PUBLIC PURPOSE MASTER LEASE. dated as of September 26, between GEORGIA MUNICIPAL ASSOCIATION, INC., as Lessor, and CITY OF JOHNS CREEK, GEORGIA,

Transcription

1 PUBLIC PURPOSE MASTER LEASE dated as of September 26, 2017 between GEORGIA MUNICIPAL ASSOCIATION, INC., as Lessor, and CITY OF JOHNS CREEK, GEORGIA, as Lessee

2 TABLE OF CONTENTS (This Table of Contents is not a part of this Public Purpose Master Lease, but is only for convenience of reference.) Page ARTICLE I DEFINITIONS DEFINITIONS...2 ARTICLE II DEMISE DEMISE OF THE PROJECT...5 ARTICLE III TERM OF THE LEASE COMMENCEMENT AND RENEWAL OF THE TERM OF THE LEASE EXPIRATION OR TERMINATION OF THE TERM OF THE LEASE EFFECT ON THE LESSEE OF EXPIRATION OR TERMINATION OF THE TERM OF THE LEASE...6 ARTICLE IV RENTALS PAYABLE RENTALS PAYABLE CONSIDERATION COVENANT TO REQUEST APPROPRIATIONS LIMITATIONS ON LIABILITY BASE RENTALS ASSIGNED; UNCONDITIONAL OBLIGATION PAYMENT CREDIT ON BASE RENTALS APPLICATION OF BASE RENTALS AND OPTION PRICE NONAPPROPRIATION; VACATING THE PROJECT ADVANCES BY THE TRUSTEE LEASE NOT TO CONSTITUTE TRUE LEASE OPTIONAL PREPAYMENT...13 ARTICLE V ACQUISITION, CONSTRUCTION AND FINANCING OF THE PROJECT ACQUISITION AND CONSTRUCTION OF THE PROJECT COMPLIANCE WITH STATE HANDICAP CODE AND ADA REIMBURSEMENTS TO LESSEE CHANGES IN PROJECT REQUIRED PROVISIONS OF CONSTRUCTION CONTRACTS; RIGHT TO INSPECT PROJECT DOCUMENTS REMEDIES AGAINST CONTRACTORS AND VENDORS FINANCING OF THE CONSTRUCTION OF THE PROJECT DISBURSEMENTS FROM THE ACQUISITION FUND; ESTABLISHMENT OF COMPLETION DATE INVESTMENT OF CERTIFICATE PAYMENT FUND, INSURANCE FUND AND ACQUISITION FUND i -

3 5.10. SPECIAL ARBITRAGE CERTIFICATIONS...18 ARTICLE VI MAINTENANCE AND OPERATION MAINTENANCE AND OPERATION CARE OF THE PROJECT LOSS AND DAMAGE PUBLIC LIABILITY...20 ARTICLE VII INSURANCE PROVISIONS INSURANCE ARTICLE VIII TAXES TAXES ARTICLE IX ALTERATIONS, ADDITIONS AND IMPROVEMENTS ALTERATIONS, ADDITIONS AND IMPROVEMENTS TITLE TO ALTERATIONS, ADDITIONS AND IMPROVEMENTS LESSEE S EQUIPMENT ARTICLE X DAMAGE OR DESTRUCTION; CONDEMNATION DAMAGE, DESTRUCTION AND CONDEMNATION ARTICLE XI ASSIGNMENTS ASSIGNMENTS BY LESSEE ASSIGNMENTS BY LESSOR REPLACEMENT OF THE LESSOR SUBORDINATION AND ATTORNMENT PROHIBITED TRANSFERS VOID...28 ARTICLE XII REPRESENTATIONS, COVENANTS AND WARRANTIES REPRESENTATIONS, COVENANTS AND WARRANTIES OF THE LESSEE REPRESENTATIONS, COVENANTS AND WARRANTIES OF THE LESSOR TAX COVENANTS OF THE LESSEE AND THE LESSOR...32 ARTICLE XIII AMENDMENTS AMENDMENTS, CHANGES AND MODIFICATIONS...33 ARTICLE XIV TITLE AND OPTION TO PURCHASE PROJECT VESTING OF TITLE OPTION TO PURCHASE PROJECT RELATIVE POSITION OF PURCHASE OPTION AND THE INDENTURE CONVEYANCE ON PURCHASE...34 ARTICLE XV RIGHT OF ENTRY; LIENS; QUIET ENJOYMENT RIGHT OF ENTRY LIENS COVENANT OF QUIET ENJOYMENT ii -

4 ARTICLE XVI EVENTS OF DEFAULT; REMEDIES EVENTS OF DEFAULT DEFINED REMEDIES OF DEFAULT OR EVENT OF NONAPPROPRIATION SURRENDER OF PROJECT LIMITATIONS ON REMEDIES REMEDIES CUMULATIVE WAIVER CURING LESSEE S BREACH...38 ARTICLE XVII MISCELLANEOUS NOTICES GOVERNING LAW LESSEE S OBLIGATION TO OPERATE EXECUTION IN COUNTERPARTS SEVERABILITY SUCCESSORS AND ASSIGNS; THIRD PARTY BENEFICIARIES LIMITATION OF WARRANTY CAPTIONS AND HEADINGS NET LEASE PROVISION FOR PAYMENT REPORTING REQUIREMENTS CERTAIN PAYMENTS LESSEE S ACKNOWLEDGMENT OF OBLIGATIONS UNDER AND CONSENT TO CERTAIN PROVISIONS IN INDENTURE NO LIABILITY OF DIRECTORS, MEMBERS, OFFICERS AND EMPLOYEES OF LESSOR...41 EXHIBIT A Site Description EXHIBIT B Facilities Description SCHEDULE I Schedule of Base Rental Payments SCHEDULE II Option Price Schedule - iii -

5 PUBLIC PURPOSE MASTER LEASE THIS PUBLIC PURPOSE MASTER LEASE, dated as of September 26, 2017 (this Lease ), is by and between GEORGIA MUNICIPAL ASSOCIATION, INC., a Georgia nonprofit corporation (the Lessor ), and CITY OF JOHNS CREEK, GEORGIA, a municipal corporation of the State of Georgia (the Lessee ). W I T N E S S E T H: WHEREAS, the Lessor, as ground lessee, will ground lease certain real estate located in City of Johns Creek, Georgia, consisting of an approximately 6.67-acre site located at Lakefield Drive, Johns Creek, Georgia, as more particularly described in Exhibit A attached hereto (the Site ), from the Lessee, as owner and ground lessor, pursuant to the hereinafterdefined Ground Lease; and WHEREAS, the Lessee desires to lease certain real property improvements to include a new City Hall and related facilities, as more particularly described in Exhibit B attached hereto (collectively, the Facilities ), and furniture, fixtures and equipment (collectively, the Equipment ), to be acquired, constructed, equipped and installed by the Lessor on the Site; and WHEREAS, the Lessor is willing to lease the Facilities to be acquired, constructed, equipped and installed on the Site to the Lessee, and the Lessee desires to lease the same from the Lessor, upon the terms and conditions and for the purposes set forth herein; and and WHEREAS, the Lessor is empowered to enter into this Lease pursuant to applicable law; WHEREAS, the Lessee is empowered to enter into this Lease pursuant to applicable law, including particularly O.C.G.A , as amended; NOW THEREFORE, for and in consideration of the mutual promises and agreements herein contained, the parties hereto agree as follows:

6 ARTICLE I DEFINITIONS Definitions. All words and phrases defined in Article I of the Indenture shall have the same meanings in this Lease. In addition, the following terms shall have the following meanings for all purposes of this Lease: Additional Rentals shall mean the amount or amounts payable by the Lessee pursuant to Section 4.01(b) hereof. Agency Agreement shall mean that certain Agency Agreement, dated as of even date herewith, between the Lessor and the Lessee, designating the Lessee as the Lessor s agent for purposes of causing the acquisition and construction of the Facilities on the Site and the acquisition of Equipment. Authorized Lessee Representative shall mean the person or persons at the time designated, by written certificate furnished to the Lessor and the Trustee, as the person or persons authorized to act on behalf of the Lessee. Such certificate shall contain the specimen signature of such person or persons, shall be signed on behalf of the Lessee by the Mayor and may designate an alternate or alternates. The Authorized Lessee Representative may, but need not be, an employee of the Lessee. Authorized Lessor Representative shall mean the person or persons at the time designated, by written certificate furnished to the Lessee and the Trustee, as the person or persons authorized to act on behalf of the Lessor. Such certificate shall contain the specimen signature of such person or persons, shall be signed on behalf of the Lessor by its Interim Executive Director and may designate an alternate or alternates. The Authorized Lessor Representative may, but need not be, an employee of the Lessor. Base Rental Payment Commencement Date shall mean March 1, 2018, which is the date on which the Lessee becomes obligated to commence payment of Base Rentals hereunder pursuant to Section 4.01(a) hereof. Breakage Premium shall mean the sum of the differences between (a) each scheduled interest payment which would have been made on the prepaid amount of the Series 2017 Certificates if such prepayment had not occurred, and (b) the corresponding fixed-rate interest payment which would be received under an interest rate swap which the Certificateholders shall be deemed to have entered into as of the date of such prepayment (the Replacement Swap ) covering their payment obligations under an interest rate swap which the Certificateholders shall be deemed to have entered into on the date of original issuance of the Series 2017 Certificates, with each such difference discounted to a present value as of the date of prepayment using the fixed interest rate of the Replacement Swap as the applicable discount rate. The Lessee acknowledges that the Certificateholders might not fund or hedge their fixed-rate loan portfolios or any prepayment thereof on a loan-by-loan basis at all times, and agrees that the foregoing is a reasonable and appropriate method of calculating liquidated damages for any applicable prepayment irrespective of whether any of the foregoing hedging transactions have in fact - 2 -

7 occurred or occurred precisely as stated with respect to the Series 2017 Certificates. All calculations and determinations by the Certificateholders of the amounts payable pursuant to the preceding provisions or of any element thereof, if made in accordance with its then standard procedures for so calculating or determining such amounts, shall be conclusive absent manifest arithmetic error. Construction Contract shall mean any construction or similar contract or contracts between the Lessee (acting in its capacity as the Lessor s agent pursuant to the Agency Agreement) and any contractor and between any contractor or subcontractor and his or her immediate subcontractor regarding construction of the Facilities and/or acquisition of Equipment, a copy of each of which is or will be on file with the Lessee. Event of Default shall mean one or more of the events described in Section hereof. Event of Nonappropriation shall have the meaning specified in Section 4.09(a) hereof. Fiscal Year shall mean the 12-month period extending from October 1 to the next succeeding September 30. Indenture shall mean that certain Indenture of Trust and Assignment of Public Purpose Master Lease, dated as of even date herewith, between Georgia Municipal Association, Inc., as Trustor, and Regions Bank, as Trustee, and any amendments and supplements thereto as therein permitted. Initial Term shall have the meaning specified in Section 3.01 hereof. Lease shall mean this Public Purpose Master Lease, and any amendments and supplements hereto as permitted herein and in the Indenture. Lessee shall mean the City of Johns Creek, Georgia, or any successor or assign. Lessor shall mean Georgia Municipal Association, Inc., or its successor or assign. Permitted Encumbrances shall mean, as of any particular time, (i) liens for taxes and assessments not then delinquent or which the Lessee may, pursuant to the provisions of Section 8.01 hereof, permit to remain unpaid; (ii) this Lease, the Indenture and the Security Agreement and any financing statements naming the Lessor or the Lessee as debtor and naming the Lessor or the Trustee as secured party now or hereafter filed to perfect the security interests granted by the Indenture or the Security Agreement; and (iii) utility, access and other easements and rights-of-way, restrictions and exceptions that an Authorized Lessee Representative certifies to the Trustee will not interfere with or impair the Project. Plans and Specifications shall mean the plans and specifications prepared for and showing the Project, as and when they are approved by the Lessee, the same being duly certified by an Authorized Lessee Representative, which plans and specifications shall be on file at the - 3 -

8 City of Johns Creek administrative offices, and shall be available for reasonable inspection by the Lessor, the Trustee and their duly authorized representatives. Project shall mean, collectively, the Facilities, the Equipment and the Site. Project Documents shall mean (i) the Plans and Specifications, including changes (if any) as permitted by Section 5.04 hereof; (ii) a survey of the Site, prepared by a registered land surveyor in accordance with standard requirements for land title surveys, showing the location of all improvements, easements, encroachments and other encumbrances on the Site; (iii) any necessary permits for construction of the Facilities, including any building permits and certificates of occupancy; (iv) the Construction Contracts; (v) policies of title, casualty, public liability and workers compensation insurance, or certificates thereof, as required by this Lease with respect to the Project; (vi) performance and payment bonds with respect to the Facilities; (vii) the executed contract with the architect hired by the Lessee in connection with the preparation of the Plans and Specifications; and (viii) any and all other documents executed by or furnished to the Lessee in connection with the construction, acquisition, equipping or installing of the Project. Renewal Term shall have the meaning specified in Section 3.01 hereof. Rentals shall mean the total amount of the Base Rentals and the Additional Rentals payable during each Renewal Term hereunder. Term of the Lease or term of this Lease shall have the meaning specified in Sections 3.01 and 3.02 hereof

9 ARTICLE II DEMISE Demise of the Project. The Lessor does hereby rent, lease and demise to the Lessee, and the Lessee does hereby take, accept and lease from the Lessor, the Project, subject to Permitted Encumbrances, on the terms and conditions and for the purposes herein set forth, together with all easements, rights and appurtenances in connection therewith or thereto belonging, to have and to hold for the term of the Lease

10 ARTICLE III TERM OF THE LEASE Commencement and Renewal of the Term of the Lease. The initial term of this Lease shall commence on the date of delivery hereof, and shall expire at midnight on September 30, 2017 (the Initial Term ). The term of this Lease shall automatically renew on each October 1 for fourteen (14) additional and consecutive one-year renewal terms beginning October 1 and ending on September 30 of each successive year through and including September 30, 2031, and one final renewal term beginning on October 1, 2031 and ending on August 31, 2032, or such later date as may be provided in connection with the issuance of Additional Certificates (herein referred to individually as the Renewal Term and collectively as the Renewal Terms ), unless there shall occur an Event of Nonappropriation. The terms and conditions of this Lease during any Renewal Term shall be the same as the terms and conditions during the Initial Term, except that the Base Rentals and the Option Prices will be as specified in Schedule I and Schedule II attached hereto, respectively, for each such Renewal Term, as such Schedules may be revised as provided in Section 6.7 of the Indenture. Notwithstanding anything in this Lease to the contrary, this Lease expires absolutely and without further obligation on the part of the Lessee at the end of the Initial Term or the last Renewal Term for which it is renewed. The Lessee may cause this Lease not to be renewed for the next Renewal Term by delivery of written notice to the Trustee, prior to September 1 of the current Renewal Term, stating the Lessee s intention not to renew this Lease. The parties intend that this Lease operate in conformity with, and not in contravention of, O.C.G.A In the event that any provision of this Lease is determined to conflict with O.C.G.A , this Lease shall be conformed, interpreted and implemented in a manner consistent with said statute Expiration or Termination of the Term of the Lease. The term of the Lease will expire or terminate, as appropriate, as described in Section 3.03 hereof upon the first to occur of any of the following events: (a) the expiration of the Initial Term or any Renewal Term during which there occurs an Event of Nonappropriation (which is not thereafter waived by the Trustee as herein provided); (b) an Event of Default and a termination of the term of the Lease by the Trustee as herein provided; or (c) discharge of the Indenture as therein provided. The Lessee will provide to the Trustee prompt written notice of any Event of Nonappropriation Effect on the Lessee of Expiration or Termination of the Term of the Lease. The expiration or termination of the term of the Lease as to the Lessee pursuant to Section 3.02 hereof shall terminate all obligations of the Lessee hereunder (except to the extent that the Lessee shall have incurred any obligation to pay Rentals from moneys theretofore appropriated and available for such purpose through the last day of the portion of the Renewal Term during which the Lessee continues or continued to occupy the Project, and excepting amounts previously accrued during the term of this Lease and then owing to the Trustee) and shall terminate the Lessee s rights of use and occupancy of the Project; provided, however, that all other terms of this Lease and the Indenture, including all obligations of the Trustee with respect to the holders of the Certificates and the receipt and disbursement of funds, shall be continuing until the lien of the Indenture is discharged, as provided in the Indenture. The termination or expiration of the term of the Lease as to the Lessee pursuant to Section 3.02 hereof, of itself, shall not discharge the lien of the Indenture. Nothing herein shall be construed to terminate the - 6 -

11 obligations of the Trustee provided in Section hereof upon the expiration or termination of the term of the Lease as to the Lessee as provided in Section 3.02 hereof

12 ARTICLE IV RENTALS PAYABLE Rentals Payable. For the Initial Term and each Renewal Term for which this Lease is renewed, the Lessee shall pay the Base Rentals and the Additional Rentals in the amounts, at the times and in the manner set forth herein, said amounts constituting in the aggregate the total obligation of the Lessee incurred and payable under this Lease during such Initial Term or Renewal Term, as follows: (a) Base Rentals. The Lessee agrees, subject to the availability of appropriations of funds by it therefor and otherwise subject to the limitations of Section 4.04 hereof, to pay to the Trustee, for the account of the Lessor as provided in Section 4.06 hereof in arrears for the Initial Term and for each Renewal Term, Base Rentals in the respective semiannual installments and on the respective March 1 and September 1 of each year as indicated in the Schedule of Base Rental Payments attached as Schedule I hereto, commencing on the Base Rental Payment Commencement Date. Each Base Rental payment made on September 1 shall comprise both a principal component and an interest component (calculated on the basis of a year of 360 days consisting of twelve 30-day months), and each Base Rental payment made on March 1 shall comprise only an interest component (also calculated on the basis of a year of 360 days consisting of twelve 30-day months), all as more particularly set forth in Schedule I. Notwithstanding the foregoing, after the occurrence and during the continuation of an Event of Default under the Indenture, the interest component of the Series 2017 Base Rentals shall be adjusted to reflect an interest rate equal to the Default Rate, as such term is defined in the Indenture. Further, notwithstanding the foregoing, Series 2017 Base Rentals shall be adjusted to reflect any additional payments required on the Series 2017 Certificates as a result of a Determination of Taxability, as such term is defined in the Indenture. (b) Additional Rentals. In addition to the Base Rentals hereinabove set forth, and as part of the total Rentals payable during the Initial Term and each Renewal Term of the Lease, the Lessee shall pay on a timely basis, but only from legally available funds appropriated for such purposes, to the parties entitled thereto an amount or amounts (the Additional Rentals ) for such term to which the following items apply or relate, equivalent to the sum of the following (provided that the Lessee s liability to pay any Additional Rentals shall arise from and after the date of delivery hereof): (i) the annual fee of the Trustee for the ordinary services of the Trustee rendered and its ordinary expenses incurred under the Indenture; (ii) the reasonable fees and charges of the Trustee and any paying agent appointed under the Indenture with respect to the Certificates for acting as paying agent as provided in the Indenture; (iii) the reasonable fees and charges of the Trustee for extraordinary services rendered by it and extraordinary expenses incurred by it as Trustee under the Indenture; - 8 -

13 (iv) the reasonable fees, including but not limited to the annual administrative fee of the Lessor, and out-of-pocket expenses and liabilities of the Lessor relating to the Project not otherwise required to be paid by the Lessee under the terms of this Lease; (v) the costs of maintenance, operation and repair with respect to the Project and utility charges as required under Article VI hereof; (vi) the costs of insurance as required under Article VII hereof; (vii) the costs of taxes and governmental charges and assessments as required under Article VIII hereof; (viii) an amount equal to any franchise, succession, capital levy or transfer tax, or any income, excess profits or revenue tax, or any other tax, assessment, charge or levy (however denominated) levied, assessed or imposed by the State of Georgia or any political subdivision or municipal corporation thereof upon the Base Rentals payable hereunder or the Option Price (if paid) or upon the Project; (ix) any amount of interest required to be paid on any of the foregoing items as a result of the Lessee s failure to pay any such items when due, as required by Section 4.06 hereof; (x) the costs associated with the cleanup or removal of hazardous substances; and (xi) any other fees, costs, levies, charges, taxes, assessments or expenses that the Lessor is required or is authorized to pay in connection with this Lease, the Certificates or the Project, including any sums incurred under Section hereof Consideration. The payments of Base Rentals and Additional Rentals hereunder for each Renewal Term during the term of the Lease shall constitute the total Rentals for said Renewal Term and shall be paid by the Lessee for and in consideration of the right of use and occupancy of the Project and the continued quiet use and enjoyment of the Project for and during said Renewal Term. The parties hereto have agreed and determined that such total Rentals represent the fair rental value of the Project. In making such determination, consideration has been given to the costs of financing the acquisition, construction, equipping and installation of the Site and the Facilities, the uses and purposes which will be served by the Project and the benefits therefrom which will accrue to the parties to this Lease and the general public by reason of the Project. The Rentals due on any March 1 will be in consideration of the right of use and occupancy of the Project by the Lessee for the six-month period September 1 through February 28 (or 29), and the Rentals due on any September 1 will be in consideration of the right of use and occupancy of the Project by the Lessee for the immediately preceding six-month period March 1 through August

14 4.03. Covenant to Request Appropriations. (a) During the term of the Lease, the Lessee covenants and agrees that it will cause its budget officer (i) to include in the budget for adoption by the City Council a request or requests for the amount necessary to pay the Base Rentals and the reasonably estimated Additional Rentals for the Project during the next succeeding Renewal Term, and (ii) to take such further action (or cause the same to be taken) as may be necessary or desirable to assure the availability of moneys appropriated to pay such Base Rentals and Additional Rentals for each such Renewal Term, including all such actions for such purpose as may be required under O.C.G.A Requests for appropriations by the Lessee shall be made so that sufficient appropriation moneys for the payment of the Base Rentals to be paid on March 1 and September 1 of the succeeding Renewal Term and Additional Rentals payable during such Renewal Term will be available for such purposes. The Lessee will adopt its annual budget no later than 30 days after the end of its Fiscal Year. (b) The Lessee further covenants to notify the Trustee in writing prior to the end of the current Renewal Term during the term of the Lease as to the amount appropriated by it for such Base Rentals and reasonably estimated Additional Rentals and stating, if such is the case, the amount of any deficiency in such appropriation and whether or not the Lessee believes such deficiency will cause it to be unable to pay Rentals coming due hereunder during the next succeeding Renewal Term Limitations on Liability. (a) Nothing herein shall be construed to require the City Council, being the governing body of the Lessee, to appropriate any money to pay any Rentals or the Option Price hereunder. If the Lessee fails to pay any portion of the Rentals due hereunder or if an Event of Default or an Event of Nonappropriation occurs hereunder, the Lessee will (but in no event earlier than the expiration of the Initial Term or the then-current Renewal Term for which the Lessee has paid or appropriated moneys sufficient to pay all Rentals due for such term of the Lease, in the case of an Event of Nonappropriation) quit and vacate the Project in accordance with Section 4.09(b) hereof, and its obligation to pay Rentals (except for Rentals theretofore appropriated and available for such purpose through the last day of the portion of the Renewal Term or prior Renewal Term during which the Lessee occupies or continues to occupy the Project) and the other obligations of the Lessee hereunder (excepting amounts previously accrued during the term of this Lease and then owing to the Trustee) shall thereupon cease, it being understood between the parties that neither the State of Georgia nor any municipal corporation thereof, except the Lessee as provided herein, is obligated to pay any Rentals due to the Lessor or the Option Price hereunder. Should the Lessee fail to pay any portion of the required Rentals and then fail to quit and vacate the Project in accordance with Section 4.09(b) hereof, the Lessor or the Trustee in accordance with the Indenture may immediately bring legal action to evict the Lessee from the Project (but not for money damages except as hereinafter provided) and exercise its remedies with regard to the Project in accordance with the Indenture and the Security Agreement. No judgment may be entered against the Lessee or the State of Georgia for failure to pay any Rentals or the Option Price hereunder, except to the extent that the Lessee has theretofore incurred liability to pay any such Rentals through its actual use and

15 occupancy of the Project or through its lawful appropriations of, and payment when due of, Rentals relating to such use. (b) The Rentals constitute current expenses of the Lessee, and the Lessee s obligations hereunder are from year to year only and do not constitute a mandatory payment obligation of the Lessee in any ensuing Fiscal Year beyond the current Fiscal Year in contravention of O.C.G.A No provision hereof shall be construed or interpreted as creating a general obligation or other indebtedness of Lessee or the State of Georgia, within the meaning of any constitutional or statutory debt limitation. Neither the execution, delivery and performance of this Lease, nor the issuance of the Certificates, directly or indirectly obligates the Lessee to make any payments of Rentals hereunder beyond those appropriated for the Lessee s then-current Fiscal Year. (c) No obligation assumed by or imposed upon the Lessor hereunder shall require the performance of any act by the Lessor except to the extent, if any, that the full cost and expense of such performance is provided for from the proceeds of the sale of the Certificates or paid by the Lessee hereunder as Additional Rentals or from any other lawful source available to the Lessee Base Rentals Assigned; Unconditional Obligation. It is understood and agreed that all Base Rentals payable under Section 4.01(a) hereof by the Lessee are absolutely, unconditionally and irrevocably assigned to the Trustee pursuant to the Indenture. The Lessee assents to such assignment, and hereby agrees that its obligation to pay the Base Rentals and the Additional Rentals from legally available funds appropriated for such purpose shall be absolute and unconditional and shall not be subject to acceptance, abatement, damage, destruction or condemnation relating to the Project or any defense or any right of set-off, counterclaim or recoupment arising out of any breach by the Lessor of any obligation to the Lessee, whether hereunder or otherwise, out of any indebtedness or liability at any time owing to the Lessee by the Lessor or by the failure of the completion of the Project. Notwithstanding any dispute between the Lessee and the Lessor hereunder, the Lessee shall pay all Rentals when due and shall not withhold payment of any Rentals pending the final resolution of such dispute. In the event of a determination that the Lessee was not liable for payment of such Rentals or any portion thereof, said payments or excess of payments, as the case may be, shall be credited by the Trustee against subsequent payments of Rentals due hereunder Payment. Each Base Rental payment and each Additional Rental payment shall be paid in lawful money of the United States of America, by check drawn against funds of the Lessee. Each Base Rental payment shall be paid at the designated corporate trust office of the Trustee in Atlanta, Georgia, or at such other place or places as may be set forth in the Indenture. Each Additional Rental payment shall be paid at the appropriate office as designated by the respective payees entitled to receive such Additional Rental. Each Base Rental payment and each Additional Rental payment which is not paid when due shall bear interest at the rate of eight percent (8%) per annum from the date on which the Base Rental payment or Additional Rental payment, as the case may be, becomes due until the same is paid

16 4.07. Credit on Base Rentals. (a) There shall be credited against Base Rentals any amount held in the Certificate Payment Fund on the February 10 and August 10 next preceding each Certificate Payment Date, including earnings derived from the investment of funds held in the Certificate Payment Fund available for such purpose. (b) If at any time, and so long as, the aggregate amount of moneys available under the Indenture shall be sufficient to pay (i) the Distributions on the Certificates as the same become due, (ii) all other expenses under the Indenture (including without limitation the fees and charges of the Trustee and any paying agent and the costs and expenses of the Lessor due or to become due through the date on which the last of the Certificates is to be paid), and (iii) any other monetary obligations of the Lessee hereunder (including the fees and charges of the Lessor), and if the Lessee is not at the time otherwise in default on any obligation hereunder, the Lessee shall be entitled to use and occupy the Project from the date on which such aggregate moneys are deposited with the Trustee during the remainder of the term of this Lease without further payment of any Base Rentals during that interval (but otherwise on the terms and conditions hereof) Application of Base Rentals and Option Price. All Base Rentals and, if paid by the Lessee, the Option Price shall be paid to the Trustee for application in accordance with the Indenture Nonappropriation; Vacating the Project. (a) In the event that (i) sufficient funds are not appropriated by the City Council prior to the beginning of any Renewal Term (or a notice to that effect has been given to the Trustee pursuant to Section 4.03(b) hereof) for the payment of the Base Rentals and reasonably estimated Additional Rentals payable during such Renewal Term, or are otherwise not available for such purpose or (ii) the Trustee receives notice from the Lessee pursuant to Section 3.01 that the Lessee determines not to renew this Lease for the succeeding Renewal Term, then an Event of Nonappropriation shall be deemed to have occurred. An Event of Nonappropriation shall also be deemed to have occurred (subject to waiver by the Trustee as hereinafter described) if, during the Initial Term or any Renewal Term, any Additional Rentals shall become due, and funds are not legally available to the Lessee to pay such Additional Rentals within thirty (30) days after they are due. The Trustee may, unless otherwise directed by the holders of a majority in aggregate principal amount of the Certificates then outstanding, waive any Event of Nonappropriation which is cured by the Lessee within a reasonable time if, in the Trustee s sole discretion, such waiver is in the best interests of the holders of the Certificates, and the Trustee will waive an Event of Nonappropriation if so directed by the holders of a majority in aggregate principal amount of the Certificates. If an Event of Nonappropriation shall occur, the Lessee shall not be obligated to make payment of the Base Rentals or Additional Rentals provided for herein beyond the last day of the Renewal Term during which such Event of Nonappropriation occurs; provided, however, if an Event of Nonappropriation occurs and the Lessee continues to occupy the Project, the Lessee shall continue to be liable for the portion of the Base Rentals and Additional Rentals which would have been payable during such Renewal Term equal to the portion of such Renewal Term (or

17 prior Renewal Term if the Lessee s occupancy lasts beyond a single Renewal Term) during which the Lessee continues to occupy the Project, subject to the availability of sufficient legally available funds for such purpose. The Trustee shall, upon the occurrence of an Event of Nonappropriation, be entitled (subject to the limitations imposed on the Trustee pursuant to Section hereof) to take possession of the Project as trustee for the benefit of the holders of the Certificates and to sell or relet all or any portion of the Project and shall be further entitled to all moneys then on hand in all funds and accounts created under the Indenture less any moneys then due and owing to the Trustee for services performed as trustee. All property, funds and rights acquired by the Trustee upon the termination of this Lease by reason of an Event of Nonappropriation as provided herein shall be held by the Trustee under the Indenture for the benefit of the holders of the Certificates as set forth in the Indenture until the Distributions on the Certificates are paid in full and, after payment of all amounts due the Trustee and the Lessor, any excess shall thereafter be paid to the Lessee as provided in Section 4.11 of the Indenture. (b) The parties hereto agree that, upon the occurrence of an Event of Nonappropriation or an Event of Default, the Lessee shall have all responsibility for vacating the Site and the Facilities. The Lessee shall vacate the Site and the Facilities promptly upon an uncured Event of Default. If the Lessee fails to appropriate Base Rentals for the following Fiscal Year, the Lessee shall not be required to vacate the Site or the Facilities until the expiration of the current Renewal Term. (c) The Lessee will give notice of any Event of Nonappropriation within thirty (30) days of the occurrence thereof to the Trustee and to any holder of all of the Certificates Advances by the Trustee. If the Lessee fails to pay any Additional Rentals required by this Lease, the Trustee may, but shall be under no obligation to, pay such Rentals, which Rentals, together with interest thereon at the rate of eight percent (8%) per annum, are to be reimbursed to the Trustee by the Lessee within 15 days of the rendering of any bill or statement to the Lessee therefor; provided, however, nothing herein shall be construed to obligate the Lessee to pay such Rentals from any funds other than moneys legally available and appropriated for such purpose Lease Not to Constitute True Lease. It is the intention of the parties hereto that this Lease not constitute a true lease for federal income tax purposes, and, therefore, it is the intention of the parties hereto that the Lessee be considered the owner of the Project for federal income tax purposes, but not for Georgia law purposes relating to title and other matters as herein provided. To the extent lawfully permissible, the Lessee, and not the Lessor, is considered the owner of the Project for liability and insurance purposes Optional Prepayment. The Lessee shall have the option to direct the prepayment of any or all of the Series 2017 Certificates pursuant to Section 6.3 of the Indenture by providing 45 days advance written notice to the Trustee and making provision for the advance payment of sufficient Base Rentals to provide on the prepayment date selected by the Lessee the prepayment price of the Series 2017 Certificates to be prepaid, including accrued interest thereon and any Breakage Premium, if applicable

18 ARTICLE V ACQUISITION, CONSTRUCTION AND FINANCING OF THE PROJECT Acquisition and Construction of the Project. (a) The Lessor shall acquire the Site and shall construct or cause to be acquired, constructed and installed the Facilities on the Site and shall acquire or cause to be acquired the Equipment in accordance with the applicable Project Documents. For this purpose, the Lessor has entered into the Agency Agreement with the Lessee, as the Lessor s agent. A Construction Contract for the construction of the Facilities shall be awarded to a contractor licensed under the laws of the State of Georgia. All Construction Contracts shall be awarded after following the procedures required by the applicable laws of the State of Georgia relating to the awarding of contracts of a similar nature by the Lessee, including but not limited to the applicable provisions of the Georgia Local Government Public Works Construction Law, O.C.G.A through , as amended. The Lessor or its agent for this purpose shall require any contractor or contractors who are awarded a Construction Contract to provide a faithful performance bond and a separate labor and material payment bond, as appropriate. The proceeds from any such bond shall be transferred to the Trustee for deposit as provided in Section 5.05(g) hereof. Such bonds shall be made payable to the Trustee, shall be executed by a corporate surety licensed to transact business in the State of Georgia and acceptable to the Lessee and shall be in an amount equal to the contract price for such contractor s Construction Contract. If, at any time during the construction of the Facilities, the surety on such bond shall be disqualified from doing business within the State of Georgia, or shall otherwise become incapable of performing its obligations under such bond, an alternate surety acceptable to the Lessee and the Trustee shall be selected. In the event of any change order in accordance with Section 5.04 hereof, the amounts of such bonds pertaining thereto shall be increased to include the cost of any additional work or materials or fixtures to be incorporated in the Facilities. (b) In the event that the Facilities are not substantially completed, as evidenced by delivery of the Completion Certificate pursuant to Section 4.9 of the Indenture on or prior to September 15, 2020, or such later date as may be agreed by the Lessor and the Lessee, the Trustee may, but shall be under no obligation to, upon thirty (30) days written notice to the Lessee, complete the acquisition, construction, equipping and installation of the Facilities from any moneys then remaining in the Acquisition Fund. (c) If an Event of Nonappropriation or an Event of Default shall occur prior to the delivery of the Completion Certificate pursuant to Section 4.9 of the Indenture, the moneys remaining in the Acquisition Fund may be utilized by the Trustee to complete the acquisition, construction, equipping and installation of the Facilities or to prepay Certificates or, upon termination of the term of the Lease, may be disbursed as provided in Section 8.3 of the Indenture. (d) The Lessee hereby covenants, to the extent permitted by applicable law, to use other legally available funds and to seek additional legally available funds to the extent necessary, together with moneys then available for such purposes in the Acquisition Fund established in the Indenture to complete the acquisition, construction, equipping and installation

19 of the Project as herein required, or to make certain design changes in the Project (so long as such changes do not cause the Project to be used for purposes other than lawful governmental purposes of the Lessee) to the extent necessary to complete the acquisition, construction, equipping and installation of the Project. (e) The Lessee shall make all Construction Contracts and do all things necessary for the acquisition, construction, equipping and installation of the Project and shall use its best efforts to cause such acquisition, construction, equipping and installation of the Project to be completed by September 15, 2020, subject to Section 4.8(d) of the Indenture; but if for any reason such acquisition, construction and installation is not completed by said date, there shall be no diminution in or postponement of the Rentals provided by Section 4.01 hereof to be paid by the Lessee. (f) The Lessee hereby agrees that, in order to effectuate the purposes of this Lease, it will make, execute, acknowledge and deliver any contracts, orders, receipts, writings and instructions with any other persons, firms or corporations, and in general do all things legally permissible which may be requisite or proper, all for completing the acquisition, construction, equipping and installation of the Project as herein provided Compliance with State Handicap Code and ADA. Within the meaning of O.C.G.A through , the Facilities will be constructed so as to be accessible to, and functional for, the physically handicapped and will comply with the applicable requirements of the Americans with Disabilities Act Reimbursements to Lessee. The Lessee may be reimbursed from the Acquisition Fund for Costs of Construction incurred or payments made by advances or otherwise by the Lessee, provided that such payments were made not more than 60 days prior to the adoption of a resolution expressing the Lessee s intention to reimburse itself with the proceeds of the Certificates and provided that the Lessee completes a requisition required by the Indenture Changes in Project. Changes in the scope and character of the Project may be ordered in accordance with a procedure to be established by the Lessee in its capacity as agent pursuant to the Agency Agreement; provided, that, the Lessee shall obtain an opinion of nationally recognized bond counsel to the effect that such change will not cause the interest component of the Distributions to be included in the gross income of the holder thereof for federal income tax purposes and provided, further, that unless sufficient additional funds are provided therefor, (a) the cost of the Project shall not exceed that which is established at the time when the Certificates are initially authenticated by the Trustee pursuant to the Indenture, and (b) the cost of the changes shall not exceed the amount then available therefor in the Acquisition Fund. In the event that there is a change in the scope and character of the Project, the Lessee shall do all things necessary to perfect the Trustee s security interest in the Project and shall be liable for all costs associated therewith. In addition, the Lessee shall provide the Trustee with a proper amended description of the Project contained in Exhibit A and Exhibit B hereto

20 5.05. Required Provisions of Construction Contracts; Right to Inspect Project Documents. (a) Each Construction Contract executed in connection with the Project must provide that, upon an Event of Nonappropriation or an Event of Default, or upon the termination of the authority of the Lessee to complete the Project pursuant to this Lease or the Agency Agreement, the Construction Contract will be fully and freely assignable to the Trustee without the consent of any other person, and that, if the Construction Contract is assumed by the Trustee, the contractor will perform the agreements contained in the Construction Contract for the Trustee. Each Construction Contract must also provide that following such assignment, upon an Event of Nonappropriation, an Event of Default or damage to, or destruction or condemnation of, the Project as described in Section hereof, the Trustee may, but shall be under no obligation to, terminate such Construction Contract, and the contractor shall then be entitled to payment only from amounts available therefor in the Acquisition Fund and only for work done prior to such termination. The Lessee agrees that upon the occurrence of an Event of Nonappropriation or an Event of Default, or otherwise upon the termination of the authority of the Lessee to complete the Project pursuant to this Lease or the Agency Agreement, and upon receipt of a written request from the Trustee, it will assign to the Trustee all of its right, title and interest in and to all Construction Contracts and other Project Documents. (b) The Lessee shall have and keep on file and available for inspection by the Lessor and the Trustee copies of the Project Documents (except Project Documents which are in the possession of the Trustee), throughout the term of the Lease, or as soon after the commencement of the term of the Lease as such Project Documents shall become available to the Lessee. Neither the Project Documents nor any change or amendments thereto shall (i) cause the Project to be used for any purpose prohibited by this Lease or by the Constitution and laws of the State of Georgia; or (ii) adversely affect the ability of the Lessee to meet its obligations hereunder. (c) Each general contractor entering into a Construction Contract for the Facilities shall be required to procure and maintain standard form comprehensive general public liability and property damage insurance, at its own cost and expense, during the duration of such general contractor s Construction Contract and until the Facilities are insured by the Lessee, in the amount required by Article VII hereof. (d) Each general contractor retained in connection with the construction of the Facilities shall be required to procure and maintain, at its own cost and expense, during the term of its Construction Contract and until the Facilities are completed and insured by the Lessee, standard builders all-risk insurance upon the Facilities to be constructed, in whole or in part, by such general contractor. The policy may have a deductible clause in such amount as may be approved by the Trustee, in Trustee s sole discretion, and the Lessee as Lessor s agent under the Agency Agreement if such agreement is in effect; provided, however, that the Trustee shall not be deemed to have incurred any obligation to reimburse the owners of Certificates or any other person for the amount of the deductible. Such insurance coverage shall be in an amount at least equal to the total contract price for such general contractor s work. In the event of any change order resulting in the performance of additional work in connection with the construction of the

21 Facilities, the amount of such insurance shall be increased to include the cost of such additional work. (e) The risk of loss under any and all deductibles in any policy provided by a general contractor shall be assumed by and shall be the responsibility of the general contractor. The Lessee further agrees that it will require that each insurer providing the insurance described in Sections 5.05(c) and (d) above must waive its rights of subrogation against the Lessee and the Lessor and their respective officers, elected or appointed officials and employees, and shall further require that none of such insurance will be materially reduced, restricted, limited, changed or cancelled without at least thirty (30) days prior written notice to the Lessee, the Lessor and the Trustee. The Lessee will further require that the Lessor and the Trustee be listed as an additional insured and mortgagee, respectively, under each policy required by Sections 5.05(c) and (d) above. (f) Each contractor and subcontractor for the Facilities shall procure and maintain workers compensation insurance as required by applicable law. (g) The Net Proceeds of any performance or payment bond required or builders all-risk insurance hereunder is to be paid into the Insurance Fund to be applied as provided in Section 4.15 of the Indenture and Section hereof Remedies Against Contractors and Vendors. The Lessee shall proceed promptly, either separately or in conjunction with others, to pursue diligently its remedies against any contractor, subcontractor or vendor which is in default under any of the Construction Contracts and/or against each surety on any bond securing the performance or payment of such Construction Contract. The Net Proceeds recovered by way of the foregoing, after reimbursement to the Lessee for any unreimbursed expenditure of the Lessee for correcting or remedying such default, will be paid into the Insurance Fund to be applied as provided in Section 4.15 of the Indenture Financing of the Construction of the Project. For the purpose of paying the costs of the acquisitions, construction, equipping and installation of the Project and all costs and expenses incidental thereto and to the issuance of the Series 2017 Certificates, the Lessor shall cause the Series 2017 Certificates to be issued pursuant to the Indenture and shall cause the net proceeds from the sale thereof to be deposited with the Trustee and applied as provided in the Indenture Disbursements from the Acquisition Fund; Establishment of Completion Date. (a) The Lessor has, in the Indenture, authorized and directed the Trustee to make payments from the Acquisition Fund to pay the Costs of Construction or to reimburse the Lessee, for certain Costs of Construction paid by the Lessee; provided, however, that any such disbursement shall only be made after satisfaction of the conditions for any such disbursement as provided in the Indenture, including the delivery of written requisitions in accordance with Section 4.8(b) of the Indenture. The Lessee hereby agrees to deliver such written requisitions to the Trustee as may be necessary to effect disbursements from the Acquisition Fund in accordance herewith and with the Indenture

22 (b) The Lessee hereby agrees to deliver to the Trustee upon final acceptance of the Project by the Lessee the Completion Certificate required by Section 4.9 of the Indenture. (c) In approving any written requisition delivered in accordance with Section 4.8(b) of the Indenture, the Trustee may rely, without investigation, as to the completeness and accuracy of all statements in any and all such written requisitions, and the Lessee hereby covenants and agrees, to the extent permitted by law, to indemnify and save harmless the Trustee from any liability incurred in connection with any written requisition so approved, but only from moneys duly appropriated and legally available for such purpose Investment of Certificate Payment Fund, Insurance Fund and Acquisition Fund. Any moneys held as a part of the Certificate Payment Fund, the Insurance Fund or the Acquisition Fund shall be invested or reinvested by the Trustee from time to time, but only at the request of and as directed by an Authorized Lessee Representative, in accordance with the provisions of Section 5 of the Indenture Special Arbitrage Certifications. The Lessor and the Lessee jointly and severally certify and covenant to each other and to and for the benefit of the purchasers and holders of the Certificates from time to time outstanding that so long as any of the Certificates remain outstanding, moneys on deposit in any fund or account in connection with the Certificates, whether or not such moneys were derived from the proceeds of the sale of the Certificates or from any other sources, will not be used in a manner which will cause the Certificates to be classified as arbitrage bonds within the meaning of Section 148 of the Code

23 ARTICLE VI MAINTENANCE AND OPERATION Maintenance and Operation. The Lessee shall, at its own expense, maintain, manage and operate the Project and all improvements thereon in good order, condition and repair, ordinary wear and tear excepted. The Lessee shall provide or cause to be provided all security service, custodial service, janitorial service, power, gas, telephone, light, heating and water and all other public utility services. It is understood and agreed that in consideration of the payment by the Lessee of the Rentals herein provided for, the Lessor is only obligated to provide the Project in the manner and to the extent herein provided, and neither the Lessor, the Trustee nor any holder of any Certificates shall have any obligation to incur any expense of any kind or character in connection with the management, operation or maintenance of the Project during the term of the Lease. The Lessee shall keep the Project and any and all improvements thereto free and clear of all liens, charges and encumbrances, except for the Permitted Encumbrances and those caused or consented to by the Trustee Care of the Project. (a) The Lessee shall take good care of the Project, and suffer no waste or injury thereto, ordinary wear and tear excepted. The Lessee will pay for all damage to the Project, due to any waste, misuse or neglect by the Lessee, its agents, servants, employees, independent contractors, licensees or invitees. In addition, the Lessee shall comply with all applicable federal and state statutes, rules and regulations and city and county ordinances relating to the operation of the Project. (b) There shall be no allowance to the Lessee for a diminution in or abatement of Rentals and no liability on the part of the Lessor by reason of inconvenience, annoyance or injury to business arising or resulting from the Lessor, the Lessee or others making repairs, alterations, additions or improvements in or to any portion of the Project, and no liability upon the Lessor or allowance for a diminution in or abatement of Rentals for failure of the Lessor or others to make any repairs, alterations, additions or improvements in or to any portion of the Project. The foregoing shall not be construed to mean that the Lessor has any such obligations. (c) The Lessor shall not be liable for, and there shall be no diminution in or abatement of Rentals for, any loss or damage to the Project caused by vermin, rain, snow, liquids and semi-liquids, or caused by any latent defect in the Facilities. There shall be no diminution in or abatement of Rentals for any damage or condemnation of or destruction to the Project. (d) The Lessee s taking possession of the Project or any portion thereof shall be conclusive evidence against the Lessee that the Project or such portion thereof was in good order and satisfactory condition when the Lessee took possession thereof and that all work to be done on the Project pursuant to the terms hereof, if any, has been completed to the Lessee s satisfaction; provided, however, the Lessee s taking possession as herein provided shall be without prejudice to any rights against third parties which exist at the date of taking such possession or which may subsequently come into being. No promise of the Lessor to alter,

24 remove, improve or clean the Project and no representation respecting the condition of the Project have been made by the Lessor to the Lessee Loss and Damage. All of the Lessee s personal property of any kind that may be on or about the Project or placed in the custody of any of the Lessee s employees or agents shall be held at the sole risk of the Lessee, and the Lessor shall have no liability to the Lessee for any theft or loss thereof or damage thereto from any cause whatsoever Public Liability. Lessee has selected and has sole possession and control of the Project, and without waiving any immunity now or hereafter conferred by the law or the Constitution of the State of Georgia, shall be solely liable for all damages to persons and property suffered by anyone using the Project, shall hold Lessor harmless with respect thereto and shall indemnify and defend Lessor against all claims, demands, causes of action and actions and other liability made or established in connection therewith in accordance with Section hereof

25 ARTICLE VII INSURANCE PROVISIONS Insurance. (a) After the Lessee takes occupancy of the Project, the Lessee shall at all times maintain or cause to be maintained with responsible insurers all such insurance on the Project (valued as defined below) which is customarily maintained with respect to properties of like character against accident to, loss of or damage to such properties. Notwithstanding the generality of the foregoing, the Lessee shall not be required to maintain or cause to be maintained any insurance which is not available from reputable insurers in the open market or more insurance than is specifically referred to below. Any policies maintained by the Lessee pursuant to this Article VII shall name the Trustee and the Lessor as mortgagee and additional insured respectively. (b) Subject to the preceding paragraph (a), the Lessee shall: (i) Keep or cause to be kept a policy or policies of insurance against loss or damage to the Project resulting from fire, lightning, vandalism, malicious mischief, riot and civil commotion and such perils ordinarily defined as extended coverages. Such insurance may be carried in conjunction with any other fire and extended coverage insurance carried or required to be carried by the Lessee. Such insurance shall be maintained in an amount not less than the full insurable value of the Project, subject to customary deductibles. The term full insurable value as used in this subsection shall mean the lesser of (A) the actual replacement cost, using the items of value set forth above (including the cost of restoring the surface grounds owned or leased by the Lessee but excluding the cost of restoring trees, plants and shrubs), less physical depreciation; and (B) the remaining unpaid balance of the principal component of Base Rentals. Said full insurable value shall be determined from time to time but not less frequently than once in every twelve (12) months. (ii) Maintain or cause to be maintained public liability insurance against claims for bodily injury or death, or damage to property occurring upon, in or about the Facilities, such insurance to afford protection to a limit of not less than $1,000,000 combined single limit. Such insurance may be maintained under an owners, landlords and tenants policy and may be maintained in the form of a minimum $1,000,000 single limit policy covering all such risks. Such insurance may be carried in conjunction with any other liability insurance coverage carried or required to be carried by the Lessee. Participation in an inter-local risk management agency shall satisfy the requirements of this paragraph. Notwithstanding any provision to the contrary contained in this Lease, for purposes of the public liability insurance provided for in this section only, the Lessee shall not be required to carry said described policy in its name but rather only in the name of the Lessor with the Trustee named as mortgagee in the policy

26 The Lessee shall remain liable for the cost of this public liability insurance as an Additional Rental, notwithstanding it is not insured by said policy. (iii) Maintain or cause to be maintained flood insurance for any portion of the Project located in a flood plain. All Insurance herein provided for shall be effected under policies issued by insurers of recognized responsibility, rated A or better by A.M. Best or S&P Global Ratings, licensed or permitted to do business in the State of Georgia, except as otherwise hereinafter provided. As an alternative to the requirement of subsections (i), (ii) and (iii), the Lessee may insure such property to the same extent under a blanket insurance policy or policies which cover not only such property but other properties. All policies or certificates issued by the respective insurers for insurance shall provide that such policies or certificates shall not be cancelled, reduced or materially changed without at least thirty (30) days prior written notice to the Trustee, the Lessor and the Certificate Insurer. All policies or certificates issued by the respective insurers for insurance shall also require the insurer to give the Lessor and the Trustee notice of the non-payment of the premium and shall give the Lessor and the Trustee a reasonable opportunity to cure such non-payment. Certificates of insurance listing such policies shall be deposited with the Trustee, together with appropriate evidence of payment of the premiums therefor, and, at least thirty (30) days prior to expiration dates of expiring policies or contracts held by the Trustee, copies of renewal or new policies or contracts or certificates shall be deposited with the Trustee, together with evidence of payment of premiums therefor. All policies of insurance (except the policy of public liability specified in Section 7.01(b)(ii) hereof) must provide that the proceeds thereof shall be payable to the Trustee. The Net Proceeds of fire and extended coverage insurance shall be deposited into the Insurance Fund under the Indenture to be applied to rebuild and repair the Facilities or prepay outstanding Certificates as provided in Article X hereof. The Lessee will provide annually to the Trustee, not later than 180 days after the end of each fiscal year, a certificate to the effect that the Lessee is in compliance with the insurance requirements of this Section 7.01 or disclosing any noncompliance

27 ARTICLE VIII TAXES Taxes. (a) The Lessor and the Lessee understand and agree that the Project constitutes property that is free and exempt from all taxation; provided, however, the Lessor agrees, to the extent legally permissible, to cooperate with the Lessee, upon written request by the Lessee, to contest any proposed tax or assessment, or to take steps necessary to recover any tax or assessment paid. The Lessee agrees to pay and reimburse the Lessor for any and all costs and expenses thus incurred by the Lessor, including without limitation the allocable time charges of Lessor s staff. (b) Notwithstanding Section 8.01(a) hereof, in the event that the Project or any portion thereof shall, for any reason, be deemed subject to taxation, assessments or charges lawfully made by any governmental body which may be secured by a lien against the Project, an Additional Rental shall be paid by the Lessee equal to the amount of all such taxes, assessments and governmental charges then due. With respect to special assessments or other governmental charges which may be lawfully paid in installments over a period of years, the Lessee shall be obligated to provide for Additional Rentals only for such installments as are required to be paid during any Renewal Term of the Lease. The Lessee shall not allow any liens for taxes, assessments or governmental charges to exist with respect to the Project or any portion thereof (including, without limitation, any taxes levied upon the Project or any portion thereof which, if not paid, will become a charge on the Rentals and receipts from the Project or any portion thereof prior to or on a parity with the charge thereon and the pledge and assignment thereof to be created and made in the Indenture), or any interest therein (including the interest of the Lessor) or the Rentals and revenues derived therefrom or hereunder

28 ARTICLE IX ALTERATIONS, ADDITIONS AND IMPROVEMENTS Alterations, Additions and Improvements. (a) The Lessee shall have the right during the term of the Lease to make any alterations, additions or improvements of any kind, structural or otherwise, as it shall deem necessary or desirable, on or to the Project; provided, however, that no such alteration, addition or improvement shall materially reduce or otherwise adversely affect the value of the Project or the fair rental value thereof or materially alter or change the character or use of the Project or impair the exemption of the interest component of the Base Rentals from federal income taxation. (b) Anything contained in the foregoing paragraph (a) notwithstanding, the Lessee hereby covenants that it shall not expend nor incur any contractual or other obligation for the expenditure of $1,000,000 or more of its own funds for any alterations, modifications, additions or improvements to the Facilities without the prior written approval of nationally recognized bond counsel Title to Alterations, Additions and Improvements. Except as provided in Section 9.03 hereof, all such alterations, additions and improvements shall, to the extent legally permissible, be subject hereto, to the Indenture and to the Security Agreement and become the property of the Lessor as a part of the Project Lessee s Equipment. (a) All of the Lessee s equipment and other personal property installed or placed by the Lessee in or on the Facilities which is not a fixture under applicable law or which is not paid for with the proceeds of the sale of the Certificates shall remain the sole property of the Lessee in which neither the Lessor nor the Trustee shall have any interest, and may be modified or removed at any time by the Lessee and shall not be subject to the lien of the Indenture. (b) If after the occurrence of an Event of Nonappropriation or an Event of Default, the Lessee moves out or is dispossessed and fails to remove any of its property at the time of such moving out or dispossession, then and in that event, the Trustee shall have the option either to regard such property as abandoned by the Lessee, in which case such property shall become the property of the Lessor subject to the Indenture, or shall have the right to demand that the Lessee remove such property from the Facilities, and in the event of failure of the Lessee to comply with said demand, the Trustee shall have the right to remove, sell or destroy such property at Lessee s expense

29 ARTICLE X DAMAGE OR DESTRUCTION; CONDEMNATION Damage, Destruction and Condemnation. (a) If, during the term of the Lease, (i) the Project shall be destroyed, in whole or in part, or damaged by fire or other casualty or event; or (ii) title to, or the temporary or permanent use of, the Project or any portion thereof or the estate of the Lessee, the Lessor or the Trustee in the Project or any portion thereof shall be taken under the exercise of the power of eminent domain by any governmental body or by any person, firm or corporation acting under governmental authority; or (iii) a material defect in construction of the Project shall become apparent; or (iv) title to or the use of all or any portion of the Project shall be lost by reason of a defect in title, then, subject to Sections 4.09(a) and 10.01(c) hereof, the Lessee shall continue to pay Base Rentals and Additional Rentals and to take such action as it shall deem necessary or appropriate to repair and replace the Project, regardless of whether the acquisition of the Project has been completed by the Lessee in accordance with Section 5.08(b) hereof. (b) In accordance with Section 4.15 of the Indenture, the Trustee shall cause the Net Proceeds of any insurance policies received by the Trustee, performance bonds or condemnation awards with respect to the Project, or Net Proceeds received by the Trustee as a consequence of defaults under Construction Contracts for the Project, to be deposited into the Insurance Fund to be applied as provided herein and in Section 4.15 of the Indenture, and, so long as no Event of Default or Event of Nonappropriation exists, all Net Proceeds so deposited shall be applied to the prompt repair, restoration, modification, improvement or replacement of the Project by the Lessee, except as otherwise provided in Section 10.01(c) hereof. The balance of any Net Proceeds remaining after the repair, restoration, modification, improvement or replacement has been completed are to be deposited into the Acquisition Fund, if received prior to the Completion Date and, if received thereafter, are to be deposited into the Certificate Payment Fund as provided in the Indenture. (c) If such Net Proceeds shall be insufficient to pay in full the cost of any such repair, restoration, modification, improvement or replacement, the Lessee shall, within ninety (90) days after the occurrence of the event giving rise to such Net Proceeds, either: (i) commence and thereafter complete the work and pay any cost in excess of the Net Proceeds, in which case the Lessee agrees that it will not be entitled to any reimbursement therefor from the Trustee or the holders of the Certificates, nor shall it be entitled to any diminution of the Base Rentals or Additional Rentals; or (ii) discharge its obligation to repair or replace the Project by causing such Net Proceeds to be deposited into the Redemption Fund for the purpose of causing the mandatory prepayment of the Certificates in accordance with the Indenture. If such Net Proceeds are sufficient to prepay all outstanding Certificates upon such deposit, this Lease shall no longer apply to the Project, and all obligations of the Lessee with respect to the Project shall terminate

30 (d) The Lessee hereby agrees that any repair, restoration, modification, improvement or replacement paid for in whole or in part out of such Net Proceeds shall be the property of the Lessor subject to the Indenture, and will be undertaken by the Lessee, as the agent for and on behalf of the Lessor, and shall constitute a part of the Project subject to this Lease. (e) The Lessee hereby covenants and agrees, to the extent it may lawfully do so, that so long as any of the Certificates remain outstanding and unpaid, the Lessee will not exercise the power of condemnation with respect to the Project. The Lessee shall further covenant and agree, to the extent it may lawfully do so, that if the foregoing covenant is determined to be unenforceable for any reason or if the Lessee should fail or refuse to abide thereby and the Lessee condemns the Project, the appraised value of the Project shall not be less than the greater of (i) the principal and interest components of the Certificates outstanding at the time if such Certificates are then subject to redemption, or (ii) if such Certificates are not then subject to redemption, the amount necessary to defease such Certificates to the first available redemption date in accordance with the provisions of the Indenture

31 ARTICLE XI ASSIGNMENTS Assignments by Lessee. Neither this Lease nor any interest of the Lessee herein shall, at any time after the date hereof, be mortgaged, pledged, assigned or transferred by the Lessee by voluntary act, except as specifically provided herein. The Lessee shall at all times remain liable for the performance of the covenants and conditions on its part to be performed, notwithstanding any assignment, transfer or sublet which may be made. The Lessee shall have the right, without notice to or consent of the Lessor, the Trustee or any holder of Certificates, to further sublease or permit the use of all or any part of the Project, but nothing herein contained shall be construed to relieve the Lessee from its obligation to pay Rentals as provided in this Lease or relieve the Lessee from any other obligations contained herein; provided, however, that no such assignment or sublease may be made if the use of the Project by the assignee or sublessee will affect the validity of this Lease, change the character or use of the Project or impair the exemption of the interest component of the Base Rentals from federal income taxation. Any such assignment or sublease shall require the assignee or sublessee to assume all of the terms, covenants and agreements of the Lessee hereunder to the extent of the portion of the Project so assigned or sublet; provided, however, that where portions of the Project have been so sublet, the Lessee shall continue to be responsible for the payment of Rentals due under this Lease. The Lessor may execute any and all instruments necessary and proper in connection therewith Assignments by Lessor. (a) Except as provided below, the Lessor may not assign its obligations to perform under this Lease in whole or in part without (i) the prior written consent of the Lessee and the Trustee and (ii) first obtaining an opinion of nationally recognized bond counsel to the effect that such assignment will not affect the exclusion of the interest component of the Distributions from the gross income of the recipients thereof for federal income tax purposes. The Lessor intends to assign all of its duties and obligations hereunder with respect to the construction of the Facilities to the Lessee, as agent, pursuant to the Agency Agreement. The Trustee and the Lessee hereby consent to such assignment by the Lessor pursuant to the Agency Agreement. (b) Except as provided below, the Lessor may not assign its rights, title and interest in this Lease or sell the Project without (i) the prior written consent of the Lessee (so long as no Event of Default or Event of Nonappropriation has occurred) and the Trustee and (ii) first obtaining an opinion of nationally recognized bond counsel to the effect that such assignment or sale will not affect the exclusion of the interest component of the Distributions from the gross income of the recipients thereof for federal income tax purposes. The Lessor intends to assign this Lease (except any notice, reimbursement and indemnification provisions hereof relating to the Lessor) and to irrevocably, absolutely and unconditionally assign the Base Rentals to the Trustee under the Indenture so that the Trustee, together with the Lessor, may issue the Certificates for the purpose of financing the acquisition, construction and installation of the Project. The Lessee and the Trustee hereby consent to such assignment by the Lessor. Except as otherwise expressly provided herein or in the Indenture, neither any purchaser of any

32 of the Certificates nor the Trustee shall be bound or obligated to perform or see to the performance of any duty, covenant, condition or warranty (expressed or implied) made by the Lessor or required to observed or performed by the Lessor under any of the terms hereof Replacement of the Lessor. If any event occurs which in the Trustee s sole discretion materially impairs the ability of the Lessor to serve as lessor hereunder or as trustor under the Indenture, the Trustee may, but shall be under no obligation to, replace the Lessor with such other entity as the Trustee deems appropriate, so long as such successor entity is a nonprofit corporation or other entity duly authorized by applicable law to perform the obligations as lessor hereunder and as trustor under the Indenture and such replacement will not impair the exemption of the interest component of the Base Rentals from federal income taxation or impair the validity or enforceability of this Lease. In any such event, the Lessor being replaced shall cooperate with the Trustee in conveying title to the Facilities and any and all other right, title and interest of the Lessor in, to and under this Lease and the Indenture to such successor entity as the Trustee may designate as provided herein Subordination and Attornment. (a) Except as otherwise specifically provided in Section hereof, the Lessee s interest in the Project, its interest as lessee hereunder and the interest of any sublessee hereunder in the Project under a sublease shall at all times be subject and subordinate to the lien of the Indenture and to all the terms, conditions and provisions thereof, whether now existing or hereafter created, and without the need for any further act or agreement by the Lessee; provided, however, that so long as the Lessee continues to perform all of its obligations under this Lease, this Lease shall remain in full force and effect notwithstanding such subordination or default by the Lessor in connection with the said lien of the Indenture, and the Lessee shall not be disturbed by the Lessor or the Trustee in its possession of the Project during the term of the Lease or in the enjoyment of its rights hereunder. The Lessee shall not subordinate its interests hereunder or in the Project to any other lien or encumbrance without the prior written consent of the Trustee, which consent may be given or withheld at the sole discretion of the Trustee. Any such unauthorized subordination by the Lessee shall be void and of no force or effect whatsoever. (b) In the event of any sale, assignment or transfer of the Lessor s interest under this Lease or in the Project, including any such disposition resulting from the Lessor s default under said lien, the Lessee and any sublessee shall attorn to the Lessor s successor and shall recognize such successor as the Lessor under this Lease, said attornment to be effective and self-operative without the execution of any other instruments on the part of either party hereto, immediately upon such successor s succeeding to the interest of the Lessor hereunder, and this Lease shall continue in accordance with its terms between the Lessee, as lessee, and such successor, as Lessor Prohibited Transfers Void. Any assignment, transfer or sublet of all or any part of this Lease or the Project made by the Lessee in contravention of the terms hereof shall be void and of no effect

33 ARTICLE XII REPRESENTATIONS, COVENANTS AND WARRANTIES Representations, Covenants and Warranties of the Lessee. The Lessee hereby represents, covenants and warrants for the benefit of the Lessor and the Trustee as follows: (a) The Lessee has the power and authority to enter into the transactions contemplated by this Lease and to carry out its obligations hereunder. The Lessee has been duly authorized to execute and deliver this Lease and agrees that it will do or cause to be done all things necessary and legally permissible to preserve and keep in full force and effect its existence. (b) The Lessee is not subject to any legal or contractual limitation or provision of any nature whatsoever which in any way limits, restricts or prevents the Lessee from entering into this Lease or performing any of its obligations hereunder, except to the extent that such performance may be limited by bankruptcy, insolvency, reorganization or other laws affecting creditors rights generally. (c) There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, public board or body, known to be pending or threatened against or affecting the Lessee, nor to the best knowledge of the Lessee is there any basis therefor, wherein an unfavorable decision, ruling or finding would materially adversely affect the transactions contemplated by this Lease or any other agreement or instrument to which the Lessee is a party and which is used or contemplated for use in the consummation of the transactions contemplated by this Lease. All authorizations, consents and approvals of governmental bodies or agencies required in connection with the execution and delivery by the Lessee of this Lease or in connection with the carrying out by the Lessee of its obligations under this Lease have been obtained. (d) Neither the City Council nor any employee of the Lessee has any direct or indirect pecuniary interest in, or will receive or has agreed to receive any compensation with respect to, any contract, lease, purchase, sale or employment made or to be made in connection with the proposed transactions contemplated by the performance of this Lease and the Indenture. (e) The payment of the Rentals hereunder or any portion thereof is not (i) secured by any interest in property used or to be used in a trade or business or in payments in respect of such property or (ii) derived from payments in respect of property or borrowed money used or to be used in a trade or business, within the meaning of Section 141(a) of the Code. (f) The entering into and performance of this Lease will not violate any judgment, order, law or regulation applicable to the Lessee or result in any breach of, or constitute a default under, or result in the creation of any lien, charge, security interest or other encumbrance upon any assets of the Lessee or on the Project pursuant to, any indenture, mortgage, deed of trust, bank loan or credit agreement or other instrument to which the Lessee is a party or by which it or its assets may be bound, except as herein provided

34 (g) All requirements have been met and procedures have occurred in order to ensure the enforceability of this Lease, and the Lessee has complied or will comply with such public bidding requirements as may be applicable to this Lease and the construction by the Lessee (in its capacity as agent for the Lessor) of the Project. (h) During the term hereof, the Project will be used by the Lessee, by other departments and agencies of Lessee or by other public bodies, consistent with the permissible scope of the Lessee s or such other public bodies authority for the purpose of performing one or more essential governmental or proprietary functions. (i) The Project is essential to the proper, efficient and economic operation of the Lessee and serves an essential governmental function of the Lessee. (j) Facilities on the Site. All necessary approvals have been obtained by the Lessee to build the (k) No hazardous substances regulated under federal, state or local laws or regulations have been, are or will be utilized, discarded, dumped or stored at the Site. If Lessee utilizes, disposes, dumps or stores hazardous substances at the Site, or permits another to do so or learns that another has done so, the Lessee will immediately notify the Trustee and the Lessor, will immediately notify the U.S. Environmental Protection Agency and/or the Georgia Environmental Protection Division as required by 42 U.S.C and O.C.G.A , respectively, and will consult with an environmental engineer regarding the proper disposal or cleanup of such substances. The Lessee will also undertake and provide for the cleanup of any such substances in accordance with all applicable federal, state and local laws and regulations. The Lessee hereby acknowledges that all cleanup costs will be paid by the Lessee in accordance with Section 4.01(b)(xii) hereof. (l) Appropriation when made will be prior to the beginning of each Fiscal Year and will be for the lease payments due both March 1 and September 1 of the ensuing Renewal Term. (m) The Lessee shall comply with all applicable laws, rules, regulations, orders, directions and requirements of all governmental departments, bodies, bureaus, agencies and officers and with all reasonable rules, directions, requirements and recommendations of fire insurance rating organizations for the area in which the Project is situated, pertaining to the Project or the use and occupancy thereof. The Lessee shall not do or suffer to be done to, or keep or suffer to be kept anything in, upon or about, the Project which will contravene any policies insuring against loss or damage by fire or other hazards, including, but not limited to, public liability insurance. (n) The Lessee has outstanding no other contracts for the multiyear lease, purchase or lease purchase of real property pursuant to the authority of O.C.G.A The principal amount of the Base Rentals, when added to the amount of debt incurred by the Lessee pursuant to Article IX, Section V, Paragraph I of the Constitution of the State of Georgia, does not exceed 10% of the assessed value of all taxable property within the City of Johns Creek. The property being financed pursuant to this Lease has not been the subject of a referendum

35 which failed to receive the approval of the voters of the City of Johns Creek within the immediately preceding four years. A public hearing has been held by the Lessee regarding the Project and the financing thereof pursuant to this Lease. A notice of the public hearing was published once a week for two weeks prior to the hearing in a newspaper of general circulation within the City of Johns Creek. The average annual Base Rentals do not exceed 7.5% of the governmental fund revenues of the Lessee for the calendar year preceding the delivery of this Lease plus any available special county one percent sales and use tax proceeds collected pursuant to O.C.G.A (o) The Lessee agrees to provide to the Trustee and to any holder of all of the Certificates the Lessee s annual budget within thirty (30) days after the approval thereof and the Lessee s Consolidated Annual Financial Report within 180 days of the end of each Fiscal Year. (p) All contracts for the physical performance of services entered into by Lessee pursuant to this Lease shall comply with O.C.G.A Representations, Covenants and Warranties of the Lessor. The Lessor represents, covenants and warrants for the benefit of the Lessee and the Trustee as follows: (a) The Lessor has the power and authority to enter into the transactions contemplated by this Lease and to carry out its obligations hereunder. The Lessor has been duly authorized to execute and deliver this Lease. (b) The Lessor is not subject to any legal or contractual limitation or provision of any nature whatsoever which in any way limits, restricts or prevents the Lessor from entering into this Lease or performing any of its obligations hereunder, except to the extent that such performance may be limited by bankruptcy, insolvency, reorganization or other laws affecting creditors rights generally. (c) There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, public board or body, known to be pending or threatened against or affecting the Lessor, nor to the best knowledge of the Lessor is there any basis therefor, wherein an unfavorable decision, ruling or finding would materially adversely affect the transactions contemplated by this Lease or any other agreement or instrument to which the Lessor is a party and which is used or contemplated for use in the consummation of the transactions contemplated by this Lease. All authorizations, consents and approvals of governmental bodies or agencies required in connection with the execution and delivery by the Lessor of this Lease or in connection with the carrying out by the Lessor of its obligations under this Lease have been obtained. (d) The Facilities will be located on the Site. The Lessor has a valid leasehold interest in the Site. The Lessor and the Lessee understand and agree that the Lessor shall have all right, title and interest in and to the Project, subject to the Indenture, and the annually renewable leasehold interest of the Lessee and its option to purchase the Project hereunder. (e) The Lessor will not absolutely assign the Base Rentals and will not pledge any of its other rights hereunder and will not mortgage or encumber the Project except as provided in the Indenture and the Security Agreement. All property and moneys received by the

36 Lessor from the Lessee will, so long as no Event of Nonappropriation or Event of Default has occurred and is then continuing, be applied for the benefit of the Lessee, and all property and moneys received by the Lessor hereunder and under the Indenture for the holder or holders of the Certificates will be applied for the benefit of such holder or holders. (f) The Lessor will remain an organization described in Section 115 of the Code and whose income is exempt from tax under Section 115 of the Code Tax Covenants of the Lessee and the Lessor. Subject to the provisions of Section hereof, the Lessee and the Lessor covenant and agree that no use (directly or indirectly) will be made of the proceeds of the Certificates which would cause any of the Certificates to be a private activity bond within the meaning of Section 141(a) of the Code, arbitrage bonds within the meaning of Section 148 of the Code or hedge bonds within the meaning of Section 149 of the Code

37 ARTICLE XIII AMENDMENTS Amendments, Changes and Modifications. Except as otherwise expressly provided in Sections 13.1, 13.2 and 13.3 of the Indenture, this Lease may not be amended, changed or modified

38 Vesting of Title. ARTICLE XIV TITLE AND OPTION TO PURCHASE PROJECT (a) Title to all real property or interests therein, buildings, fixtures, equipment and other personal property which is purchased or financed from moneys deposited in the Acquisition Fund will be held in the name of the Lessor, subject to this Lease, the Indenture and the Security Agreement. (b) The Lessor s interest in the Project shall be transferred to the Lessee (i) upon payment of all Base Rentals for all Renewal Terms and all Additional Rentals and all amounts due the Trustee and $1.00 to the Lessor, representing the residual value of the Lessor in the Project; or (ii) the lien of the Indenture shall have been discharged in accordance with the terms thereof; or (iii) the Project is purchased in accordance with Section hereof. (c) Notwithstanding the foregoing, if the Project is refinanced from the proceeds of refunding certificates of participation, title to the Project shall remain in the Lessor until such refunding certificates of participation are paid in full Option to Purchase Project. The Lessee has the option to purchase the entire Project at the Option Price on any date on which the Certificates may be prepaid or defeased in full Relative Position of Purchase Option and the Indenture. The options respectively granted to the Lessee in this Article XIV shall be and remain prior and superior to the Indenture and may be exercised whether or not an Event of Nonappropriation or an Event of Default shall have occurred and be continuing hereunder; provided, however, that no such event will result in nonfulfillment of any condition to the right of the Lessee to obtain a conveyance of the Project by making the payments required hereunder Conveyance on Purchase. At the closing of the purchase pursuant to the exercise of any option to purchase granted herein, the Lessor will upon receipt of the purchase price deliver to the Lessee the following: (a) if at the time the Indenture has not been satisfied in full, a release by the Trustee from the lien or security interest of the Indenture and the Security Agreement in the property with respect to which such purchase is being consummated; and (b) documents conveying to the Lessee good and marketable title in and to the Facilities and the Equipment with respect to which such purchase is being consummated, as such property then exists, subject to the following: (i) those liens, security interests and encumbrances (if any) to which such title in and to said property was subject when conveyed to the Lessor, (ii) those liens, security interests and encumbrances created by the Lessee or to the creation or suffering of which the Lessee consented, (iii) those liens, security interests and encumbrances resulting from the failure of the Lessee to perform or observe any of its agreements contained herein, and (iv) Permitted Encumbrances other than the Indenture and the Security Agreement

39 ARTICLE XV RIGHT OF ENTRY; LIENS; QUIET ENJOYMENT Right of Entry. The Lessor and its designated representatives shall have the right to enter upon the Project during reasonable business hours (and in emergencies at all times) (a) to inspect the same, (b) for any purpose connected with the Lessor s rights or obligations under this Lease or (c) for all other lawful purposes Liens. Except for payments made or required to be made under the Indenture, the Lessee shall pay or cause to be paid, when due, all sums of money that may become due for, or purporting to be for, any labor, services, materials, supplies or equipment alleged to have been furnished in, upon or about the Project and which may be secured by any mechanics, materialmen s or other lien against the Project, or the Lessor s interest therein, and shall cause each such lien to be fully discharged and released; provided, however, that if the Lessee desires to contest any such lien, this may be done, and if such lien shall be reduced to final judgment and such judgment or such process as may be issued for the enforcement thereof is not promptly stayed, or if so stayed and said stay thereafter expires, then and in any such event the Lessee shall forthwith pay and discharge said judgment Covenant of Quiet Enjoyment. So long as no Event of Default or Event of Nonappropriation shall exist, the parties hereto mutually covenant and agree that the Lessee, by keeping and performing the covenants and agreements herein contained, shall at all times during the term hereof, peaceably and quietly, have, hold and enjoy the Project

40 ARTICLE XVI EVENTS OF DEFAULT; REMEDIES Events of Default Defined. Any of the following shall be an Event of Default under this Lease: (a) Failure by the Lessee to pay any Base Rentals required to be paid under Section 4.01(a) hereof at the times specified therein as the respective due dates therefor; or (b) Failure by the Lessee to pay any Additional Rentals during the term of this Lease for a period of thirty (30) days after written notice specifying such failure and requesting that it be remedied shall be received by the Lessee from the Trustee; or (c) Failure by the Lessee to vacate the Project by the expiration of the Initial Term or Renewal Term during which an Event of Nonappropriation occurs; or (d) Failure by the Lessee to observe and perform any covenant, condition or agreement herein on its part to be observed or performed, other than as referred to in Sections 16.01(a), 16.01(b) and 16.01(c) hereof, for a period of thirty (30) days after written notice, specifying such failure and requesting that it be remedied, shall have been given to the Lessee by the Trustee, unless the Trustee shall agree in writing to an extension of such time prior to its expiration; provided, however, that if the failure stated in the notice cannot be corrected within the applicable period, the Trustee will not unreasonably withhold its consent to an extension of such time if corrective action is instituted by the Lessee within the applicable period and diligently pursued until the default is corrected; or (e) The Lessee shall file a petition in bankruptcy or be adjudicated bankrupt or insolvent, or shall make an assignment for the benefit of its creditors, or shall consent to the appointment of a receiver of itself or of its property, or shall institute proceedings for its reorganization or proceedings instituted by others for its reorganization shall not be dismissed within thirty (30) days after the institution thereof; or (f) a receiver or liquidator of the Lessee or of any substantial portion of its property shall be appointed and the order appointing such receiver or liquidator shall not be vacated within thirty (30) days after the entry thereof. The foregoing provisions of this Section are subject to the following limitations: (i) the obligations of the Lessee to make payments of the Base Rentals and the Additional Rentals shall be subject to the provisions of Section 4.09 of this Lease with respect to an Event of Nonappropriation; and (ii) if, by reason of Force Majeure (as such term is hereinafter defined), the Lessee shall be unable in whole or in part to carry out any agreement on its part herein contained, other than the obligations of the Lessee contained in Article IV hereof, the Lessee shall not be deemed in default during the continuance of such inability. The Lessee agrees, however, to remedy with all reasonable dispatch the cause or causes preventing the Lessee from carrying out its agreement. As used herein the term Force Majeure shall mean, without limitation, the following: acts of God; strikes; lockouts or other industrial disturbances; acts of public enemies; orders of any kind of the government of the United States of America or the

41 State of Georgia or any of their departments, agencies or officials, or any civil or military authority; insurrections; riots; epidemics; landslides; lightning; earthquakes; fire; storms; floods; washouts; droughts; arrests; restraints of government and people; civil disturbances; explosions; partial or entire failure or unavailability of utilities; or any other cause or event not reasonably within the control of the Lessee Remedies of Default or Event of Nonappropriation. (a) Upon the occurrence and continuance of any Event of Default or Event of Nonappropriation, the Trustee as provided in the Indenture may give immediate notice to the Lessee to vacate the Project in accordance with Section 4.09(b) hereof immediately and may, without any further demand or notice, (i) terminate this Lease and/or the Lessee s possessory rights hereunder (with or without terminating this Lease except as to the Lessee), re-enter the Project and eject all parties in possession thereto therefrom and use its best efforts to re-let or sell the Project or any portion thereof subject to the Trustee s giving preference, all other things being equal, to those lessees or buyers whose use or ownership would preserve the exemption from federal income taxation of the interest component of the Base Rentals so long as such preferred re-letting or sale is under the best terms and conditions for Certificate holders, or (ii) to take any action at law or in equity deemed necessary or desirable to enforce its rights with respect to the Project. (b) Upon the termination of the term of the Lease by reason of an Event of Nonappropriation or an Event of Default, all moneys then held in any fund or account under the Indenture shall be held by the Trustee for the benefit of the holders of the Certificates. The Net Proceeds received on such re-letting or sale and such other moneys shall be applied from time to time as in accordance with Section 8.3 of the Indenture. In the event that such Net Proceeds and other moneys exceed the amount required to prepay the Certificates then outstanding at 100% of the principal amount thereof plus accrued interest to the prepayment date, the excess moneys, if any, following payment of all amounts due the Trustee, are to be paid to the Lessee as provided in Section 8.3 of the Indenture. Notwithstanding anything herein to the contrary, the Trustee shall be entitled to re-let the Project for such period as is necessary for the Trustee to obtain sufficient moneys to pay the Distributions on the Certificates in full, and the obligations of the Trustee with respect to the holders of the Certificates and the receipt and disbursement of funds shall be continuing until the lien of the Indenture is discharged as provided in the Indenture. (c) The Trustee shall be entitled to relet or sell the Project or any portion thereof as provided herein and in the Security Agreement after the occurrence of an Event of Nonappropriation or an Event of Default Surrender of Project. Upon the occurrence and continuance of any Event of Default or Event of Nonappropriation, the Lessee shall quit and surrender the Project in accordance with Section 4.09(b) to the Trustee in the same condition in which it existed at the time of the initial use and occupancy thereof by the Lessee, ordinary wear and tear excepted Limitations on Remedies. With the sole exception of the obligation of the Lessee to pay Base Rentals and Additional Rentals attributable to the Initial Term or any Renewal Term or portion thereof during which the Lessee shall actually use and occupy the Project, no

42 judgment requiring the payment of money may be entered against the Lessee by reason of any Event of Default or an Event of Nonappropriation under this Lease. In the event the term of this Lease is terminated as a result of an Event of Default or an Event of Nonappropriation, no deficiency judgment may be entered against the Lessee, except as otherwise expressly herein provided with respect to the Lessee s actual use and occupancy of the Project Remedies Cumulative. The rights and remedies given or reserved herein to the Lessor and the Trustee are and shall be deemed to be cumulative, and the exercise of any shall not be deemed to be an election excluding the exercise at any other time of a different or inconsistent right or remedy or the maintenance of any action either at law or in equity Waiver. The delay or failure of the Lessor or the Trustee at any time to insist in any one or more instances upon a strict performance of any covenant of this Lease or to exercise any right, remedy, power or option herein granted or established by law, shall not be construed as an impairment of or a waiver or a relinquishment for the future of such covenant, right, remedy, power or option, but the same shall continue and remain in full force and effect, and if any breach shall occur and afterwards be compromised, settled or adjusted, this Lease shall continue in full force and effect as if no breach had occurred unless otherwise agreed. The receipt and acceptance by the Lessor or the Trustee of any Rentals, in whole or in part, with knowledge of the breach of any term, covenant or condition hereof, shall not be deemed a waiver of such breach, and no waiver of any provision hereof shall be deemed to have been made unless expressed in writing and signed by the Lessor and the Trustee Curing Lessee s Breach. If the Lessee shall default in the observance or performance of any term or covenant on the Lessee s part to be observed or performed under or by virtue of any of the terms of this Lease, the Trustee may, but shall not be obligated to do so, immediately, or at any time thereafter and without notice, and to the extent permitted by law, perform or cause to be performed the same for the account of the Lessee, and any sums paid or obligations incurred in connection therewith shall be deemed to be Additional Rentals hereunder and shall be paid, together with interest thereon at the rate of eight percent (8%) per annum, by the Lessee to the Trustee for appropriate disbursement within fifteen (15) days of the rendering of any bill or statement to the Lessee therefor; provided, however, that nothing herein shall be construed to obligate the Lessee to pay any such Additional Rentals from any funds other than moneys legally available and appropriated for such purpose

43 ARTICLE XVII MISCELLANEOUS Notices. All notices, statements, demands, requests, consents, approvals, authorizations, offers, agreements, appointments or designations hereunder by either party to the other shall be in writing and shall be sufficiently given and served upon the other party, if sent by United States registered mail, return receipt requested, postage prepaid and addressed as follows: If to the Lessor: Georgia Municipal Association, Inc. 201 Pryor Street, S.W. Atlanta, Georgia Attention: Financial Services Program Manager If to the Lessee: City of Johns Creek Findley Road, Suite 400 Johns Creek, Georgia Attention: Mayor If to the Trustee: Regions Bank 1180 West Peachtree Street Suite 1200 Atlanta, Georgia Attention: Rick Jaegel, Corporate Trust Governing Law. This Lease is made in the State of Georgia under the Constitution and laws of the State of Georgia and is to be so construed Lessee s Obligation to Operate. The Lessee shall be obligated to use and operate the Project so as to afford to the public the benefits contemplated by this Lease and to permit the Lessor and the Trustee to carry out their respective covenants to the holders of the Certificates Execution in Counterparts. This Lease may be simultaneously executed in any number of counterparts, each of which when so executed shall be deemed to be an original, but all together shall constitute but one and the same Lease, and it is also understood and agreed that separate counterparts of this Lease may be separately executed by the Lessor and the Lessee, all with the same full force and effect as though the same counterpart had been executed simultaneously by both the Lessor and the Lessee; provided, however, that for purposes of perfecting a security interest in this Lease by the Trustee under Article 9 of the Georgia Uniform Commercial Code, only the counterpart delivered, pledged and assigned to the Trustee shall be deemed the original

44 Severability. If any one or more of the terms, provisions, promises, covenants or conditions of this Lease, or the application thereof to any person or circumstance, shall to any extent be adjudged invalid, unenforceable (either independently or in the context of this Lease), void or voidable for any reason whatsoever by a court of competent jurisdiction, each and all of the remaining terms, provisions, promises, covenants and conditions of this Lease, and the application thereof to other persons or circumstances, shall not be affected thereby and shall be valid and enforceable to the fullest extent permitted by law Successors and Assigns; Third Party Beneficiaries. (a) This Lease and the covenants, conditions and agreements herein contained shall be binding upon and inure to the benefit of the permitted successors and assigns of the parties hereto. (b) This Lease is executed in part to induce the purchase by others of the Certificates and for the further securing of the Certificates, and, accordingly, as long as any Certificates are outstanding, all respective covenants and agreements of the parties herein contained are hereby declared to be for the benefit of the holders from time to time of the Certificates, but may be enforced by or on behalf of such holders only in accordance with the provisions of the Indenture. This Lease shall not be deemed to create any right in any person who is not a party (other than the permitted successors and assigns of a party) and shall not be construed in any respect to be a contract in whole or in part for the benefit of any third party (other than the permitted successors and assigns of a party hereto), except in each case the holders from time to time of the Certificates and the Trustee Limitation of Warranty. The Lessor makes no warranties except those warranties or representations expressly made by the Lessor in this Lease or other documents related to the issuance of the Certificates. The Lessor makes no warranty, either express or implied, as to the Project or that the Project will be suitable for the purposes or needs of the Lessee Captions and Headings. The captions and headings used throughout this Lease are for convenience of reference only, and the words contained therein shall not be deemed to affect the meaning of any provision or the scope or intent of this Lease, nor in any way affect this Lease Net Lease. This Lease shall be deemed and construed to be a net lease, and the Lessee hereby agrees that the Rentals provided for herein shall be an absolute net return to the Lessor free and clear of any expenses, charges or set-offs whatsoever Provision for Payment. Any payment or prepayment by the Lessee shall be deemed made if sufficient direct obligations of the United States of America (verified by an opinion of a certified public accountant or firm thereof) shall have been deposited with the Trustee as provided in the Indenture to effect a defeasance of all or a part of the Certificates; provided that notice of the exercise of the Lessee s right of prepayment shall have been duly given in case of any prepayment as provided in the Indenture. Such obligations shall be sufficient only if they are not redeemable at the option of the issuer prior to maturity and if they mature and bear interest at such times and in such amounts as will assure sufficient cash to pay

45 such payment or prepayment when due without rendering the portion of any payment or prepayment hereunder which is allocable to interest to be subject to federal income taxation Reporting Requirements. If applicable, the Lessee agrees to provide to the Lessor and the Trustee, not more than ninety (90) days after the end of each Fiscal Year, a certificate of Authorized Lessee Representative to the effect that the Lessee is out of compliance with the terms and conditions of this Lease, and specifying the nature of any noncompliance and the remedial action taken or proposed to be taken to cure such noncompliance Certain Payments. To the extent permitted by law, the Lessee hereby agrees to pay to the Lessor and the Trustee, and any successors, assigns, directors, officers, agents or subrogees, the amounts of any and all claims, losses, damages, actions, proceedings, expenses or liabilities, including reasonable legal fees and expenses and court costs, arising out of or in connection with their services in assisting with this Lease or the Certificates, or the provision or financing of the Project (not due to the negligence or wrongful acts of such parties or breach of their obligations hereunder), including but not limited to claims, losses, damages, actions, proceedings, expenses or liabilities arising out of (i) the use, maintenance, condition or management of the Project or other property financed hereby or other property acquired with a portion of the proceeds of the Certificates by the Lessee; (ii) any breach or default on the part of the Lessee in the performance of any of its obligations under this Lease; (iii) any act or negligence of the Lessee or of any of its agents, contractors, servants, employees or licensees with respect to the Project or other property financed hereby or other property acquired with a portion of the proceeds of the Certificates; (iv) any act or negligence of any assignee or sublessee of the Lessee with respect to the Project or other property financed with the proceeds of the Certificates or other property acquired with a portion of the proceeds of the Certificates; (v) the acquisition, construction and installation of the Project or other property financed hereby or other property acquired with a portion of the proceeds of the Certificates or the authorization of payment of the costs thereof by the Lessee; (vi) the breach by the Lessee of any representation or warranty of the Lessee contained in this Lease or made by the Lessee in connection herewith; or (vii) the Lessor or the Trustee enforcing any covenants of the Lessee in this Lease. In case any action is brought against any party that may be entitled to payment in connection with any matter contemplated under this Section 17.12, and such party notifies the Lessee of the commencement thereof, the Lessee will be entitled to participate in and, to the extent that it chooses to do so, to assume the defense thereof (including the employment of counsel), and the Lessee shall assume the payment of all fees and expenses relating to such defense and shall have the right to negotiate and consent to settlement thereof Lessee s Acknowledgment of Obligations Under and Consent to Certain Provisions In Indenture. The Lessee acknowledges that it has read the Indenture, and the Lessee agrees to perform all of the obligations required of it by the Indenture No Liability of Directors, Members, Officers and Employees of Lessor. No recourse shall be had for the enforcement of (a) any obligation, covenant, promise or agreement of the Lessor contained in this Lease, the Certificates, the Indenture, the Agency Agreement or the Security Agreement; (b) any claim based hereon or thereon; or (c) or otherwise in respect hereof, against any director, member, officer or employee, as such, in his individual capacity,

46 past, present or future, of the Lessor or any successor corporation whether by virtue of any constitutional provision, statute or rule or law, or by the enforcement of any assessment or penalty or otherwise; and no personal liability whatsoever shall attach to, or be incurred by, any director, member, officer or employee as such, past, present or future, of the Lessor or of any successor corporation, either directly or through the Lessor or any successor corporation, under or by reason of any of the obligations, covenants, promises or agreements of the Lessor, whether contained in this Lease, the Certificates, the Indenture, the Agency Agreement or the Security Agreement or to be implied herefrom or therefrom, as being supplemental hereto, and all personal liability of that character against every such director, member, officer and employee is, by the execution of this Lease and the Indenture, and as a condition of, and as part of the consideration for, the execution thereof, expressly waived and released by the Lessee and the Lessor. The absence of liability of directors, members, officers and employees of the Lessor under the provisions contained in this Section shall survive the termination of this Lease, the Certificates, the Indenture, the Agency Agreement and the Security Agreement. [Signatures on the Following Pages]

47 IN WITNESS WHEREOF, the Lessor and the Lessee have caused their respective names to be signed hereto by their respective officers hereunto duly authorized, all as of the day and year first above written. LESSOR: GEORGIA MUNICIPAL ASSOCIATION, INC. ATTEST: By: Interim Executive Director Financial Services Program Manager [SEAL] As to the Lessor, signed, sealed and delivered in the presence of: Unofficial Witness Notary Public My Commission Expires: [NOTARIAL SEAL] [Signature Page Public Purpose Master Lease]

48 LESSEE: CITY OF JOHNS CREEK, GEORGIA By: Mayor ATTEST: Clerk [SEAL] As to the Lessee, signed, sealed and delivered in the presence of: Unofficial Witness Notary Public My Commission Expires: [NOTARIAL SEAL] [Signature Page Public Purpose Master Lease]

49 EXHIBIT A SITE DESCRIPTION Exhibit A 1