BFC GUARANTY CORP
S-4, 1996-12-16
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<PAGE>

    As filed with the Securities and Exchange Commission on December 16, 1996
                                                     REGISTRATION NO. 33-
- -------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C.  20549
                        --------------------------------

                                    FORM S-4
                             REGISTRATION STATEMENT
                        UNDER THE SECURITIES ACT OF 1933

                        --------------------------------

                               BFC GUARANTY CORP.
             (Exact name of Registrant as specified in its charter)

                        --------------------------------


         DELAWARE                      6748                    52-1994622
 (State of Incorporation)  (Primary Standard Industrial     (I.R.S. Employer
                            Classification Code Number)  Identification Number)

                               BFC GUARANTY CORP.
                       1455 PENNSYLVANIA AVENUE, SUITE 230
                              WASHINGTON, DC 20004


                                 (202) 639-0512
               (Address, including zip code, and telephone number,
        including area code, of Registrant's principal executive offices)


                                  ROGER BAILEY
                               BFC GUARANTY CORP.
                       1455 PENNSYLVANIA AVENUE, SUITE 230
                              WASHINGTON, DC 20004


                                 (202) 639-0512
                (Name, address, including zip code, and telephone
               number, including area code, of agent for service)

                                    COPY TO:

                             THOMAS J. MANCUSO, ESQ.
                   BROWNSTEIN HYATT FARBER & STRICKLAND, P.C.
                       410 SEVENTEENTH STREET, 22ND FLOOR
                                DENVER, CO 80202
                                 (303) 534-6335

     APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.

     If any of the securities being registered on this Form are being offered
with the formation of a holding company and there is compliance with General
Instruction G, check the following box:  / /

<TABLE>
<CAPTION>

                                                   CALCULATION OF REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
                                                                       PROPOSED            PROPOSED MAXIMUM
           TITLE OF EACH CLASS OF                AMOUNT TO BE      MAXIMUM OFFERING    AGGREGATE OFFERING PRICE       AMOUNT OF
         SECURITIES TO BE REGISTERED              REGISTERED      PRICE PER NOTE (1)               (2)             REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------------------------------------
<S>                                              <C>              <C>                 <C>                          <C>

   Guarantees of Public Facilities Revenue
            Bonds, Series 1996 B                 $66,975,000             100%                 $66,975,000             $20,296
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)  Estimated solely for the purposes of calculating the registration fee
     pursuant to Rule 457.

                        --------------------------------

     THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR 
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT 
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS 
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH 
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION 
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING 
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.

- -------------------------------------------------------------------------------

<PAGE>

                              CROSS-REFERENCE SHEET

                    PURSUANT TO ITEM 501(b) OF REGULATION S-K
                  SHOWING LOCATION IN PROSPECTUS OF INFORMATION
                     REQUIRED BY ITEMS OF PART I OF FORM S-4


           REGISTRATION STATEMENT                    CAPTION OR LOCATION IN
           ITEM NUMBER AND CAPTION                         PROSPECTUS
- ---------------------------------------------     ------------------------------

 1.Forepart of Registration Statement
   and Outside Front Cover Page of
   Prospectus  . . . . . . . . . . . . . . .      Outside Front Cover Page


 2.Inside Front and Outside Back Cover
   Pages of Prospectus . . . . . . . . . . .      Inside Front Cover Page;
                                                  Outside Back Cover Page

 3.Risk Factors, Ratio of Earnings to Fixed
   Charges and Other Information . . . . . .      Prospectus Summary; Risk
                                                  Factors; Selected Historical
                                                  Financial Data

 4.Terms of the Transaction  . . . . . . . .      Outside Front Cover Page;
                                                  Prospectus Summary; The
                                                  Exchange Offer; Description
                                                  of Exchange Bonds


 5.Pro Forma Financial Information . . . . .      Pro Forma Financial Data

 6.Material Contracts with the Company Being
   Acquired  . . . . . . . . . . . . . . . .      Inapplicable


 7.Additional Information Required for
   Reoffering by Persons and Parties Deemed
   to be Underwriters  . . . . . . . . . . .      Inapplicable

 8.Interests of Named Experts and
   Counsel . . . . . . . . . . . . . . . . .      Legal Matters; Independent
                                                  Auditors

 9.Disclosure of Commission Position on
   Indemnification for Securities Act
   Liabilities . . . . . . . . . . . . . . .      Inapplicable


10.Information with Respect to S-3
   Registrants . . . . . . . . . . . . . . .      Inapplicable

11.Incorporation of Certain Information by
   Reference . . . . . . . . . . . . . . . .      Inapplicable


12.Information with Respect to S-2 or S-3
   Registrants . . . . . . . . . . . . . . .      Inapplicable

13.Incorporation of Certain Information by
   Reference . . . . . . . . . . . . . . . .      Inapplicable

14.Information with Respect to Registrants
   other than S-2 or S-3 Registrants . . . .      Outside Front Cover Page;
                                                  Prospectus Summary; Risk
                                                  Factors; Use of Proceeds;
                                                  Capitalization; Selected
                                                  Historical Financial Data;
                                                  Management's Discussion and
                                                  Analysis of Financial
                                                  Condition and Results of
                                                  Operations; The Project; The
                                                  Authority; The Districts;
                                                  Credit Enhancement;
                                                  Management; Security
                                                  Ownership; Certain
                                                  Transactions

15.Information with Respect to S-3
   Companies . . . . . . . . . . . . . . . .      Inapplicable


<PAGE>

           REGISTRATION STATEMENT                    CAPTION OR LOCATION IN
           ITEM NUMBER AND CAPTION                         PROSPECTUS
- ---------------------------------------------     ------------------------------

16.Information with Respect to S-2 or S-3
   Companies . . . . . . . . . . . . . . . .      Inapplicable

17.Information with Respect to Companies
   Other than S-2 or S-3 Companies . . . . .      Inapplicable


18.Information if Proxies, Consents or
   Authorizations are to be Solicited  . . .      Inapplicable

19.Information if Proxies, Consents or
   Authorizations are not to be Solicited or
   in an Exchange Offer  . . . . . . . . . .      Management; Security
                                                  Ownership; Certain
                                                  Transactions

<PAGE>

                                EXPLANATORY NOTE

     The legend along the left side of the front cover of the Prospectus will be
printed in red on the final version of the Prospectus.

<PAGE>

                 SUBJECT TO COMPLETION, DATED DECEMBER 16, 1996

PROSPECTUS
__________, 1997


                 CASTLE ROCK RANCH PUBLIC IMPROVEMENTS AUTHORITY
                               BFC GUARANTY CORP.


   OFFER TO EXCHANGE GUARANTEED PUBLIC FACILITIES REVENUE BONDS, SERIES 1996 B
    FOR ANY AND ALL OUTSTANDING GUARANTEED PUBLIC FACILITIES REVENUE BONDS,
                                   SERIES 1996


THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
_______________, 1997 UNLESS EXTENDED


     Castle Rock Ranch Public Improvements Authority, a Colorado nonprofit 
corporation (the "Authority"), hereby offers (the "Exchange Offer"), upon the 
terms and conditions set forth in this Prospectus (the "Prospectus") and the 
accompanying Letter of Transmittal (the "Letter of Transmittal"), to exchange 
$5,000 principal amount of its Public Facilities Revenue Bonds, Series 1996 B 
(the "Exchange Bonds"), which will have been registered under the Securities 
Act of 1933, as amended (the "Securities Act") pursuant to a Registration 
Statement of which this prospectus is a part, for each $5,000 principal 
amount of its outstanding Public Facilities Revenue Bonds, Series 1996 (the 
"Bonds"), of which $66,975,000 principal amount is outstanding.  The Bonds 
are, and the Exchange Bonds will be, guaranteed (the "Credit Enhancement") by 
BFC Guaranty Corp. (the "Credit Enhancement Provider") as described herein.  
The form and terms of the Exchange Bonds are the same as the form and term of 
the Bonds (which they replace) except that the Exchange Bonds will bear a 
Series B designation and, because the Credit Enhancement will have been 
registered under the Securities Act, the Exchange Bonds will not bear legends 
restricting their transfer and will not contain certain provisions relating 
to an increase in the interest rate which were included in the terms of the 
Bonds in certain circumstances relating to the timing of the Exchange Offer.  
The Exchange Bonds will evidence the same debt as the Bonds (which they 
replace) and will be issued under and be entitled to the benefits of the 
Indenture (the "Indenture") dated as of March 1, 1996 between the Authority 
and SouthTrust Bank of Alabama, National Association (the "Trustee") 
governing the Bonds.  See "The Exchange Offer" and "Description of Exchange 
Bonds."

     The Authority has not issued, and has no current plans to issue, any 
other indebtedness.  The Exchange Bonds will be limited obligations of the 
Authority payable solely from the funds held under the Indenture, Revenues 
(as defined herein) of the Authority and payments under the Credit 
Enhancement.  The Authority has executed a Deed of Trust (as defined herein) 
to provide security to the Trustee for the benefit of the bondholders and to 
provide security to the Credit Enhancement Provider with regard to amounts 
payable by the Credit Enhancement Provider, including amounts payable 
pursuant to a Reimbursement Agreement dated as of March 1, 1996 (the 
"Reimbursement Agreement") between the Authority and the Credit Enhancement 
Provider.

     The Authority itself has no taxing power.  The Authority is acting as an 
instrumentality of Dawson Ridge Metropolitan District No. 5 (the "District"). 
On November 7, 1995, the voters of the District and certain related 
improvement districts (the "Related Districts") approved the execution and 
delivery of an Operating Agreement and an Intergovernmental Agreement 
obligating the Related Districts to provide funds to the District for payment 
to the Authority to the extent that revenues from the Project (as defined 
herein) are insufficient to fund debt service on the Bonds and operating 
expenses of the Project, such funds to be derived from a mill levy that is 
subject to certain limitations, including a 35-mill limitation on taxable 
property within the District and the Related Districts (collectively, the 
"Districts").  The Operating Agreement and the Intergovernmental Agreement 
will not become effective until one of two conditions (hereinafter discussed) 
for imposition of the mill levy are satisfied.  In order to provide an 
alternate source of revenue, the Authority has entered into a Development 
Agreement dated as of March 1, 1996, with Douglas County Development 
Corporation ("DCDC"), the owner of approximately 85% of the property in the 
Districts, providing for a payment in lieu of taxes by DCDC and all 
subsequent owners of the property owned by DCDC in the Districts.  Neither 
the principal of the Bonds, nor the interest accruing thereon, shall ever 
constitute a general indebtedness of the Authority, the District or the 
Related Districts or an indebtedness of the State of Colorado or any 
political subdivision thereof within the meaning of any constitutional or 
statutory provision whatsoever or shall ever constitute or give rise to a 
pecuniary liability of the State of Colorado or any political subdivision 
thereof or a charge against the general credit or taxing power of the State 
of Colorado or any political subdivision thereof, nor will the Bonds be, or 
be deemed to be, an obligation of the State of Colorado or any political 
subdivision thereof.  The taxing power of the District and the Related 
Districts is limited.

     The Authority will accept for exchange any and all Bonds validly 
tendered and not withdrawn prior to 5:00 p.m., New York City time, on 
__________________, 1997, unless extended by the Authority in its sole 
discretion (the "Expiration Date").  Notwithstanding the foregoing, the 
Authority will not extend the Expiration Date beyond               , 1997.  
Tenders of Bonds may be withdrawn at any time prior to 5:00 p.m. on the 
Expiration Date. The Exchange Offer is subject to certain customary 
conditions.  The Bonds were sold by the Authority on March 27, 1996 in a 
transaction not registered under the Securities Act in reliance upon 
exemptions under the Securities Act.  Because of the exemption from 
registration relied upon for the issuance of the Credit Enhancement, the 
Bonds may not be reoffered, resold or otherwise transferred in the United 
States unless the Credit Enhancement is registered under the Securities Act 
or unless an applicable exemption from the registration requirements of the 
Securities Act

<PAGE>

is available.  The Exchange Bonds are being offered hereunder in order to 
satisfy the obligations of the Authority and the Credit Enhancement Provider 
under the Registration Rights Agreement (as defined herein) entered into by 
the Authority in connection with the offering of the Bonds.  See "The 
Exchange Offer."

     Based on no-action letters issued by the staff of the Securities and 
Exchange Commission (the "Commission") to third parties, the Authority 
believes the Exchange Bonds issued pursuant to the Exchange Offer may be 
offered for resale, resold and otherwise transferred by any holder thereof 
(other than any such holder that is an "affiliate" of the Authority within 
the meaning of Rule 405 under the Securities Act) without compliance with the 
registration and prospectus delivery provisions of the Securities Act, 
provided that such Exchange Bonds are acquired in the ordinary course of such 
holders' business and such holder has no arrangement or understanding with 
any person to participate in the distribution of such Exchange Bonds.  See 
"The Exchange Offer--Purpose and Effect of the Exchange Offer" and "The 
Exchange Offer--Resale of the Exchange Bonds."  Each broker-dealer (a 
"Participating Broker-Dealer") that receives Exchange Bonds for its own 
account pursuant to the Exchange Offer must acknowledge that it will deliver 
a prospectus in connection with any resale of such Exchange Bonds.  The 
Letter of Transmittal states that by so acknowledging and by delivering a 
prospectus, a participating Broker-Dealer will not be deemed to admit that it 
is an "underwriter" within the meaning of the Securities Act. This 
Prospectus, as it may be amended or supplemented from time to time, may be 
used by a Participating Broker-Dealer in connection with resales of Exchange 
Bonds received in exchange for Bonds where such Bonds were acquired by such 
Participating Broker-Dealer as a result of market-making activities or other 
trading activities.  The Authority has agreed that, for a period of 180 days 
after the Expiration Date, it will make this Prospectus available to any 
Participating Broker-Dealer for use in connection with any such resale.  See 
"Plan of Distribution."

     Holders of Bonds not tendered and accepted in the Exchange Offer will 
continue to hold such Bonds and will be entitled to all the rights and 
benefits and will be subject to the limitations applicable thereto under the 
Indenture and with respect to transfer under the Securities Act.  The 
Authority will pay all the expenses incurred by it incident to the Exchange 
Offer.  See "The Exchange Offer."

     SEE "RISK FACTORS" FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE 
CONSIDERED BY HOLDERS WHO TENDER THEIR BONDS IN THE EXCHANGE OFFER.

     THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES 
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE 
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR 
ADEQUACY OF THIS PROSPECTUS.  ANY REPRESENTATION TO THE CONTRARY IS A 
CRIMINAL OFFENSE.

     There has not previously been any public market for the Bonds or the 
Exchange Bonds.  The Authority does not intend to list the Exchange Bonds on 
any securities exchange or to seek approval for quotation through any 
automated quotation system.  There can be no assurance that an active market 
for the Exchange Bonds will develop.  See "Risk Factors--Lack of Public 
Market." Moreover, to the extent that Bonds are tendered and accepted in the 
Exchange Offer, the trading market for untendered and tendered but unaccepted 
Bonds could be adversely affected.

     The Exchange Bonds will be available only in book-entry form.  The 
Authority expects that the Exchange Bonds issued pursuant to this Exchange 
Offer will be issued in the form of a Global Certificate (as defined herein), 
which will be deposited with, or on behalf of, The Depository Trust Company 
(the "Depositary") and registered in the name of Cede & Co., its nominee.  
Beneficial interests in the Global Certificate representing the Exchange 
Bonds will be shown on, and transfers thereof to qualified institutional 
buyers will be effected through, records maintained by the Depositary and its 
participants. After the initial issuance of the Global Certificate, Exchange 
Bonds in certificated form will be issued in exchange for the Global 
Certificate only on the terms set forth in the Indenture.  See "Description 
of Exchange Bonds--Book-Entry; Delivery and Form."


<PAGE>

                              AVAILABLE INFORMATION

     The Credit Enhancement Provider has filed with the Commission a 
Registration Statement on Form S-4 (the "Exchange Offer Registration 
Statement," which term shall encompass all amendments, exhibits, annexes and 
schedules thereto) pursuant to the Securities Act, and the rules and 
regulations promulgated thereunder, covering the Credit Enhancement of the 
Exchange Bonds being offered hereby.  This Prospectus does not contain all 
the information set forth in the Exchange Offer Registration Statement.  For 
further information with respect to the Authority, the Exchange Offer and the 
Credit Enhancement and Credit Enhancement Provider, reference is made to the 
Exchange Offer Registration Statement.  Statements made in this Prospectus as 
to the contents of any contract, agreement or other document referred to are 
not necessarily complete.  With respect to each such contract, agreement or 
other document filed as an exhibit to the Exchange Offer Registration 
Statement, reference is made to the exhibit for a more complete description 
of the document or matter involved, and each such statement shall be deemed 
qualified in its entirety by such reference.  The Exchange Offer Registration 
Statement, including the exhibits thereto, can be inspected and copied at the 
public reference facilities maintained by the Commission at Room 1024, 450 
Fifth Street, N.W., Washington, D.C. 20549, at the Regional Offices of the 
commission at 75 Park Place, New York, New York 10007 and at Northwestern 
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.  
Copies of such materials can be obtained from the Public Reference Section of 
the Commission at 450 Fifth Street, N.W., Washington, DC 20549, at prescribed 
rates.

     At a result of the filing of the Exchange Offer Registration Statement 
with the Commission, the Credit Enhancement Provider will become subject to 
the informational requirements of the Securities Exchange Act of 1934, as 
amended (the "Exchange Act"), and in accordance therewith will be required to 
file periodic reports and other information with the Commission.  The 
obligation of the Credit Enhancement Provider to file periodic reports and 
other information with the Commission will be suspended if the Exchange Bonds 
are held of record by fewer than 300 holders as of the beginning of any 
fiscal year of the Credit Enhancement Provider other than the fiscal year in 
which the Exchange Offer Registration Statement is declared effective.  The 
Credit Enhancement Provider will nevertheless be required to continue to file 
reports with the Commission if the Exchange Bonds are listed on a national 
securities exchange, although the Authority does not intend to list the 
Exchange Bonds on any securities exchange. In addition and in the event the 
Credit Enhancement Provider ceases to be subject to the informational 
requirements of the Exchange Act, in order to satisfy the requirements of 
Rule 15c2-12 (the "Rule") of the Exchange Act, the Authority, the Credit 
Enhancement Provider, the Districts and the Trustee have entered into a 
Continuing Disclosure Agreement for the benefit of owners of the Bonds.  
Pursuant to such agreement, the Authority, the Credit Enhancement Provider 
and the Districts have covenanted to provide to each nationally recognized 
municipal securities information repository and to the Colorado state 
information depository, if and when established, certain annual financial 
information and operating data, including audited financial statements, 
within 210 days following the end of each of their fiscal years.  The 
Authority, the Credit Enhancement Provider and each District have covenanted 
to provide notice in a timely manner to each nationally recognized municipal 
securities information repository or to the Municipal Securities Rulemaking 
Board (the "MSRB") and to the Colorado state information depository of its 
failure to provide the required annual financial information on or before the 
date specified in the Continuing Disclosure Agreement.

<PAGE>

                               PROSPECTUS SUMMARY

     THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY, AND SHOULD BE READ 
IN CONJUNCTION WITH, THE MORE DETAILED INFORMATION AND FINANCIAL DATA, 
INCLUDING THE FINANCIAL STATEMENTS, ELSEWHERE IN THIS PROSPECTUS.

                THE AUTHORITY AND THE CREDIT ENHANCEMENT PROVIDER

     The Authority is a nonprofit corporation created as an instrumentality 
of the District for the purpose of acquiring from DCDC, an affiliate of The 
Franklin L. Haney Company, of an approximately 876 acre portion of the Dawson 
Ridge development in the Town of Castle Rock, Colorado (the "Real Estate"), 
and for the acquisition from DCDC of an estimated 900 acre feet of water 
rights in the Denver and lower Dawson aquifers (collectively with the Real 
Estate, the "Property") for $54,550,000.  It is anticipated that the 
Authority will construct a 36-hole golf course on the Real Estate, to be 
operated as a municipal golf course, although none of the necessary 
governmental approvals or permits have been obtained.  Consequently, no 
assurances can be given that the contemplated golf course will be ultimately 
constructed.  See "The Project" and "The Authority."

     The Credit Enhancement Provider is a newly-formed Delaware corporation 
formed for the purpose of providing the Credit Enhancement.  The Credit 
Enhancement Provider has executed a Collateralized Credit Enhancement 
Agreement to provide for the due, prompt and complete payment of the Bonds.  
As collateral, the Credit Enhancement Provider has pledged and delivered to 
the Trustee $67,075,000 Series B REMIC Bonds.  See "Credit Enhancement."

     The Authority's address is 4582 South Ulster Street Pkwy., Suite 902, 
Denver, Colorado 80237, and its telephone number is (303) 770-0200.

     The Credit Enhancement Provider's address is 1455 Pennsylvania Avenue, 
Suite 230, Washington, DC 20004, and its telephone number is (202) 639-0512.

<PAGE>

                                  THE OFFERING

Securities Offered

The Bonds were sold by the Authority on March 27, 1996 (the "Issue Date") to 
Lehmann Brothers Inc. (the "Initial Purchaser") pursuant to a Purchase 
Agreement dated March 26, 1996 (the "Purchase Agreement").  The Initial 
Purchaser subsequently resold the Bonds to qualified institutional buyers 
pursuant to Rule 144A under the Securities Act and to institutional 
accredited investors that agreed to comply with certain transfer restrictions 
and other conditions.  The Authority is a public instrumentality of the State 
of Colorado.  As a result, the offer and sale of the Bonds and the Exchange 
Bonds is exempt from the registration requirements of the Securities Act 
pursuant to Section 3(a)(2) of the Securities Act.  However, the Credit 
Enhancement Provider is not a public instrumentality and the Credit 
Enhancement is not so exempt.

The Exchange Offer

$5,000 principal amount of the Exchange Bonds in exchange for each $5,000 
principal amount of Bonds.  As of the date hereof, $66,975,000 aggregate 
principal amount of Bonds are outstanding.  The Authority will issue the 
Exchange Bonds to holders on or promptly after the Expiration Date.

Based on an interpretation by the staff of the Commission set forth in no 
action letters issued to third parties, the Authority and the Credit 
Enhancement Provider believe that Exchange Bonds issued pursuant to the 
Exchange Offer in exchange for Bonds may be offered for resale, resold and 
otherwise transferred by any holder thereof (other than any such holder which 
is an "affiliate" of the Authority within the meaning of Rule 405 under the 
Securities Act) without compliance with the registration and prospectus 
delivery  provisions of the Securities Act, provided that such Exchange Bonds 
are acquired in the ordinary course of such holder's business and that such 
holder does not intend to participate and has no arrangement or understanding 
with any person to participate in the distribution of such Exchange Bonds.

Each Participating Broker-Dealer that receives Exchange Bonds for its own 
account pursuant to the Exchange Offer must acknowledge that it will deliver 
a prospectus in connection with any resale of such Exchange Bonds.  The 
Letter of Transmittal states that by so acknowledging and by delivering a 
prospectus, a Participating Broker-Dealer will not be deemed to admit that it 
is an "underwriter" within the meaning of the Securities Act.  This 
Prospectus, as it may be amended or supplemented from time to time, may be 
used by a Participating Broker-Dealer in connection with resales of Exchange 
Bonds received in exchange for Bonds where such Bonds were acquired by such 
Participating Broker-Dealer as a result of market-making activities or other 
trading activities.  The Authority has agreed that, for a period of 180 days 
after the Expiration Date, it will make this Prospectus available to any 
Participating Broker-Dealer for use in connection with any such resale.  See 
"Plan of Distribution."

Any holder who tenders in the Exchange Offer with the intention to 
participate, or for the purpose of participating, in a distribution of the 
Exchange Bonds could not rely on the position of the staff of the Commission 
enunciated in no-action letters and, in the absence of an exemption 
therefrom, must comply with the registration and prospectus delivery 
requirements of the Securities

                                        2
<PAGE>

Act in connection with any resale transaction.  Failure to comply with such 
requirements in such instance may result in such holder incurring liability 
under the Securities Act for which the holder is not indemnified by the 
Authority.

Expiration Date

5:00 p.m., New York City time, on _________________, 1997 unless the Exchange 
Offer is extended, in which case the term "Expiration Date" means the latest 
date and time to which the Exchange Offer is extended.

Accrued Interest on the Exchange Bonds and the Bonds

Each Exchange Bond will bear interest from its issuance date.  Holders of 
Bonds that are accepted for exchange will receive, in cash, accrued interest 
thereon to, but not including, the issuance date of the Exchange Bonds.  Such 
interest will be paid with the first interest payment on the Exchange Bonds.  
Interest on the Bonds accepted for exchange will cease to accrue upon 
issuance of the Exchange Bonds.

The Exchange Offer

The Exchange Offer is subject to certain customary conditions, which may be 
waived by the Authority and the Credit Enhancement Provider.  See "The 
Exchange Offer--Conditions."

Procedures for Tendering Bonds

Each holder of Bonds wishing to accept the Exchange Offer must complete, sign 
and date the accompanying Letter of Transmittal, or a facsimile thereof, in 
accordance with the instructions contained herein and therein, and mail or 
otherwise deliver such Letter of Transmittal, or such facsimile, together 
with the Bonds and any other required documentation to the Exchange Agent (as 
defined) at the address set forth herein.  By executing the Letter of 
Transmittal, each holder will represent to the Authority and the Credit 
Enhancement Provider that, among other things, the Exchange Bonds acquired 
pursuant to the Exchange Offer are being obtained in the ordinary course of 
business of the person receiving such Exchange Bonds, whether or not such 
person is the holder, that neither the holder nor any such other person has 
any arrangement or understanding with any person to participate in the 
distribution of such Exchange Bonds and that neither the holder nor any such 
other person is an "affiliate," as defined under Rule 405 of the Securities 
Act, of the Authority and the Credit Enhancement Provider.  See "The Exchange 
Offer--Purpose and Effect of the Exchange Offer" and "--Procedures for 
Tendering."

Untendered Bonds

Following the consummation of the Exchange Offer, holders of Bonds eligible 
to participate but who do not tender their Bonds will not have any further 
exchange rights and such Bonds will continue to be subject to certain 
restrictions on transfer.  Accordingly, the liquidity of the market for such 
Bonds could be adversely affected.

Consequences of Failure to Exchange

Because of the Credit Enhancement, the Bonds that are not exchanged pursuant 
to the Exchange Offer will remain restricted securities.  Accordingly, such 
Bonds may be resold only (1) to the Authority, (ii) pursuant to Rule 144A or 
Rule 144 under the Securities Act or pursuant to some other exemption under 
the Securities Act, (iii) outside the United States to a foreign person 
pursuant to the requirements of Rule 904 under the Securities Act, or (iv) 
pursuant to an effective registration statement under the Securities Act.  
See "The Exchange Offer--Consequences of Failure to Exchange."

                                        3
<PAGE>

Special Procedures for Beneficial Owners

Any beneficial owner whose Bonds are registered in the name of a broker, dealer,
commercial bank, trust company or other nominee and who wishes to tender should
contact such registered holder promptly and instruct such registered holder to
tender on such beneficial owner's behalf.  If such beneficial owner wishes to
tender on such owner's own behalf, such owner must, prior to completing and
executing the Letter of Transmittal and delivering its Bonds, either make
appropriate arrangements to register ownership of the Bonds in such owner's name
or obtain a properly completed bond power from the registered holder.  The
transfer of registered ownership may take considerable time.  The Authority will
keep the Exchange Offer open for not less than twenty business days in order to
provide for the transfer of registered ownership.

Guaranteed Delivery Procedures

Holders of Bonds who wish to tender their Bonds and whose Bonds are not
immediately available or who cannot deliver their Bonds, the Letter of
Transmittal or any other documents required by the Letter of Transmittal to the
Exchange Agent (or comply with the procedures for book-entry transfer) prior to
the Expiration Date must tender their Bonds according to the guaranteed delivery
procedures set forth in "The Exchange Offer Guaranteed Delivery Procedures."

Use of Proceeds

There will be no cash proceeds to the Authority from the exchange pursuant to
the Exchange Offer.

Withdrawal Rights

Tenders may be withdrawn at any time prior to 5:00 p.m., New York City time, on
the Expiration Date.

Acceptance of Bonds and Delivery of Exchange Bonds

The Authority will accept for exchange any and all Bonds which are properly
tendered in the Exchange Offer prior to 5:00 p.m., New York City time, on the
Expiration Date.  The Exchange Bonds issued pursuant to the Exchange Offer will
be delivered promptly following the Expiration Date.  See "The Exchange Offer-
Terms of the Exchange Offer."

Exchange Agent 

SouthTrust Bank of Alabama, National Association.

Registration Rights Agreement

Pursuant to the Purchase Agreement, the Authority, the Credit Enhancement
Provider and the Initial Purchasers entered into a Registration Rights Agreement
dated as of March 1, 1996 (the "Registration Rights Agreement"), which grants
the holder of the Bonds certain exchange and registration rights.  The Exchange
Offer is intended to satisfy such exchange rights which terminate upon the
consummation of the Exchange Offer.


                                        4
<PAGE>

                               THE EXCHANGE BONDS

General

The form and terms of the Exchange Bonds are the same as the form and terms of
the Bonds (which they replace) except that (i) the Exchange Bonds bear a Series
B designation, (ii) the Credit Enhancement for the Exchange Bonds has been
registered under the Securities Act and, therefore, the Exchange Bonds will not
bear legends restricting the transfer thereof, and (iii) the holders of Exchange
Bonds will not be entitled to certain rights under the Registration Rights
Agreement, including the provisions providing for an increase in the interest
rate on the Bonds in certain circumstances relating to the timing of the
Exchange Offer, which rights will terminate when the Exchange Offer is
consummated.  See "The Exchange Offer-Purpose and Effect of the Exchange Offer."
The Exchange Bonds will evidence the same debt as the Bonds and will be entitled
to the benefits of the Indenture.  See "Description of Exchange Bonds.  The
Bonds and the Exchange Bonds are referred to herein collectively as the
"Securities."

Securities Offered

$66,975,000 aggregate principal amount of Public Facilities Revenue Bonds,
Series 1996 B.

Maturity Schedule and Interest Rate

     MATURITY DATE                             COUPON         REOFFERING
     (DECEMBER 1)        PAR AMOUNT             RATE             YIELD
     ------------        ----------             ----             -----

          1999           $1,980,000             5.75%            4.75%
          2000            2,095,000             5.75             4.95
          2001            2,215,000             5.75             5.15
          2002            2,340,000             5.75             5.30
          2003            2,475,000             5.90             5.40
          2004            2,620,000             6.00             5.50
          2005            2,780,000             6.10             5.60
          2006            2,950,000             5.70             5.70
          2007            3,115,000             6.30             5.80
          2008            3,310,000             6.40             5.90
          2009            3,525,000             6.50             6.00

$7,750,000 6.375% Term Bonds due December 1, 2011 at 6.15%

$29,820,000 6.25% Term Bonds due December 1, 2017 at 6.35%

Interest Payment Dates

June 1 and December 1, commencing December 1, 1996.

Optional Redemption

The Exchange Bonds are not subject to redemptions at the option of the
Authority.

Credit Enhancement

The Exchange Bonds will be guaranteed by the Credit Enhancement Provider.  The
Exchange Bonds are limited obligations of the Authority, secured by a Deed of
Trust interest in the Property.  See "The Deed of Trust" in Appendix A -
"Summary of Principal Board Documents and Definition of "Certain Terms".

Collateral

The Collateral consists of $67,075,000 in principal amount of BFC Finance Corp.
REMIC Lease-Backed Bonds, Series 1996, Federal Lease-Backed Bonds, Class B,
which will effectively be payable from certain payments to be made by the U.S.


                                        5
<PAGE>

Government under a lease for space in a building in the District of Columbia.


                                        6
<PAGE>

                                  RISK FACTORS

     Prospective investors should carefully consider the following factors in
addition to the other information set forth in this Prospectus before accepting
the Exchange Offer.

CONSTRUCTION

     The Authority intends to construct a 36 hole golf course on the Real
Estate, which will generate revenue that will be used to pay interest and the
principal on the Securities.  Construction is anticipated to commenced following
requisite local government approvals.  No assurance can be given that such
construction will be successful or completed on a timely basis.

ADDITIONAL BONDS

     The Authority has the power to issue additional bonds which are subordinate
in right of payment to the Securities.

LACK OF PUBLIC MARKET

     The Bonds are currently owned by a relatively small number of beneficial
owners.  Prior to the Exchange Offer, there has not been any public market for
the Bonds.  The Bonds and the Credit Enhancement have not been registered under
the Securities Act and will be subject to restrictions on transferability to the
extent that they are not exchanges for New Securities by holders who are
entitled to participate in this Exchange Offer.  The Authority does not intend
to list the Exchange Bonds on any national securities exchange or to seek the
admission thereof to trading in the National Association of Securities Dealers
Automated Quotation System.  The Initial Purchaser has advised the Authority
that they currently intend to make a market in the Exchange Bonds, but they are
not obligated to do so and may discontinue such market making at any time.  In
addition, such market making activity will be subject to the limited imposed by
the Securities Act and the Exchange Act and may be limited during the Exchange
Offer (as defined herein) and the pendency of the Shelf Registration Statement.
Accordingly, no assurance can be given that an active public or other market
will develop for the New Securities or as to the liquidity of the trading market
for the Exchange Bonds.  If a trading market does not develop or is not
maintained, holders of the Exchange Bonds may experience difficulty in reselling
the Exchange Bonds or may be unable to sell them at all.  If a market for the
Exchange Bonds develops, any such market may be discontinued at any time.

     If a public trading market develops for the Exchange Bonds, future trading
prices for such securities will depend on many factors, including, among other
things, prevailing interest rates, the Authority's result of operations and the
market for similar securities.  Depending on prevailing interest rates, the
market for similar securities and other factors, including the financial
condition of the Authority, or the Credit Enhancement Provider the Exchange
Bonds may trade at a discount from their principal amount.

     Issuance of the Exchange Bonds in exchange for the Bonds pursuant to the
Exchange Offer will be made only after a timely receipt by the Authority of such
Bonds, a properly completed and duly executed Letter of Transmittal and all
other required documents.  Therefore, holders of the Bonds desiring to tender
such Bonds in exchange for Exchange Bonds should allow sufficient time to ensure
timely delivery.  The Authority is under no duty to give notification of defects
or irregularities with respect to the tenders of Bonds for exchange.  Bonds that
are not tendered or are tendered but not accepted will, following the
consummation of the Exchange Offer, continue to be subject to the existing
restrictions upon transfer thereof, and upon consummation of the Exchange Offer
certain registration rights under the Registration Rights Agreement will
terminate.  In addition, any holder of Bonds who tenders in the Exchange Offer
for a purpose of participating in a distribution of the Exchange Bonds may be
deemed to have received restricted securities and, if so, will be required to
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction.  Each broker-dealer
that receives Exchange Bonds for its own account in exchange for Bonds, where
such Bonds were acquired by such broker-dealer as a result of market-making
activities or other trading activities, must acknowledge that it will deliver a
prospectus in connection with any resale of such New Securities.  See "Plan of
Distribution."  To the extent that Bonds are tendered and accepted in the
Exchange Offer, the trading market for untendered and tendered but unaccepted
Bonds could be adversely affected.  See "The Exchange Offer."


                                 USE OF PROCEEDS

     This Exchange Offer is intended to satisfy certain of the Authority's
obligations under the Purchase Agreement and the Registration Rights Agreement.
The Authority will not receive any cash proceeds from the issuance of the
Exchange Bonds offered hereby.  In consideration for issuing the Exchange Bonds
contemplated in this Prospectus, the Authority will receive Bonds in like
principal amount, the form and terms of which are the same as the form and terms
of the Exchange Bonds (which they replace), except as otherwise described
herein.  The Bonds surrendered in exchange for Exchange Bonds will be retired
and canceled and


                                        7
<PAGE>

cannot be reissued.  Accordingly, issuance of the Exchange Bonds will not result
in any increase or decrease in the indebtedness of the Authority.

     The net proceeds from the Bonds in the initial offering were used (1) to
acquire the Property, (2) to pay capitalized interest, and (3) to pay certain
costs of issue the Bonds.  The following table shows the estimated sources and
uses of funds from the offering of the Bonds:

          SOURCES:
               Proceeds of Bonds (1)                    $67,760,621.05
               Accrued Interest                             321,393.53
                                                        --------------
                    TOTAL SOURCES OF FUNDS              $68,082,014.58

          USES:
               Project Fund Deposit                     $54,550,000.00
               Debt Service Fund Deposit (2)              7,729,585.70
               Costs and Expenses of Issuance (3)         5,802,428.88
                                                        --------------
                    TOTAL USES OF FUNDS                 $68,082,014.58

- ---------------
(1)  Includes premium of $785,621.05.
(2)  Represents capitalized interest to March 1, 1998 and accrued interest.
(3)  Includes underwriter's discount, legal fees, initial, first and second
     annual Trustee fee, rating fee, credit enhancement fee, printing and
     miscellaneous expenses.


                                 CAPITALIZATION

     The following table sets forth the historical capitalization of the Credit
Enhancement Provider at September 30, 1996.  This table should be read in
conjunction with the Selected Historical Financial Data included elsewhere in
this Prospectus.

                                                                     As of
                                                                 September 30,
                                                                     1996

STOCKHOLDER'S EQUITY:

Common Stock, no par value, 1,500 shares authorized and issued       $1,000
Retained Earnings                                                   190,480
                                                                   --------
Total Stockholder's Equity and Capitalization                      $191,480
                                                                   --------
                                                                   --------


                                        8
<PAGE>

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


     The following should be read IN conjunction with the Financial Statements
and notes thereto included elsewhere IN this Prospectus.

     MARCH 29, 1996 THROUGH OCTOBER 31, 1996.

     The Credit Enhancement Provider is a special purpose entity formed solely
to provide credit enhancement for the Bonds.  In connection with the issuance of
the Bonds, the Authority paid $4,018,500 to the Credit Enhancement Provider as a
commitment fee.  The Credit Enhancement Provider advanced this fee to its
parent, the Building Finance Company of Tennessee.  The Credit Enhancement
Provider has no other operations.

     The Authority received $67,760,621 in net proceeds from the issuance of the
Bonds, $54,550,000 was used to acquire land and water rights from the DCDC.  The
Authority has no other operations.


                                        9
<PAGE>

                                   THE PROJECT

     The proceeds of the Bonds will be used for the acquisition from DCDC, an
affiliate of The Franklin L. Haney Company, of the Property.  The purchase price
for this acquisition ($54,550,000) was not determined in an arm's length
negotiation, but rather is the appraised fair market value determined by THK
Associates, Inc., independent appraisers, in their February 26, 1996 appraisal.
It is anticipated that the Authority will construct a 36-hole golf course on the
Real Estate, to be operated by the Authority as a municipal golf course.  No
assurances, however, can be given that the contemplated golf course will be
ultimately constructed.  The Authority has covenanted in the Reimbursement
Agreement to take all reasonable efforts and diligently proceed to complete the
Recreational Facilities, including the golf course.  It is expected that certain
roadways will also be constructed on the Real Estate.  In addition, it is
expected that tennis and other recreational facilities will be built at a
central golf course club house facility, which facilities will be open to the
public.  The Bonds will be used solely for real estate and water rights
acquisitions (and payment of cost of issuance, including the payment of fees and
expenses of the Credit Enhancement Provider in connection with providing the
Credit Enhancement).  Following the completion of construction documentation and
the issuance of all the necessary government permits and approvals, the
Authority intends to issue one or more subsequent series of bonds in order to
finance the design, construction and completion of golf course and recreational
facility improvements and equipment, and for roadway construction (all such
acquisition and construction constituting the "Project").

     The Authority engaged Global Golf Course Design, Inc. to produce a detailed
design and construction package based on a review of Real Estate suitability,
creation of a detailed golf course design, and overview of on-site construction
requirements.  Global Golf Design, Inc. was founded by James J. Engh.  Mr. Engh
has been involved with golf course design and construction since 1981.  Global
Golf Design, Inc.'s current project list includes 13 golf courses located
primarily in the western United States although some are in Thailand and China.
Other golf courses designed by Mr. Engh and presently open include facilities in
Thailand, Austria, Italy, France, Germany, England, Ireland and Belgium.

     The construction and completion of the golf course and other recreational
facility improvements currently estimated to cost $5,150,000.  The Authority
also expects to incur approximately $25,000,000 of additional costs to complete
nonrevenue producing infrastructure, including roadways, which will be
transferred to the District on completion.  Under the terms of the Indenture,
any additional bonds issued by the Authority will be issued on a subordinate
basis.  There can be no assurance that the Authority will be able to issue any
additional bonds or issue them in amounts needed to finance construction of the
golf course and other recreational facility improvements and non-revenue
producing infrastructure.

     Undertaking completion of the Project will require various governmental
permits and approvals (including revisions of the previously approved Planned
Unit Development ("PUD") for the Dawson Ridge development).  While the Districts
and the Authority have commenced initial conversations with Town staff on the
nature and extent of such requirements, no formal PUD amendments have been
submitted to the Town or the Town Zoning Commission, and no assurance can be
given that the requisite approvals for these changes will be forthcoming or that
they will be obtained in a timely fashion.

     In the event that the design and construction of the golf course and
recreational facility improvements and equipment within the Project are not
completed, there will be no revenues from the operation of those facilities
available for payment of principal and interest on the Bonds, although the
Credit Enhancement will continue to be available for that purpose.  If the golf
course and recreational facilities are built, but the residential development of
Dawson Ridge is not completed as planned, then the amount of mill levy revenues
collected by the Districts together with the net revenues from operation could
be insufficient to make full payment of principal and interest on the Bonds,
although the Credit Enhancement will continue to be available for that purpose
(exclusive of Extra Payments).  In either such event, the Credit Enhancement
Provider might foreclose on the Project and convert it into a non-public
facility.  Such a change in use could adversely affect the exclusion of interest
on the Bonds from gross income for federal income tax purposes.  Consequently,
the Deed of Trust requires that, before the Credit Enhancement Provider can
foreclose on the Project, it must obtain an opinion of Special Tax Counsel
acceptable to the Trustee that such foreclosure will not adversely affect the
exclusion of interest on the Bonds from gross income for federal income tax
purposes.  In addition, the Deed of Trust will be terminated as to the
Bondholders if the Credit Enhancement Provider forecloses on it because of a
default by the Authority under the Reimbursement Agreement.


                                  THE AUTHORITY

     The Authority was created in 1996 as a nonprofit corporation organized
under the laws of the State of Colorado, intended to be in general compliance
with the requirements of the Internal Revenue Service Revenue Procedure 82-26.
Generally, that revenue procedure provides that the Internal Revenue Service
will ordinarily rule that obligations issued by a nonprofit corporation are
issued on behalf of a governmental unit if the following requirements are met:

   I.     The corporation must engage in activities that are essentially public
          in nature.


                                       10
<PAGE>

  II.     The corporation must not be organized for profit except to the extent
          of retiring indebtedness.

 III.     The corporate income may not inure to any private person.

  IV.     The governmental unit must have a beneficial interest in the
          corporation while the indebtedness remains outstanding.

   V.     The governmental unit must obtain full legal title to the property of
          the corporation with respect to which the indebtedness was incurred
          upon retirement of the indebtedness.

  VI.     The governmental unit must approve both the nonprofit corporation and
          the specific obligations to be issued by the corporation.

     The District is a sponsoring governmental unit for purposes of the
requirements of Internal Revenue Service Revenue Procedure 82-26.

     As a newly formed organization, the Authority has no other undertakings or
obligations other than with respect  to the Bonds and the Project.  Franklin L.
Haney and C. Roger Addlesperger are the members of the board of directors of the
Authority.  Franklin L. Haney is one of the principals of DCDC, the owner of the
Real Estate.  See "Certain Transactions."

     C. Roger Addlesperger, one of the directors for each of the Districts, has
consulted for the Franklin L. Haney Company and DCDC on matters pertaining to
the real estate within Dawson Ridge and other developments in the State of
Colorado.  In connection with such consultation, Mr. Addlesperger has received
compensation from The Franklin L. Haney Company, and anticipates having a future
relationship with The Franklin L. Haney Company.  Mr. Addlesperger is a Vice
President of DCDC.  Candace Addlesperger, who is also a director of each of the
Districts, is Mr. Addlesperger's wife.  Each of the Districts currently has
three directors.  See "District Management."

     The Articles of Incorporation of the Authority provide that it is organized
and shall be operated exclusively on behalf of and for the benefit and in
furtherance of the purposes of Dawson Ridge Metropolitan District No. 5.  The
Articles of Incorporation also provide that all monies realized by the Authority
will be used exclusively for the operation, maintenance and development of
property of the Authority, including payment of obligations of the Authority in
connection therewith, which property shall be used to provide public facilities.
Such property must be located within the District or have a substantial
connection therewith.

     In furtherance of  those purposes, the Authority has all powers that may
now or hereafter be exercised by a nonprofit corporation organized under the
laws of the State of Colorado.

     Restrictions on the power of the Authority include a requirement that no
part of the net earnings of the Authority will inure to the benefit of any
private person, and no substantial part of the activities of the Authority shall
consist of carrying on propaganda activities or otherwise attempting to
influence legislation.  All property of the Authority shall be owned for the
benefit of the District.  Upon dissolution of the Authority, all of the
Authority's assets (remaining after payment of or provision for all its
liabilities) shall be paid to the District.


                                  THE DISTRICTS

GENERAL

     The Project is located in a proposed development generally referred to as
Dawson Ridge (the "Development").  Since the inception of planning for the
Development, it has been proposed that Dawson Ridge be serviced by multiple
special districts each serving a portion of the Development.  Special districts
are political subdivisions of the State of Colorado and quasi-municipal
corporations created pursuant to Title 32, Colorado Revised Statutes, as amended
(the "Act").  The five contiguous special districts serving the Development are
referred to as Dawson Ridge Metropolitan Districts Nos. 1 through 5 (the
"Districts").  The purpose of multiple metropolitan districts is to assure that
residential infrastructure is supported by the benefitted property, and that
then-current residents and taxpayers of an area are not unreasonably burdened by
the cost of future development.

     The Districts were organized in 1985 for the purpose of providing certain
water, sewer, street, park and recreation and safety improvements for the
Development, which is located entirely within the boundaries of the Town.

     The Dawson Ridge development contains approximately 1,883 acres of which
approximately 876 acres are being acquired by the Authority with Bond proceeds
for use in the Project.


                                       11
<PAGE>

SERVICE PLAN

     The preparation and approval of a service plan is a requirement under
Colorado Statutes for the organization of a special district.  The service plans
for each District consisted of a financial survey and preliminary engineering
survey showing how the proposed services were to be provided and financed,
including a description, among other things, of facilities to be constructed.
In the preparation of the service plans, projections were utilized regarding
construction costs, amounts of revenues to each District proposing the service
plan, building rates and other matters.  A separate service plan was prepared,
in substantially identical form, with respect to each of the five Districts.
Following preparation of the Districts' service plans, they were submitted to
the Town and approved by the Town and by a majority of the electors within each
District.  The organization of each District was then approved by the District
Court for Douglas County, Colorado.

     Any material departure from a service plan may be enjoined by the District
Court for Douglas County on its own motion or upon motion by the Town, residents
or property owners of the District or municipalities or special districts within
a radius of three miles of each District.  To this extent, the powers of the
Districts may be considered limited by their respective service plans.  The Act
permits amendments to existing service plans by a procedure analogous to that
required in the original approval, when required for changes of a basic
essential nature.  Such a revision would require the approval of the Town.
However, no further approval by the District Court is required after revision
approval by the Town.  In connection with the expected development in the
Districts, it is contemplated that amendments to the service plan of each
District will be required.  No assurance can be given regarding whether any such
service plan amendments will be approved or the timing thereof.  See "Security
and Source of Payment."

ORIGINAL DEVELOPMENT

     The primary owner of the property within the geographic boundaries of the
development at the time of the organization of the Districts was Bellamah
Community Development ("Bellamah"), a New Mexico general partnership.

     In April 1986, District No. 1 issued its general obligation bonds in the
original principal amount of $24,725,000 (the "1986 Bonds"), the payment of
which was secured in part by the pledge of taxes of District No. 1, service
charges and development fees.  In connection with the issuance of the 1986
Bonds, Bellamah entered into a Facilities Development Fee Agreement (the "Fee
Agreement") wherein it agreed to pay fees to District No. 1 in the total amount
of $21,431,867 for the right to use facilities of District No. 1.

     In 1988, Bellamah defaulted on its payment obligations under the Fee
Agreement and District No. 1 initiated foreclosure of a lien against Bellamah
property arising under the Fee Agreement.  In June 1988, Bellamah filed a
Chapter 11 bankruptcy petition, and District No. 1 sought and received relief
from the bankruptcy court to enable it to attempt to foreclose on Bellamah's
property.  Subsequently, Bellamah's Chapter 11 proceeding was converted to a
Chapter 7 liquidation.

     The fees due to District No. 1 under the Fee Agreement were projected to be
the primary source of repayment of the 1986 Bonds until development produced
enough revenues to pay the debt service requirement from reasonable mill levies.
At the time of the Bellamah bankruptcy, no homes had been constructed within the
geographic boundaries of District No. 1, and, without the collection of fees
anticipated to be derived from Bellamah's development, District No. 1 determined
that a mill levy of approximately 10,000 mills would have been necessary to pay
1991 debt service on the 1986 Bonds, a level the board of directors of District
No. 1 believed to be uncollectible.  Accordingly, on September 28, 1990,
District No. 1 determined it was insolvent and filed a Chapter 9 petition in
bankruptcy.

     Under District No. 1's plan of reorganization, holders of the 1986 Bonds
received (i) the pro rata distribution of the unexpended bond proceeds in the
amount of approximately $9,300,000 (which amounted to approximately $.356 per
dollar of the creditor claims), and (ii) an exchange refunding bond (the "1992
Bonds") for the remaining portion of such claims.  The total principal amount of
the 1992 Bonds was $21,054,000 (representing the original principal amount of
the 1986 Bonds, plus accrued interest, less distribution of existing funds).
The 1992 Bonds were additionally secured by a Deed of Trust (the "1992 Deed of
Trust") from District No. 1, with respect to all property which it had obtained
from Bellamah in satisfaction of the Fee Agreement.

     At substantially the same time as the issuance of the 1992 Bonds, DCDC, a
Colorado corporation related to The Franklin L. Haney Company, provided a tender
offer to purchase 1992 Bonds from the holders thereof for the price of $.15 per
dollar of principal amount of the 1986 Bonds outstanding on the date of the
filing of the Chapter 9 proceeding by the District.  A vote accepting or
rejecting the plan of reorganization did not constitute an acceptance or
rejection of the offer of DCDC to purchase the 1992 Bonds.

     DCDC eventually purchased substantially all the 1992 Bonds, although in
some instances the purchase price paid was in excess of $.15 per dollar.


                                       12
<PAGE>

     The 1992 Bonds were issued as limited tax obligations of District No. 1,
payable from a mill levy against property within the District not to exceed 35
mills, plus additional development fees paid by developers of property, plus a
pledge of the proceeds of the sale of the real estate encumbered by the 1992
Deed of Trust.

     Subsequent to the bankruptcy of District No. 1, DCDC also offered to
purchase from District No. 1 all of the property pledged pursuant to the 1992
Deed of Trust and outstanding utility service taps which had previously been
delivered to Bellamah, but had been recovered by the District, under the Fee
Agreement.  The proceeds from the sale of the real estate and taps by District
No. 1 to DCDC in 1993, which were deposited with the trustee for the 1992 Bonds,
have defeased the 1992 Bonds under the original Indenture of Trust pursuant to
which the 1992 Bonds were issued, and no taxes, fees or other revenues of
District No. 1 will be required to be collected for the 1992 Bonds,
substantially all of which DCDC has subsequently sold.

DISTRICT MANAGEMENT

     Each District is governed by an elected board of directors consisting of
three members.  While the Act anticipates a five-member board of directors,
directors must be registered electors of the State of Colorado and they or their
spouse must either own taxable real or personal property within the District or
live within the District.  At the present time, DCDC owns approximately 85% of
the property within the Districts.  Property interests within the Districts are
also owned by C. Roger Addlesperger and Joseph Knopinski.  Mr. Knopinski, Mr.
Addlesperger and Ms. Candace Addlesperger are the members of the board of each
of the five Districts.

     C. Roger Addlesperger, one of the directors for each of the Districts, has
consulted for the Franklin L. Haney Company and DCDC on matters pertaining to
the real estate within Dawson Ridge and other developments in the State of
Colorado.  In connection with such consultation, Mr. Addlesperger has received
compensation from The Franklin L. Haney Company, and anticipates having a future
relationship with The Franklin L. Haney Company.  Mr. Addlesperger is a Vice
President of DCDC.  Candace Addlesperger, who is a director of the District, is
Mr. Addlesperger's wife.

     Pursuant to Colorado law, a director must disqualify himself or herself
from voting on any issue in which he or she has a conflict of interest unless he
or she has disclosed such conflict of interest in a certificate filed with the
Colorado Secretary of State and the board of directors at least 72 hours in
advance of any meeting in which such conflicts may arise.  Each of the directors
believes that such laws have been complied with fully.

TOWN AGREEMENTS

     In order to provide for the orderly extension of certain public services of
the Districts, each District and the Town entered into a separate
Intergovernmental Agreement dated August 15, 1985, as amended.  Subsequently, in
connection with the bankruptcy of Bellamah, the Districts and the Town executed
a Suspension Agreement pursuant to which it was agreed that further development
of the Districts would require the submission to the Town, and approval by the
Town, of service plan amendments outlining the anticipated development of the
Districts.  While the Districts have commenced discussions on revised service
plans with the Town, no finalization of the service plan revisions have been
completed.  The Districts anticipate service plan revisions will be completed in
1996, but no assurances can be given of approval of such revisions, and a
failure to receive the Town's approval of such service plan revisions could
interfere with development of each of the Districts, including construction of
certain contemplated golf course and construction of residences.

DISTRICT POWERS

     The operation and administration of each District are controlled by its
board of directors.  The rights, powers, privileges, authority, functions and
duties of the District are established by the laws of the State of Colorado,
particularly the Act.  Each District has the power, among other powers, to enter
into contracts and agreements; to sue and be sued, to incur indebtedness and
issue bonds following approval at an election or to refund any bonded
indebtedness of the District at lower interest rates without an election; to fix
rates, tolls or charges for services or facilities furnished by the District; to
adopt and enforce regulations promulgated by the board; to levy and collect
general ad valorem property taxes; to acquire, dispose of and encumber real and
personal property, to have the management, control and supervision of all the
business affairs of the District and the construction, installation, operation
and maintenance of District improvements; and to exercise the powers of eminent
domain for the condemnation of private property for public use.


                                       13

<PAGE>

DISTRICT LIABILITY

     In the opinion of the board of directors of each District, the insurance
presently held by each District and public employee bonds coverage, together
with the provisions of the Colorado Governmental Immunity Act, Part 1 of Article
10 of Title 24, Colorado Revised Statutes, as amended (the "Immunity Act") will
provide adequate protection for each District and its board against the majority
of potential liability claims.

     The Immunity Act states for political subdivisions of the State of
Colorado, that sovereign immunity acts as a bar to any action against a public
entity, such as any District, but only to the extent and subject to the
conditions provided therein.  The Immunity Act generally provides that a
District is immune from liability resulting from claims for injury which lie in
tort or those which could lie in tort, except for specified actions for damages
or injuries resulting from:  the operation of a motor vehicle of or on behalf of
the District; the operation of any public hospital, correctional facility or
jail; a dangerous condition of any public building of the District; a dangerous
condition caused by the District which interferes with the movement of traffic
on any public highway, road, street or sidewalk; a dangerous condition of any
public facility of the District; and the operation and maintenance of water and
sanitation facilities.  The Immunity Act establishes a limitation on judgments
for the above-described activities such that the maximum allowed for one person
is $150,000, and for an injury to two or more persons, the maximum allowed is
$150,000 per person or $600,000, whichever is less.  The Immunity Act also
provides that in the event the District is unable to pay a settlement or
judgment due to a lack of available funds, the District shall certify a general
ad valorem tax to discharge such settlement or judgment.  In no case shall such
tax exceed a total of ten mills per year of assessment for all outstanding
settlements or judgments.  For injuries occurring prior to July 1, 1986,
sovereign immunity is deemed to be waived to the extent that the District's
insurance covers such injury.  With regard to injuries occurring on and after
such date, a District may, by resolution, increase any maximum amount that may
be recovered from the District for the type of injury described in the
resolution.  However, no District has adopted a resolution to increase such
maximum amounts.  A District may not be held liable either directly or by
indemnification for punitive or exemplary damages.

     A District may not be able to claim governmental immunity and, therefore,
may be subject to certain civil liabilities premised upon certain causes of
action founded in various federal laws.  This could occur, for example, in suits
filed pursuant to 42 U.S.C. Section 1983 alleging the deprivation of the civil
rights of an individual, or suits alleging anti-competitive practices and
violation of the anti-trust laws by the District in the exercise of its
delegated powers.  However, the Immunity Act provides that it applies to any
action against a public entity or public employee in any court of this state
having jurisdiction over any claim brought pursuant to any federal law, if such
action lies in tort or could lie in tort.

BUDGETARY PROCESS

     Each District is subject to the Local Government Budget Law of Colorado,
part 1 of article 1 of title 29, Colorado Revised Statutes, as amended.  Under
this statute, the District's budget is required to be adopted before
certification of a mill levy for the forthcoming calendar year.  The budget is
required to set forth all proposed expenditures for the administration,
operation, maintenance and debt service of the District, including all
expenditures for capital projects to be undertaken or executed in the fiscal
year.  The budget must show the actual figures for the prior fiscal year,
estimated figures projected through the end of the current fiscal year,
including disclosure of all beginning and ending fund balances, and the
anticipated expenditures for the ensuing year.  In addition, it must set forth
the anticipated revenues and other means of financing the proposed expenditures
for the ensuing year.  After the proposed budget is prepared, a notice must be
published indicating that the budget is open for public inspection and that a
hearing will be held on the budget.

     Before the beginning of the ensuing year, the board  of each District must
enact resolutions making appropriations for that year.  The amounts appropriated
may not exceed the amounts fixed in the budget as adopted by the board.  Upon
the adoption of the budget, the board must file certified copies of the budget
with the Colorado Division of Local Government.  In the event of some
contingency which could not have been reasonably foreseen at the time of
adoption of the budget, the board of the District may also authorize the
expenditure of funds in excess of the budget by a resolution adopted by a
majority vote of the board at a public meeting.

     Through the preparation of the budget, and by taking into consideration all
sources of revenue, costs of constructing, operating and maintaining the
facilities of each District, the required tax levy is determined each year.  Any
property tax levy which results in tax revenues for District operations (but not
principal and interest payments on District indebtedness, including the
obligations arising under the Operating Agreement and the Intergovernmental
Agreement) exceeding 105.5% of the amount raised in the previous year (but with
an exemption for increased valuation for assessment attributable to annexation
or inclusions, or increased valuation due to new construction) must be submitted
to the Colorado Division of Local Government for approval.  If approval is not
granted, such approval can be obtained by vote of electors within the District.
However, the provisions of an amendment to the Constitution of the State of
Colorado, approved in the November 3, 1992 general election and commonly


                                       14
<PAGE>

referred to as Amendment One ("Amendment One"), may result in a more restrictive
increase (or a decrease) in property tax revenues and spending for the
Districts.

FINANCIAL STATEMENTS

     Under Colorado statutes, unless exempted (E.G., for insubstantial financial
activity) the board of each District is required to have the financial
statements of the District audited at least annually.  The audited financial
statements must be filed with the board by July 1 of each year, and with the
State Auditor 30 days thereafter.  If such audit is not filed as required by
law, the State Auditor may authorize the County Treasurer holding moneys of the
District generated pursuant to the taxing authority of the District to prohibit
the release of such moneys until the District complies with the audit law.

AMENDMENT ONE

     Amendment One amended the Colorado Constitution to require voter approval
prior to:  (1) imposition of a new tax, tax rate increase, mill levy increase,
valuation for assessment ratio increase, tax extension, or other change in
policy which results in a net gain of tax revenues; or (2) creation for more
than one fiscal year of any debt or other financial obligation, with limited
exceptions.  Authorization for the execution of the Operating Agreement and the
Intergovernmental Agreement was approved by the electors of each District in
compliance with Amendment One on November 7, 1995.

     Amendment One also limits increases in property tax revenues, with certain
adjustments (including voter-approved revenue changes), (1) for local
governments, to the total of inflation plus the net percentage change in actual
value of all real property within the local government due to construction of
improvements and additional taxable real property; and (2) for school districts,
to the total of inflation plus the percentage change in student enrollment.  In
addition, Amendment One limits percentage increases in spending, with certain
adjustments, (including voter-approved revenue changes) (1) for local
governments, to the total of inflation plus the net percentage change in actual
value of all real property within the local government due to construction of
improvements and additional taxable real property and (2) for school districts,
to a total of inflation plus the percentage change in student enrollment.
Revenues collected in excess of limits are required to be refunded unless voters
approve a revenue change as an offset.

     However, Amendment One provides that the future creation of local
government debt shall increase (and retiring or refinancing debt shall lower)
fiscal year property tax revenue by the annual debt service so funded.

     Amendment One also provides that if annual local government revenue is less
than the annual payments on general obligation bonds, pensions and final court
judgments, the election requirements and the limits for percentage changes in
spending and property tax revenues will be suspended to provide for the
deficiency.

     It is not possible to predict the effect of Amendment One on future
activities of the Districts, including their ability to raise taxes and other
funds to generate sufficient revenues for their general funds, to undertake
additional programs or to engage in any subsequent financing activities.


                                  TAX EXEMPTION

GENERAL

     On the date of issuance of the Bonds, Special Tax Counsel delivered its
opinion to the effect that the interest on the Bonds is excludable from gross
income for purposes of federal income tax under existing laws as enacted and
construed on the date of such opinion, assuming the accuracy of the
certifications of the Issuer, and continuing compliance by the Issuer with the
requirements of the Internal Revenue Code of 1986, as amended (the "Code").
Interest on the Bonds will not be an item of tax preference for purposes of
either individual or corporate alternative minimum tax (the "AMT") for
individuals or corporations under the Code.

     The AMT for corporations is levied for taxable years beginning after
December 31, 1986 in addition to the corporate regular tax in certain cases.
The AMT, if any, depends upon the corporation's alternative minimum taxable
income ("AMTI"), which is the corporation's taxable income with certain
adjustments.  One of the adjustment items used in computing AMTI of a
corporation (excluding S Corporations, Regulated Investment Companies, Real
Estate Investment Trusts and REMICs) is an amount equal to 75% of the excess of
such corporation's "adjusted current earnings" over an amount equal to its AMTI
(before such adjustment item and the alternative tax net operating loss
deduction).  The term "adjusted current earnings" would include all tax-exempt
interest, including interest on the Bonds.


                                       15
<PAGE>

     Section 59A of the Code imposes an "environmental" tax with respect to
corporations on the excess over $2,000,000 of a corporation's "modified
alternative minimum taxable income", which would include interest on the Bonds.
The environmental tax applied with respect to taxable years beginning after
December 31, 1986 and before January 1, 1996.

     Under Section 884 of the Code, interest on the Bonds is to be taken into
account in the computation of the foreign branch profits tax.

     Ownership of the Bonds may result in collateral federal income tax
consequences to certain taxpayers, including, without limitation, financial
institutions, property and casualty insurance companies, individual recipients
of Social Security or Railroad Retirement benefits, certain S corporations with
"excess net passive income" and taxpayers who may be deemed to have incurred or
continued indebtedness to purchase or carry the Bonds.  Special Tax Counsel
expresses no opinion as to such collateral tax consequences.  Purchasers of the
Bonds should consult their own tax advisors as to collateral federal income tax
consequences.

     The Code sets forth certain requirements which must be met subsequent to
the issuance and delivery of the Bonds for interest thereon to remain excludable
from the gross income of the owners of the Bonds for federal income tax
purposes, including investment restrictions, periodic payments of arbitrage
profits to the United States, requirements regarding the proper use of bond
proceeds and the facilities financed therewith and certain other matters.  The
Issuer has covenanted to comply with such requirements.  Noncompliance with such
requirements could cause the interest on the Bonds to be includable in the gross
income of the owners of the Bonds for federal income tax purposes, retroactive
to the date of issue of the Bonds.

BOND PREMIUM

     An investor may purchase a Bond at a price in excess of its stated
principal amount.  Such excess is characterized as "bond premium" and must be
amortized by the investor on a constant yield basis over the remaining term of
the Bond in a manner that takes into account potential call dates and call
prices.  An investor cannot deduct amortized bond premium relating to a
tax-exempt bond for federal income tax purposes.  However, as bond premium is
amortized, it reduces the investor's basis in the Bond.  Investors who purchase
a Bond at a premium should consult their own tax advisors regarding the
amortization of bond premium and its affect on the Bond's basis for purposes of
computing gain or loss in connection with the sale, exchange, redemption or
early retirement of the Bond.

ORIGINAL ISSUE DISCOUNT

     The initial offering price of one maturity of the Bonds was less than the
principal amount payable at maturity.  The difference between the issue price of
such maturity of the Bonds and the amount payable at maturity is original issue
discount.  The issue price (the "Issue Price") for such maturity of the Bonds
was the price at which a substantial amount of such maturity of the Bonds is
first sold to the public.

     For an investor who purchased a Bond of such maturity in the initial
offering at the Issue Price for such maturity and who holds such Bond to its
stated maturity, subject to the condition that the Authority complies with the
covenants discussed under "TAX EXEMPTION - General" above, (a) the full amount
of original issue discount with respect to such Bond constitutes interest which
is not includable in the gross income of the owner thereof for federal income
tax purposes and (b) such owner will not realize taxable capital gain or market
discount upon payment of such Bond at its stated maturity; such interest is not
included as an item of tax preference in computing an adjustment used in
determining the alternative minimum tax for individuals and corporations under
the Code, but is taken into account in computing an adjustment used in
determining the alternative minimum tax for certain corporations under the Code,
as described above; and the accretion of original issue discount in each year
may result in an alternative minimum tax liability for corporations or certain
other collateral federal income tax consequences in each year even though a
corresponding cash payment may not be received until a later year.

     Owners of Bonds who dispose of Bonds prior to the stated maturity (whether
by sale, redemption or otherwise), who purchase Bonds in the initial offering,
but at a price different from the Issue Price or who purchase Bonds subsequent
to the initial offering at a price other than the Bond's Issue Price plus
accredited original issue discount should consult their own tax advisors.

     Brownstein Hyatt Farber & Strickland, P.C., special counsel to the
Authority, has advised the Authority that in its opinion, the exchange of the
Bonds for Exchange Bonds pursuant to the Exchange Offer will not be treated as
an "exchange" for federal income tax purposes because the Exchange Bonds will
not be considered to differ materially in kind or extent from the Bonds.
Rather, the Exchange Bonds received by a holder will be treated as a
continuation of the Bonds in the hands of such holder.  As a result, there will
be no federal income tax consequences to holders exchanging Bonds for Exchange
Bonds pursuant to the Exchange Offer.


                                       16
<PAGE>

                          DESCRIPTION OF EXCHANGE BONDS


GENERAL

          The Exchange Bonds will be delivered to the purchasers thereof only as
fully registered bonds in the denominations of $100,000 and integral multiples
of $5,000 in excess thereof in book-entry only form as described below under the
subheading "Book-Entry-Only System" and as provided in the Indenture.

          The Exchange Bonds will bear interest at the rates, and will mature,
subject to the right of redemption described below, in the principal amounts and
on the dates set forth on the cover page hereof.  Interest on the Exchange Bonds
from the dated date thereof will be payable only on December 1, 1996 and
semiannually thereafter on each June 1 and December 1 (each, an "Interest
Payment Date") and until maturity or prior redemption.

          Interest on the Exchange Bonds is payable in lawful money of the
United States of America by check mailed by first class mail on each Interest
Payment Date to the registered owner as of the close of business on the 15th day
of the calendar month immediately preceding such Interest Payment Date (whether
or not a business day) (the "Record Date"); provided, however, that any owners
of $1,000,000 or more of the principal amount of the Exchange Bonds may, at any
time prior to a Record Date, give to the Trustee written instructions for
payment of such interest on each succeeding Interest Payment Date by wire
transfer.  The principal on the Exchange Bonds and premium, if any, thereon are
payable when due upon presentation thereof at the principal corporate trust
office of the Trustee in lawful money of the United States of America.

          Any such interest not so timely paid or duly provided for shall cease
to be payable to the person who is the registered owner thereof on the Record
Date and shall be payable to the person who is the registered owner thereof at
the close of business on a special record date (the "Special Record Date")
established for the payment of the defaulted interest.  Such Special Record Date
shall be fixed by the Trustee whenever moneys become available for payment of
the defaulted interest, and notice of the Special Record Date shall be given to
the registered owners of the Exchange Bonds not less than ten days prior to the
Special Record Date by first-class mail to each such registered owner as shown
on the registration books kept by the Trustee on a date selected by the Trustee.
Such notice shall state the date of the Special Record Date and the date fixed
for the payment of such defaulted interest.

REDEMPTION PROVISIONS

          MANDATORY SINKING FUND REDEMPTION.  The Exchange Bonds maturing
December 1, 2011 and December 1, 2017 shall be subject to mandatory sinking fund
redemption at a redemption price of 100% of the principal amount thereof, plus
accrued interest to the date fixed for redemption, on December 1 of each of the
years and in the principal amounts set forth below:


          Exchange Bonds Maturing             Exchange Bonds Maturing
          December 1, 2011                    December 1, 2017
          ----------------------              -----------------------

          Year              Amount        Year                Amount
          ----              ------        ----                ------

          2010              $3,755,000    2012                $4,250,000
          2011*              3,995,000    2013                 4,515,000
                                          2014                 4,795,000
                                          2015                 5,095,000
                                          2016                 5,415,000
                                          2017*                5,750,000

_______________
*Stated Maturity

The Exchange Bonds to be redeemed will be selected by the Trustee by lot.

          EXTRAORDINARY MANDATORY REDEMPTION.  The Exchange Bonds are subject to
extraordinary mandatory redemption in whole at a redemption price of 100% of the
principal amount thereof plus accrued interest to the date fixed for redemption
from proceeds of prepayment of the Collateral.  See "Credit Enhancement."


                                       17
<PAGE>

BOOK-ENTRY-ONLY SYSTEM

     A portion of the information contained in this section has been extracted
from a report from DTC entitled "Book-Entry-Only Municipals".  No representation
is made by the Authority or the Credit Enhancement Provider as to the
completeness or the accuracy of such information or as to the absence of
material adverse changes in such information subsequent to the date hereof.

     DTC will act as securities depository for the Bonds.  The ownership of one
fully registered Bond for each maturity set forth on the cover page hereof, each
in the aggregate principal amount of such maturity, will be registered in the
name of CEDE & CO., as nominee for DTC.  DTC is a limited-purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code, and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Securities Exchange Act of 1934, as amended.
DTC was created to hold securities of its participants (the "Direct
Participants") and to facilitate the clearance and settlement of securities
transactions among Direct Participants, thereby eliminating the need for
physical movement of securities certificates.  Direct Participants include
securities brokers and dealers, banks, trust companies, clearing corporations,
and certain other organizations, some of whom (and/or their representatives) own
DTC.  Access to the DTC system is also available to others such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a Direct Participant, either directly or indirectly ("Indirect
Participants").  The Rules applicable to DTC and the Direct Participants and
Indirect Participants are on file with the Securities and Exchange Commission.

     Purchases of Bonds under the DTC system must be made through Direct
Participants, who will receive a credit for the Bonds on DTC's records.  The
ownership interest of each actual purchaser of each Bond (each a "Beneficial
Owner") will be recorded through the records of the Direct Participants and
Indirect Participants.  Beneficial Owners will not receive written confirmations
of their purchase, but Beneficial Owners are expected to receive written
confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the Direct Participant or Indirect
Participant through which the Beneficial Owner entered into the transaction.
Transfers of ownership interests in the Bonds will be accomplished by book
entries made by DTC and by the Direct Participants and Indirect Participants
which act on behalf of the Beneficial Owners.  Beneficial Owners will not
receive certificates representing their ownership interest in the Bonds, except
as specifically provided in the Indenture.  NEITHER THE AUTHORITY  NOR THE
TRUSTEE WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO DIRECT PARTICIPANTS OR
INDIRECT PARTICIPANTS OR THE PERSONS FOR WHOM THEY ACT AS NOMINEES WITH RESPECT
TO THE PAYMENTS TO, OR THE PROVIDING OF NOTICE FOR, SUCH DIRECT PARTICIPANTS OR
INDIRECT PARTICIPANTS OR THE PERSONS FOR WHOM THEY ACT AS NOMINEES.

     All notices that are to be given to owners of the Bonds by the Trustee will
be given only to DTC as registered owner.  Conveyance of notices and other
communications by DTC to Direct Participants, by Direct Participants to Indirect
Participants, and by Direct Participants and Indirect Participants to Beneficial
Owners will be governed by arrangements among them, subject to any statutory or
regulatory requirements as may be in effect from time to time.

     SO LONG AS CEDE & CO. IS THE REGISTERED OWNER OF THE BONDS, AS NOMINEE OF
DTC, REFERENCES HEREIN TO THE BONDHOLDERS OR REGISTERED OWNERS OF THE BONDS
SHALL MEAN CEDE & CO. AND SHALL NOT MEAN THE BENEFICIAL OWNERS OF THE BONDS.
BENEFICIAL OWNERS OF THE BONDS OR INTERESTS IN THE BONDS WILL NOT RECEIVE OR
HAVE THE RIGHT TO RECEIVE PHYSICAL DELIVERY OF SUCH BONDS.

     Under the Indenture, payment made by the Trustee to DTC or its nominee
shall satisfy the Authority's obligation under the Indenture to the extent of
such payments.

     Principal, redemption price, if any, and interest payments on the Bonds
will be made to DTC or its nominee, CEDE & CO., as registered owners of the
Bonds.  Upon receipt of moneys, DTC's current practice is to credit immediately
the accounts of the Direct Participants in accordance with their respective
holdings shown on the records of DTC.  Payments by Direct Participants and
Indirect Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is now the case with municipal
securities held for the accounts of customers in bearer form or registered in
"street name," and will be the responsibility of such Direct Participants and
Indirect Participants and not of DTC, the Trustee or the Authority, subject to
any statutory and regulatory requirements as may be in effect from time to time.

     For every transfer and exchange of the Bonds, the Beneficial Owners may be
charged a sum sufficient to cover any tax, fee or other governmental charge that
may be imposed in relation thereto.

     DTC may determine to discontinue providing its services with respect to the
Bonds at any time by giving notice to the Authority and the Trustee and
discharging its responsibilities with respect thereto under applicable law.
Under such circumstances, bond certificates are required to be delivered as
described in the Indenture.  Each Beneficial Owner, upon registration of
certificates held in such Beneficial Owner's name, will become a Bondholder.


                                       18
<PAGE>

     The Authority, in its sole discretion, may determine that continuation of
the system of book-entry transfers through DTC (or a successor securities
depository) is not in the best interests of the Beneficial Owners.  In such
event, bond certificates will be delivered as described in the Indenture.

     In the event that the Book-Entry-Only System is discontinued, the following
provisions would apply to the Bonds.  The Trustee shall keep the registration
books for the Bonds at its principal corporate trust office. Subject to the
further conditions contained in the Indenture, the Bonds may be transferred or
exchanged for one or more Bonds of the same maturity in different authorized
denominations upon surrender thereof at the principal corporate trust office of
the Trustee by the registered owners or their duly authorized attorneys; upon
surrender of any Bonds to be transferred or exchanged, the Trustee shall record
the transfer or exchange in its registration books and shall authenticate and
deliver new Bonds of the same maturity appropriately registered and in
appropriate authorized denominations; during the 15 days immediately preceding
the date of mailing of any notice of redemption or at any time following the
mailing of any notice of redemption, the Trustee shall not be required to effect
or register any transfer or exchange of any Bond which has been selected for
such redemption, except that Bonds properly surrendered for partial redemption
may be exchanged for new Bonds of the same maturity in authorized denominations
equal in the aggregate to the unredeemed portion; the Authority and the Trustee
shall be entitled to treat the registered owners of the Bonds, as their names
appear in the registration books as of the appropriate dates, as the owners of
such Bonds for all purposes under the Indenture.  No transfer or exchange made
other than as described above and in the Indenture shall be valid or effective
for any purposes under the Indenture.

DEBT SERVICE REQUIREMENTS ON THE BONDS

     The table below indicates total debt service on the Bonds for the periods
indicated.

                                                              Total Debt
           Period Ending                                       Service
           December 31     Principal         Interest         Requirement
           -------------   ---------         --------         -----------

                1996            -         $3,099,151.88   $  3,099,151.88
                1997            -          4,132,202.50      4,132,202.50
                1998            -          4,132,202.50      4,132,202.50
                1999     $1,980,000.00     4,132,202.50      6,112,202.50
                2000      2,095,000.00     4,018,352.50      6,113,352.50
                2001      2,215,000.00     3,897,890.00      6,112,890.00
                2002      2,340,000.00     3,770,527.50      6,110,527.50
                2003      2,475,000.00     3,635,977.50      6,110,977.50
                2004      2,620,000.00     3,489,952.50      6,109,952.50
                2005      2,780,000.00     3,332,752.50      6,112,752.50
                2006      2,950,000.00     3,163,172.50      6,113,172.50
                2007      3,115,000.00     2,995,022.50      6,110,022.50
                2008      3,310,000.00     2,798,777.50      6,108,777.50
                2009      3,525,000.00     2,586,937.50      6,111,937.50
                2010      3,755,000.00     2,357,812.50      6,112,812.50
                2011      3,995,000.00     2,118,431.25      6,113,431.25
                2012      4,250,000.00     1,863,750.00      6,113,750.00
                2013      4,515,000.00     1,598,125.00      6,113,125.00
                2014      4,795,000.00     1,315,937.50      6,110,937.50
                2015      5,095,000.00     1,016,250.00      6,111,250.00
                2016      5,415,000.00       697,812.50      6,112,812.50
                2017      5,750,000.00       359,375.00      6,109,375.00
                        --------------   --------------   ---------------
               Total    $66,975,000.00   $60,512,615.63   $127,487,615.63
                        --------------   --------------   ---------------
                        --------------   --------------   ---------------


                         SECURITY AND SOURCE OF PAYMENT

     The Bonds are limited obligations of the Authority and are secured under
the provisions of the Indenture and payable from the funds held under the
Indenture (including capitalized interest deposited from the proceeds of the
Bonds), Revenues of the Authority and payments made under the Credit
Enhancement.

     Revenues of the Authority include, without limitation, all income, rents,
receipts and profits of the Authority (excluding certain payments for operation
and maintenance expenses and specifically restricted gifts, bequests and other
forms of


                                       19
<PAGE>

contributions).  Revenues will include income derived from operation of the golf
course and the swimming and tennis facilities which the Authority intends to
construct on the Real Estate.  See "The Project."  The Authority is acting as an
instrumentality of the District.  On November 7, 1995, the voters of the
District and the Related Districts approved the execution and delivery of the
Operating Agreement and the Intergovernmental Agreement obligating the Related
Districts to provide funds to the District for payment to the Authority to the
extent that revenues from the Project are insufficient to fund debt service on
the Bonds and operating expenses of the Project.  Such funds would be derived
from a mill levy that is subject to certain limitations, including a 35-mill
limitation on taxable property within the District and the Related Districts.
The Operating Agreement and the Intergovernmental Agreement will not become
effective until an amendment to the Districts' service plans including the mill
levy is approved by the Town, or the Districts receive an acceptable opinion of
counsel acceptable to the Districts that such mill levy may be imposed without
regard to any service plan amendment.  Each of the Districts has covenanted in
the Recreational Facilities Agreement to take all reasonable action necessary to
effect such service plan amendment or to obtain such opinion.  In order to
provide an alternate source of revenue, the Authority entered into a Development
Agreement dated as of March 1, 1996 (the "Development Agreement") with DCDC, the
owner of approximately 85% of the property in the Districts, providing for a
payment in lieu of taxes by DCDC and all subsequent owners of the property owned
by DCDC in the Districts.  The amount of such payment will be equivalent to the
amount which would be generated by a mill levy against all of the taxable real
and personal property in the Districts pursuant to the Operating Agreement and
the Intergovernmental Agreement.  Summaries of certain provisions of the
Operating Agreement, the Intergovernmental Agreement, the Development Agreement
and the Recreational Facilities Agreement appear in Appendix A.

     Debt service on the Securities for the period prior to March 1, 1998 is
payable from the proceeds of the Bonds.  As credit enhancement for the
Securities, the Credit Enhancement Provider executed a Collateralized Credit
Enhancement Agreement for the benefit of the Trustee, pursuant to which the
Credit Enhancement Provider is obligated to make payment of debt service on the
Securities for the period commencing March 1, 1998, but the Credit Enhancement
Provider's liability is limited to the Collateral pledged and assigned to the
Trustee.  The Collateral to be assigned by the Credit Enhancement Provider
consists of the Series B REMIC Bonds and the debt service payments on the Series
B REMIC Bonds, which will be payable effectively from certain payments to be
made by the U.S. Government under a lease for space in a building in the
District of Columbia.  See "Credit Enhancement" and Appendix A - "Summary of
Principal Bond Documents and Definitions of Certain Terms - The Lease."  The
amounts required to be paid on the Series B REMIC Bonds, if timely paid, will be
sufficient to pay principal of and interest on the Bonds when due for the period
commencing March 1, 1998, but not to pay Extra Payments.

     Pursuant to the Reimbursement Agreement between the Authority and the
Credit Enhancement Provider, monies applied by the Trustee from the proceeds of
the Series B REMIC Bonds to pay principal and interest on the Bonds are required
to be reimbursed to the Credit Enhancement Provider from operating revenues of
the Authority (which are currently expected to be primarily golf course revenues
and mill levy payments by the Districts).  There is no assurance that such
revenues will be sufficient to enable the Authority to meet these obligations,
and a failure to do so constitutes a default under the Reimbursement Agreement.
If such a default occurs and the Credit Enhancement Provider is not in default
under the Collateralized Credit Enhancement Agreement, the Credit Enhancement
Provider is entitled to exercise various remedies, including foreclosing on the
Deed of Trust, thereby terminating the rights of the Bondholders in various
security (other than the Collateral), including the Authority's interest in the
Project.  However, such foreclosure is permitted only if the Credit Enhancement
Provider obtains an opinion of Special Tax Counsel acceptable to the Trustee
that such foreclosure will not adversely affect the exclusion of interest on the
Bonds from gross income for federal income tax purposes.  See "The Deed of
Trust," "Collateralized Credit Enhancement Agreement" and "Reimbursement
Agreement" in Appendix A - "Summary of Principal Bond Documents and Definitions
of Certain Terms."


                               CREDIT ENHANCEMENT

     The Credit Enhancement Provider executed the Collateralized Credit
Enhancement Agreement for the benefit of the Trustee.  Pursuant to the
Collateralized Credit Enhancement Agreement, the Credit Enhancement Provider has
agreed to provide to the Trustee amounts sufficient to provide for the due,
prompt and complete payment of the Bonds, including principal and interest
payable thereunder for the period commencing March 1, 1998 (but excluding
payments with respect to premium on the Bonds, interest on the Bonds in excess
of the pre-default rate thereon, Additional Interest and amounts due solely as a
result of acceleration or redemption of the Bonds (collectively, "Extra
Payments")) all of which shall be paid solely from payments on the Series B
REMIC Bonds.

     In order to secure its obligations under the Collateralized Credit
Enhancement Agreement, the Credit Enhancement Provider has pledged and delivered
to the Trustee the Series B REMIC Bonds payable from an interest in a trust
estate (the "REMIC Trust Estate") under an indenture of trust (the "REMIC
Indenture") between BFC Finance Corp. and SouthTrust Bank of Alabama, National
Association (the "REMIC Trustee"), in accordance with the provisions of a Bond
Pledge and Security Agreement between the Credit Enhancement Provider, the
Trustee and the REMIC Trustee.  An election will be made to have the REMIC Trust
Estate treated as a "real estate mortgage investment conduit" for federal income
tax purposes.


                                       20
<PAGE>

     The Series B REMIC Bonds, along with another series of bonds representing a
regular interest in the REMIC Trust Estate (the "Series A REMIC Bonds"), will be
payable on a parity with the Series A REMIC Bonds from amounts paid on notes
(the "Notes") held in the REMIC Trust Estate, and such payments will be pledged
as Collateral and used to pay the debt service payments on the Bonds described
above.  Certain of the Notes (the "Acquisition and Construction Notes") will be
issued by Parcel 49C Limited Partnership, a District of Columbia limited
partnership ("49C"), in respect of loans to 49C related to the acquisition and
construction by 49C of an office building (with parking garage) in the District
of Columbia commonly referred to as Portals II.  Space in such office building
has been leased by 49C to the U.S. Government pursuant to a lease agreement
dated August 12, 1994, as amended and supplemented (the "Lease").  The
Acquisition and Construction Notes will initially either be issued to or
acquired by Building Finance Company of Tennessee, Inc., a Tennessee corporation
(the "Company").  49C will assign the Lease and rent payable thereunder to the
Company as collateral for the Acquisition and Construction Notes.  The Company
will transfer the Acquisition and Construction Notes and the collateral therefor
to BFC Finance Corp., a subsidiary of the Company, which will then assign all
such assets to the trustee for the REMIC Trust Estate.  Amounts payable on the
Acquisition and Construction Notes (and, in turn, amounts payable on the Series
A REMIC Bonds and the Series B REMIC Bonds other than certain initial interest
on the Series A REMIC Bonds) are expected to come from the portion of payments
under the Lease which is not subject to set-aside by the U.S. Government (the
"Non Set-Off Lease Payments").  The Non Set-Off Lease Payments received under
the Lease are expected to be sufficient to pay principal and interest on both
the Series A REMIC Bonds and the Series B REMIC Bonds when due.  The amounts
required to be paid as principal and interest on the Series B REMIC Bonds (which
amounts will be paid to the Trustee), if timely paid, will be sufficient to pay
principal and interest on the Bonds when due for the period commencing March 1,
1998, but not to pay Extra Payments.  Nonpayment of Extra Payments, in and of
itself, will not constitute an Event of Default under the Indenture or give rise
to the right to foreclose under the Deed of Trust.  See "The Deed of Trust" and
"The Lease" in Appendix A -"Summary of Principal Bond Documents and Definitions
of Certain Terms."

     The trustee for the REMIC Trust Estate is also to be the beneficiary of
certain casualty insurance policies which are to be purchased with respect to
Portals II.  In the event the Lease is terminated as a result of casualty or
condemnation, proceeds of such insurance policies or of any condemnation award
would be used to redeem the Series B REMIC Bonds and such redemption proceeds
would be used to redeem the Bonds.  There can be no assurance that insurance or
condemnation proceeds would be received in amounts sufficient to redeem all or
any of the Bonds.  See "The Bonds - Redemption Provisions - Extraordinary
Mandatory Redemption."

     In the event that the Series B REMIC Bonds are prepaid in full while the
Securities are outstanding, the proceeds of such prepayment will be used to
redeem the Securities.  The Acquisition and Construction Notes permit optional
prepayments in full to be made on and after December 1, 2015.  Under the REMIC
Indenture, prepayments of the Acquisition and Construction Notes requires
prepayment of the Series B REMIC Bonds.

     The Authority will be required to reimburse the Credit Enhancement Provider
for such payments pursuant to the Reimbursement Agreement.  See Appendix A -
"Summary of Bond Documents and Definitions of Certain Terms - Reimbursement
Agreement."
                               THE EXCHANGE OFFER

PURPOSE AND EFFECT OF THE EXCHANGE OFFER

     The Bonds were originally sold by the Authority on March 27, 1996 to the
Initial Purchaser pursuant to the Purchase Agreement.  The Initial Purchaser
subsequently resold the Bonds to qualified institutional buyers in reliance on
Rule 144A under the Securities Act and to an institutional accredited investor
that agreed to comply with certain transfer restrictions and other conditions.
As a condition to the Purchase Agreement, the Authority and the Credit
Enhancement Provider entered into the Registration Rights Agreement with the
Initial Purchaser (the "Registration Rights Agreement").  The Registration
Rights Agreement provides that (i) the Authority and the Credit Enhancement
Provider will file an Exchange Offer Registration Statement with the Commission
on or prior to 270 days after the Issue Date, (ii) the Authority and the Credit
Enhancement Provider will use their best efforts to have the Exchange Offer
Registration Statement declared effective by the Commission on or prior to 365
days after the Issue Date, and (iii) unless the Exchange Offer would not be
permitted by applicable law or Commission policy, the Authority will commence
the Exchange Offer and use its best efforts to issue on or prior to 30 business
days after the date on which the Exchange Offer Registration Statement was
declared effective by the Commission, Exchange Bonds in exchange for all Bonds
tendered prior thereto in the Exchange Offer.  If (a) the Authority and the
Credit Enhancement Provider fail to file any of the Registration Statements
required by the Registration Rights Agreement on or before the date specified
for such filing, (b) any of such Registration Statements is not declared
effective by the Commission on or prior to the date specified for such
effectiveness (the "Effectiveness Target Date"), or (c) the Authority fails to
consummate the Exchange Offer within 30 business days of the Effectiveness
Target Date with respect to the Exchange Offer Registration Statement (each such
event referred to in clauses (a) through (d) above a "Nonregistration Event"),
then the Authority will pay Additional Interest to each holder of Securities,
additional interest calculated at the rate of 1% per annum on the principal
amount of Securities held by such holder.  Additional Interest, if


                                       21
<PAGE>

any, shall be due and payable on each Interest Payment Date; provided that (1)
Additional Interests shall be paid solely to the extent funds therefor are
available from Revenues as provided for in the Indenture, (2) no Additional
Interest shall be paid while any installment of interest (other than Additional
Interest) or principal is due and payable under the Indenture or (unless paid
from Revenues received under the Development Agreement) any amount is due to the
Credit Enhancement Provider under the Reimbursement Agreement, (3) the Bonds
shall not accelerate as a result of nonpayment of Additional Interest and (4)
neither nonpayment of Additional Interest nor a Nonregistration Event shall
constitute an event of default under the Indenture.  Following registration
under the Act of the Bonds for resale by the holders thereof, the payment of
Additional Interest will cease.  Upon the Exchange Offer Registration Statement
being declared effective, the Authority will offer the Exchange Bonds in
exchange for surrender of the Bonds.  The Authority will keep the Exchange Offer
open for not less than 20 business days (or longer if required by applicable
law) after the date on which notice of the Exchange Offer is mailed to the
holders of the Bonds.  For each Bond surrendered to the Authority pursuant to
the Exchange Offer, the holder of such Bond will receive an Exchange Bond having
a principal amount equal to that of the surrendered Bond.  Interest on each
Exchange Bond will accrue from the date of its original issue.

     Under existing interpretations of the staff of the Commission contained in
several no-action letters to third parties, the Exchange Bonds would in general
be freely tradeable after the Exchange Offer without further registration under
the Securities Act.  However, any purchaser of Bonds who is an "affiliate" of
the Authority or who intends to participate in the Exchange Offer for the
purpose of distributing the Exchange Bonds (i) will not be able to rely on the
interpretation of the staff of the Commission, (ii) will not be able to tender
its Bonds in the Exchange Offer and (iii) must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
sale or transfer of the Bonds, unless such sale or transfer is made pursuant to
an exemption from such requirements.

     Each holder of the Bonds (other than certain specified holders) who wishes
to exchange the Bonds for Exchange Bonds in the Exchange Offer will be required
to represent in the Letter of Transmittal that (i) it is not an affiliate of the
Authority, (ii) the Exchange Bonds to be received by it were acquired in the
ordinary course of its business and (iii) at the time of commencement of the
Exchange Offer, it has no arrangement with any person to participate in the
distribution (within the meaning of the Securities Act) of the Exchange Bonds.
In addition, in connection with any resales of Exchange Bonds, any Participating
Broker-Dealer who acquired the Bonds for its own account as a result of market
making or other trading activities must deliver a prospectus meeting the
requirements of the Securities Act.  The Commission has taken the position that
Participating Broker-Dealers may fulfill their prospectus delivery requirements
with respect to the Exchange Bonds (other than a resale of an unsold allotment
from the original sale of the Bonds) with the prospectus contained in the
Exchange Offer Registration Statement.  Under the Registration Rights Agreement,
the Authority is required to allow Participating Broker-Dealers and other
persons, if any, subject to similar prospectus delivery requirements to use the
prospectus contained in the Exchange Offer Registration Statement in connection
with the resale of such Exchange Bonds.

     Holders of Bonds will be required to make certain representations to the
Authority (as described in the Registration Rights Agreement) in order to
participate in the Exchange Offer.

     The summary herein of certain provisions of the Registration Rights
Agreement does not purport to be complete and is subject to, and is qualified in
its entirety by, all the provisions of the Registration Rights Agreement, a copy
of which is filed as an exhibit to the Exchange Offer Registration Statement of
which this Prospectus is a part.

     Following the consummation of the Exchange Offer, holders of the Bonds who
were eligible to participate in the Exchange Offer, but who did not tender their
Bonds will not have any further registration rights and such Bonds will continue
to be subject to certain restrictions on transfer.  Accordingly, the liquidity
of the market for such Bonds could be adversely affected.

TERMS OF THE EXCHANGE OFFER

     Upon the terms and subject to the conditions set forth in this Prospectus
and in the Letter of Transmittal, the Authority will accept any and all Bonds
validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on
the Expiration Date.  The Authority will issue $1,000 principal amount of
Exchange Bonds in exchange for each $5,000 principal amount of outstanding Bonds
accepted in the Exchange Offer.  Holders may tender some or all of their Bonds
pursuant to the Exchange Offer.  However, Bonds may be tendered only in integral
multiples of $5,000.

     The form and terms of the Exchange Bonds are the same as the form and terms
of the Bonds except that (i) the Exchange Bonds bear a Series B designation and
a different CUSIP Number from the Bonds, (ii) the Exchange Bonds have been
registered under the Securities Act and hence will not bear legends restricting
the transfer thereof and (iii) the holders of the Exchange Bonds will not be
entitled to certain rights under the Registration Rights Agreement, including
the provisions providing for an increase in the interest rate on the Bonds in
certain circumstances relating to the timing of the Exchange Offer, all of which
rights will terminate


                                       22
<PAGE>

when the Exchange Offer is terminated.  The Exchange Bonds will evidence the
same debt as the Bonds and will be entitled to the benefits of the Indenture.

     As of the date of this Prospectus, $66,975,000 aggregate principal amount
of Bonds were outstanding.  The Authority has fixed the close of business on
________, 1997 as the record date for the Exchange Offer for purposes of
determining the persons to whom this Prospectus and the Letter of Transmittal
will be mailed initially.

     Holders of Bonds do not have any appraisal or dissenters' rights under the
General Corporation Law of Delaware or the Indenture in connection with the
Exchange Offer.  The Authority intends to conduct the Exchange Offer in
accordance with the applicable requirements of the Exchange Act and the rules
and regulations of the Commission thereunder.

     The Authority shall be deemed to have accepted validly tendered Bonds when,
as and if the Authority has given oral or written notice thereof to the Exchange
Agent.  The Exchange Agent will act as agent for the tendering holders for the
purpose of receiving the Exchange Bonds from the Authority.

     If any tendered Bonds are not accepted for exchange because of an invalid
tender, the occurrence of certain other events set forth herein or otherwise,
the certificates for any such unaccepted Bonds will be returned, without
expense, to the tendering holder thereof as promptly as practicable after the
Expiration Date.

     Holders who tender Bonds in the Exchange Offer will not be required to pay
brokerage commissions or fees or, subject to the instructions in the Letter of
Transmittal, transfer taxes with respect to the exchange of Bonds pursuant to
the Exchange Offer.  The Authority will pay all charges and expenses, other than
transfer taxes in certain circumstances, in connection with the Exchange Offer.
See "Fees and Expenses."

EXPIRATION DATE; EXTENSIONS; AMENDMENTS

     The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
____________ 1997, unless the Authority, in its sole discretion, extends the
Exchange Offer, in which case the term "Expiration Date" shall mean the latest
date and time to which the Exchange Offer is extended.  Notwithstanding the
foregoing, the Authority will not extend the Expiration Date beyond           ,
1997.

     In order to extend the Exchange Offer, the Authority will notify the
Exchange Agent of any extension by oral or written notice and will mail to the
registered holders an announcement thereof, each prior to 9:00 a.m., New York
City time, on the next business day after the previously scheduled expiration
date.

     The Authority reserves the right, in its sole discretion, (i) to delay
accepting any Bonds, to extend the Exchange Offer or to terminate the Exchange
Offer if any of the conditions set forth below under "-Conditions" shall not
have been satisfied, by giving oral or written notice of such delay, extension
or termination to the Exchange Agent or (ii) to amend the terms of the Exchange
Offer in any manner.  Any such delay in acceptance, extension, termination or
amendment will be followed as promptly as practicable by oral or written notice
thereof to the registered holders.

INTEREST ON THE EXCHANGE BONDS

     The Exchange Bonds will bear interest from their date of issuance.  Holders
of Bonds that are accepted for exchange will receive, in cash, accrued interest
thereon to, but not including, the date of issuance of the Exchange Bonds.  Such
interest will be paid with the first interest payment on the Exchange Bonds on
_______________, 1997.  Interest on the Bonds accepted for exchange will cease
to accrue upon issuance of the Exchange Bonds.

     Interest on the Securities is payable semi-annually on each June 1 and
December 1, commencing on June 1, 1996.

PROCEDURES FOR TENDERING

     Only a holder of Bonds may tender such Bonds in the Exchange Offer.  To
tender in the Exchange Offer, a holder must complete, sign and date the Letter
of Transmittal, or a facsimile thereof, have the signatures thereon guaranteed
if required by the Letter of Transmittal, and mail or otherwise deliver such
Letter of Transmittal or such facsimile, together with the Bonds and any other
required documents, to the Exchange Agent prior to 5:00 p.m., New York City
time, on the Expiration Date.  To be tendered effectively, the Bonds, Letter of
Transmittal and other required documents must be completed and received by the
Exchange Agent at the address set forth below under "Exchange Agent" prior to
5:00 p.m., New York City time, on the Expiration Date.  Delivery of the Bonds
may be made by book-entry transfer in accordance with the procedures described
below.  Confirmation of such book-entry transfer must be received by the
Exchange Agent prior to the Expiration Date.


                                       23
<PAGE>

     By executing the Letter of Transmittal, each holder will make to the
Authority the representations set forth above in the third paragraph under the
heading "Purpose and Effect of the Exchange Offer."

     The tender by a holder and the acceptance thereof by the Authority will
constitute agreement between such holder and the Authority in accordance with
the terms and subject to the conditions set forth herein and in the Letter of
Transmittal.

     THE METHOD OF DELIVERY OF BONDS AND THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND SOLE RISK OF THE
HOLDER.  AS AN ALTERNATIVE TO DELIVERY BY MAIL, HOLDERS MAY WISH TO CONSIDER
OVERNIGHT OR HAND DELIVERY SERVICE.  IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE.  NO
LETTER OF TRANSMITTAL OR BONDS SHOULD BE SENT TO THE AUTHORITY.  HOLDERS MAY
REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES OR
NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR SUCH HOLDERS.

     Any beneficial owner whose Bonds are registered in the name of a broker,
dealer, commercial bank, trust company or other nominee and who wishes to tender
should contact the registered holder promptly and instruct such registered
holder to tender on such beneficial owner's behalf See "Instruction to
Registered Holder and/or Book-Entry Transfer Facility Participant from Owner"
included with the Letter of Transmittal.

     Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by an Eligible Institution (as defined below)
unless the Bonds tendered pursuant thereto are tendered (i) by a registered
holder who has not completed the box entitled "Special Registration
Instructions" or "Special Delivery Instructions" on the Letter of Transmittal or
(ii) for the account of an Eligible Institution.  In the event that signatures
on a Letter of Transmittal or a notice of withdrawal, as the case may be, are
required to be guaranteed, such guarantee must be by a member firm of the
Medallion System (an "Eligible Institution").

     If the Letter of Transmittal is signed by a person other than the
registered holder of any Bonds listed therein, such Bonds must be endorsed or
accompanied by a properly completed bond power, signed by such registered holder
as such registered holder's name appears on such Bonds with the signature
thereon guaranteed by an Eligible Institution.

     If the Letter of Transmittal or any Bonds or bond powers are signed by
trustees, executors, administrators, guardians, attorneys-in-fact, offices of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and evidence satisfactory to the
Authority of their authority to so act must be submitted with the Letter of
Transmittal.

     The Authority understands that the Exchange Agent will make a request
promptly after the date of this Prospectus to establish accounts with respect to
the Bonds at the book-entry transfer facility, The Depository Trust Company (the
"Book-Entry Transfer Facility"), for the purpose of facilitating the Exchange
Offer, and subject to the establishment thereof, any financial institution that
is a participant in the Book-Entry Transfer Facility's system may make book-
entry delivery of Bonds by causing such Book-Entry Transfer Facility to transfer
such Bonds into the Exchange Agent's account Alth with respect to the Bonds in
accordance with the Book-Entry Transfer Facility's procedures for such transfer.
Though delivery of the Bonds may be effected through book-entry transfer into
the Exchange Agent's account at the Book-Entry Transfer Facility, an appropriate
Letter of Transmittal properly completed and duly executed with any required
signature guarantee and all other required documents must in each case be
transmitted to and received or confirmed by the Exchange Agent at its address
set forth below on or prior to the Expiration Date, or, if the guaranteed
delivery procedures described below are complied with, within the time period
provided under such procedures.  Delivery of documents to the Book-Entry
Transfer Facility does not constitute delivery to the Exchange Agent.

     All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered Bonds and withdrawal of tendered Bonds will be
determined by the Authority in its sole discretion, which determination will be
final and binding.  The Authority reserves the absolute night to reject any and
all Bonds not properly tendered or any Bonds the Authority's acceptance of which
would, in the opinion of counsel for the Authority, be unlawful.  The Authority
also reserves the right in its sole discretion to waive any defects,
irregularities or conditions of tender as to particular Bonds.  The Authority's
interpretation of the terms and conditions of the Exchange Offer (including the
instructions in the Letter of Transmittal) will be final and binding on all
parties.  Unless waived, any defects or irregularities in connection with
tenders of Bonds must be cured within such time as the Authority shall
determine.  Although the Authority intends to notify holders of defects or
irregularities with respect to tenders of Bonds, neither the Authority, the
Exchange Agent nor any other person shall incur any liability for failure to
give such notification.  Tenders of Bonds will not be deemed to have been made
until such defects or irregularities have been cured or waived.  Any Bonds
received by the Exchange Agent that are not properly tendered and as to which
the defects or irregularities have not been cured or waived will be returned by
the Exchange Agent to the tendering holders, unless otherwise provided in the
Letter of Transmittal, as soon as practicable following the Expiration Date.


                                       24
<PAGE>

GUARANTEED DELIVERY PROCEDURES

     Holders who wish to tender their Bonds and (i) whose Bonds are not
immediately available, (ii) who cannot deliver their Bonds, the Letter of
Transmittal or any other required documents to the Exchange Agent or (iii) who
cannot complete the procedures for book-entry transfer, prior to the Expiration
Date, may effect a tender if:

(a)  the tender is made through an Eligible Institution;

(b)  prior to the Expiration Date, the Exchange Agent receives from such
     Eligible Institution a properly completed and duly executed Notice of
     Guaranteed Delivery (by facsimile transmission, mail or hand delivery)
     setting forth the name and address of the holder, the certificate number(s)
     of such Bonds and the principal amount of Bonds tendered, stating that the
     tender is being made thereby and guaranteeing that, within five New York
     Stock Exchange trading days after the Expiration Date, the Letter of
     Transmittal (or facsimile thereof) together with the certificate(s)
     representing the Bonds (or a confirmation of book-entry transfer of such
     Bonds into the Exchange Agent's account at the Book-Entry Transfer
     Facility), and any other documents required by the Letter of Transmittal
     will be deposited by the Eligible Institution with the Exchange Agent; and

(c)  such properly completed and executed Letter of Transmittal (of facsimile
     thereof), as well as the certificate(s) representing all tendered Bonds in
     proper form for transfer (or a confirmation of book-entry transfer of such
     Bonds into the Exchange Agent's account at the Book-Entry Transfer
     Facility), and all other documents required by the Letter of Transmittal
     are received by the Exchange Agent upon five New York Stock Exchange
     trading days after the Expiration Date.

     Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be
sent to holders who wish to tender their Bonds according to the guaranteed
delivery procedures set forth above.

WITHDRAWAL OF TENDERS

     Except as otherwise provided herein, tenders of Bonds may be withdrawn at
any time prior to 5:00 p.m., New York City time, on the Expiration Date.

     To withdraw a tender of Bonds in the Exchange Offer, a telegram, telex,
letter or facsimile transmission notice of withdrawal must be received by the
Exchange Agent at its address set forth herein prior to 5:00 p.m., New York City
time, on the Expiration Date.  Any such notice of withdrawal must (i) specify
the name of the person having deposited the Bonds to be withdrawn (the
"Depositor"), (ii) identify the Bonds to be withdrawn (including the certificate
number(s) and principal amount of such Bonds, or, in the case of Bonds
transferred by book-entry transfer, the name and number of the account at the
Book-Entry Transfer Facility to be credited), (iii) be signed by the holder in
the same manner as the original signature on the Letter of Transmittal by which
such Bonds were tendered (including any required signature guarantees) or be
accompanied by documents of transfer sufficient to have the Trustee with respect
to the Bonds register the transfer of such Bonds into the name of the person
withdrawing the tender and (iv) specify the name in which any such Bonds are to
be registered, if different from that of the Depositor.  All questions as to the
validity, form and eligibility (including time of receipt) of such notices will
be determined by the Authority, whose determination shall be final and binding
on all parties.  Any Bonds so withdrawn will be deemed not to have been validly
tendered for purposes of the Exchange Offer and no Exchange Bonds will be issued
with respect thereto unless the Bonds so withdrawn are validly retendered.  Any
Bonds which have been tendered but which are not accepted for exchange will be
returned to the holder thereof without cost to such holder as soon as
practicable after withdrawal, rejection of tender or termination of the Exchange
Offer.  Properly withdrawn Bonds may be retendered by following one of the
procedures described above under "-Procedures for Tendering" at any time prior
to the Expiration Date.

CONDITIONS

     Notwithstanding any other term of the Exchange Offer, the Authority shall
not be required to accept for exchange, or Exchange Bonds for, any Bonds, and
may terminate or amend the Exchange Offer as provided herein before the
acceptance of such Bonds, if:

(a)  any action or proceeding is instituted or threatened in any court or by or
     before any governmental agency with respect to the Exchange Offer which, in
     the sole judgment of the Authority, might materially impair the ability of
     the Authority to proceed with the Exchange Offer or any material adverse
     development has occurred in any existing action or proceeding with respect
     to the Authority or any of its subsidiaries; or


                                       25
<PAGE>

(b)  any law, statute, rule, regulation or interpretation by the staff of the
     Commission is proposed, adopted or enacted, which, in the sole judgment of
     the Authority, might materially impair the ability of the Authority to
     proceed with the Exchange Offer or materially impair the contemplated
     benefits of the Exchange Offer to the Authority; or

(c)  any governmental approval has not been obtained, which approval the
     Authority shall, in its sole discretion, deem necessary for the
     consummation of the Exchange Offer as contemplated hereby.

     If the Authority determines in its sole discretion that any of the
conditions are not satisfied, the Authority may (i) refuse to accept any Bonds
and return all tendered Bonds to the tendering holders, (ii) extend the Exchange
Offer and retain all Bonds tendered prior to the expiration of the Exchange
Offer, subject, however, to the rights of holders to withdraw such Bonds (see
"Withdrawal of Tenders") or (iii) waive such unsatisfied conditions with respect
to the Exchange Offer and accept all properly tendered Bonds which have not been
withdrawn.

EXCHANGE AGENT

     SouthTrust Bank of Alabama, N.A.
     P.O. Box 2554
     Birmingham, Alabama 35290
     Attention: Corporate Trust Department

     Delivery to an address other than as set forth above will not constitute a
     valid delivery.

FEES AND EXPENSES

     The expenses of soliciting tenders will be born by the Authority.  The
principal solicitation is being made by mail; however, additional solicitation
may be made by telegraph, telecopy, telephone or in person by officers and
regular employees of the Authority and its affiliates.

     The Authority has not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to brokers, dealers, or others
soliciting acceptances of the Exchange Offer.  The Authority, however, will pay
the Exchange Agent reasonable and customary fees for its services and will
reimburse it for its reasonable out-of-pocket expenses in connection therewith.

     The cash expenses to be incurred in connection with the Exchange Offer will
be paid by the Authority.  Such expenses include fees and expenses of the
Exchange Agent and Trustee, accounting and legal fees and printing costs, among
others.

ACCOUNTING TREATMENT

     The Exchange Bonds will be recorded at the same carrying value as the
Bonds, which is face value, as reflected in the Authority's accounting records
on the date of exchange.  Accordingly, no gain or loss for accounting purposes
will be recognized by the Authority.  The expenses of the Exchange Offer will be
expensed over the term of the Exchange Bonds.


                                       26
<PAGE>

                                   MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

     Set forth below are the names, ages (as of September 30, 1996) and a brief
account of the business experience of each person who is a director or executive
officer of the Credit Enhancement Provider.

NAME                AGE  POSITION

Franklin L. Haney   56   President and Director
Emeline W. Haney    49   Director
Chris E. Zahnd      55   Director
Roger D. Bailey     51   Secretary

FRANKLIN L. HANEY.  Mr Haney is a graduate of the University of Tennessee at
Knoxville and received his law degree from George Washington School of Law.  Mr.
Haney is the founder and sole proprietor of the Franklin L. Haney Company which
was established in 1968.  The Company is engaged in real estate development and
finance brokering.

EMELINE W. HANEY.  Mrs. Haney is a graduate of the University of Georgia.  Mrs.
Haney is the mother of five children and is active in many civic and community
projects.  She was instrumental in establishing the Childrens Advocacy Center of
Hamilton County, the first such center in Tennessee and is currently working to
establish Home Safe, a Childrens Advocacy Center in Palm Beach, Florida.  Mrs.
Haney is also active in the Franklin L. Haney Company.

CHRIS ZAHND.  Mr. Zahnd is a graduate of the University of Tennessee at
Chattanooga.  Mr. Zahnd has worked in the hotel industry for the past 16 years
and prior to entering the inn keeping business, he was involved in the
accounting and banking industry.

ROGER D. BAILEY.  Mr. Bailey is a former C.P.A. with Arthur Andersen & Co. and
has over 25 years experience in accounting and financial businesses.  He is
currently Chief Financial Officer for the Franklin L. Haney Company.

EXECUTIVE COMPENSATION

     None of the officers or directors of the Authority or the Credit
Enhancement Provider receive compensation from either the Authority or the
Credit Enhancement Provider for serving as an officer or a director.


                                       27
<PAGE>

                               SECURITY OWNERSHIP

     The Authority is a nonprofit corporation organized under the laws of the
State of Colorado to be in general compliance with the requirements of Internal
Revenue Service Revenue Procedure 82-26, which provides that the Internal
Revenue Service will ordinarily rule obligations issued by a nonprofit
corporation or issued on behalf of a governmental unit with the requirements of
the revenue procedure that the requirements of the revenue procedure are met.
See "The Authority."  The Authority has no members and no shareholders, but is
organized and operated exclusively on behalf of and for the benefit and in
furtherance of the purposes of Dawson Ridge Metropolitan District No. 5, which
is a municipal corporation and political subdivision of the State of Colorado.


                                       28
<PAGE>

                              CERTAIN TRANSACTIONS


     The following is a description of certain related party transactions.

     Tower Associates II, Inc., a Delaware corporation, is a general partner and
a limited partner of 49C.  Tower Associates II, Inc. is owned by Franklin L.
Haney (16%) and members of Mr. Haney's family (totalling 84%).

     Building Finance Company of Tennessee, Inc., is a Tennessee corporation
which originated the loan represented by the Acquisition and Construction Notes
issued by 49C.  Building Finance Company of Tennessee, Inc. is owned by Franklin
L. Haney (49%) and Herbert L. Oakes (51%).  The officers of Building Finance
Company of Tennessee, Inc. are Franklin L. Haney, President, and Emeline W.
Haney (Mr. Haney's wife), Secretary, and the directors are Franklin L. Haney and
Emeline W. Haney, Mr. Oakes is Mrs. Haney's stepfather.

     Building Finance Company of Tennessee, Inc., transferred the Acquisition
and Construction Notes and the collateral therefor to BFC Finance Corp., a
subsidiary of Building Finance Company of Tennessee, Inc.  BFC Finance Corp. is
owned by Building Finance Company of Tennessee, Inc.

     The Credit Enhancement for the Bonds is provided by BFC Guaranty Corp.,
which is owned by Building Finance Company of Tennessee, Inc.

     The officers and directors of BFC Guaranty Corp., BFC Finance Corp., and
Tower Associates II, Inc., each of which is a Delaware corporation, are
identical.  See "Management."

     DCDC is owned by Franklin L. Haney.

     As indicated above, C. Roger Addlesperger is one of the directors for each
of the Districts, and has consulted for The Franklin L. Haney Company and DCDC
on matters relating to the real estate within the Dawson Ridge development.  Mr.
Addlesperger is also vice president of DCDC.  Mr. Addlesperger and his wife,
Candace Addlesperger, are also directors of each of the Districts.  See "The
Authority" and "District Management."


                                       29
<PAGE>


                              PLAN OF DISTRIBUTION

     Each Participating Broker-Dealer that receives Exchange Bonds for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Bonds.  This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a Participating Broker-Dealer in connection with resales of Exchange Bonds
received in exchange for Bonds where such Bonds were acquired as a result of
market-making activities or other trading activities.  The.  Authority has
agreed that for a period of 180 days after the Expiration Date, it will make
this Prospectus, as amended or supplemented, available to any Participating
Broker-Dealer, all dealers effecting transactions in the for use in connection
with any such resale.  In addition, until Exchange Bonds may be required to
deliver a prospectus.

     The Authority will not receive any proceeds from any sales of the Exchange
Bonds by Participating Broker-Dealers.  Exchange Bonds received by Participating
Broker-Dealers for their own account pursuant to the Exchange Offer may be sold
from time to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the Exchange Bonds or
a combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or negotiated
prices.  Any such resale may be made directly to purchaser or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such Participating Broker-Dealer and/or the purchasers of
any such Exchange Bonds.  Any Participating Broker-Dealer that resells the
Exchange Bonds that were received by it for its own account pursuant to the
Exchange Offer and any broker or dealer that participates in a distribution of
such Exchange Bonds may be deemed to be an "underwriter" within the meaning of
the Securities Act and any profit on any such resale of Exchange Bonds and any
commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act.  The Letter of Transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a Participating Broker-Dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act.

     For a period of 180 days after the Expiration Date the Authority will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any Participating Broker-Dealer that requests
such documents in the Letter of Transmittal.


                                  LEGAL MATTERS

     The validity of the issuance of the Exchange Bonds will be passed upon for
the Authority by Brownstein Hyatt Farber & Strickland, P.C., Denver, Colorado.

                             INDEPENDENT ACCOUNTANTS

     The financial statements of Castle Rock Ranch Public Improvements 
Authority and BFC Guaranty Corp. as of October 31, 1996 included in this 
Prospectus have been so included in reliance on the report of Joseph Decosimo 
& Company, LLP independent accountants, given on the authority of said firm 
as experts in auditing and accounting.

                                       30
<PAGE>

                          INDEX TO FINANCIAL STATEMENTS

CASTLE ROCK RANCH PUBLIC IMPROVEMENTS AUTHORITY

Report of Independent Accountants
Balance Sheet
Statement of Revenues, Expenses and Changes in Fund Equity
Statement of Cash Flows
Notes to Financial Statements


BFC GUARANTY CORP.

Report of Independent Accountants
Balance Sheet
Statement of Income and Retained Earnings
Statement of Cash Flows
Notes to Financial Statements



                                         31


<PAGE>

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus, and, if given or
made, such information or representations must not be relied upon as having been
authorized.  This Prospectus does not constitute an offer to sell or the
solicitation of an offer to buy any securities other than the securities to
which it relates or an offer to sell or the solicitation of an offer to buy such
securities in any circumstances in which such offer or solicitation is unlawful.
Neither the delivery of this Prospectus nor any sale made hereunder shall, under
any circumstances, create any implication that there has been no change in the
affairs of the Credit Enhancement Provider since the date hereof or that the
information herein is correct as of any time subsequent to its date.

                         -------------------------------

                                TABLE OF CONTENTS
                                                                            PAGE
Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prospectus Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Management's Discussion and Analysis of Financial
   Condition and Results of Operations . . . . . . . . . . . . . . . . . . . .
The Project. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Districts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax Exemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Description of Exchange Bonds. . . . . . . . . . . . . . . . . . . . . . . . .
Credit Enhancement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Exchange Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Security Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Certain Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Independent Accountants. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Index to Consolidated Financial Statements . . . . . . . . . . . . . . . . . F-1
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   A-1



                                CASTLE ROCK RANCH
                          PUBLIC IMPROVEMENTS AUTHORITY





                         ------------------------------

                                   PROSPECTUS

                         ------------------------------



                    OFFER TO EXCHANGE ITS PUBLIC FACILITIES
                    REVENUE BONDS, SERIES 1996 B FOR ANY AND
                    ALL OF ITS OUTSTANDING PUBLIC FACILITIES
                           REVENUE BONDS, SERIES 1996


- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------



                                       32

<PAGE>


                   CASTLE ROCK RANCH PUBLIC IMPROVEMENTS AUTHORITY

                        FINANCIAL STATEMENTS AND AUDIT REPORT


                                   OCTOBER 31, 1996













                                                                DECEMBER 6, 1996


<PAGE>


                   CASTLE ROCK RANCH PUBLIC IMPROVEMENTS AUTHORITY

                                       CONTENTS

- --------------------------------------------------------------------------------



REPORT OF INDEPENDENT ACCOUNTANTS                                             1

BALANCE SHEET                                                                 2

STATEMENT OF REVENUES, EXPENSES AND
  CHANGES IN FUND EQUITY                                                      3

STATEMENT OF CASH FLOWS                                                       4

NOTES TO FINANCIAL STATEMENTS                                               5/8











                                                                DECEMBER 6, 1996

<PAGE>
<TABLE>
<CAPTION>
                                   A TENNESSEE REGISTERED LIMITED LIABILITY PARTNERSHIP
<S>                                       <C>                                                      <C>
- ------------------------------------------------------------------------------------------------------------------------
PRIVATE COMPANIES PRACTICE SESSION         MEMBER AICPA DIVISION FOR CPA FIRMS                     SEC PRACTICE SECTION
</TABLE>

                          REPORT OF INDEPENDENT ACCOUNTANTS

Board of Directors
Castle Rock Ranch Public Improvements Authority
Castle Rock, Colorado

We have audited the accompanying financial statements of Castle Rock Ranch
Public Improvements Authority as of October 31, 1996, and for the period from
March 29, 1996 to October 31, 1996.  These financial statements are the
responsibility of Castle Rock Ranch Public Improvements Authority's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.

We conducted our audit in accordance with generally accepted auditing standards
and generally accepted government auditing standards issued by the Comptroller
General of the United States and Office of Management and Budget (OMB) Circular
A-128, "Audits of State and Local Governments."  Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe that our
audit provides a reasonable basis for our opinion.

The financial statements present only Castle Rock Ranch Public Improvements
Authority and are not intended to present fairly the financial position of the
Dawson Ridge Metropolitan Districts and the results of operations and cash flows
of its fund types in conformity with generally accepted accounting principles.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Castle Rock Ranch Public
Improvements Authority as of October 31, 1996, and the results of its operations
and cash flows for the period from March 29, 1996 to October 31, 1996, in
conformity with generally accepted accounting principles.


                                       Joseph Decosimo and Company, LLP


Chattanooga, Tennessee
November 19, 1996,
except for the
Subsequent Events Note
as to which the date is
December 13, 1996.


                                       1                       DECEMBER 6, 1996

<PAGE>

                   CASTLE ROCK RANCH PUBLIC IMPROVEMENTS AUTHORITY

                                    BALANCE SHEET

                                   OCTOBER 31, 1996

- --------------------------------------------------------------------------------




    ASSETS

LAND AND WATER RIGHTS                                             $ 54,550,000
                                                                    ----------

OTHER ASSETS
 Restricted Cash and Investments                                     7,792,040
 Accrued Interest - Restricted Investments                             204,885
 Deferred Commitment Fee - Related Party - less accumulated
   amortization of $123,172                                          3,895,328
 Deferred Bond Issuance Costs - less accumulated
   amortization of $48,029                                           1,735,900
                                                                    ----------

    Total Other Assets                                              13,628,153
                                                                    ----------

TOTAL ASSETS                                                      $ 68,178,153
                                                                    ----------
                                                                    ----------

    LIABILITIES AND FUND EQUITY

LIABILITIES
 Bonds Payable, plus unamortized
   bond premium of $710,828                                       $ 67,685,828
 Accrued Interest Payable                                            2,754,801
                                                                    ----------

    Total Liabilities                                               70,440,629

FUND EQUITY
 Accumulated Deficit                                               ( 2,262,476)
                                                                    ----------

TOTAL LIABILITIES AND FUND EQUITY                                 $ 68,178,153
                                                                    ----------
                                                                    ----------


       The accompanying notes are an integral part of the financial statements.


                                       2                        DECEMBER 6, 1996

<PAGE>

              CASTLE ROCK RANCH PUBLIC IMPROVEMENTS AUTHORITY

         STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND EQUITY

               PERIOD FROM MARCH 29, 1996 TO OCTOBER 31, 1996

- --------------------------------------------------------------------------------

OPERATING EXPENSES
    Amortization of Bond Issuance Costs                    $(    48,029)
    Amortization of Deferred Commitment Fee - 
     Related Party                                          (   123,172)
                                                             ----------

OPERATING LOSS                                              (   171,201)
                                                             ----------



NONOPERATING REVENUE (EXPENSE)
    Interest Income                                             267,340
    Interest Expense                                         (2,358,615)
                                                             ----------
                                                             (2,091,275)
                                                             ----------

NET LOSS                                                     (2,262,476)

FUND EQUITY - beginning of period                                 -
                                                             ----------

FUND EQUITY - end of period                                 $(2,262,476)
                                                             ----------
                                                             ----------



  The accompanying notes are an integral part of the financial statements.

                                        3                   DECEMBER 6, 1996


<PAGE>

                   CASTLE ROCK RANCH PUBLIC IMPROVEMENTS AUTHORITY

                               STATEMENT OF CASH FLOWS

                    PERIOD FROM MARCH 29, 1996 TO OCTOBER 31, 1996

- --------------------------------------------------------------------------------


CASH FLOWS FROM OPERATING ACTIVITIES
 Operating Loss                                                   $(   171,201)
 Amortization of Bond Issuance Costs                                    48,029
 Amortization of Deferred Commitment Fee - Related Party               123,172
                                                                    ----------

    NET CASH PROVIDED BY OPERATING ACTIVITIES                            -
                                                                    ----------

CASH FLOWS FROM CAPITAL AND RELATED
 FINANCING ACTIVITIES
 Capital Expenditures                                              (54,550,000)
 Issuance of Bonds, plus accrued interest sold                      68,082,015
 Commitment Fee Paid                                               ( 4,018,500)
 Deposit to Restricted Cash                                        ( 7,729,586)
 Increase in Restricted Cash                                       (    81,212)
 Payment of Debt Issuance Costs                                    ( 1,783,929)
                                                                    ----------

    NET CASH USED BY CAPITAL AND RELATED
       FINANCIAL ACTIVITIES                                        (    81,212)
                                                                    ----------

CASH FLOWS FROM INVESTING ACTIVITIES
 Interest Received                                                      81,212
                                                                    ----------

NET INCREASE IN CASH                                                     -

CASH - beginning of period                                               -
                                                                    ----------

CASH - end of period                                               $     -
                                                                    ----------
                                                                    ----------


       The accompanying notes are an integral part of the financial statements.

                                       4                       DECEMBER 6, 1996

<PAGE>

                   CASTLE ROCK RANCH PUBLIC IMPROVEMENTS AUTHORITY

                            NOTES TO FINANCIAL STATEMENTS

                                   OCTOBER 31, 1996

- --------------------------------------------------------------------------------


SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies and practices followed by Castle Rock Ranch
Public Improvements Authority are as follows:

REPORTING ENTITY - Castle Rock Ranch Public Improvements Authority (the
Authority) is a Colorado nonprofit corporation created March 11, 1996, to be
operated as an instrumentality of Dawson Ridge Metropolitan District No. 5 (the
District).  The Authority was created to issue Guaranteed Public Facilities
Revenue Bonds Series 1996 (the Bonds) to purchase certain land and water rights
in the Dawson Ridge development of Castle Rock, Douglas County, Colorado and to
pay the debt service on the bonds.

The District appoints all board members and is primarily responsible for
retirement of the bonds recorded as a liability of the Authority.  The Authority
is considered to be a discrete component unit of the District.

The accounting policies of the Authority conform to the generally accepted
accounting principles applicable to governmental entities.  The more significant
accounting policies of the Authority are summarized as follows:

YEAR END - The Authority's year end is December 31.

BASIS OF ACCOUNTING - The financial statements of the Authority have been
prepared on the accrual basis of accounting.  Accordingly, revenues are
recognized when earned and expenses are recognized when they are incurred.

BUDGETS - The Authority has established no formal budget procedures as its
primary function is as a debt service fund for the District.

LAND AND WATER RIGHTS - Land and water rights are recorded at cost.  When the
bonds are paid off or mature, title to the land and water rights transfers to
the District.

BOND ISSUANCE COSTS - Bond issuance costs are amortized on a straight-line basis
over the term of the Bonds.

DEFERRED COMMITMENT FEE - The deferred commitment fee is recognized on a
straight-line basis over the term of the Bonds.

RESTRICTED INVESTMENTS - Restricted investments are considered held-to-maturity
and are recorded at cost adjusted for the amortization of premiums and accretion
of discounts, which are recognized as adjustments to interest income using the
interest method.


                                      5                       DECEMBER 6, 1996

<PAGE>

                   CASTLE ROCK RANCH PUBLIC IMPROVEMENTS AUTHORITY

                            NOTES TO FINANCIAL STATEMENTS

                                   OCTOBER 31, 1996

- --------------------------------------------------------------------------------

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

BOND PREMIUM - The premium recorded on issuance of the Bonds is recorded as 
an adjustment to the par value of the Bonds and is amortized over the term of 
the Bonds and recognized as an adjustment to interest expense using the 
interest method.

INCOME TAXES - As a nonprofit corporation and instrumentality of the District,
the Authority is exempt from federal and state income taxes.

ESTIMATES AND UNCERTAINTIES - The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period.  Actual results could differ from those estimates.

RESTRICTED CASH AND INVESTMENTS

Restricted cash and investments as of October 31, 1996 consist of the 
following:

                                                       Book Value     Fair Value
                                                       ----------     ----------
  5.375%-6.5% United States Treasury Notes
    maturing at various dates from November 30, 1996
    through May 31, 1998                               $7,562,755     $7,563,929

  Money Market Fund                                       229,285        229,285
                                                       ----------     ----------
                                                       $7,792,040     $7,793,214
                                                       ----------     ----------
                                                       ----------     ----------

BONDS PAYABLE

The Bonds were issued March 29, 1996, at coupon rates ranging from 5.7% to 
6.5% and maturing at varying amounts beginning December 1, 1999 and ending 
December 1, 2017.  Par value of the Bonds is $66,975,000 and the proceeds 
from issuance were $67,760,621 plus accrued interest of $321,394.  The 
proceeds were used to acquire 876 acres of real property and 900 acre feet of 
water rights in Dawson Ridge development in the town of Castle Rock, Douglas 
County, Colorado.  The land and water rights were purchased from a related 
party, Douglas County Development Corporation (DCDC), an affiliate of The 
Franklin L. Haney Company.  Mr. Haney is a director of the Authority.  The 
land acquired will be used to develop a golf course and other recreational 
facilities for the benefit of the Dawson Ridge Metropolitan Districts.  The 
Bonds have a debt service reserve retained from the proceeds from their 
issuance sufficient to fund interest payments on the Bonds until March 1, 
1998.

BFC Guaranty Corp., a related company controlled by Mr. Haney, entered into a
collateralized credit enhancement agreement for the benefit of the Trustee of
the Bonds.  Under the terms of the agreement, BFC Guaranty Corp. will guarantee
complete payment of the Bonds for the period commencing March 1, 1998, until the
Bonds are redeemed or mature.

In order to secure its obligations under the Collateralized Credit Enhancement
Agreement, BFC Guaranty Corp. has pledged and delivered to the Trustee, Series B
REMIC Bonds with a par value of $67,075,000, and coupon rates ranging from 5.7%
to 6.5%.  The Series B REMIC Bonds mature at varying amounts beginning
December 1, 1998 and ending December 1, 2017.  The Series B REMIC Bonds will be
issued to BFC Guaranty Corp. on March 1, 1998, at no cost.

The Series B REMIC Bonds, along with another series of bonds representing a
regular interest in the REMIC Trust Estate (the "Series A REMIC Bonds"), were
issued under an indenture of trust between BFC Finance Corp. and SouthTrust Bank
of Alabama.  The proceeds from the Series A REMIC Bonds will be used to fund the
acquisition and construction of an office building in the District of Columbia
to be leased by the U.S. Government.  Scheduled lease payments will be
sufficient to retire all principal and interest payments on the Series A and
Series B REMIC Bonds.

                                       6                      DECEMBER 6, 1996

<PAGE>

                   CASTLE ROCK RANCH PUBLIC IMPROVEMENTS AUTHORITY

                            NOTES TO FINANCIAL STATEMENTS

                                   OCTOBER 31, 1996

- --------------------------------------------------------------------------------


BONDS PAYABLE - continued

Debt service requirements and sinking fund requirements as of October 31, 1996,
are as follows:

                                                     PRINCIPAL       INTEREST

YEAR ENDING
   October 31, 1997                                $      -       $  5,165,253
   October 31, 1998                                       -          4,132,203
   October 31, 1999                                       -          4,132,203
   October 31, 2000                                   1,980,000      4,075,278
   October 31, 2001                                   2,095,000      3,958,121
   Later Years                                       62,900,000     39,049,558
                                                     ----------     ----------
   Total                                           $ 66,975,000   $ 60,512,616
                                                     ----------     ----------
                                                     ----------     ----------

The fair value of the bonds payable approximates book value.

REIMBURSEMENT AGREEMENT

The Authority also entered into a Reimbursement Agreement with BFC Guaranty
Corp. that requires the Authority to reimburse BFC Guaranty Corp. for any
principal and interest payments made by BFC Guaranty Corp. under the provisions
of the Collateralized Credit Enhancement Agreement.  Interest at the rate of 9%
will be charged on the payments.  In addition, the Authority paid BFC Guaranty
Corp. a commitment fee of 6% of the Bond proceeds which totaled $4,018,500.


OPERATING AND DEVELOPMENT AGREEMENTS

The Authority has entered into an operating agreement obligating the Dawson 
Ridge Metropolitan Districts to provide funds to the extent that revenues 
from the golf course and recreational facilities are insufficient to fund the 
debt service on the Bonds.  Such funds would be derived from a mill levy on 
taxable property in the Dawson Ridge districts.  The levy would be subject to 
certain limitations including a 35 mill limitation.  In order to provide an 
alternate source of revenue, the Authority entered into a development 
agreement with DCDC providing for a payment in lieu of taxes by DCDC in an 
amount equivalent to the amount which would be generated by the mill levy 
pursuant to the operating agreement.  DCDC owns approximately 85% of the 
property in the Dawson Ridge districts.

                                      7                        DECEMBER 6, 1996

<PAGE>

                   CASTLE ROCK RANCH PUBLIC IMPROVEMENTS AUTHORITY

                            NOTES TO FINANCIAL STATEMENTS

                                   OCTOBER 31, 1996

- --------------------------------------------------------------------------------


SUBSEQUENT EVENT

On December 13, 1996, the Authority filed a Registration Statement on Form S-4
with the Securities and Exchange Commission offering to exchange the entire
issue of Guaranteed Public Facilities Revenue Bonds, (Series 1996) for an
identical issue of Guaranteed Public Facilities Bonds, (Series 1996B).  The
Series 1996B Bonds and the Credit Enhancement of BFC Guaranty Corp. will be
registered under the Securities Act of 1933 and as a result, the Series 1996B
Bonds will not be subject to the transfer restrictions associated with the
Series 1996 Bonds.  No gain or loss will be recognized for financial statement
purposes on the exchange.




                                       8                      DECEMBER 6, 1996


<PAGE>

                                  BFC GUARANTY CORP.

                        FINANCIAL STATEMENTS AND AUDIT REPORT

                                   OCTOBER 31, 1996









                                                                DECEMBER 6, 1996


<PAGE>

                                  BFC GUARANTY CORP.

                                       CONTENTS

- --------------------------------------------------------------------------------



REPORT OF INDEPENDENT ACCOUNTANTS                                              1

BALANCE SHEET                                                                  2

STATEMENT OF INCOME AND RETAINED EARNINGS                                      3

STATEMENT OF CASH FLOWS                                                        4

NOTES TO FINANCIAL STATEMENTS                                                5/7










                                                                DECEMBER 6, 1996

<PAGE>

<TABLE>
<CAPTION>
                               TENNESSEE REGISTERED LIMITED LIABILITY PARTNERSHIP
<S>                                             <C>                                                 <C>
- ------------------------------------------------------------------------------------------------------------------------
PRIVATE COMPANIES PRACTICE SECTION                   MEMBER AICPA DIVISION FOR CPA FIRMS            SEC PRACTICE SECTION
</TABLE>


                    REPORT OF INDEPENDENT ACCOUNTANTS


Board of Directors and Stockholder
BFC Guaranty Corp.
Washington, D.C.

We have audited the accompanying balance sheet of BFC Guaranty Corp. (a Delaware
corporation) as of October 31, 1996, and the related statements of income,
retained earnings and cash flows for the period from March 29, 1996 to October
31, 1996.  These financial statements are the responsibility of the company's
management.  Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of BFC Guaranty Corp. as of
October 31, 1996, and the results of its operations and its cash flows for the
period from March 29, 1996 to October 31, 1996, in conformity with generally
accepted accounting principles.


                                           Joseph DeCosimo and Company, LLP



Chattanooga, Tennessee
November 19, 1996,
except for the subsequent
events note as to which
the date is December 13, 1996




                                       1                      DECEMBER 6, 1996


<PAGE>

                                  BFC GUARANTY CORP.

                                    BALANCE SHEET

                                   OCTOBER 31, 1996

- --------------------------------------------------------------------------------




    ASSETS

 Cash                                                              $     1,000
 Advances to Parent Company                                          4,018,500
 Accrued Interest on Advances to Parent Company                        210,971
 Deferred Tax Asset                                                  1,324,411
                                                                   -----------

TOTAL ASSETS                                                       $ 5,554,882
                                                                   -----------
                                                                   -----------

    LIABILITIES AND STOCKHOLDER'S EQUITY

 Accrued Income Taxes                                              $ 1,438,020
                                                                   -----------

DEFERRED INCOME - RELATED PARTY                                      3,895,328
                                                                   -----------
  TOTAL LIABILITIES                                                  5,333,348
                                                                   -----------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDER'S EQUITY
 Common Stock - no par value - 1,500 shares
   authorized and issued                                                 1,000
 Retained Earnings                                                     220,534
                                                                   -----------

    Total Stockholder's Equity                                         221,534
                                                                   -----------

TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY                         $ 5,554,882
                                                                   -----------
                                                                   -----------


   The accompanying notes are an integral part of the financial statements.


                                       2                       DECEMBER 6, 1996

<PAGE>

                                  BFC GUARANTY CORP.

                      STATEMENT OF INCOME AND RETAINED EARNINGS

                    PERIOD FROM MARCH 29, 1996 TO OCTOBER 31, 1996

- --------------------------------------------------------------------------------




INCOME
 Commitment Fee Income - Related Party                               $ 123,172
 Interest Income - Related Party                                       210,971
                                                                       -------

INCOME BEFORE PROVISION FOR INCOME TAXES                               334,143

 Provision for Income Taxes                                            113,609
                                                                       -------

NET INCOME                                                             220,534

RETAINED EARNINGS - beginning of period                                   -
                                                                       -------

RETAINED EARNINGS - end of period                                    $ 220,534
                                                                       -------
                                                                       -------

Primary and Fully Diluted Earnings Per Common Share                  $  147.02
                                                                       -------
                                                                       -------

Weighted Average Common Shares Outstanding                               1,500
                                                                       -------
                                                                       -------


   The accompanying notes are an integral part of the financial statements.


                                       3                       DECEMBER 6, 1996


<PAGE>

                                  BFC GUARANTY CORP.

                               STATEMENT OF CASH FLOWS

                    PERIOD FROM MARCH 29, 1996 TO OCTOBER 31, 1996

- --------------------------------------------------------------------------------



CASH FLOWS FROM OPERATING ACTIVITIES
 Net Income                                                        $   220,534
 Deferred Income Taxes                                              (1,324,411)
 Increase in Deferred Income                                         3,895,328
 Increase in Accrued Interest - Related Party                       (  210,971)
 Increase in Income Taxes Payable                                    1,438,020
                                                                     ---------

    NET CASH PROVIDED BY OPERATING ACTIVITIES                        4,018,500
                                                                     ---------

CASH FLOWS FROM INVESTING ACTIVITIES
 Advances to Parent Company                                         (4,018,500)
                                                                     ---------

CASH FLOWS FROM FINANCING ACTIVITIES
 Cash Received from Issuance of Common Stock                             1,000
                                                                     ---------

INCREASE IN CASH                                                         1,000

CASH - beginning of period                                               -
                                                                     ---------

CASH - end of period                                               $     1,000
                                                                     ---------
                                                                     ---------

SUPPLEMENTAL DISCLOSURE OF OPERATING ACTIVITIES
 Income Taxes Paid                                                    $     -






   The accompanying notes are an integral part of the financial statements.


                                       4                      DECEMBER 6, 1996

<PAGE>

                                  BFC GUARANTY CORP.

                            NOTES TO FINANCIAL STATEMENTS

                                   OCTOBER 31, 1996

- --------------------------------------------------------------------------------


SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies and practices followed by the company are
as follows:

DESCRIPTION OF BUSINESS - The company was organized on March 21, 1996, as a 
wholly-owned subsidiary of Building Finance Company of Tennessee.  The 
company was formed solely to provide credit enhancement for the Castle Rock 
Ranch Public Improvement Authority Guaranteed Public Facilities Revenue Bonds, 
Series 1996 (the "Castle Rock Bonds"), acquire assets in connection with the 
provision of credit enhancement for the Castle Rock Bonds and enter into 
documents related thereto. Operations of the company commenced March 29, 1996.

DEFERRED INCOME - Deferred income is recognized on a straight-line basis over
the term of the Castle Rock Bonds and Collateralized Credit Enhancement
Agreement.

YEAR END - The company's year end is December 31.

INCOME TAXES - Deferred tax assets and liabilities are recognized for the future
tax effects attributed to temporary differences between book and tax bases of
assets and liabilities.  The measurement of current and deferred tax assets and
liabilities is based on enacted tax law.

ESTIMATES AND UNCERTAINTIES - The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

EARNINGS PER COMMON SHARE - Earnings per common share is computed by dividing 
the net income for the period by the weighted average number of common shares 
outstanding during the period.

COLLATERALIZED CREDIT ENHANCEMENT AGREEMENT

The company has entered into a collateralized credit enhancement agreement for
the benefit of the Trustee of the Castle Rock Bonds. Under the terms of the
agreement, the company will guarantee complete payment of the Castle Rock Bonds
for the period commencing March 1, 1998, until the Bonds are redeemed or mature.

The Castle Rock Bonds were issued March 29, 1996, by Castle Rock Ranch Public
Improvements Authority (the Authority) at coupon rates ranging from 5.7% to
6.5% and maturing at varying amounts beginning December 1, 1999 and ending
December 1, 2017.  Par value of the Castle Rock Bonds is $66,975,000 and the
proceeds from issuance were $67,760,621. The proceeds were used to acquire real
property and water rights in Dawson Ridge development in the town of Castle
Rock, Douglas County, Colorado.  The land and water rights were purchased from a
related party, Douglas County Development Corporation (DCDC), an affiliate of
The Franklin L. Haney Company.  Mr. Haney is the President of BFC Guaranty
Corp.  The land acquired will be used to develop a golf course and other
recreational facilities for the benefit of the Dawson Ridge Metropolitan
Districts.  The Castle Rock Bonds have a debt service reserve retained from the
proceeds from their issuance sufficient to fund interest payments on the Bonds
until March 1, 1998.

                                       5                      DECEMBER 6, 1996

<PAGE>

                                  BFC GUARANTY CORP.

                            NOTES TO FINANCIAL STATEMENTS

                                   OCTOBER 31, 1996

- --------------------------------------------------------------------------------

COLLATERALIZED CREDIT ENHANCEMENT AGREEMENT - continued

In order to secure its obligations under the Collateralized Credit 
Enhancement Agreement, the company has pledged and delivered to the Trustee 
Series B REMIC Bonds with a par value of $67,075,000, and coupon rates 
ranging from 5.7% to 6.5%.  The Series B REMIC Bonds mature at varying 
amounts beginning December 1, 1998 and ending December 1, 2017.  The Series B 
Remic Bonds will be issued to the company on March 1, 1998, at no cost.

The Series B REMIC Bonds, along with another series of bonds representing a 
regular interest in the REMIC Trust Estate (the "Series A REMIC Bonds"), were 
issued under an indenture of trust between BFC Finance Corp. and South Trust 
Bank of Alabama.  The proceeds from the Series A REMIC Bonds will be used to 
fund the acquisition and construction of an office building in the District 
of Columbia to be leased by the U.S. Government.  Scheduled lease payments 
will be sufficient to retire all principal and interest payments on the 
Series A and Series B REMIC Bonds.

REIMBURSEMENT AGREEMENT

In conjunction with the Collateralized Credit Enhancement Agreement, the company
also entered into a Reimbursement Agreement with Castle Rock Ranch Public
Improvements Authority that requires the Authority to reimburse the company for
any principal and interest payments made by the company under the provisions of
the Collateralized Credit Enhancement Agreement.  Interest at the rate of 9%
will be charged on the payments.  In addition, the Authority paid the company a
commitment fee of 6% of the Castle Rock Bond proceeds which totaled $4,018,500.
The Company advanced the fee to its parent company, Building Finance Corporation
of Tennessee.

The Authority has entered into an operating agreement obligating the Dawson 
Ridge Metropolitan Districts to provide funds to the extent that revenues 
from the golf course and recreational facilities are insufficient to fund the 
debt service on the Castle Rock Bonds.  Such funds would be derived from a 
mill levy on taxable property in the Dawson Ridge districts.  The levy be 
subject to certain limitations including a 35 mill limitation.  In order to 
provide an alternate source of the revenue, the Authority entered into a 
development agreement with DCDC providing for a payment in lieu of taxes by 
DCDC in an amount equivalent to the amount which would be generated by the 
mill levy pursuant to the operating agreement.  DCDC owns approximately 85% 
of the property in the Dawson Ridge districts.

                                       6                       DECEMBER 6, 1996


<PAGE>

                                  BFC GUARANTY CORP.

                            NOTES TO FINANCIAL STATEMENTS

                                   OCTOBER 31, 1996

- --------------------------------------------------------------------------------


INCOME TAXES

The provision for income taxes is as follows:

Current                                                $  1,438,020
Deferred                                                 (1,324,411)
                                                          ---------
                                                       $    113,609
                                                          ---------
                                                          ---------

The deferred tax provision and the related deferred tax asset result from 
income recognized when received for tax purposes, but deferred for financial 
statement purposes.

SUBSEQUENT EVENT

On December 13, 1996, the Authority filed a Registration Statement on Form 
S-4 with the Securities and Exchange Commission offering to exchange the entire 
issue of Guaranteed Public Facilities Revenue Bonds, (Series 1996) for an 
identical issue of Guaranteed Public Facilities Bonds, (Series 1996B).  The 
Series 1996B Bonds and the Credit Enhancement of the company will be 
registered under the Securities Act of 1933 and as a result, the Series 1996 
Bonds will not be subject to the transfer restrictions associated with the 
Series 1996 Bonds.  No gain or loss will be recognized for financial 
statement purposes by the Authority on the exchange.

                                       7                       DECEMBER 6, 1996

<PAGE>
                                                                  APPENDIX A

                          DEFINITIONS OF CERTAIN TERMS

     Capitalized terms used in the Limited Offering Memorandum, and not
otherwise defined, are used with the meanings assigned to such terms in the
Indenture, the Operating Agreement, the Intergovernmental Agreement, the Deed of
Trust, the Collateralized Credit Enhancement Agreement, the Reimbursement
Agreement, the Development Agreement, the Recreational Facilities Agreement and
the Lease, as applicable.  The following definitions of such capitalized terms
are summaries of the definitions applicable in such documents, with such
modifications as may be appropriate for use in the Limited Offering Memorandum.

          "ACCOUNTANT" shall mean a person or firm engaged in the practice of
accounting who is a nationally recognized certified public accountant acceptable
to the Trustee and who is independent of the entity whose accounts are being
audited.

          "ACT OF BANKRUPTCY" shall mean the filing of a petition in bankruptcy
(or other commencement of a bankruptcy or similar proceeding) by or against the
Authority under any applicable bankruptcy, insolvency or similar law as now or
hereafter in effect.

          "ADDITIONAL INTEREST" shall mean additional interest payable to each
Holder of Transfer Restricted Securities calculated at the rate of 1% per annum
on the principal amount of such Transfer Restricted Securities during the period
(prior to the registration of the Bonds) that any Nonregistration exists.

          "AUTHORITY" shall mean Castle Rock Ranch Public Improvements
Authority, a corporate instrumentality of the District and a nonprofit
corporation organized and existing under and by virtue of the laws of the State
of Colorado.

          "AVAILABLE MONEYS" shall mean (a) proceeds of the Bonds received
contemporaneously with the issuance and sale of the Bonds and held by the
Trustee at all times since receipt of such proceeds in a separate and segregated
account in which only Available Monies were at any time held, and the proceeds
from the investment thereof, (b) monies paid by the Authority to the Trustee
which monies shall have been held by the Trustee for at least 126 days prior to
the date such monies are to be applied to the payment of principal or interest
on the Bonds, provided that no Act of Bankruptcy shall have occurred during such
126 day period, (c) monies drawn under any Credit Enhancement which are either
applied directly to the payment of the principal of or interest on the Bonds or
which, if not so applied, are held in a separate and segregated subaccount under
the Indenture until so applied, (d) deposits with the Trustee as agent and
bailee of proceeds of the issuance of refunding obligations or obligations of
the Authority or the District if, in the written opinion of nationally
recognized counsel experienced in bankruptcy matters and acceptable to the
Trustee, the deposit and use of such proceeds will not constitute a voidable
preference under the Bankruptcy Code in the case of bankruptcy of the Authority
or the District, (e) any other money the application of which will not, in the
written opinion of nationally recognized counsel experienced in bankruptcy
matters and acceptable to the Trustee, constitute a voidable preference under
the Bankruptcy Code in the case of bankruptcy of the Authority or the District,
and (f) investment income derived from the investment of the foregoing types of
monies; provided that such proceeds, monies or income shall not be deemed to be
Available Monies or available for payment of the Bonds if, among other things,
an injunction, restraining order or stay is in effect preventing such proceeds,
monies or income from being applied to make such payment.

          "BANKRUPTCY CODE" shall mean the Bankruptcy Reform Act of 1978, as
amended.

          "BOND COUNSEL" shall mean any attorney at law or firm of attorneys
selected by the Authority, of nationally recognized standing in matters
pertaining to the validity of and federal tax exemption of interest on
obligations issued by states and political subdivisions, and duly admitted to
practice law before the highest court of any state of the United States of
America.

          "BONDS" shall mean the Authority's $66,975,000 aggregate principal
amount of Public Facilities Revenue Bonds, Series 1996, issued pursuant to the
Indenture and, after the exchange pursuant to the Registration Rights Agreement,
shall include the bonds issued in exchange therefor (all such bonds to have the
same rights and to be considered as one series for all purposes under the
Indenture).


                                       A-1

<PAGE>

          "CODE" shall mean the Internal Revenue Code of 1986, as amended.

          "COLLATERAL" shall mean the Series B REMIC Bonds, the payments on such
Bonds and any Federal Securities substituted therefor.

          "CREDIT ENHANCEMENT" shall mean that Collateralized Credit Enhancement
Agreement from the Credit Enhancement Provider for the benefit of the Trustee,
together with the Collateral (which shall be pledged and assigned pursuant
thereto).

          "CREDIT ENHANCEMENT PROVIDER" shall mean BFC Guaranty Corp., a
Delaware corporation.

          "DEED OF TRUST" shall mean that certain Deed of Trust, Security
Agreement, Financing Statement and Assignment of Rents and Leases, dated March
1, 1996, from the Authority for the benefit of the Trustee and the Credit
Enhancement Provider.

          "DEVELOPMENT AGREEMENT" shall mean the Development Agreement, dated as
of March 1, 1996, between the Authority and Douglas County Development
Corporation.

          "DISTRICT" shall mean generally the Dawson Ridge Metropolitan District
No. 5 as the same is organized and existing under and by virtue of the laws of
the State of Colorado now in effect and as hereafter amended.  "DISTRICTS" shall
mean the following Districts: Dawson Ridge Metropolitan District No. 1, Dawson
Ridge Metropolitan District No. 2, Dawson Ridge Metropolitan District No. 3,
Dawson Ridge Metropolitan District No. 4 and Dawson Ridge Metropolitan District
No. 5. "RELATED DISTRICTS " shall mean Dawson Ridge Metropolitan District No. 1,
Dawson Ridge Metropolitan District No. 2, Dawson Ridge Metropolitan District No.
3 and Dawson Ridge Metropolitan District No. 4.

          "EVENT OF DEFAULT" shall have the meaning given to that term in the
document in which such term is being used.

          "EXPENSE OBLIGATION" shall mean the obligation of each District to pay
its Proportionate Share of Operations and Maintenance Expense pursuant to the
Intergovernmental Agreement.

          "EXTRA PAYMENTS" shall mean payments with respect to premium, if any,
on the Bonds, interest on the Bonds in excess of the pre-default rate thereon,
Additional Interest and amounts due solely as a result of acceleration of the
Bonds.

          "FEDERAL SECURITIES" shall mean securities of the type described in
paragraphs (a), (b) and (c)(v) of the definition of Investment Securities.

          "FINANCING OBLIGATIONS" shall mean the obligations which arise
pursuant to the provisions of the Intergovernmental Agreement as evidenced by
the execution of the Intergovernmental Agreement by each District.

          "HOLDER" or "BONDHOLDER" shall mean the person in whose name such Bond
shall be registered.

          "INDEBTEDNESS" shall mean any indebtedness or obligation of the
Authority which, in accordance with generally accepted accounting principles, is
classified as a liability on a balance sheet.

          "INDENTURE" shall mean the Indenture of Trust, dated as of March 1,
1996, between the Issuer and the Trustee, together with any indentures
supplemental thereto made in conformity therewith.

          "INTEREST PAYMENT DATE" shall mean June 1 and December 1 of each year,
commencing with respect to the Bonds, on December 1, 1996.

          "INTERGOVERNMENTAL AGREEMENT" shall mean the Intergovernmental
Agreement, dated as of March 1, 1996, among the Districts, and any amendments or
supplements thereto.


                                       A-2

<PAGE>

          "INVESTMENT SECURITIES" shall mean, and includes, any of the
following investments, to the extent permitted or authorized by applicable law
at the time purchased by the Trustee, bearing interest or issued at a discount
to the extent permitted by applicable law:

          (a)  direct obligations of, or obligations the principal of and
               interest on which are unconditionally guaranteed by, the United
               States of America (including obligations issued or held in book-
               entry form on the books of the Department of the Treasury of the
               United States of America);

          (b)  bonds, debentures, notes or other evidence of indebtedness issued
               or guaranteed by any of the following federal agencies and
               provided such obligations are backed by the full faith and credit
               of the United States of America (stripped securities are only
               permitted if they have been stripped by the agency itself):

                    (i)  U.S. Export-Import Bank (direct obligations or fully
               guaranteed certificates of beneficial ownership);

                    (ii)      Farmers Home Administration (certificates of
               beneficial ownership);

                    (iii)     Federal Financing Bank;

                    (iv)      General Services Administration participation
               certificates;

                    (v)       Government National Mortgage Association ("GNMA")
               guaranteed mortgage-backed bonds and pass through certificate
               obligations;

                    (vi)      U.S. Maritime Administration guaranteed Title XI
               financing obligations; or

                    (vii)     U.S. Department of Housing and Urban Development
               (HUD) project notes, local authority bonds, new communities
               debentures (U.S. guaranteed) and U.S. public housing notes and
               bonds -- U.S. government guaranteed public housing notes and
               bonds;

          (c)  bonds, debentures, notes or other evidence of indebtedness issued
               or guaranteed by any of the following non-full faith and credit
               U.S. government agencies (stripped securities are only permitted
               if they have been stripped by the agency itself):

                    (i)       Federal Home Loan Bank System senior debt
               obligations;

                    (ii)      FHLMC senior debt obligations and participation
               certificates;

                    (iii)     FNMA mortgage-backed securities and senior debt
               obligations;

                    (iv)      Student Loan Marketing Association senior debt
               obligations; or

                    (v)       Resolution Funding Corporation obligations; or

          (d)  money market mutual funds rated "AAAm" or "AAAm-G" by Standard &
               Poor's Ratings Services, whose investments are limited to
               securities of the types listed in (a)-(c) above.

          "LEASE" shall mean that certain U.S. Government Lease for Real
Property, dated August 12, 1994, as supplemented by a Supplemental Lease
Agreement No. 1, dated January 3, 1996, and a supplemental Lease Agreement No.
2, dated March 27, 1996, between the General Services Administration of the
United States of America and Parcel 49C Limited Partnership, a District of
Columbia limited partnership, as the same may be further supplemented or
amended.

          "NON-RECOURSE INDEBTEDNESS" shall mean any indebtedness secured by a
lien, which is not a general obligation of the Authority and liability for which
is effectively limited to the property subject to such

                                       A-3

<PAGE>

lien with no recourse to, or lien upon, directly or indirectly, the Revenues or
any other property of the Authority.

          "NON SET-OFF LEASE PAYMENTS" shall mean rental payments made pursuant
to the Lease that are not subject to set-off by reason of the failure of 49C to
perform its obligations thereunder.

          "OPERATING AGREEMENT" shall mean the Operating Agreement, dated as of
March 1, 1996, by and between the Authority and the District.

          "OPERATING AGREEMENT PAYMENTS" shall mean the Operating Agreement
Payments required to be made by the District under the Operating Agreement, as
the same shall be amended and supplemented from time to time in accordance with
the express provisions thereof.

          "OPERATION AND MAINTENANCE EXPENSES" shall mean such reasonable and
necessary current expenses, paid or accrued, for operation, maintenance and
repair of the Recreational Facilities (as such term is defined in the Operating
Agreement) as may be determined by the Authority, and the term may also include
except as limited by contract or otherwise limited by law, without limiting the
generality of the foregoing:

               (1)  legal and overhead expenses of the Authority directly
                    related and reasonably allocable to the administration of
                    the Recreational Facilities;


               (2)  all insurance premiums and premiums or fees for fidelity
                    bonds appertaining to or required for the Recreational
                    Facilities or a reasonably allocable share of a premium of
                    any blanket bond or policy pertaining to the Recreational
                    Facilities;

               (3)  contractual services, professional services, salaries,
                    administrative expenses, and costs of labor appertaining to
                    the Recreational Facilities;

               (4)  the costs incurred in the collection of all or any part of
                    the Revenues from Recreational Facilities;

               (5)  any costs of utility services furnished to the Recreational
                    Facilities; and

               (6)  payments of taxes, payments in lieu of taxes, assessments
                    imposed by any governmental unit or public corporation, or
                    any monthly deposits to an escrow established for any such
                    purposes;

               "Operation and Maintenance Expenses" does not include:

          (a)  any allowance for depreciation;

          (b)  any costs of Recreational Facilities renewals or replacements,
               major repairs, reconstruction, improvements, extensions, or
               betterments;

          (c)  any accumulation of reserves for capital replacements;

          (d)  any reserves for operation, maintenance, or repair of the
               Recreational Facilities;

          (e)  any allowance for the redemption of the Bonds, or the payment of
               any interest thereon;

          (f)  any liabilities incurred in the acquisition or improvement of any
               properties comprising the Recreational Facilities or any
               combination thereof; and

          (g)  any other ground of legal liability not based on contract.

          "OPINION OF COUNSEL" shall mean a written opinion of counsel (who may
be counsel for the Authority) appointed by the Authority.


                                       A-4


<PAGE>

          "OUTSTANDING" shall mean all Bonds (including, under certain
circumstances, pledged bonds) theretofore authenticated and delivered by the
Trustee under the Indenture except:

          (a)  Bonds theretofore cancelled by the Trustee or surrendered to the
Trustee for cancellation;

          (b)  Bonds for the payment or redemption of which Available Moneys in
the necessary amount shall have theretofore been deposited with the Trustee
(whether upon or prior to the maturity or the redemption date of such Bonds);
provided that, if such Bonds are to be redeemed prior to the maturity thereof,
notice of such redemption shall have been given as provided in the Indenture or
provision satisfactory to the Trustee shall have been made for the giving of
such notice; and

          (c)  Bonds in lieu of, or in substitution for, which other Bonds shall
have been authenticated and delivered by the Trustee pursuant to the Indenture.

          "PROJECT" shall mean the acquisition, construction, equipping and
improving of certain public improvements consisting of parks and recreational
facilities.

          "PROPERTY" means the Real Estate (upon which certain of the Project
facilities will be located) and water rights acquired with proceeds of the
Bonds.

          "PROPORTIONATE SHARE" shall mean, for a District, the ratio of the
estimated assessed value of all taxable real and personal property in such
District to the total assessed value of all taxable real and personal property
in all the Districts.

          "RATING AGENCY" shall mean Standard & Poor's Ratings Services or, if
Standard & Poor's Ratings Services is no longer rating the Bonds, any nationally
recognized statistical rating organization which is then rating the Bonds.

          "RECREATIONAL FACILITIES" shall mean parks and recreational facilities
located within or for the benefit of the District.

          "RECREATIONAL FACILITIES AGREEMENT" shall mean the Recreational
Facilities Agreement, dated as of March 1, 1996, between the Authority and the
District.

          "REGISTRATION RIGHTS AGREEMENT" shall mean the agreement among the
Authority, the Credit Enhancement Provider and the Underwriter, described more
fully under "THE BONDS - Registration Rights, - Additional Interest."

          "REIMBURSEMENT AGREEMENT" shall mean the Reimbursement Agreement,
dated as of March 1, 1996, between the Authority and the Credit Enhancement
Provider, as the same may be supplemented or amended

          "REVENUE OBLIGATION" shall mean the obligation of the Districts under
the Intergovernmental Agreement to pay the deficiencies required to pay
obligations secured by the Deed of Trust.

          "REVENUES" shall mean all proceeds, charges, income, rents, receipts,
profits, benefits and existing fund balances of the Authority, exclusive of (i)
payments for Operation and Maintenance Expenses paid by the District pursuant to
the Operating Agreement, (ii) any gifts, grants, bequests, donations and
contributions to the extent specifically restricted by the donor to a particular
purpose inconsistent with their use for Bond payments, and (iii) any payments
received by the Authority pursuant to the Development Agreement.

          "SPECIAL TAX COUNSEL" shall mean Jenner & Block, Chicago, Illinois or
such other nationally recognized tax counsel as is acceptable to the Trustee.

          "TRUSTEE" shall mean SouthTrust Bank of Alabama, National Association,
a national banking association organized and existing under and by virtue of the
laws of the United States of America having a corporate trust office in
Birmingham, Alabama, or its successor as Trustee under the Indenture.


                                       A-5


<PAGE>

          "TRUST ESTATE" shall mean all of the property described in the
granting clauses of the Indenture or of any supplemental indenture.


          "UNDERWRITER" shall mean Lehman Brothers Inc.





                                       A-6
<PAGE>

                                  THE INDENTURE

     The following summarizes certain provisions of the Indenture which are not
summarized elsewhere in the Limited Offering Memorandum.  This summary does not
purport to be complete and is subject in all respects to the provisions of, and
is qualified in its entirety by, reference to the Indenture.  Copies of the
Indenture are available from the Trustee.

AUTHORIZED AMOUNT OF BONDS

     The total principal amount of Bonds that may be issued under the Indenture
is expressly limited to $66,975,000.  The Authority may issue Bonds under the
Indenture in exchange for the Bonds pursuant to the Registration Rights
Agreement.

ADDITIONAL BONDS AND SUBORDINATE INDEBTEDNESS

     So long as any of the Bonds remain Outstanding, the Authority will not
issue any additional bonds or obligations payable from Revenues or having a lien
upon the Trust Estate having priority over, or on a parity with, the Bonds.

     The Authority may incur any Indebtedness secured by a lien or encumbrance
which is expressly stated to be junior and subordinate to the lien and
encumbrance upon the Revenues created under the Indenture and to the Deed of
Trust except as otherwise provided in the Indenture.  Subordinate Indebtedness
shall have no rights of acceleration or foreclosure.  No such subordinate
Indebtedness shall be secured by the Credit Enhancement.  No such subordinate
Indebtedness shall be issued without the consent of the Credit Enhancement
Provider.

ESTABLISHMENT OF FUNDS

     Upon the issuance of the Bonds, the Authority and/or the Trustee will
establish and create the following funds and accounts:

          (a)  Project Fund; and within the Project Fund, the Costs of Issuance
               Account.

          (b)  Revenue Fund.

          (c)  Collateralized Credit Fund.

          (d)  Interest Fund, and within the Interest Fund, the following
               accounts:

                    (i)       Capitalized Interest Account

                    (ii)      Collateralized Credit Interest Account

                    (iii)     Revenue Interest Account

          (e)  Principal Fund, and within the Principal Fund, the following
               accounts:

                    (i)       Collateralized Credit Principal Account

                    (ii)      Revenue Principal Account

                    (iii)     The Sinking Fund Accounts

          (f)  Redemption Fund, and within the Redemption Fund, the following
               accounts:

                    (i)       Special Redemption Account

                    (ii)      Redemption Holding Account

          (g)  Rebate Fund.


                                       A-7

<PAGE>

PROJECT FUND

     The Authority shall establish, maintain and hold a separate fund to be
known as the "Project Fund." The proceeds of the Bonds deposited in the Project
Fund shall be applied for the purpose of providing funds for the acquisition of
the Property and payment of expenses incident to the Project, including
architectural and engineering fees and expenses, tests and inspection, surveys,
land acquisition, the fees and expenses of the Trustee, costs of issuance and
all other expenses in connection with the preparation, issuance and delivery of
the Bonds of legal fees and expenses of counsel, and similar expenses.

     Before any expenditure is made from the Project Fund, the Authority shall
determine that the entire sum of the expenditures then to be made and of all
other expenditures previously made from the Project Fund have been used to
finance the acquisition of the Property and expenses incident thereto, all of
which property other than land is of a character subject to the allowance for
depreciation under Section 167 of the Code.

REVENUE FUND

     The Authority agrees that, so long as any of the Bonds remain Outstanding,
all of the Revenues of the Authority shall be deposited as soon as practicable
upon receipt in the Revenue Fund which the Authority shall establish and
maintain in an account to be held by the Trustee.  Subject only to the
provisions of the Indenture permitting the application thereof for the purposes
and on the terms and conditions set forth therein, the Authority pledges and, to
the extent permitted by law, grants a security interest to the Trustee in the
Revenue Fund to secure the payment of the principal of, premium, if any, and
interest on the Bonds.

CREDIT ENHANCEMENT OF THE BONDS; ALLOCATION OF REVENUES

     So long as the Credit Enhancement is in effect and no Event of a Default
exists thereunder, all payments of principal and interest on the Bonds (except
for interest for the period prior to March 1, 1998, Additional Interest, other
Extra Payments and amounts payable on redemption in the event of a taking of the
Project by eminent domain) shall be made from the proceeds of draws on the
Credit Enhancement which are to be deposited directly in the Collateralized
Credit Fund.  Pursuant to the Bond Pledge and Security Agreement, all payments
in regard to the Collateral are to be made directly to the Trustee, and shall be
deposited in the Collateralized Credit Fund.  To the extent that the amount in
the Collateralized Credit Fund is insufficient on any Interest Payment Date to
pay interest (other than interest for the period prior to March 1, 1998,
Additional Interest, any other interest constituting Extra Payments and Interest
due as a result of a redemption (described above) and principal due and payable
on the Bonds on such Interest Payment Date (other than amounts payable on such a
redemption) the Trustee shall demand that the Credit Enhancement Provider
immediately deposit the amount of such deficiency in the Collateralized Credit
Fund.

     The Trustee shall have the obligation to hold and maintain the Credit
Enhancement for the benefit of the owners of Bonds in accordance with its terms.
If at any time during the term of the Credit Enhancement any successor Trustee
shall be appointed and qualified under the Indenture, the resigning Trustee
shall request that the provider of such Credit Enhancement transfer or cause the
transfer of the Credit Enhancement to the successor Trustee.  If the resigning
Trustee fails to make this request, the successor Trustee shall do so before
accepting appointment.

     On or before each Interest Payment Date, the Trustee shall transfer from
the Revenue Fund and deposit into the following respective accounts or transfer
the respective amount directly, as provided below, the following amounts, in the
following order of priority, the requirements of each such account (including
the making up of any deficiencies in any such account resulting from lack of
moneys sufficient to make any earlier required deposit) at the time of deposit
to be satisfied before any transfer is made to any account subsequent in
priority:

               (1)  Available Moneys to the Revenue Interest Account, in an
amount equal to the aggregate amount of interest becoming due and payable on the
next such Interest Payment Date on all Bonds then Outstanding (other than
Additional Interest, interest constituting Excess Payments or payable as a
result of certain redemptions) less any amounts to be transferred to the
Interest Fund from the Capitalized Interest Account as capitalized interest and
less any transfers from the Collateralized Credit Interest Account for the
payment of such interest;


                                       A-8

<PAGE>

               (2)  Available Moneys to the Revenue Principal Account, in an
amount equal to the aggregate amount of principal, if any, becoming due and
payable on the Outstanding Bonds (including any mandatory sinking fund payments
required to be paid into the respective Sinking Fund Accounts for Outstanding
Bonds) on the next ensuing Interest Payment Date, less any transfers from the
Collateralized Credit Principal Account for the payment of such principal;

               (3)  To the Rebate Fund in accordance with the rebate
instructions;

               (4)  To the Credit Enhancement Provider to the extent an amount
equal to amounts drawn under the Credit Enhancement and applied to the payment
of principal of or interest on the Bonds, together with interest thereon as
determined pursuant to the Reimbursement Agreement, to the extent a request for
the same has been submitted to the Trustee by the Credit Enhancement Provider or
otherwise provided pursuant to the Credit Enhancement, and to the extent not
previously reimbursed to the Credit Enhancement Provider by the Trustee from
Revenues, unless a default by the Credit Enhancement Provider has occurred and
is continuing under the Credit Enhancement, in which event such amount shall
remain in the Revenue Fund until such default has been cured or otherwise waived
by the Trustee, at which time such amount shall be paid to the Credit
Enhancement Provider; provided that Revenues received under the Development
Agreement shall be used first for item (5) that follows;

               (5)  To the Revenue Interest Account to the extent necessary for
the payment of Additional Interest or any other interest constituting Extra
Payments, to be applied to pay such interest in the order in which it accrued;

               (6)  To the extent necessary to pay any other Extra Payments in
the order in which such Extra Payments become due and payable;

               (7)  To the extent necessary to pay any Trustee and other fees
and expenses then due and payable under the Indenture in the order that such
amounts become due and payable.

     Any moneys remaining in the Revenue Fund after the foregoing transfers may
be used by the Authority for any lawful purpose.

REBATE FUND

     The Indenture creates and establishes, with the Trustee, a Rebate Fund in
the name of the Authority which shall be expended in accordance with the
provisions of the Indenture and the Tax Certificate.  The Trustee shall make
deposits to and disbursements from the Rebate Fund based upon the instructions
of the Authority pursuant to the Indenture and the Tax Certificate.  The
Authority shall be responsible for making all such deposits in the Rebate Fund
as required in the Indenture.  The Trustee shall invest the Rebate Fund at the
direction of the Authority subject to the restrictions set forth in the tax
certificate to be delivered at the time of issuance of the Bonds.

INVESTMENT OF FUNDS

     Subject to the provisions of the Indenture regarding the deposit of and use
of moneys in the Rebate Fund, all moneys in any of the funds and accounts
established pursuant to the Indenture and held by the Trustee shall be invested
by the Trustee as directed by the Authority in writing solely in Investment
Securities.  Investment Securities may be purchased at such prices determined by
the Authority.  The Authority shall direct such investment so that all
Investment Securities shall be acquired subject to the Authority's tax covenants
contained in the Indenture, the limitations as to maturities set forth in the
Indenture and such additional limitations or requirements consistent with the
foregoing as may be established by written request of the Authority.  Absent the
direction of the Authority in the time and manner set forth above, the Trustee
shall invest only in Federal Securities.

     All interest, profits and other income received from the investment of
moneys in the Project Fund shall be deposited to the Revenue Fund.  All
interest, profits and other income received from the investment of moneys in any
other fund or account established pursuant to the Indenture shall be credited to
the fund or account for the credit of which such Investment Security was
acquired.


DISCHARGE OF THE INDENTURE


                                       A-9
<PAGE>

      When all Bonds secured by the Indenture shall be paid in accordance with
their terms (or payment of such Bonds has been provided for in the manner set
forth in the following paragraph) together with all other sums payable
thereunder, including, amounts due and payable to the Trustee, then the
Indenture and the Trust Estate and all rights granted thereunder (except for any
provisions which may continue to apply as described in the following paragraph)
shall thereupon cease, terminate and become void and be discharged and
satisfied.  In such event the Trustee shall assign and transfer to the Authority
(or to the Credit Enhancement Provider if amounts are then due under the
Reimbursement Agreement or the Deed of Trust) all property then held by the
Trustee thereunder and shall execute such documents as may be reasonably
required by the Authority (or by the Credit Enhancement Provider if amounts are
then due under the Reimbursement Agreement or the Deed of Trust) or shall turn
over to the Authority (or to the Credit Enhancement Provider if amounts are then
due under the Reimbursement Agreement or the Deed of Trust) any surplus in any
fund, except the Rebate Fund.

     Payment of any outstanding Bond prior to the maturity or redemption date
thereof shall be deemed to have been provided for if (i) in case said Bond is to
be redeemed on any date prior to its maturity, the Authority shall have given to
the Trustee in form satisfactory to it irrevocable instructions to give on a
date in accordance with the provisions of notice of redemption of such Bond on
said redemption date, (ii) there shall have been deposited with the Trustee
either Available Moneys in an amount which shall be sufficient or noncallable
Federal Securities the principal of and the interest on which when due, and
without any reinvestment thereof, will provide moneys which, together with the
Available Moneys, if any, deposited with or held by the Trustee at the same time
and available therefor, shall be sufficient, as verified by an Accountant's
report, to pay when due the principal of, premium, if any, and interest due and
to become due on said Bond on and prior to the redemption date or maturity date
thereof, as the case may be, (iii) the Trustee shall have a valid first priority
security interest in such Federal Securities and all proceeds thereof and
distributions thereon and such Federal Securities shall be in the name of the
Trustee for the benefit of the Holders, (iv) the Trustee shall have received an
opinion of counsel to the effect that (1) the Federal Securities have been duly
and validly assigned and delivered to the Trustee for the benefit of the
Holders, and (2) the security interest of the Trustee for the benefit of the
Holders is a first priority security interest perfected to the extent perfection
is permissible under the laws of the state where the collateral is located, (v)
the Trustee will receive an opinion of bond counsel to the effect that
defeasance in accordance with the provisions of the Indenture shall not
adversely affect the exclusion from gross income of interest on the Bonds for
federal income tax purposes, (vi) the Trustee shall have received written
confirmation from the Rating Agency that the defeasance will not result in a
downgrade, withdrawal or qualification of the ratings then assigned to the
Bonds, and (vii) in the event said Bond is not by its terms subject to
redemption within the next 35 days, the Authority shall have given the Trustee
in form satisfactory to it irrevocable instructions to give, as soon as
practicable in the same manner as the notice of redemption is given pursuant
hereto, a notice to the registered owner of such Bond that the deposit required
by (ii) above has been made with the Trustee and that payment of said Bond has
been provided for in accordance with the Indenture.

DISTRICT RIGHTS

     The Authority covenants and agrees that all activities of the Authority
shall be undertaken for the benefit of the District.  Upon termination of the
Indenture and discharge of the obligations of the Authority, the District shall
be entitled to acquire title to the Project without cost.

     The District is granted the right to obtain, at any time, unencumbered fee
title and exclusive possession of property financed by obligations of the
Authority (including the Bonds), and any additions to such property by (1)
placing into escrow an amount that will be sufficient to defease such
obligations, (2) paying reasonable costs incident to the defeasance, (3) paying
any amount then due by the Authority to the Credit Enhancement Provider pursuant
to the Reimbursement Agreement and the Deed of Trust, and (4) paying or
defeasing any subordinate obligation issued or incurred pursuant to the
Indenture.  The District, at any time before it defeases such obligations, shall
not agree or otherwise be obligated to convey any interest in the Project to any
person (including the United States of America or its agencies or
instrumentalities) for any period extending beyond or beginning after the
District defeases such obligations.  In addition, the District shall not agree
or otherwise be obligated to convey a fee interest in the Project to any person
who was a user thereof (or a related person) before the defeasance within 90
days after the District defeases such obligations.

     The Authority shall immediately cancel all encumbrances on the Project,
including all leases and management agreements.  Any lease, management contract,
or similar encumbrance on the Project will be considered immediately cancelled
if the lessee, management company, or other user vacates the Project within a


                                      A-10

<PAGE>

reasonable time, generally not to exceed 90 days, after the date the District
exercises its rights under the immediately preceding paragraph.

     In addition to the foregoing, if the Authority defaults in its payment
obligations, the District is granted an exclusive option to purchase the Project
for the amount of the outstanding indebtedness and accrued interest to the date
of default.  The Trustee shall provide notice to the District of any Event of
Default within 30 days of the occurrence thereof.  The District shall have (a)
90 days from the date it is notified by the Trustee of the default in which to
exercise the option (which shall be exercised by giving written notice of such
exercise to the Trustee and the Authority), and (b) 90 days from the date it
exercises the option to purchase the property.

     Unencumbered fee title to the Project and any additions thereto and
exclusive possession and use thereof will vest in the District without demand or
further action on its part when all obligations issued under the Indenture
(including the Bonds) are discharged.

EVENTS OF DEFAULT

     Each of the following is defined as and shall be deemed an "Event of
     Default" under the Indenture:

          a.   Default shall be made in the due or punctual payment (other than
     Extra Payments prior to the maturity of the Bonds) of the principal of, or
     premium (if any) on, any Bond when and as the same shall become due and
     payable, whether at maturity as therein expressed, by proceedings for
     redemption, by declaration or otherwise;

          b.   Default shall be made in the due and punctual payment (other than
     Extra Payments prior to the maturity of the Bonds) of any installment of
     interest on any Bond, when and as such interest installment shall become
     due and payable;

          c.   Default shall be made by the Authority in the performance or
     observance of any other of the covenants, agreements or conditions on its
     part in the Indenture or in the Bonds contained, and such default shall
     have continued for a period of 45 days after written notice thereof,
     specifying such default and requiring the same to be remedied, shall have
     been given to the Authority and the Credit Enhancement Provider by the
     Trustee, or to the Authority and the Trustee by the Credit Enhancement
     Provider;

          d.   The Authority shall (1) admit in writing its inability to pay its
     debts generally as they become due, (2) file a petition in bankruptcy or to
     take advantage of any insolvency act, (3) make an assignment for the
     benefit of its creditors, (4) consent to the appointment of a receiver of
     itself or of the whole or any substantial part of its property, or (5) on a
     petition in bankruptcy filed against the Authority, be adjudicated a
     bankrupt;

          e.   The Authority shall file a petition or answer seeking
     reorganization or arrangement under the federal bankruptcy laws or any
     other applicable law of the United States of America or any State thereof;

          f.   A court of competent jurisdiction shall enter an order, judgment
     or decree appointing, without the consent of the Authority, a receiver of
     the Authority, or of the whole or any substantial part of its property, or
     approving a petition filed against the Authority seeking reorganization of
     the Authority under the federal bankruptcy laws or any other applicable law
     of the United States of America or any State thereof, and such order,
     judgment or decree shall not be vacated or set aside and stayed within 60
     days from the date of the entry thereof;

          g.   Under the provisions of any other law for the relief or aid of
     debtors, any court of competent jurisdiction shall assume custody or
     control of the Authority or of the whole or any substantial part of its
     property, and such custody or control shall not be terminated or stayed
     within 60 days from the date of assumption of such custody or control; or

          h. There is a breach of a covenant or a material representation by the
     Credit Enhancement Provider under the Credit Enhancement.


                                      A-11

<PAGE>

      Notwithstanding the foregoing, so long as the Bondholders are being paid
and no default exists under the Credit Enhancement, the occurrences described in
paragraphs (c) through (h) above shall not be deemed to be Events of Default
unless and until the Credit Enhancement Provider has consented thereto.

ACCELERATION

     Subject to certain rights of the District set forth in the Indenture, upon
the occurrence of any Event of Default, the Trustee, by notice in writing to the
Authority may, and upon written request of the Credit Enhancement Provider or
the Holders of not less than 25% in aggregate principal amount of the Bonds at
the time outstanding, shall, declare the principal of all the Bonds then
outstanding, and the interest accrued thereon, to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable, but only if Available Money sufficient to pay such
Bonds shall be deposited with the Trustee on or before the date specified for
such acceleration.  The foregoing is subject to the limitation that (i) no
acceleration shall occur without the consent of the Credit Enhancement Provider
while the Credit Enhancement Provider has continued to meet its obligations to
the Trustee pursuant to the Credit Enhancement and is otherwise not in breach of
a covenant or a material representation by the Credit Enhancement Provider under
the Credit Enhancement and (ii) neither the consent of the Credit Enhancement
Provider nor the deposit of Available Money shall be required for acceleration
if the Credit Enhancement Provider has failed to meet such obligations or is
otherwise in breach of a covenant or material representation by the Credit
Enhancement Provider under the Credit Enhancement.

OTHER REMEDIES; RIGHTS OF BONDHOLDERS

     Upon the happening and continuance of an Event of Default the Trustee may
pursue any available remedy to enforce the performance of or compliance with any
other obligation or requirement of the Indenture.  Further, upon the happening
of an Event of Default resulting in acceleration, the Trustee shall have the
right to (a) foreclose on the mortgage created by the Deed of Trust through
judicial proceedings or through the exercise of a power of sale; and (b) by
suit, action, or proceeding in any court of competent jurisdiction cause
possession of the Project or any part thereof to be awarded to the Trustee or to
obtain the appointment of a receiver of the Project.

     The Holders of a majority in aggregate principal amount of the Bonds at the
time outstanding shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, under the Indenture.  In the event
that the Trustee, upon the happening of an Event of Default, shall have taken
some action, by judicial proceedings or otherwise, pursuant to its duties under
the Indenture, whether upon its own discretion or upon the request of the Credit
Enhancement Provider and the Holders of 25% in aggregate principal amount of
Bonds then outstanding, it shall have full power, in the exercise of its
discretion for the best interests of the Bondholders, with the consent of the
Credit Enhancement Provider so long as there are no defaults under the Credit
Enhancement, with respect to the continuance, discontinuance, withdrawal,
compromise, settlement or other disposal of such action; provided, however, that
the Trustee shall not, unless there no longer continues an Event of Default,
discontinue, withdraw, compromise, settle or otherwise dispose of any litigation
pending at law or in equity, if at the time there has been filed with it a
written request signed by the Credit Enhancement Provider or the Holders of at
least a majority in aggregate principal amount of the Bonds at the time
outstanding opposing such discontinuance, withdrawal, compromise, settlement or
other disposal of such litigation.

LIMITATION ON BONDHOLDERS' RIGHT TO SUE

     No Holder of any Bond issued under the Indenture shall have the right to
institute any suit, action or proceeding at law or in equity, for the execution
of any trust or power of the Indenture or for any other remedy under or upon the
Indenture, unless (a) such Holder shall have previously given to the Trustee and
the Credit Enhancement Provider written notice of the occurrence of an Event of
Default; (b) the Holders of at least 25% in aggregate principal amount of the
Bonds then outstanding shall have made written request to the Trustee to
exercise the powers hereinbefore granted or to institute such action, suit or
proceeding in its own name; (c) such Holder or said Holders shall have tendered
to the Trustee reasonable indemnity against the costs, expenses and liabilities
to be incurred in compliance with such request; and (d) the Trustee shall have
refused or omitted to comply with such request for a period of 30 days after
such written request shall have been received by, and said tender of indemnity
shall have been made to, the Trustee.


                                      A-12

<PAGE>

DISTRICT'S RIGHT TO PURCHASE PROJECT

     Anything to the contrary in the Indenture notwithstanding, if an Event of
Default shall occur, the District shall have an exclusive option to purchase all
properties, equipment or other assets financed by the Bonds and any and all
additions to that property, equipment or assets for an amount equal to the
unpaid principal amount of all Bonds then outstanding and accrued interest
thereon to the date of the Event of Default.

SUPPLEMENTAL INDENTURES NOT REQUIRING CONSENT OF BONDHOLDERS

     The Authority, when authorized by resolution of the District, and the
Trustee, from time to time and at any time, but with the consent of the Credit
Enhancement Provider (so long as the Credit Enhancement Provider is not in
default under the Credit Enhancement), subject to the conditions and
restrictions in the Indenture contained, may enter into an indenture or
indentures supplemental thereto, which indenture or indentures thereafter shall
form a part thereof, for any one or more or all of the following purposes:

          a.   to add to the covenants and agreements of the Authority in the
     Indenture contained, other covenants and agreements thereafter to be
     observed, or to surrender any right or power therein reserved to or
     conferred upon the Authority, provided, that no such covenant, agreement or
     surrender shall adversely affect the interests of the Holders of the Bonds;

          b.   to evidence the succession of another corporation to the
     Authority, or successive successions, and the assumption by a successor
     corporation of the covenants and obligations of the Authority in the Bonds
     and in the Indenture contained;

          c.   to make such provisions for the purpose of curing any ambiguity,
     or of curing, correcting or supplementing any defective provision contained
     in the Indenture, or in regard to other matters or questions arising under
     the Indenture, as the Authority may deem necessary or desirable and not
     inconsistent with the Indenture and which shall not materially adversely
     affect the interests of the Holders of the Bonds; or


          d.   to modify, amend or supplement the Indenture or any indenture
     supplemental thereto in such manner as to permit the qualification thereof
     under the Trust Indenture Act of 1939 or any similar federal statute
     hereafter in effect, and, if they so determine, to add to the Indenture or
     any indenture supplemental thereto such other terms, conditions and
     provisions as may be permitted by said Trust Indenture Act of 1939 or
     similar federal statute, and which shall not adversely affect the interests
     of the Holders of the Bonds.

     Any Supplemental Indenture authorized by the provisions of this Section may
be executed by the Authority and the Trustee without the consent of the Holders
of any of the Bonds at the time outstanding but the Trustee shall not be
obligated to enter into any such Supplemental Indenture which affects the
Trustee's own rights, duties or immunities under the Indenture or otherwise.

SUPPLEMENTAL INDENTURES REQUIRING CONSENT OF BONDHOLDERS

     With the consent of the Credit Enhancement Provider (so long as the Credit
Enhancement Provider is not in default under the Credit Enhancement) and the
Holders of not less than 60% in aggregate principal amount of the Bonds at the
time Outstanding, the Authority, when authorized by a resolution of the
District, and the Trustee may from time to time and at any time enter into an
indenture or indentures supplemental to the Indenture for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of the Indenture or of any Supplemental Indenture; provided, however, that no
such Supplemental Indenture shall (1) extend the fixed maturities of the Bonds
or reduce the rate of interest thereon or extend the time of payment of
interest, or reduce the amount of the principal thereof, or reduce any premium
payable on the redemption thereof, without the consent of the Holder of each
Bond so affected, or (2) reduce the aforesaid percentage of Holders of Bonds
whose consent is required for the execution of any such Supplemental Indenture,
or permit the creation of any lien on the Trust Estate prior to or on a parity
with the lien of the Indenture or deprive the Holders of the Bonds of the lien
created by the Indenture upon the Trust Estate, without the consent of the
Holders of all of the Bonds then Outstanding and the Credit Enhancement
Provider.  Upon receipt by the Trustee of a certified resolution authorizing the
execution of any such Supplemental Indenture, and upon the filing with the
Trustee of evidence of the consent of the Credit Enhancement Provider and
Bondholders, as aforesaid, the Trustee shall join with the Authority in the
execution of such Supplemental

                                      A-13

<PAGE>

Indenture unless such Supplemental Indenture affects the Trustee's own rights,
duties or immunities under the Indenture or otherwise, in which case the Trustee
may in its discretion, but shall not be obligated to, enter into such
Supplemental Indenture.

AMENDMENTS TO OPERATING AGREEMENT AND INTERGOVERNMENTAL AGREEMENT

     The Operating Agreement and the Intergovernmental Agreement may be amended
only with the consent of the Trustee and the Credit Enhancement Provider (so
long as the Credit Enhancement Provider is not in default under the Credit
Enhancement).  The Trustee shall consent to such amendments on the same basis as
it consents to amendments to the Indenture.




                                      A-14

<PAGE>

                   COLLATERALIZED CREDIT ENHANCEMENT AGREEMENT

     In order to provide credit enhancement for the Bonds, the Credit
Enhancement Provider and the Trustee have entered into a Collateralized Credit
Enhancement Agreement dated as of March 1, 1996 (the "Collateralized Credit
Enhancement Agreement").  Under the Collateralized Credit Enhancement Agreement,
the Credit Enhancement Provider is required to provide the Trustee with all
amounts necessary to pay the principal of and interest on the Bonds when due
(the "Indebtedness").  The Indebtedness does not include any Extra Payments.
This obligation of the Credit Enhancement Provider has been secured by the
pledge and delivery to the Trustee of the Collateral.  The obligation of the
Credit Enhancement Provider to pay principal of and interest on the Bonds as
described above continues until such time as the Indebtedness has been paid in
full, but the Credit Enhancement Provider's liability therefor is limited to the
Collateral.

     Pursuant to the provisions of the Collateralized Credit Enhancement
Agreement, the Trustee may not, without the consent of the Credit Enhancement
Provider, change any of the terms of the Bonds contained in the Indenture,
modify or waive any of the terms of any agreement with the Authority with
respect to the Bonds or take and hold any security for the payment of the Bonds
or performance of the Credit Enhancement Provider's obligations thereunder.

     Under the Collateralized Credit Enhancement Agreement, the obligations of
the Authority to the Credit Enhancement Provider or any other person controlled
by or owned in whole or in part by the Credit Enhancement Provider are
subordinated to the Authority's obligations on the Indebtedness during any
period that a default exists under the Indebtedness.  The Collateralized Credit
Enhancement Agreement also provides that, without the prior written consent of
the Trustee, any such subordinated indebtedness may not be paid, nor may the
Credit Enhancement Provider accept or cause or permit any other person
controlled by or owned in whole or in part by it to accept any payment of such
subordinated indebtedness, at any time after default exists under the
Indebtedness.



                                      A-15

<PAGE>

                             REIMBURSEMENT AGREEMENT

     In connection with the Credit Enhancement Provider providing the Credit
Enhancement to secure the payment of the principal of and interest on the Bonds,
the Authority and the Credit Enhancement Provider shall enter into a
Reimbursement Agreement dated as of March 1, 1996 ("Reimbursement Agreement")
establishing the terms and conditions of the payment by the Authority to the
Credit Enhancement Provider of any amounts paid by it under the Credit
Enhancement.  In accordance with the Reimbursement Agreement, the Authority is
required to pay to the Credit Enhancement Provider all amounts paid by the
Credit Enhancement Provider under the Credit Enhancement.  Such amounts are
payable on the day on which such a payment is made pursuant to the Credit
Enhancement, together with interest on any amounts not timely paid at the rate
of 9% per annum.  The Authority is not obligated to pay interest on any payment
under the Credit Enhancement if it has deposited with the Trustee the total
amount of the payment to be made pursuant to the Credit Enhancement prior to the
date of payment thereof.  In addition, the Authority has agreed to pay to the
Credit Enhancement Provider, on the date of the issuance of the Bonds, a
commitment fee of 6% of the principal amount of the Bonds.

     The Authority is required under the Reimbursement Agreement to: comply with
all laws, ordinances, orders, rules and regulations applicable to it; take all
reasonable efforts and diligently proceed to complete the Recreational
Facilities (as defined in the Reimbursement Agreement), including the golf
course; maintain and preserve all of its properties; not amend, modify or
supplement certain documents related to the Credit Enhancement without the
Credit Enhancement Provider's prior consent; maintain its existence as a non-
profit corporation under the laws of the State of Colorado; and provide certain
financial information to the Credit Enhancement Provider, including the
Authority's annual budget, annual mill levy certifications of each of the
Districts and the assessed valuation of all property owned by the Authority.
The Authority has also agreed to charge and collect such rents, rates, fees or
charges for the use of the Project as will be sufficient, together with certain
other revenues, to produce Net Income Available for Debt Service (as defined in
the Indenture) equal to at least 1.30 times Aggregate Annual Debt Service (as
defined in the Indenture) on all Bonds Outstanding for the next fiscal year.

     Under the Reimbursement Agreement, the following constitute Events of
Default:

                    1.   If any representation or warranty is made by the
                         Authority thereunder or in any related document or in
                         any other certificate or statement furnished by the
                         Authority thereunder or pursuant to any related
                         document is false or untrue or incomplete in any
                         material respect when made;

                    2.   If the Authority fails to observe or perform any of the
                         covenants, conditions or provisions of the
                         Reimbursement Agreement, and such failure continues for
                         ten days after notice from the Credit Enhancement
                         Provider to the Authority;

                    3.   If a default by the Authority occurs under the
                         Indenture and continues for a period of ten days, or a
                         default by the Authority occurs and any applicable
                         grace period lapses under any other related documents
                         to which the Authority is a party;

                    4.   If the Reimbursement Agreement or any other related
                         document to which the Authority is a party is no longer
                         valid and binding on the Authority;

                    5.   If the Authority becomes insolvent or bankrupt or
                         certain other related bankruptcy actions are taken by
                         or with respect to the Authority; and

                    6.   If the Authority fails to pay any amounts due and owing
                         under the Reimbursement Agreement.

     If an Event of Default occurs under the Reimbursement Agreement, the Credit
Enhancement Provider may exercise any of the following remedies;

                    1.   Foreclose on the Deed of Trust, subject to the
                         limitations thereof;

                    2.   Institute an action of mandamus or other proceeding to
                         enforce its rights under the Reimbursement Agreement;


                                      A-16
<PAGE>


                    3.   Require the Authority to account for funds as if it
                         were the trustee of an express trust for the benefit of
                         the Credit Enhancement Provider;

                    4.   Institute an injunction action;

                    5.   Declare all obligations of the Authority under the
                         Reimbursement Agreement to be immediately due and
                         payable; and

                    6.   Select whatever other action at law or equity is
                         necessary to enforce its rights under the Reimbursement
                         Agreement or any related document.

     To the extent permitted by law, the Authority has also agreed to indemnify
and hold harmless the Credit Enhancement Provider from and against certain
claims, damages, losses, liabilities and reasonable costs and expenses by reason
of, or in connection with, the execution and delivery of or payment or failure
to pay under the Credit Enhancement and the issuance and sale of the Bonds,
except for the willful misconduct or gross negligence of the Credit Enhancement
Provider.



                                      A-17

<PAGE>

                                THE DEED OF TRUST

     The following summary of certain provisions of the Deed of Trust does not
purport to be complete and is subject in all respects to the provisions of, and
is qualified in its entirety by, reference to the Deed of Trust, copies of which
are available from the Trustee.

     The Authority shall deliver the Deed of Trust for the purpose of securing
(i) repayment of the indebtedness evidenced by the Bonds, the Note (as defined
therein) and the Credit Enhancement Note (as defined therein) (collectively, the
"Indebtedness"); (ii) the payment of all other sums, with interest thereon,
advanced in accordance with the Deed of Trust; (iii) the performance of the
covenants and agreements of the Authority contained in the Deed of Trust, the
Note, the Credit Enhancement Note, the Reimbursement Agreement and the Indenture
(collectively, the "Secured Obligations"); and (iv) the repayment of any future
disbursements, with interest thereon, made to the Authority by the Trustee or
the Credit Enhancement Provider.  The Deed of Trust irrevocably grants and
conveys to the Public Trustee of Douglas County, Colorado, in trust, with power
of sale, the interests of the Authority in the Property, together with all
buildings and improvements, and fixtures or appurtenances, now and hereafter
erected thereon, construction material, supplies and equipment intended to be
incorporated and installed therein or used in construction thereon; all building
permits, construction contracts, claims and warranties under construction
contracts, tap fees, architectural plans and specifications relating to
construction of improvements on the Real Estate and trademarks and logos
relating to marketing the Property and any and all rents and leases (subject to
the rights to collect and apply such rents), profits, royalties, claims to
water, water rights, minerals, geothermal resources, oil and gas rights and
profits, easements and access rights, less any of said property which may be
released from the Deed of Trust (together, the "Pledged Property").

COVENANTS OF THE AUTHORITY

     The Authority covenants and agrees in the Deed of Trust to promptly pay the
Trustee and the Credit Enhancement Provider (collectively, the "Beneficiary")
all principal and interest and all other sums of money payable by virtue of the
Bonds, the Note, the Credit Enhancement Note, the Reimbursement Agreement, the
Indenture and the Deed of Trust, which the Trustee or the Credit Enhancement
Provider is entitled to receive, and to perform each and every covenant and
agreement in the Bonds, the Credit Enhancement Note, the Reimbursement
Agreement, the Deed of Trust, the Indenture, the Note or any other documents
relating to the loan represented by the Bonds or the Note.

     The Authority covenants and agrees in the Deed of Trust to do all things
necessary to preserve and keep in full force and effect its existence under the
laws of the State of Colorado and to comply with all regulations, rules,
ordinances, statutes, orders and decrees of any governmental authority or court
applicable to the Authority or to the Pledged Property or any part thereof.

     The Authority agrees to pay all taxes, assessments and other charges, fines
and impositions attributable to the Pledged Property as well as leasehold
payments or ground rents, if any, when due and payable, before they become
delinquent and before any interest attaches or any penalty is incurred.  If any
tax, assessment or other charge, fine or imposition becomes of record, the
Authority agrees that such shall be satisfied and discharged of record within
thirty days of becoming of record, and a certified copy of the official document
evidencing such satisfaction and discharge shall be sent to the Beneficiary
within ten days after such discharge.  However, the Authority shall not be
required to discharge any lien if (a) the Authority shall, in good faith,
contest such lien by, or defend enforcement of such lien in, legal proceedings
which operate to prevent the enforcement of the lien or forfeiture of the
Pledged Property or any part thereof and (b) the Authority shall give the
Beneficiary notice of such contest and the Beneficiary is provided with an
opinion of competent counsel that the failure to discharge the lien will not
have a materially detrimental effect on the security provided by the Deed of
Trust.

     The Authority agrees to procure and maintain, or cause to be procured and
maintained, continuously in effect until the Bonds are paid in full, insurance
as provided for in the Indenture.  The Authority covenants to maintain the
Pledged Property in good repair as provided in the Indenture.


                                      A-18

<PAGE>

      If the Authority fails to perform the covenants and agreements contained
in the Deed of Trust, or if any action or proceeding is commenced which
materially affects, or may materially affect, the Beneficiary's respective
interests in the Project, then the Beneficiary, at the Beneficiary's option, may
make such appearances, disburse such sums and take such actions as the
Beneficiary determines are necessary to protect its respective interest and the
interest of the holders of the Bonds, including, but not limited to,
disbursement for reasonable attorney's fees and entry upon the Project to make
repairs.  Any amounts disbursed pursuant to this paragraph, together with
interest thereon, shall become additional indebtedness of the Authority, secured
by the Deed of Trust.  Unless the Authority and the Beneficiary agree in writing
to other terms of payment, such amounts shall be payable upon notice to the
Authority requesting payment thereof.  Nothing contained in this paragraph shall
require the Beneficiary to incur any expense or take any action.  The
Beneficiary, on making good and performing following any default or defaults on
the part of the Authority, shall be thereby subrogated to any and all rights of
the person or persons to whom payment is made by the Beneficiary.  The rights of
the Beneficiary shall be exercised by the Credit Enhancement Provider so long as
the Credit Enhancement Provider is not in default of its obligations under the
Credit Enhancement.

EVENTS OF DEFAULT; ACCELERATION; POWER OF SALE; UCC REMEDIES

          The following shall constitute "Events of Default" under the Deed of
Trust:

               (a)  A default or breach of the terms, conditions and provisions
of the Deed of Trust (other than as provided in (b), (c) or (d) below) for a
period of 60 days after written notice, specifying such default and requesting
that it be remedied, is given to the Authority by the Beneficiary, unless the
Beneficiary shall agree in writing to an extension of such time period prior to
its expiration, or such longer period as may be reasonably necessary to remedy
such default, provided that the Authority is proceeding with reasonable
diligence to remedy the same;

               (b)  An Event of Default as such term is defined in the Indenture
shall occur and be continuing;

               (c)  Any Indebtedness is not promptly and fully paid when due and
such default continues for 10 days (except that no default under the Deed of
Trust shall occur on the failure to make any payment under the Note or the
Indenture where such failure is not an Event of Default under the Indenture); or

               (d)      If the Authority shall:

                         (i)   admit in writing its inability to pay its
               debts generally as they become due; or

                         (ii)  file a petition in bankruptcy to be
               adjudicated a voluntary bankrupt or file a similar petition
               under any insolvency act, or approve or consent to any such
               petition filed against it; or

                         (iii) make an assignment for the benefit of its
               creditors; or

                         (iv)  consent to the appointment of a receiver of
               itself or of the whole or any substantial part of its property;
               or

                         (v)   on a petition in bankruptcy filed against it, be
               adjudicated bankrupt or if a court of competent jurisdiction
               shall enter an order or decree appointing a receiver or trustee
               of the Authority or of the whole or substantially all of its
               property, and such adjudication, order or decree shall not be
               vacated or set aside or stayed within 90 days from the date
               of the entry thereof.

     Following an Event of Default, the Beneficiary may declare all of the sums
secured by the Deed of Trust to be immediately due and payable and may invoke
the power of sale and any other remedies permitted by applicable law.  The
Beneficiary shall be entitled to collect all reasonable costs and expenses
incurred in pursuing any remedies, including, but not limited to, reasonable
attorney's fees.

     Following an Event of Default, the Beneficiary may exercise any rights and
remedies of a secured party under the Colorado Uniform Commercial Code or other
applicable laws and require the Authority to assemble


                                      A-19
<PAGE>

any collateral covered by the Deed of Trust and constituting personal property
at a place to be designated by the Beneficiary which is reasonably convenient to
both parties.

     Notwithstanding the foregoing, foreclosure of the Deed of Trust shall not
be permitted unless the Beneficiary shall have received an opinion of Special
Tax Counsel that such foreclosure shall not adversely affect the exclusion of
interest on the Bonds from gross income for federal income tax purposes, and the
Credit Enhancement Provider shall not be entitled to foreclose on the Deed of
Trust or accelerate the Indebtedness secured thereby following the occurrence
and continuance of a default by the Credit Enhancement Provider under the Credit
Enhancement.

ASSIGNMENT OF RENTS; APPOINTMENT OF RECEIVER

     As additional security under the Deed of Trust, the Authority assigns to
the Beneficiary the rents, issues and profits of the Project, provided that
until a default under the Deed of Trust occurs, the Authority shall have the
right to collect and retain such rents, issues and profits as they become due
and payable, except to the extent otherwise provided in the Indenture.  In the
event of default under the Deed of Trust, the Beneficiary shall be entitled to
enter upon, take possession of and manage the Project and to collect the rents,
issues and profits of the Project, including those past due.  All rents
collected by the Beneficiary shall be applied first to payment of the costs of
management of the Project and collection of rents and then to the sums secured
by the Deed of Trust.

     In the Event of Default under the Deed of Trust, the Beneficiary may apply
for and obtain, either in its own name, or through the Trustee, EX PARTE and
without notice (notice being expressly waived), the appointment of a receiver
for the Pledged Property and for the rents, issues and profits therefrom and may
have such receiver appointed as a matter of right without regard to the solvency
of the Authority or any other person or corporation, or the adequacy of any
security or the existence of waste.  The Beneficiary may have sums received by
such receiver, after deduction and payment of the costs and expenses of the
receivership, including the Beneficiary's attorney's fees, applied to the sums
secured by the Deed of Trust in such manner and order as specified by the
Beneficiary; provided that following the occurrence and continuance of a default
by the Credit Enhancement Provider under the Credit Enhancement, such amounts
shall be applied as provided in the Indenture.

NONRECOURSE

     Notwithstanding any other agreement or instrument relating to the Bonds,
the Note or the Project, neither the Authority, its officers or directors,
employees and agents, nor its or their heirs, successors or assigns, shall have
any liability for payment or performance of the covenants or obligations set
forth in the Indenture, in the Reimbursement Agreement or in any other agreement
or instrument securing the indebtedness and obligations created or secured under
the Deed of Trust, except from Revenues described and pledged under the
Indenture, Pledged Property, other money derived from the foreclosure of the
Project, and moneys in the Funds created under the Indenture, and the
Beneficiary and the Bondholders may not then assert or claim a deficiency or
other personal money judgment against the Authority, its officers or directors,
employees and agents of the Authority, or its or their heirs, successors or
assigns, but rather agree to look absolutely, strictly and solely to the Project
(including any proceeds from any foreclosure thereof), the Revenues and the
moneys in the Funds under the Indenture, for payment of the principal of and
interest on all indebtedness and obligations secured by the Deed of Trust and to
any other of the Authority's property, rights, accounts, general intangibles,
leases, rents, issues, profits, income, insurance premiums, awards, payments and
consideration conveyed, mortgaged, assigned or pledged under the Deed of Trust
or under any other instrument which secures the indebtedness secured by the Deed
of Trust or in which a security interest has been granted to or for the benefit
of the Beneficiary to secure the Bonds or the Note.  The foregoing shall not be
deemed or construed to be a release of the indebtedness secured by the Deed of
Trust or in any way to impair, limit or otherwise affect the lien of the
Indenture or of the Deed of Trust or of any such other instrument on the
property, funds or rights covered thereby as security for the payment of the
indebtedness secured by the Deed of Trust and for the performance of the
covenants in the Indenture or in the Deed of Trust, or prevent the Beneficiary
from naming the Authority as a defendant in any action to enforce any remedy for
a default, so long as no monetary judgment or other judgment is sought or
entered therein against the Authority, its officers or directors, employees and
agents, or its heirs, successors or assigns, or against any property of the
Authority other than the Revenues, the Trust Estate described in the Indenture
and all other property described in the foregoing sentence.  Notwithstanding the
foregoing, it is expressly understood and agreed that the aforesaid limitation
on liability shall in no way affect or apply to the Authority's continued
liability for the payment to the Beneficiary arising while the Project is owned
by the


                                      A-20

<PAGE>

Authority of (a) any rents, issues, profits and income actually collected by the
Authority from the Project after an Event of Default not applied to the
operation of the Project; (b) security deposits made by tenants of the Project;
or (c) insurance proceeds and condemnation awards, payments and consideration
which the Authority actually receives and to which the Beneficiary is entitled
pursuant to the Deed of Trust or the Indenture.  It is further expressly
understood and agreed that the aforesaid limitation on liability shall in no way
affect or apply to the Authority's continued liability throughout and after its
ownership of the Project to the Beneficiary for payment, indemnification, and
reimbursement of all obligations and liabilities, whether legal or equitable,
arising under any federal, state, or local environmental law, statute,
regulation, ordinance, order, by-law, code, requirement, or directive or under
common law regarding the presence, generation, use, management, transport,
treatment, release, discharge, emission or disposal of any Hazardous Substances
to, at or from the Project, to the extent caused by the Authority, all as
further set forth in the Indenture.

RELEASE

     Upon payment of all sums secured by the Deed of Trust and upon full
performance thereof by the Authority, the Beneficiary shall promptly, after
written notice from the Authority, execute and deliver to the Authority a
request for the release of the Deed of Trust directed to the Beneficiary.  The
Authority shall, however, pay all costs and expenses in connection with the
recordation and execution of said release.  In addition, property subject to the
Deed of Trust may be released from the Deed of Trust upon the mutual agreement
of the Borrower and the Beneficiary or as provided in the Indenture.


                                      A-21




<PAGE>
 

                               THE OPERATING AGREEMENT

     The following summary of certain provisions of the Operating Agreement does
not purport to be complete and is subject in all respects to the provisions of,
and is qualified in its entirety by, reference to the Operating Agreement,
copies of which are available from the Trustee.

     The Authority will be the owner of the Project and the District will have
no fee title thereto until such time as a deed to all or any portion of the
Property and the Project is delivered to the District.
The Authority will be responsible for the acquisition, construction and
completion of the Project.

PROJECT CONTRACTS

     The Authority has executed or shall execute, or has awarded or shall award,
all contracts and purchase orders needed to complete the Project.

TERM

     The Operating Agreement term shall commence as of the date that either (i)
the Town of Castle Rock, Colorado shall have approved an amendment to the
service plan of the District specifically authorizing the mill levy imposition
described below under "Operating Agreement Payments", or (ii) the District shall
have received an opinion acceptable to the District of counsel acceptable to the
District that such mill levy may be imposed without regard to any service plan
amendment.  Each of the Districts has covenanted in the Recreational Facilities
Agreement to take all reasonable action necessary to effect such service plan
amendment or to obtain such opinion.  The Operating Agreement shall terminate on
payment of all obligations secured by the Deed of Trust.

OPERATING AGREEMENT PAYMENTS

         (a)  The District covenants to pay to the Authority, its successors
    and assigns, the following Operating Agreement Payments: (i) all Operations
    and Maintenance Expenses to the extent not paid from Revenue, and (ii) any
    deficiencies of Revenue required to pay obligations secured by the Deed of
    Trust, subject to the limitations in (c) below.

         (b)  Overdue Operating Agreement Payments shall continue as an
    obligation of the District until the amount in default has been fully paid
    and shall bear interest at the rate of 15% per annum.

         (c)  The provisions of (a) and (b) above are limited to amounts (i)
    collected from a mill levy against taxable real and personal property
    within the District not to exceed 35 mills, and subject to other
    limitations specified in the questions voted upon by the election of the
    District on November 7, 1995; and (ii) amounts collected by the District
    from the Related Districts pursuant to the Intergovernmental Agreement.
    See "THE INTERGOVERNMENTAL AGREEMENT - Payments and Nature of Obligations"
    in this Appendix A. In the event amounts collected from such sources shall
    be insufficient in any year, the amount of such deficiency shall
    nevertheless be a continuing obligation of the District payable from such
    sources in subsequent years.  The District agrees to include in its annual
    certification to the Board of County Commissioners of Douglas County,
    Colorado, a mill levy sufficient, when combined with other revenues
    reasonably anticipated to be available, to satisfy its obligations under
    the Operating Agreement.

         (d)  Notwithstanding the foregoing, the District will be under no
    obligation to pay Operating Agreement Payments unless and until the date
    that either (i) the Town of Castle Rock, Colorado shall have approved an
    amendment to the service plan of the District specifically authorizing the
    mill levy imposition described in (c) above, or (ii) the District shall
    have received an opinion acceptable to the District of counsel acceptable
    to the District that such mill levy may be imposed without regard to any
    service plan amendment.  Each of the Districts has covenanted in the
    Recreational Facilities Agreement to take all reasonable action necessary
    to effect such service plan amendment or to obtain such opinion.

TITLE

     During the term of the Operating Agreement, the Authority shall hold title
to and ownership of each of the Project facilities and any and all additions
thereto which comprise repairs, replacements, modifications,

                                         A-22
<PAGE>

improvements and substitutions until such Project facility is transferred to the
District.  The District agrees that any damage to the Project that would
materially impact the operation of the Project and that is occasioned by the
removal of fixtures and improvements shall be promptly repaired.
Notwithstanding anything to the contrary in the Operating Agreement, it is
understood that title to personal property permanently attached to the Project
by the District or any other entity, instrumentality, authority or department of
the District shall become a part of the Project.

MAINTENANCE, UTILITIES AND TAXES

     The Authority and the District each agree that during the term of the
Operating Agreement it will itself at its own expense or will cause others to
(a) keep the Project facilities which it owns in as reasonably safe condition as
its operations will reasonably permit, and (b) keep the Project facilities which
it owns in good repair and in good operating condition, making from time to time
all necessary repairs thereto and renewals and replacements thereof, which may
be necessary for this purpose, so that the Project facilities which it owns will
remain suitable and efficient for use of the character described in and
contemplated by the Indenture.

     Throughout the term of the Operating Agreement all improvement, repair and
maintenance of the Project facilities shall be the responsibility of the party
owning such facilities, and such party shall pay for or otherwise arrange for
the payment of all utility services supplied to such facilities, which may
include (without limitation) cleaning services, maintenance, security, power and
electricity, gas, telecommunications and radio equipment and all utilities and
services supplied to or in connection with the Project, and shall pay for or
otherwise arrange for the payment of the cost of the repair and replacement of
such facilities or any part thereof resulting from ordinary wear and tear.

     Each party shall also pay or cause to be paid, without abatement, deduction
or offset, all property taxes and general and special assessments (collectively,
"property taxes") of any type or nature levied, assessed or charged by an
authorized governmental authority to and against the Project facilities which it
owns, the improvements thereto from time to time and the respective interests or
estates therein; provided that with respect to special assessments or other
governmental charges that may lawfully be paid in installments over a period of
years, each party shall be obligated to pay only such installments as are
required to be paid during the term of the Operating Agreement as and when the
same become due.

     The foregoing provisions are not a limitation on the obligations of the
District to pay Operating Agreement Payments to the Authority.

     Each party may, at its expense and in its name, in good faith contest any
such taxes, assessments, utility and other charges and, in the event of any such
contest, may permit the taxes, assessments or other charges so contested to
remain unpaid during the period of such contest and any appeal therefrom unless,
by nonpayment of any such items, the Project or any part thereof will be subject
to loss or forfeiture, in which event the responsible party shall promptly pay
such taxes, assessments or charges or provide full security against any loss
which may result from nonpayment, in form satisfactory to the Credit Enhancement
Provider and the Trustee.

     Any payments by the Authority of the foregoing amounts with respect to
Recreational Facilities shall be considered Operating Agreement Payments due
from the District under the Operating Agreement.

DAMAGE, DESTRUCTION AND CONDEMNATION

     Unless the District shall have exercised its option to terminate the
Operating Agreement (see "Option to Terminate" below), if prior to full payment
of the Bonds (or provisions for payment thereof having been made in accordance
with the provisions of the Indenture) (i) the Project or any portion thereof is
damaged or destroyed (in whole or in part) by fire or other casualty or (ii)
title to, or the temporary use of, the Project or any part thereof shall be
taken under the exercise of the power of eminent domain by any governmental body
or by any person, firm or corporation acting under governmental authority, the
District shall be obligated to continue to pay all Operating Agreement Payments
with no abatement or reduction in such amounts whatsoever.

     The proceeds of any award resulting from any damage to or destruction or
condemnation of the Project shall be deposited with the Trustee, as described
and provided for in the Indenture.  See "THE INDENTURE."

     The amount of Operating Agreement Payments for the Project shall not be
abated or diminished during any period in which by reason of damage or
destruction there is substantial interference with the use by the

                                        A-23
<PAGE>

District of the Project, or any portion thereof or for any other reason
whatsoever; provided, however, that if any insurance proceeds shall be deposited
with the Trustee under the Indenture, they shall be treated as Revenues and
credited against Operating Agreement Payments due and payable under the
Operating Agreement to the extent applied to the payment of principal of or
interest on the Bonds or to reimburse the Credit Enhancement Provider with
respect to amounts paid under the Credit Enhancement and so applied.  In the
event of any such damage or destruction, the Operating Agreement shall
nonetheless continue in full force and effect and the District waives any right
to terminate the Operating Agreement by virtue of any such damage and
destruction.

ASSIGNMENT

     The Authority's rights under the Operating Agreement (except for certain of
the Authority's indemnification rights and rights to attorney's fees and
expenses), including the right to receive and enforce payment of the Operating
Agreement Payments to be made by the District under the Operating Agreement, may
be assigned by the Authority to the Trustee or the Credit Enhancement Provider
without the consent of the District.

     The Operating Agreement may be assigned as a whole or in part, by the
District with the written consent of the Authority, the Credit Enhancement
Provider and the Trustee (which consents shall not be unreasonably withheld),
subject, however, to each of the following conditions:

         (a)  No assignment shall relieve the District from primary liability
    for any obligations under the Operating Agreement, and in the event of any
    such assignment the District shall continue to remain primarily liable for
    payment of the amounts specified in the Operating Agreement and for
    performance and observance of each of the other agreements to be performed
    and observed by the District to the same extent as though no assignment had
    been made.

         (b)  In the case of an assignment, the assignee shall assume the
    obligations of the District under the Operating Agreement to the extent of
    the interest assigned.

         (c)  The District shall, within 30 days after the delivery thereof,
    furnish or cause to be furnished to the Authority and the Trustee a true
    and complete copy of each such assumption or assignment as the case may be.

         (d)  No such assignment by the District shall cause the Project to be
    used for a purpose other than as may be authorized under applicable law and
    under the Indenture and the Reimbursement Agreement.

AMENDMENT OF OPERATING AGREEMENT

     The Operating Agreement may not be effectively changed, amended or modified
except with the written consent of the Trustee and the Credit Enhancement
Provider.

EVENTS OF  DEFAULT

     Each of the following shall be and constitute an "Event of Default" by the
District and a breach of the Operating Agreement:

         (a)  Failure by the District to pay any Operating Agreement Payment
when due and payable, and the continuation of any such failure for a period of 3
Business Days after any such payment is due, unless such failure occurs as the
result of the application of clause (c) above under the subheading "Operating
Agreement Payments";

         (b)  Failure by the District to pay when due any other amounts 
required to be paid by the District under the Operating Agreement, unless 
such failure occurs as the result of the application of clauses (c) and (d) 
above under "Operating Agreement Payments", or to observe and perform any 
covenant, condition, agreement or provision (other than as specified in 
paragraph (a) above or this paragraph (b)) contained in the Operating 
Agreement or in documents executed in connection therewith on the part of the 
District to be observed or performed, which failure shall continue for a 
period of 30 days after written notice thereof, specifying such failure and 
requesting that it be remedied, shall have been given to the District by the 
Authority,

                                         A-24
<PAGE>

the Trustee or the Credit Enhancement Provider by first class mail or hand
delivery, any of which may give such notice in their discretion, unless the
Person giving such notice shall agree in writing to an extension of such thirty
day period prior to expiration; provided, however, that the Authority, the
Trustee and the Credit Enhancement Provider, as the case may be, shall be deemed
to have agreed to an extension of such period if corrective action is initiated
by the District within such period, is being diligently pursued, and can be
continued and completed in such manner as to not adversely affect the rights of
the Owners of the Bonds, the Credit Enhancement Provider or the normal
operations of the Project or the use thereof for the purposes for which such
operations are and were originally intended;

         (c)  The District shall (i) apply for or consent to the appointment of
or taking of possession by a receiver, trustee, custodian, liquidator or other
similar official of itself or of all or a substantial part of its properties or
assets, (ii) admit in writing its inability to pay its debts as they become due
or generally become unable to pay its debts as they become due, (iii) make a
general assignment for the benefit of creditors, or (iv) commence a voluntary
case as debtor under the federal bankruptcy laws (whether under any Title of the
United States Code or otherwise under any federal law) as now or hereafter
constituted or file a petition seeking to take advantage of any other law
relating to bankruptcy, reorganization, insolvency, winding up, or composition
or adjustment of debts, or acquiesce in writing to, or fail to controvert in a
timely manner, a petition filed against it in any involuntary case under such
federal bankruptcy laws, as the case may be, or any action shall be taken by it
for the purpose of effecting any of the foregoing;

         (d)  A case or proceeding shall be commenced, without the application
or consent of the District in any court of competent jurisdiction, seeking the
liquidation, reorganization, dissolution, winding up, or composition or
readjustment of debts, of the District, or the appointment of a receiver,
trustee, custodian, liquidator or any similar official of the District or of all
or a substantial part of the assets of the District, or similar relief with
respect to the District under any federal laws relating to bankruptcy (including
under any Title of the United States Code or otherwise under any federal law),
insolvency, liquidation, reorganization, winding up, or composition or
adjustment of debts, shall be commenced against the District and such case or
proceeding shall continue undismissed or unstayed and in effect for any period
of 60 consecutive days, or an order for relief against the District shall be
entered in an involuntary case under such federal or other bankruptcy laws;

         (e)  If (i) the District is adjudged insolvent by a court of competent
jurisdiction, or (ii) an order, judgment or decree is entered by any court of
competent jurisdiction appointing, without the consent of the District, a
receiver, trustee or custodian of the District or of the whole or any part of
its property and any of the aforesaid adjudications, orders, judgments or
decrees shall not be vacated or set aside or stayed within 60 days from the date
of entry thereof;

         (f)  If, under the provisions of any other law for the relief or aid
of debtors, any court of competent jurisdiction shall assume custody or control
of the District or of the whole or any substantial part of the property of the
District and such custody or control shall not be terminated within 60 days from
the date of assumption of such custody or control; or

         (g)  Any warranty, representation or other statement of the District
contained in the Operating Agreement or in any instrument furnished in
compliance with or in reference to the Operating Agreement shall prove to have
been false or misleading in any material respect on the date as of which it was
made.

     In case the Authority (or the Credit Enhancement Provider, as the assignee
of the Authority) shall have proceeded to enforce any right under the Operating
Agreement and such proceedings shall have been discontinued or abandoned for any
reason or shall have been determined adversely to the Authority or the Trustee,
then and in every such case the District, the Authority, the Trustee and the
Credit Enhancement Provider shall be restored to their respective positions and
rights thereunder, and all rights, remedies and powers of the District, the
Authority, the Trustee and the Credit Enhancement Provider shall continue as
though no such proceeding had been taken, but subject to the limitations of any
such adverse determination.

REMEDIES

     Whenever any Event of Default referred to above shall have happened and be
continuing the Authority, the Trustee and the Credit Enhancement Provider shall
have the right (a) to inspect, examine and make copies of the books and records
and any and all accounts, data and income tax and other tax returns of the
District

                                         A-25
<PAGE>

during regular business hours of the District if reasonably necessary in the
opinion of the Trustee, the Credit Enhancement Provider, or the Authority, and
(b) to take whatever action at law or in equity may appear necessary or
desirable to collect the amounts then due and thereafter to become due, or to
enforce performance and observance of any obligation, agreement or covenant of
the District under the Operating Agreement.

     In case the District shall fail forthwith to pay such amounts upon such
demand, the Credit Enhancement Provider shall be entitled, following payment of
the Bonds or provision therefor, as provided in the Indenture, to liquidate and
sell investments held by the Credit Enhancement Provider or the Trustee in any
account within the Bond Fund and apply the proceeds thereof to payment of such
amounts and the Credit Enhancement Provider shall further be entitled and
empowered to otherwise institute any actions or proceedings at law or in equity
for the collection of the sums so due and unpaid, and may prosecute any such
action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the District and collect in the manner provided
by law out of the property of the District the moneys adjudged or decreed to be
payable.

     Any amounts collected pursuant to action taken under the above provisions
shall be applied in accordance with the provisions of the Indenture and the
Reimbursement Agreement.

     The foregoing provisions are subject to the limitation that, except for the
rights specified in clause (a) of the third preceding paragraph, the Trustee
shall be entitled to exercise its rights under the Operating Agreement only if
the Credit Enhancement Provider has failed to provide payments to the Trustee
pursuant to the Credit Enhancement, or if the Trustee's failure to exercise such
rights could be anticipated to materially adversely effect the holders of the
Bonds.

RIGHT TO ACQUIRE PROJECT

     The District is granted the right to obtain, at any time, unencumbered fee
title and exclusive possession of property (including the Project) financed by
obligations of the Authority (including the Bonds and obligations arising under
the Reimbursement Agreement), and any additions to such property, by (1) placing
into escrow an amount that will be sufficient to defease such obligations, and
(2) paying reasonable costs incident to the defeasance, in the manner provided
in the Operating Agreement and the Indenture.  The District, at any time before
it defeases such obligations, shall not agree or otherwise be obligated to
convey any interest in such property to any person (including the United States
of America or its agencies or instrumentalities) for any period extending beyond
or beginning after the District defeases such obligations.  In addition, the
District shall not agree or otherwise be obligated to convey a fee interest in
such property to any person who was a user thereof (or a related person) before
the defeasance within 90 days after the District defeases such obligations.

DEFAULT RIGHTS

     In addition to the foregoing, if the Authority defaults in its payments
under obligations described in the Indenture, the District is granted an
exclusive option to purchase the property financed thereby (including the
Project) for the amount of the outstanding indebtedness of the Authority and
accrued interest to the date of default.  The District shall have (a) not less
than 90 days from the date it is notified by the Authority of the default in
which to exercise the option, and (b) not less than 90 days from the date it
exercises the option to purchase the property.

INDENTURE RIGHTS

     The Authority covenants that it will take no action to amend or supplement
the Indenture in any manner which would materially affect the obligations of the
District under the Operating Agreement without obtaining the prior written
consent of the District to such amendment or supplement.

OPTION TO TERMINATE

              The District shall have the following options to terminate the
              Operating Agreement:


                        (i)  At any time prior to full payment of the Bonds,
              the District may make provision for payment of the Bonds in
              accordance with the provisions of the Indenture (see "THE
              INDENTURE"), and the District may terminate the Operating
              Agreement, regardless of whether the Bonds are then subject to
              optional redemption, (A) by paying to Trustee an amount which,
              when added to all amounts then on deposit in the Bond Fund, will
              be sufficient to pay,

                                         A-26
<PAGE>

              retire and redeem all the Outstanding Bonds in accordance with
              the provisions of the Indenture (including, without limiting the
              generality of the foregoing, principal of the Outstanding Bonds
              and interest to maturity or earliest applicable redemption date,
              as the case may be, and premium, if any, expenses of redemption
              and all fees and expenses of the Trustee and the District) and,
              in case of redemption, by giving notice and making arrangements
              satisfactory to the Trustee for the giving of the required notice
              of redemption under the Indenture, (B) by giving the Authority,
              the Trustee and the Credit Enhancement Provider notice in writing
              of such termination, and (C) by paying all amounts unpaid under
              the Reimbursement Agreement and the Deed of Trust, and such
              termination shall forthwith become effective.

                        (ii) After full payment of the Bonds (or provision for
              payment thereof having been made in accordance with the
              provisions of the Indenture), and after payment of all amounts
              arising under the Reimbursement Agreement and the Deed of Trust,
              the District may terminate the Operating Agreement by giving the
              Authority, the Trustee and the Credit Enhancement Provider notice
              in writing of such termination and such termination shall
              forthwith become effective.

     The prepayment amount payable by the District in the event of any
prepayment to be made pursuant to paragraphs (i) or (ii) above shall be the sum
of the following:

                   (1)  An amount of money which, when added to amounts then on
              deposit in the Bond Fund, will be sufficient to retire and redeem
              all the then Outstanding Bonds in the manner required by the
              Indenture and on the earliest possible date after notice of
              redemption is given as provided in the Indenture, whether or not
              such date is an Interest Payment Date, including, without
              limitation, the principal amount thereof, all interest to accrue
              to said redemption date, the applicable redemption premium and
              expenses, if any, plus

                   (2)  An amount of money equal to the administrative fees and
              expenses of the Trustee and the Authority accrued and to accrue
              until such final payment and redemption or purchase of the Bonds,
              plus

                   (3)  An amount equal to all amounts then accrued and to
              accrue until such final payment and redemption or purchase of the
              Bonds, plus

                   (4)  An amount of money equal to all sums then due the
              Authority under the Operating Agreement, plus

                   (5)  To the extent not included in the foregoing, an amount
              sufficient to pay all obligations under the Reimbursement
              Agreement and the Indenture.

     The District shall have the extraordinary option to terminate the Operating
Agreement and prepay the amounts sufficient to provide for the full payment of
the Bonds (or to make provision for such payment in accordance with the
provisions of the Indenture) and all amounts due under the Reimbursement
Agreement and the Deed of Trust, upon damage, destruction or condemnation of the
Project.


                                         A-27

<PAGE>

                           TIHE INTERGOVERNMENTAL AGREEMENT

     The following summary of certain provisions of the Intergovernmental
Agreement does not purport to be complete and is subject in all respects to the
provisions of, and is qualified in its entirety by, reference to the
Intergovernmental Agreement, copies of which are available from the Trustee.

GENERAL INTENT

     It is the purpose and intent of the Districts to coordinate and assist in
the financing of the acquisition of the Property, and to coordinate all related
activities and to affirmatively cooperate with each other in order to best
accomplish the goals stated in the Intergovernmental Agreement.

TERM

     The Intergovernmental Agreement shall not be effective as to any District
until either (A) the Town of Castle Rock, Colorado, has approved the amendment
to the service plan of such District specifically authorizing the imposition of
the mill levy described below under "Limitation on Obligations" by such District
or (B) such District shall have received an opinion acceptable to the District
of counsel acceptable to the District that such mill levy may be imposed without
regard to any service plan amendment.  Each of the Districts has covenanted in
the Recreational Facilities Agreement to take all reasonable action necessary to
effect such service plan amendment or to obtain such opinion.  Once effective as
to any District, the Intergovernmental Agreement shall continue in effect as to
such District until all of the Operating Agreement Payments have been satisfied;
provided that if such Operating Agreement Payments shall be satisfied pursuant
to a refinancing of the Bonds or the refinancing or discharge of the obligations
under the Reimbursement Agreement, the obligation of the Authority with respect
to any such refinancing or discharge shall be considered Operating Agreement
Payments for purposes of the Intergovernmental Agreement.

ASSESSMENT OF FEES AND CHARGES

     Each District shall, subject to limitations of any other agreement
theretofore or thereafter executed by such District, be free to assess
facilities development fees, service charge surcharges, and other fees, rates,
tolls, charges, and taxes in amounts determined to be required by each such
District in order to meet its Financing Obligations under the Intergovernmental
Agreement.

PAYMENTS

     Each Related District promises to pay to the District all of its Expense
Obligations and Revenue Obligations in accordance with the terms of the
Intergovernmental Agreement.  With respect to any particular District, the
Revenue Obligation of such District evidenced thereby shall be general
obligation indebtedness to which such District pledges its full faith and
credit, subject to the provisions described in "Limitation on Obligations"
below, and shall be incurred and exist from and after the effective date of the
Intergovernmental Agreement.  Notwithstanding anything contained in the
Intergovernmental Agreement to the contrary, in compliance with the limitations
imposed by the November 7, 1995 resolutions adopted by the voters of the
Districts, the maximum principal amount of the general obligation represented by
the Intergovernmental Agreement shall not exceed $100,000,000 in principal
amount or $500,000,000 in maximum debt service, subject to the limitations
described below under "Limitations on Obligations".  The Revenue Obligations and
indebtedness incurred shall be payable only in accordance with the terms of the
Intergovernmental Agreement.  Interest shall be paid by each District on the
principal amount of its Revenue Obligation, which interest shall also be a
Revenue Obligation.  The maximum net effective interest rate accruing on any
particular District's indebtedness shall be 45%.

NATURE OF OBLIGATIONS

     It is recognized by the Districts that the Revenue Obligations imposed upon
the Districts under the Intergovernmental Agreement constitute "indebtedness"
within the meaning of the Constitution of the State of Colorado.  At duly called
and noticed elections held for each District on November 7, 1995, the electorate
of each District authorized the incurrence of indebtedness by each District of
an amount sufficient to fund the various Revenue Obligations expressed in the
Intergovernmental Agreement, and also approved execution of the
Intergovernmental Agreement by each District.  In addition, it is recognized by
the District that the Expense Obligations constitute a multiple fiscal year
obligation as to which each District is obligated to increase taxes in


                                         A-28
<PAGE>

an amount not to exceed $1,500,000 annually, in compliance with the limitations
imposed by the November 7, 1995 resolutions adopted by the voters of the
Districts.  In no event shall any commitment, covenant, promise or other
obligation under the Intergovernmental Agreement require the issuance or
incurrence of the indebtedness by the Districts in excess of their respective
voted indebtedness authorization.

PROPORTIONATE SHARE OF REVENUE OBLIGATIONS

     The Proportionate Share of the total Revenue Obligations for each District
shall be determined by the District in the preparation of an annual budget for
each year.  The "Proportionate Share" for each District shall be the ratio of
the estimated assessed value of all taxable real and personal property in such
District to the total assessed value of all taxable real and personal property
in all of the Districts.

LIMITATION ON OBLIGATIONS

     Notwithstanding any provision of the Intergovernmental Agreement to the
contrary, the obligation of a District to pay any or all amounts thereunder in
any year shall be limited to amounts collected under a maximum mill levy
imposition of 35 mills.  Any Proportionate Share in excess of the amounts
collected pursuant to such mill levy limit shall continue to be due from such
District, and shall bear interest at the rate of 15% per annum, subject to the
provisions described above under "Payments" and "Nature of Obligations", until
the end of the term of the Intergovernmental Agreement, and shall thereupon be
forgiven.  In the event the method for determining assessed value or mill levies
for the State of Colorado is hereafter amended, the District shall provide a
statement of revised procedures to each of the Related Districts so the amounts
collected under such revised method shall equal as closely as reasonably
possible the amounts which would have been collected absent such revision.  In
addition, no District shall have any obligation to pay its Proportionate Share
until either (A) the Town of Castle Rock, Colorado, has approved the amendment
to the service plan of such District specifically authorizing the imposition of
such mill levy, or (B) such District shall have received an opinion acceptable
to such District of counsel acceptable to such District that such mill levy may
be imposed without regard to any service plan amendment.  Each of the Districts
has covenanted in the Recreational Facilities Agreement to take all reasonable
action necessary to effect such service plan amendment or to obtain such
opinion.

BUDGET AND APPROPRIATIONS

     On or before September 1 of each year, the District shall prepare a
proposed Project budget, specifying the anticipated Proportionate Share to be
paid in the ensuing fiscal year by each of the Related Districts.  On or before
September 10 of each year, the Related Districts shall either approve budget
documents prepared by the District or propose to the District, in writing,
additions to and/or deletions from the proposed budgets.  Absent receipt by the
District of a written proposal for additions and/or deletions by September 15 of
such year, the Related Districts shall be deemed to have approved the items
included in the proposed budgets.  In the event the Related Districts propose
additions and/or deletions to the proposed budgets for consideration by the
District and for inclusion in the budget documents prepared by the District, and
if such additions and/or deletions are not agreed to by the District, the issue
shall be submitted to the Arbitrator (as defined in the Intergovernmental
Agreement) who shall accept and/or reject such proposed additions and/or
deletions pursuant to the provisions of the Intergovernmental Agreement.
Following the Arbitrator's decision, the District shall approve its budget for
the next ensuing year.

     Each Related District shall adopt budgets, and make appropriations
therefor, sufficient to pay its Proportionate Share of Revenue Obligations as
required under the Intergovernmental Agreement, subject to the provisions
described above under "Limitation on Obligations." Each District shall include
such amounts in its budget for the ensuing year, and shall certify an ad valorem
tax levy in an amount sufficient, together with other revenues of such District,
to pay the full amounts required under the Intergovernmental Agreement, subject
to the provisions described above under "Limitation on Obligations."

BREACH OF INTERGOVERNMENTAL AGREEMENT

     The Districts agree that no breach of the Intergovernmental Agreement shall
justify or permit termination of the continuing obligations under the
Intergovernmental Agreement.

     In addition to any other available remedies, in the event of a breach of
the Intergovernmental Agreement, any District may ask a court of competent
jurisdiction to enter a writ of mandamus to compel the board of


                                         A-29
<PAGE>

directors of the breaching District to perform its duties under the
Intergovernmental Agreement, and any District may seek from a court of competent
jurisdiction temporary and/or permanent restraining orders, or orders of
specific performance, to compel the other to perform in accordance with the
obligations set forth under the Intergovernmental Agreement.

ASSIGNMENT

     Neither the Intergovernmental Agreement, nor any of any District's rights,
obligations, duties or authorities thereunder may be assigned in whole or in
part without the prior written consent of each of the other Districts and the
Trustee.  Any purported attempt to assign the Intergovernmental Agreement or any
rights thereunder shall be void and of no force and effect.  Consent to one
assignment shall not be consent to any subsequent assignment.  The foregoing is
subject to the limitation that the District has assigned or shall be entitled to
assign all or any portion of its rights thereunder to the Authority (which may
similarly assign its rights to the Trustee) or the Trustee, or any successor to
the foregoing, or to any other party without the consent of the Related
Districts.

AMENDMENT

     The Intergovernmental Agreement may not be modified, amended, changed or
terminated, in whole or in part, except by an agreement in writing duly
authorized and executed by each of the Districts and consented to in writing by
THE Authority, the Trustee and the Credit Enhancement Provider.


                                         A-30

<PAGE>
                                     THE LEASE

     The following summary of certain provisions of the Lease does not purport
to be complete and is subject in all respects to the provisions of, and is
qualified in its entirety by, reference to the Lease, copies of which are
available from the Trustee.

GENERAL

     Parcel 49C Limited Partnership (the "Partnership") has entered into a lease
(the "Lease") with the United States Government, acting by and through the
General Services Administration (the "Government"), pursuant to which the
Government has agreed to lease 449,859 net usable square feet of the
approximately 535,000 net usable square feet of space in the Project.  Rent
payments under the Lease will commence on March 1, 1998.

LEASE PAYMENT OBLIGATIONS

     The base rent payable under the Lease shall be based on an initial annual
rental rate of $38.85 per net usable square foot for the first 287,483 of net
usable square feet of space leased and $37.95 per net usable square foot for the
remaining 162,376 of net usable square feet leased for a total initial amount of
$17,330,883.75 per year or $1,444,240.31 per month.  The Government may deduct
from the base rent during any year of the term of the Lease an amount which will
not exceed $8.50 per net usable square foot (which amount may be increased each
year in accordance with a formula set forth in the Lease using the same
methodology for calculating the increase in the rent for operating costs set
forth in the Lease) for the Lessor's failure to perform its obligations under
the Lease, but the Government has agreed pursuant to an attornment agreement 
(the "Attornment Agreement") to give the Trustee notice of and an opportunity 
to cure the Partnership's failure to perform its obligations under the Lease 
prior to deducting amounts from the base rent, unless the Partnership's 
failure to perform has caused a life or health-threatening condition. Conse-
quently, the total base rent not subject to set-off is $13,507,082.22 per year, 
or $1,125,590.19 per month.  Rent is payable in equal monthly installments in
arrears.  It is a condition to issuance of the Bonds that counsel for the
Government render an opinion that the obligations of the Government to pay rent
under the Lease constitutes an absolute and unconditional obligation of the
Government.  As is the case with most federal agencies, the Government's access
to funds requires an annual appropriation by Congress.  The Government's ability
to make payments under the Lease requires such an appropriation to the Federal
Buildings Fund, the fund from which all the Government's long-term leases are
paid.  In the event Congress fails to make such appropriation, or in the event
any payments that are properly due and owing the Partnership under the Lease are
not made, the Partnership or the Trustee would be entitled, in the opinion of
the counsel for the Government, to enforce the payment obligations of the United
States in accordance with the terms of the Lease, or as otherwise may be
available at law or in equity.

COMPLETION OF CONSTRUCTION

     In the event that the space rented to the Government is not completed as
scheduled (which is to occur in six phases) and the delay is attributable to the
Partnership, rather than an adjustment to the rent commencement date or any
other provisions for liquidated damages, the Partnership is required to pay the
Government liquidated damages equal to the rent payable with respect to each
phase for the period of time from the applicable rent commencement date until
the phase has been determined to be substantially complete.  The imposition of
such liquidated damages does not relieve the Government of its obligation to pay
rent or in any way affect the assignment of such rent to the Trustee.

CASUALTY OR CONDEMNATION

     If the premises leased to the Government are totally destroyed by fire or
other casualty, the Government will have the right to terminate the Lease by
providing written notice to the Partnership within 120 days after the occurrence
of such event.  In case of partial destruction or damage, so as to render all or
a portion of the premises unrentable, as reasonably determined by the
Government, the rent will be reduced proportionately from the date of such
partial destruction or damage.  The Government may not terminate the Lease as a
result of such partial destruction or damage so long as the Partnership
diligently commences and pursues the repair and restoration of the premises.
Although not specifically covered by the Lease, in the event of a condemnation
of the building, the Government may have the right to terminate the Lease.

PARTNERSHIP RESPONSIBILITIES


                                         A-31
<PAGE>


      The Partnership has various obligations under the Lease, including
obligations regarding hazardous waste, asbestos, illegal activities, kickbacks
and compliance with certain statutes regarding contractors' employment
practices.  Failure of the Partnership to comply with such obligations may give
the Government valid claims against the Partnership, but the Government has
agreed pursuant to the Attornment Agreement not to terminate the Lease for such
failure.  The Lease also requires that the Partnership as lessor to certify that
it has no knowledge of any illegal or improper activity in the procurement of
the Lease.  The Partnership will be required to deliver such a certificate at
the date of issuance of the Bonds.  If the Government determines that such a
violation exists, the Government may elect to (i) reduce the amount of its
monthly rent payments by five percent for each month of the remaining term of
the Lease, including any option periods, and recover up to five percent of the
rent already paid; (ii) reduce payments for alterations not included in monthly
rental payments by five percent of the amount of the alterations agreement; or
(iii) reduce the rent payments for violations by the Partnership's subcontractor
by an amount not exceeding the amount of profit or fee reflected in the
subcontract at the time the subcontract was placed.

     The Lease also provides that if any price negotiated in connection with any
construction contract of the Partnership relating to the Project is increased by
any significant amount because the Partnership or a subcontractor furnished cost
or pricing data that was not complete, accurate and current, the price or cost
shall be reduced accordingly and the contract shall be modified to reflect such
reduction.  The Lease also provides that the Government may seek a reduction in
the contract price if defective cost or pricing data previously submitted
indicates that the price or cost should be reduced accordingly and that the
Lease should be modified.

OPTIONS TO LEASE ADDITIONAL SPACE

     The Government has been granted three options to lease additional space,
aggregating an additional 85,271 of net usable square feet, at an annual rental
rate of $37.95 per net usable square foot, upon the same terms and conditions
set forth in the Lease.  The deadline for the Government's exercise of these
options is December 31, 1996.




                                         A-32


<PAGE>

                              THE DEVELOPMENT AGREEMENT

     The following summary of certain provisions of the Development Agreement
does not purport to be complete and is subject in all respects to the provisions
of, and is qualified in its entirety by, reference to the Development Agreement,
copies of which are available from the Trustee.

GENERAL

     Until the mill levy described in the Operating Agreement and the
Intergovernmental Agreement is imposed, certain charges (payments in lieu of
taxes) will be assessed pursuant to the Development Agreement upon the property
owned by Douglas County Development Corporation ("DCDC") located within the
Districts (the "Property") (such charges are referred to as the "Development
Charges") and subsequent owners of the Property, in an amount equivalent to that
which would be generated by a mill levy against all of the taxable real and
personal property in the Districts pursuant to the Operating Agreement and the
Intergovernmental Agreement.

     Under the Development Agreement, DCDC has granted to the Authority, for the
purpose of providing security for the payment of the Development Charges, a good
and sufficient lien upon the Property, subject to no encumbrances other than the
permitted encumbrances described in the Development Agreement.

ESTABLISHMENT AND ACCEPTANCE OF THE DEVELOPMENT CHARGE OBLIGATION

     Each parcel, lot or tract constituting a portion of the Property shall have
a Development Charge obligation under the Development Agreement equal to the
amount of the Development Charges payable in respect of such parcel, lot or
tract in accordance with the terms of the Development Agreement, which
obligation shall be secured by the Development Charge lien created under the
Development Agreement.  DCDC for and on behalf of itself, its successors and
assigns, accepts and acknowledges the Development Charge obligation with respect
to the Property, and agrees that the Property and each such parcel, lot or tract
shall be bound thereby.

GRANT AND RELEASE OF DEVELOPMENT CHARGE LIEN

     In consideration of the Authority's issuance of the Bonds and undertaking
the financial obligations set forth therein relating to the Project which will
benefit the Property and the owners, residents, tenants and occupants thereof,
and to secure the payment of the Development Charge obligation in accordance
with the Development Agreement and the performance of any and all other
covenants, agreements, warranties and conditions of DCDC contained in the
Development Agreement, DCDC has, under the terms of the Development Agreement,
encumbered and mortgaged unto the Authority, its successors and assigns, the
Property, together with all improvements, fixtures and other property, real and
personal, owned by DCDC, which may belong to, or be or thereafter become a part
thereof; SUBJECT, HOWEVER, TO THE CONDITION that the Development Charge lien
thereby granted shall automatically cease, terminate and be released upon the
occurrence of any of the following events: (i) the Bonds are no longer
outstanding and the Credit Enhancement Provider has consented to the release of
the Development Charge lien; (ii) the Credit Enhancement Provider has consented
to the release of the Development Charge lien and if, in the opinion of
nationally recognized bond counsel, the release of the Development Charge lien
will not cause interest on the Bonds to be includable in gross income for
federal income tax purposes, (iii) the amendment to the Districts' service plan
authorizing the imposition of the mill levy provided for in the Operating
Agreement and the Intergovernmental Agreement has been formally approved by the
Town; or (iv) if, in the opinion acceptable to the District of counsel
acceptable to the District, the imposition of the mill levy as described in the
Operating Agreement and the Intergovernmental Agreement is otherwise valid and
enforceable without regard to such service plan amendment.  Upon the cessation
of the Development Charge lien, the Authority or its assigns shall execute and
record all documents necessary to evidence the release of the Development Charge
lien of record.



                                         A-33

<PAGE>

DEVELOPMENT CHARGES

     Until such time as the Development Charge lien is released, the Authority
shall be entitled to collect the Development Charges payable in respect of the
Property or any parcel, lot or tract constituting a portion of the Property,
which charges are to be assessed and paid within fifteen (15) days after any
applicable payment date.

     Development Charges shall be assessed by the Authority against the Property
in an annual amount equivalent to the amount the District or a Related District
would collect if it were to impose a mill levy not to exceed 35 mills against
the Property.  In the event of a change in the method for determining assessed
value or the ratio of valuation for assessment, the maximum mill levy shall be
adjusted to account for such revision so that the Development Charges imposed by
the Authority shall be determined as if such change had not occurred.  The total
Development Charges to be imposed in any year by the Authority against the
Property shall be determined by its Board of Directors.

     In the event that additional parcels, lots or tracts of land become a part
of the Property by amendment or supplement to the Development Agreement, the
Development Charge obligation shall be assessed against each parcel, lot or
tract relative to all Included Property served by the Project.

               Each owner of the Property or any parcel, lot or tract
constituting a portion of the Property shall pay its allocable share (as
determined by the District) of the Development Charge within fifteen (15) days
after the applicable payment date.  The Authority shall cause billings to be
sent to each owner of the Property or any parcel, lot or tract constituting a
portion of the Property, setting forth the amount of the Development Charges
required to be paid and the applicable payment date.

SALE OR LEASE OF THE PROPERTY

     The Development Charge lien will remain a lien upon each parcel of the
Property, subject to no encumbrances or lease of such parcel of the Property to
any third party except the permitted encumbrances, whether such transaction is
by lease, deed, contract for deed or other conveyance.

LIMITATIONS ON DEVELOPMENT CHARGE OBLIGATIONS

     The Authority covenants, agrees and consents that if at any time the
Property is comprised of more than one parcel, lot or tract, then each parcel,
lot or tract constituting a portion of the Property shall be security for, and
subject to a Development Charge lien with respect to, only the Development
Charges attributable to such parcel, lot or tract constituting a portion of the
Property.  The Authority further covenants, agrees and consents that the
Development Charges collected by the Authority shall be used solely in a manner
which would satisfy the financial obligations of the District under the
Operating Agreement and the Intergovernmental Agreement.

DEFAULTS BY ANY OWNER OF THE PROPERTY AND REMEDIES OF THE AUTHORITY

     Any one or more of the following shall be deemed to be a default with
respect to any portion of the Property to which the same is applicable:

     any default in the payment or satisfaction of the Development Charges or
any part thereof with respect to such portion of the Property;

     the attachment of, seizure of or levy upon such portion of the Property
that is then subject to the Development Charge lien pursuant to any legal
process, if the same is not cured within thirty (30) days, except to the extent
the Development Charge lien is prior to the lien giving rise to such attachment,
seizure or levy; or

     a failure by any owner of such portion of the Property to pay, prior to
delinquency, all taxes, assessments, whether general or special, governmental
charges, utility charges, and all other charges of any kind whatsoever that may
at any time be lawfully charged, assessed or levied with respect to such portion
of the Property then owned by such Person, and which are secured by any prior
lien or encumbrance thereon, or any portion thereof, or which may result in the
creation of a prior lien or encumbrance upon such portion of the Property, in
the event of nonpayment thereof (collectively, "Charges"); PROVIDED, HOWEVER,
that such failure shall not constitute a default while such owner is contesting
in good faith such Charges and takes such action as may be reasonably necessary
to prevent issuance of a county treasurer's deed or other action that would
defeat the Development Charge lien.


                                         A-34
<PAGE>

      Upon the occurrence of any one or more of the foregoing defaults, the
Authority may exercise certain remedies under the Development Agreement,
including but not limited to, the right to foreclose upon the portion of the
Property in default.


                                         A-35
<PAGE>

                        THE RECREATIONAL FACILITIES AGREEMENT

     The following summary of certain provisions of the Recreational Facilities
Agreement does not purport to be complete and is subject in all respects to the
provisions of, and is qualified in its entirety by, reference to the
Recreational Facilities Agreement, copies of which are available from the
Trustee.

     To provide for the ownership and operation of the Project until the
Operating Agreement becomes effective, the Authority and the District will enter
into the Recreational Facilities Agreement.  Pursuant to the terms of the
Recreational Facilities Agreement, the Authority will be the owner of the
Project and the District will have no fee title thereto until such time as a
deed to all or any portion of the Project is delivered to the District.

     The Recreational Facilities Agreement will be replaced (except to the
extent provided therein) by the Operating Agreement and the Intergovernmental
Agreement when such agreements become effective pursuant to their respective
terms.  See "THE OPERATING AGREEMENT" and "THE INTERGOVERNMENTAL AGREEMENT"
above.

     During the Term of the Recreational Facilities Agreement, the Authority
shall hold title to and ownership of each of the Project facilities and any and
all additions thereto which comprise repairs, replacements, modifications,
improvements and substitutions until such Project facility is transferred to the
District.  The District agrees that any damage to the Project that would
materially impact the operation of the Project that is occasioned by the
District's removal of fixtures and improvements shall be promptly repaired by
the District.  Notwithstanding anything to the contrary in the Recreational
Facilities Agreement, it is understood that title to personal property
permanently attached to the Project by the District or any other entity,
instrumentality, authority or department of the District shall become a part of
the Project.




                                         A-36


<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus, and, if given or
made, such information or representations must not be relied upon as having been
authorized.  This Prospectus does not constitute an offer to sell or the
solicitation of an offer to buy any securities other than the securities to
which it relates or an offer to sell or the solicitation of an offer to buy such
securities in any circumstances in which such offer or solicitation is unlawful.
Neither the delivery of this Prospectus nor any sale made hereunder shall, under
any circumstances, create any implication that there has been no change in the
affairs of the Credit Enhancement Provider since the date hereof or that the
information herein is correct as of any time subsequent to its date.

                          ---------------------------------

                                  TABLE OF CONTENTS
                                                                         Page

Additional Information ....................................................
Prospectus Summary ........................................................
Risk Factors ..............................................................
Capitalization ............................................................
Management's Discussion and Analysis of Financial
  Condition and Results of Operations .....................................
The Project ...............................................................
The Authority .............................................................
The Districts .............................................................
Tax Exemption .............................................................
Description of Exchange Bonds .............................................
Credit Enhancement ........................................................
The Exchange Offer ........................................................
Management ................................................................
Security Ownership ........................................................
Certain Transactions ......................................................
Plan of Distribution ......................................................
Legal Matters .............................................................
Independent Accountants ...................................................
Index to Consolidated Financial Statements ............................... F-1
Appendix.................................................................. A-1

                          ---------------------------------

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------


- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------



                                  CASTLE ROCK RANCH
                            PUBLIC IMPROVEMENTS AUTHORITY


                          ---------------------------------


                                      PROSPECTUS


                          ---------------------------------



                       OFFER TO EXCHANGE ITS PUBLIC FACILITIES
                       REVENUE BONDS, SERIES 1996 B FOR ANY AND
                       ALL OF ITS OUTSTANDING PUBLIC FACILITIES
                              REVENUE BONDS, SERIES 1996



- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------


                                          33
<PAGE>

                                     PART II
                     INFORMATION NOT REQUIRED IN PROSPECTUS


ITEM 20.  INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Registrant is incorporated under the laws of the State of Delaware.  
Section 145 of the General Corporation Law of the State of Delaware, INTER 
ALIA, ("Section 145") provides that a Delaware corporation may indemnify any 
persons who were, are or are threatened to be made, parties to any 
threatened, pending or completed action, suit or proceeding, whether civil, 
criminal, administrative or investigative (other than an action by or in the 
right of such corporation), by reason of the fact that such person is or was 
an officer, director, employee or agent of such corporation, or is or was 
serving at the request of such corporation as a director, officer employee or 
agent of another corporation or enterprise.  The indemnity may include 
expenses (including attorneys' fees), judgments, fines and amounts paid in 
settlement actually and reasonably incurred by such person in connection with 
such action, suit or proceeding, provided such person acted in good faith and 
in a manner he reasonably believed to be in or not opposed to the 
corporation's best interests and, with respect to any criminal action or 
proceeding, had no reasonable cause to believe that his conduct was illegal.  
A Delaware corporation may indemnify any persons who are, were or are 
threatened to be made, a party to any threatened, pending or completed action 
or suit by or in the right of the corporation by reason of the fact that such 
person was a director, officer, employee or agent of such corporation, or is 
or was serving at the request of such corporation as a director, officer, 
employee or agent of another corporation or enterprise.  The indemnity may 
include expenses (including attorneys' fees) actually and reasonably incurred 
by such person in connection with the defense or settlement of such action or 
suit, provided such person acted in good faith and in a manner he reasonably 
believed to be in or not opposed to the corporation's best interests, 
provided that no indemnification is permitted without judicial approval if 
the officer, director, employee or agent is adjudged to be liable to the 
corporation.  Where an officer, director, employee or agent is successful on 
the merits or otherwise in the defense of any action referred to above, the 
corporation must indemnify him against the expenses which such officer or 
director has actually and reasonably incurred.

The Registrant's Certificate of Incorporation provides for the 
indemnification of directors and officers of the Registrant to the fullest 
extent permitted by the General Corporation Law of the State of Delaware, as 
it currently exists or may hereafter be amended.

Section 145 further authorizes a corporation to purchase and maintain 
insurance on behalf of any person who is or was a director, officer, employee 
or agent of the corporation, or is or was serving at the request of the 
corporation as a director, officer, employee or agent of another corporation 
or enterprise, against any liability asserted against him and incurred by him 
in any such capacity, arising out of his status as such, whether or not the 
corporation would otherwise have the power to indemnify him under Section 145.

The Registrant maintains and has in effect insurance policies covering all of 
the Registrant's directors and officers against certain liabilities for 
actions taken in such capacities, including liabilities under the Securities 
Act of 1933.

ITEM 21.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

          (a)  EXHIBITS.

1.1       Purchase Agreement dated as of March 26, 1996, between Castle Rock
          Ranch Public Improvements Authority (the "Authority") and Lehmann
          Brothers, Inc.

3.1       Certificate of Incorporation of the Registrant 

3.2       By-laws of the Registrant.

3.3       Certificate of Incorporation of Castle Rock Ranch Public Improvements
          Authority (the "Authority").

3.4       Bylaws of the Authority.

4.1       Indenture of Trust dated as of March 1, 1996 between the Authority and
          SouthTrust Bank of Alabama, National Association, as Trustee
          (the "Trustee").

5.1       Opinion and consent of Brownstein Hyatt Farber & Strickland, P.C.*

8.1       Opinion and consent of Brownstein Hyatt Farber & Strickland, P.C.*

<PAGE>

10.1  Collateralized Credit Enhancement Agreement dated as of March 1, 1996,
      from the Registrant for the benefit of the Trustee.

10.2  Reimbursement Agreement dated as of March 1, 1996 between the Authority
      and the Registrant.

10.3  Bond Pledge and Security Agreement dated as of March 1, 1996 between the
      Registrant and the Trustee.

10.4  Agreement for Purchase and Sale of Real Property dated as of March 1, 1996
      between Douglas County Development Corporation (the "DCDC") and the
      Authority.

10.5  Intergovernmental Agreement dated as of March 1, 1996 between Dawson Ridge
      Metropolitan Districts No. 1, No. 2, No. 3, No. 4 and No. 5.

10.6  Development Agreement dated as of March 1, 1996 between the Authority and
      the DCDC.

10.7  Operating Agreement dated as of March 1, 1996 between the Authority and
      Dawson Ridge Metropolitan District No. 5.

10.8  Recreational Facilities Agreement dated as of March 1, 1996 between the
      Authority and Dawson Ridge Metropolitan District No. 5.

12.1  Statement of Computation of Ratios.

21.1  Subsidiaries of the Registrant. The Registrant has No Subsidiaries.

23.1  Consent of Joseph DeCosimo & Co.

23.2  Consent of Brownstein Hyatt Farber & Strickland, P.C. (included in Exhibit
      5.1).

24.1  Power of Attorney (included in signature page).

25.1  Statement of Eligibility of Trustee on Form T-1.*

27.1  Financial Data Schedule.

99.1  Form of Letter of Transmittal.*

99.2  Form of Notice of Guaranteed Delivery.*

99.3  Form of Tender Instructions.*

99.4  To be filed by Amendment.*

(B) FINANCIAL STATEMENT SCHEDULES.   

          Not Applicable.

ITEM 22.  UNDERTAKINGS.

          The undersigned registrant hereby undertakes:

          (1)  To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement;

            (i)   To include any prospectus required by Section 10(a)(3) of the
                  Securities Act of 1933;

            (ii)  To reflect in the prospectus any facts or events arising
                  after the effective date of the registration statement (or
                  the most recent post-effective amendment thereof) which
                  individually or in the aggregate, represent a fundamental
                  change in the information set forth in the registration
                  statement;

            (iii) To include any material information with respect to the plan
                  of distribution not previously disclosed in the registration
                  statement or any material change to such information in the
                  registration statement;

<PAGE>

          (2)  That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at the time shall be deemed to be the initial BONA
FIDE offering thereof;

          (3)  To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering; and

          (4)  If the registrant is a foreign private issuer, to file a post-
effective amendment to the registration statement to include any financial
statements required by Rule 3-19 of the chapter at the start of any delayed
offering or throughout a continuous offering.  Financial statements and
information otherwise required by Section 10(a)(3) of the Act need not be
furnished, PROVIDED, that the registrant includes in the prospectus, by means of
a post-effective amendment, financial statements required pursuant to this
paragraph (a)(4) and other information necessary to ensure that all other
information in the prospectus is at least as current as the date of those
financial statements.  Notwithstanding the foregoing, with respect to
registration statements on Form F-3, a post-effective amendment need not be
filed to include financial statements and information required by Section
10(a)(3) of the Act or Rule 3-19 of this chapter if such financial statements
and information are contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the Form
F-3.

(1)  The undersigned registrant hereby undertakes as follows: that prior to 
any public reoffering of the securities registered hereunder through use of a 
prospectus which is a part of this registration statement, by any person or 
party who is deemed to be an underwriter within the meaning of Rule 145(c), 
the issuer undertakes that such reoffering prospectus will contain the 
information called for by the applicable registration form with respect to 
reofferings by persons who may be deemed underwriters, in addition to the 
information called for by the other items of the applicable form.

(2)  The registrant undertakes that every prospectus: (i) that is filed 
pursuant to paragraph (1) immediately preceding, or (ii) that purports to 
meet the requirements of Section 10(a)(3) of the Act and is used in 
connection with an offering of securities subject to Rule 415, will be filed 
as a part of an amendment to the registration statement and will not be used 
until such amendment is effective, and that, for purposes of determining any 
liability under the Securities Act of 1933, each such post-effective 
amendment shall be deemed to be a new registration statement relating to the 
securities offered therein, and the offering of such securities at that time 
shall be deemed to be the initial BONA FIDE offering thereof.

          Insofar as indemnification for liabilities arising under the 
Securities Act of 1933 (the "Securities Act") may be permitted to directors, 
officers and controlling persons of the registrant pursuant to the provisions 
described under Item 20 or otherwise, the registrant has been advised that in 
the opinion of the Securities and Exchange Commission such indemnification is 
against public policy as expressed in the Securities Act and is, therefore, 
unenforceable.  In the event that a claim for indemnification against such 
liabilities (other than the payment by the registrant of expenses incurred or 
paid by a director, officer or controlling person of the registrant in the 
successful defense of any action, suit or proceeding) is asserted by such 
director, officer or controlling person in connection with the securities 
being registered, the registrant will, unless in the opinion of its counsel 
the matter has been settled by controlling precedent, submit to a court of 
appropriate jurisdiction the question whether such identification by it is 
against public policy as expressed in the Securities Act and will be governed 
by the final adjudication of such issue.

          The undersigned registrant hereby undertakes that:

          (1)  For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.

          (2)  For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial BONA FIDE offering thereof.

          (3)  The undersigned registrant hereby undertakes to respond to
requests for information that is incorporated by reference into the prospectus
pursuant to Item 4, 10(b), 11, or 13 of this form, within one business day of
receipt of such request, and to send the incorporated documents by first class
mail or other equally prompt means.  This includes information contained in
documents filed subsequent to the effective date of the registration statement
through the date of responding to the request.

          (4)  The undersigned registrant hereby undertakes to supply by means
of a post-effective amendment all information

<PAGE>

concerning a transaction, and the company being acquired involved therein, 
that was not the subject of and included in the registration statement when 
it became effective.

                                * * * * * * * *
<PAGE>

                                   SIGNATURES

          Pursuant to the requirements of the Securities Act of 1933, the 
Registrant has duly caused this Registration Statement to be signed on its 
behalf by the undersigned, thereunto duly authorized, in the City of 
Chattanooga, State of Tennessee, on December 13, 1996.

                                    BFC GUARANTY CORP.


                                    By:  /s/ Franklin L. Haney
                                       -----------------------------------
                                       Name:  Franklin L. Haney
                                              President


                              POWER OF ATTORNEY

          KNOW ALL MEN BY THESE PRESENTS, that each person whose signature 
appears below constitutes and appoints Franklin L. Haney his true and lawful 
attorney-in-fact, with full power of substitution and revocation, for him and 
in his name, place and stead, in any and all capacities to sign any and all 
amendments (including post-effective amendments) to this Registration 
Statement, and to file the same with all exhibits thereto, and other 
documents in connection therewith, with the Securities and Exchange 
Commission, granting unto each such attorney-in-fact and agent, full power 
and authority to do and perform each and every act and thing requisite and 
necessary to be done as fully to all intents and purposes as such person 
might or could do in person, hereby ratifying and confirming all that said 
attorneys in fact and agents or any of them, or their or his substitute or 
substitutes, may lawfully do or cause to be done by virtue hereof.

          Pursuant to the requirements of the Securities Act, this 
Registration Statement and Power of Attorney have been signed on December 13, 
1996 by the following persons in the capacities indicated.

          SIGNATURE                        CAPACITY

 /s/ Franklin L. Haney              President and Director
- --------------------------------    (Principal Executive Officer)
Franklin L. Haney


 /s/ Roger D. Bailey
- ---------------------------------   (Principal Financial Officer and Principal
Roger D. Bailey                     Accounting Officer)


 /s/ Emeline W. Haney
- ---------------------------------   Director
Emeline W. Haney
                  

 /s/ Chris E. Zaha 
- ---------------------------------   Director
Chris E. Zaha  

<PAGE>
                                       
                                 $66,975,000
                CASTLE ROCK RANCH PUBLIC IMPROVEMENTS AUTHORITY
                 PUBLIC FACILITIES REVENUE BONDS, SERIES 1996


                              PURCHASE AGREEMENT
                                March 26, 1996


Castle Rock Ranch Public Improvements Authority
7951 East Maplewood Avenue, Suite 326
Englewood, CO 80111

Ladies and Gentlemen:

     The undersigned, Lehman Brothers Inc. (the "Purchaser"), hereby offers 
to enter into this agreement (the "Purchase Agreement") with Castle Rock 
Ranch Public Improvements Authority, a nonprofit Colorado corporation (the 
"Authority"), for the purchase and sale of the Castle Rock Ranch Public 
Facilities Revenue Bonds, Series 1996, as described below.  This offer is 
made subject to acceptance thereof by the Authority prior to 5:00 p.m. 
(Eastern Standard Time) on the date hereof, and upon such acceptance, as 
evidenced by the signature of the President of the Authority in the space 
provided below.  This Purchase Agreement shall be in full force and effect in 
accordance with its terms and shall be binding upon the Authority and the 
Purchaser.  Terms used in this Purchase Agreement and not other-wise defined 
herein shall have the meanings set forth in the Offering Memorandum (as 
defined herein).

     1.   PURCHASE AND SALE OF THE BONDS.

          (a) Upon the terms and conditions and upon the basis of the respective
representations, warranties and covenants contained herein, the Purchaser hereby
agrees to purchase from the Authority for offering to the public, and the
Authority hereby agrees to sell to the Purchaser for such purpose, on the date
of the Closing (as defined herein), all, but not less than all, of the
Authority's $66,975,000 aggregate principal amount of Public Facilities Revenue
Bonds, Series 1996 (the "Bonds"), at the purchase price of $66,488,558.55, which
represents the principal amount of the Bonds less an underwriter's discount of
$1,272,062.50 plus an aggregate premium of $785,621.05, plus accrued interest
from March 1, 1996 to the date of the Closing.

          (b) The Bonds shall be as described in the Limited Offering Memorandum
dated March 26, 1996 delivered on the date hereof (which Limited Offering
Memorandum, including the cover page and all exhibits, appendices, reports and
statements included with or attached to it and any amendments and supplements
that may be authorized by the Authority and to which the Purchaser does not
reasonably object, and any amendments and supplements which may be


                                       1
<PAGE>

reasonably required by the Purchaser, for use with respect to the Bonds, is 
hereinafter called the "Offering Memorandum") and in APPENDIX A hereto and in 
that certain Trust Indenture (the "Indenture") dated as of March 1, 1996 by 
and between the Authority and SouthTrust Bank of Alabama, National 
Association, as trustee (the "Trustee"), authorizing the issuance of, and 
securing, the Bonds.  The Bond proceeds will be used, after payment of cost 
of issuance, along with other funds of the Authority, to acquire real 
property and certain water rights as described in the Offering Memorandum.

     2.   LIMITED OFFERING OF THE BONDS.  The Purchaser intends to make an 
initial limited offering of the Bonds to institutional investors at the 
prices (or yields) not in excess of the initial offering prices (or not lower 
than the yields) set forth in APPENDIX A hereto, and the Purchaser may 
subsequently change such initial offering prices (or yields).  The Purchaser 
agrees to notify the Authority of such changes, but failure to so notify the 
Authority shall not invalidate such changes.

     3.   APPROVAL OF OFFERING MEMORANDUM.  Simultaneously with the 
Authority's acceptance hereof, the Authority shall deliver to the Purchaser 
copies of the Offering Memorandum executed on behalf of the Authority by a 
duly authorized officer.

     The Authority consents to the use and distribution by the Purchaser of 
the Offering Memorandum and the information contained therein in connection 
with the offering and sale of the Bonds.

     The Authority has previously provided the Purchaser with copies of its 
Preliminary Limited Offering Memorandum dated February 19, 1996 and its 
supplement thereto dated February 26, 1996 (collectively, the "Preliminary 
Limited Offering Memorandum") with respect to the Bonds.  The Authority 
hereby confirms that, as of its date and as of the date hereof, the 
Preliminary Limited Offering Memorandum was and is "deemed final' by the 
Authority for purposes of Subsection (b)(1) of the Securities and Exchange 
Commission Rule 15c2-12 ("Rule 15c2-12").  The Authority shall provide copies 
of the Offering Memorandum in quantities specified by the Purchaser to permit 
it to comply with Rule 15c2-12 and applicable rules of the Municipal 
Securities Rulemaking Board.

     The Purchaser agrees to make a limited offering of the Bonds to 
institutional investors at the initial offering prices (or yields) set forth 
on the cover page of the Offering Memorandum.

     4.   REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE AUTHORITY.  The 
Authority represents and warrants to and covenants with the Purchaser (and it 
shall be a condition of the obligation of the Purchaser to purchase and 
accept delivery of the Bonds that the Authority shall so represent, warrant 
and covenant on the date hereof and as of the dates of the Closing) that:

          (a) The Authority is a Colorado nonprofit corporation duly 
organized and validly existing under the Constitution and laws of the State 
of Colorado.


                                       2
<PAGE>

          (b) Pursuant to the articles of incorporation and bylaws of the 
Authority, the Authority is authorized to (i) issue the Bonds for the 
purposes for which they are to be issued as set forth in the Offering 
Memorandum; (ii) enter into, execute and deliver this Purchase Agreement, the 
Bonds, the Indenture, and all other documents to be executed by the Authority 
at or before the Closing (including any supplemental indentures or related 
certificates and documents which may be required in connection with the 
issuance of the Bonds) (collectively, the "Authority Documents"), 
substantially in the forms heretofore delivered to the Purchaser, with only 
such changes therein as shall be mutually agreed upon among the parties 
hereto; and (iii) to deliver to the Trustee the Deed of Trust (as defined and 
described in the Offering Memorandum).

          (c) Except as described herein as conditions to the issuance of the 
Bonds, the Authority has full power and authority to consummate the 
transactions contemplated by the Authority Documents and the Offering 
Memorandum.

          (d) The authorizing bond resolution dated March 1, 1996 of the 
Authority approving and authorizing the execution and delivery of this 
Purchase Agreement and approving the Offering Memorandum was duly adopted at 
a duly convened meeting of the members of the board of the Authority which 
was called and held pursuant to applicable law and at which a quorum was 
present and acting throughout, or by consent of the members of the board of 
the Authority.  On or before the date of the Closing, the Authority shall 
have adopted such supplemental authorizing bond resolutions, if any, required 
to approve, authorize or ratify, as the case may be, the execution and 
delivery of the Authority Documents, the Offering Memorandum and other 
documents delivered pursuant thereto at a meeting of the Members of the Board 
of the Authority which shall have been called and held pursuant to applicable 
law and at which a quorum shall be present and acting throughout.

          (e) Unless a notice is delivered pursuant to Section 4(g) hereof, 
the information contained in the Offering Memorandum (except information 
regarding the Credit Enhancement Provider or information provided by the 
Purchaser for inclusion in the Offering Memorandum (the "Excluded 
Information"), as to which information no representation is made) as of all 
dates between and inclusive of its date and the final date the Purchaser is 
required to provide a copy of the Offering Memorandum to any potential 
customer pursuant to paragraph (b)(4) of Rule 15c2-12 (the "Bringdown Date") 
will be, correct in all material respects; the Offering Memorandum (except 
for the Excluded Information), subject to the giving of such notice, will 
not, as of all dates between and inclusive of its date and the Bringdown 
Date, contain any untrue statement of a material fact or omit to state a 
material fact required to be stated therein or necessary in order to make the 
statements made therein, in light of the circumstances under which they were 
made, not misleading.

          (f) The Authority will advise the Purchaser promptly of the 
institution of any action, suit, proceeding, inquiry or investigation known 
to it seeking to prohibit or otherwise affect the use of the Offering 
Memorandum in connection with the offering, sale or distribution of the Bonds.


                                       3
<PAGE>

          (g) If between the date hereof and the date of the Closing, or 
between the date of the Closing and the Bringdown Date, any event shall occur 
which is known to the Authority and which might cause the Offering Memorandum 
to contain any untrue statement of a material fact or to omit to state a 
material fact necessary in order to make the statements therein, in light of 
the circumstances under which they were made, not misleading, the Authority 
shall notify the Purchaser, and if, in the opinion of the Purchaser, such 
event requires the preparation and publication of a supplement or amendment 
to the Offering Memorandum the Authority shall provide the information 
necessary to supplement or amend the Offering Memorandum in a form and manner 
approved by the Purchaser.

          (h) The Authority has duly authorized and approved the execution 
and delivery of this Purchase Agreement.

          (i) Prior to the date of the Closing, the Authority shall have duly 
authorized all necessary action to be taken by it for (i) the issuance and 
sale of the Bonds for the purposes set forth herein and in the Offering 
Memorandum and (ii) the approval, execution, delivery or receipt by the 
Authority of the Authority Documents, the Bonds and any and all such other 
agreements and documents as may be required to be executed, delivered or 
received by the Authority in order to carry out, give effect to, and 
consummate the transactions contemplated herein and in the Offering 
Memorandum.

          (j) The Authority shall, on or before the date of the Closing, 
execute and deliver such of the Authority Documents as are required for such 
Closing and the Offering Memorandum.

          (k) The Bonds, when issued, delivered and paid for as provided 
herein and in the Indenture, will have been duly authorized and issued and 
will constitute valid and binding limited obligations of the Authority 
enforceable in accordance with their respective terms and entitled to the 
benefits and security of the Indenture (subject in each instance to any 
applicable bankruptcy, reorganization, insolvency, moratorium or other 
similar law or laws affecting the enforcement of creditors' rights generally 
as from time to time in effect, and further subject to the availability of 
equitable remedies and to the qualification that enforcement of the 
indemnification provisions of this Purchase Agreement may be limited by 
federal or state securities laws).  The Bonds represent limited obligations 
of the Authority and the principal of, and premium, if any, and interest on, 
the Bonds are payable (except to the extent otherwise provided in the 
Indenture) solely from the assets granted therefor and held by the Trustee 
pursuant to the Indenture.

          (l) There is no action, suit, proceeding, inquiry or investigation 
at law or in equity or before or by any court, public board or body pending 
or, to the knowledge of the Authority, threatened against or affecting the 
Authority (and, to the knowledge of the Authority, there is no meritorious 
basis therefor) wherein an unfavorable decision, ruling or finding could 
adversely affect (i) the transactions contemplated herein or in the Offering 
Memorandum; (ii) the validity of the proceedings taken by the Authority for 
the adoption, authorization, execution, delivery


                                       4

<PAGE>

and performance of the Authority Documents or any agreement or instrument to 
which the Authority is a party and which is used or contemplated for use in 
the consummation of the transactions contemplated herein or in the Offering 
Memorandum; or (iii) the validity or enforceability of the Authority 
Documents or any agreement or instrument to which the Authority is a party 
and which is used or contemplated for use in the consummation of the 
transactions contemplated herein or in the Offering Memorandum.

          (m) Neither the corporate existence of the Authority nor the right 
or title of the officers of the Authority to their offices are being 
contested and no authority or proceeding for the issuance of the Bonds has 
been repealed, revoked or rescinded.

          (n) The execution and delivery by the Authority of the Offering 
Memorandum, the Authority Documents and the other documents contemplated 
herein or in the Offering Memorandum, and compliance with their provisions, 
and the Authority's execution and delivery of the Deed of Trust for the 
benefit of the Trustee and BFC Guaranty Corp. does not and will not conflict 
with or constitute on the part of the Authority a breach of or a default 
under any existing law, court or administrative regulation, decree or order, 
agreement, indenture, mortgage or lease to which the Authority is a party or 
by which the Authority or any of its properties is or may be bound.

          (o) The Authority agrees to furnish such information, execute such 
instruments and take such other action in cooperation with the Purchaser and 
its counsel as the Purchaser and its counsel may reasonably request (i) in 
any endeavor to qualify the Bonds for offering and sale under the securities 
or "blue sky" laws or other securities laws or regulations of such 
jurisdictions of the United States as the Purchaser may request; (ii) for the 
application for exemption from such qualification- (iii) for the 
determination of their eligibility for investment under the laws of such 
jurisdictions as the Purchaser designates; and (iv) to provide for the 
continuance of such qualifications or exemptions in effect for so long as 
required for the distribution or remarketing of the Bonds; provided, however, 
that the Authority shall not be required with respect to the offer or sale of 
the Bonds to consent to suit or to consent to service of process in any 
jurisdiction.  The Authority consents to the use by the Purchaser of the 
Preliminary Limited Offering Memorandum prior to the availability of the 
Offering Memorandum in obtaining such qualification, exemption or 
determination.

          (p) The Authority authorizes and approves the use by the Purchaser 
(including use prior to the date hereto of the Preliminary Limited Offering 
Memorandum in connection with the offering of the Bonds.

          (q) Any certificate signed by an authorized officer of the 
Authority and delivered to the Purchaser shall be deemed a representation and 
warranty by the Authority to the Purchaser as to the statements made therein.

          (r) Neither the Authority, nor anyone acting on its behalf has, 
directly or indirectly,


                                      5
<PAGE>

offered the Bonds for sale to, or solicited any offer to buy the same from, 
anyone other than the Purchaser.

          (s) Except as described herein as conditions to the issuance of the 
Bonds, no further authorization, approval, consent or other order of any 
governmental authority or agency, or of any other entity or person(s) is 
required for the valid authorization, execution and delivery of the Bonds, 
the Offering Memorandum and the other Authority Documents.

          (t) The Authority has not been notified of any listing or proposed 
listing of the Internal Revenue Service to the effect that the Authority is 
an issuer whose arbitrage certifications may not be relied on.

     5.   CLOSING.  At 12:00 p.m. (Eastern Standard Time) on March 29, 1996 
or at such other time or such other date as shall have been mutually agreed 
upon by the Authority and the Purchaser, the Authority will deliver, or cause 
to be delivered, to The Depository Trust Company ("DTC"), or its agent, on 
behalf of the Purchaser, the Bonds in definitive form (or such temporary form 
as the Purchaser shall find acceptable), duly executed by the Authority and 
authenticated by the Trustee, and the Purchaser will accept such delivery and 
pay the purchase price indicated in Section I hereof for the Bonds.  The 
Bonds will be delivered as I fully registered bond for each maturity, 
registered in the name of Cede & Co. In the event the Bonds are delivered in 
temporary form, the Authority shall deliver the Bonds in definitive form at 
such date as the Purchaser may reasonably request.  Payment of the purchase 
price for the Bonds will be made by wire-transferring immediately available 
funds to the Trustee. Such payment for and delivery of the Bonds is herein 
called the "Closing."

     It is anticipated that CUSIP identification numbers will be printed on 
the Bonds, but neither the failure to print such numbers on any of the Bonds 
nor any error in the printing of such numbers shall constitute cause for a 
failure or refusal by the Purchaser to accept delivery of and pay for any of 
the Bonds. The Purchaser and the Authority shall cooperate to obtain the 
CUSIP numbers.

     6. TERMINATION OF THE PURCHASE AGREEMENT.  The Purchaser shall have the 
fight to cancel its obligation to purchase the Bonds if, between the date 
hereof and the date of the Closing:(i) legislation shall have been enacted by 
the Congress of the United States or the legislature of the State of Colorado 
or shall have been reported out of committee or be pending in committee, or a 
decision shall have been rendered by a court of the United States or the 
State of Colorado, or a ruling shall have been made or a regulation shall 
have been proposed or made or any other release, announcement or inquiry 
(evidence of which shall be furnished to the Authority shall have been made 
by the Treasury Department of the United States or 'the Internal Revenue 
Service, or other federal or state authority, with respect to federal or 
state taxation upon interest on obligations of the general character of the 
Bonds, that in the Purchaser's reasonable judgment, materially adversely 
affects the market for the Bonds, or the market price generally of 
obligations of the general character of the Bonds;


                                      6
<PAGE>

          (ii)  there shall exist any event which (A) makes untrue or 
incorrect statements or information contained in the Offering Memorandum or 
which is not reflected in the Offering Memorandum but should be reflected 
therein in order to make the statements and information therein not 
misleading in any material respect and (B) in the reasonable judgment of the 
Purchaser materially adversely affects the market for the Bonds, or the sale 
of the Bonds, at the contemplated offering prices, by the Purchaser;

          (iii) there shall have occurred any outbreak of hostilities or 
other local, national or international calamity or crises, or a default with 
respect to the debt obligations of, or the institution of proceedings under 
the federal bankruptcy laws by or against any state of the United States or 
agency thereof or any city in the United States having a population of over 
one million persons, the effect of which on the financial markets of the 
United States will be such as, in the Purchaser's reasonable judgment, makes 
it impracticable for the Purchaser to market the Bonds or enforce contracts 
for the sale of the Bonds;

          (iv)  there shall have occurred a general disruption in the trading 
of securities on any national securities exchange or there shall be in force 
a general suspension of trading on the New York Stock Exchange, or minimum or 
maximum prices for trading shall have been fixed and be in force, or maximum 
ranges for prices for securities shall have been required and be in force on 
the New York Stock Exchange, whether by virtue of determination by the 
exchange or by order of the Securities and Exchange Commission of the United 
States or any other governmental authority having jurisdiction that, in the 
Purchaser's reasonable judgment, makes it impracticable for the Purchaser to 
market the Bonds, or enforce contracts for the sale of the Bonds;

          (v)   a general banking moratorium shall have been declared by any 
federal or state authority having jurisdiction and be in force that, in the 
Purchaser's reasonable judgment, makes it impracticable for the Purchaser to 
market the Bonds or enforce contracts for the sale of the Bonds;

          (vi)  legislation shall be enacted or a bill shall be favorably 
reported out of a committee of either house of Congress, or a decision by a 
court of the United States shall be rendered, or a decision or stop order 
shall be made, to the effect that obligations similar to the type 
contemplated herein are not exempt from the registration, qualification or 
other requirements of the Securities Act of 1933, as amended and as then in 
effect, or of the Trust Indenture Act of 1939, as amended and as then in 
effect, or otherwise are or would be in violation of any provision of the 
federal securities laws-, or

          (vii) there shall have been any material adverse change in the 
affairs of the Authority which in the Purchaser's reasonable judgment will 
materially adversely affect the market for the Bonds.


                                      7
<PAGE>

     7. CONDITIONS TO THE PURCHASER'S OBLIGATIONS.  The obligations of the 
Purchaser hereunder shall be subject to the performance by the Authority of 
its obligations to be performed hereunder at and prior to the date of the 
Closing, to the accuracy in all material respects, in the reasonable judgment 
of the Purchaser, of the representations and warranties of the Authority 
herein both as of the date hereof and as of the date of the Closing, and, in 
the reasonable discretion of the Purchaser, to the following conditions, 
including the delivery by the Authority of such documents, certificates and 
opinions as are enumerated in Schedule I attached hereto, all in form and 
substance reasonably satisfactory to the Purchaser:

     (a)  At the time of the Closing, the Credit Enhancement, the 
Registration Rights Agreement and each of the Authority Documents shall be in 
full force and effect in the respective forms heretofore approved by the 
Authority and the Purchaser and none of the foregoing documents shall have 
been amended, repeated, modified or supplemented from the forms thereof as of 
the date hereof, except as may have been approved in writing by the Purchaser.

     (b)  At or prior to the Closing, the Authority, the Purchaser, the 
Credit Enhancement Provider and the Trustee shall have duly executed and 
delivered each of the documents listed on Schedule 1 hereto to which each, 
respectively, is a party.

     (c)  At the time of the Closing, the net proceeds derived from the sale 
of the Bonds shall be deposited with the Trustee and applied for the purposes 
described in the Offering Memorandum and as provided in the Indenture.

     (d)  At or prior to the Closing, the Purchaser shall receive the 
documents listed on Schedule I hereto in such number of counterparts as shall 
be mutually agreeable to the Purchaser and the Authority and such additional 
legal opinions, certificates, proceedings, instruments and other documents 
listed in the closing agenda as Counsel to the Purchaser, Bond Counsel or 
Counsel to the Authority may reasonably request to evidence compliance by the 
Authority with legal requirements, the truth and accuracy, as of the time of 
the Closing, of the respective representations and warranties of the 
Authority in this Purchase Agreement, the Indenture and the other Authority 
Documents and the due performance or satisfaction by the Authority at or 
prior to such time of all agreements then to be performed and all conditions 
then to be satisfied by the Authority.

     If the Authority shall be unable to satisfy the conditions to the 
obligations of the Purchaser contained in this Purchase Agreement, or if the 
obligations of the Purchaser to purchase and accept delivery of the Bonds 
shall be terminated for any reason permitted by ties Purchase Agreement, this 
Purchase Agreement shall terminate and neither the Purchaser nor the 
Authority shall be under any further obligations hereunder; except that the 
obligations of the Authority to pay expenses, as provided in Section 12 
hereof and the obligations of the Authority contained in Section 11 hereof 
shall continue in full force and effect.

     8. CONDITIONS TO THE AUTHORITY'S OBLIGATION. The obligations of the


                                      8
<PAGE>

Authority hereunder are subject to the performance by the Purchaser of its
obligations hereunder.

     9. SURVIVAL OF REPRESENTATIONS, WARRANTIES, AGREEMENTS, AND OBLIGATIONS. 
Each respective representation, warranty and agreement of any of the Authority
or the Purchaser shall remain operative and in full force and effect, regardless
of any investigations made by or on behalf of the Purchaser or the Authority and
shall survive the Closing.  The obligations of the Authority under Sections 11
and 12 hereof shall survive any termination of this Purchase Agreement pursuant
to its terms.

     10. CHANGES AFFECTING THE OFFERING MEMORANDUM.  At any time prior to the
Closing, the Authority agrees to supplement or amend the Offering Memorandum,
whenever requested by the Purchaser when, in the reasonable judgment of the
Purchaser, such supplement or amendment is required.  No amendment or supplement
to the Offering Memorandum shall be made without the approval of the Purchaser. 
After the Closing, and so long as the Purchaser or any participating dealer
shall be offering Bonds which constitute the whole or a part of their unsold
participation, but for a period no longer than 6 months, if any event shall
occur as a result of which it is necessary to amend or supplement the Offering
Memorandum in order to make the statements therein, in light of the
circumstances under which they are made, not misleading, the Purchaser will so
advise the Authority.  In any such case, the Authority shall cooperate as
directed by the Purchaser in the preparing and furnishing to the Purchaser
either amendments to the Offering Memorandum or supplemental information so that
the statements in the Offering Memorandum, as so amended or supplemented, will
not, in light of the circumstances under which such statements were made, be
misleading.  The cost of providing such amendment or supplement prior to Closing
and during the 6 month period following the Closing shall be paid by the
Authority.

     11. INDEMNIFICATION.

     The Authority agrees to indemnify, defend and hold harmless the Purchaser,
each director, trustee, member, officer or employee of the Purchaser and each
person, if any, who has the power, directly or indirectly, to direct or cause
the direction of the management and policies of the Purchaser through the
ownership of voting securities, by contract or otherwise (collectively, the
"Indemnified Parties"), against any and all losses, claims, damages,
liabilities, joint or several, or any expenses, including attorneys' fees and
expenses, related thereto arising out of or in connection with or caused by an
untrue statement or misleading statement or alleged untrue statement or alleged
misleading statement of a material fact contained in the Offering Memorandum
(except with regard to the Excluded Information) or caused by an omission or
alleged omission from the Offering Memorandum (except with regard to the
Excluded Information) of any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, but only insofar as such losses, claims, damages, liabilities or
expenses arise out of or in connection with or are caused by such untrue or
misleading statement or omission or alleged untrue or misleading statement or
omission in the information contained in the Offering Memorandum, except for the
material under the 

                                       9
<PAGE>

caption "UNDERWRITING."

     In case a claim shall be made or any action shall be brought against one or
more of the Indemnified Parties based upon the Offering Memorandum and in
respect of which indemnity is sought against the Authority pursuant to the
preceding paragraph, the Indemnified Parties seeking indemnity shall promptly
notify the Authority, in writing, and the Authority shall promptly assume the
defense thereof, including the employment of counsel chosen by the Authority and
approved by the Purchaser (provided, that such approval by the Purchaser shall
not be unreasonably withheld), the payment of all expenses and the right to
negotiate and consent to settlement.  If any Indemnified Party is advised in a
written opinion of counsel that there may be legal defenses available to such
Indemnified Party which are adverse to or in conflict with those available to
the Authority or that the defense of such Indemnified Party should be handled by
separate counsel, the Authority shall not have the right to assume the defense
of such Indemnified Party, but the Authority shall be responsible for the fees
and expenses of counsel retained by such Indemnified Party in assuming its own
defense, and provided also that if the Authority shall have failed to assume the
defense of such action or to retain counsel reasonably satisfactory to the
Purchaser within a reasonable time after notice of the commencement of such
action, the fees and expenses of counsel retained by the Indemnified Party shall
be paid by the Authority.  Notwithstanding, and in addition to, any of the
foregoing, any one or more of the Indemnified Parties shall have the right to
employ separate counsel with respect to any such claim or in any such action and
to participate in the defense thereof, but the fees and expenses of such counsel
shall be paid by such Indemnified Party or Parties unless the employment of such
counsel has been specifically authorized by the Authority.  The Authority shall
not be liable for any settlement of any such action effected without its
consent, but if settled with the consent of the Authority or if there is a final
judgment for the plaintiff in any such action with or without consent, the
Authority agrees to indemnify and hold harmless the Indemnified Parties from and
against any loss or liability by reason of such settlement or judgment.  The
covenants and agreements of the Authority and the Purchaser herein contained
shall survive the delivery of the Bonds.

     12. EXPENSES.  The Authority shall pay, or direct the Trustee under the
Indenture to pay, from the proceeds of the Bonds, any expenses incident to the
performance of its obligations hereunder including but not limited to (i) the
cost of the preparation and printing of the Indenture and the Authority
Documents, together with a reasonable number of copies thereof-, (ii) the cost
of the preparation and printing of the Offering Memorandum, together with a
reasonable number of copies thereof, (iii) the cost of the preparation and
printing, if any, of the definitive Bonds; (iv) the cost of the Credit
Enhancement; and (v) the fees and disbursements of Bond Counsel, Special Tax
Counsel, the feasibility consultant, the appraiser, the Trustee and of any other
experts or consultants retained by the Authority.

     The fees and expenses of Purchaser's counsel, Wolf, Block, Schorr &
SolisCohen, including those fees and expenses relating to qualification of the
Bonds pursuant to state securities laws and regulations, shall be paid by the
Purchaser.  The Purchaser's out-of-pocket expenses shall 

                                    10
<PAGE>

also be paid by the Purchaser.  The Purchaser shall also pay all advertising 
expenses in connection with the offering of the Bonds.  All other expenses 
incurred in connection with the issuance of the Bonds, including the fees and 
expenses of all other counsel, shall be paid by the Authority.  The 
agreements contained in this Section 12 shall survive any termination of this 
Purchase Agreement and the delivery of the Bonds.

     13. MISCELLANEOUS.

     (a)  Any notice or other communication to be given to the Authority 
under this Purchase Agreement shall be deemed given when delivered in person 
to its address set forth above, or when mailed by first class mail, postage 
prepaid, and addressed to the Authority at the address set forth above, and 
any notice or other communication to be given to the Purchaser under this 
Purchase Agreement shall be deemed given when delivered in person to the 
address set forth below, or when mailed by first class mail, postage prepaid, 
and addressed as follows: Lehman Brothers Inc., 1600 Market Street, Suite 
1725, Philadelphia, PA 19103.

     (b) This Purchase Agreement is made solely for the benefit of the 
Authority and the Purchaser (including the successors or assigns of the 
Purchaser and including the respective directors, trustees, members, 
officers, employees and controlling persons thereof as provided in Section 11 
hereof) and no other person, including any purchaser of the Bonds, shall 
acquire or have any rights hereunder or by virtue hereof.

     (c) This Purchase Agreement shall be governed by and construed in 
accordance with the laws of the State of Colorado, without regard to 
principles of choice of laws.

     (d) The captions in this Purchase Agreement are for convenience of 
reference only and shall not define or limit any of the terms or provisions 
hereof

     (e) This Purchase Agreement may be simultaneously executed in several 
counterparts, each of which shall be an original and all of which shall 
constitute but one and the same instrument.

     (f) This Purchase Agreement shall become effective upon your acceptance 
hereof

                    Very truly yours,




                                       11
<PAGE>
                                       
                                                                      SCHEDULE I

1.   Indenture of Trust, dated as of March 1, 1996, between the Issuer and the
     Bond Trustee.

2.   Bond Indenture Promissory Note, dated as of March 1, 1996, from the Issuer
     to the Bond Trustee.

3.   Bond Purchase Agreement, dated March 26, 1996, between the Issuer and
     Underwriter.

4.   Operating Agreement, dated as of March 1, 1996, between District No. 5
     and the Issuer.

5.   Assignment of Operating Agreement and Consent of Issuer, Credit Enhancement
     Provider, Bond Trustee and District No. 5, dated as of March 1, 1996.

6.   Reimbursement Agreement, dated as of March 1, 1996, between the Issuer
     and Credit Enhancement Provider.

7.   Reimbursement Agreement Promissory Note, dated as of March 1, 1996, from
     the Issuer to the Credit Enhancement Provider.

8.   Collateralized Credit Enhancement Agreement, dated as of March 1, 1996,
     between Credit Enhancement Provider and Bond Trustee.

9.   Bond Pledge and Security Agreement, dated as of March 1, 1996, between
     Credit Enhancement Provider, Bond Trustee and RENHC Trustee.

10.  Agreement for Purchase and Sale of Real Property, dated as of March 1,
     1996, between Douglas County Development Corporation and the Issuer.

11.  Intergovernmental Agreement, dated as of March 1, 1996, among District
     Nos. 1 through 5.

12.  Assignment of Intergovernmental Agreement, dated as of March 1, 1996, from
     District No. 5 to the Credit Enhancement Provider and to the Trustee with
     Consent of District Nos. 1 through 4.

13.  Preliminary Limited Offering Memorandum, dated February 19, 1996 and
     supplement thereto dated February 26, 1996.

14.  Limited Offering Memorandum, dated March 26, 1996.

15.  Continuing Disclosure Agreement, dated as of March 1, 1996, among the
     Issuer, the


                                     12
<PAGE>

     Districts, the Credit Enhancement Provider and the Trustee.

16.  Warranty Deed from Douglas County Development Corporation to Issuer.

17.  Deed of Trust, Security Agreement, Financing Statement and Assignment of
     Rents and Leases, dated as of March 1, 1996, from the Issuer for the
     benefit of the Bond Trustee and the Credit Enhancement Provider.

18.  UCC-1 Financing Statements (naming the Issuer as Debtor and the Bond
     Trustee as Secured Party).

19.  Registration Rights Agreement, dated as of March 1, 1996, among the Issuer,
     the Credit Enhancement Provider and the Underwriter.

20.  Development Agreement, dated as of March 1, 1996 between Douglas County
     Development Corporation and the Issuer.

21.  Warranty Deed from Douglas County Development Corporation to DCDC H, Inc.

22.  Warranty Deed from Douglas County Development Corporation to Franklin L.
     Haney.

23.  Warranty Deed from Franklin L. Haney to DCDC II, Inc.

24.  Assignment of Development Agreement from the Issuer to the Trustee.

25.  Recreational Facilities Agreement, dated as of March 1, 1996 between
     District No. 5 and the Issuer.

26.  Assignment of Recreational Facilities Agreement to the Bond Trustee.

27.  Articles of Incorporation of the Issuer, certified by the Colorado
     Secretary of State and the Issuer's Secretary.

28.  Certificate of Good Standing of the Issuer, certified as of a recent date
     by the Colorado Secretary of State.

29.  Certified Copy of Bylaws of the Issuer.

30.  Issuer's Certificate.

31.  Tax Certificate.

32.  Title Commitment.


                                     13
<PAGE>

33.  Title Policy.

34.  Specimen Bond.

35.  Issuer's Bond Resolution.

36.  IRS Form 8038-G.

37.  Phase 1 Survey.

38.  Resolution of District No. 5 approving Creation of Issuer, Issuance of
     Bonds and authorization of necessary documents.

39.  Resolution of District No. 5 approving Recreational Facilities Agreement.

40.  Certificate of District No. 5 Officers.

41.  Resolution of District No. 1 approving necessary documents.

42.  Resolution of District No. 1 approving Recreational Facilities Agreement.

43.  Certificate of District No. 1 Officers.

44.  Resolution of District No. 2 approving necessary documents.

45.  Resolution of District No. 2 approving Recreational Facilities Agreement.

46.  Certificate of District No. 2 Officers.

47.  Resolution of District No. 3 approving necessary documents.

48.  Resolution of District No. 3 approving Recreational Facilities Agreement.

49.  Certificate of District No. 3 Officers.

50.  Resolution of District No. 4 approving necessary documents.

51.  Resolution of District No. 4 approving Recreational Facilities Agreement.

52.  Certificate of District No. 4 Officers.

53.  Feasibility Study.


                                     14
<PAGE>

54.  Appraisal.

55.  Property Survey.

56.  Request and Authorization of Delivery.

57.  Consent of Appraiser.

58.  Consent of Feasibility Consultant.

59.  Rating Letter of Standard & Poor's.

60.  DTC Blanket Issuer Letter of Representation.

61.  Notice of Claim for Exemption filed with Colorado Securities Commission.

62.  Notice of Special District Authorization or Issuance of General Obligation
     Indebtedness for District Nos. 1 through 5 filed with County Clerk and
     State Division of Local Government.

63.  Blue Sky Survey.

64.  Certificate of Credit Enhancement Provider as to the Collateral.

65.  Closing Receipt.

66.  Opinion of Bond Counsel (including Colorado state income tax exemption).

67.  Supplemental Opinion of Bond Counsel.

68.  Opinion of Special Tax Counsel.

69.  Supplemental Opinion of Special Tax Counsel.

70.  Opinion of Counsel to Districts.

71.  Opinion of Underwriter's Counsel.

72.  Preference Opinion of Underwriter's Counsel.

73.  Opinion of Counsel to Credit Enhancement Provider.

74.  Opinion of Counsel to Trustee.


                                     15
<PAGE>

75.  Certificate and Receipt of Bond Trustee.

76.  Certificate of RENEC Trustee.






                                     16

<PAGE>


 
                                                                  APPENDIX A
THE BONDS

1.        Principal Amount: $66,975,000
2.        Dated Date: March 1, 1996
3.        Maturity Schedule:

     Maturity Date                    Coupon     Reoffering
     (December 1)     Par Amount       Rate        Yield
     ------------     ----------       ----        -----

     1999              $1,980,000      5.75%       4.75%
     2000               2,095,000      5.75        4.95
     2001               2,215,000      5.75        5.15
     2002               2,340,000      5.75        5.30
     2003               2,475,000      5.90        5.40
     2004               2,620,000      6.00        5.50
     2005               2,780,000      6.10        5.60
     2006               2,950,000      5.70        5.70
     2007               3,115,000      6.30        5.80
     2008               3,310,000      6.40        5.90
     2009               3,525,000      6.50        6.00


$7,750,000 6.375% Term Bonds due December 1, 2011 at 6.15% 
$29,820,000 6.25% Term Bonds due December 1, 2017 at 6.35% 


4.        Redemption Provisions:

MANDATORY SINKING FUND REDEMPTION.  The Bonds maturing December 1, 2011 and
December 1, 2017 shall be subject to mandatory sinking fund redemption at a
redemption price of 100% of the principal amount thereof, plus accrued interest
to the date fixed for redemption, on December I of each of the years and in the
principal amounts set forth below:

     Bonds Maturing, December 1, 2011    Bonds Maturing December 1, 2017
     --------------------------------    -------------------------------
            Year      Amount                    Year      Amount

            2010    $3,755,000                  2012    $4,250,000
            2011*    3,995,000                  2013     4,515,000
                                                2014     4,795,000
                                                2015     5,095,000
                                                2016     5,415,000
                                                2017*    5,750,000

                                   17
<PAGE>

- -----------------
* Stated Maturity 


                                   18

<PAGE>

The Bonds to be redeemed will be selected by the Trustee by lot.

EXTRAORDINARY MANDATORY REDEMPTION.  The Bonds are subject to extraordinary 
mandatory redemption in whole at a redemption price of 100% of the principal 
amount thereof plus accrued interest to the date fixed for redemption from 
proceeds of prepayment of the Collateral.




                                   19

<PAGE>


                          CERTIFICATE OF INCORPORATION

                                       OF

                               BFC GUARANTY CORP.


     FIRST: The name of the corporation is BFC Guaranty Corp.

     SECOND: The address of its registered office in the State of Delaware is
1209 Orange Street, Wilmington, County of New Castle, Delaware 19801.  The name
of its registered agent at such address is The Corporation Trust Company.

     THIRD: The nature of the business of the Corporation and the purposes to be
promoted or carried on by it are as follows:

     To engage solely in the following activities:

          (a)  providing credit enhancement for the Castle Rock Ranch Public
     Improvement Authority, Public Facilities Revenue Bonds, Series 1996 (the
     "Bonds"), acquiring, assets in connection with the provision of credit
     enhancement for the Bonds and entering into documents related thereto; and

          (b) any lawful act or activity for which corporations may be organized
     under the General Corporation Law of the State of Delaware, so long as the
     same are necessary, appropriate, suitable or convenient to accomplish the
     objects or purposes specified in subparagraph (a) of this Article THIRD.

     FOURTH: The total number of shares of all classes of stock that the
Corporation is authorized to issue is 1,500 shares of Common Stock, all of which
are without par value.

     FIFTH: The name and address of the incorporator is as follows:

     Name                                         Address
     ----                                         -------

A. S. Gardner                                     1209 Orange Street
                                                  Wilmington, Delaware 19801

     SIXTH: The number of directors constituting the initial Board  of
Directors is three (3), and the names of the persons who are to serve as
directors until the first annual meeting of the shareholders or until their
successors are elected and qualified are:

<PAGE>


                                    DIRECTORS


     Franklin L. Haney   605 Chestnut Street, Suite 200, Chattanooga, TN 37450
     Emeline W. Haney    605 Chestnut Street, Suite 200, Chattanooga, TN 37450
     Chris E. Zahnd      611 North Bragg Avenue, Lookout Mountain, TN 37350

     The number of the directors of the Corporation shall be fixed by the
bylaws, but in the absence of a bylaw fixing the number of directors, then the
number of the directors of the Corporation shall be three (3).  The board of
directors is expressly authorized to adopt, amend or repeal the by-laws of the
Corporation.

     SEVENTH: Elections of directors need not be by written ballot unless the
by-laws of the Corporation shall so provide.

     EIGHTH: The books of the Corporation may be kept at such place within or
without the State of Delaware as the by-laws of the Corporation may provide or
as may be designated from time to time by the board of directors.

     NINTH: Meetings of stockholders may be held within or without the State of
Delaware, as the by-laws may provide

     TENTH: So long as any Bonds of the Corporation, but excluding any 
indebtedness described in the exception clause at the end of Article ELEVENTH, 
are outstanding and for a period of 367 days immediately following such time 
as no Bonds are outstanding (any such period, a "Preference Period"), the 
Corporation shall have not less than one Independent Director.  An Independent 
Director shall be an individual who is not at the time of such individual's 
appointment as director of the Corporation, and has not been at any time 
during the preceding five years, and does not become subsequently while a 
Director, (a) a direct or indirect legal or beneficial owner in such entity or 
any of its affiliates, (b) a creditor, supplier, employee, officer, director 
(other than during such individual's tenure as director of the relevant 
entity), family member, manager or contractor of such entity or any of its 
affiliates, or (c) a person who controls (whether directly, indirectly or 
otherwise) such entity or its affiliates or any creditor, supplier, employee, 
officer, director, manager or contractor of such entity or its affiliates.  As 
used herein, the term "affiliate" means any person controlling, under common 
control with, or controlled by the person in question, and the term "control" 
means the possession, directly or indirectly, of the power to direct or the 
cause the direction of the management and policies of a person, whether 
through ownership or voting securities, by contract or otherwise.  If an 
Independent Director resigns, dies or becomes incapacitated, or such position 
is otherwise vacant and there is then no Independent Director, no action 
requiring the unanimous affirmative vote of the board of directors shall be 
taken until a successor Independent Director is elected and qualified and 
approves such action.  In the event of the death, incapacity, or resignation 
of the Independent Director, or a vacancy for any other reason, a successor, 
Independent Director shall be appointed by the remaining directors.  Chris E. 
Zahnd shall serve as the initial Independent Director.

                                        2

<PAGE>


      ELEVENTH: So long as any Bonds remain outstanding and for a Preference
Period immediately following such time as no Bonds are outstanding, the
Corporation shall not incur any indebtedness, except indebtedness represented by
an invoice, statement of account, check, work request, purchase order or other
similar document representing expenses relating to activities of the Corporation
undertaken in accordance with the THIRD Article of this Certificate of
Incorporation.

      TWELFTH: So long as any Bonds remain outstanding and for a Preference
Period immediately following such time as no Bonds are outstanding, the
Corporation shall not transfer to any person or entity any assets of the
Corporation, except that the Corporation may pay expenses that in the ordinary
course of its business undertaken in accordance with the THIRD Article of this
Certificate of Incorporation and may declare and pay cash dividends to its
stockholders in accordance with the General Corporation Law of the State of
Delaware to the extent that unencumbered funds are available therefor.

     THIRTEENTH: So long as any Bonds remain outstanding and for a Preference
Period immediately following such time as no Bonds are outstanding, the
Corporation shall not take any action to dissolve or liquidate the Corporation.

     FOURTEENTH: So long as any Bonds remain outstanding and for a Preference
Period immediately following such time as no Bonds are outstanding the
Corporation shall not amend, alter or repeal any provision of this Certificate
of Incorporation.

     FIFTEENTH: So long as any Bonds remain outstanding and for a Preference
Period immediately following such time as no Bonds are outstanding: (a) the
fiduciary duty of the directors of the Corporation shall not include a duty to:
(i) institute proceedings to have the Corporation adjudicated a bankrupt or
insolvent; (ii) consent to the institution of bankruptcy or insolvency
proceedings against the Corporation; (iii) file a petition or consent to a
petition seeking reorganization or relief on behalf of the Corporation under any
applicable federal or state law relating to bankruptcy; (iv) consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or any
similar official) of the Corporation or a substantial portion of its property;
(v) make any assignment for the benefit of the Corporation's creditors; (vi)
cause the Corporation to admit in writing its inability to pay its debts
generally as they become due; or (vii) take any action, or cause the Corporation
to take any action, in furtherance of any of the foregoing (any of the above
foregoing actions, a "Bankruptcy Action"); and (b) the Corporation shall not
take any Bankruptcy Action without the unanimous affirmative vote of the board
of directors.  No director or officer of the Corporation shall be liable to the
Corporation or any stockholder on account of such director's or officer's good
faith reliance on the provisions of this Article FIFTEENTH and neither the
Corporation nor any stockholder of the Corporation shall have any claim for
breach of fiduciary duty or otherwise against any director or officer for
failing to take any Bankruptcy Action.

      SIXTEENTH: So long as any Bonds remain outstanding and for a Preference
Period immediately following such time as no Bonds are outstanding, the
Corporation shall not

                                        3


<PAGE>

consolidate, merge or enter into any form of combination with or into any 
other entity, nor convey, transfer or lease its assets substantially as an 
entirety to any entity, nor permit any entity to consolidate, merge or enter 
into any form of combination with or into the Corporation, nor convey, 
transfer or lease its assets substantially as an entirety to any person.

     SEVENTEENTH: So long as any Bonds remain outstanding and for a Preference
Period immediately following such time as no Bonds are outstanding,

          (a)  The Corporation shall not commingle its funds and other assets
     with those of any other individual, corporation, estate, partnership, joint
     venture, association, joint stock company, trust, unincorporated
     organization, or government or any agency or political subdivision thereof;

          (b)  The Corporation shall not guarantee or become obligated for the
     debts of any other entity and shall not hold itself out as being liable for
     the debts of any other party,


          (c)  The Corporation shall not form, or cause to be formed, any
     subsidiaries or acquire any interest as a general or limited partner in any
     partnership;

          (d)  The Corporation shall act solely in its corporate name and
     through its duly authorized officers or agents in the conduct of its
     business, and shall conduct its business so as not to mislead others as to
     the identity of the entity with which they are concerned, and correct any
     known misunderstanding regarding its separate identity;

          (e)  The Corporation shall maintain corporate records and books of
     account and shall not commingle its corporate records and books of account
     with the corporate records and books of account of any other corporation;

          (f) The Corporation shall maintain a separate business office and
     telephone number from each of its affiliates;

          (g) The Corporation shall maintain its accounts separate from any
     other person or entity;

          (h) Other than as provided herein in Article THIRD, the Corporation
     will not pledge its assets for the benefit of any other entity or make any
     loans or advances to any entity;

          (i) The Corporation shall maintain an arm's-length relationship with
     its affiliates;

          (j) The Corporation shall pay the salaries of its own employees and
     maintain a sufficient number of employees in light of its contemplated
     business operations;

                                           4

<PAGE>


          (k) The Corporation shall not acquire obligations or securities of its
     partners, members or shareholders;

          (l) The Corporation shall allocate fairly and reasonably any overhead
     for shared office space;

          (m) The Corporation shall use separate stationery, invoices and
     checks;

          (n) The Corporation shall hold itself out as a separate entity;

          (o) The Corporation shall maintain adequate capital in light of its
     contemplated business operations; and

          (p) The Corporation shall maintain separate financial statements.

     EIGHTEENTH: A director of the Corporation shall not be personally liable 
to the Corporation or its stockholders for monetary damages for breach of 
fiduciary duty as a director, except for liability (a) for any breach of the 
director's duty of loyalty to the Corporation or its stockholders, (b) for 
acts or omissions not in good faith or which involve intentional misconduct or 
a knowing violation of law, (c) under Section 174 of the General Corporation 
Law of Delaware, or (d) for any transaction from which the director derived an 
improper personal benefit.  In addition to and not in limitation of the 
foregoing, a director of the Corporation shall not be liable to the 
Corporation or its stockholders for monetary damages for breach of fiduciary 
duty as a director to the fullest extent provided by the General Corporation 
Law of Delaware as the same may hereafter be amended.

     NINETEENTH: The Directors of the Corporation are required to consider the
interests of the creditors of the Corporation, including the Bondholders, in
connection with all corporate actions.

     TWENTIETH:  The duration of the Corporation shall be perpetual.

                                        5

<PAGE>


     IN WITNESS WHEREOF, the undersigned, being the incorporator herein before
named, has executed, signed and acknowledged this Certificate of Incorporation
for BFC Guaranty Corp. on the date set forth below.

Dated: March 19, 1996
      ---------------

                                            By:/s/ A. S. Gardner
                                               ----------------------
                                                   A. S. Gardner
                                                   Incorporator



<PAGE>


                                    BYLAWS OF

                               BFC GUARANTY CORP.


                                    ARTICLE I

                                     OFFICES

     The principal office of the Corporation shall be established and maintained
at 1455 Pennsylvania Avenue, N.W., Suite 230, Washington, D.C. 20004.  The
Corporation may also have offices at such places within or without the State of
Delaware as the Board of Directors (the "Board") may from time to time
establish.

                                   ARTICLE II

                                  STOCKHOLDERS

     1.  PLACE OF MEETINGS

     Meetings of the stockholders shall be held at the principal office of the
Corporation or at such place within or without the State of Delaware as the
Board shall authorize.

     2.  ANNUAL MEETING

     The annual meeting of stockholders shall be held on the 30th day of 
March, at 2:00 p.m. in each year; however, if such day falls on a Sunday or a 
legal  holiday, then on the next business day following at the same time, 
the stockholders shall elect a Board and transact such other business as may 
properly come before the meeting.

     3.  SPECIAL MEETINGS

     Special meetings of the stockholders may be called by the Board or by the
president or at the written request of stockholders owning a majority of the
stock entitled to vote at such meeting.  A meeting requested by the stockholders
shall be called for a date not less than ten nor more than sixty days after a
request is made.  The secretary shall issue the call for the meeting unless the
president, the Board or the stockholders shall designate another to make said
call.

     4.  NOTICE OF MEETINGS

     Written Notice of each meeting of stockholders shall state the purpose of
the meeting and the time and place of the meeting.  Notice shall be mailed to
each stockholder having the right and entitled to vote at such meetings, at his
last address as it appears on the records of the


<PAGE>


Corporation, not less than ten nor more than sixty days before the date set for
such meeting. Such notice shall be sufficient for the meeting and any
adjournment thereof.  If any stockholder shall transfer his stock after notice,
it shall not be necessary to notify the transferee.  Any stockholder may waive
notice of any meeting either before, during or after the meeting.

     5.  RECORD DATE

     The Board may fix a record date which shall not be more than sixty days and
not less than ten days prior to the date set for a meeting of stockholders as
the date as of which the stockholders of record who have the right to and are
entitled to notice of and to vote at such meeting and any adjournment thereof
shall be determined.  Notice that such date has been fixed may be published in
the city, town or county where the principal office of the Corporation is
located and in each city or town where a transfer agent of the stock of the
Corporation is located.

     6.  VOTING


     Every stockholder shall be entitled at each meeting and upon each proposal
presented at each meeting to one vote for each share of voting stock recorded in
his name on the books of the Corporation on the record date as fixed by the
Board.  If no record date was fixed, on the date of the meeting the book of
records of stockholders shall be produced at the meeting upon the request of any
stockholder.  Upon demand of any stockholder, the vote for Directors and the
vote upon any question before the meeting shall be by ballot.  All elections for
Directors shall be decided by plurality vote; all other questions shall be
decided by majority vote.

     7.  QUORUM

     The presence, in person or by proxy, of stockholders holding a majority of
the stock of the Corporation entitled to vote shall constitute a quorum at all
meetings of the stockholders.  In case a quorum shall not be present at any
meeting, a majority in interest of the stockholders entitled to vote thereat
present in person or by proxy shall have power to adjourn the meeting from time
to time, without notice other than announcement at the meeting, until the
requisite amount of stock entitled to vote shall be present.  At any such
adjourned meeting at which the requisite amount of stock entitled to vote be
represented, any business may be transacted which might have been transacted at
the meeting as originally noticed; but only those stockholders entitled to vote
at the meeting as originally noticed shall be entitled to vote at any
adjournment or adjournments thereof.

     8.  PROXIES

     At  any  stockholders' meeting or any adjournment thereof, any stockholder
of record having the right and entitled to vote thereat may be represented  and
vote by proxy appointed in a written instrument.  No such proxy shall be voted
after three years from the date of the instrument unless the instrument provides
for a longer period.  In the event that any such


                                        2

<PAGE>


instrument provides for two or more persons to act as proxies, a majority of
such persons present at the meeting, or if only one be present, that one, shall
have all the powers conferred by the instrument upon all persons so designated
unless the instrument shall otherwise provide.

     9.  STOCKHOLDER LIST

     After fixing a record date for a meeting, the Corporation shall prepare an
alphabetical list of the names of all its shareholders who are entitled to
notice of a shareholders' meeting.  Such list shall be arranged by voting group
with the names and addresses of, and the number and class and series if any, of
shares held by each.  This list shall be available for inspection by any
shareholder for a period of ten days prior to the meeting.

                                   ARTICLE III

                                    DIRECTORS



     1.  BOARD

     The business of the Corporation shall be managed and its corporate powers
exercised by a Board of three Directors each of whom shall be of full age. It
shall not be necessary for Directors to be stockholders.

     2.  ELECTION AND TERM OF DIRECTORS

     Directors shall be elected at the annual meeting of stockholders and each
Director elected shall hold office until his successor has been elected and
qualified, or until the Director's prior resignation or removal.

     3.  VACANCIES

     If the office of any Director, member of a committee or other office
becomes vacant, the remaining Directors in office, by a majority vote, may
appoint any qualified person to fill such vacancy, who shall hold office for the
unexpired term and until a successor shall be duly chosen.

     4.  REMOVAL OF DIRECTORS

     Any or all of the Directors may be removed with or without cause by vote of
a majority of all the stock outstanding and entitled to vote at a special
meeting of stockholders called for that purpose.

     5.  NEWLY CREATED DIRECTORSHIPS

     The number of Directors may be increased by amendment of these Bylaws by
the affirmative vote of a majority of the Directors, though less than a quorum,
or by the affirmative

                                        3

<PAGE>


vote of a majority in interest of the stockholders at the annual meeting or at a
special meeting called for that purpose, and by like vote the additional
Directors may be chosen at such meeting to hold office until the next annual
election and until their successors are elected and qualify.

     6.  RESIGNATION

     A Director may resign at any time by giving written notice to the Board,
the president or the secretary of the Corporation.  Unless otherwise specified
in the notice, the resignation shall take effect upon receipt thereof by the
Board or such officer, and the acceptance of the resignation shall not be
necessary to make it effective.

     7.  QUORUM OF DIRECTORS

     A majority of the Directors shall constitute a quorum for the transaction
of business.  If at any meeting of the Board there shall be less than a quorum
present, a majority of those present may adjourn the meeting until a quorum is
obtained and no further notice thereof need be given other than by announcement
at the meeting which shall be so adjourned.

     8.  PLACE AND TIME OF BOARD MEETINGS

     The Board may hold its meetings at the office of the Corporation or at such
other places either within or without the State of Delaware as it may from time
to time determine.

     9.  REGULAR ANNUAL MEETING

     A regular annual meeting of the Board shall be held immediately following
the annual meeting of the stockholders at the place of such annual meeting of
stockholders.

     10.  NOTICE OF MEETINGS OF THE BOARD

     Regular meetings of the Board may be held without notice at such time and
place as it shall from time to time determine.  Special meetings of the Board
shall be held upon notice to the Directors and may be called by the president
upon three days' notice to each Director either personally or by mail or by
wire; special meetings shall be called by the president or by the secretary in a
like manner on written request of two Directors.  Notice of a meeting need not
be given to any Director who submits a Waiver of Notice whether before or after
the meeting, or who attends the meeting without protesting, prior thereto or  at
its commencement, the lack of notice to him.

     11.  EXECUTIVE AND OTHER COMMITTEES

     The Board, by resolution, may designate two or more of their number to one
or more committees, which, to the extent provided in said resolution or these
Bylaws, may exercise the powers of the Board in the management of the business
of the Corporation.


                                     4


<PAGE>


     12.  COMPENSATION

     No compensation shall be paid to Directors as such for their services, but
by resolution of the Board a fixed sum and expenses for actual attendance at
each regular or special meeting of the Board may be authorized.  Nothing herein
contained shall be construed to preclude any Director from serving the
Corporation in any other capacity and receiving compensation therefor.

                                   ARTICLE IV

                                    OFFICERS

     1.  OFFICERS, ELECTION AND TERM

     A.  The Board may elect or appoint a chairman, a president, one or more
vice-presidents, a secretary, an assistant secretary, a treasurer and an
assistant treasurer and such other officers as it may determine who shall have
duties and powers as hereinafter provided.

     B.  All officers shall be elected or appointed to hold office until the
meeting of the Board following the next annual meeting of stockholders and
until their successors have been elected or appointed and qualified.

     2.  REMOVAL, RESIGNATION, SALARY, ETC.

     A.  Any officer elected or appointed by the Board may be removed by the
Board with or without cause.

     B.  In the event of the death, resignation or removal of an officer, the
Board in its discretion may elect or appoint a successor to fill the unexpired
term.

     C.  Any two or more offices may be held by the same person.

     D.  The salaries of all officers shall be fixed by the Board.

     E.  The Directors may require any officer to give security for the faithful
performance of his duties.

     3.  CHAIRMAN

     The chairman of the Board, if one be elected, shall preside at all meetings
of the Board and shall have and perform such other duties from time to time as
may be assigned to him or her by the Board or the executive committee.

     4.  PRESIDENT

                                        5
<PAGE>


      The president shall be the chief executive officer of the Corporation and
shall have the general powers and duties of supervision and management usually
vested in the office of the president of the Corporation.  The president shall
preside at all meetings of the stockholders if present thereat, and in the
absence or non-election of the chairman of the Board, at all meetings of the
Board, and shall have general supervision, direction and control of the business
of the Corporation.  Except as the Board shall authorize the execution thereof
in some other manner, the president shall execute bonds, mortgages and other
contracts on behalf of the Corporation and shall cause the seal to be affixed to
any instrument requiring it and when so affixed, the seal shall be attested by
the signature of the secretary or the treasurer or an assistant secretary or an
assistant treasurer.

     5.  VICE-PRESIDENTS

     During the absence or disability of the president, the vice-president, or
if there be more than one, the executive vice-president, shall have all the
powers and functions of the president.  Each vice-president shall perform such
other duties as the Board shall prescribe.

     6.  SECRETARY

     The secretary shall attend all meetings of the Board and of the
stockholders, record all votes and minutes of all proceedings in a book to be
kept for that purpose, give or cause to be given notice of all meetings of
stockholders and of meetings and special meetings of the Board, keep in safe
custody the seal of the Corporation and affix it to any instrument when
authorized by the Board or the president, when required, prepare or cause to be
prepared and available at each meeting of stockholders a certified list in
alphabetical order of the names of stockholders entitled to vote thereat,
indicating the number of shares of each respective class held by each, keep all
the documents and records of the Corporation as required by law or otherwise in
a proper and safe manner, and perform such other duties as may be prescribed by
the Board or assigned by the president.

     7.  ASSISTANT-SECRETARIES

     During the absence or disability of the secretary, the assistant-secretary,
or if there are more than one, the one so designated by the secretary or by the
Board, shall have all the powers and functions of the secretary.

     8.  TREASURER

     The treasurer shall have the custody of the corporate funds and 
securities, keep full and accurate accounts of receipts and disbursements in 
the corporate books, deposit all money and other valuables in the name and to 
the credit of the Corporation in such depositories as may be designated by the 
Board, disburse the funds of the Corporation as may be ordered or authorized 
by the Board and preserve proper vouchers for such disbursements, and render 
to the president and Board at the regular meetings of the Board, or whenever 
they require it, an account of all

                                      6

<PAGE>


the transactions made as treasurer and of the financial condition of the
Corporation.  The treasurer shall also render a full financial report at the
annual meeting of the stockholders if so requested, be furnished by all
corporate officers and agents if requested with such reports and statements as
may be required as to all financial transactions of the Corporation, and perform
such other duties as are designated by these Bylaws or as from time to time are
assigned by the Board.

     9.  ASSISTANT-TREASURERS

     During the absence or disability of the treasurer, the assistant-treasurer,
or if there be more than one, the one so designated by the treasurer or the
Board, shall have all the powers and functions of the treasurer.

     10. SURETIES AND BONDS

     In case the Board shall so require, any officer or agent of the Corporation
shall execute to the Corporation a bond in such sum and with such surety or
sureties as the Board may direct, conditioned upon the faithful performance of
duties to the Corporation and including responsibility for negligence and for
the accounting of all property, funds or securities of the Corporation which the
officer or agent may be responsible for.

                                    ARTICLE V

                             CERTIFICATES FOR SHARES

     1. CERTIFICATES

     The shares of the Corporation shall be represented by certificates.  They
shall be numbered and entered in the books of the Corporation as they are
issued.  They shall exhibit the holder's name, the number of shares and shall be
signed by the president and secretary and shall bear the corporate seal.  When
such certificates are signed by the transfer agent or an assistant transfer
agent or by a transfer clerk acting on behalf of the Corporation and a
registrar, the signatures of such officers may be facsimiles.

     2.  LOST OR DESTROYED CERTIFICATES

     The Board may direct a new certificate or certificates to be issued in
place of any certificates theretofore issued by the Corporation alleged to have
been lost or destroyed, upon the making of an affidavit of that fact by the
person claiming the certificate to be lost or destroyed.  When authorizing such
issue of a new certificate or certificates, the Board may, in its discretion as
a condition preceding the issuance thereof, require the owner of such lost or
destroyed certificate or certificates, or the owner's legal representative, to
advertise the same in such manner as it shall require and/or give the
Corporation a bond in such sum and with such


                                        7

<PAGE>


surety or sureties as it may direct as indemnity against any claim that may be
made against the Corporation with respect to the certificate alleged to have
been lost or destroyed.

     3.  TRANSFER OF SHARES

     Upon surrender to the Corporation or the transfer agent of the Corporation
of a certificate for shares duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, it shall be the duty of the
Corporation to issue a new certificate to the person entitled thereto, and
cancel the old certificate; every such transfer shall be entered on the transfer
book of the Corporation which shall be kept at its principal office.  Whenever a
transfer shall be made for collateral security, and not absolutely, it shall be
so expressed in the entry of the transfer ledger.  No transfer shall be made
within ten days next preceding the annual meeting of the stockholders.

     4. CLOSING TRANSFER BOOKS

     The Board shall have the power to close the share transfer books of the
Corporation for a period of not more than ten days during the thirty-day period
immediately preceding (a) any stockholder's meeting, or (b) any date upon which
stockholders shall be called upon to or have a right to take action without a
meeting, or (c) any date fixed for the payment of a dividend or any other form
of distribution, and only those stockholders of record at the time the transfer
books are closed shall be recognized as such for the purpose of (a) receiving
notice of or voting at such meeting or (b) allowing them to take appropriate
action, or (c) entitling them to receive any dividend or other form of
distribution.

                                   ARTICLE VI

                                    DIVIDENDS

     The Board may out of funds legally available, at any regular or special
meeting, declare dividends upon the capital stock of the Corporation as and when
it deems expedient.  Before declaring any dividend there may be set apart out of
any funds of the Corporation available for dividends such sum or sums as the
Board from time to time in its discretion deems proper for working capital or as
a reserve fund to meet  contingencies  or  for  equalizing  dividends  or  for
such other purposes as the Board shall deem conducive to the interest of the
Corporation.

                                   ARTICLE VII

                                 CORPORATE SEAL

     The seal of the corporation shall be circular in form and bear the name of
the Corporation, the year of its organization and the words "CORPORATE SEAL,
DELAWARE".  The seal may be used by causing it to be impressed directly on the
instrument or writing to be


                                        8
<PAGE>

sealed, or upon an adhesive substance affixed thereto.  The  on the certificates
for shares or on any corporate obligation for the payment of money may be
facsimile, engraved or printed.

                                  ARTICLE VIII

                            EXECUTION OF INSTRUMENTS

     All corporate instruments and documents shall be signed or countersigned,
executed, verified or acknowledged by such officer or officers or other person
or persons as the Board may from time to time designate.

     All checks, drafts or other orders for the payment of money, notes or other
evidences of indebtedness issued in the name of the Corporation shall be signed
by such officer or officers, agent or agents of the Corporation, and in such
manner as shall be determined from time to time by resolution of the Board.

                                   ARTICLE IX

                                   FISCAL YEAR

       The fiscal year shall begin on the first day of each calendar year.

                                    ARTICLE X

                           NOTICE AND WAIVER OF NOTICE

     Whenever any notice is required by these Bylaws to be given, personal
notice is not meant unless expressly so stated, and any notice so required shall
be deemed to be sufficient if given by depositing the same in a post office box
in a sealed postage-paid wrapper, addressed to the person entitled thereto at
the last known post office address, and such notice shall be deemed to have been
given on the day of such mailing.  Stockholders not entitled to vote shall not
be entitled to receive notice of any meetings except as otherwise provided by
Statute.

     Whenever any notice whatever is required to be given under the provisions
of any law, or under the provisions of the Certificate of Incorporation of the
Corporation or these Bylaws, a waiver thereof in writing, signed by the person
or persons entitled to said notice, whether before or after the time stated
therein, shall be deemed equivalent thereto.

                                   ARTICLE XI

                                  CONSTRUCTION

     Whenever a conflict arises between the language of these Bylaws and the
Certificate of Incorporation, the Certificate of Incorporation shall govern.



                                        9

<PAGE>
                                   ARTICLE XII

                                CLOSE CORPORATION

     1. CONDUCT OF BUSINESS WITHOUT MEETINGS

     Any action of the stockholders, Directors or committee may be taken without
a meeting if consent in writing, setting forth the action so taken, shall be
signed by all persons who would be entitled to vote on such action at a meeting
and filed with the secretary of the Corporation as art of the proceedings of the
stockholders, Directors or committees, as the case may be.

     2. MANAGEMENT BY STOCKHOLDERS

     In the event the stockholders are named in the Certificate of Incorporation
and are empowered therein to manage the affairs of the Corporation in lieu of
Directors, the stockholders of the Corporation shall be deemed Directors for the
purposes of these Bylaws and wherever the words "Directors" or "Board" appear in
these Bylaws those words shall be taken to mean stockholders.

     The stockholders may, by majority vote, create a Board to manage the
business of the Corporation and exercise its corporate powers.

                                  ARTICLE XIII

                                   AMENDMENTS

     These Bylaws may be altered or repealed and bylaws may be made at any
annual meeting of the stockholders or at any special meeting thereof if notice
of the proposed alteration or repeal to be made contained in the notice of such
special meeting, by the affirmative vote of a majority of the stock issued and
outstanding and entitled to vote thereat, or by the affirmative vote of a
majority of the Board at any regular meeting of the Board or at any special
meeting of the Board if notice of the proposed alteration or  to be made is
contained in the notice of such special meeting.

                                   ARTICLE XIV

                                EMERGENCY BYLAWS

     1.  CONDUCT OF BUSINESS WITHOUT MEETINGS

     Pursuant to Chapter 1 of Title 8 of Delaware Code, Annotated, the
Corporation adopts the following Bylaws, which shall be effective only if a
quorum of the Directors of the Corporation cannot be readily assembled because
of some catastrophic event.


                                      10
<PAGE>

     2.  CALLING A MEETING

     In the event of such catastrophic event, any member of the Board shall be
authorized to call a meeting of the Board. Such member calling an emergency
shall use any means of communication at his disposal to notify all other members
of the Board of such meeting.

     3.  QUORUM

     Any one member of the Board shall constitute a quorum of the Board. The
members of the Board meeting, during an emergency may select any person or
persons as additional Board members, officers or agents of the Corporation.

     4.  INDEMNIFICATION

     The members of such emergency Board are authorized to utilize any means at
their disposal to preserve and protect the assets of the Corporation. Any action
taken in good faith and acted upon in accordance with these Bylaws shall bind
the Corporation; and the Corporation shall hold harmless any Director, officer,
employee or agent who undertakes an action pursuant to these Bylaws.

     5.  TERMINATION OF EMERGENCY BYLAWS

     These emergency Bylaws shall not be effective at the end of the emergency
period.

                                       11







<PAGE>

                          ARTICLES OF INCORPORATION

                                     OF

                CASTLE ROCK RANCH PUBLIC IMPROVEMENTS AUTHORITY

          THE UNDERSIGNED ADULT NATURAL PERSON, ACTING AS INCORPORATOR, HEREBY
ESTABLISHES A NONPROFIT CORPORATION PURSUANT TO THE COLORADO NONPROFIT
CORPORATION ACT AND ADOPTS THE FOLLOWING ARTICLES OF INCORPORATION:

          FIRST:    NAME.  The name of the corporation is Castle Rock Ranch
Public Improvements Authority.

          SECOND:   DURATION.  The corporation shall have perpetual existence.

          THIRD:    (a)  PURPOSES.  The corporation is organized and shall be
operated exclusively on behalf of and for the benefit and in furtherance of the
purposes of Dawson Ridge Metropolitan District No. 5 (the "District") and the
inhabitants thereof.  All monies realized by the corporation shall be used
exclusively for the operation, maintenance and development of property of the
corporation, including payment of obligations of the corporation in connection
therewith, which property shall be used to provide public facilities. Any such
property shall be located within the District or have a substantial connection
therewith.

                    (b)  POWERS.  In furtherance of the foregoing purposes and
objectives (but not otherwise) and subject to the restrictions set forth in
section (c) of this article, the corporation shall have and may exercise all of
the powers now or hereafter conferred upon nonprofit corporations organized
under the laws of Colorado and may do everything necessary or convenient for the
accomplishment of any of the corporate purposes, either alone or in connection
with other organizations, entities or individuals, and either as principal or
agent, subject to such limitations as are or may be prescribed by law.
     
                    (c)  RESTRICTIONS ON POWERS.

                         (1)  No part of the net earnings or earnings of the
corporation shall inure to, or to the benefit of or be distributable to, any
director or officer of the corporation, or any other private person (except that
reasonable compensation may be paid for services rendered to or for the benefit
of the corporation affecting one or more of its purposes), and no director or
officer of the corporation, or any other individual, shall be entitled to share
in any distribution of any of the corporate assets on dissolution of the
corporation or otherwise.

                         (2)  No substantial part of the activities of the
corporation shall consist of carrying on propaganda or otherwise attempting to
influence legislation.  The 

<PAGE>

corporation shall not participate or intervene in (including the publishing or 
distribution of statements) any political campaign on behalf of or in 
opposition to any candidate for public office.

                         (3)  All property of the corporation shall be owned 
for the benefit of the District.  Upon dissolution of the corporation, all of 
the corporation's assets remaining after payment of or provision for all of 
its liabilities shall be paid over or transferred to the District.

                         (4)  The corporation at all times shall be one not 
organized for profit.

          FOURTH:   REGISTERED OFFICE AND AGENT.  The address of the initial
registered office of the corporation is 7951 East Maplewood Avenue, Suite 326,
Englewood, Colorado 80111.  The name of its initial registered agent at such
address is Roger Addlesperger.

          FIFTH:    MEMBERS.  The corporation shall have no members. 

          SIXTH:    (a)  BOARD OF DIRECTORS.  The management of the affairs of
the corporation shall be vested in a Board of Directors, except as otherwise
provided in the Colorado Nonprofit Corporation Act, these articles of
incorporation or the bylaws of the corporation.  The number of directors, their
classifications, if any, their terms of office and the manner of their election
or appointment shall be determined according to the bylaws of the corporation
from time to time in force.

                    (b)  LIABILITY OF DIRECTORS.  No director shall be
personally liable to the corporation for monetary damages for any breach of
fiduciary duty as a director, except that the foregoing shall not eliminate or
limit such director's liability to the corporation for monetary damages for the
following:  (1) any breach of such director's duty of loyalty to the
corporation, (2) any of such director's acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (3) acts
specified in C.R.S. Section 7-24-111, as it now exists or hereafter may be
amended (regarding a director's assent to or participation in the making of any
loan by the corporation to any director or officer of the corporation), or (4)
any transaction from which such director derived an improper personal benefit. 
If the Colorado Nonprofit Corporation Act hereafter is amended to authorize the
further elimination or limitation of the liability of directors, then the
liability of a director of the corporation, in addition to the limitation on
personal liability provided herein, shall be further eliminated or limited to
the fullest extent permitted by the Colorado Nonprofit Corporation Act.  Any
repeal or modification of this Article SIXTH (b) shall be prospective only and
shall not adversely affect any right or protection of a director of the
corporation existing at the time of such repeal or modification.

<PAGE>

                    (c)  INITIAL BOARD.  Two directors shall constitute the
initial Board of Directors.  Their names and addresses are as follows:

          Name                     Address
          ----                     -------
          Franklin L. Haney        605 Chestnut Street, Suite 200
                                   Chattanooga, Tennessee 37450

          C. Roger Addlesperger    7951 East Maplewood Avenue, Suite 326
                                   Englewood, Colorado 80111

          SEVENTH:  BYLAWS.  The initial bylaws of the corporation shall be as
adopted by the Board of Directors.  The Board of Directors shall have power to
alter, amend or repeal the bylaws from time to time in force and adopt new
bylaws.  The bylaws of the corporation may contain any provisions for the
regulation or management of the affairs of the corporation that are not
inconsistent with law or these articles of incorporation, as these articles may
from time to time be amended.  However, no bylaw at any time in effect, and no
amendment to these articles, shall have the effect of giving any director or
officer of the corporation any proprietary interest in the corporation's
property or assets, whether during the term of the corporation's existence or as
an incident to its dissolution.

          EIGHTH:   INCORPORATOR.  The name and address of the incorporator is:

               Kent C. Veio, Esq.
               410 17th Street, Suite 2200
               Denver, Colorado  80202


Dated: Feb. 9, 1996


                                       Kent C. Veio
                                       ------------------------------------
                                       Kent C. Veio - Incorporator


<PAGE>

                                  ACKNOWLEDGMENT


STATE OF COLORADO             )
                              )  s.
CITY AND COUNTY OF DENVER     )

          Acknowledged before me this 9th day of February, 1996, by Kent C.
Veio as incorporator.

          Witness my hand and official seal.

          My commission expires     My Commission Expires Nov. 23, 1996
                                    410 17th Street, 22nd Floor
                                    Denver, Colorado 80202


(SEAL)                                 Sheila M. Grisham
                                       ------------------------------------
                                       Notary Public


<PAGE>

 STATE OF COLORADO
DEPARTMENT OF STATE
 I hereby certify that this is a true and
complete copy of the document filed in
this office and admitted to record in
File 961019210
     ------------------------------------

- -----------------------------------------                [SEAL]
DATED APRIL (??), 1996

VICTORIA BUCKLEY
- ------------------------------------------

By [ILLEGIBLE]
   ---------------------------------------


<PAGE>

                            UNANIMOUS WRITTEN CONSENT
                       OF FIRST ORGANIZATIONAL MEETING OF
                             THE BOARD OF DIRECTORS
                                       OF
                 CASTLE ROCK RANCH PUBLIC IMPROVEMENTS AUTHORITY


     The undersigned, constituting all of the duly elected members of the Board
of Directors of Castle Rock Ranch Public Improvements Authority, a Colorado
nonprofit corporation (the "CORPORATION"), do hereby adopt the following
resolutions by unanimous written consent without a meeting, in accordance with
the provisions of Section 7-23-110 of the Colorado Nonprofit  Corporation Act,
effective as of the 1st day of March 1996;


     1.   RESIGNATION OF INCORPORATOR

          WHEREAS there are no further actions necessary to be taken by the
     Incorporator of the Corporation; 

          NOW, THEREFORE, BE IT RESOLVED that all actions of every nature
     shown to have been taken or authorized by the Incorporator are hereby
     ratified, approved and confirmed; and

          RESOLVED FURTHER that the resignation of Kent C. Veio as
     Incorporator of Castle Rock Ranch Public Improvements Authority, a
     Colorado  nonprofit corporation, be, and it hereby is, accepted.

     2.   APPROVAL OF ARTICLES OF INCORPORATION

          WHEREAS, the Articles of Incorporation of the Corporation were
     filed on February 9, 1996, in the office of the Colorado Secretary of
     State;

          NOW, THEREFORE, BE IT RESOLVED that the duly filed Articles of
     Incorporation, a copy of which is attached hereto as Exhibit "A," be,
     and the same hereby is, approved and accepted and that the Secretary
     of the Corporation is hereby directed to insert a copy of the Articles
     of Incorporation, certified by the Secretary of State, into the minute
     book of the Corporation.

<PAGE>

     3.   ADOPTION OF BYLAWS

          NOW, THEREFORE, BE IT RESOLVED that the Board of Directors hereby
     approves and adopts the Bylaws for the regulation and management of
     the Corporation's affairs substantially in the form attached hereto as
     Exhibit "B"; and

          RESOLVED FURTHER that the Secretary is hereby directed to execute
     a certification of the adoption of said Bylaws and to file said Bylaws
     as so certified in the minute book of the Corporation, and to see that
     a copy of said Bylaws, similarly certified, is kept at the principal
     office of the Corporation.

     4.   ELECTION OF OFFICERS

          WHEREAS, it is deemed to be in the best interest of the
     Corporation to elect officers to be in charge of the day-to-day
     operations of the Corporation;

          NOW, THEREFORE, BE IT RESOLVED that the Board of Directors hereby
     duly elects and appoints the following individuals and that each
     person be, and he or she hereby is, elected to the office or offices
     of the Corporation set forth next to his or her name below, and that
     each such person shall serve at the pleasure of the Board:

          C. Roger Addlesperger              President
          Franklin L. Haney                  Secretary
          Franklin L. Haney                  Treasurer 

     5.   ADOPTION OF A CORPORATE SEAL

          WHEREAS, it is deemed to be in the best interest of the
     Corporation to adopt a corporate seal; and

          NOW, THEREFORE, BE IT RESOLVED that the corporate seal consisting
     of concentric circles with the full name of the Corporation, the words
     "Corporate Colorado Seal" in the form, words and figures set forth
     below is hereby adopted as the seal of the Corporation.

     6.   AMORTIZATION OF ORGANIZATIONAL EXPENSES

          WHEREAS, the Board of Directors has reviewed the amortization
     method contrasted with the capitalization method of recovering
     organizational expenditures; and 

          WHEREAS, the adoption of the amortization method may affect tax
     savings and reduce accounting costs;

                                      -2-
<PAGE>

          NOW, THEREFORE, BE IT RESOLVED that the Corporation is hereby
     authorized to adopt a system of amortizing organizational expenditures
     ratably over a period of not less than 60 months in accordance with
     Section 248 of the Internal Revenue Code of 1986, as amended.

     7.   ADOPTION OF FISCAL YEAR

          WHEREAS, it is deemed to be in the best interest of the
     Corporation to adopt a fiscal year for tax and accounting purposes; 

          NOW, THEREFORE, BE IT RESOLVED that the fiscal year of the
     Corporation shall be the year ending December 31; and

          RESOLVED FURTHER that the President is hereby authorized and
     directed to take all necessary steps and to cause all necessary and
     appropriate forms to be filed with the appropriate governmental agency
     to reflect the foregoing selection of fiscal year.

      8.  DESIGNATION OF PRINCIPAL OFFICE

          WHEREAS, it is in the best interest of the Corporation to
     designate a principal office for transacting the business of the
     Corporation;

          NOW, THEREFORE, BE IT RESOLVED that the following address is
     hereby designated as the address of the principal office of the
     Corporation:

                    Stanford Place 3, Suite 902
                    4582 South Ulster Street Parkway
                    Denver, Colorado  80237

     9.   DESIGNATION OF DEPOSITORIES

          WHEREAS, it is deemed to be in the best interest of the
     Corporation to provide for a depository for the funds of the
     Corporation and to authorize certain officers to deal with the
     corporate funds;

          NOW, THEREFORE, BE IT RESOLVED that a depository for funds of the
     Corporation which may, from time to time, be placed in such account or
     accounts as the President, any Vice President or the Secretary may
     from time to time determine should be established for the Corporation;
     and

          RESOLVED FURTHER that the President, any Vice President or the
     Secretary are hereby authorized and directed, in connection with the
     establishment of any accounts, to perform any and all acts that they
     may deem necessary or 

                                      -3-
<PAGE>

     advisable, and to deliver all requisite papers, signature cards, 
     resolutions and the like; and the execution by such officers 
     of any such items or the doing by them of any such act in
     connection with the establishment of such accounts shall conclusively
     establish their authority therefor and the Corporation's approval and
     ratification thereof; and

          RESOLVED FURTHER that, without limiting the generality of the
     power conferred by the foregoing resolution, the Board of Directors
     hereby adopts each and every special resolution in the form prescribed
     by the bank, which it shall deem necessary or desirable to authorize
     the establishment of such accounts as the above officers may from time
     to time determine should be established, and the officers of the
     Corporation are hereby authorized to execute and deliver certificates
     of the adoption of such resolutions as though they were specifically
     adopted by the Board of Directors; and

          RESOLVED FURTHER that the standard form banking resolutions, loan
     documents, guarantees and other applicable documents customarily
     required by any such financial institutions are hereby adopted without
     the necessity of further action by the Board of Directors at the time
     such arrangements are established, except for arrangements obligating
     the Corporation for more than $10,000, in which event separate board
     approval shall be required, it being intended that these resolutions
     constitute specific board authorization, approval and adoption of all
     such arrangements (except for those obligating the Corporation for
     $10,000 or more) at the time such arrangements are established.

     10.  AUTHORIZATION TO OBTAIN ALL NECESSARY LICENSES,
          PERMITS AND APPROVAL TO CONDUCT BUSINESS

          WHEREAS, there may be a number of licenses, permits and approvals
     that the Corporation is required to obtain before it has necessary
     authority for the lawful conduct of its business; 

          NOW, THEREFORE, BE IT RESOLVED, that each and every officer of
     the Corporation is hereby authorized and directed to take all
     necessary or advisable steps to cause the Corporation to become
     lawfully empowered to conduct its business as set forth in the
     Certificate of Incorporation; and

          RESOLVED FURTHER that, without limiting the generality of the
     foregoing, any such officer is hereby specifically authorized and
     directed to cause all necessary applications, fees, bonds and other
     papers, documents and information to be obtained, prepared and filed
     to obtain all permits and licenses necessary or appropriate for the
     conduct of the Corporation's business, and to take all further steps
     that may be appropriate to obtain necessary licenses of authority.

                                      -4-
<PAGE>

     11.  CORPORATE COMPLIANCE

          BE IT RESOLVED that the officers of the Corporation are hereby
     authorized and directed to take any and all actions they shall deem
     necessary or appropriate to insure the good standing status of the
     Corporation under the laws of the State of Colorado, including, but
     not limited to, the filing of the Corporation's annual report of the
     Corporation with the Colorado Secretary of State's office.

     12.  GENERAL AUTHORIZATION

          BE IT RESOLVED that in addition to the specific authorizations
     set forth in any of the foregoing resolutions, the proper officers of
     the Corporation be, and they hereby are, authorized to take from time
     to time any and all such action and to execute and deliver from time
     to time any and all such instruments, requests, receipts, notes,
     applications, reports, certificates and other documents as may be
     necessary or advisable in their opinion, or in the opinion of any of
     them, to effectuate, consummate and comply with the purpose and intent
     of any of the foregoing resolutions.

                                      -5-
<PAGE>


     IN WITNESS WHEREOF, this unanimous written consent has been executed as of
the date stated above.

                                      DIRECTORS:



                                      /s/ Franklin L. Haney
                                      ------------------------------
                                          Franklin L. Haney


                                      /s/ C. Roger Addlesperger
                                      ------------------------------
                                          C. Roger Addlesperger







                                      -6-



<PAGE>

                                   B Y L A W S
                                     OF THE
                 CASTLE ROCK RANCH PUBLIC IMPROVEMENTS AUTHORITY


                       ARTICLE I - OFFICE OF THE AUTHORITY

     The principal office of the Castle Rock Ranch Public Improvements 
Authority (the "Authority") shall be located at 4582 South Ulster Street 
Parkway, Suite 902, Denver, Colorado  80237.

                       ARTICLE II - MEMBERS AND DIRECTORS

     Section 1. DESIGNATION.  The Authority shall be managed by a Board of
Directors, who shall each have one vote in the conduct of the affairs of the
Authority.  There shall not be any members of the Authority.

     The provisions for the appointment or election of Directors, the term of
office thereof, and the provisions for meetings of Directors shall be as
hereafter set forth in Article III relating to Directors.

     Section 2. PROPERTY INTEREST OF MEMBERS AND DIRECTORS.  No Director of 
the Authority shall have any right, title, or interest in or to any real or 
personal property or other assets of the Authority during its existence, or 
upon the dissolution of the Authority.

     Section 3. NON-LIABILITY FOR DEBTS.  The private property of the 
Directors shall be exempt from execution or other liability for any debts of 
the Authority and no Director shall be liable or responsible for the debts or 
liabilities of the Authority.

     Section 4. INDEMNIFICATION OF DIRECTORS AND OFFICERS.  To the extent 
permitted by law, the Authority shall indemnify any Director, officer, or 
former Director or officer, of the Authority, against expenses actually and 
reasonably incurred by him or her in connection with the defense of any 
action, suit, or proceedings, civil or criminal, or for any loss or claim 
resulting from any such action, suit, or proceeding, in which he or she is 
made a party by reason of being or having been a Director or officer, 
including any matter as to which he or she is adjudged in such action, suit, 
or proceeding to be liable for negligence or misconduct in the performance of 
duty to the Authority.
 
     The Authority is authorized to obtain a policy or policies of insurance 
for the purpose of providing such indemnification of the Directors and 
officers of the Authority.

                       ARTICLE III - BOARD OF DIRECTORS

     Section 1. GENERAL POWERS.  The business and affairs of the Authority shall
be managed by a Board of Directors consisting of not less than three and not
more than nine Directors.

<PAGE>

     Section 2. QUALIFICATIONS AND TERM OF OFFICE.  Each Director shall be at 
least eighteen years of age at the time of such appointment as a Director.

     Those Directors who shall constitute the first Board of Directors (as 
set forth in the Articles of Incorporation), shall hold office for the term 
indicated below:

               Directors                          Term Ends
               ---------                          ---------
     Franklin L. Haney                            February, 2000

     C. Roger Addlesperger                        February, 2000

     Each Director shall hold office until his or her successor shall have 
been appointed and qualified.

     All subsequent members of the Board of Directors of the corporation 
shall be appointed by resolution of the Board of Directors of Dawson Ridge 
Metropolitan District No. 5, which resolution shall provide for the term of 
office of such subsequent member of the Board of Directors.

     Section 3. ANNUAL MEETING.  A regular annual meeting of the Directors 
shall be held at the principal place of business, or at such other place as 
the Directors shall determine, on the 2nd day of April at 2:00 p.m. in each 
year, for the purpose of electing officers and appointing Directors and for 
the transaction of such other business as may come before the meeting.  If 
the day fixed for the annual meeting shall be a legal holiday in the State of 
Colorado, the meeting shall be held on the next succeeding business day.

     Section 4. SPECIAL MEETINGS.  Special meetings of the Directors may be 
called by the President or any Director, and it shall then be the duty of the 
Secretary to cause notice of such meeting to be given as hereinafter 
provided. Special meetings may be held at any place within or outside the 
Community.

     Section 5. NOTICE OF MEETINGS.  Written notice of the date, time, and 
place of each special meeting shall be delivered personally or mailed by 
first class United States mail to each Director at least five (5) days prior 
to the date of meeting.  Waiver of the notice of any meeting may be given by 
any Director, either before or after the time of such meeting, and attendance 
at any meeting shall constitute a waiver of the notice of such meeting.

     Section 6. QUORUM.  A majority of the Directors shall constitute a 
quorum for the transaction of business at any meeting, and if less than a 
quorum is present, a majority of those present may adjourn the meeting from 
time to time without further notice.  All resolutions or motions for the 
transaction of the business of the Authority shall require the affirmative 
vote of a majority of the Board of Directors.


                                     2
<PAGE>

     Section 7. VACANCY.  Whenever a vacancy shall occur in the membership of 
the Board of Directors, or whenever the term of office of any Director shall 
cease, such vacancy or vacancies shall be filled by resolution of the then 
existing Board of Directors of the Authority.  A Director appointed to fill a 
vacancy shall be elected for the unexpired term of office so filled.

     Section 8. COMPENSATION.  No Director shall receive any salary or 
compensation for their services nor shall any Director, nor any person from 
whom the Authority may receive any property or funds, receive of the 
Authority any pecuniary profit from the operations of the Authority; provided 
however, that (a) reasonable compensation may be paid to agents and employees 
hired by the Authority for services rendered in effecting one or more 
purposes of the Authority, and (b) any Director may, from time to time, be 
reimbursed for his or her actual and, reasonable expenses incurred in 
connection with the administration of the affairs of the Authority.

     Section 9. CONFLICT OF INTEREST.  No Director shall enter into any 
contract or agreement with the Board in which there exists a conflict of 
interest of such person in his or her capacity as a Director.

                           ARTICLE IV - OFFICERS

     Section 1. OFFICERS.  The officers of the Authority shall be a 
President, a Vice President, a Secretary, and a Treasurer. Any two or more 
offices may be held by the same person, except that the office of the 
President and Secretary shall not be held by the same person.

     Section 2. ELECTION AND TERM OF OFFICE.  The officers of the Authority 
shall be elected annually by the Board of Directors at the regular annual 
meeting of the Board.  Each officer shall hold office until his or her 
successor shall have been duly elected and shall have qualified.

     Section 3. REMOVAL.  Any officer elected by the Board of Directors may 
be removed by a unanimous vote of the remaining Directors.

     Section 4. VACANCY.  A vacancy in any office because of death, 
resignation, removal, disqualification, or otherwise, shall be filled by the 
Board of Directors for the unexpired portion of the term.

     Section 5. PRESIDENT.  The President shall be the principal executive 
officer of the Authority and shall in general supervise and control all of 
the business and affairs of the Authority.  He or she shall preside at all 
meetings of the Board of Directors, and may sign, together with the Secretary 
or any other proper officer of the Authority authorized by the Board of 
Directors, any leases, deeds, mortgages, bonds, contracts, or other 
instruments which the Board of Directors has authorized to be executed, 
except in cases where the signing and execution thereof shall be expressly 
delegated by the Board or by these Bylaws or by statute to some other officer 
or agent of the Authority; and in general he or she shall perform all duties


                                      3
<PAGE>

incident to the office of President and such other duties as may be 
prescribed by the Board of Directors from time to time.

     Section 6. VICE PRESIDENT.  In the absence of the President or in event 
of the inability or refusal of the President to act, the Vice President shall 
perform the duties of the President, and when so acting, shall have all the 
powers of and be subject to all the restrictions upon the President.  The 
Vice President shall perform such other duties as from time to time may be 
assigned by the President or by the Board of Directors.

     Section 7. TREASURER.  If required by the Board of Directors, the 
Treasurer shall give a bond for the faithful discharge of his or her duties 
in such sum and with such surety or sureties as the Board of Directors shall 
determine.  The Treasurer shall have charge and custody of and be responsible 
for all funds and securities of the Authority; shall receive and give 
receipts for moneys due and payable to the Authority from any source 
whatsoever, and deposit all such moneys in the name of the Authority in such 
banks, trust companies, or other depositories as shall be selected by the 
Board of Directors; shall render to the Board of Directors from time to time 
statements, which may be written or oral, of the financial condition of the 
Authority; and shall in general perform all the duties incident to the office 
of the Treasurer and such other duties as from time to time may be assigned 
by the President or by the Board of Directors.

     Section 8. SECRETARY.  The Secretary shall keep the minutes of the 
meeting of the Board of Directors in one or more books provided for that 
purpose; shall see that all notices are duly given in accordance with the 
provisions of these Bylaws or as required by law; shall be custodian of the 
corporate records and of the seal of the Authority and affix the seal of the 
Authority to all documents, the execution of which on behalf of the Authority 
under its seal is duly authorized in accordance with the provisions of these 
Bylaws; and shall in general perform all duties incident to the office of 
Secretary and such other duties as from time to time may be assigned by the 
President or by the Board of Directors.

                                ARTICLE V - SEAL

     The corporate seal of the Authority shall be in the form of a circle and 
shall have inscribed thereon the words "Castle Rock Ranch Public Improvements 
Authority".

                            ARTICLE VI - FISCAL YEAR

     The fiscal year of the Authority shall begin on the first (lst) day of 
January of each year and shall end on the thirty-first (31st) day of December 
of such year.

                            ARTICLE VII - AMENDMENTS

     These Bylaws may be altered, amended, or repealed by the affirmative 
vote of a majority of the Board of Directors voting at any special or regular 
meeting.  Notwithstanding the foregoing, these Bylaws may not be altered, 
amended or repealed so as to be inconsistent with the Articles of 
Incorporation, or with applicable law.


                                     4
<PAGE>

     IN WITNESS WHEREOF, I have hereunto signed my name this 29th day of 
March, 1996 in Denver, Colorado.

                                                                           
                                        [SIGNATURE ILLEGIBLE]
                                        ---------------------------
                                        Secretary






                                      6 

<PAGE>

- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------





               CASTLE ROCK RANCH PUBLIC IMPROVEMENTS AUTHORITY

                                    and

              SOUTHTRUST BANK OF ALABAMA, NATIONAL ASSOCIATION,
                                  as Trustee




                        ------------------------------

                             INDENTURE OF TRUST

                          dated as of March 1, 1996

                        ------------------------------





                         relating to the issuance of


                                  $66,975,000
               CASTLE ROCK RANCH PUBLIC IMPROVEMENTS AUTHORITY
                         PUBLIC FACILITIES REVENUE BONDS
                                   SERIES 1996





- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

<PAGE>


                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----

ARTICLE I - DEFINITIONS, NOTICES . . . . . . . . . . . . . . . . . . . . . .  12
     Section 1.1    DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . .  12
     Section 1.2    NOTICE TO AUTHORITY, CREDIT ENHANCEMENT PROVIDER AND
                    TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . .  23
     Section 1.3    INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. . . .  23

ARTICLE II - THE BONDS . . . . . . . . . . . . . . . . . . . . . . . . . . .  25
     Section 2.1    AUTHORIZATION OF BONDS . . . . . . . . . . . . . . . . .  25
     Section 2.2    TERMS OF BONDS . . . . . . . . . . . . . . . . . . . . .  25
     Section 2.3    TERMS OF REDEMPTION. . . . . . . . . . . . . . . . . . .  27
     Section 2.4    USE OF DEPOSITORY. . . . . . . . . . . . . . . . . . . .  27

ARTICLE III - ISSUE OF SERIES 1996 BONDS . . . . . . . . . . . . . . . . . .  30
     Section 3.1    AUTHENTICATION AND DELIVERY OF BONDS . . . . . . . . . .  30
     Section 3.2    APPLICATION OF PROCEEDS OF SERIES 1996 BONDS . . . . . .  30
     Section 3.3    PROJECT FUND . . . . . . . . . . . . . . . . . . . . . .  30
     Section 3.4    CAPITALIZED INTEREST ACCOUNT . . . . . . . . . . . . . .  31
     Section 3.5    [Reserved] . . . . . . . . . . . . . . . . . . . . . . .  31
     Section 3.6    SUBORDINATE INDEBTEDNESS . . . . . . . . . . . . . . . .  31

ARTICLE IV - REVENUES AND CREDIT ENHANCEMENT . . . . . . . . . . . . . . . .  32
     Section 4.1    ESTABLISHMENT OF FUNDS AND ACCOUNTS. . . . . . . . . . .  32
     Section 4.2    CREDIT ENHANCEMENT; SOURCE OF PAYMENT. . . . . . . . . .  32
     Section 4.3    PLEDGE; REVENUE FUND . . . . . . . . . . . . . . . . . .  34
     Section 4.4    ALLOCATION OF REVENUES . . . . . . . . . . . . . . . . .  34
     Section 4.5    APPLICATION OF INTEREST FUND . . . . . . . . . . . . . .  36
     Section 4.6    APPLICATION OF PRINCIPAL FUND. . . . . . . . . . . . . .  36
     Section 4.7    APPLICATION OF REDEMPTION FUND . . . . . . . . . . . . .  38
     Section 4.8    INVESTMENT OF MONEYS IN FUNDS AND ACCOUNTS . . . . . . .  39
     Section 4.9    ESTABLISHMENT AND APPLICATION OF THE REBATE FUND . . . .  39

ARTICLE V - REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE AUTHORITY . . .  41
     Section 5.1    REPRESENTATIONS AND WARRANTIES OF THE AUTHORITY. . . . .  41
     Section 5.2    ACQUISITION OF PROPERTY. . . . . . . . . . . . . . . . .  43
     Section 5.3    AUTHORITY'S TITLE TO PROJECT; DEED OF TRUST. . . . . . .  44
     Section 5.4    INSURANCE. . . . . . . . . . . . . . . . . . . . . . . .  44
     Section 5.5    MISCELLANEOUS COVENANTS. . . . . . . . . . . . . . . . .  47
     Section 5.6    CONSOLIDATION, MERGER, SALE OR TRANSFER UNDER CERTAIN
                    CONDITIONS . . . . . . . . . . . . . . . . . . . . . . .  47
     Section 5.7    REPORTS. . . . . . . . . . . . . . . . . . . . . . . . .  49




                                      i

<PAGE>

                                                                            PAGE
                                                                            ----

     Section 5.8    TAX COVENANTS. . . . . . . . . . . . . . . . . . . . . .  49
     Section 5.9    TRANSFER TO DISTRICT . . . . . . . . . . . . . . . . . .  50

ARTICLE VI - CERTIFICATES AND OPINIONS . . . . . . . . . . . . . . . . . . .  51
     Section 6.1    CONTENT OF CERTIFICATES AND OPINIONS . . . . . . . . . .  51

ARTICLE VII - PROVISIONS CONCERNING THE BONDS. . . . . . . . . . . . . . . .  52
     Section 7.1    EXECUTION OF BONDS . . . . . . . . . . . . . . . . . . .  52
     Section 7.2    TRANSFER OR EXCHANGE OF BONDS. . . . . . . . . . . . . .  52
     Section 7.3    BOND REGISTER. . . . . . . . . . . . . . . . . . . . . .  56
     Section 7.4    TEMPORARY BONDS. . . . . . . . . . . . . . . . . . . . .  56
     Section 7.5    BONDS MUTILATED, LOST, DESTROYED OR STOLEN . . . . . . .  56

ARTICLE VIII - PROVISIONS REGARDING REDEMPTION OF BONDS. . . . . . . . . . .  58
     Section 8.1    SELECTION OF BONDS FOR REDEMPTION. . . . . . . . . . . .  58
     Section 8.2    NOTICE OF REDEMPTION . . . . . . . . . . . . . . . . . .  58
     Section 8.3    EFFECT OF REDEMPTION . . . . . . . . . . . . . . . . . .  59

ARTICLE IX - ADDITIONAL REPRESENTATIONS AND COVENANTS OF THE AUTHORITY . . .  60
     Section 9.1    PAYMENT OF PRINCIPAL AND INTEREST. . . . . . . . . . . .  60
     Section 9.2    ACCOUNTING RECORDS AND REPORTS . . . . . . . . . . . . .  60
     Section 9.3    COMPLIANCE WITH INDENTURE. . . . . . . . . . . . . . . .  60
     Section 9.4    AUTHORIZATION FOR BONDS. . . . . . . . . . . . . . . . .  61
     Section 9.5    OBSERVANCE OF LAWS AND REGULATIONS, ERISA. . . . . . . .  61
     Section 9.6    MAINTENANCE AND REPAIR OF PROJECT. . . . . . . . . . . .  61
     Section 9.7    OTHER LIENS. . . . . . . . . . . . . . . . . . . . . . .  61
     Section 9.8    COMPLIANCE WITH CONTRACTS. . . . . . . . . . . . . . . .  62
     Section 9.9    PROSECUTION AND DEFENSE OF SUITS . . . . . . . . . . . .  62
     Section 9.10   EMINENT DOMAIN . . . . . . . . . . . . . . . . . . . . .  62
     Section 9.11   FURTHER ASSURANCES . . . . . . . . . . . . . . . . . . .  64

ARTICLE X - EVENTS OF DEFAULT AND REMEDIES . . . . . . . . . . . . . . . . .  65
     Section 10.1   EVENTS OF DEFAULT: ACCELERATION: WAIVER OF DEFAULT . . .  65
     Section 10.2   POWER OF TRUSTEE TO ENTER AND TAKE POSSESSION OF TRUST
                    ESTATE . . . . . . . . . . . . . . . . . . . . . . . . .  67
     Section 10.3   APPLICATION OF MONEYS. . . . . . . . . . . . . . . . . .  68
     Section 10.4   INSTITUTION OF LEGAL PROCEEDINGS BY TRUSTEE. . . . . . .  69
     Section 10.5   POWER OF SALE. . . . . . . . . . . . . . . . . . . . . .  69
     Section 10.6   ACCELERATION UPON EXERCISE OF POWER OF SALE. . . . . . .  70
     Section 10.7   SALE AS ENTIRETY OR IN PARCELS . . . . . . . . . . . . .  70
     Section 10.8   ADJOURNMENTS OF SALE . . . . . . . . . . . . . . . . . .  70
     Section 10.9   TRANSFER TO BUYER AT SALE. . . . . . . . . . . . . . . .  70



                                     ii

<PAGE>

                                                                            PAGE
                                                                            ----

     Section 10.10  SALE A BAR AGAINST AUTHORITY . . . . . . . . . . . . . .  71
     Section 10.11  BUYER NOT LIABLE FOR APPLICATION OF PURCHASE MONEY . . .  71
     Section 10.12  APPLICATION OF BONDS TO PURCHASE PRICE . . . . . . . . .  71
     Section 10.13  PURCHASE BY TRUSTEE. . . . . . . . . . . . . . . . . . .  71
     Section 10.14  APPLICATION OF PROCEEDS OF SALE. . . . . . . . . . . . .  71
     Section 10.15  EFFECT OF DELAY OR OMISSION TO PURSUE REMEDY . . . . . .  72
     Section 10.16  REMEDIES CUMULATIVE. . . . . . . . . . . . . . . . . . .  72
     Section 10.17  WAIVER BY AUTHORITY OF BENEFITS OF LAWS FOR PROTECTION
                    OF DEBTORS . . . . . . . . . . . . . . . . . . . . . . .  72
     Section 10.18  COVENANT TO PAY BONDS IN EVENT OF DEFAULT, ETC.. . . . .  72
     Section 10.19  RIGHTS OF TRUSTEE IN RECEIVERSHIP PROCEEDINGS, ETC.. . .  73
     Section 10.20  RIGHTS OF BONDHOLDERS TO CONTROL PROCEEDINGS BY
                    TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . .  74
     Section 10.21  LIMITATION ON BONDHOLDERS' RIGHT TO SUE. . . . . . . . .  74
     Section 10.22  ABSOLUTE OBLIGATION OF AUTHORITY . . . . . . . . . . . .  75
     Section 10.23  WAIVER OF PERSONAL LIABILITY OF INDIVIDUALS. . . . . . .  75
     Section 10.24  CREDIT ENHANCEMENT PROVIDER RIGHTS . . . . . . . . . . .  75
     Section 10.25  CREDIT ENHANCEMENT PROVIDER TO BE SUBROGATED TO RIGHTS
                    OF HOLDERS . . . . . . . . . . . . . . . . . . . . . . .  75

ARTICLE XI - THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . .  76
     Section 11.1   DUTIES, IMMUNITIES AND LIABILITIES OF TRUSTEE;
                    REPRESENTATIONS AND WARRANTIES OF TRUSTEE. . . . . . . .  76
     Section 11.2   RIGHT OF TRUSTEE TO RELY UPON DOCUMENTS, ETC.. . . . . .  78
     Section 11.3   TRUSTEE NOT RESPONSIBLE FOR RECITALS; REFUSAL TO
                    PERFORM. . . . . . . . . . . . . . . . . . . . . . . . .  78
     Section 11.4   RIGHT OF TRUSTEE TO ACQUIRE BONDS. . . . . . . . . . . .  79
     Section 11.5   MONEYS RECEIVED BY TRUSTEE TO BE HELD IN TRUST . . . . .  79
     Section 11.6   COMPENSATION AND INDEMNIFICATION OF TRUSTEE. . . . . . .  79
     Section 11.7   QUALIFICATIONS OF TRUSTEE. . . . . . . . . . . . . . . .  80
     Section 11.8   RESIGNATION AND REMOVAL OF TRUSTEE AND APPOINTMENT OF
                    SUCCESSOR TRUSTEE. . . . . . . . . . . . . . . . . . . .  80
     Section 11.9   ACCEPTANCE OF TRUST BY SUCCESSOR TRUSTEE . . . . . . . .  81
     Section 11.10  MERGER OR CONSOLIDATION OF TRUSTEE . . . . . . . . . . .  82
     Section 11.11  RECORDS OF TRUSTEE . . . . . . . . . . . . . . . . . . .  82
     Section 11.12  REPORTS BY TRUSTEE TO HOLDERS. . . . . . . . . . . . . .  82
     Section 11.13  TRUSTEE DISCLAIMER . . . . . . . . . . . . . . . . . . .  83
     Section 11.14  APPOINTMENT OF CO-TRUSTEE. . . . . . . . . . . . . . . .  85
     Section 11.15  ELIGIBLE INSTITUTIONS. . . . . . . . . . . . . . . . . .  86

ARTICLE XII - MODIFICATION OF INDENTURE. . . . . . . . . . . . . . . . . . .  87
     Section 12.1   MODIFICATION WITHOUT CONSENT OF BONDHOLDERS. . . . . . .  87
     Section 12.2   MODIFICATION WITH CONSENT OF BONDHOLDERS . . . . . . . .  87
     Section 12.3   EFFECT OF SUPPLEMENTAL INDENTURE . . . . . . . . . . . .  88



                                    iii

<PAGE>

                                                                            PAGE
                                                                            ----

     Section 12.4   OPINION OF COUNSEL AS TO SUPPLEMENTAL INDENTURE. . . . .  88
     Section 12.5   NOTATION OF MODIFICATION ON BONDS: PREPARATION OF NEW
                    BONDS. . . . . . . . . . . . . . . . . . . . . . . . . .  89
     Section 12.6   AMENDMENTS TO OPERATING AGREEMENT AND INTERGOVERNMENTAL
                    AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . .  89

ARTICLE XIII - DEFEASANCE. . . . . . . . . . . . . . . . . . . . . . . . . .  90
     Section 13.1   DISCHARGE OF THIS INDENTURE. . . . . . . . . . . . . . .  90
     Section 13.2   DISCHARGE OF LIABILITY ON BONDS. . . . . . . . . . . . .  91
     Section 13.3   PAYMENT OF BONDS AFTER DISCHARGE OF INDENTURE. . . . . .  91
     Section 13.4   RIGHTS OF THE DISTRICT . . . . . . . . . . . . . . . . .  92

ARTICLE XIV - MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . .  94
     Section 14.1   SUCCESSORS OF AUTHORITY. . . . . . . . . . . . . . . . .  94
     Section 14.2   LIMITATION OF RIGHTS TO PARTIES AND BONDHOLDERS. . . . .  94
     Section 14.3   WAIVER OF NOTICE . . . . . . . . . . . . . . . . . . . .  94
     Section 14.4   DESTRUCTION OF BONDS . . . . . . . . . . . . . . . . . .  94
     Section 14.5   SEVERABILITY OF INVALID PROVISIONS . . . . . . . . . . .  94
     Section 14.6   EVIDENCE OF RIGHTS OF BONDHOLDERS. . . . . . . . . . . .  94
     Section 14.7   CONTINUING DISCLOSURE. . . . . . . . . . . . . . . . . .  95
     Section 14.8   ARTICLE AND SECTION HEADINGS . . . . . . . . . . . . . .  95
     Section 14.9   EXECUTION IN SEVERAL COUNTERPARTS. . . . . . . . . . . .  96
     Section 14.10  TRUST INDENTURE ACT CONTROLS . . . . . . . . . . . . . .  96








                                     iv

<PAGE>

     THIS INDENTURE OF TRUST (the "Indenture"), made and entered into as of the
first day of March 1996, by and between CASTLE ROCK RANCH PUBLIC IMPROVEMENTS
AUTHORITY, a nonprofit corporation organized and existing under and by virtue of
the laws of the State of Colorado, having its principal place of business in the
County of Douglas in said State (the "Authority"), and SOUTHTRUST BANK OF
ALABAMA, NATIONAL ASSOCIATION, as trustee, a national banking association
organized and existing under and by virtue of the laws of the United States of
America, having a corporate trust office in Birmingham, Alabama, and being
qualified to accept and administer the trusts hereby created (the "Trustee");

                              W I T N E S S E T H:

     WHEREAS, the Authority is organized under the nonprofit corporation laws of
the State of Colorado and its articles of incorporation provide that it is not
organized for profit, and no part of the Authority's net earnings, if any, will
ever inure to the benefit of any person; and

     WHEREAS, the Authority, in furtherance of the purposes, and as a corporate
instrumentality of, Dawson Ridge Metropolitan District No. 5, Douglas County,
Colorado (the "District"), is authorized to issue bonds and other obligations
payable from revenues of the Authority; and

     WHEREAS, the Authority proposes to acquire, construct, improve and equip on
behalf of the District and in furtherance of the best interests of the District
and its inhabitants and intended for use in the promotion of public health and
public welfare certain public improvements consisting of parks and recreational
facilities, together with all necessary incidental and appurtenant properties,
facilities, equipment and costs (the "Project"), all located or to be located
within or having a substantial connection with the District; and

     WHEREAS, the Authority has determined to issue its Public Facilities
Revenue Bonds, Series 1996, in the aggregate principal amount of $66,975,000
(the "Series 1996 Bonds" or the "Bonds") in order to acquire with proceeds
thereof real property upon which certain of the Project facilities will be
constructed or installed, and certain water rights with respect to the Project
(together, the "Property"); and

     WHEREAS, the Authority will execute a Registration Rights Agreement (as
herein defined) pursuant to which the Authority will authorize the exchange of
Bonds, as therein described.  The Bonds initially issued shall be designated as
"Series A Bonds," and following such exchange, the Bonds exchanged for Series A
Bonds pursuant to the exchange under the Registration Rights Agreement shall be
designated as "Series B Bonds" (and together with the Series A Bonds, the
"Bonds"); and

     WHEREAS, the Series 1996 Bonds are issued on behalf of the District, and
pursuant to a Recreational Facilities Agreement, dated as of the date hereof
(the "Recreational Facilities Agreement"), and  an Operating Agreement, dated as
of the date hereof (the "Operating Agreement"), each between the Authority and
the District, the District is entitled, not later than 


                                      1

<PAGE>

upon discharge of the obligations of the Authority, including the Series 1996 
Bonds, to acquire unencumbered fee title to the Property without cost; and

     WHEREAS, it has been determined that the payment of the principal of and
interest on the Series 1996 Bonds (i) should be credit enhanced by BFC Guaranty
Corp. (the "Credit Enhancement Provider"), pursuant to the Credit Enhancement
(as hereafter defined); and (ii) should be secured by the Deed of Trust,
Security Agreement, Financing Statement and Assignment of Rents and Leases from
the Authority for the benefit of the Trustee and the Credit Enhancement
Provider, dated as of the date hereof (the "Deed of Trust"); and

     WHEREAS, the Series 1996 Bonds and the form of Trustee's certificate of
authentication and registration are to be in substantially the following forms
with necessary or appropriate variations, omissions and insertions, as permitted
or required by this Indenture:


                                      2

<PAGE>

     [Unless and until it is exchanged in whole or in part for Bonds in
definitive form, this Bond may not be transferred except as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository or by the Depository or any
such nominee to a successor Depository or a nominee of such successor
Depository.  Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) ("DTC"), to the issuer or its agent for registration of transfer, exchange
or payment, and any certificate issued is registered in the name of Cede & Co.
or such other name as may be requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or such other entity as may be requested
by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.](1)

     THIS BOND (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
     EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
     SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THIS BOND MAY NOT
     BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
     REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.  EACH PURCHASER OF
     THIS BOND IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE
     EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
     PROVIDED BY RULE 144A THEREUNDER.  THE HOLDER OF THIS BOND AGREES FOR
     THE BENEFIT OF THE AUTHORITY THAT (A) THIS BOND MAY BE RESOLD, PLEDGED
     OR OTHERWISE TRANSFERRED, ONLY (1) INSIDE THE UNITED STATES TO A
     PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
     BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
     TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, OR IN ACCORDANCE
     WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
     SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE AUTHORITY
     SO REQUESTS), (2) TO THE AUTHORITY, (3) PURSUANT TO AN EFFECTIVE
     REGISTRATION STATEMENT OR, (4) OUTSIDE THE UNITED STATES TO A FOREIGN
     PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE
     SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
     SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
     APPLICABLE JURISDICTION, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
     HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THIS BOND OF
     THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.



- --------------------

(1) This paragraph should be included only if the Bond is issued in Book-Entry
    form.



                                      3


<PAGE>

No. R-_________                                                $________________

                 CASTLE ROCK RANCH PUBLIC IMPROVEMENTS AUTHORITY
                         PUBLIC FACILITIES REVENUE BOND
                                   SERIES 1996
                                        

INTEREST RATE       MATURITY  DATE      ISSUE DATE          CUSIP
- -------------       --------------      ----------          -----


Registered Owner:  Cede & Co., Taxpayer Identification Number: 13-2555119
Principal Sum:


     Castle Rock Ranch Public Improvements Authority, a nonprofit corporation
organized and existing under and by virtue of the laws of the State of Colorado
(the "Authority"), for value received, hereby promises to pay to the Registered
Owner specified above or registered assigns, on the Maturity Date specified
above, the Principal Sum specified above in lawful money of the United States of
America; and to pay interest thereon in like money from the date hereof to the
first interest payment date, and thereafter from the interest payment date next
preceding the date of authentication of this Bond (unless this Bond is
authenticated on an interest payment date, in which event it shall bear interest
from such date of authentication, or unless this Bond is authenticated during
the period after a Record Date (as hereinafter defined) but before the next
interest payment date, in which event this Bond shall bear interest from that
next interest payment date or when no interest has been paid on this Bond, in
which event this Bond shall bear interest from March 1, 1996) until payment of
such principal sum, at the Interest Rate per annum specified above, computed on
the basis of a 360-day year of twelve 30-day months, payable semiannually on
June 1 and December 1 in each year commencing December 1, 1996.  Interest hereon
is payable in lawful money of the United States of America by check mailed by
first class mail on each interest payment date to the registered owner as of the
close of business on the fifteenth day of the calendar month immediately
preceding such interest payment date (whether or not the fifteenth day is a
business day) (the "Record Date"); provided, however, that any owner of
$1,000,000 or more of the principal amount of Bonds (as hereinafter defined)
may, at any time prior to a Record Date, give to SouthTrust Bank of Alabama,
National Association, as trustee (the "Trustee") in Birmingham, Alabama, written
instructions for payment of such interest on each succeeding interest payment
date by wire transfer.  Interest shall be deemed paid when an interest check is
mailed, postage prepaid by first class mail to the holder hereof at the address
indicated on the bond register maintained by the Trustee.  Any such interest not
so timely paid or provided for shall cease to be payable to the person who is
the registered owner hereof at the close of business on the Record Date and
shall be payable to the person who is the 



                                      4

<PAGE>

registered owner hereof at the close of business on a special record date 
(the "Special Record Date") established for the payment of any such defaulted 
interest.  Notice of the Special Record Date and the date fixed for the 
payment of defaulted interest shall be given by first-class mail to the 
registered owner hereof as shown on the registration books on a date selected 
by the Trustee.  The principal hereof and premium, if any, hereon are payable 
when due upon presentation hereof at the corporate trust office of the 
Trustee, in Birmingham, Alabama, in lawful money of the United States of 
America.  The holder of this Bond may also be entitled to receive Additional 
Interest (as defined in the Indenture), subject to the terms and conditions 
therein described.

     This Bond is one of a duly authorized issue of bonds of the Authority
designated as the "Castle Rock Ranch Public Improvements Authority Public
Facilities Revenue Bonds, Series 1996" (the "Bonds"), all issued under and
equally secured by an Indenture of Trust (the "Indenture"), dated as of March 1,
1996, between the Authority and the Trustee.  The Bonds are general obligations
of the Authority to the payment of which Revenues (as defined in the Indenture)
of the Authority are pledged, and are secured by a Deed of Trust and certain
Credit Enhancement, as set forth and defined in the Indenture.  Amounts derived
under the Credit Enhancement are not available for the payment of, among other
things, Additional Interest.  Reference is hereby made to the Indenture and all
indentures supplemental thereto, the provisions of which are incorporated herein
by this reference, for a description of the rights thereunder of the registered
owners of the Bonds, of the nature and extent of the security, of the rights,
duties and immunities of the Trustee and of the rights and obligations of the
Authority thereunder, to all of the provisions of which Indenture the registered
owner of this Bond, by acceptance hereof, assents and agrees.

     THIS BOND SHALL NEVER CONSTITUTE THE DEBT OR INDEBTEDNESS OR FISCAL
OBLIGATION OF THE STATE OF COLORADO, DOUGLAS COUNTY, COLORADO OR DAWSON RIDGE
METROPOLITAN DISTRICT NO. 5 (THE "DISTRICT") WITHIN THE MEANING OF ANY PROVISION
OR LIMITATION OF THE COLORADO STATE CONSTITUTION OR STATUTES, AND SHALL NEITHER
CONSTITUTE NOR GIVE RISE TO A PECUNIARY LIABILITY OF THE STATE, COUNTY OR
DISTRICT OR A CHARGE AGAINST THEIR GENERAL CREDIT OR TAXING POWERS.

     The Indenture contains provisions permitting the Authority and the Trustee,
with the consent of the Credit Enhancement Provider (so long as the Credit
Enhancement Provider is not in default under the Credit Enhancement) and the
holders of not less than a majority in aggregate principal amount of the Bonds
at the time outstanding, evidenced as in the Indenture provided, to execute
Supplemental Indentures adding any provisions to, or changing in any manner, or
eliminating any of the provisions of, the Indenture; provided, however, that no
such Supplemental Indenture shall (1) extend the fixed maturity of this Bond or
reduce the rate of interest hereon or extend the time of payment of interest, or
reduce the amount of the principal hereof, or reduce any premium payable on the
redemption hereof, without the consent of the holder hereof, or (2) reduce the
aforesaid percentage of holders of Bonds whose consent is required for the
execution of such Supplemental Indentures, or permit the creation of any lien 



                                      5

<PAGE>

on the Trust Estate prior to or on a parity with the lien of the Indenture or 
deprive the holders of the Bonds of the lien created by the Indenture upon 
the Trust Estate, without the consent of the Holders of all Bonds then 
outstanding who would be adversely affected, and the Credit Enhancement 
Provider (as defined in the Indenture).

     The Authority shall have the right, under the circumstances prescribed in
the Indenture, to redeem Bonds at the principal amount thereof plus accrued
interest to the date of redemption through the application of proceeds of
insurance and eminent domain proceedings as provided in the Indenture.  The
Bonds are also subject to mandatory redemption at the principal amount thereof
plus accrued interest to the date of redemption, from amounts provided by the
Credit Enhancement, as provided in the Indenture.

     As provided in the Indenture, notice of redemption shall be given by first-
class mail, not less than thirty nor more than sixty days prior to the
redemption date, to the registered owner of this Bond, but neither failure to
mail such notice nor any defect in the notice so mailed shall affect the
sufficiency of the proceedings for redemption of Bonds as to which notice is
properly given.

     If this Bond is called for redemption and payment is duly provided therefor
as specified in the Indenture, interest shall cease to accrue hereon from and
after the date fixed for redemption.  In case less than all of the Bonds are to
be redeemed, the Bonds shall be redeemed in part as provided in the Indenture.

     If an event of default, as defined in the Indenture, shall occur, the
principal of all Bonds may be declared due and payable upon the conditions, in
the manner and with the effect provided in the Indenture.  The Indenture
provides that in certain events such declaration and its consequences may be
rescinded by the holders of at least a majority in aggregate principal amount of
the Bonds then outstanding, subject to the rights of the Credit Enhancement
Provider.

     This Bond is transferable by the registered owner hereof, in person or by
his attorney duly authorized in writing, at the principal corporate trust office
of the Trustee, but only in the manner, subject to the limitations and upon
payment of the charges provided in the Indenture, and upon surrender and
cancellation of this Bond.  Upon such transfer a new fully registered Bond or
Bonds, of the same series and maturity and of authorized denomination or
denominations, for the same aggregate principal amount will be issued to the
transferee in exchange herefor.

     The Authority and the Trustee may treat the registered owner hereof on the
Record Date as the absolute owner hereof for the purpose of receiving payments
of principal and interest on this Bond, and on any other date for all purposes,
and the Authority and the Trustee shall not be affected by any notice to the
contrary.

     No recourse shall be had for the payment of the principal of or the
interest on this Bond or for any claim based hereon or otherwise in respect
hereof, or based on or in respect of the 



                                      6

<PAGE>

Indenture or any indenture supplemental thereto, against any incorporator, 
member, director or officer, as such, past, present or future, of the 
Authority or of any predecessor or successor corporation, either directly or 
through the Authority or otherwise, whether by virtue of any constitution, 
statute or rule of law, or by the enforcement of any assessment or penalty, 
or otherwise, all such liability being by the acceptance hereof and as part 
of the consideration for the issue hereof expressly waived and released, as 
provided in the Indenture.

     In addition to the rights provided to Holders of Bonds under the Indenture,
Holders of Transfer Restricted Securities (as defined in the Indenture) shall
have all the rights set forth in the Registration Rights Agreement dated as of
the date of the Indenture, between the Authority and the parties named on the
signature pages thereof (the "Registration Rights Agreement").

     This Bond shall not be entitled to any benefit under the Indenture, or
become valid or obligatory for any purpose, until the certificate of
authentication hereon endorsed shall have been manually signed by the Trustee.

     IN WITNESS WHEREOF, Castle Rock Ranch Public Improvements Authority has
caused this Bond to be executed on its behalf by manual or facsimile signature
of its President, attested by manual or facsimile signature of its Secretary,
all as of the issue date specified above.


                              CASTLE ROCK RANCH PUBLIC IMPROVEMENTS AUTHORITY



                              By: --------------------------------------------
                                   President
Attest:


- ---------------------
Secretary


                [Form of Trustee's Certificate of Authentication
                               to Appear on Bonds]




                                      7

<PAGE>

     This is one of the Bonds described in the within-mentioned Indenture and
authenticated on the date set forth below.


                                       SOUTHTRUST BANK OF ALABAMA,
                                       NATIONAL ASSOCIATION
                                       as Trustee


Date:                                  By: 
     ---------------------                 -----------------------------------
                                           Authorized Signatory






                                      8

<PAGE>

                              [Form of Assignment]

For value received the undersigned do(es) hereby sell, assign and transfer unto
______________________________________________ the within-mentioned Bond and
hereby irrevocably constitute and appoint ______________________________
attorney, to transfer the same on the books of the Trustee with full power of
substitution in the premises.




                                       ----------------------------------------

Dated:
       -------------------

Note:  The signatures to this Assignment must correspond with the name(s) as
written on the face of the within Bond in every particular, without alteration
or enlargement or any change whatsoever.

Signature Guaranteed:                   Social Security Number, Taxpayer
                                        Identification Number or Other
                                        Identifying  Number of Assignee:


- --------------------------             ----------------------------------------


NOTICE: Signature must be
guaranteed by a member firm of
the STAMP, SEMP or MSP signature
guaranty medallion program


                              [End of Form of Bond]




                                      9

<PAGE>

and

     WHEREAS, all acts and proceedings required by law and by the articles of
incorporation and bylaws of the Authority, including all action requisite on the
part of its directors and officers, necessary to make the Bonds, when executed
by the Authority, authenticated and delivered by the Trustee and duly issued,
the valid, binding and legal obligations of the Authority, and to constitute
this Indenture a valid and binding agreement for the uses and purposes herein
set forth, in accordance with its terms, have been done and taken; and the
execution and delivery of this Indenture have been in all respects duly
authorized;

     NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the
payment of the principal of and the interest and premium, if any, on all Series
1996 Bonds issued and outstanding under this Indenture, according to their
tenor, and to secure the performance of all obligations of the Authority to the
Credit Enhancement Provider and the performance and observance of all the
covenants and conditions therein and herein set forth, and to declare the terms
and conditions upon and subject to which the Series 1996 Bonds are to be issued
and received, and in consideration of the premises and of the purchase and
acceptance of the Series 1996 Bonds by the registered owners thereof, and for
other valuable considerations, the receipt whereof is hereby acknowledged, the
Authority does hereby grant, bargain, sell, warrant, convey, confirm, assign,
transfer in trust, transfer a security interest in, pledge and set over unto the
Trustee, and to its successors in the trusts hereby created, all and singular
the property of the Authority, real and personal, hereinafter described (said
property being herein sometimes referred to as the "Trust Estate"):

          1.   All of the Revenues (as defined herein) existing, earned or
     received by the Authority, including interest or profits from the
     investment of moneys in any fund pursuant to Section 4.7 hereof and any
     insurance proceeds received by the Authority as and to the extent provided
     in Section 5.4 hereof.

          2.   All of the real property and improvements thereon and any
     personal property acquired by the Authority with proceeds of the Bonds in
     connection therewith, as described in the Deed of Trust, subject to the
     interests thereon of the Credit Enhancement Provider, as provided in the
     Deed of Trust.

          3.   All payments made under the Credit Enhancement.

          4.   All right, title and interest of the Authority in the Credit
     Enhancement, the Operating Agreement, the Recreational Facilities Agreement
     and the Development Agreement (as herein defined) and the Bond Pledge and
     Security Agreement (as herein defined).

     TO HAVE AND TO HOLD, all and singular, the Trust Estate, including any and
all additional property that by virtue of any provision hereof or of any
indenture supplemental 



                                     10

<PAGE>

hereto shall hereafter become subject to this Indenture and to the trusts 
hereby created, unto the Trustee and its successors in the trusts hereby 
created forever;

     IN TRUST, NEVERTHELESS, for the equal and proportionate benefit and
security of the Holders (as herein defined) from time to time of the Series 1996
Bonds authenticated and delivered hereunder and issued by the Authority and
outstanding, and for the enforcement of the payment of the Series 1996 Bonds and
of the interest (and any premium) thereon when payable according to their tenor,
purport and effect and to secure the performance of and compliance with the
covenants and conditions of this Indenture, without preference, priority or
distinction as to lien or otherwise of any one Series 1996 Bond over any other
Series 1996 Bond by reason of priority in the issue, sale or negotiation
thereof, or of any other cause, so that each Series 1996 Bond shall have the
same rights, privileges and lien under and by virtue of this Indenture, and so
that the principal of and interest (and any premium) on every Series 1996 Bond
shall, subject to the terms hereof, be equally and proportionately secured
hereby, as if all had been duly issued and sold and negotiated simultaneously
with the execution and delivery of this Indenture; and conditioned, however,
that if the Authority shall well and truly pay or cause to be paid fully and
promptly when due all indebtedness, liabilities, obligations and sums at any
time secured hereby, including interest and attorneys' fees, and shall promptly,
faithfully and strictly keep, perform and observe or cause to be kept, performed
and observed all of its covenants, warranties and agreements contained herein,
then and in such event this Indenture shall be and become void and of no further
force and effect; otherwise the same shall remain in full force and effect.

     And it is hereby covenanted that the Series 1996 Bonds shall be issued,
authenticated and delivered, and that the Trust Estate shall be held by the
Trustee, subject to the further covenants, conditions, uses and trusts
hereinafter set forth, and the Authority agrees and covenants with the Trustee
and with the Holders from time to time of the Series 1996 Bonds, as follows:




                                     11

<PAGE>

                                    ARTICLE I

                              DEFINITIONS, NOTICES

     Section 1.1    DEFINITIONS.  Unless the context otherwise requires, the
terms defined in this Section (and in Article VI hereof) shall, for all purposes
of this Indenture and of any indenture supplemental hereto, have the meanings
herein specified, the following definitions to be equally applicable to both the
singular and plural forms of any of the terms herein defined:

     "ACCOUNTANT" shall mean a person or firm engaged in the practice of
accounting who is a nationally recognized certified public accountant acceptable
to the Trustee and who is independent of the entity whose accounts are being
audited.

     "ACT OF BANKRUPTCY" shall mean the filing of a petition in bankruptcy (or
other commencement of a bankruptcy or similar proceeding) by or against the
Authority under any applicable bankruptcy, insolvency or similar law as now or
hereafter in effect.

     "ADDITIONAL INTEREST" shall mean additional interest payable to each Holder
of Transfer Restricted Securities calculated at the rate of 1% per annum on the
principal amount of such Transfer Restricted Securities during the period (prior
to the registration of the Bonds) that any Nonregistration exists.

     "AGGREGATE ANNUAL DEBT SERVICE" shall mean Debt Service on all Indebtedness
for the twelve-month period ending on the last day of November of each year.

     "AUTHORITY" shall mean Castle Rock Ranch Public Improvements Authority, a
corporate instrumentality of the District and a nonprofit corporation organized
and existing under and by virtue of the laws of the State of Colorado.

     "AUTHORIZED OFFICER" or "RESPONSIBLE OFFICER" shall mean and include the
president of the board of directors, the president, every vice president, every
assistant vice president, the cashier, every assistant cashier, every trust
officer, and every officer and assistant officer of the Trustee, other than
those specifically above mentioned, to whom any corporate trust matter is
referred because of his knowledge of, and familiarity with, a particular
subject.

     "AVAILABLE MONEYS" shall mean (a) proceeds of the Bonds received
contemporaneously with the issuance and sale of the Bonds and held by the
Trustee at all times since receipt of such proceeds in a separate and segregated
account in which only Available Monies were at any time held, and the proceeds
from the investment thereof, (b) monies paid by the Authority to the Trustee
which monies shall have been held by the Trustee for at least 126 days prior to
the date such monies are to be applied to the payment of principal or interest
on the Bonds, provided that no Act of Bankruptcy shall have occurred during such
126 day period, (c) monies drawn under any Credit Enhancement or collateral
therefor which are either applied directly to the payment of the principal of or
interest on the Bonds or which, if not so applied, are held in a separate 



                                     12

<PAGE>

and segregated subaccount under the Indenture until so applied, (d) deposits 
with the Trustee as agent and bailee of proceeds of the issuance of refunding 
obligations or obligations of the District or the Authority if, in the 
written opinion of nationally recognized counsel experienced in bankruptcy 
matters and acceptable to the Trustee, the deposit and use of such proceeds 
will not constitute a voidable preference under the Bankruptcy Code in the 
case of bankruptcy of the Authority or the District, (e) any other money the 
application of which will not, in the written opinion of nationally 
recognized counsel experienced in bankruptcy matters and acceptable to the 
Trustee, constitute a voidable preference under the Bankruptcy Code in the 
case of bankruptcy of the Authority or the District, and (f) investment 
income derived from the investment of the foregoing types of monies; provided 
that such proceeds, monies or income shall not be deemed to be Available 
Monies or available for payment of the Bonds if, among other things, an 
injunction, restraining order or stay is in effect preventing such proceeds, 
monies or income from being applied to make such payment.

     "BANKRUPTCY CODE" shall mean the Bankruptcy Reform Act of 1978, as amended.

     "BOND COUNSEL" shall mean any attorney at law or firm of attorneys selected
by the Authority, of nationally recognized standing in matters pertaining to the
validity of and federal tax exemption of interest on obligations issued by
states and political subdivisions, and duly admitted to practice law before the
highest court of any state of the United States of America.

     "BOND PLEDGE AND SECURITY AGREEMENT" shall mean that certain Bond Pledge
and Security Agreement, dated as of the date hereof, from the Credit Enhancement
Provider for the benefit of the Trustee.

     "BONDS" AND "TERM BONDS"

          "BONDS" OR "SERIES 1996 BONDS" shall mean the Authority's $66,975,000
aggregate principal amount of Public Facilities Revenue Bonds, Series 1996.

          "TERM BONDS" shall mean the Series 1996 Bonds maturing on December 1,
2011 and on December 1, 2017.

     "BOOK-ENTRY BONDS" shall mean Bonds that are issued only in book-entry-only
form.

     "CAPITALIZED INTEREST ACCOUNT" shall mean the account by such name created
by the provisions of Section 4.1 of this Indenture.

     "CERTIFICATE OF THE AUTHORITY"  shall mean a certificate signed by the
President of the Authority and by the Secretary of the Authority.  If and to the
extent required by the provisions of Section 6.1, each Certificate of the
Authority shall include the statements provided for in Section 6.1 hereof.



                                     13

<PAGE>

     "CERTIFIED RESOLUTION"  shall mean a copy of a resolution of the Authority
certified by the Secretary or an Assistant Secretary of the Authority to have
been duly adopted by the Authority and to be in full force and effect on the
date of such certification.

     "CODE" shall mean the Internal Revenue Code of 1986, as amended.

     "COLLATERAL" shall mean the Series B REMIC Bonds, the payments on such
Bonds and any Federal Securities substituted therefor.

     "COLLATERALIZED CREDIT FUND" shall mean the fund by that name created
pursuant to Section 4.1 of this Indenture.

     "COLLATERALIZED CREDIT INTEREST ACCOUNT" shall mean the account by that
name created pursuant to Section 4.1 of this Indenture.

     "COLLATERALIZED CREDIT PRINCIPAL ACCOUNT" shall mean the account by that
name created pursuant to Section 4.1 of this Indenture.

     "CONTINUING DISCLOSURE AGREEMENT" shall mean the Continuing Disclosure
Agreement by and between the Authority and the other parties named on the
signature pages thereof, dated the date of execution and delivery of the Bonds,
as originally executed and as it may be amended form time to time in accordance
with the terms thereof.

     "COSTS OF ISSUANCE" shall mean the costs and expenses incurred by the
Authority or the District to effect the authorization, preparation, issuance,
sale and delivery of the Bonds, including but not limited to any printing costs,
rating agency fees, fees and disbursements of Bond Counsel, fees and
disbursements of the Authority or the District, fees and expenses of the
Authority or the District incurred in connection with issuance of the Bonds, and
initial fees and expenses of the Trustee.

     "CREDIT ENHANCEMENT" shall mean that Collateralized Credit Enhancement
Agreement, dated as of the date hereof, from the Credit Enhancement Provider for
the benefit of the Trustee, together with the Collateral (which shall be pledged
and assigned pursuant thereto by the Bond Pledge and Security Agreement).

     "CREDIT ENHANCEMENT PROVIDER" shall mean BFC Guaranty Corp., a Delaware
corporation.

     "DEBT SERVICE" shall mean, when used with respect to Indebtedness, as of
any date of calculation and with respect to any period the sum of (i) the
interest payable on all such Indebtedness during such period (except to the
extent that such interest is payable from the proceeds of such Indebtedness set
aside for such purpose), and (ii) the principal (or mandatory sinking fund or
redemption fund or installment purchase price or lease rental or similar payment



                                     14

<PAGE>

or deposit) payments on such Indebtedness required in such period; computed on
the assumption that no portion of such Indebtedness shall cease to be
outstanding in such period except by reason of the application of such scheduled
payments; PROVIDED, HOWEVER, that for purposes of such computation if
Indebtedness is secured by a Credit Enhancement, principal payments or deposits
with respect to such Indebtedness nominally due in the last Fiscal Year in which
such Indebtedness matures may, at the option of the Authority, be treated as if
they were due as specified in any loan agreement or reimbursement agreement
issued in connection with such Credit Enhancement or pursuant to the repayment
provisions of such Credit Enhancement and interest on such Indebtedness after
such Fiscal Year shall be assumed to be payable pursuant to the terms of such
loan agreement or reimbursement agreement or repayment provisions; and PROVIDED
FURTHER that if interest on Indebtedness is payable pursuant to a variable
interest rate formula, the interest rate on such Indebtedness for any period
when the actual interest rate cannot be yet determined shall be assumed to be
equal to the greater of (a) the current interest rate calculated pursuant to the
provisions of such agreement, or (b) if available, the weekly average interest
rate on such Indebtedness during the preceding thirty-six (36) months preceding
the date of calculation or if such Indebtedness has not been outstanding for
such 36-month period, such weekly average interest rate on comparable debt (as
determined by the Authority), as set forth in a certificate filed with the
Trustee and the Authority; and provided further that if interest with respect to
such Indebtedness has been capitalized such capitalized interest shall not be
taken into account in making any calculation.

     "DEED OF TRUST" shall mean that certain Deed of Trust, Security Agreement,
Financing Statement and Assignment of Rents and Leases, dated as of the date
hereof, from the Authority for the benefit of the Trustee and the Credit
Enhancement Provider.

     "DEFINITIVE BONDS" shall mean Bonds that are in the form of Bonds included
herein that do not include the information called for by footnote 1.

     "DEPOSITORY" means, with respect to the Book-Entry Bonds, the Person
specified in Section 2.4 hereof as the Depository with respect to the Bonds,
until a successor shall have been appointed and become such Depository pursuant
to the applicable provision of this Indenture, and, thereafter, "Depository"
shall mean or include such successor.

     "DESIGNATED OFFICE OF THE TRUSTEE" shall mean the corporate trust office of
the Trustee in Birmingham, Alabama, which, on the date of the execution of this
Indenture, is located at 100 Office Park Drive, P.O. Box 2554 Birmingham,
Alabama 35290, Attn: Corporate Trust Department.

     "DEVELOPER" shall mean Douglas County Development Corporation, a Colorado
corporation, and its successors and assigns.

     "DEVELOPMENT AGREEMENT" shall mean that certain Development Agreement,
dated as of the date hereof, between the Authority and the Developer and other
owners of property in the 



                                     15

<PAGE>

District or a Related District, and any similar agreement with any owner of 
property in the District or a Related District.

     "DISTRICT" shall mean the Dawson Ridge Metropolitan District No. 5 as the
same is organized and existing under and by virtue of the laws of the State of
Colorado now in effect and as hereafter amended.

     "EFFECTIVE DATE" shall mean the effective date of the Registration
Statement.

     "ELIGIBLE ACCOUNTS" shall mean a segregated trust account or accounts
maintained with the corporate trust department of an Eligible Institution.

     "ELIGIBLE INSTITUTION" shall mean a federal depository institution or
state-chartered depository institution subject to regulations regarding
fiduciary funds on deposit similar to Title 12 of the Federal Code of
Regulations Section 9.10(b) which, in either case, has corporate trust powers,
acting in its fiduciary capacity.

     "EVENT OF DEFAULT" shall have the meaning specified in Section 10.1 hereof.

     "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

     "EXCHANGE OFFER" means the offer that may be made by the Authority pursuant
to the Registration Rights Agreement to exchange Series A Bonds for Series B
Bonds.

     "EXTRA PAYMENTS" shall mean payments with respect to premium, if any, on
the Bonds, interest on the Bonds in excess of the pre-default rate thereon,
Additional Interest and amounts due solely as a result of acceleration of the
Bonds.

     "FEDERAL SECURITIES" shall mean securities of the type described in
paragraphs (a), (b) and (c)(v) of the definition of Investment Securities.

     "FINANCIAL NEWSPAPER OR JOURNAL" shall mean THE WALL STREET JOURNAL and THE
BOND BUYER, and any other newspaper or journal publishing financial news and
selected by the Trustee, whose decision shall be final and conclusive, printed
in the English language, circulated in Denver, Colorado and New York, New York
and customarily published on each business day.

     "HOLDER" or "BONDHOLDER" or "OWNER" shall mean the person in whose name
such Bond shall be registered.

     "INDEBTEDNESS" shall mean any indebtedness or obligation of the Authority
which, in accordance with generally accepted accounting principles, is
classified as a liability on a balance sheet.



                                     16

<PAGE>

     "INDENTURE"  shall mean this Indenture of Trust, as originally executed or
as it may from time to time be supplemented, modified or amended by any
Supplemental Indenture entered into pursuant to the provisions hereof.

     "INFORMATION SERVICES" shall mean Financial Information, Inc.'s "Daily
Called Bond Service," 30 Montgomery Street, 10th Floor, Jersey City, New Jersey
07302, Attention: Editor; Kenny Information Services' "Called Bond Service," 65
Broadway, 20th Floor, New York, New York 10006; Moody's "Municipal and
Government," 99 Church Street, 8th Floor, New York, New York 10007, Attention:
Municipal News Reports; and Standard and Poor's "Called Bond Record," 25
Broadway, 3rd Floor, New York, New York 10004; or to such other addresses and/or
such other services providing information with respect to called bonds as the
Authority may designate to the Trustee in writing.

     "INTEREST FUND" shall mean the fund by such name created by the provisions
of Section 4.1 of this Indenture.

     "INTEREST PAYMENT DATE" shall mean June 1 and December 1 of each year,
commencing with respect to the Series 1996 Bonds, on December 1, 1996.

     "INVESTMENT SECURITIES" shall mean, and includes, any of the following
investments, to the extent permitted or authorized by applicable law at the time
purchased by the Trustee, bearing interest or issued at a discount to the extent
permitted by applicable law:

          (a)  direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (including obligations issued or held in book-entry form on the books of
the Department of the Treasury of the United States of America);

          (b)  bonds, debentures, notes or other evidence of indebtedness issued
or guaranteed by any of the following federal agencies and provided such
obligations are backed by the full faith and credit of the United States of
America (stripped securities are only permitted if they have been stripped by
the agency itself):

               (i)   U.S. Export-Import Bank (direct obligations or fully
          guaranteed certificates of beneficial ownership);

               (ii)  Farmers Home Administration (certificates of beneficial
          ownership);

               (iii) Federal Financing Bank;

               (iv)  General Services Administration participation certificates;



                                     17

<PAGE>

               (v)   Government National Mortgage Association ("GNMA") 
          guaranteed mortgage-backed bonds and pass through certificate 
          obligations;

               (vi)  U.S. Maritime Administration guaranteed Title XI financing
          obligations; or

               (vii) U.S. Department of Housing and Urban Development (HUD)
          project notes, local authority bonds, new communities debentures (U.S.
          guaranteed) and U.S. public housing notes and bonds -- U.S. government
          guaranteed public housing notes and bonds;

          (c)  bonds, debentures, notes or other evidence of indebtedness issued
or guaranteed by any of the following non-full faith and credit U.S. government
agencies (stripped securities are only permitted if they have been stripped by
the agency itself):

               (i)   Federal Home Loan Bank System senior debt obligations;

               (ii)  FHLMC senior debt obligations and participation
          certificates;

               (iii) FNMA mortgage-backed securities and senior debt 
          obligations;

               (iv)  Student Loan Marketing Association senior debt obligations;
          or

               (v)   Resolution Funding Corporation obligations; or

          (d)  money market mutual funds rated AAAm or AAAm-G by Standard &
Poor's Ratings Services, whose investments are limited to securities of the
types listed in (a) through (c) above.

     "LEASE" shall mean that certain U.S. Government Lease for Real Property,
dated August 12, 1994, as supplemented by a Supplemental Lease Agreement No. 1,
dated January 3, 1996, and Supplemental Lease Agreement No. 2, dated March 25,
1996, between the General Services Administration of the United States of
America and Parcel 49C Limited Partnership, a District of Columbia limited
partnership, as the same may be further supplemented or amended.

     "MANDATORY SINKING FUND ACCOUNT PAYMENT DATES" shall mean December 1 of
each of the years specified in Section 4.4 for the payment of Mandatory Sinking
Fund Account Payments.

     "MANDATORY SINKING FUND ACCOUNT PAYMENTS" shall mean the aggregate amounts
required by this Indenture or any Supplemental Indenture or indentures to be
deposited in Sinking Fund Accounts for the payment of Term Bonds.



                                     18

<PAGE>

     "MASTER TRUST AGREEMENT" shall mean the Trust Indenture, dated as of the
date hereof, between BFC Finance Corp. and the Master Trustee.

     "MASTER TRUSTEE" shall mean SouthTrust Bank of Alabama, National
Association, a national banking association with its principal corporate trust
office located in Birmingham, Alabama, or any successor assignee of payments
under the Lease.

     "MAXIMUM AGGREGATE ANNUAL DEBT SERVICE" shall mean Debt Service on all
Indebtedness for the twelve month period ending on the last day of November of
the year in which such Debt Service is the largest.

     "NET INCOME AVAILABLE FOR DEBT SERVICE" shall mean, with respect to any
period, the excess of revenues over operating expenses (before extraordinary
items) of the Authority, determined in accordance with generally accepted
accounting principles, to which shall be added interest, amortization and
depreciation expense and other non-cash charges, each item determined in
accordance with generally accepted accounting principles, and excluding (a) any
profits or losses on the sale or disposition, not in the ordinary course of
business, of investments or fixed or capital assets or resulting from the early
extinguishment of debt, (b) gifts, grants, bequests, donations and
contributions, to the extent specifically restricted by the donor to a
particular purpose inconsistent with their use for the payment of debt service,
(c) the net proceeds of insurance (other than business interruption insurance)
and condemnation awards, and (d) amounts deposited to the designated fund (as
that term is used in the audited financial statements of the Authority) or a
comparable fund or account specified by the Authority.

     "NON-RECOURSE INDEBTEDNESS" shall mean any indebtedness secured by a lien,
which is not a general obligation of the Authority and liability for which is
effectively limited to the property subject to such lien with no recourse to, or
lien upon, directly or indirectly, the Revenues or any other property of the
Authority.

     "NONREGISTRATION" shall have the meaning provided in Section 2.2(e) of this
Indenture.

     "OPERATING AGREEMENT" shall have the meaning set forth in the recitals
hereto.

     "OPINION OF COUNSEL"  shall mean a written opinion of counsel (who may be
counsel for the Authority) appointed by the Authority.  If and to the extent
required by the provisions of Section 6.1, each Opinion of Counsel shall include
the statements provided for in Section 6.1.

     "OPTIONAL REDEMPTION ACCOUNT" shall mean the special account by that name
created pursuant to Section 4.6 hereof.

     "OUTSTANDING"  shall (subject to the provisions of Section 14.6 (c)) mean
all Bonds theretofore authenticated and delivered by the Trustee under this
Indenture except:



                                     19

<PAGE>

          (a)  Bonds theretofore cancelled by the Trustee or surrendered to the
Trustee for cancellation;

          (b)  Bonds for the payment or redemption of which Available Moneys in
the necessary amount shall have theretofore been deposited with the Trustee
(whether upon or prior to the maturity or the redemption date of such Bonds);
provided that, if such Bonds are to be redeemed prior to the maturity thereof,
notice of such redemption shall have been given as provided in Article VIII
provided or provision satisfactory to the Trustee shall have been made for the
giving of such notice; and 

          (c)  Bonds in lieu of, or in substitution for, which other Bonds shall
have been authenticated and delivered by the Trustee pursuant to the terms of
Section 7.5.

     "PERSON"  shall mean an individual, a corporation, a limited liability
company, a partnership, a trust, an unincorporated organization or a government
or any agent or political subdivision thereof.

     "PRINCIPAL FUND" shall mean the fund by such name created by the provisions
of this Indenture.

     "PROJECT" shall have the meaning set forth in the recitals hereto.

     "PROJECT FUND" shall mean the fund by such name created by the provisions
of this Indenture.

     "PROPERTY" shall have the meaning set forth in the recitals hereto.

     "PUBLIC BODY" shall mean the District.

     "RATING AGENCY" shall mean, on any given date, any nationally recognized
rating agency which then has outstanding a credit rating on any of the Bonds (or
other obligations to which reference is made herein).

     "REBATE FUND" shall mean the fund by that name established pursuant to
Section 4.1 hereof.

     "REBATE INSTRUCTIONS" shall mean the instructions delivered to the Trustee
by the Authority pursuant to the Tax Certificate.

     "REBATE REQUIREMENTS" shall have the meaning set forth in the Tax
Certificate.

     "RECORD DATE" shall have the meaning set forth in Section 2.2 hereof.



                                     20

<PAGE>

     "RECREATIONAL FACILITIES AGREEMENT" shall have the meaning set forth in the
recitals hereto.

     "REDEMPTION FUND" shall mean the fund by such name created by the
provisions of this Indenture.

     "REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement,
dated as of the date of this Indenture, by and between the Authority, the Credit
Enhancement Provider and the Underwriter, as such agreement may be amended,
modified or supplemented from time to time.

     "REGISTRATION STATEMENT" means the Registration Statement required to be
filed with respect to the Bonds and the Credit Enhancement pursuant to the
Registration Rights Agreement.

     "REIMBURSEMENT AGREEMENT" shall mean the Reimbursement Agreement, dated as
of the date hereof, between the Authority and the Credit Enhancement Provider,
as the same may be supplemented or amended from time to time.

     "RELATED DISTRICT" or "RELATED DISTRICTS" shall mean any one or more of the
Dawson Ridge Metropolitan Districts Nos. 1-4.

     "REVENUE FUND" shall mean the fund by such name created by the provisions
of this Indenture.

     "REVENUE INTEREST ACCOUNT" shall mean the account by that name created
pursuant to Section 4.1 of this Indenture.

     "REVENUE PRINCIPAL ACCOUNT" shall mean the account by that name created
pursuant to Section 4.1 of this Indenture.

     "REVENUES" shall mean all proceeds, charges, income, rents, receipts,
profits, benefits and existing fund balances of the Authority, exclusive of (i)
payments for Operation and Maintenance Expenses paid by the District pursuant to
the Operating Agreement, (ii) any gifts, grants, bequests, donations and
contributions to the extent specifically restricted by the donor to a particular
purpose inconsistent with their use for Bond payments, and (iii) any payments
received by the Authority pursuant to the Development Agreement.

     "SEC" means the Securities and Exchange Commission.

     "SECURITIES ACT" means the Securities Act of 1933, as amended.

     "SECURITIES DEPOSITORIES" shall mean: The Depository Trust Company, 711
Stewart Avenue, Garden City, New York 11530, Fax (516) 227-4039 or 4190; Midwest
Securities Trust 



                                     21

<PAGE>

Company, Capital Structures-Call Notification, 440 South LaSalle Street, 
Chicago, Illinois 60605, Fax (312) 663-2343; Philadelphia Depository Trust 
Company, Reorganization Division, 1900 Market Street, Philadelphia, 
Pennsylvania 19103, Attention: Bond Department, Fax (215) 496-5058; or to 
such other addresses and/or such other securities depositories as the 
Authority may designate to the Trustee in writing.

     "SERIES A BONDS" shall have the meaning provided in the recitals hereto.

     "SERIES B BONDS" shall have the meaning provided in the recitals hereto.

     "SERIES B REMIC BONDS" shall mean that certain series of obligations
designated "BFC Finance Corp. REMIC Lease-Backed Bonds, Series 1996, Federal
Lease-Backed Class B."

     "SERIES 1996 BONDS" shall have the meaning provided in the recitals hereto.

     "SINKING FUND ACCOUNTS" shall mean any Sinking Fund Accounts established
hereby in the Principal Fund (established pursuant to Section 4.1 hereof) for
the payment of Term Bonds.

     "SPECIAL RECORD DATE" shall have the meaning specified in Section 2.2
hereof.

     "SPECIAL REDEMPTION ACCOUNT" shall mean the special account by that name
created pursuant to Section 4.7 hereof.

     "SUPPLEMENTAL INDENTURE"  shall mean any indenture hereafter duly
authorized and entered into between the Authority and the Trustee in accordance
with the provisions of this Indenture.

     "TAX CERTIFICATE" shall mean the certificate, dated the date of delivery of
the Bonds, executed by the Authority relating to the use of proceeds of the
Bonds and the exclusion from federal income taxation of interest on the Bonds.

     "TIA" shall mean the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-
77bbbb) as in effect on the date on which this Indenture is qualified under the
TIA.

     "TRANSFER RESTRICTED SECURITIES" shall mean the securities that bear or are
required to bear the legend set forth in Section 7.2(g) hereof.

     "TRUSTEE" shall mean SouthTrust Bank of Alabama, National Association, a
national banking association organized and existing under and by virtue of the
laws of the United States of America having a principal corporate trust office
in Birmingham, Alabama, or its successor as Trustee hereunder.



                                     22

<PAGE>

     "TRUST ESTATE"  shall mean all of the property described in the granting
clauses of this Indenture or of any Supplemental Indenture.

     "UNDERWRITER" shall mean Lehman Brothers Inc.

     "WRITTEN CONSENT OF THE AUTHORITY", "WRITTEN ORDER OF THE AUTHORITY",
"WRITTEN REQUEST OF THE AUTHORITY", OR "WRITTEN REQUISITION OF THE AUTHORITY"
shall mean, respectively, a written consent, order, request or requisition
signed by or on behalf of the Authority by its President or by any person
(whether or not an officer of the Authority) who is specifically authorized by
resolution of the District to sign or execute such a document on its behalf.

     Section 1.2    NOTICE TO AUTHORITY, CREDIT ENHANCEMENT PROVIDER AND
TRUSTEE.  Any notice to or demand upon the Trustee may be served or presented in
writing, and such demand may be made, at the Designated Office of the Trustee. 
Any notice to or demand upon the Authority may be served or presented in
writing, and such demand may be made, at Stanford Place III, Suite 902, 4582
South Ulster Street Parkway, Denver, Colorado 80237, or to the Authority at such
other address as may be filed in writing by the Authority with the Trustee.  Any
notice to the Credit Enhancement Provider shall be given in writing, postage
prepaid addressed to BFC Guaranty Corp., 1455 Pennsylvania Avenue, Suite 230,
Washington, D.C. 20004, Attention Roger Bailey, or by telecopy to (202) 639-
0512, Attention President.  Any notice or demand shall be deemed to have been
sufficiently given or served for all purposes by being deposited, postage
prepaid, in a post office letter box, or otherwise delivered by a method of
overnight verifiable delivery, addressed as specified above.  Any notice or
communication shall also be so mailed to any Person described in TIA Section
313(c), to the extent required by the TIA.  Failure to mail a notice or
communication to a Holder or any defect in it shall not affect its sufficiency
with respect to other Holders.  Holders may communicate pursuant to TIA Section
312(b) with other Holders with respect to their rights under this Indenture or
the Bonds.  The Authority and the Trustee and anyone else shall have the
protection of TIA Section 312(c).

     Section 1.3    INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT

     Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.

     The following TIA terms used in this Indenture have the following meanings:

     "INDENTURE SECURITIES" means the Bonds;

     "INDENTURE SECURITY HOLDER" means a Holder of a Bond;

     "INDENTURE TO BE QUALIFIED" means this Indenture;

     "INDENTURE TRUSTEE" OR "INSTITUTIONAL TRUSTEE" means the Trustee;



                                     23

<PAGE>

     "OBLIGOR" on the Bonds means the Authority and any successor obligor upon
the Bonds.

     All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule under the TIA have
the meanings so assigned to them.











                                     24

<PAGE>

                                   ARTICLE II

                                    THE BONDS

     Section 2.1    AUTHORIZATION OF BONDS.  Bonds may be issued hereunder in
order to obtain funds to carry out the purposes of the Authority.  The Bonds are
designated generally as the "Castle Rock Ranch Public Improvements Authority
Public Facilities Revenue Bonds."  This Indenture constitutes a continuing
agreement with the Trustee and Holders of all of the Bonds at any time
outstanding to secure the full and final payment of the principal of and
premium, if any, and interest on all Bonds which may from time to time be
executed and delivered hereunder.

     Section 2.2    TERMS OF BONDS.  

          (a)  The Bonds issued hereunder are designated as the "Castle Rock
Ranch Public Improvements Authority Public Facilities Revenue Bonds, Series
1996." The aggregate principal amount of Series 1996 Bonds which may be issued
and outstanding under this Indenture shall not exceed Sixty-Six Million Nine
Hundred Seventy-Five Thousand dollars ($66,975,000).

          (b)  Interest on the Series 1996 Bonds shall be payable semiannually
on June 1 and December 1 in each year, commencing December 1, 1996.  Subject to
Section 2.2(e) hereof, the Series 1996 Bonds shall mature on December 1 of each
year and bear interest at a rate of interest per annum, computed on the basis of
a 360-day year of twelve 30-day months in accordance with the following
schedule:

     Maturity (December 1)           Amount                  Rate
     ---------------------           -------                 ----
          1999                     $1,980,000               5.750%
          2000                      2,095,000               5.750%
          2001                      2,215,000               5.750%
          2002                      2,340,000               5.750%
          2003                      2,475,000               5.900%
          2004                      2,620,000               6.000%
          2005                      2,780,000               6.100%
          2006                      2,950,000               5.700%
          2007                      3,115,000               6.300%
          2008                      3,310,000               6.400%
          2009                      3,525,000               6.500%
          2011                      7,750,000               6.375%
          2017                     29,820,000               6.250%

The Series 1996 Bonds will be issued as fully registered Bonds, initially as
Book-Entry Bonds, in denominations of one hundred thousand dollars ($100,000) or
any multiple of $5,000 in excess thereof, so long as no Bond shall have
principal maturing in more than one year.

                                     25

<PAGE>

          (c)  Interest on the Series 1996 Bonds is payable in lawful money of
the United States of America by check mailed by first class mail on each
Interest Payment Date to the registered owner as of the close of business on the
15th day of the calendar month immediately preceding such Interest Payment Date
(whether or not a business day) (the "Record Date"); provided, however, that any
owner of $1,000,000 or more of the principal amount of the Bonds may, at any
time prior to a Record Date, give to the Trustee written instructions for
payment of such interest on each succeeding Interest Payment Date by wire
transfer.  Interest on any Bond shall be deemed paid when an interest check is
mailed, postage prepaid by first class mail to the Holder thereof, at the
address indicated on the bond register maintained by the Trustee.  Any such
interest not so timely paid or duly provided for shall cease to be payable to
the person who is the Owner thereof on the Record Date and shall be payable to
the person who is the Owner thereof at the close of business on a special record
date (the "Special Record Date") established for the payment of the defaulted
interest.  Such Special Record Date shall be fixed by the Trustee whenever
moneys become available for payment of the defaulted interest, and notice of the
Special Record Date shall be given to the registered owners of the Series 1996
Bonds not less than ten (10) days prior to the Special Record Date by first-
class mail to each such Owner as shown on the registration books kept by the
Trustee on a date selected by the Trustee.  Such notice shall state the date of
the Special Record Date and the date fixed for the payment of such defaulted
interest.  The principal on the Series 1996 Bonds and premium, if any, thereon
are payable when due upon presentation thereof at the principal corporate trust
office of the Trustee in lawful money of the United States of America.

          (d)  The Series 1996 Bonds shall be dated as of March 1, 1996, and
shall bear interest from the date thereof to the first Interest Payment Date,
and thereafter from the Interest Payment Date next preceding the date of
authentication thereof unless such date of authentication is an Interest Payment
Date, in which event they shall bear interest from such date of authentication,
or unless a Series 1996 Bond is authenticated during the period after a Record
Date but before the next Interest Payment Date, in which event the Series 1996
Bonds shall bear interest from that next Interest Payment Date or, if no
interest has been paid, in which event the Series 1996 Bonds shall bear interest
from March 1, 1996; provided, however, that if, at the time of authentication of
any fully registered Series 1996 Bond, interest is in default thereon, such
fully registered Series 1996 Bond shall bear interest from the Interest Payment
Date to which interest has previously been paid or made available for payment on
the outstanding Series 1996 Bonds.

          (e)  In addition to interest payable pursuant to Section 2.2(b), the
Bonds will bear Additional Interest as provided in this Section 2.2(e).  If (i)
the Registration Statement is not filed with the SEC on or prior to 270 days
after the date of issue of the Bonds, or (ii) the Registration Statement has not
been declared effective by the SEC within 360 days after the date of issue of
the Bonds, or (iii) the Exchange Offer has not been consummated within 30
business days after the Effective Date (each such event referred to in clauses
(i) through (iii), a "Nonregistration"), the Authority will pay additional
interest to each Holder of Transfer Restricted Securities calculated at the rate
of 1% per annum on the principal amount of such Transfer Restricted Securities
during the period (prior to the registration of the Bonds) that any

                                     26

<PAGE>

Nonregistration exists (such interest being "Additional Interest").  Following
registration of the Bonds, the  accrual of Additional Interest will cease. 
Nonregistration is not an Event of Default and will not result in a redemption
or acceleration of the Bonds.  The Credit Enhancement does not provide for the
payment of Additional Interest.  The Authority shall notify the Trustee of a
Nonregistration and of any termination thereof, and shall notify the Trustee of
the registration of the Bonds.  The Trustee shall be entitled to rely
conclusively on such notices.  Notwithstanding any provision of this Indenture
to the contrary (i) Additional Interest shall be paid solely from Revenues, to
the extent available in the Revenue Interest Account, (ii) no Additional
Interest shall be paid while any installment of interest (other than Additional
Interest) on or principal of the Bonds shall remain due and payable or any
amount is due to the Credit Enhancement Provider under the Reimbursement
Agreement, (iii) no acceleration of the Bonds shall occur as the result of
nonpayment of Additional Interest, and (iv) neither an event of nonpayment of
Additional Interest nor a Nonregistration shall constitute or give rise to an
Event of Default hereunder.

     Section 2.3    TERMS OF REDEMPTION.

          (a)  MANDATORY SINKING FUND REDEMPTION.  The Series 1996 Bonds shall
be subject to mandatory sinking fund redemption as provided in Section 4.6
hereof. 

          (b)  EXTRAORDINARY MANDATORY REDEMPTION.  The Bonds are subject to
extraordinary mandatory redemption in whole from proceeds of prepayment or
liquidation or redemption (other than mandatory sinking fund redemption) of
Collateral consisting of Series B REMIC Bonds in accordance with the terms
thereof.

          (c)  REDEMPTION PROCEDURE.  Bonds shall be redeemed in accordance with
the procedures set forth in Article VIII hereof.

     Section 2.4    USE OF DEPOSITORY.  Except as may be provided by
Supplemental Indenture and notwithstanding any provision of the Indenture to the
contrary:

          (a)  The Bonds shall initially be evidenced by one Bond for each year
in which the Bonds mature in denominations equal to the aggregate principal
amount of the Bonds maturing in that year.  Such Bonds shall be registered in
the name of "Cede & Co." as nominee for The Depository Trust Company, the
Depository for the Bonds.  Registered ownership of the Bonds, or any portions
thereof, may not thereafter be transferred except:

               (i)  To any successor of The Depository Trust Company or its
     nominee, or to any substitute Depository designated pursuant to clause (ii)
     of this subsection (a) ("Substitute Depository"); provided that any
     successor of The Depository Trust Company or substitute depository shall be
     qualified under any applicable laws to provide the service proposed to be
     provided by it; 

                                     27

<PAGE>

               (ii) To any substitute Depository not objected to by the Trustee,
     upon (1) the resignation of The Depository Trust Company or its successor
     (or any substitute depository or its successor) from its functions as
     Depository, or (2) a determination by the Authority that The Depository
     Trust Company or its successor (or any Substitute Depository or its
     successor) is no longer able to carry out its functions as Depository;
     provided that any such Substitute Depository shall be qualified under any
     applicable laws to provide the services proposed to be provided by it; or

               (iii)     To any person as provided below, upon (1) the
     resignation of The Depository Trust Company or its successor (or Substitute
     Depository or its successor) from its functions as Depository; provided
     that no Substitute Depository which is not objected to by the Trustee can
     be obtained, or (2) a determination by the Authority that it is in the best
     interests of the Authority to remove The Depository Trust Company or its
     successor (or any Substitute Depository or its successor) from its function
     as Depository.

          (b)  In the case of any transfer pursuant to clause (i) or clause (ii)
of subsection 2.4(a) hereof, upon receipt of all Outstanding Bonds by the
Trustee, together with a Certificate of the Authority to the Trustee, a single
new Bond for each maturity shall be executed and delivered, registered in the
name of such successor or such Substitute Depository, or their nominees, as the
case may be, all as specified in such Certificate of the Authority.  In the case
of any transfer pursuant to clause (iii) of subsection 2.4(a) hereof, upon
receipt of all Outstanding Bonds by the Trustee together with a Certificate of
the Authority to the Trustee, new Bonds shall be executed and delivered in such
denominations and registered in the names of such persons as are requested in
such Certificate of the Authority; provided the Trustee shall not be required to
deliver such new Bonds within a period less than 60 days from the date of
receipt of such Certificate of the Authority.

          (c)  In the case of partial redemption, cancellation or an advance
refunding of any Bonds maturing in a particular year, The Depository Trust
Company shall make an appropriate notation on such Bonds indicating the date and
amounts of such reduction in principal, in form acceptable to the Trustee.

          (d)  The Authority and the Trustee shall be entitled to treat the
person in whose name any Bond is registered as the Owner thereof for all
purposes of the Indenture and any applicable laws, notwithstanding any notice to
the contrary received by the Trustee or the Authority; and the Authority and the
Trustee shall have no responsibility for transmitting payments to, communicating
with, notifying, or otherwise dealing with any beneficial owners of the Bonds. 
Neither the Authority nor the Trustee will have any responsibility or
obligations, legal or otherwise, to the beneficial owners or to any other party
including The Depository Trust Company or its successor (or Substitute
Depository or its successor), except for the Owner of any Bond.

                                     28

<PAGE>

          (e)  So long as all outstanding Bonds are registered in the name of
"Cede & Co." or its registered assign, the Authority and the Trustee shall
cooperate with "Cede & Co.", as sole registered Owner, and its registered
assigns in effecting payment of the principal, redemption premium, if any, and
interest on the Bonds by arranging for payment in such manner that funds for
such payments are properly identified and are made immediately available on the
date they are due.

                                     29

<PAGE>

                                   ARTICLE III

                           ISSUE OF SERIES 1996 BONDS

     Section 3.1    AUTHENTICATION AND DELIVERY OF BONDS.  The Trustee,
forthwith upon the execution and delivery of this Indenture, upon the execution
and delivery to it by the Authority of the Series 1996 Bonds, as hereinabove
provided, and without any further action on the part of the Authority, shall
authenticate Series 1996 Bonds in an aggregate principal amount of not exceeding
Sixty-Six Million Nine Hundred Seventy-Five Thousand dollars ($66,975,000.00),
and shall deliver them to or upon the Written Order of the Authority.

     Section 3.2    APPLICATION OF PROCEEDS OF SERIES 1996 BONDS.  The proceeds
received by the Authority (net of the underwriter's discount of $1,272,062.50)
from the sale of the Series 1996 Bonds shall be deposited in the following funds
and accounts:

          (a)  accrued interest on the Series 1996 Bonds from their dated date
to the date of delivery, shall be deposited in the Capitalized Interest Account
of the Interest Fund;

          (b)  $7,729,585.70 shall be deposited in the Capitalized Interest
Account; 

          (c)  $511,866.00 shall be deposited in the Costs of Issuance Account;

          (d)  $4,018,500.00 shall be paid to the Credit Enhancement Provider as
its fee for the Credit Enhancement; and

          (e)  the remainder of the proceeds from the sale of the Series 1996
Bonds ($54,550,000.00) shall be deposited in the Project Fund.

     Section 3.3    PROJECT FUND; COSTS OF ISSUANCE ACCOUNT.  The Authority
shall establish, maintain and hold a separate fund to be known as the "Project
Fund."  The proceeds of the Bonds deposited in the Project Fund shall be applied
for the purpose of providing funds for the acquisition of the Property and of
expenses incident to the Project, including architectural and engineering fees
and expenses, tests and inspection, surveys, land acquisition, the fees and
expenses of the Trustee, Costs of Issuance and all other expenses in connection
with the preparation, issuance and delivery of the Bonds, legal fees and
expenses of counsel, and similar expenses.

     Before any expenditure is made from the Project Fund, the Authority shall
determine that the entire sum of the expenditures then to be made and of all
other expenditures previously made from the Project Fund have been used to
finance the acquisition of the Property and expenses incident thereto, all of
which property other than land is of a character subject to the allowance for
depreciation under Section 167 of the Code. 

                                     30

<PAGE>

     When acquisition of the Property shall have been completed, the Authority
shall transfer any remaining balance in the Project Fund to the Trustee for
deposit into the Redemption Holding Account as provided in Section 4.7 hereof.

     Within the Project Fund, there shall be created the "Costs of Issuance
Account" from which account costs of issuance of the Series 1996 Bonds shall be
paid.  Any moneys remaining in the Costs of Issuance Account on September 29,
1996 shall be transferred by the Authority to the Project Fund.

     Section 3.4    CAPITALIZED INTEREST ACCOUNT.  Moneys in the Capitalized
Interest Account shall be applied by the Trustee  in the amounts necessary to
pay interest becoming due and payable on the next ensuing Interest Payment Date
of the Series 1996 Bonds then Outstanding (other than Additional Interest and
any other interest constituting Extra Payments), until such amount is exhausted.
 
     Section 3.5    [Reserved]

     Section 3.6    SUBORDINATE INDEBTEDNESS.  So long as any of the Bonds
remain Outstanding, the Authority will not issue any additional bonds or
obligations payable from Revenues or having a lien upon the Trust Estate having
priority over, or on a parity with, the Bonds.

     The Authority may incur any Indebtedness secured by a lien or encumbrance
which is expressly stated to be junior and subordinate to the lien and
encumbrance upon the Revenues created hereunder and to the Deed of Trust except
as hereinafter provided.  No such subordinate indebtedness shall be secured by
the Credit Enhancement or the Collateral.  No such subordinate indebtedness
shall be issued without the consent of the Credit Enhancement Provider. 
Subordinate indebtedness will have no rights of acceleration or foreclosure.

                                     31

<PAGE>

                                   ARTICLE IV

                         REVENUES AND CREDIT ENHANCEMENT

     Section 4.1    ESTABLISHMENT OF FUNDS AND ACCOUNTS.  The following funds
and accounts shall be established by the Trustee pursuant to the provisions of
this Indenture:

     (a)  Project Fund; and within the Project Fund, the Costs of Issuance
Account

     (b)  Revenue Fund

     (c)  Collateralized Credit Fund

     (d)  Interest Fund, and within the Interest Fund, the following accounts:

          (i)   Capitalized Interest Account
          (ii)  Collateralized Credit Interest Account
          (iii) Revenue Interest Account

     (e)  Principal Fund, and within the Principal Fund, the following accounts:

          (i)   Collateralized Credit Principal Account
          (ii)  Revenue Principal Account
          (iii) The Sinking Fund Accounts provided for in Section 4.6

     (f)  Redemption Fund, and within the Redemption Fund, the following
accounts:

          (i)   Special Redemption Account
          (ii)  Redemption Holding Account

     (g)  Rebate Fund

     Section 4.2    CREDIT ENHANCEMENT; SOURCE OF PAYMENT.

     (a)  So long as the Credit Enhancement is in effect and no Event of Default
exists thereunder, all payments of principal and interest on the Series 1996
Bonds (except for interest for the period prior to March 1, 1998, Additional
Interest, other Extra Payments and amounts payable on redemption pursuant to
Section 9.10(c) hereof) shall be made from the proceeds of draws on the Credit
Enhancement which shall be deposited directly in the Collateralized Credit Fund.
Pursuant to the Bond Pledge and Security Agreement, all payments in regard to
the Collateral are to be made directly to the Trustee, and shall be deposited in
the Collateralized Credit Fund.  To the extent that the amount in the
Collateralized Credit Fund is insufficient on any Interest Payment Date to pay
interest (other than interest for the period prior to March 1, 1998, Additional
Interest, any other interest constituting Extra Payments and interest due as a

                                     32

<PAGE>

result of redemption pursuant to Section 9.10(c)) and principal due and payable
on the Series 1996 Bonds on such Interest Payment Date (other than amounts
payable on redemption pursuant to Section 9.10(c) hereof), the Trustee shall
demand that the Credit Enhancement Provider immediately deposit the amount of
such deficiency in the Collateralized Credit Fund.

     (b)  Monies on deposit in the Collateralized Credit Account shall be
applied as follows:

          (i)  When due, the amount necessary to pay fees and expenses of the
     Trustee in an amount not to exceed the amounts on the dates specified in
     Schedule I hereto, shall be transferred to the Trustee.

          (ii) On each Interest Payment Date, the amount required to pay
     interest due and payable on the Series 1996 Bonds on such Interest Payment
     Date (other than interest for the period prior to March 1, 1998, Additional
     Interest and any other interest which is an Extra Payment and interest due
     as a result of redemption pursuant to Section 2.3(b) or 9.10(c) hereof)
     shall be transferred to the Collateralized Credit Interest Account where it
     shall be held separate and apart from any other amounts in the Interest
     Fund.

          (iii)     On each Interest Payment Date, the amount, if any, required
     to pay principal on the Series 1996 Bonds due and payable on such Interest
     Payment Date (other than as a result of redemption pursuant to Section
     2.3(b) or Section 9.10(c) hereof) shall be transferred to the
     Collateralized Credit Principal Account, where it shall be held separate
     and apart from any other amounts in the Principal Fund.

          (iv) On each Interest Payment Date, any amounts received by the
     Trustee as proceeds of prepayment or liquidation or redemption of the
     Series B REMIC Bonds held as Collateral shall be transferred by the Trustee
     to the Special Redemption Account and used to redeem Series 1996 Bonds
     pursuant to Sections 2.3(b) and 4.7 hereof.

          (v)  On each Interest Payment Date, any remaining amount in the
     Collateralized Credit Fund on such Interest Payment Date shall be paid by
     the Trustee to the Credit Enhancement Provider, unless the Credit
     Enhancement Provider is in default with respect to its obligations under
     the Credit Enhancement Agreement, in which event such amount shall remain
     in the Collateralized Credit Fund until such default has been cured or
     otherwise waived by the Trustee.

          (vi) The Trustee shall have the obligation to hold and maintain the
     Credit Enhancement for the benefit of the owners of Series 1996 Bonds in
     accordance with its terms.  If at any time during the term of the Credit
     Enhancement any successor Trustee shall be appointed and qualified under
     this Indenture, the resigning Trustee shall request that the provider of
     such Credit Enhancement transfer or cause the transfer of the Credit
     Enhancement and the Collateral to the successor Trustee.  If the resigning
     Trustee fails to make this request, the successor Trustee shall do so
     before accepting appointment.

                                     33

<PAGE>

     Section 4.3    PLEDGE; REVENUE FUND.

          (a)  Subject only to the provisions of this Indenture permitting the
application thereof for the purposes and on the terms and conditions set forth
herein and therein, the Authority does hereby pledge, in order to secure the
payment of the principal of, premium, if any, and interest on the Bonds in
accordance with their terms and the provisions of this Indenture, all of the
Revenues and any other amounts (including proceeds of the sale of Bonds) held in
any fund or account established pursuant to this Indenture other than the Rebate
Fund.  Said pledge shall constitute a lien on and security interest in such
assets for the payment of the Bonds in accordance with their terms.

          (b)  The Authority agrees that, so long as any of the Bonds remain
Outstanding, all of the Revenues of the Authority shall be deposited as soon as
practicable upon receipt in a fund hereby created and designated as the "Revenue
Fund" which the Authority shall establish and maintain hereunder in an account
to be held by the Trustee.  Subject only to the provisions of this Indenture
permitting the application thereof for the purposes and on the terms and
conditions set forth herein, the Authority hereby pledges and, to the extent
permitted by law, grants a security interest to the Trustee in the Revenue Fund
to secure the payment of the principal of, premium, if any, and interest on the
Bonds.

     Section 4.4    ALLOCATION OF REVENUES.

     On or before each Interest Payment Date, the Trustee shall transfer from
the Revenue Fund and deposit into the following respective accounts or transfer
the respective amount directly, as hereinafter provided, the following amounts,
in the following order of priority, the requirements of each such account
(including the making up of any deficiencies in any such account resulting from
lack of moneys sufficient to make any earlier required deposit) at the time of
deposit to be satisfied before any transfer is made to any account subsequent in
priority:

          (i)  Available Moneys to the Revenue Interest Account, in an amount
     equal to the aggregate amount of interest becoming due and payable on the
     next such Interest Payment Date on all Bonds then Outstanding (other than
     Additional Interest or other interest constituting Excess Payments or
     interest payable as a result of redemption pursuant to Section 2.3(b) or
     9.10(c) hereof) less any amounts to be transferred to the Interest Fund
     from the Capitalized Interest Account as capitalized interest and less any
     amounts transferred to the Collateralized Credit Interest Account for the
     payment of such interest; 

          (ii) Available Moneys to the Revenue Principal Account, in an amount
     equal to the aggregate amount of principal, if any, becoming due and
     payable on the Outstanding Bonds (including any mandatory sinking fund
     payments required to be paid into the respective Sinking Fund Accounts for
     Outstanding Bonds but excluding principal due as a result of redemption
     pursuant to Section 2.3(b) or 9.10(c) hereof) on the next 

                                     34

<PAGE>

     ensuing Interest Payment Date, less any transfers from the Collateralized
     Credit Principal Account for the payment of such principal; 

          (iii)     To the extent that the amounts described in (i) and (ii)
     above are not transferred to the Revenue Interest Account or the Revenue
     Principal Account solely because the funds in the Revenue Fund are not
     Available Moneys, such funds shall be retained in the Revenue Account until
     (A) they are Available Moneys and are used to make the transfers provided
     for in (i) and (ii) or (B) such transfers are made from another source of
     Available Moneys.  In addition, if no Mandatory Sinking Fund Account
     Payment is due on such Interest Payment Date, an amount equal to half of
     the Mandatory Sinking Fund Payment due on the next Interest Payment Date
     shall be retained in the Revenue Fund.

          (iv) Any remaining amount in the Revenue Fund shall be transferred to
     the Rebate Fund to the extent required by the Rebate Instructions, to be
     applied by the Trustee in accordance therewith.

          (v)  Any remaining amount in the Revenue Fund shall be transferred to
     the Credit Enhancement Provider to the extent of an amount equal to amounts
     drawn under the Credit Enhancement and applied to the payment of principal
     of or interest on the Bonds, and any other amounts due by the Authority to
     the Credit Enhancement Provider under the Reimbursement Agreement, together
     with interest thereon as determined pursuant to the Reimbursement
     Agreement, to the extent a request for the same has been submitted to the
     Trustee by the Credit Enhancement Provider or otherwise provided pursuant
     to the Credit Enhancement, and to the extent not previously reimbursed to
     the Credit Enhancement Provider by the Trustee from Revenues, unless a
     default by the Credit Enhancement Provider has occurred and is continuing
     under the Credit Enhancement, in which event such amount shall remain in
     the Revenue Fund until such default has been cured or otherwise waived by
     the Trustee, at which time such amount shall be paid to the Credit
     Enhancement Provider; provided that until there is an amount in the Revenue
     Fund sufficient to pay any accrued but unpaid Additional Interest and any
     Additional Interest first becoming due on the next Interest Payment Date,
     any Revenue received pursuant to the Development Agreement shall be
     transferred to the Revenue Interest Account to pay Additional Interest.

          (vi) Any remaining amount in the Revenue Fund shall be transferred to
     the Revenue Interest Account to the extent necessary for the payment of
     Additional Interest or any other interest constituting Extra Payments, to
     be applied to pay such interest in the order in which it accrued.

          (vii)     Any remaining amount in the Revenue Fund shall be applied to
     the extent necessary to pay any other Extra Payments in the order in which
     such Extra Payments become due and payable.

                                     35

<PAGE>

          (viii)    Any remaining amount in the Revenue Fund shall be applied by
     the Trustee to the extent necessary to pay any Trustee and other fees and
     expenses then due and payable under this Indenture in the order that such
     amounts become due and payable.

          (ix) Any moneys remaining in the Revenue Fund after the foregoing
     transfers may be used by the Authority for any lawful purpose.

     Section 4.5    APPLICATION OF INTEREST FUND.  

     All Available Moneys on deposit in the Interest Fund shall be used and
withdrawn by the Trustee without the necessity of depositing any amounts in any
account of the Interest Fund solely for the purpose of paying the interest on
the Bonds as it shall become due and payable; provided that Additional Interest,
any other interest constituting Extra Payments, and any interest due as a result
of redemption pursuant to Section 2.3(b) and 9.10(c) hereof shall be paid from
the sources and in the priorities provided in Section 4.2, 4.3, 4.6 and 9.10(c)
hereof.

     Section 4.6    APPLICATION OF PRINCIPAL FUND.

          (a)  All Available Moneys on deposit in the Principal Fund shall be
used and withdrawn by the Trustee solely for the purposes of paying the
principal of the Bonds when due and payable, except that all amounts in the
Sinking Fund Accounts shall be used and withdrawn by the Trustee solely to
purchase or redeem or pay at maturity the respective Term Bonds, as provided
herein, and that principal due as a result of redemption pursuant to Section
2.3(b) and 9.10(c) hereof shall be paid solely from the Redemption Fund.

          (b)  The Trustee shall establish and maintain within the Principal
Fund a separate account for the Term Bonds of each maturity, designated as the
"Sinking Fund Account," inserting therein the maturity (if more than one such
account is established) designation of such Bonds.  On or before each Interest
Payment Date, the Trustee shall transfer Available Moneys deposited in the
Principal Fund pursuant to Sections 4.2 and 4.4 for the purpose of making a
Mandatory Sinking Fund Account Payment (if such deposit is required in such
month) from the Principal Fund to the applicable Sinking Fund Account.  With
respect to each Sinking Fund Account, on each Mandatory Sinking Fund Account
Payment Date established for such Sinking Fund Account, the Trustee shall apply
the Mandatory Sinking Fund Account Payment required on that date to the
redemption (or payment at maturity, as the case may be) of Term Bonds of the
series and maturity for which such Sinking Fund Account was established, upon
the notice and in the manner provided in Article VIII; provided that, at any
time prior to giving such notice of such redemption, the Trustee upon the
Written Order of the Authority shall apply moneys in such Sinking Fund Account
to the purchase by the Authority of Term Bonds of such series and maturity at
public or private sale, as and when and at such prices (including brokerage and
other charges, but excluding accrued interest, which is payable from the
Interest Fund) as shall be directed by the Authority, except that the Authority
shall not direct the Trustee to apply moneys in the Sinking Fund Account to such
purchase if the purchase price (excluding accrued interest) exceeds the
Redemption Price that would be payable for such Bonds upon redemption by
application of such Mandatory Sinking Fund Account Payment.  If, during the
twelve-month period immediately preceding said Mandatory Sinking Fund Account
Payment 

                                     36

<PAGE>

Date, the Trustee upon Written Order of the Authority has purchased Term Bonds 
of such series and maturity with moneys in such Sinking Fund Account, or,
during said period and prior to giving said notice of redemption, the Authority
has deposited Term Bonds of such series and maturity with the Trustee, or Term
Bonds of such series and maturity were at any time purchased or redeemed by the
Trustee from the Redemption Fund and allocable to said Mandatory Sinking Fund
Account Payment, such Bonds so purchased or deposited or redeemed shall be
applied, to the extent of the full principal amount thereof, to reduce said
Mandatory Sinking Fund Account Payment.  All Bonds purchased or deposited
pursuant to this subsection shall be cancelled and destroyed.  Any amounts
remaining in a Sinking Fund Account when all of the Term Bonds for which such
account was established are no longer outstanding shall be withdrawn by the
Trustee and transferred to the Revenue Fund.  Subject to a different allocation
provided in a Supplemental Indenture for a series of Bonds issued pursuant to
such Supplemental Indenture, all Term Bonds purchased from a Sinking Fund
Account or deposited by the Authority with the Trustee shall be allocated first
to the next succeeding Mandatory Sinking Fund Account Payment for such series
and maturity of Bonds, then to such Mandatory Sinking Fund Account Payments for
such series and maturity as may be specified by the Authority (or, if the
Authority fails to so specify, pro rata to the remaining Mandatory Sinking Fund
Account Payments required for such series and maturity of Bonds in proportion to
the amount of such Mandatory Sinking Fund Account Payments).

          (c)  Subject to the provisions of paragraph (b) above, the Trustee
shall establish and maintain within the Principal Fund a separate account for
the Series 1996 Term Bonds maturing on December 1, 2011, designated as the
"(2011 Maturity) Sinking Fund Account".  The Mandatory Sinking Fund Account
Payment Dates and the Mandatory Sinking Fund Account Payments for such account
shall be as follows:

         Mandatory Sinking Fund Account                Mandatory Sinking
           Payment Date (December 1)                  Fund Account Payment
         ------------------------------               ---------------------
                    2010                                    $3,755,000
                    2011*                                    3,995,000

     *  Final Maturity

          (d)  Subject to the provisions of paragraph (b) above, the Trustee
shall establish and maintain within the Principal Fund a separate account for
the Series 1996 Term Bonds maturing on December 1, 2017, designated as the
"(2017 Maturity) Sinking Fund Account".  The Mandatory Sinking Fund Account
Payment Dates and the Mandatory Sinking Fund Account Payments for such account
shall be as follows:

         Mandatory Sinking Fund Account                Mandatory Sinking
           Payment Date (December 1)                  Fund Account Payment
         ------------------------------               --------------------
                    2012                                    $4,250,000
                    2013                                     4,515,000
                    2014                                     4,795,000

                                     37 

<PAGE>

                    2015                                     5,095,000
                    2016                                     5,415,000
                    2017*                                    5,750,000

          *  Final Maturity

     Section 4.7    APPLICATION OF REDEMPTION FUND.  The Trustee shall establish
and maintain the Redemption Fund which the Trustee shall hold in trust, and
shall establish therein a separate Redemption Holding Account and a separate
Special Redemption Account.  The Authority shall deposit in the Special
Redemption Account amounts required for redemption of the Bonds pursuant to
Section 2.3(b) hereof.  All amounts deposited in the Special Redemption Account
shall be used and withdrawn by the Trustee solely for the purpose of redeeming
Bonds, in the manner and upon the terms and conditions specified in Section
2.3(b) and Article VIII hereof, at the next succeeding date of redemption for
which notice has been given and at the redemption prices then applicable to any
redemptions of the Bonds otherwise permitted hereunder; provided that, at any
time prior to giving such notice of redemption, the Trustee shall, upon Written
Order of the Authority, apply such amounts to the purchase of Bonds by the
Authority at public or private sale, as and when and at such prices (including
brokerage and other charges, but excluding accrued interest, which is payable
from the Interest Fund) as shall be directed by the Authority, except that the
Authority shall not direct such purchase if the purchase price (exclusive of
accrued interest) exceeds the principal amount of such Bonds.  All Term Bonds
purchased or redeemed from the Redemption Fund shall be allocated first to the
next succeeding Mandatory Sinking Fund Account Payment for such maturity of
Bonds, then to such Mandatory Sinking Fund Account Payments for such maturity as
may be specified by the Authority (or if the Authority fails to so specify, pro
rata to the remaining Mandatory Sinking Fund Account Payments required for such
series and maturity of Bonds in proportion to the amount of such Mandatory
Sinking Fund Account Payments).

     The moneys deposited in the Redemption Holding Account pursuant to Section
3.3 or Section 9.10 hereof shall be used and applied to the call and redemption
of Bonds in authorized denominations to the maximum degree permissible, and at
the earliest possible dates at which such Bonds can be redeemed without payment
of premium pursuant to this Indenture, or the payment of obligations of the
Authority to the Credit Enhancement Provider under the Reimbursement Agreement,
unless, in either case, in the opinion of Bond Counsel a different application
of such moneys would not cause interest on the Bonds to become includable in
gross income for federal income tax purposes or is necessary to assure that
interest on the Bonds is not includable in gross income for federal income tax
purposes.  Notwithstanding Section 4.8, the moneys in the Redemption Holding
Account shall be invested by the Trustee, pursuant to a Written Request of the
Authority at a yield no higher than the yield on the Outstanding Bonds (unless
in the opinion of Bond Counsel investment at a higher yield would not cause
interest on the Bonds to become includable in gross income for federal income
tax purposes), and all such investment income shall be deposited in the
Redemption Holding Account and expended or reinvested as provided above.

                                     38 
<PAGE>

     Section 4.8  INVESTMENT OF MONEYS IN FUNDS AND ACCOUNTS. (a) Subject to
the provisions of Section 4.9 hereof, all moneys in any of the funds and
accounts established pursuant to this Indenture and held by the Trustee shall be
invested by the Trustee as directed by the Authority in writing solely in
Investment Securities.  Investment Securities may be purchased at such prices
determined by the Authority.  The Authority shall direct such investment so that
all Investment Securities shall be acquired subject to the limitations set forth
in Section 5.8, the limitations as to maturities hereinafter in this Section set
forth and such additional limitations or requirements consistent with the
foregoing as may be established by Written Request of the Authority.  Absent the
direction of the Authority in the manner set forth above, the Trustee shall
invest only in Federal Securities.  The foregoing provision of this Section
4.8(a) are subject to the limitation that all investments held in any fund or
account hereunder shall mature at such times (without reinvestment thereof or of
investment income thereon) so as to assure the amounts necessary for the
intended purpose of such fund or account.

          (b)  All interest, profits and other income received from the
investment of moneys in any other fund or account established pursuant to this
Indenture shall be credited to the fund or account for the credit of which such
investment was acquired, provided that all interest, profits and other revenues
from the investment of the Project Fund shall be deposited to the Revenue Fund
and used solely for the purposes set forth in Section 4.4(i) through (iv) and
shall be applied to such purposes prior to any other revenues.

          (c)  The Trustee may act as principal or agent in the making or
disposing of any investment and may impose its customary charges therefor.  The
Trustee may sell at the best price obtainable, or present for redemption, any
Investment Securities so purchased whenever it shall be necessary to provide
moneys to meet any required payment, transfer, withdrawal or disbursement from
the fund or account to which such Investment Security is credited, and the
Trustee shall not be liable or responsible for any loss resulting from any
investment made in accordance with this Section.

     Section 4.9   ESTABLISHMENT AND APPLICATION OF THE REBATE FUND. (a) The
Trustee shall establish and maintain a fund separate from any other fund
established and maintained hereunder designated as the Rebate Fund.  The Trustee
shall maintain in such Rebate Fund such accounts as the Authority determines
shall be necessary to comply with the terms and conditions of the Tax
Certificate as directed by the Authority.  Subject to the transfer provisions
provided in paragraph (e) below, all money at any time deposited in the Rebate
Fund shall be held by the Trustee in trust, to the extent required to satisfy
the Rebate Requirement (as defined in the Tax Certificate), for payment to the
federal government of the United States of America and neither the Authority nor
the Holder of any Bonds shall have any rights in or claim to such money.  All
amounts deposited into or on deposit in the Rebate Fund shall be governed by the
provisions of this Section, Section 5.8 of this Indenture and the Tax
Certificate (which is incorporated herein by reference).  The Trustee shall be
deemed conclusively to have complied with such provisions if it follows the
written directions of the Authority including supplying all necessary
information in the manner provided in the Tax Certificate and shall not be
required to take any action thereunder in the absence of written directions by
the Authority.

                                     39 

<PAGE>

          (b)  Upon the Authority's written direction, an amount shall be
deposited to the Rebate Fund by the Trustee from deposits by the Authority from
the Revenue Fund if and to the extent required, so that the balance of the
Rebate Fund after such deposit shall equal the Rebate Requirement.  Computations
of the Rebate Requirement shall be furnished by or on behalf of the Authority in
accordance with the Tax Certificate.

          (c)  The Trustee shall have no obligation to rebate any amounts
required to be rebated pursuant to this Section, other than from moneys held in
the Rebate Fund or from other moneys provided to it by the Authority.

          (d)  At the written direction of the Authority, the Trustee shall
invest all amounts held in the Rebate Fund in Investment Securities as directed
by the Authority, subject to the restrictions set forth in the Tax Certificate. 
Money shall not be transferred from the Rebate Fund except as provided in
paragraph (e) below.

          (e)  Upon receipt of and in accordance with the Authority's written
directions, the Trustee shall remit part or all of the balances in the Rebate
Fund to the United States.  Subject to Section 5.8, if the Authority so directs,
the Trustee will deposit moneys into or transfer moneys out of the Rebate Fund
from or into such accounts or funds in accordance with the Authority's written
direction.  Any moneys remaining in the Rebate Fund after redemption and payment
of all of the Bonds and payment and satisfaction of any Rebate Requirement, or
provision having been made therefor satisfactory to the Trustee, shall be
withdrawn and remitted to the Authority.

          (f)  Notwithstanding any other provision of this Indenture, including
in particular Article XIII hereof, but subject to subparagraph (g) below, the
obligation to remit the Rebate Requirements to the United States and to comply
with all other requirements of this Section, Section 5.8 of the Indenture and
the Tax Certificate shall survive the defeasance or payment in full of the
Bonds.

          (g)  Notwithstanding any provision of this Indenture to the contrary,
including, without limitation, those in Sections 4.9 and 5.8 hereof, the Trustee
shall not be liable or responsible for any calculation or determination which
may be required in connection with or for the purpose of complying with Section
148 of the Code or any applicable Treasury regulations, including, without
limitation, the calculation of amounts required to be paid to the United States
under the provisions of such Section 148 of the Code and the applicable Treasury
regulations, the maximum amount which may be invested in "nonpurpose
obligations" as defined in the Code and the fair market value of any investments
made hereunder, and the sole obligation of the Trustee with respect to
investments of funds hereunder shall be to invest the moneys received by the
Trustee in Investment Securities pursuant to the instructions of the Authority. 
The Trustee shall have no responsibility for determining whether or not the
investments made pursuant to the direction of the Authority comply with this
Indenture or with the Tax Certificate or any other document or agreement or any
requirement of law.

                                     40 
<PAGE>

                                    ARTICLE V

                         REPRESENTATIONS, WARRANTIES AND
                           COVENANTS OF THE AUTHORITY

     Section 5.1    REPRESENTATIONS AND WARRANTIES OF THE AUTHORITY.  So long 
as any of the Bonds remain Outstanding, the Authority makes the following
representations and warranties to the Bondholders and the Trustee:

          (a)  The Authority is a corporate instrumentality of the District
within the meaning of Section 3.041(a) of Revenue Procedure 82-26 and Revenue
Ruling 57-128 and within the meaning of Section 11-51-307, Colorado Revised
Statutes, as amended, and a nonprofit corporation duly incorporated and in good
standing under the laws of the State of Colorado, has full legal right, power
and authority to enter into this Indenture and to carry out and consummate all
transactions contemplated by this Indenture, and by proper corporate action has
duly authorized the execution and delivery of this Indenture.

          (b)  The activities and purposes of the Authority are those permitted
under the nonprofit corporation law of the State of Colorado and the property to
be provided by the Bonds is located within the geographic boundaries of the
District or has a substantial connection with the District.

          (c)  The Authority is located in the State of Colorado and its
articles of incorporation provide that the Authority is not organized for
profit.

          (d)  The articles of incorporation of the Authority also provide that
corporate income will not inure to any private person and the Authority hereby
represents and warrants that corporate income will not inure to any private
person.

          (e)  The Bonds of the Authority shall be issued pursuant to Revenue
Procedure 82-26 and will be issued solely on behalf of the District.

          (f)  All of the original proceeds and investment proceeds of the Bonds
will be used to provide tangible real or personal property or any costs of
issuance of the Bonds in accordance with Revenue Procedure 82-26.  For purposes
of this paragraph, proceeds will be considered to provide tangible real and
personal property only if the proceeds are (i) used to finance costs that a
taxpayer must charge to the property's capital account, may elect to charge to
property's capital account instead of deducting, or may elect to deduct instead
of charging to the property's capital account, and (ii) used to fund a
reasonably required reserve fund.  The foregoing does not apply to a de minimis
amount, less than $5,000, that is included in the bond issue solely for the
purpose of rounding the dollar amount of the issue.  For purposes of this
section, "original proceeds" are amounts (after payment of all expenses of
issuing the Bonds) received at any time as a result of the sale of the Bonds. 
For purposes of this section, investment proceeds are amounts (net of
administrative costs) that result from the investment of 



                                     41

<PAGE>

any proceeds of the Bonds, but investment proceeds do not include amounts 
earned after the date that (1) the construction, reconstruction or 
acquisition of the Project facilities is completed, or (2) all of the 
proceeds (less amounts used to fund a reasonably required reserve fund) have 
been spent on the construction, reconstruction or acquisition of the Project 
facilities, whichever occurs later.

          (g)  The Authority hereby represents and warrants that, at the date of
the execution and delivery of this Indenture, a reasonable estimate of the fair
market value of the property financed by the Series 1996 Bonds on the latest
maturity date of such Series of Bonds will be equal to at least 20% of the
original cost of the property financed by such Series of Bonds.

          (h)  The Authority hereby represents and warrants that, at the date of
the execution and delivery of this Indenture, a reasonable estimate of the
remaining useful life of the property financed by such Series of Bonds on the
latest maturity date of Bonds will be the longer of one year or 20% of the
original estimated useful life of the property financed by such Series of Bonds.

          (i)  The officers of the Authority executing this Indenture are, at
the date of execution and delivery of this Indenture, duly and properly in
office and fully authorized to execute the same.

          (j)  This Indenture has been duly authorized, executed and delivered
by the Authority, and constitutes the legal, valid, and binding agreement of the
Authority, enforceable against the Authority in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency or other similar
laws affecting the enforcement of creditors' rights generally and by the
application of equitable principles if equitable remedies are sought.

          (k)  The execution and delivery of this Indenture, the consummation of
the transactions herein contemplated and the fulfillment or compliance with the
terms and conditions hereof, will not conflict with or constitute a violation or
breach of or default (with due notice or the passage of time or both) under the
articles of incorporation of the Authority, its bylaws or any indenture,
mortgage, deed of trust, agreement, lease, contract or other agreement or
instrument to which the Authority is a party or by which it or its properties
are otherwise subject or bound, or, to the knowledge of the Authority, at the
date of the execution and delivery of this Indenture, any applicable law or
administrative rule or regulation, or any applicable court or administrative
decree or order, or result in the creation or imposition of any prohibitive
lien, charge or encumbrance of any nature whatsoever upon any of the property or
assets of the Authority, which conflict, violation, breach, default, lien,
charge or encumbrance might have consequences that would materially and
adversely affect the consummation of the transactions contemplated by this
Indenture or the financial condition, assets, properties, or operations of the
Authority.



                                     42

<PAGE>

          (l)  At the date of the execution and delivery of this Indenture, no
consent or approval of any trustee or holder of any indebtedness of the
Authority, and no consent, permission, authorization, order or license of, or
filing or registration with, any governmental authority is necessary in
connection with the execution and delivery of this Indenture or the consummation
of any transaction herein contemplated, except as have been obtained or made and
as are in full force and effect.

          (m)  At the date of the execution and delivery of this Indenture,
there is no action, suit, proceeding, inquiry or investigation, before or by any
court or federal, state, municipal or other governmental authority, pending, or
to the knowledge of the Authority after reasonable investigation, threatened
against or affecting the Authority or the assets, properties or operations of
the Authority which, if determined adversely to the Authority, or its interest,
could have a material adverse effect upon the consummation of the transactions
contemplated by or the validity of this Indenture, or upon the financial
condition, assets, properties or operations of the Authority, and the Authority
is not in default with respect to any order or decree of any court or any order,
regulation or demand of any federal, state, municipal or other governmental
authority, which default might have consequences that would materially and
adversely affect the consummation of the transactions contemplated by this
Indenture or the financial condition, assets, properties or operations of the
Authority or its properties.  All of the tax returns (federal, state and local)
required to be filed by or on behalf of the Authority have been filed, and all
taxes shown thereon to be due, including interest and penalties, except such, if
any, as are being actively contested by the Authority in good faith, have been
paid or adequate reserves have been made for the payment thereof, which
reserves, if any, are reflected in the financial statements of the Authority.

          (n)  No information, exhibit or report furnished to the underwriter or
Trustee by the Authority in connection with the negotiation of this Indenture
contains any untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.

          (o)  The Authority has good right, full power and lawful authority to
grant, bargain, sell, warrant, convey, confirm, assign, transfer in trust,
transfer a security interest in, pledge and set over the Trust Estate in the
manner and form herein provided, and the Authority will forever warrant and
defend the title to the same to the Trustee against all claims of all persons
whomsoever.  The Trustee has a valid exclusive first lien in the Trust Estate,
subject to no other prior lien.

     Section 5.2    ACQUISITION OF PROPERTY. The Authority will forthwith
acquire and construct the Property and construct the Project thereon in
conformity with law and all requirements of all governmental authorities having
jurisdiction thereover.



                                     43

<PAGE>

     Section 5.3    AUTHORITY'S TITLE TO PROJECT; DEED OF TRUST. The Authority
will not alter, modify or cancel, or agree or consent to alter, modify or
cancel, the Deed of Trust except in accordance with the terms thereof.

     Without allowance for any days of grace which may or might exist or be
allowed by law or granted pursuant to any terms or conditions of the Deed of
Trust, the Authority will in all respects promptly and faithfully keep, perform
and comply with all the terms, provisions, covenants, conditions and agreements
of the Deed of Trust to be kept, performed and complied with by it.  The
Authority will not do or permit anything to be done, or omit or refrain from
doing anything, in the case where any such act done or permitted to be done, or
any such omission of or refraining from action, would or might be a ground for
declaring a forfeiture of its fee simple interest in real property comprising
any part of the Project.  The Authority will promptly deposit with the Trustee
(to be held by the Trustee until the title and rights of the Trustee under this
Indenture shall be released or reconveyed) any and all documentary evidence
received by it showing compliance with the provisions of the Deed of Trust to be
performed by the Authority.  The Authority, immediately upon its receiving or
giving any notice, communication or other document in any way relating to or
affecting the Deed of Trust, which may or can in any manner affect the estate of
the Authority in or under the Deed of Trust, or any portion of the Trust Estate,
will deliver the same, or a copy thereof, to the Trustee.  If the Authority
fails to take action required by this paragraph the Trustee may (but shall be
under no obligation to) take such action and charge the Authority for all costs
incurred in connection therewith.

     The Authority will pay or cause to be paid all taxes, assessments and other
charges, if any, that may be levied, assessed or charged upon the Project, the
Trust Estate, or any part thereof, promptly as and when the same shall become
due and payable; and the Authority will, from time to time keep the Trustee
advised of such payments, and furnish to the Trustee a certificate on or before
March 1 of each year to the effect that the requirements of this Section have
been complied with.  The Authority will not suffer any part of the Trust Estate
hereby conveyed and transferred in trust, or any part thereof, to be sold for
any taxes, assessments or other charges whatsoever, or to be forfeited therefor;
nor do or permit to be done in, upon or about said Trust Estate, or any part
thereof, anything that might in any way weaken, diminish or impair the security
intended to be given by this Indenture.

     Section 5.4    INSURANCE.

          (a)  The Authority shall, unless otherwise consented to by the Credit
Enhancement Provider, maintain or cause to be maintained, at all times while any
of the Bonds are outstanding, fire, lightning, and extended coverage insurance,
including vandalism and malicious mischief insurance, sprinkler system leakage
insurance and boiler explosion insurance, either as a part of comprehensive
insurance carried by the Authority or as a part of insurance carried by any
contractor under a construction contract, if any, on structures constituting any
part of the Project, in an amount equal to one hundred percent of the
replacement cost of such structures (except that such earthquake insurance may
be subject to a deductible clause of not to exceed 



                                     44

<PAGE>

ten percent of such replacement cost for any one loss and except that such 
other insurance may be subject to deductible clauses for any one loss of not 
to exceed the lesser of the Maximum Aggregate Annual Debt Service and the 
amount available for that purpose) or, in the alternative, in an amount and 
in a form sufficient, in the event of total or partial loss, to enable the 
Authority either to retire all Bonds then outstanding or to restore such 
structures to the condition existing before such loss.  Said extended 
coverage endorsement shall, as nearly as practicable, cover loss or damage by 
explosion, windstorm, riot, aircraft, vehicle damage, smoke and such other 
hazards as are normally covered by such endorsement.  The Trustee shall be 
named as an additional payee of such policies.

     In the event of any damage to or destruction of any part of the Project,
caused by the perils covered by such insurance, the Authority, except as
hereinafter provided, shall cause the proceeds of such insurance to be utilized
for the repair, reconstruction or replacement of the damaged or destroyed
portion of the Project, and the Trustee shall hold proceeds separate and apart
from all other funds in a special fund it is authorized to establish, to the end
that such proceeds shall be applied to the repair, reconstruction or replacement
of the Project to at least the same good order, repair and condition as it was
in prior to the damage or destruction, insofar as the same may be accomplished
by the use of such proceeds.  The Trustee shall permit withdrawals of said
proceeds from time to time upon receiving the written request of the Authority,
stating that the Authority has expended moneys or incurred liabilities in an
amount equal to the amount herein requested to be paid over to it for the
purpose of repair, reconstruction or replacement, and specifying the items for
which such moneys were expended, or such liabilities were incurred.  Any balance
of said proceeds not required for such repair, reconstruction or replacement
shall be treated by the Trustee as Revenues and applied in the manner provided
by Section 4.4, subject to the provisions of Section 5.4 hereof.

          (b)  (i)  Except as provided in subparagraph (ii) of this paragraph
     (b) and unless otherwise consented to by the Credit Enhancement Provider,
     the Authority shall maintain or cause to be maintained, at all times while
     any of the Bonds are outstanding, public liability insurance, with limits
     of not less than one million dollars ($1,000,000) for one person and three
     million dollars ($3,000,000) for more than one person involved in one
     accident, to protect the Authority and its members, directors, officers,
     agents and employees and the Trustee from all direct or contingent loss or
     liability for damages for bodily injury or death occasioned by reason of
     the Authority's operations, including any use or occupancy of the Project. 
     The Authority shall also maintain or cause to be maintained, so long as any
     of the Bonds are outstanding, insurance against liability for property
     damage resulting from any casualty attributable to the Authority's
     operations, in an amount not less than two hundred thousand dollars
     ($200,000) for each accident.  Such public liability insurance and such
     property damage insurance may be subject to a deductible clause of not to
     exceed fifty thousand dollars ($50,000) for any one accident.  Such public
     liability insurance and such property damage insurance may, however, be in
     the form of a single limit policy in the amount of [three million dollars
     ($3,000,000)] covering all such risks.



                                     45

<PAGE>

               (ii) The Authority shall have the right, exercisable from time to
     time, subject to the approval of the Credit Enhancement Provider, to
     provide other kinds of insurance or methods or plans of protection against
     risk or loss which shall be in substitution, or partial substitution, for
     any of the kinds of insurance required to be maintained by the Authority
     hereunder, providing such other kinds of insurance, plans or methods shall
     afford reasonable protection to the Authority, its members, directors,
     officers, agents and employees and the Trustee and Bondholder in light of
     all circumstances giving consideration to cost, availability and plans or
     methods of protection adopted by Colorado corporations similar to the
     Authority.  Before another method or plan may be provided by the Authority,
     there shall be filed with the Trustee a certificate of an actuary, or other
     qualified person, stating that, in the opinion of the signer, the
     substitute method or plan of protection is in accordance with the
     requirements of this Section and, when effective, would afford adequate
     protection to the Authority, its members, directors, officers, agents and
     employees and the Trustee against loss and damage from hazards and risks
     covered thereby.  There shall also be filed with the Trustee a Certificate
     of this Authority setting forth the details of such substitute method or
     plan.

          (c)  The Authority shall maintain or cause to be maintained, at all
times while any of the Bonds are outstanding and unless otherwise consented to
by the Credit Enhancement Provider, business interruption or use and occupancy
insurance on each structure constituting any part of the Project, in an amount
not less than the amount of interest accruing on the Bonds during the current
fiscal year, for a period of at least one year; in either case insuring against
loss of use caused by the perils covered by the insurance required by Section
5.4(a), except that such insurance may be subject to a deductible clause of not
to exceed the aggregate total rental payable during the first thirty days of any
loss except that such insurance need be maintained as to the peril of earthquake
only following completion of construction of each structure and only if such
insurance is available at reasonable cost on the open market from reputable
insurance companies.  Any such insurance policy shall contain a loss payable
clause making any loss thereunder payable to the Trustee, as its interest may
appear.  Any proceeds of such insurance shall be treated as Revenues and applied
as provided in Section 4.4, subject to the provisions of Section 5.4 hereof.

          (d)  The Authority may purchase, on all or any of the Bonds of any
series, insurance assuring the Bondholders that the principal of and interest on
the insured Bonds will be paid when due and payable.  The purchase of any such
insurance shall not constitute a preference or priority of the insured Bonds
over any Bonds not so insured, and all Bonds Outstanding, irrespective of the
providing of such insurance on some of the Bonds, shall be equally and
proportionately secured hereby.

          (e)  The Authority shall deliver to the Trustee (i) on the date of
delivery of any new insurance policy or any insurance policy renewal, a copy of
such new or renewed policy, and (ii) during the month of March in each year a
schedule, in such detail as the Trustee in its discretion may request, setting
forth the insurance policies then in force pursuant to this Section, 



                                     46

<PAGE>

the names of the insurers which have issued the policies, the amounts thereof 
and the property and risks covered thereby.  Each such insurance policy shall 
require that the Trustee shall be given thirty days' notice of any intended 
cancellation thereof or reduction of the coverage provided thereby.  Delivery 
to the Trustee of the schedule of insurance policies under the provisions of 
this Section shall not confer responsibility upon the Trustee as to the 
sufficiency of coverage or amounts of said policies.  If so requested in 
writing by the Trustee, the Authority shall also deliver to the Trustee 
duplicate originals or certified copies of each insurance policy described in 
such schedule.

          (f)  In the event subordinate indebtedness of the Authority is issued
or incurred as provided in Section 3.6 hereof, the Authority shall be authorized
to insure such additions and improvements to the Project as are financed with
proceeds of such subordinate indebtedness.  Proceeds of insurance with respect
to loss or damage to such additions and improvements shall be applied first to
the repair or replacement of such additions and improvements and shall
thereafter be applied to the payment or redemption of such subordinate
indebtedness.  Proceeds of any business interruption insurance procured with
respect to such additions and improvements may be applied by the Authority to
the payment of such subordinate indebtedness or the payment of operating
expenses with respect to such additions and improvements.

     Section 5.5    MISCELLANEOUS COVENANTS.  Unless it receives the consent of
the Credit Enhancement Provider, the Authority covenants that, so long as any of
the Bonds remain outstanding:

          (a)  The Authority will not issue any obligations payable from
Revenues or having a lien on the Trust Estate having priority over, or on a
parity with, the Series 1996 Bonds;

          (b)  Except as provided in Section 3.6 hereof, the Authority will not
assume or guarantee, or otherwise obligate itself for or become liable for the
payment of, or contingently agree to purchase, any debt of any person other than
the Authority; and

          (c)  The Authority covenants and agrees that, unless otherwise
consented to by the Credit Enhancement Provider, it shall fix, charge and
collect, or cause to be fixed, charged and collected, subject to applicable
requirements or restrictions imposed by law, such rent rates, fees, or charges
for use of the Project which, together with all other anticipated receipts and
revenues of the Authority and any other funds available therefor, will be
budgeted for the next Fiscal Year to be sufficient to produce Net Income
Available for Debt Service equal to at least one and thirty-hundredths (1.30)
times Aggregate Annual Debt Service for all Bonds then outstanding for the next
Fiscal Year.

     Section 5.6    CONSOLIDATION, MERGER, SALE OR TRANSFER UNDER CERTAIN
CONDITIONS.  The Authority covenants and agrees that, unless otherwise consented
to by the Credit Enhancement Provider, it shall not dissolve, sell, lease or
otherwise dispose of all or substantially all of its assets, or consolidate with
or merge into another Person or permit one or more other Persons 



                                     47

<PAGE>

to consolidate with or merge into it; provided, that the Authority may, with 
the consent of the Credit Enhancement Provider and without violating the 
covenants contained in this Section, consolidate with or merge into, sell, or 
lease all or substantially all of its assets to another Person, or permit one 
or more other Persons to consolidate with or merge into it, if:

          (a)  The Trustee shall have received an opinion of Counsel that such
actions are permitted by law;

          (b)  The surviving, resulting or transferee Person, as the case may
be:

               (i)  assumes in writing, if such Person is not the
     Authority, all  of the obligations of the Authority under this
     Indenture and agrees to fulfill and comply with the terms, covenants
     and conditions hereof; and 

               (ii) is not, after such transaction, otherwise in default
     under any provision of this Indenture; and

          (c)  The Trustee shall have received an opinion of Bond Counsel to the
effect that such merger, consolidation, sale, lease or other transfer will not
cause the interest on the Bonds to be included in gross income for federal
income tax purposes under Section 103 of the Code.

     If a merger, consolidation, sale, lease or other transfer is effected, as
provided in this Section, the provisions of this Section shall continue in full
force and effect, and no further merger, consolidation, sale or transfer shall
be effected except in accordance with the provisions of this Section.

     Upon compliance with the foregoing provisions of this Section 5.6, (i) the
Authority and such Person shall be considered to be one entity for purposes of
this Indenture, (ii) all computations hereunder shall be made on a combined
basis for the Authority and such Person, and (iii) no provision hereof shall
apply to transactions between the Authority and such Person.  No such sale,
transfer, consolidation or merger shall relieve the Authority of its obligations
hereunder.

     A Person may also agree to become a co-obligor and jointly and severally
liable with the Authority (without the necessity of merger, consolidation or
transfer of assets) under this Indenture if the foregoing provisions are
satisfied.  In such event, references in this Indenture to Indebtedness of the
Authority shall be considered to refer to the combined Indebtedness of the
Authority and such Person and references to the financial condition or results
of operation of the Authority shall be considered to refer to the Authority and
such Person, and the Authority and such Person shall be considered to be the
Authority for all purposes of this Indenture.



                                     48

<PAGE>

     Section 5.7    REPORTS. 

          (a)  At any time after the Authority files the Registration Statement
with respect to the Exchange Offer, the Authority shall file a copy of all
information required to be filed with the SEC for public availability (unless
the SEC will not accept such a filing) and shall promptly make such information
available to all securities analysts and prospective investors upon request.

          (b)  For so long as any Transfer Restricted Securities remain
outstanding, the Authority and the Credit Enhancement Provider shall furnish to
all Holders and to securities analysts and prospective investors, upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.

     Section 5.8    TAX COVENANTS.

          (a) The Authority covenants that it will not take any action, or fail
to take any action, if any such action or failure to take action would adversely
affect the exclusion from gross income of the interest on the Bonds under
Section 103 of the Code.  The Authority will not directly or indirectly use or
permit the use of any proceeds of the Bonds or any other funds of the Authority,
or take or omit to take any action that would cause the Bonds to be "arbitrage
bonds" within the meaning of Section 148(a) of the Code to the extent applicable
to the Bonds.  To that end, the Authority will comply with all requirements of
Section 148 of the Code to the extent applicable to the Bonds.  In the event
that at any time the Authority is of the opinion that for purposes of this
Section 5.8 it is necessary to restrict or limit the yield on the investment of
any moneys held by the Trustee under this Indenture, the Authority shall so
instruct the Trustee in writing, and the Trustee shall take action in accordance
with such instructions.

          (b)  Without limiting the generality of the foregoing, the Authority
agrees that there shall be paid from time to time all amounts required to be
rebated to the United States pursuant to Section 148(f) of the Code and any
temporary, proposed or final Treasury Regulations as may be applicable to the
Bonds from time to time.  This covenant shall survive payment in full or
defeasance of the Bonds.  The Authority specifically covenants to pay or cause
to be paid to the United States at the times and in the amounts determined under
Section 4.8 hereof the Rebate Requirements, as described in the Tax Certificate.
The Trustee agrees to comply with all instructions of the Authority.

          (c)  The Authority shall at all times do and perform all acts and
things permitted by law and this Indenture which are necessary or desirable in
order to assure that interest paid on the Bonds (or any of them) will be
excluded from gross income for federal income tax purposes and shall take no
action that would result in such interest not being excluded from gross income
for federal income tax purposes.

          (d)  Any other obligation issued by the Authority either to make
improvements to the Project or to refund the Bonds will be discharged no later
than the latest maturity date of 



                                     49

<PAGE>

the original obligations, regardless of whether the original obligations are 
callable at an earlier date.

          (e)  The Authority will not use or permit the use of the Project by
any person in such manner or to such extent as would result in loss of the
exclusion from gross income of interest on any of the Bonds under Section 103 of
the Code.

          (f)  Notwithstanding any provision of this Section 5.8 or Section 4.8
or Article XII hereof, if the Authority shall provide the Trustee an opinion of
Bond Counsel to the effect that any action required under this Section 5.8 or
Section 4.8 or Article XII hereof is no longer required, or to the effect that
some further action is required, to maintain the exclusion from gross income of
the interest on the Bonds pursuant to Section 103 of the Code, the Authority and
the Trustee may rely conclusively on such opinion in complying with the
provisions hereof, and the covenants hereunder shall be deemed to be modified to
that extent.

          (g)  The Authority will execute no management contract, lease or
similar agreement with respect to the Project unless, in the opinion of Bond
Counsel, such agreement shall not adversely affect the exclusion from gross
income of interest on the Bonds for federal income tax purposes.

     Section 5.9    TRANSFER TO DISTRICT.  Notwithstanding the foregoing, the
Authority is expressly authorized to transfer to the District, at any time and
without consideration other than the execution by the District of the Operating
Agreement, any Project facility not pledged to the payment of the Bonds pursuant
to the Deed of Trust, including any property released from the Deed of Trust in
accordance with the terms thereof.











                                     50

<PAGE>

                                   ARTICLE VI

                            CERTIFICATES AND OPINIONS

     Section 6.1    CONTENT OF CERTIFICATES AND OPINIONS.  Every certificate or
opinion with respect to compliance with a condition or covenant provided for in
this Indenture (other than a certificate provided pursuant to TIA Section
314(a)(4)) shall comply with the provisions of TIA Section 314(e) and shall
include (a) a statement that the person or persons making or giving such
certificate or opinion have read such covenant and condition and the definitions
herein relating thereto; (b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based; (c) a statement that, in the opinion of
the signers, they have made or caused to be made such examination or
investigation as is necessary to enable them to express an informed opinion as
to whether or not such covenant or condition has been complied with; and (d) a
statement as to whether, in the opinion of the signers, such condition or
covenant has been complied with.

     Any such certificate or opinion made or given by an officer of the
Authority may be based, insofar as it relates to legal matters, upon a
certificate or opinion of or representation by counsel, unless such officer
knows that the certificate or opinion or representations with respect to the
matters upon which his certificate or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should have known that the same
were erroneous.  Any such certificate or opinion made or given by counsel may be
based, insofar as it relates to factual matters upon a certificate or opinion
of, or representation by, an Authority Representative stating the information
with respect to factual matters which is in the possession of the Authority,
unless such counsel knows that the certificate or opinion or representations
with respect to the matters upon which his opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should have known that the same
were erroneous.




                                     51


<PAGE>

                                   ARTICLE VII

                         PROVISIONS CONCERNING THE BONDS

     Section 7.1    EXECUTION OF BONDS. The Bonds shall be executed on behalf of
the Authority in its corporate name with the manual or facsimile signature of
its President or any Vice President attested by the manual or facsimile
signature of its Secretary or any Assistant Secretary.  The Bonds shall then be
delivered to the Trustee for authentication by it.  In case any of the officers
who shall have signed or attested any of the Bonds shall cease to be such
officer or officers of the Authority before the Bonds so signed or attested
shall have been authenticated or delivered by the Trustee or issued by the
Authority, such Bonds may nevertheless be authenticated, delivered and issued
and, upon such authentication, delivery and issue, shall be as binding upon the
Authority as though those who signed and attested the same had continued to be
such officers of the Authority and also any Bond may be signed and attested on
behalf of the Authority by such persons as at the actual date of the execution
of such Bond shall be the proper officers of the Authority although at the
nominal date of such Bonds any such person shall not have been such officer of
the Authority.

     Only such of the Bonds as shall bear thereon a certificate of
authentication in the form hereinabove recited, manually executed by the
Trustee, shall be valid or obligatory for any purpose or entitled to the
benefits of this Indenture, and such certificate of the Trustee shall be
conclusive evidence that the Bonds so authenticated have been duly authenticated
and delivered hereunder and are entitled to the benefits of this Indenture.

     Section 7.2    TRANSFER OR EXCHANGE OF BONDS.

          (a)  TRANSFER AND EXCHANGE OF DEFINITIVE BONDS.  When Definitive Bonds
are presented by a Holder to the Trustee with a request: (x) to register the
transfer of the Definitive Bonds; or (y) to exchange such Definitive Bonds for
an equal principal amount of Definitive Bonds of other authorized denominations,
the Trustee shall register the transfer or make the exchange as requested if its
requirements for such transactions are met; PROVIDED, HOWEVER, that the
Definitive Bonds presented or surrendered for register of transfer or exchange:
(i) shall be duly endorsed or accompanied by a written instruction of transfer
in form satisfactory to the Trustee duly executed by such Holder or by his
attorney, duly authorized in writing; and (ii) in the case of a Definitive Bond
that is a Transfer Restricted Security, such request shall be accompanied by the
following additional information and documents, as applicable: (A) if such
Transfer Restricted Security is being delivered to the Trustee by a Holder for
registration in the name of such Holder, without transfer, a certification to
that effect from such Holder (in substantially the form of Exhibit A hereto); or
(B) if such Transfer Restricted Security is being transferred to a "qualified
institutional buyer" (as defined in Rule 144A under the Securities Act) in
accordance with Rule 144A under the Securities Act or pursuant to an exemption
from registration in accordance with Rule 144 or Rule 904 under the Securities
Act or pursuant to an effective registration statement under the Securities Act,
a certification to that effect from such Holder (in substantially the form of
Exhibit A hereto); or (C) if such Transfer Restricted 



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<PAGE>

Security is being transferred in reliance on another exemption from the 
registration requirements of the Securities Act, a certification to that 
effect from such Holder (in substantially the form of Exhibit A hereto) and 
an Opinion of Counsel from such Holder or the transferee reasonably 
acceptable to the Authority and to the Trustee to the effect that such 
transfer is in compliance with the Securities Act.

          (b)  TRANSFER OF A DEFINITIVE BOND FOR A BENEFICIAL INTEREST IN A
BOOK-ENTRY BOND.  A Definitive Bond may not be exchanged for a beneficial
interest in a Book-Entry Bond unless all Outstanding Bonds are to be, at the
option of the Authority, Book-Entry Bonds.

          (c)  TRANSFER AND EXCHANGE OF BOOK-ENTRY BONDS.  The transfer and
exchange of Book-Entry Bonds or beneficial interests therein shall be effected
through the Depository, in accordance with this Indenture and the procedures of
the Depository therefore which shall include restrictions on transfer comparable
to those set forth herein to the extent required by the Securities Act.

          (d)  TRANSFER OF A BENEFICIAL INTEREST IN A BOOK-ENTRY BOND FOR A
DEFINITIVE BOND.  No Beneficial Interest in a Book-Entry Bond may be transferred
for a Definitive Bond unless the Authority shall determine that Bonds will no
longer be issued in book-entry only form.

          (e)  RESTRICTIONS ON TRANSFER AND EXCHANGE OF BOOK-ENTRY BONDS.  
Notwithstanding any other provision of this Indenture (other than the provisions
set forth in subsection (f) of this Section 7.2), a Book-Entry Bond may not be
transferred as a whole except by the Depository to a nominee of the Depository
or by a nominee of the Depository to the Depository or another nominee of the
Depository or by the Depository or any such nominee to a successor Depository or
a nominee of such successor Depository.

          (f)  AUTHENTICATION OF DEFINITIVE BONDS IN ABSENCE OF DEPOSITORY.  If
at any time: (i) the Depository for the Bonds notifies the Authority that the
Depository is unwilling or unable to continue as Depository for the Book-Entry
Bonds and a successor Depository for the Book-Entry Bonds is not appointed by
the Authority within 90 days after delivery of such notice; or (ii) the
Authority, at its sole discretion, notifies the Trustee in writing that it
elects to cause the issuance of Definitive Bonds under this Indenture, then the
Authority shall execute, and the Trustee shall, upon receipt of an
authentication order in accordance with Section 7.1 hereof, authenticate and
deliver, Definitive Bonds in an aggregate principal amount equal to the
principal amount of the Book-Entry Bonds in exchange for such Book-Entry Bonds.

          (g)  LEGENDS.

               (i)  Except as permitted by the following paragraphs (ii) and
     (iii), each Bond certificate evidencing Book-Entry Bonds and Definitive
     Bonds (and all Bonds issued in exchange therefor or substitution thereof)
     shall bear legends in substantially the following form:



                                     53

<PAGE>

          THIS BOND (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
          TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE
          UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND
          THIS BOND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN
          THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
          THEREFROM.  EACH PURCHASER OF THIS BOND IS HEREBY NOTIFIED THAT
          THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
          SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. 
          THE HOLDER OF THIS BOND AGREES FOR THE BENEFIT OF THE AUTHORITY
          THAT (A) THIS BOND MAY BE RESOLD, PLEDGED OR OTHERWISE
          TRANSFERRED, ONLY (1) INSIDE THE UNITED STATES TO A PERSON WHO
          THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
          (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
          TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, OR IN
          ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
          REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
          COUNSEL IF THE AUTHORITY SO REQUESTS), (2) TO THE AUTHORITY, (3)
          PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR, (4) OUTSIDE
          THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING
          THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT AND, IN
          EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF
          ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
          JURISDICTION, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER
          IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THIS BOND OF THE
          RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.

               (ii) Upon any sale or transfer of a Transfer Restricted Security
     (including any Transfer Restricted Security represented by a Book-Entry
     Bond) pursuant to Rule 144 under the Securities Act or pursuant to an
     effective registration statement under the Securities Act: (A) in the case
     of any Transfer Restricted Security that is a Definitive Bond, the Trustee
     shall permit the Holder thereof to exchange such Transfer Restricted
     Security for a Definitive Bond that does not bear the legend set forth in
     (i) above and rescind any restriction on the transfer of such Transfer
     Restricted Security; and (B) in the case of any Transfer Restricted
     Security represented by a Book-Entry Bond, such Transfer Restricted
     Security shall not be required to bear the legend set forth in (i) above,
     PROVIDED, HOWEVER, that with respect to any request for an exchange of a
     Transfer Restricted Security that is represented by a Book-Entry Bond for a
     Definitive Bond that does not bear the first legend set forth in (i) above,
     which request is made in 



                                     54

<PAGE>

     reliance upon Rule 144, the Holder thereof shall certify in writing to 
     the Trustee that such request is being made pursuant to Rule 144 (such 
     certification to be substantially in the form of Exhibit A hereto).

               (iii)     Notwithstanding the foregoing, upon consummation of 
     the Exchange Offer, the Authority shall issue and, upon receipt of an
     authentication order in accordance with Section 7.1 hereof, the Trustee
     shall authenticate Series B Bonds in exchange for Series A Bonds accepted
     for exchange in the Exchange Offer, which Series B Bonds shall not bear the
     legend set forth in (i) above, and no restriction shall apply to the
     transfer of such Series B Bonds. Series A Bonds which are not exchanged
     shall continue to be subject to such restriction.

          (h)  CANCELLATION AND/OR ADJUSTMENT OF BOOK-ENTRY BONDS.  At such time
as all beneficial interests in Book-Entry Bonds have been exchanged for
Definitive Bonds, redeemed, repurchased or cancelled, all Book-Entry Bonds shall
be returned to or retained and cancelled by the Trustee.  At any time prior to
such cancellation, if any beneficial interest in a Book-Entry Bond is exchanged
for Definitive Bonds, redeemed, repurchased or cancelled, the principal amount
of Bonds represented by such Book-Entry Bond shall be reduced accordingly and an
endorsement shall be made on such Book-Entry Bond, by the Trustee or at the
direction of the Trustee, to reflect such reduction.

          (i)  GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.

               (i)   To permit registrations of transfers and exchanges, the
     Authority shall execute and the Trustee shall authenticate Definitive Bonds
     and Book-Entry Bonds.

               (ii)  No service charge shall be made to a Holder for any
     registration of transfer or exchange, but the Authority and the Trustee may
     require payment of a sum sufficient to cover any transfer tax or similar
     governmental charge payable in connection therewith (other than any such
     transfer taxes or similar governmental charge payable upon exchange or
     transfer).

               (iii) The Trustee shall not be required to register the
     transfer of or exchange any Bond selected for redemption in whole or in
     part, except the unredeemed portion of any Bond being redeemed in part.

               (iv)  All Definitive Bonds and Book-Entry Bonds issued upon any
     registration of transfer or exchange of Definitive Bonds or Book-Entry
     Bonds shall be the valid obligations of the Authority, evidencing the same
     debt, and entitled to the same benefits under this Indenture, as the
     Definitive Bonds or Book-Entry Bonds surrendered upon such registration of
     transfer or exchange.

               (v)   The Authority shall not be required: (A) to issue, to
     register the transfer of or to exchange Bonds during a period beginning at
     the opening of business 



                                     55

<PAGE>

     15 days before the day of any selection of Bonds for redemption and 
     ending at the close of business on the day of selection; or (B) to 
     register the transfer of or to exchange any Bond so selected for
     redemption in whole or in part, except the unredeemed portion of any Bond
     being redeemed in part; or (C) to register the transfer of or to exchange a
     Bond between a Record Date and the next succeeding Interest Payment Date.

     Section 7.3    BOND REGISTER.  The Trustee will keep or cause to be kept,
at the Designated Office of the Trustee, sufficient books for the registration
and transfer of the Bonds, which shall at all times during business hours be
open to inspection by the Authority and shall otherwise comply with TIA Section
312(a); and, upon presentation for such purpose, the Trustee shall, under such
reasonable regulations as it may prescribe, register or transfer or cause to be
registered or transferred, on said books, Bonds as hereinabove provided.  If the
Trustee is at any time not the registrar for the Bonds, the Authority shall
furnish to the Trustee at least seven Business Days before each Interest Payment
Date and at such other times as the Trustee may request in writing, a list in
such form and as of such date as the Trustee may reasonably require of the names
and addresses of the Holders of Bonds and the Authority shall otherwise comply
with TIA Section 312(a).

     Section 7.4    TEMPORARY BONDS.  The Bonds may be initially issued in
temporary form exchangeable for Definitive Bonds when ready for delivery.  The
temporary Bonds may be printed, lithographed or typewritten, shall be of such
denominations as may be determined by the Authority and may contain such
reference to any of the provisions of this Indenture as may be appropriate. 
Every temporary Bond shall be executed by the Authority and be authenticated by
the Trustee upon the same conditions and in substantially the same manner as the
Definitive Bonds.  If the Authority issues temporary Bonds it will execute and
furnish Definitive Bonds without delay upon the request of the purchaser of said
Bonds, and thereupon the temporary Bonds shall be surrendered, for cancellation,
in exchange therefor at the Designated Office of the Trustee, and the Trustee
shall authenticate and deliver in exchange for such temporary Bonds an equal
aggregate principal amount of definitive fully registered Bonds of authorized
denominations, of the same series and maturity or maturities.  Until so
exchanged, the temporary Bonds shall be entitled to the same benefits under this
Indenture as Definitive Bonds authenticated and delivered hereunder.

     Section 7.5    BONDS MUTILATED, LOST, DESTROYED OR STOLEN.  If any Bond
shall become mutilated, the Authority, at the expense of the owner of said Bond,
shall execute, and the Trustee shall thereupon authenticate and deliver, a new
Bond of like tenor in exchange and substitution for the Bond so mutilated, but
only upon surrender to the Trustee of the Bond so mutilated.  Every mutilated
Bond so surrendered to the Trustee shall be cancelled by it and delivered to, or
upon the order of, the Authority, or, at the option of the Trustee, the Trustee
shall deliver a certificate with respect to the destruction to the Authority. 
If any Bond shall be lost, destroyed or stolen, evidence of such loss,
destruction or theft may be submitted to the Authority and the Trustee and, if
such evidence be satisfactory to both and indemnity satisfactory to them shall
be given, the Authority, at the expense of the owner, shall execute, and the
Trustee shall thereupon authenticate and deliver, a new Bond of like tenor in
lieu of and in substitution 



                                     56

<PAGE>

for the Bond so lost, destroyed or stolen.  The Authority may require payment 
of a sum not exceeding the actual cost of preparing each new Bond issued 
under this Section and of the expenses which may be incurred by the Authority 
and the Trustee in the premises.  Any Bond issued under the provisions of 
this Section in lieu of any Bond alleged to be lost, destroyed or stolen 
shall constitute an original additional contractual obligation on the part of 
the Authority whether or not the Bond so alleged to be lost, destroyed or 
stolen be at any time enforceable by anyone, and shall be equally and 
proportionately entitled to the benefits of this Indenture with all other 
Bonds secured by this Indenture.












                                     57

<PAGE>

                                  ARTICLE VIII

                    PROVISIONS REGARDING REDEMPTION OF BONDS

     Section 8.1    SELECTION OF BONDS FOR REDEMPTION.  Whenever less than all
of the Bonds of any one maturity of any series are called for redemption and
such Bonds are redeemable by lot, the Trustee shall select the Bonds of such
maturity to be redeemed, from the outstanding Bonds of such maturity, by lot in
any manner which the Trustee determines.  In the event funds are not sufficient
to redeem all Bonds subject to redemption on any date fixed for redemption of
Bonds, the Trustee shall redeem Bonds subject to redemption on a pro rata basis,
determined based upon the principal amount of Bonds subject to redemption.

     Section 8.2    NOTICE OF REDEMPTION.  Notice of redemption shall be given
by the Trustee in the manner described in this Section 8.2. Each notice of
redemption shall state the redemption date and the place or places of
redemption, shall designate the serial numbers of the Bonds to be redeemed by
giving the CUSIP numbers and the individual numbers of each Bond or by stating
that all Bonds between two stated numbers, both inclusive, have been called for
redemption, and shall require that such Bonds be then surrendered and shall also
state that the interest on the Bonds in such notice designated for redemption
shall cease to accrue from and after such redemption date and that on said date
there will become due and payable on each of said Bonds the principal amount
thereof to be redeemed, interest accrued thereon to the redemption date and the
premium thereon, if any (such premium to be specified).

     Notice of redemption shall be given by first-class mail (i) to the
respective registered owners of any Bonds designated for redemption at their
addresses appearing on the Bond registration books, and (ii) to one or more of
the Information Services at least thirty days but not more than sixty days prior
to the redemption date, which notice shall, in addition to setting forth the
above information, set forth, in the case of each registered Bond called only in
part, the portion of the principal thereof which is to be redeemed; provided
that neither failure to mail or any defect in any notice so mailed shall affect
the sufficiency of the proceedings for the redemption of Bonds for which proper
notice has been given pursuant to clause (i).  Notice of redemption shall also
be given by telecopy, certified, registered, or overnight mail to the Securities
Depositories.  Each such notice shall also state that on said date there will
become due and payable on each of said Bonds the redemption price thereof or of
said specified portion of the principal thereof in the case of a Bond to be
redeemed in part only, together with interest accrued thereon to the redemption
date, and that from and after such redemption date interest thereon shall cease
to accrue, and shall require that such Bonds be then surrendered.  Neither the
Authority nor the Trustee shall have any responsibility for any defect in the
CUSIP number that appears on any Bond or in any redemption notice with respect
thereto, and any such redemption notice may contain a statement to the effect
that CUSIP numbers have been assigned by an independent service for convenience
of reference and that neither the Authority nor the Trustee shall be liable for
any inaccuracy in such numbers.




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     Notice of redemption of Bonds shall be given by the Trustee, at the expense
of the Authority, for and on behalf of the Authority.

     Section 8.3    EFFECT OF REDEMPTION.  Notice of redemption having been duly
given as aforesaid, and moneys for payment of the principal amount of the Bonds
to be redeemed, the redemption premium, if any, thereon, and interest due and
unpaid to the redemption date thereon being held by the Trustee, the Bonds so
called for redemption shall, on the redemption date designated in such notice,
become due and payable at the redemption price specified in such notice,
interest on the Bonds so called for redemption shall cease to accrue, said Bonds
shall cease to be entitled to any lien, benefit or security under this
Indenture, and the Holders of said Bonds shall have no rights in respect thereof
except to receive payment of the principal amount thereof, redemption premium,
if any, thereon, and accrued interest thereon to said redemption date.

     All unpaid interest installments for interest which shall have become due
and payable on or prior to such date of redemption on registered Bonds so called
for redemption shall be paid to the registered owner thereof as provided in
Section 4.7.

     All Bonds redeemed pursuant to the provisions of this Article shall be
cancelled upon surrender thereof and delivered to the Authority, subject to
Section 14.4 hereof, or, at the option of the Trustee, the Trustee shall deliver
a certificate with respect to the destruction to the Authority.







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                                   ARTICLE IX

            ADDITIONAL REPRESENTATIONS AND COVENANTS OF THE AUTHORITY

     Section 9.1    PAYMENT OF PRINCIPAL AND INTEREST.  The Authority will
punctually pay the principal and the interest (and premium, if any) to become
due in respect to every Bond issued hereunder at the times and places and in the
manner provided herein and in the Bonds according to the true intent and meaning
thereof.  When and as paid in full, all Bonds shall be delivered to the Trustee,
shall forthwith be destroyed and a certificate of destruction shall be delivered
to the Authority.

     Section 9.2    ACCOUNTING RECORDS AND REPORTS.  The Authority shall keep
(or cause to be kept) proper books of record and account in which complete and
correct entries shall be made of all transactions relating to the receipts,
disbursements, allocation and application of the Revenues, and such books shall
be available for inspection by the Trustee and by any Holder of Bonds, or his
agent or representative, at reasonable hours and under reasonable conditions. 
Not more than 120 days after the close of each fiscal year of the Authority
(which fiscal year currently ends December 31), the Authority shall furnish, to
the Trustee, and to any Bondholder who may so request, a complete financial
statement covering receipts, disbursements, allocation and application of
Revenues for such fiscal year, and including a balance sheet, and the related
statements of revenue and expense, changes in fund balances and changes in
financial position for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, all certified as to
fairness of presentation, generally accepted accounting principles and
consistency by independent public accountants of nationally recognized standing.

     The Authority shall also deliver to the Trustee, without cost, promptly
upon the occurrence of any Event of Default, a certificate of the chief
financial officer of the Authority setting forth the details thereof and the
action which the Authority is taking or proposes to take with respect thereto;
and from time to time such additional information regarding the financial
position, results of operations, business or prospects of the Authority as the
Trustee may reasonably request.

     In no event shall receipt by the Trustee of financial and other reports
from the Authority as provided in this Indenture, review of which could lead to
the conclusion that an Event of Default exists hereunder, impose upon the
Trustee the obligation to review and examine the same, it being understood that
all such information shall be received  by the Trustee as repository for said
information and document with no obligation on the part of the Trustee to review
the same.

     Section 9.3    COMPLIANCE WITH INDENTURE.  The Authority will not issue, or
permit to be issued, any Bonds in any manner other than in accordance with the
provisions of this Indenture, and will not suffer or permit any default to occur
under this Indenture, but will faithfully observe and perform all the covenants,
conditions and requirements hereof.



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     Section 9.4    AUTHORIZATION FOR BONDS.  The Authority hereby represents
and warrants that it is duly authorized under the laws of the State of Colorado,
and any other applicable provisions of law, to create and issue the Bonds and to
execute this Indenture; all corporate action on its part required for the lawful
creation and issue of the Bonds and the execution of this Indenture has been
duly and effectively taken; and the Bonds, upon the issue thereof, will be valid
obligations of the Authority enforceable in accordance with their terms.

     Section 9.5    OBSERVANCE OF LAWS AND REGULATIONS, ERISA.  The Authority
will well and truly keep, observe and perform all valid and lawful obligations
and regulations now or hereafter imposed on it by contract, or prescribed by any
law of the United States of America, or of the State of Colorado, or by any
officer, board or commission having jurisdiction or control, as a condition of
the continued enjoyment of any and every right, privilege or franchise now owned
or hereafter acquired by the Authority, including its right to exist and carry
on business as a corporation, to the end that such contracts, rights and
franchises shall be maintained and preserved, and shall not become abandoned,
forfeited or in any manner impaired.

     The Authority will comply with the minimum funding requirements of ERISA
with respect to any retirement plan of the Authority that is subject to ERISA.

     Section 9.6    MAINTENANCE AND REPAIR OF PROJECT.  The Authority shall
construct and maintain or cause to be maintained in good condition and keep in
good repair the Project and all buildings, facilities and equipment now or
hereafter constituting any part of the Trust Estate, shall maintain the Project
as a fully equipped and operational facility, and shall not commit or allow any
waste with respect to any of the Trust Estate.

     Section 9.7    OTHER LIENS.  The Authority shall keep the Trust Estate and
all parts thereof free from judgments, mechanics, and materialmen's liens
(except those arising from the construction of the Project) and free from all
liens, claims, demands and encumbrances of whatsoever prior nature or character,
to the end that the priority of the lien of this Indenture may at all times be
maintained and preserved, and free from any claim or liability which, in the
judgment of the Trustee (and its determination thereof shall be final), might
embarrass or hamper the Authority in conducting its business or operating the
Trust Estate, and the Trustee at its option (after first giving the Authority
ten days, written notice to comply therewith and failure of the Authority to so
comply within said ten-day period) may (but shall not be obligated to) defend
against any and all actions or proceedings in which the validity of this
Indenture or its priority is or might be questioned, or pay or compromise any
claim or demand asserted in any such actions or proceedings; provided, however,
that, in defending against such actions or proceedings or in paying or
compromising such claims or demands, the Trustee shall not in any event be
deemed to have waived or released the Authority from liability for or on account
of any of its covenants and warranties contained herein, or from its liability
hereunder to defend the validity or priority of this Indenture and the lien
hereof and to perform such covenants and warranties.



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<PAGE>

     So long as any Bonds are outstanding, the Authority will not create or
suffer to be created any mortgage, pledge, lien or charge upon all or any part
of the Trust Estate, the Project or the Revenues, on a senior or parity lien to
the lien of this Indenture, except the Deed of Trust and encumbrances permitted
thereby, and as expressly permitted by Section 3.6.

     The Authority may incur Non-Recourse Indebtedness without any limitation
hereunder.

     Section 9.8    COMPLIANCE WITH CONTRACTS.  The Authority shall comply with
the terms, covenants and provisions, express or implied, of all contracts for
the use of the Trust Estate by the Authority, and all other contracts and
agreements affecting or involving the Trust Estate or the business of the
Authority.

     Section 9.9    PROSECUTION AND DEFENSE OF SUITS.  The Authority shall
promptly, upon request of the Trustee or any Bondholder, from time to time take
such action as may be necessary or proper to remedy or cure any defect in or
cloud upon the title to the Trust Estate or any part thereof, whether now
existing or hereafter developing, shall prosecute all such suits, actions and
other proceedings as may be appropriate for such purpose and shall indemnify and
save the Trustee and every Bondholder harmless from all loss, cost, damage and
expense, including attorneys' fees, which they or any of them may incur by
reason of any such defect, cloud, suit, action or proceeding.

     The Authority shall defend against every suit, action or proceeding at any
time brought against the Trustee or any Bondholder upon any claim arising out of
the receipt, application or disbursement of any of the Revenues or involving the
rights of the Trustee or any Bondholder under this Indenture; provided, that the
Trustee or any Bondholder at its or his election may appear in and defend any
such suit, action or proceeding.  The Authority shall indemnify and hold
harmless the Trustee and the Bondholders against any and all liability claimed
or asserted by any person, arising out of such receipt, application or
disbursement, and shall indemnify and hold harmless the Bondholders against any
attorneys' fees or other expenses which any of them may incur in connection with
any litigation to which any of them may become a party by reason of his
ownership of Bonds. The Authority shall promptly reimburse any Bondholder in the
full amount of any attorneys' fees or other expenses which he may incur in
litigation or otherwise in order to enforce his rights under this Indenture or
the Bonds, provided that such litigation shall be concluded favorably to such
Bondholder's contentions therein.  Notwithstanding any contrary provision hereof
this covenant shall remain in full force and effect, even though all
indebtedness and obligations secured hereby may have been fully paid and
satisfied and this Indenture may have been released and discharged, until the
Authority shall have been dissolved.

     Section 9.10   EMINENT DOMAIN.  If all or any part of the Trust Estate
shall be taken by eminent domain proceedings (or sold to a government
threatening to exercise the power of eminent domain), the proceeds therefrom
shall be deposited with the Trustee in a special fund in trust which it is
authorized to establish and shall be applied and disbursed by the Trustee as
follows:



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<PAGE>

          (a)  (i)   If the Trustee is furnished with the report specified in
     Section 9.10(a)(iii) to the effect that such eminent domain proceedings
     have not materially affected the operation of the Project or the ability of
     the Authority to meet any of its obligations hereunder, and if such report
     states that such proceeds are not needed for repair or rehabilitation of
     the Project, the Trustee shall treat such proceeds as Revenues and shall
     apply such proceeds as provided in Section 4.4, subject to Section 9.10(e)
     hereof.

               (ii)  If the Trustee is furnished with the report specified in
     Section 9.10(a)(iii) to the effect that such eminent domain proceedings
     have not materially affected the operation of the Project or the ability of
     the Authority to meet any of its obligations hereunder, and if such report
     states that such proceeds are needed for repair or rehabilitation of the
     Project, the Trustee shall pay to the Authority, or to its order, from said
     proceeds such amounts as the Authority may expend for such repair or
     rehabilitation, upon the filing with the Trustee of such Written
     Requisitions of the Authority, certificates of architects or engineers.

               (iii) In making any such application (including the application 
     mentioned in the following subsection (b)), the Trustee shall be provided,
     at the expense of the Authority, the report of an independent engineer or
     other independent professional consultant.  Any such application by the
     Trustee shall be final.

          (b)  If less than all of the Project shall have been taken in such
eminent domain proceedings, and if the Trustee is furnished a report of an
independent engineer concluding that such eminent domain proceedings have
materially affected the operation of the Project or the ability of the Authority
to meet any of its obligations hereunder, the Trustee shall deposit the proceeds
to the Redemption Holding Account as provided in Section 4.6 hereof, subject to
Section 9.10(e) hereof.

          (c)  (i)  If all of the Project shall have been taken in such eminent
     domain proceedings and if proceeds from such taking allocable to the
     Project (after applying Section 9.10(e) hereof), together with any other
     moneys then available to the Trustee for the purpose, are sufficient to
     provide for the payment of the entire amount of principal then due or to
     become due upon the Bonds, together with the interest thereon, so as to
     enable the Authority to retire all of the Bonds then outstanding by
     redemption or by payment at maturity, the Trustee shall deposit the
     proceeds in the  Redemption Holding Account and shall apply such proceeds
     to the payment of such interest and to such retirement.

               (ii) If all of the Project shall have been taken in such eminent
     domain proceedings and if such proceeds (after applying Section 9.10(e)
     hereof), together with any other moneys then available to the Trustee for
     the purpose, are insufficient to provide moneys for the purposes specified
     in paragraph (i) of this subsection (c), the Trustee shall deposit the
     proceeds in the Redemption Holding Account.



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<PAGE>

          (d)  After all of the Bonds have been retired and the entire amount of
principal due or to become due upon the Bonds, together with the interest
thereon, have been paid in full, the Trustee shall pay the remainder of such
proceeds to the District and the Authority in accordance with their respective
interests as directed by the Authority subject to Section 9.10(e) hereof.

          (e)  In the event the Authority shall issue or incur subordinate
indebtedness as provided in Section 3.6 hereof for the acquisition, construction
or completion of improvements or additions to the Project and all or less than
all of the Project shall be taken in such eminent domain proceedings, the
Authority shall be entitled to allocate proceeds of such eminent domain between
the Property and such additions and improvements financed with such subordinate
indebtedness on the basis of relative fair market values and apply the proceeds
in accordance with such allocation.

     Section 9.11   FURTHER ASSURANCES.  Whenever and so often as requested so
to do by the Trustee or any Bondholder, the Authority will promptly execute and
deliver or cause to be executed and delivered all such other and further
instruments, documents or assurances, and promptly do or cause to be done all
such other and further things, as may be necessary or reasonably required in
order to further and more fully vest in the Trustee and the Bondholders all
rights, interest, powers, benefits, privileges and advantages conferred or
intended to be conferred upon them by this Indenture.





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<PAGE>

                                    ARTICLE X

                         EVENTS OF DEFAULT AND REMEDIES

     Section 10.1   EVENTS OF DEFAULT: ACCELERATION: WAIVER OF DEFAULT.  Any one
or more of the following events shall constitute an Event of Default hereunder:

          (a)  Default shall be made in the due or punctual payment (other than
Extra Payments prior to the maturity of the Bonds) of the principal of, or
premium (if any) on, any Bond when and as the same shall become due and payable,
whether at maturity as therein expressed, by proceedings for redemption, by
declaration or otherwise;

          (b)  Default shall be made in the due and punctual payment (other than
Extra Payments prior to the maturity of the Bonds) of any installment of
interest on any Bond, when and as such interest installment shall become due and
payable;

          (c)  There shall occur a breach of any material representation of the
Authority herein, or default shall be made by the Authority in the performance
or observance of any other of the covenants, agreements or conditions on its
part in this Indenture or in the Bonds contained, and such default shall have
continued for a period of forty-five (45) days after written notice thereof,
specifying such default and requiring the same to be remedied, shall have been
given to the Authority and the Credit Enhancement Provider by the Trustee, or to
the Authority and the Trustee by the Credit Enhancement Provider;

          (d)  The Authority shall (1) admit in writing its inability to pay its
debts generally as they become due, (2) file a petition in bankruptcy or to take
advantage of any insolvency act, (3) make an assignment for the benefit of its
creditors, (4) consent to the appointment of a receiver of itself or of the
whole or any substantial part of its property, or (5) on a petition in
bankruptcy filed against the Authority, be adjudicated a bankrupt;

          (e)  The Authority shall file a petition or answer seeking
reorganization or arrangement under the federal bankruptcy laws or any other
applicable law of the United States of America or any State thereof;

          (f)  A court of competent jurisdiction shall enter an order, judgment
or decree appointing, without the consent of the Authority, a receiver of the
Authority, or of the whole or any substantial part of its property, or approving
a petition filed against the Authority seeking reorganization of the Authority
under the federal bankruptcy laws or any other applicable law of the United
States of America or any State thereof, and such order, judgment or decree shall
not be vacated or set aside and stayed within sixty (60) days from the date of
the entry thereof; or

          (g)  Under the provisions of any other law for the relief or aid of
debtors, any court of competent jurisdiction shall assume custody or control of
the Authority or of the whole 



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<PAGE>

or any substantial part of its property, and such custody or control shall 
not be terminated or stayed within sixty (60) days from the date of 
assumption of such custody or control; or

          (h)  There is a breach of a covenant or a material representation by
the Credit Enhancement Provider under the Credit Enhancement.

     In each and every such case during the continuance of an Event of Default,
unless the principal of all the Bonds shall have already become due and payable,
the Trustee, by notice in writing to the Authority may, and upon written request
of the Credit Enhancement Provider or the Holders of not less than twenty-five
per cent (25%) in aggregate principal amount of the Bonds at the time
outstanding, shall, declare the principal of all the Bonds then outstanding, and
the interest accrued thereon, to be due and payable immediately, and upon any
such declaration the same shall become and shall be immediately due and payable,
subject to the further provisions of this Section 10.1, but the Bonds will be
accelerated and become due and payable only if Available Moneys sufficient to
pay such Bonds shall be deposited with the Trustee on or before the date
specified for such acceleration.

     This provision, however, is subject to the condition that if, at any time
after the principal of the Bonds shall have been so declared due and payable,
and before any judgment or decree for the payment of the moneys due shall have
been obtained or entered as hereinafter provided, the Authority shall deposit
with the Trustee Available Moneys sufficient to pay all principal on the Bonds
matured prior to such declaration and all matured installments of interest (if
any) upon all the Bonds, with interest on such overdue installments of principal
at the rate or rates of interest required hereunder and the reasonable fees and
expenses (including, without limitation, those of its counsel) of the Trustee,
and any and all other defaults known to the Trustee (other than in the payment
of principal of and interest on the Bonds due and payable solely by reason of
such declaration) shall have been made good or cured to the satisfaction of the
Trustee or provision deemed by the Trustee to be adequate shall have been made
therefor, then, and in every such case, the Trustee, with the consent of the
Credit Enhancement Provider and, if the Credit Enhancement Provider has failed
to provide payments specified in Section 4.2 hereof, the Holders of at least a
majority in aggregate principal amount of the Bonds then outstanding, by written
notice to the Authority and the Holders of the Bonds, may rescind and annul such
declaration and its consequences and waive such default; but no such rescission
and annulment shall extend to or shall affect any subsequent default, or shall
impair or exhaust any right or power consequent thereon, provided that no such
recision shall require consent of the Credit Enhancement Provider if such
rescission occurs following the occurrence and continuance of an event of
default by the Credit Enhancement Provider under the Credit Enhancement.

     The foregoing is subject to the limitation that (i) no Event of Default or
acceleration shall occur without the consent of the Credit Enhancement Provider
while the Credit Enhancement Provider has continued to provide funds sufficient
to pay principal of and interest on the Bonds pursuant to Section 4.2 hereof
(except for Extra Payments or amounts payable on redemption following occurrence
described in Section 9.10(c) hereof) and is otherwise not in breach of a
covenant or a material representation by the Credit Enhancement Provider under
the Credit 



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<PAGE>

Enhancement, and (ii) neither the consent of the Credit Enhancement Provider 
nor the deposit of Available Moneys shall be required for acceleration if the 
Credit Enhancement Provider is continuing to fail to provide such amounts or 
is otherwise in breach of a covenant or a material representation by the 
Credit Enhancement Provider under the Credit Enhancement.

     Anything to the contrary set forth in this Indenture notwithstanding, if an
Event of Default shall occur hereunder, the District shall have an exclusive
option to purchase all properties, equipment or other assets financed by the
Bonds and any and all additions to that property, equipment or assets for an
amount equal to the unpaid principal amount of all Bonds then outstanding and
accrued interest thereon to the date of the Event of Default.  The District
shall have (a) not less than ninety (90) days from the date it is notified by
the Authority of the Event of Default in which to exercise this option, and (b)
not less than ninety (90) days from the date the District exercises the option
to purchase such property, equipment and assets.  Upon an Event of Default the
Authority shall immediately notify the Trustee and the District of such an Event
of Default and rights to purchase hereunder by telex, telecopy or telephone
(confirmed in writing).  If the District exercises such an option to purchase,
the purchase price paid by the District shall be immediately applied by the
Trustee in accordance with Section 10.3 hereof.  The Authority shall remain
liable to the Holders of the Bonds for any interest accruing thereon following
an Event of Default and not paid from such purchase price, if any, paid by the
District to the Trustee in accordance with this Section 10.1.

     The Trustee shall not be required to take notice, or be deemed to have
notice, of any default or Event of Default under this Indenture, other than an
Event of Default under Sections 10.1(a) and (b), unless specifically notified in
writing of such default or Event of Default by the Credit Enhancement Provider
or by the Holders of not less than twenty-five percent (25%) in aggregate of the
Bonds at the time outstanding.

     Notwithstanding the foregoing, no Event of Default shall occur hereunder as
a result of any nonpayment of amounts specified in Section 4.9 hereof, if, in
the opinion of Bond Counsel, such failure shall not cause interest on the Bonds
to become subject to inclusion in gross income for federal income tax purposes.

     Section 10.2   POWER OF TRUSTEE TO ENTER AND TAKE POSSESSION OF TRUST
ESTATE.  If one or more of the Events of Default shall happen and be continuing,
then and in each and every case the Trustee, either personally or by its agents
or attorneys, may, in its discretion, and upon the written request of the Credit
Enhancement Provider or the Holders of not less than a majority in principal
amount of the Bonds then outstanding, and upon being indemnified to its
satisfaction, forthwith shall, enter into and upon and take and hold possession
of the Trust Estate, and may exclude the Authority and its agents and servants
and all other persons or corporations wholly therefrom and may use, manage and
control the Trust Estate and conduct the business of the Authority with respect
thereto in such manner as in its discretion it shall deem to be to the best
advantage of the Credit Enhancement Provider and the Holders of the Bonds.

     In aid of the exercise of the power of entry conferred upon the Trustee
under the foregoing provisions of this Section, the Trustee in its discretion
and without notice or demand 



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<PAGE>

upon the Authority, such notice and demand being hereby expressly waived, 
shall be entitled to the appointment of a receiver by any court of competent 
jurisdiction, and such receiver so appointed shall be entitled to exercise 
all the powers hereby conferred upon the Trustee under the provisions of this 
Article in the management and operation of the Trust Estate.

     Section 10.3   APPLICATION OF MONEYS.  Upon every such entry the Trustee
from time to time, and at the expense of the Trust Estate, may maintain and
restore and insure and keep insured the Trust Estate and make all necessary
repairs, renewals, replacements, alterations, additions, betterments and
improvements, as it may deem judicious.  The Trustee in case of such entry shall
have the right to manage the Trust Estate and to carry on the business of the
Authority with respect thereto and to exercise all the rights and powers of the
Authority either in the name of the Authority or otherwise, as the Trustee shall
deem best, and shall be entitled to collect, take and receive all earnings,
income, rents, issues and profits of the Trust Estate.

     All moneys received by the Trustee pursuant to any right given or action
taken under the provisions of this Article shall, after deducting the costs and
expenses of collecting or securing the same, and after deducting the expenses of
operating the Trust Estate and of conducting the business thereof, and of all
repairs, maintenance, renewals, replacements, alterations, additions,
betterments and improvements, and all payments or reserves that may be made or
set up, in the Trustee's discretion, for taxes, assessments, insurance and prior
or other proper charges upon or in connection with the operation of the Trust
Estate or any part thereof, as well as just and reasonable compensation for its
own services and for the services of counsel, agents and employees by it
properly engaged and employed, and after making reimbursement to itself for
advances made pursuant to the provisions of this Indenture with interest on all
such advances at the prime (or equivalent) rate most recently quoted by the
Trustee plus two percent (2%) per annum or, if less, the maximum rate allowed by
any applicable usury law, the Trustee shall apply moneys received by it pursuant
to this Section as follows: 

          FIRST:    In case the principal of none of the Bonds shall have
     become due and remain unpaid, to the payment of interest in default in the
     order of the accrual thereof, such payments to be made ratably to the
     persons entitled thereto without discrimination or preference.

          SECOND:   In case the principal of any of the Bonds shall have become
     due by acceleration or otherwise and remain unpaid, first to the payment of
     interest in default in the order of the accrual thereof, then to the
     payment of the principal of all Bonds then due and unpaid, with interest on
     the overdue principal at the rate or rates of interest borne by the
     respective Bonds; in each instance such payment to be made ratably to the
     persons entitled thereto without discrimination or preference.

     Upon the payment in full of all amounts due for such principal or interest,
or payable for other purposes, and if the Authority shall not then be in default
hereunder, the Trust Estate (except any money required to be held by the Trustee
under any other Section of this Indenture) shall be returned to the Credit
Enhancement Provider in satisfaction of obligations of the Authority to the
Credit Enhancement Provider under the Reimbursement Agreement and the Deed of
Trust, including interest thereon as provided in the Reimbursement Agreement,
and 



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<PAGE>

upon certification to the Trustee by the Credit Enhancement Provider that all 
such obligations (including such interest) have been paid in full, any 
balance remaining shall be paid to  the Authority, its successors or assigns, 
or to whosoever may be lawfully entitled thereto.

     Section 10.4   INSTITUTION OF LEGAL PROCEEDINGS BY TRUSTEE.  If one or more
of the Events of Default shall happen and be continuing, the Trustee in its
discretion may, and upon the written request of the Credit Enhancement Provider
or the Holders of not less than a majority in principal amount of the Bonds then
outstanding, and upon being indemnified to its reasonable satisfaction therefor,
shall, proceed to protect or enforce its rights or the rights of Credit
Enhancement Provider and the Holders of Bonds under this Indenture by a suit in
equity or action at law, either for the specific performance of any covenant or
agreement contained herein, or in aid of the execution of any power herein
granted, or for the foreclosure of this Indenture, or for the enforcement of any
other appropriate legal or equitable remedy as the Trustee shall deem most
effectual in support of any of its rights or duties hereunder; and upon
instituting such proceeding, or in order to take possession of the Trust Estate
as hereinabove provided, the Trustee shall be entitled as of right to the
appointment of a receiver of the Trust Estate, without notice or demand to or
upon the Authority, which notice and demand are hereby expressly waived.

     Section 10.5   POWER OF SALE.  If one or more of the Events of Default
shall happen and be continuing, the Trustee, without entry, personally or by
attorney, in its discretion may, and upon the written request of the Credit
Enhancement Provider or the Holders of not less than a majority in principal
amount of the Bonds then outstanding, and upon being indemnified to its
reasonable satisfaction therefore, shall, take any and all action permitted to
be taken by it pursuant to the Credit Enhancement and Deed of Trust, and except
as otherwise provided in the Deed of Trust with respect to the Project, proceed
to sell to the highest and best bidder all and singular the Trust Estate (except
any money then held by the Trustee under any provision of this Indenture) and
all rights, title, interest, claim and demand therein and thereto of the
Authority.  Except as otherwise provided in the Deed of Trust and in respect to
the Project, such sale shall be made at public auction and at such place or
places in the county in which the Trust Estate or a portion thereof is located,
and at such time or times and upon such notice as the Trustee may be advised by
counsel to be consistent with the laws, if any, applicable thereto, and upon
such terms as the Trustee may fix.  In connection with any such sale, the
Trustee, in its sole discretion, may authorize an appraisal of the Trust Estate
to be made by such person or persons as the Trustee may select.  Further, the
Trustee may reject any and all bids submitted at such sale if, in the opinion of
the Trustee, such bids do not represent a fair price for the Trust Estate, and
may postpone any sale until such time as the Trustee shall determine.  Any
person, including the Authority, the Trustee, the Credit Enhancement Provider
and any Holder of Bonds, may purchase at any such sale and the Trustee may make
a credit bid at any such sale on behalf of the Holders of the Bonds then
outstanding in any amount up to but not exceeding the total indebtedness then
owed under the Indenture.  Notice of any sale pursuant to any provision of this
Indenture shall state the time and place when and where the same is to be made,
shall contain a brief general description of the property to be sold, shall
briefly state the terms of the sale and shall be given by publication or posting
or both to the extent and in the manner required by law.



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     Section 10.6   ACCELERATION UPON EXERCISE OF POWER OF SALE.  In the event
of any sale of the Trust Estate made under the power of sale hereby granted and
conferred, or under or by virtue of judicial proceedings, or of any judgment or
decree of foreclosure and sale, the principal of all Bonds, if not previously
due, immediately shall become and be due and payable, anything in said Bonds or
in this Indenture to the contrary notwithstanding.

     Section 10.7   SALE AS ENTIRETY OR IN PARCELS.  Should any such sale be
made pursuant to judicial proceedings, such sale shall be made either as an
entirety or in such parcels as may be directed by the court, or should such sale
be made by the Trustee under the power of sale hereby granted, such sale shall
be made either as an entirety or in such parcels as the Trustee in its sole
discretion may determine.

     The Public Body shall have a first right and option, in the event of any
proposed sale pursuant to judicial proceedings or by the Trustee under the power
of sale herein granted, to purchase the Trust Estate at the price sufficient to
retire and pay all indebtedness of the Authority then outstanding and secured by
this Indenture.

     The Authority, for itself and all persons and corporations hereafter
claiming through or under it, or who may at any time hereafter become holders of
liens junior to the lien of this Indenture, hereby expressly waives and releases
all right to have the properties and rights comprised in the Trust Estate
marshaled upon any foreclosure or other enforcement hereof, and the Trustee or
any court in which the foreclosure of this Indenture or administration of the
trusts hereby created is sought shall have the right as aforesaid to sell the
entire property of every description comprised in or subject to the trusts
created by this Indenture as a whole in a single parcel as an entirety or in
such parcels.

     Section 10.8   ADJOURNMENTS OF SALE.  The Trustee from time to time may
adjourn any such sale to be made by it by announcement at the time and place
appointed for such sale or for such adjourned sale or sales, and without further
notice or publication it may make such sale at the time to which the same shall
be so adjourned, but in the event of such adjournment or adjournments, sale
shall be made within six months from the date of sale fixed in the
advertisement, unless notice of sale on some later date shall be given again in
the manner provided in Section 10.5.

     Section 10.9   TRANSFER TO BUYER AT SALE.  Except as otherwise provided in
the Deed of Trust, upon completion of any such sale or sales, the Trustee shall
execute and deliver to the accepted buyer or buyers a good and sufficient deed
or assignment of the property or properties sold, or shall execute and deliver,
in conjunction with the deed or assignment of the court officer conducting such
sale, a proper release of such properties.  The Trustee is hereby irrevocably
appointed the true and lawful attorney of the Authority, in its name and stead
to make all necessary deeds and assignments of such properties thus sold; and
for that purpose the Trustee may execute all necessary instruments of
conveyance, assignment and transfer, and may substitute one or more persons or
corporations with like power, and the Authority hereby ratifies and confirms all
that its said attorney or attorneys, or such substitute one or more persons or



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corporations with like power, shall lawfully do by virtue hereof.  Nevertheless,
the Authority, if so requested by the Trustee, shall execute and deliver to the
buyer or buyers such deeds, assignments, transfers and releases as may be
designated in such request.

     In the event of a sale of said Trust Estate, or any part thereof, and the
execution of a deed or assignment thereof under these trusts, the recital
therein of default, publication of notice of sale, demand that such sale be
made, postponement of sale, terms of sale, sale, purchase, payment of purchase
money and any other fact affecting the regularity or validity of such sale shall
be effectual and conclusive proof of the facts recited therein as against the
Authority, its successors and assigns, and all other persons.

     Section 10.10  SALE A BAR AGAINST AUTHORITY.  Any such sale shall divest
all right, title, interest, claim and demand whatsoever, either at law or in
equity, of the Authority, its successors and assigns of, in and to the property
and premises sold, and shall be a perpetual bar, both at law and in equity,
against the Authority, its successors and assigns, and against any and all
persons claiming or who may claim the property sold or any part thereof, from,
through or under the Authority, its successors or assigns.

     Section 10.11  BUYER NOT LIABLE FOR APPLICATION OF PURCHASE MONEY.  The
receipt of the Trustee or of the court officer conducting such sale shall be a
sufficient discharge for the purchase money of any buyer of the property or any
part thereof, sold as aforesaid, and no buyer or representatives, grantees or
assigns of any buyer, after paying such purchase money and receiving such
receipt, shall be bound to see to the application of such purchase money upon or
for any trust or purpose of this Indenture, or in any manner whatsoever be
answerable for any loss, misapplication or non-application of such purchase
money or any part thereof or be bound to inquire as to the authorization,
necessity, expediency or regularity of any such sale.

     Section 10.12  APPLICATION OF BONDS TO PURCHASE PRICE.  In case of any such
sale, for the purpose of making settlement or payment for the property
purchased, the buyer shall be entitled to turn in or apply toward the payment of
the purchase price any Bonds and to be credited therefor, to the extent of the
value of or amount which would be payable upon such Bonds upon a distribution
among the Holders of Bonds of the net proceeds of such sale, after making the
deductions allowable under the terms hereof for the costs and expenses of the
sale and otherwise; but such Bonds so applied in payment by the buyer shall be
deemed to be paid only to the extent so applied.

     Section 10.13  PURCHASE BY TRUSTEE.  At any such sale the Trustee or any
Holder of Bonds may bid for and purchase such property and may make payment on
account thereof as aforesaid, and upon compliance with the terms of sale may
hold, retain and dispose of such property without further accountability
therefor.

     Section 10.14  APPLICATION OF PROCEEDS OF SALE.  The purchase money,
proceeds and avails of any such sale, together with any sums which may then be
held by the Trustee or be payable 



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to and received by it under any of the provisions of this Indenture as part 
of the Trust Estate or of the proceeds thereof, shall be applied as provided 
in Section 10.3 hereof.

     Section 10.15  EFFECT OF DELAY OR OMISSION TO PURSUE REMEDY.  No delay or
omission of the Trustee, the Credit Enhancement Provider or of any Holder of
Bonds to exercise any right or power arising from any Event of Default shall
impair any such Event of Default or acquiescence therein; and every power and
remedy given by this Article to the Trustee, the Credit Enhancement Provider or
to the Holders of Bonds may be exercised from time to time, and as often as
shall be deemed expedient.  In case the Trustee shall have proceeded to enforce
any right under this Indenture by entry, foreclosure or otherwise, and such
proceedings shall have been discontinued or abandoned because of waiver or for
any other reasons, or shall have been determined adversely to the Trustee, then
and in every such case the Authority, the Trustee, the Credit Enhancement
Provider, and the Holders of the Bonds, severally and respectively, shall be
restored to their former positions and rights hereunder in respect to the Trust
Estate; and all remedies, rights and powers of the Authority, the Trustee, the
Credit Enhancement Provider and the Holders of the Bonds shall continue as
though no such proceedings had been taken.

     Section 10.16  REMEDIES CUMULATIVE.  No remedy herein conferred upon or
reserved to the Trustee, the Credit Enhancement Provider or to any Holder of the
Bonds is intended to be exclusive of any other remedy, but each and every such
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder.

     Section 10.17  WAIVER BY AUTHORITY OF BENEFITS OF LAWS FOR PROTECTION OF
DEBTORS.  The Authority will not, at any time claim, take or insist upon any
benefit or advantage from any law now or hereafter in force providing for the
valuation or appraisement of the trust property, or any part thereof, prior to
any sale thereof to be made pursuant to any provision herein contained, or
pursuant to the decree, judgment or order of any court of competent
jurisdiction; nor, after any such sale, will it claim or exercise any right,
under any statute now or hereafter enacted, to redeem the property so sold, or
any part thereof; and the Authority hereby expressly waives all benefit and
advantage of any such law and covenants that it will not invoke or utilize any
such law in order to hinder, delay or impede the execution of any power herein
granted and delegated to the Trustee, but will suffer and permit the execution
of every such power as though no such law had been enacted.

     Section 10.18  COVENANT TO PAY BONDS IN EVENT OF DEFAULT, ETC.  The
Authority covenants that, upon the happening of any Event of Default, the
Authority will pay to the Trustee, upon demand, for the benefit of the Holders
of the Bonds, the whole amount then due and payable thereon (by declaration or
otherwise) for interest or for principal, or both, as the case may be, and all
other sums which may be due hereunder or secured hereby (with interest on
overdue principal at the rate or rates of interest borne by the respective
Bonds), including reasonable compensation to the Trustee, its agents, attorneys
and counsel, and any expenses or liabilities incurred by the Trustee hereunder. 
In case the Authority shall fail to pay the same forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, shall be 



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entitled to institute proceedings or file a claim in any proceedings at law 
or in equity or in bankruptcy in any court of competent jurisdiction to 
recover judgment for the whole amount due and unpaid, together with costs and 
reasonable attorneys' fees.  The Trustee shall be entitled to file a claim 
and to recover judgment as aforesaid, either before or after or during the 
pendency of any trustee's sale proceedings or any proceedings for the 
enforcement of the lien of this Indenture upon the Trust Estate, and the 
right of the Trustee to file such a claim or to recover such judgment shall 
not be affected by any entry or sale, or by the exercise of any other right, 
power or remedy for the enforcement of the provisions of this Indenture or 
for the foreclosure of the lien hereof; and, in case of a sale of the Trust 
Estate, or any portion thereof, and of the application of the proceeds of 
sale to the payment of said indebtedness, the Trustee, in its own name and as 
trustee of an express trust, shall be entitled to enforce payment of and to 
receive all amounts then remaining due and unpaid upon the Bonds then 
outstanding, for the benefit of the Holders thereof, and shall be entitled to 
recover judgment for any portion of said indebtedness remaining unpaid, with 
interest.  No recovery of any judgment upon property subject to the lien of 
this Indenture or upon any other property shall in any manner or to any 
extent affect or impair the lien of this Indenture upon the Trust Estate or 
any part thereof or any rights, powers or remedies of the Credit Enhancement 
Provider or the Holders of the Bonds, but such lien rights, powers and 
remedies shall continue unaffected and unimpaired as before.  Any moneys 
collected by the Trustee upon any such judgment shall be applied by it in 
accordance with the provisions of Section 10.14 so far as the same may be 
applicable.

     Notwithstanding the foregoing provisions of this Section, the powers hereby
granted to the Trustee are strictly subject to the limitation that if by the
commencement of any action at law to recover judgment for any amount due and
unpaid hereunder or upon the Bonds or by the exercise of any other remedy prior
to or concurrently with trustee's sale proceedings or proceedings to enforce the
lien of this Indenture upon the Trust Estate, the security hereby provided for
would, despite the foregoing provisions of this Section, be surrendered,
impaired, waived or lost, the Trustee shall have no power to commence such
action at law or to exercise such power or remedy; but in case any statute now
in force providing in terms or effect that the commencement of an action to
recover a debt secured by mortgage shall be deemed a waiver of the security
thereof, or prohibiting the exercise of any other remedy prior to or
concurrently with trustee's sale proceedings or proceedings to enforce the lien
of a mortgage upon the premises mortgaged, or any statute which now impairs or
suspends the virtue of the foregoing provisions of this Section and of which the
Authority might take advantage, despite the said provisions, shall hereafter be
repealed or cease to be in force, such statute shall not be deemed to have
become or to be a part of the contract contained in this Indenture.

     Section 10.19  RIGHTS OF TRUSTEE IN RECEIVERSHIP PROCEEDINGS, ETC. In the
event of any receivership, insolvency, reorganization or bankruptcy proceedings
affecting the Authority or the Trust Estate, the Trustee, without prejudice to
or waiver of the lien and security of this Indenture or of any right conferred
hereby, shall be entitled, without being the Holder of any Bonds, to file and
prove a claim for the entire amount then due and payable by the Authority under
this Indenture without regard to or deduction for the value of the Trust Estate
or the security of this Indenture or for any amount which may thereafter be
collected, received or 



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realized by the Trustee from the Trust Estate or any part thereof, and the 
Trustee is hereby appointed the agent and attorney of the Holders of all 
Bonds outstanding hereunder for such purpose.

     Section 10.20  RIGHTS OF BONDHOLDERS TO CONTROL PROCEEDINGS BY TRUSTEE. 
The Holders of a majority in aggregate principal amount of the Bonds at the time
outstanding shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, under this Indenture.  In the event
that the Trustee, upon the happening of an Event of Default, shall have taken
some action, by judicial proceedings or otherwise, pursuant to its duties
hereunder, whether upon its own discretion or upon the request of the Credit
Enhancement Provider and the Holders of the above-specified principal amount of
Bonds then outstanding, it shall have full power, in the exercise of its
discretion for the best interests of the Credit Enhancement Provider or the
Holders of the Bonds, with respect to the continuance, discontinuance,
withdrawal, compromise, settlement or other disposal of such action; provided,
however, that the Trustee shall not, unless there no longer continues an event
of default hereunder, discontinue, withdraw, compromise, settle or otherwise
dispose of any litigation pending at law or in equity, if at the time there has
been filed with it a written request signed by the Credit Enhancement Provider
or the Holders of at least a majority in aggregate principal amount of the Bonds
at the time outstanding opposing such discontinuance, withdrawal, compromise,
settlement or other disposal of such litigation.

     Section 10.21  LIMITATION ON BONDHOLDERS' RIGHT TO SUE.  No Holder of any
Bond issued hereunder shall have the right to institute any suit, action or
proceeding at law or in equity, for the execution of any trust or power of this
Indenture or for any other remedy under or upon this Indenture, unless (a) such
Holder shall have previously given to the Trustee and the Credit Enhancement
Provider written notice of the occurrence of an Event of Default hereunder; (b)
the Holders of at least twenty-five per cent (25%) in aggregate principal amount
of the Bonds then outstanding shall have made written request to the Trustee to
exercise the powers hereinbefore granted or to institute such action, suit or
proceeding in its own name; (c) such Holder or said Holders shall have tendered
to the Trustee reasonable indemnity against the costs, expenses and liabilities
to be incurred in compliance with such request; and (d) the Trustee shall have
refused or omitted to comply with such request for a period of thirty (30) days
after such written request shall have been received by, and said tender of
indemnity shall have been made to, the Trustee.

     Such notification, request, tender of indemnity and refusal or omission are
hereby declared, in every case, to be conditions precedent to the exercise by
any Holder of Bonds of any remedy hereunder; it being understood and intended
that no one or more Holders of Bonds shall have any right in any manner whatever
by his or their action to enforce any right under this Indenture, except in the
manner herein provided, and that all proceedings at law or in equity to enforce
any provision of this Indenture shall be instituted, had and maintained in the
manner herein provided and for the equal benefit of all Holders of the
Outstanding Bonds.



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     Section 10.22  ABSOLUTE OBLIGATION OF AUTHORITY.  Nothing in Section 10.21
or in any other provision of this Indenture or in the Bonds shall affect or
impair the obligation of the Authority, which is absolute and unconditional, to
pay the principal of, premium, if any, and interest on the Bonds to the
respective Holders of the Bonds at their respective dates of maturity or upon
call for redemption as herein provided and at the place in such Bonds expressed.

     Section 10.23  WAIVER OF PERSONAL LIABILITY OF INDIVIDUALS.  No recourse
shall be had for the payment of the principal of or interest on the Bonds or for
any claim based thereon or otherwise in respect thereof or based on or in
respect of this Indenture or any indenture supplemental hereto, against any
incorporator, member, director or officer, as such, past, present or future, of
the Authority or of any predecessor or successor corporation, either directly or
through the Authority or otherwise, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty, or
otherwise; it being expressly understood that the Bonds and all obligations of
the Authority under this Indenture are solely corporate obligations and that all
such personal liability of such incorporators, members, directors and officers
is hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issue of the Bonds.

     Section 10.24  CREDIT ENHANCEMENT PROVIDER RIGHTS.  The Credit Enhancement
Provider shall have no right to direct, request, waive or consent to the
exercise of any remedies under this Article X during any period that the Credit
Enhancement Provider has continued to fail to perform in any material respect
any covenant, or has breached any material representation or warranty, within
the Credit Enhancement.  The Trustee shall notify the Bondholders and Standard &
Poor's Ratings Services of any such failure to perform by the Credit Enhancement
Provider.

     Section 10.25  CREDIT ENHANCEMENT PROVIDER TO BE SUBROGATED TO RIGHTS OF
HOLDERS.  The Credit Enhancement Provider shall, to the extent amounts are due
and payable to the Credit Enhancement Provider pursuant to the Reimbursement
Agreement, become subrogated to the rights of Holders, and to evidence such
subrogation, the Trustee shall note the Credit Enhancement Provider's rights as
subrogee on the registration books maintained by the Trustee.  The foregoing is
subject to the limitations that the Credit Enhancement Provider shall be
entitled to exercise its rights as a subrogee only when no Bonds are
outstanding.



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                                   ARTICLE XI

                                   THE TRUSTEE

     Section 11.1   DUTIES, IMMUNITIES AND LIABILITIES OF TRUSTEE;
REPRESENTATIONS AND WARRANTIES OF TRUSTEE.  The Trustee shall, prior to an Event
of Default, and after the curing of all Events of Default which may have
occurred, perform such duties and only such duties as are specifically set forth
in this Indenture.  The Trustee shall after an Event of Default and prior to the
curing of such Event of Default use the same degree of care and skill in the
exercise and use of the rights and remedies available to the Trustee, as a
prudent person would exercise or use under the circumstances in the conduct of
the affairs of others.

          (a)  No provision of this Indenture shall be construed to relieve the
     Trustee from liability for its own grossly negligent action or its own
     grossly negligent failure to act, except that:

               (i)  prior to an Event of Default hereunder and after the curing
          of all Events of Default which may have occurred:

                    (A)  the duties and obligations of the Trustee shall be
               determined solely by the express provisions of this Indenture and
               the Deed of Trust, the Trustee shall not be liable except for the
               performance of such duties and obligations as are specifically
               set forth in this Indenture and the Deed of Trust, and no implied
               covenants or obligations shall be read into this Indenture
               against the Trustee; and

                    (B)  in the absence of bad faith on the part of the Trustee,
               the Trustee may conclusively rely, as to the truth of the
               statements and correctness of the opinions expressed therein,
               upon any certificate or opinion furnished to the Trustee
               conforming to the requirements of this Indenture; but in the case
               of any such certificate or opinion which by any provision hereof
               is specifically required to be furnished to the Trustee, the
               Trustee shall be under a duty to examine the same to determine
               whether or not it conforms to the requirements of this Indenture
               (including without limitation the requirements of Section 6.1
               hereof); and

               (ii) at all times, regardless of whether or not any Event of
          Default shall exist:

                    (A)  the Trustee shall not be liable for any error of
               judgment made in good faith by a responsible officer or officers
               of the Trustee unless it shall be proved that the Trustee was
               grossly negligent in ascertaining the pertinent facts; and

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                    (B)  the Trustee shall not be liable with respect to any
               action taken or omitted to be taken by it in good faith in
               accordance with the direction of the Holders of not less than a
               majority (or other percentage provided for herein) in aggregate
               principal amount of the Bonds at the time outstanding relating to
               the time, method and place of conducting any proceeding for any
               remedy available to the Trustee, or exercising any trust or power
               conferred upon the Trustee under this Indenture.

     None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur individual financial
liability in the performance of any of its duties or in the exercise of any of
its rights or power.

          (b)  In connection with the acceptance of its duties hereunder, the
          Trustee makes the following representations and warranties:

                    (i)  DUE ORGANIZATION, VALID EXISTENCE.  The Trustee is duly
               organized and validly existing as a national banking association
               with corporate trust powers.

                    (ii) POWER AND AUTHORITY.  The Trustee has full power and
               authority to carry on its business as now being conducted and to
               enter into this Indenture and accept the trusts imposed upon it
               hereby.

                    (iii) EXECUTION AND DELIVERY.  This Indenture has been duly 
               executed and delivered by the Trustee.

                    (iv) ENFORCEABILITY.  This Indenture constitutes the valid,
               legal, binding and enforceable obligation of the Trustee (subject
               to bankruptcy, insolvency or creditor rights laws generally, and
               principles of equity generally) without offset, defense, or
               counterclaim.

                    (v)  NO CONFLICT.  The execution, delivery and performance
               of this Indenture by the Trustee will not cause or constitute
               (with due notice or lapse of time or both) a default under or
               conflict with the Trustee's organizational documents or other
               agreements by which the Trustee is bound or otherwise materially
               or adversely affect performance of the Trustee's duties.

                    (vi) NO VIOLATION OF LAWS.  The execution, delivery and
               performance of this Indenture by the Trustee will not violate any
               law, regulation, order or decree of any governmental authority.

                    (vii) CONSENTS OBTAINED.  All consents, approvals,
               authorizations, orders or filings of or with any court or
               governmental 

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               agency or body, if any, required for the execution, delivery
               and performance of this Indenture by the Trustee have been
               obtained or made.

                    (viii)  NO LITIGATION.  There is no pending action, suit
               or proceeding, arbitration or governmental investigation against
               the Trustee an adverse outcome of which would materially affect
               the Trustee's performance under this Indenture.

     Section 11.2   RIGHT OF TRUSTEE TO RELY UPON DOCUMENTS, ETC.  Except as
otherwise provided in Section 11.1:

          (a)  the Trustee may rely and shall be protected in acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, bond, or other paper or document reasonably believed by
it to be genuine and to have been signed or presented by the proper party or
parties;

          (b)  any notice, request, direction, election, order or demand of the
Authority mentioned herein shall be sufficiently evidenced by an instrument
signed in the name of the Authority by its President and by its Secretary or an
Assistant Secretary or its Treasurer (unless other evidence in respect thereof
be herein specifically prescribed); and any resolution of the District may be
evidenced to the Trustee by a Certified Resolution;

          (c)  the Trustee may consult with counsel (who may be counsel for the
Authority) and the opinion of such counsel shall be full and complete
authorization and protection in respect of any action taken or suffered by it
hereunder in good faith and in accordance with the opinion of such counsel; and

          (d)  whenever in the administration of the trusts of this Indenture
the Trustee shall deem it necessary or desirable that a matter be proved or
established prior to taking or suffering any action hereunder, such matter
(unless other evidence in respect thereof be herein specifically prescribed)
may, in the absence of gross negligence or bad faith on the part of the Trustee,
be deemed to be conclusively proved and established by a Certificate of the
Authority; and such Certificate of the Authority shall, in the absence of
negligence or bad faith on the part of the Trustee, be full warrant to the
Trustee for any action taken or suffered by it under the provisions of this
Indenture upon the faith thereof.

     Section 11.3   TRUSTEE NOT RESPONSIBLE FOR RECITALS; REFUSAL TO PERFORM.

          (a)  The recitals contained herein and in the Bonds shall be taken as
the statements of the Authority, and the Trustee assumes no responsibility for
the correctness of the same.  The Trustee shall not be accountable for the use
or application by the Authority of any of the Bonds authenticated or delivered
hereunder or of the proceeds of such Bonds.

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          (b)  The Trustee may refuse to perform any duty or exercise any right
or power unless and until it receives indemnity reasonably satisfactory to it
against any loss, liability or expense but the Trustee may not require indemnity
as a condition to declaring the principal of, premium, if any, and interest on
the Bonds to be due immediately under Section 10.01.  The permissive right of
the Trustee to do things enumerated under this Indenture shall not be construed
as a duty of the Trustee.

     Section 11.4   RIGHT OF TRUSTEE TO ACQUIRE BONDS.  Subject to the
limitations of any applicable law, the Trustee and its officers and directors
may acquire and hold, or become the pledgee of, Bonds and otherwise deal with
the Authority in the manner and to the same extent and with like effect as
though it were not Trustee hereunder.

     Section 11.5   MONEYS RECEIVED BY TRUSTEE TO BE HELD IN TRUST.  Subject to
the provisions of Section 13.3, all moneys received by the Trustee shall, until
used or applied as herein provided, be held in trust for the purposes for which
they were received, and shall be segregated from other funds to the extent
required by law or by this Indenture.  The Trustee shall be under no liability
for interest on any moneys received by it hereunder except such as it may agree
with the Authority to pay thereon.  All accounts held or maintained under this
Indenture shall be Eligible Accounts.

     Each Eligible Account shall be a separate and identifiable account from all
other funds held by the Trustee.  All Eligible Accounts must be established and
maintained in the name of the Trustee, bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the Holders.  The
Trustee shall possess all right, title and interest in all funds on deposit from
time in each account and in all proceeds thereof.  Each account herein created
shall be under the sole dominion and control of the Trustee for the benefit of
the Holders, and shall contain only funds held for their benefit.  The Trustee
shall have no right of set-off or banker's lien against, and no right to
otherwise deduct from any funds held in the account for any amount owed it by
the Authority, any Holder, or the Credit Enhancement Provider.

     Section 11.6   COMPENSATION AND INDEMNIFICATION OF TRUSTEE.  The Authority
covenants to pay to the Trustee from time to time, and the Trustee shall be
entitled to, reasonable compensation for all services rendered by it in the
execution of the trusts hereby created and in the exercise and performance of
any of the powers and duties hereunder of the Trustee, which compensation shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust, and the Authority will pay or reimburse the Trustee
upon its request for all expenses, disbursements and advances incurred or made
by the Trustee in accordance with any of the provisions of this Indenture
(including the reasonable compensation and the expenses and disbursements of its
counsel and of all persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its gross negligence or bad faith.  If
any property, other than cash, shall at any time be held by the Trustee subject
to this Indenture, or any Supplemental Indenture, as security for the Bonds, the
Trustee, if and to the extent authorized by a receivership, bankruptcy or other
court of competent jurisdiction or by the instrument subjecting such property to
the provisions of this Indenture as such security for 

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the Bonds, shall be entitled, but shall have no duty or obligation, to make 
advances for the purpose of preserving such property or of discharging tax 
liens or other prior liens or encumbrances thereon.  The Authority also 
covenants to indemnify the Trustee for, and to hold it harmless against, any 
loss, liability, expense or advance incurred or made without gross negligence 
or bad faith on the part of the Trustee, arising out of or in connection with 
the acceptance or administration of this trust, including the costs and 
expense of defending itself against any claim of liability in the premises.  
The obligations of the Authority under this Section to compensate the Trustee 
for services and to pay or reimburse the Trustee for expenses, disbursements, 
liabilities and advances shall constitute additional indebtedness hereunder 
and shall survive the discharge of this Indenture or the resignation or 
removal of the Trustee.  Such additional indebtedness shall have priority over 
the Bonds in respect of all property and funds held or collected by the 
Trustee as such, except funds held in trust by the Trustee for the benefit of 
the Holders of particular Bonds.  The Trustee shall comply with the provisions 
of TIA Section 313(b)(2) to the extent applicable.  The Trustee shall not be 
entitled to any payment of fees, expenses, charges or compensation from 
payments under the Credit Enhancement.  All costs, expenses, fees and other 
charges of the Trustee and compensation due to the Trustee not paid when due 
shall bear interest at the base rate most recently quoted by the Trustee plus 
two percent (2%) per annum or, if less, the maximum rate allowed by any 
applicable usury law.

     Section 11.7   QUALIFICATIONS OF TRUSTEE.  There shall at all times be a
trustee hereunder which shall,be a corporation or national banking association
organized and doing business under the laws of the United States of America or
the State of Colorado, authorized under such laws to exercise corporate trust
powers, having a combined capital, exclusive of borrowed capital, and a surplus
of at least seventy-five million dollars ($75,000,000), and subject to
supervision or examination by federal or state authority.  If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of any supervising or examining authority above referred to, then
for the purposes of this Section the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published.  In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section, the Trustee shall resign immediately in the manner and with the effect
specified in Section 11.8.  This Indenture shall always have a Trustee who
satisfies the requirements of TIA Section 310(a)(1), (2) and (5).  The Trustee
is subject to TIA Section 310(b).

     The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b).  A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.

     Section 11.8   RESIGNATION AND REMOVAL OF TRUSTEE AND APPOINTMENT OF
SUCCESSOR TRUSTEE.

          (a)  The Trustee may at any time resign by giving written notice to
the Authority, the Credit Enhancement Provider and the Bondholders of such
resignation by mail.  Upon receiving such notice of resignation, the Authority
shall promptly appoint a successor 

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trustee by an instrument in writing executed by order of the governing board 
of the Authority.  If no successor trustee shall have been so appointed and 
have accepted appointment within thirty days after the publication of such 
notice of resignation, the resigning trustee may petition any court of 
competent jurisdiction for the appointment of a successor trustee, or any 
Bondholder who has been a bona fide Holder of a Bond for at least six months 
(or so long as such Bonds have been outstanding if less than six months) may, 
on behalf of himself and others similarly situated, petition any such court 
for the appointment of a successor trustee.  Such court may thereupon, after 
such notice, if any, as it may deem proper and prescribe, appoint a successor 
trustee.

          (b)  In case at any time any of the following shall occur:

               (i)  the Trustee shall cease to be eligible in accordance with
     the provisions of Section 11.7 and shall fail to resign after Written
     Request therefor by the Authority or by any Bondholder who has been a bona
     fide Holder of a Bond for at least six months (or so long as such Bonds
     have been outstanding if less than six months), or

               (ii) the Trustee shall become incapable of acting, or shall be
     adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
     property shall be appointed, or any public officer shall take charge or
     control of the Trustee or of its property or affairs for the purpose of
     rehabilitation, conservation or liquidation, 

then, in any such case, the Authority may remove the Trustee and appoint a
successor trustee by an instrument in writing executed by order of the District,
or any such Bondholder may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Trustee and appointment of a successor trustee.  Such court may thereupon, after
such notice, if any, as it may deem proper and prescribe, remove the Trustee and
appoint a successor trustee.  

          (c)  The Credit Enhancement Provider or the Holders of sixty percent
(60%) or more in aggregate principal amount of the Bonds at the time outstanding
may at any time remove the Trustee and appoint a successor trustee by an
instrument or concurrent instruments in writing signed by the Credit Enhancement
Provider or such Bondholders.

          (d)  Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall only
become effective upon acceptance of appointment by the successor trustee as
provided in Section 11.9.

     Section 11.9   ACCEPTANCE OF TRUST BY SUCCESSOR TRUSTEE.  Any successor
trustee appointed as provided in Section 11.8 shall execute, acknowledge and
deliver to the Authority and to its predecessor trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, trusts, duties and obligations of its predecessor in the trusts
hereunder, with like 

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<PAGE>

effect as if originally named as Trustee herein; but, nevertheless, on the 
Written Request of the Authority or the request of the successor trustee, the 
trustee ceasing to act shall execute and deliver an instrument transferring to 
such successor trustee, upon the trusts herein expressed, all the rights, 
powers and trusts of the trustee so ceasing to act. Upon request of any such 
successor trustee, the Authority shall execute any and all instruments in 
writing necessary or desirable for more fully and certainly vesting in and 
confirming to such successor trustee all such rights, powers, and duties.  Any 
trustee ceasing to act shall, nevertheless, retain a lien upon all property or 
funds held or collected by such trustee to secure the amounts due it as 
compensation, reimbursement, expense and indemnity afforded to it by Section 
11.6.  Each trustee being replaced shall transfer all monies and securities it 
holds to the successor trustee.

     No successor trustee shall accept appointment as provided in this Section
unless at the time of such acceptance such successor trustee shall be eligible
under the provision of Section 11.7.

     Upon acceptance of appointment by a successor trustee as provided in this
Section, the Authority shall publish notice of the succession of such trustee to
the trusts hereunder at least once in a Financial Newspaper or Journal.  If the
Authority fails to publish such notice within ten days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be published at the expense of the Authority.

     Section 11.10  MERGER OR CONSOLIDATION OF TRUSTEE.  Any corporation into
which the Trustee may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Trustee
shall be a party, or any corporation succeeding to the business of the Trustee,
shall be the successor of the Trustee hereunder without the execution or filing
of any paper or any further act on the part of any of the parties hereto,
provided that such successor trustee shall be eligible under the provisions of
Section 11.7.

     Section 11.11  RECORDS OF TRUSTEE.  The Trustee shall retain all financial
statements furnished to it by the Authority pursuant to Section 9.2, so long as
any of the Bonds shall be outstanding.

     Section 11.12  REPORTS BY TRUSTEE TO HOLDERS.  Within 60 days after each
February 15 beginning with the February 15 following the date of this Indenture,
and for so long as Bonds remain outstanding, the Trustee shall mail to the
Holders of the Bonds a brief report dated as of such reporting date that
complies with TIA Section 313(a) (but if no event described in TIA Section
313(a) has occurred within the twelve months preceding the reporting date, no
report need be transmitted).  The Trustee also shall comply with TIA Section
313(b)(2).  The Trustee shall also transmit by mail all reports as required by
TIA Section 313(c).

     A copy of each report at the time of its mailing to the Holders of Bonds
shall be mailed to the Authority and filed with the SEC and each stock exchange
on which the Bonds are listed in accordance with TIA Section 313(d).  The
Authority shall promptly notify the Trustee when the Bonds are listed on any
stock exchange.

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     Section 11.13  TRUSTEE DISCLAIMER.

          (a)  The acceptance by the Trustee of its duties as Trustee under this
Indenture is subject to the following terms and conditions, which all parties to
this Indenture hereby agrees shall govern and control with respect to the
rights, duties and liabilities of Trustee.

          (b)  The Trustee is not a party to and is not bound by any agreement
between any one or more of the parties hereto, except this Indenture, unless
otherwise expressly stated herein.

         (c)   The duties of the Trustee hereunder are only such as are herein
specifically provided, being purely ministerial in nature, and it shall have no
responsibility in respect of any of the Trust Estate other than faithfully to
follow the instructions herein contained.

          (d)  The Trustee acts hereunder as a depository.  All deposits are
warranted by the depositor to be valid deposits.  The Trustee is not responsible
for or liable in any manner whatsoever for the sufficiency, correctness,
genuineness and validity of any security, document, or other item, which is a
part of the Trust Estate or for any claim or action by any person, firm,
corporation or trustee concerning the right or power of any depositor to make
any transfer or the validity of the transfer of any part of the Trust Estate to
the Trustee.

          (e)  The Trustee shall be protected in acting upon any written notice,
request, waiver, consent, receipt or other paper or document which the Trustee
in good faith believes to be genuine.

          (f)  The Trustee shall not be liable for any error of judgment, or for
any act done or step taken or omitted by it in good faith, or for any mistake of
fact or law, or for anything which it may do or refrain from doing in connection
herewith, except its own gross negligence, bad faith or willful misconduct.

          (g)  The Trustee is authorized to and may consult with, and obtain
advice from, legal counsel in the event any dispute, conflict or question arises
as to the construction of any of the provisions hereof or its duties hereunder. 
The Trustee shall be reimbursed from the Trust Estate held by it for all costs
so incurred and shall incur no liability and shall be fully protected for acting
in good faith in accordance with the opinion and instructions of such counsel.

          (h)  The Trustee may, but shall not be required to, defend itself in
any legal proceedings which may be instituted against it or it may, but shall
not be required to, institute legal proceedings in respect of the Trust Estate,
or any part thereof.  The Trustee shall be indemnified and held harmless against
the cost and expense of any such defenses or action, including, without
limitation, legal fees incurred in any said action.

          (i)  The Trustee shall make payment to or for, or deliver documents
to, any party only if in its judgment such payment or delivery may be made under
the terms of this 

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<PAGE>

Indenture without its incurring any liability.  If conflicting demands not 
expressly provided for in this Indenture are made or notices served upon the 
Trustee with respect to its actions or omission under this Indenture, the 
parties hereto agree that the Trustee shall have the absolute right to elect 
to do either or both of the following:  (i) withhold and stop all future 
actions or omissions on its part under this Agreement, or (ii) file a suit in 
interpleader or for instructions or for a declaratory judgment for other 
relief and obtain an order from the proper court requiring the parties to 
litigate in such court their conflicting claims and demands.  In the event any 
such action is taken, the Trustee shall be fully released and discharged from 
all obligations to perform any duties or obligations imposed upon it by this 
Indenture unless and until otherwise ordered by the court; and the parties 
jointly and severally agree that the Trust Estate may be used to pay all 
costs, expenses, and reasonable attorney's fees expended or incurred by the 
Trustee in connection therewith and promise to pay all such amounts and agree 
that the costs in fact incurred shall be fixed by the Trustee and a judgment 
thereof shall be rendered by the court in such suit.

         (j)   In the event that a sale of any or all of the Trust Estate is
necessary or required under the terms of this Indenture, the Trustee agrees to
use its best efforts to effect such a sale at a reasonable price.  The parties
hereto agree that the acceptance by the Trustee of an offer or offers to
purchase any or all of the Trust Estate shall be binding and conclusive upon the
parties hereto.  The Trustee shall not be liable for the exercise of its
judgment in accepting or rejecting any sale or sales consideration.  The Trustee
shall not be liable for any failure to receive any offer or offers from the
public, or from the parties hereto, to purchase all or such part of the Trust
Estate as may be offered for sale by the Trustee provided that the Trustee shall
have made reasonable efforts to obtain such an offer or offers.  All expenses
and obligations incurred in connection with any sale of any or all of the Trust
Estate shall be charged against the proceeds and the surplus, if any, shall be
delivered to the distributees under this Indenture.

          (k)  The parties hereto grant to the Trustee a security interest in
and to all of the Trust Estate and all proceeds, including the right of setoff,
to secure it against any and all costs, expenses and fees arising hereunder. 
All fees of the Trustee will be borne by the Authority.

          (l)  All notices, requests, demands or other communications authorized
or required to be given by any party pursuant to this Indenture shall be given
in writing to all parties, and shall be deemed to have been sufficiently given
on the date mailed by certified mail, return receipt requested, or delivered:

               If to the Trustee at:

               SouthTrust Bank of Alabama, National Association
               Corporate Trust Department
               P.O. Box 2554
               Birmingham, Alabama  35290

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<PAGE>

               If to the Authority at:

               Stanford Place III, Suite 902
               4582 South Ulster Street Parkway
               Denver, Colorado 80237
               Attn:  C. Roger Addlesperger

          (m)  A copy of any notice to Bondholders (other than notice with
respect to mandatory sinking fund redemption) shall also be given, in like
manner, to Standard & Poor's Ratings Services, so long as it is providing a
rating on the Bonds, as follows:

               Standard and Poor's Ratings Services
               25 Broadway
               New York, New York 10004
               Attn:  Public Finance Group

     Section 11.14  APPOINTMENT OF CO-TRUSTEE.  It is the purpose of this
Indenture that there shall be no violation of any law of any jurisdiction
(including particularly the law of the State of Colorado) denying or restricting
the right of banking corporations or associations to transact business as
trustee in such jurisdiction.  It is recognized that in case of exercise of
rights under this Indenture or in case of litigation under this Indenture and in
particular in case of the enforcement thereof upon an Event of Default, or in
the case the Trustee deems that by reason of any present or future law of any
jurisdiction it may not exercise any of the powers, rights or remedies herein
granted to the Trustee or hold title to the Trust Estate as herein granted, or
take any action which may be desirable or necessary in connection therewith, it
may be necessary that the Trustee appoint an additional individual or
institution as a separate or co-trustee.  The following provisions of this
Section are adapted to those ends.

     In the event that the Trustee appoints an additional individual or
institution as a separate or co-trustee, each and every remedy, power, right,
claim, demand, cause of action, immunity, estate, title, interest and lien
expressed or intended by this Indenture to be exercised by or vested in or
conveyed to the Trustee with respect thereto shall be exercisable by and vest in
such separate or co-trustee but only to the extent necessary to enable such
separate or co-trustee to exercise such powers, rights and remedies and every
covenant and obligation necessary to the exercise thereof by such separate or
co-trustee shall run to and be enforceable by either of them; provided, however,
that no co-trustee shall be liable by reason of any act or omission of any other
such co-trustee.

     Should any instrument in writing from the Authority be required by the
separate or co-trustee so appointed by the Trustee for more fully and certainly
vesting in and confirming to him or it such properties, rights, powers, trusts,
duties and obligations, any and all such instruments in writing shall, on
request, be executed, acknowledged and delivered by the Authority.  In case any
separate or co-trustee or a successor to either shall die, become incapable of
acting, resign or be removed, all the estates, properties, rights, powers,
trusts, duties and obligations of such 

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<PAGE>

separate or co-trustee, so far as permitted by law, shall vest in and be 
exercised by the Trustee until the appointment of a new co-trustee or 
successor to such separate or co-trustee.

     Section 11.15  ELIGIBLE INSTITUTIONS.  The Trustee hereby represents that
it is an Eligible Institution.  Every successor trustee or co-trustee which
shall hold any account under this Indenture shall be an Eligible Institution.

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                                   ARTICLE XII

                            MODIFICATION OF INDENTURE

     Section 12.1   MODIFICATION WITHOUT CONSENT OF BONDHOLDERS.  The Authority,
when authorized by resolution of the District, and the Trustee, from time to
time and at any time, but with the consent of the Credit Enhancement Provider
(so long as the Credit Enhancement Provider is not in default under the Credit
Enhancement), subject to the conditions and restrictions in this Indenture
contained, may enter into an indenture or indentures supplemental hereto, which
indenture or indentures thereafter shall form a part hereof, for any one or more
or all of the following purposes:

          (a)  to add to the covenants and agreements of the Authority in this
Indenture contained, other covenants and agreements thereafter to be observed,
or to surrender any right or power herein reserved to or conferred upon the
Authority, provided, that no such covenant, agreement or surrender shall
adversely affect the interests of the Holders of the Bonds;

          (b)  to evidence the succession of another corporation to the
Authority, or successive successions, and the assumption by a successor
corporation of the covenants and obligations of the Authority in the Bonds and
in this Indenture contained;

          (c)  to make such provisions for the purpose of curing any ambiguity,
or of curing, correcting or supplementing any defective provision contained in
this Indenture, or in regard to other matters or questions arising under this
Indenture, as the Authority may deem necessary or desirable and not inconsistent
with this Indenture and which shall not materially adversely affect the
interests of the Holders of the Bonds; or

          (d)  to modify, amend or supplement this Indenture or any indenture
supplemental hereto in such manner as to permit the qualification hereof and
thereof under the TIA or any similar federal statute hereafter in effect, and,
if they so determine, to add to this Indenture or any indenture supplemental
hereto such other terms, conditions and provisions as may be permitted by the
TIA or similar federal statute, and which shall not materially adversely affect
the interests of the Holders of the Bonds.

     Any Supplemental Indenture authorized by the provisions of this Section may
be executed by the Authority and the Trustee without the consent of the Holders
of any of the Bonds at the time outstanding, notwithstanding any of the
provisions of Section 12.2, but the Trustee shall not be obligated to enter into
any such Supplemental Indenture which affects the Trustee's own rights, duties
or immunities under this Indenture or otherwise.

     Section 12.2   MODIFICATION WITH CONSENT OF BONDHOLDERS.  With the consent
(evidenced as provided in Section 14.6) of the Credit Enhancement Provider (so
long as the Credit Enhancement Provider is not in default under the Credit
Enhancement) and the Holders of not less than sixty per cent (60%) in aggregate
principal amount of the Bonds at the time 



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Outstanding, the Authority, when authorized by a resolution of the District, 
and the Trustee may from time to time and at any time enter into an indenture 
or indentures supplemental hereto for the purpose of adding any provisions to 
or changing in any manner or eliminating any of the provisions of this 
Indenture or of any Supplemental Indenture; provided, however, that no such 
Supplemental Indenture shall (1) extend the fixed maturities of the Bonds or 
reduce the rate of interest thereon or extend the time of payment of 
interest, or reduce the amount of the principal thereof, or reduce any 
premium payable on the redemption thereof, without the consent of the Holder 
of each Bond so affected, or (2) reduce the aforesaid percentage of Holders 
of Bonds whose consent is required for the execution of any such Supplemental 
Indenture, or permit the creation of any lien on the Trust Estate prior to or 
on a parity with the lien of this Indenture (except as expressly permitted by 
Section 3.6) or deprive the Holders of the Bonds of the lien created by this 
Indenture upon the Trust Estate, without the consent of the Holders of all of 
the Bonds then Outstanding and the Credit Enhancement Provider.  Upon receipt 
by the Trustee of a Certified Resolution authorizing the execution of any 
such Supplemental Indenture, and upon the filing with the Trustee of evidence 
of the consent of the Credit Enhancement Provider and Bondholders, as 
aforesaid, the Trustee shall join with the Authority in the execution of such 
Supplemental Indenture unless such Supplemental Indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which 
case the Trustee may in its discretion, but shall not be obligated to, enter 
into such Supplemental Indenture.

     It shall not be necessary for the consent of the Bondholders under this
Section to approve the particular form of any proposed Supplemental Indenture,
but it shall be sufficient if such consent shall approve the substance thereof.

     Promptly after the execution by the Authority and the Trustee of any
Supplemental Indenture pursuant to the provisions of this Section, the Authority
shall publish a notice, setting forth in general terms the substance of such
Supplemental Indenture, at least once in a Financial Newspaper or Journal.  Any
failure of the Authority to give such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such Supplemental
Indenture.

     Section 12.3   EFFECT OF SUPPLEMENTAL INDENTURE.  Upon the execution of any
Supplemental Indenture pursuant to the provisions of this Article this Indenture
shall be and be deemed to be modified and amended in accordance therewith and
respective rights, duties and obligations under this Indenture of the Authority,
the Trustee and all Holders of outstanding Bonds shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such modification
and amendment, and all the terms and conditions of any such Supplemental
Indenture shall be and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes.  Every amendment or supplement to this
Indenture or the Bonds shall be set forth in an amended or supplemented
Indenture that complies with the TIA as then in effect.

     Section 12.4   OPINION OF COUNSEL AS TO SUPPLEMENTAL INDENTURE.  Subject to
the provision of Section 11.1, the Trustee may receive an Opinion of Counsel as
conclusive evidence that any Supplemental Indenture executed pursuant to the
provision of this Article complies with the requirements of this Article.



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     Section 12.5   NOTATION OF MODIFICATION ON BONDS: PREPARATION OF NEW BONDS.
Bonds authenticated and delivered after the execution of any Supplemental
Indenture pursuant to the provisions of this Article may bear a notation, in
form approved by the Trustee, as to any matter provided for in such Supplemental
Indenture, and if such Supplemental Indenture shall so provide, new Bonds, so
modified as to conform, in the opinion of the Trustee and the District, to any
modification of this Indenture contained in any such Supplemental Indenture, may
be prepared by the Authority, authenticated by the Trustee and delivered without
cost to the Holders of the Bonds then Outstanding, upon surrender for
cancellation of such Bonds, in equal aggregate principal amounts.

     Section 12.6   AMENDMENTS TO OPERATING AGREEMENT AND INTERGOVERNMENTAL
AGREEMENT.  The Operating Agreement and the Intergovernmental Agreement may be
amended only with the consent of the Trustee and the Credit Enhancement Provider
(so long as the Credit Enhancement Provider is not in default under the Credit
Enhancement).  The Trustee shall consent to such amendments on the same basis as
it consents to amendments to this Indenture.









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                                  ARTICLE XIII

                                   DEFEASANCE

     Section 13.1   DISCHARGE OF THIS INDENTURE.  When all Bonds secured hereby
shall be paid in accordance with their terms (or payment of such Bonds has been
provided for in the manner set forth in the following paragraph) together with
all other sums payable hereunder, including, inter alia, amounts due and payable
to the Trustee, then this Indenture and the Trust Estate and all rights granted
hereunder (except for any provisions which may continue to apply as described in
the next paragraph) shall thereupon cease, terminate and become void and be
discharged and satisfied.  In such event the Trustee shall assign and transfer
to the Authority (or to the Credit Enhancement Provider if amounts are then due
under the Reimbursement Agreement or the Deed of Trust) all property then held
by the Trustee hereunder and shall execute such documents as may be reasonably
required by the Authority (or by the Credit Enhancement Provider if amounts are
then due under the Reimbursement Agreement or the Deed of Trust) or shall turn
over to the Authority (or to the Credit Enhancement Provider if amounts are then
due under the Reimbursement Agreement or the Deed of Trust) any surplus in any
fund, except the Rebate Fund.

     Payment of any outstanding Bond prior to the maturity or redemption date
thereof shall be deemed to have been provided for within the meaning and with
the effect expressed in this Section if (i) in case said Bond is to be redeemed
on any date prior to its maturity, the Authority shall have given to the Trustee
in form satisfactory to it irrevocable instructions to give on a date in
accordance with the provisions of notice of redemption of such Bond on said
redemption date, (ii) there shall have been deposited with the Trustee either
Available Moneys in an amount which shall be sufficient or noncallable Federal
Securities the principal of and the interest on which when due, and without any
reinvestment thereof, will provide moneys which, together with the Available
Moneys, if any, deposited with or held by the Trustee at the same time and
available therefor, shall be sufficient, as verified by an Accountant's report,
to pay when due the principal of, premium, if any, and interest due and to
become due on said Bond on and prior to the redemption date or maturity date
thereof, as the case may be, (iii) the Trustee shall have a valid first priority
security interest in such Federal Securities and all proceeds thereof and
distributions thereon and such Federal Securities shall be in the name of the
Trustee for the benefit of the Holders, (iv) the Trustee shall have received an
opinion of counsel to the effect that (1) the Federal Securities have been duly
and validly assigned and delivered to the Trustee for the benefit of the
Holders, and (2) the security interest of the Trustee for the benefit of the
Holders is a first priority security interest perfected to the extent perfection
is permissible under the laws of the state where the collateral is located, (v)
the Trustee will receive an opinion of bond counsel to the effect that
defeasance in accordance with the provisions of this Article XIII shall not
adversely affect the exclusion from gross income of interest on the Bonds for
federal income tax purposes, (vi) the Trustee shall have received written
confirmation from the Rating Agency that the defeasance will not result in a
down grade, withdrawal or qualification of the ratings then assigned to the
Bonds, and (vii) in the event said Bond is not by its terms subject to
redemption within the next 35 days, the Authority shall have given the Trustee
in form 



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<PAGE>

satisfactory to it irrevocable instructions to give, as soon as practicable 
in the same manner as the notice of redemption is given pursuant hereto, a 
notice to the Registered Owner of such Bond that the deposit required by (ii) 
above has been made with the Trustee and that payment of said Bond has been 
provided for in accordance with this Section and stating such maturity or 
redemption date upon which moneys are to be available for the payment of the 
principal of and interest on said Bond.  Neither such securities nor moneys 
deposited with the Trustee pursuant to this Section or principal or interest 
payments on any such securities shall be withdrawn or used for any purpose 
other than the payment of the principal of, premium, if any, and interest on 
the Bonds, but shall be held in trust for such payment; provided any cash 
received from such principal or interest payments on such securities 
deposited with the Trustee, if not then needed for such purpose, shall, to 
the extent practicable, be reinvested in noncallable Federal Securities 
maturing at times and in amounts sufficient to pay when due the principal of 
and interest to become due on such Bonds on or prior to such redemption date 
or maturity date thereof, as the case may be. At such time as payment of a 
Bond has been provided for as aforesaid, such Bond shall no longer be secured 
by or entitled to the benefits of this Indenture, except for the purpose of 
any payment from such moneys or securities deposited with the Trustee and 
except for the provisions of this Indenture set forth in the second paragraph 
of this Section 13.1.

     The release of the obligations of the Authority under this Section shall be
without prejudice to the right of the Trustee to be paid reasonable compensation
for all services rendered by it hereunder and all its reasonable expenses,
charges and other disbursements incurred on or about the administration of the
trust hereby created and the performance of its powers and duties hereunder.

     Section 13.2   DISCHARGE OF LIABILITY ON BONDS.  Upon the deposit with the
Trustee, in trust, at or before maturity, of money or Federal Securities in the
necessary amount to pay or redeem outstanding Bonds (whether upon or prior to
their maturity or the redemption date of such Bonds), provided that if such
Bonds are to be redeemed prior to the maturity thereof, notice of such
redemption shall have been given as in Article VIII provided or provision
satisfactory to the Trustee shall have been made for the giving of such notice,
all liability of the Authority in respect of such Bonds shall cease, determine
and be completely discharged and the Holders thereof shall thereafter be
entitled only to payment out of the money or Federal Securities deposited with
the Trustee as aforesaid for their payment, subject, however, to the provisions
of Section 13.3.

     Section 13.3   PAYMENT OF BONDS AFTER DISCHARGE OF INDENTURE. 
Notwithstanding any provisions of this Indenture, any moneys deposited with the
Trustee in trust for the payment of the principal of, or interest or premium on,
any Bonds and remaining unclaimed for two years after the principal of or
interest on all the outstanding Bonds has become due and payable (whether at
maturity or upon call for redemption or by declaration as provided in this
Indenture) shall then be repaid to the Authority, and the Holders of such Bonds
shall thereafter be entitled to look only to the Authority for payment thereof,
and all liability of the Trustee with respect to such moneys shall thereupon
cease; provided, however, that before the repayment of such moneys to the
Authority as aforesaid, the Trustee or Paying Agent, as the case may be, shall



                                     91

<PAGE>

(at the cost of the Authority) first publish at least once in a Financial
Newspaper or Journal, a notice, in such form as may be deemed appropriate by the
Trustee in respect of the Bonds so payable and not presented and in respect of
the provisions relating to the repayment to the Authority of the moneys held for
the payment thereof.  In the event of the repayment of any such moneys to the
Authority as aforesaid, the Holders of the Bonds in respect of which such moneys
were deposited shall thereafter be deemed to be unsecured creditors of the
Authority for amounts equivalent to the respective amounts deposited for the
payment of such Bonds and so repaid to the Authority (without interest thereon).

     Section 13.4   RIGHTS OF THE DISTRICT.  

          (a)  The Authority covenants and agrees that all activities of the
Authority shall be undertaken for the benefit of the District.  Upon termination
of this Indenture and discharge of the obligations of the Authority, the
District shall be entitled to acquire title to the Property without cost.

          (b)  The District is hereby granted the right to obtain, at any time,
unencumbered fee title and exclusive possession of the Property, and any
additions to the Property by (1) placing into escrow an amount that will be
sufficient to defease such obligations in accordance with the requirements of
Section 13.1 hereof, and the other requirements of Section 13.1 have been
satisfied, (2) paying reasonable costs incident to the defeasance, (3) paying
any amount then due by the Authority to the Credit Enhancement Provider pursuant
to the Reimbursement Agreement and the Deed of Trust, and (4) paying or
defeasing any obligation issued or incurred pursuant to Section 3.6 hereof.  The
District, at any time before its defeases such obligations, shall not agree or
otherwise be obligated to convey any interest in the Project to any person
(including the United States of America or its agencies or instrumentalities)
for any period extending beyond or beginning after the District defeases such
obligations.  In addition, the District shall not agree or otherwise be
obligated to convey a fee interest in the Project to any person who was a user
thereof (or a related person) before the defeasance within 90 days after the
District defeases such obligations.

          (c)  The Authority shall immediately cancel all encumbrances on the
Project, including all leases and management agreements.  Any lease, management
contract, or similar encumbrance on the Project will be considered immediately
cancelled if the lessee, management company, or other user vacates the Project
within a reasonable time, generally not to exceed 90 days, after the date the
District exercises its rights under paragraph (b) above.

          (d)  In addition to the foregoing, if the Authority defaults in its
payments under obligations described in Section 13.4(b) above, the District is
hereby granted an exclusive option to purchase the Project for the amount of the
outstanding indebtedness and accrued interest to the date of default.  The
Trustee shall provide notice to the District of any Event of Default within 30
days of the occurrence thereof.  The District shall have (a) 90 days from the
date it is notified by the Trustee of the default in which to exercise the
option (which shall be exercised 



                                     92

<PAGE>

by giving written notice of such exercise to the Trustee and the Authority), 
and (b) 90 days from the date it exercises the option to purchase the Property.

          (e)  Unencumbered fee title to the Project and any additions thereto
and exclusive possession and use thereof will vest in the District without
demand or further action on its part when all obligations described in Section
13.4(b) above (including the Bonds) are discharged.  For purposes of this
paragraph (e), such obligations will be discharged when (i) cash is available at
the place of payment on the date that the obligations are due (whether at
maturity or upon call for redemption) and (ii) interest ceases to accrue on the
obligations.  All leases, management contracts and similar encumbrances on the
Project shall terminate upon discharge of  said obligations.  Encumbrances that
do not significantly interfere with the enjoyment of such property, such as most
easements granted to utility companies, are not considered encumbrances for this
Section 13.4.









                                     93

<PAGE>

                                   ARTICLE XIV

                                  MISCELLANEOUS

     Section 14.1   SUCCESSORS OF AUTHORITY.  All the covenants, stipulations,
promises and agreements in this Indenture contained, by or on behalf of the
Authority, shall bind and inure to the benefit of its successors and assigns,
whether so expressed or not.

     Section 14.2   LIMITATION OF RIGHTS TO PARTIES AND BONDHOLDERS.  Nothing in
this Indenture or in the Bonds expressed or implied is intended or shall be
construed to give to any person other than the Authority, the Trustee, the
Credit Enhancement Provider and the Holders of the Bonds issued hereunder, any
legal or equitable right, remedy or claim under or in respect of this Indenture
or any covenant, condition or provision therein or herein contained; and all
such covenants, conditions and provisions are and shall be held to be for the
sole and exclusive benefit of the Authority, the Trustee, the Credit Enhancement
Provider and the Holders of the Bonds issued hereunder.

     Section 14.3   WAIVER OF NOTICE.  Whenever in this Indenture the giving of
notice by mail or otherwise is required, the giving of such notice may be waived
in writing by the person entitled to receive such notice and in any such case
the giving or receipt of such notice shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.

     Section 14.4   DESTRUCTION OF BONDS.  Whenever in this Indenture provision
is made for the cancellation by the Trustee and the delivery to the Authority of
any Bonds, the Trustee may, in lieu of such cancellation and delivery, destroy
such Bonds and deliver a certificate of the destruction to the Authority.

     Section 14.5   SEVERABILITY OF INVALID PROVISIONS.  In case any one or more
of the provisions contained in this Indenture or in the Bonds shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Indenture, but this Indenture shall be construed as if such invalid or
illegal or unenforceable provision had never been contained herein.

     Section 14.6   EVIDENCE OF RIGHTS OF BONDHOLDERS.  (a)  Any request,
consent or other instrument required by this Indenture to be signed and executed
by Bondholders may be in any number of concurrent writings of substantially
similar tenor and may be signed or executed by such Bondholders in person or by
agent or agents duly appointed in writing.  Proof of the execution of any such
request, consent or other instrument or of a writing appointing any such agent,
shall be sufficient for any purpose of this Indenture and shall be conclusive in
favor of the Trustee and of the Authority if made in the manner provided in this
Section.

          (b)  The fact and date of the execution by any person of any such
request, consent or other instrument or writing may be proved by the affidavit
of a witness of such execution or by the certificate of a notary public or other
officer of any jurisdiction, authorized 



                                     94

<PAGE>

by the laws thereof to take acknowledgments of deeds, certifying that the 
person signing such request, consent or other instrument acknowledged to him 
the execution thereof.

     The ownership of Bonds shall be proved by the register of such Bonds.  Any
request, consent or vote of the Holder of any Bond shall bind every future
Holder of the same Bond and the Holder of every Bond issued in exchange therefor
or in lieu thereof, in respect of anything done or suffered to be done by the
Trustee or the Authority in pursuance of such request, consent or vote.

          (c)  In determining whether the Holders of the requisite aggregate
principal amount of Bonds have concurred in any demand, request, direction,
consent or waiver under this Indenture, Bonds which are owned by the Authority,
or by any other obligor on the Bonds, or by any person directly or indirectly
controlling or controlled by, or under direct or indirect common control with,
the Authority or any other obligor on the Bonds, shall be disregarded and deemed
not to be outstanding for the purpose of any such determination, provided, that,
for the purpose of determining whether the Trustee shall be protected in relying
on any such demand, request, direction, consent or waiver, only Bonds which the
Trustee knows to be so owned shall be disregarded.  Bonds so owned which have
been pledged in good faith may be regarded as outstanding for the purposes of
this subsection (c) if the pledgee shall establish to the satisfaction of the
Trustee the pledgee's right to vote such Bonds and that the pledgee is not a
person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Authority or any other obligor on the Bonds. 
In case of a dispute as to such right, any decision by the Trustee taken upon
the advice of counsel shall be full protection to the Trustee.

          (d)  In lieu of obtaining any demand, request, direction, consent or
waiver in writing, the Trustee may call and hold a meeting of Bondholders upon
such notice and in accordance with such rules and regulations as the Trustee
considers fair and reasonable for the purpose of obtaining any such action.

     Section 14.7   CONTINUING DISCLOSURE.  The Authority shall undertake,
pursuant to the Continuing Disclosure Agreement, to provide certain financial
information and operating data and notices of material events as described in
the Continuing Disclosure Agreement.  Any failure by the Authority to comply
with the provisions of the Continuing Disclosing Agreement shall not be deemed
an Event of Default hereunder, and the sole remedy under the Continuing
Disclosure Agreement in the event of any such failure by the Authority to comply
with the provisions of the Continuing Disclosure Agreement shall be an action to
compel performance.

     Section 14.8   ARTICLE AND SECTION HEADINGS.  The headings or titles of the
several Articles and Sections hereof, and any table of contents appended to
copies hereof, shall be solely for convenience of reference and shall not affect
the meaning, construction or effect of this Indenture.

     All references herein to "Articles", "Section" and other subdivisions are
to the corresponding Articles, Sections or subdivisions of this Indenture; and
the words "herein", 



                                     95

<PAGE>

"hereof", "hereunder" and other words of similar import refer to this 
Indenture as a whole and not to any particular Article, Section of 
subdivision hereof.

     Section 14.9   EXECUTION IN SEVERAL COUNTERPARTS.  This Indenture may be
executed in any number of counterparts and each of such counterparts shall for
all purposes be deemed to be an original; and all such counterparts, or as many
of them as the Authority and the Trustee shall preserve undestroyed, shall
together constitute but one and the same instrument.

     Section 14.10  TRUST INDENTURE ACT CONTROLS.  If any provision of this
Indenture limits, qualifies or conflicts with the duties imposed by TIA Section
318(c), the duties imposed by TIA Section 318(c) shall control.



                   [Balance of Page Intentionally Left Blank]












                                     96

<PAGE>

     IN WITNESS WHEREOF, the Castle Rock Ranch Public Improvements Authority has
caused this Indenture to be signed in its corporate name by its President and
attested by its Secretary and SouthTrust Bank of Alabama, National Association,
in token of its acceptance of the trusts created hereunder, has caused this
Indenture to be signed and attested in its corporate name by its authorized
officer, all as of the day and year first above written.

                                       CASTLE ROCK RANCH PUBLIC
                                       IMPROVEMENTS AUTHORITY
(SEAL)


Attest:                                By:  /s/ C. (Illegible)
                                           ------------------------------------
                                               President

(Illegible)
- --------------------------
Secretary




                                       SOUTHTRUST BANK OF ALABAMA, 
                                       NATIONAL ASSOCIATION

                                       By:  (Illegible)
                                           ----------------------------------
                                           Authorized Officer





                     [Signature page to Indenture of Trust]


<PAGE>

EXHIBIT A

CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF BONDS

Re:  Castle Rock Ranch Public Improvements Authority,
     Public Facilities Revenue Bonds

     This Certificate relates to $____________ principal amount of Bonds held in
* _________ book-entry or *_____________ definitive form by _______________ (the
"Transferor").

The Transferor*:

     / /  has requested the Trustee by written order to deliver in exchange for
its beneficial interest in the Book-Entry Bond held by the Depository a Bond or
Bonds in definitive, registered form of authorized denominations in an aggregate
principal amount equal to its beneficial interest in such Book-Entry Bond (or
the portion thereof indicated above); or

     / /  has requested the Trustee by written order to exchange or register the
transfer of a Bond or Bonds.

     In connection with such request and in respect of each such Bond, the
Transferor does hereby certify that Transferor is familiar with the Indenture
relating to the above captioned Bonds and as provided in such Indenture, the
transfer of this Bond does not require registration under the Securities Act (as
defined below) because:*

     / /  Such Bond is being acquired for the Transferor's own account, without
transfer (in satisfaction of Section _________ or Section ____________ of the
Indenture).

     / /  Such Bond is being transferred to a "qualified institutional buyer"
(as defined in Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act")) in reliance on Rule 144A (in satisfaction of Section
___________, Section ___________ or Section __________ of the Indenture) or
pursuant to an exemption from registration in accordance with Rule 904 under the
Securities Act (in satisfaction of Section __________ or Section _________ of
the Indenture.)






- ----------------------
*Check applicable box.



                                    A-1

<PAGE>

     / /  Such Bond is being transferred in accordance with Rule 144 under the
Securities Act, or pursuant to an effective registration statement under the
Securities Act (in satisfaction of Section ________ or Section ______ of the
Indenture).

     / /  Such Bond is being transferred in reliance on and in compliance with
an exemption from the registration requirements of the Securities Act, other
than Rule 144A, 144 or Rule 904 under the Securities Act.  An Opinion of Counsel
to the effect that such transfer does not require registration under the
Securities Act accompanies this Certificate (in satisfaction of Section ________
or Section ________ of the Indenture).

                                       [INSERT NAME OF TRANSFEROR]


                                       By: 
                                           ----------------------------------


Date: 
      --------------------












- ----------------------
*Check applicable box.



                                    A-2

<PAGE>

                                   SCHEDULE I

     Fees of the Trustee payable pursuant to this Schedule I shall be $5,000 per
year payable in equal monthly installments commencing March 1, 1998.















                                    A-3



<PAGE>



                   COLLATERALIZED CREDIT ENHANCEMENT AGREEMENT

     THIS COLLATERALIZED CREDIT ENHANCEMENT AGREEMENT (this "Agreement"), made
as of the 1st day of March 1996, is by BFC GUARANTY CORP.,  a Delaware
corporation (the "Credit Enhancement Provider"), to SOUTHTRUST BANK OF ALABAMA,
NATIONAL ASSOCIATION, a national banking association (referred to herein as
"Trustee").  

                              W I T N E S S E T H:

     WHEREAS, Castle Rock Ranch Public Improvements Authority, a Colorado
nonprofit corporation (the "Issuer"), proposes to issue, pursuant to an
Indenture of Trust, dated as of the date hereof ("Indenture"), between the
Issuer and the Trustee, $66,975,000 aggregate principal amount of the Issuer's
Public Facilities Revenue Bonds, Series 1996 (the "Bonds"); and

     WHEREAS, as additional evidence of the obligations of the Issuer under the
Indenture, the Issuer has executed a promissory note to the Trustee with respect
to the Bonds (the "Note"); and

     WHEREAS, the Issuer requested that the Credit Enhancement Provider execute
and deliver this Agreement with respect to the Indenture, the Bonds and the
Note; and

     WHEREAS, the Credit Enhancement Provider and the Issuer have executed and
delivered a Reimbursement Agreement, dated as of the date hereof (the
"Reimbursement Agreement"); and

     WHEREAS, BFC Finance Corp., a Delaware corporation ("BFC Finance"), shall
execute a Trust Indenture, dated as of the date hereof (the "REMIC Indenture"),
between BFC Finance and SouthTrust Bank of Alabama, National Association, as
Trustee (the "REMIC Trustee"); and

     WHEREAS, the Credit Enhancement Provider shall be the owner of all BFC
Finance Corp., REMIC Lease-Backed Bonds, Series 1996, Federal Lease-Backed Class
B (the "Collateral").

     NOW, THEREFORE, in order to induce the Issuer to issue the Bonds and to
execute the Note, the Indenture and  the Reimbursement Agreement, and in
consideration of the premises and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Credit Enhancement
Provider covenants and agrees as follows:



                                    -1-

<PAGE>

     1.   Subject to the limitations set forth in this Paragraph 1 and in
Paragraph 2 and Paragraph 24 below, the Credit Enhancement Provider irrevocably
and unconditionally agrees to provide to the Trustee amounts sufficient to
provide for the due, prompt and complete payment of the Bonds, including,
without limitation, principal of and interest payable under the Bonds (excluding
any Extra Payments, as defined in the Indenture).  The obligations of the Issuer
described in this Paragraph 1 being guaranteed by the Credit Enhancement
Provider are hereinafter referred to as the "Indebtedness".  The obligations of
the Credit Enhancement Provider to provide such payment hereinafter are referred
to as the "Obligations."  Contemporaneously herewith, the Credit Enhancement
Provider, the Trustee and the REMIC Trustee have executed and delivered a Bond
Pledge and Security Agreement, dated as of the date hereof (the "Pledge
Agreement"), containing the irrevocable pledge and delivery of the Collateral by
the Credit Enhancement Provider to the Trustee, which the Credit Enhancement
Provider warrants and represents creates a valid, perfected security interest in
the Collateral for the benefit of the Trustee.  All payments by the Credit
Enhancement Provider made in satisfaction of the Obligations shall be made from
the Credit Enhancement Provider's own funds and not from funds of the Issuer or
any other party.

     2.   The maximum liability of the Credit Enhancement Provider under this
Agreement is the sum of the following:  (i) principal on the Bonds in the amount
of Sixty-Six Million Nine Hundred Seventy-Five Thousand and No/100 Dollars
($66,975,000.00); and (ii) interest on the Bonds at the interest rate or rates
set forth in the Indenture (excluding any Extra Payments, as defined in the
Indenture).  No payment received from Issuer or from any person or entity other
than the Credit Enhancement Provider or amounts realized on the Collateral
provided for the payment of the Indebtedness shall reduce or impair the
liability of Credit Enhancement Provider hereunder.  It is the intention and
agreement of Credit Enhancement Provider that the liability of Credit
Enhancement Provider hereunder shall continue unless and until the Bonds have
been fully paid (or discharged as provided in the Indenture) and the
Indebtedness has been satisfied in full.

     3.   The Trustee may not do or perform any of the following, without the
consent of the Credit Enhancement Provider (provided that a violation by the
Trustee of the provisions of this Section 3 shall not affect the obligations of
the Credit Enhancement Provider to pay amounts due hereunder in accordance with
the terms hereof):

          (a)  renew, compromise, extend, accelerate or otherwise change the
time or place of payment of or to otherwise change the terms of the Indebtedness
or the terms of performance of any of the other obligations guaranteed hereby,
including, without limitation, to increase or decrease any rate of interest
contained in any of the documents executed in connection with the Bonds (the
"Bond Documents");

          (b)  modify or waive any of the terms of any agreement with the Issuer
pertaining to the Indebtedness and/or the other obligations secured hereby;

                                     -2- 
<PAGE>

          (c)  take and hold security for the payment of the Indebtedness and/or
performance of the other obligations guaranteed hereby and impair, exhaust,
exchange, enforce, waive or release any such security;

          (d)  direct the order or manner of sale of any such security as
Trustee in its discretion may determine; and/or

          (e)  grant any indulgence, forbearance or waiver with respect to the
Indebtedness or any of the other obligations secured hereby.

The liability of Credit Enhancement Provider hereunder shall not be affected,
impaired or reduced in any way by any action taken by Trustee under the
foregoing provisions or any other provision hereof, or by any delay, failure or
refusal of Trustee to exercise any right or remedy Trustee may have against
Issuer or any other person, firm or corporation, including any guarantors, if
any, liable for all or any part of the Indebtedness or any of the other
obligations guaranteed hereby.

     4.   Satisfaction by the Credit Enhancement Provider of any liability
hereunder shall not discharge the Credit Enhancement Provider except with
respect to the liability satisfied, it being the intent hereof that this
Agreement and the Obligations of Credit Enhancement Provider hereunder shall be
continuing and irrevocable until the Bonds have been paid in full. 
Notwithstanding the foregoing or anything else set forth herein, and in addition
thereto, if at any time all or any part of any payment received by the Trustee
from Credit Enhancement Provider under or with respect to this Agreement is or
must be rescinded or returned for any reason whatsoever (including, but not
limited to, determination that said payment was a voidable preference under
insolvency, bankruptcy or reorganization laws), then Credit Enhancement
Provider's Obligations hereunder shall, to the extent of the payment rescinded
or returned, be deemed to have continued in existence, notwithstanding such
previous receipt of payment by the Trustee, and Credit Enhancement Provider's
obligations hereunder shall continue to be effective or be reinstated, as the
case may be, as to such payment, all as though such previous payment to the
Trustee had never been made.

     5.   The Credit Enhancement Provider hereby waives notice of acceptance of
this Agreement by the Trustee, and this Agreement shall immediately be binding
upon the Credit Enhancement Provider.  The Credit Enhancement Provider hereby
represents, warrants, covenants and agrees that it has not acquired and shall
not acquire any interests in Douglas County Development Corporation.  The Credit
Enhancement Provider hereby agrees that it shall take no action which will
adversely affect the exclusion from income for federal income tax purposes of
income on the Bonds.  The Credit Enhancement Provider shall be entitled to rely
upon an opinion of Bond Counsel (as defined in the Indenture) in complying with
the provisions of the preceding sentence.

                                     -3- 
<PAGE>

     6.   The Credit Enhancement Provider hereby waives and agrees not to assert
or take advantage of:

          (a)  any right to require the Trustee to proceed against the Issuer or
any other person or to proceed against or exhaust any security held by the
Trustee at any time or to pursue any other remedy in Trustee's power before
proceeding against the Collateral;

          (b)  the defense of the statute of limitations in any action hereunder
or in any action for the collection of the Indebtedness or the performance of
any other obligations guaranteed hereby;

          (c)  any defense that may arise by reason of the incapacity, lack of
authority, death or disability of any other person or persons or the failure of
the Trustee to file or enforce a claim against the estate (in administration,
bankruptcy or any other proceeding) of any other person or persons;

          (d)  demand, presentment for payment, notice of non-payment, protest,
notice of protest and all other notices of any kind, including, without
limitation, notice of the existence, creation or incurring of any new or
additional indebtedness or obligation or of any action or non-action on the part
of the Issuer, the Trustee, any endorser or creditor of the Issuer or the Credit
Enhancement Provider or on the part of any other person whomsoever under this or
any other instrument in connection with any obligation or evidence of
indebtedness held by Trustee or in connection with the Indebtedness;

          (e)  any defense based upon an election of remedies by the Trustee,
the right of Credit Enhancement Provider to proceed against the Issuer for
reimbursement, or both;

          (f)  all duty or obligation on the Trustee's part to perfect, protect,
not impair, retain or enforce any security for the payment of the Indebtedness
or performance of any of the other obligations guaranteed hereby; and

          (g)  any defense based on a right of set-off or counterclaim.












                                     -4- 
<PAGE>

     7.   All existing and future indebtedness under the Reimbursement Agreement
of the Issuer to the Credit Enhancement Provider or to any person controlled or
owned in whole or in part by the Credit Enhancement Provider is hereby
subordinated to the Indebtedness at any time when a default exists under the
Indebtedness.  Furthermore, such subordinated indebtedness shall not be paid nor
shall the Credit Enhancement Provider accept or cause or permit any person
controlled or owned in whole or in part by the Credit Enhancement Provider to
accept any payment of or on account of any such subordinated indebtedness at any
time after a default exists under the Indebtedness.  Any payment received by the
Credit Enhancement Provider in violation of this Agreement shall be received by
the person to whom paid in trust for the Trustee, and Credit Enhancement
Provider shall cause the same to be paid to the Trustee immediately on account
of the Indebtedness.  No such payment shall reduce or affect in any manner the
liability of the Credit Enhancement Provider under this Agreement.

     8.   [Intentionally omitted.]

     9.   The amount of Credit Enhancement Provider's Obligations and all
rights, powers and remedies of Trustee hereunder shall be cumulative and not
alternative and such rights, powers and remedies shall be in addition to all
rights, powers and remedies given to the Trustee under the Indenture and/or
otherwise by law.

     10.  Subject to Paragraph 24 hereof, the Obligations of the Credit
Enhancement Provider under this Agreement shall be absolute, direct, immediate
and unconditional, and shall be considered as guaranty of payment, but shall not
be a guarantee of collection of any obligation of the Issuer.  The Obligations
of the Credit Enhancement Provider hereunder are independent of the Indebtedness
of the Issuer, and, in the event of any default hereunder, a separate action or
actions may be brought and prosecuted against the Credit Enhancement Provider,
whether or not the Issuer is joined therein or a separate action or actions are
brought against the Issuer.  The Trustee may maintain successive actions for
other defaults.  The Trustee's rights hereunder shall not be exhausted by its
exercise of any of its rights or remedies or by any such action or by any number
of successive actions until and unless the Indebtedness has been paid in full.

     11.  The Trustee is not to be concerned to see or inquire into the powers
of the Issuer, its officers, directors, associates, employees or agents acting
or purporting to act on its behalf, the Credit Enhancement Provider hereby
acknowledging that such powers exist, and monies in fact received by the Issuer
from the proceeds of the Bonds in the professed exercise of such powers shall be
deemed to form a part of the liabilities secured hereby and by the Collateral,
even though the borrowing or obtaining of such monies be in excess of the powers
of the Issuer or of the officers, directors, associates or other agents thereof,
or shall be in any way irregular, defective or illegal.

     12.  Should any one or more provisions of this Agreement be determined to
be illegal or unenforceable, all other provisions nevertheless shall be
effective.

                                     -5- 
<PAGE>

     13.  No provision of this Agreement or right of the Trustee hereunder can
be waived nor can the Credit Enhancement Provider be released from Credit
Enhancement Provider's Obligations hereunder except by a writing duly executed
by the Trustee and 100% of the holders of the Bonds.  This Agreement may not be
modified, amended, revised, revoked, terminated, changed or varied in any way
whatsoever except by the express terms of a writing duly executed by the Trustee
except to the extent otherwise  provided in Paragraph 23 hereof.

     14.  When the context and construction so require, all words used in the
singular herein shall be deemed to have been used in the plural, and the
masculine shall include the feminine and neuter and vice versa.  The word
"person" as used herein shall include any individual, company, firm,
association, partnership, corporation, trust or other legal entity of any kind
whatsoever.  All capitalized terms used herein shall have the definitions set
forth herein and capitalized terms not otherwise defined shall have the meanings
set forth in the Indenture or the Reimbursement Agreement or the Pledge
Agreement.

     15.  If any or all of the Indebtedness is assigned by the Trustee, this
Agreement shall automatically be assigned therewith in whole or in part, as
applicable, without the need of any express assignment and when so assigned, the
Credit Enhancement Provider shall be bound as set forth herein to the
assignee(s) without in any manner affecting Credit Enhancement Provider's
liability hereunder for any part of the Indebtedness retained by the Trustee.  

     16.  This Agreement shall inure to the benefit of and bind the  successors
and assigns of the Trustee and the Credit Enhancement Provider.  The Credit
Enhancement Provider shall not assign its rights or Obligations hereunder
without the prior written consent of the Trustee and 100% of the holders of the
Bonds.

     17.  This Agreement shall be governed by and construed in accordance with
the laws of the State of Colorado, except to the extent that any of such laws
may now or hereafter be preempted by Federal law, in which case, such Federal
law shall so govern and be controlling.  In any action brought under or arising
out of this Agreement, the Credit Enhancement Provider hereby consents to the
jurisdiction of any competent court within the State of Colorado and consents to
service of process by any means authorized by the law of the State of the
Colorado.  Except as provided in any other written agreement now or at any time
hereafter in force between the Trustee and the Credit Enhancement Provider, this
Agreement shall constitute the entire agreement of the Credit Enhancement
Provider with the Trustee with respect to the subject matter hereof, and no
representation, understanding, promise or condition concerning the subject
matter hereof shall be binding upon the Trustee or the Credit Enhancement
Provider unless expressed herein.

     18.  All notices, demands, requests or other communications to be sent by
one party to the other hereunder or required by law shall be in writing and
shall be deemed to have been validly given or served by delivery of same in
person to the addressee or by depositing same with Federal Express, Airborne or
other verifiable overnight delivery system for next business 

                                     -6- 
<PAGE>

day delivery or by depositing same in the United States mail, postage 
prepaid, registered or certified mail, return receipt requested, addressed as 
follows:

          Trustee:             SouthTrust Bank of Alabama, National Association
                               100 Office Park Drive; Lower Level
                               Birmingham, Alabama  35223
                               Attention:  Corporate Trust Department

          Credit Enhancement 
          Provider:            BFC Guaranty Corp.
                               1455 Pennsylvania Avenue, Suite 230
                               Washington, D.C.  20004

          All notices, demands and requests shall be effective upon such
personal delivery or upon being deposited with Federal Express, Airborne, or
other verifiable overnight delivery system, or in the United States mail as
required above.  However, with respect to notices, demands or requests so
deposited with Federal Express or in the United States mail, the time period in
which a response to any such notice, demand or request must be given shall
commence to run from the next business day following any such deposit with
Federal Express or, in the case of a deposit in the United States mail as
provided above, the date on the return receipt of the notice, demand or request
reflecting the date of delivery or rejection of the same by the addressee
thereof.  Rejection or other refusal to accept or the inability to deliver
because of changed address of which no notice was given shall be deemed to be
receipt of the notice, demand or request sent.  By giving to the other party
hereto at least 30 days' written notice thereof in accordance with the
provisions hereof, the parties hereto shall have the right from time to time to
change their respective addresses and each shall have the right to specify as
its address any other address within the United States of America.

     19.  The Credit Enhancement Provider hereby agrees that this Agreement, the
Pledge Agreement, the Obligations and all other obligations secured hereby,
shall remain in full force and effect at all times hereinafter until the
Indebtedness has been paid in full notwithstanding any action or undertakings
by, or against, the Trustee, the Credit Enhancement Provider, the Issuer, any
director of the Issuer and/or concerning any collateral securing the Bonds or
the Note in any proceeding in the United States Bankruptcy Court, including,
without limitation, any proceeding relating to valuation of collateral, election
or imposition of secured or unsecured claim status upon claims by the Trustee,
pursuant to any Chapter of the Bankruptcy Code or the Rules of Bankruptcy
Procedure as same may be applicable from time-to-time.

     20.  This Agreement may be executed in any number of counterparts, each of
which shall be effective only upon delivery and thereafter shall be deemed an
original, and all of which shall be taken to be one and the same instrument,
with the same effect as if all parties hereto had signed the same signature
page.  Any signature page of this Agreement may be detached from any counterpart
of this Agreement without impairing the legal effect of any signatures thereon

                                     -7- 
<PAGE>

and may be attached to another counterpart of this Agreement identical in form
hereto but having attached to it one or more additional signature pages.

     21.  This Agreement may not be assigned by the Credit Enhancement Provider
without the prior written consent of the Trustee and 100% of the holders of the
Bonds.  The Credit Enhancement Provider shall not assign, pledge, encumber or
otherwise transfer any interest in the Collateral without the prior written
consent of the Trustee and 100% of the holders of the Bonds.

     22.  The Credit Enhancement Provider agrees to convey, pledge and grant a
valid, perfected, first priority security interest in the Collateral for the
benefit of the Trustee.

     23.  The Credit Enhancement Provider may, with the consent of 100% of the
holders of the Bonds and of the Trustee, amend and supplement this Agreement;
PROVIDED, HOWEVER, that any such amendment or supplement shall be effective only
for the specific instance and for the specific purpose for which given. 

     24.  Notwithstanding anything to the contrary herein set forth, no
officers, directors, employees or agents of the Credit Enhancement Provider nor
heirs, successors or assigns thereof, shall have any personal liability for
payment or performance of the covenants set forth in this Agreement or in any
other instrument securing the Indebtedness or the Obligations, and the Trustee
agrees not to then assert or claim a deficiency or other personal money judgment
against the directors, employees or agents of the Credit Enhancement Provider or
their heirs, successors or assigns, for the payment of all Indebtedness and
Obligations herein described and to any other property, rights, accounts,
general intangibles, leases, rents, issues, profits, income, insurance premiums,
awards, payments and consideration conveyed, mortgaged, assigned or pledged
hereunder or under any other instrument which secures the Indebtedness or the
Obligations herein described or in which a security interest has been granted to
or for the benefit of the Trustee to secure the Indebtedness.  The foregoing
shall not be deemed or construed to be a release of the Indebtedness herein
described or in any way to impair, limit or otherwise affect the liens on the
Collateral or of any such other instrument on the property, funds or rights
covered thereby as Collateral for the payment of the Indebtedness or the
Obligations herein described and for the performance of the covenants in this
Agreement as a defendant in any action to enforce any remedy for a default, so
long as no personal or deficiency money judgment is sought or entered therein
against any officers, directors, employee or agent of the Credit Enhancement
Provider or their heirs, successors or assigns for principal or interest under
this Agreement or the Bonds.

     25.  The Credit Enhancement Provider hereby waives any requirement that the
Trustee protect, secure, perfect or insure any security interest or lien on any
property subject to the Pledge Agreement or exhaust any right or take any action
against any person before proceeding against the Collateral (including any
rights relating to marshalling of assets).

                                     -8- 
<PAGE>

     26.  The Credit Enhancement Provider hereby guarantees that the
Indebtedness will be paid strictly in accordance with the terms hereof,
regardless of the value, genuineness, validity, regularity or enforceability of
the Indebtedness, and of any law, regulation or order now or hereafter in effect
regarding jurisdiction affecting any of such terms or the rights of the Trustee
with respect thereto.  The liability of the Credit Enhancement Provider to the
extent herein set forth shall be absolute and unconditional (subject to the
provisions of paragraph 24 herein) not subject to any reduction, limitation,
impairment, termination, defense, offset, counterclaim or recoupment whatsoever
(all of which are expressly waived by the Credit Enhancement Provider) whether
by reason of any claim of any character whatsoever, including, without
limitation, any claim of waiver, release, surrender, alteration or compromise,
or by reason of any liability at any time to the Credit Enhancement Provider or
otherwise, whether based upon any obligation or any other agreement or
otherwise, and howsoever arising, whether out of action or inaction or
otherwise, and whether resulting from default, willfulness conduct, negligence
or otherwise, and without limiting the foregoing irrespective of:

          (a)  Any lack of validity or enforceability of the Bonds or any
     agreement or instrument relating thereto;

          (b)  Any change in the time, manner or place of payment or in any
     other term in respect of, all or any of the Indebtedness, or any other
     amendment or waiver of or consent to Indebtedness, or any other amendment
     or waiver or consent to any departure from the Bonds or the Indenture or
     any other agreement relating to any Indebtedness;

          (c)  Any increased income, addition to, exchange or release of, or
     nonperfection of any lien on or security interest in, any Collateral, or
     any release or amendment or waiver of or consent to any departure from or
     failure to enforce any other guarantee, for all or any of the Indebtedness;

          (d)  Any other circumstance which might otherwise constitute a defense
     available to, or discharge of, the Issuer in respect to the Indebtedness or
     the Credit Enhancement Provider in respect hereof;

          (e)  The absence of any action on the part of the Trustee to obtain
     payment of the Indebtedness from the Issuer;

          (f)  Any insolvency, bankruptcy, reorganization, dissolution or any
     proceeding of the Issuer or the Credit Enhancement Provider, including,
     without limitation, rejection, modification or discharge of the
     Indebtedness guaranteed hereby in such bankruptcy;

          (g)  The absence of notice of any delay in any action to enforce any
     Indebtedness or to exercise any right or remedy against the Credit
     Enhancement 

                                     -9- 
<PAGE>

     Provider, or the Issuer, whether hereunder, under any Indebtedness or any 
     agreement or any indulgence, compromise, or extension granted; or

          (h)  The failure by the Authority to reimburse the Credit Enhancement
     Provider under the Reimbursement Agreement.

     27.  The Credit Enhancement Provider further agrees that, to the extent
that the Issuer or the Credit Enhancement Provider makes a payment or payments
to the Trustee, which payment or payments or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to the Issuer or the Credit Enhancement Provider or their respective
estate, trustee, receiver or any other party under any bankruptcy law, state or
federal law, common law or equitable cause, then to the extent of such payment
or repayment, this Agreement and the advances or part thereof which have been
paid, reduced or satisfied by such amount shall be reinstated and continued in
full force and effect as of the date such initial payment, reduction or
satisfaction occurred.

     28.  The Credit Enhancement Provider shall have no rights (direct or
indirect) of subrogation, contribution, reimbursement, indemnification, or other
rights of payments or recovery from any person or entity, including, without
limitation, the Issuer, for any payments made on the Bonds by the Issuer, and
the Credit Enhancement Provider hereby waives and releases, absolutely and
unconditionally, any such right of subrogation, contribution, reimbursement,
indemnification and other rights or recovery which it may now have or hereafter
acquire.

     29.  This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns including,
without limitation, the Trustee.

     30.  No waiver of any provision of this Agreement and no consent to any
departure by the Credit Enhancement Provider herefrom, shall be effective unless
it is in writing and consented to by the Trustee and 100% of the holders of the
Bonds, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it is granted.

     31.  The Credit Enhancement Provider hereby represents and warrants that it
was organized solely for the purpose of guaranteeing the Obligations as provided
for herein.  The Credit Enhancement Provider hereby agrees that it has not
engaged and will not engage in any business unrelated to the activities herein
described.  The Credit Enhancement Provider has not and will not have any assets
other than those related hereto, including the Collateral.  The Credit
Enhancement Provider shall not amend its articles of incorporation, and
covenants for the benefit of the Trustee to comply with the provisions thereof.

     32.  The Credit Enhancement Provider has not and will not engage in or
consent to any dissolution, winding up, liquidation, consolidation, merger,
asset sale, or amendment of its 

                                     -10- 
<PAGE>

articles of incorporation.  The Credit Enhancement Provider hereby agrees 
that it shall have at least one independent director (as defined in its 
articles of incorporation) at all times.

     33.  The Credit Enhancement Provider has not caused or allowed and will not
cause or allow its board of directors to take any action requiring the unanimous
vote of 100% of the members of the board of directors unless an independent
director (as defined in its articles of incorporation) shall have participated
in such vote.

     34.  The Credit Enhancement Provider hereby agrees that during the period
that the Bonds are outstanding and continuing for 366 days thereafter, it shall
not, without the unanimous consent of all the directors of the Credit
Enhancement Provider, file a bankruptcy or insolvency petition or otherwise
institute insolvency proceedings with respect to itself or to any other entity
in which it has a direct or indirect legal or beneficial ownership interest,
dissolve, liquidate, consolidate, merge or sell all or substantially all of its
assets to any other entity in which it has a direct or indirect legal or
beneficial ownership interest, engage in any other business activity, or amend
its organizational documents.

     35.  The Credit Enhancement Provider has no indebtedness other than the
Obligations evidenced hereby and liabilities in the ordinary course of business
relating to the activities herein described.

     36.  The Credit Enhancement Provider has not and will not fail to correct
any known misunderstandings regarding the separate identity of the Credit
Enhancement Provider.

     37.  The Credit Enhancement Provider has maintained and will maintain its
accounts, books and records separate from any other person or entity.

     38.  The Credit Enhancement Provider has maintained and will maintain its
books, records, resolutions and agreements as official records.

     39.  The Credit Enhancement Provider has not and will not commingle its
funds or assets with those of any other entity, and has held and will hold its
assets in its own name.  The Credit Enhancement Provider has conducted and will
conduct its business in its own name.  The Credit Enhancement Provider has
maintained and will maintain its financial statements, accounting records and
other entity documents separate from any other person or entity.

     40.  The Credit Enhancement Provider has paid and will pay its own
liabilities out of its own funds and assets.

     41.  The Credit Enhancement Provider has observed and will observe all
corporate formalities, as applicable.

                                     -11- 
<PAGE>

     42.  The Credit Enhancement Provider has not and will not assume or
guarantee or become obligated for the debts of any other entity or hold out its
credit as being available to satisfy the obligations of any other entity except
for liabilities described herein.

     43.  The Credit Enhancement Provider has not and will not acquire
obligations or securities of its shareholders.

     44.  The Credit Enhancement Provider has allocated, and will allocate,
fairly and reasonably any overhead for shared office space and uses separate
stationery, invoices and checks.

     45.  The Credit Enhancement Provider has not and will not pledge its assets
for the benefit of any other person or entity except as herein described.

     46.  The Credit Enhancement Provider has held and identified itself and
will hold itself out and identify itself as a separate and distinct entity under
its own name and not as a division or part of any other person or entity.

     47.  The Credit Enhancement Provider has not and will not make any loans to
any person or entity except as herein provided.

     48.  The Credit Enhancement Provider has not and will not identify its
shareholders or any affiliate of the Credit Enhancement Provider or its
shareholders, as a division or part of it.

     49.  The Credit Enhancement Provider has not entered and will not enter
into or be a party to any transaction with its shareholders or affiliates,
except in the ordinary course of its business and on terms which are
intrinsically fair and no less favorable to it than would be obtained in a
comparable arms-length transaction with an unrelated third party.

















                                     -12- 
<PAGE>

     IN WITNESS WHEREOF, the Credit Enhancement Provider has executed this
Agreement as of the day and year first above written.



                     COUNTERPART SIGNATURE PAGE TO AGREEMENT




                         BFC GUARANTY CORP., a Delaware corporation



                         By:  /s/  FRANKLIN L. HANEY 
                            ------------------------------------------ 
                            Name:  Franklin L. Haney 
                            Title: President 



















<PAGE>

DISTRiCT OF COLUMBIA     )
                         ) ss.
                         )



     The foregoing instrument was acknowledged before me this 27th day of 
March, 1996, by Franklin Haney as President for BFC Guaranty Corp., a 
Delaware corporation.

     My commission expires:    November 14, 1997     
                           --------------------------

                                        /s/  PHOEBE M. JONES                  
                                        ------------------------------------- 
                                        Notary Public

<PAGE>

     IN WITNESS WHEREOF, the Trustee has executed this Agreement as of the day
and year first above written.


                     COUNTERPART SIGNATURE PAGE TO AGREEMENT



                              SOUTHTRUST BANK OF ALABAMA, NATIONAL ASSOCIATION,
                              a national banking association



                              By:   /s/  JUDITH B. MILLER               
                                 ----------------------------------------------
                                 Title: Vice President - ???



DISTRiCT OF COLUMBIA     )
                         ) ss.
                         )

     The foregoing instrument was acknowledged before me this 28th day of 
March, 1996, by Judith B. Miller,  as Vice President - ??? of SouthTrust Bank 
of Alabama, National Association, a national banking association.

     My commission expires:    November 14, 1997     
                           --------------------------

                                        /s/  PHOEBE M. JONES                  
                                        ------------------------------------- 
                                        Notary Public


<PAGE>






                                      
                            REIMBURSEMENT AGREEMENT 

                                   between 

                  CASTLE ROCK PUBLIC IMPROVEMENTS AUTHORITY 

                                     and 

                              BFC GUARANTY CORP. 



                           Dated as of March 1, 1996 


<PAGE>
                                      
                            REIMBURSEMENT AGREEMENT 


     THIS REIMBURSEMENT AGREEMENT, dated as of March 1, 1996, made by CASTLE 
ROCK RANCH PUBLIC IMPROVEMENTS AUTHORITY, a Colorado nonprofit corporation 
(the "Authority"), in favor of BFC GUARANTY CORP., a Delaware corporation 
(the "Credit Enhancement Provider"). Capitalized terms used but not otherwise 
defined herein shall have the meanings provided in Section 17 hereof.

     WHEREAS, the Authority has agreed to issue its Public Facilities Revenue 
Bonds, Series 1996, in the aggregate principal amount of $66,975,000 (the 
"Bonds") in order to acquire certain property; and 

     WHEREAS, the Bonds will be issued pursuant to a Resolution of the Board 
of Directors of the Authority (the "Bond Resolution"), and will be payable in 
accordance with the provisions of an Indenture of Trust, dated as of the date 
hereof (the "Indenture"), between the Authority and SouthTrust Bank of 
Alabama, National Association (the "Trustee"); and 

     WHEREAS, there will be issued pursuant to that certain Trust Indenture 
(the "REMIC Indenture"), dated as of the date hereof, by and between the BFC 
Finance Corp. and SouthTrust Bank of Alabama, National Association, as 
trustee (the "REMIC Trustee") certain BFC Finance Corp., REMIC Lease-Backed 
Bonds, Series 1996 (the "REMIC Bonds"); and 

     WHEREAS, the Credit Enhancement Provider is the owner of the Federal 
Lease-Backed Class B Bonds, one series of the REMIC Bonds (the "Collateral"); 
and 

     WHEREAS, to enhance the marketability of the Bonds, the Authority has 
requested Credit Enhancement Provider to provide the Collateralized Credit 
Enhancement Agreement to the Trustee to secure payment of the principal of 
and interest on the Bonds (the "Credit Enhancement"); and

     WHEREAS, the Credit Enhancement Provider has agreed to pledge the 
Collateral to secure its obligations under the Credit Enhancement, in 
accordance with the provisions of a Bond Pledge and Security Agreement, dated 
as of the date hereof, between the Credit Enhancement Provider, the Trustee 
and the REMIC Trustee (the "Pledge Agreement"); and 

     WHEREAS, the Authority and Credit Enhancement Provider desire to establish 
the terms and conditions for the provision by the Credit Enhancement Provider 
of the Credit Enhancement and the reimbursement by the Authority to Credit 
Enhancement Provider of any amounts paid by the Credit Enhancement Provider 
under the Credit Enhancement.

     NOW, THEREFORE, in consideration of the premises and in order to induce 
the Credit Enhancement Provider to provide the Credit Enhancement, and 
intending to be legally bound hereby, the parties hereto agree as follows:

                                      1 
<PAGE>

     SECTION 1.  REIMBURSEMENT AND OTHER PAYMENTS.

            (a)  The Authority hereby agrees to pay to the Credit Enhancement 
Provider an amount equal to all amounts paid by the Credit Enhancement 
Provider under the Credit Enhancement pursuant to any demand or otherwise 
(each a "Credit Payment"), payable on the day on which such Credit Payment is 
made pursuant to the Credit Enhancement, together with interest on any and 
all such Credit Payments from the date of each such Credit Payment until 
payment thereof in full, payable on demand, at an interest rate per annum 
(computed on the basis of the actual number of days elapsed and a year of 360 
days) equal to the rate of 9% per annum. Notwithstanding the foregoing, the 
Authority shall not be obligated to pay interest on any Credit Payment if the 
Authority shall have deposited with the Trustee the total amount to be 
advanced on any Credit Payment not later than the day prior to such Credit 
Payment.

            (b)  The Authority hereby agrees to pay to the Credit Enhancement 
Provider the reasonable fees and expenses of counsel to the Credit 
Enhancement Provider incurred in connection with matters relating to the 
Credit Enhancement, and this Agreement and other documents delivered in 
connection herewith, including, but not limited to costs of enforcement 
hereof, and any and all other reasonable charges and expenses which the 
Credit Enhancement Provider may pay or incur relative to the Credit 
Enhancement, the Bonds, this Agreement and all other agreements executed by 
the Authority related thereto and any and all reasonable expenses incurred by 
the Credit Enhancement Provider in enforcing any rights under the foregoing, 
including fees and expenses of counsel, together with interest on each such 
amount, payable on demand, from the date due until payment in full thereof at 
the rate per annum provided in subsection 1(a).

            (c)  The Authority shall pay to the Credit Enhancement Provider a 
commitment fee of six percent (6%) of the principal amount of the Bonds on 
the Date of Issuance. Such amount shall be fully earned on the Date of 
Issuance; provided, upon an extraordinary mandatory redemption of Bonds in 
accordance with Section 2.3(b) of the Indenture arising as a result of events 
occurring within 5 years of the date of issuance of the Bonds, the commitment 
fee shall be promptly refunded to the Authority.

            (d)  All payments by the Authority to the Credit Enhancement 
Provider hereunder shall be non-refundable and made in lawful currency of the 
United States and in immediately available funds at the Credit Enhancement 
Provider's principal office in Chattanooga, Tennessee no later than 10:00 
am., Denver time, on the day payment is due. Payments received by the Credit 
Enhancement Provider after 10:00 am. shall be deemed to be received on the 
following Business Day.

            (e)  Pursuant to the Indenture, the Credit Enhancement Provider 
shall be subrogated to the rights of the holders of the Bonds at such time as 
the Bonds have been paid in full. There is hereby pledged to the Credit 
Enhancement Provider all rights, title and interest of the Authority to the 
Trust Estate, including the Revenue (both as defined in the Indenture), 
subject to the rights specified therein of the Trustee and the Bondholders.

                                      2 
<PAGE>

     SECTION 2.  CONDITIONS PRECEDENT.  It shall be a condition precedent to 
the provision by the Credit Enhancement Provider of the Credit Enhancement 
that:

            (a)  the Credit Enhancement Provider shall have received, on or 
before the Date of Issuance, the following items, each, unless otherwise 
indicated, dated the Date of Issuance and in form and substance satisfactory 
to the Credit Enhancement Provider and its Counsel:

                 (i) copies of the Authority actions authorizing the 
     execution, delivery and performance of this Agreement, the Indenture, 
     the Bonds and other related documents and instruments, which written 
     actions shall be certified by an officer of the Authority (which 
     certificate shall state that such written actions are in full force and 
     effect on the Date of Issuance);

                 (ii) a duly executed Deed of Trust, Security Agreement, 
     Financing Statement and Assignment of Rents and Leases (the "Deed of 
     Trust") from the Authority for the benefit of the Credit Enhancement 
     Provider and the Trustee, in form and substance satisfactory to the Credit
     Enhancement Provider, in its sole discretion;

                 (iii) a duly executed copy of the Operating Agreement, dated 
     as of the date hereof (the "Operating Agreement") between the Authority and
     Dawson Ridge Metropolitan District No. 5 ("District 5"), and an Assignment 
     of Operating Agreement and Consent (the "Assignment") from the Authority to
     the Credit Enhancement Provider and the Trustee;

                 (iv) a duly executed copy of the Intergovernmental Agreement, 
     dated as of the date hereof (the "Intergovernmental Agreement"), between 
     District 5 and Dawson Ridge Metropolitan Districts Nos. 1-4 (the "Related 
     Districts");

                 (v) a duly executed copy of the Recreational Facilities 
     Agreement, dated as of the date hereof (the "Recreational Facilities 
     Agreement") between the Authority, District 5 and the Related Districts;

                 (vi) certified copies of the resolution of the boards of 
     directors of District 5 and the Related Districts authorizing execution of
     the Agreements to which each is a party;

                 (vii) a duly executed copy of the Development Agreement, dated 
     as of the date hereof, between Douglas County Development Corporation and 
     the Authority, and an Assignment of Development Agreement;

                 (viii) an assignment to the Credit Enhancement Provider and the
     Trustee (the "Assignments") of each of the documents specified in clauses 
     (iii), (iv), (v) and (vii) above;

                                      3 

<PAGE>

               (ix) an opinion of Counsel to the Authority, addressed to the 
     Credit Enhancement Provider, in form and substance satisfactory to the 
     Credit Enhancement Provider;

               (x)  an opinion of Jenner & Block, addressed to the Credit 
     Enhancement Provider, in form and substance satisfactory to the Credit 
     Enhancement Provider;

               (xi) an executed copy of the Indenture;

               (xii) an executed promissory note (the "Reimbursement Agreement
     Promissory Note") additionally evidencing the obligations of the Authority
     hereunder;

               (xiii) a copy of the Preliminary Limited Offering Memorandum 
     (the "Preliminary Offering Memorandum") and the final Offering Memorandum
     (the "Official Statement") with respect to the public offering of the 
     Bonds;

               (xiv) receipt of confirmation that the Bonds have been rated at 
     least "AA+" or the equivalent by Standard & Poor's Ratings Services; and

               (xv) such other documents, instruments, approvals and, if 
     requested by the Credit Enhancement Provider, certified duplicates of 
     executed copies thereof, and opinions as the Credit Enhancement Provider 
     may reasonably request.

          (b)  The following statements shall be true and correct on the Date 
of Issuance and the Credit Enhancement Provider shall have received a 
certificate signed by a duly authorized officer of the Authority, dated the 
Date of Issuance, stating that:

               (i)  the representations and warranties of the Authority 
     contained in Section 4 of this Agreement are correct on and as of the Date
     of Issuance as though made on and as of such date;

               (ii)  no petition by or against the Authority has at any time 
     been filed under the United States Bankruptcy Code or under any similar 
     act; and

               (iii) no Event of Default (as defined in Section 6 hereof) has 
     occurred and is continuing, or would result from the issuance of the Bonds 
     or Credit Enhancement and execution of this Agreement or the Indenture, 
     and no Unmatured Event of Default (as defined in Section 17 hereof) has 
     occurred and is continuing.

     SECTION 3.  OBLIGATIONS ABSOLUTE.  The obligations of the Authority 
under this Agreement shall be absolute, unconditional and irrevocable, and 
shall not be subject to any right of set-off or counterclaim and shall be 
paid or performed strictly in accordance with the terms of this Agreement, 
under all circumstances whatsoever, including, without limitation, the 
following circumstances:



                                      4

<PAGE>

          (a)  any lack of validity or enforceability of the Bond Documents 
(as defined in Section 4(b) hereof, or any other agreement or instrument 
relating thereto (the "Related Documents");

          (b)  any amendment or waiver of any provision of all or any of the 
Related Documents unless consented to in writing by the Credit Enhancement 
Provider;

          (c)  the existence of any claim, set-off, defense or other rights 
which the Authority may have at any time against the Trustee, any 
beneficiary or any transferee of the Credit Enhancement or pledgee of the 
Collateral or any persons or entities for whom the Trustee, any such 
beneficiary or any such transferee may be acting, the Credit Enhancement 
Provider (other than the defense of payment to the Credit Enhancement 
Provider in accordance with the terms of this Agreement) or any other person 
or entity, whether in connection with this Agreement, the Indenture, the 
Bonds or the Reimbursement Agreement Promissory Note or any transaction 
contemplated thereby or any unrelated transaction.

          (d)  any statement or any other document presented under the Credit 
Enhancement proving to be forged, fraudulent, invalid or insufficient in any 
respect or any statement therein being untrue or inaccurate in any respect 
whatsoever;

          (e)  payment under the Credit Enhancement which does not comply 
with the terms of the Pledge Agreement or the Indenture (other than a payment 
resulting from the willful misconduct or gross negligence of the Credit 
Enhancement Provider); and

          (f)  any other circumstance or happening whatsoever, whether or not 
similar to any of the foregoing.

     SECTION 4.  REPRESENTATION AND WARRANTIES.  The Authority represents and 
warrants as follows:

          (a)  The Authority is a duly organized, and validly existing 
nonprofit corporation, existing as such and in good standing under the laws 
of the State of Colorado.

          (b)  The Bond Documents, which for purposes of this Agreement 
includes the Bond Resolution, this Agreement, the Deed of Trust, the 
Operating Agreement, the Assignment, the Reimbursement Agreement Promissory 
Note, the Intergovernmental Agreement, the Development Agreement, the 
Recreational Facilities Agreement, the Assignments, the Reimbursement 
Agreement Promissory Note, the Bonds and the Indenture, were duly authorized 
by the affirmative vote of a majority of the duly qualified members of the 
Board of Directors of the Authority voting thereon and are in full 
conformance with all applicable laws, rules, and regulations and the articles 
of incorporation and by-laws of the Authority.



                                      5

<PAGE>

          (c)  The approval and execution of the Bond Documents, and 
performance of the Authority's obligations thereunder, do not conflict with or 
constitute a breach of or default under, any indenture, commitment, 
agreement, or other instrument to which the Authority is a party or by which 
the Authority is bound, nor violate any existing law, rule, regulation, 
resolution, judgment, order, or decree to which the Authority or its 
property is subject.

          (d)  No litigation of any nature is now pending against the 
Authority, or, to the best of the Authority's knowledge, threatened against 
the Authority, seeking to restrain or to enjoin the execution and performance 
of the Bond Documents, the issuance or delivery of the Bonds or the levy or 
collection of any taxes to pay the principal of or interest on the Bonds, or 
in any manner questioning the authority or proceedings for the issuance of 
the Bonds or the levy or collection of said taxes, or affecting the validity 
of the Bonds or the levy or collection of said taxes; and no litigation of 
any nature is now pending against the Authority or, to the best of the 
knowledge of the Authority, threatened against the Authority, which, if 
determined adversely to the Authority, would have a material adverse effect 
upon the Authority's ability to comply with its obligations under the Bond 
Documents, or to consummate the transactions contemplated thereby.

          (e)  The Bond Documents are valid and binding obligations of the 
Authority, and are enforceable against the Authority in accordance with their 
terms, except as such enforceability may be limited by bankruptcy, 
insolvency, reorganization, moratorium or other similar laws or equitable 
principles relating to or limiting creditors' rights generally.

          (f)  All financial and other information regarding the Authority 
provided to the Credit Enhancement Provider by the Authority is true and 
correct as of the date so provided and there has been no material and adverse 
change with respect to such information as it concerns the Authority except 
as has been provided to the Credit Enhancement Provider.

          (g)  The representations and warranties of the Authority contained 
in the Bond Documents are true and correct.

          (h)  The Authority shall maintain insurance of such type and in 
such amounts or in excess of such amounts as are customarily carried by and 
insures against such risks as are customarily insured against by 
organizations of like size and character to the Authority located in the 
State of Colorado and subject to the Colorado Governmental Immunity Act or 
comparable legislation to the same extent as the Authority.

     SECTION 5.  COVENANTS OF THE AUTHORITY AND SECURITY PROVISIONS.

               (a)  COVENANTS.  So long as either (i) the Credit Enhancement 
     is in effect, or (ii) any amount is due or owing to the Credit Enhancement
     Provider hereunder, the Authority will:



                                      6

<PAGE>

          (i)    COMPLIANCE WITH LAWS AND REGULATIONS.  Comply with all laws, 
     ordinances, orders, rules and regulations of duly constituted public 
     authorities which may be applicable to it or to the facilities it owns 
     and/or operates. The Authority shall, however, be entitled to contest 
     the application of any such law, ordinance, order, rule or regulation, 
     provided that such contest does not materially impair the ability of the 
     Authority to perform its obligations under this Agreement and the 
     Related Documents which, for the purposes of this Agreement, include the 
     Bond Documents and any other document to which the District is a party 
     related to the issuance of the Bonds and identified in an index of 
     closing documents delivered with respect to the Bonds.

          (ii)   COMPLETION OF RECREATIONAL FACILITIES.  Take all reasonable 
     efforts and proceed diligently to secure all necessary approvals for 
     construction and financing of the recreational facilities described in 
     the Residential and Golf Course Market Analysis and Revenue Projection 
     prepared by THK Associates Inc. (the "Recreational Facilities"), dated 
     February 12, 1996, and diligently proceed to complete the Recreational 
     Facilities.

          (iii)  MAINTENANCE OF PROPERTIES.  Maintain and preserve all of its 
     properties which are used or which are useful in the conduct of its 
     business in good working order and condition, ordinary wear and tear 
     excepted.

          (iv)   AMENDMENTS OR MODIFICATIONS OF RELATED DOCUMENTS.  Not 
     amend, modify or supplement, nor agree or consent to any amendment or 
     modification of, or supplement to, any of the Related Documents without 
     the prior written consent of the Credit Enhancement Provider.

          (v)    MAINTENANCE OF EXISTENCE.  Maintain its existence as a 
     nonprofit corporation under the laws of the State of Colorado.

          (vi)   FINANCIAL INFORMATION.  Keep proper books of record and 
     account in which full, true and correct entries will be made of all 
     dealings or transactions of or in relation to the business and affairs 
     of the Authority in accordance with generally accepted accounting 
     principles, and will furnish, or cause to be furnished, to the Credit 
     Enhancement Provider:

                 (A)  within 180 days after the last day of each fiscal year 
          of the Authority, a balance sheet of the Authority as of the end of 
          such fiscal year and statements of revenues, expenditure, and 
          changes in fund balance and of operations and changes in financial 
          position for such fiscal year, each prepared in accordance with 
          generally accepted accounting principles consistently applied, in 
          reasonable detail and certified by an independent certified public 
          accountant;

                                     7

<PAGE>

                 (B)  within 180 days after the last day of each fiscal year 
          of the Authority, a certificate signed by a qualified officer of 
          the Authority stating that the signer of the certificate has made a 
          review of the activities of the Authority during the preceding 
          fiscal year for the purpose of determining whether or not the 
          Authority has complied with all of the terms, provisions and 
          conditions of this Agreement and the Related Documents and to the 
          best knowledge of such signer the Authority has kept, observed, 
          performed and fulfilled each and every covenant, provision and 
          condition of this Agreement and the Related Documents on its part 
          to be performed and is not in default in the performance or 
          observance of any of the terms, covenants, provisions or conditions 
          hereof, or if the Authority shall be in default, such certificate 
          shall specify all such defaults and the nature and status thereof 
          of which the signer of the certificate shall have knowledge; and

                 (C)  on or before December 15 of each year, a copy of (1) 
          the Authority's annual budget evidencing the amounts due under the 
          Development Agreement, the Operating Agreement and the 
          Intergovernmental Agreement, (2) the annual mill levy certification 
          of each of Dawson Ridge Metropolitan Districts Nos. 1-5 (the 
          "Districts") required to be filed with the Board of County 
          Commissioners of Douglas County, Colorado (the "County") showing an 
          annual levy sufficient to pay obligations arising under the 
          Operating Agreement for the following fiscal year (subject to the 
          limitations of the Operating Agreement and the Intergovernmental 
          Agreement), and (3) (x) the determination of the assessed value of 
          property within the Authority, (y) the determination of the 
          estimated actual value of such property based on such assessed 
          value, and (z) a statement of the amount of ad valorem tax as 
          actually collected by the District.

          (vii)  ADDITIONAL DEBT. The Authority will not issue or incur 
     any additional indebtedness without the consent of the Credit Enhancement 
     Provider, in its sole discretion, except for obligations issued or 
     incurred as provided in the Indenture to finance the Recreational 
     Facilities which are subordinate to the Bonds and to the obligations of 
     the Authority under this Reimbursement Agreement and the Reimbursement 
     Agreement Promissory Note.

          (viii) CHARGES.  The Authority covenants and agrees that, unless 
     otherwise consented to by the Credit Enhancement Provider, it shall fix, 
     charge and collect, or cause to be fixed, charged and collected, subject 
     to applicable requirements or restrictions imposed by law, such rates, 
     fees, or charges for use of the Project (as defined in the Operating 
     Agreement) which, together with all other anticipated receipts and 
     revenues of the Authority and any other funds available therefor, will be 
     budgeted for the next Fiscal Year to be sufficient to

                                     8

<PAGE>

     produce Net Income Available for Debt Service (as defined in the 
     Indenture) equal to at least one and thirty-hundredths (1.30) times 
     Aggregate Annual Debt Service (as defined in the Indenture) for all Bonds 
     then outstanding for the next Fiscal Year.

     (c)  The Authority hereby agrees that the Credit Enhancement Provider 
shall be fully subrogated to the rights of the owners of Bonds under the 
Indenture with respect to which payments of principal or interest have been 
made from Credit Payments and the Credit Enhancement Provider may enforce the 
payment of such principal and interest against the Authority to the same 
extent and in the same manner as if the Credit Enhancement Provider were the 
owner of the principal or interest with respect to which payments were made.

     SECTION 6.  EVENTS OF DEFAULT.  The occurrence of any of the following 
events (including the expiration of any specified time) shall constitute an 
"Event of Default":

     (a)  any representation or warranty made by the Authority herein or in 
any Related Document or in any certificate, financial or other statement 
furnished by the Authority pursuant to this Agreement or any Related Document 
shall prove to have been untrue or incomplete in any material respect when 
made; or

     (b)  failure of the Authority to observe or perform any of the other 
covenants, conditions or provisions of this Agreement, and such failure 
continues for ten (10) days after notice from the Credit Enhancement Provider 
to the Authority; or

     (c)  the occurrence of default under the Indenture and such default 
continues for a period of ten days, or the occurrence of a default and the 
lapse of any applicable grace period under any other Related Document to which 
the Authority is a party; or

     (d)  this Agreement or any of the Bond Documents or the Related Documents 
to which the Authority is a party ceases to be valid and binding on the 
Authority; or

     (e)  the Authority shall (1) apply for or consent to or acquiesce in the 
appointment of a receiver, trustee, liquidator or custodian or the like of 
itself or of all or a substantial portion of its property or any such 
receiver, trustee, liquidator or custodian or the like shall have been 
appointed, (2) admit in writing its inability to pay or fail to pay its debts 
generally as they become due, (3) make a general assignment for the benefit of 
creditors, (4) call a meeting of its creditors for the purpose of adjusting 
its debts generally or to effect a composition of its debts, (5) be 
adjudicated a bankrupt or insolvent, (6) commence a voluntary case under the 
Federal bankruptcy laws of the United States of America or file a voluntary 
petition or answer seeking reorganization, an arrangement with creditors or an 
order for relief or seeking to take advantage of any insolvency law or file an 
answer admitting the material allegations of a petition filed against it in 
any bankruptcy, reorganization or insolvency proceeding, or action shall be 
taken by it for the purpose of effecting any of the foregoing, or (7) if 
without the application, approval or consent of the Authority or any of the 
Related Districts as the case may be, a proceeding shall

                                     9




<PAGE>

be instituted in any court of competent jurisdiction, under any law relating 
to bankruptcy, insolvency, reorganization or relief of debtors, or any 
administrative action shall be taken by any regulatory authority, seeking in 
respect of the Authority or any of the Related Districts as the case may 
be, an order for relief or an adjudication in bankruptcy, reorganization, 
dissolution, winding up, liquidation, a composition or arrangement with 
creditors, a readjustment of debts, or the appointment of a trustee, 
receiver, liquidator or custodian or the like of the Authority or any of the 
Related Districts as the case may be, or of all or any substantial part of 
its assets, or other like relief in respect thereof under any bankruptcy or 
insolvency law, and, if such proceeding or administrative action is being 
contested by the Authority or any of the Related Districts as the case may 
be, in good faith, the same shall (A) result in the entry of an order for 
relief or any such adjudication or appointment or (B) continue undismissed, 
or pending and unstayed, for any period of thirty (30) consecutive days; or

          (f)  the Authority shall fail to pay any amounts due under Section 
1 hereof on demand.

     SECTION 7.  REMEDIES.  Upon the occurrence of an Event of Default, the 
Credit Enhancement Provider may, in addition to any other remedies available 
to it at law or in equity and subject to applicable limitation of law, 
exercise any one or more of the following remedies:

          (a)  Foreclose on the Deed of Trust, subject to the limitations 
therein.

          (b)  Proceed by mandamus or any other suit, action or proceeding at 
law or in equity, to enforce all of its rights hereunder and to carry out the 
covenants and agreements of the Authority.

          (c)  By action or suit in equity, require the Authority to account 
as if it were the trustee of an express trust for the Credit Enhancement 
Provider.

          (d)  By action or suit in equity, enjoin any acts or things which 
may be unlawful or in violation of the rights of the Credit Enhancement 
Provider.

          (e)  Subject to the conditions of Section 1(a) of this Agreement, 
by written notice to the Authority declare all obligations of the Authority 
under this Agreement to be immediately due and payable, including all amounts 
which could have or will become due upon any drawing under the Credit 
Enhancement, whereupon such obligations shall become immediately due and 
payable.

          (f)  Take whatever action at law or in equity that may appear 
necessary or appropriate to collect any amount due or thereafter to become 
due, or to enforce performance



                                     10

<PAGE>

and observance of any obligation, agreement or covenant of the Authority 
hereunder or under any other Related Document.

     The rights and remedies of the Credit Enhancement Provider specified 
herein are for the sole and exclusive benefit, use and protection of the 
Credit Enhancement Provider, and Credit Enhancement Provider may, but shall 
have no duty or obligation to the Authority, the Trustee, the owners of any 
of the Bonds or otherwise, (i) to exercise or to refrain from exercising any 
right or remedy reserved to the Credit Enhancement Provider hereunder, or 
(ii) to cause the Trustee or any other party to exercise or to refrain from 
exercising any right or remedy available to them under any of the Related 
Documents or otherwise.  The foregoing provisions of this Section are subject 
to limitations that the Credit Enhancement Provider will take no action in 
the exercise of remedies herein unless the Credit Enhancement Provider has 
delivered to the Trustee an opinion of Bond Counsel (as defined in the 
Indenture) that such action shall not cause interest on the Bonds to become 
subject to inclusion in gross income for federal income tax purposes to the 
holders of the Bonds.

     SECTION 8.  AMENDMENTS, ETC.  No amendment to this Agreement shall be 
effective unless the same is in writing and signed by all the parties hereto. 
No waiver of any provision of this Agreement nor any consent to any departure 
by the Authority therefrom shall in any event be effective unless the same 
shall be in writing and signed by the Credit Enhancement Provider, and then 
such waiver or consent shall be effective only in the specific instance and 
for the specific purpose for which given.  Nothing in this Agreement shall be 
construed to create any rights of a third party beneficiary in any person 
with respect to the covenants and obligations herein provided.

     SECTION 9.  ADDRESSES FOR NOTICES.  All notices and other communications 
provided for hereunder shall be in writing and, if to the Authority, 
addressed to it as follows:

          Authority:         c/o C. Roger Addlesperger
                             Standford Place III Suite 902
                             4582 S. Ulster Street Parkway
                             Denver, Colorado 80237
                             FAX: (303) 220-8027
                             PH:  (303) 770-0200

          Credit Enhancement
          Provider:          1455 Pennsylvania Avenue, Suite 230
                             Washington, D.C. 20004
                             FAX:  (202) 639-0514
                             PH:   (202) 639-0512

or as to each party at such other address as shall be designated by such 
party in a written notice to the other party.



                                     11

<PAGE>

     SECTION 10.  NO WAIVER; REMEDIES.  No failure on the part of the Credit 
Enhancement Provider to exercise, and no delay in exercising, any right 
hereunder shall operate as a waiver thereof; nor shall any single or partial 
exercise of any right hereunder preclude any other further exercise thereof 
or the exercise of any other right. The remedies herein provided are 
cumulative and not exclusive of any remedies provided by law.

     SECTION 11.  SET-OFF.  Whenever an Event of Default shall have occurred 
and be continuing, the Authority hereby irrevocably authorized the Credit 
Enhancement Provider to set-off the indebtedness owed by the Authority to the 
Credit Enhancement Provider under this Agreement, including any contingent 
indebtedness of the Authority with respect to the Credit Enhancement, against 
all deposits and credits of the Authority with, and any and all claims of the 
Authority against, the Credit Enhancement Provider, whether or not said 
indebtedness of the Authority, or any part thereof, shall be then due. No 
such set-off right shall reduce the Credit Enhancement Provider's obligations 
under the Credit Enhancement.

     SECTION 12.  INDEMNIFICATION.  To the extent permitted by law, the 
Authority hereby indemnifies and holds harmless the Credit Enhancement 
Provider from and against any and all claims, damages, losses, liabilities, 
reasonable costs or expenses whatsoever (including attorneys fees) which the 
Credit Enhancement Provider may incur (or which may be claimed against the 
Credit Enhancement Provider by any person or entity whatsoever) by reason of 
or in connection with (a) the execution and delivery or transfer of, or 
payment or failure to pay under, the Credit Enhancement, or (b) the issuance 
and sale of the Bonds; PROVIDED, that the Authority shall not be required to 
indemnify the Credit Enhancement Provider for any claims, damages, losses, 
liabilities, costs or expenses to the extent, but only to the extent, caused 
by the willful misconduct or gross negligence of the Credit Enhancement 
Provider. However, nothing in this Section 12 (including specifically, the 
proviso clause of the preceding sentence) is intended to limit the 
obligations of the Authority contained in Section 1 hereof, which are 
absolute, unconditional and irrevocable.

     SECTION 13,  CONTINUING OBLIGATION.  This Agreement is a continuing 
obligation, shall survive the termination of the Credit Enhancement, and 
shall (a) be binding upon the Authority and its respective successors and 
assigns, and (b) inure to the benefit of and be enforceable by the Credit 
Enhancement Provider and its successors, transferees and assigns, PROVIDED, 
that the Authority may not assign all or any part of this Agreement without 
the prior written consent of the Credit Enhancement Provider.

     SECTION 14.  TRANSFER OF CREDIT ENHANCEMENT.  The Credit Enhancement and 
the Collateral may be transferred and retransferred to any successor to the 
Trustee appointed in accordance with the provisions of the Indenture.

     SECTION 15.  LIABILITY OF THE CREDIT ENHANCEMENT PROVIDER.  The 
Authority assumes all risks of the acts or omission of the Trustee and the 
REMIC Trustee and any transferee of the Credit Enhancement or the Collateral 
with respect to its use of the Credit Enhancement or the Collateral. The 
Authority agrees that neither the Credit Enhancement Provider nor any of



                                     12


<PAGE>

its officers or directors shall be liable or responsible hereunder for: (a) 
the use which may be made of the the Credit Enhancement or the Collateral or 
for any acts or omissions of the Trustee or the REMIC Trustee and any 
transferee of the Trustee or the REMIC Trustee in connection therewith; (b) 
the validity, sufficiency or genuineness of documents, or of any endorsement(s)
thereon, other than with respect to the Credit Enhancement Provider, even if 
such documents should in fact prove to be in any or all respects invalid, 
insufficient, fraudulent or forged; or (c) payments by the Credit Enhancement 
Provider which are not in compliance with the terms of the Credit Enhancement 
or the Pledge.

     SECTION 16.  NO OFFICER OR DIRECTOR LIABILITY.  Notwithstanding anything 
contained herein, the Credit Enhancement Provider acknowledges and agrees 
that no covenant, agreement or obligation of the Authority hereunder shall be 
deemed to be a covenant, agreement or obligation of any present or future 
director or officer of the Authority in his or her individual capacity, and 
neither the members of the governing body of the Authority nor any director 
or officer who has executed this Agreement or any amendment or addendum 
thereto shall be liable personally thereon or be subject to any personal 
liability by reason thereof.

     SECTION 17.  DEFINITIONS.  In addition to terms defined at other places 
in this Agreement, the following defined terms are used throughout this 
Agreement with the following meanings:

     "Business Day" means any date which is not a Saturday or Sunday or is not 
a day on which banking institutions located in Denver, Colorado or in the city 
in which the Trustee's principal corporate trust office or operations center is 
located are required or authorized by law to remain closed.

     "Unmatured Event of Default" means an event which, with the giving of 
notice, the lapse of time or both, would become an Event of Default.

     SECTION 18.  NATURE OF AUTHORITY LIABILITY.  The obligations of the 
Authority hereunder are general obligations to which the Authority has 
pledged the Revenue, pursuant to Section 1(e) hereof. Notwithstanding 
anything to the contrary herein set forth, neither the officers, directors, 
employees or agents of the Authority nor their heirs, successors or assigns, 
shall have any personal liability for payment or performance of the covenants 
set forth herein in the Reimbursement Agreement Promissory Note or in any 
other instrument securing the indebtedness created hereunder, and the Credit 
Enhancement Provider agrees not to assert or claim a deficiency or other 
personal money judgment against the officers, directors, employees or agents 
of the Authority or their heirs, successors or assigns. The foregoing shall 
not be deemed or construed to be a release of the indebtedness herein 
described or in any way to impair, limit or otherwise affect the liens of the 
Deed of Trust or of any such other instrument on the property, funds or 
rights covered thereby as security for the payment of the indebtedness herein 
described and for the performance of the covenants herein or in the 
Reimbursement Agreement Promissory Note, or prevent the Credit Enhancement 
Provider from naming the Authority, its officers and directors, or their 
successors or assigns as a defendant in any action to enforce any remedy for 

                                     13 
<PAGE>

a default, so long as no personal or deficiency money judgment is sought or 
entered therein against the officers and directors of the Authority, or their 
successors or assigns for amounts due hereunder or under the Reimbursement 
Agreement Promissory Note.

     SECTION 19.  SEVERABILITY.  Any provision of this Agreement which is 
prohibited, unenforceable or not authorized in any jurisdiction shall, as to 
such jurisdiction, be ineffective to the extent of such prohibition, 
unenforceability or nonauthorization without invalidating the remaining 
provisions hereof or affecting the validity, enforceability or legality of 
such provision in any other jurisdiction.

     SECTION 20.  GOVERNING LAW.  This Agreement shall be governed by, and 
construed in accordance with, the law of the State of Colorado.

     SECTION 21.  HEADINGS.  Section headings in this Agreement are included 
herein for convenience of reference only and shall not constitute a part of 
this Agreement for any other purpose.


              [Balance of Page Intentionally Left Blank]

















                                   14 
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be 
duly executed and delivered by their respective officers thereunto duly 
authorized as of the date first above written.

                                     CASTLE ROCK RANCH IMPROVEMENTS AUTHORITY 

                                     By:  /s/  C. ROGER ADDLESPERGER 
                                        ------------------------------------- 
                                        Name:  C. Roger Addlesperger 
                                        Title: President 


                                     BFC GUARANTY CORP.

                                     By:  /s/  FRANKLIN L. HANEY     
                                        ------------------------------------- 
                                        Name:  Franklin L. Haney     
                                        Title: President 






















                                   15 


<PAGE>





                       BOND PLEDGE AND SECURITY AGREEMENT




                                     Between



                               BFC GUARANTY CORP.

                                       and

                SOUTHTRUST BANK OF ALABAMA, NATIONAL ASSOCIATION,
                                 as Bond Trustee

                                       and

                SOUTHTRUST BANK OF ALABAMA, NATIONAL ASSOCIATION,
                                as REMIC Trustee


                            Dated as of March 1, 1996


<PAGE>


                       BOND PLEDGE AND SECURITY AGREEMENT



     THIS BOND PLEDGE AND SECURITY AGREEMENT (the "Pledge Agreement"), dated as
of March 1, 1996, is made by and between BFC Guaranty Corp. (the "Credit
Enhancement Provider") and SouthTrust Bank of Alabama, NATIONAL ASSOCIATION, in
its capacity as trustee under the Bond Indenture herein described (the "Bond
Trustee") and SouthTrust Bank of Alabama, NATIONAL ASSOCIATION, in its capacity
as trustee under the REMIC Indenture herein described (the "REMIC Trustee").


                            W I T N E S S E T H:

     WHEREAS, Castle Rock Ranch Public Improvements Authority (the "Bond
Issuer") is issuing its Public Facilities Revenue Bonds, Series 1996 in the
principal amount of $66,975,000 (the "Bonds"), pursuant to an Indenture of
Trust, dated as of March 1, 1996 (the "Bond Indenture"), between the Bond Issuer
and the Bond Trustee; and

     WHEREAS, BFC Finance Corp. shall execute a Trust Indenture, dated as of the
date hereof (the "REMIC Indenture"), between BFC Finance Corp. and the REMIC
Trustee; and

     WHEREAS, the Credit Enhancement Provider shall be the owner of all BFC
Finance Corp., REMIC Federal Lease-Backed Bonds, Series 1996, Class B Bonds (the
"Collateral"); and

     WHEREAS, the Credit Enhancement Provider has executed a Collateralized
Credit Enhancement Agreement, dated as of the date hereof (the "Credit
Agreement"), from the Credit Enhancement Provider to the Bond Trustee, pursuant
to which the Credit Enhancement Provider has agreed to provide to the Bond
Trustee amounts sufficient to provide for the due, prompt and complete payment
of the Bonds (excluding Extra Payments, within the meaning of the Bond
Indenture) (the obligations to provide such amounts being referred to herein and
therein as the "Indebtedness"); and

     WHEREAS, in the Credit Agreement, the Credit Enhancement Provider has
agreed to pledge the Collateral to the Bond Trustee to secure its obligations
with respect to the Indebtedness.

     NOW, THEREFORE, in consideration of the premises and in order to induce the
Bond Trustee to enter into the Bond Indenture and for other good and valuable
consideration, receipt of which is hereby acknowledged, the parties hereto agree
as follows:

     1.   DEFINED TERMS.  Unless otherwise defined herein, terms defined or used
in the Bond Indenture shall have such defined meanings when used herein.



                                      1

<PAGE>

     2.   PLEDGE.  The Credit Enhancement Provider hereby pledges, assigns,
hypothecates, transfers and delivers to the Bond Trustee all of its right, title
and interest in and to the Collateral as the same may be from time to time
delivered to the Bond Trustee, and grants a first priority lien on, and security
interest in, its right, title and interest in and to the Collateral and all
interest or other income thereon and all proceeds thereof, as security for the
prompt and complete payment when due of all amounts due in respect of the
obligations of the Credit Enhancement Provider under the Credit Agreement (all
the foregoing being hereinafter called the "Obligations").  The REMIC Trustee is
hereby irrevocably instructed to register the Collateral in the name of the Bond
Trustee as pledgee.  The REMIC Trustee is hereby irrevocably instructed to make
all payments of principal of and interest on the Collateral directly to the Bond
Trustee, and the Bond Trustee hereby covenants and agrees to apply such payments
on the Collateral in accordance with the provisions of the Credit Agreement and
the Bond Indenture.

     3.   PAYMENTS ON THE COLLATERAL.  All sums of money paid in respect of the
Collateral which are received by the Bond Trustee shall be credited against the
obligations of the Credit Enhancement Provider under the Credit Agreement.  The
Bond Trustee shall not be entitled to retain any portion of payments made under
the Collateral to pay fees, expenses, charges or compensation payable to the
Bond Trustee under the Bond Indenture.

     4.   RELEASE OF COLLATERAL.  Except as provided in Section 9 hereof, the
Collateral shall be released from the Pledge of this Security Agreement only
following payment of all principal of and interest on the Bonds (other than any
Extra Payment, as defined in the Bond Indenture) or provision therefor made in
accordance with the terms of the Bond Indenture.  Upon such release, the Bond
Trustee shall notify the REMIC Trustee, which shall, upon receipt of such
notice, register the Collateral in the name of the Credit Enhancement Provider.

     5.   [Intentionally omitted.]

     6.   REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE CREDIT ENHANCEMENT
PROVIDER.  The Credit Enhancement Provider represents and warrants that: (a) on
the date hereof, no party other than the Credit Enhancement Provider has any
right, title or interest in or to the Collateral except as herein provided; (b)
the Credit Enhancement Provider has full power, authority and legal right to
pledge all of its right, title and interest in and to the Collateral pursuant to
this Pledge Agreement; (c) this Pledge Agreement has been duly authorized,
executed and delivered by the Credit Enhancement Provider and constitutes a
legal, valid and binding obligation of the Credit Enhancement Provider
enforceable in accordance with its terms; (d) no consent of any other party and
no consent, license, permit, approval or authorization of, exemption by, notice
or report to, or registration, filing or declaration with, any governmental
authority, domestic or foreign, is required to be obtained by the Credit
Enhancement Provider in connection with the execution, delivery or performance
of this Pledge Agreement; (e) the execution, delivery and performance of this
Pledge Agreement will not violate, in any material respect, any provision of any
applicable law or regulation or of any order, judgment, writ, award or decree of
any court, arbitrator or governmental authority, domestic or foreign, or of any
mortgage, indenture, 



                                      2

<PAGE>

lease, contract, or other agreement, instrument or undertaking to which the 
Credit Enhancement Provider is a party or which purports to be binding upon 
the Credit Enhancement Provider or upon its assets and will not result in the 
creation or imposition of any lien, charge or encumbrance on or security 
interest in any of the assets of the Credit Enhancement Provider except as 
contemplated by this Pledge Agreement; (f) the pledge, assignment and 
delivery of such Collateral pursuant to this Pledge Agreement will create a 
valid lien on and a perfected security interest in, all right, title or 
interest of the Credit Enhancement Provider in or to the Collateral, and the 
proceeds thereof, subject to no prior pledge, lien, mortgage, hypothecation, 
security interest, charge, option or encumbrance or to any agreement 
purporting to grant to any third party a security interest in the property or 
assets of the Credit Enhancement Provider which would include the Collateral; 
and (g) as of the date hereof, the Collateral is fully paid and 
non-assessable.  The Credit Enhancement Provider covenants and agrees that it 
will defend the Bond Trustee's right, title and security interest in and to 
the Collateral and the proceeds thereof against the claims and demands of all 
persons whomsoever; and covenants and agrees that it will have like title to 
and right to pledge any other property at any time hereafter pledged to the 
Bond Trustee as Collateral hereunder and will likewise defend the Bond 
Trustee's right thereto and security interest therein.

     7.   NO DISPOSITION, ETC.  The Credit Enhancement Provider agrees that,
except as provided in Section 9 hereof, it will not, without the prior written
consent of the Bond Trustee and 100% of the holders of the Bonds, sell, assign,
transfer, exchange, or otherwise dispose of, or grant any option with respect
to, the Collateral, nor will it create, incur or permit to exist any pledge,
lien, mortgage, hypothecation, security interest, charge, option or any other
encumbrance with respect to any of the Collateral, or any interest therein, or
any proceeds thereof, except for the lien and security interest provided for by
this Pledge Agreement.  In all events, rights of any assignee or other
transferee in the Collateral will be subordinate to the rights of the Bond
Trustee until release of the Collateral as herein provided, and no such assignee
or other transferee will be permitted to take any action with respect to the
Collateral until the release thereof as herein provided.

     8.   REMIC TRUSTEE.

               (i)  If a book-entry depository administered by The Depository
     Trust Company or any successor or nominee thereto (the "Depository") is in
     use pursuant to the REMIC Indenture, the REMIC Trustee shall notify the
     Depository (in a form acceptable to the Depository for such notice) of the
     principal amount(s) of the REMIC Bonds which are to become Collateral for
     the benefit of the Bond Trustee.  Said notice shall further instruct the
     Depository to record in its system a corresponding increase in the
     principal amount of the REMIC Bonds credited to the account of the Bond
     Trustee or such other entity which should hold Collateral in a book-entry
     system (the Bond Trustee or such other entity, the "DTC Participant"). 
     Concurrently with the delivery of such notice to the Depository, the REMIC
     Trustee shall provide a copy of such notice to the Credit Enhancement
     Provider and the Bond Trustee.  The Bond Trustee and the Credit Enhancement
     Provider shall provide the REMIC Trustee with any confirmation 



                                      3

<PAGE>

     or like notice received by any of them from the Depository evidencing the
     Depository's compliance with the instructions.

               (ii)  Whenever a book-entry depository is in use pursuant to the
     REMIC Indenture and Collateral is held on behalf of the Bond Trustee by the
     DTC Participant, the Bond Trustee shall have the right to obtain a separate
     bond certificate to evidence the Collateral, and upon request by the Bond
     Trustee, the Credit Enhancement Provider will cause the REMIC Trustee to
     authenticate and deliver such certificate, and such certificate shall be
     deposited with the Depository or delivered to the Bond Trustee or a Person
     designated by the Bond Trustee, as the Bond Trustee shall direct.

               (iii) If a book-entry depository ever ceases to be in use
     with respect to the Collateral, the REMIC Trustee and the Credit
     Enhancement Provider each hereby agree to hold any Collateral received by
     any of them as the Bond Trustee's agent and bailee and to make a notation
     in its respective records with respect to the Collateral.  Upon request of
     the Bond Trustee, each of the REMIC Trustee and the Credit Enhancement
     Provider will deliver or cause to be delivered such Collateral to the Bond
     Trustee or to such person as the Bond Trustee may direct without
     termination of this Pledge Agreement.

               (iv)  Except at the written direction and with the prior written
     consent of the Bond Trustee and the consent of 100% of the holders of the
     Bonds, the REMIC Trustee shall not enter into any agreement other than this
     Pledge Agreement regarding possession of the Collateral.

               (v)   Upon appointment of a successor REMIC Trustee under and in
     accordance with the terms of the REMIC Indenture, release and delivery to
     the Bond Trustee or its designee of any Collateral then held by the REMIC
     Trustee pursuant to this Pledge Agreement, and the assumption in writing by
     its successor of its obligations hereunder, the REMIC Trustee shall have
     the right to terminate its position as REMIC Trustee for the Collateral and
     its obligations under this Pledge Agreement.

               (vi)  In acting under this Pledge Agreement, the REMIC Trustee
     shall not be liable to the Bond Trustee except for gross negligence or
     willful misconduct in the performance of its obligations hereunder.

     9.   SUBSTITUTION OF COLLATERAL.  The Credit Enhancement Provider may
pledge and assign to the Bond Trustee Federal Securities (as defined in the
Indenture), in substitution for the original Collateral, and the Bond Trustee
shall release the Collateral, subject to the following:

          a.   The Credit Enhancement Provider shall execute and deliver a
     pledge, lien, escrow or similar agreement irrevocably pledging and
     assigning the Federal Securities as collateral for the obligation of the
     Credit Enhancement Provider under the Credit 



                                      4

<PAGE>

     Agreement.  The Bond Trustee shall have a valid first priority perfected 
     lien in the Federal Securities and all proceeds thereof and distributions
     thereon in the name of the Bond Trustee for the benefit of the holders 
     of the Bonds.

          b.   The Bond Trustee shall receive an opinion of Bond Counsel that
     such substitution does not adversely affect the exclusion from gross income
     for federal income tax purposes of interest on the Bonds, the Federal
     Securities have been duly and validly assigned and delivered to the Bond
     Trustee for the benefit of the holders of the Bonds and the security
     interest of the Bond Trustee for the benefit of the holders of the Bonds is
     a first priority perfected security interest.

          c.   The Federal Securities shall constitute Available Moneys, as
     defined within the Indenture.

          d.   The Trustee shall receive a report from an Accountant (as defined
     within the Indenture) to the effect that Federal Securities are sufficient
     to pay principal and interest on the Bonds on the scheduled payment dates
     through maturity or on the date fixed for the redemption thereof, without
     any reinvestment thereof.

          e.   If the Bonds are rated, the Trustee shall receive evidence
     satisfactory to the Trustee that such substitution shall not adversely
     affect the then-current rating on the Bonds.

     10.  FURTHER ASSURANCES.  The Credit Enhancement Provider agrees that at
any time and from time to time upon the written request of the Bond Trustee, the
Credit Enhancement Provider will execute and deliver such further documents and
do such further acts and things as the Bond Trustee may reasonably request in
order to effect the purposes of this Pledge Agreement.

     11.  SEVERABILITY.  Any provision of this Pledge Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

     12.  NO WAIVER; REMEDIES CUMULATIVE.  The Bond Trustee shall not by any
act, delay, omission or otherwise be deemed to have waived any of its rights or
remedies hereunder and no waiver shall be valid unless in writing, signed by the
Bond Trustee and 100% of the holders of the Bonds, and then only to the extent
therein set forth.  A waiver by the Bond Trustee of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which the Bond Trustee would otherwise have on any other occasion.  No
failure to exercise nor any delay in exercising on the part of the Bond Trustee,
any right, power or privilege hereunder, shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege hereunder
preclude any other or further exercise thereof or the 



                                      5

<PAGE>

exercise of any right, power or privilege.  The rights and remedies herein 
provided are cumulative and may be exercised singly or concurrently, and are 
not exclusive of any rights or remedies provided by law.

     13.  WAIVERS; AMENDMENTS; APPLICABLE LAW.  None of the terms or provisions
of this Pledge Agreement may be waived, altered, modified or amended except by
an instrument in writing, duly executed by the Bond Trustee and 100% of the
holders of the Bonds.  This Pledge Agreement and all obligations of the Credit
Enhancement Provider and the REMIC Trustee hereunder shall be binding upon the
successors and assigns of their respective successor and assigns, and shall,
together with the rights and remedies of the Bond Trustee hereunder, inure to
the benefit of the Bond Trustee and its successors and assigns.  This Pledge
Agreement shall be governed by, and be construed and interpreted in accordance
with, the laws of the State of Colorado.  The Bond Trustee and the REMIC Trustee
may consent to the amendment of this Pledge Agreement in like manner and
circumstances as provided for the amendment of the Bond Indenture and the REMIC
Indenture, respectively.

     14.  DESIGNATION OF CUSTODIAN.  The Bond Trustee hereby designates the
REMIC Trustee as the Bond Trustee's custodian and agent for the purpose of
holding the Collateral on behalf of the Bond Trustee and with such authority for
taking actions with respect to the Collateral as set forth herein and as may be
directed by, and on behalf of, the Bond Trustee.  The parties hereto acknowledge
that the Bond Trustee may designate any successor REMIC Trustee under the REMIC
Indenture, or any substitute person that the Bond Trustee may elect to
designate, as the Bond Trustee's custodian and agent for the purpose of holding
the Collateral on behalf of the Bond Trustee and with such authority for taking
actions with respect to the Collateral as set forth herein and as may be
directed by, and on behalf of, the Bond Trustee.



                   [BALANCE OF PAGE INTENTIONALLY LEFT BLANK]



                                      6

<PAGE>

     IN WITNESS WHEREOF, the REMIC Trustee, the Credit Enhancement Provider and
the Bond Trustee have caused this Bond Pledge and Security Agreement to be duly
executed and delivered as of the day and year first above written.

                                   BFC GUARANTY CORP., a Delaware corporation


                                   By: /s/ Franklin L. Haney
                                       ---------------------------------------
                                   Name:   Franklin L. Haney
                                   Title:  President


                                   SOUTHTRUST BANK OF ALABAMA, NATIONAL
                                   ASSOCIATION,
                                   as Bond Trustee


                                   By:  /s/ Judith Miller
                                       ---------------------------------------
                                   Name:    Judith Miller
                                   Title:   Vice President - Corporate Trust



                                   SOUTHTRUST BANK OF ALABAMA, NATIONAL
                                   ASSOCIATION,
                                   as REMIC Trustee


                                   By:  /s/ Judith Miller
                                       ---------------------------------------
                                   Name:    Judith Miller
                                   Title:   Vice President - Corporate Trust









                                      7


<PAGE>

                AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY


     This AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY ("Agreement") is made
and entered into this 1st day of March 1996, by and between DOUGLAS COUNTY
DEVELOPMENT CORPORATION, a Colorado Corporation ("Seller") and CASTLE ROCK RANCH
PUBLIC IMPROVEMENTS AUTHORITY, a Colorado nonprofit corporation ("Buyer").

                                    RECITALS

     A.   Seller owns certain real property (the "Property"), which is located
in the County of Douglas, State of Colorado, which is described on EXHIBIT A
attached hereto and made a part hereof by this reference, and all coal, oil,
gas, and other minerals thereon or thereunder, any improvements located thereon
and any personal property used in connection therewith, together with certain
water rights described in EXHIBIT B hereto, collectively referred to as the
"Premises." 

     B.   Buyer desires to purchase and Seller desires to sell the Premises
subject to the terms and conditions of this Agreement.

     Now, therefore, in consideration of the mutual covenants and agreements
hereinafter contained, and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

     1.   Buyer hereby agrees to buy and Seller hereby agrees to sell for the
consideration and on the terms hereinafter provided, the Premises, free and
clear of all liabilities, obligations, mortgages, taxes and special assessments
whether assessed or not, security interests, encumbrances, liens, easements,
restrictions, covenants, and other rights, whatsoever except those specifically
set forth on EXHIBIT C attached hereto and incorporated herein by this
reference.  

     2.   PURCHASE PRICE.  The Purchase Price for the Premises shall be the sum
of $54,550,000.00, which Purchase Price shall be paid in the form of cash or
wire transfer of funds delivered at Closing.

     3.   CLOSING.  The Closing and the transfer of the possession of the
Premises shall take place on March 29, 1996.

     4.   TITLE INSURANCE.  Simultaneously with the execution of this Agreement
by Seller, Seller shall deliver to Buyer, at Seller's sole cost and expense, a
current commitment for issuance of an Owner's Policy of Title Insurance (the
"Title Commitment") issued by First American Title Insurance Company (the "Title
Company"), showing fee simple title to the 

<PAGE>

Property to be in Seller, on ALTA OWNERS Policy Form 1987 (amended 1990), 
together with legible copies of all documents listed as exceptions thereon.  
At Closing, Seller shall provide to Buyer an ALTA form 1987 (amended 1990) 
Owner's Policy of Title Insurance, as amended, in the amount of $54,550,000.00 
with respect to the Property, issued by Title Company and containing only the 
exceptions set forth in this Agreement (the "Title Policy").

     5.   REPRESENTATIONS AND WARRANTIES OF SELLER.  Seller represents and
warrants to Buyer as of the date of this Agreement and on the date of Closing,
the following shall be true and correct:

          a.   SELLER'S AUTHORITY.  The execution, delivery and performance of
     this Agreement by Seller has been duly authorized by all requisite action
     on the part of Seller in accordance with Seller's organizational documents
     and will not conflict with or result in any breach of the terms of Seller's
     organizational documents, or any other instrument or agreement to which
     Seller is a party.

          b.   TITLE TO PREMISES.  Seller has good and marketable title to the
     Premises subject to no mortgage, pledge, lien, encumbrance, encroachment,
     security interest or other charge, except the liens and encumbrances
     identified in Schedule B-2 to the Title Commitments attached to this
     Agreement as EXHIBIT C.

          SPECIAL TAXING DISTRICTS MAY BE SUBJECT TO GENERAL OBLIGATION
     INDEBTEDNESS THAT IS PAID BY REVENUES PRODUCED FROM ANNUAL TAX LEVIES ON
     THE TAXABLE PROPERTY WITHIN SUCH DISTRICTS.  PROPERTY OWNERS IN SUCH
     DISTRICTS MAY BE PLACED AT RISK FOR INCREASED MILL LEVIES AND EXCESSIVE TAX
     BURDENS TO SUPPORT THE SERVICING OF SUCH DEBT WHERE CIRCUMSTANCES ARISE
     RESULTING IN THE INABILITY OF SUCH A DISTRICT TO DISCHARGE SUCH
     INDEBTEDNESS WITHOUT SUCH AN INCREASE IN MILL LEVIES.  BUYER AND OTHER
     PURCHASERS SHOULD INVESTIGATE THE DEBT FINANCING REQUIREMENTS OF THE
     AUTHORIZED GENERAL OBLIGATION INDEBTEDNESS OF SUCH DISTRICTS, EXISTING MILL
     LEVIES OF SUCH DISTRICTS SERVICING SUCH INDEBTEDNESS, AND THE POTENTIAL FOR
     AN INCREASE IN SUCH MILL LEVIES.

          c.   LABOR AND MATERIALS.  All bills for work done or materials
     furnished with respect to the Premises have been paid in full or will be
     discharged by the date and time of Closing.

          d.   LITIGATION.  There is no litigation or other proceeding pending
     or, to the best knowledge of Seller, threatened against or relating to
     Seller's interest in the Premises, nor does Seller know or have any
     reasonable grounds to know of any basis for any such action or of any
     governmental investigation relative to Seller insofar as it pertains to the
     Premises.  There are no pending or threatened proceedings for 

                                     2

<PAGE>

     condemnation by any authority having that right or power, nor are there any
     pending or threatened eminent domain proceedings of which the Premises is
     the object.

          e.   LEGAL COMPLIANCE.  To the best of its knowledge and belief after
     reasonable investigation, Seller has complied with all federal, state and
     local laws, and administrative measures relating to the operation of the
     Premises, including without limitation, zoning and building ordinances of
     the Town of Castle Rock, Colorado.

          f.   TAXES AND ASSESSMENTS.  All general taxes payable with respect to
     calendar year 1995 and prior years, shall have been paid on or prior to
     Closing.  Other than as specifically set forth in EXHIBIT C hereto, all
     assessments due prior to Closing shall have been paid on or prior to
     Closing.  Seller knows of no public improvement which has been ordered to
     be made and/or which has not heretofore been completed, assessed and paid
     for.

          g.   MATERIAL CONTRACTS.  To the best of Seller's knowledge and belief
     there are no other contracts in existence for the performance of services
     or the provision of materials to the Premises or for any operation or
     management of the Premises.

     Other than as expressly set forth herein, Seller makes no warranties with
respect to the Premises or the condition thereof.

     6.   CONDITION AND USE OF PREMISES.  From and after the date of Seller's
execution hereof, Seller shall not grant or convey any easement, lease, license,
permit or any other legal or beneficial interest in or to the Premises without
the prior written consent of Buyer, nor shall Seller violate, or allow the
violation of, any law, ordinance, rule or regulation affecting the Premises. 
Seller shall do or cause to be done all things reasonably within its control to
preserve intact and unimpaired any and all easements, grants, appurtenances,
privileges and licenses in favor of or constituting any portion of the Premises.

     7.   RISK OF LOSS - CONDEMNATION.  The risk of loss or damage to the
Premises until the day of Closing is assumed by Seller.  In the event that any
portion of the Property shall be taken in condemnation or under the right of
eminent domain prior to Closing, Buyer at its sole option may: (i) terminate
this Agreement by written notice to Seller within five (5) days of Buyer's
receipt of notice of such condemnation or eminent domain proceeding, in which
case all monies received hereunder shall be returned to Buyer and the parties
shall have no further rights against each other; or (ii) proceed to Closing and
apply the proceeds received from such condemnation or eminent domain proceeding
against the Purchase Price of the Premises.

     8.   TERMINATION OF AGREEMENT AND REMEDIES.

          a.   BUYER'S DEFAULT.  In the event Buyer shall fail to perform
     Buyer's obligations hereunder, Seller shall have the option to waive such
     default in writing or to terminate this Agreement by written notice to
     Buyer.  Upon termination, the parties shall be discharged from any further
     obligations and liabilities hereunder.

                                     3

<PAGE>

          b.   SELLER'S DEFAULT.  In the event that Seller shall fail to perform
     Seller's obligations hereunder, Buyer shall have the option to seek
     specific performance, waive such default, or terminate this Agreement by
     written notice to Seller and seek damages for Seller's breach.

     9.   TRANSACTIONS AT CLOSING.  The following transactions shall occur at
Closing:

          a.   AUTHORITY.  Seller shall deliver to Buyer a certified copy of
     resolutions adopted by its board of directors authorizing and adopting 
     the execution, delivery and performance of this Agreement.

          b.   DEED TO PREMISES.  A special warranty deed in form satisfactory
     to counsel for Buyer shall be executed and delivered to Buyer by Seller. 
     The special warranty deed shall convey title to the Premises free and clear
     of all liens and encumbrances, and subject only to real estate taxes for
     the year 1996, which are not yet due, those matters set forth in Schedule
     B-2 to EXHIBIT C of record as of the Closing Date which are not objected by
     Buyer or previously approved by Buyer pursuant hereto and any applicable
     zoning, subdivision or other laws or regulations.  

          c.   BILL OF SALE.  Seller shall execute and deliver to Buyer a bill
     of sale without warranties covering any personal property incidental to
     operation of the Premises, tangible and intangible (including an assignment
     of all warranties and guaranties affecting the Premises and the trade name
     or names under which the Premises are known), owned by Seller and located
     at the Premises, stored at another location, or affecting the Premises in
     any way.

          d.   CASH.  There shall be paid to Seller by Buyer the sum of
     $54,550,000.00.

          e.   DOCUMENTARY FEE.  Buyer shall pay all sums necessary for the
     documentary or transfer fee required for the recordation of the special
     warranty deeds under the laws of the State of Colorado.

          f.   UNIFORM COMMERCIAL CODE CERTIFICATE.  Seller shall deliver to
     Buyer customarily accepted certificates revealing that there are no
     financing statements affecting the Premises except those approved by Buyer.

          g.   POSSESSION OF PREMISES.  At Closing, Seller shall deliver
     possession of the Premises to Buyer.

          h.   TITLE INSURANCE.  At Closing, Seller shall deliver the Title
     Policy to Buyer.

          i.   PRORATIONS.  No items shall be prorated to the date of Closing. 
     Buyer shall be responsible for all general taxes (including without
     limitation, real and personal property taxes) first becoming due and
     payable after the date of Closing.  Seller agrees 

                                     4

<PAGE>

     to pay at Closing any utility bills and charges accruing up to and
     including the date of Closing.

     10.  NOTICES.  All notices required herein shall be in writing and shall be
sufficient if delivered personally in return for a receipt of if sent by
registered or certified United States mail, return receipt requested, postage
prepaid, addressed as described below or to such other address as the party
concerned may substitute by written notice to the other as provided herein.  All
notices given by mail shall be deemed to be received 3 days after such notice is
deposited in the United States mail.

          TO THE BUYER:  Castle Rock Ranch Public Improvements Authority
                         Attention: Mr. C. Roger Addlesperger
                         Stanford Place III, Suite 902
                         4582 South Ulster Street Parkway
                         Denver, Colorado 80237

          TO THE SELLER: Mr. Franklin L. Haney
                         Douglas County Development Corporation
                         600 Chestnut Street, Suite 200
                         Chattanooga, Tennessee 37450

     11.  BROKER'S FEE.  Seller and Buyer each represent to the other that no
broker's, finder's or similar fee or commission is due in connection with the
transactions contemplated herein and hereby agrees to indemnify and hold
harmless the other from any claim, expense or cost (including attorneys' fees
whether suit be brought or not) resulting from any claim for such fee or
commission through the indemnifying party.

     12.  MISCELLANEOUS.

          a.   ATTORNEYS' FEES.  In the event of any litigation between Buyer or
     Seller concerning the transactions contemplated herein, the prevailing
     party in whose full favor final nonappealable judgment is rendered shall be
     entitled to court costs and reasonable attorneys' fees.

          b.   SURVIVAL OF REPRESENTATIONS, WARRANTIES AND OTHER OBLIGATIONS. 
     The representations and warranties of Buyer and Seller as made herein shall
     survive the Closing and delivery of the deed.  Further, all obligations of
     the parties pursuant hereto which by their terms will or may be performed
     following Closing shall be deemed to be conditions subsequent and shall be
     performed following Closing, and the parties' rights and obligations with
     respect thereto shall fully survive the Closing pursuant hereto.

          c.   ENTIRE AGREEMENT.  This Agreement embodies all of the
     representations, warranties and agreements of the parties, and it may not
     be altered or modified, except by an instrument in writing signed by both
     parties.

                                     5

<PAGE>

          d.   BENEFIT OF AGREEMENT.  This Agreement shall be binding upon and
     inure to the benefit of the parties and their respective heirs, successors
     and permitted assigns.

          e.   GOVERNING LAW.  This Agreement shall be governed by and construed
     in accordance with the laws of the State of Colorado applicable to
     contracts made and performed entirely therein.

          f.   TIME OF THE ESSENCE.  Time shall be of the essence with respect
     to the performance by the parties of their respective obligations
     hereunder.

          g.   CAPTIONS.  The captions of the paragraphs of this Agreement are
     inserted only as a matter of convenience and for reference, and in no way
     define, limit, or describe the scope of this Agreement, or the intent of
     any provision hereof.

          h.   SEVERABILITY.  In case any one or more of the provisions
     contained in this Agreement shall for any reason be held to be invalid,
     illegal, or unenforceable in any respect, such invalidity, illegality, or
     unenforceability shall not affect any other provision hereof, and this
     Agreement shall be construed as if such invalid, illegal, or unenforceable
     provision had never been contained herein.

          i.   FURTHER ASSURANCES.  Each party agrees that at the request of the
     other party it will at any time hereafter make such further assurances and
     execute or cause to be executed such further instruments as may be
     reasonably requested by the other party in order that this Agreement may be
     fully performed in accordance with its intent and provisions.

          j.   CONSIDERATION.  Each party agrees that the covenants and premises
     contained herein are good and sufficient consideration for the respective
     obligations required hereunder.

          k.   COMPLIANCE WITH LAWS.  In performing their respective obligations
     pursuant hereto, Buyer and Seller shall comply with all applicable laws,
     rules and regulations, including, without limitation, those pertaining to
     Buyer in its form as a quasi-municipal corporation in the State of
     Colorado.


                   [BALANCE OF PAGE LEFT INTENTIONALLY BLANK] 

                                     6

<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Agreement on the dates
specified below.

                                       SELLER:

                                       DOUGLAS COUNTY DEVELOPMENT CORPORATION


                                       By:   Franklin L. Haney
                                           --------------------------------
                                       Title:  President
                                              -----------------------------


                                       BUYER:

                                       CASTLE ROCK RANCH PUBLIC 
                                       IMPROVEMENTS AUTHORITY


                                       By:   C. Roger Addlesperger
                                           --------------------------------
                                       Title:  President
                                              -----------------------------

<PAGE>

                                    EXHIBIT A

                       (Legal description of the Premises)







                                     A-1

<PAGE>

                                   EXHIBIT A

GOLF COURSE PARCEL A:

A parcel of land located in Sections 28, 29 and 21, all in Township 8 South 
Range 67 West of the Sixth Principal Meridian, Douglas County, Colorado, being 
more particularly described as follows:

BEGINNING at the North quarter corner of said Section 29 whence the Northerly 
line of the East half of Section 29 bears S 88 DEG. 37'18" E a distance of 
2661.22 feet; thence S 88 DEG. 37'18" E along said Northerly line a distance 
of 2661.22 feet; thence N 00 DEG. 23'27" E along the Westerly line of Section 21
a distance of 782.32 feet; thence S 37 DEG. 02'12" E a distance of 2474.11 
feet; thence the following four courses along Dawson Ridge Filing A;

     1.  S 67 DEG. 47'53" W a distance of 128.79 feet;
     2.  S 39 DEG. 28'53" W a distance of 108.41 feet;
     3.  S 58 DEG. 24'13" E a distance of 228.53 feet;
     4.  N 83 DEG. 33'27" E a distance of 170.37 feet;

thence S 37 DEG. 02'12" E a distance of 1105.69 feet;
thence S 21 DEG. 08'57" E a distance of 2657.54 feet;
thence the following two courses along a parcel of land described by Book 695 
at Page 459 of the Douglas County Clerk and Recorder's Office:

     1.  N 00 DEG. 19'26" W a distance of 1262.69 feet
     2.  N 89 DEG. 22'02" W a distance of 4017.50 feet;

thence N 00 DEG. 14'06" W along the Westerly line of the East half of Section 
29 a distance of 3543.76 feet to the point of beginning;

EXCEPTING from the above parcel the following parcels:

Dawson Ridge Filings A and B, all dedicated street rights of way;

ALSO EXCEPTING the following one acre parcel described as follows:

A parcel of land located in the East half of Section 29, Township 8 South, 
Range 67 West of the Sixth Principal Meridian, Douglas County, Colorado, being 
more particularly described as follows:

Commencing at the North quarter corner of said Section 29;
thence South 00 degrees 04 minutes 06 seconds East along the westerly line of 
said East half of Section 29, a distance of 3267.55 feet to the point of 
beginning;


<PAGE>

thence North 89 degrees 45 minutes 54 seconds East a distance of 208.71 feet;
thence South 00 degrees 14 minutes 06 seconds East a distance of 208.71 feet;
thence South 89 degrees 45 minutes 54 seconds West a distance of 208.71 feet;
thence North 00 degrees 14 minutes 06 seconds West along said westerly line a 
distance of 208.71 feet to the point of Beginning.

County of Douglas,
State of Colorado

GOLF COURSE PARCEL B:

A Parcel of land lying in sections 22, 27, 28, 33 & 34, all in Township 8 
South Range 67 West of the Sixth Principal Meridian, Douglas County, Colorado, 
being more particularly described as follows:

COMMENCING at the Northeast corner of said Section 28 whence the Southeast 
corner of said Section 28 bears S 00 DEG. 22'18" E a distance of 5302.75 feet;
thence N 53 DEG. 05'33" E a distance of 2071.05 feet to the point of beginning;
thence S 84 DEG. 49'36" E a distance of 790.91 feet;
thence S 15 DEG. 43'30" W along the Westerly right of way line of the A.T. & 
S.F. Railroad a distance of 5019.66 feet;
thence along the following three courses along a parcel of land described by 
Book 1095 at Page 629 of the Douglas County Clerk and Recorder:

     1.  N 89 DEG. 22'05" W a distance of 2386.46 feet;
     2.  S 00 DEG. 19'29" E a distance of 308.79 feet;
     3.  S 89 DEG. 22'05" E a distance of 2298.04 feet;

thence S 15 DEG. 43'30" W along the Westerly right of way line of the A.T. & 
S.F. Railroad a distance of 2425.47 feet;
thence N 89 DEG. 48'11" W a distance of 678.73 feet;
thence S 00 DEG. 44'59" W a distance of 600.54 feet;
thence S 89 DEG. 03'33" E a distance of 515.85 feet;
thence S 15 DEG. 43'30" W a distance of 548.74 feet;
thence N 00 DEG. 23'36" E a distance of 226.92 feet;
thence S 15 DEG. 45'37" W a distance of 788.62 feet;
thence N 89 DEG. 09'35" W, along the South line of the North half of Section 
33, a distance of 1062.26 feet;
thence N 00 DEG. 50'25" E a distance of 1475.80 feet;
thence N 56 DEG. 57'07" W a distance of 3202.16 feet;
thence N 21 DEG. 08'57" W a distance of 2657.54 feet;
thence along the following fifteen courses along Dawson Ridge Filing B;

                                     2

<PAGE>

     1.  N 77 DEG. 53'15" E, non-tangent to the following described curve, a 
         distance 42.72 feet;
     2.  along the arc of a curve to the right, having a central angle of 89 
         DEG. 23'40", a radius of 41.00 feet, the chord of which bears S 26 DEG.
         49'54" W a distance of 57.68 feet and an arc length of 63.97 feet;
     3.  N 71 DEG. 31'44" E, tangent to the previously described curve, a 
         distance of 146.27 feet;
     4.  N 70 DEG. 13'51" E a distance of 110.35 feet;
     5.  N 71 DEG. 31'4" E, tangent to the following described curve, a 
         distance of 160.53 feet;
     6.  along the arc of a curve to the right, having a central angle of 51 
         DEG. 49'07", a radius of 908.07 feet, the chord of which bears N 82
         DEG. 33'43" W a distance of 793.56 feet and an arc length of 821.26 
         feet;
     7.  S 51 DEG. 57'48" E, tangent to the previously and following described 
         curves, a distance of 105.49 feet;
     8.  along the arc of a curve to the right, having a central angle of 01 
         DEG. 47'42", a radius of 905.57 feet, the chord of which bears N 49 
         DEG. 05'17" W a distance of 28.37 feet and an arc length of 28.37 feet;
     9.  S 48 DEG. 11'26" E, tangent to the previously and following described 
         curves, a distance of 101.79 feet;
    10.  along the arc of a curve to the right, having a central angle of 87 
         DEG. 30'40", a radius of 40.00 feet, the chord of which bears S 04 DEG.
         26'06" E a distance of 55.33 feet and an arc length of 61.09 feet;
    11.  S 47 DEG. 39'40" E non-tangent to the previously and following 
         described curves, a distance of 120.18 feet;
    12.  along the arc of a curve to the right, having a central angle of 92 
         DEG. 40'47", a radius of 40.00 feet, the chord of which bears N 85 DEG.
         27'55" E a distance of 57.88 feet and an arc length of 64.70 feet;
    13.  N 41 DEG. 48'34" E, non-tangent to the previously and following 
         described curves, a distance of 80.00 feet;
    14.  along the arc of a curve to the right, having a central angle of 92 
         DEG. 41'18", a radius of 40.00 feet, the chord of which bears N 01 DEG.
         50'31" W a distance of 57.88 feet and an arc length of 64.71 feet to a
         point of compound curvature;
    15.  along a curve, to the right having a central angle of 09 DEG. 19'56", 
         a radius of 1740.00 feet, the chord of which bears N 49 DEG. 10'21" E
         a distance of 283.09 feet and an arc length of 283.40 feet;

thence along the following five courses along Dawson Ridge Filing A:

     1.  S 36 DEG. 09'41" E, non-tangent to the previously described curve, a 
         distance of 10.00 feet;
     2.  N 53 DEG. 50'19" E, tangent to the following described curve, a 
distance of 1060.41 feet;

                                     3

<PAGE>

     3.  along the arc of a curve to the left having a central angle of 21 
         DEG. 00'00", a radius of 2170.00 feet, the chord of which bears N 43
         DEG. 20'19" E, a distance of 790.90 feet and an arc length of 795.35
         feet;
     4.  N 32 DEG. 50'19" E, tangent to the previously and following described 
         curves, a distance of 2182.25 feet;
     5.  along the arc of a curve to the left, having a central angle of 12 
         DEG. 18'29", a radius of 1870.00 feet, the chord of which bears N 26
         DEG. 41'04" E a distance of 400.94 feet and an arc length of 401.71
         feet to the point of beginning;

EXCEPTING from the above parcel the following two parcels:

Exception 3:

A parcel of land located in a portion of Section 28, Township 8 South, Range 
67 West of the Sixth Principal Meridian, City of Castle Rock, Douglas County, 
Colorado, being more particularly described as follows:

COMMENCING at the Southeast corner of said Section 28, whence the Northeast 
corner of said Section 28 bears N 00 DEG. 22'18" W a distance of 5302.75 feet;
thence N 62 DEG. 23'09" W a distance of 660.85 feet, to the point of beginning;
thence S 63 DEG. 50'19" W a distance of 144.71 feet;
thence N 26 DEG. 09'41" W a distance of 208.00 feet;
thence N 63 DEG. 50'19" E, non-tangent to the following described curve, a 
distance of 251.43 feet;

thence along the arc of a curve to the right, having a central angle of 29 
DEG. 26'30", a radius of 460.00 feet, the chord of which bears S 00 DEG. 
59'57" W a distance of 233.78 feet and an arc length of 236.37 feet to the 
point of beginning;

Exception 4:

A parcel of land located in a portion of Section 28, Township 8 South, Range 
67 West of the Sixth Principal Meridian, City of Castle Rock, Douglas County, 
Colorado, being more particularly described as follows:

COMMENCING at the Southwest corner of said Section 28, whence the North corner 
of said Section 28 bears N 00 DEG. 11'08" W a distance of 5299.57 feet;
thence N 58 DEG. 37'49" E a distance of 3415.73 feet, to the point of 
beginning;
thence N 04 DEG. 01'05" E a distance of 208.84 feet;
thence S 87 DEG. 59'38" E a distance of 208.71 feet;
thence S 04 DEG. 01'05" W a distance of 208.84 feet;
thence N 87 DEG. 59'38" W a distance of 208.71 feet to the point of beginning

                                     4


<PAGE>




                                    EXHIBIT B

                          (Description of Water Rights)
















                                    B-1


<PAGE>

                                   EXHIBIT B

                         DESCRIPTION OF WATER RIGHTS


     The right to withdraw up to 900 acre-feet of groundwater per year from 
the Lower Dawson, Denver, Arapahoe, and Laramie-Fox Hills Aquifers underlying 
the aforementioned Property, said groundwater to be withdrawn first from said 
Laramie-Fox Hills Aquifer.  To the extent said Laramie-Fox Hills Aquifer is 
not adequate to supply the entire 900 acre-feet of allowed withdrawals, then 
the second priority source shall be said Arapahoe Aquifer.  To the extent 
both the Laramie-Fox Hills and Arapahoe Aquifers are not adequate to supply 
the entire amount of allowed withdrawals, then the third priority source 
shall be said Denver Aquifer.  To the extent the foregoing three sources are 
inadequate to supply the entire amount of allowed withdrawals, then the 
fourth priority source shall be said Lower Dawson Aquifer.




<PAGE>

                                    EXHIBIT C

                    (Exceptions to Title as to the Premises)






                                      C-1

<PAGE>

6.  Taxes due and payable after March 29, 1996; and any tax, special 
    assessments, charge or lien imposed for water or sewer service, or for 
    any other special taxing district, due after March 29, 1996.

7.  The right of the proprietor of a vein or lode to extract or remove his 
    ore, should the same be found to penetrate or intersect the premises 
    thereby granted and rights of way for ditches and canals as reserved in 
    United States patent recorded December 17, 1891 in Book X at Page 37, 
    and any and all assignments thereof or interests therein.

     (Affects the NW 1/4 of Section 33.)

8.  The right of the proprietor of a vein or lode to extract or remove his 
    ore, should the same be found to penetrate or intersect the premises 
    thereby granted and rights of way for ditches and canals as reserved in 
    United States patent recorded April 25, 1896 in Book 12 at Page 85, and 
    any and all assignments thereof or interests therein.

    (Affects the S 1/2 of the S 1/2 of Section 29.)

(continued)






SCHEDULE B - Section 2 
Commitment  (NA)

<PAGE>

SCHEDULE B, PART 2 - EXCEPTIONS (CONT'D)                    FILE NUMBER: 17776 
- -------------------------------------------------------------------------------

 9.  The right of the proprietor of a vein or lode to extract or remove his 
     ore, should the same be found to penetrate or intersect the premises 
     thereby granted and rights of way for ditches and canals as reserved in 
     United states patent recorded February 10, 1899 in Book X at Page 1514, 
     and any and all assignments thereof or interests therein.

     (Affects the W 1/2 of the SE 1/4 of Section 29.)

10.  The right of the proprietor of a vein or lode to extract or remove his 
     ore, should the same be found to penetrate or intersect the premises 
     thereby granted and rights of way for ditches and canals as reserved in 
     United States patent recorded April 25, 1898 in Book 12 at Page 85, and 
     any and all assignments thereof or interests therein.

     (Affects the S 1/2 of the S 1/2 of Section 21.)

11.  An easement for a right of way and incidental purposes granted to 
     Mountain States Telephone and Telegraph Company by the instrument 
     recorded September 18, 1923 in  Book 72 at Page 452, upon the terms and 
     conditions set forth in the instrument, over a portion of the land.

     (Affects Section 34.)

12.  An easement for a right of way and incidental purposes granted to 
     Mountain States Telephone and Telegraph Company by the instrument 
     recorded September 18, 1923 in Book 72 at Page 453, upon the terms and 
     conditions set forth in the instrument, over a portion of the land.

     (Affects Section 27.)

10.  Easements and rights of way in favor of American Telephone and Telegraph 
     Company as granted by instrument recorded July 5, 1951 in Book 103 at Page 
     264.

     (Affects Section 27, Section 33 and Section 34.)

11.  Easements and rights of way in favor of American Telephone and Telegraph 
     Company as granted by instrument recorded August 31, 1951 in book 103 at 
     Page 324.

     (Affects Section 27.)

12.  Each and every right or rights of access to and from any part of the 
     right of way for Colorado State Highway No. 1, from and to any part of 
     subject property abutting upon said highway, as granted to The Department 
     of Highways, State of Colorado, by Deed recorded December 4, 1951 in Book 
     103 at Page 406.

     (Affects Section 27.)

(continued)

<PAGE>

SCHEDULE B, PART 2 - EXCEPTIONS (CONT'D)                    FILE NUMBER: 17776 
- -------------------------------------------------------------------------------

13.  An easement for communication line facilities and incidental purposes 
     granted to Mountain States Telephone and Telegraph Company by the 
     instrument recorded July 24, 1968 in Book 185 at Page 232, upon the terms 
     and conditions set forth in the instrument, over a portion of the land.

14.  The effect of the inclusion of the subject property in the Castle Rock 
     Fire Protection District, as disclosed by the instrument recorded 
     September 12, 1980 in Book 393 at Page 836 and September 16, 1980 in 
     Book 394 at Page 93.

15.  An easement for a roadway for ingress and egress and incidental purposes 
     granted to Ernest H. Lowell and Mildred G. Lowell by the instrument 
     recorded June 7, 1983 in Book 477 at Page 866.

16.  Covenants, conditions and restrictions, which so not include a forfeiture 
     or reverter clause, and any and all supplements, amendments, and 
     annexations thereto, set forth in the instrument(s) recorded June 14, 1983
     in Book 476 at Page 732, but omitting any covenant or restriction based on 
     race, color, religion, sex, handicap, familial status, or national  origin.

17.  Terms, conditions, provisions, agreements and obligations specified under 
     the Water Agreement recorded July 18, 1983 in Book 483 at Page 282.

18.  Any and all wells and well rights, ditches and ditch rights, reservoirs and
     reservoir rights, as evidenced by instruments recorded July 18, 1983 in 
     Book 483 at Pages 312, 355, 367, 382, 384, 396, 413 and 425.

19.  Covenants, conditions and restrictions, which do not include a forfeiture
     or reverter clause, and any and all supplements, amendments, and 
     annexations thereto, set forth in the instrument(s) recorded July 18, 
     1983 in Book 483 at Page 340, but omitting any covenant or restriction 
     based on race, color, religion, sex, handicap, familial status, or national
     origin.

20.  Terms, conditions, provisions, agreements and obligations specified under 
     the Ordinance No. 84-33 recorded January 30, 1984 in Book 554 at Page 427.

21.  Restrictions, conditions, stipulations and easements imposed upon subject 
     property by Castle Rock Ranch P.U.D. Preliminary Plan recorded December 
     18, 1984 Reception No. 343350.

22.  Terms, conditions, provisions, agreements and obligations specified 
     under the Annexation and Development Contract recorded December 18, 1984 
     in Book 554 at Page 543.

23.  Covenants, conditions, lien rights and restrictions which do not include a 
     forfeiture or reverter clause, as set forth in the Declaration recorded 
     August 18, 1986 in Book 659 at Page 785, but omitting any covenant or 
     restriction based on race, color, religion, sex, handicap, familial 
     status, or national origin.


<PAGE>

SCHEDULE B, PART 2 - EXCEPTIONS (CONT'D)                    FILE NUMBER: 17776 
- -------------------------------------------------------------------------------

24.  Restrictions, conditions, stipulations and easements imposed upon subject 
     property by Dawson Ridge Pre-P.U.D. Site Plan recorded November 20, 1986 
     at Reception No. 8625697.

25.  Terms, conditions, provisions, agreements and obligations specified 
     under the Ordinance N. 86-19 recorded November 20, 1986 in book 680 at
     Page 955.

26.  Terms, conditions, provisions, agreements and obligations specified 
     under the Draft Master Plan recorded December 10, 1986 in Book 686 at 
     Page 630.

27.  Covenants, conditions and restrictions, which do not include a 
     forfeiture or reverter clause, and any and all supplements, amendments, 
     and annexations thereto, set forth in the instrument(s) recorded August 
     18, 1986 in Book 659 at Page 785, but omitting any covenant or 
     restriction based on race, color, religion, sex, handicap, familial 
     status, or national origin.

     NOTE:  Amendment of said covenants, conditions and restrictions by an 
     instrument recorded April 22, 1987 in Book 715 at Page 692.

28.  Terms, conditions, provisions, agreements and obligations specified 
     under the Ordinance No. 86-19 recorded November 20, 1986 in Book 680
     at Page 955.

29.  Terms, conditions, provisions, agreements and obligations specified 
     under the By-Laws of the Dawson Ridge Community Association recorded 
     February 13, 1987 in Book 700 at Page 799.

28.  Restrictions, conditions, stipulations, easements, notes and rights of 
     way imposed upon subject property by the plat of Dawson Ridge Filing A 
     recorded March 18, 1987 at Reception No., 8707610.

     NOTE: Affidavit of Correction recorded October 5, 1988 in Book 818 at 
     Page 272.

29.  Restrictions, conditions, stipulations and easements imposed upon subject
     property by Dawson Ridge Filing A Final P.U.D. recorded March 18, 1987 
     at Reception No. 8707611.

30.  Restrictions, conditions, stipulations, easements, notes and rights of 
     way imposed upon subject property by the plat of Dawson Ridge Filing B 
     recorded March 18, 1987 at Reception No. 8707512.

     NOTE: Affidavit of Correction recorded October 5, 1988 in Book 818 at 
     Page 274.

31.  Restrictions, conditions, stipulations and easements imposed upon 
     subject property by Dawson Ridge Filing B Final P.U.D. Site Plan recorded 
     March 18, 1987 at Reception No. 8907613.

(continued)

<PAGE>

SCHEDULE B, PART 2 - EXCEPTIONS (CONT'D)                    FILE NUMBER: 17776 
- -------------------------------------------------------------------------------

32.  Restrictions, conditions, stipulations, easements, notes and rights 
     of way imposed upon subject property by the plat of Dawson Ridge Filing 
     No. 11 recorded March 19, 1987 at Reception No. 8707614.

     NOTE:  Affidavit of Correction recorded October 5, 1988 in Book 818 at 
     Page 276.

33.  Restrictions, conditions, stipulations and easements imposed upon subject 
     property by Dawson Ridge Filing No. 11 Final Site Plan recorded March 18, 
     1987 at Reception No. 8707615.

34.  Easements and Rights of way for People's Natural Gas Company, equipment, 
     mains and appurtenances, various underground  water mains connecting from
     the existing wells to water treatment and storage facilities as 
     disclosed by instrument recorded August 7, 1987 in Book 739 at Page 979.

35.  Terms, conditions, provisions, agreements and obligations specified 
     under the contracts by and between Dawson Ridge Metropolitan Districts 
     1, 2, 3, 4 and 5 recorded February 15, 1988 in Book 841 at Pages 551, 
     558, 561 and 564.

36.  Terms, conditions, provisions, agreements and obligations specified 
     under the facilities development fee agreement recorded February 29, 1989 
     in Book 842 at Page 911.

37.  Terms, conditions, provisions, agreements and obligations specified 
     under the Agreement for Development of Water Rights recorded August 28, 
     1989 in Book 869 at Page 939.

38.  Terms, conditions, provisions agreements and obligations specified
     under the Agreement for Development of Water Rights recorded August 28, 
     1989 in Book 869 at Page 992.

39.  Item 39 is hereby deleted.

40.  Terms, conditions, provisions, agreements and obligations specified 
     under the suspension Agreement recorded October 21, 1992 in Book 1092 at 
     Page 1719 and rerecorded December 7, 1992 in Book 1100 at Page 117.

41.  The effect of the inclusion of the subject property in the Special 
     District, as disclosed by the instrument recorded January 11, 1993 in 
     Book 1106 at Page 1284.


 

<PAGE>


                           INTERGOVERNMENTAL AGREEMENT

     This Intergovernmental Agreement (the "Intergovernmental Agreement") is
made and entered into as of this 1st day of March, 1996, by and between DAWSON
RIDGE METROPOLITAN DISTRICT NO. 1 ("District 1"), DAWSON RIDGE METROPOLITAN
DISTRICT NO. 2 ("District 2"), DAWSON RIDGE METROPOLITAN DISTRICT NO. 3
("District 3"), DAWSON RIDGE METROPOLITAN DISTRICT NO. 4 ("District 4" and
together with Districts 1 through 3, the "Related Districts"), and DAWSON RIDGE
METROPOLITAN DISTRICT NO. 5 ("District 5" and together with the Related
Districts, the "Districts"), all quasi-municipal corporations and political
subdivisions of the State of Colorado.

                                    RECITALS

     WHEREAS, among the purposes for which each of the Districts was formed are
the provision of potable water, sanitation, street, street lighting, irrigation
water, storm drainage, park and recreation, and traffic and safety protection
facilities and services; and

     WHEREAS, pursuant to Colorado Constitution Article XIV, Section 18(2)(a),
and C.R.S. Section 29-1-203, as amended, the Districts may cooperate or contract
with each other to provide any function, service, or facility lawfully
authorized to each, and any such contract may provide for the sharing of costs,
the imposition of taxes, or the incurring of debt; and

     WHEREAS, each of the Districts was organized pursuant to Title 32, Colorado
Revised Statutes, pursuant to which a resolution of approval of the petitions to
the District Court for each District was obtained from the Town of Castle Rock,
Colorado; and

     WHEREAS, each District was organized with the approval of the Town of
Castle Rock, State of Colorado, and with the approval of their respective
electors, fully contemplating cooperation among the Districts as described in
their respective Service Plans; and

     WHEREAS, each District's respective electors have approved the obligations
incurred hereunder at elections held November 7, 1995; and

     WHEREAS, the Districts agree that certain public improvements are needed by
the Districts and will benefit the electors of more than one District in terms
of costs, quality and level of service; and

     WHEREAS, each District has determined that cooperation among the Districts
in the financing and acquisition of the facilities herein described is in the
best interest of the Districts, and that the financing and acquisition of such
facilities is of common concern and benefit to the Districts; and



                                      1

<PAGE>

     WHEREAS, Castle Rock Ranch Public Improvements Authority, a nonprofit
corporation organized under the laws of the State of Colorado and a corporate
instrumentality of District 5 (the "Corporation"), proposes to issue and sell
$66,975,000 aggregate principal amount of its Public Facilities Revenue Bonds,
Series 1996 (the "Bonds") for the purpose of acquiring certain real property and
water rights (the "Property") located within or having a substantial connection
with District 5 and each of the Related Districts; and 

     WHEREAS, the Bonds will be issued pursuant to an Indenture of Trust, dated
as of the date hereof (the "Indenture") between the Corporation and SouthTrust
Bank of Alabama, National Association (the "Trustee"); and

     WHEREAS, the Bonds will be additionally secured by certain collateralized
Credit Enhancement (as defined within the Indenture) provided by the Credit
Enhancement Provider (as defined within the Indenture); and

     WHEREAS, the obligations of the Corporation to reimburse the Credit
Enhancement Provider are evidenced by a Reimbursement Agreement, dated as of the
date hereof (the "Reimbursement Agreement") between the Corporation and the
Credit Enhancement Provider; and

     WHEREAS, the obligations of the Corporation under the Reimbursement
Agreement and the Indenture are secured by a Deed of Trust, Security Agreement,
Financing Statement and Assignment of Rents and Leases, dated as of the date
hereof (the "Deed of Trust") from the Corporation for the benefit of the Trustee
and the Credit Enhancement Provider; and

     WHEREAS, District 5 shall execute and deliver an Operating Agreement, dated
as of the date hereof (the "Operating Agreement") between the Corporation and
District 5, pursuant to which District 5 shall be obligated, subject to the
terms thereof, to pay the following ("Operating Agreement Payments"): (i) all
Operations and Maintenance Expenses, and (ii) deficiencies of Revenue required
to pay obligations secured by the Deed of Trust;

     NOW, THEREFORE, in consideration of the mutual promises and benefits herein
expressed, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby freely acknowledged, the Districts covenant and
agree as follows:



                                      2

<PAGE>

                                    ARTICLE 1

                         DEFINITIONS AND INTERPRETATIONS

     Section 1.1.   DEFINITIONS.  As used herein, capitalized terms shall have
the respective meanings provided in the Recitals hereto or in the Indenture, the
Operating Agreement or the Deed of Trust, and the following capitalized terms
shall have the respective meanings set forth below, except in each case where
the context indicates otherwise:

          ARBITRATOR shall mean the person chosen pursuant to this
Intergovernmental Agreement to settle disputes on matters arising under the
provisions of this Intergovernmental Agreement.

          DEVELOPMENT AGREEMENT shall mean the Development Agreement, dated as
of the date hereof, between the Corporation and Douglas County Development
Corporation, and any and all similar agreements executed by owners of property
within the Districts.

          DISTRICT shall mean each of the Dawson Ridge Metropolitan Districts
referred to above, which are all quasi-municipal corporations and political
subdivisions of the State of Colorado.

          DISTRICT REPRESENTATIVE shall mean the President of each respective
District and any other party designated by Resolution of the Board of Directors
of such District to act as District Representative hereunder.

          EXPENSE OBLIGATION shall mean, as to each District the obligation of
such District to pay its Proportionate Share of Operations and Maintenance
Expenses.

          FINANCING OBLIGATIONS shall mean the obligations which arise pursuant
to the provisions of this Intergovernmental Agreement as evidenced by the
execution of this Intergovernmental Agreement by each District.

          PROPERTY COSTS shall mean each and every cost incurred by the
Corporation in connection with the acquisition of the Property and the issuance
of the Bonds, including the costs of materials, labor, change orders,
engineering, architecture and engineering, testing, soil inspection, and legal,
architectural, financial, inspection and other professional fees, together with
any site, right-of-way, or easement acquisition costs, and any other costs,
expenses or expenditures associated with the furtherance of the Property, to the
extent such costs are permitted by the Indenture.

          PROPORTIONATE SHARE shall mean shares calculated in accordance with
Section 6.3 hereof.



                                      3

<PAGE>

          REVENUE OBLIGATIONS shall mean, as to each District, the obligation of
such District to pay its Proportionate Share of deficiencies required to pay
obligations secured by the Deed of Trust.

          SERVICE PLAN.  Shall mean the Service Plan filed by each District with
the Douglas County District Court, which, among other things, identifies the
facilities to be constructed by the Districts, as the same may be amended from
time to time.

     Section 1.2.  INTERPRETATION.  In this Intergovernmental Agreement, unless
the context otherwise requires:

          1.2.1  The terms "herein," "hereunder," "hereby," "hereto,"
"hereof" and other similar terms, refer to this Intergovernmental Agreement as a
whole and not to any particular article, section or subdivision hereof; the term
"heretofore" means before the date of execution of the Intergovernmental
Agreement, the term "now" means at the date of execution of this
Intergovernmental Agreement, and the term "hereafter" means after the date of
execution of this Intergovernmental Agreement.

          1.2.2  All definitions, terms, and words shall include both the
singular and the plural.

          1.2.3  Words of the masculine gender include correlative words of
the feminine and neuter genders, and words importing the singular number include
the plural number and vice versa.

          1.2.4  The captions or headings of this Intergovernmental Agreement
are for convenience only and in no way define, limit or describe the scope or
intent of any provision, article, or section of this Intergovernmental
Agreement.

          1.2.5  All schedules, exhibits and addenda referred to herein are
incorporated herein by this reference.



                                      4

<PAGE>

                                    ARTICLE 2

                    REPRESENTATIONS, WARRANTIES AND COVENANTS

     Section 2.1.   REPRESENTATIONS, WARRANTIES AND COVENANTS OF EACH DISTRICT. 
Each District, as of the date hereof, represents, warrants and covenants and
agrees as follows with respect to such District.  In making the following
representations, the District shall be entitled to rely conclusively as to any
legal conclusions upon an opinion of counsel which addresses therein the
accuracy of such representations:

          2.1.1  The District is duly established and organized under and
     pursuant to the laws of the State of Colorado, with full legal right, power
     and authority under all applicable laws, including the laws of the State,
     (i) to enter into this Intergovernmental Agreement, (ii) to be bound by the
     terms hereof, (iii) to perform its obligations hereunder, and (iv) to
     consummate the transactions contemplated by this Intergovernmental
     Agreement.

          2.1.2  This Intergovernmental Agreement has been duly authorized,
     executed and delivered by the District and, upon the due authorization,
     execution and delivery by all parties hereto and thereto, will constitute
     the valid and binding obligation of the District, enforceable in accordance
     with its terms, except as such enforcement may be limited by bankruptcy,
     insolvency, reorganization, moratorium or other similar laws affecting the
     rights of creditors generally and by judicial discretion in the exercise of
     equitable remedies.

          2.1.3  The representatives of the District executing this
     Intergovernmental Agreement are fully authorized to execute the same.

          2.1.4  The execution and delivery of this Intergovernmental
     Agreement, the consummation of the transactions herein contemplated and the
     fulfillment of or compliance with the terms and conditions hereof, will not
     conflict with or constitute a violation or breach of or default (with due
     notice or the passage of time or both) under the aforesaid constitution or
     under the Service Plan for the District, or under any applicable law or
     administrative rule or regulation, or any applicable court or
     administrative decree, order or judgment, or any indenture, mortgage, deed
     of trust, contract or other agreement or instrument to which the District
     is a party or by which it or its properties are otherwise subject or bound,
     or result in the creation or imposition of any prohibited lien, charge or
     encumbrance of any nature whatsoever upon any of the property or assets of
     the District, which conflict, violation, breach, default, lien charge or
     encumbrance would have consequences that would materially and adversely
     affect the consummation of the transactions contemplated by this
     Intergovernmental Agreement or the financial condition, assets, properties
     or operations of the District.



                                      5

<PAGE>

          2.1.5  All necessary consents, permissions, authorization, orders
     or licenses of, or filing or registration with, any governmental authority
     necessary in connection with the execution and delivery of this
     Intergovernmental Agreement or the consummation of any transaction
     contemplated herein or therein have been obtained or made and are in full
     force and effect as of the date of execution and delivery hereof.

          2.1.6  There is no action, suit, proceeding, inquiry or
     investigation before or by any court or federal, state, municipal or other
     governmental authority pending or, to the knowledge of the District after
     reasonable investigation, threatened against or affecting the District or
     the assets, properties or operations of the District which, if determined
     adversely to the District or its interests, would have a material and
     adverse effect upon the consummation of the transactions contemplated by or
     the validity of this Intergovernmental Agreement or upon the financial
     condition, assets, properties or operations of the District, and the
     District is not in default with respect to any order or decree of any court
     or any order, regulation or demand of any federal, state, municipal or
     other governmental authority, which default might have consequences that
     would materially and adversely affect the consummation of the transactions
     contemplated by this Intergovernmental Agreement or the financial
     condition, assets, properties or operations of the District.

          2.1.7  The District will deliver to the Trustee:

               (i)   as soon as practicable and in any event within the time
          required by the Statutes of the State of Colorado, complete
          financial statements, all in reasonable detail and satisfactory
          in scope as to the contents thereof;

               (ii)  promptly upon receipt thereof, a copy of each other
          report submitted to the District by its accountants in connection
          with any annual, interim or special audit or review by them of
          the books of the District; and

               (iii) with reasonable promptness, such other financial
          data as the Trustee or the Underwriter reasonably requests.

     Together with each delivery of financial statements required by clause (i)
     above, the District will deliver to the Trustee a certificate of a District
     Representative stating that there exists no default hereunder or event
     which, but for notice or opportunity to cure, would constitute a default or
     if any such event or default exists, stating the nature thereof, the period
     of existence thereof and what action the District proposes to take with
     respect thereto.  The Underwriter is hereby authorized to deliver a copy of
     any financial statement delivered to it pursuant to this Section 2.1 to any
     regulatory body having jurisdiction over it.



                                      6

<PAGE>

          2.1.8   The District will, upon reasonable notice, and subject to
     applicable laws and regulations, permit any person designated by any other
     District or the Corporation in writing, at its own expense, to visit any of
     the properties of the District during normal business hours to examine the
     books and financial records of the District and make copies thereof or
     extracts therefrom, and to discuss the affairs, finances and accounts of
     the District with the officials and employees of the District, all at such
     reasonable times and as often as the party requesting such review may
     reasonably request.

          2.1.9   The District will comply with the requirements of the
     Constitution, and all laws of the State of Colorado and of any governmental
     authority having jurisdiction over the District, non-compliance with which
     could materially adversely affect its ability to perform its obligations
     under this Intergovernmental Agreement, unless the same is being contested
     in good faith and by appropriate proceedings and unless such contest shall
     operate to stay the material adverse effect of any such noncompliance.

          2.1.10  The District will take all action and do all things that it is
     authorized by law to take and do in order to perform and observe all
     covenants and agreements on its part to be performed and observed
     hereunder.

          2.1.11  The District will execute, acknowledge where appropriate, and
     deliver from time to time promptly at the request of the Corporation, the
     Credit Enhancement Provider or the Trustee all such instruments and
     documents as in the reasonable opinion of the Corporation, the Credit
     Enhancement Provider or the Trustee are reasonably required to carry out
     the intent and purposes of this Intergovernmental Agreement; provided,
     however, that the District shall not be required to execute, acknowledge
     and deliver any such instruments and documents in the event that any such
     instruments or documents will have a material adverse impact on the rights
     of the District under this Intergovernmental Agreement.  The District
     hereby covenants to execute and deliver such additional instruments and to
     perform such additional acts as may be reasonably required or, in the
     opinion of the Corporation and the Credit Enhancement Provider, to carry
     out the intent of this Intergovernmental Agreement or to perfect or give
     further assurances of any of the rights granted or provided for in this
     Intergovernmental Agreement; provided, however, that the District shall not
     be required to execute and deliver any such instruments or to perform any
     such acts in the event that the execution and delivery of any such
     instruments or the performance of any such acts will have a material
     adverse impact on the rights of the District under this Intergovernmental
     Agreement.

          2.1.12  Any certificate signed by a District Representative and
     delivered pursuant to this Intergovernmental Agreement shall be deemed a
     representation and warranty by the District as to the statements made
     therein.



                                      7

<PAGE>

                                    ARTICLE 3

                               GENERAL CONDITIONS

     Section 3.1.   TERM.  This Intergovernmental Agreement shall be effective
as of the date first above written, and shall continue in effect until all of
the Operating Agreement Payments have been satisfied; provided that if such
Operating Agreement Payments shall be satisfied pursuant to a refinancing of the
Bonds or the refinancing or discharge obligations under the Reimbursement
Agreement, the obligation of the Corporation with respect to any such
refinancing or discharge shall be considered Operating Agreement Payments for
purposes of this Intergovernmental Agreement.

     Section 3.2.   GENERAL INTENT.  It is the purpose and intent of the
Districts to coordinate and assist in the financing of the acquisition of the
Property and the development thereof, and to coordinate all related activities
and to affirmatively cooperate with each other in order to best accomplish the
goals stated herein.  The Districts shall each have all of the powers granted to
metropolitan districts by Title 32, Colorado Revised Statutes, together with
such other lawful powers available to metropolitan districts to perform this
Intergovernmental Agreement, except as specifically limited or modified herein. 
The Districts hereby represent and agree the Corporation is organized, and the
Bonds shall be issued, solely on behalf of District 5, and that no District
shall have any right to acquire all or any part of the Property other than
District 5, as provided in the Operating Agreement and the Indenture.  Each of
the Related Districts represents that the development of each District will
benefit by the acquisition of the Property by the Corporation (and by
District 5), in anticipation of the development of such District, and none of
the Related Districts proposes that it should be reimbursed for amounts expended
by it hereunder.

     Section 3.3.   COST OF PROPERTY.  The Property Costs associated with the
acquisition of the Property and the issuance of the Bonds are as specified in
the Indenture.

     Section 3.4.   RELIANCE.  It is the express intent and understanding of
each of the Districts that each District is entering this Intergovernmental
Agreement and incurring Financing Obligations in complete and justifiable
reliance on the covenants of the other Districts to abide by this
Intergovernmental Agreement for payment of all Financing Obligations contained
herein and evidenced hereby.



                                      8

<PAGE>

                                    ARTICLE 4

                      OPERATION AND MAINTENANCE OF PROJECT

     Section 4.1.   SCOPE.  The provision of operation, maintenance, and
administrative services relative to the Project shall occur in accordance with,
and be governed by, the Operating Agreement.

     Section 4.2.   CONSTRUCTION OF ALTERNATIVE FACILITIES.  Each Related
District agrees that it will not, during the term hereof, acquire or construct
an alternate facility to serve substantially the same function as served by the
Project, and that it will not approve the issuance of bonds, notes or other
obligations of another nonprofit corporation to be applied to acquire or
construct such a facility and will not enter into any agreement whereby it will
provide financial support to any entity acquiring or constructing such a
facility.






                                      9

<PAGE>

                                    ARTICLE 5

                                FEES AND CHARGES

     Section 5.1.   ASSESSMENT OF FEES AND CHARGES.  Each District shall,
subject to limitations of any other agreement heretofore executed by such
District, be free to assess facilities development fees, service charge
surcharges, and other fees, rates, tolls, charges, and taxes in amounts
determined to be required by each such District in order to meet its Financing
Obligations.







                                     10

<PAGE>

                                    ARTICLE 6

                                    PAYMENTS

     Section 6.1.   PROMISE TO PAY.  In consideration of mutual promises and
covenants contained herein, each Related District hereby promises to pay to
District 5, all of such Related District's Expense Obligations and Revenue
Obligations in accordance with the terms hereof.  With respect to any particular
District, the Revenue Obligation of such District evidenced hereby shall be
general obligation indebtedness to which such District pledges its full faith
and credit, subject to the provisions of Section 6.4 hereof, and shall be
incurred and exist from and after the effective date of this Intergovernmental
Agreement.  Notwithstanding anything contained in this Intergovernmental
Agreement to the contrary, the maximum principal amount of general obligation
Revenue Obligation represented by this Intergovernmental Agreement shall be as
provided in and subject to the limitations specified in the questions approved
by the electors of each District on November 7, 1995, a copy of which is
appended hereto as Exhibit A.  The Revenue Obligations and indebtedness incurred
hereby shall be payable only in accordance with the terms of this
Intergovernmental Agreement.  Interest shall be paid by each District on the
principal amount of its Revenue Obligation, which interest shall also be a
Revenue Obligation.  The maximum net effective interest rate accruing on any
particular District's indebtedness shall be 45%.  The Related Districts each
agree to pay such Financing Obligations to or at the direction of District 5
within 20 days of receipt of amounts collected for such purpose.

     Section 6.2.   NATURE OF OBLIGATIONS.  It is recognized by the Districts
that the Revenue Obligations imposed upon the Districts under this
Intergovernmental Agreement constitute "indebtedness" within the meaning of the
Constitution of the State of Colorado.  At duly called and noticed elections
held for each District on November 7, 1995, the electorate of each District
authorized the incurrence of indebtedness by each District of an amount
sufficient to fund the various Revenue Obligations expressed in this
Intergovernmental Agreement (the "Voted Indebtedness Authorization"), and also
approved execution of this Intergovernmental Agreement by each District.  In
addition, it is recognized by the District that the Expense Obligations
constitute a multiple fiscal year obligation as to which each District is
obligated to increase taxes in an amount not to exceed $1,500,000 annually.  In
no event shall any commitment, covenant, promise or other obligation under this
Intergovernmental Agreement require the issuance or incurrence of the
indebtedness by the Districts in excess of their respective Voted Indebtedness
Authorization.

     Section 6.3.   PROPORTIONATE SHARE.  Each District's Proportionate Share of
the total Revenue Obligations shall be determined by District 5 in the
preparation of an annual budget for each year, as provided in Section 7.1
hereof.  The Proportionate Share for each District shall be the ratio of the
estimated assessed value of taxable real and personal property in such District
to the total assessed value of taxable real and personal property in all the
Districts, as determined by the annual valuation for assessment of each District
certified by the County Assessor of Douglas County, Colorado, or his or her
successor in function.



                                     11

<PAGE>

     Section 6.4.   LIMITATION ON OBLIGATIONS.  Notwithstanding any provision
hereof to the contrary, the obligation of a District to pay any and all amounts
hereunder, including, but not limited to, its Financing Obligations in any year
shall be limited to amounts collected under a maximum mill levy imposition of 35
mills.  Any Proportionate Share in excess of the amounts collected pursuant to
such mill levy limit shall continue to be due from such District, and shall bear
interest at the rate of 15% per annum, subject to Section 6.1 hereof, until the
end of the term of this Agreement, and shall thereupon be forgiven.  In the
event the method for determining assessed value for mill levies for the State of
Colorado or the assessed value ratios are hereafter amended, District 5 shall
provide a statement of revised procedures to each of the Related Districts so
the amount collected under such revised method shall equal as closely as
reasonably possible the amounts which would have been collected absent such
revision.  In addition, no District shall have any obligation to pay its
Proportionate Share until either (A) the Town of Castle Rock, Colorado, has
approved the amendment to the Service Plan specifically authorizing the
imposition of such mill levy, or (B) such District shall have received an
opinion acceptable to the District of counsel acceptable to the District that
such mill levy may be imposed without regard to any Service Plan amendment. 
Each Related District hereby agrees to certify the amount necessary to satisfy
its obligations hereunder to the Board of County Commissioners of Douglas
County, Colorado, in accordance with the applicable laws of the State of
Colorado.  Each District hereby acknowledges that payments made under the
Development Agreement shall constitute payments in lieu of taxes imposed because
of the limitations on the District's obligations described in this Section 6.4,
and the Districts hereby approve the Development Agreement and consent to the
release thereof to the extent of the imposition of the mill levy as described in
this Section 6.4.



                                     12

<PAGE>

                                     ARTICLE 7

                            BUDGET AND APPROPRIATIONS

     Section 7.1.   BUDGET REVIEW AND APPROVAL.  On or before September 1 of 
each year, District 5 shall prepare a proposed Project budget, specifying the 
anticipated Proportionate Share to be paid in the ensuing fiscal year by each 
of the Districts.  On or before September 10 of each year, the Related 
Districts shall either approve budget documents prepared by District 5 or 
propose to District 5, in writing, additions to and/or deletions from the 
proposed budgets. Absent receipt by District 5 of a written proposal for 
additions and/or deletions by September 15 of such year, the Related 
Districts shall be deemed to have approved the items included in the proposed 
budgets.  In the event the Related Districts propose additions and/or 
deletions to the proposed budgets for consideration by District 5 and for 
inclusion in the budget documents prepared by District 5, and if such 
additions and/or deletions are not agreed to by District 5 by October 15 of 
each year, the issue shall be submitted to the Arbitrator who shall accept 
and/or reject such proposed additions and/or deletions pursuant to the 
provisions hereof not later than December 1 of each year.  Following the 
Arbitrator's decision, District 5 shall approve its budget for the next 
ensuing year.

     Section 7.2.   RELATED DISTRICTS' BUDGETS.  Each Related District shall 
adopt budgets, and make appropriations therefor, sufficient to pay its 
allocable share of the Proportionate Share required hereunder, subject to 
Section 6.4 hereof.  Each District shall include such amounts in its budget 
for the ensuing year, and shall certify an ad valorem tax levy in an amount 
sufficient, together with other revenues of such District, to pay the full 
amounts required hereunder, subject to Section 6.4 hereof.

                                        13
<PAGE>

                                    ARTICLE 8

                                   ARBITRATION

     Section 8.1.   DECISION BINDING.  It is agreed by all of the Districts 
hereto that matters to be resolved by arbitration under this 
Intergovernmental Agreement are matters upon which reasonable persons could 
disagree and further that they are matters where an exact answer is not 
possible.  Therefore, the Districts agree that the determination made by the 
Arbitrator pursuant to this Intergovernmental Agreement shall be binding upon 
the Districts.  Presentations to the Arbitrator shall be limited to written 
statement of position by any District desiring to make such a written 
statement, unless the Arbitrator requests oral presentations.  The decisions 
of the Arbitrator shall be made within five (5) days from the date of 
submittal to the Arbitrator, and shall be final, with no right of appeal.

     Section 8.2.   SELECTION OF ARBITRATOR.  The Arbitrator  shall be any 
mutually agreeable person, or in the absence of mutual agreement, a person 
chosen by the mutual agreement of two parties appointed by District 5 and 
approved by the Trustee on one hand and the majority of the Related Districts 
on the other hand.

     Section 8.3.   PROCEDURES.  To the extent not otherwise provided herein, 
arbitration shall proceed under the Commercial Arbitration Rules and the 
Expedited Commercial Arbitration Procedures of the American Arbitration 
Association.

     Section 8.4.   COSTS OF ARBITRATION.  All costs of arbitration shall be 
borne by the District requesting arbitration.

                                        14
<PAGE>

                                    ARTICLE 9

                                    INSURANCE

     Section 9.1.   PROVISION OF INSURANCE.  Each of the Districts shall 
maintain at their respective sole cost the following types of insurance 
coverage with companies and in amounts acceptable to the Districts.  In all 
such policies, each District shall be named as an insured or an additional 
insured.

          9.1.1     General liability coverage in the minimum amount of 
$150,000 per person/per occurrence and $600,000 per occurrence, or in an 
amount reflecting the current level of governmental immunity provided by 
statute, whichever is greater, protecting the Districts and their officers, 
directors, and employees against any loss, liability, or expense whatsoever 
from personal injury, death, property damage, or otherwise, arising from or 
in any way connected with management, administration, and operations.

          9.1.2     Directors and officers liability coverage (errors and 
omissions) in the minimum amount of $150,000 per person/per occurrence and 
$600,000 total per occurrence, protecting the Districts and their directors 
and officers against any loss, liability, or expense whatsoever arising from 
the actions and/or inactions of the Districts and their directors and 
officers in the performance of their duties.

          9.1.3     Operations coverage designed to insure against injury to 
the property of third parties or the persons of those third parties caused by 
the operation of the facilities of such District in the minimum amount of 
$150,000 per person/per occurrence and $600,000 per occurrence or in the 
amount reflecting the current level of governmental immunity provided by 
statute, whichever is greater.

          9.1.4     The foregoing notwithstanding, each District shall make 
provisions for workmen's compensation insurance, social security employment 
insurance and unemployment compensation for its employees performing this 
Intergovernmental Agreement as required by any law of the State of Colorado 
or the federal government and shall, upon request, exhibit evidence thereof 
to any other District.

                                        15
<PAGE>
                                   ARTICLE 10

                                     BREACH

     Section 10.1.  NON-TERMINATION.  The parties agree that no breach of 
this Intergovernmental Agreement shall justify or permit termination of the 
continuing obligations under this Intergovernmental Agreement.

     Section 10.2.  REMEDIES.  In addition to any other available remedies, 
in the event of a breach of this Intergovernmental Agreement, any District, 
the Corporation or the Trustee may ask a court of competent jurisdiction to 
enter a writ of mandamus to compel the board of directors of the breaching 
District to perform its duties under this Intergovernmental Agreement, and 
any District may seek from a court of competent jurisdiction temporary and/or 
permanent restraining orders, or orders of specific performance, to compel 
the breaching District to perform in accordance with the obligations set 
forth under this Intergovernmental Agreement.

                                        16
<PAGE>

                                   ARTICLE 11

                                  MISCELLANEOUS

     Section 11.1.  RELATIONSHIP OF PARTIES.  This Intergovernmental 
Agreement does not and shall not be construed as creating a relationship of 
joint venturers, partners, or employer-employee between or among the 
Districts.

     Section 11.2.  LIABILITY OF DISTRICTS.  No provision, covenant or 
agreement contained in this Intergovernmental Agreement, nor any obligations 
imposed herein nor the breach thereof, nor the creation of indebtedness by 
one District shall constitute or create an indebtedness of any of the other 
Districts within the meaning of any Colorado constitutional provision or 
statutory limitation. No District shall have any obligation whatsoever to 
repay any debt or liability of any other District.

     Section 11.3.  ASSIGNMENT.  Neither this Intergovernmental Agreement, 
nor any of any District's rights, obligations, duties or authorities 
hereunder may be assigned in whole or in part without the prior written 
consent of each of the other Districts and the Trustee.  Any purported 
attempt to assign this Intergovernmental Agreement or any rights hereunder 
without such consent shall be void and of no force and effect.  Consent to 
one assignment shall not be consent to any subsequent assignment.  The 
foregoing is subject to the limitation that District 5 has assigned or shall 
be entitled to assign all or any portion of its rights hereunder to the 
Corporation (which may similarly assign its rights to the Trustee) or the 
Trustee, or any successor to the foregoing, or to any other party without the 
consent of the Related Districts.

     Section 11.4.  SURVIVAL OF OBLIGATIONS.  Unfulfilled obligations of the 
parties arising under this Intergovernmental Agreement shall be deemed to 
survive the termination of this Intergovernmental Agreement, the expiration 
of the term of this Intergovernmental Agreement, and the completion of the 
facilities which are the subject of this Intergovernmental Agreement, and 
shall be binding upon and inure to the benefit of the Districts and their 
respective successors and permitted assigns, subject to Section 6.4 hereof.

     Section 11.5.  GOVERNING LAW.  This Intergovernmental Agreement shall be 
governed and construed in accordance with the laws of the State of Colorado, 
without regard to principles of choice of law.

     Section 11.6.  HEADINGS FOR CONVENIENCE ONLY.  The headings, captions 
and titles contained herein are intended for convenience and reference only 
and are not intended to define, limit or describe the scope or intent of any 
of the provisions of this Intergovernmental Agreement.

     Section 11.7.  NOTICES.  All notices, certificates or other 
communications hereunder shall be sufficiently given and shall be deemed 
given when personally delivered, or after the lapse of 

                                        17
<PAGE>


three business days following mailing by registered or certified mail, 
postage prepaid, return receipt requested, addressed as follows:

     If to Dawson Ridge            4582 South Ulster Street Parkway
     Metropolitan District No. 1:  Suite 902
                                   Denver, Colorado 80237

     If to Dawson Ridge            4582 South Ulster Street Parkway
     Metropolitan District No. 2:  Suite 902
                                   Denver, Colorado 80237

     If to Dawson Ridge            4582 South Ulster Street Parkway
     Metropolitan District No. 3:  Suite 902
                                   Denver, Colorado 80237

     If to Dawson Ridge            4582 South Ulster Street Parkway
     Metropolitan District No. 4:  Suite 902
                                   Denver, Colorado 80237

     If to Dawson Ridge            4582 South Ulster Street Parkway
     Metropolitan District No. 5:  Suite 902
                                   Denver, Colorado 80237

or at any other such addresses as said parties may hereafter or from time to
time designate by written notice to the other party given in accordance with
this Section 11.7.

     Section 11.8.  GOVERNMENTAL AUTHORITY.  The Districts shall comply with 
any and all valid state, federal or local laws or regulations covering the 
subject of this Intergovernmental Agreement, and any and all valid orders, 
regulations or licenses issued pursuant to any federal, state or local law or 
regulation governing the subject of this Intergovernmental Agreement.

     Section 11.9. MODIFICATION.  Except as otherwise provided herein, this 
Intergovernmental Agreement may not be modified, amended, changed or 
terminated, in whole or in part, except by an agreement in writing duly 
authorized and executed by each of the Districts and consented to in writing 
by the Corporation, the Trustee and the Credit Enhancement Provider.

     Section 11.10. WAIVER.  The waiver of any breach of any provision of 
this Intergovernmental Agreement by any District shall not constitute a 
continuing waiver or a waiver of any subsequent breach of the same or another 
provision of this Intergovernmental Agreement.

     Section 11.11. SEVERABILITY.  Invalidation of any of the provisions of 
this Intergovernmental Agreement or of any paragraph, sentence, clause, 
phrase, or word herein, or the application thereof in any given 
circumstances, shall not affect the validity of any other provision of this 
Intergovernmental Agreement.

                                        18
<PAGE>

     Section 11.12. THIRD PARTY BENEFICIARIES.  This Intergovernmental 
Agreement is made solely for the benefit of the parties hereto, and no third 
parties, including any holders of indebtedness of any of the Districts, shall 
be entitled to enforce the duties or enjoy the rights created hereunder; 
provided that the Corporation, the Trustee and their respective assigns shall 
be considered third party beneficiaries hereof and shall be fully entitled to 
enforce the provision hereof.


                   [Balance of Page Intentionally Left Blank]





                                        19
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Intergovernmental
Agreement as of the day and year first above written, which shall

ATTEST:                            DAWSON RIDGE METROPOLITAN DISTRICT NO. 1

(ILLEGIBLE)                        C. Roger Addlesperger
- -----------------------------      ----------------------------------------
Assistant Secretary                President


ATTEST:                            DAWSON RIDGE METROPOLITAN DISTRICT NO. 2

(ILLEGIBLE)                        C. Roger Addlesperger
- -----------------------------      ----------------------------------------
Assistant Secretary                President


ATTEST:                            DAWSON RIDGE METROPOLITAN DISTRICT NO. 3

(ILLEGIBLE)                        C. Roger Addlesperger
- -----------------------------      ----------------------------------------
Assistant Secretary                President


ATTEST:                            DAWSON RIDGE METROPOLITAN DISTRICT NO. 4

(ILLEGIBLE)                        C. Roger Addlesperger
- -----------------------------      ----------------------------------------
Assistant Secretary                President


ATTEST:                            DAWSON RIDGE METROPOLITAN DISTRICT NO. 5

(ILLEGIBLE)                        C. Roger Addlesperger
- -----------------------------      ----------------------------------------
Assistant Secretary                President


                                       20
<PAGE>



STATE OF COLORADO        )
                         )ss.
COUNTY OF DENVER         )

     The foregoing instrument was acknowledged before me this 26th day of 
March, 1996 by C. Roger Addlesperger as President, and Candace Addlesperger as 
Assistant Secretary, of Dawson Ridge Metropolitan District No 1.

     WITNESS my hand and official seal.

     My commission expires: 9-16-98
                            -------

                                   Robin W. Biery
                                   ---------------------------------
                                   Notary Public



STATE OF COLORADO        )
                         )ss.
COUNTY OF DENVER         )

     The foregoing instrument was acknowledged before me this 26th day of 
March, 1996 by C. Roger Addlesperger as President, and Candace Addlesperger as 
Assistant Secretary, of Dawson Ridge Metropolitan District No 2.

     WITNESS my hand and official seal.

     My commission expires: 9-16-98
                            -------

                                   Robin W. Biery
                                   -----------------------------
                                   Notary Public


                                     21
<PAGE>

STATE OF COLORADO        )
                         )ss.
COUNTY OF DENVER         )

     The foregoing instrument was acknowledged before me this 26th day of 
March, 1996 by C. Roger Addlesperger as President, and Candace Addlesperger as 
Assistant Secretary, of Dawson Ridge Metropolitan District No 3.

     WITNESS my hand and official seal.

     My commission expires: 9-16-98
                            -------


                                   Robin W. Biery
                                   -----------------------------
                                   Notary Public



STATE OF COLORADO        )
                         )ss.
COUNTY OF DENVER         )

     The foregoing instrument was acknowledged before me this 26th day of 
March, 1996 by C. Roger Addlesperger as President, and Candace Addlesperger as 
Assistant Secretary, of Dawson Ridge Metropolitan District No 4.

     WITNESS my hand and official seal.

     My commission expires: 9-16-98
                            -------


                                   Robin W. Biery
                                   -----------------------------
                                   Notary Public

                                       22
<PAGE>



STATE OF COLORADO        )
                         )ss.
COUNTY OF DENVER         )

     The foregoing instrument was acknowledged before me this 26th day of 
March, 1996 by C. Roger Addlesperger as President, and Candace Addlesperger as 
Assistant Secretary, of Dawson Ridge Metropolitan District No 5.

     WITNESS my hand and official seal.

     My commission expires: 9-16-98
                            -------

                                   Robin W. Biery
                                   -----------------------------
                                   Notary Public



                                      23
<PAGE>



                                  EXHIBIT A
                                  ---------

                             ELECTION QUESTIONS







                                    A-1



<PAGE>

                  BOARD OF CANVASSERS CERTIFICATE OF ELECTION RESULTS
                              FOR THE SPECIAL ELECTION
                          HELD TUESDAY, NOVEMBER 7, 1995

                                               1-11-103 AND 32-1-104(1), C.R.S.

Dawson Ridge Metropolitan District No. 1, Douglas County, Colorado

Each of the undersigned members of the board of canvassers of the Dawson 
Ridge Metropolitan District No. 1 certifies that the following is a true and 
correct statement of the results of the Special Election for the above-named 
District, at which time the eligible electors of the District voted as 
indicated on the attached Judges' Certificate of Election Returns, for each 
question submitted:

Question A:

"SHALL DAWSON RIDGE METROPOLITAN DISTRICT NO. 1 ("DISTRICT") TAXES BE 
INCREASED $1,500,000 ANNUALLY, COMMENCING IN 1995, FOR THE PURPOSE OF PAYING 
THE DISTRICT'S OBLIGATIONS IN CONNECTION WITH AN INTERGOVERNMENTAL SERVICES 
AGREEMENT BY AND BETWEEN THE DISTRICT, DAWSON RIDGE METROPOLITAN DISTRICT NO. 
5 ("DISTRICT NO. 5") AND ANY OTHER PARTIES THERETO WHEREBY THE DISTRICT 
AGREES TO PROVIDE FUNDS TO OPERATE AND MAINTAIN PARKS AND RECREATION 
FACILITIES AND EQUIPMENT ("DISTRICT NO. 5 FACILITIES") FOR THE BENEFIT OF THE 
DISTRICT WITH RESPECT TO THE DISTRICT NO. 5 FACILITIES AND SHALL THE PROCEEDS 
OF SUCH TAXES AND ANY INVESTMENT INCOME THEREON, BE COLLECTED AND SPENT BY 
THE DISTRICT WITHOUT REGARD TO ANY EXPENDITURE, REVENUE-RAISING, OR OTHER 
LIMITATION CONTAINED WITHIN ARTICLE X, SECTION 20 OF THE COLORADO 
CONSTITUTION?"

Number of votes for:      2
                         --------
Number of votes against:  0
                         --------
Question B:

"SHALL DAWSON RIDGE METROPOLITAN DISTRICT NO. 1 ("DISTRICT") DEBT BE 
INCREASED $100,000,000 (PRINCIPAL AMOUNT) WITH A REPAYMENT COST OF 
$500,000,000 (MAXIMUM TOTAL DISTRICT COST), SUCH DEBT TO CONSIST OF BONDS OR 
OTHER EVIDENCES OF INDEBTEDNESS (INCLUDING WITHOUT LIMITATION AN 
INTERGOVERNMENTAL AGREEMENT OR AGREEMENTS WITH DAWSON RIDGE METROPOLITAN 
DISTRICT NO. 2, DAWSON RIDGE METROPOLITAN DISTRICT NO. 3, DAWSON RIDGE 
METROPOLITAN DISTRICT NO. 4 AND DAWSON RIDGE METROPOLITAN DISTRICT NO. 5, OR 
ANY OR ALL OF THE FOREGOING) FOR THE PURPOSES OF DESIGNING, ACQUIRING, 
INSTALLING, CONSTRUCTING, EQUIPPING, OPERATING AND MAINTAINING WATER, 
SANITATION, STREET, TRAFFIC SAFETY, TRANSPORTATION, PARKS AND RECREATION AND 
FIRE PROTECTION FACILITIES AND EQUIPMENT WITHIN OR FOR THE BENEFIT OF THE 
DISTRICT. SUCH BONDS OR OTHER EVIDENCE OF INDEBTEDNESS TO BE ISSUED AT A 
MAXIMUM NET EFFECTIVE INTEREST RATE OF 45% PER ANNUM AND TO MATURE OR BE 
PAYABLE IN NOT MORE THAN 40 YEARS; AND SHALL THE PROCEEDS OF SUCH BONDS OR 
OTHER EVIDENCES OF INDEBTEDNESS, AND INVESTMENT INCOME THEREON, BE COLLECTED 
AND SPENT BY THE DISTRICT WITHOUT REGARD TO ANY EXPENDITURE, REVENUE-RAISING, 
OR OTHER LIMITATION CONTAINED WITHIN ARTICLE X, SECTION 20 OF THE COLORADO 
CONSTITUTION?

Number of votes for:      2
                         --------
Number of votes against:  0
                         --------

<PAGE>

                 BOARD OF CANVASSERS CERTIFICATE OF ELECTION RESULTS
                             FOR THE SPECIAL ELECTION
                          HELD TUESDAY, NOVEMBER 7, 1995
                                    CONTINUED

                                               1-11-103 AND 32-1-104(1), C.R.S.

Question C:

"SHALL DAWSON RIDGE METROPOLITAN DISTRICT NO. 1 ("DISTRICT") DEBT BE 
INCREASED $100,000,000, WITH A REPAYMENT COST OF $500,000,000, (MAXIMUM TOTAL 
DISTRICT COST), SUCH DEBT TO CONSIST OF EVIDENCES OF INDEBTEDNESS (INCLUDING 
WITHOUT LIMITATION INTERGOVERNMENTAL AGREEMENT OR AGREEMENTS WITH DAWSON 
RIDGE METROPOLITAN DISTRICT NO. 2, DAWSON RIDGE METROPOLITAN DISTRICT NO. 3, 
DAWSON RIDGE METROPOLITAN DISTRICT NO. 4 AND DAWSON RIDGE METROPOLITAN 
DISTRICT NO. 5, OR ANY OR ALL OF THE FOREGOING; FOR THE PURPOSES OF 
DESIGNING, ACQUIRING, INSTALLING, CONSTRUCTING, EQUIPPING, OPERATING AND 
MAINTAINING WATER, SANITATION, STREET, TRAFFIC SAFETY, TRANSPORTATION, PARKS 
AND RECREATION AND FIRE PROTECTION FACILITIES AND EQUIPMENT WITHIN OR FOR THE 
BENEFIT OF THE DISTRICT; SUCH EVIDENCE OF INDEBTEDNESS TO BE ISSUED AT A 
MAXIMUM NET EFFECTIVE INTEREST RATE OF 45% PER ANNUM AND TO MATURE OR BE 
PAYABLE IN NOT MORE THAN 40 YEARS; AND SHALL THE PROCEEDS OF SUCH EVIDENCES 
OF INDEBTEDNESS, AND ANY INVESTMENT INCOME THEREON, BE COLLECTED AND SPENT BY 
THE DISTRICT WITHOUT REGARD TO ANY EXPENDITURE. REVENUE-RAISING, OR OTHER 
LIMITATION CONTAINED WITHIN ARTICLE X, SECTION 20 OF THE COLORADO 
CONSTITUTION?"

Number of votes for:      2
                         --------
Number of votes against:  0
                         --------

Question D:

"SHALL THE EXECUTION, DELIVERY AND PERFORMANCE BY DAWSON RIDGE METROPOLITAN 
DISTRICT NO. 1 ("DISTRICT") OF AN INTERGOVERNMENTAL AGREEMENT BY AND BETWEEN 
THE DISTRICT, DAWSON RIDGE METROPOLITAN DISTRICT NO. 5 ("DISTRICT NO. 5") AND 
ANY OTHER PARTIES THERETO WHEREBY THE DISTRICT AGREES TO PROVIDE FUNDS TO 
OPERATE AND MAINTAIN PARKS AND RECREATION FACILITIES AND EQUIPMENT ("DISTRICT 
NO. 5 FACILITIES") FOR THE BENEFIT OF THE DISTRICT WITH RESPECT TO THE 
DISTRICT NO. 5 FACILITIES, BE APPROVED?"

Number of votes for:      2
                         --------
Number of votes against:  0
                         --------

Question E:

"SHALL DAWSON RIDGE METROPOLITAN DISTRICT NO. 1, FOR PURPOSES OTHER THAN 
ENTERPRISES, BE PERMITTED TO MAINTAIN FISCAL YEAR SPENDING AND ANNUAL 
DISTRICT REVENUES FROM SOURCES NOT EXCLUDED FROM FISCAL YEAR SPENDING IN AN 
AMOUNT NOT TO EXCEED $1,000,000 IN 1995 AND EACH YEAR THEREAFTER, SUCH AMOUNT 
TO INCREASE ANNUALLY IN EACH YEAR AFTER 1995 IN AN AMOUNT NOT TO EXCEED THE 
APPLICABLE LIMITATIONS OF ARTICLE X, SECTION 20 OF THE COLORADO CONSTITUTION 
AND COLORADO LAW?"

Number of votes for:      2
                         --------
Number of votes against:  0
                         --------

                                       2
<PAGE>

                  BOARD OF CANVASSERS CERTIFICATE OF ELECTION RESULTS
                              FOR THE SPECIAL ELECTION
                          HELD TUESDAY, NOVEMBER 7, 1995
                                     CONTINUED

                                               1-11-103 AND 32-1-104(1), C.R.S.


(Signed)   DONETTE B. HUNTER
           --------------------------------
           Designated Election Official


(Signed)   CANDACE W. ADDLESPERGER
           --------------------------------
           Canvasser

(Signed)   
           --------------------------------
           Canvasser


R.S. WELLS CORP.  ATTN: SUE BLAIR
- ------------------------------------------------------------
Contact Person For District

6200 SOUTH SYRACUSE WAY, SUITE 150
GREENWOOD VILLAGE, CO  80111
- ------------------------------------------------------------
Business Address

(303) 779-4525
- ------------------------------------------------------------
Telephone Number


Prepare and deliver a Certificate of Election to those candidates receiving 
the highest number of votes.
Deposit one copy with the Clerk and Recorder of each county in which the 
special district is located.

Send one copy to:    Division of Local Government
                     1313 Sherman Street, Room 521
                     Denver, CO  80203


                                     3

<PAGE>

                  JUDGE'S CERTIFICATE OF ELECTION RETURNS

                                                               1-7-601, C.R.S.


IT IS HEREBY CERTIFIED by the undersigned, who conducted the election held in 
the DAWSON RIDGE METROPOLITAN DISTRICT NO. 1, (by mail ballot), in the county 
of Douglas, and state of Colorado, on the 7th day of November, in the year 
1995, that after qualifying by swearing and subscribing to their Oaths of 
Office they opened the polls at 7:00 A.M., and that they kept the polls open 
continuously until the hour of 7:00 P.M. on said date, after which they 
counted the ballots cast for directors of said District and for any ballot 
issues and ballot questions submitted.


THAT THE VOTES CAST FOR AND AGAINST EACH BALLOT ISSUE AND BALLOT QUESTION 
SUBMITTED WERE AS FOLLOWS:


                                     YES                        NO

Question A                       2         two              0         zero
                              -------------------         -------------------


                                     YES                        NO

Question B                       2         two              0         zero
                              -------------------         -------------------


                                     YES                        NO

Question C                       2         two              0         zero
                              -------------------         -------------------


                                     YES                        NO

Question D                       2         two              0         zero
                              -------------------         -------------------


                                     YES                        NO

Question E                       2         two              0         zero
                              -------------------         -------------------


                                      1
<PAGE>

                JUDGE'S CERTIFICATE OF ELECTION RETURNS CONTINUED

                                                             1-7-601, C.R.S.


It is hereby identified and specified that:

                                                     Numeric

Total Number of Ballots Received from                    5
the Designated Election Official:                    --------------
                                                         2
Total number of ballots vote:                        --------------
                                                         0
Unofficial ballots voted:                            --------------
                                                         0
Substitute ballots voted:                            --------------
                                                         3
Ballots delivered to electors:                       --------------
                                                         0
Spoiled ballots:                                     --------------
                                                         
Ballots rejected for insufficient                        1
information:                                         --------------
                                                         0
Challenged ballots:                                  --------------
                                                         2
Ballots not delivered to electors:                   --------------
                                              
Ballots returned to the Designated                       5
Election Official:                                   --------------


(All unused ballots, spoiled ballots, and stubs of ballots voted shall be 
returned with the statement.)

Certified by us:

[SIGNATURE ILLEGIBLE]
- ---------------------------------, Election Judge

[SIGNATURE ILLEGIBLE]
- ---------------------------------, Election Judge

- ---------------------------------, Election Judge
        November 7, 1995

                                   Precinct Number if Applicable: ___________


                                       2
<PAGE>

            BOARD OF CANVASSERS CERTIFICATE OF ELECTION RESULTS
                         FOR THE SPECIAL ELECTION
                     HELD TUESDAY, NOVEMBER 7, 1995

                                               1-11-103 AND 32-1-104(1), C.R.S.

Dawson Ridge Metropolitan District No. 2, Douglas County, Colorado

Each of the undersigned members of the board of canvassers of the Dawson 
Ridge Metropolitan District No. 2 certifies that the following is a true and 
correct statement of the results of the Special Election for the above-named 
District, at which time the eligible electors of the District voted as 
indicated on the attached Judges' Certificate of Election Returns, for each 
question submitted.

Question A:

"SHALL DAWSON RIDGE METROPOLITAN DISTRICT NO. 2 ("DISTRICT") TAXES BE 
INCREASED $1,500,000 ANNUALLY, COMMENCING IN 1995, FOR THE PURPOSE OF PAYING 
THE DISTRICT'S OBLIGATIONS IN CONNECTION WITH AN INTERGOVERNMENTAL SERVICES 
AGREEMENT BY AND BETWEEN THE DISTRICT. DAWSON RIDGE METROPOLITAN DISTRICT NO. 
5 ("DISTRICT NO. 5") AND ANY OTHER PARTIES THERETO WHEREBY THE DISTRICT 
AGREES TO PROVIDE FUNDS TO OPERATE AND MAINTAIN PARKS AND RECREATION 
FACILITIES AND EQUIPMENT ("DISTRICT NO. 5 FACILITIES") FOR THE BENEFIT OF THE 
DISTRICT WITH RESPECT TO THE DISTRICT NO. 5 FACILITIES AND SHALL THE PROCEEDS 
OF SUCH TAXES AND INVESTMENT INCOME THEREON, BE COLLECTED AND SPENT BY THE 
DISTRICT WITHOUT REGARD TO ANY EXPENDITURE, REVENUE-RAISING, OR OTHER 
LIMITATION CONTAINED WITHIN ARTICLE X, SECTION 20 OF THE COLORADO 
CONSTITUTION?"

                                2
Number of votes for:     -----------------
                                0
Number of votes against: -----------------

Question B:

"SHALL DAWSON RIDGE METROPOLITAN DISTRICT NO. 2 ("DISTRICT") DEBT BE 
INCREASED $100,000,000 (PRINCIPAL AMOUNT) WITH A REPAYMENT COST OF 
$500,000,000 (MAXIMUM TOTAL DISTRICT COST), SUCH DEBT TO CONSIST OF BONDS OR 
OTHER EVIDENCES OF INDEBTEDNESS (INCLUDING WITHOUT LIMITATION AN 
INTERGOVERNMENTAL AGREEMENT OR AGREEMENTS WITH DAWSON RIDGE METROPOLITAN 
DISTRICT NO. 1, DAWSON RIDGE METROPOLITAN DISTRICT NO. 3, DAWSON RIDGE 
METROPOLITAN DISTRICT NO. 4 AND DAWSON RIDGE METROPOLITAN DISTRICT NO. 5, OR 
ANY OR ALL OF THE FOREGOING) FOR THE PURPOSES OF DESIGNING, ACQUIRING, 
INSTALLING, CONSTRUCTING, EQUIPPING, OPERATING AND MAINTAINING WATER, 
SANITATION, STREET, TRAFFIC SAFETY, TRANSPORTATION, PARKS AND RECREATION AND 
FIRE PROTECTION FACILITIES AND EQUIPMENT WITHIN OR FOR THE BENEFIT OF THE 
DISTRICT; SUCH BONDS OR OTHER EVIDENCE OF INDEBTEDNESS TO BE ISSUED AT A 
MAXIMUM NET EFFECTIVE INTEREST RATE OF 45% PER ANNUM AND TO MATURE OR BE 
PAYABLE IN NOT MORE THAN 40 YEARS; AND SHALL THE PROCEEDS OF SUCH BONDS OR 
OTHER EVIDENCES OF INDEBTEDNESS, AND INVESTMENT INCOME THEREON, BE COLLECTED 
AND SPENT BY THE DISTRICT WITHOUT REGARD TO ANY EXPENDITURE, REVENUE-RAISING, 
OR OTHER LIMITATION CONTAINED WITHIN ARTICLE X, SECTION 20 OF THE COLORADO 
CONSTITUTION?

                                2
Number of votes for:     -----------------
                                0
Number of votes against: -----------------

<PAGE>

            BOARD OF CANVASSERS CERTIFICATE OF ELECTION RESULTS
                         FOR THE SPECIAL ELECTION
                     HELD TUESDAY, NOVEMBER 7, 1995
                              CONTINUED

                                               1-11-103 AND 32-1-104(1), C.R.S.

Question C:

"SHALL DAWSON RIDGE METROPOLITAN DISTRICT NO. 2 ("DISTRICT") DEBT BE 
INCREASED $100,000,000 (PRINCIPAL AMOUNT) WITH A REPAYMENT COST OF 
$500,000,000 (MAXIMUM TOTAL DISTRICT COST), SUCH DEBT TO CONSIST OF EVIDENCES 
OF INDEBTEDNESS (INCLUDING WITHOUT LIMITATION INTERGOVERNMENTAL AGREEMENT 
OR AGREEMENTS WITH DAWSON RIDGE METROPOLITAN DISTRICT NO. 1, DAWSON RIDGE 
METROPOLITAN DISTRICT NO. 3, DAWSON RIDGE METROPOLITAN DISTRICT NO. 4 AND 
DAWSON RIDGE METROPOLITAN DISTRICT NO. 5, OR ANY OR ALL OF THE FOREGOING) FOR 
THE PURPOSES OF DESIGNING, ACQUIRING, INSTALLING, CONSTRUCTING, EQUIPPING, 
OPERATING AND MAINTAINING WATER, SANITATION, STREET, TRAFFIC SAFETY, 
TRANSPORTATION, PARKS AND RECREATION AND FIRE PROTECTION FACILITIES AND 
EQUIPMENT WITHIN OR FOR THE BENEFIT OF THE DISTRICT; SUCH EVIDENCE OF 
INDEBTEDNESS TO BE ISSUED AT A MAXIMUM NET EFFECTIVE INTEREST 
RATE OF 45% PER ANNUM AND TO MATURE OR BE PAYABLE IN NOT MORE THAN 40 YEARS; 
AND SHALL THE PROCEEDS OF SUCH EVIDENCES OF INDEBTEDNESS, AND 
ANY INVESTMENT INCOME THEREON, BE COLLECTED AND SPENT BY THE DISTRICT WITHOUT 
REGARD TO ANY EXPENDITURE, REVENUE-RAISING, OR OTHER LIMITATION CONTAINED 
WITHIN ARTICLE X, SECTION 20 OF THE COLORADO CONSTITUTION?"

                                2
Number of votes for:     -----------------
                                0
Number of votes against: -----------------


Question D:

"SHALL THE EXECUTION, DELIVERY AND PERFORMANCE BY DAWSON RIDGE METROPOLITAN 
DISTRICT NO. 2 ("DISTRICT") OF AN INTERGOVERNMENTAL AGREEMENT BY AND BETWEEN 
THE DISTRICT, DAWSON RIDGE METROPOLITAN DISTRICT NO. 5 ("DISTRICT NO. 5") AND 
ANY OTHER PARTIES THERETO WHEREBY THE DISTRICT AGREES TO PROVIDE FUNDS TO 
OPERATE AND MAINTAIN PARKS AND RECREATION FACILITIES AND EQUIPMENT ("DISTRICT 
NO. 5 FACILITIES") FOR THE BENEFIT OF THE DISTRICT WITH RESPECT TO THE 
DISTRICT NO. 5 FACILITIES BE APPROVED?"

                                2
Number of votes for:     -----------------
                                0
Number of votes against: -----------------

<PAGE>

              BOARD OF CANVASSERS CERTIFICATE OF ELECTION RESULTS
                          FOR THE SPECIAL ELECTION
                       HELD TUESDAY, NOVEMBER 7, 1995
                                 CONTINUED
                                               1-11-103 and 32-1-104(1), C.R.S.

Question E:

"SHALL DAWSON RIDGE METROPOLITAN DISTRICT NO. 2, FOR PURPOSES OTHER THAN 
ENTERPRISES, BE PERMITTED TO MAINTAIN FISCAL YEAR SPENDING AND ANNUAL 
DISTRICT REVENUES FROM SOURCES NOT EXCLUDED FROM FISCAL YEAR SPENDING IN AN 
AMOUNT NOT TO EXCEED $1,000,000 IN 1995 AND EACH YEAR THEREAFTER, SUCH AMOUNT 
TO INCREASE ANNUALLY IN EACH YEAR AFTER 1995 IN AN AMOUNT NOT TO EXCEED THE 
APPLICABLE LIMITATIONS OF ARTICLE X, SECTION 20 OF THE COLORADO CONSTITUTION 
AND COLORADO LAW?"

Number of votes for:            2
                        -----------------
Number of votes against:        0
                        -----------------

(Signed)  /s/ DONNETTE B. HUNTER
        ---------------------------------
        Designated Electon Official

(Signed)  /s/ CANDACE M. ADDELSPERGER
        ---------------------------------
        Canvasser

(Signed)
        ---------------------------------
        Canvasser


Contact Person For District

   R.S. WELLS CORP.   ATTN: SUE BLAIR
- ---------------------------------------------------------------------

   6200 SOUTH SYRACUSE WAY, SUITE 150, GREENWOOD VILLAGE, CO 80111
- ---------------------------------------------------------------------
Business Address

   (303) 779-4525
- ---------------------------------------------------------------------
Telephone Number

PREPARE AND DELIVER A CERTIFICATE OF ELECTION TO THOSE CANDIDATES
RECEIVING THE HIGHEST NUMBER OF VOTES.
DEPOSIT ONE COPY WITH THE CLERK AND RECORDER OF EACH COUNTY IN
WHICH THE SPECIAL DISTRICT IS LOCATED.

SEND ONE COPY TO:     DIVISION OF LOCAL GOVERNMENT
                      1313 SHERMAN STREET, ROOM 521
                      DENVER, CO  80203



                                       3


<PAGE>

                    JUDGE'S CERTIFICATE OF ELECTION RETURNS

                                                                1-7-601, C.R.S.

IT IS HEREBY CERTIFIED by the undersigned, who conducted the election held in 
the DAWSON RIDGE METROPOLITAN DISTRICT NO. 2, (by mail ballot), in the 
county of Douglas, and state of Colorado, on the 7th day of November, in the 
year 1995, that after qualifying by swearing and subscribing to their Oaths 
of Office they opened the polls at 7:00 A.M., and that they kept the polls 
open continuously until the hour of 7:00 P.M. on said date, after which they 
counted the ballots cast for directors of said District and for any ballot 
issues and ballot questions submitted.

THAT THE VOTES CAST FOR AND AGAINST EACH BALLOT ISSUE AND BALLOT QUESTION 
SUBMITTED WERE AS FOLLOWS:

                        YES                            NO

Question A          2        two                   0      zero
            ---------------------------    ---------------------------
               (Numeric & Spell Out)          (Numeric & Spell Out)


                        YES                            NO

Question B          2        two                   0      zero
            ---------------------------    ---------------------------
               (Numeric & Spell Out)          (Numeric & Spell Out)


                        YES                            NO

Question C          2        two                   0      zero
            ---------------------------    ---------------------------
               (Numeric & Spell Out)          (Numeric & Spell Out)


                        YES                            NO

Question D          2        two                   0      zero
            ---------------------------    ---------------------------
               (Numeric & Spell Out)          (Numeric & Spell Out)


                        YES                            NO

Question E          2        two                   0      zero
            ---------------------------    ---------------------------
               (Numeric & Spell Out)          (Numeric & Spell Out)



                                       1

<PAGE>


              JUDGES'S CERTIFICATE OF ELECTION RETURNS CONTINUED

                                                                1-7-601, C.R.S.


It is hereby identified and specified that:

                                                Numeric

Total Number of Ballots Received from
the Designated Election Official:                   5
                                                ---------------------

Total number of ballots voted:                      2
                                                ---------------------

Unofficial ballots voted:                           0
                                                ---------------------

Substitute ballots voted:                           0
                                                ---------------------

Ballots delivered to electors:                      3
                                                ---------------------

Spoiled ballots:                                    0
                                                ---------------------

Ballots rejected for insufficient
information:                                        1
                                                ---------------------

Challenged ballots:                                 0
                                                ---------------------

Ballots not delivered to electors:                  2
                                                ---------------------

Ballots returned to the Designated
Electon Official:                                   5
                                                ---------------------

(All unused ballots, spoiled ballots, and stubs of ballots voted shall be 
returned with the statement.)

Certified by us:


  /s/ MARY A. HUPP                         , Election Judge
- -------------------------------------------

 /s/ DONETTE B. HUNTER                     , Election Judge
- -------------------------------------------

                                           , Election Judge
- -------------------------------------------

             November 7, 1995

                                        Precinct Number if Applicable:   N/A
                                                                      ---------


                                       2

<PAGE>

                  BOARD OF CANVASSERS CERTIFICATE OF ELECTION RESULTS
                              FOR THE SPECIAL ELECTION
                          HELD TUESDAY, NOVEMBER 7, 1995

                                               1-11-103 AND 32-1-104(1), C.R.S.

Dawson Ridge Metropolitan District No. 3, Douglas County, Colorado

Each of the undersigned members of the board of canvassers of the Dawson 
Ridge Metropolitan District No. 3 certifies that the following is a true and 
correct statement of the results of the Special Election for the above-named 
District, at which time the eligible electors of the District voted as 
indicated on the attached Judges' Certificate of Election Returns, for each 
question submitted:

Question A:

"SHALL DAWSON RIDGE METROPOLITAN DISTRICT NO. 3 ("DISTRICT") TAXES BE 
INCREASED $1,500,000 ANNUALLY, COMMENCING IN 1995, FOR THE PURPOSE OF PAYING 
THE DISTRICT'S OBLIGATIONS IN CONNECTION WITH AN INTERGOVERNMENTAL SERVICES 
AGREEMENT BY AND BETWEEN THE DISTRICT, DAWSON RIDGE METROPOLITAN DISTRICT NO. 
5 ("DISTRICT NO. 5") AND ANY OTHER PARTIES THERETO WHEREBY THE DISTRICT 
AGREES TO PROVIDE FUNDS TO OPERATE AND MAINTAIN PARKS AND RECREATION 
FACILITIES AND EQUIPMENT ("DISTRICT NO. 5 FACILITIES") FOR THE BENEFIT OF THE 
DISTRICT WITH RESPECT TO THE DISTRICT NO. 5 FACILITIES AND SHALL THE PROCEEDS 
OF SUCH TAXES AND INVESTMENT INCOME THEREON, BE COLLECTED AND SPENT BY 
THE DISTRICT WITHOUT REGARD TO ANY EXPENDITURE, REVENUE-RAISING, OR OTHER 
LIMITATION CONTAINED WITHIN ARTICLE X, SECTION 20 OF THE COLORADO 
CONSTITUTION?"

Number of votes for:      3
                         --------
Number of votes against:  0
                         --------
Question B:

"SHALL DAWSON RIDGE METROPOLITAN DISTRICT NO. 3 ("DISTRICT") DEBT BE 
INCREASED $100,000,000 (PRINCIPAL AMOUNT) WITH A REPAYMENT COST OF 
$500,000,000 (MAXIMUM TOTAL DISTRICT COST), SUCH DEBT TO CONSIST OF BONDS OR 
OTHER EVIDENCES OF INDEBTEDNESS (INCLUDING WITHOUT LIMITATION AN 
INTERGOVERNMENTAL AGREEMENT OR AGREEMENTS WITH DAWSON RIDGE METROPOLITAN 
DISTRICT NO. 1, DAWSON RIDGE METROPOLITAN DISTRICT NO. 2, DAWSON RIDGE 
METROPOLITAN DISTRICT NO. 4 AND DAWSON RIDGE METROPOLITAN DISTRICT NO. 5, OR 
ANY OR ALL OF THE FOREGOING) FOR THE PURPOSES OF DESIGNING, ACQUIRING, 
INSTALLING, CONSTRUCTING, EQUIPPING, OPERATING AND MAINTAINING WATER, 
SANITATION, STREET, TRAFFIC SAFETY, TRANSPORTATION, PARKS AND RECREATION AND 
FIRE PROTECTION FACILITIES AND EQUIPMENT WITHIN OR FOR THE BENEFIT OF THE 
DISTRICT. SUCH BONDS OR OTHER EVIDENCE OF INDEBTEDNESS TO BE ISSUED AT A 
MAXIMUM NET EFFECTIVE INTEREST RATE OF 45% PER ANNUM AND TO MATURE OR BE 
PAYABLE IN NOT MORE THAN 40 YEARS; AND SHALL THE PROCEEDS OF SUCH BONDS OR 
OTHER EVIDENCES OF INDEBTEDNESS, AND INVESTMENT INCOME THEREON, BE COLLECTED 
AND SPENT BY THE DISTRICT WITHOUT REGARD TO ANY EXPENDITURE, REVENUE-RAISING, 
OR OTHER LIMITATION CONTAINED WITHIN ARTICLE X, SECTION 20 OF THE COLORADO 
CONSTITUTION?

Number of votes for:      3
                         --------
Number of votes against:  0
                         --------

<PAGE>

                 BOARD OF CANVASSERS CERTIFICATE OF ELECTION RESULTS
                             FOR THE SPECIAL ELECTION
                          HELD TUESDAY, NOVEMBER 7, 1995
                                    CONTINUED

                                               1-11-103 AND 32-1-104(1), C.R.S.

Question C:

"SHALL DAWSON RIDGE METROPOLITAN DISTRICT NO. 3 ("DISTRICT") DEBT BE 
INCREASED $100,000,000, WITH A REPAYMENT COST OF $500,000,000, (MAXIMUM TOTAL 
DISTRICT COST), SUCH DEBT TO CONSIST OF EVIDENCES OF INDEBTEDNESS (INCLUDING 
WITHOUT LIMITATION INTERGOVERNMENTAL AGREEMENT OR AGREEMENTS WITH DAWSON 
RIDGE METROPOLITAN DISTRICT NO. 1, DAWSON RIDGE METROPOLITAN DISTRICT NO. 2, 
DAWSON RIDGE METROPOLITAN DISTRICT NO. 4 AND DAWSON RIDGE METROPOLITAN 
DISTRICT NO. 5, OR ANY OR ALL OF THE FOREGOING; FOR THE PURPOSES OF 
DESIGNING, ACQUIRING, INSTALLING, CONSTRUCTING, EQUIPPING, OPERATING AND 
MAINTAINING WATER, SANITATION, STREET, TRAFFIC SAFETY, TRANSPORTATION, PARKS 
AND RECREATION AND FIRE PROTECTION FACILITIES AND EQUIPMENT WITHIN OR FOR THE 
BENEFIT OF THE DISTRICT; SUCH EVIDENCE OF INDEBTEDNESS TO BE ISSUED AT A 
MAXIMUM NET EFFECTIVE INTEREST RATE OF 45% PER ANNUM AND TO MATURE OR BE 
PAYABLE IN NOT MORE THAN 40 YEARS; AND SHALL THE PROCEEDS OF SUCH EVIDENCES 
OF INDEBTEDNESS, AND ANY INVESTMENT INCOME THEREON, BE COLLECTED AND SPENT BY 
THE DISTRICT WITHOUT REGARD TO ANY EXPENDITURE. REVENUE-RAISING, OR OTHER 
LIMITATION CONTAINED WITHIN ARTICLE X, SECTION 20 OF THE COLORADO 
CONSTITUTION?"

Number of votes for:      3
                         --------
Number of votes against:  0
                         --------

Question D:

"SHALL THE EXECUTION, DELIVERY AND PERFORMANCE BY DAWSON RIDGE METROPOLITAN 
DISTRICT NO. 3 ("DISTRICT") OF AN INTERGOVERNMENTAL AGREEMENT BY AND BETWEEN 
THE DISTRICT, DAWSON RIDGE METROPOLITAN DISTRICT NO. 5 ("DISTRICT NO. 5") AND 
ANY OTHER PARTIES THERETO WHEREBY THE DISTRICT AGREES TO PROVIDE FUNDS TO 
OPERATE AND MAINTAIN PARKS AND RECREATION FACILITIES AND EQUIPMENT ("DISTRICT 
NO. 5 FACILITIES") FOR THE BENEFIT OF THE DISTRICT WITH RESPECT TO THE 
DISTRICT NO. 5 FACILITIES, BE APPROVED?"

Number of votes for:      3
                         --------
Number of votes against:  0
                         --------

Question E:

"SHALL DAWSON RIDGE METROPOLITAN DISTRICT NO. 3, FOR PURPOSES OTHER THAN 
ENTERPRISES, BE PERMITTED TO MAINTAIN FISCAL YEAR SPENDING AND ANNUAL 
DISTRICT REVENUES FROM SOURCES NOT EXCLUDED FROM FISCAL YEAR SPENDING IN AN 
AMOUNT NOT TO EXCEED $1,000,000 IN 1995 AND EACH YEAR THEREAFTER, SUCH AMOUNT 
TO INCREASE ANNUALLY IN EACH YEAR AFTER 1995 IN AN AMOUNT NOT TO EXCEED THE 
APPLICABLE LIMITATIONS OF ARTICLE X, SECTION 20 OF THE COLORADO CONSTITUTION 
AND COLORADO LAW?"

Number of votes for:      3
                         --------
Number of votes against:  0
                         --------

                                       2
<PAGE>

                  BOARD OF CANVASSERS CERTIFICATE OF ELECTION RESULTS
                              FOR THE SPECIAL ELECTION
                          HELD TUESDAY, NOVEMBER 7, 1995
                                     CONTINUED

                                               1-11-103 AND 32-1-104(1), C.R.S.


(Signed)   /s/ DONETTE B. HUNTER
           --------------------------------
           Designated Election Official


(Signed)   CANDACE W. ADDLESPERGER
           --------------------------------
           Canvasser

(Signed)   
           --------------------------------
           Canvasser


R.S. WELLS CORP.  ATTN: SUE BLAIR
- ------------------------------------------------------------
Contact Person For District

6200 SOUTH SYRACUSE WAY, SUITE 150
GREENWOOD VILLAGE, CO  80111
- ------------------------------------------------------------
Business Address

(303) 779-4525
- ------------------------------------------------------------
Telephone Number




Prepare and deliver a Certificate of Election to those candidates receiving 
the highest number of votes.
Deposit one copy with the Clerk and Recorder of each county in which the 
special district is located.

Send one copy to:    Division of Local Government
                     1313 Sherman Street, Room 521
                     Denver, CO  80203


                                     3

<PAGE>

                    JUDGE'S CERTIFICATE OF ELECTION RETURNS

                                                             1-7-601, C.R.S.

IT IS HEREBY CERTIFIED by the undersigned, who conducted the election held in 
the DAWSON RIDGE METROPOLITAN DISTRICT NO. 3, (by mail ballot), in the county 
of Douglas, and state of Colorado, on the 7th day of November, in the 
year 1995, that after qualifying by swearing and subscribing to their Oaths 
of Office they opened the polls at 7:00 A.M., and that they kept the polls 
open continuously until the hour of 7:00 P.M. on said date, after which they 
counted the ballots cast for directors of said District and for any ballot 
issues and ballot questions submitted.

THAT THE VOTES CAST FOR AND AGAINST EACH BALLOT ISSUE AND BALLOT QUESTION 
SUBMITTED WERE AS FOLLOWS:

                            YES                         NO

Question A               3      Three               0       Zero
                    --------------------        --------------------
                    (Numeric & Spell Out)       (Numeric & Spell Out)


                            YES                         NO

Question B               3      Three               0       Zero
                    --------------------        --------------------
                    (Numeric & Spell Out)       (Numeric & Spell Out)


                            YES                         NO

Question C               3      Three               0       Zero
                    --------------------        --------------------
                    (Numeric & Spell Out)       (Numeric & Spell Out)


                            YES                         NO

Question D               3      Three               0       Zero
                    --------------------        --------------------
                    (Numeric & Spell Out)       (Numeric & Spell Out)


                            YES                         NO

Question E               3      Three               0       Zero
                    --------------------        --------------------
                    (Numeric & Spell Out)       (Numeric & Spell Out)




                                      1


<PAGE>

               JUDGE'S CERTIFICATE OF ELECTION RETURNS CONTINUED

                                                             1-7-601, C.R.S.

It is hereby identified and specified that:

                                                 Numeric

Total Number of Ballots Received from                    5
the Designated Election Official:                -------------------------

Total number of ballots voted:                           3
                                                 -------------------------

Unofficial ballots voted:                                0
                                                 -------------------------

Substitute ballots voted:                                0
                                                 -------------------------

Ballots delivered to electors:                           3
                                                 -------------------------

Spoiled ballots:                                         0
                                                 -------------------------

Ballots rejected for insufficient                        0
information                                      -------------------------

Challenged ballots:                                      0
                                                 -------------------------

Ballots not delivered to electors:                       2
                                                 -------------------------

Ballots returned to the Designated                       5
Election Official:                               -------------------------

(All unused ballots, spoiled ballots, and stubs of ballots voted shall be 
returned with the statement.)

Certified by us:

                                   ,   Election Judge
- -----------------------------------


  Donette B. Hunter                ,   Election Judge
- -----------------------------------

  Mary A. (Illegible)              ,   Election Judge
- -----------------------------------

      November 7, 1995

                                       Precinct Number if Applicable:  N/A
                                                                      ----


                                      2

<PAGE>

               BOARD OF CANVASSERS CERTIFICATE OF ELECTION RESULTS
                            FOR THE SPECIAL ELECTION
                         HELD TUESDAY, NOVEMBER 7, 1995


                                             1-11-103 AND 32-1-104(1),  C.R.S.

Dawson Ridge Metropolitan District No. 4, Douglas County, Colorado

Each of the undersigned members of the board of canvassers of the Dawson 
Ridge Metropolitan District No. 4 certifies that the following is a true and 
correct statement of the results of the Special Election for the above-named 
District, at which time the eligible electors of the District voted as 
indicated on the attached Judges' Certificate of Election Returns, for each 
question submitted.

Question A:

"SHALL DAWSON RIDGE METROPOLITAN DISTRICT NO. 4 ("DISTRICT") TAXES BE 
INCREASED $1,500,000 ANNUALLY COMMENCING IN 1995, FOR THE PURPOSE OF PAYING 
THE DISTRICT'S OBLIGATIONS IN CONNECTION WITH AN INTERGOVERNMENTAL SERVICES 
AGREEMENT BY AND BETWEEN THE DISTRICT, DAWSON RIDGE METROPOLITAN DISTRICT NO. 
5 ("DISTRICT NO. 5") AND ANY OTHER PARTIES THERETO WHEREBY THE DISTRICT 
AGREES TO PROVIDE FUNDS TO OPERATE AND MAINTAIN PARKS AND RECREATION 
FACILITIES AND EQUIPMENT ("DISTRICT NO. 5 FACILITIES") FOR THE BENEFIT OF THE 
DISTRICT WITH RESPECT TO THE DISTRICT NO. 5 FACILITIES AND SHALL THE PROCEEDS 
OF SUCH TAXES AND INVESTMENT INCOME THEREON, BE COLLECTED AND SPENT BY THE 
DISTRICT WITHOUT REGARD TO ANY EXPENDITURE, REVENUE-RAISING, OR OTHER 
LIMITATION CONTAINED WITHIN ARTICLE X, SECTION 20 OF THE COLORADO 
CONSTITUTION?"


Number of votes for:               2
                           ---------------------
Number of votes against:           0
                           ---------------------


Question B;

"SHALL DAWSON RIDGE METROPOLITAN DISTRICT NO. 4 ("DISTRICT") DEBT BE 
INCREASED $100,000,000 (PRINCIPAL AMOUNT) WITH A REPAYMENT COST OF 
$500,000,000 (MAXIMUM TOTAL DISTRICT COST), SUCH DEBT TO CONSIST OF BONDS OR 
OTHER EVIDENCES OF INDEBTEDNESS (INCLUDING WITHOUT LIMITATION AN 
INTERGOVERNMENTAL AGREEMENT OR AGREEMENT WITH DAWSON RIDGE METROPOLITAN 
DISTRICT NO. 1, DAWSON RIDGE METROPOLITAN DISTRICT NO. 2, DAWSON RIDGE 
METROPOLITAN DISTRICT NO. 3 AND DAWSON RIDGE METROPOLITAN DISTRICT NO. 5, OR 
ANY OR ALL OF THE FOREGOING) FOR THE PURPOSES OF DESIGNING, ACQUIRING, 
INSTALLING, CONSTRUCTING, EQUIPPING, OPERATING AND MAINTAINING WATER, 
SANITATION, STREET, TRAFFIC SAFETY, TRANSPORTATION, PARKS AND RECREATION AND 
FIRE PROTECTION FACILITIES AND EQUIPMENT WITHIN OR FOR THE BENEFIT OF THE 
DISTRICT, SUCH BONDS OR OTHER EVIDENCE OF INDEBTEDNESS TO BE ISSUED AT A 
MAXIMUM INTEREST RATE OF 45% PER ANNUM AND TO MATURE OR BE PAYABLE IN NOT 
MORE THAN 40 YEARS; AND SHALL THE PROCEEDS OF SUCH BONDS OR OTHER EVIDENCES 
OF INDEBTEDNESS, AND INVESTMENT INCOME THEREON, BE COLLECTED AND SPENT BY THE 
DISTRICT WITHOUT REGARD TO ANY EXPENDITURE, REVENUE-RAISING, OR OTHER 
LIMITATION CONTAINED WITHIN ARTICLE X, SECTION 20 OF THE COLORADO CONSTITUTION?


Number of votes for:               2
                           ---------------------
Number of votes against:           0
                           ---------------------


<PAGE>

                        JUDGE'S CERTIFICATE OF ELECTION RETURNS

                                                                1-7-601, C.R.S.

IT IS HEREBY CERTIFIED by the undersigned, who conducted the election held in 
the DAWSON RIDGE METROPOLITAN DISTRICT NO. 4, (by mail ballot), in the county 
of Douglas, and state of Colorado, on the 7th day of November, in the year 
1995, that after qualifying by swearing and subscribing to their Oaths of 
Office they opened the polls at 7:00 A.M., and that they kept the polls open 
continuously until the hour of 7:00 P.M. on said date, after which they 
counted the ballots cast for directors of said district and for any ballot 
issues and ballot questions submitted.

That the votes cast for and against each ballot issue and ballot question 
submitted were as follows:

                              YES                           NO

Question A               2         TWO                0        ZERO
                  -------------------------      -------------------------
                    (Numeric & Spell Out)          (Numeric & Spell Out)


                              YES                           NO

Question B               2         TWO                0        ZERO
                  -------------------------      -------------------------
                    (Numeric & Spell Out)          (Numeric & Spell Out)


                              YES                           NO

Question C               2         TWO                0        ZERO
                  -------------------------      -------------------------
                    (Numeric & Spell Out)          (Numeric & Spell Out)


                              YES                           NO

Question D               2         TWO                0        ZERO
                  -------------------------      -------------------------
                    (Numeric & Spell Out)          (Numeric & Spell Out)


                              YES                           NO

Question E               2         TWO                0        ZERO
                  -------------------------      -------------------------
                    (Numeric & Spell Out)          (Numeric & Spell Out)


                                       1

<PAGE>

                  BOARD OF CANVASSERS CERTIFICATE OF ELECTION RESULTS
                              FOR THE SPECIAL ELECTION
                          HELD TUESDAY, NOVEMBER 7, 1995

                                               1-11-103 AND 32-1-104(1), C.R.S.

Question C:

""SHALL DAWSON RIDGE METROPOLITAN DISTRICT NO. 4 ("DISTRICT") DEBT BE 
INCREASED $100,000,000, WITH A REPAYMENT COST OF $500,000,000 (MAXIMUM TOTAL 
DISTRICT COST), SUCH DEBT TO CONSIST OF EVIDENCES OF INDEBTEDNESS (INCLUDING 
WITHOUT LIMITATION INTERGOVERNMENTAL AGREEMENT OR AGREEMENTS WITH DAWSON 
RIDGE METROPOLITAN DISTRICT. NO. 1, DAWSON RIDGE METROPOLITAN DISTRICT NO. 2, 
DAWSON RIDGE METROPOLITAN DISTRICT NO. 3 AND DAWSON RIDGE METROPOLITAN 
DISTRICT NO. 5 OR ANY OR ALL OF THE FOREGOING) FOR THE PURPOSES OF DESIGNING, 
ACQUIRING, INSTALLING, CONSTRUCTING, EQUIPPING, OPERATING AND MAINTAINING 
WATER, SANITATION, STREET, TRAFFIC SAFETY, TRANSPORTATION, PARKS AND 
RECREATION AND FIRE PROTECTION FACILITIES AND EQUIPMENT WITHIN OR FOR THE 
BENEFIT OF THE DISTRICT. SUCH EVIDENCE OF INDEBTEDNESS TO BE ISSUED AT A 
MAXIMUM NET EFFECTIVE INTEREST RATE OF 45% PER ANNUM AND TO MATURE OR BE 
PAYABLE IN NOT MORE THAN 40 YEARS; AND SHALL THE PROCEEDS OF SUCH EVIDENCE OF 
INDEBTEDNESS, AND ANY INVESTMENT INCOME THEREON, BE COLLECTED AND SPENT BY 
THE DISTRICT WITHOUT REGARD TO ANY EXPENDITURE, REVENUE-RAISING, OR OTHER 
LIMITATION CONTAINED WITHIN ARTICLE X, SECTION 20 OF THE COLORADO 
CONSTITUTION?"


Number of votes for:      2
                         --------
Number of votes against:  0
                         --------
Question D:

"SHALL THE EXECUTION, DELIVERY AND PERFORMANCE BY DAWSON RIDGE METROPOLITAN 
DISTRICT NO. 4 ("DISTRICT") OF AN INTERGOVERNMENTAL AGREEMENT BY AND BETWEEN 
THE DISTRICT, DAWSON RIDGE METROPOLITAN DISTRICT NO. 5 ("DISTRICT NO. 5") AND 
ANY OTHER PARTIES THERETO WHEREBY THE DISTRICT AGREES TO PROVIDE FUNDS TO 
OPERATE AND MAINTAIN PARKS AND RECREATION FACILITIES AND EQUIPMENT 
("DISTRICT NO. 5 FACILITIES") FOR THE BENEFIT OF THE DISTRICT WITH RESPECT TO 
THE DISTRICT NO. 5 FACILITIES, BE APPROVED?"

Number of votes for:      2
                         --------
Number of votes against:  0
                         --------

                                       2


<PAGE>



               BOARD OF CANVASSERS CERTIFICATE OF ELECTION RESULTS
                             FOR THE SPECIAL ELECTION
                         HELD TUESDAY, NOVEMBER 7, 1995
                                   CONTINUED


                                              1-11-103 AND 32-1-104(1), C.R.S.


Question E:

"SHALL DAWSON RIDGE METROPOLITAN DISTRICT NO. 4 FOR PURPOSES OTHER THAN 
ENTERPRISES, BE PERMITTED TO MAINTAIN FISCAL YEAR SPENDING AND ANNUAL 
DISTRICT REVENUES FROM SOURCES NOT EXCLUDED FROM FISCAL YEAR SPENDING IN AN 
AMOUNT NOT TO EXCEED $1,000,000 IN 1995 AND EACH YEAR THEREAFTER, SUCH AMOUNT 
TO INCREASE ANNUALLY IN EACH YEAR AFTER 1995 IN AN AMOUNT NOT TO EXCEED THE 
APPLICABLE LIMITATIONS OF ARTICLE X, SECTION 20 OF THE COLORADO CONSTITUTION 
AND COLORADO LAW?"

Number of votes for:      2
                         --------
Number of votes against:  0
                         --------


(Signed)   DONETTE B. HUNTER
           --------------------------------
           Designated Election Official


(Signed)   CANDACE M. ADDELSPERGER
           --------------------------------
           Canvasser

(Signed)   
           --------------------------------
           Canvasser


R.S. WELLS CORP.  ATTN: SUE BLAIR
- ------------------------------------------------------------
Contact Person For District

6200 SOUTH SYRACUSE WAY, SUITE 150
GREENWOOD VILLAGE, CO  80111
- ------------------------------------------------------------
Business Address

(303) 779-4525
- ------------------------------------------------------------
Telephone Number



Prepare and deliver a Certificate of Election to those candidates receiving 
the highest number of votes.
Deposit one copy with the Clerk and Recorder of each county in which the 
special district is located.

Send one copy to:    Division of Local Government
                     1313 Sherman Street, Room 521
                     Denver, CO  80203


                                     3

<PAGE>

               JUDGE'S CERTIFICATE OF ELECTION RETURNS CONTINUED

                                                                1-7-601, C.R.S.


It is hereby identified and specified that:

                                                Numeric

Total Number of Ballots Received from
the Designated Election Official:                   5
                                                ---------------------

Total number of ballots voted:                      2
                                                ---------------------

Unofficial ballots voted:                           0
                                                ---------------------

Substitute ballots voted:                           0
                                                ---------------------

Ballots delivered to electors:                      3
                                                ---------------------

Spoiled ballots:                                    0
                                                ---------------------

Ballots rejected for insufficient
information:                                        1
                                                ---------------------

Challenged ballots:                                 0
                                                ---------------------

Ballots not delivered to electors:                  2
                                                ---------------------

Ballots returned to the Designated
Electon Official:                                   5
                                                ---------------------

(All unused ballots, spoiled ballots, and stubs of ballots voted shall be 
returned with the statement.)

Certified by us:


                                           , Election Judge
- -------------------------------------------

 /s/ DONETTE B. HUNTER                     , Election Judge
- -------------------------------------------

 /s/ MARY A. HUPP                          , Election Judge
- -------------------------------------------

             November 7, 1995

                                        Precinct Number if Applicable:   N/A
                                                                      ---------


                                       2

<PAGE>

              BOARD OF CANVASSERS CERTIFICATE OF ELECTION RESULTS
                           FOR THE SPECIAL ELECTION
                        HELD TUESDAY, NOVEMBER 7, 1995

                                               1-11-103 AND 32-1-104(1), C.R.S.

Dawson Ridge Metropolitan District No. 5, Douglas County, Colorado

Each of the undersigned members of the board of canvassers of the Dawson 
Ridge Metropolitan District No. 5 certifies that the following is a true and 
correct statement of the results of the Special Election for the above-named 
District, at which time the eligible electors of the District voted as 
indicated on the attached Judges' Certificate of Election Returns, for each 
question submitted:

Question A:

"SHALL DAWSON RIDGE METROPOLITAN DISTRICT NO. 5 ("DISTRICT") DEBT BE 
INCREASED $100,000,000 (PRINCIPAL AMOUNT) WITH A REPAYMENT COST OF 
$500,000,000 (MAXIMUM TOTAL DISTRICT COST), SUCH DEBT TO CONSIST OF BONDS OR 
OTHER EVIDENCES OF INDEBTEDNESS (INCLUDING WITHOUT LIMITATION AN 
INTERGOVERNMENTAL AGREEMENT OR AGREEMENTS WITH DAWSON RIDGE METROPOLITAN 
DISTRICT NO. 1, DAWSON RIDGE METROPOLITAN DISTRICT NO. 2, DAWSON RIDGE 
METROPOLITAN DISTRICT NO. 3 AND DAWSON RIDGE METROPOLITAN DISTRICT NO. 4, OR 
ANY OR ALL OF THE FOREGOING) FOR THE PURPOSES OF DESIGNING, ACQUIRING, 
INSTALLING, CONSTRUCTING, EQUIPPING, OPERATING AND MAINTAINING WATER, 
SINITATION, STREET, TRAFFIC SAFETY, TRANSPORTATION, PARKS AND RECEATION AND 
FIRE PROTECTION FACILITIES AND EQUIPMENT WITHING OR FOR THE BENEFIT OF THE 
DISTRICT; SUCH BONDS OR OTHER EVIDENCE OF INDEBTEDNESS TO BE ISSUED AT A 
MIXIMUM NET EFFECTIVE INTEREST RATE OF 45% PER ANNUM AND TO MATURE OR BE 
PAYABLE IN NOT MORE THAN 40 YEARS; AND SHALL THE PROCEEDS OF SUCH BONDS OR 
OTHER EVIDENCES OF INDEBTEDNESS, AND INVESTMENT INCOME THEREON, BE COLLECTED 
AND SPENT BY THE DISTRICT WITHOUT REGARD TO ANY EXPENDITURE, REVENUE-RAISING, 
OR OTHER LIMITATION CONTAINED WITHIN ARTICLE X, SECTION 20 OF THE COLORADO 
CONSTITUTION?

Number of votes for:           3
                        -----------------

Number of votes against:       0
                        -----------------

Question B:

"SHALL DAWSON RIDGE METROPOLITAN DISTRICT NO. 5 ("DISTRICT") DEBT BE 
INCREASED $100,000,000, WITH A REPAYMENT COST OF $500,000,000, (MAXIMUM TOTAL 
DISTRICT COST), SUCH DEBT TO CONSIST OF EVIDENCES OF INDEBTEDNESS (INCLUDING 
WITHOUT LIMITATION INTERGOVERNMENTAL AGREEMENT OR AGREEMENTS WITH DAWSON 
RIDGE METROPOLITAN DISTRICT NO. 1, DAWSON RIDGE METROPOLITAN DISTRICT NO. 2, 
DAWSON RIDGE METROPOLITAN DISTRICT NO. 3 AND DAWSON RIDGE METROPOLITAN 
DISTRICT NO. 4, OR ANY OR ALL OF THE FOREGOING) FOR THE PURPOSES OF 
DESIGNING, ACQURING, INSTALLING, CONSTRUCTING, EQUIPPING, OPERATING AND 
MAINTAINING WATER, SANITATION, STREET, TRAFFIC SAFETY, TRANSPORTATION, PARKS 
AND RECREATION AND FIRE PROTECTION FACILITIES AND EQUIPMENT WITHIN OR FOR THE 
BENEFIT OF THE DISTRICT; SUCH EVIDENCE OF INDEBTEDNESS TO BE ISSUED AT A 
MAXIMUM NET EFFECTIVE INTEREST RATE OF 45% PER ANNUM AND TO MATURE OR BE 
PAYABLE IN NOT MORE THAN 40 YEARS; AND SHALL THE PROCEEDS OF SUCH EVIDENCES 
OF INDEBTEDNESS, AND ANY INVESTMENT INCOME THEREON, BE COLLECTED AND SPENT BY 
THE DISTRICT WITHOUT REGARD TO ANY EXPENDITURE, REVENUE-RAISING, OR OTHER 
LIMITATION CONTAINED WITHIN ARTICLE X, SECTION 20 OF THE COLORADO 
CONSTITUTION?"

<PAGE>


              BOARD OF CANVASSERS CERTIFICATE OF ELECTION RESULTS
                          FOR THE SPECIAL ELECTION
                       HELD TUESDAY, NOVEMBER 8, 1994
                                  CONTINUED

                                               1-11-1-3 AND 32-1-104(1), C.R.S.


Number of votes for:           3
                        -----------------

Number of votes against:       0
                        -----------------

Question C:

"SHALL THE EXECUTION, DELIVERY AND PERFORMANCE BY DAWSON RIDGE METROPOLITAN 
DISTRICT NO. 5 ("DISTRICT") OF A RECREATIONAL FACILITIES SERVICES AGREEMENT 
BY AND BETWEEN THE DISTRICT AND A NONPROFIT CORPORATION ORGANIZED FOR THE 
BENEFIT OF THE DISTRICT AND ITS INHABITANTS, WHEREBY THE DISTRICT AGREES TO 
PROVIDE FUNDS TO OPERATE AND MAINTAIN PARKS AND RECREATION FACILITIES AND 
EQUIPMENT ("DISTRICT FACILITIES") IN OR FOR THE BENEFIT OF THE DISTRICT AND 
PROVIDE ALL SERVICES WITH RESPECT TO THE DISTRICT FACILITIES, BE APPROVED?"

Number of votes for:           3
                        -----------------

Number of votes against:       0
                        -----------------

Question D:

"SHALL DAWSON RIDGE METROPOLITAN DISTRICT NO. 5, FOR PURPOSES OTHER THAN 
ENTERPRISES, BE PERMITTED TO MAINTAIN FISCAL YEAR SPENDING AND ANNUAL 
DISTRICT REVENUES FROM SOURCES NOT EXCLUDED FROM FISCAL YEAR SPENDING IN AN 
AMOUNT NOT TO EXCEED $2,000,000 IN 1995 AND EACH YEAR THEREATER, SUCH AMOUNT 
TO INCREASE ANNUALLY IN EACH YEAR AFTER 1995 IN AN AMOUNT NOT OT EXCEED THE 
APPLICABLE LIMITATIONS OF ARTICLE X, SECTION 20 OF THE COLORADO CONSTITUTION 
AND COLORADO LAW?"

Number of votes for:           3
                        -----------------

Number of votes against:       0
                        -----------------


(Signed)   /s/ DONETTE B. HUNTER
         --------------------------------------------
         Designated Election Official

(Signed)   /s/ CANDACE W. ADDLESPERGER
         --------------------------------------------
         Canvasser

(Signed) 
         --------------------------------------------
         Canvasser


                                       2

<PAGE>

                  BOARD OF CANVASSERS CERTIFICATE OF ELECTION RESULTS
                              FOR THE SPECIAL ELECTION
                          HELD TUESDAY, NOVEMBER 8, 1994

                                               1-11-103 AND 32-1-104(1), C.R.S.

R.S. WELLS CORP.  ATTN: SUE BLAIR
- ------------------------------------------------------------
Contact Person For District

6200 SOUTH SYRACUSE WAY, SUITE 150
GREENWOOD VILLAGE, CO  80111
- ------------------------------------------------------------
Business Address

(303) 779-4525
- ------------------------------------------------------------
Telephone Number

Prepare and deliver a Certificate of Election to those candidates receiving 
the highest number of votes. Deposit one copy with the Clerk and Recorder of 
each county in which the special district is located.

Send one copy to:    Division of Local Government
                     1313 Sherman Street, Room 521
                     Denver, CO  80203




                                       3

<PAGE>

                   JUDGE'S CERTIFICATE OF ELECTION RETURNS

                                                               1-7-601, C.R.S.

IT IS HEREBY CERTIFIED by the undersigned, who conducted the election held in 
the DAWSON RIDGE METROPOLITAN DISTRICT NO. 5, (by mail ballot), in the county 
of Douglas, and state of Colorado, on the 7th day of November, in the year 
1995, that after qualifying by swearing and subscribing to their Oaths of 
Office they opened the polls at 7:00 A.M., and that they kept the polls open 
continuously until the hour of 7:00 P.M. on said date, after which they 
counted the ballots cast for directors of said District and for any ballot 
issues and ballot questions submitted.

That the votes cast for and against each ballot issue and ballot question 
submitted were as follows:

                              YES                           NO

Question A               3         THREE                0        ZERO
                  -------------------------      -------------------------
                    (Numeric & Spell Out)          (Numeric & Spell Out)


                              YES                           NO

Question B               3         THREE                0        ZERO
                  -------------------------      -------------------------
                    (Numeric & Spell Out)          (Numeric & Spell Out)


                              YES                           NO

Question C               3         THREE                0        ZERO
                  -------------------------      -------------------------
                    (Numeric & Spell Out)          (Numeric & Spell Out)


                              YES                           NO

Question D               3         THREE                0        ZERO
                  -------------------------      -------------------------
                    (Numeric & Spell Out)          (Numeric & Spell Out)


                                         1

<PAGE>

                JUDGE'S CERTIFICATE OF ELECTION RETURNS CONTINUED

                                                                1-7-601, C.R.S.


It is hereby identified and specified that:

                                                            Numeric

Total Number of Ballots Received from
the Designated Election Official:                             5
                                                           --------------
Total number of ballots voted:                                3
                                                           --------------
Unofficial ballots voted:                                     0
                                                           --------------
Substitute ballots voted:                                     0
                                                           --------------
Ballots delivered to electors:                                3
                                                           --------------
Spoiled ballots:                                              0
                                                           --------------
Ballots rejected for insufficient
information:                                                  0
                                                           --------------
Challenged ballots:                                           0
                                                           --------------
Ballots not delivered to electors:                            2
                                                           --------------
Ballots returned to the Designated
Election Official:                                            5
                                                           --------------

(All unused ballots, spoiled ballots, and stubs of ballots voted shall be 
returned with the statement.)

Certified by us:


MARY A. HUPP
- --------------------------------------------, Election Judge

DONETTE B. HUNTER
- --------------------------------------------, Election Judge


- --------------------------------------------, Election Judge
                November 7, 1995

                                      Precinct Number if Applicable:  N/A
                                                                     -----

                                        2

<PAGE>














                              DEVELOPMENT AGREEMENT

                            Dated as of March 1, 1996


                                     between


                     DOUGLAS COUNTY DEVELOPMENT CORPORATION
                        A Corporation Organized Under the
                         Laws of the State of Colorado,

                              C. ROGER ADDLESPERGER
                         and such Owners of the Property
                   described herein as executed this Agreement

                                       and


                 CASTLE ROCK RANCH PUBLIC IMPROVEMENTS AUTHORITY
    A Nonprofit Corporation organized under the laws of the State of Colorado

<PAGE>

                                TABLE OF CONTENTS

                                                                            PAGE

ARTICLE I - DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . .   2

ARTICLE II - DEVELOPMENT CHARGE OBLIGATION . . . . . . . . . . . . . . . . .   5
     Section 2.1    ESTABLISHMENT AND ACCEPTANCE OF THE DEVELOPMENT CHARGE
                    OBLIGATION . . . . . . . . . . . . . . . . . . . . . . .   5

ARTICLE III - DEVELOPMENT CHARGE LIEN. . . . . . . . . . . . . . . . . . . .   6
     Section 3.1    GRANT OF DEVELOPMENT CHARGE LIEN . . . . . . . . . . . .   6

ARTICLE IV - COVENANTS OF TITLE. . . . . . . . . . . . . . . . . . . . . . .   7
     Section 4.1    COVENANTS OF TITLE . . . . . . . . . . . . . . . . . . .   7

ARTICLE V - DEVELOPMENT CHARGES. . . . . . . . . . . . . . . . . . . . . . .   8
     Section 5.1    COLLECTION OF DEVELOPMENT CHARGES. . . . . . . . . . . .   8
     Section 5.2    DETERMINATION OF DEVELOPMENT CHARGES . . . . . . . . . .   8
     Section 5.3    ADDITIONAL PROPERTY. . . . . . . . . . . . . . . . . . .   8
     Section 5.4    SALE OR LEASE OF THE PROPERTY. . . . . . . . . . . . . .   8
     Section 5.5    LIMITATIONS ON DEVELOPMENT CHARGE OBLIGATIONS. . . . . .   8
     Section 5.6    CERTIFICATION OF OUTSTANDING DEVELOPMENT CHARGES . . . .   9

ARTICLE VI - REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . . . . .  10
     Section 6.1    GENERALLY. . . . . . . . . . . . . . . . . . . . . . . .  10
     Section 6.2    DEFAULTS BY ANY OWNER OF THE PROPERTY AND REMEDIES OF
                    THE DISTRICT . . . . . . . . . . . . . . . . . . . . . .  10
     Section 6.3    INTEREST PAYABLE UPON DEFAULT OF DEVELOPMENT CHARGE
                    OBLIGATION . . . . . . . . . . . . . . . . . . . . . . .  11
     Section 6.4    LIMITATIONS ON FORECLOSURE RIGHTS OF THE AUTHORITY . . .  11
     Section 6.5    METHODS OF FORECLOSURE . . . . . . . . . . . . . . . . .  11
     Section 6.6    OPTION AND RIGHT OF THE DISTRICT TO PURSUE SEPARATE OR
                    BULK FORECLOSURES; OTHER RIGHTS. . . . . . . . . . . . .  12
     Section 6.7    APPROVALS. . . . . . . . . . . . . . . . . . . . . . . .  13

ARTICLE VII - EXTENSION OF LIEN TO ADDITIONAL PROPERTY . . . . . . . . . . .  14
     Section 7.1    AMENDMENT OR SUPPLEMENT TO INCLUDE ADDITIONAL PROPERTY .  14

ARTICLE VIII - GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . .  15
     Section 8.1    FURTHER ASSURANCES . . . . . . . . . . . . . . . . . . .  15
     Section 8.2    BINDING NATURE OF THE DEVELOPMENT CHARGE LIEN. . . . . .  15
     Section 8.3    SEVERABILITY . . . . . . . . . . . . . . . . . . . . . .  15
     Section 8.4    EXECUTION IN COUNTERPARTS. . . . . . . . . . . . . . . .  15
     Section 8.5    FUTURE EXECUTION OF DOCUMENTATION. . . . . . . . . . . .  16
     Section 8.6    ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . .  16


                                       i

<PAGE>

     THIS DEVELOPMENT AGREEMENT (this "Development Agreement"), is made as of
the 1st day of March, 1996, by and between DOUGLAS COUNTY DEVELOPMENT
CORPORATION (the "Developer"), a corporation organized under the laws of the
State of Colorado, C. ROGER ADDLESPERGER, and such other owners of the Property
(as defined below) who execute this Development Agreement (the "Owners"), and
CASTLE ROCK RANCH PUBLIC IMPROVEMENTS AUTHORITY (the "Authority"), a nonprofit
corporation organized under the laws of the State of Colorado.


                                    RECITALS

     A.     The Developer has been duly organized under the laws of the State
of Colorado.

     B.     The Authority is a nonprofit corporation organized to act for the
benefit of Dawson Ridge Metropolitan District No. 5 (the "District").

     C.     The District has entered into an Operating Agreement (the
"Operating Agreement") and a Recreational Facilities Agreement (the
"Recreational Facilities Agreement"), both dated as of March 1, 1996, and
between the District and the Authority, and an Intergovernmental Agreement (the
"Intergovernmental Agreement"), dated as of March 1, 1996, between the District
and Dawson Ridge Metropolitan Districts Nos. 1-4 (the "Related Districts" and,
together with the District, the "Dawson Ridge Districts").

     D.     The Authority proposes to acquire, construct and install on behalf
of the District certain public improvements consisting of parks and recreational
facilities, together with all necessary, incidental and appurtenant properties,
facilities, equipment and costs (the "Project"), all located or to be located
within the Dawson Ridge Districts and which will benefit the Property (as
defined below), and intends to issue bonds (the "Bonds") to finance the costs of
such recreational facilities.

     E.     The Dawson Ridge Districts are authorized to levy ad valorem taxes
against all of the taxable property within the Dawson Ridge Districts, including
that owned by the Developer and the Owners.

     F.     The Dawson Ridge Districts anticipate requesting that the Town of
Castle Rock, Colorado (the "Town") approve an amendment to the Service Plan of
each of the Dawson Ridge Districts (the "Service Plan Amendment") to allow the
Dawson Ridge Districts to levy fees and taxes required by the Operating
Agreement and the Intergovernmental Agreement.

     G.     The Developer and the Owners are the owners in fee simple of
certain real property located within the Dawson Ridge Districts described in
EXHIBIT A hereto (the "Property").

<PAGE>

     H.     It is proposed that, until the Service Plan Amendment is approved
or the mill levy described in the Operating Agreement and the Intergovernmental
Agreement is otherwise imposed in the maximum amount authorized therein, certain
charges will be assessed upon the Property (said charges are hereinafter
referred to as the "Development Charges") in an amount equivalent to the taxes
proposed to be levied against the Property pursuant to the Operating Agreement
and the Intergovernmental Agreement.

     I.     The Dawson Ridge Districts have approved entering into an agreement
imposing on the Property an assessment in lieu of taxes and have taken all
action necessary and sufficient to authorize, approve and consent to the
execution, delivery and performance of this Development Agreement.

     J.     The Authority, the Owners and the Developer desire to provide for
the imposition of the Development Charges against the Property.

     K.     The Developer and the Owners desire to grant to the Authority, for
the purpose of providing security for the payment of the Development Charges, a
good and sufficient lien upon the Property, subject to no encumbrances other
than the Permitted Encumbrances, under and pursuant to this Development
Agreement.

     L.     To facilitate the imposition and collection of the Development
Charges the parties contemplate that this Development Agreement may be executed
and recorded in counterparts.

     M.     The Authority, the Owners and the Developer have taken all action
necessary and sufficient to authorize, approve and direct the execution,
delivery and performance of this Development Agreement.

     N.     The Authority has authorized, approved and directed all actions to
be taken by the District in connection with the assessment of the Development
Charges.

     O.     The payment of the Development Charges will be secured by this
Development Agreement.

            NOW, THEREFORE, for and in consideration of the mutual premises and
covenants herein contained, the parties hereto agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

     Unless the context otherwise requires, the following words and phrases
shall have the following meanings:


                                       2

<PAGE>

            "Authority" means Castle Rock Ranch Public Improvements Authority,
a nonprofit corporation organized under the laws of the State, and its
successors and assigns.

            "Bonds" shall mean the Authority's Public Facilities Revenue Bonds
Series 1996 issued in the aggregate original principal amount of $66,975,000.

            "Credit Enhancement Provider" shall mean BFC Guaranty Corp., a
Delaware corporation.

            "Dawson Ridge Districts" shall mean the District and the Related
Districts.

            "Development Agreement" means this Development Agreement, dated as
of March 1, 1996, between the Authority, the Owners and the Developer.

            "Development Charges" means the payments in lieu of taxes herein
described equal to the taxes proposed to be levied but not in fact levied under
the Operating Agreement and the Intergovernmental Agreement allocated against
the Property.

            "Development Charge Lien" means the lien upon the Property created
pursuant to this Development Agreement.

            "Development Charge Obligation" means the obligation to pay the
Development Charges with respect to the Property or the parcels, lots or tracts
comprising the Property under this Development Agreement, together with interest
as set forth in Section 6.3 hereof and all other costs of collection incurred by
the Authority.  The Development Charge Obligation is not a personal obligation
of the Developer or any other owner of the Property or any parcel, lot or tract
constituting a portion of the Property but is secured only by the Development
Charge Lien.

            "Developer" means Douglas County Development Corporation, a
corporation organized under the laws of the State of Colorado, and its
successors and assigns.

            "District" means Dawson Ridge Metropolitan District No. 5, Douglas
County, Colorado, a quasi-municipal corporation and a political subdivision
organized under the laws of the State, and its successors and assigns.

            "Holder" means the owner or beneficiary of any mortgage, deed of
trust or other lien securing construction or permanent financing of the Property
or any portion thereof or any improvements thereon who provides written notice
to the Authority of such Holder's lien and of an address where notices can be
provided to the Holder.

            "Intergovernmental Agreement" means the Intergovernmental
Agreement, dated as of March 1, 1996, between the District and the Related
Districts.


                                       3

<PAGE>

            "Operating Agreement" means the Operating Agreement, dated as of
March 1, 1996, between the District and the Authority.

            "Owners" means C. Roger Addlesperger, and such owners of the
Property as execute this Development Agreement, and their successors and assigns
hereunder.

            "Payment Date" means the date on which the Development Charges are
due and payable, which shall be One Hundred Eighty (180) days after delivery of
notice of the amount of Development Charges by the District to the Developer or
any subsequent owner of the Property or of any parcel, lot or tract constituting
a portion of the Property.

            "Penalty Rate" means fifteen percent (15%) per annum or such lower
rate as shall at the time be the maximum lawful rate under the laws of the State
and any applicable federal law.

            "Permitted Encumbrances" means, as of any particular time, (i)
liens for taxes and assessments not then delinquent, (ii) the lien created by
this Development Agreement, (iii) encumbrances and/or liens set forth on EXHIBIT
B attached hereto, (iv) presently existing or future utility, access and other
easements and rights-of-way, restrictions and exceptions which do not
unreasonably interfere with or impair the use of the Property, (v) such minor
defects, irregularities, encumbrances and clouds on title as normally exist with
respect to property similar in character to the Property and which do not
materially impair the value of the Property, and (vi) any lien or encumbrance
recorded subsequent to this Development Agreement or made subordinate thereto.

            "Person" means any individual, corporation, partnership, joint
venture, association, limited liability company, joint stock company, trust,
unincorporated organization or any other person or any governmental authority or
any agency, instrumentality or political subdivision thereof.

            "Project" means those certain public improvements consisting of
recreational facilities, together with all necessary, incidental and appurtenant
properties, facilities, equipment and costs, all located or to be located within
the District and which will benefit the Property.

            "Related Districts" shall mean Dawson Ridge Metropolitan Districts
Nos. 1-4, and their successors and assigns.

            "Service Plan Amendment" shall have the meaning described in
Recital E hereto.

            "State" means the State of Colorado.

            "Town" means the Town of Castle Rock, Colorado.


                                       4

<PAGE>

                                  ARTICLE II

                        DEVELOPMENT CHARGE OBLIGATION

            Section 2.1  ESTABLISHMENT AND ACCEPTANCE OF THE DEVELOPMENT CHARGE
OBLIGATION.  Each parcel, lot or tract constituting a portion of the Property
shall have a Development Charge Obligation under this Development Agreement
equal to the amount of the Development Charges payable in respect of such
parcel, lot or tract in accordance with Article V hereof, which obligation shall
be secured by the Development Charge Lien created hereunder.  The Developer and
the Owners for and on behalf of themselves, their successors and assigns, hereby
accept and acknowledge the Development Charge Obligation with respect to the
Property, and agrees that the Property and each such parcel, lot or tract shall
be bound thereby.

            Section 2.2  DEVELOPMENT CHARGE OBLIGATION FOR OTHER PARCELS. 
Developer shall use its best efforts to cause the owners of the property in the
Dawson Ridge Districts not owned by the Developer (other than the Authority) to
enter into agreements with the Authority substantially the same as this
Development Agreement (except for this Section 2.2).











                                       5


<PAGE>

                                   ARTICLE III

                             DEVELOPMENT CHARGE LIEN

            Section 3.1  GRANT OF DEVELOPMENT CHARGE LIEN.  In consideration 
of the Authority issuing the Bonds and undertaking the financial obligations 
set forth therein relating to the Project which will benefit the Property and 
the owners, residents, tenants and occupants thereof, and to secure the 
payment of the Development Charge Obligation in accordance with this 
Development Agreement and the performance of any and all other covenants, 
agreements, warranties and conditions of the Developer and the Owners 
contained in this Development Agreement, the Developer and the Owners do 
hereby ENCUMBER AND MORTGAGE unto the Authority, their successors and 
assigns, the Property, all situated in the County of Douglas, State of 
Colorado, and described in EXHIBIT A hereto, together with all improvements, 
fixtures and other property, real and personal, owned by the Developer or the 
Owners, which may belong to, or be or hereafter become a part thereof;

            TO HAVE AND TO HOLD THE SAME, together with all and singular the 
privileges and appurtenances thereunto belonging, including, but not limited 
to, all present and future improvements, and all easements, servient estates 
and rights-of-way thereunto belonging or which may be hereafter acquired or 
used or enjoyed therewith;

            SUBJECT, HOWEVER, TO THE CONDITION that the Development Charge 
Lien hereby granted shall automatically cease, terminate and be released upon 
the occurrence of any of the following events:  (i) the Bonds are no longer 
outstanding and the Credit Enhancement Provider has consented to the release 
of the Development Charge Lien; (ii) the Credit Enhancement Provider has 
consented to the release of the Development Charge Lien and if, in the 
opinion of nationally recognized bond counsel, the release of the Development 
Charge Lien will not cause interest on the Bonds to be includable in gross 
income for federal income tax purposes, (iii) the Service Plan Amendment 
authorizing the imposition of the mill levy provided for in the Operating 
Agreement and the Intergovernmental Agreement has been formally approved by 
the Town; or (iv) if, in the opinion acceptable to the District of counsel 
acceptable to the District, the imposition of the mill levy as described in 
the Operating Agreement and the Intergovernmental Agreement is otherwise 
valid and enforceable without regard to the Service Plan Amendment.  Upon the 
cessation of the Development Charge Lien, the Authority or its assigns shall 
execute and record all documents necessary to evidence the release of the 
Development Charge Lien of record.

                                        6

<PAGE>

                                   ARTICLE IV

                               COVENANTS OF TITLE

            Section 4.1  COVENANTS OF TITLE.  The Developer and the Owners 
covenant and agree to and with the Authority that the Developer and the 
Owners hold all parcels, lots or tracts comprising the Property by title in 
fee simple, subject only to the Permitted Encumbrances; that they have good 
right and lawful authority to encumber and mortgage the same; that the 
Property is free and clear of all liens and encumbrances except Permitted 
Encumbrances; that the Developer and the Owners will warrant and defend the 
same against the lawful claims of all Persons; that the Developer and the 
Owners or their successors or assigns will timely pay all taxes and 
assessments, including the Development Charges, levied on the Property; and 
that the Developer and the Owners or their successors or assigns will pay all 
the reasonable costs, charges, attorneys fees and expenses incurred by the 
Corporation in any foreclosure action or other suit or proceeding, by reason 
hereof, and in case of failure to do so, the same shall become a part of the 
Development Charge Obligation of the Developer and the Owners and their 
successors or assigns, as the case may be, and shall be secured by the 
Development Charge Lien created hereunder.

                                        7
<PAGE>

                                    ARTICLE V

                               DEVELOPMENT CHARGES

            Section 5.1  COLLECTION OF DEVELOPMENT CHARGES.  Until such time 
as the Development Charge Lien is released as provided in Article III above, 
the Authority shall be entitled to collect or cause to be collected in 
accordance with this Development Agreement the Development Charges payable in 
respect of the Property or any parcel, lot or tract constituting a portion of 
the Property, which charges shall be assessed and paid within fifteen (15) 
days after any applicable Payment Date.

            Section 5.2  DETERMINATION OF DEVELOPMENT CHARGES.  Development 
Charges shall be assessed by the Authority against the Property in an annual 
amount equivalent to the amount the Dawson Ridge Districts would collect if 
they were to impose a mill levy (not to exceed 35 mills) against the Property 
pursuant to the Operating Agreement and the Intergovernmental Agreement 
(assuming for this purpose that they are effective at the maximum mill levy 
authorized thereunder) less the amount collected by any mill levy actually 
imposed by the Dawson Ridge Districts pursuant to such agreements.  In the 
event of a change in the method for determining assessed value or the ratio 
of valuation for assessment, the maximum mill levy shall be adjusted to 
account for such revision so that the Development Charges imposed by the 
Authority shall be determined as if such change had not occurred.  The total 
Development Charges to be imposed in any year by the Authority against the 
Property shall be determined by its Board of Directors but in no event shall 
such amount be less than the amount required to pay the "Additional Interest" 
as defined in the Indenture of Trust in regard to the Bonds to the extent 
that such amount can be levied with a levy not to exceed 35 mills.

            Section 5.3  ADDITIONAL PROPERTY.  In the event that additional 
parcels, lots or tracts of land become a part of the Property by amendment or 
supplement to this Development Agreement, the Development Charge Obligation 
shall be assessed against each parcel, lot or tract relative to all Included 
Property served by the Project, such benefits to be determined in the manner 
set forth in Section 5.2 above.

            Each owner of the Property or any parcel, lot or tract 
constituting a portion of the Property shall pay its allocable share (as 
determined by the District) of the Development Charge within fifteen (15) 
days after the applicable Payment Date.  The Authority shall cause billings 
to be sent to each owner of the Property or any parcel, lot or tract 
constituting a portion of the Property, setting forth the amount of the 
Development Charges required to be paid and the applicable Payment Date.

            Section 5.4  SALE OR LEASE OF THE PROPERTY.  The Development 
Charge Lien shall be and remain a lien upon each parcel of the Property, 
subject to no encumbrances or lease of such parcel of the Property to any 
third party except those of the Permitted Encumbrances which are senior to 
the Development Charge Lien, whether such transaction shall be by lease, 
deed, contract for deed or other conveyance.

                                       8
<PAGE>

            Section 5.5  LIMITATIONS ON DEVELOPMENT CHARGE OBLIGATIONS.  The 
Authority covenants, agrees and consents that if at any time the Property is 
comprised of more than one parcel, lot or tract, then each parcel, lot or 
tract constituting a portion of the Property shall be security for, and 
subject to an Development Charge Lien with respect to, only the Development 
Charges attributable to such parcel, lot or tract constituting a portion of 
the Property.  The Authority further covenants, agrees and consents that the 
Development Charges collected by the Authority shall be used solely in a 
manner which would satisfy the financial obligations of the District under 
the Operating Agreement, the Intergovernmental Agreement, and the 
Recreational Facilities Agreement.

            Section 5.6  CERTIFICATION OF OUTSTANDING DEVELOPMENT CHARGES.  
Upon written request by the owner of the Property or any parcel, lot or tract 
constituting a portion of the Property, the District shall promptly provide 
such owner with a written certification specifying all currently outstanding 
Development Charges due and owing with respect to the Property or such 
parcel, lot or tract.

                                       9
<PAGE>

                                   ARTICLE VI

                                    REMEDIES

            Section 6.1  GENERALLY.  For the purpose of determining the 
maximum amount of any default in the payment or satisfaction of the 
Development Charges for purposes of foreclosures under this Article VI, the 
total amount of the Development Charges subject to satisfaction by 
foreclosure at any time and from time to time shall be the total unpaid 
balance of the Development Charges attributable to the portion of the 
Property which is being foreclosed.  No such foreclosure shall extinguish or 
in any manner limit the effectiveness of the Development Charge Lien as to 
any Development Charges subsequently assessed against the portion of the 
Property sold in the foreclosure or assessed against any other portion of the 
Property, and any purchaser at any such foreclosure shall take title to the 
portion of the Property that is sold subject to all the terms and provisions 
of this Development Agreement.

            Section 6.2  DEFAULTS BY ANY OWNER OF THE PROPERTY AND REMEDIES 
OF THE DISTRICT.  Any one or more of the following shall be deemed to be a 
default with respect to any portion of the Property to which the same is 
applicable:

            (a)     any default in the payment or satisfaction of the
     Development Charges or any part thereof with respect to such portion of the
     Property;

            (b)     the attachment of, seizure of or levy upon such portion of
     the Property that is then subject to the Development Charge Lien pursuant
     to any legal process, if the same is not cured within thirty (30) days,
     except to the extent the Development Charge Lien hereunder is prior to the
     lien giving rise to such attachment, seizure or levy; or

            (c)     a failure by any owner of such portion of the Property to
     pay, prior to delinquency, all taxes, assessments, whether general or
     special, governmental charges, utility charges, and all other charges of
     any kind whatsoever that may at any time be lawfully charged, assessed or
     levied with respect to such portion of the Property then owned by such
     Person, and which are secured by any prior lien or encumbrance thereon, or
     any portion thereof, or which may result in the creation of a prior lien or
     encumbrance upon such portion of the Property, in the event of nonpayment
     thereof (collectively, "Charges"); PROVIDED, HOWEVER, that such failure
     shall not constitute a default while such owner is contesting in good faith
     such Charges and takes such action as may be reasonably necessary to
     prevent issuance of a county treasurer's deed or other action that would
     defeat the Development Charge Lien created hereby.

            Upon the occurrence of any one or more of the foregoing defaults, 
the whole of the unpaid Development Charges with respect to the Property or 
any parcel, lot or tract constituting a portion of the Property then in 
default under this Section 6.2 or any part thereof, from time to time may, at 
the option of the Authority, and its agents, successors or assigns, be 
declared due and payable at once or at any time thereafter; while any such 
default shall continue, 

                                       10
<PAGE>


the Development Charge Lien securing such Development Charges then in default 
may be forthwith foreclosed upon by any of the methods provided by law in the 
manner and as in the case of a mortgage, and with the same effect as if the 
Development Charges then in default, or any part thereof, as elected from 
time to time by the Authority, its agents, successors or assigns, had matured 
and was then due and payable; provided, however, that the District, its 
agents, successors and assigns, shall be entitled only to foreclose the 
Development Charge Lien created under this Development Agreement against such 
parcel, lot or tract constituting a portion of the Property as shall be in 
default under this Section 6.2.

            Section 6.3  INTEREST PAYABLE UPON DEFAULT OF DEVELOPMENT CHARGE 
OBLIGATION.  The Development Charges, if not paid when due or declared due 
hereunder, shall bear interest at a rate per annum which is equal to the 
Penalty Rate from the date of default until paid and the obligation to pay 
such interest shall be an additional Development Charge Obligation secured by 
the Development Charge Lien created hereunder and shall be added to and 
become a part of the Development Charges applicable to that portion of the 
Property then in default under this Article VI.

            Section 6.4  LIMITATIONS ON FORECLOSURE RIGHTS OF THE AUTHORITY. 
The right of the Authority, its agents, successors or assigns to make any 
declaration as aforesaid, however, is subject to the condition that if, prior 
to or within five days after such declaration (or ten days after such 
declaration if the Authority shall have received notice within such five-day 
period of an intent to cure), all overdue installments on the Development 
Charges then in default, together with the reasonable and proper charges, 
expenses and liabilities of the Authority or, its agents in connection 
therewith, shall either be paid by or for the account of the defaulting party 
or provisions satisfactory to the Authority shall be made for such payment, 
and all defaults (other than the payment of that part of the Development 
Charges due and payable solely by reason of such declaration) shall be made 
good or be secured to the satisfaction of the Authority or provision deemed 
by the Authority to be adequate shall be made therefor, then the District, 
its agents, successors or assigns shall thereafter refrain from making a 
declaration with respect to the default involved, or if such declaration has 
already been made, it shall be annulled in its entirety.

            Section 6.5  METHODS OF FORECLOSURE.  Foreclosure of the 
Development Charge Lien securing payment of any Development Charges hereunder 
may be accomplished by court proceeding, and any foreclosure shall forever 
bar the Developer, or any Person then owning the Property or the lot, tract 
or parcel of the Property that is the subject of such foreclosure and all 
Persons claiming under any of the foregoing from all right and interest in 
the Property.  Prior to commencement of any foreclosure, the Authority shall 
provide written notice of any uncured default hereunder to each Holder at the 
last address of such Holder in the records of the Authority, and any such 
Holder shall have the right to cure the default within ninety (90) days after 
receipt of such notice or one hundred and twenty-five (125) days after 
mailing of such notice, whichever is sooner.  Upon the commencement of any 
foreclosure proceedings, the Authority shall be entitled to have a receiver 
appointed to take possession and charge of the parcels, lots or tracts 
constituting portions of the Property against which foreclosure has been 

                                       11
<PAGE>

instituted and to lease the subject premises or any part thereof and collect, 
receive and sequester any rentals, earnings, income, revenues, payments or 
moneys therefrom (as may be permitted by law) and may apply such amounts to 
the satisfaction of the Development Charges secured by the subject premises.  
Out of the proceeds of any foreclosure sale the Authority may deduct all 
reasonable costs, charges, attorneys' fees and expenses of foreclosure and/or 
suit and retain or be awarded all sums then chargeable to the parcel, lot or 
tract constituting a portion of the Property in default and render to the 
owner of such parcel, lot or tract, its lessees, grantees, successors or 
assigns, the surplus, if any, as their interest may appear.  If such proceeds 
of foreclosure shall be insufficient to discharge in full the Development 
Charges of the parcel, lot or tract in default, the Authority, its agents, 
successors or assigns shall have no other legal recourse in law or in equity 
against the Developer or the Owners, their lessees, grantees, successors or 
assigns for the deficiency.  If such proceeds of foreclosure shall exceed the 
amount necessary to discharge in full the Development Charges of the parcel, 
lot or tract in default, such excess shall be paid to the owner thereof; 
provided, however, that in the event that the Developer or the Owners shall 
have paid moneys to cure any default of the owner of the Property upon which 
foreclosure shall have occurred, the Developer or the Owners shall first be 
entitled to repayment of any such amount from the proceeds of such 
foreclosure.  The Authority, its agents, successors or assigns shall have the 
right to enforce one or more remedies hereunder, or any other remedy the 
Authority may have successively or concurrently, including the right to 
foreclose the Development Charge Lien, with respect to the Property or any 
parcel, lot or tract constituting a portion of the Property, without thereby 
impairing the Development Charge Lien created herein on the remainder of the 
Property subject to the Development Charge Lien or without affecting the 
remedies of the Authority available with respect thereto.

            Section 6.6  OPTION AND RIGHT OF THE DISTRICT TO PURSUE SEPARATE 
OR BULK FORECLOSURES; OTHER RIGHTS.  The Authority, its agents, successors or 
assigns, in its or their sole discretion, shall have the unrestricted, 
discretionary right, power, authority and option which it or they may 
exercise from time to time as herein provided consistent with the purpose 
hereof:

            (a)     To foreclose hereunder at any time, in one proceeding, on
     all parcels, lots or tracts constituting portions of the Property then
     securing any Development Charges in default, or, in one or more
     proceedings, on the Property or any parcel, lot or tract constituting a
     portion of the Property remaining subject to the Development Charge Lien
     which then secures any Development Charges in default.

            (b)     To foreclose hereunder at any time, in one proceeding, or
     concurrently in separate proceedings, in such order or sequence as it or
     they may select, on any parcels, lots or tracts constituting portions of
     the Property or combinations in bulk of such parcels, lots or tracts then
     securing any Development Charges in default which may be selected by the
     Authority, its agents, successors or assigns.

            (c)     To select the order or sequence of any and all sales in any
     and all such proceedings as between any part, parcels or combinations in
     bulk of parcels of the 

                                       12
<PAGE>

     Property, without regard to ownership or other junior interest, by lien 
     or otherwise in the part or parcels it or they may select.

            (d)     To reinstate the Development Charge Lien created hereunder
     as to the Property or any parcel, lot or tract constituting a portion of
     the Property, from time to time, on which foreclosure proceedings and a
     sale in pursuance thereof has not been consummated, on such terms and
     conditions as it or they may prescribe.

            Notwithstanding the foregoing, if the Authority shall foreclose 
upon any parcel, lot or tract constituting a portion of the Property then 
owned by the Developer or the Owners, the Authority shall at the same time 
foreclose upon all remaining parcels, lots or tracts constituting portions of 
the Property as to which the Development Charges secured thereby shall be in 
default.

            In case of each and every foreclosure, the remainder of the 
Property not sold at foreclosure or otherwise sold or released as herein 
provided shall remain encumbered by the Development Charge Lien created 
hereunder and shall not be affected in any way, pro rata or otherwise, by any 
prior foreclosure or election by the Authority, its agents, successors or 
assigns.  No Person acquiring any interest in the Property covered by the 
Development Charge Lien created hereunder shall have the right to object to 
the exercise of any of the rights contemplated herein.

            PROVIDED, HOWEVER, THAT THE AUTHORITY, ITS AGENTS, SUCCESSORS AND 
ASSIGNS, MAY NOT AT ANY TIME FORECLOSE THE DEVELOPMENT CHARGE LIEN CREATED 
HEREUNDER AGAINST ANY PARCEL, LOT OR TRACT CONSTITUTING A PORTION OF THE 
PROPERTY FOR WHICH AND SO LONG AS THE DEVELOPMENT CHARGES WITH RESPECT TO 
SUCH PARCEL, LOT OR TRACT ARE CURRENT AND NOT IN DEFAULT.

            PROVIDED, FURTHER, THAT NOTHING HEREIN SHALL LIMIT OR AFFECT ANY 
STATUTORY RIGHTS OF THE DEVELOPER OR ANY OWNER OF THE PROPERTY PURSUANT TO 
THE LAWS OF THE STATE INCLUDING, WITHOUT LIMITATION, RIGHTS REGARDING 
REDEMPTION AND CURE OF DEFAULTS.

            Section 6.7  APPROVALS.  Without affecting the remaining 
liability of any parcel, lot or tract constituting a portion of the Property 
for the payment of all or any part of the remainder of the Development 
Charges, and without affecting or impairing the Development Charge Lien 
created hereunder upon the remainder of the Property so secured for the full 
amount of any Development Charges then remaining unpaid, the Authority shall 
join in granting and approving any subdivision plats, condominium 
declarations, access and utility easements and any other restriction, 
easement, document or instrument necessary or advisable for the 
accomplishment of the development of the Property or its use, operation or 
enjoyment, if, in the opinion of the Authority, the same do not adversely 
affect the security for the Development Charge Obligation.

                                       13
<PAGE>

                                   ARTICLE VII

                    EXTENSION OF LIEN TO ADDITIONAL PROPERTY

            Section 7.1  AMENDMENT OR SUPPLEMENT TO INCLUDE ADDITIONAL 
PROPERTY. In the event that the Property may be enlarged by the addition of 
other lots, tracts or parcels of land that will benefit from the operation 
and maintenance of the Project by the Authority, the Authority and the owner 
of the additional land shall execute an amendment or supplement to this 
Development Agreement, or a separate Development Agreement, which shall cause 
the additional parcel(s) to be immediately subject to the Development Charge 
Lien created hereby and the terms and provisions hereof.  In the event the 
Property is enlarged by the addition of other parcels of land, all 
Development Charges attributable to the Property, as enlarged, accruing after 
the date of inclusion of such additional parcel(s) shall be assessed among 
all parcels subject to such Development Charge Lien in the manner set forth 
in Section 5.2 above.

                                       14


<PAGE>

                                  ARTICLE VIII

                               GENERAL PROVISIONS

            Section 8.1  FURTHER ASSURANCES.  The Developer, the Owners and the
Authority shall execute such additional documents, instruments of encumbrance
and assurances as may be deemed necessary to perfect the lien on any of the real
property and property rights encumbered herein or which shall be necessary or
proper to effectuate the intentions of the parties thereto, or to confirm the
full and proper authority of the Developer, the Owners and the Authority to
enter into and perform this Development Agreement.

            Section 8.2  BINDING NATURE OF THE DEVELOPMENT CHARGE LIEN.  The
Developer and the Owners, their successors and assigns, and any and all Persons
who purchase or acquire in any manner any interest in the Property, or any part
thereof, shall be conclusively presumed to covenant, agree and acknowledge the
validity of the Development Charge Lien created herein and the good and
sufficient existence and validity of all facts and circumstances necessary to
create the valid and binding Development Charge Lien created hereunder upon the
Property.  The Developer and the Owners and each such purchaser or Person shall
likewise be conclusively presumed to have waived any real, personal or technical
defense at law or in equity which might exist affecting the validity of the
Development Charge Lien created hereunder or the right of the District or any of
its agents, successors or assigns to foreclose the Development Charge Lien. 
These covenants, agreements, acknowledgements and waivers are and shall be
presumed to be specifically made for the purpose of inducing the District to
enter into the Operating Agreement and the Intergovernmental Agreement and to
perform its financial obligations thereunder for the benefit of the Project and
its corresponding benefit of the Property.  Notwithstanding the foregoing or any
other provision of this Development Agreement, nothing in this Development
Agreement shall prohibit the Developer or the Owners and their successors and
assigns from selling, leasing, encumbering or otherwise conveying all or any
portion of the Property or any interest therein, but any such sale, lease,
encumbrance or other conveyance shall be subject to all the terms and provisions
of this Development Agreement except in the event this Development Agreement is
subordinated thereto, either expressly in writing or as a matter of law.

            Section 8.3  SEVERABILITY.  If any term or provision of this
Development Agreement or the application thereof shall be judicially determined
to be unenforceable or inoperative, such determination shall not affect the
remaining parts or provisions hereof, the intention being to make each term and
provision of this document valid and enforceable to the fullest extent permitted
by law.

            Section 8.4  EXECUTION IN COUNTERPARTS.  This Development Agreement
may be executed and filed in any number of counterparts and with respect to the
Property or any parcels, lots or tracts constituting portions of the Property,
the counterparts so executed to be taken together and construed as a single
execution and filing.

                                       15
<PAGE>

            Section 8.5  FUTURE EXECUTION OF DOCUMENTATION.  This Development
Agreement shall be duly executed, acknowledged, recorded and delivered prior to
the actual levy of the Development Charges.  Accordingly, the Developer, the
Owners and the Authority expressly contract for the creation of the Development
Charge Lien as a lien against and encumbrance upon the Property affected hereby
to secure performance of the future Development Charge Obligation which shall
arise upon the assessment of the Development Charges.  This Development
Agreement shall be fully enforceable in accordance with its terms as a contract
contemplating creation of a future obligation.

            Section 8.6  ASSIGNMENT.  This Development Agreement may be assigned
by the Authority without the prior written consent of the owner(s) of the
Property or any parcel, lot or tract constituting a portion of the Property.

            Section 8.7  GOVERNING LAW.  This Development Agreement shall be
governed by the laws of the State and shall inure to the benefit of and be
binding upon the parties and their respective successors and assigns.



                            [SIGNATURE PAGE FOLLOWS]






                                       16
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Development
Agreement to be executed in their names with their seals hereunto affixed and
attested by their duly authorized officers.  All of the above occurred as of the
date first above written.


                                   CASTLE ROCK RANCH PUBLIC IMPROVEMENTS
                                   AUTHORITY, a nonprofit corporation 
                                   organized under the laws of the State



                                   By: C. ROGER ADDLESPERGER
                                       --------------------------------------
                                       President


                                   DOUGLAS COUNTY DEVELOPMENT CORPORATION, a
                                   corporation organized under the laws of the
                                   State



                                   By: (ILLEGIBLE)
                                       --------------------------------------
                                       Authorized Officer







                                       17




<PAGE>

STATE OF COLORADO        )
                         ) ss.
COUNTY OF ARAPAHOE       )

     The foregoing instrument was acknowledged before me this 26th day of 
March, 1996 by C. Roger Addlesperger, as President, of Castle Rock Ranch 
Public Improvements Authority, a nonprofit corporation organized under the 
laws of the State of Colorado.

     WITNESS MY HAND and official seal.

     My commission expires:  11-13-99

[SEAL]
                                       JO ANN M. STOLTZ
                                       --------------------------------------
                                       Notary Public






                                      18



<PAGE>

                                               C. ROGER ADDLESPERGER


                                               C. ROGER ADDLESPERGER
                                               --------------------------



                     [Signature page to Development Agreement]







                                       19




<PAGE>

STATE OF COLORADO        )
                         ) ss.
COUNTY OF DENVER         )

     The foregoing instrument was acknowledged before me this 28th day of
March, 1996 by C. Roger Addlesperger, as _____________________ of Douglas County
Development Corporation, a corporation organized under the laws of the State of
Colorado.

     WITNESS MY HAND and official seal.

     My commission expires:  

[SEAL]
                                         
                                        Notary Public



                                     20

<PAGE>



                                        C. ROGER ADDLESPERGER


                                        P. JOSEPH KNOPINSKI


                                        P. JOSEPH KNOPINSKI
                                        --------------------------------------



                     [Signature page to Development Agreement]




                                       21


<PAGE>
                                        JANNIE H. RICHARDSON


                                         



                    [Signature page to Development Agreement]

STATE OF COLORADO        )
                         ) ss.
COUNTY OF DENVER         )

     The foregoing instrument was acknowledged before me this ____ day of
_____________, 1996 by C. Roger Addlesperger.

     WITNESS MY HAND and official seal.

     My commission expires:  

[SEAL]
                                         
                                        Notary Public

STATE OF COLORADO        )
                         ) ss.
COUNTY OF DENVER         )

     The foregoing instrument was acknowledged before me this ____ day of
_____________, 1996 by P. Joseph Knopinski.

     WITNESS MY HAND and official seal.

     My commission expires:  

[SEAL]
                                         
                                        Notary Public

STATE OF COLORADO        )
                         ) ss.
COUNTY OF DENVER         )

     The foregoing instrument was acknowledged before me this 28th day of
March, 1996 by Jannie H. Richardson.

     WITNESS MY HAND and official seal.

     My commission expires:  

[SEAL]
                                         
                                        Notary Public


                                       22

<PAGE>

                                    EXHIBIT A

                                  DAWSON RIDGE
                                LEGAL DESCRIPTION

A parcel of land lying in Sectons 21, 22, 27, 28, 29, 32, 33 and 34 of 
Township 8 South, Range 67 West of the 6th Principal Meridian more 
particularly described as follows:
BEGINNING at the Center Quarter corner of said Section 32 and considering the 
westerly line of the Northeast Quarter of said Section 32 to bear 
N 00DEG.5'38" E and all bearings contained herein relative thereto;
THENCE N 00DEG.05'38" E along the westerly line of said Northeast Quarter a 
distance of 2714.32 feet to the South Quarter corner of said Section 29;
THENCE N 00DEG.14'06" W along the westerly line of the Eash Half of said 
Section 29 a distance of 5308.50 feet to the North Quarter corner of said 
Section 29;
THENCE S 88DEG.37'18" E along the northerly line of said Section 29 a 
distance of 2661.22 feet to the Southwest Quarter corner of said Section 21;
THENCE N 00DEG.23'27" E along the westerly line of the South Half of the 
Southwest Quarter of said Section 21 a distance of 1322.83 feet to the Northwest
corner of said South Half of the Southwest Quarter;
THENCE S 89DEG.30'19" E along the northerly line of said South Half of the 
Southwest Quarter a distance of 2643.22 feet to the Center South 1/16 corner 
of said Section 21;
THENCE continuing S 89DEG.30'19" E along the Northerly line of the South Half 
of the Southeast Quarter of said Section 21 a distance of 2643.09 feet to the 
Northeast corner of said South Half of the Southeast Quarter;
THENCE N 89DEG.50'16" E a distance of 404.16 feet to the westerly 
right-of-way line of Twin Oaks Road;
THENCE S 02DEG.40'01" E along said Westerly right-of-way line a distance of 
52.20 feet to the southerly right-of-way line of the Territorial road;
THENCE along said the southerly right-of-way line the following seven (7) 
course and distances;
     1.  S 86DEG.42'49" E along a line tangent with the following described 
         curve a distance of 109.24 feet;
     2.  THENCE along the arc of a curve to the left a distance of 122.69 
         feet having a central angle of 28DEG.36'44", a radius of 245.68 feet 
         and a chord bearing N 73DEG.23'40" E and a distance of 121.43 feet;
     3.  THENCE N 59DEG.49'18" E along a line tangent with the previously 
         described curve a distance of 23.23 feet;
     4.  THENCE 89DEG.00'53" E a distance of 174.23 feet;
     5.  THENCE N 17DEG.42'35" E along a line non-tangent with the following 
         described curve a distance of 139.28 feet;
     6.  THENCE along the arc of a curve to the left having a central angle 
         of 31DEG.52'31", a radius of 198.99 feet and chord bearing 
         N 33DEG.38'37" E a distance of 109.28 feet and an arc length of 
         110.70 feet;

<PAGE>

     7.  THENCE N 17DEG.42'35" E along a line tangent with the previously 
         described curve a distance of 534.58 feet to the southerly 
         right-of-way line of a Douglas Lane;
THENCE S 89DEG.53'22" E along said southerly right-of-way line a distance of 
1599.42 feet to the westerly right-of-way line of the A.T. & S.F. Railroad;
THENCE S 15DEG.43'30" W along said westerly right-of-way line a distance of 
8675.16 feet to the northerly line of that parcel of land described in Book 
108 at Page 242, Douglas County Clerk and Recorder's Office;
THENCE around said parcel the following three (3) course and distances;
     1.  N 89DEG.48'11" W a distance of 678.73 feet;
     2.  THENCE S 00DEG.44'59" W a distance of 600.54 feet;
     3.  THENCE S 89DEG.03'33" E a distance of 515.85 feet to the westerly 
         right-of-way line of A.T. & S.F. Railroad;
THENCE S 15DEG.43'30" W along said westerly right-of-way line a distance of 
548.74 feet to the easterly line of said Section 33;
THENCE N 00DEG.23'36" E along said easterly line a distance of 226.92 feet;
THENCE S 15DEG.45'37" W parallel with and 110.00 feet westerly from the 
centerline of A.T. & S.F. R.R. a distance of 788.62 feet to the southerly 
line of the North Half of said Section 33;
THENCE N 89DEG.09'35" W along said southerly line a distance of 5123.28 feet 
to the West Quarter corner of said Section 32;
THENCE S 89DEG.47'23" W a distance of 2623.48 feet to the POINT OF BEGINNING.

The official General Land Office (G.L.O.) plat of T.8S., R.67W. of the 6th 
P.M. approved by the Surveyor General of the G.L.O. on August 30, 1866 
contains what would seem to be a scribing error in that where Section 29 and 
Section 28 should be said plat shows Sections 31 and 32 respectively.  The 
original G.L.O. field notes properly locate Section 29 to the east of Section 
30 and Section 28 to the west of Section 27.  All reference to said Sections 
28 and 29 contained herein refer to those sections as correctly located in the 
original G.L.O. field notes.

Above described parcel contains 1883.312 acres, more of less.

EXCEPTING THEREOUT AND THEREFROM GOLF COURSE PARCELS A & B, AS FOLLOWS:

GOLF COURSE PARCEL A:

A parcel of land located in Sections 28, 29 and 21, all in Township 8 South 
Range 67 West of the Sixth Principal Meridian, Douglas County, Colorado, 
being more particularly described as follows:

BEGINNING at the North quarter corner of said Section 29 whence the Northerly 
line of the East half of Section 29 bears S 88DEG.37'18" E a distance of 
2661.22 feet; thence S 88DEG.37'18" E along said Northerly line a distance of 
2661.22 feet; thence N 00DEG.23'27" E along the Westerly line of Section 21 a 
distance of 782.32 feet; thence S 37DEG.02'12" E a distance of 2474.11 feet; 
thence the following four courses along Dawson Ridge Filing A;


                                       2

<PAGE>

     1.  S 67DEG.47'53" W a distance of 128.79 feet;
     2.  S 39DEG.28'53" W a distance of 108.41 feet;
     3.  S 58DEG.24'13" E a distance of 228.53 feet;
     4.  N 83DEG.33'27" E a distance of 170.37 feet;

thence S 37DEG.02'12" E a distance of 1105.69 feet;
thence S 21DEG.08'57" E a distance of 2657.54 feet;
thence the following two courses along a parcel of land described by Book 695 
at Page 459 of the Douglas County Clerk and Recorder's Office:

     1.  N 00DEG.19'26" W a distance of 1262.69 feet;
     2.  N 89DEG.22'02" W a distance of 4017.50 feet;

thence N 00DEG.14'06" W along the Westerly line of the East half of Section 
29 a distance of 3543.76 feet to the point of beginning;

EXCEPTING from the above parcel the following parcels:

Dawson Ridge Filings A and B, all dedicated street rights of way;

ALSO EXCEPTING the following one acre parcel described as follows:

A parcel of land located in the East half of Section 29, Township 8 South, 
Range 67 West of the Sixth Principal Meridian, Douglas County, Colorado, 
being more particularly described as follows:

Commencing at the North quarter corner of said Section 29;

thence South 00 degrees 14 minutes 06 seconds East along the westerly line of 
said East half of Section 29, a distance of 3267.55 feet to the point of 
beginning;

thence North 89 degrees 45 minutes 54 seconds East a distance of 208.71 feet;
thence South 00 degrees 14 minutes 06 seconds East a distance of 208.71 feet;
thence South 89 degrees 45 minutes 54 seconds West a distance of 208.71 feet;
thence North 00 degrees 14 minutes 06 seconds West along said westerly line a 
distance of 208.71 feet to the point of Beginning.

County of Douglas,
State of Colorado

GOLF COURSE PARCEL B:

A parcel of land lying in Sections 22, 27, 28, 33 & 34, all in Township 8 
South Range 67 West of the Sixth Principal Meridian, Douglas County, 
Colorado, being more particularly described as follows:


                                       3

<PAGE>

COMMENCING at the Northeast corner of said Section 28 whence the Southeast 
corner of said Section 28 bears S 00DEG.22'18" E a distance of 5302.75 feet;
thence N 53DEG.05'33" E a distance of 2071.05 feet to the point of beginning;
thence S 84DEG.49'36" E a distance of 790.91 feet;
thence S 15DEG.43'30" W along the Westerly right of way line of the A.T. & 
S.F. Railroad a distance of 5019.66 feet;
thence along the following three courses along a parcel of land described by 
Book 1095 at Page 629 of the Douglas County Clerk and Recorder:


     1.   N 89DEG.22'05" W a distance of 2386.46 feet;
     2.   S 00DEG.19'29" E a distance of 308.79 feet;
     3.   S 89DEG.22'05" E a distance of 2298.04 feet;


thence S 15DEG.43'30" W along the Westerly right of way line of the A.T. & 
S.F. Railroad a distance of 2425.47 feet;
thence N 89DEG.48'11" W a distance of 678.73 feet;
thence S 00DEG.44'59" W a distance of 600.54 feet;
thence S 89DEG.03'33" E a distance of 515.85 feet;
thence S 15DEG.43'30" W a distance of 548.74 feet;
thence N 00DEG.23'36" E a distance of 226.92 feet;
thence S 15DEG.45'37" W a distance of 788.62 feet;
thence N 89DEG.09'35" W, along a South line of the North half of Section 33, 
a distance of 1062.26 feet;
thence N 00DEG.50'25" E a distance of 1475.80 feet;
thence N 56DEG.57'07" W a distance of 3202.16 feet;
thence N 21DEG.08'57" W a distance of 2657.54 feet;
thence along the following fifteen courses along Dawson Ridge Filing B;


     1.   N 77DEG.53'15" E, non-tangent to the following described curve, a 
          distance of 42.72 feet;

     2.   along the arc of a curve to the right, having a central angle of 
          89DEG.23'40", a radius of 41.00 feet, the chord of which bears S 
          26DEG.49'54" W a distance of 57.68 feet and an arc length of 63.97 
          feet;

     3.   N 71DEG.31'44" E, tangent to the previously described curve, a 
          distance of 146.27 feet;

     4.   N 70DEG.13'51" E a distance of 110.35 feet;

     5.   N 71DEG.31'4" E, tangent to the following described curve, a 
          distance of 160.53 feet;

     6.   along the arc of a curve to the right, having a central angle of 
          51DEG.49'07", a radius of 908.07 feet, the chord of which bears N 
          82DEG.33'43" W a distance of 793.56 feet and an arc length of 821.26 
          feet;

     7.   S 51DEG.57'48" E, tangent to the previously and following 
          described curves, a distance of 105.49 feet;


                                      4

<PAGE>

     8.   along the arc of a curve to the right, having a central angle of 
          01DEG.47'42", a radius of 905.57 feet, the chord of which bears N 
          49DEG.05'17" W a distance of 28.37 feet and an arc length of 28.37 
          feet;

     9.   S 48DEG.11'26" E, tangent to the previously and following 
          described curves, a distance of 101.79 feet;

     10.  along the arc of a curve to the right, having a central angle of 
          87DEG.30'40", a radius of 40.00 feet, the chord of which bears S 
          04DEG.26'06" E a distance of 55.33 feet and an arc length of 61.09
          feet;

     11.  S 47DEG.39'40" E non-tangent to the previously and following 
          described curves, a distance of 120.18 feet;

     12.  along the arc of a curve to the right, having a central angle of 
          92DEG.40'47", a radius of 40.00 feet, the chord of which bears N 
          85DEG.27'55" E a distance of 57.88 feet and an arc length of 64.70
          feet;

     13.  N 41DEG.48'34" E, non-tangent to the previously and following 
          described curves, a distance of 80.00 feet;

     14.  along the arc of a curve to the right, having a central angle of 
          92DEG.41'18", a radius of 40.00 feet, the chord of which bears N 
          01DEG.50'31" W a distance of 57.88 feet and an arc length of 64.71
          feet to the point of compound curvature;

     15.  along a curve, to the right having a central angle of 09DEG.19'56",
          a radius of 1740.00 feet, the chord of which bears N 49DEG.10'21" E
          a distance of 283.09 feet and an arc length of 283.40 feet;


thence along the following five courses along Dawson Ridge Filing A:

     1.   S 36DEG.09'41" E, non-tangent to the previously described curve, 
          a distance of 10.00 feet;

     2.   N 53DEG.50'19" E, tangent to the following described curve, a 
          distance of 1060.41 feet;

     3.   along the arc of a curve to the left having a central angle of 
          21DEG.00'00", a radius of 2170.00 feet, the chord of which bears 
          N 43DEG.20'19" E, a distance of 790.90 feet and an arc length of
          795.35 feet;

     4.   N 32DEG.50'19" E, tangent to the previously and following 
          described curves, a distance of 2182.25 feet;

     5.   along the arc of a curve to the left, having a central angle of 
          12DEG.18'29", a radius of 1870.00 feet, the chord of which bears N 
          26DEG.41'04" E a distance of 400.94 feet and an arc length of 401.71 
          feet to the point of beginning;


EXCEPTING from the above parcel the following two parcels:

Exception 3:

A parcel of land located in a portion of Section 28, Township 8 South, Range 
67 West of the Sixth Principal Meridian, City of Castle Rock, Douglas County,  
Colorado, being more particularly described as follows;



                                      5

<PAGE>

COMMENCING at the Southeast corner of said Section 28, whence the Northeast 
corner of said Section 28 bears N 00DEG.22'18" W a distance of 5302.75 feet;
thence N 62DEG.23'09" W a distance of 660.85 feet, to the point of beginning;
thence S 63DEG.50'19" W a distance of 144.71 feet;
thence N 26DEG.09'41" W a distance of 208.00 feet;
thence N 63DEG.50'19" E, non-tangent to the following described curve, a 
distance of 251.43 feet;

thence along the arc of a curve to the right, having a central angle of 
29DEG. 26'30", a radius of 460.00 feet, the chord of which bears S 00DEG.59'57"
W a distance of 233.78 feet and an arc length of 236.37 feet to the point of 
beginning;

Exception 4:

A parcel of land located in a portion of Section 28, Township 8 South, Range 
67 West of the Sixth Principal Meridian, City of Castle Rock, Douglas County, 
Colorado, being more particularly described as follows:

COMMENCING at the Southwest corner of said Section 28, whence the North 
corner of said Section 28 bears N 00DEG.11'08" W a distance of 5299.57 feet;
thence N 58DEG.37'49" E a distance of 3415.73 feet, to the point of beginning;
thence N 04DEG.01'05" E a distance of 208.84 feet;
thence S 87DEG.59'38" E a distance of 208.71 feet;
thence S 04DEG.01'05" W a distance of 208.84 feet;
thence N 87DEG.59'38" W a distance of 208.71 feet to the point of beginning;





                                      6

<PAGE>

                                    EXHIBIT B

                              PERMITTED EXCEPTIONS


     1.     The lien of any deed of trust, mortgage, assignment of leases and
rents, UCC financing statement or other security document now or hereafter
securing financing of the Property or any portion thereof or any improvements
thereon, which shall be expressly subordinate to this Development Agreement.

     2.     Rights or claims of parties in possession not shown by the public
records.

     3.     Easements, or claims of easements, not shown by the public records.

     4.     Discrepancies, conflicts in boundary lines, shortage in area,
encroachments, and any facts which a correct survey and inspection of the
premises would disclose and which are not shown by the public records.

     5.     Any lien, or right to a lien, for services, labor or material
theretofore or hereafter furnished, imposed by law and not shown by the public
records.

     6.     Taxes and assessments for 1996 and subsequent years.









                                     B-1


<PAGE>
                                       
                              OPERATING AGREEMENT

                                    Between

                 CASTLE ROCK RANCH PUBLIC IMPROVEMENTS AUTHORITY

                                      and

                    DAWSON RIDGE METROPOLITAN DISTRICT NO. 5

                            Dated as of March 1, 1996
<PAGE>

                                TABLE OF CONTENTS
                                                                            PAGE

ARTICLE 1 - DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . .   2
     Section 1.1.   DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . .   2
     Section 1.2.   CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . .   3
     Section 1.3.   COMPUTATIONS . . . . . . . . . . . . . . . . . . . . . .   4
     Section 1.4.   COMPLIANCE CERTIFICATES AND OPINIONS . . . . . . . . . .   4
     Section 1.5.   FORM OF DOCUMENTS DELIVERED TO TRUSTEE . . . . . . . . .   5

ARTICLE 2 - REPRESENTATIONS, WARRANTIES AND COVENANTS. . . . . . . . . . . .   7
     Section 2.1.   REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
                    CORPORATION. . . . . . . . . . . . . . . . . . . . . . .   7
     Section 2.2.   REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
                    DISTRICT . . . . . . . . . . . . . . . . . . . . . . . .  10

ARTICLE 3 - ISSUANCE OF THE SERIES 1996 BONDS. . . . . . . . . . . . . . . .  14
     Section 3.1.   THE SERIES 1996 BONDS. . . . . . . . . . . . . . . . . .  14
     Section 3.2.   ACQUISITION OF PROJECT . . . . . . . . . . . . . . . . .  14
     Section 3.3.   LIABILITY. . . . . . . . . . . . . . . . . . . . . . . .  14
     Section 3.4.   LIABILITY OF DISTRICT. . . . . . . . . . . . . . . . . .  14
     Section 3.5.   OWNERSHIP OF PROJECT . . . . . . . . . . . . . . . . . .  14
     Section 3.6.   [INTENTIONALLY OMITTED]. . . . . . . . . . . . . . . . .  14
     Section 3.7.   ADDITIONS AND CHANGES. . . . . . . . . . . . . . . . . .  14
     Section 3.8.   AWARD OF CONTRACTS . . . . . . . . . . . . . . . . . . .  15
     Section 3.9.   ADMINISTRATION OF CONTRACTS. . . . . . . . . . . . . . .  15

ARTICLE 4 - USE OF PROCEEDS; TERM. . . . . . . . . . . . . . . . . . . . . .  16
     Section 4.1.   USE OF PROCEEDS OF BONDS . . . . . . . . . . . . . . . .  16
     Section 4.2.   TERM OF AGREEMENT. . . . . . . . . . . . . . . . . . . .  16

ARTICLE 5 - OPERATING AGREEMENT PAYMENTS . . . . . . . . . . . . . . . . . .  17
     Section 5.1.   OPERATING AGREEMENT PAYMENTS . . . . . . . . . . . . . .  17
     Section 5.2.   FAIR VALUE . . . . . . . . . . . . . . . . . . . . . . .  18
     Section 5.3.   TITLE PROVISIONS . . . . . . . . . . . . . . . . . . . .  18

ARTICLE 6 - MAINTENANCE; TAXES; PROJECT IMPROVEMENTS; INSURANCE; AND OTHER
     MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19
     Section 6.1.   MAINTENANCE, UTILITIES, TAXES AND ASSESSMENTS. . . . . .  19
     Section 6.2.   MODIFICATION OF PROJECT. . . . . . . . . . . . . . . . .  20
     Section 6.3.   LIABILITY AND PROPERTY DAMAGE INSURANCE. . . . . . . . .  20
     Section 6.4.   ADVANCES . . . . . . . . . . . . . . . . . . . . . . . .  20
     Section 6.5.   INSTALLATION OF PERSONAL PROPERTY. . . . . . . . . . . .  20
     Section 6.6.   CONSTRUCTION OF ALTERNATIVE FACILITIES . . . . . . . . .  21
     Section 6.7.   SECURITY INTEREST PROHIBITED . . . . . . . . . . . . . .  21

                                       i
<PAGE>

                                TABLE OF CONTENTS
                                                                            PAGE
ARTICLE 7 - DAMAGE, DESTRUCTION AND EMINENT DOMAIN; USE OF PROCEEDS. . . . .  22
     Section 7.1.   DAMAGE, DESTRUCTION AND EMINENT DOMAIN . . . . . . . . .  22
     Section 7.2.   APPLICATION OF PROCEEDS. . . . . . . . . . . . . . . . .  22
     Section 7.3.   NO ABATEMENT OF OPERATING AGREEMENT PAYMENTS IN THE
                    EVENT OF DAMAGE OR DESTRUCTION . . . . . . . . . . . . .  22

ARTICLE 8 - DISCLAIMER OF WARRANTIES; ACCESS . . . . . . . . . . . . . . . .  23
     Section 8.1.   DISCLAIMER OF WARRANTIES . . . . . . . . . . . . . . . .  23
     Section 8.2.   RIGHTS OF ACCESS . . . . . . . . . . . . . . . . . . . .  23
     Section 8.3.   FURTHER ASSURANCES AND CORRECTIVE INSTRUMENTS. . . . . .  23
     Section 8.4.   CORPORATION AND DISTRICT REPRESENTATIVES . . . . . . . .  23

ARTICLE 9 - ASSIGNMENT, SUBLEASING AND AMENDMENT . . . . . . . . . . . . . .  24
     Section 9.1.   ASSIGNMENT BY THE CORPORATION. . . . . . . . . . . . . .  24
     Section 9.2.   ASSIGNMENT BY THE DISTRICT . . . . . . . . . . . . . . .  24
     Section 9.3.   AMENDMENT OF THIS OPERATING AGREEMENT. . . . . . . . . .  24

ARTICLE 10 - FURTHER AGREEMENTS. . . . . . . . . . . . . . . . . . . . . . .  25
     Section 10.1.  MAINTENANCE OF POWERS; SUCCESSORS OF CORPORATION . . . .  25
     Section 10.2.  TAX-EXEMPT STATUS OF BONDS . . . . . . . . . . . . . . .  25
     Section 10.3.  NOTICE OF CERTAIN EVENTS . . . . . . . . . . . . . . . .  27
     Section 10.4.  NO UNTRUE STATEMENTS . . . . . . . . . . . . . . . . . .  27
     Section 10.5.  CERTAIN MATTERS REGARDING ANY AGREEMENTS, COVENANTS AND
                    WARRANTIES RELATING TO TAX EXEMPTION . . . . . . . . . .  27

ARTICLE 11 - EVENTS OF DEFAULT AND REMEDIES. . . . . . . . . . . . . . . . .  30
     Section 11.1.  EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . .  30
     Section 11.2.  REMEDIES ON DEFAULT. . . . . . . . . . . . . . . . . . .  31
     Section 11.3.  ATTORNEYS' FEES AND EXPENSES . . . . . . . . . . . . . .  33
     Section 11.4.  NO REMEDY EXCLUSIVE. . . . . . . . . . . . . . . . . . .  33
     Section 11.5.  NO ADDITIONAL WAIVER IMPLIED BY ONE WAIVER . . . . . . .  34
     Section 11.6.  CREDIT ENHANCEMENT PROVIDER AND TRUSTEE TO EXERCISE
                    RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . .  34

ARTICLE 12 - OPTION TO TERMINATE . . . . . . . . . . . . . . . . . . . . . .  35
     Section 12.1.  OPTIONS TO TERMINATE; OPTIONAL REDEMPTION. . . . . . . .  35
     Section 12.2.  EXTRAORDINARY TERMINATION OPTION . . . . . . . . . . . .  36
     Section 12.3.  RIGHT TO ACQUIRE . . . . . . . . . . . . . . . . . . . .  36
     Section 12.4.  UNENCUMBERED TITLE . . . . . . . . . . . . . . . . . . .  36
     Section 12.5.  DEFAULT RIGHTS . . . . . . . . . . . . . . . . . . . . .  37
     Section 12.6.  TITLE. . . . . . . . . . . . . . . . . . . . . . . . . .  37

                                      ii
<PAGE>
                                TABLE OF CONTENTS
                                                                            PAGE

ARTICLE 13 - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . .  38
     Section 13.1.  AMENDMENT OF OPERATING AGREEMENT OR INDENTURE. . . . . .  38
     Section 13.2.  NOTICES. . . . . . . . . . . . . . . . . . . . . . . . .  38
     Section 13.3.  APPLICABLE LAW . . . . . . . . . . . . . . . . . . . . .  39
     Section 13.4.  BINDING EFFECT . . . . . . . . . . . . . . . . . . . . .  39
     Section 13.5.  SEVERABILITY OF INVALID PROVISIONS . . . . . . . . . . .  39
     Section 13.6.  AMOUNTS REMAINING IN FUNDS . . . . . . . . . . . . . . .  39
     Section 13.7.  EXECUTION OF COUNTERPARTS. . . . . . . . . . . . . . . .  39
     Section 13.8.  CERTAIN PAYMENTS NET TO CORPORATION. . . . . . . . . . .  39
     Section 13.9.  INDENTURE RIGHTS . . . . . . . . . . . . . . . . . . . .  39
     Section 13.10. BURDEN ON PROPERTY . . . . . . . . . . . . . . . . . . .  40

                                      iii
<PAGE>
                                       
                CASTLE ROCK RANCH PUBLIC IMPROVEMENTS AUTHORITY 
                               OPERATING AGREEMENT

          THIS OPERATING AGREEMENT (the "Operating Agreement") is made as of 
the 1st day of March 1996, by and between CASTLE ROCK RANCH PUBLIC 
IMPROVEMENTS AUTHORITY, a Colorado nonprofit corporation (the "Corporation") 
and DAWSON RIDGE METROPOLITAN DISTRICT NO. 5 (the "District").

                                   RECITALS

          A.  The Corporation has been organized to acquire property in order 
to provide public facilities. 

          B.  The Corporation shall issue its Public Facilities Revenue 
Bonds, Series 1996 (the "Series 1996 Bonds") for the purpose of acquiring 
real property described in Exhibit A hereto and water rights (the "Property") 
to be improved and operated by the Corporation as recreational facilities.

          C.  The Series 1996 Bonds will be issued pursuant to an Indenture 
of Trust, dated as of the date hereof (the "Indenture"), between the 
Corporation and SouthTrust Bank of Alabama, National Association (the 
"Trustee").

          D.  At an election of the District held November 7, 1995, the 
electors of the District approved (i) the execution by the District of a 
recreational facilities services agreement (of which this Agreement is one) 
to provide funds to operate and maintain parks and recreational facilities 
(the "Recreational Facilities"), (ii) the levy of taxes to satisfy the 
obligations of the District thereunder, and (iii) the incurrence by the 
District of indebtedness for the purposes of providing water, sanitation, 
street, traffic safety, transportation, parks and recreation facilities 
within or for the benefit of the District.

          E.  At elections held on November 7, 1995, Dawson Ridge 
Metropolitan Districts Nos. 1-4 (the "Related Districts") authorized the 
execution and delivery of intergovernmental agreements with respect to the 
Recreational Facilities service agreement and debt obligations of the 
District.

          F.  The Property and all improvements thereto owned by the 
Corporation (the "Project") will be operated in accordance with the terms of 
this Operating Agreement.

          G.  The entire Project shall be used for public golf, tennis or 
other recreational activities and shall be considered "Recreational 
Facilities" for purposes of this Agreement.

          NOW, THEREFORE, for and in consideration of the premises and the 
material covenants herein contained, the parties hereby covenant, agree and 
bind themselves as follows:

                                       1

<PAGE>

                                    ARTICLE 1

                                   DEFINITIONS

     Section 1.1.   DEFINITIONS.  Unless otherwise expressly provided or unless
the context clearly requires otherwise, capitalized words and terms used in this
Operating Agreement shall have the meanings ascribed to them in the Recitals
hereof, or in the Indenture, or in the Deed of Trust or the Reimbursement
Agreement (as each are defined in the Indenture).  In addition, the following
terms defined in this Section 1.1 shall, for all purposes of this Operating
Agreement, have the respective meanings herein specified.

     "Corporation Representative" means a person designated to act on behalf of
the Corporation, as evidenced by a written certificate furnished to the Trustee
and the District containing the specimen signature of such person and signed for
the Corporation by any of its officers.

     "Development Agreement" means the Development Agreement, dated as of the
date hereof, between the Corporation and Douglas County Development Corporation,
a Colorado corporation, and any and all similar agreements with the Corporation
executed by owners of property within the District or any Related District.

     "District Representative" means a person designated to act on behalf of the
District as evidenced by a written certificate furnished to the Corporation and
the Trustee containing the specimen signature of such person and the signature
of a member of the Board of Directors of the District.

     "Event of Default" or "Default" shall mean with respect to an Event of
Default or Default under this Operating Agreement any occurrence or event
specified in and defined by Section 11.1 hereof.

     "Intergovernmental Agreement" shall mean the Intergovernmental Agreement
between the District and the Related Districts, dated as of the date hereof, as
the same may be amended from time to time.

     "Operating Agreement Payments" shall mean the Operating Agreement Payments
required to be made by the District under Article 5 hereof.

     "Operation and Maintenance Expenses" shall mean such reasonable and
necessary current expenses, paid or accrued, for operation, maintenance and
repair of the Recreational Facilities as may be determined by the Corporation,
and the term may also include except as limited by contract or otherwise limited
by law, without limiting the generality of the foregoing:

          (1)  legal and overhead expenses of the Corporation directly related 
               and reasonably allocable to the administration of the 
               Recreational Facilities;



                                      2

<PAGE>

          (2)  all insurance premiums and premiums or fees for fidelity bonds 
               appertaining to or required for the Recreational Facilities or
               a reasonably allocable share of a premium of any blanket bond 
               or policy pertaining to the Recreational Facilities;

          (3)  contractual services, professional services, salaries,
               administrative expenses, and costs of labor appertaining to
               the Recreational Facilities;

          (4)  the costs incurred in the collection of all or any part of the 
               Revenues from Recreational Facilities;

          (5)  any costs of utility services furnished to the Recreational 
               Facilities; and

          (6)  payments of taxes, payments in lieu of taxes, assessments 
               imposed by any governmental unit or public corporation, or any 
               monthly deposits to an escrow established for any such purposes;

          "Operation and Maintenance Expenses" does not include:

          (a)  any allowance for depreciation;

          (b)  any costs of renewals or replacements, major repairs, 
               reconstruction, improvements, extensions, or betterments;

          (c)  any accumulation of reserves for capital replacements;

          (d)  any reserves for operation, maintenance, or repair of the
               Recreational Facilities;

          (e)  any allowance for the redemption of the Bonds, or the payment 
               of any interest thereon;

          (f)  any liabilities incurred in the acquisition or improvement of
               any properties comprising the Recreational Facilities or any
               combination thereof; and

          (g)  any other ground of legal liability not based on contract;

     "Term of this Agreement" or "Operating Agreement Term" shall mean
the term provided in Section 4.2 hereof.

     Section 1.2.   CONSTRUCTION.  This Operating Agreement, except
where the context by clear implication otherwise requires, shall be construed as
follows:

          (a)  Words and defined terms in the singular number include the 
     plural, and words in the plural include the singular.



                                      3

<PAGE>

          (b)  Words in the masculine gender include the feminine and the 
     neuter, and when the sense so indicates, words of the neuter gender refer 
     to any gender.

          (c)  Articles, sections, subsections, paragraphs and subparagraphs 
     mentioned by number, letter, or otherwise, correspond to the respective 
     articles, sections, subsections, paragraphs and subparagraphs of this 
     Operating Agreement so numbered unless otherwise so designated.

          (d)  The titles or leadlines applied to articles, sections and 
     subsections in this Operating Agreement are inserted only as a matter of
     convenience and ease in reference and in no way define, limit or describe
     the scope or intent of any provisions of this Operating Agreement.

          (e)  The words "herein", "hereof" and "hereunder" and words of 
     similar import, without reference to any particular article, section, 
     subdivision, paragraph or subparagraph, refer to this Operating Agreement
     as a whole rather than to any particular article, section, subdivision, 
     paragraph or subparagraph hereof; where such words are used with reference
     to a particular article, section, subdivision, paragraph or subparagraph 
     of this Operating Agreement, such reference, by definition, shall be 
     construed to refer to the identical article, section, subdivision, 
     paragraph or subparagraph contained in this Operating Agreement and in any
     agreement supplemental thereto or amendatory thereof, unless the context 
     clearly requires otherwise.

          (f)  All accounting terms not otherwise defined herein have the
     meanings assigned to them in accordance with generally accepted accounting 
     principles.

     Section 1.3.   COMPUTATIONS. Unless the facts shall then be otherwise, 
all computations required for the purposes of this Operating Agreement shall 
be made on the assumption that: (i) the Operating Agreement Payments shall be 
paid as and when the same become due; and (ii) all credits required by this 
Operating Agreement or the Indenture to be made to any fund or account shall 
be made in the amounts and at the times required.

     Section 1.4.   COMPLIANCE CERTIFICATES AND OPINIONS. Upon any application
or request by the Corporation to the District to take any action under any 
provision of this Operating Agreement, the District shall furnish the 
Corporation and the Trustee with a certificate of a District Representative 
stating that all conditions precedent, if any, provided for in this Operating 
Agreement relating to the proposed action have been complied with and, upon 
the reasonable request of the Corporation and the Trustee, an Opinion of 
Counsel stating that in the opinion of such Counsel all such conditions 
precedent, if any, have been complied with, except that in the case of any 
such application or request under any provision of this Operating Agreement 
pursuant to which the taking of such action is specifically required by such 
provision, no additional certificate or opinion need be furnished.



                                      4

<PAGE>

     Except as provided in Section 1.5 hereof, every certificate or opinion 
with respect to compliance with a condition or covenant provided for in this 
Operating Agreement or the Indenture shall include:

          (1)  a statement or opinion specifically identifying the provisions
     or sections of this Operating Agreement or the Indenture requiring such 
     certificate;

          (2)  a statement that each individual signing such certificate or 
     opinion has read such covenant or condition and the definitions herein 
     relating thereto;

          (3)  a brief statement as to the nature and scope of the examination 
     or investigation upon which the statements or opinions contained in such
     certificate or opinion are based;

          (4)  a statement that in the opinion of each such individual, he 
     has made such examination or investigation as is necessary to enable him 
     to express an informed opinion as to whether or not such covenant or 
     condition has been complied with; and

          (5)  a statement as to whether, in the opinion of each such 
     individual, such condition or covenant has been complied with.

     Any Opinion of Counsel may be qualified by reference to the 
constitutional powers of the United States of America, the police and 
sovereign powers of the State, judicial discretion and bankruptcy, 
insolvency, reorganization, moratorium, and other similar laws affecting 
creditors rights generally and to similar matters, and by other reasonable 
qualifications.

     Section 1.5.   FORM OF DOCUMENTS DELIVERED TO TRUSTEE.  In any case 
where several matters are required to be certified by, or covered by an 
opinion of, any specified Person, it is not necessary that all such matters 
be certified by, or covered by the opinion of, only one such Person, or that 
they be so certified or covered by only one document, but one such Person may 
certify or give an opinion with respect to some matters and one or more other 
such Persons as to other matters, and any such Person may certify or give an 
opinion as to such matters in one or several documents.

     Any certificate or opinion of a Corporation Representative or a District 
Representative may be based, insofar as it relates to legal matters, upon a 
certificate or opinion of, or representations by, counsel, unless such 
representative, in the exercise of reasonable care, should know that the 
certificate or opinion or representations with respect to the matters upon 
which his certificate or opinion is based are erroneous.  Any Opinion of 
Counsel may be based, insofar as it relates to factual matters, upon a 
certificate or opinion of, or representations by, a Corporation 
Representative or a District Representative stating that the information with 
respect to such factual matters is in the possession of the Corporation or 
the District unless such Counsel, in the exercise of reasonable care, should 
know that the certificate or opinion or representation with respect to such 
matters are erroneous.



                                      5

<PAGE>

     Where any Person is required to make, give or execute two or more 
requests, consents, certificates, statements, opinions or other instruments 
under this Operating Agreement, they may, but need not, be consolidated and 
form one instrument.

     Wherever in this Operating Agreement, in connection with any certificate 
or report to the Trustee, it is provided that the Corporation or the District 
shall deliver any document as a condition or as evidence of either the 
Corporation's or the District's compliance with any term hereof, it is 
intended that the truth and accuracy, at the time of the effective date of 
such certificate or report (as the case may be), of the facts and opinions 
stated in such document shall in each case be conditions precedent to the 
right of the District or the Corporation to certify as to the sufficiency of 
such certificate or report as evidence of compliance.










                                      6

<PAGE>

                                    ARTICLE 2

                    REPRESENTATIONS, WARRANTIES AND COVENANTS

              Section 2.1.   REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
CORPORATION.  The Corporation makes the following representations, warranties
and covenants:

          (a)  The Corporation is a corporate instrumentality of the District 
     and a nonprofit corporation organized under the laws of the State of 
     Colorado.

          (b)  The Corporation has full legal right, power and authority and 
     has taken all official actions necessary (i) to enter into this Operating
     Agreement, (ii) to issue, execute and deliver the Series 1996 Bonds, 
     (iii) to own the Property and the Project, (iv) to perform its obligations
     hereunder and under the Indenture and the Series 1996 Bonds, and (v) to 
     carry out and to consummate all transactions contemplated by this Operating
     Agreement.

          (c)  The representative of the Corporation executing this Operating 
     Agreement is fully authorized to execute the same.

          (d)  This Operating Agreement, the Deed of Trust and the Reimbursement
     Agreement have been duly executed and delivered by the Corporation and, 
     subject to the effective date set forth in Section 4.2 hereof, upon due 
     authorization, execution and delivery by the other parties hereto and 
     thereto, will constitute valid and binding obligations of the Corporation,
     enforceable against the Corporation in accordance with their respective 
     terms, except as such enforcement may be limited by bankruptcy, insolvency,
     reorganization, moratorium and other similar laws affecting the rights of 
     creditors generally and by judicial discretion in the exercise of remedies.

          (e)  The execution and delivery of this Operating Agreement, the Deed 
     of Trust and the Reimbursement Agreement, the issuance, execution and 
     delivery of the Series 1996 Bonds, the performance by the Corporation of 
     its obligations hereunder and thereunder, the consummation of the 
     transactions contemplated hereby and thereby and the fulfillment or 
     compliance with the terms hereof and thereof, will not conflict with or 
     constitute a violation or breach of or default (with due notice or the 
     passage of time) under the constitution of the State of Colorado or under 
     any applicable law, bylaw, administrative rule or regulation or any
     ordinance or any order, judgment or decree or any indenture, mortgage, deed
     of trust, lease, contract or other agreement or instrument to which the 
     Corporation is a party or by which it or its properties are otherwise 
     subject or bound, or result in the creation or imposition of any prohibited
     lien, charge or encumbrance of any nature whatsoever upon any of the 
     property or assets of the Corporation or the District, which conflict,
     violation, breach, default, lien, charge or encumbrance would have
     consequences that would materially and adversely affect the consummation of
     the transactions contemplated by this Operating Agreement, the Deed of 



                                      7

<PAGE>

     Trust or the Reimbursement Agreement or the financial condition, assets, 
     properties or operations of the Corporation or its properties.

          (f)  No consent or approval of any trustee or holder of any 
     indebtedness of the Corporation, and no consent, permission, authorization,
     order or license of, or filing or registration with, any governmental 
     authority is necessary in connection with the execution and delivery of 
     this Operating Agreement or the consummation of any transaction herein or
     therein contemplated, except as have been obtained or made and as are in 
     full force and effect.

          (g)  There is no action, suit, proceeding, inquiry or investigation 
     before or by any court or federal, state, municipal or other governmental
     authority pending or, to the knowledge of the Corporation after 
     reasonable investigation, threatened against or affecting the Corporation
     or the assets, properties or operations of the Corporation which, if 
     determined adversely to the Corporation or its interests, would have a 
     material and adverse effect upon the consummation of the transactions
     contemplated by or the validity of this Operating Agreement or upon the 
     financial condition, assets, properties or operations of the Corporation,
     and the Corporation is not in default with respect to any order or decree
     of any court or any order, regulation or demand of any federal, state, 
     municipal or other governmental authority, which default might have 
     consequences that would materially and adversely affect the consummation 
     of the transactions contemplated by this Operating Agreement, or the
     financial condition, assets, properties or operations of the Corporation.

          (h)  The Corporation covenants that it will comply with the 
     requirements of all applicable laws, rules, regulations and orders of 
     any sovereign or governmental authority having jurisdiction over the 
     Corporation or the Project, non-compliance with which would materially 
     adversely affect the ability of the Corporation to perform its obligations
     under this Operating Agreement, unless the same is being contested in good
     faith and by appropriate proceedings and such contest shall operate to stay
     the material adverse effect of any such noncompliance.

          (i)  The Corporation will furnish to the Trustee, the Credit 
     Enhancement Provider and the District as soon as possible and in any event
     within two Business Days after the discovery by any officer of the 
     Corporation of any Event of Default (as such term is defined in the 
     Indenture), a certificate of a Corporation Representative, setting forth 
     the details of such Event of Default and the action, if any, which the 
     Corporation proposes be taken with respect thereto.

          (j)  The Corporation will take all action and do all things that it 
     is authorized by law to take and do in order to perform and observe all
     covenants and agreements on its part to be performed and observed under
     this Operating Agreement.



                                      8

<PAGE>

          (k)  The Corporation has determined that issuing the Series 1996 
     Bonds to purchase the Property and implement the financing of the Project
     will serve the public interest.

          (l)  Upon termination of this Operating Agreement, the District shall
     be entitled to acquire title to the Property and all improvements thereon
     as herein provided; provided that the Deed of Trust securing the payment 
     of principal of and interest on the Bonds shall continue to be a lien on 
     the Property for so long as the Bonds remain outstanding within the meaning
     of the Indenture or obligations of the Corporation otherwise secured
     thereby remain unpaid.

          (m)  The Corporation covenants and agrees to provide to the District,
     not later than September 1 of each year during the Term hereof, a budget 
     for the Project for the ensuing calendar year.

          (n)  The Corporation will, upon reasonable notice, and subject to 
     applicable laws and regulations, permit any Person designated by the 
     District, the Credit Enhancement Provider, or the Trustee in writing, 
     at its own expense, to visit any of the properties of the Corporation 
     during normal business hours to examine the books and financial records 
     of the Corporation and make copies thereof or extracts therefrom, and 
     to discuss the affairs, finances and accounts of the Corporation with the
     officers and employees of the Corporation, all at such reasonable times 
     and as often as the District may reasonably request.  The District, the 
     Credit Enhancement Provider and the Trustee will each be obligated to keep
     confidential any information regarding the Corporation received pursuant 
     to this subparagraph (n) unless the District, the Credit Enhancement 
     Provider, or the Trustee is obligated by law to provide such information
     to a third party.

          (o)  The Corporation hereby covenants and agrees that all activities
     undertaken by the Corporation will be executed in a cost-effective and 
     efficient manner in order to assure that operation of the Corporation 
     complies in all respects with the interest and purpose of the Corporation
     specified in the articles of incorporation and bylaws thereof.

          (p)  The Corporation will execute, acknowledge where appropriate, 
     and deliver from time to time promptly at the request of the District or
     the Trustee all such instruments and documents as in the reasonable 
     opinion of the District or the Trustee are reasonably required to carry 
     out the intent and purposes of this Operating Agreement; provided, however,
     that the Corporation shall not be required to execute, acknowledge and 
     deliver any such instruments and documents in the event that any such 
     instruments or documents will have a material adverse impact on the rights
     of the Corporation under this Operating Agreement.  The Corporation
     hereby covenants to execute and deliver such additional instruments and to
     perform such additional acts as may be reasonably required or, in the 
     reasonable opinion of the District, the Trustee or the Credit Enhancement
     Provider to carry out the intent of this Operating Agreement or to perfect
     or give further assurances of any of the rights granted or provided for in
     this Operating Agreement.



                                      9

<PAGE>

          (q)  Any certificate signed by a Corporation Representative and
     delivered pursuant to this Operating Agreement, the Intergovernmental 
     Agreement or the Indenture shall be deemed a representation and warranty
     by the Corporation as to the statements made therein.

     Section 2.2.   REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE DISTRICT.
The District, as of the date hereof, represents, warrants and covenants and 
agrees as follows:

          (a)  The District is duly established and organized as a 
     quasi-municipal corporation and special district under and pursuant to 
     the laws of the State of Colorado, with full legal right, power and 
     authority under all applicable laws, including the laws of the State, 
     (i) to enter into this Operating Agreement and the Intergovernmental 
     Agreement, (ii) to be bound by the terms hereof and thereof, (iii) to 
     perform its obligations hereunder and thereunder, (iv) to consummate the
     transactions contemplated by this Operating Agreement and the 
     Intergovernmental Agreement, (v) to issue bonds and incur indebtedness, 
     and (vi) to approve the organization of the Corporation and the issuance 
     of the Bonds thereby.

          (b)  This Operating Agreement and the Intergovernmental Agreement have
     been duly authorized, executed and delivered by the District and, subject 
     to the effective dates of such agreements upon the due authorization, 
     execution and delivery by all parties hereto and thereto, will constitute 
     valid and binding obligations of the District, enforceable in accordance 
     with their respective terms, except as such enforcement may be limited by
     bankruptcy, insolvency, reorganization, moratorium or other similar laws
     affecting the rights of creditors generally and by judicial discretion in 
     the exercise of equitable remedies.

          (c)  The representative of the District executing this Operating 
     Agreement is fully authorized to execute the same.

          (d)  The execution and delivery of this Operating Agreement and the 
     Intergovernmental Agreement, the consummation of the transactions herein 
     and therein contemplated and the fulfillment of or compliance with the 
     terms and conditions hereof and thereof, will not conflict with or 
     constitute a violation or breach of or default (with due notice or the 
     passage of time or both) under the aforesaid constitution or under any 
     applicable law or administrative rule or regulation, or any applicable 
     court or administrative decree, order or judgment, or any indenture,
     mortgage, deed of trust, contract or other agreement or instrument to 
     which the District is a party or by which it or its properties are 
     otherwise subject or bound, or result in the creation or imposition of 
     any prohibited lien, charge or encumbrance of any nature whatsoever upon
     any of the property or assets of the District, which conflict, violation,
     breach, default, lien charge or encumbrance would have consequences that 
     would materially and adversely affect the consummation of the transactions
     contemplated by this Operating Agreement and the Intergovernmental 
     Agreement or the financial condition, assets, properties or operations of
     the District.



                                     10

<PAGE>

          (e)  All necessary consents, permissions, authorization, orders or
     licenses of, or filing or registration with, any governmental authority
     necessary in connection with the execution and delivery of this Operating
     Agreement and the Intergovernmental Agreement or the consummation of any 
     transaction contemplated herein or therein have been obtained or made and
     are in full force and effect as of the date of execution and delivery of 
     this Operating Agreement.

          (f)  There is no action, suit, proceeding, inquiry or investigation 
     before or by any court or federal, state, municipal or other governmental
     authority pending or, to the knowledge of the District after reasonable 
     investigation, threatened against or affecting the District or the assets,
     properties or operations of the District which, if determined adversely 
     to the District or its interests, would have a material and adverse effect
     upon the consummation of the transactions contemplated by or the validity
     of this Operating Agreement or upon the financial condition, assets, 
     properties or operations of the District, and the District is not in 
     default with respect to any order or decree of any court or any order, 
     regulation or demand of any federal, state, municipal or other governmental
     authority, which default might have consequences that would materially and
     adversely affect the consummation of the transactions contemplated by this
     Operating Agreement or the Intergovernmental Agreement or the financial
     conditions, assets, properties or operations of the District.

          (g)  The District will deliver to the Trustee:

               (i)   as soon as practicable and in any event within the time 
          required by the Statutes of the State of Colorado, complete financial
          statements, all in reasonable detail and satisfactory in scope as to
          the contents thereof;

               (ii)  promptly upon receipt thereof, a copy of each other report
          submitted to the District by its accountants in connection with any 
          annual, interim or special audit or review by them of the books of the
          District; and

               (iii) with reasonable promptness, such other financial data as 
          the Trustee or the Underwriter reasonably requests.

     Together with each delivery of financial statements required by clause 
     (i) above, the District will deliver to the Trustee a certificate of a 
     District Representative stating that there exists no Event of Default or 
     Default hereunder or if any such Event of Default or Default exists, 
     stating the nature thereof, the period of existence thereof and what action
     the District proposes to take with respect thereto.  The Underwriter is 
     hereby authorized to deliver a copy of any financial statement delivered 
     to it pursuant to this Section 2.2 to any regulatory body having 
     jurisdiction over it.  Notwithstanding the foregoing, in lieu of compliance
     with the provisions of paragraph 2.2(g), the District may comply with the
     terms and conditions of any continuing disclosure agreement required by 
     the Underwriter in connection with the Series 1996 Bonds.



                                     11

<PAGE>


          (h)  The District will, upon reasonable notice, and subject to 
     applicable laws and regulations, permit any Person designated by the 
     Corporation in writing, at its own expense, to visit any of the properties
     of the District during normal business hours to examine the books and 
     financial records of the District and make copies thereof or extracts 
     therefrom, and to discuss the affairs, finances and accounts of the 
     District with the officials and employees of the District, all at such 
     reasonable times and as often as the Corporation, the Credit Enhancement
     Provider or the Trustee  may reasonably request.  The Corporation, the 
     Credit Enhancement Provider and the Trustee will each be obligated to
     keep confidential any information regarding the District received
     pursuant to this subparagraph (h) unless the Corporation, the Credit 
     Enhancement Provider or the Trustee is obligated by law to provide such 
     information to a third party.

          (i)  The District will comply with the requirements of the 
     Constitution, and all laws of the State of Colorado and of any 
     governmental authority having jurisdiction over the District, 
     non-compliance with which would materially adversely affect its ability
     to perform its obligations under this Operating Agreement, unless such 
     requirements are contested in good faith and by appropriate proceedings
     and such contest shall operate to stay the material adverse effect of any
     such noncompliance.

          (j)  The District covenants to furnish to the Corporation, the Credit
     Enhancement Provider and the Trustee as soon as possible and in any event
     within two Business Days after the discovery by any employee of the 
     District of any Event of Default (as such term is defined herein) a 
     certificate of a District Representative, setting forth the details of 
     such Event of Default (as such term is defined herein) and the action 
     which the District proposes to take with respect thereto; provided, 
     however, that for purposes of this subparagraph (j), a default described
     in paragraph 11.1(b) hereof shall become an Event of Default only upon 
     failure of the District to cure such Default within the period of grace 
     permitted therein.

          (k)  The District will take all action and do all things that it is 
     authorized by law to take and do in order to perform and observe all 
     covenants and agreements on its part to be performed and observed 
     hereunder.



                                     12

<PAGE>

          (l)  The District will execute, acknowledge where appropriate, and
     deliver from time to time promptly at the request of the Corporation, the
     Credit Enhancement Provider or the Trustee all such instruments and 
     documents as in the reasonable opinion of the Corporation, the Credit 
     Enhancement Provider or the Trustee are reasonably required to carry out 
     the intent and purposes of this Operating Agreement; provided, however, 
     that the District shall not be required to execute, acknowledge and 
     deliver any such instruments and documents in the event that any such 
     instruments or documents will have a material adverse impact on the rights
     of the District under the Operating Agreement.  The District hereby
     covenants to execute and deliver such additional instruments and to perform
     such additional acts as may be reasonably required or, in the opinion of 
     the Corporation, the Credit Enhancement Provider or the Trustee, to carry 
     out the intent of this Operating Agreement or to perfect or give further 
     assurances of any of the rights granted or provided for in this Operating
     Agreement.

          (m)  The District shall enforce the Intergovernmental Agreement for 
     the benefit of the Corporation and the holders of the Bonds.

          (n)  Any certificate signed by a District Representative and delivered
     pursuant to this Operating Agreement, the Intergovernmental Agreement or 
     the Indenture shall be deemed a representation and warranty by the District
     as to the statements made therein.



                                     13

<PAGE>

                                    ARTICLE 3

                        ISSUANCE OF THE SERIES 1996 BONDS

              Section 3.1.   THE SERIES 1996 BONDS.  The Corporation has
authorized and the District has approved the issuance of the Series 1996 Bonds
pursuant to the Indenture.  The Corporation has caused the proceeds of sale of
the Series 1996 Bonds to be paid to the Trustee on the Closing Date for deposit
pursuant to the terms and conditions of the Indenture.

              Section 3.2.   ACQUISITION OF PROJECT.  The Corporation will be
responsible for the acquisition, construction and completion of the Project.

              Section 3.3.   LIABILITY.  All obligations of the Corporation
incurred under the Indenture shall be general obligations of the Corporation, to
which the Corporation has pledged the Trust Estate, including the Revenues, as
provided in the Indenture.  The Series 1996 Bonds, and the interest thereon, do
not constitute a general obligation debt, multiple fiscal year financial
obligation, liability, general or moral obligation or a pledge of the faith and
the credit of the District, the Town of Castle Rock, Colorado, the State of
Colorado (the "State") or any other political subdivision, within the meaning of
any constitutional or statutory limitation or provision.  Neither the State, the
District nor any other political subdivision shall be liable thereon and in no
event shall such Series 1996 Bonds be payable out of any funds or properties
other than the Trust Estate.  Neither the faith and credit nor the taxing power
of the State, the Town of Castle Rock, Colorado, the District, or any other
political subdivision, instrumentality or agency of the foregoing is pledged to
the payment of the principal of the Series 1996 Bonds or the interest thereon or
other costs incident thereto.

              Section 3.4.   LIABILITY OF DISTRICT.  The obligations of the
District incurred hereunder shall constitute a multiple fiscal year financial
obligation and pledge of the taxing power of the District, to the extent and as
approved by the voters of the District at the election held November 7, 1995,
subject to the limitation of Section 5.1(c) hereof.

              Section 3.5.   OWNERSHIP OF PROJECT.  As between the Corporation
and the District, the Corporation will be the owner of the Property and the
Project and the District shall have no fee title thereto until such time as a
deed to all or any portion of the Property and the Project is delivered to the
District as herein provided.  So long as the District shall not be in default
hereunder or during any period of grace permitted to the District to cure a
default under Article 11 hereof, and until such time as the Corporation has
transferred any Project facilities to the District as herein provided, the
Corporation will be responsible for the operation of the Project in accordance
with the terms hereof at all times and will be liable at all times during the
Term hereof for all risk, loss and damage incurred with respect to the Project.

              Section 3.6.   [INTENTIONALLY OMITTED].

              Section 3.7.   ADDITIONS AND CHANGES. The Corporation (or such
instrumentality, authority or department as shall be designated by the
Corporation) shall have full responsibility for the 

                                     14

<PAGE>

acquisition of the Property and completion of the Project, by such means and 
in such manner as shall be determined in the discretion of the Corporation, 
with the consent of the District.  

              Section 3.8.   AWARD OF CONTRACTS.  The Corporation (or such
instrumentality, authority or department as shall be designated by the
Corporation) has executed or shall execute, or has awarded or shall award,
contracts and subcontracts and has issued or shall issue purchase orders
covering the acquisition and completion of the Project.  The contracts, the
purchase orders and the work orders for the work to be done are herein referred
to as the "Project Contracts".

              Section 3.9.   ADMINISTRATION OF CONTRACTS.  The Corporation (or
such instrumentality, authority or department as shall be designated by the
Corporation) has had and will continue to have full responsibility for
preparing, administering, amending and enforcing the Project Contracts and
litigating or settling claims thereunder, and will be entitled to all
warranties, guaranties and indemnities provided under the Project Contracts and
by the applicable laws, except with respect to Project Contracts executed or to
be executed in connection with Project facilities which have been transferred to
the District.



                                     15

<PAGE>

                                    ARTICLE 4

                              USE OF PROCEEDS; TERM

              Section 4.1.   USE OF PROCEEDS OF BONDS.  The District hereby
acknowledges that the Corporation will issue the Series 1996 Bonds and incur the
indebtedness evidenced thereby (the aggregate principal amount of which includes
the Costs of Issuance with respect thereto), in order to provide permanent
financing for the Property in accordance with the Indenture.

              Section 4.2.   TERM OF AGREEMENT.  The Term of this Operating
Agreement shall commence on the date specified in Section 5.1(d) as of the date
the District is obligated to make Operating Agreement Payments and shall
terminate on payment of all obligations secured by the Deed of Trust.



                                     16

<PAGE>

                                    ARTICLE 5

                          OPERATING AGREEMENT PAYMENTS

              Section 5.1.   OPERATING AGREEMENT PAYMENTS.

                   (a)  The District hereby agrees to pay to the Corporation,
              its successors and assigns, the following (which are referred to
              herein as "Operating Agreement Payments"):  (i) all Operations and
              Maintenance Expenses to the extent not paid from Revenue, and (ii)
              any deficiencies of Revenue required to pay obligations secured by
              the Deed of Trust, each within the limitations specified in the
              questions voted upon by the electors of the District on November
              7, 1995.  Operating Agreement Payments shall be due and payable
              within thirty (30) days after receipt of amounts collected
              therefor from the mill levy imposed by the District pursuant to
              paragraph (c) below.  The District hereby acknowledges that the
              payments made under the Development Agreement shall constitute
              payments in lieu of taxes imposed because of the limitations
              described in paragraph (d) below, and the District approves the
              Development Agreement and consents to the release thereof to the
              extent of the imposition of the mill levy as described in
              paragraph (d) below.

                   (b)  Overdue Operating Agreement Payments shall continue as
              an obligation of the District until the amount in default has been
              fully paid and shall bear interest at the rate of fifteen percent
              (15%) per annum.

                   (c)  Any and all amounts payable by the District hereunder,
              including, but not limited to, amounts payable pursuant to the
              provisions of Sections 5.1(a) and 5.1(b) are limited to amounts
              (i) collected from a mill levy against taxable real and personal
              property within the District not to exceed 35 mills, and (ii)
              amounts collected by the District pursuant to the
              Intergovernmental Agreement.  In the event amounts collected from
              such sources shall be insufficient in any year, the amount of such
              deficiency shall nevertheless be a continuing obligation of the
              District payable from such sources in subsequent years.  The
              District hereby agrees, subject to the limitations of clause (i)
              above, to include in its annual certification to the Board of
              County Commissioners of Douglas County, Colorado, a mill levy
              sufficient, when combined with other revenues reasonably
              anticipated to be available, to satisfy its obligations hereunder.
              In the event of a change in the method for determining assessed
              value or the ratio of valuation for assessment, the maximum mill
              levy shall be adjusted to account for such revision so that the
              taxes certified by the District shall be determined as if such
              change had not occurred.  The District hereby agrees to take
              reasonable steps to enforce the Intergovernmental Agreement and
              the Development Agreement.

                   (d)  The obligations of the District to make any Operating
              Agreement Payments from mill levy collections shall be enforceable
              as of the date that either (i) the Town of Castle Rock, Colorado
              shall have approved an amendment to the service plan specifically
              authorizing the above-described mill levy imposition, or (ii) the
              District shall have received 

                                     17

<PAGE>

              an opinion acceptable to the District of counsel acceptable to
              the District that such mill levy may be imposed without regard
              to any service plan amendment.

              Section 5.2.   FAIR VALUE.  The District hereby determines that
the Operating Agreement Payments payable during the Term hereof shall be paid by
the District during the Term hereof for and in consideration of the benefit
provided by the Project during such Term.  In making such determination,
consideration has been given to the costs of the completion of the Project by
the Corporation, the other obligations of the parties under this Operating
Agreement, the uses and purposes which may be served by the Project, the
benefits therefrom which will accrue to the District and the general public, and
the cost of providing alternative service contracts by the District.

              Section 5.3.   TITLE PROVISIONS.  During the Term of this
Operating Agreement, the Corporation shall hold title to and ownership of each
of the Project facilities and any and all additions thereto which comprise
repairs, replacements, modifications, improvements and substitutions until such
Project facility is transferred to the District.  The District hereby agrees
that any damage to the Project that would materially impact the operation of the
Project that is occasioned by the removal of fixtures and improvements shall be
promptly repaired.  Notwithstanding anything to the contrary herein, it is
understood that title to personal property permanently attached to the Project
by the District or any other entity, instrumentality, authority or department of
the District shall become a part of the Project.


                                     18

<PAGE>

                                    ARTICLE 6

                    MAINTENANCE; TAXES; PROJECT IMPROVEMENTS;
                          INSURANCE; AND OTHER MATTERS

              Section 6.1.   MAINTENANCE, UTILITIES, TAXES AND ASSESSMENTS.  The
Corporation and the District each agree that during the term of this Operating
Agreement it will itself at its own expense or will cause others to (a) keep the
Project facilities which it owns in as reasonably safe condition as its
operations will reasonably permit, and (b) keep the Project facilities which it
owns in good repair and in good operating condition, making from time to time
all necessary repairs thereto and renewals and replacements thereof, which may
be necessary for this purpose, so that the Project facilities which it owns will
remain suitable and efficient for use of the character described in and
contemplated by the Indenture.

              Throughout the Term of this Operating Agreement all improvement,
repair and maintenance of the Project facilities shall be the responsibility of
the party owning such facilities, and such party shall pay for or otherwise
arrange for the payment of all utility services supplied to such facilities,
which may include, without limitation, cleaning services, maintenance, security,
power and electricity, gas, telecommunications and radio equipment and all
utilities and services supplied to or in connection with the Project, and shall
pay for or otherwise arrange for the payment of the cost of the repair and
replacement of such facilities or any part thereof resulting from ordinary wear
and tear.

              Each party shall also pay or cause to be paid, without abatement,
deduction or offset, all property taxes and general and special assessments
(collectively, "property taxes") of any type or nature levied, assessed or
charged by an authorized governmental authority to and against the Project
facilities which it owns, the improvements thereto from time to time and the
respective interests or estates therein; provided that with respect to special
assessments or other governmental charges that may lawfully be paid in
installments over a period of years, each party shall be obligated to pay only
such installments as are required to be paid during the Term of this Operating
Agreement as and when the same become due.  

              The foregoing provisions are not a limitation on the obligations
of the District to pay Operating Agreement Payments to the Corporation.

              Each party may, at its expense and in its name, in good faith
contest any such taxes, assessments, utility and other charges and, in the event
of any such contest, may permit the taxes, assessments or other charges so
contested to remain unpaid during the period of such contest and any appeal
therefrom unless, by nonpayment of any such items, the Project or any part
thereof will be subject to loss or forfeiture, in which event the responsible
party shall promptly pay such taxes, assessments or charges or provide full
security against any loss which may result from nonpayment, in form satisfactory
to the Credit Enhancement Provider and the Trustee.

                                     19

<PAGE>

              Any payments by the Corporation of the foregoing amounts with
respect to Recreational Facilities shall be considered Operating Agreement
Payments due from the District hereunder.

              Section 6.2.   MODIFICATION OF PROJECT.  The District shall have
the right to (but shall not be obligated to), at its own expense, remodel the
Project or to make additions, modifications and improvements to the Project. 
Except as otherwise provided in Section 5.3 and Section 6.5 hereof, all such
additions, modifications and improvements shall thereafter comprise part of the
Project, and shall be subject to the provisions of this Operating Agreement. 
Such additions, modifications and improvements shall not in any way damage the
Project or cause the Project to be used for purposes other than those authorized
under the provisions of applicable federal or state law or the Code; and the
Project, upon completion of any additions, modifications and improvements made
thereto pursuant to this Section, shall be of a value which is not less than the
value of the Project immediately prior to the making of such additions,
modifications and improvements.  The District will not permit any mechanics or
other liens to be established or remain against the Project for labor or
materials furnished in connection with any additions, modifications,
improvements, repairs, renewals or replacements made by the District pursuant to
this Section; provided that if any such lien is established and the District
shall first notify or cause to be notified the Corporation and the Trustee of
the District's intention to do so, and shall provide the Corporation with full
security against any loss or forfeiture which might arise from the nonpayment of
any such item, in form satisfactory to the Corporation the District may in good
faith contest any lien filed or established against the Project, and in such
event may permit the items so contested to remain undischarged and unsatisfied
during the period of such contest and any appeal therefrom .  The Corporation
will cooperate fully in any such contest, upon the request and at the expense of
the District.

              Section 6.3.   LIABILITY AND PROPERTY DAMAGE INSURANCE.  The
Corporation is obligated, under the Indenture, to provide insurance with respect
to the Project as therein provided.  All costs and expenses of the Corporation
with respect to Recreational Facilities shall be Operating Agreement Payments
due from the District hereunder.

              Section 6.4.   ADVANCES.  If the District shall fail to perform
any of its obligations under this Article 6, the Corporation or the Trustee may,
but shall not be obligated to, take such action as may be necessary to cure such
failure, including the advancement of money, and the District shall be obligated
to repay all such advances as soon as possible, with interest at a rate of
twelve percent (12.00%) per annum from the date of the advance to the date of
repayment.

              Section 6.5.   INSTALLATION OF PERSONAL PROPERTY.  The District
may at any time and from time to time, in its sole discretion and at its own
expense, install or permit to be installed  items of equipment or other personal
property in or upon the Project which are not permanently attached to the
Project.  All such items shall remain the sole property of the District, in
which neither the Corporation nor the Trustee shall have any interest, and may
be modified or removed by the District at any time provided that the District
shall repair and restore any and all damage to the Project resulting from the
installation, modification or removal of any such items. Nothing in this
Operating Agreement shall prevent the District from purchasing or leasing items
to be installed pursuant to this Section under a lease or conditional sale
agreement, or subject to a 

                                     20

<PAGE>

vendors lien or security agreement, as security for the unpaid portion of the 
purchase price thereof, provided that no such lien or security interest shall 
attach to any portion of the Project.

              Section 6.6.   CONSTRUCTION OF ALTERNATIVE FACILITIES. The 
District agrees that it will not, during the Term hereof, acquire or construct 
an alternate facility to serve substantially the same function as served by the
Project, and that it will not approve the issuance of bonds, notes or other
obligations of another nonprofit corporation to be applied to acquire or
construct such a facility, except as described in clause (iii) of Section 6.7
hereof.

              Section 6.7.   SECURITY INTEREST PROHIBITED.  Neither the District
nor the Corporation shall, directly or indirectly, create, incur, assume or
suffer to exist any mortgage, pledge, lien, charge, encumbrance or claim on or
with respect to all or any portion of the Project or the Revenues, other than
(i) the respective rights of the Corporation, the District, the Credit
Enhancement Provider and the Trustee as herein and in the Indenture, the Deed of
Trust and the Reimbursement Agreement provided, (ii) Permitted Encumbrances
described in the Deed of Trust, and (iii) subordinate mortgages, pledges, liens,
charges, encumbrances or claims the proceeds of which are used to develop
Recreational Facilities on the Property which are approved by the Credit
Enhancement Provider, and which are permitted pursuant to the Indenture.  Except
as expressly provided in this Operating Agreement, the Corporation and the
District shall promptly, at their own expenses, take such action as may be
necessary to duly discharge or remove any such mortgage, pledge, lien, charge,
encumbrance or claim, for which it is responsible, if the same shall arise at
any time.  The District shall reimburse the Corporation for any expense incurred
by it in order to discharge or remove any such mortgage, pledge, lien, charge,
encumbrance or claim.

                                     21

<PAGE>

                                    ARTICLE 7

                     DAMAGE, DESTRUCTION AND EMINENT DOMAIN;
                                 USE OF PROCEEDS

              Section 7.1.   DAMAGE, DESTRUCTION AND EMINENT DOMAIN.  Unless the
District shall have exercised its option to terminate this Agreement pursuant to
any provision of Article 12 hereof, if prior to full payment of the Series 1996
Bonds (or provisions for payment thereof having been made in accordance with the
provisions of the Indenture) (i) the Project or any portion thereof is damaged
or destroyed (in whole or in part) by fire or other casualty or (ii) title to,
or the temporary use of, the Project or any part thereof shall be taken under
the exercise of the power of eminent domain by any governmental body or by any
person, firm or corporation acting under governmental authority, the District
shall be obligated to continue to pay all Operating Agreement Payments with no
abatement or reduction in such amounts whatsoever.

              Section 7.2.   APPLICATION OF PROCEEDS. The proceeds of any award
resulting from any damage to or destruction or condemnation of the Project shall
be deposited with the Trustee, as described and provided for in the Indenture.

              Section 7.3.   NO ABATEMENT OF OPERATING AGREEMENT PAYMENTS IN THE
EVENT OF DAMAGE OR DESTRUCTION.  The amount of Operating Agreement Payments for
the Project shall not be abated or diminished during any period in which by
reason of damage or destruction there is substantial interference with the use
by the District of the Project, or any portion thereof or for any other reason
whatsoever; provided, however, that if any insurance proceeds shall be deposited
with the Trustee under the Indenture, they shall be treated as Revenues and
credited against Operating Agreement Payments due and payable hereunder to the
extent applied to the payment of principal of or interest on the Bonds or to
reimburse the Credit Enhancement Provider with respect to amounts drawn under
the Credit Enhancement and so applied.  In the event of any such damage or
destruction, this Operating Agreement shall nonetheless continue in full force
and effect and the District waives any right to terminate this Operating
Agreement by virtue of any such damage and destruction.

                                     22


<PAGE>

                                    ARTICLE 8

                        DISCLAIMER OF WARRANTIES; ACCESS

              Section 8.1.   DISCLAIMER OF WARRANTIES.  The Corporation makes no
warranty or representation, either express or implied, as to the value, design,
condition, merchantability or fitness for any particular purpose of, or the
fitness for the use contemplated by the District of, the Project or any portion
thereof, or any other representation or warranty with respect to the Project or
any portion thereof or that the Project will be suitable for the purposes or
needs of the District.  In no event shall the Corporation or the Trustee be
liable for incidental, indirect, special or consequential damages, in connection
with or arising out of this Operating Agreement or the Indenture for the
acquisition, construction, existence, furnishing, functioning or District's use
of the Project.

              Section 8.2.   RIGHTS OF ACCESS.  Subject to the provisions of
Section 2.2(h) hereof, the District and the Corporation agree that any
Corporation Representative or District Representative or any officer of the
Trustee shall have the right at all reasonable times to enter upon and to
examine and inspect the Property and the Project.  The District and the
Corporation further agree that any such Corporation Representative or District
Representative or officer shall have such rights of access to the Project as may
be reasonably necessary to cause the proper maintenance of the Property and the
Project in the event of failure by the District or the Corporation to perform
its respective obligations hereunder and provided the District shall not have
cured such failure within the period of grace permitted by Section 11.1(b)
hereof.

              Section 8.3.   FURTHER ASSURANCES AND CORRECTIVE INSTRUMENTS.  The
Corporation and the District agree that they will, from time to time, execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered,
such supplements hereto and such further instruments as may reasonably be
required for correcting any inadequate or incorrect description of the Project
or for carrying out the expressed intention of this Operating Agreement,
including repayment of the Series 1996 Bonds; provided, however, that neither
the Corporation nor the District shall be required to execute, acknowledge and
deliver any such supplements or instruments in the event that any such
supplements or instruments will have a material adverse impact on the respective
rights of either of the parties hereto.

              Section 8.4.   CORPORATION AND DISTRICT REPRESENTATIVES.  Whenever
under the provisions of this Operating Agreement the approval of the Corporation
or the District is required or the Corporation or the District is required to
take some action at the request of the other, such approval or such request
shall be given for the Corporation by a Corporation Representative and for the
District by a District Representative and any party hereto and the Trustee shall
be authorized to act on any such approval or request.

                                     23

<PAGE>

                                    ARTICLE 9

                      ASSIGNMENT, SUBLEASING AND AMENDMENT

              Section 9.1.   ASSIGNMENT BY THE CORPORATION.  The Corporation's
rights under this Operating Agreement (except for the Corporation's rights under
Section 11.3 hereof), including the right to receive and enforce payment of the
Operating Agreement Payments to be made by the District under this Operating
Agreement, may be assigned by the Corporation to the Trustee or the Credit
Enhancement Provider without the consent of the District.

              Section 9.2.   ASSIGNMENT BY THE DISTRICT.  This Operating
Agreement may be assigned as a whole or in part, by the District with the
written consent of the Corporation, the Credit Enhancement Provider and the
Trustee (which consents shall not be unreasonably withheld), subject, however,
to each of the following conditions:

                   (a)  No assignment shall relieve the District from primary
              liability for any obligations hereunder, and in the event of any
              such assignment the District shall continue to remain primarily
              liable for payment of the amounts specified in Sections 5.1
              and 8.3 hereof and for performance and observance of each of the
              other agreements to be performed and observed by the District to
              the same extent as though no assignment had been made.

                   (b)  In the case of an assignment, the assignee shall assume
              the obligations of the District hereunder to the extent of the
              interest assigned.

                   (c)  The District shall, within thirty (30) days after the
              delivery thereof, furnish or cause to be furnished to the
              Corporation and the Trustee a true and complete copy of each such
              assumption or assignment as the case may be.

                   (d)  No such assignment by the District shall cause the
              Project to be used for a purpose other than as may be authorized
              under applicable law and under the Indenture and the Reimbursement
              Agreement.

              Section 9.3.   AMENDMENT OF THIS OPERATING AGREEMENT.  Without the
written consent of the Credit Enhancement Provider and the Trustee, the
Corporation and the District will not alter, modify or cancel, or agree or
consent to alter, modify or cancel this Operating Agreement.

                                     24

<PAGE>

                                   ARTICLE 10

                               FURTHER AGREEMENTS

              Section 10.1.  MAINTENANCE OF POWERS; SUCCESSORS OF CORPORATION. 
The Corporation will at all times use its best efforts to maintain the powers,
functions, duties and obligations now reposed in it or assure the assumptions of
its obligations hereunder by any instrumentality, authority, public agency or
political subdivision succeeding to its powers.

              Section 10.2.  TAX-EXEMPT STATUS OF BONDS.

                   (a)  The Corporation and the District each hereby covenants,
              represents and agrees that (i) the Corporation and the District
              will not take or permit any action to be taken that would
              adversely affect the exclusion from gross income tax for federal
              income tax purposes of the interest on the Series 1996 Bonds and,
              if it should take or permit any such action, the Corporation and
              the District shall take all lawful actions that it can take to
              rescind such action promptly upon having knowledge thereof; and
              (ii) the Corporation and the District will take such action or
              actions, including amending this Operating Agreement, as may be
              reasonably necessary in the opinion of bond counsel, to comply
              fully with all applicable rules, rulings, policies, procedures,
              regulations or other official statements promulgated or proposed
              by the Department of the Treasury or the Internal Revenue Service
              pertaining to obligations the interest on which is excluded from
              gross income for federal income tax purposes and to comply with
              applicable law.

                   (b)  The District hereby covenants and represents to the
              Corporation, and, based upon said covenant and representation, the
              Corporation and the District jointly and severally covenant for
              the benefit of all purchasers and holders of the Series 1996 Bonds
              from time to time outstanding that, as long as any of the Series
              1996 Bonds remain outstanding, moneys on deposit in any fund or
              account in connection with the Series 1996 Bonds, whether such
              moneys were derived from the proceeds of the sale of the Series
              1996 Bonds or from any other sources, and whether held by the
              Trustee pursuant to the Indenture or by any other person pursuant
              to any other arrangement, will not be used in a manner which will
              cause the Series 1996 Bonds to be "arbitrage bonds" within the
              meaning of Section 148(a) of the Code and any regulations
              promulgated or proposed thereunder, and the District and the
              Corporation further covenant to comply with the requirements of
              said Section 148 of the Code and any regulations promulgated or
              proposed thereunder.

                   (c)  The Corporation and the District covenant that neither
              of them will enter into any agreement which would result in the
              payment of principal or interest on the Series 1996 Bonds being
              "federally guaranteed" within the meaning of Section 149(b) of the
              Code.

                                     25

<PAGE>

                   (d)  The Corporation and the District hereby covenant that
              neither the District, the Corporation nor any "related person" (as
              defined in Section 147(a) of the Code) has acquired, pursuant to
              any arrangement, formal or informal, any of the Bonds, and further
              covenant that the District, the Corporation and any such "related
              person" shall not acquire, pursuant to any arrangement, formal or
              informal, any of the Series 1996 Bonds, provided however, that
              Series 1996 Bonds may be purchased by a "related person" so long
              as such purchase complies with the Code.

                   (e)  The Corporation and the District hereby covenant and
              agree to comply with the requirements specified in IRS Revenue
              Procedure 82-26.  Specifically, the Corporation and the District
              warrant, represent and covenant that:

                        (i)  The Corporation is a Colorado not-for-profit
                             corporation which is an instrumentality of the
                             District as defined in Section 3.041(a) of Revenue
                             Procedure 82-26 and Revenue Ruling 57-128, none of
                             whose income will inure to a private person.

                        (ii) Upon retirement of the Series 1996 Bonds, the
                             District will acquire unencumbered fee title to the
                             Project pursuant to a resolution of the District
                             adopted prior to the date of this Agreement
                             approving such acquisition.

                       (iii) All proceeds of the Series 1996 Bonds
                             (excluding costs of issuance) and income from
                             the investment thereof will be applied solely
                             to the costs of acquiring the Property,
                             constructing improvements for Recreational
                             Facilities on the Property, and paying any
                             interest accruing on the Series 1996 Bonds
                             during the period that the Property is being
                             held unimproved prior to the development of
                             Recreational Facilities thereon and during the
                             period Recreational Facilities are being
                             constructed thereon.  All such proceeds are
                             reasonably anticipated to be used for such
                             purposes.  Any such proceeds which remain
                             after the Property has been acquired and
                             construction of Recreational Facilities on the
                             Property has been completed or abandoned will
                             be used by the Trustee pursuant to the
                             Indenture solely to redeem Series 1996 Bonds
                             on the earliest date upon which they can be
                             called without premium pursuant to the
                             Indenture or otherwise applied to pay
                             principal upon the Series 1996 Bonds.

                        (iv) The District and the Related Districts have
                             approved by resolutions adopted no more than one
                             year prior to the date of the issuance of the
                             Series 1996 Bonds the creation of the Corporation,
                             the issuance of the Series 1996 Bonds, and the
                             imposition of payments in lieu of taxes pursuant to
                             the Development Agreement.

                                     26

<PAGE>

                        (v)  The Corporation, the District and the Related
                             Districts will take all reasonable efforts and
                             proceed diligently to secure all necessary
                             approvals for construction and financing of the
                             Recreational Facilities on the Property described
                             in the Residential and Golf Course Market Analysis
                             and Revenue Procedure prepared by THK Associates,
                             Inc. for the Corporation dated February 12, 1996. 
                             All obligations incurred to finance such
                             improvements or otherwise improve the Property will
                             be discharged no later than the latest maturity
                             date of the Series 1996 Bonds.  The Corporation and
                             the District will not consent to the extension of
                             the maturity of the Series 1996 Bonds or any other
                             financing regarding the Project.

                        (vi) The proceeds of all casualty insurance regarding
                             the Project will be used either to restore the
                             Recreational Facilities or to retire the Series
                             1996 Bonds or other financing for the Recreational
                             Facilities.

              Section 10.3.  NOTICE OF CERTAIN EVENTS.  The District hereby
covenants to advise the Corporation, the Credit Enhancement Provider and the
Trustee promptly in writing of the occurrence of any Event of Default hereunder
or any event which, if such event is not cured within a permitted period of
grace, would constitute an Event of Default hereunder, specifying the nature and
period of existence of such event and the actions being taken or proposed to be
taken with respect thereto.  In addition, the District hereby covenants to
advise the Corporation, the Credit Enhancement Provider and the Trustee promptly
in writing of the occurrence of any default hereunder.

              Section 10.4.  NO UNTRUE STATEMENTS.  This Operating Agreement
does not contain, to the best of the Corporation's and the District's knowledge,
any untrue statement of a material fact as of the date hereof and as of the date
of issue of the Bonds.  It is specifically understood by the District that all
such statements, representations and warranties made by the District shall be
deemed to have been relied upon by the Corporation as an inducement to enter
into this Operating Agreement and that if any such statements, representations
and warranties were materially incorrect at the time they were made or as of the
date of issue of the Bonds, the Corporation may consider any such
misrepresentation or breach an Event of Default.

              Section 10.5.  CERTAIN MATTERS REGARDING ANY AGREEMENTS, COVENANTS
AND WARRANTIES RELATING TO TAX EXEMPTION.  The District and the Corporation
recognize that the exclusion from gross income for federal income tax purposes
of the interest to be paid on the Series 1996 Bonds is dependent upon the
District's and the Corporation's compliance with certain provisions of the Code.
The Corporation and the District represent and covenant that:

                   (a)  As prohibited by Section 142(c)(2) of the Code, no
              proceeds of the Series 1996 Bonds shall be used for any of the
              following purposes:

                        (i)  any lodging facility, within the meaning of the
                             Code;

                                     27

<PAGE>

                        (ii) any retail facility (including food and beverage
                             facilities) in excess of a size necessary to serve
                             the general public and users and employees at the
                             Project;

                       (iii) any retail facility (other than parking) for
                             passengers or the general public located
                             outside the Project;

                        (iv) any office building for individuals who are not
                             employees of a governmental unit or of the
                             Corporation;

                        (v)  any industrial park; or

                        (vi) any manufacturing facility within the meaning of
                             Section 144 of the Code.

                   (b)  The proceeds from the sale of the Series 1996 Bonds will
              be used only for payment of certain Costs of Issuance of the
              Series 1996 Bonds and costs of acquiring the Property, and will
              not be used to provide working capital for the Corporation, the
              District or any affiliate thereof as provided in Section 10.2(e)
              above.

                   (c)  The District will not permit or cause any state or local
              governmental unit, nor any constituted authority or
              instrumentality empowered to issue obligations by or on behalf of
              any state or local governmental unit, to issue obligations under
              Sections 140 through 150 of the Code, the proceeds of which will
              be loaned to or used by the District or any related person (as
              defined under Section 147(a)(2) of the Code) during the period
              commencing on the date of issuance of the Series 1996 Bonds and
              ending thirty (30) days thereafter.

                   (d)  All of the information, representations and warranties
              contained in the tax certificates of the Corporation or the
              District in connection with the issuance of the Series 1996 Bonds,
              are reaffirmed and incorporated herein by this reference as if
              fully set forth at this point.

                   (e)  The District shall not take or omit to take or allow any
              person to take or omit to take any action which will adversely
              affect the exclusion from gross income for federal income tax
              purposes of interest on the Series 1996 Bonds.

                   (f)  The District agrees and covenants that any and all
              agreements which the District enters into, from time to time, with
              any entity by which agreement such entity shall sublease, operate
              or manage the Project, shall be in such form which will not
              adversely affect the exclusion from gross income for federal
              income tax purposes of interest on the Series 1996 Bonds.  Any
              such agreement shall provide for cancellation by the Corporation
              or the District on not more than ninety (90) days' notice.

                                     28

<PAGE>

                   (g)  None of the proceeds of the Series 1996 Bonds have been
              or will be used to finance or be used to provide any airplane,
              skybox or other private luxury box, health club facility, facility
              primarily used for gambling, or any store the principal business
              of which is the sale of alcoholic beverages for consumption off
              premises.

                   (h)  The Corporation and the District hereby certify each to
              the other that neither the District nor the Corporation have been
              notified of any listing or proposed listing of either of them by
              the Internal Revenue Service as a bond issuer whose arbitrage
              certifications may not be relied upon.


                                     29

<PAGE>

                                   ARTICLE 11

                         EVENTS OF DEFAULT AND REMEDIES

              Section 11.1.  EVENTS OF DEFAULT.  Each of the following shall be
and constitute an "Event of Default" by the District and a breach of this
Operating Agreement:

                   (a)  Failure by the District to pay any Operating Agreement
              Payment when due and payable hereunder, and the continuation of
              any such failure for a period of three (3) Business Days after any
              such payment is due, unless such failure occurs as the result of
              the application of Section 5.1(c) hereof;

                   (b)  Failure by the District to pay when due any other
              amounts required to be paid by the District under this Operating
              Agreement, unless such failure occurs as the result of the
              application of Section 5.1(c) and (d) hereof or to observe and
              perform any covenant, condition, agreement or provision (other
              than as specified in clauses (a) or (b) of this Section 11.1 and
              other than a failure to comply with Section 2.2(j) hereof)
              contained herein or in documents executed in connection herewith
              on the part of the District to be observed or performed, which
              failure shall continue for a period of thirty (30) days after
              written notice thereof, specifying such failure and requesting
              that it be remedied, shall have been given to the District by the
              Corporation, the Trustee or the Credit Enhancement Provider by
              first class mail or hand delivery, any of which may give such
              notice in their discretion, unless the Person giving such notice
              shall agree in writing to an extension of such thirty day period
              prior to expiration; provided, however, that the Corporation, the
              Trustee and the Credit Enhancement Provider, as the case may be,
              shall be deemed to have agreed to an extension of such period if
              corrective action is initiated by the District within such period,
              is being diligently pursued, and can be continued and completed in
              such manner as to not adversely affect the rights of the
              Registered Owners of the Bonds, the Credit Enhancement Provider or
              the normal operations of the Project or the use thereof for the
              purposes for which such operations are and were originally
              intended;

                   (c)  The District shall (i) apply for or consent to the
              appointment of or taking of possession by a receiver, trustee,
              custodian, liquidator or other similar official of itself or of
              all or a substantial part of its properties or assets, (ii) admit
              in writing its inability to pay its debts as they become due or
              generally become unable to pay its debts as they become due, (iii)
              make a general assignment for the benefit of creditors, or (iv)
              commence a voluntary case as debtor under the federal bankruptcy
              laws (whether under any Title of the United States Code or
              otherwise under any federal law) as now or hereafter constituted
              or file a petition seeking to take advantage of any other law
              relating to bankruptcy, reorganization, insolvency, winding up, or
              composition or adjustment of debts, or acquiesce in writing to, or
              fail to controvert in a timely manner, a petition filed against it
              in any involuntary case under such federal bankruptcy laws, as the
              case may be, or any action shall be taken by it for the purpose of
              effecting any of the foregoing;

                                     30

<PAGE>

                   (d)  A case or proceeding shall be commenced, without the
              application or consent of the District in any court of competent
              jurisdiction, seeking the liquidation, reorganization,
              dissolution, winding up, or composition or readjustment of debts,
              of the District, or the appointment of a receiver, trustee,
              custodian, liquidator or any similar official of the District or
              of all or a substantial part of the assets of the District, or
              similar relief with respect to the District under any federal laws
              relating to bankruptcy (including under any Title of the United
              States Code or otherwise under any federal law), insolvency,
              liquidation, reorganization, winding up, or composition or
              adjustment of debts, shall be commenced against the District and
              such case or proceeding shall continue undismissed or unstayed and
              in effect for any period of 60 consecutive days, or an order for
              relief against the District shall be entered in an involuntary
              case under such federal or other bankruptcy laws;

                   (e)  If (i) the District is adjudged insolvent by a court of
              competent jurisdiction, or (ii) an order, judgment or decree is
              entered by any court of competent jurisdiction appointing, without
              the consent of the District, a receiver, trustee or custodian of
              the District or of the whole or any part of its property and any
              of the aforesaid adjudications, orders, judgments or decrees shall
              not be vacated or set aside or stayed within 60 days from the date
              of entry thereof;

                   (f)  If, under the provisions of any other law for the relief
              or aid of debtors, any court of competent jurisdiction shall
              assume custody or control of the District or of the whole or any
              substantial part of the property of the District and such custody
              or control shall not be terminated within 60 days from the date of
              assumption of such custody or control; or

                   (g)  Any warranty, representation or other statement of the
              District contained in this Operating Agreement or in any
              instrument furnished in compliance with or in reference to this
              Operating Agreement shall prove to have been false or misleading
              in any material respect on the date as of which it was made.

              In case the Corporation (or the Credit Enhancement Provider, as
the assignee of the Corporation) shall have proceeded to enforce any right under
this Operating Agreement and such proceedings shall have been discontinued or
abandoned for any reason or shall have been determined adversely to the
Corporation or the Trustee, then and in every such case the District, the
Corporation, the Trustee and the Credit Enhancement Provider shall be restored
to their respective positions and rights hereunder, and all rights, remedies and
powers of the District, the Corporation, the Trustee and the Credit Enhancement
Provider shall continue as though no such proceeding had been taken, but subject
to the limitations of any such adverse determination.

              Section 11.2.  REMEDIES ON DEFAULT.  Whenever any Event of Default
referred to in Section 11.1 hereof shall have occurred and be continuing:

              (a) The Corporation, the Trustee and the Credit Enhancement
Provider shall have the right (i) to inspect, examine and make copies of the
books and records and any and all accounts, data 

                                     31

<PAGE>

and income tax and other tax returns of the District during regular business 
hours of the District if reasonably necessary in the opinion of the Trustee, 
the Credit Enhancement Provider, or the Corporation, and (ii) to take whatever 
action at law or in equity may appear necessary or desirable to collect the 
amounts then due and thereafter to become due, or to enforce performance and 
observance of any obligation, agreement or covenant of the District under this 
Operating Agreement.

              (b) In case the District shall fail forthwith to pay such amounts
upon such demand, the Credit Enhancement Provider shall be entitled, following
payment of the Bonds or provision therefor, as provided in the Indenture, to
liquidate and sell investments held by the Credit Enhancement Provider or the
Trustee in any account within the Bond Fund and apply the proceeds thereof to
payment of such amounts and the Credit Enhancement Provider shall further be
entitled and empowered to otherwise institute any actions or proceedings at law
or in equity for the collection of the sums so due and unpaid, and may prosecute
any such action or proceeding to judgment or final decree, and may enforce any
such judgment or final decree against the District and collect in the manner
provided by law out of the property of the District the moneys adjudged or
decreed to be payable.

              (c) In case there shall be pending proceedings for the bankruptcy
or for the reorganization of the District under federal bankruptcy laws or any
other applicable law, or in case a receiver or trustee shall have been appointed
for the property of the District or in the case of any other similar judicial
proceedings relative to the District, or to the creditors or property of the
District, the Corporation, the Trustee or the Credit Enhancement Provider shall
be entitled and empowered, by intervention in such proceedings or otherwise, to
file and prove a claim or claims for the whole amount due and payable hereunder
(including amounts due upon acceleration), including interest owing and unpaid
in respect thereof and for any other amounts then due and payable hereunder and,
in case of any judicial proceedings, to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Corporation, the Trustee or the Credit Enhancement Provider allowed in
such judicial proceedings relative to the District, its creditors or its
property, and to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute the same after the deduction
of its charges and expenses; and any receiver, assignee or trustee in bankruptcy
or reorganization is hereby authorized to make such payments to the Trustee, the
Corporation and the Credit Enhancement Provider, as their respective interests
appear, including without limitation any amount due for compensation and
expenses, including counsel fees incurred by it up to the date of such
distribution.

              (d) The District hereby agrees and consents that in conjunction
with the exercise of any remedies provided in this Operating Agreement, with
respect to any dispute relating to this Operating Agreement that service of
process on the District may be made by either personally serving such process on
any member of the Board of Directors of the District or by mailing such service
of process, by registered mail, return receipt requested, to any member of the
Board of County Commissioners of the District, or such service of process may be
made on any such member of the Board of Directors or on the District in any
manner then permitted by law.

                                     32

<PAGE>

              (e) Any amounts collected pursuant to action taken under this
Section 11.2 shall be applied in accordance with the provisions of the Indenture
and the Reimbursement Agreement.

              (f) The foregoing provision of this Section 11.2 are subject to
the limitation that the Trustee shall be entitled to exercise its rights under
this Operating Agreement, other than the rights specified in clause (a)(i)
above, only if the Credit Enhancement Provider has failed to provide payments to
the Trustee pursuant to the Credit Enhancement, or if the Trustee's failure to
exercise such rights could be anticipated to materially adversely effect the
holders of the Series 1996 Bonds.

              Section 11.3.  ATTORNEYS' FEES AND EXPENSES.  If an Event of
Default hereunder occurs and if the Corporation or the Credit Enhancement
Provider should employ attorneys or incur other expenses for the collection of
moneys or the enforcement or performance or observance of any obligation or
agreement on the part of the District herein contained, the District agrees that
it will on demand pay to the Corporation or the Credit Enhancement Provider, as
the case may be, the reasonable fees of such attorneys and such other expenses
so incurred, including those incurred in connection with court appeals.  If an
Event of Default hereunder occurs and if the District should employ attorneys or
incur other expenses for the enforcement of performance or observance of any
obligation or agreement on the part of the Corporation herein contained, the
Corporation agrees that in the event the District prevails in such enforcement
or performance or observance of such obligation or agreement on the part of the
Corporation, the Corporation will on demand pay to the District the reasonable
fees of such attorneys and such other expenses so incurred, including those
incurred in connection with court appeals, provided that the Corporation shall
then have its own funds to make such payments, and provided further that at no
time shall any part of the Trust Estate (including any Revenues) be used or
deemed to be available to be used to make payment of any fees or expenses
described in this sentence.

              Section 11.4.  NO REMEDY EXCLUSIVE.  No remedy herein conferred
upon or reserved to the Corporation, the Trustee or the Credit Enhancement
Provider is intended to be exclusive of any other available remedy or remedies,
but each and every such remedy shall be cumulative and shall be in addition to
every other remedy given under this Operating Agreement or now or hereafter
existing at law or in equity or by statute.  No delay or omission to exercise
any right or power accruing upon any Event of Default shall impair any such
right or power or shall be construed to be a waiver thereof, but any such right
and power may be exercised from time to time and as often as may be deemed
expedient.  In order to entitle the Corporation, the Trustee or the Credit
Enhancement Provider to exercise any remedy reserved to any of them in this
Article 11, it shall not be necessary to give any notice, other than such notice
as may be expressly required by this article or by law.  Subject to the terms of
the Indenture, such rights and remedies as are given the Corporation hereunder
shall also extend to the Credit Enhancement Provider, the Trustee and to Owners
of the Bonds, and the Credit Enhancement Provider, the Trustee and the Owners of
the Bonds shall be entitled to the benefit of all covenants and agreements
herein contained.

                                     33

<PAGE>

              Section 11.5.  NO ADDITIONAL WAIVER IMPLIED BY ONE WAIVER.  In the
event any agreement or covenant contained in this Operating Agreement 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.  No waiver shall be deemed as being
established hereunder through conduct, custom, course of dealing, or trade or
public usage.  Due to the nature of the assignment of certain of the
Corporation's rights and interests hereunder to the Trustee and the Credit
Enhancement Provider, the Corporation shall have no power to waive any default
hereunder by the District in respect of such rights and interest without the
express prior written consent of the Trustee and the Credit Enhancement Provider
and the Credit Enhancement Provider and the Trustee may exercise any of the
rights of the Corporation hereunder, subject to the limitations of the last
paragraph of Section 11.2 hereof.

              Section 11.6.  CREDIT ENHANCEMENT PROVIDER AND TRUSTEE TO EXERCISE
RIGHTS.  Such rights and remedies as are given to the Corporation under this
Article 11 have been assigned by the Corporation to the Credit Enhancement
Provider and the Trustee under an assignment hereof, to which assignment the
District hereby consents.

                                     34


<PAGE>
                                   ARTICLE 12

                              OPTION TO TERMINATE 

              Section 12.1.  OPTIONS TO TERMINATE; OPTIONAL REDEMPTION.  The
District shall have, and is hereby granted, the following options to terminate
the Term of this Agreement:

                   (a)  At any time prior to full payment of the Series 1996
              Bonds, the District may make provision for payment of the Series
              1996 Bonds in accordance with the provisions of the Indenture, and
              the District may terminate the Term of this Agreement, regardless
              of whether the Series 1996 Bonds are then subject to optional
              redemption, (A) by paying to Trustee an amount which, when added
              to all amounts then on deposit in the Bond Fund, will be
              sufficient to pay, retire and redeem all the Outstanding Series
              1996 Bonds in accordance with the provisions of the Indenture
              (including, without limiting the generality of the foregoing,
              principal of the Outstanding Series 1996 Bonds and interest to
              maturity or earliest applicable redemption date, as the case may
              be, and premium, if any, expenses of redemption and all fees and
              expenses of the Trustee and the District) and, in case of
              redemption, by giving notice and making arrangements satisfactory
              to the Trustee for the giving of the required notice of redemption
              under the Indenture, (B) by giving the Corporation, the Trustee
              and the Credit Enhancement Provider notice in writing of such
              termination, and (C) by paying all amounts unpaid under the
              Reimbursement Agreement and the Deed of Trust, and such
              termination shall forthwith become effective.

                   (b)  After full payment of the Series 1996 Bonds (or
              provision for payment thereof having been made in accordance with
              the provisions of Article IX of the Indenture), and after payment
              of all amounts arising under the Reimbursement Agreement and the
              Deed of Trust, the District may terminate the Term of this
              Agreement by giving the Corporation, the Trustee and the Credit
              Enhancement Provider notice in writing of such termination and
              such termination shall forthwith become effective.

                   (c)  The prepayment amount payable by the District in the
              event of any prepayment to be made pursuant to subsections (a) or
              (b) of this Section 12.1 shall be the sum of the following:

                        (i)  An amount of money which, when added to amounts
                   then on deposit in the Redemption Fund, will be sufficient to
                   retire and redeem all the then Outstanding Series 1996 Bonds
                   in the manner required by the Indenture and on the earliest
                   possible date after notice of redemption is given as provided
                   in the Indenture, whether or not such date is an Interest
                   Payment Date, including, without limitation, the principal
                   amount thereof, all interest to accrue to said redemption
                   date, the applicable redemption premium and expenses, if any,
                   plus

                        (ii) An amount of money equal to the administrative fees
                   and expenses of the Trustee and the Corporation accrued and
                   to accrue until such final payment and redemption or purchase
                   of the Series 1996 Bonds, plus

                                      35 
<PAGE>

                        (iii) An amount equal to all amounts then accrued and 
                   to accrue until such final payment and redemption or purchase
                   of the Series 1996 Bonds, plus

                        (iv) An amount of money equal to all sums then due the
                   Corporation under this Agreement, plus

                        (v)  To the extent not included in the foregoing, an
                   amount sufficient to pay all obligations under the
                   Reimbursement Agreement and the Indenture.

              Section 12.2.  EXTRAORDINARY TERMINATION OPTION.  The District
shall have, and is hereby granted, the extraordinary option to terminate this
Agreement upon prepayment of the amounts sufficient to provide for the full
payment of the Series 1996 Bonds (or to make provision for such payment in
accordance with the provisions of the Indenture) and all amounts due under the
Reimbursement Agreement and the Deed of Trust, upon the occurrence of any of the
events set forth in Section 9.10(b) or (c) of the Indenture.

              To exercise such option, the District shall, within sixty (60)
days following the event authorizing or requiring such prepayment, give written
notice to the Corporation and to the Trustee, and shall specify therein the date
for prepayment of the Series 1996 Bonds and specifying the date redemption of
the Series 1996 Bonds is to be made from such prepayment, subject, however, to
the provisions for the deposit of proceeds of condemnation awards, or other
available money held by the Trustee under the Indenture, as set forth in the
Indenture.  Provision shall be made for redemption of the Series 1996 Bonds in
accordance with the express provisions of the Indenture, and the District shall
in all respects make arrangements satisfactory to the Trustee for the giving of
the required notice of redemption in accordance therewith.

              Section 12.3.  RIGHT TO ACQUIRE.  The District is hereby granted
the right to obtain, at any time, unencumbered fee title and exclusive
possession of property (including the Project) financed by obligations of the
Corporation (including the Bonds and obligations arising under the Reimbursement
Agreement), and any additions to such property, by (1) placing into escrow an
amount that will be sufficient to defease such obligations, and (2) paying
reasonable costs incident to the defeasance, in the manner provided in Sections
12.1 or 12.2 hereof.  The District, at any time before its defeases such
obligations, shall not agree or otherwise be obligated to convey any interest in
such property to any person (including the United States of America or its
agencies or instrumentalities) for any period extending beyond or beginning
after the District defeases such obligations.  In addition, the District shall
not agree or otherwise be obligated to convey a fee interest in such property to
any person who was a user thereof, (or a related person) before the defeasance
within 90 days after the District defeases such obligations.

              Section 12.4.  UNENCUMBERED TITLE.  If the District exercises its
option under Section 12.3, the Corporation shall immediately cancel all
encumbrances on such property, including any leases and management agreements. 
Any lease, management contract, or similar encumbrance on such property will be
considered immediately cancelled if the lessee, management company, or other
user vacates such property within a reasonable time, generally not to exceed 90
days, after the date the District exercises its rights under Section 12.3. 
Encumbrances that do not 

                                      36 
<PAGE>

significantly interfere with the enjoyment of such property, such as most 
easements granted to utility companies, are not considered encumbrances for 
purposes of this Section 12.4 or for purposes of Section 12.6.

              Section 12.5.  DEFAULT RIGHTS.  In addition to the foregoing, if
the Corporation defaults in its payments under obligations described in the
Indenture, the District is hereby granted an exclusive option to purchase the
property financed thereby (including the Project) for the amount of the
outstanding indebtedness of the Corporation and accrued interest to the date of
default.  The District shall have (a) not less than 90 days from the date it is
notified by the Corporation of the default in which to exercise the option, and
(b) not less than 90 days from the date it exercises the option to purchase the
property.

              Section 12.6.  TITLE.  Unencumbered fee title to the Property and
the Project and any additions thereto and exclusive possession and use thereof
will vest in the District without demand or further action on its part when all
obligations of the Corporation (including the Bonds and obligations under the
Reimbursement Agreement) are discharged.  For purposes of this Section 12.6,
such obligations will be discharged when (a) cash is available at the place of
payment on the date that the obligations are due (whether at maturity or upon
call for redemption) and (b) interest ceases to accrue on the obligations.  All
leases, management contracts and similar encumbrances on the Property or the
Project shall terminate upon discharge of said obligations in the same manner as
set forth in Section 12.4.



















                                      37 
<PAGE>
                                   ARTICLE 13

                                  MISCELLANEOUS

              Section 13.1.  AMENDMENT OF OPERATING AGREEMENT OR INDENTURE. 
This Operating Agreement may not be effectively changed, amended or modified
except with the written consent of the Credit Enhancement Provider and the
Trustee.  Except as otherwise provided in this Operating Agreement or in the
Indenture, subsequent to the issuance of the Series 1996 Bonds and prior to
their payment in full (or provision for payment thereof having been made in
accordance with the provisions of the Indenture), this Operating Agreement may
not be effectively altered or terminated without the written consent of all the
parties hereto.  The Corporation covenants that it will take no action to amend
or supplement the Indenture in any manner which would materially affect the
obligations of the District hereunder without obtaining the prior written
consent of the District to such amendment or supplement.

              Section 13.2.  NOTICES.  Except as otherwise provided in the
Indenture or this Operating Agreement, all notices, certificates, requests,
requisitions, directions or other communications required or permitted to be
given by the Corporation, the District or the Trustee pursuant to the Indenture
or this Operating Agreement shall be in writing and shall be sufficiently given
and shall be deemed given when mailed by first class mail (unless another form
of communication for any such notice, certificate, request, requisition,
direction or other communication shall be required hereunder), postage prepaid,
addressed as follows:

If to the Corporation:       Castle Rock Ranch Public Improvements Authority
                             Stanford Place III, Suite 902
                             4582 South Ulster Street Parkway
                             Denver, Colorado 80237
                             Attn:  Roger Addlesperger

If to the District:          Dawson Ridge Metropolitan District No. 5
                             Stanford Place III, Suite 902
                             4582 South Ulster Street Parkway
                             Denver, Colorado  80237
                             Attn:  Roger Addlesperger

If to the Trustee:           SouthTrust Bank of Alabama, National Association
                             100 Office Park Drive, Lower Level
                             Birmingham, Alabama  35223
                             Attn:  Corporate Trust Department

If to the Credit        
Enhancement Provider:        BFC Guaranty Corp.
                             1455 Pennsylvania Avenue, Suite 230
                             Washington, DC  20004
                             Attn:  Roger Bailey

                                      38 
<PAGE>

              Section 13.3.  APPLICABLE LAW.  This Operating Agreement shall be
governed by the laws of the State of Colorado without regard to principles of
choice of law.

              Section 13.4.  BINDING EFFECT.  This Operating Agreement shall
inure to the benefit of and shall be binding upon the Corporation, the District
and their respective successors and assigns, subject, however, to the
limitations contained herein.

              Section 13.5.  SEVERABILITY OF INVALID PROVISIONS.  If any one
provision of this Operating Agreement shall be held or deemed to be or shall, in
fact, be inoperative or unenforceable as applied in any particular case in any
jurisdiction or in all jurisdictions, or in all cases because it conflicts with
any other provision or provisions hereof or any constitution or statute or rule
of public policy, or for any other reason, such circumstances shall not have the
effect of rendering the provision in question inoperative or unenforceable in
any other case or circumstance, or of rendering any other provision or
provisions therein or herein contained invalid, inoperative, or unenforceable to
any extent whatever and this Operating Agreement shall be construed and enforced
as if any such illegal, invalid, inoperative or unenforceable provisions had not
initially been contained therein or herein.  In the event any one or more
phrases, sentences, clauses or sections of this Operating Agreement shall be
held invalid or unenforceable by any court of competent jurisdiction, such
holding shall not invalidate or render unenforceable any other provision of this
Operating Agreement or any part thereof, it being the intent of the parties
hereto that the provisions of this Operating Agreement are fully severable.

              Section 13.6.  AMOUNTS REMAINING IN FUNDS.  It is agreed by the
parties hereto that any amounts remaining in the Bond Fund upon expiration or
sooner termination of the Term of this Operating Agreement, as provided in this
Operating Agreement, after payment in full of the Bonds (or provision for
payment thereof having been made in accordance with the provisions of the
Indenture) and payments of all amounts unpaid under the Reimbursement Agreement
and the Deed of Trust, shall be applied and distributed in the manner and
priority as set forth in the Indenture, and after payment of all administrative
fees and expenses of the issuer and the Trustee in accordance with the
provisions of the Indenture.

              Section 13.7.  EXECUTION OF COUNTERPARTS.  This Operating
Agreement may be simultaneously executed in any number of counterparts, each of
which when so executed and delivered shall for all purposes be deemed to be an
original, but such counterparts of which this shall be one shall together
constitute but one and the same instrument.

              Section 13.8.  CERTAIN PAYMENTS NET TO CORPORATION.  The District
hereby agrees that the Operating Agreement Payments shall be an absolutely net
return to the Corporation, free and clear of any expenses, charges or setoffs
whatsoever.

              Section 13.9.  INDENTURE RIGHTS.  The Corporation hereby covenants
and agrees that the provisions of the Indenture granting any rights to the
District shall not be amended as modified without the consent of the District.

                                      39 
<PAGE>

              Section 13.10. BURDEN ON PROPERTY.  This Operating Agreement is a
burden upon and runs with the property described in Exhibit A hereto and is
binding upon the Corporation and upon all persons or entities with any right,
title or interest to such property or any part thereof. This Operating Agreement
may be released therefrom in the same manner as the release of property under
the Indenture or the Deed of Trust executed in connection with the issuance of
the Bonds.


                   [Balance of Page Intentionally Left Blank]























                                      40 
<PAGE>

     IN WITNESS WHEREOF, the undersigned have hereunto set their hands this 
29th day of March, 1996.

DAWSON RIDGE METROPOLITAN                  CASTLE ROCK RANCH PUBLIC
DISTRICT NO. 5                             IMPROVEMENTS AUTHORITY


/s/  C. ROGER ADDLESPERGER                 /s/  C. ROGER ADDLESPERGER 
- -------------------------------------      -----------------------------------

Chairman,                                  President
Board of Directors


















                                      41 
<PAGE>

STATE OF COLORADO  )
                   ) ss.
COUNTY OF DENVER   )

              The foregoing instrument was acknowledged before me this 26th 
day of March, 1996 by C. Roger Addlesperger on behalf of Castle Rock Ranch 
Public Improvements Authority, a Colorado nonprofit corporation.

                   Witness my hand and official seal.


                                       /s/  ROBIN W. BEING 
(SEAL)                                 -------------------------------------- 
                                       Notary Public

                   My commission expires:       9-16-98        
                                         --------------------- 


STATE OF COLORADO  )
                   ) ss.
COUNTY OF DENVER   )

              The foregoing instrument was acknowledged before me this 26th 
day of March, 1996 by C. Roger Addlesperger on behalf of Dawson Ridge 
Metropolitan District No. 5, Colorado.

              Witness my hand and official seal.


                                       /s/  ROBIN W. BEING 
(SEAL)                                 -------------------------------------- 
                                       Notary Public

                   My commission expires:       9-16-98        
                                         --------------------- 









                                      42 
<PAGE>


                                   EXHIBIT A

                              (Legal Description)





















                                     A-1 
<PAGE>

                                   EXHIBIT A

GOLF COURSE PARCEL A:

A parcel of land located in Sections 28, 29 and 21, all in Township 8 South 
Range 67 West of the Sixth Principal Meridian, Douglas County, Colorado, being 
more particularly described as follows:

BEGINNING at the North quarter corner of said Section 29 whence the Northerly 
line of the East half of Section 29 bears S 88 DEG. 37'18" E a distance of 
2661.22 feet; thence S 88 DEG. 37'18" E along said Northerly line a distance 
of 2661.22 feet; thence N 00 DEG. 23'27" E along the Westerly line of Section 21
a distance of 782.32 feet; thence S 37 DEG. 02'12" E a distance of 2474.11 
feet; thence the following four courses along Dawson Ridge Filing A;

     1.  S 67 DEG. 47'53" W a distance of 128.79 feet;
     2.  S 39 DEG. 28'53" W a distance of 108.41 feet;
     3.  S 58 DEG. 24'13" E a distance of 228.53 feet;
     4.  N 83 DEG. 33'27" E a distance of 170.37 feet;

thence S 37 DEG. 02'12" E a distance of 1105.69 feet;
thence S 21 DEG. 08'57" E a distance of 2657.54 feet;
thence the following two courses along a parcel of land described by Book 695 
at Page 459 of the Douglas County Clerk and Recorder's Office:

     1.  N 00 DEG. 19'26" W a distance of 1262.69 feet
     2.  N 89 DEG. 22'02" W a distance of 4017.50 feet;

thence N 00 DEG. 14'06" W along the Westerly line of the East half of Section 
29 a distance of 3543.76 feet to the point of beginning;

EXCEPTING from the above parcel the following parcels:

Dawson Ridge Filings A and B, all dedicated street rights of way;

ALSO EXCEPTING the following one acre parcel described as follows:

A parcel of land located in the East half of Section 29, Township 8 South, 
Range 67 West of the Sixth Principal Meridian, Douglas County, Colorado, being 
more particularly described as follows:

Commencing at the North quarter corner of said Section 29;
thence South 00 degrees 04 minutes 06 seconds East along the westerly line of 
said East half of Section 29, a distance of 3267.55 feet to the point of 
beginning;


<PAGE>

thence North 89 degrees 45 minutes 54 seconds East a distance of 208.71 feet;
thence South 00 degrees 14 minutes 06 seconds East a distance of 208.71 feet;
thence South 89 degrees 45 minutes 54 seconds West a distance of 208.71 feet;
thence North 00 degrees 14 minutes 06 seconds West along said westerly line a 
distance of 208.71 feet to the point of Beginning.

County of Douglas,
State of Colorado

GOLF COURSE PARCEL B:

A Parcel of land lying in sections 22, 27, 28, 33 & 34, all in Township 8 
South Range 67 West of the Sixth Principal Meridian, Douglas County, Colorado, 
being more particularly described as follows:

COMMENCING at the Northeast corner of said Section 28 whence the Southeast 
corner of said Section 28 bears S 00 DEG. 22'18" E a distance of 5302.75 feet;
thence N 53 DEG. 05'33" E a distance of 2071.05 feet to the point of beginning;
thence S 84 DEG. 49'36" E a distance of 790.91 feet;
thence S 15 DEG. 43'30" W along the Westerly right of way line of the A.T. & 
S.F. Railroad a distance of 5019.66 feet;
thence along the following three courses along a parcel of land described by 
Book 1095 at Page 629 of the Douglas County Clerk and Recorder:

     1.  N 89 DEG. 22'05" W a distance of 2386.46 feet;
     2.  S 00 DEG. 19'29" E a distance of 308.79 feet;
     3.  S 89 DEG. 22'05" E a distance of 2298.04 feet;

thence S 15 DEG. 43'30" W along the Westerly right of way line of the A.T. & 
S.F. Railroad a distance of 2425.47 feet;
thence N 89 DEG. 48'11" W a distance of 678.73 feet;
thence S 00 DEG. 44'59" W a distance of 600.54 feet;
thence S 89 DEG. 03'33" E a distance of 515.85 feet;
thence S 15 DEG. 43'30" W a distance of 548.74 feet;
thence N 00 DEG. 23'36" E a distance of 226.92 feet;
thence S 15 DEG. 45'37" W a distance of 788.62 feet;
thence N 89 DEG. 09'35" W, along the South line of the North half of Section 
33, a distance of 1062.26 feet;
thence N 00 DEG. 50'25" E a distance of 1475.80 feet;
thence N 56 DEG. 57'07" W a distance of 3202.16 feet;
thence N 21 DEG. 08'57" W a distance of 2657.54 feet;
thence along the following fifteen courses along Dawson Ridge Filing B;

                                     2

<PAGE>

     1.  N 77 DEG. 53'15" E, non-tangent to the following described curve, a 
         distance 42.72 feet;
     2.  along the arc of a curve to the right, having a central angle of 89 
         DEG. 23'40", a radius of 41.00 feet, the chord of which bears S 26 DEG.
         49'54" W a distance of 57.68 feet and an arc length of 63.97 feet;
     3.  N 71 DEG. 31'44" E, tangent to the previously described curve, a 
         distance of 146.27 feet;
     4.  N 70 DEG. 13'51" E a distance of 110.35 feet;
     5.  N 71 DEG. 31'4" E, tangent to the following described curve, a 
         distance of 160.53 feet;
     6.  along the arc of a curve to the right, having a central angle of 51 
         DEG. 49'07", a radius of 908.07 feet, the chord of which bears N 82
         DEG. 33'43" W a distance of 793.56 feet and an arc length of 821.26 
         feet;
     7.  S 51 DEG. 57'48" E, tangent to the previously and following described 
         curves, a distance of 105.49 feet;
     8.  along the arc of a curve to the right, having a central angle of 01 
         DEG. 47'42", a radius of 905.57 feet, the chord of which bears N 49 
         DEG. 05'17" W a distance of 28.37 feet and an arc length of 28.37 feet;
     9.  S 48 DEG. 11'26" E, tangent to the previously and following described 
         curves, a distance of 101.79 feet;
    10.  along the arc of a curve to the right, having a central angle of 87 
         DEG. 30'40", a radius of 40.00 feet, the chord of which bears S 04 DEG.
         26'06" E a distance of 55.33 feet and an arc length of 61.09 feet;
    11.  S 47 DEG. 39'40" E non-tangent to the previously and following 
         described curves, a distance of 120.18 feet;
    12.  along the arc of a curve to the right, having a central angle of 92 
         DEG. 40'47", a radius of 40.00 feet, the chord of which bears N 85 DEG.
         27'55" E a distance of 57.88 feet and an arc length of 64.70 feet;
    13.  N 41 DEG. 48'34" E, non-tangent to the previously and following 
         described curves, a distance of 80.00 feet;
    14.  along the arc of a curve to the right, having a central angle of 92 
         DEG. 41'18", a radius of 40.00 feet, the chord of which bears N 01 DEG.
         50'31" W a distance of 57.88 feet and an arc length of 64.71 feet to a
         point of compound curvature;
    15.  along a curve, to the right having a central angle of 09 DEG. 19'56", 
         a radius of 1740.00 feet, the chord of which bears N 49 DEG. 10'21" E
         a distance of 283.09 feet and an arc length of 283.40 feet;

thence along the following five courses along Dawson Ridge Filing A:

     1.  S 36 DEG. 09'41" E, non-tangent to the previously described curve, a 
         distance of 10.00 feet;
     2.  N 53 DEG. 50'19" E, tangent to the following described curve, a 
distance of 1060.41 feet;

                                     3

<PAGE>

     3.  along the arc of a curve to the left having a central angle of 21 
         DEG. 00'00", a radius of 2170.00 feet, the chord of which bears N 43
         DEG. 20'19" E, a distance of 790.90 feet and an arc length of 795.35
         feet;
     4.  N 32 DEG. 50'19" E, tangent to the previously and following described 
         curves, a distance of 2182.25 feet;
     5.  along the arc of a curve to the left, having a central angle of 12 
         DEG. 18'29", a radius of 1870.00 feet, the chord of which bears N 26
         DEG. 41'04" E a distance of 400.94 feet and an arc length of 401.71
         feet to the point of beginning;

EXCEPTING from the above parcel the following two parcels:

Exception 3:

A parcel of land located in a portion of Section 28, Township 8 South, Range 
67 West of the Sixth Principal Meridian, City of Castle Rock, Douglas County, 
Colorado, being more particularly described as follows:

COMMENCING at the Southeast corner of said Section 28, whence the Northeast 
corner of said Section 28 bears N 00 DEG. 22'18" W a distance of 5302.75 feet;
thence N 62 DEG. 23'09" W a distance of 660.85 feet, to the point of beginning;
thence S 63 DEG. 50'19" W a distance of 144.71 feet;
thence N 26 DEG. 09'41" W a distance of 208.00 feet;
thence N 63 DEG. 50'19" E, non-tangent to the following described curve, a 
distance of 251.43 feet;

thence along the arc of a curve to the right, having a central angle of 29 
DEG. 26'30", a radius of 460.00 feet, the chord of which bears S 00 DEG. 
59'57" W a distance of 233.78 feet and an arc length of 236.37 feet to the 
point of beginning;

Exception 4:

A parcel of land located in a portion of Section 28, Township 8 South, Range 
67 West of the Sixth Principal Meridian, City of Castle Rock, Douglas County, 
Colorado, being more particularly described as follows:

COMMENCING at the Southwest corner of said Section 28, whence the North corner 
of said Section 28 bears N 00 DEG. 11'08" W a distance of 5299.57 feet;
thence N 58 DEG. 37'49" E a distance of 3415.73 feet, to the point of 
beginning;
thence N 04 DEG. 01'05" E a distance of 208.84 feet;
thence S 87 DEG. 59'38" E a distance of 208.71 feet;
thence S 04 DEG. 01'05" W a distance of 208.84 feet;
thence N 87 DEG. 59'38" W a distance of 208.71 feet to the point of beginning

                                     4


<PAGE>



                        RECREATIONAL FACILITIES AGREEMENT

                                     Between

                 CASTLE ROCK RANCH PUBLIC IMPROVEMENTS AUTHORITY

                                       and

                    DAWSON RIDGE METROPOLITAN DISTRICT NO. 5

                            Dated as of March 1, 1996





<PAGE>
                                TABLE OF CONTENTS
                                                                            PAGE
                                                                            ----
ARTICLE 1 - DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . .   3
     Section 1.1.   DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . .   3
     Section 1.2.   CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . .   3
     Section 1.3.   COMPLIANCE CERTIFICATES AND OPINIONS . . . . . . . . . .   4
     Section 1.4.   FORM OF DOCUMENTS DELIVERED TO TRUSTEE . . . . . . . . .   5

ARTICLE 2 - REPRESENTATIONS, WARRANTIES AND COVENANTS. . . . . . . . . . . .   7
     Section 2.1.   REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
                    CORPORATION. . . . . . . . . . . . . . . . . . . . . . .   7
     Section 2.2.   REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
                    DISTRICT . . . . . . . . . . . . . . . . . . . . . . . .  10
     Section 2.3    REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE DISTRICT
                    AND THE RELATED DISTRICTS. . . . . . . . . . . . . . . .  13

ARTICLE 3 - ISSUANCE OF THE SERIES 1996 BONDS. . . . . . . . . . . . . . . .  14
     Section 3.1.   THE SERIES 1996 BONDS. . . . . . . . . . . . . . . . . .  14
     Section 3.2.   ACQUISITION OF PROJECT . . . . . . . . . . . . . . . . .  14
     Section 3.3.   LIABILITY. . . . . . . . . . . . . . . . . . . . . . . .  14
     Section 3.4.   OWNERSHIP OF PROJECT . . . . . . . . . . . . . . . . . .  14
     Section 3.5.   DEVELOPMENT AGREEMENT PAYMENTS . . . . . . . . . . . . .  14
     Section 3.6.   ADDITIONS AND CHANGES. . . . . . . . . . . . . . . . . .  14
     Section 3.7.   AWARD OF CONTRACTS . . . . . . . . . . . . . . . . . . .  15
     Section 3.8.   ADMINISTRATION OF CONTRACTS. . . . . . . . . . . . . . .  15

ARTICLE 4 - USE OF PROCEEDS; TERM. . . . . . . . . . . . . . . . . . . . . .  16
     Section 4.1.   USE OF PROCEEDS OF BONDS . . . . . . . . . . . . . . . .  16
     Section 4.2.   TERM OF AGREEMENT. . . . . . . . . . . . . . . . . . . .  16

ARTICLE 5 - TITLE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  17
     Section 5.1.   TITLE PROVISIONS . . . . . . . . . . . . . . . . . . . .  17

ARTICLE 6 - MAINTENANCE; TAXES; PROJECT IMPROVEMENTS; INSURANCE; AND OTHER
     MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  18
     Section 6.1.   MAINTENANCE, UTILITIES, TAXES AND ASSESSMENTS. . . . . .  18
     Section 6.2.   MODIFICATION OF PROJECT. . . . . . . . . . . . . . . . .  18
     Section 6.3.   LIABILITY AND PROPERTY DAMAGE INSURANCE. . . . . . . . .  19
     Section 6.4.   INSTALLATION OF PERSONAL PROPERTY. . . . . . . . . . . .  19
     Section 6.5.   CONSTRUCTION OF ALTERNATIVE FACILITIES . . . . . . . . .  19
     Section 6.6.   SECURITY INTEREST PROHIBITED . . . . . . . . . . . . . .  19

ARTICLE 7 - DAMAGE, DESTRUCTION AND EMINENT DOMAIN . . . . . . . . . . . . .  21
     Section 7.1.   APPLICATION OF PROCEEDS. . . . . . . . . . . . . . . . .  21

                                       i
<PAGE>
                                TABLE OF CONTENTS
                                                                            PAGE
                                                                            ----
ARTICLE 8 - DISCLAIMER OF WARRANTIES; ACCESS . . . . . . . . . . . . . . . .  22
     Section 8.1.   DISCLAIMER OF WARRANTIES . . . . . . . . . . . . . . . .  22
     Section 8.2.   RIGHTS OF ACCESS . . . . . . . . . . . . . . . . . . . .  22
     Section 8.3.   FURTHER ASSURANCES AND CORRECTIVE INSTRUMENTS. . . . . .  22
     Section 8.4.   CORPORATION AND DISTRICT REPRESENTATIVES . . . . . . . .  22

ARTICLE 9 - ASSIGNMENT, SUBLEASING AND AMENDMENT . . . . . . . . . . . . . .  23
     Section 9.1.   ASSIGNMENT BY THE CORPORATION. . . . . . . . . . . . . .  23
     Section 9.2.   ASSIGNMENT BY THE DISTRICT . . . . . . . . . . . . . . .  23
     Section 9.3.   AMENDMENT OF THIS RECREATIONAL FACILITIES AGREEMENT. . .  23

ARTICLE 10 - FURTHER AGREEMENTS. . . . . . . . . . . . . . . . . . . . . . .  24
     Section 10.1.  MAINTENANCE OF POWERS; SUCCESSORS OF CORPORATION . . . .  24
     Section 10.2.  TAX-EXEMPT STATUS OF BONDS . . . . . . . . . . . . . . .  24
     Section 10.3.  NOTICE OF CERTAIN EVENTS . . . . . . . . . . . . . . . .  26
     Section 10.4.  NO UNTRUE STATEMENTS . . . . . . . . . . . . . . . . . .  26
     Section 10.5.  CERTAIN MATTERS REGARDING ANY AGREEMENTS, COVENANTS AND
                    WARRANTIES RELATING TO TAX EXEMPTION . . . . . . . . . .  26

ARTICLE 11 - EVENTS OF DEFAULT AND REMEDIES. . . . . . . . . . . . . . . . .  29
     Section 11.1.  EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . .  29
     Section 11.2.  REMEDIES ON DEFAULT. . . . . . . . . . . . . . . . . . .  30
     Section 11.3.  ATTORNEYS' FEES AND EXPENSES . . . . . . . . . . . . . .  31
     Section 11.4.  NO REMEDY EXCLUSIVE. . . . . . . . . . . . . . . . . . .  32
     Section 11.5.  NO ADDITIONAL WAIVER IMPLIED BY ONE WAIVER . . . . . . .  32
     Section 11.6.  CREDIT ENHANCEMENT PROVIDER AND TRUSTEE TO EXERCISE
                    RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . .  32

ARTICLE 12 - OPTION TO TERMINATE . . . . . . . . . . . . . . . . . . . . . .  33
     Section 12.1.  OPTIONS TO TERMINATE; OPTIONAL REDEMPTION. . . . . . . .  33
     Section 12.2.  EXTRAORDINARY TERMINATION OPTION . . . . . . . . . . . .  34
     Section 12.3.  RIGHT TO ACQUIRE . . . . . . . . . . . . . . . . . . . .  34
     Section 12.4.  UNENCUMBERED TITLE . . . . . . . . . . . . . . . . . . .  35
     Section 12.5.  DEFAULT RIGHTS . . . . . . . . . . . . . . . . . . . . .  35
     Section 12.6.  TITLE. . . . . . . . . . . . . . . . . . . . . . . . . .  35
     Section 12.7.  OPERATING AGREEMENT RIGHTS . . . . . . . . . . . . . . .  35

ARTICLE 13 - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . .  36
     Section 13.1.  AMENDMENT OF RECREATIONAL FACILITIES AGREEMENT OR
                    INDENTURE. . . . . . . . . . . . . . . . . . . . . . . .  36
     Section 13.2.  NOTICES. . . . . . . . . . . . . . . . . . . . . . . . .  36
     Section 13.3.  APPLICABLE LAW . . . . . . . . . . . . . . . . . . . . .  37
     Section 13.4.  BINDING EFFECT . . . . . . . . . . . . . . . . . . . . .  37

                                      ii
<PAGE>
                                TABLE OF CONTENTS
                                                                            PAGE
                                                                            ----
     Section 13.5.  SEVERABILITY OF INVALID PROVISIONS . . . . . . . . . . .  37
     Section 13.6.  AMOUNTS REMAINING IN FUNDS . . . . . . . . . . . . . . .  37
     Section 13.7.  EXECUTION OF COUNTERPARTS. . . . . . . . . . . . . . . .  37
     Section 13.8.  INDENTURE RIGHTS . . . . . . . . . . . . . . . . . . . .  38
     Section 13.9.  BURDEN ON PROPERTY . . . . . . . . . . . . . . . . . . .  38

                                       iii
<PAGE>

                CASTLE ROCK RANCH PUBLIC IMPROVEMENTS AUTHORITY 
                        RECREATIONAL FACILITIES AGREEMENT

          THIS RECREATIONAL FACILITIES AGREEMENT (the "Recreational 
Facilities Agreement") is made as of the 1st day of March 1996, by and 
between CASTLE ROCK RANCH PUBLIC IMPROVEMENTS AUTHORITY, a Colorado nonprofit 
corporation (the "Corporation") and DAWSON RIDGE METROPOLITAN DISTRICT NO. 5 
(the "District"). The Related Districts are executing this Recreational 
Facilities Agreement to evidence their assent to the provisions herein 
referring to them and their consent to the relationship between the District 
and the Corporation reflected herein.

                                    RECITALS

     A.   At an election of the District held November 7, 1995, the electors 
of the District approved (i) the execution by the District of recreational 
facilities services agreements (of which this Recreational Facilities 
Agreement is one) to provide funds to acquire, operate and maintain parks and 
recreational facilities, (ii) the levy of taxes to satisfy the obligations of 
the District in regard thereto, and (iii) the incurrence by the District of 
indebtedness for the purposes of providing water, sanitation, street, traffic 
safety, transportation, parks and recreational facilities within or for the 
benefit of the District.

     B.   At elections held on November 7, 1995, the District and the Related 
Districts (as defined below) authorized the execution of intergovernmental 
agreements (of which the provisions in this Recreational Facilities Agreement 
regarding the Related Districts is one) with respect to the recreational 
facilities service agreements and debt obligations of the District, including 
the levying of taxes to satisfy their obligations in regard to such 
facilities.

     C.   The Corporation has been organized as an instrumentality of the 
District to acquire property and provide public facilities, including 
recreational facilities.

     D.   The Corporation shall issue its Public Facilities Revenue Bonds, 
Series 1996 (the "Series 1996 Bonds") for the purpose of acquiring real 
property described in Exhibit A hereto and water rights (the "Property") to 
be improved and operated by the Corporation as recreational facilities (the 
"Recreational Facilities").

     E.   The Series 1996 Bonds will be issued pursuant to an Indenture of 
Trust, dated as of the date hereof (the "Indenture"), between the Corporation 
and SouthTrust Bank of Alabama, National Association (the "Trustee").

     F.   In regard to the imposition of a tax levy for the Recreational 
Facilities, the Corporation and the District have entered into an Operating 
Agreement (the "Operating Agreement") dated as of the date hereof but 
effective only upon the date either (i) the Town of Castle Rock, Colorado 
shall have approved an amendment to the service plan specifically authorizing 
the mill levy imposition provided for therein or (ii) the District shall have 
received an opinion acceptable to the District of counsel acceptable to the 
District that such mill levy may 

                                       1
<PAGE>

be imposed without regard to any service plan amendment.  The District and 
the Related Districts have entered into an Intergovernmental Agreement (the 
"Intergovernmental Agreement") in regard to the Operating Agreement dated as 
of the date hereof but effective only on the date the Operating Agreement is 
effective.

     G.   The District and the Related Districts have passed resolutions 
authorizing the entering into of agreements between the Corporation and the 
property owners in the District and the Related Districts providing for 
payments in lieu of taxes pending the effective date of the Operating 
Agreement and Intergovernmental Agreement or to the extent the mill levy 
authorized therein is not imposed to the maximum extent provided therein and 
pursuant thereto the Corporation has entered into the Development Agreement 
(as defined below).

     H.   This Recreational Facilities Agreement shall be replaced (except to 
the extent provided herein) by the Operating Agreement and the 
Intergovernmental Agreement when they become effective.  Pending such date, 
the Property and all improvements thereto owned by the Corporation (the 
"Project") will be operated in accordance with the terms of this Recreational 
Facilities Agreement.

     I.   The entire Project shall be used for public golf, tennis or other 
recreational activities and shall be considered "Recreational Facilities" for 
purposes of this Agreement.

          NOW, THEREFORE, for and in consideration of the premises and the 
material covenants herein contained, the parties hereby covenant, agree and 
bind themselves as follows:



                                       2

<PAGE>

                                    ARTICLE 1

                                   DEFINITIONS

     Section 1.1.   DEFINITIONS.  Unless otherwise expressly provided or 
unless the context clearly requires otherwise, capitalized words and terms 
used in this Recreational Facilities Agreement shall have the meanings 
ascribed to them in the Recitals hereof, or in the Indenture, or in the Deed 
of Trust or the Reimbursement Agreement (as each are defined in the 
Indenture).  In addition, the following terms defined in this Section 1.1 
shall, for all purposes of this Recreational Facilities Agreement, have the 
respective meanings herein specified.

     "Corporation Representative" means a person designated to act on behalf 
of the Corporation, as evidenced by a written certificate furnished to the 
Trustee and the District containing the specimen signature of such person and 
signed for the Corporation by any of its officers.

     "Development Agreement" means the Development Agreement, dated as of the 
date hereof, between the Corporation and Douglas County Development 
Corporation, and any and all similar agreements with the Corporation executed 
by owners of property within the District or the Related Districts.

     "District Representative" means a person designated to act on behalf of 
the District as evidenced by a written certificate furnished to the 
Corporation and the Trustee containing the specimen signature of such person 
and the signature of a member of the Board of Directors of the District.

     "Event of Default" or "Default" shall mean with respect to an Event of 
Default or Default under this Recreational Facilities Agreement any 
occurrence or event specified in and defined by Section 11.1 hereof.

     "Related Districts" shall mean Dawson Ridge Metropolitan Districts Nos. 
1-4, each special districts and political subdivision of the State of 
Colorado.

     "Term of this Agreement" or "Recreational Facilities Agreement Term" 
shall mean the term provided in Section 4.2 hereof.

     Section 1.2.   CONSTRUCTION.  This Recreational Facilities Agreement, 
except where the context by clear implication otherwise requires, shall be 
construed as follows:

          (a)    Words and defined terms in the singular number include the
     plural, and words in the plural include the singular.

          (b)    Words in the masculine gender include the feminine and the
     neuter, and when the sense so indicates, words of the neuter gender refer
     to any gender.

                                       3

<PAGE>

          (c)    Articles, sections, subsections, paragraphs and subparagraphs
     mentioned by number, letter, or otherwise, correspond to the respective
     articles, sections, subsections, paragraphs and subparagraphs of this
     Recreational Facilities Agreement so numbered unless otherwise so
     designated.

          (d)    The titles or leadlines applied to articles, sections and
     subsections in this Recreational Facilities Agreement are inserted only as
     a matter of convenience and ease in reference and in no way define, limit
     or describe the scope or intent of any provisions of this Recreational
     Facilities Agreement.

          (e)    The words "herein", "hereof" and "hereunder" and words of
     similar import, without reference to any particular article, section,
     subdivision, paragraph or subparagraph, refer to this Recreational
     Facilities Agreement as a whole rather than to any particular article,
     section, subdivision, paragraph or subparagraph hereof; where such words
     are used with reference to a particular article, section, subdivision,
     paragraph or subparagraph of this Recreational Facilities Agreement, such
     reference, by definition, shall be construed to refer to the identical
     article, section, subdivision, paragraph or subparagraph contained in this
     Recreational Facilities Agreement and in any agreement supplemental thereto
     or amendatory thereof, unless the context clearly requires otherwise.

          (f)    All accounting terms not otherwise defined herein have the
     meanings assigned to them in accordance with generally accepted accounting
     principles.

     Section 1.3.   COMPLIANCE CERTIFICATES AND OPINIONS. Upon any 
application or request by the Corporation to the District to take any action 
under any provision of this Recreational Facilities Agreement, the District 
shall furnish the Corporation and the Trustee with a certificate of a 
District Representative stating that all conditions precedent, if any, 
provided for in this Recreational Facilities Agreement relating to the 
proposed action have been complied with and, upon the reasonable request of 
the Corporation and the Trustee, an Opinion of Counsel stating that in the 
opinion of such Counsel all such conditions precedent, if any, have been 
complied with, except that in the case of any such application or request 
under any provision of this Recreational Facilities Agreement pursuant to 
which the taking of such action is specifically required by such provision, 
no additional certificate or opinion need be furnished.

     Except as provided in Section 1.4 hereof, every certificate or opinion 
with respect to compliance with a condition or covenant provided for in this 
Recreational Facilities Agreement or the Indenture shall include:

          (1)    a statement or opinion specifically identifying the provisions
     or sections of this Recreational Facilities Agreement or the Indenture
     requiring such certificate;

          (2)    a statement that each individual signing such certificate or
     opinion has read such covenant or condition and the definitions herein
     relating thereto;

                                       4

<PAGE>

          (3)    a brief statement as to the nature and scope of the
     examination or investigation upon which the statements or opinions
     contained in such certificate or opinion are based;

          (4)    a statement that in the opinion of each such individual, he
     has made such examination or investigation as is necessary to enable him to
     express an informed opinion as to whether or not such covenant or condition
     has been complied with; and

          (5)    a statement as to whether, in the opinion of each such
     individual, such condition or covenant has been complied with.

     Any Opinion of Counsel may be qualified by reference to the 
constitutional powers of the United States of America, the police and 
sovereign powers of the State, judicial discretion and bankruptcy, 
insolvency, reorganization, moratorium, and other similar laws affecting 
creditors rights generally and to similar matters, and by other reasonable 
qualifications.

     Section 1.4.   FORM OF DOCUMENTS DELIVERED TO TRUSTEE.  In any case 
where several matters are required to be certified by, or covered by an 
opinion of, any specified Person, it is not necessary that all such matters 
be certified by, or covered by the opinion of, only one such Person, or that 
they be so certified or covered by only one document, but one such Person may 
certify or give an opinion with respect to some matters and one or more other 
such Persons as to other matters, and any such Person may certify or give an 
opinion as to such matters in one or several documents.

     Any certificate or opinion of a Corporation Representative or a District 
Representative may be based, insofar as it relates to legal matters, upon a 
certificate or opinion of, or representations by, counsel, unless such 
representative, in the exercise of reasonable care, should know that the 
certificate or opinion or representations with respect to the matters upon 
which his certificate or opinion is based are erroneous.  Any Opinion of 
Counsel may be based, insofar as it relates to factual matters, upon a 
certificate or opinion of, or representations by, a Corporation 
Representative or a District Representative stating that the information with 
respect to such factual matters is in the possession of the Corporation or 
the District unless such Counsel, in the exercise of reasonable care, should 
know that the certificate or opinion or representation with respect to such 
matters are erroneous.

     Where any Person is required to make, give or execute two or more 
requests, consents, certificates, statements, opinions or other instruments 
under this Recreational Facilities Agreement, they may, but need not, be 
consolidated and form one instrument.


                                       5

<PAGE>

     Wherever in this Recreational Facilities Agreement, in connection with 
any certificate or report to the Trustee, it is provided that the Corporation 
or the District shall deliver any document as a condition or as evidence of 
either the Corporation's or the District's compliance with any term hereof, 
it is intended that the truth and accuracy, at the time of the effective date 
of such certificate or report (as the case may be), of the facts and opinions 
stated in such document shall in each case be conditions precedent to the 
right of the District or the Corporation to certify as to the sufficiency of 
such certificate or report as evidence of compliance.


                                       6

<PAGE>

                                    ARTICLE 2

                    REPRESENTATIONS, WARRANTIES AND COVENANTS

     Section 2.1.   REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
CORPORATION.  The Corporation makes the following representations, warranties
and covenants:

          (a)    The Corporation is a corporate instrumentality of the District
     and a nonprofit corporation organized under the laws of the State of
     Colorado.

          (b)    The Corporation has full legal right, power and authority and
     has taken all official actions necessary (i) to enter into this
     Recreational Facilities Agreement, (ii) to issue, execute and deliver the
     Series 1996 Bonds, (iii) to own the Property and the Project, (iv) to
     perform its obligations hereunder and under the Indenture and the Series
     1996 Bonds, and (v) to carry out and to consummate all transactions
     contemplated by this Recreational Facilities Agreement.

          (c)    The representative of the Corporation executing this
     Recreational Facilities Agreement is fully authorized to execute the same.

          (d)    This Recreational Facilities Agreement, the Deed of Trust and
     the Reimbursement Agreement have been duly executed and delivered by the
     Corporation and, upon due authorization, execution and delivery by the
     other parties hereto and thereto, will constitute valid and binding
     obligations of the Corporation, enforceable against the Corporation in
     accordance with their respective terms, except as such enforcement may be
     limited by bankruptcy, insolvency, reorganization, moratorium and other
     similar laws affecting the rights of creditors generally and by judicial
     discretion in the exercise of remedies.

          (e)    The execution and delivery of this Recreational Facilities
     Agreement, the Deed of Trust and the Reimbursement Agreement, the issuance,
     execution and delivery of the Series 1996 Bonds, the performance by the
     Corporation of its obligations hereunder and thereunder, the consummation
     of the transactions contemplated hereby and thereby and the fulfillment or
     compliance with the terms hereof and thereof, will not conflict with or
     constitute a violation or breach of or default (with due notice or the
     passage of time) under the constitution of the State of Colorado or under
     any applicable law, bylaw, administrative rule or regulation or any
     ordinance or any order, judgment or decree or any indenture, mortgage, deed
     of trust, lease, contract or other agreement or instrument to which the
     Corporation is a party or by which it or its properties are otherwise
     subject or bound, or result in the creation or imposition of any prohibited
     lien, charge or encumbrance of any nature whatsoever upon any of the
     property or assets of the Corporation or the District, which conflict,
     violation, breach, default, lien, charge or encumbrance would have
     consequences that would materially and adversely affect the consummation of
     the transactions contemplated by this Recreational Facilities Agreement,



                                      7

<PAGE>

     the Deed of Trust or the Reimbursement Agreement or the financial
     condition, assets, properties or operations of the Corporation or its
     properties.

          (f)    No consent or approval of any trustee or holder of any
     indebtedness of the Corporation, and no consent, permission, authorization,
     order or license of, or filing or registration with, any governmental
     authority is necessary in connection with the execution and delivery of
     this Recreational Facilities Agreement or the consummation of any
     transaction herein or therein contemplated, except as have been obtained or
     made and as are in full force and effect.

          (g)    There is no action, suit, proceeding, inquiry or investigation
     before or by any court or federal, state, municipal or other governmental
     authority pending or, to the knowledge of the Corporation after reasonable
     investigation, threatened against or affecting the Corporation or the
     assets, properties or operations of the Corporation which, if determined
     adversely to the Corporation or its interests, would have a material and
     adverse effect upon the consummation of the transactions contemplated by or
     the validity of this Recreational Facilities Agreement or upon the
     financial condition, assets, properties or operations of the Corporation,
     and the Corporation is not in default with respect to any order or decree
     of any court or any order, regulation or demand of any federal, state,
     municipal or other governmental authority, which default might have
     consequences that would materially and adversely affect the consummation of
     the transactions contemplated by this Recreational Facilities Agreement, or
     the financial condition, assets, properties or operations of the
     Corporation.

          (h)    The Corporation covenants that it will comply with the
     requirements of all applicable laws, rules, regulations and orders of any
     sovereign or governmental authority having jurisdiction over the
     Corporation or the Project, non-compliance with which would materially
     adversely affect the ability of the Corporation to perform its obligations
     under this Recreational Facilities Agreement, unless the same is being
     contested in good faith and by appropriate proceedings and such contest
     shall operate to stay the material adverse effect of any such
     noncompliance.

          (i)    The Corporation will furnish to the Trustee, the Credit
     Enhancement Provider and the District as soon as possible and in any event
     within two Business Days after the discovery by any officer of the
     Corporation of any Event of Default (as such term is defined in the
     Indenture), a certificate of a Corporation Representative, setting forth
     the details of such Event of Default and the action, if any, which the
     Corporation proposes be taken with respect thereto.

          (j)    The Corporation will take all action and do all things that it
     is authorized by law to take and do in order to perform and observe all
     covenants and agreements on its part to be performed and observed under
     this Recreational Facilities Agreement.



                                      8

<PAGE>

          (k)    The Corporation has determined that issuing the Series 1996
     Bonds to purchase the Property and implement the financing of the Project
     will serve the public interest.

          (l)    Upon termination of this Recreational Facilities Agreement,
     the District shall be entitled to acquire title to the Property and all
     improvements thereon as herein provided; provided that the Deed of Trust
     securing the payment of principal of and interest on the Bonds shall
     continue to be a lien on the Property for so long as the Bonds remain
     outstanding within the meaning of the Indenture or obligations of the
     Corporation otherwise secured thereby remain unpaid.

          (m)    The Corporation covenants and agrees to provide to the
     District, not later than September 1 of each year during the Term hereof, a
     budget for the Project for the ensuing calendar year.

          (n)    The Corporation will, upon reasonable notice, and subject to
     applicable laws and regulations, permit any Person designated by the
     District, the Credit Enhancement Provider, or the Trustee in writing, at
     its own expense, to visit any of the properties of the Corporation during
     normal business hours to examine the books and financial records of the
     Corporation and make copies thereof or extracts therefrom, and to discuss
     the affairs, finances and accounts of the Corporation with the officers and
     employees of the Corporation, all at such reasonable times and as often as
     the District may reasonably request.  The District, the Credit Enhancement
     Provider and the Trustee will each be obligated to keep confidential any
     information regarding the Corporation received pursuant to this
     subparagraph (n) unless the District, the Credit Enhancement Provider, or
     the Trustee is obligated by law to provide such information to a third
     party.

          (o)    The Corporation hereby covenants and agrees that all
     activities undertaken by the Corporation will be executed in a cost-
     effective and efficient manner in order to assure that operation of the
     Corporation complies in all respects with the interest and purpose of the
     Corporation specified in the articles of incorporation and bylaws thereof.

          (p)    The Corporation will execute, acknowledge where appropriate,
     and deliver from time to time promptly at the request of the District or
     the Trustee all such instruments and documents as in the reasonable opinion
     of the District or the Trustee are reasonably required to carry out the
     intent and purposes of this Recreational Facilities Agreement; provided,
     however, that the Corporation shall not be required to execute, acknowledge
     and deliver any such instruments and documents in the event that any such
     instruments or documents will have a material adverse impact on the rights
     of the Corporation under this Recreational Facilities Agreement.  The
     Corporation hereby covenants to execute and deliver such additional
     instruments and to perform such additional acts as may be reasonably
     required or, in the reasonable opinion of the District, the Trustee or the
     Credit Enhancement Provider to carry out the intent of this 



                                      9

<PAGE>

     Recreational Facilities Agreement or to perfect or give further assurances
     of any of the rights granted or provided for in this Recreational 
     Facilities Agreement.

          (q)    Any certificate signed by a Corporation Representative and
     delivered pursuant to this Recreational Facilities Agreement or the
     Indenture shall be deemed a representation and warranty by the Corporation
     as to the statements made therein.

     Section 2.2.   REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE DISTRICT. 
The District, as of the date hereof, represents, warrants and covenants and
agrees as follows:

          (a)    The District is duly established and organized as a quasi-
     municipal corporation and special district under and pursuant to the laws
     of the State of Colorado, with full legal right, power and authority under
     all applicable laws, including the laws of the State, (i) to enter into
     this Recreational Facilities Agreement, (ii) to be bound by the terms
     hereof and thereof, (iii) to perform its obligations hereunder and
     thereunder, (iv) to consummate the transactions contemplated by this
     Recreational Facilities Agreement, and (v) to approve the organization of
     the Corporation and the issuance of the Bonds thereby.

          (b)    This Recreational Facilities Agreement has been duly
     authorized, executed and delivered by the District and, upon the due
     authorization, execution and delivery by all parties hereto, will
     constitute a valid and binding obligation of the District, enforceable in
     accordance with its terms, except as such enforcement may be limited by
     bankruptcy, insolvency, reorganization, moratorium or other similar laws
     affecting the rights of creditors generally and by judicial discretion in
     the exercise of equitable remedies.

          (c)    The representative of the District executing this Recreational
     Facilities Agreement is fully authorized to execute the same.

          (d)    The execution and delivery of this Recreational Facilities
     Agreement, the consummation of the transactions herein contemplated and the
     fulfillment of or compliance with the terms and conditions hereof and
     thereof, will not conflict with or constitute a violation or breach of or
     default (with due notice or the passage of time or both) under the
     aforesaid constitution or under any applicable law or administrative rule
     or regulation, or any applicable court or administrative decree, order or
     judgment, or any indenture, mortgage, deed of trust, contract or other
     agreement or instrument to which the District is a party or by which it or
     its properties are otherwise subject or bound, or result in the creation or
     imposition of any prohibited lien, charge or encumbrance of any nature
     whatsoever upon any of the property or assets of the District, which
     conflict, violation, breach, default, lien charge or encumbrance would have
     consequences that would materially and adversely affect the consummation of
     the transactions contemplated by this Recreational Facilities Agreement or
     the financial condition, assets, properties or operations of the District.



                                     10

<PAGE>

          (e)    All necessary consents, permissions, authorization, orders or
     licenses of, or filing or registration with, any governmental authority
     necessary in connection with the execution and delivery of this
     Recreational Facilities Agreement or the consummation of any transaction
     contemplated herein or therein have been obtained or made and are in full
     force and effect as of the date of execution and delivery of this
     Recreational Facilities Agreement.

          (f)    There is no action, suit, proceeding, inquiry or investigation
     before or by any court or federal, state, municipal or other governmental
     authority pending or, to the knowledge of the District after reasonable
     investigation, threatened against or affecting the District or the assets,
     properties or operations of the District which, if determined adversely to
     the District or its interests, would have a material and adverse effect
     upon the consummation of the transactions contemplated by or the validity
     of this Recreational Facilities Agreement or upon the financial condition,
     assets, properties or operations of the District, and the District is not
     in default with respect to any order or decree of any court or any order,
     regulation or demand of any federal, state, municipal or other governmental
     authority, which default might have consequences that would materially and
     adversely affect the consummation of the transactions contemplated by this
     Recreational Facilities Agreement or the financial conditions, assets,
     properties or operations of the District.

          (g)    The District will deliver to the Trustee:

                 (i)   as soon as practicable and in any event within the
          time required by the Statutes of the State of Colorado, complete
          financial statements, all in reasonable detail and satisfactory
          in scope as to the contents thereof;

                 (ii)  promptly upon receipt thereof, a copy of each
          other report submitted to the District by its accountants in
          connection with any annual, interim or special audit or review by
          them of the books of the District; and

                 (iii) with reasonable promptness, such other financial data 
          as the Trustee or the Underwriter reasonably requests.



                                     11

<PAGE>

     Together with each delivery of financial statements required by clause (i)
     above, the District will deliver to the Trustee a certificate of a District
     Representative stating that there exists no Event of Default or Default
     hereunder or if any such Event of Default or Default exists, stating the
     nature thereof, the period of existence thereof and what action the
     District proposes to take with respect thereto.  The Underwriter is hereby
     authorized to deliver a copy of any financial statement delivered to it
     pursuant to this Section 2.2 to any regulatory body having jurisdiction
     over it.  Notwithstanding the foregoing, in lieu of compliance with the
     provisions of paragraph 2.2(g), the District may comply with the terms and
     conditions of any continuing disclosure agreement required by the
     Underwriter in connection with the Series 1996 Bonds.

          (h)    The District will, upon reasonable notice, and subject to
     applicable laws and regulations, permit any Person designated by the
     Corporation in writing, at its own expense, to visit any of the properties
     of the District during normal business hours to examine the books and
     financial records of the District and make copies thereof or extracts
     therefrom, and to discuss the affairs, finances and accounts of the
     District with the officials and employees of the District, all at such
     reasonable times and as often as the Corporation, the Credit Enhancement
     Provider or the Trustee  may reasonably request.  The Corporation, the
     Credit Enhancement Provider and the Trustee will each be obligated to keep
     confidential any information regarding the District received pursuant to
     this subparagraph (h) unless the Corporation, the Credit Enhancement
     Provider or the Trustee is obligated by law to provide such information to
     a third party.

          (i)    The District will comply with the requirements of the
     Constitution and all laws of the State of Colorado and of any governmental
     authority having jurisdiction over the District, non-compliance with which
     would materially adversely affect its ability to perform its obligations
     under this Recreational Facilities Agreement, unless such requirements are
     contested in good faith and by appropriate proceedings and such contest
     shall operate to stay the material adverse effect of any such
     noncompliance.

          (j)    The District covenants to furnish to the Corporation, the
     Credit Enhancement Provider and the Trustee as soon as possible and in any
     event within two Business Days after the discovery by any employee of the
     District of any Event of Default (as such term is defined herein) a
     certificate of a District Representative, setting forth the details of such
     Event of Default (as such term is defined herein) and the action which the
     District proposes to take with respect thereto; provided, however, that for
     purposes of this subparagraph (j), a default described in paragraph 11.1(f)
     hereof shall become an Event of Default only upon failure of the District
     to cure such Default within the period of grace permitted therein.

          (k)    The District will take all action and do all things that it is
     authorized by law to take and do in order to perform and observe all
     covenants and agreements on its part to be performed and observed
     hereunder.



                                     12

<PAGE>

          (l)    The District will execute, acknowledge where appropriate, and
     deliver from time to time promptly at the request of the Corporation, the
     Credit Enhancement Provider or the Trustee all such instruments and
     documents as in the reasonable opinion of the Corporation, the Credit
     Enhancement Provider or the Trustee are reasonably required to carry out
     the intent and purposes of this Recreational Facilities Agreement;
     provided, however, that the District shall not be required to execute,
     acknowledge and deliver any such instruments and documents in the event
     that any such instruments or documents will have a material adverse impact
     on the rights of the District under the Recreational Facilities Agreement. 
     The District hereby covenants to execute and deliver such additional
     instruments and to perform such additional acts as may be reasonably
     required or, in the opinion of the Corporation, the Credit Enhancement
     Provider or the Trustee, to carry out the intent of this Recreational
     Facilities Agreement or to perfect or give further assurances of any of the
     rights granted or provided for in this Recreational Facilities Agreement.

          (m)    Any certificate signed by a District Representative and
     delivered pursuant to this Recreational Facilities Agreement, the
     Intergovernmental Agreement or the Indenture shall be deemed a
     representation and warranty by the District as to the statements made
     therein.

     Section 2.3 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE DISTRICT AND
THE RELATED DISTRICTS.  The District and the Related Districts, as of the date
hereof, represent, warrant and covenant and agree as follows:  

     The District and the Related Districts will take all reasonable action
necessary to (i) effect an amendment to each such District's service plan
authorizing the imposition of up to 35 mills on all of the taxable real and
personal property within such District, or (ii) obtain an acceptable opinion of
counsel acceptable to each such District that such a mill levy may be imposed
without regard to any service plan amendment.



                                     13

<PAGE>

                                    ARTICLE 3

                        ISSUANCE OF THE SERIES 1996 BONDS

     Section 3.1.   THE SERIES 1996 BONDS.  The Corporation has authorized and
the District has approved the issuance of the Series 1996 Bonds pursuant to the
Indenture.  The Corporation has caused the proceeds of sale of the Series 1996
Bonds to be paid to the Trustee on the Closing Date for deposit pursuant to the
terms and conditions of the Indenture.

     Section 3.2.   ACQUISITION OF PROJECT.  The Corporation will be responsible
for the acquisition, construction and completion of the Project.

     Section 3.3.   LIABILITY.  All obligations of the Corporation incurred
hereunder and under the Indenture shall be obligations of the Corporation,
payable from the Trust Estate including the Revenues, as provided in the
Indenture.  Neither this Recreational Facilities Agreement nor the Series 1996
Bonds, and the interest thereon, shall constitute a general obligation debt,
multiple fiscal year financial obligation, liability, general or moral
obligation or a pledge of the faith and the credit of the District, the Town of
Castle Rock, Colorado, the State of Colorado (the "State") or any other
political subdivision, within the meaning of any constitutional or statutory
limitation or provision.  Neither the State, the District nor any other
political subdivision shall be liable thereon.  Neither the faith and credit nor
the taxing power of the State, the Town of Castle Rock, Colorado, the District,
any Related District or any other political subdivision, instrumentality or
agency of the foregoing is pledged to the payment of the principal of the
Series 1996 Bonds or the interest thereon or other costs incident thereto.

     Section 3.4.   OWNERSHIP OF PROJECT.  As between the Corporation and the
District, the Corporation will be the owner of the Property and the Project and
the District shall have no fee title thereto until such time as a deed to all or
any portion of the Property and the Project is delivered to the District as
herein provided.  So long as the District shall not be in default hereunder or
during any period of grace permitted to the District to cure a default under
Article 11 hereof, and until such time as the Corporation has transferred any
Project facilities to the District as herein provided, the Corporation will be
responsible for the operation of the Project in accordance with the terms hereof
at all times and will be liable at all times during the Term hereof for all
risk, loss and damage incurred with respect to the Project.

     Section 3.5.   DEVELOPMENT AGREEMENT PAYMENTS.  The District and the
Related Districts hereby acknowledge that the payments to be made under the
Development Agreement shall constitute payments in lieu of taxes imposed because
of the limitations described in the Operating Agreement and the
Intergovernmental Agreement and consent to the release of the Development
Agreement on the effective date of the Operating Agreement and the
Intergovernmental Agreement to the extent of imposition of the mill levy
provided for therein.

     Section 3.6.   ADDITIONS AND CHANGES. The Corporation (or such
instrumentality, authority or department as shall be designated by the
Corporation) shall have full responsibility for the acquisition of the Property
and completion of the Project, by such means and in such 



                                     14

<PAGE>

manner as shall be determined in the discretion of the Corporation, with the 
consent of the District.  

     Section 3.7.   AWARD OF CONTRACTS.  The Corporation (or such
instrumentality, authority or department as shall be designated by the
Corporation) has executed or shall execute, or has awarded or shall award,
contracts and subcontracts and has issued or shall issue purchase orders
covering the acquisition and completion of the Project.  The contracts, the
purchase orders and the work orders for the work to be done are herein referred
to as the "Project Contracts".

     Section 3.8.   ADMINISTRATION OF CONTRACTS.  The Corporation (or such
instrumentality, authority or department as shall be designated by the
Corporation) has had and will continue to have full responsibility for
preparing, administering, amending and enforcing the Project Contracts and
litigating or settling claims thereunder, and will be entitled to all
warranties, guaranties and indemnities provided under the Project Contracts and
by the applicable laws, except with respect to Project Contracts executed or to
be executed in connection with Project facilities which have been transferred to
the District.








                                     15

<PAGE>

                                    ARTICLE 4

                              USE OF PROCEEDS; TERM

     Section 4.1.   USE OF PROCEEDS OF BONDS.  The District hereby acknowledges
that the Corporation will issue the Series 1996 Bonds and incur the indebtedness
evidenced thereby (the aggregate principal amount of which includes the Costs of
Issuance with respect thereto), in order to provide permanent financing for the
Property in accordance with the Indenture.

     Section 4.2.   TERM OF AGREEMENT.  The Term of this Recreational Facilities
Agreement shall commence on the date of execution hereof and shall terminate on
the earlier to occur of (i) payment of all obligations secured by the Deed of
Trust and (ii) the effective date of the Operating Agreement.  The District and
the Corporation (or its assigns, including the Trustee) shall execute such
instruments as are necessary to evidence such termination.













                                     16

<PAGE>

                                    ARTICLE 5

                                      TITLE

     Section 5.1.   TITLE PROVISIONS.  During the Term of this Recreational
Facilities Agreement, the Corporation shall hold title to and ownership of each
of the Project facilities and any and all additions thereto which comprise
repairs, replacements, modifications, improvements and substitutions until such
Project facility is transferred to the District.  Notwithstanding anything to
the contrary herein, it is understood that title to personal property
permanently attached to the Project by the District or any other entity,
instrumentality, authority or department of the District shall become a part of
the Project.










                                     17

<PAGE>

                                    ARTICLE 6

                    MAINTENANCE; TAXES; PROJECT IMPROVEMENTS;
                          INSURANCE; AND OTHER MATTERS

     Section 6.1.   MAINTENANCE, UTILITIES, TAXES AND ASSESSMENTS.  The
Corporation and the District each agree that during the term of this
Recreational Facilities Agreement it will itself at its own expense or will
cause others to (a) keep the Project facilities which it owns in as reasonably
safe condition as its operations will reasonably permit, and (b) keep the
Project facilities which it owns in good repair and in good operating condition,
making from time to time all necessary repairs thereto and renewals and
replacements thereof, which may be necessary for this purpose, so that the
Project facilities which it owns will remain suitable and efficient for use of
the character described in and contemplated by the Indenture.

     Throughout the Term of this Recreational Facilities Agreement all
improvement, repair and maintenance of the Project facilities shall be the
responsibility of the party owning such facilities, and such party shall pay for
or otherwise arrange for the payment of all utility services supplied to such
facilities, which may include, without limitation, cleaning services,
maintenance, security, power and electricity, gas, telecommunications and radio
equipment and all utilities and services supplied to or in connection with the
Project, and shall pay for or otherwise arrange for the payment of the cost of
the repair and replacement of such facilities or any part thereof resulting from
ordinary wear and tear.

     Each party shall also pay or cause to be paid, without abatement, deduction
or offset, all property taxes and general and special assessments (collectively,
"property taxes") of any type or nature levied, assessed or charged by an
authorized governmental authority to and against the Project facilities which it
owns, the improvements thereto from time to time and the respective interests or
estates therein; provided that with respect to special assessments or other
governmental charges that may lawfully be paid in installments over a period of
years, each party shall be obligated to pay only such installments as are
required to be paid during the Term of this Recreational Facilities Agreement as
and when the same become due.  

     Each party may, at its expense and in its name, in good faith contest any
such taxes, assessments, utility and other charges and, in the event of any such
contest, may permit the taxes, assessments or other charges so contested to
remain unpaid during the period of such contest and any appeal therefrom unless,
by nonpayment of any such items, the Project or any part thereof will be subject
to loss or forfeiture, in which event the responsible party shall promptly pay
such taxes, assessments or charges or provide full security against any loss
which may result from nonpayment, in form satisfactory to the Credit Enhancement
Provider and the Trustee.

     Section 6.2.   MODIFICATION OF PROJECT.  The District shall have the right
to (but shall not be obligated to), at its own expense, remodel the Project or
to make additions, modifications and improvements to the Project.  Except as
otherwise provided in Section 5.3 and Section 6.5 hereof, all such additions,
modifications and improvements shall thereafter comprise part of the 

                                     18

<PAGE>

Project, and shall be subject to the provisions of this Recreational 
Facilities Agreement.  Such additions, modifications and improvements shall 
not in any way damage the Project or cause the Project to be used for purposes 
other than those authorized under the provisions of applicable federal or 
state law or the Code; and the Project, upon completion of any additions, 
modifications and improvements made thereto pursuant to this Section, shall be 
of a value which is not less than the value of the Project immediately prior 
to the making of such additions, modifications and improvements.  The District 
will not permit any mechanics or other liens to be established or remain 
against the Project for labor or materials furnished in connection with any 
additions, modifications, improvements, repairs, renewals or replacements made 
by the District pursuant to this Section; provided that if any such lien is 
established and the District shall first notify or cause to be notified the 
Corporation and the Trustee of the District's intention to do so, and shall 
provide the Corporation with full security against any loss or forfeiture 
which might arise from the nonpayment of any such item, in form satisfactory 
to the Corporation the District may in good faith contest any lien filed or 
established against the Project, and in such event may permit the items so 
contested to remain undischarged and unsatisfied during the period of such 
contest and any appeal therefrom.  The Corporation will cooperate fully in 
any such contest, upon the request and at the expense of the District.

     Section 6.3.   LIABILITY AND PROPERTY DAMAGE INSURANCE.  The Corporation is
obligated, under the Indenture, to provide insurance with respect to the Project
as therein provided.

     Section 6.4.   INSTALLATION OF PERSONAL PROPERTY.  The District may at any
time and from time to time, in its sole discretion and at its own expense,
install or permit to be installed  items of equipment or other personal property
in or upon the Project which are not permanently attached to the Project.  All
such items shall remain the sole property of the District, in which neither the
Corporation nor the Trustee shall have any interest, and may be modified or
removed by the District at any time provided that the District shall repair and
restore any and all damage to the Project resulting from the installation,
modification or removal of any such items. Nothing in this Recreational
Facilities Agreement shall prevent the District from purchasing or leasing items
to be installed pursuant to this Section under a lease or conditional sale
agreement, or subject to a vendors lien or security agreement, as security for
the unpaid portion of the purchase price thereof, provided that no such lien or
security interest shall attach to any portion of the Project.

     Section 6.5.   CONSTRUCTION OF ALTERNATIVE FACILITIES. The District and the
Related Districts agree that they will not, during the Term hereof, acquire or
construct an alternate facility to serve substantially the same function as
served by the Project, and that they will not approve the issuance of bonds,
notes or other obligations of another nonprofit corporation to be applied to
acquire or construct such a facility except as described in clause (iii) of
Section 6.6 hereof.

     Section 6.6.   SECURITY INTEREST PROHIBITED.  Neither the District nor the
Corporation shall, directly or indirectly, create, incur, assume or suffer to
exist any mortgage, pledge, lien, charge, encumbrance or claim on or with
respect to all or any portion of the Project or the 

                                     19

<PAGE>

Revenues, other than (i) the respective rights of the Corporation, the 
District, the Credit Enhancement Provider and the Trustee as herein and in the 
Indenture, the Deed of Trust, the Operating Agreement and the Reimbursement 
Agreement provided, (ii) Permitted Encumbrances described in the Deed of 
Trust, and (iii) subordinate mortgages, pledges, liens, charges, encumbrances 
or claims the proceeds of which are used to develop Recreational Facilities on 
the Property which are approved by the Credit Enhancement Provider and which 
are permitted pursuant to the Indenture. Except as expressly provided in this 
Recreational Facilities Agreement, the Corporation and the District shall 
promptly, at their own expenses, take such action as may be necessary to duly 
discharge or remove any other mortgage, pledge, lien, charge, encumbrance or 
claim, for which it is responsible, if the same shall arise at any time.  In 
the event that the District fails to take such action as may be necessary to 
duly discharge or remove any such mortgage, pledge, lien, charge, encumbrance 
or claim, for which it is responsible, the District shall reimburse the 
Corporation for any expense incurred by it in order to discharge or remove any 
such mortgage, pledge, lien, charge, encumbrance or claim it is responsible 
for.

                                     20

<PAGE>

                                    ARTICLE 7

                     DAMAGE, DESTRUCTION AND EMINENT DOMAIN

     Section 7.1.   APPLICATION OF PROCEEDS. The proceeds of any award resulting
from any damage to or destruction or condemnation of the Project shall be
deposited with the Trustee, as described and provided for in the Indenture.





                                     21

<PAGE>

                                    ARTICLE 8

                        DISCLAIMER OF WARRANTIES; ACCESS

     Section 8.1.   DISCLAIMER OF WARRANTIES.  The Corporation makes no warranty
or representation, either express or implied, as to the value, design,
condition, merchantability or fitness for any particular purpose of, or the
fitness for the use contemplated by the District of, the Project or any portion
thereof, or any other representation or warranty with respect to the Project or
any portion thereof or that the Project will be suitable for the purposes or
needs of the District.  In no event shall the Corporation or the Trustee be
liable for incidental, indirect, special or consequential damages, in connection
with or arising out of this Recreational Facilities Agreement or the Indenture
for the acquisition, construction, existence, furnishing, functioning or
District's use of the Project.

     Section 8.2.   RIGHTS OF ACCESS.  Subject to the provisions of Section
2.2(h) hereof, the District and the Corporation agree that any Corporation
Representative or District Representative or any officer of the Trustee shall
have the right at all reasonable times to enter upon and to examine and inspect
the Property and the Project.  The District and the Corporation further agree
that any such Corporation Representative or District Representative or officer
shall have such rights of access to the Project as may be reasonably necessary
to cause the proper maintenance of the Property and the Project in the event of
failure by the District or the Corporation to perform its respective obligations
hereunder and provided the District shall not have cured such failure within the
period of grace permitted by Section 11.1(b) hereof.

     Section 8.3.   FURTHER ASSURANCES AND CORRECTIVE INSTRUMENTS.  The
Corporation, the District, and the Related Districts agree that they will, from
time to time, execute, acknowledge and deliver, or cause to be executed,
acknowledged and delivered, such supplements hereto and such further instruments
as may reasonably be required for correcting any inadequate or incorrect
description of the Project or for carrying out the expressed intention of this
Recreational Facilities Agreement, including repayment of the Series 1996 Bonds;
provided, however, that neither the Corporation, the District or the Related
Districts shall be required to execute, acknowledge and deliver any such
supplements or instruments in the event that any such supplements or instruments
will have a material adverse impact on the respective rights of either of the
parties hereto.

     Section 8.4.   CORPORATION AND DISTRICT REPRESENTATIVES.  Whenever under
the provisions of this Recreational Facilities Agreement the approval of the
Corporation or the District is required or the Corporation or the District is
required to take some action at the request of the other, such approval or such
request shall be given for the Corporation by a Corporation Representative and
for the District by a District Representative and any party hereto and the
Trustee shall be authorized to act on any such approval or request.

                                     22

<PAGE>

                                    ARTICLE 9

                      ASSIGNMENT, SUBLEASING AND AMENDMENT

     Section 9.1.   ASSIGNMENT BY THE CORPORATION.  The Corporation's rights
under this Recreational Facilities Agreement (except for the Corporation's
rights under Section 11.3 hereof), may be assigned by the Corporation to the
Trustee or the Credit Enhancement Provider without the consent of the District.

     Section 9.2.   ASSIGNMENT BY THE DISTRICT.  This Recreational Facilities
Agreement may be assigned as a whole or in part, by the District with the
written consent of the Corporation, the Credit Enhancement Provider and the
Trustee (which consents shall not be unreasonably withheld), subject, however,
to each of the following conditions unless otherwise agreed to by the District,
the Related Districts, the Corporation and the Credit Enhancement Provider:

          (a)    No assignment shall relieve the District from primary
     liability for any obligations hereunder.

          (b)    In the case of an assignment, the assignee shall assume the
     obligations of the District hereunder to the extent of the interest
     assigned.

          (c)    The District shall, within thirty (30) days after the delivery
     thereof, furnish or cause to be furnished to the Corporation and the
     Trustee a true and complete copy of each such assumption or assignment as
     the case may be.

          (d)    No such assignment by the District shall cause such Project to
     be used for a purpose other than as may be authorized under applicable law
     and under the Indenture and the Reimbursement Agreement.

     Section 9.3.   AMENDMENT OF THIS RECREATIONAL FACILITIES AGREEMENT. 
Without the written consent of the Credit Enhancement Provider and the Trustee,
the Corporation and the District will not alter, modify or cancel, or agree or
consent to alter, modify or cancel this Recreational Facilities Agreement.  The
consent of the Related Districts to any such alteration, modification or
cancellation shall not be required unless such alteration, modification or
cancellation adversely effects the obligations of the Related Districts
hereunder.

                                     23

<PAGE>

                                   ARTICLE 10

                               FURTHER AGREEMENTS

     Section 10.1.  MAINTENANCE OF POWERS; SUCCESSORS OF CORPORATION.  The
Corporation will at all times use its best efforts to maintain the powers,
functions, duties and obligations now reposed in it or assure the assumptions of
its obligations hereunder by any instrumentality, authority, public agency or
political subdivision succeeding to its powers.

     Section 10.2.  TAX-EXEMPT STATUS OF BONDS.

          (a)    The Corporation and the District each hereby covenants,
     represents and agrees that (i) the Corporation and the District will not
     take or permit any action to be taken that would adversely affect the
     exclusion from gross income tax for federal income tax purposes of the
     interest on the Series 1996 Bonds and, if it should take or permit any such
     action, the Corporation and the District shall take all lawful actions that
     it can take to rescind such action promptly upon having knowledge thereof;
     and (ii) the Corporation and the District will take such action or actions,
     including amending this Recreational Facilities Agreement, as may be
     reasonably necessary in the opinion of bond counsel, to comply fully with
     all applicable rules, rulings, policies, procedures, regulations or other
     official statements promulgated or proposed by the Department of the
     Treasury or the Internal Revenue Service pertaining to obligations the
     interest on which is excluded from gross income for federal income tax
     purposes and to comply with applicable law.

          (b)    The District hereby covenants and represents to the
     Corporation, and, based upon said covenant and representation, the
     Corporation and the District jointly and severally covenant for the benefit
     of all purchasers and holders of the Series 1996 Bonds from time to time
     outstanding that, as long as any of the Series 1996 Bonds remain
     outstanding, moneys on deposit in any fund or account in connection with
     the Series 1996 Bonds, whether such moneys were derived from the proceeds
     of the sale of the Series 1996 Bonds or from any other sources, and whether
     held by the Trustee pursuant to the Indenture or by any other person
     pursuant to any other arrangement, will not be used in a manner which will
     cause the Series 1996 Bonds to be "arbitrage bonds" within the meaning of
     Section 148(a) of the Code and any regulations promulgated or proposed
     thereunder, and the District and the Corporation further covenant to comply
     with the requirements of said Section 148 of the Code and any regulations
     promulgated or proposed thereunder.

          (c)    The Corporation and the District covenant that neither of them
     will enter into any agreement which would result in the payment of
     principal or interest on the Series 1996 Bonds being "federally guaranteed"
     within the meaning of Section 149(b) of the Code.

                                     24

<PAGE>

          (d)    The Corporation and the District hereby covenant that neither
     the District, the Corporation nor any "related person" (as defined in
     Section 147(a) of the Code) has acquired, pursuant to any arrangement,
     formal or informal, any of the Bonds, and further covenant that the
     District, the Corporation and any such "related person" shall not acquire,
     pursuant to any arrangement, formal or informal, any of the Series 1996
     Bonds, provided however, that Series 1996 Bonds may be purchased by a
     "related person" so long as such purchase complies with the Code.

          (e)    The Corporation, the District and the Related Districts hereby
     covenant and agree to comply with the requirements specified in IRS Revenue
     Procedure 82-26.  Specifically, the Corporation, the District and the
     Related Districts warrant, represent and covenant that:

                 (i)     The Corporation is a Colorado not-for-profit
                         corporation which is an instrumentality of the District
                         as defined in Section 3.041 of Revenue Procedure 82-26
                         and Revenue Ruling 57-128, none of whose income will
                         inure to a private person.

                 (ii)    Upon retirement of the Series 1996 Bonds, the District
                         will acquire unencumbered fee title to the Project
                         pursuant to a resolution of the District adopted prior
                         to the date of this Agreement approving such
                         acquisition.

                 (iii)   All proceeds of the Series 1996 Bonds (excluding
                         costs of issuance) and income from the investment
                         thereof will be applied solely to the costs of
                         acquiring the Property, constructing improvements
                         for Recreational Facilities on the Property, and
                         paying any interest accruing on the Series 1996
                         Bonds during the period that the Property is being
                         held unimproved prior to the development of
                         Recreational Facilities thereon and during the
                         period Recreational Facilities are being
                         constructed thereon.  All such proceeds are
                         reasonably anticipated to be used for such
                         purposes.  Any such proceeds which remain after
                         the Property has been acquired and construction of
                         Recreational Facilities on the Property has been
                         completed or abandoned will be used by the Trustee
                         pursuant to the Indenture solely to redeem Series
                         1996 Bonds on the earliest date upon which they
                         can be called without premium pursuant to the
                         Indenture or otherwise applied to pay principal
                         upon the Series 1996 Bonds.
             
                 (iv)    The District and the Related Districts have
                         approved by resolutions adopted no more than one
                         year prior to the date of the issuance of the
                         Series 1996 Bonds the creation of the Corporation,
                         the issuance of the Series 1996 Bonds, and the
                         imposition of payments in lieu of taxes pursuant
                         to the Development Agreement.

                                     25

<PAGE>

                 (v)     The Corporation, the District and the Related Districts
                         will take all reasonable efforts and proceed diligently
                         to secure all necessary approvals for construction and
                         financing of the Recreational Facilities on the
                         Property described in the Residential and Golf Course
                         Market Analysis and Revenue Projection prepared by THK
                         Associates, Inc. for the Corporation dated February 12,
                         1996.  All obligations incurred to finance such
                         improvements or otherwise improve the Property will be
                         discharged no later than the latest maturity date of
                         the Series 1996 Bonds.  The Corporation and the
                         District will not consent to the extension of the
                         maturity of the Series 1996 Bonds or any other
                         financing regarding the Project.

                 (vi)    The proceeds of all casualty insurance regarding
                         the Project will be used either to restore the
                         Recreational Facilities or to retire the Series
                         1996 Bonds or other financing for the Recreational
                         Facilities.

     Section 10.3.  NOTICE OF CERTAIN EVENTS.  The District hereby covenants to
advise the Corporation, the Credit Enhancement Provider and the Trustee promptly
in writing of the occurrence of any Event of Default hereunder or any event
which, if such event is not cured within a permitted period of grace, would
constitute an Event of Default hereunder, specifying the nature and period of
existence of such event and the actions being taken or proposed to be taken with
respect thereto.  In addition, the District hereby covenants to advise the
Corporation, the Credit Enhancement Provider and the Trustee promptly in writing
of the occurrence of any default hereunder.

     Section 10.4.  NO UNTRUE STATEMENTS.  This Recreational Facilities
Agreement does not contain, to the best of the Corporation's, the District's or
the Related Districts' knowledge, any untrue statement of a material fact as of
the date hereof and as of the date of issue of the Bonds.  It is specifically
understood by the District and the Related Districts that all such statements,
representations and warranties made by the District and the Related Districts
shall be deemed to have been relied upon by the Corporation as an inducement to
enter into this Recreational Facilities Agreement and that if any such
statements, representations and warranties were materially incorrect at the time
they were made or as of the date of issue of the Bonds, the Corporation may
consider any such misrepresentation or breach an Event of Default.

     Section 10.5.  CERTAIN MATTERS REGARDING ANY AGREEMENTS, COVENANTS AND
WARRANTIES RELATING TO TAX EXEMPTION.  The District and the Corporation
recognize that the exclusion from gross income for federal income tax purposes
of the interest to be paid on the Series 1996 Bonds is dependent upon the
District's and the Corporation's compliance with certain provisions of the Code.
The Corporation and the District represent and covenant that:

          (a)    As prohibited by Section 142(c)(2) of the Code, no proceeds
     of the Series 1996 Bonds shall be used for any of the following purposes:

                                     26

<PAGE>

                 (i)     any lodging facility, within the meaning of the
                         Code;

                 (ii)    any retail facility (including food and beverage
                         facilities) in excess of a size necessary to serve
                         the general public and users and employees at the
                         Project;

                 (iii)   any retail facility (other than parking) for passengers
                         or the general public located outside the Project;

                 (iv)    any office building for individuals who are not
                         employees of a governmental unit or of the Corporation;

                 (v)     any industrial park; or

                 (vi)    any manufacturing facility within the meaning of
                         Section 144 of the Code.

          (b)    The proceeds from the sale of the Series 1996 Bonds will be
     used only for payment of certain Costs of Issuance of the Series 1996 Bonds
     and costs of acquiring the Property, and will not be used to provide
     working capital for the Corporation, the District or any affiliate thereof
     as provided in Section 10.2(e) above.

          (c)    The District will not permit or cause any state or local
     governmental unit, nor any constituted authority or instrumentality
     empowered to issue obligations by or on behalf of any state or local
     governmental unit, to issue obligations under Sections 140 through 150 of
     the Code, the proceeds of which will be loaned to or used by the District
     or any related person (as defined under Section 147(a)(2) of the Code)
     during the period commencing on the date of issuance of the Series 1996
     Bonds and ending thirty (30) days thereafter.

          (d)    All of the information, representations and warranties
     contained in the tax certificates of the Corporation or the District in
     connection with the issuance of the Series 1996 Bonds, are reaffirmed and
     incorporated herein by this reference as if fully set forth at this point.

          (e)    The District shall not take or omit to take or allow any
     person to take or omit to take any action which will adversely affect the
     exclusion from gross income for federal income tax purposes of interest on
     the Series 1996 Bonds.

          (f)    The District agrees and covenants that any and all agreements
     which the District enters into, from time to time, with any entity by which
     agreement such entity shall sublease, operate or manage the Project, shall
     be in such form which will not adversely affect the exclusion from gross
     income for federal income tax purposes of interest on the Series 1996
     Bonds.  Any such agreement shall provide for cancellation by the
     Corporation or the District on not more than ninety (90) days' notice.

                                     27

<PAGE>

          (g)    None of the proceeds of the Series 1996 Bonds have been or
     will be used to finance or be used to provide any airplane, skybox or other
     private luxury box, health club facility, facility primarily used for
     gambling, or any store the principal business of which is the sale of
     alcoholic beverages for consumption off premises.

          (h)    The Corporation and the District hereby certify each to the
     other that neither the District nor the Corporation have been notified of
     any listing or proposed listing of either of them by the Internal Revenue
     Service as a bond issuer whose arbitrage certifications may not be relied
     upon.

                                     28


<PAGE>

                                   ARTICLE 11

                         EVENTS OF DEFAULT AND REMEDIES

     Section 11.1.  EVENTS OF DEFAULT.  Each of the following shall be and
constitute an "Event of Default" by the District and a breach of this
Recreational Facilities Agreement:

          (a)    The District shall (i) apply for or consent to the appointment
     of or taking of possession by a receiver, trustee, custodian, liquidator or
     other similar official of itself or of all or a substantial part of its
     properties or assets, (ii) admit in writing its inability to pay its debts
     as they become due or generally become unable to pay its debts as they
     become due, (iii) make a general assignment for the benefit of creditors,
     or (iv) commence a voluntary case as debtor under the federal bankruptcy
     laws (whether under any Title of the United States Code or otherwise under
     any federal law) as now or hereafter constituted or file a petition seeking
     to take advantage of any other law relating to bankruptcy, reorganization,
     insolvency, winding up, or composition or adjustment of debts, or acquiesce
     in writing to, or fail to controvert in a timely manner, a petition filed
     against it in any involuntary case under such federal bankruptcy laws, as
     the case may be, or any action shall be taken by it for the purpose of
     effecting any of the foregoing;

          (b)    A case or proceeding shall be commenced, without the
     application or consent of the District in any court of competent
     jurisdiction, seeking the liquidation, reorganization, dissolution, winding
     up, or composition or readjustment of debts, of the District, or the
     appointment of a receiver, trustee, custodian, liquidator or any similar
     official of the District or of all or a substantial part of the assets of
     the District, or similar relief with respect to the District under any
     federal laws relating to bankruptcy (including under any Title of the
     United States Code or otherwise under any federal law), insolvency,
     liquidation, reorganization, winding up, or composition or adjustment of
     debts, shall be commenced against the District and such case or proceeding
     shall continue undismissed or unstayed and in effect for any period of 60
     consecutive days, or an order for relief against the District shall be
     entered in an involuntary case under such federal or other bankruptcy laws;

          (c)    If (i) the District is adjudged insolvent by a court of
     competent jurisdiction, or (ii) an order, judgment or decree is entered by
     any court of competent jurisdiction appointing, without the consent of the
     District, a receiver, trustee or custodian of the District or of the whole
     or any part of its property and any of the aforesaid adjudications, orders,
     judgments or decrees shall not be vacated or set aside or stayed within 60
     days from the date of entry thereof;

          (d)    If, under the provisions of any other law for the relief or
     aid of debtors, any court of competent jurisdiction shall assume custody or
     control of the District or of the whole or any substantial part of the
     property of the District and such custody or control shall not be
     terminated within 60 days from the date of assumption of such custody or
     control;



                                     29

<PAGE>

          (e)    Any warranty, representation or other statement of the
     District contained in this Recreational Facilities Agreement or in any
     instrument furnished in compliance with or in reference to this
     Recreational Facilities Agreement shall prove to have been false or
     misleading in any material respect on the date as of which it was made; or

          (f)    Failure by the District to observe and perform any covenant,
     condition agreement or provision of this Recreational Facilities Agreement
     or in a document executed in connection herewith, which failure shall
     continue for a period of thirty (30) days after written notice thereof,
     specifying such failure and requesting that it be remedied, shall have been
     given to the District by the Corporation, the Trustee or the Credit
     Enhancement Provider by first class mail or hand delivery, any of which may
     give such notice in their discretion, unless the person giving such notice
     shall agree in writing to an extension of such thirty (30) day period prior
     to expiration; provided, however, that the Corporation, the Trustee, and
     the Credit Enhancement Provider, as the case may be, shall be deemed to
     have agreed to an extension of such period if corrective action is
     initiated by the District within such period, is being diligently pursued,
     and can be continued and completed in such manner as to not adversely
     affect the rights of the Owners of the Bonds, the Credit Enhancement
     Provider or normal operations of the Project or the use thereof for
     purposes for which such operations are and were originally intended.

     In case the Corporation (or the Credit Enhancement Provider, as the
assignee of the Corporation) shall have proceeded to enforce any right under
this Recreational Facilities Agreement and such proceedings shall have been
discontinued or abandoned for any reason or shall have been determined adversely
to the Corporation or the Trustee, then and in every such case the District, the
Corporation, the Trustee and the Credit Enhancement Provider shall be restored
to their respective positions and rights hereunder, and all rights, remedies and
powers of the District, the Corporation, the Trustee and the Credit Enhancement
Provider shall continue as though no such proceeding had been taken, but subject
to the limitations of any such adverse determination.

     Section 11.2.  REMEDIES ON DEFAULT.  Whenever any Event of Default referred
to in Section 11.1 hereof shall have occurred and be continuing:

     (a) The Corporation, the Trustee and the Credit Enhancement Provider shall
have the right (i) to inspect, examine and make copies of the books and records
and any and all accounts, data and income tax and other tax returns of the
District during regular business hours of the District if reasonably necessary
in the opinion of the Trustee, the Credit Enhancement Provider, or the
Corporation, and (ii) to take whatever action at law or in equity may appear
necessary or desirable to collect the amounts then due and thereafter to become
due, or to enforce performance and observance of any obligation, agreement or
covenant of the District under this Recreational Facilities Agreement.



                                     30

<PAGE>

     (b) In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the District under federal bankruptcy laws or any other
applicable law, or in case a receiver or trustee shall have been appointed for
the property of the District or in the case of any other similar judicial
proceedings relative to the District, or to the creditors or property of the
District, the Corporation, the Trustee or the Credit Enhancement Provider shall
be entitled and empowered, by intervention in such proceedings or otherwise, to
file and prove a claim or claims for the whole or any amount due and payable
hereunder, including interest owing and unpaid in respect thereof and for any
other amounts then due and payable hereunder and, in case of any judicial
proceedings, to file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of the Corporation, the
Trustee or the Credit Enhancement Provider allowed in such judicial proceedings
relative to the District, its creditors or its property, and to collect and
receive any moneys or other property payable or deliverable on any such claims,
and to distribute the same after the deduction of its charges and expenses; and
any receiver, assignee or trustee in bankruptcy or reorganization is hereby
authorized to make such payments to the Trustee, the Corporation and the Credit
Enhancement Provider, as their respective interests appear, including without
limitation any amount due for compensation and expenses, including counsel fees
incurred by it up to the date of such distribution.

     (c) The District hereby agrees and consents that in conjunction with the
exercise of any remedies provided in this Recreational Facilities Agreement,
with respect to any dispute relating to this Recreational Facilities Agreement
that service of process on the District may be made by either personally serving
such process on any member of the Board of Directors of the District or by
mailing such service of process, by registered mail, return receipt requested,
to any member of the Board of County Commissioners of the District, or such
service of process may be made on any such member of the Board of Directors or
on the District in any manner then permitted by law.

     (d) The foregoing provision of this Section 11.2 are subject to the
limitation that the Trustee shall be entitled to exercise its rights under this
Recreational Facilities Agreement, other than the rights specified in
clause (a)(i) above, only if the Credit Enhancement Provider has failed to
provide payments to the Trustee pursuant to the Credit Enhancement, or if the
Trustee's failure to exercise such rights could be anticipated to materially
adversely effect the holders of the Series 1996 Bonds.

     Section 11.3.  ATTORNEYS' FEES AND EXPENSES.  If an Event of Default
hereunder occurs and if the Corporation or the Credit Enhancement Provider
should employ attorneys or incur other expenses for the collection of moneys or
the enforcement or performance or observance of any obligation or agreement on
the part of the District herein contained, the District agrees that it will on
demand pay to the Corporation or the Credit Enhancement Provider, as the case
may be, the reasonable fees of such attorneys and such other expenses so
incurred, including those incurred in connection with court appeals.  If an
Event of Default hereunder occurs and if the District should employ attorneys or
incur other expenses for the enforcement of performance or observance of any
obligation or agreement on the part of the Corporation herein contained, the
Corporation agrees that it will on demand pay to the District the reasonable
fees 



                                     31

<PAGE>

of such attorneys and such other expenses so incurred, including those 
incurred in connection with court appeals, provided that the Corporation 
shall then have its own funds to make such payments, and provided further 
that at no time shall any part of the Trust Estate (including any Revenues) 
be used or deemed to be available to be used to make payment of any fees or 
expenses described in this sentence.

     Section 11.4.  NO REMEDY EXCLUSIVE.  No remedy herein conferred upon or
reserved to the Corporation, the Trustee or the Credit Enhancement Provider is
intended to be exclusive of any other available remedy or remedies, but each and
every such remedy shall be cumulative and shall be in addition to every other
remedy given under this Recreational Facilities Agreement or now or hereafter
existing at law or in equity or by statute.  No delay or omission to exercise
any right or power accruing upon any Event of Default shall impair any such
right or power or shall be construed to be a waiver thereof, but any such right
and power may be exercised from time to time and as often as may be deemed
expedient.  In order to entitle the Corporation, the Trustee or the Credit
Enhancement Provider to exercise any remedy reserved to any of them in this
Article 11, it shall not be necessary to give any notice, other than such notice
as may be expressly required by this article or by law.  Subject to the terms of
the Indenture, such rights and remedies as are given the Corporation hereunder
shall also extend to the Credit Enhancement Provider, the Trustee and to Owners
of the Bonds, and the Credit Enhancement Provider, the Trustee and the Owners of
the Bonds shall be entitled to the benefit of all covenants and agreements
herein contained.

     Section 11.5.  NO ADDITIONAL WAIVER IMPLIED BY ONE WAIVER.  In the event
any agreement or covenant contained in this Recreational Facilities Agreement
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.  No waiver shall be deemed as being
established hereunder through conduct, custom, course of dealing, or trade or
public usage.  Due to the nature of the assignment of certain of the
Corporation's rights and interests hereunder to the Trustee and the Credit
Enhancement Provider, the Corporation shall have no power to waive any default
hereunder by the District in respect of such rights and interest without the
express prior written consent of the Trustee and the Credit Enhancement Provider
and the Credit Enhancement Provider and the Trustee may exercise any of the
rights of the Corporation hereunder, subject to the limitations of the last
paragraph of Section 11.2 hereof.

     Section 11.6.  CREDIT ENHANCEMENT PROVIDER AND TRUSTEE TO EXERCISE RIGHTS. 
Such rights and remedies as are given to the Corporation under this Article 11
have been assigned by the Corporation to the Credit Enhancement Provider and the
Trustee under an assignment hereof, to which assignment the District hereby
consents.



                                     32

<PAGE>

                                   ARTICLE 12


                              OPTION TO TERMINATE 

     Section 12.1.  OPTIONS TO TERMINATE; OPTIONAL REDEMPTION.  The District
shall have, and is hereby granted, the following options to terminate the Term
of this Agreement:

          (a)    At any time prior to full payment of the Series 1996 Bonds,
     the District may make provision for payment of the Series 1996 Bonds in
     accordance with the provisions of the Indenture, and the District may
     terminate the Term of this Agreement, regardless of whether the Series 1996
     Bonds are then subject to optional redemption, (A) by paying to Trustee an
     amount which, when added to all amounts then on deposit in the Bond Fund,
     will be sufficient to pay, retire and redeem all the Outstanding Series
     1996 Bonds in accordance with the provisions of the Indenture (including,
     without limiting the generality of the foregoing, principal of the
     Outstanding Series 1996 Bonds and interest to maturity or earliest
     applicable redemption date, as the case may be, and premium, if any,
     expenses of redemption and all fees and expenses of the Trustee and the
     District) and, in case of redemption, by giving notice and making
     arrangements satisfactory to the Trustee for the giving of the required
     notice of redemption under the Indenture, (B) by giving the Corporation,
     the Trustee and the Credit Enhancement Provider notice in writing of such
     termination, and (C) by paying all amounts unpaid under the Reimbursement
     Agreement and the Deed of Trust, and such termination shall forthwith
     become effective.

          (b)    After full payment of the Series 1996 Bonds (or provision for
     payment thereof having been made in accordance with the provisions of
     Article IX of the Indenture), and after payment of all amounts arising
     under the Reimbursement Agreement and the Deed of Trust, the District may
     terminate the Term of this Agreement by giving the Corporation, the Trustee
     and the Credit Enhancement Provider notice in writing of such termination
     and such termination shall forthwith become effective.

          (c)    The prepayment amount payable by the District in the event of
     any prepayment to be made pursuant to subsections (a) or (b) of this
     Section 12.1 shall be the sum of the following:

                 (i)  An amount of money which, when added to amounts then on
          deposit in the Redemption Fund, will be sufficient to retire and
          redeem all the then Outstanding Series 1996 Bonds in the manner
          required by the Indenture and on the earliest possible date after
          notice of redemption is given as provided in the Indenture, whether or
          not such date is an Interest Payment Date, including, without
          limitation, the principal amount thereof, all interest to accrue to
          said redemption date, the applicable redemption premium and expenses,
          if any, plus



                                     33

<PAGE>

                 (ii)  An amount of money equal to the administrative fees and
          expenses of the Trustee and the Corporation accrued and to accrue
          until such final payment and redemption or purchase of the Series 1996
          Bonds, plus

                 (iii) An amount equal to all amounts then accrued and to
          accrue until such final payment and redemption or purchase of the
          Series 1996 Bonds, plus

                 (iv)  An amount of money equal to all sums then due the
          Corporation under this Agreement, plus

                 (v)   To the extent not included in the foregoing, an amount
          sufficient to pay all obligations under the Reimbursement Agreement
          and the Indenture.

     Section 12.2.  EXTRAORDINARY TERMINATION OPTION.  The District shall have,
and is hereby granted, the extraordinary option to terminate this Recreational
Facilities Agreement upon prepayment of the amounts sufficient to provide for
the full payment of the Series 1996 Bonds (or to make provision for such payment
in accordance with the provisions of the Indenture) and all amounts due under
the Reimbursement Agreement and the Deed of Trust, upon the occurrence of any of
the events set forth in Section 9.10(b) or (c) of the Indenture.

     To exercise such option, the District shall, within sixty (60) days
following the event authorizing or requiring such prepayment, give written
notice to the Corporation and to the Trustee, and shall specify therein the date
for prepayment of the Series 1996 Bonds and specifying the date redemption of
the Series 1996 Bonds is to be made from such prepayment, subject, however, to
the provisions for the deposit of proceeds of condemnation awards, or other
available money held by the Trustee under the Indenture, as set forth in the
Indenture.  Provision shall be made for redemption of the Series 1996 Bonds in
accordance with the express provisions of the Indenture, and the District shall
in all respects make arrangements satisfactory to the Trustee for the giving of
the required notice of redemption in accordance therewith.

     Section 12.3.  RIGHT TO ACQUIRE.  The District is hereby granted the right
to obtain, at any time, unencumbered fee title and exclusive possession of
property (including the Project) financed by obligations of the Corporation
(including the Bonds and obligations arising under the Reimbursement Agreement),
and any additions to such property, by (1) placing into escrow an amount that
will be sufficient to defease such obligations, and (2) paying reasonable costs
incident to the defeasance, in the manner provided in Sections 12.1 or 12.2
hereof.  The District, at any time before its defeases such obligations, shall
not agree or otherwise be obligated to convey any interest in such property to
any person (including the United States of America or its agencies or
instrumentalities) for any period extending beyond or beginning after the
District defeases such obligations.  In addition, the District shall not agree
or otherwise be obligated to convey a fee interest in such property to any
person who was a user thereof, (or a related person) before the defeasance
within 90 days after the District defeases such obligations.



                                     34

<PAGE>

     Section 12.4.  UNENCUMBERED TITLE.  If the District exercises its option
under Section 12.3, the Corporation shall immediately cancel all encumbrances on
such property, including any leases and management agreements.  Any lease,
management contract, or similar encumbrance on such property will be considered
immediately cancelled if the lessee, management company, or other user vacates
such property within a reasonable time, generally not to exceed 90 days, after
the date the District exercises its rights under Section 12.3.  Encumbrances
that do not significantly interfere with the enjoyment of such property, such as
most easements granted to utility companies, are not considered encumbrances for
purposes of this Section 12.4 or for purposes of Section 12.6.

     Section 12.5.  DEFAULT RIGHTS.  In addition to the foregoing, if the
Corporation defaults in its payments under obligations described in the
Indenture, the District is hereby granted an exclusive option to purchase the
property financed thereby (including the Project) for the amount of the
outstanding indebtedness of the Corporation and accrued interest to the date of
default.  The District shall have (a) not less than 90 days from the date it is
notified by the Corporation of the default in which to exercise the option, and
(b) not less than 90 days from the date it exercises the option to purchase the
property.

     Section 12.6.  TITLE.  Unencumbered fee title to the Property and the
Project and any additions thereto and exclusive possession and use thereof will
vest in the District without demand or further action on its part when all
obligations of the Corporation (including the Bonds and obligations under the
Reimbursement Agreement) are discharged.  For purposes of this Section 12.6,
such obligations will be discharged when (a) cash is available at the place of
payment on the date that the obligations are due (whether at maturity or upon
call for redemption) and (b) interest ceases to accrue on the obligations.  All
leases, management contracts and similar encumbrances on the Property or the
Project shall terminate upon discharge of said obligations in the same manner as
set forth in Section 12.4.

     Section 12.7.  OPERATING AGREEMENT RIGHTS.  It is the intent of the parties
hereto that upon the effective date of the Operating Agreement and the
termination of this Recreational Facilities Agreement, the rights of the
District specified in this Article 12 shall be replaced by substantially the
same rights provided by the Operating Agreement, and the foregoing rights shall
survive to the extent necessary to have priority over any intervening claim
arising after the date hereof and prior to the effective date of the Operating
Agreement.



                                     35

<PAGE>

                                   ARTICLE 13

                                  MISCELLANEOUS

     Section 13.1.  AMENDMENT OF RECREATIONAL FACILITIES AGREEMENT OR INDENTURE.
This Recreational Facilities Agreement may not be effectively changed, amended
or modified except with the written consent of the Credit Enhancement Provider
and the Trustee.  Except as otherwise provided in this Recreational Facilities
Agreement or in the Indenture, subsequent to the issuance of the Series 1996
Bonds and prior to their payment in full (or provision for payment thereof
having been made in accordance with the provisions of the Indenture), this
Recreational Facilities Agreement may not be effectively altered or terminated
without the written consent of all the parties hereto except that the Related
Districts' consent shall only be required if provided for in Section 9.3.  The
Corporation covenants that it will take no action to amend or supplement the
Indenture in any manner which would materially affect the obligations of the
District or Related District hereunder without obtaining the prior written
consent of the affected District or Related District to such amendment or
supplement.

     Section 13.2.  NOTICES.  Except as otherwise provided in the Indenture or
this Recreational Facilities Agreement, all notices, certificates, requests,
requisitions, directions or other communications required or permitted to be
given by the Corporation, the District or the Trustee pursuant to the Indenture
or this Recreational Facilities Agreement shall be in writing and shall be
sufficiently given and shall be deemed given when mailed by first class mail
(unless another form of communication for any such notice, certificate, request,
requisition, direction or other communication shall be required hereunder),
postage prepaid, addressed as follows:

If to the Corporation:     Castle Rock Ranch Public Improvements Authority
                           Stanford Place III, Suite 902
                           4582 South Ulster Street Parkway
                           Denver, Colorado 80237
                           Attn:  C. Roger Addlesperger

If to the District         Dawson Ridge Metropolitan District No. __
or any Related District:   Stanford Place III, Suite 902
                           4582 South Ulster Street Parkway
                           Denver, Colorado  80237
                           Attn:  C. Roger Addlesperger

If to the Trustee:         SouthTrust Bank of Alabama, National Association
                           100 Office Park Drive, Lower Level
                           Birmingham, Alabama  35223
                           Attn:  Corporate Trust Department



                                     36

<PAGE>

If to the Credit           BFC Guaranty Corp.
Enhancement Provider:      1455 Pennsylvania Avenue, Suite 230
                           Washington, DC  20004
                           Attn:  Roger Bailey

     Section 13.3.  APPLICABLE LAW.  This Recreational Facilities Agreement
shall be governed by the laws of the State of Colorado without regard to
principles of choice of law.

     Section 13.4.  BINDING EFFECT.  This Recreational Facilities Agreement
shall inure to the benefit of and shall be binding upon the Corporation, the
District, the Related Districts and their respective successors and assigns,
subject, however, to the limitations contained herein.

     Section 13.5.  SEVERABILITY OF INVALID PROVISIONS.  If any one provision of
this Recreational Facilities Agreement shall be held or deemed to be or shall,
in fact, be inoperative or unenforceable as applied in any particular case in
any jurisdiction or in all jurisdictions, or in all cases because it conflicts
with any other provision or provisions hereof or any constitution or statute or
rule of public policy, or for any other reason, such circumstances shall not
have the effect of rendering the provision in question inoperative or
unenforceable in any other case or circumstance, or of rendering any other
provision or provisions therein or herein contained invalid, inoperative, or
unenforceable to any extent whatever and this Recreational Facilities Agreement
shall be construed and enforced as if any such illegal, invalid, inoperative or
unenforceable provisions had not initially been contained therein or herein.  In
the event any one or more phrases, sentences, clauses or sections of this
Recreational Facilities Agreement shall be held invalid or unenforceable by any
court of competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provision of this Recreational Facilities Agreement or
any part thereof, it being the intent of the parties hereto that the provisions
of this Recreational Facilities Agreement are fully severable.

     Section 13.6.  AMOUNTS REMAINING IN FUNDS.  It is agreed by the parties
hereto that any amounts remaining in the Bond Fund upon expiration or sooner
termination of the Term of this Recreational Facilities Agreement, as provided
in this Recreational Facilities Agreement (or, in the event this Recreational
Facilities Agreement is terminated on the effective date of the Operating
Agreement, then after the expiration or earlier termination thereof), after
payment in full of the Bonds (or provision for payment thereof having been made
in accordance with the provisions of the Indenture) and payments of all amounts
unpaid under the Reimbursement Agreement and the Deed of Trust, shall be applied
and distributed in the manner and priority as set forth in the Indenture, and
after payment of all administrative fees and expenses of the issuer and the
Trustee in accordance with the provisions of the Indenture.

     Section 13.7.  EXECUTION OF COUNTERPARTS.  This Recreational Facilities
Agreement may be simultaneously executed in any number of counterparts, each of
which when so executed and delivered shall for all purposes be deemed to be an
original, but such counterparts of which this shall be one shall together
constitute but one and the same instrument.



                                     37

<PAGE>

     Section 13.8.  INDENTURE RIGHTS.  The Corporation hereby covenants and
agrees that the provisions of the Indenture granting any rights to the District
shall not be amended as modified without the consent of the District.

     Section 13.9.  BURDEN ON PROPERTY.  This Recreational Facilities Agreement
is a burden upon and runs with the property described in Exhibit A hereto and is
binding upon the Corporation and upon all persons or entities with any right,
title or interest to such property or any part thereof. This Recreational
Facilities Agreement may be released therefrom in the same manner as the release
of property under the Indenture or the Deed of Trust executed in connection with
the issuance of the Bonds, and as provided in Section 4.2 hereof.



                   [BALANCE OF PAGE INTENTIONALLY LEFT BLANK]










                                     38

<PAGE>

     IN WITNESS WHEREOF, the undersigned have hereunto set their hands this 
29th day of March, 1996.

DAWSON RIDGE METROPOLITAN              CASTLE ROCK RANCH PUBLIC
DISTRICT NO. 5                         IMPROVEMENTS AUTHORITY





C. Roger Addlesperger                  /s/ C. Roger Addlesperger
- ------------------------               --------------------------------------
Chairman,                              President
Board of Directors



                                       DAWSON RIDGE METROPOLITAN
                                       DISTRICT NO. 1


                                       By: C. Roger Addlesperger
                                           ----------------------------------
                                           Title: Chairman

                                       DAWSON RIDGE METROPOLITAN
                                       DISTRICT NO. 2


                                       By: C. Roger Addlesperger
                                           ----------------------------------
                                           Title: Chairman

                                       DAWSON RIDGE METROPOLITAN
                                       DISTRICT NO. 3


                                       By: C. Roger Addlesperger
                                           ----------------------------------
                                           Title: Chairman

                                       DAWSON RIDGE METROPOLITAN
                                       DISTRICT NO. 4


                                       By: C. Roger Addlesperger
                                           ----------------------------------
                                           Title: Chairman




                                     39

<PAGE>

STATE OF COLORADO   )
                    ) ss.
COUNTY OF DENVER    )

     The foregoing instrument was acknowledged before me this 26TH day of
March 1996 by C. Roger Addlesperger on behalf of Castle Rock Ranch Public
Improvements Authority, a Colorado nonprofit corporation.

          Witness my hand and official seal.

(SEAL)

                              Robin W. Biery
                              ---------------------
                              Notary Public

          My commission expires:  9-16-98
                                --------------------

STATE OF COLORADO   )
                    ) ss.
COUNTY OF DENVER    )

     The foregoing instrument was acknowledged before me this 26th day of
March 1996 by C. Roger Addlesperger on behalf of Dawson Ridge Metropolitan
District No. 5, Colorado.

     Witness my hand and official seal.


(SEAL)

                              Robin W. Biery
                              ---------------------
                              Notary Public

          My commission expires:  9-16-98
                                --------------------



                                     40

<PAGE>

STATE OF COLORADO   )
                    ) ss.
COUNTY OF DENVER    )

     The foregoing instrument was acknowledged before me this 26th day of
March 1996 by C. Roger Addlesperger on behalf of Dawson Ridge Metropolitan
District No. 1, Colorado.

     Witness my hand and official seal.


(SEAL)
                              Robin W. Biery
                              ---------------------
                              Notary Public

          My commission expires:  9-16-98
                                --------------------



STATE OF COLORADO   )
                    ) ss.
COUNTY OF DENVER    )

     The foregoing instrument was acknowledged before me this 26th day of
March 1996 by C. Roger Addlesperger on behalf of Dawson Ridge Metropolitan
District No. 2, Colorado.

     Witness my hand and official seal.


(SEAL)

                              Robin W. Biery
                              ---------------------
                              Notary Public

          My commission expires:  9-16-98
                                --------------------




                                     41

<PAGE>

STATE OF COLORADO   )
                    ) ss.
COUNTY OF DENVER    )

     The foregoing instrument was acknowledged before me this 26th day of
March 1996 by C. Roger Addlesperger on behalf of Dawson Ridge Metropolitan
District No. 3, Colorado.

     Witness my hand and official seal.


(SEAL)

                              Robin W. Biery
                              ---------------------
                              Notary Public

          My commission expires:  9-16-98
                                --------------------

STATE OF COLORADO   )
                    ) ss.
COUNTY OF DENVER    )

     The foregoing instrument was acknowledged before me this 26th day of
March 1996 by C. Roger Addlesperger on behalf of Dawson Ridge Metropolitan
District No. 4, Colorado.

     Witness my hand and official seal.


(SEAL)

                              Robin W. Biery
                              ---------------------
                              Notary Public

          My commission expires:  9-16-98
                                --------------------




                                     42

<PAGE>

                                    EXHIBIT A

                               (Legal Description)







                                       A-1

<PAGE>

                                    EXHIBIT A

GOLF COURSE PARCEL A:

A parcel of land located in Sections 28, 29 and 21, all in Township 8 South 
Range 67 West of the Sixth Principal Meridian, Douglas County, Colorado, 
being more particularly described as follows:

BEGINNING at the North quarter corner of said Section 29 whence the Northerly 
line of the East half of Section 29 bears S 88DEG.37'18" E a distance of 
2661.22 feet; thence S 88DEG.37'18" E along said Northerly line a distance of 
2661.22 feet; thence N 00DEG.23'27" E along the Westerly line of Section 21 a 
distance of 782.32 feet; thence S 37DEG.02'12" E a distance of 2474.11 feet; 
thence the following four courses along Dawson Ridge filing A;

   1.  S 67DEG.47'53" W a distance of 128.79 feet;
   2.  S 39DEG.28'53" W a distance of 108.41 feet;
   3.  S 58DEG.24'13" E a distance of 228.53 feet;
   4.  S 83DEG.33'27" E a distance of 170.37 feet;

thence S 37DEG.02'12" E a distance of 1105.69 feet;
thence S 21DEG.08'57" E a distance of 2657.54 feet;
thence the following two courses along a parcel of land described by book 695 
at page 459 of the Douglas County Clerk and Recorder's Office:

   1.  N 00DEG.19'26" W a distance of 1262.69 feet
   2.  N 89DEG.22'02" W a distance of 4017.50 feet

thence N 00DEG.14'06" W along the Westerly line of the East half of Section 
29 a distance of 3543.76 feet to the point of beginning;

EXCEPTING from the above parcel the following parcels:

Dawson Ridge Filings A and B, all dedicated street rights of way;

ALSO EXCEPTING the following one acre parcel described as follows:

A parcel of land located in the East half of Section 29, Township 8 South, 
Range 67 West of the Sixth Principal Meridian, Douglas County, Colorado, 
being more particularly described as follows:

Commencing at the North quarter corner of said Section 29;
thence South 00 degrees 04 minutes 06 seconds East along the westerly line of 
said East half of Section 29, a distance of 3267.55 feet to the point of 
beginning;

<PAGE>

thence North 89 degrees 45 minutes 54 seconds East a distance of 208.71 feet;
thence South 00 degrees 14 minutes 06 seconds East a distance of 208.71 feet;
thence South 89 degrees 45 minutes 54 seconds West a distance of 208.71 feet;
thence North 00 degrees 14 minutes 06 seconds West along said westerly line a 
distance of 208.71 feet to the point of Beginning.

County of Douglas,
State of Colorado

GOLF COURSE PARCEL B:

A Parcel of land lying in Sections 22, 27, 28, 33 & 34, all in Township 8 
South Range 67 West of the Sixth Principal Meridian, Douglas County, 
Colorado, being more particularly described as follows:

COMMENCING at the Northeast corner of said Section 28 whence the Southeast 
corner of said Section 28 bears S 00DEG.22'18'' E a distance of 5302.75 feet;
thence N 53DEG.05'33" E a distance of 2071.05 feet to the point of beginning;
thence S 84DEG.49'36" E a distance of 790.91 feet;
thence S 15DEG.43;30" W along the Westerly right of way line of the A.T. & 
S.F. Railroad a distance of 5019.66 feet;
thence along the following three courses along a parcel of land described by 
Book 1095 at Page 629 of the Douglas County Clerk and Recorder:

    1.  N 89DEG.22'05" W a distance of 2386.46 feet;
    2.  S 00DEG.19'29" E a distance of 308.79 feet;
    3.  S 89DEG.22'05" E a distance of 2298.04 feet;

thence S 15DEG.43'30" W along the Westerly right of way line of the A.T. & 
S.F. Railroad a distance of 2425.47 feet;
thence N 89DEG.48'11" W a distance of 678.73 feet;
thence S 00DEG.44'59" W a distance of 600.54 feet;
thence S 89DEG.03'33" E a distance of 515.85 feet;
thence S 15DEG.43'30" W a distance of 548.74 feet;
thence N 00DEG.23'36" E a distance of 226.92 feet;
thence S 15DEG.45'37" W a distance of 788.62 feet;
thence N 89DEG.09'35" W, along the South line of the North half of Section 
33, a distance of 1062.26 feet;
thence N 00DEG.50'25" E a distance of 1475.80 feet;
thence N 56DEG.57'07" W a distance of 3202.16 feet;
thence N 21DEG.08'57" W a distance of 2657.54 feet;
thence along the following fifteen courses along Dawson Ridge Filing B;

                                     2



<PAGE>

     1.  N 77 DEG. 53'15" E, non-tangent to the following described curve, a 
         distance of 42.72 feet;
     2.  along the arc of a curve to the right, having a central angle of 89 
         DEG. 23'40", a radius of 41.00 feet, the chord of which bears S 26 DEG.
         49'54" W a distance of 57.68 feet and an arc length of 63.97 feet;
     3.  N 71 DEG. 31'44" E, tangent to the previously described curve, a 
         distance of 146.27 feet;
     4.  N 70 DEG. 13'51" E a distance of 110.35 feet;
     5.  N 71 DEG. 31'4" E, tangent to the following described curve, a 
         distance of 160.53 feet;
     6.  along the arc of a curve to the right, having a central angle of 51 
         DEG. 49'07", a radius of 908.07 feet, the chord of which bears N 82
         DEG. 33'43" W a distance of 793.56 feet and an arc length of 821.26 
         feet;
     7.  S 51 DEG. 57'48" E, tangent to the previously and following described 
         curves, a distance of 105.49 feet;
     8.  along the arc of a curve to the right, having a central angle of 01 
         DEG. 47'42", a radius of 905.57 feet, the chord of which bears N 49 
         DEG. 05'17" W a distance of 28.37 feet and an arc length of 28.37 feet;
     9.  S 48 DEG. 11'26" E, tangent to the previously and following described 
         curves, a distance of 101.79 feet;
    10.  along the arc of a curve to the right, having a central angle of 87 
         DEG. 30'40", a radius of 40.00 feet, the chord of which bears S 04 DEG.
         26'06" E a distance of 55.33 feet and an arc length of 61.09 feet;
    11.  S 47 DEG. 39'40" E non-tangent to the previously and following 
         described curves, a distance of 120.18 feet;
    12.  along the arc of a curve to the right, having a central angle of 92 
         DEG. 40'47", a radius of 40.00 feet, the chord of which bears N 85 DEG.
         27'55" E a distance of 57.88 feet and an arc length of 64.70 feet;
    13.  N 41 DEG. 48'34" E, non-tangent to the previously and following 
         described curves, a distance of 80.00 feet;
    14.  along the arc of a curve to the right, having a central angle of 92 
         DEG. 41'18", a radius of 40.00 feet, the chord of which bears N 01 DEG.
         50'31" W a distance of 57.88 feet and an arc length of 64.71 feet to a
         point of compound curvature;
    15.  along a curve, to the right having a central angle of 09 DEG. 19'56", 
         a radius of 1740.00 feet, the chord of which bears N 49 DEG. 10'21" E
         a distance of 283.09 feet and an arc length of 283.40 feet;

thence along the following five courses along Dawson Ridge Filing A:

     1.  S 36 DEG. 09'41" E, non-tangent to the previously described curve, a 
         distance of 10.00 feet;
     2.  N 53 DEG. 50'19" E, tangent to the following described curve, a 
distance of 1060.41 feet;

                                     3

<PAGE>

     3.  along the arc of a curve to the left having a central angle of 21 
         DEG. 00'00", a radius of 2170.00 feet, the chord of which bears N 43
         DEG. 20'19" E, a distance of 790.90 feet and an arc length of 795.35
         feet;
     4.  N 32 DEG. 50'19" E, tangent to the previously and following described 
         curves, a distance of 2182.25 feet;
     5.  along the arc of a curve to the left, having a central angle of 12 
         DEG. 18'29", a radius of 1870.00 feet, the chord of which bears N 26
         DEG. 41'04" E a distance of 400.94 feet and an arc length of 401.71
         feet to the point of beginning;

EXCEPTING from the above parcel the following two parcels:

Exception 3:

A parcel of land located in a portion of Section 28, Township 8 South, Range 
67 West of the Sixth Principal Meridian, City of Castle Rock, Douglas County, 
Colorado, being more particularly described as follows:

COMMENCING at the Southeast corner of said Section 28, whence the Northeast 
corner of said Section 28 bears N 00 DEG. 22'18" W a distance of 5302.75 feet;
thence N 62 DEG. 23'09" W a distance of 660.85 feet, to the point of beginning;
thence S 63 DEG. 50'19" W a distance of 144.71 feet;
thence N 26 DEG. 09'41" W a distance of 208.00 feet;
thence N 63 DEG. 50'19" E, non-tangent to the following described curve, a 
distance of 251.43 feet;

thence along the arc of a curve to the right, having a central angle of 29 
DEG. 26'30", a radius of 460.00 feet, the chord of which bears S 00 DEG. 
59'57" W a distance of 233.78 feet and an arc length of 236.37 feet to the 
point of beginning;

Exception 4:

A parcel of land located in a portion of Section 28, Township 8 South, Range 
67 West of the Sixth Principal Meridian, City of Castle Rock, Douglas County, 
Colorado, being more particularly described as follows:

COMMENCING at the Southwest corner of said Section 28, whence the North corner 
of said Section 28 bears N 00 DEG. 11'08" W a distance of 5299.57 feet;
thence N 58 DEG. 37'49" E a distance of 3415.73 feet, to the point of 
beginning;
thence N 04 DEG. 01'05" E a distance of 208.84 feet;
thence S 87 DEG. 59'38" E a distance of 208.71 feet;
thence S 04 DEG. 01'05" W a distance of 208.84 feet;
thence N 87 DEG. 59'38" W a distance of 208.71 feet to the point of beginning

                                     4



<PAGE>

                                                                EXHIBIT 23.1


                   CONSENT OF JOSEPH DECOSIMO AND COMPANY, LLP


We consent to the reference to our firm under the caption "Experts" in the 
Registration Statement (Form S-4) and related Prospectus of BFC Guaranty 
Corp. and Castle Rock Ranch Public Improvements Authority, respectively, for 
the registration and guarantee of $66,975,000 par value of Public Facilities 
Revenue Bonds, Series 1996B, and to the inclusion herein of our reports dated 
November 19, 1996, except for the subsequent events notes as to which the 
date is December 13, 1996, with respect to the financial statements of BFC 
Guaranty Corp. and Castle Rock Ranch Public Improvements Authority for the 
period from March 29, 1996 to October 31, 1996, filed with the Securities and 
Exchange Commission.


                                       /s/ JOSEPH DECOSIMO AND COMPANY, LLP
                                       --------------------------------------
                                           Joseph DeCosimo and Company
                                           A Tennessee Registered Limited 
                                           Liability Partnership



Chattanooga, Tennessee
December 13, 1996







WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<TABLE> <S> <C>

<PAGE>
<ARTICLE> 5
       
<S>                             <C>
<PERIOD-TYPE>                   OTHER
<FISCAL-YEAR-END>                          DEC-31-1996
<PERIOD-END>                               OCT-31-1996
<CASH>                                           1,000
<SECURITIES>                                         0
<RECEIVABLES>                                        0
<ALLOWANCES>                                         0
<INVENTORY>                                          0
<CURRENT-ASSETS>                                     0
<PP&E>                                               0
<DEPRECIATION>                                       0
<TOTAL-ASSETS>                               5,554,882
<CURRENT-LIABILITIES>                                0
<BONDS>                                              0
                                0
                                          0
<COMMON>                                         1,000
<OTHER-SE>                                     220,534
<TOTAL-LIABILITY-AND-EQUITY>                 5,554,882
<SALES>                                              0
<TOTAL-REVENUES>                               334,143
<CGS>                                                0
<TOTAL-COSTS>                                        0
<OTHER-EXPENSES>                                     0
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                                   0
<INCOME-PRETAX>                                334,143
<INCOME-TAX>                                   113,609
<INCOME-CONTINUING>                            220,534
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                   220,534
<EPS-PRIMARY>                                   147.02
<EPS-DILUTED>                                   147.02
        

</TABLE>

<TABLE> <S> <C>

<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE OCTOBER
31, 1996 FINANCIAL STATEMENTS OF CASTLE ROCK RANCH PUBLIC IMPROVEMENTS
AUTHORITY AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL 
STATEMENTS.
</LEGEND>
<CIK> 0001028934
<NAME> BFC GARUANTY
       
<S>                             <C>
<PERIOD-TYPE>                   OTHER
<FISCAL-YEAR-END>                          DEC-31-1996
<PERIOD-START>                             MAR-29-1996
<PERIOD-END>                               OCT-31-1996
<CASH>                                         229,285
<SECURITIES>                                 7,562,755
<RECEIVABLES>                                        0
<ALLOWANCES>                                         0
<INVENTORY>                                          0
<CURRENT-ASSETS>                                     0
<PP&E>                                      54,550,000
<DEPRECIATION>                                       0
<TOTAL-ASSETS>                              68,178,153
<CURRENT-LIABILITIES>                                0
<BONDS>                                     67,685,828
                                0
                                          0
<COMMON>                                             0
<OTHER-SE>                                 (2,262,476)
<TOTAL-LIABILITY-AND-EQUITY>                68,178,153
<SALES>                                              0
<TOTAL-REVENUES>                               267,340
<CGS>                                                0
<TOTAL-COSTS>                                        0
<OTHER-EXPENSES>                               123,172
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                           2,406,644
<INCOME-PRETAX>                            (2,262,476)
<INCOME-TAX>                                         0
<INCOME-CONTINUING>                        (2,262,476)
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                               (2,262,476)
<EPS-PRIMARY>                                        0
<EPS-DILUTED>                                        0
        

</TABLE>


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