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<br />Lessee to terminate this Lease in order to purchase, lease, rent or
<br />otherwise acquire the use of any other equipment or services performing
<br />functions similar to the functions of the Equipment, and, if this Lease
<br />terminates pursuant to this Section, Lessee agrees that during the fiscal
<br />period immediately following the fiscal period in which such termination
<br />occurs it will not so purchase, lease, rent or otherwise acquire the use of
<br />any such other equipment or services.
<br />
<br />7. REPRESENTATIONS, COVENANTS AND WARRANTIES.
<br />Lessee represents, covenants and warrants as of the date hereof and at
<br />all times during the Lease Term that: (i) Lessee is a state or a fully
<br />constituted political subdivision thereof, or its obligations hereunder
<br />constitute obligations issued on behalf of a state or a political subdivision
<br />thereof, such that any interest derived under this Lease will qualify
<br />forexemption from Federal income taxes under section 103 of the
<br />Internal Revenue Code of 1986, as amended (the "Code"), and that it
<br />will do. or cause to be done. all things necessary to preserve and keep in
<br />full force and effect (a) its existence and (b) this Lease; (ii) the
<br />execution, delivery and performance by the Lessee of this Lease and all
<br />documents executed in connection herewith, including, without
<br />limitation, Schedule A hereto and the Delivery and Acceptance
<br />Certificate referred to in Section 3 hereof (the Lease together with all
<br />such documents shall be collectively referred to herein as the "Lease
<br />Documents") have been duly authorized by all necessary action on the
<br />part of the Lessee; (Hi) the Lease Documents each constitute a legal,
<br />valid and binding obligation of the Lessee enforceable in accordance
<br />with their respective terms; (iv) no additional governmental orders,
<br />permissions, consents, approvals or authorizations are required to be
<br />obtained and no registrations or declarations are required to be filed in
<br />connection with the execution and delivery of the Lease Documents; (v)
<br />Lessee has sufficient appropriations or other funds available to pay all
<br />Lease Payments and other amounts due hereunder for the current fiscal
<br />period; (vi) the use of the Equipment by the Lessee is essential to and
<br />will be limited to the performance by Lessee of one or more
<br />governmental functions of Lessee consistent with the permissible scope
<br />of Lessee's authority; (vii) no portion of the. Equipment will be used
<br />directly or indirectly in any trade or business carried on by any person
<br />other than Lessee; and (viii) no portion of the Equipment will be used by
<br />an organization desc~.bed in section 501 (c) (3) of the Code and (ix) this
<br />Lease does not constttute an arbitrage obligation within the meaning of
<br />section 148 of the Code and is not federally guaranteed within the
<br />meaning of section 149(b) of the Code.
<br />Lessee shall deliver to Lessor an opinion of Lessee's counsel in form
<br />and substance as set forth herein or as otherwise acceptable to Lessor.
<br />In the event that a question arises as to Lessee's qualification as a
<br />political subdivision, Lessee agrees to execute a power of attorney
<br />authorizing Lessor to make application to the Intemal Revenue Service
<br />for a letter ruling with respect to the issue.
<br />
<br />8. TITLE TO EQUIPMENT. Upon acceptance of the Equipment by
<br />Lessee hereunder, title to the Equipment will vest in Lessee subject to
<br />Lessor's rights under this Lease; provided, however, that (i) in the event
<br />of termination of this Lease pursuant to Section e hereof, (ii) upon the
<br />occurrence of an Event of Default hereunder, and as long as such Event
<br />of Default is continuing, or (iii) in the event that. the purchase option has
<br />not been exercised prior to the Expiration Date, title will immediately vest
<br />in Lessor or its assignee without any action by Lessee and Lessee shall
<br />immediately surrender possession of the Equipment to Lessor or its
<br />assignee in the manner set forth in Section 5. hereof.
<br />
<br />9. USE; REPAIRS. Lessee will use the Equipment in a careful manner
<br />for the use contemplated by the manufacturer of the Equipment.
<br />Lessee shall comply with all laws, ordinances, insurance policies and
<br />regulations relating to the possession, use, operation or maintenance of
<br />the Equipment Lessee, at its expense, will keep the Equipment in good
<br />working order and repair and fumish all parts, mechanisms and devices
<br />required therefor.
<br />
<br />10. ALTERATIONS. Lessee will not make any alterations, additions
<br />or improvements to the Equipment without Lessor's prior written
<br />consent unless such alterations, additions or improvements may be
<br />readily removed without damage to the Equipment
<br />
<br />11. LOCATION; INSPECTION. The Equipment will not be removed
<br />from or, if the Equipment consists of rolling stock, its permanent base
<br />will not be changed from the Equipment Location without Lessor's prior
<br />written consent which will not be unreasonably withheld. Lessor will be
<br />entitled to enter upon the Equipment Location or elsewhere during
<br />reasonable business hours to inspect the Equipment or observe its use
<br />and operation.
<br />
<br />12. LIENS AND TAXES. Lessee shall keep the Equipment free and
<br />clear of all levies, liens and encumbrances except those created under
<br />this Lease. Lessee shall pay, when due, all charges and taxes (local,
<br />state and federal) which may now or hereafter be imposed upon the
<br />ownership, leasing, rental, sale, purchase, possession or use of the
<br />Equipment, excluding however, all taxes on or measured by Lessor's
<br />income. If Lessee fails to pay said charges, or taxes when due, Lessor
<br />may, but need not, pay said charges or taxes and, in such event,
<br />Lessee shall reimburse Lessor therefor on demand, with interest at the
<br />maximum rate permitted by law from the date of such payment by
<br />Lessor to the date of reimbursement by Lessee.
<br />
<br />13. RISK OF LOSS; DAMAGE; DESTRUCTION. Lessee limes
<br />all risk of loss of or damage to the Equipment from an ause
<br />whatsoever, and no such loss of or damage to the Equipment n efect
<br />therein nor unfitness or obsolescence thereof shall relieve Lessee uf the
<br />obligation to make Lease Payments or to perform any other obligation
<br />under this Lease. In the event of damage to any item of Equipment,
<br />Lessee will immediately place the same in good repair with the proceeds
<br />of any insurance recovery applied to the cost of such repair. If Lessor
<br />determines that any item of Equipment is lost, stolen, destroyed or
<br />damaged beyond repair, Lessee, at the option of Lessor, will either (a)
<br />replace the same with like equipment in good repair, or (b) on the next
<br />Lease Payment Date, pay Lessor: (i) all amounts then owed by Lessee
<br />to Lessor under this Lease, including the Lease Payment due on such
<br />date, and (ii) an amount equal to the applicable Concluding Payment set
<br />forth in Schedule A opposite such Lease Payment Date. In the event
<br />that Lessee is obligated to make such payment pursuant to
<br />subparagraph (b) above with respect to less than all of the Equipment,
<br />Lessor will provide Lessee with the pro. rata amount of the' 1
<br />Payment and the Concluding Payment to be made by LesseEo .1
<br />respect to the Equipment which as suffered the event of loss.
<br />
<br />14. PERSONAL PROPERTY. The Equipment is and will remain
<br />personal property and will not be deemed to be affixed or attached to
<br />real estate or any building thereon. If requested by Lessor, Lessee will,
<br />at Lessee's expense, furnish a waiver of any interest in the Equipment
<br />from any party having an interest in any such real estate or building.
<br />
<br />15. INSURANCE. Lessee, will, at its expense, maintain at all times
<br />during the Lease Term, fire and extended coverage, public liability and
<br />property damage insurance with respect to the Equipment ,- luch
<br />amounts, covering such risks, and with such insurers as I be
<br />satisfactory to Lessor, or, with Lessor's prior written consent, n self-
<br />insure against any or all such risks. In no event will the insuran mits
<br />be less than the amount of the then applicable Concluding Payment with
<br />respect to such Equipment Each insurance policy will name Lessee as
<br />an insured and Lessor or its assigns as an additional insured, and will
<br />contain a clause requiring the insurer to give Lessor or its assigns at
<br />least thirty (30) days prior written notice of any alteration in the terms of
<br />such policy or the cancellation thereof. The proceeds of any such
<br />policies will be payable to Lessee and Lessor or its assigns as their
<br />interests may appear. Upon acceptance of the Equipment and upon
<br />each insurance renewal date, Lessee will deliver to Lessor a certificate
<br />evidencing. such insurance. In the event that Lessee has been
<br />permitted to self-insure, Lessee will furnish Lessor with a letter or
<br />certificate to such effect In the event of any loss, damage, injury or
<br />accident involving the Equipment,. Lessee will promptly provide Lessor
<br />with written notice thereof and make available to Lessor all information
<br />and documentation relating thereto and shall permit. Lessor to participate
<br />and cooperate with Lessee in making any claim for insurance in rec-
<br />thereof.
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