Appropriation dependency

All equipment-lease-purchase contracts entered into pursuant to this Part shall contain an annual appropriation dependency requirement to the effect that the renewal and continuation of such contract is contingent upon the appropriation of funds to fulfill the requirements of the contract and if the local governmental entity, after a diligent and good faith effort, fails to appropriate sufficient monies to provide for payments under the contract, the obligation to make payment under the contract shall terminate in accordance with the terms of the contract on the last day of the last fiscal year for which funds were appropriated, provided the equipment is returned to the nonprofit lessor or his agent, as provided in the equipment-lease-purchase contract, and such contract shall not be a long-term debt of the local governmental entity. In addition, in such equipment-lease-purchase contracts, the nonprofit lessor shall covenant and agree to indemnify and hold the lessee harmless against any loss, damage, liability, cost, penalty, or expense, including attorney's fees, which is not otherwise agreed to by the lessee in the equipment-lease-purchase contract and which is incurred and arises upon a failure of the local governmental entity to appropriate funds in the manner described above for a continuation of the contract or the exercise of the option to purchase the selected equipment. Acts 1985, No. 758, §1, eff. July 17, 1985. {{NOTE: SEE ACTS 1985, NO. 758, §§5 AND 6.}}