Agenda - Economic Development Authority - 05/24/2005

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Section 3.7. Remedies to be Pursued Against Contractors and Subcontractors and Their Sureties. In the event of default of any Contractor or subcontractor under any contract made by it in connection with the Project or in the event of breach of warranty with respect to any materials, workmanship, or performance guaranty, the Tenant will promptly proceed, either separately or in conjunction with others, to exhaust the remedies of the Tenant or the Landlord against the Contractor or subcontractor so in default and against each .such surety for the perfimnance of such contract. The Tenant agrees to advise the Landlord of the steps it intends to take in cormection with any such default. If the Tenant shall so notify the Landlord or Tenant may, at its own expense and in its own name or in the name of the Landlord, prosecute or defend any action or proceedings or take any other action involving any such Contractor, subcontractor or surety which the Tenant deems reasonably necessary, and in such event the Landlord hereby agrc'cs to cooperate fully with the Tenant and to take all action necessary to effect the substitution of the Tenant for the Landlord in any such action or proceeding. Any amounts rect~vered by way o ~' damages, refunds~ adjustments or otherwise in connection with the ~i)regoing, after deduction of expenses'incurred 'in such recovery, Prior to the Completion Date shall be paid into the Construction Fund or, if recovered after the Completion Date and full disiJo:sition of the Construction Fund in accordance with the Section 3.3, shall be paid into the Bond Fund. Section 3.8. Investment of Construction Fund and Reserve Fund Moneys Permitted. Any moneys held as a part of the Construction Fund and Reserve Fund shall at the written request of the Tenant Representative be invested or reinvested by the Trustee in Qualified Investments. The type, amount and maturity of such investments shall be as specified by the Tenant Representative. The Trustee may make any and all investments permitted under this secti~m through or from its own bond department or any of its affilia{es. The Tenant covenants that tt~.e portion of the Construction Fund representing bond proceeds shall be directed to be invested and deposited only for a temporary period pending the need for expenditure to pay [-~ro~ect Costs, and it further covenants that said portion representing bond proceeds shall not be direr:ted to be invested or used in such manner that any of the Bonds would be "arbitrage bonds" fbr pt~rposes of Section 148 of the Internal Revenue Code and regulations thereunder. The Landlord and Tenant acknowledge that regulations of the Comptroller of the Currency grant the Landlord and Tenant the right to receive brokerage conf'n'mations of the set:itrity transactions as they occur. The Landlord and Tenant specifically waive such notification to the extent permitted by law and will receive periodic cash transaction statements ¢/hich will detail a[1 investment transactions. Section 3.9. Liens and Encumbrances. The Tenant shall pay, before delinquency, all costs ~br work done or caused to be done by the Tenant which could result in any lien or encumbrance on the Project or any part thereof, shall keep the title to the Project and every part thereo£ free and clear of any lien or encumbrance in respect of such work, and shall, to the extent permitmd by law, indemnify and hold harmless the Landlord against any claim, loss, costs, demand and legal or other expense, whether in respect of any lien.or otherwise, arising out of the supply of materials, services or labor for such work. The Tenant shall immediately notify the Landlord of any lien, claim or lien or other action which affects-the title to the Project or any part thereof, and shall cause the same to be removed within five days (or such additional time as the L:mdlord may permit in writing), failing which the Landlord may take such action as the 176,3908vl 29