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<br />A portion of each rental payment hereunder is paid as, and represents payment of: interest, and Schedule B of
<br />Exhibit "A" hereto sets forth the interest component of each rental payment.
<br />
<br />6. OWNERSHIP; GRANT OF SECURITY INTEREST. The Equipment shall be registered in the name of Lessee
<br />and, if applicable, Litle thereto shan be evidenced by a certificate(s) of title, or such other instrument(s) as may be required by
<br />or utilized under the laws of the State (as hereinafter defined) to demonstrate ownership (the "Certiflcate(s)"). Such
<br />Certificate(s) shall be held at all times during the term of this Lease by Lessor and shall expressly state thereon (a) that Lessor
<br />holds a lien on the Equipment, (b) that Lessee's possession of the Equipment is subject to this Lease, and (c) any other
<br />information required by applicable law and that may be necessary or convenient, as determined by Lessor, to establish Lessor's
<br />rights, title and interest as the first secured lienholder of the Equipment. With respect to replacement parts, additions,
<br />modifications, repairs and accessories hereafter incorporated in and/or attached to the Equipment, Lessor shall have a secured
<br />interest therein upon such incorporation or attachment to the Equipment and lien-free title thereto (not including the lien of
<br />.r ~ssor) shall be transferred to Lessor, without compensation to Lessee, upon termination of this Lease, except as otherwise
<br />pressly provided herein. Lessee does hereby grant to Lessor a security interest in all of its right, title and interest in, to and
<br />ising hereunder, the Equipment described herein and the proceeds of both to secure the payment and performance by Lessee
<br />of all of its liabilities and obligations arising hereunder and, in addition, all other obligations, liabilities or indebtedness of
<br />Lessee to Lessor, of any kind or character, direct or indirect, contingent or absolute, whether now existing or hereafter arising
<br />or incurred. This Agreement constitutes a security agreement and/or pledge agreement which pledges the Equipment to the
<br />Lessor to secure performance of this Agreement by Lessee. Lessor shall have all of the rights and remedies of a secured party
<br />under the Uniform Commercial Code of the State of Texas (the "State") and other applicable law in addition to all of its rights
<br />and remedies under the terms and conditions hereof. Lessee agrees to execute and file Uniform Commercial Code Financing
<br />Statements and any and all other documents and instruments necessary to perfect Lessor's interest in this Lease, the Equipment
<br />and the payments due hereunder. Upon termination of this Lease, subject to the exercise by Lessee of any purchase option, if
<br />any, hereunder, Lessee shall, without charge to Lessor, take all actions necessary and reasonably requested by Lessor to transfer
<br />ownership of the Equipment to Lessor, including, without limitation, transfer of title under the Certificate(s).
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<br />7. REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE. Lessee represents, warrants and
<br />covenants to Lessor as follows:
<br />
<br />a. Lessee is and will remain, to the extent within Lessee's control, a body corporate and politic, duly
<br />organized and existing as a political subdivision under the Constitution and laws of the State.
<br />
<br />b. Lessee is fully authorized and permitted, and has received all authorizations, consents and approvals of
<br />governmental bodies or agencies necessary, if any, to enter into this Lease and to execute any and all documentation required
<br />herein, to lease the Equipment upon the terms set forth herein and to perform the terms of this Lease and all other documents
<br />ecuted in connection herewith, none of which conflicts with any provisions of the Constitution or laws of the State,
<br />~ulations, ordinances, judgments or orders of public authorities applicable to Lessee.
<br />
<br />c. The governing body of Lessee has heretofore adopted the resolution attached hereto as Exhibit liB" and
<br />incorporated herein by reference authorizing the appropriate officials of Lessee to execute and deliver this Lease and all other
<br />documents relating hereto.
<br />
<br />d. This Lease, and all other documents executed or delivered in connection herewith are, and throughout the
<br />term of this Lease shall remain, valid and binding legal obligations of Lessee, and each is and shall remain enforceable in
<br />accordance with its terms.
<br />
<br />e. The execution, delivery and performance by Lessee of this Lease and all other documents relating hereto
<br />will not result in any breach of the terms or conditions of any agreement or instrument under which Lessee is a party or is
<br />obligated, and Lessee is not in default in the performance or observance of any obligations, covenants or conditions of any such
<br />agreement or instrument.
<br />
<br />f. No actions, suits or proceedings are pending or threatened against Lessee, nor, to the best of Lessee's
<br />knowledge, is there any basis therefor, that might adversely affect the payment by Lessee of the rental payments under this
<br />Lease, the performance by Lessee of its other obligations arising hereunder or under any documents executed in connection
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