DIR-TSO-3763 Appendix E Master Operating Lease Agreement
DIR Contract # DIR-TSO-3763 Page 1 of 17 Appendix E, MOLA
Appendix E
MASTER OPERATING LEASE AGREEMENT
1. Definitions. Capitalized terms used in this Appendix and not otherwise defined will have the meanings
set forth in the Contract.
(a) “Assets” refers to the Products as allowed within the Contract, including the Hardware, Software, and
related Services, which are specifically identified on the applicable Schedule. Assets includes any items
associated with the foregoing, including but not limited to all parts, replacements, additions, repairs, and
attachments incorporated therein and/or affixed thereto, and documentation (technical and/or user
manuals).
(b) “Contract” refers to DIR Contract number DIR-TSO-3763 into which this Appendix is incorporated.
(c) “Event of Default” is defined in Section 23, “Default.”
(d) “Event of Loss” means an event of loss, theft, destruction or damage of any kind to any item of the
Assets, including the loss, theft or taking by governmental action of any item of the Assets for a stated
period extending beyond the Term of any Schedule.
(e) “Hardware” refers to the computer machinery and equipment specifically identified on the applicable
Schedule.
(f) “Lease” means the financing transaction described in this MOLA.
(g) “Lessee” means any Texas state agency, unit of local government, institution of higher education as
defined in Section 2054.003 (8-a), Texas Government Code, and those state agencies purchasing from
a DIR contract through an Interagency Agreement, as authorized by Chapter 771, Texas Government
Code, any local government as authorized through the Interlocal Cooperation Act, Chapter 791, Texas
Government Code, and the state agencies and political subdivisions of other states as authorized by
Section 2054.0565, Texas Government Code.
(h) “Lessor” means Dell Financial Services, L.L.C.
(i) “MOLA" means this Master Operating Lease Agreement (Appendix E). Any reference to “MOLA”
includes the Contract, the Opinion of Counsel, and any riders, amendments and addenda thereto, and
any other documents as may from time to time be made a part hereof upon mutual agreement in a writing
signed by authorized representatives of both parties.
(j) “Rent Payment” means the amount payable by Lessee for the Assets as specified in the applicable
Schedule.
(k) “Schedule” or “Supplementary Schedule” to this MOLA means the form or format entered into between
Lessor and Lessee which contains, at a minimum, a description of the Assets, the name of the Lessee,
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applicable Rent Payment, and term of the Lease. To be effective, a Schedule must be executed by both
Lessor and Lessee.
(l) “Services” refers to the configuration, installation, implementation, support, training, and other
professional and consulting services specifically identified on the applicable Schedule.
(m) “Software” refers to the computer programs specifically identified on the applicable Schedule.
(n) “Stipulated Loss Value” is the value of each unit of Hardware at various times during the Lease as
specified in the applicable Schedule; however, in no event will the Stipulated Loss Value of a Hardware
unit exceed its fair market value.
2. Lease.
(a) Lessor and Lessee intend that this MOLA constitute an operating lease and a true lease as those terms
are defined in the Statement of Financial Accounting Standards No. 13 and as provided for under the
Uniform Commercial Code – Leases, Tex. Bus. & Comm. Code Article 2A. Under no circumstances
shall this MOLA or any Schedules entered into under it be construed as a "finance lease" as defined in
Tex. Bus. & Comm. Code § 2A.103 (7). In addition, Lessor acknowledges that Lessee is not a "merchant
lessee" for purposes of Tex. Bus. & Comm. Code § 2A.511.
(b) Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the Assets described on each
Schedule. Each such Schedule constitutes a separate agreement between Lessor and Lessee. In addition,
each Schedule is subject to the terms and conditions of this MOLA as if a separate MOLA were executed
for such Schedule by the parties.
(c) In the event of Lessee's rightful rejection of the Assets as specified in Section 10 (“Inspection and
Acceptance”) of this MOLA, Lessee shall have the right, at its sole option, to cancel this Lease as to the
rejected Assets or as to all of the Assets to be leased under the Schedule applicable to such Assets. Upon
cancellation, Lessee shall have no obligations under this MOLA with respect to the portion of this Lease
so cancelled.
(d) Each Lessee has made an independent legal and management determination to enter into each Schedule.
DIR has not offered or provided any legal or management advice to Lessor or to any Lessee under any
Schedule. Lessee may negotiate additional terms or more advantageous terms with Lessor to satisfy
individual procurements in which case such terms shall be set forth in a Rider to the MOLA or the
Schedule. To the extent that any of the provisions of the MOLA conflict with any of the terms contained
in any Schedule, the terms of this MOLA shall control.
(e) If more than one Lessee is named in a Schedule, the liability of each named Lessee shall be joint and
several. However, unless DIR leases Assets for its own use, DIR is not a party to any Schedule executed
under this MOLA and is not responsible for Rent Payments or any other obligations under such Lessee’s
Schedule. The invalidation, fulfillment, waiver, termination, or other disposition of any rights or
obligations of either a Lessee or Lessor (or both of them) arising from the use of this MOLA in
conjunction with any one Schedule shall not affect the status of the rights or obligations of either or both
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of those parties arising from the use of this MOLA in conjunction with any other Schedule, except in
the Event of Default as provided in Section 23 (“Default”) of this MOLA.
3. Term of MOLA.
The term of this MOLA shall commence (a) upon commencement of the term of the Contract. The term of
this MOLA shall continue until the last to occur of the following: (i) the Schedule Term of each Schedule
entered into by the parties has expired or been terminated, or (ii) the Contract has expired or been terminated.
In the event of any termination or expiration of the Contract or termination of this MOLA, any provisions
of the Contract and this MOLA as may be necessary to preserve the rights of Lessor or Lessee hereunder
shall survive said termination or expiration.
4. Term of Schedule.
The term for each Schedule agreed to by a Lessee and Lessor under this MOLA shall commence on the
effective date specified in the Schedule (and, if no date is specified, then on the date the Schedule was signed
by Lessee, provided Lessor has also signed the Schedule). Unless earlier terminated as provided for herein,
the Schedule shall continue for the number of whole months or other payment periods set forth in it (the
“Schedule Term”). Specifically with respect to Hardware, under no circumstances shall the Schedule Term
exceed seventy five percent (75%) of the economic life of the Hardware. The Schedule Term may be earlier
terminated upon: (i) the non-appropriation of funds pursuant to Section 8 (“Appropriation of Funds”) of this
MOLA, (ii) an Event of Loss, (iii) an Event of Default by Lessee and Lessor’s election to cancel the
Schedule pursuant to Section 24 (“Remedies”) of this MOLA, (iv) an event of default or other breach of
this Agreement by Lessor and Lessee's election to cancel the Schedule pursuant to Section 24 (“Remedies”)
of this MOLA, or (v) as otherwise set forth herein.
5. Administration of MOLA.
(a) When a prospective Lessee wishes to lease Assets under this MOLA, the prospect will submit its request
directly to Lessor. Lessor shall apply the applicable pricing discounts as stated in Section 4 of the
Contract or the price as agreed upon by Lessee and Lessor in the applicable Schedule, whichever is
lower and submit the lease proposal to the prospective Lessee. If the prospective Lessee wishes to
proceed to lease Assets based on the proposal, Lessor will negotiate the applicable Rent Payment,
availability of Assets, and term of the Lease directly with the prospective Lessee.
(b) With respect to Lessor’s obligations under Section 5 of the Contract to report the sale and make payment
of the DIR administrative fee as defined in that Section, all leasing activities in conjunction to this
MOLA shall be treated as a “purchase sale.” Notwithstanding treatment of this Lease as a "purchase
sale" as to the transaction between Lessor and DIR under the Contract, however, under no circumstances
shall this MOLA be construed as creating anything other than a true lease and operating lease as stated
in Section 2 (“Lease”) hereof for the transaction(s) between Lessor and Lessee.
(c) Upon agreement by Lessor and Lessee on the applicable Rent Payment, availability, Lease term, and
the like, Lessee may issue a purchase order in the amount indicated on the applicable Schedule to Lessor
for the Assets and reference the Contract number on the purchase order. Any pre-printed terms and
conditions on the Schedule issued by Lessor (with respect to any item other than the specific Assets
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which are the subject of the Lease, the Schedule Term, and the Rent Payments), Lessor’s order
acknowledgement form or the like shall not be effective with respect to the lease of Assets hereunder.
Rather, the terms and conditions of this MOLA shall control in all respects.
(d) Until a Schedule is entered into by Lessor and a Lessee per the process set forth in this MOLA, neither
DIR nor any Lessee is obligated under this MOLA to lease Assets from Lessor nor is Lessor obligated
under this MOLA to lease Assets to a Lessee.
6. Rent Payments.
(a) During the Schedule Term and any renewal terms agreed to by Lessee as specified herein, Lessee agrees
to pay Lessor the Rent Payments set forth in the relevant Schedule for each Asset. Rent Payments shall
be the amount equal to the Rent Payment amount specified in the Schedule multiplied by the amount of
the total number of Rent Payments specified therein. Lessee shall pay Rent Payments in the amount and
on the due dates specified by Lessor until all Rent Payments and all other amounts due under the
Schedule have been paid in full. If the Schedule Commencement Date is other than the first day of a
month, Lessee shall make an initial payment on the Schedule Commencement Date in an amount equal
to one-thirtieth of the Rent Payment specified in the Schedule for each day from the Schedule
Commencement Date (including the Schedule Commencement Date) through the last day of such month
(including that day). For example, if a scheduled payment amount is $3,000 and the Scheduled
Commencement date is the 15th of the month, a payment of $1,500 will be made. Under no
circumstances shall the present value of the Rent Payments exceed ninety percent (90%) of the value of
the Assets.
(b) Any amounts received by Lessor from Lessee in excess of Rent Payments and any other sums required
to be paid by Lessee shall be held as non-interest bearing security for Lessee’s faithful performance
under the conditions of this MOLA (and any Schedule), and applied to reduce future Rent Payments.
All Rent Payments shall be paid to Lessor at the address stated on the Schedule or any other such place
as Lessor or its assigns may hereafter direct to Lessee. Lessee shall abide by Appendix A, Section 8.C
of the Contract in making payments to Lessor. Lessor's (including its assignees') remedy for late
payments is as set forth in Chapter 2251, Texas Government Code.
(c) Lessee acknowledges and agrees, except as specifically provided for in Section 8 (“Appropriation of
Funds”) of this MOLA and excluding claims resulting from a breach of Lessor’s obligations as set forth
in this MOLA or any Schedule or of Lessee's rights under Section 16 (“Quiet Enjoyment”) hereof, that
Lessee’s obligation to pay Rent and other sums payable hereunder, shall not be abated, reduced or
subject to offset or diminished as a result of any past, present or future claims Lessee may have against
Lessor under this Lease. Notwithstanding the foregoing, nothing in this Section or any other provision
of this MOLA shall affect or preclude Lessee from enforcing any and all other rights it may have against
Lessor and its assignees under this MOLA or otherwise affect any right Lessee may have against the
manufacturer or licensor of the Assets or any party other than Lessor.
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7. Liens.
Lessee shall keep the Assets free and clear of all levies, liens and encumbrances, and shall give Lessor
immediate notice of any attachment or other judicial process affecting any item of the Assets.
8. Appropriation of Funds.
Lessee intends to continue each Schedule to which it is a party for the Schedule Term and to pay the Rent
and other amounts due hereunder. Lessee reasonably believes that legally available funds in an amount
sufficient to pay all Rent during the Schedule Term can be obtained. Lessee further intends to act in good
faith to do those things reasonably and lawfully within its power to obtain and maintain funds from which
the Rent may be paid. Notwithstanding the foregoing, in the event sufficient funds are not appropriated to
continue the Schedule Term for any fiscal period (as set forth on the Schedule) of Lessee beyond the fiscal
period first in effect at the commencement of the Schedule Term, Lessee may terminate the Schedule with
regard to those of the Assets on the Schedule so affected. Lessee shall endeavor to provide Lessor with
written notice sixty (60) days prior to the end of its current Fiscal Period confirming which Assets on the
Schedule will be so affected by the termination. All obligations of Lessee to make Rent Payments due with
respect to those Assets after the end of the Fiscal Period for which such termination applies will cease, all
interests of Lessee in those Assets will terminate, Lessee shall surrender those Assets in accordance with
Section 15 (“Option to Extend; Surrender of Assets”) of this MOLA, and the applicable Schedule shall be
deemed amended. Lessee represents and warrants it has adequate funds to meet its obligations during the
first fiscal period of the Schedule Term. Lessor and Lessee intend that the obligation of Lessee to make Rent
Payments under this MOLA shall constitute a current expense of Lessee and shall not in any way be
construed to be a debt of Lessee in contravention of any applicable constitutional or statutory limitation or
requirement concerning the creation of indebtedness by Lessee, nor shall anything contained herein
constitute a pledge of the general revenues, funds or monies of Lessee or the State of Texas, as applicable,
beyond the fiscal period for which sufficient funds have been appropriated to make Rent Payments
hereunder.
9. Assignment of Warranties.
Each Schedule is intended to be a true lease and operating lease as defined in Tex. Bus. & Comm. Code
Article 2A. Lessor has acquired or will acquire the Assets in connection with this MOLA and hereby agrees
to assign to Lessee any warranties provided to Lessor with respect to the Assets during the Term of the
applicable Schedule, to the extent the warranties are assignable. Unless Lessor is the manufacturer or is
otherwise liable under the Contract, Lessor shall not be liable for damages for any reason for any act or
omission of the manufacturer of the Assets. Except as provided in Section 24 (“Remedies”) hereof, Lessee
acknowledges that none of the following shall relieve Lessee from the obligations under this MOLA during
the Schedule Term unless due to Lessor’s acts or omissions: (i) Lessee’s dissatisfaction with any unit of the
Assets, (ii) the failure of an Asset to remain in useful condition for the Schedule Term, or (iii) the loss or
right of possession of the Assets (or any part thereof) by Lessee. Lessee shall have no right, title or interest
in or to the Assets except the right to use the same upon the terms and conditions herein contained. The
Assets shall remain the sole and exclusive personal property of Lessor and not be deemed a fixture whether
or not it becomes attached to any real property of Lessee.
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10. Inspection and Acceptance.
Promptly upon delivery of the Assets, Lessee will inspect and test the Assets. No later than twenty (20)
business days following its date of delivery (or, if the Assets are part of a system, the date of last delivery
of the Assets comprising the system), Lessee will execute and deliver either (i) a Certificate of Acceptance,
or (ii) written notification of any defects in the Assets. If Lessee has not given notice within such time
period, the Assets shall be deemed accepted by Lessee as of the twentieth (20th) business day, as described
above. In the event Lessee does not accept the Assets, Lessor will promptly remove the Assets from Lessee’s
premises and deliver conforming Assets within the timeframe agreed to and provided for by the supplier or
manufacturer under that supplier’s or manufacturer’s applicable procurement contract with the State. If
conforming Assets are not delivered within that timeframe, Lessee may terminate the Schedule on written
notice to Lessor. Lessee's acceptance of any Assets shall not be deemed to waive any rights Lessee may
have against the manufacturer or licensor, as applicable. Lessor and its assigns, including either of their
respective agents shall have the right to inspect the Assets upon reasonable notice to Lessee and during
normal business hours provided that anyone who does so has first executed a non-disclosure agreement
acceptable to Lessee.
11. Installation and Delivery; Use of Assets; Repair and Maintenance.
(a) Except as set forth in this MOLA, all transportation, delivery, installation, and de-installation costs
associated with the Assets shall be borne by Lessee. Lessee shall provide a place of installation for the
Assets, which conforms to the requirements of the manufacturer and Lessor.
(b) Subject to the terms hereof, Lessee shall be entitled to use the Assets for the conduct of its business in
compliance with all laws, rules, and regulations of the jurisdiction in which the Assets are located.
Lessee shall not use or permit the use of the Assets for any purpose for which, according to the
specification of the manufacturer, the Assets are not designed.
(c) Lessee, at its expense, shall take good and proper care of the Hardware and make all repairs and
replacements necessary to maintain and preserve the Hardware and keep the Hardware in good order
and condition (reasonable wear and tear excepted). Unless Lessor shall otherwise consent in writing,
Lessee shall, at its own expense, enter into and maintain in force a maintenance agreement covering
each Hardware unit. Lessee shall furnish Lessor with a copy of such agreement, upon request. Lessee
shall not make any alterations, additions, or improvements, or add attachments to the Hardware without
the prior written consent of Lessor, except for additions or attachments to the Hardware leased by Lessee
from Lessor or purchased by Lessee from the manufacturer of the Hardware (or an authorized distributor
of the manufacturer) or any other person approved by Lessor. Lessee shall affix on a prominent place
on each item of Hardware any tags, decals or labels supplied by Lessor to Lessee which describe the
ownership of the Hardware. Subject to the provisions of Section 15(b) under “Option to Extend;
Surrender of Hardware and Software Assets,” Lessee agrees to restore the Hardware to Return Condition
prior to its return to Lessor.
12. Relocation of Hardware and Software.
Except as set forth on the applicable Schedule, Lessee shall at all times keep the Hardware and Software
within its exclusive possession and control. Lessee may move the Hardware or Software to another location
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of Lessee within the continental United States, provided Lessee is not in default on any Schedule and pays
all costs associated with such relocation. If such relocation requires Lessor’s prior written consent, Lessee
shall obtain such consent prior to relocating the Hardware or Software, as applicable, which consent Lessor
shall not unreasonably withhold. Notwithstanding the foregoing, in those situations where consent is
otherwise required, Lessee may move the Hardware or Software to another location within Texas without
notification to, or the consent of, Lessor; provided, however, that not later than December 31 of each
calendar year, Lessee shall provide Lessor a written report detailing the total amount of Hardware and
Software at each location of Lessee as of that date, and the complete address for each location. Lessor shall
make all filings and returns for property taxes due with respect to the Hardware and Software, and Lessee
agrees that it shall not make or file any property tax returns, including information returns, with respect to
the Hardware and Software.
13. Taxes.
Unless otherwise agreed by the parties on the applicable Schedule, Lessor will pay any Imposition or file
any forms or returns with respect thereto. Lessee shall, when billed, and with copy of Imposition invoice(s)
with respect to Assets specified on the Schedule, reimburse Lessor for such payment. For purposes of this
paragraph “Impositions” means all taxes, including personal property taxes and fees, without pro-ration as
described in the Financial Disclosure Summary Work Sheet (Attachment 1) hereafter imposed, assessed or
payable during the term of the relevant Schedule including any extension thereof. Because the
reimbursement date for an Imposition may occur after the expiration or termination of the term of the
relevant Schedule, it is understood and agreed that Lessee's liability to reimburse for such Impositions shall
survive the expiration or termination of the term of the relevant Schedule.
14. Ownership.
The Hardware and Software shall at all times be and remain the sole and exclusive property of Lessor,
subject to the parties’ rights under any applicable software license agreement. Lessee shall have no right,
title or interest in the Hardware except a leasehold interest as provided for herein. Lessee agrees that the
Hardware shall be and remain personal property and shall not be so affixed to realty as to become a fixture
or otherwise to lose its identity as the separate property of Lessor. Upon Lessor’s request, Lessee will enter
into agreements necessary to ensure that the Hardware remains the personal property of Lessor.
15. Option to Extend; Surrender of Hardware and Software Assets.
(a) Not less than ninety (90) days prior to the expiration of the initial Schedule Term, Lessor shall notify
Lessee in writing of options to extend the Schedule for continued use of the Hardware or Software
specified in that Schedule. If Lessee desires to exercise any of the options offered by Lessor (and
provided that, with respect to Hardware, any extension does not exceed seventy five percent (75%) of
its economic life), Lessee shall give Lessor irrevocable written notice of the option Licensee intends to
exercise at least forty-five (45) days before the expiration of such Schedule Term. In the event the Lease
is extended for some but not all of the Hardware and Software specified on a Schedule, the Schedule
shall be updated to reflect those changes. At the end of the Schedule Term (as well as with respect to
any Hardware and Software not extended as described immediately above), Lessee will surrender and
return the Hardware and Software to Lessor in compliance with Section 15(b) below.
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(b) Except as specified otherwise herein, upon the expiration, early termination as provided herein, or final
termination of the Schedule, Lessee, at its cost and expense, shall promptly return the Hardware, freight
prepaid, to Lessor in good repair and working order, with reasonably unblemished physical appearance
and with no defects which affect the operation or performance of the Hardware (“Return Condition”),
reasonable wear and tear excepted. If the Hardware is not in Return Condition, Lessee shall, at its option,
either restore the Hardware (at Lessee’s cost) to Return Condition or pay for the Hardware at its
Stipulated Loss Value if the Hardware is not reasonably repairable. Lessee shall arrange and pay for the
de-installation and packing of the Hardware in suitable packaging, and return the Hardware to Lessor at
the location specified by Lessor; provided, however, that such location shall be within the United States
no farther than 500 miles from the original Lessee delivery location, unless otherwise agreed to on the
applicable Schedule. At its option and expense, Lessor shall have the right to supervise and direct the
preparation of the Hardware for return. If, upon termination or expiration of the Schedule for any reason,
Lessee fails or refuses to return to Lessor a Hardware unit or Software program specified in that
Schedule or to pay Lessor the Stipulated Loss Value for a Hardware unit, Lessee shall remain liable for
Rent Payments for that unit or program up to the date on which the unit or program is returned to the
address specified by Lessor (or on which Lessee has paid Lessor the Stipulated Loss Value). In such
event and specifically with respect to the Hardware, Lessor shall also have the right to enter Lessee’s
premises or any other premises where the Hardware may be found to take possession of and to remove
the Hardware, at Lessee’s sole cost and expense, without legal process. Lessee understands that it may
have a right under law to notice and a hearing prior to repossession of the Hardware. However, as an
inducement to Lessor to enter into a transaction, but only to the extent that Lessee, if a state agency, has
statutory authority to do so, Lessee hereby expressly waives all rights conferred by existing law to notice
and a hearing prior to such repossession by Lessor or any officer authorized by law to effect repossession
and hereby releases Lessor from all liability in connection with such repossession. Without waiving the
doctrines of sovereign immunity and immunity from suit and to the extent authorized by the Constitution
and laws of the State of Texas, Lessee’s obligation to return Hardware may, at Lessor’s option, be
specifically enforced by Lessor.
16. Quiet Enjoyment.
During the Schedule Term, Lessor shall not interfere with Lessee’s quiet enjoyment and use of the Assets
as long as an Event of Default (as hereinafter defined in Section 23 (“Default”) of the MOLA) has not
occurred.
17. Warranties regarding the Assets.
Lessor acknowledges that warranties made by the manufacturer or licensor of the Assets, if any, inure to
the benefit of Lessee. Lessee agrees to pursue any warranty claim directly against such manufacturer or
licensor of the Assets and shall not pursue any such claim against Lessor.
18. No Warranties by Lessor regarding the Assets.
Except as set forth in the Contract, Lessee acknowledges that Lessor is not the manufacturer or licensor of
the Hardware or Software Assets. Lessee agrees that Lessor makes no representations or warranties of
whatsoever nature, directly or indirectly, express or implied, as to the suitability, durability, fitness for use,
merchantability, condition, or quality of the Hardware or Software Assets or any unit thereof. Except to the
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extent Lessor is the manufacturer or licensor of the Hardware or Software Assets, Lessee specifically waives
all right to make claim against Lessor for breach of any warranty of any kind whatsoever; and with respect
to Lessor, Lessee leases the Hardware and Software “as is”. Except to the extent Lessor is the manufacturer
or licensor of the Hardware or Software Assets, Lessor shall not be liable to Lessee for any loss, damage,
or expense of any kind or nature caused directly or indirectly by any Hardware or Software leased hereunder,
or by the use or maintenance thereof, or by the repairs, service or adjustment thereto or any delay or failure
to provide any thereof, or by any interruption of service or loss of use thereof, or for any loss of business or
damage whatsoever and howsoever caused. Lessor agrees to assign to Lessee, upon Lessee’s request
therefor, any warranty of a manufacturer or licensor or seller relating to the Hardware and Software that
may have been given to Lessor.
19. Risk of Loss.
Commencing upon delivery and continuing throughout the Schedule Term, Lessee shall bear the entire risk
of loss or damage in respect to the Hardware specified on the Schedule, whether partial or complete, from
any cause whatsoever. Lessee shall promptly notify Lessor regarding any Event of Loss. Upon any Event
of Loss, Lessee shall, at its option: (a) immediately repair the affected Hardware so that it is in good
condition and working order, (b) replace the affected Hardware with identical equipment of at least equal
value, in good condition and repair, and transfer clear title thereto to Lessor, or (c) to the extent permitted
by law, pay to Lessor, within thirty (30) days of the Event of Loss, an amount equal to the Stipulated Loss
Value for such affected Hardware unit, plus any other unpaid amounts then due under the Schedule. If an
Event of Loss occurs as to part of the Hardware for which the SLV is paid, a prorated amount of each Rent
Payment shall abate from the date the SLV payment is received by Lessor. The SLV shall be an amount
equal to the sum of all future Rent Payments from the last Rent Payment date to the end of the Schedule
Term with such Rent Payments discounted to present value at the like-term Treasury Bill rate for the
remaining Schedule Term in effect on the date of such Event of Loss, or if such rate is not permitted by law,
then at the lowest permitted rate.
In the event of a governmental taking of a Hardware unit for an indefinite period or for a stated period,
which does not extend beyond the Schedule Term, all obligations of Lessee with respect to such Hardware
unit (including payment of Rent) shall continue. So long as Lessee is not in default hereunder, Lessor shall
pay to Lessee all sums received by Lessor from the government by reason of such taking.
20. Representations and Warranties of Lessee.
Lessee represents and warrants for the benefit of Lessor and its assigns, and Lessee will provide an opinion
of counsel to the effect that, as of the time of execution of the MOLA and each Schedule between Lessor
and Lessee:
(a) Lessee is either a Texas state agency or Texas local government, as defined in Section 2054.003, Texas
Government Code (including institutions of higher education as defined in Section 2054.003 (8-a),
Texas Government Code) or a state agency purchasing from a DIR contract through an Interagency
Agreement, as authorized by Chapter 771, Texas Government Code. Lessee has made an independent
legal and management determination to enter into this transaction;
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(b) Each Schedule executed by Lessee has been duly authorized, executed and delivered by Lessee and
constitutes a valid, legal and binding true lease and operating lease agreement of Lessee, enforceable in
accordance with its terms;
(c) No approval, consent or withholding of objection is required from any federal or other governmental
authority or instrumentality with respect to the entering into or performance by Lessee of any Schedule
between Lessor and Lessee;
(d) The entering into and performance of any Schedule between Lessor and Lessee, this MOLA or any
Schedule will not violate any judgment, order, law or regulation applicable to Lessee or result in any
breach of, or constitute a default under, or result in the creation of any lien, charge, security interest or
other encumbrance upon assets of Lessee or on the Hardware or Software leased under any Schedule
between Lessor and Lessee pursuant to any instrument to which Lessee is a party or by which it or its
assets may be bound;
(e) To the best of Lessee’s knowledge and belief, there are no suits or proceedings pending or threatened
against or affecting Lessee, which if determined adversely to Lessee will have a material adverse effect
on the ability of Lessee to fulfill its obligations under the MOLA or any Schedule between Lessor and
Lessee;
(f) The use of the Assets is essential to Lessee’s proper, efficient and economic operation, and Lessee will
sign and provide to Lessor upon execution of each Schedule between Lessor and Lessee hereto written
certification to that effect; and
(g) Lessee represents and warrants that (i) It has authority to enter into any Schedule under this MOLA, (ii)
the persons executing a Schedule have been duly authorized to execute the Schedule on Lessee’s behalf,
(iii) all information supplied to Lessor is true and correct, including all credit and financial information
and (iv) it is able to meet all its financial obligations, including the Rent Payments hereunder.
21. Representation and Warranties of DIR.
DIR represents and warrants for the benefit of Lessor and its assigns, and DIR will provide an opinion of
counsel to the effect that, as of the time of execution of the MOLA:
(a) DIR is a State agency as defined in Section 2251.001, Texas Government Code. DIR has not provided
Lessee or Lessor with any legal or management advice regarding the MOLA or any Schedule executed
pursuant thereto;
(b) This MOLA has been duly authorized, executed and delivered by DIR and constitutes a valid, legal and
binding agreement of DIR, enforceable in accordance with its terms;
(c) No approval, consent or withholding of objection is required from any federal or other governmental
authority or governmental authority or instrumentality with respect to the entering into or performance
by DIR of this MOLA;
DIR Contract # DIR-TSO-3763 Page 11 of 17 Appendix E, MOLA
(d) The entering into and performance of the MOLA does not violate any judgment, order, law or regulation
applicable to DIR or result in any breach of, constitute a default under, or result in the creation of any
lien, charge, security interest or other encumbrance upon assets of DIR or on the Hardware or Software
pursuant to any instrument to which DIR is a party or by which it or its assets may be bound;
(e) To the best of DIR’s knowledge and belief, there are no suits or proceedings pending or threatened
against or affecting DIR, which if determined adversely to DIR will have a material adverse effect on
the ability of DIR to fulfill its obligations under the MOLA;
(f) DIR is authorized to charge and collect the administrative fee as set forth within Section 5 of the
Contract; and
(g) Lessor’s payment of the administrative fee to DIR shall not constitute an illegal gratuity or otherwise
violate Texas law.
22. Representations and Warranties of Lessor.
Lessor represents and warrants for the benefit of DIR and each Lessee:
(a) Lessor is an entity authorized and validly existing under the laws of its state of organization, is
authorized to do business in Texas, and is not in default as to taxes owed to the State of Texas and any
of its political subdivisions;
(b) The MOLA and each Schedule executed in conjunction to this MOLA have been duly authorized,
executed and delivered by Lessor and constitute valid, legal and binding agreements of Lessor,
enforceable with respect to the obligations of Lessor herein in accordance with their terms;
(c) No approval, consent or withholding of objection is required from any federal or other governmental
authority or instrumentality with respect to the entering into or performance by Lessor of this MOLA or
any Schedule;
(d) The entering into and performance of the MOLA or any Schedule will not violate any judgment, order,
law or regulation applicable to Lessor or result in any breach of, or constitute a default under, or result
in the creation of any lien, charge, security interest or other encumbrance upon the assets of Lessor,
including the Hardware or Software leased under the MOLA and Schedules thereto, pursuant to any
instrument to which Lessor is a party or by which it or its assets may be bound;
(e) To the best of Lessor’s knowledge and belief, there are no suits or proceedings pending or threatened
against or affecting Lessor, which if determined adversely to Lessor will have a material adverse effect
on the ability of Lessor to fulfill its obligations under the MOLA or any Schedule;
(f) The Schedule Term as specified in the applicable Schedule does not exceed 75% of the useful life of the
Hardware, and the present value of the Rent Payments for the Hardware on the Schedule
Commencement Date does not equal or exceed ninety percent (90%) of the value of the Hardware; and
DIR Contract # DIR-TSO-3763 Page 12 of 17 Appendix E, MOLA
(g) Lessor acknowledges that DIR, as a government agency, is subject to the Texas Public Information
Act, and that DIR will comply with such Act, including all opinions of the Texas Attorney General's
Office concerning this Act.
23. Default.
Lessee shall be in default under a Schedule upon the occurrence of any one or more of the following events
(each an “Event of Default”): (a) nonpayment or incomplete payment by Lessee of Rent or any other sum
payable on its due date; (b) Lessee’s material breach of this MOLA, any Schedule, or any applicable
software license agreement, which is not cured within thirty (30) days after written notice thereof from
Lessor; (c) Lessee’s filing of any proceedings commencing bankruptcy or the taking of other similar action
by Lessee under any state insolvency or similar law, (d) the filing of any involuntary petition against Lessee
or the appointment of any receiver not dismissed within sixty (60) days from the date of said filing or
appointment; (e) subjection of a substantial part of Lessee’s property or any part of the Hardware to any
levy, seizure, assignment or sale for or by any creditor or governmental agency; or (f) any representation or
warranty made by Lessee in this MOLA, any Schedule or in any document furnished by Lessee to Lessor
in connection therewith or with the acquisition or use of the Assets being or becoming untrue in any material
respect.
24. Remedies.
(a) Lessor’s Remedies.
i. Upon the occurrence of an “Event of Default,” Lessor may, in its sole discretion, do any one or
more of the following:
A. after giving thirty (30) days prior written notice to Lessee of the Event of Default, during which
time Lessee shall have the opportunity to cure such Default, terminate any or all Schedules
executed by Lessor and the defaulting Lessee;
B. without Lessee and DIR waiving the doctrines of sovereign immunity and immunity from suit,
and to the extent allowed by the laws and Constitution of the State of Texas, Lessor may
proceed by appropriate court action to enforce the performance of the terms of the Schedule;
C. after giving thirty (30) days prior written notice to Lessee of the Event of Default, during which
time Lessee shall have the opportunity to cure such Default, and whether or not the Schedule
is terminated, take possession of the Hardware and Software wherever located, without
additional demand, liability, court order or other process of law. To the extent permitted by
Texas law, Lessee hereby authorizes Lessor, its assigns or the agents of either to enter upon
the premises where such Hardware or Software is located or cause Lessee, and Lessee hereby
agrees, to return such Hardware and Software to Lessor in accordance with the requirements
of Section 15 (“Option to Extend; Surrender of Hardware and Software Assets”) hereof;
D. by notice to Lessee, and to the extent permitted by law, declare immediately due and payable
and recover from Lessee, as liquidated damages and not as a penalty, the sum of:
DIR Contract # DIR-TSO-3763 Page 13 of 17 Appendix E, MOLA
I. the present value of the Rent owed from the earlier of the last date of payment by Lessee
or the date Lessor obtains a judgment against Lessee until the end of the Schedule Term
plus, if the Hardware is not returned to or repossessed by Lessor, the present value of the
Stipulated Loss Value of the Hardware at the end of the Schedule Term, each discounted
at a rate equal to the rate used by Lessor for business opportunity analysis;
II. without Lessee and DIR waiving the doctrines of sovereign immunity and immunity from
suit, and to the extent allowed by the laws and Constitution of the State of Texas, costs,
fees (including all attorneys’ fees and court costs) and expenses associated with collecting
said sums; and
III. interest on (I) from the date of default at 1½% per month or portion thereof (or the highest
rate allowable by law, if less) and, on (II) from the date Lessor incurs such fees, costs or
expenses.
ii. Upon return or repossession of the Hardware, Lessor may, if it so decides in its sole discretion,
upon notice to Lessee, use reasonable efforts to sell, re-lease or otherwise dispose of such
Hardware, in such manner and upon such terms as Lessor may determine in its sole discretion, so
long as such manner and terms are commercially reasonable. Upon disposition of the Hardware,
Lessor shall credit the Net Proceeds (as defined below) to the damages paid or payable by Lessee.
Proceeds upon sale of the Hardware shall be the sale price paid to Lessor less the Stipulated Loss
Value in effect as of the date of default. Proceeds upon a re-lease of the Hardware shall be all rents
to be received for a term not to exceed the remaining Schedule Term, discounted to present value
as of the commencement date of the re-lease at Lessor’s current applicable debt rate. Without
Lessee and DIR waiving the doctrines of sovereign immunity and immunity from suit, and to the
extent allowed by the laws and Constitution of the State of Texas, “Net Proceeds” shall be the
Proceeds of sale or re-lease as determined above, less all costs and expenses incurred by Lessor in
the recovery, storage and repair of the Hardware, in the remarketing or disposition thereof, or
otherwise as a result of Lessee’s default, including any court costs and attorney’s fees and interest
on the foregoing at eighteen percent (18%) per annum or the highest rate allowable by law, if less,
calculated from the dates such costs and expenses were incurred until received by Lessor. Lessee
shall remain liable for the amount by which all sums, including liquidated damages, due from
Lessee exceeds the Net Proceeds. Net Proceeds in excess thereof are the property of and shall be
retained by Lessor.
iii. No termination, repossession or other act by Lessor in the exercise of its rights and remedies upon
an Event or Default by Lessee shall relieve Lessee from any of its obligations hereunder. No
remedy referred to in this Section is intended to be exclusive, but each shall be cumulative and in
addition to any other remedy referred to above or otherwise available to Lessor at law or in equity.
iv. Neither DIR nor non-defaulting Lessees shall be deemed in default under the MOLA or Schedules
because of the default of a particular Lessee. Lessor’s remedies under this Section 24 shall not
extend to DIR and those non-defaulting Lessees.
(b) Lessee’s Remedies. Anything herein to the contrary notwithstanding, Lessee shall have all rights
provided under Tex. Bus. & Comm. Code § 2A.508 through § 2A.522, including without limitation, the
DIR Contract # DIR-TSO-3763 Page 14 of 17 Appendix E, MOLA
right to cancel a Schedule and recover damages from Lessor in the event of nonperformance of or other
default by Lessor hereunder.
(c) Each party agrees that any delay or failure by the other party to enforce that party’s rights under this
MOLA or a Schedule does not prevent that party from enforcing its rights at a later time.
25. Notices and Waivers.
(a) All notices relating to this MOLA shall be delivered to DIR or Lessor as specified in Section 6 of the
Contract, or to another representative and address subsequently specified in writing by the appropriate
parties hereto. All notices relating to a Schedule shall be delivered in person to an officer of Lessor or
Lessee or shall be given by certified or registered mail or overnight carrier to Lessor or Lessee at its
respective address shown on the Schedule or to another address subsequently specified in writing by the
appropriate parties thereof. DIR, Lessee, and Lessor intend and agree that a photocopy or facsimile of
this MOLA or a Schedule and all related documents, including but not limited to the Acceptance
Certificate, with their signatures thereon shall be treated as originals, and shall be deemed to be as
binding, valid, genuine, and authentic as an original signature document for all purposes.
(b) A waiver of a specific default shall not be a waiver of any other or subsequent default. No waiver of
any provision of this MOLA or a provision of a Schedule shall be a waiver of any other provision or
matter, and all such waivers shall be in writing and executed by an officer of the waiving party. No
failure on the part of a party to exercise, and no delay in exercising, any right hereunder shall operate as
a waiver thereof.
26. Assignment by Lessor; Assignment or Sublease by Lessee.
(a) Upon thirty (30) days advance written notice to Lessee and provided that any such assignee expressly
assumes Lessor’s obligations under this MOLA and each Schedule, Lessor may (i) assign all or a portion
of Lessor’s right, title and interest in this MOLA and/or any Schedule; (ii) grant a security interest in
the right, title and interest of Lessor in the MOLA, any Schedule and/or any Asset; and/or (iii) sell or
transfer its title and interest as owner or licensor of the Hardware and Software and/or as Lessor under
any Schedule; and DIR and each Lessee leasing Hardware under the MOLA understand and agree that
Lessor’s assigns may each do the same (hereunder collectively “Assignment”). All such Assignments
shall be subject to each Lessee’s rights under the Schedule(s) executed between it and Lessor and to
DIR’s rights under the MOLA. Each Lessee leasing Assets through Schedules under this MOLA and
DIR hereby consent to such Assignments and agree to execute and deliver promptly such
acknowledgements, Opinions of Counsel and other instruments reasonably requested to effect such
Assignment. Lessor shall remain liable for performance under the MOLA and any Schedule(s) executed
hereunder to the extent Lessor’s assigns do not perform Lessor’s obligations under the MOLA and
Schedule(s) executed hereunder. Upon any such Assignment, all references to Lessor shall also include
all such assigns, whether specific reference thereto is otherwise made herein.
(b) Lessee will not sell, assign, sublet, pledge or otherwise encumber, or permit a lien to exist on or against
any interest in this MOLA or the Assets without Lessor’s prior written consent except otherwise
permitted under this MOLA; provided, however, that no such prior written consent from Lessor is
necessary in the event of a legislative mandate to transfer the MOLA to another state agency.
DIR Contract # DIR-TSO-3763 Page 15 of 17 Appendix E, MOLA
27. Delivery of Related Documents.
For each Schedule, Lessee will provide the following documents and information satisfactory to Lessor: (a)
Certificate of Acceptance (if Acceptance has taken place); (b) Opinion of Counsel; (c) Financial Statements;
(d) incumbency certificate; and (e) other documents specified in the applicable Schedule as being reasonably
required by Lessor.
28. Miscellaneous.
(a) Prior to delivery of any Assets, the obligations of Lessor hereunder shall be suspended to the extent that
it is hindered or prevented from performing because of causes beyond its control. In such event, the
obligation of Lessee to commence Rents for such Assets shall also be suspended.
(b) Lessor and Lessee acknowledge that there are no agreements or understanding, written or oral, between
them with respect to the Assets, other than as set forth in this MOLA, including the Contract, and in
each Schedule to which Lessee is a signatory party. Lessor and Lessee further acknowledge that this
MOLA, including the Contract, and each Schedule to which Lessee is a party contain the entire
agreement between Lessor and Lessee and supersedes all previous discussions and terms and conditions
of any purchase orders issued by Lessee, order acknowledgement and other forms issued by Lessor, and
the like. DIR and Lessor acknowledge that there are no agreements or understandings, written or oral,
between them other than as set forth in this MOLA and the Contract and that both contain the entire
agreement between them. The terms and conditions of this MOLA may be amended only by written
instrument executed by Lessor and DIR. The terms of a Schedule may only be amended in a writing
signed by both Lessee and Lessor.
DIR Contract # DIR-TSO-3763 Page 16 of 17 Appendix E, MOLA
Attachment 1 to the Master Operating Lease Agreement
Financial Disclosure Summary
Lease Rate Factor(s): Response Notes
Equipment Type A
Equipment Type B
Equipment Type C
How is Daily Rental calculated?
Is Daily Rental invoiced separately
or rolled into monthly rental?
Yes
No
N/A
Is this a Step Lease? Yes
No
Does this lease include software? Yes
No
If yes, who owns the software? Agency
Lessor
Personal Property Tax Response Notes
Estimated PPT
PPT Payment made by Agency
Lessor on Agency behalf
PPT calculation method
Agency pays direct
Lessor pays and passes invoice
through
Lessor estimates and includes
Lessor sets PPT at disclosed rate
If PPT rate changes, how are
charge backs or short falls
handled?
N/A - Agency pays direct
N/A - Lessor pays/passes invoice
through
Lessor is responsible
Lessee is invoiced for short fall
Equipment Schedule Details Response Notes
Can Agency make decisions at
asset level (extend, purchase,
return)?
Asset level
All and not less than all
Does this ES auto extend? Yes
No
If Yes, how long?
What is the cost of the Auto
extension?
What is the notice period?
DIR Contract # DIR-TSO-3763 Page 17 of 17 Appendix E, MOLA
Are negotiated extensions FMV
based?
Yes
No
On FMV, can Agency select own
evaluator?
Yes
No
Is asset and lease information
available online?
Yes
No
End of Lease Details Response Notes
Where are the assets returned to?
What is the return freight cost?
Who pays the return freight cost? Agency
Lessor
Do I need to return original
packaging?
Yes
No
If yes, what is the cost if not
returned?
Do I need to return original
manuals and documentation?
Yes
No
If yes, what is the cost if not
returned?
Do I need to return software?
Yes
No
If yes, what is the cost if not
returned?
Is there an FMV purchase cost
cap?
Yes
No
If yes, what is the cost cap
percentage?
What is the cost for a lost asset?
What is the cost for missing
equipment?
What is the cost for data
sanitization on assets with
memory?
What is the cost for data
sanitization?
What is the cost for on-site data
destruction?
CSI Leasing – SLED & Public Sector Finance