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<br /> then Lessee shall either: (a) immediately replace the Lost Equipment with similar equipment in good repair, condition and
<br /> working order free and clear of any Liens (except Lessor's Liens) and deliver to Lessor a bill of sale covering the replacement
<br /> equipment. in which event such reDlacement eauiDment shall automatically be EquiDment under the applicable Lease: or (b) on
<br /> the next scheduled Rent Payment date, pay Lessor (I) all amounts owed by Lessee under the applicable Lease, including the
<br /> Rent Payment due on such date plus (ii) an amount equal to the applicable Termination Value set forth in the Payment
<br /> Schedule to the applicable Lease. If Lessee is making such payment with respect to less than all of the Equipment under a
<br /> Lease, then Lessor will provide Lessee with the pro rata amount of the Rent Payment and Termination Value to be paid by
<br /> Lessee with respect to the Lost Equipment.
<br /> 13.4 Lessee shall bear the risk of loss for, shall pay directly, and shall defend against any and all claims, liabilities,
<br /> proceedings, actions, expenses (including reasonable attorney's fees), damages or losses arising under or related to any
<br /> Equipment, including, but not limited to, the possession, ownership, lease, use or operation thereof. These obligations of
<br /> Lessee shall survive any expiration or termination of any Lease. Lessee shall not bear the risk of loss of, nor pay for, any
<br /> claims, liabilities, proceedings, actions, expenses (including attorney's fees), damages or losses which arise directly from
<br /> events occurring after any Equipment has been returned by Lessee to Lessor in accordance with the terms of the applicable
<br /> Lease or which arise directly from the gross negligence or willful misconduct of Lessor.
<br /> 14. INSURANCE.
<br /> 14.1 (a) Lessee at its sole expense shall at all times keep all Equipment insured against all risks of loss or damage
<br /> from every cause whatsoever for an amount not less than the Termination Value of the Equipment. Proceeds of any such
<br /> insurance covering damage or loss of any Equipment shall be payable to Lessor as loss payee. (b) Lessee at its sole expense
<br /> shall at all times carry public liability and property damage insurance in amounts reasonably satisfactory to Lessor protecting
<br /> Lessee and Lessor from liabilities for injuries to persons and damage to property of others relating in any way to any
<br /> Equipment. Proceeds of any such public liability or property insurance shall be payable first to Lessor as additional insured to
<br /> the extent of its liability, and then to Lessee.
<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 that the
<br /> insurer give Lessor at least 30 days prior written notice of any cancellation of such policy and will require that Lessor's interests
<br /> remain insured regardless of any act, error, misrepresentation, omission or neglect of Lessee. The insurance maintained by
<br /> Lessee shall be primary without any right of contribution from insurance which may be maintained by Lessor.
<br /> 15. PURCHASE OPTION. Upon thirty (30) days prior written notice by Lessee to Lessor, and so long as there is no Event of
<br /> Default then existing, Lessee shall have the option to purchase all, but not less than all, of the Equipment covered by a Lease
<br /> on any Rent Payment due date by paying to Lessor all Rent Payments then due (including accrued interest, if any) plus the
<br /> Termination Value amount set forth on the Payment Schedule to the applicable Lease for such date. Upon satisfaction by
<br /> Lessee of such purchase conditions, Lessor shall release its Lien on such Equipment and Lessee shall retain its title to such
<br /> Equipment "AS-IS, WHERE-IS", without representation or warranty by Lessor, express or implied, except for a representation
<br /> that such Equipment is free and clear of any Liens created by Lessor.
<br /> 16. LESSEE'S REPRESENTATIONS AND WARRANTIES. With respect to each Lease and its Equipment, Lessee hereby
<br /> represents and warrants to Lessor that:
<br /> (a) Lessee has full power, authority and legal right to execute and deliver the Lease and to perform its obligations
<br /> under the Lease, and all such actions have been duly authorized by appropriate findings and actions of Lessee's governing
<br /> body;
<br /> (b) the Lease has been duly executed and delivered by Lessee and constitutes a legal, valid and binding obligation of
<br /> Lessee, enforceable in accordance with its terms;
<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;
<br /> (d) the execution, delivery and performance by Lessee of its obligations under the Lease will not result in a breach or
<br /> violation of, nor constitute a default under, any agreement, lease or other instrument to which Lessee is a party or by which
<br /> Lessee's properties may be bound or affected;
<br /> (e) there is no pending, or to the besìof Lessee's knowledge threatened, litigation of any nature which may have a
<br /> material adverse effect on Lessee's ability to perform its obligations under the Lease; and
<br /> MLD 01 (4/26/96) ,
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