<br />IUNDING
<br />In the event, through no action initiated by Customer, its legislative body does not appropriate funds for the continuation of this Agreement for any
<br />fiscal year after the 1 st fiscal year, Customer may, at the beginning of the fiscal year for which its legislative body does not appropriate funds and upon
<br />thirty (30) days prior written notice to Xerox return to Xerox, at Customer's expense, the Equipment described in this Agreement and thereupon be
<br />released of its obligations to make all further lease payments to Xerox due thereafter, if Ii) the Equipment is returned to Xerox in good condition at a
<br />location designated by Xerox, (ii) the foregoing notice states the failure of the legislative body to appropriate the necessary funds as the reason for
<br />cancellation, and the notice is accompanied by payment of all amounts then due to Xerox under this Agreement. In the event the Customer returns the
<br />Equipment pursuant to the terms of this paragraph, Xerox shall retain all sums paid hereunder by Customer.
<br />25. CONVERSION TO RENTAL
<br />Should this Agreement be held by the Courts of the State in which Customer is located to be invalid or unenforceable, in whole or in part, the parties
<br />agree that the machines leased hereunder shall be deemed to have been installed on rental pursuant to the terms and conditions of the applicable Xerox
<br />State and Local Government Equipment Price List in effect at the time of the holding of the Court, and at Xerox' applicable State and local Govern-
<br />ment rental prices calculated at a monthly rate equal to the lowest annual monthly rate including copy usage charges, (sometimes called the Contract
<br />Period) set forth in such Price List for such machines. For the period prior to such holding, Xerox shall credit to the applicable rental plan monthly
<br />charges the amounts paid by Customer to Xerox pursuant to this Term Lease Agreement. Any excess credits shall be refunded to the Customer, and
<br />any deficiency shall be due to Xerox, but in no event shall any amount be due to Xerox in excess of funds appropriated.
<br />26. INCOME TAX INDEMNITY
<br />This Lease has been entered into on the basis that Xerox or any Assignee of Xerox shall claim that the interest paid hereunder is exempt from Federal
<br />income tax under Section 103(a)(1) of the Internal Revenue Code of 1954 as amended. Should the United States Government disallow, eliminate,
<br />reduce, recapture, or disqualify, in whole or in part, any benefits of such exemption as a result of any acts or omissions by Customer or as a result of
<br />the inapplicability of such section at the time this Lease is entered into because of the status of Customer, Customer shall then indemnify Xerox by pay-
<br />ment, at Xerox' election of either;
<br />A. Supplemental Payment to Xerox during the remaining period of the Lease Term in an amount necessary to permit Xerox to receive (on an after tax
<br />basis over the full term of the Lease) the same rate of return that Xerox would have realized had there not been a loss or disallowance of such
<br />benefits, together with the amount of any interest or penalty which may be assessed by the governmental authority with respect to such loss or
<br />disallowance; or
<br />B. A lump sum payable upon demand to Xerox which shall be equal to the amount necessary to permit Xerox to receive (on an after tax basis over the
<br />full term of the Lease) the same rate of return that Xerox would have realized had there not been a loss or disallowance of such benefits together
<br />with the amount of any interest or penalty which may be assessed by the governmental authority with respect to such loss or disallowance.
<br />Zl. SOFTWARE
<br />Xerox hereby grants to Customer, at the applicable charge (if any), the non-exclusive right to use the current standard Release of Xerox Operating
<br />System Software ("Software"). Xerox reserves the right to require implementation of subsequent standard Releases in order to be able to properly
<br />maintain Equipment. Customer acknowledges that such Software is composed of confidential data and knowhow which are either proprietary to
<br />Xerox or to a Xerox licensor. Customer agrees to treat all Software as proprietary and as such agrees: (i) not to reproduce, copy or duplicate more than
<br />two (2) copies of such Software without the prior written consent of Xerox, except in connection with Customer's use thereof in conjunction with use
<br />of Equipment, and (ii) not to cause or permit any Software, or any part thereof, to be disclosed to, or used by, any person or entity other than authorized
<br />officers, employees or agents of Customer. Customer agrees to advise each authorized person whp uses any Software to refrain from disclosing or
<br />delivering such Licensed Software, or any part thereof, to any other person or entity, except as provided herein.
<br />Each Software which Customer is granted the right to use in conjunction with a unit of Xerox Equipment is warranted to materially conform, when
<br />shipped to Customer, to its published specifications. Customer's sole and esclusive remedy for failure of Software to materially conform to its published
<br />specifications when shipped to Customer is for Xerox, within a reasonable time after written notice of such non-conformity is received by Xerox, to
<br />restore Software to material conformity with its published specifications. If Xerox is unable to restore Spftware to material conformity to published
<br />specifications, Xerox will accept the return of Software and Equipment in connection with which Customer was granted the right to use Software and
<br />refund to Customer the applicable Software license feels) (if any) previously paid to Xerox, together with minimum monthly Equipment lease charges
<br />previously paid Xerox, less reasonable rental value of such Equipment for the period of time such Equipment was installed at Customer's premises. If
<br />Xerox elects to refund Software fee(s), Customer shall promptly erase or destroy all copies of such Software. Customer must notify Xerox in writing of
<br />material non-conformity of Software within ninety (90) days after delivery of Software.
<br />Xarox specifically disclaims any Warranty that Licensed Software will meet Customer requirements or will operate in combinations chosen by
<br />Customer or operation of Software will be uninterrupted or error-free or that any Software defects will be corrected. Published specifications for Soft-
<br />ware, if any, may be updated by Xerox from time to time, and such updates may constitute a change in specifications.
<br />28. GENERAL
<br />A. Customer shall furnish as may be requested by Xerox either copies of its Annual Report for the preceding fiscal year or the office from which same
<br />may be obtained.
<br />B. Any provision of this Agreement prohibited by the law of any state shall be ineffective as to said State to the extent of such prohibition without in-
<br />be validating the remaining provisions of this Agreement. Texas.
<br />-. Except as otherwise provided hereinabove this Agreement will be governed and construed according to the domestic laws of the State of~*}f:~.
<br />D. Notice shall be effective if delivered or mailed by registered or certified mail, postage prepaid to Xerox as set forth on the face of this Agreement or
<br />at such address as Xerox may notify the Customer from time to time.
<br />E. This Agreement and the Xerox Price Lists as revised from time to time shall constitute the entire Agreement between the parties relating to the sub-
<br />ject matter hereof regardless of inconsistent or additional terms and conditions in Customer Purchase orders or other documents submitted to
<br />Xerox. This Agreement supersedes all other communications, representations or agreements, either oral or written, with respect to the subject
<br />matter hereof. There are no covenants, conditions or agreements between the parties except as set forth in this Agreement. This Agreement may
<br />.£ be amended only by a written instrument executed by both parties.
<br />29.CONFLICTS
<br />Should any discrepancies or conflicts arise between the lrovisions of this Agreement aJ
<br />those of the OWNER-CONTRACTOR AGREEMENT, the latter shal apply.
<br />~.: EXCEPT FOR INDEMNIFIED MATTERS, XEROX' LIABILITY FOR DIRECT DAMAGES ARISING FROM
<br /> XEROX' PERFORMANCE HEREUNDER IS LIMITED TO THE AMOUNTS PAID BY THE CUSTOMER UNDER
<br /> THIS AGREEMENT. SUBJECT TO A MAXIMUM OF $1 MILLION PER OCCURRENCE OR IN THE
<br /> AGGREGATE OF OCCuRRENCES XEROX SHALL INDEMNIFY AND HOLD THE CITY HARMLESS
<br /> FROM AND AGAINST ANY OR ALL LIABILITY, JUDGMENTS, COSTS AND EXPENSES (INCLUDING
<br /> REASONABLE ATTORNEYS' FEES) ARISING FROM INJURY TO PERSONS, INCLUDING DEATH, OR
<br /> DAMAGE TO TANGIBLE PERSONAL PROPERTY PROXIMATELY CAUSED BY THE NEGLIGENCE OR
<br /> MISCONDUCT OF XEROX, ITS AGENTS, OR EMPLOYEES, IN THE PERFORMANCE OF ITS OBLIGA-
<br /> TIONS HEREUNDER.
<br />
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