Exhibit A - Operating Lease.doc

IFB1 2015000105

Attachment A

MODEL CONTRACT CLAUSES FOR EQUIPMENT LEASES (OPERATING)

CONTRACT

FOR (OPERATING) LEASE FOR EQUIPMENT: ____________________________

THIS CONTRACT, Made this ___ day of ________________ 20XX, by and between the State of Colorado for the use and benefit of the Department of Personnel and Administration, acting by and through the Division of Central Services (DCS), Integrated Document Solutions Section, referred to as the "State" or "Lessee" or "________," and ___________________ Inc., a _______ corporation whose primary office for the State of Colorado is located at ___________(Contractor must verify this is contractor's legal name including Inc., and this must match contract signature page, W-9, and 1099 info) hereinafter referred to as the "Lessor" or "Contractor"

FACTUAL RECITALS

Authority exists in the Law and Funds have been budgeted, appropriated and otherwise made available and a sufficient uncommitted balance thereof remains available for encumbering and subsequent payment of this contract in Fund Number _______, Appropriation Account ______________ and Organization AEA as encumbered.

Required approval, clearance and coordination have been accomplished from and with appropriate agencies.

The Colorado Department of Personnel and Administration, Division of Central Services, ____________ is designated to provide centralized services for ___________services for state departments, institutions, agencies pursuant to § 24-30-1101, et seq. C.R.S.; and

The State desires to acquire, equipment by operating lease, Lessor's [equipment] [products] [services] for a ________ for a __ month lease period for the purpose of performing essential governmental functions; and

The rent hereunder represents fair market rental for the use of the equipment and meets the requirements of FASB13.

[OPTIONAL] The State has entered into a separate agreement with _________ ("Vendor") for maintenance of the equipment herein, and

The contractor’s [bid] [offer] was selected in accordance with State law as a result of [IFB] [RFP( Number _____ dated _____________; and

The State hereby warrants and represents that it has complied with the provisions of all applicable State of Colorado statutes, rules and regulations in order to enter into this Lease Contract with Lessor to provide for the leased equipment; and

NOW THEREFORE, it is hereby agreed that

1. Scope of Work

a. Lessor hereby leases to Lessee and Lessee hereby leases from Lessor in accordance with the terms and conditions as set forth in this contract hereinafter referred to as the "Lease", "Contract", or "Agreement", the Equipment described in [# _______, Section titled Statement of Work/Specifications], attached as Exhibit A, (hereinafter, with all replacements parts, substitutions, proceeds, increases, additions, accessions, repairs and accessories incorporated therein or affixed thereto, referred to as the "Equipment," and the contractor's proposal, attached as Exhibit B, together with other listed exhibits in Section 3 are hereby incorporated by reference as if fully set forth herein. The Equipment for the _________consists of equipment, products and services including a _____________________software updates and maintenance, installation and other related items as additionally specified in further detail in Exhibit A. Lessee authorizes Lessor to insert in the Lease serial numbers and other identification data when determined.

b. DEFINITIONS. Unless the context otherwise requires, the terms defined in this Section shall, for all purposes of this Agreement, have the meaning herein specified.

[Add additional terms and definitions not fully described herein]

c. Web links to applicable or cited references.

State of Colorado Legal Link (Constitutions and Statutes) )

· § 4-2.5-101, et seq. C.R.S. Uniform Commercial Code - Leases

· § 24-30-1101, et seq. C.R.S, Department of Personnel, State Administrative Support Services, Division of Central Services

· § 24-82-701, et seq. C.R.S, Master Leasing

· § 24-82-801, et seq. C.R.S, Lease-Purchased Agreements for Acquisition of Real or Personal]

2. Training, Technical Support, and Maintenance a Training. The [Contractor][manufacturer] shall provide maintenance and repair training, at the time the system is installed, to [minimum of three days of training for up to four State employees after Equipment is installed and operational. Training shall be complete when the State is reasonably satisfied that all training objectives have been met]. [State FTE (full-time employee) who are certified for __________Systems. Two additional State FTE may be trained for maintenance and repair during the term of this contract at no additional charge. The training will consist of___________.

b. Installation. The Contractor shall deliver and install the _________, related peripherals and required software to enable the system to be fully operational and ready for use by State staff.

c. Technical Support, Periodic Updates and Upgrade Requirements. Contractor or authorized subcontractor shall provide ongoing technical support through toll-free telephone contact with Contractor’s technical support section for equipment and software. Technical support shall be available from _______________ (Mountain Standard Time) Monday through Friday, national holidays excluded. Technical support shall be provided at no additional charge. Contractor shall also provide all System Software [minor][major]Upgrades [to include fixes and patches].

d Maintenance and Support.

The Contractor shall be responsible for providing maintenance services for the term of the lease. Normal service hours to be at least _____________. The maintenance shall include all travel time, parts and labor, excluding consumables. Maintenance is to be provided by a factory-trained and qualified technician, who is an employee of the contractor unless otherwise authorized. Upon placement of service call, maintenance provider must initially respond by telephone within one hour and provide a ___hour window when the technician will arrive on-site. Technician must provide report on-site to provide service within

___business hours of when the request was initially reported.

The State, at its expense, shall keep the Equipment in a suitable environment as specified by

Manufacturer and in good condition and working order, ordinary wear and tear excepted. The

State agrees that the Equipment will be operated by competent, qualified personnel in accordance with applicable operating instruction, laws and government regulations.

[Optional] At its own expense, State shall solely be responsible for servicing, repairing, and maintaining the Equipment in as good condition, repair, appearance and working order as when delivered to Lessee hereunder, ordinary wear and tear from proper use alone excepted, and shall replace any and all parts thereof which may from time to time become worn out, lost, stolen, destroyed, or damaged beyond repair or rendered unfit for its intended use, for any reason whatsoever, all of which replacements shall be free and clear of all liens, encumbrances and claims of others and shall become part of the Equipment and subject to this Agreement. Lessor may, at its option, discharge such costs, expenses and insurance premiums necessary for the repair, maintenance and preservation of the Equipment, and all sums so expended shall be due from Lessee upon demand in addition to Lease Payments hereunder.

3. Order of Precedence

In the event of conflicts or inconsistencies between this contract and its exhibits or attachments, such conflicts or inconsistencies shall be resolved by reference to the documents in the following order of priority:

1) Colorado Special Provisions, pages __ to __.

2) Contract, pages __ to __.

3) The [RFP/IFB number][Statement of Work], Exhibit A.

4) The Contractor's offer, Exhibit B.

5) Clarification of Conflicts or Inconsistencies, Exhibit __

6) Contract Option Letter etc., Exhibit _

7) Delivery and Acceptance Certificate, Exhibit __

8) Equipment/Personal Property Schedule, Exhibit __

9) Payment Schedule/Amortization Table, Exhibit ___

4. Performance Period

The contract shall be effective upon approval by the State Controller, or designee and, unless sooner terminated, shall continue for _______ months beginning on the first of the month following the commencement date or until all scheduled payments as set forth in Payment Schedule/Amortization Table, Exhibit E, are made. [The commencement date is the date that the State signs the Delivery and Acceptance Certificate (Exhibit __)]. State's acceptance is conditioned upon Vendor's delivery and installation of the Equipment in working order at the site designated in the Statement of Work/Specifications, Exhibit A. Delivery and installation of the Equipment shall be accomplished to the State's sole satisfaction. This contract is intended to be a multiyear contract subject to the Special Provisions, Section 2, Fund Availability, CRS 24-30-202 (5.5).

It is understood the State shall not be liable for payment of work or services nor for costs or expenses incurred by the Contractor prior to the proper execution and approval of this contract.

5. Consideration and Payment Terms

Unless otherwise provided herein, and where appropriate, the State shall establish billing procedures and pay the Lessor the lease payments [and contract prices for services performed and accepted or other items provided and accepted pursuant to the terms of this contract, based on the submission of statements on forms and in a manner prescribed by the State] beginning on the Commencement Date as listed on the Delivery and Acceptance Certificate.

All annual payments due during the course of the fiscal year (July 1st – June 30th) shall be prorated to align with the State's fiscal year (e.g. maintenance and licensing agreements, etc.) and all payments for less than a full month will be prorated on the basis of a 30-day month to align with the month, unless specifically authorized otherwise. Lessor shall direct all calls regarding payments to: State of Colorado, DPA, Div. of Central Services, Attn: Accounts Payable, 1525 Sherman St., Denver, Colorado 80203. Contractor shall direct all calls regarding payments to the Division Accounts Payable office at (303) 866-2433.

a. Lease Payments. Upon execution of the Delivery and Acceptance Certificate, the Lessee shall pay the Lessor, or its assignee, a [monthly][semi-annual][annual] lease payment(s) of $________ according to the Payment Schedule, Exhibit ___, in [arrears][advance] for each month this Contract is effective. The total annual payments due for lease payments shall be as follows:

Fiscal Year Lease Payments Software Maint.

Equip. Maint.

Total

FY2015

FY2016

FY2017

FY2018

FY2019

TOTALS

All payments due and payable hereunder for lease payments shall be remitted to:

[Complete address, phone, fax, and e-mail where payments are directed to]

No security deposit shall be due and payable by the State.

Contractor payments for maintenance shall be remitted to:

c. Other payments. Subject to appropriations, for all other items as designated herein for which the cost is not included in the lease payments or as otherwise priced above, the Lessor shall provide one (1) invoice in triplicate referencing the original contract number. The invoice shall be itemized, stating a detailed description of the services performed, the dates of performance, and amounts charged. Invoices shall be detailed sufficiently to create an audit trail and allow for ease of reconciliation. Services will be invoiced on a monthly basis. All invoices must be submitted for payment within the fiscal year (July 1st – June 30th) for which funds were allocated for that purpose. The final invoice of the fiscal year for services performed by June 30th of each year will be submitted for payment not later than July 10th. Contractor shall send invoices to: State of Colorado, DPA, Div. of Central Services, Attn: Accounts Payable, 633 17th Street, Suite 1600, Denver, CO 80202.

Contractor payments for remaining items shall be remitted to:

It is further understood and agreed that the maximum amount of State funds available for fiscal year __ ending June 30, ____ for monthly payments plus [maintenance][estimated overages], and any authorized additional services for the lease is $________. The liability of the State, at any time, for such payments shall be limited to the unexpended amount remaining of such funds. For the ___-month term of the lease, the total consideration shall be $___________.

The State or the Contractor may send notice regarding changes on the billing and remittance addresses. Late payments are subject solely to the provisions of §24-30-202(24), C.R.S.

Payments pursuant to this contract shall be made as scheduled or earned, in whole or in part, from available funds encumbered for the purchase of the described services. The liability of the State, at any time, for such payments shall be limited to the amount remaining of such encumbered funds. Incorrect payments to the Contractor due to omission, error, fraud, or defalcation shall be recovered from the Contractor by deduction from subsequent payment under this contract or other contracts between the State and the Contractor, or by the State as a debt due to the State.

The State reserves the right to audit the Contractor's books and records for a period of three years after contract expiration

6. Fair Market Value Purchase. Not Applicable this RFP

7. Lessor's Right to Perform for Lessee

If Lessee fails to make any payments except as provided for in Section 8, Fiscal Funding – Availability of Funds for Lease Purchases, or fails to perform or comply with any of its covenants or obligations herein contained, Lessor or its Assignee may at its election make such payment or perform or comply with such covenant or obligation and the amount of such payment. Contingent upon funds for the purpose being appropriated, budgeted, and otherwise made available, Contractor or its Assignees performing or complying with such covenants or obligations, as the case may be, shall be entitled to reimbursement by Lessee for all expenses incurred in connection therewith, together with interest thereon at the rate together with interest at a rate not to exceed that permitted by §24-30-202(24), C.R.S.

8. Fiscal Funding – Availability of Funds for Lease Purchases

a. The parties hereto understand and agree this contract is contingent upon continuing availability of funds as provided in Special Provision Two (2) hereinafter, and that the State is prohibited by law from making fiscal commitments beyond the term of its current fiscal period. The State may terminate this contract as provided in the following sections.

b. The State has reason to believe that sufficient funds will be available for the full term of the contract. Where, for reasons beyond State's control, its funding entity does not allocate funds for any fiscal period beyond the one in which this contract is entered into, or beyond a succeeding fiscal period, where State has exhausted efforts to obtain funds legally available for future fiscal periods, and where such failure to obtain funds does not result from any act or failure to act on the part of State, State will not be obligated to make the payments remaining beyond State's then current fiscal period, nor shall State be liable for any penalty therefore. In that event, State shall notify Contractor of such non‑allocation of funds by sending written notice thereof to the Contractor thirty (30) days prior to the effective date of termination.

c. To supplement the provisions of Special Provision Section 2 of this contract regarding fund availability, and to make certain the understanding of the parties because the contract will extend beyond the current fiscal year, State and Contractor understand and intend that the obligation of the State to pay the annual charges hereunder constitutes a current expense of the State payable exclusively from State's funds and shall not in any way be construed to be a general obligation indebtedness, or other multiple fiscal year financial obligation whatsoever, of the State of Colorado or any agency or department thereof, within the meaning of any provision of Sections 1, 2, 3, 4 or 5 of article XI, Section 20 of article X, of the Colorado Constitution, or any other constitutional or statutory limitation or requirement applicable to the State concerning the creation of indebtedness. Neither the State, nor the Contractor on its behalf, has pledged the full faith and credit of the State, or any agency or department thereof, to the payment of the charges hereunder, and this contract shall not directly or contingently obligate the State, or any agency or department thereof, to apply money from, or levy or pledge any form of taxation to, the payment of the annual charges.

e. In the event that the State terminates this Agreement under this Section, the Lessor may upon the effective date of the termination-immediately take possession of any or all items of Equipment, wherever located, without demand, notice, court order or any other process of law. State acknowledges its obligation to pay open invoices for lease payments [and usage charges] incurred during the time funds were lawfully appropriated.

d. During the term of this Agreement, Lessor may obtain Lessee's Comprehensive Annual Financial Report (CAFR) from the State of Colorado website located at www.state.co.us, under the State Controller's Office. Lessee will additionally provide Lessor with annual proof of appropriation as requested for the ensuing Fiscal year, and such other financial information relating to the ability of Lessee to perform its obligations under this Agreement as may be reasonably requested by Lessor.

9. Further Assurances and Warranty of Governmental Purpose

State represents, covenants and warrants that:

a. It is a duly organized body corporate created by the laws of the State of Colorado, and is authorized by the Constitution and laws of the State of Colorado to enter into the transactions contemplated by this Agreement and to carry out its obligations hereunder; and

b. The State has been duly authorized to execute and deliver this; and

c. The State has ensured all procedures have been met so that this Agreement is enforceable and State has complied with all bidding requirements if necessary; and

d. This contract is a valid State obligation and authorized by State law; and

e. The Lessee has sufficient appropriations or other funds available to pay all amounts due for the current fiscal period; and

f. Colorado is one of the fifty states of the United States; and

g. The financial obligation hereunder is not guaranteed in whole or in part by the United States or any agency or instrumentality thereof; and

h. The Equipment or system will be used for governmental purposes only, and not for business (profit or non-profit), personal, and family or household purposes.

This warranty shall not be construed to be a warranty that this transaction shall satisfy any particular requirements necessary for the Lessor to gain favorable tax treatment for payments made under the contract. Any "opinions of counsel" desired by Lessor must be obtained from independent sources other than the State and at Lessor's expense.

10. Acceptance of Equipment

The Delivery and Acceptance Certificate shall be immediately executed upon satisfactory installation and [diagnostic] testing of the Equipment to the designated location. Upon the execution by the State of the Delivery and Acceptance Certificate, there shall be a presumption and reasonable determination that the State is satisfied with and has accepted the Equipment as being in good condition and repair.

11. Delivery and Acceptance – Vendors Lessor agrees to deliver the Equipment or system in compliance with contract requirements, F.O.B. destination, by the date specified in the solicitation. Delivery and installation arrangements and related costs are the sole responsibility of Lessor.

[Optional ] 12. Modifications to Equipment and Lease Modifications

Lessee may alter or modify the ________ as may be necessary to use the _______ for its intended purposes upon sixty (60) days written notice to Lessor provided the same shall not diminish the value or utility of the ________ or system. Any alterations, changes, modifications, additions, substitutions and improvements made to the Equipment shall immediately become a part of the Equipment and shall be subject to the terms of this Agreement.

Upon Lessee's request and execution of written amendment as provided for in Section 32, Modification and Amendment, Lessor will arrange for the leasing of additions or modifications to the Equipment that are made by or for the original manufacturer, under terms and conditions then generally in effect. Additions are defined as equipment components, services, or one-time charges associated with the Equipment. Any lease modifications shall expire at the same time as the Lease for the Equipment. The payments therefore shall be determined by Lessor and specified in a monthly payment amount for the lease and/or maintenance.

13. Personal Property

The Equipment is, and shall at all times be and remain, personal property of the Contractor notwithstanding that the Equipment or any part thereof may now be, or hereinafter become, in any manner affixed or attached to, or embedded in, or permanently resting upon, real property or any building thereon or any fixtures or attached in any manner to what is permanent as by means of cement, plaster, nails, bolts, screws or otherwise.

14. Enjoyment of Property

Contractor hereby covenants to provide State during the Agreement Term with quiet use and enjoyment of the Equipment, and State shall during the Agreement Terms peaceably and quietly have and hold and enjoy the Equipment, without suit, trouble or hindrance from Contractor except as expressly set forth in this Agreement. Any Assignee of Contractor shall not interfere with such quiet use and enjoyment during the Agreement Term so long as State is not in default pursuant to this Agreement.

15. Location and Inspection

Lessee will agree to not move the Equipment from the location noted in this contract, or an alternate operating location necessary because of relocation of the state program requiring use of the Equipment or system, without the prior written consent of Lessor, which consent shall not be unreasonably withheld. [Should the State decide to change the location of the Equipment, following the initial installation, Contractor shall be responsible for the actual movement of the Equipment. Contractor shall provide a written estimate to the State for the cost of moving the Equipment prior to movement of any equipment.] Lessor shall have the right from time to time during normal business hours to enter upon the premises where the Equipment or system is located for the purpose of confirming the existence, condition, and proper use and operation of the Equipment or system to include review of maintenance records.

16. Liens

State shall not directly or indirectly create, incur, assume or suffer to exist any mortgage, pledge, lien charge, encumbrance or claim on or with respect to the Equipment, except with respect to the respective rights of Contractor and State as herein provided. State shall promptly, at its own expense, take such action as may be necessary to duly discharge any such mortgage, pledge, lien, charge, encumbrance or claim not excepted above if the same shall arise at any time.

17. Assignment

Neither party may assign its rights or duties under this Contract without the prior written consent of the other party, except as provided herein. Except as herein otherwise provided, this Contact shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns.

[Optional] Without the prior written consent of Lessor, Lessee shall not sublet or lend the Equipment to or otherwise assign, transfer, pledge or hypothecate, or grant a security interest in to other than another State agency or institution this contract, the Equipment or system, any interest in this contract or in and to the Equipment, or permit any lien, charge or encumbrance thereon. Lessee's interest herein is not assignable or transferable by operation of law. Lessee will not relinquish possession and use of or abandon the Equipment to any party other than Lessor.

Lessee shall not assert against any assignee any set-off, defense, right to indemnification or counterclaim that Lessee may have against Lessor or any other person, except as authorized by CRS 24-30-202, as stated in the Special Provisions, included herein.

[Optional] Lessee acknowledges and understands that all rights of Lessor in the Equipment and under this lease may be assigned, pledged, mortgaged, transferred or otherwise disposed of, either in whole or in part, without notice to Lessee, unless otherwise noted. Lessor shall not be relieved of its obligations hereunder as a result of any assignment unless Lessee expressly consents thereto. If Lessee is given written notice of any assignment, Lessee agrees to acknowledge receipt thereof in writing if requested and, if so directed therein, to pay directly to such assignee the contract payments and other sums payable hereunder so assigned.

Contractor may assign this Contract and its rights to receive payments, in whole or in part, to one or more assignees, without the consent of State. Contractor shall provide the State with notice of such assignment and upon receipt of such notice of assignment, State will make all payments to the assignee designated, notwithstanding any claim, defense, offset or counterclaim, State may have or claim to have against Contractor or such assignee only to the extent permissible by law. The State in no event shall waive liability, the provisions of the Vendor Offset CRS 24-30-202 (1) & CRS 24-30-202.4, or of any other statutory mandate.

18. Title to Equipment

Title to the Equipment and any and all additions, repairs, replacements or modifications thereto shall be in the Lessor. Lessee shall have no right, title or interest therein or thereto except as expressly set forth in this Agreement.

19. Legal Authority

The Contractor warrants that it possesses the legal authority to enter into this contract and that it has taken all actions required by its procedures, by-laws, and/or applicable law to exercise that authority, and to lawfully authorize its undersigned signatory to execute this contract and to bind the Contractor to its terms. The person(s) executing this contract on behalf of the Contractor warrant(s) that such person(s) have full authorization to execute this contract.

20. Rights in Data, Documents, and Products (State Ownership)

Any research, reports, studies, data, photographs, negatives or other documents, drawings or materials produced using the Equipment provided under this agreements, shall be the exclusive property of the State. The ownership rights described herein shall include, but not be limited to, the right to copy, publish, display, transfer, prepare derivative works, or otherwise use the works. All reports and documents provided to the State under this agreement shall be the exclusive property of the State.

21. Inspection and Acceptance (Services)

The State reserves the right to inspect services provided under this contract at all reasonable times and places during the term of the contract. "Services" as used in this clause includes services performed or tangible material produced or delivered in the performance of services related to the Equipment. If any of the services do not conform with contract requirements, the State may require the Contractor to perform the services again in conformity with contract requirements, with no additional payment. When defects in the quality or quantity of service cannot be corrected by reperformance, the State may (1) require the Contractor to take necessary action to ensure that the future performance conforms to contract requirements and (2) equitably reduce the payment due the Contractor to reflect the reduced value of the services performed. These remedies in no way limit the remedies available to the State in the termination provisions of this contract, or remedies otherwise available at law.

22. Events of Default

Any of the following events shall constitute an event of default (“Event of Default”) hereunder:

a. Lessee's failure to pay any payment of Lease or any other payment required hereunder within thirty (30) days after the date due except as provided in Section 8, Fiscal Funding of this Agreement or Section 2, Fiscal Funding of the Special Provisions of this Agreement, or

b. Lessee or Lessor fails to comply with any other provisions under the Lease or violates any of the covenants or representations made by Lessee or Lessor in the Lease, or

Lessee or Lessor fails to perform any of its obligations under any other Lease entered into pursuant to this Agreement, and such failure or breach continues for a period of thirty (30) days after written notice is received from the injured party, or

23. Remedies

a. Lessee in Default. If Lessee is in default under the Lease, in additional to any rights it may have at law or in equity, Lessor shall have the right, in its sole discretion to exercise any one or more of the following remedies in order to protect its interests, reasonably expected profits and economic benefits.

(1) By written notice to State, declare an amount equal to all payments due during the

Original Term or Renewal Term then in effect through the State’s current fiscal year ending on

June 30th, to be immediately due and payable as liquidated damages and not as penalty, whereupon the same shall become immediately due and payable; and/or

(2) Immediately take possession of any or all items of Equipment, wherever located, without demand, notice, court order or any other process of law in the event Lessee fails to make a monthly payment as specified in Section __ and __. Lessor may enter and take possession of the Equipment and sell or lease the Equipment or sublease it for the account of the Lessee, holding Lessee liable for all payments due up to the effective date of such selling, leasing or subleasing and for the difference due; and/or

(3) Demand that Lessee return any or all such items of Equipment to Lessor and, for each day that Lessee fails to return any item of Equipment, Lessor may demand an amount equal to the Scheduled Payments, prorated on the basis of a 30 day month, in effect immediately prior to such default. Upon repossession or return of such items of Equipment, Lessor shall sell, lease or otherwise dispose of such items in a commercially reasonable manner with or without notice and on a public or private bid, and apply the net proceeds thereof toward the amount due under the Lease, but after deducting (i) in the case of a sale, the estimated fair market value of such items as of the scheduled expiration of the Lease; or (ii) in the case of a lease, the rent due for such items for any period beyond the date of the subsequent lease/sale; and (iii) in either case, all expenses, including but not limited to reasonable legal fees incurred in connection therewith. Any excess net proceeds are to be retained by Lessor.

b. Lessor is in Default. If Lessor is in default under the Lease, Lessee shall have the right, in its sole discretion to exercise any one or more of the following remedies

(1) Withhold payment to Contractor until the necessary services or corrections in performance are satisfactorily completed; and/or

(2) Request the removal from work on the contract of employees or agents of Contractor whom the State justifies as being unqualified, careless, insubordinate, unsuitable, or otherwise unacceptable, or whose continued employment on the contract the State deems to be contrary to the public interest or not in the best interest of the State; and/or

(3) Deny payment for those services or obligations which have not been performed or cannot be performed.

c. Either Party in Default. Upon the occurrence of an Event of Default, the party not in default may, at its option, exercise any one or more of the following remedies:

(1) Upon 30 days written notice to the other party, terminate this Contract; and/or

(2) Proceed by appropriate court action to enforce the terms hereof and/or recover damages for the breach thereof; and/or

(3) Take whatever action at law or inequity may appear necessary or desirable to collect the payments then due and thereafter to become due, or to enforce performance and observance of any obligation, agreement or covenant of State under this Agreement and/or;

(4) Exercise any other available and lawful right or remedy.

The above remedies are cumulative and the parties may exercise any or all of them individually or simultaneously. No right or remedy is exclusive of any other right or remedies herein or those permitted by law or equity.

24. Termination

Except as provided for in Section 8, Fiscal Funding or unless Lessee has properly exercised its option to purchase the Equipment pursuant to this Agreement, Lessee shall, upon the expiration of the term of this Agreement [or upon its termination for other reasons such as the occurrence of an event of default], deliver the Equipment to Lessor unencumbered and in at least as good condition and repair as when delivered to Lessee, ordinary wear and tear resulting from proper use alone excepted, by loading the Equipment, at Lessee’s sole expense, on such carrier, or delivering the Equipment to such location, as Lessor shall provide or designate at or within a reasonable distance from the general location of the Equipment. If Lessee fails to deliver the Equipment to Lessor, as provided in this Section, on or before the date of termination of this Agreement, Lessee shall pay to Lessor upon demand, for the hold-over period, a portion of the total payment for the applicable period as set forth in the Payment Schedule prorated from the date of termination of this Agreement to the date Lessee either redelivers the Equipment to Lessor or Lessor repossesses the Equipment.

25. Use and Licenses

Lessee shall pay and discharge all operating expenses associated with its use of the Equipment and shall cause the Equipment to be operated by qualified persons only. Lessee shall use the Equipment only for its proper purposes and will not install, use, operate or maintain the Equipment improperly, carelessly, or in violation of any applicable law, ordinance, rule or regulation of any governmental authority, or in a manner contrary to the nature of the Equipment or the use contemplated by its manufacturer. Lessee shall keep the Equipment at the location stated on the Delivery and Acceptance Certificate executed by Lessee upon delivery of the Equipment until Lessor, in writing, permits its removal, and the Equipment shall be used solely in the conduct of the Lessee’s operations. Lessee shall obtain, at its sole expense, all registrations, permits, and licenses, if any, required by law for the installation and operation of the Equipment.

26. Utilities

Lessee shall pay all charges for gas, water, steam, electricity, light, heat or power, telephone or other utility service furnished to or used on or in connection with the Equipment (including any charges for installation of such services) during the Agreement Term. There shall be no abatement of a Scheduled Payment on account of interruption of any such services.

27. Damage to or Destruction of Equipment

Lessee shall be responsible for any loss or damage or destruction of or damage to the Equipment or system (other than loss, damage, or destruction attributable to the inherent defects in the Equipment or system not reasonably discovered during inspection, whether or not insured, until the Equipment is returned to Lessor. In event of damage to or loss or destruction of the Equipment (or any item thereof), Lessee shall promptly notify Lessor in writing of such fact and shall utilize insurance proceeds and other available funds to, at the option of Lessee, (a) place the same in good repair, condition and working order for purposes intended; or (b) replace the Equipment with like personal Equipment in good repair, condition and working order and transfer clear title to such replacement Equipment to Lessor, whereupon such Equipment shall be subject to this lease and be deemed the Equipment for purposes hereof; or (c) pay to Lessor the [total of unpaid Rental Payment(s) for the current fiscal year of lease plus the purchase option price (if any) set forth in the contract, or in the alternative, the fair market value of the Equipment or system][the Purchase Option price then owing pursuant to Section 6].

Lessee shall not be entitled to any diminution of the amounts payable by it pursuant to this Agreement.

28. Liability Insurance

At its own expense and in accordance with 24-30-1501, et seq. C.R.S., State shall provide evidence of a satisfactory self-insurance program in the amounts and in accordance with 24-10-101, et seq., C.R.S., as amended, for public liability, self-insurance coverage, and to protect the value of the Equipment, only to the extent of the available and average coverage. Lessee shall pay the deductible, currently $1,000.00, from its operating funds. Upon Lessor's request Lessee shall provide Lessor with a certificate of such self-insurance. Such coverage shall be kept in effect for the duration of the Lease, and the amount of the coverage will be in accordance with the requirements of the aforementioned-referenced statutes. Any provisions of this Lease, whether or not incorporated herein by reference, shall be controlled and limited by these statutes. In the event of any loss, damage, injury or accident involving the Equipment, Lessee will promptly provide Lessor with written notice thereof and Lessor will make available to Lessee all information and documentation relating thereto and Lessor shall participate and cooperate with Lessee in making any claim for insurance in respect thereof.

29. Insurance

If Lessor’s presence is required on Lessee’s work-site in order to provide installation, training, on-site maintenance, or services other than Equipment inspection as provided herein, Lessor shall provide minimum insurance as specified below.

A. Standard Insurance Requirements

1. The contractor shall obtain, and maintain at all times during the term of this contract, insurance in the following kinds and amounts:

(a) Workers’ Compensation Insurance as required by state statute, and Employer’s Liability

Insurance covering all of contractor’s employees acting within the course and scope of their employment.

(b) Commercial General Liability Insurance written on ISO occurrence form CG 00 01

10/93 or equivalent, covering premises operations, fire damage, independent contractors, products and completed operations, blanket contractual liability, personal injury, and advertising liability with minimum limits as follows:

(1) $1,000,000 each occurrence;

(2) $1,000,000 general aggregate;

(3) $1,000,000 products and completed operations aggregate; and

(4) $50,000 any one fire.

If any aggregate limit is reduced below $1,000,000 because of claims made or paid, the contractor shall immediately obtain additional insurance to restore the full aggregate limit and furnish to the State a certificate or other document satisfactory to the State showing compliance with this provision.

(c) Automobile Liability Insurance covering any auto (including owned, hired and non owned autos) with a minimum limit as follows: $1,000,000 each accident combined single limit.

(d) Professional liability insurance with minimum limits of liability of not less than

$____N/A___________.

B. The State of Colorado shall be named as additional insured on the Commercial General

Liability and Automobile Liability Insurance policies (leases and construction contracts will require the additional insured coverage for completed operations on endorsements CG 2010 11/85, CG 2037, or equivalent). Coverage required of the contract will be primary over any insurance or self-insurance program carried by the State of Colorado.

C. The Insurance shall include provisions preventing cancellation or non-renewal without at least 45 days prior notice to the State by certified mail.

D. The contractor will require all insurance policies in any way related to the contract and secured and maintained by the contractor to include clauses stating that each carrier will waive all rights of recovery, under subrogation or otherwise, against the State of Colorado, its agencies, institutions, organizations, officers, agents, employees and volunteers.

E. All policies evidencing the insurance coverages required hereunder shall be issued by insurance companies satisfactory to the State.

F. The contractor shall provide certificates showing insurance coverage required by this contract to the State within 7 business days of the effective date of the contract, but in no event later than the commencement of the services or delivery of the goods under the contract. No later than 15 days prior to the expiration date of any such coverage, the contractor shall deliver the State certificates of insurance evidencing renewals thereof. At any time during the term of this contract, the State may request in writing, and the contractor shall thereupon within 10 days supply to the State, evidence satisfactory to the State of compliance with the provisions of this section.

G. Notwithstanding subsection A of this section, if the contractor is a “public entity” within the meaning of the Colorado Governmental Immunity Act CRS 24-10-101, et seq., as amended (“Act’), the contractor shall at all times during the term of this contract maintain only such liability insurance, by commercial policy or self-insurance, as is necessary to meet its liabilities under the Act. Upon request by the State, the contractor shall show proof of such insurance satisfactory to the State.

H. Policies which restrict the above requirements without advance written approval may be deemed insufficient and can be cause for cancellation of purchase orders and/or contracts. Additional coverage may be required in specific procurements. Additionally, policies which do not contain restrictions to specific jobs or services may be used as a blanket policy to cover recurring services performed for the State of Colorado. Direct certificates to the Attention of the Procurement/Contract Officer:

Department of Personnel and Administration

Division of Central Services

Attn: _____________

Denver, Colorado 802__

Phone: (303) 866-XXXX

FAX (303) 866-XXXX

Email:

30. Representatives and Notice

A. Representatives. For the purpose of this contract, the individuals identified below are hereby designated representatives of the respective parties. Either party may from time to time designate in writing new or substitute representatives:

For the State:

[Name, Title, Phone Number, FAX, and e-mail of Project Lead] For the Contractor: [Name, Title, Phone Number, FAX, and e-mail of Project Lead]

B. Authority. With respect to the representative of the State, such individual shall have the authority to ___________________________, inspect and reject services, approve invoices for payment, and act otherwise for the State, except with respect to the execution of formal amendments to or termination of this agreement pursuant to Sections ___ and ___. [or options pursuant to Section ].

C. Notices. All notices required to be given by the parties hereunder shall be hand delivered or given by certified or registered mail or other confirmable means to the individuals at the addresses set forth below. [Notice under this contract shall be sufficient if sent by U.S. Mail, postage prepaid, to the addressee set out below. Such notice shall be deemed given forty-eight (48) hours after deposited in the U.S. Mail]. Either party may from time to time designate in writing substitute addresses or persons to whom such notices shall be sent.

For the State:

Name:

cc:

Department of Personnel & Admin.

Department and Division:

Attn:

Address:

E-Mail:

Telephone:

FAX:

For the Contractor:

31. Governmental Immunity

Notwithstanding any other provision of this [contract] to the contrary, no term or condition of this contract shall be construed or interpreted as a waiver, express or implied, of any of the immunities, rights, benefits, protection, or other provisions of the Colorado Governmental Immunity Act, Section 24-10-101, et.seq., CRS, as now or hereafter amended. The parties understand and agree that liability for claims for injuries to persons or property arising out of negligence of the State of Colorado, its departments, institutions, agencies, boards, officials and employees is controlled and limited by the provisions of Section 24-10-101, et. seq., CRS, as now or hereafter amended and the risk management statutes, Section 24-30-1501, et. seq., CRS, as now or hereafter amended.

32. Severability

To the extent that this contract may be executed and performance of the obligations of the parties may be accomplished within the intent of the contract, the terms of this contract are severable, and should any term or provision hereof be declared invalid or become inoperative for any reason, such invalidity or failure shall not affect the validity of any other term or provision hereof.

33. Waiver

The waiver of any breach of a term, provision, or requirement of this contract shall not be construed or deemed as waiver of any subsequent breach of such term, provision, or requirement, or of any other term, provision, or requirement.

34. Entire Understanding

This contract is intended as the complete integration of all understandings between the parties. No prior or contemporaneous addition, deletion, or other amendment hereto shall have any force or effect whatsoever, unless embodied herein in writing. No subsequent novation, renewal, addition, deletion, or other amendment hereto shall have any force or effect unless embodied in a writing executed and approved pursuant to the State Fiscal Rules.

35. Modification and Amendment

This contract is subject to such modifications as may be required by changes in Federal or State law, or their implementing regulations. Any such required modification shall automatically be incorporated into and be part of this contract on the effective date of such change as if fully set forth herein. Except as provided above, no modification of this contract shall be effective unless agreed to in writing by both parties in an amendment to this contract that is properly executed and approved in accordance with applicable law.

[Optional] 36. Reporting [Unless otherwise specified, Contractor shall provide the State with written reports on an as requested basis for services provided herein [provide specific title and details required whenever possible]. The State shall limit their requests to those reasonably necessary to conduct State business. All reports shall be submitted electronically in a format compatible with the State systems unless expressly authorized otherwise].

The preparation of reports in a timely manner shall be the responsibility of the Contractor and failure to comply may result in delay of payment of funds and/or termination of the contract. Required reports shall be submitted to the State within ten (10) days of request.

37. Documents and Filings

Lessee will cooperate with Lessor in executing such instruments, financing statements and assurances prepared by Lessor as Lessor deems necessary or advisable for the protection of Lessor's interests in property leased under this contract.

[Optional] 38. Data and Document Deliverables

The Contractor shall deliver, by the dates specified in Exhibit __, the data or documents described therein.

Unless otherwise specified, software documentation shall be delivered that meets the following standards:

A. The documentation shall be in paper, human readable format, which clearly identifies the programming language and version used, and when different programming languages are incorporated, identifies the interfaces between code programmed in different programming languages.

B. The documentation shall contain source code in a paper, human readable format, which describes the program logic, relationship between any internal functions, and identifies the disk files which contain the various parts of the code.

C. Detailed "commenting" of source code may be used to partially satisfy the documentation requirements, although documentation shall also include a flow chart, which identifies the program flow between files and functions. Comments may be used to document internal flow control in functions.

D. Files containing the source code shall be delivered, or may be left on the host machine so long as the files and their location are identified, and their significance to the program described, in the documentation.

E. Documentation shall describe error messages and the location in the source code, by page, line number, or other suitable identifier, where the error message is generated.

It is the intent of the parties that documentation be written so persons reasonably proficient in the use of the program language involved can efficiently use the documentation to understand the program structure, iterative and other control techniques, and decipher error messages should they occur. Within the rights granted elsewhere in this contract, the Contractor warrants that the delivered software will be sufficiently descriptive to enable maintenance and modification of the software to permit change to addresses and telephone numbers in computer generated documentation, addition of fields to the database, revisions of report formats, including breakpoints and summary computations, ___________________________.

39. Confidentiality of Records

In the event the Contractor shall obtain access to any records or files of the State in connection with agreement, or in connection…