ATTACHMENT F - ESPC Master Lease Contract.pdf

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Commonwealth of Kentucky

MASTER AGREEMENT

Doc ID No: Proc Folder:

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Administered By:

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Telephone: Issued By:

Energy Savings Performance Contract Lease Agreement

Standard Services 2015-03-16 2017-06-30 Joe Wolford FAP111-57-00-S2 502-782-0351 Kelly Hawkins

MA 785 1500000753 1 3631104

V E N D O R

Banc of America Public Capital Corp Banc of America Leasing 2059 Northlake Parkway 3rd Floor N

Tucker GA 30084

US

Line CL Description Delivery Days Quantity Unit Issue Unit Price Contract Amt Total Price

1 0 0.00 0.00000 0.01 0.01Installment Purchase/Lease Purchase Financing and Lease

Extended Description

Effective: March 16, 2015 Expires: June 30, 2017

Energy Savings Performance Contract Lease Agreement Program administrator for the Commonwealth of Kentucky Energy Savings Performance Contracting (ESPC) Program.

MASTER AGREEMENT

MA-785-1500000753

COMMONWEALTH OF KENTUCKY MASTER LEASE PROGRAM

BETWEEN

THE COMMONWEALTH OF KENTUCKY

FINANCE AND ADMINISTRATION CABINET

AND

BANC OF AMERICA PUBLIC CAPITAL CORP

11333 McCormick Road

M/C MD5-032-07-05

Hunt Valley, MD 21031 Contact: Terri Preston, Operations Manager

Phone: 443-541-3642 Fax: 804-553-8124 terri.preston@baml.com

This Master Agreement (“Contract”) is entered into, by and between the Commonwealth of Kentucky, Finance and Administration Cabinet (“the Commonwealth”) and Banc of America Public Capital Corp, as the Prime “Contractor” to establish a Contract for Commonwealth of Kentucky Master Lease Program.

The Commonwealth and Contractor agree to the following:

I. Scope of Contract

Banc of America Public Capital Corp shall serve as a Master Lease Purchase Program Administrator for the Commonwealth of Kentucky. Banc of America Public Capital Corp’s responsibilities shall be to finance new lease purchase agreements for state agencies, institutions, and authorities of the Commonwealth.

Any execution using the mechanism shall be under the direction of the Finance and Administration Cabinet within the Commonwealth of Kentucky.

II. Contract Components and Order of Precedence

The Commonwealth’s acceptance of the Contractor’s offer in response to the Solicitation, RFP 785-15000000080, indicated by the issuance of a Contract Award , shall create a valid Contract between the Parties consisting of the following:

1. Any written Agreement between the Parties;

2. Any Addenda to the Solicitation RFP 785-15000000080;

3. The Solicitation and all attachments thereto, including Section 40--Terms and

Conditions of a Contract with the Commonwealth of Kentucky;

4. General Conditions contained in 200 KAR 5:021 and;

5. Any Best and Final Offer;

6. Any clarifications concerning the Contractor’s proposal in response to the

Solicitation RFP 785-15000000080;

7. The Contractor’s proposal in response to the Solicitation, RFP 785-15000000080.

In the event of any conflict between or among the provisions contained in the Contract, the order of precedence shall be as enumerated above.

III. Negotiated Items:

The terms below supplement the terms and conditions and supersede any contrary terms in the Contract.

1. A blanket Legal Opinion of Counsel shall be provided annually to Banc of America

Public Capital Corp by the Commonwealth of Kentucky, for each Cabinet that will utilize this Master Lease Line. Our pre-approved "blanket opinion letter" is included with this response. This template (or another of same form and substance) shall be utilized for each schedule.

2. Banc of America Public Capital Corp shall not syndicate any of the Commonwealth’s lease purchase contracts. If syndication is necessary at a future date, Lessee’s approval shall be required which will not be unreasonably withheld.

3. The Cabinet shall provide Banc of America Public Capital Corp with a resolution or other evidence satisfactory to Contractor that the lease schedule is authorized by the Cabinet.

4. Use of this Contract shall be limited to the state agencies, institutions and authorities of the Commonwealth of Kentucky.

5. Banc of America Public Capital Corp shall be listed as first lien holder on any equipment that has a certificate of title.

6. The Cabinet shall pay any sales, use, and personal property taxes arising out of this Contract and the transaction contemplated hereby. Any other taxes levied upon this Contract, the transaction, or the equipment or services delivered pursuant hereto shall be borne by the Cabinet.

7. Banc of America Public Capital Corp shall publish monthly indicative (but not guaranteed) interest rates to the Commonwealth, through its Procurement Buyer based on the interest rate determination set forth in Article XIII of the Master Lease.

Upon preparation of lease documents (two weeks prior to closing), the interest rate shall be stated for documentation purposes. However, Banc of America Public Capital Corp reserves the right to adjust the interest rate on each schedule between document preparation and closing, should adverse interest rate movements occur.

Any changes will be verifiable by the Commonwealth by review of the applicable published index stated herein.

IV. Terms and Conditions

Final Agreement

The Contract represents the entire agreement between the parties with respect to the subject matter hereof. Prior negotiations, representations, or agreements, either written or oral, between the parties hereto relating to the subject matter hereof shall be of no effect upon this Contract.

Agencies to Be Served

This contract shall be for use by the following agencies of the Commonwealth of Kentucky:

All State Agencies

No shipments shall be made except upon receipt by Banc of America Public Capital Corp of an official Delivery Order from a using agency.

Political Subdivisions

Under Kentucky Statutes, political subdivisions of this State including cities, counties and school districts may participate in All State Agency Master Agreements to the same extent as agencies of the Commonwealth.

Quantity Basis of Contract – Estimated Quantities

Any and all quantities mentioned in this Contract are purely estimates, and are not to be implied nor inferred as being guarantees. The State is obligated to buy only that quantity needed by its agencies during the term of the contract. Requirements may exceed the quantities shown and the contractor will be required to furnish all requirements shown on Delivery Orders dated during the life of the contract.

Contract Provisions

If any provision of this Contract (including items incorporated by reference) is declared or found to be illegal, unenforceable, or void, then both the Commonwealth and the Contractor shall be relieved of all obligations arising under such provision. If the remainder of this Contract is capable of performance, it shall not be affected by such declaration or finding and shall be fully performed.

Type of Contract

The Contract shall be on the basis of a firm fixed unit price/rate.

Term of Contract and Renewal Options

The initial term of the Contract shall be for a period of two (2) years from the effective date of the Award of Contract.

This Contract may be renewed at the completion of the initial Contract period for two (2) additional two (2) year periods upon the mutual agreement of the Parties. Such mutual agreement shall take the form of an addendum to the Contract.

The Commonwealth reserves the right not to exercise any or all renewal options. The Commonwealth reserves the right to extend the contract for a period less than the length of the above-referenced renewal period if such an extension is determined by the Commonwealth Buyer to be in the best interest of the Commonwealth.

The Commonwealth reserves the right to renegotiate any terms and/or conditions as may be necessary to meet requirements for the extended period. The Vendor will be advised of any proposed revisions prior to the renewal periods. In the event proposed revisions cannot be agreed upon, either party shall have the right to withdraw without prejudice from either exercising the option or continuing the contract in an extended period.

Multiyear Contracts

If this Contract is for a term that extends beyond the end of the biennium in which the Contract was made, payment and performance obligations for succeeding fiscal years are subject to the availability of funds therefor. When funds are not appropriated or otherwise made available to support continuation of performance of the Contract beyond the biennium, the Contract for such subsequent year(s) may be canceled and the Contractor shall be reimbursed.

Contract Usage

As a result of this Contract, the contractual agreement with Banc of America Public Capital Corp will in no way obligate the Commonwealth of Kentucky to purchase any services or equipment under this Contract. The Commonwealth agrees, in entering into any Contract, to purchase only such services in such quantities as necessary to meet the actual requirements as determined by the Commonwealth.

Changes and Modifications to the Contract

Pursuant to KRS 45A.210(1) and 200 KAR 5:311, no modification or change of any provision in the Contract shall be made, or construed to have been made, unless such modification is mutually agreed to in writing by the Contractor and the Commonwealth, and incorporated as a written amendment to the Contract and processed and approved by the Finance and Administration Cabinet prior to the effective date of such modification or change pursuant to KRS 45A.210(1) and 200 KAR 5:311. Memorandum of understanding, written clarification, and/or correspondence shall not be construed as amendments to the Contract.

If the Contractor finds at any time that existing conditions made modification of the Contract necessary, it shall promptly report such matters to the Commonwealth Buyer for consideration and decision.

Changes in Scope

The Commonwealth may, at any time by written order, make changes within the general scope of the Contract. No changes in scope are to be conducted except at the approval of the Commonwealth.

Contract Conformance

If the Commonwealth Buyer determines that deliverables due under the Contract are not in conformance with the terms and conditions of the Contract and the mutually agreed-upon project plan, the Buyer may request the Contractor to deliver assurances in the form of additional Contractor resources and to demonstrate that other major schedules will not be affected. The Commonwealth shall determine the quantity and quality of such additional resources and failure to comply may constitute default by the Contractor.

Assignment

The Contractor shall not assign the Contract in whole or in part or any payment arising therefrom without the prior written consent of the Commonwealth Buyer, which consent shall not be unreasonably withheld. Any purported assignment is void.

Notices

After the Award of Contract, all programmatic communications with regard to day-to-day performance under the contract are to be made to the agency technical contact identified below:

ESPC Program Coordinator Finance and Administration Cabinet

Department of Facilities and Support Services 403 Wapping Street

FRANKFORT KY 40601

After the Award of Contract, all communications of a contractual or legal nature are to be made to the Commonwealth Buyer identified below:

ESPC Buyer/Administrator Finance and Administration Cabinet

Division of Contracting and Administration 403 Wapping Street Frankfort, KY 40601

Payment

Payments are predicated upon successful completion and acceptance of the described work, services, supplies, or commodities, and delivery of the required documentation.

Invoices for payment shall be submitted to the Agency Contact Person or his representative.

Contractor Cooperation in Related Efforts

The Commonwealth of Kentucky may undertake or award other contracts for additional or related work, services, supplies, or commodities, and the Contractor shall fully cooperate with such other contractors and Commonwealth employees. The Contractor shall not commit or permit any act that will interfere with the performance of work by any other contractor or by Commonwealth employees.

Subcontractors

The Contractor is permitted to make subcontract(s) with any other party for furnishing any of the work or services herein. The Contractor shall be solely responsible for performance of the entire Contract whether or not subcontractors are used. The

Commonwealth shall not be involved in the relationship between the prime contractor and the subcontractor. Any issues that arise as a result of this relationship shall be resolved by the prime contractor.

All references to the Contractor shall be construed to encompass both the Contractor and any subcontractors of the Contractor.

Contractor Affiliation

"Affiliate" shall mean a branch, division or subsidiary that is effectively controlled by another party. If any affiliate of the Contractor shall take any action that, if done by the Contractor, would constitute a breach of this agreement, the same shall be deemed a breach by such party with like legal effect.

Commonwealth Property

The Contractor shall be responsible for the proper custody and care of any Commonwealth-owned property furnished for Contractor's use in connections with the performance of this Contract. The Contractor shall reimburse the Commonwealth for its loss or damage, normal wear and tear excepted.

Insurance

The Contractor shall provide bankers professional liability insurance for its professional employees, commercial general liability, property damage, and workers' compensation insurance, naming the Commonwealth as additional insured as their interest may appear under the terms of this Contract except for workers compensation and bankers professional liability. In the event any carrier of such insurance exercises cancellation, notice of such cancellation shall be made immediately to the Commonwealth Buyer except for bankers professional liability.

Confidentiality of Contract Terms

The Contractor and the Commonwealth agree that all information communicated between them before the effective date of the Contract shall be received in strict confidence and shall not be necessarily disclosed by the receiving party, its agents, or employees without prior written consent of the other party. Such material will be kept confidential subject to Commonwealth and Federal public information disclosure laws.

Upon signing of the Contract by all Parties, terms of the Contract become available to the public, pursuant to the provisions of the Kentucky Revised Statutes.

The Contractor shall have an appropriate agreement with its Subcontractors extending these confidentiality requirements to all Subcontractors’ employees.

Confidential Information

The Contractor shall comply with the provisions of the Privacy Act of 1974 and instruct its employees to use the same degree of care as it uses with its own data to keep confidential information concerning client data, the business of the Commonwealth, its financial affairs, its relations with its citizens and its employees, as well as any other information which may be specifically classified as confidential by the Commonwealth in writing to the Contractor. All Federal and State Regulations and Statutes related to confidentiality shall be applicable to the Contractor. The Contractor shall have an appropriate agreement with its employees to that effect, provided however, that the foregoing will not apply to:

-Information which the Commonwealth has released in writing from being maintained in confidence;

-Information which at the time of disclosure is in the public domain by having been printed and published and available to the public in libraries or other public places where such data is usually collected; or -Information, which, after disclosure, becomes part of the public domain as defined above, through no act of the Contractor.

The Contractor shall have an appropriate agreement with its Subcontractors extending these confidentiality requirements to all Subcontractors' employees.

Advertising Award

The Contractor shall not refer to the Award of Contract in commercial advertising in such a manner as to state or imply that the firm or its services are endorsed or preferred by the Commonwealth of Kentucky.

Permits, Licenses, Taxes and Commonwealth Registration

The Contractor shall procure all necessary permits and licenses and abide by all applicable laws, regulations, and ordinances of all Federal, State, and local governments in which work under this Contract is performed.

The Contractor shall maintain certification of authority to conduct business in the Commonwealth of Kentucky during the term of this Contract. Such registration is obtained from the Secretary of State, who will also provide the certification thereof.

However, additional local registration or license may be required.

Contract Claims

The Parties acknowledge that KRS 45A.225 to 45A.290 governs contract claims.

Rights and Remedies

The rights and remedies of the Commonwealth provided shall not be exclusive and are in addition to any other rights and remedies provided by law or under this Contract.

EEO Requirements

The Equal Employment Opportunity Act of 1978 applies to All State government projects with an estimated value exceeding $500,000. The Contractor shall comply with all terms and conditions of the Act. A copy of the EEO forms may be obtained by downloading them from the E-Procurement website at https://eprocurement.ky.gov.

Select STANDARD ATTACHMENTS AND GENERAL TERMS and scroll down the page to Attachment #4. . Direct coordination with the EEO Office is approved to discuss EEO requirements and forms. The EEO office’s telephone number is (502) 564-2874 and fax (502) 564-1055.

Provisions for Termination of the Contract

This Contract shall be subject to the termination provisions set forth in 200 KAR 5:312.

Bankruptcy

In the event the Contractor becomes the subject debtor in a case pending under the Federal Bankruptcy Code, the Commonwealth's right to terminate this Contract may be subject to the rights of a trustee in bankruptcy to assume or assign this Contract. The trustee shall not have the right to assume or assign this Contract unless the trustee (a) promptly cures all defaults under this Contract; (b) promptly compensates the Commonwealth for the monetary damages incurred as a result of such default, and (c) provides adequate assurance of future performance, as determined by the Commonwealth.

Conformance with Commonwealth & Federal Laws/Regulations

This Contract is subject to the laws of the Commonwealth of Kentucky and where applicable Federal law. Any litigation with respect to this Contract shall be brought in state or federal court in Franklin County, Kentucky.

Recycling

The Contractor is required to comply with the recycling requirements of 200 KAR 5:330.

Accessibility

Banc of America Public Capital Corp hereby warrants that the products or services to be provided under this Contract comply with the accessibility requirements of section 504 of the Rehabilitation Act of 1973, as amended (29 U.S.C. § 794d), and its implementing regulations set forth at Title 36, Code of Federal Regulations, part 1194. Banc of America Public Capital Corp further warrants that the products or services to be provided under this Contract comply with existing federal standards established under Section 255 of the Federal Telecommunications Act of 1996 (47 U.S.C. § 255), and its implementing regulations set forth at Title 36, Code of Federal Regulations, part 1193, to the extent Banc of America Public Capital Corp’s products or services may be covered by that act. Banc of America Public Capital Corp agrees to promptly respond to and resolve any complaint regarding accessibility of its products or services which is brought to its attention.

Audit of Records

The Contractor, as defined in KRS 45A.030 (9) agrees that the contracting agency, the Finance and Administration Cabinet, the Auditor of Public Accounts, and the Legislative Research Commission, or their duly authorized representatives, shall have access to any books, documents, papers, records, or other evidence, which are directly pertinent to this contract for the purpose of financial audit or program review. Furthermore, any books, documents, papers, records, or other evidence provided to the contracting agency, the Finance and Administration Cabinet, the Auditor of Public Accounts, or the Legislative Research Commission which are directly pertinent to the contract shall be subject to public disclosure regardless of the proprietary nature of the information, unless specific information is identified and exempted and agreed to by the Secretary of the Finance and Administration Cabinet as meeting the provisions of KRS 61.878(1)(c) prior to the execution of the contract. The Secretary of the Finance and Administration Cabinet shall not restrict the public release of any information that would otherwise be subject to public release if a state government agency were providing the service.

Funding-Out Provision

The Vendor agrees that if funds are not appropriated to the agency or are not otherwise available for the purpose of making payments, the agency shall be authorized, upon sixty (60) days written notice to the Vendor, to terminate this contract. The termination shall be without any other obligation or liability of any cancellation or termination charges, which may be fixed by the contract.

V. Master Lease

TYPICAL EQUIPMENT FINANCED AND FINANCED TERMS

Equipment Typical Term (yrs)

Energy Management Systems/Energy Savings Performance Contracts 5 – 20

*BAPCC shall finance Energy Management Systems with a term of up to 20 years, including construction.

STANDARD TERMS AND CONDITIONS

THIS MASTER LEASE CONTRACT dated as of March 16, 2015_, is made and entered into by and between Banc of America Public Capital Corp, a corporation duly organized and existing under the laws of the State of Kansas, as lessor (“Lessor”), whose principal business address is as shown on the execution page hereof; and the Commonwealth of Kentucky as lessee (“Lessee”), acting by and through its Finance and Administration Cabinet, whose address is as shown on the execution page hereof.

This Contract does not constitute a debt of the Commonwealth of Kentucky.

Neither the full faith and credit nor the taxing power of the Commonwealth of Kentucky have been pledged for the payment of sums due under this Contract.

Lease Payments due under this Contract are payable solely from appropriations by the General Assembly of the Commonwealth of Kentucky to the Using Departments of the Cabinets which are parties to this Contract made on a biennial basis for the purpose of obtaining Equipment hereunder. Failure to make Lease Payments due to lack of appropriations does not constitute a default under this Contract.

In consideration of the mutual covenants herein contained, the parties hereto recite and agree as follows:

ARTICLE I: DEFINITIONS AND EXHIBITS

Section 1.1. Definitions. The following terms have the meanings specified below unless the context clearly requires otherwise.

Cabinet: For purposes of this Contract, the term Cabinet shall include agencies of the State whose heads are appointed pursuant to KRS 12.040; quasi-governmental state corporations established by State statute and State Departments and Agencies headed by constitutional officers.

Chattel Paper: A record or records that evidence both a monetary obligation and a security interest in specific goods, a security interest in specific goods and software used in the goods, a security interest in specific goods and license of software used in the goods, a lease of specific goods, or a lease of specific goods and license of software used in the goods. In this paragraph, “monetary obligation” means a monetary obligation secured by the goods or owed under a lease of the goods and includes a monetary obligation with respect to software used in the goods. The term does not include:

1. Charters or other contracts involving the use or hire of a vessel; or

2. Records that evidence a right of payment arising out of the use of a credit or charge card or information contained on or for use with the card.

If a transaction is evidenced by records that include an instrument or series of instruments, the group of records taken together constitutes chattel paper.

Contract: This Contract and all Equipment Schedules hereto.

Contract Date: The date designated in the first paragraph hereof.

Contract Term: March 16, 2015 to June 30, 2017, with the option to renew for two (2) additional two (2) year periods upon the mutual agreement of the Parties.

Contractor: Each of the manufacturers or vendors from whom Using Department has ordered or with whom a Using Department has contracted for the manufacture, delivery and/or installation of the Equipment.

Counsel: An attorney duly admitted to the practice of law before the highest court of the State.

Equipment: All items of personal property described in Equipment Schedules and subject to this Contract.

Equipment Group: The Equipment listed in a single Exhibit B.

Equipment Schedule: A schedule consisting of the separate but like numbered pages of Exhibits A and B which have been completed with respect to an Equipment Group and executed by Lessor, by a Cabinet on behalf of Lessee and by a Using Department.

Escrow Agreement: An Escrow Agreement among Lessor, Lessee and an escrow agent pursuant to which an escrow account is established for the deposit by Lessor of the proceeds of a Lease (“Escrow Account”) and procedures for disbursement thereof are set forth.

Escrow Structure: If applicable, Lessor will deposit the principal sum of the total financing amount of individual Equipment Schedules into an Escrow Account with an escrow agent selected by Lessor and Lessee. Lessee will be responsible for any escrow/agent fees and any other expenses associated with the establishment of the Escrow Account. Payments from Lessee under the Lease commence upon deposit of funds into the Escrow Account. Interest earnings from the Escrow Account will accrue to the benefit of Lessee.

Events of Default: Those events described in Section 11.1.

Final Acceptance Date: The date designated in each Exhibit B as the last date on which the Using Department identified in such Exhibit B on behalf of Lessee may submit a Certificate of Acceptance to Lessor for the Equipment Group described in such Exhibit B.

Fiscal Period: The twenty-four (24) month period commencing July 1 in each even-numbered year and ending June 30 in the next even numbered year.

Interest: The portion of any Lease Payment designated as and comprising interest as shown in any Exhibit B.

Lease: With respect to each Equipment Group, this Contract and the Equipment Schedule relating thereto, which shall constitute a separate contract relating to such Equipment Group. Each such Lease is entered into by Lessee acting by and through a Cabinet for the benefit of a Using Department as identified in a respective Exhibit B.

Lease Date: The date so designated in each Exhibit B.

Lease Payment: With respect to any Equipment Group, the payment due from Lessee to Lessor on each Payment Date during the Lease Term as shown in the Exhibit B relating thereto.

Lease Term: With respect to any Equipment Group, the period during which the related Lease is in effect as specified in Section 4.1. Lease Terms are expected to range from five (5) to twenty (20) years.

Lessee: The Commonwealth of Kentucky acting by and through a Cabinet, which is a party to this Contract.

Lessor: Banc of America Public Capital Corp., any surviving, resulting or transferee corporation, or its assignee of a Lease hereunder.

Net Proceeds: Any insurance proceeds or condemnation awards paid with respect to any Equipment remaining after payment therefrom of all expenses incurred in the collection thereof.

Non-Appropriation: The failure of the General Assembly of the Commonwealth of Kentucky to appropriate money to a Using Department for Equipment subject to this Contract for any Fiscal Period of Lessee sufficient for the payment of Lease Payments and any other amount due under a Lease.

Payment Date: The date upon which any Lease Payment is due and payable as provided in any Exhibit B.

Principal: The portion of any Lease Payment designated as principal in any Exhibit B.

Specifications: The bid specifications and/or purchase order pursuant to which a Using

Department has ordered any Equipment from a Contractor.

State: The Commonwealth of Kentucky.

State and Federal Law or Laws: The Constitution and any law of the State and any charter, ordinance, rule or regulation of any agency or political subdivision of the State;

and any law of the United States, and any rule or regulation of any federal agency.

Structure: Tax-Exempt Master Lease Contract.

Total to Finance: Estimated to finance Eighty Million ($80,000,000.00) each biennium in Energy Savings Performance Contracts. This amount can be increased by mutual consent by Lessor and Lessee.

Using Department: A department or unit of the State Government, which may be a Cabinet itself, which has been authorized by a Cabinet to have the possession and use of an Equipment Group as indicated on the Exhibit B relating to such Equipment Group.

Section 1.2. Exhibits

Exhibit A. Form of Certificate of Acceptance executed by the Using Department on behalf of Lessee.

Exhibit B. Form of schedule executed by Lessor, by a Cabinet on behalf of Lessee and by a Using Department describing an Equipment Group and setting forth the Lease Payments. Lessee hereby authorizes Lessor to insert on Exhibit A the Payment Dates and the serial or other identifying numbers relating to the Equipment Group when available.

Exhibit C. Form of Opinion of Counsel to the Cabinet.

Exhibit D. Forms of Uniform Commercial Code Financing Statements.

Exhibit E. Forms of Form 8038-G and Form 8038-GC.

ARTICLE II: REPRESENTATIONS, WARRANTIES AND COVENANTS

Section 2.1. Representations, Warranties and Covenants Lessee. Lessee represents and warrants and covenants as follows:

(a) Lessee is the Commonwealth of Kentucky and is authorized under the Constitution and laws of the State to enter into this Contract, each Lease and the transactions contemplated hereby and thereby, and to perform all of its obligations under this Contract and each Lease.

(b) The execution and delivery of this Contract by the Cabinets for Lessee and each Lease by an officer of a Cabinet and an officer of the Using Department which has the use and possession of the Equipment Group has been duly authorized by appropriate official action, and such action is in compliance with all public bidding and other State and Federal Laws applicable to this Contract, each Lease and the acquisition and financing of the Equipment by Lessee. All requirements have been met and procedures have occurred in order to ensure the enforceability of this Contract and each Lease against Lessee.

(c) Lessee will ensure that the Cabinets on behalf of their respective Using Departments use the Equipment only to perform essential governmental or proprietary functions of Lessee within the scope of Lessee’s authority.

Lessee will not permit the Equipment to be used in or for any private commercial activity.

(d) Lessee will not lease, sublease, sell or contract with a private user for the use or management of the Equipment, Lessee will calculate and pay any rebate to the Internal Revenue Service and Lessee will comply with the Internal Revenue Code of 1986, as amended (the “Code”) and all rules and regulations promulgated thereunder (the “Regulations”) which are applicable to the Contract.

(e) Lessee will submit to the Secretary of the United States Treasury information reporting statements executed by the Cabinet and other information relating to each Lease at times and in the forms required by the Code and the Regulations.

(f) There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body pending or, to the best of Lessee’s knowledge, threatened against or affecting Lessee wherein an unfavorable ruling or finding would adversely affect the enforceability of this Contract or any Lease hereunder or any other transaction of the Lessee which is similar hereto, or the exclusion of the interest portion of Lease Payments from gross income for federal tax purposes under the Code, or would materially and adversely affect any of the transactions contemplated by this Contract.

(g) Within three (3) business days of delivery and installation of any Equipment Group or part thereof, the respective Using Department on behalf of Lessee will inspect such Equipment and if it meets Lessee’s Specifications, provide to Lessor a completed and executed Certificate of Acceptance executed by the Using Department on behalf of Lessee relating thereto in the form attached hereto as Exhibit A. Lessee hereby confirms the authority of each Using Department named in an Exhibit B to order Equipment, and to execute Certificates of Acceptance. Lessee agrees that Lessor may rely on Certificates of Acceptances executed by the Using Departments and Lessee agrees to be bound by Certificates of Acceptance executed by the Using Departments.

(h) Lessee acknowledges that (i) under Article XI of this Contract, upon Event of Default of Lessee relating to a particular Lease entered into for the benefit of a particular Using Department, Lessor may elect to terminate this Contract with respect to all Leases for the benefit of such Using Department notwithstanding that the Event of Default is with respect to only one or more specific Leases involving such Using Department and (ii) in the event of Non-Appropriation by Lessee, acting through a Cabinet, of any particular Lease for the benefit of a Using Department within that Cabinet, this Contract shall terminate as to all Leases for that particular Using Department, and all Equipment subject to Leases entered into for that Using Department are subject to return by Lessee pursuant to Section 11.5.

ARTICLE III: LEASE OF EQUIPMENT

Section 3.1. Acquisition of Equipment. Lessee, through a Cabinet, shall advise Lessor of its desire to lease equipment, the equipment cost, the Contractor of the equipment, expected delivery date and the desired lease terms for such equipment. By execution hereof, Lessor has made no commitment to lease any equipment to Lessee.

Nothing herein shall obligate Lessor to lease any equipment to Lessee until Lessor has executed an Equipment Schedule relating thereto. If Lessor, in its sole discretion, determines the proposed equipment may be subject to a Lease hereunder, Lessor shall furnish to the Cabinet a proposed Exhibit B relating to the Equipment Group completed insofar as possible. The Using Department shall order the Equipment Group from the appropriate Contractor or Contractors. In no event shall Lessee enter into any contract with any Contractor or issue a purchase order that references Lessor. Lessor shall have no obligation to make any payment to a Contractor or reimburse Lessee for any payment it made to a Contractor for an Equipment Group until five (5) business days after Lessor has received all of the following in form and substance satisfactory to Lessor (provided, however, Lessor shall make no payment to a Contractor for any Equipment for which Lessor did not receive a Certificate of Acceptance prior to the Final Acceptance Date) (a) an Exhibit B executed by Lessor, by a Cabinet acting for and on behalf of Lessee and the applicable Using Department ; (b) a Certificate of Acceptance executed by the Using Department; (c) Contractor invoice(s) and/or bill(s) of sale relating to the Equipment Group and if such invoices have been paid by Lessee, evidence of payment thereof and, if applicable, evidence of official intent to reimburse such payment as required by the Regulations; (d) the legal description of the real estate where the Equipment is located and/or the original certificate of title or manufacturer’s certificate or origin and title application if any of the Equipment Group is subject to certificate of title laws; (e) a completed Form 8038-G or –GC executed by a Cabinet on behalf of the Commonwealth of Kentucky in one of the forms attached hereto as Exhibit E or evidence of filing thereof with the Secretary of Treasury; (f) an Opinion of Counsel to the Cabinet in the form of Exhibit C thereto and (g) any other documents or items required by Lessor.

Section 3.2. Lease; Enjoyment; Inspection. Lessor hereby leases to Lessee each Equipment Group made subject to an Equipment Schedule hereto, and Lessee hereby leases from Lessor such Equipment Group, upon the terms and conditions set forth herein and in the related Equipment Schedule. During the Lease Term, Lessee shall peaceably and quietly have and hold and enjoy the Equipment Group, except as expressly set forth in this Contract. Lessee agrees that Lessor and its agents shall have the right at all reasonable times to examine and inspect the Equipment, and Lessor and its agents shall have such rights of access to the Equipment as may be reasonably necessary to cause the proper maintenance of the Equipment in the event of failure by Lessee to perform its obligations hereunder. Notwithstanding the designation of Banc of America Public Capital Corp as Lessor, Banc of America Public Capital Corp does not own the Equipment and by this Contract and each Lease is merely financing the acquisition thereof for Lessee. Lessor has not been in the chain of title of the Equipment, does not operate, control or have possession of the Equipment and has no control over the Lessee or the Lessee’s operation, use, storage or maintenance of the Equipment. Lessee is solely responsible for the selection of the Equipment, and the manufacturer and vendor thereof and is solely responsible for the use, maintenance, operation and storage of the Equipment.

Section 3.3. Alternative Procedure; Escrow Agreement. Notwithstanding the provisions of Section 3.1, if, upon agreement by Lessor and Lessee as to any Equipment Group to be acquired and leased by Lessee under this Contract, Lessor and Lessee enter into an Escrow Agreement with an escrow agent establishing an Escrow Account from which the Equipment Group cost is to be paid (a) Lessor and Lessee shall immediately complete and execute an Exhibit B relating to the Equipment Group; (b) the amount deposited by Lessor into the Escrow Account shall be repaid by the Lease Payments due under the related Lease and Interest on the Lease shall commence on the date of deposit; and (c) the Lease Payments relating to the Equipment Group shall have an aggregate Principal component equal to the amount of Lessor's deposit into the Escrow Account and shall be due and payable as provided in the related Exhibit B commencing upon the deposit of funds by Lessor into the Escrow Account. Lessee acknowledges and agrees that no disbursements shall be made from an Escrow Account except for portions of the Equipment Group which are operationally complete and functionally independent and which may be utilized by Lessee without regard to whether the balance of the Equipment Group is delivered and accepted.

ARTICLE IV: CONTRACT TERM

Section 4.1. Term. The initial term of this Contract shall be for the balance of the biennium from the effective date of the award of contract, March 16, 2015

This Contract may be renewed at the completion of the initial Contract Term for two (2) additional two (2) year periods upon the mutual agreement of the Parties. Such mutual agreement shall take the form of an addendum to this Contract under Section 40.050 of

Solicitation RFP 785-15000000080.

Lessee reserves the right not to exercise any or all renewal options. Lessee reserves the right to extend this Contract for a period less than the length of the above-referenced renewal period if such an extension is determined by the Commonwealth Buyer to be in the best interest of Lessee.

Notwithstanding the termination of the Contract Term during which Equipment Schedules may be executed, Lessee shall continue to make Lease Payments under each Lease and perform its obligations under each Lease until the termination of each such Lease as provided in Section 4.5. Each Lease with respect to an Equipment Group shall be in effect for a Lease Term commencing upon the Lease Date and ending as provided in Section 4.5.

Section 4.2. Termination by Lessee. (a) This Contract shall be subject to the provisions set forth in 200 KAR 5:312. In reference to Termination for Default, Lessee shall notify Lessor in writing at least thirty (30) days prior to the proposed termination date of the default. Such written notice shall specifically state the reason of the intention to terminate. Lessor shall have thirty (30) days in which to cure the default, unless such cure period is extended by agreement of the Parties. If the default is not cured to the satisfaction of Lessee within the thirty (30) day cure period or any extension thereof, this Contract shall be considered terminated as to the ability to fund future Equipment Schedules at close of business on the thirtieth (30th) day or any agreed upon extension.

Lessee may also terminate this Contract for convenience if it determines that such termination is in its best interests.

Upon delivery by certified mail to Lessor of a Notice of Termination specifying the nature of the termination and the date upon which such termination becomes effective, Lessor shall not fund any additional Equipment Schedules under this Contract.

In the event of termination of this Contract by Lessee for an alleged default of the Lessor or for convenience, this Contract is terminated as to the ability to fund additional Equipment Schedules, but the Equipment Schedules previously funded will remain in full force and effect.

(b) In the event of Non-Appropriation relating to a Lease entered into for the benefit of a particular Using Department, this Contract shall terminate with respect to each Lease hereunder entered into for the benefit of such Using Department, in whole, but not in part, as to all Equipment Groups subject to such Leases effective upon the last day of the Fiscal Period for which funds were appropriated, in the manner and subject to the terms specified in this Article. Lessee may effect such termination by giving Lessor a written notice of termination and by paying to Lessor any Lease Payments and other amounts which are due under such Leases and have not been paid at or before the end of its then current Fiscal Period. Lessee shall endeavor to give notice of such termination not less than forty-five (45) days prior to the end of the Fiscal Period for which appropriations were made, and shall notify Lessor of any anticipated termination. In the event of termination of any Leases as provided in this Section, Lessee shall comply with the instructions received from Lessor in accordance with Section 11.5 within ten (10) days after the termination of such Leases.

Section 4.3. Intent to Continue Lease Term; Appropriations. Lessee presently intends to continue each Lease hereunder for its entire Lease Term and to pay all Lease Payments relating thereto and own all Equipment at the end of the Lease Term.

Each Cabinet will include in its budget request for each Fiscal Period the Lease Payments to become due in such Fiscal Period with respect to Equipment Groups leased hereunder for the benefit of the Using Department within the respective Cabinet’s jurisdiction, and will use all reasonable and lawful means available to secure the appropriation of money for such Fiscal Period sufficient to pay all Lease Payments coming due therein. The parties acknowledge that appropriation for Lease Payments is a governmental function which Lessee cannot contractually commit itself in advance to perform and this Contract does not constitute such a commitment. However, Lessee reasonably believes that moneys in an amount sufficient to make all Lease Payments can and will lawfully be appropriated and made available to permit Lessee’s continued utilization of the Equipment in the performance of its essential functions during the applicable Lease Terms.

Section 4.4. Effect of Termination Due to Non-Appropriation. Upon termination of this Contract in the event of a Non-Appropriation as to all Leases involving a specific Using Department as provided in this Article, Lessee shall not be responsible for the payment of any additional Lease Payments coming due in succeeding Fiscal Periods with respect to such Leases, but if Lessee has not complied with the instructions received from Lessor in accordance with Section 11.5 within ten (10) days after termination of such Leases, the termination shall nevertheless be effective, but Lessee shall be responsible for the payment of damages in an amount equal to the amount of the Lease Payments that would thereafter have come due if such Leases had not been terminated and which are attributable to the number of days after such ten (10) day period during which Lessee fails to comply with Lessor’s instructions and for any other loss suffered by Lessor as a result of Lessee’s failure to take such actions as required.

Section 4.5. Termination of Lease Term. The Lease Term with respect to any Lease will terminate upon the occurrence of the first of the following events: (a) the termination by Lessee in accordance with Section 4.2(b); (b) An Event of Default by Lessee and Lessor’s election to terminate the Lease pursuant to Article XI; or (c) the payment by Lessee of all Lease Payments and all other amounts authorized or required to be paid by Lessee pursuant to the Lease.

ARTICLE V: LEASE PAYMENTS

Section 5.1. Lease Payments. Lessee agrees to pay Lease Payments with respect to an Equipment Group during the related Lease Term in the amounts and on the dates specified in the Exhibit B relating thereto. A portion of each Lease Payment is paid as and represents the payment of Interest as set forth in Exhibit B of each Equipment Schedule; provided that Interest accrual will not commence until Lessor has paid the Contractor for the Equipment or deposited the proceeds of a Lease pursuant to an Escrow Agreement. All Lease Payments shall be paid to Lessor; or to such assignee(s) to which Lessor has assigned such Lease Payments, at such place as Lessor or such assignee(s) may from time to time designate by written notice to Lessee. Lessee shall pay the Lease Payments exclusively from moneys legally available therefor, in lawful money of the United States of America.

Section 5.2. Current Expense. The obligations of Lessee, including its obligation to pay the Lease Payments due in any Fiscal Period of a Lease Term, shall constitute a current expense of Lessee for such Fiscal Period and shall not constitute an indebtedness of Lessee within the meaning of the Constitution and laws of the State.

Nothing herein shall constitute a pledge by Lessee of any taxes or other moneys (other than moneys lawfully appropriated from time to time by or for the benefit of Lessee for this Contract and the Net Proceeds of the Equipment) to the payment of any Lease Payment or other amount coming due hereunder.

Section 5.3. Lease Payments To Be Unconditional. Except as provided in Section 4.2(b), the obligation of Lessee to make Lease Payments or any other payments required hereunder shall be absolute and unconditional in all events. Notwithstanding any dispute between Lessee and Lessor or between Lessee and Contractor or any other person, Lessee shall make all Lease Payments and other payments required hereunder when due and shall not withhold any Lease Payments or other payment pending final resolution of such dispute nor shall Lessee assert any right of set-off or counterclaim against its obligation to make Lease Payments or other payments required hereunder. Lessee’s obligation to make Lease Payments or other payments shall not be abated through accident, unforeseen circumstances, failure of the Equipment to perform as desired, damage or destruction to the Equipment, loss of possession of the Equipment or obsolescence of the Equipment.

Article VI: Insurance and Risk of Loss

Section 6.1. Liability and Property Insurance. During each Lease Term, Lessee shall provide self insurance for liability for personal injuries, death or damage to or loss of property arising out of or in any way relating to the Equipment sufficient to protect Lessor from liability in all events and self insurance through the State’s Risk Management Fund for all-risk casualty and property damage in an amount equal to the greater of the full replacement cost of the Equipment with new Equipment having substantially similar Specifications.

Section 6.2. Risk of Loss. As between Lessor and Lessee, Lessee assumes all risks and liabilities from any cause whatsoever, whether or not covered by insurance, for loss or damage to any Equipment and for injury to or death of any person or damage to any property, whether such injury or death be with respect to agents or employees of Lessee or of third parties, and whether such property damage be to Lessee’s property or the property of others. Whether or not covered by insurance, Lessee hereby assumes responsibility for and agrees to reimburse Lessor for and, to the extent permitted by law, will indemnify and hold Lessor harmless from and against all liabilities, obligations, losses, damages, penalties, claims, actions, costs and expenses (including reasonable attorneys’ fees) of whatever kind and nature, imposed on, incurred by or asserted against Lessor that in any way relate to or arise out of this Contract, the transactions contemplated hereby and the Equipment, including but not limited to, (a) the selection, manufacture purchase acceptance or rejection of Equipment or the ownership of the Equipment, (b) the delivery, lease, possession, maintenance, use, condition, return or operation of…