Sample Ground Lease

1. "Base Price" means the total price that is paid for the Home (including any amounts provided by a first mortgage loan, but not including subsidy in the form of deferred loans to the Homeowner, as set forth in Section 11.11(a).

2. "Event of Default" means the occurrence of any violation of a term, condition, and/or obligation of this Lease by Homeowner or a Permitted Mortgagee, which violation continues beyond any applicable cure period following Homeowner's receipt of a notice of default from KCCLT, as set forth in Section 10.01.

3. "Home" means the residential structure and other permanent improvements situated on the Leased Property, and owned by Homeowner.

4. "Income-Qualified Person" shall mean a person or group of persons whose household income does not exceed eighty percent (80%) of the median household income for Jackson County as calculated and adjusted for household size from time to time by the U.S. Department of Housing and Urban Development (HUD) or any successor entity.

5. "Initial Term" means the ninety-nine (99) year period beginning on the Effective Date and ending on [date], as set forth in Section 3.01(a).

6. "Initial Appraised Value" means [dollar amount], as set forth in Section 11.11(b) and Exhibit G.

7. "Lease Fee" means the monthly fee that the Homeowner pays to KCCLT for the continuing use of the Leased Property, and any additional amounts that KCCLT may charge to the Homeowner for reasons permitted by this Lease, as set forth in Section 3.01(b).

8. "Leased Property" means the real property owned by KCCLT and described at Exhibit A.

9. "Permitted Mortgage" means any mortgage, deed of trust, or other security instrument evidencing a security interest in the Home, the Homeowner's right, title, and interest in and to the Home and the Leased Property, or any part thereof, for which KCCLT has expressly permitted in writing, as set forth in Article VI.

10. "Permitted Mortgagee" means the holder of a Permitted Mortgage.

11. "Purchase Option Price" means the maximum price that the Homeowner is allowed to receive for the sale of the Home, and the Homeowner's right, title, and interest in and to the Leased Property, as set forth in Section 11.11.

12. "Repair Reserve Fund" means that certain escrow account maintained by KCCLT, and to be used for assisting with the repair and preservation of the physical quality of the Home.

13. "Reserve Fund Contribution" means that one-time payment equal to the lesser of .0025% of the Base Price, or $200, as set forth in Section 3.01(c).

Conveyance of Leased Property. KCCLT hereby leases to the Homeowner, and Homeowner leases from KCCLT, the Leased Property for the consideration and upon the terms and conditions set forth in this Lease.

Reservation of Mineral Rights; Removal. KCCLT reserves any and all rights to any minerals lying beneath the surface of the Leased Property. Excavation and removal of any minerals lying beneath the Leased Property may be commenced by KCCLT, its agents, affiliates, successors, and assigns, at any time during the Lease Term, provided, however, that KCCLT provides written notice to the Homeowner at least ten (10) days prior to commencing any such excavation and/or removal of minerals on the Leased Property.

KCCLT Authority and Covenants. KCCLT represents and warrants to Homeowner that: (i) KCCLT has full right and lawful authority to enter into and perform KCCLT's obligations under this Lease for the Term of this Lease, and KCCLT has not entered into any contracts, leases, tenancies, agreements, restrictions, violations, encumbrances, or defects in title, of any nature whatsoever, which materially adversely affect KCCLT's right, title, and interest in and to the Leased Property, or the fulfillment of its obligations under this Lease; and (ii) so long as Homeowner is not in default beyond applicable notice and cure periods (as more particularly set forth in Article 10), Homeowner shall have and enjoy, during the Term of this Lease, the quiet and undisturbed possession of the Leased Property, free from interference by KCCLT or any party claiming by, through or under KCCLT, but none other.

As-Is/Where-Is. On or prior to the Effective Date, KCCLT will provide to Homeowner a copy of the most current title report, if any, obtained by KCCLT for the Leased Property, and Homeowner hereby accepts the Leased Property in its "as is, where is" condition as of the Effective Date. Homeowner acknowledges that, except as expressly set forth in this Lease, KCCLT has not made, does not make, and specifically disclaims any representations, warranties, promises, covenants, agreements, or guaranties of any kind or character whatsoever, whether express or implied, oral or written, of, as to, concerning the Leased Property.

1. Initial Term. This Lease shall be effective upon the Effective Date and shall continue in full force and effect for a period of ninety-nine (99) years thereafter, ending on [date], unless earlier terminated or renewed as provided below (the "Initial Term").

2. Lease Fee (Paid Monthly). Subject to the terms of this Section 3.01, the Homeowner or its Permitted Mortgagee (as applicable) shall pay to KCCLT a monthly Lease Fee in an amount equal to the sum of (i) a "Land Use Fee" of $25.00 for the continuing right to possess, occupy and use the Leased Property; plus (ii) a "Repair Reserve Fee" of $25.00 for the purpose of funding the Repair Reserve Fund. On the first day of the second and each subsequent year of the Initial Term, the Lease Fee shall automatically increase at a rate of 1% per year (subject to the terms of this Section).

1. Periodic Increase, Reduction, or Suspension of Lease Fee. KCCLT further reserves the right to (i) increase the amount of the Land Use Fee and/or the Repair Reserve Fee, from time to time, but no more often than once per year; and (ii) periodically reduce or suspend the Land Use Fee and/or the Repair Reserve Fee in order to improve the affordability of the Homeowner's monthly housing costs. Any increase, reduction, or suspension of the Lease Fee in accordance with this Section, whether automatic or at KCCLT's discretion, shall become effective only upon delivery of written notice from KCCLT to Homeowner or its Permitted Mortgagee (as applicable).

2. Fair Rental Value Contingency. If, for any reason, the provisions of Article 11 regarding transfers of the Home, or Sections 5.02 and 5.03 regarding occupancy and subsleasing of the Leased Property are suspended or invalidated for any period of time, then during such period the Land Use Fee shall be increased to an amount equal to the unrestricted fair rental value of the Leased Property, to be calculated by KCCLT. The increase of the Land Use Fee pursuant to this paragraph shall become effective only upon delivery of written notice from KCCLT to Homeowner or its Permitted Mortgagee (as applicable). Thereafter, and for so long as the above-referenced restrictions are not reinstated in the Lease, KCCLT may, from time to time, further increase the amount of such Land Use Fee, provided that (a) the amount of the Land Use Fee does not exceed the fair rental value of the Leased Property; and (b) such increases do not occur more often than once in every year.

3. Reserve Fund Contribution (Paid at Closing). On the Effective Date, Homeowner or its Permitted Mortgagee (as applicable) shall pay to KCCLT a one-time payment equal to the lesser of .0025% of the Base Price, or $200 (the "Reserve Fund Contribution"). Upon its receipt of the Reserve Fund Contribution, KCCLT shall deposit the Reserve Fund Contribution in the Repair Reserve Fund.

4. Suspension and Reactivation of the Repair Reserve Fee. Notwithstanding anything to the contrary, Homeowner's obligation to pay the Repair Reserve Fee shall be suspended when the balance of the Repair Reserve Fund meets or exceeds an amount equal to $1,500.00 ("Reserve Fund Cap"). Should Homeowner use funds from the Repair Reserve Fund, in the manner provided by Section 7.06, KCCLT shall resume collection of the Repair Reserve Fee until such time as the Repair Reserve Fund again satisfies the Reserve Fund Cap. No less than ten (10) days prior to the next applicable Lease Fee due date, KCCLT shall notify Homeowner of any changes to Homeowner's obligation to pay the Repair Reserve Fee (whether such changes are due to suspension or reactivation of the Repair Reserve Fee payment obligation).

5. Late Payments; Interest. If KCCLT has not received any monthly installment of the Lease Fee on or before the date on which the such installment first becomes payable under this Lease (the "Due Date"), KCCLT may require Homeowner to pay interest on any unpaid amounts from the Due Date through and including the date such payment or installment is received by KCCLT. Interest shall accrue at a rate designated by KCCLT pursuant to this paragraph. For purposes of this Section 3.01(e), the interest rate selected by KCCLT shall be an amount not to exceed the Wall Street Prime interest rate or such other reasonably equivalent interest rate in effect on the Effective Date. Such interest shall be in addition to the Lease Fee and shall be paid by Homeowner to KCCLT upon demand; provided, however, that KCCLT shall waive any interest that would otherwise be payable to KCCLT if such payment of the Lease Fee is received by KCCLT on or before the thirtieth (30th) day after the Due Date.

6. Outstanding Fees Collected at Time of Home Sale. The parties agree that KCCLT shall have a lien upon the Home for any unpaid Lease Fee. In the event that any Lease Fee remains due, payable, and outstanding when the Homeowner sells the Home, the outstanding Lease Fees (including any interest) shall be paid to KCCLT out of any proceeds from the sale that would otherwise be due to Homeowner. Such lien shall be prior to all other liens and encumbrances on the Home except (i) liens and encumbrances recorded before the recording of this Lease; (ii) Permitted Mortgages; and (iii) liens for real property taxes and other governmental assessments or charges against the Home.

Renewal Term, Notice, Option, and Memorandum of Lease.

1. Renewal Term. Subject to the requirements of this Section 3.02, Homeowner shall have the option to extend the terms of this Lease for an additional period of ninety-nine (99) years (the "Renewal Term") beginning on the date that the Initial Term would otherwise expire (such option being the "Renewal Option").

2. Expiration and Renewal Notice. At least six (6) months, but no more than one (1) year prior to the expiration of the Initial Term, KCCLT shall provide Homeowner with a written "Expiration and Renewal Notice" stating the expiration date of the Initial Term, and detailing the terms and conditions that will apply to the Renewal Term, to the extent such terms and conditions differ from those in effect during the Initial Term. Any changes applicable during the Renewal Term shall be determined by KCCLT, in its sole and reasonable discretion.

3. Exercise of Renewal Option. No later than sixty (60) days after Homeowner's receipt of the Expiration and Renewal Notice, Homeowner shall have the right to exercise its Renewal Option if, and only if, the following conditions are met:

1. Homeowner provides KCCLT with written notice of Homeowner's acceptance of KCCLT's proposed conditions for the Renewal Term ("Notice of Acceptance");
2. The Lease is in full force and effect on the last day of the Initial Term; and
3. As of the date of the Notice of Acceptance, and continuing until the last day of the Initial Term, Homeowner has not committed an Event of Default under the Lease that is continuing, and shall not otherwise be in default under this Lease, any Permitted Mortgage, or any other agreement affecting the Leased Property.

Upon Homeowner's exercise of the Renewal Option, KCCLT and Homeowner shall sign a memorandum of notice of lease. The memorandum shall be in recordable form and shall comply with all requirements for a notice of lease as specified in Section 12.09 hereof. KCCLT shall cause this memorandum to be recorded with the proper land record authority for Jackson County, Missouri, as such authority exists as of the date of the Renewal Term.

Holdover Tenancy

Homeowner acknowledges that if (a) Homeowner does not exercise its Renewal Option or otherwise enter into a separate written agreement with KCCLT prior to the expiration of the Initial Term; and (b) Homeowner continues to occupy the Leased Property after the expiration of the Initial Term, then Homeowner shall, in addition to the amounts hereinafter set forth, indemnify and hold KCCLT harmless from any and all damages and expenses (including attorneys' fees) that KCCLT may incur by reason of Homeowner's holding over at the Leased Property. In addition, any holding over after the last day of either of the Initial Term or the Renewal Term (as applicable) shall be understood to convert this Lease to be a month-to-month tenancy, terminable by either party on not less than one (1) months' notice, and on and subject to the terms of this Lease (as the same may be modified in connection with exercise of the Renewal Option).

Lease Expiration and Reversion to KCCLT.

Upon the expiration or early termination of this Lease, the parties agree that the ownership of the Home shall be transferred to KCCLT. Homeowner agrees to cooperate in all respects with regard to conveying fee title of the Home to KCCLT. Upon receipt of a conveyance document acceptable to KCCLT, KCCLT shall promptly pay Homeowner and any Permitted Mortgagee(s), as follows:

1. KCCLT shall pay any Permitted Mortgagee(s) the full amount owed to such mortgagee(s) by Homeowner;

2. KCCLT shall pay the Homeowner the balance of the Purchase Option Price calculated in accordance with Section 11.12 below, as of the time of reversion of ownership, less the total amount of any unpaid Lease Fee and any other amounts owed to the KCCLT under the terms of this Lease. The Homeowner shall be responsible for any costs necessary to clear any additional liens or other charges related to the Home which may be assessed against the Home. If the Homeowner fails to clear such liens or charges, the balance due the Homeowner shall also be reduced by the amount necessary to release such liens or charges, including reasonable attorneys' fees incurred by the KCCLT.

Taxes

Homeowner is responsible for the payment of taxes and assessments relating to the Home and the Leased Property. Homeowner shall pay directly, when due, any and all taxes and assessments relating to the Home and the Leased Property (including any taxes or assessments relating to KCCLT's interest in the Leased Property). In the event that KCCLT incurs a charge for any taxes or assessments relating to the Home or the Leased Property, KCCLT shall promptly deliver to Homeowner any invoices or bills relating to such charges. Promptly upon receipt, Homeowner shall pay, on behalf of KCCLT, any amounts due and payable to the applicable taxing authority.

Homeowner's Right to Contest Taxes. Homeowner shall have the right to contest the amount or validity of any taxes or assessments relating to the Home and Leased Property. HUD Upon receiving a reasonable request from Homeowner for assistance in this matter, KCCLT shall join in contesting such taxes. All costs of such proceedings shall be paid by Homeowner.

Homeowner's Failure to Pay Taxes. If Homeowner does not pay the taxes or other charges described in Section 4.01, KCCLT may increase the Lease Fee to cover the amount of any taxes and other charges unpaid and owed by Homeowner. Upon collecting any such amount, KCCLT will pay the amount collected to the applicable taxing authority in a timely manner.

Proof of Payment Required. When either party pays taxes relating to the Home or Leased Property, that party shall furnish satisfactory evidence of the payment to the other party. A photocopy of a receipt shall be the usual method of furnishing such evidence.
[Tax Abatement - If inapplicable, mark as 'Intentionally Deleted']. KCCLT has applied for and received a ten year abatement of taxes on the Leased Property. In order to maintain this abatement, Homeowner must timely make all tax payments. Should Homeowner fail to make the appropriate payment, the governing authority may reverse the abatement and charge the Homeowner market rate of taxes for the Leased Property.

Permitted Uses. Homeowner shall only use, or allow to be used, the Home and the Leased Property for residential purposes and any activities related to residential use permitted by the applicable zoning laws in effect as of the Effective Date, as indicated on Exhibit F, attached hereto ("Zoning Restrictions"), and for such use as otherwise may be permitted by the KCCLT, in its sole and absolute discretion. Notwithstanding the terms of the Zoning Restrictions, KCCLT requires that all home-based businesses shall have no more than three (3) clients or customers present on the Leased Property or in the Home at any one time.

Occupancy Requirement. Homeowner must occupy the Home for at least ten (10) months of each calendar year during this Lease, unless otherwise agreed to by and between KCCLT and Homeowner. Occupancy by Homeowner's child, spouse, domestic partner, or other person approved by KCCLT shall be considered occupancy by Homeowner for purposes of compliance with this Section. With regard to occupancy by someone other than Homeowner, KCCLT may require 3rd party verification that the person is an approved occupant.

Subleasing Generally Prohibited. Except as otherwise provided in Articles 6 and 11, Homeowner shall not sublease, sell, or otherwise convey any of Homeowner's rights under this Lease, for any period of time, without the prior written permission of KCCLT, which permission is subject to KCCLT's sole discretion in all respect. If KCCLT permits a particular sublease, such sublease shall be subject to the terms of this Lease in all respects. Further, any and all rental or occupancy fees charged to the sublessee shall, in no event, be more than the sum of (i) the amount of the Lease Fee charged to the Homeowner by KCCLT; and (ii) an amount approved by KCCLT to cover Homeowner's costs in owning the Home, including but not limited to the cost of taxes, insurance, and mortgage interest.

KCCLT's Right to Inspect Leased Property. Except for the interior of the Home and any fully enclosed buildings situated on the Leased Property, KCCLT may inspect the Leased Property upon 24 hours' prior notice of any planned inspection. In the event of an emergency, KCCLT may inspect the Leased Property (except the interiors of the Home and fully enclosed buildings), after making reasonable efforts to inform the Homeowner before the inspection. If KCCLT receives an Intent-To-Sell Notice (as described in Section 11.05 below), then upon 24 hours' prior notice, KCCLT may inspect the interiors of the Home and all fully enclosed buildings to determine their condition prior to the sale.

Right to Quiet Enjoyment. Homeowner has the right to quiet and peaceable enjoyment of the Leased Property and the Home.

No Waste or Nuisance. Homeowner shall use the Home and the Leased Property in a way that will not cause harm to others or create any public nuisance. Homeowner shall dispose of all waste in a safe and sanitary manner. Homeowner shall maintain all parts of the Home and Leased Property in a safe, sound and habitable condition, in full compliance with all laws and regulations, and as further stipulated in Section 7.05, below.

Permitted Mortgages. The Homeowner may mortgage the Home only with the prior written permission of KCCLT. By signing this Lease, KCCLT gives its written permission for any mortgage or deed of trust signed by the Homeowner as of the Effective Date for the purpose of financing Homeowner's purchase of the Home.

Refinancings and Subsequent Mortgages. If, after the purchase of the Home and signing of the Lease, the Homeowner seeks a loan to be secured by a mortgage on the Home (to refinance an existing Permitted Mortgage or to finance home repairs or for any other purpose), Homeowner must inform KCCLT, in writing, of the proposed terms and conditions of such mortgage loan. The proposed terms and conditions of the mortgage loan must be received by KCCLT at least ten (10) business days prior to the expected closing of the loan. The information to be provided to the KCCLT must include:

1. the name of the proposed lender;
2. Homeowner's reason for requesting the loan;
3. the principal amount of the proposed loan and the total mortgage debt that will result from the combination of the loan and existing mortgage debt, if any;
4. expected closing costs;
5. the rate of interest;
6. the repayment schedule;
7. a copy of the appraisal commissioned in connection with the loan request;
8. any additional information that KCCLT may require.

KCCLT will not permit such a mortgage loan if the loan increases Homeowner's total mortgage debt relating to the Home to an amount greater than 80% of the then current Purchase Option Price, calculated in accordance with Section 11.12 below, or if the terms of the transaction otherwise threaten the interests of either the Homeowner or the KCCLT
Standard Permitted Mortgage Agreement. The KCCLT shall be required to permit any mortgage for which the mortgagee has signed a "Standard Permitted Mortgage Agreement" as set forth in Part C of Exhibit D, and for which the loan secured thereby does not increase Homeowner's total mortgage debt to an amount greater than 80% of the then current Purchase Option Price, calculated in accordance with Section 11.12 below.

Rights and Obligations of Permitted Mortgagee. Any Permitted Mortgagee shall be bound by each of the requirements stated in Part A of Exhibit D, unless the particular requirement is removed, contradicted or modified by a rider to this Lease signed by the Homeowner and the KCCLT to modify the terms of the Lease during the term of the Permitted Mortgage. Any Permitted Mortgagee shall have all of the rights and protections referenced in Part B of Exhibit D.

Foreclosure of Permitted Mortgage. Homeowner and KCCLT recognize that it would be contrary to the purposes of this agreement if Homeowner could receive more than the Purchase Option Price as the result of the foreclosure of a mortgage. Therefore, Homeowner hereby irrevocably assigns to KCCLT all net proceeds of sale of the Home that would otherwise have been payable to Homeowner and that exceed the amount of net proceeds that Homeowner would have received if the property had been sold for the Purchase Option Price. Homeowner authorizes and instructs the Permitted Mortgagee, or any party conducting any sale, to pay such excess amount directly to KCCLT. If, for any reason, such excess amount is paid to Homeowner, Homeowner hereby agrees to promptly pay such amount to KCCLT.

Ownership of Home and Improvements on Leased Property. All structures, including the Home, fixtures, and other improvements purchased, constructed, or installed by the Homeowner on any part of the Leased Property at any time during the term of this Lease shall be the property of the Homeowner, subject to the terms of this Lease, in particular, Sections 5.03 and 11.08. In addition, Homeowner shall not remove any part of the Home from the Leased Property without KCCLT's prior written consent.

Purchase of the Home. Upon the signing of this Lease, Homeowner acknowledges that it has simultaneously purchased the Home situated upon the Leased Property, as described in the form of Missouri General Warranty Deed attached hereto at Exhibit C.
Construction Requirements. Any construction activities relating to the Leased Property shall be permitted subject to the following requirements: (a) Homeowner shall be solely responsible for any and all costs relating to such construction; (b) all construction to be performed in connection with the Leased Property shall be performed in a professional manner and shall comply with all applicable laws and regulations; (c) all alterations in and to the Home and Leased Property shall be consistent with the permitted uses described in Section 5.01; (d) the footprint, square-footage, or height of the house shall not be increased and new structures shall not be built or installed on the Leased Property without the prior written consent of KCCLT; and (e) prior to the commencement of any construction on the Leased Property, Homeowner shall provide KCCLT with copies of all necessary building permits and approvals required by the applicable municipal authority.

In connection with the consent requirement referenced at item (d), above, Homeowner shall submit a written request to KCCLT that includes, at minimum, the following information:

1. a written statement of the reasons for undertaking the construction;
2. a set of drawings (floor plan and elevations) showing the dimensions of the proposed construction;
3. a list of the necessary materials, with quantities needed;
4. a statement of who will do the work;

Upon receiving Homeowner's written request, KCCLT may request any additional or supplemental information from Homeowner as KCCLT deems necessary or beneficial, in KCCLT's sole discretion. Within two (2) weeks following KCCLT's receipt of all requested information (including any additional or supplemental information), KCCLT shall give Homeowner either its written consent or a written statement of its reasons for not consenting. Before construction can begin, Homeowner shall provide KCCLT with copies of all necessary building permits, if not previously provided.

Liens Not Permitted. Homeowner shall not permit any lien to be filed against the Leased Property or the Home which remains for a period of more than sixty (60) days after the date of filing. Homeowner shall be obligated to take all action necessary to discharge any such lien by means of payment, deposit, bond, court order, or as otherwise permitted by law. If Homeowner fails to discharge such lien within the 60-day period, Homeowner shall immediately notify KCCLT of such failure. KCCLT shall have the right to discharge the lien by paying the amount in question.

Homeowner may, at Homeowner's expense, contest the validity of any such asserted lien, provided Homeowner has furnished a bond or other acceptable surety in an amount sufficient to release the Leased Property from such lien. Any amounts paid by KCCLT to discharge such liens shall be treated as an additional Lease Fee payable by Homeowner upon demand. For the avoidance of all doubt, no lien of any type shall attach to KCCLT's title and interest to the Leased Property.

Maintenance and Repair. Homeowner is solely responsible for all repairs to the Leased Property, and for furnishing all services or facilities on the Leased Property, including but not limited to heat, electricity, air conditioning, and water service. KCCLT shall not be required to furnish any services or facilities or to make any repairs to the Home. Homeowner shall maintain the Home and Leased Property as required by Section 5.06 above and shall see that all necessary repairs and replacements are accomplished when needed.

Repair Reserve Fund; Request for Funding Assistance. KCCLT has established a Repair Reserve Fund for this Home to assist in providing emergency repairs during Homeowner's occupancy and to provide for such repairs as may be necessary for resale purposes. In order to receive funding assistance from the Repair Reserve Fund, Homeowner must deliver a written request to KCCLT providing (a) the proposed use of the emergency funds; (b) a copy of a bid or cost proposal for the proposed use; and (c) a statement describing the emergent situation. KCCLT will respond to Homeowner's funding request within three (3) business days following its receipt of Homeowner's fully-completed funding request.

Use of Repair Reserve Fund at Time of Sale. In the event that Homeowner chooses to sell the Home, KCCLT may use the balance of the Repair Reserve Fund to repair damage or ordinary wear and tear present in the Home which was not addressed by Homeowner prior to such sale, and to compensate KCCLT employees or agents for inspecting and carrying out any necessary repairs. On or prior to the closing date, KCCLT shall provide an itemized list to Homeowner of all Repair Reserve Funds used in preparing the home for resale, and the remaining balance of the Repair Reserve Fund shall be returned to Homeowner.

Homeowner Liability and Indemnification. Homeowner expressly assumes all responsibility and liability relating to or arising out of Homeowner's possession, occupancy, and use of the Leased Property. Homeowner shall defend, indemnify and hold KCCLT harmless against all liability and claims of liability for injury or damage to person or property from any cause on or about the Leased Property. Homeowner waives all claims against KCCLT for injury or damage on or about the Leased Property. However, KCCLT shall remain liable for injury or damage due solely to the grossly negligent acts or omissions of KCCLT, its agents or employees.

Reimbursement of Expenses. In the event the KCCLT shall be required to pay any sum that is the Homeowner's responsibility or liability, the Homeowner shall reimburse the KCCLT for such payment and for reasonable expenses caused thereby.

Homeowner Insurance. Homeowner shall, at Homeowner's sole cost and expense, keep the Home continuously insured against "all risks" of physical loss, using Insurance Services Office (ISO) Form HO 00 03, or its equivalent, for the full replacement value of the Home, and in any event in an amount that will not incur a coinsurance penalty. The amount of such insured replacement value must be approved by the KCCLT Board of Directors prior to the commencement of the Lease. Thereafter, if the KCCLT determines that the replacement value to be insured should be increased, the KCCLT shall inform the Homeowner of such required increase at least thirty (30) days' prior to the next date on which the insurance policy is to be renewed, and the Homeowner shall assure that the renewal includes such change. If Homeowner wishes to decrease the amount of replacement value to be insured, Homeowner shall inform the KCCLT of the proposed change at least thirty (30) days prior to the date such change would take effect. The change shall not take effect without KCCLT's approval.

In the event that the Home is situated in a flood hazard zone as defined by the National Flood Insurance Plan, the Homeowner shall keep in full force and effect flood insurance in the maximum amount available.

The Homeowner shall also, at its sole expense, maintain in full force and effect public liability insurance using ISO Form HO 00 03, or its equivalent, in the amount of $[insert replacement cost here] per occurrence and in the aggregate. The KCCLT shall be named as an additional insured using ISO Form HO 04 41 or its equivalent, and certificates of insurance shall be delivered to the KCCLT prior to the commencement of the Lease and at each anniversary date thereof.
The dollar amounts of such coverage may be increased from time to time at the KCCLT's request but not more often than once in any one-year period. KCCLT shall inform the Homeowner of such required increase in coverage at least thirty (30) days prior to the next date on which the insurance policy is to be renewed, and the Homeowner shall assure that the renewal includes such change. The amount of such increase in coverage shall be based on current trends in homeowner's liability insurance coverage in the area in which the Home is located.

Damage or Destruction of the Home. Except as provided below, in the event of fire or other casualty damage to the Home, Homeowner shall take all steps necessary to assure the repair of such damage and the restoration of the Home to its condition immediately prior to the damage. All such repairs and restoration shall be completed as promptly as possible. Homeowner shall also promptly take all steps necessary to assure that the Leased Property is safe and that the damaged Home does not constitute a danger to persons or property.

If Homeowner, based on professional estimates, determines either (a) that full repair and restoration is physically impossible, or (b) that the available insurance proceeds will pay for less than the full cost of necessary repairs and that Homeowner cannot otherwise afford to cover the balance of the cost of repairs, then Homeowner shall notify KCCLT of this problem, and KCCLT may then help to resolve the problem. Methods used to resolve the problem may include efforts to increase the available insurance proceeds, efforts to reduce the cost of necessary repairs, efforts to arrange affordable financing covering the costs of repair not covered by insurance proceeds, and any other methods agreed upon by both Homeowner and KCCLT.
If Homeowner and KCCLT cannot agree on a way of restoring the Home in the absence of adequate insurance proceeds, then Homeowner has the option to terminate the Lease upon delivering written notice to KCCLT of Homeowner's intent to terminate the Lease. The date of actual termination shall be no less than sixty (60) days after the date of Homeowner's notice of intent to terminate. Upon termination, any insurance proceeds payable to Homeowner for damage to the Home shall be paid in the following order: (1) to the expenses of Homeowner's collection; (2) to any Permitted Mortgagee(s), to the extent required by the Permitted Mortgage(s); (3) to the expenses of enclosing or razing the remains of the Home and clearing debris; (4) to the KCCLT for any amounts owed under this Lease; (5) to the Homeowner, up to an amount equal to the Purchase Option Price, as of the day prior to the loss, less any amounts paid with respect to the second, third, and fourth clauses above; and (6) the remaining balance, if any, to the KCCLT.

Condemnation/Eminent Domain.
1. Affecting All of the Leased Property. If all of the Leased Property is taken by eminent domain or otherwise for public purposes, or if so much of the Leased Property is taken that the Home is lost or damaged beyond repair, this Lease shall terminate as of the date when Homeowner is required to give up possession of the Leased Property. Upon such termination, the entire amount of any award(s) paid shall be allocated in the manner described in Section 9.02 above.
2. Affecting a Portion of the Leased Property.
1. In the event of a taking of a portion of the Leased Property that does not result in damage to the Home or significant reduction in the usefulness or desirability of the Leased Property for residential purposes, then any monetary compensation for such taking shall be allocated entirely to KCCLT.
2. In the event of a taking of a portion of the Leased Property that results in damage to the Home only to such an extent that the Home can reasonably be restored to a residential use consistent with this Lease, then the damage shall be treated as damage is treated in Section 9.02 above, and monetary compensation shall be allocated as insurance proceeds are to be allocated under Section 9.02.
3. In the event of any taking that reduces the size of the Leased Property but does not result in the termination of the Lease, KCCLT shall reassess the fair rental value of the remaining Land and shall adjust the Lease Fee if necessary to assure that the monthly fee does not exceed the monthly fair rental value of the Land for use as restricted by the Lease.

Homeowner Assistance in the Event of Lease Termination Due to Damage, Destruction, or Eminent Domain. If this Lease is terminated as a result of damage, destruction or taking, KCCLT shall take reasonable steps to allow Homeowner to purchase another home on another parcel of leased land owned by KCCLT if such home can reasonably be made available. If Homeowner purchases such a home, Homeowner agrees to apply any proceeds or award received by Homeowner to the purchase of the home. Homeowner understands that there are numerous reasons why it may not be possible to make such a home available, and shall have no claim against KCCLT if such a home is not made available.

Homeowner Default. The occurrence of any one or more of the following shall be considered to be an event of default under this Lease (each, an "Event of Default"):

1. Payment Defaults. Homeowner fails to pay the Lease Fee or other charges required to be paid by Homeowner pursuant to the terms of this Lease, and such failure to pay is not cured by Homeowner or a Permitted Mortgagee within thirty (30) days following notice of such failure is given by KCCLT to Homeowner and any Permitted Mortgagee. Notwithstanding the foregoing, if Homeowner makes a good faith partial payment of at least two-thirds of the amounts owed during the 30-day cure period, then the cure period shall be extended for an additional 30-day period.

2. Non-Payment Defaults. Homeowner fails to abide by any other requirement or restriction in the Lease, and such failure is not cured by Homeowner or a Permitted Mortgagee within sixty (60) days after notice of such failure is given by KCCLT to Homeowner and Permitted Mortagee. Notwithstanding the foregoing, if Homeowner or Permitted Mortgagee has begun and is diligently continuing to cure such default within the 60-day cure period but cannot reasonably complete the cure within the 60-day period, the cure period shall be extended for such time as is reasonably necessary to complete the cure.

3. Defaults Due to Judicial Process. Homeowner's interest in the Leased Property is taken on execution or by other process of law, or if Homeowner is judicially declared bankrupt or insolvent according to law, or if any assignment is made of the property of Homeowner for the benefit of creditors, or if a receiver, trustee in involuntary bankruptcy or other similar officer is appointed to take charge of any substantial part of the Home or Homeowner's interest in the Leased Property by a court of competent jurisdiction, or if a petition is filed for the reorganization of Homeowner under any provisions of the Bankruptcy Act now or hereafter enacted, or if Homeowner files a petition for such reorganization, or for arrangements under any provision of the Bankruptcy Act now or hereafter enacted and providing a plan for a debtor to settle, satisfy or extend the time for payment of debts.

Mediation and Arbitration. In order to resolve disputes or to address breaches of the Lease, KCCLT may require that Homeowner, KCCLT, and any other interested parties, engage in mediation and/or binding arbitration performed by a third party arbitrator selected by KCCLT in its sole discretion. Any and all costs relating to such mediation or arbitration shall be split equally between and among the parties.

Early Termination and KCCLT Purchase Option. If an Event of Default occurs and is continuing beyond all applicable cure periods provided for above, KCCLT may terminate this Lease and proceed with any and all remedies available at law or in equity, including, but not limited to, repossession of the Leased Property and the Home, and eviction of the Homeowner and any person(s) claiming any rights to the Leased Property and/or the Home, by and through Homeowner.

1. Early Termination. In addition to the remedies mentioned above, in the case of an occurrence and continuance of any Event of Default described above, KCCLT may terminate this lease and initiate summary proceedings under applicable law against Homeowner, and KCCLT shall have all the rights and remedies consistent with such laws and resulting court orders to enter the Leased Property and Home and repossess the entire Leased Property and Home, and expel Homeowner and those claiming rights through Homeowner. In addition, KCCLT shall have such additional rights and remedies to recover from Homeowner arrears of rent and damages from any preceding breach of any covenant of this Lease. If this Lease is terminated by KCCLT pursuant to an Event of Default, then, as provided in Section 7.07 above, upon thus assuming title to the Home, KCCLT shall pay to Homeowner and any Permitted Mortgagee an amount equal to the Purchase Option Price calculated in accordance with Section 11.12, as of the time of reversion of ownership, less the total amount of any unpaid Lease Fee and any other amounts owed to the KCCLT under the terms of this Lease and all reasonable costs (including reasonable attorneys' fees) incurred by KCCLT in pursuit of its remedies under this Lease.

If KCCLT elects to terminate the Lease, then the Permitted Mortgagee shall have the right (subject to Article 6 and Exhibit D) to postpone and extend the specified date for the termination of the Lease for a period sufficient to enable the Permitted Mortgagee or its designee to acquire Homeowner's interest in the Home and the Leased Property by foreclosure of its mortgage or otherwise.

2. KCCLT Purchase Option. In the case of any of the Events of Default described above, Homeowner hereby grants to the KCCLT (or its assignee) the option to purchase the Home for the Purchase Option Price as such price is defined in Section 11.12. Within thirty (30) days after the expiration of any applicable cure period as established in Sections 10.01 and 10.02 above or within thirty (30) days after any of the events constituting an Event of Default under Section 10.03, KCCLT shall notify the Homeowner and the Permitted Mortgagee(s) of its decision to exercise its option to purchase under this Section. Not later than ninety (90) days after the KCCLT gives notice to the Homeowner of the KCCLT's intent to exercise its option under this Section, the KCCLT or its assignee shall purchase the Home for the Purchase Option Price.

KCCLT Default. KCCLT shall in no event be in default in the performance of any of its obligations under this Lease, unless such failure continues for a period of sixty (60) days or for such additional time as KCCLT reasonably requires to address any performance obligation, following KCCLT's receipt of written notice from Homeowner specifying the nature of KCCLT's failure to perform any such obligation.

Preserving Affordability. Homeowner and KCCLT agree that the provisions of this Article 11 are intended to preserve the affordability of the Home for lower income households and expand access to homeownership opportunities for such households.Sale of Leased Property by KCCLT. If ownership of the Leased Property is ever transferred by KCCLT (whether voluntarily or involuntarily) to any other person or institution, this Lease shall not cease, but shall remain binding on the new land-owner as well as the Homeowner. If KCCLT agrees to transfer the Leased Property to any person or institution other than a non-profit corporation, charitable trust, government agency or other similar institution sharing the goals described in the Recitals above, the Homeowner shall have a right of first refusal to purchase the Leased Property. The details of this right shall be as stated in Exhibit E, attached hereto (the "Right of First Refusal"). Any sale or other transfer contrary to this Section shall be null and void. Inheritance of Home and Leasehold Interest. The executor or personal representative of Homeowner's estate must notify KCCLT within ninety (90) days of the date of Homeowner's death (or the death of the last surviving co-owner of the Home). Following notification of the Homeowner's death, the KCCLT shall provide to the executor or personal representative the minimum qualifications for an Income-Qualified Person. Any named beneficiary shall have a period of one hundred twenty (120) following the date of Homeowner's death to provide KCCLT with sufficient evidence that the beneficiary meets the minimum qualifications for an Income-Qualified Person.

If KCCLT is satisfied with the beneficiary's qualifications, the KCCLT shall provide to the named beneficiary, and the named beneficiary shall promptly submit to KCCLT Board of Directors, a Letter of Agreement and a Letter of Attorney's Acknowledgment in substantially the same form as attached hereto as Exhibits B-1 and B-2. Upon KCCLT's receipt of the completed Letter of Agreement and Letter of Attorney's Acknowledgement, KCCLT shall consent to the transfer of the Home and Homeowner's interest in the Leased Property, and the KCCLT shall prepare a new Lease in accordance with this Article 11. If no heir at law can demonstrate that they are an Income-Qualified Person, they shall not be entitled to possession of the Home and the Home must be transferred to the KCCLT in accordance with the provisions of this Article 11. KCCLT agrees to make all reasonable efforts to cooperate with a beneficiary or heir at law for the purpose of carrying out the terms of this Section.Permitted Transfers. Subject to KCCLT's Right of First Refusal, Homeowner may transfer the Home to only the KCCLT or an Income-Qualified Person or otherwise only as explicitly permitted by the provisions of this Article 11. All such transfers are to be completed only in strict compliance with this Article 11. Any purported transfer that does not follow the procedures set forth below, except in the case of a transfer to a Permitted Mortgagee in lieu of foreclosure, shall be null and void.Intent-to-Sell Notice. In the event that Homeowner wishes to sell the Home, Homeowner shall first notify KCCLT, in writing, of Homeowner's intent to sell (the "Intent-to-Sell Notice").

The Intent-to-Sell Notice shall include a statement as to whether Homeowner recommends a prospective buyer as of the date of the Intent-to-Sell Notice.Appraisal. No later than ten (10) days after KCCLT's receipt of Homeowner's Intent-to-Sell Notice, KCCLT shall commission a market valuation of the Leased Property and the Home (the "Appraisal") to be performed by a duly licensed appraiser who is acceptable to KCCLT and Homeowner. KCCLT shall pay the cost of such Appraisal.

The Appraisal shall be conducted by analysis and comparison of comparable properties as though title to Leased Property and Home were held in fee simple absolute by a single party, disregarding all of the restrictions of this Lease on the use, occupancy and transfer of the property. The Appraisal shall state the values contributed by the Leased Property and by the Home (consisting of improvements only) as separate amounts. Copies of the Appraisal are to be provided to both KCCLT and Homeowner. Should the Homeowner ultimately decide to not sell the house, the cost of any further appraisals made in the twelve (12) months following the voided Intent-to-Sell-Notice shall be borne by the Homeowner.

KCCLT Purchase Option. Upon receipt of an Intent-to-Sell Notice from Homeowner, regardless of whether the Homeowner has indicated a desire to sell the home to an Income-Qualified Person, the KCCLT shall have the option to purchase the Home at the Purchase Option Price (defined in Section 11.11, below) (the "KCCLT Purchase Option"). The KCCLT Purchase Option is designed to further the purpose of preserving the affordability of the Home for succeeding Income-Qualified Persons while taking fair account of the investment by the Homeowner.

If KCCLT elects to purchase the Home, KCCLT shall exercise the KCCLT Purchase Option by notifying Homeowner, in writing, of such election within forty-five (45) days of the receipt of the Appraisal (the "Option Notice"). Upon delivery of the Option Notice, KCCLT may either proceed to purchase the Home directly or may assign the KCCLT Purchase Option to an Income-Qualified Person. In either case, Homeowner shall fully cooperate with KCCLT or its assignee to consummate the sale of the Home within sixty (60) days' receipt of the Option Notice (the "Option Period"). The Option Period may be extended by mutual agreement of KCCLT and Homeowner. Expiration of KCCLT Purchase Option. If the KCCLT does not timely exercise the KCCLT Purchase Option, or if KCCLT fails to complete the purchase within the Option Period, Homeowner may sell the Home to any Income-Qualified Person for not more than the then applicable Purchase Option Price. If Homeowner has made diligent efforts to sell the Home for at least six (6) months following the later to occur of either (i) the expiration of the KCCLT Purchase Option, or (ii) the Option Period, Homeowner may then sell the Home to any party, regardless of whether that party is an Income-Qualified Person, for a price no greater than the then applicable Purchase Option Price.Right of First Refusal in Lieu of Purchase Option. If the provisions of this Article 11 governing the KCCLT Purchase Option shall, for any reason, become unenforceable, KCCLT shall nevertheless have a Right of First Refusal to purchase the Home at the highest documented bona fide purchase price offer made to Homeowner and in accordance with the terms specified in Exhibit E.

Any sale or transfer contrary to this Section, when applicable, shall be null and void.Power of Attorney for Sale of Home. If KCCLT does not exercise the KCCLT Purchase Option and complete the purchase of Home, and if Homeowner (a) is not then residing in the Home, and (b) continues to hold the Home out for sale but is unable to locate a buyer and execute a binding purchase and sale agreement within one year of the date of the Intent to Sell Notice, Homeowner hereby appoints KCCLT as its attorney in fact to seek a buyer, negotiate a reasonable price that furthers the purposes of this Lease, sell the Home, and pay to the Homeowner the proceeds of sale, minus KCCLT's costs of sale and any other sums owed KCCLT by Homeowner.

Purchase Option Price. In no event may the Home be sold for a price that exceeds the Purchase Option Price. The Purchase Option Price shall be the lesser of (a) the value of the Home (consisting of improvements only) as determined by the Appraisal commissioned and conducted as provided in Section 11.06 above, or (b) an amount equal to Homeowner's Base Price, as stated below, plus 25% of the increase in market value of the Home, if any, calculated as follows (the "Formula Price"):

1. Homeowner's Base Price: The parties agree that the Homeowner's Base Price for Homeowner's Property as of the Effective Date is $[__________].

2. Initial Appraised Value: The parties agree that the Initial Appraised Value of the Home at the time of Homeowner's purchase is $[________], as documented by the appraiser's report attached to hereto as Exhibit G.

3. Increase in Market Value: The increase in market value of the Home is equal to the appraised value of the Home at time of sale, calculated according to the Appraisal, minus the Initial Appraised Value.

4. Homeowner's Share of Increase in Market Value: Homeowner's share of the increase in the market value of the Home equals twenty-five percent (25%) of the increase in market value as calculated above.

5. Price Ceiling: The Parties agree that the Formula Price shall not exceed a price which would be greater than the "Affordability Limit," which is 30% of the gross income of a family size equal to the number of bedrooms in the Home plus one, whose income is either (i) 80% of the Jackson County Area Median Income limits provided by HUD; or, if such metrics are no longer available, then (ii) an income calculation of reasonably similar effect to be selected by KCCLT in its sole and absolute discretion. In the event that the Formula Price exceeds the Affordability Limit, the price will be equal to the Affordability Limit.

Qualified Purchaser to Receive New Lease. KCCLT shall issue a new lease to any person who purchases the Home in accordance with the terms of this Article 11. The terms of such lease shall be the same as those of new leases issued to homebuyers at that time for land not previously leased by KCCLT.Required Repairs Upon Transfer. The Homeowner is required to make necessary repairs when she voluntarily transfers the Home as follows:

1. The person purchasing the Home ("Buyer") shall, prior to purchasing the Home, hire at her sole expense a building inspector, approved by the KCCLT Board of Directors, to assess the condition of the Home and prepare a written report of the condition ("Inspection Report").

2. The Homeowner shall cooperate fully with the inspection. The Buyer shall provide a copy of the Inspection Report to Buyer's lender (if any), the Homeowner, and the KCCLT within ten (10) days after receiving the Inspection Report.

3. Homeowner shall repair specific reported defects or conditions necessary to bring the Home into full compliance with Sections 5.06 and 7.05 above prior to transferring the Home.

4. Homeowner shall bear the full cost of the necessary repairs and replacements. However, upon Homeowner's written request, the KCCLT may allow the Homeowner to pay all or a portion of the repair costs after transfer, from Homeowner's proceeds of sale, if Homeowner cannot afford to pay such costs prior to the transfer. In such event, either (i) 150% of the unpaid estimated cost of repairs, or (ii) 100% of the unpaid cost of completed repairs shall be withheld from Homeowner's proceeds of sale in a KCCLT-approved escrow account. Also, upon Homeowner's written request, KCCLT may, at its discretion, agree to release funds from the Repair Reserve Fund to cover some or all of the cost of such repairs, provided that such use of the Repair Reserve Fund is in full compliance with Section 7.07, above.

5. Homeowner shall allow KCCLT, Buyer, and Buyer's building inspector and lender's representative to inspect the repairs prior to closing to determine that the repairs have been satisfactorily completed.

6. Upon sale or other transfer, Homeowner shall either (i) transfer the Home with all originally purchased appliances or replacements in the Home in good working order, or (ii) reduce the Purchase Option Price by the market value of any such appliances that are not left with the Home in good working order.

Notice. Whenever this Lease requires either party to give notice to the other, the notice shall be given in writing and delivered in person or mailed, by certified or registered mail, return receipt requested, to the party at the address set forth below, or such other address designated by like written notice:

KCCLT: Marlborough Community Land Trust
1809 E 80th Street
Kansas City, MO 64132

Homeowner: [NAME OF HOMEOWNER]

All notices, demands and requests shall be effective upon being deposited in the United States Mail or, in the case of personal delivery, upon actual receipt.

Severability. If any part of this Lease is unenforceable or invalid, such material shall be read out of this Lease and shall not affect the validity of any other part of this Lease or give rise to any cause of action of Homeowner or KCCLT against the other, and the remainder of this Lease shall be valid and enforced to the fullest extent permitted by law.

Waiver. KCCLT's written waiver of any requirement or restriction in this Lease, or the failure of KCCLT to take action with respect to any breach of any such requirement or restriction, shall not be deemed to be a waiver with regard to any subsequent breach of such requirement or restriction, nor of any other requirement or restriction in the Lease. Subsequent acceptance of Lease Fee payments by KCCLT shall not be deemed to be a waiver of any preceding breach by Homeowner of any requirement or restriction in this Lease, other than the failure of the Homeowner to pay the particular Lease Fee so accepted, regardless of KCCLT's knowledge of such preceding breach at the time of acceptance of such Lease Fee payment.

KCCLT's Right to Prosecute or Defend. KCCLT shall have the right, but shall have no obligation, to prosecute or defend, in its own or the Homeowner's name, any actions or proceedings appropriate to the protection of its own or Homeowner's interest in the Leased Property or the Home. Whenever requested by KCCLT, Homeowner shall give KCCLT all reasonable aid in any such action or proceeding.

Construction. Whenever in this Lease a pronoun is used it shall be construed to represent either the singular or the plural, the masculine, feminine, or neuter-gender, as the case shall demand.
Headings. The headings, subj\headings, and table of contents appearing in this Lease are for convenience only, and are not a part of this Lease and do not, in any way, limit or amplify the terms or conditions of this Lease.

Parties Bound. This Lease sets forth the entire agreement between KCCLT and Homeowner with respect to the Leased Property, and is binding upon and inures to the benefit of both KCCLT and Homeowner, and their respective successors and assigns.

Amendments. This Lease may be altered or amended only by written agreement, signed by both KCCLT and Homeowner, or either of their respective legal representatives, successors, or assigns.

Recording. As an alternative to recording this Lease, the parties agree to execute a notice of lease or short-form lease in recordable form, in compliance with applicable law, and satisfactory to KCCLT in all respects. In no event shall any such document state the rent or other charges payable by Homeowner under this Lease. In addition, any such document executed and recorded in accordance with this Section must expressly state that it is executed to memorialize certain terms of the Lease, and is not intended to amend or alter any terms or conditions thereof.

Governing Law. This Lease shall be interpreted with and governed by the laws of the State of Missouri. All provisions of this Lease shall be construed in accordance with the fair meaning thereof, in all respects, and not strictly for or against either party hereof.

Rights Surviving Termination or Expiration of the Lease. It is the intention of the parties that the KCCLT Purchase Option and all other rights of both parties under this Lease shall continue in effect for the full term of this Lease and any renewal thereof, and shall be considered to be coupled with an interest. In the event any such option or right shall be construed to be subject to any rule of law limiting the duration of such option or right, the time period for the exercising of such option or right shall be construed to expire twenty (20) years after the death of the last survivor of the following persons:

[Name of child/grandchild of Homeowner]
OR
[Other name of young life in being of board member, officer, employee of KCCLT board]