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<br />p-enaity o'r ei!pense to Lessee, except as to (i) the portions of Lease Payments herein agreed upon for which funds shall have been
<br />appropriated and budgeted or are otherwise available and (ii) Lessee's other obligations and liabilities under this Lease relating to, or
<br />accruing or arising prior to, such termination. In the event of such termination, Lessee agrees to peaceably surrender possession of the
<br />Equipment to Lessor or its assignee on the date of such termination in the manner set forth in Section 5 hereof and Lessor will have all
<br />legal and equitable rights and remedies to take possession of the Equipment. Notwithstanding the foregoing, Lessee agrees (i) that it will
<br />not cancel this Lease and this Lease shall not terminate under the provisions of this Section if any funds are appropriated to it, or by it,
<br />for the acquisition, retention or operation of the Equipment or other equipment or services performing functions similar to the functions of
<br />the Equipment for the fiscal period in which such termination would have otherwise occurred or for the next succeeding fiscal period, and
<br />(ii) that it will not during the Lease Term give priority in the application of funds to any other functionally similar equipment or to services
<br />performing functions similar to the functions of the Equipment. This section will not be construed so as to permit Lessee to terminate
<br />this Lease in order to purchase, lease, rent or otherwise acquire the use of any other equipment or services performing functions similar
<br />to the functions of the Equipment, and, if this Lease terminates pursuant to this Section, Lessee agrees that during the fiscal period
<br />immediately following the fiscal period in which such termination occurs it will not so purchase, lease, rent or otherwise acquire the use
<br />of any such other equipment or services.
<br />
<br />7. REPRESENTATIONS, COVENANTS AND WARRANTIES, Lessee represents, covenants and warrants as of the date hereof
<br />and at all times during the Lease Term that: (i) Lessee is a state or a fully constituted political subdivision thereof, or its obligations
<br />hereunder constitute obligations issued on behalf of a state or a political subdivision thereof, such that any interest derived under this
<br />Lease will qualify for exemption from Federal income taxes under section 103 of the Internal Revenue Code of 1986, as amended (the
<br />"Code"), and that it will do or cause to be done all things necessary to preserve and keep in full force and effect (a) its existence and (b)
<br />this Lease; (ii) the execution, delivery and performance by the Lessee of this Lease and all documents executed in connection herewith,
<br />including, without limitation, Schedule A hereto and the Delivery and Acceptance Certificate referred to in Section 3 hereof (the Lease
<br />together with all such documents shall be collectively referred to herein as the "Lease Documents") have been duly authorized by all
<br />necessary action on the part of the Lessee; (Hi) the Lease Documents each constitute a legal, valid and binding obligation of the Lessee
<br />enforceable in accordance with their respective terms; (iv) no governmental orders, permissions, consents, approvals or authorizations
<br />are required to be obtained and no registrations or declarations are required to be filed in connection with the execution and delivery of
<br />the Lease Documents; (v) Lessee has sufficient appropriations or other funds available to pay all Lease Payments and other. amounts
<br />due hereunder for the current fiscal period; (vi) the use of the Equipment by Lessee is essential to and will be limited to the performance
<br />by Lessee of one or more governmental functions of Lessee consistent with the permissible scope of Lessee's authority; (vii) no portion
<br />of the Equipment will be used directly or indirectly in any trade or business carried on by any person other than Lessee; and (viii) no
<br />portion of the Equipment will be used by an organization described in section 501 (c) (3) of the Code and (ix) this Lease does not
<br />constitute an arbitrage obligation within the meaning of section 148 of the Code and is not federally guaranteed within the meaning of
<br />section 149(b) of the Code. Lessee shall deliver to Lessor an opinion of Lessee's
<br />counsel in form and substance as set forth in the form of opinion of counsel attached hereto or otherwise acceptable to Lessor, dated the
<br />date of acceptance of the Equipment pursuant to Section 3 hereof. 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 authorizing Lessor to make application to the Internal Revenue
<br />Service for a letter ruling with respect to the issue.
<br />
<br />8. TITLE TO EQUIPMENT. Upon acceptance of the Equipment by Lessee hereunder, title to the Equipment will vest in Lessee
<br />subject to Lessor's rights under this Lease; provided, however, that (i) in the event of termination of this Lease pursuant to Section 6
<br />hereof, (ii) upon the occurrence of an Event of Default hereunder, and as long as such Event of Default is continuing, or (iii) in the event
<br />that the purchase option has not been exercised prior to the Expiration Date, title will immediately vest in Lessor or its assignee without
<br />any action by Lessee and Lessee shall immediately surrender possession of the Equipment to Lessor or its assignee in the manner set
<br />forth in Section 5 hereof.
<br />
<br />9. USE; REPAIRS. Lessee will use the Equipment in a careful manner for the use contemplated by the manufacturer of the Equip-
<br />ment. Lessee shall comply with all laws, ordinances, insurance policies and regulations relating to the possession, use, operation or
<br />maintenance of the Equipment. Lessee, at its expense, will keep the Equipment in good working order and repair and furnish all parts,
<br />mechanisms and devices required therefor.
<br />
<br />10. ALTERATIONS. Lessee will not make any alterations, additions or improvements to the Equipment without Lessor's prior
<br />written consent unless such alterations, additions or improvements may be readily removed without damage to the Equipment.
<br />
<br />11, LOCATION; INSPECTION. The Equipment will not be removed from or, if the Equipment consists of rolling stock, its
<br />permanent base will not be changed from the Equipment Location without Lessor's prior written consent which will not be unreasonably
<br />withheld. Lessor will be entitled to enter upon the Equipment Location or elsewhere during reasonable business hours to inspect the
<br />Equipment or observe its use and operation.
<br />
<br />12. LIENS AND TAXES, Lessee shall keep the Equipment free and clear of all levies, liens and encumbrances except those created
<br />under this Lease. Lessee shall pay, when due, all charges and taxes (local, state and federal) which may now or hereafter be imposed
<br />upon the ownership, leasing, rental, sale, purchase, possession or use of the Equipment, excluding however, all taxes on or measured by
<br />Lessor's income. If Lessee fails to pay said charges, or taxes when due, Lessor may, but need not, pay said charges or taxes and, in
<br />such event, Lessee shall reimburse Lessor therefor on demand, with interest at the maximum rate permitted by law from the date of such
<br />payment by Lessor to the date of reimbursement by Lessee.
<br />
<br />13, RISK OF LOSS; DAMAGE; DESTRUCTION, Lessee assumes all risk of loss of or damage to the Equipment from any cause
<br />whatsoever, and no such loss of or damage to the Equipment nor defect therein nor unfitness or obsolescence thereof shall relieve
<br />Lessee of the obligation to make Lease Payments or to perform any other obligation under this Lease. In the event of damage to any
<br />item of Equipment, Lessee will immediately place the same in good repair with the proceeds of any insurance recovery applied to the
<br />cost of such repair. If Lessor determines that any item of Equipment is lost, stolen, destroyed or damaged beyond repair, Lessee, at the
<br />option of Lessor, will either (a) replace the same with like equipment in good repair, or (b) on the next Lease Payment Date, pay Lessor:
<br />(i) all amounts then owed by Lessee to Lessor under this Lease, including the Lease Payment due on such date, and (ii) an amount
<br />
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