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<br /> such personal property taxes if Lessee promptly notifies Lessor in writing of the commencement of any such
<br /> contest proceedings and thereafter promptly responds in writing in an accurate and complete manner to any
<br /> inquiries that Lessor may have with respect thereto; provided, Lessee shall continue to have the right to contest
<br /> such personal property taxes only so long as such contest proceedings do not result in any enforcement,
<br /> collection, foreclosure or forfeiture proceeding, or any levy or execution, which remains unstayed or unbonded
<br /> for a period of five (5) consecutive business days. Lessee shall not have the right to contest any other fees,
<br /> assessments or taxes payable by Lessee hereunder without the prior wTitten consent of Lessor. It is also
<br /> expressly agreed that Lessee will obtain prior written permission ITom Lessor before it asserts on either its or
<br /> Lessor's behalf any ta.x immunity based on Lessor's status as a Texas State Banle This Section is not intended
<br /> to, and does not, transfer incidents of ownership ITom Lessor to Lessee.
<br /> ~ 17. LESSEE'S F ~URE TO PAY TAXES, INSURANCE, ETc. If Lessee fails to make any payment
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<br /> ¡ or to do any act required hereunder, then Lessor shall have the right, but not the obligation, to make the
<br /> payment or do the act, without notice to or demand on Lessee, and without releasing Lessee ITom any contract
<br /> obligation, and to pay, purchase, contest or compromise any encumbrance, charge or lien which Lessor judges
<br /> to affect the Equipment or Lessor's rights therein. In exercising such right, Lessor may incur any liability and
<br /> expend any amount which in its absolute discretion it deems necessary. All sums Lessor so incurs or spends
<br /> shall be, without demand, to the extent permitted by law, immediately due and payable by Lessee to Lessor,
<br /> and shall bear interest ITom the date so inCUITed or spent, whichever is earlier, until paid in full to Lessor at the
<br /> Overdue Rate.
<br /> 18. TAX MATTERS. Lessee hereby represents, waITants, covenants and agrees that:
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<br /> a. Lessee is a public entity of the State, the interest on whose obligations of indebtedness is
<br /> exempt ITom federal and state income taxation. .
<br /> b. Lessee will take no action that would cause the interest portion of the rental payments that
<br /> will become due under this Lease (the "Interest Portion") to become subject to federal or State income
<br /> ta.xation, and will take or cause its officials, officers, employees and agents to take all action lawfully within
<br /> its powers necessary to cause the Interest Portion to remain so ta.x-exempt. Should the IRS disallow the tax-
<br /> exempt status of the Interest Portion as a result of any act or omission by Lessee, including, but not limited
<br /> to, Lessee's ceasing to be a tax-exempt entity, then, to the extent permitted by law, Lessee shall be required
<br /> to pay additional sums to the Lessor or its assignees so as to bring the after-tax yield to the same level as the
<br /> Lessor or its assignees would attain if the Interest Portion continued to be tax-exempt.
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<br /> c. Lessee hereby designates this Lease as a "qualified tax-exempt obligation" as defined in
<br /> Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code"). To preserve the validity
<br /> of such designation, Lessee (I) will take no action or not fail to take action if such action so taken or not taken,
<br /> respectively, would cause this Lease to be a "private activity bond" as defined in Section 141 of the Code;
<br /> (ii) reasonably expects that the aggregate face amount of all ta.x-exempt obligations issued or to be issued by
<br /> Lessee and all subordinate entities thereof during the calendar year in which this Lease is datèd, including this
<br /> Lease, will not exceed $10,000,000.00 (excluding (A) "private activity bonds" as defined in Section 141 of the
<br /> Code, except qualified 501(c)(3) bonds as defined in Section 145 of the Code, and (B) current refunding
<br /> obligations, to the extent that the amount of the refunding obligation does not exceed the outstanding amount
<br /> of the refunded obligation); and (iii) Lessee will not designate more than $10,000,000.00 of obligations issued
<br /> by Lessee and all subordinate entities thereof as "qualified tax exempt obligations" for purposes of
<br /> Section 265(b)(3) of the Code.
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