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<br /> is continuing, Lessee may at its option pay to Lessor the sum of ONE DOLLAR ($1.00), whereupon title to the
<br /> Equipment shall remain vested in Lessee and Lessor will transfer any and all of its right, title and interest in the
<br /> Equipment to Lessee as is, where is, without warranty, express or implied, ~xcept that Lessor will warrant to
<br /> Lessee that the Equipment is free and clear of any liens created by Lessor.. This option shall be exercised by
<br /> written notice to Lessor given within the thirty (30) day period prior to the last day of the Lease Term.
<br /> 16. LESSEE CERTIFICATION. Lessee warrants that it is a state, or a political subdivision thereof, as
<br /> referred to Section 103 of the Internal Revenue Code of 1986, as amended (the "Code") and the related regulations
<br /> and rulings thereunder, or the District of Columbia, and that Lessee's obligation under this Lease constitutes an
<br /> enforceable obligation issued on behalf of a state or political subdivision. thereof, such that any interest income
<br /> derived under this Lease and Due Lessor or its assignee, including but not limited to those amounts designated
<br /> as interest in Exhibit B, will qualify for exclusion from gross income of Federal income taxes by Lessor, its assignee,
<br /> and any participants with such, under Section 103 of the Code. Lessee further warrants that (a)' this Lease
<br /> represents a valid obligation of Lessee, payable on an annual basis out of current revenues of Lessee for the
<br /> amount herein set forth and that Lessee has the legal capacity to enter into the same and is not in contravention
<br /> of any town/city, district, county, or state statute, rule, regulation, or other governmental provision; and (b) during
<br /> the Lease Term, the Equipment will be used by Lessee only for the purpose of performing governmental or
<br /> proprietary functions of Lessee consistent with the permissible scope of Lessee's authority and will not be used
<br /> in a trade or business of any person or entity other than Lessee. In the event that a question arises as to Lessee's
<br /> qualification as a state or political subdivision under Section 103 of the Code, Lessee agrees to execute a power
<br /> of attorney authhorizing Lessor to make application to the Internal Revenue Service for a letter ruling with respect
<br /> to the issue.
<br /> 17. ESSENTIAL USE. It is Lessee's intent to make Rental Payments for the full Lease Term if funds are
<br /> legally available therefor and in that regard Lessee represents that: (a) the use of the Equipment is essential to
<br /> its proper, efficient and economic functioning or to the services that it provides to its citizens; (b) Lessee has an
<br /> immediate need for and expects to make immediate use of substantially all the Equipment which is not temporary
<br /> or expected to diminish in the foreseeable future; and (c) the Equipment will be used by Lessee only for the
<br /> purpose of performing one or more of its governmental or propertietary functions consistent with the permissible
<br /> scope of its authority.
<br /> 18. INDEMNIFICATION. To the extent permitted by Texas law, Lessee agrees to indemnify Lessor against,
<br /> and hold Lessor harmless from, any and all claims, actions, proceedings, expenses, damages, liabilities or losses,
<br /> including attorney's fees and court costs arising in connection with the Equipment, including but not limited to its
<br /> selection, purchase, delivery, possession, use, operation or return and the recovery of claims under insurance
<br /> policies thereon.
<br /> 19. ASSIGNl\-lENT. Without Lessor's prior written consent, Lessee will not: (a) assign, transfer, pledge,
<br /> hypothecate or grant any security interest in or otherwise dispose of this Lease or the Equipment or any interest
<br /> in this Lease or the Equipment; or (b) sublet or lend the Equipment or permit it to be used by anyone other than
<br /> Lessee or Lessee's employees. Lessor, without the consent of Lessee, may assign its right, title and interest in
<br /> and to this Lease, the Equipment and any other documents executed with respect to this Lease, and/or grant or
<br /> assign a security interest in this Lease and the Equipment, in whole or in part. Any such assignees shall have all
<br /> of the rights of Lessor under this Lease. Subject to the foregoing, this Lease inures to the benefit of and is binding
<br /> upon the heirs, executors, administrators, successors and assigns of the parties hereto. Ally assignment or
<br /> reassignment of any of Lessor's right, title or interest in this Lease or the Equipment shall be effective upon
<br /> receipt by Lessee of a duplicate original of the counterpart document by which the assignment or reassignment
<br /> is made, disclosing the name and address of each such assignee and, where applicable, to whom further payments
<br /> hereunder should be made. Notwithstanding the above, Lessor may assign any interest in this Lease upon terms
<br /> which provide that the assignor or assignee will act as a collection and paying agent ("Agent") for holders of
<br /> certificates of participation in this Lease, provided Lessee receives written notification of the name and address
<br /> of the Agent and a copy of the agency agreement. During the Lease Term, Lessee covenants that it will keep a
<br /> complete and accurate record of all assignments in form necessary to comply with Code Section 149 and the
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