ITC49_GENERAL_LEASE_TERMS_CONDITIONS~1.doc

APPENDIX 4

COMMONWEALTH OF MASSACHUSETTS

STATEWIDE CONTRACT ITC49 FOR IT ASSET TERM LEASE SERVICES

GENERAL TERMS AND CONDITIONS

The following General Terms and Conditions shall apply to and be incorporated by reference into any Lease engagement entered into by a Lessee under the Statewide Contract ITC49 for IT Asset Lease Services.

Definitions

“Lessee” shall include any Eligible Entity authorized to enter into a Lease under this Statewide Contract.

“Eligible Entity” includes all eligible public entities of the Commonwealth of Massachusetts as noted on the “Issuers” tab for this Statewide Contract on www.comm-pass.com.

“Funding Authority” shall mean the governing body authorized by law to appropriate or obtain funding for the Lessee. The Legislature shall be the Funding Authority for Commonwealth State Departments. For other Eligible Entities, the Funding Authority shall be the legal governing body authorized to secure funding to support financial obligations for that Eligible Entity. The underlying “obligor” will be the respective Lessee under each Lease subject to appropriation or other funding from the Lessee’s Funding Authority.

“Statewide IT Asset Lease Services Contractor/Lessor” shall include an approved financing contractor authorized to provide Lease financing under this Statewide Contract, including any Successor or Assignee entity approved by the Lessee and OSD for State Departments, or the appropriate Funding Authority for other Eligible Entities.

Fiscal Period means Lessee’s then current fiscal year. For State Departments the fiscal period/year runs from July 1st through June 30th.

Hierarchy of Statewide IT Asset Lease Contract Document Precedence

By execution of the Standard Contract Form for this Statewide Contract, a Statewide IT Asset Lease Services Contractor/Lessor agrees that all terms governing performance of this Statewide Contract and doing business in Massachusetts are attached or incorporated by reference herein according to the following hierarchy of document precedence: the Commonwealth of Massachusetts Terms and Conditions; the Standard Contract Form, including the Instructions and Contractor Certifications; the Request for Response (RFR), which incorporates these Statewide Contract ITC49 For IT Asset Lease Services General Terms and Conditions; the Contractor’s Response to the RFR; and any additional negotiated terms, provided that any additional negotiated terms that comply with 801 CMR 21.07, and any terms that amend the RFR or Response that provide lower costs, are more cost effective or are a better value, shall take precedence over the RFR and the Contractor’s Response. This hierarchy of documents constitutes the entire agreement between the parties. Each Lease Schedule executed under this Statewide Contract constitutes a separate and independent (stand-alone) Lease obligation.

Term and Termination

The “Commencement Date” for each Lease is the date a Lease has been executed by an authorized signatory of the Lessee and a Statewide IT Asset Lease Services Contractor/Lessor, which shall coincide with the date on which the Assets listed in such Lease is accepted by the Lessee in the manner described herein and the date when interest commences to accrue under such Lease. Statewide IT Asset Lease Services Contractor/Lessor shall have no obligation to make any disbursements until the Commencement Date and as outlined under “Payment to IT Asset Contractor” below.

All Leases will terminate on the last date of the Lease Payment Schedule when final payment has been issued to the Statewide IT Asset Lease Services Contractor/Lessor and all other obligations have been completed by the Lessee and the Statewide IT Asset Lease Services Contractor/Lessor, unless terminated earlier due to default or non-appropriation or as otherwise provided herein.

Performance and Payment Time Frames Which Exceed Contract Duration

All LEASEs entered into during the duration of this Statewide Contract, including those that have not yet been accepted by the Lessee, and whose performance and payment time frames extend beyond the duration of this Statewide Contract, shall remain in effect for performance and payment purposes (limited to the time frame and services established per each written Request for Quotes) and shall be subject to the requirements of this Statewide Contract. No new LEASE’s may be executed under this Statewide Contract after this contract has expired, or after execution of a new Statewide Contract for Tax-Exempt Lease Purchase Services, whichever occurs first.

Eligibility for IT Asset Lease Services During the life of this Statewide IT Asset Lease Services Contract, Contractors will respond to requests for Lease financing quotes from Lessees under the following conditions:

The IT Asset is information technology, including telecommunications, equipment, associated software and peripheral equipment, and other IT Assets authorized by the ITC49 Strategic Sourcing Team (SST) and the Operational Services Division (OSD).

The Lessee intends to Lease the IT Asset to be used for the lesser of four (4) years or the useful life of the IT Asset The Lessee certifies that any IT Asset listed in a Lease Schedule is essential to the operations of the requesting Lessee and is required for immediate use and for the duration of the Lease Schedule.

The Lessee and the Statewide IT Asset Lease Services Contractor/Lessor have agreed upon the useful life of the IT Asset and a Schedule for Payments which is outlined in the Lease Payments Schedule.

The Statewide IT Asset Lease Services Contractor/Lessor must be able to provide evidence that it has procured funding for the specified IT Asset without a public offering of any part of an Acceptance Certificate.

Statewide IT Asset Lease Services Contractor/Lessor will pay the IT Asset Contractor within five (5) business days, of the receipt of the Acceptance Certificate, without a reasonable alternative and demonstrated need that is not disadvantageous to the Commonwealth.

The Lease Quotation Form and any other Lease required Exhibits have been signed by the authorized signatory of the Lessee and a Statewide IT Asset Lease Services Contractor/Lessor.

For Executive Departments, the multiple fiscal year funding and budgeting plan for a Lease Schedule includes confirmed funding for the current fiscal year of Lease obligations.

Statewide IT Asset Lease Services Contractor/Lessor The IT Asset Lease Services Contractor/Lessor shall promote a consistent process for all Lessees to secure Lease financing in accordance with the specified parameters of this Statewide Contract and shall not insert its own protocols, forms or practices in conflict with the terms of the Statewide Contract.

The IT Asset Lease Services Contractor/Lessor must submit quarterly performance measurement reports to the Commonwealth Contract Manager. Details on projects or IT Asset funded shall include: name of Lessee, payments received, balance due, interest rate, and length of payment schedules, End Date, as well as any pending projects or issues within the Commonwealth.

Any change in key personnel requires notification and approval of the SST through the process outlined under the Change Notification section of the RFR.

The IT Asset Lease Services Contractor/Lessor must notify OSD of the identity of any subcontractors that will be used under the Statewide Contract including the names of subcontractors, summaries of their qualifications, experience and duties. The IT Asset Lease Services Contractor/Lessor must also indicate whether these subcontractors are necessary for performance (loss of subcontractor may affect the IT Asset Lease Services Contractor/Lessor's ability to perform) or are easily replaceable as needed. No subcontractor will use underwriters on any Statewide Contract.

In addition, a Statewide IT Asset Lease Services Contractor/Lessor may identify subcontractors or potential third parties that meet the same level of qualifications or banking restrictions of the Commonwealth for Lease financing, or accepting Commonwealth payments as prescribed by the State Treasurer, that may have Lease payments or rights under an approved Assignment subject to the terms of the Assignment section herein.

IT Asset Lease Process and Certifications

The following is an example of the process that a Lessee will follow to obtain Lease Financing under the Statewide Contract. Selected IT Asset Lease Services Contractor/Lessors must be able to assist Lessees in following this process and meeting the specified obligations of the IT Asset Lease Services Contractor/Lessor.

Lessee agrees to Lease from Lessor certain “IT Asset(s)” as described in each Lease Schedule, which together with a Lease Payment Schedule constitute a “Schedule”, subject to the terms and conditions of this Statewide Contract and for the purposes set forth in each Schedule.

Additional IT Assets may be added to the Lease Schedule from time to time by execution of additional Lease Schedules by the parties hereto and as otherwise provided herein. Each Schedule and the terms and provisions of this Agreement (which includes all exhibits hereto, together with any amendments and modifications pursuant thereto) which are incorporated by reference into an Lease Schedule shall constitute a separate and independent Lease.

This Statewide Contract is not a commitment by any Statewide IT Asset Lease Services Contractor/Lessor to enter into any Lease not currently in existence, and nothing in this Agreement shall be construed to impose any obligation upon Statewide IT Asset Lease Services Contractor/Lessor to enter into any proposed Lease, it being understood that, whether the Statewide IT Asset Lease Services Contractor/Lessor enters into any proposed Lease, shall be a decision solely within the Statewide IT Asset Lease Services Contractor/Lessor's discretion, subject to mutual agreement between Lessee and Statewide IT Asset Lease Services Contractor/Lessor.

Lessee will cooperate with Statewide IT Asset Lease Services Contractor/Lessor in the review of any proposed Lease. Lessee understands that a Statewide IT Asset Lease Services Contractor/Lessor requires certain documentation and information necessary to enter into any Lease and Lessee agrees to provide Statewide IT Asset Lease Services Contractor/Lessor with documentation or information that the Statewide IT Asset Lease Services Contractor/Lessor may request in connection with Statewide IT Asset Lease Services Contractor/Lessor's review of any proposed Lease, provided any forms or other documents to establish a Lease are the approved Exhibits under this Statewide Contract. Acceptable documentation may include, without limitation, documentation concerning the IT Asset and its contemplated use and location and documentation or information concerning the financial status of Lessee and other matters related to Lessee.

Lease Financing Request Process

Lessees make Lease financing requests by filling out a Lease Quotation Request (LQR) Form signed by the Lessee. The LQR is sent to the IT Asset Lease Services Contractor/Lessors for a quote on the proposed Lease, as prescribed in the ITC49 Contract User Guide (i.e., Instructions on How to Use Statewide Contract ITC49).

The IT Asset Lease Services Contractor/Lessors must respond to requests for quotes by Lessees for Lease Financing within five (5) business days, unless the Lessee provides a longer period for responses. Lease quotes are made by filling out the Payment Schedule of the Quotation Form and returning this completed form to the Lessee.

Statewide IT Asset Lease Services Contractor/Lessors, when receiving requests for quotes, should suggest changes in a Lessee’s submission that may result in a lower Lease rate or other cost savings, where possible. These suggestions will enhance a Contractor’s chance of being selected to provide Lease financing.

The Statewide IT Asset Lease Services Contractor/Lessor may request audited financial statements or other financial information as necessary to provide quotes. IT Asset Lease Services Contractor/Lessors can refuse to provide the requested Lease financing, but must inform the requesting Lessee of this refusal within five (5) business days of receipt of the request for a quote, and specify the reason for non-offer in the reply.

Statewide IT Asset Lease Services Contractor/Lessors are not mandated to submit a quote, however, continued refusal or failure to respond to requests may subject the Statewide IT Asset Lease Services Contractor/Lessor to suspension or termination from the Statewide Contract.

Lessees will notify their choice for IT Asset Lease Services Contractor/Lessor within five (5) business days of receipt of the quotes or the IT Asset Lease Services Contractor/Lessor may withdraw its quote.

For each transaction, the Lessee and the Statewide IT Asset Lease Services Contractor/Lessor will negotiate a Payment Schedule through the quote process. Each responding IT Asset Lease Services Contractor/Lessor must submit a quote that would remain in effect for thirty (30) days, or a longer period if offered.

The Quotation Form must be executed by authorized signatories for the Lessee and Statewide IT Asset Lease Services Contractor/Lessor, subject to any internal funding approval protocols for the Lessee. The executed Quotation Form confirms the commitment of the Lessee to utilize and pay for Lease financing and the Statewide IT Asset Lease Services Contractor/Lessor's commitment to provide Lease financing for the specified IT Asset in accordance with the terms of this Statewide Contract.

This commitment will be void if the specified IT Asset is not accepted by the Lessee within the time frame specified on the Quotation Form or the Lessee or IT Asset Lease Services Contractor/Lessor fail to substantially comply with the terms of the Statewide Contract.

The Lessee will complete the necessary Acceptance Certificate, Essential Use Letter, and Certificate of Appropriation.

All quotes are public documents under the Massachusetts Public Records Law. Public records requests must be made to the individual Lessees and Statewide IT Asset Lease Services Contractor/Lessors shall not respond to public request related to any Lease without the approval of the Lessee unless the response is mandated by subpoena or other mandate by law.

Acceptance of IT Asset A Lessee will notify the Statewide IT Asset Lease Services Contractor/Lessor as soon as reasonably practicable after the delivery of the IT Asset. The Lessee, upon acceptance, will certify that the IT Asset meets all necessary delivery and installation specifications, by sending the Statewide IT Asset Lease Services Contractor/Lessor an approved IT Asset Contractor invoice and a completed and approved Acceptance Certificate.

Title to IT Asset An Eligible Entity shall not hold title to IT Assets under a Lease on this Contract.

While Assignment of any payments or the Assignment of any rights, obligations or title to any IT Asset under any Schedule under this Statewide Contract is not authorized without prior approval of the Lessee in accordance with the Assignment provisions herein. In the event of an authorized Assignment, all rights and obligations and title rights under any Schedule will automatically be assigned to the Assignee IT Asset Lease Services Contractor/Lessor provided that any Assignment (whether approved or not) shall automatically be subject to all the terms under this Statewide Contract without the requirement for the Assignee’s signature or assent, and provided that the terms of any Schedule and the terms of this Statewide Contract may not be amended, overwritten or altered in any manner without prior approval of the Lessee and OSD, and shall follow the IT Asset under any Schedule until the Lease is completed or otherwise terminated.

Payment to IT Asset Contractor

The Statewide IT Asset Lease Services Contractor/Lessor must pay the IT Asset Contractor within five (5) business days of the Lessee’s receipt of the approved IT Asset Contractor invoice and completed and approved Acceptance Certificate as outlined in “Acceptance of IT Asset” above.

Lessees under this Statewide Contract will not make advance payments, or establish escrow accounts for Leases. A Lease schedule must include the delivery of all IT Assets under that Lease at the same time and may not include staggered deliveries. If staggered deliveries are anticipated, then each of the deliveries must be included under a separate Lease schedule. Lessees may not agree to establish escrow accounts under this Statewide Contract.

IT Asset Contractor Warranties

All manufacturer’s warranties will be passed through to the Statewide IT Asset Lease Services Contractor and Eligible Entity. During the period of the Lease, the Statewide IT Asset Lease Services Contractor hereby irrevocably appoints the contracting Eligible Entity its agent and attorney‑in‑fact during the Lease Term of every IT Asset, so long as the Eligible Entity shall not be in default hereunder, for the sole purpose of asserting from time to time whatever claims and rights, including warranties of the IT Asset, which the Statewide IT Asset Lease Services Contractor may have against the IT Asset Contractor of the IT Asset. A Lessee's remedies for the breach of any IT Asset Contractor warranty, indemnification or representation shall be against the IT Asset Contractor of the IT Asset, and not against an IT Asset Lease Services Contractor/Lessor, or any assignee, nor shall such matter have any effect on the rights and obligations of the Lessee or the IT Asset Lease Services Contractor/Lessor with respect to a Lease. Lessees expressly acknowledge that the IT Asset Lease Services Contractor/Lessor makes, and has made, no representation or warranties whatsoever as to the existence or availability of any such warranties of the IT Asset by the IT Asset Contractor.

Disclaimer of Warranties, Liability Statewide IT Asset Lease Services Contractor/Lessor makes no warranty or representation, either express or implied, as to the value, design, condition, merchantability or fitness for particular purpose or fitness for use of the IT Asset, or warranty with respect thereto whether express or implied, and lessee accepts such IT Asset as is and with all faults. In no event shall Statewide IT Asset Lease Services Contractor/Lessor be liable for any incidental, indirect, special or consequential damage in connection with or arising out of any Lease or the existence, furnishing, functioning or lessee's use of any item, product or service provided for in any Lease. The Limitation of Liability for Information Technology (and other contracts as authorized) listed on page 4 of the Standard Contract Form is authorized to apply to this Contract and Clarifies Section 11 of the Commonwealth Terms and Conditions.

Use of the IT Asset and Maintenance Lessees will not install, use, operate or maintain the IT Asset improperly, carelessly, in violation of any applicable law or in a manner contrary to that contemplated by this Lease. Lessees shall provide all permits and licenses, if any, necessary for the installation, operation and use of the IT Asset.

If a Lessee is required to or exercises any right that it may have to return any Item of the IT Asset under the terms and conditions of this Lease, Lessee shall return the IT Asset to IT Asset Lease Services Contractor/Lessor in a condition which will permit the IT Asset Lease Services Contractor/Lessor to be eligible for the manufacturer's or supplier's standard maintenance contract without incurring any expense to repair or rehabilitate the IT Asset.

Lessee agrees to comply in all respects with all applicable laws, regulations and rulings of any legislative, executive, administrative or judicial body.

Personal Property, Use and Inspection

The IT Asset acquired under a Lease shall at all times be and remain, personal property notwithstanding that the IT Asset or any part thereof may be, or may hereafter become, in any manner affixed or attached to real property.

Once installed, no item of the IT Asset will be moved from the location specified for it in the Lease on which such item is listed without Statewide IT Asset Lease Services Contractor/Lessor's written consent, which consent shall not be unreasonably withheld.

An IT Asset Lease Services Contractor/Lessor hereby covenants that it will not interfere with a Lessee's quiet use and enjoyment of the IT Asset during the Lease so long as the Lessee is not in default under a Lease. An IT Asset Lease Services Contractor/Lessor shall have the right at all reasonable times during business hours to enter into and upon the property of a Lessee for the purpose of inspecting the IT Asset.

Maintenance of IT Asset by Lessee A Lessee will, at the Lessee's own cost and expense (which may be financed as part of the Lease) maintain, preserve and keep the IT Asset in good repair, working order and condition, and the Lessee will from time to time make or cause to be made all necessary and proper repairs, replacements and renewals.

An IT Asset Lease Services Contractor/Lessor shall have no responsibility in any of these matters or for the making of improvements or additions to the IT Asset. If requested by the IT Asset Lease Services Contractor/Lessor, the Lessee will enter into a maintenance contract for the IT Asset with the IT Asset Contractor.

Modification or Alteration of IT Asset Lessee shall have the right at its own cost and expense (which may be financed under the Lease) of making additions, modifications and improvements to the IT Asset (not replacement), and these shall become the property of the IT Asset Lease Services Contractor/Lessor and be included under the terms of the Lease as part of the IT Asset.

Any remodeling, additions, modifications and improvements shall not in any way damage the IT Asset, cause the IT Asset to be used for purposes other than those authorized under the constitutional provisions and laws applicable to Lessee, or adversely affect the IT Asset Lease Services Contractor/Lessor's title rights to the IT Asset.

Further, the IT Asset, as improved (or altered upon completion of remodeling, additions, modifications made) shall be of a value not less than the value of the IT Asset immediately prior to the remodeling or the making of such additions, modifications and improvements;

Lessee may not permit any mechanic's or other lien to be established or remain against the IT Asset for labor or materials furnished in connection with any remodeling, substitutions, additions, modifications, improvements, repairs, renewals or replacements so made by Lessee or for any other reason without the IT Asset Lease Services Contractor/Lessor's prior written consent.

No application for credit ratings related to Lease financing under the Statewide IT Asset Lease Services Contract will be made by the Commonwealth, nor may a Statewide IT Asset Lease Services Contractor/Lessor seek such ratings.

Insurance The Statewide IT Asset Lease Services Contractor (and its insurers, if any) shall bear all risk of loss to the IT Asset. The Statewide IT Asset Lease Services Contractor shall hold title to the IT Asset and shall be fully responsible for the risk of loss and insurance costs for any loss, damage or liability associated with the IT Asset. The Eligible Entity shall be liable for loss or damage to the IT Asset due to the negligence of the Eligible Entity or theft by a state employee.

Commonwealth Insurance

State Departments of the Commonwealth of Massachusetts are self-insured and do not pay for additional insurance, which means that these Lessees do not purchase separate personal and property liability insurance, but instead pay adjudicated or settled damages through its own funding appropriated by its Funding Authority, the Legislature.

The Commonwealth does not provide certificates or other proof of insurance since this is provided for in the statute M.G.L. c. 258 (which has the same effect). Therefore, providing this information should obviate the need for providing further proof of insurance. Departments are prohibited from insuring Commonwealth property under M.G.L. c. 29, § 30 absent specific legislative authorization. This means that a department is prohibited from insuring its property or equipment from damage or loss.

In addition to being prohibited from insuring its own property, a department may not insure property it does not own. Massachusetts employees are covered under the Massachusetts Tort Claims Act under M.G.L. c. 258 which covers liability for personal and property damages caused by the Commonwealth in the course of its official duties. Claims that are properly presented and finalized are paid by the Commonwealth in accordance with this statute, subject to appropriation and available funds in the Liability Management Reduction Fund (created under M.G.L. c. 7A, § 16).

Lessee Representations And Covenants Lessee represents, covenants and warrants for the benefit of Statewide IT Asset Lease Services Contractor/Lessor under this Statewide Contract for each Lease entered into under the statewide contract that:

Lessee shall be duly authorized to execute each Lease and ensure that all requirements have been met and procedures followed to ensure the validity and enforceability of a Lease;

Lessee shall comply with all public billing requirements applicable to this statewide contract and each Lease under this statewide contract;

During the term of this statewide contract all Leased IT Assets will be used by any Lessee solely and exclusively for the purpose of performing essential governmental or proprietary functions consistent with the permissible scope of the Eligible Entity’s/Lessee's authority and this statewide contract and will not sublet or lease the IT Asset without prior approval of the Statewide IT Asset Lease Services Contractor/Lessor and for Commonwealth Lessees, prior approval of OSD;

The IT Asset is and will remain personal property and will not be deemed to be affixed to or a part of the real estate on which it may be situated;.

Lessee will provide the Statewide IT Asset Lease Services Contractor/Lessor with financial statements, budgets, proof of appropriation or other documentation for the current or subsequent fiscal year to support the ability of the Lessee to fund Lease payments;

Lessee certifies that any IT Asset under a Lease supports an immediate need for the IT Asset listed on each schedule and the Lessee expects to make immediate use of IT Asset.

Liens, Taxes, Other Governmental Charges and Utility Charges Lessee shall keep the IT Asset free of all levies, liens and encumbrances except those created by each Lease. The parties to this Agreement contemplate that the IT Asset will be used for governmental or proprietary purposes of Lessee and that the IT Asset will therefore be exempt from all property taxes. If the use, possession or acquisition of any IT Asset is nevertheless determined to be subject to taxation, Lessee shall pay when due all taxes and governmental charges lawfully assessed or levied against or with respect to such IT Asset. Lessee shall pay all utility and other charges incurred in the use and maintenance of the IT Asset. Lessee shall pay such taxes or charges as the same may become due.

Appropriation of Lease Payments Appropriations for expenditures by Lessees of the Commonwealth, and authorizations to spend for particular purposes, are made on a fiscal year basis. The fiscal year of the Commonwealth is the twelve‑month period ending June 30th of each year. The fiscal year for other Lessees will be identified at the time of a Lease engagement. The obligations of the Lessee under this Lease for each and every fiscal year following the fiscal year in which this Lease is executed are subject to the appropriation or other available funds to the Lessee sufficient to discharge the Lessee's obligations which accrue in that fiscal year, and authorization to spend such funds for the purposes of the Lease. In accordance with the requirements of Internal Revenue Code Section 103, and state constitutional provisions, Lease obligations may not be treated as a debt and a Lease shall create no legal obligation to appropriate funds for payment of Lease payments. A Lease Acceptance Certificate under the Statewide IT Asset Lease Services Contract is subject to termination in whole, but not in part, by the Commonwealth in the event of non-appropriation, and a non-appropriation shall not be considered a default that results in the acceleration of future Lease payments or any other default remedies other than the default remedies allowable by state or federal law in the event of non-appropriation.

Reasonable Efforts to Maintain Authorizations Each Lessee agrees to do all things lawfully within its power to timely request, obtain and maintain funds and all necessary authorizations to fund each fiscal year of Lease payments. In the event it appears likely that funding will not be obtained or substantially reduced or delayed, the Lessee must promptly notify the IT Asset Lease Services Contractor/Lessor of the funding issues. Each Lessee's obligation under an Acceptance Certificate is severable and the cancellation of a Lessee's obligations under a particular Acceptance Certificate due to non‑appropriation shall not affect the obligations of any other Lessee the Lessee's obligations under any other Acceptance Certificates to which it is a party.

Obtaining and maintaining funding shall include following the Funding Authority’s standard protocols for requesting provision for such payments to the extent necessary in each budget or appropriation request submitted and adopted in accordance with applicable provisions of law. Notwithstanding the foregoing, the decision whether or not to budget and appropriate funds or to extend the applicable Schedule for any Renewal Term is within the discretion of the Funding Authority, the governing body of Lessee, and any obligations incurred due to the failure to obtain or maintain funding for a Schedule shall be subject to the same budget and appropriation process through the Funding Authority, unless other funding is available for such damages.

Lease Obligations Not a Debt Lessee shall promptly pay Lease Payments as described in the Payment Schedule attached to the IT Asset Lease Services Contractor/Lessor exclusively from lawfully appropriated funds or other legally available funds (excluding capital appropriations) on the dates and in such amounts as provided in each Schedule. In accordance with 815 CMR 4.00, the Lessee shall pay Statewide IT Asset Lease Services Contractor/Lessor a charge on any payments not paid on the date such payment is due at the current rate for late penalty interest as published on the Office of the Comptroller website under the 815 CMR 4.00 regulations, from such due date until the date paid. Lease Payments consist of principal and interest portions.

Statewide IT Asset Lease Services Contractor/Lessor and Lessee understand and intend that the obligation of Lessee to pay Lease Payments under each Lease shall constitute a current expense and shall not in any way be construed to be a debt of Lessee or the Commonwealth in contravention of any applicable constitutional or statutory limitation or requirement concerning the creation of indebtedness by Lessee, nor shall anything contained herein or in a Lease constitute a pledge of the general tax revenues, funds or monies of Lessee or the Commonwealth.

Lease Payments Lease Payments will be made according to the Acceptance Certificate Lease Financing Payment Schedule, which shall be attached to the Quotation Form.

Notwithstanding the language in the Commonwealth Terms and Conditions and except as otherwise specifically provided herein, the Lease Payments as repayments of funds already paid by the IT Asset Lease Services Contractor/Lessor to the IT Asset Contractor will not be subject to abatement, diminution, intercept, set‑off, defense, counterclaim, or recoupment.

The Lessee’s obligation to make payments (subject to the terms relative to non-appropriation) upon delivery and acceptance of the IT Asset, and Lessee’s obligation to perform and observe the other covenants and agreements contained in this Statewide Contract and each individual Lease shall be absolute and shall not been waived through accident, unforeseen circumstances, failure of the IT Asset to perform as desired, damage or destruction to the IT Asset, defects, malfunctions, breakdowns or infirmities in the IT Asset or any accident, condemnation or unforeseen circumstances, loss of possession of IT Asset or obsolescence of the IT Asset. Each Acceptance Certificate executed and delivered hereunder shall be considered a separate Lease and no default by either party under any Acceptance Certificate shall in any way effect or be deemed a default under any other Acceptance Certificate.

Non Appropriation for Subsequent Fiscal Year Should Lessee fail to budget or the Lessee’s Funding Authority fail to appropriate or otherwise make available or obtain legally available funds to pay Lease Payments under any Lease for the upcoming fiscal year, the Lease shall be deemed terminated at the end of the then current Fiscal Period, unless remedied prior to that date. Lessee agrees to deliver written notice to Statewide IT Asset Lease Services Contractor/Lessor of such termination at least 30 days prior to the end of the then current Fiscal Period, but failure to give such notice shall not extend the term beyond the end of the then Fiscal Year.

Default The following shall be “events of default” under an Acceptance Certificate to the Lease under the Statewide IT Asset Lease Services Contract and the terms “event of default” and “default” shall mean, whenever these terms are used:

Failure by the Lessee to pay any Lease payments or any other payment required to be paid under the Acceptance Certificate on the date that same is due and payable thereunder (provided an event of non-appropriation has not occurred); or

Failure by the Lessee to observe and perform a requirement under an Acceptance Certificate, for a period of thirty (30) days after written notice, specifying such failure and requesting it be remedied, is given by Statewide IT Asset Lease Services Contractor/Lessor to the Lessee; or Any warranty, representation, or statement made by the Lessee is incorrect or misleading in any material respect on the date made; or An attachment, levy, or execution is levied upon or against the IT Asset.

Default or Non-Appropriation Remedies In the event a Lessee defaults on an Acceptance Certificate (a “Defaulted Certificate”), with at least thirty (30) days prior written notice to the Lessee, the IT Asset Lease Services SST and OSD, and a reasonable opportunity to cure or correct the default, the Statewide IT Asset Lease Services Contractor/Lessor may exercise all remedies permitted by law including the following:

Terminate the Lease under the Statewide IT Asset Lease Services Contract with respect to the defaulted Certificate and reenter and take possession of the IT Asset wherever situated or request the Lessee return the IT Asset to a location of the Statewide IT Asset Lease Services Contractor’s choosing within 250 miles of the City of Boston, with due process of law, and sell, Lease, or make other disposition of the same for account of the IT Asset, and apply the proceeds of any such sale, Lease, or other disposition (after deducting all costs and expenses, including court costs and attorney’s fees, incurred in connection with the recovery, repair, storage and disposition of the IT Asset) toward payment of the total amount of Lease payments remaining;

If the Lessee at any time is obligated to return any Items of IT Asset, the Lessee shall allow the Statewide IT Asset Lease Services Contractor/Lessor to take possession of the IT Asset, which shall be in good operating condition and in as good repair as when originally delivered to the Lessee, subject to normal wear and tear. The Lessee shall be responsible for removal and destruction of all data, including any personally identifiable information, security sensitive or any other confidential information prior to repossession. The Lessor shall not be liable for any data stored on repossessed IT Asset and may destroy any data or other content upon repossession.

All default damages (not covered under the sale or disposition of the IT Asset) will be subject to appropriations or funding under a Lessee’s Funding Authority and the Statewide IT Asset Lease Services Contractor/Lessor shall make best efforts to mitigate the default damages to reasonable costs incurred and will be responsible for documenting all such damages supplying such invoices or other proof necessary to support appropriation requests for the damages, or as otherwise negotiated through settlement. All default damages will not be considered a debt of the Lessee and shall not include an acceleration of remaining Lease payments.

The exercise of any such remedies in respect of any such Event of Default shall not relieve Lessee of any other liabilities under any other Lease or the IT Asset listed therein. Statewide IT Asset Lease Services Contractor/Lessor may take whatever action at law or in equity may appear necessary or desirable to enforce its rights under such Lease. Any net proceeds from the exercise of any remedy under a Lease (after deducting all costs and expenses referenced in the Section) shall be applied as follows: (i) if such remedy is exercised solely with respect to a single Lease, IT Asset listed in such Lease or rights thereunder, then to amounts due pursuant to such Lease and other amounts related to such Lease or such IT Asset; or (ii) if such remedy is exercised with respect to more than one Lease, IT Asset listed in more than one Lease or rights under more than one Lease, then to amounts due pursuant to such Leases pro-rata.

No remedy herein conferred upon or reserved to Statewide IT Asset Lease Services Contractor/Lessor is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under a Lease now or hereafter existing at law or in equity.

Requirements at Statewide Contract or Lease Termination

A Lessee seeking to terminate a Lease Acceptance Certificate due to non-appropriation is required to demonstrate the following prior to issuing written notice of termination to the IT Asset Lease Services Contractor/Lessor:

Lessee has exhausted all funds legally available from other sources for the payment of all Lease Payments due under the Acceptance Certificate with respect to such IT Asset;

Lessee properly and in a timely manner requested sufficient funds to satisfy the obligation due under the Acceptance Certificate with respect to such IT Asset in the fiscal period for which funds were not appropriated and Lessee diligently pursued and exercised best efforts to obtain such funds from the governing body which controls such appropriation;

Lessee has paid all Lease Payments (and all other payments) due with respect to such IT Asset for all fiscal periods preceding the fiscal period for which sufficient funds were not appropriated;

Funds have not been budgeted or appropriated to Lessee and funds will not be extended by Lessee during the first fiscal period following an event of non-appropriation for which funds have not been appropriated hereunder to purchase, Lease or otherwise acquire IT Asset or services performing functions similar to that of the terminated IT Asset; and

IT Asset Lease Services Contractor/Lessor has received a notice from an authorized representative of Lessee verifying the occurrence of the events listed in the preceding clauses;

Upon occurrence of such non-appropriation, and the satisfaction of all of the conditions to Lessee's right of termination, including Notice of Termination, Lessee shall not be obligated to make payment of any Lease Payments under the Acceptance Certificate with respect to the terminated IT Asset through any fiscal period for which funds have not been so appropriated, and the IT Asset Lease Services Contractor may negotiate the Lease default remedies identified above.

Securitization Absent prior written approval by OSD, a Statewide IT Asset Lease Services Contractor/Lessor may not securitize its interests in any Acceptance Certificate. The existence of the Lease documents shall confirm a first priority right to claim title and secure possession of the IT Asset under any defaulted Lease schedule or in the event of a casualty loss.

Public Offering No public sale of participations will be allowed. The Statewide IT Asset Lease Services Contractor/Lessor may not take any actions that would create a presumption that any Schedule is a public offering.

Assignability The Statewide IT Asset Lease Services Contract is executed with Approved IT Asset Lease Services Contractors/Lessors not only to provide Financing but to provide a full suite of related financing services through the life of a Lease. It is expected that to the full extent possible and financially practicable, the Statewide IT Asset Lease Services Contractor/Lessor will provide both the initial Lease financing for any Lease Schedule, and manage receipt of payments through the life of the Lease and not assign any interests in payments or in potential title rights of Lease Schedules to a third party.

Since the selection of approved and qualified Statewide IT Asset Lease Services Contractors/Lessors is rigorous, to ensure that only reputable and qualified financing vendors are selected, limiting the assignment or transfer of Lease Schedules to third parties must be limited to exceptional circumstances and not a routine business function of selling off Lease Schedules under the Statewide Contract once established. The Commonwealth has an expectation that it will maintain an ongoing relationship with the approved IT Asset Lease Services Contractors/Lessors for the life of each Lease Schedule and not be subjected to bi-furcating this relationship among other non-procured or non-approved IT Asset Lease Services Contractors/Lessors.

An approved IT Asset Lease Services Contractor/Lessor may identify subcontractors or potential third parties, that meet the same level of qualifications or banking restrictions of the Commonwealth for Lease financing or accepting Commonwealth payments as prescribed by the State Treasurer.

Pursuant to Section 8 of the Commonwealth Terms and Conditions, incorporated by reference herein, the Statewide IT Asset Lease Services Contractor/Lessor may assign its interests in payments to a third party while remaining the IT Asset Lease Services Contractor/Lessor under a particular Lease Schedule, which means that payments will be paid under the IT Asset Lease Services Contractor/Lessor tax identification number and tax reporting will be made under the IT Asset Lease Services Contractor/Lessor’s Tax identification number, but payments will be issued “c/o” a third party. This type of assignment is considered a partial assignment of payments and can be done at any time with a minimum of thirty (30) days prior written notice to the Lessee and provision of a Form W-9 to enter a secondary remittance address to the third party. The third party recipient of payments will have no contractual rights under this payment remittance assignment.

In limited exceptional circumstances, the Statewide IT Asset Lease Services Contractor/Lessor may be authorized upon forty-five (45) days prior written notice and approvals in accordance with this Section, to assign its full interests in payment or title rights under an Lease Schedule, which will not be unreasonably withheld provided the assignment receives prior written approval from the Lessee’s appropriate Funding Authority and provided that the Lessee shall determine the appropriate documentation and process to effectuate the transfer. The Statewide IT Asset Lease Services Contractor/Lessor may not dictate the assignment documentation and shall agree to execute any necessary documents to effectuate an approved assignment and shall agree to ensure, as a condition to an assignment approval, that the proposed Assignee IT Asset Lease Services Contractor/Lessor shall also agree to execute any necessary documents to effectuate an approved assignment.

The Statewide IT Asset Lease Services Contractor/Lessor understands and agrees that any documentation entered into by the Statewide IT Asset Lease Services Contractor/Lessor that has not been approved or provided by the Lessee will be legally unenforceable against the Lessee or the Commonwealth or other Funding Authority unless approved under the terms of this section and implemented in accordance with the Lessee’s funding and payment protocols.

In the event a Statewide IT Asset Lease Services Contractor/Lessor effectuates any unapproved transfer or assignment of any Lease Schedule or payment rights under any Lease Schedule, such transfer or assignment will be deemed legally unenforceable against the Lessee and the Lessee shall not be considered in default for continuing to make payments to the Statewide IT Asset Lease Services Contractor/Lessor listed on the Lease Schedule as executed, and the Lessee shall not be subject to any damages, fees, penalties, interest, attorneys’ fees or costs, and the IT Asset Lease Services Contractor/Lessor or any third party Assignee may not file a negative bond or credit rating report for default or failure to pay and shall be responsible for remuneration of all damages, fees, penalties, interest, attorneys’ fees or costs suffered by the Lessee or Funding Authority or associated with enforcement of the provisions of this section in accordance with the terms of the Statewide Contract.

The Statewide IT Asset Lease Services Contractor/Lessor covenants that any Approved assignment will be limited so that it does not constitute a public offering.

With the exception of a partial assignment, as described above, in the event of an Approved (full) assignment, all rights and obligations and title rights under any Schedule will automatically be assigned to the Assignee IT Asset Lease Services Contractor/Lessor provided that any Assignment (whether approved or not) shall automatically be subject to all the terms under this Statewide Contract without the requirement for the Assignee’s signature or assent, and provided that the terms of any Schedule and the terms of this Statewide Contract may not amended, overwritten or altered in any manner without prior approval of the Lessee’s appropriate Funding Authority and shall follow the IT Asset under any Schedule until the Lease is completed or otherwise terminated.

Miscellaneous Provisions In the event any provision of any Lease shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision thereof. Each Lease may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. The captions or headings in this Agreement and in each Lease are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Agreement or any Lease.

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