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consent. Lessee shall use the Equipment in a careful manner and shall at all times, at its sole expense, keep
<br />the Equipment in good operating condition, repair and appearance and comply with all laws, ordinances,
<br />regulations or requirements of any governmental authority, official, board or department relating to its
<br />installation, possession, use or maintenance. Lessee shall not make any alterations, additions, or
<br />improvements to the Equipment that are not readily removable without causing material damage to or
<br />materially reducing the value of the Equipment. To the extent legally possible and practical given the nature
<br />of the Equipment, all alterations, additions, or improvements not readily removable shall become property of
<br />Lessor. For avoidance of doubt, the Lessor and Lessee have agreed that the Lessee is permitted to add
<br />controllers, wi-fi capability, and other modifications related to the Lessee's control over and usefulness and
<br />energy efficiency of the Equipment.
<br />8. Security Interest; Title to Equipment. To secure the performance of all of Lessee's obligations
<br />hereunder, Lessee hereby grants to Lessor, and Lessor shall have and retain, a security interest constituting a
<br />first priority and perfected lien and security interest on the Equipment delivered hereunder and on any
<br />attachments, proceeds, warranty rights or other payments from the Vendor, and other amounts related thereto.
<br />As further security therefor, Lessee hereby grants to Lessor a first priority security interest in the cash and
<br />negotiable instruments from time to time in the Escrow Fund and all proceeds (cash and non-cash) thereof.
<br />Lessee agrees to execute and deliver such additional documents, including, without limitation, opinions of
<br />counsel, financing statements, notices and similar instruments, in form satisfactory to Lessor, that Lessor
<br />deems necessary or appropriate to establish and maintain its first priority and perfected security interest in
<br />the Equipment or for the confirmation or perfection of Lessor's rights hereunder. To the extent possible,
<br />Lessee further agrees that Lessor shall have all the rights and remedies of a secured party under the applicable
<br />Uniform Commercial Code. Lessee, at its expense, will protect and defend Lessee's rights in the Equipment
<br />and Lessor's rights and interests therein and will keep the Equipment free and clear from any and all claims,
<br />liens, encumbrances and legal processes of Lessee's creditors and other persons. Lessor shall have the right
<br />during normal hours, upon reasonable prior notice to Lessee, to enter upon any premises owned by the Lessee
<br />and where the Equipment is located in order to inspect the Equipment.
<br />(b) Solely with respect to Equipment that is not comprised of vehicles and during the Lease Term, ownership
<br />and legal title of all of the Equipment and all substitutions, repairs, modifications, and replacements shall be
<br />in Lessee, and Lessee shall take all necessary action to vest such ownership and title in Lessee. Lessor does
<br />not own the Equipment, and, by this Lease Agreement, Lessor is merely financing the acquisition of the
<br />Equipment for the Lessee. Lessor has not been in the chain of title, does not operate, control or have
<br />possession or control over the Equipment, or Lessee's use, maintenance, operation, storage, or maintenance
<br />of the Equipment. Lessee is entitled to use and possession of the Equipment, subject to the rights of Lessor
<br />hereunder (including its interest in the Equipment as the lessor hereunder). If Lessor terminates this Lease
<br />Agreement pursuant to Paragraph 16 hereof or an Event of Nonappropriation occurs hereunder, Section 16(c)
<br />of this Lease Agreement shall be applicable. Lessee, at its expense, will protect and defend Lessee's rights
<br />in the Equipment and Lessor's rights and interests therein and will keep the Equipment free and clear from
<br />any and all claims, liens, encumbrances and legal processes of Lessee's creditors and other persons.
<br />(c) As further security therefor, Lessee hereby agrees with respect thereto that Lessor shall have all the rights
<br />and remedies of a secured party under the applicable Uniform Commercial Code with respect to any and all
<br />Equipment hereunder, except that Lessor willl not have the right to repossess, use and/or re -sell or re -let that
<br />portion of the Equipment consisting of licensed software or programming that the repossession, use and/or
<br />re -sale or re-leasing of which is expressly prohibited by law or applicable licensing agreement. In lieu of the
<br />foregoing, Lessee agrees to purge any software and programming from its operating systems and destroy any
<br />hard or electronic copies of such software and programming. Upon Lessor's request, Lessee will provide
<br />Lessor with reasonable certifications as to the foregoing.
<br />9. Personal Property. To the extent the following is not contrary to the laws of the State (including,
<br />without limitation, the California Uniform Commercial Code), the Equipment shall be deemed to be personal
<br />property notwithstanding the manner in which it may be attached or affixed to realty. At Lessor's request
<br />City of Santa Ana / Holman Capital Corporation Page 3 of I1
<br />Equipment Lease -Purchase Agreement April 6, 2018
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