BOARD OF DIRECTORS MEETING SEPTEMBER 16, 2016 12:30 P.M.

MCLENNAN COUNTY APPRAISAL DISTRICT 315 S. 26TH STREET

WACO, TEXAS 76710

1 OF 3

AGENDA MEETING CALLED TO ORDER BUSINESS SESSION

ITEMS REQUIRING BOARD ACTION

1. MINUTES OF JUNE 27, 2016 MEETING.

2. CONSIDER AUTHORIZING FURTHER LEGAL ACTION IN REGARDS TO 2014-3336-4

SANDY CREEK ENERGY ASSOCIATES.

3. REVIEW PROCEDURE FOR SOLICITATION OF HOMESTEAD EXEMPTION AUDIT

SERVICES.

4. CONSIDER RESCINDING ACTION TAKEN ON MAY 24, 2016, AND APPROVING CONTRACT

FOR HOMESTEAD EXEMPTION AUDIT SERVICES.

5. CONSIDER RESOLUTION 2016-3 REAFFIRMING ADOPTION OF 2017-2018 REAPPRAISAL

PLAN.

6. CONSIDER LINE ITEM CHANGES TO THE APPROVED BUDGET.

7. RESOLUTION 2016-4 TO EXPEND RESERVE FUNDS FOR LITIGATION PURPOSES.

8. RESOLUTION 2016-5 APPROVING AND AUTHORIZING AN AMENDED PROPERTY

LEASE/PURCHASE AGREEMENT FOR THE REFINANCING OF THE MCLENNAN COUNTY

APPRAISAL DISTRICT OFFICE.

PUBLIC COMMENT

DISCUSSION ITEMS

1. DISCUSS 2014-3336-4 SANDY CREEK ENERGY ASSOCIATES.

2. DISCUSS POSSIBLE SEWER LIFT STATION COURSES OF ACTION AND RESPECTIVE

COSTS.

3. REVIEW AND DISCUSS INTERIM FINANCIAL REPORTS.

BOARD OF DIRECTORS MEETING SEPTEMBER 16, 2016 12:30 P.M.

MCLENNAN COUNTY APPRAISAL DISTRICT 315 S. 26TH STREET

WACO, TEXAS 76710

2 OF 3

MANAGEMENT AND COMMITTEE REPORTS

1. TAXPAYER LIAISON REPORT. EXECUTIVE SESSION

(NOTE FOR THIS ITEM: THE BOARD OF DIRECTORS WILL BE IN CLOSED SESSION FOR THIS ITEM) a. The appointment, employment, evaluation, reassignment, duties, discipline, or dismissal of an officer or employee,

supervisor, chief appraiser (Tex. Govt. Code Sec.551.074)(a)

b. A private consultation with the Board's attorney on matters in which the duty of the attorney to the governmental body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with the Open Meetings Act or pending or contemplated litigation, as authorized by law (Tex. Govt. Code Section 551.071 2010-3715-5, 2010-3164-5 PREM SAI INC , 2012-3811-3 C & N JOINT VENTURE, 2012-3588-5 CLEMENTS JASON & JILL, 2012-4001-5 KEY HOTEL INVESTMENTS LTD , 2013-3788-4 PREM SAI INC, 2012-3724-5 KRISHNA RAM, 2012-3723-5 WALGREEN COMPANY , 2013-3120-4 BRAZOS CONDOS, 2013-3711-4 HOLLYWOOD THEATRES, 2013-3838-4 C &N JOINT VENTURE, 2014-3336-4 SANDY CREEK ENERGY ASSOCIATES, 2014-3244-5 BRAUDAWAY ENTERPRISE, LLC. , 2014-3248-4 SMV WACO GREENVIEW , 2014-3249-5 GRAYHAWKSDENE LP, 2014-3449-5 TARGET CORPORATION, LP, 2014-3858-5 LAKESHOREPARTNERSLP, 2014-3906-5 PROJECT COUNTRY PLACE. LTD, 2014-4029-4 DELMAR MATERIALS, 2015-3319-4 WACO VIEW PROPERTIES, 2015-3314-5 CATERPILLAR WORK TOOLS INC, 2015-3262-5 BAT RIVERBEND LLC, 2015-3249-5 WGC BAYLOR LP, 2015-3286-5 BUENGER O C , 2015-3444-5 DUKE REALTY WACO DEVELOPMENT, 2015-3519-4 DWIGHTS DISCOUNT VACUUM, 2015-3527-5 BIG DIAMOND LLC, 2015-3520-4 MCDONALD CHARLESM & DWIGHT KRZYWONSKI, 2015-3573-5 2509 LAKESHORE PARTNERS LP, 2015-3550-4 HUNTER-MANKINS LLP, 2015-3532-5 ASPEN HEIGHTS WACO PROJECT LTD, 2015-3665-5 CHICK-FIL-A INC, 2015-3666-5 MFT LUXE. LLC, 2015-3667-5 MFT RESIDENCE LLC, 2015-3699-4 BETTY DENTON, 2015-3769-4 WI-ERI WACO CY PROPERTY, LP, 2015-3768-4 WI-ERI WACO H PROPERTY LP, 2015-3833-4 LG VALLEY MILLS 35 LLC & GANDER MOUNTAIN CO, 2016-2862-5 AUTOZONE, INC, 2016-2931-5 SUPREME BRIGHT WACO II LLC, 2016-2942-4 DHRUVKISH PARTNERS LTD, 2016-2945-3 BDR WACO INVESTMENTS INC, 2016-2950-5 CN SPICEWOOD APARTMENTS LP, 2016-2970-5 SPRING WACO LP, 2016-3000-4 DUKE REALTY (SEAVEST), 2016-3002-5 BRAZOS CONDOS I LP, 2016-3003-4 BRAZOS RIVER PARTNERSHIP, 2016-3004-4 WESTDALE PROPERTIES, 2016-3033-4 BRIAN E. HOWELL AND LEANNE L. HOWELL, 2016-3126-4 MCDONALDS REAL ESTATE CO, 2016-3116-5 CBL RM-WACO, LLC RICHLAND MALL , 2016-3133-4 SANDY CREEK ENERGY ASSOCIATES, 2016-3135-5 CHICK FIL A , INC, 2016-3134-5 AUTOZONE TEXAS L.P AUTOZONE WEST INC, 2016-3159-5 INDIAN RIDGE LLC & PECAN CREEK PARTNERSHIP LTD, 2016-3153-4 IN-N-OUT BURGERS, 2016-3139-4 KEY HOTEL DBA INDIGO HOTEL, 2016-3150-5 JUSTIN & LESLIE SANDERSON, 2016-3238-5 TRUE ORCHIDS OF TEXAS LLC, 2016-3234-4 AMBASSADOR RESIDENCE LLC, 2016-3235-5 FRENCH QUARTER LLC, 2016-3237-4 TENNYSON ARMS LLC, .

If, during the course of the meeting covered by this notice / agenda, the Board may lawfully conduct a closed meeting as to all or part of any item on the agenda, then, in accordance with applicable law, the Board will conduct a closed meeting in accordance with the Texas Open Meetings Act, Government Code, Chapter 551, and Subchapter D. The Board shall not conduct a closed meeting unless a quorum of the Board first convenes in an open meeting for which proper notice has been given. Before any closed meeting is conducted, the presiding officer will publicly identify the section or sections of the Open Meetings Act or other applicable law authorizing the closed meeting. All final votes, actions, or decisions regarding any matter deliberated in a closed meeting shall only be taken in open meeting for which proper notice has been given. The Board of Directors will reconvene in open session and may take action on items discussed in closed session.

BOARD OF DIRECTORS MEETING SEPTEMBER 16, 2016 12:30 P.M.

MCLENNAN COUNTY APPRAISAL DISTRICT 315 S. 26TH STREET

WACO, TEXAS 76710

3 OF 3

BUSINESS SESSION (CONTINUED) OTHER ITEMS

1. ACTION ON ITEMS DISCUSSED IN CLOSED SESSION. 2. NEXT MEETING DATE IS SET FOR NOVEMBER 2, 2016 AT 9:00 A.M.

3. ADJOURNMENT.

McLENNAN COUNTY APPRAISAL DISTRICT BOARD OF DIRECTORS MEETING

JULY 27, 2016 9:00 A.M. McLennan County Appraisal District

315 S. 26th St. Waco, TX 76710

The Board of Directors of the McLennan County Appraisal District met at 9:00 a.m. on Wednesday, July 27, 2016, at the McLennan County Appraisal District, 315 S. 26Th St., Waco, TX 76710. The notice of such meeting was duly posted by 5:00 p.m., July 22, 2016.

The members present for the meeting were: Mr. John Kinnaird, Chairman, Mr. Ivan Green, Mr. Ben Perry, Mrs. Mildred Watkins, Mr. Allen Sykes and Mr. Randy Riggs. Also present at the meeting were Mr. Andrew Hahn, Mr. Joe Bobbitt, Ms. Erin O’Brate, Mrs. Lisa Gonzalez, Mrs. Betty Sanchez and Mr. Robert Meyers.

John Kinnaird called the meeting to order at 9:07 a.m.

Items for Board Action:

Item #1 Minutes of the May 24, 2016 meeting were reviewed. The minutes were approved as submitted. No opposition.

Item #2 Public Hearing for the 2017 Budget: Mr. Hahn presented 2017 budget for board and public.

Item #3 Review and Approve 2017 Budget: Ben Perry motioned to approve 2017 Budget. Mildred Watkins seconded. No opposition.

Item #4 Public Hearing for the 2017-2018 Reappraisal Plan: This item was moved to present after the discussion of the values downtown. Mr. Hahn presented the reappraisal plan.

Item #5 Review and Approve 2017-2018 Reappraisal Plan: Allen Sykes motioned to accept the reappraisal plan. Ivan Green seconded. No opposition.

Item #6 Review Homestead Audit Proposals from Linebarger Goggan Blair & Sampson, LLP and Lexis Nexis: Mr. Hahn and Joe Don Bobbitt present plans and explain costs and processes of each plan. Different payment plans, cost and contract terms were discussed. Allen Sykes concerned about budget constraints. John Kinnaird wants more information from other districts that have used similar services. Ben Perry motioned to pursue contract agreement and down payment negotiations with Linebarger. Ivan Green seconded. John Kinnaird opposed, all others for the motion. Motion passed.

McLENNAN COUNTY APPRAISAL DISTRICT BOARD OF DIRECTORS MEETING

JULY 27, 2016 9:00 A.M. McLennan County Appraisal District

315 S. 26th St. Waco, TX 76710

Public Comment:

Megan Henderson, Steve Cates, Shane Turner, David Sykora, Edward Vallejo, Pat Musgrave, Jessica Addison, Steve Sorrells, Jonas Theill and Rita Jones.

Discussion Items:

Item #1 Review and Discuss Interim Financial Reports: Mr. Hahn presented financials to the board.

Item #2 Discussion of appraised values, property characteristics, data collection, valuation methods, and notification and protest procedures on properties within the City of Waco Central Business District: Don Whitney gave presentation. Mr. Hahn and Mr. Whitney spoke about Appraisal Methods and requirements of the district.

Management and Committee Reports:

Item #1 Taxpayer Liaison Report: Betty Sanchez presented report.

Item #2 Tax Payers that addressed the board: Donna Burzynski and Joe Howard Buchanan.

Item #3 Chief Appraiser Report: Mr. Hahn presented Chief Appraiser Update.

Executive Session: No Executive Session.

The next meeting date has been tentatively set for sometime during the last week of September.

There is no other business to come before the board; the meeting adjourned at 11:58 a.m.

__________________________________________ Allen Sykes, Secretary

SANDY CREEK COSTS

2014 2014 2015 2015 2016 2016TIME EXP TIME EXP TIME EXP

11,509.03$ 297.60$ 31,696.77$ 109,905.64$ 196,203.02$ 283,732.65$

PETE RUSEK (PD): 13,448.06$

TOTAL COSTS: 646,792.77$

.. LINEBARGER GOGGAN BLAIR & SAMPSON, LLP

RECEIVED SEP 0 8 20li

McLENNAN CAD

Mr. Andrew J. Hahn, Jr. Chief Appraiser McLennan County Appraisal District P.O. Box 2297 Waco, Texas 76703-2297

Dear Mr. Hahn:

ATIORNEYS AT LAW

P. 0 . BOX 17428 AUSTIN, TEXAS 78760

512/447-6675 FAX 512/634-3 789

September 6, 2016

Ken Oden Direct Line: 512/634-381 2

Email: ken.oden@lgbs.com

It has come to my attention that a question has been raised as to whether services the Linebarger law furn has agreed to perform under an Agreement for Homestead Exemption Audit Services are "Professional Services" under applicable Texas law.

The determination of whether a service is properly classified as a Professional Service is dependent on the type of service and the specific facts related to the type of work to be done under the contract in question. It is unlikely that anyone could make an informed assessment of the question without receiving that factual information. The facts applicable to this contract seem to clearly fit into the definition of "Professional Services". I would be happy to share the scope of work and type of services with any person advising you or the Board. I am confident that more extensive information sharing would resolve any questions on the matter.

In the interest of assisting any third party review of this issue, I offer the following summary of some the relevant points which, taken together, seem to make the determination clear:

1. Legal services are included in the type of services regarded as "Professional Services" under Texas law.

2. The contract, by its own terms, establishes an attorney-client relationship between the Appraisal District and the Linebarger firm. This clarifies the intentions of the parties and provides certain benefits and protections to the Appraisal District.

Mr. Andrew J. Hahn, Jr. September 6, 2016 Page2

3. The proposed services, do not consist exclusively, or even primarily, of producing a list of properties or property owners compiled by computer-based data analytics, which may then be used as an investigative tool by the Appraisal District staff to determine if the identified properties are properly receiving homestead exemption designation. There apparently was some confusion on this issue which may have affected a third party opinion. That type of "target list" investigative tool is a product produced and sold by other vendors. The mere production and sale of such an investigative tool is not what Linebarger contracts for under its Agreements for Homestead Exemption Audits. Our firm develops such a tool, then takes that basic information and conducts whatever property-specific factual and legal analyses that are necessary, and ultimately reaches the actual determination of whether the legal and factual realities of each property on the investigative "target list" does actually qualify for the exemption that is presently assigned to that property. The end product of our Audit allows the client to send notice of the change of status of the exemption on the specific properties and then provides the support, analysis and defense of those conclusions, if further challenged, allowing the client to make informed decisions to allow or disallow the exemptions based on our work product. In this sense, the subject contract contemplates a "turnkey" set of services.

4. The determination of the appropriateness of a homestead exemption, which the Appraisal District can legally rely on, in many cases, requires legal analyses that cannot effectively, or legally, be done by non-attorneys. The application of specific facts to the legal determinations we contract to perform in these Audits routinely includes such questions as:

~ legal title and legal ownership of property; ~ the meaning of legal instruments (deeds, leases, declarations of domicile or

residency, records of birth, death, etc.); ~ the effects of ancillary legal proceedings such as probate, marriage, divorce, and

inheritance; ~ the legal effects of other designations related to the property or the record owner,

such as concurrent claims made in other legal procedures (short term rental designations, commercial and business use designations, etc.);

~ the legal effects of property tax designations in other States; and, ~ many other areas of legal research, advice and interpretation.

This work requires legal knowledge, legal training, legal interpretation and legal counsel in order to ultimately advise our Homestead Exemption Audit client that certain specific properties are receiving legally inappropriate designations as homesteads. Linebarger's legal work, beyond the creation of a "target list", actually concludes with a factually and legally supported legal NOTICE to the property owner, necessary for the removal of the inappropriate

Mr. Andrew J. Hahn, Jr. September 6, 2016 Page 3

exemption, and subsequent exchange regarding the correct legal status, with the owner and/or the owner's attorney, if there is a challenge to Linebarger's legal conclusions on which the NOTICE is based.

Our Homestead Exemption Audits require legal analysis, legal expertise and legal judgment in the proper application of the Texas Property Tax Code, and other laws, to the details of a specific exemption on specific properties. Importantly, the end result is the issuance of legal opinions, for compensation, to a client. I know of no way for a non-attorney to legally issue such opinions or render such services. For all of these reasons, such services fall under the guidelines for classification of the services as "Professional Services", under the law.

If there is any concern about the correctness of this conclusion, or the facts on which it is based, we invite consultation with qualified legal specialists on these matters and are available to provide legal and factual support for our conclusions, if needed.

Partner and General Counsel Linebarger Goggan Blair & Sampson, LLP

cc: Mr. Ivan Green 433 Richie Rd. Lorena, Texas 76655

Honorable John Kinnaird P.O. Box 32681 Waco, Texas 76703

Honorable Ben Perry P.O. Box 648 Waco, Texas 76703

Honorable Randy Riggs 7204 Sandera Drive Waco, Texas 76710-4058

.•

Mr. Andrew J. Hahn, Jr. September 6, 2016 Page4

Mr. Allen Sykes 2504 Eldridge Lane, Waco, Texas 76710-1015

Ms. Mildred Watkins 1307 Victoria St. Waco, Texas 76705-2230

Resolution 2016-3

RESOLUTION TO

REAFFIRM ADOPTION OF REAPPRAISAL PLAN

WHEREAS, Texas Property Tax Code §6.05(i) requires the Board of Directors to biennially adopt a written plan for the periodic reappraisal of all property with the appraisal district and to hold a public hearing to consider the proposed plan; and,

WHEREAS, in accordance with Texas Property Tax Code §6.05(i), the Board of Directors of the

McLennan County Appraisal District prepared the 2017-2018 Reappraisal Plan for the McLennan County Appraisal District and gave notice to the presiding officer of the governing body of each taxing unit participating in the district of the date, time and place that the Board of Directors intended to hold a public hearing on the proposed plan; and,

WHEREAS, the Board of Directors of the McLennan County Appraisal District held a public hearing

on July 27, 2016 on the proposed 2017-2018 Reappraisal Plan for the McLennan County Appraisal District and found that the proposed plan met the requirements of Texas Property Tax Code §25.18 and determined that it was in the public interest that the McLennan County Appraisal District adopt the 2017-2018 Reappraisal Plan for the McLennan County Appraisal and approved the 2017-2018 Reappraisal Plan for the McLennan County Appraisal District,

NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE McLENNAN COUNTY APPRAISAL DISTRICT: That it reaffirms the approval and adoption of the 2016 Reappraisal Plan for the McLennan County Appraisal District on July 27, 2016 by the Board of Directors of the McLennan County Appraisal District in accordance with Texas Property Tax Code §6.05(i). PASSED AND APPROVED THIS THE _________ DAY OF SEPTEMBER, 2016 _________________________________________ Allen Sykes, Acting Chair Person

CURRENT BUDGET ADJUSTMENT ADJUSTED

BUDGETAMOUNT AMOUNT AMOUNT REASON

5201 APPRAISAL REVIEW BOARD 82,000.00$ 7,177.37$ 89,177.37$ 16 members- in case we need 5 panels and/or to allow time off5401 MAINTENANCE-BUILDING 10,000.00$ 7,000.00$ 17,000.00$ Lift Station - $5,469, Fire Alarm Panel Failure - $3,748; Total $9,2172 5601 DEBT SVC INTEREST-BLDG 70,415.00$ 31,000.00$ 101,415.00$ Additional interest to refinance building

TRANSFER 45,177.37$

6000 CONTINGENCY FUND 134,800.00$ 45,177.37$ 89,622.63$ **Original 2016 Contingency amt. $150,000

3004 LITIGATION FUND 400,000.00$ (400,000.00)$ -$ Transfer Litigation Fund monies to Court Costs 5320-25320-2 COURT COSTS 200,000.00$ 400,000.00$ 600,000.00$ Transferred $400k from Litigation Fund

3005 GENERAL RESERVE 211,281.79$

175,000.00$ AMT POTENTIALLY LEFT IN 2016 BUDGET AT YR END (NOT INCLUDING CONTINGENCY)

16-09-16

MCLENNAN COUNTY APPRAISAL DISTRICTLINE ITEM CHANGES TO THE 2016 BUDGET

Resolution 2016-4

RESOLUTION TO

EXPEND RESERVE FUNDS FOR LITIGATION PURPOSES

WHEREAS, on May 24, 2016 the Board of Directors determined that it would be in the public interest

to designate a portion of the excess funds resulting from the 2015 budget for legal expenses resulting from appraisal district litigation; and,

WHEREAS, the McLennan County Appraisal District has incurred litigation expenses necessitating

the expenditure of funds designated for this purpose,

NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE McLENNAN COUNTY APPRAISAL DISTRICT THAT: The amount of $___________________________ held in the Litigation Fund shall be transferred to the District’s 2016 budget for court costs and legal expenses. RESOLVED THIS THE _________ DAY OF SEPTEMBER, 2016 _________________________________________ Allen Sykes, Acting Chair Person

#5280959.1

RESOLUTION 2016-5

RESOLUTION BY THE BOARD OF DIRECTORS OF THE MCLENNAN COUNTY APPRAISAL DISTRICT APPROVING THE AMENDED AND RESTATED PROPERTY LEASE/PURCHASE AGREEMENT

WHEREAS, the McLennan County Appraisal District (the “District”) is a county appraisal district under the provisions of Texas law; and

WHEREAS, the District entered into a Property Lease/Purchase Agreement dated May 12, 2009 (the “Lease Agreement”) with Capital One Public Funding, LLC (the “Lessor”) to finance the construction of a new appraisal office; and

WHEREAS, the District and the Lessor have agreed to amend the Lease Agreement in order to lower the interest rate of the Lease Agreement and provide for new early termination provisions; and

WHEREAS, in order to effectuate the amendment of the Lease Agreement, the District and the Lessor have agree to enter into an Amended and Restated Property Lease/Purchase Agreement dated as of September 29, 2016 (the “Amended Lease Agreement”) and attached hereto in substantially final form as Exhibit A; and

NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE MCLENNAN COUNTY APPRAISAL DISTRICT:

1. That the above recitals are true and correct.

2. That the current principal amount due and owed on the Lease Agreement is$1,269,745.67.

3. That the interest rate of the Lease Agreement of 5.85% be lowered to 4.50% as ofSeptember 29,2016 and that the Amended Lease Agreement will not be subject to prepayment until May 1, 2024 at which time the Amended Lease Agreement is subject to prepayment at a price of 101% of the then outstanding loan amount as shown on Exhibit D of the Amended Lease Agreement.

4. That the Chief Appraiser be and is hereby authorized to negotiate the finalfinancing documents with the Lessor, with the final documents to be presented to this Board for its approval at a subsequent meeting once negotiations have been concluded to the satisfaction of the Chief Appraiser.

5. That it is officially found and determined that this meeting was open to the public asrequired by law, and that notice of the time, place and subject matter of this meeting has been posted in the manner required by law.

-2-#5280959.1

Adopted this____ day of September, 2016.

MCLENNAN COUNTY APPRAISAL DISTRICT

By:Chairman of the Board

ATTEST:

By:Secretary of the Board

{00740149.DOC / 11} 1

AMENDED AND RESTATED PROPERTY LEASE/PURCHASE AGREEMENT

THIS AMENDED AND RESTATED PROPERTY LEASE/PURCHASE AGREEMENT (the "Amended Agreement") is made as of the 16th day of August, 2016, amending and restating the original Property Lease/Purchase Agreement (the “Original Agreement,” together with the Amended Agreement, the “Agreement”) dated as of May 12, 2009, by and between CAPITAL ONE PUBLIC FUNDING, LLC ("Lessor") and MCLENNAN COUNTY APPRAISAL DISTRICT ("Lessee"), an appraisal district and political subdivision duly organized and existing under the Constitution and laws of the State of Texas that is a political subdivision of the State of Texas.

In consideration of the mutual covenants, terms and conditions hereinafter contained, Lessor hereby agrees to lease to Lessee, and Lessee hereby agrees to lease from Lessor, all of Lessor's right, title and interest in and to the land (the "Land") described in the Description of Land attached hereto as Exhibit "A" and the improvements thereon (the "Improvements") described in the Description of Improvements attached hereto as Exhibit "B" (the Land and Improvements being hereinafter collectively referred to as the "Property"), subject to the terms and conditions set forth herein.

This Agreement is made upon the following terms and conditions:

1. PROPERTY; PURCHASE FUND.

(a) Property. The Land shall be acquired by Lessee and shall hereafter be subject to a leasehold interest in favor of Lessor created pursuant to the terms and conditions of that certain Site Lease (the "Site Lease") by and between Lessee, as “Groundlessor”, and Lessor, as “Groundlessee”, in substantially the form attached as Exhibit "C'. The Improvements are located entirely on the Land as hereinafter provided, and the Property shall be subject to the terms of the Site Lease and this Agreement, executed copies of which shall be promptly recorded in the Real Property Records of McLennan County, Texas.

(b) Creation of Purchase Fund. On the date Lessee originally closed the purchase of the Property, Lessor deposited the amount of ONE MILLION SIX HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($1,650,000.00) (the “Purchase Price”) in a special, segregated fund (the “Purchase Fund”) maintained with Home Abstract and Title Company, Waco, Texas (the “Title Company”) to be held in escrow by the Title Company pursuant to the terms hereof. The Purchase Fund shall be used solely to acquire the Property as described in that certain Purchase Agreement (the “Purchase Agreement”) by and between Lessee and the Brazos Higher Education Service Corporation, Inc., Inc. dated January 20, 2009. In the event and to the extent that the Purchase Fund is not sufficient to pay all costs necessary to acquire the Property (including any amounts due hereunder), Lessee shall promptly pay the same from its own funds; provided, however any such funds shall be provided to the Title

EXHIBIT A

{00740149.DOC / 11} 2

Company or otherwise used to pay acquisition costs on or prior to the Purchase Date. Lessor shall have no obligations with respect to the Purchase Price or related closing costs of the Property beyond making the aforementioned deposit with the Title Company.

(c) Disbursements from Purchase Fund. Lessor and Lessee agree to authorize and direct Title Company to pay $1,700,000, consisting of the Purchase Pricetogether with a capital contribution of the Lessee in the amount of at least $50,000, for the purchase of the Property from the Purchase Fund on the Purchase Date.

Notwithstanding the foregoing, Lessor shall not be required to authorize any disbursement of the Purchase Fund unless and until Lessee has provided to Lessor:

(i) evidence satisfactory to Lessor in its sole discretion that Lessee will enter into the Site Lease in favor of Lessor contemporaneously with the acquisition of the Land by Lessee;

(ii) a leasehold title insurance policy in the amount of not less than ONE MILLION SIX HUNDRED FIFTY THOUSAND AND NO/l00 DOLLARS ($1,650,000) insuring leasehold title (subject to no liens or encumbrances other than this Agreement, the Site Lease, and other encumbrances of record acceptable to Lessor) to the Property under the Site Lease to Lessor, issued by a title insurance company and in form and substance satisfactory to Lessor in its discretion and including such endorsements as Lessor shall deem necessary or desriable in its reasonable discretion;

(iii) a Phase I environmental site audit (prepared by an environmental engineer chosen by mutual agreement of Lessee and Lessor) for the Land in form and substance satisfactory to Lessor in its discretion and at the sole expense of Lessee;

(iv) an appraisal for the Land in form and substance satisfactory to Lessor in its discretion and at the sole expense of Lessee;

(v) evidence satisfactory to Lessor in its discretion that the Land is not in a special flood hazard area;

(vi) evidence satisfactory to Lessor in its discretion that Lessee's intended use of the Property for an office building is in full compliance with all applicable zoning requirements;

(vii) a boundary survey or a copy of the recorded subdivision plat for the Land;

(viii) a copy of the fully executed Purchase Agreement;

(ix) evidence satisfactory to Lessor in its discretion that Lessee has complied with the insurance requirements set forth in Section 8 hereof;

{00740149.DOC / 11} 3

(x) an opinion of counsel to Lessee regarding (among other things) the enforceability with respect to Lessee of this Agreement, the Site Lease, and the other documents executed in connection therewith by Lessee;

(xi) an opinion of special tax counsel regarding the tax-exempt status of the interest component of the Rental payments;

(xii) evidence satisfactory to Lessor that three-fourths of the governing bodies of the eligible taxing units served by Lessee have approved Lessee's resolution authorizing the acquisition of the Land and the Improvements pursuant to this Agreement and the Purchase Agreement; and

(xii) approval by the Lessor of the form and substance of any options, rights of refusal, or similar rights granted to Brazos Higher Education Service Corporation, Inc.

In the event that the funds in escrow allocated to the Purchase Price have not been disbursed on or before May 29, 2009, the transaction contemplated herein shall unwind and Lessee shall pay to the Lessor the Unwind Price in accordance with Section 11(c) hereof:

2. TERM.

(a) Commencement of Term. This Agreement shall be effective, and the parties' obligations hereunder shall arise, as of the date hereof. The initial term of the lease of the Property under this Agreement shall commence on the effective date of the Site Lease (the "Commencement Date") and shall terminate on the last business day of Lessee's then current fiscal budget period (such term hereinafter being referred to as the "Original Term").

(b) Renewal of Lease Term. Subject to the provisions of Section 11 hereof and subsections (e) and (f) of this Section, the Original Term shall be automatically and successively renewed at the end of the Original Term upon the same terms and conditions for such number of successive renewal periods ("Renewal Terms") as is set forth on the Amended Schedule of Payments (the "Schedule") executed by Lessee and attached hereto as Exhibit "D". The Original Term and all Renewal Terms shall, collectively, constitute the term of lease hereunder (the "Lease Term"). The last Renewal Term shall end on the last day of the full Lease Term (as specified on the Schedule) unless earlier terminated in accordance with the terms hereof.

(c) Termination of Lease Term. The Lease Term will terminate upon the earliest to occur of any of the following events:

(1) The expiration of the Original Term or any Renewal Term and nonrenewal thereof in accordance with the terms and conditions of this Agreement;

(2) The payment by Lessee of the Prepayment Price (and any prepayment premium) or Unwind Price under the provisions of Section 11 hereof;

{00740149.DOC / 11} 4

(3) A default by Lessee and Lessor's election to terminate this Agreement under Section 14 hereof; or

(4) The payment by Lessee of all Rental payments, and other amounts authorized or required to be paid by Lessee hereunder with respect to the Property, as are set forth on the Schedule.

Additionally, in the event of a subleasing of the Property by Lessor without termination of this Agreement following an event of default by Lessee hereunder, the Lease Term will terminate upon payment by the sublessee of an amount equal to all Rentalpayments, including late charges, and other amounts authorized or required to be paid by hereunder with respect to the Property. Lessee hereby consents to Lessor’s subleasing of the Property following Lessee’s voluntary or involuntary vacating of the Property.

(d) Continuation of Lease Term by Lessee. Lessee presently intends, subject to the provisions of subsections (e) and (f) of this Section, to continue the term of lease hereunder through the Original Term and all Renewal Terms for the full Lease Term and to pay all Rental payments provided for hereunder. Lessee reasonably believes that legally available funds in amounts sufficient to make all Rental payments for the full Lease Term can be obtained.

(e) Nonappropriation. Notwithstanding any other provision hereof, in the event that sufficient funds are not appropriated for the payment of all Rental payments required to be paid in the next succeeding Renewal Term, then either Lessor (provided any Scheduled Payments are not made when due) or Lessee may terminate this Agreement at the end of the Original Term or the then current Renewal Term, as the case may be, and Lessee shall not be obligated to make payment of the Rentalpayments provided for in this Agreement beyond the then current term. Lessee agrees to give notice to Lessor of such termination at least sixty (60) days prior to the end of the then current term, or, if nonappropriation has not occurred by that date, immediately upon nonappropriation. If this Agreement is terminated under this subsection, Lessee agrees, at Lessee's sole cost and expense, to vacate and deliver possession of the Property to Lessor in the condition required by Section 6 hereof on or before the effective date of such termination and, notwithstanding the provisions of this subsection, Lessee shall be obligated to Lessor for rent in accordance with the terms hereof until it has vacated and delivered possession of the Property. In such an event, and to the extent permitted by law, Lessee covenants that, to the extent lawful, it will not, until the date on which the next succeeding Renewal Term would have ended, expend any funds for the lease or purchase of property to be used for the purpose, or a purpose functionally equivalent to the purpose, for which the Property was used prior to such termination.

(f) Revocation of Lessee. In the event that, by act of the Texas legislature or act of a court of competent jurisdiction in Texas, the nature, duties and responsibilities of Lessee are revoked or substantially altered such that Lessee is no longer primarily responsible for appraising property, or other activity in harmony therewith, and such revocation or alteration results in nonappropriation of funds required to make Scheduled Payments, then either Lessor (provided any Scheduled Payments are not made when

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due) or Lessee may terminate this Agreement at the end of the Original Term or the then current Renewal Term, as the case may be, and in the event of such termination Lessee shall not be obligated to make payment of the Rental payments provided for in this Agreement beyond the then current term. Lessee agrees to give notice to Lessor of such termination at least sixty (60) days prior to the end of the then current term, or, if such revocation or alteration has not occurred by that date, immediately upon such revocation or alteration. If this Agreement is terminated under this subsection, Lessee agrees, at Lessee's sole cost and expense, to vacate and deliver possession of the Property to Lessor in the condition required by Section 6 hereof on or before the effective date of such termination.

3. RENTAL PAYMENTS.

(a) Rental Payments to Constitute a Current Expense of Lessee. Lessor and Lessee understand and intend that the obligation of Lessee to pay Rental payments(herein, the “Rent”, “Rental” or “Scheduled Payments”) hereunder shall constitute a current expense of Lessee and shall not in any way be construed to be a debt of Lessee in contravention of any applicable constitutional, statutory or charter limitations or requirements concerning the creation and assumption of obligations or indebtedness by Lessee. Nothing contained herein shall constitute a pledge of any ad valorem or general tax revenues, funds or monies of Lessee, and Lessee has no power to assess, levy or collect ad valorem taxes.

(b) Payment of Rental Payments. Lessee shall pay Rental payments, exclusively in lawful and immediately available money of the United States of America, to Lessor at the address set forth on the signature page hereof or at such other location as the parties may agree, in the amounts and on the Rent payment due dates set forth on the Schedule without notice. In the event that any Rental payment is not received by Lessor on or before the due date therefor, Lessee agrees to pay a late charge determined on the basis of accrued interest on the delinquent amount at the rate of one percent (1%) per month (unless a lesser amount is required by law) from the date of delinquency to the date payment is received by Lessor; subject to the limitations set forth in Chapter 1204 as amended, Texas Government Code.

(c) Interest and Principal Components. As set forth in the Schedule, a portion of each Rental payment is paid as, and represents payment of, interest, and the balance of each Rental payment is paid as, and represents payment of, principal.

(d) Rental Payments to be Unconditional. The obligation of Lessee to make Rental payments hereunder, and to perform and observe the covenants and agreements contained in this Agreement, shall be absolute and unconditional in all events, except as expressly provided in this Agreement (specifically Sections 2(d), 2(e), and 2(f) hereof). Lessee shall not assert any right of setoff, counterclaim or abatement against its obligations hereunder, including (without limitation) by reason of any disputes with Lessor or any other person, accident or any unforeseen circumstances.

4. REPRESENTATIONS AND COVENANTS OF LESSEE. Lessee represents, covenants and warrants to Lessor as follows:

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(a) Lessee is a political subdivision duly organized and existing under and by virtue of the laws of the State of Texas and will do or cause to be done all things necessary to preserve and keep in full force and effect its existence as such.

(b) Lessee is authorized under the Constitution and laws of the State of Texas to enter into this Agreement and the transactions contemplated hereby and to perform all of its obligations hereunder.

(c) As evidenced by the certified copy of Lessee's enabling resolution and the amending resolution, each attached hereto as Exhibit "E", the execution and delivery of the Original Agreement and this Amended Agreement by or on behalf of Lessee has each been duly authorized by all necessary action of the Board of Directors as the governing body of Lessee, and Lessee has obtained such other approvals and consents as are necessary to consummate this Agreement and the Purchase Agreement. Lessee further represents, covenants and warrants that all requirements have been met, and procedures have occurred necessary, to ensure the enforceability of this Agreement against Lessee, and Lessee has complied with such public bidding requirements as may be applicable to this Agreement and the Purchase Agreement and the financing of the cost of acquiring any improvements on the Property.

(d) Lessee shall provide an incumbency certificate and an opinion of its counsel in form and substance satisfactory to Lessor.

(e) Lessee has determined that a. present need exists for the Property which need is not temporary or expected to diminish in the near future. The Property is essential to, and will be used by Lessee during the Lease Term only for the purpose of performing one or more governmental functions of, Lessee consistent with the permissible scope of Lessee's authority and will not be used in a trade or business of any other person or entity. Lessee shall cause to be executed and provide an Essential Use Letter in form satisfactory to Lessor in its sole discretion.

(f) Within one hundred twenty (120) days after the end of Lessee's fiscal year, during the period this Agreement is in force, Lessee will provide Lessor with such financial statements, budgets, and other financial information relating to Lessee as may be produced by Lessee for public disclosure to the extent that such information is reasonably requested by Lessor.

(g) Lessee acknowledges that Lessor is acting only as a financing source with respect to the Property. This Agreement and the Site Lease are entered pursuant to Section 6.051 of the Texas Tax Code as a lease of real property and improvements to constitute the central appraisal office of the Lessee.

(h) Lessee will promptly and duly execute and deliver to Lessor such further documents, instruments and assurances and take such further action as Lessor may from time to time reasonably request in order to carry out the intent and purpose of this Agreement and to establish and protect the rights and remedies created or intended to be created in favor of Lessor hereunder.

(i) Lessee shall pay the excess (if any) of the actual costs (direct and

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indirect) of purchasing the Property, and any fees and expenses incurred by Lessee or Lessor (other than Lessor’s counsel fees) in connection with the transaction evidenced and contemplated hereby, over the amount initially deposited by Lessor in the Purchase Fund.

(j) The Property will be acquired on or before May 12, 2009 (the "Purchase Date"), or such other date as may be agreed upon by Lessee, Lessor, and the Brazos Higher Education Service Corporation, Inc..

5. TITLE TO PROPERTY; SECURITY INTEREST.

(a) Title. During the Lease Term, fee simple title to the Property shall remain vested in Lessee. The interest of Lessor in the Property is a leasehold interest arising out of the Site Lease. However, during Lessee's occupation and use of the Property under the terms of this Agreement, the interest of Lessor shall not be a "leasehold or other possessory interest" within the meaning of Texas Tax Code Section 25.07(a) and Lessee shall be the owner of the "possessory interest" (as that term is defined by Texas Tax Code Section 1.04(16)) for purposes of listing that interest on Lessee's appraisal rolls. Upon termination of this Agreement after an event of default as set forth in Section 14 or due to an event of nonappropriation as set forth in Section 2(e) or revocation as set forth in Section 2(f), Lessee's leasehold interest in the Property arising hereunder shall immediately terminate and be of no further force or effect.

6. USE AND MAINTENANCE.

(a) Use. Lessee shall use the Property. during the Lease Term solely for the purpose of serving as an office building used as its central appraisal office and in a careful, proper and lawful manner consistent with the requirements of all applicable insurance policies, laws, rules and regulations. Lessee shall not knowingly use or occupy or permit any of the Property to be used or occupied, nor knowingly do or permit anything to be done in or on any of the Property, in a manner which would (i) make void or voidable or cause any insurer to cancel any insurance required by this Agreement, or make it difficult or impossible to obtain any such insurance at commercially reasonable rates, (ii) make void or voidable, cancel or cause to be canceled or release any warranty, guaranty or indemnity running to the benefit of the Property or Lessor, (iii) cause structural injury to any of the Improvements, (iv) constitute a public or private nuisance or waste, or (v) violate any legal applicable law.

(b) Maintenance. Lessee, at its own expense, will maintain all parts of the Property in good repair, appearance and condition and will take all action and will make all structural and nonstructural, foreseen and unforeseen and ordinary and extraordinary changes and repairs which may be required to keep all parts of the Property in good repair and condition (including, but not limited to, all painting, glass, utilities, conduits, fixtures and equipment, foundation, roof, exterior walls, heating and air conditioning systems, wiring, plumbing, sprinkler systems and other utilities, and all paving, sidewalks, roads, parking areas, curbs and gutters and fences). Lessee, at its own expense, will conduct regular inspections of the roof and the heating and air conditioning systems of the Property and provide Lessor with a written report of its findings. Lessee shall promptly cause a licensed contractor to perform any

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recommended or necessary repairs or maintenance measures. Lessor, its contractors, subcontractors, servants, employees and agents, shall have the right to enter upon the Property with prior notice (except in the event of an emergency, in which case no notice shall be required) to inspect same to ensure that all parts of the Property are maintained in as good repair and condition as when received, and Lessee shall not be entitled to any abatement or reduction in rent by reason thereof. Lessor shall not be required to maintain, repair or rebuild all or any part of the Property. Lessee waives the right to require Lessor to maintain, repair or rebuild all or any part of the Property or make repairs at the expense of Lessor pursuant to any applicable law, agreement, contract, covenant, condition or restrictions at any time.

7. FEES; TAXES, OTHER GOVERNMENTAL AND UTILITY CHARGES; NET LEASE.

(a) Fees. Lessee shall be liable to reimburse Lessor for, and agrees to hold Lessor harmless from, all recordation, documentary and transfer taxes and other fees, arising at any time prior to or during the Lease Term, or upon or relating to the Property or this Agreement.

(b) Taxes. Other Governmental Charges and Utility Charges, The parties contemplate that the Property will be used for a governmental purpose of Lessee and that the Property will be exempt from all taxes presently assessed and levied with respect to real property. In the event that the use, possession or acquisition of the Property is found to be subject to taxation in any form (except for federal or state income or franchise taxes of Lessor, if any), Lessee will pay, as the same come due, all taxes and governmental charges of any kind whatsoever that may at any time be lawfully assessed or levied during the Lease Term against or with respect to the Property, as well as all utility and other charges incurred in the use of the Property.

Lessor’s duty to pay its own income or franchise taxes shall in no event reduce or diminish Lessee’s obligation to make those payments required by Section 15(k) hereof.

(c) Net Lease. Lessor and Lessee understand and agree that this Agreement shall be a triple net lease to Lessor, with any and all costs and expenses of any kind whatsoever relating to the Property during the Lease Term and the use, ownership and occupancy thereof to be the responsibility of Lessee. Lessee agrees to pay all such costs and expenses promptly as they become due. Lessor shall have no obligation whatsoever to pay any of such costs.

8. INSURANCE.

(a) Casualty Insurance. Lessee shall keep the Property insured at its own expense against loss or damage due to fire and the risk normally included in extended coverage, malicious mischief and vandalism, for not less than the Full Insurable Value of the Property. As used herein "Full Insurable Value" means the full replacement value of the Property or the then applicable Prepayment Amount, whichever is greater. As used herein, at any time during the Lease Term, the then applicable "Prepayment Amount" shall mean the Prepayment Amount applicable to the immediately preceding Rental payment due date with respect to which Lessee has made the Rental payment

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due on such date (determined on the basis of the Schedule), accrued but unpaid interest thereon at the rate set forth on the Schedule, plus all other amounts then due by Lessee hereunder. All insurance for loss or damage shall provide that losses, if any, shall be payable to Lessor and Lessee, as their respective interests may appear, and Lessee shall utilize its best efforts to have all checks relating to such losses delivered promptly to Lessor. The Net Proceeds of the insurance required shall be hereby applied as provided in Section 9 hereof. As used herein, "Net Proceeds" means the amount remaining from the gross proceeds of any insurance claim or condemnation award after deduction of all expenses (including attorney's fees) incurred in the collection of claim or award.

(b) Liability Insurance. Lessee shall carry public liability insurance, both personal injury and property damage, covering the Property, in a combined single occurrence limit of One Million Dollars ($1,000,000.00). Lessor shall be named as an additional insured with respect to all such liability insurance.

(c) Worker's Compensation. Lessee shall carry worker's compensation insurance covering all employees of Lessee working on, in, near or about the Property, or demonstrate to the satisfaction of Lessor that adequate self-insurance is provided, and shall require any other person or entity working on, in, near or about the Property to carry such coverage, and will furnish to Lessor certificates evidencing such coverage pertaining to the employees of Lessee throughout the term hereof.

(d) General Requirements. All insurance required under this Section 8 shall be in form and with companies reasonably satisfactory to Lessor. Lessee shall pay the premiums therefor and deliver to Lessor certificates of insurance with respect thereto or duplicates thereof, or other evidence satisfactory to Lessor of such insurance coverage. Each insurer shall agree, by endorsement upon the policy or policies issued by it or by independent instrument furnished to Lessor, that (a) it will give Lessor thirty (30) days prior written notice of the effective date of any material alteration or cancellation of such policy; (b) insurance as to the interest of any named additional insured or loss payee other, than Lessee shall not be invalidated by any actions, inactions, breach of warranty or conditions or negligence of Lessee with respect to such policy or policies; and (c) Lessor shall be an “additional insured” under such policies. Additionally, each policy shall contain a standard waiver of subrogation provision.

(e) Self-Insurance. With Lessor's prior written consent, Lessee may satisfy its obligations with respect to insurance hereunder by maintaining a funded self insurance plan acceptable to Lessor in its sole discretion, which acceptance shall not be unreasonably denied.

(f) Flood Insurance. In the event that any portion of the Property is determined to be outside of Flood Zone “X” classification, as determined from time to time according to the Federal Emergency Management Agency (FEMA) maps, then Lessee shall promptly obtain flood insurance in amounts reasonably acceptable to Lessor.

9. RISK OF LOSS; DAMAGE, DESTRUCTION AND CONDEMNATION; USE OF NET PROCEEDS.

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(a) Risk of Loss. Lessee assumes all risk of loss of or damage to the Property from any cause whatsoever, and (subject in all respects to Section 2 hereof) no such loss of or damage to the Property shall relieve Lessee of its obligation to make Rentalpayments or perform any other obligations hereunder,

(b) Damage, Destruction and Condemnation. If, prior to the termination hereof, (1) the Property or any portion thereof is destroyed (in whole or in part) or is damaged by fire or other casualty or (2) title to, or the right of use of, the Property or any part thereof or the estate of Lessee or Lessor in the Property or any part thereof shall be taken under the exercise of the power of eminent domain by any governmental body or by any person, firm or corporation acting under governmental authority, Lessee and Lessor will cause the Net Proceeds of any insurance claim or condemnation award to be applied to Lessee's obligations pursuant to subparagraph (c) of this Section.

(c) Use of Net Proceeds. In the event of damage, destruction or condemnation of the Property, provided the Property is not reasonably deemed by Lessor to be a total loss, Lessee shall, at its expense (subject to application of the Net Proceeds), cause the repair, replacement or restoration of the Property. The Net Proceeds shall be made available to Lessee for such purpose.

In the event of total destruction of or damage to the Property, Lessee shall immediately pay to Lessor the Prepayment Amount applicable to the immediately preceding Rental payment due date with respect to which Lessee has made the Rentalpayment due on such date, plus interest thereon at the rate used in computing the Schedule and any other amounts then payable by Lessee hereunder with respect to the Property. Lessee may utilize the Net Proceeds of insurance to make such payment.Upon such payment, the Lease Term of the Property hereunder shall terminate, and Lessee’s leasehold estate shall merge with Lessee’ fee simple title to the Property as provided in Section 11 hereof. If Lessee is not then in default hereunder, any portion of the Net Proceeds in excess of the amount required to pay in full Lessee's obligations as set forth in this subparagraph (c) shall be for the account of Lessee. Lessee agrees that if the Net Proceeds are insufficient to pay in full Lessee's obligations as set forth in this subparagraph (c), Lessee shall, to the extent permitted by law, make such payments to the extent of any deficiency.

10. DISCLAIMER OF WARRANTIES. The Property is leased to Lessee in itspresent condition without representation or warranty by Lessor and subject, to the existing state of title, to all applicable legal requirements now or hereafter in effect. Lessee has examined the Property and title to the Property and has found all of the same satisfactory for all purposes. LESSOR LEASES AND WILL LEASE AND LESSEE TAKES AND WILL TAKE THE PROPERTY “AS IS”, “WHERE-IS” and “WITH ALL FAULTS”. LESSEE ACKNOWLEDGES THAT LESSOR (WHETHER ACTING AS LESSOR HEREUNDER OR IN ANY OTHER CAPACITY) HAS NOT MADE NOR SHALL LESSOR BE DEEMED TO HAVE MADE, ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE PROPERTY, INCLUDING ANY WARRANTY OR REPRESENTATION AS TO (i) ITS FITNESS, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE, (ii) THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, (iii) THE

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EXISTENCE OF ANY DEFECT, LATENT OR PATENT, (iv) LESSOR'S TITLE THERETO, (v) VALUE, (vi) COMPLIANCE WITH SPECIFICATIONS, (vii) LOCATION, (viii) USE, (ix) CONDITION, (x) MERCHANTABILITY, (xi) QUALITY, (xii) DESCRIPTION, (xiii) DURABILITY, (xiv) OPERATION, (xv) THE EXISTENCE OF ANY HAZARDOUS SUBSTANCE, HAZARDOUS CONDITION OR HAZARDOUS ACTIVITY OR (xvi) COMPLIANCE OF THE PROPERTY WITH ANY LAW; AND ALL RISKS INCIDENT THERETO ARE TO BE BORNE BY LESSEE. LESSEE ACKNOWLEDGES THAT THE PROPERTY IS OF ITS SELECTION AND TO ITS SPECIFICATIONS AND THAT THE PROPERTY HAS BEEN INSPECTED BY LESSEE AND IS SATISFACTORY TO LESSEE. IN THE EVENT OF ANY DEFECT OR DEFICIENCY IN ANY OF THE PROPERTY OF ANY NATURE, WHETHER LATENT OR PATENT, LESSOR SHALL NOT HAVE ANY RESPONSIBILITY OR LIABILITY WITH RESPECT THERETO OR FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING STRICT LIABILITY IN TORT). The provisions of this paragraph have been negotiated and are intended to be a complete exclusion and negation of any warranty by Lessor, express or implied, with respect to any of the Property, arising pursuant to the Uniform Commercial Code or any other law now or hereafter in effect or arising otherwise.

11. EARLY TERMINATION AND PREPAYMENT.

(a) Early Termination. Subject to the provisions of subparagraph (b) hereof and provided that Lessee is not then in default under this Agreement, the leasehold interest of Lessor under the Site Lease will be terminated, Lessee's leasehold interest hereunder will merge with Lessee's fee simple ownership interest in the Property, and Lessee will thereafter hold title to the Property free and clear of all liens, encumbrances and interests created or incurred by Lessor:

(i) at the end of the Lease Term, upon payment in full of all Rental payments and other amounts payable by Lessee hereunder, or

(ii) on any Rental payment due date, upon payment by Lessee of the then applicable Prepayment Amount, plus the Prepayment Premium (if any) and any other amounts then due by Lessee hereunder.

Upon Lessee's request in either of such events, Lessor agrees to execute and cause to be filed in the applicable property records in McLennan County, Texas documents evidencing termination of this Agreement and the Site Lease.

(b) Prepayment. (i) Except as specifically provided in Section 11(b)(iii), the Rental payments due hereunder may not be prepaid in whole or in part prior to May 1, 2024.

(ii) After May 1, 2024 through the end of the Lease Term, the Rental payments may be prepaid in whole on any Rental payment date at the price of the current and then due Rental payment, plus the remaining Principal due under Exhibit D hereof, plus the payment of a prepayment premium in an amount equal to 101% of the remaining Principal subject to prepayment (the "Prepayment Premium"). Any prepayment of the Rental payments, including prepayment after

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the occurrence of a casualty loss or condemnation proceeding related to the Property or the occurrence of a default hereunder, shall be subject to the prepayment of the applicable Prepayment Premium at the time such prepayment occurs.

(iii) Solely in the event that Brazos Higher Education ServiceCorporation, Inc. exercises its right of first refusal to acquire the Property (in accordance with the provisions of Section 14(d) herein) Lessee may prepay the Rental payments due hereunder for a price equal to (a) one hundred five percent (105%) of the principal amount then due as provided in Exhibit D, plus (b) accrued but unpaid interest to the date of such prepayment.

(c) Unwind. In the event the funds are not disbursed as contemplated from the Purchase Fund on or before the Purchase Date, and provided Lessor has deposited the Purchase Price into the Purchase Fund, the transaction contemplated by this Agreement shall unwind and Lessee shall pay to Lessor on or before May 29, 2009 the Unwind Price. As used herein, the Unwind Price shall mean the sum of One Million Six Hundred Fifty Thousand and No/ 100 Dollars ($1,650,000), being the amount originally deposited by Lessor, plus interest on such amount from the date Lessor funds the Purchase Fund to the date of receipt by Lessor of the Unwind Price at the interest rate used in computing the Schedule. Lessor and Lessee acknowledge and agree that in the event Lessee becomes obligated to pay Lessor the Unwind Price, the Purchase Fund shall be paid to Lessor for application against such payment obligation of Lessee.

12. QUIET POSSESSION. Lessor represents and covenants to Lessee that Lessor has full authority to enter into this Agreement and, conditioned upon Lessee performing all of the covenants and conditions hereof as to claims of Lessor or persons claiming under Lessor, Lessee shall peaceably and quietly hold, possess and use the Property during the Lease Term, subject to the terms and provisions hereof. Notwithstanding the foregoing, Lessee agrees that the foregoing covenant shall at all times remain subject to Lessee’s performance under the Site Lease, and that no cause of action against Lessor pursuant to this Section 12 shall inure to Lessee to the extent caused by Lessee’s failure to perform under the Site Lease.

13. ASSIGNMENT; SUBLEASING; INDEMNIFICATION.

(a) Assignment by Lessor. This Agreement, the Schedule, and the Site Lease, and the rights of Lessor hereunder and thereunder, may be assigned and reassigned, in whole but not in part, by Lessor or its assignee without the necessity of obtaining the consent of Lessee. Lessor agrees to give written notice of assignment to Lessee, and Lessee agrees to make any book entries required as a result of such assignment to accurately record the identity of the assignee who shall be entitled to receive the Rental payments set forth on the Schedule and to make all payments to the assignee designated in the notice, notwithstanding any claim, defense, setoff or counterclaim whatsoever, (whether arising from a breach of this Agreement or otherwise) that Lessee may from time to time have against Lessor or Lessor's assignee. Lessee agrees to execute all documents which may reasonably be requested by Lessor or its assignee to protect their interests in this Agreement and the Property, and to pay, as the same are due, any and all reasonable filing fees, recordation taxes or similar

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charges incurred in connection therewith.

(b) No Sale, Assignment or Subleasing by Lessee. Subject to Section 14(d) hereof, this Agreement and the interest of Lessee in the Property, both hereunder and as the fee simple owner of the Property, may not be sold, assigned, or encumbered by Lessee without the prior written consent of Lessor. Subject to Section 14(d) hereof, Lessee shall not sublease the Property except as permitted herein.

(c) Release and Indemnification Covenants. To the extent permitted by the laws and Constitution of the State of Texas, Lessee hereby assumes and agrees to indemnify, protect, save and keep harmless Lessor, its agents and employees, from and against any and all losses, damages, injuries, claims, demands and expenses, including reasonable legal expenses, of whatsoever kind and nature, arising while Lessee is in possession of the Property and on account of (1) the acquisition of the Land and the construction of the Improvements, (2) the possession, renovation, maintenance, use, or condition of the Property (by whomsoever used), or (3) the damage, destruction, return, surrender, sale or other disposition of the Property; provided that Lessee shall not be liable for any such claims occurring by reason of the gross negligence or willful misconduct of Lessor. To the full extent permitted by law, Lessee assumes the risk of all such claims. It is understood and agreed, however, that Lessor shall give Lessee prompt notice of any claim or liability hereby indemnified against.

14. EVENTS OF DEFAULT AND REMEDIES.

(a) Events of Default. The following shall be "events of default" under this Agreement, and the terms "event of default" and "default' shall mean, whenever they are used in this Agreement, any one or more of the following events:

(1) failure by Lessee to pay any Rental payment or other payment required to be paid hereunder within five (5) days of the due date therefor;provided, Lessor shall give notice of any such nonpayment, not more than once in each twelve calendar months of the Term, and Lessee shall have five (5) days after such notice (not more than once in each twelve calendar months of the Term) to make such payment before nonpayment becomes an event of default;or

(2) failure by Lessee to observe and perform any other covenant, condition or agreement on its part to be observed or performed hereunder if such failure shall continue unremedied for a period of thirty (30) days after written notice specifying such failure and requesting that it be remedied, provided that such cure period shall be extended for a period not to exceed sixty (60) days if such failure, cannot reasonably be corrected within such period and Lesseediligently pursues curing such default from the date of notice from Lessor until the default is fully cured; or

(3) discovery by Lessor that any certificate, statement, representation, warranty or audit contained herein or heretofore or hereafter furnished with respect hereto by or on behalf of Lessee was false in any material respect at the time as of which the facts therein set forth were stated or certified, or omitted any

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substantial contingent or unliquidated liability or claim against Lessee; or

(4) commencement by Lessee of a case or proceeding under the Federal bankruptcy laws or filing by Lessee of any petition or answer seeking relief under any existing or future bankruptcy, insolvency or other similar laws or an answer admitting or not contesting the material allegations of a petition filed against Lessee in any such proceeding; or

(5) a petition against Lessee in a proceeding under any existing or future bankruptcy, insolvency or other similar laws shall be filed and not withdrawn or dismissed within sixty (60) days thereafter; or

(6) an attachment, levy or execution is levied or threatened upon or against the Property or the Purchase Fund; or

(7) failure by Lessee, in its capacity as GroundLessor, to observe and perform any other covenant, condition or agreement on its part to be observed or performed under the Site Lease if such failure shall continue unremedied for a period of thirty (30) days after written notice specifying such failure and requesting that it be remedied, provided that such cure period shall be extended for a period not to exceed sixty (60) days if such failure, cannot reasonably be corrected within such period and Lessee diligently pursues curing such default from the date of notice from Lessor until the default is fully cured.

(b) Remedies on Default. Whenever any event of default shall have occurred and be continuing, Lessor shall have the right, at its sole option without any further demand or notice, to exercise any one or more of the following remedies:

(1) require Lessee to remove immediately any and all items of Lessee's personal property which may be in on or about the Property and to vacate and deliver possession of the Property; or

(2) with or without terminating this Agreement, reenter and retake possession of the Property and sell, lease or sublease the Property for the account of Lessee, with the net amount of all proceeds received by Lessor to be applied to Lessee's obligations hereunder including, but not limited to, all payments due and to become due hereunder, holding Lessee liable for the excess (if any) of (i) the Rental payments and other amounts payable by Lessee hereunder (including but not limited to reasonable attorneys’ fees, expenses and costs of repossession) over (ii) the net purchase price or rent and other amount paid or payable by the purchaser lessee or sublessee of the Property pursuant to such sale, lease or sublease, provided that the excess (if any) of the amounts referred to in clause (ii) over the amounts referred to in clause (i) shall be paid to Lessee; or

(3) exercise its rights under the Site Lease; or

(4) exercise any other right, remedy or privilege which may be available to it under applicable laws of the State of Texas or any other applicable

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law or proceed by appropriate court action to enforce the terms of this Agreement or to recover damages for the breach of this Agreement or to rescind this Agreement as to the Property.

In any such case, the right to the possession of the Property and to, all other rights acquired by Lessee hereunder shall revert to and revest in Lessor without any act of reentry, or any other act of Lessor to be performed and without any right of Lessee of return, reclamation or compensation for moneys paid under this Agreement as absolutely, fully and perfectly as if this Agreement and such payments had never been made. In case of such default, all payments theretofore made by Lessee under this Agreement are to be retained by and belong to Lessor as the agreed and reasonable rent of the Property up to the time of such default. Lessor, in case of such default, shall have the right immediately, or at any time thereafter, to enter upon the Property, without any process of law, and take immediate possession thereof, together with all the Improvements and appurtenances thereon or thereto belonging. Any amounts received by Lessor pursuant to the foregoing provisions shall be applied, first, to expenses and advances reasonably incurred by Lessor in exercising its remedies hereunder, then, to any unpaid interest and, then, to repayment of the principal component of any Rental or other payments due hereunder.

Lessee shall remain liable for all reasonable legal fees and other costs and expenses, including court costs, incurred by Lessor with respect to the enforcement of any of the remedies listed above or any other remedy available to Lessor.

(c) No Remedy Exclusive. No remedy herein conferred upon or reserved to Lessor or Lessee is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient.

(d) Right of First Refusal. Subject to a right of first refusal reserved by Brazos Higher Education Service Corporation, Inc., notwithstanding anything herein to the contrary, after the occurrence of an event of default hereunder, each Taxing Unit (hereinafter defined) which financially supports Lessee shall be given the "right of first refusal" to purchase the Property at a purchase price equal to the applicable Prepayment Amount owed by Lessee at such time. Lessee shall notify each such Taxing Unit within five (5) days after the receipt of such notice. If any of the Taxing Units so desires to purchase the Property, such Taxing Unit shall agree to purchase the Property by providing notice to Lessor within thirty (30) days. The sale must be fully consummated within 90 days after the occurrence of the default or the right of first refusal will expire. As used herein, the term "Taxing Unit" means the "Taxing Unit" as such term is defined in Section 1.04 of the Texas Property Tax Code. Lessor and Lessee agree that a failure by Lessee to provide notice to the Taxing Units shall not result in a cause of action against Lessor by such Taxing Units.

Lessee agrees that any right of first refusal offered to Brazos Higher Education Service Corporation, Inc. shall be, at a minimum, at a price that includes the then

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applicable Prepayment Amount. All proceeds due to Lessor pursuant to this Lease shall be delivered directly to Lessor or its designee upon consummation of the sale to Brazos Higher Education Service Corporation, Inc. or Taxing Unit, as applicable. Any proceeds delivered to Lessee shall be held in trust by Lessee pending satisfaction of all amounts due hereunder.

In no event shall the pendency of the right excuse the Lessee’s duties hereunder, including the duty to pay Rent.

15. TAX COVENANTS.

It is the intention of the parties hereto that the interest component of the Rent payable hereunder will not be includable in the gross income of the recipients thereof for purposes of federal income taxation by reason of section 103 and related sections of the Internal Revenue Code. In order to confirm and carry out such intention:

(a) “Definitions” For all purposes of Section 15, except as otherwise expressly provided or unless the context otherwise requires:

“Code” means the Internal Revenue Code of 1986, as amended by any amendments thereto enacted prior to the Issue Date.

“Computation Date” has the meaning set forth in section 1.148-3(b) of the Regulations.

“Gross Proceeds” has the meaning set forth in section 1.148-1(b) of the Regulations and includes all amounts received by the Lessee from the Purchase Fund and the investment of such amounts.

“Investment” has the meaning stated in section 1.148-1(b) of the Regulations and includes:

(1) Stock: a share of stock in a corporation or a right to subscribe for or to receive such a share,

(2) Debt: any indebtedness or evidence thereof, including without limitation United States Treasury bonds, notes, and bills (whether or not of the State and Local Government Series) and bank deposits (whether or not certificated or interest bearing or made pursuant to a depository contract),

(3) Annuities and Deferred Payments: any annuity contract, or any other deferred payment contract acquired to fund an obligation of the Lessee, or

(4) Other Property: any other investment-type property.

“Issue Date” means the first date on which this Agreement is first delivered to the Lessor in exchange for money on deposit the Purchase Fund.

“Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, or

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government or any agency or political subdivision thereof.

“Regulations” means the final, temporary, or proposed Income Tax Regulations applicable to the Agreement issued pursuant to sections 141 through 150 of the Code. Any reference to a Section of the Regulations shall also refer to any successor provision to such Section hereafter promulgated by the Internal Revenue Service pursuant to sections 141 through 150 of the Code and applicable to the Agreement.

“Taxable Investment” means any Investment other than

(1) Non-AMT tax-exempt Obligations: an obligation the interest on which is excluded from the gross income, as defined in section 61 of the Code, of the owners thereof for federal income tax purposes (or, when such obligation was issued, was purported by the evidence of such obligation to be so excluded) and which is not a preference item, as defined in section 57 of the Code,

(2) Tax-exempt Mutual Funds: an interest in a regulated investment company to the extent that at least 95 percent of the income to the holder of the interest is interest that is excludable from gross income under section 103 of the Code,

(3) Demand SLGS: one-day certificates of indebtedness issued by the United States Treasury pursuant to the Demand Deposit State and Local Government Series program described in 31 C.F.R. part 344, if the Lessee in good faith attempts to comply with all the requirements of such program relating to the investment of Gross Proceeds, and

(4) Exempt Temporary Investments: Taxable Investments which are described in Section 7.9(e)(3).

“Yield” of

(1) Taxable Investments: Taxable Investments to any date means the actuarial “yield” of all such Taxable Investments on or before such date as calculated in section 1.148-5 of the Regulations, and

(2) Agreement: the Agreement means the actuarial “yield” of the Agreement, as defined in section 1.148-4 of the Regulations, and shall be specified in a certificate executed by an officer of the Lessee on the Issue Date.

(b) Not to Cause Interest to Become Taxable. The Lessee shall not use, permit the use of, or omit to use Gross Proceeds or any other amounts (or any property acquired, constructed, or improved with Gross Proceeds) in a manner which, if made or omitted, respectively, would cause the interest component of the Rent not to be excludable from the gross income, as defined in section 61 of the Code, of the owners thereof for federal income tax purposes. The Lessee shall adopt and comply with the provisions of such amendments hereof and supplements hereto as may, in the opinion of nationally recognized bond counsel, be necessary to preserve or perfect such exclusion. Without limiting the generality of the foregoing, the Lessee shall comply with

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each of the specific covenants in this Section at all times prior to the end of the Lease Term (and thereafter in the case of Section 15(i)) unless and until the Lessee shall have received a written opinion of nationally recognized bond counsel to the effect that failure to comply with such covenant will not adversely affect the excludability of the interest component of the Rent from the gross income of the owner thereof for federal income tax purposes, and thereafter such covenant shall no longer be binding upon the Lessee to the extent described in such opinion, anything in any other Subsection of this Section to the contrary notwithstanding.

(c) No Private Use or Payments. At all times prior to the end of the Lease Term, the Lessee shall neither

(1) use nor permit the use of Gross Proceeds (or any property acquired, constructed, or improved with Gross Proceeds or of bond anticipation notes retired with such proceeds, or income from the investment thereof) in any trade or business carried on by any Person (or in any activity of any Person other than a natural person) other than a state or local government, nor

(2) directly or indirectly impose or accept any charge or other payment for use of Gross Proceeds (or use of any such property acquired, constructed, or improved with Gross Proceeds, or income from the investment thereof) in any trade or business carried on by any Person (or in any activity of any Person other than a natural person) other than a state or local government, unless either (i) such use is merely as a member of the general public or (ii) such charge or payment consists of taxes of general application or interest earned on temporary Investments acquired with Gross Proceeds pending application of such Gross Proceeds for their intended purposes. For purposes of this Subsection 15(c), property is considered to be “used” by a Person if

(v) Sale or Lease: it is sold or otherwise disposed of, or leased, to such Person;

(w) Management Contract: it is operated, managed, or otherwise physically employed, utilized, or consumed by such Person, excluding operation or management pursuant to an agreement which meets the conditions described in I.R.S. Rev. Proc. 97-13;

(x) Capacity, Output, or Service Commitment: capacity in or output or service from such property is reserved or committed to such Person under a take-or-pay, output, incentive payment, or similar contract or arrangement;

(y) Preferential Service: such property is used to provide service to (or such service is committed to or reserved for) such Person on a basis or terms which (except possibly for the amount of use and any corresponding rate adjustment) are different from the basis or terms on which such service is provided (or committed or reserved) to members of the public generally; or

(z) Other Incidents of Ownership: substantial burdens and benefits of

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ownership of such property are otherwise effectively transferred to such Person.

(d) No Private Loan. The Lessee shall not use Gross Proceeds to make or finance loans to any Person other than a state or local government, excluding loans consisting of temporary investments of Gross Proceeds pending application of such Gross Proceeds for their intended purposes. For purposes of this Subsection 15(d), Gross Proceeds are considered to be “loaned” to a Person if (1) property acquired, constructed, or improved with Gross Proceeds is sold or leased to such Person in a transaction which creates a debt for federal income tax purposes, (2) capacity in or service from such property is committed to such Person under a take-or-pay, output, or similar contract or arrangement, or (3) indirect benefits, or burdens and benefits of ownership of Gross Proceeds or such property are otherwise transferred to such Person in a transaction which is the economic equivalent of a loan.

(e) Not to Invest at Higher Yield. The Lessee shall not directly or indirectly invest Gross Proceeds in any Taxable Investment (or use Gross Proceeds to replace money so invested), if as a result of such investment the Yield of all Taxable Investments acquired with (or representing an investment of) Gross Proceeds (or money replaced thereby), whether then held or previously disposed of, to the date of such investment exceeds the Yield on the Rent (being the interest payable thereon). Notwithstanding the foregoing, however, the following Investments shall be excluded from the limitation and calculation described in this Subsection (e):

(1) Three Year Period for Sale Proceeds: Taxable Investments acquired with (or representing an investment of) proceeds from the sale of the Agreement, to the extent such Taxable Investments are held during the first three years after the Issue Date;

(2) One Year Period for Investment Proceeds: Taxable Investments acquired with (or representing an investment of) earnings from the investment of proceeds from the sale of the Agreement and not described in Clause (1) of this Subsection (e), but only during the first year after receipt of such income;

(3) Rent Payments: Taxable Investments acquired with or representing amounts held to pay Rent in an amount equal to debt service due on the Agreement within one year, plus a carryover amount of one-twelfth of the debt service;

(4) Reserves: Taxable Investments acquired with or representing an investment of amounts held to pay Rent and not described in Clause (1) of this Subsection (e), but only, to the extent such Taxable Investments are less than 10% of the issue price of the Agreement then Outstanding; and

(5) Other Investments: any Taxable Investments acquired with (or representing an investment of) Gross Proceeds described in Clause (3) of the definition thereof, to the extent the aggregate amount of Gross Proceeds invested in such Taxable Investments does not exceed the lesser of $100,000 or 5% of the proceeds from sale of the Agreement.

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The Lessee shall not use any money to pay principal of or interest on the Agreement (i.e., the Rent), or pledge (or permit to be pledged) or otherwise restrict any money, funds, or Taxable Investments so as to give reasonable assurance of their availability for such purpose.

(f) No Federal Guarantees, Etc. The Lessee shall not either (a) use Gross Proceeds in an amount which exceeds 5% of the proceeds from the sale of the Agreement (i) to make loans which are guaranteed in whole or in part by the United States or any agency or instrumentality thereof, including any entity with statutory authority to borrow from the United States, or (ii) to invest in any deposit or account in a financial institution to the extent such deposit or account is insured under federal law by the Federal Deposit Insurance Corporation, the National Credit Union Administration, or any similar federally-chartered corporation, or (b) otherwise permit payment of Rent on the Agreement to be directly or indirectly guaranteed in whole or in part by the United States or any agency or instrumentality thereof, including any entity with statutory authority to borrow from the United States. Notwithstanding the foregoing, however, the Lessee may acquire:

(1) Certain Temporary Investments: Investments described in Subsection (e)(3) of this Section, whether or not federally-guaranteed or federally-insured, to the extent such Investments are held during the period described in such Subsection;

(2) Treasury Investments: Investments purchased from the United States Treasury; and

(3) Investments Permitted by Regulations: any other Investments permitted by regulations of the United States Department of Treasury issued under section 149(b)(3)(B)(v) of the Code.

(g) Not to Cause Agreement to Become Hedge Bond. The Lessee warrants and represents both that:

(1) 85% of the spendable proceeds of the Agreement will be used to carry out the governmental purposes of such Agreement within three years from the date each such series was issued, and

(2) not more than 50% of the proceeds of the Agreement will be invested in nonpurpose investments (as defined in section 148(f)(6)(A) of the Code) having a substantially guaranteed yield for four years or more.

(h) To File Informational Report. The Lessee shall execute and file with the Secretary of the Treasury, not later than the 15th day of the second calendar month after the close of the calendar quarter in which the Issue Date occurs (or by such later date as such Secretary may permit for reasonable cause or may prescribe with respect to any component of such statement), a statement containing the information and in the form required by section 149(e) of the Code or the Regulations promulgated thereunder.

(i) Rebate. Except to the extent otherwise provided in section 148(f) of the Code and the Regulations and rulings thereunder,

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(1) The Lessee shall account for all Gross Proceeds of the Agreement (including all receipts, expenditures, and investments thereof) on its books of account separately and apart from all other funds (and receipts, expenditures, and investments thereof) and shall maintain all records of such accounting with the official transcript of the proceeds relating to the issuance of the Agreement until six years after the final Computation Date. The Lessee may, however, to the extent permitted by law, commingle Gross Proceeds of the Agreement with other money of the Lessee, provided that the Lessee separately accounts for each receipt and expenditure of such Gross Proceeds and the obligations acquired therewith.

(2) Not less frequently than each Computation Date, the Lessee shall either (i) cause to be calculated by a nationally recognized accounting or financial advisory firm or (ii) calculate and cause its calculations to be verified by a nationally recognized accounting or financial advisory firm, in either case in accordance with rules set forth in section 148(f) of the Code and section 1.148-3 of the Regulations and rulings thereunder, the Rebate Amount with respect to the Agreement as of such Computation Date. The Lessee shall maintain such calculations with the official transcript of the proceedings relating to the issuance of the Agreement until six years after the final Computation Date.

(3) As additional consideration for the purchase of the Agreement (funding the Purchase Fund) by the initial purchasers thereof and the loan of the money represented thereby, and in order to induce such purchase by measures designed to result in the excludability of the interest component thereof from the gross income of the owners thereof for federal income tax purposes, the Lessee shall pay to the United States the amount described in paragraph (2) above and the amount described in paragraph (4) below, at the times, in the installments, to the place, in the manner, and accompanied by such forms or other information as is or may be required by section 148(f) of the Code and the Regulations and rulings thereunder.

(4) The Lessee shall exercise reasonable diligence to assure that no errors are made in the calculations required by paragraph (2) and, if such error is made, to discover and promptly to correct such error within a reasonable amount of time thereafter, including payment to the United States of any interest and any penalty under section 1.148-3(h) of the Regulations.

(j) Not to Divert Arbitrage Profits. Except to the extent permitted by section 148 of the Code and the regulations and rulings thereunder, the Lessee shall not, at any time prior to the Termination Date, enter into any transaction that reduces the amount required to be paid to the United States pursuant to Subsection (i) of this Section because such transaction results in a smaller profit or a larger loss than would have resulted if the transaction had been at arm’s length and had the Yield of the Agreement not been relevant to either party.

(k) If Lessor either (i) receives notice, in any form, from the Internal Revenue Service or (ii) reasonably determines, based on an opinion of independent tax counsel selected by Lessor and approved by Lessee, which approval Lessee shall not

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unreasonably withhold, that Lessor may not exclude the interest component of any Rental payment from federal gross income because Lessee breached a covenant contained herein, such breach shall constitute an event of default hereunder and Lessee shall pay to Lessor, within thirty (30) days after Lessor notifies Lessee of such determination, the amount which, with respect to Rental payments previously paid and taking into account all penalties, fines, interest, and additions to tax (including all Federal, state and local taxes imposed on the interest component of all Rentalpayments due through the date of such event) that are imposed on Lessor as a result of the loss of the exclusion, will restore to Lessor its after-tax yield on the transaction evidenced by this Agreement (assuming tax at the highest marginal tax rate and taking into account the time of receipt of payments and reinvestment at the after-tax yield rate) to that which it would have been had the exclusion not been lost. Additionally, Lessee agrees that upon the occurrence of such an event, it shall pay additional rent to Lessor on each succeeding rent payment due date in such amount as will maintain such after-tax yield. Each reference to Lessor in this subparagraph (b) shall be construed to mean also any similarly adversely affected assignee or reassignee of Lessor. If a change in federal tax law subsequent to the date of this Agreement shall occur, Lessee shall take all necessary and reasonable actions to comply with such changes in federal tax law to prevent the interest component of the Rental payments from becoming taxable income. If it is the opinion of independent tax counsel selected by the Lessor and approved by the Lessee that the exclusion of the interest component of the Rental payments could not be cured by commercially reasonable actions of the Lessee to comply with such changes in federal tax law, the Lessee shall not be held liable for any such penalties, fines, interest, or additions to tax incurred by the Lessor.

16. LESSOR'S RIGHT TO PERFORM FOR LESSEE. If Lessee fails to perform or comply with any of its agreements contained herein, after the expiration of any applicable cure period, Lessor shall have the right, but shall not be obligated, to effect such performance or compliance, and the amount of any reasonable out-of-pocket expenses and other reasonable expenses of Lessor incurred in connection with the performance of or compliance with such agreement, together with interest thereon at the rate of eight and one-half percent (8-1/2%) per annum based upon a 360-day year of twelve 30-day months (unless a lesser amount may be required by law), shall be payable by Lessee upon demand.

Within ten (10) days of receipt, Lessee shall execute, endorse and deliver to Lessor any instrument in writing as may be reasonably required to vest in Lessor any right, title or power which by the terms hereof are to be conveyed or conferred upon Lessor, including, without limitation, documents and checks or drafts relating to or received in payment for any loss or damage under the policies of insurance required by the provisions of Section 8 hereof to the extent that the same relates to the Property.

17. ENVIRONMENTAL MATTERS.

(a) Representations and Warranties. Lessee hereby represents and warrants to Lessor that Lessee, its officers, employees or agents shall never cause or permit any Hazardous Substance (as defined below) to be generated, placed, housed, located or disposed of on, under or in the Property nor ever use the Property as a dump site, permanent or temporary storage site or transfer station for any Hazardous Substance.

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Lessee further represents and warrants to Lessor that it shall not allow any actual or alleged violation with respect to the Property of any federal, state or local statute, ordinance, rule, regulation or other law pertaining to Hazardous Substances while Lessee is in possession of the Property.

(b) Environmental Covenants. Lessee shall:

(i) not cause or permit any Hazardous Substance to be placed, held, located, released, transported or disposed of on, under, at or from the Property in violation of applicable law while Lessee is in possession of the Property;

(ii) contain at or remove from the Property, or perform any other necessary remedial action regarding, any Hazardous Substance in any way affecting the Premises during the Term hereof if, as and when such containment, removal or other remedial action is required under any applicable law and, whether or not so required, shall perform any containment, removal or remediation of any kind involving any Hazardous Substance in any way materially adversely affecting the Property in compliance with all applicable lawand, upon reasonable request of Lessor after consultation with Lessee (which request may be given only if Lessor has received information such that it reasonably believes that environmental contamination exists which may have a material adverse effect on the Property), shall arrange an environmental site assessment, or such other or further testing or actions as may be required by applicable law or as may be mutually agreed to by Lessor and Lessee, to be conducted at the Property by qualified companies retained by Lessee specializing in environmental matters and reasonably satisfactory to Lessor in order to ascertain compliance with all applicable law and the requirements of this Agreement, all of the foregoing to be at Lessee’s sole cost and expense;

(iii) provide Lessor with written notice (and a copy as may be applicable) of any of the following within ten (10) days of receipt thereof: (A) Lessee’s obtaining knowledge or notice of any kind of the material presence, or any actual or threatened release, of any Hazardous Substance in any way materially adversely affecting the Property; (B) Lessee’s receipt or submission, or Lessee’s obtaining knowledge or notice of any kind, of any report, citation, notice or other communication from or to any federal, state or local governmental or quasi-governmental authority regarding any Hazardous Substance in any way materially adversely affecting the Property; or (C) Lessee’s obtaining knowledge or notice of any kind of the incurrence of any cost or expense by any federal, state or local governmental or quasi-governmental authority or any private party in connection with the assessment, monitoring, containment, removal or remediation of any kind of any Hazardous Substance in any way materially adversely affecting the Property, or of the filing or recording of any lien on the Property or any portion thereof in connection with any such action or Hazardous Substance in any way materially adversely affecting the Property; and

(c) Lessor Remediation. If Lessee fails to correct any violation of applicable laws which occurs or is found to exist, Lessor shall have the right (but no obligation) to

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take any and all actions as Lessor shall reasonably deem necessary or advisable in order to cure such violation of Environmental Laws.

(d) Other Parties in Possession. All future leases, subleases or concession agreements permitted by this Agreement relating to the Property entered into by Lessee shall contain covenants of the other party not to knowingly at any time (i) cause any violation of applicable laws to occur or (ii) permit any Person occupying the Propertythrough said subtenant or concessionaire to knowingly cause any violation of applicable laws to occur.

(e) Indemnification. To the greatest extent permitted by law, Lessee agrees to hold harmless, indemnify and defend Lessor and its assignees from and against any claim, demand, penalty, fee, lien, damage, loss, expense or liability resulting from (i) any breach of the representations or warranties made by it in this Section 17, including reasonable attorney's fees and costs of, or in preparation for, any trial or appellate review and (ii) any actual or alleged Hazardous Substance contamination, including the clean-up of Hazardous Substances from the Property or any other properties resulting from any activities on the Property during Lessee's ownership, possession or control of the Property which directly or indirectly result in the Property or any other property being contaminated with Hazardous Substances. This indemnity shall survive the termination hereof and shall continue to inure to the benefit of Lessor, notwithstanding any assignment of its other rights hereunder, as well as any assignee of Lessor's rights hereunder.

(f) Hazardous Substance. As used herein, "Hazardous Substance" shall mean any hazardous, toxic or dangerous substances, waste or material that is or may become regulated under any federal, state or local statute, ordinance, rule, regulation or other law now or hereafter in effect pertaining to environmental protection, contamination or cleanup.

18. MISCELLANEOUS.

(a) Notices. All notices (excluding billings and communications in the ordinary course of business) hereunder shall be in writing, sent by certified mail, return receipt requested, and addressed to the other party at its respective address stated below the signature of such party or at such other address as such party shall from time to time designate in writing to the other party, and shall be effective from the date of mailing.

(b) Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon Lessor and Lessee and their respective successors and permitted assigns.

(c) Severability; Survival. Any provision of this Agreement which is prohibited, or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

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The representations, warranties and covenants of Lessee herein shall be deemed to be continuing and to survive the execution hereof. The obligations of Lessee under Sections 7, 13 (c), 15 and 17 hereof which accrue during the Lease Term shall survive the termination of the Lease Term.

(d) Execution in Counterparts. This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but oneand the same instrument.

(e) Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas.

(f) Captions. The captions in this Agreement are for convenience or reference only and shall not define or limit any of the terms or provisions hereof.

(g) Entire Agreement. This Agreement and the Site Lease constitute the entire agreement between Lessor and Lessee. No waiver, consent, modification or change of terms of this Agreement shall bind either party unless in writing signed by both parties, and then such waiver, consent, modification or change shall be effective only in the specific instance and for the specific purpose given. Other than as set forth herein or in the Site Lease, there are no understandings, agreements, representations or warranties, express or implied, not specified herein regarding this Agreement or the Property leased hereunder. Lessee, by the signature below of its authorized representative, acknowledges that it has read this Agreement, understands it, and agrees to be bound by its terms and conditions.

(h) No Construction Against Drafter. Each of the parties hereto acknowledges that it is sophisticated and experienced in transactions of the nature contemplated hereby and that it has been represented by counsel of its choosing in connection herewith; accordingly, each party hereto waives to the fullest extent permitted by law the application of any law or rule of construction requiring that this Lease be construed or interpreted against the drafting party or in favor of the non-drafting party.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above set forth.

ATTEST: CAPITAL ONE PUBLIC FUNDING, LLC Lessor

265 Broadhollow RoadMelville, New York 11747Attn: Municipal Operations

______________________________ By: _________________________________

ATTEST: MCLENNAN COUNTY APPRAISAL DISTRICTLessee600 Columbus AvenueWaco, Texas 76701

______________________________ By: __________________________________

(After May 1, 2009 notices to Lessee shall be sent to 315 South 26th Street, Waco, Texas 76710)

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STATE OF TEXAS )) SS

COUNTY OF MCLENNAN )

On _______________________, 2016, before me, the undersigned, a Notary Public in and for said State, personally appeared Andrew J. Hahn, personally known to me or proven to me on the basis of satisfactory evidence to be the ______________________________________ of the McLennan County Appraisal District ("Lessee") who is known to me to be the person who executed the within Property Lease/Purchase Agreement on behalf of Lessee therein named, and who acknowledged to me he/she was duly authorized to execute such Property Lease/Purchase Agreement on behalf of said Lessee.

WITNESS my hand and official seal.

_____________________________________Notary Public in and for said County and State

STATE OF __________ )) SS

COUNTY OF ________ )

On __________________, 2016, before me, the undersigned, a Notary Public in and for said State, personally appeared _____________________________________, personally known to me or proven to me on the basis of satisfactory evidence to be the _______________________________________ of the Capital One Public Funding, LLC ("Lessor") who is known to me to be the person who executed the within Property Lease/Purchase Agreement on behalf of Lessor, and who acknowledged to me that Lessor executed the within instrument pursuant to powers vested in him/her by Lessor’s By-laws or a resolution of is Board of Directors.

WITNESS my hand and official seal.

_____________________________________Notary Public in and for said County and State

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EXHIBIT ADESCRIPTION OF LAND_

Being Lot One (1) in Block “A” of the Waco Northstar Addition to the City of Waco, McLennan County, Texas (being a resubdivision of that 7.073 acres of land in the T.J. Chambers Survey, Abstract Number 7, described in deed to Waco Northstar Associates, L.P., a Texas limited partnership of record as Document Number 2002014814 of the Official Public Records McLennan County, Texas and being a resubdivision of Blocks 57 and 62 of the Glenwood Addition to the City of Waco, per plat recorded in Volume 69, Page 91 of the Deed Records of McLennan County, Texas) as per plat recorded as Instrument #2004001424 of the Official Public Records of McLennan County, Texas.

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EXHIBIT BDESCRIPTION OF IMPROVEMENTS

A 15,600 square foot building located at 315 South 26th Street, Waco, Texas.

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EXHIBIT C

Recording Requested by and When Recorded Mail To:

Robert MeyersMcCreary, Veselka, Bragg & Allen100 N. 6th Street, Suite 704Waco, Texas 76701

(Space above for recorder's use only)

SITE LEASE

This Site Lease ("Site Lease"), dated as of May 12, 2009, is by and between MCLENNAN COUNTY APPRAISAL DISTRICT, an appraisal district and political subdivision duly organized and existing under the Constitution and laws of the State. of Texas (the "GroundLessor"), and CAPITAL ONE PUBLIC FUNDING, LLC, (the "GroundLessee").

WHEREAS, the GroundLessor is desirous of acquiring certain improvements on that certain real property situated in the County of McLennan, State of Texas described in Exhibit A attached hereto and made a part hereof (such real property and all improvements now thereon and to be constructed thereon being hereinafter referred to as the "Premises"), and the GroundLessee is willing to provide the necessary financing for such acquisition by the GroundLessor; and

WHEREAS, the GroundLessor is entering into this Site Lease to lease the Premises to the GroundLessee, and the GroundLessee will lease the Premises back to the GroundLessor pursuant to that certain Property Lease/Purchase Agreement (the "Agreement") entered into by the GroundLessee and the GroundLessor contemporaneously herewith; and

WHEREAS, under the Agreement the GroundLessee has deposited into escrowwith Home Abstract and Title Company, Waco, Texas, the funds needed by the GroundLessor to pay the cost of acquiring the Premises, as such term is defined in the Agreement, and to pay costs incurred in connection with the transaction evidenced and contemplated hereby, such funds to be disbursed from escrow upon satisfaction of certain conditions set forth in the Agreement; and

WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into this Site Lease do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Site Lease.

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NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL AGREEMENTS AND COVENANTS CONTAINED HEREIN, THE PARTIES HERETO DO HEREBY AGREE AS FOLLOWS:

SECTION 1. Leased Premises.

The GroundLessor hereby leases to the GroundLessee and the GroundLessee hereby leases the Premises from the GroundLessor, effective as of May 1, 2009 (the "Commencement Date") and on the terms and conditions hereinafter set forth.

SECTION 2. Term.

The term hereof shall commence on the Commencement Date and shall end on May 1, 2059, unless prior to such date the GroundLessor shall have either (a) paid all Rental payments and other amounts due or to become due under the Agreement or (b) prepaid its Rental payments obligations pursuant to Section 11 of the Agreement, in either of which events the term of this Site Lease shall end ten (10) days after payment by the GroundLessor of the final Rental payment due under the Agreement or the applicable prepayment amount under the Agreement, as the case may be. The GroundLessee agrees to execute such acknowledgments of the early termination of this Site Lease in recordable form as may be reasonably requested by the GroundLessor upon the GroundLessor's payment of the final rent payment due under the Agreement or the applicable prepayment amount under the Agreement, as the case may be. [Notwithstanding the foregoing, in the event that the GroundLessor shall default under the Agreement, any subsequent early termination of this Site Lease after cure of default shall be subject to the rights of any assignees of the GroundLessee's rights hereunder. and any sublessees of the Premises.]

SECTION 3. Rental.

The GroundLessee shall pay annually to the GroundLessor as and for Rentalhereunder the sum of One Dollar ($1.00), in advance, on or before each anniversary date of commencement of this Site Lease. Upon such payment, the GroundLessee shall have no further monetary obligations hereunder to the GroundLessor for such year. For administrative convenience, GroundLessee may prepay the entire $50.00 owed for the entire Term hereof.

SECTION 4. Purpose.

The GroundLessee shall use the Premises solely for the purpose of leasing the same to the GroundLessor pursuant to the Agreement; however, in the event of default by the GroundLessor under the Agreement, the GroundLessee may exercise the remedies provided in the Agreement and use the Premises for any lawful purpose, including, without limitation, leasing or subleasing the Premises or selling its interest therein under this Site Lease.

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SECTION 5. Title; Zoning; Prohibition against Further Encumbrances.

The GroundLessor covenants that on the Commencement Date it will own the Premises in fee simple, subject to no liens, encumbrances, or adverse interests of any kind whatsoever except (i) those of the GroundLessee arising under this Site Lease, (ii) the rights of GroundLessee and GroundLessor under the Agreement, and (iii) any exception listed on Exhibit B. attached hereto and made a part hereof, The GroundLessor covenants that the Premises are, and on the Commencement Date will be, zoned as M-3 by the City of Waco, Texas, which includes “offices” as a Permitted Use and that there are no laws, agreements or other arrangements other than applicable zoning laws which limit or restrict the manner or purposes for which the Premises can be used or which could have such an effect. The GroundLessor covenants that it shall not, during the term hereof, create, allow or suffer to exist any lien or encumbrance on the Premises or the improvements thereon or apply for or consent to any modification in the zoning classification for the Premises which would limit the manner in which the Premises may be used. In the event of default under the Agreement and at the written request of the GroundLessee, the GroundLessor shall assist the GroundLessee in all reasonable respects in obtaining such building permits, subdivision approvals, zoning variances, exceptions or changes, permits, licenses, approvals, or other actions, and shall grant such easements, as the GroundLessee may deem necessary or desirable in order to enable the GroundLessee to use the Premises for such lawful purpose or purposes as the GroundLessee may determine.

SECTION 6. Assignments and Subleases.

GroundLessee may assign its rights hereunder or, in the event that the Premises are vacated, sublet the Premises with notice to, but not the required consent of the GroundLessor. GroundLessee may assign it rights hereunder to an entity exercising the right of first refusal under Section 14(d) of the Lease.

SECTION 7. Right of Entry.

The GroundLessor reserves the right for any of its duly authorized representatives to enter upon the Premises on reasonable advance notice at anyreasonable time to inspect the same or to make any repairs, improvements or changes necessary for the preservation thereof.

SECTION 8. Termination.

The GroundLessee agrees, upon the termination hereof, to quit and surrender the Premises in the same good order and condition as the same was in at the time GroundLessee vacated the Premises pursuant to the Agreement, reasonable wear and tear, the improvements contemplated by the Agreement, and damage caused by casualty excepted, and agrees that any permanent improvements existing upon the Premises at the time of the termination hereof shall remain thereon and title thereto shall vest in the GroundLessor. The GroundLessee shall provide such further assurances as are reasonably necessary to evidence the termination hereof.

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SECTION 9. Default.

In the event the GroundLessee shall be in default in the performance of any obligation on its part to be performed under the terms hereof, which default continues for thirty (30) days following notice and demand for correction thereof to the GroundLessee (provided that such cure period shall be extended if the default cannot reasonably be corrected within such period and the GroundLessee diligently pursues correcting the default from the date of notice from the GroundLessor until correction), the GroundLessor may exercise any and all remedies granted by law, except that no merger of the Site Lease and the Agreement shall be deemed to occur as a result thereof; however, the GroundLessor shall have no power to terminate the Site Lease by reason of any default on the part of the GroundLessee.

SECTION 10. Quiet Enjoyment.

Provided that the GroundLessee is not in default hereunder, the GroundLessee at all times during the term hereof shall peaceably and quietly have, hold and enjoy the Premises, subject to the rights of the GroundLessor under the Agreement. Notwithstanding the foregoing, GroundLessee agrees that the foregoing covenant shall at all times remain subject to GroundLessee’s performance under this Site Lease and the Agreement, and no course of action against GroundLessor pursuant to this Section 10 shall inure to GroundLessee to the extent caused by GroundLessee’s failure to perform hereunder.

SECTION 11. Environmental Matters..

(a) Representations and Warranties. The GroundLessor hereby represents and warrants to the GroundLessee that (i) neither the GroundLessor nor, to the best of the GroundLessor's knowledge after due inquiry, any other person or entity has, ever caused or permitted any Hazardous Substance (as defined below) to be generated, placed, housed, located or disposed of on, under or in the Premises and (ii) to the best of the GroundLessor's knowledge after due inquiry, no person or entity has ever used the Premises as a dump site, permanent or temporary storage site or transfer station for any Hazardous Substance. The GroundLessor further represents and warrants to the GroundLessee that after due inquiry it is not aware of any actual or alleged violation with respect to the Premises of any federal, state or local statute, ordinance, rule, regulation or other law pertaining to Hazardous Substances and that there is no action or proceeding pending before or appealable from any court, quasi judicial body or administrative agencies relating to Hazardous Substances affecting or alleged to be affecting the Premises.

(b) Indemnification. To the greatest extent permitted by law, the GroundLessor agrees to hold harmless, indemnify and defend the GroundLessee and its assignees from and against any claim, demand, penalty, fee, lien, damage, loss, expense or liability resulting from (i) any breach of the representations or warranties made by it in this Section 11, including attorney's fees and costs of, or in preparation for, any trial or appellate review, and (ii) any actual or alleged Hazardous Substance contamination, including the clean-up of Hazardous Substances from the Premises or

{00740149.DOC / 11} C-5

any other properties resulting from any activities on the Premises which directly or indirectly result in the Premises or any other property being contaminated with Hazardous Substances. This indemnity shall survive the termination of this Site Lease and shall continue to inure to the benefit of the GroundLessee, notwithstanding any assignment of its other rights hereunder, as well as any assignee of the GroundLessee's rights hereunder.

(c) Hazardous Substance. As used herein, "Hazardous Substance" shall mean any hazardous, toxic or dangerous substances, waste or material that is or may become regulated under any federal, state or local statute, ordinance, rule, regulation or other law now or hereafter in effect pertaining to environmental protection, contamination or clean-up.

SECTION 12. Waiver of Personal Liability.

All liabilities hereunder on the part of the GroundLessee and the GroundLessor shall be solely corporate liabilities of the GroundLessee and the GroundLessor, respectively, and the GroundLessor and the GroundLessee hereby release each and every director, officer and employee of the other of and from any personal or individual liability under the Site Lease and the Agreement. No director, officer, or employee of the GroundLessee or the GroundLessor shall at any time or under any circumstances be individually or personally liable hereunder for anything done or omitted to be done by the GroundLessee or the GroundLessor hereunder or under the Agreement.

SECTION 13. Eminent Domain.

In the event the whole or any part of the Premises is taken by eminent domain proceedings, the interest of the GroundLessee shall be recognized, and is hereby determined to be the amount of the then unpaid principal components of Rentalpayments due under the Agreement, including all accrued interest thereon, and the amount of the unpaid additional Rental due under the Agreement. The balance of the award, if any, shall be paid to the GroundLessor.

SECTION 14. Estoppel Certificates.

The GroundLessor, at any time and from time to time, upon not less than thirty (30) days of prior written request from the GroundLessee, will execute, acknowledge and deliver to the GroundLessee a certificate of the GroundLessor certifying that this Site Lease is unmodified (or if there have been any modifications, identifying the same) that this Site Lease is in full force and effect, if it is, and that there is no default hereunder (or if so, specifying the default).

SECTION 15. Governing Law; Partial Invalidity.

This Site Lease shall be governed by and construed in accordance with the laws of the State of Texas. If any one or more of the agreements, conditions, covenants or terms hereof shall to any extent be declared invalid, unenforceable, void or voidable for any reason whatsoever by a court of competent jurisdiction, the finding or order or

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decree of which becomes final, none of the remaining agreements, conditions, covenants or terms hereof shall be affected thereby, and each provision of the Site Lease shall be valid and enforceable to the fullest extent permitted by law.

SECTION 16. Notices.

All approvals, authorizations, consents, demands, designations, notices, offers, requests, statements or other communications hereunder by either party to the other shall be in writing and shall be sufficiently given and' served upon the other party if delivered personally or if mailed by United States registered or certified mail, return receipt requested, postage prepaid,

and, if to the GroundLessor, addressed to McLennan County Appraisal District, 315 South 26th Street, Waco, Texas 76710, Attn: Chief Appraiser (with a copy to Robert Meyers, McCreary, Veselka, Bragg & Allen, 100 N. 6th Street, Suite 704, Waco, Texas 76701),

and if to GroundLessee at Capital One Public Funding, LLC, 265 Broadhollow Road, Melville, New York 11747 (with a copy to Carey Troell, Fulbright & Jaworski, L.L.P., 300 Convent, Suite 2200, San Antonio, Texas 78205),

or to such other address and addressee as the respective parties (or, in the case of the GroundLessee, its assignee, if any) may from time to time designate by notice in writing.

SECTION 17. Section Headings.

All section headings contained herein are for convenience of reference only and are not intended to define or limit the scope of any provisions hereof.

SECTION 18. Execution.

The Site Lease may be executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument.

SECTION 19. Successors.

This Site Lease shall be binding upon, and inure to the benefit of and be enforceable by the parties and their respective permitted successors and assigns.

SECTION 20. No Partnership.

Nothing in this Site Lease shall be construed as making any party a partner or joint venturer with any other party.

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IN WITNESS WHEREOF, the parties hereto shall have entered into the Site Lease by their officers thereunto duly authorized as of the day and year first above written.

ATTEST: MCLENNAN COUNTY APPRAISAL DISTRICT, GROUNDLESSOR

______________________________ By: _________________________________

ATTEST: CAPITAL ONE PUBLIC FUNDING, LLC, GROUNDLESSEE,

______________________________ By: _________________________________Name: _______________________________Title: ________________________________

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STATE OF TEXAS )) SS

COUNTY OF MCLENNAN )

On _______________________, 2009, before me, the undersigned, a Notary Public in and for said State, personally appeared Andrew J. Hahn, personally known to me or proven to me on the basis of satisfactory evidence to be the Chief Appraiser of the McLennan County Appraisal District (the "GroundLessor") who is known to me to be the person who executed the within Site Lease on behalf of the GroundLessor therein named, and who acknowledged to me he/she was duly authorized to execute such Site Lease on behalf of said GroundLessor.

WITNESS my hand and official seal.

_____________________________________Notary Public in and for said County and State

STATE OF ______ )) SS

COUNTY OF _________ )

On _______________________, 2009, before me, the undersigned, a Notary Public in and for said State, personally appeared ______________________________, personally known to me or proven to me on the basis of satisfactory evidence to be the _______________________________________ of the Capital One Public Funding, LLC (the"GroundLessee") who is known to me to be the person who executed the within Site Lease on behalf of GroundLessee, and who acknowledged to me that the GroundLessee executed the within instrument pursuant to powers vested in him/her by the GroundLessee’s By-laws or a resolution of is Board of Directors.

WITNESS my hand and official seal.

_____________________________________Notary Public in and for said County and State

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EXHIBIT A TO SITE LEASE

Being Lot One (1) in Block “A” of the Waco Northstar Addition to the City of Waco, McLennan County, Texas (being a resubdivision of that 7.073 acres of land in the T.J. Chambers Survey, Abstract Number 7, described in deed to Waco Northstar Associates, L.P., a Texas limited partnership of record as Document Number 2002014814 of the Official Public Records McLennan County, Texas and being a resubdivision of Blocks 57 and 62 of the Glenwood Addition to the City of Waco, per plat recorded in Volume 69, Page 91 of the Deed Records of McLennan County, Texas) as per plat recorded as Instrument #2004001424 of the Official Public Records of McLennan County, Texas.

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EXHIBIT B TO SITE LEASE

All oil, gas and other minerals in and under and that may be produced from the above described property reserved in Quitclaim Deed dated 04/30/1951, executed by St. Louis Southwestern Railway Company of Texas to Wm. Cameron & Co. recorded in Volume 677, Page 480, McLennan County Deed Records.

An Ingress/Egress easement across the Northwestern portion of said lot as shown on plat of said addition recorded as Instrument # 2004001424 of the Official Public Records of McLennan County, Texas as stated and shown on survey dated April 16, 2009, made by Gale Arnold, RPLS, No. 3879.

100 year flood plane across the Southeastern portion of said lot as shown on plat of said addition recorded as Instrument #2004001424 of the Official Public Records of McLennan County, Texas no longer affects this property, based on graphic scaling of this lot, it appears to be within Zone X, defined as “Areas determined to be outside the 0.2% annual chance flood” –FIRM: City of Waco, McLennan County, Texas Map Number 48309C 370C Effective Date September 26, 2008, as stated on survey dated April 16, 2009, made by Gale Arnold, RPLS, No. 3879.

Easement and conditions as stated in Quitclaim Deed from the City of Waco to William Cameron & Company recorded in Volume 1779, Page 812, McLennan County Deed Records as shown on survey dated April 16, 2009, made by Gale Arnold, RPLS, No. 3879.

Location of fence as shown on survey dated April 16, 2009, made by Gale Arnold, RPLS, No. 1 3879.

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Exhibit DLease Term and

Schedule of Payments

Original Loan Amount: $1,650,000Loan Balance as of August 16, 2016: $1,269,745.67Original Interest Rate through August 15, 2016: 5.85%Amended Interest Rate from August 16, 2016 through Lease Termination: 4.50%

Date Payment Interest Principal Balance

Loan 5/15/2009 1,650,000.00

1 11/1/2009 70,382.80 44,956.85 25,425.95 1,624,574.05

2 5/1/2010 70,382.80 47,518.79 22,864.01 1,601,710.04

3 11/1/2010 70,382.80 46,850.02 23,532.78 1,578,177.26

4 5/1/2011 70,382.80 46,161.68 24,221.12 1,553,956.14

5 11/1/2011 70,382.80 45,453.22 24,929.58 1,529,026.56

6 5/1/2012 70,382.80 44,724.03 25,658.77 1,503,367.79

7 11/1/2012 70,382.80 43,973.51 26,409.29 1,476,958.50

8 5/1/2013 70,382.80 43,201.04 27,181.76 1,449,776.74

9 11/1/2013 70,382.80 42,405.97 27,976.83 1,421,799.91

10 5/1/2014 70,382.80 41,587.65 28,795.15 1,393,004.76

11 11/1/2014 70,382.80 40,745.39 29,637.41 1,363,367.35

12 5/1/2015 70,382.80 39,878.49 30,504.31 1,332,863.04

13 11/1/2015 70,382.80 38,986.24 31,396.56 1,301,466.48

14 5/1/2016 70,382.80 38,067.89 32,314.91 1,269,151.57

15 11/1/2016 64,203.24 11,903.87 52,299.37 1,216,852.20

16 5/1/2017 64,203.23 27,392.54 36,810.69 1,180,041.51

17 11/1/2017 64,203.23 26,564.30 37,638.93 1,142,402.58

18 5/1/2018 64,203.24 25,717.43 38,485.81 1,103,916.77

19 11/1/2018 64,203.23 24,851.49 39,351.74 1,064,565.03

20 5/1/2019 64,203.23 23,966.08 40,237.15 1,024,327.88

21 11/1/2019 64,203.23 23,060.74 41,142.49 983,185.39

22 5/1/2020 64,203.24 22,135.04 42,068.20 941,117.19

23 11/1/2020 64,203.23 21,188.50 43,014.73 898,102.46

24 5/1/2021 64,203.23 20,220.67 43,982.56 854,119.90

25 11/1/2021 64,203.24 19,231.07 44,972.17 809,147.73

26 5/1/2022 64,203.23 18,219.19 45,984.04 763,163.69

27 11/1/2022 64,203.23 17,184.55 47,018.68 716,145.01

28 5/1/2023 64,203.24 16,126.63 48,076.61 668,068.40

29 11/1/2023 64,203.24 15,044.91 49,158.33 618,910.07

30 5/1/2024 64,203.23 13,938.84 50,264.39 568,645.68

31 11/1/2024 64,203.24 12,807.90 51,395.34 517,250.34

32 5/1/2025 64,203.24 11,651.50 52,551.74 464,698.60

33 11/1/2025 64,203.24 10,469.09 53,734.15 410,964.45

34 5/1/2026 64,203.24 9,260.07 54,943.17 356,021.28

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Date Payment Interest Principal Balance

35 11/1/2026 64,203.24 8,023.85 56,179.39 299,841.89

36 5/1/2027 64,203.24 6,759.81 57,443.43 242,398.46

37 11/1/2027 64,203.23 5,467.33 58,735.90 183,662.56

38 5/1/2028 64,203.23 4,145.77 60,057.46 123,605.10

39 11/1/2028 64,203.23 2,794.48 61,408.75 62,790.45

40 5/1/2029 64,203.24 1,412.79 62,790.45 0.00

Grand Totals 1,650,000.00

The Prepayment Premium is as set forth in Section 11(b) of the Agreement.

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Exhibit EApproving Resolution of

McLennan County Appraisal DistrictBoard of Directors

McLENNAN COUNTY APPRAISAL DISTRICT

September 16, 2016

To: Mclennan County Appraisal District Board of Directors

Subject: Taxpayer Liaison Officer Complaints Report

I have two complaints to report at this time:

1. Shirley K. Parker- Complaint against Mclennan County Appraisal District (MCAD) and Appraisal Review Board (ARB). Ms. Parker was upset that her evidence was not scanned in an orderly manner. I apologized for that and assured her that I would address the problem. She also had a 2016 property card printed from MCAD public terminal for Property ID 165214. She was very upset that property is brand new and assessed at $30,000.00 and her fifty year old house is assessed at $108,310.00. I explained that Property ID 165214 was assessed at 16% complete as of January 1, 2016. She feels that ARB "did not listen to her and had their minds made up beforehand and the whole thing was rigged and a joke." I explained that ARB is separate entity from MCAD; no one at MCAD has authority over ARB and they are appointed by Judge Ralph Strother.

Ms. Parker was on the July 27 agenda to address our Board of Directors (BOD). She missed the meeting due to miscommunication. I emailed Mr. Kinnaird to ask permission to put her on next BOD meeting agenda and he approved. I called her on 09-01-2016 to ask if she could make the 09-16-2016 meeting; she cannot make it due to work conflict. I told her I would call her when I have date and time for next meeting .

2. Bettye Tucker- Complaint against ARB, panel chair Charles Scott in particular. She states that Mr. Scott "was very stern and opinionated and didn't seem to want to listen to my opinions. His mind was made up and it didn't seem to matter what I said. My reasoning seems foolish to him and a waste of his time therefore nothing was changed." I told Ms. Tucker I would report her complaint to BOD and State of Texas Comptroller's office. She does not wish to address our BOD.

P.O. Box 2297 Waco, TX 76703-2297+ 315 S. 261h St . Waco, TX 76710 + (254) 752-9864 Phone+ (254) 754-2339 Fax

www.mclennancad.org

McLENNAN COUNTY APPRAISAL DISTRICT

I have contacted Judge Strother regarding Appraisal Review Board (ARB) appointments for 2017/2018. I am currently assisting him in the application process.

Thank you and have a blessed day.

P.O. Box 2297 Waco, TX 76703-2297+ 315 S. 261h St. Waco, TX 76710 + (254) 752-9864 Phone+ (254) 754-2339 Fax

www. mclenna ncad.org