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3.2 Transferee AgreementsCƩƚƒʹ Robert North \[KDC\] \[mailto:Robert.North@ks.gov\] {ĻƓƷʹ Monday, January 8, 2018 9:35 AM ƚʹ Anderson, Gary (G&B) <GANDERSON@GilmoreBell.com> {ǒĬƆĻĭƷʹ RE: Salina - Exhibits to Old Chicago Transferee Agr substantive comments. Certainly if the scope of the individual projects changes between today and the date the bonds are issued, the Secretary would like an opportunity to review the project scope and any proposed modifications. Thanks. Bob North Robert E. North Chief Attorney Kansas Department of Commerce 1000 S.W. Jackson St., Suite 100 Topeka, KS 66612-1354 Phone: 785.296.1913 Fax: 785.296.6809 KansasCommerce.com This e-mail, along with any documents, files, or attachments is intended only for the use of the individual or entity to which it is addressed. It may contain information that is privileged, confidential, attorney work product, or otherwise protected from disclosure under applicable law. If you are not the intended recipient, you are hereby notified that any dissemination, distribution, copying, or use of this information contained in or attached to this communication is strictly prohibited. If you have received this message in error, please notify the sender immediately and destroy the original communication and its attachments without reading, printing or saving in any manner. I Elm St Walnut St Park Pl Streetscape Phasing Phase 1 -11/15/18 Phase 2A - 7/31/19 Phase 2B - 10/1/19 TRANSFEREE AGREEMENT THIS TRANSFEREE AGREEMENT (this “Agreement”), is made and entered into this ____ day of ___________, 2018(the “Effective Date”) between and among the CITY OF SALINA, KANSAS, a municipal corporation duly organized under the laws of the State of Kansas (the “City”), and Lighthouse Properties III, Inc.aKansas corporation(“Transferee”) (collectively, the “Parties”and each a “Party”). RECITALS: A.City and Master Developer haveentered into that certain Development Agreement (the “Development Agreement”) dated as of January 23, 2017concerning development of a mixed-use project located generally within downtown Salina, Kansas as more specifically described in Section 3.01of theDevelopment Agreement (the “Project”). Capitalized terms which are not otherwise defined herein shall have the meanings assigned to them in the Development Agreement. B.Article IXof the Development Agreement provides for assignment by the City of certain obligations, covenants, and agreements under the Development Agreement to third parties. Accordingly, the City desiresto transfer certain obligations, covenants, and agreements to Transferee in accordance with Article IXwith respect to the portion ofthe Project described in Exhibit Aattached hereto (the “Transferee Project”). A legal description and boundary map of the location of the Transferee Project is attached as Exhibit Bhereto, which shall hereinafter be referred to as the “Project Area”. C.The Parties desire to enter into this Agreement so that the Transferee shall acknowledge, assume and agree to perform those obligations, covenants and agreements under the Development Agreement (as well asadditional termsdescribed herein)as the same pertain to the design, construction, completion and operation of the Transferee Project. AGREEMENT NOW, THEREFORE, in consideration of the foregoing and in consideration of the mutual covenants and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: 1.Incorporation of Recitals. The parties understand and agree that the Recitals set forth above are hereby incorporated as though more fully setforth herein. 2.Term of Agreement and Master Developer’s Rights. This Agreement shall commence upon the Effective Date and shall terminate uponthat date which is the earlier of (i) the last day of the TIF Collection Period, the last day of the CID Collection Period, or the date of termination of the STAR Bond Project Plan,whichever occurs later,or(ii) the date that the Transferee has been reimbursed for all Eligible Transferee Costs by Public Finance Proceeds, or (iii) the date this Agreement is terminated pursuant to Section 5or Section 13herein (the “Term”). 61037552.5 3.General Acknowledgement and Assumption. Transferee hereby acknowledges, assumes and agrees to perform each and every obligation, covenant and agreement under the Development Agreement, except asmodified below, but only to the extent that the same shall pertain to the design, construction, completion and operation of the Transferee Project, each of which is hereby incorporated as though more fully set forth herein. Transferee hereby understands and agrees that the City may enforce the same directly against Transferee. Notwithstanding the foregoing, the Transferee Project to be completed by the Transferee shall be defined by Exhibit Ato this Agreement, which shall control with regard to description of the Transferee Project. Transferee acknowledges that it has received a copy of the Development Agreement and any amendments thereto, and has reviewed the terms of same with counsel of its own election. 4.Specific Acknowledgement and Assumption. (a)Development Agreement Provisions Assumed by Transferee.In connection with the Transferee Project, Transferee specifically acknowledges, assumes and agrees to perform the following obligations, covenants and agreements,set forth in the Development Agreement, as modified in certain instances below: i.All of the terms and conditions in Article I(Definitions and Rules of Construction). ii.All of the representations and warranties of the Master Developer made in Article II. In addition, Transferee makes the following representations: a.No Material Change. There has been no material adverse change in the business, financial position, prospects or results of operations of the Transferee which could affect the Transferee’s ability to perform its obligations pursuant to the Agreement. b.Compliance with Laws.Transferee, to the best of its knowledge,is in compliance with all valid laws, ordinances, orders, decrees, decisions, rules, regulations and requirements of every duly constituted governmental authority, commission and court applicable to any of its affairs, business, operations as contemplated by this Agreementand the Development Agreement. c.Construction Permits. Except for Permitted Subsequent Approvals, all governmental permits and licenses required by applicable law to construct, occupy and operate the Transferee Project have been issued and are in full force and effect or, if the present stage of development does not allow such issuance, the Transferee reasonably believes, after due inquiry of the appropriate governmental officials, that such permits and licenses will be issued in a timely manner in order to permit the Transferee Project to be constructed. 2 61037552.5 iii.All of the terms and conditions set forth in Article IIIas the same relate to the Transferee Project and rights, duties and obligations of the Third Party Developer of the Transferee Project. iv.All of the terms and conditions set forth in Article IVas the same relate to the Transferee Project and rights, duties and obligations of the Third Party Developer ofthe Transferee Project. v.All of the terms and conditions set forth in Article VIas the same relate to the Transferee Project and rights, duties and obligations of the Third Party Developer of the Transferee Project. vi.All of the terms and conditions setforth in Article VIIas the same relate to the Transferee Project and rights, duties and obligations of the Third Party Developer of the Transferee Project. vii.All of the terms and conditions set forth in Article VIIIas the same relate to the Transferee Project and rights, duties and obligations of the Third Party Developer of the Transferee Project. viii.All of the terms and conditions set forth in Article IX as the same relate to the Transferee Project and rights, duties and obligations of the Third Party Developer of the Transferee Project. ix.All of the terms and conditions in Article X(General Provisions). (b)Non-Exclusive. Each of the foregoing provisions is hereby incorporated by reference and Transferee hereby understands and agrees that the City may enforce the same against Transferee in connection with the Transferee Project. Further, the Parties understand and agree that if and to the extent the various exhibits attached to the Development Agreement are referenced in the obligations that are acknowledged and assumed by the Transferee, such exhibits are hereby incorporated by reference as though more fully set forth herein. Notwithstanding the foregoing, the Transferee Project to be completed by the Transferee shall be defined by Exhibit Ato this Agreement, which shall control with regard to description of the Transferee Project. The Transferee acknowledges that the provisions of the Development Agreement referenced in this Section is not exclusive of the provisions of the Development Agreement assumed by Transferee in connection with the Transferee Project, and that Transferee assumes all provisions of the Development Agreement applicable to the Transferee and the Transferee Project regardless of specific inclusion within this Section. (c)Provisions Specifically Not Assumed by Transferee. Notwithstanding anything set forth herein which is seemingly to the contrary, the Partieshereby acknowledge and agreethat Transferee shall have no obligation to perform any of the obligations under the following provisions, nor shall Transferee have any rights related to the following provisions: 3 61037552.5 i.All of the terms and conditions set forth in the Development Agreement regarding development, financing, and operation of (or otherwise applying to) any other Project Component other than the Transferee Project. ii.All of the terms and conditions set forth in Article V(STAR Bond Issuance). 5.Performance Milestones. The Parties hereby agree that construction of the Transferee Project, subject to circumstances set forth in Section 8.08of the Development Agreement, shall be undertaken in accordance with the following schedule (the “Performance Milestones”): (a)Commencement of the Transferee Project. Transferee shall commence construction of the Transferee Project by April 1, 2018. The terms of Section 8.09of the Development Agreement shall apply with regard to any enforced delays which may extend time for performance of commencement of the Transferee Project. Provided, however, that Transferee shall not be required to commence the Transferee Project unless and until: i.The City is current on the milestones described in the schedule attached to its construction contract for the Phase I Streetscape Improvements; and (b)Commencement of the Transferee Project shall mean: i.A construction permit, and all other permits required pursuant to the City codes and ordinances, necessary for the commencement of construction or provision of the Transferee Project; ii.Certificates evidencing that insurance policies have been procured by Transferee for all insurance required pursuant to Section 7of this Agreement; iii.A copy of an executed guaranteed maximum price contract between Transferee and its general contractor for the construction and completion of the Transferee Project (or equivalent agreement in the reasonable discretion of theCity), evidence that such general contractor is a registered contractor in good standing in the City of Salina, Kansas, the State of Kansas, and its state of domicile, and copies of performance, labor, and material payment bonds in connection with the Transferee Project (unless City provides notice to the Transferee that such performance, labor and material payment bond are not required); iv.Documents reasonably satisfactory to the City that Transferee has obtained financing adequate to fully and finally construct and develop the Transferee Project in accordance with the critical path schedule and final project budget; 4 61037552.5 v.A critical path schedule and final project budget reasonably consistent with the preliminary project budget for the development and construction of the Transferee Project, and agreement upon the same by Transferee and the City Representative (to be supplemented and attached hereto as Exhibit C-1and Exhibit C-2, respectively); vi.Any and all other materials reasonably requested by the City evidencing the ability of Transferee to imminently commence construction of the Transferee Project with the capability to fully and finally complete the Transferee Project with diligence, which may include, without limitation, elevations, marketing materials, financing information, and business plans; vii.Transferee’s undertaking of a continuous and uninterrupted program of construction for such Transferee Project. (c)Construction of the Transferee Project.Transferee shall construct the Transferee Project in agood and workmanlike manner in accordance with the terms of this Agreement and the Development Agreement. Upon reasonable advance notice, the Transferee shall meet with the City to review and discuss the design and construction of the Transferee Project in order to enable the City to monitor the status of construction and to determine that the Transferee Project is being performed and completed in accordance with this Agreement and the Development Agreement. (d)Completion of the Transferee Project. The Transfereeshall cause the Transferee Project to be completed with due diligence. Transferee shall complete construction of the Transferee Project by July1, 2019.The terms of Section 8.09of the Development Agreement shall apply with regard to any enforced delays which may extend time for performance of completion of the Transferee Project. Completion of the Transferee Project shall mean receipt of a Certificate of Completion as defined in Section3.07of the Development Agreement.Notwithstanding the foregoing, in the event commencement of the Transferee Project is delayed as a result of the conditions described in Section 5(a)above, the deadline for completion of the Transferee Project described in this section shall be extended by a period of days equal to the period of days corresponding to the delay caused by conditions described in Section 5(a)above. (e)Failure to Comply with Performance Milestones. i.Failure to Timely Commence or Complete the Project. In the event that Transferee shall fail to meet any of the Performance Milestones set forth in this Section, then the City may require Transferee to appear before the City to show cause as to why Transferee failed to comply with the Performance Milestones. If Transferee cannot show cause for the delay which is reasonably satisfactory to the City, the City may exercise any or all of the following remedies: a.Failure to Timely Commence. In the event Transferee does not commence the Transferee Project within 90 days following the 5 61037552.5 commencement date identified in Section 5(a)herein, the City may provide written notice to Transferee of its election to reduce the Public Financing Cap described in Section 6(b)herein by twenty-five percent (25%),unless otherwise providedby the Cityin its reasonable discretion. In the event Transferee does not commence the Transferee Project within 120days following the commencement date identified in Section 5(a)herein, the City may provide written notice to Transferee of its election to cumulatively reduce the Public Financing Cap described in Section 6(b)herein by fiftypercent (50%),unless otherwise provided by the City in its reasonable discretion. In the event Transferee does not commence the Transferee Project within 180 days following the commencement date identified in Section 5(a)herein, the City may provide written notice to Transferee of its election toterminate the rights, duties and obligations of Transferee under the Development Agreement and this Agreementunless otherwise providedby the City in its reasonable discretion.The City shall provide written notice to the Transferee of its intent to pursue the penalties contained in this Section 5(e)a minimum of twenty (20) business days prior to providing notice to Transferee of such penalties as described herein. Each of the deadlines described in this section shall be subject to extensions of time as set forth in Section 8.09of the Development Agreement. In the event the City provides notice to the Transferee of a reduction to its Public Financing Cap pursuant to this section, the City may elect, in its reasonable discretion, to provide Transferee written notice of an extension of the completion deadline contained in Section 5(d). b.Failure to Timely Complete. In the event Transferee does not complete the Transferee Project within 90 days following the completion date identified in Section 5(d)herein, the Citymay provide written notice to Transferee of its election to reduce the Public Financing Cap described in Section 6(b)herein by twenty-five percent (25%), unless otherwise providedby the City in its reasonable discretion. In the event Transferee does not complete the Transferee Project within 120days following the completion date identified in Section 5(d)herein, the Citymay provide written noticeto Transferee of its election to cumulatively reduce the Public Financing Cap described in Section 6(b)herein by fiftypercent (50%), unless otherwise providedby the Cityin its reasonable discretion. In the event Transferee does not complete the Transferee Project within 180 days following the completion date identified in Section 5(d) herein, the City may provide written notice to Transferee of its election to terminate the rights, duties and obligations of Transferee under the Development Agreement and this Agreement, unless otherwise providedby the City in its reasonable discretion.The City shall provide written notice to the Transferee of its intent to pursue the penalties contained in this Section 5(e)a minimum of twenty (20) business days prior to providing notice to Transferee of such penalties as described herein. Each of the deadlines described in this section shall be subject to extensions of time as set forth in Section 8.09of the Development Agreement. 6 61037552.5 ii.Rights and Remedies Cumulative. Except as otherwise expressly stated in this Agreement or the Development Agreement, the rights and remedies of the parties are cumulative, and the exercise by a party of one or more of such rights or remedies under this Agreement or the Development Agreement (pursuant to Section 13herein) shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. iii.Delay Caused by Streetscape Construction.In no event shall the City pursue any remedies contained in this section for delays in commencement or completion of the Transferee Project directly caused by construction of any Streetscape and Public InfrastructureImprovements. In the event of delays in the commencement or completion of the Transferee Project directly caused by construction of the Streetscape and Public Infrastructure Improvements, the obligations of the Transferee to commence or complete the Transferee Project shall be delayed an amount of time equivalent to the period of delay directly caused by construction of the Streetscape and Public Infrastructure Improvements. In such event the Transferee shall provide written documentation tothe City that evidences that the delay in such Streetscape and Public Infrastructure Improvements will or has directly resulted in the delay of commencement or completion of the Transferee Project. 6.Public Finance Proceedsand City Funds. (a)Conditions Precedent to Accessto Public Finance Proceeds. Prior to access to Public Finance Proceeds and/or City Funds for purposes of partially financing the Transferee Project and the right to submita Certification of Expenditures for reimbursement for Eligible Transferee Costs through Public Finance Proceeds and/or City Funds pursuant to the provisions of the Development Agreement, Transferee must have obtained a Certificate of Completion for the Transferee Project as defined in Section 3.07of the Development Agreement(the “Public Finance AccessCondition”). (b)Public Financing Cap. Following Transferee’s satisfaction of the Public Finance Access Condition, City will provide Transfereeaccess to 1) TIF Proceeds in the amount of $800,000 plus interest at a rate of 5% per annumfrom the Hotel TIF Fund, 2) STAR Bond Proceeds in the amount of $442,274 from the STAR Bond Project Fund (subject to Section 6(c) herein), 3) all Hotel CID Proceeds deposited into the Hotel CID Sales Tax Fund, and 4) $1,000,000 of City Fundsto be used by Transfereesolely for financing those costs of the Transferee Projectas identified in the column labeled TIF Uses, STAR Bond Uses,CID Uses,and City Funds Uses,respectively, in the Project Budget attached as ExhibitC-2(collectively, the “Eligible Transferee Costs”), in all cases subject to and in accordance with the terms of the Development Agreement, this Agreement,the Bond Trust Indenture,and Kansas law (the “Public Financing Cap”). Transferee hereby acknowledges and agrees that the Hotel CID Proceeds and TIF Proceeds shall be available to Transferee on a pay-as-you-go basis in accordance with the terms of the Development Agreement and that Cityand Master Developerdonot guarantee any specific amount of Public Finance Proceeds will actually be available to 7 61037552.5 Transferee for reimbursement of Eligible Transferee Costs. Further, Transferee hereby acknowledges and agrees itshall not commence or join anycause of action or other legal recourse under thisAgreement, the Development Agreement,or in law or equity against City or Master Developer (and acknowledges that it possesses no such cause of action or legal recourse) in the event Transferee receives reimbursement for Eligible Transferee Costs through Public Finance Proceeds in an amount less than Transferee’s Public Financing Cap.Further, City agrees and acknowledges that City shall provide to Transferee (pursuant to the process described in Section 4.09and Article VIof the Development Agreement) thefull amount of City Funds identified herein so long as 1) STAR Bonds have been issued in anamountnetting no less than$9,625,000in STAR Bond Proceeds that are paid to the City as the Fieldhouse STAR Bond Allocationand 2) Transferee is in compliance with all terms of this Agreement and the Development Agreement. All costs of developing the Transferee Project, including Eligible Transferee Costs, in excess of the Public Finance Proceeds and City Funds actually received by Transfereeshall be the sole responsibility of Transferee. In order to access the STAR Bond Proceeds,TIF Proceeds,Hotel CID Proceeds,and City Funds, Transfereeshall submitCertificationsof Expendituresto the Cityin a manner consistent with Article VI of the Development Agreementand a Project Fund Disbursement Request form in a manner consistent with the termsof that certain Bond Trust Indenture. (c)STAR Bonds. The City expects to issue STAR Bonds to provide STAR Bond Proceeds for use in reimbursing costs of the Transferee Project, among other Project Components, and has engaged the Underwriter to underwrite the STAR Bonds. The Underwriter has advised the City that various representations, warranties and assurances from the Transferee may be required to assure investors in the STAR Bonds that the Transferee Projectwill be constructed and opened in a timely manner. Transferee hereby acknowledges and agrees that the timing of, access to and the amount of any STAR Bond Proceeds to be made available to Transferee is dependent on the City’s ability to issue the STAR Bonds on terms that are commercially reasonable to the City and the Underwriter’s ability to successfully underwrite such STAR Bonds. To the extent required by the Underwriter, the Transferee agrees to provide the information in form and substance reasonably requested by the Underwriter, including, but not limited to, the following for the Transferee Project: (i) guaranteed maximum price construction contract or other equivalent agreement for construction services, as appropriate, (ii) payment and performance bonds or other similar indicia of security for completion of the Transferee Project, (iii) insurance policies, (iv) evidence of availability of loan and equity funds necessary for the timely completion of the Transferee Project, which may be provided pursuant to a letter for commitment to finance the Transferee Project issued by a qualified lender; (v) any leases or contracts for any applicable portion of the Transferee Project and (vi) cooperation in calculation of the sales tax for any portion of the Transferee Project that willgenerate taxable retail sales. (d)Public Finance Limitation. i.In addition to the foregoing conditions applicable to the disbursement of STAR Bond Proceeds, TIF Proceeds and CID Proceedsto the Transferee, the STAR Bond Proceeds, TIF Proceeds and CID Proceedsavailable 8 61037552.5 to Transferee for reimbursement of Eligible Transferee Costs shall not exceed fiftypercent (50%) of the amount of the actual costs expended by Transferee to develop the Transferee Project (“Total Project Costs”). The remainder of all Total Project Costs, in an amount no less than fiftypercent (50%) of such Total Project Costs, shall be paid by Transferee through a combination of private debt and equity (the “Private Contribution”). In other words, there shall not be more than 50%of Total Project Costs paid with a combination of STAR Bond Proceeds, TIF Proceeds and CID Proceeds(the “Public Finance Limitation”). ii.The Certification of Expenditures submitted by Transferee shall include evidence of payment for Total Project Costs paid with the Private Contribution in an amount which is no less thanfifty percent (50%)of the Total Project Costs incurred at the time of such Certification of Expenditures in order to satisfy the Public Finance Limitation. In other words, the cumulative amount of Total Project Costs included in the Certification of Expenditures from the Private Contribution must equal no less than fifty percent (50%)of the cumulative amount of Total Project Costs in order for fifty (50%)of such Total Project Costs to be eligible for reimbursement through a combination of STAR Bond Proceeds, TIF Proceeds and CID Proceeds. 7.Insurance.Each Third Party Developer shall keep the Transferee Project continuously insured against such risks and in such amounts, withsuch deductible provisions as are customary in connection with the operation of facilities of the type and size comparable to the Transferee Project. 8.Indemnification of City and Master Developer.Transferee agrees to indemnify and hold the City and Master Developer, and the employees, agents and independent contractors and consultants of the City and the Master Developer (collectively, the “Indemnified Parties”) harmless from and against any and all suits, claims, costs of defense, damages, injuries, liabilities, judgments, costs and/or expenses, including court costs and reasonable attorneys’fees, resulting from, arising out of, or in any way connected with: (a)Transferee’s actions and undertaking in implementation of the Transferee Project, the Development Agreement, this Agreement, the STAR Bond Project Plan, the TIF Project Plan, and the CID Petition for the Hotel CID District; (b)the negligence or willful misconduct of Transferee, its employees, agents or independent contractors and consultants in connection with the management, design, development, redevelopment and construction of the Transferee Project; and (c)any delay or expense resulting from any litigation filed against Transferee by any member or shareholder of Transferee, any prospective investor, prospective partner or joint venture partner, lender, co-proposer, architect, contractor, consultant or other vendor. This Section shall not apply to actions of unrelated third parties (but shall expressly apply to employees, agents, independent contractors, consultants, affiliates, or other parties related to 9 61037552.5 Transferee) so long as such actions are unrelated to the undertaking in implementation of the Transferee Project, the Development Agreement, this Agreement, the STAR Bond Project Plan, the TIF ProjectPlan and the CID Petition for the Hotel CID District or the management, design, development, redevelopment and construction of the Transferee Project.This Section shall not apply to willful misconduct or negligence of the City or Master Developer or theofficers, employees or agents of City or Master Developer. This Section includes, but is not limited to, any repair, cleanup, remediation, detoxification, or preparation and implementation of any removal, remediation, response, closure or other plan (regardless of whether undertaken due to governmental action) concerning any hazardous substance or hazardous wastes including petroleum and its fractions as defined in (i) the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”; 42 U.S.C. Section9601,et seq.), (ii) the Resource Conservation and Recovery Act (“RCRA”; 42 U.S.C. Section 6901 et seq.) and (iii) Article 34, Chapter 65, K.S.A. and all amendments thereto, at any place where such Transferee owns or has control of real property pursuant to any of Transferee’s activities under the Development Agreement and this Agreement. The foregoing indemnity is intended to operate as an agreement pursuant to Section 107(e) of CERCLA to assure, protect, hold harmless and indemnify City and Master Developer from liability. 9.Payment of Taxes and Liens. Transferee hereby agrees as follows: (a)Payment of Property Taxes. During the Term of this Agreement, Transferee and its respective Affiliates shall pay when due all real estate taxes and assessments on the property it owns within the Districts. However, the obligation to pay real estate taxes and assessments on such property shall not be a personal obligation of the Transferee and its respective Affiliates but are subject to the same provisionsrelated to enforcement and collection of real estate taxes and assessments under laws of the State. In the event that the Transferee or its Affiliates shall fail to pay all such applicable real estate taxes and assessments after any notice and cure periods set forth in Section 8.02of the Development Agreement, the Transferee understands and agrees that, among other things, the City may (i) terminate financing of the Transferee Project through Public Finance Proceeds,(ii) suspend all reimbursements of Eligible Transferee Costs through Public Finance Proceeds during any time that such real estate taxes and assessments on the property owned by Transferee and its respective affiliates within the Districts remain unpaidor (iii) exercise any other remedies under this Agreement and/or the Development Agreement.Notwithstanding the foregoing, nothing contained in this Agreement shall prohibit the Transferee and its respective affiliates from contesting the assessed value of the properties, improvements or the taxes thereon in good faith by appropriate proceedings; provided however that each such party shall pay any and all amounts that are contested under protest while any such proceedings are pending. The Transferee and its respective affiliates shall promptlynotify the City in writing of a protest of real estate taxes or valuation of property owned by the Transferee or its respective affiliates within the Districts. (b)Liens. Transferee and its respective affiliates further agree that no mechanics’or other liens shall be established or remain against the Transferee Project or the property within the Districts, or the funds in connection with any of the Transferee Project, for labor or materials furnished in connection with any acquisition, construction, 10 61037552.5 additions, modifications, improvements, repairs, renewals or replacements so made. However, Transferee shall not be in default if mechanics’ or other liens are filed or established and theTransferee and its respective Affiliates contests in good faith said mechanics’ liens and in such event may permit the items so contested to remain undischarged and unsatisfied during the period of such contest and any appeal therefrom. (c)Sales Tax Collection.If Transfereeis engaged in the business of selling tangible personalproperty at retail or rendering or furnishing services taxable pursuant to the provisions of the Kansas retailers’ sales tax act and amendments thereto (K.S.A. 79-3601 et seq.) within any of the Districts, Transfereeshall collect, and make returns of, all taxes levied under the Kansas retailers’ sales tax actandany CID Sales Tax imposed within the District in which Transfereeis engaged in such business, all in the manner and at the timesprescribed by applicable law. The Transfereeshall be obligated to provide the City, along with itssubmission to the Kansas Department of Revenue, copies of the monthly sales tax returns for itsbusinesses within the Districts. To the extent it may legally do so, information obtained pursuant to this Section shall be kept confidential by the City in accordance with Applicable Law and Requirements, including but not limited to K.S.A. 79-3657. 10.Damage, Destruction or Condemnation. (a)In the event of damage to or destruction of any portion of the Transferee Project (other than the public roads, public right of way and public lands within the Transferee Project) resulting from fire or other casualty during the Term (a “Casualty”), or in the event any portion of the Project Area is condemned or taken for any public or quasi-public use or title thereto is found to be deficient during the Term, the net proceeds of any insurance relating to such damage or destruction, the net proceeds of such condemnation or taking or the net proceeds of any realization on title insurance shall be paid into, and used in accordance with a construction escrow agreement reasonably satisfactory to the City, Transferee, and Transferee’s construction or permanent lender (“Casualty Escrow”). (b)If, at any time during theTerm, the Transferee Project or any part thereof (other than the public roads, public right of way and public lands within the Project) shall be damaged or destroyed by a Casualty (the “Damaged Facilities”), Transferee, at its sole cost and expense, shallcommence and thereafter proceed as promptly as possible to repair, restore and replace the Damaged Facilities as nearly as possible to their condition immediately prior to the Casualty and shall be entitled to draw upon the Casualty Escrow for payment of said costs. (c)If at any time during the Term, title to the whole or substantially all of the portion of the Project Area owned by Transferee (or its Affiliate) shall be taken in condemnation proceedings or by right of eminent domain, Transferee, at its sole discretion, may terminate this Agreement as of the date of such taking. For purposes of this Section, “substantially all of the Project Area” shall be deemed to have been taken if the City and Transferee, each acting reasonably and in good faith, determine that the 11 61037552.5 untaken portion of the Project Area cannot be practically and economically used by Transferee for the purposes and at the times contemplated by this Agreement. (d)In the event of condemnation of less than the whole or substantially all of the portion of the Project Area owned by the Transferee (or its Affiliate) during the Term, Transferee, at its sole cost and expense, shall commence and thereafter proceed as promptly as possible to repair, restore and replace the remaining part of the Transferee Project, as nearly as possible, to itsformer condition, and shall be entitled to draw upon the Casualty Escrow for payment of said costs. (e)Nothing in this Section will require the Transferee to expend funds in excess of the Casualty Escrow or to perform anyobligation in addition to those obligations contained in the Development Agreement or in this Agreement. 11.Rights of Access and Inspection. (a)Representatives of the City shall have the right of access to the Transferee Project, without charges or fees, at normal construction hours during the period of construction, for the purpose of ensuring compliance with this Agreement, including, but not limited to, the inspection of the work being performed in constructing, renovating, improving, equipping, repairing and installing the Transferee Project, so long as they comply with all safety rules. Except in case of emergency, prior to any such access, such representatives of the City will check in with the on-site manager. Such representatives of the City shall carry proper identification, shall insure their own safety, assuming the risk of injury, and shall not interfere with the construction activity. (b)The Transferee shall maintain complete, accurate, and clearly identifiable records with respect to the Transferee Project, Eligible Transferee Costs and any other documents created pursuant to, or arising under, this Agreement, including, but not limited to, as applicable: all general contractor’s sworn statements, general contracts, subcontracts, material purchase orders, waivers of lien, and paid receipts and invoices (collectively, the “Records”). The Records shall be maintained during the term of this Agreement, and for a period of two (2) years thereafter (the “Retention Period”); provided, however, that if anylitigation, claim or audit is commenced prior to the expiration of the Retention Period, then the Retention Period shall be extended until all litigation, claims or audit findings have been completely terminated or resolved, without right of further appeal. (c)For the period of time beginning with the Effective Date and ending on the date two (2) years after receipt of a Certificate of Completion as defined in Section 3.07 of the Development Agreement, Transferee further agrees that the City, with reasonable advance notice and during normal business hours, shall have the right and authority to review, inspect, audit, and copy, from time to time, all of Transferee’s Records as pertinent to the purposes of, or to ensure compliance with, this Agreement. In addition, Transferee agrees to provide the City with copies of such Records, upon request. 12 61037552.5 (d)During the Term of this Agreement, the Transferee shall maintain records of all sales tax filings made by Transferee with the Kansas Department of Revenueand supporting documentation. The City, with reasonable advance notice and during normal business hours, shall have the right and authority to review, inspect, audit, and copy, from time to time, all of such Transferee’s sales tax filingsin connection with ongoing administration of the Public Finance Proceeds. 12.Assignment and Transfer of this Agreement. Assignment and transfer of any or all rights, duties or obligations under this Agreement shall be governed by Section 9.03of the Development Agreement, which is expressly incorporated herein, except that Master Developer approval for any such assignment or transfer shall not be required. 13.Defaults and Remedies. Events of Default and remedies therefore, as well as force majeure or enforced delay circumstances in relation to same, shall be governed by Article VIIIof the Development Agreement, which is expressly incorporated herein. 14.Release of Master Developer. To the extent that Transferee has assumed any obligations, terms or conditions of the Master Developer in connection with the Transferee Project under the Development Agreement pursuant to execution of this Agreement, the City hereby specifically agrees to release the Master Developer from suchobligations, terms and conditions. 15.Notice. Notice to City and Master Developer shall be as described in the Development Agreement. Notice to Transferee shall be made to the following: To the Transferee: Lighthouse Properties III, Inc. Attention:Trace Walker 500 Graves Boulevard Salina, Kansas 67401 tracew@bluebeacon.com With a copy to: Robert Johnson Polsinelli PC 6201 College Boulevard, Suite 500 Overland Park, Kansas 66211 rjohnson@polsinelli.com 17.Time of the Essence.Time is of the essence of this Agreement. The Parties will make every reasonable effort to expedite the subject matters hereof and acknowledge that the successful performance of this Agreement requires their continued cooperation.Required Disclosures.Each Party shall immediately notify the other Party of the occurrence of any material event which would cause any of the information furnished to other Party (by such furnishing Party) in connection with the matters covered in this Agreement to contain any untrue 13 61037552.5 statement of any material fact or toomit to state any material fact required to be stated therein or necessary to make any statement made therein, in the light of the circumstances under which it was made, not misleading. 19.Non-Binding Mediation. If a dispute or controversy arises between the Cityand Transferee under this Agreement, then any Party shall be entitled to request non-binding mediation, and the Cityand Transferee agree to participate, in good faith, in any such mediation requested by any other Party. Any request for mediation pursuant to this section shall be made in writing and delivered to the other Parties within thirty (30) days of the action or decision giving rise to the dispute or controversy. The mediation shall occur in Salina, Kansas, and the cost of any such mediation shall be divided equally between the Parties. 20.Tax Implications. The Transfereeacknowledges and represents that (1) neither the City nor any of itsofficials, employees, consultants, attorneys or other agents has provided to the Transfereeany advice regarding the federal or state income tax implications or consequences of this Agreement and the transactions contemplated hereby, and (2) the Transfereeis relying solely upon its own tax advisors in this regard. 21.Survival. Notwithstanding the termination of this Agreement, Transferee’s obligations of insurance and indemnification set out herein shall survive the termination of this Agreement to the extent that any incident giving rise to a claim, suit, judgment or demand occurred during Term. 22.Kansas Law.This Agreement shall be governed by and construed in accordance with the laws of the State of Kansas. 23.Counterparts. This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same Agreement. 24.Recordation of Agreement. The Parties agree to execute and deliver a memorandum of this Agreement in proper form for recording in the real property records of Saline County, Kansas, upon the request of a Party. 25.Cash Basis and Budget Laws. The Parties acknowledge and agree that the ability of the City to enter into and perform certain financial obligations pursuant to this Agreement are subject to the K.S.A. 10-1101et seq. and K.S.A. 79-2935et seq. 26.Electronic Storage.The Parties agreethat the transactions described herein may be conducted and related documents may be received, sent or stored by electronic means. Copies, telecopies, facsimiles, electronic files, and other reproductions of original executed documents shall be deemed tobe authentic and valid counterparts of such original documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law. \[Remainder of page intentionally left blank. Signature pages immediately follow.\] 14 61037552.5 INWITNESS WHEREOF, the City, Master Developer and Transferee have duly executed this Agreement pursuant to all requisite authorizations as of the date first above written. CITY OF SALINA, KANSAS ________________,Mayor \[SEAL\] ATTEST: Shandi Wicks, CMC, City Clerk APPROVED AS TO FORM: , City Attorney STATE OF KANSAS) ) ss. COUNTY OF SALINA) Onthis _______day of _________________, 201__, ____________________, personally known to me and after first being sworn did state that he/sheis the Mayorof the City of Salina, State of Kansas, and that the seal affixed to the foregoing instrument is the official Seal of the City of Salina, and that said instrument was signed and sealed on behalf of the City, and that the matters set forth herein are true and correct to the best of his/herand the City’s knowledge, information and belief, and acknowledge that he executed the same on behalf of the City as its free act and deed. Notary Public My Commission Expires: 61037552.5 IN WITNESS WHEREOF, the City, Master Developer and Transferee have duly executed this Agreement pursuant to all requisite authorizations as of the date first above written. TRANSFEREE: By: Printed Name: Title: Date: STATE OF _________________) ) ss. COUNTY OF _______________) On this day of ______________, 201____, before me personally appeared ____________, to me personally known, who being by me duly sworn did say that he/she is the _________________________ of ____________________________, a ______________ _______________________, and that said instrument was signed and delivered on behalf of said __________________________ and acknowledged to me that he/she executed the same as the free act and deed of said ________________________. In Testimony Whereof, I have hereunto set my hand and affixed my official seal the day and year first above written. Notary Public Printed Name: My Commission Expires: 61037552.5 EXHIBIT A TO TRANSFEREE AGREEMENT Description of Transferee Project \[SEE ATTACHED\] 61037552.5 EXHIBIT A Homewood Suites by Hilton The Downtown Salina Project Plan featuresa 113-room, all-suites hotel at the Northeast corner of Santa Fe Avenue and Mulberry Street. Afranchisehas been granted by Hilton Worldwidefor the developerto build and operate the hotel as a Homewood Suites by Hilton. Homewood Suites isan upper tier,traditional extended stay hotel. The hotel will befive stories in height. The architecture is a traditional style. The exterior of the first floor will primarily feature cast stone. Modular brickwill be usedon the second through fifth floors for the building elevations facing Santa Fe Avenue and Mulberry Streets. On the balance of the elevations, an Exterior Insulated Finish System will be used with colors similar to the main building faces. The DistrictÓs planned hotel is designed to include 2,250 square feet of meeting and conference th space, and two board rooms. There will also be a Hospitality Suite on the 5floor with a balcony that overlooks the intersection of Santa Fe Avenue and Mulberry Street. Other amenities will include aswimming pool and a fitness center. Both of these features are designed to appeal to the sports team market segment. In true extended stay spirit, each of the guest suites will have a kitchen area complete with full size refrigerator, microwave, and dishwasher. The Homewood Suites will also have a 5,000 square foot full service restaurant on the first floor featuring Santa Fe Avenue frontage. The DistrictÓs planned hotel development site possesses the necessary location and the presence of lodging demand generators to support additional lodging and meeting space such asthe nearby TonyÓs Event Center, Salina Regional Health Center,Kansas Wesleyan University, and the Salina Fieldhouse. - ROLL-IN SHOWER ROLL-IN SHOWER CBA F.1 J.1H.1G.1E.1D.1 G.1 17 16 15.2 15 14 13 12.1 12 11.5 11 11.5 10 10 9 8 7.5 7 6.2 6 5 4.8 4.8 4 33 2.75 2 1 1 GJHGFEDCBA A.2A.1 B.5 CBA H.1F.1E.1 J.1G.1D.1 G.1 15.2 15 14 13 12.1 12 11.5 11 11.5 10 10 9 8 7.5 7 6.2 6 5 4.8 4 33 2.75 2 11 GJHGFEDCBA A.2A.1 B.5 122 122 CENTER FITNESS S1 128 133 122 122 129132 122 122 122 122 122 122 122 Exhibit A Preliminary Project Budget HOMEWOOD SUITES - SALINA Development Cost Land - Hotel1,108,651$ Demolition - Hotel145,192$ Land - Parking1,164,419$ Demolition - Parking337,306$ Parking - Paving, Curbs etc.454,044$ Private Utility Relocation490,000$ Arch/Eng356,934$ Permits/Licenses/Fees178,524$ Gen Conditions713,991$ Site Construction951,930$ Concrete832,873$ Masonry237,939$ Metals119,056$ Wood & Plastics1,665,920$ Thermal & Moisture832,873$ Doors & Windows832,873$ Finishes1,665,920$ Specialties119,056$ Hotel Kitchen&Specialties237,939$ Special Construction119,056$ Conveying Systems237,939$ Plumbing450,000$ Mechanical1,684,976$ Electrical1,446,864$ TOTAL$16,384,276 OWNER - FF&E Guestrooms1,260,000$ Guestroom Corridors96,900$ Public Areas301,530$ Guestroom Equipment298,680$ Public Area Equipment59,394$ Freight & Tax285,228$ FF&E Installation45,600$ Warehousing8,550$ Laundry - Main 47,082$ Laundry - Guest3,762$ Kitchen Equip & Back of House143,320$ Total FF&E$2,550,046 Operating Supplies & Equip150,708$ Telephone Switch/Equip37,734$ OnQ System51,870$ Security & Communications69,462$ HSIA Equipment49,476$ Exterior Signs28,810$ Inventories28,272$ Pre-Opening141,360$ Project Management113,088$ Procurement Fee Allowance47,082$ InsuranceTBD Acct-Legal-TaxesTBD Contingency500,000.00$ TOTAL$20,152,184 EXHIBIT B TO TRANSFEREE AGREEMENT Legal Description and Boundary Map \[SEE ATTACHED\] 61037552.5 EXHIBIT C-1 TO TRANSFEREE AGREEMENT Critical Path Schedule \[TO BE ATTACHED\] 61037552.5 EXHIBIT C-2 TO TRANSFEREE AGREEMENT Project Budget \[TO BE ATTACHED\] 61037552.5 TRANSFEREE AGREEMENT THIS TRANSFEREE AGREEMENT (this “Agreement”), is made and entered into this ____ day of ___________, 20___2018 (the “Effective Date”) between and among the CITY OF SALINA, KANSAS, a municipal corporation duly organized under the laws of the State of Kansas (the “City”),SALINA 2020, INC.,and Lighthouse Properties III, Inc.a Kansas corporation(the “Master Developer”) and ________________________,a ____________________ (“Transferee”) (collectively, the “Parties” and each a “Party”). RECITALS: A. City and Master Developer have entered into that certain Development Agreement (the “Development Agreement”) dated as of January 23, 2017 concerning development of a mixed-use project located generally within downtown Salina, Kansas as more specifically described in Section 3.01 of the Development Agreement (the “Project”). Capitalized terms which are not otherwise defined herein shall have the meanings assigned to them in the Development Agreement. B. Article IX of the Development Agreement provides for assignment by the City and Master Developer of certain obligations, covenants, and agreements under the Development Agreement to third parties. Accordingly, the City and the Master Developer desiredesires to transfer certain obligations, covenants, and agreements to Transferee in accordance with Article IX with respect to the portion of the Project described in Exhibit A attached hereto (the “Transferee Project”). A legal description and boundary map of the location of the Transferee Project is attached as Exhibit B hereto, which shall hereinafter be referred to as the “Project Area”. C. The Parties desire to enter into this Agreement so that the Transferee shall acknowledge, assume and agree to perform those obligations, covenants and agreements under the Development Agreement (as well as additional terms described herein) as the same pertain to the design, construction, completion and operation of the Transferee Project. AGREEMENT NOW, THEREFORE, in consideration of the foregoing and in consideration of the mutual covenants and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: 1.Incorporation of Recitals. The parties understand and agree that the Recitals set forth above are hereby incorporated as though more fully set forth herein. 2.Term of Agreement and Master Developer’s Rights. This Agreement shall commence upon the Effective Date and shall terminate upon that date which is the earlier of (i) the last day of the \[TIF Collection Period/, the last day of the CID Collection Period/, or the date of termination of the STAR Bond Project Plan\],, whichever occurs later, or (ii) the date that the Transferee has been reimbursed for all Eligible Transferee Costs by Public Finance Proceeds, or (iii) the date this Agreement is terminated pursuant to Section 5 or Section 13 herein (the 61037552.5 “Term”).Notwithstanding the foregoing, the Master Developer’s rights, duties, and obligations under this Agreement shall expire on the date of the Certificate of Full Completion for the Transferee Project. 3.General Acknowledgement and Assumption. Transferee hereby acknowledges, assumes and agrees to perform each and every obligation, covenant and agreement under the Development Agreement, except as modified below, but only to the extent that the same shall pertain to the design, construction, completion and operation of the Transferee Project, each of which is hereby incorporated as though more fully set forth herein. Transferee hereby understands and agrees that the City or Master Developer may enforce the same directly against Transferee. Notwithstanding the foregoing, the Transferee Project to be completed by the Transferee shall be defined by Exhibit A to this Agreement, which shall control with regard to description of the Transferee Project. Transferee acknowledges that it has received a copy of the Development Agreement and any amendments thereto, and has reviewed the terms of same with counsel of its own election. 4.Specific Acknowledgement and Assumption. (a)Development Agreement Provisions Assumed by Transferee. In connection with the Transferee Project, Transferee specifically acknowledges, assumes and agrees to perform the following obligations, covenants and agreements, set forth in the Development Agreement, as modified in certain instances below: i.All of the terms and conditions in Article I (Definitions and Rules of Construction). ii.All of the representations and warranties of the Master Developer made in Article II. In addition, Transferee makes the following representations: a.No Material Change. There has been no material adverse change in the business, financial position, prospects or results of operations of the Transferee which could affect the Transferee’s ability to perform its obligations pursuant to the Agreement. b.Compliance with Laws. Transferee, to the best of its knowledge, is in compliance with all valid laws, ordinances, orders, decrees, decisions, rules, regulations and requirements of every duly constituted governmental authority, commission and court applicable to any of its affairs, business, operations as contemplated by this Agreement and the Development Agreement. c.Construction Permits. Except for Permitted Subsequent Approvals, all governmental permits and licenses required by applicable law to construct, occupy and operate the Transferee Project have been issued and are in full force and effect or, if the present stage of development does not allow such issuance, the Transferee reasonably believes, after due inquiry of the appropriate governmental officials, that such permits and licenses will be issued 2 61037552.5 obligations under the following provisions, nor shall Transferee have any rights related to the following provisions: i.All of the terms and conditions set forth in the Development Agreement regarding development, financing, and operation of (or otherwise applying to) any other Project Component other than the Transferee Project. ii.All of the terms and conditions set forth in Article V (STAR Bond Issuance). 5.Performance Milestones. The Parties hereby agree that construction of the Transferee Project, subject to circumstances set forth in Section 8.08 of the Development Agreement, shall be undertaken in accordance with the following schedule (the “Performance Milestones”): (a)Commencement of the Transferee Project. Transferee shall commence construction of the Transferee Project by \[_____________________\].April 1, 2018. The terms of Section 8.09 of the Development Agreement shall apply with regard to any enforced delays which may extend time for performance of commencement of the Transferee Project. Provided, however, that Transferee shall not be required to commence the Transferee Project unless and until: i.The City is current on the milestones described in the schedule attached to its construction contract for the Phase I Streetscape Improvements; and (b)Commencement of the Transferee Project shall mean: i.A construction permit, and all other permits required pursuant to the City codes and ordinances, necessary for the commencement of construction or provision of the Transferee Project; ii.Certificates evidencing that insurance policies have been procured by Transferee for all insurance required pursuant to Section 7 of this Agreement; iii.A copy of an executed guaranteed maximum price contract between Transferee and its general contractor for the construction and completion of the Transferee Project (or equivalent agreement in the reasonablediscretion of the Cityand the Master Developer), evidence that such general contractor is a registered contractor in good standing in the City of Salina, Kansas, the State of Kansas, and its state of domicile, and copies of performance, labor, and material payment bonds in connection with the Transferee Project (unless City and Master Developer agree otherwise in their joint discretion); provides notice to the Transferee that such performance, labor and material payment bond are not required); iv.Documents reasonably satisfactory to the Cityand Master Developer that Transferee has obtained financing adequate to fully and finally 4 61037552.5 construct and develop the Transferee Project in accordance with the critical path schedule and final project budget; v.A critical path schedule and final project budget reasonably consistent with the preliminary project budget for the development and construction of the Transferee Project, and agreement upon the same by Transferee, and the City Representative, and Master Developer (to be supplemented and attached hereto as Exhibit C-1 and Exhibit C-2, respectively); Any and all other materials reasonably requested by the City and Master Developerevidencing the ability of Transferee to imminently commence construction of the Transferee Project with the capability to fully and finally complete the Transferee Project with diligence, which may include, without limitation, elevations, marketing materials, financing information, and business plans; vi.\[For New Business TIF Requests and Retail Improvement Requests–A copy of an executed lease withany proposed tenant or, if Transferee is a tenant, a copy of its lease with the landlord\]; vii.Transferee’s undertaking of a continuous and uninterrupted program of construction for such Transferee Project. (c)Construction of the Transferee Project. Transferee shall construct the Transferee Project in a good and workmanlike manner in accordance with the terms of this Agreement and the Development Agreement. Upon reasonable advance notice, the Transferee shall meet with the City to review and discuss the design and construction of the Transferee Project in order to enable the City to monitor the status of construction and to determine that the Transferee Project is being performed and completed in accordance with this Agreement and the Development Agreement. (d)Completion of the Transferee Project. The Transferee shall cause the Transferee Project to be completed with due diligence. Transferee shall complete construction of the Transferee Project by _____________________.July 1, 2019. The terms of Section 8.09 of the Development Agreement shall apply with regard to any enforced delays which may extend time for performance of completion of the Transferee Project. Completion of the Transferee Project shall mean receipt of a Certificate of Completion as defined in Section 3.07 of the Development Agreement. Notwithstanding the foregoing, in the event commencement of the Transferee Project is delayed as a result of the conditions described in Section 5(a) above, the deadline for completion of the Transferee Project described in this section shall be extended by a period of days equal to the period of days corresponding to the delay caused by conditions described in Section 5(a) above. (e)Failure to Comply with Performance Milestones. i.Failure to Timely Commence or Complete the Project. In the event that Transferee shall fail to meet any of the Performance Milestones set 5 61037552.5 forth in this Section, then the City may require Transferee to appear before the City to show cause as to why Transferee failed to comply with the Performance Milestones. If Transferee cannot show cause for the delay which is reasonably satisfactory to the City, the City may exercise any or all of the following remedies: a.Failure to Timely Commence. In the event Transferee does not commence the Transferee Project within 90 days following the commencement date identified in Section 5(a) herein, the City may provide written notice to Transferee of its election to reduce the Public Financing Cap described in Section 6(b) herein by twenty-five percent (25%), unless otherwise agreedprovided by the City and Master Developerin its reasonable discretion. In the event Transferee does not commence the Transferee Project within 120 days following the commencement date identified in Section 5(a) herein, the City may provide written notice to Transferee of its election to cumulatively reduce the Public Financing Cap described in Section 6(b) herein by fifty percent (50%), unless otherwise agreedprovided by the City and Master Developerin its reasonable discretion. In the event Transferee does not commence the Transferee Project within 180 days following the commencement date identified in Section 5(a) herein, the City may provide written notice to Transferee of its election to terminate the rights, duties and obligations of Transferee under the Development Agreement and this Agreement unless otherwise agreedprovided by the City and Master Developer.in its reasonable discretion. The City shall provide written notice to the Master Developer and Transferee of its intent to provide notice to pursuethe Transferee as provided hereinpenalties contained in this Section 5(e) a minimum of twenty (20) business days prior to providing notice to Transferee of suchnotice to Transfereepenalties as described herein. Each of the deadlines described in this section shall be subject to extensions of time as set forth in Section 8.09 of the Development Agreement. In the event the City provides notice to the Transferee of a reduction to its Public Financing Cap pursuant to this section, the City and Master Developer may elect, in their jointits reasonable discretion, to provide Transferee written notice of an extension of the completion deadline contained in Section 5(cd). b.Failure to Timely Complete. In the event Transferee does not complete the Transferee Project within 90 days following the completion date identified in Section 5(cd) herein, the City may provide written notice to Transferee of its election to reduce the Public Financing Cap described in Section 6(b) herein by twenty-five percent (25%), unless otherwise agreedprovided by the Cityand Master Developerin its reasonable discretion. In the event Transferee does not complete the Transferee Project within 120 days following the completion date identified in Section 5(cd) herein, the City may provide written notice to Transferee of its election to cumulatively reduce the Public Financing Cap described in Section 6(b) herein by fifty percent (50%), unless otherwise agreedprovided by the City and Master Developer. in its reasonable discretion. In the event Transferee does not complete the Transferee Project within 180 days following the completion date identified in Section 5(cd) herein, the City may 6 61037552.5 provide written notice to Transferee of its election to terminate the rights, duties and obligations of Transferee under the Development Agreement and this Agreement, unless otherwise agreedprovided by the City and Master Developer.in its reasonable discretion. The City shall provide written notice to the Master Developer and Transferee of its intent to provide notice to pursuetheTransferee as provided hereinpenalties contained in this Section 5(e) a minimum of twenty (20) business days prior to providing notice to Transferee of such notice to Transfereepenalties as described herein. Each of the deadlines described in this section shall be subject to extensions of time as set forth in Section 8.09 of the Development Agreement. ii.Rights and Remedies Cumulative. Except as otherwise expressly stated in this Agreement or the Development Agreement, the rights and remedies of the parties are cumulative, and the exercise by a party of one or more of such rights or remedies under this Agreement or the Development Agreement (pursuant to Section 13 herein) shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. iii.Delay Caused by Streetscape Construction. In no event shall the City pursue any remedies contained in this section for delays in commencement or completion of the Transferee Project directly caused by construction of any Streetscape and Public Infrastructure Improvements. In the event of delays in the commencement or completion of the Transferee Project directly caused by construction of the Streetscape and Public Infrastructure Improvements, the obligations of the Transferee to commence or complete the Transferee Project shall be delayed an amount of time equivalent to the period of delay directly caused by construction of the Streetscape and Public Infrastructure Improvements. In such event the Transferee shall provide written documentation to the City that evidences that the delay in such Streetscape and Public Infrastructure Improvements will or has directly resulted in the delay of commencement or completion of the Transferee Project. 6.Public Finance Proceeds and City Funds. (a)Conditions Precedent to Access to Public Finance Proceeds. Prior to access to Public Finance Proceeds and/or City Funds for purposes of partially financing the Transferee Project and the right to submit a Certification of Expenditures for reimbursement for Eligible Transferee Costs through Public Finance Proceeds and/or City Funds pursuant to the provisions of the Development Agreement, Transferee must have obtained a Certificate of Completion for the Transferee Project as defined in Section 3.07 of the Development Agreement (the “Public Finance Access Condition”).\[This Section shall not be utilized in the Transferee Agreement for the Stiefel Improvements or the Car Museum.\] (b)Public Financing Cap. Following Transferee’s satisfaction of the Public Finance Access Condition(as applicable),, City and MasterDeveloperwill provide 7 61037552.5 Transferee access to \[STAR Bond Proceeds/1)TIF Proceeds/CID Proceeds/City Funds\] in the amount of $\[X\]$800,000 plus interest at a rate of 5% per annum from the \[X\]Hotel TIF Fund, 2) STAR Bond Proceeds in the amount of $442,274 from the STAR Bond Project Fund (subject to Section 6(c) herein), 3) all Hotel CID Proceeds deposited into the Hotel CID Sales Tax Fund, and 4) $1,000,000 of City Funds to be used by Transferee solely for financing those costs of the Transferee Project as identified in the column labeled\[TIF Uses, STAR Bond Uses/TIF Uses/,CID Uses/, and City Funds Uses\], respectively, in the Project Budget attached as Exhibit C-2(“(collectively, the “Eligible Transferee Costs”), in all cases subject to and in accordance with the terms of the Development Agreement, this Agreement, the Bond Trust Indenture, and Kansas law (the “Public Financing Cap”).\[For Transferee Projects to be reimbursed with TIF Proceeds/CID Proceeds add “Transferee hereby acknowledges and agrees suchPublic Financethat the Hotel CID Proceeds and TIF Proceeds shall be available to Transferee on a pay-as-you-go basis in accordance with the terms of the Development Agreement and that City and Master Developer do not guarantee any specific amount of Public Finance Proceeds will actually be available to Transferee for reimbursement of Eligible Transferee Costs. Further, Transferee hereby acknowledges and agrees it shall not commence or join any cause of action or other legal recourse under this Agreement, the Development Agreement, or in law or equity against City or Master Developer (and acknowledges that it possesses no such cause of action or legal recourse) in the event Transferee receives reimbursement for Eligible Transferee Costs through Public Finance Proceeds in an amount less than Transferee’s Public Financing Cap.”\]. In the event City Funds shall be made available to Transferee to partially finance the Transferee Project pursuant to the terms of this Agreement. Further, City agrees and acknowledges that City shall provide to Transferee (pursuant to the process described in Section 4.09 and Article VI of the Development Agreement) suchthe full amount of City Funds identified herein so long as 1) STAR Bonds have been issued in an amount netting no less than $9,625,000 in STAR Bond Proceeds that are paid to the City as the Fieldhouse STAR Bond Allocation and 2) Transferee is in compliance with all terms of this Agreement and the Development Agreement. All costs of developing the Transferee Project, including Eligible Transferee Costs, in excess of the Public Finance Proceeds and City Funds actually received by Transferee shall be the sole responsibility of Transferee. In order to accesssuch \[theSTAR Bond Proceeds/,TIF Proceeds/, Hotel CID Proceeds/, and City Funds\],, Transferee shall submit Certifications of Expenditures to the City in a manner consistent with Article VI of the Development Agreement \[For STAR Bond reimbursement add “and a Project Fund Disbursement Request form in a manner consistent with the terms of that certain Bond Trust Indenture”\].. Public Finance Proceeds Annual Allotment. \[Include for Transferees granted reimbursement through New Business TIF Proceeds, New Retail CID Proceeds or Existing Retail CID Proceeds\] Pursuant to the terms of that certain Supplemental Agreement, Transferee’s Public Finance Proceeds Annual Allotment shall equal \[X\]. Such Public Finance Proceeds Annual Allotment may be utilized to reimburse Eligible Costs from the \[X\] Fund in accordance with the terms of this Agreement, the Development Agreement, and the Supplemental Agreement. 8 61037552.5 (c)\[STAR Bonds. The City expects to issue STAR Bonds to provide STAR Bond Proceeds for use in reimbursing costs of the Transferee Project, among other Project Components, and has engaged the Underwriter to underwrite the STAR Bonds. The Underwriter has advised the City that various representations, warranties and assurances from the Transferee may be required to assure investors in the STAR Bonds that the Transferee Project will be constructed and opened in a timely manner. Transferee hereby acknowledges and agrees that the timing of, access to and the amount of any STAR Bond Proceeds to be made available to Transferee is dependent on the City’s ability to issue the STAR Bonds on terms that are commercially reasonable to the City and the Underwriter’s ability to successfully underwrite such STAR Bonds. To the extent required by the Underwriter, the Transferee agrees to provide the information in form and substance reasonably requested by the Underwriter, including, but not limited to, the following for the Transferee Project: (i) guaranteed maximum price construction contract or other equivalent agreement for construction services, as appropriate, (ii) payment and performance bonds or other similar indicia of security for completion of the Transferee Project, (iii) insurance policies, (iv) evidence of availability of loan and equity funds necessary for the timely completion of the Transferee Project, which may be provided pursuant to a letter for commitment to finance the Transferee Project issued by a qualified lender; (v) any leases or contracts for any applicable portion of the Transferee Project and (vi) cooperation in calculation of the sales tax for any portion of the Transferee Project that will generate taxable retail sales.\]. Public Finance Limitation. \[This Section shall not be utilized in the Transferee Agreement for either the Stiefel Improvements or the Car Museum. This Section, including the percentage amount of the Private Contribution, shall be modified in each Transferee Agreement; provided, however, that the Private Contribution percentage shall not be less than 50%. Notwithstanding the foregoing, each Transferee Agreement for use of Existing Retail CID Proceeds for Transferee Projects commenced during construction of the Streetscape and Public Infrastructure Improvements shall require expenditure of Total Project Costs in a ratio of 30% Private Contribution to every 70% of Existing Retail CID Proceeds reimbursed tosuch Transferee.\] (d)Public Finance Limitation. i.In addition to the foregoing conditions applicable to the disbursement of \[STAR Bond Proceeds/,TIF Proceeds/ and CID Proceeds\] to the Transferee, the \[STAR Bond Proceeds/,TIF Proceeds/ and CID Proceeds\] available to Transferee for reimbursement of Eligible Transferee Costs shall not exceed_______fifty percent (_____%)(50%) of the amount of the actual costs expended by Transferee to develop the Transferee Project (“Total Project Costs”). The remainder of all Total Project Costs, in an amount no less than ________fifty percent (_____%)(50%) of such Total Project Costs, shall be paid by Transferee through a combination of private debt and equity (the “Private Contribution”). In other words, there shall not be more than _____%50% of Total Project Costs paid with\[a combination of STAR Bond Proceeds/,TIF Proceeds/ and CID Proceeds\] (the “Public Finance Limitation”). 9 61037552.5 ii.The Certification of Expenditures submitted by Transferee shall include evidence of payment for Total Project Costs paid with the Private Contribution in an amount which is no less than ______%fifty percent (50%) of the Total Project Costs incurred at the time of such Certification of Expenditures in order to satisfy the Public Finance Limitation. In other words, the cumulative amount of Total Project Costs included in the Certification of Expenditures from the Private Contribution must equal no less than _____%fifty percent (50%) of the cumulative amount of Total Project Costs in order for _____%fifty (50%) of such Total Project Costs to be eligible for reimbursement through \[a combination ofSTAR Bond Proceeds/,TIF Proceeds/ and CID Proceeds\].. 7.Insurance. Each Third-Party Developer shall keep the Transferee Project continuously insured against such risks and in such amounts, with such deductible provisions as are customary in connection with the operation of facilities of the type and size comparable to the Transferee Project. 8.Indemnification of City and Master Developer. Transferee agrees to indemnify and hold the City and Master Developer, and the employees, agents and independent contractors and consultants of the City and the Master Developer (collectively, the “Indemnified Parties”) harmless from and against any and all suits, claims, costs of defense, damages, injuries, liabilities, judgments, costs and/or expenses, including court costs and reasonable attorneys’ fees, resulting from, arising out of, or in any way connected with: (a)Transferee’s actions and undertaking in implementation of the Transferee Project, the Development Agreement, this Agreement, and the \[Project Plans/CID Petitions\];the STAR Bond Project Plan, the TIF Project Plan, and the CID Petition for the Hotel CID District; (b)the negligence or willful misconduct of Transferee, its employees, agents or independent contractors and consultants in connection with the management, design, development, redevelopment and construction of the Transferee Project; and (c)any delay or expense resulting from any litigation filed against Transferee by any member or shareholder of Transferee, any prospective investor, prospective partner or joint venture partner, lender, co-proposer, architect, contractor, consultant or other vendor. This Section shall not apply to willful misconduct or grossThis Section shall not apply to actions of unrelated third parties (but shall expressly apply to employees, agents, independent contractors, consultants, affiliates, or other parties related to Transferee) so long as such actions are unrelated to the undertaking in implementation of the Transferee Project, the Development Agreement, this Agreement, the STAR Bond Project Plan, the TIF Project Plan and the CID Petition for the Hotel CID District or the management, design, development, redevelopment and construction of the Transferee Project. This Section shall not apply to willful misconduct or negligence of the City or Master Developer or the officers, employees or agents of City or Master Developer. This Section includes, but is not limited to, any repair, cleanup, remediation, detoxification, or preparation and implementation of any removal, remediation, response, closure 10 61037552.5 or other plan (regardless of whether undertaken due to governmental action) concerning any hazardous substance or hazardous wastes including petroleum and its fractions as defined in (i) the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”; 42 U.S.C. Section 9601, et seq.), (ii) the Resource Conservation and Recovery Act (“RCRA”; 42 U.S.C. Section 6901 et seq.) and (iii) Article 34, Chapter 65, K.S.A. and all amendments thereto, at any place where such Transferee owns or has control of real property pursuant to any of Transferee’s activities under the Development Agreement and this Agreement. The foregoing indemnity is intended to operate as an agreement pursuant to Section 107(e) of CERCLA to assure, protect, hold harmless and indemnify City and Master Developer from liability. 9.Payment of Taxes and Liens. Transferee hereby agrees as follows: (a)Payment of Property Taxes. During the Term of this Agreement, Transferee and its respective Affiliates shall pay when due all real estate taxes and assessments on the property it owns within the Districts. However, Thethe obligation to pay real estate taxes and assessments on such property shall not be a personal obligation of the Transferee and its respective Affiliates but are subject to the same provisions related to enforcement and collection of real estate taxes and assessments under laws of the State. In the event that the Transferee or its Affiliates shall fail to pay all such applicable real estate taxes and assessments after any notice and cure periods set forth in Section 8.02 of the Development Agreement, the Transferee understands and agrees that, among other things, the City may (i) terminate financing of the Transferee Project through Public Finance Proceeds, (ii) suspend all reimbursements of Eligible Transferee Costs through Public Finance Proceeds during any time that such real estate taxes and assessments on the property owned by Transferee and its respective affiliates within the Districts remain unpaid or (iii) exercise any other remedies under this Agreement and/or the Development Agreement. Notwithstanding the foregoing, nothing contained in this Agreement shall prohibit the Transferee and its respective affiliates from contesting the assessed value of the properties, improvements or the taxes thereon in good faith by appropriate proceedings; provided however that each such party shall pay any and all amounts that are contested under protest while any such proceedings are pending. The Transferee and its respective affiliates shall promptly notify the City in writing of a protest of real estate taxes or valuation of property owned by the Transferee or its respective affiliates within the Districts. (b)Liens. Transferee and its respective affiliates further agree that no mechanics’ or other liens shall be established or remain against the Transferee Project or the property within the Districts, or the funds in connection with any of the Transferee Project, for labor or materials furnished in connection with any acquisition, construction, additions, modifications, improvements, repairs, renewals or replacements so made. However, Transferee shall not be in default if mechanics’ or other liens are filed or established and the Transferee and its respective Affiliates contests in good faith said mechanics’ liens and in such event may permit the items so contested to remain undischarged and unsatisfied during the period of such contest and any appeal therefrom. (c)Sales Tax Collection.If Transferee is engaged in the business of selling tangible personal property at retail or rendering or furnishing services taxable 11 61037552.5 pursuant to the provisions of the Kansas retailers’ sales tax act and amendments thereto (K.S.A. 79-3601 et seq.) within any of the Districts, Transferee shall collect, and make returns of, all taxes levied under the Kansas retailers’ sales tax act and any CID Sales Tax imposed within the District in which Transferee is engaged in such business, all in the manner and at the times prescribed by applicable law. The Transferee shall be obligated to provide the City, along with its submission to the Kansas Department of Revenue, copies of the monthly sales tax returns for its businesses within the Districts. To the extent it may legally do so, information obtained pursuant to this Section shall be kept confidential by the City in accordance with Applicable Law and Requirements, including but not limited to K.S.A. 79-3657. 10.Damage, Destruction or Condemnation. (a)In the event of damage to or destruction of any portion of the Transferee Project (other than the public roads, public right of way and public lands within the Transferee Project) resulting from fire or other casualty during the Term (a “Casualty”), or in the event any portion of the Project Area is condemned or taken for any public or quasi-public use or title thereto is found to be deficient during the Term, the net proceeds of any insurance relating to such damage or destruction, the net proceeds of such condemnation or taking or the net proceeds of any realization on title insurance shall be paid into, and used in accordance with a construction escrow agreement reasonably satisfactory to the City, Transferee, and Transferee’s construction or permanent lender (“Casualty Escrow”). (b)If, at any time during the Term, the Transferee Project or any part thereof (other than the public roads, public right of way and public lands within the Project) shall be damaged or destroyed by a Casualty (the “Damaged Facilities”), Transferee, at its sole cost and expense, shall commence and thereafter proceed as promptly as possible to repair, restore and replace the Damaged Facilities as nearly as possible to their condition immediately prior to the Casualty and shall be entitled to draw upon the Casualty Escrow for payment of said costs. (c)If at any time during the Term, title to the whole or substantially all of the portion of the Project Area owned by Transferee (or its Affiliate) shall be taken in condemnation proceedings or by right of eminent domain, Transferee, at its sole discretion, may terminate this Agreement as of the date of such taking. For purposes of this Section, “substantially all of the Project Area” shall be deemed to have been taken if the City and Transferee, each acting reasonably and in good faith, determine that the untaken portion of the Project Area cannot be practically and economically used by Transferee for the purposes and at the times contemplated by this Agreement. (d)In the event of condemnation of less than the whole or substantially all of the portion of the Project Area owned by the Transferee (or its Affiliate) during the Term, Transferee, at its sole cost and expense, shall commence and thereafter proceed as promptly as possible to repair, restore and replace the remaining part of the Transferee Project, as nearly as possible, to its former condition, and shall be entitled to draw upon the Casualty Escrow for payment of said costs. 12 61037552.5 (e)Nothing in this Section will require the Transferee to expend funds in excess of the Casualty Escrow or to perform any obligation in addition to those obligations contained in the Development Agreement or in this Agreement. 11.Rights of Access and Inspection. (a)Representatives of the City shall have the right of access to the Transferee Project, without charges or fees, at normal construction hours during the period of construction, for the purpose of ensuring compliance with this Agreement, including, but not limited to, the inspection of the work being performed in constructing, renovating, improving, equipping, repairing and installing the Transferee Project, so long as they comply with all safety rules. Except in case of emergency, prior to any such access, such representatives of the City will check in with the on-site manager. Such representatives of the City shall carry proper identification, shall insure their own safety, assuming the risk of injury, and shall not interfere with the construction activity. (b)The Transferee shall maintain complete, accurate, and clearly identifiable records with respect to the Transferee Project, Eligible Transferee Costs and any other documents created pursuant to, or arising under, this Agreement, including, but not limited to, as applicable: all general contractor’s sworn statements, general contracts, subcontracts, material purchase orders, waivers of lien, and paid receipts and invoices (collectively, the “Records”). The Records shall be maintained during the term of this Agreement, and for a period of two (2) years thereafter (the “Retention Period”); provided, however, that if any litigation, claim or audit is commenced prior to the expiration of the Retention Period, then the Retention Period shall be extended until all litigation, claims or audit findings have been completely terminated or resolved, without right of further appeal. (c)During the Retention PeriodFor the period of time beginning with the Effective Date and ending on the date two (2) years after receipt of a Certificate of Completion as defined in Section 3.07 of the Development Agreement, Transferee further agrees that the City, with reasonable advance notice and during normal business hours, shall have the right and authority to review, inspect, audit, and copy, from time to time, all of Transferee’s Records as pertinent to the purposes of, or to ensure compliance with, this Agreement. In addition, Transferee agrees to provide the City with copies of such Records, upon request.The City shall periodically report the findings of such inspections to Master Developer in writing; provided, however, that nothing contained herein shall create an affirmative obligation ofthe Master Developer to perform any inspections of the Transferee Project or evaluate the adequacy of the construction of the Transferee Project. (d)During the Term of this Agreement, the Transferee shall maintain records of all sales tax filings made by Transferee with the Kansas Department of Revenue. The City, with reasonable advance notice and during normal business hours, shall have the right and authority to review, inspect, audit, and copy, from time to time, all of such Transferee’s sales tax filings in connection with ongoing administration of the Public Finance Proceeds. 13 61037552.5 12.Assignment and Transfer of this Agreement. Assignment and transfer of any or all rights, duties or obligations under this Agreement shall be governed by Section 9.03 of the Development Agreement, which is expressly incorporated herein, except that Master Developer approval for any such assignment or transfer shall not be required. 13.Defaults and Remedies. Events of Default and remedies therefore, as well as force majeure or enforced delay circumstances in relation to same, shall be governed by Article VIII of the Development Agreement, which is expressly incorporated herein. 14.Release of Master Developer. To the extent that Transferee has assumed any obligations, terms or conditions of the Master Developer in connection with the Transferee Project under the Development Agreement pursuant to execution of this Agreement, the City hereby specifically agrees to release the Master Developer from such obligations, terms and conditions. 15.Notice. Notice to City and Master Developer shall be as described in the Development Agreement. Notice to Transferee shall be made to the following: To the Transferee: _____________________________ _____________________________ _____________________________ Attn: ________________________ With copies to: _____________________________ _____________________________ _____________________________ _____________________________ Lighthouse Properties III, Inc. Attention: Trace Walker 500 Graves Boulevard Salina, Kansas 67401 tracew@bluebeacon.com With a copy to: Robert Johnson Polsinelli PC 6201 College Boulevard, Suite 500 Overland Park, Kansas 66211 rjohnson@polsinelli.com 17.Time of the Essence. Time is of the essence of this Agreement. The Parties will make every reasonable effort to expedite the subject matters hereof and acknowledge that the 14 61037552.5 successful performance of this Agreement requires their continued cooperation.Required Disclosures. Each Party shall immediately notify the other Party of the occurrence of any material event which would cause any of the information furnished to other Party (by such furnishing Party) in connection with the matters covered in this Agreement to contain any untrue statement of any material fact or to omit to state any material fact required to be stated therein or necessary to make any statement made therein, in the light of the circumstances under which it was made, not misleading. 19.Non-Binding Mediation. If a dispute or controversy arises between the City, MasterDeveloper, or and Transferee under this Agreement, then any Party shall be entitled to request non-binding mediation, and the City, Master Developer, and Transferee agree to participate, in good faith, in any such mediation requested by any other Party. Any request for mediation pursuant to this section shall be made in writing and delivered to the other Parties within thirty (30) days of the action or decision giving rise to the dispute or controversy. The mediation shall occur in Salina, Kansas, and the cost of any such mediation shall be divided equally between the Parties. 20.Tax Implications. The Transferee acknowledges and represents that (1) neither the City nor Master Developer, nor any of theirits officials, employees, consultants, attorneys or other agents has provided to the Transferee any advice regarding the federal or state income tax implications or consequences of this Agreement and the transactions contemplated hereby, and (2) the Transferee is relying solely upon its own tax advisors in this regard. 21.Survival. Notwithstanding the termination of this Agreement, Transferee’s obligations of insurance and indemnification set out herein shall survive the termination of this Agreement to the extent that any incident giving rise to a claim, suit, judgment or demand occurred during Term. 22.Kansas Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Kansas. 23.Counterparts. This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same Agreement. 24.Recordation of Agreement. The Parties agree to execute and deliver a memorandum of this Agreement in proper form for recording in the real property records of Saline County, Kansas, upon the request of a Party. 25.Cash Basis and Budget Laws. The Parties acknowledge and agree that the ability of the City to enter into and perform certain financial obligations pursuant to this Agreement are subject to the K.S.A. 10-1101 et seq. and K.S.A. 79-2935 et seq. 26.Electronic Storage. The Parties agree that the transactions described herein may be conducted and related documents may be received, sent or stored by electronic means. Copies, telecopies, facsimiles, electronic files, and other reproductions of original executed documents shall be deemed to be authentic and valid counterparts of such original documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law. 15 61037552.5 Master Developer Recusal.Transferee acknowledges that Section 3.10 of the Development Agreement prohibits the Master Developer from making or participating in the making of any Transferee Agreement in which the Master Developer or any of its directors, officers, or shareholders hasa substantial interest (as defined in K.S.A. 75-4301a) in the Third- PartyDeveloper entering into such Transferee Agreement. In such event, the City and the Third- PartyDeveloper of such Project Component shall be the only parties which enter into such Transferee Agreement. Any Transferee Agreement the Master Developer makes or participates in making in violation of Section 3.10 of the Development Agreement may be deemed void in part or whole at the reasonable discretion of the City. \[Remainder of page intentionally left blank. Signature pages immediately follow.\] 16 61037552.5 IN WITNESS WHEREOF, the City, Master Developer and Transferee have duly executed this Agreement pursuant to all requisite authorizations as of the date first above written. CITY OF SALINA, KANSAS ________________, Mayor \[SEAL\] ATTEST: Shandi Wicks, CMC, City Clerk APPROVED AS TO FORM: , City Attorney STATE OF KANSAS ) ) ss. COUNTY OF SALINA ) On this _______day of _________________, 201__, ____________________, personally known to me and after first being sworn did state that he/she is the Mayor of the City of Salina, State of Kansas, and that the seal affixed to the foregoing instrument is the official Seal of the City of Salina, and that said instrument was signed and sealed on behalf of the City, and that the matters set forth herein are true and correct to the best of his/her and the City’s knowledge, information and belief, and acknowledge that he executed the same on behalf of the City as its free act and deed. Notary Public My Commission Expires: IN WITNESS WHEREOF, the City, Master Developer and Transferee have duly executed this Agreement pursuant to all requisite authorizations as of the date first above written. MASTERDEVELOPER: SALINA2020, INC., a Kansas corporation By: Trace Walker, __________________ STATE OF KANSAS) ) ss. COUNTY OF ________________) On this _________ day of ____________, 201____, before me personally appeared TraceWalker, to me personally known, who being by me duly sworn did say that he is the ______________ of Salina2020, Inc., and that said instrument was signed and delivered on behalf of said corporation and acknowledged to me that he executed the same as the free act and deed of said corporation. In Testimony Whereof, I have hereunto set my hand and affixed my official seal the day and year first above written. NOTARY PUBLIC My Commission Expires: \[SEAL\] IN WITNESS WHEREOF, the City, Master Developer and Transferee have duly executed this Agreement pursuant to all requisite authorizations as of the date first above written. TRANSFEREE: By: Printed Name: Title: Date: STATE OF _________________ ) ) ss. COUNTY OF _______________ ) On this day of ______________, 201____, before me personally appeared ____________, to me personally known, who being by me duly sworn did say that he/she is the _________________________ of ____________________________, a ______________ _______________________, and that said instrument was signed and delivered on behalf of said __________________________ and acknowledged to me that he/she executed the same as the free act and deed of said ________________________. In Testimony Whereof, I have hereunto set my hand and affixed my official seal the day and year first above written. Notary Public Printed Name: My Commission Expires: EXHIBIT A TO TRANSFEREE AGREEMENT Description of Transferee Project \[SEE ATTACHED\] EXHIBIT B TO TRANSFEREE AGREEMENT Legal Description and Boundary Map \[SEE ATTACHED\] EXHIBIT C-1 TO TRANSFEREE AGREEMENT Critical Path Schedule \[TO BE ATTACHED\] EXHIBIT C-2 TO TRANSFEREE AGREEMENT Project Budget \[TO BE ATTACHED\] TRANSFEREE AGREEMENT THIS TRANSFEREE AGREEMENT (this “Agreement”), is made and entered into this ____ day of ___________, 2018(the “Effective Date”) between and among the CITY OF SALINA, KANSAS, a municipal corporation duly organized under the laws of the State of Kansas (the “City”)and FIB, LLC,aKansas limited liability company(“Transferee”) (collectively, the “Parties”and each a “Party”). RECITALS: A.City and Salina 2020, Inc. (the “MasterDeveloper”)have entered into that certain Development Agreement (the “Development Agreement”) dated as of January 23, 2017 concerning development of a mixed-use project located generally within downtown Salina, Kansas as more specifically described in Section 3.01of the Development Agreement (the “Project”). Capitalized terms which are not otherwise defined herein shall have the meanings assigned to them in the Development Agreement. B.Article IXof the Development Agreement provides for assignment by the City and Master Developer of certain obligations, covenants, and agreements under the Development Agreement to third parties. Accordingly, the City and the Master Developer desire to transfer certain obligations, covenants, and agreements to Transferee in accordance with Article IXwith respect to the portion of the Project described in Exhibit Aattached hereto (the “Transferee Project”). A legal description and boundary map of the location of the Transferee Project is attached as Exhibit Bhereto, which shall hereinafter be referred to as the “Project Area”. C.The Parties desire to enter into this Agreement so that the Transferee shall acknowledge, assume and agree to perform those obligations, covenants and agreements under the Development Agreement (as well asadditional termsdescribed herein)as the same pertain to the design, construction, completion and operation of the Transferee Project. AGREEMENT NOW, THEREFORE, in consideration of the foregoing and in consideration of the mutual covenants and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: 1.Incorporation of Recitals. The parties understand and agree that the Recitals set forth above are hereby incorporated as though more fully set forth herein. 2.Term of Agreement and Master Developer’s Rights. This Agreement shall commence upon the Effective Date and shall terminate uponthat date which is the earlierof (i) either the last dayofthe CID Collection Periodof the Alley Project CID Districtor the date of termination of the STAR Bond Project Plan,whichever occurs later, or (ii) the date that the Transferee has been reimbursed for all Eligible Transferee Costs by Public Finance Proceeds, or (iii) the date this Agreement is terminated pursuant to Section 5or Section 13herein (the “Term”). 60698183.5 3.General Acknowledgement and Assumption. Transferee hereby acknowledges, assumes and agrees to perform each and every obligation, covenant and agreement under the Development Agreement, except as modified below, but only to the extent that the same shall pertain to the design, construction, completion and operation of the Transferee Project, each of which is hereby incorporated as though more fully set forth herein. Transferee hereby understands and agrees that the City may enforce the same directly against Transferee. Notwithstanding the foregoing, the Transferee Project to be completed by the Transferee shall be defined by Exhibit Ato this Agreement, which shall control with regard to description of the Transferee Project. Transferee acknowledges that it has received a copy of the Development Agreement and any amendments thereto, and has reviewed the terms of same with counsel of its own election. 4.Specific Acknowledgement and Assumption. (a)Development Agreement Provisions Assumed by Transferee.In connection with the Transferee Project, Transferee specifically acknowledges, assumes and agrees to perform the following obligations, covenants and agreements,set forth in the Development Agreement, as modified in certain instances below: i.All of the terms and conditions in Article I(Definitions and Rules of Construction). ii.All of the representations and warranties of the Master Developer made in Article II. In addition, Transferee makes the following representations: a.No Material Change. There has been no material adverse change in the business, financial position, prospects or results of operations of the Transferee which could affect the Transferee’s ability to perform its obligations pursuant to the Agreement. b.Compliance with Laws.Transferee, to the best of its knowledge,is in compliance with all valid laws, ordinances, orders, decrees, decisions, rules, regulations and requirements of every duly constituted governmental authority, commission and court applicable to any of its affairs, business, operations as contemplated by this Agreementand the Development Agreement. c.Construction Permits. Except for Permitted Subsequent Approvals, all governmental permits and licenses required by applicable law to construct, occupy and operate the Transferee Project have been issued and are in full force and effect or, if the present stage of development does not allow such issuance,the Transferee reasonably believes, after due inquiry of the appropriate governmental officials, that such permits and licenses will be issued in a timely manner in order to permit the Transferee Project to be constructed. 2 60698183.5 iii.All of the terms and conditions set forth in Article IIIas the same relate to the Transferee Project and rights, duties and obligations of the Third Party Developer of the Transferee Project. iv.All of the terms and conditions set forth in Article IVas the same relate to the Transferee Project and rights, duties and obligations of the Third Party Developer of the Transferee Project. v.All of the terms and conditions set forth in Article VIas the same relate to the Transferee Project and rights, duties and obligations of the Third Party Developer of the Transferee Project. vi.All of the terms and conditions set forth in Article VIIas the same relate to the Transferee Project and rights, duties and obligations of the Third Party Developer of the Transferee Project. vii.All of the terms and conditions set forth in Article VIIIas the same relate to the Transferee Project and rights, duties and obligations of the Third Party Developer of the Transferee Project. viii.All of the terms and conditions set forth in Article IX as the same relate to the Transferee Project and rights, duties and obligations of the Third Party Developer of the Transferee Project. ix.All of the terms and conditions in Article X(General Provisions). (b)Non-Exclusive. Each of the foregoing provisions is hereby incorporated by reference and Transferee hereby understands and agrees that the City may enforce the same against Transferee in connection with the Transferee Project. Further, the Parties understand and agree that if and to the extent the various exhibits attached to the Development Agreement are referenced in the obligations that are acknowledged and assumed by the Transferee, such exhibits are hereby incorporated by reference as though more fully set forth herein. Notwithstanding the foregoing, or any other provisionsof the Development Agreement or this Agreement, the Transferee Project to be completed by the Transferee shall be defined by Exhibit Ato this Agreement, which shall control with regard to description of the Transferee Project. The Transferee acknowledges that the provisions of the Development Agreement referenced in this Section is not exclusive of the provisions of the Development Agreement assumed by Transferee in connection with the Transferee Project, and that Transferee assumes all provisions of theDevelopment Agreement applicable to the Transferee and the Transferee Project regardless of specific inclusion within this Section. (c)Provisions Specifically Not Assumed by Transferee. Notwithstanding anything set forth herein which is seemingly to the contrary, the Partieshereby acknowledge and agreethat Transferee shall have no obligation to perform any of the obligations under the following provisions, nor shall Transferee have any rights related to the following provisions: 3 60698183.5 i.All of the terms and conditions set forth in the Development Agreement regarding development, financing, and operation of (or otherwise applying to) any other Project Component other than the Transferee Project. ii.All of the terms and conditions set forth in Article V(STAR Bond Issuance). 5.Performance Milestones. The Parties hereby agree that construction of the Transferee Project, subject to circumstances set forth in Section 8.08of the Development Agreement, shall be undertaken in accordance with the following schedule (the “Performance Milestones”): (a)Commencement of the Transferee Project. Transferee shall commence construction of the Transferee Project by June 1, 2018.The terms of Section 8.09of the Development Agreement shall apply with regard to any enforced delays whichmay extend time for performance of commencementof the Transferee Project. Commencement of the Transferee Project shall mean: i.Closing of the acquisition of the real property upon which the Transferee Project will be constructed; ii.A construction permit, and all other permits required pursuant to the City codes and ordinances, necessary for the commencement of construction or provision of the Transferee Project; iii.Certificates evidencing that insurance policies have been procured by Transferee for all insurance required pursuant to Section 7of this Agreement; iv.A copy of an executed guaranteed maximum price contract between Transferee and its general contractor for the construction and completion of the Transferee Project (or equivalent agreement in the reasonable discretion of the City), evidence that such general contractor is a registered contractor in good standing in the City of Salina, Kansas, the State of Kansas, and its state of domicile, and copies of performance, labor, and material payment bonds in connection with the Transferee Project (unless City provides notice to the Transferee that such performance, labor and material payment bond are not required); v.Documents reasonably satisfactory to the City that Transferee has obtained financing adequate to fully and finally construct and develop the Transferee Project in accordance with the critical path schedule and final project budget; vi.A critical path schedule and final project budget reasonably consistent with the preliminary project budget for the development and construction of the Transferee Project, and agreement upon the same by Transferee and the City Representative (to be supplemented and attached hereto as Exhibit C-1and Exhibit C-2, respectively); 4 60698183.5 vii.Any and all other materials reasonably requested by the City evidencing the ability of Transferee to imminently commence construction of the Transferee Project with the capability to fully and finally complete the Transferee Project with diligence, which may include, without limitation, elevations, marketing materials, financing information, and business plans; viii.Transferee’s undertaking of a continuous and uninterrupted program of construction for such Transferee Project. (b)Construction of the Transferee Project.Transferee shall construct the Transferee Project in agood and workmanlike manner in accordance with the terms of this Agreement and the Development Agreement. Upon reasonable advance notice, the Transferee shall meet with the City to review and discuss the design and construction of the Transferee Project in order to enable the City to monitor the status of construction and to determine that the Transferee Project is being performed and completed in accordance with this Agreement and the Development Agreement. (c)Completion of the Transferee Project. The Transferee shall cause the Transferee Project to be completed with due diligence. Transferee shall complete construction of the Transferee Project by July 31, 2019.The terms of Section 8.09of the Development Agreement shall apply with regard to any enforced delays which may extend time for performance of completion of the Transferee Project.Completion of the Transferee Project shall mean receipt of a Certificate of Completion as defined in Section3.07of the Development Agreement. (d)Failureto Comply with Performance Milestones. i.Failure to Timely Commence or Complete the Project. In the event that Transferee shall fail to meet any of the Performance Milestones set forth in this Section, then the City may require Transferee to appear before the City to show cause as to why Transferee failed to comply with the Performance Milestones. If Transferee cannot show cause for the delay which is reasonably satisfactory to the City, the City may exercise any or all of the following remedies: a.Failure to Timely Commence. In the event Transferee does not commence the Transferee Project within 90 days following the commencement date identified in Section 5(a)herein, the City may provide written notice to Transferee of its election to reduce the Public Financing Cap described in Section 6(b)herein by twenty-five percent (25%),unless otherwise providedby the Cityin its reasonable discretion. In the event Transferee does not commence the Transferee Project within 120days following the commencement date identified in Section 5(a)herein, the City may provide written notice to Transferee of its election to cumulatively reduce the Public Financing Cap described in Section 6(b)herein by fiftypercent (50%),unless otherwise provided by the City in its reasonable discretion. In the event Transferee does not commence the Transferee Project within 180 days following the commencement 5 60698183.5 date identified in Section 5(a)herein, the City may provide written notice to Transferee of its election toterminate the rights, duties and obligations of Transferee under the Development Agreement and this Agreementunless otherwise providedby the City in its reasonable discretion.The City shall provide written notice to the Transferee of its intent to pursue the penalties contained in this Section 5(d)a minimum of twenty (20) business days prior to providing notice to Transferee of such penalties as described herein. Each of the deadlines described in this section shall be subject to extensions of time as set forth inSection 8.09of the Development Agreement. In the event the City provides notice to the Transferee of a reduction to its Public Financing Cap pursuant to this section, the City may elect, in its reasonable discretion, to provide Transferee written notice of an extension of the completion deadline contained in Section 5(c). b.Failure to Timely Complete. In the event Transferee does not complete the Transferee Project within 90 days following the completion date identified in Section 5(c)herein, the Citymay provide written notice to Transferee of its election to reduce the Public Financing Cap described in Section 6(b)herein by twenty-five percent (25%), unless otherwise providedby the City in its reasonable discretion. In the event Transferee does notcomplete the Transferee Project within 120days following the completion date identified in Section 5(c)herein, the Citymay provide written notice to Transferee of its election to cumulatively reduce the Public Financing Cap described in Section 6(b)herein by fiftypercent (50%), unless otherwise providedby the Cityin its reasonable discretion. In the event Transferee does not complete the Transferee Project within 180 days following the completion date identified in Section 5(c) herein, the City mayprovide written notice to Transferee of its election to terminate the rights, duties and obligations of Transferee under the Development Agreement and this Agreement, unless otherwise providedby the City in its reasonable discretion.The City shall provide written notice to the Transferee of its intent to pursue the penalties contained in this Section 5(d)a minimum of twenty (20) business days prior to providing notice to Transferee of such penalties as described herein. Each of the deadlines describedin this section shall be subject to extensions of time as set forth in Section 8.09of the Development Agreement. ii.Rights and Remedies Cumulative. Except as otherwise expressly stated in this Agreement or the Development Agreement, the rights and remedies of the parties are cumulative, and the exercise by a party of one or more of such rights or remedies under this Agreement or the Development Agreement (pursuant to Section 13herein) shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. iii.Delay Caused by Streetscape Construction.In no event shall the City pursue any remedies contained in this section for delays in commencement or completion of the Transferee Project directly caused by construction of any 6 60698183.5 Streetscape and Public Infrastructure Improvements or City obligations contained in Section 3.03(D) of the Development Agreement (collectively, the “City Work”). In the event of delays in the commencement or completion of the Transferee Project directly caused by construction or performance of the City Work, the obligations of the Transferee to commence or complete the Transferee Project shall be delayed an amount of time equivalent to the period of delay directly caused by construction or performance of the City Work. In such event the Transferee shall provide written documentation tothe City that evidences that the delay in such City Work will or has directly resulted in the delay of commencement or completion of the Transferee Project. 6.Public Finance Proceedsand City Funds. (a)Conditions Precedent to Access to Public Finance Proceeds. Prior to access to Public Finance Proceeds for purposes of partially financing the Transferee Project and the right to submita Certification of Expenditures for reimbursement for Eligible Transferee Costs through Public Finance Proceeds pursuantto the provisions of the Development Agreement, Transferee must have obtained a Certificate of Completion for the Transferee Project as defined in Section 3.07of the Development Agreement(the “Public Finance AccessCondition”). (b)Public Financing Cap. Following Transferee’s satisfaction of the Public Finance Access Condition, City will provide Transfereeaccess to 1) STAR Bond Proceeds in the amount of $1,642,726 from the STAR Bond Project Fund(subject to Section 6(c) herein)and 2) Alley Project CID Proceeds from the Alley Project CID Sales TaxFund to be used by Transfereesolely for financing those costs of the Transferee Projectas identified in the column labeled STAR Bond Usesand CID Uses, respectively, in the Project Budget attached as ExhibitC-2(collectively, the “Eligible Transferee Costs”), in all cases subject to and in accordance with the terms of the Development Agreement, this Agreement,the Bond Trust Indenture,and Kansas law (the “Public Financing Cap”). Transferee hereby acknowledgesand agrees theAlley Project CID Proceedsshall be available to Transferee on a pay-as-you-go basis in accordance with the terms of the Development Agreement and that City and Master Developer do not guarantee any specific amount of Public Finance Proceeds will actually be available to Transferee for reimbursement of Eligible Transferee Costs. Further, Transferee hereby acknowledges and agrees itshall not commence or join anycause of action or other legal recourse under thisAgreement, the DevelopmentAgreement,or in law or equity against City or Master Developer (and acknowledges that it possesses no such cause of action or legal recourse) in the event Transferee receives reimbursement for Eligible Transferee Costs through Public Finance Proceeds in an amount less than Transferee’s Public Financing Cap.In the event City Funds shall be made available to Transferee to partially finance the Transferee Project pursuant to the terms of this Agreement, City agrees and acknowledges that City shall provide to Transferee (pursuant to the process described in Article VIof the Development Agreement) such full amount of City Funds identified herein so long as Transferee is in compliance with all terms of this Agreement and the Development Agreement. All costs of developing the Transferee Project, including Eligible Transferee Costs, in excess of the Public Finance Proceeds and City Funds 7 60698183.5 actually received by Transfereeshall be the sole responsibility of Transferee. In order to access such STAR Bond Proceedsand Alley Project CID Proceeds,Transfereeshall submitCertificationsof Expendituresto the Cityin a manner consistent with Article VI of the Development Agreementand a Project Fund Disbursement Request form in a manner consistent with the termsof that certain Bond Trust Indenture. (c)STAR Bonds. The City expects to issue STAR Bonds to provide STAR Bond Proceeds for use in reimbursing costs of the Transferee Project, among other Project Components, and has engaged the Underwriter to underwrite the STAR Bonds. The Underwriter has advised the City that various representations, warranties and assurances from the Transferee may be required to assure investors in the STAR Bonds that the Transferee Project will be constructed and opened in a timely manner. Transferee hereby acknowledges and agrees that the timing of, access to and the amount of any STAR Bond Proceeds to be made available to Transferee is dependent on the City’s ability to issue the STAR Bonds on terms that are commercially reasonable to the City and the Underwriter’s ability to successfully underwrite such STAR Bonds. To the extent required by the Underwriter, the Transferee agrees to provide the information in form and substance reasonably requested by the Underwriter, including, butnot limited to, the following for the Transferee Project: (i) guaranteed maximum price construction contract or other equivalent agreement for construction services, as appropriate, (ii) payment and performance bonds or other similar indicia of security for completion of the Transferee Project, (iii) insurance policies, (iv) evidence of availability of loan and equity funds necessary for the timely completion of the Transferee Project, which may be provided pursuant to a letter for commitment to finance the Transferee Project issued by a qualified lender; (v) any leases or contracts for any applicable portion of the Transferee Project and (vi) cooperation in calculation of the sales tax for any portion of the Transferee Project that willgenerate taxable retail sales. (d)Public Finance Limitation. i.In addition to the foregoing conditions applicable to the disbursement of STAR Bond Proceeds and Alley ProjectCID Proceeds to the Transferee, the STAR Bond Proceedsand Alley Project CID Proceedsavailable to Transferee for reimbursement of Eligible Transferee Costs shall not exceed fiftypercent (50%) of the amount of the actual costs expended by Transferee to develop the Transferee Project (“Total Project Costs”). The remainder of all Total Project Costs, in an amount no less than fiftypercent (50%) of such Total Project Costs, shall be paid by Transferee through a combination of private debt and equity (the “Private Contribution”). In other words, there shall not be more than 50%of Total Project Costs paid with a combination of STAR Bond Proceeds and Alley Project CID Proceeds(the “Public Finance Limitation”). ii.The Certification of Expenditures submitted by Transferee shall include evidence of payment for Total Project Costs paid with the Private Contribution in an amount which is no less than fifty percent (50%)of the Total Project Costs incurred at the time of such Certification of Expenditures in order to satisfy the Public Finance Limitation. In other words, the cumulative amount of 8 60698183.5 Total Project Costs included in the Certification of Expenditures from the Private Contribution must equal no less than fifty percent (50%)of the cumulative amount of Total Project Costs in order for 50%of such Total Project Costs to be eligible for reimbursement through a combination of STAR Bond Proceeds and Alley Project CID Proceeds. 7.Insurance.Each Third Party Developer shall keep the Transferee Project continuously insured against such risks and in such amounts, with such deductible provisions as are customary in connection with the operation of facilities of the type and size comparable to the Transferee Project. 8.Indemnification of City and Master Developer.Transferee agrees to indemnify and hold the City and Master Developer, and the employees, agents and independent contractors and consultants of the City and the Master Developer (collectively, the “Indemnified Parties”) harmless from and against any and all suits, claims, costs of defense, damages, injuries, liabilities, judgments, costs and/or expenses, includingcourt costs and reasonable attorneys’fees, resulting from, arising out of, or in any way connected with: (a)Transferee’s actions and undertaking in implementation of the Transferee Project, the Development Agreement, this Agreement, and the STAR Bond Project Plan and Alley Project CID Petition; (b)the negligence or willful misconduct of Transferee, its employees, agents or independent contractors and consultants in connection with the management, design, development, redevelopment and construction of the Transferee Project; and (c)any delay or expense resulting from any litigation filed against Transferee by any member or shareholder of Transferee, any prospective investor, prospective partner or joint venture partner, lender, co-proposer, architect, contractor, consultant or other vendor. This Section shall not apply to willful misconduct or gross negligence of the City or Master Developer or the officers, employees or agents of City or Master Developer. This Section includes, but is not limited to, any repair, cleanup, remediation, detoxification, or preparation and implementation of any removal, remediation, response, closure or other plan (regardless of whether undertaken due to governmental action) concerning any hazardous substance or hazardous wastes including petroleum and its fractions as defined in (i) the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”; 42 U.S.C. Section9601,et seq.), (ii) the Resource Conservation and Recovery Act (“RCRA”; 42 U.S.C. Section 6901 et seq.) and (iii) Article 34, Chapter 65, K.S.A. and all amendments thereto, at any place where such Transferee owns or has control of real property pursuant to any of Transferee’s activities under the Development Agreement and this Agreement. The foregoing indemnity is intended to operate as an agreement pursuant to Section 107(e) of CERCLA to assure, protect, hold harmless and indemnify City and Master Developer from liability. 9.Payment of Taxes and Liens. Transferee hereby agrees as follows: 9 60698183.5 (a)Payment of Property Taxes. During the Term of this Agreement, Transferee and its respective Affiliates shall pay when due all real estate taxes and assessments on the property it owns within the Districts. However, the obligation to pay real estate taxes and assessments on such property shall not be a personal obligation of the Transferee and its respective Affiliates but are subject to the same provisions related to enforcement and collection of real estate taxes and assessments under laws of the State. In the event that the Transferee or its Affiliates shall fail to pay all such applicable real estate taxes and assessments after any notice and cure periods set forth in Section 8.02of the Development Agreement, the Transferee understands and agrees that, among other things, the City may (i) terminate financing of the Transferee Project through Public Finance Proceeds,(ii) suspend all reimbursements of Eligible Transferee Costs through Public Finance Proceeds during any time that such real estate taxes and assessments on the property owned by Transferee and its respective affiliates within the Districts remain unpaidor (iii) exercise any other remedies under this Agreement and/or the Development Agreement.Notwithstanding the foregoing, nothing contained in this Agreement shall prohibit the Transferee and its respective affiliates from contesting the assessed value of the properties, improvements or the taxes thereon in good faith by appropriate proceedings; provided however that each such party shall pay any and all amounts that are contested under protest while any such proceedings are pending. The Transferee and its respective affiliates shall promptly notify the City in writing of a protest of real estate taxes or valuation of property owned by the Transferee or its respective affiliates within the Districts. (b)Liens. Transferee and its respective affiliates further agree that no mechanics’or other liens shall be established or remain against the Transferee Project or the property within the Districts, or the funds in connection with any of the Transferee Project, for labor or materials furnished in connection with any acquisition, construction, additions, modifications, improvements, repairs, renewals or replacements so made. However, Transferee shall not be in default if mechanics’or other liens are filed or established and theTransferee and its respective Affiliates contests in good faith said mechanics’liens and in such event may permit the items so contested to remain undischarged and unsatisfied during the periodof such contest and any appeal therefrom. (c)Sales Tax Collection.If Transfereeis engaged in the business of selling tangible personal property at retail or rendering or furnishing services taxable pursuant to the provisions of the Kansas retailers’ salestax act and amendments thereto (K.S.A. 79-3601et seq.) within any of the Districts, Transfereeshall collect, and make returns of, all taxes levied under the Kansas retailers’ sales tax actandany CID Sales Tax imposed within the District in which Transfereeis engaged in such business, all in the manner and at the timesprescribed by applicable law. The Transfereeshall be obligated to provide the City, along with itssubmission to the Kansas Department of Revenue, copies of the monthly sales tax returns for itsbusinesses within the Districts. To the extent it may legally do so, information obtained pursuant to this Section shall be kept confidential by the City in accordance with Applicable Law and Requirements, including but not limited to K.S.A. 79-3657. 10.Damage, Destruction or Condemnation. 10 60698183.5 (a)In the event of damage to or destruction of any portion of the Transferee Project (other than the public roads, public right of way and public lands within the Transferee Project) resulting from fire or other casualty during the Term (a “Casualty”), or in the event any portion of the Project Area is condemned or taken for any public or quasi-public use or title thereto is found to be deficient during the Term, the net proceeds of any insurance relating to such damage or destruction, the net proceeds of such condemnation or taking or the net proceeds of any realization on title insurance shall be paid into, and used in accordance with a construction escrow agreement reasonably satisfactory to the City, Transferee, and Transferee’s construction or permanent lender (“Casualty Escrow”). (b)If, at any time during the Term, the Transferee Project or any part thereof (other than the public roads, public right of way and public lands within the Project) shall be damaged or destroyed by a Casualty (the “Damaged Facilities”), Transferee, at its sole cost and expense, shall commence and thereafter proceed as promptly as possible to repair, restore and replace the Damaged Facilities as nearly as possible to their condition immediately prior to the Casualty and shall be entitled to draw upon the Casualty Escrow for payment of said costs. (c)If at any time during the Term, title to the whole or substantially all of the portion of the Project Area owned by Transferee (or its Affiliate) shall be taken in condemnation proceedings or by right of eminent domain, Transferee, at its sole discretion, may terminate this Agreement as of the date of such taking. For purposes of this Section, “substantially all of the Project Area” shall be deemed to have been taken if the City and Transferee, each acting reasonably and in good faith, determine that the untaken portion of the Project Area cannot be practically and economically used by Transferee for the purposes and at the times contemplated by this Agreement. (d)In the event of condemnation of less than the whole or substantially all of the portion of the Project Area owned by the Transferee (or its Affiliate) during the Term, Transferee, at its sole cost and expense, shall commence and thereafter proceed as promptly as possible to repair, restore and replace the remaining part of the Transferee Project, as nearly as possible, to itsformer condition, and shall be entitled to draw upon the Casualty Escrow for payment of said costs. (e)Nothing in this Section will require the Transferee to expend funds in excess of the Casualty Escrow or to perform any obligation in addition to those obligations contained in the Development Agreement or in this Agreement. 11.Rights of Access and Inspection. (a)Representatives of the City shall have the right of access to the Transferee Project, without charges or fees, at normal construction hours during the period of construction, for the purpose of ensuring compliance with this Agreement, including, but not limited to, theinspection of the work being performed in constructing, renovating, improving, equipping, repairing and installing the Transferee Project, so long as they comply with all safety rules. Except in case of emergency, prior to any such access, such 11 60698183.5 representatives of the City will check in with the on-site manager. Such representatives of the City shall carry proper identification, shall insure their own safety, assuming the risk of injury, and shall not interfere with the construction activity. (b)The Transferee shall maintain complete, accurate, and clearly identifiable records with respect to the Transferee Project, Eligible Transferee Costs and any other documents created pursuant to, or arising under, this Agreement, including, but not limited to, as applicable: all general contractor’s sworn statements, general contracts, subcontracts, material purchase orders, waivers of lien, and paid receipts and invoices (collectively, the “Records”). The Records shall be maintained during the term of this Agreement,and for a period of two (2) years thereafter (the “Retention Period”); provided, however, that if any litigation, claim or audit is commenced prior to the expiration of the Retention Period, then the Retention Period shall be extended until all litigation, claims or audit findings have been completely terminated or resolved, without right of further appeal. (c)For the period of time beginning with the Effective Date and ending on the date two (2) years after receipt of a Certificate of Completion as defined in Section 3.07 of the Development Agreement, Transferee further agrees that the City, with reasonable advance notice and during normal business hours, shall have the right and authority to review, inspect, audit, and copy, from time to time, all of Transferee’s Records as pertinent to the purposes of, or to ensure compliance with, this Agreement. In addition, Transferee agrees to provide the City with copies of such Records, upon request. (d)During the Term of this Agreement, the Transferee shall maintain records of all sales tax filings made by Transferee with the Kansas Department of Revenueand supporting documentation. The City, with reasonable advance notice and during normal business hours, shall have the right and authority to review, inspect, audit, and copy, from time to time, all of such Transferee’s sales tax filings and supporting documentation in connection with ongoing administration of the Public Finance Proceeds. 12.Assignment and Transfer of this Agreement. Assignment and transfer of any or all rights, duties or obligations under this Agreement shall be governed by Section 9.03of the Development Agreement, which is expressly incorporated herein, except that Master Developer approval for any such assignment or transfer shall not be required. 13.Defaults and Remedies. Events of Default and remedies therefore, as well as force majeureor enforced delaycircumstances in relation to same,shall be governed by Article VIII of the Development Agreement, which is expressly incorporated herein. 14.Release of Master Developer. To the extent that Transferee has assumed any obligations, terms or conditions of the Master Developer in connection with the Transferee Project under the Development Agreement pursuant to execution of this Agreement, the City hereby specifically agrees to release the Master Developer from suchobligations, terms and conditions. 12 60698183.5 15.Notice. Notice to City and Master Developer shall be as described in the Development Agreement. Notice to Transferee shall be made to the following: To the Transferee: FIB, LLC 3200 N. Rock Road Wichita, KS 67226 Attn: Cathy DeSocio Email: desocioca@aol.com With copies to: Triplett Woolf Garretson, LLC 2959 N. Rock Road, Suite 300 Wichita, KS 67226 Attention: Ron H. Harnden Email: rharnden@twgfirm.com 16.Time of the Essence.Time is of the essence of this Agreement. The Parties will make every reasonable effort to expedite the subject matters hereof and acknowledge that the successful performance of this Agreement requires their continued cooperation.Required Disclosures.Each Party shall immediately notify the other Party of the occurrence of any material event which would cause any of the information furnished to other Party (by such furnishing Party) in connection with the matters covered in this Agreement to contain any untrue statement of any material fact or to omit to state any material fact required to be stated thereinor necessary to make any statement made therein, in the light of the circumstances under which it was made, not misleading. 18.Non-Binding Mediation. If a dispute or controversy arises between the City, and Transferee under this Agreement, then any Party shall be entitled to request non-binding mediation, and the Cityand Transferee agree to participate, in good faith, in any such mediation requested by any other Party. Any request for mediation pursuant to this section shall be made in writing and delivered to the other Parties within thirty (30) days of the action or decision giving rise to the dispute or controversy. The mediation shall occur in Salina, Kansas, and the cost of any such mediation shall be divided equally between the Parties. 19.Tax Implications. The Transfereeacknowledges and represents that (1) neither the City nor any of itsofficials, employees, consultants, attorneys or other agents has provided to the Transfereeany advice regarding the federal or state income tax implications or consequences of this Agreement and the transactions contemplated hereby, and (2) the Transfereeis relying solely upon its own tax advisors in this regard. 20.Survival. Notwithstanding thetermination of this Agreement, Transferee’s obligations of insurance and indemnification set out herein shall survive the termination of this Agreement to the extent that any incident giving rise to a claim, suit, judgment or demand occurred during Term. 13 60698183.5 21.Kansas Law.This Agreement shall be governed by and construed in accordance with the laws of the State of Kansas. 22.Counterparts. This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same Agreement. 23.Recordation of Agreement. The Parties agree to execute and deliver a memorandum of this Agreement in proper form for recording in the real property records of Saline County, Kansas, upon the request of a Party. 24.Cash Basis and Budget Laws. The Parties acknowledge and agree that the ability of the City to enter into and perform certain financial obligations pursuant to this Agreement are subject to the K.S.A. 10-1101et seq. and K.S.A. 79-2935et seq. 25.Electronic Storage.TheParties agree that the transactions described herein may be conducted and related documents may be received, sent or stored by electronic means. Copies, telecopies, facsimiles, electronic files, and other reproductions of original executed documents shall be deemed to be authentic and valid counterparts of such original documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law. \[Remainder of page intentionally left blank. Signature pages immediately follow.\] 14 60698183.5 IN WITNESS WHEREOF, the City, Master Developer and Transferee have duly executed this Agreement pursuant to all requisite authorizations as of the date first above written. CITY OF SALINA, KANSAS ________________,Mayor \[SEAL\] ATTEST: Shandi Wicks, CMC, City Clerk APPROVED AS TO FORM: , City Attorney STATE OF KANSAS) ) ss. COUNTY OF SALINA) Onthis _______day of _________________, 201__, ____________________, personally known to me and after first being sworn did state that he/sheis the Mayorof the City of Salina, State of Kansas, and that the seal affixed to the foregoing instrument is the official Seal of the City of Salina, and that said instrument was signed and sealed on behalf of the City, and that the matters set forth herein are true and correct to the best of his/herand the City’s knowledge, information and belief, and acknowledge that he executed the same on behalf of the City as its free act and deed. Notary Public My Commission Expires: 60698183.5 IN WITNESS WHEREOF, the City, Master Developer and Transferee have duly executed this Agreement pursuant to all requisite authorizations as of the date first above written. TRANSFEREE: By: Printed Name: Title: Date: STATE OF _________________) ) ss. COUNTY OF _______________) On this day of ______________, 201____, before me personally appeared ____________, to me personally known, who being by me duly sworn did say that he/she is the _________________________ of ____________________________, a ______________ _______________________, and that said instrument was signed and delivered on behalf of said __________________________ and acknowledged to me that he/she executed the same as the free act and deed of said ________________________. In Testimony Whereof, I have hereunto set my hand and affixed my official seal the day and year first above written. Notary Public Printed Name: My Commission Expires: 60698183.5 EXHIBIT A TO TRANSFEREE AGREEMENT Description of Transferee Project \[SEE ATTACHED\] 60698183.3 61529645.1 40' 20' CITY ALLEY WAY 10' CITY ALLEY WAY TRASH/ELEC./GREASE 6 LANES BOWLING BOUTIQUE 20 LANES BOWLING MASONRY TRASH ENCLOSURE TOMATCH BUILDING MATERIALS LANDSCAPED AREA APPROX. 40,000 SF THE ALLEY W D AND GAMES 5TH STREET SANTA FE 6000 - 7000 SF ATTRACTIONS DINING LANDSCAPED AREA OUTDOOR PATIO LANDSCAPED AREALANDSCAPED AREA DROP OFF ASH STREET EXHIBIT C-1 TO TRANSFEREE AGREEMENT Critical Path Schedule \[TO BE ATTACHED\] 60698183.3 EXHIBIT C-2 TO TRANSFEREE AGREEMENT Project Budget \[TO BE ATTACHED\] 60698183.3 TRANSFEREE AGREEMENT THIS TRANSFEREE AGREEMENT (this “Agreement”), is made and entered into this ____ day of ___________, 20___2018 (the “Effective Date”) between and among the CITY OF SALINA, KANSAS, a municipal corporation duly organized under the laws of the State of Kansas (the “City”),SALINA 2020, INC.,a Kansas corporation (the “Master Developer”) and ________________________,a ____________________”) and FIB, LLC,a Kansas limited liability company (“Transferee”) (collectively, the “Parties” and each a “Party”). RECITALS: A. City and Salina 2020, Inc. (the “Master Developer”) have entered into that certain Development Agreement (the “Development Agreement”) dated as of January 23, 2017 concerning development of a mixed-use project located generally within downtown Salina, Kansas as more specifically described in Section 3.01 of the Development Agreement (the “Project”). Capitalized terms which are not otherwise defined herein shall have the meanings assigned to them in the Development Agreement. B. Article IX of the Development Agreement provides for assignment by the City and Master Developer of certain obligations, covenants, and agreements under the Development Agreement to third parties. Accordingly, the City and the Master Developer desire to transfer certain obligations, covenants, and agreements to Transferee in accordance with Article IX with respect to the portion of the Project described in Exhibit A attached hereto (the “Transferee Project”). A legal description and boundary map of the location of the Transferee Project is attached as Exhibit B hereto, which shall hereinafter be referred to as the “Project Area”. C. The Parties desire to enter into this Agreement so that the Transferee shall acknowledge, assume and agree to perform those obligations, covenants and agreements under the Development Agreement (as well as additional terms described herein) as the same pertain to the design, construction, completion and operation of the Transferee Project. AGREEMENT NOW, THEREFORE, in consideration of the foregoing and in consideration of the mutual covenants and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: 1.Incorporation of Recitals. The parties understand and agree that the Recitals set forth above are hereby incorporated as though more fully set forth herein. 2.Term of Agreement and Master Developer’s Rights. This Agreement shall commence upon the Effective Date and shall terminate upon that date which is the earlier of (i) either the last day of the \[TIF Collection Period/CID Collection Period/ of the Alley Project CID District or the date of termination of the STAR Bond Project Plan\],, whichever occurs later, or (ii) the date that the Transferee has been reimbursed for all Eligible Transferee Costs by Public Finance Proceeds, or (iii) the date this Agreement is terminated pursuant to Section 5 or Section 13 herein (the “Term”).Notwithstanding the foregoing, the Master Developer’s rights, duties, 60698183.5 and obligations under this Agreement shall expire on the date of the Certificate of Full Completion for the Transferee Project. 3.General Acknowledgement and Assumption. Transferee hereby acknowledges, assumes and agrees to perform each and every obligation, covenant and agreement under the Development Agreement, except as modified below, but only to the extent that the same shall pertain to the design, construction, completion and operation of the Transferee Project, each of which is hereby incorporated as though more fully set forth herein. Transferee hereby understands and agrees that the City or Master Developer may enforce the same directly against Transferee. Notwithstanding the foregoing, the Transferee Project to be completed by the Transferee shall be defined by Exhibit A to this Agreement, which shall control with regard to description of the Transferee Project. Transferee acknowledges that it has received a copy of the Development Agreement and any amendments thereto, and has reviewed the terms of same with counsel of its own election. 4.Specific Acknowledgement and Assumption. (a)Development Agreement Provisions Assumed by Transferee. In connection with the Transferee Project, Transferee specifically acknowledges, assumes and agrees to perform the following obligations, covenants and agreements, set forth in the Development Agreement, as modified in certain instances below: i.All of the terms and conditions in Article I (Definitions and Rules of Construction). ii.All of the representations and warranties of the Master Developer made in Article II. In addition, Transferee makes the following representations: a.No Material Change. There has been no material adverse change in the business, financial position, prospects or results of operations of the Transferee which could affect the Transferee’s ability to perform its obligations pursuant to the Agreement. b.Compliance with Laws. Transferee, to the best of its knowledge, is in compliance with all valid laws, ordinances, orders, decrees, decisions, rules, regulations and requirements of every duly constituted governmental authority, commission and court applicable to any of its affairs, business, operations as contemplated by this Agreement and the Development Agreement. c.Construction Permits. Except for Permitted Subsequent Approvals, all governmental permits and licenses required by applicable law to construct, occupy and operate the Transferee Project have been issued and are in full force and effect or, if the present stage of development does not allow such issuance, the Transferee reasonably believes, after due inquiry of the appropriate governmental officials, that such permits and licenses will be issued 2 60698183.5 in a timely manner in order to permit the Transferee Project to be constructed. iii.All of the terms and conditions set forth in Article III as the same relate to the Transferee Project and rights, duties and obligations of the Third- Party Developer of the Transferee Project. iv.All of the terms and conditions set forth in Article IV as the same relate to the Transferee Project and rights, duties and obligations of the Third- Party Developer of the Transferee Project. v.All of the terms and conditions set forth in Article VI as the same relate to the Transferee Project and rights, duties and obligations of the Third- Party Developer of the Transferee Project. vi.All of the terms and conditions set forth in Article VII as the same relate to the Transferee Project and rights, duties and obligations of the Third- Party Developer of the Transferee Project. vii.All of the terms and conditions set forth in Article VIII as the same relate to the Transferee Project and rights, duties and obligations of the Third- Party Developer of the Transferee Project. viii.All of the terms and conditions set forth in Article IX as the same relate to the Transferee Project and rights, duties and obligations of the Third- Party Developer of the Transferee Project. ix.All of the terms and conditions in Article X (General Provisions). (b)Non-Exclusive. Each of the foregoing provisions is hereby incorporated by reference and Transferee hereby understands and agrees that the City or Master Developermay enforce the same against Transferee in connection with the Transferee Project. Further, the Parties understand and agree that if and to the extent the various exhibits attached to the Development Agreement are referenced in the obligations that are acknowledged and assumed by the Transferee, such exhibits are hereby incorporated by reference as though more fully set forth herein. Notwithstanding the foregoing, or any other provisions of the Development Agreement or this Agreement, the Transferee Project to be completed by the Transferee shall be defined by Exhibit A to this Agreement, which shall control with regard to description of the Transferee Project. The Transferee acknowledges that the provisions of the Development Agreement referenced in this Section is not exclusive of the provisions of the Development Agreement assumed by Transferee in connection with the Transferee Project, and that Transferee assumes all provisions of the Development Agreement applicable to the Transferee and the Transferee Project regardless of specific inclusion within this Section. (c)Provisions Specifically Not Assumed by Transferee. Notwithstanding anything set forth herein which is seemingly to the contrary, the Parties hereby acknowledge and agree that Transferee shall have no obligation to perform any of the 3 60698183.5 obligations under the following provisions, nor shall Transferee have any rights related to the following provisions: i.All of the terms and conditions set forth in the Development Agreement regarding development, financing, and operation of (or otherwise applying to) any other Project Component other than the Transferee Project. ii.All of the terms and conditions set forth in Article V (STAR Bond Issuance). 5.Performance Milestones. The Parties hereby agree that construction of the Transferee Project, subject to circumstances set forth in Section 8.08 of the Development Agreement, shall be undertaken in accordance with the following schedule (the “Performance Milestones”): (a)Commencement of the Transferee Project. Transferee shall commence construction of the Transferee Project by \[_____________________\].June 1, 2018. The terms of Section 8.09 of the Development Agreement shall apply with regard to any enforced delays which may extend time for performance of commencement of the Transferee Project. Commencement of the Transferee Project shall mean: i.Closing of the acquisition of the real property upon which the Transferee Project will be constructed; ii.A construction permit, and all other permits required pursuant to the City codes and ordinances, necessary for the commencement of construction or provision of the Transferee Project; iii.Certificates evidencing that insurance policies have been procured by Transferee for all insurance required pursuant to Section 7 of this Agreement; iv.A copy of an executed guaranteed maximum price contract between Transferee and its general contractor for the construction and completion of the Transferee Project (or equivalent agreement in the reasonablediscretion of the Cityand the Master Developer), evidence that such general contractor is a registered contractor in good standing in the City of Salina, Kansas, the State of Kansas, and its state of domicile, and copies of performance, labor, and material payment bonds in connection with the Transferee Project (unless City and Master Developer agree otherwise in their joint discretionprovides notice to the Transferee that such performance, labor and material payment bond are not required); v.Documents reasonably satisfactory to the Cityand Master Developer that Transferee has obtained financing adequate to fully and finally construct and develop the Transferee Project in accordance with the critical path schedule and final project budget; 4 60698183.5 vi.A critical path schedule and final project budget reasonably consistent with the preliminary project budget for the development and construction of the Transferee Project, and agreement upon the same by Transferee, and the City Representative, and Master Developer (to be supplemented and attached hereto as Exhibit C-1 and Exhibit C-2, respectively); Any and all other materials reasonably requested by the City and Master Developerevidencing the ability of Transferee to imminently commence construction of the Transferee Project with the capability to fully and finally complete the Transferee Project with diligence, which may include, without limitation, elevations, marketing materials, financing information, and business plans; vii.\[For New Business TIF Requests and Retail Improvement Requests–A copy of an executed leasewith any proposed tenant or, if Transferee is a tenant, a copy of its lease with the landlord\]; viii.Transferee’s undertaking of a continuous and uninterrupted program of construction for such Transferee Project. (b)Construction of the Transferee Project. Transferee shall construct the Transferee Project in a good and workmanlike manner in accordance with the terms of this Agreement and the Development Agreement. Upon reasonable advance notice, the Transferee shall meet with the City to review and discuss the design and construction of the Transferee Project in order to enable the City to monitor the status of construction and to determine that the Transferee Project is being performed and completed in accordance with this Agreement and the Development Agreement. (c)Completion of the Transferee Project. The Transferee shall cause the Transferee Project to be completed with due diligence. Transferee shall complete construction of the Transferee Project by _____________________.July 31, 2019. The terms of Section 8.09 of the Development Agreement shall apply with regard to any enforced delays which may extend time for performance of completion of the Transferee Project. Completion of the Transferee Project shall mean receipt of a Certificate of Completion as defined in Section 3.07 of the Development Agreement. (d)Failure to Comply with Performance Milestones. i.Failure to Timely Commence or Complete the Project. In the event that Transferee shall fail to meet any of the Performance Milestones set forth in this Section, then the City may require Transferee to appear before the City to show cause as to why Transferee failed to comply with the Performance Milestones. If Transferee cannot show cause for the delay which is reasonably satisfactory to the City, the City may exercise any or all of the following remedies: a.Failure to Timely Commence. In the event Transferee does not commence the Transferee Project within 90 days following the 5 60698183.5 commencement date identified in Section 5(a) herein, the City may provide written notice to Transferee of its election to reduce the Public Financing Cap described in Section 6(b) herein by twenty-five percent (25%), unless otherwise agreedprovided by the City and Master Developerin its reasonable discretion. In the event Transferee does not commence the Transferee Project within 120 days following the commencement date identified in Section 5(a) herein, the City may provide written notice to Transferee of its election to cumulatively reduce the Public Financing Cap described in Section 6(b) herein by fifty percent (50%), unless otherwise agreedprovided by the City and Master Developerin its reasonable discretion. In the event Transferee does not commence the Transferee Project within 180 days following the commencement date identified in Section 5(a) herein, the City may provide written notice to Transferee of its election to terminate the rights, duties and obligations of Transferee under the Development Agreement and this Agreement unless otherwise agreedprovided by the City and Master Developer.in its reasonable discretion. The City shall provide written notice to the Master Developer and Transferee of its intent to provide notice to pursuethe Transferee as provided hereinpenalties contained in this Section 5(d) a minimum of twenty (20) business days prior to providing notice to Transferee of suchnotice to Transfereepenalties as described herein. Each of the deadlines described in this section shall be subject to extensions of time as set forth in Section 8.09 of the Development Agreement. In the event the City provides notice to the Transferee of a reduction to its Public Financing Cap pursuant to this section, the City and Master Developer may elect, in their jointits reasonable discretion, to provide Transferee written notice of an extension of the completion deadline contained in Section 5(c). b.Failure to Timely Complete. In the event Transferee does not complete the Transferee Project within 90 days following the completion date identified in Section 5(c) herein, the City may provide written notice to Transferee of its election to reduce the Public Financing Cap described in Section 6(b) herein by twenty-five percent (25%), unless otherwise agreedprovided by the Cityand Master Developerin its reasonable discretion. In the event Transferee does not complete the Transferee Project within 120 days following the completion date identified in Section 5(c) herein, the City may provide written notice to Transferee of its election to cumulatively reduce the Public Financing Cap described in Section 6(b) herein by fifty percent (50%), unless otherwise agreedprovided by the City and Master Developer. in its reasonable discretion. In the event Transferee does not complete the Transferee Project within 180 days following the completion date identified in Section 5(c) herein, the City may provide written notice to Transferee of its election to terminate the rights, duties and obligations of Transferee under the Development Agreement and this Agreement, unless otherwise agreedprovided by the City and Master Developer.in its reasonable discretion. The City shall provide written notice to the Master Developer and Transferee of its intent to provide notice to pursuetheTransferee as provided hereinpenalties contained in this Section 5(d) a minimum of twenty (20) business days prior to providing notice to Transferee of such notice to Transfereepenalties as described herein. Each of the deadlines described in this 6 60698183.5 section shall be subject to extensions of time as set forth in Section 8.09 of the Development Agreement. ii.Rights and Remedies Cumulative. Except as otherwise expressly stated in this Agreement or the Development Agreement, the rights and remedies of the parties are cumulative, and the exercise by a party of one or more of such rights or remedies under this Agreement or the Development Agreement (pursuant to Section 13 herein) shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. iii.Delay Caused by Streetscape Construction. In no event shall the City pursue any remedies contained in this section for delays in commencement or completion of the Transferee Project directly caused by construction of any Streetscape and Public Infrastructure Improvements. or City obligations contained in Section 3.03(D) of the Development Agreement (collectively, the “City Work”). In the event of delays in the commencement or completion of the Transferee Project directly caused by construction of the Streetscape and Public Infrastructure Improvementsor performance of the City Work, the obligations of the Transferee to commence or complete the Transferee Project shall be delayed an amount of time equivalent to the period of delay directly caused by construction or performance of the Streetscape and Public Infrastructure ImprovementsCity Work. In such event the Transferee shall provide written documentation to the City that evidences that the delay in such Streetscape and Public Infrastructure ImprovementsCity Work will or has directly resulted in the delay of commencement or completion of the Transferee Project. 6.Public Finance Proceeds and City Funds. (a)Conditions Precedent to Access to Public Finance Proceeds. Prior to access to Public Finance Proceeds and/or City Funds for purposes of partially financing the Transferee Project and the right to submit a Certification of Expenditures for reimbursement for Eligible Transferee Costs through Public Finance Proceeds and/or City Funds pursuant to the provisions of the Development Agreement, Transferee must have obtained a Certificate of Completion for the Transferee Project as defined in Section 3.07 of the Development Agreement (the “Public Finance Access Condition”).\[This Section shall not be utilized in the Transferee Agreement for the Stiefel Improvements or the Car Museum.\] (b)Public Financing Cap. Following Transferee’s satisfaction of the Public Finance Access Condition(as applicable),, City and Master Developer will provide Transferee access to \[1)STAR Bond Proceeds/TIF Proceeds/CID Proceeds/City Funds\] in the amount of $\[X\]$1,642,726 from the \[X\]STAR Bond Project Fund (subject to Section 6(c) herein) and 2) Alley Project CID Proceeds from the Alley Project CID Sales Tax Fund to be used by Transferee solely for financing those costs of the Transferee Project as identified in the column labeled \[STAR Bond Uses/TIF Uses/ and CID Uses/City Funds Uses\], respectively, in the Project Budget attached as Exhibit C-2 7 60698183.5 (“(collectively, the “Eligible Transferee Costs”), in all cases subject to and in accordance with the terms of the Development Agreement, this Agreement, the Bond Trust Indenture, and Kansas law (the “Public Financing Cap”).\[For Transferee Projects to be reimbursed with TIF Proceeds/CID Proceeds add “Transferee hereby acknowledges and agreessuch Public Financethe Alley Project CID Proceeds shall be available to Transferee on a pay-as-you-go basis in accordance with the terms of the Development Agreement and that City and Master Developer do not guarantee any specific amount of Public Finance Proceeds will actually be available to Transferee for reimbursement of Eligible Transferee Costs. Further, Transferee hereby acknowledges and agrees it shall not commence or join any cause of action or other legal recourse under this Agreement, the Development Agreement, or in law or equity against City or Master Developer (and acknowledges that it possesses no such cause of action or legal recourse) in the event Transferee receives reimbursement for Eligible Transferee Costs through Public Finance Proceeds in an amount less than Transferee’s Public Financing Cap.”\].. In the event City Funds shall be made available to Transferee to partially finance the Transferee Project pursuant to the terms of this Agreement, City agrees and acknowledges that City shall provide to Transferee (pursuant to the process described in Article VI of the Development Agreement) such full amount of City Funds identified herein so long as Transferee is in compliance with all terms of this Agreement and the Development Agreement. All costs of developing the Transferee Project, including Eligible Transferee Costs, in excess of the Public Finance Proceeds and City Funds actually received by Transferee shall be the sole responsibility of Transferee. In order to access such \[STAR Bond Proceeds/TIF Proceeds/ and Alley Project CID Proceeds/City Funds\],, Transferee shall submit Certifications of Expenditures to the City in a manner consistent with Article VI of the Development Agreement \[For STAR Bond reimbursement add “and a Project Fund Disbursement Request form in a manner consistent with the terms of that certain Bond Trust Indenture”\].. Public Finance Proceeds Annual Allotment. \[Include for Transferees granted reimbursement through New Business TIF Proceeds, New Retail CID Proceeds or Existing Retail CID Proceeds\] Pursuant to the terms of that certain Supplemental Agreement, Transferee’s Public Finance Proceeds Annual Allotment shall equal \[X\]. Such Public Finance Proceeds Annual Allotment may be utilized to reimburse Eligible Costs from the \[X\] Fund in accordance with the terms of this Agreement, the Development Agreement, and the Supplemental Agreement. (c)\[STAR Bonds. The City expects to issue STAR Bonds to provide STAR Bond Proceeds for use in reimbursing costs of the Transferee Project, among other Project Components, and has engaged the Underwriter to underwrite the STAR Bonds. The Underwriter has advised the City that various representations, warranties and assurances from the Transferee may be required to assure investors in the STAR Bonds that the Transferee Project will be constructed and opened in a timely manner. Transferee hereby acknowledges and agrees that the timing of, access to and the amount of any STAR Bond Proceeds to be made available to Transferee is dependent on the City’s ability to issue the STAR Bonds on terms that are commercially reasonable to the City and the Underwriter’s ability to successfully underwrite such STAR Bonds. To the extent required by the Underwriter, the Transferee agrees to provide the information in 8 60698183.5 form and substance reasonably requested by the Underwriter, including, but not limited to, the following for the Transferee Project: (i) guaranteed maximum price construction contract or other equivalent agreement for construction services, as appropriate, (ii) payment and performance bonds or other similar indicia of security for completion of the Transferee Project, (iii) insurance policies, (iv) evidence of availability of loan and equity funds necessary for the timely completion of the Transferee Project, which may be provided pursuant to a letter for commitment to finance the Transferee Project issued by a qualified lender; (v) any leases or contracts for any applicable portion of the Transferee Project and (vi) cooperation in calculation of the sales tax for any portion of the Transferee Project that will generate taxable retail sales.\]. Public Finance Limitation. \[This Section shall not be utilized in the Transferee Agreement for either the Stiefel Improvements or the Car Museum. This Section, including the percentage amount of the Private Contribution, shall be modified in each Transferee Agreement; provided, however, that the Private Contribution percentage shall not be less than 50%. Notwithstanding the foregoing, each Transferee Agreement for use of Existing Retail CID Proceeds for Transferee Projects commenced during construction of the Streetscape and Public Infrastructure Improvements shall require expenditure of Total Project Costs in a ratio of 30% Private Contribution to every 70% of Existing Retail CID Proceeds reimbursed to such Transferee.\] (d)Public Finance Limitation. i.In addition to the foregoing conditions applicable to the disbursement of \[STAR Bond Proceeds and Alley Project CID Proceeds to the Transferee, the STAR Bond Proceeds/TIF Proceeds/CID Proceeds\] to the Transferee, the \[STAR Bond Proceeds/TIF Proceeds/CID Proceeds\] and Alley Project CID Proceeds available to Transferee for reimbursement of Eligible Transferee Costs shall not exceed _______fifty percent (_____%)(50%) of the amount of the actual costs expended by Transferee to develop the Transferee Project (“Total Project Costs”). The remainder of all Total Project Costs, in an amount no less than ________fifty percent (_____%)(50%) of such Total Project Costs, shall be paid by Transferee through a combination of private debt and equity (the “Private Contribution”). In other words, there shall not be more than _____%50% of Total Project Costs paid with \[a combination of STAR Bond Proceeds/TIF Proceeds/ and Alley Project CID Proceeds\] (the “Public Finance Limitation”). ii.The Certification of Expenditures submitted by Transferee shall include evidence of payment for Total Project Costs paid with the Private Contribution in an amount which is no less than ______%fifty percent (50%) of the Total Project Costs incurred at the time of such Certification of Expenditures in order to satisfy the Public Finance Limitation. In other words, the cumulative amount of Total Project Costs included in the Certification of Expenditures from the Private Contribution must equal no less than _____%fifty percent (50%) of the cumulative amount of Total Project Costs in order for _____%50% of such 9 60698183.5 Total Project Costs to be eligible for reimbursement through \[a combination of STAR Bond Proceeds/TIF Proceeds/ and Alley Project CID Proceeds\].. 7.Insurance. Each Third-Party Developer shall keep the Transferee Project continuously insured against such risks and in such amounts, with such deductible provisions as are customary in connection with the operation of facilities of the type and size comparable to the Transferee Project. 8.Indemnification of City and Master Developer. Transferee agrees to indemnify and hold the City and Master Developer, and the employees, agents and independent contractors and consultants of the City and the Master Developer (collectively, the “Indemnified Parties”) harmless from and against any and all suits, claims, costs of defense, damages, injuries, liabilities, judgments, costs and/or expenses, including court costs and reasonable attorneys’ fees, resulting from, arising out of, or in any way connected with: (a)Transferee’s actions and undertaking in implementation of the Transferee Project, the Development Agreement, this Agreement, and the \[STAR Bond Project Plans/Plan and Alley Project CIDPetitions\];Petition; (b)the negligence or willful misconduct of Transferee, its employees, agents or independent contractors and consultants in connection with the management, design, development, redevelopment and construction of the Transferee Project; and (c)any delay or expense resulting from any litigation filed against Transferee by any member or shareholder of Transferee, any prospective investor, prospective partner or joint venture partner, lender, co-proposer, architect, contractor, consultant or other vendor. This Section shall not apply to willful misconduct or gross negligence of the City or Master Developer or the officers, employees or agents of City or Master Developer. This Section includes, but is not limited to, any repair, cleanup, remediation, detoxification, or preparation and implementation of any removal, remediation, response, closure or other plan (regardless of whether undertaken due to governmental action) concerning any hazardous substance or hazardous wastes including petroleum and its fractions as defined in (i) the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”; 42 U.S.C. Section 9601, et seq.), (ii) the Resource Conservation and Recovery Act (“RCRA”; 42 U.S.C. Section 6901 et seq.) and (iii) Article 34, Chapter 65, K.S.A. and all amendments thereto, at any place where such Transferee owns or has control of real property pursuant to any of Transferee’s activities under the Development Agreement and this Agreement. The foregoing indemnity is intended to operate as an agreement pursuant to Section 107(e) of CERCLA to assure, protect, hold harmless and indemnify City and Master Developer from liability. 9.Payment of Taxes and Liens. Transferee hereby agrees as follows: (a)Payment of Property Taxes. During the Term of this Agreement, Transferee and its respective Affiliates shall pay when due all real estate taxes and assessments on the property it owns within the Districts. However, Thethe obligation to pay real estate taxes and assessments on such property shall not be a personal obligation 10 60698183.5 of the Transferee and its respective Affiliates but are subject to the same provisions related to enforcement and collection of real estate taxes and assessments under laws of the State. In the event that the Transferee or its Affiliates shall fail to pay all such applicable real estate taxes and assessments after any notice and cure periods set forth in Section 8.02 of the Development Agreement, the Transferee understands and agrees that, among other things, the City may (i) terminate financing of the Transferee Project through Public Finance Proceeds, (ii) suspend all reimbursements of Eligible Transferee Costs through Public Finance Proceeds during any time that such real estate taxes and assessments on the property owned by Transferee and its respective affiliates within the Districts remain unpaid or (iii) exercise any other remedies under this Agreement and/or the Development Agreement. Notwithstanding the foregoing, nothing contained in this Agreement shall prohibit the Transferee and its respective affiliates from contesting the assessed value of the properties, improvements or the taxes thereon in good faith by appropriate proceedings; provided however that each such party shall pay any and all amounts that are contested under protest while any such proceedings are pending. The Transferee and its respective affiliates shall promptly notify the City in writing of a protest of real estate taxes or valuation of property owned by the Transferee or its respective affiliates within the Districts. (b)Liens. Transferee and its respective affiliates further agree that no mechanics’ or other liens shall be established or remain against the Transferee Project or the property within the Districts, or the funds in connection with any of the Transferee Project, for labor or materials furnished in connection with any acquisition, construction, additions, modifications, improvements, repairs, renewals or replacements so made. However, Transferee shall not be in default if mechanics’ or other liens are filed or established and the Transferee and its respective Affiliates contests in good faith said mechanics’ liens and in such event may permit the items so contested to remain undischarged and unsatisfied during the period of such contest and any appeal therefrom. (c)Sales Tax Collection.If Transferee is engaged in the business of selling tangible personal property at retail or rendering or furnishing services taxable pursuant to the provisions of the Kansas retailers’ sales tax act and amendments thereto (K.S.A. 79-3601 et seq.) within any of the Districts, Transferee shall collect, and make returns of, all taxes levied under the Kansas retailers’ sales tax act and any CID Sales Tax imposed within the District in which Transferee is engaged in such business, all in the manner and at the times prescribed by applicable law. The Transferee shall be obligated to provide the City, along with its submission to the Kansas Department of Revenue, copies of the monthly sales tax returns for its businesses within the Districts. To the extent it may legally do so, information obtained pursuant to this Section shall be kept confidential by the City in accordance with Applicable Law and Requirements, including but not limited to K.S.A. 79-3657. 10.Damage, Destruction or Condemnation. (a)In the event of damage to or destruction of any portion of the Transferee Project (other than the public roads, public right of way and public lands within the Transferee Project) resulting from fire or other casualty during the Term (a “Casualty”), 11 60698183.5 or in the event any portion of the Project Area is condemned or taken for any public or quasi-public use or title thereto is found to be deficient during the Term, the net proceeds of any insurance relating to such damage or destruction, the net proceeds of such condemnation or taking or the net proceeds of any realization on title insurance shall be paid into, and used in accordance with a construction escrow agreement reasonably satisfactory to the City, Transferee, and Transferee’s construction or permanent lender (“Casualty Escrow”). (b)If, at any time during the Term, the Transferee Project or any part thereof (other than the public roads, public right of way and public lands within the Project) shall be damaged or destroyed by a Casualty (the “Damaged Facilities”), Transferee, at its sole cost and expense, shall commence and thereafter proceed as promptly as possible to repair, restore and replace the Damaged Facilities as nearly as possible to their condition immediately prior to the Casualty and shall be entitled to draw upon the Casualty Escrow for payment of said costs. (c)If at any time during the Term, title to the whole or substantially all of the portion of the Project Area owned by Transferee (or its Affiliate) shall be taken in condemnation proceedings or by right of eminent domain, Transferee, at its sole discretion, may terminate this Agreement as of the date of such taking. For purposes of this Section, “substantially all of the Project Area” shall be deemed to have been taken if the City and Transferee, each acting reasonably and in good faith, determine that the untaken portion of the Project Area cannot be practically and economically used by Transferee for the purposes and at the times contemplated by this Agreement. (d)In the event of condemnation of less than the whole or substantially all of the portion of the Project Area owned by the Transferee (or its Affiliate) during the Term, Transferee, at its sole cost and expense, shall commence and thereafter proceed as promptly as possible to repair, restore and replace the remaining part of the Transferee Project, as nearly as possible, to its former condition, and shall be entitled to draw upon the Casualty Escrow for payment of said costs. (e)Nothing in this Section will require the Transferee to expend funds in excess of the Casualty Escrow or to perform any obligation in addition to those obligations contained in the Development Agreement or in this Agreement. 11.Rights of Access and Inspection. (a)Representatives of the City shall have the right of access to the Transferee Project, without charges or fees, at normal construction hours during the period of construction, for the purpose of ensuring compliance with this Agreement, including, but not limited to, the inspection of the work being performed in constructing, renovating, improving, equipping, repairing and installing the Transferee Project, so long as they comply with all safety rules. Except in case of emergency, prior to any such access, such representatives of the City will check in with the on-site manager. Such representatives of the City shall carry proper identification, shall insure their own safety, assuming the risk of injury, and shall not interfere with the construction activity. 12 60698183.5 (b)The Transferee shall maintain complete, accurate, and clearly identifiable records with respect to the Transferee Project, Eligible Transferee Costs and any other documents created pursuant to, or arising under, this Agreement, including, but not limited to, as applicable: all general contractor’s sworn statements, general contracts, subcontracts, material purchase orders, waivers of lien, and paid receipts and invoices (collectively, the “Records”). The Records shall be maintained during the term of this Agreement, and for a period of two (2) years thereafter (the “Retention Period”); provided, however, that if any litigation, claim or audit is commenced prior to the expiration of the Retention Period, then the Retention Period shall be extended until all litigation, claims or audit findings have been completely terminated or resolved, without right of further appeal. (c) During the Retention PeriodFor the period of time beginning with the Effective Date and ending on the date two (2) years after receipt of a Certificate of Completion as defined in Section 3.07 of the Development Agreement, Transferee further agrees that the City, with reasonable advance notice and during normal business hours, shall have the right and authority to review, inspect, audit, and copy, from time to time, all of Transferee’s Records as pertinent to the purposes of, or to ensure compliance with, this Agreement. In addition, Transferee agrees to provide the City with copies of such Records, upon request.The City shall periodically report the findings of such inspections to Master Developer in writing; provided, however, that nothing contained herein shall create an affirmative obligation of the Master Developer to perform any inspections of the Transferee Project or evaluate the adequacy of the construction of the Transferee Project. (d)During the Term of this Agreement, the Transferee shall maintain records of all sales tax filings made by Transferee with the Kansas Department of Revenue. The City, with reasonable advance notice and during normal business hours, shall have the right and authority to review, inspect, audit, and copy, from time to time, all of such Transferee’s sales tax filings in connection with ongoing administration of the Public Finance Proceeds. 12.Assignment and Transfer of this Agreement. Assignment and transfer of any or all rights, duties or obligations under this Agreement shall be governed by Section 9.03 of the Development Agreement, which is expressly incorporated herein, except that Master Developer approval for any such assignment or transfer shall not be required. 13.Defaults and Remedies. Events of Default and remedies therefore, as well as force majeure or enforced delay circumstances in relation to same, shall be governed by Article VIII of the Development Agreement, which is expressly incorporated herein. 14.Release of Master Developer. To the extent that Transferee has assumed any obligations, terms or conditions of the Master Developer in connection with the Transferee Project under the Development Agreement pursuant to execution of this Agreement, the City hereby specifically agrees to release the Master Developer from such obligations, terms and conditions. 13 60698183.5 15.Notice. Notice to City and Master Developer shall be as described in the Development Agreement. Notice to Transferee shall be made to the following: To the Transferee: _____________________________ _____________________________ _____________________________ Attn: ________________________ With copies to: _____________________________ _____________________________ _____________________________ _____________________________ 16.Time of the Essence. Time is of the essence of this Agreement. The Parties will make every reasonable effort to expedite the subject matters hereof and acknowledge that the successful performance of this Agreement requires their continued cooperation.Required Disclosures. Each Party shall immediately notify the other Party of the occurrence of any material event which would cause any of the information furnished to other Party (by such furnishing Party) in connection with the matters covered in this Agreement to contain any untrue statement of any material fact or to omit to state any material fact required to be stated therein or necessary to make any statement made therein, in the light of the circumstances under which it was made, not misleading. 18.Non-Binding Mediation. If a dispute or controversy arises between the City, Master Developer, orand Transferee under this Agreement, then any Party shall be entitled to request non-binding mediation, and the City, Master Developer, and Transferee agree to participate, in good faith, in any such mediation requested by any other Party. Any request for mediation pursuant to this section shall be made in writing and delivered to the other Parties within thirty (30) days of the action or decision giving rise to the dispute or controversy. The mediation shall occur in Salina, Kansas, and the cost of any such mediation shall be divided equally between the Parties. 19.Tax Implications. The Transferee acknowledges and represents that (1) neither the City nor Master Developer, nor any of theirits officials, employees, consultants, attorneys or other agents has provided to the Transferee any advice regarding the federal or state income tax implications or consequences of this Agreement and the transactions contemplated hereby, and (2) the Transferee is relying solely upon its own tax advisors in this regard. 20.Survival. Notwithstanding the termination of this Agreement, Transferee’s obligations of insurance and indemnification set out herein shall survive the termination of this Agreement to the extent that any incident giving rise to a claim, suit, judgment or demand occurred during Term. 21.Kansas Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Kansas. 14 60698183.5 22.Counterparts. This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same Agreement. 23.Recordation of Agreement. The Parties agree to execute and deliver a memorandum of this Agreement in proper form for recording in the real property records of Saline County, Kansas, upon the request of a Party. 24.Cash Basis and Budget Laws. The Parties acknowledge and agree that the ability of the City to enter into and perform certain financial obligations pursuant to this Agreement are subject to the K.S.A. 10-1101 et seq. and K.S.A. 79-2935 et seq. 25.Electronic Storage. The Parties agree that the transactions described herein may be conducted and related documents may be received, sent or stored by electronic means. Copies, telecopies, facsimiles, electronic files, and other reproductions of original executed documents shall be deemed to be authentic and valid counterparts of such original documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law. Master Developer Recusal.Transferee acknowledges that Section 3.10 of the Development Agreement prohibits the Master Developer from making or participating in the making of any Transferee Agreement in which the Master Developer or any of its directors, officers, or shareholders has a substantial interest (as defined in K.S.A. 75-4301a) in the Third- PartyDeveloper entering into such Transferee Agreement. In such event, the City and the Third- PartyDeveloper of such Project Component shall be the only parties which enter into such Transferee Agreement. Any Transferee Agreement the Master Developer makes or participates in making in violation of Section 3.10 of the Development Agreement may be deemed void in part or whole at the reasonable discretion of the City. \[Remainder of page intentionally left blank. Signature pages immediately follow.\] 15 60698183.5 IN WITNESS WHEREOF, the City, Master Developer and Transferee have duly executed this Agreement pursuant to all requisite authorizations as of the date first above written. CITY OF SALINA, KANSAS ________________, Mayor \[SEAL\] ATTEST: Shandi Wicks, CMC, City Clerk APPROVED AS TO FORM: , City Attorney STATE OF KANSAS ) ) ss. COUNTY OF SALINA ) On this _______day of _________________, 201__, ____________________, personally known to me and after first being sworn did state that he/she is the Mayor of the City of Salina, State of Kansas, and that the seal affixed to the foregoing instrument is the official Seal of the City of Salina, and that said instrument was signed and sealed on behalf of the City, and that the matters set forth herein are true and correct to the best of his/her and the City’s knowledge, information and belief, and acknowledge that he executed the same on behalf of the City as its free act and deed. Notary Public My Commission Expires: IN WITNESS WHEREOF, the City, Master Developer and Transferee have duly executed this Agreement pursuant to all requisite authorizations as of the date first above written. MASTERDEVELOPER: SALINA2020, INC., a Kansas corporation By: Trace Walker, __________________ STATE OF KANSAS) ) ss. COUNTY OF ________________) On this _________ day of ____________, 201____, before me personally appeared TraceWalker, to me personally known, who being by me duly sworn did say that he is the ______________ of Salina2020, Inc., and that said instrument was signed and delivered on behalf of said corporation and acknowledged to me that he executed the same as the free act and deed of said corporation. In Testimony Whereof, I have hereunto set my hand and affixed my official seal the day and year first above written. NOTARY PUBLIC My Commission Expires: \[SEAL\] IN WITNESS WHEREOF, the City, Master Developer and Transferee have duly executed this Agreement pursuant to all requisite authorizations as of the date first above written. TRANSFEREE: By: Printed Name: Title: Date: STATE OF _________________ ) ) ss. COUNTY OF _______________ ) On this day of ______________, 201____, before me personally appeared ____________, to me personally known, who being by me duly sworn did say that he/she is the _________________________ of ____________________________, a ______________ _______________________, and that said instrument was signed and delivered on behalf of said __________________________ and acknowledged to me that he/she executed the same as the free act and deed of said ________________________. In Testimony Whereof, I have hereunto set my hand and affixed my official seal the day and year first above written. Notary Public Printed Name: My Commission Expires: EXHIBIT A TO TRANSFEREE AGREEMENT Description of Transferee Project \[SEE ATTACHED\] EXHIBIT B TO TRANSFEREE AGREEMENT Legal Description and Boundary Map \[SEE ATTACHED\] EXHIBIT C-1 TO TRANSFEREE AGREEMENT Critical Path Schedule \[TO BE ATTACHED\] EXHIBIT C-2 TO TRANSFEREE AGREEMENT Project Budget \[TO BE ATTACHED\] TRANSFEREE AGREEMENT THIS TRANSFEREE AGREEMENT (this “Agreement”), is made and entered into this ____ day of ___________, 2018(the “Effective Date”) between and among the CITY OF SALINA, KANSAS, a municipal corporation duly organized under the laws of the State of Kansas (the “City”), SALINA 2020, INC.,a Kansas corporation (the “Master Developer”) and Samys OC, LLC,aKansas limited liability company(“Transferee”) (collectively, the “Parties” and each a “Party”). RECITALS: A.City and Master Developer have entered into that certain Development Agreement (the “Development Agreement”) dated as of January 23, 2017concerning development of a mixed-use project located generally within downtown Salina, Kansas as more specifically described in Section 3.01of the Development Agreement (the “Project”). Capitalized terms which are not otherwise defined herein shall have the meanings assigned to them in the Development Agreement. B.Article IXof the Development Agreement provides for assignment by the City and Master Developer of certain obligations, covenants, and agreements under the Development Agreement to third parties. Accordingly, the City and the Master Developer desire to transfer certain obligations, covenants, and agreements to Transferee in accordance with Article IXwith respect to the portion of the Project described in Exhibit Aattached hereto (the “Transferee Project”). A legal description and boundary map of the location of the Transferee Project is attached as Exhibit Bhereto, which shall hereinafter be referred to as the “Project Area”. C.The Parties desire to enter into this Agreement so that the Transferee shall acknowledge, assume and agree to perform those obligations, covenants and agreements under the Development Agreement (as well asadditional termsdescribed herein)as the same pertain to the design, construction, completion and operation of the Transferee Project. AGREEMENT NOW, THEREFORE, in consideration of the foregoing and in consideration of the mutual covenants and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: 1.Incorporation of Recitals. The parties understand and agree that the Recitals set forth above are hereby incorporated as though more fully set forth herein. 2.Term of Agreement and Master Developer’s Rights. This Agreement shall commence upon the Effective Date and shall terminate uponthat date which is the earlier of (i) the last day of the either the TIF Collection Period or CID Collection Period, whichever occurs later,or(ii) the date that the Transferee has been reimbursed for all Eligible Transferee Costs by Public Finance Proceeds, or (iii) the date this Agreement is terminated pursuant to Section 5or Section 13herein (the “Term”). Notwithstanding the foregoing, the Master Developer’s duties 60231389.5 and obligations under this Agreement shall expire on the date of the Certificate of Full Completion for the Transferee Project. 3.General Acknowledgement and Assumption. Transferee hereby acknowledges, assumes and agrees to perform each and every obligation, covenant and agreement under the Development Agreement, except as modified below, but only to the extent that the same shall pertain to the design, construction, completion and operation of the Transferee Project, each of which is hereby incorporated as though more fully set forth herein. Transferee hereby understands and agrees that the City orMaster Developer may enforce the same directly against Transferee. Notwithstanding the foregoing, the Transferee Project to be completed by the Transferee shall be defined by Exhibit Ato this Agreement, which shall control with regard to description of the Transferee Project. Transferee acknowledges that it has received a copy of the Development Agreement and any amendments thereto, and has reviewed the terms of same with counsel of its own election. 4.Specific Acknowledgement and Assumption. (a)Development Agreement Provisions Assumed by Transferee.In connection with the Transferee Project, Transferee specifically acknowledges, assumes and agrees to perform the following obligations, covenants and agreements,set forth in the Development Agreement, as modified in certain instances below: i.All of the terms and conditions in Article I(Definitions and Rules of Construction). ii.All of the representations and warranties of the Master Developer made in Article II. In addition, Transferee makes the following representations: a.No Material Change. There has been no material adverse change in the business, financial position, prospects or results of operations of the Transferee which couldaffect the Transferee’s ability to perform its obligations pursuant to the Agreement. b.Compliance with Laws.Transferee, to the best of its knowledge,is in compliance with all valid laws, ordinances, orders, decrees, decisions, rules, regulations and requirements of every duly constituted governmental authority, commission and court applicable to any of its affairs, business, operations as contemplated by this Agreementand the Development Agreement. c.Construction Permits. Except for Permitted Subsequent Approvals, all governmental permits and licenses required by applicable law to construct, occupy and operate the Transferee Project have been issued and are in full force and effect or, if the present stage of development does not allow such issuance, the Transferee reasonably believes, after due inquiry of the appropriate governmental officials, that such permits and licenses will be issued 2 60231389.5 in a timely manner in order to permit the Transferee Project to be constructed. iii.All of the terms and conditions set forth in Article IIIas the same relate to the Transferee Project and rights, duties and obligations of the Third Party Developer of the Transferee Project. iv.All of the terms and conditions set forth in Article IVas the same relate to the Transferee Project and rights, duties and obligations of the Third Party Developer of the Transferee Project. v.All of the terms and conditions set forth in Article VIas the same relate to the Transferee Project and rights, duties and obligations of the Third Party Developer of the Transferee Project. vi.All of the terms and conditions set forth in Article VIIas the same relate to the Transferee Project and rights, duties and obligations of the Third Party Developer of the Transferee Project. vii.All of the terms and conditions set forth in Article VIIIas the same relate to the Transferee Project and rights, duties and obligations of the Third Party Developer of the Transferee Project. viii.All of the terms and conditions set forth in Article IX as the same relate to the Transferee Project and rights, duties and obligations of the Third Party Developer of the Transferee Project. ix.All of the terms and conditions in Article X(General Provisions). (b)Non-Exclusive. Each of the foregoing provisions is hereby incorporated by reference and Transferee hereby understands and agrees that the City orMaster Developer may enforce the same against Transferee in connection with the Transferee Project. Further, the Parties understand and agree that if and to the extent the various exhibits attached to the Development Agreement are referenced in the obligations that are acknowledged and assumed by the Transferee, such exhibits are hereby incorporated by reference as though more fully set forth herein. Notwithstanding the foregoing, the Transferee Project to be completed by the Transferee shall be defined by Exhibit Ato this Agreement, which shall control with regard to description of the Transferee Project. The Transferee acknowledges that the provisions of the Development Agreement referenced in this Section is not exclusive of the provisions of the Development Agreement assumed by Transferee in connection with the Transferee Project, and that Transferee assumes all provisions of the Development Agreement applicable to the Transferee and the Transferee Project regardless of specific inclusion within this Section. (c)Provisions Specifically Not Assumed by Transferee. Notwithstanding anything set forth herein which is seemingly to the contrary, the Partieshereby acknowledge and agreethat Transferee shall have no obligation to perform any of the 3 60231389.5 obligations under the following provisions, nor shall Transferee have any rights related to the following provisions: i.All of the terms and conditions set forth in the Development Agreement regarding development, financing, and operation of (or otherwise applying to) any other Project Component other than the Transferee Project. ii.All of the terms and conditions set forth in Article V(STAR Bond Issuance). 5.Performance Milestones. The Parties hereby agree that construction of the Transferee Project, subject to circumstances set forth in Section 8.08of the Development Agreement, shall be undertaken in accordance with the following schedule (the “Performance Milestones”): (a)Commencement of the Transferee Project. Transferee shall commence construction of the Transferee Project by March 1, 2018. Provided, however, that Transferee shall not be required to commence the Transferee Project unlessand until: i.The City is current on the milestones described in the schedule attached to its construction contract for the Phase I Streetscape Improvements; and ii.The Third Party Developer of the Hotel Project has expended a minimum of $200,000 in site work construction costs for the Hotel Project,which shall include costs for grading, demolition, utility relocation, and footings and foundations. (b)Commencement of the Transferee Project shall mean: i.A construction permit, and all other permits required pursuant to the City codes and ordinances, necessary for the commencement of construction or provision of the Transferee Project; ii.Certificates evidencing that insurance policies have been procured by Transferee for all insurance required pursuant to Section 7of this Agreement; iii.A copy of an executed guaranteed maximum price contract between Transferee and its general contractor for the construction and completion of the Transferee Project (or equivalent agreement in the discretion of the City and the Master Developer), evidence that such general contractor is a registered contractor in good standing in the City of Salina, Kansas, the State of Kansas, and its state of domicile, and copies of performance, labor, and material payment bonds in connection with the Transferee Project (unless City and Master Developer agree otherwise in their joint discretion); iv.Documents reasonably satisfactory to the City and Master Developer that Transferee has obtained financing adequate to fully and finally 4 60231389.5 construct and develop the Transferee Project in accordance with the critical path schedule and final project budget; v.A critical path schedule and final project budget reasonably consistent with the preliminary project budget for the development and construction of the Transferee Project, and agreement upon the same by Transferee, the City Representative, and Master Developer (to be supplemented and attached hereto as Exhibit C-1and Exhibit C-2, respectively); vi.Any and all other materials reasonably requested by the City and Master Developer evidencing the ability of Transferee to imminently commence construction of the Transferee Project with the capability to fully and finally complete the Transferee Project with diligence, which may include, without limitation, elevations, marketing materials, financing information, and business plans; vii.Transferee’s undertaking of a continuous and uninterrupted program of construction for such Transferee Project. (c)Construction of the Transferee Project.Transferee shall construct the Transferee Project in agood and workmanlike manner in accordance with the terms of this Agreement and the Development Agreement. Upon reasonable advance notice, the Transferee shall meet with the City to review and discuss the design and construction of the Transferee Project in order to enable the City to monitor the status of construction and to determine that the Transferee Project is being performed and completed in accordance with this Agreement and the Development Agreement. (d)Completion of the Transferee Project.The Transferee shall cause the Transferee Project to be completed with due diligence. Transferee shall complete construction of the Transferee Project by December1, 2018.Provided, however, that the date for completion ofthe Transferee Project shall be extended unless: i.The City has completed the street and sidewalk components of the Phase I Streetscape Improvementsfrom Mulberry Street to Walnut Streetat least fifteen (15) days prior to the completion date described herein; and ii.The intersections at Walnut and Santa Fe and Mulberry and Santa Fe have completely openedto full and regular traffic flow at least fifteen (15) days prior to the completion date described herein. Completion of the Transferee Project shall mean receipt of a Certificate of Completion as defined in Section3.07of the Development Agreement.In the event commencement of the Transferee Project is delayed as a result of the conditions described in Sections 5(a),5(d)(i), or 5(d)(ii)above, the deadline for completion of the Transferee Project described in this section shall be extended by a period of days equal to the period of days corresponding to the delay caused by conditions described in Section 5(a),5(d)(i), or 5(d)(ii)above.Notwithstanding anything contained herein to the 5 60231389.5 contrary, in no event shall the Transferee be relieved of its obligation to complete the Transferee Project as a result of such delay. (e)Failure to Comply with Performance Milestones. i.Failure to Timely Commence or Complete the Project. In the event that Transferee shall fail to meet any of the Performance Milestones set forth in this Section, then the City may require Transferee to appear before the City to show cause as to why Transferee failed to comply with the Performance Milestones. If Transferee cannot show cause for the delay which is reasonably satisfactory to the City, the City may exercise any or all of the following remedies: a.Failure to Timely Commence. In the event Transferee does not commence the Transferee Project within 90 days following the commencement date identified in Section 5(a)herein, the City may provide written notice to Transferee of its election to reduce the Public Financing Cap described in Section 6(b)herein by twenty-five percent (25%),unless otherwise agreed by the City and Master Developer. In the event Transferee does not commence the Transferee Project within 120days following the commencement date identified in Section 5(a)herein, the City may provide written notice to Transferee of its election to cumulatively reduce the Public Financing Cap described in Section 6(b)herein by fiftypercent (50%),unless otherwise agreed by the City and Master Developer. In the event Transferee does not commence the Transferee Project within 180 days following the commencement date identified in Section 5(a)herein, the City may provide written notice to Transferee of its election toterminate the rights, duties and obligations of Transferee under the Development Agreement and this Agreementunless otherwise agreed by the City and Master Developer.The City shall provide written notice to the Master Developer and Transferee of its intent to provide notice to the Transferee as provided herein a minimum of twenty (20) business days prior to providing such notice to Transferee. Each of the deadlines described in this section shall be subject to extensions of time as set forth in Section 8.09of the Development Agreement. In the event the City provides notice to the Transferee of a reduction to its Public Financing Cap pursuant to this section, the City and Master Developer may elect, in their joint discretion, to provide Transferee written notice of an extension of the completion deadline contained in Section 5(d). b.Failure to Timely Complete. In the event Transferee does not complete the Transferee Project within 90 days following the completion date identified in Section 5(d)herein, the Citymay provide written notice to Transferee of its election to reduce the Public Financing Cap described in Section 6(b)herein by twenty-five percent (25%), unless otherwise agreed by the City and Master Developer. In the event Transferee does not complete the Transferee Project within 120days following the completion date identified in Section 5(d) herein, the Citymay provide written notice to Transferee of its election to 6 60231389.5 cumulatively reduce the Public Financing Cap described in Section 6(b)herein by fiftypercent (50%), unless otherwise agreed by the City and Master Developer. In the event Transferee does not complete the Transferee Project within 180 days following the completion date identified in Section 5(d)herein, the City may provide written notice to Transferee of its election to terminate the rights, duties and obligations of Transferee under the Development Agreement and this Agreement, unless otherwise agreed by the City and Master Developer.The City shall provide written notice to the Master Developerand Transfereeof its intent to provide notice to the Transferee as provided herein a minimum of twenty (20) business days prior to providing such notice to Transferee. Each of the deadlines described in this section shall be subject to extensions of time as set forth in Section 8.09of the Development Agreement. ii.Rights and Remedies Cumulative. Except as otherwise expressly stated in this Agreement or the Development Agreement, the rights and remedies of the parties are cumulative, and the exercise by a party of one or more of such rights or remedies under this Agreement or the Development Agreement (pursuant to Section 13herein) shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. iii.Delay Causedby Streetscape Construction.In no event shall the City pursue any remedies contained in this section for delays in commencement or completion of the Transferee Project directly caused by construction of any Streetscape and Public Infrastructure Improvements.In the event of delays in the commencement or completion of the Transferee Project directly caused by construction of the Streetscape and Public Infrastructure Improvements, the obligations of the Transferee to commence or complete the Transferee Project shall be delayed an amount of time equivalent to the period of delay directly caused by construction of the Streetscape and Public Infrastructure Improvements. In such event the Transferee shall provide written documentation tothe City that evidences that the delay in such Streetscape and Public Infrastructure Improvements will or has directly resulted in the delay of commencement or completion of the Transferee Project. 6.Public Finance Proceedsand City Funds. (a)Conditions Precedent to Access to Public Finance Proceeds. Prior to access to Public Finance Proceeds and/or City Funds for purposes of partially financing the Transferee Project and the right to submita Certification of Expenditures for reimbursement for Eligible Transferee Costs through Public Finance Proceeds and/or City Funds pursuant to the provisions of the Development Agreement, Transferee must have obtained a Certificate of Completion for the Transferee Project as defined in Section 3.07of the Development Agreement(the “Public Finance AccessCondition”). (b)Public Financing Cap. Following Transferee’s satisfaction of the Public Finance Access Condition (as applicable), City and Master Developer will provide 7 60231389.5 Transfereeaccess to 1) TIF Proceeds in the amount of $300,000from the Old Chicago TIFFund and 2) CID Proceeds in the amount of $50,000 from the Old Chicago CID Fund to be used by Transfereesolely for financing those costs of the Transferee Project as identified in the column labeled TIF Usesand CID Uses, respectively, in the Project Budget attached as ExhibitC-2(collectively, the “Eligible Transferee Costs”), in all cases subject to and in accordance with the terms of the Development Agreement, this Agreement,the Bond Trust Indenture,and Kansas law (the “Public Financing Cap”). Transferee hereby acknowledges and agrees such Public Finance Proceeds shall be available to Transferee on a pay-as-you-go basis in accordance with the terms of the Development Agreement and that City and Master Developer do not guarantee any specific amount of Public Finance Proceeds will actually be available to Transferee for reimbursement of Eligible Transferee Costs. Further, Transferee hereby acknowledges and agrees itshall not commence or join anycause of action or other legal recourse under thisAgreement, the Development Agreement,or in law or equity against City or Master Developer (and acknowledges that it possesses no such cause of action or legal recourse) in the event Transferee receives reimbursement for Eligible Transferee Costs through Public Finance Proceeds in an amount less than Transferee’s Public Financing Cap.In the event City Funds shall be made available to Transferee to partially finance the Transferee Project pursuant to the terms of this Agreement, City agrees and acknowledges that City shall provide to Transferee (pursuant to the process described in Article VIof the Development Agreement) such full amount of City Funds identified herein so long as Transferee is in compliance with all terms of this Agreement and the Development Agreement. All costs of developing the Transferee Project, including Eligible Transferee Costs, in excess of the Public Finance Proceeds and City Funds actually received by Transfereeshall be the sole responsibility of Transferee. In order to access such TIF Proceeds and CID Proceeds,Transfereeshall submitCertificationsof Expendituresto the Cityin a manner consistent with Article VIof the Development Agreement. (c)STAR Bonds. The City expects to issue STAR Bonds to provide STAR Bond Proceeds for use in reimbursing a portion of the costs of other Project Components, and has engaged the Underwriter to underwrite the STAR Bonds. The Underwriter has advised the City that various representations, warranties and assurances from the Transferee may be required to assure investors in the STAR Bonds that thecritical Project Components will be constructed and opened in a timely manner. Furthermore, the success of the CID and TIF portions of the Downtown Revitalization Plan may be dependent on the City’s ability to issue STAR Bonds. To accommodate the STAR Bond issuance process,theTransferee agrees to provide the following information in form and substance reasonably requested by the Underwriter for the Transferee Project: (i) construction contract or other equivalent agreement for construction services, as appropriate, (ii) insurance policies, (iii) evidence of availability of loan and equity funds necessary for the timely completion of the Transferee Project, which may be provided pursuant to a letter for commitment to finance the Transferee Project issued by a qualified lender; (iv) any leases or contracts for any applicable portion of the Transferee Project and (v) cooperation in calculation of the sales tax for any portion of the Transferee Project that will generate taxable retail sales. 8 60231389.5 (d)Public Finance Limitation. i.In addition to the foregoing conditions applicable to the disbursement of TIF Proceeds and CID Proceedsto the Transferee, the TIF Proceeds and CID Proceedsavailable to Transferee for reimbursement of Eligible Transferee Costs shall not exceed fiftypercent (50%) of the amount of the actual costs expended by Transferee to develop the Transferee Project (“Total Project Costs”). The remainder of all Total Project Costs, in an amount no less than fifty percent (50%) of such Total Project Costs, shall be paid by Transferee through a combination of private debt and equity (the “Private Contribution”). In other words, there shall not be more than 50%of Total Project Costs paid with a combination of TIF Proceeds and CID Proceeds(the “Public Finance Limitation”). ii.The Certification of Expenditures submitted by Transferee shall include evidence of payment for Total Project Costs paid with the Private Contribution inan amount which is no less thanfifty percent (50%)of the Total Project Costs incurred at the time of such Certification of Expenditures in order to satisfy the Public Finance Limitation. In other words, the cumulative amount of Total Project Costs included in the Certification of Expenditures from the Private Contribution must equal no less than fifty percent (50%)of the cumulative amount of Total Project Costs in order for fifty (50%)of such Total Project Costs to be eligible for reimbursement througha combination of TIF Proceeds and CID Proceeds. 7.Insurance.Each Third Party Developer shall keep the Transferee Project continuously insured against such risks and in such amounts, with such deductible provisions as are customary in connection with the operation of facilities of the type and size comparable to the Transferee Project. 8.Indemnification of City and Master Developer.Transferee agrees to indemnify and hold the City and Master Developer, and the employees, agents and independent contractors and consultants of the City and the Master Developer (collectively, the “Indemnified Parties”) harmless from and against any and all suits, claims, costs of defense, damages, injuries, liabilities, judgments, costs and/or expenses, including court costs andreasonable attorneys’fees, resulting from, arising out of, or in any way connected with: (a)Transferee’s actions and undertaking in implementation of the Transferee Project, the Development Agreement, this Agreement, the TIF Project Plan, and the CID Petition for the Downtown CID District; (b)the negligence or willful misconduct of Transferee, its employees, agents or independent contractors and consultants in connection with the management, design, development, redevelopment and construction of the Transferee Project; and (c)any delay or expense resulting from any litigation filed against Transferee by any member or shareholder of Transferee, any prospective investor, prospective 9 60231389.5 partner or joint venture partner, lender, co-proposer, architect, contractor, consultant or other vendor. This Section shall not apply to actions of unrelated third parties (but shall expressly apply to employees, agents, independent contractors, consultants, affiliates, or other parties related to Transferee) so long as such actions are unrelated to the undertaking in implementation of the Transferee Project, the Development Agreement, this Agreement, the TIF Project Plan and the CID Petition for the Downtown CID District or the management, design, development, redevelopment and construction of the Transferee Project.This Section shall not apply to willful misconduct or negligence of the City or Master Developer or the officers, employees or agents of City or Master Developer. This Section includes, but is not limited to, any repair, cleanup, remediation, detoxification, or preparation and implementation of any removal, remediation, response, closure or other plan (regardless of whether undertaken due to governmental action) concerning any hazardous substance or hazardous wastes includingpetroleum and its fractions as defined in (i) the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”; 42 U.S.C. Section9601,et seq.), (ii) the Resource Conservation and Recovery Act (“RCRA”; 42 U.S.C. Section 6901 et seq.) and (iii) Article 34, Chapter 65, K.S.A. and all amendments thereto, at any place where such Transferee owns or has control of real property pursuant to any of Transferee’s activities under the Development Agreement and this Agreement. The foregoing indemnity is intended to operate as an agreement pursuant to Section 107(e) of CERCLA to assure, protect, hold harmless and indemnify City and Master Developer from liability. 9.Payment of Taxes and Liens. Transferee hereby agrees as follows: (a)Payment of PropertyTaxes. During the Term of this Agreement, Transferee and its respective Affiliates shall pay when due all real estate taxes and assessments on the property it owns within the Districts. However, the obligation to pay real estate taxes and assessments onsuch property shall not be a personal obligation of the Transferee and its respective Affiliates but are subject to the same provisions related to enforcement and collection of real estate taxes and assessments under laws of the State. In the event that the Transferee or its Affiliates shall fail to pay all such applicable real estate taxes and assessments after any notice and cure periods set forth in Section 8.02of the Development Agreement, the Transferee understands and agrees that, among other things, the City may (i) terminate financing of the Transferee Project through Public Finance Proceeds,(ii) suspend all reimbursements of Eligible Transferee Costs through Public Finance Proceeds during any time that such real estate taxes and assessments on the property owned by Transferee and its respective affiliates within the Districts remain unpaidor (iii) exercise any other remedies under this Agreement and/or the Development Agreement.Notwithstanding the foregoing, nothing contained in this Agreementshall prohibit the Transferee and its respective affiliates from contesting the assessed value of the properties, improvements or the taxes thereon in good faith by appropriate proceedings; provided however that each such party shall pay any and all amounts that are contested under protest while any such proceedings are pending. The Transferee and its respective affiliates shall promptly notify the City in writing of a protest of real estate taxes or valuation of property owned by the Transferee or its respective affiliates within the Districts. 10 60231389.5 (b)Liens. Transferee and its respective affiliates further agree that no mechanics’or other liens shall be established or remain against the Transferee Project or the property within the Districts, or the funds in connection with any of the Transferee Project, for labor or materials furnished in connection with any acquisition, construction, additions, modifications, improvements, repairs, renewals or replacements so made. However, Transferee shall not be in defaultif mechanics’or other liens are filed or established and theTransferee and its respective Affiliates contests in good faith said mechanics’liens and in such event may permit the items so contested to remain undischarged and unsatisfied during the period of such contest and any appeal therefrom. (c)Sales Tax Collection.If Transfereeis engaged in the business of selling tangible personal property at retail or rendering or furnishing services taxable pursuant to the provisions of the Kansas retailers’ sales tax act and amendments thereto (K.S.A. 79-3601et seq.) within any of the Districts, Transfereeshall collect, and make returns of, all taxes levied under the Kansas retailers’ sales tax actandany CID Sales Tax imposed within the District in which Transfereeis engaged in such business, all in the manner and at the timesprescribed by applicable law. The Transfereeshall be obligated to provide the City, along with itssubmission to the Kansas Department of Revenue, copies of the monthly sales tax returns for itsbusinesses within the Districts. To the extent it may legally do so, information obtained pursuant to this Section shall be kept confidential by the City in accordance with Applicable Law and Requirements, including but not limited to K.S.A. 79-3657. 10.Damage, Destruction or Condemnation. (a)In the event of damage to or destruction of any portion of the Transferee Project (other than the public roads, public right of way and public lands within the Transferee Project) resulting from fire or other casualty during the Term (a “Casualty”), or in the event any portion of the Project Area is condemned or taken for any public or quasi-public use or title thereto is found to be deficient during the Term, the net proceeds of any insurance relating to such damage or destruction, the net proceeds of such condemnation or taking or the net proceeds of any realization on title insurance shall be paid into, and used in accordance with a construction escrow agreement reasonably satisfactory to the City, Transferee, and Transferee’s construction or permanent lender (“Casualty Escrow”). (b)If, at any time during the Term, the Transferee Project or any part thereof (other than the public roads, public right of way and public lands within the Project) shall be damaged or destroyed by a Casualty (the “Damaged Facilities”), Transferee, at its sole cost and expense, shall commence and thereafter proceed as promptly as possible to repair, restore and replace the Damaged Facilities as nearly as possible to their condition immediately prior to the Casualty and shall be entitled to draw upon the Casualty Escrow for payment of said costs. (c)If at any time during the Term, title to the whole or substantially all of the portion of the Project Area owned by Transferee (or its Affiliate) shall be taken in condemnation proceedings or by right of eminent domain, Transferee, at its sole 11 60231389.5 discretion, may terminate thisAgreement as of the date of such taking. For purposes of this Section, “substantially all of the Project Area”shall be deemed to have been taken if the City and Transferee, each acting reasonably and in good faith, determine that the untaken portion of the Project Area cannot be practically and economically used by Transferee for the purposes and at the times contemplated by this Agreement. (d)In the event of condemnation of less than the whole or substantially all of the portion of the Project Area owned by the Transferee (or its Affiliate) during the Term, Transferee, at its sole cost and expense, shall commence and thereafter proceed as promptly as possible to repair, restore and replace the remaining part of the Transferee Project, as nearly as possible,to itsformer condition, and shall be entitled to draw upon the Casualty Escrow for payment of said costs. (e)Nothing in this Section will require the Transferee to expend funds in excess of the Casualty Escrow or to perform any obligation in addition to those obligations contained in the Development Agreement or in this Agreement. 11.Rights of Access and Inspection. (a)Representatives of the City shall have the right of access to the Transferee Project, without charges or fees, at normal construction hours during the period of construction, for the purpose of ensuring compliance with this Agreement, including, but not limited to, the inspection of the work being performed in constructing, renovating, improving, equipping, repairing and installing the Transferee Project, so long as they comply with all safety rules. Except in case of emergency, prior to any such access, such representatives of the City will check in with the on-site manager. Such representatives of the City shall carry proper identification, shall insure their own safety, assuming the risk of injury, and shall not interfere with the construction activity. (b)The Transferee shall maintain complete, accurate, and clearly identifiable records with respect to the Transferee Project, Eligible TransfereeCosts and any other documents created pursuant to, or arising under, this Agreement, including, but not limited to, as applicable: all general contractor’s sworn statements, general contracts, subcontracts, material purchase orders, waivers of lien, and paid receipts and invoices (collectively, the “Records”). The Records shall be maintained during the term of this Agreement, and for a period of two (2) years thereafter (the “Retention Period”); provided, however, that if any litigation, claim or audit iscommenced prior to the expiration of the Retention Period, then the Retention Period shall be extended until all litigation, claims or audit findings have been completely terminated or resolved, without right of further appeal. (c)During the Retention Period, Transferee further agrees that the City, with reasonable advance notice and during normal business hours, shall have the right and authority to review, inspect, audit, and copy, from time to time, all of Transferee’s Records as pertinent to the purposes of, or to ensure compliance with, this Agreement. In addition, Transferee agrees to provide the City with copies of such Records, upon request. The City shall periodically report the findings of such inspections to Master 12 60231389.5 Developer in writing; provided, however, that nothing contained herein shall create an affirmative obligation of the Master Developer to perform any inspections of the Transferee Project or evaluate the adequacy of the construction of the Transferee Project. 12.Assignment and Transfer of this Agreement. Assignment and transfer of any or all rights, duties or obligations under this Agreement shall be governed by Section 9.03of the Development Agreement, which is expressly incorporated herein. 13.Defaults and Remedies. Events of Default and remedies therefore shall be governed by Article VIIIof the Development Agreement, which is expressly incorporated herein. 14.Release of Master Developer. To the extent that Transferee has assumed any obligations, terms or conditions of the Master Developer in connection with the Transferee Project under the Development Agreement pursuant to execution of this Agreement, the City hereby specifically agrees to release the Master Developer from suchobligations, terms and conditions. 15.Notice. Notice to City and Master Developer shall be as described in the Development Agreement. Notice to Transferee shall be made to the following: To the Transferee: 2125 Buffalo Heights Garden City, Kansas 67846 Attn: Amro Samy samy@gcclarioninn.com With copies to: Adams Jones Law Firm, P.A. 1635 N. Waterfront Pkwy., Ste. 200 Wichita, KS 67206 Attn: Mert Buckley mbuckley@adamsjones.com 16.Time of the Essence.Time is of the essence of this Agreement. The Parties will make every reasonable effort to expedite the subject matters hereof and acknowledge that the successful performance of this Agreement requires their continued cooperation.Required Disclosures.Each Party shall immediately notify the other Party of the occurrence of any material event which would cause any of the information furnished to other Party (by such furnishing Party) in connection with the matters covered in this Agreement to contain anyuntrue statement of any material fact or to omit to state any material fact required to be stated therein or necessary to make any statement made therein, in the light of the circumstances under which it was made, not misleading. 13 60231389.5 18.Non-Binding Mediation. If a dispute or controversy arises between the City, Master Developer, or Transferee under this Agreement, then any Party shall be entitled to request non-binding mediation, and the City, Master Developer, and Transferee agree to participate, in good faith,in any such mediation requested by any other Party. Any request for mediation pursuant to this section shall be made in writing and delivered to the other Parties within thirty (30) days of the action or decision giving rise to the dispute or controversy. The mediation shall occur in Salina, Kansas, and the cost of any such mediation shall be divided equally between the Parties. 19.Tax Implications. The Transfereeacknowledges and represents that (1) neither the City nor Master Developer, nor any of theirofficials, employees, consultants, attorneys or other agents has provided to the Transfereeany advice regarding the federal or state income tax implications or consequences of this Agreement and the transactions contemplated hereby, and (2) the Transfereeis relying solely upon its own tax advisors in this regard. 20.Survival. Notwithstanding the termination of this Agreement, Transferee’s obligations of insurance and indemnification set out herein shall survive the termination of this Agreement to the extent that any incident giving rise to a claim, suit, judgment or demand occurred during Term. 21.Kansas Law.This Agreement shall be governed by and construed in accordance with the laws of the State of Kansas. 22.Counterparts. This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same Agreement. 23.Recordation of Agreement. The Parties agree to execute and deliver a memorandum of this Agreement in proper form for recording in thereal property records of Saline County, Kansas, upon the request of a Party. 24.Cash Basis and Budget Laws. The Parties acknowledge and agree that the ability of the City to enter into and perform certain financial obligations pursuant to this Agreement are subject to the K.S.A. 10-1101et seq. and K.S.A. 79-2935et seq. 25.Electronic Storage.The Parties agree that the transactions described herein may be conducted and related documents may be received, sent or stored by electronic means. Copies, telecopies,facsimiles, electronic files, and other reproductions of original executed documents shall be deemed to be authentic and valid counterparts of such original documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law. 26.Master Developer Recusal.Transferee acknowledges that Section 3.10 of the Development Agreement prohibits the Master Developer from making or participating in the making of any Transferee Agreement in which the Master Developer or any of itsdirectors, officers, or shareholders has a substantial interest (as defined in K.S.A. 75-4301a) in the Third Party Developer entering into such Transferee Agreement. In such event, the City and the Third Party Developer of such Project Component shall bethe only parties which enter into such Transferee Agreement. Any Transferee Agreement the Master Developer makes or participates 14 60231389.5 in making in violation of Section 3.10 of the Development Agreement may be deemed void in part or whole at the reasonable discretion of the City. \[Remainder of page intentionally left blank. Signature pages immediately follow.\] 15 60231389.5 IN WITNESS WHEREOF, the City, Master Developer and Transferee have duly executed this Agreement pursuant to all requisite authorizations as of the date first above written. CITY OF SALINA, KANSAS ________________,Mayor \[SEAL\] ATTEST: Shandi Wicks, CMC, City Clerk APPROVED AS TO FORM: , City Attorney STATE OF KANSAS) ) ss. COUNTY OF SALINA) Onthis _______day of _________________, 201__, ____________________, personally known to me and after first being sworn did state that he/sheis the Mayorof the City of Salina, State of Kansas, and that the seal affixed to the foregoing instrument is the official Seal of the City of Salina, and that said instrument was signed and sealed on behalf of the City, and that the matters set forth herein are true and correct to the best of his/herand the City’s knowledge, information and belief, and acknowledge that he executed the same on behalf of the City as its free act and deed. Notary Public My Commission Expires: 60231389.5 IN WITNESS WHEREOF, the City, Master Developer and Transferee have duly executed this Agreement pursuant to all requisite authorizations as of the date first above written. MASTERDEVELOPER: SALINA2020, INC., a Kansas corporation By: Trace Walker, __________________ STATE OF KANSAS) ) ss. COUNTY OF ________________) On this _________ day of ____________, 201____, before me personally appeared Trace Walker, to me personally known, who being by me duly sworn did say that he is the ______________ of Salina2020, Inc., and that said instrument was signed and delivered on behalf of said corporation and acknowledged to me that he executed the same as the free act and deed of said corporation. In Testimony Whereof, I have hereunto set my hand and affixed my official seal the day and year first above written. NOTARY PUBLIC My Commission Expires: \[SEAL\] 60231389.5 IN WITNESS WHEREOF, the City, Master Developer and Transferee have duly executed this Agreement pursuant to all requisite authorizations as of the date first above written. TRANSFEREE: By: Printed Name: Title: Date: STATE OF _________________) ) ss. COUNTY OF _______________) On this day of ______________, 201____, before me personally appeared ____________, to me personally known, who being by me duly sworn did say that he/she is the _________________________ of ____________________________, a ______________ _______________________, and that said instrument was signed and delivered on behalf of said __________________________ and acknowledged to me that he/she executed the same as the free act and deed of said ________________________. In Testimony Whereof, I have hereunto set my hand and affixed my official seal the day and year first above written. Notary Public Printed Name: My Commission Expires: 60231389.5 EXHIBIT A TO TRANSFEREE AGREEMENT Description of Transferee Project SEE ATTACHED 60231389.2 NOVEMBER 19, 2016 EXHIBIT B TO TRANSFEREE AGREEMENT Legal Description and Boundary Map Lot 146 & N/2 of Lot 148, on Santa Fe Avenue, Original Town of Salina, Saline County, Kansas, commonly known as 214 S. Santa Fe, Salina, Kansas. 60231389.2 EXHIBIT C-1 TO TRANSFEREE AGREEMENT Critical Path Schedule \[TO BE ATTACHED\] 60231389.2 EXHIBIT C-2 TO TRANSFEREE AGREEMENT Project Budget \[TO BE ATTACHED\] 60231389.2 TRANSFEREE AGREEMENT THIS TRANSFEREE AGREEMENT (this “Agreement”), is made and entered into this ____ day of ___________, 20___2018 (the “Effective Date”) between and among the CITY OF SALINA, KANSAS, a municipal corporation duly organized under the laws of the State of Kansas (the “City”),SALINA 2020, INC., a Kansas corporation (the “Master Developer”) and ________________________,a ____________________Samys OC, LLC,a Kansas limited liability company (“Transferee”) (collectively, the “Parties” and each a “Party”). RECITALS: A. City and Master Developer have entered into that certain Development Agreement (the “Development Agreement”) dated as of January 23, 2017 concerning development of a mixed-use project located generally within downtown Salina, Kansas as more specifically described in Section 3.01 of the Development Agreement (the “Project”). Capitalized terms which are not otherwise defined herein shall have the meanings assigned to them in the Development Agreement. B. Article IX of the Development Agreement provides for assignment by the City and Master Developer of certain obligations, covenants, and agreements under the Development Agreement to third parties. Accordingly, the City and the Master Developer desire to transfer certain obligations, covenants, and agreements to Transferee in accordance with Article IX with respect to the portion of the Project described in Exhibit A attached hereto (the “Transferee Project”). A legal description and boundary map of the location of the Transferee Project is attached as Exhibit B hereto, which shall hereinafter be referred to as the “Project Area”. C. The Parties desire to enter into this Agreement so that the Transferee shall acknowledge, assume and agree to perform those obligations, covenants and agreements under the Development Agreement (as well as additional terms described herein) as the same pertain to the design, construction, completion and operation of the Transferee Project. AGREEMENT NOW, THEREFORE, in consideration of the foregoing and in consideration of the mutual covenants and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: 1.Incorporation of Recitals. The parties understand and agree that the Recitals set forth above are hereby incorporated as though more fully set forth herein. 2.Term of Agreement and Master Developer’s Rights. This Agreement shall commence upon the Effective Date and shall terminate upon that date which is the earlier of (i) the last day of the \[either the TIF Collection Period/ or CID Collection Period/date of termination of the STAR Bond Project Plan\],, whichever occurs later, or (ii) the date that the Transferee has been reimbursed for all Eligible Transferee Costs by Public Finance Proceeds, or (iii) the date this Agreement is terminated pursuant to Section 5 or Section 13 herein (the “Term”). Notwithstanding the foregoing, the Master Developer’s rights, duties, and obligations under this 60231389.5 Agreement shall expire on the date of the Certificate of Full Completion for the Transferee Project. 3.General Acknowledgement and Assumption. Transferee hereby acknowledges, assumes and agrees to perform each and every obligation, covenant and agreement under the Development Agreement, except as modified below, but only to the extent that the same shall pertain to the design, construction, completion and operation of the Transferee Project, each of which is hereby incorporated as though more fully set forth herein. Transferee hereby understands and agrees that the City or Master Developer may enforce the same directly against Transferee. Notwithstanding the foregoing, the Transferee Project to be completed by the Transferee shall be defined by Exhibit A to this Agreement, which shall control with regard to description of the Transferee Project. Transferee acknowledges that it has received a copy of the Development Agreement and any amendments thereto, and has reviewed the terms of same with counsel of its own election. 4.Specific Acknowledgement and Assumption. (a)Development Agreement Provisions Assumed by Transferee. In connection with the Transferee Project, Transferee specifically acknowledges, assumes and agrees to perform the following obligations, covenants and agreements, set forth in the Development Agreement, as modified in certain instances below: i.All of the terms and conditions in Article I (Definitions and Rules of Construction). ii.All of the representations and warranties of the Master Developer made in Article II. In addition, Transferee makes the following representations: a.No Material Change. There has been no material adverse change in the business, financial position, prospects or results of operations of the Transferee which could affect the Transferee’s ability to perform its obligations pursuant to the Agreement. b.Compliance with Laws. Transferee, to the best of its knowledge, is in compliance with all valid laws, ordinances, orders, decrees, decisions, rules, regulations and requirements of every duly constituted governmental authority, commission and court applicable to any of its affairs, business, operations as contemplated by this Agreement and the Development Agreement. c.Construction Permits. Except for Permitted Subsequent Approvals, all governmental permits and licenses required by applicable law to construct, occupy and operate the Transferee Project have been issued and are in full force and effect or, if the present stage of development does not allow such issuance, the Transferee reasonably believes, after due inquiry of the appropriate governmental officials, that such permits and licenses will be issued 2 60231389.5 in a timely manner in order to permit the Transferee Project to be constructed. iii.All of the terms and conditions set forth in Article III as the same relate to the Transferee Project and rights, duties and obligations of the Third- Party Developer of the Transferee Project. iv.All of the terms and conditions set forth in Article IV as the same relate to the Transferee Project and rights, duties and obligations of the Third- Party Developer of the Transferee Project. v.All of the terms and conditions set forth in Article VI as the same relate to the Transferee Project and rights, duties and obligations of the Third- Party Developer of the Transferee Project. vi.All of the terms and conditions set forth in Article VII as the same relate to the Transferee Project and rights, duties and obligations of the Third- Party Developer of the Transferee Project. vii.All of the terms and conditions set forth in Article VIII as the same relate to the Transferee Project and rights, duties and obligations of the Third- Party Developer of the Transferee Project. viii.All of the terms and conditions set forth in Article IX as the same relate to the Transferee Project and rights, duties and obligations of the Third- Party Developer of the Transferee Project. ix.All of the terms and conditions in Article X (General Provisions). (b)Non-Exclusive. Each of the foregoing provisions is hereby incorporated by reference and Transferee hereby understands and agrees that the City or Master Developer may enforce the same against Transferee in connection with the Transferee Project. Further, the Parties understand and agree that if and to the extent the various exhibits attached to the Development Agreement are referenced in the obligations that are acknowledged and assumed by the Transferee, such exhibits are hereby incorporated by reference as though more fully set forth herein. Notwithstanding the foregoing, the Transferee Project to be completed by the Transferee shall be defined by Exhibit A to this Agreement, which shall control with regard to description of the Transferee Project. The Transferee acknowledges that the provisions of the Development Agreement referenced in this Section is not exclusive of the provisions of the Development Agreement assumed by Transferee in connection with the Transferee Project, and that Transferee assumes all provisions of the Development Agreement applicable to the Transferee and the Transferee Project regardless of specific inclusion within this Section. (c)Provisions Specifically Not Assumed by Transferee. Notwithstanding anything set forth herein which is seemingly to the contrary, the Parties hereby acknowledge and agree that Transferee shall have no obligation to perform any of the 3 60231389.5 obligations under the following provisions, nor shall Transferee have any rights related to the following provisions: i.All of the terms and conditions set forth in the Development Agreement regarding development, financing, and operation of (or otherwise applying to) any other Project Component other than the Transferee Project. ii.All of the terms and conditions set forth in Article V (STAR Bond Issuance). 5.Performance Milestones. The Parties hereby agree that construction of the Transferee Project, subject to circumstances set forth in Section 8.08 of the Development Agreement, shall be undertaken in accordance with the following schedule (the “Performance Milestones”): (a)Commencement of the Transferee Project. Transferee shall commence construction of the Transferee Project by \[_____________________\].March 1, 2018. Provided, however, that Transferee shall not be required to commence the Transferee Project unless and until: i.The City is current on the milestones described in the schedule attached to its construction contract for the Phase I Streetscape Improvements; and ii.The Third Party Developer of the Hotel Project has expended a minimum of $200,000 in site work construction costs for the Hotel Project, which shall include costs for grading, demolition, utility relocation, and footings and foundations. (b)Commencement of the Transferee Project shall mean: i.A construction permit, and all other permits required pursuant to the City codes and ordinances, necessary for the commencement of construction or provision of the Transferee Project; ii.Certificates evidencing that insurance policies have been procured by Transferee for all insurance required pursuant to Section 7 of this Agreement; iii.A copy of an executed guaranteed maximum price contract between Transferee and its general contractor for the construction and completion of the Transferee Project (or equivalent agreement in the discretion of the City and the Master Developer), evidence that such general contractor is a registered contractor in good standing in the City of Salina, Kansas, the State of Kansas, and its state of domicile, and copies of performance, labor, and material payment bonds in connection with the Transferee Project (unless City and Master Developer agree otherwise in their joint discretion); 4 60231389.5 iv.Documents reasonably satisfactory to the City and Master Developer that Transferee has obtained financing adequate to fully and finally construct and develop the Transferee Project in accordance with the critical path schedule and final project budget; v.A critical path schedule and final project budget reasonably consistent with the preliminary project budget for the development and construction of the Transferee Project, and agreement upon the same by Transferee, the City Representative, and Master Developer (to be supplemented and attached hereto as Exhibit C-1 and Exhibit C-2, respectively); vi.Any and all other materials reasonably requested by the City and Master Developer evidencing the ability of Transferee to imminently commence construction of the Transferee Project with the capability to fully and finally complete the Transferee Project with diligence, which may include, without limitation, elevations, marketing materials, financing information, and business plans; \[For New Business TIF Requests and Retail Improvement Requests –A copy of an executed lease with any proposed tenant or, if Transferee is a tenant, a copy of its lease with the landlord\]; vii.Transferee’s undertaking of a continuous and uninterrupted program of construction for such Transferee Project. (c)Construction of the Transferee Project. Transferee shall construct the Transferee Project in a good and workmanlike manner in accordance with the terms of this Agreement and the Development Agreement. Upon reasonable advance notice, the Transferee shall meet with the City to review and discuss the design and construction of the Transferee Project in order to enable the City to monitor the status of construction and to determine that the Transferee Project is being performed and completed in accordance with this Agreement and the Development Agreement. (d)Completion of the Transferee Project. The Transferee shall cause the Transferee Project to be completed with due diligence. Transferee shall complete construction of the Transferee Project by _____________________.December 1, 2018. Provided, however, that the date for completion of the Transferee Project shall be extended unless: i.The City has completed the street and sidewalk components of the Phase I Streetscape Improvements from Mulberry Street to Walnut Street at least fifteen (15) days prior to the completion date described herein; and ii.The intersections at Walnut and Santa Fe and Mulberry and Santa Fe have completely opened to full and regular traffic flow at least fifteen (15) days prior to the completion date described herein. 5 60231389.5 Completion of the Transferee Project shall mean receipt of a Certificate of Completion as defined in Section 3.07 of the Development Agreement. In the event commencement of the Transferee Project is delayed as a result of the conditions described in Sections 5(a), 5(d)(i), or 5(d)(ii) above, the deadline for completion of the Transferee Project described in this section shall be extended by a period of days equal to the period of days corresponding to the delay caused by conditions described in Section 5(a), 5(d)(i), or 5(d)(ii) above. Notwithstanding anything contained herein to the contrary, in no event shall the Transferee be relieved of its obligation to complete the Transferee Project as a result of such delay. (e)Failure to Comply with Performance Milestones. i.Failure to Timely Commence or Complete the Project. In the event that Transferee shall fail to meet any of the Performance Milestones set forth in this Section, then the City may require Transferee to appear before the City to show cause as to why Transferee failed to comply with the Performance Milestones. If Transferee cannot show cause for the delay which is reasonably satisfactory to the City, the City may exercise any or all of the following remedies: a.Failure to Timely Commence. In the event Transferee does not commence the Transferee Project within 90 days following the commencement date identified in Section 5(a) herein, the City may provide written notice to Transferee of its election to reduce the Public Financing Cap described in Section 6(b) herein by twenty-five percent (25%), unless otherwise agreed by the City and Master Developer. In the event Transferee does not commence the Transferee Project within 120 days following the commencement date identified in Section 5(a) herein, the City may provide written notice to Transferee of its election to cumulatively reduce the Public Financing Cap described in Section 6(b) herein by fifty percent (50%), unless otherwise agreed by the City and Master Developer. In the event Transferee does not commence the Transferee Project within 180 days following the commencement date identified in Section 5(a) herein, the City may provide written notice to Transferee of its election to terminate the rights, duties and obligations of Transferee under the Development Agreement and this Agreement unless otherwise agreed by the City and Master Developer. The City shall provide written notice to the Master Developer and Transferee of its intent to provide notice to the Transferee as provided herein a minimum of twenty (20) business days prior to providing such notice to Transferee. Each of the deadlines described in this section shall be subject to extensions of time as set forth in Section 8.09 of the Development Agreement. In the event the City provides notice to the Transferee of a reduction to its Public Financing Cap pursuant to this section, the City and Master Developer may elect, in their joint discretion, to provide Transferee written notice of an extension of the completion deadline contained in Section 5(cd). 6 60231389.5 b.Failure to Timely Complete. In the event Transferee does not complete the Transferee Project within 90 days following the completion date identified in Section 5(cd) herein, the City may provide written notice to Transferee of its election to reduce the Public Financing Cap described in Section 6(b) herein by twenty-five percent (25%), unless otherwise agreed by the City and Master Developer. In the event Transferee does not complete the Transferee Project within 120 days following the completion date identified in Section 5(cd) herein, the City may provide written notice to Transferee of its election to cumulatively reduce the Public Financing Cap described in Section 6(b) herein by fifty percent (50%), unless otherwise agreed by the City and Master Developer. In the event Transferee does not complete the Transferee Project within 180 days following the completion date identified in Section 5(cd) herein, the City may provide written notice to Transferee of its election to terminate the rights, duties and obligations of Transferee under the Development Agreement and this Agreement, unless otherwise agreed by the City and Master Developer. The City shall provide written notice to the Master Developer and Transferee of its intent to provide notice to the Transferee as provided herein a minimum of twenty (20) business days prior to providing such notice to Transferee. Each of the deadlines described in this section shall be subject to extensions of time as set forth in Section 8.09 of the Development Agreement. ii.Rights and Remedies Cumulative. Except as otherwise expressly stated in this Agreement or the Development Agreement, the rights and remedies of the parties are cumulative, and the exercise by a party of one or more of such rights or remedies under this Agreement or the Development Agreement (pursuant to Section 13 herein) shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. iii.Delay Caused by Streetscape Construction. In no event shall the City pursue any remedies contained in this section for delays in commencement or completion of the Transferee Project directly caused by construction of any Streetscape and Public Infrastructure Improvements. In the event of delays in the commencement or completion of the Transferee Project directly caused by construction of the Streetscape and Public Infrastructure Improvements, the obligations of the Transferee to commence or complete the Transferee Project shall be delayed an amount of time equivalent to the period of delay directly caused by construction of the Streetscape and Public Infrastructure Improvements. In such event the Transferee shall provide written documentation to the City that evidences that the delay in such Streetscape and Public Infrastructure Improvements will or has directly resulted in the delay of commencement or completion of the Transferee Project. 6.Public Finance Proceeds and City Funds. (a)Conditions Precedent to Access to Public Finance Proceeds. Prior to access to Public Finance Proceeds and/or City Funds for purposes of partially financing 7 60231389.5 the Transferee Project and the right to submit a Certification of Expenditures for reimbursement for Eligible Transferee Costs through Public Finance Proceeds and/or City Funds pursuant to the provisions of the Development Agreement, Transferee must have obtained a Certificate of Completion for the Transferee Project as defined in Section 3.07 of the Development Agreement (the “Public Finance Access Condition”).\[This Section shall not be utilized in the Transferee Agreement for the Stiefel Improvements or the Car Museum.\] (b)Public Financing Cap. Following Transferee’s satisfaction of the Public Finance Access Condition (as applicable), City and Master Developer will provide Transferee access to \[STAR Bond Proceeds/1)TIF Proceeds/CID Proceeds/City Funds\] in the amount of $\[X\]$300,000 from the \[X\]Old Chicago TIF Fund and 2) CID Proceeds in the amount of $50,000 from the Old Chicago CID Fund to be used by Transferee solely for financing those costs of the Transferee Project as identified in the column labeled\[STAR Bond Uses/TIF Uses/ and CID Uses/City Funds Uses\], respectively, in the Project Budget attached as Exhibit C-2(“(collectively, the “Eligible Transferee Costs”), in all cases subject to and in accordance with the terms of the Development Agreement, this Agreement, the Bond Trust Indenture, and Kansas law (the “Public Financing Cap”).\[For Transferee Projects to be reimbursed with TIF Proceeds/CID Proceeds add “Transferee hereby acknowledges and agrees such Public Finance Proceeds shall be available to Transferee on a pay-as-you-go basis in accordance with the terms of the Development Agreement and that City and Master Developer do not guarantee any specific amount of Public Finance Proceeds will actually be available to Transferee for reimbursement of Eligible Transferee Costs. Further, Transferee hereby acknowledges and agrees it shall not commence or join any cause of action or other legal recourse under this Agreement, the Development Agreement, or in law or equity against City or Master Developer (and acknowledges that it possesses no such cause of action or legal recourse) in the event Transferee receives reimbursement for Eligible Transferee Costs through Public Finance Proceeds in an amount less than Transferee’s Public Financing Cap.”\].. In the event City Funds shall be made available to Transferee to partially finance the Transferee Project pursuant to the terms of this Agreement, City agrees and acknowledges that City shall provide to Transferee (pursuant to the process described in Article VI of the Development Agreement) such full amount of City Funds identified herein so long as Transferee is in compliance with all terms of this Agreement and the Development Agreement. All costs of developing the Transferee Project, including Eligible Transferee Costs, in excess of the Public Finance Proceeds and City Funds actually received by Transferee shall be the sole responsibility of Transferee. In order to access such \[STAR Bond Proceeds/TIF Proceeds/ and CID Proceeds/City Funds\],, Transferee shall submit Certifications of Expenditures to the City in a manner consistent with Article VI of the Development Agreement\[For STAR Bond reimbursement add “and a Project Fund Disbursement Request form in a manner consistent with the terms of that certain Bond Trust Indenture”\].. Public Finance Proceeds Annual Allotment. \[Include for Transferees granted reimbursement through New Business TIF Proceeds, New Retail CID Proceeds or Existing Retail CID Proceeds\] Pursuant to the terms of that certain Supplemental Agreement, Transferee’s Public Finance Proceeds Annual Allotment shall equal \[X\]. 8 60231389.5 Such Public Finance Proceeds Annual Allotment may be utilized to reimburse Eligible Costs from the \[X\] Fund in accordance with the terms of this Agreement, the Development Agreement,and the Supplemental Agreement. (c)\[STAR Bonds. The City expects to issue STAR Bonds to provide STAR Bond Proceeds for use in reimbursing a portion of the costs ofthe Transferee Project, among other Project Components, and has engaged the Underwriter to underwrite the STAR Bonds. The Underwriter has advised the City that various representations, warranties and assurances from the Transferee may be required to assure investors in the STAR Bonds that the Transfereecritical Project Components will be constructed and opened in a timely manner.Transferee hereby acknowledges and agrees that Furthermore, the timingsuccess of, access to and the amountCID and TIF portions of any STAR Bond Proceeds to be made available to Transferee isthe Downtown Revitalization Plan may be dependent on the City’s ability to issue the STAR Bondson terms that are commercially reasonable to the City and the Underwriter’s ability to successfully underwrite such STAR Bonds.. To the extent required by the Underwriteraccommodate the STAR Bond issuance process, the Transferee agrees to provide the following information in form and substance reasonably requested by the Underwriter, including, but not limited to, the following for the Transferee Project: (i)guaranteed maximum price construction contract or other equivalent agreement for construction services, as appropriate, (ii) payment and performance bonds or other similar indicia of security for completion of the Transferee Project, (iii) insurance policies, (iviii) evidence of availability of loan and equity funds necessary for the timely completion of the Transferee Project, which may be provided pursuant to a letter for commitment to finance the Transferee Project issued by a qualified lender; (viv) any leases or contracts for any applicable portion of the Transferee Project and (viv) cooperation in calculation of the sales tax for any portion of the Transferee Project that will generate taxable retail sales.\]. Public Finance Limitation. \[This Section shall not be utilized in the Transferee Agreement for either the Stiefel Improvements or the Car Museum. This Section, including the percentage amount of the Private Contribution, shall be modified in each Transferee Agreement; provided, however, that the Private Contribution percentage shall not be less than 50%. Notwithstanding the foregoing, each Transferee Agreement for use of Existing Retail CID Proceeds for Transferee Projects commenced during construction of the Streetscape and Public Infrastructure Improvements shallrequire expenditure of Total Project Costs in a ratio of 30% Private Contribution to every 70% of Existing Retail CID Proceeds reimbursed to such Transferee.\] (d)Public Finance Limitation. i.In addition to the foregoing conditions applicable to the disbursement of \[STAR Bond Proceeds/TIF Proceeds/ and CID Proceeds\] to the Transferee, the \[STAR Bond Proceeds/TIF Proceeds/ and CID Proceeds\] available to Transferee for reimbursement of Eligible Transferee Costs shall not exceed_______fifty percent (_____%)(50%) of the amount of the actual costs expended by Transferee to develop the Transferee Project (“Total Project Costs”). The remainder of all Total Project Costs, in an amount no less than ________fifty 9 60231389.5 percent (_____%)(50%) of such Total Project Costs, shall be paid by Transferee through a combination of private debt and equity (the “Private Contribution”). In other words, there shall not be more than _____%50% of Total Project Costs paid with\[STAR Bond Proceeds/a combination of TIF Proceeds/ and CID Proceeds\] (the “Public Finance Limitation”). ii.The Certification of Expenditures submitted by Transferee shall include evidence of payment for Total Project Costs paid with the Private Contribution in an amount which is no less than ______%fifty percent (50%) of the Total Project Costs incurred at the time of such Certification of Expenditures in order to satisfy the Public Finance Limitation. In other words, the cumulative amount of Total Project Costs included in the Certification of Expenditures from the Private Contribution must equal no less than _____% fifty percent (50%) of the cumulative amount of Total Project Costs in order for _____%fifty (50%) of such Total Project Costs to be eligible for reimbursement through \[STAR Bond Proceeds/a combination of TIF Proceeds/ and CID Proceeds\].. 7.Insurance. Each Third-Party Developer shall keep the Transferee Project continuously insured against such risks and in such amounts, with such deductible provisions as are customary in connection with the operation of facilities of the type and size comparable to the Transferee Project. 8.Indemnification of City and Master Developer. Transferee agrees to indemnify and hold the City and Master Developer, and the employees, agents and independent contractors and consultants of the City and the Master Developer (collectively, the “Indemnified Parties”) harmless from and against any and all suits, claims, costs of defense, damages, injuries, liabilities, judgments, costs and/or expenses, including court costs and reasonable attorneys’ fees, resulting from, arising out of, or in any way connected with: (a)Transferee’s actions and undertaking in implementation of the Transferee Project, the Development Agreement, this Agreement, the TIF Project Plan, and the \[Project Plans/CIDPetitions\];Petition for the Downtown CID District; (b)the negligence or willful misconduct of Transferee, its employees, agents or independent contractors and consultants in connection with the management, design, development, redevelopment and construction of the Transferee Project; and (c)any delay or expense resulting from any litigation filed against Transferee by any member or shareholder of Transferee, any prospective investor, prospective partner or joint venture partner, lender, co-proposer, architect, contractor, consultant or other vendor. This Section shall not apply to willful misconduct or grossactions of unrelated third parties (but shall expressly apply to employees, agents, independent contractors, consultants, affiliates, or other parties related to Transferee) so long as such actions are unrelated to the undertaking in implementation of the Transferee Project, the Development Agreement, this Agreement, the TIF Project Plan and the CID Petition for the Downtown CID District or the 10 60231389.5 management, design, development, redevelopment and construction of the Transferee Project. This Section shall not apply to willful misconduct or negligence of the City or Master Developer or the officers, employees or agents of City or Master Developer. This Section includes, but is not limited to, any repair, cleanup, remediation, detoxification, or preparation and implementation of any removal, remediation, response, closure or other plan (regardless of whether undertaken due to governmental action) concerning any hazardous substance or hazardous wastes including petroleum and its fractions as defined in (i) the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”; 42 U.S.C. Section 9601, et seq.), (ii) the Resource Conservation and Recovery Act (“RCRA”; 42 U.S.C. Section 6901 et seq.) and (iii) Article 34, Chapter 65, K.S.A. and all amendments thereto, at any place where such Transferee owns or has control of real property pursuant to any of Transferee’s activities under the Development Agreement and this Agreement. The foregoing indemnity is intended to operate as an agreement pursuant to Section 107(e) of CERCLA to assure, protect, hold harmless and indemnify City and Master Developer from liability. 9.Payment of Taxes and Liens. Transferee hereby agrees as follows: (a)Payment of Property Taxes. During the Term of this Agreement, Transferee and its respective Affiliates shall pay when due all real estate taxes and assessments on the property it owns within the Districts. However, Thethe obligation to pay real estate taxes and assessments on such property shall not be a personal obligation of the Transferee and its respective Affiliates but are subject to the same provisions related to enforcement and collection of real estate taxes and assessments under laws of the State. In the event that the Transferee or its Affiliates shall fail to pay all such applicable real estate taxes and assessments after any notice and cure periods set forth in Section 8.02 of the Development Agreement, the Transferee understands and agrees that, among other things, the City may (i) terminate financing of the Transferee Project through Public Finance Proceeds, (ii) suspend all reimbursements of Eligible Transferee Costs through Public Finance Proceeds during any time that such real estate taxes and assessments on the property owned by Transferee and its respective affiliates within the Districts remain unpaid or (iii) exercise any other remedies under this Agreement and/or the Development Agreement. Notwithstanding the foregoing, nothing contained in this Agreement shall prohibit the Transferee and its respective affiliates from contesting the assessed value of the properties, improvements or the taxes thereon in good faith by appropriate proceedings; provided however that each such party shall pay any and all amounts that are contested under protest while any such proceedings are pending. The Transferee and its respective affiliates shall promptly notify the City in writing of a protest of real estate taxes or valuation of property owned by the Transferee or its respective affiliates within the Districts. (b)Liens. Transferee and its respective affiliates further agree that no mechanics’ or other liens shall be established or remain against the Transferee Project or the property within the Districts, or the funds in connection with any of the Transferee Project, for labor or materials furnished in connection with any acquisition, construction, additions, modifications, improvements, repairs, renewals or replacements so made. However, Transferee shall not be in default if mechanics’ or other liens are filed or established and the Transferee and its respective Affiliates contests in good faith said 11 60231389.5 mechanics’ liens and in such event may permit the items so contested to remain undischarged and unsatisfied during the period of such contest and any appeal therefrom. (c)Sales Tax Collection.If Transferee is engaged in the business of selling tangible personal property at retail or rendering or furnishing services taxable pursuant to the provisions of the Kansas retailers’ sales tax act and amendments thereto (K.S.A. 79-3601 et seq.) within any of the Districts, Transferee shall collect, and make returns of, all taxes levied under the Kansas retailers’ sales tax act and any CID Sales Tax imposed within the District in which Transferee is engaged in such business, all in the manner and at the times prescribed by applicable law. The Transferee shall be obligated to provide the City, along with its submission to the Kansas Department of Revenue, copies of the monthly sales tax returns for its businesses within the Districts. To the extent it may legally do so, information obtained pursuant to this Section shall be kept confidential by the City in accordance with Applicable Law and Requirements, including but not limited to K.S.A. 79-3657. 10.Damage, Destruction or Condemnation. (a)In the event of damage to or destruction of any portion of the Transferee Project (other than the public roads, public right of way and public lands within the Transferee Project) resulting from fire or other casualty during the Term (a “Casualty”), or in the event any portion of the Project Area is condemned or taken for any public or quasi-public use or title thereto is found to be deficient during the Term, the net proceeds of any insurance relating to such damage or destruction, the net proceeds of such condemnation or taking or the net proceeds of any realization on title insurance shall be paid into, and used in accordance with a construction escrow agreement reasonably satisfactory to the City, Transferee, and Transferee’s construction or permanent lender (“Casualty Escrow”). (b)If, at any time during the Term, the Transferee Project or any part thereof (other than the public roads, public right of way and public lands within the Project) shall be damaged or destroyed by a Casualty (the “Damaged Facilities”), Transferee, at its sole cost and expense, shall commence and thereafter proceed as promptly as possible to repair, restore and replace the Damaged Facilities as nearly as possible to their condition immediately prior to the Casualty and shall be entitled to draw upon the Casualty Escrow for payment of said costs. (c)If at any time during the Term, title to the whole or substantially all of the portion of the Project Area owned by Transferee (or its Affiliate) shall be taken in condemnation proceedings or by right of eminent domain, Transferee, at its sole discretion, may terminate this Agreement as of the date of such taking. For purposes of this Section, “substantially all of the Project Area” shall be deemed to have been taken if the City and Transferee, each acting reasonably and in good faith, determine that the untaken portion of the Project Area cannot be practically and economically used by Transferee for the purposes and at the times contemplated by this Agreement. 12 60231389.5 (d)In the event of condemnation of less than the whole or substantially all of the portion of the Project Area owned by the Transferee (or its Affiliate) during the Term, Transferee, at its sole cost and expense, shall commence and thereafter proceed as promptly as possible to repair, restore and replace the remaining part of the Transferee Project, as nearly as possible, to its former condition, and shall be entitled to draw upon the Casualty Escrow for payment of said costs. (e)Nothing in this Section will require the Transferee to expend funds in excess of the Casualty Escrow or to perform any obligation in addition to those obligations contained in the Development Agreement or in this Agreement. 11.Rights of Access and Inspection. (a)Representatives of the City shall have the right of access to the Transferee Project, without charges or fees, at normal construction hours during the period of construction, for the purpose of ensuring compliance with this Agreement, including, but not limited to, the inspection of the work being performed in constructing, renovating, improving, equipping, repairing and installing the Transferee Project, so long as they comply with all safety rules. Except in case of emergency, prior to any such access, such representatives of the City will check in with the on-site manager. Such representatives of the City shall carry proper identification, shall insure their own safety, assuming the risk of injury, and shall not interfere with the construction activity. (b)The Transferee shall maintain complete, accurate, and clearly identifiable records with respect to the Transferee Project, Eligible Transferee Costs and any other documents created pursuant to, or arising under, this Agreement, including, but not limited to, as applicable: all general contractor’s sworn statements, general contracts, subcontracts, material purchase orders, waivers of lien, and paid receipts and invoices (collectively, the “Records”). The Records shall be maintained during the term of this Agreement, and for a period of two (2) years thereafter (the “Retention Period”); provided, however, that if any litigation, claim or audit is commenced prior to the expiration of the Retention Period, then the Retention Period shall be extended until all litigation, claims or audit findings have been completely terminated or resolved, without right of further appeal. (c)During the Retention Period, Transferee further agrees that the City, with reasonable advance notice and during normal business hours, shall have the right and authority to review, inspect, audit, and copy, from time to time, all of Transferee’s Records as pertinent to the purposes of, or to ensure compliance with, this Agreement. In addition, Transferee agrees to provide the City with copies of such Records, upon request. The City shall periodically report the findings of such inspections to Master Developer in writing; provided, however, that nothing contained herein shall create an affirmative obligation of the Master Developer to perform any inspections of the Transferee Project or evaluate the adequacy of the construction of the Transferee Project. 13 60231389.5 12.Assignment and Transfer of this Agreement. Assignment and transfer of any or all rights, duties or obligations under this Agreement shall be governed by Section 9.03 of the Development Agreement, which is expressly incorporated herein. 13.Defaults and Remedies. Events of Default and remedies therefore shall be governed by Article VIII of the Development Agreement, which is expressly incorporated herein. 14.Release of Master Developer. To the extent that Transferee has assumed any obligations, terms or conditions of the Master Developer in connection with the Transferee Project under the Development Agreement pursuant to execution of this Agreement, the City hereby specifically agrees to release the Master Developer from such obligations, terms and conditions. 15.Notice . Notice to City and Master Developer shall be as described in the Development Agreement. Notice to Transferee shall be made to the following: To the Transferee: _____________________________ _____________________________ _____________________________ Attn: ________________________ With copies to: _____________________________ _____________________________ _____________________________ _____________________________ 16.Time of the Essence. Time is of the essence of this Agreement. The Parties will make every reasonable effort to expedite the subject matters hereof and acknowledge that the successful performance of this Agreement requires their continued cooperation.Required Disclosures. Each Party shall immediately notify the other Party of the occurrence of any material event which would cause any of the information furnished to other Party (by such furnishing Party) in connection with the matters covered in this Agreement to contain any untrue statement of any material fact or to omit to state any material fact required to be stated therein or necessary to make any statement made therein, in the light of the circumstances under which it was made, not misleading. 18.Non-Binding Mediation. If a dispute or controversy arises between the City, Master Developer, or Transferee under this Agreement, then any Party shall be entitled to request non-binding mediation, and the City, Master Developer, and Transferee agree to participate, in good faith, in any such mediation requested by any other Party. Any request for mediation pursuant to this section shall be made in writing and delivered to the other Parties within thirty (30) days of the action or decision giving rise to the dispute or controversy. The mediation shall occur in Salina, Kansas, and the cost of any such mediation shall be divided equally between the Parties. 14 60231389.5 19.Tax Implications. The Transferee acknowledges and represents that (1) neither the City nor Master Developer, nor any of their officials, employees, consultants, attorneys or other agents has provided to the Transferee any advice regarding the federal or state income tax implications or consequences of this Agreement and the transactions contemplated hereby, and (2) the Transferee is relying solely upon its own tax advisors in this regard. 20.Survival. Notwithstanding the termination of this Agreement, Transferee’s obligations of insurance and indemnification set out herein shall survive the termination of this Agreement to the extent that any incident giving rise to a claim, suit, judgment or demand occurred during Term. 21.Kansas Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Kansas. 22.Counterparts . This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same Agreement. 23.Recordation of Agreement. The Parties agree to execute and deliver a memorandum of this Agreement in proper form for recording in the real property records of Saline County, Kansas, upon the request of a Party. 24.Cash Basis and Budget Laws. The Parties acknowledge and agree that the ability of the City to enter into and perform certain financial obligations pursuant to this Agreement are subject to the K.S.A. 10-1101 et seq. and K.S.A. 79-2935 et seq. 25.Electronic Storage. The Parties agree that the transactions described herein may be conducted and related documents may be received, sent or stored by electronic means. Copies, telecopies, facsimiles, electronic files, and other reproductions of original executed documents shall be deemed to be authentic and valid counterparts of such original documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law. 26.Master Developer Recusal. Transferee acknowledges that Section 3.10 of the Development Agreement prohibits the Master Developer from making or participating in the making of any Transferee Agreement in which the Master Developer or any of its directors, officers, or shareholders has a substantial interest (as defined in K.S.A. 75-4301a) in the Third- Party Developer entering into such Transferee Agreement. In such event, the City and the Third- Party Developer of such Project Component shall be the only parties which enter into such Transferee Agreement. Any Transferee Agreement the Master Developer makes or participates in making in violation of Section 3.10 of the Development Agreement may be deemed void in part or whole at the reasonable discretion of the City. \[Remainder of page intentionally left blank. Signature pages immediately follow.\] 15 60231389.5 IN WITNESS WHEREOF, the City, Master Developer and Transferee have duly executed this Agreement pursuant to all requisite authorizations as of the date first above written. CITY OF SALINA, KANSAS ________________, Mayor \[SEAL\] ATTEST: Shandi Wicks, CMC, City Clerk APPROVED AS TO FORM: , City Attorney STATE OF KANSAS ) ) ss. COUNTY OF SALINA ) On this _______day of _________________, 201__, ____________________, personally known to me and after first being sworn did state that he/she is the Mayor of the City of Salina, State of Kansas, and that the seal affixed to the foregoing instrument is the official Seal of the City of Salina, and that said instrument was signed and sealed on behalf of the City, and that the matters set forth herein are true and correct to the best of his/her and the City’s knowledge, information and belief, and acknowledge that he executed the same on behalf of the City as its free act and deed. Notary Public My Commission Expires: IN WITNESS WHEREOF, the City, Master Developer and Transferee have duly executed this Agreement pursuant to all requisite authorizations as of the date first above written. MASTERDEVELOPER: SALINA2020, INC., a Kansas corporation By: Trace Walker, __________________ STATE OF KANSAS ) ) ss. COUNTY OF ________________ ) On this _________ day of ____________, 201____, before me personally appeared Trace Walker, to me personally known, who being by me duly sworn did say that he is the ______________ of Salina2020, Inc., and that said instrument was signed and delivered on behalf of said corporation and acknowledged to me that he executed the same as the free act and deed of said corporation. In Testimony Whereof, I have hereunto set my hand and affixed my official seal the day and year first above written. NOTARY PUBLIC My Commission Expires: \[SEAL\] IN WITNESS WHEREOF, the City, Master Developer and Transferee have duly executed this Agreement pursuant to all requisite authorizations as of the date first above written. TRANSFEREE: By: Printed Name: Title: Date: STATE OF _________________ ) ) ss. COUNTY OF _______________ ) On this day of ______________, 201____, before me personally appeared ____________, to me personally known, who being by me duly sworn did say that he/she is the _________________________ of ____________________________, a ______________ _______________________, and that said instrument was signed and delivered on behalf of said __________________________ and acknowledged to me that he/she executed the same as the free act and deed of said ________________________. In Testimony Whereof, I have hereunto set my hand and affixed my official seal the day and year first above written. Notary Public Printed Name: My Commission Expires: EXHIBIT A TO TRANSFEREE AGREEMENT Description of Transferee Project SEE ATTACHED EXHIBIT B TO TRANSFEREE AGREEMENT Legal Description and Boundary Map Lot 146 & N/2 of Lot 148, on Santa Fe Avenue, Original Town of Salina, Saline County, Kansas, commonly known as 214 S. Santa Fe, Salina, Kansas. EXHIBIT C-1 TO TRANSFEREE AGREEMENT Critical Path Schedule \[TO BE ATTACHED\] EXHIBIT C-2 TO TRANSFEREE AGREEMENT Project Budget \[TO BE ATTACHED\] MEMORANDUM To: Mike Schrage City of Salina Jason Gage City of Salina John Klaus Stifel Jim Lahay Stifel Roger Edgar George K. Baum & Company From: Andy Pfister Development Strategies Date January 4, 2018 Re: Updated Revenue Projections for Salina STAR Bond District _____________________________________________________________________________________ As requested, Development Strategies reviewed the recent changes to The Alley and analyzed their prospective impact on revenue projections. The developers of The Alley reduced the building size from 47,000 square feet to 40,000 square feet, thereby reducing the number of bowling lanes from 32 (24 regular and 8 boutique) to 26 (20 regular and 6 boutique). In addition, the amount of concourse area and the small party rooms were eliminated, the latter because they are seldom used in The Alley’s existing locations in Hutchinson and Wichita. It is our understanding that The Alley will still include laser tag, games, and a restaurant, as initially proposed. Our original revenue projections for the Alley totaled $4,000,000, or $85.10 per sq. ft. The proposed changes to The Alley’s design will improve the overall efficiency of the facility, but after careful consideration and review, it is prudent to reduce the projected taxable sales to $3,700,000, or $92.50 per sq. ft. The tables on the following pages summarize the revised revenue projections and the overall impact this adjustment has on the availability of various taxes for STAR Bond repayment. All prior modifications remain.. A full account of all assumptions used in the calculation of revenue for each project component can be found in the full report prepared in January 2017 for the City of Salina. DEVELOPMENT STRATEGIES 1 The Alley: Projected Taxable Sales and Sales Taxes Generated to Support STAR 1 Bonds Total Sales Portion Eligible Eligible for Sales Tax Revenue for STAR Bond STAR Bond Retail for STAR Bond Total SalesRepaymentRepaymentSales TaxRepayment 2019Year 1$ 3,647,00042%$ 1,519,583 8.35%$ 126,926 2020Year 2$ 3,719,940100%$ 3,719,940 8.35%$ 310,715 2021Year 3$ 3,794,339100%$ 3,794,339 8.35%$ 316,930 2022Year 4$ 3,870,226100%$ 3,870,226 8.35%$ 323,268 2023Year 5$ 3,947,630100%$ 3,947,630 8.35%$ 329,734 2024Year 6$ 4,026,583100%$ 4,026,583 8.35%$ 336,328 2025Year 7$ 4,107,114100%$ 4,107,114 8.35%$ 343,055 2026Year 8$ 4,189,257100%$ 4,189,257 8.35%$ 349,916 2027Year 9$ 4,273,042100%$ 4,273,042 8.35%$ 356,914 2028Year 10$ 4,358,503100%$ 4,358,503 8.35%$ 364,053 2029Year 11$ 4,445,673100%$ 4,445,673 8.35%$ 371,334 2030Year 12$ 4,534,586100%$ 4,534,586 8.35%$ 378,760 2031Year 13$ 4,625,278100%$ 4,625,278 8.35%$ 386,336 2032Year 14$ 4,717,783100%$ 4,717,783 8.35%$ 394,062 2033Year 15$ 4,812,139100%$ 4,812,139 8.35%$ 401,944 2034Year 16$ 4,908,382100%$ 4,908,382 8.35%$ 409,982 2035Year 17$ 5,006,549100%$ 5,006,549 8.35%$ 418,182 2036Year 18$ 5,106,680100%$ 5,106,680 8.35%$ 426,546 2037Year 19$ 5,208,814100%$ 5,208,814 8.35%$ 435,077 2038Year 20$ 5,312,990100%$ 5,312,990 8.35%$ 443,778 2039Year 21$ 5,419,25058%$ 3,161,229 8.35%$ 264,048 $ 94,031,758 $ 89,646,320$ 7,487,888 DEVELOPMENT STRATEGIES 2 Updated Revenue Projections for Salina STAR Bond District January 4, 2018RE: RESOLUTION NO. 18-7510 RESOLUTION APPROVING THE HOTEL TRANSFEREE AGREEMENT AND AUTHORIZING THE MAYOR TO EXECUTE THE HOTEL TRANSFEREE AGREEMENT _______________________________________________________________________ WHEREAS, the City of Salina the general welfare and economic prosperity of the City and its inhabitants and thereby to further promote, stimulate and develop the general welfare and economic prosperity of the State of Kansas; and WHEREAS, pursuant to K.S.A. 12-1770 et seq the City is authorized to create a Redevelopment District within an eligible area of the City; and WHEREAS, pursuant to Ordinance No. 15-10775 adopted by the City Commission on June 1, 2016 and published June 5, 2016, the City established a Redevelopment District known as the Salina Downtown Redevelopment District to promote, stimulate and develop the general and economic welfare of the state of Kansas and the City as a major commercial entertainment and tourism area; and WHEREAS, pursuant to K.S.A. 12-17,160 et seq. the City is authorized to create a STAR bond project district within an eligible area of the City; and WHEREAS, pursuant to Ordinance No. 15-10776 adopted by the City Commission on June 1, 2015 and published June 5, 2015, the City established a STAR bond project district known as the Salina STAR Bond Project District to promote, stimulate and develop the general and economic welfare of the state of Kansas and the City as a major commercial entertainment and tourism area; and WHEREAS, the City entered into a Development Agreement dated January 23, 2017 (the , which contemplated the execution of certain transferee agreements with the specific developers of certain projects; and WHEREAS, the of an approximately 113-room all suites hotel has been negotiated with Lighthouse Properties III, Inc., a NOW, THEREFORE, BE IT RESOLVED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS, AS FOLLOWS: Section 1. Approval and Execution of Hotel Transferee Agreement. The governing body of the City hereby approves the Transferee Agreement in substantially the form presented to and reviewed by the governing body of the City (copies of which documents, upon execution thereof, shall be filed in the office of the City Clerk), with such changes therein as shall be approved by the officers of the City executing the Transferee Agreemendence of their approval thereof. The Mayor and City Clerk are hereby authorized to execute and deliver the Hotel Transferee Agreement. Section 2. Further Authority. The City shall, and the officers, employees and agents of the City are hereby authorized and directed to, take such action, expend such funds and execute such other documents, certificates and instruments as may be necessary or desirable to carry out and comply with the intent of this Resolution. Section 3. Effective Date. This Resolution shall take effect and be in full force immediately after its adoption by the governing body of the City. ADOPTED this 12th day of January, 2018. CITY OF SALINA, KANSAS By: _____________________________________ \[SEAL\] Karl F. Ryan, Mayor ATTEST: ___________________________________ Shandi Wicks, CMC, City Clerk -2- RESOLUTION NO. 18-7511 RESOLUTION APPROVING THE ALLEY TRANSFEREE AGREEMENT AND AUTHORIZING THE MAYOR TO EXECUTE THE ALLEY TRANSFEREE AGREEMENT _______________________________________________________________________ WHEREAS, the City of Salina the general welfare and economic prosperity of the City and its inhabitants and thereby to further promote, stimulate and develop the general welfare and economic prosperity of the State of Kansas; and WHEREAS, pursuant to K.S.A. 12-1770 et seq the City is authorized to create a Redevelopment District within an eligible area of the City; and WHEREAS, pursuant to Ordinance No. 15-10775 adopted by the City Commission on June 1, 2016 and published June 5, 2016, the City established a Redevelopment District known as the Salina Downtown Redevelopment District to promote, stimulate and develop the general and economic welfare of the state of Kansas and the City as a major commercial entertainment and tourism area; and WHEREAS, pursuant to K.S.A. 12-17,160 et seq. the City is authorized to create a STAR bond project district within an eligible area of the City; and WHEREAS, pursuant to Ordinance No. 15-10776 adopted by the City Commission on June 1, 2015 and published June 5, 2015, the City established a STAR bond project district known as the Salina STAR Bond Project District to promote, stimulate and develop the general and economic welfare of the state of Kansas and the City as a major commercial entertainment and tourism area; and WHEREAS, the City entered into a Development Agreement dated January 23, 2017 (the , which contemplated the execution of certain transferee agreements with the specific developers of certain projects; and WHEREAS, the Alley of an approximately 40,000 square foot family entertainment center has been negotiated with FIB, LLC, a Kansas limited liability company Alley governing body. NOW, THEREFORE, BE IT RESOLVED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS, AS FOLLOWS: Section 1. Approval and Execution of Alley Transferee Agreement. The governing body of the City hereby approves the Transferee Agreement in substantially the form presented to and reviewed by the governing body of the City (copies of which documents, upon execution thereof, shall be filed in the office of the City Clerk), with such changes therein as shall be approved by the officers of the City dence of their approval thereof. The Mayor and City Clerk are hereby authorized to execute and deliver the Alley Transferee Agreement. Section 2. Further Authority. The City shall, and the officers, employees and agents of the City are hereby authorized and directed to, take such action, expend such funds and execute such other documents, certificates and instruments as may be necessary or desirable to carry out and comply with the intent of this Resolution. Section 3. Effective Date. This Resolution shall take effect and be in full force immediately after its adoption by the governing body of the City. ADOPTED this 12th day of January, 2018. CITY OF SALINA, KANSAS By: _____________________________________ \[SEAL\] Karl F. Ryan, Mayor ATTEST: ___________________________________ Shandi Wicks, CMC, City Clerk -2- RESOLUTION NO. 18-7512 RESOLUTION APPROVING THE OLD CHICAGO TRANSFEREE AGREEMENT AND AUTHORIZING THE MAYOR TO EXECUTE THE OLD CHICAGO TRANSFEREE AGREEMENT _______________________________________________________________________ WHEREAS, the City of Salina the general welfare and economic prosperity of the City and its inhabitants and thereby to further promote, stimulate and develop the general welfare and economic prosperity of the State of Kansas; and WHEREAS, pursuant to K.S.A. 12-1770 et seq the City is authorized to create a Redevelopment District within an eligible area of the City; and WHEREAS, pursuant to Ordinance No. 15-10775 adopted by the City Commission on June 1, 2016 and published June 5, 2016, the City established a Redevelopment District known as the Salina Downtown Redevelopment District to promote, stimulate and develop the general and economic welfare of the state of Kansas and the City as a major commercial entertainment and tourism area; and WHEREAS, pursuant to K.S.A. 12-17,160 et seq. the City is authorized to create a STAR bond project district within an eligible area of the City; and WHEREAS, pursuant to Ordinance No. 15-10776 adopted by the City Commission on June 1, 2015 and published June 5, 2015, the City established a STAR bond project district known as the Salina STAR Bond Project District to promote, stimulate and develop the general and economic welfare of the state of Kansas and the City as a major commercial entertainment and tourism area; and WHEREAS, the City entered into a Development Agreement dated January 23, 2017 (the , which contemplated the execution of certain transferee agreements with the specific developers of certain projects; and WHEREAS, the Old Chicago development of an approximately 8,300 square foot restaurant has been negotiated with Samys OC, LLC, a Kansas limited liability company Old Chicago and the Master Developer and is being presented for approval by the governing body. NOW, THEREFORE, BE IT RESOLVED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS, AS FOLLOWS: Section 1. Approval and Execution of Old Chicago Transferee Agreement. The governing body of the City hereby approves the Transferee Agreement in substantially the form presented to and reviewed by the governing body of the City (copies of which documents, upon execution thereof, shall be filed in the office of the City Clerk), with such changes therein as shall be approved by the officers of the dence of their approval thereof. The Mayor and City Clerk are hereby authorized to execute and deliver the Old Chicago Transferee Agreement. Section 2. Further Authority. The City shall, and the officers, employees and agents of the City are hereby authorized and directed to, take such action, expend such funds and execute such other documents, certificates and instruments as may be necessary or desirable to carry out and comply with the intent of this Resolution. Section 3. Effective Date. This Resolution shall take effect and be in full force immediately after its adoption by the governing body of the City. ADOPTED this 12th day of January, 2018. CITY OF SALINA, KANSAS By: _____________________________________ \[SEAL\] Karl F. Ryan, Mayor ATTEST: ___________________________________ Shandi Wicks, CMC, City Clerk -2-