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HomeMy WebLinkAbout06022As Amended 10/23/95 ORDINANCE NO. c AN ORDINANCE CONCERNING THE FINANCING OF THE ACQUISITION, CONSTRUCTION AND EQUIPPING OF A PARIONG FACILITY AND THE AUTHORIZATION AND APPROVAL OF A GROUND LEASE AGREEMENT, A LEASE PURCHASE AND SUBLEASE AGREEMENT, A MORTGAGE AND INDENTURE -OF TRUST, A CERTIFICATE PURCHASE AGREEMENT, AN OFFICIAL STATEMENT AND OTHER RELATED DOCUMENTS AND ACTIONS IN CONNECTION WITH THE ISSUANCE OF CERTAIN CERTIFICATES OF PARTICIPATION IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $1,220,000. WHEREAS, the City of Pueblo, Colorado (the "City ") has been duly organized and is validly existing as a home rule city under the Colorado Constitution and the home rule charter of the City (the "Charter "); and WHEREAS, the City Council of the City (the "City Council ") has previously authorized and directed the creation of the City of Pueblo, Colorado Municipal Building Corporation (the" Corporation"), a nonprofit corporation and an instrumentality of the City for certain limited purposes, under the provisions of the Colorado Nonprofit Corporation Act, articles 20 through 29 of title 7, Colorado Revised Statutes (the "Act "); and WHEREAS, pursuant to the Charter and part 8 of article 15 of title 31, Colorado Revised Statutes, the City is authorized to enter into one or more leases or lease- purchase agreements for land, buildings, equipment and other property for governmental or proprietary purposes; and WHEREAS, the City Council hereby determines that the City is in need of the parking facility more fully described in the lease purchase and sublease agreement referred to hereinbelow (the" Project") and that it is necessary and in the best interests of the City and its residents that the Project be acquired, constructed and equipped on a certain parcel of land more fully described in the ground lease agreement referred to hereinbelow (the "Land "), which Land is presently owned by the City; and WHEREAS, for purposes of financing the acquisition, construction and equipping of the Project, the City Council has received approval of a grant (the "EDA Grant ") from Economic Development Administration of the United States Department of Commerce authorized by the Public Works and Development Act of 1965, and therefore has determined, and hereby determines, that it is in the best interests of the City and its residents (a) that the City lease the Land and the portion of the Project to be financed with the proceeds of the EDA Grant to the Corporation pursuant to that certain Ground Lease Agreement (the "Ground Lease ") between 02/66590.6 the City and the Corporation, presented to this meeting of the City Council, and (b) that the City lease the remainder of the Project and sublease the Land and the portion of the Project to be financed with the proceeds of the EDA Grant from the Corporation pursuant to that certain annually renewable Lease Purchase and Sublease Agreement (the "Lease ") between the City and the Corporation, presented to this meeting of the City Council; and WHEREAS, there has also been presented to this meeting of the City Council (a) a certain Mortgage and Indenture of Trust (the "Indenture") between the Corporation and a corporate trustee to be selected by the City and the Corporation (the "Trustee "), (b) the form of Certificates of Participation (the "Certificates ") to be issued pursuant to the Indenture and the Lease, (c) a Certificate Purchase Agreement (the "Certificate Purchase Agreement "), pursuant to which the Certificates shall be sold by the City to Lewis, De Rozario & Co. Incorporated (the "Underwriter "), and (d) the form of an Official Statement (the "Official Statement "), a preliminary draft of which will be distributed to potential investors in connection with the offering of the Certificates and a final draft of which will be executed and distributed in connection with the sale of the Certificates; and WHEREAS, pursuant to certain provisions of the Lease and the Indenture, the Corporation will deposit in escrow with the Trustee a deed and bill of sale for the Project from the Corporation to the City (collectively, the "escrow deed "); and WHEREAS, the City Council is desirous of authorizing, approving and directing the execution and delivery of the Ground Lease, the Lease and the Certificate Purchase Agreement, by the City and the execution and delivery of the Ground Lease, the Lease, the Indenture and the Certificate Purchase Agreement by the Corporation, all in substantially the forms presented to of the City Council, and is further desirous of authorizing and approving the issuance of the Certificates pursuant to the Indenture, ratifying the distribution of the preliminary Private Placement Memorandum, authorizing and approving the distribution of the final Official Statement, and authorizing and approving the transactions contemplated thereby. NOW, THEREF BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO: Section 1. Ratification of Prior Actions. All actions heretofore taken (not inconsistent with the provisions of this Ordinance) by (a) the City Council or the officers or employees of the City, or (b) the Board of Directors of the Corporation (the 'Board ") or the officers or employees of the Corporation, which actions have been directed toward the financing of the acquisition, construction and equipping of the Project, the leasing of the Land and the portion of the Project to be financed with the proceeds of the EDA Grant by the City to the Corporation, or the leasing of the remainder of the Project and subleasing of the Land and the portion of the Project to be financed with the proceeds of the EDA Grant by the Corporation to the City, are hereby ratified, approved and confirmed. The City Council hereby specifically ratifies, approves and confirms the distribution by the Underwriter of the preliminary Private Placement Memorandum to prospective purchasers of the Certificates. 02/66590.6 Section 2. Funding and Determination. The City Council hereby finds and determines, pursuant to the provisions of the Charter, that (a) constructing, acquiring, improving and equipping the Project, (b) leasing the Land and the portion of the Project to be financed with the proceeds of the EDA Grant to the Corporation, and (c) leasing the remainder of the Project and subleasing of the Land and the portion of the Project to be financed with the proceeds of the EDA Grant from the Corporation, all under the terms and provisions set forth in the Ground Lease and the Lease, are necessary, convenient and in furtherance of the governmental purposes of the City and are in the best interests of the City; and the City Council hereby authorizes the construction, acquisition, improving and equipping of the Project, and such leasing and subleasing of the Land the Project under the terms and provisions of the Lease. Section 3. Execution and Delivery of the Ground Lease by the City. The Ground Lease, in substantially the form presented to this meeting of the City Council and with substantially the same content, is 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 Ground Lease 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 form and content of the Ground Lease presented to this meeting. Section 4. Execution and Delivery of the Lease by the City. The Lease, in substantially the form presented to this meeting of the City Council and with substantially the same content, is 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 Lease 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 form and content of the Lease presented to this meeting. Section 5. Execution and Delivery of the Certificate Purchase Agreement by the City. The Certificate Purchase Agreement, in substantially the form presented to this meeting of the City Council and with substantially the same content, is 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 Certificate Purchase Agreement 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 02/66590.6 3 of any and all changes, modifications, additions or deletions therein from the form and content of the Certificate Purchase Agreement presented to this meeting. Section 6. Execution and Delivery of the Ground Lease by the Corporation. The City Council hereby approves the execution and delivery by the Corporation of the Ground Lease, in substantially the form and with substantially the same content as presented to this meeting of the City Council, but with such changes, modifications, additions or deletions therein as the Board 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 form and content of the Ground Lease presented to this meeting. Section 7. Execution and Delivery of the Lease by the Corporation. The City Council hereby approves the execution and delivery by the Corporation of the Lease, in substantially the form and with substantially the same content as presented to this meeting of the City Council, but with such changes, modifications, additions or deletions therein as the Board 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 form and content of the Lease presented to this meeting. Section 8. Execution and Delivery of the Indenture by the Corporation. The City Council hereby approves the execution and delivery by the Corporation of the Indenture, in substantially the form and with substantially the same content as presented to this meeting of the City Council, but with such changes, modifications, additions or deletions therein as the Board 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 form and content of the Indenture presented to this meeting. Section 9. Execution and Delivery of the Certificate Purchase Agreement by the Corporation. The City Council hereby approves the execution and delivery by the Corporation of the Certificate Purchase Agreement, in substantially the form and with substantially the same content as presented to this meeting of the City Council, but with such changes, modifications, additions or deletions therein as the Board 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 form and content of the Certificate Purchase Agreement presented to this meeting. Section 10. Assignment to the Trustee. The City Council hereby acknowledges and consents to (a) the assignment by the Corporation to the Trustee, pursuant to the Indenture, of the Trust Estate (as such term is defined in the Indenture) including, without limitation, all rights, title and interest of Corporation in, to and under the Lease (with certain exceptions as provided in the Lease and the Indenture) and the Ground Lease, and (b) the delegation by the Corporation to the Trustee, pursuant to the Indenture, of all duties of the Corporation under the Lease and the Ground Lease. 02/66590.6 4 Section 11. Issuance of the Certificates. The issuance of the Certificates, pursuant to the Indenture, in an aggregate principal amount not to exceed $1,220,000 is, in all respects, hereby approved by the City. The Certificates shall be issued solely as fully registered certificates without coupons in the denominations of $5,000 plus integral multiples of thereof. The Certificates shall bear interest payable semiannually on January 1 and July 1 of each year, commencing July 1, 1996, at the rates and will mature in the amounts and on the dates to be set forth in the Indenture upon approval by the Corporation. The net effective interest rate of the Certificates shall not exceed 8.0%. The Certificates shall be subject to redemption prior to their maturity, including mandatory sinking fund redemption, in the manner, on the dates and at the prices set forth in the Indenture. The City Council hereby authorizes and approves the form, and the further terms and provisions of, the Certificates contained in the Indenture, in substantially the form and with substantially the same content as that presented to this meeting of the City Council. The City Clerk and the President of the City Council of the City are hereby authorized and directed to affix their facsimile signatures and the City seal, or a facsimile thereof, to authenticate the Certificates, as provided in the Lease and the Indenture. Section 12. Sale of the Certificates. The City Council hereby authorizes, approves and directs the sale of the Certificates to the Underwriter under the terms and conditions of, and for the price set forth in, the Certificate Purchase Agreement. Section 13. Official Statement. The President or Vice President of the City Council is hereby authorized and directed to affix his or her signature to the final Official Statement, for and on behalf of the City, in basically the form and with basically the content as the Official Statement presented to this meeting of the City Council, but with such changes, modifications, additions or deletions therein as the President or Vice President of the City Council and the City Attorney may deem necessary or appropriate, the execution thereof to constitute conclusive evidence of their approval of such changes, modifications, additions or deletions therein from the form presented to this meeting. The distribution by the Underwriter of the final Official Statement to prospective purchasers of the Certificates is hereby approved. Section 14. Attestation by the City Clerk and Other Actions in Furtherance of the Contemplated Transactions. 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 Ground Lease and the Lease 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 cant' 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. The execution and delivery, by the Corporation, of any and all additional certificates, documents and other papers and the performance of all other acts necessary or appropriate in order to implement and carry out the 02166590.6 5 transactions and other matters authorized and contemplated by this Ordinance is hereby approved and authorized by the City. Section 15. No General Obligation of the City Created. NO PROVISION OF THIS ORDINANCE, THE GROUND LEASE, THE LEASE, THE INDENTURE, THE CERTIFICATES, THE CERTIFICATE PURCHASE AGREEMENT OR THE OFFICIAL STATEMENT SHALL BE CONSTRUED AS CREATING OR CONSTITUTING A GENERAL OBLIGATION OR OTHER INDEBTEDNESS OF THE CITY OR A MANDATORY PAYMENT OBLIGATION OF THE CITY IN ANY FISCAL YEAR BEYOND A FISCAL YEAR FOR WHICH THE CITY HAS APPROPRIATED AMOUNTS TO MAKE PAYMENTS UNDER THE LEASE. THE CITY SHALL HAVE NO OBLIGATION TO MAKE ANY PAYMENT WITH RESPECT TO THE CERTIFICATES EXCEPT IN CONNECTION WITH THE PAYMENT OF THE BASE RENTALS AND ADDITIONAL RENTALS (AS DEFINED IN THE LEASE) AND CERTAIN OTHER PAYMENTS UNDER THE LEASE, WHICH PAYMENTS MAY BE TERMINATED BY THE CITY IN ACCORDANCE WITH THE PROVISIONS OF THE LEASE. IN ADDITION, NO PROVISION OF THIS ORDINANCE, THE GROUND LEASE, THE LEASE, THE INDENTURE, THE CERTIFICATES, THE CERTIFICATE PURCHASE AGREEMENT OR THE OFFICIAL STATEMENT SHALL BE CONSTRUED TO PLEDGE OR TO CREATE A LIEN ON ANY CLASS OR SOURCE OF CITY MONEYS; HOWEVER, THE CITY CURRENTLY ANTICIPATES THAT THE REVENUES GENERATED BY THE PROJECT SHALL BE THE FIRST SOURCE OF REVENUES USED TO PAY BASE RENTALS, SUBJECT TO APPROPRIATION. Section 16. Determination of Rental Value and Purchase Option Price Under the Lease. The City Council hereby determines and declares that the Base Rentals represent the fair value of the use of the Project; and that the Purchase Option Price (as defined in the Lease) represents the fair purchase price of the Project. The City Council hereby determines and declares that the Base Rentals do not exceed a reasonable amount so as to place the City under an economic or practical compulsion to renew the Lease or to exercise its option to purchase the Project pursuant to the Lease. In making such determinations, the City Council has given consideration to the cost of constructing the Project, the uses and purposes for which the Project will be employed by the City, the benefit to the citizens and residents of the City by reason of the acquisition of the Project and the use of the Project pursuant to the terms and provisions of the Lease, the option of the City to purchase the Project, and the expected eventual vesting of title to the Project in the City. The City Council hereby determines and declares that the acquisition, construction and equipping of the Project and the leasing of the Project pursuant to the Lease will result in facilities of comparable quality and meeting the same requirements and standards as would be necessary if the acquisition, construction and equipping of the Project were performed by the City other than pursuant to the Lease. The City Council hereby determines and declares that the period during which the City has an option to purchase the Project (i.e., the maximum term of the Lease, including all Renewal Terms) does not exceed the useful life of the Project. 02/66590.6 6 Section 17. Determination of Rental Value of Land. The City Council hereby determines and declares that Rent to be received for the Land under the Ground Lease after a Termination Event under the Lease (all as defined in the Ground Lease and the Lease) will represent the fair rental value of the Land. The City Council hereby determines and declares that the procedure for determining the amount of the Rent to be paid after a Termination Event will result in a Rent which is not less than the fair rental value of the Land so as to place the City under an economic or practical compulsion to renew the Lease or to exercise its option to purchase the Project pursuant to the Lease. In making such determinations, the City Council has given consideration to an evaluation by the staff of the City of the fair market rental value of the Land, the user and purposes for which the Land will be employed by the City, the benefit to the citizens and residents of the City by reason of the acquisition, construction and equipping of the Project on the Land, the option of the City to purchase the Project, and the expected eventual vesting of title to the Project in the City. Section 18. Designation of Bonds as Qualified Tax - Exempt Obligations. The City represents that it reasonably anticipates to issue (and has issued), together with governmental entities which derive their issuing authority from the City or are subject to substantial control by the City, not more than an aggregate total of $10,000,000 of governmental or qualified section 501(c)(3) organization bonds (as defined in the Code) during calendar year 1995. The City recognizes that governmental bonds include tax- exempt obligations such as notes, leases, loans and warrants. The City hereby designates the Certificates as qualified tax- exempt obligations within the meaning of Section 265 of the Code, allowing banks, thrift institutions and other financial institutions to avoid the loss of 100% of any otherwise available interest deduction in direct proportion to such institutions' tax- exempt holdings. Section 19. Exercise of Home Rule Powers of the City. 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 20. Repealer. All prior ordinances, acts, orders or resolutions, or parts thereof, by the City in conflict with this Ordinance are hereby repealed, except that this repealer shall not be construed to revive any ordinance, act, order or resolution, or part thereof, heretofore repealed. Section 21. Severability. If any section, paragraph, clause or provision of this Ordinance shall be adjudged to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, clause or provision shall not affect any of the remaining sections, paragraphs, clauses or provisions of this Ordinance, it being the intention that the various parts hereof are severable. 02/66590.6 7 Section 22. Public Hearing. A public hearing on this Ordinance shall be held on the 23rd day of October 1995, at 7:30 p.m., in the City Council Chambers, One City Hall Place, Pueblo, Colorado. INTRODUCED OCTOBER 10, 1995 By Charles Jones Councilperson APPROVED: Attest: wS _ `�• 'a _ APPROVED AS TO FORM BY CITY ATTORNEY _ Al , Zf City Attorney By President of the City Council 02166590.6 8 MORTGAGE AND INDENTURE OF TRUST By and Between CITY OF PUEBLO, COLORADO MUNICIPAL BUILDING CORPORATION, as Corporation, and THE BANK OF CHERRY CREEK, N.A., as Trustee Dated as of November 15, 1995 After this instrument has been recorded, please return to: William C. Gorham, Esq. Kutak Rock Suite 2900 717 Seventeenth Street Denver, Colorado 80202 02/66511.6 TABLE OF CONTENTS (This Table of Contents is not a part of this Indenture of Trust and is only for convenience of reference.) Paae PREAMBLES ............... ............................... 1 ARTICLE I DEFINITIONS AND CONSTRUCTION Section 1.01. Definitions ...... ............................... 4 Section 1.02. Construction ..... ............................... 9 ARTICLE H AUTHORIZATION, TERMS, EXECUTION AND ISSUANCE OF CERTIFICATES Section 2.01. Authorized Amount of Certificates ....................... 9 Section 2.02. Issuance of Certificates .............................. 9 Section 2.03. Limited Obligation . ............................... 11 Section 2.04. Execution of the Certificates .......................... 11 Section 2.05. Authentication .... ............................... 12 Section 2.06. Form of Certificates ............................... 12 Section 2.07. Delivery of the Certificates ........................... 12 Section 2.08. Mutilated, Lost, Stolen or Destroyed Certificates .............. 12 Section 2.09. Registration of Certificates; Persons Treated as Registered Owners; Transfer and Exchange of Certificates ..................... 13 Section 2.10. Cancellation of Certificates ........................... 13 Section 2.11. Issuance of Additional Certificates ....................... 13 ARTICLE III REVENUES AND FUNDS Section 3.01. Source of Payment of Certificates ....................... 15 Section 3.02. Creation of the Certificate Fund ........................ 15 Section 3.03. Payments Into the Interest Account of the Certificate Fund ........ 15 Section 3.04. Payments Into the Principal Account of the Certificate Fund ....... 16 Section 3.05. Use of Moneys in the Certificate Fund .................... 16 02/66511.6 1 Section 3.06. Custody of the Funds .............................. . Section 3.07. Creation of the Reserve Fund ......................... . Section 3.08. Use of Moneys in the Reserve Fund ..................... . Section 3.09. Creation of the Extraordinary Redemption Fund ............. . Section 3.10. Creation of the Construction Fund ...................... . Section 3.11. Application of Construction Fund Subsequent to Completion of Construction .... ............................... . Section 3.12. Creation of the Expenses Fund ........................ . Section 3.13. Creation of Special Construction Fund ................... . Section 3.14. Nonpresentment of Certificates ........................ . Section 3.15. Reports to City .. ............................... . Section 3.16. Repayment to the City from the Trustee .................. . Section 3.17. Rebate Fund .... ............................... . Section 3.18. Rebate Deposits .. ............................... . Section 3.19. Rebate Disbursements ............................. . ARTICLE IV REDEMPTION OF CERTIFICATES Section 4.01. Redemption Dates and Prices .......................... Section 4.02. Redemption Upon Termination of the Lease Term by Reason of Certain Events......... ............................... Section 4.03. Mandatory Sinking Fund Redemption ..................... Section 4.04. Notice of Redemption .............................. Section 4.05. Redemption Payments ............................. . Section 4.06. Cancellation .................................... Section 4.07. Delivery of New Certificates Upon Partial Redemption of 16 16 16 17 18 18 18 19 19 19 20 20 20 20 21 21 22 23 24 24 Certificates ...... ............................... 24 ARTICLE V INVESTMENTS Section 5.01. Investment of Moneys .............................. 25 Section 5.02. Arbitrage Certification .............................. 26 ARTICLE VI DISCHARGE OF INDENTURE ... ............................... 26 02166511.6 ii ARTICLE VII DEFAULTS AND REMEDIES Section 7.01. Events of Default .. ............................... 27 Section 7.02. Remedies on Default ............................... 28 Section 7.03. Majority of Registered Owners May Control Proceedings ......... 29 Section 7.04. Rights and Remedies of Registered Owners ................. 29 Section 7.05. Waiver of Appraisement, Valuation, Stay and Extension ......... 30 Section 7.06. Trustee May Enforce Rights Without Certificates .............. 30 Section 7.07. Delay or Omission No Waiver ......................... 30 Section 7.08. No Waiver of One Default to Affect Another ................ 30 Section 7.09. Discontinuance of Proceedings on Default; Position of Parties Restored ....... ............................... 31 Section 7.10. Waivers of Events of Default .......................... 31 ARTICLE VIII CONCERNING THE TRUSTEE Section 8.01. Duties of the Trustee ............................... 31 Section 8.02. Fees and Expenses of Trustee .......................... 34 Section 8.03. Resignation or Replacement of Trustee .................... 34 Section 8.04. Conversion, Consolidation or Merger of Trustee .............. 35 Section 8.05. Intervention by Trustee .............................. 35 Section 8.06. Undertaking to Provide Ongoing Disclosure ................. 35 ARTICLE IX SUPPLEMENTAL INDENTURES AND AMENDMENTS OF THE LEASE Section 9.01. Supplemental Indentures Not Requiring Consent of Registered Owners........ ............................... 36 Section 9.02. Supplemental Indentures Requiring Consent of Registered Owners .... 37 Section 9.03. Execution of Supplemental Indenture ..................... 38 Section 9.04. Amendments, Etc., of the Lease Not Requiring Consent of Registered Owners........ ............................... 38 Section 9.05. Amendments, Etc., of the Lease Requiring Consent of Registered Owners........ ............................... 38 02166511.6 lll ARTICLE X MISCELLANEOUS Section 10.01. Evidence of Signature of Registered Owners and Ownership of Section 10.02. Certificates ...... ............................... Covenants of Corporation ............................ 39 39 Section 10.03. Inspection of the Project ............................. 40 Section 10.04. Parties Interested Herein ............................. 40 Section 10.05. Titles, Headings, Captions, Etc . ........................ 40 Section 10.06. Severability ...... ............................... 40 Section 10.07. Governing Law ... ............................... 40 Section 10.08. Execution in Counterparts ............................ 40 Section 10.09. Notices 40 Section 10.10. ........ ............................... Payments Due on Holidays ........................... 41 Section 10.11. Corporation, City and Trustee Representatives ................ 41 TESTIMONIUM ............. ............................... 42 SIGNATURES AND SEALS ..... ............................... 42 ACKNOWLEDGEMENTS ...... ............................... 43 EXHIBIT A —FORM OF CERTIFICATE OF PARTICIPATION .............. A -1 EXHIBIT B— DESCRIPTION OF THE LAND ......................... B -1 EXHIBIT C— REQUEST FOR PAYMENT ........................... C -1 02/66511.6 iv MORTGAGE AND INDENTURE OF TRUST THIS MORTGAGE AND INDENTURE OF TRUST dated as of November 15, 1995 (together with any amendments hereto made in accordance herewith, this "Indenture "), by and between the CITY OF PUEBLO, COLORADO MUNICIPAL BUILDING CORPORATION (the "Corporation "), a nonprofit corporation duly organized, existing and in good standing under the laws of the State of Colorado, and THE BANK OF CHERRY CREEK, N.A., a national banking association, as trustee (the "Trustee "), having an office and principal place of business in Pueblo, Colorado, duly organized and existing under the laws of the United States of America, being authorized to accept and execute trusts of the character herein set out under and by virtue of the laws of the United States of America; WITNESETH: WHEREAS, the CITY OF PUEBLO, COLORADO (the "City"), for the purposes of financing the acquisition, construction and equipping of a parking facility (the "Project ") on certain real property located within the City (the "Land ") has entered into (i) a Ground Lease Agreement of even date herewith (the "Ground Lease "), with the Corporation, whereby the City has leased the Land and a portion of the Project (the "City Portion ") to the Corporation, and (ii) an annually renewable Lease Purchase and Sublease Agreement of even date herewith (the "Lease "), between the Corporation, as lessor, and the City, as lessee, whereby the City has subleased the Land and the City Portion of the Project from the Corporation, and has leased from the Corporation the remainder of the Project (the "Certificate Project ") to be acquired, constructed and equipped on the Land; and WHEREAS, pursuant to the Lease, and subject to the right of the City to terminate the Lease and other limitations as therein provided, the City will pay certain Base Rentals and Additional Rentals (as such terms are defined in the Lease) in consideration for the right of the City to use the Project; and WHEREAS, pursuant to this Indenture, the right of the Corporation to receive the Base Rentals, and rights to receive certain other payments as provided herein and in the Lease (with certain exceptions as provided herein and in the Lease), have been assigned to the Trustee; and WHEREAS, pursuant to this Indenture, the Corporation has mortgaged to the Trustee the Corporation's interest in the Ground Lease; and WHEREAS, there will be executed and delivered by the Trustee pursuant to this Indenture one or more Certificates of Participation (the "Certificates "), evidencing assignments of proportionate interests in rights to receive Base Rentals and certain other payments, which rights have been assigned to the Trustee by the Corporation; and 02/66511.6 WHEREAS, the net proceeds from the sale of the Certificates to the registered owners of the Certificates (the "Registered Owners ") will be disbursed by the Trustee for the acquisition, construction and equipping of the Project on the Land and other purposes set forth herein; and WHEREAS, the Trustee has entered into this Indenture for and on behalf of the Registered Owners, and will hold its rights hereunder, including its rights with respect to the Project, except as otherwise specifically provided herein, for the equal and proportionate benefit of the Registered Owners, and will disburse moneys received by the Trustee in accordance with this Indenture; and WHEREAS, the Certificates are to be in substantially the form set forth in Exhibit A to this Indenture, with such necessary or appropriate variations, omissions and insertions as permitted or required by this Indenture; and WHEREAS, all things necessary to make the Certificates, when authenticated and delivered by the Trustee and executed by the Corporation as in this Indenture provided, legal, valid and binding assignments of proportionate interests in rights to receive Revenues and certain other payments, as herein provided, and to constitute this Indenture a valid, binding and legal instrument for the security of the Certificates in accordance with its terms, have been done and performed; NOW, THEREFORE, THIS MORTGAGE AND INDENTURE OF TRUST WITNESSETH: That the Corporation, in consideration of the foregoing premises and the mutual promises and covenants herein contained and for the benefit of the Registered Owners and the sum of One Dollar ($1.00) to it duly paid by the Trustee at or before the execution of these presents, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, in order to secure the payment of the principal of, premium, if any, and interest on all Certificates at any time outstanding under this Indenture, according to their tenor and effect, and to secure the performance and observance of all the covenants and conditions in the Certificates and herein contained, and to declare the terms and conditions upon and subject to which the Certificates are issued and secured, has executed and delivered this Indenture and has granted, bargained, sold, warranted, mortgaged, aliened, remised, released, conveyed, assigned, pledged, set over and confirmed, and by these presents does grant, bargain, sell, warrant, mortgage, alien, remise, release, convey, assign, pledge, set over and confirm unto The Bank of Cherry Creek, as the Trustee, and to its successors and assigns forever, all and singular the following described property, franchises and income: (a) all rights, title and interest of the Corporation in, to and under the Ground Lease; (b) the Project, subject only to Permitted Encumbrances; 02166511.6 2 (c) all rights, title and interest of the Corporation in, to and under the Lease (except the rights of the Corporation under Sections 13.03 and 14.06 of the Lease); (d) all Revenues and any other receipts received by or on behalf of the Corporation pursuant to the Lease including, without limitation, (i) all Base Rentals (as defined in the Lease) to be received from the City pursuant to the Lease and pursuant to the terms of which Base Rentals are to be paid directly to the Trustee, which hereby constitutes an absolute and present assignment of all Base Rentals received and to be received from the City pursuant to the Lease; (ii) all Net Proceeds received pursuant to the Lease; (iii) all rights to enforce payments under the Lease when due or to otherwise enforce rights under the Lease for the benefit of the Registered Owners (but excluding the rights of the Corporation under Sections 13.03 and 14.06 of the Lease); and (iv) all Reserve Fund deficiency payments; (e) the Project Documents, including all extensions and renewals of the term thereof, if any, together with certain rights, titles and interests of the City in and to the Project Documents, including, but not limited to, the present and continuing right to make claim for, collect, receive and receipt for any of the sums, amounts, income, revenues, issues and profits and any other sums of money payable or receivable under the Project Documents, to bring actions and proceedings thereunder or for the enforcement thereof, and to do any and all things which the City under the Project Documents is or may become entitled to; and (f) all moneys and securities from time to time held by the Trustee under this Indenture (except the Rebate Fund) and any and all other real or personal property of every name and nature from time to time hereafter by delivery or by writing of any kind specially mortgaged, pledged or hypothecated, as and for additional security hereunder, by the Corporation, or by anyone on its behalf, in favor of the Trustee, which is hereby authorized to receive any and all such property at any and all times and to hold and apply the same subject to the terms hereof. TO HAVE AND TO HOLD the same with all privileges and appurtenances hereby conveyed and assigned, or agreed or intended to be, to the Trustee and its successors in said trust and assigns forever; IN TRUST, NEVERTHELESS, upon the terms herein set forth for the equal and proportionate benefit, security and protection of all Registered Owners, without privilege, priority or distinction as to the lien or otherwise of any of the Certificates over any other of the Certificates; PROVIDED, HOWEVER, that if the principal of the Certificates and the premium, if any, and the interest due or to become due thereon, shall be paid at the times and in the manner mentioned in the Certificates according to the true intent and meaning thereof, and if there are paid to the Trustee all sums of money due or to become due to the Trustee in accordance with 02/66511.6 3 the terms and provisions hereof, then upon such final payment this Indenture and the rights hereby granted shall cease, determine and be void; otherwise this Indenture to be and remain in full force and effect. THIS INDENTURE FURTHER VVITNESSETH and it is expressly declared, that all Certificates issued and secured hereunder are to be executed, authenticated and delivered and all said property, rights, interests, revenues and receipts hereby pledged, assigned and mortgaged are to be dealt with and disposed of under, upon and subject to the terms, conditions, stipulations, covenants, agreements, trusts, uses and purposes as hereinafter expressed, and the Corporation has agreed and covenanted, and does hereby agree and covenant, with the Trustee for the benefit of the Registered Owners, as follows: ARTICLE I DEFINITIONS AND CONSTRUCTION Section 1.01. Definitions. All words and phrases defined in Article I of the Lease shall have the same meaning in this Indenture. In addition, the following terms, except where the context indicates otherwise, shall have the respective meanings set forth below. "Deficiency" means the difference between the total amount of principal and interest due on any Interest Payment Date for the Certificates and the amount of Base Rentals paid by the City and deposited in the Certificate Fund on or before such Interest Payment Date to be used for payment of principal and interest on the Certificates on such Interest Payment Date. "Event of Default" means those defaults specified in Section 7.01 of this Indenture. "Federal Securities" means direct obligations of, or obligations the timely payment of principal and interest of which are fully and unconditionally guaranteed by, the United States of America. "Investment Instructions" means (a) the Investment Instructions delivered to the Trustee upon the original issuance of the Certificates and (b) any subsequent Investment Instructions, amending or superseding such Investment Instructions, accompanied by an opinion of nationally recognized municipal bond counsel addressed to the City to the effect that compliance with said new Investment Instructions will not cause the interest paid or to be paid on the Certificates to be or become includable in gross income for purpose of Colorado or federal income taxation. "Outstanding" means all Certificates which have been executed and delivered, except: (a) Certificates canceled or which shall have been surrendered to the Trustee for cancellation; 02/66511.6 4 (b) Certificates in lieu of which other Certificates have been authenticated under Sections 2.08 or 2.09 of this Indenture; (c) Certificates which shall have been redeemed as provided in Article IV of this Indenture (including Certificates redeemed by a partial payment as provided in Section 4.02 of this Indenture); and (d) Certificates paid or deemed to be paid in accordance with the provisions of Article VI of this Indenture. "Permitted Investments" means any one or more of the following if and to the extent that such investments are permitted under the laws of the State for funds of the City: (a) Direct and general obligations of the United States of America, or obligations that are unconditionally guaranteed as to principal and interest by the United States of America, including (in the case of direct and general obligations of the United States of America) evidences of direct ownership of proportionate interests in future interest or principal payments of such obligations. Investments in such proportionate interests must be limited to circumstances wherein (i) a bank or trust company acts as custodian and holds the underlying United States obligations; (ii) the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor of the underlying United States obligations; and (iii) the underlying United States obligations are held in safekeeping in a special account, segregated from the custodian's general assets, and are not available to satisfy any claim of the custodian, any person claiming through the custodian, or any person to whom the custodian may be obligated. The obligations described in this subparagraph are hereinafter called "United States Obligations." (b) Obligations issued or guaranteed by the following instrumentalities or agencies of the United States of America: (i) Federal Home Loan Banks; (ii) Government National Mortgage Association; (iii) Farmers Home Administration; (iv) Federal Home Loan Mortgage Corporation; (v) Federal Housing Administration; and (vi) Federal National Mortgage Association. 02166511.6 5 (c) Direct and general long -term obligations of any state, to the payment of which the full faith and credit of the state is pledged and that are rated "Aaa" by Moody's Investors Service (hereinafter referred to as "Moody's "). (d) Direct and general short-term obligations of any state, to the payment of which the full faith and credit of the state is pledged and that are rated in the highest rating category by Moody's. (e) Interest - bearing demand or time deposits issued by state banks or trust companies or national banking associations that are members of the Federal Deposit Insurance Corporation (FDIC). These deposits must (b) be continuously and fully insured by FDIC and be with banks whose debt is rated at least "P -1" or "Aa" by Moody's, or (b) be secured by United States Obligations at the levels described in the last paragraph of this definition and (if such deposits have maturities of not more than 365 days) be with banks the short-term debt of which is rated "P -1" by Moody's or (if such deposits have maturities of more than 365 days) be with banks the long -term debt of which is rated "Aa" or better by Moody's. The United States Obligations mentioned above must be held by the Trustee (who shall not be the provider of the collateral), or by any Federal Reserve Bank or Depositary, as custodian for the Trustee. The Trustee shall have a perfected first lien in the United States Obligations serving as collateral, such collateral shall be free from all third -party liens and claims, and failure to maintain the requisite collateral level after the restoration period described in paragraph (k) of this definition shall entitle the Trustee to liquidate the collateral. (f) Repurchase agreements, the maturities of which are 30 days or less, entered into with financial institutions such as banks or trust companies organized under state law or national banking associations, insurance companies, or government bond dealers reporting to, trading with, and recognized as a primary dealer by, the Federal Reserve Bank of New York and a member of the Security Investors Protection Corporation or with a dealer or parent holding company, in each such case the debt of which is rated at least "A" or "P -1" by Moody's. Such repurchase agreements shall be in respect of United States Obligations and (except repurchase agreements with institutions whose debt or commercial paper is rated "Aaa" or "P -1" by Moody's) shall be collateralized by United States Obligations the fair market value of which, together with the fair market value of the repurchase agreement securities, shall be maintained at the levels described in the last paragraph of this definition, and the provisions of the repurchase agreement shall meet the following additional criteria: (i) the Trustee (who shall not be the provider of the collateral) or a third party acting solely as agent for the Trustee has possession of the United States Obligations; (ii) failure to maintain the requisite collateral levels will require the Trustee to liquidate the United States Obligations immediately; 02/66511.6 6 (iii) the Trustee has a perfected, first priority security interest in the United States Obligations; and (iv) the United States Obligations are free and clear of third -party liens, and in the case of an SIPC broker, were not acquired pursuant to a repurchase or reverse repurchase agreement. (g) Pre- refunded municipal obligations rated "Aaa" by Moody's and meeting the following conditions: (i) (A) the municipal obligations are not to be redeemed prior to maturity or as to which the Trustee has been given irrevocable instructions concerning their calling and redemption and (B) the issuer has covenanted not to redeem such municipal obligations other than as set forth in such instructions; (ii) the municipal obligations are secured by cash or United States Obligations that may be applied only to interest, principal and premium payments of such municipal obligations; (iii) the principal of and interest on the United States Obligations (plus any cash in the escrow fund) are sufficient to meet the liabilities on the municipal obligations; (iv) the United States Obligations serving as security for the municipal obligations are held by an escrow agent or trustee; and (v) the United States Obligations (plus any cash in the escrow fund) are not available to satisfy any other claims, including those against the trustee or escrow agent. (h) Prime commercial paper of a United States corporation, finance company or banking institution if such commercial paper is rated at least "P -1" by Moody's and if such commercial paper is stated to mature in not more than 365 days. (i) Shares of a diversified open -ended management investment company (as defined in the Investment Company Act of 1940) or shares in a regulated investment company (as defined in Section 851(a) of the Internal Revenue Code of 1986, as amended) that is (A) a money market fund that has been rated in the highest rating category by Moody's or (B) money market accounts of the Trustee or of any state or federal bank the debt of which is rated at least "P -1" or Aaa by Moody's or the debt of whose one bank holding company parent is rated at least "P -1" or Aaa by Moody's. 02/66511.6 7 0) State pooled investment funds approved by Moody's and invested in any one or more of the investments described in subparagraphs (a) through (i) of this definition. (k) The collateral levels referred to in subparagraphs (e) and (f) of this definition are set forth, and are based on the assumptions described below: Remaining Maturity Frequency of 1 yr, or 5 yrs. or 10 yrs. or yrs. or 30 yrs. or Valuation Less Less Less Less Less AAA collateral levels ( %) Daily 103 106 107 109 116 Weekly 104 112 114 120 125 Monthly 107 123 130 133 143 Quarterly 108 125 135 140 150 Assumptions: (1) On each valuation date, the market value of the United States Obligations will be an amount equal to the requisite collateral percentage of the agreement or deposit (including unpaid accrued interest) that is being secured. (2) The following restoration periods were assumed: one business day for daily valuations, two business days for weekly valuations, and one month for monthly and quarterly valuations. The use of different restoration periods may therefore affect the requisite collateral percentage. (3) Failure to maintain the requisite collateral percentage after the restoration period will require the trustee to terminate the repurchase agreement and, if not paid by the counter party in federal funds against transfer of the repurchase agreement securities, to liquidate the collateral. 0) any other security or investment approved in writing by Moody's. "Regular Record Date" means the fifteenth day (whether or not a Business Day) next preceding each interest payment date for the Certificates (other than a Special Record Date). "Special Construction Fund" means the trust fund by that name created pursuant to Section 3.13 hereof. "Special Record Date" means a special date fixed to determine the names and addresses of Registered Owners for purposes of paying interest on a special interest payment date for the payment of defaulted interest, all as further provided in Section 2.02 hereof. "Trust Estate" means the property mortgaged, pledged and assigned to the Trustee pursuant to the granting clauses hereof. 02/66511.6 8 Section 1.02. Construction. In this Indenture, unless the context otherwise requires: (a) Articles and Sections referred to by number shall mean the corresponding Articles and Sections of this Indenture. (b) The terms "hereby," "hereof," "hereto," "herein," "hereunder" and any similar terms refer to this Indenture, and the term "hereafter" shall mean after, and the term "heretofore" shall mean before, the date of execution and delivery of this Indenture. (c) Words of the masculine gender shall mean and include correlative words of the female and neuter genders, and words importing the singular number shall mean and include the plural number and vice versa. (d) Words importing the redemption of a Certificate or the calling of a Certificate for redemption do not include or connote the payment of such Certificate at its stated maturity or the purchase of such Certificate. (e) References in this Indenture to particular sections of the Code, the Act or any other legislation shall be deemed to refer also to any successor sections thereto or other redesignations for codification purposes and shall be deemed to include any related Regulations. (f) The terms "receipt," "received," "recovery," "recovered" and any similar terms, when used in this Indenture with respect to moneys or payments due, shall be deemed to refer to the passage of physical possession and control of such moneys and payments to the Trustee. ARTICLE H AUTHORIZATION, TERMS, EXECUTION AND ISSUANCE OF CERTIFICATES Section 2.01. Authorized Amount of Cedificates. No Certificates shall be issued hereunder except in accordance with this Article H. The aggregate principal amount of Certificates that may be issued shall be $1,220,000, except as provided in Section 2.11 of this Indenture. Section 2.02. Issuance of Cert'if'icates. In order to provide funds for the payment of the Cost of Construction and other funds and accounts created hereunder, the Certificates shall be issued in the form attached hereto as Exhibit A and shall constitute assignments of proportionate undivided interests in the right to receive Revenues under the Lease. 02/66511.6 9 The Certificates shall be issuable solely as fully registered Certificates without coupons in the denominations of $100,000 and any integral multiple of $5,000 in excess thereof. The Certificates shall be lettered "R" and shall be numbered separately from 1 upward. The Certificates shall be dated as of their date of their authentication by the Trustee. The initial series of Certificates (the "Series 1995 Certificates ") shall bear interest from November 15, 1995, if authenticated prior to November 15, 1995, or if authenticated on any later date, the Series 1995 Certificates shall bear interest from the January 1 or July 1 next preceding their date of authentication, or if authenticated on a January 1 or July 1, the Series 1995 Certificates shall bear interest from such date; provided, however, that if interest on the Series 1995 Certificates shall be in default, Series 1995 Certificates issued in exchange for Series 1995 Certificates surrendered for transfer or exchange shall bear interest from the date to which interest has been paid in full on the Series 1995 Certificates so surrendered. The Series 1995 Certificates shall bear interest payable semiannually on January 1 and July 1 of each year, commencing July 1, 1996, until such Series 1995 Certificates are paid pursuant to the provisions of this Indenture. The Series 1995 Certificates shall mature on July 1, 2015 in the aggregate principal amount of $1,220,000 and shall bear interest at a rate equal to 6.90% per annum. The principal of and premium, if any, on the Certificates shall be payable to the Registered Owner thereof as shown on the registration books of the City kept by the Trustee, upon presentation and surrender thereof at the principal corporate trust office of the Trustee or its successor. Payment of interest on any Certificate shall be made to the Registered Owner thereof by check or draft mailed by the Trustee, on or before each interest payment date (or, if such interest payment date is not a Business Day, on or before the next succeeding Business Day), to the Registered Owner thereof at the address of such Registered Owner shown on the registration books of the City kept by the Trustee at the close of business on the Regular Record Date for such interest payment date; but any such interest not so timely paid or duly provided for shall cease to be payable to the person who is the Registered Owner thereof at the close of business on the Regular Record Date and shall be payable to the person who is the Registered Owner thereof at the close of business on a Special Record Date for the payment of any such defaulted interest. Such Special Record Date shall be fixed by the Trustee whenever moneys become available for payment of the defaulted interest, and notice of the Special Record Date shall be given to the Registered Owners of the Certificates not less than ten days prior thereto by first -class mail to each such Registered Owner as shown on the registration books on a date selected by the Trustee, stating the date of the Special Record Date and the date fixed for the payment of such defaulted interest. The Trustee may make payments of interest on any Certificate by such alternative means as may be mutually agreed to between the Registered Owner of such Certificate and the Trustee. All such payments shall be made in lawful money of the United States of America without deduction for the services of the Trustee. 02/66511.6 10 Section 2.03. Limited Obligation. Each Certificate shall evidence the assignment of a proportionate undivided interest in the right to receive Revenues under the Lease. The Certificates are payable solely from Revenues as, when and if the same are received by the Trustee. The Revenues are to be held in trust by the Trustee for such purposes in the manner and to the extent provided herein. NEITHER THE LEASE NOR THE CERTIFICATES CONSTITUTES A GENERAL OBLIGATION OR OTHER INDEBTEDNESS OF THE CITY WITHIN THE MEANING OF ANY CONSTITUTIONAL, STATUTORY OR CHARTER DEBT LIMITATION. NEITHER THE LEASE, THE INDENTURE NOR THE CERTIFICATES HAVE DIRECTLY OR INDIRECTLY OBLIGATED THE CITY TO MAKE ANY PAYMENTS BEYOND THOSE APPROPRIATED FOR ANY FISCAL YEAR IN WHICH THE LEASE SHALL BE IN EFFECT. EXCEPT TO THE EXTENT PAYABLE FROM THE PROCEEDS OF THE SALE OF THE CERTIFICATES AND INCOME FROM THE INVESTMENT THEREOF, FROM NET PROCEEDS OF CERTAIN INSURANCE POLICIES, PERFORMANCE BONDS AND CONDEMNATION AWARDS, FROM NET PROCEEDS RECEIVED AS A CONSEQUENCE OF DEFAULTS UNDER CONSTRUCTION CONTRACTS, FROM NET PROCEEDS OF SUBLEASING THE LAND AND LEASING THE PROJECT OR SELLING AN ASSIGNMENT OF THE GROUND LEASE OR FROM OTHER AMOUNTS MADE AVAILABLE UNDER THE INDENTURE, THE CERTIFICATES WILL BE PAYABLE DURING THE LEASE TERM SOLELY FROM BASE RENTALS TO BE PAID BY THE CITY UNDER THE LEASE AND THE INCOME FROM CERTAIN INVESTMENTS THEREUNDER. ALL PAYMENT OBLIGATIONS OF THE CITY UNDER THE LEASE, INCLUDING, WITHOUT LIMITATION, THE OBLIGATION OF THE CITY TO PAY BASE RENTALS, ARE FROM YEAR TO YEAR ONLY AND DO NOT CONSTITUTE A MANDATORY PAYMENT OBLIGATION OF THE CITY IN ANY FISCAL YEAR BEYOND A FISCAL YEAR IN WHICH THE LEASE SHALL BE IN EFFECT. THE LEASE IS SUBJECT TO ANNUAL RENEWAL AT THE OPTION OF THE CITY AND WILL BE TERMINATED UPON THE OCCURRENCE OF A TERMINATION EVENT. IN SUCH EVENT, ALL PAYMENTS FROM THE CITY UNDER THE LEASE WILL TERMINATE, AND THE CERTIFICATES AND THE INTEREST THEREON WILL BE PAYABLE FROM CERTAIN MONEYS, IF ANY, HELD BY THE TRUSTEE UNDER THE INDENTURE AND ANY MONEYS MADE AVAILABLE BY ACTION OF THE TRUSTEE REGARDING THE LAND AND THE PROJECT. Section 2.04. Execution of the Certicates. Each Certificate shall be authenticated by the manual or facsimile signature of the President of the City Council of the City, shall be attested with the manual or facsimile signature of the City Clerk of the City and shall bear the original or facsimile of the seal of the City and be additionally authenticated by the manual or facsimile signature of the President of the Corporation, shall be attested with the manual or facsimile signature of the Secretary of the Corporation and shall bear the original or facsimile of the seal of the Corporation. In addition, each Certificate shall be executed by the manual signature of any duly authorized representative of the Trustee. In case any official of the Trustee, the Corporation or of the City whose signature shall appear on the Certificates shall 02/66511.6 11 cease to be such official before delivery of the Certificates, such signature shall nevertheless be valid and sufficient for all purposes, the same as if he or she had remained in office until delivery. Section 2.05. Authentication. No Certificate shall be valid or obligatory for any purpose or entitled to any security or benefit hereunder unless and until executed and authenticated in the manner prescribed by Section 2.04 of this Indenture, and such execution and authentication of any Certificate shall be conclusive evidence that such Certificate has been properly issued and delivered hereunder. Section 2.06. Form of Cer i acates. The Certificates shall be substantially in the form set forth in Exhibit A to this Indenture, with such appropriate variations, omissions and insertions as permitted or required hereby. Section 2.07. Delivery of the Certificates. Upon the execution and delivery of this Indenture, the Trustee shall execute and deliver the Series 1995 Certificates in the aggregate principal amount of $1,220,000 to the Original Purchaser, as hereinafter in this Section 2.07 provided. (a) Prior to the delivery by the Trustee of any of the Certificates, there shall be filed with the Trustee (i) originally executed counterparts of the Lease, the Ground Lease and this Indenture, (ii) a certified copy of the Ordinance adopted by the City Council approving the Lease, the Ground Lease and the issuance of the Certificates pursuant to this Indenture; (iii) a certified copy of a Resolution adopted by the Board of Directors of the Corporation approving the Lease, the Ground Lease, this Indenture and the issuance of the Certificates; and (iv) commitments for the issuance of the title insurance policies required by Section 7.04 of the Lease. (b) Thereupon, the Trustee shall deliver the Certificates to the Original Purchaser, upon payment to the Trustee of a sum specified in a separate agreement between the City and the Original Purchaser, plus accrued interest on the Certificates to the date of delivery, if any. Such sum shall be deposited as set forth in Article III hereof. Section 2.08. Mutilated, Lost, Stolen or Destroyed Cer U icates. In the event that any Certificate is mutilated, lost, stolen or destroyed, a new Certificate may be authenticated on behalf of the Trustee, of like date, maturity and denomination as that mutilated, lost, stolen or destroyed; provided that the Trustee shall have received indemnity from the Registered Owner of the Certificate satisfactory to it and provided further, in case of any mutilated Certificate, that such mutilated Certificate shall first be surrendered to the Trustee, and in the case of any lost, stolen or destroyed Certificate, that there shall be first furnished to the Trustee evidence of such loss, theft or destruction satisfactory to the Trustee. In the event that any such Certificate shall have matured or is about to mature, instead of issuing a duplicate Certificate, the Trustee may 02/66511.6 12 pay the same without surrender thereof. The Trustee may charge the Registered Owner of the Certificate with its reasonable fees and expenses in this connection. Section 2.09. Registration of Certificates; Persons Treated as Registered Owners; Transfer and Exchange of Certificates. Books for the registration and for the transfer of Certificates shall be kept by the Trustee which is hereby appointed the registrar. Upon surrender for transfer of a Certificate at the principal corporate trust office of the Trustee, duly endorsed for transfer or accompanied by an assignment duly executed by the Registered Owner or the attorney of such Registered Owner duly authorized in writing, the Trustee shall execute and deliver in the name of the transferee a new fully registered Certificate for a like aggregate principal amount and of a like maturity, series and interest rate. Certificates may only be transferred in whole by any Registered Owner and may only be transferred to an "Accredited Investor" as defined in Rule 501 under Regulation D of the Securities Act of 1933, as amended, or any subsequent rule of similar import form time to time in effect. The Trustee shall not be required to transfer the Certificates during the period of 15 days next preceding any interest payment date of such Certificate nor to transfer any Certificate after the mailing of notice calling such Certificate for redemption has been given as herein provided, nor during the period of 15 days next preceding the giving of such notice of redemption. As to any Certificate, the person in whose name the same shall be registered on a Regular Record Date or Special Record Date shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of either principal or interest on the Certificate shall be made only to or upon the written order of the Registered Owner thereof or the legal representative of such Registered Owner, but such registration may be changed as hereinabove provided. All such payments shall be valid and effectual to satisfy and discharge such Certificate to the extent of the sum or sums paid. The Trustee shall require the payment, by any Registered Owner requesting transfer of Certificates, of any tax, trustee's fee, fee or other governmental charge required to be paid with respect to such transfer. Section 2.10. Cancellation of Certificates. Whenever any Outstanding Certificates shall be delivered to the Trustee for cancellation pursuant to this Indenture, upon payment thereof or for or after replacement pursuant to Sections 2.08 or 2.09 of this Indenture, such Certificates shall be promptly canceled and destroyed by the Trustee, and counterparts of a certificate of destruction evidencing such destruction shall be furnished by the Trustee to the City. Section 2.11. Issuance of Additional Certificates. So long as the Lease Term shall remain in effect and no Termination Event or an Event of Default shall have occurred, one or more issues of additional Certificates (the "Additional Certificates ") may be issued upon the terms and conditions provided herein. 02/66511.6 13 Additional Certificates may be issued to provide funds to pay any one or more of the following: (a) the costs of refunding all or any of the Outstanding Certificates; (b) the costs of completing the acquisition, construction and equipping of the Project (and costs reasonably related thereto), in excess of the amount available therefor in the Construction Fund pursuant to the Lease and this Indenture; (c) the costs of making at any time or from time to time such substitutions, additions, modifications and improvements in, on or to the Project as the City may deem necessary or desirable; (d) any other capital project or improvement approved by the City and the Corporation; and (e) the costs of the issuance and sale of the Additional Certificates, any deposit to the Reserve Fund necessary for the amount therein to equal the Reserve Fund Requirement, and capitalized interest for such period, and such other costs reasonably related to the financing, as shall be agreed upon by the City and the Trustee. In the event that amounts available therefor in the Construction Fund are not sufficient to complete the Project, the Trustee, together with the City and the Corporation, shall use its best efforts to issue Additional Certificates to complete the Project. Additional Certificates may be issued only upon there being filed with the Trustee: (a) Originally executed counterparts of a supplemental Indenture and an amendment to the Lease adopted in accordance with the requirements of Article IX hereof, including requirements regarding approval of the Registered Owners, if applicable, expressly providing that, for all the purposes hereof, the Project shall include any property, buildings or equipment being financed by the Additional Certificates, and that the Certificates being issued as well as any Certificates and Additional Certificates theretofore issued, except that the date or dates of the Additional Certificates, the rate or rates of interest on the Additional Certificates, and provisions for the redemption thereof, if any, all shall be as provided in the supplemental Indenture and amendment to the Lease rather than as provided in this Indenture, and further providing for an increase in the Base Rentals required to be paid to the Trustee under Exhibit B to the Lease in such amount as shall be necessary to pay (assuming that no Termination Event or an Event of Default shall occur), the principal of, premium, if any, and interest on the Certificates then Outstanding, as well as the Additional Certificates proposed to be issued. (b) A written opinion or opinions of counsel of nationally recognized stature in the field of municipal bonds and mutually acceptable to the City and the Trustee, to the effect that the amendment to the Lease and the authentication of the Additional Certificates have been duly authorized, that the amendment to the Lease is valid and enforceable against the City, that the exclusion from gross income, for purposes of federal income taxation, of the interest on the Certificates and Additional Certificates theretofore issued will not be adversely affected by the issuance of the Additional Certificates being issued, and that the issuance, sale and delivery of the Additional Certificates will not constitute a default under the Lease or this Indenture nor cause any violation of the covenants, agreements or representations in the Lease or this Indenture. 02166511.6 14 (c) Evidence that the amount of the title insurance policy or policies required by Section 7.04 of the Lease and the Reserve Fund Requirement have been increased, if necessary, to reflect the amount of the Certificates and Additional Certificates theretofore issued plus the Additional Certificates (or such lesser amount as shall be the maximum insurable value of the Project). (d) A written order to the Trustee by the City to deliver the Additional Certificates to the purchaser or purchasers therein identified upon payment to the Trustee of a specified sum plus accrued interest. Each of the Additional Certificates issued pursuant to this Section shall evidence assignment of a proportionate interest in rights to receive Revenues under the Lease, as amended, proportionately and ratably secured with the Certificates originally issued and all other issues of Additional Certificates, if any, issued pursuant to this Section, without preference, priority or distinction of any Certificates or Additional Certificates over any other. ARTICLE III REVENUES AND FUNDS Section 3.01. Source of Payment of Cedifzcates. The Certificates shall be payable solely from Revenues received by the Trustee and do not constitute a general obligation or other indebtedness of the City within the meaning of any constitutional, statutory or Charter debt limitation. Revenues, when, as and if received by the Trustee, shall be held hereunder for payment of the principal of, premium, if any, and interest on the Certificates as provided in this Indenture. Section 3.02. Creation of the Certl ficate Fund. A special fund is hereby created and established with the Trustee, to be designated "City of Pueblo, Colorado, Parking Facilities Lease Purchase and Sublease Agreement, Certificate of Participation Fund" (the "Certificate Fund "), which shall be used to pay the principal of, premium, if any, and interest on the Certificates. Within the Certificate Fund there are hereby created and ordered established an Interest Account and a Principal Account which shall be used as set forth in Section 3.05 of this Indenture. Section 3.03. Payments Into the Interest Account of the Certificate Fund. There shall be deposited into the Interest Account of the Certificate Fund (a) all accrued interest and capitalized interest received at the time of the issuance, sale and delivery of the Certificates (b) that portion of each payment of Base Rentals made by the City which is designated and paid as interest under Exhibit B to the Lease (c) any portion of the Reserve Fund to be deposited into the Interest Account of the Certificate Fund, as provided in Section 3.08 hereof; and (d) all other moneys received by the Trustee under this Indenture to be used for the purpose of paying interest on the Certificates. 02166511.6 15 Section 3.04. Payments Into the Principal Account of the Certificate Fund. There shall be deposited into the Principal Account of the Certificate Fund (a) that portion of each payment of Base Rentals made by the City which is designated and paid as principal under Exhibit B to the Lease; (b) any portion of the Reserve Fund to be deposited into the Principal Account of the Certificate Fund, as provided in Section 3.08 hereof; and (c) all other moneys received by the Trustee under this Indenture to be used for the purpose of paying the principal of the Certificates. Section 3.05. Use of Moneys in the Certificate Fund. Moneys in the Interest Account of the Certificate Fund shall be used solely for the payment of the interest on the Certificates except to the extent that moneys therein may be deposited in the Rebate Fund. Moneys in the Principal Account of the Certificate Fund shall be used solely for the payment of the principal of the Certificates except to the extent that moneys therein may be deposited in the Rebate Fund. In the event the Certificates are to be redeemed in whole, any moneys remaining in the Certificate Fund shall be applied to such redemption along with other moneys held by the Trustee for such purpose. If the Base Rentals paid by the City on any Base Rental Payment Date are not sufficient to pay the principal of and interest on the Certificates due on the next ensuing Interest Payment Date, the Trustee shall satisfy any deficiency from the Reserve Fund. Amounts deposited into the Certificate Fund shall be depleted at least once a year except for an amount not to exceed the greater of one year's earnings on the Certificate Fund or l/ 12th of the annual debt service on the Certificates. Section 3.06. Custody of the Funds. All Funds created under this Indenture shall be in the custody of the Trustee, subject to the provisions of this Indenture. Section 3.07. Creation of the Reserve Fund. A special fund is hereby created and established with the Trustee to be designated "City of Pueblo, Colorado, Parking Facilities Lease Purchase and Sublease Agreement, Reserve Fund" (the "Reserve Fund "), which shall be expended in accordance with Section 3.08 hereof. There shall be deposited into the Reserve Fund, (a) an amount equal to the Reserve Fund Requirement from the proceeds of the Certificates, (b) any Additional Rentals required by Section 6.02 of the Lease and Section 3.08 hereof to maintain the Reserve Fund at an amount equal to the Reserve Fund Requirement and (c) any other amounts provided to the Trustee with instructions to deposit such moneys in the Reserve Fund. Section 3.08. Use of Moneys in the Reserve Fund. The income derived from the investment of the Reserve Fund shall be deposited when received in the following order of priority: (i) to the Reserve Fund until the amount on deposit shall equal the Reserve Fund Requirement; (ii) to the Extraordinary Expenses Account of the Expenses Fund until the amount on deposit therein shall equal $25,000, (iii) to the Insurance Account of the Expenses Fund until the amount on deposit therein shall equal $25,000, and (iv) all remaining income derived from 02166511.6 16 the investment of the Reserve Fund shall be deposited in the Interest Account of the Certificate Fund. Moneys held in the Reserve Fund excluding income from the investment thereof and applied pursuant to (ii), (iii) and (iv) of the preceding paragraph shall be applied to any of the following purposes: (a) To the payment of the principal amount of the Certificates and interest thereon, as the same shall become due, to the extent of any deficiency in either the Interest Account or the Principal Account of the Certificate Fund for such purpose; and to the payment of any Additional Rentals in the event the City shall fail to make payment thereof; (b) At the option of the Trustee, subsequent to a Termination Event or an Event of Default, to the payment of any cost or expense necessary to preserve or protect the Project or the interest of the Trustee or the Registered Owners therein, or necessary to make any repairs or modifications to the Project in preparation for sale or subleasing thereof, as the Trustee may deem to be in the best interests of the Registered Owners; (c) In the event that the Certificates are to be redeemed subsequent to a Termination Event or an Event of Default, proportionately to the redemption of the Certificates then Outstanding and the payment of interest thereon; (d) In the event that the City shall exercise its option to purchase the Project and terminate the Lease upon payment of the Purchase Option Price, to the City, or, at the option of the City, as a reduction of such Purchase Option Price; or (e) At the option of the City, in reduction of the final payment of Base Rentals payable by the City under the Lease and, to the extent of moneys in the Reserve Fund, the next preceding payment or payments of Base Rentals. To the extent that Reserve Fund moneys are applied pursuant to paragraph (a) of this Section, the City hereby agrees to pay to the Trustee for deposit in the Reserve Fund, as Additional Rentals, such amounts as are required to restore the amount on deposit in the Reserve Fund to the Reserve Fund Requirement, over a period of not less than twelve (12) months in twelve (12) substantially equal payments. If amounts on deposit in the Reserve Fund shall be less than the applicable Reserve Fund Requirement due to a decrease in the market value of the Permitted Investments on deposit in the Reserve Fund, such deficiency shall be made up from Additional Rentals over a period of not more than four (4) months, in four (4) substantially equal payments. Section 3.09. Creation of the Extraordinary Redemption Fund. There is hereby created and established with the Trustee the "City of Pueblo, Colorado, Parking Facilities Lease 02166511.6 17 Purchase and Sublease Agreement, Extraordinary Redemption Fund" (the "Extraordinary Redemption Fund ") into which shall be deposited all Extraordinary Revenues which are to be applied for the redemption of the Certificates on the first Business Day for which notice of redemption may be given. Moneys on deposit in the Extraordinary Redemption Fund shall be disbursed for redemption of the Certificates as provided in Section 4.01 of this Indenture. Any income from investment of moneys in the Extraordinary Redemption Fund shall be deposited into the Certificate Fund. Section 3.10. Creation of the Construction Fund. A special fund is hereby created and established with the Trustee to be designated "City of Pueblo, Colorado, Parking Facilities Lease Purchase and Sublease Agreement, Construction Fund" (the "Construction Fund "). The balance of the proceeds of the sale of the Certificates remaining after the discount paid to the Original Purchaser, the amount required to be deposited to the Reserve Fund and the deduction provided by Section 3.03(a) of this Indenture have been made, shall be deposited into the Construction Fund. Any moneys held as part of the Construction Fund shall be invested and reinvested by the Trustee in accordance with Article V of this Indenture, and the income therefrom shall be retained in the Construction Fund and used to pay Costs of Construction, except to the extent necessary to be deposited to the Rebate Fund. Moneys held in the Construction Fund shall be disbursed in accordance with the provisions of Section 7.02 of the Lease. The Trustee shall keep and maintain adequate records pertaining to the Construction Fund and all disbursements therefrom as reasonably directed by the City. After the Project has been completed and the certificate completed and received as required by Section 7.03 of the Lease, and after any amounts in the Construction Fund are deposited to the Certificate Fund or Extraordinary Redemption Fund, as provided in Section 3.11 of this Indenture, the Trustee shall file an accounting thereof with the City. Section 3.11. Application of Construction Fund Subsequent to Completion of Construction. Upon receipt of the certificate required by Section 7.03 of the Lease as to the completion of the Project, the Trustee shall retain in the Construction Fund a sum equal to the amount estimated by the City Representative to be necessary for payment of the Cost of Construction not then due and payable. The balance, if any, remaining in the Construction Fund shall be deposited in the Principal Account of the Certificate Fund and applied to the next payment or payments of principal portions of the Base Rentals or, at the instruction of the City, shall be deposited to the Extraordinary Redemption Fund. Section 3.12. Creation of the Expenses Fund. There is hereby created and established with the Trustee the "City of Pueblo, Colorado, Parking Facilities Lease Purchase Agreement, Expenses Fund" (the "Expenses Fund "). Within the Expenses Fund there are hereby created and ordered established an Extraordinary Expenses Account and an Insurance Account, which shall be used as hereinafter set forth. Income from the investment of moneys in the Reserve Fund, if any, shall be deposited into the Expenses Fund under certain circumstances as set forth in Section 3.08 of this Indenture. Any moneys held in each account of the Expenses Fund shall be invested and 02166511.6 18 reinvested by the Trustee in accordance with Article V of this Indenture. Income derived from the investment of the Extraordinary Expenses Account shall be retained in such account to the extent the amount on deposit therein is less than $25,000, and any remaining income shall be deposited in the Interest Account of the Certificate Fund. Income derived from the investment of the Insurance Account shall be retained in such account to the extent the amount on deposit therein is less than $25,000, and any remaining income shall be deposited in the Interest Account of the Certificate Fund. Moneys held in the Extraordinary Expenses Account, including income derived from the investment thereof, shall be used to reimburse the Trustee and the Corporation, respectively, for costs, expenses, outlays, counsel fees and other reasonable disbursements incurred by the Trustee or Corporation by reason of any litigation pertaining to the Project in which the Trustee or the Corporation is named as a defendant; and for any costs, expenses, outlays, counsel fees and other reasonable disbursements incurred by the Trustee by reason of a Termination Event. Moneys held in the Insurance Account, including income derived from the investment thereof, shall be used by the Trustee, both during the Lease Term and after a Termination Event, to maintain current payments of premiums for the casualty and property damage insurance on the Project required by the Lease, if and to the extent such premiums are not otherwise paid by the City. Section 3.13. Creation of Special Construction Fund. Upon direction of the City, there shall be created and established with the Trustee the "Special Construction Fund" pursuant to Section 7.01 of the Lease. Amounts deposited therein by the City shall be expended solely for the purchase of moveable personal property for use in or on the Project or for the purpose of paying any other expense related to the leasehold estate of the City, which in the opinion of nationally- recognized municipal bond counsel, shall not adversely affect the validity and enforceability of the Lease. Section 3.14. Nonpresentment of Cert'if'icates. In the event any Certificate shall not be presented for payment when due, if funds sufficient to pay such Certificate shall have been made available to the Trustee for the benefit of the Registered Owner thereof, it shall be the duty of the Trustee to hold such funds for a period of six years, without liability for interest thereon, for the benefit of the Registered Owner of such Certificate, who shall be restricted exclusively to such funds for any claim of whatever nature on his or her part under the Lease or this Indenture or on or with respect to such Certificate. Any unclaimed funds remaining after the expiration of the six year period shall be returned by the Trustee to the City. Section 3.15. Reports to City. Not less than once during each calendar month (or each such other period as may hereafter be agreed upon between the City and the Trustee), the Trustee shall provide the City with an accounting for all receipts to and disbursements from the funds or accounts created hereunder. 02/66511.6 19 Section 3.16. Repayment to the City from the Trustee. Upon a discharge and a defeasance of the Certificates and this Indenture pursuant to Article VI of this Indenture, any amounts remaining in the Certificate Fund, the Construction Fund, the Reserve Fund, the Extraordinary Redemption Fund, the Expense Fund or otherwise held by the Trustee pursuant thereto, except the Rebate Fund, shall be paid to the City as a return of an overpayment of Base Rentals. Section 3.17. Rebate Fund. The Rebate Fund is hereby created and established with the Trustee as a separate trust fund, which shall be expended in accordance with the provisions hereof and the Investment Instructions. The Trustee shall make deposits and disbursements from the Rebate Fund in accordance with the Investment Instructions, shall invest the Rebate Fund pursuant to said Investment Instructions and shall deposit income from such investments immediately upon receipt thereof in the Rebate Fund, all as directed by the City in the Investment Instructions. The City shall calculate the deposits, disbursements and investments required by the Investment Instructions and the City shall attach a report summarizing such calculations to any directions given by the City to the Trustee. Section 3.18. Rebate Deposits. The Trustee shall annually make the Rebate Deposit described in the Investment Instructions as directed by the City. The City shall attach a report summarizing the calculation of the amount of such Rebate Deposit and setting forth the basis for such calculation. If a withdrawal from the Rebate Fund is permitted as a result of such computation, the amount withdrawn shall be deposited in the Certificate Fund for the benefit of the City. Records of the determinations required by this Section and the Investment Instructions must be retained by the Trustee until six (6) years after the final retirement of the Certificates. Section 3.19. Rebate Disbursements. Not later than sixty (60) days after the end of the fifth Certificate Year (sixty (60) days after July 1, 2000) and every five (5) years thereafter, the Trustee shall pay to the United States of America (but only from funds provided by the City) ninety percent (90%) of the amount required to be on deposit in the Rebate Fund as of such payment date. Not later than sixty (60) days after the final retirement of the Certificates (whether at maturity or upon redemption or acceleration or otherwise), the Trustee shall pay to the United States of America (but only from funds provided by the City) one hundred percent (100 %) of the balance remaining in the Rebate Fund. Each payment required to be paid to the United States of America pursuant to this Section shall be filed with the Internal Revenue Service Center, Philadelphia, Pennsylvania 19255. Each payment shall be accompanied by a Form 8038 -T and, if necessary, a statement summarizing the determination of the amount to be paid to the United States of America. 02166511.6 20 ARTICLE IV REDEXIMON OF CERTIFICATES Section 4.01. Redemption Dames and Prices. The Certificates are subject to redemption as set forth below: (a) The Certificates shall be called for redemption, in whole only, on any date in the event of, and to the extent that moneys are actually received by the Trustee from, the exercise by the City of its option to purchase the Project, as provided in the Lease, upon payment of the then applicable Purchase Option Price, at a redemption price equal to the principal amount of the Certificates being redeemed, plus accrued interest to the redemption date; provided, however, that paragraph (b) below, and not this paragraph (a), shall apply in the event that the Purchase Option Price is paid from moneys borrowed by the City or derived from any installment purchase or lease purchase financing by the City. (b) In the event that the Purchase Option Price is paid from moneys borrowed by the City or derived from any installment purchase or lease purchase financing by the City, the Certificates maturing on or before July 1999 shall not be callable for redemption prior to maturity; and the Certificates maturing on or after July 1, 2000, shall be callable for redemption prior to maturity, at the option of the City, on January 1, 2000 and on any interest payment date thereafter, in whole only, at a redemption price equal to the principal amount of the Certificate or portion thereof being redeemed, plus accrued interest to the redemption date. (c) The Certificates shall be called for redemption on any date in the event and only to the extent that Extraordinary Revenues are deposited into the Extraordinary Redemption Fund, other than as provided in paragraph (a) or (b) of this Section. (d) The Certificates may also be called for redemption as set forth in Section 4.02 of this Indenture. In the event that the Certificates are redeemed pursuant to (c) above, the Certificates shall be redeemed in whole, or in part in inverse order of maturity and by lot within any maturity, at a redemption price equal to the principal amount of the Certificates being redeemed plus accrued interest to the redemption date, on the first Business Day for which notice of redemption may be given. When Certificates are to be redeemed in part, the schedule of Base Rentals set forth in Exhibit B to the Lease shall be recalculated by the Trustee. Section 4.02. Redemption Upon Termination of the Lease Term by Reason of Certain Events. The Certificates are callable for redemption upon the occurrence of a Termination Event. If the Certificates are to be redeemed subsequent to a Termination Event, the Registered 02166511.6 21 Owners shall have no right to payment from the City, the Corporation or the Trustee, in redemption of their Certificates or otherwise, except as expressly set forth in this Section. Upon the occurrence of a Termination Event, the Certificates shall be payable from such moneys as may be obtained by the Trustee through the exercise of its rights under this Indenture. Upon the occurrence of a Termination Event, the Trustee shall commence proceedings for subleasing the Land and the City Portion of the Project and leasing the Certificate Portion of the Project, or the assignment of the Trustee's interest in the Certificate Portion of the Project and the leasehold interest in the Land and the City Portion of the Project as provided in Section 7.02 of this Indenture, and shall call the Certificates for redemption from and only to the extent of the Net Proceeds of such subleasing of the Land and the City Portion of the Project and leasing or assignment of the Certificate Portion of the Project and all other moneys, if any, then on hand and being held by the Trustee for the Registered Owners (including, without limitation, any Net Proceeds deposited by the City into a separate trust fund pursuant to Section 10.3(b) of the Lease) at 100% of the principal amount thereof plus accrued interest to the redemption date; (provided, however, that moneys in the Reserve Fund may be used by the Trustee to repair or modify the Project, to the extent provided in the Lease and this Indenture). In the event that such Net Proceeds of the leasing and subleasing of the Project and the Land and other moneys shall be insufficient to redeem the Certificates at 100% of the principal amount thereof plus accrued interest to the redemption date, then such Net Proceeds of such subleasing of the Land and the City Portion of the Project and leasing or assignment of the Certificate Portion of the Project and other moneys shall be allocated proportionately among the Certificates, according to the principal amount thereof Outstanding. In the event that such Net Proceeds of such subleasing of the Land and the City Portion of the Project and leasing or assignment of the Certificate Portion of the Project and other moneys are in excess of the amount required to redeem the Certificates then Outstanding at 100% of the principal amount thereof plus accrued interest to the redemption date, after the Certificates have been redeemed, such excess moneys shall be paid to the City. Prior to any distribution of the Net Proceeds of such subleasing of the Land and the City Portion of the Project and leasing or assignment of the Certificate Portion of the Project in redemption of the Certificates pursuant to this Section, the Trustee shall be entitled to payment of its customary fees for all services rendered in connection with such subleasing of the Land and the City Portion of the Project and leasing or assignment of the Certificate Portion of the Project, as well as reimbursement for all costs and expenses incurred thereby, from proceeds of such subleasing or assignment of the Project. If the Certificates are to be redeemed subsequent to a Termination Event from such Net Proceeds of such subleasing of the Land and the City Portion of the Project and leasing or assignment of the Certificate Portion of the Project for an amount less than the aggregate principal amount thereof plus accrued interest to the redemption date, no Registered Owner of any Certificate shall have any further claim for payment against the City, the Corporation or the Trustee. Section 4.03. Mandatory Sinking Fund Redemption. The Series 1995 Certificates are subject to mandatory sinking fund redemption on July 1, 1999 and on each July 1 thereafter to and including July 1, 2015, at a redemption price equal to the principal amount thereof with 02166511.6 22 interest accrued thereon to the date fixed for redemption, without premium, the particular Certificates to be redeemed to be selected by lot in such manner as the Trustee shall determine, in the amounts (after credit as provided below) set forth below: Year Principal Jul 1 Am unt 1996 $20,000 1997 30,000 1998 35,000 1999 35,000 2000 40,000 2001 40 2002 45 2003 50,000 2004 50,000 2005 55,000 2006 60,000 2007 65,000 2008 70,000 2009 70,000 2010 75,000 2011 85,000 2012 90,000 2013 95,000 2014 100 2015 (maturity) 110 On or before the 30th day prior to each such sinking fund payment date, the Trustee shall proceed to select by lot the Certificates for redemption from such sinking fund on the next July 1, and on the 30th day prior to each sinking fund payment date give notice of such call. At its option, to be exercised on or before the 60th day next preceding any such sinking fund redemption date, the City may (a) deliver to the Trustee for cancellation Certificates subject to mandatory sinking fund redemption as herein provided in any aggregate principal amount desired, and (b) receive a credit in respect of its sinking fund redemption obligation for any such Certificates which prior to said date have been redeemed (otherwise than through the operation of the sinking fund) and canceled by the Trustee and not theretofore applied as a credit against any sinking fund redemption obligation. Each such Certificate so delivered or previously redeemed shall be credited by the Trustee at the principal amount thereof on the obligation of the City on such sinking fund redemption date, and, to the extent of any excess, to the next annual sinking fund redemption date or dates, and the principal amount of Certificates to be redeemed by operation of such sinking fund on such date or dates shall be accordingly reduced. 02166511.6 23 Section 4.04. Notice of Redemption. Notice of the call for any redemption, identifying the Certificates or portions thereof to be redeemed and specifying the terms of such redemption, shall be given by the Trustee, upon being satisfactorily indemnified as to expenses, by mailing a copy of the redemption notice by registered or certified mail at least 30 days and not more than 60 days prior to the date fixed for redemption to the Registered Owner of each Certificate to be redeemed at the address shown on the registration books; provided, however, that failure to give such notice by mailing, or any defect therein, shall not affect the validity of any proceedings for the redemption of Certificates as to which no such failure has occurred. Any notice mailed as provided in this Section shall be conclusively presumed to have been duly given, whether or not the Registered Owner receives the notice. If at the time of mailing of notice of redemption there shall not have been deposited with the Trustee moneys sufficient to redeem all the Certificates called for redemption, which moneys are or will be available for redemption of Certificates, such notice will state that it is conditional upon the deposit of the redemption moneys with the Trustee not later than the opening of business on the redemption date, and such notice shall be of no effect unless such moneys are so deposited. Section 4.05. Redemption Payments. Prior to the date fixed for redemption, funds shall be deposited with the Trustee to pay, and the Trustee is hereby authorized and directed to apply such funds to the payment of, the Certificates called, together with accrued interest thereon to the redemption date, and any required premium. Upon the giving of notice and the deposit of such funds as may be available for redemption pursuant to this Indenture (which, in the case of redemption pursuant to Section 4.02 above, may be less than the full principal amount of the Outstanding Certificates and accrued interest thereon to the redemption date), interest on the Certificates or portions thereof thus called shall no longer accrue after the date fixed for redemption. The Trustee shall pay to the Registered Owners of Certificates so redeemed, the amounts due on their respective Certificates, at the principal corporate trust office of the Trustee upon presentation and surrender of the Certificates; provided, however, that, if redeemed in part, the Certificates may be redeemed only in multiples of $5,000 and all remaining Certificates must be in denominations of $5,000 and any integral multiple thereof. Redemption payments shall be accompanied by a written designation prepared by the Trustee stating the portion of the payment representing the unpaid principal amount of the Certificate immediately prior to the payment, the portion of the payment representing interest, and the remaining portion, if any, which shall be designated and paid as a redemption premium. Section 4.06. Cancellation. All Certificates which have been redeemed shall not be reissued but shall be canceled and cremated or otherwise destroyed by the Trustee in accordance with Section 2.10 hereof. M/66511.6 24 Section 4.07. Delivery of New Certificates Upon Partial Redemption of Certificates. Upon surrender and cancellation of the Certificates for redemption in part only, a new Certificate or Certificates of the same maturity and of authorized denomination in an aggregate principal amount equal to the unredeemed portion thereof, shall be executed on behalf of and delivered by the Trustee. The expenses of such execution, delivery and exchange shall be paid by the City as Additional Rentals under the Lease. ARTICLE V INVESTMENTS Section 5.01. Investment of Moneys. All moneys held as part of the Certificate Fund, the Construction Fund, the Reserve Fund, the Extraordinary Redemption Fund, the Expense Fund, the Rebate Fund or any other fund or account created hereunder or under the Lease shall be deposited or invested and reinvested by the Trustee, in accordance with the provisions of the Investment Instructions and this Indenture, in Permitted Investments; provided, however, that notwithstanding anything to the contrary contained in this Indenture, the Trustee shall make no deposits or investments of any fund or account created hereunder which shall interfere with or prevent withdrawals for payment of the Certificates at or before maturity or interest thereon as required hereunder; and provided further, however, that all amounts representing accrued and capitalized interest, if any, on the Certificates shall be held by the Trustee in the Certificate Fund, pledged solely to the payment of interest on the Certificates, and invested only in Permitted Investments described in subparagraphs (a) and (g), as such term is defined in Article I of this Indenture. If the amount on deposit in the Reserve Fund shall be less than the Reserve Fund Requirement, the City shall pay the amount of such deficiency to the Trustee as an Additional Rental as set forth in the Lease and, upon receipt, the Trustee shall deposit such payment in the Reserve Fund. All investments and reinvestments of any amounts pursuant to this Indenture or the Lease shall be made in compliance with the requirements of the Investment Instructions, unless the Trustee shall receive an opinion of nationally recognized municipal bond counsel acceptable to the City and the Trustee to the effect that an alternate investment or reinvestment shall not adversely affect the exclusion from gross income or alternative minimum taxable income, for purposes of federal income taxation, of interest on the Certificates, in which case such investment or reinvestment shall be made in accordance with such opinion. Any and all such deposits or investments shall be held by or under the control of the Trustee. The Trustee may make any and all such deposits or investments through its own investment department or the investment department of any bank or trust company under common control with the Trustee. The Trustee is specifically authorized to enter into agreements with itself or any other person, which agreements guarantee the repurchase of specific Permitted Investments at specific prices and provided that such Permitted Investments are held by a third party during the term thereof. Income from deposits or investments of moneys in the Reserve Fund shall be deposited in the Expenses Fund or the Certificate Fund under certain circumstances as provided in Section 3.08 of this Indenture; income from deposits or investments of moneys in the Extraordinary Redemption Fund shall be deposited into the 02166511.6 25 Certificate Fund, as provided in Section 3.09 of this Indenture; and income from deposits or investments of moneys in each account of the Expenses Fund shall be deposited into the Certificate Fund under certain circumstances as provided in Section 3.12 of this Indenture; otherwise, deposits or investments shall at all times be a part of the fund or account from which the moneys used to acquire such deposits or investments shall have come, and all income and profits on such deposits or investments shall be credited to, and losses thereon shall be charged against, such fund or account. In computing the amount in any fund or account held under the provisions of this Indenture, obligations purchased as a deposit or investment of moneys therein shall be valued at the cost or market price thereof, whichever is lower, exclusive of accrued interest. With respect to all funds and accounts, valuation shall occur annually, except in the event of a withdrawal from the Reserve Fund, whereupon obligations therein shall be valued immediately after such withdrawal. The Trustee shall sell and reduce to cash a sufficient amount of such deposits or investments whenever the cash balance in any fund or account created hereunder is insufficient to satisfy the purposes of such fund or account. Section 5.02. Arbitmge Certification. In reliance on the direction of investments by the City as provided in Section 5.01 of this Indenture, and in reliance on the covenants of the City in Section 11.07 of the Lease, the Trustee certifies and covenants to and for the benefit of the Registered Owners that so long as any of the Certificates remain Outstanding, moneys in any fund or account held by the Trustee under this Indenture, whether or not such moneys were derived from the proceeds of the sale of the Certificates or from any other source, will not be knowingly deposited or invested in a manner which will cause the Certificates to be classified as "arbitrage bonds" within the meaning of Section 148 of the Code. ARTICLE VI DISCHARGE OF INDENTURE If, when the Certificates secured hereby shall become due and payable in accordance with their terms or otherwise as provided in this Indenture, the whole amount of the principal of, premium, if any, and interest due and payable upon all of the Certificates shall be paid (or, in the case of redemption of the Certificates pursuant to Section 4.01(d) of this Indenture, if full or partial payment of the Certificates and interest thereon is made as provided in Section 4.02 of this Indenture), or provision shall have been made for the payment of the same, together with all other sums payable hereunder, then the right, title and interest of the Trustee in and to the Trust Estate and all covenants, agreements and other obligations of the Corporation and the City to the Trustee and the Registered Owners shall thereupon cease, terminate and become void and be discharged and satisfied. In such event, upon the request of the City, the Trustee and the Corporation shall transfer and convey to the City all property assigned, pledged or mortgaged to the Trustee by the Corporation then held by the Corporation or by the Trustee pursuant to this Indenture, and the Corporation and the Trustee shall execute such documents as may be reasonably required by the City and shall turn over to the City any surplus in any fund created under this Indenture except the Rebate Fund. 02!66511.6 26 All Outstanding Certificates shall, prior to the maturity or redemption date thereof, be deemed to have been paid within the meaning and with the effect expressed in this Article if, (a) in case said Certificates are to be redeemed on any date prior to their maturity, the City shall have given to the Trustee irrevocable instructions, in form and substance satisfactory to the Trustee, to give, on a date in accordance with the provisions of Section 4.04 hereof, notice of redemption of such Certificates on said redemption date, such notice to be given in accordance with the provisions of Section 4.04 hereof, (b) there shall have been deposited with the Trustee either moneys in an amount which shall be sufficient, or Federal Securities which shall not contain provisions permitting the redemption thereof at the option of the issuer, the principal of and the interest on which when due, and without any reinvestment thereof, will provide moneys which, together with the moneys, if any, deposited with or held by the Trustee at the same time, shall be sufficient to pay when due the principal of, premium, if any, and interest due and to become due on said Certificates on and prior to the redemption date or maturity date thereof, as the case may be, and (c) in the event said Certificates are not by their terms subject to redemption within the next 60 days, the City shall have given the Trustee irrevocable instructions, in form and substance satisfactory to the Trustee, to give, as soon as practicable in the same manner as the notice of redemption is given pursuant to Section 4.04 hereof, a notice to the Registered Owners of such Certificates that the deposit required by (b) above has been made with the Trustee and that said Certificates are deemed to have been paid in accordance with this Article VI and stating such maturity or redemption date upon which moneys are to be available for the payment of the principal of, premium, if any, and interest on said Certificates. Neither the Federal Securities nor moneys deposited with the Trustee pursuant to this Article, or principal or interest payments on any such Federal Securities shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the principal of, premium, if any, and interest on said Certificates; provided any cash received from such principal or interest payments on such Federal Securities deposited with the Trustee, if not then needed for such purpose, shall, to the extent practicable, be reinvested in Federal Securities of the type described in clause (b) of the first sentence of this paragraph maturing at the times and in amounts sufficient to pay when due the principal of, premium, if any, and interest to become due on said Certificates on or prior to such redemption date or maturity date thereof, as the case may be. At such time as any Certificates shall be deemed paid as aforesaid, such Certificates shall no longer be secured by or entitled to the benefits of this Indenture, the Lease and the Ground Lease, except for the purpose of exchange and transfer and any payment from such moneys or Federal Securities deposited with the Trustee. The release of the obligations of the Corporation under this Article shall be without prejudice to the rights of the Trustee to be paid reasonable compensation for all services rendered by it hereunder and all its reasonable expenses, charges and other disbursements incurred with respect to the administration of the trust hereby created and the performance of its powers and duties hereunder. 02/66511.6 27 ARTICLE VII DEFAULTS AND REMEDIES Section 7.01. Events of Defauk. If any of the following events occur it is hereby defined as and shall be deemed an "Event of Default" under this Indenture: (a) default by the City or the Corporation in the due and punctual payment of interest on any Certificate or in the due and punctual payment of the principal or premium, if any, on any Certificate, whether at the stated maturity thereof, or upon proceedings for redemption thereof, or upon acceleration thereof by declaration; (b) The occurrence of a Termination Event; or (c) The occurrence of an Event of Default as provided in Section 14.01 of the Lease. Section 7.02. Remedies on Default. Upon the occurrence of an Event of Default described in Section 7.01(b) of this Indenture, the Trustee shall terminate the Lease Term, shall become entitled to possession of the Project, and shall give notice to the City to vacate the Project as provided in Sections 6.06 and 14.02 of the Lease, as the case may be; and in the case of any Event of Default the Trustee may, or as provided in Section 7.03 of this Indenture, shall, without any further demand or notice, take one or any combination of the following additional remedial steps: (a) The Trustee may lease the Certificate Portion of the Project and sublease the Land and the City Portion of the Project or any portion thereof, to the highest responsible bidder, all for the benefit of the Registered Owners. Any such lease and sublease shall be conditioned, however, on an agreement by the lessee /sublessee or assignee to use the Land and the Project in a manner permitted by the EPA Grant and applicable zoning restrictions and compatible with other uses in the area immediately surrounding the Land. (b) The Trustee, on behalf of the Corporation, may recover from the City: (i) the portion of Base Rentals and Additional Rentals which would otherwise have been payable under the Lease allocable to any period in which the City continues to occupy the Project; and (ii) Base Rentals and Additional Rentals which would otherwise have been payable by the City under the Lease during the remainder, after the City vacates the Project, of the Original or Renewal Term in which such Event of Default occurs; provided, however, that if the Trustee does not proceed to foreclose and sell the Project and assign its interest in the Ground Lease M166511.6 28 reasonably promptly after such Event of Default, the Trustee shall be obligated to the City to use its best efforts to lease and sublease the Project and the Land for the remainder of such Original or Renewal Term, as provided in paragraph (a) of this Section 7.02, and the Net Proceeds of such leasing and subleasing shall be offset against the amount recoverable from the City under this paragraph (ii). (c) The Trustee may take whatever action at law or in equity may appear necessary or desirable to enforce its rights in and to the Project and the Land under the Lease, the Ground Lease and this Indenture. No right or remedy is intended to be exclusive of any other rights or remedies, but each and every such right or remedy shall be cumulative and in addition to any other remedy given hereunder or now or hereafter existing at law or in equity or by statute. However, notwithstanding any other provision of the Lease or this Indenture, any and all remedies against the City under the Lease or this Indenture shall be limited as provided in Section 14.03 of the Lease. If any Event of Default shall have occurred and if requested by the Registered Owners of a majority in aggregate principal amount of Certificates then Outstanding and indemnified as provided in Section 8.01(m) hereof, the Trustee shall be obligated to exercise such one or more of the rights and powers conferred by this Section 7.02 as the Trustee, being advised by counsel, shall deem most expedient in the interests of the Registered Owners. Section 7.03. Mgjortty of Registered Owners May Control Proceedings. Anything in this Indenture to the contrary notwithstanding, the Registered Owners of a majority in aggregate principal amount of the Certificates then Outstanding, shall have the right, at any time, by an instrument or instruments in writing executed and delivered to the Trustee, to direct the time, method and place of conducting all proceedings to be taken in connection with the enforcement of the terms and conditions of this Indenture, or for the appointment of a receiver, and any other proceedings hereunder; provided that such direction shall not be otherwise than in accordance with the provisions hereof. The Trustee shall not be required to act on any direction given to it pursuant to this Section until the indemnity described in Section 8.01(m) of this Indenture is furnished to it by such Registered Owners. Section 7.04. Rights and Remedies of Registered Owners. No Registered Owner shall have any right to institute any suit, action or proceeding in equity or at law for the enforcement of this Indenture or for the execution of any trust hereof or for the appointment of a receiver or any other remedy hereunder, unless (a) a default has occurred of which the Trustee has been notified as provided in Section 8.01(h) of this Indenture, or of which by said Section 8.01(h) it is deemed to have notice; (b) such default shall have become an Event of Default as defined in Section 7.01 of this Indenture; (c) the Registered Owners of not less than a majority in aggregate principal amount of Certificates then Outstanding shall have made written request to the Trustee and shall have offered reasonable opportunity either to proceed to exercise the powers hereinbefore granted or to institute such action, suit or proceedings in its own name; (d) such 02166511.6 29 Registered Owners of the Certificates shall have offered to the Trustee indemnity as provided in Section 8.01(m) hereof; and (e) the Trustee shall thereafter fail or refuse to exercise the powers hereinbefore granted, or to institute such action, suit or proceeding in its own name. The foregoing conditions are hereby declared in every case to be conditions precedent to the execution of the powers and trusts of this Indenture, and to any action or cause of action for the enforcement of this Indenture, or for the appointment of a receiver or for any other remedy hereunder; it being understood and intended that no one or more Registered Owners shall have any right in any manner whatsoever to affect, disturb or prejudice the lien of this Indenture by any action or to enforce any right hereunder except in the manner herein provided and that all proceedings at law or in equity shall be instituted, had and maintained in the manner herein provided and for the equal benefit of the Registered Owners of all Certificates then Outstanding. Nothing contained in this Indenture shall, however, affect or impair the right of any Registered Owner to enforce the payment of the principal of, premium, if any, and interest on any Certificate at and after the maturity thereof. Section 7.05. Waiver of Appraisement, Valuation, Stay and Extension. The Corporation agrees, to the extent permitted by law, that in case of the occurrence of an Event of Default, neither the Corporation nor anyone claiming through or under the Corporation shall or will set up, claim or seek to take advantage of any appraisement, valuation, stay or extension laws now or hereafter in force in order to prevent or hinder the enforcement of this Indenture, or the absolute sale of the Trust Estate, or the final and absolute putting into possession thereof, immediately after such sale, of the purchasers thereat; and the Corporation, for itself and all who may at any time claim through or under the Corporation, hereby waives, to the full extent that it may lawfully do so, the benefit of all such laws, and any and all right to have the estates comprised in the security intended to be hereby created and marshalled upon any foreclosure of the lien hereof and agrees that the Trustee or any court having jurisdiction to foreclose such lien may assign the Trustee's interest in the Land and the Project as an entirety; provided, however, that the Corporation, for itself and all who may at any time claim through or under the Corporation, shall retain all rights of redemption. Section 7.06. Trustee May Enforce Rights Without Certificates. All rights of action and claims under this Indenture or any of the Certificates Outstanding hereunder may be enforced by the Trustee without the possession of any of the Certificates or the production thereof in any trial or proceedings relative thereto; and any suit or proceeding instituted by the Trustee shall be brought in its name as the Trustee, without the necessity of joining as plaintiffs or defendants any Registered Owners of the Certificates, and any recovery of judgment shall be for the ratable benefit of the Registered Owners of the Certificates, subject to the provisions of this Indenture. Section 7.07. Delay or Omission No Waiver. No delay or omission of the Trustee or any Registered Owner to exercise any right or power accruing upon any default shall exhaust or impair any such right or power or shall be construed to be a waiver of any such default, or acquiescence therein; and every power and remedy given by this Indenture may be exercised from time to time and as often as may be deemed expedient. M/66511.6 30 Section 7.08. No Waiver of One Default to Affect Another. No waiver of any default hereunder, whether by the Trustee or the Registered Owners, shall extend to or affect any subsequent or any other then existing default or shall impair any rights or remedies consequent thereon. Section 7.09. Discontinuance of Proceedings on Default; Position of Patties Restored. In case the Trustee or the Registered Owners shall have proceeded to enforce any right under this Indenture and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely to the Trustee or the Registered Owners, then and in every such case the Corporation, the City, the Trustee and the Registered Owners shall be restored to their former positions and rights hereunder with respect to the Trust Estate, and all rights, remedies and powers of the Trustee and the Registered Owners shall continue as if no such proceedings had been taken. Section 7.10. Waivers of Events of Default. The Trustee may in its discretion waive any Event of Default hereunder and its consequences, and notwithstanding anything else to the contrary contained in this Indenture shall do so upon the written request of the Registered Owners of two -thirds in aggregate principal amount of all the Certificates then Outstanding; provided, however, that there shall not be waived without the consent of the Registered Owners of 100% of the Certificates then Outstanding as to which the Event of Default exists (a) any Event of Default in the payment of the principal of or premium on any Outstanding Certificates at the date of maturity specified therein or (b) any default in the payment when due of the interest on any such Certificates, unless prior to such waiver or rescission, all arrears of interest and all arrears of payments of principal and premium, if any, then due, as the case may be, and all expenses of the Trustee in connection with such default shall have been paid or provided for. In case of any such waiver, or in case any proceedings taken by the Trustee on account of any such default shall have been discontinued or abandoned or determined adversely to the Trustee, then and in every such case the Corporation, the City, the Trustee and the Registered Owners shall be restored to their former positions and rights hereunder respectively, but no such waiver or rescission shall extend to any subsequent or other default, or impair any right consequent thereon. ARTICLE VIII CONCERNING THE TRUSTEE Section 8.01. Duties of the Trustee. The Trustee hereby accepts the trusts imposed upon it by this Indenture and agrees to perform said trusts (including, without limitation, the delegation to the Trustee by the Corporation of all duties of the Corporation under the Lease), but only upon and subject to the following express terms and conditions, and any implied covenants or obligations shall be read into this Indenture against the Trustee: (a) The Trustee, prior to the occurrence of an Event of Default and after the curing of all Events of Default which may have occurred, undertakes to perform such 02166511.6 31 duties and only such duties as are specifically set forth in this Indenture. In case an Event of Default has occurred (which has not been cured or waived) the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise as a reasonable and prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. (b) The Trustee may execute any of the trusts or powers hereof and perform any of its duties by or through attorneys, agents, receivers or employees but shall be answerable for the conduct of the same in accordance with the standard specified above, and shall be entitled to act upon an Opinion of Counsel concerning all matters of trust hereof and the duties hereunder, and may in all cases pay such reasonable compensation to all such attorneys, agents, receivers and employees as may reasonably be employed in connection with the trusts hereof. The Trustee may act upon an Opinion of Counsel and shall not be responsible for any loss or damage resulting from any action or nonaction taken by or omitted to be taken in good faith in reliance upon such Opinion of Counsel. (c) The Trustee shall not be responsible for any recital herein or in the Certificates (except in respect to the execution of the Certificates on behalf of the Trustee), or for the recording or rerecording, filing or refiling of the Lease or this Indenture or of any supplements thereto or hereto or instruments of further assurance, or collecting any insurance moneys or for the validity of the execution by the Corporation of this Indenture or of any supplements hereto or instruments of further assurance, or for the sufficiency of the security for the Certificates issued hereunder or intended to be secured hereby, or for the value of or title to the Project, and the Trustee shall not be bound to ascertain or inquire as to the performance or observance of any covenants, conditions or agreements on the part of the Corporation or the City, except as provided herein; but the Trustee may require of the Corporation or the City full information and advice as to the performance of the covenants, conditions and agreements aforesaid. The Trustee shall have no obligation to perform any of the duties of the City under the Lease; and the Trustee shall not be responsible or liable for any loss suffered in connection with any investment of funds made by it in accordance with Article V hereof. (d) The Trustee shall not be accountable for the use of any Certificates authenticated or delivered hereunder. The Trustee may become the Registered Owner of the Certificates with the same rights which it would have if not the Trustee. (e) The Trustee shall be protected in acting upon any notice, request, consent, certificate, order, affidavit, letter, telegram or other paper or document believed to be genuine and correct and to have been signed or sent by the proper person or persons. Any action taken by the Trustee pursuant to this Indenture upon the request or authority or consent of any person who at the time of making such request or giving such authority or consent is the owner of any Certificate shall be conclusive and binding upon all future 02166511.6 32 I� !1i!III1� Registered Owners of the same Certificate and upon any Certificates issued in place thereof. (f) As to the existence or nonexistence of any fact or as to the sufficiency or validity of any instrument, paper or proceeding, the Trustee shall be entitled to rely upon a certificate signed on behalf of the Corporation by the Corporation Representative, or on behalf of the City by the City Representative or such other person as may be designated for such purpose by a certified resolution, as sufficient evidence of the facts therein contained, and, prior to the occurrence of a default of which the Trustee has been notified as provided in subsection (h) of this Section or of which by said subsection it is deemed to have notice, shall also be at liberty to accept a similar certificate to the effect that any particular dealing, transaction or action is necessary or expedient, but may as is advisable, but shall in no case be bound to secure the same. (g) The permissive right of th Indenture shall not be construed as a duty other than its negligence or willful default. Trustee to do things enumerated in this and the Trustee shall not be answerable for (h) The Trustee shall not be required to take notice or be deemed to have notice of any default hereunder except failure by the City or the Corporation to cause to be made any of the payments to the Trustee required to be made by Article III hereof, unless the Trustee shall be specifically notified in writing of such default by the Corporation, or the City, or by the Registered Owners of at least 25% in aggregate principal amount of Certificates then Outstanding, and all notices or other instruments required by this Indenture to be delivered to the Trustee, must, in order to be effective, be delivered at the principal corporate trust office of the Trustee, and in the absence of such notice so delivered, the Trustee may conclusively assume there is no default except as aforesaid. (i) All moneys received by the Trustee shall, until used or applied or invested as herein provided, be held in trust in the manner and for the purposes for which they were received but need not be segregated from other funds except to the extent required by this Indenture or law. The Trustee shall not be under any liability for interest on any moneys received hereunder except such as may be agreed upon. 0) At any and all reasonable times the Trustee, and its duly authorized agents, attorneys, experts, engineers, accountants and representatives, shall have the right, but shall not be required, to inspect any and all of the property pledged herein, including all books, papers and records of the Corporation or the City pertaining to the Project. (k) The Trustee shall not be required to give any bond or surety in respect of the execution of the said trusts and powers or otherwise in respect of the premises. Mi66511.6 33 1 1MI (1) Notwithstanding anything in this Indenture contained, the Trustee shall have the right, but shall not be required, to demand in respect of the execution and delivery of any Certificates, the withdrawal of any cash, or any action whatsoever within the purview of this Indenture, any showings, certificates, opinions, appraisals or other information, or corporate action or evidence thereof, in addition to that by the terms hereof required, as a condition of such action by the Trustee deemed desirable for the purpose of establishing the right of the Corporation or the City to the execution and delivery of any Certificates, the withdrawal of any cash, or the taking of any other action by the Trustee. (m) Before taking any action hereunder the Trustee may require that satisfactory indemnity be furnished to it by the Registered Owners for the reimbursement of all expenses which it may incur and to protect it against all liability, except liability which may result from its negligence or willful default, by reason of any action so taken. In addition, the Trustee shall be under no obligation to lend its own Funds in connection with any action taken by the Trustee hereunder. Section 8.02. Fees and Expenses of Trustee. The Trustee shall be entitled to payment and reimbursement for its reasonable fees for its services rendered hereunder as and when the same become due and all expenses reasonably and necessarily made or incurred by the Trustee in connection with such services as and when the same become due as provided in Section 6.02 of the Lease. Section 8.03. Resignation or Replacement of Trustee. The present or any future Trustee may resign by giving written notice to the City and to the Corporation not less than 60 days before such resignation is to take effect. Such resignation shall take effect only upon the appointment of a successor qualified as provided in the third paragraph of this Section. If an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning the Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee. The present or any future Trustee may be removed at any time by an instrument in writing, executed by the Registered Owners of a majority in aggregate principal amount of the Certificates then Outstanding and delivered to the Trustee. In case the present or any future Trustee shall at any time resign or be removed or otherwise become incapable of acting, a successor may be appointed by the Registered Owners of a majority by an instrument or concurrent instruments signed by such Registered Owners, or their attorneys -in -fact duly appointed; provided that the City may, by an instrument executed by order of the City Council, appoint a successor until a new successor shall be appointed by the Registered Owners as herein authorized. The City upon making such appointment shall forthwith give notice thereof to each Registered Owner and to the Corporation, which notice may be given concurrently with the notice of resignation given by any resigning Trustee. Any successor so appointed by the City shall immediately and without further act be superseded by 0266511.6 34 a, 1 , a successor appointed in the manner above provided by the Registered Owners of a majority in aggregate principal amount of the Certificates Outstanding. Every successor shall always be a bank or trust company in good standing, qualified to act hereunder, and having a capital and surplus of not less than $50,000,000. Any successor appointed hereunder shall execute, acknowledge and deliver to the City and to the Corporation an instrument accepting such appointment hereunder, and thereupon such successor shall, without any further act, deed or conveyance, become vested with all the estates, properties, rights, powers and trusts of its predecessor in the trust hereunder with like effect as if originally named as Trustee herein; but the Trustee retiring shall, nevertheless, on the written demand of its successor, execute and deliver an instrument conveying and transferring to such successor, upon the trusts herein expressed, all the estates, properties, rights, powers and trusts of the predecessor, which shall duly assign, transfer and deliver to the successor all properties and moneys held by it under this Indenture. Should any instrument in writing from the City or the Corporation be required by any successor for a more certain vesting in and confirming to it, the said deeds, conveyances and instruments in writing shall be made, executed, acknowledged and delivered by the City or the Corporation on request of such successor. The instruments evidencing the resignation or removal of the Trustee and the appointment of a successor hereunder, together with all other instruments provided for in this Section shall be filed and /or recorded by the successor the Trustee in each recording office, if any, where this Indenture shall have been filed and /or recorded. Section 8.04. Conversion, Consolidation or Merger of Trustee. Any bank or trust company into which the Trustee or its successor may be converted or merged, or with which it may be consolidated, or to which it may sell or transfer its trust business as a whole shall be the successor of the Trustee under this Indenture with the same rights, powers, duties and obligations and subject to the same restrictions, limitations and liabilities as its predecessor, all without the execution or filing of any papers or any further act on the part of any of the parties hereto or thereto, anything herein or therein to the contrary notwithstanding. In case any of the Certificates to be issued hereunder shall have been authenticated, but not delivered, any successor Trustee may adopt the certificate of any predecessor Trustee, and deliver the same as authenticated; and, in case any of such Certificates shall not have been authenticated, any successor Trustee may authenticate such Certificates in the name of such successor Trustee. Section 8.05. Intervention by Trustee. In any judicial proceeding to which the Corporation or the City is a party and which in the opinion of the Trustee and its counsel has a substantial bearing on the interests of Registered Owners of the Certificates, the Trustee may intervene on behalf of Registered Owners of the Certificates, the Trustee may intervene on behalf of Registered Owners and shall do so if requested in writing by the Registered Owners of at least 25 % in aggregate principal amount in Certificates then Outstanding. Section 8.06. Undertaking to Provide Ongoing Disclosure. 02166511.6 35 (a) The City has undertaken to provide ongoing disclosure for the benefit of the Registered Owners of the Series 1995 Certificates (including for purposes of this Section both the beneficial owners and the Registered Owners) pursuant to Section (b)(5)(i) of Securities and Exchange Commission Rule 15c2 -12 under the Securities Exchange Act of 1934, as amended (17 CFR Part 240 § 240.15c2 -12) in Section 11.08 of the Lease, which undertaking is hereby assigned by the Lessor to the Trustee for the benefit of the Registered Owners of the Series 1995 Certificates. Such assignment is a present absolute assignment and not the assignment of a security interest. The Trustee hereby covenants and agrees that it will comply with and carry out all the provisions of Section 11.08 of the Lease applicable to the Trustee. The Lessor and the Trustee shall have no obligation to examine or review the Annual Financial Information and shall have no duty to verify the accuracy or completeness of the Annual Financial Information. (b) Notwithstanding any other provision of this Indenture, failure of the City or the Trustee to comply with Section 11.08 of the Lease shall not be considered an Event of Default under the Indenture and the rights and remedies provided by the Indenture upon the occurrence of an Event of Default shall not apply to any such failure. Section 11.08 of the Lease shall be enforceable only by specific performance, by any Registered Owner of a 1995 Certificate, or by the Trustee, on behalf of the Registered Owners of the Series 1995 Certificates, as further described in Section 11.08 of the Lease. The Lessor shall have any power or duty to enforce the obligations of the City under Section 11.08 of the Lease. (c) If the Trustee is entering into a sublease or otherwise permitting another person to use the Project following an Event of Default or Event of Nonappropriation, which person will constitute an "obligated person" for purposes of the Rule, the Trustee hereby agrees to require that such subsequent "obligated person" enter into an undertaking which complies with the Rule as a condition to being permitted to use the Project. ARTICLE IX SUPPLEMENTAL INDENTURES AND AMENDMENTS OF THE LEASE Section 9.01. Supplemental Indentures Not Requiring Consent of Registered Owners. The Trustee and the Corporation may, with the written consent of the City, but without the consent of, or notice to, the Registered Owners, enter into such indentures or agreements supplemental hereto for any one or more or all of the following purposes: (a) To add to the covenants and agreements of Corporation contained in this Indenture, other covenants and agreements to be thereafter observed by the Corporation; (b) To cure any ambiguity, or to cure, correct or supplement any defect or omission or inconsistent provision contained in this Indenture, including, but not limited 02166511.6 36 to, the grant of any interest in the Land pursuant to Section 11.04 of the Lease, or to make any provisions with respect to matters arising under this Indenture or for any other purpose if such provisions are necessary or desirable and do not adversely affect the interests of the Registered Owners; (c) To subject to this Indenture additional revenues, properties or collateral; or (d) To set forth the terms and conditions and other matters in connection with the issuance of Additional Certificates to complete the construction, acquisition and equipping of the Project (and to pay other costs reasonably related thereto), pursuant to Section 2.11 of this Indenture. Section 9.02. Supplemental Indentures Requiring Consent of Registered Owners. Exclusive of supplemental indentures covered by Section 9.01 hereof, the written consent of the City and the consent of the Registered Owners of not less than two - thirds in aggregate principal amount of the Certificates then Outstanding; provided, however, that without the consent of the Registered Owners of all the Certificates at the time Outstanding nothing herein contained shall permit, or be construed as permitting: (a) A change in the terms of redemption or maturity of the principal amount of or the interest on any Outstanding Certificate, or a reduction in the principal amount of or premium payable upon any redemption of any Outstanding Certificate or the rate of interest thereon, without the consent of the Registered Owner of such Certificate; (b) The deprivation of the Registered Owner of any Certificate then Outstanding of the lien created by this Indenture (other than as originally permitted hereby); (c) A privilege or priority of any Certificate or Certificates over any other Certificate or Certificates; or (d) A reduction in the aggregate principal amount of the Certificates required for consent to such supplemental indenture. If at any time the City or the Corporation shall request the Trustee to enter into such supplemental indenture for any of the purposes of this Section, the Trustee shall, upon being satisfactorily indemnified with respect to expenses, cause notice of the proposed execution of such supplemental indenture to be mailed by registered or certified mail to the Registered Owners of the Certificates then Outstanding at the address shown on the registration books maintained by the Trustee. Such notice shall briefly set forth the nature of the proposed supplemental indenture and shall state that copies thereof are on file at the principal corporate trust office of the Trustee for inspection by all Registered Owners. If, within 60 days or such longer period as shall be prescribed by the City following the giving of such notice, the 02166511.6 37 Registered Owners of not less than two - thirds in aggregate principal amount of the Certificates then Outstanding at the time of the execution of any such supplemental indenture shall have consented to and approved the execution thereof as herein provided, no Registered Owner shall have any right to object to any of the terms and provisions contained therein, or in the operation thereof, or in any manner to question the propriety of the execution thereof, or to enjoin or restrain the Trustee or the Corporation from executing the same or from taking any action pursuant to the provisions thereof. Section 9.03. Execution of Supplemental Indenture. The Trustee is authorized to join with the Corporation in the execution of any such supplemental indenture and to make further agreements and stipulations which may be contained therein, but the Trustee shall not be obligated to enter into any such supplemental indenture which affects its rights, duties or immunities under this Indenture. Any supplemental indenture executed in accordance with the provisions of this Article shall thereafter form a part of this Indenture; and all the terms and conditions contained in any such supplemental indenture as to any provision authorized to be contained therein shall be deemed to be part of this Indenture for any and all purposes. In case of the execution and delivery of any supplemental indenture, express reference may be made thereto in the text of the Certificates issued thereafter, if any, if deemed necessary or desirable by the Trustee. Section 9.04. Amendments, Etc., of the Lease Not Requiring Consent of Registered Owners. The Corporation and the Trustee may, with the written consent of the City, but without the consent of or notice to the Registered Owners, consent to any amendment, change or modification of the Lease as may be required (a) by the provisions of the Lease or this Indenture, (b) for the purpose of curing any ambiguity or formal defect or omission in the Lease, (c) in order to more precisely identify the Project or the Land or to add additional improvements or properties acquired in accordance with the Lease and this Indenture; (d) in connection with the issuance of Additional Certificates to complete the construction, other acquisition and equipping of the Project (and to pay costs reasonably related thereto), or (e) in connection with any other change therein which, in the judgment of the Trustee, is not to the prejudice of the Registered Owners. Section 9.05. Amendments, Etc., of the Lease Requiring Consent of Registered Owners. Except for the amendments, changes or modifications permitted by Section 9.04 hereof, neither the Corporation nor the Trustee shall consent to any other amendment, change or modification of the Lease without the giving of notice to the Registered Owners of the Certificates at the time Outstanding and the written approval or consent of the Registered Owners of not less than two - thirds in aggregate principal amount of the Certificates at the time Outstanding given and procured as provided in Section 9.02 hereof. If at any time the City and the Corporation shall request the consent of the Trustee to any such proposed amendment, change or modification of the Lease, the Trustee shall, upon being satisfactorily indemnified with respect to expenses, cause notice of such proposed amendment, change or modification to be given in the same manner as provided in Section 9.02 hereof. Such notice shall briefly set forth the nature of such proposed amendment, change or modification and shall state that copies of 02/66511.6 38 the instrument embodying the same are on file at the principal corporate trust office of the Trustee for inspection by all Registered Owners. ARTICLE X XMCELLANEOUS Section 10.01. Evidence of Signature of Registered Owners and Ownership of Certificates. Any request, consent or other instrument which this Indenture may require or permit to be signed and executed by the Registered Owners may be in one or more instruments of similar tenor, and shall be signed or executed by such Registered Owners in person or by their attorneys appointed in writing. Proof of the execution of any such instrument or of an instrument appointing any such attorney, or the ownership of Certificates shall be sufficient (except as otherwise herein expressly provided) if made in the following manner, but the Trustee may, nevertheless, in its discretion require further or other proof in cases where it deems the same desirable: (a) The fact and date of the execution by any Registered Owner or his or her attorney of such instrument may be proved by the certificate of any officer authorized to take acknowledgments in the jurisdiction in which he or she purports to act that the person signing such request or other instrument acknowledged to him or her the execution thereof, or by an affidavit of a witness of such execution, duly sworn to before a notary public. (b) The fact of the owning by any person of Certificates and the amounts and numbers of such Certificates, and the date of the owning of the same, may be proved by a certificate executed by any trust company, bank or bankers, wherever situated, stating that at the date thereof the party named therein did exhibit to an officer of such trust company or bank or to such bankers, as the property of such party, the Certificates therein mentioned, if such certificate shall be deemed by the Trustee to be satisfactory. The Trustee may, in its discretion, require evidence that such Certificates have been deposited with a bank, bankers or trust company before taking any action based on such ownership. In lieu of the foregoing the Trustee may accept other proofs of the foregoing as it shall deem appropriate. Any request or consent of the Registered Owner of any Certificate shall bind all future Registered Owners of such Certificate in respect of any thing done or suffered to be done by the City or the Trustee in accordance therewith. Section 10.02. Covenants of Corporation. The Corporation hereby covenants to the Trustee for the benefit of the Registered Owners that the Corporation will observe and comply with the covenants of quiet enjoyment contained in Article V of the Lease, with its covenant to cooperate with the Trustee in the enforcement of the Lease and with all of its representations and warranties under the Lease. The Corporation agrees that wherever in the Lease it is stated that 02166511.6 39 the Corporation will notify the Trustee, or whenever the Lease gives the Trustee some right or privilege or in any way attempts to confer upon the Trustee the ability to protect the security for payment of the Certificates, that such part of the Lease shall have the same force and effect as if it were set forth in full in this Indenture. The Corporation agrees that the Trustee as assignee of the Corporation under the Lease may enforce, in its name or in the name of the Corporation, all rights of the Corporation and all obligations of the City under the Lease, for and on behalf of the Registered Owners, whether or not the Corporation is in default under this Indenture. The Trustee and the Corporation hereby agree that the Corporation shall not be obligated to make any payments or to take any other action with respect to the Project under the Lease. Section 10.03. Inspection of the Project. The Trustee and its duly authorized agents shall have the right, on reasonable notice to the City, at all reasonable times, to examine and inspect the Project. The Trustee and its duly authorized agents shall also be permitted, at all reasonable times, to examine the books, records, reports and other papers of the City with respect to the Project. Section 10.04. Parties Interested Herein. With the exception of rights herein expressly conferred on the City, nothing in this Indenture expressed or implied is intended or shall be construed to confer upon, or to give to, any person other than, the City, the Corporation, the Trustee and the Registered Owners, any right, remedy or claim under or by reason of this Indenture or any covenant, condition or stipulation hereof; and all the covenants, stipulations, promises and agreements in this Indenture contained by and on behalf of the Corporation or the Trustee shall be for the sole and exclusive benefit of the City, the Corporation, the Trustee and the Registered Owners. Section 10.05. 7711es, Headings, Captions, Etc. The titles, captions and headings of the articles, sections and subdivisions of this Indenture have been inserted for convenience of reference only and shall in no way modify or restrict any of the terms or provisions hereof. Section 10.06. Severability. In the event any provision of this Indenture 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 10.07. Governing Law. This Indenture shall be governed and construed in accordance with the laws of the State of Colorado, without regard to conflict of laws principles. Section 10.08. Execution in Counterparts. This Indenture may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Section 10.09. Notices. All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed given when delivered or mailed by registered mail, postage prepaid, addressed as follows: if to the Corporation, the City of Pueblo, Colorado Municipal Building Corporation, One City Hall Place, Pueblo, Colorado 81003, Attention: 02166511.6 40 President; if to the City, the City of Pueblo, Colorado, One City Hall Place, Pueblo, Colorado 81003, Attention: City Manager; if to the Trustee, The Bank of Cherry Creek, N.A., 3033 East First Avenue, Denver, Colorado 80206 -5698, Attention: Corporate Trust Department; and if to the Original Purchaser, Lewis, DeRozario & Co. Incorporated, 555 Seventeenth Street, Suite 3400 Denver, CO 80202 -3934, Attention: Public Finance Department. A duplicate copy of each notice, certificate or other communication given hereunder by the Authority or the City shall also be given to the Trustee and the Original Purchaser. The Authority, the City, the Original Purchaser and the Trustee may, by notice given hereunder, designate any further or different addresses to which subsequent notices, certificates or other communications shall be sent. Section 10.10. 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 Indenture, shall be a legal holiday or a day on which banking institutions in the city in which the principal corporate trust office of the Trustee is located are authorized by law to remain closed, such payment may be made or act performed or right exercised on the next succeeding day not a legal holiday or a day on which such banking institutions are not authorized by law to remain closed with the same force and effect as if done on the nominal date provided in this Indenture. Section 10.11. Corporation, City and Trustee Representatives. Whenever under the provisions hereof the approval of the Corporation, the City or the Trustee is required, or the City, the Corporation or the Trustee is required to take some action at the request of the other, unless otherwise provided, such approval or such request shall be given for the Corporation by an Corporation Representative, for the City by the City Representative, and for the Trustee by the Trustee Representative, and the Corporation, the City and the Trustee shall be authorized to act on any such approval or request. M166511.6 41 IN WITNESS WHEREOF, the Corporation and the Trustee have caused this Indenture to be executed in their respective corporate names and their respective corporate seals to be hereto affixed and attested by their duly authorized officials or officers, all as of the date first above written. Attest: LIM Secretary Attest: By _ Title: CITY OF PUEBLO, COLORADO MUNICIPAL BUILDING CORPORATION, as Corporation President THE BANK OF CHERRY CREEK, N. A., as Trustee By Title: 02166511.6 42 STATE OF COLORADO ) ss. COUNTY OF PUEBLO ) The foregoing instrument was acknowledged before me this day of November 1995, by Billy G. Martin and by Fay B. Kastelic, as President and Secretary, respectively, of the City of Pueblo, Colorado Municipal Building Corporation, a Colorado nonprofit corporation. WITNESS MY HAND AND OFFICIAL SEAL. My commission expires: STATE OF COLORADO ) ss. COUNTY OF PUEBLO ) Notary Public for the State of Colorado The foregoing instrument was acknowledged before me this _st day of November 1995, by , and by , as and respectively, of The Bank of Cherry Creek, N.A. , a national banking association. WITNESS MY HAND AND OFFICIAL SEAL. My commission expires: 11/29/89 Notary Public for the State of Colorado 02/66511.6 43 EXHIBIT A THIS CERTIFICATE MAY BE TRANS ONLY TO AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501 UNDER REGULATION D OF THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY SUBSEQUENT RULE OF SIMILAR IMPORT FROM TIME TO TIME IN EFFECT. CERTIFICATE OF PARTICIPATION Evidencing Assignment of a Proportionate Undivided Interest in Rights to Receive Certain Revenues Pursuant to the Lease Purchase and Sublease Agreement Between the CITY OF PUEBLO, COLORADO MUNICIPAL BUILDING CORPORATION, as Lessor, and the CITY OF PUEBLO, COLORADO, as Lessee No. R- $ INTEREST RATE: MATURITY DATE: ORIGINAL ISSUE DATE: CUSIP: July 1, November 15, 1995 Registered Owner: PRINCIPAL SUM: DOLLARS THIS CERTIFIES THAT THE Registered Owner (named above), or registered assigns, has a proportionate undivided interest in rights to receive certain revenues, as described below, pursuant to an annually renewable Lease Purchase and Sublease Agreement, dated as of November 15, 1995 (which agreement as from time to time amended is referred to herein as the "Lease "), between the CITY OF PUEBLO, COLORADO MUNICIPAL BUILDING CORPORATION, a Colorado nonprofit corporation, as lessor (the "Corporation "), and the CITY OF PUEBLO, COLORADO (the "City "), as lessee. The interest of the Registered Owner of this Certificate of Participation (this "Certificate ") is secured as provided in the Lease and in the Mortgage and Indenture of Trust, dated as of November 15, 1995 (which indenture as from time to time amended is herein referred to as the "Indenture "), between the Corporation and The Bank of Cherry Creek, N.A., a national banking association, as trustee, or its successor (the "Trustee ") for the Registered Owners of the Certificates (the "Registered Owners "), whereby the rights (with certain exceptions) of the Corporation as lessor and sublessor under the Lease have been assigned by the Corporation to the Trustee for the benefit of the Registered Owners. 02/66511.6 A -1 Under the Indenture, the Corporation has also granted to the Trustee, for the benefit of the Registered Owners, a leasehold mortgage on and a security interest in the Project (as hereinafter defined). Pursuant to the Lease and the Indenture, the Registered Owner hereof is entitled to receive, solely out of and to the extent available from the sources hereinafter identified, on the Maturity Date (stated above) (or earlier as hereinafter provided), the Principal Sum (stated above), and interest thereon as described in the Indenture at the Interest Rate (stated above) per annum payable commencing on July 1, 1996, and semiannually thereafter on January 1 and July 1 in each year. Principal of and any premium on this Certificate are payable in lawful money of the United States of America upon presentation and surrender thereof at the principal corporate trust office of the Trustee located in Denver, Colorado, or its successor; and interest on this Certificate is payable to the Registered Owner hereof by check or draft of the Trustee, or its successor, to be mailed to such Registered Owner, on or before each interest payment date (or, if such interest payment date is not a Business Day, as defined in the Indenture, on or before the next succeeding Business Day), at his or her address as it last appears in the registration books kept by the Trustee. REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS CERTIFICATE SET FORTH ON THE REVERSE HEREOF WHICH SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH HEREIN. This Certificate shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Lease, until executed on behalf of the Trustee. IN WITNESS WHEREOF, this Certificate has been executed on behalf of the Trustee and authenticated on behalf of the City, all as of the date set forth below. Dated: THE BANK OF CHERRY CREEK, N. A., as Trustee By (Manual Signature) Authorized Representative 02/66511.6 A -2 CERTIFICATE OF AUTHENTICATION This is one of the Certificates of Participation evidencing a proportionate interest in rights to receive certain revenues pursuant to the within - mentioned Lease and Indenture. (FACSIMILE OF THE CITY'S SEAL) CITY OF PUEBLO, COLORADO U President of the City Council Attest: By City Clerk (FACSIMILE OF THE CORPORATION'S SEAL) CITY OF PUEBLO, COLORADO MUNICIPAL BUILDING CORPORATION LIM President Attest: LIM Secretary 02/66511.6 A -3 [BACK OF CERTIFICATE] CERTIFICATE OF PARTICIPATION EVIDENCING ASSIGNMENT OF A PROPORTIONATE UNDIVIDED INTEREST IN RIGHTS TO RECEIVE CERTAIN REVENUES PURSUANT TO THE LEASE PURCHASE AND SUBLEASE AGREEMENT BETWEEN THE CITY OF PUEBLO, COLORADO MUNICIPAL BUILDING CORPORATION, AS LESSOR, AND THE CITY OF PUEBLO, COLORADO, AS LESSEE This Certificate is one of an issue of Certificates evidencing assignments of proportionate undivided interests in rights to receive certain Revenues, as described below, pursuant to the Lease and the Indenture, issued in an aggregate principal amount of $1,220,000 pursuant to the Indenture for the purpose, among others, of providing funds to finance the acquisition, construction and equipping of a parking facility (the "Project "), on a certain parcel of land (the "Land ") owned by the City and leased to the Corporation pursuant to that certain Ground Lease Agreement, dated as of November 15, 1995 (the "Ground Lease "), between the City, as lessor thereunder, and the Corporation, as lessee thereunder. Under the Lease, the Project has been leased by the Corporation to the City and the Land has been subleased by the Corporation to the City; and the City has agreed to pay directly to the Trustee semiannual rental payments (the "Base Rentals ") in consideration for its right to use the Project and the Land, the proceeds of which are required by the Indenture to be distributed by the Trustee to the payment of the principal of, premium, if any, and interest on the Certificates. In addition to the Base Rentals, the City has agreed to make certain other payments (the "Additional Rentals ") sufficient to pay the fees and expenses of the Trustee, certain insurance premiums, taxes, utility charges, costs of maintenance and repair, payments to the Reserve Fund and the Rebate Fund (as defined in the Lease) and other expenses expressly required to be paid by the City under the Lease. The Lease is subject to annual renewal at the option of the City. The obligation of the City to pay Base Rentals and Additional Rentals under the Lease will terminate in the event that the City, for any reason, fails to budget and appropriate, specifically with respect to the Lease, moneys to pay all Base Rentals and reasonably estimated Additional Rentals during the next occurring renewal term of the Lease. In the event that the Lease Term (as defined in the Lease) is terminated by the City as set forth above (herein referred to as an "Event of Nonappropriation ") or is terminated by reason of an Event of Default (as defined in the Lease), the principal amount of this Certificate and interest hereon will be payable from such moneys, if any, as may be available for such purpose, including any moneys received by the Trustee from subleasing the Land or any portion thereof, or leasing, subleasing or assigning its interest in the Project. Under certain circumstances, this Certificate and the interest hereon may also be 02166511.6 A -4 payable from the Net Proceeds (as defined in the Lease) of title or casualty insurance policies, performance bonds of contractors for the Project, or condemnation awards, or from Net Proceeds received as a consequence of default under certain construction contracts. The Lease Term may also be terminated in the event that the City shall exercise its option to purchase the Project by making payment of the Purchase Option Price (as defined in the Lease). In the event that the City shall pay the Purchase Option Price, the proceeds thereof are required to be used to pay the principal of, premium, if any, and interest on the Certificates. It is provided in the Indenture that there may hereafter be issued additional Certificates ( "Additional Certificates ") from time to time under certain terms and conditions, and if issued, such Additional Certificates will be equally and proportionately secured under and entitled to the protection given by the Indenture with the Certificates. Reference is hereby made to the Lease and the Indenture for a description of the rights, duties and obligations of the City, the Corporation, the Trustee and the Registered Owners, the terms upon which Additional Certificates may be issued, the terms upon which the Certificates and any Additional Certificates are secured, the terms and conditions upon which the Certificates will be deemed to be paid at or prior to maturity or redemption of the Certificates upon the making of provisions for the full or partial payment thereof, and the rights of the Registered Owners upon the occurrence of an Event of Default or an Event of Nonappropriation. NEITHER THE LEASE NOR THE CERTIFICATES CONSTITUTES A GENERAL OBLIGATION OR OTHER INDEBTEDNESS OF THE CITY WITHIN THE MEANING OF ANY CONSTITUTIONAL, STATUTORY OR CHARTER DEBT LIMITATION. NEITHER THE LEASE, THE INDENTURE NOR THE CERTIFICATES HAVE DIRECTLY OR INDIRECTLY OBLIGATED THE CITY TO MAKE ANY PAYMENTS BEYOND THOSE APPROPRIATED FOR ANY FISCAL YEAR IN WHICH THE LEASE SHALL BE IN EFFECT. EXCEPT TO THE EXTENT PAYABLE FROM THE PROCEEDS OF THE SALE OF THE CERTIFICATES AND INCOME FROM THE INVESTMENT THEREOF, FROM NET PROCEEDS OF CERTAIN INSURANCE POLICIES, PERFORMANCE BONDS AND CONDEMNATION AWARDS, FROM NET PROCEEDS RECEIVED AS A CONSEQUENCE OF DEFAULTS UNDER CONSTRUCTION CONTRACTS, FROM NET PROCEEDS OF SUBLEASING OF THE LAND OR ANY PORTION THEREOF, LEASING, SUBLEASING OR ASSIGNMENT OF THE TRUSTEE'S INTEREST IN THE PROJECT, OR FROM OTHER AMOUNTS MADE AVAILABLE UNDER THE INDENTURE, THIS CERTIFICATE WILL BE PAYABLE DURING THE LEASE TERM SOLELY FROM BASE RENTALS TO BE PAID BY THE CITY UNDER THE LEASE AND THE INCOME FROM CERTAIN INVESTMENTS THEREUNDER. ALL PAYMENT OBLIGATIONS OF THE CITY UNDER THE LEASE, INCLUDING, WITHOUT LIMITATION, THE OBLIGATION OF THE CITY TO PAY BASE RENTALS, ARE FROM YEAR TO YEAR ONLY AND DO NOT CONSTITUTE A MANDATORY PAYMENT OBLIGATION OF THE CITY IN ANY FISCAL YEAR BEYOND A FISCAL YEAR IN WHICH THE LEASE SHALL BE IN EFFECT. THE LEASE IS SUBJECT TO ANNUAL RENEWAL AT THE OPTION OF THE CITY AND WILL BE TERMINATED UPON THE OCCURRENCE OF A TERMINATION EVENT. IN SUCH EVENT, ALL PAYMENTS FROM THE CITY UNDER THE LEASE WILL 02/66511.6 A -5 TERMINATE, AND THIS CERTIFICATE AND THE INTEREST HEREON WILL BE PAYABLE FROM CERTAIN MONEYS, IF ANY, HELD BY THE TRUSTEE UNDER THE INDENTURE ANY MONEYS MADE AVAILABLE BY ACTION OF THE TRUSTEE REGARDING THE LAND AND THE PROJECT. THE CORPORATION HAS NO OBLIGATION TO MAKE ANY PAYMENTS ON THE CERTIFICATES. The Certificates are issuable solely as fully registered Certificates without coupons in denominations of $5,000 and any integral multiple thereof. This Certificate is transferable by the Registered Owner hereof in whole only, in person or by his or her attorney duly authorized in writing, on the registration books kept at the principal corporate trust office of the Trustee upon surrender of this Certificate together with a duly executed written instrument of transfer satisfactory to the Trustee. Upon such transfer, a new fully registered Certificate without coupons and of the same maturity, for the same aggregate principal amount, will be issued to the transferee in exchange herefor, all upon payment of the charges and subject to the terms and conditions set forth in the Indenture. The Trustee may deem and treat the person in whose name this Certificate is registered as the absolute owner hereof, whether or not this Certificate shall be overdue, for the purpose of receiving payment and for all other purposes, and neither the City nor the Trustee shall be affected by any notice to the contrary. The Trustee shall not be required to transfer the Certificates during the period of 15 days next preceding any interest payment date of such Certificate nor to transfer any Certificate after the mailing of notice calling such Certificate for redemption has been given as herein provided, nor during the period of 15 days next preceding the giving of such notice of redemption. In the event that this Certificate is called for redemption in part only, upon surrender and cancellation of this Certificate, a new fully registered Certificate or Certificates of the same maturity, of authorized denomination, in an aggregate principal amount equal to the unredeemed portion hereof, shall be executed and delivered by the Trustee to the Registered Owner hereof. The Certificates are subject to redemption as follows: (a) The Certificates shall be called for redemption, in whole only, on any date in the event of, and to the extent that moneys are actually received by the Trustee from, the exercise by the City of its option to purchase the Project, as provided in the Lease, upon payment of the then applicable Purchase Option Price, at a redemption price equal to the principal amount of the Certificates being redeemed, plus accrued interest to the redemption date; provided, however, that paragraph (b) below, and not this paragraph (a), shall apply in the event that the Purchase Option Price is paid from moneys borrowed by the City or derived from any installment purchase or lease purchase financing by the City. 02/66511.6 A -6 (b) In the event that the Purchase Option Price is paid from moneys borrowed by the City or derived from any installment purchase or lease purchase financing by the City, the Certificates maturing on or before July 1, 1999, shall not be callable for redemption prior to maturity; and the Certificates maturing on or after July 1, 2000, shall be callable for redemption prior to maturity, at the option of the City, on January 1, 2000 and on any interest payment date thereafter, in whole or in part, at a redemption price equal to the principal amount of the Certificate or portion thereof being redeemed, plus accrued interest to the redemption date. (c) The Certificates shall be called for redemption in the event and only to the extent that any Extraordinary Revenues (as defined in the Lease) are deposited into the Extraordinary Redemption Fund, other than as provided in (a) or (b) above. (d) The Certificates may also be called for redemption as set forth below upon the occurrence of a Termination Event. In the event that the Certificates are redeemed pursuant to (c) above, the Certificates shall be redeemed in whole, or in part in inverse order of maturity and by lot within any maturity, selected in such a manner as the Trustee shall determine, at a redemption price (expressed as a percentage of principal amount) of 100 % plus accrued interest to the redemption date, on the first Business Day for which notice of redemption may be given. If the Certificates are redeemed in part and less than all of the Certificates of a single maturity are to be redeemed, the Trustee shall select Certificates of such maturity for redemption, by lot in such manner as the Trustee shall determine. The Certificates maturing on July 1, 2015, are subject to mandatory sinking fund redemption on July 1, 1999 and on each July 1 thereafter to and including July 1, 2015, at a redemption price equal to the principal amount thereof with interest accrued thereon to the date fixed for redemption, without premium, the particular Certificates to be redeemed to be selected by lot in such manner as the Trustee shall determine, in the amounts (after credit as provided in the Indenture) set forth below: 02/66511.6 A -7 Year Principal Jul 1 Amount 1996 $20,000 1997 30,000 1998 35,000 1999 35,000 2000 40,000 2001 40,000 2002 45,000 2003 50,000 2004 50,000 2005 55,000 2006 60,000 2007 65,000 2008 70,000 2009 70,000 2010 75,000 2011 85,000 2012 90,000 2013 95,000 2014 100,000 2015 (maturity) 110,000 Upon the occurrence of a Termination Event (as defined in the Indenture), the Certificates shall be payable from such moneys as may be obtained by the Trustee through the exercise of its rights under the Indenture. Upon the occurrence of a Termination Event, the Trustee may commence proceedings for leasing and subleasing the Land and the Project as provided in the Indenture, and may call the Certificates for redemption from the Net Proceeds of such subleasing of the Land and leasing, subleasing or assignment of the Project and all other moneys, if any, then on hand and being held by the Trustee for the Registered Owners, subject to the provisions of the Indenture, at 100% of the principal amount thereof plus accrued interest to the redemption (provided, however, that moneys in the Reserve Fund may be used by the Trustee to complete, repair, modify or insure the Project and to pay certain costs and expenses incurred by the Trustee, to the extent provided in the Lease and the Indenture). In the event that such Net Proceeds and other moneys are insufficient to redeem the Certificates at 100% of the principal amount thereof plus accrued interest to the redemption date, such Net Proceeds and other moneys shall be allocated proportionately among the Certificates, according to the principal amount thereof outstanding. In the event that such Net Proceeds and other moneys are in excess of the amount required to redeem the Certificates at 100% of the principal amount thereof plus accrued interest to the redemption date, then such excess moneys shall be paid to the City. Prior to any distribution of such Net Proceeds in redemption of the Certificates, the Trustee shall be entitled to payment of its customary fees for all services rendered in connection with such liquidation, as well as reimbursement for all costs and expenses incurred thereby from the 02166511.6 A -8 proceeds of such foreclosure and sale. A REGISTERED OWNER SHOULD NOT ANTICIPATE THAT IT WILL BE POSSIBLE TO FORECLOSE ON AND SELL THE PROJECT FOR AN AMOUNT EQUAL TO THE AGGREGATE PRINCIPAL AMOUNT OF THE CERTIFICATES THEN OUTSTANDING PLUS ACCRUED INTEREST THEREON. IF THE CERTIFICATES ARE REDEEMED SUBSEQUENT TO THE OCCURRENCE OF A TERMINATION EVENT FOR AN AMOUNT LESS THAN THE AGGREGATE PRINCIPAL AMOUNT THEREOF PLUS ACCRUED INTEREST TO THE REDEMPTION DATE, NO REGISTERED OWNER OF ANY CERTIFICATE SHALL HAVE ANY FURTHER CLAIM FOR PAYMENT AGAINST THE CITY, THE CORPORATION OR THE TRUSTEE. In the event any of the Certificates are called for redemption as aforesaid, the Trustee shall cause notice of the call for redemption, identifying the Certificates or portions thereof to be redeemed, to be given by mailing, at least 30 days and not more than 60 days prior to the redemption date, as provided in the Indenture. All Certificates so called for redemption shall cease to bear interest after the specified redemption date, provided that such funds as may be available for their redemption pursuant to the Lease (which, in the case of a Termination Event, as defined in the Indenture, may be less than the full principal amount of the outstanding Certificates and accrued interest thereon to the redemption date) are on deposit at the place of payment at that time. The Trustee shall pay to the Registered Owners of Certificates to be redeemed, or their representatives duly authorized in writing, the amounts due on their respective Certificates at the principal corporate trust office of the Trustee; provided, however, that, if redeemed in part, the Certificates may only be redeemed in multiples of $5,000 and all remaining Certificates must be in denominations of $100,000 and any integral multiple of $5,000 in excess thereof. Redemption payments shall be accompanied by a written designation prepared by the Trustee stating the portion of the payment representing the unpaid principal amount of each Certificate immediately prior to the payment, the portion representing interest and the remaining portion, if any, which shall be designated and paid as a redemption premium. The Trustee may waive an Event of Nonappropriation or an Event of Default under certain circumstances as provided in the Lease and the Indenture. The Indenture permits amendments thereto and to the Lease, upon the agreement of the City and the Trustee and compliance with the other requirements of the Indenture, including but not limited to, in certain cases the approval of the Registered Owners of not less than two - thirds or, for certain amendments, 100% in aggregate principal amount of the Certificates at the time outstanding, as defined in the Lease. The Lease also contains provisions permitting the City and the Trustee to enter into amendments to the Indenture and the Lease without the consent of the Registered Owners of the Certificates for certain purposes, including, without limitation, the issuance of Additional Certificates for certain purposes. The Indenture requires the written consent of the Trustee to any amendment of the Indenture or the Lease which modifies the rights, duties or immunities of the Trustee. 02/66511.6 A -9 Any consent or request by the Registered Owner of this Certificate shall be conclusive and binding upon such owner and upon all future Registered Owners of this Certificate and of any Certificate issued upon the transfer of this Certificate whether or not notation of such consent or request is made upon this Certificate. This Certificate is issued with the intent that the laws of the State of Colorado shall govern its legality, validity, enforceability and construction. 02/66511.6 A -10 LEGAL OPINION CERTIFICATE The undersigned City Clerk of the City of Pueblo, Colorado, hereby certifies that in connection with the issuance of the Certificates of Participation, an opinion in substantially the following form was delivered to the City Council of the City of Pueblo, Colorado on the date of the issuance of the Certificates. By (Facsimile Signature� City Clerk [Opinion of Kutak Rock to Appear Here] 02/66511.6 A-11 (Form of Transfer) FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto (Please Insert Social Security or the Identifying Number of Transferee) (Please Print or Type Name and Address of Transferee) the within Certificate and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within Certificate on the books kept for registration thereof, with full power of substitution in the premises. Dated: Signature Guaranteed: NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within Certificate in every particular without alteration or enlargement or any change whatever. NOTICE: Signature(s) must be guaranteed by a member firm of the New York Stock Exchange or a commercial bank or trust company. ANY TRANSFER FEE REQUIRED SHALL BE THE SOLE RESPONSIBILITY OF THE HOLDER OF THIS CERTIFICATE (End of Form of Certificate) 02166511.6 A -12 DESCRIPTION OF THE LAND Lots 1, 2, 3 4, 5, 12, 13, 14, 15, 16 and the Easterly 1/2 of Lots 6 and 11, Block 41, in that part of the present City of Pueblo which was surveyed and platted by H. M. Fosdick, Civil Engineer, for the Probate Judge of Pueblo County in March 1869, as shown by the recorded plat thereof, County of Pueblo, State of Colorado. 02166511.6 B -1 GROUND LEASE AGREEMENT By and Among CITY OF PUEBLO, COLORADO, as Lessor, and CITY OF PUEBLO, COLORADO MUNICIPAL BUILDING CORPORATION, as Lessee Dated as of November 15, 1995 The interest of the City of Pueblo, Colorado Municipal Building Corporation in this Ground Lease Agreement has been assigned to The Bank of Cherry Creek, N.A., as trustee (the "Trustee ") under the Mortgage and Indenture of Trust, dated as of November 15, 1995 (the "Indenture "), from the City of Pueblo, Colorado Municipal Building Corporation to the Trustee, as trustee, and is subject to the first lien and security interest of the Trustee, as trustee under the Indenture. After this instrument has been recorded, please return to: William C. Gorham, Esq. Kutak Rock 717 Seventeenth Street Suite 2900 Denver, Colorado 80202 02166494.6 TABLE OF CONTENTS (This Table of Contents is not a part of this Ground Lease Agreement and is only for convenience of reference.) Page ARTICLE I DEFINITIONS .............. ............................... 2 ARTICLE H REPRESENTATIONS, COVENANTS AND WARRANTIES Section 2.01. Representations, Covenants and Warranties of the City ........... 3 Section 2.02. Representations, Covenants and Warranties of the Corporation ...... 3 ARTICLE III DEMISING CLAUSE; COVENANTS OF TITLE; OTHER MATTERS .......... 4 ARTICLE IV RENT PAYMENTS ........... ............................... 5 ARTICLE V GROUND LEASE TERM Section 5.01. Commencement of Ground Lease Term .................... 6 Section 5.02. Termination of Ground Lease Term ...................... 6 Section 5.03. Disposition of the Land and the Project .................... 7 ARTICLE VI ENJOYMENT OF THE LAND AND THE PROJECT ..................... 7 02166494.6 1 ARTICLE VII MAINTENANCE, TAXES, OTHER CHARGES AND INSURANCE Section 7.01. Taxes and Utilities .. ............................... 7 Section 7.02. Maintenance ..... ............................... 8 Section 7.03. Insurance ....... ............................... 8 Section 7.04. Advances by City; Trustee's Obligations Limited .............. 8 ARTICLE VIII COMPLIANCE WITH REQUIREMENTS; OTHER COVENANTS Section 8.01. Further Assurances and Corrective Instruments ............... 9 Section 8.02. City, Authority and Trustee Representatives ................. 9 Section 8.03. Use, Compliance with Laws and Waste .................... 9 Section 8.04. Inspection, Access and Records ......................... 9 ARTICLE IX EVENTS OF DEFAULT AND REMEDIES Section 9.01. Events of Default Defined ............................ 10 Section 9.02. Remedies on Default ............................... 10 Section 9.03. No Remedy Exclusive ............................... 10 ARTICLE X ASSIGNMENT AND MORTGAGE Section 10.01. Assignment and Mortgage to Trustee ...................... 10 Section 10.02. Restrictions on Mortgage or Sale of the Land or the Project ........ 11 ARTICLE XI MISCELLANEOUS Section 11.01. Improvements; Liens ............................... 11 Section 11.02. Damage, Destruction and Condemnation ................... 11 Section 11.03. Notices ......... ............................... 11 Section 11.04. Binding Effect .... ............................... 12 Section 11.05. Severability ...... ............................... 12 Section 11.06. Amendments, Changes and Modifications ................... 12 Section 11.07. Execution in Counterparts ............................ 12 02166494.6 ii Section 11.08. Applicable Law ... ............................... 12 Section 11.09. Captions ........ ............................... 12 TESTIMONIUM ............. ............................... 13 SIGNATURE AND SEALS ...... ............................... 13 ACKNOWLEDGEMENTS ...... ............................... 14 EXHIBIT A— Description of the Land ............................... A -1 02166494.6 ill GROUND LEASE AGREEMENT THIS GROUND LEASE AGREEMENT, dated as of November 15, 1995 (this "Ground Lease "), entered into by and between the CITY OF PUEBLO, COLORADO (the "City "), as lessor hereunder, a home rule municipal corporation organized under article XX of the Constitution of the State of Colorado and the home rule charter of the City, and the CITY OF PUEBLO, COLORADO MUNICIPAL BUILDING CORPORATION (the "Corporation "), as lessee hereunder, a nonprofit corporation duly organized, existing and in good standing under the laws of the State of Colorado and also as lessor and sublessor under that certain Lease Purchase and Sublease Agreement, dated as of November 15, 1995 (the "Lease "), between the City and the Corporation, and as grantor under that certain Mortgage and Indenture of Trust, dated as of November 15, 1995 (the "Indenture "), between the Corporation and The Bank of Cherry Creek, N.A., a national banking association, as trustee thereunder (the "Trustee "); WITNESSETH: WHEREAS, the City of Pueblo, Colorado (the "City ") has been duly organized and is validly existing as a home rule city under the Colorado Constitution and the home rule charter of the City (the "Charter "); and WHEREAS, the City has previously authorized and directed the creation of the Corporation under the provisions of the Colorado Nonprofit Corporation Act, articles 20 through 29 of title 7, Colorado Revised Statutes (the "Act "), pursuant to an ordinance duly and regularly adopted by the City Council of the City (the "City Council "); and WHEREAS, pursuant to the Charter and part 8 of article 15 of title 31, Colorado Revised Statutes, the City is authorized to enter into one or more leases or lease- purchase agreements for land, buildings, equipment and other property for governmental or proprietary purposes; and WHEREAS, the City Council has determined that the City is in need of the parking facility more fully described in the Lease (the "Project "), and that it is necessary and in the best interests of the City and its residents that the Project be acquired, constructed and equipped on a certain parcel of land more particularly described in Exhibit A attached hereto and, by this reference, expressly incorporated herein (the "Land "), which Land is presently owned by the City; and WHEREAS, the City has received a grant from the Economic Development Administration of the United States Department of Commerce (the "EDA Grant ") to finance the acquisition, construction and equipping of a portion of the Project (the "City Portion "); and WHEREAS, for purposes of financing the acquisition, construction and equipping of the remainder of the Project (the "Certificate Portion "), the City and the Corporation shall, contemporaneously herewith, enter into the Lease; and 02166494.6 WHEREAS, the interest of the Corporation in this Ground Lease and the Lease (with certain exceptions as provided in the Lease) shall be assigned to the Trustee, pursuant to the Indenture; and WHEREAS, certain Certificates of Participation (the "Certificates ") shall be issued pursuant to the Indenture and the Lease and shall be sold pursuant to a certain Certificate Purchase Agreement, dated October 23, 1995 (the "Certificate Purchase Agreement "), among Lewis, De Rozario & Co. Incorporated (the "Original Purchaser "), the City and the Corporation; and WHEREAS, the Board of Directors of the Corporation has by resolution authorized, approved and directed the execution and delivery by the Corporation of the Lease, this Ground Lease, the Indenture, the Certificate Purchase Agreement and certain other documents, and has further authorized, approved and directed the issuance of the Certificates for the purpose of providing funds to acquire, construct and equip the remaining portion of the Project; and WHEREAS, under the provisions of Ordinance No. 5961, finally passed and adopted on April 24, 1995, the City Council of the City has authorized and approved the execution and delivery of the Lease, this Ground Lease, the Indenture and the Certificate Purchase Agreement and certain actions to be taken by the Corporation, including the acquisition, construction and equipping of the Project, and the issuance of the Certificates; and WHEREAS, the Corporation desires to lease the Land and the City Portion of the Project from the City, and the City desires to lease the Land and the City Portion of the Project to the Corporation pursuant to the terms and conditions and for the purposes set forth herein. NOW, THEREFORE, for and in consideration of the foregoing premises and the mutual promises and covenants herein contained the sum of One Dollar ($1.00) paid in hand by the Corporation to the City, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows: ARTICLE I DEFINITIONS Unless the context otherwise requires, all terms defined in the Indenture or the Lease shall have the same meaning in this Ground Lease. In this Ground Lease, the following term will have the meaning specified below: "Rent" means the amounts payable by the Corporation to the City under Article IV of this Ground Lease. 02166494.6 2 ARTICLE II REPRESENTATIONS, COVENANTS AND WARRANTIES Section 2.01. Representations, Covenants and Warranties of the City. The City represents, covenants and warrants for the benefit of the Corporation, the Trustee and the owners from time to time of the Certificates as follows: (a) The City is a home rule municipal corporation within the State duly organized and existing as such under article XX of the Constitution of the State and the Charter of the City. The City has all requisite power and authority to enter into this Ground Lease and to carry out its obligations hereunder. The City has duly authorized and approved the execution and delivery of this Ground Lease. (b) The City has, or will be able to obtain, good and marketable fee simple title to the Land and the City Portion of the Project, subject only to Permitted Encumbrances, and has by this Ground Lease leased the Land and the City Portion of the Project to the Corporation as hereinafter provided. It is understood by the parties hereto that the Corporation shall have a leasehold interest in the Land and the City Portion of the Project, subject only to Permitted Encumbrances. (c) Neither the execution and delivery hereof, nor the fulfillment of or compliance with the terms and conditions hereof, nor the consummation of the transactions contemplated hereby, conflicts with or results in a breach of the terms, conditions or 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, or results in the creation or imposition of any lien, charge or encumbrance whatsoever upon any of the property or assets of the City, except the leasehold interest of the Corporation in the Land. (d) There is no litigation or proceeding pending, or to the knowledge of the City threatened, against the City or any other person affecting the right of the City to execute this Ground Lease or to otherwise comply with its obligations hereunder. Section 2.02. Representations, Covenants and Warranties of the Corporation. The Corporation represents, covenants and warrants for the benefit of the City, the Trustee and the registered owners of the Certificates, as follows: (a) The Corporation is a nonprofit corporation, duly incorporated, in good standing and qualified to transact business in the State, is not in violation of any provision of its Articles of Incorporation or its Bylaws, has the corporate power and authority to enter into this Ground Lease, and has duly authorized and approved the execution and delivery of this Ground Lease by all requisite corporate action. 02/66494.6 3 (b) The Corporation agrees that, during the term of this Ground Lease, it will maintain its corporate existence, will continue to be a corporation in good standing under the laws of the State, will not dissolve or otherwise dispose of all or substantially all of its assets and will not consolidate with or merge into another corporation or permit one or more other corporations to consolidate with or merge into it. (c) The Corporation, contemporaneously with the execution of this Ground Lease, will lease the Certificate Portion of the Project and sublease the Land and the City Portion of the Project to the City pursuant to the Lease. It is understood by the parties hereto that the Corporation shall own the Certificate Portion of the Project and shall have a leasehold interest in the Land and the City Portion of the Project, subject to Permitted Encumbrances. The interest of the Corporation in the Lease and this Ground Lease will be assigned to the Trustee pursuant to the Indenture. (d) Prior to the occurrence and continuance of a Termination Event or an Event of Default under the Lease, the Corporation will not mortgage or encumber the Project, except pursuant to the Lease and the Indenture. (e) Neither the execution and delivery hereof, nor the fulfillment of or compliance with the terms and conditions hereof, nor the consummation of the transactions contemplated hereby conflicts with or results in a breach of the terms, conditions or provisions or any restriction or any agreement or instrument to which the Corporation is now a party or by which the Corporation is bound, or constitutes a default under any of the foregoing. (f) There is no litigation or proceeding pending, or to the knowledge of the Corporation threatened, against the Corporation or any other person affecting the right of the Corporation to execute this Ground Lease or to comply with the provisions hereof. ARTICLE III DEMISING CLAUSE; COVENANTS OF TITLE; OTHER MATTERS The City demises and leases the Land and the City Portion of the Project to the Corporation, and the Corporation leases the Land and the City Portion of the Project from the City, subject only to Permitted Encumbrances, in accordance with the terms and provisions of this Ground Lease, to have and to hold for the term of this Ground Lease as provided in Article V hereof. Nothing in this Ground Lease shall be construed to require the Corporation to operate the Project other than as the lessee hereunder and as lessor and sublessor under the Lease. The City warrants and covenants that it has good and marketable fee simple title to the Land free from any encumbrances, other than Permitted Encumbrances. The City will cause 02166x94.6 4 to be furnished to the Corporation and the Trustee, at the time of delivery of the Certificates, the policy of title insurance required under Section 7.04 of the Lease. The City and the Corporation acknowledge that the City will be leasing the Certificate Portion of the Project and subleasing the Land and the City Portion of the Project from the Corporation pursuant to the Lease and the City and the Corporation intend that there be no merger of the City's interests as lessee and sublessee under the Lease and the City's ownership interest in the Land and the City Portion of the Project so as to cause the cancellation of this Ground Lease. ARTICLE IV RENT PAYMENTS The Corporation has paid to the City, and the City hereby acknowledges receipt of, the sum of One Dollar ($1.00), which sum shall, together with the financing, acquisition and leasing of the Project to be leased to the City pursuant to the Lease, constitute (a) consideration for the leasehold interest in the Land and the City Portion of the Project conveyed to the Corporation under this Ground Lease from the date hereof until the occurrence and continuance of a Termination Event under the Lease; and (b) consideration for the execution and delivery of the Lease. Subsequent to the occurrence and continuance of a Termination Event under the Lease, the Corporation and the Trustee, as assignee of the interests of the Corporation under this Ground Lease, or any sublessees or assigns of the Trustee, shall pay to the City, on July 1 of each year for so long as this Ground Lease shall be in effect, as additional rental due for the use and enjoyment of the leasehold interest in the Land and the City Portion of the Project from the immediately preceding January 1 through and including the next subsequent December 31, the sum of $ (increased for inflation or decreased for deflation in each year of the term of this Ground Lease subsequent to the Termination Event based upon the increase or decrease in the Consumer Price Index Annual Average for All Urban Consumers published each year for the Pueblo Metropolitan Area by the Bureau of Labor Statistics of the United States Department of Labor). ARTICLE V GROUND LEASE TERM Section 5.01. Commencement of Ground Lease Term. The term of this Ground Lease shall commence as of November 15, 1995, and shall terminate as provided in Section 5.02 hereof. 02166494.6 5 Section 5.02. Termination of Ground Lease Term. Unless this Ground Lease shall have been renewed as provided hereinbelow in this Section 5.02, the term of this Ground Lease shall terminate on the earliest to occur of the following: (a) Termination Event under the Lease as provided in Section 4.02(b) or 4.02(e) of the Lease. (b) Discharge of the Indenture, as a result of the fact that all Certificates and any Additional Certificates have been paid or have been deemed to have been paid as provided in Article VI of the Indenture. (c) July 1, 2025. (d) Termination Event under the Lease and the Trustee's written election, in the discretion of the Trustee to terminate this Ground Lease. (e) An event of default under Section 9.01 of this Ground Lease, and the City's written election, in the sole and absolute discretion of the City, to terminate this Ground Lease; provided, however, that no such event of default shall give rise to a termination of this Ground Lease to the extent that all revenues derived from the Land and the Project following a Termination Event have been applied to the payment obligations described under Section 9.01 of this Ground Lease, and such revenues are insufficient to pay accumulated ground rent and other amounts payable described under Section 9.01 hereof. The rights acquired by the City upon termination of this Ground Lease pursuant to (b) above shall be subject to the rights of any subsequent lessee or sublessee of the Land or the Project or any portion thereof pursuant to Section 14.02 of the Lease. Until the Certificates and any Additional Certificates are paid or payment thereof is provided for pursuant to Article VI of the Indenture, the City shall, upon termination of this Ground Lease pursuant to Section 5.02(c) above, to the extent legally permissible, renew this Ground Lease upon the request of the Corporation, the Trustee or any sublessee or assignee in and to the Project; and, if such renewal is not legally permitted, then the City shall, to the extent legally permissible, consider any bona fide offer to purchase the Land. In no event shall the City or the Corporation terminate this Ground Lease under Section 5.02(a) or (b) above or otherwise (except under Section 5.02(c) or (e) above) unless and until the Certificates and any Additional Certificates are paid or payment thereof is provided for pursuant to Article VI of the Indenture. Section 5.03. Disposition of the Land and the Project. At the end of the term of this Ground Lease and the first date on which the Certificates are no longer Outstanding (which term shall extend through the renewal term or terms, if any), all right, title and interest of the Corporation, the Trustee, or any sublessee or assignee in and to the Land and the Project located OVW94.6 thereon, including any and all improvements and fixtures which shall at the time be situated thereon or attached thereto, shall be vested in the City, and the Corporation, the Trustee and any sublessee or assignee shall execute and deliver, upon request by the City, any instrument of transfer, conveyance or release necessary or appropriate to confirm the vesting of such right, title and interest in the City. ARTICLE VI ENJOYMENT OF THE LAND AND THE PROJECT The City hereby covenants to provide the Corporation and its assigns, including the Trustee and its sublessees and assigns, if any, during the term of this Ground Lease, with quiet use and enjoyment of the Land and the Project, and the Corporation shall during the term of this Ground Lease peaceably and quietly have and hold and enjoy the Land and the Project, without suit, trouble or hindrance from the City, except as expressly set forth herein, in the Lease or in the Indenture. The rights of the Corporation under this Article shall be subject to the rights of the City under Article V of the Lease. The City shall, at the request of the Corporation or the Trustee and at the expense of the City, join in any legal action in which the Corporation or the Trustee asserts its right to such possession and enjoyment, to the extent that the City may lawfully do so. In addition, the Corporation or the Trustee may join in any legal action involving the City and affecting the possession and enjoyment of the Land and the Project by the Corporation or the Trustee and shall be joined in any action affecting their rights or liabilities hereunder. Violation of this Article by the City during the term of the Lease shall constitute an Event of Default under the Lease. ARTICLE VII MAINTENANCE, TAXES, OTHER CHARGES AND INSURANCE Section 7.01. Taxes and Utilities. Prior to a Termination Event under the Lease, the payment of taxes and utility charges shall be governed by Article IX of the Lease. After a Termination Event under the Lease and if this Ground Lease has not been terminated pursuant to Section 5.02 hereof, the Trustee or its sublessee or assignee shall promptly pay or cause to be paid when due all taxes and assessments which may be imposed on the Land and the Project and all costs or charges for utility service supplied to the Land and the Project. Section 7.02. Maintenance. Prior to a Termination Event under the Lease, the maintenance of the Land and the Project shall be governed by Article IX of the Lease. After a Termination Event under the Lease and if this Ground Lease has not been terminated pursuant to Section 5.02 hereof, the Trustee or its sublessee or assignee shall maintain the Land and the Project in good condition and in good working order. 02166494.6 7 Section 7.03. Insurance. The provisions of Article IX of the Lease shall govern with respect to the maintenance of insurance prior to a Termination Event under the Lease. After a Termination Event under the Lease and if this Ground Lease has not been terminated pursuant to Section 5.02 hereof, the Trustee or its sublessee or assignee shall obtain and keep in force, at its own expense, (a) comprehensive general public liability insurance against claims for personal injury, death or property damage occurring on the Land or the Project in an amount not less than $1,000,000, and (b) fire and extended coverage insurance in an amount not less than the replacement cost of the Project (excluding foundations). All such insurance shall name the Corporation, the Trustee, any sublessee or assignee and the City as insureds. Proceeds of such fire and extended coverage insurance shall be payable to the Corporation, the Trustee, any sublessee or assignee and the City as their respective interests may appear. All such insurance policies shall provide that the insurance company shall not cancel such insurance without first giving at least 30 days' advance written notice to the Corporation, the Trustee and the City. Each insurance policy required by this Section shall contain a waiver of subrogation by the issuer of such policy with respect to the Corporation, the Trustee, any sublessee or assignee, and the City, and their officers, agents and employees, while acting within the scope of their employment. Section 7.04. Advances by City; Trustee's Obligations Limited. In the event that the Trustee or its sublessee or assignee shall fail to make any payments required by, or perform any of its obligations under Section 7.01, 7.02 or 7.03 of this Ground Lease, the City may (but shall be under no obligation to) make such payments or perform any of such obligations; and any payments so made or costs or expenses so incurred by the City, together with interest thereon at the rate of 12 % per annum, shall be reimbursed to the City by any sublessee or assignee, or by the Trustee from any proceeds of subleasing of the Land and the Project or any portion thereof or sale of an assignment of its interest in this Ground Lease. Notwithstanding any other provision of this Article, any obligations of the Trustee to make payments under this Article or to pay Rent under this Ground Lease shall be limited to any proceeds of subleasing of the Land and the City Portion of the Project and leasing the Certificate Portion of the Project or any portion thereof or sale or assignment of its interest in this Ground Lease, or moneys furnished to the Trustee pursuant to Section 8.01(m) of the Indenture. No provision of this Article shall be construed to create any obligation to make any payments, nor any other obligation, on the part of the Corporation. ARTICLE VIII COMPLIANCE WITH REQUIREMENTS; OTHER COVENANTS Section 8.01. Further Assurances and Corrective Instruments. The City and the Corporation 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 Land and the City Portion of the Project hereby leased, or for otherwise carrying out the intention hereof. MIW9a.6 8 Section 8.02. City, Authority and Trustee Representatives. Whenever under the provisions hereof the approval of the City, the Corporation or the Trustee is required, or the City, the Corporation or the Trustee is required to take some action at the request of the other, such approval or such request shall be given for the City by the City Representative, for the Corporation by the Lessor Representative, and for the Trustee by the Trustee Representative under the Lease, and the City, the Corporation and the Trustee shall be authorized to act on any such approval or request. Section 8.03. Use, Compliance with Laws and Waste. The Corporation and the Trustee or its sublessee or assignee shall use the Land and the Project only in a careful, safe and proper manner, and shall not use the Land or the Project in any manner or for any purpose prohibited by any applicable federal, State, county or municipal laws, ordinances, rules or regulations, including the EDA Grant. The Corporation and the Trustee or its sublessee or assignee shall not commit any waste or nuisance on the Land or the Project. Section 8.04. Inspection, Access and Records. The City shall have the right at reasonable business hours (or at any hour if necessary in an emergency) to enter into and upon the Land and the Project for the purposes of inspecting the Land and the Project or performing obligations of the Trustee or its sublessee or assignee under this Ground Lease which the Trustee or its sublessee or assignee neglects to perform and which the City elects to undertake. The City agrees that, after a Termination Event under the Lease, and if this Ground Lease has not been terminated pursuant to Section 5.02 hereof, the Corporation and the Trustee or any sublessee or assignee shall have full rights of ingress and egress to the Land and the Project, and the City hereby agrees to execute and deliver any easements or rights -of -way that may be reasonably necessary to confirm such rights. The City agrees that the Corporation and the Trustee and their duly authorized agents shall have the right at all reasonable times to examine the books, records, reports and other papers of the City with respect to the Land and the Project. The Corporation and the Trustee or its sublessee or assignee agree that the City and its duly authorized agents shall have the right at all reasonable times to examine the books, records, reports and other papers of the Corporation and the Trustee or its sublessee or assignee with respect to the Land and the Project. The City may, not more frequently than once in any twelve -month period, cause an audit to be made of the books, records, reports and other papers of the Corporation, the Trustee or its sublessee or assignee with respect to the Land and the Project. ARTICLE IX EVENTS OF DEFAULT AND REMED Section 9.01. Events of Default Defined. An "event of default" under this Ground Lease and the terms "events of default" and "default" shall mean, subsequent to a Termination Event under the Lease, failure by the Corporation or the Trustee or any sublessee or assignee to pay any Rent or any premiums for the liability insurance required under Section 7.03(a) of this Ground Lease, at the time when such Rent or premiums shall be due and payable and the 02166494.6 9 continuation of such failure for a period of thirty (30) days after the City shall have notified the Trustee of such failure. Section 9.02. Remedies on Default. Whenever any event of default referred to in Section 9.01 hereof shall have happened and be continuing, the City shall have the right, at its option without any further demand or notice (except as provided in Section 5.02(e) hereof), to take whatever action at law or in equity may appear necessary or desirable to enforce its rights hereunder including, without limitation, the termination of the Corporation's leasehold interest in the Land and the City Portion of the Project granted under this Ground Lease and the retaking of possession of the Land and the City Portion of the Project. Notwithstanding any other provision of this Article, recovery by the City from the Trustee in any action for amounts due and owing under Section 7.04 or Article IV of this Ground Lease shall be limited to any proceeds of subleasing the Land and the City Portion of the Project and leasing the Certificate Portion of the Project or any portion thereof or sale or assignment of the Trustee's interest in this Ground Lease, or moneys furnished to the Trustee pursuant to Section 8.01(m) of the Indenture. Section 9.03. No Remedy Exclusive. Subject to the provisions of Section 9.02 of this Ground Lease, 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 under this Ground Lease 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. ARTICLE X ASSIGNMENT AND MORTGAGE Section 10.01. Assignment and Mortgage to Trustee. The City and the Corporation agree that, pursuant to the Indenture, the rights of the Corporation to receive certain payments and to enforce remedies pursuant to the Lease and all of the right, title and interest of the Corporation in this Ground Lease shall be mortgaged and assigned to the Trustee. This Ground Lease may also be assigned by the Trustee pursuant to the Indenture. After a Termination Event or an Event of Default under the Lease, and if this Ground Lease has not been terminated pursuant to Section 5.02 hereof, the Corporation and the Trustee may also sublease and lease the Land and the Project, respectively, or any portion thereof, or assign their interests in this Ground Lease pursuant to Section 6.06 or 14.02 of the Lease. Section 10.02. Restrictions on Mortgage or Sale of the Land or the Project. Except as provided in the Lease and except for Permitted Encumbrances, or as provided in Section 10.01 hereof, the City, the Corporation and the Trustee and any sublessee or assignee of the Trustee agree that neither the City, the Corporation, the Trustee nor any sublessee or 02166494.6 10 assignee of the Trustee will sell, mortgage or encumber the Land or the Project or any portion thereof during the term of this Ground Lease. ARTICLE XI MISCELLANEOUS Section 11.01. Improvements; Liens. After a Termination Event under the Lease, the Corporation and the Trustee or their sublessee or assignee shall have the privilege of completing the Project and making improvements on the Land, subject to the provisions of Section 11.05 of the Lease. Section 11.02. Damage, Destruction and Condemnation. The provisions of Article X of the Lease shall govern with respect to any damage, destruction or condemnation of the Land or the Project during the term of the Lease. After a Termination Event under the Lease, and if this Ground Lease has not been terminated pursuant to Section 5.02 hereof and so long as any Certificates or Additional Certificates are Outstanding, if (a) the Land or the Project or any portion thereof is damaged or destroyed, in whole or in part, by fire or other casualty, or (b) title to or use of the Land or the Project or any part thereof shall be taken under the exercise (or in anticipation of such exercise) of the power of eminent domain, the Trustee or its sublessee or assignee shall cause the Net Proceeds of any insurance claim or condemnation award to be applied to the prompt replacement, repair and restoration of the Land or the Project and any Net Proceeds remaining after such work has been completed shall be paid to the Trustee or its sublessee or assignee. If the Net Proceeds are insufficient to pay the full cost of the replacement, repair and restoration, the Trustee or its sublessee or assignee shall at its option, (i) complete the work and pay any cost in excess of the Net Proceeds (provided, however, that any obligations of the Trustee to make payments under this Section shall be limited to any proceeds of subleasing of the Land and the Project or any portion thereof or sale of an assignment of its interest in this Ground Lease, or moneys furnished to the Trustee pursuant to Section 8.01(m) of the Indenture) or (ii) apply such proceeds to the payment of Outstanding Certificates. The City may, but shall not be required to, contribute to the cost of any such replacement, repair or restoration. Section 11.03. Notices. All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed given when delivered or mailed by registered mail, postage prepaid, addressed as follows: if to the Corporation, City of Pueblo, Colorado Municipal Building Corporation, One City Hall Place, Pueblo, Colorado 81003, Attention: President; if to the City, City of Pueblo, Colorado, One City Hall Place, Pueblo, Colorado 81003, Attention: City Manager; if to the Trustee, The Bank of Cherry Creek, N.A., 3033 East First Avenue, Denver, Colorado 80206 -5698, Attention: Corporate Trust Department; and if to the Original Purchaser, Lewis, De Rozario & Co. Incorporated, 555 Seventeenth Street, Suite 3400, Denver, Colorado 80202 -3934, Attention: Public Finance Department. A duplicate copy of each notice, certificate or other communication given hereunder by the Corporation or the City shall also be given to the Trustee and the Original Purchaser. The Corporation, the City, the Original 02166494.6 11 Purchaser and the Trustee may, by notice given hereunder, designate any further or different addresses to which subsequent notices, certificates or other communications shall be sent. Section 11.04. Binding Effect. This Ground Lease shall inure to the benefit of and shall be binding upon the Corporation, the City and their respective successors and assigns, including, without limitation, the Trustee and its successors and assigns. In the event that the Trustee subleases the Land or any portion thereof, or sells an assignment of its interest in this Ground Lease, as provided in Sections 6.06 and 14.02 of the Lease, the Trustee shall require its sublessee or assignee to consent in writing to, and to undertake compliance with, all provisions of this Ground Lease. Section 11.05. Severability. In the event any provision of this Ground 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 11.06. Amendments, Changes and Modifications. Except as otherwise provided in Section 8.01 hereof, this Ground Lease may not be effectively amended, changed, modified or altered without the written consent of the Trustee, given in accordance with provisions of the Indenture. Section 11.07. Execution in Counterparts. This Ground 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 11.08. Applicable Law. This Ground Lease shall be governed by and construed in accordance with the laws of the State of Colorado, without regard to conflict of laws principles. Section 11.09. Captions. The captions or headings in this Ground Lease are for convenience of reference only and in no way define, limit or describe the scope or intent of any provisions or sections of this Ground Lease. 02166494.6 12 IN WITNESS WHEREOF, the Corporation has caused this Ground Lease to be executed in its corporate name with its corporate seal hereunto affixed and attested by its duly authorized officers. The City has executed this Ground Lease in its corporate name with its corporate seal hereunto affixed and attested by its duly authorized officers. All of the above occurred as of the date first above written. [SEAL] CITY OF PUEBLO, COLORADO MUNICIPAL BUILDING CORPORATION, as Lessee hereunder Attest: By Secretary [SEAL] Attest: By City Clerk President CITY OF PUEBLO, COLORADO, as Lessor hereunder U President of the City Council 021"A94.6 13 STATE OF COLORADO ) COUNTY OF PUEBLO ) ss. CITY OF PUEBLO ) The foregoing instrument was acknowledged before me this day of November 1995, by Billy G. Markin and by Fay B. Kastelic, as President and Secretary, respectively, of the City of Pueblo, Colorado Municipal Building Corporation, a Colorado nonprofit corporation. WITNESS MY HAND AND OFFICIAL SEAL. [SEAL] My commission expires: STATE OF COLORADO ) COUNTY OF PUEBLO ) ss. CITY OF PUEBLO ) Notary Public for the State of Colorado The foregoing instrument was acknowledged before me this day of November 1995, by Chris Weaver and by Marian Mead, as President of the City Council and City Clerk, respectively, of the City of Pueblo, Colorado. WITNESS MY HAND AND OFFICIAL SEAL. My commission expires: Notary Public for the State of Colorado 02166494.6 14 EXHIBIT A DESCRIPTION OF THE LAND Lots 1, 2, 3, 4, 5, 12, 13, 14, 15, 16 and the Easterly 1/2 of Lots 6 and 11, Block 41, in that part of the present City of Pueblo which was surveyed and platted by H. M. Fosdick, Civil Engineer, for the Probate Judge of Pueblo County in March 1869, as shown by the recorded plat thereof, County of Pueblo, State of Colorado. OVW94.6 A -1 LEASE PURCHASE AND SUBLEASE AGREEMENT (With Authorization for Certificates of Participation in the Aggregate Principal Amount of $1,220,000 Evidencing Assignments of Proportionate Undivided Interest in Rights to Receive Certain Payments Hereunder) by and between CITY OF PUEBLO, COLORADO MUNICIPAL BUILDING CORPORATION, as Lessor and CITY OF PUEBLO, COLORADO, as Lessee, Dated as of November 15, 1995 The interest of the City of Pueblo, Colorado Municipal Building Corporation in this Lease Purchase and Sublease Agreement (with certain exceptions) has been assigned to The Bank of Cherry Creek, N.A., as trustee (the "Trustee ") under the Mortgage and Indenture of Trust, dated as of November 15, 1995, from the City of Pueblo, Colorado Municipal Building Corporation to the Trustee, and is subject to the security interest of the Trustee. After this instrument has been recorded, please return to: William C. Gorham, Esq. Kutak Rock Suite 2900 717 Seventeenth Street Denver, Colorado 80202 02166504.5 TABLE OF CONTENTS Paae ARTICLE I DEFINITIONS .............. ............................... 3 ARTICLE II REPRESENTATIONS, COVENANTS AND WARRANTIES Section 2.01. Representations, Covenants and Warranties of the City .......... 12 Section 2.02. Representations, Covenants and Warranties of Corporation ........ 13 ARTICLE III DEMISING CLAUSE ......... ............................... 14 ARTICLE IV LEASE TERM Section 4.01. Commencement of Lease Term; Renewals .................. 14 Section 4.02. Termination of Lease Term ........................... 15 ARTICLE V ENJOYMENT OF LAND AND PROJECT ............................ 16 ARTICLE VI PAYMENTS BY THE CITY Section 6.01. Payments to Constitute Currently Budgeted Expenditures of the City .. 17 Section 6.02. Base Rentals and Additional Rentals ..................... 17 Section 6.03. Interest Component . ............................... 18 Section 6.04. Manner of Payment ............................... 18 Section 6.05. Expression of the City's Need for the Project; Determinations as to Fair Market Value and Fair Purchase Price ................. 19 Section 6.06. Nonappropriation .. ............................... 19 Section 6.07. Disposition of Base Rentals ........................... 20 02/66504.5 i ARTICLE VII CONSTRUCTION OF THE PROJECT Section 7.01. Agreement to Construct the Project ...................... 21 Section 7.02. Disbursements From the Construction Fund ................. 22 Section 7.03. Completion of Construction ........................... 23 Section 7.04. Lease of the Land and the City Portion of the Project ........... 23 Section 7.05. Construction Contracts .............................. 24 Section 7.06. Project Documents . ............................... 24 Section 7.07. Defaults Under Construction Contracts .................... 24 Section 7.08. Contractor's Performance and Payment Bonds ............... 24 Section 7.09. Contractor's General Public Liability and Property Damage 32 Insurance ....... ............................... 25 Section 7.10. Contractor's Builder's Risk Completed Value Insurance .......... 25 Section 7.11. Contractor's Worker's Compensation Insurance ............... 26 Section 7.12. Proceeds of Certain Insurance Policies and Performance Bonds ..... 26 Section 7.13. Pledge of Certain Project Documents Under the Indenture ........ 26 ARTICLE VIII TITLE TO THE PROJECT; LIMITATIONS ON ENCUMBRANCES Section 8.01. Title to the Project . ............................... 27 Section 8.02. No Encumbrance, Mortgage or Pledge of Project ............. 27 ARTICLE IX MAINTENANCE, TAXES, INSURANCE AND OTHER CHARGES Section 9.01. Maintenance of the Project by the City .................... 28 Section 9.02. Modification of the Project; Installation of Furnishings and Machinery of the City ...... ............................... 28 Section 9.03. Replacement and Substitution of Equipment ................. 29 Section 9.04. Taxes, Other Governmental Charges and Utility Charges ......... 30 Section 9.05. Provisions Regarding Casualty, Public Liability and Property Damage Insurance ....... ............................... 30 Section 9.06. Advances ....... ............................... 32 02166504.5 ii ARTICLE X DAMAGE, DESTRUCTION AND CONDEMNATION; USE OF NET PROCEEDS Section 10.01. Damage, Destruction and Condemnation ................... 32 Section 10.02. Obligation of the City to Repair and Replace the Project ......... 32 Section 10.03. Insufficiency of Net Proceeds; Discharge of the Obligation of the City 35 Section 11.04. to Repair or Replace Project .......................... 33 Section 10.04. Cooperation of Corporation ........................... 34 ARTICLE XI DISCLAIMER OF WARRANTIES; OTHER COVENANTS Section 11.01. Disclaimer of Warranties ............................ 34 Section 11.02. Further Assurances and Corrective Instruments ............... 35 Section 11.03. Corporation, City and Trustee Representatives ............... 35 Section 11.04. Granting of Easements .............................. 35 Section 11.05. Compliance With Requirements ........................ 35 Section 11.06. City Acknowledgement of the Indenture and the Certificates ....... 36 Section 11.07. Tax Covenants ... ............................... 36 Section 11.08. Undertaking to Provide Ongoing Disclosure ................. 37 ARTICLE XH CONVEYANCE OF THE PROJECT Section 12.01. Conveyance of the Project ........................... 39 Section 12.02. Manner of Conveyance ............................. 40 Section 12.03. Escrowed Deed and Bill of Sale ........................ 40 ARTICLE XIII ASSIGNMENT, SUBLEASING, INDEMNIFICATION, MORTGAGING AND SELLING Section 13.01. Assignment by Corporation ........................... 40 Section 13.02. Assignment and Subleasing by the City .................... 40 Section 13.03. Release and Indemnification Covenants .................... 41 Section 13.04. Restrictions on Mortgage or Sale of Project ................. 41 02166504.5 lu ARTICLE XIV EVENTS OF DEFAULT AND REMEDIES Section 14.01. Events of Default Defined ........................... 42 Section 14.02. Remedies on Default ............................... 43 Section 14.03. Limitations on Remedies ............................ 44 Section 14.04. No Remedy Exclusive .............................. 44 Section 14.05. Waivers ........ ............................... 44 Section 14.06. Agreement to Pay Attorneys' Fees and Expenses .............. 44 Section 14.07. Waiver of Appraisement, Valuation, Stay and Extension ......... 45 ARTICLE XV MISCELLANEOUS Section 15.01. Notices ........ ............................... 45 Section 15.02. Binding Effect .... ............................... 45 Section 15.03. Amendments, Changes and Modifications .................. 45 Section 15.04. Amounts Remaining in Funds ......................... 46 Section 15.05. Net Lease ...... ............................... 46 Section 15.06. Payments Due on Holidays ........................... 46 Section 15.07. Severability ..... ............................... 46 Section 15.08. Execution in Counterparts ............................ 46 Section 15.09. Applicable Law ... ............................... 46 Section 15.10. Captions ....... ............................... 46 Section 15.11. Immunity of Officers, Employees and Agents of City and Corporation ..... ............................... 46 TESTIMONIUM ............. ............................... 48 SIGNATURES AND SEALS ..... ............................... 48 ACKNOWLEDGEMENTS ...... ............................... 49 EXHIBIT A— Description of the Land ............................... A -1 EXHIBIT B— Schedule of Base Rentals .............................. B -1 EXHIBIT C— Description of the Project ............................. C -1 EXHIBIT D— Schedule of Certain Permitted Encumbrances .................. D -1 M/66504.5 iv LEASE PURCHASE AND SUBLEASE AGREEMENT THIS LEASE PURCHASE AND SUBLEASE AGREEMENT, dated as of November 15, 1995, (together with any amendments hereto made in accordance herewith, this "Lease "), entered into by and between the CITY OF PUEBLO, COLORADO MUNICIPAL BUILDING CORPORATION (the "Lessor "), as the lessor hereunder, a nonprofit corporation duly organized, existing and in good standing under the laws of the State of Colorado, and the CITY OF PUEBLO, COLORADO (the "City"), as lessee hereunder, a political subdivision duly organized and existing under the Constitution, statutes and laws of the State of Colorado; WITNESSETH: WHEREAS, the City of Pueblo, Colorado (the "City") has been duly organized and is validly existing as a home rule city under the Colorado Constitution and the home rule charter of the City (the "Charter "); and WHEREAS, the City has previously authorized and directed the creation of the City of Pueblo, Colorado Municipal Building Corporation (the "Corporation "), a nonprofit corporation and an instrumentality of the City for certain limited purposes, under the provisions of the Colorado Nonprofit Corporation Act, articles 20 through 29 of title 7, Colorado Revised Statutes (the "Act "), pursuant to an ordinance duly and regularly adopted by the City Council of the City (the "City Council "); and WHEREAS, pursuant to the Charter and part 8 of article 15 of title 31, Colorado Revised Statutes, the City is authorized to enter into one or more leases or lease- purchase agreements for land, buildings, equipment and other property for governmental or proprietary purposes; and WHEREAS, the City Council has determined that the City is in need of a new parking facility more fully described in Article I hereof (the "Project ") and that it is necessary and in the best interests of the City and its residents that the Project be acquired, constructed and equipped on a certain parcel of land more particularly described in Exhibit A attached hereto and, by this reference, expressly incorporated herein (the "Land "), which Land is presently owned or is being acquired by the City; and WHEREAS, the City has received a grant from the Economic Development Administration of the United States Department of Commerce (the "EDA Grant ") to finance a portion of the Project; and WHEREAS, to facilitate the financing of the acquisition, construction and equipping of the Project under this Lease, the City and the Corporation shall, contemporaneously herewith, enter into that certain Ground Lease Agreement, dated as of November 15, 1995 (the "Ground Lease "), pursuant to which the City shall lease the Land and the portion of the Project financed with the proceeds of the EDA Grant and any other moneys of the City (the "City Portion ") to the Corporation; and 022166504.5 WHEREAS, pursuant to a certain Mortgage and Indenture of Trust, dated as of November 15, 1995 (the "Indenture "), between the Corporation and The Bank of Cherry Creek, N.A., a national banking association, as trustee (the "Trustee "), the Corporation will assign all of its rights, title and interest in, to and under this Lease (except the rights of the Corporation under Sections 13.03 and 14.06 of this Lease) and certain other rights and interests to the Trustee; and WHEREAS, there will be issued pursuant to the Indenture Certificates of Participation in the initial aggregate principal amount of $1,220,000 (the "Series 1995 Certificates ") evidencing assignments of proportionate undivided interests in rights to, receive certain payments under this Lease; and WHEREAS, a portion of the proceeds from the sale of the Series 1995 Certificates will be disbursed by the Trustee at the direction of the City, to pay a portion of the costs for the acquisition, construction, improvement and equipping of the Project (the "Certificate Portion ") and the other purposes set forth herein; and WHEREAS, the obligation of the City to pay Base Rentals and Additional Rentals (both as hereinafter defined) hereunder shall be from year to year only; shall constitute currently budgeted expenditures of the City; shall not constitute a mandatory charge or requirement in any ensuing budget year; and shall not constitute a general obligation or other indebtedness of the City within the meaning of any constitutional or Charter limitation or requirement concerning the creation of indebtedness, nor a mandatory payment obligation of the City in any ensuing fiscal year beyond any fiscal year during which this Lease shall be in effect; and WHEREAS, the Series 1995 Certificates and any Additional Certificates (collectively, the "Certificates ") shall evidence assignments of proportionate undivided interests in the Revenues (as hereinafter defined), shall be payable solely from the sources herein provided, and shall not constitute a general obligation or other indebtedness of the City within the meaning of any constitutional or Charter limitation or requirement concerning the creation of indebtedness, nor a mandatory payment obligation of the City in any ensuing fiscal year beyond the current fiscal year; and WHEREAS, neither this Lease nor the issuance of the Certificates shall directly or indirectly obligate the City to make any payments beyond those appropriated for any fiscal year during which this Lease shall be in effect; and WHEREAS, the Board of Directors of the Corporation has by resolution authorized, approved and directed the execution, delivery and performance by the Corporation of this Lease, the Ground Lease, the Indenture, and certain other documents, and has further authorized, approved and directed the issuance of the Certificates for the purpose of providing funds tc acquire and construct the Project; and M/66504.5 2 WHEREAS, under the provisions of Ordinance No. 5961, finally passed and adopted on April 24, 1995, the City Council of the City has authorized and approved the execution, delivery and performance of this Lease, the Ground Lease and the Certificate Purchase Agreement by the City, the issuance of the Certificates and the form and content of certain documents to be executed, delivered and performed by, and certain other actions to be taken by, the Corporation, including the acquisition, construction and equipping of the Project; and WHEREAS, the Corporation desires to lease the Certificate Portion of the Project and sublease the Land and the City Portion of the Project to the City, and the City desires to lease the Project and sublease the Land and the City Portion of the Project from the Corporation, pursuant to the terms and conditions and for the purposes set forth herein; NOW, THEREFORE, for and in consideration of the foregoing premises and the mutual promises and covenants herein contained, the parties hereto hereby agree as follows: ARTICLE I DEFINITIONS All words and phrases defined in Article I of the Indenture shall have the same meaning in this Lease. In addition, the following terms will have the meanings specified below unless the context clearly requires otherwise: "Additional Certificates" means any additional Certificates issued pursuant to Section 2.11 of the Indenture. "Additional Rentals" means the cost of all taxes, insurance premiums, expenses and fees of the Trustee, utility charges, costs of maintenance, upkeep and repair, payments into the Reserve Fund, amounts required to be deposited in the Rebate Fund, and all charges or costs which the City assumes or agrees to pay hereunder with respect to the Project, other than Base Rentals (together with interest that may accrue thereon in the event that the City shall fail to pay the same, as set forth herein), including but not limited to costs and expenses charged to or incurred by the Corporation at the request of the City and in its capacity as lessor hereunder. "Annual Financial Information" means the financial information, which shall be based on financial statements prepared in accordance with generally accepted accounting principles ( "GAAP "), and operating data of the type contained in the Official Statement, including audited financial statements and financial information and operating data relating to the City and the City's general fund, and its outstanding debt and other obligations. "Base Rentals" means the payments payable by the City pursuant to Section 6.02 of this Lease in the amounts and on the due dates set forth in Exhibit B attached hereto and, by this reference, expressly incorporated herein, during the Original Term and any Renewal Term, 02166504.5 3 which constitute the payments payable by the City for and in consideration of the right to use the Project during such Original Term or Renewal Term. "Base Rental Payment Date" means June 15 and December 15 of each year, commencing June 15, 1996. "Building" means the parking facility described on Exhibit C hereto to be acquired, constructed, improved and equipped pursuant to this Lease on the Land, including any remodeling, additions, modifications and improvements thereto or substitutions thereof and all property permanently affixed to the Land, as provided in Section 9.02 of this Lease. "Business Day" means any day other than a Saturday, Sunday or legal holiday or day on which banking institutions in the city in which the Trustee has its principal corporate trust office or New York, New York are authorized or required by law to close. "Certificate Fund" means the special fund created under Section 3.02 of the Indenture for the purpose of holding and disbursing to the Registered Owners the Base Rentals paid by the City, and includes both the Principal Account and the Interest Account thereof. "Certificate Portion" means the portion of the Project acquired, constructed and equipped with the proceeds of the Certificates. The Certificate Portion of the Project shall be deemed to be an undivided interest in the Project equal to the percentage determined by dividing the proceeds of the Certificates used to pay Costs of Construction by the total Costs of Construction. "Certificates" means one or more certificates of participation to be issued pursuant to the Indenture evidencing assignments of proportionate undivided interests in rights to receive Revenues. "Charter" means the home rule charter of the City, and any amendments or supplements thereto. "City" means City of Pueblo, Colorado, or any successor to its functions. "City Council" means the City Council of the City or any successor to its functions. "City Portion" means the portion of the Project acquired, constructed and equipped with the proceeds of the EDA Grant and any other moneys of the City. The City Portion of the Project shall be deemed to be an undivided interest in the Project equal to the percentage determined by dividing the sum of the proceeds of the EDA Grant and all other moneys of the City used to pay Costs of Construction by the total Costs of Construction "City Representative" means the person at the time designated to act on behalf of the City for the purpose of performing any act under this Lease or the Indenture by a written certificate 02166504.5 4 furnished to the Trustee and the Corporation containing the specimen signature of such person or persons and signed on behalf of the City by the President of the City Council. "Completion Date" means the date of final acceptance of the Project by the City, as evidenced by the certificate provided for in Section 7.03 of this Lease. "Construction Contract" means any contract entered into by the City or the Corporation (but only where the City or the Corporation is a party to the contract) for the acquisition, construction or equipping of the Project, including but not limited to any contract between the City and any contractor, engineer, architect or Project Manager regarding the Project. "Construction Fund" means the special fund created under Section 3.10 of the Indenture for the purpose of disbursing certain proceeds derived from the sale of the Certificates in payment of the Costs of Construction. "Construction Period" means the period between the date on which the Certificates are first delivered to the Original Purchaser and the Completion Date. "Corporation" means City of Pueblo, Colorado Municipal Building Corporation, a Colorado nonprofit corporation, acting as lessor under this Lease and grantor under the Indenture, or any successor thereto. "Corporation Representative" means any of the following: (i) the Chairman or President of the Corporation; (ii) any Vice Chairman or Vice President of the Corporation; (iii) any Secretary or Assistant Secretary of the Corporation; or (iv) any other person or persons at the time designated to act on behalf of the Corporation for purposes of performing any act on behalf of the Corporation under this Lease or the Indenture by a written certificate furnished to the City and the Trustee containing the specimen signature of such person or persons and signed on behalf of the Corporation by the Chairman or President or any Vice Chairman or Vice President of the Corporation. "Costs of Construction" shall be deemed to include payment of or reimbursement for the following items: (a) obligations incurred or assumed for labor, materials and Equipment in connection with the construction, acquisition and equipping of the Project; (b) the cost of performance and payment bonds and of insurance of all kinds (including, without limitation, title insurance and, if procured and maintained by the City, builder's risk completed value insurance) that may be necessary or appropriate during the course of the acquisition, construction and equipping of the Project; (c) the costs of engineering, architectural, hydrological, geological, agronomical and other professional and technical services, including obligations incurred 02166504.5 5 or assumed for preliminary design and development work, test borings, surveys, estimates, plans and specifications; (d) the cost of the administration of, acquisition, construction and equipping of the Project incurred prior to the Completion Date, including supervision of construction as well as the performance of all of the other duties required by or consequent upon the construction, acquisition and equipping of the Project; including, without limitation, costs of preparing and securing all Project Documents, architectural fees, legal fees and expenses, independent inspection fees, engineering fees, auditing fees and advertising expenses in connection with the Project; (e) costs incurred in connection with the Certificates prior to the Completion Date, including the initial compensation and expenses of the Trustee, fees of the Corporation, legal fees and expenses, costs incurred in obtaining ratings from rating agencies, costs of publication, printing and engraving, title insurance, survey, recording and filing fees and any and all other costs of issuance; (f) the salary and expenses of the Project Manager, if any, and all costs which shall be required to be paid under the terms of any Construction Contract; (g) all other costs which are considered to be a part of the costs of the Project in accordance with generally accepted accounting principles and which will not affect adversely the exclusion from federal income taxation of the designated interest component of Base Rentals payable by the City under this Lease and assigned pursuant to the Indenture and the Certificates; and (h) payments of Base Rentals or payments for redemption of Certificates, at the City's option, from any moneys remaining in the Construction Fund subsequent to the Completion Date, as provided in Section 3.11 of the Indenture. "EDA Grant" means the grant received by the City from the Economic Development Administration of the United States Department of Commerce for the acquisition, construction and equipping of the City Portion of the Project. "Equipment" means items of equipment, machinery and related property acquired and installed in connection with the Project with proceeds from the sale of the Certificates, and any items of equipment, machinery and related property acquired in replacement or substitution therefor pursuant to Sections 9.02, 9.03 and 10.02 of this Lease; less machinery, equipment and related property released from this Lease pursuant to Section 9.03 of this Lease. "Event of Default" means one or more events of default as defined in Section 14.01 of this Lease. 02166504.5 6 "Event of Nonappropriation" means a nonrenewal of this Lease by the City, determined by the failure of the City Council, for any reason, to budget and appropriate, specifically with respect to this Lease, moneys sufficient to pay all Base Rentals and reasonably estimated Additional Rentals, as provided in Section 6.06 of this Lease. "Expenses Fund" means the special fund created under and to be disbursed as provided in Section 3.12 of the Indenture, and includes the Extraordinary Expenses Account and the Insurance Account thereof. "Extraordinary Redemption Fund" means the trust fund created under Section 3.09 of the Indenture. "Extraordinary Revenues" means (i) the Purchase Option Price, if paid; (ii) any amounts remaining in the Construction Fund, subsequent to the Completion Date, which the City instructs to be deposited in the Extraordinary Redemption Fund pursuant to Section 3.11 of the Indenture; (iii) all Net Proceeds, if any, of casualty insurance, title insurance, performance bonds, condemnation awards and awards resulting from defaults under the Construction Contract in connection with the Project, and not applied to the repair, restoration, modification, improvement or replacement of the Project, which are received pursuant to the provisions of this Lease, including, but not limited to, Section 10.03(b) hereof; and (iv) all Net Proceeds, if any, derived from subleasing the Land or and the CIty Portion of the Project any portion thereof, and the leasing, sale or assignment of the Trustee's interest in the Land and the Project, pursuant to Section 7.02 of the Indenture. "Financing Statements" means the Uniform Commercial Code - Financing Statements -Form UCC -1 or any other form acceptable to the Trustee as required by Section 7.02 hereof. "Force Majeure" means, without limitation, the following: acts of God, strikes, lockouts or other industrial disturbances; acts of public enemies; orders of 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 Corporation or the City. "Ground Lease" means that certain Ground Lease Agreement, dated of even date herewith, between the City as lessor thereunder of the Land and the City Portion of the Project and the Corporation as lessee thereunder of the Land and the City Portion of the Project, and any amendments or supplements thereto. "Indenture" means that certain Mortgage and Indenture of Trust, dated of even date herewith between the Corporation and the Trustee, and any amendments or supplements thereto. 02166504.5 7 "Independent Counsel" means an attorney duly admitted to the practice of law before the highest court in the State and who is not an employee of the Corporation, the Trustee or the City. "Land" means the parcel of real estate described in Exhibit A attached hereto and, by this reference, expressly incorporated herein, owned by the City and leased by the City to the Corporation under the Ground Lease, and subleased to the City by the Corporation under this Lease. "Lease" means this Lease Purchase and Sublease Agreement and any amendments or supplements hereto, including the Exhibits attached hereto. "Lease Term" means the Original Term and any Renewal Terms as to which the City may exercise its option to renew this Lease, as further provided under Section 4.01 of this Lease; subject to the terms and provisions of Sections 4.02, 6.01, 6.02 and 6.06 of this Lease. "Lease Term" refers to the time during which the City is the lessee and sublessee under this Lease; provided, however, certain provisions of this Lease survive the termination of the Lease Term, as further provided in Section 4.02 of this Lease. "Material Event" means any of the following events, if material, with respect to the Series 1995 Certificates: (a) Principal and interest payment delinquencies; (b) Non - payment related defaults; (c) Unscheduled draws on debt service reserves reflecting financial difficulties; (d) Unscheduled draws on credit enhancements reflecting financial difficulties; (e) Substitution of credit or liquidity providers or their failure to perform; (f) Adverse tax opinions or events affecting the tax- exempt status of the Series 1995 Certificates; (g) Modifications to rights of owners of the Series 1995 Certificates; (h) Calls of Series 1995 Certificates; (i) Defeasances of Series 1995 Certificates; 0) Release, substitution, or sale of property securing repayment of the Series 1995 Certificates; and 02166504.5 8 (k) Rating changes. "Material Event Notice" means written or electronic notice of a Material Event. WSW' means the Municipal Securities Rulemaking Board. The current address of the MSRB is 1640 King Street, #300, Alexandria, Virginia 22314. "NRMSIR" means a nationally recognized municipal securities information repository, as recognized from time to time by the Securities and Exchange Commission for the purposes referred to in the Rule (as defined in Section 11.08 hereof). The NRMSIRs as of the date of this Lease are as follows: Kenny Information Systems, 65 Broadway -16th Floor, New York, New York 10006 -2503; Thompson Financial Services, Attention: Municipal Disclosure, 395 Hudson Street, New York, New York 10014 -3669; Disclosure Inc., 5161 River Road, Bethesda, Maryland 20816 -1584; Moody's NRMSIR, 99 Church Street, New York, New York 10007; and Bloomberg Municipal Repositories, P.O. Box 840, Princeton, New Jersey 08542 -0840. "Net Proceeds, " when used with respect to any performance or payment bond proceeds, or proceeds from policies of insurance required hereby, or proceeds from any condemnation award, or proceeds from any leasing or subleasing of the Project and the Land, means the amount remaining after deducting from the gross proceeds thereof all expenses (including, without limitation, attorneys' fees and costs) incurred in the collection of such proceeds or award. "Official Statement" means the Official Statement dated October _, 1995, as supplemented, delivered in connection with the original issue and sale of the Series 1995 Certificates. "Opinion of Counsel" means an opinion in writing of legal counsel, who may be counsel to the Trustee, the City or the Corporation. "Original Purchaser" means Lewis, De Rozario & Co. Incorporation, and its successors and assigns. "Original Term" means the portion of the Lease Term which terminates on December 31, 1995. "Permitted Encumbrances" means, as of any particular time, (a) liens for taxes and assessments not then delinquent, or liens which may remain unpaid pursuant to the provisions of Article VIII and Article IX of this Lease; (b) this Lease, the Ground Lease and the Indenture; (c) utility, access and other easements and rights of way, restrictions and exceptions which the City Representative certifies in writing do not interfere with or impair the use of the Project for the purposes for which such Project was intended, all as provided in Section 11.04 hereof; (d) any Financing Statements filed to perfect security interests pursuant to this Lease, the Ground Lease or the Indenture; (e) any financing statements filed to perfect purchase money security 02166504.5 9 interests in equipment purchased to replace or in substitution for Equipment purchased with the proceeds of the Certificates; (f) such minor defects, irregularities, encumbrances and clouds on title as normally exist with respect to property of the general character of the Project and which the City Representative certifies in writing do not materially impair the value of or title to or the use of the Project for the purposes for which such Project was intended, (g) all conditions attached to and made a part of the EDA Grant, and (h) those encumbrances and exceptions to title set forth in Exhibit D attached hereto and, by this reference, expressly incorporated herein. "Person" means any natural person, corporation, partnership, trust or any other legally recognized entity. "Project" means, collectively, the Land, the Building and the Equipment. "Project Documents" means the following: (i) plans, drawings and specifications for the Building, when and as they are approved by the City, including change orders, if any, as provided in Section 7.01 of this Lease; (ii) a survey of the Land described in Exhibit A hereto, prepared by a registered land surveyor in accordance with standard requirements for land title surveys, showing the location of all improvements, easements, encroachments and other encumbrances on such real estate; (iii) any necessary permits for acquisition, construction and equipping of the Project, including any building permits and certificates of occupancy; (iv) any and all Construction Contracts; (v) policies of title, casualty, public liability and workmen's compensation insurance, or certificates thereof, as required by this Lease with respect to the Project; (vi) performance and payment bonds with respect to the Building; (vii) the executed contracts with the architects, engineers, hydrologists, geologists or agronomists hired by the City in connection with the preparation of plans, drawings and specifications for the Building; (viii) any and all other material documents executed by or furnished to the City in connection with the construction, acquisition and equipping of the Project. "Project Manager" means the person, if any, at the time employed by the City for the purpose of supervising the design, acquisition, construction and equipping of the Project and managing the Project. Notice of the appointment of such person shall be by written certificate furnished to the Trustee and the Corporation containing the specimen signature of such person and signed on behalf of the City by the President of the City Council. In the absence of the appointment of such person, the City's Public Works Director shall act as Project Manager. "Purchase Option Price" means the amount payable, at the option of the City, for the purpose of terminating this Lease and purchasing the Project, which amount shall be equal to such amount as shall be necessary to discharge the Indenture in the manner provided in Article VI of the Indenture. "Rebate Fund" means the trust fund by that name created pursuant to Section 3.17 of the Indenture. 02166504.5 10 "Registered Owner" of a Certificate means the registered owner of any Certificate, as shown in the registration books of the Trustee. "Renewal Date" means December 31, 1995 and each December 31 thereafter. "Renewal Term" means any optional Renewal Term of the Lease Term as provided in Article IV of this Lease. "Reserve Fund" means the special fund created under Section 3.07 of the Indenture, which is to be disbursed as provided in Section 3.08 of the Indenture. "Reserve Fund Requirement" means $122,000, plus, in the event Additional Certificates are issued by the City, an amount equal to the least of (a) ten percent (10 %) of the aggregate principal amount of such Additional Certificates, (b) 125 % of the average annual debt service of such Additional Certificates and (c) the maximum annual debt service on such Additional Certificates. "Revenues" means (a) Extraordinary Revenues, if any, (b) the Base Rentals; (c) any portion of the proceeds of the Certificates deposited with the Trustee in the Certificate Fund to pay accrued interest or capitalized interest on the Certificates; (d) any earnings on moneys on deposit in the Certificate Fund except to the extent such earnings are deposited in the Rebate Fund; (e) all other revenues derived from this Lease, excluding Additional Rentals and excluding payments constituting compensation to the Trustee for its services; and (f) any other moneys to which the Trustee may be entitled for the benefit of the Registered Owners. "Series 1995 Certificates" means the initial series of the Certificates issued in the aggregate principal amount of $1,220,000. "SID" means any state information depository as operated or designated by the State of Colorado as such for the purposes referred to in the Rule (as defined in Section 11.08 hereof). As of the date of this Lease, no SID exists within the State. "State" means the State of Colorado. "Termination Event" means (a) an Event of Nonappropriation, (b) an Event of Default under this Lease followed by a determination by the Trustee to terminate this Lease, or (c) an exercise by the City of its right to terminate this Lease under Section 10.03 of the Lease. "Trustee" means The Bank of Cherry Creek, N.A., a national banking association, with its principal corporate trust office located in Pueblo, Colorado, acting in the capacity of trustee for the Registered Owners pursuant to the Indenture, and any successor thereto appointed under the Indenture. 02166504.5 11 "Trustee Representative" means the person or persons at the time designated to act on behalf of the Trustee for purposes of performing any act on behalf of the Trustee under the indenture, this Lease or the Ground Lease by a written certificate furnished to the City and the Corporation containing the specimen signature of such person or persons and signed on behalf of the Trustee by any duly authorized officer of the Trustee. ARTICLE II REPRESENTATIONS, COVENANTS AND WARRANTIES Section 2.01. Representations, Covenants and Warranties of the City. The City represents, covenants and warrants for the benefit of the Trustee, the Registered Owners and the Corporation as follows: (a) The City is a home rule municipality duly organized and existing under article XX of the Constitution of the State and the Charter of the City. The City is authorized by its Charter to enter into the transactions contemplated by this Lease and the Ground Lease and to carry out its obligations hereunder and thereunder. The City has duly authorized and approved the execution and delivery of this Lease and other documents related to this transaction. (b) The Project will be designed and constructed so as to comply with all applicable building and zoning ordinances and regulations, if any. (c) The acquisition, construction and equipping of the Project, under the terms and conditions provided for in this Lease, is necessary, convenient and in furtherance of the governmental purposes of the City and is in the best interests of the City and its inhabitants. (d) During the Lease Term, the Project will at all times be used by the City for the purpose of performing its lawful governmental functions (except to the extent that subleasing of the Project by the City is permitted by Section 13.02 of this Lease). (e) Neither the execution and delivery hereof, nor the fulfillment of or compliance with the terms and conditions hereof, nor the consummation of the transactions contemplated hereby, conflicts with or results in a breach of the terms, conditions or 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 or results in the creation or imposition of any lien or encumbrance whatsoever upon any of the property or assets of the City, except the leasehold interest of the Corporation in the Land and the City Portion of the Project. (f) There is no litigation or proceeding pending or, to the knowledge of the City, threatened against the City or any other person affecting the right of the City to ON66504.5 12 execute this Lease or the Ground Lease or the ability of the City to make the payments required hereunder or to otherwise comply with the obligations contained herein. (g) The City owns or will own the Land and the City Portion of the Project and the Corporation has a leasehold interest in the Land and the City Portion of the Project pursuant to the Ground Lease. Section 2.02. Representations, Covenants and Warranties of Corporation. The Corporation represents, covenants and warrants for the benefit of the City, the Trustee and the Registered Owners as follows: (a) The Corporation is a nonprofit corporation duly organized, existing and in good standing under the laws of the State, is duly qualified to do business in the State, has all requisite power and authority to enter into and perform and observe the covenants and agreements on its part to be performed and /or observed in this Lease and the Ground Lease, is possessed of full power and authority to own and hold real and personal property and to lease and sublease the same as lessee, lessor and sublessor, and by proper action has duly authorized the execution and delivery of this Lease and the Ground Lease. (b) The Corporation will not pledge or assign the Revenues or any of its other rights under this Lease and the Ground Lease except pursuant to the Indenture, and except for any assignment pursuant to Section 13.01 of this Lease; and the Corporation will not mortgage or encumber the Project, except for Permitted Encumbrances. (c) Neither the execution and delivery hereof, nor the fulfillment of or compliance with the terms and conditions hereof, nor the consummation of the transactions contemplated hereby, conflicts with or results in a breach of the terms, conditions and provisions of any restriction or any agreement or instrument to which the Corporation is now a party or by which the Corporation is bound, or constitutes a default under any of the foregoing and will not conflict with or constitute a violation of any constitutional or statutory provision or order, rule, regulation, decree or ordinance of any court, government or governmental authority having jurisdiction over the Corporation or its property and which conflict or violation will have a material and adverse effect on the Corporation, the Project or the operation of the Project. (d) The Corporation acknowledges and recognizes that this Lease will be terminated at the end of the Original Term or any Renewal Term in the event that sufficient funds are not budgeted and appropriated by the City, specifically with respect to this Lease, to continue paying all Base Rentals and Additional Rentals during the next occurring Renewal Term, and that the acts of budgeting and appropriating funds are legislative acts and, as such, are solely within the discretion of the City Council. M166504.5 13 (e) The Corporation agrees that so long as any of the Certificates are Outstanding, it will maintain its existence, will continue to be qualified to do business in the State, will maintain its principal place of business in the State, will not dissolve and will not consolidate with or merge into another legal entity or permit one or more other legal entities to consolidate with or merge into it. (f) There is no litigation or proceeding pending or, to the knowledge of the Corporation, threatened against the Corporation or any other person affecting the right of the Corporation to execute or deliver this Lease, the Ground Lease and the Indenture (or any of the foregoing) or to comply with its obligations under this Lease, the Ground Lease and the Indenture (or any of the foregoing). Neither the execution and delivery of this Lease, the Ground Lease or the Indenture by the Corporation, nor compliance by the Corporation with its obligations under this Lease, the Ground Lease and the Indenture (or any of the foregoing), require the approval of any regulatory body, any parent company, or any other entity, which approval has not been obtained. (g) This Lease constitutes a legal, valid and binding obligation of the Corporation enforceable in accordance with its terms. ARTICLE III DEMISING CLAUSE The Corporation demises and leases the Certificate Portion of the Project, and demises and subleases the Land and the City Portion of the Project, to the City, and the City leases the Certificate Portion of the Project, and subleases the Land and the City Portion of the Project, from the Corporation, in accordance with the provisions of this Lease, subject only to Permitted Encumbrances, to have and to hold for the Original Term and the Renewal Terms, if any. The City and the Corporation acknowledge that the City owns the Land and the City Portion of the Project and has leased the Land and the City Portion of the Project to the Corporation pursuant to the Ground Lease; and that the City and the Corporation intend that there be no merger of the City's interests as lessee and sublessee under this Lease and the City's ownership interest in the Land and the City Portion of the Project so as to cause the cancellation of the Ground Lease or this Lease, or an impairment of the leasehold and subleasehold interests intended to be created by the Ground Lease or this Lease. ARTICLE IV LEASE TERM Section 4.01. Commencement of Lease Term; Renewals. The Lease Term shall commence as of November 15, 1995. The Original Term shall terminate on December 31, 1996. The Lease Term may be continued, solely at the option of the City, for the first Renewal 02166504.5 14 Term and for additional Renewal Terms thereafter, each of one year in duration, except that the final Renewal Term, if any, shall commence on January 1, 2015 and shall terminate on December 31, 2015 or, if all Base Rentals and Additional Rentals for such Renewal Term and the Certificates Outstanding have not then been paid by the City, on such later date as all Base Rentals, Additional Rentals and the Certificates Outstanding are paid by the City. In the event that the City shall determine, for any reason, not to renew this Lease, the City shall give written notice to such effect to the Trustee, the Corporation and the Original Purchaser not less than 30 days prior to the end of the Original Term or the then current Renewal Term; provided, however, that a failure to give such notice shall not constitute an Event of Default, nor prevent the City from declining to renew this Lease, nor result in any liability on the part of the City. The option of the City to renew or not to renew this Lease shall be conclusively determined by whether or not the City Council has, on or before the December 31 immediately preceding the commencement of any Renewal Term, budgeted and appropriated, specifically with respect to this Lease, moneys sufficient to pay all the Base Rentals and reasonably estimated Additional Rentals for such ensuing Renewal Term, all as further provided in Section 6.06 of this Lease. It is the intention of the City Council that the decision to renew or not to renew this Lease shall be made solely by the City Council and not by any other City officer, and the City Manager of the City (or any other officer at any time charged with the responsibility of formulating budget proposals) is hereby directed to include in the budget proposals submitted to the City Council, in any year in which this Lease shall be in effect, items for all payments required for the ensuing Renewal Term under this Lease. The City shall in any event, whether or not this Lease is to be renewed, furnish the Trustee, the Corporation and the Original Purchaser with copies of its annual budget promptly after the budget is adopted. The terms and conditions during any Renewal Term shall be the same as the terms and conditions during the Original Term, except that the Base Rentals shall be as provided in Exhibit B to this Lease. Section 4.02. Termination of Lease Term. The Lease Term shall terminate upon the earliest to occur of any of the following events: (a) The expiration of the Original Term or any Renewal Term during which there occurs an Event of Nonappropriation (which is not thereafter waived) pursuant to Article VI of this Lease; (b) The City shall have purchased the Certificate Portion of the Project as provided in Article XII of this Lease and the Certificates shall have been paid or deemed paid pursuant to Article VI of the Indenture; provided, however, that, in the event of discharge of the Indenture pursuant to the second paragraph of Article VI of the 02166504.5 15 Indenture, this Lease shall remain in effect solely for the purpose of conferring rights upon the Registered Owners to payments of principal of, premium, if any, and interest on the Certificates solely from moneys or Federal Securities deposited in accordance with the Indenture; (c) Discharge of the Indenture, as provided in Article VI of the Indenture (except that, in the event of discharge of the Indenture pursuant to the second paragraph of Article VI of the Indenture, this Lease shall remain in effect solely for the purpose of conferring rights upon the Registered Owners to payments of principal of, premium, if any, and interest on the Certificates solely from moneys or Federal Securities deposited in accordance with the Indenture); (d) An Event of Default and termination of the Lease Term by the Trustee under Article XIV of this Lease; (e) The election of the City to terminate the Lease Term pursuant to Section 10.03(b) of this Lease; or (f) December 31, 2015, which date constitutes the last day of the final Renewal Term of this Lease, or such later date as all Base Rentals and Additional Rentals required hereunder shall be paid, with the effect that the Certificates shall be paid or deemed paid pursuant to Article VI of the Indenture. Termination of the Lease Term shall terminate all unaccrued obligations of the City under this Lease (except for the application of Section 14.02(b)(i) hereof, in the event the City holds over), and shall terminate the rights of the City to possession of the Project and the Land under this Lease (except to the extent of any conveyance pursuant to Article XII of this Lease); but all other provisions of this Lease, including all obligations of the City hereunder accrued prior to such termination, and all obligations of the Trustee with respect to the Registered Owners and the receipt and disbursement of funds, shall be continuing until the Indenture is discharged as provided in Article VI of the Indenture (subject to the proviso of (c) above, if applicable). ARTICLE V ENJOYMENT OF LAND AND PROJECT The Corporation hereby covenants that the City shall during the Lease Term peaceably and quietly have and hold and enjoy the Project and the Land without suit, trouble or hindrance from the Corporation, except as expressly required or permitted by this Lease, the Ground Lease or the Indenture. The Corporation shall not interfere with the quiet use and enjoyment of the Project and the Land by the City during the Lease Term, so long as the Lease Term shall be in effect. The Corporation shall, at the request of the City and at the cost of the City, join and cooperate fully in any legal action in which the City asserts its right to such possession and enjoyment, or which involves the imposition of any taxes or other governmental charges on or 02/66s04.5 16 in connection with the Land or the Project. In addition, the City may at its own expense join in any legal action affecting its possession and enjoyment of the Land or the Project, and shall be joined (to the extent legally possible, and at the expense of the City) in any action affecting its liabilities hereunder. The provisions of this Article shall be subject to the right of the Trustee to inspect the Project as provided in Section 10.03 of the Indenture, and to the right of the Trustee to complete the acquisition, construction and equipping of the Project under certain circumstances as provided in Section 7.01 of this Lease. The City also hereby consents to the provisions of Section 10.03 of the Indenture relating to inspection of records by the Trustee. Equitable title to the Project shall be deemed to vest in the City, subject to the rights of the Corporation and the Trustee under this Lease and the Indenture. ARTICLE VI PAYMENTS BY THE CITY Section 6.01. Payments to Constitute Currently Budgeted Expenditures of the City. The City and the Corporation acknowledge and agree that the Base Rentals and Additional Rentals hereunder shall constitute currently budgeted expenditures of the City. The obligations of the City under this Lease shall be from year to year only (as further provided in Sections 4.01, 4.02, 6.02 and 6.06 hereof), and shall not constitute a mandatory payment obligation of the City in any fiscal year beyond a fiscal year during which this Lease shall be in effect. No provision of this Lease shall be construed or interpreted as creating a general obligation or other indebtedness of the City within the meaning of any constitutional, statutory or Charter debt limitation. No provision of this Lease shall be construed or interpreted as creating a delegation of governmental powers or as a donation by or a lending of the credit of the City within the meaning of Section 1 or 2 of Article XI of the Constitution of the State. Neither this Lease nor the issuance of the Certificates shall directly or indirectly obligate the City to make any payments beyond those appropriated for any fiscal year in which this Lease shall be in effect. The City shall be under no obligation to exercise its option to purchase the Project. No provision of this Lease shall be construed to pledge or to create a lien on any class or source of City moneys (except in respect of moneys on deposit in the funds and accounts created under the Indenture). No provision of this Lease shall restrict the future issuance of any City bonds or obligations payable from any class or source of City moneys (provided, however, that the restrictions of Section 2.11 of the Indenture shall apply to the issuance of Additional Certificates). Section 6.02. Base Rentals and Additional Rentals. The City shall pay Base Rentals directly to the Trustee for distribution to the Registered Owners in accordance with the Indenture during the Lease Term in the amounts and on the due. dates set forth in Exhibit B to this Lease. 02166504.5 17 The Base Rentals during the Original Term and any Renewal Terms shall be in the amounts in the "Total Base Rentals" column, as set forth in Exhibit B to this Lease. There shall be credited against the amount of Base Rentals otherwise payable hereunder all amounts at the time on deposit in the Certificate Fund and available for such payments to Registered Owners. The initial Base Rentals to be paid by the City on June 15, 1996 and December 15, 1996 shall be in consideration for the use of the Project and the Land by the City from November 15, 1995 until and including December 31, 1996. Thereafter, Base Rentals due on any June 15 shall be in consideration for the use of the Project and the Land by the City from the immediately preceding January 1 to and including the immediately following June 30; and Base Rentals due on any December 15 shall be in consideration for the use of the Project and the Land by the City from the immediately preceding July 1 to and including the immediately following December 31. In the event of any partial redemption of Certificates prior to maturity or upon the issuance of Additional Certificates, the Base Rentals shall be recalculated by the Trustee, so that the Base Rentals payable on June 15 and December 15 shall be equal to the amount necessary to pay the principal of and interest on the Certificates coming due on the next July 1 or January 1, as the case may be. The City shall pay Additional Rentals during the Lease Term as herein provided. The Additional Rentals during the Lease Term shall be in an amount sufficient to pay the fees and expenses of the Trustee, payments for the cost of all taxes, insurance premiums, utility charges, maintenance and repair costs, and all other expenses expressly required to be paid hereunder or under the Indenture, including but not limited to costs and expenses charged to or incurred by the Corporation at the request of the City and in its capacity as Corporation hereunder, as well as for payments into the Reserve Fund or the Rebate Fund required by the Indenture. All Additional Rentals shall be paid by the City on a timely basis directly to the Person to which such Additional Rentals are owed (except that payments into the Reserve Fund and the Rebate Fund shall be made to the Trustee as provided in the Indenture). If the estimates of the City of Additional Rentals for any Renewal Term are not itemized in the budget required to be furnished to the Trustee, the Corporation and the Original Purchaser under Section 4.01 of this Lease, the City shall furnish an itemization of such estimated Additional Rentals to the Trustee, the Corporation and the Original Purchaser on or before the December 15 preceding such Renewal Term. Section 6.03. Interest Component. A portion of each payment of Base Rentals is paid as, and represents payment of, interest. Exhibit B attached hereto, as it may be amended hereunder, sets forth the interest component of each payment of Base Rentals. Section 6.04. Manner of Payment. The Base Rentals and, if paid, the Purchase Option Price, shall be paid in lawful money of the United States of America to the Trustee at its principal corporate trust office. The obligation of the City to pay the Base Rentals and Additional Rentals required under this Article and other sections hereof, during the Lease Term, shall be absolute and unconditional, and payment of the Base Rentals and Additional Rentals shall not be abated through accident, unforeseen circumstances, damage, destruction, 02166504.5 18 condemnation, failure of consideration or loss of title to the Project or the Land. Notwithstanding any dispute between the City and the Corporation, the Trustee, any Registered Owner, any contractor or subcontractor retained with respect to the Project, any supplier of labor or materials in connection therewith, or any other person, the City shall, during the Lease Term, make all payments of Base Rentals and Additional Rentals when due and shall not withhold any Base Rentals or Additional Rentals pending final resolution of such dispute (except to the extent permitted by Sections 8.02 and 9.04 hereof with respect to certain Additional Rentals), nor shall the City assert any right of set -off or counterclaim against its obligation to make such payments required hereunder. No action or inaction on the part of the Corporation or the Trustee shall affect the City's obligation to pay all Base Rentals and Additional Rentals (except to the extent provided by Sections 8.02 and 9.04 hereof with respect to certain Additional Rentals), during the Lease Term. Section 6.05. Expression of the City's Need for the Project, Determinations as to Fair Market Value and Fair Purchase Price. The City hereby declares its current need for the Project. It is hereby declared to be the present intention and expectation of the City Council that this Lease will be renewed annually until title to the Certificate Portion of the Project is acquired by the City pursuant to this Lease; but this declaration shall not be construed as contractually obligating or otherwise binding the City. The City and the Corporation hereby agree and determine that the Base Rentals hereunder, during the Original Term and any Renewal Term, represent the fair value of the use of the Project and the Land; and that the Purchase Option Price represents the fair purchase price of the Certificate Portion of the Project. The City hereby determines that the Base Rentals do not exceed a reasonable amount so as to place the City under an economic or practical compulsion to renew this Lease or to exercise its option to purchase the Certificate Portion of the Project hereunder. In making such determinations, the City and the Corporation have given consideration to the Costs of Construction, the value of the Land, the uses and purposes for which the Project will be employed by the City, the benefit to the City by reason of the acquisition and construction of the Project and the use and occupancy of the Project and the Land pursuant to the terms and provisions of this Lease, the option of the City to purchase the Project, and the expected eventual vesting of title to the Project in the City. The City hereby determines and declares that the acquisition and construction of the Project and the leasing of the Certificate Portion of the Project and the subleasing of the Land and the City Portion of the Project pursuant to this Lease will result in a parking facility of comparable quality and meeting the same requirements and standards as would be necessary if the acquisition, construction and equipping of the Project were performed by the City other than pursuant to this Lease. The City hereby determines and declares that the period during which the City has an option to purchase the Certificate Portion of the Project (i.e., the maximum term of this Lease including all Renewal Terms) does not exceed the useful life of the Project. Section 6.06. Nonappropriation. In the event that the City Council shall not budget and appropriate, specifically with respect to this Lease, on or before December 31 of each year, moneys sufficient to pay all Base Rentals and the reasonably estimated Additional Rentals coming due for the next ensuing Renewal Term, an Event of Nonappropriation shall be deemed to have occurred (provided, however, that the Trustee shall declare an Event of 02166504.5 19 Nonappropriation on any earlier date on which the Trustee receives written notice from the City that this Lease will not be renewed; and provided further that the Trustee may waive any Event of Nonappropriation which is cured by the City within a reasonable time if in the judgment of the Trustee such waiver is in the best interests of the Registered Owners). In the event that during the Original Term or any Renewal Term, any Additional Rentals shall become due which were not included in the current budget of the City, or which exceed the amounts which were included therefor in the current budget of the City, and if there are no moneys available to pay such Additional Rentals pursuant to Section 3.08 of the Indenture, then, in the event that moneys are not specifically budgeted and appropriated to pay such Additional Rentals within 90 days subsequent to the date upon which such Additional Rentals are due, an Event of Nonappropriation shall be deemed to have occurred, upon notice by the Trustee to the City to such effect (subject to waiver by the Trustee as hereinbefore provided). If an Event of Nonappropriation occurs, the City shall not be obligated to make payment of the Base Rentals or Additional Rentals or any other payments provided for herein which accrue after the last day of the Original or Renewal Term during which such Event of Nonappropriation occurs; provided, however, that, subject to the limitations of Section 14.03 hereof, the City shall continue to be liable for Base Rentals and Additional Rentals allocable to any period during which the City shall continue to occupy the Project. The City shall in all events vacate the Project (leaving the Equipment) and the Land by the expiration of the Original or Renewal Term during which an Event of Nonappropriation occurs. The City and the Corporation hereby acknowledge and agree that any termination of this Lease, whether pursuant to this Section, Section 10.03(b) or Section 14.02 hereof, shall terminate the City's rights as to the Project and the Land, until the Ground Lease expires in accordance with its terms. The Trustee, upon the occurrence of an Event of Nonappropriation or an Event of Default, shall be entitled to all moneys then on hand and being held in all funds created under the Indenture, including the Construction Fund but excluding the Rebate Fund, for the benefit of the Registered Owners. After the expiration of the Original or Renewal Term during which an Event of Nonappropriation or an Event of Default occurs, the Trustee may proceed to foreclose on and sell, lease or assign its interest in the Project or any portion thereof, sublease the Land and exercise the rights and remedies of a secured party under the Colorado Uniform Commercial Code with respect to the Equipment, as provided in Section 7.02 of the Indenture, or take one or any combination of the steps described in paragraphs (a), (b) and (c) of Section 14.02 of this Lease. All property, funds and rights acquired by the Trustee by reason of any Event of Nonappropriation or an Event of Default as provided herein, less any moneys due and owing to the Trustee, shall be held by the Trustee for the benefit of the Registered Owners as set forth in the Indenture. Section 6.07. Disposition of Base Rentals. Upon receipt by the Trustee of each payment of Base Rentals, the Trustee shall apply the amount of such Base Rentals in the following manner and order: 02166504.5 20 First, the amount of such payment of Base Rentals designated and paid as interest under Exhibit B, plus the amount of any past due interest on the Certificates, shall be deposited in the Interest Account of the Certificate Fund. Second, the remaining portion of such payment of Base Rentals shall be deposited in the Principal Account of the Certificate Fund. ARTICLE VII CONSTRUCTION OF THE PROJECT Section 7.01. Agreement to Construct the Project. The City shall cause the Project to be acquired, constructed, improved and equipped as herein provided, on behalf of the Corporation as holder of title to the Certificate Portion of the Project. Title to the Certificate Portion of the Project or interests therein, buildings or other property which is purchased or financed from moneys deposited in the Construction Fund shall be held by the Corporation, subject only to this Lease, and the Indenture and other Permitted Encumbrances. Title to the Land and the City Portion of the Project shall be held by the City, subject to the Ground Lease, this Lease and the Indenture. The City hereby agrees that in order to effectuate the purposes of this Lease it will make, execute, acknowledge and transmit any and all contracts, orders, receipts, writings and instructions with any other persons, firms or corporations and in general do all things which may be necessary or proper, all for the construction, acquisition and equipping of the Project, on behalf of the Corporation as owner of the Project. Acquisition, construction and equipping of the Project shall be in accordance with the Project Documents, subject to reasonable change orders or any other reasonable changes approved by the City. So long as this Lease is in full force and effect and no Event of Nonappropriation or Event of Default shall have occurred, the City shall have full power to carry out the acts and agreements provided in this Section, and such power is granted and conferred under this Lease to the City, and is accepted by the City, and shall not be terminated or restricted by act of the Corporation, the Trustee or the City, except as provided in this Section. The City agrees to acquire, construct and equip the Certificate Portion of the Project on behalf of the Corporation as owner of the Project, through the application of moneys to be disbursed from the Construction Fund pursuant to Section 7.02 of this Lease and Section 3.10 of the Indenture by the Trustee at the direction of the City. In the event that the Project shall not have been substantially completed, as evidenced by the certificate provided for in Section 7.03 of this Lease, by June 1, 1997, the Trustee shall, upon 30 days written notice to the City, be authorized, but not required, to complete the Project, without any direction by the City, from any moneys remaining in the Construction Fund. The Trustee shall also be authorized, but not required, to complete the Project without direction by the City upon the occurrence of a Termination Event. 02166504.5 21 The City represents that, based upon an examination of information presented to the City, including but not limited to estimated acquisition, construction and equipment costs, the Project can be acquired, constructed and equipped for a total price which does not exceed the sum of the EDA Grant, any additional moneys provided by the City and the Certificate proceeds deposited in the Construction Fund, plus investment income from the investment and reinvestment of amounts on deposit in the Construction Fund. In the event of cost overruns and if no Event of Termination has occurred, the City shall select any one or a combination of the following options: (a) the City shall require the architect or engineer for the Project to modify the plans and specifications or redesign the Project as may be necessary in order to bring the Costs of Construction for the Project within the amount available therefor; or (b) the City shall provide additional moneys to be used for the City Portion of the Project; provided, however, that amounts so provided by the City may be expended solely for Costs of Construction which, in the opinion of nationally recognized municipal bond counsel, shall not adversely affect the validity and enforceability of this Lease; or (c) the City shall cause Additional Certificates to be issued in accordance with Section 2.11 of the Indenture in an amount sufficient to pay the additional Costs of Construction for the Project; and the City agrees that, upon exercising any such options, the City shall not be entitled to any reimbursement therefor from the Corporation, the Trustee or the Registered Owners, nor shall the City be entitled to any diminution of the Base Rentals and Additional Rentals payable under Section 6.02 of this Lease. Upon the occurrence of a Termination Event or otherwise upon termination of the City's right to direct the acquisition, construction and equipping of the Project, the Trustee may complete the Project, utilizing any moneys remaining in the Construction Fund. Section 7.02. Disbursements From the Construction Fund. Pursuant to the Indenture, the Trustee shall issue its checks or drafts for each disbursement to pay Costs of Construction provided for herein. So long as no Event of Nonappropriation or Event of Default shall occur, and so long as the right of the City to direct the acquisition, construction and equipping of the Project has not otherwise been terminated pursuant to the last sentence of Section 7.01 of this Lease, the Trustee shall, upon the request of the City, disburse moneys from the Construction Fund, in payment of Costs of Construction for the Project. Such disbursements shall be made upon receipt by the Trustee of a requisition signed by the City Representative and the Project Manager (i) 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, (d) that each obligation mentioned therein has been properly incurred, is a proper charge against the Construction Fund and has not been the basis of any previous withdrawal, 02166504.5 22 (e) that no Event of Non - appropriation or Event of Default has occurred and the right of the City to direct the acquisition, construction, improvement and equipping of the Project has not otherwise been terminated, and (f) that the disbursement requested will be used for a Cost of Construction with respect to the Project; (ii) specifying in reasonable detail the nature of the obligation; and (iii) accompanied by a bill, invoice or statement of account for such obligation. Disbursements from the Construction Fund for equipment or materials which are not immediately incorporated into or stored at the Project shall not at any time exceed $200,000, and such equipment or materials for which disbursements have been made shall, until incorporated into or stored at the Project, be stored at a place and in a manner acceptable to the Trustee. Disbursements from the Construction Fund shall be made not more frequently than once per calendar week, and the City shall submit to the Trustee a requisition as set forth in this Section at least two days prior to the date of any anticipated disbursement from the Construction Fund. Any requisition for the acquisition of any item of Equipment having a cost of $25,000 or more, or any requisition or requisitions for the acquisition of two or more substantially identical and tangible items of Equipment having a total aggregate cost of $25,000 or more, shall be accompanied by Financing Statements executed on behalf of the City, in form acceptable to the Trustee, and any other documentation reasonably requested by the Trustee in order to protect the interests of the Registered Owners. Such Financing Statements and other documentation shall not be required for requisitions for the acquisition of items of Equipment having a cost less than $25,000. Upon the occurrence of a Termination Event prior to the Completion Date, the Construction Fund may be utilized by the Trustee on behalf of the Corporation, as owner of the Certificate Portion of the Project, to complete the Project as provided in Section 7.05 hereof, or, upon termination of the Lease Term, may be disbursed as provided in Section 4.02 of the Indenture, as the Trustee may deem appropriate in the best interests of the Registered Owners. Section 7.03. Completion of Construction. Upon the substantial completion of the Project, the City Representative shall deliver a certificate to the Trustee determining that, based upon the representations of the contractors and architect for the Project, and except for any amounts estimated by the City Representative to be necessary for payment of any Costs of Construction for the Project not then due and payable, the Project has been substantially completed and all Costs of Construction for the Project have been paid. Such certificate shall contain a representation that there are no materialmen's liens with respect to the Project. Notwithstanding the foregoing, such certificate shall not, and shall state that it does not, prejudice any rights against third parties which exist on the date of such certificate or which may subsequently come into being. M166504.5 23 Section 7.04. Lease of the Land and the City Portion of the Project. The City agrees to lease the Land and the City Portion of the Project to the Corporation pursuant to the Ground Lease which shall be executed contemporaneously with or prior to the issuance of the Certificates. The City shall cause to be furnished, at the time it leases the Land to the Corporation, standard form ALTA title insurance policies upon the Land issued by a title insurance company approved by the Trustee and issued to (a) the Trustee, insuring the assignment of the Corporation's leasehold interest in the Land, and (b) the Corporation, insuring the Corporation's leasehold interest in the Land. Said title insurance policies shall be subject to no encumbrances other than Permitted Encumbrances, and shall each be issued in an amount not less than the principal amount of the Certificates, less any amount on deposit in the Reserve Fund. Section 7.05. Construction Contracts. Each Construction Contract shall provide that: (i) such Construction Contract shall be fully and freely assignable to the Trustee without the consent of any other person and the Trustee may choose to assume or not assume such Construction Contract; and (ii) if the Trustee does so assume such Construction Contract, the contractor shall perform the agreements contained therein for the Trustee. Each Construction Contract shall also provide that, upon the occurrence of a Termination Event, the Trustee may terminate such Construction Contract, and the contractor shall then be entitled to payment only from amounts available therefor in the Construction Fund and only for work done prior to such termination. Upon the occurrence of a Termination Event, or upon the Trustee's assuming control over construction of the Project as provided in the last sentence of Section 7.01 of this Lease, the City shall deliver all Project Documents held by it to the Trustee. Section 7.06. Project Documents. The City shall have and keep on file and available for inspection by the Corporation and the Trustee copies of the Project Documents (except for Project Documents which are in the possession of the Trustee), throughout the Lease Term, or as soon after the commencement of the Lease Term as such Project Documents shall become available to the City. Neither the Project Documents nor any change or amendment thereto shall (i) cause the Project to be used for any purpose prohibited hereby or by the Constitution, statutes and laws of the State or the Charter; (ii) result in a material reduction in the value of the Project; (iii) adversely affect the ability of the City to meet its obligations hereunder; or (iv) cause the City to violate its covenants in Section 11.07 hereof. Section 7.07. Defaults Under Construction Contracts. In the event of any material default by a contractor under any of the Construction Contracts, or in the event of a material breach of warranty with respect to any materials, workmanship or performance, the City 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 the Construction Contracts. So long as no Event of Default shall have occurred under the Indenture, the City shall have the right to determine the remedies to be exercised against any such contractor or surety. The Net Proceeds of any amounts recovered by way of damages, refunds, adjustments or otherwise in connection with the foregoing, remaining after deduction of expenses incurred in such recovery (including, without limitation, attorneys' fees M166504.5 24 and costs), and after reimbursement to the City of any amounts theretofore paid by the City and not previously reimbursed to the City for correcting or remedying the default or breach of warranty which gave rise to the proceedings against the contractor or surety, shall be paid to the Trustee for deposit into the Construction Fund if received before the Completion Date therefor, or if received thereafter, shall be deposited as otherwise provided in Section 10.02 of this Lease or otherwise applied as provided in Section 10.03 of this Lease. Section 7.08. Contractor's Performance and Payment Bonds. Except for any architect, engineer, hydrologist, geologist or agronomist employed by the City for construction of the Project, each contractor entering into a Construction Contract shall be required to furnish a performance bond and a separate labor and material payment bond in forms acceptable to the City, which shall be normal and standard forms thereof, copies of which shall be provided to the City and the Trustee. Such bonds shall be made payable to the City, subject to the provisions of the Indenture, shall be executed by a corporate surety licensed to transact business in the State and acceptable to the City and shall be in an amount equal to the contract price for such contractor's Construction Contract. If, at any time during the Construction Period, the surety on such bond shall be disqualified from doing business within the State, or shall otherwise become incapable (in the judgment of the Trustee) of performing its obligations under such bond, an alternate surety acceptable to the City and the Trustee shall be selected. In the event of any change order resulting in the performance of additional work in connection with the Project, the amounts of such bonds pertaining thereto shall be increased to include the cost of such additional work or materials or fixtures to be incorporated in the Project. Section 7.09. Contractor's General Public Liability and Property Damage Insurance. Each contractor and subcontractor entering into a Construction Contract shall be required to procure and maintain either standard form comprehensive general public liability and property damage insurance or standard form owners and contractors protective liability insurance, during the duration of such contractor's or subcontractor's Construction Contract, in the amount of at least $1,000,000. If standard form comprehensive general public liability and property damage insurance is procured, such policy shall include the Trustee and the Corporation as additional named insureds and shall include a provision prohibiting cancellation or termination without 30 days prior notice by certified mail to the City and the Trustee. If standard form owners and contractors protective liability insurance is procured, such policy shall include the Trustee and the Corporation as named insureds, and shall include a provision prohibiting cancellation or termination without 30 days prior notice by certified mail to the City and the Trustee. A certificate of insurance in form acceptable to the City and the Trustee shall be provided to the City and the Trustee with respect to each contractor and subcontractor. Such insurance shall provide protection from all claims for bodily injury, including death, property damage and contractual liability. Section 7.10. Contractor's Builder's Risk Completed Value Insurance. The City shall be required to procure and maintain or cause to be procured and maintained, at no cost to the Trustee (but which may be paid out of the Construction Fund) until the Project is accepted and insured by the City, standard, all risk of loss builder's risk completed value insurance upon the 02166504.5 25 Project. Such policy shall not prohibit the waiver of any rights, including but not limited to the right of subrogation, by the City and any contractor with respect to each other, their officers, agents and employees relating to claims covered by such policy. The policy shall include a provision prohibiting cancellation or termination without 30 days prior notice by certified mail to the Trustee and the City, and may have a deductible clause not in excess of $50,000; provided, however, that neither the City nor the Trustee shall thereby be deemed to have incurred any obligation to reimburse the Registered Owners or any other person for the amount of the deductible. A copy of such insurance policy, or a certificate with respect thereto, shall be provided to the City and the Trustee. Such insurance coverage shall be in an amount at least equal to the sum of all Construction Contracts. In the event of any change order resulting in the performance of additional work in connection with the Project, the amount of such insurance shall be increased to include the cost of such additional work. Such builder's risk completed value insurance policy shall name the City, the Corporation and each other party to a Construction Contract as insureds, and shall designate the Trustee as loss payee, subject to the Indenture. Each such insured shall designate the City as its agent for purposes of settlement and payment of proceeds, and no such insured shall have the power to adjust or settle any loss over $50,000 with respect to the Project without the prior written consent of the Trustee; if the loss is $50,000 or less, the City shall have the sole right to adjust or settle the loss. The consent of the Corporation shall not be required for any such adjustment or settlement. Section 7.11. Contractor's Worker's Compensation Insurance. Each contractor and subcontractor entering into a Construction Contract shall be required to procure and maintain, at its own cost and expense, worker's compensation insurance during the term of its Construction Contract, covering its employees working thereunder. Such insurance, if issued by a private carrier, shall contain a provision that such coverage shall not be canceled without 30 days' prior written notice to the City and the Trustee. A certificate issued by the state compensation insurance fund evidencing such coverage shall be provided to the City and the Trustee or, if such insurance is provided by a private carrier, a completed certificate of insurance shall be provided to the City and the Trustee by the City's independent insurance consultant with respect to each contractor and subcontractor entering into a Construction Contract. Each Construction Contract shall also provide that each subcontractor of any contractor or subcontractor who is a party to such Construction Contract shall be required to furnish similar worker's compensation insurance. Section 7.12. Proceeds of Certain Insurance Policies and Performance Bonds. The Net Proceeds of any performance or payment bond or insurance policy required by Section 7.08 or Section 7.10 of this Lease, and any Net Proceeds received as a consequence of default under a Construction Contract as provided in Section 7.07 of this Lease, shall be paid into the Construction Fund if received before the Completion Date for the Project, or, if received thereafter, shall either be deposited as provided in Section 10.02 of this Lease or otherwise applied as provided in Section 10.03 of this Lease. Section 7.13. Pledge of Certain Project Documents Under the Indenture. The City hereby acknowledges that the Corporation has granted, assigned and pledged all of its rights, 02166504.5 26 title and interest in and to the Project Documents to the Trustee under the Indenture as set forth therein. In order to facilitate such grant, assignment and pledge, the City does hereby grant, pledge and assign to the Corporation the Project Documents, including all extensions and renewals of the term thereof, if any, together with certain rights, titles and interests of the City in and to the Project Documents, including, but not limited to, the present and continuing right to make claim for, collect, receive and receipt for any of the sums, amounts, income, revenues, issues and profits and any other sums of money payable or receivable under the Project Documents, to bring actions and proceedings thereunder or for the enforcement thereof, and to do any and all things which the City under the Project Documents is or may become entitled to; provided, however, that for so long as this Lease is in effect, the City shall retain the right to bring actions and proceedings under the Project Documents and enforce the provisions thereof against the parties thereto other than the City. The City further consents and agrees to the grant, pledge and assignment of the Project Documents made by the Corporation under the Indenture. ARTICLE VIII TITLE TO THE PROJECT; LIMITATIONS ON ENCUMBRANCES Section 8.01. Title to the Project. At all times during the Lease Term, title to the Land and the City Portion of the Project shall remain in the City, subject to the Ground Lease, this Lease, the Indenture and any other Permitted Encumbrances. Except personal property purchased by the City at its own expense pursuant to Section 9.02 of this Lease and personal property purchased by the City, title to the Certificate Portion of the Project and any and all additions and modifications to or replacements of any portion of the Certificate Portion of the Project shall be held in the name of the Corporation, subject only to Permitted Encumbrances, or until the termination of the Ground Lease, notwithstanding (a) the occurrence of an Event of Nonappropriation as provided in Section 6.06 of this Lease or one or more Events of Default as defined in Section 14.01 of this Lease; (b) the occurrence of any event of damage, destruction, condemnation or construction defect or title defect, as provided in Article X of this Lease; (c) termination of the right of the City to direct the acquisition, construction and equipping of the Project pursuant to the last sentence of Section 7.01 of this Lease; or (d) the violation by the Corporation (or by the Trustee as assignee of the Corporation pursuant to the Indenture) of any provision of this Lease. The City shall have no right, title or interest in the Certificate Portion of the Project or any additions and modifications to or replacements of any portion of the Certificate Portion of the Project, except as expressly set forth in this Lease. Section 8.02. No Encumbrance, Mortgage or Pledge of Project. The City shall not permit any mechanic's or other lien to be perfected or remain against the Project; provided that, if the City shall first notify the Trustee of the intention of the City so to do, the City may in good faith contest any mechanic's or other lien filed or perfected against the Project, 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; provided, however, that during the prosecution 02166504.5 27 of such contest and appeal and until final discharge of such mechanic's or other lien, the City shall (a) provide a surety bond in the amount of such mechanic's or other lien in accordance with the laws of the State, or (b) provide affirmative title insurance coverage over such mechanic's or other lien, or (c) provide such other collateral or surety of payment as the Trustee may deem acceptable in its sole discretion. The Corporation and the Trustee will cooperate fully with the City in any such contest, upon the request and at the expense of the City. Neither the Corporation nor, except as provided above, the City, shall directly or indirectly create, incur, assume or suffer to exist any mortgage, pledge, lien, charge, encumbrance or claim on or with respect to the Land or the Project, except Permitted Encumbrances, which includes the Indenture. The City shall promptly, at its own expense, take such action as may be necessary to duly discharge any such mortgage, pledge, lien, charge, encumbrance or claim not excepted above which it shall have created, incurred or suffered to exist. The Corporation shall promptly, at its own expense, take such action as may be necessary to duly discharge any such mortgage, pledge, lien, charge, encumbrance or claim not excepted above which it shall have created or incurred. ARTICLE IX MAINTENANCE, TAXES, INSURANCE AND OTHER CHARGES Section 9.01. Maintenance of the Project by the City. The City agrees that, at all times during the Lease Term, the City will maintain, preserve and keep the Project or cause the Project to be maintained, preserved and kept, with the appurtenances and every part and parcel thereof, in good repair, working order and condition, and that the City will from time to time make or cause to be made all necessary and proper repairs, except as otherwise provided in Sections 9.03 and 10.03 of this Lease. Neither the Corporation nor the Trustee nor any of the Registered Owners, shall have any responsibility in any of these matters or for the making of any additions, modifications or replacements to the Project. Section 9.02. Modification of the Project; Installation of Furnishings and Machinery of the City. The City shall have the privilege of remodeling the Project or making substitutions, additions, modifications and improvements to the Project, at its own cost and expense; and title to the same shall be held in the name of the Corporation, subject to this Lease and the Indenture, and shall be included under the terms of this Lease and the Indenture; provided, however, that such remodeling, substitutions, additions, modifications and improvements shall not in any way damage the Project or cause the Project to be used for purposes other than lawful governmental functions of the City or cause the City to violate its covenants in Section 11.07 hereof; and provided that the Project, as remodeled, improved or altered, upon completion of such remodeling, substitutions, additions, modifications and improvements, shall be of a value not less than the value of the Project immediately prior to such remodeling or such making of substitutions, additions, modifications and improvements, as reasonably determined by the Trustee. 02166504.5 28 The City may also, from time to time in its sole discretion and at its own expense, install machinery, equipment and other tangible property in or on the Project. All such machinery, equipment and other tangible property shall remain the sole property of the City in which neither the Corporation, the Trustee nor the Registered Owners shall have any interest; provided, however, that title to any such machinery, equipment and other tangible property which becomes permanently affixed to the Project shall be in the Corporation, subject to this Lease and the Indenture, and shall be included under the terms of this Lease and the Indenture, in the event the Trustee shall reasonably determine that the Project would be damaged or impaired by the removal of such machinery, equipment or other tangible property. Section 9.03. Replacement and Substitution of Equipment. The City shall not be under any obligation to renew, repair or replace any inadequate, obsolete, worn-out, unsuitable, undesirable or unnecessary Equipment. In any instance where the City determines that any Equipment has become inadequate, obsolete, worn-out, unsuitable, undesirable or unnecessary, the City may remove such Equipment from the Project and (on behalf of the Corporation) sell, trade -in, exchange or otherwise dispose of it (as a whole or in part) without any responsibility or accountability to the Corporation or the Trustee therefor, so long as the total net book value of such Equipment disposed of in any one fiscal year by the City shall not exceed 5 % of the net book value of the Project; the City may dispose of Equipment having a total net book value in excess of such 5 % threshold or after such 5 % threshold is reached, however, provided that the City shall either: (a) substitute (by direct payment of the costs thereof or by designating as Equipment, machinery, equipment or other personal property, other than property included as part of the Project pursuant to Section 9.02 hereof) and install anywhere in or on the Project, other equipment, machinery or related property having equal or greater value and utility (but not necessarily having the same function) in the operation of the Project; or (b) not make any such substitution and installation, provided (i) in the case of the sale of any such Equipment to anyone other than itself or in the case of the scrapping thereof, the City shall pay to the Trustee for deposit into the Extraordinary Redemption Fund the net proceeds from such sale or the scrap value thereof, as the case may be, (ii) that in the case of the trade -in of such Equipment for other machinery, equipment or related property not to be installed in or on the Project, the City shall pay to the Trustee for deposit into the Extraordinary Redemption Fund the amount of the credit received by it in such trade -in and (iii) that in the case of the sale of any such Equipment to the City, or in the case of any other disposition thereof, the City shall pay to the Trustee for deposit into the Extraordinary Redemption Fund an amount equal to the original cost thereof less depreciation at rates calculated in accordance with generally accepted accounting principles. 02166504.5 29 The removal from the Project of any portion of the Equipment pursuant to the provisions of this Section shall not entitle the City to any postponement, abatement or diminution of the Base Rentals or other payments required to be made under Section 6.02 of this Lease. The City will promptly report in writing to the Trustee each removal, substitution, sale or other disposition under subsections (a) and (b) of this Section and will pay to the Trustee all amounts required by subsection (b) of this Section to be paid into the Extraordinary Redemption Fund promptly after any subsequent sale, trade -in or other disposition requiring such payment. All substituted machinery, equipment or related property installed pursuant to this Section shall be free of all liens and encumbrances (other than Permitted Encumbrances) and shall become a part of the Project. The City shall furnish to the Trustee such Financing Statements and other documentation with respect to any equipment, machinery or related property substituted as Equipment as would have been required therefor if originally acquired with moneys from the Construction Fund, as provided in Section 7.02 of this Lease. The City will not remove, or permit the removal of, any of the Equipment from the Project except in accordance with this Section or in accordance with Article X of this Lease. The Corporation and the Trustee will cooperate with the City in implementing the rights of the City to dispose of Equipment pursuant to this Section and will execute any and all conveyances, releases or other documents necessary or appropriate in connection therewith. Section 9.04. Taxes, Other Governmental Charges and Utility Charges. In the event that the Project or any portion thereof shall, for any reason, be deemed subject to taxation, assessments or charges lawfully made by any governmental body, the City shall, during the Lease Term, pay the amount of all such taxes, assessments and governmental charges then due as Additional Rentals. With respect to special assessments or other governmental charges which may be lawfully paid in installments over a period of years, the City shall be obligated to provide for Additional Rentals only for such installments as are required to be paid during the Original or any Renewal Term. The City shall not allow any liens for taxes, assessments or governmental charges to exist with respect to the Project or any portion thereof (including, without limitation, any taxes levied upon the Land, the Project or any portion thereof which, if not paid, will become a charge on the rentals and receipts from the Project or any portion thereof, or any interest therein, including the interest of the Corporation, the Trustee or the Registered Owners), or the rentals and revenues derived therefrom or hereunder. The City shall also pay as Additional Rentals, as the same respectively become due, all gas, water, steam, electricity, heat, power, telephone, utility and other charges incurred in the maintenance and upkeep of the Project. The City may, at the expense and in the name of the City and after the sending of written notice to the Trustee, in good faith contest any such taxes, assessments, utility and other charges and, in the event of any such contest, may permit the taxes, assessments, utility or other charges so contested to remain unpaid during the period of such contest and any appeal therefrom unless the Trustee shall notify the City that, in the opinion of Independent Counsel, by nonpayment of any such items the security afforded pursuant to the Indenture will be materially endangered or the Project or any portion thereof will be subject to loss or forfeiture, or the Corporation or the 02166504.5 30 Trustee will be subject to liability, in which event such taxes, assessments, utility or other charges shall be paid forthwith as Additional Rentals (provided, however, that such payment shall not constitute a waiver of the right to continue to contest such taxes, assessments, utility or other charges). Section 9.05. Provisions Regarding Casualty, Public Liability and Property Damage Insurance. Upon the completion and acceptance of the Project, as provided in Section 7.03 of this Lease, the City shall cause casualty and property damage insurance to be carried and maintained with respect to the Project or shall continue its participation in the Colorado Intergovernmental Risk Sharing Agency ( "CIRSA ") in an amount at least equal to the aggregate principal amount of the Certificates then Outstanding or the replacement cost of the Project, whichever is greater, less the amount of any deductible clause concerning such insurance. In the event that the City shall so fail to insure the Project or participate in CIRSA, the Trustee shall, using the moneys available in the Insurance Account of the Expenses Fund, pay premiums for such casualty and property damage insurance. The Trustee shall, during the Lease Term, if it is obtaining such insurance, comply with the reasonable direction of the City as to the terms of such casualty and property damage insurance, consistent with the requirements of this Section, and as to the selection of a responsible insurer to provide such casualty and property damage insurance. Any insurance policy may have a deductible clause in an amount not to exceed $150,000. The Project may be insured under a blanket insurance policy which insures other buildings as well, as long as such blanket insurance policy complies with the requirements of this Lease. If the City shall insure against similar risks by self - insurance, the City, at its election, may provide for property and casualty insurance with respect to the Project, partially or wholly by means of an adequate self - insurance fund, subject to the provisions below. Upon the execution and delivery of this Lease, the City shall, at its own expense, cause public liability insurance to be carried and maintained or shall continue its participation in CIRSA with respect to the activities to be undertaken by and on behalf of the City in connection with the use of the Project. Such public liability insurance in connection with the Project or participation in CIRSA shall be in an amount not less than the amounts provided in the Colorado Governmental Immunity Act, article 10 of title 24, Colorado Revised Statutes, as the same may be hereafter amended. Any public liability insurance acquired in accordance with this Section may be by blanket insurance policy or policies. If the City shall insure against similar risks by self - insurance, the City, at its election, may provide for public liability insurance with respect to the Project, partially or wholly by means of an adequate self - insurance fund, subject to the provisions of the following paragraph. Any self - insurance maintained by the City (participation in CIRSA shall not be deemed to be self insurance for this purpose) shall comply with the following terms: (a) the self - insurance program shall be approved by an independent insurance consultant; 02166504.5 31 (b) the self - insurance program shall include an actuarially sound claims reserve fund out of which each self - insured claim shall be paid; the adequacy of each such fund shall be evaluated on an annual basis by the independent insurance consultant; and any deficiencies in any self - insurance claims shall be remedied in accordance with the recommendation of the independent insurance consultant; (c) the self - insurance claims fund shall be held in a separate trust fund by an independent trustee who may be the Trustee; and (d) in the event the self- insurance program shall be discontinued, the actuarial soundness of its claims reserve fund, as determined by the independent insurance consultant, shall be maintained. Any casualty and property damage insurance policy required by this Section 9.05 shall be so written or endorsed as to make losses of $50,000 or less, if any, payable to the City, and losses over $50,000, if any, payable to the Trustee, who, along with the City and the Corporation, shall be a co- insured. Each insurance policy provided for in this Section shall contain a provision to the effect that the insurance company shall not cancel the policy or modify it materially and adversely to the interest of the Trustee or the Registered Owners, without first giving written notice thereof to the City and the Trustee at least 30 days in advance of such cancellation or modification. To the extent legally possible, CIRSA participation shall include similar provisions concerning loss payees and cancellation. All insurance policies issued pursuant to this Section, or certificates with respect thereto, or evidence of CIRSA participation, shall be deposited with the Trustee. No agent or employee of the City shall have the power to adjust or settle any loss with respect to the Project, whether or not covered by insurance, without the prior written consent of the Trustee. The consent of the Corporation shall not be required for any such adjustment or settlement. Section 9.06. Advances. In the event that the City shall fail to pay any Additional Rentals during the Lease Term, and if there are not sufficient moneys available therefor in the Reserve Fund, the Trustee may pay such Additional Rentals, which Additional Rentals, together with interest thereon at the rate of 18 % per annum, the City agrees to reimburse to the Trustee. ARTICLE X DAMAGE, DESTRUCTION AND CONDEMNATION; USE OF NET PROCEEDS Section 10.01. Damage, Destruction and Condemnation. If, during the Lease Term (a) the Project 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 Project or any portion thereof or the estate of the City, the Corporation or the Trustee in the Project or any portion thereof shall be taken under the exercise of the power of eminent domain by any governmental authority; or (c) a material defect in construction of the Project shall become apparent; or (d) title to or the use of all or any portion of the Project shall be lost by reason of a defect in title thereto; then the City M/66504.5 32 shall continue to be obligated, subject to the provisions of Section 10.03 of this Lease, to continue to pay the amounts specified in Sections 10.02 and 6.02 of this Lease regardless of whether the certificate provided for in Section 7.03 of this Lease shall have been delivered to the Trustee. Section 10.02. Obligation of the City to Repair and Replace the Project. Subject to the provisions of Section 10.03 of this Lease, the City and the Trustee shall cause the Net Proceeds of any insurance policies, performance bonds, condemnation awards or Net Proceeds received as a consequence of default under a Construction Contract or made available by reason of any occurrence described in Section 10.01 hereof, to be deposited in the Construction Fund, if received before the Completion Date of the Project, or, if received thereafter, to be deposited in a separate trust fund. Except as set forth in Section 10.03 of this Lease, all Net Proceeds so deposited shall be applied to the prompt repair, restoration, modification, improvement or replacement of the Project upon receipt of requisitions acceptable to the Trustee signed by the City Representative and, if drawn from the Construction Fund, the Project Manager, 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 Construction Fund, or 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. In carrying out any of the provisions of this Section, the City shall have all power and authority granted under Article VII of this Lease. The Trustee shall cooperate with the City in the administration of such fund and shall not unreasonably withhold its approval of requisitions under this Section. The balance of any such Net Proceeds remaining after such repair, restoration, modification, improvement or replacement has been completed shall, if received prior to the Completion Date, be deposited into the Construction Fund; and if received thereafter, shall be deposited into the Extraordinary Redemption Fund. Any repair, restoration, modification, improvement or replacement paid for in whole or in part out of such Net Proceeds shall be the property of the Corporation, subject to this Lease and the Indenture, and shall be included as part of the Project under this Lease and the Indenture. Section 10.03. Insufficiency of Net Proceeds, Discharge of the Obligation of the City to Repair or Replace Project. If the Net Proceeds (plus any amount withheld therefrom 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 Project as required under Section 10.02 of this Lease, the City may elect to proceed under any of the following options: (a) The City may complete the work and pay any cost in excess of the amount of the Net Proceeds, and the City agrees that, if by reason of any such insufficiency of the Net Proceeds, the City shall make any payments pursuant to the provisions of this Section 10.03(a), the City shall not be entitled to any reimbursement therefor from the Corporation, the Trustee or the Registered Owners, nor shall the City be entitled to any 02166504.5 33 diminution of the Base Rentals and Additional Rentals payable under Section 6.02 of this Lease. (b) The obligation of the City to repair or replace the Project under Section 10.02 of this Lease may, at the option of the City, be discharged by depositing the Net Proceeds of insurance policies, performance bonds or condemnation awards, or Net Proceeds received as a consequence of default under a Construction Contract, made available by reason of such occurrence, into a separate trust fund held by the Trustee to be applied in accordance with Section 11.02 of the Ground Lease. Such Net Proceeds shall be available to redeem Certificates upon the occurrence of a Termination Event in accordance with Section 4.02 of the Indenture. Upon such deposit: (i) this Lease shall terminate and all obligations of the City hereunder shall terminate (except the obligation to pay Base Rentals and Additional Rentals which would otherwise have been payable by the City hereunder during the Original or Renewal Term in which such deposit of Net Proceeds occurs); and (ii) the Trustee shall notify the City to vacate the Project (leaving the Equipment) within 30 days of such deposit; the Project shall thereafter be subleased as provided in Section 7.02 of the Indenture; and the Net Proceeds of such subleasing, together with any moneys remaining in the Construction Fund, shall also be deposited into the Extraordinary Redemption Fund for the purpose of redeeming Certificates as provided in Section 4.01(d) of the Indenture. (c) The obligation of the City to repair or replace the Project under Section 10.02 of this Lease may, at the option of the City, be discharged by applying the Net Proceeds of such insurance policies, performance bonds or condemnation awards to the payment of the Purchase Option Price, in accordance with Article XII of this Lease. In the event of an insufficiency of the Net Proceeds for such purpose, the City shall pay such amounts as may be necessary to equal. the Purchase Option Price; and in the event the Net Proceeds shall exceed the Purchase Option Price, such excess shall be paid to or retained by the City. Within 90 days of the occurrence of an event specified in Section 10.01 of this Lease, the City shall commence the repair, restoration, modification, improvement or replacement of the Project, or shall elect, by written notice to the Trustee, to proceed under the provisions of subsection (b) or subsection (c) of this Section. In the event that the City shall, after commencing the repair, restoration, modification, improvement or replacement of the Project, determine that the Net Proceeds (plus any amount withheld therefrom by reason of any deductible clause) shall be insufficient for the accomplishment thereof, the City may elect to proceed under subsection (b) or subsection (c) of this Section. Section 10.04. Cooperation of Corporation. The Corporation shall cooperate fully with the City and the Trustee in filing any proof of loss with respect to any insurance policy or performance bond covering the events described in Section 10.01 of this Lease, in the prosecution or defense of any prospective or pending condemnation proceeding with respect to the Project or any portion thereof, or in any action relating to any Construction Contract, and 022/66504.5 34 hereby assigns to the Trustee any interest it may have in such policies or rights of action for such purposes. In no event shall the Corporation 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, with respect to the Project or any portion thereof, without the written consent of the Trustee and the City. ARTICLE XI DISCLAD4ER OF WARRANTIES; OTHER COVENANTS Section 11.01. Disclaimer of Warranties. NEITHER THE CORPORATION, THE TRUSTEE NOR THE REGISTERED OWNERS 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 PROJECT OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO THE PROJECT. The City hereby acknowledges and declares that the City was solely responsible for the design, acquisition, construction and equipping of the Project, and is solely responsible for the operation and maintenance of the Project during the Lease Term, and that neither the Corporation, the Trustee nor the Registered Owners has any responsibility therefor. In no event shall the Corporation, the Trustee or the Registered Owners 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 City of any item, product or service provided for herein. Section 11.02. Further Assurances and Corrective Instruments. The Corporation and the City 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. Project hereby leased or intended so to be, or for otherwise carrying out the intention hereof. Section 11.03. Corporation, City and Trustee Representatives. Whenever under the provisions hereof the approval of the Corporation, the City or the Trustee is required to take some action at the request of the other, unless otherwise provided, such approval or such request shall be given for the Corporation by the Corporation Representative, for the City by the City Representative, and for the Trustee by the Trustee Representative, and the Corporation, the City and the Trustee shall be authorized to act on any such approval or request. Section 11.04. Granting of Easements. So long as no Event of Nonappropriation or Event of Default shall have happened and be continuing, and so long as the Lease Term shall not have been terminated by the City pursuant to Section 10.03(b) of this Lease, the Corporation and the Trustee shall at any time or times, but only upon the request of the City, grant 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 the Ground Lease, free from the Ground Lease, this Lease and the Indenture and any security 02166504.5 35 interest or other encumbrance created hereunder or thereunder, and the Corporation and the Trustee shall release existing easements, licenses, rights -of -way and other rights and privileges with respect to such property or rights, with or without consideration, and the Corporation and the Trustee agree to 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; (b) a written application signed by the City Representative requesting such instrument; and (c) an opinion of Independent Counsel to the effect that such grant or release will not impair the value or the effective use or interfere with the operation of the Project. Section 11.05. Compliance With Requirements. During the Lease Term, the City, the Corporation and the Trustee shall observe and comply promptly with all current and future orders of all courts having jurisdiction over the Project or any portion thereof, and all current and future requirements of all insurance companies writing policies covering the Project or any portion thereof. Section 11.06. City Acknowledgement of the Indenture and the Certificates. The City acknowledges and agrees to the terms of the Indenture and agrees to be bound thereby. The City hereby agrees to comply with all provisions of the Indenture requiring or contemplating any action (or inaction) on the part of the City. The City further acknowledges and agrees to the assignment by the Corporation to the Trustee, pursuant to the Indenture, of all rights, title and interest of the Corporation in, to and under this Lease (except the rights of the Corporation under Sections 13.03 and 14.06 of this Lease) and the Ground Lease; and to the delegation by the Corporation to the Trustee, pursuant to the Indenture, of all duties of the Corporation under this Lease. The City acknowledges, directs and agrees to the issuance and sale of the Certificates pursuant to the Indenture. The City acknowledges and approves the form of the Certificates contained in the Indenture. Section 11.07. Tax Covenants. The City hereby covenants to comply with all restrictions of the Code applicable to the Certificates and necessary to preserve the exclusion from gross income and from alternative minimum taxable income, for purposes of federal income taxation, of interest paid in connection with the Certificates, unless the City obtains an opinion of nationally recognized municipal bond counsel to the effect that compliance with such restrictions is not necessary to preserve such exclusion. In particular, but without limitation, the City further represents, warrants and covenants to comply with the following restrictions of the Code, unless it receives an opinion of nationally recognized municipal bond counsel stating that such compliance is not necessary. (a) Gross proceeds of the Certificates will not be used in a manner which will cause the Certificates to be considered "private activity bonds" within the meaning of the Code. The Certificates will be classified as private activity bonds if greater than 10% of the net proceeds of the Certificates are used for any private business use and greater than 10% of the net proceeds of the Certificates are directly or indirectly (i) secured by any interest in (A) property used or to be used for a private business use or (B) payments M166504.5 36 in respect of such property or (ii) to be secured by payments derived from payments in respect of property, or borrowed money, used or to be used for a private business use. The Certificates will also be deemed private activity bonds if greater than 5% of the proceeds of the Certificates are (i) used for a private use which is unrelated or disproportionate to the City's use of the proceeds of the Certificates and greater than 5 % of the debt service on the Certificates is secured by payments made directly or indirectly by such private user or (ii) an amount exceeding the lesser of 5 % or $5 million of the proceeds of the Certificates is used to make a private loan to a person or entity other than a governmental unit. (b) The Certificates are not and shall not become directly or indirectly "federally guaranteed." Under the Code, the Certificates will be considered to be "federally guaranteed" if the payment of principal or interest with respect to the Certificates is directly or indirectly guaranteed (in whole or in part) by the United States of America (or any agency or instrumentality thereof) or 5 % or more of the proceeds of the Certificates are used in making loans the payment of principal or interest with respect to which are guaranteed or invested (directly or indirectly) in federally insured deposits or accounts. The Certificates shall not be treated as federally guaranteed due to (i) the proceeds of the issue being invested for an initial temporary period until such proceeds are needed for the purpose for which such Certificates were issued; (ii) investments of a bona fide debt service fund; (iii) investments of a reserve fund which meet the limitations placed on reserve funds by the Code; (iv) investments in obligations issued by the United States Treasury; or (v) other investments permitted by the regulations under the Code. (c) The City shall timely file Internal Revenue Form 8038 -G which shall contain the information required to be filed pursuant to Section 149(e) of the Code. (d) The City shall comply with the Investment Instructions delivered to it on the date of issuance of the Certificates with respect to the application and investment of the proceeds of the Certificates. Section 11.08. Undertaking to Provide Ongoing Disclosure. (a) This Section constitutes the written undertaking of the City for the benefit of the owners of the Series 1995 Certificates required by Section (b)(5)(i) of Securities and Exchange Commission Rule 15c2 -12 under the Securities Exchange Act of 1934, as amended (17 CFR Part 240, § 240. 15c2 -12) (the "Rule "). The owners of the Series 1995 Certificates for purposes of this Section shall be the beneficial owners as well as the Registered Owners. It is the City's express intention that this Section be assigned by the Lessor pursuant to and in accordance with the Indenture to the Trustee for the benefit of the owners of Series 1995 Certificates and that each owner of a Series 1995 Certificate be a beneficiary of this Section with the right to enforce this Section directly against the City. M166504.5 37 (b) The City, as an "obligated person" within the meaning of the Rule, undertakes to provide the following information: (i) Annual Financial Information; and (ii) Material Event Notices. (c) The City shall while any Series 1995 Certificates are Outstanding provide Annual Financial Information to the Trustee within 188 days after the end of the City's fiscal year (the "Submission Date "), beginning with the City's fiscal year ending December 31, 1996, and the Trustee shall provide to each then existing NRMSIR and the SID, if any, such Annual Financial Information within two days of the day it receives it (the "Report Date ") while any Series 1995 Certificates are Outstanding. It shall be sufficient if the City provides to the Trustee and the Lessor and the Trustee provides to each then existing NRMSIR and the SID, if any, the Annual Financial Information by specific reference to documents previously provided to each NRMSIR and the SID, if any, or filed with the Securities and Exchange Commission and, if such a document is a final official statement within the meaning of the Rule, available from the MSRB. (d) If a Material Event occurs while any Series 1995 Certificates are outstanding, the City shall provide a Material Event Notice to the Trustee in a timely manner and the Trustee shall promptly provide to the MSRB and the SID, if any, such Material Event Notice. Each Material Event Notice shall be so captioned and shall prominently state the date, title, and CUSIP numbers of the Series 1995 Certificates. (e) The Trustee shall promptly advise the City whenever, in the course of performing its duties as Trustee under the Indenture, the Trustee identifies an occurrence which, if material, would require the City to provide a Material Event Notice pursuant to clause (d) above; provided that the failure of the Trustee so to advise the City of such occurrence shall not constitute a breach by the Trustee of any of its duties and responsibilities hereunder or under the Indenture. (f) The Trustee shall, without further direction or instruction from the City, provide in a timely manner to each then existing NRMSIR (or the MSRB) and to the SID, if any, notice of any failure while any Series 1995 Certificates are Outstanding by the Trustee to provide to each then existing NRMSIR and the SID, if any, Annual Financial Information on or before the Report Date (whether caused by failure of the City to provide such information to the Trustee by the Submission Date or for any other reason). (g) If the City provides to the Trustee information relating to the City or the Series 1995 Certificates, which information is not designated as a Material Event Notice, and directs the Trustee to provide such information to information repositories, the 02/66504.5 38 Trustee shall provide such information in a timely manner to each then existing NRMSIR (or the MSRB) and the SID, if any. (h) Unless otherwise required by law and subject to technical and economic feasibility, the City and the Trustee shall employ such methods of information transmission as shall be reasonably requested or recommended by the designated recipients of the City's information. (i) The undertaking in this Section will be in effect from the date of delivery of the Series 1995 Certificates until the earliest of (i) the date all principal and interest on the Series 1995 Certificates has been legally defeased pursuant to the terms of the Indenture; (ii) the date that the City shall no longer constitute an "obligated person" within the meaning of the Rule; or (iii) the date on which those portions of the Rule which required this written undertaking are held to be invalid by a court of competent jurisdiction in a non - appealable action, have been repealed retroactively or otherwise do not apply to the Series 1995 Certificates. 0) This Section may be amended without the consent of the owners of the Series 1995 Certificates, in compliance with the Rule and any interpretive guidance related to the Rule. The Trustee shall provide notice of such amendment to each NRMSIR. (k) Any failure by the City to perform in accordance with this Section shall not constitute an "Event of Default" under this Lease, and the rights and remedies provided by the Lease upon the occurrence of an "Event of Default" shall not apply to any such failure. Either the Certificate owners, or the Trustee, on behalf of the Certificate owners, may enforce specific performance of the undertakings herein by any available judicial proceeding. Unless otherwise required by law, no owner of a Series 1995 Certificate shall be entitled to damages for the City's non - compliance with its obligations under this Section. ARTICLE XII CONVEYANCE OF THE PROJECT Section 12.01. Conveyance of the Project. The Corporation shall transfer and convey to the City the Project (or, in the case of (c) below, any portion of the Project to which the Corporation may then hold title), in the manner provided for in Section 12.02 of this Lease; provided, however, that prior to such transfer and conveyance: (a) The City shall have paid the then applicable Purchase Option Price, the Certificates and the Indenture shall have been discharged as provided in Article VI of the Indenture; or 0266504.5 39 (b) The City shall have paid all Base Rentals set forth in Exhibit B hereto, for the Original Term and all Renewal Terms, including the final Renewal Term, and all then current Additional Rentals required hereunder and the first date upon which the Certificates are no longer Outstanding; or (c) The Certificates and the Indenture shall have been discharged as provided in Article VI of the Indenture. The City is hereby granted the option to terminate the Lease Term and to purchase the Project upon payment by the City of the then applicable Purchase Option Price and discharge of the Certificates and the Indenture as provided in Article VI of the Indenture. Section 12.02. Manner of Conveyance. At the closing of any purchase or other conveyance of the Project pursuant to Section 12.01 of this Lease, the Corporation and the Trustee shall execute and deliver to the City all necessary documents releasing this Lease, the Ground Lease and the Indenture, and assigning, transferring and conveying good and marketable title to the Project, as the Project then exists, subject to the following: (a) Permitted Encumbrances, other than this Lease, the Ground Lease and the Indenture and any Financing Statements, indicating the City or the Corporation as the debtor and the Corporation or the Trustee as secured party, filed to perfect any security interests granted under this Lease or the Indenture; (b) all liens, encumbrances and restrictions created or suffered to exist by the Corporation or the Trustee as required or permitted by this Lease or the Indenture or arising as a result of any action taken or omitted to be taken by the Corporation or the Trustee as required or permitted by this Lease or the Indenture; (c) any lien or encumbrance created by action of the City; and (d) those liens and encumbrances (if any) to which title to the Land was subject when leased to the Corporation. Section 12.03. Escrowed Deed and Bill of Sale. In order to facilitate the enforcement by the City of the obligation of the Corporation to convey the Project to the City under the circumstances provided in Section 12.01 and Section 12.02 of this Lease, the Corporation shall deposit in escrow with the Trustee, concurrently with the delivery of the Certificates to the Original Purchaser, a deed to the Project and a bill of sale satisfactory to the City. The Trustee shall, upon payment of the Purchase Option Price and discharge of the Certificates and the Indenture as provided in Article VI of the Indenture or upon payment of all Base Rentals and discharge of the Indenture as provided in Section 12.01(c) of this Lease, date and release the deed and bill of sale to the City for recording. In the event of any change in description of the Land (pursuant to Section 11.04 or 11.05 of this Lease), the Corporation shall promptly cooperate with the City and the Trustee in appropriately modifying, re- executing and redelivering the deed. 02166504.5 40 ARTICLE XIII ASSIGNMENT, SUBLEASING, INDEMNIFICATION, MORTGAGING AND SELLING Section 13.01. Assignment by Corporation. The rights of the Corporation under this Lease, including rights to receive and enforce payments hereunder (except the rights of the Corporation under Sections 13.03 and 14.06 of this Lease), have been assigned to the Trustee pursuant to the Indenture. In the event of any bankruptcy, insolvency, or other similar proceeding as to the Corporation, or in any other event which in the judgment of the Trustee materially impairs the ability of the Corporation to serve as lessor under this Lease or as grantor under the Indenture, the Trustee may replace the Corporation with such other entity as it deems appropriate. In any such event the Corporation shall cooperate with the Trustee in conveying title to the Project and any and all other right, title and interest of the Corporation in, to and under this Lease, the Ground Lease and the Indenture to such successor entity as the Trustee may designate. Any costs or expenses incurred by or charged to the Corporation at the request of the Trustee and in the course of cooperating with the Trustee pursuant to the provisions of this Section shall be paid by the City. Section 13.02. Assignment and Subleasing by the City. This Lease may not be assigned by the City for any reason. The Project may be subleased, as a whole or in part, by the City without the necessity of obtaining the consent of the Corporation, the Trustee or any Registered Owners; subject, however, to each of the following conditions: (a) The Project may be subleased, in whole or in part, only to an agency or department or political subdivision of the State (without an opinion), or to another entity or entities if, in the opinion of nationally recognized bond counsel acceptable to the Trustee, such sublease will not cause the City to violate its covenants in Section 11.07 hereof; provided, that the City portion of the Project may be subleased without regard to the identity of the sublessee, unless restricted by the conditions of the EDA Grant; (b) This Lease, and the obligations of the City hereunder, shall, at all times during the Original and any Renewal Terms, remain obligations of the City, and the City shall maintain its direct relationships with the Corporation and the Trustee, notwithstanding any sublease; (c) The City shall furnish or cause to be furnished to the Corporation and the Trustee a copy of any sublease agreement; and (d) No sublease by the City shall cause the Project to be used for any purpose which would cause the City to violate its covenants in Section 11.07 hereof, or which would violate the conditions of the EDA Grant, the Constitution, statutes or laws of the State or the Charter. 02166504.5 41 Section 13.03. Release and Indemnification Covenants. To the extent permitted by law, the City shall and hereby agrees to indemnify and save the Corporation and the Trustee harmless against and from all claims, by or on behalf of any person, firm, corporation or other legal entity arising from the conduct, management or ownership of, or from any work or thing done on, the Project during the Lease Term, from: (a) any condition of the Project; and (b) any act of negligence of the City or of any of its agents, contractors or employees or any violation of law by the City or breach of any covenant or warranty by the City hereunder. To the extent permitted by law, the City shall indemnify and save the Corporation and the Trustee harmless from any such claim arising as aforesaid from (a) or (b) above, or in connection with any action or proceeding brought thereon and, upon notice from the Corporation or the Trustee, shall defend the Corporation or the Trustee or both of them, as the case may be, and pay the cost of such defense in any such action or proceeding. All indemnification provisions contained in this Section shall be subject to the restrictions, provisions. and damage limitations contained in the Colorado Governmental Immunity Act, Article 10 of Title 24, C.R.S., now existing or as subsequently amended or any statute superseding such Act. Further, nothing in this Lease shall be construed or interpreted to require or provide for indemnification of the Corporation and the Trustee by the City for any injury to any person or any property damage whatsoever which is caused by the negligence or other misconduct of such Corporation or Trustee or their agents or employees. Section 13.04. Restrictions on Mortgage or Sale of Project. The City and the Corporation agree that, except for: (a) the assignment by the Corporation of this Lease and the Ground Lease to the Trustee pursuant to the Indenture; (b) any exercise by the Trustee or the Corporation of the remedies afforded by this Lease and the Indenture; (c) the right of the City to sublease all or a portion of the Project pursuant to Section 13.02 of this Lease; (d) any granting of easements pursuant to Section 11.04 of this Lease; (e) any conveyance to the City pursuant to Article XII of this Lease and (f) any substitutions, additions, modifications and improvements of the Project pursuant to Section 9.02 of this Lease; neither the Corporation nor the City will mortgage, sell, assign, transfer or convey the Project or any portion thereof during the Lease Term. ARTICLE XIV EVENTS OF DEFAULT AND Section 14.01. Events of Default Defined. Any one of the following shall be "Events of Default" under this Lease: (a) Failure by the City to pay any Base Rentals or Additional Rentals when due during the Lease Term; or (b) Failure by the City to vacate the Project by the expiration of the Original or Renewal Term during which an Event of Nonappropriation occurs; or 02166504.5 42 (c) Failure by the City to observe and perform any covenant, condition or agreement on its part to be observed or performed, other than as referred to in (a) or (b), for a period of 45 days after written notice, specifying such failure and requesting that it be remedied shall be given to the City by the Trustee, unless the Trustee 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 Trustee shall not unreasonably withhold their consent to an extension of such time if corrective action shall be instituted by the City within the applicable period and diligently pursued until the default is corrected; or (d) failure by the City to comply with the terms of Article VI of the Ground Lease for a period of five Business Days after written notice specifying such failure and requesting that it be remedied is given to the City by the Trustee; or (e) The City shall file a petition or answer seeking reorganization or arrangement under the federal bankruptcy laws or any other applicable law of the United States of America, or if a court of competent jurisdiction shall approve a petition, filed with or without the consent of the City, seeking reorganization under the federal bankruptcy laws or any other applicable law of the United States of America, or if, under the provisions of any other law for the relief or aid of debtors, any court of competent jurisdiction shall assume custody or control of the City, or of ten percent (10 %) or more of the City's property. The foregoing provisions of this Section 14.01 are subject to the following limitations: (i) the City shall be obligated to pay the Base Rentals and Additional Rentals only during the Lease Term, except as otherwise expressly provided in this Lease; and (ii) if, by reason of Force Majeure, the City 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 City contained in Article VI of this Lease, the City shall not be deemed in default during the continuance of such inability. The City agrees, however, to remedy, as promptly as legally and reasonably possible, the cause or causes preventing the City from carrying out its agreement; provided that the settlement of strikes, lockouts and other industrial disturbances shall be entirely within the discretion of the City. Section 14.02. Remedies on Default. Whenever any Event of Default referred to in Section 14.01 of this Lease shall have happened and be continuing, the Trustee may terminate the Lease Term and may give notice to the City to vacate the Project within 15 days from the date of such notice. After the occurrence of an Event of Default the Trustee may, without any further demand or notice, foreclose through the courts on the Project, and exercise all the rights and remedies of a secured party under the Colorado Uniform Commercial Code with respect to the Equipment, and take one or any combination of the following additional remedial steps: (a) The Trustee may lease the Certificate Portion of the Project and sublease the Land and the City Portion of the Project or any portion thereof to the highest 02166504.5 43 responsible bidder, for the benefit of the Registered Owners. Any such lease and sublease shall be conditioned, however, on an agreement by the lessee /sublessee or assignee to use the Land in a manner permitted by the EDA Grant and permitted under applicable zoning restrictions and compatible with other uses in the area immediately surrounding the Land. (b) The Trustee may recover from the City: (i) the portion of Base Rentals and Additional Rentals which would otherwise have been payable hereunder, allocable to any period in which the City continues to occupy the Project; and (ii) Base Rentals and Additional Rentals which would otherwise have been payable by the City hereunder during the remainder, after the City vacates the Project, of the Original or Renewal Term in which such Event of Default occurs; provided, however, that the Trustee shall be obligated to the City to use its best efforts to lease and sublease the Project and the Land for the remainder of such Original or Renewal Term, as provided in subsection (a) of this Section, and the Net Proceeds of such leasing and subleasing shall be offset against the amount recoverable from the City under this paragraph (ii). (c) The Trustee may take whatever action at law or in equity may appear necessary or desirable to enforce its right in and to the Project under this Lease, the Ground Lease and the Indenture. Section 14.03. Limitations on Remedies. A judgment requiring a payment of money may be entered against the City by reason of an Event of Default only as to the City's liabilities described in paragraph (b) of Section 14.02 of this Lease. A judgment requiring a payment of money may be entered against the City by reason of an Event of Nonappropriation only to the extent that the City fails to vacate the Project as required by Section 6.06 of this Lease, and only as to the liabilities described in paragraph (b)(i) of Section 14.02 of this Lease. Notwithstanding paragraph (b)(ii) of Section 14.02 of this Lease, any Event of Default consisting of failure by the City to vacate the Project by the expiration of the Original or Renewal Term during which an Event of Nonappropriation occurs shall not result in any liability for Base Rentals or Additional Rentals allocable to any period other than the period in which the City continues to occupy the Project. Section 14.04. No Remedy Exclusive. Subject to Section 14.03 hereof, no remedy herein conferred upon or reserved to the Trustee 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, and the same may be exercised from time to time and as often as may be deemed expedient. In order to entitle the 02166504.5 44 Trustee to exercise any remedy reserved in this Article, it shall not be necessary to give any notice, other than such notice as may be required in this Article. Section 14.05. Waivers. The Trustee may waive any Event of Default under this Lease and its consequences, as the Trustee deems to be in the best interests of the Registered Owners of the Certificates. 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 be a waiver of any other breach hereunder. In view of the assignment of the rights of the Corporation under this Lease and the Ground Lease to the Trustee pursuant to the Indenture, the Corporation shall have no right to waive any Event of Default hereunder or under the Ground Lease without the consent of the Trustee; and the waiver of any Event of Default hereunder by the Trustee shall constitute a waiver of such Event of Default by the Corporation, without the necessity of any action of or consent by the Corporation. A waiver of an Event of Default under the Indenture shall constitute a waiver of the corresponding Event of Default or Event of Nonappropriation under this Lease and the Ground Lease; provided that no such waiver shall extend to or affect any subsequent or other Event of Default or Event of Nonappropriation under this Lease or the Ground Lease or impair any right consequent thereon. Section 14.06. Agreement to Pay Attorneys' Fees and Expenses. 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 Base Rentals and Additional Rentals, 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 pay on demand therefor 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. Section 14.07. Waiver of Appraisement, Valuation, Stay and Extension. The Corporation and the City agree, to the extent permitted by law, that in the case of a termination of the Lease Term by reason of an Event of Nonappropriation or an Event of Default, neither the Corporation nor the City nor any one claiming through or under either of them shall or will set up claim or seek to take advantage of any appraisement, valuation, stay or extension laws now or hereafter in force in order to prevent or hinder the enforcement of the Indenture, this Lease or the Ground Lease; and the Corporation and the City, for themselves and all who may at any time claim through or under either of them, each hereby waives, to the full extent that it may lawfully do so, the benefit of all such laws; provided, however, that Corporation, for itself and all who may at any time claim through or under the Corporation, shall retain all rights of redemption. 02166504.5 45 ARTICLE XV MISCELLANEOUS Section 15.01. Notices. All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed given when delivered or mailed by registered mail, postage prepaid, addressed as follows: if to the Authority, the City of Pueblo, Colorado Municipal Building Corporation, One City Hall Place, Pueblo, Colorado 81003, Attention: President; if to the City, the City of Pueblo, Colorado, One City Hall Place, Pueblo, Colorado 81003, Attention: City Manager; if to the Trustee, The Bank of Cherry Creek, N.A., 3033 East First Avenue, Denver, Colorado 80206 -5698, Attention: Corporate Trust Department; and if to the Original Purchaser, Lewis, De Rozario & Co. Incorporated, 555 Seventeenth Street, Suite 3400, Denver, Colorado 80202 -3934, Attention: Public Finance Department. A duplicate copy of each notice, certificate or other communication given hereunder by the Authority or the City shall also be given to the Trustee and the Original Purchaser. The Authority, the City, the Original Purchaser and the Trustee may, by notice given hereunder, designate any further or different addresses to which subsequent notices, certificates or other communications shall be sent. Section 15.02. Binding Effect. This Lease shall inure to the benefit of and shall be binding upon the Corporation and the City and their respective successors and assigns, subject, however, to the limitations contained in Article XIII of this Lease. Section 15.03. Amendments, Changes and Modifications. Except as otherwise provided in this Lease or the Indenture, subsequent to the delivery of the Certificates to the Original Purchaser and prior to the discharge of the Indenture, this Lease may not be effectively amended, changed, modified or altered without the written consent of the Trustee, as provided in the Indenture. Section 15.04. Amounts Remaining in Funds. It is agreed by the parties hereto that any amounts remaining in the Certificate Fund, the Reserve Fund, the Construction Fund, the Extraordinary Redemption Fund or any other fund or account created under the Indenture, upon termination of the Lease Term, and after payment in full of the Certificates (or provision for payment thereof having been made in accordance with the provisions of Article VI of the Indenture) and fees and expenses of the Trustee in accordance with this Lease, shall belong to and be paid to the City by the Trustee as an overpayment of Base Rentals. Section 15.05. Net Lease. This Lease shall be deemed and construed to be a "net lease," and the City shall pay absolutely net during the Lease Term, the Base Rentals, Additional Rentals and all other payments required hereunder, free of any deductions, and without abatement, deduction or setoff (other than credits against Base Rentals expressly provided for in this Lease). 02166504.5 46 Section 15.06. 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 'legal holiday or a day on which banking institutions in the city in which the principal corporate trust office of the Trustee is located are authorized by law to remain closed, such payment may be made or act performed or right exercised on the next succeeding day that is not a legal holiday or a day on which such banking institutions are not authorized by law to remain closed with the same force and effect as if done on the nominal date provided in this Lease. Section 15.07. Severability. In the event that any provision of this Lease, other than the requirement of the City to pay Base Rentals and the requirement of the Corporation to provide quiet enjoyment of the Project and to convey the Project to the City under the conditions set forth in Article XII 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 15.08. 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 15.09. Applicable Law. This Lease shall be governed by and construed in accordance with the laws of the State. Section 15.10. 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. Section 15.11. Immunity of Officers, Employees and Agents of City and Corporation. No recourse shall be had for the payment of the principal of or premium, if any, or interest on any of the Certificates or for any claim based thereon or upon any obligation, covenant or agreement contained in the Indenture, the Ground Lease or this Lease against any past, present or future officer, director, employee or agent of the City or the Corporation, or of any successor public corporation of the City, as such, either directly or through the City or the Corporation or any successor public corporation of the City, under any rule of law or equity, statute or constitution or by the enforcement of any assessment or penalty or otherwise, and all such liability of any such officers, directors, employees or agents as such is hereby expressly waived and released as a condition of and consideration for the execution of the Indenture, the Ground Lease and this Lease and the issuance of such Certificates. 02/66504.5 47 IN WITNESS WHEREOF, the Corporation has executed this Lease in its corporate name with its corporate seal hereunto affixed and attested by its duly authorized officers; and the City has caused this Lease to be executed in its corporate name and the seal of the City affixed and attested by duly authorized officers thereof. All of the above are effective as of the date first above written. [SEAL] CITY OF PUEBLO, COLORADO MUNICIPAL BUILDING CORPORATION, as Lessor hereunder LM Attest: By Secretary [SEAL] Attest: City Clerk President CITY OF PUEBLO, COLORADO, as Lessee hereunder LM President of the City Council 02166504.5 48 STATE OF COLORADO ) COUNTY OF PUEBLO ) ss. CITY OF PUEBLO ) The foregoing instrument was acknowledged before me this day of November 1995, by Billy G. Martin and by Fay B. Kastelic, as President and Secretary, respectively, of the City of Pueblo, Colorado Municipal Building Corporation, a Colorado nonprofit corporation. WITNESS MY HAND AND OFFICIAL SEAL. [SEAL] My commission expires: STATE OF COLORADO ) COUNTY OF PUEBLO ) ss. CITY OF PUEBLO ) Notary Public for the State of Colorado The foregoing instrument was acknowledged before me this day of November 1995, by Chris Weaver and by Marian Mead, as President of the City Council and City Clerk, of the City of Pueblo, Colorado. WITNESS MY HAND AND OFFICIAL SEAL. [SEAL] My commission expires: Notary Public for the State of Colorado 02166so4.5 49 EXHIBIT A DESCRIPTION OF THE LAND Lots 1, 2, 3, 4, 5, 12, 13, 14, 15, 16 and the Easterly 1/2 of Lots 6 and 11, Block 41, in that part of the present City of Pueblo which was surveyed and platted by H. M. Fosdick, Civil Engineer, for the Probate Judge of Pueblo County in March 1869, as shown by the recorded plat thereof, County of Pueblo, State of Colorado. M/66504.5 A -1 EXHIBIT B SCHEDULE OF BASE RENTALS Total Base Rentals Base Rental Total Principal Interest Base Date Component Component Rental 02/66504.5 B-1 EXHIBIT C DESCRIPTION OF THE PROJECT The Project consists of the acquisition, construction and equipping of a 521 -space public parking facility on the Land located in the downtown urban renewal area of the City, between West 2nd and West 3rd Streets and Court and Grand Avenues. The Project, as preliminarily designed, consists of the construction of a camp and two tiers of parking on one -half of a City block, resulting in 383 structure parking spaces and 138 surface parking spaces. This preliminary design is able to accommodate expansion of the Project, at a later time, by the construction of two tiers over the remainder of the City block for an additional 300 parking spaces. 02166504.5 C -1 EXHIBIT D SCHEDULE OF CERTAIN PERMITTED ENCUMBRANCES Rights or claims of parties in possession not shown by the public records. 2. Easements, or claims of easements, not shown by the public records. 3. Discrepancies, conflicts in boundary lines, shortage in area, encroachments, and any facts which a correct survey and inspection of the premises would disclose and which are not shown by the public records. 4. Any lien, or right to a lien, for services, labor or material theretofore or hereafter furnished, imposed by law and not shown by the public records. 5. Defects, liens, encumbrances, adverse claims or other matters, if any, created, first appearing in the public records or attaching subsequent to the effective date hereof but prior to the date the proposed insured acquires of record for value the estate or interest or mortgage thereon covered by this Commitment. 6. Taxes due and payable; and any tax, special assessments, charge or lien imposed for water or sewer service, or for any other special taxing district. 7. Grantors interest in all minerals without limiting the generality thereof, oil, gas and other hydrocarbon substances as well as metallic or other solid minerals rights as reserved by The Atchison, Topeka and Santa Fe Railway Company in a deed recorded March 10, 1971 in Book 1687 at Page 108 and any interest therein or rights thereunder. 8. Easement and right of way for the purpose of constructing and thereafter maintaining and using public streets over, upon and across the following described tracts of land situated in the City of Pueblo, as granted to City of Pueblo, a Municipal Corporation by The Atchison, Topeka and Santa Fe Railway Company, a Kansas Corporation, recorded August 23, 1962 in Book 1490 at Page 531, affecting the following described property: All that part of vacated Second Street extending from the East line of Grand Avenue (formerly High Street) in an Easterly direction to a line that extends from a point in the North line of Block 42 of the City of Pueblo, distant 72 feet West of the Northeasts corner of said Block 42, to a point in the South line of Block 41, of said City of Pueblo, distant 176 feet East of the Southwest corner of said Block 41, and containing an area of 15,960 square feet, more or less. 9. Terms, agreements, provisions, conditions and obligations as contained in Easement by and between The Atchison, Topeka and Santa Fe Railway Company, a Kansas 02166504.5 D -1 Corporation and The City of Pueblo, a Municipal Corporation recorded August 23, 1962 in Book 1490 at Page 531. 10. Any and all unredeemed tax sales, if any. 02/66504.5 D -2