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HomeMy WebLinkAbout08870ORDINANCE NO. 8870 AN ORDINANCE AUTHORIZING AND APPROVING FUNDING OF A PORTION OF THE REGIONAL TOURISM PROJECT THROUGH THE SALE AND LEASE-BACK OF CERTAIN PROPERTY CURRENTLY OWNED BY THE PUEBLO URBAN RENEWAL AUTHORITY AND APPROVING AN AMENDMENT TO A COOPERATION AGREEMENT, A LEASE PURCHASE AGREEMENT, AN ESCROWED DEED AND OTHER RELATED DOCUMENTS AND ACTIONS IN CONNECTION THEREWITH WHEREAS, the City of Pueblo, in the County of Pueblo and State of Colorado (the “City”), is a municipal corporation duly organized and existing as a home rule city pursuant to Article XX of the Constitution of the State of Colorado and the home rule charter of the City (the “Charter”); and WHEREAS, the City is authorized, pursuant to the Charter and relevant laws of the State of Colorado, to acquire, hold, lease, and dispose of property including entering into lease purchase agreements in order to provide lands and facilities for governmental purposes; and WHEREAS, the Colorado Economic Development Commission (the “Commission”) approved the application of the City for a regional tourism project described as the Pueblo Professional Bull Riders University and the Heritage of Heroes Project (the “RTA Project”) pursuant to the Colorado Regional Tourism Act, Part 3 of Article 46, Title 24, C.R.S. (the “Act”); and WHEREAS, the City entered into an agreement entitled Cooperation Agreement Pueblo Professional Bull Riders University and Heritage of Heroes Project dated February 25, 2013 (the “Agreement”), with the Pueblo Urban Renewal Authority (the “Authority”) to comply with requirements related to the RTA Project pursuant to the Act; and WHEREAS, in order to generate moneys to finance the design, construction, equipping and improvement of Phase 1 and a part of Phase 2 of the RTA Project consisting generally of (i) the expansion of the Pueblo Convention Center with the addition of approximately 45,000 square feet (including enhancements to the Medal of Honor/Walk of Valor and construction of an approximately 18,000 square foot arena to be connected to the Convention Center to be called the Pueblo Professional Bull Riders University Arena); (ii) construction of an approximately 15,000 square foot Gateway Center (but excluding the boathouse facility) with an outdoor plaza to be called the Heritage Event Plaza; and (iii) installation and construction of surface parking, infrastructure and other ancillary items (collectively, the “Financed Project”) pursuant to the Act, the City Council of the City (the “City Council”) has determined that it is in the best interests of the City and its residents that the City (a) enter into that certain Amendment to Cooperation Agreement (“Amendment No. 1”), between the City and the Authority establishing the terms and conditions related to a sale-lease-back lease purchase financing between the City and the Authority for the purpose of funding the Financed Project, (b) acquire title to the property (whether existing now or hereafter) comprising such structures as part of the Financed Project (the “Property”) pursuant to a deed (the “Deed”) to be executed and delivered to the City by the Authority, and (c) enter into that certain Lease Purchase Agreement (the “Lease”), between the City, as lessor, and the Authority, as lessee, providing for the lease-back of the Property from the City to the Authority, in substantially the form presented to the City and made available to the City Council prior to this meeting; and WHEREAS, the City Council has been presented with forms of the Amendment No. 1, the Deed, the Lease, and that certain escrowed deed (the “Escrowed Deed”) pursuant to which the City shall convey the Property back to the Authority upon satisfaction of the requirements for such conveyance as set forth in the Lease; and WHEREAS, the City Council desires to authorize and otherwise proceed with the sale-lease-back lease purchase financing of the Financed Project; NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO: SECTION 1. Ratification of Prior Actions .All action heretofore taken (not inconsistent with the provisions of this Ordinance) by the City Council or the officers or employees of the City, directed toward the acquisition of the Property from the Authority and the lease- back of the Property to the Authority are hereby ratified, approved and confirmed. SECTION 2. Finding and Determination .The City Council hereby finds and determines, pursuant to the provisions of the Charter, that acquiring the Property from and leasing the Property to the Authority under the terms and provisions set forth in the Cooperation Agreement and the Lease is necessary, convenient, efficient and economical, and in furtherance of the governmental purposes of the City, and is in the best interests of the City and its residents; and the City Council hereby authorizes such transactions. SECTION 3. Approval of Cooperation Agreement, Lease and Escrowed Deed .The Cooperation Agreement, Lease and Escrowed Deed, in substantially the forms presented to the City and made available to the City Council prior to this meeting and with substantially the same content, are in all respects approved, authorized and confirmed, and the President or Vice President of the City Council is authorized and directed to affix his or her signature to the Cooperation Agreement, Lease and Escrowed Deed in substantially the form and with substantially the same content as presented to this meeting of the City Council, for and on behalf of the City, but with such changes, modifications, additions or deletions therein as the President or Vice President of the City Council and the City Attorney shall deem necessary, desirable or appropriate, the execution thereof to constitute conclusive evidence of their approval of any and all changes, modifications, additions or deletions therein from the forms and content of the Cooperation Agreement, Lease and Escrowed Deed presented to the City and made available to the City Council prior to this meeting. SECTION 4. Consent and Approval of Deed .The City Council hereby approves and acknowledges the Deed in substantially the form presented to the City and made available to the City Council prior to this meeting of the City Council and with substantially the same content, and the City Council consents to the conveyance by the Authority to the City, pursuant to the Deed, of all right, title, interest, claim and demand of the Authority in and to the Property. SECTION 5. Other Actions in Furtherance of this Ordinance .The City Clerk is hereby authorized and directed to attest all signatures and acts of any official of the City Council or the City in connection with the matters authorized by this Ordinance, and to place the seal of the City on the Cooperation Agreement, Lease and Escrowed Deed authorized and approved by this Ordinance. The President or Vice President of the City Council and other officials of the City Council or the City are hereby authorized to execute and deliver for and on behalf of the City any and all additional certificates, documents and other papers and to perform all other acts that they may deem necessary or appropriate in order to implement and carry out the transactions and other matters authorized and contemplated by this Ordinance. The appropriate officers of the City Council or the City are authorized to execute on behalf of the City agreements concerning the deposit and investment of funds in connection with the transactions contemplated by this Ordinance. SECTION 6. Home Rule Powers Invoked .In authorizing and approving the actions herein set forth, it is the intent of the City Council of the City to exercise the home rule powers of the City granted pursuant to the Colorado Constitution and the Charter, and the City Council of the City hereby finds, determines and declares that the matters herein referred to are matters of local or municipal concern and are appropriate for the exercise of the home rule powers of the City. SECTION 7. Severability .If any section, paragraph, clause or provision of this Ordinance (other than provisions for the conveyance of the Property to the Authority under the conditions provided in the Lease) shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, clause or provision shall not affect any of the remaining provisions of this Ordinance. SECTION 8. Repealer .All bylaws, orders and ordinances, or parts thereof, inconsistent with this Ordinance or with any of the documents hereby approved, are hereby repealed only to the extent of such inconsistency. This repealer shall not be construed as reviving any bylaw, order or ordinance, or part thereof. SECTION 9. Public Hearing .A public hearing on this Ordinance shall be held on May 11, 2015, at 7:00 p.m., in the City Council Chambers, One City Hall Place, Pueblo, Colorado. INTRODUCED: April 27, 2015 BY: Dennis Flores PASSED AND APPROVED: May 11, 2015 City Clerk’s Office Item # R-8 Background Paper for Proposed Ordinance COUNCIL MEETING DATE: April 27, 2015 TO: President Stephen G. Nawrocki and Members of City Council CC: Sam Azad, City Manager VIA: Gina Dutcher, City Clerk FROM: Daniel C. Kogovsek, City Attorney SUBJECT: AN ORDINANCE AUTHORIZING AND APPROVING FUNDING OF A PORTION OF THE REGIONAL TOURISM PROJECT THROUGH THE SALE AND LEASE- BACK OF CERTAIN PROPERTY CURRENTLY OWNED BY THE PUEBLO URBAN RENEWAL AUTHORITY AND APPROVING AN AMENDMENT TO A COOPERATION AGREEMENT, A LEASE PURCHASE AGREEMENT, AN ESCROWED DEED AND OTHER RELATED DOCUMENTS AND ACTIONS IN CONNECTION THEREWITH SUMMARY: Attached is a proposed Ordinance authorizing the City to provide construction financing in the principal amount of $14,400,000.00 for Phase 1 and a portion of Phase 2 of the RTA Project. PREVIOUS COUNCIL ACTION: On December 8, 2014, by Ordinance No. 8804, City Council amended the Half-Cent Sales Tax Criteria Ordinance to authorize the RTA Project construction financing approved by this Ordinance. BACKGROUND: This Ordinance authorizes and approves a “sale and lease-back” lease purchase financing for the RTA Project, whereby the City would acquire the site of the RTA Project improvements from the Pueblo Urban Renewal Authority (“PURA”) and then lease the same back to PURA for a leasehold period terminating on December 31, 2025. PURA is required to complete the re- payment of the financing by December 31, 2025, at which time, assuming compliance with the terms of the Lease, and payment of the negotiated purchase option price under the Lease, the project site, including the financed improvements will be conveyed by the City back to PURA. This Ordinance approves and authorizes the President of the City Council to sign the following principal documents, as well as other related documents, which memorialize the agreements between the City and PURA regarding the financed RTA Project:  Amendment No. 1 to Cooperation Agreement  Lease Purchase Agreement  Escrowed Deed FINANCIAL IMPLICATIONS: The City shall receive a two percent (2%) return on the construction financing provided during the first five (5) years of the lease (through 12/31/2020). This will increase to three percent (3%) for the remaining five (5) years of the lease (through 12/31/2025). BOARD/COMMISSION RECOMMENDATION: Not applicable. STAKEHOLDER PROCESS: The Pueblo Economic Development Corporation recommends approval of this Ordinance. ALTERNATIVES: PURA could be directed to seek construction financing from other sources. RECOMMENDATION: Approve the Ordinance. Attachments:  Amendment No. 1 to Cooperation Agreement  Lease Purchase Agreement  Escrowed Deed KUTAK ROCK LLP DRAFT 04/21/2015 LEASE PURCHASE AGREEMENT between CITY OF PUEBLO, COLORADO as Lessor, and PUEBLO URBAN RENEWAL AUTHORITY as Lessee Dated as of ________ ___, 2015 4846-0353-6418.7 TABLE OF CONTENTS Page ARTICLE I DEFINITIONS Section 1.01. Terms Defined in Preamble and Recitals ......................................................... 2 Section 1.02. Additional Definitions ..................................................................................... 2 ARTICLE II REPRESENTATIONS, COVENANTS AND WARRANTIES Section 2.01. Representations, Covenants and Warranties of the Authority ......................... 5 Section 2.02. Representations, Covenants and Warranties of the City .................................. 6 ARTICLE III LEASE OF LEASED PROPERTY ............................................................................................... 6 ARTICLE IV LEASE TERM Section 4.01. Duration of Lease Term ................................................................................... 6 Section 4.02. Termination of Lease Term ............................................................................. 7 ARTICLE V ENJOYMENT OF LEASED PROPERTY .................................................................................... 7 ARTICLE VI PAYMENTS BY THE AUTHORITY Section 6.01. Payments to Be Paid From Available Revenue ............................................... 8 Section 6.02. Lease Rental Payments .................................................................................... 8 Section 6.03. Manner of Payment .......................................................................................... 8 Section 6.04. Expression of Authority’s Need for the Leased Property ................................ 8 ARTICLE VII TITLE TO THE LEASED PROPERTY; LIMITATIONS ON ENCUMBRANCES Section 7.01. Title to the Leased Property ............................................................................. 9 Section 7.02. No Encumbrance, Mortgage or Pledge of Leased Property ............................ 9 ARTICLE VIII MAINTENANCE; TAXES; INSURANCE AND OTHER CHARGES Section 8.01. Maintenance of the Leased Property by the Authority .................................... 9 4846-0353-6418.7 Section 8.02. Modification of the Leased Property, Installation of Furnishings and Machinery of the Authority ............................................................................. 9 Section 8.03. Taxes, Other Governmental Charges and Utility Charges ............................. 10 Section 8.04. Provisions Regarding Liability, Property and Worker’s Compensation Insurance ........................................................................................................ 10 Section 8.05. Granting of Easements ................................................................................... 11 ARTICLE IX DAMAGE, DESTRUCTION AND CONDEMNATION; USE OF NET PROCEEDS Section 9.01. Damage, Destruction and Condemnation ...................................................... 12 Section 9.02. Obligation of the Authority to Repair and Replace the Leased Property ...... 12 Section 9.03. Insufficiency of Net Proceeds ........................................................................ 12 Section 9.04. Cooperation of the City .................................................................................. 13 Section 9.05. Condemnation by the Authority..................................................................... 13 ARTICLE X DISCLAIMER OF WARRANTIES; OTHER COVENANTS Section 10.01. Disclaimer of Warranties ............................................................................... 13 Section 10.02. Further Assurances and Corrective Instruments ............................................ 13 Section 10.03. Compliance With Requirements .................................................................... 14 Section 10.04. Immunity and Indemnification ...................................................................... 14 Section 10.05. Access To Leased Property ............................................................................ 14 Section 10.06. Environmental Covenant ............................................................................... 14 ARTICLE XI PURCHASE AND CONVEYANCE OF THE LEASED PROPERTY Section 11.01. Purchase Option ............................................................................................. 15 Section 11.02. Conveyance of the Leased Property .............................................................. 15 Section 11.03. Manner of Conveyance .................................................................................. 16 Section 11.04. Escrowed Deed .............................................................................................. 16 ARTICLE XII ASSIGNMENT, SUBLEASING AND USE BY AUTHORITY ................................................ 16 ARTICLE XIII EVENTS OF DEFAULT AND REMEDIES Section 13.01. Events of Default Defined ............................................................................. 17 Section 13.02. Remedies on Default ...................................................................................... 17 Section 13.03. Limitations on Remedies ............................................................................... 18 Section 13.04. No Remedy Exclusive.................................................................................... 18 Section 13.05. Waivers .......................................................................................................... 18 Section 13.06. Agreement to Pay Attorneys’ Fees and Expenses ......................................... 18 ii 4846-0353-6418.7 ARTICLE XIV CONSTRUCTION OF THE FINANCED PROJECT Section 14.01. Agreement to Construct the Financed Project ............................................... 18 Section 14.02. Project Account; Disbursements for Eligible Costs of the Financed Project 19 Section 14.03. Completion of the Financed Project .............................................................. 20 Section 14.04. Project Contracts ............................................................................................ 20 Section 14.05. Project Documents ......................................................................................... 21 Section 14.06. Defaults Under Project Contracts .................................................................. 21 Section 14.07. Performance and Payment Bonds .................................................................. 21 Section 14.08. Commercial General Liability Insurance; Business Automobile Liability Insurance ........................................................................................................ 22 Section 14.09. Builder’s Risk Insurance ................................................................................ 22 Section 14.10. Worker’s Compensation Insurance ................................................................ 23 ARTICLE XV MISCELLANEOUS Section 15.01. Sovereign Powers of Authority ...................................................................... 24 Section 15.02. Notices ........................................................................................................... 24 Section 15.03. Binding Effect ................................................................................................ 24 Section 15.04. Amendments, Changes and Modifications .................................................... 24 Section 15.05. No Assignment by City .................................................................................. 24 Section 15.06. Net Lease ....................................................................................................... 24 Section 15.07. Payments Due on Holidays ............................................................................ 24 Section 15.08. Severability .................................................................................................... 25 Section 15.09. Execution in Counterparts .............................................................................. 25 Section 15.10. Applicable Law .............................................................................................. 25 Section 15.11. Captions ......................................................................................................... 25 EXHIBIT A DESCRIPTION OF LEASED PROPERTY EXHIBIT B LEASE RENTAL PAYMENTS SCHEDULE iii 4846-0353-6418.7 LEASE PURCHASE AGREEMENT THIS LEASE PURCHASE AGREEMENT dated as of ________ ___, 2015 (this CITY OF PUEBLO, COLORADO “Lease”), by and between the (the “City” or Lessor”), a home rule municipality and political subdivision duly organized and existing under the laws of PUEBLO URBAN RENEWAL the State of Colorado (the “State”), as lessor, and the AUTHORITY (the “Authority” or “Lessee”), a body corporate and politic duly organized and existing under the laws of the State, as lessee (the parties are sometimes referred to herein collectively as the “Parties” and individually as a “Party”); W I T N E S S E T H: WHEREAS, pursuant to a Cooperation Agreement dated as of February 25, 2013, as amended by Amendment No. 1 thereto dated as of _______, 2015 (collectively, the “Cooperation Agreement”), the Parties are cooperating to carry out a regional tourism project described as the Pueblo Professional Bull Riders University and Heritage of Heroes Project (the “RTA Project”) in accordance with the Colorado Regional Tourism Act, Part 3 of Article 46, Title 24, C.R.S. (the “Act”) and Resolution No. 1 adopted by the Colorado Economic Development Commission as of May 18, 2013 (“CEDC Resolution No. 1”), which implements the Act with respect to the RTA Project; and WHEREAS, in order to generate moneys to finance the design, construction, equipping and improvement of Phase 1 and a part of Phase 2 of the RTA Project consisting generally of (i) the expansion of the Pueblo Convention Center with the addition of approximately 45,000 square feet (including enhancements to the Medal of Honor/Walk of Valor and construction of an approximately 18,000 square foot arena to be connected to the Convention Center to be called the Pueblo Professional Bull Riders University Arena); (ii) construction of an approximately 15,000 square foot Gateway Center (but excluding the boathouse facility) with an outdoor plaza to be called the Heritage Event Plaza; and (iii) installation and construction of surface parking , infrastructure and other ancillary items (collectively, the “Financed Project”) pursuant to the Act, the Board of Commissioners of the Authority (the “Board”) has determined that the Authority shall execute a deed (the “Deed”), dated as of the date of this Lease, conveying the property (whether existing now or hereafter) comprising such structures, as more specifically described in Exhibit A hereto to the City, and lease such property back from the City pursuant to this Lease; and WHEREAS, this Lease is being entered into in furtherance of the RTA Project and in accordance with the Act, CEDC Resolution No. 1, and the Cooperation Agreement, as amended; and WHEREAS, the City is authorized (i) by Colorado Constitution, Article XX and the home rule Charter of the City to lease, as lessor or as lessee, real and personal property, and (ii) by Section 31-15-801, Colorado Revised Statutes, as amended, to enter into long-term rental or leasehold agreements to provide land, buildings, equipment and other property for governmental or proprietary purposes; and 4846-0353-6418.7 WHEREAS, the Authority is authorized by Section 31-25-105, Colorado Revised Statutes, as amended, to lease real property or any interest therein acquired by it as a part of an urban renewal project; and WHEREAS, the financing of the Financed Project (as hereafter defined), and the execution, performance and delivery of this Lease, have been authorized, approved and directed by the Board by a resolution duly adopted and by the City Council of the City (the “Council”) by an ordinance finally passed and adopted by the Council; NOW, THEREFORE, for and in consideration of the mutual promises and covenants herein contained, the parties hereto agree as follows: ARTICLE I DEFINITIONS Section 1.01. Terms Defined in Preamble and Recitals . The following terms shall have the meanings set forth in the preamble and recitals hereto: Act Financed Project Authority Lease Board Lessee CEDC Resolution No. 1 Lessor City Party and Parties Cooperation Agreement RTA Project Council State Section 1.02. Additional Definitions . The following additional terms shall have the meanings specified below: “Authorized Officer of the Authority” means any person authorized by resolution or ordinance of the Board to perform any act or execute any document. “Available Revenue” means the Percentage of State Sales Tax Increment Revenue due and payable to the Authority pursuant to CEDC Resolution No. 1. “Business Day” means any day other than a Saturday, a Sunday or a day on which banks in Pueblo, Colorado are authorized by law to remain closed. “Certificate of Completion” means a Certificate of Completion to be delivered by the Authority to the City upon Final Completion of the Financed Project pursuant to Section 14.03 hereof. “City Clerk” means the City Clerk for the City. “Commission” means the Colorado Economic Development Commission. 2 4846-0353-6418.7 “Counsel” means an attorney at law or law firm (who may be counsel for the City Attorney for the City or counsel to the Authority) who is satisfactory to both the Authority and the City. “Deed” means the Deed dated of even date herewith, whereby the Authority demises to the City the fee interest in real property upon which the Leased Property is located and the improvements located or to be located thereon. “Eligible Costs” shall have the same meaning as in the Cooperation Agreement. “Event of Default” means one or more events of default as defined in Section 14.01 of this Lease. “Final Completion” means and shall be deemed to have occurred in connection with the Financed Project when the Authority has delivered to the City the Certificate of Completion; provided that Final Completion shall occur not later than three (3) years after ________, 20__. “Fiscal Year” means the fiscal or budget year of the Authority. “Force Majeure” means, without limitation, the following: acts of God; strikes, lockouts or other industrial disturbances; acts of public enemies; orders or restraints of any kind of the government of the United States of America or of the State or any of their departments, agencies or officials or any civil or military authority; insurrection; riots; landslides; earthquakes; fires; storms; droughts; floods; explosions; breakage or accidents to machinery, transmission pipes or canals; or any other cause or event not within the control of the Authority. Lease Balance” means, as of any date, the sum of the principal components of Lease Rental Payments shown in Exhibit B hereto which are still remaining to be paid. “Lease Rental Payments” means the payments payable by the Authority during the Lease Term pursuant to Section 6.02 of this Lease and as set forth in Exhibit B, as it may be amended hereunder from time to time, which constitute the payments payable by the Authority for and in consideration of the right to use the Leased Property during the Lease Term. “Lease Rental Payment Dates” means semiannual payments due on June 1 and December 1 of each Fiscal Year during the Lease Term. “Lease Rental Rate” means (i) from the commencement date of the Lease until December 31, 2020, two percent (2%) per annum; and (ii) commencing January 1, 2021 until the remainder of the Lease Term, three percent (3%) per annum. “Lease Remedy” or “Lease Remedies” means any or all remedial steps provided in Section 13.02 of this Lease whenever an Event of Default hereunder has happened and is continuing. “Lease Term” means the time during which the Authority is the lessee of the Leased Property under this Lease as set forth in Sections 4.01 and 4.02 of this Lease. 3 4846-0353-6418.7 “Leased Property” means the property described in Exhibit A attached hereto. “Net Proceeds” when used with respect to any performance or payment bond proceeds, or proceeds of insurance required by this Lease, or proceeds from any condemnation award, or any proceeds resulting from default or breaches of warranty under any contract relating to the Leased Property or proceeds from any Lease Remedy, means the amount remaining after deducting from such proceeds (a) all expenses (including, without limitation, attorneys’ fees and costs) incurred in the collection of such proceeds or award; and (b) all other fees, expenses and payments due to the City. “Opinion of Counsel” means a written opinion of legal counsel. “Percentage of State Sales Tax Increment Revenue” means twenty-four and seven-tenths percent (24.7%) of the portion of revenue derived from state sales tax revenue collected within the Regional Tourism Zone in excess of the Base Year Revenue, as such terms are defined in the Cooperation Agreement. “Permitted Encumbrances” means, as of any particular time: (a) liens for taxes and assessments, if any, not then delinquent, or liens which may remain unpaid pending contest pursuant to the provisions of Article VII and Article VIII of this Lease; (b) this Lease; (c) CEDC Resolution No. 1; (d) the Cooperation Agreement; (e) utility, access and other easements and rights of way, restrictions and exceptions which an Authorized Officer of the Authority certifies will not interfere with or impair the Leased Property, including rights or privileges in the nature of easements as provided in Section 8.06 of this Lease; (f) existing easements, covenants, restrictions, liens and encumbrances (if any) to which title to the Leased Property was subject when the fee interest therein was conveyed to the City pursuant to the Deed or otherwise, and which do not interfere in any material way with the Leased Property; and (g) such minor defects, irregularities, encumbrances and clouds on title as normally exist with respect to property of the general character of the Leased Property and as do not render the title unmarketable. “Project Contract” means any contract entered into by the Authority, acting on behalf of the City and in accordance with the Cooperation Agreement and CEDC Resolution No. 1, regarding the design, acquisition, construction, improvement or installation of any part of the Financed Project, including, without limitation, contracts with construction contractors, vendors, architects, engineers and other professionals and consultants performing work or providing services in connection with the implementation and completion of the Financed Project. “Project Documents” means the following, which must conform with the applicable requirements of the Cooperation Agreement and CEDC Resolution No. 1: (a) plans, drawings and specifications for the Financed Project, when and as they are approved by the Authority, including change orders, if any; (b) any necessary permits for the Financed Project, including any building permits and certificates of occupancy; (c) the Project Contracts; (d) policies of title, public liability, property and worker’s compensation insurance, or certificates thereof, as required by this Lease; (e) performance and payment bonds with respect to the Financed Project; and (f) any and all other documents executed by or furnished to the Authority or the City in connection with the Financed Project. 4 4846-0353-6418.7 “Purchase Option Price” means the amount payable, at the option of the Authority, for the purpose of terminating this Lease with respect to the Leased Property and purchasing the Leased Property pursuant to Article XI of this Lease. The Purchase Option Price shall consist of the remaining Lease Balance shown in Exhibit B hereto after the last Lease Rental Payment Date preceding the termination of this Lease, plus the interest component of Lease Rental Payments accrued through the date of such termination. ARTICLE II REPRESENTATIONS, COVENANTS AND WARRANTIES Section 2.01. Representations, Covenants and Warranties of the Authority . The Authority represents, covenants and warrants as follows: (a)The Authority is a body corporate and politic of the State, duly organized and existing under the laws of the State. The Authority is authorized to enter into the transactions contemplated by this Lease and to carry out its obligations under this Lease. The Authority has duly authorized and approved the execution and delivery of this Lease. (b)The acquisition, construction and equipping of the Financed Project by the Authority are necessary, convenient, in furtherance of and will at all times be used in connection with the requirements of the Act, CEDC Resolution No. 1, and the Cooperation Agreement. (c)Neither the execution and delivery of this Lease, nor the fulfillment of or compliance with the terms and conditions of this Lease, nor the consummation of the transactions contemplated hereby or thereby, conflicts with or results in a breach of the terms, conditions or provisions of any restriction or any agreement or instrument to which the Authority is now a party or by which the Authority or its property is bound, or violates any statute, regulation, rule, order of any court having jurisdiction, judgment or administrative order applicable to the Authority, or constitutes a default under any of the foregoing, or results in the creation or imposition of any lien or encumbrance whatsoever upon any of the property or assets of the Authority, except for Permitted Encumbrances. (d)There is no litigation or proceeding pending or threatened against the Authority or any other person affecting the right of the Authority to execute this Lease or the ability of the Authority to make the payments required hereunder or to otherwise comply with the obligations contained herein. (e)Prior to, or contemporaneous with, the commencement of the Lease Term, the Authority shall deliver to the Commission (i) an executed copy of this Lease; (ii) an opinion of bond counsel to the Authority stating that the Lease is in conformance with CEDC Resolution No. 1; and (iii) a certificate of the External Financial Advisor as required by CEDC Resolution No. 1. (f)The Authority is in compliance, and at all times during the Lease Term shall remain in compliance, with the Cooperation Agreement and CEDC Resolution No. 1. 5 4846-0353-6418.7 Section 2.02. Representations, Covenants and Warranties of the City . The City represents, covenants and warrants as follows: (a)The City has all requisite power to acquire legal interests in the Leased Property and to execute, deliver, enter into and perform the transactions contemplated by this Lease and to carry out its obligations under this Lease, and has duly executed and delivered this Lease and all other documents related to this Lease. (b)Except as expressly provided in this Lease, the City will not pledge or assign its right, title and interest in and to any of its rights under this Lease or assign, pledge, mortgage, encumber or grant a security interest in its right, title and interest in, to or under this Lease or the Leased Property. The City represents that neither the Lease nor any interest therein will be transferred or resold except in compliance with Section 15.05 hereof. (c)Neither the execution and delivery of this Lease nor the fulfillment of or compliance with the terms and conditions hereof and thereof, nor the consummation of the transactions contemplated hereby and thereby, conflicts with or results in a breach of the terms, conditions and provisions of any restriction or any agreement or instrument to which the City is now a party or by which the City is bound, or constitutes a default under any of the foregoing. (d)There is no litigation or proceeding pending or threatened against the City or any other person affecting the right of the City to execute this Lease and to perform its obligations hereunder and thereunder. (e)The City acknowledges that the obligations of the Authority under this Lease are payable solely from Available Revenue under this Lease and shall not constitute or give rise to a general obligation of the Authority. ARTICLE III LEASE OF LEASED PROPERTY The City demises and leases the Leased Property, including any interest in the Leased Property, to the Authority, and the Authority leases the Leased Property, including any interest in the Leased Property, from the City, in accordance with the provisions of this Lease, subject only to Permitted Encumbrances, to have and to hold for the Lease Term. ARTICLE IV LEASE TERM Section 4.01. Duration of Lease Term . The Lease Term shall commence as of the date hereof and continue through December 31,2025. The Lease Term does not exceed the weighted average useful life of the Leased Property or the Financed Project. 6 4846-0353-6418.7 The officer of the Authority at any time charged with the responsibility of formulating budget proposals is hereby directed to include in the annual budget proposals submitted to the Board, items for all payments from Available Revenue required under this Lease for the ensuing Fiscal Year. Each budget required by law to be filed with the State Department of Local Affairs, Division of Local Government, shall include the foregoing information. The Authority shall in any event, promptly furnish the City with copies of its annual budget within seven days after the budget is adopted, but not later than the fourth day after the end of such Fiscal Year, provided that telephonic notice is provided by the Authority to the City of the adoption of the budget not later than the end of the first Business Day of the next succeeding Fiscal Year. Section 4.02. Termination of Lease Term . The Lease Term shall terminate upon the earliest of any of the following events: (a)the conveyance of all of the Leased Property to the Authority upon payment of the Purchase Option Price or all Lease Rental Payments as provided in Section 11.02(a) and (b) of this Lease; or (b)an Event of Default and termination of this Lease under Article XIII of this Lease. The Authority’s option to purchase the City’s interest in the Leased Property as provided in Section 11.01 and 11.02 shall survive the termination of this Lease for the period from such termination to and including December 31, 2025, after which date, the Authority shall have an additional option to purchase the interest of the City in the Leased Property for a purchase price consisting of an amount equal to the Lease Balance as of the date of termination of this Lease plus an amount equal to the interest accruing on such Lease Balance from the date of such termination to the date of purchase at the Lease Rental Rate. Upon termination of this Lease, the Authority agrees to peaceable surrender of possession of the Leased Property to the City or its assigns. ARTICLE V ENJOYMENT OF LEASED PROPERTY The City hereby covenants that the Authority shall during the Lease Term peaceably and quietly have, hold and enjoy the Leased Property without suit, trouble or hindrance from the City, except as expressly required or permitted by this Lease. The City shall, at the request of the Authority and at the cost of the Authority, join and cooperate fully in any legal action in which the Authority asserts its right to such possession and enjoyment, or which involves the imposition of any taxes or other governmental charges, if any, on or in connection with the Leased Property. In addition, the Authority may at its own expense join in any legal action affecting its possession and enjoyment of the Leased Property and shall be joined in any action affecting its liabilities hereunder. The Parties also hereby consent to the inspection by the other Party of all books, accounts and records maintained by each Party with respect to the Leased Property, the Cooperation Agreement, CEDC Resolution No. 1, and this Lease. 7 4846-0353-6418.7 ARTICLE VI PAYMENTS BY THE AUTHORITY Section 6.01. Payments to Be Paid From Available Revenue . The Authority and the City acknowledge and agree that the Lease Rental Payments and any other amounts due under this Lease, if any, shall be paid from then currently budgeted expenditures of the Authority, using Available Revenue. No provision of this Lease shall be construed to pledge or to create a lien on any class or source of Authority moneys, nor shall any provision of this Lease restrict the future issuance of any bonds or obligations of the Authority payable from any class or source of moneys of the Authority. Section 6.02. Lease Rental Payments . (a)The Authority shall pay all Lease Rental Payments directly to the City during the Lease Term in the amounts set forth in Exhibit B, attached hereto and made a part hereof, as it may be amended from time to time hereunder. (b)The Authority may, at any time during the Lease Term, pay the then applicable Purchase Option Price related to the Leased Property for the purpose of terminating this Lease and purchasing the Leased Property shown on Exhibit A, as further provided in Article XI of this Lease. The Authority shall give the City notice of its intention to exercise its option not less than 15 days in advance of the date of exercise and shall deposit with the City on or prior to an Interest Payment Date an amount equal to the Purchase Option Price. (c)A portion of each payment of Lease Rental Payments is paid as, and represents payment of, interest, and Exhibit B hereto, as may be amended from time to time hereunder, sets forth the interest component of each payment of Lease Rental Payments. Section 6.03. Manner of Payment . The Lease Rental Payments and, if paid, the Purchase Option Price, shall be paid by the Authority by certified funds or other method of payment acceptable to the City in lawful money of the United States of America to the City at its principal corporate trust office for deposit. Section 6.04. Expression of Authority’s Need for the Leased Property . As of the date of this Lease, the Authority declares its current need for the Leased Property, that the leasing of the Leased Property is beneficial to the Authority, and that the Leased Property is necessary and essential to the Authority’s purpose and operations under CEDC Resolution No. 1 and the Cooperation Agreement. 8 4846-0353-6418.7 ARTICLE VII TITLE TO THE LEASED PROPERTY; LIMITATIONS ON ENCUMBRANCES Section 7.01. Title to the Leased Property . Title to the Leased Property shall remain in the City, subject to this Lease. Except as expressly set forth in this Lease, the Authority shall have no right or interest in the Leased Property or any additions and modifications thereto or replacements thereof. Section 7.02. No Encumbrance, Mortgage or Pledge of Leased Property . Except as may be permitted by this Lease, the Authority shall not permit any mechanic’s or other lien to remain against the Leased Property; provided that, if the Authority shall first notify the City of the intention of the Authority to do so, the Authority may in good faith contest any mechanic’s or other lien filed or established against the Leased Property, 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 unless the City shall notify the Authority that, in the Opinion of Counsel, by nonpayment of any such items the City’s title to or interest in the Leased Property will be materially endangered, or the Leased Property or any part thereof will be subject to loss or forfeiture, in which event the Authority shall promptly pay and cause to be satisfied and discharged all such unpaid items (provided, however, that such payment shall not constitute a waiver of the right to continue to contest such items). The City will cooperate fully with the Authority in any such contest, upon the request and at the expense of the Authority. Except as may be permitted by this Lease, the City shall not directly or indirectly create, incur, assume or suffer to exist any mortgage, pledge, lien, charge, encumbrance or claim on or with respect to the Leased Property, except Permitted Encumbrances. The Authority and the City shall promptly, at their own respective expense, take such action as may be necessary to duly discharge any such mortgage, pledge, lien, charge, encumbrance or claim not excepted above which each shall respectively have created, incurred, or suffered to exist. ARTICLE VIII MAINTENANCE; TAXES; INSURANCE AND OTHER CHARGES Section 8.01. Maintenance of the Leased Property by the Authority . The Authority agrees that at all times during the Lease Term the Authority will maintain, preserve and keep all portions of the Leased Property or cause the Leased Property to be maintained, preserved and kept, in good repair, working order and condition, and that the Authority will from time to time make or cause to be made all necessary and proper repairs, except as otherwise provided in Sections 9.02 and 10.03 of this Lease. The City shall not have any responsibility for such maintenance or repairs or for the making of any additions, modifications or replacements to the Leased Property. Section 8.02. Modification of the Leased Property, Installation of Furnishings and Machinery of the Authority . The Authority shall have the privilege of making substitutions, additions, modifications and improvements to any portion of the Leased Property, at its own cost 9 4846-0353-6418.7 and expense; and the same shall be included in the Leased Property and shall be subject to the rights of the City under the terms of this Lease; provided, however, that such substitutions, additions, modifications and improvements shall not in any way damage the Leased Property or cause the Leased Property to be used for purposes other than in accordance with CEDC Resolution No. 1 and the Cooperation Agreement and provided that the Leased Property, as improved or altered, upon completion of such substitutions, additions, modifications and improvements, shall be of a value not less than the value of the Leased Property immediately prior to making such substitutions, additions, modifications and improvements. The Authority may also, from time to time in its sole discretion and at its own expense, install machinery, equipment, and other tangible personal property in or on any Leased Property. All such machinery, equipment, and other tangible personal property shall remain the sole property of the Authority in which the City shall have not any interest; provided, however, that any such machinery, equipment, and other tangible personal property which becomes permanently affixed to any Leased Property shall be included in the Leased Property and shall be subject to the rights of the City under the terms of this Lease, in the event the City shall reasonably determine that such Leased Property would be materially damaged or impaired by the removal of such machinery, equipment, or other tangible personal property. Section 8.03. Taxes, Other Governmental Charges and Utility Charges . In the event that the Leased Property or any portion thereof shall, for any reason, be deemed subject to taxation, assessments or charges lawfully made by any governmental body, the Authority shall pay the amount of all such taxes, assessments and governmental charges when due. With respect to special assessments or other governmental charges which may be lawfully paid in installments over a period of years, the Authority shall be obligated to pay such installments as are required to be paid during the upcoming Fiscal Year. Except for Permitted Encumbrances, the Authority shall not allow any liens for taxes, assessments or governmental charges to exist with respect to the Leased Property or any portion thereof (including, without limitation, any taxes levied upon the Leased Property or any portion thereof which, if not paid, will become a charge on the rentals and receipts from the Leased Property or any portion thereof, or any interest therein, including the interest of the City), or the rentals and revenues derived therefrom or hereunder. The Authority shall also pay all utility and other charges incurred in the maintenance and upkeep of the Leased Property as they become due. Section 8.04. Provisions Regarding Liability, Property and Worker’s Compensation Insurance . Upon the delivery and acceptance of the Leased Property as provided in this Lease, the Authority shall, at its own expense, cause casualty and property insurance to be carried and maintained with respect to the Leased Property in an amount equal to the maximum insurable value thereof, provided that such coverage need not be in excess of the next succeeding Purchase Option Price. The Authority may, in its discretion, insure the Leased Property under blanket insurance policies which insure not only the Leased Property, but other property as well, as long as such blanket insurance policies otherwise comply with the requirements hereof. Any property damage insurance policy required by this Section 8.04 shall be so written or endorsed as to show the City as loss payee and/or additional insured, and to make losses, if any, payable to the Authority and the City, as their respective interests may appear. 10 4846-0353-6418.7 Upon the execution and delivery of this Lease, the Authority shall, at its own expense, cause public liability insurance, including blanket contractual liability or specific contractual liability insurance for this Lease and public officials’ errors and omissions coverage, to be carried and maintained with respect to the activities to be undertaken by the Authority and its officers, officials, agents and employees in connection with the use and possession of the Leased Property. All such policies (other than errors and omissions) shall show the Authority and all officers and employees thereof, and the City as additional insureds. Such coverage shall be in amounts not less than the limits of liability per occurrence set by the Colorado Governmental Immunity Act as the same may from time to time be amended, to a $5,000,000 annual aggregate, for claims to which the defense of sovereign immunity applies. The public liability insurance required by this Section 8.04 may be by blanket insurance policy or policies. Each property and liability insurance policy provided for in this Section 8.04 shall contain a provision to the effect that the insurance company shall not cancel the policy or modify it materially and adversely to the interests of the City without first giving written notice thereof to the City at least 30 days in advance of such cancellation or modification. In the event that the Authority has received such notice of cancellation or modification, it shall immediately furnish to the City a new insurance policy or certificate evidencing such policy replacing the cancelled or modified policy and effective on or before the effective date of such cancellation or modification. The Authority shall provide certified copies of all insurance policies required under this Section 8.04 or certificates of insurance with appropriate endorsements attached evidencing, that the City has been named as loss payee and/or additional insured and that the thirty-day notice of cancellation provision is in effect. A certificate of insurance will be acceptable evidence of insurance at closing, with the understanding that the Authority shall furnish the policy or endorsements within 45 days after closing. No agent or employee of the Authority shall have the power to adjust or settle any loss with respect to the Leased Property, whether or not covered by insurance, without the prior written consent of the City; except that losses not exceeding $25,000 may be adjusted or settled by the Authority without the City’s consent. Section 8.05. Granting of Easements . As long as no Event of Default shall have happened and be continuing, the City shall at any time or times, but only upon the request of the Authority, grant or join in the granting of easements, licenses, rights-of-way (including the dedication of public highways) and other rights or privileges in the nature of easements with respect to any property or rights included in this Lease, free from this Lease and any security interest or other encumbrance created hereunder or thereunder, and the City shall release or join in the release of existing easements, licenses, rights-of-way, and other rights and privileges with respect to such property or rights, with or without consideration, and shall execute and deliver any instrument necessary or appropriate to confirm and grant or release any such easement, license, right-of-way or other grant or privilege upon receipt of: (a) a copy of the instrument of grant or release; and (b) a written application signed by an Authorized Officer of the Authority requesting such instrument and stating that such grant or release will not impair the effective use or interfere with the operation of the Leased Property. 11 4846-0353-6418.7 ARTICLE IX DAMAGE, DESTRUCTION AND CONDEMNATION; USE OF NET PROCEEDS Section 9.01. Damage, Destruction and Condemnation . If, during the Lease Term (a) the Leased Property or any portion thereof shall be destroyed (in whole or in part), or damaged by fire or other casualty; or (b) title to, or the temporary or permanent use of, the Leased Property or any portion thereof or the estate of the Authority or the City in the Leased Property or any portion thereof shall be taken under the exercise of the power of eminent domain by any governmental body or by any person, firm or corporation acting under governmental authority; or (c) a breach of warranty or a material defect in the construction, manufacture or design of the Leased Property shall become apparent; or (d) title to or the use of all or any portion of the Leased Property shall be lost by reason of a defect in title thereto; then the Authority shall be obligated to continue to pay the amounts specified in Section 6.02 of this Lease. Section 9.02. Obligation of the Authority to Repair and Replace the Leased Property . The Authority and, to the extent such Net Proceeds are within their control, the City, shall cause the Net Proceeds of any insurance policies, performance bonds or condemnation awards to be deposited in a separate trust fund held by the City. Unless the Authority shall elect to apply the Net Proceeds to the Purchase Option Price in the manner contemplated by Section 9.03(b) hereof, all Net Proceeds so deposited shall be applied to the prompt repair, restoration, modification, improvement or replacement of the Leased Property by the Authority upon receipt of requisitions acceptable to the City signed by an Authorized Officer of the Authority stating with respect to each payment to be made; (a) the requisition number; (b) the name and address of the person, firm or corporation to whom payment is due; (c) the amount to be paid; and (d) that each obligation mentioned therein has been properly incurred, is a proper charge against the separate trust fund and has not been the basis of any previous withdrawal and specifying in reasonable detail the nature of the obligation, accompanied by a bill or a statement of account for such obligation. Section 9.03. Insufficiency of Net Proceeds . If the Net Proceeds (plus any amounts withheld from such Net Proceeds by reason of any deductible clause) shall be insufficient to pay in full the cost of any repair, restoration, modification, improvement or replacement of the Leased Property required under Section 9.02 of this Lease, the Authority may elect to: (a)complete the work; or (b)apply the Net Proceeds to the payment of the Purchase Option Price in accordance with Article XI of this Lease. In the event of an insufficiency of the Net Proceeds for such purpose, the Authority shall pay such amounts as may be necessary to equal that portion of the Purchase Option Price which is attributed to the Leased Property for which the Net Proceeds have been received (as certified to the City by the Authority); and in the event the Net Proceeds shall exceed such portion of the Purchase Option Price, such excess shall be retained by the Authority. 12 4846-0353-6418.7 The election permitted by this Section 9.03 shall be made by the Authority within 90 days of the occurrence of an event specified in Section 9.01 of this Lease. Section 9.04. Cooperation of the City . At the expense of the Authority, the City shall cooperate fully with the Authority in filing any proof of loss with respect to any insurance policy or performance bond covering the events described in Section 9.01 of this Lease and in the prosecution or defense of any prospective or pending condemnation proceeding with respect to the Leased Property or any portion thereof and in the enforcement of all warranties relating to the Leased Property. In no event shall the Authority voluntarily settle, or consent to the settlement of, any proceeding arising out of any insurance claim, performance or payment bond claim, prospective or pending condemnation proceeding, or any portion thereof without the written consent of the City. Section 9.05. Condemnation by the Authority . The Authority agrees that, to the extent permitted by law, in the event it brings an eminent domain or condemnation proceeding with respect to all or any portion of the Leased Property, the fair market value of the condemned portion of the Leased Property shall be not less than the Purchase Option Price. ARTICLE X DISCLAIMER OF WARRANTIES; OTHER COVENANTS Section 10.01. Disclaimer of Warranties . THE CITY DOES NOT MAKE ANY WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR FITNESS FOR USE OF THE LEASED PROPERTY OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO THE LEASED PROPERTY. THE AUTHORITY HEREBY ACKNOWLEDGES AND DECLARES THAT THE AUTHORITY IS SOLELY RESPONSIBLE FOR THE USE, CONSTRUCTION, IMPROVEMENT, EQUIPPING, MAINTENANCE AND OPERATION OF THE LEASED PROPERTY, AND THAT THE CITY DOES NOT HAVE ANY RESPONSIBILITY THEREFOR. For the purpose of enabling the Authority to discharge such responsibility, the City constitutes and appoints the Authority as its attorney in fact for the purpose of constructing, improving, equipping, maintaining and operating the Leased Property, and asserting and enforcing, at the sole cost and expense of the Authority, all constructor’s or manufacturer’s warranties and guaranties, express or implied, with respect to the Leased Property, as well as any claims or rights the City may have in respect of the Leased Property against any manufacturer, supplier, contractor or other person. In no event shall the City be liable for any direct or indirect, incidental, special or consequential damage in connection with or arising out of this Lease or the existence, furnishing, functioning or use by the Authority of any item, product or service provided for herein. Section 10.02. Further Assurances and Corrective Instruments . The City and the Authority agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for correcting any inadequate or incorrect description of the 13 4846-0353-6418.7 Leased Property hereby leased or intended so to be, or for otherwise carrying out the intention hereof. Section 10.03. Compliance With Requirements . During the Lease Term, the Authority and the City shall observe and comply promptly to the extent possible with all current and future orders of all courts having jurisdiction over the Leased Property or any portion thereof, provided that the Authority or the City may contest or appeal such orders so long as they are in compliance with such orders during the contest or appeal period, and all current and future requirements of all insurance companies writing policies covering the Leased Property or any portion thereof. Section 10.04. Immunity and Indemnification . In the exercise of the powers of the City by its employees and agents under this Lease, including (without limiting the foregoing) the application of moneys and the investment of funds, the City shall not be accountable to the Authority for any action taken or omitted with respect to this Lease by it or its employees and agents reasonably believed by it or them to be authorized or within the discretion or rights or powers conferred under this Lease. The City and its employees and agents shall be protected in its or their actions taken in reliance upon any paper or documents believed by it or them to be genuine and consistent with their rights or powers under this Lease, and it or they may conclusively rely upon the advice of Counsel and may (but need not) require further evidence of any fact or matter before taking any action. No recourse shall be had by the Authority for any claims based on this Lease against any employee or agent of the City alleging personal liability on the part of such person. To the extent permitted by law, the Authority shall indemnify the City and any of its employees or agents and save them harmless against any liability resulting from acts or omissions of the Authority in connection with any acts taken pursuant to this Lease as it relates to the Authority and the Leased Property. To the extent permitted by law, the Authority shall also indemnify the City and its employees or agents against all claims arising from: (a) the conduct, management, operation or use of, or from any work or thing done on, the Leased Property during the Lease Term; (b) any condition of the Leased Property; and (c) any act of negligence of the Authority or of any of its agents, contractors or employees or any violation of law by the Authority or breach of any covenant or warranty by the Authority hereunder. To the extent permitted by law, the Authority shall indemnify and save the City and its employees and agents harmless from any such claim arising as aforesaid or in connection with any action or proceeding brought thereon and, upon notice from the City or any of its employees or agents, shall defend the City and its employees and agents in any such action or proceeding. Section 10.05. Access To Leased Property . The Authority agrees that the City and its authorized representatives shall have the right at all reasonable times to examine and inspect the Leased Property and all of the Authority’s books and records with respect thereto. The Authority further agrees that the City and any such representative shall have such rights of access to the Leased Property as may be reasonably necessary to cause the proper maintenance of the Leased Property in the event of failure by the Authority to perform its obligations under this Lease. Section 10.06. Environmental Covenant . The Authority shall not store, locate, generate, produce, process, treat, transport, incorporate, discharge, emit, release, deposit or 14 4846-0353-6418.7 dispose of any Hazardous Substance in, upon, under, over or from the Leased Property in violation of any Environmental Regulation, shall not permit any Hazardous Substance to be stored, located, generated, produced, processed, treated, transported, incorporated, discharged, emitted, released, deposited, disposed of or to escape therein, thereupon, thereunder, thereover or therefrom in violation of any Environmental Regulation, shall cause all Hazardous Substances to be properly removed therefrom and properly disposed of in accordance with all applicable Environmental Regulations, shall not install or permit to be installed any underground storage tank therein or thereunder in violation of any Environmental Regulation and shall comply with all other Environmental Regulations which are applicable to the Leased Property. In the event any Hazardous Substance is found upon, under, over or from the Leased Property in violation of any Environmental Regulation or if any lien or claim for lien in favor of any governmental entity or agency as a result of any release of any Hazardous Substance is threatened, the Authority, at its sole cost and expense, shall, within ten days of such finding, deliver written notice thereof to the City and shall promptly remove such Hazardous Substances and prevent the imposition of any liens against the Leased Property for the cleanup of any Hazardous Materials. Such removal shall be conducted and completed in compliance with all applicable federal, state and local laws, regulations, rules, ordinances and policies in accordance with the orders and directives of all federal, state and local governmental authorities. To the extent permitted by law, the Authority further agrees to reimburse the City for any and all claims, demands, judgments, penalties, liabilities, costs, damages and expenses, including court costs and attorneys’ fees directly or indirectly incurred by the City in any action against or involving the City, resulting from any breach of the foregoing covenants or from the discovery of any Hazardous Substance, in, upon, under or over, or emanating from, the Leased Property. ARTICLE XI PURCHASE AND CONVEYANCE OF THE LEASED PROPERTY Section 11.01. Purchase Option . The Authority shall have the option to purchase the interest of the City in the Leased Property and terminate this Lease, but only if it is not then in default under this Lease. The Authority may exercise its option on any date by complying with one of the conditions set forth in Section 11.02. The Authority shall give the City notice of its intention to exercise its option not less than 15 days in advance of the date of exercise. If the Authority shall have given notice to the City of its intention to purchase the Leased Property, but shall not have deposited the amounts with the City on the date specified in such notice, the Authority shall continue to pay Lease Rental Payments as if no such notice had been given. In the event that this Lease is terminated for any reason, and the Authority has not otherwise exercised its purchase option, then the Authority’s option to purchase the interest of the City in the Leased Property shall continue in accordance with the terms of Section 4.02 hereof. Section 11.02. Conveyance of the Leased Property . The City shall transfer and convey the Leased Property to the Authority in the manner provided for in Section 11.03 of this Lease; provided, however, that prior to such transfer and conveyance, either: (a)the Authority shall have paid the then applicable Purchase Option Price; or 15 4846-0353-6418.7 (b)no Event of Default shall have occurred and be continuing, and the Authority shall have paid all Lease Rental Payments set forth in Exhibit B hereto, in which case the City shall transfer and convey the Leased Property to the Authority. The Authority is hereby granted the option to terminate this Lease and to purchase the interest of the City in the Leased Property upon payment by the Authority of the then applicable Purchase Option Price. It is the intent of this Section to provide for and allow the release of the Leased Property shown on Exhibit A subject to this Lease if the Authority has fulfilled all payment obligations with respect hereto and is not then in default hereunder. Section 11.03. Manner of Conveyance . At the closing of any purchase or other conveyance of the Leased Property pursuant to Section 11.02 of this Lease, the City shall execute and deliver to the Authority such releases, bills of sale and other necessary documents assigning, transferring and conveying the Leased Property, as it then exists, subject to the following: (a) Permitted Encumbrances, other than this Lease; (b) all liens, encumbrances and restrictions created or suffered to exist by the City as required or permitted by this Lease or arising as a result of any action taken or omitted to be taken by the City as required or permitted by this Lease; and (c) any lien or encumbrance created by action of the Authority. Section 11.04. Escrowed Deed . In order to facilitate the enforcement by the Authority of the obligation of the City to convey the Leased Property to the Authority under the circumstances provided in Section 11.01 of this Lease, the City shall deposit in escrow with the City Clerk, concurrently with the execution and delivery of this Lease, a deed to the Property satisfactory to the Authority. The City Clerk shall, upon notification by the Authority and the City of the City’s payment of the Purchase Option Price or payment of all Lease Rental Payments as provided in Section 11.01 of this Lease, date and release the deed to the Authority for recording. In the event of any change in description of the Leased Property, the City shall promptly cooperate with the Authority and the City Clerk in appropriately modifying, re executing and redelivering the deed. ARTICLE XII ASSIGNMENT, SUBLEASING AND USE BY AUTHORITY This Lease may not be assigned by the Authority for any reason other than to a successor by operation of law. However, the Leased Property may be subleased to any other person or entity, as a whole or in part, by the Authority, subject, however, to each of the following conditions: (a)this Lease, and the obligations of the Authority hereunder, shall, at all times during the Lease Term remain obligations of the Authority subject to Section 6.01 of this Lease, and the Authority shall maintain its obligations to the City, notwithstanding any sublease; (b)the Authority shall furnish or cause to be furnished to the City a copy of any sublease agreement; 16 4846-0353-6418.7 (c)no sublease by the Authority shall violate the Constitution or laws of the State, CEDC Resolution No. 1 or the Cooperation Agreement; and (d)the Authority shall have obtained the prior written consent of the City to any such sublease. ARTICLE XIII EVENTS OF DEFAULT AND REMEDIES Section 13.01. Events of Default Defined . Any one of the following shall be an “Event of Default” under this Lease: (a)failure by the Authority to pay any Lease Rental Payments during the Lease Term within five days after the same become due; (b)failure by the Authority to observe and perform any covenant, condition or agreement on its part to be observed or performed hereunder for a period of 30 days after written notice, specifying such failure and requesting that it be remedied shall be given to the Authority by the City, unless the City shall agree in writing to an extension of such time prior to its expiration; provided, however, that if the failure stated in the notice cannot be corrected within the applicable period, the City shall not deny, delay, condition, or withhold its consent to an extension of such time if corrective action is instituted by the Authority within the applicable period and diligently pursued until the default is corrected. Such consent by the City shall not be unreasonably withheld; or (c)the Authority (i) files a petition or application seeking reorganization, arrangement under federal bankruptcy law, or other debtor relief under the laws of the State or (ii) is the subject of such a petition or application which is not contested by the Authority, or otherwise dismissed or discharged, within 30 days. If, by reason of Force Majeure, the Authority shall be unable in whole or in part to carry out any agreement on its part herein contained, other than the obligations on the part of the Authority contained in Article VI of this Lease, the Authority shall not be deemed in default during the continuance of such inability. The Authority agrees, however, to remedy, as promptly as legally and reasonably possible, the cause or causes preventing the Authority from carrying out its agreement; provided that the settlement of strikes, lockouts and other industrial disturbances shall be entirely within the discretion of the Authority. Section 13.02. Remedies on Default . Whenever any Event of Default referred to in Section 13.01 of this Lease shall have happened and be continuing, the City shall, without any further demand or notice, take one or any combination of the following remedial steps: (a)The City may terminate the Lease Term and give notice to the Authority to vacate and surrender possession of the Leased Property within ten Business Days of such notice. 17 4846-0353-6418.7 (b)The City may proceed to foreclose through the courts on or otherwise sell, trade-in, repossess or liquidate the Authority’s interest in the Leased Property, or any part thereof in any lawful manner; provided, however, that the City may not recover from the Authority any deficiency which may exist following the liquidation of the Authority’s interest in the Leased Property in excess of Lease Rental Payments for the then current Fiscal Year. (c)The City may lease or sublease the Leased Property or any portion thereof or sell any interest the City has in the Leased Property. (d)The City may take whatever action at law or in equity may appear necessary or desirable to enforce its rights in and to the Leased Property under this Lease. Section 13.03. Limitations on Remedies . A judgment requiring a payment of money may be entered against the Authority by reason of an Event of Default only as to the Authority’s obligation to pay any unpaid Lease Rental Payments or other amounts due and payable under this Lease at the time of judgment. Section 13.04. No Remedy Exclusive . Subject to Section 13.03 hereof, no remedy herein conferred upon or reserved to the City is intended to be exclusive, and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the City to exercise any remedy reserved in this Article XIII, it shall not be necessary to give any notice, other than such notice as may be required in this Article XIV. Section 13.05. Waivers . The City may waive any Event of Default under this Lease and its consequences. In the event that any agreement contained herein should be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach hereunder. Section 13.06. Agreement to Pay Attorneys’ Fees and Expenses . To the extent permitted by law, in the event that either party hereto shall default under any of the provisions hereof and the nondefaulting party shall employ attorneys or incur other expenses for the collection of Lease Rental Payments, or the enforcement of performance or observance of any obligation or agreement on the part of the defaulting party herein contained, the defaulting party agrees that it shall on demand therefor pay to the nondefaulting party the fees of such attorneys and such other expenses so incurred by the nondefaulting party, to the extent that such attorneys’ fees and expenses may be determined to be reasonable by a court of competent jurisdiction. ARTICLE XIV CONSTRUCTION OF THE FINANCED PROJECT Section 14.01. Agreement to Construct the Financed Project . The Financed Project shall be acquired, constructed and installed by the Authority as provided in this Article XIV. 18 4846-0353-6418.7 At the time of the execution and delivery of this Lease, the Authority has executed and delivered the Deed conveying the Leased Property to the City. The Authority hereby agrees that it will abide by the terms of the Cooperation Agreement in making all contracts, orders, receipts, writings and instructions, including all Project Contracts, with any persons, firms or corporations and in general do all things that may be necessary, requisite or proper for the construction of the Financed Project. The Authority agrees to comply with all applicable federal, State and local law in connection with the making of contracts for the Financed Project. All Project Contracts shall be fully and freely assignable to the City. Notwithstanding anything to the contrary contained in this Lease, all Project Documents shall be made and approved in accordance with the Cooperation Agreement. The Authority hereby further agrees: (a)The Authority, acting on behalf of the City, shall cause the Financed Project to be completed as herein provided; (b)Title to the Financed Property shall be in the name of the City, subject to this Lease; (c)The Authority, acting on behalf of the City, agrees to complete the Financed Project with all reasonable dispatch, and to use its best efforts to have the Financed Project completed by ______ __, 20__. So long as this Lease is in full force and effect and no Event of Default shall have occurred, the Authority shall have full power to carry out the acts and agreements provided in this Section 14.01, and such power is granted and conferred under this Lease to the Authority, and is accepted by the Authority and shall not be terminated or restricted by act of the City or the Authority, except as provided in this Section 14.01. The Authority agrees to construct the Financed Project in accordance with the plans and specifications prepared by the Authority and approved by a five-member committee (the “Oversight Committee”) composed of representatives from the City, the Authority and the Historic Arkansas River Project (“HARP”) as well as any change orders made in accordance with the Cooperation Agreement (which plans and specifications, as modified by such changes orders, are referred to as the “Plans and Specifications”) pursuant to this Article XIV through the application of moneys to be disbursed by the City pursuant to the Cooperation Agreement, as amended, and Section 14.02 hereof. If for any reason the Financed Project is not completed by the date of Final Completion, there shall be no resulting liability on the part of the Authority or the City, or an Event of Default hereunder. However, in the event that the City Clerk shall not receive the Certificate of Completion evidencing that the Financed Project has been completed, as required in Section 14.03 of this Lease, on or before the date of Final Completion, the City shall, upon 30 days written notice to the Authority, be authorized, but not required, to complete the remainder of any of the Financed Project from any moneys remaining in the Project Account. Section 14.02. Project Account; Disbursements for Eligible Costs of the Financed Project . The City shall concurrently with the execution and delivery of this Lease, create and establish a special account (the “Project Account”), which account may be a subaccount of the 19 4846-0353-6418.7 City’s 1992-2016 Sales and Use Tax Capital Improvement Project Account. The Project Account shall be maintained by the City in accordance with the provisions of this Article XIV. The City shall deposit into the Project Account an amount equal to $14,400,000. The City shall disburse funds from the Project Account to pay Eligible Costs in accordance with the cost certification and payment procedures set forth in the Cooperation Agreement and subject to the supervision and oversight of a five-member committee (the “Oversight Committee”) composed of representatives from the City, the Authority and the Historic Arkansas River Project (“HARP”); provided, however, that no application for payment of Eligible Costs shall be considered by the Oversight Committee unless and until it has been reviewed and approved by a construction committee (the “Construction Committee”) composed of the Authority’s construction manager and two appointees each from the Authority, HARP, and the City. If an Event of Default shall occur prior to the Final Completion of the Financed Project, any moneys held in the Project Account may be utilized by the City to complete, repair or modify the Financed Project or may be disbursed for the payment of such charges as the City may determine. The City shall (a) keep and maintain adequate records pertaining to the accounts in the Project Account, and (b) make all disbursements from the Project Account in accordance with the cost certification and payment procedures set forth in the Cooperation Agreement. Section 14.03. Completion of the Financed Project . Upon the Final Completion of the Financed Project and the acceptance thereof by the Authority, on behalf of the City (which acceptance shall not be unreasonably withheld), the Authority shall deliver to the City Clerk a Certificate of Completion. In the event that, after the delivery of the Certificate of Completion, there remains in the Project Account any unreserved balance, such balance shall be paid to the City and used, as directed by the Authority, to pay Lease Rental Payments. Section 14.04. Project Contracts . The Authority represents that, based upon an examination of property, estimated construction and acquisition costs and the configuration of the Financed Project, the Financed Project can, to the best of the Authority’s present knowledge, be constructed and acquired for a total cost within the amount of funds to be available in the Project Account, together with other legally available funds and anticipated investment income. In the event that the cost of the Financed Project exceeds such amounts, either (a) the Authority shall make such modifications to the plans and specifications for the Financed Project as will permit the Financed Project to be acquired and constructed from the amounts available therefor or (b) the Authority shall pay such excess costs. If the Authority pays any such excess costs, it shall not be entitled to any reimbursement therefor from the City, nor shall it be entitled to any diminution in or postponement of the Lease Rental Payments. Upon the occurrence of an Event of Default, the City may complete the Financed Project utilizing any moneys available therefor. All Project Contracts shall provide that, upon a termination of the Lease Term by reason of the occurrence of an Event of Default or upon the City’s assuming control over completion of the Financed Project as provided in Section 14.01 of this Lease, and upon written notice by the City to the party or parties to the Project Contracts that 20 4846-0353-6418.7 any of such events has occurred: (a) such contracts shall be fully and freely assignable to the City without the consent of any other person and the City may choose to assume or not assume such contracts; and (b) if the City does so assume such contracts, the other party or parties thereto shall perform the agreements contained therein for the City. All Project Contracts shall also provide that, upon an Event of Nonappropriation or an Event of Default and upon written notice from the City, the City may, in its full discretion, terminate some or all of such Project Contracts; and the other party or parties thereto shall then be entitled to payment only from amounts available therefor in the Project Account and only for work done prior to such termination. Upon the occurrence of an Event of Default or upon the City’s assuming control over the implementation and completion of the Financed Project as provided in Section 14.02 hereof, and upon receipt of a written request from the City, the Authority shall assign all of its right, title, and interest in and to any or all Project Contracts to the City and shall deliver all Project Documents held by it to the City. Section 14.05. Project Documents . The Authority shall furnish to the City, but the City shall have no duty to review, copies of the Project Documents as soon after the commencement of the Lease Term as such Project Documents shall become available to the Authority and from time to time thereafter. Neither the Project Documents nor any change or amendment thereto shall (a) cause the Financed Project to be used for any purpose prohibited hereby or by the Constitution or laws of the State; (b) result in a material reduction in the value of the Financed Project (except as provided in Section 14.04 hereof); or (c) adversely affect the ability of the Authority to meet its obligations hereunder. Section 14.06. Defaults Under Project Contracts . In the event of any material default by a contractor under a Project Contract, or in the event of a material breach of warranty with respect to any materials, workmanship, or performance, the Authority shall promptly proceed, either separately or in conjunction with others, to pursue diligently its remedies against such contractor and/or against each surety of any bond securing the performance of such Project Contract. The Net Proceeds of any amounts recovered by way of damages, liquidated damages, refunds, adjustments, or otherwise in connection with the foregoing, remaining after deduction of expenses incurred in such recovery (including without limitation, attorneys’ fees and costs) shall be retained by the Authority and applied to construction costs of the Financed Project. Section 14.07. Performance and Payment Bonds . The contractor under any Project Contract for construction shall be required to furnish a performance and labor and material payment bond on forms acceptable to the Authority, copies of which shall be provided to the City, but which the City shall have no duty to review. Such bonds shall be made payable to the Authority and the City as their interests may appear, and shall be executed by a corporate surety licensed to transact business in the State and shall be in an amount at least equal to the contract price for such Project Contract, provided the bond amount does not exceed said surety’s authorized capacity. If at any time during the construction of any of the Financed Project the surety on such bond shall be disqualified from doing business within the State, an alternate surety meeting the requirements set forth above and acceptable to the Authority shall be selected. In the event of any change order resulting in the performance of additional work in connection with the Financed Project, the amounts of such bonds shall be increased by an amount at least equal to the cost of such additional work or materials or fixtures to be incorporated in the Financed Project. 21 4846-0353-6418.7 Section 14.08. Commercial General Liability Insurance; Business Automobile Liability Insurance . Each contractor entering into a Project Contract shall be required to procure and maintain at all times during the term of the Project Contract a business automobile liability and a commercial general liability insurance policy in a form and by a company acceptable to and approved by the Authority covering all operations hereunder, including the following minimum amounts: (a)Business automobile liability and property damage insurance in an amount of $1,000,000 Combined Single Limit with coverage at least as broad as Insurance Services Office form CA0001 (12/93), and covering all on-site and off-site automobile operations associated with the Project Contract. If any vehicle is used to transport hazardous cargo, CA9948 or its equivalent, Broadened Coverage Endorsement, must be maintained; and (b)Commercial general liability insurance in the amount of $1,000,000 per occurrence, $2,000,000 aggregate, exclusive to the Financed Project as per ISO form CG2503 or its equivalent as noted by reference on the Certificate of Insurance with coverage at least as broad as Insurance Services Office standard form CG0001 (1/96). Commercial general liability coverage shall include the Authority and the City as additional insureds with coverage at least as broad as Insurance Services Office form CG2026, with primary coverage as respects the Authority and the City. Such commercial general liability coverage shall be in the form of not less than $2,000,000 general liability insurance and not less than $5,000,000 umbrella coverage per claim and aggregate with a deductible of no more than $50,000 per claim which will be the responsibility of the contractor entering into a Project Contract. Section 8.04 of this Lease sets forth the obligations of the Authority to maintain certain insurance in respect of the Leased Property in the amounts and under the circumstances described therein. Section 14.09. Builder’s Risk Insurance . The Authority shall provide or cause each contractor entering into a Project Contract for the Financed Project to procure and maintain, at its own cost and expense, during the term of the applicable Project Contract and until the Financed Project is accepted and insured by the Authority, Builder’s Risk, Marine Form, Agreed Value, Testing exclusion deleted, Flood and Surface Water exclusion deleted, Difference In Condition coverage, completed value insurance upon the Financed Project to be improved, in whole or in part, by such contractor. The policy may have a deductible clause in an amount not to exceed $50,000 per claim. A certified copy of such insurance policy with appropriate endorsements attached shall be provided by the Authority to the City prior to commencement of construction of the Financed Project. Such insurance coverage shall be in an amount at least equal to the total contract price for such contractor’s work. In the event of any change order resulting in the performance of additional work, the amount of such insurance shall be increased to include the cost of such additional work, as well as related materials and fixtures. Such builder’s risk completed value insurance policy shall list as a named insured the contractor under any Project Contract all subcontractors, the Authority and the City as their respective interests may appear. No agent or employee of the Authority shall have the power to adjust or settle any loss with 22 4846-0353-6418.7 respect to the Financed Project without the prior written consent of the City, except that losses not exceeding $5,000 may be adjusted or settled by the Authority without the City’s consent. Section 8.04 of this Lease sets forth the obligations of the Authority to maintain certain insurance in respect of the Leased Property in the amounts and under the circumstances described therein. Section 14.10. Worker’s Compensation Insurance . Each contractor entering into a Project Contract shall be required to procure and maintain, at its own cost and expense, worker’s compensation insurance as required in the State during the term of its Project Contract, covering its employees working thereunder, which coverage shall comply with statutory limits and include $500,000 Employer’s Liability. Such insurance, if issued by a private carrier, shall contain a provision that such coverage shall not be canceled without at least 45 days prior written notice ten days prior written notice for nonpayment of premiums) to the City and the City. A certificate issued by the worker’s compensation carrier evidencing such coverage shall be provided by the Authority to the City with respect to such contractor. Each Project Contract shall also provide that each subcontractor of any contractor who is a party to such Project Contract shall be required to furnish similar worker’s compensation insurance. The Authority shall provide or cause all insurance coverages contained herein to provide for Waiver of Subrogation and Rights of Recovery against the City, its officers, officials and employees, as their interests may appear. The minimum insurance requirements for each of the coverages required herein shall be set forth in a Certificate of Insurance to be delivered by the Authority on the date this Lease is executed and delivered by the Authority. All contractors entering into a Project Contract shall cause to be executed an original of the certificate of insurance form, specifying on the certificate the issuing company or companies, policy numbers and policy periods, for each required coverage. An original of the form certificate shall be executed by an authorized party before a notary in accordance with the terms of the certificate. One original of the completed and fully executed certificate shall be submitted, for approval by the Authority to the City prior to the execution of the Project Contract. Each contractor entering into a Project Contract shall furnish a separate certificate on the form certificate provided for each subcontractor or subconsultant. All coverages for subcontractors or subconsultants shall be subject to all of the requirements set forth herein and in the form certificate and each subcontractor or subconsultant shall comply with all of the coverage requirements. Each such policy and certificate shall contain valid provisions or endorsements stating “This policy will not be cancelled or materially changed or altered without first giving forty-five (45) days prior written notice thereof (ten (10) days for nonpayment of premium) to the City of Pueblo, Colorado, One City Hall Place, Pueblo, Colorado 81003, Attention: President of the City Council, sent by “certified mail, return receipt requested” and “Any coverage afforded the Pueblo Urban Renewal Authority as additional insured shall apply as primary insurance and any other insurance issued to the City shall apply as excess and non-contributing insurance”. 23 4846-0353-6418.7 All private insurers providing insurance under this Lease shall be rated A IX or better by A.M. Best. The Net Proceeds of any performance or payment bond or insurance policy required by Sections 14.08 and 14.10 of this Lease, and any Net Proceeds received as a consequence of default under a Project Contract as provided by Section14.07 of this Lease, shall be paid to the City and deposited in the Project Account. ARTICLE XV MISCELLANEOUS Section 15.01. Sovereign Powers of Authority . Nothing in this Lease shall be construed as diminishing, delegating, or otherwise restricting any of the sovereign powers of the Authority. Nothing in this Lease shall be construed to require the Authority to occupy and operate the Leased Property other than as lessee, or to require the Authority to exercise its right to purchase the Leased Property as provided in Article XI hereof. Section 15.02. Notices . All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed given when delivered or mailed by certified or registered mail, postage prepaid, addressed as follows: if to the Pueblo Urban Renewal Authority, 115 E. Riverwalk, Suite 410, Pueblo, Colorado, 81003, Attention: Executive Director; if to the City of Pueblo, Colorado, One City Hall Place, Pueblo, Colorado 81003, Attention: President of the City Council, with a copy to the City Attorney. The Authority and the City may, by written notice, designate any further or different addresses to which subsequent notices, certificates or other communications shall be sent. Section 15.03. Binding Effect . This Lease shall inure to the benefit of and shall be binding upon the City and the Authority and their respective successors and assigns, subject, however, to the limitations contained in Article XII and Section 15.05 of this Lease. Section 15.04. Amendments, Changes and Modifications . Except as otherwise provided in this Lease, this Lease may not be effectively amended, changed, modified or altered without the written consent of the parties hereto. Section 15.05. No Assignment by City . The City agrees that it shall not assign or transfer this Lease or any interest herein. Section 15.06. Net Lease . This Lease shall be deemed and construed to be a “triple net lease,” and the Authority shall, subject to Section 6.01 hereof, pay absolutely net during the Lease Term, the Lease Rental Payments and all other payments required hereunder, free of any deductions, and without abatement, deduction or setoff (other than credits against the Lease Rental Payments expressly provided for in this Lease). Section 15.07. Payments Due on Holidays . If the date for making any payment or the last day for performance of any act or the exercising of any right, as provided in this Lease, shall be a day other than a Business Day, such payment may be made or act performed or right 24 4846-0353-6418.7 exercised on the next succeeding Business Day, with the same force and effect as if done on the nominal date provided in this Lease. Section 15.08. Severability . In the event that any provision of this Lease, other than the requirement of the Authority to pay Lease Rental Payments in accordance with Section 6.01 and the requirement of the City to provide quiet enjoyment of the Leased Property and to convey the Leased Property to the Authority under the conditions set forth in Article XI of this Lease, shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. Section 15.09. Execution in Counterparts . This Lease may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Section 15.10. Applicable Law . This Lease shall be governed by and construed in accordance with the laws of the State, without regard to conflict of laws principles. Section 15.11. Captions . The captions or headings herein are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Lease. \[Signature Page to Lease Purchase Agreement follows\] 25 4846-0353-6418.7 WITNESS the due execution hereof as of the day and year first mentioned above. CITY OF PUEBLO, COLORADO , as Lessor By President of the City Council Attest: City Clerk PUEBLO URBAN RENEWAL AUTHORITY , as Lessee By Chairman Attest: Secretary to the Board 4846-0353-6418.7 \[Signature Page to Lease Purchase Agreement\] 4846-0353-6418.7 STATE OF COLORADO ) ) ss. CITY OF PUEBLO ) This instrument was acknowledged before me this ____ day of ________, 2015, by Steve Nawrocki, as President of the City Council of the City of Pueblo, Colorado, and by Gina Dutcher, as Clerk of said City. Witness my hand and official seal. \[SEAL\] Notary Public My Commission Expires: 4846-0353-6418.7 STATE OF COLORADO ) ) ss. CITY OF PUEBLO ) This instrument was acknowledged before me this ____ day of ________, 2015, by Elizabeth Gladney, as Chairman of the Pueblo Urban Renewal Authority, and by John Batey, as Secretary to the Board of the Pueblo Urban Renewal Authority. Witness my hand and official seal. \[SEAL\] Notary Public for the State of Colorado My Commission Expires: 4846-0353-6418.7 EXHIBIT A DESCRIPTION OF LEASED PROPERTY A-1 4846-0353-6418.7 EXHIBIT B LEASE RENTAL PAYMENT SCHEDULE Total Lease PrincipalInterest Remaining DateRental Payment ComponentComponentLease Balance $14,400,000 6/1/2016 $ 13,511 $ - $ 13,511 12/1/2016 686,489 612,817 73,672 13,787,183 6/1/2017 117,283 117,283 12/1/2017 782,717 644,845 137,872 13,142,338 6/1/2018 131,423 131,423 12/1/2018 868,577 737,153 131,423 12,405,185 6/1/2019 124,052 124,052 12/1/2019 875,948 751,896 124,052 11,653,289 6/1/2020 116,533 116,533 12/1/2020 1,683,467 1,566,934 116,533 10,086,355 6/1/2021 151,295 151,295 12/1/2021 1,648,705 1,497,409 151,295 8,588,946 6/1/2022 128,834 128,834 12/1/2022 1,671,166 1,542,332 128,834 7,046,614 6/1/2023 105,699 105,699 12/1/2023 1,894,301 1,788,602 105,699 5,258,012 6/1/2024 78,870 78,870 12/1/2024 1,921,130 1,842,260 78,870 3,415,753 6/1/2025 51,236 51,236 * 12/1/2025 $1,948,764 $1,897,527 $ 51,236 $1,518,225 ___________________ * Represents the Purchase Option Price on 12/1/2025. After such date, the Purchase Option Price shall be such amount plus the interest component of Lease Rental Payments accrued through the date of any subsequent exercise of the Purchase Option. B-1 4846-0353-6418.7