PC-12 (2/99)
STATE ON NORTH CAROLINA
DEPARTMENT OF ADMINISTRATION
DIVISION OF PURCHASE AND CONTRACT
LEASE AGREEMENT
GENERAL CONTRACT TERMS AND CONDITIONS
1. TERM OF CONTRACT:
This Contract and Agreement is effective from the date of contract award and shall be in effect for a period of months from the date that a machine is installed and accepted by the State subject to all terms and conditions and contained herein.
2. CONTRACT CONTINUATION:
The State may at its option extend this Contract, as provided for in the Invitation for Bids, beyond the initial contract period subject to the Terms and Conditions as provided for herein.
3. ACCEPTANCE AND REJECTION OF BIDS AND CONTRACTS:
The State reserves the right to reject any and all bids, to waive any informality in bids and unless otherwise specified by the bidder, to accept any items in the bid.
4. IMPLEMENTATION:
This Contract shall be implemented by Purchase Order(s). For purpose of construing a transaction as an integrated Contract the following shall be considered a single transaction and legal and binding agreement:
a. The Lease Agreement, PC- 12, contained in the Invitation for Bids.
b. The Terms and Conditions contained in the Bid.
c. A Purchase Order (s) that references the Invitation for Bids.
5. DEFINITIONS:
For purposes of this Contract and related documents, the listed definitions will apply.
a. Equipment: The goods enumerated on the attached Purchase Order(s) and including replacement, repair parts, additional attachments and accessories.
b. Acceptance: The written acknowledgement by the State that the equipment is installed and is performing satisfactorily.
c. Acceptance Date: Date when equipment is operating satisfactorily as certified by the State.
d. Assignee: The person (s) to whom Contractor transfer rights of payment only pursuant to part II entitled ASSIGNMENT.
e. Purchase Order: The document signed by the State which authorizes the installation of equipment by the State, describes the Contract terms for that equipment, and the State's obligations with respect to payment.
6. TAXES:
a. The State agrees to pay amounts equal to any taxes resulting from this Contract exclusive of property taxes and taxes based on net income.
b. All agencies participating in this contract are exempt from Federal Taxes, such as excise and transportation. Exemption forms submitted by the contractor will be executed and returned by the using agency.
c. Applicable North Carolina sales and use taxes shall not be shown on bids but shall be added to invoices as a separate item. Registration number should be shown in the space provided on the proposal form.
7. AFFIRMATIVE ACTION:
The successful Contractor will take affirmative action in complying with all federal and state requirements concerning fair employment and employment of the handicapped and concerning the treatment of all employees, without regard or discrimination by reason of race, color, religion, sex, national origin or physical handicap.
8. AMOUNT AND TIME OF PAYMENT:
Monthly Charges will be invoiced in advance as of the first of each month or post monthly. If applicable, additional Use Charges and Monthly Use Charges will invoiced in the month following the month in which they are incurred. When a machine, model changes or feature is installed for a part of a calendar month, the Monthly Charges will be prorated on the basis of a 30-day month. Additional Use Charges will be prorated in accordance with Contractor's established practices. Payment will be made within 30 days after the date of invoice. All other charges due hereunder are payable as specified in the invoice.
9. PRICE PROTECTION PERIOD:
a. The monthly rates for leased machines shall not be subject to any increase during the State's 12-month fiscal year in which notice is given for the machines installed during the fiscal year. The State's fiscal year is from July I to June 30.
b. Any rate reductions which might be generally available during the contract period on the part of the Contractor to other state and local government customers will be passed on to the State, when effective, at any time during the contract period.
c. Price increases may be allowed, subject to the following:
1. Notification must be submitted in writing to the using agency and the Division of Purchase and Contract at least 90 days prior to the effective date of increase.
2. The State reserves the right to accept the price increase, or terminate the Contract as provided.
10. SITE PREPARATION:
Site preparation specifications shall be furnished in writing by the Contractor in conjunction with the Invitation for Bids. These specifications shall be in such detail as to insure that the equipment to be installed shall operate efficiently from the point of view of environment. The Contractor shall advise as to the adequacy of the State's planned layout of the equipment.
The State will prepare the site as its own expense and in accordance with specifications as furnished by the Contractor. Any alterations or modification in site preparation which are directly attributable to incomplete or erroneous specifications provided by the Contractor and which would involve additional expenses to the State, shall be made at the expense of the Contractor.
11. ASSIGNMENT:
The State agrees not to sell, assign, lease, pledge or otherwise encumber or suffer a lien upon or against any interest in this agreement or the equipment or to remove the equipment from its place of installation without the Contractor's prior written consent. Consent to any one of the foregoing actions applies only in the given instance and is not a consent to any subsequent like acts by the State or any other person. The Contractor agrees not to assign, lease or pledge this equipment. The State recognizes that the Contractor may assign his right to receive payment under this Contract with written permission of the State. In no event does the recognition of assignment of the Contractor's right to receive payments obligate the State to anyone except the Contractor. The State merely recognizes financial assignment as a convenience to the Contractor and will hold the Contractor responsible for fulfillment of all contract obligations. Payments under an assignment of financial rights must be in accordance with the General Statutes of North Carolina as follows:
a. Check made payable to the Contractor and Contractor endorses it over to the Assignee.
b. Check made payable to the Contractor and forwarded directly to Assignee.
c. Check made payable jointly to the Contractor and Assignee and forwarded directly to the Assignee.
12. CONTRACT TERMINATION:
This Contract is effective from the date of acceptance by the State until terminated, in whole or in part, as provided below:
a. Termination for Non-Available Funds: The State's obligations to pay any amounts due under the proposed Contract are contingent upon availability and continuation of funds for that purpose. In the event of Non-Available Funds the State may terminate this Contract by giving the Contractor thirty (30) days prior written notice. All payment obligations of the State and interests in the equipment will cease upon the date of termination. Notwithstanding the foregoing, the State agrees (i) not to effect termination of the Contract under this provision if funds are available to continue the Contract for this or functionally similar equipment; and (ii) that it will use its best efforts to obtain approval of the necessary funds to continue the Contract by taking appropriate action to request adequate funds to continue the Contract in force.
b. Activity Discontinuance: This Contract may be terminated with thirty (30) days written notice to the Contractor if the organizational activity within the State agency using the equipment is discontinued or disestablished.
c. Termination After Initial Contract Period: The State may, at its discretion, terminate this Contract at the end of the initial contract period stated in part I of this Contract for any reason including, but not limited to, an indication that revision (s) in equipment would be to the State's advantage; cancellation of or changes in the intended project or other determination that the equipment is no longer needed; the limitation or lack of personnel for operations; or a general market or technology change that would make termination more advantageous to the State. Unless otherwise indicated in the bid, such termination of the Contract would be without additional cost.
d. Contract Conversion, after having served written notification of termination, the State, upon notice to the Contractor, shall have the right to rent the equipment on a month-to-month basis at the Contractor's then current commercial rates.
e. Penalty Charges: Unless otherwise indicated in the bid, in any case of termination, as stated above, the State shall not be obligated to pay charges of any type for termination or penalty.
f. Termination of the Contract must be accompanied by evidence of approval of the Division of Purchase and Contract of the Department of Administration.
13. DEFAULT AND REMEDIES:
Default: Any of the following events will constitute an Event of Default under this Contract:
a. The State fails to make any payment required when due and such failure continues after written notice by the Contractor for a period of thirty (30) days after the written notice is given and the Contractor is not himself or default.
b. The State fails to observe or perform any other covenants, conditions or agreements of the Contract and such failure continues for thirty (30) days without cure after the Contractor provides the State written notice of the failure.
c. The Contractor fails to apply any payment required to be paid under this Agreement towards retirement of the State's obligation hereunder.
d. The Contractor fails to comply with this Agreement, or otherwise observe, keep or perform any provision of this Agreement required to be observed, kept or performed by Contractor.
e. Exceptions: Except with respect to defaults of subcontractors, the Contractor shall not be liable for a failure to comply with this Agreement which arises out of causes beyond the control of and without the fault or negligence of the Contractor. If the failure is caused by the default of a subcontractor, and if such default arises out of causes beyond the control of both the Contractor and subcontractor, and without the fault or negligence of either of them, the Contractor shall not be liable for any excess costs.
Remedies: In the event of default as specified above, failure by either the Contractor or State to remedy such default within a period of thirty (30) days from receipt of written demand by either party, the Contractor or the State may, at its respective option as may be applicable, take any of the following actions:
a. Proceed by appropriate court action(s) to enforce performance of the applicable covenants of this Contract or to recover damages for breach.
b. The State may terminate said Contract and direct the Contractor to remove all equipment at the Contractor's expense with no cost to be incurred by the State.
Further Remedies: All remedies of the Contractor and the State are cumulative and may be exercised concurrently or separately. The exercise of any other remedy shall not be deemed an election of such remedy or preclude the exercise of any other remedy.
14. OPERATIONAL USE TIME:
Unless otherwise indicated in the bid, lease rates as bid shall allow unlimited use of the equipment at the convenience of the State, and shall not be restricted to consecutive hours, length of personnel shifts, or any other reason.
15. TRANSPORTATION CHARGES:
Transportation charges will be prepaid by the Contractor and invoiced to the State as a separate item. Rigging and drayage charges will be the responsibility of the State.
16. EOUIPMENT RETURN:
The State is responsible for the return costs related to the termination of equipment except in the case of default by the Contractor, including deinstallation, rigging, drayage and freight to destination within the Continental United States.
17. NON-PERFORMANCE:
Equipment and programming aids furnished by the Contractor to fulfill technical requirements shall be in good working order and be maintained in good working order for the duration of the Contract. If during the period while equipment is under Full Service Maintenance the State determines the equipment is not rendering satisfactory service, the Contractor will review with the State the service activity of such equipment and determine an action to satisfy the State.
18. PATENT INDEMNITY:
The Contractor will defend at its own expense, any action brought against the State to the extent that it is based on a claim that the machines (or programming) supplied by the Contractor infringe a United States Patent, and the Contractor will pay any costs which are attributable to any such claims, but such defense and payments are conditioned on the following: (a) that the Contractor shall be notified promptly in writing by the State of any notice of such claim; and lb) that the Contractor shall have sole control of the defense of any action on such claim and all negotiation for its settlement or compromise; and (c) should the machines become or in the Contractor's opinion be likely to become, the subject of a claim of infringement of a United State patent, that the State shall permit the Contractor, at its option and expense, either to procure for the State the right to continue using the machines, to replace or modify the same so that they become noninfringing, or to discontinue the machines and accept their return. The Contractor shall have no liability to the State under any provisions of this clause with respect to any claim of patent infringement which is based upon combination of machines or programming supplied hereunder with machines or devices or programming not supplied by the Contractor. The foregoing states the entire liability of the Contractor with respect to infringement of patents by the machines or any parts thereof.