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200412247 Lpon payment in full by the City of basic rents payable under this .agreement, the City shall acquire Cull legal title to the Project and Heartland shall execute and deliver to the City a special %varranty deed or such other instrument of conveyance as may then be required to convey unencumbered fee title and exclusive ownership. possession and use of the Project to the City without demand or further action on the part of the City. Heartland agrees that all 1Pases, man- aeement contracts and other similar encumbrances, on the Project shall terminate i1pon the Citv completing payment of basic rents due under this .agreement. The City reserves the right to pre- pay basic rentals due under this .agreement at any time. For purposes of this Agreement basic rents shall be conclusively deemed to have been paid in full when all Building Bonds issued to pay costs of the Project have been paid in full or under the terms of the Building Bond Indenture are no lon=er outstanding. 9. COVENANTS OF CITY. The City covenants that it is a city of the first class of the State of Nebraska, organized under Neb. Rev. Stat., Chapter 16, as amended, with full and lawful power and authority to enter into this agreement as a lease pursuant to Neb. Rev. Stat., § 19 -3421 and that it has taken all actions necessary to lawfully enter into this agreement. The City covenants that the lease rentals payable under this agreement do not exceed any limitation imposed by law. The Citv covenants that throughout the term of this agreement it will observe all taxa- tion, budget and spending limitations now or hereafter imposed by law. The City covenants and agrees that it shall levy and collect annually taxes, which may be either ad valorem taxes upon all the taxable property in the City under Neb. Rev. Stat., § 16 -702 as now or hereafter amended or any successor statutory provision thereto) or sales and use taxes under Neb. Rev. Stat. § §77- 27,142 to 77- 27,148 (as now or hereafter amended or any successor statutory provision thereto) sufficient in rate and amount to pay the basic rents and all additional rent due hereunder. Receipts from such taxes in each year sufficient to pay the basic rent due hereunder shall be placed in a separate account of the City's general fund or otherwise segregated and applied to make the payments of basic rent due hereunder. The City covenants to include each fiscal year during the term of this agreement in its annual budget appropriations sufficient to pay the amounts due hereunder during each budget year on the understanding that such commitment is a continuing contractual obligation of the City and not subject to discretion as to each such year, all in accordance with the authorization for contractual commitments set forth in Neb. Rev. Stat., § 19 -2421. The City covenants that it shall not take or omit any action that would have the effect of causing interest on the Building Bonds issued by Heartland for the Project to be no longer excludable from gross income under the Code. The City covenants that it will take any action necessary to establish exemption of the Project from property taxes. The City covenants that it will, before the Building Bonds are issued, adopt a resolution stating that it will accept title to the Project when the Building Bonds are discharged consistent with the requirements of Rev. Proc. 82 -26. I ()