MUNICIPAL LEASING ASSOCIATES, INC.

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4. TERM. The terms and conditions of this Lease shall become effective upon the authorized execution of the Lease by the parties hereto. The term of leasing each item of Property acquired hereunder commences and terminates as of the dates designated in the applicable Schedule. 5. COVENANTS OF. CITY: CITY represents, covenants and warrants to CORPORATION that: ( a ) CITY is a political subdivision of the state of California with the power and authority to enter into this Lease. (b) CITY'S governing body has duly authorized the execution and delivery of this Lease and further represents and warrants that all requirements have been met and procedures followed to ensure its enforceability. (c) The Property being leased is essential to the CITY in the performance of its governmental functions and its estimated useful life in the CITY'S possession exceeds the term of the Lease. (d) Throughout the term of the Lease, the Property will be used for performing one or more governmental functions consistent with the permissible scope of CITY'S authority and will not be used in a trade or business of any person, or entity other than the CITY except for uses by community services organizations as prescribed in the Education Code. ( e ) Throughout the term of the Lease, CITY will take such action as may be necessary to include Lease payment obligations in its annual budget and to make reasonable and diligent efforts to annually appropriate lawfully available revenues in an amount sufficient to make the annual .Lease payments as they fall due. (f) Upon CORPORATION'S written request, CITY will provide CORPORATION with current financial statements, budgets and proof of appropriation for each fiscal year. ( g ) CITY shall take- necessary steps to comply with federal laws and regulations relative to preserving the tax-exempt status of this .Lease including, but not limited to, the requirements set forth in Section 30 herein. 6. RENT. CITY SHALL PAY CORPORATION RENT IN THE AMOUNTS AND AT THE TIMES SET FORTH IN THE SCHEDULE, AT THE OFFICE OF CORPORATION OR TO SUCH OTHER PERSON OR AT SUCH OTHER PLACE AS CORPORATION MAY FROM TIME TO TIME DESIGNATE IN WRITING. Subject to the section of this agreement entitled "EARLY TERMINATION", the obligation to pay rent will be absolute and unconditional in all events, and will not be subject'to set-off, defense, abatement, reduction, counterclaim, or recoupment for any reason whatsoever.. Should CITY fail to pay any part of the rent herein reserved within fifteen (15) days from .the due date thereof, CITY shall be in default hereunder, and upon CORPORATION'S written request, CITY shall pay interest on such delinquent payment from the date said payment was due until paid at the legal rate of twelve percent (12%) per annum or the maximum legal rate, whatever is less. CITY shall pay rent exclusively F,