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Section 3.04. Purchase Option Price. Wth respect to each Schedule, upon 30 days written notice, Lessee shall have the option to pay, in addition to any
<br />Rental Payment due thereunder, the corresponding Purchase Option Price which is listed on the same line on Exhibit B to such Schedule. If Lessee chooses
<br />this option and pays the Purchase Option Price to Lessor then Lessor will transfer any and all of its rights, title and interest in the Equipment subject to such
<br />Lease to Lessee.
<br />Section 3.05. Lease Term. The Lease Term of each Lease shall be the Original Term and all Renewal Terms thereunder until all the Rental Payments due
<br />thereunder are paid as set forth in the applicable Schedule except as provided under Section 4.01 and Section 9.01 below. If, after the end of the budgeting
<br />process which occurs at the end of the Original Term or any Renewal Term, Lessee has not terminated a Lease pursuant to Section 4.01 hereof then the
<br />Lease Term for such Lease shall be extended into the next Renewal Term and the Lessee shall be obligated to make the Rental Payments that come due
<br />during such Renewal Term.
<br />Section 3.06. Disclaimer of Warranties. LESSOR MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE
<br />VALUE, DESIGN, CONDITION, MERCHANTABILITY, AND FITNESS FOR PARTICULAR PURPOSE OR ANY OTHER WARRANTY WITH RESPECT TO
<br />THE EQUIPMENT. LESSOR SHALL NOT BE LIABLE FOR ANY INCIDENTAL, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGE ARISING OUT OF
<br />THE INSTALLATION, OPERATION, POSSESSION, STORAGE OR USE OF THE EQUIPMENT BY LESSEE.
<br />IV. Non - Appropriation
<br />Section 4.01. Non - Appropriation. If insufficient funds are available in Lessee's budget for the next Budget Year to make the Rental Payments for the next
<br />Renewal Term under any Lease, then Lessee shall have the option to non - appropriate the funds to pay the Rental Payments for the next Renewal Term with
<br />respect to such Lease. Lack of a sufficient appropriation shall be evidenced by the passage of an ordinance or resolution by the governing body of Lessee
<br />specifically prohibiting Lessee from performing its obligations under such Lease for a designated Budget Year and all subsequent Budget Years. If Lessee
<br />chooses this option, then all obligations of the Lessee under such Lease regarding Rental Payments for all remaining Renewal Terms shall be terminated at
<br />the end of the then current Original Term or Renewal Term without penalty or liability to the Lessee of any kind provided that if Lessee has not delivered
<br />possession of the Equipment subject to such Lease to Lessor as provided herein and conveyed to Lessor or released its interest in such Equipment by the
<br />end of the last Budget Year for which Rental Payments were paid, the termination shall nevertheless be effective but Lessee shall be responsible for the
<br />payment of damages in an amount equal to the amount of the Rental Payments thereafter coming due under Exhibit "B" to the Schedule for such Lease
<br />which are attributable to the number of days after such Budget Year during which Lessee fails to take such actions and for any other loss suffered by Lessor
<br />as a result of Lessee's failure to take such actions as required. Lessee shall immediately notify the Lessor as soon as the decision to non - appropriate is
<br />made. If such non - appropriation occurs, then Lessee shall deliver the Equipment to Lessor or to a location designated by Lessor at Lessee's expense.
<br />Lessee shall be liable for all damage to the Equipment other than normal wear and tear. If Lessee fails to deliver such Equipment to Lessor, then Lessor
<br />may enter the premises where such Equipment is located and take possession of the Equipment and charge Lessee for costs incurred.
<br />V. Insurance, Damage, Insufficiency of Proceeds, Indemnification
<br />Section 5.01. Insurance. Lessee shall maintain both casualty insurance and liability insurance at its own expense with respect to the Equipment. Lessee
<br />shall be solely responsible for selecting the insurer(s) and for making all premium payments and ensuring that all policies are continuously kept in effect
<br />during the term of any Lease. Lessee shall provide Lessor with a Certificate of Insurance, which lists the Lessor and/or assigns as a loss payee and an
<br />additional insured on the policies with respect to the Equipment.
<br />(a) Lessee shall insure the Equipment against any loss or damage by fire and all other risks covered by the standard extended coverage
<br />endorsement then in use in the State and any other risks reasonably required by Lessor in an amount at least equal to the then applicable
<br />Purchase Option Price of the Equipment. Alternatively, Lessee may insure the Equipment under a blanket insurance policy or policies.
<br />(b) The liability insurance shall insure Lessor from liability and property damage in any form and amount satisfactory to Lessor.
<br />(c) Provided that, with Lessor's prior written consent, Lessee may self - insure against the risks described in (a) and (b) above. Lessee shall furnish
<br />Lessor evidence of such self - insurance coverage throughout each Lease Term. Lessee shall not materially modify or cancel such self- insurance
<br />coverage without first giving written notice thereof to Lessor at lease 10 days in advance of such cancellation or modification.
<br />(d) All insurance policies issued or affected by this Section shall be so written or endorsed such that the Lessor and its assignees are named
<br />additional insured and loss payees and that all losses are payable to Lessee and Lessor or its assignees as their interests may appear. Each
<br />policy issued or affected by this Section shall contain a provision that the insurance company shall not cancel or materially modify the policy
<br />without first giving thirty 30 days advance notice to Lessor or its assignees. Lessee shall furnish to Lessor certificates evidencing such coverage
<br />throughout each Lease Term.
<br />Section 5.02. Damage to or Destruction of Equipment. Lessee assumes the risk of loss or damage to the Equipment. If the Equipment or any portion thereof
<br />is lost, stolen, damaged, or destroyed by fire or other casualty, Lessee will immediately report all such losses to all possible insurers and take the proper
<br />procedures to attain all insurance proceeds. At the option of Lessor, Lessee shall either (1) apply the Net Proceeds to replace, repair or restore the
<br />Equipment or (2) apply the Net Proceeds to the applicable Purchase Option Price. For purposes of this Section and Section 5.03, the term Net Proceeds
<br />shall mean the amount of insurance proceeds collected from all applicable insurance policies after deducting all expenses incurred in the collection thereof.
<br />Section 5.03. Insufficiency of Net Proceeds. If there are no Net Proceeds for whatever reason or if the Net Proceeds are insufficient to pay in full the cost of
<br />any replacement, repair, restoration, modification or improvement of the Equipment, then Lessee shall, at the option of Lessor, either complete such
<br />replacement, repair, restoration, modification or improvement and pay any costs thereof in excess of the amount of the Net Proceeds or apply the Net
<br />Proceeds to the Purchase Option Price and pay the deficiency, if any, to the Lessor.
<br />Section 5.04. Lessee Negligence. Lessee assumes all risks and liabilities, whether or not covered by insurance, for loss or damage to the Equipment and
<br />for injury to or death of any person or damage to any property whether such injury or death be with respect to agents or employees of Lessee or of third
<br />parties, and whether such property damage be to Lessee's property or the property of others including, without limitation, liabilities for loss or damage
<br />related to the release or threatened release of hazardous substances under the Comprehensive Environmental Response, Compensation and Liability Act,
<br />the Resource Conservation and Recovery Act or similar or successor law or any state or local equivalent now existing or hereinafter enacted which in any
<br />manner arise out of or are incident to any possession, use, operation, condition or storage of any Equipment by Lessee which is proximately caused by the
<br />negligent conduct of Lessee, its officers, employees and agents. Lessee hereby assumes responsibility for and agrees to reimburse Lessor for all liabilities,
<br />obligations, losses, damages, penalties, claims, actions, costs and expenses including reasonable attorneys' fees of whatsoever kind and nature, imposed
<br />on, incurred by or asserted against Lessor that in any way relate to or arise out of a claim, suit or proceeding, based in whole or in part upon the negligent
<br />conduct of Lessee, its officers, employees and agents, to the maximum extent permitted by law.
<br />VI. Title and Security Interest
<br />Section 6.01. Title. Title to the Equipment shall vest in Lessee when Lessee acquires and accepts the Equipment. Title to the Equipment subject to a Lease
<br />will automatically transfer to the Lessor in the event Lessee non - appropriates under Section 4.01 with respect to such Lease or in the event Lessee defaults
<br />under Section 9.01 with respect to such Lease. In either of such events, Lessee shall execute and deliver to Lessor such documents as Lessor may request
<br />to evidence the passage of legal title to the Equipment subject to such Lease to Lessor.
<br />Section 6.02. Security Interest. To secure the payment of all Lessee's obligations under each Lease, Lessee hereby grants to Lessor a security interest
<br />under the Uniform Commercial Code constituting a first lien on the Equipment described more fully on Exhibit "A" to each Schedule. The security interest
<br />established by this section includes not only all additions, attachments, repairs and replacements to the Equipment but also all proceeds therefrom. Lessee
<br />agrees that Lessor or its assignee may execute such additional documents including financing statements, affidavits, notices, and similar instruments, for
<br />and on behalf of Lessee which Lessor deems necessary or appropriate to protect Lessor's interest in the Equipment and in this Agreement and each Lease.
<br />Lessee authorizes Lessor to record such documentation as necessary for Lessor to perfect its security interest.
<br />Section 6.03. Personal Property. The Equipment is and shall at all times be and remain personal property notwithstanding that the Equipment or any part
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