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Home My WebLink About20072095.tiff RESOLUTION RE: APPROVE PETITION FOR ABATEMENT OR REFUND OF TAXES - 107 SOUTH IRENE AVENUE, INC., AND MILLIKEN FIRE PROTECTION DISTRICT WHEREAS,the Board of County Commissioners of Weld County, Colorado, pursuant to Colorado statute and the Weld County Home Rule Charter, is vested with the authority of administering the affairs of Weld County, Colorado, and WHEREAS,the Board of County Commissioners of Weld County, State of Colorado, at a duly and lawfully called regular meeting held on the 23rd day of July,2007,at which meeting there were present the following members: Commissioners William F. Garcia, Robert D. Masden, and Douglas Rademacher, with Commissioners David E. Long and William H. Jerke being excused, and WHEREAS,notice of such meeting and an opportunity to be present has been given to the taxpayer and the Assessor of said County, with said Assessor, Christopher Woodruff, being present,and taxpayers 107 South Irene Avenue, Inc.,and Milliken Fire Protection District,not being present, and WHEREAS,the Board of County Commissioners have carefully considered the attached petition, and are fully advised in relation thereto. NOW,THEREFORE,BE IT RESOLVED by the Board of County Commissioners of Weld County,Colorado,that the Board concurs with the recommendation of the assessor and the petition be and hereby is, approved, and an abatement or refund be allowed as follows: CORRECTION TO ASSESSED ABATEMENT TAX VALUATION OR REFUND YEAR $225,317.00 $4,674.62 2006 2007-2095 27 AS0066 /a —(23--e7 TAX ABATEMENT PETITION - 107 SOUTH IRENE AVENUE, INC., AND MILLIKEN FIRE PROTECTION DISTRICT PAGE 2 The above and foregoing Resolution was,on motion duly made and seconded,adopted by the following vote on the 23rd day of July, A.D., 2007. BOARD OF COUNTY COMMISSIONERS !' " a' WELD COUNTY, COLORADO ( � � ��D,� n ATTEST: , _' ``XCUSED J avid E. Long, Chair Weld County Clerk to the ',. R" � �! XCUSED Willia . Pro-Tem BY: De ty CI to the Bo: Willia . Garcia APP D AS TO • (C^Jy�pu1` (fix\ Robert . Masden, Acting Chair Pro-Tem ,e- A- ty Attorney c,LQr ougla Rademache Date of signature: t' 101 2007-2095 AS0066 PETITION FOR ABATEMENT OR REFUND OF TAXES 7 County: Weld Date Received 4/10/2007 '�CD ' t2� 'l (Use Assessors or Commissioners'Date Stamp) Section I: Petitioner,please complete Section I only. Date: 4/5/2007 Month Day Year Petitioners Name: 107 South Irene Ave Inc and Milliken Fire Protection District Petitioner's Mailing Address: 107 South Irene Ave. Milliken Colorado 80543 City or Town State Zip Code SCHEDULE OR PARCEL NUMBER(S) PROPERTY ADDRESS OR LEGAL DESCRIPTION OF PROPERTY R6925498 1059-11-2-21-016 MIL LI l THRU 19 BLK56 Petitioner states that the taxes assessed against the above property for the property tax year 2006 are incorrect for the following reasons: (Briefly describe the circumstances surrounding the incorrect value or tax. Attach additional sheets if necessary.) Property has a Lease to Purchase Agreement with the Milliken Fire Protection District. The property should be exempt per Colorado Statue 39-3-124. Property used by government entity-installment sales or lease purchase or leveraged lease agreement-exemption. / Q / ,(� 'la Ly wig Cho'JA•7.a, a-o W.lr.Gl. al 7yr,PO4), f-�.PA CP . Petitioner's estimate of value: $225,317 Exempt (2006 ) Value Year Petitioner requests an abatement or refund of the appropriate taxes. I declare,under penalty of perjury in the second degree,that this petition,together with any accompanying exhibits or statements,has been prepared or examined by me,and to the best of my knowledge,information and belief,is true nrr-. , complleettee. //7 &c', �-/ Daytime Phone Number J ) tamers Signatur By Daytime Phone Number( ) Agent's Signature' 'Letter of agency must be attached when petition is submitted by an agent. If the board of county commissioners,pursuant to section 39-10-114(1),or the property tax administrator,pursuant to section 39-2-116,denies the petition for refund or abatement of taxes in whole or in part,the petitioner may appeal to the board of assessment appeals pursuant to the provisions of section 39-2-125 within thirty days of the entry of any such decision.§39-10-114.5(1),C.R.S. Section II: Assessor's Recommendation (For Assessors Use Only) Tax Year 2006 tit As lig Original $225,317 $50,520 $4,674,62 Corrected $225,317 $50,520 $0.00 Abate/Refund $4,674.62 litiGicissor recommends approval as outlined above. No protest was filed for the year: Ora protest was filed,please attach a copy of the NOD.) n Assessor recommends denial for the following reason(s): (�^^ \ �4��-dVr// Asseasor's r puaeasoS tun 15-OPT-AR No.920-66/06 2007-2095 • FOR ASSESSORS AND COUNTY COMMISSIONERS USE ONLY (Section III or Section IV must be completed) Every petition for abatement or refund filed pursuant to section 39-10-114 shall be acted upon pursuant to the provisions of this section by the board of county commissioners or the assessor,as appropriate,within six months of the date of filing such petition,§39-1-113(1.7),C.R.S. Section III: Written Mutual Agreement of Assessor and Petitioner (Only for abatements up to$1,000) The commissioners of County authorize the assessor by Resolution No. to review petitions for abatement or refund and to settle by written mutual agreement any such petition oT r abatement or refund in an amount of one thousand dollars or less per tract,parcel,or lot of land or per schedule of personal property,in accordance with§39-1-113(1.5),C.R.S. The assessor and petitioner mutually agree to the values and tax abatement/refund of: Tax Year Actual Assessed Tax Original Corrected Abate/Refund Note:The total tax amount does not include accrued interest,penalties,and fees associated with late and/or delinquent tax payments,if applicable. Please contact the county treasurer for full payment information. Petitioner's Signature Date Assessors or Deputy Assessors Signature Date Section IV: Decision of the County Commissioners (Must be completed if Section III does not apply) WHEREAS,The County Commissioners of County,State of Colorado,at a duly and lawfully called regular meeting held on / /2006 ,at which meeting there were present the following members: Month Day Year with notice of such meeting and an opportunity to be present having been given to the taxpayer and the Assessor of said County and Assessor (being present—not present)and Name petitioner (being present—not present),and WHEREAS,The said Name County Commissioners have carefully considered the within petition,and are fully advised in relation thereto, NOW BE IT RESOLVED,That the Board(agrees--does not agree)with the recommendation of the assessor and the petition be(approved—approved in part--denied)with an abatementrefund as follows: Year Assessed Value Taxes Abate/Refund Chairperson of the Board o/County Commissioners'Signature I, County Clerk and Ex-officio Clerk of the Board of County Commissioners in sndfor the aforementioned county,do hereby certify that the above and foregoing order is truly copied from the record of the proceedings of the Board of County Commissioners. IN WITNESS WHEREOF,I have hereunto set my hand and affixed the seal of said County this day of . Month Year County Clerk's or Deputy County Clerk's Signature Note: Abatements greater than$1,000 per schedule,per year,must be submitted in duplicate to the Property Tax Administrator for review. Section V: Action of the Property Tax Administrator (For all abatements greater than$1,000) The action of the Board of County Commissioners,relative to the within petition,is hereby fA proved I Approved in part$ I I Denied for the following reason(s): y o 44 .. i ' :fri; 9—�� °7 tery's Signa Date15-DPT-AFLd6.920-66/06 � WELD COUNTY ASSESSOR Account#: R6925498 PROPERTY PROFILE Parcel #: 105911221016 MH Seq#: MH Space: Appr Year: 2006 Levy: 92.53 #of Bldgs: 1 Active On: Tax Dist: 2821 Map#: 1388 LEA: MILL10 InactiveOn: Assign To: SEM Initials: BRF Acct Type: Commercial Last Updated: 4/26/2007 New Growth: 0 Owner's Name and Address: Property Address: 107 SOUTH IRENE AVE INC rStreet: 109 S IRENE AV City: MILLIKEN C/O MILLIKEN FIRE PROTECTION DISTRICT PO BOX 130 - MILLIKEN CO 80543-0130 Business/Complex: Sales Summary Sale Date Sale Price Deed Type Reception # Book Page# Grantor 10/26/2005 $275,000 WD 3339454 MILLIKEN FIRE PROTECTION DISTRICT 8/24/2005 $275,000 WD 3318232 FIRST NATIONAL BANK OF YUMA Legal Description MIL L11 THRU 19 BLK56%107& 109 S IRENE AVE% SITUS: 109 S IRENE AV MILLIKEN 80543 SITUS: 107 S IRENE AV MILLIKEN 80543 Land Valuation Summary Abst Unit of Number Value Assmt `Assessed Land Type Ag Code Code Measure Of Units Per Unit Actual Value Percent Value ' li Multiple Unit 1120 Square Feet 3750 $2.63 $9,844.00 0.0796 $783.58 Commercial 2130 Square Feet 24375 $2.63 $63,984.00 0.29 $18,555.36 Land Subtotal: 28125 $73,828.00 $19,338.94 Buildings Valuation Summary Abst Assmt *Assessed Bldg # Property Type Code Occupancy Actual Value Percent Value 1 Commercial 1220 352 - Multiple - Residential $60,596 0.0796 $4,823 1 Commercial 2230 304 - Bank $90,893 0.29 $26,359 Improvements Subtotal: $151,489 $31,182 Total Property Value $225,317 $50,521 *Approximate Assessed Value Thursday, May 03, 2007 Page 1 of 3 WELD COUNTY ASSESSOR Account#: R6925498 PROPERTY PROFILE Parcel#: 105911221016 MH Seq#: MH Space: Building#: 1 Condo SF Condo% Land: Condo % Bldg: Unit Type: Landscaping $: Property Type: Commercial 0 1 $0.00 Quality: Fair Nbhd: 125 Occupancy: Bank Condition: Typical Nbhd Ext: 00 Occupancy: Multiple- Residential Perimeter: 166 Nbhd Adj: Percent Comp: 100.00% Nbhd: 0901 Nbhd Ext: 00 Nbhd Adj: 1 Individual Built As Detail Built As: Multiple- Residential Year Built: 1910 Construction Type: C Year Remodeled: HVAC: Forced Air % Remodeled: Interior Finish: Adj Year BIt: 1910 Roof Cover: Effective Age: 16 Built As SF: 1380 Mh Make: #of Baths: Tag Length/Width: X #of Bdrms: Tag Length/Width: X #of Stories: 2 Mh Skirting LF: Story Height: 10 MH Skirting Type: Sprinkler SF: Diameter: Capacity: Height: Built As: Office Building Year Built: 1910 Construction Type: C Year Remodeled: HVAC: Forced Air % Remodeled: Interior Finish: Adj Year BIt: 1910 Roof Cover: Effective Age: 16 Built As SF: 1380 Mh Make: #of Baths: Tag Length/Width: X #of Bdrms: Tag Length/Width: X #of Stories: 2 Mh Skirting LF: Story Height: 10 MH Skirting Type: Sprinkler SF: Diameter: Capacity: Height: Building Details Thursday, May 03, 2007 Page 2 of 3 WELD COUNTY ASSESSOR Account#: R6925498 PROPERTY PROFILE Parcel 105911221016 MH Seq#: MH Space: Bldg#: 1 Units Units Price RCN Actual Value _.. `A�.., . ..1:4`...‘ ,. .ky E. ,u',. ""`°, P "7:`+:41,791.471A''''"`,4., .cam^..N,$.•ti,.�.. . Water Heater 1 $0.00 $0.00 $0.00 Sink Kitchen 1 $0.00 $0.00 $0.00 Bath 4 1 $0.00 $0.00 $0.00 .} "'. -7 v, ;1'4,-4' On, '�'* O . vx.:74-:1,,,,,,'',/..7',, `. kg,,m't ' s r Concrete Slab Average 505 $2.36 $1,191.80 $1,049.00 Asphalt Average 3384 $1.51 $5,109.84 $3,935.00 Value Details RCN Cost/SF: $60.32 Design Adj %: 0 Func Obs `)/0: 0 Total RCN: $172,785.00 Exterior Adj %: 0 Econ Obs %: 0 Phys Depr%: 0.12 Interior Adj %: 0 Other Obs %: 0 Phys Depr$: 21296 Amateur Adj %: 0 RCNLD $: $151,489.00 RCNLD Cost/SF $54.89 Market/SF: $0.00 Thursday, May 03, 2007 Page 3 of 3 Account Notes Account#: R6925498 Entry Date Office Note Bldg Category 2/5/1998 A 1998: COMBINED FROM#'S 1059-11-2-21-005&006 PER REQUEST FROM JERRY ADM BRYANT. ENTERED LAND&COPIED BLDG#1 FROM SAME. SHH 2/5/1998 A SURVEY: 4/9/97 #2542263. SHH ADM 3/30/2004 A 2004 INCLUSION TO MILLIKEN FIRE BOND 2024 PER NOTICE OF GENERAL ADM OBLIGATION INDEBTEDNESS. RECORDED 12/24/03 RECEPTION 3139066. BOND TO BE REMOVED FROM TAX ROLL IN 2025. PARCEL MUST REMAIN IN THIS BOND UNTIL 2025.JSW 12/12/2005 A 2005-PRORATED ACCT DUE TO SALE REC#3339454 11/14/05. EDF ADM Thursday, May 03, 2007 Page 1 Sketches\Photos for Acct# R6925498 BIdgID: 1 Q:\data\photos1105911221016_001_wjmb.JPG I4 • I is .,fiInn .. ti M r BIdgID: 1 Q:\data\photos1105911221016_001_wjma.JPG 0.. i • • • .........— _ ... _ ..� i • • F� d'.•, . 1. *4.9" Sketches\Photos for Acct# R6925498 BIdgID: 1 Q:ldatalphotos1105911221016_001_rv.jpg 44-,` . - y,„r a,✓ l x r f4w 'ITt i tz ' Y, Wf 4 y: 4 r4 .. May. i t BIdgID: 1 Q:ldatalphotos1105911221016_001.jpg , F j C . 5 Y i 4. „ li I fit, hp- ' ' 2t i Sketches1Photos for Acct# R6925498 BIdgID: 1 Q:IDATAISKETCHES1105911221016001-1.Jpg 225.0' Lend Size 28125 0 SF 62.0' 29.5' 10.0' 125.0' 12.8'I 23.0' SO' 73.1' Asphalt 2841.0 SF 60.0' 47.0' 36.0' First Floor 1380.0 SF Second Floor 1380.0 SF SkNeh by Apex IVWNndows^" 6 V k. J 4 _ o ,} `n ,) -J. 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O. .- r r r r r r r r r r r r r a) rn rn m m t $ oy r r r r r r r r r r r r r r r r r r r r r C N 0 0 H y p 0 C) N N 0 0 coin 0 N O O) o 0 0 0 0 0 0 0 0 0 0 0 0000000000cs000 0 0 0 0 0 0 0) U CM I N N N N N N N N N N N N N CD 0 N 0 N N N N aI I j C_- ! I.Gr 11 (/i April 5, 2007 c-;) 7 Weld County Assessor's Office 1400 N. 17th Avenue Greeley, CO 80631 J RE: 107 South Irene, Inc. �Y. To Whom It May Concern: We are the title holder of the above referenced property in Milliken, Colorado. We received the attached property tax bill and need to request your assistance in having the property properly classified on the county records. The property is currently owned by a non-profit corporation who is leasing the property to the Milliken Fire Department under an installment sale or lease purchase agreement. Pursuant to Colorado Statute: 39-3-124. Property used by governmental entity - installment sales or lease- purchase or leveraged lease agreement- exemption. (1) Property, real and personal, which is used by the state or any of its political subdivisions pursuant to the provisions of any installment sales agreement, lease- purchase agreement, or any other agreement whereby the state or such political subdivision shall be entitled to acquire title to such property at the end of the agreement term without cost or for only nominal consideration shall be exempt from the levy and collection of property tax. We hereby request that all property taxes assessed on this property be removed from your records and that any property taxes paid in error after the execution of the lease purchase agreement, dated October 14, 2005 be returned to the following: Milliken Fire District 107 South Irene Milliken, CO 80543 ATTN: Maggie Since I uri Fiema‘ 11707 South Iren nc. 1441 18th Stre , Suite 400 - Denver, CO 80202 c,7 303-296-6500 . APR 10 2001 • WELD COUNTY ASSESSOR • aREELEY. 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V°'t K m pi m w a > R 4 4 a N 40 04 2.'�ez.r, 9 a s `u Z' K W v V jre W m m 0 ed. .. @ au- m y m W W co U rzr � o! a�c' a '' m 8 S 2 Wzpo �d w w w< 5 , $ i E W M V • a a, 1p C K E ¢ Li Ca O x--• m r nC7 K n m g 1-' 7 P Z W W a O CO z z Z zmz a > 016 yy -+ .� x w N U J W W W W R y r c 8 i F II r r D W Y Y .,..,g-rte n p . ra _ ii m E to s m O O Oi¢ 9 0 O 7 L. :15.x.,..0 ,g € �r 41' Nm ac OOH_ U cc % W W U U J J �� 2 �,x0 4 C m : J w '§ 0 -- c3 a -i Q a ti $ $ mzY - z222rr . 2 c, m , s a m III If • • b 'd L610 '0N. aalj ual ! < < IIN VNEti, II LOOZ '5 'JdV 04-23-07 10:10AM FROM-TATONKA 8888732285 T-350 P.02/03 F-954 April 21, 2007 V • Weld County Assessor's Office ) / 1400 N. 17th Avenue Greeley, CO 80631 L RE: 107 South Irene, Inc. To Whom It May Concern: We are the title holder of the above referenced property in Milliken, Colorado. We received the attached property tax bill and need to request your assistance in having the property properly classified on the county records. The property is currently owned by a non-profit corporation who is leasing the property to the Milliken Fire Department under an installment sale or lease purchase agreement. Pursuant to Colorado Statute; 39-3-124. Property used by governmental entity - installment sales or lease- purchase or leveraged lease agreement-exemption. (I) Property, real and personal, which is used by the state or any of its political subdivisions pursuant to the provisions of any installment sales agreement, lease- purchase agreement, or any other agreement whereby the state or such political subdivision shall be entitled to acquire title to such property at the end of the agreement term without cost or for only nominal consideration shall be exempt from the levy and collection of property tax. We hereby request that all property taxes assessed on this property be removed from your records and that any property taxes paid in error after the execution of the lease purchase agreement, dated October 14, 2005 be returned to the following: Milliken Fire District 107 South Irene Milliken, CO 80543 ATTN: Maggie We received a follow-up telephone call from Wade of your office indicating that this exemption needed to be applied for through DOLA and the State. In reviewing the statutory scheme for property tax exemptions, it is necessary to start at CRS 39-2- That says applications must be made through the property tax administrator (i.e., through the State) for exemptions appearing in CRS 59-3-1O6 to 39-3-113, and in CRS 39-3-116. Those are basically eharftles and schools. 04-23-07 10:10AM FROM-TATONKA 8888732285 T-350 P.03/03 F-954 In other words, for all other exemptions—such as 39-3-124—we believe that we do not go through the state, but rather through the county. We would suggest the county can call the property tax manager—Stan Gueldenzopf-at DOLA to confirm this. Please let me know if you need any additional information to complete this request. Si - re u - Fiemann 107 South Irene, 1441 18°f Street, Suite 400 Denver, CO 80202 303-296-6500 04-23-07 10;10Aµ FROM-TAT0NKA 8888732285 T-350 P.01/03 F-954 ' )s FAX COVER SHEET TATONKA CAPITAL CORPORATION reemammanees PATE:04/23/07 TO: Wade PHONE: 1441 flghteenrh Srrcyr FAX: 970-304-6433 suit. FROM:Laura Denver,CO n03O4 PHONE: 303-296-6500 Phan..YO3t_t).a:rW FAX: 303-296-8200 RE: Fax:ins-L 96-n2rw CC: NUMBER OF PAGES:3 PROMISE, MESSAGE: DELIVER, ALWAYS IMPORTANT:This massage is intended only for the use of the Individual or entity to which It Is addressed and may contain Information that Is privileged and confidential. Disclosure of this intonnation is prohibited under applicable law, if the reader of this message Is not the intended recipient or the person delivering it,you are prohibited from disseminating,distributing or copying this communication. If you have received this message in error,please notify us immediately by phone and return it to us at the above address via regular postal service. Thank you for your cooperation. 04-23-07 04:39PM FROM-TAT0NKA 8888732285 T-351 P.01 F-957 FAX COVER SHEET TATONKA CAPITAL CORPORATION DATE:04/23107 TO: Wade PHONE: 1441 Eighteenth Street FAX: 970-304-6433 sniu FROM:Laura Donor,CO 40.JO2 PHONE: 3O3-296-65OO Phon 9O3-a0C-6uw FAX: 303-296-8200 RE:Lease Purchase Agreement Fez.aos z9G-new CC: NUMBER OF PAGES:28 PROMISE MESSAGE: neurfriL ALWAYS IMPORTANT:This message is Intended only for the use of the individual or entity to which it is addressed d information and may contain information that Is privileged and confidential. Disclosure of this prohibited under applicable law. if the reader of We message is not the Intended recipient or the person delivering it,you are prohibited from disseminating,dkAibudng or copying this communication. if you have received this massage In snot.,please notify us immediately by phone and return it to us at the above address via regular postai service. Thank you for your cooperation, 04-23-07 04:39PM PROM-TAT0NKA 8888732285 T-351 P.02 F-957 When Recorded Please Return to: 107 SOUTH IRENE AVE.,INC.107 South Irene Ave-, Inc. Attn: Laura Fiemann 1441 18th Street, Suite 400 Denver, Colorado 80202 LEASE PURCHASE AGREEMENT BETWEEN 107 SOUTH IRENE AVE., INC.,as Lessor AND MILLIKEN FIRE PROTECTION DISTRICT, COLORADO, as Lessee Dated as o£October 14, 2005 October 13,2005 Lease Purchase Agreement 04-23-07 04:39PM FROM-TATONKA 8888732285 T-351 P.03 F-957 • LEASE PURCHASE AGREEMENT TABLE OF CONTENTS SECTION HEADING PAGE ARTICLE I DEFINITIONS AND EXHIBITS.,- 1 Section 1.01. Definitions 1 Section 1.02. Exhibits 5 ARTICLE II REPRESENTATIONS, COVENANTS AND WARRANTIES; DISCLAIMERS 5 Section 2.01. Representations, Covenants and Warranties of the Lessee 5 Section 2.02. Representations, Covenants and Warranties of the Lessor 8 Section 2.03. Disclaimers of the Lessor 8 Section 2.04, Tax Covenants 9 ARTICLE III RENT 10 Section 3.01. Lease Payments 10 Section 3.02. Lease Payments to be Unconditional; No Abatement or Setoff 10 Section 3.03. Lease Payment Obligation after Event of Nonappropriation 10 Section 3.04. Return of Leased Property 11 Section 3.05. Damages for Failure to Make Timely Surrender of Leased Property 11 ARTICLE IV LEASE OF LEASED PROPERTY;LEASE RIGHTS AND OBLIGATIONS 11 Section 4.01. Lease of Leased Property 11 Section 4.02. Lease Term 11 Section 4.03. Net Lease 12 Section 4.04. Title to the Leased Property 12 Section 4.05. Liens 12 Section 4.06, Care and Use of Leased Property 13 Section 4.07. Possession and Enjoyment of Leased Property 13 Section 4.08. Lessee's and Lessor's Responsibilities for Leased Property 13 Section 4.09. Duty to Dismiss 13 Section 4.10. Indemnification 13 ARTICLE V LEASING THE IMPROVEMENTS 13 Section 5.01. The Improvements 13 ARTICLE VI PREPAYMENTS 15 04-23-07 04:39Pµ FROM-TAT0NKA 8888732285 T-351 P.04 F-957 Section 6.01. Option to Prepay 15 ARTICLE VII LEASE RIGHTS,ASSIGNMENT AND SUBLEASING, MORTGAGING AND SELLING 16 Section 7.01. Lease Rights 15 Section 7.02. Assignment and Subleasing by Lessee 15 Section 7.03. Restriction on Mortgage or Sale of Leased Property by the Lessee 15 ARTICLE VIII EVENTS OF DEFAULT AND EVENT OF NON-APPROPRIATION; REMEDIES 15 Section 8.01. Events of Default 15 Section 8.02. Event of Nonappropriation 16 Section 8.03. Remedies and Rights 17 Section 8.04. Election of Remedies;No Waiver of Elected Remedies 18 Section 8.05. No Additional Waiver Implied by One Waiver 18 Section 8.06. Agreement to Pay Attorneys' Fees and Expenses 18 Section 8.07. Responsibility for Hold over Lease Payments 18 Section 8.08. Redelivery of Possession of Leased Property upon Expiration of Term and Payment of Lease Payments or Purchase Price 19 ARTICLE IX RISK OF Loss; INSURANCE 19 Section 9.01. Risk of Loss 19 Section 9.02. Public Liability and Property Damage Insurance 19 Section 9.03. Fire and Extended Coverage Insurance 20 Section 9.04. Worker's Compensation Insurance 20 Section 9.05. Other Insurance and Requirements for All Insurance 20 Section 9.06. Flood Insurance 20 Section 9.07. Proceeds of Insurance 21 Section 9.08. No Waiver of Lessee's Rights Against Vendors or Contractors 11 Section 9.09. Uninsured Loss 21 . ARTICLE X ADMINISTRATIVE PROVISIONS 22 Section 10.01. Notices 22 Section 10.02. Severability 22 Section 10.03. Further Assurances and Corrective Instruments 22 Section 10.04. Applicable Law 22 Section 10.05. Lessor and Lessee Authorized Representatives 22 Section 10.06. Captions 23 Section 10.07. Binding; Counterparts 23 Section 10.08. Tax Ownership in Lessee 23 Section 10.09. Inspections Permitted 23 -ii- 04-23-07 04:39PM FROM-TAT0NKA 8888732285 T-351 P.05/37 F-957 Section 10.10. Time Is of the Essence 23 Section 10,11. No Personal Liability or Accountability 23 Section 10.12. Environmental Conditions 23 Section 10.13. Gender 24 Section 10.14. Dated Date 24 EXHIBIT A— DESCRIPTION OF THE REAL ESTATE EXHIBIT B - LEASE PAYMENT SCHEDULE AND PURCHASE PRICE EXHIBIT C - BANK QUALIFIED RIDER EXHIBIT D- INCUMBENCY CERTIFICATE EXHIBIT E - ESSENTIAL USE CERTIFICATE EXHIBIT F - QUIT CLAIM DEED 04-23-07 04:39Pµ FROM-TAT0NKA 8888732285 1-351 P.06/37 F-957 LEASE PURCHASE AGREEMENT This LEASE PURCHASE AGREEMENT, dated as of October 14, 2005 (this "Lease"), entered into by and between 107 SOUTH IRENE AVE., INC., as lessor, a Colorado nonprofit corporation whose mailing address is 1441 18th Street, Suite 400, Denver, Colorado 8O2O2 (the "Lessor"), and MILLIKEN FIRE PROTECTION DISTRICT, CoL0RADo, as lessee, a quasi- municipal corporation and political subdivision of the State of Colorado, whose mailing address is P.O. Box 130, Milliken, Colorado(the "Lessee"). WITNESSETH: WHEREAS, the Lessee has executed that certain Contract to Buy and Sell Real Estate dated as of October 5, 2005'(the "Purchase Contract"), by and between Lessor, as purchaser, and Lessee (together, the "Seller"), with respect to certain land located in the County of Weld, State of Colorado, as more particularly described in Exhibit A attached hereto and made a part hereof by this reference (the "Real Estate") and the buildings and improvements presently existing or hereafter constructed thereon (the "Improvements"), in order to develop the Real Estate for use by the Lessee as a Fire Station, The Real Estate and any Improvements are collectively referred to as the "Leased Property;" and WHEREAS, the Lessee is authorized, pursuant to Section 32-1-1001, Colorado Revised Statutes, to acquire real and personal property necessary for its essential governmental purposes; and WHEREAS, pursuant to a resolution or other official action duly adopted by its governing body, the Lessee has determined that it is in the best interest of the Lessee and its inhabitants for the Lessee to enter into and to execute and deliver this Lease and certain related documents thereto for the purpose of leasing the Leased Property from the Lessor; and WHEREAS, in exchange for the Lessor paying or causing to be paid an amount equal to $275,000.00for the payment of the Costs of the Project and the payment of Costs of Issuance, the Lessee will enter into this Lease and will pay the Lessor Lease Payments during the Lease Term as provided herein; Now, THEREFORE,the parties hereto mutually agree as follows: ARTICLE I DEFINITIONS AND EXHIBITS Section 1.01. Definitions. Unless the context otherwise specifically requires or indicates to the contrary, the following terms as used in this Lease shall have the respective meanings set forth below. 04-23-0T 04:40Pµ FROM-TATONKA 8888732285 T-351 P.07/37 F-957 "Authorized Representative" shall mean (a)with respect to the Lessor: a director of the Lessor; and(b)with respect to the Lessee: the President of the District. "Business Day" shall mean any day except Saturday, Sunday or any day on which banks located in the city in which the Lessee's offices are located are required or are authorized by law to remain closed. "Closing Date" shall mean that date on which the Lessor and the Lessee execute and deliver this Lease and the Interest Portion of Lease Payments begins to accrue. "Code" shall mean the Internal Revenue Code of 1986, as amended, and the regulations proposed or promulgated thereunder from time to time. "Conditions Precedent" shall have the meaning specified in Section 5.02 hereof. "Costs" shall mean the Costs of the Project and the Costs of Issuance and all fees and costs incidental or related thereto. "Costs of the Project" shall mean all costs with respect to the acquisition of the Leased Property. "Costs of Issuance" chall mean all items of expense directly or indirectly payable by or reimbursable to the Lessee or to the Lessor and related to the authorization, the execution and delivery of the Lease, including but not limited to printing costs, costs of preparation and reproduction of documents, filing and recording fees, all initial fees and charges of the Lessor, the fees to be paid to any placement agent, fees to be paid to any financial advisor to the Lessee, title insurance, legal fees of parties to the transaction and all initial charges and all other initial fees and disbursements contemplated by this Lease. "Event of Default" shall mean an Event of Default as described in Section 8.01 hereof. "Event of Nonappropriation" shall mean an Event of Nonappropriation as described in Section 8.02 hereof. "Fiscal Period" shall mean the fiscal year or fiscal biennium, as applicable, of the Lessee for its financial and budgeting purposes. The Lessee's Fiscal Period begins on January 1 of each calendar year and ends on the next succeeding December 31. "Funding Date" shall mean the date on which the Lessee shall have satisfied all Conditions Precedent. "Improvements" shall mean any and all buildings and other improvements and property located on the Real Estate. • -2- 04-23-07 04:40Pµ FROM-TAT0NKA 8888732285 T-351 P.08/37 F-957 "Interest Portion" shall mean, with respect to each Lease Payment, the portion thereof identified as such in the Lease Payment Schedule. "Lease" shall mean this Lease Purchase Agreement between the Lessee and the Lessor, dated as of October 14,2005, as it may be amended in accordance with its terms. "Lease Payment" shall mean the respective amounts (consisting of a Principal Portion and an Interest Portion) to be paid by the Lessee on each Lease Payment Date pursuant to Section 3.01 hereof, and identified in the Lease Payment Schedule. "Lease Payment Date" shall mean the dates identified as such in the Lease Payment Schedule, or if any such date is not a Business Day, the first Business Day preceding any such date until the Lease is paid in full. "Lease Payment Schedule" shall mean that certain Lease Payment Schedule attached hereto as Exhibit B, as it may be modified from time to time in accordance with this Lease. "Lease Rights" shall have the meaning provided in Section 7.01 hereof. "Lease Term" or "Term" shall mean the period specified in Section 4.02 hereof. "Leased Property" shall mean the Real Estate and the Improvements, collectively. "Legally Available Funds" shall mean, with respect to the Leased Property, all sums appropriated by the governing body of the Lessee in its budget as it may be approved to the extent and in the manner provided by law and as may otherwise become legally available for the purpose of paying Lease Payments. "Lessee" shall mean Millilcen Fire Protection District, Colorado, a quasi- municipal corporation and political subdivision of the State. "Lessor" shall mean 107 SOUTH IRENE AVE., INC., a Colorado nonprofit corporation, and its successors and assigns. "Optional Prepayment Date" shall mean any date specified as such in the Lease Payment Schedule. "Permitted Encumbrances" shall mean as of any particular time: (a) determined liens and charges incident to construction or maintenance now or hereafter filed on record that are being contested in good faith and have not proceeded to judgment,provided that the Lessee shall have set aside adequate reserves with respect thereto; -3- 04-23-07 04:40Pµ FROM-TATONKA 8888732285 T-351 P.09/37 F-957 (b) the lien of taxes and assessments that are not delinquent; (c) the lien of taxes and assessments that are delinquent but the validity of which is being contested in good faith and with respect to which the Lessee shall have set aside adequate reserves unless, in the opinion of independent counsel, that thereby any of the Leased Property or the interest of the Lessor may be in danger of being lost or forfeited; (d) minor defects and irregularities in the title to the Real Estate, in the opinion of independent counsel, that do not in the aggregate materially impair the use of the Leased Property for the purposes for which it is or may reasonably be expected to be held; (e) easements, exceptions or reservations for the purpose of pipelines, telephone lines, telegraph lines, power lines and substations, roads, streets, alleys, highways, railroad purposes, drainage and sewerage purposes, dikes, canals, materials, ditches, the removal of oil, gas, coal or other minerals, and other like purposes, or for the joint or common use of real property, facilities and equipment that the Lessee certifies in writing do not materially impair the use of the Leased Property for the purposes for which it is or may reasonably be expected to be held; (f) rights reserved to or vested in any municipality or governmental or - other public authority to control, to regulate or to use in any manner any portion of the Real Estate that do not materially impair the use of the Leased Property for the purposes for which it is or may reasonably be expected to be held; (g) any obligations or duties affecting any portion of the Leased Property or any municipality or governmental or other public authority with respect to any right,power, franchise,grant, license or permit; (h) present or future zoning laws and ordinances; (i) the rights created under this Lease; and (j) any exceptions that are acceptable to the Lessor and are noted in the Title Insurance Policy delivered with respect to this transaction. "Principal Portion" shall mean, with respect to each Lease Payment, the portion thereof identified as such in the Lease Payment Schedule. "Purchase Price" shall mean, as of any Optional Prepayment Date, the amount designated as such in the Lease Payment Schedule. "Real Estate" shall mean the land described in Exhibit A to this Lease. -4- 04-23-07 04:40PM1 FROM-TAT0NKA 8888732285 T-351 P.10/37 F-957 "Resolutions" shall mean the resolutions or other official action adopted by the governing body of the Lessee authorizing this Lease. "Special Counsel" shall mean any attorney at law or any firm of attorneys of nationally recognized standing in matters pertaining to the federal tax exemption of interest on obligations issued by states and political subdivisions thereof and duly admitted to practice law before the highest court of any state. "Stare" shall mean the State of Colorado. "State and Federal Laws" shall mean the constitution and the laws of the State, any ordinance, rule or regulation of any agency or political subdivision of the State, any law of the United States and any rule or regulation of any federal agency. "Termination Date" shall mean the day prior to the first day of the Fiscal Period for which an Event of Nonappropriation,as set forth in Section 8.02 hereof,has occurred. "Title Insurance Policy" shall mean the lender's policy of title insurance, with extended coverage and such endorsements as the Lessor shall reasonably require, naming the Lessor or its assigns as the insured and issued on the date hereof by Land Title Guaranty Company in connection with the Real Estate. Section 1.02. Exhibits. The following Exhibits are attached to this Lease and by this reference are made a part of this Lease: EXHIBIT A: LEGAL DESCRIPTION OF THE REAL ESTATE EXHIBIT B: LEASE PAYMENT SCHEDULE AND PURCHASE PRICE EXHIBIT C: BANK QUALIFIED RIDER ExuBIT D: INCUMBENCY CERTIFICATE EXHIBIT E: ESSENTIAL USE CERTIFICATE EXHIBIT F: QUIT CLAIM DEED ARTICLE II REPRESENTATIONS, COVENANTS AND WARRANTIES; DISCLAIMERS Section 2.01. Representations, Covenants and Warranties of the Lessee. The Lessee represents, covenants and warrants to the Lessor as follows: (a) The Lessee is a quasi-municipal corporation and political subdivision duly created and existing under, and governed by, the Constitution and the laws of the State -5- 04-23-07 04:40PM FROM-TAT0NKA 8888732285 T-351 P.11/37 F-957 and a political subdivision within the meaning of Section 103(c) of the Code, and will do or cause to be done all things necessary to preserve and keep in full force and effect its existence as such. (b) The Lessee is authorized under applicable State law, to acquire, lease, purchase, construct, operate, equip and maintain the Leased Property, to enter into this Lease and the transactions contemplated hereby and to carry out its obligations under this Lease. (c) The officers or officials of the Lessee executing this Lease have been duly authorized to execute and to deliver this Lease as provided in the Resolutions. (d) The Lessee has complied and will comply with all open meeting laws, all public bidding laws and all other State and Federal Laws applicable to it with respect to this Lease and the Leased Property. (e) Except as provided under the terms of this Lease, the Lessee will not transfer, lease, assign, mortgage or encumber the Leased Property or any portion thereof or take any other action contrary to the rights of the Lessor created under this Lease. (f) The Lessee has determined that a present need exists for the Leased Property, which need is not temporary or expected to diminish in the near future. The Leased Property is essential to and, will be used by the Lessee during the Lease Term only for the purpose of performing one or more governmental functions of' the Lessee consistent with the permissible scope of the Lessee's authority and will not be used in a trade or business of any person or entity unless, in the opinion of Special Counsel, such use would not adversely affect the exclusion of the Interest Portion from the gross income of the recipient thereof for federal income tax purposes. The Lessee shall cause to be executed and attached hereto an Essential Use Certificate in substantially the form attached hereto as Exhibit E. (g) Within 150 days after the end of each Fiscal Period of the Lessee during the Lease Term, the Lessee shall provide the Lessor with a copy of its audited financial statements for such Fiscal Period. (b.) The Lessee acknowledges that the Lessor is acting only as a financing source with respect to the acquisition of the Leased Property. (i) Upon the execution and delivery of this Lease, the Lessee will provide to the Lessor opinions of its legal counsel and such other certificates and documents as are customary and as reasonably may be requested by the Lessor to evidence the validity of the trancartion contemplated by this Lease, in form and substance acceptable to the Lessor. (j) During the Term of this Lease, the Lessee will comply with the requirements of the Code applicable to this Lease in order to maintain the exclusion from -6- 04-23-07 04:41Pµ FROM-TATONKA 8888732285 T-351 P.12/37 F-957 gross income for federal income tax purposes of the Interest Portion and will not take any action or fail to take any action that would cause the loss of such exclusion or cause the Interest Portion to be treated as an item of tax preference under Section 57 of the Code, insofar as it has the power and the authority to do so under applicable State law. (k) The Lessee intends, subject to the provisions of Section 8.02 hereof, to pay all Lease Payments required hereunder. The Lessee's Authorized Representative shall include in his or her budget request for each Fiscal Period the Lease Payments to become due in such Fiscal Period. The Lessee shall use all reasonable and lawful means to secure the appropriation of money for such Fiscal Period sufficient to pay the Lease Payments coming due therein. If 45 days before the end of the then current Fiscal Period, the Lease Payments have not been appropriated, then the Lessee, within 5 Business Days, shall notify in writing the Lessor of such event. (1) In any Fiscal Period within the Term of the Lease for which sufficient funds are appropriated to pay Lease Payments, the Lessee shall not transfer from the budget line item any amount designated to pay Lease Payments and shall make all Lease Payments so appropriated in a timely manner. (m) In the event that the Lessee's appropriation for Lease Payments will cause the Lessee to exceed its annual permissible budget increase, the Lessee shall use its best efforts to amend its budget so that the appropriation of Lease Payments chall fall within the annual permissible budget increase. (a) There are no lawsuits or administrative or other proceedings pending or,to the best of the Lessee's knowledge, threatened that contest the authority for, the authorization or the performance of or the expenditure of funds pursuant to this Lease other than as may be described in the opinion of counsel to the Lessee. (o) Information supplied and statements made by the Lessee in any financial statement or current budget dated or prepared prior to or contemporaneously with this Lease present such information fairly and accurately. (p) The execution and delivery by the Lessee of this Lease, and the compliance by the Lessee with the provisions thereof and hereof, will not conflict with or constitute on the part of the Lessee a violation of, breach of or default under any statute, indenture, mortgage, deed of trust, note agreement or other agreement or instrument to which the Lessee is bound, or, to the best of the Lessee's knowledge, any order, rule or regulation of' any court or governmental agency or body having jurisdiction over the Lessee or any of its activities or properties, and all consents, approvals, authorizations and orders of governmental or regulatory authorities that are required for the consummation of the transactions contemplated hereby and thereby have been obtained. (q) The Lessee agrees that it shall not authorize any action or act in any way that would cause any charge or claim to exist on the Leased Property or the Legally -7- 04-23-07 04:41PM FROM-TAT0NKA 8888732285 T-351 P.13/37 F-957 Available Funds other than Permitted Encumbrances or authorize any other action or act in any way that would adversely impact the rights of the Lessor hereunder. Section 2.02. Representations, Covenants and Warranties of the Lessor. The Lessor represents, covenants and warrants to the Lessee as follows: (a) The Lessor is a Colorado nonprofit corporation, has full and complete power to enter into this Lease, to enter into and to carry out the transactions contemplated of it hereby and to carry out its obligations under this Lease and is possessed of full power to own and to hold real and personal property and to lease the same, and has duly authorized the execution and delivery of this Lease and all other agreements, certificates and documents contemplated hereby. (b) Neither the execution and delivery of this Lease nor the fulfillment of or the compliance with the terms and the conditions hereof, nor the consummation of the transactions contemplated hereby conflicts with or results in a breach of the terms, the conditions or the provisions of any restriction, any agreement or any instrument to which the Lessor is now a party or by which the Lessor or its property is bound, constitutes a default under any of the foregoing or results in the creation or the imposition of any lien, charge or encumbrance whatsoever upon any of the property or the assets of the Lessor or upon the Leased Property, except Permitted Encumbrances. Section 203. Disclaimers of the Lessor. (a)PRIOR TO THE EXECUTION OF THE PURCHASE CONTRACT, THE LESSEE COMPLETED SUCH DUE DILLIGENCE INQUIRY WITH RESPECT TO THE LEASED PROPERTY AS DEEMED REASONABLE AND NECESSARY BY THE LESSEE, INCLUDING INQUIRIES WITH REPECT TO THE SUITABILITY OF THE PROPERTY FOR THE USES THEREOF CONTEMPLATED BY THE LESSEE. THE LESSOR BY DELIVERY HEREOF MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE FITNESS OF THE LEASED PROPERTY FOR THE USE CONTEMPLATED BY THE LESSEE UNDER THIS LEASE. (b) THE LESSOR LEASES THE LEASED PROPERTY AS IS AND, NOT BEING ANY CONTRACTOR'S OR SELLER'S AGENT, MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE MERCHANTABILITY, THE FITNESS FOR A PARTICULAR PURPOSE, THE DESIGN OR THE CONDITION OF THE LEASED PROPERTY, OR AS TO THE QUALITY, THE CAPACITY OF THE MATERIAL OR THE WORKMANSHIP OF THE LEASED PROPERTY OR THE ABILITY OF THE LEASED PROPERTY OR ANY PORTION THEREOF TO SATISFY THE REQUIREMENTS OF ANY LAW, RULE, SET OF SPECIFICATIONS OR CONTRACT THAT MAY BE APPLICABI F THERETO. It is agreed that all such risks, as between the Lessor, on the one hand, and the Lessee on the other hand, are to be borne by the Lessee at its sole risk and expense. The Lessee agrees to look solely to the seller of the Leased Property for such warranties, and all warranties made by such seller, to the degree possible, are hereby assigned to the Lessee for the Term. (C) THE LESSOR MAKES NO PATENT WARRANTIES OR REPRESENTATIONS WHATSOEVER. THE LESSOR SHALL NOT BE LIABLE FOR ANY CONSEQUENTIAL, INDIRECT OR SPECIAL DAMAGES WITH RESPECT TO THE LEASED PROPERTY. -8- 04-23-07 04:41PM FROM-TAT0NKA 8888732285 T-351 P.14/37 F-957 (d) THE PROVISIONS OF THIS SECTION ARE APPLICABLE TO ALL PORTIONS OF THE LEASED PROPERTY CONSTRUCTED,ACQUIRED OR INSTALLED UNDER THIS LEASE. Section 2.04. Tax Covenants. (a) The parties assume that the Lessor can exclude the Interest Portion of the Lease Payments from federal gross income. The Lessee covenants and agrees that it will: (i) use a book entry system to register the owner of this Lease so as to meet the applicable requirements of Section 149(a)(3) of the Code; (ii)timely file an IRS Form 8038- G with the Internal Revenue Service ("IRS") in accordance with Section 149(e) of the Code; (iii)not permit any portion of the Leased Property to be directly or indirectly used for private business use within the meaning of Section 141 of the Code including, without limitation, use by private persons or entities pursuant to contractual arrangements which do not satisfy the IRS' guidelines for permitted management contracts, as the same may be amended from time to time, so as to adversely affect the exclusion of the Interest Portion of the Lease Payments from federal gross income; and (iv) comply with all provisions and regulations applicable to excluding the Interest Portion of the Lease Payments from federal gross income pursuant to Section 103 of the Code. (b) If the Lessor either (i)receives notice, in any form, from the IRS or (ii)reasonably determines, based on an opinion of independent tax counsel selected by the Lessor and approved by the Lessee, which approval the Lessee chat! not unreasonably withhold, that the Lessor may not exclude the Interest Portion of any Lease Payment from federal gross income because the Lessee breached a covenant contained herein, such breach shall constitute an Event of Default hereunder and the Lessee shall pay to the Lessor, within 30 days after the Lessor notifies the Lessee of such determination, the amount which, with respect to Lease Payments previously paid and taking into account all penalties, fines, interest, and additions to tax (including all federal, state and local taxes imposed on the Interest Portion of all Lease Payments due through the date of such event)that are imposed on the Lessor as a result of the loss of the exclusion, will restore to the Lessor its after-tax yield on the transaction evidenced by this Lease (assuming tax at the highest marginal tax rate and taking into account the time of receipt of payments and reinvestment at the after-tax yield rate) to that which it would have been had the exclusion not been lost. Additionally, the Lessee agrees that upon the occurrence of such an event, it shall pay additional rent to the Lessor on each succeeding Lease Payment Date in such amount as will maintain such after-tax yield. The obligation of the Lessee to make any payment pursuant to this Section 2.04 is subject to Section 8.02 hereof. (c) The Lessee represents that it has not issued, and reasonably anticipates that it and its subordinate entities will not issue, tax-exempt obligations (including this Lease) of more than Ten Million Dollars ($10,000,000.00) during the current calendar year; hereby designates this Lease as a "qualified tax-exempt obligation" within Section 265(b)(3) of the Code; and agrees that it and its subordinate entities will not designate more than Ten Million Dollars ($10,000,000.00) of its obligations as "qualified tax-exempt obligations" during the current calendar year. -9- 04-23-07 04:42PM FROM-TAT0NKA 8888732285 T-351 P.15/37 F-957 ARTICLE III RENT Section 3.01. Lease Payments. The Lessee agrees to pay to the Lessor, but solely from Legally Available Funds and subject to the terms and conditions of this Lease (including Section 8.02 hereof), as rent for the Leased Property the total amount of all Lease Payments on the respective Lease Payment Dates. In the event that any Lease Payment is not received by the Lessor on or before the due date thereof, Lessee agrees to pay a late charge determined on the basis of accrued interest on the delinquent amount at the raw of one percent (1%) per month (unless a lesser amount is required by law) from the date of delinquency to the date payment is received by the Lessor. THE LESSOR AND THE LESSEE UNDERSTAND AND INTEND THAT THE OBLIGATION OF THE LESSEE TO PAY THE ANNUAL CHARGES HEREUNDER CONSTITUTES A CURRENT EXPENSE OF THE LESSEE PAYABLE EXCLUSIVELY FROM THE LESSEE'S FUNDS AND SHALL NOT IN ANY WAY BE CONSTRUED TO BE A GENERAL OBLIGATION INDEBTEDNESS OR OTHER MULTIPLE FISCAL YEAR FINANCIAL OBLIGATION WHATSOEVER OP THE LESSEE, THE STATE OR ANY AGENCY, DEPARTMENT OR POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF SECTIONS 1, 2, 3, 4 OR 5 OF ARTICLE XI, OR OF SECTION 20 OF ARTICLE X, OF THE COLORADO CONSTITUTION, OR ANY OTHER CONSTITUTIONAL OR STATUTORY LIMITATION OR REQUIREMENT APPLICABLE TO THE LESSEE CONCERNING THE CREATION OF INDEBTEDNESS. THE LESSEE HAS NOT PLEDGED THE FULL FAITH AND CREDIT OF THE LESSEE OR THE STATE OR ANY AGENCY, DEPARTMENT OR POLITICAL SUBDIVISION THEREOF, TO THE PAYMENT OF LEASE PAYMENTS HEREUNDER, AND THIS LEASE SHALL NOT DIRECTLY OR CONTINGENTLY OBLIGATE THE LESSEE OR THE STATE OR ANY AGENCY, DEPARTMENT OR POLITICAL SUBDIVISION THEREOF, TO APPLY MONEY TO,OR LEVY OR PLEDGE ANY FORM OF TAXATION TO, PAYMENT OF THE LEASE PAYMENTS HEREUNDER. Section 3.02. Lease Payments to be Unconditional; No Abatement or Setoff. Except as provided in Section 8.02 hereof, the obligation of the Lessee to pay Lease Payments when due shall be absolute and unconditional in all events. Notwithstanding any dispute between the Lessee and the Lessor, any contractor, the seller of the Leased Property, or any other person, the Lessee shall pay all Lease Payments when due and shall not withhold any Lease Payment pending final resolution of such dispute, nor shall the Lessee assert any right of set-off or counterclaim against its obligation to pay Lease Payments when due. The Lessee's obligation to pay Lease Payments during the Lease Term shall not be abated through accident or unforeseen circumstances. However, nothing herein shall be construed to release the Lessor from the performance of its obligations hereunder, and if' the Lessor should fail to perform any such obligation, the Lessee may institute such legal action against the Lessor as the Lessee may deem necessary to compel the performance of such obligation or to recover damages therefor. Section 3.03. Lease Payment Obligation after Event of Nonappropriation. Notwithstanding an Event of Nonappropriation, as provided in Section 8.02 hereof, and the termination of the Lease Term, as provided in Section 4.02 hereof, the Lessee's obligation to pay Lease Payments and any other amounts whatsoever due to the Lessor prior to the Termination Date solely from Legally Available Funds shall continue until such obligations have been paid in full. -10- 04-23-07 04:42Pµ FROM-TATONKA 8888732285 T-351 P.16/37 F-957 Section 3.04. Return of Leased Property. Upon the termination of the Lease Term without the payment of all Lease Payments due and unpaid and all other amounts whatsoever due hereunder, whether at or prior to the stated Lease Payment Date, the Lessee immediately shall surrender possession of the Leased Property peacefully and properly to the Lessor in the condition,the repair, the appearance and the working order required under this Lease. The Lessor's rights in and to the Leased Property thereafter shall be governed by the terms and the conditions of this Lease, and the Lessor may lease, sublease or sell its rights in the same in such manner as it sees fit, not inconsistent with the terms of this Lease. In the event that the I.eaced Property shall be leased or subleased or the Lessor's rights therein shall be sold, the amounts received from such lease, sublease or sale of Lessor's rights shall be applied in the following order of priority: (i) against any costs, fees or expenses incurred by the Lessor in connection with any such lease, sublease or sale of the Leased Property, (ii) against any amounts, other than Lease Payments, due from the Lessee to the Lessor under this Lease, and (iii) against any Lease Payments then due or thereafter to become due under this Lease. In the event that all amounts set forth in the immediately preceding sentence have been paid in full, then all further proceeds of any such lease or sublease shall be the property of the Lessee. Section 3.05. Damages for Failure to Make Timely Surrender of Leased Property. If after an Event of Nonappropriation the Lessee has not delivered possession of the Leased Property to the Lessor in accordance with Section 3.04 hereof,the Lessee shall be responsible for the payment of damages in an amount equal to the amount of the Lease Payments thereafter stated to come due under the Lease Payment Schedule that are attributable to the number of days during which the Lessee fails to take such actions. ARTICLE IV LEASE OF LEASED PROPERTY; LEASE RIGHTS AND OBLIGATIONS Section 4.01. Lease of Leased Property. The Lessor hereby leases and sells the Leased Property to the Lessee, and the Lessee hereby leases and purchases the Leased Property from the Lessor, on the terms and subject to the conditions set forth in this Lease. Section 4.02. Lease Term. The Term of this Lease shall commence on the Closing Date. The Term of this Lease will terminate upon the occurrence of the first of the following events: (a) an Event of Nonappropriation and the termination by the Lessee of its obligation to make any further Lease Payments in accordance with Section 8.02 hereof; (b) an Event of Default,in accordance with Section 8.01 hereof,by the Lessee and the Lessor's election to terminate this Lease pursuant to Section 8.03 hereof; or (c) the payment by the Lessee of an amount equal to all Lease Payments stated to be paid by the Lessee hereunder, plus all other amounts whatsoever due hereunder. -11- 04-23-07 04:42PM FROM-TAT0NKA 8888732285 T-351 P.17/37 F-957 Section 4.03. Net Lease. The Lessee intends the Lease Payments to be net to the Lessor. The obligation of the Lessee to pay Lease Payments shall be absolute and unconditional and shall in no way be reduced, released, discharged or otherwise affected for any reason (except as set forth in Section 3.03 and Section 8.02 hereof), including without limitation (a) any defect in the condition, the quality or the fitness for use of, or the title to, any portion of the Leased Property or (b) any damage to, or abandonment, destruction, requisition or taking of any portion of the Leased Property. The Lessee shall comply with and shall pay all local, state and federal taxes, including without limitation, income, franchise, gross receipts, sales, use, documentary stamp, excise and real and personal property taxes, payments in lieu of taxes, assessments, licenses, registration fees, freight and transportation charges and any other charges imposed or liabilities incurred with respect to the ownership, the possession or the use of the Leased Property, any payment of Lease Payments or any other payments by the Lessee and any penalties, fines or interest imposed on any of the foregoing during the Lease Term, and the Lessee shall pay all reasonable expenses incurred by the Lessor in connection with all filings or recordings of any documents relating to this Lease or the Lessor's rights hereunder. This Section does not relieve the Lessee from any obligations under this Lease. The Lessor shall have the right to make any of the payments required of the Lessee, but shall not be obligated to pay the same, and shall have the right to charge such payment with interest (at a rate equal to the Lessor's cost of funds, but in no event to exceed the maximum rate permitted by applicable State law) from the due date thereof through the date of payment, with any such amounts to be paid by the Lessee solely from Legally Available Funds with the next Lease Payment due under this Lease. Section 4.04. Title to the Leased Property . During the Term of this Lease, title to the Leased Property shall remain vested in the Lessor, subject to the Lessee's rights and interests provided in this Lease. Section 4.05. Liens. (a) The Lessee 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 other than the Permitted Encumbrances. Except as expressly provided in this Article IV, the Lessee, at its own expense, promptly shall take such action as may be necessary duly to discharge or to remove any such mortgage, pledge, lien, charge, encumbrance or claim that may arise at any time. The Lessee shall reimburse the Lessor for any expense incurred by the Lessor in order to discharge or remove (and the Lessor is not obligated to take any such action) any such mortgage, pledge, lien, charge, encumbrance or claim however nothing contained herein shall impact any obligation upon the Lessor to take any such action. (b) At the Lessee's expense and in the Lessee's name, the Lessee may contest any taxes, assessments, utility and other charges and, in the event of any such contest, may permit the taxes, ascessments or other charges so contested to remain unpaid during the period of such contest and any appeal therefrom, unless the Lessor shall notify the Lessee in writing that in the opinion of an independent counsel by nonpayment of any such items,the interest of the Lessor in the Leased Property will be endangered materially or the Leased Property or any part thereof will be subject to loss or to forfeiture by the assessment of any such items, in which case the Lessee promptly shall pay such taxes, assessments or charges or shall provide the Lessor with full -12- 04-23-07 O4:42PM FROM-TATONKA 8888732285 T-351 P.18/37 F-957 security against any loss that may result from such nonpayment, in form satisfactory to the Lessor. Section 4.06. Care and Use of Leased Properly. The Lessee, at its sole expense, shall maintain the Leased Property (or the portion thereof, as the case may be), in good operating condition and appearance and shall protect it from deterioration other than normal wear and tear; shall cause the Leased Property (or any portion thereof) to be used in a proper and safe manner within its normal capacity, without abuse and in the manner contemplated by the manufacturer's or contractor's specifications and in compliance with the requirements of applicable laws, ordinances and regulations, the requirements of any warranties applicable thereto and the requirements of any insurance program required under Article IX hereof; shall cause the Leased Property (or any portion thereof, as the case may be), to be operated by or under the direction of competent persons only; and shall obtain at the Lessee's sole expense, all registrations, permits and licenses, if any, required by law for the construction and operation of the Leased Property or any portion thereof, as the case may be. In case any equipment, appliance or alteration is required to be made or installed on the Leased Property in order to comply with any applicable governmental laws, regulations, requirements and rules, the Lessee agrees to make or to install such equipment, appliance or alteration at its own cost and expense, and any such equipment, appliance or alteration shall be considered part of the Leased Property for all purposes of the Lease without any further act of the Lessor or the Lessee. All modifications,repairs, alterations, replacements, substitutions, accessories and controls to any portion of the Leased Property shall be deemed part of the Leased Property for all purposes of this Lease. Any parts or accessories provided.by the Lessee in the course of repairing or maintaining the Leased Property shall be considered accessions to the Leased Property and form a part thereof. The lien created herein in the Leased Property shall attach to such accession and shall be vested immediately in the Lessor without cost or expense to the Lessor. Section 4.07. Possession and Enjoyment of Leased Property. The Lessee shall have the quiet use and enjoyment of the Leased Property and shall peaceably and quietly have, hold and enjoy the Leased Property during the Lease Term, without suit, trouble or hindrance from the Lessor, except as expressly set forth in this J se. Section 4.08. Lessee's and Lessor's Responsibilities for Leased Property. (a)The Lessee assumes all risks and liabilities for loss or damage to the Leased Property or to any portion thereof and for injury to or death of any person or damage to any property that is proximately caused by the negligent conduct of the Lessee, its officers, employees and agents whether such injury or death be with respect to agents or employees of the Lessee or of third parties, whether such property damage be to the Lessee's property or the property of others and whether or not such risks or liabilities are covered by insurance. The Lessee hereby assumes responsibility for and agrees, to the maximum extent permitted by law, to reimburse the Lessor for all liabilities, obligations, losses, damages, penalties, claims, actions, costs and expenses (including reasonable attorney's fees) of whatsoever kind and nature including, but not limited to, those relating to bidding procedures undertaken in connection with the Leased Property, imposed on, incurred by or asserted against the Lessor that in any way relate to or arise out of a claim, suit or proceeding related to the Leased Property and the operation and maintenance thereof, but excluding gross negligence or willful misconduct of the Lessor. -13- 04-23-07 04:43Pµ FROM-TAT0NKA 8888732285 T-351 P.19/37 F-957 (b) THE LESSOR SHALL NOT BE RESPONSIBLE FOR ANY DEFECTS, WEAR AND TEAR OR GRADUAL DETERIORATION OR LOSS OF SERVICE OR USE OF THE LEASED PROPERTY OR ANY PORTION THEREOF, The Lessor shall not be liable to the Lessee or to anyone else for any liability, injury, claim, loss, damage or expense of any kind or nature caused directly or indirectly by the inadequacy of the Leased Property or any portion thereof; any interruption of use or loss of service, use or performance of the Leased Property or any portion thereof or other consequence or damage, whether or not resulting directly or indirectly from any of the foregoing except to the extent that any of the foregoing is a direct and proximate result of the willful misconduct or gross negligence of the Lessor. Section 4.09. Duty to Dismiss. The Lessee hereby agrees to use its best efforts, at its own expense, to have the Lessor dismissed from any lawsuit brought by any party arising out of or in any way relating to this Lease or the ownership, rental, possession, operation, condition, sale or return of the Leased Property but only to the extent that such suit does not arise out of a willful or grossly negligent act of the Lessor. This covenant by the Lessee to cooperate and to use its best efforts to dismiss the Lessor from any such action shall include the Lessor's successors and assigns and its agents, employees, officers and directors. In the event that despite compliance with this covenant the Lessor is not dismissed from such action, the Lessor shall have the right to appear in its own name in the defense of such claim with its reasonable legal expenses to be paid by the Lessee and with the cooperation of the Lessee. Section 4.10. Indemnification. To the extent permitted by the laws and the Constitution of the State as in effect from time to time during the Lease Term, the Lessee hereby assumes and agrees to indemnify, protect, save and keep harmless the Lessor, its agents and employees, from and against any and all losses, damages, injuries, claims, demands and expenses, including reasonable legal expenses, of whatsoever kind and nature, arising on account of (1) the acquisition or financing of the Leased Property, (2)the possession, renovation, maintenance, use or condition of the Leased Property (by whomsoever used), or (3)the damage, destruction, return, surrender, sale or other disposition of the Leased Property. It is understood and agreed, however, that the Lessor shall give the Lessee prompt notice of any claim or liability hereby indemnified against and that the Lessee shall be entitled to control the defense thereof, so long as the Lessee is not in default hereunder. ARTICLE V FINANCING THE COSTS OF THE PROJECT Section 5.01. Financing the Costs . The Lessor will advance funds for the payment of Costs as herein provided: (a) For the purpose of paying Costs of the Project, the Lessee hereby directs the Lessor (which direction the Lessor hereby accepts) to pay to the Seller $275,000.00 for the Leased Property. Such payment shall be made to the title company issuing the Title Insurance Policy, subject to satisfaction of the conditions for disbursal specified in Section 5.02 hereof. -14- 04-23-07 04:43PM FROM-TATONKA 8888732285 T-351 P.20/37 F-957 (b) For the purpose of paying Costs of Issuance, the Lessor hereby agrees to advance funds as directed by the Lessee,not to exceed $25,000.00. Section 5.02. Disbursements. Notwithstanding anything contained herein to the contrary, the Lessor shall not disburse funds pursuant to Article 5(a)unless and until Lessee shall have delivered to Lessor the following items, each in form and substance acceptable to the Lessor(collectively, the "Conditions Precedent"): (1) evidence reasonably satisfactory to Lessor that Lessee has complied with the insurance requirements set forth in Article IX hereof; • (2) an Environmental Assessment Report with respect to the Real Estate; (3) the Title Insurance Policy; (4) a survey of the Real Estate locating any structures thereon,waived; (5) an appraisal of the real estate indicating that the value thereof is not less than the amount specified in Section 5.01 hereof; (6) an executed Purchase Contract In the event that Lessee has not performed each of the Conditions Precedent set forth in this Section 5.02 prior to December 1, 2005, at Lessor's option, the transaction contemplated hereby shall terminate and Lessor shall be under no obligation to advance any additional funds hereunder. In addition, at Lessor's demand Lessee shall pay to Lessor within 15 days of such demand, the Unwind Price. As used herein, the "Unwind Price" shall mean $3,500, plus an amount equal to Costs of Issuance disbursed pursuant to Section 5.01(a) hereof,plus interest on the amount specified in Section 5.01(a) and 5.01(b) hereof from the Closing Date to the date of receipt of the Unwind Price at the rate used in computing the Lease Payments. ARTICLE VI PREPAYMENTS Section 6.01. Option to Prepay. The Lessee shall have the option to prepay and to purchase the Lessor's interest in the Leased Property in whole on any Optional Prepayment Date by paying the Purchase Price set forth in the Lease Payment Schedule plus all other amounts whatsoever due hereunder. -15- 04-23-07 04:43PM FROM-TATONKA 8888732285 T-351 P.21/37 F-957 ARTICLE VII LEASE RIGHTS,ASSIGNMENT AND SUBLEASING,MORTGAGING AND SELLING • Section 701. Lease Rights. This Lease and any or all of the Lessor's rights and interests hereunder including, without limitation, the right to receive the Lease Payments and the Lessor's rights as a Lessor with respect to the Leased Property created hereunder (collectively referred to herein as the "Lease Rights") and the Lessor's right, title and interest in and to the Leased Property shall be vested in the Lessor throughout the Lease Term. Section 7.02. Assignment and Subleasing. (a)This Lease may not be assigned or otherwise transferred by the Lessee without the prior written consent of the Lessor in each instance, except that the Lessee may sublease the Leased Property in accordance with Section 5.01 hereof. (b) The Lessor's right, title and interest in, to and under this Lease or the Leased Property may be assigned and reassigned in whole or in part to one or more assignees or subassignees by the Lessor and,to the extent of its interest, without the necessity of obtaining the consent of the Lessee; provided that any assignment shall not be effective against the Lessee until the Lessee has received written notice, signed by the assignor, of the name, address and tax identification number of the assignee. The Lessee shall retain all such notices as a register of all assignees and shall make all payments to the assignee or subassignee designated in such register. The Lessee agrees to execute all documents, including notices of assignment that may be reasonably requested by the Lessor or any assignee to protect its interests in this Lease. Section 7 03. Restriction on Mortgage or Sale of Leased Property by the Lessee. The Lessee shall not mortgage, sell, assign, transfer or convey the Leased Property or any portion thereof during the Term of this Lease except as provided in Section 5.01 hereof without the prior written consent of the Lessor in each instance. ARTICLE VIII EVENTS OF DEFAULT AND EVENT OF NON-APPROPRIATION; REMEDIES Section 8.01. Events of Default. An Event of Default hereunder means the occurrence of any one or more of the following events: (a) The Lessee fails to make any Lease Payment or any portion thereof as it becomes due; (b) The Lessee fails to perform or to observe any other covenant, condition or agreement to be performed or observed by it hereunder and such failure is not cured within 30 days after written notice thereof by the Lessor;provided, however, that if such observance or performance requires work to be done, actions to be taken or conditions to be remedied, which by their nature cannot reasonably be accomplished within such 30-day period, if the Lessee shall commence such observance or performance within such -16- 04-23-07 04:44P1d FROM-TATONKA 8888732285 T-351 P.22/37 F-957 period and shall be proceeding diligently with respect thereto, then the fact that the same shall not have been corrected during such period shall not constitute an Event of Default; provided,further, that such default shall be cured within 90 days of such notice; (c) The Lessee becomes insolvent, admits in writing its inability to pay its debts as they mature or applies for, consents to or acquiesces in the appointment of a trustee, receiver or custodian for the Lessee or for a substantial part of its property; or in the absence of such application, consent or acquiescence, a trustee, a receiver or a custodian is appointed for the Lessee or a substantial part of its property; or any bankruptcy, reorganization, debt arrangement, moratorium, any proceeding under bankruptcy or insolvency law or any dissolution or liquidation proceeding is instituted by or, if permitted by law, against the Lessee and, if instituted against the Lessee, is consented to or acquiesced in by the Lessee; (d) The discovery by the Lessor that any material statement, representation or warranty made by the Lessee in this Lease, or in any writing delivered by the Lessee pursuant thereto or in connection herewith is false, misleading or erroneous in any material respect. An Event of Nonappropriation shall not be an Event of Default under this Lease. Upon the occurrence of an Event of Default, the Lessee shall provide prompt written notice thereof to the Lessor. Section 8,02. Event of Nonappropriation. An "Event of Nonappropriation" shall be determined to have occurred if the governing body of the Lessee shall determine not to appropriate or shall be unable to appropriate amounts sufficient to make Lease Payments coming due in a Fiscal Period. Upon the occurrence of an Event of Nonappropriation, the Lessee shall notify the Lessor, in writing, within 60 days prior to the end of the then current Fiscal Period,the Lease Tenn shall terminate effective upon the Termination Date and the Lessee, in this sole event, shall not be obligated to make any further Lease Payments beyond such Termination Date other than from Legally Available Funds. In the Event of Nonappropriation under this Section 8.02, all obligations of the Lessee to make payments of Lease Payments that otherwise would be due hereunder after the Termination Date'shall cease and the Lessor shall have the rights set forth in Section 8.03(b)hereof. In no event shall an Event of Nonappropriation, as described in this Section 8.02, constitute an Event of Default under this Lease. Section 8.03, Remedies and Rights. (a) Remedies Available upon an Event of Default. (i) Real Estate and Improvements. Whenever any Event of Default shall have happened and shall be continuing, the Lessor shall have the right, at its option and without any further demand or notice, to take one or any combination of the following remedial steps: • -17- 04-23-07 04:44Pµ FROM-TATONKA 8888732285 T-351 P.23/37 F-957 (A) With or without terminating this Lease, re-enter and take possession of the Real Estate and the Improvements and exclude the Lessee from using them; provided, however, that if this Lease has not been terminated, the Lessor shall return possession of the Real Estate and the Improvements to the Lessee when the Event of Default is cured; and provided,further, that the Lessee shall continue to be responsible for the Lease Payments due during the Fiscal Period then in effect; or (B) With or without terminating this Lease, re-enter and take possession of the Real Estate and the Improvements and use, sublease or sell the Lessor's interest in the Real Estate and the Improvements or any part thereof in accordance with Section 3.04 hereof, holding the Lessee liable for the difference between (i)the rent and other amounts paid by a sublessee pursuant to such sublease, if any (net of expenses incurred in subleasing the Real Estate and the Improvements), and (ii) the balance of the Lease Payments owed by the Lessee during its then current Fiscal Period, which amount payable hereunder shall be limited to Legally Available Funds; provided, however, that nothing contained herein shall impose an obligation upon the Lessor to sublease or sell the Lessor's interest in the Leased Property, but that if subleased or sold it shall be done in a commercially reasonable manner, and provided that any excess proceeds from such disposition shall be applied in accordance with the provisions of Section 3.04 hereof. (ii) Other. The Lessor shall have the right to take whatever action at law or in equity may appear necessary or desirable to collect the Lease Payments then due and thereafter to become due during the then current Fiscal Period with respect to the Leased • Property or any part thereof or to enforce performance and observance of any obligation, agreement or covenant of the Lessee under this Lease. (b) Lessor's Rights upon an Event of Nonappropriation. (i) Real Estate and Improvements. The Lessor shall have the right, at its option and without any further demand or notice, to take one or any combination of the following remedial steps: (A) Re-enter and take possession of the Real Estate and the Improvements and exclude the Lessee from using them;provided that the Lessee shall continue to be responsible for the Lease Payments due during the Fiscal Period then in effect; or (B) Re-enter and take possession of the Real Estate and the Improvements and sublease or sell the Lessor's interest in the Real Estate and the Improvements or any part thereof in accordance with Section 3.04 hereof; provided, however, that nothing contained herein shall impose an obligation upon the Lessor so to sublease or sell the Lessor's interest in the Real Estate and the Improvements and provided that any excess proceeds (net of expenses incurred in -18- 04-23-07 04:44P1A FROM-TATONKA 8888732285 T-351 P.24/37 F-857 subleasing the Real Estate and the Improvements) from such disposition shall be applied in accordance with the provisions of Section 3.04 hereof. (ii) Other. The Lessor shall have the right to take whatever action at law or in equity may appear necessary or desirable to collect the Lease Payments then due and thereafter to become due during the then current Fiscal Period of the Lessee with respect to the Leased Property or any part thereof or to enforce performance and observance of any obligation, agreement or covenant of the Lessee under this Lease. (c) Lessor's Pavement. For purposes of exercising any of the foregoing remedies and rights, the Lessee hereby grants to the Lessor an easement for ingress and egress over the Real Estate upon which the Leased Property is situated, as more particularly described in Exhibit A hereto, which easement is limited to the Leased Property which is the subject of this Lease. Section 8.04. Election of Remedies; No Waiver of Elected Remedies. No failure on the part of either party to exercise and no delay in exercising any right or remedy so provided for herein shall operate as a waiver thereof, nor shall any single or partial exercise by either parry of any right or remedy so provided hereunder preclude any other right or Rather exercise of any other right or remedy provided hereunder. Section 8.05. No Additional Waiver Implied by One Waiver. In the event any agreement contained in this Lease 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, and shall not be construed to be an implied term thereof or a course of dealing between the parties hereto. Section 8.06. Agreement to Pay Attorneys' Fees and Expenses. In the event either party to this Lease should default under any of the provisions hereof and the nondefaulting party should employ attorneys or incur other expenses for the collection of moneys or the enforcement, the performance or the observance of any obligation or agreement on the part of the defaulting party herein contained, the defaulting party agrees that on demand therefor it will pay to the nondefaulting party the reasonable fee of such attorneys and such other expenses so incurred by the nondefaulting party. Section 8.07. Responsibility for Hold-Over Lease Payments. Upon termination of the Lessee's obligation to pay Lease Payments as provided in Section 8.02 hereof, the Lessee shall not be responsible for the payment of any Lease Payments coining due with respect to succeeding Fiscal Periods, but if the Lessee has not delivered possession of and title to the Leased Property to the Lessor in accordance with Section 3.04 hereof, the termination shall nevertheless be effective, but the Lessee shall be responsible for the payment of damages in an amount equal to the amount of the Lease Payments thereafter coming due under the Lease Payment Schedule that are attributable to the number of days during which the Lessee fails to deliver possession to the Leased Property. Section 8.08. Redelivery of Possession of Leased Property upon Expiration of Term and Payment of Lease Payments or Purchase Price. Upon the payment by the Lessee of(i) all Lease -19- 04-23-07 04:44Pµ FROM-TATONKA 8888732285 T-351 P.25/37 F-857 Payments due hereunder or(ii) the Purchase Price pursuant to Section 6.01 hereof,plus all other amounts whatsoever due and owing under this Lease, the Lessor shall deliver or cause to be delivered to Lessee a quit claim deed in the form attached hereto as Exhibit F in order to vest in the Lessee all of the Lessor's right, title and interest in and to the Leased Property free and clear of all liens or encumbrances created by the Lessor. The Lessee hereby agrees to accept all of Lessor's right, title and interest in and to the Leased Property as so transferred. ARTICLE IX RISK OF Loss; INSURANCE Section 9.01. Risk of Loss. The Lessee hereby assumes the entire risk of loss of the Leased Property and every portion thereof from any and every cause whatsoever, including, but not limited to, damage to or destruction of the Leased Property or any portion thereof by fire or any other casualty, or the taking of title to or the temporary use of the Leased Property or any portion thereof or of the respective interests of the Lessor or the Lessee therein under the exercise of the power of eminent domain by any governmental body de jure or de facto or by any person, firm or corporation acting under governmental authority. Section 9.02. Public Liability and Property Damage Insurance. The Lessee shall maintain or shall cause to be maintained, throughout the Term of this Lease, a standard comprehensive general liability insurance policy or policies in protection of the Lessee, the Lessor and their respective members, officers, agents and employees. Such policy or policies shall provide for indemnification of such parties against direct or contingent loss or liability for damages for bodily and personal injury, death or property damage occasioned by the operation or the ownership of the Leased Property. Such policy or policies shall provide coverage in the minimum liability limits of $1,000,000 for personal injury or death of each person and $2,000,000 for personal injury or deaths of two or more persons in a single accident or event, and in a minimum amount of$500,000 for damage to property (subject to a deductible clause of not to exceed $25,000) resulting from a single accident or event. Such public liability and property damage insurance may, however, be in the form of a single limit policy in the amount of $5,000,000 covering all such risks. Such liability insurance may be maintained as part of or in conjunction with any other liability insurance coverage carried or required to be carried by the Lessee. The net proceeds of such liability insurance shall be applied toward extinguishment or satisfaction of the liability with respect to which the net proceeds of such insurance shall have been paid. Section 9.03. Fire and Extended Coverage Insurance. The Lessee shall procure and shall maintain, or shall cause to be procured and maintained, throughout the Term of this Lease, insurance against loss or damage to any part of the Leased Property by fire or lightning, with extended coverage and vandalism and malicious mischief insurance. Such extended coverage insurance shall, as nearly as practicable, also cover loss or damage by explosion, windstorm, riot, aircraft, vehicle damage, smoke and such other hazards as are normally covered by such insurance. Such insurance shall be in an amount equal to 100% of the replacement cost of the Improvements, or the aggregate coverage of all such policies on the Leased Property shall at least equal the aggregate Principal Portion of the Lease Payments then remaining unpaid, -20- 04-23-07 04:45PM FROM-TATONKA 8888732285 T-351 P.26/37 F-957 whichever is greater (except that such insurance may be subject to deductible clauses of not to exceed S50,000 for any one loss). Such insurance may be maintained as part of or in conjunction with any other fire and extended coverage insurance carried or required to be carried by the Lessee. The net proceeds of such insurance shall be applied as provided in Section 9.07(b) hereof. Section 9.04. Worker's Compensation Insurance. If required by State law, the Lessee shall carry Worker's Compensation Insurance covering all employees on, in, near or about the Leased Property and upon request shall furnish to the Lessor certificates evidencing such coverage throughout the Term of this Lease. Section 9.05. Other Insurance and Requirements for All Insurance. All insurance required by this Article IX may be carried under a separate policy or a rider or an endorsement; shall be taken out and shall be maintained with responsible insurance companies organized under the laws of one of the states of the United States and qualified to do business in the State; shall contain a provision that the insurer shall not cancel or revise coverage thereunder without giving written notice to the Lessee and the Lessor 30 days before the cancellation or the revision becomes effective; and shall name the Lessee, the Lessor and their assigns as additional insureds or loss payees, as their interests may appear in policies evidencing any such insurance procured by it. On or before the Funding Date, the Lessee shall provide the Lessor with a certificate or certificates of the respective insurers stating that such insurance is in full force and effect. Before the expiration of any such policy, the Lessee shall furnish the Lessor satisfactory evidence that the policy has been renewed or replaced by another policy conforming to the provisions of this Article IX unless such insurance is no longer obtainable at a reasonable rate, in which event the Lessee shall notify the Lessor of this fact. The Lessee shall cause to be delivered to the Lessor on each anniversary of the Funding Date a certificate of an Authorized Representative of the Lessee satisfactory to the Lessor that the insurance policies required by this Lease are in full force and effect. Section 9.06. Flood Insurance. hi the event that any portion of the Leased Property during the Lease Term shall be located in an area for which flood insurance is required by the United States of America or the State,the Lessee shall obtain and maintain flood insurance with respect to that portion of the Leased Property in an amount equal to the lesser of the full replacement value of that portion of the Leased Property or sufficient to pay the Lease Payments under the Lease. Such flood insurance shall be provided in accordance with the rules and regulations of the United States Government. Section 9.07. Proceeds of Insurance. (a)The net proceeds of the insurance carried pursuant to the provisions of Article IX hereof,to the extent it relates to public liability insurance or worker's compensation, shall be applied toward extinguishment or satisfaction of the liability with respect to which such insurance proceeds may be paid. (b) The net proceeds of the insurance carried with respect to damage to the Leased Property pursuant to the provisions of Article IX hereof, to the extent it does not relate to public liability insurance or worker's compensation, shall be paid to the Lessor and applied as follows: • -21- 04-23-07 04:45PM FROM-TATONKA 8888732285 T-351 P.27/37 F-957 (i) If the amount of the net proceeds does not exceed $25,000 and there is no Event of Default or Event of Nonappropriation outstanding and uncured, the net proceeds shall be turned over to the Lessee and the Lessee shall either: (A)apply such proceeds to pay Lease Payments; or (B) apply such proceeds together with other Legally Available Funds of the Lessee necessary therefor, to the repair, replacement, renewal or improvement of the Leased Property; and (ii) if the amount of the net proceeds equals or exceeds $25,000 or if an Event of Default has occurred and has not been cured or an Event of Nonappropriation has occurred, the net proceeds shall be turned over to the Lessor immediately upon receipt and held in escrow by the Lessor in a special account pending receipt of written instructions from the Lessee. At its option, to be exercised within 30 days after the receipt by the Lessor of such net proceeds, or portion thereof, the Lessee shall advise the Lessor in writing that (A)the Lessee (with the consent of the Lessor if there is an Event of Default or an Event of Nonappropriation) will use such net proceeds or portion thereof for the repair, replacement, renewal or improvement of the Leased Property, or (B) such net proceeds or portion thereof will be deposited in a special account with such other funds of the Lessee as may be necessary and applied for the prepayment of the unpaid Lease Payments due under the Lease. This provision is not intended to be applicable if the Lessee itself should attempt to exercise eminent domain over the Leased Property or any interest therein. The Lessee shall be entitled to the net proceeds of any insurance, or from any eminent domain proceeding, settlement or compromise, relating to property of the Lessee not included in the Leased Property and after giving effect to the payment of all Lease Payments under the Lease. Section 9.08. No Waiver of Lessee's Rights Against Vendors or Contractors. Notwithstanding the provisions of Section 9.01 hereof, the Lessee shall not be deemed to have waived any rights or remedies it may have against any vendor or contractor with respect to the Leased Property or against the seller thereof to Lessor. Section 9.09. Uninsured Loss. In the event of any uninsured loss, the Lessee at its expense and at the Lessee's option without reimbursement from the Lessor or any diminution in the Lease Payments due with respect to the Leased Property shall either: (a)repair the Leased Property or such portion thereof, returning it to its previous condition; (b)replace the Leased Property or portion thereof with a like Leased Property or portion thereof in good operating condition and of equivalent value that shall become the Leased Property or a portion thereof, subject to this Lease; or (c) furnish to the Lessor: (1)a certificate stating that: (i)the value of the Leased Property or a portion thereof exceeds $25,000; (ii) the Lessee has determined not to repair or replace the Leased Property or the portion thereof as the case may be; and (iii)that the Leased Property or portion thereof so damaged, lost or destroyed is no longer needed for the Lessee's governmental purposes; and (2)an independent appraiser's verification that the value of the remaining portion of the Leased Property is greater than the aggregate Principal Portion of Lease Payments due under the Lease. Nothing in this Section shall alter the obligations of the Lessee under this Lease except as specifically provided herein. -22- 04-23-07 04:45Pµ FROM-TATONKA 8888732285 T-351 P.28/37 F-957 ARTICLE X ADMINISTRATIVE PROVISIONS Section 10.01. Notices. (a) Unless otherwise provided in writing, any notices to be given or to be served upon any party hereto in connection with this Lease must be in writing and may be delivered personally or by certified or registered mail. If so mailed, a notice shall be deemed to have been given and received 48 hours after a registered or certified letter containing such notice, postage prepaid, is deposited in the United States mail. If given other than by mail, a notice shall be deemed to have been given when delivered to and received by the party to whom it is addressed. Such notice shall be given to the parties at their following respective addresses or at such other address as either party hereafter may designate to the other party in writing: If to Lessor: 107 SOUTH IRENE AVE., INC. C/o Tatonka Capital Corporation 1441 18th Street, Suite 400 Denver, Colorado 80202 If to the Lessee: Milliken Fire Protection District,P.O. Box 130, Milliken, Colorado Section 10.02. Severability. In the event any 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 10.01 Further Assurances and Corrective Instruments. The Lessor and the Lessee agree that, if necessary, they will execute, acknowledge and deliver or will cause to be executed, acknowledged and delivered such supplements hereto and such thither instruments as reasonably may be required for correcting any inadequate or incorrect description of the Leased Property hereby leased or intended so to be or for carrying out the expressed intention of this Lease. Section 10.04. Applicable Law. This Lease shall be governed by and shall be construed in accordance with the laws of the State. Section 10.05. Lessor and Lessee Authorized Representatives. Whenever under the provisions of this Lease the approval of the Lessor or the Lessee is required to take some action at the request of the other, such approval of such request shall be given by an Authorized Representative of the Lessor for the Lessor and by an Authorized Representative of the Lessee for the Lessee. Any party hereto shall be authorized to rely upon any such approval or request. Section 10.06. Captions. The captions or the headings in this Lease are for convenience only and in no way define, limit or describe the scope or the intent of any provisions or sections of this Lease. -23- 04-23-07 04:48Pµ FROM-TATONKA 8888732285 T-351 P.28/37 F-957 Section 10.07. Binding; Counterparts. This Lease shall be binding upon the parties hereto only when duly executed on behalf of both the Lessee and the Lessor together; provided, however, that each set of counterparts taken together shall constitute a single agreement. Section 10.08. Tax Ownership in Lessee. The Lessor warrants and represents that it shall not at any time during the Term of the Lease claim depreciation, cost recovery deductions or tax credit for federal income tax purposes with respect to the Leased Property or a portion thereof and that it shall not take any position for federal income tax purposes that is inconsistent with the unequivocal ownership for any and all tax purposes of the Lessee. Section 10.09. Inspections Permitted. The Lessor and the Lessee, as the case may be, shall permit inspections of the Leased Property and the books and the records of the Lessee with respect thereto at all reasonable times and upon reasonable notice, subject to any legal restrictions under applicable law relating to privacy or security. Section 10.10. Time Is of the Essence. Time is of the essence for this Lease and no covenant or obligation hereunder to be performed by the Lessee may be waived except by the written consent of the Lessor, and waiver of any such covenant or obligation or a forbearance to invoke any remedy on any occasion shall not constitute or be treated as a waiver of such covenant or obligation or any other covenant or obligation as to any other occasion and shall not preclude the Lessor from invoking such remedy at any later time prior to the Lessee's cure of the condition giving rise to such remedy. Each of the Lessor's rights hereunder is cumulative to its other rights hereunder and not alternative thereto. Section 10.11. No Personal Liability or Accountability. No covenant or agreement contained in this Lease shall be deemed to be the covenant or the agreement of any present, past or future officer, agent or employee of the Lessee or the Lessor in his or her individual capacity, and neither the officers, the agents or the employees of the Lessee or the Lessor nor any official executing this Lease chat'be liable personally on this Lease or be subject to any personal liability or accountability by reason of any transaction or activity relating to this Lease. Section 10.12. Environmental Conditions. (a) Representations and Warranties. The Lessor shall not be obligated to monitor compliance of the Leased Property with applicable environmental or other laws. The Lessor shall not have any obligations or responsibility to foreclose or otherwise further involve themselves with the Leased Property under any circumstance, including any instance where either the Lessor is notified of any non-compliance of the Leased Property with applicable environmental or other laws. The Lessee represents that the Real Estate is currently in full compliance with all applicable federal, state and local environmental laws. It is expressly understood that the Lessor shall not have the right or the obligation to monitor the Lessee's compliance with environmental laws. The Lessee hereby further represents and warrants to the Lessor that (i) to the best of the Lessee's knowledge, no person or entity has ever caused or permitted and (ii) the Lessee, its officers, employees or agents shall neither ever cause or permit, Hazardous Substances (as defined below)to be generated,placed, housed, located or disposed of on, under or in the Leased Property, nor ever use the Leased Property as a dump site, permanent -24- 04-23-07 04:46Pµ FROM-TATONKA 8888732285 T-351 P.30/37 F-957 or temporary storage site or transfer station for any Hazardous Substance. The Lessee further represents and warrants to the Lessor that it shall not allow any actual or alleged violation with respect to the Leased Property of any federal, state or local statute, ordinance, rule, regulation or other law pertaining to Hazardous Substances. (b) Indemnification. To the greatest extent permitted by law, the Lessee agrees to hold harmless, indemnify and defend the Lessor and its assignees from and against any claim, demand, penalty, fee, lien, damage, loss, expense or liability resulting from (i) any breach of the representations and warranties made by it in this Section 10.12 or any failure, for any reason to comply with environmental laws, rule and regulations, including reasonable attorneys' fees and costs of, or in preparation for, any trial or appellate review, and (ii) any actual or alleged Hazardous Substance contamination, including the clean-up of Hazardous Substances from the Leased Property or any other properties resulting from any activities on the Leased Property during the Lessee's ownership, possession or control of the Leased Property which directly or indirectly result in the Leased Property or any other property being contaminated with Hazardous Substances. This indemnity shall survive the termination hereof and shall continue to inure to the benefit of the Lessor notwithstanding any assignment of its other rights hereunder, as well as any assignee of the Lessor's rights hereunder. (c) Hazardous Substance. As used herein, "Hazardous Substance" shall mean any hazardous, toxic or dangerous substances, waste or material that is or may become regulated under any federal, state or local statute, ordinance, rule, regulation or other law now or hereafter in effect pertaining to environmental protection, contamination or clean-up. Section 10.13. Gender. Use of the neuter gender herein is for purposes of convenience only and shall be deemed to mean and include the masculine or feminine gender whenever and wherever appropriate. Section 10.14. Dated Date. The use of the"dated as of date" herein is for convenience of reference only and the actual date of execution hereof by each party hereto is set forth below their respective signatures. -25- 04-23-07 04:46PM PROM-TAT0NKA 8888732285 1-351 P.31/37 F-957 • IN WITNESS WHEREoF, the Lessor has caused this Lease Purchase Agreement to be executed in its corporate name by its duly Authorized Representative, and the Lessee has caused this Lease Purchase Agreement to be executed in its name by its duly Authorized Representative, as of the date first above written but on the date set forth below. 107 SOUTH IRENE AVE., INC., as Lessor Date of Execution; //V , 2005 By N :Laura Fiemann tle:President ATTEST: [SEAL] MILLTKEN FIRE PROTECTION DISTRICT, COLORADO, as Lessee Date of Execution: , 2005 By esiden of the District ATTEST:1 ��e�a • Secretary [SEAL] -26- 04-23-07 04:46Pµ FR0IMTAT0NKA 8888732285 T-351 P.32/37 F-957 ACKNOWLEDGMENTS STATE OF COLORADO ) ) SS. COUNTY OF\S y \ ) The foregoing instrument was acknowledged before me this 13th day of October 2005, by Jerry Kilgore, as President, and Charles Ashbaugh, as Secretary, of the MILLIKEN FIRE PROTECTION DISTRICT, COLORADO. WITNESS my hand and official seal. r`\ \\ My Commission Expires:'(; 311)e 1id04 NOTARY PUBLIC /r�� TINA L. WOLPE Residing at: �e�YDV{( C+U ?i�✓Cg�2�/i CO2(t-9 J/ NOTARY PUBLIC [SEAL] STATE OF COLORADO M9 Commission Spires Mar.31.2009 STATE OF COLORADO ) � ) SS. COUNTY OF 11XPVQ/\' ) The foregoing instrument was acknowledged before me this 13th day of October 2005, by Laura Fiemann , as President and Jon J. Bauers as Secretary of 107 SOUTH IRENE AVE., INC. WITNESS my hand and official seal. /� My Commission Expires: 11.al-0 2 ki n QE; 4 . .K)re NOTARY PUBLIC" ```s.sll l llllgll �•%;-‘O P�..J.:. O�'� Residing at: 14 4 11`o" S4. 1 W_1 (1,nfer Go ¶0 34)- [SE C>.." +OTA/I f 7.% i-*F»`-Q%t$ ''�I�O l l l l ll l l O ff` 04-23-07 04:47Pµ FROM-TATONKA 8888732285 T-351 P.33/37 F-957 EXHIBIT A LEGAL DESCRIPTION OF THE REAL ESTATE The following property,located in the County of Weld, State of Colorado,more particularly described as follows: Lots 11 through 19,inclusive, Block 56, Town of Milliken, County of Weld, State of Colorado. 04-23-07 04:47Pµ FROM-TAT0NKA 8888732285 T-351 P.35/37 F-957 EXHIBIT B LEASE PAYMENT SCHEDULE AND PURCHASE PRICE DATED DATE: OCTOBER 14,2005 MILLIKEN FIRE PROTECTION DISTRICT, COLORADO Date Payment Interest Principal Balance Loan 10/14/2005 275,000.00 1 10/14/2006 36,047.42 14,437.50 21,609.92 259,095.31 2 10/14/2007 36,047.42 13,302.98 22,744.44 235,354,92 3 10/14/2008 36,047.42 12,108.90 23,938.52 210,486.86 4 10/14/2009 36,047.42 10,852.12 25,195.30 184,437.57 510/14/2010 36,047.42 9,529.37 26,518.05 157,150.93 6 10/14/2011 36,047.42 8,137.17 27,910.25 128,568.18 710/14/2012 36,047.42 6,671.88 29,375.54 98,627.75 810/14/2013 36,047.42 5,129.67 30,917.75 67,265.15 910/14/2014 36,047.42 3,506.49 32,540.93 34,412.82 10 10/14/2015 36,047.42 1,798.12 34,249.30 1.00 Grand Totals 360,474.20 85,474.20 275,000.00 LESSEE: MILLIKEN FIRE PROTECTION DisTRICT BY. 1 Pre t of the District 04-23-07 04:47PM FROM-TAT0NKA 8888732285 1-351 P.36/37 F-957 EXHIBIT F QUIT CLAIM DEED 107 SOUTH IRENE AVE., INC., whose street address is 1441 18th Street, City and County of Denver and State of Colorado, for the consideration of ten dollars($10.00) and other good and valuable consideration, in hand paid, hereby sells and quitclaims to Milliken Fire Protection District whose street address is P.O. Box 746, Milliken, Colorado, the property in the County of Weld and State of Colorado,with all its appurtenances, further described in Exhibit A hereto. Signed this_day of 107 SOUTH IRENE AVE., INC. By Its ACKNOWLEDGMENT STATE OF COLORADO ) ) ss. CITY AND COUNTY OF DENVER ) The forgoing instrument was acknowledged before me this_day of by , as of 107 SOUTH IRENE AVE., INC. WITNESS my hand and official seal. My Commission Expires: NOTARY PUBLIC Residing at: [SEAL] 04-23-07 04:47Pµ FROM-TATONKA 8888732285 T-351 P.37/37 F-957 EXHIBIT A To QUIT CLAIM DEED LEGAL DESCRIPTION OF THE REAL ESTATE The following property, located in the County of Weld, State of Colorado, more particularly described as follows: Lots 11 through 19, inclusive,Block 56, Town of Milliken, County of Weld, State of Colorado. -2 CLERK TO THE BOARD PHONE (970) 336-7215, 4225 FAX: (970) 352-0242 P.O. BOX 758 111kGREELEY, COLORADO 80632 COLORADO June 20, 2007 107 South Irene Avenue, Inc. and Milliken Fire Protection District 107 South Irene Avenue Milliken, CO 80543 RE: SCHEDULE NUMBER R6925498 Dear Property Owner: This is to advise you that the Weld County Board of Commissioners will hear your petition for abatement or refund of taxes on the property described as: MIL L11 through 19, BLK 56. The meeting is scheduled for July 23, 2007, at 9:00 a.m., in the First Floor Meeting Room, Weld County Centennial Center, 915 10th Street, Greeley, Colorado. The Assessor is recommending that the Board approve your petition. You are not required to be present at this hearing, however, this is your opportunity to have your position heard, especially if your position is opposed to the Assessor's recommendation. If you intend to submit any documentation in support of your position for this hearing, all such documentation must be submitted to the Office of the Clerk to the Board and to the Weld County Assessor's Office at least seven calendar days prior to the meeting date in order for it to be considered at the scheduled hearing. If you have any questions concerning this matter, please do not hesitate to contact Esther Gesick at (970) 336-7215, extension 4226. Sincerely, Esther E. Gesick Deputy Clerk to the Board cc: Assessor Hello