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Lessee represents, covenants and warrants that: (i) it will do or cause to be done all things necessary to
<br />preserve and keep the Lease in full force and effect, (ii) it has complied with all laws relative to public bidding
<br />where necessary, and (iii) it has sufficient appropriations or other funds available to pay all amounts due
<br />hereunder for the current fiscal period.
<br />If Lessee breaches the covenant contained in this Section, the interest component of Lease Payments
<br />may become includible in gross income of the owner or owners thereof for federal income tax purposes. In
<br />such event, notwithstanding anything to the contrary contained in Section 11 of this Agreement, Lessee agrees
<br />to pay promptly after any such determination of taxability and on each Lease Payment date thereafter to Lessor
<br />an additional amount determined by Lessor to compensate such owner or owners for the loss of such
<br />excludibility (including, without limitation, compensation relating to interest expense, penalties or additions to
<br />tax), which determination shall be conclusive (absent manifest error). Notwithstanding anything herein to the
<br />contrary, any additional amount payable by Lessee pursuant to this Section 5 shall be payable solely from
<br />Legally Available Funds.
<br />It is Lessor's and Lessee's intention that this Agreement not constitute a "true" lease for federal income
<br />tax purposes and, therefore, it is Lessor's and Lessee's intention that Lessee be considered the owner of the
<br />Equipment for federal income tax purposes.
<br />7. TITLE TO EQUIPMENT; SECURITY INTEREST. Upon shipment of the Equipment to Lessee
<br />hereunder, title to the Equipment will vest in Lessee subject to any applicable license; provided, however, that
<br />(i) in the event of termination of this Lease by Lessee pursuant to Section 5 hereof; or (ii) upon the occurrence
<br />of an Event of Default hereunder, and as long as such Event of Default is continuing, title will immediately vest
<br />in Lessor or its Assignee, and Lessee shall immediately discontinue use of the Equipment, remove the
<br />Equipment from Lessee's computers and other electronic devices and deliver the Equipment to Lessor or its
<br />Assignee. In order to secure all of its obligations hereunder, Lessee hereby (i) grants to Lessor a first and prior
<br />security. interest .in any and all right; ..title ._and -.interest ofLessee,_in.. the _Equipment -and --in all additions,
<br />attachments, accessions, and substitutions thereto, and on any proceeds therefrom; (ii) agrees that this Lease
<br />may be filed as a financing statement evidencing such security interest; and (iii) agrees to execute and deliver
<br />all financing statements, certificates of title and other instruments necessary or appropriate to evidence such
<br />security interest.
<br />8. USE; REPAIRS. Lessee will use the Equipment in a careful manner for the use contemplated by
<br />the manufacturer of the Equipment and shall comply with all laws, ordinances, insurance policies, the Contract,
<br />any licensing or other agreement, and regulations relating to, and will pay all costs, claims, damages, fees and
<br />charges arising out of the possession, use or maintenance of the Equipment. Lessee, at its expense will keep the
<br />Equipment in good repair and furnish and/or install all parts, mechanisms, updates, upgrades and devices
<br />required therefor.
<br />9. ALTERATIONS. Lessee will not make any alterations, additions or improvements to the
<br />Equipment without Lessor's prior written consent unless such alterations, additions or improvements may be
<br />readily removed without damage to the Equipment.
<br />10. LOCATION; INSPECTION. The Equipment will not be removed from, [or if the Equipment
<br />consists of rolling stock, its permanent base will not be changed from] the Equipment Location without Lessor's
<br />prior written consent which will not be unreasonably withheld. Lessor will be entitled to enter upon the
<br />Equipment Location or elsewhere during reasonable business hours to inspect the Equipment or observe its use
<br />and operation.
<br />11. 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 />CLEAN SHORT FORM SIMPLIFIED LEASE rev 7.28,16
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