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200412247 Building Bonds, which shall be sold to the purchaser thereof for an amount not less than 98% of the principal amount thereof plus accrued interest to date of delivery and payment. The terms and conditions for the Building Bonds shall be specified in the Building Bond Indenture which the City shall approve prior to the execution and delivery thereof by Heartland. Upon the issuance of the Building Bonds, Heartland shall cause the proceeds of such bonds to be paid to the Trustee, including the full amount of accrued interest, if any, received upon such sale, to be held and applied as provided in the Building Bond Indenture, with such proceeds being applied first to pay expenses of issuing the Building Bonds, including, if applica- ble payment of premium for any bond insurance, second to the funding of the Debt Service Reserve Fund in the amount required in connection with the issuance and sale of the Building Bonds, as set forth in the Building Bonds Indenture and with the remaining proceeds being deposited to the Construction Fund. Heartland shall cause the Trustee to invest and reinvest the proceeds held by the Trustee from time to time in the Construction Fund, the Bond Fund and the Debt Service Reserve Fund in the manner and to the extent and with such application of the income therefrom as shall be provided in the Building Bonds Indenture, provided (i) that invest- ment earnings on amounts in the Debt Service Reserve Fund shall be applied to pay debt service on the Building Bonds with the City receiving credit against basic rentals or to the payment of amounts owing for rebate to the united States under Section 148 of the Code and (ii) that investment earnings on amounts in the Construction Fund shall be applied to pay costs of the Project. This agreement shall be amended to include any other provisions deemed necessary by the proposed purchaser of the Building Bonds in connection with the offer and sale of the Building Bonds. 13. STATUS OF LEASE. The City acknowledges that it approves Plans and Specifications of Heartland for the Project and will hold Trustee harmless against any claim by way of infringement or the like that arises out of compliance with the Plans and Specifications. The City agrees that the covenants and agreements herein are irrevocable and independent. The City's obligation to pay basic rents shall be irrevocable, independent and unconditional from and after the issuance of the Building Bonds. 14. PAYMENT AND PERFORMANCE BONDING FOR CONSTRUCTION OF PROJECT. Unless otherwise agreed to by the City, Heartland agrees that it will require a labor and materials payment bond and a performance bond from the contractor for the Project in an amount equal to the full amount of the construction contract. 15. INDEMNIFICATION COMMITMENTS. The City, as and to the fullest extent permitted by law, shall indemnify and save Heartland and any of its officers, directors, employees and the Trustee harmless against and from all claims by or on behalf of any person or entity arising from the City's acquisition and lease of the Project, including any breach or default on the part of the City in the performance of any of its duties and responsibilities under this .agreement or any related document. 12