OT902321_DAS033_Contract_Rev..pdf

Index No.: DAS033

Eff. Date: 01/01/25

STATE OF OHIO

DEPARTMENT OF ADMINISTRATIVE SERVICES

GENERAL SERVICES DIVISION

OFFICE OF PROCUREMENT SERVICES

4200 SURFACE ROAD, COLUMBUS, OH 43228-1395

MANDATORY USE CONTRACT FOR: FLEET MASTER LEASE LESSOR

CONTRACT No.: OT902321 EFFECTIVE DATES: 01/01/21 to 12/31/21 *Renewal through 12/31/26

The Department of Administrative Services has accepted bids submitted in response to Invitation to Bid No. OT902321 that opened on 10/30/20. The evaluation of the bid response(s) has been completed. The bidder(s) listed herein have been determined to be the lowest responsive and responsible bidder(s) and have been awarded a contract for the items(s) listed.

The respective bid response, including the Instructions to Bidders and Standard Terms and Conditions, special contract terms & conditions, any bid addenda, specifications, pricing schedules and any attachments incorporated by reference and accepted by DAS become a part of this Requirements Contract.

This Requirements Contract is effective beginning and ending on the dates noted above unless, prior to the expiration date, the Contract is renewed, terminated or cancelled in accordance with the Contract Terms and Conditions.

CONTRACT RENEWAL. This Contract may be renewed after the ending date of the Contract solely at the discretion of the Contracting Agency for a period of one month. Any further renewals will be by mutual agreement between the Contractor and the Contracting Agency for any number of times and for any period of time. The cumulative time of all mutual renewals may not exceed sixty (60) months unless the Contracting Agency determines that additional renewal is necessary.

This Requirements Contract is available to Department of Administrative Services, Office of Fleet Management , as applicable.

Agencies are eligible to make purchases of the listed supplies and/or services in any amount and at any time as determined by the agency. The State makes no representation or guarantee that agencies will purchase the volume of supplies and/or services as advertised in the Invitation to Bid.

This Requirements Contract and any Amendments thereto are available from the DAS Web site at the following address:

http://www.ohio.gov/procure

*Indicates twenty-four (24) month renewal through 12/31/26, per Amendment 3.

Signed: __________________________________________________________ Kathleen C. Madden, Director Date https://procure.ohio.gov/pdf/Instructions_010118.pdf https://procure.ohio.gov/pdf/Standard_t_c_051520.pdf

Eff. Date: 01/01/23

TABLE OF CONTENTS

CLAUSES PAGE NO.

Special Terms and Conditions *3-4 Specifications *5-7 Price Schedule *8 Attachment One *9-22 Exhibit A *23 Exhibit B *24 Exhibit C *25-26 Exhibit D *27 Exhibit E *28 Contractor Index *29 Summary of Amendments *30

* Indicates updates to Page No. due to the addition of the Prohibition of the Expenditure of Public Funds for Offshore Services to the Special Terms and Conditions and repagination, per Amendment 2.

Eff. Date: 01/01/21

SPECIAL CONTRACT TERMS AND CONDITIONS

AMENDMENTS TO CONTRACT TERMS AND CONDITIONS: The following Amendments to the Contract Terms and Conditions do hereby become a part hereof. In the event that an amendment conflicts with the Contract Terms and Conditions, the Amendment will prevail.

DELIVERY AND ACCEPTANCE: Services will be performed as set forth in the Contract. The location of performance will be noted on the purchase order issued by the participating agency. Payment for services rendered will occur upon the inspection and written confirmation by the ordering agency that the services provided conform to the requirements set forth in the Contract. Unless otherwise provided in the Contract, payment shall be conclusive except as regards to latent defects, fraud, or such gross mistakes as amount to fraud.

EVALUATION: Bids will be evaluated in accordance with Article I-17 of the “Instructions to Bidders”. In addition, the State will use the following formulas for evaluation purposes:

Contractor Cost of Capital + Credit Spread = Target Return

Target Return x Tax Equivalent Yield Multiplier = State of Ohio Interest Rate

Bidders must submit their Cost of Capital Rates for the period of September 1, 2020 through September 30, 2020 with their bid. A common date will be used during evaluation for determining the Cost of Capital Rate for each bidder. Bidders shall use Attachment Four, Bidder Cost of Capital Rates, to submit their Cost of Capital Rates.

The formulas will be used to calculate the State of Ohio Interest Rate for the following lease terms: Three Year, Four Year, Five Year, Six Year, and Seven Year.

CONTRACT AWARD: The Contract will be awarded to the lowest responsive and responsible bidder by lot total. This Contract will be awarded based on the lowest overall lot total percentage offered to the State based on the formulas to calculate State of Ohio Interest Rate. The lot will include the following length of lease terms: Three Year, Four Year, Five Year, Six Year, and Seven Year.

FIRM FIXED-PERCENTAGE CONTRACT: The Contract is a Firm Fixed-Percentage Contract. The Contractor is required to provide to the using agency supplies or services using the Credit Spread percentage submitted with their bid, which is to be used in the formula for State of Ohio Interest Rate, for the duration of the Contract, and any extensions thereto. While the State of Ohio Interest Rate may vary, the Credit Spread will remain firm for the duration of the Contract and any extensions thereto.

SUBCONTRACTS: In addition to the utilization of any facilities, which the successful Bidder may own, or control, the successful Bidder shall not have the right to enter into written subcontracts.

ASSIGNMENT OF CLAIMS: The successful Bidder will not sell, assign, or pledge this Contract as collateral for a loan or take any other action which may tend to encumber the direct contractual relationship between the State of Ohio and the successful Bidder without express written permission of all the parties required to affix their signatures thereto by Ohio law. This Contract is voidable and subject to immediate termination by the State of Ohio upon the Contractor's becoming insolvent or filing proceeding in bankruptcy or reorganization under Title XI of the United States Code.

PROPRIETARY INFORMATION: Bidder may request that certain information, such as trade secrets or proprietary data, be designated as confidential and not considered as public records. Material so designated shall accompany the bid and be in a sealed container duly marked, and shall be readily separable from the bid in order to facilitate public inspection of the non-confidential portion. Prices, makes, models, catalog numbers of items offered, deliveries and terms of payment shall not be considered as confidential. The decision as to whether or not such trade secrets or proprietary data shall be disclosed at the bid opening rests solely with DAS.

* Page 4

SPECIAL CONTRACT TERMS AND CONDITIONS(CONT’D)

*PROHIBITION OF THE EXPENDITURE OF PUBLIC FUND FOR OFFSHORE SERVICES: No State Cabinet Agency, Board or Commission will enter into any contract to purchase services provided outside of the United States or that allows State data to be sent, taken, accessed, tested, maintained, backed-up, stored, or made available remotely outside (located) of the United States, unless a duly signed waiver from the State has been attained. Notwithstanding any other terms of this Contract, the State reserves the right to recover any funds paid for services the Contractor performs outside of the United States for which it did not receive a waiver. The State does not waive any other rights and remedies provided to the State in the Contract.

Further, no State agency, board, commission, State educational institution, or pension fund will make any purchase from or investment in any Russian institution or company. Notwithstanding any other terms of this Contract, the State reserves the right to recover any funds paid to Contractor for purchases or investments in a Russian institution or company in violation of this paragraph. The provisions of this paragraph will expire when the applicable Executive Order is no longer effective.

The Contractor must complete the Contractor/Subcontractor Affirmation and Disclosure Form affirming the Contractor understands and will meet the requirements of the above prohibition. During the performance of this Contract, if the Contractor changes the location(s) disclosed on the Affirmation and Disclosure Form, Contractor must complete and submit a revised Affirmation and Disclosure Form reflecting such changes.

* Indicates the addition of updated language regarding the Prohibition of the Expenditure of Public Funds for Offshore Services and repagination.

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SPECIFICATIONS

l. DEFINITIONS.

The following terms may be used through this document and shall be defined as:

A. OFM = Office of Fleet Management B. DAS = Department of Administrative Services C. Lessee = An Agency that has executed an Agency Lease D. Lessor = Awarded Contractor

II. SCOPE OF WORK.

DAS desires to enter in to an agreement with a vendor to serve as Lessor for the State’s Fleet Master Lease agreements as set forth by OFM. OFM is seeking, on behalf of itself, and other State of Ohio agencies, to establish a Fleet Master Lease Program to finance the purchase of motor vehicles for use by eligible State agencies. State agencies annually purchase hundreds of motor vehicle of various types and sizes and purchases are paid from appropriations of each individual State agency within Ohio’s decentralized fleet management environment. In State Fiscal Year 2020, the State of Ohio procured 472 vehicles at a value of approximately $11.1 million dollars. A detailed summary of lease totals can be found at this link: Lease Total Summary FY20.pdf

The estimated State Fiscal Year 2021 schedule is:

Amortization Period No. of Vehicles Acquisition Amount 36 53 $ 1,278,000.00 48 84 $ 1,922,000.00 60 85 $ 2,033,500.00 72 145 $ 3,512,500.00 84 3 $ 675,000.00

Totals 370 $ 9,421,000.00

The Bidder should note that all quantities given are estimates and are given as a basis for comparison only. The quantities purchased may be increased or decreased by any eligible State entity as deemed necessary during the term of the Contract.

Purchases of motor vehicles are typically made from pre-established State term contracts, but may also be made from non-term contract dealers on a limited basis.

The Ohio Revised Code (ORC), Section 125.832, requires all State agencies to receive an approval from the OFM for the procurement of the motor vehicle(s). Furthermore, ORC Section 125.832 (A)(1) requires State agencies to use the OFM Master Lease Program unless the OFM authorizes an outright purchase. The State’s central accounting system has edits that prohibit the processing of motor vehicle purchase transactions unless the OFM has assigned a pre-approval number.

The OFM is responsible for providing a high-level management for the State’s motor vehicle decentralized fleet. State agency is defined by ORC Section 125.831 (I) as “every organized body, office, board, authority, commission, or agency established by the laws of the state for the exercise of any governmental or quasigovernmental function of state government regardless of the funding source for that entity, other than any state institution of higher education, the office of the governor, lieutenant governor, auditor of state, treasurer of state, secretary of state, or attorney general, the general assembly or any legislative agency, the courts or any judicial agency, or any state retirement system or retirement program established by or referenced in the Revised Code.” In addition to the exemptions spelled out in ORC Section

125.831 (G) specific vehicle assignments and types/sizes of vehicles are also exempted from the OFM acquisition approval requirement. Vehicles used by law enforcement officers as defined by ORC Section 125.831 (G) are exempt as well as vehicles with a gross vehicle weight of more than 12,000 pounds and vehicles with specialized equipment.

The successful Bidder will serve as Lessor, providing financing for the State of Ohio’s Fleet Master Lease program.

II. REQUIREMENTS.

The awarded Contractor is required to do the following:

A. Provide financing, through lease to purchase, for all types of motor vehicles that are requested by State agencies, including those that are exempt from OFM’s statutory authority with the exception of institutions of higher education.

OFM shall be the sole state entity to determine what types of motor vehicles may be leased/financed and which state entities can use the Master Lease agreement.

* Indicates a repagination as a result of Amendment 2.

https://procure.ohio.gov/pdf/OT902321_Lease.Total.Summary_FY20.pdf https://procure.ohio.gov/pdf/OT902321_Lease.Total.Summary_FY20.pdf

Index No. DAS033

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SPECIFICATIONS (CONT’D)

B. Provide financing in accordance with all State and federal laws and regulations.

C. Provide financing that allows the State of Ohio not to participate in any activities associated with a certificate of participation transaction.

D. Receive quarterly payments from the purchasing State agency and not in a “bundle” from the Department of Administrative Services.

E. Comply with Ohio Revised Code Section 126.30 with regards to late payments.

F. Allow State agencies the discretion to self-insure for collision and comprehensive insurance or to formally procure such coverage. Self-insurance may mean using current appropriations to cover damages or claims.

G. Allow State agencies to utilize the DAS Risk Management Motor Vehicle Self Insured Liability Program.

H. Process financing for vehicle purchases as low as $18,000 per transaction.

I. Provide financing for terms from three (3) to seven (7) years.

J. There shall be no Prepayment Penalties.

K. Any funds held within an interest-bearing escrow account shall be at the benefit of the State of Ohio.

L. Commit to or “lock in” a rate of interest for ninety (90) days from the date that the lessee accepts the vehicle(s).

M. Agree to Attachment One, State of Ohio Master Motor Vehicle Financing Agreement and all Exhibits within the State of Ohio Master Motor Vehicle Financing Agreement. Those exhibits include:

1. Exhibit A, Form of Approval Letter

2. Exhibit B, Motor Vehicle Schedule and Financing Agreement

3. Exhibit C, Certificate of Acceptance and Acknowledgement of Agency Lease

4. Exhibit D, Payment Authorization Certificate

5. Exhibit E, Arbitrage and Tax Abatement

6. Exhibit F, Amortization Schedule

III. INTEREST RATE METHODOLOGY

A. The awarded contractor must use the following formulas for calculating the State of Ohio Interest Rate for lease schedules, which will serve as the basis for the interest rates for subsequent lease schedules:

Contractor Cost of Capital + Credit Spread = Target Return

Target Return x Tax Equivalent Yield Multiplier = State of Ohio Interest Rate

B. The Contractor Cost of Capital will update for each new lease schedule based upon Bank Cost of Capital. To allow the Agency to verify that the Contractor has calculated the interest rate properly, the Contractor must provide the Agency with the Contractor’s Cost of Capital documentation on dates which pricing is set. Contractor Cost of Capital Rates used in the calculation must correspond with the appropriate leasing term of the transaction (i.e. Three years, Four years, Five years, Six years, Seven years).

C. Credit Spread will remain firm.

D. Tax Equivalent Yield Multiplier is based on the current Federal Corporate Tax Rate. The Tax Equivalent Yield Multiplier is 79% (calculated as 1 minus Corporate Tax Rate). Contractor must notify DAS should there be a change to the Federal Corporate Tax Rate. The Tax Equivalent Yield Multiplier shall remain firm unless an amendment is issued by the Office of Procurement Services to reflect a change in the Federal Corporate Tax Rate.

E. The State recognizes that the Contractor Cost of Capital rates may vary and that the State of Ohio will pay the State of Ohio Interest Rate at the time of funding, rounded to the nearest one-hundredth of one percent (.00 through .04 is rounded down; .05 through .09 is rounded up).

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SPECIFICATIONS (CONT’D)

F. State of Ohio Interest Rate Example Calculation

Term Contractor Cost of Capital Rate Credit Spread Target Return Tax Equivalent

Yield Multiplier State of Ohio Interest Rate

Three Years 0.65% 1.22% 1.87% 79% 1.48% Four Years 0.71% 1.22% 1.93% 79% 1.52% Five Years 0.82% 1.22% 2.04% 79% 1.61% Six Years 0.85% 1.22% 2.07% 79% 1.64%

Seven Years 0.91% 1.22% 2.13% 79% 1.68%

IV. ESTIMATED LEASE BUDGET

The estimated total acquisition amount for the period of July 1, 2020 through June 30, 2021 is $9.4 million. This is a budget estimate only and does not constitute a guarantee of purchase volume. The total acquisition amount may be less than or exceed this estimated amount dependent upon the actual number of qualifying expenditures by DAS and eligible State agencies.

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PRICE SCHEDULE

PAYMENT STRUCTURE: Quarterly payments of principal and interest in arrears. Level debt by schedule. First payment date will be no sooner than thirty (30) days after the initial funding date.

Contractor: Huntington Public Capital Corporation

Indicate the Credit Spread percentage to be used for calculating the State Interest Rate. A single percentage shall be provided and will be used in calculating the State Interest Rate at all lease term lengths that are part of this Bid. Lease term lengths include: Three Year, Four Year, Five Year, Six Year, and Seven Year.

Credit Spread: 1.35%

All costs must be in U.S. Dollars.

The State will not be responsible for any costs not identified.

There will be no additional reimbursement for travel or other related expenses.

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ATTACHMENT ONE

STATE OF OHIO

MASTER MOTOR VEHICLE FINANCING AGREEMENT

THIS STATE OF OHIO MASTER MOTOR VEHICLE FINANCING AGREEMENT (“Agreement”), dated as of the Agreement Date, is made and entered into by and between the awarded contractor, a corporation duly organized and existing under the laws of the State of Ohio, as lessor (“Lessor”), whose principal business address is as shown on the execution page hereof;

and the State of Ohio (the “State”), acting by and through the Ohio Department of Administrative Services of the State (“DAS”), whose address is as shown on the execution page hereof, for various Agencies of the State.

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

ARTICLE I: DEFINITIONS AND EXHIBITS

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

Acceptance Date: The date an Agency accepts Motor Vehicles as evidenced in the applicable Certificate of Acceptance.

Acquisition Period: The period during which Motor Vehicles may be leased pursuant to this Agreement. Such period shall commence on the effective date of the contract, January 1, 2021 and end on December 31, 2021, unless such Acquisition Period is extended pursuant to Section 4.1 hereof or terminated earlier pursuant to Section 4.2 hereof.

Amortization Schedule: The list of Interest, Principal, and Total Payment due for a lease by quarter. See Exhibit F.

State Agency: Ohio Revised Code 125.831(I): “State agency” means every organized body, office, board, authority, commission, or agency established by the laws of the state for the exercise of any governmental or quasi-governmental function of state government regardless of the funding source for that entity, other than any state institution of higher education, the office of the governor, lieutenant governor, auditor of state, treasurer of state, secretary of state, or attorney general, the general assembly or any legislative agency, the courts or any judicial agency, or any state retirement system or retirement program established by or referenced in the Revised Code.

Agency Acknowledgment: The acknowledgment by an Agency executing a Motor Vehicle Schedule, subjecting it to the provisions of this Agreement, in the form of Certificate of Acceptance set forth in Exhibit C hereto.

Agency Lease: With respect to each Motor Vehicle Group leased by an Agency, this Agreement, together with the Agency Acknowledgment, and the fully executed Motor Vehicle Schedule relating thereto, shall constitute a separate contract relating to such Motor Vehicle Group. Each Agency Lease shall be dated as of the date all documents the Lessee is required to submit hereunder are finally submitted.

Agreement: This State of Ohio Master Motor Vehicle Financing Agreement between the State, acting by and through DAS and the awarded contractor, dated as of the Agreement Date.

Agreement Date: the effective date of the contract, Award Date

Business Day: Any day other than Saturday, Sunday or a day on which the offices of the State are permitted by law to be closed.

Code: The Internal Revenue Code of 1986, as amended.

DAS Director: The Director of Administrative Services of the State.

Events of Default: Those events described in Section 12.1.

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Fiscal Biennium: The 24-month fiscal period of the State which commences on July 1 in an odd-numbered year and ends on June 30 in the next odd-numbered year.

Fiscal Year: The 12-month fiscal period of the State which commences on July 1 of each year.

Funding Date: With respect to each Agency Lease, the date Lessor makes payment to the Vendor(s) for the purchase price of the related Motor Vehicle Group.

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

Lease Term: With respect to any Motor Vehicle Group, the period during which the related Agency Lease is in effect as specified in Section 4.5.

Lessee: An Agency that has executed an Agency Lease.

Lessor: Awarded contractor, a corporation duly organized and existing under the laws of the State of Ohio.

Lessor Commitment Date: The date Lessor acknowledges its commitment to fund a purchase of Motor Vehicles so designated in an Exhibit A for each Agency Lease.

Minimum Acquisition Amount: The minimum amount permitted to be financed hereunder in a single Motor Vehicle Group, which shall be not less than $18,000.

Motor Vehicle: An automobile, car minivan, cargo minivan, passenger van, cargo van, sport utility vehicle, truck or bus.

Motor Vehicle Group: The Motor Vehicles listed in one or several particular Exhibit B.

Motor Vehicle Schedule: Exhibit B which has been completed with respect to a Motor Vehicle Group and executed by DAS and an Agency.

Non-Appropriation: The failure of the Ohio General Assembly to appropriate money for any Fiscal Biennium sufficient for the continued performance by Lessee of all of Lessee’s obligations under any applicable Agency Lease, as evidenced by the passage of a final budget which does not include funding sufficient to pay all Rental Payments due under any applicable Agency Lease for a designated Fiscal Biennium.

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

Prepayment Price: With respect to any Motor Vehicle Group, as of the Payment Dates specified in the Exhibit F relating thereto, the amount so designated and set forth opposite each such date in such Exhibit F, plus any other amounts of principal and/or interest accrued and unpaid on the applicable Payment Date.

Principal: The portion of any Rental Payment designated as principal in any Exhibit F.

Regulations: Regulations of the U.S. Treasury Department promulgated under the Code.

Rental Payment: With respect to any Motor Vehicle Group, the payment due from Lessee to Lessor on each Payment Date during the Lease Term as shown in the Exhibit F completed for such Motor Vehicle Group.

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Revised Code: The Revised Code of the State of Ohio, as amended and supplemented from time-to-time.

Specifications: The procurement specifications and/or purchase order pursuant to which Lessor has ordered any Motor Vehicles from a Vendor.

State: The State of Ohio.

State and Federal Law or Laws: The Constitution and any law of the State and any rule of any Agency of the State; and any law of the United States, and any rule or regulation of any federal agency.

Vendor: Each of the manufacturers, distributors, dealers or vendors from whom the Lessor has ordered or with whom such Lessee has contracted for the purchase and delivery of the Motor Vehicles.

Section 1.2. Exhibits.

Exhibit A: Form of Approval Letter with proposed vehicle requisitions to be sent to the Lessor, which gives approval by DAS for the purchase of the motor vehicles by Lessor on the terms set forth therein and allows Lessor to indicate their approval of the lease.

Exhibit B: Form of the Schedule of Motor Vehicles and Financing Agreement

Exhibit C: Form of Certificate of Acceptance executed by the Agency

Exhibit D: Form of Payment Authorization Certificate

Exhibit E: Form of Arbitrage and Tax certificate of Lessee relating to each Agency Lease

Exhibit F: Amortization Schedule

ARTICLE II: REPRESENTATIONS, WARRANTIES AND COVENANTS

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

(a) DAS is an administrative department of the State created pursuant to Section 121.02 of the Ohio Revised Code, directed by the DAS Director. Pursuant to the provisions of Ohio Revised Code Sections 125.02 and 125.04, the DAS Director has authority to execute this Agreement.

(b) The execution and delivery of this Agreement by the DAS Director is in compliance with all public procurement and other State and Federal Laws applicable to this Agreement.

(c) DAS agrees that it shall not authorize or do anything which (nor shall it allow any Agency to do anything which) would violate or render untrue any representation or undertaking in the Arbitrage and Tax Certificate.

(d) Upon the funding of each Agency Lease, the Lessor will supply DAS with the appropriate IRS 8038 G/GC form to be completed by DAS. DAS will return the executed 8038 G/GC form to the Lessor to file on behalf of DAS.

Additionally, the Lessor will provide any other necessary information relating to the Agency Leases as may be requested by Special Counsel as being required by the Code and the Regulations.

(e) DAS acknowledges that (i) under Article XII of this Agreement, upon an Event of Default of a Lessee, Lessor may elect to terminate each Agency Lease with such defaulting Lessee hereunder and (ii) upon a Non-Appropriation relating to any Agency Lease or any Motor Vehicles, such Agency Lease as to which such Non-Appropriation occurred shall terminate and, at the option of the Lessor, all other Agency Leases of such Lessee may terminate, and such Lessee is required upon the occurrence of (i) or (ii) to deliver all affected Motor Vehicles as instructed by Lessor under Section 12.3 hereof.

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Section 2.2. Acknowledgment by Lessee of Representations, Warranties and Covenants of Lessee. Lessee by execution of the Agency Acknowledgment represents, warrants and covenants as follows:

(a) Lessee is an Agency of the State, duly organized and existing under the Constitution and laws of the State and is authorized under the Constitution and laws of the State to enter into the Agency Lease and the transactions contemplated hereby and thereby, and to perform all of its obligations under the Agency Lease.

(b) The execution and delivery of the Agency Lease to which it is a party, by the officer or representative of Lessee executing such documents, has been duly authorized by Lessee, or by other appropriate official action, and such action is in compliance with all public procurement and other State and Federal Laws applicable to the Agency Lease and the acquisition and financing of the Motor Vehicles by the Agency. All requirements have been met and procedures have occurred in order to ensure the enforceability of the Agency Lease against Lessee.

(c) Lessee will take no action that would cause the Interest portion of the Rental Payments to become includable in gross income of the recipient for federal income tax purposes under the Code and the Regulations, and Lessee will take and will cause its officers, employees and agents to take all affirmative action’s legally within its power necessary to ensure that the Interest portion of the Rental Payments does not become includable in gross income of the recipient for federal income tax purposes under the Code and Regulations, all as amended from time to time as such are applicable hereto (including, without limitation, the calculation and payment of any rebate required to preserve such exclusion).

(d) Pursuant to procurement specifications, upon delivery of any Motor Vehicle Group, or part thereof, Lessee will inspect such Motor Vehicle Group, or part thereof, and if it meets Agency’s Specifications, provide to Lessor a completed and executed Certificate of Acceptance relating thereto in the form attached hereto as Exhibit C.

(e) Lessee acknowledges that (i) under Article XII of this Agreement, upon an Event of Default of a Lessee, Lessor may elect to terminate each Agency Lease with such defaulting Lessee hereunder, and (ii) upon a Non-Appropriation for a Lessee relating to such Agency Lease or any Motor Vehicle, such Agency Lease as to which such Non-Appropriation occurred shall terminate and, at the option of the Lessor, all other Agency Leases of such Lessee may terminate, and such Lessee is required upon the occurrence of (i) or (ii) to deliver all Motor Vehicles as instructed by Lessor under Section 12.3 hereof.

(f) It is not Lessee’s intent to become a reseller or re-marketer of Motor Vehicles purchased pursuant to this Agreement.

Section 2.3. Representations, Warranties and Covenants of Lessor. Lessor represents, warrants and covenants as follows:

(a) The Lessor shall hold harmless, indemnify and defend the State, DAS and any Lessee, as well as their officers and employees, against any claim, action, loss, liability, cost and expense of whatsoever kind or nature (including, but not by way of limitation, attorney’s fees and court costs) resulting from injury to persons or damage to property, arising out of or resulting from any negligent or willful act or omission of the Lessor in the performance of its duties under this Agreement.

(b) The Lessor shall comply with any and all applicable federal, State and local laws, rules and regulations as the same exist and may be amended from time to time.

(c) In the performance of its duties under the Agreement, the Lessor will be acting in the capacity of an independent contractor, and not as an agent, employee, partner, joint venture or associate of DAS, the State or any Agency thereof. The Lessor shall be solely responsible for the means, methods, techniques, sequences and procedures it utilizes in the performance of such duties and responsibilities.

(d) Except as provided in Section 11.1 hereof, the Lessor shall not assign any of its rights nor delegate any of its duties under this Agreement without the written consent of DAS. Any assignment or delegation not consented to may be deemed void by DAS and the State.

(e) Revised Code Section 9.24 prohibits the State from awarding a contract to any person against whom the Auditor of the State has issued a finding for recovery if the finding for recovery is unresolved at the time of the contract award.

Lessor warrants that it is not now subject to an unresolved finding for recovery under Revised Code Section 9.24, and covenants that it will notify DAS in writing of any such finding prior to entering into any Agency Lease subsequent to the date of such finding.

(f) As part of this Agreement, Lessor shall disclose to DAS in writing: (i) the location(s) where all services will be performed by the Lessor; (ii) the location(s) where any State data applicable to this Agreement will be maintained or made available; and (iii) the principal location of business for the Lessor and any assignee of the Lessor pursuant to Section 11.1 hereof.

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(g) The Lessor shall not, during the performance of this Agreement, change the location(s) of the country where the services hereunder are performed or where the data applicable to this Agreement is maintained or made available without the prior written approval of DAS.

(h) The Lessor shall comply with all applicable State and federal laws regarding maintaining a drug-free workplace and shall make a good faith effort to ensure that all its employees, while working on State property, will not purchase, transfer, use or possess illegal drugs or alcohol or abuse prescription drugs in any way.

(i) The Lessor shall comply with all State and federal laws regarding equal employment opportunity, including Revised

Code Section 125.111 and all related Executive Orders of the Governor of the State.

(j) The Lessor, in the hiring of employees for the performance of work under this Agreement, shall not discriminate against any citizen of the State in the employment of a person qualified and available to perform the work to which this Agreement relates by reason of race, color, religion, sex, age, disability as described in Ohio Revised Code Section 4112.01, national origin, or ancestry.

(k) The Lessor, or person acting on behalf of the Lessor, in any manner, shall not discriminate against, intimidate, or retaliate against any employee for the performance of work under this Agreement on account of race, color, religion, sex, age, disability as described in Ohio Revised Code Section 4112.01, national origin, or ancestry.

(l) The Lessor affirms that it is currently in compliance and will adhere to the requirements of the Ohio Ethics Law as provided by Ohio Revised Code Sections 102.03 and 102.04.

(m) Pursuant to Ohio Revised Code Section 3517.13, the Lessor affirms that, as applicable to the Lessor: (i) if a partnership or association, no partner or shareholder thereof, or the spouses of any of them, or (ii) if a corporation or business trust, no owner of more than 20% of the corporation or business trust, or the spouse of such person, has made, as an individual, within the two (2) previous calendar years, one or more contributions totaling in excess of $1,000.00 to the Governor of the State or to his campaign committees.

ARTICLE III: LEASE OF MOTOR VEHICLES

Section 3.1. Acquisition of Motor Vehicles.

(a) By execution hereof, Lessor agrees to lease and sell motor vehicles as requested by one or more Lessees commencing the effective date of the contract, January 1, 2021 or upon the date when DAS signs the Contract, whichever is later in time, and for such subsequent periods as may be mutually agreed in writing between DAS and the Lessor; provided, however, that nothing in this Agreement obligates any Agency, DAS, the State or any combination of them, to enter into any Agency Leases in any amount.

(b) Each Agency Lease is subject to Section 126.07 of the Ohio Revised Code, which provides, in part, that an Agency

Lease will not be valid or enforceable until the Director of the Office of Budget and Management certifies that there are appropriated funds available to pay the lease payments there under.

(c) DAS shall prepare its Approval Letter in substantially the form attached hereto as Exhibit A and promptly forward same and Exhibit B, and the Agency purchase requisition to the Lessor for approval. Lessor shall immediately review such Approval Letter and give approval either verbally or by e-mail, and promptly confirm in writing by execution of such Approval Letter in the space provided. The Lessor shall promptly return the executed Approval Letter to DAS along with Exhibit B completed to the extent possible. Upon receipt of the executed Approval Letter from DAS, Lessor shall order the Motor Vehicle Group from the designated Vendor or Vendors and send an order acknowledgment to the Lessee and DAS upon completion of the order. The acknowledgement shall contain sufficient detail as to confirm the content of the vehicle as ordered.

(d) The Lessor’s approval of DAS’s Approval Letter shall constitute a commitment by Lessor to lease and sell to the

Lessee such Motor Vehicles at the rate of interest stated therein.

(e) Motor Vehicle Schedules will be funded in their entirety upon the receipt of a completed Certificate of Acceptance designating that the initial delivery of vehicles listed on the schedule has been made to and accepted by the Lessee.

All vehicles listed on a motor vehicle schedule will have a common funding date and payment schedule as established on the amortization schedule provided by the Lessor.

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(f) Lessor shall make payment to a Vendor for a Motor Vehicle Group within thirty (30) days after Lessor has received all of the following in form and substance satisfactory to Lessor (provided, however, Lessor shall make no payment to a Vendor for any Motor Vehicle for which Lessor did not receive a Certificate of Acceptance prior to the Final Acceptance Date): (i) Exhibit B executed by Lessor and Lessee; (ii) a Certificate of Acceptance in the form of Exhibit C executed by Lessee; (iii) evidence of insurance and/or self-insurance with respect to the Motor Vehicle Group in compliance with Article VI of this Agreement; (iv) Vendor invoice(s) and/or bill of sale relating to the Motor Vehicle Group; (v) the original certificate of title or manufacturer’s certificate of origin and title application in conformity with certificate of title laws; and (vii) any other documents or items reasonably required by Lessor. Lessor shall promptly notify Lessee and DAS of the Funding Date by providing, in writing or by e-mail, a final payment schedule that is substantially in the form of Exhibit F.

Section 3.2. Lease; Enjoyment; Inspection. Lessor hereby agrees to lease to Lessee each Motor Vehicle Group made subject to a Motor Vehicle Schedule hereto, and each Lessee by execution of an Agency Lease leases from Lessor such Motor Vehicle Group, upon the terms and conditions set forth herein and therein and in the related Motor Vehicle Schedule.

During the Lease term, Lessee shall peaceably and quietly have and hold and enjoy the Motor Vehicle Group, except as expressly set forth in this Agreement and the Agency Lease. Lessee agrees by the Agency Lease that Lessor and its agents shall have the right at all reasonable times to examine and inspect the Motor Vehicle, and Lessor and its agents shall have such rights of access to the Motor Vehicles as may be reasonably necessary to cause the proper maintenance of the Motor Vehicles in the event of failure by Lessee to perform its obligations hereunder and under each Agency Lease. The awarded contractor shall not own the Motor Vehicles and by this Agreement and each Agency Lease is merely financing the acquisition thereof for Lessee. Lessor has not been in the chain of title of the Motor Vehicles, does not operate, control or have possession of the Motor Vehicles and has no control over the Lessee or Lessee’s operation, use, storage or maintenance of the Motor Vehicles. Lessee is solely responsible for the selection of the Motor Vehicles, and the manufacturer and Vendor thereof, and is solely responsible for the use, maintenance, operation and storage of the Motor Vehicles. The Lessor has agreed to order each Motor Vehicle Group from the designated Vendor as an administrative convenience to the DAS and each Lessee.

ARTICLE IV: TERM

Section 4.1. Term. This Agreement shall be in effect from the Agreement Date until the final payment date for any Rental Payment under any Agency Lease. Motor Vehicle Groups can be acquired under this Agreement for an Acquisition Period terminating on 12/31/21, or through the date which OT902321, Fleet Master Lease Lessor, is renewed, whichever is later. Each Agency Lease shall be in effect for a Lease Term commencing upon the Funding Date and ending as provided in Section 4.5. The provisions of this Agreement shall apply to each Agency Lease for the respective Lease term.

Section 4.2. Termination.

(a) Either the Lessor or DAS may terminate the Acquisition Period under this Agreement by notifying the other party in writing that it intends to terminate this Agreement, which notice must be given no later than ninety (90) days preceding each Renewal Date. In no event shall the Acquisition Period extend beyond, Date TBD. Termination of the Acquisition Period pursuant to this paragraph shall not operate to terminate any Agency Lease. Extension of the Acquisition Period for any period beyond the initial Acquisition Period shall not operate to change in any manner the method by which interest rates are established for any Agency Lease.

(b) In the event of Non-Appropriation, an Agency Lease and each Motor Vehicle Schedule thereunder with respect to which such Non-Appropriation has occurred, shall terminate, and, at the option of Lessor, provided in writing to Lessee by Lessor, all other Agency Leases of such Lessee may terminate, effective upon the last day of the Fiscal Biennium for which funds were appropriated, in whole, but not in part, as to all Motor Vehicles listed thereon, in the manner and subject to the terms specified in this Article. Lessor may effect such termination by giving the Lessee and DAS a written notice of termination at which time Lessee shall pay to Lessor any Rental Payments and other amounts which are due and have not been paid at or before the end of the then current Fiscal Biennium with respect to such terminated Agency Leases. Lessee shall endeavor to give reasonable notice of such termination prior to the end of the last Fiscal Year for which appropriations were made and shall notify Lessor of any anticipated termination upon its determination thereof. In the event of termination of an Agency Lease as provided in this Section, Lessee shall comply with written instructions received from Lessor in accordance with Section 12.3.

(c) This Agreement is subject to termination with respect to a particular Agency Lease upon the occurrence of an Event of Default, as provided in Section 12.2 hereof.

(d) No Motor Vehicle Schedules shall be executed after any Non-Appropriation or Event of Default with respect to a defaulting Lessee or a Lessee as to which a Non-Appropriation has occurred.

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Section 4.3. Intent to Continue Lease Term; Appropriations. Each Lessee intends to continue each Agency Lease hereunder for its entire Lease Term and to pay all Rental Payments relating thereto. Each Agency executing an Agency Lease has agreed to direct the person within such Agency in charge of preparing the Lessee’s budget to include in the budget request for each Fiscal Year the Rental Payments becoming due in such Fiscal Year. The parties acknowledge that appropriation for Rental Payments is a governmental function which DAS and Lessee cannot contractually commit the Ohio General Assembly to perform and this Agreement and the Agency Lease do not constitute such a commitment. However, the Lessee reasonably believes that money in an amount sufficient to make all Rental Payments can and will lawfully be appropriated and made available to permit continued utilization of the Motor Vehicles in the performance of its essential functions during the applicable Lease Term. Each Lessee is an Agency of the State and each Lessee’s performance and obligation to pay under this Agreement and any applicable Agency Lease is contingent upon a biennial appropriation. Lessee, as an Agency of the State, is subject to the appropriation of funds by the Ohio General Assembly in an amount sufficient to allow continuation of its performance in accordance with the terms and conditions of this Agreement and each Agency Lease for each and every Fiscal Year following the Fiscal Year in which the Agreement and any applicable Agency Lease is executed and entered into and for which this Agreement and any applicable Agency Lease shall remain in effect. Lessee shall, upon receipt of notice that sufficient funds are not available to continue its full and faithful performance under this Agreement and any applicable Agency Lease, provide prompt written notice to DAS and Lessor of such event and upon the expiration of the period of time for which funds were appropriated be thereafter released of all further obligations in any way related to such Motor Vehicles. Each Lessee agrees (1) not to cancel any applicable Agency Lease under this provision if any funds are appropriated to it for the acquisition (by purchase, lease, or otherwise) of other functionally equivalent Motor Vehicles for the Fiscal Biennium of termination provided such action is not contrary to any expressed legislative intent, and (2) to expressly include in its appropriation request for each year of the Agreement and any applicable Agency Lease a request for an appropriation to fund the Agreement and any applicable Agency Lease.

In the event that the general appropriations act for the State has not been adopted by the Ohio General Assembly and approved by the Governor prior to the expiration of a Fiscal Biennium, and no declaration of an intent not to appropriate has been made by the State or the respective Lessee, the Lease term of each Agency Lease will be deemed renewed pending the enactment of such general appropriations act. If any Rental Payments are due under an Agency Lease during such period, such Lease terms will be so extended only if: (a) an interim or emergency budget implemented by the State pending enactment of a final budget makes available to the Lessee money that may legally be used to make Rental Payments during such period; or (b) sums are otherwise legally available to make such Rental Payments, and such funds are used to make the Rental Payments coming due prior to the effective date of such general appropriations act.

Section 4.4 Effect of termination for Non-Appropriation. Upon termination of an Agency Lease for non-appropriation as provided in this Article, Lessee shall not be responsible for the payment of any additional Rental Payments coming due in succeeding Fiscal Years, but if Lessee has not complied with the instructions received from Lessor in accordance with Section 12.3, the termination shall nevertheless be effective, and Lessee shall pay, on demand to Lessor, from legally available funds, the unpaid balance of the applicable Agency Lease which is stipulated to be the aggregate of the Prepayment Prices as shown on each Exhibit B as of the last day of the Fiscal Year for which funds were appropriated.

Section 4.5. Termination of Lease Term. The Lease term with respect to any Agency Lease shall not exceed the lesser of seven years or the average useful life of all Motor Vehicles in the related Motor Vehicle Group weighted on the basis of purchase price, and each Agency Lease will terminate sooner upon the occurrence of the first of the following events: (a) the termination of an Agency Lease in accordance with Section 4.2; (b) the payment of the Prepayment Price by Lessee pursuant to Article X; (c) an Event of Default by Lessee and Lessor’s election to terminate such Agency Lease pursuant to Article XII; or

(d) the payment by Lessee of all Rental Payments and all other amounts authorized or required to be paid by Lessee pursuant to such Agency Lease.

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ARTICLE V: RENTAL PAYMENTS

Section 5.1. Rental Payments. Upon receipt by Lessor of the Certificate of Acceptance, Lessor shall pay the Vendor and provide the Agency with the final amortization schedule for such Agency Lease, which shall include the Funding Date. As a convenience to the Lessee and to DAS, the Lessor shall provide quarterly invoices to DAS and the Lessee in such form as may be reasonably requested by DAS and the Lessee, but the failure to receive such invoice shall not relieve the Lessee of its obligation to pay Rental Payments due under such Agency Lease. Lessee agrees to pay Rental Payments with respect to each Agency Lease of a Motor Vehicle Group during the related Lease Term in the amounts and on the dates specified in the applicable Exhibit B. A portion of each Rental Payment is paid as and represents the payment of Interest as set forth in the applicable Exhibit B. Lessor is authorized to insert the due date of the first Rental Payment on the applicable Exhibit B, provided that the Lessee shall have no less than thirty (30) days after the Funding Date within which to make such initial payment. All Rental Payments shall be paid to Lessor at such place as Lessor may from time to time designate by written notice to Lessee. Lessee shall pay the Rental Payments exclusively from money legally available therefore, in lawful money of the United States of America.

Section 5.2. Current Expense. The obligations of Lessee, including its obligation to pay the Rental Payments due in any Fiscal Year of a Lease Term, shall constitute a current expense of Lessee for such Fiscal Year and shall not constitute an indebtedness of the Lessee, DAS, the State, nor any political subdivision or agency thereof within the meaning of the Constitution and laws of the State. Nothing herein shall constitute a pledge by Lessee of any taxes or other money (other than money lawfully appropriated from time to time by or for the benefit of Lessee for the related Agency Lease) to the payment of any Rental Payment or other amount coming due hereunder. The Rental Payments due hereunder are to be made only after an appropriation of funds therefore from legally available money and neither Lessee, the State nor any political subdivision or agency thereof shall be obligated to make any such appropriation and neither the full faith and credit of Lessee, DAS, the State nor any political subdivision or agency thereof is pledged for the payment of Rental Payments hereunder or under each Agency Lease.

Section 5.3. Rental Payments to Be Unconditional. Except as provided in Section 4.2, the obligation of Lessee to make Rental Payments from appropriated legally available funds required hereunder and under each Agency Lease shall be…