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<br />Page 2 <br /> <br />2. LEASE TERM. (a) Commencement of Lease Term. <br />on which the Equipment is accepted by Lessee as <br />(the Commencement Date), and shall terminate on <br />current fiscal budget period (such period being <br />Term"): provided, however, that this Agreement <br />of execution hereof. <br /> <br />The lease term shall commence on the date <br />indicated on the Certificate of Acceptance <br />the last business day of Lessee's then <br />hereinafter referred to as the "Original <br />shall be effective from and after the date <br /> <br />(b) Renewal of Lease Term. Upon expiration of the Original Term, this Lease shall <br />automatically renew on a year-to-year basis for the number of calendar periods necessary <br />to comprise the Full Lease Term as set forth in Exhibit C attached hereto and made a part <br />hereof, unless Lessee gives written notice to Lessor not less than 60 days prior to the <br />end of the then current term pursuant to subpart (e) of this section or Section 10, as the <br />case may be. Each renewal period is hereinafter referred to as a "Renewal Term", and all <br />Renewal Terms, together with the Original Term, shall comprise the "Full Lease Term". <br />The terms applicable to any Renewal Term shall be the same as the terms applicable to the <br />Original Term, except that the rent shall be as provided in the Schedule of Payments in <br />Exhibit C. <br /> <br />(c) Termination of Lease Term. The Lease Term will terminate upon the earliest to <br />occur of any of the following events: (1) the expiration of the Original Term or any <br />Renewal Term and the non renewal thereof in accordance with the terms hereof; (2) the <br />purchase of the Equipment by Lessee pursuant to Section 8 or 10; (3) a default by Lessee <br />and Lessor's election to terminate this Agreement under Section 12; or (4) the payment by <br />Lessee of all rentals authorized or required to be paid by Lessee hereunder. <br /> <br />(d) Continuation of Lease Term by Lessee. Lessee intends, subject to the provisions <br />of subpart (e) of this section, to continue the Lease Term through the Original Term 'and <br />all Renewal Terms for the Full Lease Term and to pay the rent hereunder. Lessee <br />reasonably believes that legally available funds in an amount sufficient to pay all rent <br />for the Full Lease Term can be obtained. Lessee further intends and covenants to do all <br />things lawfully within its power to obtain and maintain funds from which the rent may be <br />paid, including making provision for such rent to the extent necessary in each budget <br />submitted and adopted in accordance with law, to use its bona fide best efforts to have <br />such portion of the budget approved, and to exhaust all available reviews and appeals in <br />the event such portion of the budget is not approved. <br /> <br />(e) Nonappropriation. In the event sufficient funds are not appropriated for the <br />payment of the rent required to be paid in the next succeeding Renewal Term, and Lessee <br />has no funds legally available for rent from other sources, then Lessee may terminate this <br />Agreement at the end of the Original Term or the then current Renewal Term, as the case <br />may be, and Lessee shall not be obligated to make payment of the rent beyond the then <br />current term. Lessee agrees to deliver notice to Lessor of such termination at least 60 <br />days prior to the end of the then current term. If this Agreement is terminated under <br />this sub-part, Lessee agrees, at Lessee's cost and expense, peaceably to deliver the <br />Equipment to Lessor. In addition, Lessee agrees at Lessee's cost and expense to incur the <br />necessary costs and expenses to bring the returned sweeper and truck chassis up to factory <br />remarketing standards. To the extent lawful, Lessee covenants that it will not, until the <br />date on which the next succeeding Renewal Term would have ended, expend or commit any <br />funds for the purchase or use of equipment to be used for the same purpose as, or a <br />purpose functionally equivalent to, the Equipment. Notwithstanding anything in this <br />Agreement to the contrary, the provisions of this sub-part shall survive termination of <br />this Agreement. <br /> <br />3. REPRESENTATIONS AND COVENANTS OF LESSEE. Lessee represents, covenants and <br />warrants to Lessor as follows: (a) Lessee is an entity described in Section 103(a) of the <br />Internal Revenue Code of 1986, as amended; and will do or cause to be done all things <br />necessary to preserve and keep in full force and effect its existence as such an entity. <br />(b) Based upon the representations, covenants and warranties of Lessor, the execution and <br />delivery of this Agreement by Lessee and the performance of this obligations hereunder is <br />not prohibited by the Constitution and laws of the state specified on the Certificate of <br />Acceptance (the "State), and has been duly authorized by resolution of the governing body <br />of Lessee (a certified copy of which shall be attached to the opinion of Lessee's counsel); <br />