for: financial services: line of credit, equipment lease...

Request for Propo

For: Financial Serv Equipment Le

Event

Bidder’s Electronic Question Due D(Refer to RFP Section 1.3.1 for more informatio

Mandatory Pre-bid Conference

Mandatory Site Visit

Bid Submission Due Date (Refer to RFP Section 1.3.2 for more informatio

Dates are subject to change. All changes Division of Purchase and Property websi

Small Business Set-Aside

(Refer to RFP Section 4.4.2.2 for more information.)

Not

Enti

Part

Sub

RFP Issued By State of New Jersey Department of the Treasury Division of Purchase and Property Trenton, New Jersey 08625-0230 Date: February 6, 2006

sal 06-X-38322

ices: Line of Credit, ase Purchase Financing

Date Time

ate n.) 2/17/06 5:00 PM

N/A N/A

N/A

N/A

n.) 3/14/06 2:00 PM

will be reflected in Addenda to the RFP posted on the te.

Status Applicable

re Contract

ial Contract

contracting Only

Category I

II

III

Using Agency

State of New Jersey Department of the Treasury Division of Administration Trenton, New Jersey 08625-0211

Table of Contents

1.0 INFORMATION FOR BIDDERS..................................................................................................................................................... 5 1.1 PURPOSE AND INTENT........................................................................................................................................................... 5 1.2 BACKGROUND......................................................................................................................................................................... 5 1.3 KEY EVENTS ............................................................................................................................................................................ 6

1.3.1 ELECTRONIC QUESTION AND ANSWER PERIOD ....................................................................................................... 6 1.3.2 SUBMISSION OF BID PROPOSAL .................................................................................................................................. 7

1.4 ADDITIONAL INFORMATION................................................................................................................................................... 7 1.4.1 ADDENDA: REVISIONS TO THIS RFP............................................................................................................................ 7 1.4.2 BIDDER RESPONSIBILITY .............................................................................................................................................. 8 1.4.3 COST LIABILITY ............................................................................................................................................................... 8 1.4.4 CONTENTS OF BID PROPOSAL..................................................................................................................................... 8 1.4.5 PRICE ALTERATION........................................................................................................................................................ 8 1.4.6 JOINT VENTURE.............................................................................................................................................................. 8

2.0 DEFINITIONS ................................................................................................................................................................................. 9 2.1 GENERAL DEFINITIONS.......................................................................................................................................................... 9 2.2 CONTRACT SPECIFIC DEFINITIONS ................................................................................................................................... 11

3.0 SCOPE OF WORK....................................................................................................................................................................... 13 3.1 GENERAL .............................................................................................................................................................................. 13 3.2 PAYMENT BY THE CONTRACTOR TO VENDORS ............................................................................................................. 13 3.3 FUNDING ............................................................................................................................................................................... 13 3.4 INTEREST RATE ................................................................................................................................................................... 13 3.5 DRAWDOWNS....................................................................................................................................................................... 13 3.6 FEES AND EXPENSES ......................................................................................................................................................... 14 3.7 ASSIGNMENT/PUBLIC OFFERING ...................................................................................................................................... 14 3.8 PAYMENT BY THE STATE TO THE CONTRACTOR ........................................................................................................... 14 3.9 EQUIPMENT .......................................................................................................................................................................... 14 3.10 CHALLENGE TO A CONTRACT AWARD DECISION.......................................................................................................... 14 3.11 ESCROW ............................................................................................................................................................................. 15 3.12 CONTRACTOR GUARANTEES........................................................................................................................................... 15 3.13 RELATIONSHIP OF THIS CONTRACT TO THE MASTER LEASE AGREEMENT.............................................................. 15

4.0 BID PROPOSAL PREPARATION AND SUBMISSION............................................................................................................... 16 4.1 GENERAL ............................................................................................................................................................................... 16 4.2 BID PROPOSAL DELIVERY AND IDENTIFICATION............................................................................................................. 16 4.3 NUMBER OF BID PROPOSAL COPIES................................................................................................................................. 16 4.4 BID PROPOSAL CONTENT.................................................................................................................................................... 16

4.4.1 FORMS THAT MUST BE SUBMITTED WITH BID PROPOSAL .................................................................................... 17 4.4.1.1 SIGNATORY PAGE................................................................................................................................................ 17 4.4.1.2 OWNERSHIP DISCLOSURE FORM...................................................................................................................... 17 4.4.1.3 DISCLOSURE OF INVESTIGATIONS/ACTIONS INVOLVING BIDDER ............................................................... 17

4.4.2 PROOF OF REGISTRATIONS THAT MUST BE SUBMITTED WITH THE BID PROPOSAL........................................ 17 4.4.2.1 BUSINESS REGISTRATION CERTIFICATE FROM THE DIVISION OF REVENUE ............................................ 17 4.4.2.2 SMALL BUSINESS SET-ASIDE CONTRACTS...................................................................................................... 18

4.4.3 FORMS THAT MUST BE SUBMITTED BEFORE CONTRACT AWARD AND SHOULD BE SUBMITTED WITH THE BID PROPOSAL....................................................................................................................................................................... 18

4.4.3.1 MACBRIDE PRINCIPLES CERTIFICATION .......................................................................................................... 18 4.4.3.2 AFFIRMATIVE ACTION.......................................................................................................................................... 18 4.4.3.3 SERVICES SOURCE DISCLOSURE FORM.......................................................................................................... 18

4.4.4 TECHNICAL PROPOSAL ............................................................................................................................................... 18

4.4.4.1 MANAGEMENT OVERVIEW.................................................................................................................................. 18 4.4.4.2 CONTRACT MANAGEMENT ................................................................................................................................. 19 4.4.4.3 CONTRACT SCHEDULE........................................................................................................................................ 19 4.4.4.4 MOBILIZATION AND IMPLEMENTATION PLAN................................................................................................... 19 4.4.4.5 POTENTIAL PROBLEMS ....................................................................................................................................... 19

4.4.5 ORGANIZATIONAL SUPPORT AND EXPERIENCE ..................................................................................................... 19 4.4.5.1 LOCATION.............................................................................................................................................................. 19 4.4.5.2 ORGANIZATION CHART (CONTRACT SPECIFIC) .............................................................................................. 19 4.4.5.3 RESUMES .............................................................................................................................................................. 20 4.4.5.4 BACKUP STAFF..................................................................................................................................................... 20 4.4.5.5 ORGANIZATION CHART (ENTIRE FIRM) ............................................................................................................. 20 4.4.5.6 EXPERIENCE OF BIDDER ON CONTRACTS OF SIMILAR SIZE AND SCOPE.................................................. 20 4.4.5.7 FINANCIAL CAPABILITY OF THE BIDDER........................................................................................................... 20 4.4.5.8 SUBCONTRACTOR(S)........................................................................................................................................... 21

4.4.6 PRICE SCHEDULE......................................................................................................................................................... 21 5.0 SPECIAL CONTRACTUAL TERMS AND CONDITIONS............................................................................................................ 22

5.1 PRECEDENCE OF SPECIAL CONTRACTUAL TERMS AND CONDITIONS........................................................................ 22 5.2 CONTRACT TERM AND EXTENSION OPTION .................................................................................................................... 22 5.3 CONTRACT TRANSITION...................................................................................................................................................... 22 5.4 CONTRACT AMENDMENT..................................................................................................................................................... 22 5.5 CONTRACTOR RESPONSIBILITIES ..................................................................................................................................... 22 5.6 SUBSTITUTION OF STAFF.................................................................................................................................................... 23 5.7 SUBSTITUTION OR ADDITION OF SUBCONTRACTOR(S) ................................................................................................. 23 5.8 OWNERSHIP OF MATERIAL.................................................................................................................................................. 23 5.9 DATA CONFIDENTIALITY ...................................................................................................................................................... 24 5.10 NEWS RELEASES................................................................................................................................................................ 24 5.11 ADVERTISING ...................................................................................................................................................................... 24 5.12 LICENSES AND PERMITS ................................................................................................................................................... 24 5.13 CLAIMS AND REMEDIES..................................................................................................................................................... 25

5.13.1 CLAIMS......................................................................................................................................................................... 25 5.13.2 REMEDIES.................................................................................................................................................................... 25 5.13.3 REMEDIES FOR FAILURE TO COMPLY WITH MATERIAL CONTRACT REQUIREMENTS..................................... 25

5.14 LATE DELIVERY................................................................................................................................................................... 25 5.15 RETAINAGE.......................................................................................................................................................................... 25 5.16 STATE'S OPTION TO REDUCE SCOPE OF WORK ........................................................................................................... 25 5.17 SUSPENSION OF WORK..................................................................................................................................................... 26 5.18 CHANGE IN LAW.................................................................................................................................................................. 26 5.19 CONTRACT PRICE INCREASE (PREVAILING WAGE) ...................................................................................................... 26 5.20 ADDITIONAL WORK AND/OR SPECIAL PROJECTS.......................................................................................................... 26 5.21 FORM OF COMPENSATION AND PAYMENT..................................................................................................................... 27

5.21.1 PAYMENT TO CONTRACTOR - OPTIONAL METHOD............................................................................................... 27 5.22 MODIFICATIONS AND CHANGES TO THE NJ STANDARD TERMS AND CONDITIONS VERSION 01 20 06 ................ 27

5.22.1 PATENT AND COPYRIGHT INDEMNITY .................................................................................................................... 27 5.22.2 INDEMNIFICATION ...................................................................................................................................................... 28

6.0 PROPOSAL EVALUATION/CONTRACT AWARD ..................................................................................................................... 29 6.1 PROPOSAL EVALUATION COMMITTEE............................................................................................................................... 29 6.2 ORAL PRESENTATION AND/OR CLARIFICATION OF BID PROPOSAL............................................................................. 29 6.3 EVALUATION CRITERIA ........................................................................................................................................................ 29

6.3.1 TECHNICAL EVALUATION CRITERIA .......................................................................................................................... 29 6.3.2 BIDDER’S PRICE SCHEDULE ....................................................................................................................................... 30 6.3.3 BID DISCREPANCIES .................................................................................................................................................... 30

6.4 NEGOTIATION AND BEST AND FINAL OFFER (BAFO)....................................................................................................... 30 7.0 CONTRACT AWARD................................................................................................................................................................... 32

7.1 DOCUMENTS REQUIRED BEFORE CONTRACT AWARD .................................................................................................. 32 7.1.1 REQUIREMENTS OF N.J.S.A. 19:44A-20.13-25 (FORMERLY EXECUTIVE ORDER 134).......................................... 32

7.1.1.1 DEFINITIONS ......................................................................................................................................................... 32 7.1.1.2 BREACH OF TERMS OF THE LEGISLATION....................................................................................................... 32 7.1.1.3 CERTIFICATION AND DISCLOSURE REQUIREMENTS...................................................................................... 33 7.1.1.4 STATE TREASURER REVIEW .............................................................................................................................. 33 7.1.1.5 ADDITIONAL DISCLOSURE REQUIREMENT OF P.L. 2005, C. 271.................................................................... 33

7.1.2 SOURCE DISCLOSURE REQUIREMENTS................................................................................................................... 34 7.1.2.1 REQUIREMENTS OF N.J.S.A. 52:34-13.2............................................................................................................. 34 7.1.2.2 SOURCE DISCLOSURE REQUIREMENTS .......................................................................................................... 34 7.1.2.3 BREACH OF CONTRACT OF EXECUTIVE ORDER 129...................................................................................... 34

7.2 FINAL CONTRACT AWARD ................................................................................................................................................... 34 7.3 INSURANCE CERTIFICATES................................................................................................................................................. 35 7.4 PERFORMANCE BOND ......................................................................................................................................................... 35

8.0 CONTRACT ADMINISTRATION.................................................................................................................................................. 36 8.1 CONTRACT MANAGER.......................................................................................................................................................... 36

8.1.1 STATE CONTRACT MANAGER RESPONSIBILITIES................................................................................................... 36 8.1.2 COORDINATION WITH THE STATE CONTRACT MANAGER ..................................................................................... 36

1.0 INFORMATION FOR BIDDERS 1.1 PURPOSE AND INTENT This Request for Proposal (RFP) is issued by the Purchase Bureau, Division of Purchase and Property, Department of the Treasury (the "Division"), on behalf of the State of New Jersey, Department of the Treasury, Division of Administration (DOA). The purpose of this RFP is to solicit bid proposals to engage a contractor to provide lease financing through a Line of Credit (LOC) for the acquisition of certain State selected equipment (the "Equipment") under a Master Lease Purchase Agreement ("the Agreement"). The Agreement will be between the State and the Contractor. (See Appendix 1 – Master Lease, which includes exhibits A, B, and C). Under the LOC arrangement, the State enters into the agreement with the contractor and the contractor arranges for financing.

The intent of this RFP is to award a contract to that responsible bidder whose bid proposal, conforming to this RFP, is most advantageous to the State, price and other factors considered. It is the State's intent to make one award to a single responsive bidder. The NJ Standard Terms & Conditions version 01 20 06 will apply to all contracts or purchase agreements made with the State of New Jersey. These terms are in addition to the terms and conditions set forth in this RFP and should be read in conjunction with them unless the RFP specifically indicates otherwise. 1.2 BACKGROUND This is a reprocurement of the Line of Credit, Equipment Lease Purchase Financing term contract, which expires on December 31, 2006.

The State's Master Lease (ML) Agreement and Escrow Agreements have been utilized over the past ten (10) years in numerous transactions and are widely accepted in the financial community.

The Purchase Bureau solicited comments from previous bidders in order to identify any issues that prevent the State from procuring the best possible product. The comments received and the State's response to those comments are contained in Appendix 2.

The pricing mechanism used in previous LOCs changed in LOC #4 and has remained consistent since then. The State now requires that bidders price their bid proposals using the "Interest Rates Swaps" section of the Federal Reserve's H.15 (519) release. (See Appendix 3).

This is the State's sixth LOC contract (LOC #6). The first contract was entered into November, 1995 for $35 million and was extended for an additional year and an additional $15 million. The second contract was entered into in October, 1998 for $100 million. The third contract was entered into in March 2000 for an additional $50 million. The fourth and fifth contracts were entered into in January 2002 and February 2005 respectively, both for $100 million. The basic equipment financed has been vehicles, computers, and furniture. The State reserves the right to obtain capital financing from other sources during the term of this contract for projects such as capital projects.

While the financing is for equipment, the State occasionally will ask the contractor to finance related soft costs. Soft costs are items such as software, programming and training and are usually small additions to the price of the equipment. This RFP requires bidders to disclose their internal policies regarding financing soft costs with related equipment. The resulting contract from this RFP will provide the State with lease financing to acquire capital equipment in an amount up to $100 million to be drawn down over a period of up to twenty-four (24) months. The State, however, is not obligated to draw on the full LOC. Under the LOC arrangement, the State enters into the Master Lease Agreement (Appendix 1) with the contractor for the entire line of credit for the term of the contract. The Master Lease Agreement is the overriding document for the lease purchase financings. As the State finances individual equipment, an equipment schedule will be created specifying the equipment items being financed (See Appendix 1, Exhibit A-1). These are consolidated in Weekly Payment Sheets (See Appendix 1, Exhibit B-2). Therefore, there will be one equipment schedule for each equipment item financed, and weekly Payment Sheets that consolidates the various equipment financings. The contractor arranges financing and pays equipment vendors as vendor invoices are forwarded to the contractor from DOA. Each payment to equipment vendors results in a drawdown on the line of credit. The vast majority of equipment financings (95% - 99%) require the contractor to pay equipment vendors directly. However, on rare occasions, the State may require the funds from equipment financing to be deposited in an Escrow Account and reserves the right to do so in this contract. The State pays semiannual debt service to the contractor in accordance with the fixed amortization schedule specified in the equipment schedule. The State selects and purchases the equipment, the contractor provides the financing. The current payment process by the contractor to vendors is as follows:

Vendors submit equipment invoices to State Agencies which in turn forward those invoices to the DOA for payment under the LOC. The State Agency authorizes the DOA to pay the vendor invoices on behalf of the State Agency using funds from the LOC.

DOA prepares and faxes a weekly payment request form, an equipment schedule and a payment summary with any applicable invoices internally to the Office of Public Finance (OPF), within the Department of the Treasury for processing. OPF then faxes completed amortization schedules and all backup material, including a completed weekly payment request form, equipment schedule, payment summary and Internal Revenue form 8038 - G or GC, to DOA within 1-2 business days (See Appendix 1, Exhibit pages B-3 and B-4). DOA accepts delivery of the OPF forms, signs them and overnights them on a weekly basis to the contractor for immediate payment to the vendors. 1.3 KEY EVENTS 1.3.1 ELECTRONIC QUESTION AND ANSWER PERIOD The Purchase Bureau will accept questions and inquiries from all potential bidders electronically via web form. To submit a question, please go to Current Bid Opportunities webpage or to http://ebid.nj.gov/QA.aspx

http://ebid.nj.gov/QA.aspx

Questions should be directly tied to the RFP and asked in consecutive order, from beginning to end, following the organization of the RFP. Each question should begin by referencing the RFP page number and section number to which it relates. Bidders are not to contact the Using Agency directly, in person, by telephone or by email, concerning this RFP. The cut-off date for electronic questions and inquiries relating to this RFP is indicated on the cover sheet. Addenda to this RFP, if any, will be posted on the Purchase Bureau website after the cut-off date (see Section 1.4.1. of this RFP for further information.) 1.3.2 SUBMISSION OF BID PROPOSAL In order to be considered for award, the bid proposal must be received by the Purchase Bureau of the Division of Purchase and Property at the appropriate location by the required time. ANY BID PROPOSAL NOT RECEIVED ON TIME AT THE LOCATION INDICATED BELOW WILL BE REJECTED. THE DATE AND TIME IS INDICATED ON THE COVER SHEET. THE LOCATION IS AS FOLLOWS: BID RECEIVING ROOM - 9TH FLOOR PURCHASE BUREAU DIVISION OF PURCHASE AND PROPERTY DEPARTMENT OF THE TREASURY 33 WEST STATE STREET, P.O. BOX 230 TRENTON, NJ 08625-0230 Directions to the Purchase Bureau can be found at the following web address: http://www.state.nj.us/treasury/purchase/directions.shtml Note: Bidders using USPS Regular or Express mail services should allow additional time since USPS mail deliveries are not delivered directly to the Purchase Bureau. 1.4 ADDITIONAL INFORMATION 1.4.1 ADDENDA: REVISIONS TO THIS RFP In the event that it becomes necessary to clarify or revise this RFP, such clarification or revision will be by addendum. Any addendum to this RFP will become part of this RFP and part of any contract awarded as a result of this RFP. ALL RFP ADDENDA WILL BE ISSUED ON THE DIVISION OF PURCHASE AND PROPERTY WEB SITE. TO ACCESS ADDENDA, SELECT THE BID NUMBER ON THE BIDDING OPPORTUNITIES WEB PAGE AT THE FOLLOWING ADDRESS: HTTP://WWW.STATE.NJ.US/TREASURY/PURCHASE/BID/SUMMARY/BID.SHTML. There are no designated dates for release of addenda. Therefore interested bidders should check the Purchase Bureau "Bidding Opportunities" website on a daily basis from time of RFP issuance through bid opening.

http://www.state.nj.us/treasury/purchase/directions.shtml

http://www.state.nj.us/treasury/purchase/bid/summary/bid.shtml

It is the sole responsibility of the bidder to be knowledgeable of all addenda related to this procurement. 1.4.2 BIDDER RESPONSIBILITY The bidder assumes sole responsibility for the complete effort required in submitting a bid proposal in response to this RFP. No special consideration will be given after bid proposals are opened because of a bidder's failure to be knowledgeable as to all of the requirements of this RFP. 1.4.3 COST LIABILITY The State assumes no responsibility and bears no liability for costs incurred by a bidder in the preparation and submittal of a bid proposal in response to this RFP. 1.4.4 CONTENTS OF BID PROPOSAL Subsequent to bid opening, all information submitted by bidders in response to the bid solicitation is considered public information, except as may be exempted from public disclosure by the Open Public Records Act, N.J.S.A. 47:1A-1 et seq., and the common law. A bidder may designate specific information as not subject to disclosure when the bidder has a good faith legal/factual basis for such assertion. The State reserves the right to make the determination and will advise the bidder accordingly. The location in the bid proposal of any such designation should be clearly stated in a cover letter. The State will not honor any attempt by a bidder either to designate its entire bid proposal as proprietary and/or to claim copyright protection for its entire proposal. All bid proposals, with the exception of information determined by the State to be proprietary, are available for public inspection. Interested parties can make an appointment with the Purchase Bureau to inspect bid proposals received in response to this RFP. 1.4.5 PRICE ALTERATION Bid prices must be typed or written in ink. Any price change (including "white-outs") must be initialed. Failure to initial price changes shall preclude a contract award from being made to the bidder. 1.4.6 JOINT VENTURE If a joint venture is submitting a bid proposal, the agreement between the parties relating to such joint venture should be submitted with the joint venture’s bid proposal. Authorized signatories from each party comprising the joint venture must sign the bid proposal. A separate Ownership Disclosure Form, Disclosure of Investigations and Actions Involving Bidder, Affirmative Action Employee Information Report, MacBride Principles Certification, and Business Registration or Interim Registration must be supplied for each party to a joint venture.

2.0 DEFINITIONS 2.1 GENERAL DEFINITIONS The following definitions will be part of any contract awarded or order placed as a result of this RFP. Addendum – Written clarification or revision to this RFP issued by the Purchase Bureau. All-Inclusive Hourly Rate – An hourly rate comprised of all direct and indirect costs including, but not limited to: overhead, fee or profit, clerical support, travel expenses, per diem, safety equipment, materials, supplies, managerial support and all documents, forms, and reproductions thereof. This rate also includes portal-to-portal expenses as well as per diem expenses such as food. Amendment – A change in the scope of work to be performed by the contractor. An amendment is not effective until it is signed by the Director, Division of Purchase and Property. Bidder – An individual or business entity submitting a bid proposal in response to this RFP. Contract – This RFP, any addendum to this RFP, and the bidder’s proposal submitted in response to this RFP, as accepted by the State. Contractor – The bidder awarded a contract resulting from this RFP. Also referred to as the Implementation Contractor. Director – Director, Division of Purchase and Property, Department of the Treasury. By statutory authority, the Director is the chief contracting officer for the State of New Jersey. Division – The Division of Purchase and Property Evaluation Committee – A committee established by the Director to review and evaluate bid proposals submitted in response to this RFP and to recommend a contract award to the Director. Firm Fixed Price – A price that is all-inclusive of direct cost and indirect costs, including, but not limited to, direct labor costs, overhead, fee or profit, clerical support, equipment, materials, supplies, managerial (administrative) support, all documents, reports, forms, travel, reproduction and any other costs. No additional fees or costs shall be paid by the State unless there is a change in the scope of work. Joint Venture – A business undertaking by two or more entities to share risk and responsibility for a specific project. May – Denotes that which is permissible, not mandatory. Project – The undertaking or services that are the subject of this RFP. Request for Proposal (RFP) – This document which establishes the bidding and contract requirements and solicits bid proposals to meet the purchase needs of the using Agencies as identified herein.

Shall or Must – Denotes that which is a mandatory requirement. Failure to meet a mandatory requirement will result in the rejection of a bid proposal as materially non-responsive. Should – Denotes that which is recommended, not mandatory. State Contract Manager – The individual responsible for the approval of all deliverables, i.e., tasks, sub-tasks or other work elements in the Scope of Work as set forth in Sections 5.2, 5.2.1, 5.2.2 and 5.2.3. Subtasks – Detailed activities that comprise the actual performance of a task. State – State of New Jersey. Subcontractor – An entity having an arrangement with a State contractor, where the State contractor uses the products and/or services of that entity to fulfill some of its obligations under its State contract, while retaining full responsibility for the performance of all of its [the contractor's] obligations under the contract, including payment to the subcontractor. The subcontractor has no legal relationship with the State, only with the contractor. Task – A discrete unit of work to be performed. Using Agency[ies] – The entity[ies] for which the Division has issued this RFP and will enter into a contract.

2.2 CONTRACT SPECIFIC DEFINITIONS

Cerificate of Participation – Financing in which an individual buys an ownership interest in a lease obligation, requiring prior state approval. Drawdowns – Individual or collective weekly payments made by the Lessor. This can be direct vendor payments or Escrow payments Equipment – An item or items of personal property which are or will be described in an equipment schedule and which are being or will be leased with options to repay pursuant to a lease. Escrow Account - An interest bearing fund established to hold money pledged and to be used to pay for an outstanding project Escrow Agreement – The agreement which establishes the relationship between the Lessee (State) and the Escrow agent. Escrow Funding – Making a payment to the Escrow Account Floating Rate Index - Refers to the Federal Reserve’s weekly Statistical release H.15 Grantor Trust - A mechanism wherein money is deposited with a trustee under a custodial or trust agreement Interest Rate Swaps – Tracked by the Federal Reserve and International Swaps and Derivatives Association (ISDA) and reported weekly in the Federal Reserves statistical release H.15 (519) selected interest rates. Internal Revenue form 8038GC – Information Return for small Tax-Exempt Governmental Bond Issues, Leases and Installment Sales required to be filed by the contractor if the issue price is under $100,000.00. Internal Revenue form 8038G - Information Return for Tax Exempt Governmental Obligations required to be filed by the contractor if the issue price is $100,000.00 or more. Lessee- State of New Jersey which assumes all responsibilities as the lease holder. Lessor - Contractor awarded the LOC contract and responsible for funding all of the State’s equipment requests Line of Credit (LOC) - The State of New Jersey’s publicly bid program which allows for the lease purchase financing of the State’s equipment needs. Public Sale of Participations – Indicates the securitization and sale of the lease similar to Certificates of Participation, requiring prior State approval Rental Payments - Debt Service Payments Semiannually - Twice a calendar year (June and December).

Semiannual in Arrears – Rental payments that are made six months after the debt has been incurred. Semiannual Payments in Arrears – Making the semi annual debt service payment. Soft Costs – Non-hardware or software related costs such as maintenance, programming, conversion, design/development or training costs.

State Master Lease Agreement - The State’s overriding legal document that sets forth all of the legal/financial rights of the contractor (Lessor) and the State of New Jersey (The “Lessee”). See Appendix 1, including Exhibits A, B and C.

3.0 SCOPE OF WORK 3.1 GENERAL

On average, the contractor shall be prepared to handle upwards of 250 vendor payments annually (see Appendix 4).

3.2 PAYMENT BY THE CONTRACTOR TO VENDORS The contractor must make vendor payments within two (2) days of receipt of fully executed forms from the DOA. This is a mandatory performance standard. Failure to maintain this level of service may result in contract termination. The Contractor shall keep a current payment log, a monthly report and shall respond to payment status requests from DOA, State agencies and vendors. Contractor shall also receive and respond to inquiries from OPF and DOA regarding debt service/payment issues.

Although the paperwork relative to the payment process is prepared on a weekly basis, this process is not necessarily performed every week. The determination is made by DOA whether or not to process the paperwork in a given week based on the volume to be processed.

3.3 FUNDING

LOC rental payments by the State to the contractor are subject to annual appropriations by the Legislature. 3.4 INTEREST RATE

The State and the Contractor shall enter into a Master Lease Agreement (Appendix 1). The interest rate that applies over the term of the contract shall float with the relevant Interest Rate Swaps specified in the H.15 Federal Reserve Statistical Release. When a funding occurs under the LOC, the interest rate that the State will pay will be the Interest Rate Swap index interest rate on the date of the funding multiplied by the percentage bid on the price schedule. The interest rate as calculated is fixed for that particular funding. For example, if the Interest Rate Swap Index interest rate as specified in the H.15 for the date of a funding is four percent (4%) and the contract percentage of this index as shown on the Price Schedule is 85 percent (85%), the interest rate that will apply to that funding will be 3.4 percent (3.4%) percent. The calculation is 0.04 multiplied by 0.85 equals 0.034 and that rate (3.4%) will be fixed through the life of that particular debt and the fixed semiannual amortization schedule for that equipment will be based on 3.4% interest. See the Price Schedule which deals with the H.15 Federal Reserve Statistical Release. Also see Appendix 3 for a sample copy of the H.15 Release regarding the relevant Interest Rate Swaps for the appropriate terms.

3.5 DRAWDOWNS

A drawdown on the line of credit shall occur when the contractor directs a payment to a vendor. As noted in the Background section of this RFP (Section 1.2) the overwhelming majority of drawdowns shall occur as direct payments to equipment vendors. However, on rare occasions the State may fund equipment by directing money to an Escrow account. Therefore, a drawdown on the line of credit will also occur when the State directs the contractor to fund an

Escrow account for equipment. (See Section 3.11 below) Future drawdowns against the Master Lease Agreement may be for new financings or refinancing of prior leases.

3.6 FEES AND EXPENSES

Any fees or expenses of the Contractor, except those associated with an Escrow funding, are to be included within the interest rate quoted.

The State shall provide to the Contractor, at State’s expense, an Opinion of Counsel letter in the form provided in Appendix 1, Exhibit C.

3.7 ASSIGNMENT/PUBLIC OFFERING

Contractor may assign its right to receive rental payments to a Grantor Trust or other entity for any purpose, including creating or selling Certificates of Participation or otherwise securitizing the obligations only upon the prior written approval of the Lessee, i.e. Director, Division of Administration, and the Director, Office of Public Finance. Please refer to section 11.1 of the Master Lease Agreement- Appendix 1. Exceptions to this requirement will render a bid non-responsive.

3.8 PAYMENT BY THE STATE TO THE CONTRACTOR

As noted in Section 3.4 above, a fixed interest rate amortization schedule will be established for each equipment item at the time of funding and payment shall be made by Semiannual Payments in Arrears based on that amortization schedule. Although the LOC Program primarily finances equipment over a three year term, the State may finance equipment for other time frames. Therefore, this contract includes financing terms of 2, 3, 4, 5, 7, and 10 years. Regardless of the duration of the financing, payment by the State to the contractor shall be made semiannually on June 15 and December 15 of each year with the first payment commencing on December 15, 2006. The first payment date is premised on no drawdowns occurring prior to March 15, 2006.

3.9 EQUIPMENT The equipment will consist of various types of administrative and police vehicles, heavy road equipment, helicopters, computers, photocopiers, telecommunications equipment, furniture, sprinkler systems, laboratory equipment, energy efficiency improvement projects or such other items as permitted by State law, all subject to contractor's approval. The State will purchase the equipment in accordance with State law. The agreement may also be used to refinance equipment currently being leased by the State, subject to the incumbent Contractor's approval. Any equipment purchases that are in the approval process for funding when LOC #5 expires will be funded under this LOC contract. 3.10 CHALLENGE TO A CONTRACT AWARD DECISION

Pursuant to N.J.A.C. 17:12-3.3(e), all bidders are hereby notified that any bidder finding cause to protest the contract award decision shall be provided three (3) working days from receipt of

the notice of award to submit a written protest to the Director, in accordance with N.J.A.C. 17:12-3.3(b)1.

3.11 ESCROW

The State, at its option, may require the Contractor to establish an escrow account. However, the State retains the option of selecting its own escrow agent approved by the Contractor (in which the State would be responsible for the payment of costs associated with the escrow) or utilizing an escrow agent available through the contractor. (See attached Escrow Agreement - Appendix 5). 3.12 CONTRACTOR GUARANTEES The contractor shall not hold a public sale of participations without the prior written consent of the State and shall not assign the Agreement, in whole or in part, to a grantor trust or other entity without the prior written consent of the State. 3.13 RELATIONSHIP OF THIS CONTRACT TO THE MASTER LEASE AGREEMENT Once this contract is awarded, the DOA may enter into the Master Lease Agreement with the contractor and begin funding equipment purchases. When this contract expires, no new equipment purchases under the Master Lease Agreement are permitted. However, the terms of this contract and the Master Lease Agreement shall continue to govern payments to the contractor after this contract expires until all debt payment obligations by the State to the contractor are satisfied. Therefore, both this contract and the Master Lease Agreement must be in effect for the funding of new equipment purchases. Once this contract expires, authorization to fund new equipment purchases will cease and the terms of this contract and the Master Lease Agreement shall govern only debt payments by the State to the contractor.

4.0 BID PROPOSAL PREPARATION AND SUBMISSION 4.1 GENERAL The bidder is advised to thoroughly read and follow all instructions contained in this RFP, including the instructions on the RFP’s signatory page, in preparing and submitting its bid proposal. 4.2 BID PROPOSAL DELIVERY AND IDENTIFICATION In order to be considered, a bid proposal must arrive at the Purchase Bureau in accordance with the instructions on the RFP signatory page http://www.state.nj.us/treasury/purchase/bid/summary/38322.shtml. Bidders are cautioned to allow adequate delivery time to ensure timely delivery of bid proposals. State regulation mandates that late bid proposals are ineligible for consideration. THE EXTERIOR OF ALL BID PROPOSAL PACKAGES ARE TO BE LABELED WITH THE BID IDENTIFICATION NUMBER AND THE FINAL BID OPENING DATE OR RISK NOT BEING RECEIVED IN TIME. 4.3 NUMBER OF BID PROPOSAL COPIES The bidder must submit one (1) complete ORIGINAL bid proposal, clearly marked as the “ORIGINAL” bid proposal. The bidder should submit five (5) full, complete and exact copies of the original. The copies requested are necessary in the evaluation of the bid proposal. A bidder failing to provide the requested number of copies will be charged the cost incurred by the State in producing the requested number of copies. It is suggested that the bidder make and retain a copy of its bid proposal. 4.4 BID PROPOSAL CONTENT The bid proposal should be submitted in one volume and that volume divided into four (4) sections with tabs (separators), and the content of the material located behind each tab, as follows:

• Section 1 - Forms (Section 4.4.1 - 4.4.3.) • Section 2 - Technical Proposal (Section 4.4.4) • Section 3 - Organizational Support and Experience (Section 4.4.5) • Section 4 - Cost Proposal (Section 4.4.6)

4.4.1 FORMS THAT MUST BE SUBMITTED WITH BID PROPOSAL 4.4.1.1 SIGNATORY PAGE The bidder shall complete and submit the Signatory page provided on the Advertised Solicitation, Current Bid Opportunities webpage http://www.state.nj.us/treasury/purchase/bid/summary/38322.shtml. The Signatory page shall be signed by an authorized representative of the bidder. If the bidder is a limited partnership, the Signatory page must be signed by a general partner. If the bidder is a joint venture, the Signatory page must be signed by a principal of each party to the joint venture. Failure to comply will result in rejection of the bid proposal. 4.4.1.2 OWNERSHIP DISCLOSURE FORM In the event the bidder is a corporation, partnership or sole proprietorship, the bidder must complete the attached Ownership Disclosure Form. A current completed Ownership Disclosure Form must be received prior to or accompany the bid proposal. Failure to do so will preclude the award of a contract. The Ownership Disclosure Form is located on the Advertised Solicitation, Current Bid Opportunities webpage http://www.state.nj.us/treasury/purchase/bid/summary/38322.shtml. 4.4.1.3 DISCLOSURE OF INVESTIGATIONS/ACTIONS INVOLVING BIDDER The bidder shall provide a detailed description of any investigation, litigation, including administrative complaints or other administrative proceedings, involving any public sector clients during the past five years including the nature and status of the investigation, and, for any litigation, the caption of the action, a brief description of the action, the date of inception, current status, and, if applicable, disposition. The bidder shall use the Disclosure of Investigations and Actions Involving Bidder form located on the Advertised Solicitation, Current Bid Opportunities webpage http://www.state.nj.us/treasury/purchase/bid/summary/38322.shtml. 4.4.2 PROOF OF REGISTRATIONS THAT MUST BE SUBMITTED WITH THE BID PROPOSAL 4.4.2.1 BUSINESS REGISTRATION CERTIFICATE FROM THE DIVISION OF REVENUE FAILURE TO SUBMIT A COPY OF THE BIDDER’S BUSINESS REGISTRATION CERTIFICATE (OR INTERIM REGISTRATION) FROM THE DIVISION OF REVENUE WITH THE BID PROPOSAL MAY BE CAUSE FOR REJECTION OF THE BID PROPOSAL. The bidder may go to www.nj.gov/njbgs to register with the New Jersey Division of Revenue or to obtain a copy of an existing Business Registration Certificate. Refer to Section 1.1. of the NJ Standard Terms and Conditions version 01-20-06 located on the Advertised Solicitation, Current Bid Opportunities webpage http://www.state.nj.us/treasury/purchase/bid/summary/38322.shtml

http://www.state.nj.us/treasury/purchase/bid/summary/38322.shtml

http://www.nj.gov/njbgs

4.4.2.2 SMALL BUSINESS SET-ASIDE CONTRACTS Not applicable to this procurement. 4.4.3 FORMS THAT MUST BE SUBMITTED BEFORE CONTRACT AWARD AND SHOULD BE SUBMITTED WITH THE BID PROPOSAL. 4.4.3.1 MACBRIDE PRINCIPLES CERTIFICATION The bidder is required to complete the attached MacBride Principles Certification evidencing compliance with the MacBride Principles. The requirement is a precondition to entering into a State contract. The MacBride Principles Certification Form is located on the Advertised Solicitation, Current Bid Opportunities webpage: http://www.state.nj.us/treasury/purchase/bid/summary/38322.shtml. 4.4.3.2 AFFIRMATIVE ACTION The bidder is required to complete the attached Affirmative Action Employee Information Report, or, in the alternative, supply either a New Jersey Affirmative Action Certificate or evidence that the bidder is operating under a federally approved or sanctioned affirmative action program. The requirement is a precondition to entering into a State contract. The Affirmative Action Forms are located on the Advertised Solicitation, Current Bid Opportunities webpage http://www.state.nj.us/treasury/purchase/bid/summary/38322.shtml. 4.4.3.3 SERVICES SOURCE DISCLOSURE FORM Pursuant to N.J.S.A. 52:34-13.2, the bidder is required to submit with its bid proposal a completed source disclosure form. http://www.state.nj.us/treasury/purchase/bid/summary/38322.shtml. Refer to section 7.1.2 of this RFP. 4.4.4 TECHNICAL PROPOSAL

In this Section, the bidder shall describe its approach and plans for accomplishing the work outlined in the Scope of Work Section, i.e., Section 3.0. The bidder must set forth its understanding of the requirements of this RFP and its ability to successfully complete the contract. This Section of the bid proposal should contain at least the following information:

4.4.4.1 MANAGEMENT OVERVIEW The bidder shall set forth its overall technical approach and plans to meet the requirements of the RFP in a narrative format. This narrative should convince the State that the bidder understands the objectives that the contract is intended to meet, the nature of the required work and the level of effort necessary to successfully complete the contract. This narrative should convince the State that the bidder’s general approach and plans to undertake and complete the contract are appropriate to the tasks and subtasks involved. Mere reiterations of RFP tasks and subtasks are strongly discouraged, as they do not provide insight into the bidder's ability to complete the contract. The bidder’s response to this section should be designed to convince the State that the bidder’s detailed plans and approach

proposed to complete the Scope of Work are realistic, attainable and appropriate and that the bidder’s bid proposal will lead to successful contract completion.

4.4.4.2 CONTRACT MANAGEMENT

The bidder should describe its specific plans to manage, control and supervise the contract to ensure satisfactory contract completion according to the required schedule. The plan should include the bidder's approach to communicate with the State Contract Manager including, but not limited to, status meetings, status reports, etc.

4.4.4.3 CONTRACT SCHEDULE

The bidder should include a contract schedule. If key dates are a part of this RFP, the bidder’s schedule should incorporate such key dates and should identify the completion date for each task and sub-task required by the Scope of Work. Such schedule should also identify the associated deliverable item(s) to be submitted as evidence of completion of each task and/or subtask. The bidder should identify the contract scheduling and control methodology to be used and should provide the rationale for choosing such methodology. The use of Gantt, PERT or other charts is at the option of the bidder. 4.4.4.4 MOBILIZATION AND IMPLEMENTATION PLAN Not applicable to this procurement. 4.4.4.5 POTENTIAL PROBLEMS

The bidder should set forth a summary of any and all problems that the bidder anticipates during the term of the contract. For each problem identified, the bidder should provide its proposed solution. 4.4.5 ORGANIZATIONAL SUPPORT AND EXPERIENCE

The bidder should include information relating to its organization, personnel, and experience, including, but not limited to, references, together with contact names and telephone numbers, evidencing the bidder's qualifications, and capabilities to perform the services required by this RFP.

4.4.5.1 LOCATION

The bidder should include the location of the bidder's office that will be responsible for managing the contract. The bidder should include the telephone number and name of the individual to contact.

4.4.5.2 ORGANIZATION CHART (CONTRACT SPECIFIC)

The bidder should include a contract organization chart, with names showing management, supervisory and other key personnel (including sub-vendor's management, supervisory or other key personnel) to be assigned to the contract. The chart should include the labor category and title of each such individual.

4.4.5.3 RESUMES

Detailed resumes should be submitted for all management, supervisory and key personnel to be assigned to the contract. Resumes should be structured to emphasize relevant qualifications and experience of these individuals in successfully completing contracts of a similar size and scope to those required by this RFP. Resumes should include the following:

• Clearly identify the individual's previous experience in completing similar contracts. • Beginning and ending dates should be given for each similar contract. • A description of the contract should be given and should demonstrate how the

individual's work on the completed contract relates to the individual's ability to contribute to successfully providing the services required by this RFP.

• With respect to each similar contract, the bidder should include the name and address of each reference together with a person to contact for a reference check and a telephone number.

• With respect to the proposed contract, the bidder should specify the percentage of time that each individual will devote to the contract and the percentage of time committed to other projects or activities.

4.4.5.4 BACKUP STAFF

The bidder should include a list of backup staff that may be called upon to assist or replace primary individuals assigned. Backup staff must be clearly identified as backup staff. In the event the bidder must hire management, supervisory and/or key personnel if awarded the contract, the bidder should include, as part of its recruitment plan, a plan to secure backup staff in the event personnel initially recruited need assistance or need to be replaced during the contract term.

4.4.5.5 ORGANIZATION CHART (ENTIRE FIRM)

The bidder should include an organization chart showing the bidder’s entire organizational structure. This chart should show the relationship of the individuals assigned to the contract to the bidder's overall organizational structure.

4.4.5.6 EXPERIENCE OF BIDDER ON CONTRACTS OF SIMILAR SIZE AND SCOPE

The bidder should provide a comprehensive listing of contracts of similar size and scope that it has successfully completed, as evidence of the bidder’s ability to successfully complete the services required by this RFP. Emphasis should be placed on contracts that are similar in size and scope to the work required by this RFP. A description of all such contracts should be included and should show how such contracts relate to the ability of the firm to complete the services required by this RFP. For each such contract, the bidder should provide two names and telephone numbers of individuals for the other contract party. Beginning and ending dates should also be given for each contract.

4.4.5.7 FINANCIAL CAPABILITY OF THE BIDDER

The bidder shall provide proof of its financial capacity and capabilities to undertake and successfully complete the contract. To satisfy this requirement, the bidder shall submit certified financial statements, including applicable notes, reflecting the bidder’s assets, liabilities, net

worth, revenues, expenses, profit or loss, and cash flow for the most recent two (2) calendar years or the bidder’s most recent fiscal years; or, if certified financial statements are not available, then either a reviewed or compiled statement from an independent accountant setting forth the same information required for the certified financial statement. In addition, the bidder must submit a bank reference. 4.4.5.8 SUBCONTRACTOR(S)

A. All bidders must complete the Notice of Intent to Subcontract Form whether or not they intend to utilize subcontractors in connection with the work set forth in this RFP. If the bidder intends to utilize subcontractor(s), then the Subcontractor Utilization Plan must also be submitted with the bid.

B. Should the bidder propose to utilize a subcontractor(s) to fulfill any of its obligations, the

bidder shall be responsible for the subcontractor’s(s): (a) performance; (b) compliance with all of the terms and conditions of the contract; and (c) compliance with the requirements of all applicable laws.

C. The bidder must provide a detailed description of services to be provided by each

subcontractor, referencing the applicable Section or Subsection of this RFP.

D. The bidder should provide detailed resumes for each subcontractor’s management, supervisory and other key personnel that demonstrate knowledge, ability and experience relevant to that part of the work which the subcontractor is designated to perform.

E. The bidder should provide documented experience to demonstrate that each

subcontractor has successfully performed work on contracts of a similar size and scope to the work that the subcontractor is designated to perform in the bidder’s proposal.

4.4.6 PRICE SCHEDULE The bidder must submit its pricing using the format set forth in the State supplied price sheet(s) attached to this RFP. Failure to submit all information required will result in the bid being considered non-responsive. Each bidder is required to hold its prices firm through issuance of contract.

5.0 SPECIAL CONTRACTUAL TERMS AND CONDITIONS 5.1 PRECEDENCE OF SPECIAL CONTRACTUAL TERMS AND CONDITIONS The contract awarded as a result of this RFP shall consist of this RFP, addendum to this RFP, the contractor's bid proposal and the Division's Notice of Award. Unless specifically stated within this RFP, the Special Contractual Terms and Conditions of the RFP take precedence over the NJ Standard Terms and Conditions version 01 20 06 located on the Advertised Solicitation, Current Bid Opportunities webpage: http://www.state.nj.us/treasury/purchase/bid/summary/38322.shtml.

In the event of a conflict between the provisions of this RFP, including the Special Contractual Terms and Conditions and the NJ Standard Terms and Conditions version 01 20 06, and any Addendum to this RFP, the Addendum shall govern. In the event of a conflict between the provisions of this RFP, including any Addendum to this RFP, and the bidder's bid proposal, the RFP and/or the Addendum shall govern. 5.2 CONTRACT TERM AND EXTENSION OPTION The term of the contract shall be for a period of two (2) years. The anticipated "Contract Effective Date" is provided on the signatory page of this RFP: http://www.state.nj.us/treasury/purchase/bid/summary/38322.shtml. If delays in the procurement process result in a change to the anticipated Contract Effective Date, the bidder agrees to accept a contract for the full term of the contract. The contract may be extended for all or part of two (2) one-year periods, by the mutual written consent of the contractor, the using agency and the Director. 5.3 CONTRACT TRANSITION In the event that a new contract has not been awarded prior to the contract expiration date, as may be extended herein, it shall be incumbent upon the contractor to continue the contract under the same terms and conditions until a new contract can be completely operational. At no time shall this transition period extend more than ninety (90) days beyond the expiration date of the contract. 5.4 CONTRACT AMENDMENT Any changes or modifications to the terms of the contract shall be valid only when they have been reduced to writing and signed by the contractor and the Director. 5.5 CONTRACTOR RESPONSIBILITIES

The contractor shall have sole responsibility for the complete effort specified in the contract. Payment will be made only to the contractor. The contractor shall have sole responsibility for all payments due any subcontractor. The contractor is responsible for the professional quality, technical accuracy and timely completion and submission of all deliverables, services or commodities required to be provided

under the contract. The contractor shall, without additional compensation, correct or revise any errors, omissions, or other deficiencies in its deliverables and other services. The approval of deliverables furnished under this contract shall not in any way relieve the contractor of responsibility for the technical adequacy of its work. The review, approval, acceptance or payment for any of the services shall not be construed as a waiver of any rights that the State may have arising out of the contractor’s performance of this contract.

5.6 SUBSTITUTION OF STAFF

If it becomes necessary for the contractor to substitute any management, supervisory or key personnel, the contractor will identify the substitute personnel and the work to be performed. The contractor must provide detailed justification documenting the necessity for the substitution. Resumes must be submitted evidencing that the individual(s) proposed as substitution(s) have qualifications and experience equal to or better than the individual(s) originally proposed or currently assigned. The contractor shall forward a request to substitute staff to the State Contract Manager for consideration and approval. No substitute personnel are authorized to begin work until the contractor has received written approval to proceed from the State Contract Manager.

5.7 SUBSTITUTION OR ADDITION OF SUBCONTRACTOR(S)

This Subsection serves to supplement but not to supersede Section 3.11 of the NJ Standard Terms and Conditions version 01 20 06 located on the Advertised Solicitation, Current Bid Opportunities webpage. If it becomes necessary for the contractor to substitute a subcontractor, add a subcontractor or substitute its own staff for a subcontractor, the contractor will identify the proposed new subcontractor or staff member(s) and the work to be performed. The contractor must provide detailed justification documenting the necessity for the substitution or addition. The contractor must provide detailed resumes of its proposed replacement staff or of the proposed subcontractor’s management, supervisory and other key personnel that demonstrate knowledge, ability and experience relevant to that part of the work which the subcontractor is to undertake. The qualifications and experience of the replacement(s) must equal or exceed those of similar personnel proposed by the contractor in its bid proposal. The contractor shall forward a written request to substitute or add a subcontractor or to substitute its own staff for a subcontractor to the State Contract Manager for consideration. If the State Contract Manager approves the request, the State Contract Manager will forward the request to the Director for final approval. No substituted or additional subcontractors are authorized to begin work until the contractor has received written approval from the Director. 5.8 OWNERSHIP OF MATERIAL

All data, technical information, materials gathered, originated, developed, prepared, used or obtained in the performance of the contract, including, but not limited to, all reports, surveys, plans, charts, literature, brochures, mailings, recordings (video and/or audio), pictures, drawings, analyses, graphic representations, software computer programs and accompanying documentation and print-outs, notes and memoranda, written procedures and documents, regardless of the state of completion, which are prepared for or are a result of the services required under this contract shall be and remain the property of the State of New Jersey and shall be delivered to the State of New Jersey upon 30 days notice by the State. With respect to software computer programs and/or source codes developed for the State, the work shall be considered “work for hire”, i.e., the State, not the contractor or subcontractor, shall have full and complete ownership of all software computer programs and/or source codes developed. To the extent that any of such materials may not, by operation of the law, be a work made for hire in accordance with the terms of this Agreement, contractor or subcontractor hereby assigns to the State all right, title and interest in and to any such material, and the State shall have the right to obtain and hold in its own name and copyrights, registrations and any other proprietary rights that may be available. Should the bidder anticipate bringing pre-existing intellectual property into the project, the intellectual property must be identified in the bid proposal. Otherwise, the language in the first paragraph of this section prevails. If the bidder identifies such intellectual property ("Background IP") in its bid proposal, then the Background IP owned by the bidder on the date of the contract, as well as any modifications or adaptations thereto, remain the property of the bidder. Upon contract award, the bidder or contractor shall grant the State a non-exclusive, perpetual royalty free license to use any of the bidder/contractor's Background IP delivered to the State for the purposes contemplated by the Contract. 5.9 DATA CONFIDENTIALITY All financial, statistical, personnel and/or technical data supplied by the State to the contractor are confidential. The contractor is required to use reasonable care to protect the confidentiality of such data. Any use, sale or offering of this data in any form by the contractor, or any individual or entity in the contractor’s charge or employ, will be considered a violation of this contract and may result in contract termination and the contractor’s suspension or debarment from State contracting. In addition, such conduct may be reported to the State Attorney General for possible criminal prosecution. 5.10 NEWS RELEASES The contractor is not permitted to issue news releases pertaining to any aspect of the services being provided under this contract without the prior written consent of the Director. 5.11 ADVERTISING The contractor shall not use the State’s name, logos, images, or any data or results arising from this contract as a part of any commercial advertising without first obtaining the prior written consent of the Director. 5.12 LICENSES AND PERMITS

The contractor shall obtain and maintain in full force and effect all required licenses, permits, and authorizations necessary to perform this contract. The contractor shall supply the State Contract Manager with evidence of all such licenses, permits and authorizations. This evidence shall be submitted subsequent to the contract award. All costs associated with any such licenses, permits and authorizations must be considered by the bidder in its bid proposal. 5.13 CLAIMS AND REMEDIES 5.13.1 CLAIMS All claims asserted against the State by the contractor shall be subject to the New Jersey Tort Claims Act, N.J.S.A. 59:1-1, et seq., and/or the New Jersey Contractual Liability Act, N.J.S.A. 59:13-1, et seq. 5.13.2 REMEDIES Nothing in the contract shall be construed to be a waiver by the State of any warranty, expressed or implied, of any remedy at law or equity, except as specifically and expressly stated in a writing executed by the Director. 5.13.3 REMEDIES FOR FAILURE TO COMPLY WITH MATERIAL CONTRACT REQUIREMENTS In the event that the contractor fails to comply with any material contract requirements, the Director may take steps to terminate the contract in accordance with the State administrative code and/or authorize the delivery of contract items by any available means, with the difference between the price paid and the defaulting contractor's price either being deducted from any monies due the defaulting contractor or being an obligation owed the State by the defaulting contractor. 5.14 LATE DELIVERY The contractor must immediately advise the State Contract Manager of any circumstance or event that could result in late completion of any task or subtask called for to be completed on a date certain. 5.15 RETAINAGE Not Applicable to this procurement. 5.16 STATE'S OPTION TO REDUCE SCOPE OF WORK The State has the option, in its sole discretion, to reduce the scope of work for any task or subtask called for under this contract. In such an event, the Director shall provide advance written notice to the contractor. Upon receipt of such written notice, the contractor will submit, within five (5) working days to the Director and the State Contract Manager, an itemization of the work effort already completed by task or subtask. The contractor shall be compensated for such work effort according to the applicable portions of its price schedule.

5.17 SUSPENSION OF WORK The State Contract Manager may, for valid reason, issue a stop order directing the contractor to suspend work under the contract for a specific time. The contractor shall be paid until the effective date of the stop order. The contractor shall resume work upon the date specified in the stop order, or upon such other date as the State Contract Manager may thereafter direct in writing. The period of suspension shall be deemed added to the contractor's approved schedule of performance. The Director and the contractor shall negotiate an equitable adjustment, if any, to the contract price. 5.18 CHANGE IN LAW Whenever an unforeseen change in applicable law or regulation affects the services that are the subject of this contract, the contractor shall advise the State Contract Manager and the Director in writing and include in such written transmittal any estimated increase or decrease in the cost of its performance of the services as a result of such change in law or regulation. The Director and the contractor shall negotiate an equitable adjustment, if any, to the contract price. 5.19 CONTRACT PRICE INCREASE (PREVAILING WAGE) If the Prevailing Wage Act (N.J.S.A. 34:11-56 et seq.) is applicable to the contract, the contractor may apply to the Director, on the anniversary of the effective date of the contract, for a contract price increase. The contract price increase will be available only for an increase in the prevailing wages of trades and occupations covered under this contract during the prior year. The contractor must substantiate with documentation the need for the increase and submit it to the Director for review and determination of the amount, if any, of the requested increase, which shall be available for the upcoming contract year. No retroactive increases will be approved by the Director. 5.20 ADDITIONAL WORK AND/OR SPECIAL PROJECTS

The contractor shall not begin performing any additional work or special projects without first obtaining written approval from both the State Contract Manager and the Director. In the event of additional work and/or special projects, the contractor must present a written proposal to perform the additional work to the State Contract Manager. The proposal should provide justification for the necessity of the additional work. The relationship between the additional work and the base contract work must be clearly established by the contractor in its proposal. The contractor’s written proposal must provide a detailed description of the work to be performed broken down by task and subtask. The proposal should also contain details on the level of effort, including hours, labor categories, etc., necessary to complete the additional work. The written proposal must detail the cost necessary to complete the additional work in a manner consistent with the contract. The written price schedule must be based upon the hourly rates, unit costs or other cost elements submitted by the contractor in the contractor’s original bid proposal submitted in response to this RFP. Whenever possible, the price schedule should be a firm, fixed cost to perform the required work. The firm fixed price should specifically reference and be tied directly to costs submitted by the contractor in its original bid proposal. A payment schedule, tied to successful completion of tasks and subtasks, must be included.

Upon receipt and approval of the contractor’s written proposal, the State Contract Manager shall forward same to the Director for the Director’s written approval. Complete documentation from the Using Agency, confirming the need for the additional work, must be submitted. Documentation forwarded by the State Contract Manager to the Director must include all other required State approvals, such as those that may be required from the State of New Jersey’s Office of Management and Budget (OMB) and Office of Information and Technology (OIT). No additional work and/or special project may commence without the Director’s written approval. In the event the contractor proceeds with additional work and/or special projects without the Director’s written approval, it shall be at the contractor’s sole risk. The State shall be under no obligation to pay for work performed without the Director’s written approval.

5.21 FORM OF COMPENSATION AND PAYMENT This Section supplements Section 4.5 of the NJ Standard Terms and Conditions version 01 20 06, located on the Advertised Solicitation, Current Bid Opportunities webpage http://www.state.nj.us/treasury/purchase/bid/summary/38322.shtml. The contractor must submit official State invoice forms to the Using Agency with supporting documentation evidencing that work for which payment is sought has been satisfactorily completed. Invoices must reference the tasks or subtasks detailed in the Scope of Work section of the RFP and must be in strict accordance with the firm, fixed prices submitted for each task or subtask on the RFP pricing sheets. When applicable, invoices should reference the appropriate RFP price sheet line number from the contractor’s bid proposal. All invoices must be approved by the State Contract Manager before payment will be authorized. In addition, primary contractors must provide, on a monthly and cumulative basis, a breakdown in accordance with the budget submitted, of all monies paid to any small business subcontractor(s). This breakdown shall be sent to the Purchase Bureau Business Unit, Set-Aside Coordinator. Invoices must also be submitted for any special projects, additional work or other items properly authorized and satisfactorily completed under the contract. Invoices shall be submitted according to the payment schedule agreed upon when the work was authorized and approved. Payment can only be made for work when it has received all required written approvals and has been satisfactorily completed. 5.21.1 PAYMENT TO CONTRACTOR - OPTIONAL METHOD Not applicable to this procurement. 5.22 MODIFICATIONS AND CHANGES TO THE NJ STANDARD TERMS AND CONDITIONS VERSION 01 20 06

NJ Standard Terms and Conditions version 01 20 06 are located on the Advertised Solicitation, Current Bid Opportunities webpage http://www.state.nj.us/treasury/purchase/bid/summary/38322.shtml 5.22.1 PATENT AND COPYRIGHT INDEMNITY

Section 2.1 of the NJ Standard Terms and Conditions version 01 20 06 is deleted and replaced with the following: 2.1 Patent and Copyright Indemnity a. The Contractor shall hold and save the State of New Jersey, its officers, agents, servants and employees, harmless from liability of any nature or kind for or on account of the use of any copyrighted or uncopyrighted composition, secret process, patented or unpatented invention, article or appliance furnished or used in the performance of the contract. b. The State of New Jersey agrees: (1) to promptly notify the Contractor in writing of such claim or suit; (2) that the Contractor shall have control of the defense of settlement of such claim or suit; and (3) to cooperate with the Contractor in the defense of such claim or suit, to the extent that the interests of the Contractor and the State are consistent. c. In the event of such claim or suit, the Contractor, at its option, may: (1) procure for the State of New Jersey the legal right to continue the use of the product; (2) replace or modify the product to provide a non-infringing product that is the functional equivalent; or (3) refund the purchase price less a reasonable allowance for use that is agreed to by both parties.

5.22.2 INDEMNIFICATION Section 2.2 of the NJ Standard Terms and Conditions version 01 20 06, is deleted and replaced with the following: 2.2 Indemnification The contractor's liability to the State for actual, direct damages resulting from the contractor's performance or non-performance, or in any manner related to the contract, for any and all claims, shall be limited in the aggregate to 500 % of the value of the contract, except that such limitation of liability shall not apply to the following: 1. The contractor's obligation to indemnify the State of New Jersey and its employees from and against any claim, demand, loss, damage or expense relating to bodily injury or the death of any person or damage to real property or tangible personal property, incurred from the work or materials supplied by the contractor under the contract caused by negligence or willful misconduct of the contractor; 2. The contractor's breach of its obligations of confidentiality; and, 3. Contractor's liability with respect to copyright indemnification. The contractor's indemnification obligation is not limited by but is in addition to the insurance obligations contained in Section 2.3 of the NJ Standard Terms and Conditions version 01 20 06. The contractor shall not be liable for special, consequential, or incidental damages.

6.0 PROPOSAL EVALUATION/CONTRACT AWARD 6.1 PROPOSAL EVALUATION COMMITTEE Bid proposals may be evaluated by an Evaluation Committee composed of members of affected departments and agencies together with representative(s) from the Purchase Bureau. Representatives from other governmental agencies may also serve on the Evaluation Committee. On occasion, the Evaluation Committee may choose to make use of the expertise of outside consultant in an advisory role.

6.2 ORAL PRESENTATION AND/OR CLARIFICATION OF BID PROPOSAL After the submission of bid proposals, unless requested by the State, contact with the State is limited to status inquiries only and such inquiries are only to be directed to the buyer. Any further contact or information about the proposal to the buyer or any other State official connected with the solicitation will be considered an impermissible supplementation of the bidder's bid proposal. A bidder may be required to give an oral presentation to the Evaluation Committee concerning its bid proposal. The Evaluation Committee may also require a bidder to submit written responses to questions regarding its bid proposal. The purpose of such communication with a bidder, either through an oral presentation or a letter of clarification, is to provide an opportunity for the bidder to clarify or elaborate on its bid proposal. Original bid proposals submitted, however, cannot be supplemented, changed, or corrected in any way. No comments regarding other bid proposals are permitted. Bidders may not attend presentations made by their competitors. It is within the Evaluation Committee’s discretion whether to require a bidder to give an oral presentation or require a bidder to submit written responses to questions regarding its bid proposal. Action by the Evaluation Committee in this regard should not be construed to imply acceptance or rejection of a bid proposal. The Purchase Bureau buyer will be the sole point of contact regarding any request for an oral presentation or clarification. 6.3 EVALUATION CRITERIA The following evaluation criteria categories, not necessarily listed in order of significance, will be used to evaluate bid proposals received in response to this RFP. The evaluation criteria categories may be used to develop more detailed evaluation criteria to be used in the evaluation process: 6.3.1 TECHNICAL EVALUATION CRITERIA

A) The bidder's general approach and plans in meeting the requirements of this RFP.

B) The bidder's detailed approach and plans to perform the services required by the Scope of Work of this RFP.

C) The bidder’s documented experience in successfully completing contracts of a similar size and scope to the work required by this RFP.

D) The qualifications and experience of the bidder’s management, supervisory or other key

personnel assigned to the contract, with emphasis on documented experience in successfully completing work on contracts of similar size and scope to the work required by this RFP.

E) The overall ability of the bidder to mobilize, undertake and successfully complete the

contract. This judgment will include, but not be limited to, the following factors: the number and qualifications of management, supervisory and other staff proposed by the bidder to complete the contract, the availability and commitment to the contract of the bidder’s management, supervisory and other staff proposed and the bidder’s contract management plan, including the bidder’s contract organizational chart.

6.3.2 BIDDER’S PRICE SCHEDULE For evaluation purposes, bidders will be ranked according to the percentage of the H.15 index located on the Price Sheet located on the Advertised Solicitation, Current Bid Opportunities webpage, http://www.state.nj.us/treasury/purchase/bid/summary/38322.shtml 6.3.3 BID DISCREPANCIES In evaluating bids, discrepancies between words and figures will be resolved in favor of words. Discrepancies between unit prices and totals of unit prices will be resolved in favor of unit prices. Discrepancies in the multiplication of units of work and unit prices will be resolved in favor of the unit prices. Discrepancies between the indicated total of multiplied unit prices and units of work and the actual total will be resolved in favor of the actual total. Discrepancies between the indicated sum of any column of figures and the correct sum thereof will be resolved in favor of the corrected sum of the column of figures. 6.4 NEGOTIATION AND BEST AND FINAL OFFER (BAFO) Following the opening of bid proposals, the State reserves the right, pursuant to N.J.S.A. 52:34-12(f), to negotiate: the technical services offered, the terms and conditions and/or the price of a proposed contract award with any bidder. In addition, the State reserves the right to seek a Best and Final Offer (BAFO) from one or more bidders. In response to the State's request to negotiate, bidders must continue to satisfy all mandatory RFP requirements but may improve upon their original technical proposal in any revised technical proposal. However, any revised technical proposal that does not continue to satisfy all mandatory requirements will be rejected as non-responsive and the original technical proposal will be used for any further evaluation purposes, in accordance with the following procedure. The Evaluation Committee will conduct an initial review and determine whether and with which bidder(s) it will negotiate, and will communicate its request to each such bidder. In response, the bidder will submit any required revisions to its proposal. In response to the State's request for a BAFO, bidders may submit a revised price proposal that is equal to or lower in price than their original submission, but must continue to satisfy all mandatory requirements. Any revised price proposal that is higher in price than the original will

be rejected as non-responsive and the original bid will be used for any further evaluation purposes. After receipt of the results of the negotiation and/or the BAFO(s), the Evaluation Committee will complete its evaluation and recommend to the Director for award that responsible bidder(s) whose bid proposal, confirming to this RFP, is most advantageous to the State, price and other factors considered. All contacts, records of initial evaluations, any correspondence with bidders related to any request for negotiation or BAFO, any revised technical and/or price proposals, the Evaluation Committee Report and the Award Recommendation, will remain confidential until a Notice of Intent to Award a contract is issued.

7.0 CONTRACT AWARD 7.1 DOCUMENTS REQUIRED BEFORE CONTRACT AWARD 7.1.1 REQUIREMENTS OF N.J.S.A. 19:44A-20.13-25 (FORMERLY EXECUTIVE ORDER 134) In order to safeguard the integrity of State government procurement by imposing restrictions to insulate the negotiation and award of State contracts from political contributions that pose the risk of improper influence, purchase of access, or the appearance thereof, the Legislature enacted N.J.S.A. 19:44A-20.13 – 25 on March 22, 2005 the “Legislation”), retroactive to October 15, 2004, superseding the terms of Executive Order 134. Pursuant to the requirements of the Legislation, the terms and conditions set forth in this section are material terms of any contract resulting from this RFP: 7.1.1.1 DEFINITIONS For the purpose of this section, the following shall be defined as follows:

a) Contribution – means a contribution reportable as a recipient under “The New Jersey Campaign Contributions and Expenditures Reporting Act.” P.L. 1973, c. 83 (C.19:44A-1 et seq.), and implementing regulations set forth at N.J.A.C. 19:25-7 and N.J.A.C. 19:25-10.1 et seq. Through December 31, 2004, contributions in excess of $400 during a reporting period were deemed "reportable" under these laws. As of January 1, 2005, that threshold was reduced to contributions in excess of $300. b) Business Entity – means any natural or legal person, business corporation, professional services corporation, Limited Liability Company, partnership, limited partnership, business trust, association or any other legal commercial entity organized under the laws of New Jersey or any other state or foreign jurisdiction. The definition of a business entity includes (i)all principals who own or control more than 10 percent of the profits or assets of a business entity or 10 percent of the stock in the case of a business entity that is a corporation for profit, as appropriate; (ii)any subsidiaries directly or indirectly controlled by the business entity; (iii)any political organization organized under section 527 of the Internal Revenue Code that is directly or indirectly controlled by the business entity, other than a candidate committee, election fund, or political party committee; and (iv)if a business entity is a natural person, that person’s spouse or child, residing in the same household.

7.1.1.2 BREACH OF TERMS OF THE LEGISLATION It shall be a breach of the terms of the contract for the Business Entity to (i)make or solicit a contribution in violation of the Legislation, (ii)knowingly conceal or misrepresent a contribution given or received; (iii)make or solicit contributions through intermediaries for the purpose of concealing or misrepresenting the source of the contribution; (iv)make or solicit any contribution on the condition or with the agreement that it will be contributed to a campaign committee or any candidate of holder of the public office of Governor, or to any State or county party committee; (v)engage or employ a lobbyist or consultant with the intent or understanding that such lobbyist or consultant would make or solicit any contribution, which if made or solicited by the business entity itself, would subject that entity to the restrictions of the Legislation; (vi)fund contributions made by third parties, including consultants, attorneys, family

members, and employees; (vii)engage in any exchange of contributions to circumvent the intent of the Legislation; or (viii)directly or indirectly through or by any other person or means, do any act which would subject that entity to the restrictions of the Legislation. 7.1.1.3 CERTIFICATION AND DISCLOSURE REQUIREMENTS a) The State shall not enter into a contract to procure from any Business Entity services or any material, supplies or equipment, or to acquire, sell or lease any land or building, where the value of the transaction exceeds $17,500, if that Business Entity has solicited or made any contribution of money, or pledge of contribution, including in-kind contributions to a candidate committee and/or election fund of any candidate for or holder of the public office of Governor, or to any State or county political party committee during certain specified time periods b) Prior to awarding any contract or agreement to any Business Entity, the Business Entity proposed as the intended awardee of the contract shall submit the Certification and Disclosure form, certifying that no contributions prohibited by the Legislation have been made by the Business Entity and reporting all contributions the Business Entity made during the preceding four years to any political organization organized under 26 U.S.C.527 of the Internal Revenue Code that also meets the definition of a “continuing political committee” within the mean of N.J.S.A. 19:44A-3(n) and N.J.A.C. 19:25-1.7. The required form and instructions, available for review on the Purchase Bureau website at http://www.state.nj.us/treasury/purchase/forms.htm#eo134 , shall be provided to the intended awardee for completion and submission to the Purchase Bureau with the Notice of Intent to Award. Upon receipt of a Notice of Intent to Award a Contract, the intended awardee shall submit to the Division, in care of the Purchase Bureau Buyer, the Certification and Disclosure(s) within five (5) business days of the State’s request. Failure to submit the required forms will preclude award of a contract under this RFP, as well as future contract opportunities. c) Further, the Contractor is required, on a continuing basis, to report any contributions it makes during the term of the contract, and any extension(s) thereof, at the time any such contribution is made. The required form and instructions, available for review on the Purchase Bureau website at http://www.state.nj.us/treasury/purchase/forms.htm#eo134 , shall be provided to the intended awardee with the Notice of Intent to Award. 7.1.1.4 STATE TREASURER REVIEW The State Treasurer or his designee shall review the Disclosures submitted pursuant to this section, as well as any other pertinent information concerning the contributions or reports thereof by the intended awardee, prior to award, or during the term of the contract, by the contractor. If the State Treasurer determines that any contribution or action by the contractor constitutes a breach of contract that poses a conflict of interest in the awarding of the contract under this solicitation, the State Treasurer shall disqualify the Business Entity from award of such contract. 7.1.1.5 ADDITIONAL DISCLOSURE REQUIREMENT OF P.L. 2005, C. 271 Contractor is advised of its responsibility to file an annual disclosure statement on political contributions with the New Jersey Election Law Enforcement Commission (ELEC), pursuant to P.L. 2005, c. 271, section 3 if the contractor receives contracts in excess of $50,000 from a public entity in a calendar year. It is the contractor’s responsibility to determine if filing is

necessary. Failure to so file can result in the imposition of financial penalties by ELEC. Additional information about this requirement is available from ELEC at 888-313-3532 or at www.elec.state.nj.us. 7.1.2 SOURCE DISCLOSURE REQUIREMENTS 7.1.2.1 REQUIREMENTS OF N.J.S.A. 52:34-13.2 Under the referenced statute, effective August 3, 2005, all contracts primarily for services awarded by the Director shall be performed within the United States, except when the Director certifies in writing a finding that a required service cannot be provided by a contractor or subcontractor within the United States and the certification is approved by the State Treasurer. 7.1.2.2 SOURCE DISCLOSURE REQUIREMENTS Pursuant to the statutory requirements, the intended awardee of a contract primarily for services with the State of New Jersey must disclose the location by country where services under the contract, including subcontracted services, will be performed. The Source Disclosure Certification form is located on the Advertised Solicitation, Current Bid Opportunities webpage http://www.state.nj.us/treasury/purchase/bid/summary/38322.shtml. FAILURE TO SUBMIT SOURCING INFORMATION WHEN REQUESTED BY THE STATE SHALL PRECLUDE AWARD OF A CONTRACT TO THE BIDDER. If any of the services cannot be performed within the United States, the bidder shall state with specificity the reasons why the services cannot be so performed. The Director shall determine whether sufficient justification has been provided by the bidder to form the basis of his certification that the services cannot be performed in the United States and whether to seek the approval of the Treasurer. 7.1.2.3 BREACH OF CONTRACT OF EXECUTIVE ORDER 129 A SHIFT TO PROVISION OF SERVICES OUTSIDE THE UNITED STATES DURING THE TERM OF THE CONTRACT SHALL BE DEEMED A BREACH OF CONTRACT.

If, during the term of the contract, the contractor or subcontractor, who had on contract award declared that services would be performed in the United States, proceeds to shift the performance of any of the services outside the United States, the contractor shall be deemed to be in breach of its contract, which contract shall be subject to termination for cause pursuant to Section 3.5b.1 of the Standard Terms and Conditions version 01 20 06 of the RFP, unless previously approved by the Director and the Treasurer. 7.2 FINAL CONTRACT AWARD Contract award[s] shall be made with reasonable promptness by written notice to that responsible bidder(s), whose bid proposal(s), conforming to this RFP, is(are) most advantageous to the State, price, and other factors considered. Any or all bid proposals may be rejected when the State Treasurer or the Director determines that it is in the public interest to do so.

http://www.elec.state.nj.us/

7.3 INSURANCE CERTIFICATES The contractor shall provide the State with current certificates of insurance for all coverages required by the terms of this contract, naming the State as an Additional Insured. 7.4 PERFORMANCE BOND Not applicable to this procurement.

8.0 CONTRACT ADMINISTRATION 8.1 CONTRACT MANAGER The State Contract Manager is the State employee responsible for the overall management and administration of the contract. The State Contract Manager for this project will be identified at the time of execution of contract. At that time, the contractor will be provided with the State Contract Manager’s name, department, division, agency, address, telephone number, fax phone number, and email address. 8.1.1 STATE CONTRACT MANAGER RESPONSIBILITIES For an agency contract where only one State office uses the contract, the State Contract Manager will be responsible for engaging the contractor, assuring that Purchase Orders are issued to the contractor, directing the contractor to perform the work of the contract, approving the deliverables and approving payment vouchers. The State Contract Manager is the person that the contractor will contact after the contract is executed for answers to any questions and concerns about any aspect of the contract. The State Contract Manager is responsible for coordinating the use and resolving minor disputes between the contractor and any component part of the State Contract Manager's Department. The State Contract Manager will be contacted by the Division to ascertain if the contract should be extended as detailed in Section 5.2. The State Contract Manager will then notify The Director of DOA’s intention. If the contract has multiple users, then the State Contract Manager shall be the central coordinator of the use of the contract for all Using Agencies, while other State employees engage and pay the contractor. All persons and agencies that use the contract must notify and coordinate the use of the contract with the State Contract Manager. 8.1.2 COORDINATION WITH THE STATE CONTRACT MANAGER Any contract user that is unable to resolve disputes with a contractor shall refer those disputes to the State Contract Manager for resolution. Any questions related to performance of the work of the contract by contract users shall be directed to the State Contract Manager. The contractor may contact the State Contract Manager if the contractor can not resolve a dispute with contract users.

PRICE SCHEDULE

FINANCIAL SERVICES: LINE OF CREDIT, EQUIPMENT MASTER LEASE AGREEMENT

Bid Number 06-X-38322

Refer to RFP Section 3.0 (Scope of Work) for task requirements and deliverables & RFP Section 2.1 for definitions of "Firm Fixed Price"

LINE NO

COMMODITY-SERVICE DESCRIPTION

0001 FINANCING RATE, STATE OF NEW JERSEY BID AS A PERCENTAGE OF THE FEDERAL RESERVE STATISTICAL

RELEASE INTEREST RATE SWAP H.15 INDEX. ACCORDING TO THE TERM REQUIRED. FIRST PAYMENT STARTING DECEMBER 15, 2006. BIDDER TO INSERT PERCENT OF H.15 INDEX FOR INDICATED TERM. 2 YEAR TERM_______________________% NOTE: ALL PERCENTAGE RATES MUST BE ROUNDED TO FOUR (4) DECIMAL PLACES.

0002 FINANCING RATE, STATE OF NEW JERSEY BID AS A PERCENTAGE OF THE FEDERAL RESERVE STATISTICAL RELEASE INTEREST RATE SWAP H.15 INDEX. ACCORDING TO THE TERM REQUIRED. FIRST PAYMENT STARTING DECEMBER 15, 2006. BIDDER TO INSERT PERCENT OF H.15 INDEX FOR INDICATED TERM. 3 YEAR TERM___________________________% NOTE: ALL PERCENTAGE RATES MUST BE ROUNDED TO FOUR (4) DECIMAL PLACES.





For Pricing Purposes, bidders should refer to the H.15 index for the week ending March 6, 2006. This reference is provided so all bidders are looking at the same rate when preparing a bid. Bidders must insert the percentage of the H.15 index as a firm fixed price in all price lines above. Do not insert the interest rate itself. Failure to provide a percentage on any price line will cause the bid to be rejected as being non-responsive to the bid submission requirements.

For Informational Purposes Funding for Services:

The State does not encourage its agencies to finance "soft" costs. There may however, be instances where the State may need to finance a portion of these services as an ancillary cost of purchase and installation. Please respond "yes" or "no" if your firm would be willing to finance any of the following services and if your firm has a restriction on the percentage of the transaction which may be devoted to financing these services: Restriction Percentage YES NO % 1. Maintenance charges for equipment, ( ) ( ) ( ) computer hardware and software 2. Programming/system conversion charges ( ) ( ) ( ) 3. Design/Development charges for software, hardware, LAN's, etc. ( ) ( ) ( ) 4. Training ( ) ( ) ( )

As noted above and in the Background of the RFP, Section 1.2, soft costs are items such as maintenance, software, programming and training and are usually small additions to the price of the equipment. This RFP requires bidders to disclose their internal policies regarding financing soft costs with related equipment. The bidder’s disclosure of policy on soft costs will not impact contract award.

Appendices

Financial Services:

Line of Credit,

Equipment Lease Purchase Financing

06-X-38322

Appendix 1

Master Lease Agreement

Including:

Table of contents Master Lease Agreement

Exhibit A – Equipment Schedule Exhibit B – Weekly Payment Sheets, 8038G, 8038GC Exhibit C – Opinion of Counsel (example)

MASTER LEASE AGREEMENT Table of Contents

Article I Definitions and Exhibits Section 1.1 Definitions Section 1.2 Exhibits Article II Representations, Warranties and Covenants Section 2.1 Representations, Warranties and Covenants of Lessee Section 2.2 Representations, Warranties of Lessor Article III Lease of Equipment Section 3.1 Acquisition of Equipment Section 3.2 Equipment Delivery; Documentation Section 3.3 Lease; Enjoyment; Inspection Section 3.4 Alternative Procedures; Escrow Agreement Article IV Lease Term Section 4.1 Lease Term Section 4.2 Termination by Lessee Section 4.3 Intent to Continue Lease Term Appropriations Section 4.4 Effect of Termination Section 4.5 Non-substitution Section 4.6 Termination of Lease Term Article V Rental Payments Section 5.1 Rental Payments Section 5.2 Current Expense Section 5.3 Rental Payments to be Unconditional Article VI Insurance and Negligence Section 6.1 Liability and Property Insurance Section 6.2 Damage to or Destruction of Equipment Article VII Other Obligations of Lessee Section 7.1 Use of Permits Section 7.2 Maintenance of Equipment by Lessee Section 7.3 Taxes, Other Government Charges and Utility Charges Section 7.4 Advances Article VIII Title; Security Interest; Liens Section 8.1 Title Section 8.2 Security Interest Section 8.3 Liens Section 8.4 Installation of Lessee’s Equipment Section 8.5 Modifications of Equipment

Section 8.6 Personal Property Article IX Warranties Section 9.1 Selection of Equipment Section 9.2 Installation and Maintenance of Equipment Section 9.3 Contractor’s(s’) Warranties Section 9.4 Patent Infringement Article X Option to Prepay Section 10.1 When Available Section 10.2 Exercise of Option Section 10.3 Release of Lessor’s Interest Article XI Assignment, Subleasing, Mortgaging and Selling Section 11.1 Assignment by Lessor Section 11.2 Assignment and Subleasing by Lessee Article XII Events and Remedies Section 12.1 Events of Default Defined Section 12.2 Remedies on Default Section 12.3 Return of Equipment Section 12.4 No Remedy Exclusive Section 12.5 Interest on Late Payments Article XIII Administrative Provisions Section 13.1 Notices Section 13.2 Financial Information Section 13.3 Binding Effect Section 13.4 Severability Section 13.5 Amendments, Changes and Modifications Section 13.6 Captions Section 13.7 Further Assurances and Corrective Instruments Section 13.8 Execution in Counterparts Section 13.9 Applicable Law Section 13.10 Entire Agreement Section 13.11 Waiver of Jury Trial

MASTER LEASE AGREEMENT

THIS MASTER LEASE AGREEMENT (“Agreement”) dated as of this ___ of _________, 200_, by and between ____________________, a corporation duly organized and existing under the laws of the State of ____________, as lessor (“Lessor”), whose principal business address is as shown on the execution page hereof; and the State of New Jersey (“Lessee”), acting by and through its Department of Treasury, Division of Purchase & Property and Division of Administration, as Lessee, whose address is shown on the execution page hereof; WITNESSETH: WHEREAS, Lessee has the exclusive authority and duty to acquire items of equipment needed and to be used by the State and its agencies; and WHEREAS, Lessee is authorized by law to acquire such items of equipment by entering into lease with option to purchase agreements; and WHEREAS, State agencies have requested that Lessee make arrangements for the lease and purchase of certain items of equipment described or to be described in Equipment Schedule(s) on as advantageous terms as possible; and WHEREAS, Lessor is willing to acquire such items of equipment and to lease them to Lessee pursuant to this Agreement, and Lessee is willing to lease such items of equipment from Lessor pursuant to this Agreement; NOW THEREFORE, in the joint and mutual exercise of their powers, and in consideration of the mutual covenants herein contained, the parties recite and agree as follows: ARTICLE I: DEFINITIONS AND EXHIBITS Section 1.1 Definitions: Unless the context otherwise requires, the terms defined in this Section shall, for all purposes of this Agreement, have the meanings herein specified. Agreement: This Master Lease Agreement.

Contractor(s): Each of the manufacturers or vendors from whom Lessee has ordered or will order or with whom Lessee has contracted or will contract for the manufacture, delivery and/or installation of the Equipment.

Equipment: An item or items of personal property which are or will be described in an Equipment Schedule and which are being or will be leased with option to prepay pursuant to a Lease.

Equipment Group: Equipment identified on any one Equipment Schedule.

Equipment Schedule: A schedule consisting of the separate but like numbered pages of Exhibits A and B which have been completed with respect to an Equipment Group and executed by Lessor and Lessee as indicated therein.

Fiscal Year: The 12-month fiscal period of Lessee which commences on July 1 in every year and ends on the following June 30. Independent Counsel: An attorney duly admitted to the practice of law before the highest court of the State.

Interest: The portion of any Rental Payment designated as and comprising interest as shown in any Equipment Schedule.

Lease: With respect to each Equipment Group, this Agreement and the Equipment Schedule in which such Equipment Group is described, which shall constitute a separate contract relating to such Equipment Group.

Lease Term: With respect to any Equipment Group, the period during which the related Lease is in effect as specified in Section 4.1.

Net Proceeds: Any insurance proceeds or condemnation award, paid with respect to any Equipment, remaining after payment therefrom of all expenses incurred in the collection thereof.

Non-appropriation: The failure of Lessee’s legislature to appropriate or otherwise provide money for any Fiscal Year of Lessee sufficient for the continued performance of a Lease by Lessee with respect to any Equipment Group.

Payment Date: The date upon which any Rental Payment is due and payable as provided in any Equipment Schedule. Permitted Encumbrances: As of any particular time: (i) liens for taxes and assessments not then delinquent, or which Lessee may, pursuant to the provisions of Sections 7.3 hereof, permit to remain unpaid, (ii) a Lease and amendments thereto, (iii) Lessor’s interest in the Equipment, and (iv) any mechanic’s, laborer’s, material men’s, supplier’s or vendor’s lien or right not filed or perfected in the manner prescribed by law, other than any lien arising through a Contractor or which Lessee may, pursuant to Article VIII hereof, permit to remain unpaid. Prepayment Price: With respect to any Equipment Group, as of the Payment Dates specified in the Equipment Schedule relating thereto, the amount so designated and set forth opposite each such date in such Equipment Schedule.

Principal: The portion of any Rental Payment designated as the principal component in any Equipment Schedule.

Rental Payment: With respect to any Equipment Group, the payment due from Lessee to Lessor on each Payment Date during the Term of a Lease, as shown in the Equipment Schedule relating thereto.

Specifications: The bid specifications and/or purchase order pursuant to which Lessee has ordered any Equipment from a Contractor.

State: The State of New Jersey

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

Using Agency: Any agency of the State which has been authorized by the State Department of Treasury, Division of Purchase and Property and Division of Administration to have possession and use of an Equipment Group as indicated on the Exhibit A relating to such Equipment Group.

Section 1.2. Exhibits: The following Exhibits are attached to and by reference made a part of this Agreement:

Exhibit A: The Equipment Schedule, which together with this Agreement comprises the Lease, names the Using Agency and describes the Equipment Group being leased by Lessee pursuant to the Lease., The serial or other identifying numbers relating to the Equipment and the due date of each Rental Payment shall be inserted on each Equipment Schedule when available. Exhibit B: A form of Certificate of Acceptance of Lessee and the Using Agency indicating that the Equipment Group described therein has been delivered and installed in accordance with the Specifications, and has been accepted by Lessee and the Using Agency, the date on which Rental Payments shown in the Equipment Schedule relating thereto shall commence, and that certain other requirements have been met by Lessee. Exhibit C: A form of opinion of counsel to Lessee executed this date as to the nature and powers of Lessee: the validity, execution and delivery of this Agreement and the Equipment Schedule executed this date and the form of various related documents; the absence of litigation; and related matters. ARTICLE II: REPRESENTATIONS, WARRANTIES AND COVENANTS Section 2.1 Representations, Warranties and Covenants of Lessee: Lessee represents and warrants to and covenants with Lessor with respect to this Agreement and each Lease, as follows: (a) Lessee is the State, and is authorized under the Constitution and laws of the State to enter into this

Agreement and the transactions contemplated hereby, and to perform all of its obligations hereunder and each Lease. Notwithstanding that various Using Agencies have possession of the Equipment Groups, the State has the obligation to pay Rental Payments hereunder and perform other obligations of Lessee.

(b) The execution and delivery of this Agreement, Equipment Schedule(s), Certificate of Acceptance(s)

and, if applicable, Escrow Agreement(s) by the officer of Lessee executing it and Certificate(s) of Acceptance by an officer of Using Agency has been duly authorized under State law, and Lessee has complied and/or will comply with all public bidding and other State and Federal Laws applicable to this Agreement, each Lease and the acquisition and financing of the Equipment by Lessee.

(c) Lessee will ensure that each Using Agency will use the Equipment during the Lease Term only to

perform essential governmental functions and none of the Equipment will be used in or for any private commercial activity.

(d) To the extent permitted by law, Lessee will do and perform all acts and things necessary or desirable

in order to assure that under the Internal Revenue Code of 1986 (the Code) and Treasury Regulations promulgated there under (the Regulations), the interest portion of the Rental Payments will be excludable from gross income for purposes of federal income taxation.

(e) Lessee will submit to the Secretary of the Treasury information reporting statements and

other information relating to each Lease at the times and in the forms required by the Code and the Regulations.

(f) Upon delivery and installation of any Equipment Group, the Lessee, and the Using Agency identified

in the related Equipment Schedule will provide to Lessor a completed and executed copy of a Certificate of Acceptance relating thereto in the form attached hereto as Exhibit B, and upon execution of this Agreement and/or each Lease, Lessee will provide to Lessor an opinion of its legal counsel in the form attached hereto to Exhibit C.

Section 2.2. Representations, Warranties of Lessor: Lessor represents and warrants to Lessee as follows: (a) Lessor is a corporation duly organized, existing and in good standing under and by virtue of the laws

of the state of ________________, and is duly qualified and in good standing as a foreign

corporation authorized to transact business in the State; has the power to enter into this Agreement and the Leases contemplated hereunder; is possessed of full power to own and hold real and personal property and to lease the same; and has duly authorized the execution and delivery of this Agreement and the Leases contemplated hereunder.

(b) Neither the execution and delivery of this Agreement and the Leases contemplated hereunder, nor

the fulfillment of or compliance with the terms and conditions hereof and thereof, nor the consummation of the transactions contemplated hereby and thereby, conflicts with or results in a breach of the terms, conditions or provisions of any restriction or any agreement or instrument to which Lessor is now a party or by which Lessor is bound, constitutes a default under any of the foregoing, or results in the creation or imposition of any lien, charge or encumbrance whatsoever upon any of the property or assets of Lessor or upon the Equipment, except Permitted Encumbrances.

ARTICLE III: LEASE OF EQUIPMENT Section 3.1 Acquisition of Equipment: Lessee shall advise Lessor of its desire to lease Equipment and of the desired lease terms. Upon agreement by Lessor and Lessee as to the lease of the Equipment and such terms, Lessee shall order the Equipment Group from the appropriate Contractor or Contractors. Upon receipt and acceptance of the Equipment, the Lessee shall furnish to Lessor an Executed Equipment Schedule relating to the Equipment Group. Nothing herein shall obligate Lessor to lease any Equipment to Lessee until Lessor shall have so concurred in writing to the lease of the Equipment by the execution of an Equipment Schedule relating thereto. Section 3.2 Equipment Delivery; Documentation: Upon delivery of any Equipment Group, the Using Agency and Lessee shall inspect such Equipment, and if such Equipment, meets Lessee’s and Using Agency’s Specifications, the Using Agency and Lessee shall provide to Lessor a completed and executed copy of a Certificate of Acceptance relating thereto; in the form attached hereto as Exhibit B, and a completed and executed copy of the related Equipment Schedule. Lessor and Lessee shall take all actions necessary to vest legal title to each Equipment Group in the party specified in Section 8.1 hereof, and to perfect a security interest therein in favor of Lessor or a person, firm or corporation designated by it. Section 3.3 Lease; Enjoyment; Inspection: Lessor hereby leases each Equipment Group made subject to a Lease under this Agreement to Lessee, and Lessee hereby leases such Equipment Group from Lessor, upon the terms and conditions set forth in such Lease. Lessor hereby covenants to provide Lessee during the Lease Term with the quiet use and enjoyment of the Equipment Group, and Lessee shall during the Lease Term peaceably and quietly have and hold and enjoy the Equipment Group, without suit, trouble or hindrance from Lessor, except as expressly set forth in the Lease, Lessor will, at the request of Lessee and at Lessee’s cost, join in any legal action in which Lessee asserts its right to such possession and enjoyment. Lessee further agrees that Lessor shall have such rights of access to examine and inspect, at reasonable times, the Equipment as may be reasonably necessary to cause the proper maintenance of the Equipment in the event of failure by Lessee to perform its obligations under the Lease. Section 3.4 Alternative Procedures; Escrow Agreement: Notwithstanding the provisions of Sections 3.1 and 3.2, if upon agreement by Lessor and Lessee as to any Equipment Group to be acquired and leased by Lessee under a Lease, Lessor and Lessee enter into an escrow agreement establishing a fund (the “Escrow Account”) from which the Equipment Group cost is to be paid, and an amount equal to such cost is deposited therein by Lessor; (a) Lessor and Lessee shall immediately complete and execute an Equipment Schedule relating to the Equipment Group, (b) the amount deposited into the Escrow Account shall be repaid to Lessor by the Rental Payments relating to the Equipment Group as provided in such Equipment Schedule and (c) the aggregate Principal component of the Rental Payments due under such Equipment Schedule shall be equal to the amount of Lessor’s deposit into the Escrow Account.

ARTICLE IV: LEASE TERM Section 4.1 Lease Term: The Lease with respect to an Equipment Group shall be in effect for a Lease Term commencing upon the date of execution of the Equipment Schedule relating thereto and ending as provided in Section 4.6; provided; however, interest shall not begin to accrue until Lessor has paid the Contractor(s) or deposited funds into an escrow account. Section 4.2 Termination by Lessee: In the sole event of Non-appropriation relating to any particular Equipment Group, Lessee shall have the right to terminate the related Lease with respect to such Equipment Group, at the end of any Fiscal Year of Lessee, in the manner and subject to the terms specified in this Section and Sections 4.4 and 4.5. Lessee may effect such termination by giving Lessor a written notice of termination with respect to such Equipment Group and by paying to Lessor any Rental Payments and other amounts with respect to such Equipment Group which are due and have not been paid at or before the end of its then current Fiscal Year. Lessee shall within ten (10) days after the final adoption of laws appropriating money to fund the State’s budget, for any fiscal year which fails to appropriate moneys for an Equipment Group, deliver to the Lessor a written notice of Non-appropriation and shall notify Lessor of any anticipated termination. In the event of termination of a Lease with respect to any Equipment Group as provided in this section, Lessee shall deliver possession of such Equipment Group to Lessor in accordance with Section 12.3, and, at the written instruction of Lessor, shall convey to Lessor or release its interest in such Equipment Group within fifteen (15) days after the termination of a Lease with respect to such Equipment Group. Section 4.3. Intent to Continue Lease Term Appropriations: Lessee presently intends to continue each Lease for its entire Lease Term with respect to each Equipment Group made subject thereto and to pay all Rental Payments relating thereto. The Using Agency will include in the budget request for each Fiscal Year the Rental Payments to become due in such Fiscal Year with respect to each Equipment Group. Section 4.4 Effect of Termination: Upon termination of a Lease with respect to any Equipment Group as provided in Section 4.2, Lessee shall not be responsible for the payment of any additional Rental Payments relating thereto coming due with respect to succeeding Fiscal Years, but shall be responsible to pay the Rental Payments then due under such Lease to the date of termination (which is the last day of the Fiscal Year for which funds were appropriated, and if Lessee has not delivered possession of such Equipment Group to Lessor in accordance with Section 12.3 and conveyed to Lessor or released its interest in the Equipment Group within fifteen (15) days after the termination of a Lease with respect thereto, the termination shall nevertheless be effective, but Lessee shall be responsible for the payment of damages in an amount equal to the amount of the Rental Payments thereafter coming due with respect to such Equipment Group which are attributable to the number of days after such fifteen (15) day period during which Lessee fails to take such actions. Section 4.5 Non-substitution: If a Lease is terminated by Lessee with respect to an Equipment Group in accordance with Section 4.2, to the extent permitted by State law, Lessee agrees not to purchase, lease or rent personal property to perform the same functions as, or functions taking the place of, those performed by such Equipment Group, for a period of ninety (90) days; provided, however, that these restrictions shall not be applicable in the event the Equipment Group shall be sold by Lessor and the amount received from such sale, less all costs of such sale, is sufficient to pay the then applicable Prepayment Price relating thereto as set forth in the Equipment Schedule; or if to the extent that the application of these restrictions is unlawful and would affect the validity of this Agreement or the Lease. Section 4.6 Termination of Lease Term: The Lease Term of a Lease with respect to any Equipment Group will terminate upon the occurrence of the first of the following events: (a) the termination thereof by Lessee in accordance with Section 4.2; (b) the exercise by Lessee of its option to prepay pursuant to Article X; or (c) the payment by Lessee of all Rental Payments and all other amounts authorized or required to be paid by Lessee under the Lease with respect to the Equipment Group. In the event of a default by Lessee with respect to the Equipment Group pursuant to Article XII, termination would not be automatic but rather would be at the Lessor’s option.

ARTICLE V: RENTAL PAYMENTS Section 5.1 Rental Payments: Lessee agrees to pay Rental Payment with respect to each Equipment Group during the related Lease Term, in the amounts and on the dates specified in the Equipment Schedule relating thereto. A portion of each Rental Payment is paid as and represents the payment of Interest. Each Equipment Schedule sets forth the Interest component of each Rental Payment. All Rental Payments shall be paid to Lessor; or to such other person(s) or entity (ies) to which Lessor has assigned such Rental Payments as specified in Article XI, at such place as Lessor or such assignee may from time to time designate by written notice to Lessee. Lessee shall pay the Rental Payments exclusively from moneys legally available therefore, in lawful money of the United States of America. Section 5.2 Current Expense: The obligations of Lessee under each Lease, including its obligations to pay the Rental Payments due with respect to any Equipment Group, in any Fiscal Year for which a Lease is in effect, shall constitute a current expense of Lessee for such Fiscal Year and shall not constitute an indebtedness of Lessee within the meaning of the Constitution and laws of the State. Nothing herein shall constitute a pledge by Lessee of its full faith and credit or of any taxes or other moneys, other moneys lawfully appropriated from time to time for the benefit of the applicable Using Agency for this purpose and the proceeds or Net Proceeds of the Equipment, to the payment of any Rental Payment or other amount coming due hereunder. Section 5.3 Rental Payments to be Unconditional: Except as provided in Section 4.2, i.e, an event of non-appropriation, and except as provided in the set off for State taxes, P.L. 1995, c. 159, the obligation of Lessee to make Rental Payments or any other payments required under a Lease shall be absolute and unconditional in all events. Notwithstanding any dispute between Lessee and Lessor or any other person, Lessee shall, make all Rental Payments and other payments required hereunder when due and shall not withhold any Rental Payment or other payment pending final resolution of such dispute nor shall Lessee assert any right to set-off or counterclaim against its obligation to make such Rental Payments or other payments required under the Lease. Lessee’s obligation to make Rental Payments or other payments during the Lease Term shall not be abated thorough accident or unforeseen circumstances. However, nothing herein shall be construed to release Lessor from the performance of its obligations hereunder; and if Lessor should fail to perform any such obligation, Lessee may institute such legal action against Lessor as Lessee may deem necessary to compel the performance of such obligation or to recover damages therefore. ARTICLE VI: INSURANCE AND NEGLIGENCE Section 6.1 Liability and Property Insurance: At its own expense. Lessee shall cause property damage insurance to be carried and maintained with respect to each Equipment Group, or shall demonstrate to the satisfaction of the Lessor that adequate reserves to meet Lessee’s obligation under a Lease will be provided with respect to each item of Equipment sufficient in each case to replace such item of Equipment or pay the applicable Prepayment Price, whichever is greater. Where Lessee maintains such property damage insurance Lessor agrees to accept evidence of blanket insurance coverage which applies automatically to all lease purchase agreements and which does not require Lessor to be specifically named by endorsement. Lessee will provide a copy of a blanket insurance policy or policies to Lessor as evidence of such coverage with respect to such items of Equipment. Any insurance policy maintained pursuant to this Section 6.1 shall be so written or endorsed as to make losses, if any, payable to Lessee and Lessor as their respective interests may appear and shall provide that Lessor shall be given written notice at least thirty (30) days prior to cancellation or modification of such insurance policy. The Net Proceeds of the insurance required in this Section 6.1 shall be applied as provided below. Section 6.2 Damage to or Destruction of Equipment: Lessee assumes all risk of loss with respect to the Equipment itself, and if after delivery of any Equipment to Lessee all or any part of the Equipment is

lost, stolen, destroyed or damaged beyond repair, Lessee shall as soon as practicable after such event either: (a) replace the same at Lessee’s sole cost and expense with equipment of equal or greater value to the Equipment immediately prior to the time of the loss occurrence, such replacement equipment to be subject to Lessor’s reasonable approval, whereupon such replacement shall be substituted in the related Lease by appropriate endorsement; or (b) pay the applicable Prepayment Price of the Equipment Group to which such Equipment belongs as set forth in the particular Equipment Schedule. Lessee shall notify Lessor of which course of action it will take within fifteen (15) days after the loss occurrence. If Lessee fails or refuses to notify Lessor within the required period or if Lessee fails to complete the action within forty-five (45) days of the loss occurrence, Lessor may, at its option, declare the applicable Prepayment Price of the Equipment Group to which such Equipment belongs set forth in the particular Equipment Schedule immediately due and payable, and Lessee shall be obligated to pay the same. The Net Proceeds of all insurance payable with respect to the Equipment shall be available to Lessee and shall be used to discharge Lessee’s obligation under this Section. On payment of the Prepayment Price with respect to any Equipment Group, the related Lease shall terminate with respect to such Equipment and Lessee thereupon shall become entitled to such Equipment AS IS, WITHOUT WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABLITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR FITNESS FOR THE USE CONTEMPLATED BY LESSEE, except that such Equipment shall not be subject to any lien or encumbrance created by or arising through Lessor. ARTICLE VII: OTHER OBLIGATIONS OF LESSEE Section 7.1 Use Permits: Lessee shall exercise due care in the installation, use, operation and maintenance of the Equipment, and shall not install, use, operate or maintain the Equipment improperly, carelessly, in violation of any State and Federal Law or for a purpose or in a manner contrary to that contemplated by the Lease. Lessee shall obtain all permits and licenses necessary for the installation, operation, possession and use of the Equipment. Lessee shall comply with all State and Federal Laws applicable to the installation, use, possession and operation of the Equipment, and if compliance with any such State and Federal Law requires changes or additions to be made to the Equipment, such changes or additions shall be made by Lessee at its expense. Section 7.2 Maintenance of Equipment by Lessee: Lessee shall keep each Equipment Group at the address specified in the related Equipment Schedule and shall notify Lessor in writing prior to relocation of the Equipment. Lessee shall, at its own expense, maintain, preserve and keep the Equipment in good repair, working order and condition, and shall from time to time make all repairs and replacements necessary to keep the Equipment in such condition. Lessor shall have no responsibility for any of these repairs or replacements. Section 7.3 Taxes, Other Governmental Charges and Utility Charges: Except as expressly limited by this Section, Lessee shall pay all taxes and other charges of any kind which are at any time lawfully assessed or levied against or with respect to the Equipment, the Rental Payments or any part thereof, or which become due during a Lease Term, whether assessed against Lessee or Lessor. Lessee shall also pay when due all gas, water, steam, electricity, heat, power, telephone, and other charges incurred in the operation, maintenance, use, occupancy and upkeep of the Equipment, and all special assessments and charges lawfully made by any governmental body for public improvements that may be secured by a lien on the Equipment; provided that with respect to special assessments or other governmental charges that may lawfully be paid in installments over a period of years, Lessee shall be obligated to pay only such installments as are required to be paid during the Lease Term as and when the same become due. Lessee shall not be required to pay any federal, state or local income, inheritance, estate, succession, transfer, gift, franchise, gross receipts, profit, excess profit, capital stock, corporate, or other similar tax payable by Lessor, its successors or assigns, unless such tax is made in lieu of or as a substitute for any tax, assessment or charge which is the obligation of Lessee under this Section. Section 7.4 Advances: If Lessee shall fail to perform any of its obligations under this Article, Lessor may, but shall not be obligated to, take such action as may be necessary to cure such failure, including the advancement of money, and Lessee shall be obligated to repay all such advances on demand, with interest as provided by the New Jersey Prompt Payment Act.

ARTICLE VIII: TITLE; SECURITY INTEREST; LIENS Section 8.1 Title: During a Lease Term with respect to any Equipment Group, and so long as Lessee is not in default under Article XII, legal title to the Equipment Group and any and all repairs, replacements, substitutions and modifications to it shall be in Lessee. If so directed by Lessor in writing, upon termination of a Lease with respect to the related Equipment Group pursuant to Section 4.2 or Article XII hereof, full and unencumbered legal title to such Equipment Group shall pass to Lessor, and Lessee shall have no further interest therein. In either of such events, Lessee shall execute and deliver to Lessor such documents as Lessor may request to evidence the passage of legal title to such Equipment Group to Lessor and the termination of Lessee’s interest therein, and upon request by Lessor shall deliver possession of the Equipment Group to Lessor in accordance with Section 12.3. Upon termination of a Lease with respect to the related Equipment Group through exercise of Lessee’s option to prepay pursuant to Article X or through payment by Lessee of all Rental Payments and other amounts relating thereto, Lessor’s security or other interest in such Equipment Group shall terminate, and Lessor shall execute and deliver to Lessee such documents as Lessee may request to evidence the termination of Lessor’s security or other interest in such Equipment Group. Section 8.2 Security Interest: Lessee grants to Lessor a continuing, first priority security interest under the Uniform Commercial Code in each Equipment Group, the proceeds thereof and all repairs, replacements, substitutions and modifications thereto or thereof made pursuant to Section 8.5, in order to secure Lessee’s payment of all Rental Payments due during the related Lease Term and the performance of all other obligations herein and therein to be performed by Lessee. Lessee will join with Lessor in executing financing statements and will perform such acts as Lessor may request to establish and maintain a valid first lien and perfected security interest in the Equipment. If requested by Lessor, Lessee shall conspicuously mark the Equipment with appropriate lettering, labels or tags, and maintain such markings during the Lease Term, so as clearly to disclose Lessor’s security interest in the Equipment. Section 8.3 Liens: During each Lease Term. Lessee shall not, directly or indirectly, create, incur, assume or suffer to exist any mortgage, pledge, lien, charge, encumbrance or claim on or with respect to the Equipment, other than the respective rights of Lessor and Lessee as herein provided and Permitted Encumbrances. Except as expressly provided in Section 7.3 and this Article, Lessee shall promptly, at its own expense, take such action as may be necessary duly to discharge or remove any such mortgage, pledge, lien, charge, encumbrance or claim if the same shall arise at any time. Lessee shall reimburse Lessor, for any expense incurred by Lessor in order to discharge or remove any such mortgage, pledge; lien, charge, encumbrance or claim. Lessee may in good faith contest any lien filed or established against the Equipment and in such event may permit the items so contested and any appeal there from unless Lessor shall notify Lessee that, in the opinion of Independent Counsel, by nonpayment of any such item the interest of Lessor in the Equipment will be materially endangered or the Equipment or any part thereof will be subject to loss or forfeiture, in which event Lessee shall promptly pay and cause to be satisfied and discharged all such unpaid items or provide Lessor with full security against any such loss or forfeiture, in form satisfactory to Lessor. Lessor will cooperate fully with Lessee in any such contest, upon the request and at the expense of Lessee. Section 8.4. Installation of Lessee’s Equipment: Lessee may at any time and from time to time, in its sole discretion and at its own expense, install other items of equipment in or upon the Equipment, which items shall be identified by tags or other symbols affixed thereto as property of Lessee, shall remain the sole property of Lessee, and may be modified or removed by Lessee at any time provided that Lessee shall repair and restore any and all damage to the Equipment resulting from the installation, modification or removal of any such items. Section 8.5 Modifications of Equipment: Lessee shall, at its own expense, have the right to make repairs, replacements, substitutions and modifications to all or any of the parts thereof. All such work and any part of component used or installed to make a repair or as a replacement, substitution or modification, shall thereafter comprise part of the Equipment and be subject to the provisions of the related Lease. Such work shall not in any way damage the Equipment or cause it to be used for

purposes other than those authorized under the provisions of State and Federal Law or those contemplated by the related Lease; and the Equipment, upon completion of any such work, shall be of a value which is not less than the value of the Equipment immediately prior to the commencement of such work. Any property for which a replacement or substitution is made pursuant to this Section may be disposed of by Lessee in such manner and on such terms as are determined by Lessee. Section 8.6 Personal Property: The Equipment is and shall at all time be and remain personal property notwithstanding that the Equipment or any part thereof may be or hereafter become in any manner affixed or attached to or embedded in or permanently rested upon real property or any building thereon or attached in any manner to what is permanent by means of cement, plaster, nails, bolts, screws or otherwise. ARTICLE IX: WARRANTIES Section 9.1 Selection of Equipment: The Equipment and the Contractor(s) have been selected by Lessee, and Lessor shall have no responsibility in connection with the selection of the Equipment, its suitability for the use intended by Lessee, the acceptance by the Contractor(s) or its sales representatives of the order submitted, or any delay or failure by the Contractor(s) or its sale representative to manufacture, deliver or install the Equipment for use by Lessee. Lessee authorizes Lessor to add the serial number of the Equipment to the particular Equipment Schedule when available. Section 9.2 Installation and Maintenance of Equipment: Lessor shall have no obligation to install, erect, test, inspect service or maintain the Equipment under any circumstances, but such actions shall be the obligation of Lessee or the Contractors. Section 9.3 Contractor’s(s’) Warranties: Lessor hereby assigns to Lessee, for and during each Lease Term, all of its interest, if any, in all Contractor’s(s’) warranties and guarantees, express or implied, issued on or applicable to the Equipment, and Lessor hereby authorizes Lessee to obtain the customary services furnished in connection with such warranties and guarantees at Lessee’s expense. Section 9.4 Patent Infringement: Lessor hereby assigns to Lessee for and during each Lease Term, all of its interest, if any, in patent indemnity protection provided by any Contractor with respect to the Equipment. Such assignment of patent indemnity protection by Lessor to Lessee shall constitute the entire liability of Lessor for any patent infringement by Equipment furnished pursuant to a Lease. ARTICLE X: OPTION TO PREPAY Section 10.1 When Available: Lessee shall have the option to prepay its obligations under any Lease with respect to the Equipment Group subject thereto on any Payment Date relating thereto for the then applicable Prepayment Price set forth in the Equipment Schedule relating thereto, but only if Lessee is not in default under the Lease, and only in the manner provided in this Article. Section 10.2 Exercise of Option: Lessee shall give notice to Lessor of its intention to exercise its option with respect to any Equipment Group not less than thirty (30) days prior to the Payment Date on which the option is to be exercised and shall deposit with Lessor on the date of exercise an amount equal to all Rental Payments and any other amounts relating to such Equipment Group then due or past due (including the Rental Payment relating thereto due on the Payment Date on which the option is to be exercised) and the applicable Prepayment Price set forth in the Equipment Schedule relating thereto. The closing shall be on the Payment Date on which the option is to be exercised at the office of Lessee. Section 10.3 Release of Lessor’s Interest: Upon exercise of the prepayment option with respect to any Equipment Group by Lessee, Lessor shall convey or release to Lessee, all of its right, title and/or interest in and to the Equipment Group by delivering to Lessee such documents, as Lessee deems necessary for this purpose.

ARTICLE XI: ASSIGNMENT, SUBLEASING, MORTGAGING AND SELLING Section 11.1 Assignment by Lessor: Except as otherwise provided herein, Lessor shall not assign its rights and/or obligations under a Lease, and no purported assignment thereof shall be effective. However, all of Lessor’s right, title and/or interest in and to any Equipment Schedule, Equipment Group, the Rental Payments and other amounts due with respect thereto, and the right to exercise all rights under a Lease relating to such Equipment Schedule and Group may be assigned and reassigned by Lessor at any time, in whole or in part, to a corporate affiliate of Lessor, without the consent of Lessee. No such assignment shall be effective as against Lessee unless and until the assignor shall have filed with Lessee a copy of written notice thereof identifying the assignee. No such assignment shall relieve assignor or assignee of the right of the State of New Jersey to set off under the provisions of P.L. 1995, c.159, N.J.S.A. Lessor may assign its rights and obligations under a Lease, including its right to receive Rental Payments there under, to a grantor trust or other entity for any purpose, including creating or selling certificates of participation or otherwise securitizing Lessor’s Lease obligations and rights only upon the prior written approval of Lessee and the Office of Public Finance, which the Lessee and the Office of Public Finance in their sole discretion, may grant or withhold. Lessor agrees that the total amount that can be assigned under this paragraph will not exceed 10% of the total dollar value of all leases to date. Lessor will not provide any disclosure concerning the State of New Jersey in connection with such assignment. Lessee and the State of New Jersey make no representation as to the tax-exempt nature of the assignment of Leases. The Lessor shall indemnify and hold harmless the Lessee and the State of New Jersey from any and all liability associated with Lessor’s assignment of Leases under this paragraph or the preceding paragraph. No such assignment shall relieve assignor or assignee of the right of the State of New Jersey to set off under the provision of P.L. 1995 c. 159, N.J.S.A.. During each Lease Term, Lessor shall keep a complete and accurate record of all such assignments; provided that if Lessor transfers a Lease to a bank or trust company for the purpose of creating and selling certificates of participation in such Lease and the related Rental Payments, the instrument of transfer shall require the bank or trust company to keep a record of the name and address of the record owners of all such certificates of participation. Section 11.2 Assignment and Subleasing by Lessee: Neither a Lease nor Lessee’s interest in Equipment Group may be sold, assigned, transferred, pledged or mortgaged by Lessee without the written consent of Lessor. However, Equipment may be subleased by Lessee, to a state agency or other political subdivision for the performance of essential government services by such agency or subdivision without the consent of Lessor, provided that: (a) the related Lease and the obligation of Lessee to make Rental Payments there under, shall remain obligations of Lessee, and (b) the sublease assumes the obligations of Lessee under the Lease with respect to the Equipment subleased. Lessee shall immediately furnish to Lessor a true and complete copy of such sublease. No sublease shall cause the Interest component of the Rental Payments due with respect to the Equipment Group to become includible in gross income of the recipient for federal income tax purposes. ARTICLE XII: EVENTS OF DEFAULT AND REMEDIES Section 12.1 Events of Default Defined: The following shall be “events of default” under a Lease with respect to the related Equipment Group: (a) Failure by Lessee to pay any Rental Payments or other payment required to be paid under a Lease

with respect to any Equipment Group at the time specified therein and the continuation of said failure for a period of three (3) days.

(b) Failure by Lessee to observe and perform any covenant, condition or agreement on its part to be

observed or performed with respect to any Equipment Group, other than as referred to in Clause (a) of this Section, for a period of thirty (30) days after written notice specifying such failure and

requesting that it be remedied has been given to Lessee by Lessor, unless Lessor shall agree in writing to an extension of such time prior to its expiration; provided, however, if the failure stated in the notice cannot be corrected within the applicable period, Lessor will not unreasonably withhold its consent to any extension of such time if corrective action is instituted by Lessee within the applicable period and diligently pursued until the default is corrected.

(c) The determination by Lessor that any representation or warranty made by Lessee In Section 2.1 was untrue in any material respect upon execution of any Equipment Schedule. (d) The filing by Lessee of a voluntary petition in bankruptcy, or failure by Lessee promptly to lift any execution, garnishment or attachment of such consequence as would impair the ability of Lessee to carry on its governmental function or adjudication of Lessee as a bankrupt, or assignment by Lessee for the benefit of creditors, or the entry by Lessee into an agreement of composition with creditors, or the approval by a court of competent jurisdiction of a petition applicable to Lessee in any proceedings instituted under the provisions of the United States Bankruptcy Code, as amended, or under any similar acts which may hereafter by enacted. The provisions of this Section 12.1 and Section 12.2 are subject to the following limitation: if by reason of “force majeure” Lessee is unable in whole or in part to carry out its obligation under a Lease with respect to any Equipment Group, other than its obligation to pay Rental Payments with respect thereto which shall be paid when due notwithstanding the provisions of this paragraph, Lessee shall not be deemed in default during the continuance of such inability. The term “force majeure” as used herein shall mean, without limitation, the following: acts of God; strikes, lockouts or other labor disturbances; acts of public enemies; orders or restraints of any kind of the government of the United States of America or the State or their respective departments, agencies or officials, or any civil or military authority; insurrections, riots; landslides; earthquakes; fires; storms; droughts; floods; explosions; breakage or accident to machinery, transmission pipes or canals; or any other cause or event not reasonably within the control of Lessee and not resulting from its negligence. Lessee agrees, however, to remedy with all reasonable dispatch the cause or causes preventing Lessee from carrying out its obligations under a Lease; provided that the settlement of strikes; lockouts and other labor disturbances shall be entirely within the discretion of Lessee and Lessee shall not be required to make settlement of strikes, lockouts and other labor disturbances by acceding to the demands of the opposing party or parties when such course is in the judgement of Lessee unfavorable to Lessee. Section 12.2 Remedies on Default: Whenever any event of default referred to in Section 12.1 hereof shall have happened and be continuing with respect to any Equipment Group, Lessor shall have the right, at its option and without any further demand or notice, to take one or any combination of the following remedial steps: (a) terminate the Lease with respect to the Equipment Group as to which such event of default has

occurred, effective as of the Rental Payment date immediately following such event of default; (b) repossess any or all of the Equipment Group subject to the Lease to which the event of default

relates by giving Lessee written notice to deliver the Equipment in the manner provided in Section 12.3; Lessor may enter upon Lessee’s premises where the Equipment is kept and take possession of the Equipment and charge Lessee for costs incurred in repossessing the Equipment, including reasonable attorney’s fees. If Lessor elects to take possession of any Equipment, it will do so with qualified personnel and in a workmanlike manner; and Lessee hereby expressly waives any damages occasioned by actions taken by qualified personnel in a workmanlike manner. If the Equipment or any portion of it has been destroyed or damaged beyond repair, Lessee shall pay the applicable Prepayment Price of the damaged or destroyed Equipment as set forth in the Equipment Schedule relating thereto to Lessor. Upon such payment, Lessor shall release all of its interest in the Equipment as proved in Section 10.3. Notwithstanding the fact that Lessor has taken possession of the Equipment, Lessee shall continue to be responsible for the Rental Payments due with respect thereto during the Fiscal Year then in effect.

(c) take whatever action at law or in equity may appear necessary or desirable to collect any Rental Payments or other amounts then due or to become due for which funds have been appropriated during the Fiscal Year then in effect., or to enforce the performance and observation of any obligation, agreement or covenant of Lessee under this Lease, all in accordance with the New Jersey Contractual Liability Act, N.J.S.A. 59:13-1 et seq.

An event of default with respect to one Lease shall not constitute an event of default with respect to any other Lease. If Lessor terminates any Lease and, in its discretion, takes possession and disposes of the Equipment Group subject thereto or any portion thereof, Lessor shall apply the proceeds of any such disposition to pay the following items in the following order: (i) all costs (including, but not limited to, attorneys’ fees) incurred in securing possession of the Equipment; (ii) all expenses incurred in completing the disposition; (iii) any sales or transfer taxes; (iv) the applicable Prepayment Prices of the Equipment Groups: and (v) the balance of any Rental Payments owed by Lessee during the Fiscal Year then in effect. Any disposition proceeds remaining after the requirements of Clauses (i), (ii), (iii), (iv) and (v) have been met shall be paid to Lessee. Section 12.3 Return of Equipment: Except as provided otherwise herein upon the expiration or termination of a Lease with respect to the related Equipment Group prior to the payment of all Rental Payments in accordance with the Equipment Schedule, Lessee shall promptly, but in any event within thirty (30) days after such termination, or if Lessee has diligently pursued the following required actions, such actions cannot be completed within thirty (30) days and the Equipment Group is not being used by Lessee, such longer period of time to which Lessor and Lessee mutually agree, at its own cost and expense; (a) perform any testing and repairs required to place the Equipment in the condition required by Article VII; (b) if deinstallation, disassembly or crating is required, cause the Equipment to be deinstalled, disassembled and crated by an authorized manufacturer’s representative or such other service person as is satisfactory to Lessor; and (c) return the Equipment to a location within the State specified by Lessor, freight and insurance prepaid by Lessee. If Lessee refuses to return the Equipment in the manner designated, Lessor may reposses the Equipment and charge to Lessee the costs of such repossession. Section 12.4 No Remedy Exclusive: No remedy conferred upon or reserved to Lessor by this Article is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under a Lease. No delay or omission to exercise any right or power accruring upon any default shall impair any such right or power from being later exercised. Section 12.5 Interest On Late Payments: Lessee shall pay interest on late Rental Payments in accordance with the New Jersey Prompt Payment Act. ARTICLE XIII: ADMINISTRATIVE PROVISIONS Section 13.1 Notices: All notices, certificates, legal opinions or other communications hereunder shall be sufficiently given and shall be deemed given when delivered or deposited in the United States mail in registered form with postage fully prepaid to the addresses specified on the execution page hereof; provided that Lessor and Lessee, by notice given hereunder, may designate different addresses to which subsequent notices, certificates, legal opinions or other communications will be sent. Section 13.2 Financial Information: During each Lease Term, Lessee annually will provide Lessor with current financial statements, budgets, proof of appropriation for the ensuing Fiscal Year and such other financial information relating to the ability of Lessee to continue in a Lease as may be requested by Lessor. Section 13.3 Binding Effect: This Agreement and each Equipment Schedule executed hereunder (i.e., each Lease) shall inure to the benefit of and shall be binding upon Lessor and Lessee and their respective successors and assigns.

Section 13.4 Severability: In the event any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provisions hereof. Section 13.5 Amendments, Changes and Modifications: This Agreement, any Lease and each Equipment Schedule executed hereunder (i.e., each Lease), may be amended or any of its terms modified only by written document duly authorized, executed and delivered by Lessor and Lessee. Section 13.6 Captions: The captions or headings in this Agreement and each Equipment Schedule executed hereunder, (i.e., each Lease), are for convenience only and in so way define, limit or describe the scope or intent of any provisions, Articles, Sections or Clauses of a Lease. Section 13.7 Further Assurances and Corrective Instruments: Lessor and Lessee agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for correcting any inadequate or incorrect description of the Equipment leased or intended so to be, or for otherwise carrying out the expressed intention of this Agreement. Section 13.8 Execution in Counterparts: This Agreement and each Equipment Schedule executed hereunder, (i.e., each Lease), may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Section 13.9 Applicable Law: This Agreement and each Equipment Schedule executed hereunder, (i.e., each lease), shall be governed by and construed in accordance with the laws of the State. Section 13.10 Entire Agreement: Notwithstanding any provision or any other agreement to the contrary, the terms and conditions of this Agreement and each Equipment Schedule executed hereunder, (i.e., each Lease), supersede all previous agreements and understandings among Lessor’s and Lessee’s obligations with respect thereto. Section 13.11 Waiver of Jury Trial: Lessor and Lessee hereby waive any right to trial by jury in any action of proceeding with respect to, in connection with or arising out of this Agreement. IN WITNESS WHEREOF, Lessor has caused this Agreement to be executed in its corporate name and by its duly authorized officer; and Lessee has caused this Agreement to be executed in its name by its duly authorized officer, as of the date first above written. STATE OF NEW JERSEY, Lessee By: Department of the Treasury ________________________ Division of Purchase & Property Lessor By: ________________________ By: _________________________ Title: Director Title: _________________________ Date: ________________________ Date: _________________________ Address: Address: 33 West State Street, 8th Floor Trenton, NJ 08625-0230 Department of the Treasury Division of Administration, Lessee

By: ________________________ Title: Associate Deputy State Treasurer & Director and Chief Financial Officer Date: ________________________ Address: 50 West State Street, 8th Floor Trenton, NJ 08625-0230 Attest:_______________________ Attest:_________________________

Appendix 1

Exhibit A

Equipment Schedule

Appendix 1

Exhibit B

Weekly Payment Sheets 8038 G 8038GC

Exhibit B

LOC#4

PAYMENT WEEK # WEEK ENDING DATE: The following Direct Payment Authorizations are contained on this Master Payment Schedule: VENDOR AGENCY EQUIPMENT $$ TOTAL $___________ State of NJ, acting by and through its Department of Treasury, Division of Administration Lessee BY:___________________ TITLE: Operations Manager DATE:____________________

LOC#4 To: Catherine Singer 984-0910 Date: FAX 777-1987 From: George McElroy - 984-6271 FAX 292-9566 Requisition Number: Amount: H.15 Date: H.15 Rate: Interest Rate: Interest Start Date: First Payment Date: Final Payment Date:

Appendix 1

Exhibit C

Opinion of Counsel

Example

State of New Jersey

DEPARTMENT OF LAW AND PUBLIC SAFETY

DIVISION OF LAW RICHARD J. HUGHES JUSTICE COMPLEX

25 MARKET STREET PO BOX 106

TRENTON, NJ 08625-0106 (609) 984-8150

January 9, 2002

Mr. James Quinn Manager, Municipal Finance Ford Motor Credit Company One American Toad Dearborn, MI 41826

RE: Master Lease Agreement dated as of January 9, 2002 by and between Ford Motor Credit Company (Lessor) and the State of New Jersey (Lesee) acting by and through the Department of Treasury, Division of Purchase and Property

Dear Mr. Quinn:

I have acted as counsel to Lessee with respect to the Master Lease Agreement described above (the lease) and various related matters, and in this capacity have reviewed the duplicate original or certified copy of the Lease and the Exhibits attached thereto, Equipment Schedules executed pursuant to the Lease, and the Escrow Agreement among Lessor, Lessee and (the escrow agent). Based upon the examination of these and such other documents as I deem relevant, it is my opinion that:

1. Lessee is the State of New Jersey (the State). 2. Lessee is authorized and has power under applicable law to enter into the Lease, the

equipment Schedule and the Escrow Agreement, and to carry out its obligations thereunder and the transactions contemplated thereby.

3. The Lease, the Equipment Schedule and the Escrow Agreement have been duly

authorized, executed and delivered by and on behalf of the Lessee, and are valid and binding contracts of Lessee enforceable in accordance with their terms, except to the extent limited by State and Federal Laws affecting remedies and by bankruptcy,

reorganization or other laws of general application relating to or affecting the enforcement or creditors' rights.

4. The authorization and execution of the Lease, the Equipment Schedule and the Escrow

Agreement, and all other proceedings of the Lessee relating to the transactions contemplated thereby have been performed in accordance with all applicable open meeting, public bidding and all other laws, rules and regulations of the State.

5. The execution of the Lease, the Equipment Schedule and the Escrow Agreement, and the

appropriation of moneys to pay the rental payments coming due thereunder do not and will not resulting the violation of any constitutional, statutory or other limitation relating to the manner, form or amount of indebtedness which may be incurred by Lessee.

6. There is not litigation, action, suit or proceeding pending or before any court,

administrative agency, arbitrator or governmental body, that challenges the organization, the lease, the Equipment Schedule or the Escrow Agreement; the proper authorization and/or execution of the Lease, the Equipment Schedule, the Escrow Agreement and other documents contemplated thereby; the fiscal year of Lessee; or the ability of Lesseee to otherwise perform its obligations under the Lease, the Equipment Schedule and the Escrow Agreement and the transactions contemplated thereby.

Sincerely yours, Attorney General of New Jersey By: Deputy Attorney General

Appendix 2

Questions and Answers

Appendix 2 The following questions are a result of a letter submitted to bidders requesting input in drafting a new RFP for the Equipment Master Lease Line of Credit #5. These questions were to provide comment, background or suggestions that will assist the State in improving the process in rebidding this requirement.

Vendor Questions/State Responses

1Q. The Request for Proposal should include a statement that the controlling document is the Master Lease and any addendums to the Master Lease, such as the equipment schedule. 1A. Vendors should refer to Section 5.1 of the new RFP “Precedence of Special

Terms and Conditions.” 2Q. The State should include a make whole provision on any prepayment.

2A. The State has eliminated its prepayment provision in the RFP. 3Q. The State should clarify and differentiate Section 11.1 of the Master Lease Agreement

dealing with assigning some of the leases as a private placement to a qualified institutional investor versus issuing the transaction as a public offering through a grantor/ trust or Certificates of Participation structure. 3A. The State has reviewed this structure in the last bid proposal and does not draw

a distinction between the two methods of assignment. 4Q. The State may wish to correct discrepancies between Section 3.7 of the bid and Section

11.1 of the Lease. 4A. The State does not see any discrepancy between Section 3.7 of the RFP and

Section 11.1 of the Master Lease Agreement. 5Q. The 10% limitation on assignment of Lessor’s interest in the Master Lease Agreement, as

contained in Section 11 under the Agreement is too restrictive. Under a proposed structure, 100% of a firm’s interest in the Master Lease would be assigned to a corporate trustee who in turn would issue privately placed Certificates of Participation, in minimum denominations of $100,000, to one or more institutional investors. 5A. The 10% limitation on assignment is a requirement placed on us by the

Treasurer’s Office and the Office of Public Finance and cannot be waived. 6Q. The State should utilize the Municipal Market Data (“MMD”) index, rather than the

Treasury index, or alternatively, allow each bidder to select its own index. 6A. The State is satisfied with its choice of indexes. From an equal footing

standpoint it would be much too difficult to evaluate bids if every vendor chose its own index.

7Q. Each take down under the State’s Master Lease Program should be in minimum

aggregate amounts of $1 million.

7A. The State does weekly payments based on invoices received from its using agencies. To date we have made 48 weekly payments totaling $36,339,288 so the average weekly payment has been $757,069. Refer to ML9.

8Q. The State should establish an internal funding mechanism, such as an intercept program,

in order to aggregate fundings. 8A. Fundings are currently aggregated on a weekly basis when they are forwarded

for payment to the Lessor. 9Q. The State should consider semi-annual payments.

9A. See 8A above. 10Q. The State should utilize the same payment date (i.e. March 15 and September 15)

regardless of the funding dates of each take down. 10A. For internal payment purposes and State fiscal years, the State’s payment dates

will remain June 15 and December 15 in all cases. 11Q. The State should allow the placement of the lease obligations into a Tender Option Bond

Program which would allow the sale of floating rate obligations wrapped by an affiliate guarantee, to the public markets. 11A. Based on Section 11.1 of the Master Lease Agreement, the Lessor may not

assign more than the 10% limitation. 12Q. A request has been made to the State for customary indemnification as Lessor in the Master Lease

Agreement for any and all claims, demands, suit actions, recoveries, judgments and costs and expenses in connection therewith on account of the loss of life, property, or injury or damage to the person, body, or property, of any person or persons whatsoever, which shall arise from or result directly or indirectly from the work and/or materials supplied under the Master Lease Agreement.

12A. According to current law, the State may not offer indemnification to vendors. 13Q. As a condition to each draw, it is requested that the State agrees to deliver an unqualified

opinion of bond counsel, stating that the interest portion of the lease payment is exempt from both Federal and State of New Jersey income taxes. 13A. The State provides a legal opinion by the Attorney General’s Office as part of

the closing documents. The State does not provide tax opinions. 14Q. If the State fails to appropriate for any equipment and/or draw under the terms of the

Lease Agreement, it will be a failure to appropriate on all leases. 14A. This “cross-default” requirement is unacceptable and runs contrary to Article

IV, “Lease Term” of the Master Lease Agreement where the State clearly separates each “Equipment Group.”

Appendix 3

Federal Reserve

Statistical Release

H.15 (519) Selected interest Rates

January 23, 2006

76

Appendix 4

List of Payments

80

Appendix 5

Escrow Agreement

Example

for: financial services: line of credit, equipment lease...

Documents