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R-84-658 - 12/13/1984RESOLUTION NO. 6,5 WHEREAS, the City desires to lease on an annual basis a copier and collator, and WHEREAS, International Business Machines (IBM) has submitted a proposal to provide the City the needed equipment on acceptable terms, and WHEREAS, the Council wishes to enter into an agreement with IBM, Now Therefore BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS, THAT The Mayor of the City of Round Rock, Texas, is hereby authorized and directed to execute on behalf of the City, an agreement with IBM to lease a copier and collator, a copy of such agreement being attached hereto and incorporated herein for all purposes. RESOLVED this ATTEST: AI/14 fb ki/ktoG NE LAND, City Secretary MIKE ROBINSON, Mayor City of Round Rock, Texas THIS SET IS COMPOSED OF THREE SECTIONS SECTION1 SEPARATE SECTIONS 1 AND2 FROM SECTION 3 4 THE CUSTOMER NEED ONLY SIGN ONCE, PROVIDED THE CARBON TRANSFER OF 2 AFTER TYPING EACH SECTION, DETACH CARBONS FROM SECTIONS 1 AND 2 ONLY THE SIGNATURE APPEARS LEGIBLY ON THE REMAINING COPIES 3 LEAVE CARBONS IN SECTION3 INTACT UNTIL ALL SIGNATURES AFFIXED CUSTOMERS NAME MUST AGREE, SECTIONS 1 AND International Business Machines Corporation Armonk, New York 10504 Name and Address of Customer. City of Round Rock Finance Dept. 205 East Bain Round Rock, Texas 78664 IBM Branch Office Address: One Texas Center 505 Barton Springs 4th Floor Austin, TExas 78704 Installment Payment Agreement (State and Local Government) International Business Machines Corporation (IBM) and the Customer agree that this Installment Payment Agreement supplements and amends the referenced Agreement for Purchase of IBM Machines and its referenced Supplement with respect to the following IBM machines, features, model upgrades, machine elements and/or accessories (hereinafter called "Machines" unless the context requires individual reference). IBM Plant Order or Purchase Machine Serial Model or Price $ Qty Type Number ( -) Feature Description (Net Unit Price) Amount $ 1 6806 001 Model 40 Copier 1 6852 004 Collator (1 An "*" indicates Machine Serial Number. Statement of Transaction Reference Agreement No: Reference Supplement Dated: Agreement No.: IBM Branch Office No.: G6K Customer No.: 7747811 9825.00 9825.00 1650,00 1650.00 TOTAL: $ 11,475.00 1. Cash Price (if this were a cash sale) $ 2. Trade -In Allowance Credit (from IBM trade -in agreement) $ 4 3. Cash Down Payment $ -0 4. Total Down Payment (Sum of Items 2 and 3) $ - 0 - 11,475.00 S. Unpaid Balance of Cash Price (Item 1 minus Item 4) $ 11,475.00 6. State and Local Taxes, if applicable $ -0- 7. Amount to be Financed (Sum of Items 5 and 6) $ 11 00 8. FINANCE CHARGE (Time Price Differential on Item 7). Finance Charge consists of interest at an ANNUAL PERCENTAGE RATE of 10.00 o/ $ 3,032.40 9. Tax on Finance Charge, if applicable, (payable in first installment) 10. Total Amount of Remaining Payments (Sum of Items 7, 8 and 9) 11. Total Time Sale Price (Sum of Items 4 and 10) 2128- 2791-09 (Rey. 01/84) U/.1 025 $ -o- $ 14.507.00 $ 14,507.00 Page 1 of 4 1 Payments The Customer agrees to pay the Cash Down Payment, if any, (a) upon the Date of Installation of the Machines or (b) with respect to installed Machines, on the Effective Date of Purchase, and agrees to pay the Total Amount of Remaining Payments in consecutive Periodic Payments, including Finance Charge, for the Fiscal Periods as set forth below in either Payment Plan I or Payment Plan II. Fiscal Period 1 2 3 4 5 6 Periodic Payment (Total of Monthly Fiscal Payments for Period Fiscal Penod) 1 1.2 243. k 2 1Z .2.4-3 FO 3 12,- 24-3 -Fa 4 1 Z 2, kF3. ea 5 1 2 2, Y3, YC) 6 The Periodic Payment for Period 1, which includes the Tax on Finance Charge, if applicable, is due on the first business day of the month following the Date of Installation or the Effective Date of Purchase, and the Periodic Pay- ments for Periods 2 through are due on the first business day of each succeeding Fiscal Period. If Payment Plan I has been chosen, payments must be made in full on the due dates. If Payment Plan 11 has been chosen, payments must be made in equal consecutive monthly installments, except that the first installment will include the Tax on Finance Charge, if applicable, beginning on the due dates and continuing on the corresponding day of each month of each Fiscal Period until fully paid. Payments include Finance Charge in the appropriate amount in- dicated above. The Customer having been offered the choice of pur- chasing at the foregoing Cash Price (plus applicable State and Local Taxes) or at the Total Time Sale Price has elected to purchase at such Total Time Sale Price. Z120. 2781-03 (Rev. 07/84) U/M 025 PAYMENT PLAN 1 Periodic Payment (Annual) (Biennial) PAYMENT PLAN 11 Monthly Payment Finance Charge (Included in Payment) Total Finance Charge for Fiscal Penod (Included in Payments) The Customer may, at any time, pay in advance the full amount due hereunder and the Finance Charge will be adjusted by IBM to reflect the shorter payment period. All remittances are to be made to the IBM Branch Office address listed herein unless otherwise requested by IBM. Assignments This Installment Payment Agreement is not assignable by the Customer, nor may the Customer sell, transfer, sub- stantially modify, relocate or dispose of any or all of the Machines without prior written permission of IBM. In no event may the Machines be relocated outside the United States. Any attempted assignment or transfer by the Customer of any of the rights, duties or obligations of this Installment Payment Agreement is void. Customer's Covenants The Customer covenants and agrees that (a) it will not create, assume, or voluntarily suffer to exist, without giving IBM at least 15 calendar days' prior written notice, any mortgage, pledge, encumbrance, security interest, lien or charge of any kind upon any or all of the Machines; (b) it will keep the Machines in good repair and operating condition; (c) it will promptly pay all taxes, interest and other charges when levied or assessed upon the Machines or their operation or use, or upon IBM, exclusive of taxes based on IBM's net income, in connection with this Installment Payment Agreement; (d) it will promptly satisfy all liens against the Machines; and (e) there are no mortgages, pledges, encumbrances, security interests, liens or charges of any kind by any party other than IBM or assigns upon the machines on which features, model upgrades, machine elements or accessories will be installed subject to this Installment Payment Agreement. Insurance The Customer further agrees to procure and maintain fire Insurance with extended coverage against loss, theft, damage to or destruction of the Machines for the full insurable value thereof for the duration of this Installment Payment Agreement, the policy for such insurance being endorsed to show loss payable to IBM and assigns as respective interests may appear. Upon request, a certificate of such insurance will be furnished to IBM or assigns. Any proceeds received directly by IBM under such insurance shall be credited to the payment required from the Custo- mer pursuant to the Section entitled "Casualty Occur- rences." Casualty Occurrences A Casualty Occurrence shall be deemed to exist if any of the Machines shall be lost, stolen, Irreparably damaged or destroyed or otherwise rendered permanently unfit for use from any cause whatsoever prior to the payment in full of the Total Time Sale Price. To the extent permitted by law, the Customer shall promptly pay to IBM a sum equal to the aggregate Casualty Value of such Machines. The Casualty Value of each Machine suffering a Casualty Occurrence shall be the sum of the unpaid balances of the State and Local Taxes, Unpaid Balance of Cash Price and Finance Charge at the time of such Casualty Occurrence and attributable to such Machine.The Finance Charge shall be adjusted by IBM to reflect the shorter payment period. Any money so paid shall be applied by IBM to reduce installments thereafter falling due so that such installments represent only the payments due for the remaining Ma- Page 2 ot 4 chines. Any excess insurance payments received by IBM shall be credited to the Customer. Events of Default - Any one or more of the following are Events of Default: (a) the Customer fails to pay when due any amount required to be paid by the Customer hereunder and such failure shall continue for a period of seven days after the due date, except as provided in the Section entitled "Funding"; (b) the Customer fails to procure and maintain insurance as required in this Installment Payment Agreement; (c) the Customer fails to perform any other provisions hereunder or violates any of the covenants or agreements made by the Customer hereunder, and such failure or breach shall continue for a period of 15 days after written notice is received by the Customer from IBM; or (d) any insolvency proceedings of any character, voluntary or involuntary, shall be instituted by or against the Customer. Any failure of IBM to require strict performance by the Customer or any waiver by IBM of any provision of this Installment Payment Agreement shall not be construed as a consent or waiver of any other breach of the same or of any other provision. Remedies -" If an Event of Default shall have occurred and be continuing, IBM or assigns may, to the extent permitted by law, (a) recover from the Customer any and all amounts then due and to be become due; (b) take possession of any or all of the Machines, wherever located, without demand or notice and without any court order or other process of law, or render them unusable, and retain all prior payments as partial compensation for their use and depreciation; (c) require the Customer to assemble the Machines and make them available to IBM, freight prepaid, at any place in the continental United States specified by IBM; and /or (d) incur reasonable attorney's fees and legal expenses in exercising any of its rights and remedies upon default which the Customer hereby agrees to pay. Upon repossession of such Machines, IBM may sell, lease or otherwise dispose of any or all of the Machines in a commercially reasonable manner, with or without notice and by public or private proceedings, and apply the net proceeds thereof towards the amounts due under this Installment Payment Agree- ment after deducting the reasonable expenses of retaking, holding and preparing for such disposition and deducting Security Interest and Location of Machines To secure the payment of the Total Time Sale Price, IBM reserves a purchase money security interest in each of the Machines, and the Customer hereby grants a security interest in any substitutions, replacements, accessions, and additions thereto and the proceeds thereof. Such interest shall be satisfied by payment in full of the Total Time Sale Price. A copy of this Installment Payment Agreement may be filed with appropriate state and local authorities, at any time after signature by the Customer, as a financing reasonable attorney's fees and legal expenses. IBM will pay to the Customer any portion of the net proceeds in excess of the unpaid Total Time Sale Price. In the event IBM repossesses and removes a feature, model upgrade, machine element or accessory, it shall be the Customer's responsibility to restore any remaining information processing equipment to good working order. The Customer agrees that IBM shall have no liability for damages caused by the repossession of such a feature, model upgrade, machine element or accessory or by the Customer's failure to fulfill such responsibilities. Further, IBM shall have no obligation to reimburse the Customer, user or any other secured party for the cost of repair resulting from such removal. IBM may pursue any other remedy available at law or in equity, including, but not limited to, seeking damages, specific performance and an injunction. No right or remedy is exclusive of any other provided herein or permitted by law or equity. All such rights and remedies shall be cumulative and may be enforced concurrently or individ- ually from time to time. Funding Since the Customer intends to request the appropriation of funds periodically to be paid for the Machines, if funds are not appropriated for the Customer for such Periodic Payment for any future Fiscal Period, the Customer will not be obligated to pay the remainder of the Total Time Sale Price due beyond the end of the then current Fiscal Period. Such event will not constitute an Event of Default. The Customer agrees to notify IBM in writing of such nonappro- priation at the earliest possible time. In the event that funds are not appropriated as provided above and the Customer is unable to make further pay- ments due under this Installment Payment Agreement beyond the end of the then current Fiscal Period, IBM will, within a reasonable time after the end of such Period, enter and take the Machines from the Customer's premises and will retain all sums previously paid by the Customer to IBM as partial compensation for machine use and depreciation; provided, however that upon the Customer's request, the Customer may, prior to such repossession, retain the Machines during a reasonable period agreed to by IBM at monthly charge designated by IBM, beginning on the first day following the last Fiscal Period for which payment has been made hereunder. Page 3 of 4 unenforceable, the parties agree that the Machines shall be deemed to have been installed under IBM's State and Local Government Lease Plan pursuant to the terms and condi- tions of IBM's applicable agreement and /or amendment at IBM's applicable Lease Plan Monthly Charges, commenc- ing with the Date of Installation or the Effective Date of Purchase of the Machines. For the period prior to such holding, IBM shall credit to the applicable Lease Plan Monthly Charges the amounts paid by the Customer to IBM under this Installment Payment Agreement and amounts oaid by the Customer for maintenance_ nrnnerty taYac and Security interest and Location of Machines To secure the payment of the Total Time Sale Price, IBM reserves a purchase money security interest in each of the Machines, and the Customer hereby grants a security Interest In any substitutions, replacements, accessions, and additions thereto and the proceeds thereof. Such interest shall be satisfied by payment in full of the Total Time Sale Price. A copy of this Installment Payment Agreement may be filed with appropriate state and local authorities, at any time after signature by the Customer, as a financing statement in order to perfect IBM's security interest. Such filing does not constitute acceptance of this Installment Payment Agreement by IBM. The Customer also shall execute from time to time, alone or with IBM, any financing statements or other documents and do such other act or acts considered by IBM to be necessary or desirable to perfect or protect the security interests hereby created The Machines shall remain personal property, not become fixtures to real property, and be kept at: 2 05 EP "9711/N (Street address) / 9 AO CA ?7ZAVU ?X (City) (County) (State) where IBM may inspect them at any reasonable time. General If the Net Unit Price for any Machine is adjusted as provided in the referenced Agreement, or the trade -in allowance for any trade -in equipment is adjusted as pro- vided in an applicable IBM trade -in agreement, Items No. 1 through 11 in the Statement of Transaction and the Payments herein agreed to be paid shall be adjusted, and this Installment Payment Agreement shall be deemed to be amended accordingly. The terms and conditions of this Installment Payment Agreement shall prevail notwithstanding any variance with the terms and conditions of the referenced Agreement. Should this Installment Payment Agreement and /or the referenced Agreement be held by the courts to be invalid or Received by IBM at ! (/1r7.--1 By Name (Type or Pnnt) By Name (Type or Print) Branch Office Name /Number Managers Signature Cl./27 Authonzed Sgnature r (ire_ oJFfI Accepted by: International Business Machines Corporation Date unenforceable, the parties agree that the Machines shall be deemed to have been installed under IBM's State and Local Government Lease Plan pursuant to the terms and condi- tions of IBM's applicable agreement and /or amendment at IBM's applicable Lease Plan Monthly Charges, commenc- ing with the Date of Installation or the Effective Date of Purchase of the Machines. For the period prior to such holding, IBM shall credit to the applicable Lease Plan Monthly Charges the amounts paid by the Customer to IBM under this Installment Payment Agreement and amounts paid by the Customer for maintenance, property taxes and insurance. Any excess credits will be refunded to the Customer, and any deficiency shall be due to IBM; but in no event shall any amount be due to IBM in excess of funds appropriated. In the event that the affected Machines are not available from IBM under a lease or rental agreement, at the time of such holding, the Customer and IBM will agree upon a fair and equitable Lease Plan Monthly Charge for the period prior to and following such holding and, other- wise, the provisions of this Section shall apply. If any provision or provisions of this Installment Payment Agreement shall be held to be invalid, illegal or unenforce- able, and the preceding paragraph does not apply. the validity, legality and enforceability of the remaining provi- sions shall not in any way be affected or impaired thereby. THE CUSTOMER ACKNOWLEDGES THAT THE CUSTO- MER HAS READ THIS AGREEMENT, UNDERSTANDS IT, AGREES TO BE BOUND BY ITS TERMS AND CON- DITIONS, AND BY THE CUSTOMER'S SIGNATURE BELOW, ACKNOWLEDGES THAT THE CUSTOMER IS LEGALLY AUTHORIZED TO ENTER INTO THIS AGREE- MENT. FURTHER, THE CUSTOMER AGREES THAT THIS INSTALLMENT PAYMENT AGREEMENT, THE REFERENCED AGREEMENT AND SUPPLEMENT AND ANY APPLICABLE IBM TRADE -IN AGREEMENT CON- STITUTE A SINGLE AGREEMENT AND THE COM- PLETE AND EXCLUSIVE STATEMENT OF THE AGREE- MENT BETWEEN THE CUSTOMER AND IBM, WHICH SUPERSEDES ALL PROPOSALS OR PRIOR AGREE- MENTS, ORAL OR WRITTEN, AND ALL OTHER COM- MUNICATIONS BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF. By _ Date Name (Type or Pnnt) 1 1 C / Customer Page 3of4 Authorized Signature PLEASE PRESS FIRMLY WITH BALL POINT PEN ON A HARD SURFACE FOR MAXIMUM LEGIBILITY. 2120-2791 -03 (Retr. 07/54) UM 025 Date 1897 -4 City of Round Rock Finance Dept 205 East Main Street Round Rock, Texas 78664 Z120.2892 .01 (U/MO25) 7/84 THIS SET IS COMPOSED OF TWO SECTIONS BEFORE TYPING SEPARATE SECTION 1 (SHORT SHEETS) FROM SECTION 2 PRICES AND PAYMENT The Purchase Price for each Machine will be stated in the Sup- plement and does not include any applicable taxes or destination charges. Payment in full for each on -order Machine will be due on its Date of Installation and, for each installed Machine, on its Effec- tive Date of Purchase, unless otherwise provided in an IBM install - ment agreement. TAXES In addition to the pnces stated in the Supplement, the Customer agrees to pay amounts equal to any taxes resulting from this Agreement, or any activities hereunder, exclusive of taxes based on IBM'S net income. The Customer shall bear any personal prop- erty taxes assessable on on -order Machines on and after delivery to the carner or, for installed Machines, on and after the Effective Date of Purchase DESTINATION CHARGES Destination charges for each on -order Machine from a desig- nated IBM location, and any rigging charges, will be paid by the Cus- tomer in accordance with IBM'S then current shipping and billing practices. By putnonz Sgnature By Tom NcCultou International Business Machines Corporation Agreement for Purchase of IBM Machines Name and Address of Customer. IBM Branch Office Address: AgreementNo.: 505 Barton Springs IBM Branch Office NO.: One Texas Center 4th Floor Round Rock, Texas 78664 Customer No.: G6K Page 1 of 4 Armonk, New York 10504 7747811 SECTION 1 International Business Machines Corporation (IBM) and the Customer agree that the following terms and conditions will apply to any Cus- tomer order accepted by IBM for the purchase under this Agreement of IBM machines, features, model conversions, machine elements or accessories or of non -IBM equipment. IBM will 1) sell machines to the Customer, 2) furnish, as available, programming and programming service, 3) sell features and model conversions to the Customer for installation or reinstallation on an IBM machine designated by type and serial number, 4) sell machine elements, accessories and non -IBM equipment to the Customer, and 5) provide warranty service, as applicable. The term "Machines" refers to IBM machines and /or their features, model conversions, machine elements and accessories unless the context requires individual reference. The term "Machines" also applies to non -IBM equipment except as otherwise provided in the Section entitled "Purchase of Non -IBM Equipment" Machines are those on -order to be installed, or which are installed under an IBM lease or rental agreement with the Customer Features include additions and removals Model conversions include upgrades and downgrades between models and between machine types. The term "programming" shall mean such programming as IBM may make generally available, without separate charge, for machines of the types ordered by the Customer under this Agreement. The term "programming service" shall mean such service as IBM may make generally available, without separate charge, in connection with programming. IBM will furnish such program- ming, as requested by the Customer, and will determine the programming services available and their duration. The Customer agrees to accept Machines, programming, programming service and warranty service under the terms and conditions of this Agreement The Customer further agrees, with respect to Machines and programming, to accept responsibility for 1) their selection to achieve the Customer's intended results, 2) their use, and 3) the results obtained therefrom. The Customer also has the responsibility for the selection and use of, and results obtained from, any other equipment, programs or services, acquired outside this Agreement, used with the Machines and programming. Individual Machines become subject to this Agreement when either the Customer's wntten order for their purchase, or the Customer's order for their purchase under another ordenng procedure designated by IBM, is accepted by IBM. Such order to purchase an on -order Machine must be received by IBM on or before its Date of Installation. IBM will accept an order by providing to the Customer a Supplement to this Agreement (Supplement), or other documentation designated by IBM, confirming the terms applicable to the Machine. Installation of an on -order Machine, as defined in the Section entitled "Installation," or payment of the Purchase Price of an on -order or installed Machine (or payment of the down payment or the first installment if subject to an IBM installment agreement), whichever first occurs following the Customer's receipt of the Supplement, will constitute the Customer's acceptance of such terms. TITLE Title passes to the Customer for each on -order Machine on its date of shipment from IBM or on the date IBM receives the Custom- er's order for its purchase, whichever is later, and, for each instal- led Machine, on its Effective Date of Purchase. SECURITY INTEREST IBM reserves a purchase money secunty interest in each Machine. This interest will be satisfied by payment in full hereunder or under an IBM installment agreement and, in addition, when appli- cable, by the return to IBM by the Customer of parts in respect to feature additions or model conversions that involve the removal of parts which become the property of IBM. The Customer agrees to sign appropriate documents to permit IBM to perfect IBM's security interest. SHIPMENT IBM will confirm, and amend as necessary, the Estimated Ship- ment Date of each on -order Machine. Prior to shipment, IBM will make reasonable accommodation to a Customer requested delay, and, If agreed to by IBM and the Customer, changes may be made in the configuration of Machines. _ THE ADDITIONAL TEAMS AND CONDITIONS ON PAGES 2 THROUGH 4 ARE PART OF THIS AGREEMENT. THE CUSTOMER ACKNOWLEDGES THAT THE CUSTOMER HAS READ THIS AGREEMENT, UNDERSTANDS IT, AND AGREES TO BE BOUND BY ITS TERMS AND CONDITIONS. FURTHER, THE CUSTOMER AGREES THAT THIS AGREEMENT AND ANY OTHER APPLICA- BLE IBM AGREEMENTS, AMENDMENTS, SUPPLEMENTS AND CERTIFICATIONS, INCLUDING THOSE ACCEPTED IN THE FU- TURE, REFERENCING THIS AGREEMENT OR EXPRESSLY MADE A PART HEREOF, WILL BE THE COMPLETE AND EXCLU- SIVE STATEMENT OF THE AGREEMENT BETWEEN THE PARTIES, SUPERSEDING ALL PROPOSALS OR PRIOR AGREE- MENTS, ORAL OR WRITTEN, AND ALL OTHER COMMUNICATIONS BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER HEREIN. Accepted by. City of Round Rock International Business Machines Corporation Customer Aulhonzed Signature , - Name (Type or Print) Date Name (Type or Print) . Dale ORIGINAL RISK OF LOSS OR DAMAGE During the period on -order Machines are in transit or In posses- sion of the Customer, up to and including the Date of Installation, IBM and its insurers, if any, relieve the Customer of responsibility for all risk of loss of or damage to the Machines except for loss or damage caused by nudear reaction, nuclear radiation or radioac- tive contamination for which the Customer is legally liable. There- after, all risk of loss of or damage to such Machines shall be on the Customer. All risk of loss of or damage to installed Machines shall be on the Customer after the Effective Date of Purchase. PRICE PROTECTION PERIOD The Purchase Price for each on -order Machine shall be IBM's generally available single unit price and shall be subject to all price increases, except that increases effective during the three -month period immediately prior to the date of Machine shipment shall not apply if the Customer's order was received by IBM prior to the date of announcement of the price increase. If a price increase applies to any such Machine, the Customer may cancel the order upon written notice to IBM within one month of notification of the price in- crease; otherwise, the higher price shall be affective. If IBM's generally available single unit price for any on-order Machine upon its Date of Installation shall be lower than the Pur- chase Price for such Machine stated in the Supplement, the Cus- tomer shall have the beneftof such lower price. The term "IBM's generally available single unit price" does not in- clude prices for sales of Machines under terms and conditions other than those in this Agreement. The Purchase Price for each installed Machine stated in the Supplement is subject to change up to and including its Effective Date of Purchase, subject to any limitations described in any other applicable IBM lease or rental agreement. INSTALLATION Each Machine will be installed as specified by IBM. The Customer agrees to provide a suitable environment for the Machines as specified by IBM, and, except as otherwise specified by IBM, to fur- nish all labor required for unpacking and placing each on-order Machine in the desired location. Packaging matenals, if any, shall becomethe property of the Customer. Features and model conversions will be installed on the serial - numbered machine designated in the Supplement. The Customer represents that the Customer is the owner of the machine on which any feature or model conversion will be instated or, if not the owner, has the authority from the owner to order the feature or model conversion and to have it installed on the owner's machine. Installation by IBM IBM will install machines, features and model conversions which are not identified as Customer Set -Up. The Date of Installation for a machine will be the day (Monday through Friday) following the day that 1) the machine is installed under this Agreement or under the applicable IBM lease or rental agreement, or 2) an on-order machine is available for delivery or delivered to the Customer and the Customer fails to provide a suit- able installation environment or delays installation. The Date of Installation fora feature or model conversion will be the day (Monday through Friday) following the day that the feature or model conversion is installed under this Agreement or under the applicable IBM lease or rental agreement. The installation of some features and model conversions invol- ves the removal of parts which become the property of IBM. IBM will specify in the Supplement if removed parts become the property of IBM. The Customer will provide IBM access to the machine to com- mence installing each such feature or model conversion as soon as possible after its shipment from IBM but in no event more than one month following the later of its Estimated Shipment Date or ac- tual date of shipment, unless a shorter period is specified in the Supplement. In the event of failure by the Customer to provide IBM access to the machine within the specified period, the Customer shall retum the feature or model conversion to IBM with shipping charges prepaid, unless otherwise agreed to by IBM. If the Customer delays Installation of a feature or model conver- sion (other than one which involves the removal of parts which be- come the property of IBM) more than one month from the later of its Estimated Shipment Date or actual date of shipment from IBM, its Date of Installation will be considered to be the day (Monday through Friday) one month following such date of shipment. IBM will notify the Customer of the Date of Installation of each on-order machine, feature or model conversion. Customer Set - Up Each machine, feature or model conversion identified by IBM as Customer Set -Up (CSU), and all machine elements and acces- sories, will be set up by the Customer in accordance with the in- structions fumished by IBM. The Date of Installation will be the day (Monday through Friday) following the day the machine, feature, model conversion, machine element or accessory is considered to be installed under this Agreement or under the applicable IBM lease or rental agree- ment. An on CSU machine will be considered to be installed on the last day of the CSU allowance period specified by IBM for such machine. The CSU allowance period, which does not include Saturdays or Sundays, commences on the day (Monday through Friday) following the date of receipt of the machine at the Custom- er's premises. However, when a CSU machine is delivered in con- junction with, and for attachment to, a non -CSU machine delivered from IBM, such CSU machine will be considered to be installed as determined in this paragraph or on the date such non -CSU machine is installed, whichever is later. An on -order CSU feature or model conversion, machine ele- ment or accessory will be considered to be installed one month fol- lowing the later of its Estimated Shipment Date or Its actual date of shipment from IBM. PURCHASE OF INSTALLED MACHINES The Purchase Pnce stated in the Supplement is exclusive of any charges which are due or may become due under the applicable IBM lease or rental agreement. The Effective Date of Purchase for installed Machines shall be the later of the first day of the Quotation Month or the day on which the payment required under the Section entitled "Prices and Payment" is received by IBM at its IBM Branch Office or Remit to Address shown In the Supplement, provided such receipt is not later than the last day of the Quotation Month. The Machines will be terminated under the applicable IBM lease or rental agreement as of the day immediately preceding the Effec- tive Date of Purchase. WARRANTIES Machines purchased under this Agreement will be 1) newly manufactured by or for ism from new and serviceable used parts which are equivalent to new in performance in these Machines, 2) assembled by or for IBM from serviceable used parts, 3) Machines which have been previously installed, or 4) Machines which are presently Installed with the Customer. IBM warrants that on the Date of Installation each on-order Machine will be in good working order and will conform to IBM's offi- cial published specifications which are available upon request. The Warranty Penod for each Machine, specified in the Supple- ment, commences on its Date of Installation as defined in the Sec- tion entitled "Installation." INSTALLED MACHINES PURCHASED AFTER THEIR WARRANTY PERIOD HAS EXPIRED ARE SOLD ON AN "AS IS" BASIS. Service and Parts Warranty Commenting on the Date of Installation of each on -order machine, model upgrade and feature addition, or on the Effective Date of Purchase of each installed machine, model upgrade and feature addition, and continuing for the duration or remainder, if any, of the Warranty Period, IBM agrees to provide the availability of warranty service, at no additional charge except as set forth in this Section or in the Section entitled "Travel Expense," to keep the machines, model upgrades and feature additions in, or restore them to, good working order. This warranty service includes pre- ventive maintenance based upon the specific needs of individual machines, model upgrades and feature additions as determined by IBM and on -call remedial maintenance. Such warranty service will include lubrication, adjustments and replacement of parts deemed necessary by IBM. Parts, which may be used parts, will be furnished on an exchange basis, and the replaced parts become the property of IBM. Warranty service will be available at no additional charge during the hours specified in the Supplement Outside such hours, war- ranty service, if requested by the Customer and provided by IBM, will be subject to charge for travel expense plus travel, waiting and service time at IBM's then applicable hourly service rates and mini- mum charges; however, there will be no additional charge for parts. Warranty service under this Agreement does not assure uninter- rupted operation of the Machines. IBM may, at its option, store on Page 2 of 4 SECTION 2 the Customers premises maintenance equipment and/or parts a) failure to continually provide a suitable environment pre- access to tre machine within the specified penod, the Customer shall retum the feature or model conversion to BM with shipping charges prepaid. unless otherwise agreed to by IBM. If the Customer delays installation of a feature or model conver- sion (other than one which involves the removal of parts which be- come the property of IBM) more than one month from the later of its Estimated Shipment Date or actual date of shipment from IBM, its Date of Installation will be considered to be the day (Monday through Friday) one month following such date of shipment IBM will notify the Customer of the Date of Installation of each on -order machine, feature or model conversion. - the Customer's premises maintenance equipment and/or parts that IBM deems necessary to fulfill this warranty. During the Warranty Period, engineering changes determined applicable by IBM will be controlled and installed by IBM on the Machines. The Customer may, by providing notice subject to writ- ten confirmation by IBM, elect to have only mandatory changes, as determined by IBM, installed on the Machines. IBM shall have full, free and safe access to the Machines to pro- vide service thereon. The Customer shall promptly Inform IBM of any change in the Machines' location during the Warranty Period. If the Warranty Period expires on a Friday or Saturday, it will be extended so that the last day of such Warranty Period will be on the following Sunday. Programming IBM warrants that, when shipped to the Customer, programming designated by IBM for use with a Machine and for which program- ming services are available will conform to IsM's official published specifications which are available upon request. IBM does not warrant that functions contained in programming will operate in the combinations which may be selected for use by the Customer or will meet the Customer's requirements. ALL. OTHER PROGRAMMING IS DISTRIBUTED ON AN AS IS" BASIS. Additional Provisions for Features and Model Conversions IBM's warranty for each feature addition or model upgrade re- quires that the machine on which it is installed is at the then cur- rent engineering- change level, is the specific serial- numbered machine for which it was ordered and has been modified only with changes obtained from IBM specifically for that serial -num- bered machine. if these conditions are not met, rem will attempt to install non -CSU feature additions and model upgrades on the machine, and, if such attempt results in an incorrectly functioning machine, upon Customer request and at IBM's then applicable hourly service rates and minimum charges, parts and material prices and travel expense, IBM will remove the features and/or model upgrades and restore the machine to its prior condition- If such features and model upgrades did not involve the removal of parts which became the property of IBM, such features and model upgrades remain the property of the Customer. If such features and model upgrades involved the removal of parts which be- came the property of IBM, such features and model upgrades be- come the property of IBM and the restored parts become the properly of the Customer. For a feature removal, model downgrade or reinstallation of a previously purchased feature or model conversion, a three - month parts warranty will apply to additional parts, if any, sup- plied by IBM. Additional Provisions for Machine Elements and Accessories Machine elements and accessories have a three -month War- ranty Period unless otherwise specified by ism. During the War- ranty Period, the Customer will remove any defective or failing machine element or accessory and ship it prepaid to the desig- nated IBM location. IBM, at its option, will repair or replace such macnine element or accessory and ship it to the Customer with- out charge. Additional Provisions for Machines Containing Funds The Customer is responsible for removing, controlling and re- placing or reloading funds contained in the Machines. IBM will service Machines containing funds only when the cash container cannot be opened prior to repair by IBM, in which case the Cus- tomer will remove the funds as soon as the container has been opened. Services for Additional Charge During the Warranty Period The services descnbed in this Section are not warranty ser- vices. However, unless such services are provided under another written agreement between the Customer and IeM, dur- ing the Warranty Period the following services, if available, will be provided by IBM under this Agreement at IBM's then applicable hourly service rates and minimum charges, including travel and waiting time, parts and matenal prices and travel expense: 1) Repair of Machine damage, replacement of maintenance parts or Increase in service time caused by — Page 3 of 4 furnished on an exchange basis, and the replaced parts become the property of IBM. Warranty service will be available at no additional charge during the hours specified in the Supplement Outside such hours, war- service, if requested by the Customer and provided by IBM, will be subject to charge for travel expense plus travel. waiting and service time at IBM's then applicable hourly service rates and mini- mum charges;, however, there will be no additional charge for Parts- rrantyservieeunderthisAgreementdoesnotassure uninter- rupted operation or the Machines. IBM may, at its option, store on Page2of4 - a) failure to continually provide a suitable environment pre- scribed by rem Including adequate space, electrical power, air conditioning and humidity control; b) neglect; misuse, including use of the Machines for pur- poses other than for which designed; c) accident; disaster, including water, wind and lightning; transportation; vandalism or burglary; d) alterations, including any deviation from IBM's Machine de- sign; e) attachments, including any interconnection to the Machine of non -IBM equipment and devices not under an IBM mainte- nance agreement; f) Machines, except those owned by IBM, under warranty from IoM, or under an IBM maintenance agreement; and g) model conversions or installation or removal of rem features performed by other than IBM. except that this subsection (g) will apply only during the three months subsequent to such Machine modification; 2) Repair of Machine damage, replacement of maintenance parts (due to other than normal wear) or repetitive service calls caused by the use of supplies; 3) Inspection of altered Machines and inspection of machines converted from one IBM model or machine type to another or on which an IBM feature is installed or removed when such ac- tivity was performed by other than IeM; 4) Replacement or addition of parts and increase in service time, associated with the Installation by IBM of an engineering change, required due to model conversions or installation or removal of IBM features performed by other than IBM; 5) Rearrangement or relocation of Machines and provision of necessary materials; 6) Replacement of a part not fumished for the Machine by IBM with a directly Interchangeable IBM maintenance part, and any increase in service time associated with such activity, except that IBM will not replace any part which is included in an altera- tion; and 7) Repair of a Machine caused by non-rem representatives per- forming maintenance or repair of such Machine. Exclusions The warranties under this Agreement are in lieu of any conflict- ing statement of warranty contained in a Machine shipment. The wai ranties under this Agreement do not include 1) furnishing supplies, painting or refinishing the Machines or fumishing mate- rial therefor, 2) electrical work external to the Machines, 3 ) instal- lation, maintenance or removal of alterations or attachments to the Machines, and 4) any service which is impractical for rem to render because of alterations in, or attachments to, the Machines. IBM does not warrant that the operation of Machines or prog- ramming will be uninterrupted or error free or that all program- ming errors will be corrected. THE FOREGOING WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. OTHER PRODUCTS AND SERVICES Following the Warranty Period, IBM will provide, upon request and at IBM's charges and terms then generally in effect, mainte- nance service and maintenance parts for the Machines and programming services for programming as long as such services and parts are generally available. Unless such activities are pro- vided under another written agreement between the Customer and IBM, they shall be subject to the applicable terms and condi- tions of this Agreement. In addition, IBM offers other products and services at separate charges under applicable written agreements. The Customer may contract with IBM for such other products and services, as available, but only under a written agreement between the par- ties. TRAVEL EXPENSE Except as provided in the Section entitled "Warranties," there will be no charge for travel expense associated with warranty service or programming service except that actual travel ex- pense will be charged when the site at which the Machine Is Iocateo Is normally Inaccessible by both private automobile and scheduled public transportation. SECTION 2 ORIGINAL ENGINEERING CHANGES IBM will furnish, upon request, and at tent's pnces then gener- ally in effect, such engineering changes as IBM shall have avail- able for sale and which may be suitable for use on or with the Machines. Any replaced parts become the property of IBM. IBM makes no representation that engineering changes announced in the future will be suitable for use on or with the Machines. PATENTS AND COPYRIGHTS IBM will, at its expense, defend the Customer against any claim that any Machines or programming supplied hereunder in- fringe a patent or copyright in the United States or Puerto Rico, and will pay all costs, damages and attorney's fees that a court finally awards as a result of such claim. To qualify for such de- fense and payment, the Customer must: 1) give IBM prompt written notice of any such claim; and 2) allow IBM to control, and fully cooperate with IBM in, the de- fense and all related settlement negotiations. IBM's obligation under this Section is conditioned on the Cus- tomer's agreement that If the operation of the Machines or prog- ramming become, or in IBM's opinion are likely to become, the subject of such a claim, the Customer will permit IBM, at Its option and expense, either to procure the right for the Customer to con- tinue using the Machines or programming or to replace or modify them so that they become noninfnnging; and, if neither of the foregoing alternatives is available on terms which are reasonable in IBM's judgment, the Customer wit return the Machines or prog- ramming on written request by IeM. IBM agrees to grant the Cus- tomer a credit for retumed Machines as depreciated. The depre- ciation shall be an equal amount per year over the life of the Machines as established by IBM. IBM shall have no obligation with respect to any such claim based upon the Customer's modification of the Machines or programming or their combination, operation or use with ap- paratus, data or programs not furnished by IBM. This Section states IBM'S entire obligation to the Customer re- garding infringement or the like. LIMITATION OF REMEDIES IBM's entire liability and the Customer's exclusive remedy shall be as follows: In all situations involving performance or nonperformance of Machines or programming furnished under this Agreement, the Customer's remedy is 1) the adjustment or repair of the Machine or replacement of its parts by IBM, or, at IBM's option, replacement of the Machine, or correction of programming errors, or 2) If, after repeated efforts, IBM is unable to install the Machine or a replace- ment Machine in good working order, or to restore it to good working order, or to make programming operate, all as war- ranted, the Customer shall be entitled to recover actual damages to the limits set forth in this Section. For any other claim concern- ing performance or nonperformance by IBM pursuant to, or in any other way related to the subject matter of, this Agreement or any order under this Agreement, the Customer shall be entitled to re- cover actual damages to the limits set forth in this Section. IBM's liability for damages to the Customer for any cause whatsoever, except as otherwise stated in this Section, and re- gardless of the form of action, whether in contract or in tort in- cluding negligence, shall be limited to the greater of $100,000 or the Purchase Price stated in the applicable Supplement for the specific Machines that caused the damages or that are the sub- ject matter of, or are directly related to, the cause of action. The foregoing limitation of liability will not apply to the payment of costs, damages and attomey s fees referred to in the Section en- titled "Patents and Copyrights," or to claims for personal injury or damage to real property or tangible personal property caused by IBM'S negligence. In no event will IBM be liable for any damages caused by the Customer's failure to perform the Customer's responsibilities, or for any lost profits, lost savings or other consequential damages, even if BM has been advised of the possibility of such damages, or for any claim by the Customer based on any third party claim except as provided in the Section entitled "Patents and Copyrights," or for any damages caused by performance or non- performance of Machines or programming located outside the United States or Puerto Rub, nor will IBM be liable for loss of funds contained in, dispensed by, or associated with any Machine under this Agreement. Page 4of4 PURCHASE OF NON -IBM EQUIPMENT As previously stated, the term "Machines" in this Agreement also applies to non - IBM equipment. However, the Sections of this Agreement entitled "Installation;' "Warranties," "Other Products and Services" and "Patents and Copyrights" are replaced in their entirety by the following In respect to nor, -IBM equipment. Installation The Customer shall provide a suitable installation environment with facilities as prescribed by the manufacturer. Arrangements for installation will be the responsibility of the Customer. IBM has no responsibility for installation under this Agreement nor for any installation performed by the manufacturer. Warranties NON - IBM EQUIPMENT IS NOT WARRANTED BY IBM AND IS SOLD BY IBM TO THE CUSTOMER ON AN "AS IS" BASIS. THERE ARE NO IBM WARRANTIES EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. HOWEVER, THE MANUFAC- TURER'S WARRANTY, IF ANY, APPLIES, AND THE CUS- TOMER MUST DEAL. WITH THE MANUFACTURER ON SUCH MATTERS. Other Products and Services • The Customer Is responsible for arranging for maintenance service for non -IBM equipment. Patents and Copyrights IBM shall have no liability to the Customer regarding patent or copyright infringement for non -IBM equipment. GENERAL This Agreement and any on Machines are not assigna- ble to other than an IBM affiliate without the prior wntten consent of IBM. Any attempt to assign any of the rights, duties or obliga- tions of this Agreement without such consent is void. The Customer agrees to comply with the provisions of any End User Certification contained in any Supplement to this Agree- ment, or in any volume procurement or single shipment quantity discount amendment to this Agreement. IBM may, upon wntten notice, modify the terms and conditions of this Agreement Any such modification will apply on the Oleo tive date specified in the notice to all orders for purchase which are accepted by IBM on or after the date of notice. In addition, IBM may modify this Agreement by setting forth such modification in a Supplement which is subsequently accepted by the Customer as provided herein. Otherwise, this Agreement can only be mod- ified by a written agreement duly signed by persons authorized to sign agreements on behalf of the Customer and of IBM, and variance fro or addition to the terms and conditions of this Agreement in any order or other written notification from the Cus- tomer will be of no effect. If any provision or provisions of this Agreement shall be - held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. - IBM is not responsible for failure to fulfill its obligations under this Agreement due to causes beyond its control or to provide any services hereunder for Machines or programming located outside the United States or Puerto Rico. No action, regardless of form, arising out of this Agreement may be brought by either party more than two years after the cause of action has arisen, or, in the case of an action for non- payment, more than two years from the date the last payment was due. B the Customer fails to pay the Purchase Pnce due hereunder and IBM repossesses a Machine as provided by law, the Custom- er agrees to pay all costs and expenses of repossession, includ- ing reasonable attorney's fees. This Agreement is governed by the laws of the State of New York.