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Home My Public Portal AboutOrd 399 PBC Land Purchase ,..~~ ....,.~~_."._...._.."---.--_.,..-.-_....-->~-" .- .""~ "^-~~""---~"~---^>--~'-~"--- GILMORE & BELL, P.c. 08/12/2002 ORDINANCE NO. 3 f' 9' AN ORDINANCE AUTHORIZING THE CITY OF BEL AIRE, KANSAS TO ENTER INTO A LEASE WITH OPTION TO PURCHASE WHEREBY THE CITY WILL LEASE FROM THE CITY OF BEL AIRE, KANSAS PUBLIC BUILDING COMMISSION CERTAIN REAL PROPERTY, INCLUDING A CITY HALL FACILITY AND SWIMMING POOL FACILITY LOCATED THEREON; APPROVING THE FORM OF SAID LEASE; AND AUTHORIZING THE EXECUTION THEREOF AND CERTAIN RELATED DOCUMENTS. WHEREAS, the Governing Body (the "Governing Body") of the City of Bel Aire, Kansas (the "City") has heretofore declared it advisable to acquire, construct, furnish and equip a city hall facility and a swimming pool facility in Bel Aire, Kansas (with land upon which such facilities will be located, jointly the "Project"); and WHEREAS, under the authority of K.S.A. 12-1757 et seq. and Charter Ordinance No.1 0 (jointly, the "Act"), the Governing Body has heretofore created The City of Bel Aire, Kansas Public Building Commission, a municipal corporation of the State of Kansas (the "PBC"); and WHEREAS, the PBC has the power and authority under the Act to issue revenue bonds to provide funds for the purpose of paying all or a portion of the costs of the Project; and WHEREAS, the Board has deemed it advisable to request that the PBC provide for the financing of the Project in an amount of not to exceed $4,335,000 through the issuance of revenue bonds; and WHEREAS, the PBC has deemed it advisable to provide for the financing of the Project by the issuance of revenue bonds in an amount of not to exceed $4,335,000, and notice of such intent was properly published; and WHEREAS, the estimated costs to acquire, construct, furnish and equip the Project are now determined to be $4,335,000; and WHEREAS, for purposes of financing the costs of acquiring, constructing and equipping the Project, the City hereby determines that it is in the best interest of the City that the City and the PBC enter into a Lease With Option to Purchase (the "Lease"), to provide for the acquisition, construction, furnishing and equipping of the Project and the leasing of the Project by the PBC to the City; and KMC\403 156\ORDINANCE ~.. '-._-"-"~'._-'--"'-"-'<-"~-'-~-~~"",","._-,--~",~-,,-~~-,,- WHEREAS, the Lease shall provide sufficient funds to finance an issue of PBC revenue bonds in an amount of not to exceed $4,335,000 which shall have a maturity term of approximately thirty-three years (the "Bonds"); and NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF BEL AIRE, KANSAS: SECTION 1. The City hereby finds and determines, pursuant to the Act that (i) acquiring, constructing, furnishing and equipping the Project; (ii) leasing the Project from the PBC under the terms and provisions set forth in the Lease; and (iii) the issuance of the Bonds by the PBC, with terms as set forth in the Bond Purchase Agreement, dated as of September 1,2003, by and between the PBC and U.S. Bancorp Piper Jaffray, Inc., Leawood , Kansas, the purchaser of the Bonds (the "Bond Purchase Agreement", to finance a portion of the costs of the Project, are necessary, convenient and in furtherance of the governmental purposes of the City. SECTION 2. The Lease and Bond Purchase Agreement in substantially the form presented to this meeting of the Governing Body, are in all material respects approved, authorized and confirmed. The Mayor and the City Clerk are hereby authorized and directed to affix their signatures and the seal of the City to the Lease and Bond Purchase Agreement, for and on behalf of the City, with such changes therein as the City Attorney may deem necessary or appropriate. SECTION 3. The Mayor and City Clerk are hereby authorized to execute any and all documents and take such actions as they may deem necessary or advisable in order to carry out and perform the intent of this Ordinance. SECTION 4. All action heretofore taken (not inconsistent with the provisions of this Ordinance) by the City or the officials of the City, directed toward the acquisition, construction and equipping of the Project, the leasing of the Project from the PBC and the issuance of the Bonds by the PBC, are hereby ratified, approved and confirmed. SECTION 5. This Ordinance shall be effective from and its passage by the Governing Body of the City, approval and execution by the Mayor and publication in the official City newspaper. KMC\403 I 56\ORDINANCE 2 PASSED by the Governing Body of the City of Bel Aire, Kansas, on August 19, 2003 and APPROVED and SIGNED by the Mayor. 0\,.", " ~.\..>.-_~ ,'~::'., rj ,~\ .c"';"'\ I" . ',.., 1"..../-- "c_"r " , C";,,rs~~r lilt- ,',: 'r" ~... J~ \ -I "-.' '11 / CI1\J,.\.1 ',:' Cof" '~ '" . '. - ,or ::( 1'\/./~\lYH I:: ~ , "..-' Ii'. t i Iii ,('. / '" A -' .11 i L 1 " !. ',1 1 U / ~ I U Ht,,' ",,;.{.~ ~rrEST: ",. \ "', " , hI; "'.\\ THE CITY OF BEL AIRE, KANSAS 7 tJYJ Mayor ~I' /' ~ Ci Clerk KMC\403 I 56\ORDINANCE 1 GILMORE & BELL, P.C. 08/12/2002 ORDLNANCENO. 399 AN ORDINANCE AUTHORIZING THE CITY OF BEL AIRE, KANSAS TO ENTER INTO A LEASE WITH OPTION TO PURCHASE WHEREBY THE CITY WILL LEASE FROM THE CITY OF BEL AIRE, KANSAS PUBLIC BUILDING COMMISSION CERTAIN REAL PROPERTY, INCLUDING A CITY HALL FACILITY AND SWIMMING POOL FACILITY LOCATED THEREON; APPROVING THE FORM OF SAID LEASE; AND AUTHORIZING THE EXECUTION THEREOF AND CERTAIN RELATED DOCUMENTS. WHEREAS, the Governing Body (the "Governing Body") of the City of Bel Aire, Kansas (the "City") has heretofore declared it advisable to acquire, construct, furnish and equip a city hall facility and a swimming pool facility in Bel Aire, Kansas (with land upon which such facilities will be located, jointly the "Project"); and WHEREAS, under the authority of K.S.A. 12-1757 et seq. and Charter Ordinance No. 10 (jointly, the "Act"), the Governing Body has heretofore created The City of Bel Aire, Kansas Public Building Commission, a municipal corporation of the State of Kansas (the "PBC"); and WHEREAS, the PBC has the power and authority under the Act to issue revenue bonds to provide funds for the purpose of paying all or a portion of the costs of the Project; and WHEREAS, the Board has deemed it advisable to request that the PBC provide for the financing of the Project in an amount of not to exceed $4,335,000 through the issuance of revenue bonds; and WHEREAS, the PBC has deemed it advisable to provide for the financing of the Project by the issuance of revenue bonds in an amount of not to exceed $4,335,000, and notice of such intent was properly published; and WHEREAS, the estimated costs to acquire, construct, furnish and equip the Project are now determined to be $4,335,000; and WHEREAS, for purposes of financing the costs of acquiring, constructing and equipping the Project, the City hereby determines that it is in the best interest of the City that the City and the PBC enter into a Lease With Option to Purchase (the "Lease"), to provide for the acquisition, construction, furnishing and equipping of the Project and the leasing of the Project by the PBC to the City; and KMC\403156\ORDINANCE WHEREAS, the Lease shall provide sufficient funds to finance an issue of PBC revenue bonds in an amount of not to exceed $4,335,000 which shall have a maturity term of approximately thirty- three years (the "Bonds"); and NOW, THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF BEL AIRE, KANSAS: SECTION 1. The City hereby finds and determines, pursuant to the Act that (i) acquiring, constructing, furnishing and equipping the Project; (ii) leasing the Project from the PBC under the terms and provisions set forth in the Lease; and (iii) the issuance of the Bonds by the PBC, with terms as set forth in the Bond Purchase Agreement, dated as of September 1, 2003, by and between the PBC and U.S. Bancorp Piper Jaffray, Inc., Leawood , Kansas, the purchaser of the Bonds (the "Bond Purchase Agreement", to finance a portion of the costs of the Project, are necessary, convenient and in furtherance of the governmental purposes of the City. SECTION 2. The Lease and Bond Purchase Agreement in substantially the form presented to this meeting of the Governing Body, are in all material respects approved, authorized and confirmed. The Mayor and the City Clerk are hereby authorized and directed to affix their signatures and the seal of the City to the Lease and Bond Purchase Agreement, for and on behalf of the City, with such changes therein as the City Attorney may deem necessary or appropriate. SECTION 3. The Mayor and City Clerk are hereby authorized to execute any and all documents and take such actions as they may deem necessary or advisable in order to carry out and perform the intent of this Ordinance. SECTION 4. All action heretofore taken (not inconsistent with the provisions of this Ordinance) by the City or the officials of the City, directed toward the acquisition, construction and equipping of the Project, the leasing of the Project from the PBC and the issuance of the Bonds by the PBC, are hereby ratified, approved and confirmed. SECTION 5. This Ordinance shall be effective from and its passage by the Governing Body of the City, approval and execution by the Mayor and publication in the official City newspaper. KMC\403156\ ORDINANCE 2 PASSED by the Governing Body of the City of Bel Aire, Kansas. on August 19, 2003 and APPROVED and SIGNED by the Mayor. THE CITY OF BEL AIRE, KANSAS (Seal) Mayor ATTEST: City Clerk KMC\403156\ORDINANCE 3 Gilmore & Bell, P.C. 8/12/2003 LEASE WITH OPTION TO PURCHASE BY AND BETWEEN CITY OF BEL AIRE, KANSAS PUBLIC BUILDING COMMISSION AND THE CITY OF BEL AIRE, KANSAS DATED AS OF SEPTEMBER 1, 2003 a. LEASE WITH OPTION TO PURCHASE TABLE OF CONTENTS Parties Recitals ARTICLE I Section Section Section Section 1 1.1. Definitions 2 1.2. Rules of Interpretation 4 1.3. Representations and Covenants by Tenant 5 1.4. Representations and Covenants by PBC 6 ARTICLE II Section 2.1. Acquisition of Site; Granting of Leashold 7 Section 2.2. Construction of Project 7 Section 2.3. Termination of Lease 7 ARTICLE III Section 3.1. Basic Rent Section 3.2. Additional Rent Section 3.3. Agreement for Funding of Debt Service Reserve Fund as Additional Rent Section 3.4. Rental Payments Payable Without Abatement or Setoff Section 3.5. Rental Payments Constitute Current Expenses Section 3.6. Prepayment of Rental Payments Section 3.7. Deposit of Rental Payments by PBC 7 7 7 7 8 8 8 ARTICLE IV Section 4.1. Disposition of Bond Proceeds 8 ARTICLE V Section 5.1. Construction of Project Section 5.2. Project Contracts Section 5.3. Payment of Project Costs Section 5.4. Project Documents Section 5.5. Changes or Amendments to Project Documents Section 5.6. Enforcement of Contracts and Surety Bonds Section 5.7. Project Use Section 5.8. Surplus in the Project Fund Section 5.9. Right of Entry by PBC Section 5.10. Machinery and Equipment Purchased by Tenant Section 5.11. Project Property of PBC 8 8 8 9 10 10 10 10 10 10 10 ARTICLE VI Section 6.1. Insurance as a Condition to Disbursement 11 Section 6.2. General Insurance Provisions 11 Section 6.3. Evidence of Title 11 ARTICLE VII Section 7.1. Impositions Section 7.2. PBC May Not Sell Section 7.3. Contest of Impositions 12 12 12 ARTICLE VIII Section 8.1. Use of Project 12 Section 8.2. Limitations on Use of Project 12 ARTICLE IX Section 9.1. Section 9.2. Section 9.3. Section 9.4. Sublease by Tenant 13 Assignment by Tenant 13 Release of Tenant 13 Covenant Against Other Assignments 13 ARTICLE X Section 10.1. Repairs and Maintenance Section 10.2. Operation of Project 13 13 ARTICLE XI Section 11.1. Alteration of Project 13 ARTICLE XII Section 12.1. Additional Improvements 14 ARTICLE XIII Section 13.1. Securing of Permits and Authorizations 14 Section 13.2. Mechanics' Liens 14 Section 13.3. Contest of Liens 14 Section 13.4. Utilities 15 ARTICLE XIV Section 14.1. Indemnity 15 Section 14.2. Liability 16 ARTICLE XV Section 15.1. Access to Project 16 KMC\403156\LEASE 11 ARTICLE XVI Section 16.1. Environmental Covenants 16 ARTICLE XVll Section 17.1. Automatic Option to Extend Term 17 ARTICLE XVIII Section 18.1. Option to Purchase Project 17 Section 18.2. Quality of Title and Purchase Price 17 Section 18.3. Closing of Purchase 17 Section 18.4. Effect of Failure to Complete Purchase 18 Section 18.5. Application of Condemnation Awards if Tenants Purchases Project 18 ARTICLE XIX Section 19.1. Damage and Destruction 18 Section 19.2. Condemnation 19 ARTICLE XX Section 20.1. Notice of Default 19 Section 20.2. Remedies on Default 20 Section 20.3. Control of Remedies By Bond Insurer Upon an Event of Default and Event of Insolvency 21 Section 20.4. Survival of Obligations 21 Section 20.5. No Remedy Exclusive 21 ARTICLE XXI Section 21.1. Performance of Tenants' Obligations by PBC 71 ARTICLE XXll Section 22.1. Failure to Comply with Continuing Disclosure Requirements 22 ARTICLE XXIII Section 23.1. Surrender of Possession 22 ARTICLE XXIV Section 24.1. Notices 22 ARTICLE XXV Section 25.1. Net Lease 22 Section 25.2. Funds Held by Paying Agent After Payment of Bonds 23 KMC\403156\LEASE 111 ARTICLE XXVI Section 26.1. Rights and Remedies 23 Section 26.2. Waiver of Breach 23 Section 26.3. PBC Shall Not Unreasonably Withhold Consents and Approvals 23 ARTICLE XXVII Section 27.1. Quiet Enjoyment and Possession 23 ARTICLE XXVIII Section 28.1. Section 28.2. Section 28.3. Section 28.4. Section 28.5. Section 28.6. Section 29.7. Amendments 23 Granting of Easements 24 Security Interests 25 Construction and Enforcement 25 Severability 25 Covenants Binding on Successors and Assigns 25 Execution of Counterparts 25 Executions and Acknowledgements 26-27 Schedule I Schedule II KMC\403156\LEASE iv LEASE WITH OPTION TO PURCHASE THIS LEASE WITH OPTION TO PURCHASE is made and entered into as of the 1st day of September, 2003 by and between the City of Bel Aire, Kansas Public Building Commission (the "PBC"), a municipal corporation duly organized and existing under the laws of the State of Kansas and the City of Bel Aire, Kansas (the "City" or "Tenant"). WITNESSETH: WHEREAS, pursuant to K.S.A. 12-1757 et seq., as amended by Charter Ordinance No. 10 (jointly, the "Act"), and Ordinance No. 382 (the "Ordinance"), the City Council of the City has heretofore created the PBC; and WHEREAS, the PBC has heretofore adopted Resolution Nos. 02-03 and _-03 declaring an intent to: (a) acquire, construct, furnish and equip a swimming pool facility to serve Central Park Addition to the City of Bel Aire, Kansas, to be located on a certain site in the City (the "Land") and appurtenances thereto (the "Swimming Pool Improvements"); and to acquire property and make thereon certain public park and city hall improvements (the "City Hall Improvements") (the Swimming Pool Improvements and City Hall Improvements hereinafter collectively referred to as the "Improvements"); (b) issue its revenue bonds, in one or more series in accordance with the provisions of the Act, the Ordinance and all other laws of the State supplemental thereto or amendatory thereof, in a principal amount not to exceed $4,335,000 to finance the costs of the Improvements and an interest in the real estate upon which the Improvements will be located (the "Land," and, with the Improvements, jointly the "Project") and provide for related reserves and financing costs; and (c) prior to the issuance of any series of bonds for the Project, enter into a lease and/or lease - purchase agreement with the City for the Project; and WHEREAS, in accordance with the provisions of the Act, Resolution Nos. 02-03 and _-03 were duly published; and WHEREAS, the PBC has found and determined that it is desirable to issue two series of revenue bonds pursuant to Resolution No. dated as of September 1, 2003 (the "Bond Resolution"), to be designated "City of Bel Aire, Kansas Public Building Commission Revenue Bonds, Series A, 2003" (the "Series A, 2003 Bonds") and "City of Bel Aire, Kansas Public Building Commission Taxable Revenue Bonds, Series B, 2003" (the "Series B, 2003 Bonds") in the aggregate principal amount of $4,335,000 for the purpose of providing funds to pay the costs of constructing and equipping the Project; and WHEREAS, for the purpose of securing the Series A, 2003 and Series B, 2003 Bonds (jointly, the "Series 2003 Bonds"), the PBC further finds and determines that it is necessary and desirable in connection with the issuance of the Series 2003 Bonds to enter into this Lease With Option to Purchase (the "Lease "), with the City pursuant to which the PBC shall cause the Improvements to be developed, constructed and equipped on the Land and the Project to be leased to the City in consideration of rentals which, in the aggregate, are intended to be sufficient to provide for the payment of the principal of, premium, if any, and interest on the Series 2003 Bonds; and WHEREAS, the PBC may issue Additional Bonds, as provided in the Bond Resolution, from time to time (the Series 2003 Bonds and Additional Bonds are referred to herein as the "Bonds"). NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein set forth, PBC and Tenant do hereby covenant and agree as follows: ARTICLE I Section 1.1. Definitions. In addition to the words, terms and phrases elsewhere defined in this Lease and the Bond Resolution, the following words, terms and phrases as used herein shall have the following meanings unless the context or use indicates another or different meaning or intent: "Additional Rent" means all fees, charges and expenses of the PBC, all Impositions, and all other expenses of whatever nature which Tenant has agreed to pay or assume, under the provisions of this Lease and all expenses and costs incurred by the PBC in connection with the enforcement of any rights under this Lease or the Bond Resolution. The fees, charges and expenses of the PBC shall include all claims and litigation approved by Tenant brought by or on behalf of the PBC for any claim arising out of the construction and operation of the Project, including warranty, defects, title and all other claims of whatever nature, and all claims and litigation brought against the PBC, including liability, condemnation awards, title claims of whatever nature, including claims against the PBC board members individually or any of the agents, servants and employees of the PBC arising out of the work and employment of the PBC which are not covered by any insurance of the PBC. The fees, charges and expenses of the PBC shall further include, without limitation, all costs incurred in connection with the issuance, transfer, exchange, registration, redemption or payment of the Bonds except (a) the reasonable fees and expenses in connection with the replacement of a Bond or Bonds mutilated, stolen, lost or destroyed or (b) any tax or other government charge imposed in relation to the transfer, exchange, registration, redemption or payment of the Bonds, and any amount to provide for the payment of all required rebate amounts to the United States in accordance with the Code. "Additional Term" shall mean any additional term of this Lease commencing on the last day of the Basic Term and terminating not later than the payment of the principal of, redemption premium, if any, and interest on all Outstanding Bonds has been made. "Authorized PBC Representative" means the President of the PBC or such other person as is designated to act on behalf of the PBC as evidenced by a written certificate, containing the specimen signature of such person. Such certificate may designate an alternate or alternates, each of whom shall be entitled to perform all duties of the Authorized PBC Representative. "Authorized Tenant Representative" means the Mayor of the City or such other person as is designated to act on behalf of the City as evidenced by a written certificate furnished to the PBC, containing the specimen signature of such person. Such certificate may designate an alternate or alternates, each of whom shall be entitled to perform all duties of the Authorized Tenant Representative. "Basic Rent" means the monthly amount, when added to Basic Rent Credits, shall be sufficient to pay, on each Basic Rent Payment Date, the amount of Basic Rent which is due and payable on such Basic Rent Payment Date, as set forth in the Schedule of Basic Rent Payments attached to this Lease as Schedule IL "Basic Rent Credits" means the pro -rata amount of funds on deposit in the Principal and Interest Payment Account relating to this Lease and available for the payment of principal of, redemption premium, if any, and interest on the Bonds on any Payment Date. ICMC\403156\LEASE 2 "Basic Rent Payment Dates" means the third business day before each February 1 and August 1, commencing the third business day before August 1, 2004 until the principal of, redemption premium, if any, and interest on the Bonds has been fully paid or provision made therefore in accordance with the provisions of the Bond Resolution. "Basic Term" means that term commencing as of the date of this Lease and ending on August 1, 2026, subject to prior termination as specified in this Lease, but to continue thereafter until all of the principal of, redemption premium, if any, and interest on all Outstanding Bonds shall have been paid in full or provision made therefore in accordance with the provisions of the Bond Resolution. "Bond Resolution" means the Bond Resolution, adopted August 19, 2003, as amended and supplemented by any supplemental resolutions adopted in accordance with the provisions of the Bond Resolution. "CERCLA" means the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. §9601, et seq. "Environmental Law" means CERCLA, SARA, and any other federal, State or local environmental statute, regulation or ordinance presently in effect or coming into effect during the term of this Lease. "Event of Default" with respect to this Lease means any one of the following events: (a) Failure of Tenant to make any payment of Basic Rent at the times and in the amounts required hereunder; or (b) Failure of Tenant to make any payment of Additional Rent at the times and in the amounts required hereunder; or (c) Failure to observe or perform any other covenant, agreement, obligation or provision of this Lease on the Tenant's part to be observed or performed (other than covenants with respect to Continuing Disclosure), and the same is not remedied within thirty (30) days after the PBC has given the Tenant written notice specifying such failure or such longer period as the PBC may grant to correct such default; provided that (i) Tenant has commenced such correction within said 30 -day period, and (ii) Tenant diligently prosecutes such correction to completion; or (d) Any statement, representation or warranty made by Tenant in or pursuant to this Lease or its execution, delivery or performance shall prove to have been false, incorrect, misleading or breached in any material respect on the date when made; or (e) Tenant shall (i) apply for consent to the appointment of a receiver, trustee, custodian or liquidator of Tenant, or of all or a substantial part of the assets of Tenant, (ii) be unable, fail or admit in writing its inability generally to pay its debts as they become due, (iii) make a general assignment for the benefit of creditors, (iv) have an order for relief entered against it under applicable bankruptcy law, or (v) file a voluntary petition in bankruptcy or a petition or an answer seeking reorganization or an arrangement with creditors or taking advantage of any insolvency law or any answer admitting the material allegations of a petition filed against the State in any bankruptcy, reorganization or insolvency proceeding; or KMCW03156\LEASE 3 (f) An order, judgement or decree shall be entered by any court of competent jurisdiction, approving a petition or appointing a receiver, trustee, custodian or liquidator of the Tenant of all or a substantial part of the assets of the Tenant, in each case without its application, approval or consent, and such order, judgment or decree shall continue unstayed and in effect for any period of 30 consecutive days. "Governmental Unit" means a state or political subdivision or agency or instrumentality thereof. "Hazardous Substances" means all "hazardous substances" as defined in CERCLA. "Impositions" means all taxes and assessments, general and special, which may be lawfully taxed, charged, levied, assessed or imposed upon or against or payable for or in respect of the Land or any part thereof, or upon the Improvements located thereon or Tenant's interest therein, including any new lawful taxes and assessments not of the kind enumerated above to the extent that the same are lawfully made, levied or assessed in lieu of or in addition to taxes or assessments now customarily levied against real or personal property, and further including all water and sewer charges, assessments and other governmental charges and impositions whatsoever, foreseen or unforeseen, which if not paid when due would encumber PBC's title to the Project. "Improvements" means collectively the Swimming Pool Improvements, the City Hall Improvements and related improvements described in the preamble to this Lease. "Land" means the real property or interest therein referred to in the preamble to this Lease and described in Schedule I hereto, including all improvements and structures located thereon as of the date of this Lease. "Lease" means the Lease With Option to Purchase, dated as of September 1, 2003 among the PBC and pursuant to which the PBC shall cause the Improvements to be developed, constructed and equipped on the Land and leased to the City. "Net Proceeds" means, when used with respect to any insurance or condemnation award with respect to the Project, the proceeds from the insurance or condemnation award remaining after the payment of all expenses (including attorney's fees and any extraordinary expenses of the Bond Registrar and Paying Agent) incurred in the collection of such proceeds. "Project Documents" means those documents for construction and acquisition of the Project, referred to in Section 5.4 hereof. "Rental Payments" means the aggregate of the Basic Rent and Additional Rent payments provided for pursuant to Article III of this Lease. "SARA" means the Superfund Amendments and Reauthorization Act of 1986, as now in effect and as hereafter amended. Section 1.2. Rules of Interpretation. (a) Words of the masculine gender shall be deemed and construed to include correlative words of the feminine gender. Unless the context shall otherwise indicate, the words importing the singular number shall include the plural and vice versa, and words importing persons shall include firms, associations and corporations, including public bodies, as well as natural persons. KMC\403156\LEASE 4 (b) Wherever in this Lease it is provided that either party shall or will make any payment or perform or refrain from performing any act or obligation, each such provision shall, even though not so expressed, be construed as an express covenant to make such payment or to perform, or not to perform, as the case may be, such act or obligation. (c) All references in this instrument to designated "Articles," "Sections" and other subdivisions are, unless otherwise specified, to the designated Articles, Sections and subdivisions of this instrument as originally executed. The words "herein," "hereof," "hereunder" and other words of similar import refer to this Lease as a whole and not to any particular Article, Section or subdivision. (d) The Table of Contents and the Article and Section headings of this Lease shall not be treated as a part of this Lease or as affecting the true meaning of the provisions hereof. Section 1.3. Representations and Covenants by Tenant. The Tenant makes the following covenants and representations as the basis for the undertakings on its part herein contained. (a) The Tenant will not make, or cause or permit to be made, any use of the Bond proceeds which would cause the Series A, 2003 Bonds to be "arbitrage bonds" within the meaning of the Code. the Tenant will comply with, and will take all action reasonably required to insure that the PBC complies with, all applicable requirements of the Code until all of the Bonds have been paid. (b) Subject to the provisions of Artide IV hereof, the Tenant has the right, power and authority, to enter into this Lease, and to perform its obligations hereunder. (c) Neither the execution or delivery of this Lease, the consummation of the transactions contemplated hereby or by the Bond Resolution, nor the fulfillment of or compliance with the terms and conditions of this Lease contravenes any provisions or conflicts with or results in a breach of the terms, conditions or provisions of any mortgage, debt, agreement, indenture or instrument to which the Tenant is a party or by which it is bound, or to which it or any of its properties is subject, or would constitute a default (without regard to any required notice or the passage of any period of time) under any of the foregoing, or would result in the creation or imposition of any lien, charge or encumbrance whatsoever upon any of the property or assets of the Tenant under the terms of any mortgage, debt, agreement, indenture or instrument, or violates any existing law, administrative regulation or court order or consent decree to which the Tenant is subject. (d) This Lease constitutes a legal, valid and binding obligation of the Tenant enforceable in accordance with its terms. The Tenant covenants to make all the Rental Payments required under this Lease from whatever source of revenues is legally available, and will levy ad valorem taxes without limit, if necessary, to make such Rental Payments. (e) Not more than 10% of the proceeds of the Series A, 2003 Bonds will be used directly or indirectly in a trade or business carried on by any person other than a Governmental Unit. Tenant understands that use of facilities financed with Series A, 2003 Bond proceeds is treated as use of such proceeds. (f) Not more than 5% of the proceeds of the Series A, 2003 Bonds will be used (a) for any private business not related to a governmental use of such proceeds, or (b) used in an amount disproportionate to a related governmental use of such proceeds. KMC\403156\LEASE 5 (g) The Tenant will furnish to the PBC prior to issuance and delivery of each series of Bonds, all information requested by the PBC necessary for PBC to comply with the Code, including any required information to complete Internal Revenue Service Form 8038-G with respect to the Series A, 2003 Bonds. (h) The Tenant will pay all required rebate amounts to the United States in accordance with Code Section 148(t) and the Arbitrage Instructions. (i) The Tenant hereby agrees to provide to the PBC all information of the Tenant necessary for compliance with the provisions of the SEC Rule, as more fully set forth in the Disclosure Instructions. The PBC, upon receipt of information from the Tenant, will disseminate said information in accordance with the SEC Rule and the Disclosure Instructions. Section 1.4. Representations and Covenants by PBC. PBC makes the following representations and covenants as the basis for the undertakings on its part herein contained. (a) PBC is a municipal corporation duly organized and existing under the laws of the State. Under the provisions of the Act, PBC has the power to enter into and perform the transactions contemplated by this Lease and the Bond Resolution and to carry out its obligations hereunder and thereunder. (b) PBC has not, in whole or in part, assigned, leased, hypothecated or otherwise created any other interest in, or disposed of, or caused or permitted any lien, claim or encumbrance to be placed against, the Project, except as is provided for in this Lease and the Bond Resolution. (c) PBC, during the Basic Term or any Additional Term, will not in whole or in part, assign, lease, hypothecate or otherwise create any other interest in, or dispose of, or cause or permit any lien, claim or encumbrance to be placed against, the Project, except as is provided for in this Lease and the Bond Resolution. (d) PBC has duly authorized the execution and delivery of this Lease and the Bond Resolution and the issuance, execution and delivery of the Bonds. (e) PBC will not make, or cause or permit to be made, any use of the Series A, 2003 Bond proceeds which would cause the Bonds to be "arbitrage bonds" within the meaning of the Code. PBC will comply with, and will take all actions reasonably required to insure that the Tenant complies with, all applicable requirements of the Code until all of the Series A, 2003 Bonds have been paid. (f) PBC will file (upon receipt from the City of all information necessary) a completed Internal Revenue Service Form 8038-G with respect to each series of tax-exempt Bonds. (g) The PBC will comply with all the limitations and requirements of the Code with respect to the tax-exempt Bonds. (h) Not more than 10% of the proceeds of the Series A, 2003 Bonds will be used directly or indirectly in the trade or business carried on by any person other than a Governmental Unit. PBC understands that use of facilities financed with Series A, 2003 Bond proceeds is treated as use of such proceeds. (i) Not more than 5% of the proceeds of the Series A, 2003 Bonds will be used (a) for any private business not related to a governmental use of such proceeds, or (b) used in an amount disproportionate to a related governmental use of such proceeds. 1340403156 \LEASE 6 ARTICLE II Section 2.1. Acquisition of Land; Granting of Leasehold. The PBC by these presents hereby represents that it has acquired, or will acquire the Land as described in Schedule I to this Lease (including exercise of power of eminent domain, if necessary) and hereby rents, leases and lets unto Tenant and Tenant hereby rents, leases and hires from PBC, for the rentals and upon and subject to the terms and conditions hereinafter set forth, the Land, as acquired, and the Project for the Basic Term. Section 2.2. Construction of Project. The PBC and Tenant mutually agree that as of the date of this Lease there exist no differences in each of their interpretations of the various agreements, including this Lease, relating to the PBC's duty to acquire the Land and construct the Improvements for the Tenant and the Tenant's duty to review and approve the Project Documents referred to in Section 6.4 hereof and to pay Rental Payments to the PBC required by this Lease. The Tenant agrees to cooperate fully with the PBC or any of those parties contracting with the PBC for the construction of the Project. Section 2.3. Termination of Lease. The Lease will terminate upon the occurrence of the following: (a) The Tenant shall have paid to the PBC all amounts which the Tenant is obligated under the terms of the Lease to pay during the Basic Term and any Additional Term and the Tenant shall have made arrangements which, in the opinion of the PBC, are adequate to comply with the PBC's obligations to make any rebates to the United States of America; or (b) The Tenant shall exercise its option to purchase in accordance with Article VIII hereof. ARTICLE Ill Section 3.1. Basic Rent. PBC reserves and the Tenant covenants and agrees to pay or cause to be paid to the PBC, during the Basic Term, for deposit in the Principal and Interest Payment Account on each Basic Rent Payment Date, Basic Rent in immediately available funds. In the event of an acceleration of Bond maturities under the Bond Resolution, the principal component of all Basic Rent, plus accrued interest thereon to the date of acceleration, shall be due and payable from the Tenant as of the date of acceleration. Section 3.2. Additional Rent. In addition to Basic Rent, the Tenant shall pay any Additional Rent required to be paid pursuant to this Lease, within fourteen (14) days after receipt of written notice thereof given to the Tenant by the Authorized PBC Representative. Section 3.3. Reserved. Section 3.4. Rental Payments Payable Without Abatement or Setoff. The Tenant covenants and agrees with and for the express benefit of the PBC and the Owners that all Rental Payments shall be made by the Tenant as the same become due, and that the Tenant shall perform all of its obligations, covenants and agreements hereunder without notice or demand and without abatement, deduction, setoff, counterclaim, recoupment or defense or any right of termination or cancellation arising from any circumstance whatsoever, whether now existing or hereafter arising and irrespective of whether the Project shall have been acquired, started or completed, or whether PBC's interest in the Project or any part thereof is defective or non-existent, and notwithstanding any failure of consideration or commercial frustration of purpose, the eviction or constructive eviction of Tenant, any Change of Circumstances, any change in the KMC\403156\LEASE 7 tax or other laws of the United States of America, the State, or any municipal corporation of either, any change in PBC's legal organization or status, or any default of PBC hereunder, and regardless of the invalidity of any action of PBC or any other event or condition whatsoever, and regardless of the invalidity of any portion of this Lease. Nothing in this Lease shall be construed as a waiver by Tenant of any rights or claims that the Tenant may have against PBC under this Lease or otherwise, but any recovery upon such rights and claims shall be had from PBC separately, it being the intent of this Lease that Tenant shall be unconditionally and absolutely obligated to perform fully all of their obligations, agreements and covenants under this Lease for the benefit of the Owners of the Bonds. Section 3.5. Rental Payments Constitute Current Expenses. PBC and the Tenant understand and intend that the obligation of the Tenant to make Rental Payments and other obligations under this Lease shall constitute a current expense of the Tenant. The obligations of the Tenant hereunder shall not in any way be construed to be a debt of the Tenant or any other municipal corporation or political subdivision in contravention of any applicable constitutional or statutory limitation or requirements concerning the creation of indebtedness by the Tenant, or any other municipal corporation or political subdivision. Section 3.6. Prepayment of Rental Payments. The Tenant may at any time prepay all or any part of the Rental Payments, which prepayment shall be accompanied by an explanatory written statement of Authorized Tenant Representative. Section 3.7. Deposit of Rental Payments by PBC. The PBC shall cause to be deposited, used and applied all Rental Payments in accordance with the provisions of this Lease and the Bond Resolution. ARTICLE IV Section 4.1. Disposition of Bond Proceeds. The proceeds from the sale of the Bonds shall be paid over to the PBC and applied pursuant to provisions of this Lease and the Bond Resolution. ARTICLE V Section 5.1. Construction of Project. The PBC shall cause the acquisition of the Land and the construction of the Improvements thereon in accordance with Section 5.2 hereof. Section 5.2. Project Contracts. The PBC, or the Tenant, as the PBC's agent for such purposes, has, or shall immediately cause to be prepared, as required, plans and specifications for the Project which shall be approved in writing by the Authorized Tenant Representative and the PBC, or the Tenant, as the PBC's agent for such purposes, has awarded, or shall award a contract for the construction of the Project, as required, which contract has or shall be approved in writing by the Authorized Tenant Representative. Section 53. Payment of Project Costs. (a) The PBC hereby agrees to pay for the costs of acquisition of the Land, if any, and construction of the Improvements thereon, but solely and only to the extent that there are funds in the Project Fund, and hereby authorizes and directs the payment of the same, but solely from the Project Fund. (b) The PBC agrees to cause the Project to be diligently and continuously prosecuted and to be completed with reasonable dispatch substantially in accordance with the Project Documents. (c) In the event the moneys on deposit in the Project Fund, together with other Tenant funds, if any, for the Project Costs relating to the Project, are at any time insufficient to pay for the completion of the KMC\403156\LEASE 8 Project, the Tenant agrees to pay the amount of such deficiency, from other lawfully available funds, forthwith for deposit in the Project Fund. (d) The PBC shall disburse moneys on deposit in the Project Fund from time to time to pay or as reimbursement for payment made for, Project Costs relating to the Project, after receipt of documentation prepared and processed in accordance with procedures established by the Bond Resolution for which payment is being requested. (e) In making such payments and determinations pursuant to this section, the PBC may rely upon such documentation and shall not be required to make any independent investigation in connection therewith. The PBC shall keep and maintain adequate records pertaining to the Project Fund and all disbursements therefrom, and shall make available statements of activity regarding the Project Fund to the PBC and the Tenant at the end of each Fiscal Year and within 90 days after the Completion Date of the Project. (f) The PBC shall require the Tenant to deliver within 90 days after the Completion Date of the Project a Certificate of Completion signed by the Authorized Tenant Representative stating that: (1) the Project has been fully completed substantially in accordance with the Project Documents, as then amended, as of such Completion Date; and (2) an investigation has been made of such sources of information as are deemed necessary, including pertinent records of the Tenant, and it is the opinion of the signatories thereto that the Project Costs relating to the Project have been fully paid. (g) If after receipt of the Certificate of Completion described in (f) above, there shall remain any moneys in the Project Fund, such moneys shall be deposited in accordance with the provisions of the Bond Resolution. Section 5.4. Project Documents. The PBC shall make available to the Tenant and the Tenant shall make available to the PBC the following documents relating to the Project (the "Project Documents"): (a) Plans and Specifications. All available preliminary, amended, and final plans and specifications for the Project. (b) Construction Contracts. All architect's and general contractor's contracts for the Project and all prime subcontractor's contracts and purchase orders deemed necessary by the PBC for any machinery and equipment included in the Project. (c) Surety Bonds. Labor, material and performance bonds as required by the PBC or Tenant and public works bonds as required by K.S.A. 60-1111. (d) Other Documents. Any other contracts payable from the Project Fund or payable as Additional Rent. The PBC or Tenant covenants and agrees to obtain and thereafter make available to the Tenant or PBC, as the case may be, all remaining construction or other contracts, purchase orders, approvals, licenses and permits required or necessary for the Project. KMCW03156\LEASE 9 Section 5.5. Changes or Amendments to Project Documents. The Tenant may make, authorize or permit such changes or amendments in the documents relating to the Project as they may reasonably determine to be necessary or desirable; provided, however, that no such change or amendment shall be made to the documents relating to the Project that would cause a material change in the cost, scope, nature, or function of the Project, unless the Tenant shall file with the PBC a certificate of the Authorized PBC Representative and the Authorized Tenant Representative, to the effect that the Project will, after such change or amendment, continue to comply with the Act, and such change or amendment will not result in the Project being used for any purpose prohibited by this Lease or otherwise result in the Tenant failing to comply with any provisions of this Lease, or materially adversely affect the Basic Rent available for payment of principal of, premium, if any, and interest on the Bonds, or violate or conflict with the terms of any applicable approvals of the Tenant Section 5.6. Enforcement of Contracts and Surety Bonds. In the event of a material default of any contractor or subcontractor under any contract made in connection with the Project, or in the event of a material breach of warranty with respect to any materials, workmanship or performance, the PBC or the Tenant at the request of the PBC will promptly proceed, either separately or in conjunction with others, to pursue diligently the remedies of the PBC against the contractor or subcontractor in default and against any surety on a bond securing the performance of such contract Any amounts recovered by way of damages, refunds, adjustments or otherwise in connection with the foregoing, after deduction of expenses incurred in such recovery and after reimbursement to the Tenant of any amounts theretofore paid by the Tenant and not previously reimbursed to the Tenant for correcting or remedying of the default which gave rise to the proceedings against the contractor, subcontractor or surety, shall be paid into Project Fund if received before the Completion Date, and otherwise shall be deposited in the Principal and Interest Account and applied as provided in the Bond Resolution. Section 5.7. Project Use. Tenant warrants that the Project will be necessary for use by Tenant for its governmental purposes. PBC and the Tenant each covenant and agree to proceed diligently to construct the Project. Upon completion of the Project in a form acceptable to the PBC and the Tenant, the Authorized PBC Representative and the Authorized Tenant Representative shall deliver a Certificate of Completion to the PBC, and the date of such delivery shall be the Completion Date. Section 5.8. Surplus in the Project Fund. Any amount remaining in the Project Fund after the Certificate of Completion has been delivered to the PBC, shall be transferred into the Principal and Interest Payment Account and used and applied for the purposes and at the times authorized by the Bond Resolution. Section 5.9. Right of Entry by PBC. The duly authorized agents of the PBC, including the Authorized PBC Representative and the Authorized Tenant Representatives shall have the right at any reasonable time to have access to the Project or any parts thereof for the purpose of inspecting and supervising the construction thereof. Section 5.10. Machinery and Equipment Purchased by Tenant. If no part of the purchase price of an item of machinery, equipment or personal property has been paid from funds or proceeds of the Bonds, then such item of machinery, equipment or personal property shall not be deemed a part of the Project. Section 5.11. Project Property of PBC. All improvements and work constituting a part of the Project, all work and materials on the Project as such work progresses, and the Project as fully completed, anything under this Lease which becomes, is deemed to be, or constitutes a part of the Project, and the Project as repaired, rebuilt, rearranged, restored or replaced by Tenant under the provisions of this Lease, except as otherwise specifically provided herein, shall immediately become the absolute property of PBC. KMCW03156\LEASE 10 ARTICLE VI Section 6.1. Insurance as a Condition to Disbursement. As a condition precedent to disbursement of funds from the Project Fund pursuant to Article V hereunder, the Tenant shall provide and covenants and agrees that it will obtain, or caused to be obtained and keep the Project constantly insured against loss or damage by fire, lightning and other casualty risks in an amount not less than the lesser of the replacement cost of the Project or the allocable principal amount of the Bonds then Outstanding. The Tenant shall also obtain liability insurance. The costs of such insurance shall be pair either from the Tenant's own funds, the Costs of Issuance Account or shall be charged to Tenant as Additional Rent. Section 6.2. General Insurance Provisions. (a) Not less than thirty (30) days prior to the expiration dates of any expiring policies, originals or certificates or acceptable binders of the policies provided for in this article, each bearing notations evidencing payment of the premiums or other evidence of such payment satisfactory to the PBC, shall be obtained by the PBC. All policies of such insurance and all renewals thereof shall name the PBC and the Tenant as insureds as their respective interests may appear, shall contain a provision that such insurance may not be cancelled or amended by the provider thereof without at least thirty (30) days written notice to the PBC and the Tenant and shall be jointly payable to the PBC and the Tenant, as their respective interests may appear. The PBC and the Tenant each hereby agree to do anything necessary, be it the endorsement of checks or otherwise, to cause any payment to be made to the PBC, as long as such payment is required by this Lease to be made to the PBC. (b) Each policy of insurance hereinabove referred to shall be issued by a nationally recognized responsible insurance company licensed to do business in the State of Kansas and is acceptable to the PBC and the Tenant. (c) The policies of insurance herein required during the course of constructing the Project may be provided by the contractor(s) in the form of builder's risk and liability policies. (d) The Tenant shall file evidence of all insurance required hereunder with the PBC. Section 6.3. Evidence of Title. The PBC shall obtain and furnish to Tenant a title insurance policy or policies indicating that fee simple title to the Land is vested in the PBC, and that such title is subject to no liens or encumbrances that would interfere with the Lease. A commitment for such title insurance shall be delivered as of the date of issuance of the Bonds. The Tenant shall furnish to the PBC an opinion of counsel to either Tenant that the exceptions set forth in such title insurance policy to not materially impair the use of the Project for the purpose for which it is intended. The costs of such title insurance policy or policies shall be paid from the Costs of Issuance Account. In satisfaction of the requirements in the preceeding paragraph, the PBC may, at its option, with the consent of the Tenant, furnish to the Tenant an opinion of counsel, who shall be an attorney or firm of attorneys regularly practicing in the State, and who may be counsel to the Tenant, that indefeasible fee simple title to the Land is vested in the PBC; that Tenant's Lease is a valid and subsisting lease of the Land, and that such title is subject to no liens or encumbrances (except easements and rights -of -way of record and other exceptions not affecting marketability or the usefulness of the property for Tenant's purposes as a city hall facility and swimming pool facility). Said opinion, if furnished, shall speak as of the date of issuance of the Bonds. ICMC\403156\LEASE 11 ARTICLE VII Section 7.1. Impositions. Tenant shall, during the life of this Lease bear, pay and discharge, before the delinquency thereof, any and all Impositions. In the event any Impositions may be lawfully paid in installments, Tenant shall be required to pay only such installments thereof as become due and payable during the life of this Lease as and when the same become due and payable. PBC covenants that without Tenant's written consent it will not, unless required by law, take any action which may reasonably be construed as tending to cause or induce the levying or assessment of any Imposition which Tenant would be required to pay under this article and that should any such levy or assessment be threatened or occur, PBC shall, at Tenant's request, fully cooperate with Tenant in all reasonable ways to prevent any such levy or assessment. Section 7.2. PBC May Not Sell. PBC covenants that, unless Tenant is in default under this Lease it will not, without Tenant's written consent, unless required by law, sell or otherwise part with or encumber its fee or other ownership interest in the Project at any time during the life of this Lease. Section 7.3. Contest of Impositions. Tenant shall have the right, in its own or PBC's name or both, to contest the validity or amount of any Imposition by appropriate legal proceeding; instituted at least ten (10) days before the Imposition complained of becomes delinquent if, and provided, the party initiating such proceeding (i) before instituting any such contest, shall give the other parties hereto written notice of its intention to do so and, if requested in writing by PBC, shall deposit with the PBC a surety bond of a surety company acceptable to PBC as surety, in favor of PBC, or cash, in a sum of at least the amount of the Imposition so contested, assuring the payment of such contested Imposition together with all interest and penalties to accrue thereon and estimated costs of suit, and (ii) shall diligently prosecute any such contest and at all times effectively stay or prevent any official or judicial sale therefor, under execution or otherwise, and (iii) promptly pays or otherwise satisfies any final judgment enforcing the Imposition so contested and thereafter promptly procures a recorded release or satisfaction thereof. The Tenant shall hold PBC whole and harmless from any costs and expenses PBC may incur related to any such contest. ARTICLE VIII Section 8.1. Use of Project. Subject to the provisions of this Lease, Tenant has the right to use the Project for any and all purposes allowed by law and contemplated by the Constitution of the. State, the Act and applicable provisions of the Code. Tenant shall comply with all statutes, laws, resolutions, orders, judgments, decrees, regulations, directions and requirements of, all federal, state, local and other governments or governmental authorities, now or hereafter applicable to the Project or to any adjoining public ways, as to the manner of use or the condition of the Project or of adjoining public ways. Tenant shall comply with the mandatory requirements, rules and regulations of all insurers under the policies required to be carried under the provisions of the Lease. Tenant shall pay all costs, expenses, claims, fines, penalties and damages that may in any manner arise out of, or be imposed as a result of, the failure of Tenant to comply with the provisions of this Lease. Section 8.2. Limitations on Use of Project. The Tenant must not use the Project, or allow or cause the Project to be used, for any commercial or private use or purpose except such use as may be incidental and directly related to the Tenant's governmental use hereunder. ARTICLE LX KMC\403156\LEASE 12 Section 9.1. Sublease by Tenant. The Tenant may sublease all or portions of the Project to Governmental Units. Tenant may sublease the Project to non -Governmental Units with the prior written consent of PBC, provided such sublease does not adversely affect any exclusion from gross income for federal income tax purposes of interest on any Bonds and that such sublessee shall not encumber or dispose of the Project and such sublessee is an agency or instrumentality of the State. In the event of any such subleasing, Tenant shall remain fully liable for the performance of their duties and obligations hereunder, and no such subleasing and no dealings or transactions between PBC and any such subtenant shall relieve Tenant of any of the duties and obligations hereunder. Any such sublease shall be subject and subordinate in all respects to the provisions of this Lease. Section 9.2. Assignment by Tenant. Tenant may assign its interest in this Lease in accordance with or in furtherance of the purposes set forth in the Act and insofar as permitted by law, with the prior written consent of PBC, provided such assignment does not adversely affect the tax-exempt status of any Bonds, that such assignee shall not encumber or dispose of the Project, and such assignment and assignee are permissible under the Act. In the event of any such assignment, Tenant shall remain fully liable for the performance of its duties and obligations hereunder, except to the extent hereinafter provided, and no such assignment and no dealings or transactions between PBC and any such assignee shall relieve the Tenant of any of the duties and obligations hereunder, except as may be otherwise provided in the following section. Section 9.3. Release of Tenant. If, in connection with an assignment by Tenant of their interests in this Lease, (1) the Owners of a majority of the aggregate principal amount of the Outstanding Bonds shall file with the PBC and the Original Purchaser their prior written consent to such assignment, and (2) the proposed assignee shall expressly assume and agree to perform all of the obligations of Tenant under this Lease; then and in such event Tenant shall be fully released from all obligations accruing hereunder after the date of such assignment. Section 9.4. Covenant Against Other Assignments. The Tenant will not assign or in any manner transfer its interests under this Lease, nor will it suffer or permit any assignment thereof by operation of law, except in accordance with the limitations, conditions and requirements herein set forth. ARTICLE X Section 10.1. Repairs and Maintenance. The Tenant covenants and agrees that it will, during the Term of this Lease, keep and maintain the Project and all parts thereof in good condition and repair, including but not limited to the furnishing of all parts, mechanisms and devices required to keep the machinery, equipment and personal property constituting a part of the Project in good mechanical and working order, and that during said period of time it will keep the Project and all parts thereof free from filth, nuisance or conditions unreasonably increasing the danger of fire. Section 10.2. Operation of Project. The Tenant covenants and agrees that it will, during the term of this Lease, provide for the efficient operation of the Project as soon as the Project is complete and ready for occupancy. ARTICLE XI Section 11.1. Alteration of Project. Tenant shall have and are hereby given the right, at their sole cost and expense, to make such additions, changes and alterations in and to any part of the Project as Tenant from time to time may deem necessary or advisable; provided, however, Tenant shall not make any major addition, change or alteration which will adversely affect the intended use or structural strength of any part of the Project. All additions, changes and alterations made by Tenant pursuant to the authority of this article KMC\403156\LEASE 13 shall (a) be made in a workmanlike manner and in strict compliance with all laws and regulations applicable thereto, (b) when commenced, be prosecuted to completion with due diligence, and, (c) when completed, shall be deemed a part of the Project; provided, however, that additions of machinery, equipment and/or personal property of Tenant, not purchased or acquired from funds deposited with the PBC hereunder shall remain the separate property of the Tenant and may be removed by such Tenant prior to expiration of the Basic Term and any Additional Term of this Lease, provided such removal can be accomplished without material damage to the Project; provided further, however, that all such additional machinery, equipment and/or personal property which remains in the Project after the termination of this Lease for any cause other than the purchase of the Project pursuant to Article XVIII hereof, shall, upon and in the event of such termination, become the separate and absolute property of PBC. ARTICLE XII Section 12.1. Additional Improvements. Tenant shall have and is hereby given the right, at their sole cost and expense, to construct within areas occupied by the Land, or in airspace above the Land, such additional buildings and improvements as Tenant from time to time may deem necessary or advisable. All such buildings and improvements constructed by Tenant pursuant to the authority of this article shall, during the Basic Term and any Additional Term, remain the property of Tenant and may be added to, altered or razed and removed by Tenant at any time during the Term hereof. Tenant covenants and agrees (a) to make all repairs and restorations, if any, required to be made to the Project because of the construction of, addition to, alteration or removal of, said additional improvements, (b) to keep and maintain said additional improvements in good condition and repair, ordinary wear and tear excepted, (c) to promptly and with due diligence either raze and remove from the Land in a good, workmanlike manner, or repair, replace or restore such of said additional improvements as may from time to time be damaged by fire or other casualty, and (d) that all additional improvements constructed by Tenant pursuant to this article which remain in place after termination of this Lease for any cause other than the purchase of the Project pursuant to Article XVIII hereof shall, upon and in the event of such termination, become the separate and absolute property of the PBC. ARTICLE XIII Section 13.1. Securing of Permits and Authorizations. Tenant shall not do or permit others under their control to do any work in or in connection with the Project or related to any repair, rebuilding, restoration, replacement, alteration of or addition to the Project, or any part thereof, unless all applicable governmental permits and authorizations shall have first been procured and paid for. All such work shall be done in a good and workmanlike manner and in compliance with all applicable building, zoning and other laws, resolutions, governmental regulations and requirements. Section 13.2. Mechanics' Liens. Pursuant to-K.S.A. 12-151, no part of Tenant's interest in the Project may be encumbered by any mechanics' or other similar lien. Notice is hereby given that PBC does not authorize or consent to and shall not be liable for any labor or materials furnished to Tenant or anyone claiming by, through or under Tenant upon credit, by contract or otherwise, and that neither a demand or claim nor mechanics, or similar lien for any such labor, services or materials shall attach to or affect the reversionary or other estate of PBC in and to the Project, this Lease or any part thereof. Section 13.3. Contest of Liens. The Tenant, notwithstanding the above, shall have the right to contest any such mechanics', or other similar lien if within a thirty (30) day period it (i) notifies the PBC in writing of its intention so to do, and if requested by the PBC, deposits with the PBC a surety bond issued by a surety company acceptable to the PBC as surety, in favor of the PBC or cash, in the amount of the lien KMC\403156\LEASE 14 claim so contested, indemnifying and protecting the PBC from and against any liability, loss, damage, cost and expense of whatever kind or nature growing out of or in any way connected with said asserted lien and the contest thereof, and (ii) diligently pursues such contest, at all times effectively staying or preventing any official or judicial sale of the Project or any part thereof or interest therein, under execution or otherwise, and (iii) promptly pays or otherwise satisfies any final judgment adjudging or enforcing such contested lien claim and thereafter promptly procures a recorded release or satisfaction thereof. Section 13.4. Utilities. All utilities and utility services used by the Tenant in, on or about the Project shall be contracted for by the Tenant in the Tenant's own name; and the City shall, at its sole cost and expense, procure any and all permits, licenses or authorizations necessary in connection therewith. ARTICLE XIV Section 14.1. Indemnity. Subject to the provisions of K.S.A. 75-6101 et seq., and other applicable law, the Tenant covenants and agrees, at its expense, to pay, and to indemnify and save the PBC and all agents, members, directors, officers and employees thereof harmless against and from any and all claims by or on behalf of any person, firm, corporation, or governmental authority, arising from the acquisition, construction, equipping, occupation, use, operation, maintenance, possession, conduct or management of, or from any work done in or about the Project, or from the subletting of any part thereof, including any liability for violation of conditions, agreements, restrictions, laws, ordinances, or regulations affecting the Project or the occupancy or use thereof. Subject to the provisions of K.S.A. 75-6101 et seq. and other applicable law, the Tenant also covenants and agrees, at its expense, to pay and to indemnify and save the PBC and all agents, members, directors, officers and employees thereof harmless against and from, any and all claims arising from (i) any condition of the Project and the adjoining sidewalks and passageways, (ii) any breach or default on the part of such Tenant in the performance of any covenant or agreement to be performed by such Tenant pursuant to this Lease, (iii) any act or negligence of the Tenant or, any of its agents, contractors, servants, employees or licensees in connection with their use, occupancy or operation of the Project, or (iv) any accident, injury or damage whatsoever caused to any person, firm or corporation, in or about the Project or upon or under the sidewalks and from and against all costs, reasonable counsel fees, expenses and liabilities incurred in any action or proceeding brought by reason of any claim referred to in this section. In the event that any action or proceeding is brought against the PBC or any agent, member, director, officer or employee thereof by reason of any such claim, the Tenant, upon notice from the PBC, covenants to resist or defend such action or proceeding by counsel reasonably satisfactory to the PBC. Notwithstanding the fact that it is the intention of the parties that the PBC and all agents, members, directors, officers and employees thereof shall not incur any pecuniary liability whatsoever by reason of the terms of this Lease, or the undertakings required of the PBC hereunder or any agent, member, director, officer or employee thereof, by reason of the issuance of Bonds, by reason of the execution or authorization of any documents or certification in connection with the Bonds including, but not limited to, the Bond Resolution, this Lease, or any preliminary or final official statement, by reason of the performance, or nonperformance, of any act required of it by this Lease or the Bond Resolution, or by reason of the performance, or nonperformance, of any act requested of it by Tenant, including all claims, liabilities or losses arising in connection with the violation of any statutes or regulations pertaining to the foregoing; nevertheless, if the PBC or any agent, member, employee, officer or director thereof should incur any such pecuniary liability then in such event the Tenant, subject to the provisions of K.S.A. 75-6101 et seq. and other applicable law, shall indemnify and hold harmless the PBC and all agents, members, directors, officers and employees thereof, against all claims, fees, including attorney fees, and expenses by or on behalf of any person, firm, corporation, or governmental authority, arising out of the same, and all costs, fees and expenses incurred in connection with any such claim or in connection with any action or proceeding brought thereon, and upon notice from the PBC, the Tenant shall defend and hold harmless the PBC in any such ICMC\403156\LEASE 15 action or proceeding. This section shall survive the termination of this Lease for any claim, proceeding or action arising from any event or omission occurring during the Lease Term or any Additional Term and after the termination, due to an Event of Default, for any period the Tenant, sublessee or assignee occupies the Project. In the event that all or any Series of the Bonds are held by a single Registered Owner, other than CEDE & Co., the rights granted to the PBC in this section shall also be granted to the single Registered Owner. Section 14.2. Liability. Subject to Article IV hereof, the provisions of K.S.A. 75-6101 et seq. and other applicable law, Tenant hereby accept all responsibility relating to the operation, construction, maintenance and repair of the Project during the Lease Term and agree that the PBC shall not have any liability therefor. ARTICLE XV Section 15.1. Access to Project. PBC, for itself and its duly authorized representatives and agents, reserves the right to enter the Project at all reasonable times during usual business hours throughout the Basic Term and the Additional Term for the purpose of (a) examining and inspecting the same, (b) performing such work made necessary by reason of Tenant's default under any of the provisions of this Lease, and (c) while an Event of Default is continuing hereunder, for the purpose of exhibiting the Project to prospective purchasers, lessees or mortgagees. PBC may, subject to Tenant's prior written approval, which approval shall not be unreasonably withheld, and supervision, during the progress of said work mentioned in (b) above, keep and store on the Project all necessary materials, supplies and equipment, and PBC shall not cause any unnecessary inconvenience, annoyances, disturbances, loss of business or other damages to Tenant by reason of the performance of any such work or the storage of such materials, supplies and equipment. ARTICLE XVI Section 16.1. Environmental Covenants. The Tenant acknowledges that it is responsible for maintaining the Project in compliance with applicable Environmental Laws. In the event that the Tenant does not expeditiously proceed with any compliance required by any local, state or federal authority under any applicable Environmental Law, the PBC, immediately after notice to the Tenant, may elect to undertake such compliance. Any moneys expended by the PBC in efforts to comply with any applicable Environmental Law (including, without limitation, the cost of hiring consultants, undertaking sampling and testing, performing any cleanup necessary or useful in the compliance process and attorneys' fees) shall be due and payable as Additional Rent under the Lease, subject to the availability of appropriated funds, with interest thereon at the average rate of interest per annum on the Bonds from the date such cost is incurred. Subject to Article IV hereof, the Tenant has agreed to indemnify the PBC and the Owners and defend and hold them harmless from and against all loss, cost, damage and expense including, without limitation, attorneys fees and costs associated with or incurred in the investigation, defense and settlement of claims that they may incur, directly or indirectly, as a result of or in connection with the assertion against them of, or any claim relating to, the presence, escape or removal of any Hazardous Substance or other material regulated by any applicable environmental law, or compliance with any applicable environmental law, whether before, during or after the term of the Lease, including claims relating to personal injury or damage to property. KMC\403156\LEASE 16 ARTICLE XVll Section 17.1. Automatic Option to Extend Term. If an Event of Default has occurred and is continuing and occurred and the Bond Resolution is not discharged and defeased in accordance with the provisions thereof, the Basic Term of this Lease shall automatically be extended for an Additional Term of five (5) years or until such time as the Bond Resolution is discharged and defeased. Notice of such extension shall be given in writing by the PBC to the Tenant. ARTICLE XVIII Section 18.1. Option to Purchase Project. Subject to the provisions of this article, Tenant shall have the right and option to purchase (a) the Project, as a whole, or (b) the separate City Hall Improvements and associated Land (the "City Hall Land"), or (c) the separate Swimming Pool Improvements and associated Land (the "Swimming Pool Land"), at any time during the Basic Term and any Additional Term hereof. Tenant shall exercise aforesaid option by giving PBC and Bond Insurer written notice of Tenant's election to exercise such option and specifying the date, time and place of closing, which date (the "Closing Date") shall neither be earlier than thirty (30) days nor later than one hundred eighty (180) days after the notice is given. Tenant may not, however, exercise said option if Tenant is in default hereunder on such Closing Date. Section 18.2. Quality of Title and Purchase Price. If said notice of election to purchase be given as aforesaid, PBC shall and covenants and agrees to, sell and convey its interests in and to the Project to Tenant on the Closing Date free and clear of all liens and encumbrances whatsoever except (a) those to which the title became subject to with Tenant's written consent, or which resulted from any failure of Tenant to perform any of its covenants or obligations under this Lease, (b) taxes and assessments, general and special, if any, and (c) the rights, titles and interests of any party having condemned or who is attempting to condemn title to, or the use for a limited period of, all or any part of the Project, for the price and sum as follows (which Tenant shall and covenant and agree to pay in cash at the time of delivery of PBC's deed or other instrument or instruments of transfer of the Project to Tenant as hereinafter provided): (i) The full amount which is required to provide PBC funds which are sufficient, in accordance with the provisions of the Bond Resolution and this Lease, to pay amounts necessary to provide for payment of the (A) Bonds, if the Project, as a whole, is to be purchased, (B) Series A, 2003 Bonds, if only the City Hall Improvements and City Hall Land (jointly, the "City Hall Project") are to be purchased, or (C) Series B, 2003 Bonds, if only the Swimming Pool Improvements and Swimming Pool Land (jointly, the "Swimming Pool Project") are to be purchased, all in accordance with Article VI of the Bond Resolution; amounts required as payment of Additional Rent; and all costs, expenses and premiums incident to the payment of said Bonds or series thereof in full, plus (ii) $100.00 and reasonable costs of closing. Nothing in this article shall release or discharge the Tenant from its duty or obligation under this Lease to make any payment of Basic Rent or Additional Rent which, in accordance with the terms of this Lease, becomes due and payable prior to the Closing Date, or its duty and obligation to fully perform and observe all covenants and conditions herein stated to be performed and observed by Tenant prior to the Closing Date. Section 18.3. Closing of Purchase. On the Closing Date, PBC shall deliver to Tenant its appropriate instrument or instruments of conveyance or assignment, properly executed and conveying, as KMC\403156\LEASE 17 may be applicable, the Project, the City Hall Project or the Swimming Pool Project, to Tenant free and clear of all liens and encumbrances whatsoever except as set forth in Section 18.2 hereof, or conveying such other title to the Project, the City Hall Project or the Swimming Pool Project as may be acceptable to Tenant, and then and there Tenant shall pay the full purchase price for the Project, the City Hall Project or the Swimming Pool Project, as follows: (a) the amount specified in clause (i) of Section 18.2 shall be paid and deposited in the Principal and Interest Payment Account to pay or redeem, as may be applicable, the Bonds, the Series A, 2003 Bonds or the Series B, 2003 Bonds and the interest thereon as provided in the Bond Resolution, and (b) the amount specified in clause (ii) of said Section 18.2 shall be paid to PBC; provided, however, nothing herein shall require PBC to deliver its appropriate instrument or instruments of assignment or conveyance to Tenant until and after all applicable duties and obligations of Tenant under this Lease to the date of such delivery have been fully performed and satisfied. Upon the delivery to Tenant of PBC's appropriate instrument or instruments of assignment or conveyance and payment of the purchase price by Tenant, this Lease shall, ipso facto, terminate (x) with respect to the Project, if the Project as a whole is purchased, (y) partially, with respect to the City Hall Project, if only the City Hall Project is purchased or (z) partially, with respect to the Swimming Pool Project, if only the Swimming Pool Project is purchased. Section 18.4. Effect of Failure to Complete Purchase. If, for any reason whatsoever, the purchase of the Project, the City Hall Project or the Swimming Pool Project, as applicable, by Tenant pursuant to valid notice of election to purchase given as aforesaid is not effected on the Closing Date, this Lease shall be and remain in full force and effect according to its terms the same as though no notice of election to purchase had been given. Section 18.5. Application of Condemnation Awards if Tenant Purchases Project. The right of Tenant to exercise the option to purchase the Project under the provisions of this article shall remain unimpaired notwithstanding any condemnation of title to, or the use for a limited period of, all or any part of the Project. If Tenant shall exercise said option and pay the purchase price as provided in this article, all of the condemnation awards received by PBC after the payment of said purchase price, less all attorneys' fees and other expenses and costs incurred by PBC in connection with such condemnation, shall belong to and be paid to the Tenant. ARTICLE XIX Section 19.1. Damage and Destruction. (a) If, during the Basic Term, or any Additional Term, the Project is damaged or destroyed, in whole or in part, by fire or other casualty, the Tenant shall promptly notify the PBC in writing as to the nature and extent of such damage or loss and whether it is practicable and desirable to rebuild, repair, restore or replace the Project. (b) If the Tenant shall determine that such rebuilding, repairing, restoring or replacing is practicable and desirable, the Tenant shall forthwith proceed with and complete with reasonable dispatch such rebuilding, repairing, restoring or replacing. In such case, the Net Proceeds, if any, of any applicable casualty insurance received with respect to any such damage or loss to the Project shall be paid to the PBC and deposited in the Project Fund and shall be used and applied for the purpose of paying the cost of such rebuilding, repairing, restoring or replacing. Any amount remaining in the Project Fund, with respect to such damage or loss, after such rebuilding, repairing, restoring or replacing shall be deposited into the Principal and Interest Payment Account. (c) If the Tenant shall determine that rebuilding, repairing, restoring or replacing the Project is not practicable and desirable, and upon obtaining the written consent of the PBC, the Net Proceeds, if any, KMC\403156\LEASE 18 of any applicable casualty insurance received with respect to any such damage or loss to the Project shall be paid to the PBC and deposited in the Principal and Interest Payment Account in accordance with Section [4041 of the Bond Resolution. The Tenant agrees that it shall be reasonable in exercising its judgment pursuant to this subsection (c). (d) The Tenant shall not, by reason of its inability to use all or any part of the Project during any period in which the Project is damaged or destroyed, or is being repaired, rebuilt, restored or replaced nor by reason of the payment of the costs of such rebuilding, repairing, restoring or replacing, fail to comply with the provisions of this Lease. Section 19.2. Condemnation. (a) If, during the Basic Term, or any Additional Term, title to, or the temporary use of, all or any part of the Project shall be condemned by an authority exercising the power of eminent domain, the Tenant shall, within 90 days after the date of entry of a final order in any eminent domain proceedings granting condemnation, notify the PBC in writing as to the nature and extent of such condemnation and whether it is practicable and desirable to acquire or construct substitute improvements. (b) If the Tenant shall determine that such substitution is practicable and desirable, the Tenant shall forthwith proceed with and complete with reasonable dispatch the acquisition or construction of such substitute improvements. In such case, any Net Proceeds received from any award or awards with respect to the Project or any part thereof made in such condemnation or eminent domain proceedings shall be paid to the PBC and shall be deposited in the Project Fund and shall be used and applied for the purpose of paying the cost of such substitution. Any amount remaining in the Project Fund, with respect to such condemnation or eminent domain proceedings, after such acquisition or construction shall be deposited into the Principal and Interest Payment Account. (c) If the Tenant shall determine that it is not practicable and desirable to acquire or construct substitute improvements, and upon obtaining the written consent of the PBC, any Net Proceeds of condemnation awards received by the Tenant shall be paid to the PBC and deposited in the Principal and Interest Payment Account in accordance with Section [4041 of the Bond Resolution. The Tenant agrees that it shall be reasonable in exercising its judgment pursuant to this subsection (c). (d) The Tenant shall not, by reason of their inability to use all or any part of the Project during any such period of acquisition or construction of substitute land and improvements nor by reason of the payment of the costs of such acquisition or construction of substitute land and improvements fail to comply with the provisions of this Lease. (e) The PBC shall cooperate fully with the Tenant in the handling and conduct of any prospective or pending condemnation proceedings with respect to the Project or any part thereof. In no event will the PBC voluntarily settle or consent to the settlement of any prospective or pending condemnation proceedings with respect to the Project or any part thereof without the written consent of the Tenant. ARTICLE XX Section 20.1. Notice of Default. If an Event of Default shall have occurred and be continuing, the PBC shall promptly notify the Owners of such default. KMCW03156\LEASE 19 • Section 20.2. Remedies on Default. Whenever any Event of Default shall have happened and be continuing, the PBC may take any one or more of the following remedial actions: (a) By written notice to the Tenant upon acceleration of maturity of the Bonds as provided in the Bond Resolution, the Issuer may declare the aggregate amount of all unpaid Basic Rent or Additional Rent then or thereafter required to be paid under this Lease by the Tenant to be immediately due and payable as liquidated damages from the Tenant, whereupon the same shall become immediately due and payable by the Tenant. (b) Give Tenant written notice of intention to terminate this Lease on a date specified therein, which date shall not be earlier than ten (10) days after such notice is given and, if all defaults have not then been cured on the date so specified, Tenant's rights to possession of the Project shall cease, and this Lease shall thereupon be terminated, and the PBC may re-enter and take possession of the Project, as of the PBC's former estate; or (c) Without terminating the term hereof, re-enter the Project or take possession thereof, where practical to do so, pursuant to legal proceedings or pursuant to any notice provided for by law, and having elected to re-enter or take possession of the Project without terminating the term of this Lease, PBC, if it deems it practical and economical, shall use reasonable diligence to relet the Project, or parts thereof, for such term or terms and at such rental and upon such other terms and conditions as PBC may deem advisable, with the right to make alterations and repairs to the Project, and no such re-entry or taking of possession of the Project by PBC shall be construed as an election on PBC's part to terminate this Lease and no such re-entry or taking of possession by PBC shall relieve Tenant of its obligation to pay Rental Payments, at the time or times provided herein, or of any of its other obligations under this Lease, all of which shall survive such re-entry or taking of possession, and Tenant shall continue to pay the Rental Payments provided for in this Lease until the end of the Term, whether or not the Project shall have been relet, less the net proceeds, if any, of any reletting of the Project after deducting all of PBC's expenses incurred in connection with such reletting, including, without limitation, all repossession costs, brokerage commissions, legal expenses, expenses of employees, alteration costs and expenses of preparation of the Project for reletting. Net proceeds of any reletting shall be deposited in the Principal and Interest Payment Account. Having elected to re-enter or take possession of the Project pursuant to subsection (c) hereunder, PBC may (subject, however, to any restrictions against termination of this Lease in the Bond Resolution), by notice to Tenant given at any time thereafter while Tenant is in default in the payment of any Rental Payments or in the performance of any other obligation under this Lease, elect to terminate this Lease in accordance with subsection (b) hereunder. If, in accordance with any of the foregoing provisions of this article, PBC shall have the right to elect to re-enter and take possession of the Project, PBC may enter and Tenant shall deliver to the PBC the Project or cause such delivery of the Project to be made to the PBC and thereafter the PBC may remove the property and effects of both or either without being guilty or in any manner of trespass and without prejudice to any remedies for arrears of any Rental Payments or preceding breach of covenant. (d) PBC shall pursue and exercise any available remedy at law or in equity by suit, action, mandamus or other proceeding, or exercise such one or more of the rights and powers conferred by this article as the PBC may require, being advised by counsel, shall deem most expedient in the interests of the Owners of the Bonds, including sale of the Project after termination as provided in subsection (a) hereof. All rights of action under this Lease or under any of the Bonds may be enforced by the PBC without the possession of any of the Bonds or the production thereof in any trial or other proceedings relating thereto, and any such suit or proceeding instituted by the PBC shall be brought in its name as PBC without KMC\403156\LEASE 20 necessity of joining as plaintiffs or defendants any Owners of the Bonds, and any recovery of judgment shall be for the equal benefit of all the Owners of the Outstanding Bonds. If the acceleration described in subsection (a) above is rescinded as provided in the Resolution, any declaration regarding all unpaid Rental Payments provided in subsection (a) above shall also be rescinded. The Issuer shall notify the Owners of Bonds and Bond Insurer of any Event of Default under the Lease of which it has actual notice. Section 203. Control of Remedies By Bond Insurer Upon an Event of Default and Event of Insolvency. .Error! Bookmark not defined Upon the occurrence and continuance of an Event of Default under the Lease, the Bond Insurer shall be entitled to control and direct the enforcement of all rights and remedies granted to the PBC under this Lease. Any reorganization or liquidation plan with respect to the Tenant must be acceptable to the Bond Insurer. In the event of any reorganization or liquidation, the Bond Insurer shall have the right to vote on behalf of the PBC and all Owners who hold the Bonds insured by the Bond Insurer absent a default by the Bond Insurer under the applicable Bond Insurance Policy insuring the Bonds. Section 20.4. Survival of Obligations. Subject to applicable law, the Tenant covenants and agrees with PBC and the Owners that until the Tenant's payment in full of its Rental Payments due by such Tenant throughout the entire term of this Lease are paid in full or provision made for the payment thereof in accordance with this Lease and the Bond Resolution, its obligations under this Lease shall survive the cancellation and termination of this Lease, for any cause, and that Tenant shall, subject to applicable law, continue to pay Rental Payments and perform all other obligations provided for in this Lease, all at the time or times provided in this Lease. Section 20.5. No Remedy Exclusive. No remedy herein conferred upon or reserved to the PBC is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Lease or now or hereafter existing at law or in equity or by statute, subject to the provisions of the Bond Resolution. No delay or omission to exercise any right or power accruing upon any Event of Default shall impair any such right or power, or shall be construed to be a waiver thereof, but any such right or power may be exercised from time to time as often as may be deemed expedient. In order to entitle the PBC to exercise any remedy reserved to it in this article, it shall not be necessary to give any notice, other than notice required herein. ARTICLE XXI Section 21.1. Performance of Tenant's Obligations by PBC. If Tenant fails to keep or perform any of its obligations as provided in this Lease, then PBC may upon the continuance of such failure on Tenant's part for thirty (30) days after notice of such failure is given to Tenant by PBC and without waiving or releasing Tenant from any obligation hereunder, as an additional but not exclusive remedy, make any such payment or perform any such obligation, and Tenant shall reimburse PBC for all sums so paid by PBC and all necessary or incidental costs and expenses incurred by PBC in performing such obligations through payment of Additional Rent. If such Additional Rent is not so paid by Tenant within ten (10) days of demand, PBC shall have the same rights and remedies provided for in Article XX in the case of default by Tenant in the payment of Basic Rent. KMC\403156\LEASE 21 • ARTICLE XXII Section 22.1. Failure to Comply with Continuing Disclosure Requirements. In the event the Tenant fails to comply in a timely manner with its covenants contained in Section 1.3(a)(i) hereof, the PBC shall provide written notice to the Tenant of such noncompliance. In the event that the Tenant does not remedy such noncompliance within 10 days of distribution of such notice, the PBC may in its discretion, without notice or demand, proceed to protect and enforce compliance by a suit or suits in equity or at law for the specific performance of such covenant or agreement contained in Section 1.3(a)(i) of this Lease or for the enforcement of any other appropriate legal or equitable remedy, as the PBC shall deem effectual to protect and enforce any of the duties of the Tenant under such Section 1.3(a)(i). ARTICLE XXIII Section 23.1. Surrender of Possession. Upon accrual of PBC's right of re-entry as the result of Tenant's default hereunder or upon the cancellation or termination of this Lease by lapse of time or otherwise, Tenant shall peacefully surrender possession of the Project to PBC in good condition and repair, ordinary wear and tear excepted; provided, however, Tenant shall have the right, prior to or within sixty (60) days after the termination of this Lease, to remove from or about the Project the buildings, improvements, machinery, equipment, personal property, furniture and fixtures which Tenant own under the provisions of this Lease and not constituting a part of the Project. All repairs to and restorations of the Project required to be made because of such removal shall be made, by and at the sole cost and expense of Tenant. All buildings, improvements, machinery, equipment, personal property, furniture and fixtures owned by Tenant and which are not so removed from or about the Project prior to or within sixty (60) days after the termination of this Lease shall become the separate and absolute property of the PBC. ARTICLE XXIV Section 24.1. Notices. Any notice, request, complaint, demand or other communication required or desired to be given or filed under this Lease shall be in writing and shall be deemed duly given or filed if the same shall be: (a) duly mailed by registered or certified mail, postage prepaid; or (b) communicated via fax, with electronic or telephonic confirmation of receipt; given to the Notice Representative at the Notice Address. The PBC and the Tenant may from time to time designate, by notice given hereunder to the others of such parties, such other address to which subsequent notices, certificates or other communications shall be sent. All notices given by: (a) certified or registered mail as aforesaid shall be deemed duly given as of the date they are so mailed; (b) fax as aforesaid shall be deemed duly given as of the date of confirmation of receipt. If, because of the temporary or permanent suspension of regular mail service or for any other reason, it is impossible or impractical to mail any notice in the manner herein provided, then such other form of notice as shall be made with the approval of the other party shall constitute a sufficient notice. ARTICLE XXV Section 25.1. Net Lease. The parties hereto agree (a) that this Lease is intended to be a net lease, (b) that Tenant shall be responsible for all operational and maintenance costs of the Project, and (c) that the Rental Payments to be made by Tenant throughout the entire term of this Lease are designed to provide PBC with funds adequate in amount to pay all of PBC's obligations under the Bonds and the Bond Resolution and discharge all of the other duties and requirements set forth herein. KMC\403156\LEASE 22 such amendment, change or modification, by an agreement in writing executed by the PBC and Tenant and consented to in writing by the Owners of one hundred percent (100%) of the aggregate principal amount of the Bonds then Outstanding; and (c) With respect to all other amendments, changes, or modifications, including those for the purpose of issuing Additional Bonds as permitted by the Bond Resolution, by an agreement in writing executed by PBC and Tenant. Notwithstanding the foregoing paragraphs, or any other provision of this Lease, the description of the Land set forth on Schedule I hereto may be amended and modified by written instrument by Tenant without the consent of the PBC, any Owners of Bonds or the Bond Insurer, if the following conditions are met: (x) The Swimming Pool Land, described in sub -section (a)(ii) of the Property Subject to Lease set forth on Schedule I hereto, following such amendment or modification, shall not contain less than acres of real property and all of such property shall be within the tract of property described in Schedule I -A hereto; or (y) The City Hall Project is purchased and the Lease is terminated with respect to said City Hall Project, all pursuant to Section 18.2 hereof, and the City Hall Project is therefore removed from the Property Subject to Lease set forth on Schedule I hereto; or (z) The Swimming Pool Project is purchased and the Lease is terminated with respect to said Swimming Pool Project, all pursuant to Section 18.2 hereof, and the Swimming Pool Project is therefore removed from the Property Subject to Lease set forth on Schedule I hereto. At least thirty (30) days prior to the execution of any agreement pursuant to this article, the PBC and Tenant shall furnish the Original Purchaser of the Bonds with a copy of the amendment, change or modification proposed to be made. Section 28.2. Granting of Easements. If no Event of Default under this Lease shall have happened and be continuing, Tenant may, at any time and from time to time (a) grant easements, licenses and other rights or privileges in the nature of easements with respect to any property included in the Project, free from any rights of PBC or the Owners, or (b) release existing easements, licenses, rights -of -way and other rights or privileges, all with or without consideration and upon such terms and conditions as Tenant shall determine, and PBC agrees, to the extent that it may legally do so, that it will execute and deliver any instrument necessary or appropriate to confirm and grant or, release any such easement, license, right-of- way or other right or privilege or any such agreement or other arrangement, upon receipt by PBC of: (i) a copy of the instrument of grant or release or of the agreement or other arrangement, (ii) a written application signed by the Authorized Tenant Representative requesting such instrument and (iii) a certificate executed by Tenant stating (aa) that such grant or release is not detrimental to the proper conduct of the business of Tenant, and (bb) that such grant or release will not impair the effective use or interfere with the efficient and economical operation of the Project and will not materially adversely affect the security of the Owners. If the instrument of grant shall so provide, any such easement or right and the rights of such other parties thereunder shall be superior to the rights of PBC and the Owners and shall not be affected by any termination of this Lease or default on the part of Tenant hereunder. If no Event of Default shall have happened and be continuing, any payments or other consideration received by Tenant for any such grant or with respect to or under any such agreement or other arrangement shall be and remain the property of Tenant, but, in the event of the termination of this Lease or default of Tenant, all rights then existing of Tenant with respect to or under such grant shall inure to the benefit of and be exercisable by PBC. KMC\403156\LEASE 24 Section 28.3. Security Interests. PBC and Tenant agree to execute and deliver all instruments, including financing statements and statements of continuation thereof, necessary for perfection of and continuance of the security interest of PBC in and to the Project. The PBC shall file or cause to be filed all such instruments required to be so filed and shall continue or cause to be continued the liens of such instruments for so long as the Bonds shall be Outstanding. Section 28.4. Construction and Enforcement. This Lease shall be construed and enforced in accordance with the laws of the State of Kansas. Wherever in this Lease it is provided that either party shall or will make any payment or perform or refrain from performing any act or obligation, each such provision shall, even though not so expressed, be construed as an express covenant to make such payment or to perform, or not to perform, as the case may be, such act or obligation. Section 28.5. Severability. If any provision of this Lease shall be held or deemed to be invalid, inoperative or unenforceable as applied in any particular case in any jurisdiction or jurisdictions or in all jurisdictions, or in all cases because it conflicts with any other provision or provisions hereof or any constitution or statute or rule of public policy, or for any other reason, such circumstances shall not have the effect of rendering the provision in question inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or provisions herein contained invalid, inoperative or unenforceable to any extent whatever. Section 28.6. Covenants Binding on Successors and Assigns. The covenants, agreements and conditions herein contained shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Section 29.7. Execution of Counterparts. This Lease may be simultaneously executed in several counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument. [BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] KMC\403156\LEASE 25 IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the day and year first above written. CITY OF BEL AIRE, KANSAS PUBLIC BUILDING COMMISSION ATTEST: B.J. (S . `' :SEA L e �.r ST r 1NG ) ss: COUNTY OF SEDGWICK ) By: ACKNOWLEDGMENTS BE IT REMEMBERED that on this o2 7 day of �`' , 2003, before me, a notary public in and for said County and State, came Gary O'Neal, President of the City of Bel Aire, Kansas Public Building Commission and B.J. Beems, Secretary of said City of Bel Aire, Kansas Public Building Commission, who are personally known to me to be the same persons who executed, as such officers, the within instrument on behalf of said City of Bel Aire, Kansas Public Building Commission, and such persons duly acknowledged the execution of the same to be the act and deed of said City of Bel Aire, Kansas Public Building Commission. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal, the day and year last above written. JOY PURKS 146 Notary Public - State of Kansas My Appt. Expires / b - / / - CI My Appointment Expires: I C - / / 0 Notary Public in an or sa id County and State KMC\403156\LEASE 26 CITY OF BEL AIRE, KANSAS ATTEST: Sherryl tter- erk � OF B I_ t, (SE w.. teak m ►��A CITY OF THE FUTURE RESPECT FO': {0 COUNTY STA CD ) ss: ICK ) By: ACKNOWLEDGMENTS BE IT REMEMBERED that on this r,2 7 day of , 2003, before me, a notary public in and for said County and State, came Gary O'Neal, Mayor of the City of Bel Aire, Kansas and Sherryl Cutter, City Clerk of said City, who are personally known to me to be the same persons who executed, as such officers, the within instrument on behalf of said City of Bel Aire, Kansas, and such persons duly acknowledged the execution of the same to be the act and deed of said City of Bel Aire, Kansas. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal, the day and year last above written. JOY PURKS MiCa Notary Public - State of Kansas My APpt• Expires /0 —1 I - 04 My Appointment Expires: (C" - I I - 04 Notary Public in and f k said County and State KMC\403156\LEASE 27 SCHEDULE I SCHEDULE I TO THE LEASE DATED AS OF SEPTEMBER 1, 2003, BY AND BETWEEN THE CITY OF BEL AIRE, KANSAS PUBLIC BUILDING COMMISSION AND THE CITY OF BEL AIRE, KANSAS. PROPERTY SUBJECT TO LEASE (a) The following described real estate located in Sedgwick County, Kansas, to -wit: (i) (the "City Hall Land"); and (ii) (the "Swimming Pool Land"). said real property collectively constituting the "Land" as referred to in said Lease. (b) All buildings, improvements, machinery and equipment now or hereafter constructed, located or installed on the Land pursuant to said Lease. The property described in paragraphs (a) and (b) of this Schedule I together constituting the "Project" as referred to in said Lease and Bond Resolution. ICMC\403156\LEASE SCHEDULE I -A SCHEDULE I -A TO THE LEASE DATED AS OF SEPTEMBER 1, 2003, BY AND BETWEEN THE CITY OF BEL AIRE, KANSAS PUBLIC BUILDING COMMISSION AND THE CITY OF BEL AIRE, KANSAS. KMC\403156\LEASE I-2 SCHEDULE H -A SCHEDULE II -A TO THE LEASE DATED AS OF SEPTEMBER 1, 2003, BY AND BETWEEN THE CITY OF BEL AIRE, KANSAS PUBLIC BUILDING COMMISSION AND THE CITY OF BEL AIRE, KANSAS. SCHEDULE OF BASIC RENT PAYMENTS BASIC RENT BASIC RENT BASIC RENT BASIC RENT PAYMENT DATE PAYMENT DATE (Third Business (Third Business Day Prior to the Day Prior to the following dates) Principal Interest following dates) Principal Interest 2/1/2004 2/1/2021 $95,000 8/1/2004 8/1/2021 2/1/2005 2/1/2022 105,000 8/1/2005 8/1/2022 2/1/2006 2/1/2023 110,000 8/1/2006 8/1/2023 2/1/2007 $50,000 2/1/2024 115,000 8/1/2007 8/1/2024 2/1/2008 50,000 2/1/2025 120,000 8/1/2008 8/1/2025 2/1/2009 50,000 2/1/2026 135,000 8/1/2009 8/1/2026 2/1/2010 60,000 2/1/2027 140,000 8/1/2010 8/1/2027 2/1/2011 60,000 2/1/2028 145,000 8/1/2011 8/1/2028 2/1/2012 65,000 2/1/2029 160,000 8/1/2012 8/1/2029 2/1/2013 65,000 2/1/2030 165,000 8/1/2013 8/1/2030 2/1/2014 70,000 2/1/2031 175,000 8/1/2014 8/1/2031 2/1/2015 70,000 2/1/2032 180,000 8/1/2015 8/1/2032 2/1/2016 75,000 2/1/2033 190,000 8/1/2016 8/1/2033 2/1/2017 80,000 2/1/2034 205,000 8/1/2017 8/1/2034 2/1/2018 85,000 2/1/2035 215,000 8/1/2018 8/1/2035 2/1/2019 85,000 2/1/2036 230,000 8/1/2019 2/1/2020 90,000 230,000 8/1/2020 ICMC\403156\LEASE SCHEDULE II -B SCHEDULE II -B TO THE LEASE DATED AS OF SEPTEMBER 1, 2003, BY AND BETWEEN THE CITY OF BEL AIRE, KANSAS PUBLIC BUILDING COMMISSION AND THE CITY OF BEL AIRE, KANSAS. SCHEDULE OF BASIC RENT PAYMENTS BASIC RENT BASIC RENT BASIC RENT BASIC RENT PAYMENT DATE PAYMENT DATE (Third Business (Third Business Day Prior to the Day Prior to the following dates) Principal Interest following dates) Principal Interest 2/1/2004 2/1/2021 $20,000 8/1/2004 8/1/2021 2/1/2005 2/1/2022 20,000 8/1/2005 8/1/2022 2/1/2006 2/1/2023 20,000 8/1/2006 8/1/2023 2/1/2007 $10,000 2/1/2024 20,000 8/1/2007 8/1/2024 2/1/2008 10,000 2/1/2025 20,000 8/1/2008 8/1/2025 2/1/2009 10,000 2/1/2026 25,000 8/1/2009 8/1/2026 2/1/2010 10,000 2/1/2027 25,000 8/1/2010 8/1/2027 2/1/2011 10,000 2/1/2028 25,000 8/1/2011 8/1/2028 2/1/2012 15,000 2/1/2029 40,000 8/1/2012 8/1/2029 2/1/2013 15,000 2/1/2030 45,000 8/1/2013 8/1/2030 2/1/2014 15,000 2/1/2031 45,000 8/1/2014 8/1/2031 2/1/2015 15,000 2/1/2032 50,000 8/1/2015 8/1/2032 2/1/2016 15,000 2/1/2033 55,000 8/1/2016 8/1/2033 2/1/2017 15,000 2/1/2034 55,000 8/1/2017 8/1/2034 2/1/2018 15,000 2/1/2035 60,000 8/1/2018 8/1/2035 2/1/2019 20,000 2/1/2036 65,000 8/1/2019 2/1/2020 20,000 8/1/2020 KMC\403156\LEASE I1-2