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<br />conditions or provisions of such obligation; (vii) in authorizing and executing this Lease, Lessee has complied with
<br />all open meeting laws and other laws applicable to this Lease and the acquisition by Lessee of the Equipment;
<br />(viii) Lessee has appropriated and/or taken other lawful actions necessary to provide moneys sufficient to pay all
<br />Lease Payments required to be paid under this Lease during the current fiscal period of Lessee; (ix) during the
<br />Lease Term, the Equipment will be used solely by employees, officers and officials of Lessee to perform only
<br />essential govemmental functions of Lessee consistent with the scope of Lessee's authority; (x) the payment by
<br />Lessor of the cost of the Equipment does not substitute, in whole or in part, for Lessee making such payment from
<br />funds of Lessee which have been raised or earmarked for the purpose of paying such cost or any part thereof; (xi)
<br />money in the General Fund may be withdrawn by Lessee at any time for lawful purposes, including general
<br />expenses and debt service payments of Lessee, and there is therefore no reasonable assurance that amounts
<br />held in the General Fund would be available if needed to pay the Lease Payments in the event Lessee encounters
<br />financial difficulties; (xii) Lessee does not expect to dispose of the Equipment before the termination of this
<br />Lease; and (xiii) no other obligations of Lessee which will be paid out of the General Fund (or which will have
<br />substantially the same claim as this Lease to be paid out of the General Fund) have been or will be issued by
<br />Lessee at substantially the same time as this Lease.
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<br />Lessee shall deliver to Lessor an opinion of Lessee's counsel in form and substance as set forth herein or as
<br />otherwise acceptable to Lessor.
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<br />8. TITLE TO EQUIPMENT. Upon acceptance of the Equipment by Lessee hereunder, title to the Equipment
<br />will vest in Lessee subject to Lesso~s rights under this l!ease; provided, however, that (i) in the event of
<br />termination of this Lease pursuant to Section 6 hereof, (ii) upon the occurrence of an Event of Default hereunder,
<br />and as long as such Event of Default is continuing, or (iii) in the event that the purchase option has not been
<br />exercised prior to the Expiration Date, title will immediately vest in Lessor or its assignee without any action by
<br />Lessee and Lessee shall immediately surrender possession of the Equipment to Lessor or its assignee in the
<br />manner set 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
<br />manufacturer of the Equipment. Lessee shall comply with all laws, ordinances, insurance policies and regulations
<br />relating to the possession, use, operation or maintenance of the Equipment. Lessee, at its expense, will keep the
<br />Equipment in good working order and repair and fumish all parts, mechanisms and devices required therefor.
<br />
<br />10. ALTERATIONS. Lessee will not make any alterations, additions or improvements to the Equipment
<br />without Lesso~s prior written consent unless such alterations, additions or improvements may be readily removed
<br />without damage to the Equipment.
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<br />11. LOCATION; INSPECTION. The Equipment will not be removed from or, if the Equipment consists of
<br />rolling stock, its permanent base will not be changed from the Equipment Location without Lesso~s prior written
<br />consent which will not be unreasonably withheld. Lessor will be entitled to enter upon the Equipment Location or
<br />elsewhere during reasonable business hours to inspect the Equipment or observe its use and operation.
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<br />12. LIENS AND TAXES. Lessee shall keep the Equipment free and clear of all levies, liens and
<br />encumbrances except those created under this Lease. Lessee shall pay, when due, all charges and taxes (local,
<br />state and federal) which may now or hereafter be imposed upon the ownership, leasing, rental, sale, purchase,
<br />possession or use of the Equipment, excluding however, all taxes on or measured by Lesso~s income. If Lessee
<br />fails to pay said charges, or taxes when due, Lessor may, but need not, pay said charges or taxes and, in such
<br />event, Lessee shall reimburse Lessor therefor on demand, with interest at the maximum rate permitted by law
<br />from the date of such payment by Lessor to the date of reimbursement by Lessee.
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<br />13. RISK OF LOSS; DAMAGE; DESTRUCTION. Lessee assumes all risk of loss of or damage to the
<br />Equipment from any cause whatsoever, and no such loss of or damage to the Equipment nor defect therein nor
<br />unfitness or obsolescence the,reof shall relieve Lessee of the obligation to make Lease Payments or to perform
<br />any other obligation under this Lease. In the event of damage to any item of Equipment, Lessee will immediately
<br />place the same in good repair with the proceeds of any insurance recovery applied to the cost of such repair. If
<br />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
<br />Payment Date, pay Lessor: (i) all amounts then owed by Lessee to Lessor under this Lease, including the Lease
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<br />Plge: 3 of 7
<br />Document: lexasagr.doc rev.0397
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