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<br />Lessor; (iii) the discovery by Lessor that any statement, representation, or warranty made by Lessee in this Lease
<br />or in any writing ever delivered by Lessee pursuant hereto or in connection herewith was false, misleading, or
<br />erroneous in any material respect; (iv) Lessee becomes insolvent, or is unable to pay its debts as they become
<br />due, or makes an assignment for the benefit of creditors, applies or consents to the appointment of a receiver,
<br />trustee, conservator or liquidator of Lessee or of any of its assets, or a petition for relief is filed by Lessee under
<br />any bankruptcy, insolvency, reorganization or similar laws, or a petition in, or a proceeding under, any bankruptcy,
<br />insolvency, reorganization or similar laws is filed or instituted against Lessee and is not dismissed or fully stayed
<br />within twenty (20) days after the filing or institution thereof; (v) Lessee fails to make any payment when due or fails
<br />to perform or observe any covenant, condition, or agreement to be performed by it under any other agreement or
<br />obligation with Lessor or an affiliate of Lessor and any applicable grace period or notice with respect thereto shall
<br />have elapsed or been given; or (vi) an attachment, levy or execution is threatened or levied upon or against the
<br />Equipment.
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<br />19. REMEDIES. Upon the occurrence of any Event of Default, and as long as such Event of Default is
<br />continuing, Lessor may, at its option, exercise anyone or more of the following remedies: (i) by written notice to
<br />Lessee, declare an amount equal to all amounts then due under the Lease, and all remaining Lease Payments due
<br />during the fiscal year of Lessee in which the default occurs to be immediately due and payable, whereupon the
<br />same shall become immediately due and payable; (ii) by written notice to Lessee, request Lessee to (and Lessee
<br />agrees that it will), at Lessee's expense, promptly retum the Equipment to Lessor in the manner set forth in Section
<br />5 hereof, or Lessor, at its option, may enter upon the premises where the Equipment is located and take
<br />immediate possession of and remove the same, (iii) sell or l!lase the Equipment or sublease it for the account of
<br />Lessee, holding Lessee liable for all Lease Payments and other payments due to the effective date of such selling,
<br />leasing or subleasing and for the difference between the purchase price, rental and other amounts paid by the
<br />purchaser, lessee or sublessee pursuant to such sale, lease or sublease and the amounts otherwise payable by
<br />Lessee hereunder; and (iv) exercise any other right, remedy or privilege which may be available to it under
<br />applicable laws of the state where the Equipment is then located or any other applicable law or proceed by
<br />appropriate court action to enforce the terms of this Lease or to recover damages for the breach of this Lease or to
<br />rescind this Lease as to any or all of the Equipment. In addition, Lessee will remain liable for all covenants and
<br />indemnities under this Lease and for all legal fees and other costs and expenses, including court costs, incurred by
<br />Lessor with respect to the enforcement of any of the remedies listed above or any other remedy available to
<br />Lessor.
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<br />20. PURCHASE OPTION. Upon thirty (30) days prior written notice from Lessee, and provided that there is no
<br />Event of Default, or an event which with notice or lapse of time, or both, could become an Event of Default, then
<br />existing, Lessee will have the right to purchase the Equipment on any Lease Payment date set forth in Schedule A
<br />hereto by paying to Lessor, on such date, the Lease Payment then due together with the Concluding Payment
<br />amount set forth in Schedule A opposite such date. Upon satisfaction by Lessee of such purchase conditions,
<br />Lessor will transfer any and all of its right, title and interest in the Equipment to Lessee AS IS, WITHOUT
<br />WARRANTY, EXPRESS OR IMPLIED, except Lessor will warrant that the Equipment is free and clear of any liens
<br />created by Lessor.
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<br />21. TAX ASSUMPTION; COVENANTS. Lessee hereby covenants with respect to this Lease that it will (i) ensure
<br />that its obligation to pay Lease Payments is not directly or indirectly secured by any interest in property, other than
<br />the Equipment, and that such payments will not be direclly or indirectly secured by or derived from any payments
<br />of any type or any fund other than Lessee's General Fund; (ii) not take any action or permit or suffer any action to
<br />be taken or condition to exist if the result of such action or condition would be to cause its obligation to make
<br />Lease Payments to be guaranteed, directly or indirectly, in whole or in part, by the United States or by any agency
<br />or instrumentality thereof; (iii) neither take any action (including, without limitation, entering into any lease,
<br />sublease, output contract, management contract, take-or-pay contract or other arrangement) nor omit to take any
<br />action if the result of such action or omission would be to cause the interest portion of each Lease Payment to
<br />become includable in the income of Lessor for purposes of federal, state or local income tax; (iv) provide (or cause
<br />to be provided) to Lessor such other information as Lessor may reasonably request from Lessee to enable Lessor
<br />to fulfill tax filing, audit and litigation obligations, including, but not limited to, federal and state income tax filing
<br />obligations; and (v) timely file a statement with respect to this Lease in the form required by Section 149(e) of the
<br />Intemal Revenue Code of 1986, as amended.
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<br />Page: 5 of 7
<br />Document: texesagr.doc rev.0397
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