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<br />5,3 Lessor shall have no obligation to pay any Purchase Price unless all reasonable conditions established by
<br />Lessor ("Funding Conditions") have been satisfied, including, without limitation, the following: (a) Lessee has signed and
<br />delivered the Schedule and its Payment Schedule; (b) no Event of Default shall have occurred and be continuing; (c) no
<br />material adverse change shall have occurred in the Internal Revenue Code of 1986, as amended, and the related
<br />regulations and rulings thereunder (collectively, the "Code"); (d) no material adverse change shall have occurred in the
<br />financial condition of Lessee or any Supplier; (e) the Equipment is reasonably satisfactory to Lessor and is free and clear
<br />of any Liens (except Lessor's Liens); (f) all representations of Lessee in the Lease remain true, accurate and complete;
<br />and (g) Lessor has received all of the following documents, which shall be reasonably satisfactory, in form and
<br />substance, to Lessor: (1) evidence of insurance coverage required by the Lease; (2) an opinion of Lessee's counsel; (3)
<br />reasonably detailed invoices for the Equipment; (4) Uniform Commercial Code (UCC) financing statements; (5) copies of
<br />resolutions by Lessee's governing body authorizing the Lease and incumbency certificates for the person(s) who will sign
<br />the Lease; (6) such documents and certificates relating to the tax-exempt interest payable under the Lease (including,
<br />without limitation, IRS Form 8038G or 8038GC) as Lessor may request; and (7) such other documents and information
<br />previously identified by Lessor or otherwise reasonably requested by Lessor.
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<br />6. TERMINATION FOR GOVERNMENTAL NON-APPROPRIATIONS.
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<br />6.1 For each Lease, Lessee represents and warrants: that it has appropriated and budgeted the necessary
<br />funds to make all Rent Payments required pursuant to such Lease for the remainder of the fiscal year in which the Lease
<br />Term commences; and that it currently intends to make Rent Payments for the full Lease Term as scheduled in the
<br />applicable Payment Schedule if funds are appropriated for the Rent Payments in each succeeding fiscal year by its
<br />governing body. Without contractually committing itself to do so, Lessee reasonably believes that moneys in an amount
<br />sufficient to make all Rent Payments can and will lawfully be appropriated therefor. Lessee directs the person in charge
<br />of its budget requests to include the Rent Payments payable during each fiscal year in the budget request presented to
<br />Lessee's governing body for such fiscal year; provided, that Lessee's governing body retains authority to approve or
<br />reject any such budget request. All Rent Payments shall be payable out of the general funds of Lessee or out of other
<br />funds legally appropriated therefor. Lessor agrees that no Lease will be a general obligation of Lessee and no Lease
<br />shall constitute a pledge of either the full faith and credit of Lessee or the taxing power of Lessee.
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<br />6.2 If Lessee's governing body fails to appropriate sufficient funds in any fiscal year for Rent Payments or other
<br />payments due under a Lease and if other funds are not legally appropriated for such payments, then a "Non-
<br />Appropriation Event" shall be deemed to have occurred. If a Non-Appropriation Event occurs, then: (a) Lessee shall give
<br />Lessor immediate notice of such Non-Appropriation Event and provide written evidence of such failure by Lessee's
<br />governing body; (b) on the Return Date, Lessee shall return to Lessor all, but not less than all, of the Equipment covered
<br />by the affected Lease, at Lessee's sole expense, in accordance with Section 21 hereof; and (c) the affected Lease shall
<br />terminate on the Return Date without penalty to Lessee, provided, that Lessee shall pay all Rent Payments and other
<br />amounts payable under the affected Lease for which funds shall have been appropriated, provided further, that Lessee
<br />shall pay month-to-month rent at the rate set forth in the affected Lease for each month or part thereof that Lessee fails
<br />to return the Equipment under this Section 6.2. "Return Date" means the last day of the fiscal year for which
<br />appropriations were made for the Rent Payments due under a Lease.
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<br />6.3 If a Non-Appropriation Event occurs, then, dUring the twelve (12) month period following the Return Date,
<br />Lessee agrees not to acquire (by purchase, lease or otherwise) replacement equipment which is functionally similar to
<br />the Equipment covered by such terminated Lease, or to appropriate funds for the acquisition of such replacement
<br />equipment. Notwithstanding the foregoing of this Section 6.3, the restrictions of this section 6.3 shall automatically and
<br />without further action of the parties be ineffective and be deleted: (a) from any terminated Lease if the net proceeds of
<br />the sale of the returned Equipment are sufficient to pay the Termination Value of the Equipment and all accrued but
<br />unpaid Rent Payments due under the affected Lease as of the Return Date; or (b) from any Lease if the application of
<br />the restrictions in this section 6.3 would not be permitted by then applicable law or would cause such Lease to be invalid
<br />or unenforceable in any material respect.
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<br />7 . LIMITATION ON WARRANTIES. LESSOR MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR
<br />IMPLIED, AS TO ANY MATTER WHATSOEVER. INCLUDING, WITHOUT LIMITATION, AS TO THE
<br />MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY OF THE EQUIPMENT OR AS TO
<br />THE VALUE, DESIGN, CONDITION, USE, CAPACITY OR DURABILITY OF ANY OF THE EQUIPMENT. For and
<br />during the Lease Term, Lessor hereby assigns to Lessee any manufacturer's or Supplier's product warranties, express
<br />or implied, applicable to any Equipment and Lessor authorizes Lessee to obtain the customary seNices furnished in
<br />connection with such warranties at Lessee's sole expense. Lessee agrees that (a) all Equipment will have been
<br />purchased by Lessor in accordance with Lessee's specifications from Suppliers selected by Lessee, (b) Lessor is not a
<br />manufacturer or dealer of any Equipment and has no liability for the delivery or installation of any Equipment, (c) Lessor
<br />assumes no obligation with respect to any manufacturer's or Supplier's product warranties or guaranties, (d) no
<br />manufacturer or Supplier or any representative of said parties is an agent of Lessor, and (e) any warranty,
<br />representation, guaranty or agreement made by any manufacturer or Supplier or any representative of said parties shall
<br />not be binding upon Lessor.
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<br />MLD 002 (4/98)
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