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<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 />