Attachment_H_-_Master_Lease_Agreement.docx

ATTACHMENT H

MASTER LEASE AGREEMENT

(Oklahoma) Between the State Of Oklahoma By and Through The Office Of Management and Enterprise Services (“OMES”)

And [LESSOR] (“Lessor”) Dated [XX/XX/XXXX]

1. Scope.

This Master Lease Agreement (this “Agreement” or “MLA”), effective as of the Effective Date of the Contract (“Effective Date”), between the Lessor and OMES is a Contract Document in connection with Statewide Contract 1120 (“Contract”). Capitalized terms not defined herein have the meaning set forth in the Contract. Notwithstanding anything to the contrary, all provisions of this Agreement are subject and subordinate to the laws, rules and regulations of the State of Oklahoma and the United States, and nothing herein shall be construed to waive the doctrine of sovereign immunity or immunity from suit.

Lessor hereby leases to Lessee (as defined below), and Lessee hereby leases from Lessor the Equipment described on each Lease Schedule (“Schedule”), which is a separate agreement executed from time to time by Lessor and Lessee under the terms of this MLA. The terms and conditions contained herein shall apply to each Schedule that is properly executed in conjunction with this MLA by Lessee, which shall be aState Agency as defined by 74 O.S. 85.2 Section 27 that is authorized to use Oklahoma state contracts (“Lessee”). No Lessee hereunder shall have any obligation or liability for any other Lessee's obligations or liabilities under any Schedule, and a default by one Lessee under a Schedule shall not constitute a default by any other Lessee under any other Schedule.

As applicable, OMES and Lessee have made an independent legal and management determination to enter into this MLA and each Schedule. OMES has not offered or given any legal or management advice to the Lessor or to any Lessee under any Schedule. Lessee may negotiate additional terms or more advantageous terms with the Lessor to satisfy individual procurements, such terms shall be developed by the Lessor and Lessee and stated within the Schedule. To the extent that any of the provisions of the MLA conflict with any of the terms contained in any Schedule, the terms of the Schedule shall control, but only between the Lessor and the specific Lessee that executed that Schedule. It is expressly understood that the term “Equipment” shall refer to the Products and any related Services and any associated items therewith, including but not limited to all parts, replacements, additions, repairs, and attachments incorporated therein and/or affixed thereto, all documentation (technical and/or user manuals), operating system and application software as needed as identified on a Schedule and as allowed by and procured pursuant to Contract.

Any reference to “MLA” shall mean this Agreement, including the Opinion of Counsel, and any riders, amendments and addenda thereto, and any other documents as may from time to time be made a part hereof upon mutual agreement by applicable parties.

As to conditions precedent to Lessor’s obligation to purchase any Equipment, (i) Lessee shall accept the MLA terms and conditions as set forth herein and execute all applicable documents such as the MLA, the Schedule, the Acceptance Certificate, Opinion of Counsel (only required in connection with a Schedule of greater or equal to $2,500,000.00), and any other documentation as may be required by the Lessor that is not in conflict with this MLA, and (ii) there shall be no material adverse change in Lessee’s financial condition except as provided for within Section 7 of this MLA.

2. Term of MLA.

The term of this MLA shall commence on the Effective Date above and shall continue until, (i) the full and final expiration date of the Contract and the obligations of Lessees under every Schedule are fully discharged, or (ii) either OMES or Lessor terminates this Agreement or exercises their termination rights to terminate the Contract in whole, but not in part, as stated within Attachment B of the Contract. In regard to either the Contract expiration date or Contract termination date or the termination of this MLA, before all obligations of Lessee under every Schedule are fully discharged, such Schedules and such other provisions of the Contract and this MLA as may be necessary to preserve the rights of the Lessor or Lessee hereunder shall survive said termination or expiration.

3. Term of Schedule.

The term for each Schedule, executed under this MLA, shall commence on the date of execution of an Acceptance Certificate by the Lessee or twenty (20) days after the delivery of the last piece of Equipment to the Lessee (“Commencement Date”), and unless earlier terminated as provided for in the MLA, shall continue for the number of whole months or other payment periods as set forth in the applicable Schedule Term, commencing on the first day of the month following the Commencement Date (or commencing on the Commencement Date if such date is the first day of the month). The Schedule Term may be earlier terminated upon: (i) the Non-appropriation of Funds pursuant to Section 7 of this MLA, (ii) an Event of Loss pursuant to Section 18 of this MLA, or (iii) an Event of Default by Lessee and Lessor’s election to cancel the Schedule pursuant to Section 23 of this MLA.

4. Administration of MLA.

(a) For requests involving the leasing of Equipment, Lessee will submit its request directly to Lessor or such other Supplier or manufacturer providing Equipment under this Agreement (collectively the “Supplier”). Supplier shall apply the lower of (i) the then current Equipment pricing discounts as stated within Attachment E1 - Pricing Document of the Contract or (ii) the price as agreed upon by Lessee and Supplier which shall not except the amounts stated in Attachment E1. Lessor shall submit the lease proposal and all other applicable documents directly to the potential Lessee and negotiate the Schedule terms directly with the potential Lessee.

(b) All leasing activities in conjunction to this MLA shall be treated as a “purchase sale” or “transaction” in regard to the requirements of the Lessor to report the sale and make payment of the contract management fee, administrative fee or other applicable regulatory authority as defined within the Contract.

(c) Upon agreement by Supplier, Lessor and Lessee on pricing, availability and the like, Lessee may issue a purchase order in the amount indicated on the Schedule to Lessor for the Equipment and reference said Contract number SW#### on the purchase order. Any pre-printed terms and conditions on the purchase order, including via any hyperlink, submitted by the Lessee shall not be effective with respect to the lease of Equipment hereunder. Rather, the terms and conditions of the Contract, this MLA and applicable Schedule terms and conditions shall control in all respects.

(d) All State entities subject to the Central Purchasing Act shall use this Agreement when entering a lease with the Lessor. Further, this MLA shall not constitute a requirements agreement and Lessor shall not be obligated to enter into any Schedule for the lease of Equipment with any Lessee.

5. Rent Payments.

During the Schedule Term and any renewal terms, Lessee agrees to pay Lessor all Rent Payments. Rent Payments shall be the amount equal to the monthly Rent Payment amount specified in the Schedule multiplied by the amount of the total number of months specified therein. Lessee shall pay Rent Payments in the amount and on the due dates specified by Lessor until all Rent Payments and all other amounts due under the Schedule have been paid in full. If the Schedule Commencement Date is other than the first day of a month, Lessee shall make an initial payment on the Schedule Commencement Date pro rated from the Commencement Date until the last day of the month.

Any amounts received by Lessor from the Lessee in excess of Rent Payments and any other sums required to be paid by the Lessee shall be applied to the next scheduled Rent Payment due under the applicable Schedule, or if prohibited by law, the Lessor shall return the excess funds directly to Lessee. All Rent Payments shall be paid to the Lessor at the address stated on the Schedule or any other such place as the Lessor or its assigns may hereafter direct to the Lessee. Lessee shall abide by the Contract in making payments to the Lessor. Any sum received by the Lessor later than allowed by applicable Oklahoma law will bear interest at the maximum rate allowed by 62 O.S. § 34.72.

Each Schedule is a net lease and except as specifically provided herein or in a Schedule, Lessee shall be responsible for all costs and expenses arising in connection with the Schedule or Equipment. Lessee acknowledges and agrees, except as specifically provided for in Section 7 of this MLA, that its obligation to pay Rent and other sums payable hereunder, and the rights of Lessor and Lessor’s assignees, shall be absolute and unconditional in all events, and shall not be abated, reduced or subject to offset or diminished as a result of any event, including without limitation damage, destruction, defect, malfunction, loss of use, or obsolescence of the Equipment, or any other event, defense, counterclaim or recoupment due or alleged to be due by reason of any past, present or future claims Lessee may have against Lessor, Lessor’s assigns, the manufacturer, Supplier, or maintainer of the Equipment, or any person for any reason whatsoever.

“Price” shall mean the actual purchase price of the Equipment. Rent Payments shall be adjusted proportionately downward if the actual price of the Equipment is less than the estimate (original proposal), and the Lessee herein authorizes Lessor to adjust the Rent Payments downward in the event of the decrease in the actual Equipment price. However, in the event that the Equipment price is more than the estimate (original proposal), the Lessor may not adjust the Rent Payment without prior written approval of the Lessee.

6. Liens and Taxes.

Lessee shall keep the Equipment free and clear of all levies, liens and encumbrances, except those in favor of Lessor or its assigns, and shall give Lessor immediate notice of any attachment or other judicial process affecting any item of Equipment. A Lessee will not pay taxes assessed against Lessor, or reimburse Lessor for taxes lawfully paid in connection with the Contract, this MLA, the Equipment, Rent Payments or a Schedule. See Oklahoma Attorney General Opinion 1978-256. As addressed in the Contract, Lessee is also exempt from sales, use, personal property taxes and all other taxes and charges imposed by any federal, state, or local governmental or taxing authority.

7. Funding Insufficiency.

(a) Notwithstanding anything to the contrary in any Contract Document, the Lessee may terminate the Agreement or any Schedule in whole or in part if funds sufficient to pay obligations under the Contract are not appropriated or received from an intended third-party funding source.

(b) Lessee intends to continue each Schedule to which it is a party for the Schedule Term and to pay the Rent and other amounts due thereunder. Lessee reasonably believes that legally available funds in an amount sufficient to pay all Rent during the Schedule Term can be obtained. Lessee further intends to act in good faith to do those things reasonably and lawfully within its power to obtain and maintain funds from which the Rent may be paid. Notwithstanding the foregoing, in the event sufficient funds are not appropriated or received from an intended third party funding source to continue the Schedule Term for any Fiscal Period (as set forth on the Schedule) of Lessee beyond the Fiscal Period first in effect at the Commencement of the Schedule Term, Lessee may terminate the Schedule with regard to all of the Equipment on the Schedule so affected. Lessee shall provide Lessor written notice within 15 days of the Oklahoma Legislature Passing a budget and the Oklahoma Governor Signing it, or in the case of a veto from the day the State Legislature either overturns or fails to overturn the veto of the State budget or in the case of a federal or other non-state source of funding from the day when such funding is reduced, withdrawn or terminated. All obligations of Lessee to pay Rent due after the end of the Fiscal Period for which such termination applies will cease, all interests of Lessee in the Equipment will terminate and Lessee shall surrender the Equipment in accordance with Section 13 of this MLA. Lessee represents and warrants it has adequate funds to meet its obligations during the first Fiscal Period of the Schedule Term. Lessor and Lessee understand and intend that the obligation of Lessee to pay Rent hereunder shall constitute a current expense of Lessee and shall not in any way be construed to be a debt of Lessee in contravention of any applicable constitutional or statutory limitation or requirement concerning the creation of indebtedness by Lessee, nor shall anything contained herein constitute a pledge of the general revenues, funds or monies of Lessee beyond the Fiscal Period for which sufficient funds have been appropriated to pay Rent hereunder.

8. Selection of Equipment.

The Equipment is the size, design, capacity and manufacturer selected by Lessee in its sole judgment and not in reliance on the advice or representations of Lessor. No representation by the manufacturer or a Supplier shall in any way affect Lessee’s duty to pay Rent and perform its other obligations hereunder. Each Schedule is intended to be a “finance lease” as defined in Article 2A of the Uniform Commercial Code. Lessor has acquired or will acquire the Equipment in connection with this MLA. Lessor shall not be liable for damages, for any act or omission of the supplying manufacturer. Lessor hereby assigns, to the Lessee, any warranties provided to Lessor with respect to the Equipment during the Term of the applicable Schedule, to the extent any warranties with respect to the Equipment are unassignable, Lessor will ensure that the Lessee receives the benefit thereof. Lessee acknowledges that neither its dissatisfaction with any unit of Equipment, nor the failure of any of the Equipment to remain in useful condition for the Schedule Term, , shall relieve Lessee from the obligations under this MLA or Schedule Term.Any labels supplied by Lessor to Lessee, describing the ownership of the Equipment, shall be affixed by Lessee upon a prominent place on each item of Equipment.

9. Inspection and Acceptance.

Promptly upon delivery of the Equipment, Lessee will inspect and test the Equipment, and not later than ten (10) business days following the Commencement Date, Lessee will execute and deliver either (i) an Acceptance Certificate, or (ii) written notification of any defects in the Equipment. If Lessee has not given notice within such time period, the Equipment shall be conclusively deemed accepted by the Lessee as of the tenth (10th) business day. Lessor, its assigns or their agents, shall be permitted, subject to any applicable security measures, free reasonable access at reasonable times authorized by the Lessee, the right to inspect the Equipment.

10. Installation and Delivery; Use of Equipment; Repair and Maintenance.

(a) Lessor will ensure delivery of the Equipment Free on Board (F.O.B.) to the Lessee and provide industry standard installation assistance. Lessor is not and shall not be liable for damages if for any reason the manufacturer of the Equipment delays the delivery or fails to fulfill the order by the Lessee’s desired timeframe. Any delay in delivery by the manufacturer shall not affect the validity of any Schedule, however, the delay will affect the Commencement Date and Rent Payment obligations of the Lessee. Lessee shall provide a place of installation for the Equipment, which conforms to the requirements of the manufacturer and Lessor.

(b) Subject to the terms hereof, Lessee shall be entitled to use the Equipment in compliance with all laws, rules, and regulations of the jurisdiction wherein the Equipment is located and will pay all cost, claims, damages, fees and charges arising out of its possession, use or maintenance. Lessee agrees to solely use the Equipment in the conduct of Lessee’s business. Lessee agrees, at its expense, to obtain all applicable permits and licenses necessary for the operation of the Equipment, and keep the Equipment in good working order, repair, appearance and condition (reasonable wear and tear is acceptable). Lessee shall not use or permit the use of the Equipment for any purpose, which according to the specification of the manufacturer, the Equipment is not designed or reasonably suited. Lessee shall use the Equipment in a careful and proper manner and shall comply with all of the manufacturer’s instructions, governmental rules, regulations, requirements, and laws, with regard to the use, operation or maintenance of the Equipment.

(c) Lessee, at its expense, shall take good and proper care of the Equipment and make all repairs and replacements necessary to maintain and preserve the Equipment and keep it in good order and condition. Unless Lessor shall otherwise consent in writing, Lessee shall, at its own expense, enter into and maintain in force a maintenance agreement covering each unit of Equipment. Lessee shall furnish Lessor with a copy of such agreement, upon request. Lessor agrees that state agencies of Oklahoma may obtain internal maintenance services in lieu of a third-party maintenance agreement, so long as any such maintenance service does not void the warranty supplied by either the manufacturer or the supplier of the Equipment.. Except as provided otherwise in a Schedule, Lessee shall pay all costs to install and dismantle the Equipment. Lessee shall not make any alterations, additions, or improvements, or add attachments to the Equipment without the prior written consent of Lessor, except for additions or attachments to the Equipment purchased by Lessee from the original supplier of the Equipment or any other person approved by Lessor. Subject to the provisions of Section 13B of this MLA, Lessee agrees to restore the Equipment to Return Condition prior to its return to the Lessor.

11. Relocation of Equipment.

Lessee shall at all times keep the Equipment within its exclusive possession and control. At Lessor’s prior written consent, which shall not be unreasonably withheld, Lessee may move the Equipment to another location of Lessee, provided (i) Lessee is not in default on any Schedule, (ii) Lessee executes and causes to be filed at its expense such instruments as are necessary to preserve and protect the interests of Lessor and its assigns in the Equipment, (iii) and Lessee pays all costs otherwise associated with such relocation. Lessee shall provide Lessor with the complete address for each location to which the Equipment was moved outside the State of Oklahoma. On the last day of each calendar quarter, Lessee will provide Lessor a written report detailing the total amount of Equipment at each location of Lessee as of that date, and the complete address for each location, however, under no circumstances will the Lessee disclose the personal addresses of its employees. Lessor shall make all filings and returns for property taxes due with respect to the Equipment, and Lessee agrees that it shall not make or file any property tax returns, including information returns, with respect to the Equipment.

12. Ownership.

The Equipment shall at all times be and remain the sole and exclusive property of Lessor, subject to the parties’ rights under any applicable software license agreement. Lessee shall have no right, title or interest in the Equipment except a leasehold interest as provided for herein. Lessee agrees that the Equipment shall be and remain personal property and shall not be so affixed to realty as to become a fixture or otherwise to lose its identity as the separate property of the Lessor. Upon request, Lessee will enter into any and all agreements reasonably necessary to ensure that the Equipment remains the personal property of Lessor.

13. Purchase and Renewal Options; Location and Surrender of Equipment.

(a) Purchase and Renewal Options:

1. Not more than 180 days but not less than ninety (90) days prior to the expiration of the initial Schedule Term the (“Expiration Date”), Lessor shall notify Lessee of options for continued use of Equipment. Lessee shall have the option to: (i) return all of the Equipment to the Lessor upon expiration of the initial Schedule Term; or (ii) renew the Schedule as to all of the Equipment at a rate and for a term agreed upon by both parties; or (iii) purchase all of the Equipment by the Lessor’s acceptance of a purchase order from Lessee upon the last business day on or prior to the expiration of the Schedule Term thereof for the lesser of the price equal to the amount set forth in the Schedule, or the Fair Market Value (“FMV”). The FMV shall be determined on the basis of and shall be equal in amount to, the value which would be obtained in an arms-length transaction between an informed and willing buyer-user (other than a used equipment dealer), who would be retaining the Equipment as part of its current operations, in continuing and consistent use, and an informed and willing seller under no compulsion to sell, and in such determination, costs of removal from the location of current use shall not be a deduction from such value. Lessor’s determination of FMV shall be included as part of this notice of Lessee’s options.

2. If Lessee disagrees with the Fair Market Value, Lessee shall notify Lessor in writing within ten (10) days of the above notice and, within ten (10) days after receipt of Lessee’s notice, Lessor shall appoint a qualified appraiser reasonably acceptable to Lessee to appraise the retail value of the Products.

3. If Lessee contests the appointed qualified appraiser, they shall have ten (10) days from the appointment to object in a written communication and to offer three other neutral appraisers from which the Lessor shall appoint one within 10 days of the written communication. The amount determined by such appraiser shall be the final FMV. Lessor and Lessee shall share the expense of such appraisal equally. If a Lessee desires to renew or extend a Schedule, each Lessee and Lessor shall enter into a supplement to each Schedule describing the length of the renewal Schedule Term and the renewal Rent provided, however, all other terms of each Schedule and the Agreement shall remain in full force and effect. In the event that Lessee exercises the purchase option described herein, upon payment by Lessee to Lessor of the purchase price for the Equipment, together with all Rent Payments and any other amounts owing to Lessor hereunder, Lessor shall transfer to Lessee free and clear of all levies, liens and encumbrances title to such Equipment and cause a cancellation of any financing statement Lessor has filed, to be entered in the proper location within the jurisdiction.

(b) Location and Surrender of Equipment:

1. The Equipment shall be delivered to and thereafter kept at the location specified in the Schedule and shall not be removed therefrom without Lessor’s prior written consent and except in accordance with Section 11 of this MLA.

2. Upon the expiration, early termination as provided herein, or upon final termination of the Schedule, with at least sixty (60) days prior written notice to Lessor, Lessee at its cost and expense, except as provided otherwise in a Schedule, shall immediately disconnect, and properly package for transportation all of the Equipment (including, without limitation, all service records and user manuals), in good repair and working order, with no defects which affect the operation or performance of the Equipment (“Return Condition”), reasonable wear and tear excepted.

3. Lessee shall, at Lessor’s request, affix to the Equipment, tags, decals or plates furnished by Lessor indicating Lessor’s ownership and Lessee shall not permit their removal or concealment. Except as provided otherwise in a Schedule, Lessor shall retrieve the Equipment from the Lessee’s location and arrange for transportation. Upon receipt of the Equipment Lessor bears the entire risk of loss to the Equipment.

4. If the Equipment is not in Return Condition, Lessee shall remain liable for all reasonable costs required to restore the Equipment to Return Condition.

5. Except as provided otherwise in a Schedule, Lessee shall arrange and pay for the de-installation and packing of the Equipment and the de-installation shall be performed by manufacturer-certified technicians.

6. IF, UPON TERMINATION OR EXPIRATION OF THE SCHEDULE FOR ANY REASON (OTHER THAN FOR NON-APPROPRIATION), LESSEE FAILS OR REFUSES FORTHWITH TO RETURN AND DELIVER THE EQUIPMENT TO LESSOR, LESSEE SHALL REMAIN LIABLE FOR ANY RENT PAYMENTS ACCRUED AND UNPAID WITH RESPECT TO ALL OF THE EQUIPMENT ON THE SCHEDULE (NOT TO EXCEED 3 YEARS) AND SHALL PAY RENT UP TO THE DATE THAT THE EQUIPMENT IS RETURNED TO THE ADDRESS SPECIFIED BY LESSOR, TO THE EXTENT SUCH AMOUNTS ARE NOT PAID TO LESSOR AS INSURANCE PROCEEDS.

7. Without waiving the doctrines of sovereign immunity and immunity from suit and to the extent authorized by the constitution and laws of the State of Oklahoma, Lessee’s obligation to return Equipment may, at Lessor’s option, be specifically enforced by Lessor.

14. Quiet Enjoyment.

During the Schedule Term, Lessor shall not interfere with Lessee’s quiet enjoyment and use of the Equipment provided that an Event of Default (as hereinafter defined in Section 22 of the MLA) has not occurred and remains uncured after any applicable cure period.

15. Warranties.

Lessor and Lessee acknowledge that manufacturer Equipment warranties and any right of return, if any, inure to the benefit of the Lessee. Lessee agrees to pursue any warranty claim directly against such manufacturer of the Equipment and shall not pursue any such claim against Lessor. Except as provided under Section 7, Lessee shall continue to pay Lessor all amounts payable under any Schedule under any and all circumstances.

16. No Warranties.

LESSEE ACKNOWLEDGES THAT LESSOR IS NOT THE MANUFACTURER OR LICENSOR OF THE EQUIPMENT. LESSEE AGREES THAT LESSOR HAS NOT MADE AND MAKES NO REPRESENTATIONS OR WARRANTIES OF WHATSOEVER NATURE, DIRECTLY OR INDIRECTLY, EXPRESS OR IMPLIED, AS TO THE SUITABILITY, DURABILITY, FITNESS FOR USE, MERCHANTABILITY, CONDITION, OR QUALITY OF THE EQUIPMENT OR ANY UNIT THEREOF.

17. Indemnification.

(a) Lessor acknowledges that neither the State nor any of its political subdivisions may indemnify a private party and that the Lessor shall have no right to indemnification against the State, OMES, or any Lessee. See Oklahoma Attorney General Opinion 2012-18.

(b) Lessor is the owner of the Equipment and has title to the Equipment. Lessee further agrees that it will at all times keep the Equipment free from any legal process, encumbrance or lien whatsoever, and Lessee shall give Lessor immediate notice if any legal process, encumbrance or lien is asserted or made against the Equipment.

18. Risk of Loss.

Commencing upon delivery of the Equipment and continuing throughout the Schedule Term, Lessee, except as provided in Section 19, shall bear the entire risk of loss or damage in respect to any Equipment, whether partial or complete, from any cause whatsoever. In the event of loss, theft, destruction or damage of any kind to any item of Equipment, or if any Equipment is lost, stolen, or taken by governmental action for a stated period extending beyond the Term of any Schedule (an “Event of Loss”), Lessee shall promptly notify Lessor. In the case of an Event of Loss, (a) Lessee shall replace the affected Equipment in good condition and working order, or, if unable to, (b) Lessor shall look to its insurance, and not the Lessee, OMES, or the State for any additional recovery over and above Rent Payments due under the applicable Schedule. In the event of a governmental taking of Equipment for an indefinite period or for a stated period, which does not extend beyond the Schedule Term, all obligations of the Lessee with respect to such Equipment (including payment of Rent) shall continue. So long as Lessee is not in default hereunder, Lessor shall at Lessee’s option (a) pay to Lessee all sums received by Lessor from the government by reason of such taking or (b) reduce the amount of Rent owed by Lessee.

19. Insurance.

Lessor shall insure the Equipment and look first to insurance proceeds in any Event of Loss prior to seeking redress from Lessee. Lessor may address its business costs when determining and setting the Rent. With respect to the Equipment, (i) Lessor shall be responsible for its liability and shall not look to Lessee for recovery of any kind and (ii) Lessee shall be responsible for its liability as required under the Oklahoma Governmental Tort Claims Act (GTCA), 51 O.S. § 151, et seq. and shall not look to Lessor for recovery of any kind.

20. Representations and Warranties of Lessee.

Lessee represents and warrants for the benefit of Lessor and its assigns, and Lessee will provide an opinion of counsel (only required in connection with a Schedule of greater or equal to [$2,500,000.00]) to the effect that, as of the time of execution of the MLA between the State of Oklahoma by and through OMES and Lessor and each Schedule between Lessor and Lessee:

(a) This MLA and each Schedule executed by Lessee have been duly authorized, executed and delivered by Lessee and constitutes a valid, legal and binding agreement of Lessee, enforceable with respect to the obligations of Lessee herein, in accordance with its terms.

(b) The entering into and performance under this MLA or any Schedule between Lessor and Lessee will not violate any judgment, order, law or regulation applicable to Lessee or result in any breach of, or constitute a default under, or result in the creation of any lien, charge, security interest or other encumbrance on the Equipment leased under any Schedule between Lessor and Lessee pursuant to any instrument to which the Lessee is a party or by which it or its assets may be bound.

(d) The use of the Equipment is essential to Lessee’s proper, efficient and economic operation, and Lessee will sign and provide to Lessor upon execution of each Schedule between Lessor and Lessee hereto written certification to that effect; and

(e) As applicable, Lessee or OMES represents and warrants that (i) It has authority to enter into this MLA and any Schedule under this MLA, (ii) the person executing the MLA and all Schedules have been duly authorized to execute the MLA and Schedules on Lessee’s behalf, (iii) all information supplied to Lessor is true and correct to the best of its knowledge and belief, including all credit and financial information and (iv) subject to the provisions of Section 7 above, it is able to meet all its financial obligations, including the Rent Payments hereunder.

21. Representations and Warranties of Lessor.

Lessor represents and warrants

(a) Lessor is and shall remain an entity authorized and validly existing and is authorized to do business in Oklahoma, and is not in default as to taxes owed to the State of Oklahoma or any of its political subdivisions;

(b) The MLA and each Schedule executed in conjunction to this MLA have been duly authorized, executed and delivered by Lessor and constitute valid, legal and binding agreements of Lessor, enforceable with respect to the obligations of Lessor herein in accordance with their terms.

(c) No approval, consent or withholding of objection is required from any federal or other governmental authority or instrumentality with respect to the entering into or performance by Lessor of this MLA or any Schedule;

(d) The entering into and performance of the MLA or any Schedule will not violate any judgment, order, law or regulation applicable to Lessor or result in any breach of, or constitute a default under, or result in the creation of any lien, charge, security interest or other encumbrance upon the assets of the Lessor, including Equipment leased under the MLA and Schedules thereto, pursuant to any instrument to which the Lessor is a party or by which it or its assets may be bound;

(e) To the best of Lessor’s knowledge and belief, there are no suits or proceedings pending or threatened against or affecting Lessor, which if determined adversely to Lessor will have a material adverse effect on the ability of Lessor to fulfill its obligations under the MLA or any Schedule; and

(f) Lessor represents and warrants that the person executing the MLA has been duly authorized to execute the MLA on Lessor’s behalf.

22. Default.

(a) Lessee shall be in default under a Schedule upon the occurrence of any one or more of the following events (each an “Event of Default”): (i) Except for termination under the terms of Section 7, nonpayment or incomplete payment by Lessee of Rent or any other sum payable by its due date or the date by which such sum is payable pursuant to applicable law; (ii) failure by Lessee to perform or observe any other material term, covenant or condition of this MLA, the Schedule, or any applicable software license agreement, which is not cured within thirty (30) business days after receipt of notice thereof from Lessor; (iii) insolvency by Lessee; (iv) Lessee’s filing of any proceedings commencing bankruptcy or the filing of any involuntary petition against Lessee or the appointment of any receiver not dismissed within sixty (60) days from the date of said filing or appointment; (v) subjection of a substantial part of Lessee’s property or any part of the Equipment to any levy, seizure, assignment or sale for or by any creditor or governmental agency; or (vi) any material representation or warranty made by Lessee in this MLA, the Schedule or in any document furnished by Lessee to Lessor in connection therewith or with the acquisition or use of the Equipment being untrue when made; and (vii) the parties agree to use ever increasing levels of executive escalation within their respective organizations to cure any breach based on (vi) above prior to such event being declared an Event of Default.

(b) Lessor shall be in default under the Agreement and any Schedule thereof upon the occurrence of any one or more of the following events (each an “Event of Default”): (i) failure by Lessor to perform or observe any material term, covenant or condition of this MLA, the Schedule, or any applicable software license agreement, which is not cured within thirty (30) business days after receipt of notice thereof from Lessee; (ii) insolvency by Lessor; (iii) Lessor’s filing of any proceedings commencing bankruptcy or the filing of any involuntary petition against Lessor or the appointment of any receiver not dismissed within sixty (60) days from the date of said filing or appointment; (iv) subjection of a substantial part of Lessor’s property or any part of the Equipment to any levy, seizure, assignment or sale for or by any creditor or governmental agency; (v) any attempt by the Lessor or its assigns to execute a lien against the equipment other than for Event of Default by Lessee; or (vi) any material representation or warranty made by Lessor in this MLA, the Schedule or in any document furnished by Lessor to Lessee in connection therewith or with the acquisition or use of the Equipment being untrue when made; and (vii) the parties agree to use ever increasing levels of executive escalation within their respective organizations to cure any breach based on (vi) above prior to such event being declared an Event of Default.

(c) Failure of Lessor to provide notice to the Lessee and State of any event which may constitute default under 22(b)(ii), (iii), (iv) or (v) above within a reasonable time, but not less than ten (10) days of Lessor’s discovery of such event shall itself constitute breach of this agreement.

23. Remedies.

(a) Upon the occurrence of an uncured Event of Default and as long as such Event of Default is continuing, after giving thirty (30) days prior written notice to Lessee of default, during which time Lessee shall have the opportunity to cure such default, Lessor may, in its sole discretion, do any one or more of the following provided, however, that Lessor may not recover value in excess of amounts as allowed under the terms of the Schedule and by applicable law: (i) terminate the Schedule under which Lessor claims default of Lessee; (ii) without Lessee waiving the doctrines of sovereign immunity and immunity from suit, and to the extent allowed by the laws and Constitution of the State of Oklahoma and the United States, Lessor may proceed by appropriate court action to enforce the performance of the terms of the Schedule and/or recover damages; (iii) whether or not the Schedule is terminated, upon notice to Lessee and with due process of law, take possession of the Equipment wherever located, and for such purposes Lessee, to the extent authorized by Oklahoma law, hereby authorizes Lessor, its assigns or the agents of either to cause Lessee to return such Equipment to Lessor in accordance with the requirements of Section 13 of the MLA, provided that Lessor follows all physical security measures of the location; (iv) by notice to Lessee, and to the extent permitted by law, rules and regulations, declare immediately due and payable and recover from Lessee, the sum of (a) the present value of the Rent owed from the earlier of the date of payment by Lessee or the date Lessor obtains a judgment against Lessee until the end of the Schedule Term plus, to the extent the Lessor does not take possession, of the Equipment or the Equipment is not returned to Lessor, the present value of the estimated in-place FMV of the Equipment as defined in Section 13 of MLA at the end of the Schedule Term as reasonably determined by Lessor, each discounted at the like-term Treasury Bill rate; (b) all Rent and other amounts due and payable on or before the earlier of the date of payment by Lessee or the date Lessor obtains a judgment against Lessee; and (c) interest at the highest rate allowable by law on (a) and (b) from the date of default.

4. Upon return or repossession, of the Equipment, Lessor shall, upon notice to Lessee, use reasonable efforts to mitigate damages, including to sell, re-lease or otherwise dispose of such Equipment, in such manner and upon such terms as Lessor may determine so long as such manner and terms are commercially reasonable. Upon disposition of the Equipment, Lessor shall credit the Net Proceeds (as defined below) to the unpaid Rent and reasonable damages incurred by Lessee. Proceeds upon sale of the Equipment shall be the sale price paid to Lessor less the cost of repossessing the Equipment, if any, and the reasonable cost of the disposition of the Equipment. “Net Proceeds” shall be the proceeds of sale or re-lease as determined above, less all costs and expenses incurred by Lessor in the recovery, storage and repair of the Equipment, in the remarketing or disposition thereof, or otherwise as a result of Lessee’s default, including interest at the highest rate allowable by law, calculated from the dates such costs and expenses were incurred until received by Lessor. To the extent allowable under applicable laws, rules and regulations, Lessee shall remain liable for the amount by which all sums, due from Lessee exceeds the Net Proceeds. Net Proceeds in excess thereof are the property of and shall be paid to Lessee.

5. Lessee may upon the occurrence of an uncured Event of Default and as long as such Event of Default is continuing, after giving thirty (30) days prior written notice to Lessor of default, during which time Lessor shall have the opportunity to cure such default, Lessee may, in its sole discretion, do any one or more of the following: (i) terminate the Schedule under which Lessee claims default of Lessor; or (ii) at Lessee’s sole discretion, immediately exercise any of the options available in subsection 13 of this Agreement

24. Notices and Waivers.

All notices relating to this MLA shall be delivered to the Lessor as specified or to another representative and address subsequently specified in writing by the appropriate parties hereto and to OMES pursuant to the Contract. All notices, except for billings and communications in the ordinary course of business, relating to a Schedule shall be delivered in person to an officer of the Lessor or Lessee or shall be mailed certified or registered to Lessor or Lessee at its respective address shown on the Schedule or to another address subsequently specified in writing by the appropriate parties thereof. Lessee and Lessor intend and agree that a photocopy or facsimile of this MLA or a Schedule and all related documents, including but not limited to the Acceptance Certificate, with their signatures thereon shall be treated as originals, and shall be deemed to be as binding, valid, genuine, and authentic as an original signature document for all purposes. This MLA and each corresponding Schedule in conjunction herewith are a “Finance Lease” as defined in Article 2A of the Uniform Commercial Code (“UCC”). A waiver of a specific Event of Default shall not be a waiver of any other or subsequent Event of Default. No waiver of any provision of this MLA or a provision of a Schedule shall be a waiver of any other provision or matter, and all such waivers shall be in writing and executed by an officer of the Lessor or authorized representative of Lessee. No failure to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof.

25. Assignment by Lessor; Assignment or Sublease by Lessee.

(a) Lessor may (i) assign all or a portion of Lessor’s right, title and interest in this MLA and/or any Schedule; (ii) grant a security interest in the right, title and interest of Lessor in the MLA, any Schedule and/or any Equipment; and/or (iii) sell or transfer its title and interest as owner of the Equipment and/or as Lessor under any Schedule; and Lessee understands and agrees that Lessor’s assigns may each do the same (hereunder collectively “Assignments”). Lessor shall provide Lessee notice of all such Assignments to the addresses below, and such Assignments shall be subject to Lessee rights under the MLA and corresponding Schedule:

If sent to the state of Oklahoma:

Chief Information Officer 3115 North Lincoln Boulevard Oklahoma City, Oklahoma 73105

With a copy to:

ISD Deputy General Counsel 3115 North Lincoln Boulevard Oklahoma City, Oklahoma 73105.

If sent to Lessee in connection with a Schedule:

The address set forth on the purchase order, Schedule or as otherwise identified in writing by the Lessee.

Lessee hereby consents to such Assignments and agrees to execute and deliver promptly such acknowledgements and other instruments reasonably requested in connection therewith. Lessee acknowledges that the assigns do not assume Lessor’s obligations hereunder and subject to the limitations of Section 7 of this Agreement agrees to make all payments owed to the assigns without abatement and not to assert against the assigns any claim, defense, setoff or counterclaim which the Lessee(s) may possess against the Lessor or any other party that is not the Lessor’s assignee. Lessor shall remain liable for its performance under the MLA and any Schedule(s) executed hereunder to the extent Lessor’s assigns do not perform Lessor’s obligations under the MLA and Schedule(s) executed hereunder. Upon any such Assignment, all references to Lessor, except such references in provisions that differentiate between Lessor and its assigns, shall also include all such assigns, whether specific reference thereto is otherwise made herein.

(b) LESSEE WILL NOT SELL, ASSIGN, SUBLET, PLEDGE OR OTHERWISE ENCUMBER, OR PERMIT A LIEN TO EXIST ON OR AGAINST ANY INTEREST IN THIS LEASE, OR THE EQUIPMENT, OR REMOVE THE EQUIPMENT FROM ITS LOCATION REFERRED TO ON THE SCHEDULE, WITHOUT LESSOR’S PRIOR WRITTEN CONSENT EXCEPT AS PROVIDED IN SECTION 11 OF THIS MLA. UPON WRITTEN NOTICE TO LESSEE, LESSOR MAY ASSIGN ITS INTEREST IN THIS LEASE AND SELL OR GRANT A SECURITY INTEREST IN ALL OR ANY PART OF THE EQUIPMENT WITHOUT LESSEE’S CONSENT. Without the prior written consent of Lessor, the Lessee shall not assign, sublease, transfer, pledge or hypothecate the Master Lease Agreement; provided, however, where Lessee is a state agency authority, office, bureau, board, council, court, commission, department, district, institution, unit, division, body or house, no such prior written consent from Lessor is necessary in the event of a legislative mandate to transfer the business functions requiring the Equipment to be transferred to another state entity.

26. Delivery of Related Documents.

For each Schedule, Lessee will provide the following documents and information as required by and satisfactory to Lessor: (a) Certificate of Acceptance for accepted goods to be on lease with Lessor; (b) Opinion of Counsel (only required in connection with a Schedule of greater or equal to $2,500,000.00); (c) financial statements or other financial information in lieu thereof as agreed to by Lessor’s credit department in its sole judgment; (d) Incumbency Certificate; and (e) other mutually agreed documents as reasonably required by Lessor.

27. Lessee’s Waivers.

To the extent permitted by applicable law, Lessee hereby waives, with respect to Lessor, the following rights and remedies conferred upon Lessee by Article 2A of the UCC: to (i) cancel any Schedule under the MLA; (ii) repudiate any Schedule; (iii) reject the Equipment; (iv) revoke acceptance of the Equipment; (v) recover damages from Lessor for any breach of warranty by the manufacturer; (vi) claim a security interest in the Equipment in Lessee’s possession or control for any reason; (vii) deduct all or any part of any claimed damages resulting from Lessor’s default, if any, under any Schedule; (viii) accept partial delivery of the Equipment; (ix) “cover” by making any purchase or lease of or contract to purchase or lease equipment in substitution for the Equipment due from Lessor; (x) recover any special, punitive, incidental or consequential damages, for any reason whatsoever. Lessee agrees that any delay or failure to enforce Lessor’s rights under this MLA or a Schedule does not prevent Lessor from enforcing any rights at a later time. This waiver of UCC rights does not include Lessee’s right to terminate a lease subject to a non-appropriation of funds, pursuant to Section 7 above.

29. Security Interest and UCC Filings.

To secure payments hereunder, Lessor reserves and Lessee hereby grants to Lessor a continuing security interest in the Equipment and any and all additions, replacements, substitutions, and repairs thereof. When all of the Lessee’s obligations under this MLA and respective Schedules have been fully paid and satisfied, Lessor’s security interest shall terminate. Nothing contained herein shall in any way diminish Lessor’s right, title, or interest in or to the Equipment. Lessor and Lessee agree that a reproduction of this MLA and/or any associated Schedule may be filed as a financing statement and shall be sufficient as a financing statement under the UCC. Lessee hereby grants Lessor, its agents, successors or assigns permission to execute and file on behalf of Lessee any and all UCC Financing Statements which are necessary or proper to secure Lessor's interest in the Equipment in all applicable jurisdictions. Upon termination of Lessor’s security interest, Lessor shall also cause the Financing Statements to be removed from all applicable jurisdictions, by filing a UCC termination statement or the jurisdictional equivalent in the designated office of each jurisdiction. Lessee shall execute or obtain and deliver to Lessor, upon Lessor’s request, such instruments, financing statements and assurances, as necessary or advisable for the protection or perfection of this Lease and Lessor’s rights hereunder.

30. Miscellaneous.

(a) Jurisdiction. THE MLA AND EACH SCHEDULE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF OKLAHOMA WITHOUT REGARD TO ANY CHOICE OR CONFLICT OF LAW PRINCIPALS. Venue for any and all proceedings under this Agreement shall be brought in Oklahoma County, Oklahoma, and all parties consent to the venue and jurisdiction of the courts situated therein.

(b) Counterpart. Only original counterpart No. 1 of each Schedule shall be deemed to be an “Original” for chattel paper purposes under the Uniform Commercial Code. Any and all other counterparts shall be deemed to be a “Copy”. NO SECURITY INTEREST IN THIS MLA, IN ANY SCHEDULE, OR IN ANY OF THE EQUIPMENT MAY BE CREATED, TRANSFERRED, ASSIGNED OR PERFECTED BY THE TRANSFER AND POSSESSION OF THIS MLA ALONE OR OF ANY “COPY” OF THE SCHEDULE, BUT RATHER SOLELY BY THE TRANSFER AND POSSESSION OF THE “ORIGINAL” COUNTERPART OF THE SCHEDULE INCORPORATING THIS MLA BY REFERENCE.

(c) Severability. In the event of any provision of this MLA or any Schedule shall be determined by a court of competent jurisdiction to be invalid or unenforceable, the parties hereto agree that such provision shall be ineffective without invalidating the remaining provisions thereof.

(d) Entire Agreement. Lessor and Lessee acknowledge that there are no agreements or understanding, written or oral, between them with respect to the Equipment, other than as set forth in the Contract, this MLA and in each Schedule to which Lessor and Lessee are signatory parties. Neither the Contract, this MLA nor any Schedule may be altered, modified, terminated, or discharged except by a writing signed by an authorized person of the party against whom enforcement of such action is sought. The terms and conditions of this MLA may be amended only by written instrument executed by Lessor and OMES. The terms of a Schedule may only be amended in a written instrument executed by both Lessee and Lessor.

(a)…