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<br />13.3 If Lessor determines that any item of Equipment has suffered a Casualty Loss beyond repair ("Lost
<br />Equipment"), then Lessee shall either: (a) immediately replace the Lost Equipment with similar equipment in good repair,
<br />condition and working order free and clear of any Liens (except Lessor's Liens), in which event such replacement
<br />equipment shaJl automatically be Equipment under the app'icable Lease, and deJjver to Lessor true and complete copies
<br />of the invoice or bill of sale covering the replacement equipment; or (b) on earlier of 60 days after the Casualty Loss or
<br />the next scheduled Rent Payment date, pay Lessor (i) all amounts owed by Lessee under the applicable Lease,
<br />including the Rent Payments due on or accrued through such date pi'-JS (ii) an amount equal to the Termination Value as
<br />of the Rent Payment date (or if the Casualty Loss payment is due between Rent Payment dates, then as of the Rent
<br />Payment date preceding the date that the Casualty Loss payment is due) set forth in the Payment Schedule to the
<br />applicable Lease. If Lessee is making such payment with respect to less than all of the Equipment under a Lease, then
<br />Lessor will provide Lessee with the pro rata amount of the Rent Payment and Termination Value to be paid by Lessee
<br />with respect to the Lost Equipment and a revised Payment Schedule.
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<br />13.4 To the extent not prohibited by State law, Lessee shall bear the risk of loss for, shall pay directly, and
<br />shall defend against any and all claims, liabilities, proceedings, actions, expenses (including reasonable attorney's fees),
<br />damages or losses arising under or related to any Equipment, including, but not limited to, the possession, ownership,
<br />lease, use or operation thereof. These obligations of Lessee shall survive any expiration or termination of any Lease.
<br />Lessee shall not bear the risk of loss of, nor pay for, any claims, liabilrties, proceedings, actions, expenses (including
<br />attorney's fees), damages or losses which arise directly from events occurring after any Equipment has been returned by
<br />Lessee to Lessor in accordance with the terms of the applicable Lease or which arise directly from the gross negligence
<br />or willful misconduct of Lessor.
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<br />14. INSURANCE.
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<br />14.1 (a) Lessee at its sole expense shall at all times keep all Equipment insured against all Casualty Losses for
<br />an amount not less than the Termination Value of the Equipment. Proceeds of any such insurance covering damage or
<br />loss of any Equipment shall be payable to Lessor as loss payee. (b) Lessee at its sole expense shall at all times carry
<br />public liability and third party property damage insurance in amounts reasonably satisfactory to Lessor protecting Lessee
<br />and Lessor from liabilities for injuries to persons and damage to property of others relating in any way to any Equipment
<br />Proceeds of any such public liability or property insurance shall be payable first to Lessor as additional insured to the
<br />extent of its liability, and then to Lessee.
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<br />14.2 All insurers shall be reasonably satisfactory to Lessor. Lessee shall promptly deliver to Lessor satisfactory
<br />evidence of required insurance coverage and all renewals and replacements thereof. Each insurance policy will require
<br />that the insurer give Lessor at least 30 days prior written notice of any cancellation of such policy and will require that
<br />Lessor's interests remain insured regardless of any act, error, misrepresentation, omission or neglect of Lessee. The
<br />insurance maintained by Lessee shall be primary without any right of contribution from insurance which may be
<br />maintained by Lessor.
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<br />15. PURCHASE OPTION. Upon thirty (30) days prior written notice by Lessee to Lessor, and so long as there is no
<br />Event of Default then existing, Lessee shall have the option to, purchase all, but not less than all, of the Equipment
<br />covered by a Lease on any Rent Payment due date by paying to Lessor all Rent Payments then due (including accrued
<br />interest, if any) plus the Termination Value amount set forth on the Payment Schedule to the applicable Lease for such
<br />date. Upon satisfaction by Lessee of such purchase conditions, Lessor shall release its Uen on such Equjpment and
<br />Lessee shall retain its title to such Equipment "AS-IS, WHERE-IS", without representation or warranty by Lessor,
<br />express or implied, except for a representation that such Equipment is free and clear of any Liens created by Lessor.
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<br />16. LESSEE'S REPRESENTATIONS AND WARRANTIES. With respect to each Lease and its Equipment, Lessee
<br />hereby represents and warrants to Lessor that:
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<br />(a) Lessee has full power, authority and legal right to execute and deliver the Lease and to perform its
<br />obligations under the Lease, and all such actions have been duly authorized by appropriate findings and actions of
<br />Lessee's governing body;
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<br />(b) the Lease has been duly executed and delivered by Lessee and constitutes a legal, valid and binding
<br />obligation of Lessee, enforceable in accordance with its terms;
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<br />(c) the Lease is authorized under, and the authorization, execution and delivery of the Lease complies with, all
<br />applicable federal, state and local laws and regulations (including, but not limited to, all open meeting, pUblic bidding and
<br />property acquisition laws) and all applicable judgments and court orders;
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<br />(d) the execution, delivery and performance by Lessee of its obligations under the Lease will not result in a
<br />breach or violation of, nor constitute a default under, any agreement, lease or other instrument to which Lessee is a party
<br />or by which Lessee's properties may be bound or affected;
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<br />MLD 002 (4/98)
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