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discharge your obligations under this Agreement. Notwithstanding
<br />any provision of this Agreement to the contrary, we and you agree
<br />that, in the event that prior to the commencement of any of your
<br />fiscal years you do not have sufficient funds appropriated to make
<br />the Payments due under this Agreement for such fiscal year, you
<br />will have the option of terminating this Agreement as of the date of
<br />the commencement of such fiscal year by giving us sixty (60) days
<br />prior written notice of your intent to terminate. No later than the last
<br />day of the last fiscal year for which appropriations were made for
<br />the Payments (the "Return Date"), you will return to us all of the
<br />Units, at your sole expense, in accordance with Section 14, and this
<br />Agreement will terminate on the Return Date without penalty or
<br />expense to you and you will not be obligated to pay the Lease
<br />Payments beyond such fiscal year; provided, that you will pay all
<br />Payments for which moneys have been appropriated or are
<br />otherwise available; and provided further, that you will pay
<br />month -to -month rent at the rate set by us for each month or part of
<br />any month that you fail to return the Units.
<br />8. Tax Warranty You will, at all times, do and perform all acts and
<br />things necessary and within your control to ensure that the interest
<br />component of the Lease Payments will, for the purposes of Federal
<br />income taxation, be excluded from our gross income. You will not
<br />permit or cause your obligations under this Agreement to be
<br />guaranteed by the Federal Government or any branch or
<br />instrumentality of the Federal Government. You will use the Units
<br />for the purpose of performing one or more of your governmental
<br />functions consistent with the scope of your authority and not in any
<br />trade or business carried on by a person other than you. You will
<br />report this Agreement to the Internal Revenue Service by filing
<br />Form 8038G, 8038GC or 8038, as applicable. Failure to do so will
<br />cause this Agreement to lose its tax exempt status. You agree that
<br />if the appropriate form is not filed, the interest rate payable under
<br />this Agreement will be raised to the equivalent taxable interest rate.
<br />If the use, possession or acquisition of the Units is determined to be
<br />subject to taxation, you will pay when due all taxes and
<br />governmental charges assessed or levied against or with respect to
<br />the Units.
<br />S. Assignment You may not, without our prior written consent, by
<br />operation of law or otherwise, assign, transfer, pledge, hypothecate
<br />or otherwise dispose of your right, title and interest in and to this
<br />Agreement andlor the Units andlor grant or assign a security
<br />interest in this Agreement andlor the Units, in whole or in part. We
<br />may not transfer, sell, assign, pledge, hypothecate, or otherwise
<br />dispose of our right, title and interest in and to this Agreement
<br />andlor the Units andlor grant or assign a security interest in this
<br />Agreement andlor the Units, in whole or in part.
<br />10. Indemnity To the extent permitted by law, you assume liability for,
<br />agree to and do indemnify, protect and hold harmless us and our
<br />employees, officers, directors and agents from and against any and
<br />all liabilities, obligations, losses, damages, injuries, claims,
<br />demands, penalties, actions, costs and expenses (including
<br />reasonable attorney's fees), of whatsoever kind and nature, arising
<br />out of the use, condition (including, but not limited to, latent and
<br />other defects and whether or not discoverable by you or us),
<br />operation, ownership, selection, delivery, storage, leasing or return
<br />of any item of Units, regardless of where, how and by whom
<br />operated, or any failure on your part to accept the Units or
<br />otherwise to perform or comply with any conditions of this
<br />Agreement.
<br />11. 11. Insurance; Loss and Damage You bear the entire risk of loss,
<br />theft, destruction or damage to the Units from any cause
<br />whatsoever. No loss, theft, destruction or damage of the Units will
<br />relieve you of the obligation to make Lease Payments or to perform
<br />any obligation owing under this Agreement. You agree to keep the
<br />Units insured to protect all of our interests, at your expense, for
<br />such risks, in such amounts, in such forms and with such
<br />companies as we may require, including but not limited to fire and
<br />extended coverage insurance, explosion and collision coverage,
<br />and personal liability and property damage liability insurance. Any
<br />insurance policies relating to loss or damage to the Units will name
<br />us as loss payee as our interests may appear and the proceeds
<br />may be applied toward the replacement or repair of the Units or the
<br />satisfaction of the Payments due under this Agreement. You agree
<br />to use, operate and maintain the Units in accordance with all laws,
<br />regulations and ordinances and in accordance with the provision of
<br />any policies of insurance covering the Units, and will not rent the
<br />Units or permit the Units to be used by anyone other than you. You
<br />agree to keep the Units in good repair, working order and condition
<br />and house the Units in suitable shelter, and to permit us or our
<br />assigns to inspect the Units at any time and to otherwise protect our
<br />interests in the Units. If any Unit is customarily covered by a
<br />maintenance agreement, you will furnish us with a maintenance
<br />agreement by a party acceptable to us.
<br />12. Default; Remedies An "Event of Default" will occur if (a) you fail to
<br />pay any Payment when clue and such failure continues for ten (10)
<br />days after the due date for such Payment or (b) you fail to perform
<br />or observe any other covenant, condition, or agreement to be
<br />performed or observed by you under this Agreement and such
<br />failure is not cured within twenty (20) days after written notice of
<br />such failure from us. Upon an Event of Default, we will have all
<br />rights and remedies available under applicable law. In addition, we
<br />may declare all Lease Payments due or to become due during the
<br />fiscal year in which the Event of Default occurs to be immediately
<br />due and payable by you andlor we may repossess the Units by
<br />giving you written notice to deliver the Units to us in the manner
<br />provided in Section 14, or in the event you fail to do so within ten
<br />(10) days after receipt of such notice, and subject to all applicable
<br />laws, we may enter upon your premises and lake possession of the
<br />Units. Further, if we financed your obligations under any extended
<br />warranty agreement such as an Equipment Protection Plan,
<br />Extended Service Contract, Extended Warranty, Customer Service
<br />Agreement, Total Maintenance and Repair Agreement or similar
<br />agreement, we may cancel such extended warranty agreement on
<br />your behalf and receive the refund of the extended warranty
<br />agreement fees that we financed but had not received from you as
<br />of the date of the Event of Default.
<br />13. Miscellaneous This Agreement may not be modified, amended,
<br />altered or changed except by a written agreement signed by you
<br />and us. In the event any provision of this Agreement is found invalid
<br />or unenforceable, the remaining provisions will remain in full force
<br />and effect. This Agreement, together with exhibits, constitutes the
<br />entire agreement between you and us and supersedes all prior and
<br />contemporaneous writings, understandings, agreements,
<br />solicitations, documents and representations, expressed or implied.
<br />Any terms and conditions of any purchase order or other documents
<br />submitted by you in connection with this Agreement which are in
<br />addition to or inconsistent with the terms and conditions of this
<br />Agreement will not be binding on us and will not apply to this
<br />Agreement. You agree that we may correct patent errors in this
<br />Agreement and fill in blanks including, for example, correcting or
<br />filling in serial numbers, VIN numbers, and dates. Any notices
<br />required to be given under this Agreement will be given to the
<br />parties in writing and by certified mail at the address provided in this
<br />Agreement, or to such other addresses as each party may
<br />substitute by notice to the other, which notice will be effective upon
<br />its receipt.
<br />14. Title; Return of Units Notwithstanding our designation as "Lessor,"
<br />we do not own the Units. Legal title to the Units will be in you so
<br />long as an Event of Default has not occurred, and you have not
<br />US Governmental Equipment Lease -Purchase Agreement
<br />4000554 22/091202012:10:07 PM Ref. 676890
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