers, any member of a board, commission or other voting body established by either
branch of City government or the City Charter, and any appointee, employee or individual
who provides services to the City within or outside of its offices or facilities pursuant to a
personal services contract.”

“Records" means all books, ledgers, journals, accounts, documents, and other collected
Data in which information is kept regarding the performance of this Contract and the
function of the System.

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"Reimbursable Expenses" means only those costs incurred by the Contractor in the
performance of the System, such as travel costs and document reproduction costs that are
identified in Exhibit B as reimbursable.

“Request for Proposals or RFP” means the City’s Solicitation ______________________,

published ___________________.

“Secure Sockets Layer” or “SSL” means the standard security technology for establishing
an encrypted link between a web server and a browser. This link ensures that all Data in
the System remains private and integral. To be able to create an SSL connection a web
server requires an SSL Certificate.

“Statement on Standards for Attestation Engagements 16” or “SSAE 16” means the a
regulation created by the Auditing Standards Board of the American Institute of Certified
Public Accountants for redefining and updating how service companies, including the
Contractor, report on compliance controls.

“SQL Server” means the relational database management system developed and owned by
the Microsoft Corporation for storing and retrieving data as requested by other software
applications which may run either on the same computer or on another computer across a
network, including the Internet.

"Subcontractor" means any person, firm or corporation, other than employees of the
Contractor that contracts with the Contractor, directly or indirectly, to perform in part or
assist the Contractor in achieving the objectives of this Contract.

"System" means the _____________________ System provided by the Contractor,

including all necessary hardware and software, as more precisely and completely defined
in Exhibit A.

"Unauthorized Acts" shall mean any acts by a City employee, agent or representative that
are not set forth in this Contract and have not been approved by City Council as part of this
Contract.
"Use” shall mean the ability for the City to login with user name and password and access
the System via the internet and conduct business on the System as described in Exhibit A.
‘Work Product" shall mean the originals, or copies when originals are unavailable, of all
materials prepared by the Contractor under this Contract or in anticipation of this Contract,
including but not limited to the Data, Data Schemas, studies, briefs, drawings, maps,
models, photographs, files, records, computer printouts, estimates, memoranda,
computations, papers, supplies, notes, recordings, and videotapes, whether such materials
are reduced to writing, magnetically or optically stored, or kept in some other form.

Article 2. Engagement of Contractor

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2.01 By this Contract, the City engages the Contractor and the Contractor hereby agrees to
provide the System set forth in Exhibit A, in accordance with the terms and conditions
contained in this Contract.

2.02 The Contractor and the System shall perform in a satisfactory manner as shall be
determined within the sole and reasonable discretion of the City. In the event that there
shall be any dispute between the parties with regard to the extent, character and progress
of the System to be provided or the quality of performance under this Contract, the
interpretation and determination of the City shall govern.

2.03 The Contractor shall confer as necessary and cooperate with the City in order that the
implementation of the System may proceed in an efficient and satisfactory manner. The
Contractor must attend all conferences, consultations and public hearings or appearances
deemed necessary by the City to ensure that the Contractor will be able to properly and
fully perform the objectives as set forth in this Contract.

2.04 The System is subject to the review, approval and acceptance of the City for completeness
and fulfillment of the requirements of this Contract. Neither the City's review, approval
nor payment for any of the amounts listed on Exhibit B shall be construed to operate as a
waiver of any rights under this Contract, and the Contractor shall be and will remain liable
in accordance with applicable law for all damages to the City caused by the Contractor's
incorrect performance or nonperformance of the System furnished under this Contract.

2.04 The City and the Contractor expressly acknowledge their mutual understanding and
agreement that there are no third party beneficiaries to this Contract and that this Contract
shall not be construed to benefit any persons other than the City and the Contractor.

2.05 The City will not directly or indirectly through any third parties attempt to reverse-engineer
or de-compile the operation of the System in any manner through current or future available
technologies, except that the City may perform all authorized acts under the terms of this
Contract, including without limitation, modifying the Data.

2.06 In addition to any other rights granted to the City under this Contract or by operation of
law, Contractor hereby grants the City a perpetual, royalty free license to Work Product for
unlimited use by the City for any lawful purpose. During the term of this Contract the
Contract shall provide the City access to Work Product immediately upon the City’s
request. Upon its termination of this Contract the Contractor shall deliver or provide
immediate access to the City to the Work Product. This covenant shall survive the
termination of this Contract.

2.07 The Contract will provide the City with sixty (60) days written notice in case the Contractor
stops using the ____________ Cloud as described on Exhibit A.

2.08 The City agrees that the Contractor may use and disclose the “City of Detroit, Michigan”
in its marketing material with prior written approval of the City, which will not be
unreasonably withheld.

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2.09 The City shall be entitled to provide the Contractor with information and feedback
concerning the System’s functional requirements and product definition which are not
addressed in Exhibit A and which the Contractor shall consider when formulating the
product development roadmap and plans. This co-operative process between Contractor
and the City does not create any ownership interest on the part of the City in the products
so developed by the Contractor should the Contractor incorporate any of the City’s
suggestions into the development plan or ultimately into the System.

2.10 On March 1, June 1, September 1 and January 1, of each calendar year during the term of
this Contract, the Contractor shall provide “Call Center Performance Reports” to the City
which shall contain the number of calls for service, the level of urgency of the call and
whether the problem was resolved on the call.

2.11 SSAE 18 Reports. For each calendar year during the term of this Contract, Contractor
agrees to provide, at no cost, to the City, within the earlier of (i) ninety (90) days after the
end of each calendar year or (ii) thirty (30) days after Contractor’s receipt, a copy of the
SSAE 18 report for that particular calendar year, including a bridge letter if needed, to
ensure the complete calendar year is covered. Each SSAE 18 report and bridge letter must
be a Type 2 report (either SOC 1 or SOC 2) that is relevant to the Services. A Type 1 SSAE
report, which does not include actual testing of the controls, will not be acceptable.

Article 3. Contractor's Representations and Warranties

3.01 To induce the City to enter into this Contract, the Contractor represents and warrants that
the Contractor is authorized to do business in the State of Michigan and is duly qualified
to provide the System as set forth in this Contract, and that the execution of this Contract
is within the Contractor's authorized powers, is not in contravention of federal, state or
local law, and will not cause a breach of any other contract to which the Contractor is a
party.

3.02 The Contractor makes the following representations and warranties specifically in
connection with the System:

(a) The System shall perform according to the specifications and representations set
forth in Exhibit A and according to any other specifications and representations,
including any Documentation, provided by the Contractor to the City;

(b) The System will be fit for the City’s particular purposes as expressed Exhibit A and
the RFP.

(c) The Contractor has the full and unencumbered rights and powers to grant the City
access to and permission to Use the System, including the underlying Microsoft
Azure Cloud and the Microsoft’s Azure Cloud Virtual Server, and including all
upgrades, updates, improvements, modifications, enhancements or customizations,
and including any third party components and platforms embedded in the System,
and the rights granted herein will not violate the terms of any of its agreements with
any third party;

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(d) The Contractor’s execution, delivery, and performance of this Contract will not
constitute a violation of any judgment, order or decree, a default under any
agreement by which it or any of its assets are bound or an event that would, with
notice or lapse of time, constitute such a default;

(e) The System is free of any software, programs or routines, commonly known as
"disabling code," that are designed to cause the System to be destroyed, damaged,
or otherwise made inoperable in the course of the City’s Use of the System;

(f) The System is free of any known or reasonably discoverable computer program,
code or set of instructions, commonly known as a "computer virus," that is not
designed to be a part of the System and that, when inserted into the computer’s
memory: (i) duplicates all or part of itself without specific user instructions to do
so, or (ii) erases, alters or renders unusable any Data or the System, with or without
specific user instructions to do so, or (iii) that provide unauthorized access to the
System;

(g) The System is free of any spyware and malware;

(h) The System shall be fully warranted for repair or replacement during the term of
this Contract as amended or extended.

(h) The System shall:

(1) Accurately recognize and process all time and date Data including, but not
limited to, daylight savings time and leap year Data, and
(2) Use accurate same-century, multi-century, and similar date value formulas
in its calculations, and use date Data interface values that accurately reflect
the correct time, date and century.

(i) All components of the System are dedicated for the City’s Use only and not shared by
the Contractor with any third party.

(j) All Data and Work Products shall be and remain the sole and exclusive property of the
City. Contractor shall treat all Data as confidential information. Contractor will be
provided access to the Data for the sole and exclusive purpose of performing its
obligations under this Contract. Contractor is prohibited from disclosing any Data to
any third party without specific written approval from the City. Contractor will have
no property interest in, and may assert no lien on or right to withhold Data or Work
Product from the City.

(k) The Contractor has reviewed the Privacy and Security Policies and hereby represents
and warrants that the System will comply with the requirements of the Privacy and
Security Policies.

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(l) The Contractor will allow the City to perform audits of the Contractor’s compliance
with the Privacy and Security Policies.

(m) The System, the City’s access to the System, the City’s Use of the System or the
Documentation, and the Contractor’s performance of this Contract do not and will not
conflict with, infringe upon or violate, the intellectual property rights of any other
person or legal entity.

(n) The System, the City’s access to the System, the City’s Use of the System or the
Documentation, and the Contractor’s performance of this Contract are not alleged by
any person to conflict with, infringe upon or violate, the intellectual property rights of
any other person or legal entity.

(o) There are no existing or threatened legal proceedings brought against the Contractor in
respect of the System, the Documentation, or the Contractor’s right to grant others the
right to access and use the System, including the underlying Microsoft Azure Cloud,
the Microsoft’s Azure Cloud Virtual Server or the Documentation. Should the
Contractor become aware of any such conflict, infringement or violation or potential
conflict, infringement or violation, the Contractor will notify the City immediately.

(p) The Documentation is complete and will allow the City to access and use the System.

(q) The Contractor will meet the following Data-related system requirements:

(i) At all times, the City shall be able to receive Data, associated metadata, and
reasonably granular subsets thereof, as well as any associated files or
attachments, from the System in a useable, encrypted format.

(ii) Upon termination of this Contract and at the City’s written request, the
Contractor shall destroy all Data, including back-ups and copies thereof,
according to the National Institute of Standards and System (NIST)
standards or as otherwise directed by the City.

(iii) Contractor has and shall have the ability to retain Data in a manner that is
searchable and capable of compliance with records retention laws and best
practices.

(iv) At no time may Contractor suspend or terminate City’s access to any Data
or the System for breach of contract without giving the City reasonable
notice and opportunity to cure according to the City’s dispute resolution
process.

Article 4. Contract Effective Date and Time of Performance

4.01 This Contract shall be approved by the required City departments, approved by the City
Council, and signed by the City’s Chief Procurement Officer. The effective date of this

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Contract shall be the date upon which the Contract has been approved by resolution of the
City Council.

4.02 Prior to the approvals set forth in Section 4.01, the Contractor shall have no authority to
begin work on this Contract. The Chief Financial Officer shall not authorize any payments
to the Contractor, nor shall the City incur any liability to pay for the System or to reimburse
the Contractor for any expenditure, prior to such award and approvals.

4.03 The City and the Contractor agree that the commencement and duration of the Contractor's
performance under this Contract shall be determined as set forth in Exhibit A.

4.04 The City and the Contractor agree that the City shall have the right to extend the term of
this Contract on the terms and conditions contained herein, as set forth in more detail on
Exhibit A.

Article 5. Records, Work Products and Data

5.01 Copies of all Records and Work Products as are existing, available, and deemed necessary
by the City for the performance of the System and this Contract shall be furnished to the
City upon the City’s request.

5.02 The City may retrieve Data from the System at any time and, within ten (10) days of the
City’s request, the Contractor will make available any Data that is stored in native file
format (Word, Excel, PowerPoint, PDF, MP4). The Contractor shall not access, use,
disclose, sell, rent, transfer or copy the Data for any purpose (or authorize or permit a third
party to perform such acts) other than as required to perform the Contractor’s obligations
pursuant to this Contract.

Article 6. Contractor Personnel and Contract Administration

6.01 The Contractor represents that, at its own expense, it has obtained or will obtain all
personnel and equipment required to provide the System. It warrants that all such
personnel are qualified and possess the requisite licenses or other such legal qualifications
to perform the activities necessary for the Contractor to deliver the System and for the
System to function as described on Exhibit A. If requested, the Contractor shall supply a
résumé of the managerial staff or consultants it proposes to assign to this Contract, as well
as a dossier on the Contractor's professional activities and major undertakings.

6.02 The City may interview the Contractor's managerial staff and other employees assigned to
this Contract. The Contractor shall not use any managerial staff or other employees to
whom the City objects and shall replace in an expedient manner those rejected by the City.
The Contractor shall not replace any of the personnel working on this Contract with new
personnel without the prior written consent of the City.

6.03 When the City deems it reasonable to do so, it may assign qualified City employees or
others to work with the Contractor to complete the System. Nevertheless, it is expressly

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understood and agreed by the parties that the Contractor shall remain ultimately responsible
for the proper completion of the System.

6.04 The relationship of the Contractor to the City is and shall continue to be that of an
independent contractor and no liability or benefits, such as workers' compensation, pension
rights or liabilities, insurance rights or liabilities, or other rights or liabilities arising out of
or related to a contract for hire or employer/employee relationship shall arise or accrue to
either party or either party's agent, Subcontractor or employee as a result of the
performance of this Contract. No relationship other than that of independent contractor
shall be implied between the parties or between either party’s agents, employees or
Subcontractors. The Contractor agrees to indemnify, defend, and hold the City harmless
against any claim based in whole or in part on an allegation that the Contractor or any of
its Associates qualify as employees of the City, and any related costs or expenses, including
but not limited to legal fees and defense costs.

6.05 The Contractor warrants and represents that all persons assigned to the performance of this
Contract shall be regular employees or independent contractors of the Contractor, unless
otherwise authorized by the City. The Contractor’s employees’ daily working hours while
working in or about a City of Detroit facility shall be the same as those worked by City
employees working in the facility, unless otherwise directed by the City.

6.06 The Contractor shall comply with and shall require its Associates to comply with all
security regulations and procedures in effect on the City’s premises.

Article 7. Compensation and Security

7.01 Compensation for System provided shall be in the amounts and will be paid in the manner
set forth in Exhibit B. Unless this Contract is amended pursuant to Article 18, the amount
described on Exhibit B shall be the entire compensation to which the Contractor is entitled
for the System under this Contract.

7.02 Payment for System provided under this Contract is also governed by the terms of
Ordinance No. 42-98, entitled "Prompt Payment of Vendors," being Sections 18-5-71
through 18-5-79 of the 1984 Detroit City Code.

The City employee responsible for accepting performance and payment requests under this
Contract is:

NAME
TITLE
ADDRESS
PHONE
EMAIL

Article 8. Maintenance and Audit of Records

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8.01 The Contractor shall maintain full and complete Records reflecting all of its operations
related to this Contract. The Records shall be kept in accordance with generally accepted
accounting principles and maintained for a minimum of three (3) years after the Contract
completion date.

8.02 The City and any government-grantor agency providing funding under this Contract shall
have the right at any time with 10 days’ notice to examine and audit all Records and other
supporting Data of the Contractor as the City or any agency deems necessary.

(a) The Contractor shall make all Records available for examination during normal
business hours at its Detroit offices, if any, or alternatively at its facility nearest
Detroit. The City and any government-grantor agency providing funds for the
Contract shall have this right of inspection. The Contractor shall provide copies of
all Records to the City or to any such government-grantor agency upon request.

(b) If in the course of such inspection the representative of the City or of another
government-grantor agency should note any deficiencies in the performance of the
Contractor's agreed upon performance or record-keeping practices, such
deficiencies will be reported to the Contractor in writing. The Contractor agrees to
promptly remedy and correct any such reported deficiencies within ten (10) days of
notification.

(c) Any costs disallowed as a result of an audit of the Records shall be repaid to the
City by the Contractor within thirty (30) days of notification or may be set off by
the City against any funds due and owing the Contractor, provided, however, that
the Contractor shall remain liable for any disallowed costs exceeding the amount
of the setoff.

(d) Each party shall pay its own audit costs. However, if the dollar amount of the total
disallowed costs, if any, exceeds three percent (3%) of the dollar amount of this
Contract, the Contractor shall pay the City's audit costs.

(e) Nothing contained in this Contract shall be construed or permitted to operate as any
restriction upon the powers granted to the Auditor General by the City Charter,
including but not limited to the powers to audit all accounts chargeable against the
City and to settle disputed claims.

8.03 The Contractor agrees to include the covenants contained in Sections 8.01 and 8.02 in any
contract it has with any Subcontractor, consultant or agent who will be charged directly or
indirectly to the City for anything related to the System.

Article 9. Indemnity

9.01 The Contractor agrees to indemnify, defend, and hold the City harmless against and from
any and all liabilities, obligations, damages, penalties, claims, costs, charges, losses and
expenses (including, without limitation, fees and expenses for attorneys, expert witnesses
and other consultants) that may be imposed upon, incurred by, or asserted against the City

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or its departments, officers, employees, or agents by reason of any of the following

occurring during the term of this Contract:

(a) Any claim for negligent or tortious act, error, or omission attributable in whole or
in part to the Contractor or any of its Associates;

(b) Any failure by the Contractor or any of its Associates to perform their obligations,
either express or implied, under this Contract;

(c) Any claim for infringement of any patent, copyright, trademark, trade secret,
license agreement or any other proprietary rights arising from the City’s Use of the
System or Work Product.

(d) Any breach of any of the warranties and representations made by the Contractor in
Article 3 of this Contract.

(c) Any and all injury to the person or property of an employee of the City where such
injury arises out of the Contractor’s or any of its Associates performance of this
Contract, including, but not limited to any malfunction or lack of function of the
System.

9.02 The Contractor undertakes and assumes all risk of dangerous conditions when not
performing inside City offices. The Contractor also agrees to waive and release any claim
or liability against the City for personal injury or property damage sustained by it or its
Associates while performing under this Contract on premises that are not owned by the
City.

9.03 In the event any action shall be brought against the City by reason of any claim covered
under this Article 9, the Contractor, upon notice from the City, shall at its sole cost and
expense defend the same.

9.04 The Contractor agrees that it is the Contractor's responsibility and not the responsibility of
the City to safeguard the property that the Contractor or its Associates use while performing
this Contract. Further, the Contractor agrees to hold the City harmless for any loss of such
property used by any such person pursuant to the Contractor's performance under this
Contract.

9.05 The indemnification obligation under this Article 9 shall not be limited by any limitation
on the amount or type of damages, compensation, or benefits payable under workers'
compensation acts, other employee benefit acts, or any insurance policies listed in Article
10.

9.06 The Contractor agrees that this Article 9 shall apply to all claims, whether litigated or not,
that may occur or arise between the Contractor or its Associates and the City and agrees to
indemnify, defend and hold the City harmless against any such claims.

Article 10. Insurance

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10.01 During the term of this Contract, the Contractor shall maintain the following insurance, at
a minimum and at its expense:

(a). General liability insurance insuring the Contractor’s obligations and

responsibilities with respect to the performance of System as set out in this
Contract. The policy will be extended to include bodily injury and property damage,
products and completed operations, personal and advertising injury,
Implementation System, contingent employer’s liability, and contractual liability
to a limit of no less than two million dollars ($2,000,000) per occurrence. The
policy will include a cross liability and severability of interest clause and be
endorsed to name the Client as an additional insured;

(b) Non-owned automobile insurance to a limit of no less than one million dollars
($1,000,000);

(c) If applicable, automobile insurance (OAP1) for both owned and leased vehicles
with inclusive limits of no less than one million dollars ($1,000,000); and

(d) Errors and omissions liability insurance insuring the Contractor to a limit of no less
than one million dollars ($1,000,000) per claim and five million dollars
($5,000,000) in the aggregate. The coverage under the policy will be maintained
continuously during the Term of this Contract and for an additional two (2) years
after the termination or expiration of this Contract and will cover insurable losses
arising out of or in association with an error or omission in the rendering of or
failure to complete and provide the System as set out in this Contract. Coverage
under the policy will respond to, but not be limited to the following occurrences:

i. Privacy breach and violations as a result of but not limited to

unauthorized access to or wrongful disclosure or dissemination of
private information, failure to properly handle, manage, store,
destroy or control personal information and include the failure to
comply with privacy laws, the Privacy and Security Policies and
their respective regulations regarding the collection, access,
transmission, use, and accuracy. Coverage will extend to include
the costs associated with notification of affected parties, regardless
if required by statute as well as any fines or penalties or costs
imposed as a result of the breach including defense of any regulatory
action involving a breach of privacy;
ii. Network security incidents arising from System security failures
such as, but not limited to, unauthorized access, theft or destruction
of Data, electronic security breaches, denial of service, spread of
virus within the Contractor’s computer network, the System or other
third party computer information systems and will further include
expenses related to third party computer forensics;

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iii. Privacy breach expenses including crisis management related to

electronic and non-electronic breaches;
iv. Content or media liability including personal and advertising
liability, intellectual property infringement coverage (copyright,
trademark, trade name, service mark, trade dress or trade secret)
arising out of media content created, produced or disseminated by
the Contractor;
v. Coverage for delay in performance of a contract or agreement,
including this Contract, resulting from an error or omission; and
vi. Coverage for damages resulting from dishonest and criminal acts
committed by an employee of the Contractor.
(e) If coverage is to be cancelled or non-renewed for any reason, the Contractor shall
provide the City with ninety (90) day notice of said cancellation or non-renewal. The
City may request an Extended Reporting Endorsement be purchased by the Contractor
at the Contractor’s expense. The term of the Extended Reporting Endorsement will be
decided by the City and the Contractor.
(f) The Contractor shall ensure that all policies of insurance will:
i. be written with an insurer properly licensed to do business;
ii. contain an undertaking by the insurers to notify the City in writing no less than
thirty (30) days prior to any termination or cancellation of coverage unless
otherwise required by law; and
iii. be non-contributing with and will apply only as primary and not excess to any
other insurance or self-insurance available to the City.
(g) The Contractor shall be responsible for payment of all deductibles contained in any
insurance required under this Contract.

(f) the Contractor shall deliver to the City certificates of insurance evidencing renewal or
replacement of policies required under this Contract at least fifteen (15) days prior to
the expiration or replacement of the current policies without demand by the City.

(g) If the Contractor fails to maintain in force any insurance required to be maintained by
it hereunder, then the City, without prejudice to any of its other remedies, may obtain
such insurance on behalf of and at the cost of the Contractor.

(h) The Contractor and its Associates and insurer(s) hereby release the City from any and
all liability or responsibility, including anyone claiming through or under them, by way
of subrogation or otherwise for any loss or damage which the Contractor may sustain
incidental to or in any way related to the Contractor’s obligations under this Contract.

10.03 Each such policy shall contain the following cross-liability wording: “In the event of a
claim being made hereunder by one insured for which another insured is or may be liable,
then this policy shall cover such insured against whom a claim is or may be made in the
same manner as if separate policies had been issued to each insured hereunder.”

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10.04 All insurance required by this Contract shall be written on an occurrence-based policy
form, if the same is commercially available.

10.05 The Commercial General Liability policy shall be endorsed to have the general aggregate
apply to the System provided under this Contract only.

10.06 If during the term of this Contract changed conditions or other pertinent factors should, in
the reasonable judgment of the City, render inadequate the insurance limits, the Contractor
shall furnish on demand such additional coverage or types of coverage as may reasonably
be required under the circumstances. All such insurance shall be effected at the
Contractor's expense, under valid and enforceable policies, issued by insurers licensed to
conduct business in Michigan and are otherwise acceptable to the City.

10.07 All insurance policies shall name the Contractor as the insured and the City as an additional
insured. Certificates of insurance evidencing the coverage required by this Article 10 shall,
in a form acceptable to the City, be submitted to the City prior to the commencement of
the System and at least fifteen (15) days prior to the expiration dates of expiring policies.
In the event the Contractor receives notice of policy cancellation, the Contractor shall
immediately notify the City in writing.

10.08 If part of this Contract is subcontracted, the Contractor shall require each Subcontractor to
effect and maintain the types and limits of insurance set forth in this Article 10 and shall
require documentation of same, copies of which documentation shall be promptly
furnished the City.

10.09 The provisions requiring the Contractor to carry the insurance required under this Article
10 shall not be construed in any manner as waiving or restricting the liability of the
Contractor under this Contract.

Article 11. Default and Termination

11.01 This Contract shall remain in full force and effect until the end of its term unless otherwise
terminated for cause or convenience according to the provisions of this Article 11.

11.02 The City reserves the right to terminate this Contract for cause. Cause is an event of
default.

(a) An event of default shall occur if there is a material breach of this Contract, and
shall include the following:

(i) The Contractor fails to begin work in accordance with the terms of this
Contract;

(ii) The Contractor, in the judgment of the City, is unnecessarily, unreasonably,

or willfully delaying the performance and completion of the System;

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(iii) The Contractor ceases to perform under the Contract;

(iv) The City is of the opinion that the System cannot be completed within the
time provided in the “Project Plan” set forth on Exhibit A, and that the delay
is attributable to conditions within the Contractor's control;

(v) The Contractor, without just cause, reduces its work force on this Contract
to a number that would be insufficient, in the judgment of the City, to
complete the System within a reasonable time, and the Contractor fails to
sufficiently increase such work force when directed to do so by the City;

(vi) The Contractor assigns, transfers, conveys or otherwise disposes of this

Contract in whole or in part without prior approval of the City;

(vii) Any City officer or employee acquires an interest in this Contract so as to

create a conflict of interest;

(viii) The Contractor violates any of the provisions of this Contract, or disregards
applicable laws, ordinances, permits, licenses, instructions or orders of the
City;

(ix) The Contractor violates or causes there to be a violation of the Privacy and
Security Policies;

(x) The performance of the Contract, in the sole judgment of the City, is
substandard, unprofessional, or faulty and not adequate to the demands of
the task to be performed;

(xi) The performance or function of the System, in the sole judgement of the
City is substandard, faulty or not adequate;

(xii) Contractor fails in or violates any of the agreements or covenants set forth
in this Contract, or any of the warranties or representations listed in Article
3 are found to be untrue or are violated;

(xiii) The Contractor ceases to conduct business in the normal course; or

(xiv) The Contractor admits its inability to pay its debts generally as they become
due.

(b) If the City finds an event of default has occurred, the City may issue a Notice of
Termination for Cause setting forth the grounds for terminating the Contract. Upon
receiving a Notice of Termination for Cause, the Contractor shall have ten (10)
business days within which to cure such default. If the default is cured within said
ten (10) business day period, the right of termination for such default shall cease.
If the default is not cured to the satisfaction of the City, this Contract shall terminate
on the tenth calendar day after the Contractor's receipt of the Notice of Termination

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for Cause, unless the City, in writing, gives the Contractor additional time to cure
the default. If the default is not cured to the satisfaction of the City within the
additional time allowed for cure, this Contract shall terminate for cause at the end
of the extended cure period. The City shall have no obligation to pay Contractor for
any of its System performed during an extended cure period.

(c) If, after issuing a Notice of Termination for Cause, the City determines that the
Contractor was not in default, the rights and obligations of the parties shall be the
same as if the Notice of Termination had been issued as a Notice of Termination
for Convenience.

(d) The Contractor shall be liable to the City for any damages it sustains by virtue of
the Contractor's breach or any reasonable costs the City might incur in enforcing or
attempting to enforce this Contract. Such costs shall include reasonable fees and
expenses for attorneys, expert witnesses and other consultants. However, if the
Contractor makes a written offer prior to the initiation of litigation or arbitration,
then the City shall not be entitled to such attorney fees unless the City declines the
offer and obtains a verdict or judgment for an amount more than ten percent (10%)
above the amount of the Contractor's last written offer prior to the initiation of
litigation or arbitration. The City may withhold any payment(s) to the Contractor,
in an amount not to exceed the amount claimed in good faith by the City to represent
its damages, for the purpose of setoff until such time as the exact amount of
damages due to the City from the Contractor is determined. It is expressly
understood that the Contractor shall remain liable for any damages the City sustains
in excess of any setoff.

(e) The City's remedies outlined in this Article 11 shall be in addition to any and all
other legal or equitable remedies permissible.

11.03 Liquidated Damages. Any material delay by Contractor in meeting the timeline set forth
for delivery of each phase of the “Project Plan, as set forth on Exhibit A attached hereto (the
“Delivery Timeline”), will interfere with the proper implementation of the City’s programs
and will result in loss and damage to the City that would be very difficult to calculate.
Because it would be impracticable to fix the actual damage sustained in the event of any such
delay, the City and the Contractor agrees that in the event of any such delay, the amount of
damages due from the Contractor to the City will be determined as set forth in the following
section, and the parties agree that the Contractor shall pay such amounts as liquidated
damages and not as a penalty and that such amounts are reasonably related to the actual
damages that might be expected for a material delay by Contractor.

(a) If Contractor does not materially conform to the Delivery Timeline, then Contractor
shall: (i) provide a revised Delivery Timeline; and (ii) pay to the City as fixed and
agreed liquidated damages, in lieu of all other damages due to delays exclusively
caused by the Contractor, an amount of $500 per day for each calendar day between
the original Delivery Timeline and the date that Contractor materially delivers and
performs pursuant to the revised Delivery Timeline. In the event of delays in the
Delivery Time as described in this subsection 11.03(a), the Contractor shall be

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liable for fixed and agreed liquidated damages in the amount specified above in lieu
of all other damages due to such delay, but not to exceed the amount of Fifteen
Thousand and 0/100 Dollars ($15,000.00).

(b) The Contractor shall make the System available twenty-four (24) hours a day, seven
(7) days a week, and will credit the City 10% of the equivalent monthly Subscription
Fees listed in Exhibit A for each three (3) hour period for which the System is
unavailable for Use by the City in a monthly period. "Uptime" and "Downtime" is
recorded and calculated on a monthly basis and will be applied as a credit towards the
annual Subscription Fees listed in Exhibit A, for the next year. Downtime does not
include scheduled outages for software updates, server or network maintenance (which
will generally be scheduled for weekends or after midnight eastern time), notification
of which will be provided to the City's designated support contacts five (5) days in
advance. Unsuitable City operating environment, including, but not limited to,
inadequate end user computer configuration, internet connection issues or general
internet congestion issues are excluded from any Downtime calculations. Account
credits of the Contractor for any twelve (12) month period is hereby limited to a
maximum of twenty five percent (25%) of the annual Subscription Fees listed in
Exhibit A paid by the City during the prior twelve (12) month period up to the outage.
Downtime is measured from the time that a trouble ticket is registered with support
services by the City for the System being unavailable for Use or the time that the
Contractor becomes aware that the System is unavailable for Use (whichever is earlier),
to the time the problem is resolved and the System is restored. In the event that the
Contractor becomes aware that the System is unavailable for Use, the Contractor shall
notify the City immediately.

11.04If the Contractor is adjudicated bankrupt or insolvent, or if a trustee is appointed over the
Contractor or any of its property, whether it is a third party or Contractor as debtor-in-
possession (referred to as “Contractor’ in this Article unless the context clearly requires
otherwise) the following rights, obligations and limitations control:

(a) Contractor or any trustee must not assign any or all of its rights, title or interest, in
or this Contract, as this Contract is for the delivery of the System, as to which the
City is entitled to insist upon performance solely by the Contractor.

(b) Contractor or any trustee may only assume this Contract if it provides adequate
assurance of future performance. Adequate assurance of future performance means
proof reasonably satisfactory to the City of:

(i) Adequate financial capacity to employ or contract with sufficient personnel to

perform the System assigned to the Contractor as provided in this Contract, and
to pay for all System contracted for by the Contractor;
(ii) Adequate financial capacity to own, operate, lease or obtain sufficient facilities
and supplies to perform the System assigned to the Contractor as provided for
in this Contract; and

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(iii)Adequate financial and professional capacity to maintain the professional

standard provided in this Contract. The reasonable determination of the City as
to the adequate professional capacity of the Contractor is determinative.

(c) Because of the unique nature of the System this Contract requires the Contractor to
provide, the Contractor agrees that any requests by the City that the trustee or the
Contractor as debtor-in-possession assume or reject this Contract in a shorter time
than provided for in 11 U.S.C. §365 is reasonable so long as the trustee or
Contractor receives no less than 5 business days’ notice.

(d) If this Contract is terminated during bankruptcy proceedings or if the trustee or

debtor-in-possession successfully and properly obtains a court order rejecting this
Contract, the Contractor as debtor-in-possession or its trustee must cooperate with
the City in arranging for the orderly transfer of responsibilities to persons or entities
as the City may designate. The termination is not effective until the orderly transfer
of responsibilities, consistent with sound professional practices, has been
completed.

11.05Although neither party has the right to terminate the Contract merely because the other is
adjudicated bankrupt or insolvent or a trustee or a debtor-in-possession is appointed over any
parties’ property, each party retains all of the other termination rights set forth elsewhere in
this Contract during the period of any proceedings under the Bankruptcy Code of the United
States.

11.06 The Contractor must immediately inform the City of material changes in its operation,
ownership or financial condition. Material changes include, but are not limited to:

(a) Reduction or change in staffing assigned to the Contract.

(b) Decrease in, or cancellation of, insurance coverage.
(c) Delinquent payment, or nonpayment, of tax obligations.
(d) Delinquent payment, or nonpayment, of payroll obligations.
(e) Delinquent funding, or nonfunding, of pension or profit sharing plans.
(f) Delinquent payment, or nonpayment, of subcontractors.
(g) Termination of, or changes, in subcontracts.
(h) Transfer, sell, assignment or delegation to an entity other than the Contractor, of
ownership or administrative System.

11.07 The City shall have the right to terminate this Contract at any time at its convenience by
giving the Contractor five (5) business days written Notice of Termination for
Convenience. As of the effective date of the termination, the City will be obligated to pay
the Contractor the following: (a) the fees or commissions for System completed and
accepted in accordance with Exhibit A in the amounts provided for in Exhibit B; (b) the
fees for the System completed, but not completed prior to the date of termination in
accordance with Exhibit A in the amounts set forth in the Contractor’s rate schedule as
provided in Exhibit B; and (c) the Contractor's costs and expenses incurred prior to the date
of the termination for items that are identified in Exhibit B. The amount due to the
Contractor shall be reduced by payments already paid to the Contractor by the City. In no

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event shall the City pay the Contractor more than maximum price, if one is stated, of this
Contract.

11.08 After receiving a Notice of Termination for Cause or Convenience, and except as otherwise
directed by the City, the Contractor shall:

(a) Stop work under the Contract on the date and to the extent specified in the Notice
of Termination;

(b) Obligate no additional Contract funds for payroll costs and other costs beyond such
date as the City shall specify, and place no further orders on subcontracts for
material, the System, or facilities, except as may be necessary for completion of
such portion of the System under this Contract as is not terminated;

(c) Terminate all orders and subcontracts to the extent that they relate to the portion of
the System terminated pursuant to the Notice of Termination;

(d) Preserve all Records, Work Products and submit to the City such Records and Work
Products as the City shall specify, and furnish to the City an inventory of all
furnishings, equipment, and other property purchased for the Contract, if any, and
carry out such directives as the City may issue concerning the safeguarding or
disposition of files and property; and

(e) Submit within thirty (30) days a final report of receipts and expenditures of funds
relating to this Contract, and a list of all creditors, Subcontractors, lessors and other
parties, if any, to whom the Contractor has become financially obligated pursuant
to this Contract.

11.09 After termination of the Contract, each party shall have the duty to assist the other party in
the orderly termination of this Contract and the transfer of all rights and duties arising under
the Contract, as may be necessary for the orderly, un-disrupted continuation of the business
of each party.

Article 12. Assignment

The Contractor shall not assign, transfer, convey or otherwise dispose of any interest
whatsoever in this Contract without the prior written consent of the City; however, claims
for money due or to become due to the Contractor may be assigned to a financial institution
without such approval. Notice of any assignment to a financial institution or transfer of
such claims of money due or to become due shall be furnished promptly to the City. If the
Contractor assigns all or any part of any monies due or to become due under this Contract,
the instrument of assignment shall contain a clause stating that the right of the assignee to
any monies due or to become due shall be subject to prior liens of all persons, firms, and
corporations for the System as delivered or materials supplied for the performance of the
System.

Article 13. Subcontracting

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13.01 The City reserves the right to withhold approval of subcontracting such portions of the
System where the City determines that such subcontracting is not in the City's best interests.

13.02 Each subcontract entered into shall provide that the provisions of this Contract shall apply
to the Subcontractor and its Associates in all respects. The Contractor agrees to bind each
Subcontractor and each Subcontractor shall agree to be bound by the terms of the Contract
insofar as applicable to the work or the portions of the System worked on by that
Subcontractor.

13.03 The Contractor and the Subcontractor jointly and severally agree that no approval by the
City of any proposed Subcontractor, nor any subcontract, nor anything in the Contract,
shall create or be deemed to create any rights in favor of a Subcontractor and against the
City, nor shall it be deemed or construed to impose upon the City any obligation, liability
or duty to a Subcontractor, or to create any contractual relation whatsoever between a
Subcontractor and the City.

13.04 The provisions contained in this Article 13 shall apply to subcontracting by a Subcontractor
of any portion of the work related to the System included in an approved subcontract.

13.05 The Contractor agrees to indemnify, defend, and hold the City harmless against any claims
initiated against the City pursuant to any subcontracts the Contractor enters into in
performance of this Contract. The City's approval of any Subcontractor shall not relieve
the Contractor of any of its responsibilities, duties and liabilities under this Contract. The
Contractor shall be solely responsible to the City for the acts or defaults of its
Subcontractors and of each Subcontractor's Associates, each of whom shall for this purpose
be deemed to be the agent or employee of the Contractor.

Article 14. Conflict of Interest

14.01 The Contractor covenants that it presently has no interest and shall not acquire any interest,
direct or indirect, that would conflict in any manner or degree with the delivery of the
System or otherwise in connection with its performance of this Contract. The Contractor
further covenants that in the performance of this Contract no person having any such
interest shall be employed by the Contractor.

14.02 The Contractor further covenants that no officer, agent, or employee of the City and no
other public official who exercises any functions or responsibilities in the review or
approval of the undertaking or performance of this Contract has any personal or financial
interest, direct or indirect, in this Contract or in its proceeds, whether such interest arises
by way of a corporate entity, partnership, or otherwise.

14.03 The Contractor warrants (a) that it has not employed and will not employ any person to
solicit or secure this Contract upon any agreement or arrangement for payment of a
commission, percentage, brokerage fee, or contingent fee, other than bona fide employees
working solely for the Contractor either directly or indirectly, and (b) that if this warranty
is breached, the City may, at its option, terminate this Contract without penalty, liability or

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obligation, or may, at its option, deduct from any amounts owed to the Contractor under
this Contract any portion of any such commission, percentage, brokerage, or contingent
fee.

14.04 The Contractor covenants not to employ an employee of the City for a period of one (1)
year after the date of termination of this Contract without written City approval.

14.05 The Contractor shall provide a statement listing all political contributions and expenditures
(“Statement of Political Contributions and Expenditures”), as defined by the Michigan
Campaign Finance Act, MCL 169.201, et seq., made by the Contractor, its affiliates,
subsidiaries, principals, officers, owners, directors, agents or assigns, to elective City
officials within the previous four (4) years. Individuals shall also list any contributions or
expenditures from their spouses.

14.06 The Contractor’s Statement of Political Contributions and Expenditures shall be attached
to this Contract as “Exhibit C” and made a part hereof. This Contract is not valid unless
and until the Statement of Political Contributions and Expenditures is provided.

14.07 The Statement of Political Contributions and Expenditures shall be filed by the Contractor
on an annual basis for the duration of the Contract, shall be current up to and including the
date of its filing, and shall also be filed with all contract renewals and change orders, if
any.

Article 15. Confidential Information

15.01 In order that the Contractor may effectively fulfill its covenants and obligations under this
Contract, it may be necessary or desirable for the City to disclose confidential and
proprietary information, including the Data, to the Contractor or its Associates pertaining
to the City's past, present and future activities. Since it is difficult to separate confidential
and proprietary information from that which is not, the Contractor shall regard, and shall
instruct its Associates to regard, all information, including, but to limited to the Data,
gained as confidential and such information shall not be disclosed to any organization or
individual without the prior written consent of the City. The above obligation shall not
apply to information already in the public domain or information required to be disclosed
by a court order.

15.02 The Contractor agrees to take appropriate action with respect to its Associates to ensure
that the foregoing obligations of non-use and non-disclosure of confidential information
shall be fully satisfied.

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Article 16. Compliance with Laws and Privacy and Security Policies

16.01 The Contractor shall comply with and shall require its Associates to comply with all
applicable federal, state and local laws, and the Privacy and Security Policies.

16.02 The Contractor shall hold the City harmless with respect to any damages arising from any
violation of law or the Privacy and Security Policies by it or its Associates. The Contractor
shall commit no trespass on any public or private property in the performance of this
Contract. The Contractor shall require as part of any subcontract that the Subcontractor
comply with all applicable laws and regulations.

Article 17. Office of Inspector General

17.01 In accordance with Section 2-106.6 of the City Charter, this Contract shall be voidable or
rescindable at the discretion of the Mayor or Inspector General at any time if a Public
Servant who is a party to the Contract has an interest in the Contract and fails to disclose
such interest.

17.02 This Contract shall also be voidable or rescindable if a lobbyist or employee of the
contracting party offers a prohibited gift, gratuity, honoraria or payment to a Public Servant
in relation to the Contract.

17.03 A fine shall be assessed to the Contractor in the event of a violation of Section 2-106.6 of
the City Charter. If applicable, the actions of the Contractor, and its representative lobbyist
or employee, shall be referred to the appropriate prosecuting authorities.

17.04 Pursuant to Section 7.5-306 of the City Charter, the Inspector General shall investigate any
Public Servant, City agency, program or official act, contractor and subcontractor
providing goods and System to the City, business entity seeking contracts or certification
of eligibility for City contracts and person seeking certification of eligibility for
participation in any City program, either in response to a complaint or on the Inspector
General’s own initiative in order to detect and prevent waste, abuse, fraud and corruption.

17.05 In accordance with Section 7.5-310 of the City Charter, it shall be the duty of every Public
Servant, contractor, subcontractor, and licensee of the City, and every applicant for
certification of eligibility for a City contract or program, to cooperate with the Inspector
General in any investigation pursuant to Article 7.5, Chapter 3 of the City Charter.

17.06 Any Public Servant who willfully and without justification or excuse obstructs an
investigation of the Inspector General by withholding documents or testimony, is subject
to forfeiture of office, discipline, debarment or any other applicable penalty.

17.07 As set forth in Section 7.5-308 of the City Charter, the Inspector General has a duty to
report illegal acts. If the Inspector General has probable cause to believe that any Public
Servant or any person doing or seeking to do business with the City has committed or is
committing an illegal act, then the Inspector General shall promptly refer the matter to the
appropriate prosecuting authorities.

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Article 18. Amendments

18.01 The City may consider it in its best interest to change, modify or extend a covenant, term
or condition of this Contract or require the Contractor to modify the System in any manner
not described on Exhibit A. Any such change, addition, deletion, extension or modification
of System may require that the compensation paid to the Contractor by the City be
proportionately adjusted, either increased or decreased, to reflect such modification. If the
City and the Contractor mutually agree to any changes or modification of the System or
this Contract, the modification shall be incorporated into this Contract by written
Amendment.

18.02 Compensation shall not be modified unless there is a corresponding modification in the
System sufficient to justify such an adjustment. If there is any dispute as to compensation,
the Contractor shall continue to perform under this Contract until the dispute is resolved.

18.03 No Amendment to this Contract shall be effective and binding upon the parties unless it
expressly makes reference to this Contract, is in writing, is signed and acknowledged by
duly authorized representatives of both parties, is approved by the appropriate City
departments and the City Council, and is signed by the Chief Procurement Officer.

18.04 The City shall not be bound by Unauthorized Acts of its employees, agents, or
representatives with regard to any dealings with the Contractor and any of its Associates.

Article 19. Fair Employment Practices

19.01 The Contractor shall comply with, and shall require any Subcontractor to comply with, all
federal, state and local laws governing fair employment practices and equal employment
opportunities.

19.02 The Contractor agrees that it shall, at the point in time it solicits any subcontract, notify the
potential Subcontractor of their joint obligations relative to non-discrimination under this
Contract, and shall include the provisions of this Article 18 in any subcontract, as well as
provide the City a copy of any subcontract upon request.

19.03 Breach of the terms and conditions of this Article 19 shall constitute a material breach of
this Contract and may be governed by the provisions of Article 11, "Default and
Termination."

Article 20. Notices

20.01 All notices, consents, approvals, requests and other communications ("Notices") required
or permitted under this Contract shall be given in writing, mailed by postage prepaid,
certified or registered first-class mail, return receipt requested, and addressed as follows:

If to the City [DEPARTMENT NAME] Department on behalf of the City:

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NAME
TITLE
ADDRESS
PHONE
EMAIL

If to the Contractor:
NAME
TITLE
ADDRESS
PHONE
EMAIL

20.02 All Notices shall be deemed given on the day of mailing. Either party to this Contract may
change its address for the receipt of Notices at any time by giving notice of the address
change to the other party. Any Notice given by a party to this Contract must be signed by
an authorized representative of such party.

20.03 The Contractor agrees that service of process at the address and in the manner specified in
this Article 20 shall be sufficient to put the Contractor on notice of such action and waives
any and all claims relative to such notice.

Article 21. Force Majeure

No failure or delay in performance of this Contract, by either party, shall be deemed to be

a breach thereof when such failure or delay is caused by a force majeure event including,
but not limited to, any Act of God, strikes, lockouts, wars, acts of terrorism, riots,
epidemics, explosions, sabotage, breakage or accident to equipment, the binding order of
any court or governmental authority, or any other cause, whether of the kind herein
enumerated or otherwise, not within the control of a party. In the event of a dispute
between the parties with regard to what constitutes a force majeure event, the City’s
reasonable determination shall be controlling.

Article 22. Waiver

22.01 The City shall not be deemed to have waived any of its rights under this Contract unless
such waiver is in writing and signed by the City.

22.02 No delay or omission on the part of the City in exercising any right shall operate as a waiver
of such right or any other right. A waiver on any one (1) occasion shall not be construed
as a waiver of any right on any future occasion.

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22.03 No failure by the City to insist upon the strict performance of any covenant, agreement,
term or condition of this Contract or to exercise any right, term or remedy consequent upon
its breach shall constitute a waiver of such covenant, agreement, term, condition, or breach.

Article 23. Miscellaneous

23.01 If any provision of this Contract or its application to any person or circumstance shall to
any extent be invalid or unenforceable, the remainder of this Contract shall not be affected
and shall remain valid and enforceable to the fullest extent permitted by law.

23.02 This Contract contains the entire agreement between the parties and all prior negotiations
and agreements are merged into this Contract. Neither the City nor the City's agents have
made any representations except those expressly set forth in this Contract, and no rights or
remedies are, or shall be, acquired by the Contractor by implication or otherwise unless
expressly set forth in this Contract. The Contractor waives any defense it may have to the
validity of the execution of this Contract.

23.03 Unless the context otherwise expressly requires, the words "herein," "hereof," and
"hereunder," and other words of similar import, refer to this Contract as a whole and not to
any particular section or subdivision.

23.04 The headings of the sections of this Contract are for convenience only and shall not be used
to construe or interpret the scope or intent of this Contract or in any way affect the same.

23.05 This Contract and all actions arising under it shall be governed by, subject to, and construed
according to the law of the State of Michigan. The Contractor agrees, consents and submits
to the exclusive personal jurisdiction of any state or federal court of competent jurisdiction
in Wayne County, Michigan, for any action arising out of this Contract. The Contractor
also agrees that it shall not commence any action against the City because of any matter
whatsoever arising out of or relating to the validity, construction, interpretation and
enforcement of this Contract in any state, federal or foreign court of competent jurisdiction
other than one in Wayne County, Michigan.

23.06 If any Associate of the Contractor shall take any action that, if done by a party, would
constitute a breach of this Contract, the same shall be deemed a breach by the Contractor.

23.07 The rights and remedies set forth in this Contract are not exclusive and are in addition to
any of the rights or remedies provided by law or equity.

23.08 For purpose of the hold harmless and indemnity provisions contained in this Contract, the
term "City" shall be deemed to include the City of Detroit and all other associated,
affiliated, allied or subsidiary entities or commissions, now existing or subsequently
created, and their officers, agents, representatives, and employees.

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23.09 The Contractor covenants that it is not, and shall not become, in arrears to the City upon
any contract, debt, or other obligation to the City including, without limitation, real
property, personal property and income taxes, and water, sewage or other utility bills.

23.10 This Contract may be executed in any number of original counterparts, any one of which
shall be deemed an accurate representation of this Contract. Promptly after the execution
of this Contract, the City shall provide a copy to the Contractor.

23.11 As used in this Contract, the singular shall include the plural, the plural shall include the
singular, and a reference to either gender shall be applicable to both.

23.12 The rights and benefits under this Contract shall inure to the City of Detroit and its agents,
successors, and assigns.

23.13 The City shall have the right to recover by setoff from any payment owed to the Contractor
all delinquent withholding, income, corporate and property taxes owed to the City by the
Contractor, any amounts owed to the City by the Contractor under this Contract or other
contracts, and any other debt owed to the City by the Contractor.

23.14 If this Contract is grant-funded, this Contract is governed by the terms and conditions of
the grant agreement.

23.15 Any trademarks and service marks (“Trademarks”) adopted by the Contractor to identify
the Documentation and other products and services belonging to the Contractor prior to the
effective date of this Contract, shall continue to belong to the Contractor. Nothing herein
grants, or shall be construed to grant, to the City any rights to such Trademarks.

(Signatures appear on next page)

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The City and the Contractor, by and through their duly authorized officers and
representatives, have executed this Contract as follows:

CONTRACTOR

By:
Name: ______________________________
Its:

CITY OF DETROIT [DEPARTMENT]

By:
Name: ______________________________
Its:

THIS CONTRACT WAS APPROVED APPROVED BY LAW DEPARTMENT

BY THE CITY COUNCIL ON: PURSUANT TO § 7.5-206 OF THE
CHARTER OF THE CITY OF DETROIT

Date

Chief Procurement Officer Date Corporation Counsel Date

THIS CONTRACT IS NOT VALID OR AUTHORIZED UNTIL APPROVED BY RESOLUTION OF THE CITY
COUNCIL AND SIGNED BY THE CHIEF PROCUREMENT OFFICER

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Exhibit A – ____________________________ System

A.1. Notice to Proceed

The term of this Contract shall begin upon approval by the Detroit City Council, and shall
continue for a term of _______________ (_) years, unless the City exercises its option to extend
the term, as set forth below. The Contractor shall commence performance of this Contract upon
receipt of a written “Notice to Proceed” from the City and in the manner specified in the Notice to
Proceed.

The City shall have the right to extend the term of this contract for _________ (_) additional
term of _______ (_) years by providing written notice to Contractor of the City’s election to
exercise its option to extend no less than ninety (90) days prior to the expiration of the then-current
term.

A.1.2. System Objectives and General Description

THIS SECTION SHOULD INCLUDE AS MUCH OF THE REQUIREMENTS OF THE
RFP AS POSSIBLE

10. System Reporting Requirements. The System will provide:

A.1.3 System Description

The Contractor will provide the System that, at a minimum, will include the following:

A.1.4 System Deliverables

Licensing:

A2. System Overview

System Software Requirements; The System will include the following:

Hosting and Platform Requirements; The System will include the following:

Cloud Solutions. Additional particulars about the System are as follows:

Network
The System network will include:
Data Extract, Transform, and Load

A-1
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Intellectual Property The Contractor agrees to the following:

A.3 System Implementation and Project Plan

A.4 Training

A.5. System Service Levels and Support Services

A-2
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Exhibit C – Statement of Political Contributions and Expenditures

“City Charter § 4-122, ¶ 2: For purposes of conflicts of interest, the City shall require in all of its
contractual agreements, including, but not limited to, leases, service and equipment agreements and
including contract renewals, that the contractor provide a statement listing all political contributions
and expenditures (“Statement of Political Contributions and Expenditures”), as defined by the
Michigan Campaign Finance Act, MCL 169.201, et seq., made by the contractor, its affiliates,
subsidiaries, principals, officers, owners, directors, agents or assigns to elective city officials within
the previous four (4) years. Individuals shall also list any contributions or expenditures from their
spouses.”

Instructions: In accordance with Section 4-122 of the 2012 Detroit City Charter, you must
provide the following information, sign this document, have it notarized, and submit it to the
City. If additional space is needed, please enter “see additional sheet(s)” on the last row and
attach additional sheets.

In Column A, enter the name of the person or company that made the contribution or expenditure.
If there were no political contributions or expenditures made, enter NONE.
In Column B, enter the relationship of the donor to the contractor or vendor, that is, contractor,
affiliate, subsidiary, principal, officer, owner, director, agent, assignee, or spouse of any of
the foregoing who are individuals.
In Column C, enter the name of the recipient, an elective city official which under Charter § 3-107,
includes only the Mayor, the City Clerk, and members of the City Council and the Board of
Police Commissioners.
In Column D, enter the amount of the contribution or expenditure, as defined in the Michigan
Campaign Finance Act, 1976 PA 388, MCL 169.204 and MCL 169.206.
In Column E, enter the date of the contribution or expenditure. This statement must include all
contributions and expenditures within the previous four years.

A B C D E
Donor Relationship to Recipient Amount of Date
Contractor/Vendor Contribution or
Expenditure

C-1
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(EXHIBIT C - continued)
STATEMENT OF POLITICAL CONTRIBUTIONS AND EXPENDITURES

Except as set forth above, I certify that no contributions or expenditures were made to elective city officials within the
previous four (4) years by the contractor, its affiliates, subsidiaries, principals, officers, owners, directors, agents,
assigns, and, if any of the foregoing are individuals, their spouses.

I understand that the information provided in this disclosure will be relied upon by the City of Detroit in evaluating the
proposed bid, solicitation, contract, or lease. I swear [or affirm] that the information provided is accurate. If I am
signing on behalf of an entity, I swear [or affirm] that I have the authority to provide this disclosure on behalf of the
entity.

Sign name: _________________________________________

Print name: _________________________________________

Sworn and subscribed to before me on_________________________, 20____ [by____________________, the

________________________________________of the above named contractor/vendor, an authorized representative
or agent of the contractor/vendor]

Sign: _____________________________
Print: _____________________________
Notary Public, ______________ County, Michigan,
Acting in ________________________ County
My Commission Expires: ____________________

C-2
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CITY COUNCIL CONTRACT REVIEW PROCESS

Please review and provide a response for the below questions. These are only baseline questions.
Additional questions may arise during the Legislative Review Process. These
responses should be submitted along with your proposals.

Contract No.: Contract Purpose:

Question Response

1) Name of Company

2) Specify if your business is a Detroit based, or Detroit Headquartered Business. If so, please
provide the documentation along with your response.

3) What is the total number of company employees?

4) How many of those employees are Detroiters?

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IN THE FURTHER DESCRIPTION OF THIS PROPOSAL, WE SUBMIT INFORMATION

IDENTIFIED AS FOLLOWS:
BIDDING UNDER THE NAME OF:
(PRINT FULL LEGAL NAME)
(PURCHASE ORDER WILL BE ISSUED AND PAYMENT WILL BE MADE ONLY IN THE NAME ABOVE. ALL PAYMENTS
ARE TO BE MAILED. VENDOR PICK-UP OF PAYMENT IS NOT ACCEPTABLE)

MAILING ADDRESS: _________________________________________________

__________________________________________________
(ZIP CODE)

PAYMENT MAILING ADDRESS: _________________________________________________

(IF DIFFERENT FROM ABOVE) __________________________________________________

(ZIP CODE)

BUSINESS ADDRESS: _________________________________________________

(CHECK ONE): __________________________________________________

LEASE_____ RENT ____ OWN _____ (ZIP CODE)

FEDERAL EMPLOYER ID #: __________________________________________________

CHECK ONE:

( ) CORPORATION, Incorporated Under The Laws Of The State Of ______________________________

If Other Than Michigan Corporation, Licensed To Do Business In Michigan? _______YES _______NO

( ) PARTNERSHIP, Consisting of (List Partners)

_________________________________________ _________________________________________

_________________________________________ _________________________________________

( ) ASSUMED NAME (Register No.) ___________________________________________

( ) INDIVIDUAL

IF NOT SIGNED BY OFFICER OF FIRM, THE PERSON SIGNING MUST HAVE AUTHORITY TO COMMIT
THE FIRM TO THIS BID.
E-MAIL: _______________________________ AUTHORIZED SIGNATURE:
DATE __________________________________ SIGNED: ___________________________________________

TELEPHONE NO. _______________________ PRINTED___________________________________________

FAX NO.________________________________ TITLE/POSITION____________________________________

ALTERNATE COMPANY CONTACT
CELL PHONE NUMBER:__________________ _____________________________________________________
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STATEMENT OF NO BID

RFQ #19JW18544

We, the undersigned, have declined to quote on Bid No. RFQ 19JW18544 for the following reason
(s): (Check all that apply)

__________ We do not offer this product or the equivalent.

__________ Unclear description/specifications (specify below).

__________ Insufficient time to respond to the invitation to bid.

__________ Unable to meet the bond requirements.

__________ Our product schedule would not permit us to meet your needs at this time.

_________ City of Detroit payment issues (specify below).

_________ Other (specify below).

REMARKS: ___________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________

Company Name:__________________________________________________________

Signature: ___________________________________________ Date: _______________

RFQ #19JW18544 Page 2 of 5

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TERMS AND CONDITIONS

1. GENERAL CONDITIONS
It is the responsibility of the Bidder to review General Conditions. In your quotation a distinction
between dollars and cents must be made. Also, illegible bids may be grounds for rejection of your
bid. All changes made to the bid form altering, price, terms, quote and/or conditions. MUST be
crossed out and initialed. Failure to initial any changes will be grounds for rejection of your bid.
CORRECTION FLUID IS NOT ACCEPTABLE.

2. LOCAL PREFERENCE CONDITIONS

It is the responsibility of the Bidder to review the Local Preference Conditions attached to this bid
and comply with all requirements therein.

3. MINOR DEVIATIONS
Specifications referred to herein are used to indicate desired type, and/or construction, and/or
operation. Other products and/or services may be may be offered if deviations from specifications
are minor and if all deviations are properly outlined and stated in the bid document. Failure to
outline all deviations will be grounds for rejection of your bid.
The decision of the City of Detroit, acting through the Chief Procurement Officer, shall be final as
to what constitutes acceptable deviations from specifications.

4. AWARD
One award may be made as a result of this RFP, as determined by the City of Detroit based on
contractor’s ability and/or equipment as described in the specification. Blank spaces are considered
to be no offer. The City of Detroit reserves the right to delete any item(s) from the award. All
awards are subject to Ordinance No. 15-00.
5. SPECIFICATION CHECK
We have read the specifications thoroughly and we:
( ) Are able to meet specifications without deviation.
( ) All deviations are properly outlined on an attached sheet marked ________________ for
identification.
SIGNED: __________________________________________
TITLE: ___________________________________________

6. PRICE
Contract prices are FIRM for the entire contract period.

7. TERMS OF PAYMENT
A discount of _____% will be allowed for payment of invoice within forty-five (45) days of
delivery and acceptance of the above items and vendor's invoice. Other terms less than forty-five
(45) days, E,O,M., Proximo, etc., shall not be considered. Payment terms will not be considered
in determining the award of the contract(s), except in the case of tie bids. However, discounts may
be offered to facilitate prompt payment.
The City of Detroit reserves the unqualified right to reject any bid, which includes a provision for
a service charge levied by a vendor when payment by the City is not made within a specified time
period.
This paragraph supersedes paragraph 4 of the General Conditions.

RFQ #19JW18544 Page 3 of 5

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8. INVOICING:
All invoices submitted against the contract must include part or item numbers and part or item
description, list price, and applicable discount.
Items not properly invoiced will not be paid. It is the vendor’s responsibility to ensure delivery
of invoice(s) to the proper City Dept/Div/Personnel. Invoices must meet the following conditions
for payment:
a) Price on invoice must correspond to the pricing listed on purchase order and/or contract.
b) Contractor must submit price lists in accordance with bid requirements.
c) Original invoice must be submitted to the appropriate City of Detroit Account’s Payable
Section.
Copy of invoice must be submitted to the department personnel identified on the purchase order
as being responsible for processing payment. If a department contact person is not listed on the
purchase order the vendor shall request in writing, from the Purchasing Division the name and
phone number of the contact person responsible for processing payment.

9. F.O.B.
Goods are to be F.O.B. delivered to location(s) within the City of Detroit and other specified
locations as indicated.

10. CONTRACT ACCEPTANCE

The successful bidder shall be notified of the execution of a contract by the City of Detroit upon
issuance of a "Contract Award Notice" or a Purchase Order. The "Contract Award Notice" shall
contain the date the contract award was approved.
The signed, accepted bid of the successful bidder will be the contract between the bidder and the
City of Detroit, containing the full description of all contractual terms and conditions. A copy of
your signed bid will not be mailed to you. Each bidder shall keep a copy of his/her signed bid form
for future reference.

11. CLEARANCES
The successful vendor will be required to obtain approved clearances from the Income Tax
Division, Revenue Collections Division and Human Rights Department prior to City Council
approval of the contract. Clearance forms for these agencies have been attached to this RFQ. Please
fill them out completely and return them to the respective agencies by mail, fax, or dropping them
off to the individual offices. It is the Vendor’s responsibility to obtain clearances. Approved
clearances are not required to submit the bid, but will be required of the successful vendor prior to
City Council approval.

12. BID WITHDRAWAL

No bid shall be withdrawn for 90 days from submission deadline. Bidders may reduce this period
if stated on bid, but such bids may be rejected on the basis of the reduced time period.

This paragraph supersedes paragraph 14 of the General Conditions.

13. EQUALIZATION FACTOR

In accordance with Ordinance No. 15-00, any Detroit based firm shall be deemed a better bid than
the bid of any competing firm which is not Detroit-based, whenever the bid of such competing firm
shall be equal to or higher than the bid of the Detroit-based firm after the appropriate equalization
percentage credit from the Equalization Allowance Table has been applied to the bid of the Detroit-
based firm. The firm making the lowest bid thus evaluated shall be deemed the lowest bidder.
Vendors who wish to receive Equalization credit for bids submitted must fill out the attached
Equalization Eligibility Form and return it with their bid document along with any supporting

RFQ #19JW18544 Page 4 of 5

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documentation required to substantiate eligibility. The Equalization Eligibility Form and

supporting documentation must be submitted with each and every bid response submitted by the
vendor. Failure to return the Equalization Eligibility Form and/or Affidavit along with required
documentation will result in equalization credit not being applied to your bid.

14. ENVIRONMENTALLY FRIENDLY GOODS/COOPERATIVES:

This bid solicitation includes the City of Detroit’s preference for environmentally preferred goods
and services where applicable. It also is the intention of the City to utilize and compare responses
to this bid to available cooperative purchases resources. For a complete explanation refer to
Chapter 18 of the 1984 Detroit City Code, Finance and Taxation, Article V, Purchases and
Supplies, Division 1, Goods and Services.

 MiDeal
 U.S. General Services Administration (GSA)
 Western States Contracting Alliance
 National Intergovernmental Purchasing Alliance (IPA)
 National Joint Powers Alliance (NJPA)
 U.S. Communities

15. REJECTIONS, MODIFICATIONS, CANCELLATIONS

The City of Detroit expressly reserves the right to: l) accept or reject, in whole or in part any and
all quotes received; 2) waive any non-conformity; 3) re-advertise for quotes; 4) withhold the award
for any reason the City determines; 5) cancel and/or postpone the request for quotes, in part or in
its entirety, and/or, 6) take any other appropriate action that is in the best interest of the City. This
RFQ does not commit the City of Detroit to award a contract, to pay any cost incurred in the
preparation of the quotes under this request, or to procure or contract for services.

RFQ #19JW18544 Page 5 of 5

EXECUTION COPY

GUNSHOT DETECTION SERVICES CONTRACT

BETWEEN

CITY OF DETROIT, MICHIGAN

AND

SHOTSPOTTER, INC.

CONTRACT NO.
6003161

1
Article 1. Definitions and Exhibits ................................................................................................ 3
Article 2. Engagement of Contractor and Subscription Services Obligations of the Contractor ......... 6
Article 3. License ............................................................................................................................ 8
Article 4. Contractor's Representations and Warranties ............................................................ 12
Article 5. Contract Effective Date and Time of Performance ................................................... 15
Article 6. Records, Work Products and Data City Obligations ................................................. 15
Article 7. Contractor Personnel and Contract Administration ................................................... 16
Article 8. Compensation and Security ......................................................................................... 17
Article 9. Maintenance and Audit of Records ..........................................................................177
Article 10. Indemnity and Limitation of Liability ......................................................................188
Article 11. Insurance ...................................................................................................................... 21
Article 12. Default and Termination............................................................................................233
Article 13. Assignment .................................................................................................................267
Article 14. Subcontracting ............................................................................................................. 27
Article 15. Conflict of Interest .....................................................................................................288
Article 16. Confidential Information and Proprietary Rights ...................................................... 29
Article 17. Compliance with Laws ............................................................................................... 30
Article 18. Office of Inspector General ......................................................................................... 30
Article 19. Amendments ................................................................................................................ 32
Article 20. Fair Employment Practices ......................................................................................... 32
Article 21. Notices .......................................................................................................................... 32
Article 22. Force Majeure .............................................................................................................. 33
Article 23. Waiver .......................................................................................................................... 33
Article 24. Miscellaneous............................................................................................................... 33
Article 25. Invoice Submission and Payment ............................................................................... 35
Article 26. Board of Ethics............................................................................................................. 35
Exhibit A – Subscription Services .................................................................................................. A-1
Exhibit B – Fee Schedule .................................................................................................................B-1
Exhibit C – Statement of Political Contributions and Expenditures .............................................C-1

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 CITY OF DETROIT
GUNSHOT DETECTION SERVICES CONTRACT

This Gunshot Detection Services Contract is entered into by and between the City of
Detroit, a Michigan municipal corporation, acting by and through its Police Department, and
ShotSpotter, Inc., a corporation organized under the laws of Delaware, with its principal place of
business located at 7979 Gateway Blvd., Suite 210, Newark, California 94560.

Recitals:

Whereas, the City desires to engage the Contractor to deliver the Subscription Services as
set forth in this Contract; and

Whereas, the Contractor desires to provide the Subscription Services as set forth in this
Contract;

Accordingly, the parties agree as follows:

Article 1. Definitions and Exhibits

1.01 The following Capitalized words and expressions or pronouns used in their stead and as
used in this Contract shall have the following meanings:

"Amendment" means modifications or changes in this Contract that have been mutually
agreed upon by the City and the Contractor in writing and approved by the City Council.

"API” means application programing interface, which is a software intermediary that

allows two applications to communicate.

“Associates" means the personnel, employees, consultants, subcontractors, agents, and

parent company of the Contractor or of any Subcontractor, now existing or subsequently
created, and their agents and employees, and any entities associated, affiliated, or
subsidiary to the Contractor or to any subcontractor, now existing or subsequently created,
and their agents and employees.

"City" means the City of Detroit, a Michigan Municipal Corporation, acting through the
office or department named in the Contract as contracting for the Subscription Services on
behalf of the City.

"City Council" means the legislative body of the City.

“Contract" means each of the various provisions and parts of this document, including all
attached Exhibits and all Amendments, if any, as executed and approved by the appropriate
City departments or offices and by the City Council.

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"Contractor" means ShotSpotter, Inc., a corporation organized under the laws of Delaware
and authorized to do business in the State of Michigan.

“Coverage Area” means the area in square miles within the City of Detroit, Michigan
covered by the Subscription Services as set forth in Exhibit A.

“Data” means any and all information, including, but not limited to Personal Information,
if any, supplied by the City to the Contractor, any of the City’s information accessed or
used by the Contractor in connection with the Subscription Services or performance of this
Contract, and any other information gathered by, uploaded or transmitted to or stored
within the Subscription Services by the City. All Data is owned exclusively by the City.

“Data Storage” means the online electronic secure storage of Data during the Use of the
Subscription Services.
“Documentation” means any and all printed or electronic guides and manuals, including
sales, marketing and training materials provided by the Contractor for the authorized Use
of the Subscription Services.
“DPD” the City’s Police Department.

“Exhibit A” is the complete and detailed description of the Subscription Services.

"Exhibit B” is the Fee Schedule for this Contract and sets forth the amount of compensation
to be paid to the Contractor, including any Reimbursable Expenses.

"Exhibit C" is the Contractor’s Statement of Political Contributions and Expenditures.

“Investigator Portal” means the internet portal to which the City will have access to
Reviewed Alerts.

“PSAP” means the DPD’s call center where emergency calls initiated by any mobile or
landline subscriber is terminated.

“Personal Information” means information which relates to an identified or identifiable

individual, and includes any information defined from time to time as “personal
information” under applicable state or federal privacy legislation.

“Public Servant" means the Mayor, members of City Council, City Clerk, appointive
officers, any member of a board, commission or other voting body established by either
branch of City government or the City Charter, and any appointee, employee or individual
who provides services to the City within or outside of its offices or facilities pursuant to a
personal services contract.”

“Records" means all books, ledgers, journals, accounts, documents, and other collected
Data in which information is kept regarding the performance of this Contract and the
function of the Subscription Services.

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"Reimbursable Expenses" means only those costs incurred by the Contractor in the
performance of the Subscription Services, such as travel costs and document reproduction
costs that are identified in Exhibit B as reimbursable.

“Request for Proposals or RFP” means the City’s Solicitation 19JW18544, published
March 27, 2020.

“Reviewed Alerts” means the data reviewed by the Contractor’s incident review staff
related to gunfire incidents detected by the Subscription Services.

“Secure Sockets Layer” or “SSL” means the standard security technology for establishing
an encrypted link between a web server and a browser. This link ensures that all Data and
any other information in the Subscription Services remains private and integral. To be able
to create an SSL connection a web server requires an SSL Certificate.

“Sensors” means Contractor’s acoustic sensors that detect gunshot-like sounds and will be
installed by Contractor in the Coverage Area.

“Software” means the software embedded within the Contractor’s Subscription Services
including, Reviewed Alerts, ShotSpotter Respond™ and ShotSpotter Dispatch™
applications, and ShotSpotter® Investigator Portal user interface to which the City will
have access under this Contract on the Subscription basis.

“SQL Server” means the relational database management system developed and owned by
the Microsoft Corporation for storing and retrieving data as requested by other software
applications which may run either on the same computer or on another computer across a
network, including the Internet.

"Subcontractor" means any person, firm or corporation, other than employees of the
Contractor that contracts with the Contractor, directly or indirectly, to perform in part or
assist the Contractor in achieving the objectives of this Contract.

"Subscription” means the period for which the City is authorized to use the Subscription
Services, as set forth on Exhibit A.

“Subscription Services" means the Gunshot Detection Services provided by the

Contractor’s “ShotSpotter Gunshot Detection, Location, and Forensic Analysis Service”
and the Software provided to the City by the Contractor on a Subscription basis, including
all necessary hardware and software, as more precisely and completely defined in Exhibit
A and otherwise pursuant to the terms and conditions of this Contract.

“Unauthorized Acts" shall mean any acts by a City employee, agent or representative that
are not set forth in this Contract and have not been approved by City Council as part of this
Contract.

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 "Use” shall mean the ability for the City to login with user name and password and access
the Subscription Services via the internet and conduct business on the Subscription
Services as described in Exhibit A.

“Work Product" shall mean the originals, or copies when originals are unavailable, of all
materials prepared by the Contractor under this Contract or in anticipation of this Contract,
including but not limited to the Data, Data Schemas, studies, briefs, drawings, maps,
models, photographs, files, records, computer printouts, estimates, memoranda,
computations, papers, supplies, notes, recordings, and videotapes, whether such materials
are reduced to writing, magnetically or optically stored, or kept in some other form. For
clarification, Work Product shall not include Contractor’s intellectual property.

Article 2. Engagement of Contractor and Subscription Services Obligations of the

Contractor

2.01 By this Contract, the City engages the Contractor and the Contractor hereby agrees to
provide the Subscription Services set forth in Exhibit A, in accordance with the terms and
conditions contained in this Contract. The City acknowledges that the Contractor’s ability
to perform its obligations under this Contract are predicated and conditioned upon the
City’s timely performance of, and compliance with the City’s obligations in this Contract.

2.02 The Contractor and the Subscription Services shall perform in a satisfactory manner as
shall be determined within the sole and reasonable discretion of the City. In the event that
there shall be any dispute between the parties with regard to the extent, character and
progress of the Subscription Services to be provided or the quality of performance under
this Contract, the interpretation and determination of the City shall govern.

2.02 The Contractor shall confer as necessary and cooperate with the City in order that the
implementation of the Subscription Services may proceed in an efficient and satisfactory
manner. The Contractor must attend all conferences, consultations and public hearings or
appearances deemed necessary by the City to ensure that the Contractor will be able to
properly and fully perform the objectives as set forth in this Contract.

2.03 The Subscription Services are subject to the review, approval and acceptance of the City
for completeness and fulfillment of the requirements of this Contract. Neither the City's
review, approval nor payment for any of the amounts listed on Exhibit B, including, but
not limited to the Subscription fees, shall be construed to operate as a waiver of any rights
under this Contract, and the Contractor shall be and will remain liable in accordance with
applicable law for all damages to the City caused by the Contractor's incorrect performance
or nonperformance of the Subscription Services furnished under this Contract.

2.04 The City and the Contractor expressly acknowledge their mutual understanding and
agreement that there are no third party beneficiaries to this Contract and that this Contract
shall not be construed to benefit any persons other than the City and the Contractor.

2.05 In addition to any other rights granted to the City under this Contract or by operation of
law, Contractor hereby grants the City a perpetual, royalty free license to Work Product for

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 unlimited use by the City for any lawful purpose. During the term of this Contract the
Contract shall provide the City access to Work Product immediately upon the City’s
request. Upon its termination of this Contract the Contractor shall deliver or provide
immediate access to the City to the Work Product. This covenant shall survive the
termination of this Contract.

2.06 The City agrees that the Contractor may use and disclose the “City of Detroit, Michigan”
in its marketing material with prior written approval of the City, which will not be
unreasonably withheld.

2.07 The City shall be entitled to provide the Contractor with information and feedback
concerning the Subscription Services functional requirements and product definition which
are not addressed in Exhibit A and which the Contractor shall consider when formulating
the product development roadmap and plans. This co-operative process between
Contractor and the City does not create any ownership interest on the part of the City in
the products so developed by the Contractor should the Contractor determine in its sole
discretion to incorporate any of the City’s suggestions into the development plan or
ultimately into the Subscription Services.

2.08 At the City’s request, on March 1, June 1, September 1 and January 1, of each calendar
year during the term of this Contract, the Contractor shall provide “Call Center
Performance Reports” to the City which shall contain the number of calls for service, the
level of urgency of the call and whether the problem was resolved on the call.

2.09 The Contractor will install the Subscription Services in the Coverage Area. The Contractor
will host the Subscription Services and may update the functionality and Software of the
Subscription Services from time to time at its sole discretion and in accordance with this
Contract.

2.03 The Contractor will be responsible for determining the location(s) for installation of the
Sensors in the Coverage Area, and obtaining permission from the premises owner/property
manager/lessee, if any.

2.10 The Sensors may use wired, wireless, or cellular wireless communications which
necessitates the existence of a real- time data communications channel from each Sensor to
the Contractor’s hosted servers via a commercial carrier. The unavailability or deterioration
of the quality of such wired, wireless, or wireless cellular communications may impact the
ability of the Contractor to provide the Subscription Services. In such circumstances the
Contractor will use commercially reasonable efforts to obtain alternate wired or wireless
cellular communications or adjust the coverage area as necessary. In the event the
Contractor is unable to do so, the Contractor will terminate the Subscription Services and
refund a pro-rata portion of the annual Subscription fee to the City.

2.11 The Contractor will provide the City with user Documentation, online help, online training
presentation, and online training sessions as described on Exhibit A.

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2.12 The Contractor will provide reasonable efforts to respond via email to requests for support
relating to incident classification within eight (8) hours of the request.

2.13 During the term of this Contract, the Contractor will provide real-time gunfire analysis and
alert services. After an explosive (or impulsive) sound triggers enough of the Sensors that
an incident is detected and located, audio from the incident is sent to the Subscription
Services’ ShotSpotter Incident Review Center (IRC) via secure, high-speed network
connections for real-time qualification. Within seconds, a Contractor professional reviewer
analyzes audio data and recordings to confirm gunfire or explosions. The qualified alert is
then sent directly to the City’s dispatch center, PSAP, mobile/patrol officers, and any other
relevant safety or security personnel, as determined by the City. The IRC will review
gunfire incidents as further defined in the Contractor’s service level agreements set forth
in Exhibit A.

2.14 The Subscription Services provided under this Contract shall include (i) the City’s access to
the Reviewed Alerts delivered via the Investigator Portal password-protected internet
portal and user interface supplied by the Contractor; (ii) the City’s access to historical
Reviewed Alerts and incident information via the Software; and (iii) other services as
specified in this on Exhibit A.
2.16 The Contractor will assist the City in initially setting up passwords and user names for the
City’s employees, agents, or representatives to whom the City designates access to the
Subscription Services (“Authorized Users”). Thereafter, the City shall be responsible for
assigning passwords and user names for its Authorized Users. The City shall be responsible
for maintaining the confidentiality and use of the City’s password and user names and shall
not allow passwords and/or user names to be shared by Authorized Users; nor shall the
City permit any unauthorized users to access the Subscription Services.

2.17 The Contractor shall comply with all applicable laws, rules and regulations relating to the
Subscription Services provided hereunder.

Article 3. License

3.01 In consideration for and subject to the payment of the annual Subscription fees as set forth
in Exhibit B, the Contractor hereby grants the City a non-transferrable, non-exclusive and
terminable license (“License”) to use the Subscription Services as set forth in this Article 3.

3.02 The City shall have the unrestricted right to download, make copies of, distribute, and use
the Subscription Services reports and other information generated by the Subscription Services
within its own organization, exclusively for its own internal purposes, and for purposes of
detecting and locating gunfire, routine archival recordkeeping, evidence preservation, and
investigative, or evidentiary, and prosecutorial purposes.

3.03 The City shall not provide to, license the use of, or sell any of the reports or other information
generated by the Subscription Services to any third parties, provided however, the City may
use such information and reports generated by the Subscription Services to collaborate with
other law enforcement agencies for the purposes of investigating and prosecuting crimes

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 detected by the Subscription Services.

3.04 License and Restrictions. The Subscription Services and the Software is the proprietary
product of the Contractor, licensed to the City a Subscription basis. The Software may
incorporate components supplied to the Contractor under license by third party suppliers,
and may be protected by United States patent, trade secret, copyright law and international
treaty provisions. All such rights in and to the Software and Subscription Services any part
thereof are the property of the Contractor or, if applicable, its suppliers. All right and title
to the Contractor’s computer programs, including, but not limited to related documentation,
technology, know-how and processes embodied in or made available to the City in
connection with the Subscription Services, patent rights, copyrights, trade secret rights,
trademarks, and services marks remain with the Contractor. The City may not make any
copies of the written materials or Documentation that accompany any component of the
Software, or use them, or any other information concerning the Subscription Services that
the Contractor has designated as confidential, for any purpose other than bona fide use of the
Subscription Services or Software for in accordance with the terms of this Contract, nor
allow anyone else to do so. Except as otherwise provided in this Contract, the City shall not:
(i) modify, adapt, alter, translate, copy, perform, or display (publicly or otherwise) or create
compilations, derivative, new, or other works based, in whole or in part, on the Software,
or on the Subscription Services; (ii) merge, combine, integrate, or bundle the Software, in
whole or in part, with other software, hardware, data, devices, systems, technologies,
products, services, functions, or capabilities; (iii) transfer, distribute, make available the
Subscription Services, or Software to any person other than employees of the City; or (iv)
sell, resell, sublicense, lease, rent, or loan the Subscription Services or Software, in whole
or in part. No component of the Subscription Services, or Software may be used to operate
a service bureau, rental or time-sharing arrangement.

3.05 Restrictions of Contractor’s Use of Data.

Contractor shall have the right to use the Data, excluding any Personal Information, for
internal research or product development. Contractor may provide the Data on an
aggregated basis to third parties (excluding press or media, or insurance carriers) to be used
for research or analytical purposes, or for law enforcement and/or security purposes,
subject to the City’s prior written consent as provided below.
Contractor may not and will not release or disseminate to any person or entity any Data,
for any purpose, including, but not limited or related to or consisting of specific forensic
or law enforcement sensitive incident information pertaining to any active inquiry,
investigation, or prosecution, unless in response to a valid order or subpoena issued by a
court or other governmental body, or as otherwise required by law. Contractor shall receive
the written consent from the City prior to any release of the Data; provided however, the
Contractor shall simply notify the City of its release of any Data pursuant to a court order
or subpoena.
Contractor may not and will not release, sell, license, or otherwise distribute the Data to
the press or media or any other entity, without the prior express written consent of an
authorized representative of the City, which consent shall not be unreasonably withheld.

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 Within sixty (60) days of the termination of this Contract, the Contractor will delete all
user account information and will use commercially reasonable efforts to delete Data, The
Contractor will deactivate the Sensors installed in the Coverage Area, rendering the
Sensors inoperable. The Contractor will certify in writing to the City that all Sensors have
been deactivated and will remain deactivated.
The requirements set forth in this Section 3.05 shall survive the termination of this
Contract.
3.06 Nothing in this Contract shall be construed as granting any ownership right or title to the
Software the Subscription Services or any component thereof, or any other intellectual
property of the Contractor or its suppliers to the City.
3.07 The City shall not alter, remove or obscure any copyright, patent, trademarks, confidential,
proprietary, or restrictive notices or markings on any component of the Subscription
Services, Software or any Documentation.
3.08 The City acknowledges that the Subscription Services have been determined by the United
States Department of State to be a controlled commodity, software and/or technology
subject to the United States Export Administration Regulations of the U.S. Department of
Commerce. The City is specifically prohibited from the export, or re-export, transfer,
consignment, shipment, delivery, downloading, uploading, or transmitting in any form, any
Software, Documentation, or any component thereof or underlying information or
technology related thereto, to any third party, government, or country for any end uses
except in strict compliance with applicable U.S. export controls laws, and only with the
express prior written agreement of the Contractor. In the event that such written agreement
is provided, the City shall be responsible for complying with all applicable export laws and
regulations of the United States and destination country, including, but not limited to the
United States Export Administration Regulations of the U.S. Department of Commerce,
including the sanctions laws administered by the U.S. Department of Treasury, Office of
Foreign Assets Control (OFAC), the U.S. Anti-Boycott regulations. In this respect, no
resale, transfer, or re-export of any components of the Subscription Services exported to
the City pursuant to a license from the U.S. Department of Commerce may be resold,
transferred, or reported without prior authorization by the U.S. Government. The City
agrees not to export, re-export or engage in any “deemed export,” or to transfer or deliver,
or to disclose or furnish, to any foreign (non- U.S.) government, foreign (non- U.S.) person
or third party, or to any U.S. person or entity, any of the Subscription Services’
components, Software, or any technical data or output data or direct data product thereof,
or any service related thereto, in violation of any such restrictions, laws or regulations, or
without all necessary registrations, licenses and or approvals. The City shall bear all
expenses relating to any necessary registrations, licenses or approvals.
3.9 In addition to the foregoing, the City shall not disclose, discuss, download, ship, transfer,
deliver, furnish, or otherwise export or re-export any such item(s) to or through: (a) any
person or entity on the U.S Department of Commerce Bureau of Industry and Security’s
List of Denied Persons or Bureau of Export Administration’s anti-proliferation Entity List;
(b) any person on the U.S. Department of State’s List of Debarred Parties; (c) any person
or entity on the U.S. Treasury Department Office of Foreign Asset Control’s List of
Specially Designated Nationals and Blocked Persons; or (d) any third party or for any end-

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 use prohibited by law or regulation, as any and all of the same may be amended from time
to time, or any successor thereto.
3.10 Upon reasonable notice to the City, the Contractor reserves the right at its discretion to
modify, temporarily or permanently, the Subscription Services (or any part thereof). In the
event that the Contractor modifies the Subscription Services in a manner which removes
or disables a feature or functionality on which the City materially relies, at The City’s
request, the Contractor shall use commercially reasonable efforts to restore such
functionality to the City. In the event that the Contractor is unable to substantially restore
such functionality, the City shall have the right to terminate this Contract and receive a pro-
rata refund of the annual Subscription Services fees paid under the Contract for the
Subscription term in which this Contract is terminated.
3.11 No Use by Third Parties. Use by anyone other than the City of the Subscription Services
and Documentation, is prohibited, unless pursuant to a valid assignment of this Contract as
set forth in Article 13 of this Contract.
3.12 The City shall not permit any alteration, modification, substitution, or supplementation of
the Subscription Services or web portal, or the combining, connection, merging, bundling,
or integration of the Subscription Services or web portal into or with any other system,
equipment, hardware, software, technology, function, or capability, without the
Contractor’s express prior written consent, which consent shall not be unreasonably
withheld.
3.13 Unless otherwise expressly agreed in advance in writing by the Contractor, the City shall
not authorize or appoint any contractors, subcontractors, original equipment
manufacturers, value added integrators, systems integrators, or other third parties to
operate, or have access to any part of the Subscription Services.
3.14 In order to use the Subscription Services, the City must have and maintain access to the
World Wide Web to enable a secure https connection from the City’s workstation(s) to
Subscription Services, either directly or through devices that access Web-based content. The
City must also provide all equipment necessary to make and maintain network connections
such as Internet connections
3.15 The Contractor will assist the City in initially setting up passwords and user names for the
City’s employees, agents, or representatives to whom the City designates access to the
Subscription Services (“Authorized Users”). Thereafter, the City shall be responsible for
assigning passwords and user names for its Authorized Users. The City shall be responsible
for maintaining the confidentiality and use of the City’s password and user names and shall
not allow passwords and/or user names to be shared by Authorized Users; nor shall the
City permit any unauthorized users to access the Subscription Services.
3.16 The City shall not directly, or indirectly through any third parties engaged by the City,
disassemble, decompile, or otherwise reverse engineer or attempt to reconstruct, derive, or
discover any source code, underlying ideas, algorithms, formulae, routines, file formats,
data structures, programming, routines, interoperability interfaces, drawings, or plans from
the Software, or any data or information created, compiled, displayed, or accessible
through the Subscription Services, in whole or in part.
3.17 The provisions of this Article 3 shall survive the termination or rescission of this Contract.

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 Article 4. Contractor's Representations and Warranties

4.01 To induce the City to enter into this Contract, the Contractor represents and warrants that
the Contractor is authorized to do business in the State of Michigan and is duly qualified
to provide the Subscription Services as set forth in this Contract, and that the execution of
this Contract is within the Contractor's authorized powers, is not in contravention of
federal, state or local law, and will not cause a breach of any other contract to which the
Contractor is a party.

4.02 The Contractor makes the following representations and warranties specifically in
connection with the Subscription Services:

(a) The Subscription Services shall perform according to the specifications and
representations set forth in Exhibit A and the Documentation provided by the
Contractor to the City;

(b) The Contractor has the full and unencumbered rights and powers to grant the City
access to and permission to Use the Subscription Services, including all upgrades,
updates, improvements, modifications, enhancements or customizations, and
including any third party components and platforms embedded in the Subscription
Services, and the rights granted herein will not violate the terms of any of its
agreements with any third party;

(d) The Contractor’s execution, delivery, and performance of this Contract will not
constitute a violation of any judgment, order or decree, a default under any
agreement by which it or any of its assets are bound or an event that would, with
notice or lapse of time, constitute such a default;

(e) The Subscription Services and Software are free of any software, programs or
routines, commonly known as "disabling code," that are designed to cause the
Subscription Services to be destroyed, damaged, or otherwise made inoperable in
the course of the City’s Use of the Subscription Services, or any viruses, spyware,
or malware;

(f) The Subscription Services and the Software are free of any known or reasonably
discoverable computer program, code or set of instructions, commonly known as a
"computer virus," that is not designed to be a part of the Subscription Services and
that, when inserted into the computer’s memory: (i) duplicates all or part of itself
without specific user instructions to do so, or (ii) erases, alters or renders unusable
any data or the Subscription Services, with or without specific user instructions to
do so, or (iii) that provide unauthorized access to the Subscription Services;

(g) The Subscription Services are free of any spyware and malware;

(h) The Subscription Services shall:

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 (1) Accurately recognize and process all time and date data including, but not
limited to, daylight savings time and leap year information, and
(2) Use accurate same-century, multi-century, and similar date value formulas
in its calculations, and use date interface values that accurately reflect the
correct time, date and century.

(i) All Data shall be and remain the sole and exclusive property of the City. Contractor
shall treat all Data as confidential information. Except as set forth in Article 3, the
Contractor will be provided access to the Data for the sole and exclusive purpose of
performing its obligations under this Contract. Contractor is prohibited from disclosing
any Data to any third party without specific written approval from the City, except as
set forth in Article 3, Section 3.05. Contractor will have no property interest in, and
may assert no lien on or right to withhold Data from the City.

(j) The Contractor has developed an Information Security Policy based on NIST 800-53
which has been adopted by the Contractor’s Board of Directors. Contractor is taking
steps to ensure compliance, which the Contractor expects to complete in 2022.

(k) The Contractor will allow the City to perform audits of the Contractor’s compliance
with the Contractor’s Information Security Policy. Any such audit shall be conducted
by a mutually agreed upon third party, at City’s expense, and following no less than
ninety (90) days prior written notice.

(l) The Subscription Services, the City’s access to the Subscription Services, the City’s
Use of the Subscription Services or the Documentation, and the Contractor’s
performance of this Contract do not and will not conflict with, infringe upon or violate,
the intellectual property rights of any other person or legal entity. In the event of a third
party claim of infringement by the Subscription Services, Contractor will defend and
indemnify the City in accordance with the provisions set forth in Article 10, section
10.3.

(m) The Subscription Services, the City’s access to the Subscription Services, the City’s
Use of the Subscription Services or the Documentation, and the Contractor’s
performance of this Contract are not alleged by any person to conflict with, infringe
upon or violate, the intellectual property rights of any other person or legal entity.

(n) There are no existing or threatened legal proceedings brought against the Contractor in
respect of the Subscription Services, the Documentation, or the Contractor’s right to
grant others the right to access and use the Subscription Services, or the
Documentation. Should the Contractor become aware of any such conflict,
infringement or violation or potential conflict, infringement or violation, the Contractor
will notify the City immediately.

(o) The Documentation is complete and will allow the City to access and use the
Subscription Services.

(p) The Contractor will meet the following data-related system requirements:

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 (i) As defined in Exhibit A, section A.6, the City shall be able to receive gunfire
incident data, associated metadata, and reasonably granular subsets thereof,
as well as any associated files or attachments, from the Subscription
Services in a useable, encrypted format.

(ii) Upon termination of this Contract, the Contractor shall delete all City user
account information.

(iii) During the term of this Contract, the Contractor has and shall have the
ability to retain gunfire incident Data in a manner that is searchable and
capable of compliance with applicable records retention laws and best
practices.

(iv) At no time may Contractor suspend or terminate City’s access to any Data
or the Subscription Services for breach of contract without giving the City
at least thirty (30) days’ notice and opportunity to cure according to the
City’s dispute resolution process.

4.03 The Subscription Services are not designed, sold, or intended to be used to detect, intercept,
transmit, or record oral or other communications of any kind. The Contractor cannot
control how the Subscription Services are used, and, accordingly, other than the City’s Use
in accordance with the Documentation and this Contract, the Contractor does not warrant
or represent, expressly or implicitly, that any other use of the Subscription Services will
comply or conform to the requirements of federal, state, or local statutes, ordinances, and
laws, or that any other use of the Subscription Services will not violate the privacy rights
of third parties. The City hereby agrees that it will Use the Subscription Services in full
compliance with this Contract, including the Documentation.

4.04 The Contractor does not warrant or represent, expressly or implicitly, that the Software or
Subscription Services or its use will: result in the prevention of crime, apprehension or
conviction of any perpetrator of any crime, or detection of any criminal; prevent any loss,
death, injury, or damage to property due to the discharge of a firearm or other weapon; in
all cases result in a Reviewed Alert for all firearm discharges within the designated
coverage area; or that the Contractor-supplied network will remain in operation at all times
or under all conditions.

4.05 The Contractor expressly disclaims, and does not undertake or assume any duty, obligation,
or responsibility for any decisions, actions, reactions, responses, failure to act, or inaction,
by the City as a result of or in reliance on, in whole or in part, any Subscription Services or
Reviewed Alerts provided by the Subscription Services, or for any consequences or
outcomes, including any death, injury, or loss or damage to any property, arising from or
caused by any such decisions, actions, reactions, responses, failure to act, or inaction. It shall
be the sole and exclusive responsibility of the City to determine appropriate decisions,
actions, reactions, or responses, including whether or not to dispatch emergency responder
resources.

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4.06 The Parties acknowledge and agree that the Subscription Services is not a consumer good,
and is not intended for sale to or use by or for personal, family, or household use.

4.07 EXCEPT AS EXPRESSLY SET FORTH IN THIS ARTICLE 4, THE

CONTRACTOR MAKES AND THE CITY RECEIVES NO OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITATION ANY WARRANTIES OF QUALITY, SUITABLITY,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

Article 5. Contract Effective Date and Time of Performance

5.01 This Contract shall be approved by the required City departments, approved by the City
Council, and signed by the City’s Chief Procurement Officer. The effective date of this
Contract shall be the date upon which the Contract has been approved by resolution of the
City Council.

5.02 Prior to the approvals set forth in Section 5.01, the Contractor shall have no authority to
begin work on this Contract. The Chief Financial Officer shall not authorize any payments
to the Contractor, nor shall the City incur any liability to pay for the Subscription Services
or to reimburse the Contractor for any expenditure, prior to such award and approvals.

5.03 The City and the Contractor agree that the commencement and duration of the Contractor's
performance under this Contract shall be determined as set forth in Exhibit A.

5.04 The City and the Contractor agree that the City shall have the right to extend the term of
this Contract on the terms and conditions contained herein, as set forth in more detail on
Exhibit A.

Article 6. Records, Work Products and Data City Obligations

6.01 In order to use the Subscription Services, the City must have and maintain access to the
World Wide Web to enable a secure https connection from the City’s workstation(s) to
Subscription Services, either directly or through devices that access Web-based content.
The City must also provide all equipment necessary to make and maintain network
connections such as Internet connections.

6.02 The City agrees to use reasonable efforts to timely perform and comply with all of the
City’s obligations under this Contract, including providing assistance to the Contractor, as
needed in obtaining premise permissions for installation of the Sensors.

6.03 As further defined in Article 2, section 2.16, the City shall have the ongoing responsibility
for assigning passwords and user names for its Authorized Users and maintaining the
confidentiality and use of the City’s password and user names.

6.04 The City shall comply with all applicable laws, rules and regulations relating to the goods and services
provided hereunder.

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6.05 Copies of all Records and Work Products as are existing, available, and deemed necessary
by the City for the performance of the Subscription Services and this Contract shall be
furnished to the City upon the City’s request.
6.06 The City may retrieve Data from the Subscription Services at any time during the term of
this Contract using the download capabilities provided by the Software associated with the
Subscription Services. Except as expressly set forth in Article 3, the Contractor shall not
access, use, disclose, sell, rent, transfer or copy the Data for any purpose without the
express prior written permission of the City.

Article 7. Contractor Personnel and Contract Administration

7.01 The Contractor represents that, at its own expense, it has obtained or will obtain all
personnel and equipment required to provide the Subscription Services. It warrants that all
such personnel are qualified and possess the requisite licenses or other such legal
qualifications to perform the activities necessary for the Contractor to deliver the
Subscription Services and for the Subscription Services to function as described in this
Contract, including on Exhibit A. If requested, the Contractor shall supply a résumé of the
managerial staff project manager or consultants it proposes to assign to this Contract, as
well as a dossier on the Contractor's professional activities and major undertakings.

7.02 If, in the City’s reasonable judgment, the assigned Contractor project manager is not
adequately performing the services related to implementation of the Subscription Services,
the City may request a replacement. The Contractor shall not replace the project manager
working on this Contract without the prior written consent of the City, except in the event
of illness, or termination of employment. In either event, Contractor shall have a
reasonable timeframe to assign a replacement project manager.

7.03 When the City deems it reasonable to do so, it may assign qualified City employees or
others to work with the Contractor to provide the Subscription Services. Nevertheless, it
is expressly understood and agreed by the parties that the Contractor shall remain
ultimately responsible for the proper provision of the Subscription Services.

7.04 The relationship of the Contractor to the City is and shall continue to be that of an
independent contractor and no liability or benefits, such as workers' compensation, pension
rights or liabilities, insurance rights or liabilities, or other rights or liabilities arising out of
or related to a contract for hire or employer/employee relationship shall arise or accrue to
either party or either party's agent, Subcontractor or employee as a result of the
performance of this Contract. No relationship other than that of independent contractor
shall be implied between the parties or between either party’s agents, employees or
Subcontractors. The Contractor agrees to indemnify, defend, and hold the City harmless
against any claim based in whole or in part on an allegation that the Contractor or any of
its Associates qualify as employees of the City, and any related costs or expenses, including
but not limited to legal fees and defense costs.

7.05 The Contractor warrants and represents that all persons assigned to the performance of this
Contract shall be regular employees or independent contractors of the Contractor, unless

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 otherwise authorized by the City. The Contractor’s employees’ daily working hours while
working in or about a City of Detroit facility shall be the same as those worked by City
employees working in the facility, unless otherwise directed by the City.

7.06 The Contractor shall comply with and shall require its Associates to comply with all
security regulations and procedures in effect on the City’s premises.

Article 8. Compensation and Security

8.01 Compensation for Subscription Services provided shall be in the amounts and will be paid
in the manner set forth in Exhibit B. Unless this Contract is amended pursuant to Article
18, the amount described on Exhibit B shall be the entire compensation to which the
Contractor is entitled for the Subscription Services under this Contract.

8.02 Payment for Subscription Services provided under this Contract is also governed by the
terms of Ordinance No. 42-98, entitled "Prompt Payment of Vendors," being Sections 17-
5-281 through 17-5-288 of the 2019 Detroit City Code.

The City employee responsible for accepting performance and payment requests under this
Contract is:

Art Thompson
Director Public Safety Information
1301 Third St
Detroit MI 48226
(313) 920-4955

Article 9. Maintenance and Audit of Records

9.01 The Contractor shall maintain full and complete Records reflecting all of its operations
related to this Contract. The Records shall be kept in accordance with generally accepted
accounting principles and maintained for a minimum of three (3) years after the Contract
completion date.

9.02 The City and any government-grantor agency providing funding under this Contract shall
have the right at any time with ten (10) days’ notice to examine and audit all Records and
other supporting data of the Contractor pertaining to this Contract as the City or any agency
deems necessary.

(a) The Contractor shall make all Records available for examination during normal
business hours at its Detroit offices, if any, or alternatively at its facility nearest
Detroit. The City and any government-grantor agency providing funds for the
Contract shall have this right of inspection. The Contractor shall provide copies of
all Records to the City or to any such government-grantor agency upon request.

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 (b) If in the course of such inspection the representative of the City or of another
government-grantor agency should note any deficiencies in the performance of the
Contractor's agreed upon performance or record-keeping practices, such
deficiencies will be reported to the Contractor in writing. The Contractor agrees to
promptly remedy and correct any such reported deficiencies within ten (10) days of
notification.

(c) Any costs disallowed as a result of an audit of the Records shall be repaid to the
City by the Contractor within thirty (30) days of notification or may be set off by
the City against any funds due and owing the Contractor, provided, however, that
the Contractor shall remain liable for any disallowed costs exceeding the amount
of the setoff.

(d) Each party shall pay its own audit costs. However, if the dollar amount of the total
disallowed costs, if any, exceeds three percent (3%) of the dollar amount of this
Contract, the Contractor shall pay the City's audit costs.

(e) Nothing contained in this Contract shall be construed or permitted to operate as any
restriction upon the powers granted to the Auditor General by the City Charter,
including but not limited to the powers to audit all accounts chargeable against the
City and to settle disputed claims.

9.03 The Contractor agrees to include the covenants contained in Sections 9.01 and 9.02 in any
contract it has with any Subcontractor, consultant or agent who will be charged directly or
indirectly to the City for anything related to the Subscription Services.

Article 10. Indemnity and Limitation of Liability

10.01 The Contractor agrees to indemnify, defend, and hold the City harmless against and from
any and all liabilities, obligations, damages, penalties, claims, costs, charges, losses and
expenses (including, without limitation, fees and expenses for attorneys, expert witnesses
and other consultants) that may be imposed upon, incurred by, or asserted against the City
or its departments, officers, employees, or agents by reason of any of the following
occurring during the term of this Contract:

(a) Any claim arising out of or in connection with the Contractor’s or any of its
Associates performance under this Contract to the extent of the gross negligence,
or tortious act, error, or omission attributable in whole or in part to the Contractor
or any of its Associates;

(b) Any material breach of any of the warranties and representations made by the
Contractor in Article 4 of this Contract.

(c) Any and all injury to the person or property of an employee of the City where such
injury arises out of the Contractor’s or any of its Associates performance of this Contract.
10.02 The Contractor undertakes and assumes all risk of dangerous conditions when not
performing inside City offices. The Contractor also agrees to waive and release any claim

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 or liability against the City for personal injury or property damage sustained by it or its
Associates while performing under this Contract on premises that are not owned by the City.

10.03 In addition, the Contractor will, at its expense, defend and indemnify the City from and
against losses, suits, damages, liability, and expenses (including reasonable attorney fees)
arising out of a claim asserted in a lawsuit or action against the City by a third party
unrelated to the City, in which such third party asserts a claim that the Subscription Services
and/or Software, when used by the City in accordance with this Contract and the
Documentation, infringes any United States patent which was issued by the U.S. Patent and
Trademark Office, or United States copyright which was registered by the U.S. Copyright
Office, as of the effective date of the City’s to License (collectively “Action”), provided
that the City provides the Contractor with reasonably prompt notice of any such Action, or
circumstances of which the City becomes aware that could reasonably be expected to lead
to such Action including but not limited to any cease and desist demands or warnings, and
further provided that the City cooperates with the Contractor and its defense counsel in the
investigation and defense of such Action.

(a) Section10.3 shall not apply and the Contractor shall have no obligation to defend
and indemnify the City in the event the City or a third party modifies, alters, substitutes, or
supplements any of the Subscription Services, or Software, or to the extent that the claim
of infringement arises from or relates to the integration, bundling, merger, or combination
of any of the same with other hardware, software, systems, technologies, or components,
functions, capabilities, or applications not licensed by the Contractor as part of the
Subscription Services, nor shall it apply to the extent that the claim of infringement arises
from or relates to meeting or conforming to any instruction, design, direction, or
specification furnished by the City, nor to the extent that the Subscription Services or
Software are used for or in connection with any purpose, application, or function other than
detecting and locating gunshots exclusively through acoustic means

(b) If, in the Contractor’s opinion, the Subscription Services, or Software may, or is
likely to become, the subject of such a suit or action, does become the subject of a claim
asserted against the City in a lawsuit which the Contractor is or may be obliged to defend
under this Section 10.3, or is determined to infringe the foregoing patents or copyrights of
another in a final, non-appealable judgment subject to the Contractor’s obligations under
this section, then the Contractor may in full and final satisfaction of any and all of its
obligations under this section, at its option: (1) procure for the City the right to continue
using the affected Subscription Services or Software, (2) modify or replace such
Subscription Services or Software to make it or them non- infringing, or (3) refund to the
City a pro-rata portion of the annual Subscription fees paid for the Subscription Services for
the term in which this Contract is terminated.

(c) This Section 10.03 states the entire liability of the Contractor and is the City’s exclusive
remedy for or relating to infringement or claims or allegations of infringement of any
patent, copyright, or other intellectual property rights in or to the Subscription
Services, its components, and Software.

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10.04 In the event any action shall be brought against the City by reason of any claim covered
under this Article 10, the Contractor, upon notice from the City, shall at its sole cost and
expense defend the same; provided however, the Contractor shall have the right to choose
counsel to defend such suit and/or action, and to control the settlement (including
determining the terms and conditions of settlement) and the defense thereof. The City may
participate in the defense of such action at its own expense. The Contractor acknowledges
that any settlement involving the City must be approved by the City Council prior to the
effectiveness of any such settlement.

10.05 The Contractor agrees that it is the Contractor's responsibility and not the responsibility of
the City to safeguard the property that the Contractor or its Associates use while performing
this Contract. Further, the Contractor agrees to hold the City harmless for any loss of such
property used by any such person pursuant to the Contractor's performance under this
Contract.

10.06 The indemnification obligation under this Article 10 shall not be limited by any limitation
on the amount or type of damages, compensation, or benefits payable under workers'
compensation acts, other employee benefit acts, or any insurance policies listed in Article
11.

10.07 The Contractor agrees that this Article 10 shall apply to all claims, whether litigated or not,
that may occur or arise between the Contractor or its Associates and the City and agrees to
indemnify, defend and hold the City harmless against any such claims.

10.08 The Contractor shall not be required to indemnify the City for any claims or actions caused
to the extent of the negligence or wrongful act of the City, its employees, agents, or
contractors. Notwithstanding the foregoing, if a claim, lawsuit, or liability results from or
is contributed to by the actions or omissions of the City, or its employees, agents, or
contractors, the Contractor’s obligations under this provision shall be reduced to the extent
of such actions or omissions based upon the principle of comparative fault.

10.09 Notwithstanding anything to the contrary in the foregoing sections, except for its
intellectual property infringement obligations set forth in Section 10.3, Contractor’s
cumulative liability for all losses, claims, suits, controversies, breaches or damages for
any cause whatsoever arising out of or related to this Contract, whether in contract,
tort, by way of indemnification or under statute, and regardless of the form of action
or legal theory shall not exceed six (6) times the amount paid to Contractor under this
Contract, for the annual subscription period in which the claim arises or the amount
of insurance maintained by ShotSpotter available to cover the loss, whichever is
greater. The foregoing limitations shall apply without regard to any failure of
essential purpose of any remedies given herein.

10.10 In no event shall either party, or any of its Associates, affiliates or any of its/their
respective directors, officers, members, attorneys, employees, or agents, be liable to
the other party under any legal or equitable theory or claim, for lost profits, lost
revenues, lost business opportunities, exemplary, punitive, special, indirect,
incidental, or consequential damages, each of which is hereby excluded by this

20
 Contract, regardless of whether such damages were foreseeable or whether any party
or any entity has been advised of the possibility of such damages.

Article 11. Insurance

11.01During the term of this Contract, the Contractor shall maintain the following insurance, at a
minimum and at its expense:

(a). General liability insurance insuring the Contractor’s obligations and

responsibilities with respect to the performance of Subscription Services as set out
in this Contract. The policy will be extended to include bodily injury and property
damage, products and completed operations, and contractual liability to a limit of
no less than two million dollars ($2,000,000) per occurrence. Coverage limits may
be met through a combination of the Contractor’s primary policy and umbrella
policy. The policy will include a cross liability and severability of interest clause
and be endorsed to name the Client as an additional insured;

(b) Non-owned automobile insurance to a limit of no less than one million dollars
($1,000,000);

(c) If applicable, automobile insurance (OAP1) for both owned and leased vehicles
with inclusive limits of no less than one million dollars ($1,000,000); and

(d) Errors and omissions liability insurance insuring the Contractor to a limit of no less
than one million dollars ($1,000,000) per claim and five million dollars
($5,000,000) in the aggregate. The coverage under the policy will be maintained
continuously during the Term of this Contract and for an additional two (2) years
after the termination or expiration of this Contract and will cover insurable losses
arising out of or in association with an error or omission in the rendering of or
failure to complete and provide the Subscription Services as set out in this Contract.
Coverage under the policy will respond to, but not be limited to the following
occurrences:

i. Privacy breach and violations as a result of but not limited to

unauthorized access to or wrongful disclosure or dissemination of
private information, failure to properly handle, manage, store,
destroy or control personal information and include the failure to
comply with privacy laws, and their respective regulations regarding
the collection, access, transmission, use, and accuracy. Coverage
will extend to include the costs associated with notification of
affected parties, regardless if required by statute as well as any fines
or penalties or costs imposed as a result of the breach including
defense of any regulatory action involving a breach of privacy;
ii. Network security incidents arising from Subscription Services
security failures such as, but not limited to, unauthorized access,
theft or destruction of data, electronic security breaches, denial of
service, spread of virus within the Contractor’s computer network,

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 the Subscription Services or other third party computer information
systems and will further include expenses related to third party
computer forensics;
iii. Privacy breach expenses including crisis management related to
electronic and non-electronic breaches; and
iv. Content or media liability including personal and advertising
liability, intellectual property infringement coverage (copyright,
trademark, trade name, service mark, trade dress or trade secret)
arising out of media content created, produced or disseminated by
the Contractor.
(e) The Contractor will maintain coverage for damages resulting from the dishonest or
criminal acts committed by an employee of the Contractor.
(f) If coverage is to be cancelled or non-renewed for any reason, the Contractor shall
provide the City with thirty (30) days’ notice of said cancellation or non-renewal. The
City may request an Extended Reporting Endorsement be purchased by the Contractor
at the Contractor’s expense. The term of the Extended Reporting Endorsement will be
decided by the City and the Contractor.
(g) The Contractor shall notify the City in writing prior to any termination or cancellation
of coverage unless otherwise required by law and ensure that all policies of insurance
will:
i. Be written with an insurer properly licensed to do business; and be non-
contributing with and will apply only as primary and not excess to any other
insurance or self-insurance available to the City.
(h) The Contractor shall be responsible for payment of all deductibles contained in any
insurance required under this Contract.

(i) The Contractor shall deliver to the City certificates of insurance evidencing renewal
or replacement of policies required under this Contract prior to the expiration or
replacement of the current policies without demand by the City.

(j) If the Contractor fails to maintain in force any insurance required to be maintained
by it hereunder, then the City, without prejudice to any of its other remedies, may obtain
such insurance on behalf of and at the cost of the Contractor.

(k) The Contractor and its Associates and insurer(s) hereby release the City from any
and all liability or responsibility, including anyone claiming through or under them, by way
of subrogation or otherwise for any loss or damage which the Contractor may sustain
incidental to or in any way related to the Contractor’s obligations under this Contract.

11.02 Each such policy shall contain the following cross-liability wording: “In the event of a
claim being made hereunder by one insured for which another insured is or may be liable,
then this policy shall cover such insured against whom a claim is or may be made in the
same manner as if separate policies had been issued to each insured hereunder.”

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11.03 Except as otherwise provide herein, all insurance required by this Contract shall be written
on an occurrence-based policy form, if the same is commercially available. Errors and
omissions and cyber liability may be provided on a claims made basis.

11.06 Contractor’s commercial general liability and auto liability policies shall name the
Contractor as the insured and the City as an additional insured. Certificates of insurance
evidencing the coverage required by this Article 11 shall, in a form acceptable to the City,
be submitted to the City prior to the commencement of the Subscription Services and at
least fifteen (15) days prior to the expiration dates of expiring policies. In the event the
Contractor receives notice of policy cancellation, the Contractor shall immediately notify
the City in writing.

11.07 If part of this Contract is subcontracted, the Contractor shall require each Subcontractor to
effect and maintain the types and limits of insurance set forth in this Article 11 and shall
require documentation of same, copies of which documentation shall be promptly
furnished the City.

11.08 The provisions requiring the Contractor to carry the insurance required under this Article
11 shall not be construed in any manner as waiving or restricting the liability of the
Contractor under this Contract.

Article 12. Default and Termination

12.01 This Contract shall remain in full force and effect until the end of its term unless otherwise
terminated for cause or convenience according to the provisions of this Article 12.

12.02 The City reserves the right to terminate this Contract for cause. Cause is an event of
default.

(a) An event of default shall occur if there is a material breach of this Contract, and
shall include the following:

(i) The Contractor fails to provide the Subscription Services in accordance with
the terms of this Contract;

(ii) The Contractor assigns, transfers, conveys or otherwise disposes of this

Contract in whole or in part without prior approval of the City;

(iii) Any City officer or employee acquires an interest in this Contract so as to

create a conflict of interest; and

(iv) The Contractor is in material breach of any of the provisions of this

Contract, or disregards applicable laws, ordinances, permits, licenses,
instructions or orders of the City.

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 (b) If the City finds an event of default has occurred, the City may issue a Notice of
Termination for Cause setting forth the grounds for terminating the Contract. Upon
receiving a Notice of Termination for Cause, the Contractor shall have thirty (30)
business days within which to cure such default. If the default is cured within said
thirty (30) business day period, the right of termination for such default shall cease.
If the default is not cured to the satisfaction of the City, this Contract shall terminate
on the tenth calendar day after the Contractor's receipt of the Notice of Termination
for Cause, unless the City, in writing, gives the Contractor additional time to cure
the default. If the default is not susceptible to cure within such thirty (30) day
period, the City may agree to an extended cure period. If the default is not cured to
the satisfaction of the City within the additional time allowed for cure, this Contract
shall terminate for cause at the end of the extended cure period. The City shall have
no obligation to pay Contractor for any of its Subscription Services performed
during an extended cure period.

(c) If, after issuing a Notice of Termination for Cause, the City determines that the
Contractor was not in default, the rights and obligations of the parties shall be the
same as if the Notice of Termination had been issued as a Notice of Termination
for Convenience.

12.03 In the event that either party is in material breach of any terms or conditions of this
Contract, the non-breaching party may terminate this Contract upon thirty (30) days’ prior
written notice to the other party, provided that the breaching party has not cured the alleged
breach within said thirty (30) day period, or extended timeframe as may be agreed to by
Contractor. In the event of a breach of Contractor’s intellectual property rights, Contractor
at its sole discretion may terminate this Contract immediately upon thirty (30) days’ written
notice to the City.

12.04 Each parties’ remedies outlined in this Article 12 shall be in addition to any and all other
legal or equitable remedies permissible.

12.05 Either Party has the right to terminate this Contract in the event that the other is adjudicated
bankrupt or insolvent or a trustee or a debtor-in-possession is appointed over any parties’
property. Each party retains all of the other termination rights set forth elsewhere in this
Contract during the period of any proceedings under the Bankruptcy Code of the United
States.

12.06 The Contractor must immediately inform the City of material changes in its operation,
ownership or financial condition. Material changes include, but are not limited to:

(a) Reduction or change in staffing assigned to the Contract.

(b) Decrease in, or cancellation of, insurance coverage.
(c) Delinquent payment, or nonpayment, of tax obligations.
(d) Delinquent payment, or nonpayment, of payroll obligations.
(e) Delinquent funding, or nonfunding, of pension or profit sharing plans.
(f) Delinquent payment, or nonpayment, of subcontractors.
(g) Termination of, or changes, in subcontracts.

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 (h) Transfer, sell, assignment or delegation to an entity other than the Contractor, of
ownership or administrative Subscription Services.

12.07 The City shall have the right to terminate this Contract at any time at its convenience by
giving the Contractor five (5) business days written Notice of Termination for
Convenience. As of the effective date of the termination, the City will be obligated to pay
the Contractor the following: (a) the fees or commissions for Subscription Services
completed and accepted in accordance with Exhibit A in the amounts provided for in
Exhibit B; and (b) the Contractor's costs and expenses incurred prior to the date of the
termination for items that are identified in Exhibit B. The amount due to the Contractor
shall be reduced by payments already paid to the Contractor by the City. In no event shall
the City pay the Contractor more than maximum price, if one is stated, of this Contract.

12.08 After receiving a Notice of Termination for Cause or Convenience, and except as otherwise
directed by the City, the Contractor shall:

(a) Stop work under the Contract on the date and to the extent specified in the Notice
of Termination;

(b) Obligate no additional Contract funds for payroll costs and other costs beyond such
date as the City shall specify, and place no further orders on subcontracts for
material, the Subscription Services, or facilities, except as may be necessary for
completion of such portion of the Subscription Services under this Contract as is
not terminated;

(c) Terminate all orders and subcontracts to the extent that they relate to the portion of
the Subscription Services terminated pursuant to the Notice of Termination;

(d) Preserve all Records, Work Products and submit to the City such Records and Work
Products as the City shall specify and furnish to the City an inventory of all
furnishings, equipment, and other property purchased for the Contract, if any, and
carry out such directives as the City may issue concerning the safeguarding or
disposition of applicable files and property; and

(a) Submit within thirty (30) days, as applicable, a final report of receipts and
expenditures of funds relating to this Contract, and a list of all creditors,
Subcontractors, lessors and other parties, if any, to whom the Contractor has
become financially obligated pursuant to this Contract.

12.09 After termination of the Contract, each party shall have the duty to assist the other party in
the orderly termination of this Contract and the transfer of all rights and duties arising under
the Contract, as may be necessary for the orderly, un-disrupted continuation of the business
of each party.

12.10Upon termination of this Contract for any reason, the City’s access to the Software and
Subscription Services will be terminated and the City’s access will be disabled; provided

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however, the City shall be given access for at least thirty (30) days from the termination of
the Contract for the purpose of downloading all Data and Work Product.

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 Article 13. Assignment

Neither party shall assign, transfer, convey or otherwise dispose of any interest whatsoever
in this Contract without the prior written consent of the other party which consent shall not
be unreasonable withheld; however, claims for money due or to become due to the
Contractor may be assigned to a financial institution without such approval. Notice of any
assignment to a financial institution or transfer of such claims of money due or to become
due shall be furnished promptly to the City. If the Contractor assigns all or any part of any
monies due or to become due under this Contract, the instrument of assignment shall
contain a clause stating that the right of the assignee to any monies due or to become due
shall be subject to prior liens of all persons, firms, and corporations for the Subscription
Services as delivered or materials supplied for the provision of the Subscription Services.
This Article 13 shall not apply to a merger or acquisition of all or substantially all of the
Contractor’s assets. No assignee for the benefit of the City’s creditors, custodian, receiver,
trustee in bankruptcy, debtor in possession, sheriff, or any other officer of a court, or other
person charged with taking custody of the City’s assets or business, shall have any right to
continue or to assume or to assign these without Contractor’s express consent.

Article 14. Subcontracting

14.01 The City reserves the right to withhold approval of subcontracting such portions of the
Subscription Services where the City determines that such subcontracting is not in the
City's best interests.

14.02 Each subcontract entered into shall provide that the applicable provisions of this Contract
shall apply to the Subcontractor and its Associates in all respects. The Contractor agrees
to bind each Subcontractor and each Subcontractor shall agree to be bound by the terms of
the Contract insofar as applicable to the work or the portions of the Subscription Services
worked on by that Subcontractor.

14.03 The Contractor and the Subcontractor jointly and severally agree that no approval by the
City of any proposed Subcontractor, nor any subcontract, nor anything in the Contract,
shall create or be deemed to create any rights in favor of a Subcontractor and against the
City, nor shall it be deemed or construed to impose upon the City any obligation, liability
or duty to a Subcontractor, or to create any contractual relation whatsoever between a
Subcontractor and the City.

14.04 The provisions contained in this Article 14 shall apply to subcontracting by a Subcontractor
of any portion of the work related to the Subscription Services included in an approved
subcontract.

14.05 The Contractor agrees to indemnify, defend, and hold the City harmless against any claims
initiated against the City pursuant to any subcontracts the Contractor enters into in
performance of this Contract. The City's approval of any Subcontractor shall not relieve
the Contractor of any of its responsibilities, duties and liabilities under this Contract. The
Contractor shall be solely responsible to the City for the acts or defaults of its

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 Subcontractors and of each Subcontractor's Associates, each of whom shall for this purpose
be deemed to be the agent or employee of the Contractor.

Article 15. Conflict of Interest

15.01 The Contractor covenants that it presently has no interest and shall not acquire any interest,
direct or indirect, that would conflict in any manner or degree with the delivery of the
Subscription Services or otherwise in connection with its performance of this Contract.
The Contractor further covenants that in the performance of this Contract no person having
any such interest shall be employed by the Contractor.

15.02 The Contractor further covenants that no officer, agent, or employee of the City and no
other public official who exercises any functions or responsibilities in the review or
approval of the undertaking or performance of this Contract has any personal or financial
interest, direct or indirect, in this Contract or in its proceeds, whether such interest arises
by way of a corporate entity, partnership, or otherwise.

15.03 The Contractor warrants (a) that it has not employed and will not employ any person to
solicit or secure this Contract upon any agreement or arrangement for payment of a
commission, percentage, brokerage fee, or contingent fee, other than bona fide employees
working solely for the Contractor either directly or indirectly, and (b) that if this warranty
is breached, the City may, at its option, terminate this Contract without penalty, liability or
obligation, or may, at its option, deduct from any amounts owed to the Contractor under
this Contract any portion of any such commission, percentage, brokerage, or contingent
fee.

15.04 The Contractor covenants not to employ an employee of the City for a period of one (1)
year after the date of termination of this Contract without written City approval.

15.05 The Contractor shall provide a statement listing all political contributions and expenditures
(“Statement of Political Contributions and Expenditures”), as defined by the Michigan
Campaign Finance Act, MCL 169.201, et seq., made by the Contractor, its affiliates,
subsidiaries, principals, officers, owners, directors, agents or assigns, to elective City
officials within the previous four (4) years. Individuals shall also list any contributions or
expenditures from their spouses.

15.06 The Contractor’s Statement of Political Contributions and Expenditures shall be attached
to this Contract as “Exhibit C” and made a part hereof. This Contract is not valid unless
and until the Statement of Political Contributions and Expenditures is provided.

15.07 The Statement of Political Contributions and Expenditures shall be filed by the Contractor
on an annual basis for the duration of the Contract, shall be current up to and including the
date of its filing, and shall also be filed with all contract renewals and change orders, if
any.

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 Article 16. Confidential Information and Proprietary Rights

16.01 In order that the Contractor may effectively fulfill its covenants and obligations under this
Contract, it may be necessary or desirable for the City to disclose confidential and
proprietary information, including the Data, to the Contractor or its Associates pertaining
to the City's past, present and future activities. Since it is difficult to separate confidential
and proprietary information from that which is not, the Contractor shall regard, and shall
instruct its Associates to regard, all information, including, but to limited to the Data,
gained as confidential and such information shall not be disclosed to any organization or
individual without the prior written consent of the City. The above obligation shall not
apply to information already in the public domain or information required to be disclosed
by a court order.

16.02 The City acknowledges and agrees that the source code, technology, and internal structure
of the Software, and Subscription Services, as well as the Documentation, operations
manual(s) and training material(s), are the confidential information and proprietary trade
secrets of the Contractor, the value of which would be destroyed by disclosure to the public.
Use by anyone other than the City of the Subscription Services, and Documentation are
prohibited, unless pursuant to a valid assignment under this Contract. Unless prohibited by
applicable law, the terms and conditions of this Contract, including pricing and payment
terms shall also be treated as the Contractor’s confidential information. The City agrees
during the term of this Contract, and thereafter, to hold the confidential information and
proprietary trade secrets of the Contractor in strict confidence and to not permit any person
or entity to obtain access to it except as required for the City’s exercise of the License rights
granted under this Contract. Nothing in this Contract is intended to or shall limit any rights
or remedies under applicable law relating to trade secrets, including the Uniform Trade
Secrets Act as enacted in applicable jurisdictions.

16.03 The Contractor agrees to take appropriate action with respect to its Associates to ensure
that the foregoing obligations in section 16.01 of non-use and non-disclosure of the City’s
confidential information shall be fully satisfied.

16.04 The Contractor has structured its technology, processes and policies in such a way as to
minimize the risk of privacy infringements from audio surveillance while still delivering
important public safety benefits to its the City’s. These efforts to maintain privacy include
the following:

(a) The Contractor will not provide extended audio to any other person
beyond the audio snippet (1 second of ambient noise prior to a gunshot,
the gunshot audio itself, and 1 second after the incident). The Contractor
will vigorously resist any subpoena or court order for extended audio
that goes beyond an audio snippet.

(b) The Contractor will not provide a list or database of the precise location
of Sensors to police or the public if requested and will challenge any
subpoenas for this location any data.

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16.05 Obligations of the Parties. The receiving Party’s (“Recipient”) obligations under this section
shall not apply to any of the disclosing Party’s (“Discloser”) Confidential Information that
Recipient can document: (a) was in the public domain at or subsequent to the time such
Confidential Information was communicated to Recipient by Discloser through no fault of
Recipient; (b) was rightfully in Recipient’s possession free of any obligation of confidence
at or subsequent to the time such Confidential Information was communicated to Recipient
by such Discloser; (c) was developed by employees or agents of Recipient independently
of and without reference to any of Discloser’s Confidential Information; or (d) was
communicated by Discloser to an unaffiliated third party free of any obligation of
confidence. A disclosure by Recipient of any Discloser Confidential Information (a) in
response to a valid order by a court or other governmental body; (b) as otherwise required
by law; or (c) necessary to establish the rights of either party under this Contract shall not
be considered to be a breach of this Contract by the Recipient; provided, however, that
Recipient shall provide prompt prior written notice thereof to the Discloser to enable
Discloser to seek a protective order or otherwise prevent such disclosure. The Recipient
shall use reasonable controls to protect the confidentiality of and restrict access to all
Confidential Information of the Discloser to those persons having a specific need to know
for the purpose of performing the Recipient’s obligations under this Agreement. The
Recipient shall use controls no less protective than Recipient uses to secure and protect its
own confidential, but not “Classified” or otherwise Government-legended, information.
Upon termination of this Contract, the Recipient, as directed by the Discloser, shall either
return the Discloser’s Confidential Information, or destroy all copies thereof and verify
such destruction in writing to the Discloser. Unless the Recipient obtains prior written
consent from the Discloser, the Recipient agrees that it will not reproduce, use for purposes
other than those expressly permitted in this Contract, disclose, sell, license, afford access
to, distribute, or disseminate any information designated by the Discloser as confidential.

Article 17. Compliance with Laws

17.01 The Contractor shall comply with and shall require its Associates to comply with all
applicable federal, state and local laws. .

17.02 The Contractor shall hold the City harmless with respect to any damages arising from any
violation of law by it or its Associates. The Contractor shall commit no trespass on any
public or private property in the performance of this Contract. The Contractor shall require
as part of any subcontract that the Subcontractor comply with all applicable laws and
regulations.

Article 18. Office of Inspector General

18.01 In accordance with Section 2-106.6 of the City Charter, this Contract shall be voidable or
rescindable at the discretion of the Mayor or Inspector General at any time if a Public
Servant who is a party to the Contract has an interest in the Contract and fails to disclose
such interest.

30
18.02 This Contract shall also be voidable or rescindable if a lobbyist or employee of the
contracting party offers a prohibited gift, gratuity, honoraria or payment to a Public Servant
in relation to the Contract.

18.03 A fine shall be assessed to the Contractor in the event of a violation of Section 2-106.6 of
the City Charter. If applicable, the actions of the Contractor, and its representative lobbyist
or employee, shall be referred to the appropriate prosecuting authorities.

18.04 Pursuant to Section 7.5-306 of the City Charter, the Inspector General shall investigate any
Public Servant, City agency, program or official act, contractor and subcontractor
providing goods and Subscription Services to the City, business entity seeking contracts or
certification of eligibility for City contracts and person seeking certification of eligibility
for participation in any City program, either in response to a complaint or on the Inspector
General’s own initiative in order to detect and prevent waste, abuse, fraud and corruption.

18.05 In accordance with Section 7.5-310 of the City Charter, it shall be the duty of every Public
Servant, contractor, subcontractor, and licensee of the City, and every applicant for
certification of eligibility for a City contract or program, to cooperate with the Inspector
General in any investigation pursuant to Article 7.5, Chapter 3 of the City Charter.

18.06 Any Public Servant who willfully and without justification or excuse obstructs an
investigation of the Inspector General by withholding documents or testimony, is subject
to forfeiture of office, discipline, debarment or any other applicable penalty.

18.07 As set forth in Section 7.5-308 of the City Charter, the Inspector General has a duty to
report illegal acts. If the Inspector General has probable cause to believe that any Public
Servant or any person doing or seeking to do business with the City has committed or is
committing an illegal act, then the Inspector General shall promptly refer the matter to the
appropriate prosecuting authorities.

18.08 In accordance with Section 18-11-1(a) of the Detroit City Code, the City shall solicit offers
from, award contracts to, consent to subcontracts with, or otherwise to conduct business
with, responsible contractors only. To effectuate this policy, the debarment of contractors
and subcontractors from current and/or future City work may be undertaken.
18.09 Therefore, it will be the responsibility of all the Contractor to check the list of debarred
contractors in the City’s website and confirm that neither the Contractor nor the
subcontracting company is listed on the City’s debarment list and they will not be using
the debarred (sub)contractor(s) to conduct any City business.
18.10 In accordance with Section 18-11-2(c) of the Detroit City Code, the Contractor shall report
to the Office of Inspector General any improper, unethical or illegal activity or requests
made by elected officers of the City, including those acting on their behalf, or any Public
Servant in connection with this Contract.

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 Article 19. Amendments

19.01 The City may consider it in its best interest to change, modify or extend a covenant, term
or condition of this Contract or request that the Contractor modify the Subscription
Services in any manner not described on Exhibit A. Any such change, addition, deletion,
extension or modification of Subscription Services may require that the compensation paid
to the Contractor by the City be proportionately adjusted, either increased or decreased, to
reflect such modification. If the City and the Contractor mutually agree to any changes or
modification of the Subscription Services or this Contract, the modification shall be
incorporated into this Contract by written Amendment.

19.02 Compensation shall not be modified unless there is a corresponding modification in the
Subscription Services sufficient to justify such an adjustment. If there is any dispute as to
compensation, the Contractor shall continue to perform under this Contract until the dispute
is resolved.

19.03 No Amendment to this Contract shall be effective and binding upon the parties unless it
expressly makes reference to this Contract, is in writing, is signed and acknowledged by
duly authorized representatives of both parties, is approved by the appropriate City
departments and the City Council, and is signed by the Chief Procurement Officer.

19.04 The City shall not be bound by Unauthorized Acts of its employees, agents, or
representatives with regard to any dealings with the Contractor and any of its Associates.

Article 20. Fair Employment Practices

20.01 The Contractor shall comply with, and shall require any Subcontractor to comply with, all
federal, state and local laws governing fair employment practices and equal employment
opportunities.

20.02 The Contractor agrees that it shall, at the point in time it solicits any subcontract, notify the
potential Subcontractor of their joint obligations relative to non-discrimination under this
Contract, and shall include the provisions of this Article 20 in any subcontract, as well as
provide the City a copy of any subcontract upon request.

20.03 Breach of the terms and conditions of this Article 20 shall constitute a material breach of
this Contract and may be governed by the provisions of Article 12, "Default and
Termination."
Article 21. Notices

21.01 All notices, consents, approvals, requests and other communications ("Notices") required
or permitted under this Contract shall be given in writing, mailed by postage prepaid,
certified or registered first-class mail, return receipt requested, or overnight delivery
services, and addressed as follows:

32
 If to the Police Department on behalf of the City:
Attn: Art Thompson
1301 Third St
Detroit, MI 48226

If to the Contractor:
ShotSpotter, Inc.
Attn: Chief Financial Officer
7979 Gateway Blvd., Suite 210
Newark, CA 94560

21.02 All Notices shall be deemed given on the day of mailing. Either party to this Contract may
change its address for the receipt of Notices at any time by giving notice of the address
change to the other party. Any Notice given by a party to this Contract must be signed by
an authorized representative of such party.

21.03 The Contractor agrees that service of process at the address and in the manner specified in
this Article 21 shall be sufficient to put the Contractor on notice of such action and waives
any and all claims relative to such notice.

Article 22. Force Majeure

No failure or delay in performance of this Contract, by either party, shall be deemed to be a breach
thereof when such failure or delay is caused by a force majeure event including, but not limited to,
any Act of God, strikes, lockouts, wars, acts of terrorism, riots, epidemics, explosions, sabotage,
breakage or accident to equipment, the binding order of any court or governmental authority, or
any other cause, whether of the kind herein enumerated or otherwise, not within the control of a
party. In the event of a dispute between the parties with regard to what constitutes a force majeure
event, the City’s reasonable determination shall be controlling.

Article 23. Waiver

23.01 Neither party shall be deemed to have waived any of its rights under this Contract unless
such waiver is in writing and signed by the party consenting to such waiver.

23.02 No delay or omission on the part of either party in exercising any right shall operate as a
waiver of such right or any other right. A waiver on any one (1) occasion shall not be
construed as a waiver of any right on any future occasion.

23.03 No failure by either party to insist upon the strict performance of any covenant, agreement,
term or condition of this Contract or to exercise any right, term or remedy consequent upon
its breach shall constitute a waiver of such covenant, agreement, term, condition, or breach.
Article 24. Miscellaneous

33
24.01 If any provision of this Contract or its application to any person or circumstance shall to
any extent be invalid or unenforceable, the remainder of this Contract shall not be affected
and shall remain valid and enforceable to the fullest extent permitted by law.

24.02 This Contract contains the entire agreement between the parties and all prior negotiations
and agreements are merged into this Contract. Neither the City nor the City's agents have
made any representations except those expressly set forth in this Contract, and no rights or
remedies are, or shall be, acquired by the Contractor by implication or otherwise unless
expressly set forth in this Contract. The Contractor waives any defense it may have to the
validity of the execution of this Contract.

24.03 Unless the context otherwise expressly requires, the words "herein," "hereof," and
"hereunder," and other words of similar import, refer to this Contract as a whole and not to
any particular section or subdivision.

24.04 The headings of the sections of this Contract are for convenience only and shall not be used
to construe or interpret the scope or intent of this Contract or in any way affect the same.

24.05 This Contract and all actions arising under it shall be governed by, subject to, and construed
according to the law of the State of Michigan. The Contractor agrees, consents and submits
to the exclusive personal jurisdiction of any state or federal court of competent jurisdiction
in Wayne County, Michigan, for any action arising out of this Contract. The Contractor
also agrees that it shall not commence any action against the City because of any matter
whatsoever arising out of or relating to the validity, construction, interpretation and
enforcement of this Contract in any state, federal or foreign court of competent jurisdiction
other than one in Wayne County, Michigan.

24.06 If any Associate of the Contractor shall take any action that, if done by the Contractor,
would constitute a breach of this Contract, the same shall be deemed a breach by the
Contractor.

24.07 The rights and remedies set forth in this Contract are not exclusive and are in addition to
any of the rights or remedies provided by law or equity.

24.08 For purpose of the hold harmless and indemnity provisions contained in this Contract, the
term "City" shall be deemed to include the City of Detroit and all other associated,
affiliated, allied or subsidiary entities or commissions, now existing or subsequently
created, and their officers, agents, representatives, and employees.

24.09 The Contractor covenants that it is not, and shall not become, in arrears to the City upon
any contract, debt, or other obligation to the City including, without limitation, real
property, personal property and income taxes, and water, sewage or other utility bills.

24.10 This Contract may be executed in any number of original counterparts, any one of which
shall be deemed an accurate representation of this Contract. Promptly after the execution
of this Contract, the City shall provide a fully executed copy to the Contractor.

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24.11 As used in this Contract, the singular shall include the plural, the plural shall include the
singular, and a reference to either gender shall be applicable to both.

24.12 The rights and benefits under this Contract shall inure to the benefit of the heirs, executors,
administrators, agents, successors, and assigns of the parties hereto. This paragraph shall
not be construed as a consent to any assignment of this Contract by either party except as
provided in Article 13.

24.13 The City shall have the right to recover by setoff from any payment owed to the Contractor
all delinquent withholding, income, corporate and property taxes owed to the City by the
Contractor, any amounts owed to the City by the Contractor under this Contract or other
contracts, and any other debt owed to the City by the Contractor.

24.14 All right and title to Contractor’s trademarks or service marks (“Trademarks”) used to
identify the Contractor’s Documentation and other products and services belonging to the
Contractor prior to, or subsequent to, the effective date of this Contract, shall continue to
belong to the Contractor. Nothing herein grants, or shall be construed to grant, to the City
any rights to such Trademarks.

Article 25. Invoice Submission and Payment

25.01 All invoices submitted against the contract must include part or item numbers and part or
item description, list price, and applicable discount. Items not properly invoiced will not
be paid. It is the Contractor's responsibility to ensure the creation of invoice(s) in Oracle
Cloud. Invoices must meet the following conditions for payment: Price on invoice must
correspond to the pricing listed on purchase order and/or contract.

25.03 All suppliers must register in the Supplier Portal and be set up for ACH (wireless
payment) in order to receive payment

25.04 The Contractor’s registration and invoice submission instructions can be found on the
City of Detroit’s website at http://www.detroitmi.gov/Supplier. Questions should be
directed to procurementinthecloud@detroitmi.gov.

Article 26. Board of Ethics

26.01 In accordance with Section 2-106.10 of the City Charter, it is the duty of every Public
Servant, the Contractor and subcontractors, if any, to cooperate with the Board of Ethics in
any investigation.

26.02 Any Public Servant who willfully and without justification or excuse obstructs an
investigation of the Board of Ethics by withholding documents or testimony is subject to
forfeiture of officer, discipline, debarment or any other applicable penalty.

35
26.03 The Contractor acknowledges that it subject to debarment or any other applicable penalty,
if the Contractor willfully and without justification or excuse obstructs an investigation of
the Board of Ethics by withholding documents or testimony.

(Signatures appear on next page)

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Exhibit A – Subscription Services

A.1. Notice to Proceed

The initial term of this Contract shall begin upon approval by the Detroit City Council, and
shall continue for a four (4) years, unless the City exercises its option to extend the term, as set
forth below. The Contractor shall commence performance of this Contract upon receipt of a
written “Notice to Proceed” from the City and in the manner specified in the Notice to Proceed.

A.1.2. Subscription Services Objectives and General Description

The Contractor will provide the Subscription Services for an outdoor area acoustic gunshot system
to enable the City to precisely and quickly identify where there are gunfire incidents. The City
expects that the Subscription Services will reduce gun violence in the city by identifying more
gunshot incidents, while being able to respond to the runs more quickly. The Subscription Services
will provide a gunshot detection system that will be integrated into the City’s current security
management technology to help reduce gun violence in the City and assist in locating evidence
such as shell casings which will provide investigative leads. The Subscription Services will work
in concert with the City's focused deterrence model which have had demonstrable success in
reducing gun violence.

A.1.3 Subscription Services Description

The Contractor will provide the Subscription Services that, at a minimum, will include the
following Coverage Areas:

A-1
Coverage Areas = 6.48 square miles

The Subscription Services Reports and Expert Witness Services. The Subscription Services will
provide:

1. Forensic Reports.

a. Investigative Lead Summary (“ILS”). The Subscription Services

provides an on-demand report available through the “ShotSpotter
Respond Application.” The Investigative Lead Summary (ILS)
provides useful details about the approximate location, timing, and
sequence of each shot fired during an incident. The ILS will help
DPD officers find shell casings, confirm witness accounts, and
identify suspects. ILS reports are available immediately after an
incident occurs via the mobile, web, or desktop “ShotSpotter
Respond” application (machine-generated). The ILS is not a court-
admissible document.
A-2
 b. Detailed Forensic Report (“DFR”). The Subscription Services will
provide a DFR for any Subscription Services-detected incidents,
including Reviewed Alerts. The DFR is intended to be a court-
admissible document used by attorneys as part of a court case for
the exact, verified timing, sequence and location of each shot fired.
Secondarily, the DFR is available for use by DPD to obtain a
search warrant or to investigate an Officer Involved Shooting.

DFRs must be requested in writing and addressed to the

Contractor. Requests may be submitted via the Forensics Services
page under the Law Enforcement tab on the Contractor’s website
(www.shotspotter.com). The Contractor will use commercially
reasonable efforts to provide a DFR within ten (10) business days
of receipt of the request.

2. Expert Witness Services.

The Contractor will provide reasonable expert witness services, including

Reviewed Alerts, for an hourly fee as set forth in Exhibit B, as well as
reimbursement of all travel and per diem costs. If requested to provide
such services, the Contractor will invoice the City for the number of hours
expended to prepare for and provide expert witness testimony, and actual
travel expenses, upon completion of the services. The City understands
that the Contractor undertakes to provide individuals whose qualifications
are sufficient for such services, but does not warrant that any person or his
or her opinion will be accepted by every court. The Contractor requires at
least fourteen (14) days prior notice of such a requirement in writing from
the City. The City must include dates, times, specific locations, and a point
of contact for the Contractor personnel. Due to the nature of legal
proceedings, the Contractor cannot guarantee that its services described in
this section shall produce the outcome, legal or otherwise, which The City
desires. Payment for expert witness services described shall be due and
payable when services are rendered regardless of the outcome of the
proceedings.

A.4 Training

The Contractor will assign a Customer Success Director to the DPD to ensure that it delivers
consistent, quality training based on the DPD’s needs. In preparation for the planned cutovers, the
Contractor will train each group of users on the Subscription Services applications, including
A-3
Service Availability

The Subscription Services will be able to detect gunfire and available to users with online access to data
99.9% of the time, on a 24x7 by 365 day per year basis, excluding: a) scheduled maintenance periods
which will be announced to the City in advance; b) select holidays; and c) third party network outages
beyond the Contractor’s control. The Subscription Services include all database, applications, and
communications services hosted by the Contractor at its data center and specifically exclude the City’s
internal network or systems or third party communications networks, e.g. Verizon, AT&T or the
Customer’s internet service provider.

City SLA Credits

Each Service Level measurement shall be determined quarterly, the results of which will be reviewed
during the periodic account review meetings with the City. For each calendar quarter that the Contractor
does not meet at least two of the three above standards, a fee reduction representing one free week of
service (for the affected Coverage Area) for each missed quarter shall be included during a future City
renewal.

Service Level Exclusions and Modifications

The Contractor shall maintain Service Levels at all times. However, Service Level performance during
New Year’s Eve and Independence Day and the 48-hour periods before and after these holidays, are
specifically excluded from Service Level standards. During these excluded periods, because of the large
amount of fireworks activity, the Subscription Services uses fireworks suppression techniques to
distinguish gunshots from fireworks.

The Contractor will put the Subscription Services system into "fireworks suppression mode" during this
period in order to reduce and distinguish the non-gunfire incidents required for human classification. The
Contractor will inform the City in writing prior to the Subscription Services being placed in fireworks
suppression mode and when the mode is disabled. While in fireworks suppression mode, the incident
alerts determined to be fireworks are not sent to the reviewer nor the City dispatch center, patrol car MDTs,
and officer smartphones; however, these non-gunfire incidents will continue to be stored in the database
for use if required at a later time.

The Subscription Services sensors send incident information to the Subscription Services cloud via third
party cellular, wireless or wired networks. The Contractor is not responsible for outages on the third party
networks.

Service Failure Notification

Should the Contractor identify any condition (disruption, degradation or failure of network, cloud, servers,
sensors etc.) that impacts the Subscription Services’ ability to meet the Gunshot Detection & Location
standard set forth in this Contract, the Contractor will proactively notify the City in writing with: a) a brief

A-6
explanation of the condition; b) how the City’s service is affected; and c) the approximate timeframe for
resolution. The Contractor will also notify the City once any such condition is resolved.
The City Responsibilities

The purpose of the Reviewed Alert service is to provide incident data to the City, reviewed, analyzed and
classified in the manner described above. However, it is the sole responsibility of the City to interpret the
data provided, and to determine any appropriate follow-up reaction or response, including whether or not
to dispatch emergency responder resources based on a Reviewed Alert. The Contractor does not assume
any obligation, duty or responsibility for the City’s reaction, response, or dispatch decisions, or for the
consequences or outcomes of any decisions made or not made by the City in reliance, in whole or in part,
on any of the Subscription Services.

The City must inform the Contractor when Verified Incidents of gunfire are missed by the Subscription
Services in order to properly calculate Performance Rate, as defined below.

The City is responsible for providing any required workstations, mobile devices and internet access for
the City’s dispatch center, patrol car MDTs, and officer smartphones, or Investigator Portal.

ShotSpotter – Definition of Key Terms

The Subscription Services will provide data for correct detection and accurate location for ninety percent
(90%) of detectable (outdoor, unsuppressed) community gunfire which occurs within the Coverage Area,
provided the measurement is Statistically Significant, as defined below. This “Performance Rate” shall be
calculated as a percentage as follows:

𝑃𝑒𝑟𝑓𝑜𝑟𝑚𝑎𝑛𝑐𝑒 𝑅𝑎𝑡𝑒 =
𝑁𝑢𝑚𝑏𝑒𝑟𝐴𝑐𝑐𝑢𝑟𝑎𝑡𝑒𝑙𝑦𝐿𝑜𝑐𝑎𝑡𝑒𝑑
(𝑁𝑢𝑚𝑏𝑒𝑟𝐴𝑐𝑐𝑢𝑟𝑎𝑡𝑒𝑙𝑦𝐿𝑜𝑐𝑎𝑡𝑒𝑑 + 𝑁𝑢𝑚𝑏𝑒𝑟𝑁𝑜𝑡𝐷𝑒𝑡𝑒𝑐𝑡𝑒𝑑 + 𝑁𝑢𝑚𝑏𝑒𝑟𝑀𝑖𝑠𝑙𝑜𝑐𝑎𝑡𝑒𝑑)

where the “Performance Rate” is a number expressed as a percentage, “NumberAccuratelyLocated” is

the number of “Gunfire Incidents” occurring within the Coverage Area during the specified period for
which the Subscription Services produced an Accurate Location, NumberMislocated is the number of
Verified Incidents (a “Verified Incident” is an incident where The City has physical or other credible
evidence that gunfire took place) for which the Subscription Services produced an inaccurate location
(i.e., a Mislocated Incident), and NumberNotDetected is the number of Verified Incidents for which the
Subscription Services failed to report a location at all (i.e., Missed Incidents).

An “Accurate Location” shall mean an incident located by the Subscription Services to a latitude/longitude
coordinate that lies within a 25-meter radius of the confirmed shooters location (25 meters =
approximately 82 feet). “Detectable Gunfire” incidents are unsuppressed discharges of ballistic firearms
which occur fully outdoors in free space (i.e. not in doorways, vestibules, windows, vehicles, etc.) using
standard commercially available rounds of caliber greater than .25.

A-7
The Subscription Services Review Period is measured as the period commencing when the Incident
Review Center (IRC) receives the alert and the first audio download to the time it is published to the City.

The Subscription Services detects the sound of the muzzle blast and does not rely upon the sound of the
bullet traveling through the air. Therefore, the speed in which the bullet travels (subsonic or supersonic)
has no bearing on the Performance Rate.
The Subscription Services location system is not a “point protection” system and is therefore not designed
to consistently detect gunfire at every single location within the Coverage Area, but rather to Accurately
Locate 90% of the Detectable Incidents in aggregate throughout the entire Coverage Area. There may be
certain locations within the Coverage Area where obstacles and ambient noise impede and/or overshadow
the propagation of acoustic energy such that locating the origin at those positions is inconsistent or
impossible. The Performance Rate calculation is thus specifically tied to the Community Gunfire across
the entire Coverage Area.

Statistically Significant shall be defined as measurements and calculations which shall be performed as
follows: (a) Across an entire Coverage Area; (b) Aggregating over a period of at least 30 days under
weather conditions seasonally normal for the area; and (c) Provided that the total number of gunfire
incidents being counted is equal to or greater than: (i) thirty (30) incidents for systems of up to three (3)
square miles of Coverage Area, or (ii) ten (10) incidents multiplied by the number of square miles of
Coverage Area for systems where one or more Coverage Areas are three (3) square miles or larger

A-8
Exhibit B – Fee Schedule

I. General

(a) The Contractor shall be paid for the Subscription Services pursuant to this Contract a
maximum amount of One Million Five Hundred Thousand Dollars and 00/100 Dollars
($1,500,000.00 ) for the initial term for the Subscription Services provided under this Contract as
set forth in Exhibit A, Scope of Services.
(b) Payment for the proper performance of the Services shall be contingent upon receipt by
the City of invoices for payment to the City’s office of procurement payment portal. Each invoice
shall certify the total cost, itemizing costs when applicable. Contractor shall submit invoices in in
accordance with the following payment schedule:

• 50% of Year 1 fees due upon execution of agreement ($185,500)

• 50% of Year 1 fees due upon ShotSpotter activation (live) status ($185,500)*
• 100% of Year 2 fees due prior to 1st anniversary of ShotSpotter live status ($371,000)
• 100% of Year 3 fees due prior to 2nd anniversary of ShotSpotter live status ($371,000)
• 100% of Year 4 fees due prior to 3rd anniversary of ShotSpotter live status ($372,000)

Note: The total amount of the payments due for years 1 through 4 is One Million Four
Hundred Eighty-Four Thousand and 00/100 Dollars ($1,484,000.00). The total contract
price of One Million Five Hundred Thousand and 00/100 Dollars ($1,500,000.00) reflects
a difference of Sixteen Thousand and 00/100 Dollars ($16,000.00) which the City, at its sole
discretion, may use to pay for optional services such as Expert Witness fees, specified in
section III below.

*Should the City determine to have a phased Go Live (different sections within the
Coverage Area activated on different dates), the fees due upon service activation may be
split. The amount due for each Go Live will be based on the number of square miles
activated on that date.

Each invoice must be signed by an authorized officer or designee of the Contractor.

(c) The Fees includes unlimited Data storage during the term of this Contract.
(d) All references to currency are in US Dollars.

II. Billing All invoices submitted pursuant to this Contract must include part or item numbers
and part or item description, list price, and applicable discount. Items not properly invoiced will not
be paid. It is the Contractor’s responsibility to ensure the creation of invoice(s) in Oracle Cloud.
Invoices must meet the following conditions for payment:

(a) Price on invoice must correspond to the payment schedule above.

(b) Contractor must register in the Supplier Portal and be set up for ACH (wireless payment)
in order to receive payment.

B-1
 (c) Contractor registration and invoice submission instructions can be found on the City of
Detroit’s website at http://www.detroitmi.gov/Supplier. Questions should be directed to
procurementinthecloud@detroitmi.gov.

III. Optional Services

Expert Witness Services $350.00 per hour.

Expert Witness Services are available upon request and will be billed separately, including travel
expenses as further defined in Exhibit A. Under no circumstances shall the amount paid to the
Contractor exceed the amount stated in the first paragraph of this Exhibit B.

B-2
 City of Detroit
Office of Contracting and Procurement (OCP)
Request for Proposal

TABLE OF CONTENTS

1. INTRODUCTION ....................................................................................................... 2
2. MINIMUM QUALIFICATIONS ................................................................................ 2
3. ADHERENCE TO TERMS OF PROPOSALS........................................................... 2
4. REJECTION OF PROPOSALS .................................................................................. 2
5. BACKGROUND/DESCRIPTION OF ENVIRONMENT ......................................... 2
6. AWARD CLAUSE INCLUDING RENEWAL OPTIONS ........................................ 3
7. OPERATIONAL INFORMATION ............................................................................ 3
8. SCOPE OF WORK ..................................................................................................... 3
9. TECHNICAL INFORMATION.................................................................................. 5
10. RESPONDENT PERFORMANCE HISTORY .......................................................... 5
11. EVALUATION CRITERIA ........................................................................................ 6
12. EVALUATION PROCEDURE .................................................................................. 7
13. CONTRACT APPROVAL.......................................................................................... 7
14. REQUIRED SUBMITTAL INFORMATION ............................................................ 7
15. SUBMITTAL INSTRUCTIONS ................................................................................ 7
16. PREPARATION OF PROPOSAL .............................................................................. 8
17. REQUIRED CONTENT ............................................................................................. 8
18. REQUIRED FORMAT ............................................................................................... 9
19. REQUIRED COST PROPOSAL .............................................................................. 10
20. TECHNICAL APPROACH ...................................................................................... 10
21. QUESTION DEADLINE .......................................................................................... 10
22. ECONOMY OF PREPARATION ............................................................................ 10
23. PAYMENT ................................................................................................................ 10
24. ORAL PRESENTATION/DEMONSTRATION ...................................................... 10
25. ASSIGNMENT ......................................................................................................... 11
26. MISCELLANEOUS .................................................................................................. 11
27. MODIFICATION OF SERVICES AFTER CONTRACT APPROVAL ................. 11
28. BID DEPOSIT & PERFORMANCE BOND ............................................................ 11
29. CHANGES IN FACTS .............................................................................................. 11
30. CONFIDENTIALITY OF PROPOSALS ................................................................. 11
31. NEWS RELEASE ..................................................................................................... 11
32. REJECTIONS, MODIFICATIONS CANCELLATIONS…………………………...9
33. OFFICE OF INSPECTOR GENERAL……………………………………………..10

Updated: 11/30/15 Page 1 of 13

 City of Detroit
Office of Contracting and Procurement (OCP)
Request for Proposal

1. INTRODUCTION
The City of Detroit Office of Contracting and Procurement (OCP) requests proposals
from qualified firms to provide an outdoor area acoustic gunshot system to enable the
Detroit Police Department to precisely & quickly identify where there are gunfire
incidents.

2. MINIMUM QUALIFICATIONS
Proposals will only be accepted from those firms demonstrating a minimum of ONE (1)
year of experience providing the services requested in the RFP for projects of similar scope.

3. ADHERENCE TO TERMS OF PROPOSALS

A proposal once accepted by the City of Detroit, may become a binding contractual
obligation of the respondent. The failure of a successful respondent to accept this
obligation and to adhere to the terms of the respondent’s proposal may result in rejection
of the proposal and the cancellation of any provisional award to the respondent.

4. REJECTION OF PROPOSALS
The City of Detroit expressly reserves the right to reject any and all proposals, waive any
non-conformity, re-advertise for proposals, to withhold the award for any reason the City
determines and/or to take any other appropriate action that is in the best interest of the City.

5. BACKGROUND/DESCRIPTION OF ENVIRONMENT
The City of Detroit is a municipality incorporated under Michigan's Home Rule City Act,
MCL 117.1 et seq. Consistent with its Charter, the City is constantly seeking innovative
ideas to promote prosperity and growth. The City now believes that establishing a
gunshot detection system would be beneficial to its mission.

The Detroit Police Department is seeking a gunshot detection system to reduce gun
violence in the city by identifying more gunshot incidents, while being able to respond to
the runs more quickly. Last year, the City of Detroit experienced over three nonfatal
shootings or homicides per day. While this is marked decrease in previous years, there
still is too much gun violence in the city. The Department hopes to leverage a gunshot
detection system alongside its Real Time Crime Centers, camera technology, and LPRs to
better identify and prosecute individuals who pull the trigger. These technical solutions
work in concert with the Department's focused deterrence model which have had
demonstrable success in reducing gun violence.

DPD believes a gunshot detection system will have a large impact on the city's violent
crime prevention, because experience in Detroit and other cities suggests that a large
amount of gunshot incidents have no associated 9-1-1 call which results in DPD not
being able to respond to every associated unlawful discharge of a firearm. Further, even
for those gunshots that there is a 9-1-1 call, there is a costly delay while trying to obtain
the relevant information from the caller to be able to dispatch a run. A gunshot detection
system could allow DPD to respond to more gunshot incidents faster, which would have

Updated: 11/30/15 Page 2 of 13

 City of Detroit
Standardized Request for Proposal Template

the potential to better investigate these incidents & thereby ultimately reduce gun
violence.

In the precincts being considered for gunshot detection, DPD currently is planning to
build out Precinct-based Real Time Crime Centers (PRTCC). These PRTCCs will have
access to cameras in the precinct, License Plate Readers, and other crime analysis tools to
help virtually patrol and investigate crimes. Any gunshot detection software system
would need to be compatible with these PRTCCs as well as the Department's citywide
Real Time Crime Center and the Department's Communications 9-1-1 Call Center.

Within this context, the Detroit Police Department is submitting a Request for Proposals
(RFP). This does not constitute a commitment, implied or otherwise, that the City of
Detroit will take procurement action on this matter. Furthermore, neither the City of
Detroit will be responsible for any costs incurred in furnishing this information. In
general terms, this RFP is to gamer proposals for a scheduling software's capabilities to
automate current processes, integrate with UltiPro and Record Management Systems, and
better manage and evaluate overtime & current deployment.

In their respective submissions, Suppliers are asked to forward any technical details,
product brochures, literature, manuals, printed or otherwise published success stories, or
other reference materials pertaining to any item or product referenced in the Supplier’s
respective response.

Suppliers should bear in mind that their materials may be reviewed by both experts and
non- experts in the field. Plain English should be used to the extent feasible and any
special terms should be defined. The City has no expectation that the Supplier will reveal
information that is necessarily proprietary or that can be legitimately classified as a trade
secret of the company or proprietorship.

6. AWARD CLAUSE INCLUDING RENEWAL OPTIONS

If a contract is awarded as a result of this RFP it will be a City of Detroit Model Services
Contract (sample attached). The term of the contract will be for five (5) years. The City
anticipates one award as a result of the RFP.

7. OPERATIONAL INFORMATION
The respondent is expected to provide service in accordance with the terms of the executed
contract and under the rules, regulations, and supervision of the City. The respondent
should identify any existing subcontract relationships on which bids are predicated.

8. SCOPE OF WORK
The Detroit Police Department is seeking a gunshot detection system (hardware, software,
and support) including the following:
•Auditory Sensors that can identify impulsive acoustic events within a precise
location.

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Standardized Request for Proposal Template

•Gunshot detection alerts that can automatically notify the Precinct-Based Real
Time Crime Centers, the city-wide Real Time Crime Center, & the 9-1-1 call center
of a potential gunshot event with information pertaining to the number of shots, the
date & time, precise location & location of nearest address, and the direction of
travel alongside any additional geographic information.
•Gunshot detection alerts that can automatically be sent to officers in the field
through a mobile application.
•Ongoing training on any relevant hardware & software
•Ongoing support for any relevant hardware & software
•Gunshot detection alerts that sync to DPD's CAD system, its RIC consoles, and
other Genetec and Motorola solutions
o Optional, not required
•A portal of all historical incident data that can be easily accessed by crime analysts
with information pertaining to the date & time of the gunshot, the number of
gunshots, and the precise location of the gunshots.
o Optional, not Required
•Expert witness services provided by the proposer pertaining to the original gunshot
detection incident when relevant
o Optional, not Required

The Department is hoping for coverage in areas identified by the below map. In the 9th
Precinct, the coverage area is 2.3 square miles and inclusive of the 9-7 & 9-6 Scout Car
Areas. In the 8th Precinct, the Department is looking for coverage areas in SCA 8-3, 8-4,
8-7, and 8-8. The coverage area in the 8th precinct is 2 square miles. Thus the Department
is hoping to begin gunshot detection coverage areas in 4.3 square miles.

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Standardized Request for Proposal Template

9. TECHNICAL INFORMATION
Proposer shall provide a detailed description of the following items previously identified
in the Scope of Work:
•Auditory Sensors including the level of geographic precision of the sensors, the
ability of the sensors to identify direction of travel, and any other features of the
auditory sensors that would be relevant for the Department's decision of the sensors'
efficacy
•The auditory review process.
•Please provide available statistics pertaining to the below items:
o Accuracy of the auditory sensors in detecting gunshot detection (if
available)
o The average delay from the time of the initial incident to completing the
review process
o Any other relevant statistics pertaining to the efficacy of the gunshot
detection system & the auditory review process specifically
•Gunshot Detection Alerts Process Flow
•A list of software & hardware packages that are compatible with the gunshot
detection software including but not inclusive of if the alerts can integrate into
CAD, Genetec, smartphone devices, & Motorola RICs
o Optional, not required
•Reporting capabilities of previous gunshot incidents identified by the gunshot
detection software including specific columns available and if the reports can
integrate into other software technologies including but not inclusive of if the
software can integrate with Tableau and any other relevant reporting software
o Optional, not required
•Please describe the frequency, duration, location, and any other pertinent details
of the training services offered by the Proposer
o Optional, not required
•Please describe any other relevant service including but not limited to Expert
witness & incident report services provided by the Proposer.
o Optional, not required
•Any other relevant information pertaining to the gunshot detection system and the
proposer's supporting services.
•The System must allow for expansion if required by The City of Detroit.

10. RESPONDENT PERFORMANCE HISTORY

The respondent shall provide the following information:
a. Identify in detail at least three (3) similar projects by name, subject matter, location,
respondent’s services provided and the length of time respondent’s service were
provided on each. Included in this information shall be the description of services
provided and the time period during which the services were provided;
b. Identify the respondent’s key personnel working on the contracts identified in
“section a” above;

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Standardized Request for Proposal Template

c. Identify any contracts which were terminated for any reason;

d. Identify any claims or lawsuits that have been brought against your organization as
a result of any services provided within the last five (5) years;
e. Attach your organization’s financial statements (CPA Certified) for the previous
three years; and
f. Provide an organization chart indicating the key personnel who will provide
services resulting from this RFP. Also provide a resume for each of the key
personnel.

11. EVALUATION CRITERIA

PHASE ONE CRITERIA – NON-ECONOMIC DEVELOPMENT

Criteria of Evaluation Maximum Evaluation

Points
Quality of the gunshot detection system which
includes, the system's ability to quickly &
1 40
accurately locate gunshot incidents within a
precise location and extended warranty offered.
Clarity of identified Support Systems, which
2 includes but is not limited to training and other 15
technical support offered.

3 Cost Proposal 10

65 points

Maximum points for Phase One Criteria not to exceed sixty five (65) points.

PHASE TWO CRITERIA – PRIME CONTRACTOR ECONOMIC DEVELOPMENT

Detroit headquartered business 15 points

Detroit based business 5 points

Maximum points for phase two not to exceed fifteen (15) points.

PHASE THREE CRITERIA ECONOMIC DEVELOPMENT & CONTRACT

PERFORMANCE OF PRIME AND SUBCONTRACTOR(S)

Detroit headquartered business 20 points

Detroit based business 10 points

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Standardized Request for Proposal Template

Maximum points for phase three not to exceed twenty (20) points

12. EVALUATION PROCEDURE

Following the receipt of proposals, a City designated Evaluation Committee will evaluate
each response. All PROPOSALS, which meet the required format of this RFP, will be
evaluated. Any Proposals determined to be non-responsive to the specifications or other
requirements of the RFP, including instructions governing submission and format, will be
disqualified unless the City determines, in its sole discretion, that non-compliance is not
substantial or that an alternative proposed by the Respondent is acceptable.

The City may request oral presentations and make site visits at Respondent’s facility, and
may request a demonstration of Respondent’s bids. If scheduled, a final determination will
be made after the oral presentations and/or demonstrations are complete. The City may
also at its sole discretion, elect to rank order the qualified proposals, and negotiate with
some limited number of the highest scored qualified respondents. A final determination
would include the cumulative inputs of this evaluation procedure. All decisions reached by
the Evaluation Committee will be by consensus.

13. CONTRACT APPROVAL

Upon contract award, the City and the respondent shall execute a Professional Services
Contract, which shall contain all contractual terms and conditions in a form provided by
the City. No contract shall become effective until the contract has been approved by the
required City Departments and Detroit City Council and signed by the City of Detroit Chief
Procurement Officer. Prior to the completion of this approval process, the respondent shall
have no authority to begin work under the contract. The Chief Financial Officer shall not
authorize any payments to the respondent prior to such approvals; nor shall the City incur
any liability to reimburse the respondent regarding any expenditure for the purchase of
materials or the payment of services.

14. REQUIRED SUBMITTAL INFORMATION

The following documents must be submitted with all proposals:
 Organizational Description & History
 Previous Client List
 Cover Letter
 Detailed description of services and delivery model
 Itemized Cost Proposal

15. SUBMITTAL INSTRUCTIONS

All proposals must be submitted through the Oracle system. Each respondent is responsible
for ensuring that its proposal is received by the City on a timely basis. Faxed or mailed
proposals will not be accepted.

Firms shall not distribute their proposals to any other City office or City employee.
Proposals received become the property of the City. The City is not responsible for any
costs associated with preparation or submission of proposals. All proposals submitted by

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Standardized Request for Proposal Template

the due date will be recorded in the Oracle System. Responses received will not be
available for review. Proposals received will be subject to disclosure under applicable
Freedom of Information Act. An officer of the company authorized to bind the company
to a contractual obligation with the City must sign the proposals in the Oracle System. The
contact person regarding the proposal should also be specified by name, title, and phone
number. The successful respondent will receive an award letter. Respondents who are not
awarded will receive a notification that the award decision has been made.

16. PREPARATION OF PROPOSAL

The proposal shall include all forms as specified in these instructions. Each proposal shall
show the full legal name and businesses address of the prospective respondent, including
street address if different from mailing address, and shall be signed and dated by the person
or persons authorized to bind the prospective respondent. Proposals by a partnership or
joint venture shall list the full names and addresses of all parties to the joint venture. The
state of incorporation shall be shown for each corporation that is a party to the proposed
joint venture.

Respondent shall provide notice in its proposal to take exception to any requirement of the
RFP. Should a respondent be in doubt as to the true meaning of any portion of this RFP or
find any patent ambiguity, inconsistency, or omission herein, the respondent must make a
written request for an official interpretation or correction in accordance with the
instructions for submitting questions as specified in this RFP.

Respondents are advised that no oral interpretation, information or instruction by an officer

or employee of the City of Detroit shall be binding upon the City of Detroit.

17. REQUIRED CONTENT

Bid responses must include the following content:

Letter of Transmittal
The prospective respondent’s proposal shall include a letter of transmittal signed by an
individual or individuals authorized to bind the prospective respondent contractually. The
letter must state that the proposal will remain firm for a period of one hundred twenty (120)
days from its due date and thereafter until the prospective respondent withdraws it, or a
contract is executed, or the procurement is terminated by the City of Detroit, whichever
occurs first.

Required Clearances and Affidavits

The following clearances and affidavits are required to do business with the City of
Detroit. Approved clearances are not required to submit a response to the RFP but will be
required of the successful respondent prior to City Council approval.

Respondents must submit requests for clearance and affidavits electronically in the Oracle
system. If there is documentation that the respondent is required to provide to the City that
contains personal identifiable information, the respondent must submit the request for

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Standardized Request for Proposal Template

clearance through https://detroitmi.gov/departments/office-chief-financial-officer/ocfo-

divisions/office-treasury/clearances-income-tax-and-accounts-receivable and send the
confidential information to the City separately via email. Do not attach copies of clearance
documents or affidavits to the bid response.

Accuracy and Completeness of Information

All information pertaining to the prospective respondent’s approach in meeting the
requirements of the RFP shall be organized and presented in the prospective respondent’s
proposal. The instructions contained in this RFP must be strictly followed.

Accuracy and completeness are essential. Omissions and ambiguous or equivocal

statements will be viewed unfavorably and may be considered in the evaluation. Since all
or a portion of the successful proposal may be incorporated into any ensuing contract, all
prospective respondents are further cautioned not to make any claims or statements that
cannot be subsequently included in a legally binding agreement.

In your introduction, please include, at a minimum, the following information and/or

documentation:
 A statement to the effect that your proposal is in response to this RFP;
 A brief description of your firm;
 The location of the firm’s principal place of business and, if different, the location
of the place of performance of the contract;
 A commitment to perform the requested work in accordance with the requirements
outlined in this RFP;
 The name and contact information of the of the firm’s partner and or manager(s)
that will be in charge of this project;
 The firm’s financial solvency, fiscal responsibility and financial capability;
 The age of the firm’s business and the average number of employees during each
of the last three (3) years;
 The firm’s current tax status and Federal Employer Identification Number; and
 Evidence of any licenses or registrations required to provide the services under this
contract.

18. REQUIRED FORMAT

To be considered responsive, each proposal must, at a minimum, respond to the following
RFP sections in their entirety:
 Overall Scope of Work and Operational Responsibilities;
 Respondents Performance History;

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Standardized Request for Proposal Template

 Proposal Submission Procedure; and

 Certificate of Good Corporate Standing, if a corporation Evaluation of the
respondent’s proposal will be made in accordance with Section 11 of this RFP.

19. REQUIRED COST PROPOSAL

Respondents are requested to make a firm cost proposal to the City of Detroit. If a contract is
entered into as a result of this RFP, it will be a contract for fees as related to providing all
requested services, with a price not to exceed the total price quoted in the proposal. The City
of Detroit reserves the right to select proposals from the most responsible respondents with the
most reasonable costs. The City reserves the right to select one or more firms to perform all or
separate parts of this function

Indicate the fees you will charge to perform the services. Attach a schedule of fees or hourly
rates broken out for each type of staff member that will work on the project (i.e., Sr. Partner,
Partner, Associate Paralegal Typist, etc.)

20. TECHNICAL APPROACH

Present a brief description of procedures to be followed, presented in a form which will
best assist the City is evaluating your firm’s ability to identify, evaluate and communicate
while providing the requested services. This must include the procedures for design,
approval and builds of aftermarket unit customization.

21. QUESTION DEADLINE

All questions regarding the RFP shall be submitted through the Oracle System.
Respondents shall provide notice to take exception to any requirements of the Request for
Proposals. Such exceptions may reflect negatively on the evaluation of the Proposal. The
City of Detroit does not guarantee a response to questions not submitted after the question
deadline.

22. ECONOMY OF PREPARATION

Proposals should be prepared simply and economically providing a straight forward,
concise description of the contractor’s ability to meet the requirements of the RFP.
Emphasis should be on the completeness and clarity of content.

23. PAYMENT
All properly executed invoices submitted by the successful respondent will be paid in
accordance with the City of Detroit Prompt Payment Ordinance.

24. ORAL PRESENTATION/DEMONSTRATION

The City reserves the right, at its own discretion, to request Oral Presentations regarding
proposals submitted in response to the RFP. Failure to make an oral presentation will be
grounds for rejection of your proposal. Proposers will be notified by the Office of
Contracting and Procurement of the date, time and location for Oral Presentations. The
City will evaluate any device post an in-person demonstration. The City’s designated team
will evaluate the Suppliers RFP submission and select up to three of the top rated Suppliers

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Standardized Request for Proposal Template

to participate in a demonstration. The cost of the Supplier sponsored pilot will be the
responsibility of the Supplier. The Supplier will be responsible for providing all
components required for testing. Any data captured during the demonstration will be
retained by the Supplier for a period of 120 days. Authorized DPD personnel must have
access to any captured data, and shall be available upon request during the period of 120
days.

25. ASSIGNMENT
The services to be performed by the respondent shall not be assigned, sublet, or transferred,
nor shall the respondent assign any monies due or to become due to him under any contract
entered into with the City pursuant to these specifications, without prior written approval
of the City.

26. MISCELLANEOUS
It shall be the responsibility of the respondent to thoroughly familiarize themselves with
the provisions of these specifications. After executing the contract, no consideration will
be given to any claim of misunderstanding.

The respondent agrees to abide by the rules and regulations as prescribed herein by the
City as the same now exists or may hereafter from time-to-time be changed in writing.

27. MODIFICATION OF SERVICES AFTER CONTRACT APPROVAL

The City reserves the right to modify the services provided by the respondent awarded a
contract. Any modification and resulting changes in pricing shall be made by amendment
to the contract by the respondent and the City.

28. BID DEPOSIT & PERFORMANCE BOND

Not applicable

29. CHANGES IN FACTS

Proposers shall advise the City during the time the Proposal is open for consideration of
any changes in the principal officers, organization, financial ability of, or any other facts
presented in the proposal with respect to the proposer or the proposal immediately upon
occurrence.

30. CONFIDENTIALITY OF PROPOSALS

Proposals shall be opened with reasonable precautions to avoid disclosure of contents to
competing offers during the process of evaluation. Once proposals have been publicly
recorded they are subject disclosure as per the requirements of the Michigan Freedom of
Information Act.

31. NEWS RELEASE

News releases pertaining to these proposal specifications or the provisions to which they
relate shall not be made without prior approval of the City and then only in coordination
with the City.

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32. REJECTIONS, MODIFICATIONS, CANCELLATIONS

The City of Detroit expressly reserves the right to: 1) accept or reject, in whole or in part,
any and all proposals received; 2) waive any non-conformity; 3) re-advertise for proposals;
4) withhold the award for any reason the City determines; 5) cancel and/or postpone the
request for proposals, in part or in its entirety, and/or, 6) take any other appropriate action
that is in the best interest of the City. This RFP does not commit the City of Detroit to
award a contract, to pay any cost incurred in the preparation of a proposal under this
request, or to procure or contract for services.

The City expressly reserves the right to modify, add, or delete, any item(s) from the
proposal it deems necessary prior to the issuance of an award. The City reserves the right
to order any amount of vehicles and additional services it deems in the best interest of the
City.

33. OFFICE OF INSPECTOR GENERAL

33.01 In accordance with Section 2-106.6 of the City Charter, this Contract shall be voidable
or rescindable at the discretion of the Mayor or Inspector General at any time if a Public
Servant who is a party to the Contract has an interest in the Contract and fails to disclose
such interest.

33.02 This Contract shall also be voidable or rescindable if a lobbyist or employee of the
contracting party offers a prohibited gift, gratuity, honoraria or payment to a Public
Servant in relation to the Contract.

33.03 A fine shall be assessed to the Contractor in the event of a violation of Section 2-106.6
of the City Charter. If applicable, the actions of the Contractor, and its representative
lobbyist or employee, shall be referred to the appropriate prosecuting authorities.

33.04 Pursuant to Section 7.5-306 of the City Charter, the Inspector General shall investigate
any Public Servant, City agency, program or official act, contractor and subcontractor
providing goods and services to the City, business entity seeking contracts or
certification of eligibility for City contracts and person seeking certification of
eligibility for participation in any City program, either in response to a complaint or on
the Inspector General’s own initiative in order to detect and prevent waste, abuse, fraud
and corruption.

33.05 In accordance with Section 7.5-310 of the City Charter, it shall be the duty of every
Public Servant, contractor, subcontractor, and licensee of the City, and every applicant
for certification of eligibility for a City contract or program, to cooperate with the
Inspector General in any investigation pursuant to Article 7.5, Chapter 3 of the City
Charter.

33.06 Any Public Servant who willfully and without justification or excuse obstructs an
investigation of the Inspector General by withholding documents or testimony, is
subject to forfeiture of office, discipline, debarment or any other applicable penalty.

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33.07 As set forth in Section 7.5-308 of the City Charter, the Inspector General has a duty to
report illegal acts. If the Inspector General has probable cause to believe that any
Public Servant or any person doing or seeking to do business with the City has
committed or is committing an illegal act, then the Inspector General shall promptly
refer the matter to the appropriate prosecuting authorities.

Page 13 of 13
IN THE FURTHER DESCRIPTION OF THIS PROPOSAL, WE SUBMIT INFORMATION
IDENTIFIED AS FOLLOWS:
BIDDING UNDER THE NAME OF:
(PRINT FULL LEGAL NAME)
(PURCHASE ORDER WILL BE ISSUED AND PAYMENT WILL BE MADE ONLY IN THE NAME ABOVE. ALL PAYMENTS
ARE TO BE MAILED. VENDOR PICK-UP OF PAYMENT IS NOT ACCEPTABLE)

MAILING ADDRESS: _________________________________________________

__________________________________________________
(ZIP CODE)

PAYMENT MAILING ADDRESS: _________________________________________________

(IF DIFFERENT FROM ABOVE) __________________________________________________

(ZIP CODE)

BUSINESS ADDRESS: _________________________________________________

(CHECK ONE): __________________________________________________

LEASE_____ RENT ____ OWN _____ (ZIP CODE)

FEDERAL EMPLOYER ID #: __________________________________________________

CHECK ONE:

( ) CORPORATION, Incorporated Under The Laws Of The State Of ______________________________

If Other Than Michigan Corporation, Licensed To Do Business In Michigan? _______YES _______NO

( ) PARTNERSHIP, Consisting of (List Partners)

_________________________________________ _________________________________________

_________________________________________ _________________________________________

( ) ASSUMED NAME (Register No.) ___________________________________________

( ) INDIVIDUAL

IF NOT SIGNED BY OFFICER OF FIRM, THE PERSON SIGNING MUST HAVE AUTHORITY TO COMMIT
THE FIRM TO THIS BID.
E-MAIL: _______________________________ AUTHORIZED SIGNATURE:
DATE __________________________________ SIGNED: ___________________________________________

TELEPHONE NO. _______________________ PRINTED___________________________________________

FAX NO.________________________________ TITLE/POSITION____________________________________

ALTERNATE COMPANY CONTACT
CELL PHONE NUMBER: _____________________________________________________
 STATEMENT OF NO BID

RFQ #19JW18544

We, the undersigned, have declined to quote on Bid No. RFQ 19JW18544 for the following reason
(s): (Check all that apply)

__________ We do not offer this product or the equivalent.

__________ Unclear description/specifications (specify below).

__________ Insufficient time to respond to the invitation to bid.

__________ Unable to meet the bond requirements.

__________ Our product schedule would not permit us to meet your needs at this time.

_________ City of Detroit payment issues (specify below).

_________ Other (specify below).

REMARKS: ___________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________

Company Name:__________________________________________________________

Signature: ___________________________________________ Date: _______________

RFQ #19JW18544 Page 2 of 5

 TERMS AND CONDITIONS
1. GENERAL CONDITIONS
It is the responsibility of the Bidder to review General Conditions. In your quotation a distinction
between dollars and cents must be made. Also, illegible bids may be grounds for rejection of your
bid. All changes made to the bid form altering, price, terms, quote and/or conditions. MUST be
crossed out and initialed. Failure to initial any changes will be grounds for rejection of your bid.
CORRECTION FLUID IS NOT ACCEPTABLE.

2. LOCAL PREFERENCE CONDITIONS

It is the responsibility of the Bidder to review the Local Preference Conditions attached to this bid
and comply with all requirements therein.

3. MINOR DEVIATIONS
Specifications referred to herein are used to indicate desired type, and/or construction, and/or
operation. Other products and/or services may be may be offered if deviations from specifications
are minor and if all deviations are properly outlined and stated in the bid document. Failure to
outline all deviations will be grounds for rejection of your bid.
The decision of the City of Detroit, acting through the Chief Procurement Officer, shall be final as
to what constitutes acceptable deviations from specifications.

4. AWARD
One award may be made as a result of this RFP, as determined by the City of Detroit based on
contractor s abilit and/or equipment as described in the specification. Blank spaces are considered
to be no offer. The City of Detroit reserves the right to delete any item(s) from the award. All
awards are subject to Ordinance No. 15-00.
5. SPECIFICATION CHECK
We have read the specifications thoroughly and we:
( ) Are able to meet specifications without deviation.
( ) All deviations are properly outlined on an attached sheet marked ________________ for
identification.
SIGNED: __________________________________________
TITLE: ___________________________________________

6. PRICE
Contract prices are FIRM for the entire contract period.

7. TERMS OF PAYMENT
A discount of _____% will be allowed for payment of invoice within forty-five (45) days of
delivery and acceptance of the above items and vendor's invoice. Other terms less than forty-five
(45) days, E,O,M., Proximo, etc., shall not be considered. Payment terms will not be considered
in determining the award of the contract(s), except in the case of tie bids. However, discounts may
be offered to facilitate prompt payment.
The City of Detroit reserves the unqualified right to reject any bid, which includes a provision for
a service charge levied by a vendor when payment by the City is not made within a specified time
period.
This paragraph supersedes paragraph 4 of the General Conditions.

RFQ #19JW18544 Page 3 of 5

 8. INVOICING:
All invoices submitted against the contract must include part or item numbers and part or item
description, list price, and applicable discount.
Items not properl invoiced will not be paid. It is the vendor s responsibilit to ensure deliver
of invoice(s) to the proper City Dept/Div/Personnel. Invoices must meet the following conditions
for payment:
a) Price on invoice must correspond to the pricing listed on purchase order and/or contract.
b) Contractor must submit price lists in accordance with bid requirements.
c) Original invoice must be submitted to the appropriate Cit of Detroit Account s Pa able
Section.
Copy of invoice must be submitted to the department personnel identified on the purchase order
as being responsible for processing payment. If a department contact person is not listed on the
purchase order the vendor shall request in writing, from the Purchasing Division the name and
phone number of the contact person responsible for processing payment.

9. F.O.B.
Goods are to be F.O.B. delivered to location(s) within the City of Detroit and other specified
locations as indicated.

10. CONTRACT ACCEPTANCE

The successful bidder shall be notified of the execution of a contract by the City of Detroit upon
issuance of a "Contract Award Notice" or a Purchase Order. The "Contract Award Notice" shall
contain the date the contract award was approved.
The signed, accepted bid of the successful bidder will be the contract between the bidder and the
City of Detroit, containing the full description of all contractual terms and conditions. A copy of
your signed bid will not be mailed to you. Each bidder shall keep a copy of his/her signed bid form
for future reference.

11. CLEARANCES
The successful vendor will be required to obtain approved clearances from the Income Tax
Division, Revenue Collections Division and Human Rights Department prior to City Council
approval of the contract. Clearance forms for these agencies have been attached to this RFQ. Please
fill them out completely and return them to the respective agencies by mail, fax, or dropping them
off to the individual offices. It is the Vendor s responsibilit to obtain clearances. Approved
clearances are not required to submit the bid, but will be required of the successful vendor prior to
City Council approval.

12. BID WITHDRAWAL

No bid shall be withdrawn for 90 days from submission deadline. Bidders may reduce this period
if stated on bid, but such bids may be rejected on the basis of the reduced time period.

This paragraph supersedes paragraph 14 of the General Conditions.

13. EQUALIZATION FACTOR

In accordance with Ordinance No. 15-00, any Detroit based firm shall be deemed a better bid than
the bid of any competing firm which is not Detroit-based, whenever the bid of such competing firm
shall be equal to or higher than the bid of the Detroit-based firm after the appropriate equalization
percentage credit from the Equalization Allowance Table has been applied to the bid of the Detroit-
based firm. The firm making the lowest bid thus evaluated shall be deemed the lowest bidder.
Vendors who wish to receive Equalization credit for bids submitted must fill out the attached
Equalization Eligibility Form and return it with their bid document along with any supporting

RFQ #19JW18544 Page 4 of 5

 documentation required to substantiate eligibility. The Equalization Eligibility Form and
supporting documentation must be submitted with each and every bid response submitted by the
vendor. Failure to return the Equalization Eligibility Form and/or Affidavit along with required
documentation will result in equalization credit not being applied to your bid.

14. ENVIRONMENTALLY FRIENDLY GOODS/COOPERATIVES:

This bid solicitation includes the Cit of Detroit s preference for environmentall preferred goods
and services where applicable. It also is the intention of the City to utilize and compare responses
to this bid to available cooperative purchases resources. For a complete explanation refer to
Chapter 18 of the 1984 Detroit City Code, Finance and Taxation, Article V, Purchases and
Supplies, Division 1, Goods and Services.

MiDeal
U.S. General Services Administration (GSA)
Western States Contracting Alliance
National Intergovernmental Purchasing Alliance (IPA)
National Joint Powers Alliance (NJPA)
U.S. Communities

15. REJECTIONS, MODIFICATIONS, CANCELLATIONS

The City of Detroit expressly reserves the right to: l) accept or reject, in whole or in part any and
all quotes received; 2) waive any non-conformity; 3) re-advertise for quotes; 4) withhold the award
for any reason the City determines; 5) cancel and/or postpone the request for quotes, in part or in
its entirety, and/or, 6) take any other appropriate action that is in the best interest of the City. This
RFQ does not commit the City of Detroit to award a contract, to pay any cost incurred in the
preparation of the quotes under this request, or to procure or contract for services.

RFQ #19JW18544 Page 5 of 5

 Ralph Clark
CEO

Laura Golden
Exec Asst

Customer Support &

Finance Marketing Sales Customer Success Operations Engineering
Professional Services
Alan Stewart Sam Klepper Gary Bunyard Paul Reeves Joe Hawkins Paul Ames
Nasim Golzadeh

Product
Accounting Sales Team Customer Success IRC Project Management Engineering
Mgmt

Marketing
Sales Ops
Human Resources Field Technology
Customer Support

Procurement Forensic Services

ShotSpotter, Inc. Copyright ©2020

 Kent McIntire, PMP
(PMP/PMI: 1740777)

SUMMARY

Over 20 years of experience in the enterprise software and technical professional services in
both private and public sectors. Proven track record of leadership, direction, and day-to-day
guidance for team members in support of organizational mission, vision, goals, strategies and
individual professional growth. Strong customer-focused delivery and advocacy.
Demonstrated ability to work effectively at all organizational levels. Professional services
leadership, strategic planning, and creative problem solver. Managing cross-functional teams,
local and remote, to ensure key milestone achievements are exceeded.

Orchestrated complex, results-driven projects from inception through completion while

enhancing key working relationships throughout the organization. Effective negotiator,
excellent decision-maker & collaborator with a positive record of achievement, strong history
of success.

PROFESSIONAL EXPERIENCE

ShotSpotter, Inc. Newark, California 2017–Present

Senior Project and Programs Manager

▪ Working with local, state and federal law enforcement overseeing the implementation
of active shooter location technology. Helping law enforcement save lives and
improve community safety.
▪ Managing numerous projects at the same time.

Sierra Wireless Vancouver, BC Canada 2013 – 2017

Senior Project Management Office (PMO) Manager

▪ Direct and oversee the Program Management Office (PMO) to ensure Sierra Wireless
programs and projects meet organization goals and requirements. Implement and
provide guidance related to PMO policies and procedures, leads and directs the work
of project management staff, and works with other department leaders to define,
prioritize, and develop projects and programs. Primary focus was US public safety
and international law enforcement deployments.
▪ Managing numerous projects at the same time.
ShotSpotter, Inc. Newark, CA 2012 - 2013
Senior Project Manager

▪ Working with local, state and federal law enforcement overseeing the implementation
of active shooter location technology. Helping law enforcement save lives and
improve community safety.
▪ Managing numerous projects at the same time.

New World Systems Troy, MI 2006 - 2012

Senior Project Manager and Director of Professional Services

▪ Managed a highly technical team of 15 individuals responsible for the deployment of

the Mobile Field Reporting solution and various interfaces. Upon taking over the team,
reorganizing, and adding structure, the team went from underperforming to beating
defined quotas quarter after quarter.
▪ Senior Project Manager focusing on large multi-jurisdictional public safety solutions.
Overseeing the implementation of Computer-Aided Dispatch, Law Enforcement
Records Management, Corrections/Jail Management, Fire Records Management,
Mobile and Field Reporting, State/NCIC implementations, and numerous interface
solutions.
▪ Managing numerous projects at the same time.

EDUCATION

AS Commercial Radio Broadcasting Meyer Technical College, South Dakota

Project Management Professional (PMP) Project Management Institute

NREMT-B (expired) Avera McKennan Hospital, Sioux Falls, SD
Critical Incident Management & others Emergency Management Institute, FEMA
NCIC/NLETS (not current) CJIS Division, FBI
JEFFERY A. MAGEE (651) 707-2293
jmagee&@shotspotter.com

PROFILE

Accomplished and proven law enforcement professional and expert criminal

investigator with 25 years of service to the Departments of Justice and
Treasury. Demonstrated ability to implement and manage strategic mission
oriented programs related to Federal alcohol, tobacco, firearms, explosives, and
arson laws and regulations and to the personnel who carry out the ATF mission.
Well-regarded leader employing open-mindedness, positivity, empathetic listening,
and creative problem-solving to mitigate risk, address challenges, reduce costs,
and produce results. A proven, trusted, and decisive leader with high social and
emotional intelligence who has worked consistently in diverse high-stress
environments. Known ability to work well with anyone and to form and galvanize
teams to accomplish a mission. Member, Senior Executive Service with sustained
outstanding demonstration of core competencies.

CORE EXECUTIVE STRENGHTS

Leading Change
Constructed and implemented “Frontline,” a crime-fighting business strategy that
led to a reduction in violent crime in Minneapolis and Milwaukee.

Leading People
United law enforcement groups across the state, local and Federal levels in
Minneapolis, Milwaukee, and Chicago by creating a partnership to share critical
information and investigative tactics. Outstanding communication skills.

Results Driven
Successful in securing assets for local police departments to facilitate case
management and produces results that demonstrate safer streets and
neighborhoods.

Business Acumen
Led major complex investigations and enforcement initiatives that concentrated fiscal
and human capital resources judiciously. Strategically aligned human capital
resources for maximum return on investment.

Building Coalitions
Assessed resources and created a Crime Gun Intelligence Center that brings
together various job series to assess intelligence and produce leads for criminal
investigators.
JEFFERY A. MAGEE
( 651) 707-2293
EXPERIENCE

ShotSpotter

Director of Customer Success, October 2017 - Present

Chicago, IL

• As the Director of Customer Success, I am tasked with assisting law enforcement

partners in the utilization of ShotSpotter’s proven gunshot detection and location
services. An important component of this responsibility involves a focus on assisting
agencies to enact model policies and best practices to improve officer safety,
situational awareness and the attainment of successful outcome measures to
addresses gun violence. In addition to focusing on overall gunfire reductions, I
manage annual account reviews and work with customers to ensure increased
adoption of process change, utilization of new and improved end user interfaces,
development of gunshot reduction metrics, documentation of case closures impacted
by ShotSpotter, and to assist agencies with trust building and positive community
engagement.

Key Accomplishments
• Worked with multiple ShotSpotter Project Managers to successfully deploy 7
ShotSpotter deployments for the Chicago Police Department Districts in the City of
Chicago.
• Conducted over 8 Annual Account Reviews in the City of Chicago.
• Conducted over 7 Best Practices and Strategies sessions to provide the one-on-on
levels of guidance and instruction to customers in various assignments, including
Operations, Investigations, Support Services, US and Local Prosecutors.
• Assist the Chicago Police Department with organizational change necessary to
institutionalize ShotSpotter’s gunshot detection services within their districts.
• Conducted Program and Training evaluations to assist agencies with improving
their gunshot reduction strategies, while focusing on process and training
improvements specific to their department.
• Completed Customer Success plans for agencies, to improve their overall
ShotSpotter program and related gun violence reduction programs.

United States Department of Justice (DOJ)

Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF)

Deputy Assistant Director, October 2016 – September 2017

Human Resources and Professional Development
ATF Headquarters, Washington, DC

Responsible for leading the professional development and training for an agency
with 5,100 employees comprised of special agents, industry operations
investigators and professional and administrative staff. Supervise 4 senior
JEFFERY A. MAGEE
( 651) 707-2293
managers with oversight of: ATF’s National Academy, Center for Talent Solutions
(CTS), Leadership and Professional Development Division (LPDD) and
Recruitment, Diversity and Hiring Division (RDHD). Responsible for the
management and administration of enterprise-wide Bureau training programs for all
employees including leadership development, mandatory/compliance training
programs, new manager training, IT and desktop systems training, establishing
standards for curriculum development and training delivery, and ATFs National
academy training for new Special agents and Industry Operations Investigators and
career-long advanced professional training in every core area of ATF’s mission.

Special Agent in Charge, August 2015 – October 2016

Chicago Field Division

Responsible for protecting the public through oversight of all law enforcement and
regulatory operations in Illinois and Northern Indiana. Led more than 150 special
agents, industry operations investigators and administrative personnel. Used keen
ability to build coalitions among all Chicagoland law enforcement personnel at the
local, state and federal levels. Ensured safety and security of enforcement
personnel within the investigative arena and the workplace. Ensured constant
communication and information sharing among all law enforcement.

Assistant Special Agent in Charge, November 2012 – August 2015

St. Paul Field Division, St. Paul, MN

Served as a key management official in the St. Paul Field Division, advising the
Special Agent in Charge in the overall management and coordination of the law
enforcement programs and operations for the Division. Served as a second level
supervisor over five field operations offices and the Division’s operations office,
managing personnel and a budget, and served as mentor and coach to new
supervisors and employees. Developed and maintained law enforcement contacts
throughout Minnesota. Served as first-line crisis management during numerous
shooting incidents in the Field Division.

Special Assistant to the Acting Director, Sept. 2011 - November 2012

ATF Headquarters, Washington, DC

Served as confidential assistant, policy advisor, and security detail to ATF Director B.
Todd Jones, traveling with him weekly for more than a year. Facilitated his initial
year at ATF, providing him copious amounts of information that helped him navigate
ATF the first year and helped him quickly build morale, consensus, and teamwork
within ATF. Using well-honed leadership traits, created and led a team of wide-
ranging employees to enhance and change ATF’s mission to focus on violent crime
by creating the Frontline strategy. Frontline launched in 2013 with approval from
ATF’s executive leadership team and high-ranking officials at the Department of
Justice.
JEFFERY A. MAGEE
( 651) 707-2293
St. Paul Group III/IV Field Offices Supervisor, May 2005 - November 2011
St. Paul Field Division, St. Paul, MN

As a Supervisor, responsible for all investigative activity and risk management

within ATF jurisdictional authority. Worked with the ATF/Minneapolis Police
Department (MPD) Firearms Enforcement Task Force. Supervised a diverse
workforce of subject matter experts, including agents assigned to the Federal
Bureau of Investigation (FBI) joint terrorism task force. Adeptly handled personnel
matters. Managed Emergency Support Function for natural disasters, serving as
event coordinator for massive mid-west floods.

Program Manager, June 2002 - May 2005

ATF Headquarters, Washington, DC

In the Intelligence Division, coordinated complex tobacco diversion investigations

across the nation, some of which had direct links to international and domestic
terrorism. Worked with regulatory enforcement. Advised all levels of field
management in proper protocols and techniques in tobacco diversion
investigations, some of the most complex investigations within ATF’s jurisdiction.
Produced effective intelligence products. In the wake of September 11, 2001,
assigned to the Strategic Information Operations Center (SIOC), as an ATF
representative to the multi-agency body. Created executive summaries of ATF’s
plan of action in response to acts of terrorism, and provided the SIOC with expert
knowledge on firearms, arson and explosive laws.

Special Agent, December 1992 - February 2001

St. Paul Field Division, St. Paul, MN

Initiated, managed and conducted investigations related to the federal criminal

statutes covering firearms, arson and explosives offenses, and worked closely with
the United States Attorney’s Office and ATF regulatory personnel. Proactively
worked with the Minnesota Gang Strike Force on long term federal, state and local
investigations and built sustainable partnerships with state and local law
enforcement.

EDUCATION AND PROFESSIONAL DEVELOPMENT

Bachelor of Science (Criminal Justice) – St. Cloud State University, St. Cloud,
Minnesota (1989)
The International Association of Chiefs of Police (IACP), Leadership in Police
Organizations (June 2015)
ATF’s Executive Skills for Managers (ES-301)
Leading Change and Leading People, Martinsburg, WV, 40 hours (April 2016)
Emergency Support Function Administration, ESF-13, (January 2009)
JEFFERY A. MAGEE
( 651) 707-2293
PROFESSIONAL ACTIVITIES/MEMBERSHIPS

Black Agents and Professional Law Enforcement Association (BAPLEA)

Mentor – St. Paul Public School Mentorship Program for At Risk Children
Youth Initiative Aviation Academy (YIAA)
The National Organization of black Law Enforcement Executives (NOBLE)
International Association of Chiefs of Police (IACP)
 UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-K
(Mark One)
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2019
OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
Commission Fi e Number 001-38107

ShotSpotter, Inc.
(Exact Name of Registrant as Specified in its Charter)

Delaware 47-0949915
(State or other urisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7979 Gateway Blvd., Suite 210
Newark, California 94560
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code (510) 794-3100

Securities registered pursuant to Section 12(b) of the Act Common Stock, $0 005 par va ue per share Common Stock traded on the Nasdaq Capita Market trading symbo SS
Securities registered pursuant to Section 12(g) of the Act None
ndicate by check mark if the Registrant is a we -known seasoned issuer, as defined in Ru e 05 of the Securities Act Y S NO ☒
ndicate by check mark if the Registrant is not required to fi e reports pursuant to Section 13 or 15(d) of the Act Y S NO ☒
ndicate by check mark whether the Registrant (1) has fi ed a reports required to be fi ed by Section 13 or 15(d) of the Securities xchange Act of 193 during the preceding 12 months (or for such shorter period that
the Registrant was required to fi e such reports), and (2) has been subject to such fi ing requirements for the past 90 days Y S ☒ NO
ndicate by check mark whether the Registrant has submitted e ectronica y every nteractive Data Fi e required to be submitted pursuant to Ru e 05 of Regu ation S- (§232 05 of this chapter) during the preceding
12 months (or for such shorter period that the Registrant was required to submit such fi es) Y S ☒ NO
ndicate by check mark whether the Registrant is a arge acce erated fi er, an acce erated fi er, a non-acce erated fi er, sma er reporting company, or an emerging growth company See the definitions of arge
acce erated fi er,” acce erated fi er,” sma er reporting company,” and emerging growth company” in Ru e 12b-2 of the xchange Act
arge acce erated fi er Acce erated fi er ☒
Non-acce erated fi er Sma er reporting company ☒

merging growth company ☒

f an emerging growth company, indicate by check mark if the Registrant has e ected not to use the extended transition period for comp ying with any new or revised financia accounting standards provided pursuant to
Section 13(a) of the xchange Act ☒ ndicate by check mark whether the Registrant is a she company (as defined in Ru e 12b-2 of the xchange Act) Yes ☐ No ☒
he aggregate market va ue of the voting and non-voting common equity he d by non-affi iates of the Registrant, based on a c osing price of $ 20 per share of the Registrant s common stock as reported on the
Nasdaq Capita Market on June 28, 2019 was $360,807,561
he number of shares of Registrant s common stock outstanding as of March 6, 2020 was 11,3 6,538
Portions of the Registrant s Definitive Proxy Statement re ating to the Annua Meeting of Stockho ders, schedu ed to be he d on June 10, 2020, are incorporated by reference into Part of this Report Such Proxy
Statement wi be fi ed with the Securities and xchange Commission no ater than 120 days fo owing the end of the Registrant s fisca year ended December 31, 2019
 Table of Contents

Page

Spec a Note Rega d ng Fo wa d-Look ng Statements

PART I
Item Bus ness 2
Item A R sk Facto s 9
Item B Un eso ved Staff Comments 44
Item 2 P ope t es 44
Item 3 Lega P oceed ngs 44
Item 4 M ne Safety D sc osu es 45
PART II
Item 5 Ma ket fo Reg st ant’s Common Equ ty, Re ated Stockho de Matte s and Issue Pu chases of Equ ty Secu t es 46
Item 6 Se ected Conso dated F nanc a and Othe Data 48
Item 7 Management’s D scuss on and Ana ys s of F nanc a Cond t on and Resu ts of Ope at ons 50
Item 7A Qua tat ve and Quant tat ve D sc osu es About Ma ket R sk 65
Item 8 F nanc a Statements and Supp ementa y Data 66
Item 9 Changes n and D sag eements w th Accountants on Account ng and F nanc a D sc osu e 98
Item 9A Cont o s and P ocedu es 98
Item 9B Othe Info mat on 98
PART III
Item 0 D ecto s, Execut ve Off ce s, and Co po ate Gove nance 99
Item Execut ve Compensat on 99
Item 2 Secu ty Owne sh p of Ce ta n Benef c a Owne s and Management and Re ated Stockho de Matte s 99
Item 3 Ce ta n Re at onsh ps and Re ated T ansact ons, and D ecto s Independence 99
Item 4 P nc pa Accountant Fees and Se v ces 99
PART IV
Item 5 Exh b ts and F nanc a Statement Schedu es 00
Item 6 Fo m 0-K Summa y 00
Exh b t Index 0
S gnatu es 04
 SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

Th s Annua Repo t on Fo m 0-K conta ns fo wa d- ook ng statements that nvo ve substant a sks and unce ta nt es The fo wa d- ook ng statements a e conta ned
p nc pa y n the sect ons of th s Annua Repo t on Fo m 0-K ent t ed “R sk Facto s,” “Management’s D scuss on and Ana ys s of F nanc a Cond t on and Resu ts of
Ope at ons” and “Bus ness,” but a e a so conta ned e sewhe e n th s Annua Repo t on Fo m 0-K Often, you can dent fy fo wa d- ook ng statements by the wo ds
“ant c pate,” “be eve,” “cont nue,” “cou d,” “est mate,” “expect,” “ ntend,” “may,” “m ght,” “object ve,” “ongo ng,” “p an,” “p ed ct,” “p oject,” “potent a ,” “shou d,” “w ,”
o “wou d,” o the negat ve of these te ms, o othe compa ab e te m no ogy ntended to dent fy statements about the futu e Fo wa d- ook ng statements nc ude statements
about
• ou ab ty to cont nue to nc ease evenues, secu e custome enewa s and expand cove age a eas of ex st ng pub c safety custome s;
• ou ab ty to cont nue to add new custome s fo ou pub c safety and secu ty so ut ons;
• ou ab ty to g ow both domest ca y and nte nat ona y;
• ou ab ty to effect ve y manage o susta n ou g owth;
• ou ab ty to ma nta n, nc ease o st engthen awa eness of ou so ut ons;
• ou ab ty to ach eve and ma nta n se v ce eve ag eement standa ds (SLAs) n ou custome cont acts;
• futu e evenues, h ng p ans, expenses, cap ta expend tu es, cap ta equ ements and stock pe fo mance;
• ou ab ty to se v ce outstand ng debt, f any, and sat sfy covenants assoc ated w th outstand ng debt fac t es;
• ou ab ty to att act and eta n qua f ed emp oyees and key pe sonne and fu the expand ou ove a headcount;
• ou ab ty to comp y w th new o mod f ed aws and egu at ons that cu ent y app y o become app cab e to ou bus ness both n the Un ted States and
nte nat ona y; and
• ou ab ty to ma nta n, p otect and enhance ou nte ectua p ope ty

We caut on you that the fo ego ng st may not conta n a of the fo wa d- ook ng statements made n th s Annua Repo t on Fo m 0-K

These fo wa d- ook ng statements nvo ve known and unknown sks, unce ta nt es and othe facto s that may cause ou actua esu ts, eve s of act v ty, pe fo mance
o ach evements to be mate a y d ffe ent f om the nfo mat on exp essed o mp ed by these fo wa d- ook ng statements A though we be eve that we have a easonab e bas s
fo each fo wa d- ook ng statement conta ned n th s Annua Repo t on Fo m 0-K, we caut on you that these statements a e based on a comb nat on of facts and facto s
cu ent y known by us and ou expectat ons of the futu e, about wh ch we cannot be ce ta n You shou d efe to the “R sk Facto s” sect on of th s Annua Repo t on Fo m 0-K
fo a d scuss on of mpo tant facto s that may cause ou actua esu ts to d ffe mate a y f om those exp essed o mp ed by ou fo wa d- ook ng statements As a esu t of
these facto s, we cannot assu e you that the fo wa d- ook ng statements n th s Annua Repo t on Fo m 0-K w p ove to be accu ate We unde take no ob gat on to pub c y
update any fo wa d- ook ng statements, whethe as a esu t of new nfo mat on, futu e events o othe w se, except as equ ed by aw You shou d ead th s Annua Repo t on
Fo m 0-K and the documents that we efe ence n th s Annua Repo t on Fo m 0-K comp ete y and w th the unde stand ng that ou actua futu e esu ts may be mate a y
d ffe ent f om what we expect We qua fy a of ou fo wa d- ook ng statements by these caut ona y statements
 PART I

Item 1. BUSINESS
Overview
We p ov de p ec s on-po c ng and secu ty so ut ons fo aw enfo cement and secu ty pe sonne to he p dete gun v o ence and make c t es, campuses and fac t es
safe Ou f agsh p pub c safety so ut on, ShotSpotte F ex, s the ead ng outdoo gunshot detect on, ocat on and a e t ng system Ou pat o management softwa e,
ShotSpotte M ss ons (fo me y HunchLab), c eates c me fo ecasts des gned to enab e mo e p ec se and effect ve use of pat o esou ces to dete c me In 20 9, we c eated a
new techno ogy nnovat on un t, ShotSpotte Labs, to expand ou effo ts suppo t ng nnovat ve uses of ou techno ogy to he p p otect w d fe and the env onment Ou
secu ty so ut ons, ShotSpotte Secu eCampus and ShotSpotte S teSecu e, a e des gned to he p aw enfo cement and secu ty pe sonne se v ng un ve s t es, co po ate
campuses and key nf ast uctu e o t anspo tat on cente s m t gate sk and enhance secu ty by not fy ng autho t es of a potent a outdoo gunf e nc dent, sav ng c t ca
m nutes fo f st esponde s to a ve Ou gunshot detect on so ut ons a e t usted by aw enfo cement agenc es n ove 00 c t es as of Decembe 3 , 20 9

Ou gunshot detect on so ut ons cons st of h gh y-spec a zed, c oud-based softwa e nteg ated w th p op eta y, nte net-enab ed senso s des gned to detect outdoo
gunf e The speed and accu acy of ou gunf e a e ts enab e aw enfo cement and secu ty pe sonne to educe the esponse t mes to shoot ng events, wh ch can nc ease the
chances of app ehend ng the shoote , p ov d ng t me y a d to v ct ms, and dent fy ng w tnesses befo e they scatte , as we as a d n ev dent a y co ect on and se ve as an
ove a dete ent When a potent a gunf e nc dent s detected by ou senso s, ou system app es mach ne c ass f cat on comb ned w th human ev ew to ana yze and va date
the nc dent and p ec se y ocate whe e the nc dent occu ed An a e t conta n ng a ocat on on a map and c t ca nfo mat on about the nc dent s sent d ect y to subsc b ng
aw enfo cement o secu ty pe sonne th ough any nte net-connected compute and to Phone o And o d mob e dev ces

Ou softwa e sends va dated gunf e data a ong w th the aud o of the t gge ng sound to ou Inc dent Rev ew Cente (“IRC”), whe e ou t a ned acoust c expe ts a e
on duty 24 hou s a day, seven days a week, 365 days a yea to sc een and conf m actua gunf e nc dents Ou acoust c expe ts can supp ement a e ts w th add t ona tact ca
nfo mat on, such as the potent a p esence of mu t p e shoote s o the use of h gh-capac ty weapons Gunshot nc dents ev ewed by ou IRC esu t n a e ts typ ca y sent
w th n 45 seconds of the ece pt of the gunf e nc dent

We gene ate annua subsc pt on evenues f om the dep oyment of ShotSpotte F ex on a pe -squa e-m e bas s Ou secu ty so ut ons, ShotSpotte Secu eCampus and
ShotSpotte S teSecu e, a e typ ca y so d on a subsc pt on bas s, each w th a custom zed dep oyment p an Ou ShotSpotte M ss ons so ut on s a so so d on a subsc pt on
bas s As of Decembe 3 , 20 9, we had ShotSpotte F ex, ShotSpotte Secu eCampus and ShotSpotte S teSecu e cove age a eas unde cont act fo app ox mate y 760 squa e
m es, of wh ch 730 squa e m es had gone ve Cove age a eas unde cont act nc uded ove 00 c t es and 2 campuses/s tes ac oss the Un ted States, South Af ca and the
Bahamas, nc ud ng th ee of the ten a gest c t es n the Un ted States Most of ou evenues a e att butab e to custome s based n the Un ted States

We a e a m ss on-d ven o gan zat on focused on ea n ng the t ust of aw enfo cement to he p them p ov de equa p otect on to a and st engthen the po ce-commun ty
e at onsh p, u t mate y educ ng gun v o ence Ou nsp at on comes f om ou p nc pa founde , D Bob Showen, who be eves that the h ghest and best use of techno ogy s
to p omote soc a good We a e comm tted to deve op ng comp ehens ve, espectfu and engaged pa tne sh ps w th aw enfo cement agenc es, e ected off c a s and commun t es
focused on mak ng a pos t ve d ffe ence n ou soc ety

Industry Background: The Problem of Gun Violence

Acco d ng to the Fede a Bu eau of Invest gat on (the “FBI”), an est mated 2 m on v o ent c mes occu ed n the Un ted States n 20 8 Of those v o ent c mes, t
s est mated that f ea ms we e used n 72 7% of mu de s, 38 2% of obbe es and 26 % of agg avated assau ts

2
 The e s a stagge ng econom c cost assoc ated w th gun v o ence A 20 9 study comm ss oned by the U S Cong ess Jo nt Econom c Comm ttee Democ at c Staff
found that gun v o ence costs the Ame can economy at east $229 b on eve yyea

The Challenge of Urban Gun-Related Crime

The majo ty of u ban gunf e goes un epo ted A epo t pub shed by The B ook ngs Inst tute ana yz ng data co ected f om ShotSpotte F ex and ou custome s
suggests that app ox mate y 90% of the gunshots detected by ou pub c safety so ut on a e not epo ted to 9 by es dents Even n the nstances when 9 ca s a e made, the
nfo mat on epo ted by the ca e s often ncomp ete o naccu ate as to the t me and ocat on of the gunshot Fu the mo e, n many cases t s often d ff cu t fo the ca e to
authent cate the nc dent as gunf e In add t on, we be eve that n commun t es p agued by gun v o ence, the e s often a ack of t ust between the commun ty’s es dents and ts
po ce fo ce, wh ch can exace bate the unde epo t ng of gunf e and c eate a v c ous cyc e of unde epo t ng, ack of esponse and nc eased m st ust due to cont nued
unadd essed gun v o ence n the commun ty When gunf e s not epo ted o s epo ted naccu ate y, aw enfo cement and med ca pe sonne cannot add ess nju es no
effect ve y nvest gate and so ve e ated c mes o p event futu e nc dents

The commun t es n wh ch gun v o ence occu s suffe s gn f cant econom c oss A 20 6 epo t by the U ban Inst tute, wh ch stud ed the effect of gun v o ence n
M nneapo s, M nnesota, Oak and, Ca fo n a and Wash ngton, D C , noted that the pe ce ved sk of gun v o ence mposed heavy soc a , psycho og ca and moneta y damages
n commun t es, nc ud ng fewe jobs and owe econom c v ta ty The study conc uded
• In M nneapo s, one fewe gun hom c de n a g ven yea was stat st ca y assoc ated w th the c eat on of 80 jobs and an add t ona $9 4 m on n sa es
ac oss a bus ness estab shments n the next yea
• In Oak and, eve y add t ona gun hom c de n a g ven yea was stat st ca y assoc ated w th f ve fewe job oppo tun t es n cont act ng bus nesses n the next
yea
• In Wash ngton, D C , eve y add t ona gun hom c de n a g ven yea was stat st ca y assoc ated w th two fewe eta and se v ce estab shments the next
yea

In add t on, seve a stud es have suggested that p ope ty va ues a e nve se y co e ated w th v o ent c me Fo examp e, the Cente fo Ame can P og ess conducted a
study of changes n hom c de nc dents and hous ng p ces n Boston, Massachusetts; Seatt e, Wash ngton; Ch cago, I no s; Ph ade ph a, Pennsy van a and M waukee,
W scons n and found that a educt on n a g ven yea of one hom c de n a ZIP code causes a 5% nc ease n hous ng va ues n that same ZIP code the fo ow ng yea

The Rise of Active-Shooter Events

In add t on to the p ob em of oca zed, pe s stent gun v o ence, the e has been an nc eas ng numbe of h gh-p of e mass shoot ngs and te o events ove the past
seve a yea s Acco d ng to a 20 6 epo t by the FBI, the numbe of act ve-shoote events n the Un ted States n 20 4 and 20 5 was among the h ghest fo any two-yea ave age
pe od n the p eced ng 6 yea s and nea y s x t mes as many as the pe od between 2000 and 200 , the f st two yea s that the FBI began t ack ng act ve-shoote events

Un ke gunf e nc dents occu ng n h gh-c me a eas, act ve-shoote events often esu t n a h gh vo ume of te ephone epo ts to 9 Howeve , each ca e may
p ov de unt me y, naccu ate o ncomp ete nfo mat on, caus ng confus on o de ays n f st esponde s’ ab ty to eact qu ck y and accu ate y Response t me s c t ca as
nea y 70% of act ve-shoote events ast f ve m nutes o ess w th ove one th d end ng n two m nutes o ess acco d ng to a 20 3 study conducted by the FBI of act ve-shoote
events

3
Our Market
We be eve the e s s gn f cant demand fo advanced gunf e detect on and ocat on not f cat on so ut ons that accu ate y and qu ck y epo t nstances of gunf e, based
on two p ma y use cases
• aw enfo cement fo domest c and nte nat ona aw enfo cement se v ng commun t es p agued by pe s stent, oca zed gun v o ence, n o de to dent fy,
ocate and dete gun v o ence; and
• secu ty fo secu ty pe sonne (wh ch may nc ude aw enfo cement pe sonne ) se v ng un ve s t es, co po ate campuses, key nf ast uctu e,
t anspo tat on cente s and othe a eas n wh ch autho t es des e to p epa e fo and m t gate sks e ated to an act ve-shoote event, and des e to p ov de a
zone of detect on cove age su ound ng the espect ve campus o secu ed a ea

Based on data f om the 20 8 FBI Un fo m C me Repo t, we est mate that the domest c ma ket fo ou pub c safety so ut on cons sts of the app ox mate y ,400 c t es
that had fou o mo e hom c des pe 00,000 es dents n 20 5 The Un fo m C me Repo t nc udes nfo mat on epo ted d ect y to the FBI on a vo unta y bas s by 8,000 c ty,
un ve s ty and co ege, county, state, t ba and fede a aw enfo cement agenc es We be eve that fou o mo e hom c des pe 00,000 es dents ep esents a s gn f cant gun
v o ence p ob em We est mate that a custome n th s ma ket cou d nvest an ave age of app ox mate y $400,000 pe yea fo ShotSpotte F ex

Outs de of the Un ted States, we est mate that the ma ket fo ShotSpotte F ex nc udes app ox mate y 200 c t es n the Eu opean Un on, Cent a Ame ca, the
Ca bbean, South Ame ca and southe n Af ca that have at east 500,000 es dents We est mate that a custome n th s ma ket cou d nvest an ave age of app ox mate y $ 0
m on pe yea fo ou pub c safety so ut on

We est mate the ave age nvestment amounts fo p ospect ve custome s based on ou expe ence w th ex st ng custome s, ou ant c pated demand fo ou so ut ons and
the co espond ng cove age a eas that we expect p ospect ve custome s wou d e ect to cove w th ou so ut ons

Based on data made ava ab e by the Nat ona Cente fo Educat on Stat st cs and the Fede a Av at on Adm n st at on, we be eve that the domest c ma ket fo ou
secu ty so ut ons nc udes app ox mate y 5,000 co ege campuses and a po ts We est mate that, on ave age, a custome n th s ma ket cou d nvest app ox mate y $50,000-
$75,000 pe yea fo one of ou secu ty so ut ons In add t on, we be eve that the e ex sts a b oade ma ket fo ou secu ty so ut ons that nc ude, p ma y the outdoo a eas of
co ege campuses and a po ts outs de of the Un ted States as we as a ge co po ate campuses, t a n stat ons and othe h gh y-t aff cked a eas wo dw de

We a so be eve the e s demand fo ShotSpotte M ss ons w th n ou ex st ng ShotSpotte F ex custome s and w th n po ce depa tments n the same c t es we ta get fo
ou gunshot detect on so ut ons, as t des gned to he p po ce depa tments st ateg ca y p an pat o d ected m ss ons and tact cs fo mo e effect ve c me dete ence We est mate
that the ma ket fo ou ShotSpotte M ss ons so ut on nc udes app ox mate y ,500 c t es, based on c t es that have a popu at on above 25,000 peop e We expect that, on
ave age, a custome cou d nvest app ox mate y $50,000 pe yea fo ou ShotSpotte M ss ons so ut on

The ShotSpotter Solutions

A of ou so ut ons a e based on ou h gh y-spec a zed, c oud-based softwa e In the case of ou gunshot detect on so ut ons, ShotSpotte F ex, ShotSpotte
Secu eCampus and ShotSpotte S teSecu e, the softwa e s nteg ated w th ou p op eta y, nte net-enab ed senso s and connected th ough th d-pa ty commun cat on netwo ks
We b and ou so ut ons based on pa t cu a use cases and ta get custome s as fo ows
• ShotSpotter Flex. ShotSpotte F ex, a pub c safety so ut on, se ves c t es and mun c pa t es seek ng to dent fy, ocate and dete pe s stent, oca zed gun
v o ence by nco po at ng a ea -t me gunshot detect on system nto the po c ng systems
• ShotSpotter Missions. Th s c oud-based pat o management so ut on uses a t f c a nte gence-d ven ana ys s to he p po ce depa tments st ateg ca y
p an d ected pat o m ss ons and tact cs fo mo e effect ve c me dete ence The system p ov des c me fo ecast ng and m ss on p ann ng to enab e mo e
p ec se dep oyment of pat o esou ces and epo ts on m ss on act v ty and tact cs fo command staff

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• ShotSpotter SecureCampus. ShotSpotte Secu eCampus he ps the aw enfo cement and secu ty pe sonne se v ng un ve s t es, co eges and othe
educat ona nst tut ons m t gate sk and enhance secu ty by not fy ng autho t es and f st esponde s of an act ve-shoote event, nvo v ng outdoo
gunf e, a most mmed ate y, and p ov de “dome of p otect on” outs de the campus whe e ou cove age a eas extends
• ShotSpotter SiteSecure. ShotSpotte S teSecu e s des gned to se ve custome s such as co po at ons t y ng to safegua d the fac t es and pub c agenc es
focused on p otect ng c t ca nf ast uctu e, nc ud ng t a n stat ons, a po ts and f eeways
• ShotSpotter Labs. ShotSpotte Labs houses ou advanced techno ogy effo ts to adapt and extend ou comme c a techno ogy to add ess s gn f cant w d fe
and env onmenta ssues Ou cu ent focus s on combat ng h no poach ng n K uge Nat ona Pa k, South Af ca and b ast f sh ng that th eatens co a
eefs and food secu ty n Southeast As a The company has been ab e to co ect evenues f om ph anth op c ent t es to cove d ect and nd ect costs
Innovat ons have made the way back nto ou comme c a bus ness such as the deve opment of so a -powe ed senso f om the K uge dep oyment,
p esent ng that techno og es s m a to those now be ng used fo ou f eeway dep oyment

The key featu es of ou gunshot detect on so ut ons a e

• Comprehensive Coverage. We be eve that we se the on y pub c safety so ut on that p ov des comp ehens ve outdoo cove age fo gunshot detect on ove
a ge and comp ex acoust c env onments Ou outdoo acoust c senso s a e st ateg ca y p aced n an a ay of 20 to 25 senso s pe squa e m e and can
eas y be expanded to cove any s ze a ea In add t on to p ov d ng acoust c su ve ance ove w de a eas, ou so ut ons ope ate on a cont nuous bas s
24 hou s a day, seven days a week, 365 days a yea to p ov de mmed ate not f cat on of gunf e at any t me of day
• Real-Time, Precise Alerts. Ou so ut ons typ ca y not fy use s w th n 45 seconds of a gunshot, p ov d ng data on the t me and ocat on of the shoot ng and
the numbe of shots f ed An a e t s sent dep ct ng a dot on a map that co esponds to a spec f c add ess o at tud na and ong tud na coo d nates In
add t on, ou a e ts p ov de va uab e add t ona nfo mat on about the scene of the nc dent, such as the potent a p esence of mu t p e shoote s o the use of
fu y automat c and h gh-capac ty weapons Th s enhanced tact ca awa eness can he p p otect f st esponde s n dange ous and unp ed ctab e s tuat ons
• Forensically-Sound Data. Because ou so ut ons p ov de an exact t me, ocat on and aud o eco d ng of a gunshot, we can p ov de autho t es w th c t ca
ev dence fo nvest gat ons and p osecut ons Ou Deta ed Fo ens c Repo ts (“DFRs”) p ov de aw enfo cement pe sonne and p osecuto s w th
comp ehens ve, cou t-adm ss b e ana ys s of a shoot ng nc dent nc ud ng the gunf e aud o We a so offe expe t w tness test mony to nt oduce the
fo ens c ana ys s of the DFRs at t a and to p ov de techn ca ex pe t se ega d ng ou techno ogy Du ng the yea ended Decembe 3 , 20 9, we
comp eted and de ve ed 266 DFRs fo outdoo gunshot nc dents, and ou ev dence was p esented n fo m of expe t w tness test mony n 33 state and
Fede a t a s In 20 9 we nt oduced a new automated, mach ne gene ated fo ens c epo t, ca ed an Invest gat ve Lead Summa y (“ILS”), wh ch f s the
need fo a s gn f cant pe centage of DFRs n a mo e cost effect ve, t me y manne Du ng 20 9, ove 45,000 ILS epo ts we e gene ated by ou custome s
and used fo nvest gat ve pu poses
• Annual Subscription to a Cloud-Based Solution. We p ov de each of ou gunshot detect on so ut ons as an annua subsc pt on-based se v ce n wh ch we
des gn, dep oy, own, manage and ma nta n the acoust c senso s, host the softwa e and gunshot data and ope ate ou IRC w th t a ned acoust c expe ts
Occas ona y we ece ve custome equests fo d ect pu chase of ou senso s n conjunct on w th the pu chase of a subsc pt on se v ce We eva uate each of
these equests on a case by case bas s

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The key benef ts p ov ded by these featu es of ou gunshot detect on so ut ons nc ude
• Expedited Response to Gunfire. In 20 9, we ssued ove 40,000 gunshot a e ts to ou custome s In a eas whe e gun v o ence s pe s stent, we be eve
most gunshots a e not othe w se epo ted Even when ca s a e made, many ca e s a e unab e to p ov de a ocat on of the gunshot o othe e evant deta s
Human esponse t me to unfo d ng v o ence often de ays ca s fo seve a m nutes n c cumstances whe e esponse t me can be c t ca By cont ast, ou
so ut ons typ ca y a e t eme gency d spatch cente s and f e d pe sonne w th n 45 seconds of conf med gunf e and p ov de an exact ocat on, enab ng
them to espond faste and to a spec f c ocat on The ab ty to espond mo e qu ck y nc eases the chances of app ehend ng the shoote and ass st ng v ct ms
of v o ence, n add t on to a d ng n ev dence co ect on
• Prevention and Deterrence of Gun Violence. We be eve nc eas ng the speed and accu acy of aw enfo cement esponses to gunf e can act as a ong-te m
dete ent that can dec ease the ove a p eva ence of gunf e We a so be eve that know edge of the ex stence of ou so ut ons may have a dete ent effect on
oca zed gun v o ence When e ected off c a s and aw enfo cement have an enhanced awa eness of gun v o ence act v ty and patte ns, they have too s to
fac tate a ap d and accu ate esponse to gunf e nc dents and mp ove e at ons between aw enfo cement and these commun t es, potent a y nc eas ng
c me epo t ng and commun ty coope at on w th nvest gat ons, wh ch can esu t n mp oved pub c safety
• Improved Community Relations and Collaboration. We be eve that pe s stent gun v o ence m ts the ab ty of po ce and othe commun ty eade s to
se ve the const tuents and mp ove the commun t es Many c t es st ugg e to estab sh and foste a coope at ve and t ust ng e at onsh p between the
po ce depa tment and the commun t es they se ve Ou pub c safety so ut on p ov des c t es w th the ab ty to eact qu ck y to gun v o ence, thus p ov d ng
the ab ty to mp ove the esponses and es dents’ pe cept on of the esponses Th s p ov des ou custome s w th the oppo tun ty to foste mp oved
commun ty e at ons and co abo at on w th the es dents
• Improved Police Officer Safety. We be eve that ou so ut ons p ov de add t ona and va uab e nfo mat on ega d ng gunshot nc dents as the a e ts we
p ov de g ve add t ona ns ght and s tuat ona awa eness, nc ud ng, n the case shots f ed outdoo s, ound count, potent a mu t p e shoote s and use of an
automat c weapon, that a ow the esponde s to be bette p epa ed to espond app op ate y
• Ease to Procure and Use. By de ve ng ou so ut on as a c oud- and subsc pt on-based se v ce, ou custome s do not need to des gn, nsta o ma nta n
the own comp ex nf ast uctu e o h e o t a n acoust c expe ts to cont nuous y manage such a so ut on We offe consu tat ve ongo ng on-boa d ng, best
p act ces and tact ca t a n ng suppo t to ou custome s to nsu e they de ve the fu va ue of mp ement ng ou so ut on
• Integration Capability. We can custom ze the nteg at on of ou so ut ons w th ex st ng custome systems, nc ud ng v deo management systems, compute -
a ded d spatch, eco ds management systems, v deo ana yt cs, automated cense p ate numbe eade s, came a management systems, c me ana ys s and
stat st cs packages ( nc ud ng the COMPSTAT softwa e too s common y used by po ce depa tments) and common ope at ng p ctu e softwa e Inte fac ng
w th ou a e ts can enhance the effect veness of these custome too s by p ov d ng nfo mat on such as p ec se at tude and ong tude (geo ocat on),
t mestamps, nc dent aud o and s tuat ona context Fo examp e, po ce n M nneapo s, M nnesota used ou a e ts to t gge v deo eco d ngs of ce ta n key
nte sect ons n h gh c me a eas and captu e the mage of a suspect f ee ng the scene of a shoot ng S m a y, n Boston, Massachusetts, po ce co e ate ou
data w th su ve ance came as and pa o ee ank e b ace et t ack ng data to mon to pa o ees who may be v o at ng pa o e te ms by comm tt ng c mes o
conso t ng w th c m na s
• Gun Violence Data Collection. We be eve that we have amassed the wo d’s a gest and most accu ate co ect on of u ban gunshot data We p ov de ou
pub c safety custome s w th deta ed gun c me patte n ana ys s fo the cove age a eas as we as access to add t ona data that can ass st them w th fu the
ana yt cs Th s nfo mat on p ov des an awa eness of gunshot act v ty that may othe w se go un epo ted Fo examp e, by co ect ng nfo mat on ega d ng
the t me and ocat on of othe w se un epo ted gunf e, ou custome s can become awa e of patte ns of v o ence n the commun ty Th s nc eased awa eness
can he p ou custome s c eate po cy, a ocate app op ate esou ces and he p to add ess pe vas ve p ob ems n h gh gun-act v ty a eas

6
 The key featu es and key benef ts of ou ShotSpotte M ss ons so ut on nc ude
• Crime Forecasting and Mission Planning. ShotSpotte M ss ons p ov des c me fo ecast ng and m ss on p ann ng to enab e mo e p ec se dep oyment of
pat o esou ces and epo ts on m ss on act v ty and tact cs fo command staff ShotSpotte M ss ons a so p ov des agenc es the f ex b ty to se ect wh ch
c me types to fo ecast and to we ght them based on po ce and commun ty p o t es
• Tactical Mission Confirmation. Tact ca m ss ons can be conf gu ed w th po ce nput, and effect ve y commun cate p ed ct ons to po ce staff of d sc ete
a eas of h gh sk fo c me types The key benef t of ShotSpotte M ss ons s ts ab ty to he p po ce depa tments st ateg ca y p an d ected pat o m ss ons
and tact cs fo mo e effect ve c me dete ence w th focused, d ected and v s b e pat o p esence

Strategy
We ntend to d ve g owth n ou bus ness by cont nu ng to bu d on ou pos t on as the ead ng p ov de of outdoo gunshot detect on, ocat on and a e t ng so ut ons
Key e ements of ou st ategy nc ude
• Accelerate Our Acquisition of Public Safety Customers. We be eve that we cont nue to be n the ea y stages of penet at ng the ma kets fo ou pub c
safety so ut ons We count aw enfo cement agenc es n th ee of the ten a gest U S c t es among ou ShotSpotte F ex custome s Ove the ast few yea s
we expanded ou d ect sa es fo ce and custome success teams and added ma ket ng ead-gene at on capab t es to acce e ate g owth n th s ma ket
Mo eove , as we add new pub c safety custome s, pub c ty and the numbe of potent a efe ences fo ou so ut ons nc ease, wh ch esu ts n ou b and and
ou so ut ons becom ng mo e we known We ntend to cap ta ze on th s momentum to d ve an nc ease n sa es
• Expand Our International Footprint. W th on y two cu ent y dep oyed ShotSpotte F ex custome s outs de of the Un ted States n South Af ca and the
Bahamas, we be eve that we have a s gn f cant oppo tun ty to expand nte nat ona y We est mate that the ma ket outs de the Un ted States fo ou pub c
safety so ut ons nc udes app ox mate y 200 c t es n the Eu opean Un on, Cent a Ame ca, the Ca bbean, South Ame ca and southe n Af ca that have at
east 500,000 es dents In add t on, we be eve that the e s a ma ket fo ou secu ty so ut ons and ShotSpotte M ss ons outs de the Un ted States that
p ma y nc udes the outdoo a eas of co ege campuses and a po ts, a ge co po ate campuses, t a n stat ons and othe h gh y-t aff cked a eas We ntend
to nvest n ou nte nat ona sa es and ma ket ng effo ts to each these custome s
• Expand ShotSpotter Flex Revenue within Our Existing Customer Base. As custome s ea ze the benef ts of ou so ut ons, we be eve that we have a
s gn f cant oppo tun ty to nc ease the fet me va ue of ou custome e at onsh ps by expand ng cove age w th n the commun t es th ough a “ and and
expand” st ategy Fo examp e, of ou ShotSpotte F ex custome s, app ox mate y 36% have expanded the cove age a eas f om the o g na dep oyment
a eas by an ave age of ten squa e m es as of Decembe 3 , 20 9 Ou ove a evenue etent on ate has been ove 00% fo each of 20 9, 20 8 and 20 7
• Drive Additional Revenue per Customer with the Development or Acquisition of New Products and Services. We eva uate oppo tun t es to deve op o
acqu e comp ementa y p oducts and se v ces Fo examp e, ou acqu s t on of HunchLab, enamed ShotSpotte M ss ons, n 20 8 p ov des an oppo tun ty
to nc ease ou evenue pe custome w th a e ated and va ue-added techno ogy that he ps dete c me th ough st ateg ca y p anned pat o m ss ons Ou
cu ent focus s to eve age t usted e at onsh ps w th cu ent custome s to d ve n t a adopt on, and nc ease evenue and fet me va ue pe custome
• Maintain Passionate Focus on Customer Success and Net Promoter Score. G ven the spec a zed natu e of ou ma ket, a key component of ou st ategy s
to ma nta n ou pass onate focus on custome success and sat sfact on We p de ou se ves on ou execut on of custome on-boa d ng as we as ongo ng
consu t ng and custome suppo t, a of wh ch a e c t ca to ensu e not on y h gh custome etent on ates, but new custome acqu s t ons We mp ement ou
custome success n t at ve ea y n the sa es p ocess n o de to ensu e that we a e a gned w th the custome ’s object ves and can pos t ve y mpact the
def ned outcomes We app y consu tat ve best p act ces and po cy deve opment at the command staff eve as we as tact ca t a n ng fo f e d pat o
off ce s We a so cons stent y measu e ou pe fo mance w th custome s th ough an annua Net P omote Su vey We have ext eme y h gh agency
pa t c pat on ates and ou sco es the ast two yea s have anked between “exce ent” and “wo d c ass” acco d ng to ou Su vey pa tne benchma ks A of
ou effo ts a e focused on d v ng pos t ve measu ab e outcomes on gun v o ence educt on and p event on, wh ch we know eads to pos t ve wo d of mouth
efe a s that can att act new custome s and d ve an nc ease n sa es

7
 • Integrate with New Technologies that Enhance our Value. We be eve that nteg at ng ou so ut ons w th othe too s and techno og es enhances the va ue
of ou so ut ons to ou custome s Fo examp e, ou so ut ons can be used n connect on w th compute -a ded d spatch systems, v deo su ve ance came as,
Nat ona Integ ated Ba st c Info mat on Netwo k (“NIBIN”), and automated cense p ate eade s used by aw enfo cement to mp ove the effect veness of
po ce esponse and nvest gat on effo ts We cont nue to eva uate new techno og es that may nteg ate w th ou so ut ons to gene ate add t ona va ue fo
ou custome s
• Leverage ShotSpotter Labs to Accelerate the Introduction of Innovations into our Commercial Business. Labs a ows us to nvest n deve op ng
nnovat ve extens ons to ou techno ogy that p otect w d fe and the env onment wh e cove ng ou costs th ough ph anth op c pa tne s These
nnovat ons can and have made the way back nto ou comme c a bus ness Fo examp e, the techno ogy beh nd the so a senso s deve oped fo h no
p otect on ac oss a ge swaths of and n K uge Nat ona Pa k we e s m a to those used n ou f eeway dep oyments whe e some senso p acements d d
not have d ect access to e ect c ty
• Grow Our Security Business. We have deve oped ou ShotSpotte Secu eCampus so ut on fo un ve s t es and othe educat ona nst tut ons We have a so
deve oped ShotSpotte S teSecu e fo custome s such as co po at ons t y ng to safegua d the fac t es, and pub c agenc es focused on p otect ng c t ca
nf ast uctu e, nc ud ng t a n stat ons, a po ts and h ghways As of Decembe 3 , 20 9, we had 2 ShotSpotte Secu eCampus and ShotSpotte S teSecu e
custome s W th mo e than 5,000 ta get custome s n the Un ted States, we be eve that these ma kets ep esent an oppo tun ty fo g owth
• Extend Our Market and Product Leadership in Gun Violence Prevention. We w cont nue to nvest n mp ov ng ou acoust c gunshot detect on
so ut ons, ou senso s, ou gunshot detect on a go thms, the des gn and dep oyment of ou netwo k a ays, ou mob e app cat ons, and the nteg at on of
ou p atfo m w th th d-pa ty techno og es, to ma nta n ou techno ogy eade sh p pos t on W th what we be eve s the wo d’s a gest co ect on of oud,
mpu s ve sounds co ected ove 20 yea s, we be eve we a e n a un que pos t on to mp ove gunshot detect on accu acy v a mach ne ea n ng In add t on,
we ntend to eve age ou extens ve co ect on of gunf e data to bette unde stand the facts, t ends and c cumstances su ound ng gun act v ty n o de to
ma nta n ou eputat on as gun v o ence expe ts In do ng so, we hope to cont bute to the effo ts of the commun ty at a ge to dent fy, ocate and dete gun
v o ence
• Extend our Platform of Services and the Value of our Data. We w cont nue to nvest n esea ch and deve opment to eve age ou a ge and g ow ng
database of mpu s ve acoust c events, wh ch nc udes those f om both gunf e and non-gunf e We a so ntend to eve age th d-pa ty a t f c a nte gence
(“AI”) and ou own evo v ng cogn t ve and ana yt ca app cat ons to mp ove the eff c ency of ou so ut ons, wh ch may nc ude nte na softwa e
app cat ons, data ana ys s, event out ng and custome outputs Ce ta n of these app cat ons and outputs may expand the p atfo m of se v ces that we w
be ab e to offe ou custome s

Integrated Platform
Ou gunshot detect on so ut ons p ov de fo the comp ete nteg at on of seve a comp ex components- nte gent senso s, netwo k ng nf ast uctu e, and ente p se
softwa e and comput ng esou ces n an easy-to-adopt and affo dab e annua subsc pt on that e m nates the need fo ou custome s to des gn, nsta o ma nta n the own
comp ex nf ast uctu e o h e o t a n acoust c expe ts to mon to cont nuous y the so ut on

We be eve that offe ng these so ut ons as a se v ce on an annua subsc pt on bas s s cost-effect ve, p ov des fo mo e es ent, edundant nf ast uctu e and
s gn f cant y educes f ct on du ng custome adopt on by e m nat ng the comp ex ty and f ont- oaded cap ta expend tu e assoc ated w th pe petua censes fo on-s te
techno ogy p ojects Ou senso s ope ate on mach ne-to-mach ne netwo ks and, because we ma nta n thousands of ve senso connect ons, we a e ab e to agg egate usage fo a
of ou custome s and negot ate owe ates f om commun cat ons se v ce p ov de s than a s ng e custome wou d ke y be ab e to p ocu e on the own

8
 Ou hyb d c oud nf ast uctu e s a ch tected to de ve a p atfo m fo h gh ava ab ty and e ast c ty We pa tne w th an ndust y eadng p vate c oud vendo that
supp es co ocat on fac t es wo dw de and w th Amazon Web Se v ces the ead ng vendo of pub c c oud se v ces We a e ab e to p ov de a eve of 24/7/365 fau t-to e ant
ha dwa e and netwo k upt me that few of ou custome s cou d affo d to p ocu e o ma nta n on the own

Gunshot Detection Software

The hea t of ou gunshot detect on so ut ons s ou soph st cated and h gh y-spec a zed softwa e Ou softwa e ana yzes aud o s gna s fo potent a gunshots f st n ou
nte gent senso s Ou senso f te s out amb ent backg ound no se, such as t aff c o w nd, and ooks fo mpu s ve sounds cha acte st c of gunf e If the senso detects such
an mpu se, t ext acts pu se featu es of the soundwave, such as sha pness, st ength, du at on, se t me and decay t me Then, the senso sends these featu es to ou c oud se ve s
as pa t of a data packet that nc udes the ocat on coo d nates of the epo t ng senso and the p ec se t me-of-a va and ang e-of-a va of the sound

When the data eaches ou c oud se ve s, ou softwa e assesses whethe th ee o mo e of ou outdoo senso s detected the same sound mpu se and, f so, mu t ate ates
the ocat on coo d nates of the sound sou ce based on the t me of a va and the ang e of a va of the sound The softwa e then ve f es that the data s mathemat ca y
cons stent w th the sound hav ng o g nated at a s ng e ocat on The accu acy of the coo d nates de ved f om ou p op eta y softwa e s s gn f cant y mp oved when mo e than
th ee senso s pa t c pate, as s typ ca y the case We dep oy ou senso a ays such that, on ave age, s x to e ght senso s pa t c pate n the detect on of a gunshot

Afte the softwa e dete m nes the ocat on of the sound sou ce, the mach ne c ass f e a go thms ana yze the pu se featu es to dete m ne f the sound s ke y to be
gunf e Ou a go thms cons de pu se featu es, the d stance f om the sound sou ce, patte n match ng and othe heu st c methods to eva uate and c ass fy the sound The
mach ne c ass f e s pe od ca y t a ned and va dated aga nst a a ge database of known gunf e and othe commun ty sounds that a e mpu s ve n natu e We cont nue to add
new data to ou mach ne ea n ng database f om the nc dents ev ewed by ou acoust c expe ts n ou IRC p ocess C ass f cat on cont nuous y mp oves as the mach ne
c ass f e s a e e-t a ned us ng the expanded data set

Once an nc dent s c ass f ed as ke y gunf e, t s sent to the acoust c expe ts n ou IRC fo add t ona ana ys s and conf mat on A ong w th conf m ng an nc dent
s gunf e, ou acoust c expe ts a so annotate the a e ts w th add t ona nfo mat on that may be he pfu to f st esponde s, such as whethe the e a e mu t p e shoote s o f a
h gh-capac ty o fu y automat c weapon s be ng used Inc dent not f cat ons a e sent when the nc dent s conf med as gunf e by one of ou acoust c expe ts A e ts a e
de ve ed by SMS text and push not f cat ons and a so th ough ou mob e app cat ons The t me f om outdoo t gge -pu to a not f cat on be ng sent to ou custome s s
typ ca y 45 seconds o ess

Ou pat o management softwa e, ShotSpotte M ss ons, comb nes h sto ca c me data ngested th ough agency compute -a ded d spatch (“CAD”) and eco d
management system (“RMS”) feeds a ong w th tempo a , ocat on and event-based nputs nc ud ng ShotSpotte data fo c t es that use ou ShotSpotte F ex so ut on, to c eate
c me fo ecasts The system ngests mu t p e yea s’ wo th of agency data and s “t a ned” us ng mach ne ea n ng to dete m ne co e at ons ac oss va ab es The mode s a e then
tested aga nst ecent c me data to ca b ate fo ecast accu acy

The ShotSpotte M ss ons system s f ex b e, enab ng agenc es to se ect wh ch c me types to fo ecast and to we ght them based on po ce and commun ty p o t es
M ss on du at on and suggested tact cs a e conf gu ed w th po ce nput Upon dep oyment, new m ss ons a e c eated fo eve y pat o sh ft and beat us ng co o ed boxes ove a d
on a map to nd cate d sc ete a eas of h gh sk fo pa t cu a c me types These m ss on a eas enab e focused, d ected and v s b e pat o p esence to dete c me

Intelligent Sensors Used in Gunshot Detection Solutions

Ou ugged gunshot detect on senso s an nte gent, nte net-enab ed dev ce that s spec a y bu t to gno e amb ent no se and espond to mpu s ve sounds, accu ate y
t me-stamp ng the a va t mes Advanced d g ta s gna p ocess ng a go thms f te out backg ound sounds such as t aff c, and ext act pu se featu es f om the aud o s gna
that, a ong w th the t me and ang e of a va of the sound, a e sent to ou se ve s whe e a go thms compute the ocat on of the sound sou ce

9
 The senso s do not have the ab ty to ve st eam aud o Typ ca y, sounds, no ses o vo ces captu ed on the secu e senso s a e cached tempo a y but a e w tten ove
and pe manent y de eted w th n 30 hou s When a senso s t gge ed by an mpu s ve sound, t c eates a potent a gunshot “ nc dent” that conta ns a eco d ng nc ud ng no mo e
than one second befo e the nc dent and one second afte the nc dent Th s aud o sn ppet s p ese ved ndef n te y fo potent a ev dent a y use

Ou senso s a e des gned and tested aga nst nte nat ona standa ds fo nsta at on n unp otected outdoo env onments Spec a cons de at on s g ven to m n m ze the
sound of w nd, a n and ha , wh ch cou d othe w se m t the ange of detect on and p oduce fa se esu ts Env onmenta cond t on tests pe fo med on the senso s nc ude
tempe atu e cyc ng, tempe atu e soak, shock, v b at on, sa t fog and mo stu e ng ess p otect on

We typ ca y des gn and dep oy a ays of 20 to 25 senso s pe squa e m e tak ng nto cons de at on the un que acoust c env onment n wh ch we a e dep oy ng The
cumu at ve expe ence of dep oy ng n va ous c t es w th d ffe ent acoust c p ope t es has p ov ded a d st nct advantage n ta o ng ou senso a ays to pe fo m at h gh eve s
We have fu te emet y to each senso that p ov des deta ed hea tbeat data to ou system to mon to each senso ’s hea th and ava ab ty Senso f mwa e s ma nta ned w th
ove -the-a updates Because we pu pose y ove -dep oy ou senso a ays, mu t p e senso s can be off ne at any g ven t me w thout affect ng the ove a pe fo mance of the
system

Incident Review Center

Ou IRC ope ates 24 hou s a day, seven days a week, 365 days a yea When a oud mpu s ve sound t gge s enough of ou outdoo senso s that an nc dent s detected
and ocated, aud o f om the nc dent s sent to ou IRC v a secu e, h gh-speed netwo k connect ons fo ea -t me conf mat on W th n seconds of an nc dent, one of ou
acoust c expe ts ana yzes aud o data and eco d ngs of the potent a gunf e When gunf e s conf med, ou IRC team sends an a e t d ect y to eme gency d spatch cente s and
f e d pe sonne th ough any compute o mob e dev ce w th access to the Inte net Th s p ocess typ ca y takes ess than 45 seconds f om the t me of the gunshot A e ts nc ude
• the p ec se ocat on of gunf e, nc ud ng both at tude/ ong tude and st eet add ess;
• the numbe and exact t me of shots f ed;
• the numbe of shoote s; and
• f detectab e, the use of fu y automat c o h gh-capac ty weapons

Ou IRC ope ates p ma y out of ou p nc pa fac t es n Newa k, Ca fo n a and ece ves aud o f om nc dents detected by ou outdoo senso s ega d ess of whe e
such nc dents occu A though ou IRC cu ent y ope ates at a s ng e ocat on, ou t a ned pe sonne can pe fo m IRC funct ons f om any ocat on that has a h gh-speed nte net
connect on

0
Gunshot Detection Alerts
Ou a e ts a e de ve ed n the fo ow ng fo ms

ShotSpotter Dispatch
Ou IRC sends ea -t me not f cat ons of outdoo gunf e nc dents to the ShotSpotte D spatch app cat on, wh ch s the use nte face des gned fo eme gency d spatch
cente s In add t on, a e ts can a so be sent d ect y to f e d pe sonne us ng the ShotSpotte Respond app cat on nsta ed on compute s n po ce ca s

Th ough the ShotSpotte app cat ons, the a e t p ov des the type of gunf e (s ng e- ound o mu t p e- ound), a un que dent f cat on numbe (F ex ID numbe ), a date
and t me of the muzz e b ast (t gge t me), nea est add ess to the p ec se at tude and ong tude of the gunf e, numbe of shots and po ce d st ct and beat dent f cat on The
a e t a so nc udes an aud o c p of the nc dent

One of ou acoust c expe ts may add othe contextua nfo mat on e ated to the nc dent such as the poss b ty of mu t p e shoote s, h gh-capac ty o fu y automat c
weapons, and the shoote ’s ocat on e at ve to a bu d ng (fo examp e, n the f ont o back ya d o n the st eet) An aud t t a of the t me the a e t was pub shed to and
acknow edged by ou custome s a so conta ned n the epo t Any notes added by 9 d spatche s a e t me- and date-stamped and nd cate the ope ato ’s dent f cat on

ShotSpotter Respond
We a so offe a obust mob e app cat on, fo custome s us ng Phone and And o d dev ces Th s app cat on a ows f e d pe sonne to d ect y ece ve mmed ate a e ts
of outdoo gunshots and e ated c t ca nfo mat on The a e t p ov des the type of gunf e (s ng e- ound o mu t p e- ound), a un que dent f cat on numbe (F ex ID numbe ), a
date and t me of the muzz e b ast (t gge t me), nea est add ess to the ocat on of the gunf e, numbe of shots and po ce d st ct and beat dent f cat on The a e t a so nc udes
an aud o c p of the nc dent
2
 Rea -t me a e t data w th espect to gunshots can a so be de ve ed to custome s th ough ema o SMS text messages

Other Applications and Services

Investigator Portal
A h sto ca nc dent data n ou database can be v ewed, sea ched, so ted, and f te ed us ng the Invest gato Po ta The Invest gato Po ta can c eate epo ts fo
s ng e nc dents o g oups of nc dents F te sett ngs may be used to se ect nc dents g ouped nto a s ng e epo t Any p edef ned epo ts may be v ewed, p nted, o the aw
data expo ted fo use n th d-pa ty app cat ons The Invest gato Po ta a so nc udes the ab ty to save aud o c ps to any eco dab e med a

Forensic Reports and Certified Expert Witness Services

Ou gunshot data s a so usefu fo deta ed fo ens c ana ys s that he ps evea and c a fy what actua y occu ed du ng a gunf e nc dent, nc ud ng the dent f cat on
of ce ta n weapon types, the numbe and spec f c t me of each nd v dua ound f ed, the numbe of shoote s nvo ved and the changes n ocat on and d ect on of shoote s n
mot on Because ou so ut ons p ov de an exact t me, ocat on and aud o eco d ng of a gunshot, we a e ab e to p ov de autho t es w th c t ca ev dence fo nvest gat ons and
p osecut ons

As pa t of ou so ut on, we offe Deta ed Fo ens c Repo ts (“DFRs”) These p ov de aw enfo cement pe sonne and p osecuto s w th comp ehens ve, cou t-adm ss b e
ana ys s of a shoot ng nc dent, nc ud ng the gunf e aud o We a so offe expe t w tness test mony to nt oduce the fo ens c ana ys s of the DFRs at t a and to p ov de
techn ca expe t se ega d ng ou techno ogy Ou fo ens c ev dence has been adm tted n ove 00 c m na p osecut ons th oughout the Un ted States Ou techno ogy and the
fo ens c esu ts ach eved f om t have been found to be adm ss b e n nume ous states, adhe ng to e the the F ye o Daube t expe t test mony standa d, nc ud ng M nnesota,
Neb aska, Pennsy van a, Ca fo n a, M ssou , New Yo k, Co o ado, Ind ana and New Je sey

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ShotSpotter Missions
In the e a whe e po ce agenc es a e constant y asked to do mo e w th ess, ShotSpotte M ss ons he ps agenc es make the a gest cost cente pat o mo e eff c ent
and effect ve n educ ng c me The softwa e-based pat o management system d sp ays AI-d ven sk assessments fo off ce s by sh ft and beat that d ect the pat o ng and
tact cs n a mo e p ec se, standa d zed and mpactfu way ShotSpotte M ss ons co ects data f om a d ected pat o sess ons that can be ana yzed to dete m ne the mpact on
c me so that ope at ons and tact cs can be opt m zed ove t me

ShotSpotte M ss ons p ov des

• c me fo ecast ng and d ected pat o p ann ng;
• dosage and tact cs gu dance by c me type; and
• epo ts on d ected pat o act v ty and tact cs fo command staff

The system comb nes h sto ca c me data ngested th ough agency CAD and RMS feeds a ong w th tempo a , ocat on and event-based nputs nc ud ng ShotSpotte
data fo c t es use ou ShotSpotte F ex so ut on, to c eate c me fo ecasts The system ngests mu t p e yea s’ wo th of agency data and s “t a ned” us ng mach ne ea n ng to
dete m ne co e at ons ac oss va ab es The mode s a e then tested aga nst ecent c me data to ca b ate fo ecast accu acy

Deployment and Customer Success

When we dep oy ou ShotSpotte F ex, ShotSpotte S teSecu e and ShotSpotte Secu eCampus so ut ons, we nsta ou outdoo senso s n a spec f ed cove age a ea
acco d ng to ou cont act w th the custome As an n t a step, we pe fo m s te su veys of the cove age a ea to des gn a senso a ay, wh ch typ ca y cons st of 20 to 25 senso s
pe squa e m e We typ ca y nsta senso s on the h ghest bu d ngs n the a ea, but we may a so use ex st ng nf ast uctu e assets such as ght po es Once pe m ss on fo
nsta at on s obta ned, we typ ca y engage oca e ect c ans to augment ou team of f e d se v ce techn c ans to nsta the senso s and pe fo m equ ed ma ntenance

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 G ven the spec a zed natu e of ou ma ket, a key component of ou st ategy s to ma nta n ou pass onate focus on custome success We p de ou se ves onou
execut on n custome on-boa d ng as we as ongo ng consu t ng and custome suppo t, a of wh ch s c t ca to ensu e not on y h gh custome etent on ates but new custome
acqu s t ons We mp ement ou custome success n t at ve ea y n the sa es p ocess n o de to ensu e that we a e a gned w th the custome ’s object ves and can pos t ve y
mpact the def ned outcomes Fo examp e, du ng dep oyment, ou custome success team, cons st ng of expe enced aw enfo cement p ofess ona s, p ov des on-s te t a n ng
to the custome ’s off ce s, d spatche s and nvest gato s, nc ud ng t a n ng on how to use the so ut on and best p act ces fo opt ma esu ts We app y consu tat ve best p act ces
and po cy deve opment at the command staff eve as we as tact ca t a n ng fo f e d pat o off ce s A of ou effo ts a e focused on d v ng pos t ve measu ab e outcomes on
gun v o ence educt on and p event on

Ou IRC and custome se v ce o gan zat ons p ov de cont nuous outdoo nc dent c ass f cat on and techn ca suppo t 24 hou s a day, seven days a week, 365 days a
yea The natu e of ou outdoo nc dent c ass f cat on p ocess p ov des ongo ng and s gn f cant touchpo nts w th ou custome s th ough ou pub shed a e ts We a so nte act
w th ou custome s th ough ema , chat and te ephone nqu es, and mon to ou custome s’ oca news feeds and ad o d spatch t aff c n o de to ema n awa e of the
v o ence p event on act v t es

Ou custome success team s espons b e fo conduct ng pe od c n-pe son account ev ews that deta a aspects of the se v ces p ov ded, nc ud ng outcomes
gene ated and a eas fo futu e mp ovement We be eve that these account ev ews, a ong w th ou fo ma zed on-boa d ng custome success p og am, a e a ge y espons b e
fo ou h gh net p omote sco e (“NPS”) We obta n ou NPS by conduct ng su veys to measu e custome oya ty and sat sfact on We be eve a h gh NPS nd cates a substant a
compet t ve advantage n fac tat ng custome acqu s t on and etent on and nc eases custome fet me va ue In 20 9, we ach eved an NPS sco e of 53%

Customers
We gene ate annua subsc pt on evenues f om the dep oyment of ou pub c safety and secu ty so ut ons on a pe -squa e-m e bas s As of Decembe 3 , 20 9, we
had cove age a eas unde cont act of app ox mate y 760 squa e m es n the agg egate, of wh ch 730 m es have gone ve, wh ch nc uded 02 c t es and campuses and othe
s tes ac oss the Un ted States, South Af ca and Bahamas, nc ud ng th ee of the ten a gest c t es n the Un ted States S nce t ans t on ng ou pub c safety bus ness to the
ShotSpotte F ex subsc pt on mode n 20 , we have added ove 70 new ShotSpotte F ex custome s, but on y ten such custome s have te m nated se v ce, two of wh ch we e
te m nated due to hu cane damage n 20 7, and one of wh ch, Pue to R co, had etu ned as a custome at the end of 20 9 Fo the yea ended Decembe 3 , 20 9, ou two
a gest custome s, C ty of Ch cago and C ty of New Yo k accounted fo 20% and 4% of ou evenues, espect ve y Fo the yea ended Decembe 3 , 20 8, ou two a gest
custome s, C ty of Ch cago and C ty of New Yo k accounted fo 22% and 5% of ou evenues, espect ve y The C ty of New Yo k and Pue to R co Hous ng Adm n st at on
accounted fo 8% and 7%, espect ve y, of ou evenues fo the yea ended Decembe 3 , 20 7

Sales
We se ou so ut ons th ough ou d ect sa es teams Ou sa es teams focus on both new custome acqu s t on, custome enewa and cove age expans on Ou pub c
safety so ut on sa es team dent f es commun t es w th the oppo tun ty to benef t f om ou so ut ons, commun cates w th key stakeho de s, nav gates the cha enges assoc ated
w th ou custome s’ comp ex fund ng and sa es cyc es, and estab shes a foundat on fo a successfu custome e at onsh p In add t on, ou sa es team wo ks w th custome s to
dent fy and p ocu e funds f om a te nate sou ces, nc ud ng state and fede a gove nment g ants Ou secu ty so ut ons sa es team focuses p ma y on co ege and un ve s ty
campuses, typ ca y w th the head of campus secu ty, but a so by engag ng w th boa ds of egents, budget off ce pe sonne and othe campus stakeho de s We ntend to
cont nue to nvest n bu d ng a g oba sa es o gan zat on as we fu the penet ate the ma ket fo ShotSpotte F ex and expand the custome base fo ou secu ty so ut ons

At t mes, we may se ou so ut ons th ough channe pa tne s as pa t of “Sma t C t es” n t at ves To he p nteg ate ou so ut ons w th othe se v ces n th s space and
to take advantage of cu ent and eme g ng techno og es, we seek to ente nto a ances w th ead ng compan es focused on such n t at ves In August 20 8, we ente ed nto an
ag eement w th Ve zon, th ough wh ch they may se ou F ex so ut ons as a ese e , n add t on to the so ut on bund ed w th the L ght Senso y Netwo k In Octobe 20 9, we
ente ed nto an ag eement w th AT&T, th ough wh ch they may se ou F ex so ut ons as a ese e as we

5
Marketing
The company cont nues to expand the scope and capab ty of the ma ket ng funct on The top ma ket ng n t at ves nc ude ) ta geted ead-gene at on campa gns and
events to bu d sa es p pe ne; 2) c eat on of compe ng content to educate p ospects and bu d c ed b ty as po ce agenc es go th ough the buye s’ jou ney; and 3) an act ve
pub c e at ons p og am to nc ease the ove a awa eness of ou p oducts

In 20 9, we aunched a ead-gene at on n t at ve to d ve add t ona p pe ne fo the sa es team cons st ng of a ma ket ng automat on techno ogy p atfo m, a se es of
on ne campa gns and an outbound ca ng team of sa es deve opment ep esentat ve (“SDR”s) The campa gns a e des gned to educated p ospects and gene ate n t a nte est
based on compe ng content The SDR team suppo ts the campa gns w th outbound ca s to d ve fu the nte est and qua fy the ead Ove the cou se of the yea the f ow of
qua f ed eads that tu ned nto sa es oppo tun t es doub ed A key pa t of the ead gene at on p og am s c eat ng a p esence at key ndust y events and confe ences whe e we
can pe sona y engage w th custome s, p ospects and nf uence s such as mayo s, c ty manage s, and t auma su geons The face-to-face nte act ons a e nva uab e fo
nt oduc ng ou va ue p opos t on, estab sh ng e at onsh ps and bu d ng t ust

Content c eat on s focused on eve ag ng ou happy custome base to sha e the expe ences and esu ts w th othe p ospects We have deve oped an n t a set of
v deo and on ne assets that sha e success sto es f om ou custome s’ po nt of v ew and desc be how ou techno ogy pos t ve y mpacts the depa tment and commun ty We
a e expand ng the b eadth and depth of ou content b a y s gn f cant y fo the use , econom c buye and nf uence s

In the a ea of pub c e at ons, we nc eased ou soc a med a p esence, have expanded the numbe of spokespeop e ava ab e to ta k to the med a and cont nue to put
out a s gn f cant numbe of p ess e eases each yea Due to the h gh v s b ty of shoot ngs, the med a’s nte est n cove ng them, and ShotSpotte ’s key o e n a e t ng po ce
fo a qu ck esponse to these events, we benef t f om s gn f cant te ev s on, p nt and on ne p ess that s gene ated at tt e to no cost In 20 9, we we e ment oned n ove ,000
a t c es, b oadcast TV and ad o segments - the majo ty of wh ch we e o gan ca y gene ated Membe s of the med a have access to a se f-se ve, comp ehens ve med a k t to
eas y nse t v deo and photos that dep ct the se v ce and ts benef ts n a compe ng fash on to enhance b oadcast TV segments and p nt/on ne a t c es Th s exposu e c eates
awa eness fo ou system and ends c ed b ty to ou ma ket eade sh p pos t on

Research and Development

We focus ou esea ch and deve opment effo ts on enhanc ng ou advanced s gna p ocess ng and c ass f cat on a go thms, updat ng ou senso ha dwa e techno ogy,
educ ng manufactu ng costs, deve op ng mob e, web and desktop app cat ons, evo v ng ou c oud-dep oyed back-end nf ast uctu e and nteg at on w th “sma t c t es”
n t at ves ShotSpotte M ss ons c me fo ecast ng uses mach ne ea n ng and has ed to add t ona nvestment n data sc ence esou ces As of Decembe 3 , 20 9, we had 20
emp oyees n ou esea ch and deve opment o gan zat on In add t on, we engage n esea ch and deve opment act v t es w th manufactu ng pa tne s and outsou ce ce ta n
act v t es to eng nee ng f ms to fu the supp ement ou nte na team Ou esea ch and deve opment team s nc eas ng y focused on exp o ng the use of ou data sets to
conduct cogn t ve ana ys s and AI nteg at on

Competition
The ma kets fo pub c safety and secu ty so ut ons a e h gh y f agmented and evo v ng Whethe nsta ed n oca commun t es, on c t ca nf ast uctu e o on a
campus, fo a gunf e detect on system to be effect ve, the p otect on zone must be comp ehens ve We be eve ou gunshot detect on so ut ons ep esent the most effect ve
pub c safety and secu ty so ut ons on the ma ket

We compete on the bas s of a numbe of facto s, nc ud ng

• p oduct funct ona ty, nc ud ng the ab ty to cove b oad outdoo geog aph c spaces;
• so ut on pe fo mance, nc ud ng the ap d captu e of mu t p e acoust c nc dents and accu acy;
• ease of mp ementat on, use and ma ntenance;
• tota cost of owne sh p; and
• custome suppo t and custome success n t at ves

6
ShotSpotter Flex Solution Competitors
Ou ShotSpotte F ex so ut on s un que because t p ov des sca ab e w de a ea gunshot detect on ove a ge and geog aph ca y d ve se a eas, p ov des mmed ate and
p ec se data on gunf e, he ps commun t es def ne the scope of ega gunf e, and p ov des c t es w th deta ed fo ens c data fo nvest gat on, p osecut on and ana ys s Wh e
we a e not awa e of any d ect compet to s offe ng w de-a ea so ut ons compa ab e to ShotSpotte F ex, we be eve the p ma y compet to s n the b oade gunf e detect on
space a e Rafae Advanced Defense Systems Ltd , Raytheon Company, V5 Systems, Safety Dynam cs, Inc , W -f be , Inc EAGL Techno ogy, Shoote Detect on Systems and
Tha es G oup

Most of these othe outdoo so ut ons on the ma ket offe m ted scope po nt p otect on, p ox m ty senso s, o “counte -sn pe systems ” These systems a e des gned
p ma y fo cove ng sma a eas, o fo def ned m ta y o SWAT team app cat ons, whe e the ta get s known n advance and t s poss b e to put a senso d ect ona y
towa d the ta get Howeve , u ban a eas and c t ca nf ast uctu e equ e a w de system of p otect on that can cove a a ge a ea

We a so compete w th othe poss b e uses of the m ted fund ng ava ab e to ou ShotSpotte F ex custome s Because aw enfo cement agenc es o gove nment
ent t es have m ted funds, they may have to choose among esou ces o so ut ons that he p them to meet the ove a m ss on Acco d ng y, we compete not on y w th ou
custome s’ nte na budget dec s ons, but w th nume ous compan es vy ng fo these m ted funds, nc ud ng Eve b dge, Inc and Axon Ente p ses, Inc , among othe s We
be eve that n a eas w th s gn f cant eve s of gun act v ty, ShotSpotte F ex s un que y pos t oned to ass st custome s n nte upt ng, detect ng and p event ng gun v o ence

Security Solutions Competitors

Ou secu ty so ut ons ope ate n a h gh y compet t ve env onment In add t on to othe gunf e detect on compan es, we may face compet t on f om compan es
offe ng a te nat ve secu ty techno og es, such as v deo su ve ance, access cont o , a a m and ght ng systems The d ect compet to s fo secu ty so ut ons nc ude the
Gua d an system by Shoote Detect on Systems LLC, Safety Dynam cs Inc , V5 Systems, EAGL, W -f be , and Ambe Box, Inc We be eve none of ou secu ty so ut ons
compet to s s ab e to offe the comp ehens ve outdoo cove age we offe

ShotSpotter Missions Competitors

ShotSpotte M ss ons ope ates n a deve op ng and potent a y compet t ve env onment In add t on to cont o management and data ana yt cs custome s compan es,
we may face compet t on f om compan es offe ng a te nat ve so ut ons as we as so ut ons deve oped nte na y by ou custome s The d ect compet to s to ou M ss ons
so ut on nc ude P edPo , Inc and may nc ude othe CAD/RMS p ov de s and othe th d-pa ty so ut ons p ov de s, such as Genetech, Inc , Cent a Squa e Techno og es, Ma k
43, and Moto o a So ut ons, Inc

Intellectual Property
Ou futu e success and compet t ve pos t on depend n pa t on ou ab ty to p otect ou nte ectua p ope ty and p op eta y techno og es To safegua d these ghts, we
e y on a comb nat on of patent, t adema k, copy ght and t ade sec et aws, and cont actua p otect ons n the Un ted States and othe ju sd ct ons

As of Decembe 3 , 20 9, we had 34 ssued patents, 32 n the Un ted States, one n Is ae and one n Mex co, as we as patent app cat ons pend ng fo exam nat on n
the Un ted States, Eu ope and B az

The ssued patents exp e on va ous dates f om 2022 to 2034 We a so cense one patent f om a th d pa ty, wh ch exp es n 2023

We a so cense softwa e f om th d pa t es fo nteg at on nto ou offe ngs, nc ud ng open sou ce softwa e and othe softwa e ava ab e on comme c a y easonab e
te ms We cannot assu e you that such th d pa t es w ma nta n such softwa e o cont nue to make t ava ab e

7
Facilities
Ou p nc pa fac t es cons st of off ce space fo ou co po ate headqua te s n Newa k, Ca fo n a, whe e we occupy app ox mate y 2,020 squa e feet of space unde
a ease that exp es n Octobe 202

We ease ou fac t es and do not own any ea p ope ty We may p ocu e add t ona space as we add emp oyees and expand geog aph ca y We be eve that ou
fac t es a e adequate to meet ou needs fo the mmed ate futu e and that shou d t be needed, su tab e add t ona space w be ava ab e to accommodate expans on of ou
ope at ons

Employees
As of Decembe 3 , 20 9, we had 08 fu -t me and fou pa t-t me emp oyees, of wh ch 2 we e n sa es and ma ket ng, we e n gene a and adm n st at ve
funct ons, 20 n esea ch and deve opment and 60 n ope at ons, custome suppo t and custome success None of ou emp oyees a e ep esented by a abo un on o cove ed by
co ect ve ba ga n ng ag eements We cons de ou e at onsh p w th ou emp oyees to be good

Segment and Geographic Information

Info mat on about segment epo t ng and ong- ved assets s set fo th n Note 3 of ou Notes to Conso dated F nanc a Statements nc uded n “F nanc a
Statements and Supp ementa y Data” of th s Annua Repo t on Fo m 0-K Tota evenues gene ated outs de the Un ted States we e de ved f om ou custome ocated n
South Af ca and Bahamas and we e $ 0 m on n the yea ended Decembe 3 , 20 9, and $0 9 m on and $0 8 m on, n the yea s ended Decembe 3 , 20 8 and 20 7,
espect ve y Substant a y a of ou non-moneta y ong- ved assets a e ocated n the Un ted States Fo a d scuss on of sks e ated to ou nte nat ona ope at ons, see the sk
facto s set fo th n Pa t I, Item A of th s Annua Repo t on Fo m 0-K

Corporate Information
We we e fo med as ShotSpotte , Inc , a Ca fo n a co po at on, n 200 and e nco po ated as ShotSpotte , Inc , a De awa e co po at on, n 2004 We a so do bus ness
as “SST” pu suant to a eg ste ed t ade name

Ou p nc pa execut ve off ces a e ocated at 7979 Gateway Bou eva d, Su te 2 0, Newa k, Ca fo n a 94560 and ou te ephone numbe s (5 0) 794-3 00 Ou
webs te add ess s www shotspotte com The nfo mat on conta ned on, o that can be accessed th ough, ou webs te s not nco po ated by efe ence nto th s Annua Repo t
on Fo m 0-K, and you shou d not cons de any nfo mat on conta ned on, o that can be accessed th ough, ou webs te as pa t of th s Annua Repo t on Fo m 0-K

ShotSpotte , the ShotSpotte ogo, ShotSpotte M ss ons, ShotSpotte F ex, ShotSpotte Secu eCampus, ShotSpotte S teSecu e, and othe t ade names, t adema ks o
se v ce ma ks of ShotSpotte appea ng n th s Annua Repo t on Fo m 0-K a e the p ope ty of ShotSpotte , Inc T ade names, t adema ks and se v ce ma ks of othe
compan es appea ng n th s Annua Repo t on Fo m 0-K a e the p ope ty of the espect ve ho de s

Where You Can Find More Information

You can ead ou SEC f ngs, nc ud ng th s Annua Repo t on Fo m 0-K, ove the nte net at the SEC’s webs te at www sec gov You may a so ead and copy any
document we f e w th the SEC at ts pub c efe ence fac t es at 00 F St eet, N E , Wash ngton, D C 20549 You may a so obta n cop es of these documents at p esc bed
ates by w t ng to the Pub c Refe ence Sect on of the SEC at 00 F St eet, N E , Wash ngton, D C 20549 P ease ca the SEC at -800-SEC-0330 fo fu the nfo mat on on
the ope at on of the pub c efe ence fac t es

We a e subject to the nfo mat on epo t ng equ ements of the Exchange Act, and we a e equ ed to f e epo ts, p oxy statements and othe nfo mat on w th the
SEC These epo ts, p oxy statements and othe nfo mat on a e ava ab e fo nspect on and copy ng at the pub c efe ence oom and webs te of the SEC efe ed to above We
a so ma nta n a webs te at www shotspotte com, at wh ch you may access these mate a s, f ee of cha ge, as easonab y p act cab e afte they a e e ect on ca y f ed w th, o
fu n shed to, the SEC We a e not, howeve , nc ud ng the nfo mat on conta ned on ou webs te, o nfo mat on that may be accessed th ough nks on ou webs te, as pa t of, o
nco po at ng such nfo mat on by efe ence nto, th s Annua Repo t on Fo m 0-K

8
 Item 1A. RISK FACTORS.
Investing in our common stock involves a high degree of risk. You should consider carefully the risks and uncertainties described below, together with all of the other
information in this report, including our consolidated financial statements and related notes, before deciding whether to purchase shares of our common stock. If any of the
following risks is realized, our business, operating results, financial condition and prospects could be materially and adversely affected. In that event, the price of our common
stock could decline, and you could lose part or all of your investment. Moreover, the risks described below are not the only ones that we face. Additional risks not presently
known to us or that we currently deem immaterial may also affect our business, operating results, prospects or financial condition. You should carefully consider these risk
factors, together with all of the other information included in this Annual Report on Form 10-K as well as our other publicly available filings with the SEC.

Risks Related to Our Business and Industry

Our success depends on maintaining and increasing our sales, which depends on factors we cannot control, including the availability of funding to our customers.
To date, substant a y a of ou evenues have been de ved f om cont acts w th oca gove nments and the agenc es, n pa t cu a the po ce depa tments of majo
c t es n the Un ted States To a esse extent, we a so gene ate evenues f om fede a agenc es, fo e gn gove nments and h ghe educat on nst tut ons We be eve that the
success and g owth of ou bus ness w cont nue to depend on ou ab ty to add new po ce depa tments and othe gove nment agenc es, domest ca y and nte nat ona y, as
custome s of ou pub c safety so ut on and new un ve s t es, co po ate campuses and key nf ast uctu e and t anspo tat on cente s as custome s of ou secu ty so ut ons Many
of ou ta get custome s have est cted budgets, such that we a e fo ced to compete w th p og ams o so ut ons that offe an a te nat ve use of the same funds A numbe of
facto s cou d cause cu ent and/o potent a custome s to de ay o ef a n f om pu chas ng ou so ut ons, p event expans on of, o educe cove age a eas and/ o te m nate use of
ou so ut ons, nc ud ng
• dec eases o changes n ava ab e fund ng, nc ud ng budgeta y a ocat ons, gove nment g ants and othe gove nment fund ng p og ams;
• potent a de ays o changes n app op at ons o othe fund ng autho zat on p ocesses;
• changes n f sca o cont act ng po c es;
• mac o-and/o oca econom c changes that may affect custome fund ng;
• changes n e ected o appo nted off c a s; and
• changes n aws o pub c sent ment ega d ng p vacy o su ve ance

The occu ence of any of the fo ego ng wou d mpede o de ay ou ab ty to ma nta n o nc ease the amount of evenues de ved f om these custome s, wh ch cou d
have a mate a adve se effect on ou bus ness, ope at ng esu ts and f nanc a cond t on

Contracting with government entities can be complex, expensive and time-consuming.

The p ocu ement p ocess fo gove nment ent t es s n many ways mo e cha eng ng than cont act ng n the p vate secto We must comp y w th aws and egu at ons
e at ng to the fo mat on, adm n st at on, pe fo mance and p c ng of cont acts w th gove nment ent t es, nc ud ng U S fede a , state and oca gove nmenta bod es These aws
and egu at ons may mpose added costs on ou bus ness o p o ong o comp cate ou sa es effo ts, and fa u e to comp y w th these aws and egu at ons o othe app cab e
equ ements cou d ead to c a ms fo damages f om ou custome s, pena t es, te m nat on of cont acts and othe adve se consequences Any such damages, pena t es,
d s upt ons o m tat ons n ou ab ty to do bus ness w th gove nment ent t es cou d have a mate a adve se effect on ou bus ness, ope at ng esu ts and f nanc a cond t on

9
 Gove nment ent t es often equ e h gh y spec a zed cont act te ms that may d ffe f om ou standa d a angements Fo examp e, f the fede a gove nment p ov des
g ants to ce ta n state and oca gove nments fo ou so ut ons, and such gove nments do not cont nue to ece ve these g ants, then these custome s have the ab ty to te m nate
the cont acts w th us w thout pena ty Gove nment ent t es often mpose comp ance equ ements that a e comp cated, equ e p efe ent a p c ng o “most favo ed nat on”
te ms and cond t ons, o a e othe w se t me-consum ng and expens ve to sat sfy Comp ance w th these spec a standa ds o sat sfact on of such equ ements cou d comp cate
ou effo ts to obta n bus ness o nc ease the cost of do ng so Even f we do meet these spec a standa ds o equ ements, the nc eased costs assoc ated w th p ov d ng ou
so ut ons to gove nment custome s cou d ha m ou ma g ns Add t ona y, eve n once we have secu ed a gove nment cont act, the enewa p ocess can be engthy and as t me-
consum ng as the n t a sa e, and we may be p ov d ng ou se v ce fo months past the cont act exp at on date w thout ce ta nty f the enewa ag eement w be s gned o not

Changes n the unde y ng egu ato y cond t ons, po t ca andscape o equ ed p ocu ement p ocedu es that affect these types of custome s cou d be nt oduced p o
to the comp et on of ou sa es cyc e, mak ng t mo e d ff cu t o cost y to f na ze a cont act w th a new custome o expand o enew an ex st ng custome e at onsh p Fo
examp e, custome s may equ e a compet t ve b dd ng p ocess w th extended esponse dead nes, ev ew o appea pe ods, o custome attent on may be d ve ted to othe
gove nment matte s, postpon ng the cons de at on of the pu chase of ou p oducts Such de ays cou d ha m ou ab ty to p ov de ou so ut ons eff c ent y and to g ow o
ma nta n ou custome base

If we are unable to maintain and expand coverage of our existing public safety customer accounts and further penetrate the public safety market, our revenues may not
grow.
Ou ab ty to nc ease evenues w depend n a ge pa t on ou ex st ng pub c safety so ut on custome s enew ng the annua subsc pt ons and expand ng the
m eage cove age, o pu chas ng and mp ement ng ou ShotSpotte M ss ons so ut ons Most of ou ShotSpotte F ex custome s beg n us ng ou so ut on n a m ted cove age
a ea Ou expe ence has been, and we expect w cont nue to be, that afte the n t a mp ementat on of ou so ut ons, ou new custome s typ ca y enew the annua
subsc pt ons, and many a so choose to expand the cove age a ea If ou ex st ng custome s do not enew the subsc pt ons, ou evenues may dec ease Howeve , some
custome s may choose to not enew o educe the cove age Fo examp e, as a esu t of w desp ead dest uct on caused by hu canes n Pue to R co and the U S V g n Is ands,
n Septembe 20 7, we d scont nued ou se v ce to ou custome s n cove age a eas n those ocat ons and we c ass f ed the cont acts as exp ed because the custome s we e no
onge ve At the t me, the Hous ng Autho ty of Pue to R co had been one of ou a gest custome s If othe ex st ng custome s do not choose to enew o expand the
cove age a eas, ou evenues w not g ow as we ant c pate

Ou ab ty to fu the penet ate the ma ket fo ou pub c safety so ut ons depends on seve a facto s, nc ud ng ma nta n ng a h gh eve of custome sat sfact on and a
st ong eputat on among aw enfo cement; nc eas ng the awa eness of ou ShotSpotte F ex and ShotSpotte M ss ons so ut ons and the benef ts; the effect veness of ou
ma ket ng p og ams; the ava ab ty of fund ng to ou custome s; and the costs of ou so ut ons Some potent a pub c safety custome s may be e uctant o unw ng to use
ou so ut on fo a numbe of easons, nc ud ng conce ns about add t ona costs, unw ngness to expose o ack of conce n ega d ng the extent of gun v o ence n the
commun ty, unce ta nty ega d ng the e ab ty and secu ty of c oud-based offe ngs o ack of awa eness of the benef ts of ou pub c safety so ut ons If we a e unsuccessfu
n expand ng the cove age of ShotSpotte F ex by ex st ng pub c safety custome s o add ng new ShotSpotte F ex and ShotSpotte M ss ons pub c safety custome s, ou
evenues and g owth p ospects wou d suffe

If we are unable to sell our solutions into new markets, our revenues may not grow.
Pa t of ou g owth st ategy depends on ou ab ty to nc ease sa es of ou secu ty so ut ons and add new custome s fo ou pub c safety so ut on n ma kets outs de of
the Un ted States Ou secu ty so ut ons nc ude ShotSpotte M ss ons, ShotSpotte Labs, ShotSpotte Secu eCampus and ShotSpotte S teSecu e We a e focused on expand ng
the sa es of these so ut ons nto new ma kets, but custome s n these new ma kets may not be ecept ve o sa es may be de ayed beyond ou expectat ons, caus ng ou evenues
g owth and g owth p ospects to suffe

20
 Ou ab ty to successfu y face these cha enges depends on seve a facto s, nc ud ng nc eas ng the awa eness of ou so ut ons and the benef ts; the effect veness of
ou ma ket ng p og ams; the costs of ou so ut ons; ou ab ty to att act, eta n and effect ve y t a n sa es and ma ket ng pe sonne ; and ou ab ty to deve op e at onsh ps w th
commun cat on ca e s and othe pa tne s If we a e unsuccessfu n deve op ng and ma ket ng ou so ut ons nto new ma kets, new ma kets fo ou so ut ons m ght not deve op
o m ght deve op mo e s ow y than we expect, e the of wh ch wou d ha m ou evenues and g owth p ospects

Our sales cycle can be lengthy, time-consuming and costly, and our inability to successfully complete sales could harm our business.
Ou sa es p ocess nvo ves educat ng p ospect ve custome s and ex st ng custome s about the use, techn ca capab t es and benef ts of ou so ut ons P ospect ve
custome s, espec a y gove nment agenc es, often unde take a p o onged eva uat on p ocess that may ast up to n ne months o mo e and that typ ca y nvo ves compa ng the
benef ts of ou so ut ons to a te nat ve uses of funds We may spend substant a t me, effo t and money on ou sa es and ma ket ng effo ts w thout any assu ance that ou effo ts
w p oduce any sa es

Add t ona y, events affect ng ou custome s’ budgets o m ss ons may occu du ng the sa es cyc e that cou d negat ve y mpact the s ze o t m ng of a pu chase afte
we have nvested substant a t me, effo t and esou ces nto a potent a sa e, cont but ng to mo e unp ed ctab ty n the g owth of ou bus ness If we a e unab e to succeed n
c os ng sa es w th new and ex st ng custome s, ou bus ness, ope at ng esu ts and f nanc a cond t on w be ha med

Changes in the availability of federal funding to support local law enforcement efforts could impact our business.
Many of ou custome s e y to some extent on funds f om the U S fede a gove nment n o de to pu chase and pay fo ou so ut ons Any educt on n fede a fund ng
fo oca aw enfo cement effo ts cou d esu t n ou custome s hav ng ess access to funds equ ed to cont nue, enew, expand o pay fo ou so ut ons Fo examp e, changes n
po c es w th espect to “sanctua y c t es” may esu t n a educt on n fede a funds ava ab e to ou cu ent o potent a custome s If fede a fund ng s educed o e m nated
and ou custome s cannot f nd a te nat ve sou ces of fund ng to pu chase ou so ut ons, ou bus ness w be ha med

If our business does not grow as we expect, or if we fail to manage our growth effectively, our operating results and business prospects would suffer.
Ou ab ty to successfu y g ow ou bus ness depends on a numbe of facto s nc ud ng ou ab ty to
• acce e ate ou acqu s t on of new custome s;
• fu the se expans ons of cove age a eas to ou ex st ng custome s;
• expand ou nte nat ona footp nt;
• expand nto new ve t ca ma kets, such as ou ShotSpotte M ss ons, and ou secu ty so ut ons;
• nc ease awa eness of the benef ts that ou so ut ons offe ; and
• ma nta n ou compet t ve and techno ogy eade sh p pos t on

As usage of ou so ut ons g ows, we w need to cont nue to make nvestments to deve op and mp ement new o updated so ut ons, techno og es, secu ty featu es and
c oud-based nf ast uctu e ope at ons In add t on, we w need to app op ate y sca e ou nte na bus ness systems and ou se v ces o gan zat on, nc ud ng the supp e s of ou
detect on equ pment and custome suppo t se v ces, to se ve ou g ow ng custome base Any fa u e of, o de ay n, these effo ts cou d mpa the pe fo mance of ou so ut ons
and educe custome sat sfact on

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 Fu the , ou g owth cou d nc ease qu ck y and p ace a st a n on ou manage a , ope at ona , f nanc a and othe esou ces, and ou futu e ope at ng esu ts depend to
a a ge extent on ou ab ty to successfu y manage ou ant c pated expans on and g owth To manage ou g owth successfu y, we w need to cont nue to nvest n sa es and
ma ket ng, esea ch and deve opment, and gene a and adm n st at ve funct ons and othe a eas We a e ke y to ecogn ze the costs assoc ated w th these nvestments ea e
than ece v ng some of the ant c pated benef ts, and the etu n on these nvestments may be owe , o may deve op mo e s ow y, than we expect, wh ch cou d adve se y affect
ou ope at ng esu ts

If we a e unab e to manage ou g owth effect ve y, we may not be ab e to take advantage of ma ket oppo tun t es o deve op new so ut ons o upg ades to ou ex st ng
so ut ons, sat sfy custome equ ements, ma nta n the qua ty and secu ty of ou so ut ons o execute on ou bus ness p an, any of wh ch cou d have a mate a adve se effect on
ou bus ness, ope at ng esu ts and f nanc a cond t on

Our business is dependent upon our ability to deploy and deliver our solutions, and the failure to meet our customers’ expectations could harm our reputation, which may
have a material adverse effect on our business, operating results and financial condition.
P omot ng and demonst at ng the ut ty of ou so ut ons as usefu , e ab e and mpo tant too s fo aw enfo cement and secu ty pe sonne s c t ca to the success of
ou bus ness Ou ab ty to secu e custome enewa s and ente nto new custome cont acts s dependent on ou eputat on and ou ab ty to de ve ou so ut ons effect ve y
We be eve that ou eputat on among po ce depa tments us ng ShotSpotte F ex s pa t cu a y mpo tant to ou success Ou ab ty to meet custome expectat ons w depend
on a w de ange of facto s, nc ud ng
• ou ab ty to cont nue to offe h gh-qua ty, nnovat ve and accu ate gunshot detect on and gunshot dete ence se v ces, and p ec s on po c ng softwa e and
so ut ons;
• ou ab ty to ma nta n cont nuous mon to ng du ng h gh outdoo -no se act v ty pe ods such as New Yea ’s Day, the Fou th of Ju y and C nco de Mayo,
and Ca n va fo nte nat ona dep oyments;
• ou ab ty to ma nta n h gh custome sat sfact on, nc ud ng meet ng ou SLA standa ds;
• the pe ce ved va ue and qua ty of ou so ut ons;
• d ffe ences n op n on ega d ng the met cs that measu e the success of ou so ut ons;
• ou ab ty to successfu y commun cate the un que va ue p opos t on of ou so ut ons;
• ou ab ty to p ov de h gh-qua ty custome suppo t;
• any m suse o pe ce ved m suse of ou so ut ons;
• nte upt ons, de ays o attacks on ou p atfo m;
• t gat on- o egu at on- e ated deve opments; and
• damage to o deg adat on of ou senso s o senso netwo k by th d pa t es

Fu the mo e, negat ve pub c ty, whethe o not just f ed, e at ng to events o act v t es att butab e to us, ou so ut ons, ou emp oyees, ou pa tne s o othe s
assoc ated w th any of these pa t es, may ta n sh ou eputat on Damage to ou eputat on may educe demand fo ou so ut ons and wou d ke y have a mate a adve se effect
on ou bus ness, ope at ng esu ts and f nanc a cond t on Mo eove , any attempts to ebu d ou eputat on may be cost y and t me-consum ng, and such effo ts may not
u t mate y be successfu

Interruptions or performance problems associated with our technology and infrastructure may adversely affect our business and results of operations.
We have n the past expe enced, and may n the futu e expe ence, pe fo mance ssues due to a va ety of facto s, nc ud ng nf ast uctu e changes, human o softwa e
e o s, ntent ona o acc denta damage to ou techno ogy ( nc ud ng senso s), webs te o th d-pa ty host ng d s upt ons o capac ty const a nts due to a numbe of potent a
causes nc ud ng techn ca fa u es, natu a d saste s o secu ty attacks If ou secu ty s comp om sed, ou p atfo m s unava ab e o ou use s a e unab e to ece ve ou a e ts
o othe w se commun cate w th ou IRC, w th n a easonab e amount of t me o at a , ou bus ness cou d be negat ve y affected In some nstances, we may not be ab e to
dent fy the cause o causes of these pe fo mance p ob ems w th n an acceptab e pe od of t me

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 In add t on, ou IRC s ocated n a s ng e fac ty A though the funct ons of ou IRC can be pe fo med emote y, any nte upt on o de ay n se v ce f om ou IRC,
such as f om a commun cat ons o powe outage, cou d m t ou ab ty de ve ou so ut ons In add t on, t may become nc eas ng y d ff cu t to ma nta n and mp ove the
pe fo mance of ou so ut ons, espec a y du ng peak usage t mes as the capac ty of ou IRC ope at ons eaches ts m ts If the e s an nte upt on o de ay n se v ce f om ou
IRC and a gunshot s detected but not ev ewed n the a otted t me, ou softwa e w f ag the nc dent fo off ne ev ew Th s may esu t n de ayed not f cat ons to ou
custome s and as a esu t, we cou d expe ence a dec ne n custome sat sfact on w th ou so ut ons and ou eputat on and g owth p ospects cou d be ha med

We expect to cont nue to make s gn f cant nvestments to ma nta n and mp ove the pe fo mance of ou so ut ons To the extent that we do not effect ve y add ess
capac ty const a nts, upg ade ou systems as needed and cont nua y deve op ou techno ogy to accommodate actua and ant c pated changes n techno ogy, ou bus ness,
ope at ng esu ts and f nanc a cond t on may be adve se y affected

We rely on wireless carriers to provide access to wireless networks through which our acoustic sensors communicate with our cloud-based backend and with which we
provide our notification services to customers, and any interruption of such access would impair our business.
We e y on w e ess ca e s, ma n y AT&T and Ve zon, to p ov de access to w e ess netwo ks fo mach ne-to-mach ne data t ansm ss ons, wh ch a e an nteg a pa t
of ou se v ces Ou w e ess ca e s may suspend w e ess se v ce to expand, ma nta n o mp ove the netwo ks These w e ess ca e s pe fo m out ne ma ntenance and
pe od c softwa e and f mwa e updates that may damage ou senso s o make them nope ab e Any suspens on o othe nte upt on of se v ces wou d adve se y affect ou
ab ty to p ov de ou se v ces to ou custome s and may adve se y affect ou eputat on In add t on, the te ms of ou ag eements w th these w e ess ca e s p ov de that e the
pa ty can cance o te m nate the ag eement fo conven ence w th 90 days’ not ce If one of ou w e ess ca e s we e to te m nate ts ag eement w th us, we wou d need to
sou ce a d ffe ent w e ess ca e and/o mod fy ou equ pment du ng the not ce pe od n o de to m n m ze d s upt on n the pe fo mance of ou so ut ons P ce nc eases o
te m nat on by ou w e ess ca e s o changes to ex st ng cont act te ms cou d have a mate a adve se effect on ou bus ness, ope at ng esu ts and f nanc a cond t on

Natural disasters, infectious disease outbreaks, power outages or other events impacting us or our customers could harm our operating results and financial condition.
We ecogn ze evenue on a subsc pt on bas s as ou so ut ons a e p ov ded to ou custome s ove t me If ou se v ces a e d s upted due to natu a d saste s, powe
outages o othe events that we cannot cont o , as happened when hu canes h t Pue to R co and the U S V g n Is ands n 20 7, we may not be ab e to cont nue p ov d ng ou
so ut ons as expected

When we stop p ov d ng cove age, we a so stop ecogn z ng evenues as a esu t of the affected subsc pt on ag eement If we a e fo ced to d scont nue ou se v ces
due to natu a d saste s, powe outages and othe events outs de of ou cont o , ou evenues may dec ne, wh ch wou d negat ve y mpact ou esu ts of ope at ons and f nanc a
cond t on In add t on, we may face ab ty fo damages caused by ou senso s n the event of heavy weathe o othe natu a d saste s We may a so ncu add t ona costs to
epa o ep ace nsta ed senso netwo ks damaged by heavy weathe , hu canes o othe natu a d saste s

Any of ou fac t es o ope at ons may be ha med o ende ed nope ab e by natu a o man-made d saste s, nc ud ng ea thquakes, to nadoes, hu canes, w df es,
f oods, nuc ea d saste s, acts of te o sm o othe c m na act v t es, nfect ous d sease outb eaks, such as COVID- 9, and powe outages, wh ch may ende t d ff cu t o
mposs b e fo us to ope ate ou bus ness fo some pe od of t me o dec ease p oduct v ty Fo examp e, ou IRC and a data cente that hosts some of ou custome se v ces a e
ocated n the San F anc sco Bay A ea, a eg on known fo se sm c act v ty Ou fac t es wou d ke y be cost y to epa o ep ace, and any such effo ts wou d ke y equ e
substant a t me In add t on, ke many compan es, we have ecent y mp emented a wo k f om home po cy as a esu t of the COVID- 9 pandem c Th s po cy may negat ve y
mpact p oduct v ty Any d s upt ons n ou ope at ons cou d negat ve y mpact ou bus ness and ope at ng esu ts, and ha m ou eputat on In add t on, we may not ca y
bus ness nsu ance o may not ca y suff c ent bus ness nsu ance to compensate fo osses that may occu Any such osses o damages cou d have a mate a adve se effect on
ou bus ness, ope at ng esu ts and f nanc a cond t on In add t on, the fac t es of s gn f cant vendo s, nc ud ng the manufactu e of ou p op eta y

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acoust c senso , may be ha med o ende ed nope ab e by such natu a o man-made d saste s, wh ch may cause d s upt ons, d ff cu t es o mate a adve se effects on ou
bus ness

Real or perceived false positive gunshot alerts or failure or perceived failure to generate alerts for actual gunfire could adversely affect our customers and their operations,
damage our brand and reputation and adversely affect our growth prospects and results of operations.
A fa se pos t ve a e t, n wh ch a non-gunf e nc dent s epo ted as gunf e, cou d esu t n an unnecessa y ap d dep oyment of po ce off ce s and f st esponde s,
wh ch may a se unnecessa y fea among the occupants of a commun ty o fac ty, and may be deemed a waste of po ce and f st esponde esou ces A fa u e to a e t aw
enfo cement o secu ty pe sonne of actua gunf e (fa se negat ve) cou d esu t n a ess ap d o no esponse by po ce off ce s and f st esponde s, nc eas ng the p obab ty
of nju y o oss of fe Both fa se pos t ve a e ts and the fa u e to gene ate a e ts of actua gunf e (fa se negat ve) may esu t n custome d ssat sfact on, potent a oss of
conf dence n ou so ut ons, and potent a ab t es to custome s o othe th d pa t es, any of wh ch cou d ha m ou eputat on and adve se y mpact ou bus ness and ope at ng
esu ts Add t ona y, the pe cept on of a fa se pos t ve a e t o of a fa u e to gene ate an a e t, even whe e ou custome s unde stand that ou so ut ons we e ut zed co ect y,
cou d ead to negat ve pub c ty o ha m the pub c pe cept on of ou so ut ons, wh ch cou d ha m ou eputat on and adve se y mpact ou bus ness and ope at ng esu ts

Economic uncertainties or downturns, or political changes, could limit the availability of funds available to our customers and potential customers, which could materially
adversely affect our business.
Econom c unce ta nt es o downtu ns cou d adve se y affect ou bus ness and ope at ng esu ts Negat ve cond t ons n the gene a economy both n the Un ted States
and ab oad, nc ud ng cond t ons esu t ng f om changes n g oss domest c p oduct g owth, f nanc a and c ed t ma ket f uctuat ons, po t ca dead ock, natu a catast ophes,
such as the devastat on caused by the hu canes n Pue to R co and U S V g n Is ands, wa fa e, te o st attacks and nfect ous d sease outb eaks, such as COVID- 9, n the
Un ted States, Eu ope, the As a Pac f c eg on o e sewhe e, cou d cause a dec ease n funds ava ab e to ou custome s and potent a custome s and negat ve y affect the ate of
g owth of ou bus ness

These econom c cond t ons may make t ext eme y d ff cu t fo ou custome s and us to fo ecast and p an futu e budgeta y dec s ons o bus ness act v t es accu ate y,
and they cou d cause ou custome s to eeva uate the dec s ons to pu chase ou so ut ons, wh ch cou d de ay and engthen ou sa es cyc es o esu t n cance at ons of p anned
pu chases Fu the mo e, du ng cha eng ng econom c t mes o as a esu t of po t ca changes, ou custome s may t ghten the budgets and face const a nts n ga n ng t me y
access to suff c ent fund ng o othe c ed t, wh ch cou d esu t n an mpa ment of the ab ty to make t me y payments to us In tu n, we may be equ ed to nc ease ou
a owance fo doubtfu accounts, wh ch wou d adve se y affect ou f nanc a esu ts

We cannot p ed ct the t m ng, st ength o du at on of any econom c s owdown, nstab ty o ecove y, gene a y o w th n any pa t cu a ndust y, o the mpact of
po t ca changes If the econom c cond t ons of the gene a economy o ndust es n wh ch we ope ate wo sen f om p esent eve s, o f ecent po t ca changes esu t n ess
fund ng be ng ava ab e to pu chase ou so ut ons, ou bus ness, ope at ng esu ts, f nanc a cond t on and cash f ows cou d be adve se y affected

We have not been profitable historically and may not achieve or maintain profitability in the future.
We on y eached ou f st fu yea of net ncome n 20 9; p o to that, we posted a net oss n each yea s nce ncept on As of Decembe 3 , 20 9, we had an
accumu ated def c t of $95 6 m on We a e not ce ta n whethe we w be ab e to ma nta n h gh enough vo ume of sa es of ou so ut ons to susta n o nc ease ou g owth o
ma nta n p of tab ty n the futu e We a so expect ou costs to nc ease n futu e pe ods, wh ch cou d negat ve y affect ou futu e ope at ng esu ts f ou evenues do not
nc ease In pa t cu a , we expect to cont nue to expend substant a f nanc a and othe esou ces on
• sa es and ma ket ng, nc ud ng a s gn f cant expans on of ou sa es o gan zat on, both domest ca y and nte nat ona y;
• esea ch and deve opment e ated to ou so ut ons, nc ud ng nvestments n ou eng nee ng and techn ca teams;
• acqu s t on of comp ementa y techno og es o bus nesses, such as ou acqu s t on of HunchLab techno ogy n Octobe 20 8;

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 • cont nued nte nat ona expans on of ou bus ness; and
• gene a and adm n st at ve expenses, nc ud ng ega and account ng expenses e ated to ope at ng as a pub c company

These nvestments may not esu t n nc eased evenues o g owth n ou bus ness If we a e unab e to nc ease ou evenues at a ate suff c ent to offset the expected
nc ease n ou costs, ou bus ness, ope at ng esu ts and f nanc a pos t on may be ha med, and we may not be ab e to ma nta n p of tab ty ove the ong te m Add t ona y, we
may encounte unfo eseen ope at ng expenses, d ff cu t es, comp cat ons, de ays and othe unknown facto s that may esu t n osses n futu e pe ods If ou evenues g owth
does not meet ou expectat ons n futu e pe ods, ou f nanc a pe fo mance may be ha med, and we may not ma nta n p of tab ty n the futu e

We may require additional capital to fund our business and support our growth, and our inability to generate and obtain such capital on acceptable terms, or at all, could
harm our business, operating results, financial condition and prospects.
We ntend to cont nue to make substant a nvestments to fund ou bus ness and suppo t ou g owth In add t on, we may equ e add t ona funds to espond to bus ness
cha enges, nc ud ng the need to deve op new featu es o enhance ou so ut ons, mp ove ou ope at ng nf ast uctu e o acqu e o deve op comp ementa y bus nesses and
techno og es As a esu t, n add t on to the evenues we gene ate f om ou bus ness and ou ex st ng cash ba ances, we may need to engage n add t ona equ ty o debt
f nanc ngs to p ov de the funds equ ed fo these and othe bus ness endeavo s If we a se add t ona funds th ough futu e ssuances of equ ty o conve t b e debt secu t es, ou
ex st ng stockho de s cou d suffe s gn f cant d ut on, and any new equ ty secu t es we ssue cou d have ghts, p efe ences and p v eges supe o to those of ho de s of ou
common stock Any debt f nanc ng that we may secu e n the futu e cou d nvo ve est ct ve covenants e at ng to ou cap ta a s ng act v t es and othe f nanc a and
ope at ona matte s, wh ch may make t mo e d ff cu t fo us to obta n add t ona cap ta and to pu sue bus ness oppo tun t es, nc ud ng potent a acqu s t ons We may not be
ab e to obta n such add t ona f nanc ng on te ms favo ab e to us, f at a If we a e unab e to obta n adequate f nanc ng o f nanc ng on te ms sat sfacto y to us when we equ e
t, ou ab ty to cont nue to suppo t ou bus ness g owth and to espond to bus ness cha enges cou d be s gn f cant y mpa ed, and ou bus ness may be adve se y affected In
add t on, ou nab ty to gene ate o obta n the f nanc a esou ces needed may equ e us to de ay, sca e back, o e m nate some o a of ou ope at ons, wh ch may have a
mate a adve se effect on ou bus ness, ope at ng esu ts, f nanc a cond t on and p ospects

The incurrence of debt may impact our financial position and subject us to additional financial and operating restrictions.
On Septembe 27, 20 8, we ente ed nto a $ 0 0 m on sen o secu ed evo v ng c ed t fac ty w th Umpqua Bank (the “Umpqua C ed t Ag eement”), wh ch we
ntend to use fo gene a wo k ng cap ta pu poses As of Decembe 3 , 20 9, we had no outstand ng amounts due on no any usage of the Umpqua C ed t Ag eement

Unde the Umpqua C ed t Ag eement, we a e subject to va ous negat ve covenants that m t, subject to ce ta n exc us ons, ou ab ty to ncu ndebtedness, make
oans, nvest n o secu e the ob gat ons of othe pa t es, pay o dec a e d v dends, make d st but ons w th espect to ou secu t es, edeem outstand ng sha es of ou stock,
c eate subs d a es, mate a y change the natu e of ts bus ness, ente nto e ated pa ty t ansact ons, engage n me ge s and bus ness comb nat ons, the acqu s t on o t ansfe of
Company assets outs de of the o d na y cou se of bus ness, g ant ens o ente nto co ate a e at onsh ps nvo v ng company assets o e nco po ate, eo gan ze o d sso ve the
Company These covenants cou d adve se y affect ou f nanc a hea th and bus ness and futu e ope at ons by, among othe th ngs
• mak ng t mo e d ff cu t to sat sfy ou ob gat ons, nc ud ng unde the te ms of the Umpqua C ed t Ag eement;
• m t ng ou ab ty to ef nance ou debt on te ms acceptab e to us o at a ;
• m t ng ou f ex b ty to p an fo and adjust to chang ng bus ness and ma ket cond t ons and nc eas ng ou vu ne ab ty;

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 • m t ng ou ab ty to use ou ava ab e cash f ow to fund futu e acqu s t ons, wo k ng cap ta , bus ness act v t es, and othe gene a co po ate equ ements;
and
• m t ng ou ab ty to obta n add t ona f nanc ng fo wo k ng cap ta to fund g owth o fo gene a co po ate pu poses, even when necessa y to ma nta n
adequate qu d ty

We a e a so equ ed to ma nta n ce ta n f nanc a covenants t ed to ou eve age, nte est cha ges and p of tab ty Ou ab ty to meet such covenants (those negat ve
covenants d scussed n the p eced ng pa ag aph) o othe est ct ons can be affected by events beyond ou cont o , and ou fa u e to comp y w th the f nanc a and othe
covenants wou d be an event of defau t unde the Umpqua C ed t Ag eement If an event of defau t unde the Umpqua C ed t Ag eement, has occu ed and s cont nu ng, the
outstand ng bo ow ngs the eunde cou d become mmed ate y due and payab e, and we wou d then be equ ed to cash co ate a ze any ette s of c ed t then outstand ng, and
the ende cou d efuse to pe m t add t ona bo ow ngs unde the fac ty We cannot assu e you that we wou d have suff c ent assets to epay those bo ow ngs and, f we a e
unab e to epay those amounts, the ende cou d p oceed aga nst the co ate a g anted to them to secu e such ndebtedness We have p edged substant a y a of ou assets as
co ate a , and an event of defau t wou d ke y have a mate a adve se effect on ou bus ness

New competitors may enter the market for our public safety solution.
If c t es and othe gove nment ent t es nc ease the effo ts to educe gun v o ence o ou so ut ons ga n v s b ty n the ma ket, compan es cou d dec de to ente nto
the pub c safety so ut on ma ket and the eby nc ease the compet t on we face In add t on to othe gunshot detect on p oducts, we a so compete w th othe techno og es and
so ut ons ta get ng ou pub c safety custome s’ esou ces fo aw enfo cement and c me p event on Ou compet to s cou d benef t f om the d sc osu e of ou data o
nfo mat on conce n ng ou techn ques and p ocesses due to ega o othe ob gat ons (fo examp e, as a esu t of pub c- eco ds equests o subpoenas to p ov de nfo mat on o
to test fy n cou t) Because the e a e seve a poss b e uses fo these m ted budgeta y esou ces, f we a e not ab e to compete successfu y fo these m ted esou ces, ou
bus ness may not g ow as we expect, wh ch cou d adve se y mpact ou evenues and ope at ng esu ts

The competitive landscape for our security solutions is evolving.

The ma ket fo secu ty so ut ons fo un ve s ty campuses, co po ate campuses and t anspo tat on and key nf ast uctu e cente s nc udes a numbe of ava ab e
opt ons, such as v deo su ve ance and nc eased human secu ty p esence Because the e a e seve a poss b e uses of funds fo secu ty needs, we may face nc eased
cha enges n demonst at ng o d st ngu sh ng the benef ts of ShotSpotte Secu eCampus and ShotSpotte S teSecu e In pa t cu a , wh e we have seen g ow ng nte est n ou
secu ty so ut ons, nte est n the ndoo gunshot detect on offe ng was m ted, and as a esu t, n June 20 8, we made the st ateg c dec s on to cease ndoo cove age as pa t of
ou se v ce offe ng Wh e ou ShotSpotte M ss ons may nc ease sa es of ou outdoo detect on se v ces, we may face cha enges n demonst at ng o d st ngu sh ng the
benef ts of ShotSpotte M ss ons’ deve opment of c me fo ecasts and nc eased effect veness of pat o esou ces

Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to increase our customer base and achieve broader market acceptance
of our solutions.
To nc ease tota custome s and custome cove age a eas and to ach eve b oade ma ket acceptance of ou so ut ons, we w need to expand ou sa es and ma ket ng
o gan zat on and nc ease ou bus ness deve opment esou ces, nc ud ng the ve t ca and geog aph c d st but on of ou sa es fo ce and ou teams of account execut ves focused
on new accounts and espons b e fo enewa and g owth of ex st ng accounts

Ou bus ness equ es that ou sa es pe sonne have pa t cu a expe t se and expe ence n wo k ng w th aw enfo cement agenc es, othe gove nment o gan zat ons and
h ghe educat on nst tut ons We may not ach eve evenues g owth f om expand ng ou sa es fo ce f we a e unab e to h e, deve op and eta n ta ented sa es pe sonne w th
app op ate expe ence, f ou new sa es pe sonne a e unab e to ach eve des ed p oduct v ty eve s n a easonab e pe od of t me o f ou sa es and ma ket ng p og ams a e not
effect ve

26
Our strategy includes pursuing acquisitions, and our inability to successfully integrate newly-acquired technologies, assets or businesses may harm our financial results.
Future acquisitions of technologies, assets or businesses, which are paid for partially or entirely through the issuance of stock or stock rights, could dilute the ownership of
our existing stockholders.
We w eva uate and cons de potent a st ateg c t ansact ons, nc ud ng acqu s t ons of, o nvestments n, bus nesses, techno og es, se v ces, p oducts and othe assets
n the futu e Fo examp e, n Octobe 20 8, we acqu ed the HunchLab techno ogy and e ated assets f om Azavea Inc We a so may ente nto e at onsh ps w th othe
bus nesses to expand ou p atfo m and app cat ons, wh ch cou d nvo ve p efe ed o exc us ve censes, add t ona channe s of d st but on, d scount p c ng o nvestments n
othe compan es

We be eve that pa t of ou cont nued g owth w be d ven by acqu s t ons of othe compan es o the techno og es, assets, bus nesses and teams The HunchLab
acqu s t on g ves se, and any acqu s t ons n the futu e that we comp ete w g ve se, to sks, nc ud ng
• ncu ng h ghe than ant c pated cap ta expend tu es and ope at ng expenses;
• fa ng to ass m ate the ope at ons and pe sonne o fa ng to eta n the key pe sonne of the acqu ed company o bus ness;
• fa ng to nteg ate the acqu ed techno og es, o ncu ng s gn f cant expense to nteg ate acqu ed techno og es, nto ou p atfo m and app cat ons;
• d s upt ng ou ongo ng bus ness;
• d ve t ng ou management’s attent on and othe company esou ces;
• fa ng to ma nta n un fo m standa ds, cont o s and po c es;
• ncu ng s gn f cant account ng cha ges;
• mpa ng e at onsh ps w th ou custome s and emp oyees;
• f nd ng that the acqu ed techno ogy, asset o bus ness does not fu the ou bus ness st ategy, that we ove pa d fo the techno ogy, asset o bus ness o that
we may be equ ed to w te off acqu ed assets o nvestments pa t a y o ent e y;
• fa ng to ea ze the expected syne g es of the t ansact on;
• be ng exposed to unfo eseen ab t es and cont ngenc es that we e not dent f ed p o to acqu ng the company; and
• be ng unab e to gene ate suff c ent evenues and p of ts f om acqu s t ons to offset the assoc ated acqu s t on costs

Fu y nteg at ng an acqu ed techno ogy, asset o bus ness nto ou ope at ons may take a s gn f cant amount of t me We may not be successfu n ove com ng these
sks o any othe p ob ems encounte ed w th acqu s t ons To the extent that we do not successfu y avo d o ove come the sks o p ob ems e ated to any such acqu s t ons,
ou esu ts of ope at ons and f nanc a cond t on cou d be ha med Acqu s t ons a so cou d mpact ou f nanc a pos t on and cap ta equ ements, o cou d cause f uctuat ons n
ou qua te y and annua esu ts of ope at ons Acqu s t ons cou d nc ude s gn f cant goodw and ntang b e assets, wh ch may esu t n futu e mpa ment cha ges that wou d
educe ou stated ea n ngs We may ncu s gn f cant costs n ou effo ts to engage n st ateg c t ansact ons and these expend tu es may not esu t n successfu acqu s t ons

We expect that the cons de at on we m ght pay fo any futu e acqu s t ons of techno og es, assets, bus nesses o teams cou d nc ude stock, ghts to pu chase stock,
cash o some comb nat on of the fo ego ng If we ssue stock o ghts to pu chase stock n connect on w th futu e acqu s t ons, net ncome pe sha e and then-ex st ng ho de s of
ou common stock may expe ence d ut on

27
The nature of our business exposes us to inherent liability risks.
Ou so ut ons, nc ud ng ShotSpotte F ex, ShotSpotte Secu eCampus and ShotSpotte S teSecu e, a e des gned to commun cate ea -t me a e ts of gunf e nc dents to
po ce off ce s and f st esponde s Due to the natu e of such app cat ons, we a e potent a y exposed to g eate sks of ab ty fo emp oyee acts o om ss ons o system
fa u es than may be nhe ent n othe bus nesses A though substant a y a of ou custome ag eements conta n p ov s ons m t ng ou ab ty to ou custome s, we cannot be
ce ta n that these m tat ons w be enfo ced o that the costs of any t gat on e ated to actua o a eged om ss ons o fa u es wou d not have a mate a adve se effect on us
even f we p eva Fu the , ce ta n of ou nsu ance po c es and the aws of some states may m t o p oh b t nsu ance cove age fo pun t ve o ce ta n othe types of damages
o ab ty a s ng f om g oss neg gence, o othe ssues, such as damages caused due to nsta at on of ou senso s on bu d ngs owned by th d pa t es, and we cannot assu e
you that we a e adequate y nsu ed aga nst the sks that we face

The nature of our business may result in undesirable press coverage or other negative publicity.
Ou so ut ons a e used to ass st aw enfo cement and f st esponde s n the event that gunf e s detected Even when ou so ut ons wo k as ntended, the nc dents
detected by ou so ut ons cou d ead to nju y, oss of fe and othe negat ve outcomes, and such events a e ke y to ece ve negat ve pub c ty If we fa to detect an nc dent, o
f we detect an nc dent, such as a te o st attack o act ve-shoote event, but the esponse t me of aw enfo cement o f st esponde s s not suff c ent y qu ck to p event nju y,
oss of fe, p ope ty damage o othe adve se outcomes, we may ece ve negat ve med a attent on At t mes, ou data o nfo mat on conce n ng ou techn ques and p ocesses
may become a matte of pub c eco d due to ega o othe ob gat ons (fo examp e, as a esu t of pub c- eco ds equests o subpoenas to p ov de nfo mat on o to test fy n
cou t), and we may ece ve negat ve med a attent on as a esu t

In add t on, ou so ut ons equ e that ou custome s mon to a e ts and espond t me y to not f cat ons of gunshots If ou custome s do not fu y ut ze ou systems,
we may be subject to c t c sm and unf atte ng med a cove age ega d ng the effect veness of ou so ut ons and the cost of ou so ut ons to ou custome s Such negat ve
pub c ty cou d have an adve se mpact on new sa es o enewa s o expans ons of cove age a eas by ex st ng custome s, wh ch wou d adve se y mpact ou f nanc a esu ts and
futu e p ospects

Real or perceived errors, failures or bugs in our software could adversely affect our operating results and growth prospects.
Because ou softwa e s comp ex, undetected e o s, fa u es o bugs may occu Ou softwa e s often nsta ed and used w th d ffe ent ope at ng systems, system
management softwa e, and equ pment and netwo k ng conf gu at ons, wh ch may cause e o s o fa u es of ou softwa e o othe aspects of the comput ng env onment nto
wh ch t s dep oyed In add t on, dep oyment of ou softwa e nto comput ng env onments may expose undetected e o s, compat b ty ssues, fa u es o bugs n ou softwa e
Desp te ou test ng, e o s, fa u es o bugs may not be found n ou softwa e unt t s e eased to ou custome s Mo eove , ou custome s cou d nco ect y mp ement o
nadve tent y m suse ou softwa e, wh ch cou d esu t n custome d ssat sfact on and adve se y mpact the pe ce ved ut ty of ou p oducts as we as ou b and Any of these
ea o pe ce ved e o s, compat b ty ssues, fa u es o bugs n ou softwa e cou d esu t n negat ve pub c ty, eputat ona ha m, oss of o de ay n ma ket acceptance of ou
softwa e, oss of compet t ve pos t on o c a ms by custome s fo osses susta ned by them In any such event, we may be equ ed, o may choose, fo custome e at ons o
othe easons, to expend add t ona esou ces n o de to co ect the p ob em A ev at ng any of these p ob ems cou d equ e s gn f cant expend tu es of ou cap ta and othe
esou ces and cou d cause nte upt ons o de ays n the use of ou so ut ons, wh ch cou d cause us to ose ex st ng o potent a custome s and cou d adve se y affect ou
ope at ng esu ts and g owth p ospects

28
 Interruptions or delays in service from our third-party providers could impair our ability to make our solutions available to our customers, resulting in customer
dissatisfaction, damage to our reputation, loss of customers, limited growth and reduction in revenues.
We cu ent y use th d-pa ty data cente host ng fac t es to host ce ta n components of ou so ut ons Ou ope at ons depend, n pa t, on ou th d-pa ty p ov de s’
ab t es to p otect these fac t es aga nst damage o nte upt on f om natu a d saste s, powe o commun cat ons fa u es, cybe nc dents, c m na acts and s m a events In
the event that any of ou th d-pa ty fac ty a angements s te m nated, o f the e s a apse of se v ce o damage to a fac ty, we cou d expe ence se v ce nte upt ons n ou
so ut ons as we as de ays and add t ona expenses n a ang ng new fac t es and se v ces Any changes n th d-pa ty se v ce eve s at ou data cente s o any e o s, defects,
d s upt ons, cybe nc dents o othe pe fo mance p ob ems w th ou so ut ons cou d ha m ou eputat on

Any damage to, o fa u e of, the systems of ou th d-pa ty p ov de s cou d esu t n nte upt ons to ou so ut ons Desp te p ecaut ons taken at ou data cente s, the
occu ence of sp kes n usage vo ume, natu a d saste s, cybe nc dents, acts of te o sm, vanda sm o sabotage, c osu e of a fac ty w thout adequate not ce o othe
unant c pated p ob ems cou d esu t n engthy nte upt ons n the ava ab ty of ou se v ces P ob ems faced by ou th d-pa ty data cente ocat ons, w th the netwo k
p ov de s w th whom they cont act, o w th the systems by wh ch ou commun cat ons p ov de s a ocate capac ty among the custome s, nc ud ng us, cou d adve se y affect
the expe ence of ou custome s Inte upt ons n ou se v ces m ght cause us to ssue efunds to custome s and subject us to potent a ab ty

Fu the , ou nsu ance po c es may not adequate y compensate us fo any osses that we may ncu n the event of damage o nte upt on, and the efo e the occu ence
of any of the fo ego ng cou d subject us to ab ty, cause us to ssue c ed ts to custome s o cause custome s not to enew the subsc pt ons fo ou app cat ons, any of wh ch
cou d mate a y adve se y affect ou bus ness

If our security measures or those of our customers or third-party providers are compromised, or if unauthorized access to the data of our customers is otherwise obtained,
our solutions may be perceived as not being secure, our customers may be harmed and may curtail or cease their use of our solutions, our reputation may be damaged and
we may incur significant liabilities.
Ou ope at ons nvo ve the sto age and t ansm ss on of gunf e nc dent data, nc ud ng date, t me, add ess and GPS coo d nates, occu ng n ou custome ’s cove age
a ea Secu ty nc dents, whethe as a esu t of th d-pa ty act on, emp oyee o custome e o , techno ogy mpa ment o fa u e, ma feasance o c m na act v ty, cou d esu t n
unautho zed access to, o oss o unautho zed d sc osu e of, th s gunf e nc dent data, wh ch cou d esu t n t gat on expenses o damages, ndemn ty and othe cont actua
ob gat ons and othe poss b e ab t es, nc ud ng but not m ted to gove nment f nes and pena t es and m t gat on expenses, as we as negat ve pub c ty, wh ch cou d damage
ou eputat on, mpa ou sa es and ha m ou custome s and ou bus ness Cybe nc dents and ma c ous nte net-based act v ty cont nue to nc ease gene a y, and p ov de s of
c oud-based se v ces have been ta geted If th d pa t es w th whom we wo k, such as vendo s o deve ope s, v o ate app cab e aws o ou secu ty po c es, such v o at ons
may a so put ou gunf e nc dent data at sk and cou d n tu n have an adve se effect on ou bus ness In add t on, such a v o at on cou d expose the ocat ons of ou senso s,
nc ud ng those senso s fo wh ch we obta ned th d-pa ty consents that nc ude conf dent a ty ob gat ons We may be unab e to ant c pate o p event techn ques used to obta n
unautho zed access o to sabotage systems because such techn ques change f equent y and often a e not detected unt afte an nc dent has occu ed As we nc ease ou
custome base and ou b and becomes mo e w de y known and ecogn zed, th d pa t es may nc eas ng y seek to comp om se ou secu ty cont o s o ga n unautho zed access
to custome data o othe sens t ve nfo mat on Fu the , because of the natu e of the se v ces that we p ov de to ou custome s, we may be a un que ta get fo attacks

Many gove nments have enacted aws equ ng compan es to not fy nd v dua s of data secu ty nc dents o unautho zed t ansfe s nvo v ng ce ta n types of pe sona
data In add t on, some of ou custome s cont actua y equ e not f cat on of any data secu ty nc dent Acco d ng y, secu ty nc dents expe enced by ou compet to s, by ou
custome s o by us may ead to pub c d sc osu es, wh ch may ead to w desp ead negat ve pub c ty Any secu ty comp om se n ou ndust y, whethe actua o pe ce ved,
cou d ha m ou eputat on, e ode custome conf dence n the effect veness of ou secu ty measu es, negat ve y mpact ou ab ty to att act new custome s, cause ex st ng
custome s to e ect not to enew the subsc pt ons o subject us to th d-pa ty awsu ts, egu ato y f nes o othe act on o ab ty, wh ch cou d mate a y and adve se y affect
ou bus ness and ope at ng esu ts Fu the , the costs of comp ance w th not f cat on aws and cont actua ob gat ons may be s gn f cant and any equ ement that we p ov de
such not f cat ons as a esu t of an actua o a eged comp om se cou d have a mate a and adve se effect on ou bus ness

29
 Wh e we ma nta n gene a ab ty nsu ance cove age and cove age fo e o s o om ss ons, we cannot assu e you that such cove age wou d be adequate o wou d
othe w se p otect us f om ab t es o damages w th espect to c a ms a eg ng comp om se o oss of data, o that such cove age w cont nue to be ava ab e on acceptab e
te ms o at a

We rely on the cooperation of customers and third parties to permit us to install our ShotSpotter sensors on their facilities, and failure to obtain these rights could increase
our costs or limit the effectiveness of our ShotSpotter Flex solution.
Ou ShotSpotte F ex so ut on equ es us to dep oy ShotSpotte senso s n ou custome cove age a eas, wh ch typ ca y enta s the nsta at on of app ox mate y 20 to
25 senso s pe squa e m e The ShotSpotte senso s a e mounted on c ty fac t es and th d-pa ty bu d ngs, and occas ona y on c ty o ut ty-owned ght po es, and nsta ng
the senso s equ es the consent of the p ope ty owne s, wh ch can be t me-consum ng to obta n and can de ay dep oyment Gene a y, we do not pay a s te cense fee n o de to
nsta ou senso s, and ou cont actua ag eements w th these fac ty owne s p ov de them the ght to evoke pe m ss on to use the fac ty w th not ce of gene a y 60 days

To the extent that equ ed consents de ay ou ab ty to dep oy ou so ut ons o fac ty owne s do not g ant pe m ss on to use the fac t es, evoke p ev ous y g anted
pe m ss ons, o equ e us to pay a s te cense fee n o de to nsta ou senso s, ou bus ness may be ha med If we we e equ ed to pay a s te cense fee n o de to nsta
senso s, ou dep oyment expenses wou d nc ease, wh ch wou d mpact ou g oss ma g ns If we cannot obta n a suff c ent numbe of senso mount ng ocat ons that a e
app op ate y d spe sed n a cove age a ea, the effect veness of ou ShotSpotte F ex so ut on wou d be m ted, we may need to educe the cove age a ea of the so ut on, o we
may not be ab e to meet ou se v ce eve equ ements, any of wh ch cou d esu t n custome d ssat sfact on o have a mate a adve se mpact on ou eputat on, ou bus ness
and ou f nanc a esu ts

If we fail to offer high-quality customer support, our business and reputation may suffer.
We offe custome suppo t 24 hou s a day, seven days a week, as we as t a n ng on best p act ces, fo ens c expe t se and expe t w tness se v ces P ov d ng these
se v ces equ es that ou pe sonne have spec f c expe ence, know edge and expe t se, mak ng t mo e d ff cu t fo us to h e qua f ed pe sonne and to sca e up ou suppo t
ope at ons The mpo tance of h gh-qua ty custome suppo t w nc ease as we expand ou bus ness and pu sue new custome s We may be unab e to espond qu ck y enough
to accommodate sho t-te m nc eases n custome demand fo suppo t se v ces o sca e ou se v ces f ou bus ness g ows Inc eased custome demand fo these se v ces,
w thout co espond ng evenues, cou d nc ease ou costs and ha m ou ope at ng esu ts If we do not he p ou custome s use app cat ons w th n ou so ut ons and p ov de
effect ve ongo ng suppo t, ou ab ty to se add t ona app cat ons to, o to eta n, ex st ng custome s may suffe and ou eputat on w th ex st ng o potent a custome s may be
ha med

Our reliance on wireless carriers will require updates to our technology, and making such updates could result in disruptions in our service or increase our costs of
operations.
App ox mate y 60% of ou nsta ed ShotSpotte senso s use fou th-gene at on Long-Te m Evo ut on (“LTE”) w e ess techno ogy and 40% use th d-gene at on
(“3G”) ce u a commun cat ons Ou US w e ess ca e s have adv sed us that they w d scont nue the 3G se v ces n the futu e and ou ShotSpotte senso s w not be ab e
to t ansm t on these netwo ks As a esu t, we w have to upg ade the senso s that use 3G ce u a commun cat ons at no add t ona cost to ou custome s p o to the
d scont nuat on of 3G se v ces As ou w e ess ca e s phase out the 3G se v ces o make changes to the spect um a ocat on, we may expe ence educed se v ce
pe fo mance, wh ch may equ e us to ep ace ou 3G senso s soone than p anned O g na y, we had expected to sta t ncu ng costs to do so m d-2020 th ough 2022 We
have begun p ans to ep ace senso s n ce ta n geog aph c a eas sta t ng n ea y 202 Acce e ated bandw dth changes by ou ca e s may equ e us to cont nue to acce e ate
the upg ade of ou 3G senso s p o to 202 , wh ch wou d acce e ate the costs assoc ated w th the upg ade These senso ep acements w equ e s gn f cant cap ta
expend tu es, wh ch a e est mated to be between $4 0 m on and $6 0 m on n tota and may educe ou g oss ma g ns and a so d ve t management’s attent on and othe
mpo tant esou ces away f om ou custome se v ce and sa es effo ts fo new custome s

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 In the futu e, we may not be ab e to successfu y mp ement new techno og es o adapt ex st ng techno og es to chang ng maket demands If we a e unab e to adapt
t me y to chang ng techno og es, ma ket cond t ons o custome p efe ences, ou bus ness, ope at ng esu ts and f nanc a cond t on cou d be mate a y and adve se y affected

Concerns regarding privacy and government-sponsored surveillance may deter customers from purchasing our solutions.
Gove nmenta agenc es and p vate c t zens have become nc eas ng y sens t ve to ea o pe ce ved gove nment o th d-pa ty su ve ance and may w ong y be eve
that ou outdoo senso s a ow custome s to sten to p vate conve sat ons and mon to p vate c t zen act v ty Ou senso s a e not des gned fo “ ve sten ng” and a e t gge ed
on y at oud mpu s ve sounds that may ke y be gunf e Howeve , pe ce ved p vacy conce ns may esu t n negat ve med a cove age and effo ts by p vate c t zens to pe suade
mun c pa t es, educat ona nst tut ons o othe potent a custome s not to pu chase ou so ut ons fo the commun t es, campuses o fac t es In add t on, aws may ex st o be
enacted to add ess such conce ns that cou d mpact ou ab ty to dep oy ou so ut ons Fo examp e, the C ty of To onto, Canada dec ded aga nst us ng ShotSpotte so ut ons
because the M n st y of the Atto ney Gene a of Onta o nd cated that t may comp om se Sect on 8 of Canada’s Cha te of R ghts and F eedoms, wh ch e ates to un easonab e
sea ch and se zu e If custome s choose not to pu chase ou so ut ons due to p vacy o su ve ance conce ns, then the ma ket fo ou so ut ons may deve op mo e s ow y than
we expect, o t may not ach eve the g owth potent a we expect, any of wh ch wou d adve se y affect ou bus ness and f nanc a esu ts

We rely on a limited number of suppliers and contract manufacturers, and our proprietary ShotSpotter sensors are manufactured by a single contract manufacturer.
We e y on a m ted numbe of supp e s and cont act manufactu e s In pa t cu a , we use a s ng e manufactu e , w th wh ch we have no ong-te m cont act and f om
wh ch we pu chase on a pu chase-o de bas s, to p oduce ou p op eta y ShotSpotte senso s Ou e ance on a so e cont act manufactu e nc eases ou sks s nce we do not
cu ent y have any a te nat ve o ep acement manufactu e s, and we do not ma nta n a h gh vo ume of nvento y In the event of an nte upt on f om a cont act manufactu e ,
we may not be ab e to deve op a te nate o seconda y sou ces w thout ncu ng mate a add t ona costs and substant a de ays Fu the mo e, these sks cou d mate a y and
adve se y affect ou bus ness f ou cont act manufactu e s mpacted by a natu a d saste o othe nte upt on at a pa t cu a ocat on because each of ou cont act
manufactu e s p oduces ou p oducts f om a s ng e ocat on A though ou cont act manufactu e has a te nat ve manufactu ng ocat ons, t ansfe ng manufactu ng to anothe
ocat on may esu t n s gn f cant de ays n the ava ab ty of ou senso s A so, many standa d zed components used b oad y n ou senso s a e manufactu ed n s gn f cant
quant t es n concent ated geog aph c eg ons, pa t cu a y n G eate Ch na As a esu t, p ot acted eg ona c ses, such as the ecent outb eak of the COVID- 9 d sease n
G eate Ch na, cou d ead to eventua sho tages of necessa y components It cou d be d ff cu t, cost y and t me consum ng to obta n a te nat ve sou ces fo these components, o
to change p oduct des gns to make use of a te nat ve components In add t on, d ff cu t es n t ans t on ng f om an ex st ng supp e to a new supp e cou d c eate de ays n
component ava ab ty that wou d have a s gn f cant mpact on ou ab ty to fu f o de s fo ou p oducts

Many of the key components used to manufactu e ou p op eta y ShotSpotte senso s a so come f om m ted o so e sou ces of supp y Ou cont act manufactu e
gene a y pu chases these components on ou beha f, and we do not have any ong-te m a angements w th ou supp e s We a e the efo e subject to the sk of sho tages and
ong ead t mes n the supp y of these components and the sk that supp e s d scont nue o mod fy components used n ou p oducts In add t on, the ead t mes assoc ated w th
ce ta n components a e engthy and p ec ude ap d changes n quant t es and de ve y schedu es Deve op ng a te nate sou ces of supp y fo these components may be t me-
consum ng, d ff cu t, and cost y, and we o ou supp e s may not be ab e to sou ce these components on te ms that a e acceptab e to us, o at a , wh ch may unde m ne ou
ab ty to f ou o de s n a t me y manne

3
 If we expe ence s gn f cant y nc eased demand, o f we need to ep ace an ex st ng supp e o cont act manufactu e , we may be unab e to supp ement o ep ace
such supp y o cont act manufactu ng on te ms that a e acceptab e to us, wh ch may unde m ne ou ab ty to de ve ou p oducts to custome s n a t me y manne Fo
examp e, fo ou ShotSpotte senso s, t may take a s gn f cant amount of t me to dent fy a cont act manufactu e that has the capab ty and esou ces to bu d the senso s to ou
spec f cat ons Ident fy ng su tab e supp e s and cont act manufactu e s s an extens ve p ocess that equ es us to become sat sf ed w th the qua ty cont o , techn ca
capab t es, espons veness and se v ce, f nanc a stab ty, egu ato y comp ance, and abo and othe eth ca p act ces Acco d ng y, the oss of any key supp e o cont act
manufactu e cou d adve se y mpact ou bus ness, ope at ng esu ts and f nanc a cond t on

Our solutions use third-party software and services that may be difficult to replace or cause errors or failures of our solutions that could lead to a loss of customers or harm
to our reputation and our operating results.
We cense th d-pa ty softwa e and depend on se v ces f om va ous th d pa t es fo use n ou so ut ons In the futu e, such softwa e o se v ces may not be ava ab e
to us on comme c a y easonab e te ms, o at a Any oss of the ght to use any of the softwa e o se v ces cou d esu t n dec eased funct ona ty of ou so ut ons unt
equ va ent techno ogy s e the deve oped by us o , f ava ab e f om anothe p ov de , s dent f ed, obta ned and nteg ated, wh ch cou d ha m ou bus ness In add t on, any
e o s o defects n o fa u es of the th d-pa ty softwa e o se v ces cou d esu t n e o s o defects n ou so ut ons o cause ou so ut ons to fa , wh ch cou d ha m ou
bus ness and be cost y to co ect Many of these p ov de s attempt to mpose m tat ons on the ab ty fo such e o s, defects o fa u es, and f enfo ceab e, we may have
add t ona ab ty to ou custome s o th d-pa ty p ov de s that cou d ha m ou eputat on and nc ease ou ope at ng costs

We w need to ma nta n ou e at onsh ps w th th d-pa ty softwa e and se v ce p ov de s, and obta n f om such p ov de s softwa e and se v ces that do not conta n
any e o s o defects Any fa u e to do so cou d adve se y mpact ou ab ty to de ve effect ve p oducts to ou custome s and cou d ha m ou ope at ng esu ts

If we do not or cannot maintain the compatibility of our platform with applications that our customers use, our business could suffer.
Some of ou custome s choose to nteg ate ou so ut ons w th ce ta n othe systems used by ou custome s, such as ea -t me c me cente p atfo ms o compute -a ded
d spatch systems The funct ona ty and popu a ty of ou so ut ons depend, n pa t, on ou ab ty to nteg ate ou so ut ons these systems P ov de s of these systems may
change the featu es of the techno og es, est ct ou access to the app cat ons o a te the te ms gove n ng use of the app cat ons n an adve se manne Such changes cou d
funct ona y m t o te m nate ou ab ty to use these techno og es n conjunct on w th ou so ut ons, wh ch cou d negat ve y mpact ou custome se v ce and ha m ou
bus ness If we fa to nteg ate ou so ut ons w th app cat ons that ou custome s use, we may not be ab e to offe the funct ona ty that ou custome s need, and ou custome s
may not enew the ag eements, wh ch wou d negat ve y mpact ou ab ty to gene ate evenues and adve se y mpact ou bus ness

We are subject to governmental regulation and other legal obligations, particularly related to privacy, data protection and information security, and our actual or perceived
failure to comply with such obligations could harm our business. Compliance with such laws could impair our efforts to maintain and expand our customer base, and
thereby decrease our revenues.
Ou outdoo senso s a e acoust c dev ces that a e des gned to ecogn ze mpu s ve sounds that a e ke y to be gunf e ShotSpotte senso s do not use h gh ga n,
d ect ona o othe spec a zed m c ophones

The senso s do not have the ab ty to ve st eam aud o Typ ca y, sounds, no ses o vo ces captu ed on the secu e senso s a e cached tempo a y but a e w tten ove
and pe manent y de eted w th n 30 hou s When a senso s t gge ed by an mpu s ve sound, t c eates a potent a gunshot “ nc dent” that conta ns a eco d ng, wh ch nc udes
no mo e than one second befo e the nc dent and one second afte the nc dent Th s nc dent aud o sn ppet s p ese ved ndef n te y fo potent a ev dent a y use

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 The e s the potent a to nc ude human vo ces that occu at the same t me as the gunshot n these nc dent aud o sn ppets We eta n nc dent aud o sn ppets
ndef n te y as ev dence We a so use nfo mat on co ected to suppo t, expand and mp ove ou softwa e a go thms as we as ou gunf e detect on and not f cat on methods
Senso s a e often nsta ed n dense y popu ated u ban a eas They a e not des gned o tuned to captu e human vo ces, but t s poss b e they cou d p ck up a human vo ce
Human vo ces a e not mpu s ve and do not typ ca y t gge the senso s, and un ess accompan ed by an mpu s ve sound no aud o sn ppet wou d be t ansm tted out of the
senso and p ese ved as an nc dent aud o sn ppet The human vo ce wou d be tempo a y cached on the senso fo 30 hou s and wou d then be w tten ove and pe manent y
de eted Info mat on co ected f om oud mpu s ve sounds (" nc dents") s used to p ov de nfo mat on to ou custome s ega d ng those nc dents, but sha ed nfo mat on s
m ted, by both ou techno ogy and ou p vacy po c es, to the aud t sn ppet conta n ng the nc dent

Ou hand ng and sto age of data s subject to a va ety of aws and egu at ons, nc ud ng egu at on by va ous gove nment agenc es and va ous state, oca and
fo e gn agenc es The U S fede a and va ous state and fo e gn gove nments have adopted o p oposed eg s at on that egu ates the mon to ng and co ect on of pe sona
nfo mat on of nd v dua s and that mandates secu ty equ ements w th espect to ce ta n pe sona y dent f ab e nfo mat on In the Un ted States, the Fede a T ade
Comm ss on and nume ous state atto neys gene a a e mpos ng standa ds fo the on ne co ect on, d st but on, use and sto age of data by app y ng fede a and state consume
p otect on aws The ack of a c ea and un ve sa standa d fo p otect ng such nfo mat on means, howeve , that these ob gat ons may be nte p eted and app ed n a manne
that s ncons stent f om one j u sd ct on to anothe and may conf ct w th othe equ ements o ou p act ces Any fa u e o pe ce ved fa u e by us to comp y w th p vacy o
secu ty aws, po c es, ega ob gat ons o ndust y standa ds o any secu ty nc dent that esu ts n the unautho zed e ease o t ansfe of sens t ve co po ate nfo mat on,
pe sona y dent f ab e nfo mat on o othe custome data may esu t n gove nmenta enfo cement act ons, t gat on, f nes and pena t es and/o adve se pub c ty, and cou d
cause ou custome s to ose t ust n us, wh ch cou d have an adve se effect on ou eputat on and bus ness

Ca fo n a enacted the Ca fo n a Consume P vacy Act (the “CCPA”), wh ch became ope at ve on Janua y , 2020 The CCPA equ es cove ed compan es to,
among othe th ngs, p ov de new d sc osu es to Ca fo n a consume s, and affo ds such consume s new ab t es to opt-out of ce ta n sa es of pe sona nfo mat on The CCPA s
the subject of p oposed egu at ons of the Ca fo n a Atto ney Gene a that we e e eased on Octobe 0, 20 9 but have yet to be f na zed Aspects of the CCPA and ts
nte p etat on ema n unc ea at th s t me We cannot fu y p ed ct the mpact of the CCPA on ou bus ness o ope at ons, but t may equ e us to mod fy ou data p ocess ng
p act ces and po c es and to ncu substant a costs and expenses n an effo t to comp y

Some p oposed aws o egu at ons conce n ng p vacy, data p otect on and nfo mat on secu ty a e n the ea y stages, and we cannot yet dete m ne how these aws
a nd egu at ons may be nte p eted no can we dete m ne the mpact these p oposed aws and egu at ons, may have on ou bus ness Such p oposed aws and egu at ons may
equ e compan es to mp ement p vacy and secu ty po c es, pe m t use s to access, co ect and de ete pe sona nfo mat on sto ed o ma nta ned by such compan es, nfo m
nd v dua s of secu ty b eaches that affect the pe sona nfo mat on, and, n some cases, obta n nd v dua s’ consent to use pe sona nfo mat on fo ce ta n pu poses In
add t on, a fo e gn gove nment cou d equ e that any pe sona nfo mat on co ected n a count y not be d ssem nated outs de of that count y, and we may not be cu ent y
equ pped to comp y w th such a equ ement Ou fa u e to comp y w th fede a , state and nte nat ona data p vacy aws and egu ato s cou d ha m ou ab ty to successfu y
ope ate ou bus ness and pu sue ou bus ness goa s

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Our quarterly results of operations may fluctuate significantly due to a wide range of factors, which makes our future results difficult to predict.
Ou evenues and esu ts of ope at ons cou d va y s gn f cant y f om qua te to qua te as a esu t of va ous facto s, many of wh ch a e outs de of ou cont o ,
nc ud ng
• the expans on o cont act on of ou custome base;
• the enewa o non enewa of subsc pt on ag eements w th, and expans on of cove age a eas by, ex st ng custome s;
• the s ze, t m ng, te ms and dep oyment schedu es of ou sa es to both ex st ng and new custome s;
• the nt oduct on of p oducts o se v ces that may compete w th us fo the m ted funds ava ab e to ou custome s, and changes n the cost of such p oducts
o se v ces;
• changes n ou custome s’ and potent a custome s’ budgets;
• ou ab ty to cont o costs, nc ud ng ou ope at ng expenses;
• ou ab ty to h e, t a n and ma nta n ou d ect sa es fo ce;
• the t m ng of sat sfy ng evenues ecogn t on c te a n connect on w th n t a dep oyment and enewa s;
• f uctuat ons n ou effect ve tax ate; and
• gene a econom c and po t ca cond t ons, both domest ca y and nte nat ona y

Any one of these o othe facto s d scussed e sewhe e n th s epo t may esu t n f uctuat ons n ou evenues and ope at ng esu ts, mean ng that qua te -to-qua te
compa sons of ou evenues, esu ts of ope at ons and cash f ows may not necessa y be nd cat ve of ou futu e pe fo mance

Because of the f uctuat ons desc bed above, ou ab ty to fo ecast evenues s m ted and we may not be ab e to accu ate y p ed ct ou futu e evenues o esu ts of
ope at ons In add t on, we base ou cu ent and futu e expense eve s on ou ope at ng p ans and sa es fo ecasts, and ou ope at ng expenses a e expected to nc ease n the sho t
te m Acco d ng y, we may not be ab e to educe ou costs suff c ent y to compensate fo an unexpected sho tfa n evenues, and even a sma sho tfa n evenues cou d
d sp opo t onate y and adve se y affect ou f nanc a esu ts fo that qua te The va ab ty and unp ed ctab ty of these and othe facto s cou d esu t n ou fa ng to meet o
exceed f nanc a expectat ons fo a g ven pe od

Because we generally recognize our subscription revenues ratably over the term of our contract with a customer, fluctuations in sales will not be fully reflected in our
operating results until future periods.
Ou evenues a e p ma y gene ated f om subsc pt ons to ou so ut ons W th the except on of a sma numbe of egacy custome s, ou custome s do not have the
ght to take possess on of ou equ pment o softwa e p atfo m Revenues f om subsc pt ons to ou softwa e p atfo m s ecogn zed atab y ove the subsc pt on pe od
beg nn ng on the date that the subsc pt on s made ava ab e to the custome , wh ch we efe to as the “go- ve” date Ou ag eements w th ou custome s typ ca y ange f om
one to f ve yea s As a esu t, much of the evenues that we epo t n each qua te a e att butab e to ag eements ente ed nto du ng p ev ous qua te s Consequent y, a dec ne n
sa es, custome enewa s o ma ket acceptance of ou so ut ons n any one qua te wou d not necessa y be fu y ef ected n the evenues n that qua te , and wou d negat ve y
affect ou evenues and p of tab ty n futu e qua te s Th s atab e evenues ecogn t on a so makes t d ff cu t fo us to ap d y nc ease ou evenues th ough add t ona sa es n
any pe od, as evenues f om new custome s gene a y a e ecogn zed ove the app cab e ag eement te m Ou subsc pt on-based app oach may esu t n uneven ecogn t on of
evenues

We ecogn ze subsc pt on evenues ove the te m of a subsc pt on ag eement Once we ente nto a cont act w th a custome , the e s a de ay unt we beg n
ecogn z ng evenues wh e we su vey the cove age a eas, obta n any equ ed consents fo nsta at on, and nsta ou senso s, wh ch togethe can take up to seve a months o
mo e We beg n ecogn z ng evenues f om a sa e on y when a of these steps a e comp ete and the so ut on s ve

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 Wh e most of ou custome s e ect to enew the subsc pt on ag eements fo ow ng the exp at on of a te m, n some cases, they maynot be ab e to obta n the p ope
app ova s o fund ng to comp ete the enewa p o to such exp at on Fo these custome s, we stop ecogn z ng subsc pt on evenues at the end of the cu ent te m, even
though we may cont nue to p ov de se v ces fo a pe od of t me wh e the enewa p ocess s comp eted Once the enewa s comp ete, we then ecogn ze subsc pt on evenues
fo the pe od between the exp at on of the te m of the ag eement and the comp et on of the enewa p ocess

The va at on n the t me ne fo dep oy ng ou so ut ons and comp et ng enewa s may esu t n f uctuat ons n ou evenues, wh ch cou d cause ou esu ts to d ffe
f om p oject ons Add t ona y, wh e we gene a y nvo ce fo 50% of the cont act cost upon a custome ’s go- ve date, ou cash f ows may be vo at e and w not match ou
evenues ecogn t on

We are in the process of expanding our international operations, which exposes us to significant risks.
We cu ent y ope ate n m ted numbe of ocat ons outs de the Un ted States A key component to ou bus ness st ategy s to expand ou nte nat ona ope at ons to
nc ease ou evenues f om custome s outs de of the Un ted States as pa t of ou g owth st ategy Ope at ng n nte nat ona ma kets equ es s gn f cant esou ces and
management attent on and w subject us to egu ato y, econom c and po t ca sks n add t on to those we a eady face n the Un ted States In add t on, we w need to nvest
t me and esou ces n unde stand ng the egu ato y f amewo k and po t ca env onments of ou potent a custome s ove seas n o de to focus ou sa es effo ts Because such
egu ato y and po t ca cons de at ons a e ke y to va y ac oss ju sd ct ons, th s effo t w equ e add t ona t me and attent on f om ou sa es team and cou d ead to a sa es
cyc e that s onge than ou typ ca p ocess fo sa es n the Un ted States We a so may need to h e add t ona emp oyees and othe w se nvest n ou nte nat ona ope at ons n
o de to each new custome s Because of ou m ted expe ence w th nte nat ona ope at ons as we as deve op ng and manag ng sa es n nte nat ona ma kets, ou
nte nat ona expans on effo ts may be de ayed o may not be successfu

In add t on, we face and w cont nue to face sks n do ng bus ness nte nat ona y that cou d adve se y affect ou bus ness, nc ud ng
• the potent a mpact of cu ency exchange f uctuat ons;
• the need to comp y w th oca data es dency equ ements;
• the ava ab ty and e ab ty of oca data cente s and nte net bandw dth p ov de s;
• the d ff cu ty of staff ng and manag ng nte nat ona ope at ons and the nc eased ope at ons, t ave , sh pp ng and comp ance costs assoc ated w th hav ng
custome s n nume ous nte nat ona ocat ons;
• potent a y g eate d ff cu ty co ect ng accounts ece vab e and onge payment cyc es;
• the ava ab ty of cove age by w e ess ca e s n nte nat ona ma kets;
• h ghe o mo e va ab e costs assoc ated w th w e ess ca e s and othe se v ce p ov de s;
• the need to offe custome suppo t n va ous anguages;
• cha enges n unde stand ng and comp y ng w th oca aws, egu at ons and customs n fo e gn ju sd ct ons, nc ud ng aws ega d ng p vacy and
gove nment su ve ance;
• expo t cont o s and econom c sanct ons adm n ste ed by the Depa tment of Comme ce Bu eau of Indust y and Secu ty and the T easu y Depa tment’s
Off ce of Fo e gn Assets Cont o ;
• comp ance w th va ous ant -b be y and ant -co upt on aws such as the Fo e gn Co upt P act ces Act and Un ted K ngdom B be y Act of 20 0;
• ta ffs and othe non-ta ff ba e s, such as quotas and oca content u es;
• mo e m ted p otect on fo ou nte ectua p ope ty n some count es;
• adve se o unce ta n tax consequences as a esu t of nte nat ona ope at ons;

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 • cu ency cont o egu at ons, wh ch m ght est ct o p oh b t ou conve s on of othe cu enc es nto U S do a s;
• est ct ons on the t ansfe of funds;
• dete o at on of po t ca e at ons between the Un ted States and othe count es; and
• po t ca o soc a un est o econom c nstab ty n a spec f c count y o eg on n wh ch we ope ate, wh ch cou d have an adve se mpact on ou ope at ons
n that ocat on

A so, we expect that due to costs e ated to ou nte nat ona expans on effo ts and the nc eased cost of do ng bus ness nte nat ona y, we w ncu h ghe costs to
secu e sa es to nte nat ona custome s than the compa ab e costs fo domest c custome s As a esu t, ou f nanc a esu ts may f uctuate as we expand ou ope at ons and
custome base wo dw de

Ou fa u e to manage any of these sks successfu y cou d ha m ou nte nat ona ope at ons, and adve se y affect ou bus ness, ope at ng esu ts and f nanc a
cond t on

We are dependent on the continued services and performance of our senior management and other key personnel, the loss of any of whom could adversely affect our
business.
Ou futu e success depends n a ge pa t on the cont nued cont but ons of ou sen o management and othe key pe sonne In pa t cu a , the eade sh p of key
management pe sonne s c t ca to the successfu management of ou company, the deve opment of ou p oducts, and ou st ateg c d ect on We a so depend on the
cont but ons of key techn ca pe sonne

We do not ma nta n “key pe son” nsu ance fo any membe of ou sen o management team o any of ou othe key emp oyees Ou sen o management and key
pe sonne a e a emp oyed on an at-w bas s, wh ch means that they cou d te m nate the emp oyment w th us at any t me, fo any eason and w thout not ce The oss of any
of ou key management pe sonne cou d s gn f cant y de ay o p event the ach evement of ou deve opment and st ateg c object ves and adve se y affect ou bus ness

If we are unable to attract, integrate and retain additional qualified personnel, including top technical talent, our business could be adversely affected.
Ou futu e success depends n pa t on ou ab ty to dent fy, att act, nteg ate and eta n h gh y sk ed techn ca , manage a , sa es and othe pe sonne We face ntense
compet t on fo qua f ed nd v dua s f om nume ous othe compan es, nc ud ng othe softwa e and techno ogy compan es, many of whom have g eate f nanc a and othe
esou ces than we do Some of these cha acte st cs may be mo e appea ng to h gh-qua ty cand dates than those we have to offe In add t on, new h es often equ e
s gn f cant t a n ng and, n many cases, take s gn f cant t me befo e they ach eve fu p oduct v ty We may ncu s gn f cant costs to att act and eta n qua f ed pe sonne ,
nc ud ng s gn f cant expend tu es e ated to sa a es and benef ts and compensat on expenses e ated to equ ty awa ds, and we may ose new emp oyees to ou compet to s o
othe compan es befo e we ea ze the benef t of ou nvestment n ec u t ng and t a n ng them Mo eove , new emp oyees may not be o become as p oduct ve as we expect, as
we may face cha enges n adequate y o app op ate y nteg at ng them nto ou wo kfo ce and cu tu e If we a e unab e to att act, nteg ate and eta n su tab y qua f ed
nd v dua s who a e capab e of meet ng ou g ow ng techn ca , ope at ona and manage a equ ements, on a t me y bas s o at a , ou bus ness w be adve se y affected

Vo at ty o ack of pos t ve pe fo mance n ou stock p ce may a so affect ou ab ty to att act and eta n ou key emp oyees Many of ou sen o management
pe sonne and othe key emp oyees have become, o w soon become, vested n a substant a amount of stock o stock opt ons Emp oyees may be mo e ke y to eave us f
the sha es they own o the sha es unde y ng the vested opt ons have s gn f cant y app ec ated n va ue e at ve to the o g na pu chase p ces of the sha es o the exe c se
p ces of the opt ons, o , conve se y, f the exe c se p ces of the opt ons that they ho d a e s gn f cant y above the ma ket p ce of ou common stock If we a e unab e to
app op ate y ncent v ze and eta n ou emp oyees th ough equ ty compensat on, o f we need to nc ease ou compensat on expenses n o de to app op ate y ncent v ze and
eta n ou emp oyees, ou bus ness, ope at ng esu ts and f nanc a cond t on wou d be adve se y affected

36
We may be subject to additional obligations to collect and remit certain taxes, and we may be subject to tax liability for past activities, which could harm our business.
State, oca and fo e gn ju sd ct ons have d ffe ng u es and egu at ons gove n ng sa es, use, va ue added and othe taxes, and these u es and egu at ons a e subject
to va y ng nte p etat ons that may change ove t me, pa t cu a y w th espect to softwa e-as-a-se v ce p oducts ke ou so ut ons Fu the , these ju sd ct ons’ u es ega d ng
tax nexus a e comp ex and va y s gn f cant y If one o mo e ju sd ct ons we e to asse t that we have fa ed to co ect taxes fo sa es of ou so ut ons, we cou d face the
poss b ty of tax assessments and aud ts A successfu asse t on that we shou d be co ect ng add t ona sa es, use, va ue added o othe taxes n those ju sd ct ons whe e we
have not h sto ca y done so and do not acc ue fo such taxes cou d esu t n substant a tax ab t es and e ated pena t es fo past sa es o othe w se ha m ou bus ness and
ope at ng esu ts

Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations.
As of Decembe 3 , 20 9, we had fede a net ope at ng oss ca yfo wa ds (“NOLs”) of app ox mate y $85 6 m on, of wh ch $80 6 m on w exp e between 2026
th ough 2038, f not ut zed As of Decembe 3 , 20 9, we a so had state NOLs of app ox mate y $55 m on, wh ch w exp e, f not ut zed, n 20 9 th ough 2038 These
fede a and state NOLs may be ava ab e to educe futu e ncome subject to ncome taxes In gene a , unde Sect on 382 of the Inte na Revenue Code of 986, as amended
(“the Code”), a co po at on that unde goes an “owne sh p change” s subject to m tat ons on ts ab ty to ut ze ts NOLs to offset futu e taxab e ncome Past o futu e
changes n ou stock owne sh p, some of wh ch a e outs de of ou cont o , may have esu ted o cou d esu t n an owne sh p change State NOLs gene ated n one state cannot
be used to offset ncome gene ated n anothe state

We may be subject to litigation for a variety of claims or to other legal requests, which could adversely affect our results of operations, harm our reputation or otherwise
negatively impact our business.
We may be subject to t gat on fo a va ety of c a ms a s ng f om ou no ma bus ness act v t es These may nc ude c a ms, su ts, and p oceed ngs nvo v ng abo
and emp oyment, wage and hou , comme c a and othe matte s The outcome of any t gat on, ega d ess of ts me ts, s nhe ent y unce ta n Any c a ms and awsu ts, and the
d spos t on of such c a ms and awsu ts, cou d be t me-consum ng and expens ve to eso ve, d ve t management attent on and esou ces, and ead to attempts on the pa t of othe
pa t es to pu sue s m a c a ms Any adve se dete m nat on e ated to t gat on cou d adve se y affect ou esu ts of ope at ons, ha m ou eputat on o othe w se negat ve y
mpact ou bus ness In add t on, depend ng on the natu e and t m ng of any such d spute, a eso ut on of a ega matte cou d mate a y affect ou futu e ope at ng esu ts, ou
cash f ows o both

An unfavo ab e outcome on any t gat on matte s cou d equ e us to pay substant a damages, o , n connect on w th any nte ectua p ope ty nf ngement c a ms,
cou d equ e us to pay ongo ng oya ty payments o cou d p event us f om se ng ce ta n of ou p oducts As a esu t, a sett ement of, o an unfavo ab e outcome on, any of the
matte s efe enced above o othe t gat on matte s cou d have a mate a adve se effect on ou bus ness, ope at ng esu ts, f nanc a cond t on and cash f ows

We, o ou custome s, may be subject to equests fo ou data o nfo mat on conce n ng ou techn ques and p ocesses, pu suant to state o fede a aw (fo examp e,
pub c- eco ds equests o subpoenas to p ov de nfo mat on o to test fy n cou t) Th s data and nfo mat on, some of wh ch we may deem to be conf dent a o t ade sec ets,
cou d the efo e become a matte of pub c eco d and a so become access b e by compet to s, wh ch cou d negat ve y mpact ou bus ness

Changes in financial accounting standards may cause adverse and unexpected revenues fluctuations and impact our reported results of operations.
The account ng u es and egu at ons that we must comp y w th a e comp ex and subject to nte p etat on by the F nanc a Account ng Standa ds Boa d (“FASB”), the
Secu t es and Exchange Comm ss on and va ous bod es fo med to p omu gate and nte p et app op ate account ng p nc p es In add t on, many compan es’ account ng
d sc osu es a e be ng subjected to he ghtened sc ut ny by egu ato s and the pub c Fu the , the account ng u es and egu at ons a e cont nua y chang ng n ways that cou d
mpact ou f nanc a statements

37
 Cha nges to account ng p nc p es o ou account ng po c es on ou f nanc a statements go ng fo wa d a e d ff cu t to p ed ct, cou d have a s gn f cant effect on ou
epo ted f nanc a esu ts, and cou d affect the epo t ng of t ansact ons comp eted befo e the announcement of the change In add t on, we e we to change ou c t ca account ng
est mates, nc ud ng the t m ng of ecogn t on of subsc pt on and p ofess ona se v ces evenues and othe evenues sou ces, ou esu ts of ope at ons cou d be s gn f cant y
mpacted

Risks Related to Our Intellectual Property

Failure to protect our intellectual property rights could adversely affect our business.
Ou success depends, n pa t, on ou ab ty to p otect p op eta y methods and techno og es that we deve op o cense unde patent and othe nte ectua p ope ty aws
of the Un ted States, as we as ou b ands, so that we can p event othe s f om them We e y on a comb nat on of cont actua and nte ectua p ope ty ghts, nc ud ng non-
d sc osu e ag eements, patents, t ade sec ets, copy ghts and t adema ks, to estab sh and p otect ou nte ectua p ope ty ghts n ou names, se v ces, nnovat ons,
methodo og es and e ated techno og es If we fa to p otect ou nte ectua p ope ty ghts adequate y, ou compet to s m ght ga n access to ou techno ogy and ou bus ness
m ght be adve se y affected

As of Decembe 3 , 20 9, we had 32 U S patents d ected to ou techno og es, as we as one g anted patent n Is ae and one g anted patent n Mex co The ssued
patents exp e on va ous dates f om 2022 to 2034 We a so cense one patent f om a th d pa ty, wh ch exp es n 2023 We have patent app cat ons pend ng fo exam nat on
n the Un ted States, Eu ope, Mex co and B az , but we cannot gua antee that these patent app cat ons w be g anted We a so cense one othe U S patent f om one th d
pa ty The patents that we own o those that we cense f om othe s ( nc ud ng those that may be ssued n the futu e) may not p ov de us w th any compet t ve advantages o
may be cha enged by th d pa t es

The p ocess of obta n ng patent p otect on s expens ve and t me-consum ng, and we may not be ab e to p osecute a necessa y o des ab e patent app cat ons at a
easonab e cost o n a t me y manne Even f ssued, the e can be no assu ance that these patents w adequate y p otect ou nte ectua p ope ty, as the ega standa ds e at ng
to the va d ty, enfo ceab ty and scope of p otect on of patent and othe nte ectua p ope ty ghts a e unce ta n

Any patents that a e ssued may subsequent y be nva dated o othe w se m ted, a ow ng othe compan es to deve op offe ngs that compete w th ou s, wh ch cou d
adve se y affect ou compet t ve bus ness pos t on, bus ness p ospects and f nanc a cond t on In add t on, ssuance of a patent does not gua antee that we have a ght to
p act ce the patented nvent on Patent app cat ons n the Un ted States a e typ ca y not pub shed unt 8 months afte the ea est p o ty date o , n some cases, not at a ,
and pub cat ons of d scove es n ndust y- e ated te atu e ag beh nd actua d scove es We cannot be ce ta n that th d pa t es do not have b ock ng patents that cou d be
used to p event us f om ma ket ng o p act c ng ou softwa e o techno ogy

Effect ve patent, t adema k, copy ght and t ade sec et p otect on may not be ava ab e to us n eve y count y n wh ch ou softwa e s ava ab e The aws of some
fo e gn count es may not be as p otect ve of nte ectua p ope ty ghts as those n the Un ted States ( n pa t cu a , some fo e gn ju sd ct ons do not pe m t patent p otect on
fo softwa e), and mechan sms fo enfo cement of nte ectua p ope ty ghts may be nadequate Add t ona unce ta nty may esu t f om changes to nte ectua p ope ty
eg s at on enacted n the Un ted States, nc ud ng the ecent Ame ca Invents Act, o to the aws of othe count es and f om nte p etat ons of the nte ectua p ope ty aws of
the Un ted States and othe count es by app cab e cou ts and agenc es Acco d ng y, desp te ou effo ts, we may be unab e to p event th d pa t es f om nf ng ng upon o
m sapp op at ng ou nte ectua p ope ty

We e y n pa t on t ade sec ets, p op eta y know-how and othe conf dent a nfo mat on to ma nta n ou compet t ve pos t on A though we endeavo to ente nto
non-d sc osu e ag eements w th ou emp oyees, censees and othe s who may have access to th s nfo mat on, we cannot assu e you that these ag eements o othe steps we
have taken w p event unautho zed use, d sc osu e o eve se eng nee ng of ou techno ogy Mo eove , th d pa t es may ndependent y deve op techno og es o p oducts that
compete w th ou s, and we may be unab e to p event th s compet t on Th d pa t es a so may seek access to ou t ade sec ets, p op eta y know-how and othe conf dent a
nfo mat on th ough ega measu es (fo examp e, pub c- eco ds equests o subpoenas to p ov de nfo mat on o to test fy n cou t) and t cou d be expens ve to defend aga nst
those equests D sc osu e of ou t ade sec ets, p op eta y know-how and othe conf dent a nfo mat on cou d negat ve y mpact ou bus ness

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 We m ght be equ ed to spend s gn f cant esou ces to mon to and p otect ou nte ectua p ope ty ghts We may n t ate c a ms o t gat on aga nst th d pa t es fo
nf ngement of ou p op eta y ghts o to estab sh the va d ty of ou p op eta y ghts L t gat on a so puts ou patents at sk of be ng nva dated o nte p eted na ow y
and ou patent app cat ons at sk of not ssu ng Add t ona y, we may p ovoke th d pa t es to asse t counte c a ms aga nst us We may not p eva n any a wsu ts that we
n t ate, and the damages o othe emed es awa ded, f any, may not be comme c a y v ab e Any t gat on, whethe o not eso ved n ou favo , cou d esu t n s gn f cant
expense to us and d ve t the effo ts of ou techn ca and management pe sonne , wh ch may adve se y affect ou bus ness, ope at ng esu ts, f nanc a cond t on and cashf ows

We may be subject to intellectual property rights claims by third parties, which are extremely costly to defend, could require us to pay significant damages and could limit
our ability to use certain technologies.
Compan es n the softwa e and techno ogy ndust es, nc ud ng some of ou cu ent and potent a compet to s, own a ge numbe s of patents, copy ghts, t adema ks
and t ade sec ets and f equent y ente nto t gat on based on a egat ons of nf ngement o othe v o at ons of nte ectua p ope ty ghts In add t on, many of these compan es
have the capab ty to ded cate substant a y g eate esou ces to enfo ce the nte ectua p ope ty ghts and to defend c a ms that may be b ought aga nst them The t gat on
may nvo ve patent ho d ng compan es o othe adve se patent owne s that have no e evant p oduct evenues and aga nst wh ch ou patents may the efo e p ov de tt e o no
dete ence We may have p ev ous y ece ved, and may n the futu e ece ve, not ces that c a m we have m sapp op ated, m sused, o nf nged othe pa t es’ nte ectua
p ope ty ghts, and, to the extent we ga n g eate ma ket v s b ty, we face a h ghe sk of be ng the subject of nte ectua p ope ty nf ngement c a ms

39
 The e may be th d-pa ty nte ectua p ope ty ghts, nc ud ng ssued o pend ng patents that cove s gn f cant aspects of ou techno og es o bus ness methods Any
nte ectua p ope ty c a ms, w th o w thout me t, cou d be ve y t me-consum ng, cou d be expens ve to sett e o t gate and cou d d ve t ou management’s attent on and othe
esou ces These c a ms cou d a so subject us to s gn f cant ab ty fo damages, potent a y nc ud ng t eb e damages f we a e found to have w fu y nf nged patents o
copy ghts These c a ms cou d a so esu t n ou hav ng to stop us ng techno ogy found to be n v o at on of a th d pa ty’s ghts We m ght be equ ed to seek a cense fo the
nte ectua p ope ty, wh ch may not be ava ab e on a t me y bas s, on easonab e te ms o at a We a so may be equ ed to mod fy ou p oducts, se v ces, nte na systems o
techno og es Even f a cense we e ava ab e, we cou d be equ ed to pay s gn f cant oya t es, wh ch wou d nc ease ou ope at ng expenses As a esu t, we may be equ ed
to deve op a te nat ve non- nf ng ng techno ogy, wh ch cou d equ e s gn f cant effo t and expense If we cannot cense o deve op techno ogy fo any nf ng ng aspect of ou
bus ness, we wou d be fo ced to m t o stop sa es of ou softwa e and may be unab e to compete effect ve y Any of these esu ts wou d adve se y affect ou bus ness,
ope at ng esu ts, f nanc a cond t on and cash f ows

Our use of open source software could subject us to possible litigation.

A po t on of ou techno og es nco po ates open sou ce softwa e, and we expect to cont nue to nco po ate open sou ce softwa e nto ou p atfo m n the futu e Few of
the censes app cab e to open sou ce softwa e have been nte p eted by cou ts, and the app cat on to the open sou ce softwa e nteg ated nto ou p op eta y techno ogy
p atfo m may be unce ta n If we fa to comp y w th these censes, then pu suant to the te ms of these censes, we may be subject to ce ta n equ ements, nc ud ng
equ ements that we make ava ab e the sou ce code fo ou softwa e that nco po ates the open sou ce softwa e We cannot assu e you that we have not nco po ated open
sou ce softwa e n ou softwa e n a manne that s ncons stent w th the te ms of the app cab e censes o ou cu ent po c es and p ocedu es If an autho o othe th d pa ty
that d st butes such open sou ce softwa e we e to a ege that we had not comp ed w th the cond t ons of one o mo e of these censes, we cou d ncu s gn f cant ega expenses
defend ng aga nst such a egat ons L t gat on cou d be cost y fo us to defend, have a negat ve effect on ou ope at ng esu ts and f nanc a cond t on o equ e us to devote
add t ona esea ch and deve opment esou ces to change ou techno ogy p atfo m

Risks Related to the Ownership of Our Common Stock

Our stock price may be volatile or may decline regardless of our operating performance, resulting in substantial losses for investors.
The ma ket p ce of ou common stock has f uctuated and may cont nue to f uctuate s gn f cant y n esponse to nume ous facto s, many of wh ch a e beyond ou
cont o , nc ud ng the facto s sted be ow and othe facto s desc bed n th s “R sk Facto s” sect on
• actua o ant c pated f uctuat ons n ou ope at ng esu ts;
• the f nanc a p oject ons we may p ov de to the pub c, any changes n these p oject ons o ou fa u e to meet these p oject ons;
• fa u e of secu t es ana ysts to n t ate o ma nta n cove age of ou company, changes n f nanc a est mates by any secu t es ana ysts who fo ow ou
company, o ou fa u e to meet these est mates o the expectat ons of nvesto s;
• at ngs changes by any secu t es ana ysts who fo ow ou company;
• changes n the ava ab ty of fede a fund ng to suppo t oca aw enfo cement effo ts, o oca budgets;
• announcements by us of s gn f cant techn ca nnovat ons, acqu s t ons, st ateg c pa tne sh ps, jo nt ventu es o cap ta comm tments;
• changes n ope at ng pe fo mance and stock ma ket va uat ons of othe softwa e compan es gene a y;
• p ce and vo ume f uctuat ons n the ove a stock ma ket, nc ud ng as a esu t of t ends n the economy as a who e;
• changes n ou boa d of d ecto s o management;

40
 • sa es of a ge b ocks of ou common stock, nc ud ng sa es by ou execut ve off ce s, d ecto s and s gn f cant stockho de s;
• awsu ts th eatened o f ed aga nst us;
• sho t sa es, hedg ng and othe de vat ve t ansact ons nvo v ng ou cap ta stock;
• gene a econom c cond t ons n the Un ted States and ab oad;
• othe events o facto s, nc ud ng those esu t ng f om wa , nc dents of te o sm o esponses to these events; and
• med a m spe cept on of ou sa es and custome e at onsh ps, nc ud ng p ess announcements o med a ment ons of futu e sa es that may be m s ead ng o
naccu ate

In add t on, stock ma kets have expe enced ext eme p ce and vo ume f uctuat ons that have affected and cont nue to affect the ma ket p ces of equ ty secu t es of
many softwa e compan es Stock p ces of many softwa e compan es have f uctuated n a manne un e ated o d sp opo t onate to the ope at ng pe fo mance of those
compan es B oad ma ket and ndust y f uctuat ons, as we as gene a econom c, po t ca , egu ato y and ma ket cond t ons, may negat ve y mpact the ma ket p ce of ou
common stock In the past, stockho de s have nst tuted secu t es act on t gat on fo ow ng pe ods of ma ket vo at ty If we we e to become nvo ved n secu t es t gat on, t
cou d subject us to substant a costs, d ve t esou ces and the attent on of management f om ou bus ness and adve se y affect ou bus ness, ope at ng esu ts, f nanc a cond t on
and cash f ows

Substantial future sales of shares of our common stock could cause the market price of our common stock to decline.
Ce ta n ho de s of ou sha es of common stock have the ght, subject to va ous cond t ons and m tat ons, to nc ude the sha es of ou common stock n eg st at on
statements e at ng to ou secu t es, nc ud ng app ox mate y 3 3 m on sha es that we e eg ste ed n connect on w th the Reg st at on Statement on Fo m S-3 that became
effect ve on Ju y 27, 20 8, of wh ch app ox mate y 36,000 we e so d n an unde w tten eg ste ed seconda y offe ng n Ma ch 20 9 If the offe and sa e of these sha es a e
eg ste ed, they w be f ee y t adab e w thout est ct on unde the Secu t es Act In add t on, non-aff ates have the ab ty to se sha es of ou common stock n the open
ma ket o th ough b ock t ades w thout subject to vo ume est ct ons unde Ru e 44 of the Secu t es Act In add t on, n the futu e we may ssue common stock o othe
secu t es f we need to a se add t ona cap ta The numbe of new sha es of ou common stock ssued n connect on w th a s ng add t ona cap ta cou d const tute a mate a
po t on of the then outstand ng sha es of ou common stock In the event a a ge numbe of sha es of common stock a e so d n the pub c ma ket, such sha e sa es cou d educe
the t ad ng p ce of ou common stock

Stock repurchases could increase the volatility of the trading price of our common stock and diminish our cash reserves, and we cannot guarantee that our stock
repurchase program will enhance long-term stockholder value.
In May 20 9, ou boa d of d ecto s adopted a stock epu chase p og am fo up to $ 5 m on of ou common stock A though ou boa d of d ecto s has autho zed
the stock epu chase p og am, t does not ob gate us to epu chase any spec f c do a amount o numbe of sha es, the e s no exp at on date fo the stock epu chase p og am,
and the stock epu chase p og am may be mod f ed, suspended o te m nated at any t me and fo any eason The t m ng and actua numbe of sha es epu chased unde the
stock epu chase p og am w depend on a va ety of facto s, nc ud ng the acqu s t on p ce of the sha es, ou qu d ty pos t on, gene a ma ket and econom c cond t ons, ega
and egu ato y equ ements and othe cons de at ons Ou ab ty to epu chase sha es may a so be m ted by est ct ve covenants n ou ex st ng c ed t ag eement o n futu e
bo ow ng a angements we may ente nto f om t me to t me

Repu chases of ou sha es cou d nc ease the vo at ty of the t ad ng p ce of ou stock, wh ch cou d have a negat ve mpact on the t ad ng p ce of ou stock
S m a y, the futu e announcement of the te m nat on o suspens on of the stock epu chase p og am, o ou dec s on not to ut ze the fu autho zed epu chase amount unde
the stock epu chase p og am, cou d esu t n a dec ease n the t ad ng p ce of ou stock In add t on, the stock epu chase p og am cou d have the mpact of d m n sh ng ou
cash ese ves, wh ch may mpact ou ab ty to f nance

4
ou g owth, comp ete acqu s t ons and execute ou st ateg c p an The e can be no assu ance that any sha es epu chases we do e ect to make w enhance stockho de va ue
because the ma ket p ce of ou common stock may dec ne be ow the eve s at wh ch we epu chased ou sha es A though ou stock epu chase p og am s ntend ed to
enhance ong-te m stockho de va ue, we cannot gua antee that t w do so and sho t-te m stock p ce f uctuat ons cou d educe the effect veness of the stock epu chase
p og am

If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business, our share price and trading volume
could decline.
The t ad ng ma ket fo ou common stock depends n pa t on the esea ch and epo ts that secu t es o ndust y ana ysts pub sh about us o ou bus ness, ou ma ket
and ou compet to s We do not have any cont o ove these ana ysts If one o mo e of the ana ysts who cove us downg ade ou sha es of common stock o change the
op n on of ou sha es of common stock, ou sha e p ce wou d ke y dec ne If one o mo e of these ana ysts cease cove age of ou company o fa to egu a y pub sh epo ts
on us, we cou d ose v s b ty n the f nanc a ma kets, wh ch cou d cause ou sha e p ce o t ad ng vo ume to dec ne

We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common
stock less attractive to investors.
We a e an “eme g ng g owth company,” as def ned n the Jumpsta t Ou Bus ness Sta tups Act (the “JOBS Act”), and we take advantage of ce ta n exempt ons f om
va ous epo t ng equ ements that a e app cab e to othe pub c compan es that a e not “eme g ng g owth compan es” nc ud ng, but not m ted to, not be ng equ ed to
comp y w th the aud to attestat on equ ements of Sect on 404 of the Sa banes-Ox ey Act, educed d sc osu e ob gat ons ega d ng execut ve compensat on n ou pe od c
epo ts and p oxy statements, and exempt ons f om the equ ements of ho d ng a nonb nd ng adv so y vote on execut ve compensat on and stockho de app ova of any go den
pa achute payments not p ev ous y app oved We w ema n an “eme g ng g owth company” fo up to f ve yea s, a though we w cease to be an “eme g ng g owth company”
upon the ea est of ( ) the ast day of f sca yea 2022, ( ) the ast day of the f st f sca yea n wh ch ou annua g oss evenues a e $ 07 b on o mo e, ( ) the date on wh ch
we have, du ng the p ev ous o ng th ee-yea pe od, ssued mo e than $ b on n non-conve t b e debt secu t es o ( v) the date on wh ch we a e deemed to be a “ a ge
acce e ated f e ” as def ned n the Secu t es Exchange Act of 934, o the Exchange Act We cannot p ed ct f nvesto s w f nd ou common stock ess att act ve o ou
company ess compa ab e to ce ta n othe pub c compan es because we w e y on these exempt ons If some nvesto s f nd ou common stock ess att act ve as a esu t, the e
may be a ess act ve t ad ng ma ket fo ou common stock and ou stock p ce may be mo e vo at e

We incur substantial costs as a result of being a public company.

As a pub c company, we a e ncu ng s gn f cant eve s of ega , account ng, nsu ance and othe expenses that we d d not ncu as a p vate company We a e subject
to the epo t ng equ ements of the Exchange Act, the Sa banes-Ox ey Act, the Dodd-F ank Act, the st ng equ ements of the Nasdaq Cap ta Ma ket, and othe app cab e
secu t es u es and egu at ons Comp ance w th these u es and egu at ons nc eases ou ega and f nanc a comp ance costs, makes some act v t es mo e d ff cu t, t me-
consum ng o cost y and nc eases demand on ou systems and esou ces as compa ed to when we ope ated as a p vate company The Exchange Act equ es, among othe
th ngs, that we f e annua , qua te y and cu ent epo ts w th espect to ou bus ness and ope at ng esu ts The Sa banes-Ox ey Act equ es, among othe th ngs, that we
ma nta n effect ve d sc osu e cont o s and p ocedu es and nte na cont o ove f nanc a epo t ng In o de to ma nta n and, f equ ed, mp ove ou d sc osu e cont o s and
p ocedu es and nte na cont o ove f nanc a epo t ng to meet th s standa d, s gn f cant esou ces and management ove s ght may be equ ed As a esu t, management’s
attent on may be d ve ted f om othe bus ness conce ns, wh ch cou d adve se y affect ou bus ness and ope at ng esu ts A though we have a eady h ed add t ona co po ate
emp oyees to comp y w th these equ ements, we may need to h e mo e co po ate emp oyees n the futu e o engage outs de consu tants, wh ch wou d nc ease ou costs and
expenses

In add t on, chang ng aws, egu at ons and standa ds e at ng to co po ate gove nance and pub c d sc osu e a e c eat ng unce ta nty fo pub c compan es, nc eas ng
ega and f nanc a comp ance costs and mak ng some act v t es mo e t me-consum ng These aws, egu at ons and standa ds a e subject to va y ng nte p etat ons, n many
cases due to the ack of spec f c ty, and, as a esu t, the app cat on n p act ce may evo ve ove t me as new gu dance s p ov ded by egu ato y and gove n ng bod es Th s
cou d esu t n cont nu ng unce ta nty ega d ng

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comp ance matte s and h ghe costs necess tated by ongo ng ev s ons to d sc osu e and gove nance p act ces We ntend to nvest esou ces to comp y w th evo v ng aws,
egu at ons and standa ds, and th s nvestment may esu t n nc eased gene a and adm n st at ve expenses and a d ve s on of management’s t me and attent on f om evenue-
gene at ng act v t es to comp ance act v t es If ou effo ts to comp y w th new aws, egu at ons and standa ds d ffe f om the act v t es ntended by egu ato y o gove n ng
bod es due to amb gu t es e ated to the app cat on and p act ce, egu ato y autho t es may n t ate ega p oceed ngs aga nst us and ou bus ness may be adve se y affected

As a esu t of d sc osu e of nfo mat on n th s epo t and n the f ngs that we a e equ ed to make as a pub c company, ou bus ness, ope at ng esu ts and f nanc a
cond t on have become mo e v s b e, wh ch has esu ted n, and may n the futu e esu t n th eatened o actua t gat on, nc ud ng by compet to s and othe th d pa t es If any
such c a ms a e successfu , ou bus ness, ope at ng esu ts and f nanc a cond t on cou d be adve se y affected, and even f the c a ms do not esu t n t gat on o a e eso ved n
ou favo , these c a ms, and the t me and esou ces necessa y to eso ve them, cou d d ve t the esou ces of ou management and adve se y affect ou bus ness, ope at ng esu ts
and f nanc a cond t on

We do not intend to pay dividends for the foreseeable future.

We have neve dec a ed o pa d any cash d v dends on ou common stock and do not ntend to pay any cash d v dends n the fo eseeab e futu e We ant c pate that we
w eta n a of ou futu e ea n ngs fo use n the deve opment of ou bus ness and fo gene a co po ate pu poses Any dete m nat on to pay d v dends n the futu e w be at
the d sc et on of ou boa d of d ecto s Acco d ng y, nvesto s must e y on sa es of the common stock afte p ce app ec at on, wh ch may neve occu , as the on y way to
ea ze any futu e ga ns on the nvestments

Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to
replace or remove our current management and limit the market price of our common stock.
P ov s ons n ou ce t f cate of nco po at on and by aws may have the effect of de ay ng o p event ng a change of cont o o changes n ou management Ou
ce t f cate of nco po at on and by aws nc ude p ov s ons that
• estab sh a c ass f ed boa d of d ecto s so that not a membe s of ou boa d of d ecto s a e e ected at one t me;
• pe m t the boa d of d ecto s to estab sh the numbe of d ecto s and f any vacanc es and new y-c eated d ecto sh ps;
• p ov de that d ecto s may on y be emoved fo cause;
• equ e supe -majo ty vot ng to amend some p ov s ons n ou ce t f cate of nco po at on and by aws;
• autho ze the ssuance of “b ank check” p efe ed stock that ou boa d of d ecto s cou d use to mp ement a stockho de ghts p an;
• e m nate the ab ty of ou stockho de s to ca spec a meet ngs of stockho de s;
• p oh b t stockho de act on by w tten consent, wh ch equ es a stockho de act ons to be taken at a meet ng of ou stockho de s;
• p ov de that the boa d of d ecto s s exp ess y autho zed to make, a te o epea ou by aws; and
• estab sh advance not ce equ ements fo nom nat ons fo e ect on to ou boa d of d ecto s o fo p opos ng matte s that can be acted upon by stockho de s
at annua stockho de meet ngs

In add t on, we a e gove ned by the p ov s ons of Sect on 203 of the De awa e Gene a Co po at on Law, wh ch gene a y p oh b ts stockho de s own ng 5% o mo e
of ou outstand ng vot ng stock f om me g ng o othe w se comb n ng w th us fo a pe od of th ee yea s fo ow ng the date on wh ch the stockho de became a 5% stockho de
w thout the consent of ou boa d of d ecto s These p ov s ons may f ust ate o p event any attempts by ou stockho de s to ep ace o emove ou cu ent management by
mak ng t mo e d ff cu t fo stockho de s to ep ace membe s of ou boa d of d ecto s, wh ch s espons b e fo appo nt ng the membe s of ou management, and othe w se
d scou age management takeove attempts

43
 Our certificate of incorporation designates the Court of Chancery of the State of Delaware as the exclusive forum for certain litigation that may be initiated by our
stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us.
Pu suant to ou ce t f cate of nco po at on, un ess we consent n w t ng to the se ect on of an a te nat ve fo um, the Cou t of Chance y of the State of De awa e s the
so e and exc us ve fo um fo ( ) any de vat ve act on o p oceed ng b ought on ou beha f, (2) any act on asse t ng a c a m of b each of a f duc a y duty owed by any of ou
d ecto s, off ce s o othe emp oyees to us o ou stockho de s, (3) any act on asse t ng a c a m a s ng pu suant to any p ov s on of the De awa e Gene a Co po at on Law, ou
ce t f cate of nco po at on o ou by aws o (4) any act on asse t ng a c a m gove ned by the nte na affa s doct ne Ou ce t f cate of nco po at on fu the p ov des that any
pe son o ent ty pu chas ng o othe w se acqu ng any nte est n sha es of ou common stock s deemed to have not ce of and consented to the fo ego ng p ov s on The fo um
se ect on c ause n ou ce t f cate of nco po at on may m t ou stockho de s’ ab ty to obta n a favo ab e jud c a fo um fo d sputes w th us

Ou ce t f cate of nco po at on fu the p ov des that the fede a d st ct cou ts of the Un ted States of Ame ca w be the exc us ve fo um fo eso v ng any comp a nt
asse t ng a cause of act on a s ng unde the Secu t es Act Howeve , on Decembe 9, 20 8, the De awa e Chance y Cou t ssued an op n on nva dat ng th s p ov s on n the
ce t f cates of nco po at on of De awa e co po at ons The Chance y Cou t he d that a De awa e co po at on can on y use ts const tut ve documents to b nd a p a nt ff to a
pa t cu a fo um whe e the c a m nvo ves ghts o e at onsh ps estab shed by o unde De awa e’s co po ate aw Th s case may be appea ed to the De awa e Sup eme Cou t
In ght of th s ecent cou t dec s on, on Decembe 2 , 20 8 we announced that we do not cu ent y ntend to enfo ce the fo ego ng fede a fo um se ect on p ov s on un ess the
e evant cou t dec s on s appea ed and the De awa e Sup eme Cou t eve ses the dec s on If the e s no appea o f the De awa e Sup eme Cou t aff ms the Chance y Cou t’s
dec s on, then we ntend to seek app ova by ou stockho de s to amend ou ce t f cate of nco po at on at ou next egu a y-schedu ed annua meet ng of stockho de s to
emove the nva d p ov s on

Item 1B. UNRESOLVED STAFF COMMENTS

Not App cab e

Item 2. PROPERTIES
Ou p nc pa fac t es cons st of off ce space fo ou co po ate headqua te s n Newa k, Ca fo n a, whe e we occupy app ox mate y 2,020 squa e feet of space unde
a ease that exp es n Octobe 202

We ease ou fac t es and do not own any ea p ope ty We may p ocu e add t ona space as we add emp oyees and expand geog aph ca y We be eve that ou
fac t es a e adequate to meet ou needs fo the mmed ate futu e and that shou d t be needed, su tab e add t ona space w be ava ab e to accommodate expans on of ou
ope at ons

Item 3. LEGAL PROCEEDINGS

On August 28, 20 8, S von S S mmons (the “P a nt ff”) amended a comp a nt aga nst the C ty of Rocheste , New Yo k and va ous c ty emp oyees, f ed n the
Un ted States D st ct Cou t, Weste n D st ct of New Yo k, to add us and emp oyees as a defendant The amended comp a nt a eges consp acy to v o ate the P a nt ff's c v
ghts, den a of the ght to a fa t a , and ma c ous p osecut on The P a nt ff c a ms that we co uded w th the C ty of Rocheste to fab cate and c eate gunshot a e t ev dence
to secu e P a nt ff's conv ct on On the bas s of the a egat ons, the P a nt ff has pet t oned fo compensato y and pun t ve damages and othe costs and expenses, nc ud ng
atto ney’s fees We be eve that the P a nt ff’s c a ms a e w thout me t and a e d sput ng them v go ous y

44
 We may become subject to ega p oceed ngs, as we as demands and c a ms that a se n the no ma cou se of ou bus ness, nc ud ng c a ms of a eged nf ngement
of th d-pa ty patents and othe nte ectua p ope ty ghts, b each of cont act, emp oyment aw v o at ons, and othe matte s and matte s nvo v ng equests fo nfo mat on
f om us o ou custome s unde fede a o state aw Such c a ms, even f not me to ous, cou d esu t n the expend tu e of s gn f cant f nanc a and management esou ces We
make a p ov s on fo a ab ty e at ng to ega matte s when t s both p obab e that a ab ty has been ncu ed and the amount of the oss can be easonab y est mated These
p ov s ons a e ev ewed and adjusted to nc ude the mpacts of negot at ons, est mated sett ements, ega u ngs, adv ce of ega counse , and othe nfo mat on and events
pe ta n ng to a pa t cu a matte

An unfavo ab e outcome on any t gat on matte s cou d equ e payment of substant a damages, o , n connect on w th any nte ectua p ope ty nf ngement c a ms,
cou d equ e us to pay ongo ng oya ty payments o cou d p event us f om se ng ce ta n of ou p oducts As a esu t, a sett ement of, o an unfavo ab e outcome on, any of the
matte s efe enced above o othe t gat on matte s o ega p oceed ngs cou d have a mate a adve se effect on ou bus ness, ope at ng esu ts, f nanc a cond t on and cash
f ows

Item 4. MINE SAFETY DISCLOSURES

Not App cab e

45
 (c) Use of Proceeds from Public Offering of Common Stock
Ou n t a pub c offe ng of common stock (the “IPO”) was effected th ough a Reg st at on Statement on Fo m S- (F e No 333-2 7603), wh ch was dec a ed
effect ve on June 6, 20 7 The e has been no mate a change n the p anned use of p oceeds f om ou IPO as desc bed n ou f na p ospectus f ed w th the SEC pu suant to
Ru e 424(b) and othe pe od c epo ts p ev ous y f ed w th the SEC

We used $ 3 7 m on of the net p oceeds f om ou IPO to epay outstand ng ndebtedness of $ 3 5 m on, nc ud ng ea y te m nat on fees of $0 2 m on, du ng
the qua te end ng Septembe 30, 20 7 On Octobe 3, 20 8, we used $ 7 m on of ou IPO p oceeds to fund the acqu s t on of HunchLab

Securities Authorized for Issuance under Equity Compensation Plans

Info mat on about secu t es autho zed fo ssuance unde ou equ ty compensat on p an s nco po ated he e n by efe ence to Item 2 of Pa t III of th s Annua
Repo t on Fo m 0-K

47
 Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and
accompanying notes included in this Annual Report on Form 10-K. This Annual Report on Form 10-K contains “forward-looking statements within the meaning of Section
27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act ). These statements are often identified by the use of words
such as “anticipate, “believe, “continue, “could, “estimate, “expect, “intend, “may, “plan, “project, “will, “would or the negative or plural of these words or
similar expressions or variations. Such forward-looking statements are subject to a number of risks, uncertainties, assumptions and other factors that could cause actual results
and the timing of certain events to differ materially from future results expressed or implied by the forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to, those identified herein, and those discussed in the section titled “Risk Factors , set forth in Part I, Item 1A of this Annual Report on
Form 10-K and in our other SEC filings. You should not rely upon forward-looking statements as predictions of future events. Furthermore, such forward-looking statements
speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after
the date of such statements.

Overview
We p ov de p ec s on-po c ng and secu ty so ut ons fo aw enfo cement and secu ty pe sonne to he p dete gun v o ence and make c t es, campuses and fac t es
safe Ou f agsh p pub c safety so ut on, ShotSpotte F ex, s the ead ng outdoo gunshot detect on, ocat on and a e t ng system Ou pat o management softwa e,
ShotSpotte M ss ons (fo me y HunchLab), c eates c me fo ecasts des gned to enab e mo e p ec se and effect ve use of pat o esou ces to dete c me In 20 9, we c eated a
new techno ogy nnovat on un t, ShotSpotte Labs, to expand ou effo ts suppo t ng nnovat ve uses of ou techno ogy to he p p otect w d fe and the env onment Ou
secu ty so ut ons, ShotSpotte Secu eCampus and ShotSpotte S teSecu e, a e des gned to he p aw enfo cement and secu ty pe sonne se v ng un ve s t es, co po ate
campuses and key nf ast uctu e o t anspo tat on cente s m t gate sk and enhance secu ty by not fy ng autho t es of a potent a outdoo gunf e nc dent, sav ng c t ca
m nutes fo f st esponde s to a ve Ou gunshot detect on so ut ons a e t usted by aw enfo cement agenc es n ove 00 c t es as of Decembe 3 , 20 9

Ou gunshot detect on so ut ons cons st of h gh y-spec a zed, c oud-based softwa e nteg ated w th p op eta y, nte net-enab ed senso s des gned to detect outdoo
gunf e The speed and accu acy of ou gunf e a e ts enab e aw enfo cement and secu ty pe sonne to educe the esponse t mes to shoot ng events, wh ch can nc ease the
chances of app ehend ng the shoote , p ov d ng t me y a d to v ct ms, and dent fy ng w tnesses befo e they scatte , as we as a d n ev dent a y co ect on and se ve as an
ove a dete ent When a potent a gunf e nc dent s detected by ou senso s, ou system app es mach ne c ass f cat on comb ned w th human ev ew to ana yze and va date
the nc dent and p ec se y ocate whe e the nc dent occu ed An a e t conta n ng a ocat on on a map and c t ca nfo mat on about the nc dent s sent d ect y to subsc b ng
aw enfo cement o secu ty pe sonne th ough any nte net-connected compute and to Phone o And o d mob e dev ces

Ou softwa e sends va dated gunf e data a ong w th the aud o of the t gge ng sound to ou Inc dent Rev ew Cente (“IRC”), whe e ou t a ned acoust c expe ts a e
on duty 24 hou s a day, seven days a week, 365 days a yea to sc een and conf m actua gunf e nc dents Ou acoust c expe ts can supp ement a e ts w th add t ona tact ca
nfo mat on, such as the potent a p esence of mu t p e shoote s o the use of h gh-capac ty weapons Gunshot nc dents ev ewed by ou IRC esu t n a e ts typ ca y sent
w th n 45 seconds of the ece pt of the gunf e nc dent

We gene ate annua subsc pt on evenues f om the dep oyment of ShotSpotte F ex on a pe -squa e-m e bas s Ou secu ty so ut ons, ShotSpotte Secu eCampus and
ShotSpotte S teSecu e, a e typ ca y so d on a subsc pt on bas s, each w th a custom zed dep oyment p an Ou ShotSpotte M ss ons so ut on s a so so d on a subsc pt on
bas s As of Decembe 3 , 20 9, we had ShotSpotte F ex,ShotSpotte Secu eCampus and ShotSpotte S teSecu e cove age a eas unde cont act fo app ox mate y 760 squa e
m es, of wh ch 730 squa e m es had gone ve Cove age a eas unde cont act nc uded 04 c t es and 2 campuses/s tes ac oss the Un ted States, South Af ca and the
Bahamas, nc ud ng th ee of the ten a gest c t es n the Un ted States Du ng the yea ended Decembe 3 , 20 9, one ShotSpotte S teSecu e custome became ShotSpotte
F ex custome Fo the yea ended Decembe 3 , 20 9, substant a y a of ou evenues a e att butab e to custome s based n the Un ted States

50
 Wh e we ntend to cont nue to devote esou ces to nc ease sa es of ou ShotSpotte Secu eCampus, ShotSpotte S teSecu e, ShotSpotte Labs and ShotSpotte
M ss ons so ut ons, we expect that evenues f om ou ShotSpotte F ex so ut on w cont nue to comp se a substant a majo ty of ou evenues fo the fo eseeab e futu e
ShotSpotte Labs p ojects a e gene a y conducted n coo d nat on w th a sponso ng cha tab e o gan zat on These p ojects may o may not be evenue-p oduc ngWhen they
a e evenue-p oduc ng, they w gene a y be so d on a cost-p us bas s As such, ShotSpotte Labs p ojects w no ma y p oduce g oss ma g ns s gn f cant y owe than ou
F ex so ut ons

We ente nto subsc pt on ag eements on a te m bas s that typ ca y ange f om one to f ve yea s n du at on, w th the majo ty hav ng a cont act te m of one yea
Substant a y a of ou sa es a e to gove nmenta agenc es and un ve s t es, wh ch often unde take a p o onged cont act eva uat on p ocess that affects the s ze o the t m ng of
ou sa es cont acts and may kew se nc ease ou custome acqu s t on costs Fo a d scuss on of the sks assoc ated w th ou sa es cyc e, see sks ent t ed “Ou sa es cyc e can
be unp ed ctab e, t me-consum ng and cost y, and ou nab ty to successfu y comp ete sa es cou d ha m ou bus ness” and “Because we gene a y ecogn ze ou subsc pt on
evenues atab y ove the te m of ou cont act w th a custome , f uctuat ons n sa es w not be fu y ef ected n ou ope at ng esu ts unt futu e pe ods” n Item A, Risk
Factors, nc uded n th s Annua Repo t on Fo m 0-K

We e y on a m ted numbe of supp e s and cont act manufactu e s to p oduce components of ou so ut ons We have no ong-te m cont acts w th these
manufactu e s and pu chase f om them on a pu chase-o de bas s Ou outsou ced manufactu e s gene a y p ocu e the components d ect y f om th d-pa ty supp e s A though
we use a m ted numbe of supp e s and cont act manufactu e s, we be eve that we cou d f nd a te nate supp e s o manufactu e s f c cumstances equ ed us to do so, n pa t
because a s gn f cant po t on of the components equ ed by ou so ut ons s ava ab e off the she f Fo a d scuss on of the sks assoc ated w th ou m ted numbe of supp e s,
see sk ent t ed “We e y on a m ted numbe of supp e s and cont act manufactu e s, and ou p op eta y ShotSpotte senso s a e manufactu ed by a s ng e cont act
manufactu e ” n Item A, Risk Factors, nc uded n th s Annua Repo t on Fo m 0-K

We gene ated evenues of $40 8 m on, $34 8 m on and $23 8 m on fo the yea s ended Decembe 3 , 20 9, 20 8, and 20 7, espect ve y, ep esent ng a yea -
ove -yea nc eases of 7% and 46% Fo 20 9, 20 8, and 20 7, evenues f om ShotSpotte F ex ep esented app ox mate y 96%, 97% and 98% of tota evenues, espect ve y
Ou two cu ent a gest custome s, The C ty of Ch cago and the C ty of New Yo k, each accounted fo 20% and 4%, espect ve y, of ou tota evenues fo the yea ended
Decembe 3 , 20 9 The C ty of Ch cago and the C ty of New Yo k, each accounted fo 22% and 5%, espect ve y, of ou tota evenues fo the yea ended Decembe 3 ,
20 8 The C ty of New Yo k and Pue to R co Hous ng Adm n st at on accounted fo 8% and 7%, espect ve y, of ou tota evenues fo the yea ended Decembe 3 , 20 7
Substant a y a of ou evenues fo the yea s ended Decembe 3 , 20 9, 20 8, and 20 7 we e de ved f om custome s w th n the Un ted States ( nc ud ng Pue to R co and the
U S V g n Is ands)

We had net ncome of $ 8 m on fo the yea ended Decembe 3 , 20 9, and had net osses of $2 7 m on and $ 0 0 m on fo the yea s ended Decembe 3 ,
20 8, and 20 7, espect ve y Ou accumu ated def c t was $95 6 m on and $97 4 m on as of Decembe 3 , 20 9 and 20 8, espect ve y

In Septembe 20 7, we used $ 3 7 m on f om the net p oceeds of ou n t a pub c offe ng to vo unta y epay outstand ng ndebtedness of $ 3 5 m on and $0 2
m on n p epayment fees unde a p om sso y note (the “20 5 Te m Note”) In connect on w th th s ea y ext ngu shment of debt, we w ote off $0 3 m on of unamo t zed
debt ssuance costs

Du ng the yea s ended Decembe 3 , 20 9, 20 8, and 20 7, we went “ ve” on 82, 68 and 4 net new squa e m es of cove age, espect ve y In each case, the
nc ease n cove age was ach eved th ough a comb nat on of new custome s and expans ons w th ex st ng custome s Du ng the yea ended Decembe 3 , 20 8, 7 m es out of
68 m es we e due to expans on f om a s ng e custome Du ng the yea ended Decembe 3 , 20 7, the 4 net new squa e m es nc uded the mpact of a 33 cove age m e
educt on as a esu t of ou d scont nuat on n se v ce of Pue to R co and the U S V g n Is ands due to devastat on caused by hu canes

5
 In connect on w th the cessat on of ou se v ce w th Pue to R co and the U S V g n Is ands, we c ass f ed ou cont acts w th them exp ed, stopped ecogn z ng
evenues and acce e ated the defe ed evenues e ated to setup fees unde these cont acts Pue to R co has etu ned as a custome w th 6 m es a eady gone ve at the end of
20 9

We have focused on ap d y g ow ng ou bus ness and be eve that ts futu e g owth s dependent on many facto s, nc ud ng ou ab ty to nc ease ou custome base,
expand the cove age of ou so ut ons among ou ex st ng custome s, expand ou nte nat ona p esence and nc ease sa es of ou secu ty so ut ons Ou futu e g owth w
p ma y depend on the ma ket acceptance fo outdoo gunshot detect on so ut ons Cha enges we face n th s ega d nc ude ou ta get custome s not hav ng access to adequate
fund ng sou ces, the fact that cont act ng w th gove nment ent t es can be comp ex, expens ve, and t me-consum ng and the fact that ou typ ca sa es cyc e s often ve y ong,
d ff cu t to est mate accu ate y and can be cost y We expect nte nat ona sa es cyc es to be even onge than ou domest c sa es cyc es To combat these cha enges, we nvest
n esea ch and deve opment, nc ease awa eness of ou so ut ons, nvest n new sa es and ma ket ng campa gns, often n d ffe ent anguages fo nte nat ona sa es, and h e
add t ona sa es ep esentat ves to d ve sa es n o de to cont nue to ma nta n ou pos t on as a ma ket eade In add t on, we be eve that ente ng nto st ateg c pa tne sh ps w th
othe se v ce p ov de s to c t es and mun c pa t es offe s anothe potent a avenue fo expans on, pa t cu a y fo ou ShotSpotte F ex so ut on

We w a so focus on expand ng ou bus ness by nt oduc ng new p oducts and se v ces to ex st ng custome s such as ShotSpotte M ss ons and ga n ng new custome s
fo ShotSpotte Labs We be eve that deve op ng and acqu ng p oducts fo aw enfo cement n adjacent catego es s a path fo add t ona g owth g ven ou a ge and g ow ng
nsta ed base of po ce depa tments who t ust ShotSpotte ’s p oducts, suppo t and way of do ng bus ness The ab ty to c oss-se new p oducts p ov des an oppo tun ty to g ow
evenues pe custome and fet me va ue Cha enges we face n th s a ea nc ude ensu ng ou new p oducts a e e ab e, nteg ated we w th othe ShotSpotte so ut ons and
p ced and se v ced app op ate y In some cases, we w need to b ng n new sk s sets to p ope y deve op, ma ket, se o se v ce these new p oducts depend ng on the
catego es they ep esent

In Octobe 20 8, we acqu ed the HunchLab techno ogy and e ated assets that unde ne ou ShotSpotte M ss ons so ut on ShotSpotte M ss ons app es sk
mode ng and a t f c a nte gence to he p fo ecast when and whe e c mes a e ke y to eme ge and ecommends spec f c pat o m ss ons and tact cs that can dete these events
The HunchLab techno ogy p ov des a p oven, h gh-va ue, and comp ementa y so ut on we can mmed ate y offe to ou ex st ng aw enfo cement custome s We be eve ou
nvestment w democ at ze the sha ng of mpo tant nte gence w th pat o off ce s who cu ent y have m ted d ect access to c me ana ysts

W th espect to nte nat ona sa es, we be eve that we have the potent a to expand ou cove age w th n South Af ca and the Bahamas, and to pu sue oppo tun t es n
Lat n Ame ca and othe eg ons of the wo d By add ng add t ona sa es esou ces n st ateg c ocat ons, we be eve we w be bette pos t oned to each these ma kets
Howeve , we ecogn ze that we have m ted nte nat ona ope at ona expe ence and cu ent y ope ate n a m ted numbe of eg ons outs de of the Un ted States Ope at ng
successfu y n nte nat ona ma kets w equ e s gn f cant esou ces and management attent on and w subject us to add t ona egu ato y, econom c and po t ca sks We
may face add t ona cha enges that may de ay cont act execut on e ated to negot at ng w th gove nments n t ans t on, the use of th d-pa ty nteg at ons and consu tants
Mo eove , we ant c pate that d ffe ent po t ca and egu ato y cons de at ons that va y ac oss d ffe ent ju sd ct ons cou d extend o make mo e d ff cu t to p ed ct the ength of
what s a eady a engthy sa es cyc e

Initial Public Offering

In June 20 7, we comp eted ou IPO n wh ch we so d 3,220,000 sha es of ou common stock at a p ce of $ 00 pe sha e We ece ved net p oceeds of $32 4
m on, exc ud ng unde w t ng d scounts and comm ss ons, wh ch was eco ded to add t ona pa d- n cap ta

52
Sales and Marketing Spend per $1.00 of New Annualized Contract Value
We ca cu ate sa es and ma ket ng spend annua y as the tota sa es and ma ket ng expense du ng a yea d v ded by the f st 2 months of cont act va ue fo cont acts
ente ed nto du ng the same yea We use th s met c to measu e the eff c ency of ou sa es and ma ket ng effo ts n acqu ng custome s, enew ng custome cont acts and
expand ng the cove age a eas

Net New “Go-Live” Miles

Net new “go- ve” squa e m es ep esent the squa e m es cove ed by dep oyments that we e fo ma y app oved by custome s du ng the qua te , both f om n t a and
expanded custome dep oyments, net of squa e m es that ceased to be “ ve” du ng the qua te due to custome cance at ons New squa e m es nc ude dep oyed squa e m es
that may have been so d, o booked, n p o qua te s We focus on net new “go- ve” m es as a key bus ness met c to measu e ou ope at ona pe fo mance and nfo m
st ateg c dec s ons

Components of Results of Operations

Presentation of Financial Statements
Ou conso dated f nanc a statements nc ude the accounts of ou who y-owned Co omb an and South Af can subs d a es, ShotSpotte Co omb a S A S and
ShotSpotte (Pty) Ltd A nte company ba ances and t ansact ons have been e m nated n conso dat on

Revenues
We de ve substant a y a of ou evenues f om subsc pt on se v ces We ecogn ze subsc pt on fees atab y, on a st a ght- ne bas s, ove the te m of the
subsc pt on, wh ch fo new custome s s typ ca y n t a y one to th ee yea s n ength Custome cont acts nc ude one-t me set-up fees fo the set-up of ou senso s n the
custome ’s cove age a eas, t a n ng and th d-pa ty nteg at on censes If the set-up fees a e deemed to be a mate a ght, they a e ecogn zed atab y ove th ee yea s
T a n ng and th d-pa ty nteg at on cense fees a e ecogn zed upon de ve y

Fo ShotSpotte F ex, we gene a y nvo ce custome s fo 50% of the tota cont act va ue when the cont act s fu y executed and fo the ema n ng 50% when the
subsc pt on se v ce s ope at ona and eady to go ve that s, when the custome has acknow edged the comp et on of a the de ve ab es n the s gned custome acceptance
fo m A fees b ed n advance of se v ces be ng de ve ed a e eco ded as defe ed evenue The t m ng of when new m es go ve can be unce ta n and, as a esu t, can have a
s gn f cant mpact on the eve s of evenues and defe ed evenue f om qua te to qua te Fo ou ShotSpotte F ex so ut on, ou p c ng mode s based on a pe -squa e-m e
bas s Fo ou ShotSpotte M ss ons so ut on, p c ng s cu ent y custom zed, gene a y t ed to the numbe of swo n po ce off ce s n a pa t cu a c ty Fo ShotSpotte
Secu eCampus and ShotSpotte S teSecu e, ou p c ng mode s on a custom zed-s te bas s We may a so offe d scounts o othe ncent ves n conjunct on w th ShotSpotte
M ss ons sa es n an effo t to nt oduce the p oduct and acce e ate sa es As a esu t of ou p ocess fo nvo c ng cont acts and enewa s upon execut on, ou cash f ow f om
ope at ons and accounts ece vab e can f uctuate due to t m ng of cont act execut on and t m ng of dep oyment

We gene a y nvo ce subsc pt on se v ce enewa s fo 00% of the tota cont act va ue when the enewa cont act s executed Renewa fees a e ecogn zed atab y
ove the te m of the enewa , wh ch s typ ca y one yea Wh e most of ou custome s e ect to enew the ag eements, n some cases, they may not be ab e to obta n the p ope
app ova s o fund ng to comp ete the enewa p o to exp at on Fo these custome s, we stop ecogn z ng subsc pt on evenues at the end of the cu ent cont act te m, even
though we may cont nue to p ov de se v ces fo a pe od of t me unt the enewa p ocess s comp eted Once the enewa s comp ete, we then ecogn ze subsc pt on evenues
fo the pe od between the exp at on of the te m of the ag eement and the comp et on of the enewa p ocess n the month n wh ch the enewa s executed If a custome
dec nes to enew ts subsc pt on p o to the end of th ee yea s, then the ema n ng setup fees a e mmed ate y ecogn zed

54
 ShotSpotte Labs p ojects may o may not be evenue-p oduc ng When they a e evenue-p oduc ng, they w gene a y be so d on a cost-p us bas s

It s ke y that nte nat ona dep oyments may have d ffe ent payment and b ng te ms due to the oca aws, est ct ons o othe customa y te ms and cond t ons

Costs
Costs nc ude the cost of evenues and cha ges fo mpa ment of p ope ty and equ pment Cost of evenues p ma y nc udes dep ec at on expense assoc ated w th
cap ta zed custome acoust c senso netwo ks, commun cat on expenses, costs e ated to host ng ou se v ce app cat ons, costs e ated to ope at ng ou Inc dent Rev ew Cente
(the “IRC”), p ov d ng emote and on-s te custome suppo t and ma ntenance and fo ens c se v ces, ce ta n pe sonne and e ated costs of ope at ons, stock-based compensat on
and a ocated ove heads, wh ch nc udes IT, fac ty and equ pment dep ec at on costs

Impa ment of p ope ty and expense s p ma y att butab e to ou w te-off of the ema n ng book va ue of ndoo senso nvento y and ndoo senso netwo ks
nsta ed n ce ta n secu ty custome s du ng the yea ended Decembe 3 , 20 8 and w te-off fo dep oyed equ pment n Pue to R co and U S V g n Is ands that was dest oyed
by the hu canes n Septembe 20 7

We w have to upg ade ou senso s that use th d-gene at on (“3G”) ce u a commun cat ons to the fou th-gene at on Long-Te m Evo ut on w e ess techno ogy,
wh ch w nc ease ou cost of evenues O g na y, we had expected to sta t ncu ng costs n 202 th ough 2022 We have begun p ans to ep ace senso s n ce ta n
geog aph c a eas sta t ng n ea y 202 Acce e ated bandw dth changes by ou ca e s may equ e us to acce e ate the upg ade of ou 3G senso s p o to 202 , wh ch wou d
acce e ate the costs assoc ated w th the upg ade, wh ch a e est mated to be between $4 0 m on and $6 0 m on n tota We may to e-use and e-dep oy the o d 3G senso s
that have a ema n ng se v ceab e fe whe e t makes sense to do so

In the nea te m, we expect ou cost of evenues to nc ease as ou nsta ed base nc eases, a though ce ta n of ou costs of evenues a e f xed and do not need to
nc ease commensu ate w th nc eases n evenues In add t on, dep ec at on expense assoc ated w th dep oyed equ pment s ecogn zed on y ove the f st f ve yea s f om the
go- ve date We a so expect cost of evenues to nc ease as we cont nue to nvest n ou custome success capab t es to d ve g owth and va ue fo ou custome s

Operating Expenses
Ope at ng expenses cons st of sa es and ma ket ng, esea ch and deve opment, and gene a and adm n st at ve expenses Sa a es, bonuses, stock-based compensat on
expense and othe pe sonne costs a e the most s gn f cant components of each of these expense catego es We nc ude stock-based compensat on expense ncu ed n
connect on w th the g ant of stock opt ons and est cted stock un ts to the app cab e ope at ng expense catego y based on the equ ty awa d ec p ent’s funct ona a ea

We a e focused on execut ng on ou g owth st ategy As a esu t, n the nea te m we expect ou tota ope at ng expenses to nc ease n abso ute do a s as we ncu
add t ona expenses due to g owth and as a esu t of ope at ng as a pub c company A though ou ope at ng expenses w f uctuate, we expect that ove t me, they w gene a y
dec ease as a pe centage of evenues

Sales and Marketing

Sa es and ma ket ng expenses p ma y cons st of pe sonne - e ated costs att butab e to ou sa es and ma ket ng pe sonne , comm ss ons ea ned by ou sa es
pe sonne , ma ket ng expenses fo t ade shows, confe ences and convent ons, consu t ng fees, t ave and fac ty- e ated costs and a ocated ove head

55
 In the nea te m, we expect ou sa es and ma ket ng expenses to nc ease n abso ute do a s p ma y due to p anned g owth n ou sa es and ma ket ng o gan zat on
Th s g owth w nc ude add ng sa es and ma ket ng pe sonne and expand ng ou ma ket ng act v t es to cont nue to gene ate add t ona eads Sa es and ma ket ng expense
may f uctuate f om qua te to qua te based on the t m ng of comm ss on expense, ma ket ng campa gns and t adeshows

Research and Development

Resea ch and deve opment expenses p ma y cons st of pe sonne - e ated costs att butab e to ou esea ch and deve opment pe sonne , consu t ng fees and a ocated
ove head We have devoted ou p oduct deve opment effo ts p ma y to deve op new owe -cost senso ha dwa e, deve op new featu es nc ud ng a mob e app cat on,
mp ove funct ona ty of ou so ut ons and adapt to new techno og es o changes to ex st ng techno og es

We a e nvest ng n eng nee ng esou ces to suppo t fu the deve opment of the ShotSpotte M ss ons c me fo ecast ng softwa e The focus of th s effo t w be n the
a eas of data sc ence mode ng, use expe ence, co e app cat on funct ona ty and backend nf ast uctu e mp ovements, nc ud ng nteg at on of ShotSpotte gunshot data to
enhance fo ecast ng of gun v o ence

We a e a so nvest ng esea ch and deve opment esou ces n conjunct on w th ou ShotSpotte Labs p ojects and n t at ves The n t a focus of these effo ts s to
deve op new unde wate senso app cat ons as we as to test and expand the funct ona ty of ou outdoo senso s n cha eng ng env onmenta cond t ons

In the nea te m, we expect ou esea ch and deve opment expenses to nc ease n abso ute do a s as we nc ease ou esea ch and deve opment headcount to fu the
st engthen ou softwa e and nvest n the deve opment of ou se v ce

We w cont nue to nvest n esea ch and deve opment to eve age ou a ge and g ow ng database of acoust c events, wh ch nc udes those f om both gunf e and
non-gunf e We a so ntend to eve age th d-pa ty AI and ou own evo v ng cogn t ve and ana yt ca app cat ons to mp ove the eff c ency of ou so ut ons, wh ch may nc ude
nte na softwa e app cat ons, data ana ys s, event out ng and custome outputs Ce ta n of these app cat ons and outputs may expand the p atfo m of se v ces that we w be
ab e to offe ou custome s

General and Administrative

Gene a and adm n st at ve expenses p ma y cons st of pe sonne - e ated costs att butab e to ou execut ve, f nance, and adm n st at ve pe sonne , ega , account ng
and othe p ofess ona se v ces fees, othe co po ate expenses and a ocated ove head We have ecent y ncu ed add t ona expenses n expand ng ou ope at ons, nc ud ng
nc eased pe sonne , ega , nsu ance and account ng expenses, and the add t ona costs of ach ev ng and ma nta n ng comp ance w th Sect on 404 of the Sa banes-Ox ey Act
and othe egu at ons

In the nea te m, we expect ou gene a and adm n st at ve expenses to nc ease s gn f cant y n abso ute do a s as we g ow ou bus ness, suppo t ou ope at ons as a
pub c company and nc ease ou headcount

Other Income (Expense), Net

Othe ncome (expense), net, cons sted p ma y of nte est ncome and oca and f anch se tax expenses In add t on, n 20 7, t nc uded expense on ou outstand ng
debt, and osses f om the emeasu ement of ou conve t b e p efe ed stock wa ant ab ty and osses f om ea y ext ngu shment of debt

Income Taxes
Ou ncome taxes a e based on the amount of ou taxab e ncome and enacted fede a , state and fo e gn tax ates, adjusted fo a owab e c ed ts, deduct ons and the
va uat ons a owance aga nst defe ed tax assets, as app cab e

56
Costs
The nc ease n costs of $3 4 m on was due p ma y to a $ 4 m on nc ease n ove head expenses esu t ng f om an nc ease n emp oyee headcount, a $0 8
m on nc ease n ope at ng costs, wh ch nc udes costs ncu ed n p ov d ng emote and on-s te custome suppo t and ma ntenance se v ces, nf ast uctu e host ng fo ou
se v ce app cat on and costs e ated to ope at ng ou IRC, and a $0 6 m on nc ease n dep ec at on offset by $0 4 m on dec ease n te ecommun cat on fees and $0 m on
n owe mpa ment cha ges Du ng 20 8, we ecogn zed mpa ment expense of $0 7 m on fo the mpa ment of p ope ty and equ pment p ma y e ated to the ema n ng
book va ue of ndoo senso nvento y and ndoo senso netwo ks nsta ed at ce ta n secu ty custome s Du ng 20 7, we ecogn zed mpa ment expense of $0 8 m on fo
the mpa ment of p ope ty and equ pment p ma y e ated to the ema n ng net book va ue fo dep oyed equ pment that was p esumed dest oyed by hu canes n Septembe
20 7

G oss ma g n fo 20 8 nc eased s x pe centage po nts f om g oss ma g n fo 20 7 because ce ta n costs of evenues a e f xed and d d not nc ease commensu ate w th
the nc ease n subsc pt on evenues

Operating Expenses
Sales and Marketing Expense
The nc ease n sa es and ma ket ng expense of $2 2 m on was p ma y due to an nc ease of $ 3 m on n sa a es, comm ss ons, ec u t ng, and stock-based
compensat on expense, and a $0 7 m on nc ease n consu t ng and outs de se v ces assoc ated w th expans on of ou sa es, ma ket ng and custome success o gan zat on

Research and Development Expense

The nc ease n esea ch and deve opment expense of $0 8 m on was due p ma y due to a $0 7 m on nc ease n sa a es, benef ts and bonuses fo esea ch and
deve opment pe sonne , and stock-based compensat on expense and a $0 m on nc ease n consu t ng fees e ated to the deve opment of ou mob e app cat ons and next-
gene at on senso s

General and Administrative Expense

The nc ease n gene a and adm n st at ve expense of $2 8 m on f om 20 7 to 20 8 was due to a $2 0 m on nc ease n ega , account ng and othe outs de se v ces
fees assoc ated w th t gat on and sett ement expenses, bus ness acqu s t on expenses, and ope at ng as a pub c company, a $0 4 m on nc ease n non-emp oyee d ecto
compensat on, and a $0 4 m on nc ease n pe sonne expense p ma y due to stock-based compensat on expense

Other Expense, Net

The dec ease n othe expense, net of $5 3 m on was due to a $3 7 m on dec ease n expense e ated to the emeasu ement of the p efe ed stock wa ant ab ty
due to a f na emeasu ement upon ou IPO n the second qua te of 20 7, a $ 6 m on dec ease n nte est expense due to the te m nat on of debt n the th d qua te of 20 7, a
$0 2 m on n p epayment fees n connect on w th the ea y ext ngu shment of debt, and a w te-off of $0 3 m on of unamo t zed debt ssuance costs due to the te m nat on of
debt n the th d qua te on 20 7

Income Taxes
Ou ncome taxes a e based on the amount of ou taxab e ncome and enacted fede a , state and fo e gn tax ates, adjusted fo a owab e c ed ts, deduct ons and the
va uat ons a owance aga nst defe ed tax assets, as app cab e Fo the yea s ended Decembe 3 , 20 8 and 20 7, ou p ov s on fo ncome taxes cons sted of a benef t
(p ov s on) fo fo e gn ncome taxes on y

59
Liquidity and Capital Resources
Sources of Funds
Ou ope at ons have been f nanced p ma y th ough net p oceeds f om the sa e of equ ty, debt f nanc ng a angements and cash f om ope at ng act v t es Ou
p nc pa sou ce of qu d ty s cash and cash equ va ents tota ng $24 6 m on as of Decembe 3 , 20 9 We a so have a $ 0 0 m on c ed t fac ty, of wh ch no amounts we e
outstand ng as of Decembe 3 , 20 9

In Ma ch 20 9, we ssued and so d 250,000 sha es of ou common stock n an unde w tten pub c offe ng, fo wh ch we ece vednet p oceeds of $ 0 6 m on afte
deduct ng offe ng expenses

We be eve ou ex st ng cash and cash equ va ent ba ances, ou ava ab e c ed t fac ty and cash f ow f om ope at ons w be suff c ent to meet ou wo k ng cap ta
and cap ta expend tu e equ ements fo at east the next 2 months Ou futu e cap ta equ ements may va y mate a y f om those cu ent y p anned and w depend on many
facto s, nc ud ng ou ate of evenues g owth, the t m ng and extent of spend ng on sa es and ma ket ng, the expans on of sa es and ma ket ng act v t es, the t m ng of new
p oduct nt oduct ons, ma ket acceptance of ou p oducts and ove a econom c cond t ons We may a so seek add t ona cap ta to fund ou ope at ons, nc ud ng th ough the
sa e of equ ty o debt f nanc ngs To the extent that we a se add t ona cap ta th ough the futu e sa e of equ ty, the owne sh p nte est of ou stockho de s w be d uted, and
the te ms of these secu t es may nc ude qu dat on o othe p efe ences that adve se y affect the ghts of ou ex st ng common stockho de s The ncu ence of debt f nanc ng
wou d esu t n debt se v ce ob gat ons and the nst uments gove n ng such debt cou d p ov de fo ope at ng and f nanc ng covenants that wou d est ct ou ope at ons

Use of Funds
Ou h sto ca uses of cash have p ma y cons sted of cash used fo ope at ng act v t es, such as expans on of ou sa es and ma ket ng ope at ons, esea ch and
deve opment act v t es and othe wo k ng cap ta needs, and cash used n nvest ng act v t es, such as p ope ty and equ pment expend tu es to nsta nf ast uctu e n custome
c t es n o de to de ve ou so ut ons

On Octobe 3, 20 8, we acqu ed ce ta n techno ogy, efe ed to as HunchLab, and e ated assets f om Azavea Inc The pu chase cons de at on tota ed $2 5 m on,
cons st ng of $ 7 m on n cash and a cont ngent ea nout payab e n cash fo up to $750,000 based on HunchLab’s evenues gene ated ove the th ee-yea pe od fo ow ng the
acqu s t on date

In Septembe 20 7, we vo unta y epa d ou outstand ng bo ow ng of $ 3 5 m on unde the 20 5 Te m Note Th s esu ted n a oss on ea y ext ngu shment of
debt of $0 2 m on fo p epayment fees and othe m sce aneous fees, and $0 3 m on fo the w te-off of a po t on of ou unamo t zed debt ssuance costs

Stock Repurchase Program

In May 20 9, we announced that ou Boa d of D ecto s had app oved a stock epu chase p og am fo up to $ 5 m on of ou common stock The sha es may be
epu chased f om t me to t me n open ma ket t ansact ons, n p vate y negot ated t ansact ons o by othe methods n acco dance w th fede a secu t es aws The actua t m ng,
numbe and va ue of sha es epu chased unde the p og am w be dete m ned by management n ts d sc et on and w depend on a numbe of facto s, nc ud ng the ma ket
p ce of ou common stock, gene a ma ket and econom c cond t ons and app cab e ega equ ements The stock epu chase p og am does not ob gate us to pu chase any
pa t cu a amount of common stock and may be suspended o d scont nued at any t me

Du ng the yea ended Decembe 3 , 20 9, we epu chased 257,824 sha es of ou common stock at an ave age p ce of $26 pe sha e fo $6 7 m on The
epu chases we e made n open ma ket t ansact ons us ng cash on hand, and a of the sha es epu chased we e et ed

60
Off-Balance Sheet Arrangements
As of Decembe 3 , 20 9, we d d not have any e at onsh ps w th unconso dated o gan zat ons o f nanc a pa tne sh ps, such as st uctu ed f nance o spec a pu pose
ent t es, that we e estab shed fo the pu pose of fac tat ng off-ba ance sheet a angements We do not engage n off-ba ance sheet f nanc ng a angements In add t on, we do
not engage n t ad ng act v t es nvo v ng non-exchange t aded cont acts

Critical Accounting Policies and Estimates

Ou conso dated f nanc a statements a e p epa ed n acco dance w th Un ted States Gene a y Accepted Account ng P nc p es (“GAAP”) The p epa at on of ou
conso dated f nanc a statements equ es us to make est mates, assumpt ons and judgments that affect the epo ted amounts of evenues, assets, ab t es, costs and expenses
We base ou est mates and assumpt ons on h sto ca expe ence and othe facto s that we be eve to be easonab e unde the c cumstances We eva uate ou est mates and
assumpt ons on an ongo ng bas s Ou actua esu ts may d ffe f om these est mates Ou most c t ca account ng po c es a e summa zed be ow See Note 3, Basis of
Presentation and Summary of Significant Accounting Policies, to ou conso dated f nanc a statements nc uded e sewhe e n th s Annua Repo t on Fo m 0-K fo a desc pt on
of ou othe s gn f cant account ng po c es

Revenue Recognition We gene ate substant a y a of ou evenues f om the sa e of gunshot detect on subsc pt on se v ces, n wh ch gunshot data gene ated by
company-owned senso s and softwa e s so d to custome s th ough a c oud-based host ng app cat on fo a spec f ed cont act pe od Typ ca y, the n t a cont act pe od s one
to f ve yea s n ength The subsc pt on cont act s gene a y noncance ab e w thout cause Gene a y, these se v ce a angements do not p ov de the custome w th the ght to
take possess on of the ha dwa e o softwa e suppo t ng the subsc pt on se v ce at any t me A sma po t on of ou evenues a e gene ated f om the de ve y of setup se v ces to
nsta company-owned senso s n the custome ’s cove age a ea and othe se v ces nc ud ng t a n ng and cense to nteg ate w th th d-pa ty app cat ons

We gene a y nvo ces custome s fo 50% of the tota cont act va ue when the cont act s fu y executed and fo the ema n ng 50% when the subsc pt on se v ce s
ope at ona and eady to go ve that s, when the custome has acknow edged the comp et on of a the de ve ab es n the s gned custome acceptance fo m We gene a y
nvo ces subsc pt on se v ce enewa s fo 00% of the tota cont act va ue when the enewa cont act s executed Fo the pub c safety so ut on, the p c ng mode s based on a
pe -squa e-m e bas s Fo secu ty so ut ons, the p c ng mode s on a custom zed-s te bas s As a esu t of the p ocess fo nvo c ng cont acts and enewa s upon execut on, cash
f ows f om ope at ons and accounts ece vab e can f uctuate due to t m ng of cont act execut on and t m ng of dep oyment

We ecogn ze evenues upon the sat sfact on of pe fo mance ob gat ons At cont act ncept on, we assess the se v ces p om sed n ts cont acts w th custome s and
dent f es a pe fo mance ob gat on fo each p om se to t ansfe to the custome a good o se v ce (o bund e of se v ces) that s d st nct To dent fy the pe fo mance ob gat ons,
we cons de a of the se v ces p om sed n the cont act ega d ess of whethe they a e exp c t y stated o a e mp ed by customa y bus ness p act ces We dete m ned that the
subsc pt on se v ces, t a n ng, and censes to nteg ate w th th d-pa ty app cat ons a e each d st nct se v ces that ep esent sepa ate pe fo mance ob gat ons The setup
act v t es a e not d st nct f om the subsc pt on se v ce and a e comb ned nto the subsc pt on se v ce pe fo mance ob gat on Howeve , setup fees may p ov de a mate a ght
to the custome that has nf uence ove the custome s' dec s on to enew A setup fees a e assessed on a quant tat ve and qua tat ve bas s to dete m ne whethe they ep esent a
d st nct pe fo mance ob gat on The tota cont act va ue s a ocated to each pe fo mance ob gat on dent f ed based on the standa one se ng p ce of the se v ce D scounts a e
a ocated p o- ata to the dent f ed pe fo mance ob gat ons Fo cont acts that have an o g na du at on of one yea o ess, we use the p act ca exped ent app cab e to such
cont acts and does not cons de the t me va ue of money

Revenues f om subsc pt on se v ces a e ecogn zed atab y, on a st a ght- ne bas s, ove the te m of the subsc pt on Revenues f om mate a ghts a e ecogn zed
atab y ove the pe od n wh ch they a e dete m ned to p ov de a mate a ght to the custome , wh ch s gene a y th ee yea s Revenues f om t a n ng and censes to nteg ate
w th th d-pa ty app cat ons a e ecogn zed upon de ve y wh ch gene a y occu s when the subsc pt on se v ce s ope at ona and eady to go ve and these amounts a e
mmate a

63
 Subsc pt on enewa fees a e ecogn zed atab y ove the te m of the enewa , wh ch s typ ca y one yea Wh e most custome s e ect to enew the ag eements, n
some cases, they may not be ab e to obta n the p ope app ova s o fund ng to comp ete the enewa p o to exp at on Fo these custome s, we stop ecogn z ng subsc pt on
evenues at the end of the cu ent cont act te m, even though se v ces may cont nue to be p ov ded fo a pe od of t me unt the enewa p ocess s comp eted Once the enewa
s comp ete, we ecogn ze subsc pt on evenues fo the pe od between the exp at on of the te m of the ag eement and the comp et on of the enewa pocess n the month n
wh ch the enewa s executed If a custome dec nes to enew ts subsc pt on, then the ema n ng fees f om mate a ghts, f any, a e mmed ate y ecogn zed

Stock-Based Compensation We ecogn ze stock-based compensat on expense fo stock-based compensat on awa ds g anted to ou emp oyees, d ecto s, and
consu tants that can be sett ed n sha es of ou common stock Compensat on expense fo stock-based compensat on awa ds g anted s based on the g ant date fa va ue est mate
fo each awa d as dete m ned by ou boa d of d ecto s We ecogn ze these compensat on costs on a st a ght- ne bas s ove the equ s te se v ce pe od of the awa d, wh ch s
gene a y fou yea s

Rest cted stock un t awa ds a e va ued us ng the ast epo ted stock p ce on the date of g ant

We est mate the fa va ue of stock opt on awa ds at the date of g ant us ng the B ack-Scho es opt on p c ng mode , wh ch was deve oped fo use n est mat ng the
va ue of t aded opt ons that have no vest ng est ct ons and a e f ee y t ansfe ab e The fa va ues gene ated by the mode may not be nd cat ve of the actua fa va ues of ou
awa ds as t does not cons de othe facto s mpo tant to those stock-based payment awa ds, such as cont nued emp oyment, pe od c vest ng equ ements and m ted
t ansfe ab ty

Business Acquisition We a ocate the fa va ue of pu chase cons de at on to the tang b e assets acqu ed, ab t es assumed and ntang b e assets acqu ed based
on the est mated fa va ues The excess of the fa va ue of pu chase cons de at on ove the fa va ues of these dent f ab e assets and ab t es s eco ded as goodw When
dete m n ng the fa va ues of assets acqu ed and ab t es assumed, management makes s gn f cant est mates and assumpt ons, espec a y w th espect to ntang b e assets
C t ca est mates n va u ng such ntang b e assets nc ude, but not m ted to, futu e expected cash f ows f om custome e at onsh ps and deve oped techno ogy; and d scount
ates

Goodwill Goodw s tested fo mpa ment at the epo t ng un t eve (ope at ng segment o one eve be ow an ope at ng segment) on an annua bas s (Octobe )
and between annua tests f an event occu s o c cumstances change that wou d mo e ke y than not educe the fa va ue of a epo t ng un t be ow ts ca y ng va ue These
events o c cumstances cou d nc ude a s gn f cant change n the bus ness c mate, ega facto s, ope at ng pe fo mance nd cato s, compet t on, o sa e o d spos t on of a
s gn f cant po t on of a epo t ng un t App cat on of the goodw mpa ment test equ es judgment, nc ud ng the dent f cat on of epo t ng un ts and dete m nat on of the fa
va ue of each epo t ng un t The fa va ue of each epo t ng un t s est mated p ma y th ough the use of a d scounted cash f ow methodo ogy Th s ana ys s equ es
s gn f cant judgments, nc ud ng est mat on of futu e cash f ows, wh ch s dependent on nte na fo ecasts, est mat on of the ong-te m ate of g owth fo ou bus ness, est mat on
of the usefu fe ove wh ch cash f ows w occu , and dete m nat on of ou we ghted ave age cost of cap ta The est mates used to ca cu ate the fa va ue of a epo t ng un t
change f om yea to yea based on ope at ng esu ts, ma ket cond t ons, and othe facto s Changes n these est mates and assumpt ons cou d mate a y affect the dete m nat on
of fa va ue and goodw mpa ment We pe fo med ou annua test fo goodw and ong- ved assets mpa ment as of Octobe , 20 9 and conc uded that no mpa ment
cha ge was necessa y

Recently Adopted Accounting Pronouncements

In Feb ua y 20 6, the FASB ssued ASU 20 6-02, Leases (Top c 842) The e have been fu the amendments, nc ud ng p act ca exped ents, w th the ssuance of ASU
20 8-0 n Janua y 20 8, ASU 20 8- n Ju y 20 8 and ASU 20 8-20 n Decembe 20 8 The amended gu dance equ es the ecogn t on of ease assets and ease ab t es
on the ba ance sheet fo those eases w th te ms n excess of 2 months and cu ent y c ass f ed as ope at ng eases D sc osu e of key nfo mat on about eas ng a angements s
equ ed Effect ve Janua y , 20 9, we adopted Top c 842 We e ected the opt ona t ans t on method wh ch a ows ent t es to cont nue to app y h sto ca account ng gu dance
n the compa at ve pe ods p esented n the yea of adopt on

64
 At t ans t on, essees and esso s may e ect to app y a package of p act ca exped ents pe m tt ng ent t es not to eassess ( ) whethe any exp ed o ex st ng cont acts
a e o conta n eases; ( ) ease c ass f cat on fo any exp ed o ex st ng eases and ( ) whethe n t a d ect costs fo any exp ed o ex st ng eases qua fy fo cap ta zat on
unde the amended gu dance These p act ca exped ents must be e ected as a package and cons stent y app ed We have e ected to app y the package of p act ca exped ents
upon adopt on

Ou ope at ng ease fo ou co po ate headqua te s off ce s mpacted by the new standa d and upon adopt on, we ecogn zed a ght-of-use asset of $0 9 m on
and e ated ease ab t es tota ng $0 9 m on See Note 8, Leases.

In Ju y 20 7, the FASB ssued ASU 20 7- , Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic
815) The amendments n Pa t I of ASU 20 7- change the c ass f cat on ana ys s of ce ta n equ ty- nked f nanc a nst uments (o embedded featu es) w th down ound
featu es When dete m n ng whethe ce ta n f nanc a nst uments shou d be c ass f ed as ab t es o equ ty nst uments, a down ound featu e no onge p ec udes equ ty
c ass f cat on when assess ng whethe the nst ument s ndexed to an ent ty’s own stock The amendments a so c a fy ex st ng d sc osu e equ ements fo equ ty-c ass f ed
nst uments We adopted th s ASU as of Janua y , 20 9 and the adopt on d d not have any mpact on the conso dated f nanc a statements

Item 7A. QUALITATIVE AND QU ANTITATIVE DISCLOSURES ABOUT MARKET RISK

Ma ket sk ep esents the sk of oss that may mpact ou f nanc a pos t on due to adve se changes n f nanc a ma ket p ces and ates Ou ma ket sk exposu e s
p ma y the esu t of f uctuat ons n nte est ates and fo e gn exchange ates as we as, to a esse extent, nf at on

Interest Rate Risk

We a e exposed to nte est ate sk n the o d na y cou se of ou bus ness Ou cash nc udes cash n ead y ava ab e check ng and money ma ket accounts These
secu t es a e not dependent on nte est ate f uctuat ons that may cause the p nc pa amount of these assets to f uctuate

We had cash of $24 6 m on as of Decembe 3 , 20 9, wh ch cons sts ent e y of bank depos ts To date, f uctuat ons n nte est ncome have not been s gn f cant

We do not ente nto nvestments fo t ad ng o specu at ve pu poses and have not used any de vat ve f nanc a nst uments to manage ou nte est ate sk exposu e

Foreign Currency Exchange Risk

We have fo e gn cu ency sks e ated to ou evenues and ope at ng expenses denom nated n cu enc es othe than ou funct ona cu ency, the U S do a ,
p nc pa y the South Af can Rand Movements n fo e gn cu enc es n wh ch we t ansact bus ness cou d s gn f cant y affect futu e net ea n ngs Fo examp e, f the ave age
va ue of the South Af can Rand had been 0% h ghe e at ve to the U S do a du ng 20 9, 20 8 o 20 7, t wou d not have esu ted n a s gn f cant mpact to ou esu ts of
ope at ons fo the yea s ended Decembe 3 , 20 9, 20 8 o 20 7 To date, we have not engaged n any hedg ng st ateg es As ou nte nat ona ope at ons g ow, we w
cont nue to eassess ou app oach to manage ou sk e at ng to f uctuat ons n fo e gn cu ency ate

Inflation Risk
We do not be eve that nf at on has had a mate a effect on ou bus ness, f nanc a cond t on o esu ts of ope at ons If ou costs we e to become subject to s gn f cant
nf at ona y p essu es, we may not be ab e to fu y offset such h ghe costs th ough p ce nc eases Ou nab ty o fa u e to do so cou d ha m ou bus ness, f nanc a cond t on
and esu ts of ope at ons

65
 Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Repo t of Independent Reg ste ed Pub c Account ng F m 67

Conso dated Ba ance Sheets 68

Conso dated Statements of Ope at ons 69

Conso dated Statements of Comp ehens ve Income (Loss) 70

Conso dated Statements of Conve t b e P efe ed Stock and Stockho de s’ Equ ty/(Def c t) 7

Conso dated Statements of Cash F ows 72

Notes to Conso dated F nanc a Statements 73

66
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockho de s and the Boa d of D ecto s of ShotSpotte , Inc

Opinion on the Financial Statements
We have aud ted the accompany ng conso dated ba ance sheets of ShotSpotte , Inc (the "Company") as of Decembe 3 , 20 9 and 20 8, the e ated conso dated statements of
ope at ons, comp ehens ve ncome ( oss), conve t b e p efe ed stock and stockho de s’ equ ty/(def c t), and cash f ows, fo each of the th ee yea s n the pe od ended Decembe
3 , 20 9, and the e ated notes (co ect ve y efe ed to as the "conso dated f nanc a statements") In ou op n on, the conso dated f nanc a statements p esent fa y, n a
mate a espects, the f nanc a pos t on of the Company as of Decembe 3 , 20 9 and 20 8, and the esu ts of the ope at ons and the cash f ows fo each of the th ee yea s n
the pe od ended Decembe 3 , 20 9, n confo m ty w th account ng p nc p es gene a y accepted n the Un ted States of Ame ca
Basis for Opinion
These conso dated f nanc a statements a e the espons b ty of the Company's management Ou espons b ty s to exp ess an op n on on the Company's conso dated
f nanc a statements based on ou aud ts We a e a pub c account ng f m eg ste ed w th the Pub c Company Account ng Ove s ght Boa d (Un ted States) ("PCAOB") and a e
equ ed to be ndependent w th espect to the Company n acco dance w th the U S fede a secu t es aws and the app cab e u es and egu at ons of the Secu t es and
Exchange Comm ss on and the PCAOB
We conducted ou aud ts n acco dance w th the standa ds of the PCAOB Those standa ds equ e that we p an and pe fo m the aud t to obta n easonab e assu ance about
whethe the conso dated f nanc a statements a e f ee of mate a m sstatement, whethe due to e o o f aud The Company s not equ ed to have, no we e we engaged to
pe fo m, an aud t of ts nte na cont o ove f nanc a epo t ng As pa t of ou aud ts we a e equ ed to obta n an unde stand ng of nte na cont o ove f nanc a epo t ng but
not fo the pu pose of exp ess ng an op n on on the effect veness of the Company's nte na cont o ove f nanc a epo t ng Acco d ng y, we exp ess no such op n on
Ou aud ts nc uded pe fo m ng p ocedu es to assess the sks of mate a m sstatement of the conso dated f nanc a statements, whethe due to e o o f aud, and pe fo m ng
p ocedu es that espond to those sks Such p ocedu es nc uded exam n ng, on a test bas s, ev dence ega d ng the amounts and d sc osu es n the conso dated f nanc a
statements Ou aud ts a so nc uded eva uat ng the account ng p nc p es used and s gn f cant est mates made by management, as we as eva uat ng the ove a p esentat on of
the conso dated f nanc a statements We be eve that ou aud ts p ov de a easonab e bas s fo ou op n on

s Baker Tilly Virchow Krause, LLP

We have se ved as the Company's aud to s nce 20 6

M nneapo s, M nnesota
Ma ch 2, 2020

67
 ShotSpotter, Inc.
Notes to Consolidated Financial Statements

Note 1. Organization and Description of Business

ShotSpotte , Inc (the “Company”) p ov des p ec s on-po c ng so ut ons fo aw enfo cement to he p dete gun v o ence and make c t es, campuses and fac t es safe
The company’s f agsh p p oduct, ShotSpotte F ex, s the ead ng outdoo gunshot detect on, ocat on and fo ens c system t usted by ove 00 c t es ShotSpotte M ss ons uses
mach ne ea n ng-d ven ana ys s to he p st ateg ca y p an d ected pat o m ss ons and tact cs fo max mum c me dete ence ShotSpotte Labs s the Company’s effo t to
suppo t nnovat ve uses of ts techno ogy to he p p otect w d fe and the env onment The Company offe s ts so ut ons on a SaaS-based subsc pt on mode to ts custome s

The Company’s p nc pa execut ve off ces a e ocated n Newa k, Ca fo n a The Company has two who y-owned subs d a es, ShotSpotte (Pty) Ltd fo med n
South Af ca and ShotSpotte Co omb a S A S wh ch was fo med n Co omb a n Ma ch 20 9

Note 2. Initial Public Offering

In June 20 7, the Company comp eted ts n t a pub c offe ng (“IPO”) n wh ch the Company so d 3,220,000 sha es of ts common stock at a p ce of $ 00 pe
sha e The Company ece ved net p oceeds of $32 4 m on, exc ud ng unde w t ng d scounts and comm ss ons, wh ch was eco ded to add t ona pa d- n cap ta The
Company’s common stock commenced t ad ng on the Nasdaq Cap ta Ma ket on June 7, 20 7 unde the t ad ng symbo “SSTI ”
• Immed ate y p o to the IPO, a outstand ng Se es B- conve t b e p efe ed stock wa ants we e emeasu ed at fa va ue us ng the B ack-Scho es mode ,
esu t ng n a oss of $3 7 m on, wh ch was eco ded n othe expense, net
• Upon the c os ng of the IPO, the ent e ba ance of $5 7 m on n conve t b e p efe ed stock wa ant ab ty was ec ass f ed to add t ona pa d- n cap ta
A p efe ed stock wa ants we e conve ted nto common stock wa ants In add t on, the Company ssued to the ead unde w te n the IPO a wa ant to
pu chase up to 84,000 sha es of ts common stock See Note 5, Convertible Preferred Stock Warrants and Common Stock Warrants, fo fu the deta s
ega d ng the wa ants
• Upon the c os ng of the IPO, a sha es of the then-outstand ng conve t b e p efe ed stock we e conve ted nto 4,689,753 sha es of common stock Th s
esu ted n a ec ass f cat on of $42 m on to add t ona pa d- n cap ta
• Offe ng costs ncu ed by the Company we e app ox mate y $ 9 m on, exc ud ng unde w t ng comm ss ons and d scounts, wh ch was eco ded to
add t ona pa d- n cap ta

Note 3. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation
The accompany ng conso dated f nanc a statements have been p epa ed n acco dance w th gene a y accepted account ng p nc p es n the Un ted States of Ame ca
(“U S GAAP”) and app cab e u es and egu at ons of the Secu t es and Exchange Comm ss on (“SEC”) ega d ng f nanc a epo t ng The conso dated f nanc a statements
nc ude the esu ts of the Company and ts who y-owned subs d a y, ShotSpotte (Pty) Ltd and ShotSpotte Co omb a S A S A s gn f cant nte company t ansact ons have
been e m nated du ng conso dat on

In the op n on of management, the accompany ng conso dated f nanc a statements ef ect a no ma ecu ng adjustments necessa y to p esent fa y the f nanc a
pos t on, esu ts of ope at ons, comp ehens ve oss, equ ty statement and cash f ows fo the fu yea 20 9

73
June 2017 Amended and Restated Certificate of Incorporation
P o to the IPO, the Company’s Boa d of D ecto s (the “Boa d”) and stockho de s app oved an amendment (the “Cha te Amendment”) to the P e-IPO Ce t f cate (as
def ned be ow) and an amended and estated ce t f cate of nco po at on (“Post-IPO Ce t f cate”) that became effect ve on June 2, 20 7 The Cha te Amendment nc eased the
numbe of autho zed sha es of common stock f om 8,600,000 to 500,000,000 Unde the Post-IPO Ce t f cate, the Company s autho zed to ssue two c asses of stock to be
des gnated Common Stock and P efe ed Stock See Note 3, Capital Stock, fo fu the deta s ega d ng these c asses of stock

March 2017 Amendment and Restatement of Certificate of Incorporation

On Ma ch 27, 20 7, the Company’s Boa d and stockho de s app oved an amendment and estatement of the Company’s then-ex st ng ce t f cate of nco po at on (as
so amended and estated, the “P e-IPO Ce t f cate”) to p ov de, among othe changes, that each sha e of Se es A-2 conve t b e p efe ed stock wou d automat ca y conve t nto
0 7 5548 sha es of common stock upon the consummat on of an n t a pub c offe ng of the Company’s cap ta stock A sha e and pe sha e data e ated to ba ance sheet and
net oss nfo mat on n the accompany ng conso dated f nanc a statements and the e ated notes have been et oact ve y adjusted to g ve effect to the app cat on of th s
conve s on featu e when p esent ng the Se es A-2 conve t b e p efe ed stock on an as-conve ted bas s

The P e-IPO Ce t f cate a so p ov ded fo ( ) an nc ease n the tota numbe of autho zed sha es to 4,550,000 and (2) an nc ease n the numbe of autho zed sha es
of common stock to 8,600,000, n each case to accommodate the new conve s on featu e fo the outstand ng sha es of Se es A-2 conve t b e p efe ed stock

Use of Estimates
The p epa at on of conso dated f nanc a statements n confo m ty w th U S GAAP equ es management to make est mates and assumpt ons that affect the epo ted
amounts of assets and ab t es, and epo ted amounts of evenues and expenses du ng the epo t ng pe od On an ongo ng bas s, management eva uates ts s gn f cant
est mates nc ud ng the va uat on of accounts ece vab e, the ves and ea zat on of tang b e and ntang b e assets, stock-based compensat on expense, account ng fo evenue
ecogn t on, and ncome taxes Management bases ts est mates on h sto ca expe ence and on va ous othe ma ket-spec f c and e evant assumpt ons t be eves to be
easonab e unde the c cumstances Actua esu ts cou d d ffe f om those est mates and such d ffe ences cou d be mate a to the Company’s f nanc a pos t on and esu ts of
ope at ons

Revenue Recognition
The Company gene ates substant a y a of ts evenues f om the sa e of gunshot detect on subsc pt on se v ces, n wh ch gunshot data gene ated by Company-owned
senso s and softwa e s so d to custome s th ough a c oud-based host ng app cat on fo a spec f ed cont act pe od Typ ca y, the n t a cont act pe od s one to f ve yea s n
ength The subsc pt on cont act s gene a y noncance ab e w thout cause Gene a y, these se v ce a angements do not p ov de the custome w th the ght to take possess on
of the ha dwa e o softwa e suppo t ng the subsc pt on se v ce at any t me A sma po t on of the Company’s evenues a e gene ated f om the de ve y of setup se v ces to
nsta Company-owned senso s n the custome ’s cove age a ea and othe se v ces nc ud ng t a n ng and cense to nteg ate w th th d-pa ty app cat ons

The Company gene a y nvo ces custome s fo 50% of the tota cont act va ue when the cont act s fu y executed and fo the ema n ng 50% when the subsc pt on
se v ce s ope at ona and eady to go ve that s, when the custome has acknow edged the comp et on of a the de ve ab es n the s gned custome acceptance fo m The
Company gene a y nvo ces subsc pt on se v ce enewa s fo 00% of the tota cont act va ue when the enewa cont act s executed Fo the pub c safety so ut on, the p c ng
mode s based on a pe -squa e-m e bas s Fo secu ty so ut ons, the p c ng mode s on a custom zed-s te bas s As a esu t of the p ocess fo nvo c ng cont acts and enewa s
upon execut on, cash f ows f om ope at ons and accounts ece vab e can f uctuate due to t m ng of cont act execut on and t m ng of dep oyment

74
 The Company ecogn zes evenues upon the sat sfact on of pe fo mance ob gat ons At cont act ncept on, the Company assesses the se v ces p om sed n ts
cont acts w th custome s and dent f es a pe fo mance ob gat on fo each p om se to t ansfe to the custome a good o se v ce (o bund e of se v ces) that s d st nct To dent fy
the pe fo mance ob gat ons, the Company cons de s a of the se v ces p om sed n the cont act ega d ess of whethe they a e exp c t y stated o a e mp ed by customa y
bus ness p act ces The Company dete m ned that the subsc pt on se v ces, t a n ng, and censes to nteg ate w th th d-pa ty app cat ons a e each d st nct se v ces that
ep esent sepa ate pe fo mance ob gat ons The setup act v t es a e not d st nct f om the subsc pt on se v ce and a e comb ned nto the subsc pt on se v ce pe fo mance
ob gat on Howeve , setup fees may p ov de a mate a ght to the custome that has nf uence ove the custome s' dec s on to enew A setup fees a e assessed on a
quant tat ve and qua tat ve bas s to dete m ne whethe they ep esent a d st nct pe fo mance ob gat on The tota cont act va ue s a ocated to each pe fo mance ob gat on
dent f ed based on the standa one se ng p ce of the se v ce D scounts a e a ocated p o- ata to the dent f ed pe fo mance ob gat ons Fo cont acts that have an o g na
du at on of one yea o ess, the Company uses the p act ca exped ent app cab e to such cont acts and does not cons de the t me va ue of money

Revenues f om subsc pt on se v ces a e ecogn zed atab y, on a st a ght- ne bas s, ove the te m of the subsc pt on Revenues f om mate a ghts a e ecogn zed
atab y ove the pe od n wh ch they a e dete m ned to p ov de a mate a ght to the custome , wh ch s gene a y th ee yea s Revenues f om t a n ng and censes to nteg ate
w th th d-pa ty app cat ons a e ecogn zed upon de ve y wh ch gene a y occu s when the subsc pt on se v ce s ope at ona and eady to go ve and these amounts a e
mmate a

Subsc pt on enewa fees a e ecogn zed atab y ove the te m of the enewa , wh ch s typ ca y one yea Wh e most custome s e ect to enew the ag eements, n
some cases, they may not be ab e to obta n the p ope app ova s o fund ng to comp ete the enewa p o to exp at on Fo these custome s, the Company stops ecogn z ng
subsc pt on evenues at the end of the cu ent cont act te m, even though se v ces may cont nue to be p ov ded fo a pe od of t me unt the enewa p ocess s comp eted Once
the enewa s comp ete, the Company ecogn zes subsc pt on evenues fo the pe od between the exp at on of the te m of the ag eement and the comp et on of the enewa
p ocess n the month n wh ch the enewa s executed If a custome dec nes to enew ts subsc pt on, then the ema n ng fees f om mate a ghts, f any, a e mmed ate y
ecogn zed

The Company cap ta zes ce ta n nc ementa costs of obta n ng a cont act, wh ch nc udes sa es comm ss ons As the e a e not commensu ate comm ss ons ea ned on
enewa s of the subsc pt on se v ces, the Company cap ta zes comm ss ons e ated to subsc pt on se v ces p ov ded unde both the n t a cont act and enewa pe ods and
amo t zes the cap ta zed comm ss ons on a st a ght- ne bas s ove the custome fe, wh ch s dete m ned to be f ve yea s Fo comm ss ons that a e ea ned on enewa cont acts
w th an o g na du at on of one yea o ess, the Company uses the p act ca exped ent app cab e to such comm ss ons and ecogn zes the comm ss ons mmed ate y as expense
nstead of cap ta z ng Amo t zat on of cap ta zed comm ss ons was $0 5 m on fo the yea ended Decembe 3 , 20 9 and was nc uded n sa es and ma ket ng expense n the
conso dated statements of ope at ons

Costs
Costs nc ude the cost of evenues and cha ges fo mpa ment of p ope ty and equ pment Cost of evenues p ma y nc udes dep ec at on expense assoc ated w th
cap ta zed custome acoust c senso netwo ks, commun cat on expenses, costs e ated to host ng ou se v ce app cat on, costs e ated to ope at ng ou Inc dent Rev ew Cente
(the “IRC”), p ov d ng emote and on-s te custome suppo t and ma ntenance and fo ens c se v ces, ce ta n pe sonne and e ated costs of ope at ons, stock-based compensat on
and a ocated ove head, wh ch nc udes nfo mat on techno ogy, fac ty and equ pment dep ec at on costs

Advertising and Promotion Costs

Adve t s ng and p omot on costs a e expensed as ncu ed Adve t s ng and p omot on costs we e $0 5 m on, $0 6 m on and $0 5 m on fo the yea ended
Decembe 3 , 20 9, 20 8 and 20 7, and we e nc uded n sa es and ma ket ng expense n the conso dated statements of ope at ons

75
Research and Development Costs
Resea ch and deve opment costs a e expensed as ncu ed and cons sted p ma y of sa a es and benef ts, consu tant fees, ce ta n fac t es costs, and othe d ect costs
assoc ated w th the cont nued deve opment of the Company’s so ut ons

Cash and Cash Equivalents

Cash and cash equ va ents nc ude a cash and h gh y qu d nvestments w th an o g na matu ty of th ee months o ess

At Decembe 3 , 20 9 and 20 8, the Company’s cash and cash equ va ents cons sted of cash depos ted n f nanc a nst tut ons

Foreign Currency
The funct ona cu ency fo the Company’s fo e gn subs d a es, ShotSpotte (Pty) Ltd and ShotSpotte Co omb a S A S, s the oca cu ency (South Af can Rand
and Co omb an Peso espect ve y) The assets and ab t es of the subs d a y a e t ans ated nto U S do a s us ng the exchange ate at the end of each ba ance sheet date
Revenues and expenses a e t ans ated at the ave age exchange ates fo the pe od Ga ns and osses f om t ans at ons a e ecogn zed n fo e gn cu ency t ans at on nc uded n
accumu ated othe comp ehens ve ncome ( oss) n the accompany ng conso dated ba ance sheets Fo e gn cu ency exchange ga ns and osses that a e ea zed a e eco ded n
othe expense, net, n the accompany ng conso dated statements of ope at ons

Accounts Receivable, net and Contract Asset

Accounts ece vab e, net cons st of t ade accounts ece vab es f om the Company’s custome s, net of a owance fo doubtfu accounts f deemed necessa y Accounts
ece vab e a e eco ded as the nvo ced amount The Company does not equ e co ate a o othe secu ty fo accounts ece vab e Cont act asset cons st of evenues ecogn zed
n advance of nvo c ng the custome

The Company pe od ca y eva uates the co ectab ty of ts accounts ece vab e and p ov des an a owance fo potent a c ed t osses based on the Company’s
h sto ca expe ence At Decembe 3 , 20 9 and 20 8, the Company d d not have an a owance fo potent a c ed t osses as the e we e no est mated c ed t osses

Concentrations of Risk
Credit Risk F nanc a nst uments that potent a y subject the Company to concent at on of c ed t sk cons sted p ma y of est cted cash, cash and cash equ va ents
and accounts ece vab e f om t ade custome s The Company ma nta ns ts cash depos ts at th ee domest c and two nte nat ona f nanc a nst tut ons The Company s
exposed to c ed t sk n the event of defau t by a f nanc a nst tut on to the extent that cash and cash equ va ents a e n excess of the amount nsu ed by the Fede a
Depos t Insu ance Co po at on The Company gene a y p aces ts cash and cash equ va ents w th h gh-c ed t qua ty f nanc a nst tut ons To date, the Company has not
expe enced any osses on ts cash and cash equ va ents

Concentration of Accounts Receivable At Decembe 3 , 20 9, one custome accounted fo 55% of the Company’s tota accounts ece vab e At Decembe 3 , 20 8
one custome accounted fo 77%, of the Company’s account ece vab e F uctuat ons n accounts ece vab e esu t f om t m ng of the Company’s execut on of cont acts
and co ect on of e ated payments

Concentration of Revenues Fo the yea ended Decembe 3 , 20 9, two custome s accounted fo 20% and 4% of the Company’s evenues, Fo the yea ended
Decembe 3 , 20 8, two custome s accounted fo 22% and 5% of the Company’s evenues Fo the yea ended Decembe 3 , 20 7, one custome accounted fo 8%
of the Company’s evenues

Concentration of Suppliers The Company e es on a m ted numbe of supp e s and cont act manufactu e s In pa t cu a , a s ng e supp e s cu ent y the so e
manufactu e of the Company’s p op eta y senso s

76
Business Acquisitions
The Company a ocates the fa va ue of pu chase cons de at on to the tang b e assets acqu ed, ab t es assumed and ntang b e assets acqu ed based on the
est mated fa va ues The excess of the fa va ue of pu chase cons de at on ove the fa va ues of these dent f ab e assets and ab t es s eco ded as goodw When
dete m n ng the fa va ues of assets acqu ed and ab t es assumed, management makes s gn f cant est mates and assumpt ons, espec a y w th espect to ntang b e assets
Acqu s t on- e ated expenses a e ecogn zed sepa ate y f om the bus ness comb nat on and a e ecogn zed as gene a and adm n st at ve expense as ncu ed

Goodwill
Fo ow ng the acqu s t on of HunchLab (see Note 8, Business Acquisitions), the Company eco ded goodw fo the f st t me n Octobe 20 8 Goodw s tested fo
mpa ment at the epo t ng un t eve (ope at ng segment o one eve be ow an ope at ng segment) on an annua bas s (Octobe ) and between annua tests f an event occu s
o c cumstances change that wou d mo e ke y than not educe the fa va ue of a epo t ng un t be ow ts ca y ng va ue These events o c cumstances cou d nc ude a
s gn f cant change n the bus ness c mate, ega facto s, ope at ng pe fo mance nd cato s, compet t on, o sa e o d spos t on of a s gn f cant po t on of a epo t ng un t We
pe fo med ou f st annua test fo goodw mpa ment as of Octobe , 20 9 and conc uded that no goodw mpa ment cha ge was necessa y S nce ncept on
th ough Decembe 3 , 20 9, the Company d d not have any goodw mpa ment

Intangible Assets
Intang b e assets cons sted of acqu ed patents and cap ta zed ega fees e ated to obta n ng patents, as we as custome e at onsh ps as a esu t f om the Company’s
acqu s t on of HunchLab n 20 8 (see Note 8, Business Acquisitions) Patent assets a e stated at costs, ess accumu ated amo t zat on Custome e at onsh ps a e eco ded at fa
va ue as of the date of the acqu s t on Intang b e assets a e amo t zed on a st a ght- ne bas s, ove the expected usefu ves, wh ch ange f om th ee yea s fo patents and
seven yea s fo custome e at onsh ps

Property and Equipment, net

P ope ty and equ pment, net, s stated at cost, ess accumu ated dep ec at on and amo t zat on The Company dep ec ates p ope ty and equ pment us ng the st a ght- ne
method ove the est mated usefu ves, ang ng f om th ee to f ve yea s Leaseho d mp ovements a e amo t zed ove the sho te of the asset’s usefu fe o the ema n ng
ease te m Costs ncu ed to deve op softwa e fo nte na use and fo the Company’s so ut ons a e cap ta zed and amo t zed ove such softwa e’s est mated usefu fe
Inte na y deve oped softwa e costs cap ta zed du ng a pe ods p esented have not been mate a P ope ty and equ pment, net a so nc udes softwa e techno ogy esu t ng
f om the Company’s acqu s t on of HunchLab, wh ch s eco ded at fa va ue as of the date of the acqu s t on, amo t zed on the st a ght- ne bas s ove f ve yea s

Impairment of Long-Lived Assets

The Company annua y ev ews ong- ved assets fo mpa ment o wheneve events o changes n c cumstances nd cate that the ca y ng amount of an asset may not
be ecove ab e Recove ab ty s measu ed by compa ng the ca y ng amount of the asset to the futu e und scounted net cash f ows wh ch the asset s expected to gene ate If
such assets a e dete m ned to be mpa ed, the mpa ment to be ecogn zed s measu ed as the amount by wh ch the ca y ng amount of the assets exceeds the futu e
und scounted net cash f ows a s ng f om the assets Assets to be d sposed of a e epo ted at the owe of the ca y ng amounts o fa va ue ess cost to se

Royalty Expense
In 2009, the Company ente ed nto a cense ag eement w th a th d pa ty e at ng to a patented gunshot d g ta mag ng system that fac tates nteg at on w th ce ta n
th d-pa ty systems The te ms of the cense ag eement equ e the Company to pay a one-t me fee of $5,000 fo each cense so d to a custome a ow ng the custome to
nteg ate the ShotSpotte se v ce w th a th d-pa ty app cat on, such as a v deo management system, w th a m n mum annua amount due of $75,000 In 20 9, 20 8, and 20 7,
the Company ncu ed on y the $75,000 m n mum amount The cense ag eement enews automat ca y on each subsequent yea un ess t s te m nated n acco dance w th the
ag eement

77
 The oya ty fee due fo each cense so d to a custome s cap ta zed as p ope ty and equ pment and amo t zed ove the est mated usefu fe The d ffe ence n oya ty
fees cap ta zed n p ope ty and equ pment and the m n mum annua payment s c ass f ed as gene a and adm n st at ve expense n the conso dated statements of ope at ons and
was $30,000, $35,000 and $60,000 fo the yea s ended Decembe 3 , 20 9, 20 8, and 20 7, espect ve y

Convertible Preferred Stock Warrants

The Company ssued wa ants exe c sab e fo sha es of Se es B- conve t b e p efe ed stock, o fo sha es of common stock upon the automat c conve s on of a
outstand ng se es of p efe ed stock nto common stock These wa ants we e c ass f ed as a p efe ed stock wa ant ab ty n the conso dated ba ance sheets, athe than
stockho de s’ equ ty, as they met the c te a to be c ass f ed as a de vat ve ab ty The conve t b e p efe ed stock wa ants we e subject to emeasu ement to fa va ue at
each ba ance sheet date and any change n fa va ue s ecogn zed as a component of othe expense, net, n the conso dated statements of ope at ons The Company est mated
the fa va ue of the wa ants us ng an opt on p c ng method (“OPM”) o p obab ty we ghed expected etu n method (“PWERM”) that nco po ates the use of OPM, to a ocate
the est mated va ue of the Company Upon the c os ng of the IPO n 20 7, the conve t b e p efe ed stock wa ant ab ty was ec ass f ed to add t ona pa d- n cap ta A
p efe ed stock wa ants we e conve ted nto common stock wa ants

Fair Value Measurements

The Company uses a th ee- eve h e a chy fo fa va ue measu ements based on the natu e of nputs used n the va uat on of an asset o ab ty as of the measu ement
date The th ee- eve h e a chy p o t zes, w th n the measu ement of fa va ue, the use of ma ket-based nfo mat on ove ent ty-spec f c nfo mat on Fa va ue focuses on an
ex t p ce and s def ned as the p ce that wou d be ece ved to se an asset o pa d to t ansfe a ab ty n an o de y t ansact on between ma ket pa t c pants at the
measu ement date The nputs o methodo ogy used fo va u ng f nanc a nst uments a e not necessa y an nd cat on of the sks assoc ated w th nvest ng n those f nanc a
nst uments The th ee- eve h e a chy fo fa va ue measu ements s def ned as fo ows
Leve I Inputs to the va uat on methodo ogy a e quoted p ces (unadjusted) fo dent ca assets o ab t es n act ve ma kets
Leve II Inputs to the va uat on methodo ogy nc ude quoted p ces fo s m a assets and ab t es n act ve ma kets, and nputs that a e obse vab e fo the asset o
ab ty, e the d ect y o nd ect y, fo substant a y the fu te m of the f nanc a nst ument
Leve III Inputs to the va uat on methodo ogy a e unobse vab e and s gn f cant to the fa va ue measu ement

An asset’s o a ab ty’s catego zat on w th n the va uat on h e a chy s based upon the owest eve of nput that s s gn f cant to the fa va ue measu ement

Stock-Based Compensation
The Company gene a y g ants opt ons to pu chase sha es of ts common stock to ts emp oyees, d ecto s and non-emp oyees fo a f xed numbe of sha es w th an
exe c se p ce equa to the fa va ue of the unde y ng sha es at the g ant date Fa va ue s dete m ned by the Boa d A stock opt on g ants a e accounted fo us ng the fa
va ue method, and stock-based compensat on expense s ecogn zed as the unde y ng opt ons vest wh ch s the equ s te se v ce pe od The Company uses the B ack-Scho es
opt on p c ng mode to measu e the fa va ue of ts stock opt ons

P o to the IPO, g ven the absence of a pub c t ad ng ma ket fo the Company’s common stock, the Boa d cons de ed nume ous object ve and subject ve facto s to
dete m ne the fa va ue of the Company’s common stock each t me stock opt on g ants we e app oved The facto s nc ude, but a e not m ted to ( ) the va uat on of the
Company’s common stock by an un e ated th d pa ty; ( ) the Company’s esu ts of ope at ons, f nanc a pos t on and cap ta esou ces; ( ) cu ent econom c nd cato s and
out ook; ( v) compet t on fo the Company’s so ut ons; and (v) the Company’s ma ket ng methods

78
 The Company est mated the g ant date fa va ue of ts common stock opt ons us ng the fo ow ng assumpt ons

Expected Te m The expected te m ep esents the pe od that the stock-based compensat on awa ds a e expected to be outstand ng S nce the Company d d not have
suff c ent h sto ca nfo mat on to deve op easonab e expectat ons about futu e exe c se behav o , the Company used the s mp f ed method to compute expected te m, wh ch
ef ects the we ghted-ave age of t me-to-vest ng

R sk-F ee Inte est Rate The sk-f ee nte est ate s based on the y e d on U S T easu y y e d cu ve n effect at the g ant date

Expected Vo at ty The expected vo at ty s based on the h sto ca vo at ty of the Company’s stock

D v dend Y e d Expected d v dend y e d s based on ou d v dend po cy at the t me the opt ons we e g anted We do not p an to pay any d v dends n the
fo eseeab e futu e Consequent y, we have h sto ca y used an expected d v dend y e d of ze o

Subsequent to the IPO, the Company uses the ma ket c os ng p ce of ts common stock as t aded on the Nasdaq Cap ta Ma ket to dete m ne fa va ue

The Company gene a y g ants unvested est cted stock un t awa ds to non-emp oyee d ecto s and execut ve management fo a f xed numbe of sha es and a f xed
vest ng schedu e The est cted stock un t awa ds a e va ued us ng the c os ng p ce on the date of g ant

Fo fe tu es a e ecogn zed as and when they occu

Segment Information
The Company has one ope at ng segment w th one bus ness act v ty, p ov d ng gunshot detect on systems The Company’s ch ef ope at ng dec s on make s ts Ch ef
Execut ve Off ce , who manages ope at ons on a conso dated bas s fo pu poses of a ocat ng esou ces

Income Taxes
The Company eco ds ncome taxes n acco dance w th the ab ty method of account ng Defe ed taxes a e ecogn zed fo the est mated taxes u t mate y payab e o
ecove ab e based on enacted tax aw The Company estab shes a va uat on a owance to educe the defe ed tax assets when t s mo e ke y than not that a defe ed tax asset
w not be ea zab e Changes n tax ates a e ef ected n the tax p ov s on as they occu

In account ng fo unce ta nty n ncome taxes, the Company ecogn zes the f nanc a statement benef t of a tax pos t on on y afte dete m n ng that the e evant tax
autho ty wou d mo e ke y than not susta n the pos t on fo ow ng an aud t Fo tax pos t ons meet ng the mo e ke y than not th esho d, the amount ecogn zed n the
conso dated f nanc a statements s the a gest benef t that has a g eate than 50 pe cent ke hood of be ng ea zed upon u t mate sett ement w th the e evant tax
autho ty The Company ecogn zes nte est and pena t es acc ued on any un ecogn zed tax benef ts as a component of ncome tax expense

Net Income (Loss) per Share

Bas c net ncome ( oss) pe sha e s ca cu ated by d v d ng net ncome ( oss) by the we ghted-ave age numbe of common sha es outstand ng du ng the pe od D uted
net ncome ( oss) pe sha e s computed by d v d ng net ncome ( oss) by the we ghted-ave age numbe of common sha es and common stock equ va ents outstand ng du ng
the pe od Common stock equ va ents a e on y nc uded when the effect s d ut ve Common stock equ va ents and unvested est cted stock un ts a e potent a y d ut ve
secu t es and nc ude conve t b e p efe ed stock, wa ants and outstand ng stock opt ons These potent a y d ut ve secu t es a e exc uded f om the computat on of d uted net
ncome ( oss) pe sha e f the nc us on wou d be ant -d ut ve

79
Accounting Pronouncements Recently Adopted
In Feb ua y 20 6, the FASB ssued ASU 20 6-02, Leases (Top c 842) The e have been fu the amendments, nc ud ng p act ca exped ents, w th the ssuance of ASU
20 8-0 n Janua y 20 8, ASU 20 8- n Ju y 20 8 and ASU 20 8-20 n Decembe 20 8 The amended gu dance equ es the ecogn t on of ease assets and ease ab t es
on the ba ance sheet fo those eases w th te ms n excess of 2 months and cu ent y c ass f ed as ope at ng eases D sc osu e of key nfo mat on about eas ng a angements s
equ ed Effect ve Janua y , 20 9, the Company adopted Top c 842 The Company e ected the opt ona t ans t on method wh ch a ows ent t es to cont nue to app y h sto ca
account ng gu dance n the compa at ve pe ods p esented n the yea of adopt on

At t ans t on, essees and esso s may e ect to app y a package of p act ca exped ents pe m tt ng ent t es not to eassess ( ) whethe any exp ed o ex st ng cont acts
a e o conta n eases; ( ) ease c ass f cat on fo any exp ed o ex st ng eases and ( ) whethe n t a d ect costs fo any exp ed o ex st ng eases qua fy fo cap ta zat on
unde the amended gu dance These p act ca exped ents must be e ected as a package and cons stent y app ed The Company has e ected to app y the package of p act ca
exped ents upon adopt on

The Company dete m nes f an a angement s a ease at ncept on The Company’s ope at ng ease fo ts co po ate headqua te s off ce s mpacted by the new
standa d and upon adopt on, the Company ecogn zed a ght-of-use asset of $0 9 m on and e ated ease ab t es tota ng $0 9 m on See Note 8, Leases.
In Ju y 20 7, the FASB ssued ASU 20 7- , Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic
815). The amendments n Pa t I of ASU 20 7- change the c ass f cat on ana ys s of ce ta n equ ty- nked f nanc a nst uments (o embedded featu es) w th down ound
featu es When dete m n ng whethe ce ta n f nanc a nst uments shou d be c ass f ed as ab t es o equ ty nst uments, a down ound featu e no onge p ec udes equ ty
c ass f cat on when assess ng whethe the nst ument s ndexed to an ent ty’s own stock The amendments a so c a fy ex st ng d sc osu e equ ements fo equ ty-c ass f ed
nst uments The Company adopted th s ASU as of Janua y , 20 9 and the adopt on d d not have any mpact on the conso dated f nanc a statements

Recent Accounting Pronouncements Not Yet Effective

In Decembe 20 9, the FASB ssued ASU 20 9- 2, Income Taxes (Topic 740), s mp fy ng the account ng fo ncome taxes by emov ng ce ta n except ons to the
gene a p nc p es The gu dance w be effect ve at the beg nn ng of ou f st qua te of f sca 2022 Ea y adopt on of the amendments s pe m tted We do not expect the
adopt on of th s ASU to have any mpact on the conso dated f nanc a statements

Note 4. Revenue Related Disclosures

As of Decembe 3 , 20 8, the Company had tota sho t-te m and ong-te m defe ed evenue of $24 2 m on Du ng the yea ended Decembe 3 , 20 9, the
Company ecogn zed $23 m on n evenue f om the beg nn ng defe ed evenue ba ance and $ 7 2 m on f om new b ngs, and added $43 m on to tota sho t-te m
and ong-te m defe ed evenue f om new b ngs

As of Janua y , 20 8, upon the adopt on of Account ng Standa ds Cod f cat on (“ASC”) Top c 606, Revenue from Contracts with Customers (“Top c 606”), the
Company had tota sho t-te m and ong-te m defe ed evenue of $ 7 3 m on Du ng the yea ended Decembe 3 , 20 8, the Company ecogn zed $9 7 m on n evenue
f om the beg nn ng defe ed evenue ba ance and $24 8 m on f om new b ngs, and added $4 4 m on to tota sho t-te m and ong-te m defe ed evenue f om new
b ngs

As of Decembe 3 , 20 9, the Company has est mated ema n ng pe fo mance ob gat ons fo cont actua y comm tted evenues of $34 9 m on, $2 6 m on,
$5 5 m on, and $0 7 m on that w be ecogn zed du ng the yea end ng Decembe 3 , 2020, 202 , 2022, and 2023 th ough 2025, espect ve y The t m ng of evenue
ecogn t on nc udes est mates of go- ve dates fo cont acts not yet ve Cont actua y comm tted evenue nc udes defe ed evenue as of Decembe 3 , 20 9 and amounts
unde cont act that w be nvo ced afte Decembe 3 , 20 9

80
Note 10. Financing Arrangements
Credit Agreement
On Septembe 27, 20 8, the Company ente ed nto a C ed t Ag eement w th Umpqua Bank (the “Umpqua C ed t Ag eement”), wh ch a ows the Company to bo ow
up to $ 0 0 m on unde a evo v ng oan fac ty (the “Revo v ng Fac ty”) The Company ntends to use the Revo v ng Fac ty fo gene a wo k ng cap ta pu poses
Bo ow ngs unde the Umpqua C ed t Ag eement a e secu ed by substant a y a of the assets of the Company The Umpqua C ed t Ag eement nc udes a ette of c ed t
subfac ty of up to $3 0 m on Any amounts outstand ng unde the ette of c ed t subfac ty educe the amount ava ab e fo the Company to bo ow unde the Revo v ng
Fac ty

Bo ow ngs unde the Umpqua C ed t Ag eement bea nte est, at the Company’s opt on, at a ate equa to e the ( ) a base ate, wh ch f uctuates da y and s the
g eate of (a) the p me ate n effect as of any date of dete m nat on and (b) the da y LIBOR ate as of such date of dete m nat on p us 0% pe annum, o (2) a LIBOR ate,
wh ch can be fo a pe od of 30, 60 o 90 days at the Company’s opt on and s equa to the pub shed ate n the Wa St eet Jou na fo such 30-, 60- o 90-day pe od two
bus ness days p o to the commencement of such pe od, n each case p us 2 0% pe annum The Company w be equ ed to epay a amounts outstand ng unde the Umpqua
C ed t Ag eement on Septembe 27, 2020 o ea e f the Umpqua C ed t Ag eement s te m nated p o to such date The Umpqua C ed t Ag eement a so nc udes an
uncomm tted nc ementa fac ty p ov s on that wou d a ow the Company, subject to sat sfact on of ce ta n cond t ons, nc ud ng app ova by Umpqua Bank, to nc ease the
Revo v ng Fac ty up to a tota of $25 0 m on

Unde the Umpqua C ed t Ag eement, the Company s subject to va ous negat ve covenants that m t, subject to ce ta n exc us ons, the Company’s ab ty to ncu
ndebtedness, make oans, nvest n o secu e the ob gat ons of othe pa t es, pay o dec a e d v dends, make d st but ons w th espect to the Company’s secu t es, edeem
outstand ng sha es of the Company’s stock, c eate subs d a es, mate a y change the natu e of ts bus ness, ente nto e ated pa ty t ansact ons, engage n me ge s and bus ness
comb nat ons, the acqu s t on o t ansfe of Company assets outs de of the o d na y cou se of bus ness, g ant ens o ente nto co ate a e at onsh ps nvo v ng company assets
o e nco po ate, eo gan ze o d sso ve the Company

The e we e no bo ow ngs outstand ng as of Decembe 3 , 20 9 and 20 8

Notes Payable- 2015 Term Note

Bo ow ngs unde the 20 5 Te m Note bo e nte est at the g eate of ( ) the ave age p me ate n effect du ng each month o ( ) the ave age th ee-month LIBOR ate
du ng such month, p us 2 5% pe annum, p us 7 5% w th a m n mum ate of %, w th nte est on y payments th ough Octobe 20 7, fo owed by 36 equa month y
nsta ments of p nc pa and nte est th ough Octobe 2020, the matu ty date The we ghted ave age nte est ate du ng the yea ended Decembe 3 , 20 7 was and 54%

Fo the yea ended Decembe 3 , 20 7 the Company ecogn zed nte est expense of $ m on, based on the outstand ng ba ance du ng the pe od

Du ng the yea ended Decembe 3 , 20 7, amo t zat on of debt ssuance costs was $ 32,000 Amo t zat on of debt ssuance costs s eco ded n nte est expense n the
conso dated statements of ope at ons

Bo ow ngs unde the 20 5 Te m Note we e secu ed by substant a y a of the assets of the Company Add t ona y, the te ms of the 20 5 Te m Note nc uded ce ta n
f nanc a covenants and va ous negat ve covenants

In Ma ch 20 7, the Company amended the 20 5 Te m Note In connect on w th the amendment of the 20 5 Te m Note, the Company ssued a wa ant to pu chase
76,704 sha es of Se es B- p efe ed stock at an exe c se p ce of $5 8667 pe sha e; howeve , the te ms of the wa ant p ov ded that upon the comp et on of a pub c offe ng
n wh ch the Company a ses at east $25 0 m on n net p oceeds, the numbe of sha es unde y ng the wa ant wou d be educed to 6 ,363 sha es Cons stent w th these
te ms, upon the c os ng of the IPO, the numbe of sha es unde y ng th s wa ant was educed to 6 ,363 sha es, and the wa ant became exe c sab e fo common stock

85
 Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None

Item 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures
Ou management has eva uated, unde the supe v s on and w th the pa t c pat on of ou Ch ef Execut ve Off ce and Ch ef F nanc a Off ce , the effect veness of ou
d sc osu e cont o s and p ocedu es (as def ned n Ru es 3-a- 5(e) and 5d- 5(e) unde the Exchange Act) as of the end of the pe od cove ed by th s epo t Based on th s
eva uat on, ou Ch ef Execut ve Off ce and Ch ef F nanc a Off ce have conc uded that as of Decembe 3 , 20 9, ou d sc osu e cont o s and p ocedu es we e effect ve to
p ov de easonab e assu ance that the nfo mat on we a e equ ed to f e o subm t unde the Exchange Act s eco ded, p ocessed, summa zed and epo ted w th n the t me
pe ods spec f ed n the SEC’s u es and fo ms, and that such nfo mat on s accumu ated and commun cated to ou management, nc ud ng ou Ch ef Execut ve Off ce and
Ch ef F nanc a Off ce , to a ow t me y dec s ons ega d ng equ ed d sc osu e

Changes in Internal Control over Financial Reporting

The e we e no changes n ou nte na cont o ove f nanc a epo t ng (as def ned n Exchange Act Ru e 3a- 5(f)) du ng the qua te ended Decembe 3 , 20 9 that
have mate a y affected, o a e easonab y ke y to mate a y affect, ou nte na cont o ove f nanc a epo t ng

Inherent Limitations on Effectiveness of Controls

Ou management, nc ud ng ou p nc pa execut ve off ce and p nc pa f nanc a off ce , does not expect that ou d sc osu e cont o s and p ocedu es o ou nte na
cont o ove f nanc a epo t ng w p event o detect a e o s and a f aud A cont o system, no matte how we conce ved and ope ated, can p ov de on y easonab e, not
abso ute, assu ance that the object ves of the cont o system a e met Because of the nhe ent m tat ons n a cont o systems, no eva uat on of cont o s can p ov de abso ute
assu ance that a cont o ssues and nstances of f aud, f any, w th n the Company have been detected The des gn of any system of cont o s a so s based n pa t upon ce ta n
assumpt ons about the ke hood of futu e events, and the e can be no assu ance that any des gn w succeed n ach ev ng ts stated goa s unde a potent a futu e cond t ons
Ove t me, cont o s may become nadequate because of changes n cond t ons, o the deg ee of comp ance w th the po c es o p ocedu es may dete o ate Because of the
nhe ent m tat ons n a cost-effect ve cont o system, m sstatements due to e o o f aud may occu and not be detected

Management’s Report on Internal Control over Financial Reporting

Ou management s espons b e fo estab sh ng and ma nta n ng adequate nte na cont o ove f nanc a epo t ng, as def ned n Ru e 3a- 5(f) and Ru e 5d- 5(f) of
the Exchange Act Inte na cont o ove f nanc a epo t ng cons sts of po c es and p ocedu es that ( ) pe ta n to the ma ntenance of eco ds that, n easonab e deta , accu ate y
and fa y ef ect the t ansact ons and d spos t ons of ou assets; (2) a e des gned and ope ated to p ov de easonab e assu ance ega d ng the e ab ty of ou f nanc a epo t ng
and ou p ocess fo the p epa at on of f nanc a statements fo exte na pu poses n acco dance w th gene a y accepted account ng p nc p es and that ou ece pts and
expend tu es a e be ng made on y n acco dance w th autho zat ons of ou management and d ecto s; and (3) p ov de easonab e assu ance ega d ng p event on o t me y
detect on of unautho zed acqu s t on, use o d spos t on of ou assets that cou d have a mate a effect on the f nanc a statements Ou management eva uated the effect veness
of ou nte na cont o ove f nanc a epo t ng us ng the c te a set fo th by the Comm ttee of Sponso ng O gan zat ons of the T eadway Comm ss on n Inte na Cont o -
Integ ated F amewo k (20 3) Based on the esu ts of ou eva uat on, ou management has conc uded that ou nte na cont o ove f nanc a epo t ng was effect ve as of
Decembe 3 , 20 9

Item 9B. OTHER INFORMATION

None

98
 PART III.

We w f e a def n t ve P oxy Statement fo ou Annua Meet ng (ou “P oxy Statement”) w th the SEC, pu suant to Regu at on 4A, not ate than 20 days afte the
end of ou f sca yea Acco d ng y, ce ta n nfo mat on equ ed by Pa t III has been om tted unde Gene a Inst uct on G(3) to Fo m 0-K On y those sect ons of the P oxy
Statement that spec f ca y add ess the tems set fo th he e n a e nco po ated by efe ence

Item 10. DIRECTORS , EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The nfo mat on equ ed by th s Item 0 s nco po ated he e n by efe ence to the sect ons of ou P oxy Statement unde the capt ons “Info mat on Rega d ng the
Boa d of D ecto s and Co po ate Gove nance”, “Execut ve Off ce s”

Item 11. E XECUTIVE COMPENSATION

The nfo mat on equ ed by th s Item s nco po ated he e n by efe ence to the sect ons of ou P oxy Statement unde the capt on “Execut ve and D ecto
Compensat on”

Item 12. S ECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The nfo mat on equ ed by th s Item 2 s nco po ated he e n by efe ence to the sect ons of ou P oxy Statement unde the capt on “Secu ty Owne sh p of Ce ta n
Owne s and Management”

Item 13. CERTAI N RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The nfo mat on equ ed by th s Item 3 s nco po ated he e n by efe ence to the sect ons of ou P oxy Statement unde the capt ons “T ansact ons w th Re ated
Pe sons and Indemn f cat on”, “Info mat on Rega d ng The Boa d of D ecto s and Co po ate Gove nance”

Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The nfo mat on equ ed by th s Item 4 s nco po ated he e n by efe ence to the sect on of ou P oxy Statement unde the capt on “P nc pa Accountant Fees and
Se v ces”

99
 PART IV.

Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)(1) Consolidated Financial Statements
We have f ed the conso dated f nanc a statements sted n the Index to Conso dated F nanc a Statements, Schedu es, and Exh b ts nc uded n Pa t II, Item 8,
“F nanc a Statements and Supp ementa y Data” of th s Annua Repo t on Fo m 0-K

(a)(2) Financial Statements Schedules

A f nanc a statements schedu es have been om tted because they a e not app cab e, not mate a , o the equ ed nfo mat on s shown n the Index to Conso dated
F nanc a Statements nc uded n Pa t II, Item 8, “F nanc a Statements and Supp ementa y Data” of th s Annua Repo t on Fo m 0-K

(a)(3) Exhibits
See the Exh b t Index be ow n th s Annua Repo t on Fo m 0-K The exh b ts sted n the Exh b t Index be ow a e f ed o nco po ated by efe ence as pa t of th s
Annua Repo t on Fo m 0-K

Item 16. FORM 10-K SUMMARY

None

00
 Exhibit 4.5

DESCRIPTION OF CAPITAL STOCK

The fo ow ng desc p on of ou cap a s ock, ce a n p ov s ons of ou amended and es a ed ce f ca e of nco po a on and amended and es a ed by aws, and ce a n p ov s ons of De awa e
aw a e summa es You shou d a so efe o he amended and es a ed ce f ca e of nco po a on and he amended and es a ed by aws, wh ch a e f ed as exh b s o he Annua Repo on
Fo m 10-K of wh ch h s Exh b 4 6 s pa

General

Ou amended and es a ed ce f ca e of nco po a on au ho zes us o ssue up o 500,000,000 sha es of common s ock, $0 001 pa va ue pe sha e, and 20,000,000 sha es of p efe ed s ock,
$0 001 pa va ue pe sha e, a of wh ch sha es of p efe ed s ock a e undes gna ed

Common Stock

Voting Rights

Each ho de of ou common s ock s en ed o one vo e fo each sha e on a ma e s subm ed o a vo e of he s ockho de s, nc ud ng he e ec on of d ec o s Unde ou amended and
es a ed ce f ca e of nco po a on and amended and es a ed by aws, ou s ockho de s do no have cumu a ve vo ng gh s Because of h s, he ho de s of a ma o y of he sha es of
common s ock en ed o vo e n any e ec on of d ec o s a e ab e o e ec a of he d ec o s s and ng fo e ec on, f hey shou d so choose

Dividends

Sub ec o p efe ences ha may be app cab e o any hen-ou s and ng p efe ed s ock, ho de s of common s ock a e en ed o ece ve a ab y hose d v dends, f any, as may be dec a ed f om
me o me by he boa d of d ec o s ou of ega y ava ab e funds

Liquidation

In he even of ou qu da on, d sso u on o w nd ng up, ho de s of common s ock w be en ed o sha e a ab y n he ne asse s ega y ava ab e fo d s bu on o s ockho de s af e he
paymen of a of ou deb s and o he ab es and he sa sfac on of any qu da on p efe ence g an ed o he ho de s of any hen-ou s and ng sha es of p efe ed s ock

Rights and Preferences

Ho de s of common s ock have no p eemp ve, conve s on o subsc p on gh s and he e a e no edemp on o s nk ng fund p ov s ons app cab e o he common s ock The gh s,
p efe ences and p v eges of he ho de s of common s ock a e sub ec o, and may be adve se y affec ed by, he gh s of he ho de s of sha es of any se es of p efe ed s ock ha we may
des gna e n he fu u e

Preferred Stock

Ou boa d of d ec o s has he au ho y, w hou fu he ac on by ou s ockho de s, o ssue up o 20,000,000 sha es of p efe ed s ock n one o mo e se es, o es ab sh f om me o me he
numbe of sha es o be nc uded n each such se es, o f x he gh s, p efe ences and p v eges of he sha es of each who y un ssued se es and any qua f ca ons, m a ons o es c ons
he eon, and o nc ease o dec ease he numbe of sha es of any such se es, bu no be ow he numbe of sha es of such se es hen ou s and ng

Ou boa d of d ec o s may au ho ze he ssuance of p efe ed s ock w h vo ng o conve s on gh s ha cou d adve se y affec he vo ng powe o o he gh s of he ho de s of ou common
s ock The pu pose of au ho z ng ou boa d of d ec o s o ssue p efe ed s ock and de e m ne s gh s and p efe ences s o e m na e de ays assoc a ed w h a s ockho de vo e on spec f c
ssuances The ssuance of p efe ed s ock, wh e p ov d ng f ex b y n connec on w h poss b e acqu s ons and o he co po a e pu poses, cou d, among o he h ngs, have he effec of
de ay ng, defe ng o p even ng a change n con o of us and may adve se y affec he ma ke p ce of ou common s ock and he vo ng and o he gh s of he ho de s of ou common s ock
I s no poss b e o s a e he ac ua effec of he ssuance of any sha es of p efe ed s ock on he gh s of ho de s of common s ock un he boa d of d ec o s de e m nes he spec f c gh s
a ached o ha p efe ed s ock

We have no p esen p ans o ssue any sha es of p efe ed s ock

Warrants

As of Decembe 31, 2019, wa an s o pu chase an agg ega e of 134,716 sha es of ou common s ock a a we gh ed-ave age exe c se p ce of $8 2306 pe sha e we e ou s and ng The wa an s
con a n a p ov s on fo he ad us men of he exe c se p ce and he numbe of sha es ssuab e upon he exe c se of he app cab e wa an n he even of ce a n s ock d v dends, s ock sp s,
eo gan za ons, ec ass f ca ons and conso da ons Fo mo e nfo ma on, see No e 15,“Conve b e P efe ed S ock Wa an s and Common S ock Wa an s" o he No es o he Conso da ed
F nanc a S a emen s fo mo e nfo ma on
Registration Rights

Ce a n ho de s of sha es of ou common s ock a e en ed o ce a n gh s w h espec o eg s a on of such sha es unde he Secu es Ac pu suan o he e ms of an nves o s' gh s
ag eemen These sha es a e co ec ve y efe ed o he e n as eg s ab e secu es

The nves o s' gh s ag eemen p ov des he ho de s of eg s ab e secu es w h demand, p ggyback and S-3 eg s a on gh s as desc bed mo e fu y be ow

Demand Registration Rights

The ho de s of a ma o y of he eg s ab e secu es hen ou s and ng have he gh o make up o wo demands ha we f e a eg s a on s a emen unde he Secu es Ac cove ng he
eg s a on of he eg s ab e secu es hen ou s and ng and w h an an c pa ed agg ega e offe ng p ce of a eas $10 0 m on, ne of unde w ng d scoun s and expenses, sub ec o
spec f ed excep ons

Piggyback Registration Rights

If we eg s e any secu es fo pub c sa e, he ho de s of ou eg s ab e secu es hen ou s and ng w each be en ed o no ce of he eg s a on and w have he gh o nc ude he
sha es n he eg s a on s a emen The unde w e s of any unde w en offe ng w have he gh o m he numbe of sha es hav ng eg s a on gh s o be nc uded n he eg s a on
s a emen , p ov ded ha he eg s a on does no nc ude sha es of any o he se ng s ockho de If he eg s a on does no nc ude sha es of any o he se ng s ockho de , any o a of he
eg s ab e secu es may be exc uded f om such eg s a on

Registration on Form S-3

If we a e e g b e o f e a eg s a on s a emen on Fo m S-3, he ho de s have he gh o demand ha we f e eg s a on s a emen s on Fo m S-3 p ov ded, ha a eas 10% of he

eg s ab e secu es hen ou s and ng make he demand eques and he agg ega e amoun of secu es o be so d unde he eg s a on s a emen s a eas $3 0 m on, ne of unde w ng
d scoun s and comm ss ons We a e no ob ga ed o effec a demand fo eg s a on on Fo m S-3 by ho de s of ou eg s ab e secu es mo e han w ce du ng any 12-mon h pe od The
gh o have such sha es eg s e ed on Fo m S-3 s fu he sub ec o o he spec f ed cond ons and m a ons

Expenses of Registration

We w pay a expenses e a ng o any demand, p ggyback o Fo m S-3 eg s a on, o he han unde w ng d scoun s and comm ss ons, sub ec o spec f ed cond ons and m a ons

Termination of Registration Rights

The eg s a on gh s w e m na e upon he ea e of he fo ow ng o occu ( ) such me af e h s offe ng n wh ch he ho de of eg s ab e secu es ho ds one pe cen o ess of ou

common s ock and a eg s ab e secu es he d by such ho de (and oge he w h any aff a e of he ho de w h whom such ho de mus agg ega e s sa es unde Ru e 144 of he Secu es
Ac ) can be so d n any h ee-mon h pe od w hou eg s a on n comp ance w h Ru e 144 of he Secu es Ac o ( ) af e he consumma on of a "deemed qu da on even ", as desc bed
and def ned n ou amended and es a ed ce f ca e of nco po a on, as amended f om me o me

Anti-Takeover Provisions
Anti-Takeover Statute

We a e sub ec o Sec on 203 of he De awa e Gene a Co po a on Law, wh ch gene a y p oh b s a pub c y he d De awa e co po a on f om engag ng n any bus ness comb na on w h any
n e es ed s ockho de fo a pe od of h ee yea s af e he da e ha such s ockho de became an n e es ed s ockho de , w h he fo ow ng excep ons
• befo e such da e, he boa d of d ec o s of he co po a on app oved e he he bus ness comb na on o he ansac on ha esu ed n he s ockho de becom ng an n e es ed
s ockho de
• upon comp e on of he ansac on ha esu ed n he s ockho de becom ng an n e es ed s ockho de , he n e es ed s ockho de owned a eas 85% of he vo ng s ock of he
co po a on ou s and ng a he me he ansac on began, exc ud ng fo pu poses of de e m n ng he vo ng s ock ou s and ng, bu no he ou s and ng vo ng s ock owned by
he n e es ed s ockho de , hose sha es owned (1) by pe sons who a e d ec o s and a so off ce s and (2) emp oyee s ock p ans n wh ch emp oyee pa c pan s do no have he
gh o de e m ne conf den a y whe he sha es he d sub ec o he p an w be ende ed n a ende o exchange offe o
• on o af e such da e, he bus ness comb na on s app oved by he boa d of d ec o s and au ho zed a an annua o spec a mee ng of he s ockho de s, and no by w en
consen , by he aff ma ve vo e of a eas 66 2/3% of he ou s and ng vo ng s ock ha s no owned by he n e es ed s ockho de
In gene a , Sec on 203 def nes a "bus ness comb na on" o nc ude he fo ow ng

• any me ge o conso da on nvo v ng he co po a on and he n e es ed s ockho de any sa e, ansfe , p edge o o he d spos on of 10% o mo e of he asse s of he
co po a on nvo v ng he n e es ed s ockho de sub ec o ce a n excep ons, any ansac on ha esu s n he ssuance o ansfe by he co po a on of any s ock of he
co po a on o he n e es ed s ockho de any ansac on nvo v ng he co po a on ha has he effec of nc eas ng he p opo ona e sha e of he s ock o any c ass o se es of
he co po a on benef c a y owned by he n e es ed s ockho de o he ece p by he n e es ed s ockho de of he benef of any oans, advances, gua an ees, p edges o o he
f nanc a benef s by o h ough he co po a on

In gene a , Sec on 203 def nes an " n e es ed s ockho de " as an en y o pe son who, oge he w h he pe son's aff a es and assoc a es, benef c a y owns, o w h n h ee yea s p o o he
me of de e m na on of n e es ed s ockho de s a us d d own, 15% o mo e of he ou s and ng vo ng s ock of he co po a on

Anti-Takeover Effects of Certain Provisions of our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws

Ou amended and es a ed ce f ca e of nco po a on p ov des fo ou boa d of d ec o s o be d v ded n o h ee c asses w h s agge ed h ee-yea e ms On y one c ass of d ec o s s e ec ed
a each annua mee ng of ou s ockho de s, w h he o he c asses con nu ng fo he ema nde of he espec ve h ee-yea e ms Because ou s ockho de s do no have cumu a ve vo ng
gh s, s ockho de s ho d ng a ma o y of he sha es of common s ock ou s and ng w be ab e o e ec a of ou d ec o s Ou amended and es a ed ce f ca e of nco po a on and amended
and es a ed by aws a so p ov de ha d ec o s may be emoved by he s ockho de s on y fo cause upon he vo e of a ma o y of ou ou s and ng common s ock Fu he mo e, he au ho zed
numbe of d ec o s may be changed on y by eso u on of he boa d of d ec o s, and vacanc es and new y c ea ed d ec o sh ps on he boa d of d ec o s may, excep as o he w se equ ed by
aw o de e m ned by he boa d, on y be f ed by a ma o y vo e of he d ec o s hen se v ng on he boa d, even hough ess han a quo um

Ou amended and es a ed ce f ca e of nco po a on and amended and es a ed by aws a so p ov de ha a s ockho de ac ons mus be effec ed a a du y ca ed mee ng of s ockho de s Ou
amended and es a ed by aws a so p ov des ha on y ou cha man of he boa d, ch ef execu ve off ce o he boa d of d ec o s pu suan o a eso u on adop ed by a ma o y of he o a
numbe of au ho zed d ec o s may ca a spec a mee ng of s ockho de s

Ou amended and es a ed by aws a so p ov des ha s ockho de s seek ng o p esen p oposa s befo e ou annua mee ng of s ockho de s o o nom na e cand da es fo e ec on as d ec o s a
a mee ng of s ockho de s mus p ov de me y advance no ce n w ng, and, sub ec o app cab e aw, w spec fy equ emen s as o he fo m and con en of a s ockho de 's no ce

Ou amended and es a ed ce f ca e of nco po a on and amended and es a ed by aws a so p ov de ha he s ockho de s canno amend many of he p ov s ons desc bed above excep by a
vo e of a ma o y of ou ou s and ng common s ock

The comb na on of hese p ov s ons make mo e d ff cu fo ou ex s ng s ockho de s o ep ace ou boa d of d ec o s as we as fo ano he pa y o ob a n con o of us by ep ac ng ou
boa d of d ec o s S nce ou boa d of d ec o s has he powe o e a n and d scha ge ou off ce s, hese p ov s ons cou d a so make mo e d ff cu fo ex s ng s ockho de s o ano he pa y
o effec a change n managemen In add on, he au ho za on of undes gna ed p efe ed s ock makes poss b e fo ou boa d of d ec o s o ssue p efe ed s ock w h vo ng o o he gh s
o p efe ences ha cou d mpede he success of any a emp o change ou con o

These p ov s ons a e n ended o enhance he ke hood of con nued s ab y n he compos on of ou boa d of d ec o s and s po c es and o d scou age coe c ve akeove p ac ces and
nadequa e akeove b ds These p ov s ons a e a so des gned o educe ou vu ne ab y o hos e akeove s and o d scou age ce a n ac cs ha may be used n p oxy f gh s Howeve , such
p ov s ons cou d have he effec of d scou ag ng o he s f om mak ng ende offe s fo ou sha es and may have he effec of de ay ng changes n ou con o o managemen As a consequence,
hese p ov s ons may a so nh b f uc ua ons n he ma ke p ce of ou s ock ha cou d esu f om ac ua o umo ed akeove a emp s We be eve ha he benef s of hese p ov s ons,
nc ud ng nc eased p o ec on of ou po en a ab y o nego a e w h he p oponen of an unf end y o unso c ed p oposa o acqu e o es uc u e ou company, ou we gh he
d sadvan ages of d scou ag ng akeove p oposa s, because nego a on of akeove p oposa s cou d esu n an mp ovemen of he e ms

Choice of Forum

Ou amended and es a ed ce f ca e of nco po a on p ov des ha he Cou of Chance y of he S a e of De awa e w be he exc us ve fo um fo ( ) any de va ve ac on o p oceed ng
b ough on ou beha f ( ) any ac on asse ng a b each of f duc a y du y ( ) any ac on asse ng a c a m aga ns us a s ng unde he De awa e Gene a Co po a on Law ( v) any ac on
ega d ng ou amended and es a ed ce f ca e of nco po a on o ou amended and es a ed by aws o (v) any ac on asse ng a c a m aga ns us ha s gove ned by he n e na affa s
doc ne Ou amended and es a ed ce f ca e of nco po a on fu he p ov des ha he fede a d s c cou s of he Un ed S a es of Ame ca w be he exc us ve fo um fo eso v ng any
comp a n asse ng a cause of ac on a s ng unde he Secu es Ac p ov ded howeve , ha n gh of he De awa e Chance y Cou ’s op n on ssued on Decembe 19, 2018 n Sciabacucchi
v. Salzberg, C A No 2017-0931-JTL, wh ch s cu en y be ng appea ed o he De awa e Sup eme Cou , he Company does no n end o enfo ce h s fede a fo um se ec on p ov s on wh e
he appea s n p ocess
Transfer Agent and Registrar

The ansfe agen and eg s a fo ou common s ock s Compu e sha e L m ed

Listing

Ou common s ock s cu en y s ed on he NASDAQ Cap a Ma ke unde he ad ng symbo "SSTI "

 EXHIBIT 10.1

SHOTSPOTTER, INC.

AMENDED AND RESTATED NONEMPLOYEE DIRECTOR COMPENSATION POLICY

ADOPTED BY THE BOARD OF DIRECTORS: MARCH 6, 2020

1. GENERAL

This ShotSpotter, Inc. Amended and Restated Nonemployee Director Compensation Policy (the “ Policy”) is designed to provide for the
compensation of each member of the board of directors (the “Board”) of ShotSpotter, Inc. (the “ Company”) who is not an employee of the Company or
any of its subsidiaries (each, a “Nonemployee Director”). The Policy is effective as of January 1, 2020 and will continue in effect until its termination
by the Board. The Policy replaces and supersedes any and all compensation policies or programs previously established or maintained by the Company
with respect to Nonemployee Directors; provided, however, that any options or restricted stock units (“RSUs”) outstanding on such effective date shall
not be affected by this Policy and shall continue to be governed by the grant notice, agreement and equity incentive plan relating to such options or
RSUs.

2. ADMINISTRATION

The Board, or any committee to whom the Board delegates the requisite authority, will administer the Policy. The Board (or such committee)
will have the sole discretion and authority to administer, interpret, amend and terminate the Policy, and the decisions of the Board (or such committee)
will be final and binding on all persons having an interest in the Policy.

3. ELIGIBILITY

Each Nonemployee Director will be eligible to receive the compensation set forth in the Policy in accordance with the terms of the
Policy. Such compensation will be paid or granted, as applicable, automatically and without further action of the Board or any Board committee to each
Nonemployee Director.

4. CASH RETAINERS

Commencing as of January 1, 2020, each Nonemployee Director is eligible to receive cash retainers at the applicable rates set forth in the
following table for each full year of service as (i) a chairperson and/or member of the Board and (ii) a chairperson of a committee of the Board
(“Committee”):

Role Annual Retainer Rate

Board Chair $55,000
Member (not Chair) $35,000
Audit Committee Chair $15,000
Member (not Chair) $7,000
Compensation Committee Chair $10,000
Member (not Chair) $5,000
Nominating and Corporate Governance Committee Chair $7,500
Member (not Chair) $3,000

Each Nonemployee Director will be eligible to receive each type of retainer set forth in the table above that is applicable to such Nonemployee
Director. Retainer payments will be made quarterly in arrears on or before the

48746438 v4
last business day of each calendar qu arter and will be pro rated for partial quarters of service based on the number of days served in the quarter divided
by the number of days in the quarter.

5. RSU AWARDS

(a) Initial AwardS . Each Nonemployee Director elected to the Board after this Policy is adopted, other than at an annual meeting of
stockholders (a “New Director”), will be eligible to receive an RSU award (an “ Initial Award”) based on the dollar amounts set forth in the following
table, multiplied by a fraction, the numerator of which is the number of days that will elapse between and including the date of his or her appointment
and the first anniversary of the previous annual meeting of stockholders, and the denominator of which is 365:

Role Dollar Value of Initial Award

Board Chair $150,000, subject to reduction as provided below
Member (not Chair) $100,000

If a New Director is appointed as the chairperson of the Board and the chairperson of any Committee(s) in connection with his or her initial election to
the Board, the dollar value of his or her Initial Award in respect of being chairperson of the Board will be decreased by the cash retainer amount(s)
applicable to the chairperson role(s) of such Committee(s) (e.g., if the chairperson of the Board is also the chairperson of the Compensation Committee,
the dollar value of the Annual Award associated with serving on as the chairperson of the Board will be reduced from $150,000 to $140,000). The date
of grant of Initial Awards will be the effective date of such New Director’s appointment to the Board or, if such date is within a closed trading window
under the Company’s Policy Regarding Stock Trading by Officers, Directors and Other Designated Employees, the next business day on which the
trading window is open.

(b) ANNUAL AWARDS . On the date of each annual meeting of stockholders, each Nonemployee Director in office immediately after
such meeting will be eligible to receive an RSU award (an “Annual Award ”) for service as a Nonemployee Director based on the dollar amounts set
forth in the following table:

Role Dollar Value of Annual Award

Board Chair $150,000, subject to reduction as provided below
Member (not Chair) $100,000

If, on the date of grant of an Annual Award, the chairperson of the Board is also the chairperson of any Committee(s), the dollar value of his or her
Annual Award in respect of being chairperson of the Board will be decreased by the cash retainer amount(s) applicable to the chairperson role(s) of such
Committee(s) (e.g., if the chairperson of the Board is also the chairperson of the Compensation Committee, the dollar value of the Annual Award
associated with serving on as the chairperson of the Board will be reduced from $150,000 to $140,000). The date of grant of Annual Awards will be the
date of the applicable annual meeting of stockholders.

(c) NUMBER OF SHARES SUBJECT TO RSU AWARDS. The number of shares subject to an Initial Award or Annual Award (either, an
“RSU Award”) will be equal to (i) the applicable dollar amount determined pursuant to Section 5(a) or 5(b) above, divided by (ii) the closing price of the
Company’s common stock on the date of grant, rounded down to the nearest whole share; provided, however, that the number of shares subject to any
RSU Award may be reduced to the extent necessary to ensure that the Company’s compensation of Nonemployee Directors does not exceed the limit set
forth in Section 3(e) of the Company’s 2017 Equity Incentive Plan (the “Plan”).

148746438 v4
 (d) Other Terms of RSU Awards. Each RSU Award will be granted under the Plan and will be subject to the terms of the Plan, the
applicable award agreement and this Policy. Each RSU Award will vest on the earlier of (i) the first anniversary of the date of grant and (ii) the date of
the next annual meeting of stockholders. In addition, the vesting of all RSU Awards will accelerate in full upon a Change in Control (as defined in the
Plan) or immediately prior to the effectiveness of a Nonemployee Director’s resignation or removal (and contingent upon the effectiveness of a Change
in Control) in the event that the Nonemployee Director is required to resign his or her position as a Nonemployee Director as a condition of the Change
in Control or the Nonemployee Director is removed from his or her position as a Nonemployee Director in connection with the Change in
Control. Vesting will cease upon the termination of the Nonemployee Director’s service as a member of the Board and any RSUs subject to such RSU
Award that are unvested on the date of such termination will be automatically forfeited by such Nonemployee Director on such date.

6. EXPENSES

Each Nonemployee Director will be eligible for reimbursement from the Company for all reasonable out of pocket expenses incurred in
connection with attending in person meetings of the Board or any Committee To the extent that any taxable reimbursements are provided to any
Nonemployee Director, they will be provided in accordance with Section 409A of the Internal Revenue Code of 1986, including, but not limited to, the
following provisions: (i) the amount of any such expenses eligible for reimbursement during such individual’s taxable year may not affect the expenses
eligible for reimbursement in any other taxable year; (ii) the reimbursement of an eligible expense must be made no later than the last day of such
individual’s taxable year that immediately follows the taxable year in which the expense was incurred; and (iii) the right to any reimbursement may not
be subject to liquidation or exchange for another benefit.

148746438 v4
 Exhibit 23.1

CONSENT OF NDEPENDENT REG STERED PUBL C ACCOUNT NG F RM

We consent to the ncorporat on by reference n the Reg strat on Statements on Forms S 8 (F le Nos 333 226053 and 333 218712) and Form S 3 (F le No
333 226052) of ShotSpotter nc of our report dated March 12 2020 relat ng to the consol dated f nanc al statements wh ch appears n th s annual report on
Form 10 K for the year ended December 31 2019

/s/ BAKER T LLY V RCHOW KRAUSE LLP

M nneapol s M nnesota
March 12 2020
 Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Ra ph A C a k, ce t fy that
I have ev ewed th s Annua Repo t on Fo m 0-K of ShotSpotte , Inc ;
2 Based on my know edge, th s epo t does not conta n any unt ue statement of a mate a fact o om t to state a mate a fact necessa y to make the statements made, n
ght of the c cumstances unde wh ch such statements we e made, not m s ead ng w th espect to the pe od cove ed by th s epo t;
3 Based on my know edge, the f nanc a statements, and othe f nanc a nfo mat on nc uded n th s epo t, fa y p esent n a mate a espects the f nanc a
cond t on, esu ts of ope at ons and cash f ows of the eg st ant as of, and fo , the pe ods p esented n th s epo t;
4 The eg st ant's othe ce t fy ng off ce and I a e espons b e fo estab sh ng and ma nta n ng d sc osu e cont o s and p ocedu es (as def ned n Exchange Act Ru es
3a- 5(e) and 5d- 5(e)) and nte na cont o ove f nanc a epo t ng (as def ned n Exchange Act Ru es 3a- 5(f) and 5d- 5(f)) fo the eg st ant and have
(a) Des gned such d sc osu e cont o s and p ocedu es, o caused such d sc osu e cont o s and p ocedu es to be des gned unde ou supe v s on, to ensu e that
mate a nfo mat on e at ng to the eg st ant, nc ud ng ts conso dated subs d a es, s made known to us by othe s w th n those ent t es, pa t cu a y
du ng the pe od n wh ch th s epo t s be ng p epa ed;
(b) Des gned such nte na cont o ove f nanc a epo t ng, o caused such nte na cont o ove f nanc a epo t ng to be des gned unde ou supe v s on, to
p ov de easonab e assu ance ega d ng the e ab ty of f nanc a epo t ng and the p epa at on of f nanc a statements fo exte na pu poses n acco dance
w th gene a y accepted account ng p nc p es;
(c) Eva uated the effect veness of the eg st ant's d sc osu e cont o s and p ocedu es and p esented n th s epo t ou conc us ons about the effect veness of the
d sc osu e cont o s and p ocedu es, as of the end of the pe od cove ed by th s epo t based on such eva uat on; and
(d) D sc osed n th s epo t any change n the eg st ant's nte na cont o ove f nanc a epo t ng that occu ed du ng the eg st ant's most ecent f sca qua te
(the eg st ant's fou th f sca qua te n the case of an annua epo t) that has mate a y affected, o s easonab y ke y to mate a y affect, the eg st ant's
nte na cont o ove f nanc a epo t ng; and
5 The eg st ant's othe ce t fy ng off ce s and I have d sc osed, based on ou most ecent eva uat on of nte na cont o ove f nanc a epo t ng, to the eg st ant's
aud to s and the aud t comm ttee of the eg st ant's boa d of d ecto s (o pe sons pe fo m ng the equ va ent funct ons)
(a) A s gn f cant def c enc es and mate a weaknesses n the des gn o ope at on of nte na cont o ove f nanc a epo t ng wh ch a e easonab y ke y to
adve se y affect the eg st ant's ab ty to eco d, p ocess, summa ze and epo t f nanc a nfo mat on; and
(b) Any f aud, whethe o not mate a , that nvo ves management o othe emp oyees who have a s gn f cant o e n the eg st ant's nte na cont o ove
f nanc a epo t ng

Date Ma ch 2, 2020 /s/ Ra ph A C a k

Ra ph A C a k
Ch ef Execut ve Off ce
 Exhibit 31.2

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, A an Stewa t, ce t fy that
I have ev ewed th s Annua Repo t on Fo m 0-K of ShotSpotte , Inc ;
2 Based on my know edge, th s epo t does not conta n any unt ue statement of a mate a fact o om t to state a mate a fact necessa y to make the statements made, n
ght of the c cumstances unde wh ch such statements we e made, not m s ead ng w th espect to the pe od cove ed by th s epo t;
3 Based on my know edge, the f nanc a statements, and othe f nanc a nfo mat on nc uded n th s epo t, fa y p esent n a mate a espects the f nanc a
cond t on, esu ts of ope at ons and cash f ows of the eg st ant as of, and fo , the pe ods p esented n th s epo t;
4 The eg st ant's othe ce t fy ng off ce and I a e espons b e fo estab sh ng and ma nta n ng d sc osu e cont o s and p ocedu es (as def ned n Exchange Act Ru es
3a- 5(e) and 5d- 5(e)) and nte na cont o ove f nanc a epo t ng (as def ned n Exchange Act Ru es 3a- 5(f) and 5d- 5(f)) fo the eg st ant and have
(a) Des gned such d sc osu e cont o s and p ocedu es, o caused such d sc osu e cont o s and p ocedu es to be des gned unde ou supe v s on, to ensu e that
mate a nfo mat on e at ng to the eg st ant, nc ud ng ts conso dated subs d a es, s made known to us by othe s w th n those ent t es, pa t cu a y
du ng the pe od n wh ch th s epo t s be ng p epa ed;
(b) Des gned such nte na cont o ove f nanc a epo t ng, o caused such nte na cont o ove f nanc a epo t ng to be des gned unde ou supe v s on, to
p ov de easonab e assu ance ega d ng the e ab ty of f nanc a epo t ng and the p epa at on of f nanc a statements fo exte na pu poses n acco dance
w th gene a y accepted account ng p nc p es;
(c) Eva uated the effect veness of the eg st ant's d sc osu e cont o s and p ocedu es and p esented n th s epo t ou conc us ons about the effect veness of the
d sc osu e cont o s and p ocedu es, as of the end of the pe od cove ed by th s epo t based on such eva uat on; and
(d) D sc osed n th s epo t any change n the eg st ant's nte na cont o ove f nanc a epo t ng that occu ed du ng the eg st ant's most ecent f sca qua te
(the eg st ant's fou th f sca qua te n the case of an annua epo t) that has mate a y affected, o s easonab y ke y to mate a y affect, the eg st ant's
nte na cont o ove f nanc a epo t ng; and
5 The eg st ant's othe ce t fy ng off ce s and I have d sc osed, based on ou most ecent eva uat on of nte na cont o ove f nanc a epo t ng, to the eg st ant's
aud to s and the aud t comm ttee of the eg st ant's boa d of d ecto s (o pe sons pe fo m ng the equ va ent funct ons)
(a) A s gn f cant def c enc es and mate a weaknesses n the des gn o ope at on of nte na cont o ove f nanc a epo t ng wh ch a e easonab y ke y to
adve se y affect the eg st ant's ab ty to eco d, p ocess, summa ze and epo t f nanc a nfo mat on; and
(b) Any f aud, whethe o not mate a , that nvo ves management o othe emp oyees who have a s gn f cant o e n the eg st ant's nte na cont o ove
f nanc a epo t ng

Date Ma ch 2, 2020 /s/ A an Stewa t

A an Stewa t
Ch ef F nanc a Off ce
 Exhibit 32.1

CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Ra ph A C a k, ce t fy pu suant to Ru e 3a- 4(b) of the Secu t es Exchange Act of 934, as amended, (the “Exchange Act”) and Sect on 350 of Chapte 63 of
T t e 8 of the Un ted States Code ( 8 U S C § 350), as adopted pu suant to Sect on 906 of the Sa banes-Ox ey Act of 2002, that the Annua Repo t on Fo m 0-K of
ShotSpotte , Inc fo the yea ended Decembe 3 , 20 9, fu y comp es w th the equ ements of Sect on 3(a) o 5(d) of the Exchange Act and that nfo mat on conta ned n
such Annua Repo t on Fo m 0-K fa y p esents, n a mate a espects, the f nanc a cond t on and esu ts of ope at ons of ShotSpotte , Inc

Date Ma ch 2, 2020 /s/ Ra ph A C a k

Ra ph A C a k
Ch ef Execut ve Off ce
 Exhibit 32.2

CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, A an Stewa t, ce t fy pu suant to Ru e 3a- 4(b) of the Secu t es Exchange Act of 934, as amended, (the “Exchange Act”) and Sect on 350 of Chapte 63 of T t e
8 of the Un ted States Code ( 8 U S C § 350), as adopted pu suant to Sect on 906 of the Sa banes-Ox ey Act of 2002, that the Annua Repo t on Fo m 0-K of ShotSpotte ,
Inc fo the yea ended Decembe 3 , 20 9, fu y comp es w th the equ ements of Sect on 3(a) o 5(d) of the Exchange Act and that nfo mat on conta ned n such Annua
Repo t on Fo m 0-K fa y p esents, n a mate a espects, the f nanc a cond t on and esu ts of ope at ons of ShotSpotte , Inc

Date Ma ch 2, 2020 /s/ A an Stewa t

A an Stewa t
Ch ef F nanc a Off ce