TC Packet 02-23-2016 COP
AFTER RECORDATION PLEASE RETURN TO:
Butler Snow LLP
1801 California Street, Suite 5100
Denver, Colorado 80202
Attention: Dee P. Wisor, Esq.
Pursuant to Section 39-13-104(1)(j), Colorado Revised Statutes, this Lease Purchase Agreement is exempt from the
documentary fee
L EASE PURCHASE AGREEMENT
DATED AS OF [________], 2016
BETWEEN
UMB BANK, N.A.,
SOLELY IN ITS CAPACITY AS TRUSTEE UNDER THE INDENTURE
IDENTIFIED HEREIN,
AS LESSOR
AND
TOWN OF AVON, COLORADO,
AS LESSEE
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This Table of Contents is not a part of this Lease and is only for convenience of
reference.
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS ........................................................................................................... 3
Section 1.1
Certain Funds and Accounts. .............................................................................. 3
Section 1.2
Definitions........................................................................................................... 3
ARTICLE 2 REPRESENTATIONS AND COVENANTS ............................................................ 9
Section 2.1
Representations and Covenants of the Town. ..................................................... 9
Section 2.2
Representations and Covenants of the Trustee. ................................................ 10
Section 2.3
Nature of Lease. ................................................................................................ 11
Section 2.4
Town Acknowledgment of Certain Matters. .................................................... 11
Section 2.5
Relationship of Town and Trustee. ................................................................... 11
ARTICLE 3 LEASE OF THE LEASED PROPERTY ................................................................ 13
ARTICLE 4 LEASE TERM ......................................................................................................... 14
Section 4.1
Duration of Lease Term. ................................................................................... 14
Section 4.2
Termination of Lease Term. ............................................................................. 15
ARTICLE 5 ENJOYMENT OF THE LEASED PROPERTY ..................................................... 16
Section 5.1
Trustee’s Covenant of Quiet Enjoyment. .......................................................... 16
Section 5.2
Town’s Need for the Leased Property; Determinations as to Fair Value and Fair
Purchase Price. .................................................................................................. 16
ARTICLE 6 PAYMENTS BY THE TOWN ................................................................................ 17
Section 6.1
Payments to Constitute Currently Budgeted Expenditures of the Town. ......... 17
Section 6.2
Base Rentals, Purchase Option Price and Additional Rentals. ......................... 17
Section 6.3
Manner of Payment. .......................................................................................... 18
Section 6.4
Nonappropriation. ............................................................................................. 19
Section 6.5
Holdover Tenant. .............................................................................................. 20
Section 6.6
Prohibition of Adverse Budget or Appropriation Modifications. ..................... 21
ARTICLE 7 TITLE TO LEASED PROPERTY; LIMITATIONS ON ENCUMBRANCES ...... 22
Section 7.1
Title to the Leased Property; Title Insurance. ................................................... 22
Section 7.2
No Encumbrance, Mortgage or Pledge of the Leased Property. ....................... 22
ARTICLE 8 MAINTENANCE; TAXES; INSURANCE AND OTHER CHARGES ................. 24
Section 8.1
Maintenance of the Leased Property by the Town. .......................................... 24
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Section 8.2
Modification of the Leased Property; Installation of Furnishings and Machinery
of the Town. ...................................................................................................... 24
Section 8.3
Taxes, Other Governmental Charges and Utility Charges. ............................... 24
Section 8.4
Provisions For Liability and Property Insurance. ............................................. 25
Section 8.5
Advances. .......................................................................................................... 26
Section 8.6
Granting of Easements. ..................................................................................... 26
ARTICLE 9 DAMAGE, DESTRUCTION AND CONDEMNATION; USE OF NET
PROCEEDS .................................................................................................................................. 27
Section 9.1
Damage, Destruction and Condemnation. ........................................................ 27
Section 9.2
Obligation to Repair and Replace the Leased Property. ................................... 27
Section 9.3
Insufficiency of Net Proceeds. .......................................................................... 28
Section 9.4
Cooperation of the Trustee. ............................................................................... 29
ARTICLE 10 DISCLAIMER OF WARRANTIES; OTHER COVENANTS ............................. 30
Section 10.1
Disclaimer of Warranties. ................................................................................. 30
Section 10.2
Further Assurances and Corrective Instruments. .............................................. 30
Section 10.3
Compliance with Requirements. ....................................................................... 30
Section 10.4
Release and Substitution of Leased Property. ................................................... 30
Section 10.5
Tax Covenants. ................................................................................................. 31
Section 10.6
Undertaking to Provide Ongoing Disclosure. ................................................... 32
Section 10.7
Covenant to Reimburse Legal Expenses. .......................................................... 32
Section 10.8
Access to the Leased Property; Rights to Inspect Books. ................................. 32
ARTICLE 11 PURCHASE OPTION ........................................................................................... 34
Section 11.1
Purchase Option. ............................................................................................... 34
Section 11.2
Conditions for Purchase Option. ....................................................................... 34
Section 11.3
Manner of Conveyance. .................................................................................... 34
ARTICLE 12 ASSIGNMENT AND SUBLEASING .................................................................. 36
Section 12.1
Assignment by the Trustee; Replacement of the Trustee. ................................ 36
Section 12.2
Assignment and Subleasing by the Town. ........................................................ 36
ARTICLE 13 EVENTS OF LEASE DEFAULT AND REMEDIES ........................................... 37
Section 13.1
Events of Lease Default Defined. ..................................................................... 37
Section 13.2
Remedies on Default. ........................................................................................ 37
Section 13.3
Limitations on Remedies. ................................................................................. 38
Section 13.4
No Remedy Exclusive. ...................................................................................... 39
Section 13.5
Waivers. ............................................................................................................ 39
Section 13.6
Agreement to Pay Attorneys’ Fees and Expenses. ........................................... 39
Section 13.7
Waiver of Appraisement, Valuation, Stay, Extension and Redemption Laws. 39
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ARTICLE 14 MISCELLANEOUS .............................................................................................. 40
Section 14.1
Sovereign Powers of Town. .............................................................................. 40
Section 14.2
Notices. ............................................................................................................. 40
Section 14.3
Third Party Beneficiaries. ................................................................................. 40
Section 14.4
Binding Effect. .................................................................................................. 40
Section 14.5
Amendments. .................................................................................................... 40
Section 14.6
Amounts Remaining in Funds. ......................................................................... 41
Section 14.7
Triple Net Lease. ............................................................................................... 41
Section 14.8
Computation of Time. ....................................................................................... 41
Section 14.9
Payments Due on Holidays. .............................................................................. 41
Section 14.10
Severability. ...................................................................................................... 41
Section 14.11
Execution in Counterparts. ................................................................................ 41
Section 14.12
Applicable Law. ................................................................................................ 42
Section 14.13
The Trustee Is Independent of the Town. ......................................................... 42
Section 14.14
Governmental Immunity. .................................................................................. 42
Section 14.15
Recitals. ............................................................................................................. 42
Section 14.16
Captions. ........................................................................................................... 42
Section 14.17
Trustee’s Disclaimer. ........................................................................................ 42
Section 14.18
Electronic Transactions. .................................................................................... 42
EXHIBIT A: DESCRIPTION OF LEASED PROPERTY ....................................................... A-1
EXHIBIT B: PERMITTED ENCUMBRANCES .....................................................................B-1
EXHIBIT C: BASE RENTALS SCHEDULE ..........................................................................C-1
EXHIBIT D: FORM OF NOTICE OF LEASE RENEWAL ................................................... D-1
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This LEASE PURCHASE AGREEMENT, dated as of [________], 2016 (this “Lease”),
is by and between UMB Bank, n.a., Denver, Colorado, a national banking association duly
organized and validly existing under the laws of the United States of America, solely in its
capacity as trustee under the Indenture (the “Trustee”), as lessor, and the Town of Avon,
Colorado, a Colorado home rule municipality (the “Town”), as lessee.
PREFACE
All capitalized terms used herein will have the meanings ascribed to them in Article 1 of
this Lease.
RECITALS
1. The Town is a duly organized and existing home rule municipality of the State of
Colorado, created and operating pursuant to Article XX of the Constitution of the State of
Colorado and the home rule charter of the Town (the “Charter”).
2. Pursuant to Chapter XIV of the Charter, the Town 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.
3. The Town is authorized by Article XX, Section 6 of the Colorado Constitution, its
Charter, and part 8 of Article 15 of title 31, Colorado Revised Statutes (“C.R.S.”), to enter into
rental or leasehold agreements in order to provide necessary land, buildings, equipment and other
property for governmental or proprietary purposes.
4. The Town Council of the Town (the “Council”) has determined that it is in the
best interests of the Town and its inhabitants and public interest and necessity to execute the
Lease to finance the acquisition of certain real property for Town purposes, as authorized by law
(the “Project”).
5. The Council has determined that it is in the best interest of the Town and its
inhabitants to provide for the financing of the Project by entering into the Site Lease and this
Lease.
6. The Town owns, or will, contemporaneously with the execution and delivery of
this Lease, own, in fee title, the Site and the premises, buildings and improvements located
thereon (as more particularly described in Exhibit A attached hereto, the “Leased Property”). To
accomplish the Project, the Trustee, solely in its capacity of Trustee under the Indenture, will
acquire a leasehold interest in the Leased Property by leasing the Leased Property from the Town
pursuant to the Site Lease and the Trustee will lease the Leased Property back to the Town
pursuant to this Lease.
7. The payment by the Town of Base Rentals and Additional Rentals hereunder in
any future Fiscal Year is subject to specific Appropriations and the renewal by the Council of
this Lease for such future Fiscal Year. The Base Rentals and Additional Rentals payable by the
Town under this Lease shall constitute current expenditures of the Town.
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8. Neither this Lease nor the payment by the Town of Base Rentals or Additional
Rentals hereunder shall be deemed or construed as creating an indebtedness of the Town within
the meaning of any provision of the Colorado constitution, the Charter or the laws of the State of
Colorado concerning or limiting the creation of indebtedness by the Town, and shall not
constitute a multiple fiscal year direct or indirect debt or other financial obligation of the Town
within the meaning of Article X, Section 20(4) of the Colorado constitution or a mandatory
charge or requirement against the Town in any ensuing Fiscal Year beyond the then current
Fiscal Year. The obligation of the Town to pay Base Rentals and Additional Rentals hereunder
shall be from year to year only, shall constitute currently budgeted expenditures of the Town,
shall not constitute a mandatory charge or requirement in any ensuing budget year, nor a
mandatory payment obligation of the Town in any ensuing Fiscal Year beyond any Fiscal Year
during which this Lease shall be in effect. In the event that this Lease is not renewed, the sole
security available to the Trustee, as lessor hereunder, shall be the Leased Property.
9. The Trustee is executing this Lease solely in its capacity as trustee under the
Indenture, and subject to the terms, conditions and protections provided for therein.
10. The Trustee and the Town intend that this Lease set forth their entire
understanding and agreement regarding the terms and conditions upon which the Town is leasing
the Leased Property from the Trustee.
NOW, THEREFORE, for and in consideration of the mutual promises and covenants
herein contained, the Trustee and the Town agree as follows:
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ARTICLE 1
DEFINITIONS
Section 1.1 Certain Funds and Accounts. All references herein to any funds and
accounts shall mean the funds and accounts so designated which are established under the
Indenture.
Section 1.2 Definitions. All capitalized terms used herein and not otherwise defined
shall have the meanings given to them in the Indenture, unless the context otherwise requires.
Capitalized terms used herein shall have the following meanings under this Lease:
“Additional Certificates” means Additional Certificates which may be executed and
delivered pursuant to the Indenture.
“Additional Rentals” means the payment or cost of all:
(a) (i) reasonable expenses and fees of the Trustee related to the performance
or discharge of its responsibilities under the provisions of this Lease, the Site Lease or the
Indenture, including the reasonable fees and expenses of any person or firm employed by
the Town to make rebate calculations under the provisions of Section 3.05 of the
Indenture and the expenses of the Trustee in respect of any policy of insurance obtained
in respect of the Certificates executed and delivered with respect to this Lease, (ii) the
cost of insurance premiums and insurance deductible amounts under any insurance policy
reasonably deemed necessary by the Trustee to protect the Trustee from any liability
under this Lease, approved by the Town Representative, which approval shall not be
unreasonably withheld, (iii) reasonable legal fees and expenses incurred by the Trustee to
defend the Trust Estate or the Trustee from and against any legal claims, and (iv)
reasonable expenses and fees of the Trustee incurred at the request of the Town
Representative;
(b) taxes, assessments, insurance premiums, utility charges, maintenance,
upkeep, repair and replacement with respect to the Leased Property and as otherwise
required under this Lease;
(c) payments into the Rebate Fund for rebate payments as provided in this
Lease; and
(d) all other charges and costs (together with all interest and penalties that
may accrue thereon in the event that the Town shall fail to pay the same, as specifically
set forth in this Lease) which the Town agrees to assume or pay as Additional Rentals
under this Lease.
Additional Rentals shall not include Base Rentals.
“Appropriation” means the action of the Council in annually making moneys available
for all payments due under this Lease, including the payment of Base Rentals and Additional
Rentals.
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“Approval of Special Counsel” means an opinion of Special Counsel to the effect that the
matter proposed will not adversely affect the excludability from gross income for federal income
tax purposes of the Interest Portion of the Base Rentals paid by the Town under this Lease.
“Base Rentals” means the rental payments payable by the Town during the Lease Term,
which constitute payments payable by the Town for and in consideration of the right to possess
and use the Leased Property as set forth in Exhibit C (Base Rentals Schedule) hereto. Base
Rentals does not include Additional Rentals.
“Base Rentals Payment Dates” means the Base Rentals Payment Dates set forth in
Exhibit C (Base Rentals Schedule) hereto.
“Business Day” means any day, other than a Saturday, Sunday or legal holiday or a day
(a) on which banks located in Denver, Colorado are required or authorized by law or executive
order to close or (b) on which the Federal Reserve System is closed.
“Certificates” means the “Certificates of Participation, Series 2016, Evidencing
Proportionate Interests in the Base Rentals and other Revenues under an annually renewable
Lease Purchase Agreement dated as of [________], 2016, between UMB Bank, n.a., solely in its
capacity as trustee under the Indenture, as lessor, and the Town of Avon, Colorado, as lessee”
dated as of their date of delivery, executed and delivered pursuant to the Indenture.
“Charter” means the home rule charter of the Town, and any amendments or supplements
thereto.
“Continuing Disclosure Certificate” means the certificate executed by the Town of even
date herewith which constitutes an undertaking pursuant to Rule 15c2-12 promulgated by the
Securities and Exchange Commission.
“Costs of Execution and Delivery” means all items of expense directly or indirectly
payable by the Trustee related to the authorization, execution and delivery of the Site Lease and
this Lease and related to the authorization, sale, execution and delivery of the Certificates, as
further defined in the Indenture.
“Council” means the Town Council of the Town or any successor to its functions.
“Counsel” means an attorney at law or law firm (who may be counsel for the Trustee)
who is satisfactory to the Town.
“CRS” means Colorado Revised Statutes.
“Event(s) of Lease Default” means any event as defined in Section 13.1 of this Lease.
“Event of Nonappropriation” means the termination and non-renewal of this Lease by the
Town, determined by the Council’s failure, for any reason, to appropriate by the last day of each
Fiscal Year, (a) sufficient amounts to be used to pay Base Rentals due in the next Fiscal Year
and (b) sufficient amounts to pay such Additional Rentals as are estimated to become due in the
next Fiscal Year, as provided in Section 6.4 of this Lease. An Event of Nonappropriation may
5
also occur under certain circumstances described in Section 9.3(c) of this Lease. The term also
means a notice under this Lease of the Town’s intention to not renew and therefore terminate this
Lease or an event described in this Lease relating to the exercise by the Town of its right to not
appropriate amounts due as Additional Rentals in excess of the amounts for which an
Appropriation has been previously effected.
“Finance Director” means the Finance Director of the Town or his or her successor in
functions, if any.
“Fiscal Year” means the Town’s fiscal year, which begins on January 1 of each calendar
year and ends on December 31 of the same calendar year, or any other twelve month period
which the Town or other appropriate authority hereafter may establish as the Town’s fiscal year.
“Force Majeure” means, without limitation, the following: acts of God; strikes, lockouts
or other industrial disturbances; acts of public enemies; orders or restraints of any kind of the
government of the United States of America, the State of Colorado 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 Town in its capacity as
lessee hereunder or the Trustee.
“Hazardous Substance” means and includes: (a) the terms “hazardous substance,”
“release” and “removal” which, as used herein, shall have the same meaning and definition as set
forth in paragraphs (14), (22) and (23), respectively, of Title 42 U.S.C. §9601 and in Colorado
law, provided, however, that the term “hazardous substance” as used herein shall also include
“hazardous waste” as defined in paragraph (5) of 42 U.S.C. §6903 and “petroleum” as defined in
paragraph (8) of 42 U.S.C. §6991; (b) the term “superfund” as used herein means the
Comprehensive Environmental Response, Compensation and Liability Act, as amended, being
Title 42 U.S.C. §9601 et seq., as amended, and any similar State of Colorado statute or local
ordinance applicable to the Leased Property, including, without limitation, Colorado rules and
regulations promulgated, administered and enforced by any governmental agency or authority
pursuant thereto; and (c) the term “underground storage tank” as used herein shall have the same
meaning and definition as set forth in paragraph (1) of 42 U.S.C. §6991.
“Indenture” means the Indenture of Trust, dated as of [________], 2016, entered into by
the Trustee, as the same may be amended or supplemented.
“Initial Term” means the period which commences on the date of delivery of this Lease
and terminates on December 31, 2016.
“Interest Portion” means the portion of each Base Rentals payment that represents the
payment of interest set forth in Exhibit C (Base Rentals Schedule) hereto.
“Lease” means this Lease Purchase Agreement, dated as of [________], 2016, between
the Trustee, as lessor, and the Town, as lessee, as the same may hereafter be amended.
“Lease Remedy” or “Lease Remedies” means any or all remedial steps provided in this
Lease whenever an Event of Lease Default or an Event of Nonappropriation has happened and is
6
continuing, which may be exercised by the Trustee as provided in this Lease and in the
Indenture.
“Lease Term” means the Initial Term and any Renewal Terms as to which the Town may
exercise its option to renew this Lease by effecting an Appropriation of funds for the payment of
Base Rentals and Additional Rentals hereunder, as provided in and subject to the provisions of
this Lease. “Lease Term” refers to the time during which the Town is the lessee of the Leased
Property under this Lease.
“Leased Property” means the Site and the premises, buildings and improvements situated
thereon, including all fixtures attached thereto, as more particularly described in Exhibit A to
this Lease, together with any and all additions and modifications thereto and replacements
thereof, including, without limitation, the easements, rights of way, covenants and other rights
set forth in the documents listed on Exhibit B attached thereto, and any New Facility.
“Net Proceeds” means the proceeds of any performance or payment bond, or proceeds of
insurance, including self-insurance, required by this Lease or proceeds from any condemnation
award, or proceeds derived from the exercise of any Lease Remedy or otherwise following
termination of this Lease by reason of an Event of Nonappropriation or an Event of Lease
Default, allocable to the Leased Property, less (a) all related expenses (including, without
limitation, attorney’s fees and costs) incurred in the collection of such proceeds or award; and (b)
all other related fees, expenses and payments due to the Town and the Trustee.
“New Facility” means any real property, buildings or equipment leased by the Town to
the Trustee pursuant to a future amendment to the Site Lease and leased back by the Town from
the Trustee pursuant to a future amendment to this Lease in connection with the execution and
delivery of Additional Certificates.
“Owners” means the registered owners of any Certificates and Beneficial Owners.
“Permitted Encumbrances,” with respect to the Leased Property, means, as of any
particular time: (a) liens for taxes and assessments not then delinquent, or liens which may
remain unpaid pending contest pursuant to the provisions of this Lease; (b) the Site Lease, this
Lease, the Indenture and any related fixture filing and any liens arising or granted pursuant to the
Site Lease, this Lease or the Indenture; (c) utility, access and other easements and rights of way,
licenses, permits, party wall and other agreements, restrictions and exceptions which the Town
Representative certifies will not materially interfere with or materially impair the Leased
Property, including rights or privileges in the nature of easements, licenses, permits and
agreements as provided in this Lease (d) any sublease of the Leased Property that are permitted
pursuant to the terms and provisions of Section 12.2 hereof; and (e) the easements, covenants,
restrictions, liens and encumbrances (if any) to which title to the Leased Property was subject
when leased to the Trustee pursuant to the Site Lease, as shown on Exhibit B hereto and which
do not interfere in any material way with the Leased Property.
“Prepayment” means any amount paid by the Town pursuant to the provisions of this
Lease as a prepayment of the Base Rentals due hereunder.
7
“Principal Portion” means the portion of each Base Rentals payment that represents the
payment of principal set forth in Exhibit C (Base Rentals Schedule) hereto.
“Project” means, to the extent financed with the proceeds of the Certificates, the
acquisition of certain real property and any improvements located thereon for Town purposes.
“Purchase Option Price” means the amount payable on any date, at the option of the
Town, to prepay Base Rentals, terminate the Lease Term and purchase the Trustee’s leasehold
interest in the Leased Property, as provided herein.
“Renewal Term” means any portion of the Lease Term commencing on January 1 of any
calendar year and terminating on or before December 31 of such calendar year as provided in
Article 4 of this Lease.
“Revenues” means (a) all amounts payable by or on behalf of the Town or with respect to
the Leased Property pursuant to this Lease including, but not limited to, all Base Rentals,
Prepayments, the Purchase Option Price and Net Proceeds, but not including Additional Rentals;
(b) any portion of the proceeds of the Certificates deposited into the Base Rentals Fund created
under the Indenture; (c) any moneys which may be derived from any insurance in respect of the
Certificates; and (d) any moneys and securities, including investment income, held by the
Trustee in the Funds and Accounts established under the Indenture (except for moneys and
securities held in the Rebate Fund or any defeasance escrow account).
“Site” means the real property owned by the Town and leased by the Town to the Trustee
under the Site Lease and subleased by the Trustee to the Town under this Lease, the legal
description of which is set forth in Exhibit A hereto, or an amendment or supplement hereto.
“Site Lease” means the Site Lease, dated as of [________], 2016, between the Town, as
lessor, and the Trustee, as lessee, as the same may hereafter be amended.
“Special Counsel” means any counsel experienced in matters of municipal law and listed
in the list of municipal bond attorneys, as published semiannually by The Bond Buyer, or any
successor publication. So long as the Lease Term is in effect, the Town shall have the right to
select Special Counsel.
“Tax Certificate” means the Tax Certificate entered into by the Town with respect to this
Lease.
“Tax Code” means the Internal Revenue Code of 1986, as amended, and all regulations
and rulings promulgated thereunder.
“Town” means the Town of Avon, Colorado.
“Town Manager” means the Town Manager of the Town or his or her successor in
function.
“Town Representative” means the Mayor, the Town Manager or the Finance Director or
such other person at the time designated to act on behalf of the Town for the purpose of
8
performing any act under this Lease, the Site Lease or the Indenture by a written certificate
furnished to the Trustee containing the specimen signature of such person or persons and signed
on behalf of the Town by the Mayor.
“Trustee” means UMB Bank, n.a., acting in the capacity of trustee pursuant to the
Indenture, and any successor thereto appointed under the Indenture.
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ARTICLE 2
REPRESENTATIONS AND COVENANTS
Section 2.1 Representations and Covenants of the Town. The Town represents and
covenants to the Trustee, to the extent allowed by law and subject to renewal of this Lease and
Appropriation as set forth in Article 6 hereof, as follows:
(a) The Town is a home rule municipal corporation duly organized and
existing within the State under the Constitution and laws of the State and its Charter. The
Town is authorized to enter into this Lease and the Site Lease and to carry out its
obligations under this Lease and the Site Lease. The Town has duly authorized and
approved the execution and delivery of this Lease, the Site Lease and all other documents
related to the execution and delivery of this Lease and the Site Lease.
(b) The Town owns the Leased Property and the Trustee has a leasehold
interest in the Leased Property pursuant to the Site Lease.
(c) The leasing of the Leased Property to the Trustee pursuant to the Site
Lease and the leasing or subleasing of the Leased Property from the Trustee, under the
terms and conditions provided for in this Lease, and the implementation of the Project by
the Town, are necessary, convenient and in furtherance of the Town’s governmental
purposes and are in the best interests of the citizens and inhabitants of the Town. The
Town will apply the net proceeds derived from the proceeds of the Certificates to
effectuate the Project.
(d) Neither the execution and delivery of this Lease and the Site Lease, nor
the fulfillment of or compliance with the terms and conditions of this Lease and the Site
Lease, nor the consummation of the transactions contemplated hereby or thereby,
conflicts with or results in a breach of the terms, conditions or provisions of any
restriction or any agreement or instrument to which the Town is now a party or by which
the Town or its property is bound, or violates any statute, regulation, rule, order of any
court having jurisdiction, judgment or administrative order applicable to the Town, 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 Town,
except for Permitted Encumbrances.
(e) The Town agrees that, except for non-renewal and nonappropriation as set
forth in Article 6 hereof, if the Town fails to perform any act which the Town is required
to perform under this Lease, the Trustee may, but shall not be obligated to, perform or
cause to be performed such act, and any reasonable expense incurred by the Trustee in
connection therewith shall be an obligation owing by the Town (from moneys for which
an Appropriation has been effected) to the Trustee shall be a part of Additional Rentals,
and the Trustee shall be subrogated to all of the rights of the party receiving such
payment.
(f) There is no litigation or proceeding pending against the Town affecting
the right of the Town to execute this Lease or the Site Lease or the ability of the Town to
10
make the payments required hereunder or to otherwise comply with the obligations
contained herein, or which, if adversely determined, would, in the aggregate or in any
case, materially adversely affect the property, assets, financial condition or business of
the Town or materially impair the right or ability of the Town to carry on its operations
substantially as now conducted or anticipated to be conducted in the future.
(g) Except for customary materials necessary for construction, operation,
cleaning and maintenance of the Leased Property, the Town shall not cause or permit any
Hazardous Substance to be brought upon, generated at, stored or kept or used in or about
the Leased Property without prior written notice to the Trustee, and all Hazardous
Substances, including, customary materials necessary for construction, operation,
cleaning and maintenance of the Leased Property, will be used, kept and stored in a
manner that complies with all laws regulating any such Hazardous Substance so brought
upon or used or kept in or about the Leased Property. If the presence of any Hazardous
Substance on the Leased Property caused or permitted by the Town results in
contamination of the Leased Property, or if contamination of the Leased Property by any
Hazardous Substance otherwise occurs for which the Town is legally liable for damage
resulting therefrom, then the Town shall include as an Additional Rental any amount
necessary to reimburse the Trustee for legal expenses incurred to defend (to the extent
that an Appropriation for the necessary moneys has been effected by the Town) the
Trustee from claims for damages, penalties, fines, costs, liabilities or losses. The
reimbursement of the Trustee’s legal expenses is not an indemnification. It is expressly
understood that the Town is not indemnifying the Trustee and expenses of such defense
shall constitute Additional Rentals. Without limiting the foregoing, if the presence of any
Hazardous Substance on the Leased Property caused or permitted by the Town results in
any contamination of the Leased Property, the Town shall provide prior written notice to
the Trustee and promptly take all actions at its sole expense (which expenses shall
constitute Additional Rentals) as are necessary to effect remediation of the contamination
in accordance with legal requirements.
(h) The Town covenants and agrees to comply with any applicable covenants
and requirements of the Town set forth in the Tax Certificate.
Section 2.2 Representations and Covenants of the Trustee. The Trustee represents
and covenants as follows:
(a) So long as no Event of Indenture Default has occurred and is then
continuing or existing, except as specifically provided in the Site Lease or this Lease or as
necessary to transfer the Trust Estate to a successor Trustee, the Trustee shall not pledge or
assign the Trustee’s right, title and interest in and to (i) this Lease or the Site Lease, (ii) the Base
Rentals, other Revenues and collateral, security interests and attendant rights and obligations
which may be derived under this Lease or the Site Lease and/or (iii) the Leased Property and any
reversion therein or any of its or the Trustee’s other rights under this Lease or the Site Lease or
assign, pledge, mortgage, encumber or grant a security interest in its or the Trustee’s right, title
and interest in, to and under this Lease or the Site Lease or the Leased Property except for
Permitted Encumbrances.
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(b) Neither the execution and delivery of this Lease and the Site Lease or the
Indenture by the Trustee, nor the fulfillment of or compliance with the terms and conditions
thereof and hereof, nor the consummation of the transactions contemplated thereby or 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 Trustee is now a party or by which the Trustee is
bound, or constitutes a default under any of the foregoing.
(c) To the Trustee’s knowledge, there is no litigation or proceeding pending
against the Trustee affecting the right of the Trustee to execute this Lease and the Site Lease or
to execute the Indenture, and perform its obligations thereunder or hereunder, except such
litigation or proceeding as has been disclosed in writing to the Town on or prior to the date the
Indenture is executed and delivered.
Section 2.3 Nature of Lease. The Town and the Trustee acknowledge and agree that
the Base Rentals and Additional Rentals hereunder shall constitute currently budgeted and
appropriated expenditures of the Town and may be paid from any legally available funds. The
Town’s obligations under this Lease shall be subject to the Town’s annual right to terminate this
Lease (as further provided herein), and shall not constitute a mandatory charge or requirement in
any ensuing Fiscal Year beyond the then current Fiscal Year. No provision of this Lease shall be
construed or interpreted as creating a general obligation, multiple fiscal year financial obligation,
or other indebtedness of the Town within the meaning of any constitutional, Charter or statutory
debt limitation. No provision of this Lease shall be construed or interpreted as creating an
unlawful delegation of governmental powers nor as a donation by or a lending of the credit of the
Town within the meaning of Article XI, Sections 1 or 2 of the Colorado constitution. Neither
this Lease nor the execution and delivery of the Certificates shall directly or indirectly obligate
the Town to make any payments beyond those duly budgeted and appropriated for the Town’s
then current Fiscal Year. The Town shall be under no obligation whatsoever to exercise its
option to purchase the Trustee’s leasehold interest in the Leased Property. No provision of this
Lease shall be construed to pledge or to create a lien on any class or source of Town moneys, nor
shall any provision of this Lease restrict the future issuance of any Town bonds or obligations
payable from any class or source of Town moneys (provided, however, certain restrictions in the
Indenture shall apply to the issuance of Additional Certificates). In the event that this Lease is
not renewed by the Town, the sole security available to the Trustee, as lessor hereunder, shall be
the Leased Property.
Section 2.4 Town Acknowledgment of Certain Matters. The Town acknowledges
the Indenture and the execution and delivery by the Trustee of the Certificates pursuant to the
Indenture. The Town also acknowledges the Trustee’s authority to act on behalf of the Owners
of the Certificates with respect to all rights, title and interests of the Trustee in, to and under this
Lease, the Site Lease and the Leased Property.
Section 2.5 Relationship of Town and Trustee. The relationship of the Town and the
Trustee under this Lease is, and shall at all times remain, solely that of lessee and lessor; and the
Town neither undertakes nor assumes any responsibility or duty to the Trustee or to any third
party with respect to the Trustee’s obligations relating to the Leased Property; and the Trustee
does not undertake or assume any responsibility or duty to the Town or to any third party with
respect to the Town’s obligations relating to the Leased Property. Notwithstanding any other
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provisions of this Lease: (a) the Town and the Trustee are not, and do not intend to be construed
to be, partners, joint ventures, members, alter egos, managers, controlling persons or other
business associates or participants of any kind of either of the other, and the Town and the
Trustee do not intend to ever assume such status; and (b) the Town and the Trustee shall not be
deemed responsible for, or a participant in, any acts, omissions or decisions of either of the other.
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ARTICLE 3
LEASE OF THE LEASED PROPERTY
The Trustee demises and leases the Leased Property to the Town and the Town leases the
Leased Property from the Trustee, in accordance with the provisions of this Lease, subject only
to Permitted Encumbrances, to have and to hold for the Lease Term.
The Town and the Trustee acknowledge that the Town owns the Leased Property and the
Town has leased the Leased Property to the Trustee pursuant to the Site Lease; and the Town and
the Trustee intend that there be no merger of the Town’s interests as sublessee under this Lease
and the Town’s ownership interest in the Leased Property so as to cause the cancellation of the
Site Lease or this Lease, or an impairment of the leasehold and subleasehold interest intended to
be created by the Site Lease and this Lease.
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ARTICLE 4
LEASE TERM
Section 4.1 Duration of Lease Term. The Lease Term shall commence as of the date
hereof. The Initial Term shall terminate on December 31, 2016. This Lease may be renewed,
solely at the option of the Town, for the number of Renewal Terms represented in Exhibit C
(Base Rentals Schedule) attached hereto. The Town hereby finds that the maximum Lease Term
hereunder does not exceed the weighted average useful life of the Leased Property. The Town
further determines and declares that the period during which the Town has an option to purchase
the Trustee’s leasehold interest in the Leased Property (i.e. the entire maximum Lease Term)
does not exceed the useful life of the Leased Property.
The Finance Director or other officer of the Town at any time charged with the
responsibility of formulating budget proposals for the Town is hereby directed to include in the
annual budget proposals submitted to the 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 until such
time, if any, as the Town may determine to not renew and terminate this Lease. Notwithstanding
this directive regarding the formulation of budget proposals, it is the intention of the Town that
any decision to effect an Appropriation for the Base Rentals and Additional Rentals shall be
made solely by the Council in its absolute discretion and not by any other official of the Town,
as further provided in the following paragraph. During the Lease Term, the Town shall in any
event, whether or not the Lease is to be renewed, furnish the Trustee with copies of its annual
budget promptly after the budget is adopted.
Not later than December 15 of the then current Initial Term or any Renewal Term the
Town Representative shall give written notice (in substantially the form set forth in Exhibit D
attached hereto) to the Trustee that either:
(a) the Town has effected or intends to effect on a timely basis an
Appropriation for the ensuing Fiscal Year which includes (1) sufficient amounts
authorized and directed to be used to pay all of the Base Rentals and (2) sufficient
amounts to pay such Additional Rentals as are estimated to become due, all as further
provided in Sections 6.2, 6.3 and 6.4 of this Lease, whereupon, this Lease shall be
renewed for the ensuing Fiscal Year; or
(b) the Town has determined, for any reason, not to renew this Lease for the
ensuing Fiscal Year.
Subject to the provisions of Section 6.4(a) hereof, the failure to give such notice shall not
constitute an Event of Lease Default, nor prevent the Town from electing not to renew this
Lease, nor result in any liability on the part of the Town. The Town’s option to renew or not to
renew this Lease shall be conclusively determined by whether or not the applicable
Appropriation has been made on or before December 31 of each Fiscal Year, all as further
provided in Article 6 of this Lease.
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The terms and conditions hereof during any Renewal Term shall be the same as the terms
and conditions hereof during the Initial Term, except that the Purchase Option Price and the Base
Rentals shall be as provided in Article 11 and Exhibit C (Base Rentals Schedule) hereof.
Section 4.2 Termination of Lease Term. The Lease Term shall terminate upon the
earliest of any of the following events:
(a) the expiration of the Initial Term or any Renewal Term during which there
occurs an Event of Nonappropriation pursuant to Section 4.1 and Article 6 of this Lease
(provided that the Lease Term will not be deemed to have been terminated if the Event of
Nonappropriation is cured as provided in Section 6.4 hereof);
(b) the occurrence of an Event of Nonappropriation under this Lease
(provided that the Lease Term will not be deemed to have been terminated if the Event of
Nonappropriation is cured as provided in Section 6.4 hereof);
(c) the conveyance of the Trustee’s leasehold interest in the Leased Property
under this Lease to the Town upon payment of the Purchase Option Price or all Base
Rentals and Additional Rentals, for which an Appropriation has been effected by the
Town for such purpose, as provided in Section 11.2(a) or (b) of this Lease; or
(d) an uncured Event of Lease Default and termination of this Lease under
Article 13 of this Lease by the Trustee.
Except for an event described in subparagraph (c) above, upon termination of this Lease, the
Town agrees to peacefully deliver possession of the Leased Property to the Trustee.
Termination of the Lease Term shall terminate all unaccrued obligations of the Town
under this Lease, and shall terminate the Town’s rights of possession under this Lease (except to
the extent of the holdover provisions of Sections 6.5 and 13.2(c)(i) hereof, and except for any
conveyance pursuant to Article 11 of this Lease). All obligations of the Town accrued prior to
such termination shall be continuing until the Trustee gives written notice to the Town that such
accrued obligations have been satisfied.
Upon termination of the Lease Term any moneys received by the Trustee in excess of the
amounts necessary to terminate and discharge the Indenture, shall be paid to the Town.
The Town shall not have the right to terminate this Lease due to a default by the Trustee
under this Lease.
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ARTICLE 5
ENJOYMENT OF THE LEASED PROPERTY
Section 5.1 Trustee’s Covenant of Quiet Enjoyment. The Trustee hereby covenants
that the Town shall, during the Lease Term, peaceably and quietly have, hold and enjoy the
Leased Property without suit, trouble or hindrance from the Trustee. The Trustee shall not
interfere with the quiet use and enjoyment of the Leased Property by the Town during the Lease
Term so long as no Event of Lease Default shall have occurred. The Trustee shall, at the request
of the Town and at the cost of the Town, cooperate fully in any legal action in which the Town
asserts against third parties its right to such possession and enjoyment, or which involves the
imposition of any taxes or other governmental charges on or in connection with the Leased
Property. In addition, the Town may at its own expense join in any legal action affecting its
possession and enjoyment of the Leased Property and shall be joined in any action affecting its
liabilities hereunder.
The provisions of this Article 5 shall be subject to the Trustee’s right to inspect the
Leased Property and the Town’s books and records with respect thereto as provided in Section
10.7 hereof.
Section 5.2 Town’s Need for the Leased Property; Determinations as to Fair Value
and Fair Purchase Price. The Town has determined and hereby determines that it has a current
need for the Leased Property. It is the present intention and expectation of the Town that this
Lease will be renewed annually until the Trustee’s interests in the Site Lease are released and
unencumbered title to the Leased Property is acquired by the Town pursuant to this Lease; but
this declaration shall not be construed as contractually obligating or otherwise binding the Town.
The Town has determined and hereby determines that the Base Rentals under this Lease during
the Lease Term for the Leased Property represent the fair value of the use of the Leased Property
and that the Purchase Option Price for the Leased Property will represent the fair purchase price
of the Trustee’s leasehold interest in the Leased Property at the time of the exercise of the option.
The Town has determined and hereby determines that the Base Rentals do not exceed a
reasonable amount so as to place the Town under an economic compulsion to renew this Lease
or to exercise its option to purchase the Trustee’s leasehold interest in the Leased Property
hereunder. In making such determinations, the Town has given consideration to the estimated
current value of the Leased Property, the uses and purposes for which the Leased Property will
be employed by the Town, the benefit to the citizens and inhabitants of the Town by reason of
the use and occupancy of the Leased Property pursuant to the terms and provisions of this Lease,
the Town’s option to purchase the Trustee’s leasehold interest in the Leased Property and the
expected eventual vesting of unencumbered title to the Leased Property in the Town. The Town
hereby determines and declares that the period during which the Town has an option to purchase
the Trustee’s leasehold interest in the Leased Property (i.e., the entire maximum Lease Term for
the Leased Property) does not exceed the weighted average useful life of the Leased Property.
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ARTICLE 6
PAYMENTS BY THE TOWN
Section 6.1 Payments to Constitute Currently Budgeted Expenditures of the Town.
The Town and the Trustee acknowledge and agree that the Base Rentals, Additional Rentals and
any other obligations hereunder shall constitute currently budgeted expenditures of the Town, if
an Appropriation has been effected for such purpose. The Town’s obligations to pay Base
Rentals, Additional Rentals and any other obligations under this Lease shall be from year to year
only (as further provided in Article 4 and Sections 6.2 and 6.4 hereof), shall extend only to
moneys for which an Appropriation has been effected by the Town, and shall not constitute a
mandatory charge, requirement or liability in any ensuing Fiscal Year beyond the then current
Fiscal Year. No provision of this Lease shall be construed or interpreted as a delegation of
governmental powers or as creating a multiple fiscal year direct or indirect debt or other financial
obligation whatsoever of the Town or a general obligation or other indebtedness of the Town
within the meaning of any constitutional, Charter provision or statutory debt limitation, including
without limitation Article X, Section 20 of the Colorado constitution. No provision of this Lease
shall be construed or interpreted as creating an unlawful delegation of governmental powers nor
as a donation by or a lending of the credit of the Town within the meaning of Sections 1 or 2 of
Article XI of the Constitution of the State. Neither this Lease nor the Certificates shall directly
or indirectly obligate the Town to make any payments beyond those for which an Appropriation
has been effected by the Town for the Town’s then current Fiscal Year. The Town shall be
under no obligation whatsoever to exercise its option to purchase the Trustee’s leasehold interest
in the Leased Property. No provision of this Lease shall be construed to pledge or to create a lien
on any class or source of Town moneys, nor shall any provision of this Lease restrict the future
issuance of any Town bonds or obligations payable from any class or source of Town moneys
(provided, however, that certain restrictions in the Indenture shall apply to the issuance of
Additional Certificates).
Section 6.2 Base Rentals, Purchase Option Price and Additional Rentals.
(a) The Town shall pay Base Rentals for which an Appropriation has been effected
by the Town, directly to the Trustee during the Initial Term and any Renewal Term, on the Base
Rentals Payment Dates and in the “Total Base Rentals” amounts set forth in Exhibit C (Base
Rentals Schedule) attached hereto and made a part hereof. For federal and State income tax
purposes, a portion of each payment of Base Rentals for the Certificates is designated and will be
paid as interest, and Exhibit C (Base Rentals Schedule) hereto sets forth the Interest Portion of
each payment of Base Rentals for the Certificates. The Town shall receive credit against its
obligation to pay Base Rentals to the extent moneys are held by the Trustee on deposit in the
Base Rentals Fund created under the Indenture and are available to pay Base Rentals. The Town
acknowledges that upon receipt by the Trustee of each payment of Base Rentals, the Trustee,
pursuant to the terms of the Indenture, is to deposit the amount of such Base Rentals in the Base
Rentals Fund.
The Base Rentals set forth in Exhibit C shall be recalculated in the event of the execution
and delivery of Additional Certificates as provided in the Indenture and shall also be recalculated
in the event of a partial redemption of the Certificates.
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(b) The Town may, on any date, pay the then applicable Purchase Option Price for
the purpose of terminating this Lease and the Site Lease in whole and purchasing the Trustee’s
leasehold interest in the Leased Property as further provided in Article 11 of this Lease. Subject
to the Approval of Special Counsel, the Town may also, at any time during the Lease Term, (1)
prepay any portion of the Base Rentals due under this Lease and (2) in connection with such
prepayment, recalculate the Base Rentals set forth in Exhibit C (Base Rentals Schedule). Any
such revised Exhibit C (Base Rentals Schedule) shall be prepared by the Town Representative
and delivered to the Trustee. The Trustee may rely upon such revised Exhibit C (Base Rentals
Schedule) and has no duty to make an independent investigation in connection therewith. The
Town shall give the Trustee notice of its intention to exercise either of such options not less than
forty-five (45) days in advance of the date of exercise and shall deposit with the Trustee by not
later than the date of exercise an amount equal to the Purchase Option Price due on the date of
exercise or the applicable amount of Base Rentals to be prepaid. If the Town shall have given
notice to the Trustee of its intention to prepay Base Rentals but shall not have deposited the
amounts with the Trustee on the date specified in such notice, the Town shall continue to pay
Base Rentals which have been specifically appropriated by the Council for such purpose as if no
such notice had been given. The Trustee may waive the right to receive forty-five (45) days
advance notice and may agree to a shorter notice period in the sole determination of the Trustee.
(c) All Additional Rentals shall be paid by the Town on a timely basis directly to the
person or entity to which such Additional Rentals are owed. Additional Rentals shall include,
without limitation, the reasonable fees and expenses of the Trustee, reasonable expenses of the
Trustee in connection with the Leased Property and for the cost of taxes, insurance premiums,
utility charges, maintenance and repair costs and all other expenses expressly required to be paid
hereunder, and any other amounts due to the insurer of any of the Certificates, and any Rebate
Fund payments required pursuant to this Lease and the Indenture. All of the payments required
by this paragraph are subject to Appropriation by the Town; provided, however, a failure by the
Town to budget and appropriate moneys for any of the payments required by this paragraph shall
constitute an Event of Nonappropriation.
If the Town’s estimates of Additional Rentals for any Fiscal Year are not itemized in the
budget required to be furnished to the Trustee under Section 4.1 of this Lease, the Town shall
furnish an itemization of such estimated Additional Rentals to the Trustee on or before the 15th
day preceding such Fiscal Year.
Section 6.3 Manner of Payment. The Base Rentals, for which an Appropriation has
been effected by the Town, and, if paid, the Purchase Option Price, shall be paid or prepaid by
the Town to the Trustee at its corporate trust office by wire transfer of federal funds, certified
funds or other method of payment acceptable to the Trustee in lawful money of the United States
of America to the Trustee at its corporate trust office.
The obligation of the Town to pay the Base Rentals and Additional Rentals as required
under this Article 6 and other sections hereof in any Fiscal Year for which an Appropriation has
been effected by the Town for the payment thereof shall be absolute and unconditional and
payment of the Base Rentals and Additional Rentals in such Fiscal Years shall not be abated
through accident or unforeseen circumstances, or any default by the Trustee under this Lease, or
under any other agreement between the Town and the Trustee, or for any other reason including
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without limitation, any acts or circumstances that may constitute failure of consideration,
destruction of or damage to the Leased Property, commercial frustration of purpose, or failure of
the Trustee, to perform and observe any agreement, whether expressed or implied, or any duty,
liability or obligation arising out of or connected with this Lease, it being the intention of the
parties that the payments required by this Lease will be paid in full when due without any delay
or diminution whatsoever, subject only to the annually renewable nature of the Town’s
obligation hereunder as set forth in Section 6.1 hereof, and further subject to the Town’s rights
under Section 8.3 hereof. Notwithstanding any dispute between the Town and the Trustee, the
Town shall, during the Lease Term, make all payments of Base Rentals and Additional Rentals
in such Fiscal Years and shall not withhold any Base Rentals or Additional Rentals, for which an
Appropriation has been effected by the Town, pending final resolution of such dispute (except to
the extent permitted by Sections 7.2 and 8.3 hereof with respect to certain Additional Rentals),
nor shall the Town 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 Trustee shall affect the
Town’s obligation to pay all Base Rentals and Additional Rentals, for which a specific
Appropriation has been effected by the Town for such purpose, in such Fiscal Years subject to
this Article (except to the extent provided by Sections 7.2 and 8.3 hereof with respect to certain
Additional Rentals).
Section 6.4 Nonappropriation. In the event that the Town gives notice that it intends
to not renew this Lease as provided by Section 4.1 hereof or the Town shall not effect an
Appropriation, on or before December 31 of each Fiscal Year, of moneys to pay all Base Rentals
and reasonably estimated Additional Rentals coming due for the next ensuing Renewal Term as
provided in Section 4.1 hereof and this Article, or in the event that the Town is proceeding under
the provisions of Section 9.3(c) hereof (when applicable), an Event of Nonappropriation shall be
deemed to have occurred; subject, however, to each of the following provisions:
(a) In the event the Trustee does not receive the written notice provided for by
Section 4.1 hereof or evidence that an Appropriation has been effected by the Town on or
before December 31 of a Fiscal Year, then the Trustee shall declare an Event of
Nonappropriation on the first Business Day of the February following such Fiscal Year or
such declaration shall be made on any earlier date on which the Trustee receives official,
specific written notice from the Town that this Lease will not be renewed. In order to
declare an Event of Nonappropriation, the Trustee shall send written notice thereof to the
Town.
(b) The Trustee shall waive any Event of Nonappropriation which is cured by
the Town, within 30 days of the receipt by the Town of notice from the Trustee as
provided in (a) above, by a duly effected Appropriation to pay all Base Rentals and
sufficient amounts to pay reasonably estimated Additional Rentals coming due for such
Renewal Term.
(c) Pursuant to the terms of the Indenture, the Trustee may waive any Event
of Nonappropriation which is cured by the Town within a reasonable time with the
procedure described in (b) above.
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In the event that during the Initial Term or any Renewal Term, any Additional Rentals shall
become due which were not included in a duly effected Appropriation and moneys are not
specifically budgeted and appropriated or otherwise made available to pay such Additional
Rentals within 60 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
Town to such effect (subject to waiver by the Trustee as hereinbefore provided).
If an Event of Nonappropriation occurs, the Town 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 Initial Term or any Renewal Term during which such Event
of Nonappropriation occurs; provided, however, that, subject to the limitations of Sections 6.1
and 13.3 hereof, the Town shall continue to be liable for Base Rentals and Additional Rentals
allocable to any period during which the Town shall continue to occupy, use or retain possession
of the Leased Property.
Subject to Section 6.5 hereof, the Town shall in all events vacate or surrender possession
of the Leased Property by March 1 of the Renewal Term in respect of which an Event of
Nonappropriation has occurred.
After March 1 of the Renewal Term in respect of which an Event of Nonappropriation
has occurred, the Trustee may proceed to exercise all or any Lease Remedies.
The Town acknowledges that, upon the occurrence of an Event of Nonappropriation
(a) the Trustee shall be entitled to all moneys then being held in all funds created under the
Indenture (except the Rebate Fund, and any defeasance escrow accounts) to be used as described
therein and (b) all property, funds and rights then held or acquired by the Trustee upon the
termination of this Lease by reason of an Event of Nonappropriation are to be held by the
Trustee in accordance with the terms of the Indenture.
Section 6.5 Holdover Tenant. If the Town fails to vacate the Leased Property after
termination of this Lease, whether as a result of the occurrence of an Event of Nonappropriation
or an Event of Lease Default as provided in Section 13.2(a) hereof, with the written permission
of the Trustee it will be deemed to be a holdover tenant on a month-to-month basis, and will be
bound by all of the other terms, covenants and agreements of this Lease. Any holding over by
the Town without the written permission of the Trustee shall be at sufferance. The amount of
rent to be paid monthly during any period when the Town is deemed to be a holdover tenant will
be equal to (a) one-sixth of the Interest Portion of the Base Rentals coming due on the next
succeeding Base Rentals Payment Date plus one-twelfth of the Principal Portion of the Base
Rentals coming due on the next succeeding Base Rentals Payment Date on which a Principal
Portion of the Base Rentals would have been payable with appropriate adjustments to ensure the
full payment of such amounts on the due dates thereof in the event termination occurs during a
Renewal Term plus (b) Additional Rentals as the same shall become due.
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Section 6.6 Prohibition of Adverse Budget or Appropriation
Modifications. To the extent permitted by law, the Town shall not, during any Fiscal Year of
the Lease Term, make any budgetary transfers or other modifications to its then existing budget
and appropriation measures relating to the Leased Property or this Lease which would adversely
affect the Town’s ability to meet its obligation to pay Base Rentals and duly budgeted and
appropriated Additional Rentals hereunder.
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ARTICLE 7
TITLE TO LEASED PROPERTY;
LIMITATIONS ON ENCUMBRANCES
Section 7.1 Title to the Leased Property; Title Insurance. Title to the Leased
Property shall remain in the Town, subject to the Site Lease, this Lease, the Indenture and any
other Permitted Encumbrances. Except personal property purchased by the Town at its own
expense pursuant to Section 8.2 hereof, title to the Trustee’s leasehold interest in the Leased
Property and any and all additions and modifications thereto and replacements thereof shall be
held in the name of the Trustee, subject to this Lease, the Site Lease and the Indenture, until
liquidated, conveyed or otherwise disposed of as provided in Section 7.02 of the Indenture or
Article 11 hereof, or until termination of the Site Lease, notwithstanding (i) a termination hereof
by the Town by reason of an Event of Nonappropriation as provided in Section 6.4 hereof; (ii)
the occurrence of one or more Lease Events of Default as defined in Section 13.1 hereof; (iii) the
occurrence of any event of damage, destruction, condemnation, or construction defect, breach of
warranty or title defect, as provided in Article 9 hereof; or (iv) the violation by the Trustee of any
provision hereof.
Concurrently with the execution and delivery of this Lease, the Trustee shall be
provided with one or more commitments for one or more standard Leasehold Owner’s title
insurance policies issued to the Trustee, insuring the Trustee’s leasehold interest in the Leased
Property, subject only to Permitted Encumbrances, in an aggregate amount not less than the
aggregate principal amount of the Certificates or such lesser amount as shall be the maximum
insurable value of the Leased Property.
The Town shall have no right, title or interest in the Leased Property or any
additions and modifications thereto or replacements thereof, except as expressly set forth in this
Lease. The Trustee shall not, in any way, be construed as the owner of the Leased Property.
Section 7.2 No Encumbrance, Mortgage or Pledge of the Leased Property. Except
as may be permitted by this Lease, the Town shall not permit any mechanic’s or other lien to be
established or remain against the Leased Property; provided that, if the Town shall first notify the
Trustee of the intention of the Town to do so, the Town may in good faith contest any
mechanic’s or other lien filed or established against the Leased Property, and in such event may
permit the items so contested to remain undischarged and unsatisfied during the period of such
contest and any appeal therefrom unless the Trustee shall notify the Town that, in the opinion of
Counsel, by nonpayment of any such items the Trustee’s leasehold interest in the Leased
Property will be materially endangered, or the Leased Property or any part thereof will be subject
to loss or forfeiture, in which event the Town shall promptly pay and cause to be satisfied and
discharged all such unpaid items (provided, however, that such payment shall not constitute a
waiver of the right to continue to contest such items). The Trustee will cooperate in any such
contest. Except as may be permitted by this Lease, the Town shall not directly or indirectly
create, incur, assume or suffer to exist any mortgage, pledge, lien, charge, encumbrance or claim
on or with respect to the Leased Property, except Permitted Encumbrances. The Town shall
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promptly, at its expense, take such action as may be necessary to duly discharge any such
mortgage, pledge, lien, charge, encumbrance or claim not excepted above.
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ARTICLE 8
MAINTENANCE; TAXES; INSURANCE AND OTHER CHARGES
Section 8.1 Maintenance of the Leased Property by the Town. Subject to its right to
not appropriate and as otherwise provided in Section 9.3 hereof, the Town agrees that at all times
during the Lease Term, the Town will maintain, preserve and keep the Leased Property or cause
the Leased Property to be maintained, preserved and kept, in good repair, working order and
condition, and from time to time make or cause to be made all necessary and proper repairs,
including replacements, if necessary. The Trustee shall have no responsibility in any of these
matters or for the making of any additions, modifications or replacements to the Leased Property.
Section 8.2 Modification of the Leased Property; Installation of Furnishings and
Machinery of the Town. The Town shall have the privilege of making substitutions, additions,
modifications and improvements to the Leased Property, at its own cost and expense, as
appropriate and any such substitutions, additions, modifications and improvements to the Leased
Property shall be the property of the Town, subject to the Site Lease, this Lease and the
Indenture and shall be included under the terms of the Site Lease, this Lease and the Indenture;
provided, however, that such substitutions, additions, modifications and improvements shall not
in any way damage the Leased Property or cause the Leased Property to be used for purposes
other than lawful governmental functions of the Town (except to the extent of subleasing
permitted under Section 12.2 hereof) or cause the Town to violate its tax covenant in Section
10.5 hereof; and provided that the Leased Property, as improved or altered, upon completion of
such substitutions, additions, modifications and improvements, shall be of a value not less than
the value of the Leased Property immediately prior to such making of substitutions, additions,
modifications and improvements.
The Town 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 Leased Property. All such
machinery, equipment and other tangible property shall remain the sole property of the Town in
which the Trustee shall have no interests; provided, however, that title to any such machinery,
equipment and other tangible property which becomes permanently affixed to the Leased
Property shall be included under the terms of the Site Lease, this Lease and the Indenture, that
such Leased Property would be damaged or impaired by the removal of such machinery,
equipment or other tangible property.
The Town shall have the right to make substitutions to the Leased Property upon
compliance with the provisions set forth in Section 10.4 hereof.
Section 8.3 Taxes, Other Governmental Charges and Utility Charges. In the event
that the Leased Property shall, for any reason, be deemed subject to taxation, assessments or
charges lawfully made by any governmental body, the Town shall 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 Town shall be obligated to provide for Additional Rentals only for
such installments as are required to be paid during the upcoming Fiscal Year. Except for
Permitted Encumbrances, the Town shall not allow any liens for taxes, assessments or
governmental charges to exist with respect to the Leased Property (including, without limitation,
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any taxes levied upon the Leased Property which, if not paid, will become a charge on the rentals
and receipts from the Leased Property, or any interest therein, including the leasehold interests of
the Trustee), or the rentals and revenues derived therefrom or hereunder. The Town shall also
pay as Additional Rentals, as the same respectively become due, all utility and other charges and
fees and other expenses incurred in the operation, maintenance and upkeep of the Leased
Property.
The Town may, at its expense, 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 Town that, in the opinion of Counsel, by
nonpayment of any such items the value of the Leased Property will be materially endangered or
the Leased Property will be subject to loss or forfeiture, or the Trustee will be subject to liability,
in which event such taxes, assessments, utility or other charges shall be paid forthwith (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 8.4 Provisions For Liability and Property Insurance. Upon the execution
and delivery of this Lease, the Town shall, at its own expense, cause casualty and property
insurance to be carried and maintained with respect to the Leased Property in an amount equal to
the estimated replacement cost of the Leased Property. Such insurance policy or policies may
have a deductible clause in an amount deemed reasonable by the Council. The Town may, in its
discretion, insure the Leased Property under blanket insurance policies which insure not only the
Leased Property, but other buildings as well, as long as such blanket insurance policies comply
with the requirements hereof. If the Town shall insure against similar risks by self-insurance, the
Town may, at its election provide for casualty and property damage insurance with respect to the
Leased Property, partially or wholly by means of a self-insurance fund. If the Town shall elect
to self-insure, the Town Representative shall annually furnish to the Trustee a certification of the
adequacy of the Town’s reserves. The Trustee shall be named additional insured and loss payee
on any casualty and property insurance.
Upon the execution and delivery of this Lease, the Town shall, at its own expense, cause
public liability insurance to be carried and maintained with respect to the activities to be
undertaken by and on behalf of the Town in connection with the use of the Leased Property, in
an amount not less than the limitations provided in the Colorado Governmental Immunity Act
(Article 10, Title 24, Colorado Revised Statutes, as heretofore or hereafter amended). Such
insurance may contain deductibles and exclusions deemed reasonable by the Council. The
public liability insurance required by this Section may be by blanket insurance policy or policies.
If the Town shall insure against similar risks by self-insurance, the Town, at its election may
provide for public liability insurance with respect to the Leased Property, partially or wholly by
means of a self-insurance fund. If the Town shall elect to self-insure, the Town Representative
shall annually furnish to the Trustee a certification of the adequacy of the Town’s reserves. The
Trustee shall be named as additional insured and loss payee on any public liability insurance.
Any casualty and property damage insurance policy required by this Section shall be so
written or endorsed as to make payments under such insurance policy payable to the Town and
the Trustee. Each insurance policy provided for in this Section shall contain a provision to the
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effect that the insurance company shall not cancel the policy without first giving written notice
thereof to the Town at least 30 days in advance of such cancellation. All insurance policies
issued pursuant to this Section, or certificates evidencing such policies, shall be deposited with
the Trustee. No agent or employee of the Town shall have the power to adjust or settle any loss
with respect to the Leased Property in excess of $25,000, whether or not covered by insurance,
without the prior written consent of the Trustee.
Upon the initial execution and delivery of this Lease, the Town shall provide the Trustee
with evidence that the insurance required pursuant to this Section 8.4 is in effect. A certification
by the Town Representative that such insurance is in effect shall be sufficient evidence of
insurance. A certificate of insurance from the Town or the Town’s insurance agent will also be
acceptable evidence of insurance. The Trustee shall annually request evidence of insurance from
the Town on or about October 1 in each year and upon receipt of such written request, the Town
shall provide annual certification that the insurance required pursuant to this Section 8.4 is in
effect.
Section 8.5 Advances. If the Town fails to pay any Additional Rentals during the
Lease Term as such Additional Rentals become due, the Trustee may (but shall not be obligated
to) pay such Additional Rentals and the Town agrees to reimburse the Trustee to the extent
permitted by law and subject to Appropriation as provided under Article 6 hereof.
Section 8.6 Granting of Easements. As long as no Event of Nonappropriation or
Event of Lease Default shall have happened and be continuing, the Trustee, shall upon the
request of the Town, (a) grant or enter into easements, permits, licenses, party wall and other
agreements, rights-of-way (including the dedication of public roads) and other rights or
privileges in the nature of easements, permits, licenses, party wall and other agreements and
rights of way with respect to any property or rights included in this Lease (whether such rights
are in the nature of surface rights, sub-surface rights or air space rights), free from this Lease and
any security interest or other encumbrance created hereunder or thereunder; (b) release existing
easements, permits, licenses, party wall and other agreements, rights-of-way, and other rights
and privileges with respect to such property or rights, with or without consideration; and (c)
execute and deliver any instrument necessary or appropriate to grant, enter into or release any
such easement, permit, license, party wall or other agreement, right-of-way or other grant or
privilege upon receipt of: (i) a copy of the instrument of grant, agreement or release and (ii) a
written application signed by the Town Representative requesting such grant, agreement or
release and stating that such grant, agreement or release will not materially impair the effective
use or materially interfere with the operation of the Leased Property, and will not materially
adversely affect the security intended to be given by or under the Indenture, the Site Lease or this
Lease.
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ARTICLE 9
DAMAGE, DESTRUCTION AND CONDEMNATION;
USE OF NET PROCEEDS
Section 9.1 Damage, Destruction and Condemnation. If, during the Lease Term,
(a) the Leased Property shall be destroyed (in whole or in part), or damaged
by fire or other casualty; or
(b) title to, or the temporary or permanent use of, the Leased Property or the
estate of the Town or the Trustee in the Leased Property is taken under the exercise of the
power of eminent domain by any governmental body or by any person, firm or entity
acting under governmental authority; or
(c) a breach of warranty or a material defect in the construction, manufacture
or design of the Leased Property becomes apparent; or
(d) title to or the use of all or a portion of the Leased Property is lost by
reason of a defect in title thereto.
then the Town shall be obligated to continue to pay Base Rentals and Additional Rentals (subject
to Article 6 hereof).
Section 9.2 Obligation to Repair and Replace the Leased Property. The Town and
the Trustee, to the extent Net Proceeds are within their respective control, shall cause such Net
Proceeds of any insurance policies, performance bonds or condemnation awards to be deposited
in a separate trust fund. All Net Proceeds so deposited shall be applied to the prompt repair,
restoration, modification, improvement or replacement of the Leased Property by the Town,
upon receipt of requisitions by the Trustee signed by the Town Representative stating with
respect to each payment to be made:
(a) the requisition number;
(b) the name and address of the person, firm or entity to whom payment is
due;
(c) the amount to be paid; and
(d) that each obligation mentioned therein has been properly incurred, is a
proper charge against the separate trust fund and has not been the basis of any previous
withdrawal and specifying in reasonable detail the nature of the obligation, accompanied
by a bill or a statement of account for such obligation.
The Town and the Trustee shall agree to cooperate and use their best reasonable efforts
subject to the terms of the Indenture to enforce claims which may arise in connection with
material defects in the construction, manufacture or design of the Leased Property or otherwise.
If there is a balance of any Net Proceeds allocable to the Leased Property remaining after such
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repair, restoration, modification, improvement or replacement has been completed, this balance
shall be used by the Town, to:
(a) add to, modify or alter the Leased Property or add new components
thereto, or
(b) prepay the Base Rentals with a corresponding adjustment in the amount of
Base Rentals payable under Exhibit C (Base Rentals Schedule) to this Lease or
(c) accomplish a combination of (a) and (b).
Any repair, restoration, modification, improvement or replacement of the Leased
Property paid for in whole or in part out of Net Proceeds allocable to the Leased Property shall
be the property of the Town, subject to the Site Lease, this Lease and the Indenture and shall be
included as part of the Leased Property under this Lease.
Section 9.3 Insufficiency of Net Proceeds. If the Net Proceeds (plus any amounts
withheld from such Net Proceeds by reason of any deductible clause) are insufficient to pay in
full the cost of any repair, restoration, modification, improvement or replacement of the Leased
Property required under Section 9.2 of this Lease, the Town may elect to:
(a) complete the work or replace such Leased Property (or portion thereof)
with similar property of a value equal to or in excess of such portion of the Leased
Property and pay as Additional Rentals, to the extent amounts for Additional Rentals
which have been specifically appropriated by the Town are available for payment of such
cost, any cost in excess of the amount of the Net Proceeds allocable to the Leased
Property, and the Town agrees that, if by reason of any such insufficiency of the Net
Proceeds allocable to the Leased Property, the Town shall make any payments pursuant
to the provisions of this paragraph, the Town shall not be entitled to any reimbursement
therefor from the Trustee, nor shall the Town be entitled to any diminution of the Base
Rentals and Additional Rentals, for which a specific Appropriation has been effected by
the Town for such purpose, payable under Article 6 of this Lease; or
(b) apply the Net Proceeds allocable to the Leased Property to the payment of
the Purchase Option Price in accordance with Article 11 of this Lease, or an appropriate
portion thereof. In the event of an insufficiency of the Net Proceeds for such purpose, the
Town shall, subject to the limitations of Section 6.1 hereof, pay such amounts as may be
necessary to equal that portion of the Purchase Option Price which is attributable to the
Leased Property for which Net Proceeds have been received (as certified to the Trustee
by the Town); and in the event the Net Proceeds shall exceed such portion of the
Purchase Option Price, such excess shall be used as directed by the Town in the same
manner as set forth in Section 9.2 hereof; or
(c) if the Town does not timely budget and appropriate sufficient funds to
proceed under either (a) or (b) above, an Event of Nonappropriation will be deemed to
have occurred and, subject to the Town’s right to cure, the Trustee may pursue remedies
available to it following an Event of Nonappropriation.
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The above referenced election shall be made by the Town within 90 days of the
occurrence of an event specified in Section 9.1 of this Lease. It is hereby declared to be the
Town’s present intention that, if an event described in Section 9.1 hereof should occur and if the
Net Proceeds shall be insufficient to pay in full the cost of repair, restoration, modification,
improvement or replacement of the Leased Property, the Town would use its best efforts to
proceed under either paragraph (a) or paragraph (b) above; but it is also acknowledged that the
Town must operate within budgetary and other economic constraints applicable to it at the time,
which cannot be predicted with certainty; and accordingly the foregoing declaration shall not be
construed to contractually obligate or otherwise bind the Town.
Section 9.4 Cooperation of the Trustee. The Trustee shall cooperate fully with the
Town in filing any proof of loss with respect to any insurance policy or performance bond
covering the events described in Section 9.1 of this Lease and in the prosecution or defense of
any prospective or pending condemnation proceeding with respect to the Leased Property and
the enforcement of all warranties relating to the Leased Property. So long as no Event of Lease
Default or Event of Nonappropriation has occurred and is then existing, the Trustee shall not
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 Leased Property without the written consent of the Town.
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ARTICLE 10
DISCLAIMER OF WARRANTIES; OTHER COVENANTS
Section 10.1 Disclaimer of Warranties. THE TRUSTEE HAS NOT MADE AND
WILL NOT MAKE ANY WARRANTY OR REPRESENTATION, EITHER EXPRESS OR
IMPLIED, AS TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OR FITNESS FOR USE OF THE LEASED
PROPERTY OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO
THE LEASED PROPERTY. THE TOWN HEREBY ACKNOWLEDGES AND DECLARES
THAT THE TOWN IS SOLELY RESPONSIBLE FOR THE MAINTENANCE AND
OPERATION OF THE LEASED PROPERTY, AND THAT THE TRUSTEE HAS NO
RESPONSIBILITY THEREFOR. For the purpose of enabling the Town to discharge such
responsibility, the Trustee constitutes and appoints the Town as its attorney in fact for the
purpose of asserting and enforcing, at the sole cost and expense of the Town, all manufacturer’s
warranties and guaranties, express or implied, with respect to the Leased Property, as well as any
claims or rights the Trustee may have in respect of the Leased Property against any
manufacturer, supplier, contractor or other person. Except as otherwise provided in this Lease,
the Trustee shall not be liable for any direct or indirect, incidental, special, punitive or
consequential damage in connection with or arising out of this Lease or the existence, furnishing,
functioning or use by the Town of any item, product or service provided for herein except that
nothing shall relieve the Trustee’s liability for any claims, damages, liability or court awards,
including costs, expenses and attorney fees, relating to or arising from the Trustee’s actions or
omissions that result from the negligence, bad faith or intentional misconduct of the Trustee or
its employees.
Section 10.2 Further Assurances and Corrective Instruments. The Trustee and the
Town agree that they will, from time to time, execute, acknowledge and deliver, or cause to be
executed, acknowledged and delivered, such amendments hereof or supplements hereto and such
further instruments as may reasonably be required for correcting any inadequate or incorrect
description of the Leased Property.
Section 10.3 Compliance with Requirements. During the Lease Term, the Town and
the Trustee shall observe and comply promptly to the extent possible with all current and future
orders of all courts having jurisdiction over the Leased Property, provided that the Town and the
Trustee may contest or appeal such orders so long as they are in compliance with such orders
during the contest or appeal period, and all current and future requirements of all insurance
companies writing policies covering the Leased Property.
Section 10.4 Release and Substitution of Leased Property. So long as no Event of
Lease Default or Event of Nonappropriation shall have occurred and be continuing, the Trustee
shall release all or any portion of the Leased Property, and shall execute all documents necessary
or appropriate to reconvey or release such portion of the Leased Property to the Town, free of all
restrictions and encumbrances imposed or created by the Site Lease, this Lease or the Indenture,
upon receipt by the Trustee of the following: (a) a written request of the Town Representative
for such release, describing the portion of the Leased Property to be released; (b) a certificate of
the Town Representative certifying (i) the fair market value of the portion of the Leased Property
to be released and of any real property to be substituted for the portion of the Leased Property to
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be released; (ii) that the disposition of the portion of the Leased Property to be released and the
substitution therefor of the real property to be substituted for the portion of the Leased Property
to be released (if any) will not materially adversely affect the ability of the Town to operate the
Leased Property or to fulfill its obligations under this Lease; (iii) that any real property to be
substituted for a portion of the Leased Property to be released is necessary or useful to the
operation of the Leased Property; and (iv) that the fair market value of any real property to be
substituted for the portion of the Leased Property to be released, together with cash to be paid by
the Town to the Trustee, if any, is at least equal to the fair market value of the portion of the
Leased Property to be released; (c) appraisals of the fair market value of the portion of the
Leased Property to be released and any real property to be substituted for the portion of the
Leased Property to be released, respectively, by a member of the American Institute of Real
Estate Appraisers (MAI); and (d) supplements and amendments to the Site Lease, this Lease and
the Indenture and any other documents necessary to effect the substitution for any portion of the
Leased Property to be released. The Town agrees that any cash paid to the Trustee pursuant to
the provisions of this Section 10.4 shall be used to redeem or defease Outstanding Certificates.
Section 10.5 Tax Covenants. The Town acknowledges that the moneys in all funds and
accounts expected to be created under the Indenture are to be invested or deposited by the
Trustee, at the written direction of the Town.
The Town covenants for the benefit of the Owners of the Certificates that it will not take
any action or omit to take any action with respect to the Certificates, the proceeds thereof, any
other funds of the Town or any facilities financed or refinanced with the proceeds of the
Certificates (except for the possible exercise of the Town’s right to terminate this Lease as
provided herein) if such action or omission (i) would cause the interest on the Certificates to lose
its exclusion from gross income for federal income tax purposes under Section 103 of the Tax
Code, or (ii) would cause interest on the Certificates to lose its exclusion from alternative
minimum taxable income as defined in Section 55(b)(2) of the Tax Code, except to the extent
such interest is required to be included in adjusted current earnings adjustment applicable to
corporations under Section 56 of the Tax Code in calculating corporate alternative minimum
taxable income, or (iii) would cause interest on the Certificates to lose its exclusion from
Colorado taxable income or to lose its exclusion from Colorado alternative minimum taxable
income under present Colorado law. Subject to the Town’s right to terminate this Lease as
provided herein, the foregoing covenant shall remain in full force and effect, notwithstanding the
payment in full or defeasance of the Certificates, until the date on which all obligations of the
Town in fulfilling the above covenant under the Tax Code and Colorado law have been met.
In addition, the Town covenants that its direction of investments pursuant to Article 5 of
the Indenture shall be in compliance with the procedures established by the Tax Certificate to the
extent required to comply with its covenants contained in the foregoing provisions of this
Section. The Town hereby agrees that, to the extent necessary, it will, during the Lease Term,
pay to the Trustee such sums as are required for the Trustee to pay the amounts due and owing to
the United States Treasury as rebate payments. Any such payment shall be accompanied by
directions to the Trustee to pay such amounts to the United States Treasury. Any payment of
Town moneys pursuant to the foregoing sentence shall be Additional Rentals for all purposes of
this Lease.
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The Town is to execute the Tax Certificate in connection with the execution and delivery
of this Lease, which Tax Certificate shall provide further details in respect of the Town’s tax
covenants herein.
For the purpose of Section 265(b)(3)(B) of the Code, the Town hereby designates the
Certificates as qualified tax-exempt obligations.
Section 10.6 Undertaking to Provide Ongoing Disclosure. The Town covenants for
the benefit of the Owners of the Certificates to comply with the terms of the Continuing
Disclosure Certificate, provided that a failure of the Town to do so shall not constitute an Event
of Lease Default. The Trustee shall have no power or duty to enforce this Section. Unless
otherwise required by law, no Certificate owner shall be entitled to damages for the Town’s non-
compliance with its obligations under this Section; however, the Certificate Owners may enforce
specific performance of the obligations contained in this Section by any judicial proceedings
available.
Section 10.7 Covenant to Reimburse Legal Expenses. To the extent permitted by law,
the Town shall defend and hold harmless the Trustee against claims arising from the alleged
negligent acts or omissions of the Town’s public employees, which occurred or are alleged to
have occurred during the performance of their duties and within the scope of their employment,
unless such acts or omissions are, or are alleged to be, willful and wanton. Such claims shall be
subject to the limitations of the Colorado Governmental Immunity Act, C.R.S. 24-10-101 to 24-
10-120. The Town shall include as Additional Rentals, the reimbursement of reasonable and
necessary expenses incurred by the Trustee to defend the Trustee from and against all claims, by
or on behalf of any person, firm, corporation or other legal entity arising from the conduct or
management of the Leased Property or from any work or thing done on the Leased Property
during the Lease Term requested by the Town, or from any condition of the Leased Property
caused by the Town. This duty to reimburse the Trustee’s legal expenses is not an
indemnification and it is expressly understood that the Town is not indemnifying the Trustee
and, as previously stated, is limited to Net Proceeds and moneys, if any, in excess of such Net
Proceeds, for which an Appropriation has been effected.
Section 10.8 Access to the Leased Property; Rights to Inspect Books. The Town
agrees that the Trustee shall have the right at all reasonable times to examine and inspect the
Leased Property (subject to such regulations as may be imposed by the Town for security
purposes) and all of the Town’s books and records with respect thereto, but the Trustee has no
duty to inspect the Leased Property books or records. The Town further agrees that the Trustee
shall have such rights of access to the Leased Property as may be reasonably necessary to cause
the proper maintenance of the Leased Property in the event of failure by the Town to perform its
obligations under this Lease. The Indenture allows the Town to have the right at all reasonable
times to examine and inspect all of the Trustee’s books and records with respect to the Leased
Property and all funds and accounts held under the Indenture.
The Town and its representatives shall have the right to examine and inspect the books
and records of the Trustee relating to the Leased Property at all reasonable times from the date of
this Lease and until three years after the termination date of this Lease.
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ARTICLE 11
PURCHASE OPTION
Section 11.1 Purchase Option. The Town shall have the option to purchase the
Trustee’s leasehold interest in the Leased Property, but only if an Event of Lease Default or an
Event of Nonappropriation has not occurred and is then continuing. The Town may exercise its
option on any date by complying with one of the conditions set forth in Section 11.2.
The Town shall give the Trustee notice of its intention to exercise its option not less than
forty-five (45) days in advance of the date of exercise and shall deposit the required moneys with
the Trustee on or before the date selected to pay the Purchase Option Price. The Trustee may
waive such notice or may agree to a shorter notice period in the sole determination of the
Trustee.
If the Town shall have given notice to the Trustee of its intention to purchase the
Trustee’s leasehold interest in the Leased Property or prepay Base Rentals, but shall not have
deposited the amounts with the Trustee on the date specified in such notice, the Town shall
continue to pay Base Rentals, which have been specifically appropriated by the Town for such
purpose, as if no such notice had been given.
Section 11.2 Conditions for Purchase Option. The Trustee shall transfer and release
the Trustee’s leasehold interests in the Leased Property to the Town in the manner provided for
in Section 11.3 of this Lease; provided, however, that prior to such transfer and release, either:
(a) the Town shall have paid the then applicable Purchase Option Price which
shall equal the sum of the amount necessary to defease and discharge the Indenture as
provided therein (i.e., provision for payment of all principal and interest portions of any
and all Certificates which may have been executed and delivered pursuant to the
Indenture shall have been made in accordance with the terms of the Indenture) plus any
fees and expenses then owing to the Trustee; or
(b) the Town shall have paid all Base Rentals set forth in Exhibit C (Base
Rentals Schedule) hereto, for the entire maximum Lease Term, and all then current
Additional Rentals required to be paid hereunder.
At the Town’s option, amounts then on deposit in any fund held under the Indenture
(except the Rebate Fund and excluding any defeasance escrow funds) may be credited toward the
Purchase Option Price.
Section 11.3 Manner of Conveyance. At the closing of the purchase or other
conveyance of all of the Trustee’s leasehold interest in the Leased Property pursuant to Section
11.2 of this Lease, the Trustee shall release and terminate the Site Lease, this Lease and the
Indenture and execute and deliver to the Town any necessary documents releasing, assigning,
transferring and conveying the Trustee’s leasehold interest in the Leased Property, as they then
exist, subject only to the following:
(a) Permitted Encumbrances, other than the Site Lease, this Lease and the
Indenture;
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(b) all liens, encumbrances and restrictions created or suffered to exist by the
Trustee as required or permitted by the Site Lease, this Lease or the Indenture or arising
as a result of any action taken or omitted to be taken by the Trustee as required or
permitted by the Site Lease, this Lease or the Indenture;
(c) any lien or encumbrance created or suffered to exist by action of the
Town; and
(d) those liens and encumbrances (if any) to which title to the Leased Property
was subject when leased to the Trustee.
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ARTICLE 12
ASSIGNMENT AND SUBLEASING
Section 12.1 Assignment by the Trustee; Replacement of the Trustee. Except as
otherwise provided in this Lease and the Indenture, this Lease may not be assigned by the
Trustee for any reason other than to a successor by operation of law or to a successor trustee
under the Indenture or with the prior written consent of the Town which consent shall not be
unreasonably withheld. The Trustee will notify the Town of any assignment to a successor by
operation of law.
If an Event of Lease Default or Event of Nonappropriation has occurred and is
continuing, the Trustee may act as herein provided, including exercising the remedies set forth in
Section 13.2, without the prior written direction of the Town.
Section 12.2 Assignment and Subleasing by the Town. This Lease may not be
assigned by the Town for any reason other than to a successor by operation of law. However, the
Leased Property may be subleased, as a whole or in part, by the Town, without the necessity of
obtaining the consent of the Trustee or any owner of the Certificates subject to each of the
following conditions:
(a) The Leased Property may be subleased, in whole or in part, only to an
agency or department of, or a political subdivision of, the State, or to another entity or
entities with Approval of Special Counsel;
(b) This Lease, and the obligations of the Town hereunder, shall, at all times
during the Lease Term remain obligations of the Town, and the Town shall maintain its
direct relationships with the Trustee, notwithstanding any sublease;
(c) The Town shall furnish or cause to be furnished to the Trustee a copy of
any sublease agreement;
(d) No sublease by the Town shall cause the Leased Property to be used for
any purpose which would cause the Town to violate its tax covenant in Section 10.5
hereof; and
(e) Any sublease of the Leased Property shall provide that it shall
automatically terminate upon a termination of this Lease.
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ARTICLE 13
EVENTS OF LEASE DEFAULT AND REMEDIES
Section 13.1 Events of Lease Default Defined. Any one of the following shall be
Events of Lease Default under this Lease:
(a) failure by the Town to pay any Base Rentals or Additional Rentals, which
have been specifically appropriated by the Town for such purpose, during the Initial
Term or any Renewal Term, within five (5) Business Days of the date on which they are
due; or
(b) subject to the provisions of Section 6.5 hereof, failure by the Town to
vacate or surrender possession of the Leased Property by March 1 of any Renewal Term
in respect of which an Event of Nonappropriation has occurred; or
(c) failure by the Town to observe and perform any covenant, condition or
agreement on its part to be observed or performed hereunder, other than as referred to in
(a) or (b), for a period of 30 days after written notice, specifying such failure and
requesting that it be remedied shall be received by the Town from the Trustee, unless the
Trustee shall agree in writing to an extension of such time prior to its expiration;
provided that if the failure stated in the notice cannot be corrected within the applicable
period, the Trustee shall not withhold its consent to an extension of such time if
corrective action can be instituted by the Town within the applicable period and
diligently pursued until the default is corrected; or
(d) failure by the Town to comply with the terms of the Site Lease.
The foregoing provisions of this Section 13.1 are subject to the following limitations:
(i) the Town shall be obligated to pay the Base Rentals and Additional
Rentals, which have been specifically appropriated by the Town for such purpose,
only during the then current Lease Term, except as otherwise expressly provided
in this Lease; and
(ii) if, by reason of Force Majeure, the Town or the Trustee shall be
unable in whole or in part to carry out any agreement on their respective parts
herein contained other than the Town’s agreement to pay the Base Rentals and
Additional Rentals due hereunder, the Town or the Trustee shall not be deemed in
default during the continuance of such inability. The Town and the Trustee each
agree, however, to remedy, as promptly as legally and reasonably possible, the
cause or causes preventing the Town or the Trustee from carrying out their
respective agreements; provided that the settlement of strikes, lockouts and other
industrial disturbances shall be entirely within the discretion of the Town.
Section 13.2 Remedies on Default. Whenever any Event of Lease Default shall have
happened and be continuing beyond any applicable cure period, the Trustee may, or shall at the
request of the owners of a majority in aggregate principal amount of the Certificates then
Outstanding and upon indemnification as to costs and expenses as provided in the Indenture,
37
without any further demand or notice, take one or any combination of the following remedial
steps:
(a) terminate the Lease Term and give notice to the Town to vacate and
surrender possession of the Leased Property, which vacation and surrender the Town
agrees to complete within sixty (60) days from the date of such notice; provided, in the
event the Town does not vacate and surrender possession on the termination date, the
provisions of Section 6.5 hereof shall apply;
(b) lease or sublease the Leased Property or sell or assign any interest the
Trustee has in the Leased Property, including the Trustee’s leasehold interest in the
Leased Property;
(c) recover from the Town:
(i) the portion of Base Rentals and Additional Rentals, for which a
specific Appropriation has been effected by the Town for such
purpose, which would otherwise have been payable hereunder,
during any period in which the Town continues to occupy, use or
possess the Leased Property; and
(ii) Base Rentals and Additional Rentals, for which a specific
Appropriation has been effected by the Town for such purpose,
which would otherwise have been payable by the Town hereunder
during the remainder, after the Town vacates and surrenders
possession of the Leased Property, of the Fiscal Year in which
such Event of Lease Default occurs.
(d) take whatever action at law or in equity may appear necessary or desirable
to enforce its rights in and to the Leased Property under the Site Lease, this Lease and the
Indenture.
Upon the occurrence of an Event of Nonappropriation, the Trustee shall be entitled to
recover from the Town the amounts set forth in Section 13.2(c)(i) hereof if the Town continues
to occupy the Leased Property after December 31 of the Fiscal Year in which such Event of
Nonappropriation occurs.
The Trustee shall also be entitled, upon any Event of Lease Default, to any moneys in any
funds or accounts created under the Indenture (except the Rebate Fund or any defeasance escrow
accounts).
Section 13.3 Limitations on Remedies. The remedies in connection with an Event of
Lease Default shall be limited as set forth in this Section. A judgment requiring a payment of
money may be entered against the Town by reason of an Event of Lease Default only as to the
Town’s liabilities described in paragraph (c) of Section 13.2 hereof. A judgment requiring a
payment of money may be entered against the Town by reason of an Event of Nonappropriation
only to the extent that the Town fails to vacate and surrender possession of the Leased Property
as required by Section 6.4 of this Lease, and only as to the liabilities described in paragraph (c)(i)
38
of Section 13.2 hereof. The remedy described in paragraph (c)(ii) of Section 13.2 of this Lease is
not available for an Event of Lease Default consisting of failure by the Town to vacate and
surrender possession of the Leased Property by March 1 following an Event of
Nonappropriation.
Section 13.4 No Remedy Exclusive. Subject to Section 13.3 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 or shall be construed to be a
waiver thereof, but any such right and power may be exercised from time to time and as often as
may be deemed expedient. In order to entitle the Trustee to exercise any remedy reserved in this
Article 13, it shall not be necessary to give any notice, other than such notice as may be required
in this Article 13.
Section 13.5 Waivers. The Trustee may waive any Event of Lease Default under this
Lease and its consequences. In the event that any agreement contained herein should be
breached by either party and thereafter waived by the other party, such waiver shall be limited to
the particular breach so waived and shall not be deemed to waive any other breach hereunder.
Payment of Base Rentals or Additional Rentals by the Town shall not constitute a waiver of any
breach or default by the Trustee hereunder.
Section 13.6 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 or 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 on demand
therefor pay to the nondefaulting party, to the extent permitted by law, the reasonable fees of
such attorneys and such other reasonable expenses so incurred by the nondefaulting party.
Notwithstanding the foregoing, any such fees and expenses owed by the Town hereunder shall
constitute Additional Rentals for all purposes of this Lease and shall be subject to Appropriation.
Section 13.7 Waiver of Appraisement, Valuation, Stay, Extension and Redemption
Laws. To the extent permitted by law, in the case of an Event of Nonappropriation or an Event of
Lease Default neither the Trustee nor the Town 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,
extension or redemption laws now or hereafter in force in order to prevent or hinder the
enforcement of the Indenture; and the Trustee and the Town, 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. Notwithstanding the foregoing, it is expressly
understood that the Town cannot and does not hereby waive its right to set up, claim or seek to
take advantage of its police powers or its Colorado constitutional or statutory right of eminent
domain.
39
ARTICLE 14
MISCELLANEOUS
Section 14.1 Sovereign Powers of Town. Nothing in this Lease shall be construed as
diminishing, delegating, or otherwise restricting any of the sovereign powers or immunities of
the Town. Nothing in this Lease shall be construed to require the Town to occupy and operate
the Leased Property other than as lessee, or to require the Town to exercise its right to purchase
the Leased Property as provided in Article 11 hereof.
Section 14.2 Notices. All notices, certificates or other communications to be given
hereunder shall be sufficiently given and shall be deemed given when delivered or mailed by
certified or registered mail, postage prepaid, addressed as follows:
if to the Trustee,
UMB Bank, n.a.
1670 Broadway
Denver, CO 80202
Attention: Corporate Trust and Escrow Services
if to the Town,
Town of Avon, Colorado
One Lake Street
P. O. Box 975
Avon, Colorado 81620
Attention: Finance Director
The Town and the Trustee may, by written notice, designate any further or different
addresses to which subsequent notices, certificates or other communications shall be sent.
Section 14.3 Third Party Beneficiaries. It is expressly understood and agreed that the
Owners of the outstanding Certificates are third party beneficiaries to this Lease and enforcement
of the terms and conditions of this Lease, and all rights of action relating to such enforcement,
shall be strictly reserved to the Town, as lessee and the Trustee, as lessor, and their respective
successors and assigns, and to the Owners of the Certificates. Except as hereinafter provided,
nothing contained in this Lease shall give or allow any such claim or right of action by any other
or third person on this Lease. It is the express intention of the Town and the Trustee that any
person other than the Town, the Trustee, or the Owners of the Certificates receiving services or
benefits under this Lease shall be deemed to be an incidental beneficiary only.
Section 14.4 Binding Effect. This Lease shall inure to the benefit of and shall be
binding upon the Trustee and the Town and their respective successors and assigns, subject,
however, to the limitations contained in Article 12 of this Lease.
Section 14.5 Amendments. This Lease may only be amended, changed, modified or
altered as provided in the Indenture.
40
Section 14.6 Amounts Remaining in Funds. It is agreed by the parties hereto that any
amounts remaining in the Base Rentals Fund, the Costs of Execution and Delivery Fund, or any
other fund or account created under the Indenture (except the Rebate Fund or any defeasance
escrow account), 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 this Lease and the Indenture) and fees and expenses of the Trustee in accordance
with this Lease and the Indenture, shall belong to and be paid to the Town by the Trustee, as an
overpayment of Base Rentals.
Section 14.7 Triple Net Lease. This Lease shall be deemed and construed to be a
“triple net lease” and, subject to the prior Appropriation requirements hereof, the Town shall pay
absolutely net during the Lease Term, the Base Rentals, the Additional Rentals and all expenses
of, or other payments in respect of, the Leased Property as required to be paid by the Town under
this Lease, for which a specific Appropriation has been effected by the Town for such purpose,
free of any deductions, and without abatement, deduction or setoff (other than credits against
Base Rentals expressly provided for in this Lease).
Section 14.8 Computation of Time. In computing a period of days, the first day is
excluded and the last day is included. If the last day of any period is not a Business Day, the
period is extended to include the next day which is a Business Day. If a number of months is to
be computed by counting the months from a particular day, the period ends on the same
numerical day in the concluding month as the day of the month from which the computation is
begun, unless there are not that many days in the concluding month, in which case the period
ends on the last day of that month. Notwithstanding the foregoing, Base Rentals shall be
recalculated in the event of any Prepayment of Base Rentals as provided in Section 6.2(b) hereof.
Section 14.9 Payments Due on Holidays. If the date for making any payment or the
last day for performance of any act or the exercising of any right, as provided in this Lease, shall
be a day other than a Business Day, such payment may be made or act performed or right
exercised on the next succeeding Business Day, with the same force and effect as if done on the
nominal date provided in this Lease.
Section 14.10 Severability. Except for the requirement of the Town to pay Base Rentals
for which a specific Appropriation has been effected by the Town for such purpose and the
requirement of the Trustee to provide quiet enjoyment of the Leased Property and to convey the
Trustee’s leasehold interest in the Leased Property to the Town under the conditions set forth in
Article 11 of this Lease (which, if held invalid or unenforceable by any court of competent
jurisdiction, may have the effect of invalidating or rendering unenforceable the other provisions
of this Lease), in the event that any other provision 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 14.11 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.
41
Section 14.12 Applicable Law. This Lease shall be governed by and construed in
accordance with the law of the State of Colorado.
Section 14.13 The Trustee Is Independent of the Town. Neither the Trustee nor any
agent or employee of the Trustee shall be or shall be deemed to be an agent or employee of the
Town. The Trustee acknowledges that the Trustee and its employees are not entitled to
unemployment insurance benefits of the Town unless the Trustee or a third party otherwise
provides such coverage and that the Town does not pay for or otherwise provide such coverage.
The Trustee shall have no authorization, express or implied, to bind the Town to any agreements,
liability or understanding except as expressly set forth herein. The Trustee shall provide and
keep in force workers’ compensation (and provide proof of such insurance when requested by
the Town) and unemployment compensation insurance in the amounts required by law and shall
be solely responsible for the acts of the Trustee, its employees and agents.
Section 14.14 Governmental Immunity. Notwithstanding any other provisions of this
Lease to the contrary, no term or condition of this Lease shall be construed or interpreted as a
waiver, express or implied, of any of the immunities, rights, benefits, protections or other
provisions of the Colorado Governmental Immunity Act, Section 24-10-101, et. seq., C.R.S., as
now or hereafter amended.
Section 14.15 Recitals. The Recitals set forth in this Lease are hereby incorporated by
this reference and made a part of this Lease.
Section 14.16 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 14.17 Trustee’s Disclaimer. It is expressly understood and agreed that (a) the
Lease is executed by UMB Bank, n.a. solely in its capacity as Trustee under the Indenture, and
(b) nothing herein shall be construed as creating any liability on UMB Bank, n.a. other than in its
capacity as Trustee under the Indenture. All financial obligations of the Trustee under this
Lease, except those resulting from its willful misconduct or negligence, are limited to the Trust
Estate.
Section 14.18 Electronic Transactions. The parties hereto agree that the transactions
described herein may be conducted and related documents may be stored by electronic means.
Copies, telecopies, facsimiles, electronic files and other reproductions of original executed
documents shall be deemed to be authentic and valid counterparts of such original documents for
all purposes, including the filing of any claim, action or suit in the appropriate court of law.
42
IN WITNESS WHEREOF, the parties have executed this Lease Purchase Agreement as
of the day and year first above written.
TOWN OF AVON, COLORADO,
as Lessee
UMB BANK, N.A., solely in its capacity of
Trustee under the Indenture, as Lessor
By: ________________________________ By: ________________________________
Jennie Fancher, Mayor Leigh Lutz, Senior Vice President
Attest:
By:_____________________________
Debbie Hoppe, Town Clerk
[TOWN SEAL]
43
STATE OF COLORADO )
) ss.
TOWN OF AVON )
)
COUNTY OF EAGLE )
The foregoing instrument was acknowledged before me this ____ day of _______, 2016,
by Jennie Fancher and Debbie Hoppe, as Mayor and Town Clerk, respectively, of the Town of
Avon, Colorado.
WITNESS my hand and official seal.
(SEAL) ____________________________________
Notary Public
My commission expires:
****************
STATE OF COLORADO )
) ss.
CITY AND COUNTY OF DENVER )
The foregoing instrument was acknowledged before me this ____ day of ______, 2016,
by Leigh Lutz, as Senior Vice President of UMB Bank, n.a., as Trustee.
WITNESS my hand and official seal.
(SEAL) ____________________________________
Notary Public
My commission expires:
A-1
EXHIBIT A
DESCRIPTION OF LEASED PROPERTY
The Leased Property consists of the Site and the premises, buildings and improvements located
thereon (with the exceptions noted below) as set forth below, as amended from time to time.
Site:
[insert legal.
Address: [insert addres]
Description of Project:
[describe]
B-1
EXHIBIT B
PERMITTED ENCUMBRANCES
“Permitted Encumbrances” as defined in Section 1.2 of this Lease and the following:
(1) Liens for ad valorem taxes and special assessments not then delinquent, if
applicable.
(2) The Site Lease.
(3) This Lease.
(4) All other encumbrances appearing of record on the date hereof.
C-1
EXHIBIT C
BASE RENTALS SCHEDULE (1)
Date
Base Rentals Principal
Component
Base Rentals Interest
Component Total Base Rentals
Annual Base
Rentals
TOTAL
________________
Footnotes on following page:
C-2
__________________
(1) With respect to Certificates that were sold in the initial offering at a discount, the difference between
the stated redemption price of such Certificates at maturity and the initial offering price of those
Certificates to the public will be treated as “original issue discount” for federal income tax purposes and
will constitute interest on the Certificates. The following portions of principal shall be treated as interest
on the Certificates maturing on the following dates:
Maturity
Date
Portion of Principal
Component
that is also Interest on
Certificates (OID)
Base Rental payments are due on May 15 and November 15 of each year during the Lease Term.
The Base Rentals have been calculated on the basis of a 360-day year of twelve 30-day months and any
recalculation of Base Rentals under Section 6.2(b) hereof shall be done on the same basis. If Base
Rentals are stated to be due on any date that is not a Business Day, such Base Rentals shall be due on the
next day that is a Business Day without the accrual of interest on Base Rentals between such dates.
Statement Regarding the Leased Property
The duration of the Lease, throughout the maximum Lease Term, does not exceed the weighted
average useful life of the Leased Property and, to the extent that the Leased Property constitutes items of
personal property, such items are considered paid from the first Base Rentals described above.
D-1
EXHIBIT D
FORM OF NOTICE OF LEASE RENEWAL
To: UMB Bank, n.a., as Trustee
Attention: Corporate Trust and Escrow Services
The undersigned is the Town Representative of the Town of Avon, Colorado (the
“Town”). The Town is the lessee under that certain Lease Purchase Agreement, dated as of
[________], 2016 (the “Lease”), between the Town and UMB Bank, n.a., solely in its capacity of
Trustee under the Indenture, as the lessor thereunder. I am familiar with the facts herein certified
and am authorized and qualified to certify the same. The undersigned hereby states and certifies:
(a) the Town has effected or intends to effect on a timely basis an
Appropriation for the ensuing Fiscal Year which includes (1) sufficient amounts
authorized and directed to be used to pay all the Base Rentals and (2) sufficient amounts
to pay such Additional Rentals as are estimated to become due, all as further provided in
Sections 6.2, 6.3 and 6.4 of the Lease, whereupon, the Lease shall be renewed for the
ensuing Fiscal Year;
_______________
Initial
or
(b) the Town has determined not to renew the Lease for the ensuing Fiscal
Year.
_______________
Initial
TOWN OF AVON, COLORADO
By:
Town Representative
Date:____________________________________________
G-1
29827604 v1
AFTER RECORDATION PLEASE RETURN TO:
Butler Snow LLP
1801 California Street, Suite 5100
Denver, Colorado 80202
Attention: Dee P. Wisor, Esq.
Pursuant to Section 39-13-104(1)(j), Colorado Revised Statutes, this Site and Improvement Lease is exempt from
the documentary fee.
SITE LEASE AGREEMENT
DATED AS OF [________], 2016
BETWEEN
TOWN OF AVON, COLORADO
AS LESSOR
AND
UMB BANK, N.A.,
SOLELY IN ITS CAPACITY AS TRUSTEE UNDER THE INDENTURE,
AS LESSEE
1
This SITE LEASE AGREEMENT, dated as of [________], 2016 (this “Site Lease”), is
by and between the TOWN OF AVON, COLORADO, a home rule municipality duly organized
and validly existing under the Constitution and laws of the State of Colorado (the “Town”), as
lessor, and UMB BANK, N.A., Denver, Colorado, a national banking association duly
organized and validly existing under the laws of the United States of America, solely in its
capacity as trustee under the Indenture (the “Trustee”), as lessee.
PREFACE
Unless the context otherwise requires, capitalized terms used herein shall have the
meanings ascribed to them herein and in the Lease Purchase Agreement, dated as of [________],
2016 (the “Lease”), between the Trustee, as lessor, and the Town, as lessee.
RECITALS
1. The Town is a duly organized and existing home rule municipality of the State of
Colorado, created and operating pursuant to Article XX of the Constitution of the State of
Colorado and the home rule charter of the Town (the “Charter”).
2. Pursuant to Chapter XIV of the Charter, the Town 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.
3. The Town is authorized by Article XX, Section 6 of the Colorado Constitution, its
Charter, and part 8 of Article 15 of title 31, Colorado Revised Statutes (“C.R.S.”), to enter into
rental or leasehold agreements in order to provide necessary land, buildings, equipment and other
property for governmental or proprietary purposes.
4. The Town Council of the Town (the “Council”) has determined that it is in the
best interests of the Town and its inhabitants and public interest and necessity to execute the
Lease to finance the acquisition of certain real property for Town purposes, as authorized by law
(the “Project”).
5. The Council has determined that it is in the best interests of the Town and its
inhabitants to provide for the financing the Project by entering into this Site Lease and the Lease.
6. The Town owns, or will, contemporaneously with the execution and delivery
hereof, own, in fee title, the Site (the “Site”) and the premises, buildings and improvements
located thereon, (as more particularly described in Exhibit A attached hereto, the “Leased
Property”). To accomplish the Project, the Trustee will acquire a leasehold interest in the Site by
leasing the Site from the Town pursuant to this Site Lease and will lease the Site back to the
Town pursuant to the Lease.
7. The Council has determined that it is in the best interest of the Town and its
residents and inhabitants to provide for the financing of the Project by entering into this Site
Lease and the Lease, and by leasing the Project from the Trustee pursuant to the terms of the
Lease, and subleasing the Site from the Trustee pursuant to the Lease.
2
8. The Trustee and the Town intend that this Site Lease set forth their entire
understanding and agreement regarding the terms and conditions upon which the Trustee is
leasing the Leased Property from the Town.
9. Contemporaneously with the execution and delivery of this Site Lease and the
Lease, the Trustee will execute and deliver an Indenture of Trust (the “Indenture”) pursuant to
which there is expected to be executed and delivered certain certificates of participation (the
“Certificates”) dated as of their date of delivery that shall evidence proportionate interests in the
right to receive certain Revenues (as defined in the Lease), shall be payable solely from the
sources therein provided and shall not directly or indirectly obligate the Town to make any
payments beyond those appropriated for any fiscal year during which the Lease shall be in effect.
10. The proceeds of the Certificates will be utilized for the Project, as well as for the
payment of the costs of execution and delivery of the Certificates.
11. The Town proposes to enter into this Site Lease with the Trustee as material
consideration for the Trustee’s agreement to lease the Leased Property to the Town pursuant to
the Lease. The Trustee shall prepay in full its rental payments due under this Site Lease which
rental payments shall be used by the Town to effect the Project, all pursuant to this Site Lease,
the Lease and the Indenture.
NOW, THEREFORE, for and in consideration of the mutual promises and covenants
herein contained, the parties hereto agree as follows;
Section 1. Site Lease and Terms. The Town hereby demises and leases to the
Trustee and the Trustee hereby leases from the Town, on the terms and conditions hereinafter set
forth, the Leased Property, subject to Permitted Encumbrances as described in Exhibit B hereto.
The term of this Site Lease shall commence on the date hereof and shall end on
December 31, 20[__] (the “Site Lease Termination Date”), unless such term is sooner terminated
as hereinafter provided. If, prior to the Site Lease Termination Date, the Trustee has transferred
and conveyed the Trustee’s leasehold interest in all of the Leased Property pursuant to Article 11
of the Lease as a result of the Town’s payment of (a) the applicable Purchase Option Price
thereunder; or (b) all Base Rentals and Additional Rentals, all as further provided in Section 11.2
of the Lease, then the term of this Site Lease shall end in connection with such transfer and
conveyance.
The term of any sublease of the Leased Property or any portion thereof, or any
assignment of the Trustee’s interest in this Site Lease, pursuant to Section 5 hereof, the Lease
and the Indenture, shall not extend beyond December 31, 20[__]. At the end of the term of this
Site Lease, all right, title and interest of the Trustee, or any sublessee or assignee, in and to the
Leased Property, shall terminate. Upon such termination, the Trustee and any sublessee or
assignee shall execute and deliver to the Town any necessary documents releasing, assigning,
transferring and conveying the Trustee’s, sublessee’s or assignee’s respective interests in the
Leased Property.
Section 2. Rental. The Trustee has paid to the Town and the Town hereby
acknowledges receipt from the Trustee as and for rental hereunder, paid in advance, the sum of
3
$[________], as and for all rent due hereunder, and other good and valuable consideration, the
receipt and the sufficiency of which are hereby acknowledged. The Town hereby determines
that such amount is reasonable consideration for the leasing of the Leased Property to the Trustee
for the term of this Site Lease.
Section 3. Purpose. The Trustee shall use the Leased Property solely for the purpose
of leasing the Leased Property back to the Town pursuant to the Lease and for such purposes as
may be incidental thereto; provided, that upon the occurrence of an Event of Nonappropriation or
an Event of Lease Default and the termination of the Lease, the Town shall vacate the Leased
Property, as provided in the Lease, and the Trustee may exercise the remedies provided in this
Site Lease, the Lease and the Indenture.
Section 4. Owner in Fee. The Town represents that (a) it is the owner in fee of the
Leased Property, subject only to Permitted Encumbrances as described in Exhibit B hereto, and
(b) the Permitted Encumbrances do not and shall not interfere in any material way with the
Leased Property. The Trustee acknowledges that it is only obtaining a leasehold interest in the
Leased Property and pursuant to this Site Lease.
Section 5. Sales, Assignments and Subleases. Unless an Event of Nonappropriation
or an Event of Lease Default shall have occurred and except as may otherwise be provided in the
Lease, the Trustee may not sell or assign its rights and interests under this Site Lease or sublet all
or any portion of the Leased Property, without the written consent of the Town.
In the event that (a) the Lease is terminated for any reason and (b) this Site Lease is not
terminated, the Trustee may sublease the Leased Property or any portion thereof, or sell or assign
the Trustee’s leasehold interests in this Site Lease, pursuant to the terms of the Lease and the
Indenture, and any purchasers from or sublessees or assignees of the Trustee may sell or assign
its respective interests in the Leased Property, subject to the terms of this Site Lease, the Lease
and the Indenture. The Town and the Trustee (or any purchasers from or assignees or sublessees
of the Trustee) agree that, except as permitted by this Site Lease, the Lease and the Indenture and
except for Permitted Encumbrances (including purchase options under the Lease), neither the
Town, the Trustee, nor any purchasers from or sublessees or assignees of the Trustee will sell,
mortgage or encumber the Leased Property or any portion thereof during the term of this Site
Lease.
The Trustee and any other person who has the right to use the Leased Property under this
Site Lease, at its own expense, may install equipment and other personal property in or on any
portion of the Leased Property unless it is permanently affixed to the Leased Property or removal
of it would materially damage the Leased Property, in which case it will become part of the
Leased Property.
Section 6. Right of Entry. The Town reserves the right, so long as no Event of
Nonappropriation or Event of Lease Default shall have occurred, for any of its duly authorized
representatives to enter upon the Leased Property at any reasonable time to inspect the same or to
make any repairs, improvements or changes necessary for the preservation thereof.
4
Section 7. Termination. The Trustee agrees, upon the termination of this Site Lease,
to quit and surrender all of the Leased Property, and agrees that any permanent improvements
and structures existing upon the Leased Property at the time of the termination of this Site Lease
shall remain thereon.
Section 8. Default. In the event the Trustee shall be in default in the performance of
any obligation on its part to be performed under the terms of this Site Lease, which default
continues for 30 days following notice and demand for correction thereof to the Trustee, the
Town may exercise any and all remedies granted by law, except that no merger of this Site Lease
and of the Lease shall be deemed to occur as a result thereof and that so long as any Certificates
are Outstanding and unpaid under the Indenture, the Base Rentals due under the Lease shall
continue to be paid to the Trustee except as otherwise provided in the Lease. In addition, so long
as any of the Certificates are Outstanding, this Site Lease shall not be terminated except as
described in Section 1 hereof.
Section 9. Quiet Enjoyment and Acknowledgment of Ownership. The Trustee at
all times during the term of this Site Lease shall peaceably and quietly have, hold and enjoy the
Leased Property, subject to the provisions of the Lease and the Indenture, and the Town hereby
acknowledges that the Trustee shall have a leasehold interest in all improvements or additions to
be built on the Leased Property subject to this Site Lease, the Lease and the Indenture.
Section 10. Trustee’s Disclaimer. It is expressly understood and agreed that (a) this
Site Lease is executed by UMB Bank, n.a. solely in its capacity as Trustee under the Indenture,
and (b) nothing herein shall be construed as creating any liability on UMB Bank, n.a. other than
in its capacity as Trustee under the Indenture. All financial obligations of the Trustee under this
Site Lease, except those resulting from its willful misconduct or negligence, are limited to the
Trust Estate.
Section 11. Taxes; Maintenance; Insurance. During the Lease Term of the Lease
and in accordance with the provisions of the Lease, including Sections 8.1 and 8.3 thereof, the
Town covenants and agrees to pay any and all taxes, assessments or governmental charges due in
respect of the Leased Property and all maintenance costs and utility charges in connection with
the Leased Property. In the event that (a) the Lease is terminated for any reason, (b) this Site
Lease is not terminated, and (c) the Trustee subleases all or any portion of the Leased Property or
sells or assigns its interests in this Site Lease, the Trustee, or any purchaser, sublessee or
assignee of the Leased Property (including the leasehold interests of the Trustee resulting from
this Site Lease) shall pay or cause to be paid when due, all such taxes, assessments or
governmental charges and maintain the Leased Property in good condition and working order.
Any such payments that are to be made by the Trustee shall be made solely from (a) the proceeds
of such sale, subleasing or assignment, (b) from the Trust Estate, or (c) from other moneys
furnished to the Trustee under Section 8.02(m) of the Indenture, and in the absence of available
moneys identified in the preceding clauses (a) through (c), the Trustee shall be under no
obligation to pay or cause to be paid when due, all such taxes, assessments or governmental
charges and maintain the Leased Property in good condition and working order.
The provisions of the Lease shall govern with respect to the maintenance of insurance
hereunder during the Lease Term of the Lease. In the event that (a) the Lease is terminated for
5
any reason, (b) this Site Lease is not terminated, and (c) the Trustee subleases all or any portion
of the Leased Property or sells or assigns its interest in this Site Lease, the Trustee, or any
sublessee, purchaser or assignee of the Leased Property shall obtain and keep in force, (i)
commercial general liability insurance against claims for personal injury, death or damage to
property of others occurring on or in the Leased Property in an amount not less than $990,000
and (ii) property insurance in an amount not less than the full replacement value of the Leased
Property. Any such insurance that is to be obtained by the Trustee shall be paid for solely from
(a) the proceeds of such subleasing, sale or assignment, (b) from the Trust Estate, or (c) from
moneys furnished to the Trustee under Section 8.02(m) of the Indenture and in the absence of
available moneys identified in the preceding clauses (a) through (c), the Trustee shall be under
no obligation to obtain or keep in force such insurance coverages. All such insurance shall name
the Trustee, any sublessee, purchaser or assignee and the Town as insured. The Town and the
Trustee shall waive any rights of subrogation with respect to the Trustee, any sublessee,
purchaser or assignee, and the Town, and their members, directors, officers, agents and
employees, while acting within the scope of their employment and each such insurance policy
shall contain such a waiver of subrogation by the issuer of such policy.
Nothing in the preceding paragraphs or in this Site Lease shall be interpreted or construed
to require the Trustee to sublease all or any portion of the Leased Property or sell or assign its
interests in this Site Lease, in the event that the Lease is terminated for any reason and this Site
Lease is not terminated.
Section 12. Damage, Destruction or Condemnation. The provisions of the Lease
shall govern with respect to any damage, destruction or condemnation of the Leased Property
during the Lease Term of the Lease. In the event that (a) the Lease is terminated for any reason
and (b) this Site Lease is not terminated, and either (i) the Leased Property or any portion thereof
is damaged or destroyed, in whole or in part, by fire or other casualty, or (ii) title to or use of the
Leased Property or any part thereof shall be taken under the exercise of the power of eminent
domain, the Town and the Trustee, or any sublessee, purchaser or assignee of the Leased
Property from the Trustee shall cause the Net Proceeds of any insurance claim or condemnation
award to be applied in accordance with the provisions of Article 9 of the Lease.
Section 13. Hazardous Substances. Except for customary materials necessary for
operation, cleaning and maintenance of the Leased Property, none of the Town, the Trustee or
any sublessee, purchaser or assignee of the Leased Property from the Trustee shall cause or
permit any Hazardous Substance to be brought upon, generated at, stored or kept or used in or
about the Leased Property without prior written notice to the Town and the Trustee and all
Hazardous Substances, including customary materials necessary for construction, operation,
cleaning and maintenance of the Leased Property, will be used, kept and stored in a manner that
complies with all laws regulating any such Hazardous Substance so brought upon or used or kept
on or about the Leased Property. If the presence of Hazardous Substance on the Leased Property
caused or permitted by the Town, the Trustee or any sublessee, purchaser or assignee of the
Leased Property from the Trustee, as the case may be, results in contamination of the Leased
Property, or if contamination of the Leased Property by Hazardous Substance otherwise occurs
for which the Town, the Trustee or any sublessee or assignee of the Leased Property, as the case
may be, is legally liable for damage resulting therefrom, then the Town, the Trustee or any
sublessee, purchaser or assignee of the Leased Property from the Trustee, as the case may be,
6
shall reimburse the other party for its reasonable and necessary legal expenses to defend the
parties hereto or assignees hereof that have not caused or permitted such contamination and are
not so legally liable with respect to this Site Lease from claims for damages, penalties, fines,
costs, liabilities or losses; provided that the cost of such defense, (a) in the case of the Trustee,
shall be payable solely from the Trust Estate, or (b) in the case of the Town, shall be payable
only if the cost of such defense has been annually appropriated by the Town. This duty to
reimburse legal expenses is not an indemnification. It is expressly understood that none of the
Town, the Trustee or any sublessee, purchaser or assignee is indemnifying any other person with
respect to this Site Lease. Without limiting the foregoing, if the presence of any Hazardous
Substance on the Leased Property caused or permitted by:
(a) the Trustee or any sublessee, purchaser or assignee of the Leased Property
from the Trustee, as the case may be, results in any contamination of the Leased Property,
the Trustee or any sublessee, purchaser or assignee of the Leased Property from the
Trustee, as the case may be, shall provide prior written notice to the Town and the
Trustee and promptly take all actions, solely at the expense of the Trust Estate as are
necessary to effect remediation of the contamination in accordance with legal
requirements; or
(b) the Town, results in any contamination of the Leased Property, the Town
shall provide prior written notice to the Trustee and promptly take all actions, solely at
the expense of the Town, which expenses shall constitute Additional Rentals, as are
necessary to effect remediation of the contamination in accordance with legal
requirements.
Section 14. Third Party Beneficiaries. It is expressly understood and agreed that the
Owners of the outstanding Certificates are third party beneficiaries to this Site Lease and
enforcement of the terms and conditions of this Site Lease, and all rights of action relating to
such enforcement, shall be strictly reserved to the Town, as Lessor, and the Trustee, as Lessee,
and their respective successors and assigns, and to the Owners of the Certificates. Except as
hereinafter provided, nothing contained in this Site Lease shall give or allow any such claim or
right of action by any other or third person on this Site Lease. It is the express intention of the
Town and the Trustee that any person other than the Town, the Trustee or the Owners of the
Certificates receiving services or benefits under this Site Lease shall be deemed to be an
incidental beneficiary only.
Section 15. Partial Invalidity. If any one or more of the terms, provisions, covenants
or conditions of this Site Lease shall to any extent be declared invalid, unenforceable, void or
voidable for any reason whatsoever by a court of competent jurisdiction, the finding or order or
decree of which becomes final, none of the remaining terms, provisions, covenants and
conditions of this Site Lease shall be affected thereby, and each provision of this Site Lease shall
be valid and enforceable to the fullest extent permitted by law.
Section 16. No Merger. The Town and the Trustee intend that the legal doctrine of
merger shall have no application to this Site Lease and that neither the execution and delivery of
the Lease by the Trustee and the Town nor the exercise of any remedies under this Site Lease or
7
the Lease shall operate to terminate or extinguish this Site Lease or the Lease, except as
specifically provided herein and therein.
Section 17. Amendments. This Site Lease may only be amended, changed, modified
or altered as provided in the Indenture.
Section 18. Notices. All notices, statements, demands, consents, approvals,
authorizations, offers, designations, requests or other communications hereunder by either party
to the other shall be in writing and shall be sufficiently given and served upon the other party if
delivered personally or if mailed shall be made by United States registered mail, return receipt
requested, postage prepaid, at the addresses indicated in the Lease, or to such other addresses as
the respective parties may from time to time designate in writing, or in such other manner as
authorized by the Town or the Trustee, as the case may be.
Section 19. Recitals. The Recitals set forth in this Site Lease are hereby incorporated
by this reference and made a part of this Site Lease.
Section 20. Section Headings. All section headings contained herein are for
convenience of reference only and are not intended to define or limit the scope of any provision
of this Site Lease.
Section 21. Execution. This Site Lease may be executed in any number of
counterparts, each of which shall be deemed to be an original but all together shall constitute but
one and the same Site Lease.
Section 22. Governing Law. This Site Lease shall be governed by and construed in
accordance with the law of the State of Colorado without regard to choice of law analysis.
Section 23. No Waiver of Governmental Immunity. No provision of this Site Lease
shall act or be deemed to be a waiver by the Town of the Colorado Governmental Immunity Act,
CRS 24-10-101,et seq.
Section 24. Electronic Transactions. The parties hereto agree that the transactions
described herein may be conducted and related documents may be stored by electronic means.
Copies, telecopies, facsimiles, electronic files and other reproductions of original executed
documents shall be deemed to be authentic and valid counterparts of such original documents for
all purposes, including the filing of any claim, action or suit in the appropriate court of law.
8
IN WITNESS WHEREOF, the Town and the Trustee have caused this Site Lease to be
executed by their respective officers thereunto duly authorized, all as of the day and year first
above written.
TOWN OF AVON, COLORADO,
as Lessor
UMB BANK, N.A., solely in its capacity as
Trustee under the Indenture, as Lessee
By: By:
Jennie Fancher, Mayor Leigh Lutz, Senior Vice President
[SEAL]
ATTEST:
____________________________________
Debbie Hoppe, Town Clerk
9
STATE OF COLORADO )
)
COUNTY OF EAGLE ) SS.
)
TOWN OF AVON )
The foregoing instrument was acknowledged before me this ___ day of ___________,
2016, by Jennie Fancher and Debbie Hoppe, as Mayor and Town Clerk, respectively, of Town of
Avon, Colorado.
WITNESS my hand and official seal.
(SEAL) ____________________________________
Notary Public
My commission expires:
************************
STATE OF COLORADO )
) ss.
CITY AND COUNTY OF DENVER )
The foregoing instrument was acknowledged before me this _____ day of ___________,
2016, by Leigh Lutz, as Senior Vice President of UMB Bank, n.a., as Trustee.
WITNESS my hand and official seal.
(SEAL) ____________________________________
Notary Public
My commission expires:
A-1
EXHIBIT A
DESCRIPTION OF THE LEASED PROPERTY:
The Leased Property consists of the real property and the buildings and improvements
located thereon as set forth below, as amended from time to time.
[insert legal description]
Description of the Project:
[describe]
B-1
EXHIBIT B
PERMITTED ENCUMBRANCES
“Permitted Encumbrances” means, as of any particular time: (a) liens for taxes and
assessments not then delinquent, or liens which may remain unpaid pending contest pursuant to
the provisions of the Lease; (b) this Site Lease, the Lease, the Indenture and any related fixture
filing and any liens arising or granted pursuant to the Lease or the Indenture; (c) utility, access
and other easements and rights of way, licenses, permits, party wall and other agreements,
restrictions and exceptions which the Mayor or the Town Representative certifies will not
materially interfere with or materially impair the Leased Property, including rights or privileges
in the nature of easements, licenses, permits and agreements as provided in the Lease; and (d) the
easements, covenants, restrictions, liens and encumbrances (if any) to which title to the Leased
Property was subject when leased to the Trustee pursuant to this Site Lease, as shown below and
which do not interfere in any material way with the Leased Property.
The easements, covenants, restrictions, liens and encumbrances (if any) to which title to
the Leased Property was subject when leased to the Trustee pursuant to this Site Lease are as
follows:
1. Liens for ad valorem taxes and special assessments not then delinquent, if
applicable.
2. This Site Lease.
3. The Lease.
4. All other encumbrances appearing of record on the date hereof.
29828087 v1
INDENTURE OF TRUST
DATED AS OF [__________], 2016
BY
UMB BANK, N.A.,
As Trustee
i
This Table of Contents is not a part of this Indenture and is only for convenience of reference
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS ......................................................................... 3
Section 1.01
Certain Funds and Accounts. .......................................................................... 3
Section 1.02
Definitions....................................................................................................... 3
ARTICLE 2 THE CERTIFICATES .............................................................. 9
Section 2.01
Amount of the Certificates; Nature of the Certificates. .................................. 9
Section 2.02
Forms, Denominations, Maturities and Other Terms of Certificates. ............. 9
Section 2.03
Execution; Global Book-Entry System. ........................................................ 11
Section 2.04
Delivery of Certificates. ................................................................................ 12
Section 2.05
Mutilated, Lost, Stolen or Destroyed Certificates. ....................................... 13
Section 2.06
Registration of Certificates; Persons Treated as Owners; Transfer and
Exchange of Certificates. .............................................................................. 13
Section 2.07
Cancellation of Certificates. .......................................................................... 14
Section 2.08
Additional Certificates. ................................................................................. 14
Section 2.09
Uniform Commercial Code. .......................................................................... 15
ARTICLE 3 REVENUES AND FUNDS ....................................................... 16
Section 3.01
Segregation and Disposition of Proceeds of Certificates. ............................. 16
Section 3.02
Application of Revenues and Other Moneys. ............................................... 16
Section 3.03
Base Rentals Fund. ........................................................................................ 16
Section 3.04
Reserved. ....................................................................................................... 16
Section 3.05
Rebate Fund. ................................................................................................. 17
Section 3.06
Costs of Execution and Delivery Fund. ........................................................ 17
Section 3.07
Reserved. ....................................................................................................... 18
Section 3.08
Moneys to be Held in Trust. ......................................................................... 18
Section 3.09
Nonpresentment of Certificates. ................................................................... 18
Section 3.10
Repayment to the Town from the Trustee. ................................................... 18
ARTICLE 4 REDEMPTION OF CERTIFICATES ...................................... 20
Section 4.01
Optional Redemption. ................................................................................... 20
Section 4.02
Mandatory Sinking Fund Redemption. ......................................................... 20
Section 4.03
Extraordinary Mandatory Redemption. ........................................................ 21
Section 4.04
Partial Redemption. ....................................................................................... 22
Section 4.05
Notice of Redemption. .................................................................................. 22
Section 4.06
Redemption Payments. ................................................................................. 23
ARTICLE 5 INVESTMENTS ..................................................................... 24
Section 5.01
Investment of Moneys. .................................................................................. 24
Section 5.02
Method of Valuation and Frequency of Valuation. ...................................... 25
ARTICLE 6 DEFEASANCE AND DISCHARGE ......................................... 26
Section 6.01
Defeasance and Discharge. ........................................................................... 26
ARTICLE 7 EVENTS OF INDENTURE DEFAULT AND REMEDIES ......... 28
Section 7.01
Events of Indenture Default Defined. ........................................................... 28
Section 7.02
Remedies ....................................................................................................... 28
Section 7.03
Legal Proceedings by Trustee. ...................................................................... 28
Section 7.04
Discontinuance of Proceedings by Trustee. .................................................. 29
ii
Section 7.05
Owners of Certificates May Direct Proceedings. ......................................... 29
Section 7.06
Limitations on Actions by Owners of Certificates. ...................................... 29
Section 7.07
Trustee May Enforce Rights Without Possession of Certificates. ................ 29
Section 7.08
Remedies Not Exclusive. .............................................................................. 30
Section 7.09
Delays and Omissions Not to Impair Rights. ................................................ 30
Section 7.10
Application of Moneys in Event of Indenture Default. ................................ 30
ARTICLE 8 CONCERNING THE TRUSTEE ............................................. 31
Section 8.01
Duties of the Trustee. .................................................................................... 31
Section 8.02
Liability of Trustee; Trustee’s Use of Agents. .............................................. 31
Section 8.03
Representations and Covenants of Trustee. .................................................. 33
Section 8.04
Compensation. .............................................................................................. 34
Section 8.05
Notice of Default; Right to Investigate. ........................................................ 34
Section 8.06
Obligation to Act on Defaults. ...................................................................... 35
Section 8.07
Reliance on Requisition, etc. ........................................................................ 35
Section 8.08
Trustee May Own Certificates. ..................................................................... 35
Section 8.09
Construction of Ambiguous Provisions. ....................................................... 35
Section 8.10
Resignation of Trustee. ................................................................................. 35
Section 8.11
Removal of Trustee. ...................................................................................... 36
Section 8.12
Appointment of Successor Trustee. .............................................................. 36
Section 8.13
Qualification of Successor. ........................................................................... 36
Section 8.14
Instruments of Succession. ............................................................................ 36
Section 8.15
Merger of Trustee. ........................................................................................ 37
Section 8.16
Intervention by Trustee. ................................................................................ 37
Section 8.17
Books and Record of the Trustee; Trustee Record Keeping. ........................ 37
Section 8.18
Environmental Matters. ................................................................................. 37
ARTICLE 9 SUPPLEMENTAL INDENTURES AND AMENDMENTS OF
THE LEASE AND SITE LEASE ................................................................ 38
Section 9.01
Supplemental Indentures and Amendments Not Requiring Certificate
Owners’ Consent. .......................................................................................... 38
Section 9.02
Supplemental Indentures and Amendments Requiring Certificate Owners’
Consent. ........................................................................................................ 38
Section 9.03
Amendment of the Lease and the Site Lease. ............................................... 39
ARTICLE 10 MISCELLANEOUS .............................................................. 41
Section 10.01
Evidence of Signature of Owners and Ownership of Certificates. ............... 41
Section 10.02
Inspection of the Leased Property. ................................................................ 41
Section 10.03
Parties Interested Herein. .............................................................................. 41
Section 10.04
Titles, Headings, Etc. .................................................................................... 42
Section 10.05
Severability. .................................................................................................. 42
Section 10.06
Governing Law. ............................................................................................ 42
Section 10.07
Execution in Counterparts. ............................................................................ 42
Section 10.08
Notices. ......................................................................................................... 42
Section 10.09
Successors and Assigns. ................................................................................ 42
Section 10.10
Payments Due on Saturdays, Sundays and Holidays. ................................... 42
Section 10.11
Undertaking to Provide Ongoing Disclosure. ............................................... 42
Section 10.12
Electronic Storage. ........................................................................................ 43
iii
EXHIBIT A - FORM OF CERTIFICATE A-1
1
INDENTURE OF TRUST
THIS INDENTURE OF TRUST dated as of [__________], 2016 (this “Indenture”), is
executed and delivered by UMB BANK, N.A., a national banking association duly organized and
existing under the laws of the United States of America, as trustee (the “Trustee”) for the benefit
of the Owners of the Certificates as set forth in this Indenture.
PREFACE
All capitalized terms used herein will have the meanings ascribed to them in Article 1 of
this Indenture.
RECITALS
1. This Indenture is being executed and delivered to provide for the execution,
delivery and payment of and security for the Certificates, the proceeds of which will be used to
finance the Project. The Certificates evidence undivided interests in the right to receive
Revenues under the Lease.
2. Pursuant to the Lease, and subject to the rights of the Town to not appropriate the
Base Rentals and Additional Rentals thereunder and, therefore, to not renew and to terminate the
Lease and other limitations as therein provided, the Town is to pay certain Base Rentals directly
to the Trustee, for the benefit of the Owners of the Certificates, in consideration of the Town’s
right to possess and use the Leased Property.
3. The Trustee has entered into this Indenture for and on behalf of the Owners of the
Certificates and the Trustee will hold the Revenues and the Leased Property and will exercise the
Trustee’s rights under the Site Lease and the Lease for the equal and proportionate benefit of the
Owners of the Certificates as described herein, and will disburse money received by the Trustee
in accordance with this Indenture.
4. The proceeds from the sale of the Certificates to the Owners will be disbursed by
the Trustee to implement the Project as described herein and in the Lease and for other purposes
set forth herein.
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that the Trustee, in
consideration of the premises, the purchase of the Certificates by the Owners and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, in order
to secure the payment of the principal of, premium, if any, and interest on the Certificates and all
other amounts payable to the Owners with respect to the Certificates, to secure the performance
and observance of all the covenants and conditions set forth in the Certificates and the Indenture,
and to declare the terms and conditions upon and subject to which the Certificates are executed,
delivered and secured, has executed and delivered this Indenture and has granted, assigned,
pledged, bargained, sold, alienated, remised, released, conveyed, set over and confirmed, and by
these presents does grant, assign, pledge, bargain, sell, alienate, remise, release, convey, set over
2
and confirm, in trust upon the terms set forth herein all and singular the following described
property, franchises and income, including any title or interest therein acquired after these
presents, all and singular the following described property, franchises and income, including any
title therein acquired after these presents (collectively, the “Trust Estate”):
(a) all rights, title and interest of the Trustee in, to and under the Site Lease
and the Lease relating to the Leased Property, subject to Permitted Encumbrances (other
than the Trustee’s rights to payment of its fees and expenses under the Site Lease and the
Lease and the rights of third parties to Additional Rentals payable to them under the
Lease);
(b) all Revenues and any other receipts receivable by or on behalf of the
Trustee pursuant to the Lease, including without limitation, all Base Rentals,
Prepayments, the Purchase Option Price and Net Proceeds;
(c) all money and securities from time to time held by the Trustee under this
Indenture in the Base Rentals Fund, and the Costs of Execution and Delivery Fund (but
not the Rebate Fund, or any defeasance escrow fund or account), any and all other
property, revenues or funds from time to time hereafter by delivery or by writing of any
kind specially granted, assigned or pledged as and for additional security hereunder, by
any Person in favor of the Trustee, which shall accept any and all such property and hold
and apply the same subject to the terms hereof.
TO HAVE AND TO HOLD IN TRUST, NEVERTHELESS, the Trust Estate for the
equal and ratable benefit and security of all Owners of the Certificates, without preference,
priority or distinction as to lien or otherwise of any one Certificate over any other Certificate
upon the terms and subject to the conditions hereinafter set forth.
PROVIDED, HOWEVER, that if the principal of the Certificates, 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 the
terms and provisions hereof, then, upon such final payments, this Indenture and the rights hereby
granted shall cease, terminate and be void; otherwise this Indenture shall be and remain in full
force and effect.
THIS INDENTURE FURTHER WITNESSETH and it is expressly declared, that all
Certificates are to be executed and delivered and all said property, rights, interests, revenues and
receipts hereby pledged 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 Trustee has agreed and covenanted, and does hereby agree and covenant, for
the benefit of the Owners, as follows:
3
ARTICLE 1
DEFINITIONS
Section 1.01 Certain Funds and Accounts. All references herein to any Funds and
Accounts shall mean the Funds and Accounts so designated which are established pursuant to
Article 3 hereof.
Section 1.02 Definitions. All capitalized terms defined in Article 1 of the Lease shall
have the same meaning in this Indenture. In addition, the following capitalized terms shall have
the following meanings under this Indenture, provided, however, that in the event of any
inconsistency, any term defined below shall have the meaning ascribed to it in the Lease:
“Additional Certificates” means Additional Certificates which may be executed and
delivered pursuant to this Indenture.
“Additional Rentals” means the payment or cost of all:
(a) (i) reasonable expenses and fees of the Trustee related to the performance
or discharge of its responsibilities under the provisions of the Lease, the Site Lease or this
Indenture, including the reasonable fees and expenses of any person or firm employed by
the Town to make rebate calculations under the provisions of Section 3.05 of this
Indenture and the expenses of the Trustee in respect of any policy of insurance obtained
in respect of the Certificates executed and delivered with respect to the Lease, (ii) the cost
of insurance premiums and insurance deductible amounts under any insurance policy
reasonably deemed necessary by the Trustee to protect the Trustee from any liability
under the Lease, approved by the Town Representative, which approval shall not be
unreasonably withheld, (iii) reasonable legal fees and expenses incurred by the Trustee to
defend the Trust Estate or the Trustee from and against any legal claims, and (iv)
reasonable expenses and fees of the Trustee incurred at the request of the Town
Representative;
(b) taxes, assessments, insurance premiums, utility charges, maintenance,
upkeep, repair and replacement with respect to the Leased Property and as otherwise
required under the Lease;
(c) payments into the Rebate Fund for rebate payments as provided in the
Lease; and
(d) all other charges and costs (together with all interest and penalties that
may accrue thereon in the event that the Town shall fail to pay the same, as specifically
set forth in the Lease) which the Town agrees to assume or pay as Additional Rentals
under the Lease.
Additional Rentals shall not include Base Rentals.
“Approval of Special Counsel” means an opinion of Special Counsel to the effect that the
matter proposed will not adversely affect the excludability from gross income for federal income
tax purposes of the Interest Portion of the Base Rentals paid by the Town under the Lease.
4
“Authorized Denominations” means $5,000 or integral multiples of $5,000.
“Base Rentals” means the rental payments payable by the Town during the Lease Term,
which constitute payments payable by the Town for and in consideration of the right to possess
and use the Leased Property as set forth in Exhibit C (Base Rentals Schedule) of the Lease.
Base Rentals does not include Additional Rentals.
“Base Rentals Fund” means the fund created under Section 3.03 hereof.
“Beneficial Owners” means any person for which a DTC Participant acquires an interest
in Certificates.
“Business Day” means any day, other than a Saturday, Sunday or legal holiday or a day
(a) on which banks located in Denver, Colorado are required or authorized by law or executive
order to close or (b) on which the Federal Reserve System is closed.
“Cede & Co.” means DTC’s nominee or any new nominee of DTC.
“Certificate Purchase Agreement” means the Certificate Purchase Agreement between
the Underwriter and the Trustee relating to the Certificates.
“Certificates” means the “Certificates of Participation, Series 2016, Evidencing
Proportionate Interests in the Base Rentals and other Revenues under an annually renewable
Lease Purchase Agreement dated as of [__________], 2016, between UMB Bank, n.a., solely in
its capacity as trustee under the Indenture, as lessor, and the Town of Avon, Colorado, as lessee”
dated as of their date of delivery, executed and delivered pursuant to this Indenture.
“Charter” means the home rule charter of the Town, and any amendments or supplements
thereto.
“Closing” means the date of execution and delivery of the Certificates.
“Costs of Execution and Delivery” means all items of expense directly or indirectly
payable by the Trustee related to the authorization, execution and delivery of the Site Lease and
the Lease and related to the authorization, sale, execution and delivery of the Certificates and to
be paid from the Costs of Execution and Delivery Fund, including but not limited to, survey
costs, title insurance premiums, closing costs and other costs relating to the leasing of the Leased
Property under the Site Lease and the Lease, costs of preparation and reproduction of documents,
costs of printing the Certificates and the Preliminary and final Official Statements prepared in
connection with the offering of the Certificates, costs of Rating Agencies and costs to provide
information required by Rating Agencies for the rating or proposed rating of Certificates, initial
fees and charges of the Trustee and Paying Agent, legal fees and charges, including fees and
expenses of Bond Counsel, Special (Disclosure) Counsel, and Counsel to the Trustee, fees and
disbursements of professionals and the Underwriter, fees and charges for preparation, execution
and safekeeping of the Certificates, premiums for insurance on the Certificates, and any other
cost, charge or fee in connection with the original sale and the execution and delivery of the
Certificates; provided, however, that Additional Rentals shall not be Costs of Execution and
Delivery of the Certificates and are to be paid by the Town as provided in the Lease.
5
“Costs of Execution and Delivery Fund” means the fund created under Section 3.06
hereof.
“CRS” means Colorado Revised Statutes.
“Council” means the Town Council of the Town or any successor to its functions.
“Depository” means any securities depository as the Trustee may provide and appoint
pursuant to Section 2.03 hereof, in accordance with then current guidelines of the Securities and
Exchange Commission, which shall act as securities depository for the Certificates.
“DTC” means the Depository Trust Company, New York, New York, and its successors
and assigns.
“DTC Participant(s)” means any broker-dealer, bank or other financial institution from
time to time for which DTC holds Certificates as Depository.
“Event(s) of Indenture Default” means those defaults specified in Section 7.01 of this
Indenture.
“Extraordinary Mandatory Redemption” means any redemption made pursuant to Section
4.03 hereof.
“Federal Securities” means non-callable bills, certificates of indebtedness, notes or bonds
which are direct obligations of, or the principal of and interest on which are unconditionally
guaranteed by, the United States of America.
“Finance Director” means the Finance Director of the Town or his or her successor in
functions, if any.
“Fiscal Year” means the Town’s fiscal year, which begins on January 1 of each calendar
year and ends on December 31 of the same calendar year, or any other twelve month period
which the Town or other appropriate authority hereafter may establish as the Town’s fiscal year.
“Indenture” means this Indenture of Trust dated as of [__________], 2016, executed and
delivered by the Trustee as the same may be hereafter amended or supplemented.
“Interest Payment Date” means, in respect of the Certificates, June 1 and December 1,
commencing [________], 2016.
“Lease” means the Lease Purchase Agreement dated as of [__________], 2016, between
the Trustee, as lessor, and the Town, as lessee, as the same may be amended.
“Leased Property” means the Site and the premises, buildings and improvements situated
thereon, including all fixtures attached thereto, as more particularly described in Exhibit A to the
Lease, together with any and all additions and modifications thereto and replacements thereof,
including, without limitation, the easements, rights of way, covenants and other rights set forth in
the documents listed on Exhibit B attached thereto, and any New Facility.
6
“Mayor” means the Mayor of the Town, or his or her successor in duties.
“New Facility” means any real property, buildings or equipment leased by the Town to
the Trustee pursuant to a future amendment to the Site Lease and leased back by the Town from
the Trustee pursuant to a future amendment to the Lease in connection with the issuance of
Additional Certificates.
“Optional Redemption” means any redemption made pursuant to Section 4.01 hereof and
as provided in the form of the Certificate set forth in Exhibit A hereto.
“Optional Redemption Date” means the date of redemption of the Certificates upon
Prepayment of Base Rentals or the payment of the Purchase Option Price under the Lease.
“Outstanding” means, with respect to the Certificates, all Certificates executed and
delivered pursuant to this Indenture as of the time in question, except:
(a) All Certificates theretofore canceled or required to be canceled under Section 2.07
of this Indenture;
(b) Certificates in substitution for which other Certificates have been executed and
delivered under Section 2.05 or 2.06 of this Indenture;
(c) Certificates which have been redeemed as provided in Article 4 of this Indenture;
(d) Certificates for the payment or redemption of which provision has been made in
accordance with Article 6 of this Indenture; provided that, if such Certificates are being
redeemed, the required notice of redemption has been given or provision satisfactory to the
Trustee has been made therefor; and
(e) Certificates deemed to have been paid pursuant to Section 6.01 of this Indenture.
“Owners” means the registered owners of any Certificates and Beneficial Owners.
“Paying Agent” means the Trustee or any successor or additional paying agent appointed
pursuant to this Indenture.
“Permitted Investments” means those investments the Town is authorized to enter into
under the Charter and the laws of the State of Colorado.
“Prepayment” means any amount paid by the Town pursuant to the provisions of the
Lease as a prepayment of the Base Rentals due thereunder.
“Project” means, to the extent financed with the proceeds of the Certificates, the
acquisition of certain real property and any improvements located thereon for Town purposes.
“Rebate Fund” means the fund created under Section 3.05 hereof.
7
“Regular Record Date” means the close of business on the 15th day of the calendar month
immediately preceding the Interest Payment Date (or the Business Day immediately preceding
such 15th day, if such 15th day is not a Business Day).
“Revenues” means (a) all amounts payable by or on behalf of the Town or with respect to
the Leased Property pursuant to the Lease including, but not limited to, all Base Rentals,
Prepayments, the Purchase Option Price and Net Proceeds, but not including Additional Rentals;
(b) any portion of the proceeds of the Certificates deposited into the Base Rentals Fund created
under this Indenture; (c) any moneys which may be derived from any insurance in respect of the
Certificates; and (d) any moneys and securities, including investment income, held by the
Trustee in the Funds and Accounts established under this Indenture (except for moneys and
securities held in the Rebate Fund or any defeasance escrow account).
“Site” means the real property owned by the Town and leased by the Town to the Trustee
under the Site Lease and subleased by the Trustee to the Town under the Lease, the legal
description of which is set forth in Exhibit A to the Lease.
“Site Lease” means the Site Lease Agreement, dated as of [__________], 2016, between
the Town, as lessor, and the Trustee, as lessee, as the same may hereafter be amended.
“Special Counsel” means any counsel experienced in matters of municipal law and listed
in the list of municipal bond attorneys, as published semiannually by The Bond Buyer, or any
successor publication. So long as the Lease Term is in effect, the Town shall have the right to
select Special Counsel.
“Standard & Poor’s” means Standard & Poor’s Ratings Services, a division of The
McGraw Hill Companies, Inc.
“Supplemental Act” means the Supplemental Public Securities Act, constituting Title 11,
Article 57, Part 2, C.R.S.
“Tax Certificate” means the Tax Certificate entered into by the Town with respect to the
Lease.
“Tax Code” means the Internal Revenue Code of 1986, as amended, and all regulations
and rulings promulgated thereunder.
“Town” means the Town of Avon, Colorado.
“Town Manager” means the Town Manager of the Town or his or her successor in
function.
“Town Representative” means the Mayor, the Town Manager, the Finance Director or
such other person at the time designated to act on behalf of the Town for the purpose of
performing any act under the Lease, the Site Lease or this Indenture by a written certificate
furnished to the Trustee containing the specimen signature of such person or persons and signed
on behalf of the Town by the Mayor.
8
“Trust Estate” means all of the property placed in trust by the Trustee pursuant to the
Granting Clauses hereof.
“Trustee” means UMB Bank, n.a., solely in its capacity as Trustee under this Indenture
for the benefit of the Owners of the Certificates and any Additional Certificates, and its
successors and assigns.
“Underwriter” means Piper Jaffray & Co., Denver, Colorado.
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ARTICLE 2
THE CERTIFICATES
Section 2.01 Amount of the Certificates; Nature of the Certificates. Except as
provided in Section 2.08 hereof, the aggregate original principal amount of Certificates that may
be executed and delivered pursuant to this Indenture shall be $[______]. The Certificates shall
constitute proportionate interests in the Trustee’s right to receive the Base Rentals under the
Lease and other Revenues. The Certificates shall constitute a contract between the Trustee and
the Owners. In no event shall any decision by the Council not to appropriate any amounts
payable under the Lease be construed to constitute an action impairing such contract.
The Certificates shall not constitute a mandatory charge or requirement of the Town in
any ensuing Fiscal Year beyond the current Fiscal Year, and shall not constitute or give rise to a
general obligation or other indebtedness of the Town or a multiple fiscal year direct or indirect
debt or other financial obligation whatsoever of the Town, within the meaning of any
constitutional, home rule charter or statutory debt provision or limitation. No provision of the
Certificates shall be construed or interpreted as creating a delegation of governmental powers nor
as a donation by or a lending of the credit of the Town within the meaning of Sections 1 or 2 of
Article XI of the Colorado Constitution. The execution and delivery of the Certificates shall not
directly or indirectly obligate the Town to renew the Lease from Fiscal Year to Fiscal Year or to
make any payments beyond those appropriated for the Town’s then current Fiscal Year.
Section 2.02 Forms, Denominations, Maturities and Other Terms of Certificates.
The Certificates shall be in substantially the form attached hereto as Exhibit A and all provisions
and terms of the Certificates set forth therein are incorporated in this Indenture.
The Certificates shall be executed and delivered in fully registered form in Authorized
Denominations not exceeding the aggregate principal amount stated to mature on any given date.
The Certificates shall be numbered consecutively in such manner as the Trustee shall determine;
provided that while the Certificates are held by a Depository, one Certificate shall be executed
and delivered for each maturity bearing interest at the same interest rate of the Outstanding
Certificates.
The Certificates are executed and delivered under the authority of the Supplemental Act
and shall so recite. Pursuant to Section 11-57-210 of the Supplemental Act, such recital shall be
conclusive evidence of the validity and the regularity of the execution and delivery of the
Certificates after their delivery for value.
The Certificates shall be dated [__________], 2016.
The Certificates shall mature on the dates and in the amounts, with interest thereon at the
rates, set forth below:
10
Maturity Date
(December 1)
Principal
Amount
Interest
Rate
The Certificates shall bear interest from their date to maturity or prior redemption at the
rates per annum set forth above, payable on each Interest Payment Date and calculated on the
basis of a 360-day year of twelve 30-day months.
The payment of principal, premium, if any, and interest represented by the Certificates
shall be made in lawful money of the United States of America.
The Certificates shall be subject to redemption prior to maturity, all as provided in Article
4 hereof.
Except for any Certificates for which DTC is acting as Depository or for an Owner of
$1,000,000 or more in aggregate principal amount of Certificates, the principal of, premium, if
any, and interest on all Certificates shall be payable to the Owner thereof at its address last
appearing on the registration books maintained by the Trustee. In the case of any Certificates for
which DTC is acting as Depository, the principal of, premium, if any, and interest on such
Certificates shall be payable as directed in writing by the Depository. In the case of an Owner of
$1,000,000 or more in aggregate principal amount of Certificates, the principal of, premium, if
any, and interest on such Certificates shall be payable by wire transfer of funds to a bank account
designated by the Certificate Owner in written instructions to the Trustee.
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Interest shall be paid to the Owner of each Certificate, as shown on the registration books
kept by the Trustee, as of the close of business on the Regular Record Date, irrespective of any
transfer of ownership of Certificates subsequent to the Regular Record Date and prior to such
Interest Payment Date, or on a special record date, which shall be fixed by the Trustee for such
purpose, irrespective of any transfer of ownership of Certificates subsequent to such special
record date and prior to the date fixed by the Trustee for the payment of such interest. Notice of
the special record date and of the date fixed for the payment of such interest shall be given by
providing a copy thereof by electronic means or by first class mail postage prepaid at least ten
(10) days prior to the special record date, to the Owner of each Certificate upon which interest
will be paid, determined as of the close of business on the day preceding the giving of such
notice.
Section 2.03 Execution; Global Book-Entry System. Each Certificate shall be
executed with the manual signature of a duly authorized representative of the Trustee. It shall
not be necessary that the same authorized representative of the Trustee sign all of the Certificates
executed and delivered hereunder. In case any authorized representative of the Trustee whose
signature appears on the Certificates ceases to be such representative before delivery of the
Certificates, such signature shall nevertheless be valid and sufficient for all purposes, the same as
if such authorized representative had remained as such authorized representative until delivery.
No Certificate shall be valid or obligatory for any purpose or entitled to any security or
benefit hereunder unless and until executed in the manner prescribed by this Section, and such
execution of any Certificate shall be conclusive evidence that such Certificate has been properly
executed and delivered hereunder.
DTC may act as Depository for any Certificates. The Certificates for which DTC is
acting as Depository shall be initially executed and delivered as set forth herein with a separate
fully registered certificate (in printed or type-written form) for each of the maturities bearing
interest at the same interest rate of the Certificates. Upon initial execution and delivery, the
ownership of any Certificates for which DTC is acting as Depository shall be registered in the
registration books kept by the Trustee, in the name of Cede & Co., as the nominee of DTC or
such other nominee as DTC shall appoint in writing.
The Trustee is hereby authorized to take any and all actions as may be necessary and not
inconsistent with this Indenture in order to qualify any Certificates for the Depository’s book-
entry system, including the execution of the Depository’s form of Representation Letter.
With respect to any Certificates which shall or may be registered in the registration books
kept by the Trustee in the name of Cede & Co., as nominee of DTC, the Trustee shall not have
any responsibility or obligation to any DTC Participants or to any Beneficial Owners. Without
limiting the immediately preceding sentence, the Trustee shall not have any responsibility or
obligation with respect to (a) the accuracy of the records of DTC, Cede & Co. or any DTC
Participant with respect to any ownership interest in the Certificates, (b) the delivery to any DTC
Participant, any Beneficial Owner or any other person, other than DTC, of any notice with
respect to the Certificates, including any notice of redemption, or (c) the payment to any DTC
Participant, any Beneficial Owner or any other person, other than DTC, of any amount with
respect to the principal of and premium, if any, or interest on the Certificates; except that so long
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as any Certificate is registered in the name of Cede & Co., as nominee of DTC, any Beneficial
Owner of $1,000,000 or more in aggregate principal amount of Certificates who has filed a
written request to receive notices, containing such Beneficial Owner’s name and address, with
the Trustee shall be provided with all notices relating to such Certificates by the Trustee.
Except as set forth above, the Trustee may treat as and deem DTC to be the absolute
Owner of each Certificate for which DTC is acting as Depository for all purposes, including
payment of the principal of and premium and interest on such Certificate, giving notices of
redemption and registering transfers with respect to such Certificates. The Trustee shall pay all
principal of and interest on the Certificates only to or upon the order of the Owners as shown on
the registration books kept by the Trustee or their respective attorneys duly authorized in writing
and all such payments shall be valid and effective to fully satisfy and discharge the obligations
with respect to the principal of and interest on the Certificates to the extent of the sum or sums so
paid.
No person other than an Owner, as shown on the registration books kept by the Trustee,
shall receive a Certificate. Upon delivery by DTC to the Beneficial Owner and the Trustee, a
written notice to the effect that DTC has determined to substitute a new nominee in place of
Cede & Co., and subject to the transfer provisions in Section 2.06 hereof, references to “Cede &
Co.” in this Section shall refer to such new nominee of DTC.
DTC may determine to discontinue providing its services with respect to any Certificates
at any time after giving written notice to the Trustee and discharging its responsibilities with
respect thereto under applicable law. The Trustee, upon the written direction of the Town, may
terminate the services of DTC with respect to any Certificates if it determines that DTC is unable
to discharge its responsibilities with respect to such Certificates or that continuation of the
system of book-entry transfers through DTC is not in the best interests of the Beneficial Owners,
and the Trustee shall provide notice of such termination to the Trustee.
Upon the termination of the services of DTC as provided in the previous paragraph, and
if no substitute Depository willing to undertake the functions of DTC in respect of the
Certificates can be found which, in the opinion of the Town is willing and able to undertake such
functions upon reasonable or customary terms, or if the Town determines that it is in the best
interests of the Beneficial Owners of the Certificates that they be able to obtain certificated
Certificates, the Certificates shall no longer be restricted to being registered in the registration
books of the Trustee in the name of Cede & Co., as nominee of DTC, but may be registered in
whatever name or names the Owners shall designate at that time, in accordance with
Section 2.06. To the extent that the Beneficial Owners are designated as the transferee by the
Owners, in accordance with Section 2.06, the Certificates will be delivered to the Beneficial
Owners.
Section 2.04 Delivery of Certificates. Upon the execution and delivery of this
Indenture, the Trustee is authorized to execute and deliver the Certificates to DTC or the
purchaser thereof in the aggregate principal amounts, maturities and interest rates set forth in
Section 2.01 hereof, as provided in this Section:
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(a) Before or upon the delivery by the Trustee of any of the Certificates, there shall
be filed with the Trustee an originally executed counterpart of this Indenture, the Lease, the Site
Lease, and a title insurance commitment or commitments (with a title insurance policy to be
delivered in a timely fashion after the delivery of the Certificates) under which the Trustee’s
leasehold interests in the Leased Property are insured; and
(b) Thereupon, the Trustee shall execute and deliver the Certificates to DTC or the
purchasers thereof, upon payment to the Trustee of the purchase price set forth in the Certificate
Purchase Agreement. Portions of such amounts so received shall be deposited in the Accounts in
the Base Rentals Fund, and the Cost of Execution and Delivery Fund, all as provided in Article 3
hereof and in the Lease. Notwithstanding anything herein to the contrary, the Trustee is
authorized to execute and transfer or cause to be transferred to DTC in advance of the date of
execution and delivery of the Certificates, Certificates to effect the registration and delivery
thereof to the Owners pending and subject to the delivery of the opinion of Special Counsel
necessary to effect the delivery of the Certificates.
Section 2.05 Mutilated, Lost, Stolen or Destroyed Certificates. In the event the
Certificates are in the hands of DTC or Owners and one or more of the Certificates is mutilated,
lost, stolen or destroyed, a new Certificate may be executed by the Trustee, of like date, series,
maturity, interest rate and denomination as that mutilated, lost, stolen or destroyed; provided that
the Trustee shall have received indemnity from DTC or the Owner of the Certificate, as the case
may be, 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, instead of executing and delivering a duplicate Certificate, the Trustee may pay the
same without surrender thereof. The Trustee may charge DTC or the Owner of the Certificate,
as the case may be, with its reasonable fees and expenses in connection herewith.
Section 2.06 Registration of Certificates; Persons Treated as 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 any Certificate at the principal corporate trust office of the Trustee or at such other location as
it shall designate, the Trustee shall execute and deliver in the name of the transferee or
transferees a new Certificate or Certificates of the same series, of a like aggregate principal
amount and interest rate and of the same maturity.
Certificates may be exchanged at the principal corporate trust office of the Trustee or at
such other location as it shall designate for an equal aggregate principal amount of Certificates of
the same series, interest rate, and the same maturity of other Authorized Denominations. The
Trustee shall execute and deliver Certificates which the Owner making the exchange is entitled
to receive, bearing numbers not contemporaneously outstanding.
All Certificates presented for transfer or exchange shall be accompanied by a written
instrument or instruments of transfer or authorization for exchange, in form and with guaranty of
signature satisfactory to the Trustee, duly executed by the Owner or by his or her attorney duly
authorized in writing.
14
The Trustee shall not be required to transfer or exchange any Certificate during the period
of fifteen (15) days next preceding any Interest Payment Date nor to transfer or exchange any
Certificate after the mailing of notice calling such Certificate for redemption has been made as
herein provided, nor during the period of fifteen (15) days next preceding the mailing of such
notice of redemption.
New Certificates delivered upon any transfer or exchange shall evidence the same
obligations as the Certificates surrendered, shall be secured by this Indenture and entitled to all
of the security and benefits hereof to the same extent as the Certificates surrendered. The person
in whose name any Certificate shall be registered shall be deemed and regarded as the absolute
owner thereof for all purposes, and payment of or on account of either principal or interest on
any Certificate shall be made only to or upon the written order of the Owner thereof or his, her or
its legal representative, 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 Owner requesting exchange or transfer of
Certificates, of any reasonable transfer fees, tax, fee or other governmental charge required to be
paid with respect to such exchange or transfer.
Section 2.07 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 2.05 or 2.06 hereof, such Certificates
shall be promptly canceled and destroyed by the Trustee, such Certificates shall be promptly
canceled and destroyed by the Trustee in accordance with customary practices of the Trustee and
applicable record retention requirements.
Section 2.08 Additional Certificates. So long as no Event of Indenture Default, Event
of Nonappropriation or Event of Lease Default has occurred and is continuing and the Lease
Term is in effect, one or more series of Additional Certificates may be executed and delivered
upon the terms and conditions set forth herein. The principal of any Additional Certificates shall
mature on December 1 and the Interest Payment Dates therefor shall be the same as the Interest
Payment Dates for the Certificates; otherwise the times and amounts of payment of Additional
Certificates shall be as provided in the supplemental ordinance or indenture and amendment to
the Lease entered into in connection therewith.
Additional Certificates may be executed and delivered without the consent of or
notice to the Owners of Outstanding Certificates, to provide moneys to pay any one or more of
the following:
(a) the costs of acquiring, constructing, improving and installing any New Facility, or
of acquiring a Site for any New Facility (and costs reasonably related thereto);
(b) the costs of completing the Project or making, at any time or from time to time,
such substitutions, additions, modifications and improvements for or to the Leased Property as
the Town may deem necessary or desirable, and as in accordance with the provisions of the
Lease; or
15
(c) for the purpose of refunding or refinancing all or any portion of Outstanding
Certificates.
In such case, the Costs of Execution and Delivery of the Additional Certificates and other costs
reasonably related to the purposes for which Additional Certificates are being executed and
delivered may be included.
Additional Certificates may be executed and delivered only upon there being furnished to
the Trustee:
(a) Originally executed counterparts of a supplemental Indenture and related and
necessary amendments to the Site Lease and the Lease (including any necessary amendment to
the Base Rentals Schedule); and
(b) A commitment or other evidence that the amount of the title insurance policy
delivered in respect of the Certificates will be increased, if necessary, to reflect the amount of the
Additional Certificates and all other Outstanding Certificates (or such lesser amount as shall be
the maximum insurable value of the real property included in the Leased Property); and
(c) A written opinion of Special Counsel to the effect that:
(i) the execution and delivery of Additional Certificates have been duly
authorized and that all conditions precedent to the delivery thereof have been fulfilled;
(ii) the excludability of interest from gross income for federal income tax
purposes on Outstanding Certificates will not be adversely affected by the execution and delivery
of the Additional Certificates being executed and delivered; and
(iii) the sale, execution and delivery of the Additional Certificates, in and of
themselves, will not constitute an Event of Indenture Default or an Event of Lease Default nor
cause any violation of the covenants or representations herein or in the Lease; and
(d) Written directions from the underwriter or placement agent with respect of the
Additional Certificates, together with written acknowledgment of the Town, to the Trustee to
deliver the Additional Certificates to the purchaser or purchasers therein identified upon payment
to the Trustee of a specified purchase price.
(e) Written confirmation that the rating on the Certificates will not be lowered or
withdrawn as a result of the issuance of the Additional Certificates.
Each Additional Certificate executed and delivered pursuant to this Section shall
evidence a proportionate interest in the rights to receive the Revenues under this Indenture and
shall be ratably secured with all Outstanding Certificates and in respect of all Revenues, and
shall be ranked pari passu with such Outstanding Certificates and with Additional Certificates
that may be executed and delivered in the future, if any.
Section 2.09 Uniform Commercial Code. Subject to the registration
provisions hereof, the Certificates shall be fully negotiable and shall have all the qualities of
16
negotiable paper, and the owner or owners thereof shall possess all rights enjoyed by the holders
or owners of investment securities under the provisions of the Uniform Commercial Code-
Investment Securities. The principal of and interest on the Certificates shall be paid, and the
Certificates shall be transferable, free from and without regard to any equities, set-offs or cross-
claims between or among the Town, the Trustee and the original or any intermediate owner of
any Certificates.
17
ARTICLE 3
REVENUES AND FUNDS
Section 3.01 Segregation and Disposition of Proceeds of Certificates. The proceeds
of the Certificates (net of Underwriter’s discount and any original issue discount or plus any
original issue premium) shall be accounted for as follows:
(i) $[_______] shall be deposited with the Town and used to finance the
Project in accordance with this Indenture and the Tax Certificate.
(ii) $[______] shall be deposited in the Costs of Execution and Delivery Fund
and applied to the Costs of Execution and Delivery of the Lease, the Site Lease and the
Certificates.
Section 3.02 Application of Revenues and Other Moneys.
(a) All Base Rentals payable under the Lease and other Revenues shall be paid
directly to the Trustee. If the Trustee receives any other payments on account of the Lease, the
Trustee shall immediately deposit the same as provided below.
(b) Except for Net Proceeds to be applied pursuant to Section 9.02 of the Lease, the
Trustee shall deposit all Revenues and any other payments received in respect of the Lease,
immediately upon receipt thereof, to the Base Rentals Fund in an amount required to cause the
aggregate amount on deposit therein to equal the amount then required to make the principal and
interest payments due on the Certificates on the next Interest Payment Date. In the event that the
Trustee receives Prepayments under the Lease, the Trustee shall apply such Prepayments to the
Optional Redemption of the Certificates or portions thereof in accordance with Section 4.01
hereof.
Section 3.03 Base Rentals Fund. A special fund is hereby created and established
with the Trustee denominated the “Town of Avon, Colorado, 2016 Lease Purchase Agreement,
Base Rentals Fund” which shall be used for the deposit of all Revenues, upon receipt thereof by
the Trustee, except for Net Proceeds to be applied pursuant to Section 9.02 of the Lease.
Moneys in the Base Rentals Fund shall be used solely for the payment of the principal of and
interest on the Certificates whether on an Interest Payment Date, at maturity or upon prior
redemption, except as provided in Section 3.05 hereof.
The Base Rentals Fund shall be in the custody of the Trustee. The Trustee shall
withdraw sufficient funds from the Base Rentals Fund to pay the principal of and interest on the
Certificates as the same become due and payable whether on an Interest Payment Date, at
maturity or upon prior redemption, which responsibility, to the extent of the moneys therein, the
Trustee hereby accepts.
Any moneys held in the Base Rentals Fund shall be invested by the Trustee in accordance
with Article 5 hereof.
Section 3.04 Reserved.
18
Section 3.05 Rebate Fund. A special fund is hereby created and established to
be held by the Trustee, and to be designated the “Town of Avon, Colorado, 2016 Lease Purchase
Agreement, Rebate Fund” (the “Rebate Fund”). To the extent necessary to comply with the
provisions of the Tax Certificate, there shall be deposited into the Rebate Fund investment
income on moneys in any fund created hereunder (except defeasance escrows). In addition to the
deposit of investment income as provided herein, there shall be deposited into the Rebate Fund
moneys received from the Town as Additional Rentals for rebate payments pursuant to the
Lease; moneys transferred to the Rebate Fund from any other fund created hereunder pursuant to
the provisions of this Section 3.05; and all other moneys received by the Trustee when
accompanied by directions not inconsistent with the Lease or this Indenture that such moneys are
to be paid into an account of the Rebate Fund. The Town will cause (or direct the Trustee to
cause) amounts on deposit in the Rebate Fund to be forwarded to the United States Treasury at
the address and times provided in the Tax Certificate, and in the amounts calculated to ensure
that the Town’s rebate obligations are met, in accordance with the Town’s tax covenants in
Section 10.5 of the Lease. Amounts on deposit in the Rebate Fund shall not be subject to the lien
of this Indenture to the extent that such amounts are required to be paid to the United States
Treasury.
If, at any time after the Trustee receives instructions by the Town to make any
payments from the Rebate Fund, the Trustee determines that the moneys on deposit in an account
of the Rebate Fund are insufficient for the purposes thereof, and if the Trustee does not receive
Additional Rentals or cannot transfer investment income so as to make the amount on deposit in
the appropriate account in the Rebate Fund sufficient for its purpose, the Trustee may transfer
moneys to an account in the Rebate Fund from the Base Rentals Fund. Any moneys so advanced
from the Base Rentals Fund shall be included as an Additional Rental for the current Fiscal Year
pursuant to the Lease, and shall be repaid to the fund from which advanced upon payment to the
Trustee of such Additional Rentals. Upon receipt by the Trustee of an opinion of Special
Counsel to the effect that the amount in an account of the Rebate Fund is in excess of the amount
required to be therein pursuant to the provisions of the Tax Certificate, such excess shall be
transferred to the Base Rentals Fund.
The Trustee shall not be responsible for calculating rebate amounts or for the
adequacy or correctness of any rebate report. The Town may, at its own expense, retain an
independent firm of professionals in such area to calculate such rebate amounts.
Notwithstanding the foregoing, in the event that the Lease has been terminated or
the Town has failed to comply with Section 10.5 thereof so as to make the amount on deposit in
the appropriate account in Rebate Fund sufficient for its purpose, the Trustee shall make
transfers of investment income or of moneys from the Base Rentals Fund in such combination as
the Trustee shall determine to be in the best interests of the Certificate Owners.
Section 3.06 Costs of Execution and Delivery Fund. A special fund is hereby created
and established with the Trustee and denominated the “Costs of Execution and Delivery Fund.”
Upon the delivery of the Certificates there shall be deposited into the Costs of Execution and
Delivery Fund from the proceeds of the Certificates the amounts directed by Section 3.01(c)
hereof. Payments from the Costs of Execution and Delivery Fund shall be made by the Trustee
upon receipt of a statement or a bill for the provision of Costs of Execution and Delivery of the
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Certificates approved in writing by the Town Representative and (a) stating the payee, the
amount to be paid and the purpose of the payment and (b) certifying that the amount to be paid is
due and payable, has not been the subject of any previous requisition and is a proper charge
against the Costs of Execution and Delivery Fund. The Trustee may conclusively rely on
requisitions submitted in accordance with this Section 3.06 as complete authorization for the
disbursements made pursuant thereto and shall not be responsible for any representations or
certifications made therein.
Any moneys held in the Costs of Execution and Delivery Fund shall be invested by the
Trustee in accordance with Article 5 hereof.
The Trustee shall transfer all moneys remaining in the Costs of Execution and Delivery
Fund to the Town upon the final payment of all Costs of Execution and Delivery, as certified in
writing by the Town Representative. Any such remaining amounts so transferred to the Town
shall be deposited by the Town in the Base Rentals Fund or applied by the Town to pay costs of
the Project.
Section 3.07 Reserved.
Section 3.08 Moneys to be Held in Trust. The ownership of the Base Rentals Fund,
the Costs of Execution and Delivery Fund, and all accounts within such Funds and any other
fund or account created hereunder (except defeasance escrow account) shall be held in trust by
the Trustee for the benefit of the Owners of the Certificates; provided that moneys in the Rebate
Fund shall be used only for the specific purpose provided in Section 3.05 hereof.
Section 3.09 Nonpresentment of Certificates. Any moneys deposited with the
Trustee pursuant to the terms of this Indenture to be used for the payment of principal of,
premium, if any, or interest on any of the Certificates and remaining unclaimed by the Owners of
such Certificates for a period of three (3) years after the final due date of any Certificate, whether
the final date of maturity or the final redemption date, shall, if the Town shall not at the time, to
the knowledge of the Trustee, be in default with respect to any of the terms and conditions
contained in this Indenture, in the Certificates or under the Lease, be paid to the Town and such
Owners shall thereafter look only to the Town for payment and then only (a) to the extent of the
amounts so received by the Town from the Trustee without interest thereon, (b) subject to the
defense of any applicable statute of limitations and (c) subject to the Town’s Appropriation of
such payment. After payment by the Trustee of all of the foregoing, if any moneys are then
remaining under this Indenture, the Trustee shall pay such moneys to the Town as an
overpayment of Base Rentals.
Section 3.10 Repayment to the Town from the Trustee. After payment in full of the
Certificates, the interest thereon, any premium thereon, the fees, charges and expenses of the
Trustee, any amount required to be deposited to the Rebate Fund, and all other amounts required
to be paid hereunder, any amounts remaining in the Base Rentals Fund, the Costs of Execution
and Delivery Fund, or otherwise held by the Trustee pursuant hereto (but excluding the Rebate
Fund and any defeasance escrow accounts) shall be paid to the Town upon the expiration or
sooner termination of the Lease Term as a return of an overpayment of Base Rentals. After
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payment of all amounts due and owing the federal government held in the Rebate Fund, if any,
any excess amounts in the Rebate Fund shall be paid to the Town.
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ARTICLE 4
REDEMPTION OF CERTIFICATES
Section 4.01 Optional Redemption. The Certificates maturing on or prior to
December 1, 20[__] shall not be subject to optional redemption prior to their respective maturity
dates. The Certificates maturing on and after December 1, 20[__] shall be subject to redemption
prior to their respective maturity dates at the option of the Town, in whole or in part, in integral
multiples of $5,000, and if in part in such order of maturities as the Town shall determine and by
lot within a maturity, on December 1, 20[__], and on any date thereafter, at a redemption price
equal to the principal amount of the Certificates so redeemed plus accrued interest to the
redemption date without a premium.
In the case of a Prepayment in part of Base Rentals under the Lease, the Trustee shall
confirm that the revised Base Rentals Schedule to be provided by the Town Representative
pursuant to Section 6.2(b) of the Lease sets forth Principal Portions and Interest Portions of Base
Rentals that are equal to the principal and interest due on the Certificates that remain
Outstanding after such Optional Redemption. For such confirmation, the Trustee may rely on a
certification of the Town Representative or other person as provided in Section 8.07 hereof.
Section 4.02 Mandatory Sinking Fund Redemption. (a) The Certificates are subject
to mandatory sinking fund redemption at a price equal to the principal amount thereof plus
accrued interest to the redemption date.
As and for the sinking fund for the Certificates maturing on December 1, 20__
(the “Term Certificates”), the Town shall deposit in the Base Rentals Fund on or before
December 1, 20__ and on each December 1 thereafter through and including December 1, 20__,
a sum which together with other moneys available in the Base Rentals Fund is sufficient to
redeem (after credit as hereinafter provided), on the following dates, the following principal
amounts of the Term Certificates maturing December 1, 20__:
December 1 of
the
Year
Principal
Amount
The remaining $[_______] of the Term Certificates maturing December 1, 20[__] shall be paid
upon presentation and surrender at maturity unless redeemed prior to maturity.
(b) On or before the 30th day prior to each such sinking fund payment date, the
Trustee shall proceed to call the Term Certificates indicated above (or any Term Certificate or
Certificates issued to replace such Term Certificates) for redemption from the sinking fund on
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the next December 1, and give notice of such call without other instruction or notice from the
Town. The amount of each sinking fund installment may be reduced by the principal amount of
any Term Certificates of the maturity and interest rate which are subject to sinking fund
redemption on such date and which prior to such date have been redeemed (otherwise than
through the operation of the sinking fund) or otherwise canceled and not theretofore applied as a
credit against a sinking fund installment. Such reductions, if any, shall be applied in such year or
years as may be determined by the Town.
Section 4.03 Extraordinary Mandatory Redemption. If the Lease is terminated by
reason of the occurrence of:
(a) an Event of Nonappropriation, or
(b) an Event of Lease Default, or
(c) in the event that (1) the Leased Property is damaged or destroyed in whole or in part
by fire or other casualty, or (2) title to, or the temporary or permanent use of, the Leased
Property has been taken by eminent domain by any governmental body or (3) breach of warranty
or any material defect with respect to the Leased Property becomes apparent or (4) title to or the
use of all or any part of the Leased Property is lost by reason of a defect in title thereto, and the
Net Proceeds of any insurance, performance bond or condemnation award, or Net Proceeds
received as a consequence of defaults under contracts relating to the Leased Property, made
available by reason of such occurrences, shall be insufficient to pay in full, the cost of repairing
or replacing the Leased Property, and the Town does not appropriate sufficient funds for such
purpose or cause the Lease to be amended in order that Additional Certificates may be executed
and delivered pursuant to this Indenture for such purpose, then the Certificates shall be required
to be called for redemption. If called for redemption, as described herein, the Certificates are to
be redeemed in whole on such date or dates as the Trustee may determine, for a redemption price
equal to the principal amount thereof, plus accrued interest to the redemption date (subject to the
availability of funds described below).
If the Net Proceeds, including the Net Proceeds from the exercise of any Lease Remedy
under the Lease, otherwise received and other moneys then available under this Indenture are
insufficient to pay in full the principal of and accrued interest on all Outstanding Certificates, the
Trustee may, or at the request of the Owners of a majority in aggregate principal amount of the
Certificates Outstanding, and upon indemnification as provided in Section 8.01(d) of this
Indenture, without any further demand or notice, shall, exercise all or any combination of Lease
Remedies as provided in the Lease and the Certificates shall be redeemed by the Trustee from
the Net Proceeds resulting from the exercise of such Lease Remedies and all other moneys, if
any, then on hand and being held by the Trustee for the Owners of the Certificates.
If the Net Proceeds resulting from the exercise of such Lease Remedies and other moneys
are insufficient to redeem the Certificates at 100% of the principal amount thereof plus interest
accrued to the redemption date, then such Net Proceeds resulting from the exercise of such Lease
Remedies and other moneys shall be allocated proportionately among the Certificates, according
to the principal amount thereof Outstanding. In the event that such Net Proceeds resulting from
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the exercise of such Lease Remedies and other moneys are in excess of the amount required to
redeem the Certificates at 100% of the principal amount thereof plus interest accrued to the
redemption date, then such excess moneys shall be paid to the Town as an overpayment of the
Purchase Option Price. Prior to any distribution of the Net Proceeds resulting from the exercise
of any of such remedies, the Trustee shall be entitled to payment of its reasonable and customary
fees for all services rendered in connection with such disposition, as well as reimbursement for
all reasonable costs and expenses, including attorneys’ fees, incurred thereby, from proceeds
resulting from the exercise of such Lease Remedies and other moneys.
IF THE CERTIFICATES ARE REDEEMED PURSUANT TO THIS SECTION 4.03
FOR AN AMOUNT LESS THAN THE AGGREGATE PRINCIPAL AMOUNT THEREOF
PLUS INTEREST ACCRUED TO THE REDEMPTION DATE, SUCH PARTIAL PAYMENT
SHALL BE DEEMED TO CONSTITUTE A REDEMPTION IN FULL OF THE RELATED
CERTIFICATES, AND UPON SUCH A PARTIAL PAYMENT NO OWNER OF SUCH
CERTIFICATES SHALL HAVE ANY FURTHER CLAIM FOR PAYMENT AGAINST THE
TRUSTEE OR THE TOWN.
Section 4.04 Partial Redemption. The Certificates shall be redeemed only in integral
multiples of $5,000. The Trustee shall treat any Certificate of denomination greater than $5,000
as representing that number of separate Certificates each of the denomination of $5,000 as can be
obtained by dividing the actual principal amount of such Certificate by $5,000.
Upon surrender of any Certificate for redemption in part, the Trustee shall execute and
deliver to the Owner thereof, at no expense of the Owner, a new Certificate or Certificates of
Authorized Denominations in an aggregate principal amount equal to the unredeemed portion of
the Certificates so surrendered.
Section 4.05 Notice of Redemption. Whenever Certificates are to be redeemed under
any provision of this Indenture, the Trustee shall, not less than thirty (30) and not more than sixty
(60) days prior to the redemption date (except for Extraordinary Mandatory Redemption under
Section 4.03, which notice shall be immediate), mail notice of redemption to all Owners of all
Certificates to be redeemed at their registered addresses, by first class mail, postage prepaid, or
in the event that the Certificates to be redeemed are registered in the name of the Depository,
such notice may, in the alternative, be given by electronic means in accordance with the
requirements of the Depository. In addition, the Trustee shall at all reasonable times make
available to the Town and any Certificate Owner, including the Depository, if applicable,
information as to Certificates which have been redeemed or called for redemption. Any notice of
redemption shall:
(1) identify the Certificates to be redeemed;
(2) specify the redemption date and the redemption price;
(3) in the event the redemption is occurring under Section 4.01 hereof,
state that the Town has given notice of its intent to exercise its option to purchase
or prepay Base Rentals under the Lease;
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(4) state that such redemption is subject to the deposit of the funds
related to such option by the Town on or before the stated redemption date; and
(5) state that on the redemption date the Certificates called for
redemption will be payable at the principal corporate trust office of the Trustee
and that from that date interest will cease to accrue.
The Trustee may use “CUSIP” numbers in notices of redemption as a convenience to
Certificate Owners, provided that any such notice shall state that no representation is made as to
the correctness of such numbers either as printed on the Certificates or as contained in any notice
of redemption and that reliance may be placed only on the identification numbers containing the
prefix established pursuant to this Indenture.
Any notice of redemption may contain a statement that the redemption is conditioned
upon the receipt by the Trustee of funds on or before the date fixed for redemption sufficient to
pay the redemption price of the Certificates so called for redemption, and that if such funds are
not available, such redemption shall be canceled by written notice to the owners of the
Certificates called for redemption in the same manner as the original redemption notice was
given.
Section 4.06 Redemption Payments. On or prior to the date fixed for
redemption, funds shall be deposited with the Trustee to pay the Certificates called for
redemption, 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 certain cases as set forth 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. Payments in full redemption shall be accompanied by
a written designation prepared by the Trustee stating the portions of the payment representing
principal, interest, and premium, if any.
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ARTICLE 5
INVESTMENTS
Section 5.01 Investment of Moneys. The Trustee shall be entitled to assume
that any investment, which at the time of purchase is a Permitted Investment, remains a
Permitted Investment absent a receipt of written notice or information to the contrary. All
moneys held as part of the Base Rentals Fund, the Rebate Fund, the Costs of Execution and
Delivery Fund, or any other fund or account created hereunder (other than any defeasance
escrow accounts) shall be deposited or invested and reinvested by the Trustee, at the written
direction of the Town, in Permitted Investments; provided, however, that the Trustee shall make
no deposits or investments of any fund or account created hereunder which shall interfere with or
prevent withdrawals for the purpose for which the moneys so deposited or invested were placed
in trust hereunder or for payment of the Certificates at or before maturity or interest thereon as
required hereunder. 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. Except as otherwise provided in Sections 3.04 and 3.05
hereof, 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. Any interest or other gain from any fund or account created hereunder
(except defeasance escrows) shall be deposited to the Rebate Fund to the extent required and
permitted pursuant to Section 3.05 hereof. The Trustee shall sell and reduce to cash a sufficient
amount of such deposits or investments whenever the cash balance in the Base Rentals Fund is
insufficient to pay the principal of and interest on the Certificates when due, or whenever the
cash balance in any fund or account created hereunder is insufficient to satisfy the purposes of
such fund or account.
The Trustee hereby agrees to secure and retain the documentation with respect to
investments of moneys in the funds and accounts created under this Indenture as required by and
as described in the Tax Certificate.
The Trustee may rely upon the Town’s written direction as to both the suitability and the
legality of the directed investments, and shall have no liability or responsibility for any loss or
for failure to maximize earnings resulting from any investment made in accordance with the
provisions of this Article V.
The Trustee may transfer investments from any Fund or Account to any other Fund or
Account in lieu of cash when a transfer is required or permitted by the provisions of this
Indenture.
If the Trustee is not provided written directions concerning investment of moneys held in
the Funds, the Trustee may invest in a money market fund available to the Trustee, provided
such investment matures or are subject to redemption prior to the date such funds will be needed.
Unless otherwise confirmed or directed in writing, an account statement delivered periodically
by the Trustee to the Town shall confirm that the investment transactions identified therein
accurately reflect the investment directions of the Town, unless the Town notifies the Trustee in
writing to the contrary within thirty (30) days of the date of delivery of such statement.
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The Trustee may make any and all such investments through its trust department, and it is
specifically provided herein that the Trustee may purchase or invest in shares of any investment
company provided that such investments are Permitted Investments at the time of such
investment and that such investments: (i) is registered under the Investment Company Act of
1940, as amended (including both corporations and Massachusetts business trusts, and including
companies for which the Trustee may provide advisory, administrative, custodial or other
services for compensation); (ii) invests substantially all of its assets in short term high quality
money market instruments, limited to obligations issued or guaranteed by the United States, or
repurchase agreements backed by such obligations; and (iii) maintains a constant asset value per
share.
The Trustee is specifically authorized to implement its automated cash investments system to
assure that cash on hand is invested and to charge reasonable cash management fees, which may
be deducted from income earned on investments.
Section 5.02 Method of Valuation and Frequency of Valuation. In
computing the amount in any fund or account (except defeasance escrows), Permitted
Investments shall be valued at the market price, exclusive of accrued interest. With respect to all
funds and accounts (except defeasance escrows, and except as otherwise provided in the Tax
Certificate with respect to the Rebate Fund), valuation shall occur as of December 31 of each
year.
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ARTICLE 6
DEFEASANCE AND DISCHARGE
Section 6.01 Defeasance and Discharge.
(a) When the principal or redemption price (as the case may be) of, and interest on,
all the Certificates executed and delivered hereunder have been paid or provision has been made
for payment of the same (or, in the case of redemption of the Certificates pursuant to Section
4.03 of this Indenture, if full or partial payment of the Certificates and interest thereon is made as
provided in Section 4.03 of this Indenture), together with all other sums payable hereunder
relating to the Certificates (including the fees and expenses of the Trustee), then the right, title
and interest of the Trustee in and to the Trust Estate and all covenants, agreements and other
obligations of the Town to the Trustee and to the Owners shall thereupon cease, terminate and
become void and be discharged and satisfied. In such event, the Trustee shall (1) release the Site
Lease and transfer and convey the Trustee’s leasehold interest in the Leased Property to the
Town as provided by Article 11 of the Lease, (2) release the Lease and this Indenture, (3)
execute such documents to evidence such releases as may be reasonably required by the Town,
and (4) turn over to the Town all balances then held by the Trustee in the Funds or Accounts
hereunder except for amounts held in any defeasance escrow accounts. If payment or provision
therefor is made with respect to less than all of the Certificates, the particular Certificates (or
portion thereof) for which provision for payment shall have been considered made shall be
selected by the Town.
(b) Provision for the payment of all or a portion of the Certificates shall be deemed to
have been made when the Trustee holds in the Base Rentals Fund, or there is on deposit in a
separate escrow account or trust account held by a trust bank or escrow agent, either moneys in
an amount which shall be sufficient, and/or Federal Securities, 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, concurrently deposited in trust, 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. Prior to any discharge
of this Indenture pursuant to this Section or the defeasance of any Certificates pursuant to this
Section becoming effective, there shall have been delivered to the Trustee a report of an
independent firm of nationally recognized certified public accountants verifying the sufficiency
of the escrow established to pay the applicable Certificates in full on the maturity or redemption
date thereof unless fully funded with cash.
(c) Neither the Federal Securities nor the moneys deposited in the Base Rentals Fund
or separate escrow account or trust account pursuant to this Section shall be withdrawn or used
for any purpose other than, and shall be segregated and held in trust for, the payment of the
principal of, premium, if any, and interest on the Certificates or portions thereof; provided,
however, that other Federal Securities and moneys may be substituted for the Federal Securities
and moneys so deposited prior to their use for such purpose.
(d) Whenever moneys or Federal Securities shall be deposited with the Trustee or a
separate escrow agent for the payment or redemption of any Certificates more than forty-five
(45) days prior to the date that such Certificates are to mature or be redeemed, the Trustee shall
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mail a notice stating that such moneys or Federal Securities have been deposited and identifying
the Certificates for the payment of which such moneys or Federal Securities are being held, to all
Owners of Certificates for the payment of which such moneys or Federal Securities are being
held, or if such Certificates are registered in the name of the Depository, such notice may be sent,
in the alternative, by electronic means in accordance with the regulations of the Depository.
(e) At such time as any Certificate shall be deemed paid as provided in (b) above,
such Certificate shall no longer be secured by or entitled to the benefits of this Indenture, the
Lease or the Site Lease, except for the purpose of exchange and transfer and any payment from
such cash or Federal Securities deposited with the Trustee.
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ARTICLE 7
EVENTS OF INDENTURE DEFAULT AND REMEDIES
Section 7.01 Events of Indenture Default Defined. Each of the following shall be an
Event of Indenture Default:
(a) failure to pay the principal of or premium, if any, on any Certificate when the
same shall become due and payable, whether at the stated maturity thereof or upon proceedings
for redemption;
(b) failure to pay any installment of interest on any Certificate when the same shall
become due and payable;
(c) the occurrence of an Event of Nonappropriation; or
(d) the occurrence of an Event of Lease Default.
Upon the occurrence of any Event of Indenture Default of which the Trustee is required
to take notice or receive notice pursuant to Section 8.05, the Trustee shall give notice thereof to
the Owners of the Certificates. The Trustee shall waive any Event of Nonappropriation which is
cured by the Town within thirty (30) days of the receipt of notice by the Trustee as provided by
Section 6.4(b) of the Lease, by a duly effected Appropriation to pay all Base Rentals and
sufficient amounts to pay reasonably estimated Additional Rentals coming due for such Renewal
Term. The Trustee may waive any Event of Nonappropriation which is cured by the Town
within a reasonable time with the procedure described in the preceding sentence.
Section 7.02 Remedies If any Event of Indenture Default occurs and is continuing, the
Trustee may, or shall at the request of the Owners of a majority in aggregate principal amount of
the Certificates then Outstanding and upon indemnification as provided in Section 8.01(d)
hereof, without any further demand or notice, enforce for the benefit of the Owners of the
Certificates each and every right of the Trustee as the lessee under the Site Lease and the lessor
under the Lease. In exercising such rights of the Trustee and the rights given the Trustee under
this Article 7 and Article 8, the Trustee may, or shall at the request of the Owners of a majority
in aggregate principal amount of the Certificates then Outstanding and upon indemnification as
provided in Section 8.01(d) hereof, take such action as, in the judgment of the Trustee, upon
advice of its counsel, would best serve the interests of the Owners of the Certificates, including
calling the Certificates for redemption prior to their maturity in the manner and subject to the
provisions of Article 4 hereof and exercising the Lease Remedies provided in the Lease,
provided however that such action shall not include consequential or punitive damages against
the Town.
Section 7.03 Legal Proceedings by Trustee. If any Event of Indenture Default has
occurred and is continuing, the Trustee in its discretion may, and upon the written request of the
Owners of a majority in aggregate principal amount of all Outstanding Certificates and receipt of
indemnity to its satisfaction, shall, in its capacity as Trustee hereunder:
(a) By mandamus, or other suit, action or proceeding at law or in equity, enforce all
rights of the Owners of the Certificates, including enforcing any rights of the Trustee in respect
30
of the Trustee’s leasehold interests in the Leased Property including its rights as lessor under the
Lease and as lessee under the Site Lease and its rights under this Indenture and to enforce the
provisions of this Indenture and any collateral rights hereunder for the benefit of the Owners of
the Certificates; or
(b) By action or suit in equity enjoin any acts or things which may be unlawful or in
violation of the rights of the Owners of the Certificates; or
(c) Take any other action at law or in equity that may appear necessary or desirable to
enforce the rights of the Owners of the Certificates.
Section 7.04 Discontinuance of Proceedings by Trustee. If any proceeding
commenced by the Trustee on account of any Event of Indenture Default is discontinued or is
determined adversely to the Trustee, then the Owners of the Certificates shall be restored to their
former positions and rights hereunder as though no such proceeding had been commenced.
Section 7.05 Owners of Certificates May Direct Proceedings. The Owners of a
majority in aggregate principal amount of Outstanding Certificates shall have the right, after
furnishing indemnity satisfactory to the Trustee, to direct the method and place of conducting all
remedial proceedings by the Trustee hereunder, provided that such direction shall not be in
conflict with any rule of law or with this Indenture or unduly prejudice the rights of minority
Owners of the Certificates.
Section 7.06 Limitations on Actions by Owners of Certificates. No Owner of the
Certificates shall have any right to pursue any remedy hereunder unless:
(a) the Trustee shall have been given written notice of a default pursuant to Section
8.05, and such default becomes an Event of Indenture Default;
(b) the Owners of at least a majority in aggregate principal amount of all Outstanding
Certificates shall have requested the Trustee, in writing, to exercise the powers hereinabove
granted to or pursue such remedy in its or their name or names;
(c) the Trustee shall have been offered indemnity satisfactory to it as provided in
Section 8.01(d) hereof; and
(d) the Trustee shall have failed to comply with such request within a reasonable
time.
Notwithstanding the foregoing provisions of this Section or any other provision of this
Indenture, the obligation of the Trustee shall be absolute and unconditional to pay hereunder, but
solely from the Revenues pledged under this Indenture, the principal of, premium, if any, and
interest on the Certificates to the respective Owners thereof on the respective due dates thereof,
and nothing herein shall affect or impair the right of action, which is absolute and unconditional,
of such Owners to enforce such payment.
Section 7.07 Trustee May Enforce Rights Without Possession of Certificates. All
rights under this Indenture and the Certificates may be enforced by the Trustee without the
31
possession of any Certificates or the production thereof at the trial or other proceedings relative
thereto, and any proceeding instituted by the Trustee shall be brought in its name for the ratable
benefit of the Owners of the Certificates.
Section 7.08 Remedies Not Exclusive. Subject to any express limitations contained
herein, no remedy herein conferred is intended to be exclusive of any other remedy or remedies,
and each remedy is in addition to every other remedy given hereunder or now or hereafter
existing at law or in equity or by statute.
Section 7.09 Delays and Omissions Not to Impair Rights. No delays or omissions in
respect of exercising any right or power accruing upon any default shall impair such right or
power or be a waiver of such default, and every remedy given by this Article 7 may be exercised
from time to time and as often as may be deemed expedient.
Section 7.10 Application of Moneys in Event of Indenture Default. Any moneys
received, collected or held by the Trustee following an Indenture Event of Default and any other
moneys held as part of the Trust Estate (except for moneys held in the Rebate Fund or any
defeasance escrow account) shall be applied in the following order:
(a) To the payment of the reasonable costs of the Trustee, including, but not limited
to, its Counsel fees, and disbursements of the Trustee, and the payment of its reasonable
compensation, including any amounts remaining unpaid;
(b) To the payment of interest then owing on the Certificates, and in case such
moneys shall be insufficient to pay the same in full, then to the payment of interest ratably,
without preference or priority of one Certificate over another or of any installment of interest
over any other installment of interest; and
(c) To the payment of principal or redemption price (as the case may be) then owing
on the Outstanding Certificates, and in case such moneys shall be insufficient to pay the same in
full, then to the payment of principal or redemption price ratably, without preference or priority
of one Certificate over another.
The surplus, if any, shall be paid to the Town.
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ARTICLE 8
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee.
(a) The Trustee hereby accepts the provisions of the Site Lease, the Lease and this
Indenture and accepts the trusts imposed upon it by this Indenture and agrees to perform said
trusts, but only upon and subject to the express terms and conditions set forth in the Site Lease,
the Lease and this Indenture, and no implied covenants or obligations shall be read into this
Indenture against the Trustee.
(b) The Trustee hereby covenants for the benefit of the Owners of the Certificates
that the Trustee will observe and comply with its obligations under the Site Lease, the Lease and
this Indenture.
(c) The Trustee shall at all times, to the extent permitted by law, defend, preserve and
protect its interest in the Leased Property and the other property or property rights included in the
Trust Estate and all the rights of the Owners under this Indenture against all claims and demands
of all persons whomsoever.
(d) The Trustee, prior to the occurrence of an Event of Indenture Default which may
have occurred, undertakes to perform such duties and only such duties as are specifically set
forth in the Lease and in this Indenture. If an Event of Indenture Default has occurred (which
has not been cured or waived), the Trustee shall exercise such of the rights and power vested in it
by the Lease and this Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in conducting such person’s
affairs in exercising any rights or remedies or performing any of its duties hereunder. Before
taking any action hereunder the Trustee may require that satisfactory indemnity be furnished to it
by the Certificate Owners for the reimbursement of all costs and expenses which it may incur
and to protect it against all liability, including, but not limited to, any liability arising directly or
indirectly under any federal, state or local statute, rule, law or resolution related to the protection
of the environment or hazardous substances, except liability which may result from its
negligence or willful misconduct, by reason of any action so taken.
Section 8.02 Liability of Trustee; Trustee’s Use of Agents.
(a) The Trustee shall be liable only for its own negligence or willful misconduct.
However, the Trustee shall not be liable for any error of judgment made in good faith, provided
the Trustee was not negligent in ascertaining the pertinent facts.
(b) The Trustee may exercise any powers under this Indenture and perform any duties
required of it through attorneys, agents, officers or employees, and shall be entitled to the advice
or opinion of Counsel concerning all matters involving the Trustee’s 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 rely and act upon the opinion or advice of Counsel engaged by the Trustee in the exercise of
reasonable care without liability for any loss or damage resulting from any action or omission
taken in good faith reliance upon that opinion or advice.
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(c) The permissive right of the Trustee to do things enumerated in this Indenture shall
not be construed as a duty and the Trustee shall not be answerable for other than its negligence or
willful misconduct, and shall not be answerable for any negligent act of its attorneys, agents or
receivers which have been selected by the Trustee with due care.
(d) The Trustee shall not be personally liable for any debts contracted or for damages
to persons or to personal property injured or damaged, or for salaries or nonfulfillment of
contracts during any period in which it may be in possession of or managing the Leased
Property.
(e) The Trustee shall not be liable for actions taken at the direction of Owners
pursuant to the provisions of Article 7.
(f) Any person hired by the Trustee to enforce Lease Remedies shall be considered
the Trustee’s agent for the purposes of this Section.
(g) 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 Site Lease, the Lease or this Indenture or of any
supplements thereto or hereto or any financing statement (other than continuation statements) in
connection therewith, or for insuring the project, for collecting any insurance moneys, 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 Leased Property, 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 Town, except as provided herein; but the Trustee may require of the Town 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 Town under
the Site Lease or 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 this
Indenture.
(h) The Trustee makes no representations as to the value or condition of the Trust
Estate or any part thereof (except for funds and investments held by the Trustee), or the validity
or sufficiency of this Indenture or of the Certificates. The Trustee shall not be accountable for
the use of any Certificates executed and delivered hereunder. The Trustee shall not be
accountable for the use or application of any Certificates or the proceeds thereof or of any money
paid to or upon the order of the Town under any provisions of this Indenture or the Lease.
(i) 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 Town by the Town Representative or such other person as may be
designated for such purpose by ordinance or resolution of the Council, as sufficient evidence of
the facts therein contained, and before the occurrence of a default of which the Trustee has been
notified as provided in Section 8.05 or of which by said subsection it is deemed to have been
notified, the Trustee may rely upon a similar certificate to the effect that any particular dealing,
transaction, or action is necessary or expedient, but may at its discretion secure such further
evidence deemed necessary or advisable, but shall in no case be bound to secure the same.
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(j) 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 that the Trustee is responsible for investing moneys in funds held hereunder in
compliance with the written investment direction of the Town.
(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.
(l) 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 Town to
the execution and delivery of any Certificates, the withdrawal of any cash, or the taking of any
other action by the Trustee.
(m) Notwithstanding any other provision hereof, the Trustee shall not be required to
advance any of its own funds in the performance of its obligations hereunder or any other
documents related to this Indenture, but may if it has received assurances from the Owners of the
Certificates or indemnity from the Owners of the Certificates satisfactory to it that it will be
repaid.
(n) The Trustee shall have no responsibility with respect to any information,
statement or recital in any offering memorandum or other disclosure material prepared or
distributed with respect to the Certificates except to the extent that such statement was provided
by the Trustee or describes the Trustee’s duties under this Indenture.
(o) The Trustee is authorized and directed to enter into the Site Lease and the Lease,
solely in its capacity as Trustee under this Indenture.
(p) 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 books, papers and records of the Town pertaining to the
Leased Property and the Certificates, and to take such memoranda from and in regard thereto as
may be desired.
Section 8.03 Representations and Covenants of Trustee. The Trustee represents,
warrants and covenants as follows:
(a) So long as no Event of Indenture Default has occurred and is then continuing or
existing, except as specifically provided in the Site Lease or the Lease or as necessary to transfer
the Trust Estate to a successor Trustee, the Trustee shall not pledge or assign the Trustee’s right,
title and interest in and to (i) the Lease or the Site Lease, (ii) the Base Rentals, other Revenues
and collateral, security interests and attendant rights and obligations which may be derived under
the Lease or the Site Lease and/or (iii) the Leased Property and any reversion therein or any of
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the Trustee’s other rights under the Lease or the Site Lease or assign, pledge, mortgage,
encumber or grant a security interest in the Trustee’s right, title and interest in, to and under the
Lease or the Site Lease or the Leased Property except for Permitted Encumbrances.
(b) Neither the execution and delivery of the Lease and the Site Lease or this
Indenture by the Trustee, nor the fulfillment of or compliance with the terms and conditions
thereof and hereof, nor the consummation of the transactions contemplated thereby or 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 Trustee is now a party or by which the Trustee is
bound, or constitutes a default under any of the foregoing.
(c) To the Trustee’s knowledge, there is no litigation or proceeding pending against
the Trustee affecting the right of the Trustee to execute the Lease and the Site Lease or to
execute this Indenture, and perform its obligations thereunder or hereunder, except such
litigation or proceeding as has been disclosed in writing to the Town on or prior to the date this
Indenture is executed and delivered.
(d) The Trustee covenants and agrees to comply with any applicable requirements for
the Trustee set forth in the Tax Certificate as directed in writing by the Town.
Section 8.04 Compensation. The Trustee shall be entitled to payment and
reimbursement for its reasonable fees and expenses 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 6.2 of the Lease. Should it become necessary that the Trustee perform extraordinary
services, it shall be entitled to reasonable extra compensation therefor and to reimbursement for
reasonable extraordinary expenses in connection therewith; provided that if such extraordinary
services or extraordinary costs and expenses are occasioned by negligence or willful misconduct
of the Trustee, it shall not be entitled to compensation or reimbursement therefor. The rights of
the Trustee to payments pursuant to this Section shall be superior to the rights of the Owners
with respect to the Trust Estate.
Section 8.05 Notice of Default; Right to Investigate. If an Event of Indenture Default
occurs of which the Trustee is deemed to have notice pursuant to this Section, the Trustee shall,
within thirty (30) days after it receives notice thereof, give written notice by first class mail to the
Owners of the Certificates of all Events of Indenture Default known to the Trustee and send a
copy of such notice to the Town, unless such defaults have been remedied. The Trustee shall not
be required to take notice or be deemed to have notice of any default unless it has actual
knowledge thereof or has been notified in writing of such default by the Town or the Owners of
at least 25% in aggregate principal amount of the Outstanding Certificates. The Trustee may,
however, at any time request the Town to provide full information as to the performance of any
covenant under the Lease; and, if information satisfactory to it is not forthcoming, the Trustee
may make or cause to be made an investigation into any matter related to the Site Lease, the
Lease and the Leased Property.
Section 8.06 Obligation to Act on Defaults. If any Event of Indenture Default shall
have occurred and be continuing of which the Trustee has actual knowledge or notice pursuant to
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8.05, the Trustee shall exercise such of the rights and remedies vested in it by this Indenture and
shall use the same degree of care in their exercise as a prudent person would exercise or use in
the circumstances in the conduct of his or her own affairs; provided, that if in the opinion of the
Trustee such action may tend to involve expense or liability, it shall not be obligated to take such
action unless it is furnished with indemnity satisfactory to it for the reimbursement of all costs
and expenses (including, without limitation, attorney’s fees and expenses) to which it may be put
and to protect it against all liability which may incur in or by reason of such action, except
liability which is adjudicated to have resulted from its negligence or willful misconduct by
reason of any action so taken..
Section 8.07 Reliance on Requisition, etc. The Trustee may conclusively rely and
shall be fully protected from acting on any written requisition, resolution, notice, telegram,
request, consent, waiver, certificate, statement, affidavit, voucher, bond, or other paper or
document which it in good faith believes to be genuine and to have been passed or signed by the
proper persons or to have been prepared and furnished pursuant to any of the provisions of this
Indenture; and the Trustee shall be under no duty to make any investigation as to any statement
contained in any such instrument, but may accept the same as conclusive evidence of the
accuracy of such statement. 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 Owners of the same Certificate and upon any Certificates delivered in place thereof.
The Trustee shall be entitled to rely upon opinions of Counsel and shall not be
responsible for any loss or damage resulting from reliance in good faith thereon, except for its
own negligence or willful misconduct.
Section 8.08 Trustee May Own Certificates. The Trustee may in good faith buy, sell,
own and hold any of the Certificates and may join in any action which any Owner may be
entitled to take with like effect as if the Trustee were not the party to this Indenture. The Trustee
may also engage in or be interested in any financial or other transaction with the Town provided
that if the Trustee determines that any such relation is in conflict with its duties under this
Indenture, it shall eliminate the conflict or resign as Trustee.
Section 8.09 Construction of Ambiguous Provisions. The Trustee may construe any
ambiguous or inconsistent provisions of this Indenture, and any such construction by the Trustee
shall be binding upon the Owners. In construing any such provision, the Trustee will be entitled
to rely upon opinions of Counsel and will not be responsible for any loss or damage resulting
from reliance in good faith thereon, except for its own negligence or willful misconduct.
Section 8.10 Resignation of Trustee. The Trustee may resign and be discharged of the
trusts created by this Indenture by written resignation filed with the Town not less than sixty (60)
days before the date when it is to take effect; provided notice of such resignation is mailed by
registered or certified mail to the Owner of each Outstanding Certificate at the address shown on
the registration books. Such resignation shall take effect only upon the appointment of a
successor Trustee. If no successor Trustee is appointed within sixty (60) days following the date
designated for the resignation of the Trustee, the resigning Trustee may apply to a court of
competent jurisdiction to appoint a successor Trustee. The rights of the Trustee to be held
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harmless, to insurance proceeds, or to other amounts due arising prior to the date of such
resignation shall survive resignation.
Section 8.11 Removal of Trustee. Any Trustee hereunder may be removed at any
time, after payment of all outstanding fees and expenses of the Trustee being so removed, by the
Town or by the Owners of a majority in aggregate principal amount of the Certificates then
Outstanding, upon written notice being filed with the Trustee, the Town and the Owner of each
Outstanding Certificate at the address shown on the registration books. Such removal shall take
effect only upon the appointment of a successor Trustee. The rights of the Trustee to be held
harmless, to insurance proceeds or to other amounts due arising prior to the date of such removal
shall survive removal.
Section 8.12 Appointment of Successor Trustee. If the Trustee or any successor
trustee resigns or is removed or dissolved, or if its property or business is taken under the control
of any state or federal court or administrative body, a vacancy shall forthwith exist in the office
of the Trustee, and the Town shall appoint a successor, and shall cause a notice of such
appointment to be mailed by registered or certified mail to the Owners of all Outstanding
Certificates at the address shown on the registration books. If the Town fails to make such
appointment within thirty (30) days after the date notice of resignation is filed, the Owners of a
majority in aggregate principal amount of the Certificates then Outstanding may do so. If the
Owners have failed to make such appointment within thirty (30) days after the date notice of
resignation is filed, the Trustee may petition a court of competent jurisdiction to make such
appointment.
Section 8.13 Qualification of Successor. Any successor trustee shall execute,
acknowledge and deliver to the Town an instrument accepting such appointment under this
Indenture; and thereupon such successor trustee, without any further act, deed, or conveyance,
shall become fully vested with all the estates, properties, rights, powers, trusts, duties, and
obligations of its predecessor in the trust under this Indenture, with like effect as if originally
named Trustee herein and thereupon the duties and obligations of the previous Trustee shall
cease and terminate. Upon the payment of the fees and expenses owed to the previous Trustee,
the Trustee ceasing to act under this Indenture shall pay over to the successor trustee all moneys
held by it under this Indenture; and, upon request of the successor trustee, the Trustee ceasing to
act shall execute and deliver an instrument transferring to the successor trustee all the estates,
properties, rights, powers and trusts under this Indenture of the Trustee ceasing to Act.
Section 8.14 Instruments of Succession. Any successor trustee shall execute,
acknowledge and deliver to the Town an instrument accepting such appointment under this
Indenture; and thereupon such successor trustee, without any further act, deed or conveyance,
shall become fully vested with all the estates, properties, rights, powers, trusts, duties and
obligations of its predecessor in the trust under this Indenture, with like effect as if originally
named Trustee herein and thereupon the duties and obligations of the predecessor shall cease and
terminate. The Trustee ceasing to act under this Indenture shall, upon the payment of the fees
and expenses owed to the predecessor Trustee, pay over to the successor trustee all moneys held
by it under this Indenture; and, upon request of the successor trustee, the Trustee ceasing to act
shall execute and deliver an instrument transferring to the successor trustee all the estates,
properties, rights, powers and trusts under this Indenture of the Trustee ceasing to act.
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Section 8.15 Merger of Trustee. Any corporation into which any Trustee hereunder
may be merged or with which it may be consolidated, or any corporation resulting from any sale,
merger or consolidation of its corporate trust business to which any Trustee hereunder shall be a
party, shall be the successor trustee under this Indenture, without the execution or filing of any
paper or any further act on the part of the parties hereto, anything herein to the contrary
notwithstanding.
Section 8.16 Intervention by Trustee. In any judicial proceeding to which the Trustee
or the Town is a party and which, in the opinion of the Trustee and its Counsel, has a substantial
bearing on the interests of Owners of the Certificates, the Trustee may intervene on behalf of the
Owners and shall do so if requested in writing by the Owners of at least a majority in aggregate
principal amount of Outstanding Certificates and upon being furnished satisfactory indemnity.
The rights and obligations of the Trustee under this Section are subject to the approval of a court
of competent jurisdiction.
Section 8.17 Books and Record of the Trustee; Trustee Record Keeping. The
Trustee shall keep such books and records relating to the Site Lease and the Lease and Funds and
Accounts created under this Indenture as shall be consistent with industry practice and make
such books and records available for inspection by the Town, at all reasonable times and for six
years following the discharge of this Indenture according to Article 6 hereof.
Section 8.18 Environmental Matters. Any real property or interest in real property
constituting any portion of the Trust Estate shall be subject to the following provisions:
(a) The Trustee’s responsibilities for any interest in real property constituting any
portion of the Trust Estate, prior to an Event of Indenture Default, shall be performed as Trustee
on behalf of the Owners of the Certificates without any duty to monitor or investigate whether
the real property constituting any portion of the Trust Estate complies with environmental laws
or is subject to any Hazardous Substance.
(b) Following an Event of Indenture Default, if the Trustee determines that the
release, threatened release, use, generation, treatment, storage or disposal of any Hazardous
Substance on, under or about real property constituting any portion of the Trust Estate gives rise
to any liability or potential liability under any federal, State, local or common law, or devalues or
threatens to devalue such real property, the Trustee may take whatever action is deemed
necessary by the Trustee to address the threatened or actual releases of Hazardous Substances, or
to bring about or maintain such real property’s compliance with federal, State or local
environmental laws and regulations.
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ARTICLE 9
SUPPLEMENTAL INDENTURES AND
AMENDMENTS OF THE LEASE AND SITE LEASE
Section 9.01 Supplemental Indentures and Amendments Not Requiring Certificate
Owners’ Consent. The Trustee may, with the written consent of the Town, but without the
consent of or notice to the Owners, enter into such indentures or agreements supplemental
hereto, for any one or more or all of the following purposes:
(a) to grant additional powers or rights to the Trustee;
(b) to make any amendments necessary or desirable to obtain or maintain a rating
from any Rating Agency rating the Certificates;
(c) to authorize the execution and delivery of Additional Certificates for the purposes
and under the conditions set forth in Section 2.08 hereof;
(d) in order to preserve or protect the excludability from gross income for federal
income tax purposes of the interest portion of the Base Rentals allocable to the Certificates; or
(e) for any purpose not inconsistent with the terms of this Indenture or to cure any
ambiguity, or to correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions contained herein or to make such other amendments to
this Indenture which do not materially adversely affect the interests of the Owners of the
Certificates.
Section 9.02 Supplemental Indentures and Amendments Requiring Certificate
Owners’ Consent.
(a) Exclusive of supplemental indentures and amendments covered by Section 9.01
hereof, the written consent of the Town and the consent of the Owners of a majority in aggregate
principal amount of the Certificates then Outstanding, shall be required for any indenture or
indentures supplemental hereto.
(b) Notwithstanding the foregoing, without the consent of the Owners of all of the
Certificates at the time Outstanding nothing herein contained shall permit, or be construed as
permitting:
(i) 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 owner of such Certificate;
(ii) The deprivation of the Owner of any Certificate then Outstanding of the
interest created by this Indenture (other than as originally permitted hereby) without the consent
of the Owner of such Certificate;
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(iii) A privilege or priority of any Certificate or Certificates over any other
Certificate or Certificates (except with respect to the possible subordination of Additional
Certificates); or
(iv) A reduction in the aggregate principal amount of the Certificates required
for consent to such supplemental indenture.
If at any time the Town shall request the Trustee to enter into a supplemental
indenture which requires the consent of the Certificate Owners as provided herein, the Trustee
shall, upon being satisfactorily indemnified with respect to expenses, cause notice of the
proposed execution of such supplemental indenture to be mailed to the Registered Owners of the
Certificates at the addresses last shown on the registration records of 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
Certificate Owners. If, within 60 days or such longer period as shall be prescribed by the Town
following the mailing of such notice, the required consents have been furnished to the Trustee as
herein provided, no Certificate Owner shall have any right to object to any of the terms and
provisions contained therein, or the operation thereof, or in any manner to question the propriety
of the execution thereof, or to enjoin or restrain the Trustee from executing the same or from
taking any action pursuant to the provisions thereof.
Section 9.03 Amendment of the Lease and the Site Lease.
(a) The Trustee and the Town shall have the right to amend the Lease and the Site
Lease without the consent of or notice to the Owners of the Certificates, for one or more of the
following purposes:
(1) to add covenants of the Trustee or the Town or to grant additional powers
or rights to the Trustee;
(2) to make any amendments necessary or desirable to obtain or maintain a
rating from any Rating Agency of the Certificates;
(3) in order to more precisely identify the Leased Property, including any
substitutions, additions or modifications to the Leased Property as the case may be, as may be
authorized under the Site Lease and the Lease;
(4) to make additions to the Leased Property, amend the schedule of Base
Rentals and make all other amendments necessary for the execution and delivery of Additional
Certificates in accordance with Section 2.08 hereof;
(5) in order to preserve or protect the excludability from gross income for
federal income tax purposes of the interest portion of the Base Rentals allocable to the
Certificates; or
(6) for any purpose not inconsistent with the terms of this Indenture or to cure
any ambiguity or to correct or supplement any provision contained therein or in any amendment
thereto which may be defective or inconsistent with any other provision contained therein or
41
herein or in any amendment thereto or to make such other amendments to the Lease or the Site
Lease which do not materially adversely affect the interests of the Owners of the Certificates.
(b) If Town proposes to amend the Lease or the Site Lease in such a way as would
materially adversely affect the interests of the Owners of the Certificates, the Trustee shall notify
the Owners of the Certificates of the proposed amendment and may consent thereto only with the
consent of the Owners of a majority in aggregate principal amount of the Outstanding
Certificates; provided, that the Trustee shall not, without the unanimous consent of the Owners
of all Certificates Outstanding, consent to any amendment which would (1) decrease the amounts
payable in respect of the Lease, or (2) change the Base Rentals Payment Dates or (3) change any
of the prepayment provisions of the Lease.
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ARTICLE 10
MISCELLANEOUS
Section 10.01 Evidence of Signature of 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 Owners may be in one or more instruments of similar tenor, and shall be signed
or executed by such 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 Owner or his attorney of such
instrument may be proved by the certificate of any officer authorized to take acknowledgments
in the jurisdiction in which he purports to act that the person signing such request or other
instrument acknowledged to him 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 owner of any Certificate shall be conclusive upon and shall
bind all future owners of such Certificate and of any Certificate issued upon the transfer or
exchange of such Certificate in respect of anything done or suffered to be done by the Town, the
Trustee in accordance therewith, whether or not notation of such consent or request is made upon
any such Certificate.
Section 10.02 Inspection of the Leased Property. Under the Lease, the Trustee and its
duly authorized agents (a) have the right, but not the duty, on reasonable notice to the Town, at
all reasonable times, to examine and inspect the Leased Property (subject to such regulations as
may be imposed by the Town for security purposes) and (b) are permitted, but have no
obligation, at all reasonable times, to examine the books, records, reports and other papers of the
Town with respect to the Leased Property.
Section 10.03 Parties Interested Herein. 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
Town, the Trustee, and the Owners any right, remedy or claim under or by reason of this
Indenture or any covenant, condition or stipulation of this Indenture; and all the covenants,
stipulations, promises and agreements in this Indenture contained by and on behalf of the Trustee
shall be for the sole and exclusive benefit of the Town, the Trustee, and the Owners.
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Section 10.04 Titles, Headings, Etc. The titles 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 of this Indenture.
Section 10.05 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 of this Indenture.
Section 10.06 Governing Law. This Indenture shall be governed and construed in
accordance with the laws of the State of Colorado without regard to choice of law analysis.
Section 10.07 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 10.08 Notices. All notices, certificates or other communications to be given
hereunder shall be sufficiently given and shall be deemed given when delivered or mailed by
certified or registered mail, postage prepaid, addressed as follows:
if to the Trustee,
UMB Bank, n.a.
1670 Broadway
Denver, CO 80202
Attention: Corporate Trust and Escrow Services
if to the Town,
Town of Avon, Colorado
One Lake Street
Avon, Colorado 81620
Attention: Finance Director
The Trustee may, by written notice, designate any further or different addresses to which
subsequent notices, certificates or other communications shall be sent.
Section 10.09 Successors and Assigns. All the covenants, promises and agreements in
this Indenture contained by or on behalf of the Trustee shall bind and inure to the benefit of its
successors and assigns, whether so expressed or not.
Section 10.10 Payments Due on Saturdays, Sundays and 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 day other than a Business Day such payment may be made
or act performed or right exercised on the next succeeding Business Day with the same force and
effect as if done on the nominal date provided in this Indenture.
Section 10.11 Undertaking to Provide Ongoing Disclosure. The Town has
covenanted in Section 11.6 of the Lease to comply with the terms of the Continuing Disclosure
44
Certificate. Notwithstanding any other provision of this Indenture, failure by the Town to
comply with the Continuing Disclosure Certificate shall not be considered an Event of Indenture
Default and the rights and remedies provided by this Indenture upon the occurrence of an Event
of Indenture Default shall not apply to any such failure. The Continuing Disclosure Certificate
shall be enforceable only by specific performance by any Owner of the applicable Certificate as
further described therein. The Trustee shall have no power or duty to enforce the obligations of
the Town under the Continuing Disclosure Certificate.
Section 10.12 Electronic Storage. The parties hereto agree that the transaction
described herein may be conducted and related documents may be stored by electronic means.
Copies, telecopies, facsimiles, electronic files and other reproductions of original executed
documents shall be deemed to be authentic and valid counterparts of such original documents for
all purposes, including the filing of any claim, action or suit in the appropriate court of law.
.
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IN WITNESS WHEREOF, the Trustee has caused this Indenture to be executed all as of
the date first above written.
UMB Bank, n.a., as Trustee
By:
Vice President
A-1
EXHIBIT A
FORM OF CERTIFICATE
Unless this certificate is presented by an authorized representative of The Depository Trust
Company, a New York Authority (“DTC”), to the Trustee for registration of transfer, exchange,
or payment, and any certificate issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
CERTIFICATE OF PARTICIPATION,
SERIES 2016
Evidencing a Proportionate Interest in the
Base Rentals and other Revenues under an Annually
Renewable Lease Purchase Agreement, dated [__________], 2016, between
UMB Bank, n.a., solely in its capacity as trustee under the Indenture, as lessor,
and the Town of Avon, Colorado, as lessee
No. R-1 $________
Interest Rate Maturity Date Dated Date CUSIP Number
_____% December 1, 20___ [__________], 2016
Registered Owner: CEDE & CO.
Principal Amount: DOLLARS
THIS CERTIFIES THAT the Registered Owner (specified above), or registered assigns,
as the Registered Owner (the “Owner”) of this Certificate of Participation, Series 2016 (this
“Certificate”), is the Owner of a proportionate interest in the right to receive certain designated
Revenues, including Base Rentals, under and as defined in the Lease Purchase Agreement (the
“Lease”) dated as of [__________], 2016, between UMB Bank, n.a., Denver, Colorado, as
Trustee (the “Trustee”), as lessor, and the Town of Avon, Colorado (the “Town”), as lessee.
This Certificate is secured as provided in the Lease and the Indenture of Trust (the “Indenture”)
dated as of [__________], 2016, by the Trustee, for the registered owners of the Certificates of
Participation, Series 2016 (the “Certificates”). All terms capitalized but not defined herein shall
have the meanings given to them in the Indenture.
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This Certificate bears interest, matures, is payable, is subject to redemption, and is
transferable as provided in the Indenture.
Under the Site Lease, certain Leased Property described therein (the “Leased Property”)
has been leased by the Town, as lessor, to the Trustee, as lessee. Under the Lease, the Leased
Property has been leased back by the Trustee, as lessor, to the Town, as lessee, and the Town has
agreed to pay directly to the Trustee Base Rentals in consideration of the Town’s right to possess
and use the Leased Property. Certain Revenues, including Base Rentals, are required under the
Indenture to be distributed by the Trustee for the payment of the Certificates and interest thereon.
The Lease is subject to annual appropriation, non-renewal and, in turn, termination by the Town.
This Certificate has been executed and delivered pursuant to the terms of the Indenture.
Reference is hereby made to the Site Lease, the Lease and the Indenture (copies of which are on
file in the offices of the Trustee) for a description of the terms on which the Certificates are
delivered, and the rights thereunder of the Owners of the Certificates, the rights, duties and
immunities of the Trustee and the rights and obligations of the Town under the Site Lease and
the Lease, to all of the provisions of which Site Lease, Lease and Indenture the Owner of this
Certificate, by acceptance hereof, assents and agrees.
Additional Certificates may be executed and delivered pursuant to the Indenture without
consent of or notice to the owners of the Certificates and upon the satisfaction of certain
conditions and limitations. Such Additional Certificates, together with the Certificates, are
referred to herein as the “Certificates.” Additional Certificates will evidence interests in rights to
receive Revenues, including Base Rentals, without preference, priority or distinction of any
Certificates, including the Certificates, over any others, however, insurance and other credit
facilities may be applicable only to particular series of Certificates or portions thereof.
To the extent and in the manner permitted by the terms of the Indenture, the provisions of
the Indenture may be amended by the Trustee with the written consent of the Owners of a
majority in aggregate principal amount of the Certificates outstanding, and may be amended
without such consent under certain circumstances described in the Indenture but in no event such
that the interests of the Owners of the Certificates are materially adversely affected, provided
that no such amendment is to impair the right of any Owner to receive in any case such Owner’s
proportionate share of any payment of Revenues in accordance with the terms of such Owner’s
Certificate.
THE OWNER OF THIS CERTIFICATE IS ENTITLED TO RECEIVE, SUBJECT TO
THE TERMS OF THE LEASE, THE PRINCIPAL AMOUNT (SPECIFIED ABOVE), ON THE
MATURITY DATE (SPECIFIED ABOVE), AND IS ENTITLED TO RECEIVE INTEREST
ON THE PRINCIPAL AMOUNT AT THE INTEREST RATE (SPECIFIED ABOVE). The
interest hereon is payable at the interest rate from the Dated Date (specified above) on
[________], 2016, and semiannually thereafter on June 1 and December 1 in each year (the
“Interest Payment Dates”) and thereafter (A) from the Execution Date (specified below), if this
Certificate is executed on an Interest Payment Date or (B) from the last preceding Interest
Payment Date to which interest has been paid in all other cases, until the Principal Amount is
paid as set forth herein. Interest is to be calculated on the basis of a 360-day year consisting of
twelve 30-day months.
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THIS CERTIFICATE IS PAYABLE SOLELY FROM THE BASE RENTALS
PAYABLE TO THE TRUSTEE PURSUANT TO THE LEASE AND OTHER REVENUES AS
DEFINED IN THE INDENTURE. NEITHER THE LEASE, THIS CERTIFICATE, OR THE
OBLIGATION OF THE TOWN TO PAY BASE RENTALS OR ADDITIONAL RENTALS
CONSTITUTES A GENERAL OBLIGATION OR OTHER INDEBTEDNESS OF THE TOWN
OR A MULTIPLE FISCAL YEAR DIRECT OR INDIRECT DEBT OR OTHER FINANCIAL
OBLIGATION WHATSOEVER OF THE TOWN, WITHIN THE MEANING OF ANY
CONSTITUTIONAL, HOME RULE CHARTER OR STATUTORY DEBT LIMITATION.
NEITHER THE LEASE NOR THE CERTIFICATES HAVE DIRECTLY OR INDIRECTLY
OBLIGATED THE TOWN TO MAKE ANY PAYMENTS BEYOND THOSE
APPROPRIATED FOR THE TOWN’S THEN CURRENT FISCAL YEAR.
As long as Cede & Co., as the nominee for The Depository Trust Company, New York,
New York (“DTC”) is the Owner hereof, the Principal Amount or redemption price hereof and
interest hereon are payable by wire transfer as directed by DTC in writing to the Trustee. If not
executed and delivered in book-entry form, the Principal Amount or redemption price hereof and
interest hereon are payable by check or draft mailed to the Owner at its address last appearing on
the registration books maintained by the Trustee or, in the case of Owners of $1,000,000 or more
in aggregate principal amount of the Certificates, by wire transfer of funds to a bank account
designated by the Owner in written instructions furnished to the Trustee.
Interest hereon is payable to the Owner, as shown on the registration books kept by the
Trustee as of the close of business on the “regular record date,” which is the 15th day of the
calendar month immediately preceding the month of the Interest Payment Date (or the Business
Day immediately preceding such 15th day, if such 15th day is not a Business Day) or on a
“special record date” established in accordance with the Indenture. The Trustee may treat the
Owner of this Certificate appearing on the registration books maintained by the Trustee as the
absolute owner hereof for all purposes and is not to be affected by any notice to the contrary.
The Principal Amount or redemption price hereof and interest hereon are payable in lawful
money of the United States of America.
This Certificate is transferable by the Owner hereof, in person or by his attorney duly
authorized in writing, on the registration books kept at the corporate trust office of the Trustee.
Upon such transfer, a new fully registered Certificate of the same maturity, of authorized
denomination or denominations, for the same aggregate principal amount, will be executed and
delivered to the transferee in exchange for this Certificate, 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 Town nor the Trustee shall be affected by any notice to the contrary.
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Optional Redemption. The Certificates maturing on or prior to December 1, 20__ shall
not be subject to optional redemption prior to their respective maturity dates. The Certificates
maturing on and after December 1, 20__ shall be subject to redemption prior to their respective
maturity dates at the option of the Town, in whole or in part, in integral multiples of $5,000, and
if in part in such order of maturities as the Town shall determine and by lot within a maturity, on
December 1, 20__, and on any date thereafter, at a redemption price equal to the principal
amount of the Certificates so redeemed plus accrued interest to the redemption date without a
premium.
Extraordinary Mandatory Redemption. If the Lease is terminated by reason of the
occurrence of (a) an Event of Nonappropriation, or (b) an Event of Lease Default, or (c) the
Trustee, at the direction of the Town, fails to repair or replace the Leased Property if: (1) the
Leased Property is damaged or destroyed in whole or in part by fire or other casualty; (2) title to,
or the temporary or permanent use of, the Leased Property, or any portion thereof, has been
taken by eminent domain by any governmental body; (3) breach of warranty or any material
defect with respect to the Leased Property becomes apparent; or (4) title to or the use of all or
any portion of the Leased Property is lost by reason of a defect in title thereto, and the Net
Proceeds (as defined in the Lease) of any insurance, performance bond or condemnation award,
or Net Proceeds received as a consequence of defaults under contracts relating to the Leased
Property, made available by reason of such occurrences, are insufficient to pay in full, the cost of
repairing or replacing the Leased Property and the Town does not appropriate sufficient funds for
such purpose or cause the Lease to be amended in order that Additional Certificates may be
executed and delivered pursuant to the Indenture for such purpose, the Certificates are required
to be called for redemption. If called for redemption, as described herein, the Certificates are to
be redeemed in whole on such date or dates as the Trustee may determine, for a redemption price
equal to the principal amount thereof, plus accrued interest to the redemption date (subject to the
availability of funds as described below).
If the Net Proceeds, including the Net Proceeds from the exercise of any Lease Remedy
under the Lease, otherwise received and other moneys then available under the Indenture are
insufficient to pay in full the principal of and accrued interest on all Outstanding Certificates, the
Trustee may, or at the request of the Owners of a majority in aggregate principal amount of the
Certificates Outstanding, and upon indemnification as to costs and expenses as provided in the
Indenture, without any further demand or notice, is to exercise all or any combination of Lease
Remedies as provided in the Lease and the Certificates are to be redeemed by the Trustee from
the Net Proceeds resulting from the exercise of such Lease Remedies and all other moneys, if
any, then on hand and being held by the Trustee for the Owners of the Certificates.
If the Net Proceeds resulting from the exercise of such Lease Remedies and other moneys
are insufficient to redeem the Certificates at 100% of the principal amount thereof plus interest
accrued to the redemption date, then such Net Proceeds resulting from the exercise of such Lease
Remedies and other moneys are to be allocated proportionately among the Certificates,
according to the principal amount thereof Outstanding. In the event that such Net Proceeds
resulting from the exercise of such Lease Remedies and other moneys are in excess of the
amount required to redeem the Certificates at 100% of the principal amount thereof plus interest
accrued to the redemption date, then such excess moneys are to be paid to the Town as an
overpayment of the Purchase Option Price in respect of the Leased Property. Prior to any
A-5
distribution of the Net Proceeds resulting from the exercise of any of such remedies, the Trustee
is entitled to payment of its reasonable and customary fees for all services rendered in connection
with such disposition, as well as reimbursement for all reasonable costs and expenses, including
attorneys’ fees, incurred thereby, from proceeds resulting from the exercise of such Lease
Remedies and other moneys.
IF THE CERTIFICATES ARE REDEEMED FOR AN AMOUNT LESS THAN THE
AGGREGATE PRINCIPAL AMOUNT THEREOF PLUS INTEREST ACCRUED TO THE
REDEMPTION DATE, SUCH PARTIAL PAYMENT IS DEEMED TO CONSTITUTE A
REDEMPTION IN FULL OF THE CERTIFICATES, AND UPON SUCH A PARTIAL
PAYMENT NO OWNER OF SUCH CERTIFICATES, INCLUDING THE CERTIFICATES,
SHALL HAVE ANY FURTHER CLAIM FOR PAYMENT AGAINST THE TRUSTEE OR
THE TOWN.
Partial Redemption. If less than all of the Certificates are to be redeemed, the
Certificates are to be redeemed only in integral multiples of $5,000. The Trustee is to treat any
Certificates of denomination greater than $5,000 as representing that number of separate
Certificates each of the denomination of $5,000 as can be obtained by dividing the actual
principal amount of such Certificates by $5,000. Upon surrender of any Certificate for
redemption in part, the Trustee is to execute and deliver to the Owner thereof, at no expense of
the Owner, a new Certificate or Certificates of authorized denominations in an aggregate
principal amount equal to the unredeemed portion of the Certificates so surrendered.
Notice of Redemption. Whenever Certificates are to be redeemed, the Trustee is required
to, not less than thirty (30) and not more than sixty (60) days prior to the redemption date (except
for Extraordinary Mandatory Redemption notice which is required to be immediate), mail notice
of redemption to all Owners of all Certificates to be redeemed at their registered addresses, by
first class mail, postage prepaid, or in the event that the Certificates to be redeemed are registered
in the name of the Depository, such notice may, in the alternative, be given by electronic means
in accordance with the requirements of the Depository.. Any notice of redemption is to (1) be
given in the name of the Trustee, (2) identify the Certificates to be redeemed, (3) specify the
redemption date and the redemption price, (4) in the event of Optional Redemption, state that the
Town has given notice of its intent to exercise its option to purchase or prepay Base Rentals
under the Lease, (5) state that such redemption is subject to the deposit of the funds related to
such option by the Town on or before the stated redemption date and (6) state that on the
redemption date the Certificates called for redemption will be payable at the corporate trust
office of the Trustee and that from that date interest will cease to accrue. The Trustee may use
“CUSIP” numbers in notices of redemption as a convenience to Certificates Owners, provided
that any such notice is required to state that no representation is made as to the correctness of
such numbers either as printed on the Certificates or as contained in any notice of redemption
and that reliance may be placed only on the identification numbers containing the prefix
established under the Indenture.
This Certificate is executed and delivered under the authority of Part 2 of Article 57,
Title 11, Colorado Revised Statutes (the “Supplemental Act”). Pursuant to Section 11-57-210 of
the Supplemental Act, such recital shall be conclusive evidence of the validity and the regularity
of the issuance of this Certificate after its delivery for value.
A-6
This Certificate is executed with the intent that the laws of the State of Colorado shall
govern its legality, validity, enforceability and construction. The Town has determined that this
Certificate is authorized and issued under the authority of and in full conformity with the
Constitution of the State of Colorado and all other laws of the State of Colorado thereunto
enabling.
This Certificate shall not be valid or become obligatory for any purpose or be entitled to
any security or benefit under the Lease or the Indenture, until executed by the Trustee.
For the purpose of Section 265(b)(3)(B) of the Internal Revenue Code, the Town has
designated the Certificates as qualified tax-exempt obligations
The Trustee has executed this Certificate solely in its capacity as Trustee under the
Indenture and not in its individual or personal capacity. The Trustee is not liable for the
obligations evidenced by the Certificates except from amounts held by it in its capacity as
Trustee under the Indenture.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all things, conditions
and acts required by the Constitution and the statutes of the State and the Indenture to exist, to
have happened and to have been performed precedent to and the execution and delivery of this
Certificate, do exist, have happened and have been performed in due time, form and manner, as
required by law.
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IN WITNESS WHEREOF, this Certificate has been executed with the manual signature
of an authorized representative of the Trustee.
Execution Date: [__________], 2016
UMB Bank, n.a., as Trustee
By:
Vice President
A-8
(Form of Assignment)
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
______________________________________________ the within Certificate 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.
Signature
Dated:
Signature Guaranteed:
Signature must be guaranteed by a member
of a Medallion Signature Program
Address of Transferee:
____________________________________
____________________________________
____________________________________
Social Security or other tax
identification number of transferee:
NOTE: The signature to this Assignment must correspond with the name as written on the face
of the within bond in every particular, without alteration or enlargement or any change
whatsoever.
(End Form of Assignment)
A-9
(Form of Prepayment Panel)
PREPAYMENT PANEL
The following installments of principal (or portions thereof) of this certificate have been
prepaid in accordance with the terms of the Indenture, as amended, authorizing the issuance of
this certificate.
Date of
Prepayment
Principal
Prepaid
Signature of
Authorized
Representative of DTC
(End of Form of Prepayment Panel)
(End Form of Certificates)
29828563 v1
TOWN OF AVON, COLORADO
CONTINUING DISCLOSURE CERTIFICATE
This Continuing Disclosure Certificate (this “Disclosure Certificate”) is executed and
delivered by the Town of Avon, Colorado (the “Town”), in connection with its authorization,
execution and delivery of a Lease Purchase Agreement, dated as of _________ __, 2016 (the
“Lease”), between UMB Bank, n.a., solely in its capacity as trustee under the Indenture described
herein (the “Trustee”), as lessor, and the Town, as lessee, and the execution and delivery of the
Certificates of Participation, Series 2016 in the aggregate principal amount of $[__________] (the
“Certificates”), evidencing proportionate interests in base rentals and other revenues under the
Lease. The Certificates are being executed and delivered pursuant to an Indenture of Trust, dated as
of _________ __, 2016 (the “Indenture”), by the Trustee. The Town covenants and agrees as
follows:
SECTION 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is
being executed and delivered by the Town for the benefit of the holders and beneficial owners of the
Certificates and in order to assist the Participating Underwriter in complying with Rule 15c2-
12(b)(5) of the Securities and Exchange Commission (the “SEC”).
SECTION 2. Definitions. In addition to the definitions set forth in the Indenture or
parenthetically defined herein, which apply to any capitalized terms used in this Disclosure
Certificate unless otherwise defined in this Section, the following capitalized terms shall have the
following meanings:
“Annual Report” shall mean any Annual Report provided by the Town pursuant to,
and as described in, Sections 3 and 4 of this Disclosure Certificate.
“Dissemination Agent” shall mean, initially, the Town, or any successor
Dissemination Agent designated in writing by the Town and which has filed with the Town a written
acceptance of such designation.
“Material Events” shall mean any of the events listed in Section 5 of this Disclosure
Certificate.
“MSRB” shall mean the Municipal Securities Rulemaking Board. As of the date
hereof, the MSRB’s required method of filing is electronically via its Electronic Municipal Market
Access (EMMA) system available on the Internet at http://emma.msrb.org.
“Participating Underwriter” shall mean the original underwriter of the Certificates
required to comply with the Rule in connection with an offering of the Certificates.
“Rule” shall mean Rule 15c2-12(b)(5) adopted by the SEC under the Securities
Exchange Act of 1934, as the same may be amended from time to time.
2
SECTION 3. Provision of Annual Reports.
a. The Town shall, or shall cause the Dissemination Agent to, not later than nine
(9) months following the end of the Town’s fiscal year of each year, commencing nine (9) months
following the end of the Town’s fiscal year ending December 31, [2015], provide to the MSRB (in
an electronic format as prescribed by the MSRB), an Annual Report which is consistent with the
requirements of Section 4 of this Disclosure Certificate. Not later than five (5) business days prior to
said date, the Town shall provide the Annual Report to the Dissemination Agent (if other than the
Town). The Annual Report may be submitted as a single document or as separate documents
comprising a package, and may cross-reference other information as provided in Section 4 of this
Disclosure Certificate; provided that the audited financial statements of the Town may be submitted
separately from the balance of the Annual Report.
b. If the Town is unable to provide to the MSRB an Annual Report by the date
required in subsection (a), the Town shall file or cause to be filed with the MSRB a notice in
substantially the form attached as Exhibit “A.”
c. The Dissemination Agent shall:
(1) determine each year prior to the date for providing the Annual Report
the appropriate electronic format prescribed by the MSRB;
(2) if the Dissemination Agent is other than the Town, send written notice
to the Town at least 45 days prior to the date the Annual Report is due stating that the
Annual Report is due as provided in Section 3(a) hereof; and
(3) if the Dissemination Agent is other than the Town, file a report with
the Town certifying that the Annual Report has been provided pursuant to this
Disclosure Certificate, stating the date it was provided and listing all the entities to
which it was provided.
SECTION 4. Content of Annual Reports. The Town’s Annual Report shall contain
or incorporate by reference the following:
a. A copy of its annual financial statements prepared in accordance with
generally accepted accounting principles audited by a firm of certified public accountants. If audited
annual financial statements are not available by the time specified in Section 3(a) above, audited
financial statements will be provided when and if available.
b. An update of the type of information identified in Exhibit “B” hereto, which is
contained in the tables in the Official Statement with respect to the Certificates.
Any or all of the items listed above may be incorporated by reference from other documents,
including official statements of debt issues of the Town or related public entities, which are available
to the public on the MSRB’s Internet Web Site or filed with the SEC. The Town shall clearly
identify each such document incorporated by reference.
3
SECTION 5. Reporting of Material Events. The Town shall file or cause to be
filed with the MSRB, in a timely manner not in excess of ten business days after the occurrence of
the event, notice of any of the events listed below with respect to the Certificates:
a. Principal and interest payment delinquencies;
b. Non-payment related defaults, if material;
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, the issuance by the Internal Revenue Service of
proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-
TEB) or other material notices or determinations with respect to the tax status of the
Certificates, or other material events affecting the tax status of the Certificates;
g. Modifications to rights of bondholders, if material;
h. Bond calls, if material, and tender offers;
i. Defeasances;
j. Release, substitution or sale of property securing repayment of the
Certificates, if material;
k. Rating changes;
l. Bankruptcy, insolvency, receivership or similar event of the obligated person;1
m. The consummation of a merger, consolidation, or acquisition involving an
obligated person or the sale of all or substantially all of the assets of the obligated person, other than
in the ordinary course of business, the entry into a definitive agreement to undertake such an action
or the termination of a definitive agreement relating to any such actions, other than pursuant to its
terms, if material; and
1 For the purposes of the event identified in subparagraph (b)(5)(i)(C)(12) of the Rule, the event is considered to occur
when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an obligated person in
a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or
governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person,
or if such jurisdiction has been assumed by leaving the existing governing body and official or officers in possession but
subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of
reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over
substantially all of the assets or business of the obligated person.
4
n. Appointment of a successor or additional trustee or the change of name of a
trustee, if material.
SECTION 6. Format; Identifying Information. All documents provided to the
MSRB pursuant to this Disclosure Certificate shall be in the format prescribed by the MSRB and
accompanied by identifying information as prescribed by the MSRB.
As of the date of this Disclosure Certificate, all documents submitted to the MSRB
must be in portable document format (PDF) files configured to permit documents to be saved,
viewed, printed and retransmitted by electronic means. In addition, such PDF files must be word-
searchable, provided that diagrams, images and other non-textual elements are not required to be
word-searchable.
SECTION 7. Termination of Reporting Obligation. The Town’s obligations under
this Disclosure Certificate shall terminate upon the earliest of: (i) the date of legal defeasance, prior
redemption or payment in full of all of the Certificates; (ii) the date that the Town no longer
constitutes an “obligated person” within the meaning of the Rule; or (iii) the date on which those
portions of the Rule which require 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 Certificates.
SECTION 8. Dissemination Agent. The Town may, from time to time, appoint or
engage a Dissemination Agent to assist the Town in carrying out its obligations under this
Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing
a successor Dissemination Agent.
SECTION 9. Amendment; Waiver. Notwithstanding any other provision of this
Disclosure Certificate, the Town may amend this Disclosure Certificate and may waive any
provision of this Disclosure Certificate, without the consent of the holders and beneficial owners of
the Certificates, if such amendment or waiver does not, in and of itself, cause the undertakings herein
(or action of any Participating Underwriter in reliance on the undertakings herein) to violate the
Rule, but taking into account any subsequent change in or official interpretation of the Rule. The
Town will provide notice of such amendment or waiver to the MSRB.
SECTION 10. Additional Information. Nothing in this Disclosure Certificate shall
be deemed to prevent the Town from disseminating any other information, using the means of
dissemination set forth in this Disclosure Certificate or any other means of communication, or
including any other information in any Annual Report or notice of occurrence of a Material Event, in
addition to that which is required by this Disclosure Certificate. If the Town chooses to include any
information in any Annual Report or notice of occurrence of a Material Event in addition to that
which is specifically required by this Disclosure Certificate, the Town shall have no obligation under
this Disclosure Certificate to update such information or include it in any future Annual Report or
notice of occurrence of a Material Event.
SECTION 11. Default. In the event of a failure of the Town to comply with any
provision of this Disclosure Certificate, any holder or beneficial owner of the Certificates may take
such actions as may be necessary and appropriate, including seeking mandate or specific
5
performance by court order, to cause the Town to comply with its obligations under this Disclosure
Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default
under the Lease, and the sole remedy under this Disclosure Certificate in the event of any failure of
the Town to comply with this Disclosure Certificate shall be an action to compel performance.
SECTION 12. Beneficiaries. This Disclosure Certificate shall inure solely to the
benefit of the Town, the Dissemination Agent, the Participating Underwriter and the holders and
beneficial owners from time to time of the Certificates, and shall create no rights in any other person
or entity.
DATE: _________ __, 2016
TOWN OF AVON, COLORADO
By _______________________________________
Mayor
A-1
EXHIBIT “A”
NOTICE OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer: Town of Avon, Colorado
Name of Bond Issue: $[__________] aggregate principal amount of Certificates of Participation,
Series 2016, Evidencing Proportionate Interests in the Right to Receive Base Rentals and Other
Revenues Under a Lease Purchase Agreement between UMB Bank, n.a., as lessor, and the Town, as
lessee.
Date of Issuance: _________ __, 2016.
NOTICE IS HEREBY GIVEN that the Town has not provided an Annual Report with respect to the
Certificates as required by Section 11.6 of the Lease Purchase Agreement, dated as of _________
__, 2016, and the Continuing Disclosure Certificate executed on _________ __, 2016, by the Town.
The Town anticipates that the Annual Report will be filed by _____________ ___, 20___.
Dated: ______________, _____
TOWN OF AVON, COLORADO
By:
Mayor
B-1
EXHIBIT “B”
INDEX OF OFFICIAL STATEMENT TABLES TO BE UPDATED
See Appendix [__] to the Final Official Statement