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200510853 ARTICLE IV ACQUISITION AND CONSTRUCTION OF PROJECT Section 4.01. Lessor hereby agrees to acquire and construct the Project in the manner set forth in Section 4.03 of this Article IV. The net proceeds of the Bonds, after certain deposits provided for in Article V ofthe Indenture, including deposits to the Costs ofIssuance Fund, are to be deposited in the Construction Fund under the terms of the Indenture. The Project shall be constructed in accordance with plans and specifications, as approved by the Lessee. Lessor is in the process of awarding a contract to the Contractor. Lessee shall, upon the making of such award, approve such award of contract, acting through its Library Board, and Lessor agrees to provide for the construction of the Project in accordance with the terms of said contract. Lessor's obligation to make payment of costs for the Project shall be limited to the funds in the Construction Fund held by Trustee, which fund contains only certain funds from the proceeds of the sale of the Building Bonds issued by Lessor and interest on such monies while invested in the Construction Fund. Lessee shall be required to make any payments to contractors, suppliers and workers in excess of such funds out of its own monies, as additional rent. Section 4.02. Lessor and Lessee hereby acknowledge and agree to the appointment of the City's Library Director and the City's Finance Director, respectively, as project manager and alternate project manager pursuant to the Indenture. Requisition for payments to contractors and suppliers, or for reimbursement to the Lessor or Lessee for costs incurred, signed by the project manager or alternate project manager; and such requisitions shall be submitted to the Trustee for payment as provided in Article VI ofthe Indenture. Section 4.03 Based upon consultation with the City's Library Board, Lessor agrees to provide for the planning, design, construction and acquisition of the Project. The Project shall be constructed in accordance with the plans and specifications prepared by the project architect on behalf of the Lessor as approved by the City's Library Board. Lessor shall take bids for construction of the Project in the discretion of the Lessor, subject to review and approval by the City's Library Board, and award the contract to the project contractor. Lessor shall administer and provide for construction of the Project in accordance with the terms of said contract, subject to consultation and advice provided by the City's Library Board. Lessor shall make payment for costs of the Project from the funds in the Construction Fund held by the Trustee, which fund shall contain the proceeds from the sale of Building Bonds issued by Lessor and interest on such funds while invested in the Construction Fund. The City shall make any payments to suppliers and contractors, in excess of such funds in the Construction Fund, as additional rent. The City shall be financially responsible to Lessor for the costs of the Project under any contracts awarded by Lessor for the planning, design, construction and acquisition of the Project and entered into by Lessor with payment for such costs of the Project to be made from the funds in the Construction Fund held by the Trustee, which fund shall contain the proceeds from the sale of Building Bonds issued by Lessor and interest on such funds while invested in the Construction Fund or otherwise by the City as provided hereinabove. The City shall take all action to appoint Lessor or any project contractor, subcontractor, supplier or other designee of Lessor as purchasing agent; it being the intention of the City and Lessor that the City shall make such appointment of purchasing agents in regard to the construction and acquisition of the Project for the purposes of altering the status of Lessor or any project contractor, subcontractor, supplier or other 6