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at the earlier of (a) the exercise of the purchase option and payment of option price, or (b) the payment or defeasance of all obligations of the Authority incurred to finance the Facility, to refund such obligations or refunding obligations, or to improve the Facility. During the term of the lease, the Commission agrees to pay rental for the Facility at the rate of $1,000,000 per year. The first rental installment in the amount of $500,000 will be due on February 28, 1989. Rentals in semiannual installments of $500,000 will be due on February 28 and August 28 of each year. After the sale of the Bonds, the annual rental will be reduced to an amount equal to two times the sum of the multiple of $1,000 next highest to the highest sum of principal and interest due on any bond payment date plus $1,000, payable in equal semiannual installments. The Lease will be known as a Net Lease meaning the rent shall be absolutely net to the Authority and all other expenses in connection with the Facility shall be those of the Commission. The Commission shall be obligated to pay as its expenses, without reimbursement from the Authority, all costs of taxes and assessments, if any, and maintenance and use in connection with the Facility. The Commission, at its own expense, will carry insurance for physical loss or damage, and insurance for public I iabi I i ty and property damage. The Authority grants the Commission the right and option, on any rental payment date, upon 30 days written notice, to purchase the Facility at a price that will enable the Authority to redeem all outstanding Bonds, all premiums payable. at the time of redemption, and accrued and unpaid interest. At .the end of the term of the Lease and the full .discharge of all obligations pertaining thereto, the Authority will convey title of the Facility to the Commission. For greater detail please refer to the actual Lease Agreement provided in Appendix C • of this Official Statement. Summary of Selected Provisions of the Trust Agreement A Trust Agreement was executed on June I, 1988 between the Authority and First Interstate Bank of Northern Indiana, N. A., the Trustee, in which Agreement the Authority pledges and assigns the Lease and the Pledged Funds (as defined in Appendix D of this Official Statement) to the Trustee. The Trust Agreement creates a continuing pledge by the Authority to the bondholders to pay the debt service on all bonds from the Pledged Funds until the principal sum is fully paid. The Authority additionally pledges the lease rentals of the Stadium Facility and pledges to preserve good and indefeasible title to all such property. The Authority covenants to pay all lawful taxes, charges, and assessments levied upon the Facility and to operate and maintain the property in good repair, working order and condition. If the Authority fails to pay any tax assessment or other charge, the Trustee may pay such charges with interest thereon at the highest rate of interest on any of the Bonds when sold, which shall constitute an additional indebtedness of the Authority secured by the lien of the Trust Agreement prior and paramount to the lien of the Bonds. Per the Lease Agreement, the Commission is obligated to pay, as its expenses, all casts of taxes and assessments, and maintenance and use related to the Facility. The Authority covenants to carry insurance on the Facility equal to 100% of the full replacement cost of the Facility and carry value insurance equal to the full rental value of the Facility for two years against physical loss or damage. If the Authority neglects to obtain such insurance, the Trustee may procure such insurance, adding on interest at the highest rate of interest on any of the Bonds when sold, which shall be repaid by the -3 -