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Ordinance No. 5,728901213 -21 ORDINANCE No. 5728 AN ORDINANCE AUTHORIZING THE LEASE- PURCHASE OF COMPUTER HARDWARE AND SOFTWARE FROM IBM AT THE RATE OF 7.51% PER ANNUM FOR A PERIOD OF FIVE (5) YEARS; AUTHORIZING THE PAYMENT BY THE CITY OF BAYTOWN OF THE SUM OF THIRTY FOUR THOUSAND THREE HUNDRED FORTY -SEVEN AND N01100 ($34,347.00) DOLLARS; AUTHORIZING THE EXECUTION OF THE VARIOUS DOCUMENTS NECESSARY TO COMPLETE THE LEASE - PURCHASE; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. WHEREAS, the City of Baytown is in need of upgrades to the computer systems at the Police Department, Municipal Court, and City Hall; and WHEREAS, TEX.L.GOV'T CODE ANN. § 252.022 provides when the functional requirements of the City can only be satisfied by one source, the requirements for competitive bids is not applicable; and WHEREAS, the upgrade of the current City computer systems can only be accomplished by use of equipment and software compatible with the current system, and that equipment is available from only one source, IBM; NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS: Section 1: That the City Council of the City of Baytown hereby approves an agreement with IBM for the lease- purchase of computer hardware and software at the rate of 7.51% per annum for a period of five (5) years and authorizes payment of the first year lease payment in the amount of THIRTY FOUR THOUSAND THREE HUNDRED FORTY -SEVEN AND NO 1100 ($34,347.00) DOLLARS. Section 2: That the Mayor and City Clerk are hereby authorized to execute and attest the lease- purchase agreement with IBM, a copy of which is attached hereto and identified as Exhibit "A," and made a part hereof by reference for all purposes, and that the City Manager and various appropriate department heads are authorized to execute all documents necessary to complete the lease transaction. Section 3: This ordinance shall take effect immediately from and after its passage by the City Council of the City of Baytown. INTRODUCED, READ, and PASSED by the affirmative vote of the City Council of the City of Baytown, this the 13th day of December, 1990. 0 �'41< e- 4 �e� 6 � � ETT O. HUTT , Mayor ATTEST: � 9 EILEEN P. HALL, City Clerk DALL B. STRONG, Cit Attorney C:1:59:24 • 901213 -21a 9 "6 J, IRS v 10 t) TERW L' EASE UAWERr *dt94 ` "" STATE'AND LOCAL GOVIERNMENtu " Name and Address of Lessee: Agreement No.: City-of Baytown- 2401 Market Street IBM Branch OffiiceNo.. D17 Baytown, TX 77520 -6204 IBM Branch Office Address: IBM Customer No.: 0859122 Two Riverway Houston, TX 77056 The lessor pursuant to this Term Lease Master Agreement (Agreement) will be (a) IBM Credit Corporation, or a subsidiary orafftliate thereof, or (b) a related business enterprise for whom IBM Credit Corporation is the agent (Lessor). The subject matter of the lease shah be - machlnes, field installable upgrades, feature additions or accessories marketed by Intemahonal Business Machines Corporatlioa(@M) and shall be referred to as Equipment Any lease transaction requested by Lessee and accepted by Lessor-shall be specified ko Tarm Lease Supplement (Supplement). A Supplement shall refer to and incorporate by reference this Agreement. and; when - signedt* ft-parbes, shall constitute the lease for the individual items contained therein (Lease),for•the Equipment sperm -therein: -A SuppWfpsot4riaralso specify adoonal details and terms and conditions as well as other amounts to be financed (Financing). Financing -may inckldacharges for licensed program material charges (LPM Charges) for licensed programs marketed by IBM under the agreement specified in the Supple- ment as Referenced License Agreement No. (License Agreement). 1. Lease Options. The Supplement shall designate the option. For Equipment~'Option G is a Leasewith PurchaseOpfion and Op- tion G Prime (G') is a Lease-Wr Purchase.; For LPM Charges; Op- tion S or Option S Prime(S'�wflf apply. For other Financing, Option Tor Option T Prime (T') YAP a L Prime Options, such as G P " rime; S Prime; and T Prime, are re- served for Lessees who are•state and local governments or politi- cal subdivisions thereof as defined under Section 103 of the Inter- nal Revenue Code of 1986; as amended, Including all Internal Revenue Service regulations and rulings under this section. 2. Agreement.-Term., This Agreement shall be effective when signed by both parties and may be terminated by either party upon one month's written notice.- However, each Lease then in effect shall survive any termination of this Agreement. 3. Changes. Lessor may only change the terms and conditions of this Agreement by providing prior written notice. Any change will apply only to Leases with an. Estimated Shipment Date, or Effec- tive Date for Additional License, on or after the effective date specified in the notice. However, such change shall not apply to Leases, signed by Lessee and received by Lessor on or before the date of the notice, which have an Estimated Shipment Date, or Ef- fective Date for Additional License, three months or less after the date of notice_ If such change does apply, Lessee may terminate the Lease for an affected item by providing notice to Lessor within 15 days after receipt of Lessors notice and prix; to delivery, or Ef- fective Date for Additional License; of the affected item. 4. Selection and Use of Equipment Programming and Licensed Program Materials. Lessee agrees that rt shall be re- sponsible for the selection, use of, and results obtained from, the Equipment, any programming supplied by IBM without additional charge for use on the Equipment (programming), licensed pro- gram materials, and any other associated equipment, programs or services. 5. Assignment to Lessor. Lessee hereby asst ' , ' 1 "eXClusiv91y to L' esiw, Lessee's right to purchase the-Equiprsterta' SM. This is effec�fre_when Lessor aoeepls then ' "� Sup-.' element- 81nd= iessor.shafl�then be obtlgatec�,to '"ate pity'' for the Equipment. Other than the obligatliin:to° price, -ail responsibilities and limitations applicable t0 CustOmer-in the IBM purchase agreement specfied in time Suppfi3rrteetitllts.Refer- enced Purchase Agreement No. (Purchase Agri shall re- main with Lessee. ' . If the Equipment is subject to a volume procure6lif"r educa- tional allowance amendment to the Purchase Agreement or to another discount offering, (a) Lessor wilt pay. the 'amount for the Equipment that would have been payabletessee, and (b) Lessee will remain responsible to IBM for anyvi3ll r charges incurred under the discount offering. Y, 6. Full Term Intention; Appropriation of Funds. Lessee intends to pay Rent for the full Lease Term and, if required.-to request ap- propriation of funds for the Lease. Nevertheless, Lessee will not be in default for nonpayment as long as (a) the fundsforthe Lease require appropriation by a legislative or other elected' authority of a state or local government or a political subdivision thereof, (b) Lessee has duly requested appropriation of funds for Rent, and (c) such funds for the Equipment (or in the case,Qf anyFinancing, funds for both the Financing and for the Equipme related to. the Financing) or comparable equipment are not appropriated tor any fiscal year during the Lease Term. It a nonappropriation of this kind' occurs, Lessee will promptly notify Lessor, and the Lease for the Equipment and Financing involved will terminate at the end of the last fiscal year for which funds were appropriated. Other than for a nonappropriation of this kind, the Lease may not be cancelled during its Term, and the obligation of Lessee to pay the Rent for the Term of the Lease shall be absolute and not subject to any re- duction for any reason whatsoever. if the Equipment, program- THE ADDITIONAL TERMS AND CONDITIONS ON PAGES 2 THROUGH 4 ARE PART OF THIS AGREEMENT. LESSEE ACKNOWLEDGES THAT LESSEE HAS READ THIS AGREEMENT AND ITS SUPPLEMENT, UNDERSTANDS THEM, ANDAGREESTO BE BOUND BY THEIR TERMS AND CONDITIONS. FURTHER, LESSEE AGREES THAT THIS AGREEMENT AND ITS SUPPLEMENT ARE THE COW PLETE AND EXCLUSIVE STATEMENT'OF THE AGREEMENT BETWEEN THE PARTIES, SUPERSEDING ALL PROPOSALS OR PRIOR AGREE- MENTS, ORAL OR WRITTEN, ANDALL OTHER COMMUNICATIONS BETWEEN THE PARTIES RELATING TOTHE SUBJECT MATTERHEREOR Acceptedby: IBM Credit Corporation By ....----Autttiorized Signature ,--- Name (Type or Print) Date EXHIBIT A 2125-3428 -03 Iu11A O0i 1 3M Pal. i D9 .._.. C:Uy_of B ytokm Lessee - By _ �' _ 1r Zia w ,�xl i Authorized Sign8tur9:' Name (Type or Print) T-- Daft Page i of 4 e r•��na� narr±euwr E 11 ming or licensed program materials are unsatisfactory for any reason, Lessee shall make any claim solely against the supplier and shall, nevertheless, pay Lessor all amounts payable under the Lease. 7. Warranties. Lessor grants to Lessee the benefit of any and all warranties made available by ism in the Purchase Agreement. Lessor warrants that neither Lessor nor anyone acting or claiming through Lessor, by assignment or otherwise, will interfere with Les- see's quiet enjoyment of the use of the Equipment so long as no event of default shall have occurred and be continuing. EXCEPT FOR LESSOR'S WARRANTY OF QUIET ENJOYMENT, LES- SOR MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER; INCLUDING,. BUT NOT LIM- ITED TO, THE IMPLIED WARRANTIES OF MERCHANTABIL- ITY OR FITNESS FOR A PARTICULAR PURPOSE. AS TO LES- SOR, LESSEE LEASES THE EQUIPMENT AND TAKES ANY PROGRAMMING "AS IS." IN NO EVENT SHALL LESSOR HAVE ANY LIABILITY FOR, NOR SHALL LESSEE HAVE ANY REMEDY AGAINST LESSOR FOR, CONSEQUENTIAL DAM- AGES, ANY LOSS OF SAVINGS OR LOSS OF USE. 8. Lessee Authorization. So long as Lessee is not in default under the Lease, Lessee is authorized to act on Lessors behalf concerning any IBM warranty service for the Equipment, and any programming services torthe programming. 9. Delivery and Installation. Lessee shall arrange with IBM for the delivery of the Equipment and programming and for installation of the Equipment at the Equipment Location. Lessee shall pay any delivery and installation charges. Lessor shalt not be liable to Les- see for any delay in, or failure of, de0very of the Equipment or pro- gramming. Lessee shall examine the Equipment and program- ming immediately upon delivery. If the Equipment is not in good condition or the Equipment or programming does not correspond to ism's specifications, Lessee shall promptly give ism written notice and shall provide ism reasonable assistance to cure the defect or discrepancy. 10. Late Delivery. If the Equipment or licensed program mate- rials are not delivered to the Equipment Location on or before the 15th, day after the Estimated Shipment Date. Lessor may, upon written notice to Lessee prior to delivery, increase the Lease Rate. Lessee may terminate the Lease for the affected item upon written notice to Lessor prior to delivery. Otherwise, the Rent shall be ad- justed to reflect such increase. 11. Rent Commencement Date. The Rent Commencement Date, unless otherwise specified in the Supplement, shall be the date payment is due IBM under the applicable Purchase Agreement or License Agreement. Lessee shall be notified of the Rent Com- mencement Date and the serial numbers of the Equipment. 12. Lease Term. The Lease shall be effective when signed by both parties- The Initial Term of the Lease shall expire at the end of the number of Payment Periods. specified as "Term" in the Sup- plement, after the Rent Commencement Date. However, obliga- tions under the Lease shall continue until they have been per- formed in full. 13. Rate Protection. Unless modified pursuant to Paragraph 10, the Rent shall be based on the Lease Rate specified in the Supple- ment or such greater Lease Rate as may be specified by written notice to Lessee more than three months before the Estimated Shipment Date or Effective Date for Additional License. By notice to Lessor in writing prior to delivery, or Effective Date for Additional License, and within 15 days after receipt of such notice, Lessee may terminate the Lease for the affected item. Otherwise, the Rent shall be adjusted to reflect the increase, The Unit Purchase Price and LPM Charges are subject to change in accordance with the applicable Purchase Agreement or License Agreement. 1.4. Rent, During the initial Term, Lessee shall pay Lessor, for each Payment Period, Rent as determined in Paragraph 13. Les- see's obligation to pay shall begin on the Rent Commencement Date. Rent will be invoiced in advance as of the first day of each Payment Period and will be due on the day following the last day of the Payment Period. When the Rent Commencement Date is not on the first day of a &aiendar month and;orwhen the initial Term does.not expire on the last day of a caEendar month, the applicable Rent will be prorated on the basis of 30-day months. IS. Renewal. If Lessee is not then in default under the Lease. Lessee may renew the Lease one or more times but, for Option G. the Lease may not continue beyond five years from the Date of Installation as defined in the Purchase Agreement. Lessor shall offer renewal Terms of one year and may offer longer Terms if then generally available. For a renewal Term, upon request by Lessee, at least five months prior to Lease expiration, Lessor shall notify Lessee, at least four months prior to Lease expiration, of the Rent, any changes to the Payment Period and due dates, and of any re- quired Purchase Option or Renewal Option Percents not specified in the Supplement. The Rent shalt be objectively determined by Lessor by using the projected fair market rental value of the Equip- ment as of the commencement of such renewal Term. Lessee may renew for any renewal Term only by so notifying Lessor in writing at least three months prior to Lease expiration. 16. Optional Extension. If Lessee has not elected to renew or purchase, and as long as Lessee is not in default under the Lease, the Lease (other than Leases that expire five years from Date of Installation) will be extended unless Lessee notifies Lessor in writ- ing, not less than three months prior to Lease expiration. that Les- see does not want the extension. The extension will be under the same terms and conditions then in effect, including Rent (but not less than fair market rental value) and will continue until the earlier of termination by either party upon three months' prior written notice or five years from the Date of Installation- 17. Title Transfer at Expiration of Option G Prime Lease, Follow- ing the payment of all amounts due or to become due under the Lease and the additional payment of $1.00 and if Lessee is not then in default under the Lease, upon the expiration of the Lease for Equipment'under Option G Prime, Lessor shall transfer to Les- see without recourse or warranty of any kind, express or implied, all of Lessor's right, tale and interest in and to Such Equipment an an "As Is, Where Is" basis except that Lessor'shall warrant title free and clearof all encumbrances arising through Lessor. 18. Purchase of Equipment For Option G, if Lessee is not then in default under the Lease, Lessee may, upon three months prior written notice to Lessor, purchase Equipment upon expiration of the lease. The purchase price shall be objectively determined by Lessor by using the projected fair market sales value of the Equip- ment as of such expiration date. For Option G Prime, if Lessee is not then in default under the Lease, Lessee may, upon notice to Lessor. purchase Equipment at any time during the Lease Term. Such notice shall be given not later than three months prior to Lease expiration and shall specify the desired date of purchase, which shall be one month or more after the date of notice. It the date of purchase is prior to the second anniversary of the Rent Commencement Date, the purchase price shall be calculated by multiplying the Unit Purchase Price specified in the Supplement by the Purchase Option Percent for the second anniverary and adding all Rent that would be due through such an- niverary date. If the date of purchase is the second or a subsequent anniversary of the Rent Commencement Date, the purchase price shall be an amount determined by multiplying the Unit Purchase price by the Purchase Option Percent for such Equipment for such anniversary. 11 the date of purchase is between two such anniversaries, the purchase price shall be the prorated price (in 12 monthly steps) be- tween the purchase prices described above for such anniver- saries. If Lessee purchases any Equipment, Lessee shall, on or before the date of purchase, pay to Lessor the purchase price, any appli- cable taxes, all Rent due through the day preceding the date of pur- chase, any other amounts due, and the prepayment of any Financ- ing (Paragraph 32). Lessor shall upon the later of payment or date of purchase, transfer to lessee by bill of sale, without recourse or warranty of any kind, express or implied, all of Lessor's right, title and intrest in and to such Equipment on an "As In, Where is" basis except that Lessor shall warrant title free and clear of all encumbr- ances arising through Lessor. 19. Inspection: Marking; Financing Statement, Upon request, Lessee shall make the Equipment and its maintenance records available for inspection by Lessor during Lessee's normal busi- ness hours. Lessee shall affix to the Equipment any labels indicat- ing ownership supplied by Lessor. Lessee shall execute and de- liver to Lessor for filing any Uniform Commercial Code financing statements or similar documents Lessor may reasonably request. 20. Equipment Use, Lessee agrees that Equipment will be oper- ated by competent. qualified personnel. in accordance with appli- cable operating instructions, laws and government regulations. 21. Maintenance. Lessee. at its expense, shall keep the Equip- ment in asuitaNe environment as specified by IBM and in good con- dition and working order, ordinary wear and tear excepted. 22. Alterations; Modifications: Parts. Lessee may alter or modify the Equipment only upon written notice to Lessor. Any non -IBM alt- eration is to be removed and the Equipment restored to Its normal, unaltered condition at Lessee's expense prior to its return to Les- sor. At Lessee's option, any Ism field Installable upgrade, feature addition or accessory added to any item of Equipment (Modifica- tion) may be removed. if removed, the Equipment Is to be restored at Lessee's expense to its normal, unmodified condition. if not re- moved, such Modification shall, upon return of the Equipment, be- come. without charge, the property of Lessor tree of all encumbr- ances. Restoration will include replacement of any parts removed in connection with the installation of an alteration or Modification. Any part installed in connection with warranty or maintenance ser- vice shall bethe property of Lessor, 23. Leases for Modifications and Additions. Upon Lessee `s re- quest. Lessor will arrange for leasing of Modifications and Addi- tions under terms and conditions then generally in effect. Additions shall be machines, or LPM Charges for licensed program mate- rials, which are associated with the Equipment. These Modifica- tions and Additions must be ordered by Lessee from IBM. Any lease for Modifications to Equipment shall, and any lease for Additions may. expire at the same time as the Lease for the Equipment. The rent shall be determined by Lessor and specified in a Supplement. If Lessee purchases Equipment prior to Lease expiration, Lessee shall simultaneously purchase any Modifications under Lease. 24. Return of Equipment. Upon expiration or termination of the Lease for any item of Equipment, or upon demand by Lessor pur- suant to Paragraph 34, Lessee shall promptly return the Equip- ment, freight prepaid, to a location in the continental United States specified by Lessor. Except for Casualty Loss, Lessee shall pay any costs and expenses incurred by Lessor to inspect and qualify the Equipment for IBM's maintenance agreement service. Any parts removed in connection therewith shall become Lessor's property. 25. Casualty Insurance; Loss or Damage. Lessor will maintain. at its own expense, Insurance covering loss of or damage to the Equipment (but excluding any Modifications not subject to a Lease and any non -IBM alterations). If any item of Equipment shall be lost, stolen, destroyed or irreparably damaged for any cause what- soever (Casualty Loss) before the Date of Installation, the Lease for that item shall terminate. if any item of Equipment suffers Casu- alty Loss, or shall be otherwise damaged, on or after the Date of Installation, Lessee shall promptly inform Lessor. If Lessor deter- mines that the item can be economically repaired, Lessee shall place the item in good condition and working order and Lessor will reimburse Lessee the reasonable cost of such repair. If not so re- pairable, the Lease for that item shall terminate. 26. Taxes. All taxes on or measured by the net Income of Lessor, any taxes resulting from the Purchase Agreement, and any prop- erty taxes shall be for the account of Lessor. All other taxes of any description attendant to transactions under the Lease shall be for the account of Lessee, either by reimbursement of Lessor, or, at Lessor's request, directly paid by Lessee to the taxing authority. 27. Lessor's Payment. If Lessee fails to perform its obligations under Paragraph 26 or 29 or to discharge any encumbrances created by Lessee, Lessor shall have the right to substitute perfor- mance, in which case, Lessee shall pay Lessor the cost thereof. 28. Net Lease. The Lease shall be strictly a net lease. Con- sequently, unless specifically provided otherwise in the Lease, claims, costs and expenses of any description connected with the Lease shall be for the sole account of Lessee, except that Lessor shall bear responsibility, to the extent of its fault, for claims for per- sonal injury or real and tangible personal property damage caused by Lessor's negligence. 29. Liability Insurance. Lessee shall obtain and maintain com- prehensive general liability insurance, in an amount of $1,400,000 or more for each occurrence, with an insurer having a "Best's Policyholders" rating of B + or better. The policy shall name Les- sor as an additional insured as Lessor's interests may appear and shall contain a clause requiring the insurer to give Lessor at least one month's prior written notice of the cancellation, or any altera- tion in the terms, of the policy. Lessee shall furnish to Lessor, upon request, evidence that such insurance coverage is in effect. 30. Sublease and Relocation of Equipment; No Assignment by Lessee. Upon Lessor's prior written consent, which will not be un- reasonably withheld, Lessee may sublet the Equipment or relocate it from the Equipment Location. No sublease or relocation shall re- lieve Lessee of its obligations under the Lease. In no event shall Lessee remove the Equipment from the United States. Lessee shall not assign, transfer or otherwise dispose of the Lease or Equipment, or any interest therein, or create or suffer any levy, lien or encumbrance thereon except those created by Lessor, 31. Financing of LPM Charges. if the Lease provides for financ- ing of LPM Charges, Lessor wilt pay such Charges directly to IBM. Any other charges due ISM under the License Agreement shall be paid directly to IBM by Lessee. If Lessee discontinues any of the licensed program materials In accordance with the terms of the License Agreement prior to the date LPM Charges are due, the fi- nancing of affected LPM Charges shall be cancelled: otherwise. Lessees obligation to pay Rent shall not be affected by any dis- continuance. return or destruction of any license or licensed pro- gram materials under the License Agreement. 32. Financing Prepayment (does not apply for items of Equip- ment). Lessee may terminate any item of Financing (but not an item of Equipment) by prepaying its remaining Rent. Lessee shall provide Lessor with notice of the intended prepayment date which shall be at least one month after the date of the notice. Lessor may, depending on market conditions at the time, reduce the remaining Rent to reflect such prepayment and shall advise Lessee of the balance to be paid. If, prior to Lease expiration, Lessee purchases the Equipment related to the Financing or if the Lease for such Equipment is terminated, for any reason except if funds are not ap- propriated as described in Paragraph 6, Lessee shall at the same time prepay such Financing. 33. Default; No Waiver. Lessee shall be in default under the Lease upon the occurrence of any of the following events: (a) Les- see fails to pay when due any amount required to be paid by Les- see under the Lease and such failure shall continue for a period of seven days after the due date: (b) Lessee fails to perform any other provisions under the Lease or Lessee fails to perform any of its obligations under any other Lease entered into pursuant to this Agreement, and such failure or breach shall continue unremedied for a period of IS days after written notice is received by Lessee from Lessor; (c) Lessee violates any of the covenants or represen- tations made by Lessee to Lessor with respect to any Lease en- tered into pursuant to this Agreement or in any agreement with IBM with respect to the Equipment of licensed program materials or fails to perform any provision in any such agreement (except the obligation to pay the purchase price or LPM Charges). Any failure of Lessor to require strict performance by Lessee or any waiver by Lessor of any provision in the Lease shall not be con- strued as a consent or waiver of any other breach of the same or of any other provision. 34. Remedies. If Lessee is in default under the Lease, Lessor shall have the right, in its sole discretion, to exercise any one or more of the following remedies in order to protect its interests, reasonably expected profits and economic benefits. Lessor may (a) declare any Lease entered into pursuant to this Agreement to be in default: (b) terminate in whole or in part any Lease; (c) re- cover from Lessee to the extent permitted by law any and all amounts then due and to become due; (d) take possession of any or all items of Equipment, wherever located, without demand or notice, without any court order or other process of law; and (e) de- mand that Lessee return any or all such items of Equipment to Les- sor in accordance with Paragraph 24 and, for each day that Lessee shall fail to return any items of Equipment, Lessor may demand an amount equal to the Rent, prorated on the basis of a 30-day month, in effect immediately prior to such default. Upon repossession or return of such item or items of Equipment, Lessor shall sell, lease or otherwise dispose of such item or items in a commercially reasonable manner, with or without notice and on public or private bid, and apply the net proceeds thereof towards the amounts due under the Lease but only after deducting, (i) in the case of sale, the estimated fair market value of such item or items as of the scheduled expiration of the Lease, or (ii) in the case of any replace- ment lease, the rent due for any period beyond the scheduled expi- ration of the Lease for such item or items; and (iii) in either case, all expenses, including legal fees, incurred in connection there- with. Any excess net proceeds are to be retained by Lessor. Lessor may pursue any other remedy available at law or in equity, includ- ing, 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 Page 3of4 v cumulative and may be enforced concurrently or individually from tame to time. 35 Ownership; Personal Property: Licensed Program Materials. The Equipment under Lease is and shall be the property of Lessor. Lessee shall have no right, title or interest therein except as set forth in the Lease. The Equipment is, and shall at all times be and remain, personal property and shall not become a fixture or realty. Licensed program materials are licensed and provided by IBM di- rectly to Lessee under the terms and conditions of the License Agreement. 36. Notices; Administration. Service of all notices under the Lease shall be sufficient if delivered personallyor mailed to Lessee at its address specified In the Supplement or to Lessor in care of the ISM Branch Office specified in the Supplement. Notice by mail shall be effective when deposited in the United Stales mail, duly addressed and with postage prepaid. Notices, consents and ap- provals from or by Lessor shall be given by Lessor or on its behalf by IBM and all payments shall be made to IBM until Lessor shall notify Lessee otherwise, 37. Revisions for Previously Installed Equipment. Equipmentin- stalled with Lessee under an 2M lease or rental agreement may be purchased by Lessor, on the Effective Date of Purchase (as de- fined in the Purchase Agreement), for lease to Lessee under Op- tion G or G Prime. For such Equipment, the Lease shall be revised as follows: Paragraphs 3, 15, 1$ and 25 — replace "Estimated Shipment Date" by "Intended Effective Date of Purchase" and replace "de- u, a' livery" and "Date of Installation" by "Effective Date of Purchase'; Paragraph 5— add at the end of the first paragraph. "Assignment of the option to purchase installed Equipment at the net purchase option price under an IBM lease or rental agreement will be permit- ted only when Lessee submits the Supplement in sufficient time to achieve the Intended Effective Date of Purchase. The Effective Date of Purchase under this assignment shall be the later of the first day of the Quotation Month or the day on which the Supple- ment is accepted by Lessor. If the Quotation Month expires and the purchase of Equipment is not concluded, this assignment and Lease will be null and void regarding any such Equipment and all rights, duties and obligations of Lessee and IBM will remain in ac- cordance with the provisions of the IBM agreement under which the Equipment is currently Installed. "; Paragraphs 9 and 13 — delete both paragraphs: and Paragraph 13 — replace entire paragraph with the following: "The Dent shall be based on the Lease Rate specified in the Sup - piement or such greater Lease Rate as may be specified by written notice to Lessee more than three months before the Effective Date of Purchase. The Unit Purchase Price is subject to change in ac- cordance with the referenced Purchase Agreement. Lessee may terminate the Lease for any item subject to an Increase by giving Lessor written notice on or before the Effective Date of Purchase." 38. Applicable Law; Severability. Lessees state laws shall gov- ern the Lease. if any provision of the Lease shall be held to be in- valid or unenforceable, the validity and enforceability of the re- maining provisions shall not in any way be affected or impaired. 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C. 3.3 m�. j•��rnnM POf' aG 730 m 7'00 m <rj l cr- 0010• 0 0 N aCORSCD 0- l 1 mm 7 - -1 � @� <�mN W @ 3 p 0 Cc rt rt(A rt 3 Sm_ -40 w-m(Das 'l 00 mm�iTaIl�eDt1C =r 3b 7N13Dy+^rn NDm to S n 3 WW mAn0cm 0O 3 p -'• - m m 3 m, 3 3 m Do m rn . n n _. 3 0 3 m mCO to ca TN < . -n m mIn- -m�n7m 03 CA a-5 =rt RW r1m- •RNCmma -aRC m`•'mr -•. 700 .�N13 m m3+A 0 rort 3 m m< I 07373 --•aOm Dm<ro m -<KX00 can 0 m 0 m m0L.rt3- %CL00l 00- =rtDmm0cm0m7m0w0 -- mC-)jc 1710 0(D @0- •7 -• -Oa 1 ul3 n (D 0 m 0 0 0 w 0 0 _On _ nm3 -10K9 . Nm l -) Ram• I I - rtln I a 1. m Dan -0m 0@ rt m 7N S I I (A A a CL n• � O I'1 W Z r m D (A � rn N In m c 7 �f Cl -9 r- 0 m °_ 3 rt az e* 0 N ServicePlansm International Business Machines Corporation (IBM) is pleased to offer our Customer (you) IBM Service- Plan. IBM developed Service Plan to make it easier for us to do business together. You may select the offerings you desire by marking the appropriate spaces on this selection page and then sign once. IBM will then accept this Service Plan by signing below and will return to you the signed original of this page. Nothing more is required. You may order IBM services whenever you wish. Maintenance Services Professional Services IBM Maintenance Agree -? (including Customized operational ment (Z125- 3275 -02) +— services) Multiple Venoor Servicesl Agreement for IBM Profes- (Z125- 4150 -01) sional Services (2125- 4193 -00) MA Financial Options Information Network Services EMO (Z125- 4140 -02) IBM Information Network CSA (2125- 3`?27 -03) Agreement (2120- 3242 -03) MRSA (Z1254035 -01) VMA (-7125-3-,'77-01) CFMS (Z125- :3333 -04) Invoicing Options r . Availability Services Estimated Billing y+ _ BRS (2125- 8306 -02) _._. (Z125-4j16-0f)) _ EUS (Z125- 4301 -00) FASTService (Z125- 8287 -00) NS (Z125- 4173 -01) NTA (Z125- 4290 -00) PM Productivity (Z125- 4304 -00) SoftwareXcel (Z125- 4298 -01) SystemXtra ( -7125. 4294 -02) The parties acknowledge that they have read the agreements and amendments designated by your mark and included herewith, understand them, and agree to be bound by their terms and conditions. The information in parentheses above indicates the Accepted by: International business MaeNnes Corporatlon Armonk, New York 10504 By . . Anihorized signature Name (type or print): Date: Agreement number: IBM Branch Office number: 187 IBM Branch Office address: Houston West It 187 One Riverway, 9th Floor Houston, Texas 77056 current version number for each IBM offering. Any reproduction of this selection page by reliable means and any facsimile of the IBM Agreements and Amendments which you selected will be considered originals of these documents. Customer name: City of Baytown By AulhoriZed signature Name (type or print): Date: Customer number: 0859122 Customer address: ATT Purch Dept PO Box 424 Baytown, TX 77522 -0424 2401 Market St Baytown, TX 77520 -6204 RU Swvire marlr n! Intnrnnti —I nisei..— i... -_- r__- _- . -,,. -_ 0 • =. ServicePlan"' Professional Services r S it Agreement for IBM Professional Services You and IBM agree that the terms and conditions in this Agreement and any applicable Statement of Work {SOW) will apply to IBM Professional Services (Services) which iBM provides to you. 1. Associated Contract Documents The SOW will describe your project (Project) including the Scope of Services that IBM will provide to you in response to your request for Services and any other applicable terms. A separate SOW will be required for each Project. The SOW will become subject to this Agreement when signed by you and IBM. IBM will manage each Project unless the SOW specifies that you wilt manage the Project and IBM will only provide Services to assist you. The SOW will specify an Estimated Schedule for each Project. The Estimated Schedule is provided for planning purposes. Both parties agree to make reasonable efforts to perform their responsibilities in accordance with such Schedule. Services will begin on or about the Start Date specified in the SOW and will end upon accomplishment of the Completion Criteria as set forth in the SOW. The term "Completion Criteria- means detailed, written conditions that IBM is required to meet to satisfy its obligations under this Agreement. 2. 2. Changes to Statement of Work Either party may request a change to a SOW. Either party, if requested by the other, will submit its change request in writing. IBM will prepare a written Change Authorization which will describe the requested change and set forth any modifications to the terms of the SOW. Any change in the SOW may result in a change to the Charges, Estimated Schedule or other terms. Depending on the extent and complexity of the requested change, IBM may charge you for the effort required to analyze a requested change. In such instances, IBM will notify you in writing of the estimated charges for such analysis. You must notify IBM in writing to proceed with such analysis. Either party may require that the Change Authorization be signed by both parties. Otherwise, the change will become part of the SOW when iBM provides you with a copy of the Change Authorization. The Change Authorization will modify and take precedence over any inconsistent terms of either the SOW or any previous Change Authorizations. 3. Charges Each SOW will specify the Charges applicable for the Services that IBM will provide to you. IBM will invoice you as specified in the SOW. You agree to pay such Charges as specified in the invoice. Such Charges will be exclusive of any taxes. 4. Taxes You agree to pay amounts equal to any taxes, including personal property taxes, resulting from this Agreement. Such taxes will not include taxes based on IBM's net income. 5. Personnel Each party will designate an individual for each Project who will have the authority to represent their respective party in all matters concerning such Project. All Project related communications should be addressed to the appropriate designated individual. If either party replaces its designated individual, that party shall promptly notify the other in writing of such replacement. Each party will be responsible for the supervision, direction and control of its own personnel. IBM will make every effort to honor your specific requests regarding the assignment of IBM personnel; however, IBM reserves the sole right to determine the assignment of its personnel. IBM personnel shall not be restricted or prevented from performing services for others that are similar to the Services provided for any Project. 6. Confidential Information The parties agree that all information exchanged will be nonconfidential. If a Project requires the exchange of confidential information, such exchange will be made under a separate IBM agreement. 7. Ownership and License IBM may deliver materials to you for a Project under this Agreement. Materials include, but are not limited to, programs, program listings, programming tools, documentation, reports and drawings. iBM will identify in the SOW the materials to be delivered to you as Type Materials- or Type II Materials. - IBM grants you title, including ownership of copyright, to the materials identified as Type I Materials. IBM will retain one copy of all Type I Materials and you grant IBM an irrevocable, nonexclusive, worldwide, paid -up right and license to use, execute, reproduce, copy and display such Materials and to prepare derivative works based upon such Materials. IBM will also have the right to sublicense such Materials and any such derivative works created by IBM. In addition, IBM may market and distribute copies of such items. IBM or third parties retain title, including ownership of copyright, to all materials identified as Type 11 Materials. However, IBM grants you title to the copies of Type II Materials IBM delivers to you. No license is granted or implied with respect to Type II Materials delivered to you. Such copies are subject to the provisions of the Copyright Laws of the United States. Those materials delivered to you, not specifically identified in the SOW as Type i Materials or Type II Materials, will be deemed to be 'Type III Materials.- To the extent that IBM has an interest in Type IiI Materials, such Materials, including any intellectual property rights therein, will be jointly owned by you and IBM without accounting. Any ideas, concepts, know -how or techniques which relate to the subject matter of this Agreement and are developed or provided by either party or jointly by both parties during the course of a Project may be used by either party in any way they deem appropriate. 8. Inventions The term 'Invention' shall mean pny idea, concept, know -how or technique that either party first conceives or reduces to practice while in performance of Services during the term of a Project and for which a patent application is filed. inventions will be treated as follows: 1. if made by your personnel, it shall be your property. You grant IBM a nonexclusive, irrevocable, worldwide and paid -up license under such invention, patent application and all patents issued thereon: 2. if made by IBM personnel, it shall be IBM's property. IBM grants you a nonexclusive, irrevocable, worldwide and paid -up license under such invention, patent application and all patents issued thereon; and 3. if made by the personnel of both parties, it and all patent applications filed therefor and all patents issuing thereon shall be jointly owned by the parties without accounting. Each party shall have the right to grant licenses to thiid parties or assign its rights therein without the consent of the other. All licenses granted to either party will include the right to make, have made, use, have used, lease, sell and /or otherwise transfer any apparatus, and /or practice and have practiced any method and shall include the right to grant, directly or indirectly, revocable or irrevocable sublicenses to such party's Subsidiaries, Nothing contained in this Agreement shall be deemed to grant any license under any patent or patent applications arising out of any other inventions of either party, 9. Subsidiary For the purposes of this Agreement the term "Subsidiary" shall mean a corporation, company or other entity: 1. more than 50% of whose outstanding shares or securities (representing the right to vote for the election of directors or other managing authority) are now or hereafter owned or controlled, directly or indirectly, by a party hereto; or 2. which does not have outstanding shares or securities, as may be the case in a partnership, joint venture or unincorporated association, but more than 50% of whose ownership interest representing the right to make the decisions for such corporation, company or other entity is now or hereafter owned or controlled, directly or indirectly, by a party hereto. Such corporation, company or other entity shall be deemed to be a Subsidiary only so long as such ownership or control exists. 1'0. Termination of Projects You may terminate a Project by providing written notice to IBM. If you fail to meet your obligations under this Agreement, IBM may terminate a Project by providing written notice to you. Upon your or IBM's receipt of such notice, IBM will terminate all tasks for such Project in an orderly manner, as soon as practical or in accordance with a schedule agreed to by you and IBM. You agree to pay IBM for Services provided through the termination of all tasks for the Project. Such payment will include any termination charges set forth in the SOW and any charges IBM has incurred in terminating subcontracts. All Materials developed through the termination of all tasks for the Project will be delivered to you in accordance with Section 7. 11. Disclaimer of Warranties THIS IS A SERVICE AGREEMENT. THERE ARE NO WARRANTIES, EXPRESS OR IMPLIED. THiS DISCLAIMER INCLUDES, BUT IS NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. 12. Limitation of Remedies IBM's entire liability and your exclusive remedy for damages resulting from IBM's performance or nonperformance, which is related in any way to the Services provided under a SOW under this Agreement, will be your recovery of actual damages to the limits set forth in this Section. IBM's liability for actual damages from any cause whatsoever will be limited to the greater of 1) $100,000 or 2) an amount equal to the Charges invoiced for • the Services which are the subject matter of, or are directly related to, the cause of action. The limitation will apply, except as otherwise stated in this Section, regardless of the form of action, whether in contract or in tort including negligence. This limitation will not apply to claims by you for bodily injury or damage to real property or tangible personal property for which IBM is legally liable. In no event will IBM be liable for any lost profits, lost savings, incidental damages, or other economic consequential damages, even if IBM has been advised of the possibility of such damages. In addition, IBM will not be liable for any damages claimed by you based on any third party claim. In no event will IBM be liable for any damages caused by your failure to perform your responsibilities. 13. General The term "Professional Services" in this Agreement does not mean that 113M personnel are licensed by any governmental body or agency to perform the Services under this Agreement. You may not assign this Agreement or remarket Services provided by IBM under this Agreement without the specific written permission of IBM. Any attempt to assign any of the rights, duties or obligations under this Agreement is void. You agree to provide full, free and safe access to IBM for the performance of Services. You represent that you are not aware of the presence of any unsafe condition or hazardous materials at any Project work location. If you become aware of the existence of any unsafe condition or hazardous material, you will promptly notify IBM in writing. IBM may provide Services by the use of IBM - selected independent contractors. Neither party will be prohibited from entering into similar agreements with others or from developing and providing materials or services which are similar to those Services provided under this Agreement. Each party shall be released from its obligations under this Agreement or a SOW to the extent that the party is prevented from performing its obligations due to circumstances beyond its control. Neither party may bring an action, regardless of form, arising out of this Agreement, more than two years after the cause of action has arisen. IBM may not bring an action for nonpayment more than two years after the date the last payment was due. IBM may modify the terms and conditions of this Agreement upon written notice to you,. Any such modification will apply to any SOW which both parties sign after the date of notice. Otherwise, only a writ -ten agreement signed by authorized persons can modify this Agreement. Either party may terminate this Agreement by providing one month's written notice to the other following the completion or termination of all Projects. Sections 3, 4, 5, 6, 7, 8 and 12 and any other provisions of this Agreement, which by their nature extend beyond the completion or termination of a Project or the termination of this Agreement, shall remain in effect beyond such completion or termination until fulfilled and shall apply to either party's successors and assigns. In the event of conflict between this Agreement and a SOW, the terms and conditions of the SOW shall prevail. The laws of the State of New York govern this Agreement. The parties agree that the complete and exclusive statement of the agreement between the parties relating to this subject shall consist of 1) this Agreement, 2) any other applicable IBM Agreement(s), 3) any Statement(s) of Work and 4) Change Authorization(s). This statement of the agreement supersedes all proposals or other prior agreements, oral or written, and all other communications between the parties relating to this subject. CUSTOMIZED OPERATIONAL SERVICES PROPOSAL FOR City of Baytown 2401 Market Street Baytown, Texas 77520 SUBMITTED BY: IBM National Service Division One Riverway Houston, Texas 77056 Proposal Date: 10/16/90 Proposal Reference: AA 28309 0 PROPOSAL SUMMARY SERVICES CHARGE In response to your request, IBM is pleased to submit this proposal to provide Customized Operational Services. The charges for the Services requested amounts to a total of two thousand three hundred eighty -nine Dollars. ($ 2,389.00) The Services Charge stated does not include applicable Federal, State, or Local taxes. REQUIRED DOCUMENT Agreement For IBM Professional Services This is the standard IBM agreement which contains the terms and conditions under which IBM will provide you Customized Operational Services. The I13M document number is 2125 -4193. ATTACHED DOCUMENT Statement of Work (Custom Services) The Statement of Work to perform these Services is attached. The Statement of Work describes the specific Services to be provided as customized to your environment. u E i ServicePlan Professional Services Statement of Work (Custom Services) Name and Address of Customer: City of Baytown 2401 Market Street Baytown, Texas 77520 IBM Branch Office Address: IBM Corporation One Riverway Houston, Texas 77056 Agreement No.: Contract No.: L4622 IBM Branch Office: 187 Customer No.: 0859122 Estimated Schedule Start Date: 11/01/90 End Date: 11/09/90 Charges: $2,389.00 (Described Below) This Statement of Work includes the following sections in the attached pages: • Scope of Services • Customer Responsibilities • Contract Term • Completion Criteria • Charges • IBM Point of Contact • Customer Point of Contact • Materials Ownership and License • Other Terms and Conditions This Statement of Work will be withdrawn if IBM is not authorized by 01/15/91 to perform these services. The parties acknowledge that they have read this Statement of Work, understand it, and agree to be bound by its terms and conditions. Further, the parties agree that the complete and exclusive statement of the agreement between the parties relating to this subject shall consist of 1) this Statement of Work, including any attachment referenced herein, 2) the referenced Agreement, 3) any other applicable IBM Agreement(s), and 4) any Change Authorizations (s). This statement of the agreement supersedes all proposals or other prior agreements, oral or written, and all other communications between the parties relating to this subject. Accepted by: International Business Machines Corporation By Authorized Signature Name (Type or Print) AA28309 ( 10/16/90 ) Date City of Baytown By Authorized Signature Name (Type or Print) Date Page 1 SCOPE OF SERVICE This section describes the Services that IBM will provide City of Baytown under the Terms and Conditions of the referenced Agreement for IBM Professional Services. You • have selected the following Services: • Site Planning Services 0 The details of the selected Services are described in this section. Site Planning Services: The project is the Site Planning and delivery of Uninterruptible Power Supply (UPS) equipment to Site owned by City of Baytown (the Owner). Based upon your information, IBM has defined the UPS requirements as set forth in the section Schedule of Project Requirements. In accordance to the work defined in this section, IBM.will arrange to provide the necessary delivery services and furnish the required UPS'to complete the Work. IBM will provide the project management, and technical support to assist customer in site planning and delivery of UPS. In addition, IBM will: • Gather warranties to be furnished to you; • Gather operations and maintenance manuals to be furnished to you; For specific details of these Services, see the section titled Schedule of Project Requirements. CUSTOMER RESPONSIBILITIES City of Baytown will: • Accept and install UPS; • Designate a person to act as your Point of Contact; • Provide full information regarding your requirements for the Project, including but not limited to your design objectives, constraints and criteria; • Pay IBM for all sales and use taxes imposed directly upon IBM in the performance of these Services; CONTRACT TERM The term of this contract is as stated in the Estimated Schedule. The actual delivery dates will be negotiated by IBM and the Customer once this Statement of Work is in effect. The schedule shall be consistent with the delivery dates identified by the Customer and agreed to by IBM. Every effort shall be made by IBM and the Customer to keep the schedule dates intact. IBM will not be responsible for delays or additional requirements imposed by any government agencies. IBM will not be responsible for delays caused by labor disputes, fire, unavoidable casualties, or unforeseen conditions. AA28309 ( 10/16/90 ) Page 2 COMPLETION CRITERIA IBM's contractual obligations will be fulfilled when; • Site Planning Services have been completed and the Uninterruptible Power Supply (UPS) has been accepted as evidenced by your Final Payment to IBM; or • The Customer has beneficial use of the Project for a duration of more than sixty (60) calendar days. CHARGES You agree to pay IBM the Charges for the Custom Services as stated. The Charges stated here represent the Base Sum for all Services to be provided by IBM under the section Scopv of Services. Charges .....................$ 2,389.00 In addition to the Charges described above, you agree to pay IBM for all costs resulting from changes beyond the scope of the contract. These charges will be presented to you via Change Authorization. Such changes will be mutually agreed upon between IBM and City of Baytown before the work is performed. If you and IBM are unable to agree on the amount by which the Contract Sum will be increased or decreased and, if in your opinion, the work must proceed before an agreement can be reached, a not -to- exceed amount will be mutually agreed upon. IBM will then execute a Change Authorization to proceed with the work and keep daily records as to all labor employed in connection with such work and itemized records for all material and equipment used. Invoicing: IBM will invoice you monthly for work completed. Payment is due as specified in the invoice. IBM POINT OF CONTACT Prior to the Start Date, IBM will designate a person who will be IBM's primary point of contact to you. Such person is responsible to: • coordinate the IBM activities at your Location; • produce and review status reports with you on a timely basis. CUSTOMER POINT OF CONTACT City of Baytown will designate a person to act as the Owner's Representative with respect to the Work to be performed under this Contract. Such person will have complete authority to transmit instructions to IBM, receive information and interpret and define Owner's policies and decisions with respect to all aspects of the Work covered by this contract. MATERIALS OWNERSHIP AND LICENSE All reports and concept drawings are considered Type I materials as defined in the referenced Agreement. The construction documents, including the plans and specifications, are Type II materials. AA28309 ( 10/16/90 ) Page 3 0 f� The drawings, specifications and other documents provided by IBM to you are instruments of service and, 1) will not become the property of the Customer whether or not the Project for which they are made is commenced for construction, and 2) will not be used by the Customer on other projects, or for addition to this Project. OTHER TERMS AND CONDITIONS The content of this Statement of Work and associated Attachments shall not be distributed outside and shall not be duplicated, used, or disclosed in whole or in part for any purpose other than to evaluate this Proposal. Any other use is prohibited unless authorized in writing by IBM. You represent that you are either the owner of each Machine under this Statement of Work or are authorized by its owner to include it under this Statement of Work. If IBM is delayed in the progress of the Project by your acts or neglect, or the acts or neglect of your employees or separate contractors employed by you, by changes ordered in the Project not caused by the fault of IBM, by labor disputes, fire, unusual delays in transportation, adverse weather conditions not reasonably anticipatable, unavoidable casualties, or other causes beyond IBM's control or by another cause which you and IBM agree is justifiable, the contract time shall be reasonably extended and the Charges adjusted, if necessary, by Change Authorization. All materials are guaranteed for a period of five (5) years from the date of final completion which shall be evidenced by the issuance of final invoice to the Customer by IBM. This guarantee shall apply to deficiencies resulting from defective workmanship and materials. AA28309 ( 10/16/"90 ) Page 4 0 • Schedule of Project Requirements for Custom Services Statement of Work IBM will provide Site Planning and Delivery Services for the proposed Uninterruptible Power Supply (UPS) to your facility located at: 2401 Market Street Baytown, Texas 77520 The details of the Services being proposed are discussed below. Uninterruptible Power Source (UPS): IBM will provide the labor and material necessary to deliver 1 2.0 KVA EXIDE PERSONAL Uninterruptible Power Supply (UPS) system. • Mechanical equipment to be delivered: — One (1) Battery pack per UPS to provide back-up time at .8pf. — Inside delivery of the UPS Systems; The UPS and battery systems have a five -year manufacturer's warranties. The Owner's Manuals for all new equipment/ systems will be compiled into one book. An authorized manufacturer's representative will provide a walk - through for designated client personnel, describing the basic equipment /system operation, maintenance, and emergency procedures. AA28309 ( 10 /16/90 ) Page 5 IBM Credit Corporation Stamford, Connecticut 06804 Addendum to Agreement (State and Local Government) Tax - Exempt Status /IRS Reporting Requirements • Customer Name and Address: Date Prepared: 12/05/90 City of Baytown 2401 Market Street Referenced Agreement No.: Baytown, TX 77520 Addendum No,: IBM Branch Office Address: Two Riverway Houston, TX 77056 Customer No.: 0859122 IBM Credit Corporation and Lessee /Customer agree that the Financing Agreement, Installment Payment Agreement, or Term tease Master Agreement referenced above between the parties is hereby modified by adding the following provision: THE RATES IN THIS AGREEMENT ARE BASED ON THE LESSEE'S /CUSTOMER'S UNDERLYING DEBT OBLIGATION QU'ALIFYI'NG TO PAY INTEREST WHICH IS EXEMPT FROM FEDERAL INCOME TAX UNDER SECTION 103(a) OF THE INTERNAL REVENUE CODE (Code). Accordingly, Lessee /Customer represents that it qualifies as a State or political subdivision of a State for purposes of Section 103(a). Lessee /Customer agrees that any misrepresentation of its status under Section 103(a) is an event of default under this agreement. Further, Lessee /Customer agrees to comply promptly with all information reporting requirements of Code Section 149(e) and Treasury regulations thereunder. Lessee /Customer specifically agrees to file Internal Revenue Service Form 8038 -G or 8038 -GC, whichever appropriate, for this transaction. if the Lessee /Customer either 1) does not file the above IRS forms on a timely basis, or 2) Is unable upon request to demonstrate to the satisfaction of IBM Credit Corporation that the IRS has determined Lessee /Customer is qualified under Section 103(a) of the Code, then Lessee /Customer shall pay, on demand by IBM Credit Corporation, a sum to be determined by IBM Credit Corp( ration that will return to IBM Credit Corporation the economic results it would otherwise have received. Accepted by: IBM Credit Corporation City of Baytown Lessee/Cu stomer By Authorized Signature By Authorized Signature Name (Type or Print) Date Name (Type or Print) Date kntamational Business Machines Corporation Name and Address of Customer: City of Baytown 2401 Market Street Baytown, TX 77520 -6204 IBM Branch Office Address: Two Riverway Houston, TX 77056 Installment>Payment Agreement Armonk, New York 10504 Reference Agreement No.: Reference Supplement Dated: Agreement No.: IBM Branch Office No.: D17 Customer No.: 0859122 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 C) Feature Description (Net Unit Price) Amount $ 1 "7013 1WM.7RP 530 1 7013 1WMJRX 530 2 7207 1WMJRQ 001 1WMJRY 2 5081 1WMJRR 016 (') An '— indicates Machine Serial Number. 'LIC' RISC System /6000 70,538 70,538 'LIC' RISC System /6000 73,252 73,252 1/4 Inch Cartridge Tape Drive 1,573 3,146 Color Display 2,033 4,066 TOTAL: $ 151,002 .00 Statement of Transaction 1. CashwPrice (if this were a cash sale) .................... ............................... $ 1 51 ,Ilfl2_nfl 2. Trade -In Allowance Credit (from IBM trade -in agreement) ............................... $ 00.00 3. Cash Down Payment .................... ............................... ......... $ 4. Total Down Payment (Sum of Items 2 and 3) ............ ............................... $ 5. Unpaid Balance of Cash Price (item 1 minus Item 4) ..... ............................... $ =I 11 11 151,002.00 6. State and Local Taxes, if applicable .................... ............................... $ Tax Exempt 7. Amount to be Financed (Sum of Items 5 and 6) ......... ............................... $ 151, 002.00 8. FINANCE CHARGE (Time Price Differential on Item 7). Finance Charge consists of interest at an ANNUAL PERCENTAGE RATE of 7.51 % ....................... $ 29.457.60 9. Tax on Finance Charge, if applicable, (payable in first installment) ...................... $ Tax Exempt 10. Total Amount of Remaining Payments (Sum of Items 7, 8 and 9) ........................ $ 180,459-60 11. Total Time Sale- Price (Sum of Items 4 and 10) .......... ............................... $ 1 Hn _ 459.60 411 0 stantiaHy, modify , relocate",c lspowofarwy -or 'alt of -the Machines without prior wrrtten-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 Pay- ment Agreement; (d) it Will promptly satisfy all liens against the Machines; and (e) there are no mortgages, pledges, en- cumbrances, 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 Sections entitled "Casualty Occur- rences" and /or "Remedies." 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. If such Casualty Occurrence does not constitute an Event of Default, the Customer shall promptly pay to IBM a sum equal to the aggregate Casualty Value of such Machines. The Casualty Value of each Machinesuffering 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 monthly installments thereafter falling due so that such installments represent only the payments due for the remaining Machines. 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, (b) the Customer fails to procure and maintain insurance as required in this Installment Payment Agreement; (c) the t " r fi ' recur Sharf, °KK• 'continue for a perio&of 16 days after- written notice is received by the Customer, from IBM; '(d) the Customer violates any of the covenants or representations -made by the Customer in any application for credit -or submits inaccurate financial information for the purpose of in- ducing IBM to enter into this Installment Payment Agree- ment; (e) the Customer makes an assignment for the benefit of creditors, whether voluntary or involuntary, or consents to the appointment of a trustee or receiver, or if either shall be appointed for the Customer or for a substantial part of its property without its consent; (f) any petition or proceeding is filed by or against the Customer under any Federal or State bankruptcy or insolvency code or similar law; (g) if applicable, the Customer makes a bulk transfer subject to the provisions of the Uniform Commercial Code; or (h) a substantial portion of the Machines suffers a Casualty Occurrence. 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 reasonable attorney's fees and legal expenses. The Custo- mer will pay to IBM any deficiency between the net proceeds derived hereunder and the unpaid Total Time Sale Price as liquidated damages for the breach of this Installment Payment Agreement. and IBM will pay to the Customer any excess net proceeds. 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 rightorremedy 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 indi- vidually, from time to time. Page 2 of 3 Payrrnarript 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 Re- maining Payments by paying the first installment of $ 3'007.66 which includes the Tax on Finance Charge, if applicable, on the date one month after such Date and 60 consecutive monthly installments of $ 3,007.66 on the corresponding day of each month thereafter until fully paid. The Customer having been offered the choice of purch- asing 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. 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. 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 the 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: 2401 Market Street (Street Address) Baytown, TX 77520 -6204 (City) (County) (State) where IBM may inspect them at any reasonable time. Receivedby IBM at - - - --- -- ----- ----- ----- -- ........................................ Branch Office Name/Number By Managers Signature Name -(T --------- : ------------------------ ---------------------------------- ype or Print) Date Accepted by: International Business Machines Corporation By--------------------- ------- ----- ------ ----- - - - --- Authonzed Signature - --------- Name (Type or Print) Date 2120- 738414 (Rhr. 07/84) U/M 025 J General If the Net Unit Price for any Machine is adjusted as pro- vided in the referenced Agreement, or the trade -in allow- ance for any trade -in equipment is adjusted as provided 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 ac- cordingly. If any provision or provisions of this Installment Payment Agreement shall be held to be invalid, illegal or unenforce- able, the validity, legality and enforceability of the remain- ing provisions shall not in any way be affected or impaired thereby. Time is of the essence in this Installment Payment Agree- ment. The terms and conditions of this Installment Payment Agreement shall prevail notwithstanding any variance with the terms and conditions of the referenced Agreement. THE CUSTOMER ACKNOWLEDGES THAT THE CUS- TOMER HAS READ THIS AGREEMENT, UNDERSTANDS IT, AGREES TO BE BOUND BY ITS TERMS AND CON- DITIONS, AND, BY THE CUSTOMER'S SIGNATURE BE- LOW, ACKNOWLEDGES THAT THE CUSTOMER IS LEGALLY AUTHORIZED TO ENTER INTO THIS AGREE- MENT. FURTHER, THE CUSTOMER AGREES THAT THIS INSTALLMENT PAYMENT AGREEMENT, THE REFER- ENCED AGREEMENT AND SUPPLEMENT AND ANY APPLICABLE IBM TRADE -IN AGREEMENT CONSTI- TUTE A SINGLE AGREEMENT AND THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN THE CUSTOMER AND IBM, WHICH SUPER- SEDES ALL PROPOSALS OR PRIOR AGREEMENTS, ORAL OR WRITTEN, AND ALL OTHER COMMUNICA- TIONS BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF. ------ ------------------ City --- a13.ayuwn ............. - .---- - -. - -- Customer By----------------------- - - - - - -- -- - - -- ' --- Authonzed Signature - - - -- --- --- - -- - -- •- --- ------- .------ -- - - -- ------------------.._.--------------------- Name (type or Print) Date Pays 3 of 3