The URL can be used to link to this page

Home My WebLink AboutCertain Intergovernment Lease Dated March 1, 2003 Augusta Richmond GA DOCUMENT NAME: C e,zr~ II'} T "'...- eo R. ~O ~E"""" r<NI U" s -= 't>A. to () )Y\o.~\+ I, ~oo'3. DOCUMENT TYPE: (( c <2:> 0 LU T , D I'\J YEAR: ~OO~ BOX NUMBER: 1 <:;( FILE NUMBER: } LP ~ L\ 0 NUMBER OF PAGES: '6~ A RESOLUTION TO APPROVE, AUTHORIZE AND PROVIDE FOR THE EXECUTION AND DELIVERY OF THAT CERTAIN INTERGOVERNMENTAL LEASE, DATED AS OF MARCH 1,2003, BY AND BETWEEN AUGUSTA, GEORGIA AND THE DOWNTOWN DEVELOPMENT AUTHORITY OF THE CITY OF AUGUSTA; TO AUTHORIZE THE EXECUTION AND DELIVERY OF A PLACEMENT AGREEMENT IN CONNECTION WITH THE SALE TO CERT AIN ACCREDITED INVESTORS OF THE DOWNTOWN DEVELOPMENT AUTHORITY OF THE CITY OF AUGUSTA REFUNDING REVENUE BONDS (AUGUSTA PARKING FACILITIES PROJECT), SERIES 2003; AND FOR OTHER PURPOSES: WHEREAS, the Downtown Development Authority of the City of Augusta (the "Authority") has been created pursuant to Article IX, Section VI, Paragraph III of the Constitution of Georgia of 1983 (the "Constitutional Amendment") and the Downtown Development Authorities Law of the State of Georgia (O.C.G.A. S 36-42-1 et seq.), as amended (together with the Constitutional Amendment, the "Act"), and has been activated as required by the terms of the Act, a copy of said activating resolution having been filed with the Secretary of State of Georgia as required by law; and the Authority has been duly and lawfully created, its members have been appointed as provided therein and are currently acting in that capacity; and WHEREAS, the Authority has been created to revitalize and redevelop the centra,l business district of the downtown Augusta area to develop and promote for the public good and general welfare trade, commerce, industry and employment opportunities and to promote the general welfare of the State of Georgia and the Act empowers the Issuer to issue its revenue refunding bonds, in accordance with the applicable provisions of the Revenue Bond Law of the State of Georgia (O.c.G.A. SS 36-82-60-36-82-85), as heretofore and hereafter amended, for the purpose of acquiring, constructing, reconstructing, installing, equipping, extending, adding to or improving any project (as defined in the Act), in furtherance of the public purpose for which it was created; and WHEREAS, the Authority is a "governmental body" within the meaning of the Revenue Bond Law, which authorizes any governmental body to acquire and construct any "undertaking" which includes "public parking areas and public parking buildings"; and WHEREAS, Article IX, Section III, Paragraph I of the Constitution of the State of Georgia authorizes intergovernmental contracts between any". . . county, municipality, school district or political subdivision of the state. . . with each other or any other public agency, public corporation, or public authority for joint services, for the provision of services, or for joint or separate use of facilities or equipment; but such contracts must deal with activities, services and facilities which the contracting parties are authorized by law to undeliake or provide. . ."; and "'HEREAS, under the provisions of Article IX, Section III, Paragraph I1(a) of the Constitution of the State of Georgia and an act of the General Assembly of the State of Georgia (Georgia Laws 1995, p. 3648 et seq.), and pursuant to referenda, as authorized and required by said act, which were held within the City of Augusta (the "City") and Riclmlond County (the "County"), the City and the County were consolidated; and AO 865651.3 WHEREAS, such referenda failed within the corporate limits of the cities of Hepzibah and Blythe and, accordingly, the Consolidated Government does not include the areas within the corporate limits of the cities of Hepzibah and Blythe; and WHEREAS, said act has been amended by subsequent acts, including Georgia Laws 1997, p. 4024 et seq., which amendment is, as follows: Said county-wide government shall be a new political entity, a body politic and corporate, and a political subdivision of the state to be known as "Augusta, Georgia," at times in this Act called the "consolidated government" or "Augusta-Richmond County," having all the governmental and corporate powers, duties, and functions heretofore held by and vested in the City of Augusta and Richmond County, and also the powers, duties, and functions provided in this charter; and WHEREAS, said act, as anlended is hereinafter referred to as the "Consolidation Act" and Augusta, Georgia, consolidated government and Augusta-Richmond County, as referred to in the Consolidation Act, are hereinafter referred to as the "Consolidated Government"; and WHEREAS, pursuant to the Consolidation Act, the Consolidated Government now constitutes a county and a municipality under the laws and the Constitution of the State of Georgia, and is a political subdivision of the State of Georgia in the exercise of the respective powers of a municipality and a county; and WHEREAS, in its exercise of the powers of a municipality, the Consolidated Government does not operate within the corporate limits of the cities of Hepzibah and Blythe; and WHEREAS, pursuant to Act, the Authority IS empowered to contract with the Consolidated Government; and WHEREAS, to finance the cost of acquiring, constructing, improving and equipping a public parking garage (which garage, together with the land on which it is located, is hereinafter referred to as the "1989 Project") located in downtown Augusta, Georgia, the Authority has heretofore issued $2,600,000 in aggregate principal anlOunt of "Downtown Development Authority of the City of Augusta Revenue Bonds (port Royal Parking Center Project), Series 1989" (the "Series 1989 Bonds") pursuant to an Indenture of Trust, dated as of December 1, 1989, between the Authority and Citizens and Southern Trust Company (Georgia), National Association, predecessor to The Bank of New York Trust Company of Florida, N.A., as trustee (the "1989 Indenture"); and WHEREAS, pursuant to a Lease Agreement, dated as of December 1, 1989, between the Authority and the City Council of Augusta (the "1989 Lease"), the Authority leased the 1989 Project to the City of Augusta, and pursuant to the Consolidation Act the 1989 Lease has been assigned to and assumed by the Consolidated Government; and WHEREAS, to finance the cost of acquiring, constructing, improving and equipping another public parking garage (which garage, together with the land on which it is located, is hereinafter referred to as the "1990 Project") located in downtown Augusta, Georgia, the -2- AO 865651.3 Authority has heretofore issued $3,8] 6,000 in aggregate principal amount of "The Downtown Development Authority of the City of Augusta, Georgia Parking Revenue Bonds (Augusta Parking Center Project), Series 1990" (the "Series 1990 Bonds") pursuant to an Indenture of Trust, dated as of June 1, 1990, between the Authority and Bank. South, N.A, predecessor to U.S. Bank National Association, formerly known as U.S. Bank Trust National Association, as trustee (the "]990 Indenture"); and WHEREAS, pursuant to a Lease Agreement, dated as of June 1, 1990, between the Authority and the City Council of Augusta (the "] 990 Lease"), the Authority leased the 1990 Project to the City of Augusta, and pursuant to the Consolidation Act the] 990 Lease has been assigned to and assumed by the Consolidated Government; and \VHEREAS, the Consolidated Government, upon the recommendation of AG. Edwards & Sons Inc. (the "Placement Agent"), and after its own independent investigation, has determined that it is advisable at this time to refund all of the outstanding Series ] 989 Bonds and Series 1990 Bonds (collectively, the "Refunded Bonds") in order to achieve substantial debt service savings estimated to have a net present value of approximately $413 ,000; and WHEREAS, in order to accomplish such refunding, the Consolidated Government proposes that the Authority issue and deliver $4,035,000 aggregate principal amount of its Refunding Revenue Bonds (Augusta Parking Facilities Project), Series 2003 (the "Series 2003 Bonds") in order to provide for the cost of the refunding of the Refunded Bonds as aforesaid; and WHEREAS, the Placement Agent has, on behalf of the Consolidated Government and the Authority, solicited competitive proposals from accredited investors and as a result of the competitive process the Series 2003 Bonds have been placed with Bank of America, N.A, which was the lowest cost proposal; and WHEREAS, the Series 2003 Bonds shall be dated as of the date of issuance and delivery thereot: shall be issued initially in book-entry only form as fully registered bonds without coupons, shall be in the denomination of $100,000 or integral multiples of $5,000 in excess thereof, shall be transferable to subsequent owners as hereinafter provided, shall be numbered R- 1 upward, shall bear interest from date at the rates set forth below opposite each principal maturity, payable on January 1 and July I in each year (each such date an "Interest Payment Date"), commencing July 1, 2003, and the principal thereof shall mature on January 1 in the following years and principal amounts: Year 2004 2005 2006 2007 2008 2009 2010 AO 865651.3 Principal Amount $575,000 535,000 550,000 575,000 585,000 600,000 615,000 -3- Interest Rate 2.56% 2.56 2.56 2.56 2.56 2.56 2.56 WHEREAS, upon provision having been duly and legally made for the redemption of the Refunded Bonds, the 1989 Indenture and the 1990 Indenture shall be deemed satisfied and of no further force and effect and the 1989 Lease and the 1990 Lease shall be terminated; and WHEREAS, pursuant to the 1989 Indenture there was created and is now being maintained a trust fund designated "Downtown Development Authority of the City of Augusta Revenue Bond Fund, Port Royal Parking Center Project" securing the payment of the Series 1989 Bonds and such moneys as shall be necessary and proper shall be withdrawn therefrom, simultaneously with the issuance and delivery of the Series 2003 Bonds hereinafter authorized to be issued, and applied toward the refunding of all of the outstanding Series 1989 Bonds; and WHEREAS, pursuant to the 1990 Indenture there was created and is now being maintained a trust fund designated "The Downtown Development Authority of the City of Augusta, Georgia Parking Revenue Bond Fund" securing the payment of the Series 1990 Bonds and such moneys as shall be necessary and proper shall be withdrawn therefrom, simultaneously with the issuance and delivery of the Series 2003 Bonds hereinafter authorized to be issued, and applied toward the refunding of all of the outstanding Series 1990 Bonds; and WHEREAS, it is necessary at this time that the Consolidated Government authorize and approve the execution and delivery of an Intergovernmental Lease, dated as of March 1, 2003 (the "Lease"), to be effective as of the date of issuance and delivery of the Series 2003 Bonds, pursuant to which the Authority will agree to provide for the operation and maintenance of the 1989 Project and the 1990 Project (collectively, the "Projects") and the Consolidated Government will lease the Projects from the Authority and make lease payments to the Authority in amounts sufficient to enable the Authority to pay the principal of and interest on the Series 2003 Bonds as same become due and payable, all as more fully set forth in the Lease, an unexecuted copy of which being attached hereto as Exhibit "A" and the Lease, by this reference thereto, is incorporated herein and made a part hereof; NOW, THEREFORE, BE IT RESOLVED by the Augusta-Richmond County Conunission, that the Consolidated Government enter into that ce11ain Intergovernmental Lease, dated as of March 1, 2003, with the Authority, and the Lease, having been read and carefully considered, be and the same is hereby approved and the Mayor be and is hereby authorized and directed to execute the Lease and the Clerk of the Augusta-Richmond County Commission be and is hereby authorized and directed to attest same and impress the official seal of the Consolidated Government thereon and the Lease shall be in substantially the form attached as Exhibit A hereto, and by this reference thereto, the Lease is incorporated herein and made a part hereof, subject to such minor changes, insertions or omissions as may be required to accomplish the undertaking contemplated by the parties thereto and as same may be approved by the Mayor and the execution of the Lease by the officers of the Consolidated Government as herein authorized shall be conclusive evidence of such approval. BE IT FURTHER RESOLVED by the authority aforesaid and it is hereby resolved by authority of same, that the issuance by the Authority of its tax-exempt revenue bonds, designated as "Downtown Development Authority of the City of Augusta Revenue Bonds (Augusta Parking Facilities Project), Series 2003" in the aggregate principal amount of $4,100,000 is hereby authorized and approved. -4- AO 865651.3 BE IT FURTHER RESOLVED by the authority aforesaid and it is hereby resolved by authority of same, that the execution and delivery of the Placement Agreement by the Mayor is hereby authorized, approved, ratified and reaffirmed and all of the terms and conditions set forth in the Placement Agreement are hereby accepted. Such execution and delivery of the Placement Agreement signifies the Consolidated Government's acceptance of the sale of the Series 2003 Bonds to the purchasers named or described in the Placement Agreement under the terms and conditions set forth therein. BE IT FURTHER RESOLVED by the authority aforesaid and it is hereby resolved by authority of same, that the placement of the Series 2003 Bonds with, and the sale of the Series 2003 Bonds to, Bank of America, N.A., at a price of 100 percent of the principal amount thereof is hereby approved. BE IT FURTHER RESOLVED by the authority aforesaid and it is hereby resolved by authority of same, that the Mayor and Clerk of the Augusta-Richmond County Commission are hereby authorized and directed to take such further actions and to execute such instruments, agreements, certificates and documents as are necessary to effectuate the foregoing resolutions. BE IT FURTHER RESOLVED by the authority aforesaid and it is hereby resolved by authority of same, that any and all resolutions or parts of resolutions in conflict with this resolution this day adopted be and the same are hereby repealed, and the resolutions shall be in full force and effect from and after its adoption. APPROVED AND ADOPTED March 18,2003. rf By: Title: Jl~ Attest: a/MJJy~'i.. '., /.: - - ..... "'- '- .. ~ ~ ~ . '"'-'\.. ,I (Sm A L):',.' >: - ~ ~~ '., - - -~.'::~ ~~ '.< '/I:CC " , '- , -5- AO 865651.3 CLERK'S CERTIFICATE GEORGIA, RICHMOND COUNTY The undersigned Clerk of the Augusta-Richmond County Commission, DOES HEREBY CERTIFY that the foregoing pages constitute a true and correct copy of the resolution adopted by said Commission at an open public meeting duly called and lawfully assembled on March 18, 2003, at which a quorum was present and acting throughout, authorizing, approving and providing for the entering into of an Intergovemmental Lease, dated as of March 1, 2003, with the Downtown Development Authority of the City of Augusta, the original of said resolution being duly recorded in the Minute Book of the said Commission, which Minute Book is in my custody and control. .'-' . ~ "- $ WITNESS my hand and the official seal of Augusta, Georgia, this March _,2003. I!P~ C erk ) ....,,1 J ,-"'/ .. . ~( (S,~ A L), \or-....,. ..~... f., ,'.,,-: ..' ~----. .-.........'; ~ ::- - .. ",I - ", ~ "It" - . --.. > ~ .. . AO 865651.3 EXHIBIT A INTERGOVERNMENTAL LEASE AO 86565 J.3 After Recording Return To: Matthew W. Nichols Sutherland Asbill & Brennan LLP 999 Peachtree St,'eet, NE Atlanta, Georgia 30309-3996 404.853.8234 INTERGOVERNMENTAL LEASE by and between DOWNTOWN DEVELOPMENT AUTHORITY OF THE CITY OF AUGUSTA and AUGUSTA, GEORGIA Dated as of March 1, 2003 The rights and interest of the Downtown Development Authority of the City of Augusta in this Intergovernmental Lease and the revenues and receipts derived therefrom have been assigned and pledged under a Bond Resolution, adopted March 20, 2003, by the Downtown Development Authority of the City of Augusta. AO 859941.4 T ABLE OF CONTENTS AR TI CLE I DE:FINITI ON S ....... ................. ................................................................................ 5 ART] CL.E II REPR.ESENT A TIONS .......................................................................................... 7 Section 2.1. Representations by the Authority.............................. ........ ..... .... ..... ..... ...... ....... 7 Section 2.2. Representations by the Consolidated Government. ..........................................7 ARTICLE III ISSUANCE OF BONDS; APPLICATION OF BOND PROCEEDS.............. 9 Section 3.1 . Leasing. ............................................................................................................. 9 Section 3.2. Authority Agreements....... ............... ............ .................. ....... .... .......... ........ ...... 9 Section 3.3. Agreement to Issue the Series 2003 Bonds; Application of Bond Proceeds. ... 9 Section 3.4. Operation of the Proj ects. ................................................................................. 9 ARTICLE IV EFFECTIVE DATE OF THIS LEASE; DURATION OF TERM; OPERATION OF THE PROJECTS; LEASE PAYMENT PROVISIONS.......................... 11 Section 4.1. Effective Date of this Lease; Duration of Term.............................................. 11 Section 4.2. Lease Paynlents............................................................................................... 11 Section 4.3. Budget and Development Tax Levy to Pay Lease Payments. ........................ 11 Section 4.4. No Impairment of Tax; Additional Obligations.............................................. 12 Section 4.5. Optional Prepayment; Redemption of Bonds. ................................................ 13 Section 4.6. Obligations of Consolidated Government Hereunder Absolute and UnconditionaL...... ....... .............. ............ ....... ......... .......... ....... .... .......... ...... ..... 13 Secti on 4.7. Enforcement of Obligations. ........................................................................... 13 Section 4.8. No Set-Off. ....... ...... ....... ....... ....... ....... ..... .................... ...... ......... ... ..... .......... ... 14 ARTICLE V SPECIAL COVENANTS OF CONSOLIDATED GOVERNMENT ............. 15 Section 5.1. Use of Proceeds and Speciflc Tax Covenant. ................................................. 15 Secti on 5.2. Arbi trage Covenants. ...................................................................................... 15 Section 5.3. Rules and Regulations. ................. ....... ....... ..... ........ ................. .......... ............. 16 Section 5.4. Contracting Procedure. ... .... ..... ....... ......... ... ................. ............. .......... ... ..... .... 16 Section 5.5. .Liens. ........... ......... ........... .......... .... ....... ....... ........................ ..... ......... ..... ......... 16 Section 5.6. Tnsurance. ........ .... ....... ..... ........... .... ....... ..... .... .......... ................ .... ...... ..... ... ..... 16 ARTICLE VI SPECIAL COVENANTS AND AGREEMENTS OF THE AUTHORITY.. 18 Section 6.1. No Warranty of Condition or Suitability by the Authority............................. 18 Section 6.2. Tnspection ofthe Projects................................................................................ 18 Section 6.3. Granting of Easements; Conveyance; Sale. ....................................................18 Section 6.4. FUliher Assurances and Corrective Instruments, Recordings and Filings. ..... 18 Section 6.5. Release Covenants. ......................................................................................... 19 ARTICLE VII EVENTS OF DEFAULT AND REMEDIES.................................................. 20 Section 7.1. Events of Default Defined. .............................................................................20 Secti on 7.2. Remedies on Default....................................................................................... 20 Section 7.3. No Remedy Exclusive..................................................................................... 21 Section 7.4. No Additional Waiver Implied by One Waiver. .............................................21 -]- AO 859941.4 ARTICLE VIII OPTION OF CONSOLIDATED GOVERNMENT .................................... 22 Section 8.]. Unqualified Option to Purchase. ..................................................................... 22 Section 8.2. Purchase Price. . ........ ............. ....... ....... ......................... ..... .... ........... ... ..... ....... 22 Section 8.3. Procedure For Exercising Option to Purchase. ...............................................22 A.R TICLE IX MlSCELLANEO US ........................................................................................... 23 Section 9.1. Agreement to Pay Attorneys' Fees and Expenses. ......................................... 23 Section 9.2. Indemnification. ........ ............ ...... ..... ... ....... ............. ............ ..... ......... ...... ..... ... 23 Section 9.3. Notices. ..... ......... ...... ....... ..... ... ........ .... .......... ..... ................... ......... ..... ............ 24 Section 9.4. Bind ing Effect. ................................................................................................ 24 Section 9.5. Severability. .... .... .............. ........ .............. ... ....... ...... .......... ....... ....... ........ .... .... 24 Section 9.6. Amounts Remaining in Sinking Fund. ...........................................................24 Section 9.7. Amendments, ChcU1ges and Modifications. .................................................... 24 Section 9.8. Execution Counterparts. .......... ............ ..... ....... ....... ...... ....... ......... ..... ....... .... ... 24 Section 9.9. Captions. .......... ......... ..... ..... ..... ..... ....... ....... ....... ...... ............ ... ......... ..... ... ....... 24 Section 9.10. Law Governing Lease. .................................................................................... 25 Section 9.11. Consolidated Government a Party to Validation. ........................................... 25 Secti on 9.12. Redemption of Bonds. .................................................................................... 25 EXHIBIT A-Legal Description -11- AO 859941.4 INTERGOVERNMENTAL LEASE TillS INTERGOVERNMENT AL LEASE (the "Lease") is entered into by and between the DOWNTOWN DEVELOPMENT AUTHORITY OF THE CITY OF AUG UST A (the "Authority"), a public body corporate and politic duly created and organized pursuant to Article IX, Section VI, Paragraph III of the Constitution of Georgia of 1983 and the Dovmtown Development Authorities Law of the State of Georgia (O.C.G.A. SS 36-42-1-36-42- 16) (collectively, the "Act"), acting by and through its governing body and pursuant to a resolution duly adopted, and AUGUST A, GEORGIA (the "Consolidated Government"), a political subdivision of the State of Georgia, created under the laws of the State of Georgia, acting by and through its governing body and pursuant to a resolution duly adopted, and said Lease shall be dated as of March 1, 2003, and same shall become effective as of the date of the issuance and delivery of Downtown Development Authority of the City of Augusta Refunding Revenue Bonds (Augusta Parking Facilities Project), Series 2003. WIT N E SSE T H: WHEREAS, the Authority has heretofore been created pursuant to the Act and been duly activated and organized and its members are now performing their duties and are serving in the furtherance of the purpose for which the Authority was created; and WHEREAS, the Authority has been created to revitalize and redevelop the central business district of the downtown Augusta area to develop and promote for the public good and general welfare trade, COl1ll1lerce, industry and employment opportunities and to promote the general welfare of the State of Georgia and the Act empowers the Issuer to issue its revenue refunding bonds, in accordance with the applicable provisions of the Revenue Bond Law of the State of Georgia (O.C.G.A. SS 36-82-60-36-82-85), as heretofore and hereafter amended, for the purpose of acquiring, constructing, reconstructing, installing, equipping, extending, adding to or improving any project (as defined in the Act), in furtherance ofthe public purpose for which it was created; and WHEREAS, the Authority is a "governmental body" within the meaning of the Revenue Bond Law, which authorizes any governmental body to acquire and construct any "undertaking" which includes "public parking areas and public parking buildings"; and WHEREAS, Article IX, Section III, Paragraph I of the Constitution of the State of Georgia authorizes intergovernmental contracts between any". . . county, municipality, school district or political subdivision of the state. . . with each other or any other public agency, public corporation, or public authority for joint services, for the provision of services, or for joint or separate use of facilities or equipment; but such contracts must deal with activities, services and facilities which the contracting parties are authorized by law to undertake or provide. . ."; and WHEREAS, under the provisions of Article IX, Section III, Paragraph Il(a) of th~ Constitution of the State of Georgia and an act of the General Assembly of the State of Georgia (Georgia Laws 1995, p. 3648 et seq.), and pursuant to referenda, as authorized and required by AO 859941.4 said act, which were held within the City of Augusta (the "City") and Richmond County (the "County"), the City and the County were consolidated; and WHEREAS, such referenda failed within the corporate limits of the cities of Hepzibah and Blythe and, accordingly, the Consolidated Government does not include the areas within the corporate limits of the cities of Hepzibah and Blythe; and WHEREAS, said act has been amended by subsequent acts, including Georgia Laws 1997, p. 4024 et seq., which amendment is, as follows: Said county-wide govermnent shall be a new political entity, a body politic and corporate, and a political subdivision of the state to be known as "Augusta, Georgia," at times in this Act called the "consolidated government" or "Augusta-Richmond County," having all the governmental and corporate powers, duties, and functions heretofore held by and vested in the City of Augusta and Richmond County, and also the powers, duties, and functions provided in this charter; and WHEREAS, said act, as amended is hereinafter referred to as the "Consolidation Act" and Augusta, Georgia, consolidated government and Augusta-Richmond County, as referred to in the Consolidation Act, are hereinafter referred to as the "Consolidated Government"; and WHEREAS, pursuant to the Consolidation Act, the Consolidated Government now constitutes a county and a municipality under the laws and the Constitution of the State of Georgia, and is a political subdivision of the State of Georgia in the exercise of the respective powers of a municipality and a county; and WHEREAS, in its exercise of the powers of a municipality, the Consolidated Government does not operate within the corporate limits of the cities of Hepzibah and Blythe; and WHEREAS, pursuant to Act, the Authority IS empowered to contract with the Consolidated GovenU11ent; and \VHEREAS, to finance the cost of acquiring, constructing, improving and equipping a public parking garage (which garage, together with the land on which it is located, is hereinafter referred to as the "1989 Project") located in downtown Augusta, Georgia, the Authority has heretofore issued $2,600,000 in aggregate principal amount of "Downtown Development Authority of the City of Augusta Revenue Bonds (Port Royal Parking Center Project), Series 1989" (the "Series 1989 Bonds") pursuant to an Indenture of Trust, dated as of December 1, 1989, between the Authority and Citizens and Southern Trust Company (Georgia), National Association, predecessor to The Bank of New York Trust Company of Florida, N.A., as trustee (the" 1989 lndenture"); and WHEREAS, pursuant to a Lease Agreement, dated as of December 1, 1989, between the Authority and the City Council of Augusta (the "1989 Lease"), the Authority leased the 1989 Project to the City of Augusta, and pursuant to the Consolidation Act the 1989 Lease has been assigned to and assumed by the Consolidated Government, which has covenanted and agreed to -2- AO 859941.4 make payments to the Authority in amounts sufficient to enable the Authority to pay the principal of and interest on the Series 1989 Bonds as same become due and payable; and WHEREAS, to finance the cost of acquiring, constructing, improving and equipping another public parking garage (which garage, together with the land on which it is located, is hereinafter referred to as the "1990 Project") located in downtown Augusta, Georgia, the Authority has heretofore issued $3,816,000 in aggregate principal amount of "The Downtown Development Authority of the City of Augusta, Georgia Parking Revenue Bonds (Augusta Parking Center Project), Series 1990" (the "Series 1990 Bonds") pursuant to an Indenture of Trust, dated as of June 1, 1990, between the Authority and Bank South, N.A., predecessor to U.S. Bank National Association, formerly known as U.S. Bank Trust National Association, as trustee (the" 1990 Indenture"); and WHEREAS, pursuant to a Lease Agreement, dated as of June 1, 1990, between the Authority and the City Council of Augusta (the" 1990 Lease"), the Authority leased the 1990 Project to the City of Augusta, and pursuant to the Consolidation Act the 1990 Lease has been assigned to and assumed by the Consolidated Government, which has covenanted and agreed to make payments to the Authority in amounts sufficient to enable the Authority to pay the principal of and interest on the Series 1990 Bonds as same become due and payable; and WHEREAS, the Authority, at the request of the Consolidated Government and upon the recommendation of A.G. Edwards & Sons Inc. (the "Placement Agent"), and after its own independent investigation, has determined that it is advisable at this time to refund all of the outstanding Series 1989 Bonds and Series 1990 Bonds (collectively, the "Refunded Bonds") in order to achieve substantial debt service savings estimated to have a net present value of approximately $413,000; and \VHEREAS, in order to accomplish such refunding, pursuant to a resolution duly adopted by the Authority on March 20, 2003 (the "Bond Resolution"), the Authority has authorized the issuance and delivery of $4,035,000 aggregate principal amount of its Refunding Revenue Bonds (Augusta Parking Facilities Project), Series 2003 (the "Series 2003 Bonds") in order to provide for the cost of the ref.unding of the Refunded Bonds as aforesaid; and WHEREAS, upon provision having been duly and legally made for the redemption of the Refunded Bonds, the 1989 Indenture and the 1990 Indenture shall be deemed satisfied and of no further force and effect and the 1989 Lease and the 1990 Lease shall be terminated; and WHEREAS, the Series 2003 Bonds shall be dated as ofthe date of issuance and delivery thereof, shall be issued initially in book-entry only form as fully registered bonds without coupons, shall be in the denomination of $100,000 or integral multiples of $5,000 in excess thereof, shall be transferable to subsequent owners as hereinafter provided, shall be numbered R- 1 upward, shall bear interest from date at the rates set forth below opposite each principal maturity, payable on January 1 and July 1 in each year (each such date an "Interest Payment Date"), commencing July 1, 2003, and the principal thereof shall mature on January 1 in the following years and principal amounts: -3- AO 859941.4 Year 2004 2005 2006 2007 2008 2009 2010 Principal Amount $575,000 535,000 550,000 575,000 585,000 600,000 615,000 Interest Rate 2.56% 2.56 2.56 2.56 2.56 2.56 2.56 WHEREAS, the 1989 Project and 1990 Project are located on the real property described specifically on Exhibit A hereto (the "Project Sites"); and \VHEREAS, the Authority has received an economic report, attached as Exhibit B to the Bond Resolution, with respect to the favorable economic effects of the Projects; and WHEREAS, the Authority and the Consolidated Government are desirous of entering into this Lease, pursuant to which the Authority has agreed to issue the Series 2003 Bonds to provide funds to enable the Authority to refund the Refunded Bonds and lease the 1989 Project and the 1990 Project and the Project Sites (collectively the "Projects") to the Consolidated Government, and the Consolidated Government has agreed to operate and maintain the Projects for the benefit of the citizens of the Consolidated Government and make payments to the Authority in amounts sufficient to enable the Authority to pay the principal of and interest on the Series 2003 Bonds as san1e become due and payable, all as more fully set forth herein. NOW, THEREFORE, in consideration of the premises and undertakings as hereinafter set forth, it is agreed by the Authority and the Consolidated Government, each acting by and through its duly authorized officers, pursuant to resolutions duly adopted and properly passed, and in consideration of the respective considerations and contracts hereinafter contained, the Authority and the Consolidated Government hereby agree, as follows: AO 859941.4 -4- ARTICLE I DEFINITIONS In addition to the words and terms elsewhere defined in this Lease, the following words and terms as used in this Lease shall have tl~e following meanings unless the context or use indicates another or different meaning or intent and such definitions shall be equally applicable to both the singular and plural forms of the words and terms herein defined: "Act" means, collectively, Article IX, Section VI, Paragraph III of the Constitution of Georgia of 1983 and the Downtown Development Authorities Law of the State of Georgia (O.C.G.A. SS 36-42-1-36-42-16.), as anlended. "Additional Bonds" shall mean any revenue bonds of the Authority ranking on a parity with the Series 2003 Bonds which may hereafter be issued pursuant to Section 505 of the Bond Resolution. "Authority" shall mean the Downtown Development Authority of the City of Augusta, its successors and assigns. "Bond Registrar" means the bank, trust company or other financial institution appointed by the Authority pursuant to the Bond Resolution or any supplemental resolution to maintain, in accordance with the provisions of the Bond Resolution and any supplemental resolution, the registration books of the Authority for the Bonds secured by the Bond Resolution. "Bond Resolution" means that certain Bond Resolution of the Authority adopted March 20, 2003, authorizing the issuance of the Series 2003 Bonds. "Bondowner" and "bond owner" means the registered owner of any of the outstanding Bonds. "Bonds" shall mean any revenue bonds authorized by and issued pursuant to the Bond Resolution, including the Series 2003 Bonds and any Additional Bonds of the Authority issued pursuant to the Bond Resolution. "Code" means the Internal Revenue Code of 1986, as amended. "Consolidated Government" means Augusta, Georgia, its successors and assigns. "Interest Payment Date" shall mean January I and July I of each year. "Lease" means this Intergovernmental Lease, dated as of March 1, 2003, to be effective as of the date of issuance and delivery of the Series 2003 Bonds, by and between the Authority and the Consolidated Government, with respect to the Projects, as hereafter supplemented or amended. "Lease Payments" or "Lease Payment" means an amount to be paid by the Consolidated Government to the Authority in an amount equal to the principal of and the interest -5- AO 859941.4 on the Bonds coming due on the next succeeding January 1 and an amount equal to the interest on the Bonds coming due on the next succeeding July 1 in each year; provided, however, the Consolidated Govemment shall receive a credit against any required Lease Payment to the extent moneys are on deposit in the Sinking Fund and available to pay debt service on the Bonds coming due on the next succeeding January 1 or July 1, as the case may be. In addition to the foregoing, each Lease Payment shall include the charges as billed specified in subparagraphs (t), (g) and (h) of Section 503 of the Bond Resolution and any deficit in any preceding Lease Payment. "Lease Payments" or "Lease Payment" means an amount equal to the principal of and the interest on the Bonds coming due on the next succeeding June 1 and an amount equal to the interest on the Bonds coming due on the next succeeding December 1 in each year; provided, however, the Consolidated Government shall receive a credit against any required Lease Payment to the extent moneys are on deposit in the Sinking Fund and available to pay debt service on the Bonds coming due on the next succeeding January 1 or July 1, as the case may be. In addition to the foregoing, each Lease Payment shall include the charges as billed specified in subparagraphs (t), (g) and (h) of Section 503, Article V of the Bond Resolution and any deficit in any preceding Lease Payment. "Paying Agent" means the bank, trust company or other financial institution appointed by the Authority with the consent of the Consolidated Government to serve as paying agent, in accordance with the terms of the Bond Resolution and any supplemental resolution provided any successor shall be a commercial bank or trust company. "Permitted Investments" has the meaning assigned to such term 111 the Bond Resolution. "Revenue Bond Law" means the Revenue Bond Law of the State of Georgia (O.C.G.A. ~~ 36-82-60-36-82-86), as amended, and as same may hereafter be amended from time to time. "Series 2003 Bonds" means the Downtown Development Authority of the City of Augusta Refunding Revenue Bonds (Augusta Parking Facilities Project), Series 2003 in an aggregate principal amount of $4,035,000 authorized to be issued pursuant to Article II of the Bond Resolution. "Sinking Fund" shall mean the Downtown Development Authority of the City of Augusta Sinking Fund-Augusta Parking Facilities Project created in Article V, Section 501, of the Bond Resolution. "Sinking Fund Custodian" means the commercial bank or trust company appointed by the Authority with the approval of the Consolidated Government as depository of Sinking Fund. "Sinking Fund Year" shall mean the period commencing on January 2 in each year and extending through January 1 in the next year. "Term" shall have the meaning specified in Section 4.1 hereof. -6- AO 859941.4 ARTICLE II REPRESENT A TIONS Section 2.1. Representations by the Authority. The Authority makes the following representations as the basis for the undertakings on its part herein contained: (a) The Authority is authorized to enter into the transactions contemplated by this Lease and to carry out its obligations hereunder, has been duly authorized to execute and deliver this Lease, and will do or cause to be done all things necessary to preserve and keep in full force and effect its status and existence. (b) The issuance and sale of the Series 2003 Bonds, the execution and delivery of this Lease, the adoption of the Bond Resolution, and the performance of all covenants and agreements of the Authority contained in this Lease and the Bond Resolution and of all other acts and things required under the Constitution and laws of the State of Georgia to make this Lease a valid and binding obligation of the Authority in accordance with its terms are authorized by law and have been duly authorized by proceedings of the Authority adopted at public meetings thereof duly and lawfully called and held. (c) The Authority has not made, done, executed or suffered, and warrants that it will not make, do, execute or suffer any act or thing whereby its leasehold interest in the Project Sites or its title to and interest in the Projects will or may be, impaired or encumbered in any manner except as permitted herein and the Bond Resolution and except for acts or things done or permitted by the Consolidated Government. (d) There is no litigation or proceeding pending, or to the knowledge of the Authority threatened, against the Authority or against any person having a material adverse effect on the right of the Authority to execute this Lease or the ability of the Authority to comply with any of its obligations under this Lease. Section 2.2. Representations by the Consolidated Government. The Consolidated Government makes the following representations and agreements: (a) The Consolidated Government is a political subdivision of the State of Georgia, legally created and validly existing under the laws of the State of Georgia having power to enter into and execute and deliver this Lease, and, by proper action of its governing body, has authorized the execution and delivery of this Lease and the taking of any and all such actions as may be required on its part to carry out, give effect to and consummate the transactions contemplated by this Lease and the Bond Resolution, and no approval or other action by any governmental authority, agency or other person is required in connection with the execution, delivery and performance of this Lease by it except as shall have been obtained as of the date hereof. -7- AO 859941.4 (b) This Lease has been duly authorized, executed and delivered by the Consolidated Govenunent and constitutes its legal, valid and binding obligation enforceable in accordance with its ten11s, except as enforcement may be limited by the application of equitable principles. (c) The authorization, execution, delivery, and perfoffilance by the Consolidated Government of this Lease and compliance by the Consolidated Government with the provisions thereof do not violate the laws of the State of Georgia relating to the Consolidated Government or constitute a breach of or a default under any other law, court order, administrative regulation or legal decree, or any agreement or other instrument to which it is a party or by which it is bound. (d) There is no litigation or proceeding pending, or to the knowledge of the Consolidated Government threatened, against the Consolidated Government or any other person having a material adverse affect on the right of the Consolidated Government to execute this Lease or its ability to comply with any of its obligations under this Lease. -8- AO 859941.4 ARTICLE III ISSUANCE OF BONDS; APPLICATION OF BOND PROCEEDS Section 3.1. Leasing. The Authority hereby leases to the Consolidated Government, and the Consolidated Government hereby leases from the Authority, the Projects at the rental set forth in Section 4.2 hereof, for the Term set forth in Section 4.1 hereof and in accordance with the provisions of this Lease. The Authority makes no warranties to the Consolidated Government with respect to the Projects. Section 3.2. Authority Agreements. The Authority hereby agrees to proceed as promptly as possible with the adoption of the Bond Resolution and acquisition by redemption, payment or otherwise of the Refunded Bonds. The Bond Resolution to be adopted by the Authority shall provide for the creation and maintenance of the Sinking FWld. All Lease Payments received by the Authority shall be deposited directly into the Sinking Fund for the account of the Authority and used to pay the principal of and interest on the Series 2003 Bonds as the same shall become due and payable; provided, however, Lease Payments required pursuant to subparagraphs (f), (g) and (h) of Section 503 of the Bond Resolution shall not be deposited directly into the Sinking Fund but shall be paid by the Consolidated Government, on behalf of and for the account of the Authority, to the persons or entities required and for the purposes set forth in the Bond Resolution. All Lease Payments received by the Authority, including the investment earnings thereon, shall not be commingled with any other funds of the Authority or of any other person or entity and any such moneys so received shall be used as provided herein or in the Bond Resolution. Section 3.3. Agreement to Issue the Series 2003 Bonds; Application of Bond Proceeds. The Authority agrees that it will promptly adopt the Bond Resolution authorizing the issuance of the Series 2003 Bonds and proceed with the validation and issuance thereof. The proceeds from the sale of the Series 2003 Bonds shall be applied as provided in the Bond Resolution and the Consolidated Government hereby approves the issuance of the Series 2003 Bonds. The Authority shall deliver a certified copy of the Bond Resolution to the Consolidated Government promptly upon adoption thereof. Section 3.4. Operation of the Projects. The Consolidated Government hereby agrees during the Term hereof to operate and maintain the Projects or cause the Projects to be operated and maintained. The Consolidated Government shall cause the Projects to be operated and maintained economically, efficiently and consistent with good business practices and in compliance with the terms of the laws, regulations and ordinances of any federal, state or county government having jurisdiction over the operation of such Projects. The Consolidated Government shall at all times maintain the Projects or cause the Projects to be operated and maintained in good condition and repair and shall promptly -9- AO 859941.4 repair, replace or restore any damage or destruction to the Projects or cause the proceeds from insurance from such damage or destruction to be applied in accordance with the terms hereof. -10- AO 8599414 ARTICLE IV EFFECTIVE DATE OF THIS LEASE; DURATION OF TERM; OPERA TION OF THE PROJECTS; LEASE PAYMENT PROVISIONS Section 4.1. Effective Date of this Lease; Duration of Term. This Lease is dated as of March I, 2003, but shall be effective as of the date of issuance and delivery of the Series 2003 Bonds, and the interest created by this Lease shall then begin, and, subject to the other provisions of this Lease (including particularly Article VIII hereof), shall expire January 2, 2010, or if at said time and on said date all of the Bonds have not been paid in full as to principal, interest and premium, if any, or provision for payment shall have not been duly provided therefor then on such date as such payment shall have been made or provision for the payment thereof shall have been duly provided for, but in no event in excess of 50 years from the date hereof. Section 4.2. Lease Payments. On or before the business day next preceding January I and July 1 of each year, commencing with the business day next preceding January 1, 2004, the Consolidated Government shall make the Lease Payments to the Authority. If such date is prior to any January I, the Consolidated Government shall pay an amount sufficient to enable the Authority to pay in full the principal of and interest on the Series 2003 Bonds and any Additional Bonds hereafter issued pursuant to the Bond Resolution coming due on such January 1, and if such date is prior to any July 1, the Consolidated Government shall pay an amount sufficient to enable the Authority to pay in full the interest on the Bonds coming due on such July 1, and such Lease Payments shall continue and recontinue until provision has been made for the payment in full of the Bonds as to principal, interest and premium, if any. In addition to the foregoing, each Lease Payment shall include the charges as billed specified in subparagraphs (f), (g) and (h) of Section 503 of the Bond Resolution. In addition, the Lease Payments shall include any amounts required to be paid pursuant to Section 504 of the Bond Resolution. The Lease Payments provided for herein shall be made by payment directly to the Sinking Fund Custodian for deposit into the Sinking Fund, for the account of the Authority (except the amounts billed which are specified in subparagraphs (f), (g) and (h) of Section 503 of the Bond Resolution). Section 4.3. Budget and Development Tax Levy to Pay Lease Payments. (a) The Consolidated Government will levy an annual ad valorem tax (the "Development Tax Levy") as may be necessary so as to enable the Consolidated Government to make the Lease Payments at such rate or rates within the three mill limitation authorized by law, or such greater amount as may hereafter be provided by law, beginning with the year 2003, and from year to year thereafter, on all property located within the boundaries of the Consolidated Government (excluding the areas within the corporate limits of the cities of Hepzibah and Blythe) subject to taxation for such purpose, as now existent and as same may hereafter be extended. Nothing herein contained, however, shall be construed as limiting the right of the Consolidated Government to pay the obligations hereunder assumed out of general funds or from -11- AO 859941.4 other sources lawfully available for such purpose or as requiring the Consolidated Government to levy an ad valorem tax in contravention of the limits prescribed by law. (b) The Consolidated Government further covenants and agrees that in order to make funds available for such purpose, it will, in its general revenue, appropriation and budgetary measures whereby its tax funds or revenues and the allocation thereof are controlled or provided for, include sums sufficient to satisfy any such Lease Payments that may be required to be made, whether or not any other sums are included in such measure, until all payments so required to be made shall have been made in full. The obligation of the Consolidated Government to make the Lease Payments shall constitute a pledge of the taxing power of the Consolidated Government, to the extent provided by law, to provide the funds required to fulfill such obligation; provided, however, nothing herein contained shall be construed as limiting the right of the Consolidated Government to pay the obligations hereunder assumed out of its general funds or from other sources lawfully available to it for such purpose. (c) In the event for any reason any such provision or appropriation is not made as provided in the preceding subsection (b), then the fiscal officers of the Consolidated Government are hereby authorized and directed to set up as an appropriation on their accounts in the appropriate fiscal year the amounts required to pay the obligations which may be due from the general funds of the Consolidated Government, to the extent such funds are legally available for such pUl1Jose. The amount of such appropriation shall be due and payable and shall be expended for the purpose of paying any such obligations, and such appropriation shall have the same legal status as if the Consolidated Government had included the amount of the appropriation in its general revenue, appropriation and budgetary measures, and the fiscal officers of the Consolidated Government shall make such Lease Payments to the Sinking Fund Custodian for deposit to the Sinking Fund if for any reason the payment of such obligations shall not otherwise have been made. Section 4.4. No Impairment of Tax; Additional Obligations. (a) So long as any Bonds remain outstanding, the Consolidated Government shall not cease to levy and collect, or reduce the rate of, the Development Tax Levy in any maImer that will impair the interest and rights of the holders of any Bonds then outstanding. The agreement by the Consolidated Government set forth in this Section 4.4 shall be for the benefit of the Authority and for the benefit of the bondholders and, upon the issuance of any Bonds, shall constitute a contract with the holders of such Bonds. (b) The Consolidated Government covenants and agrees for the benefit of the owners of the Bonds that it shall not incur or permit to be incurred any obligations payable from the Lease Payments or the Development Tax Levy, including Additional Bonds, or otherwise encumber the Development Tax Levy or the revenues derived therefrom, unless it shall determine based on a certificate of its chief financial officer or an independent accountant that the levy of the Development Tax Levy on the most recently completed tax digest will equal or exceed 1.5 times the maximum annual payments on the Series 2003 Bonds, any Additional Bonds and on the obligations proposed to be issued. -12- AO 859941.4 Section 4.5. Optional Prepayment; Redemption of Bonds. The Series 2003 Bonds shall not be subject to redemption prior to maturity. Section 4.6. Obligations of Consolidated Government Hereunder Absolute and Unconditional. The obligations of the Consolidated Government to make the payments required in Section 4.2 hereof and to perform and observe any and all of the other covenants and agreements on its part contained herein shall be absolute and unconditional irrespective of any defense or any rights of setoff, recoupment, or counterclaim it may otherwise have against the Authority. Until such time as the principal of and interest and premium, if any, on the Bonds outstanding under the Bond Resolution shall have been paid in full or provision for the payment thereof shall have been made in accordance with the Bond Resolution, the Consolidated Government (i) will not suspend, abate, reduce, abrogate, diminish, postpone, modify or discontinue the Lease Payments provided for herein, (ii) will perform and observe all of its other agreements contained in this Lease, and (iii) will not terminate the Term of this Lease or its obligations hereunder for any contingency, act of God, event, or cause whatsoever, including, without limiting the generality of the foregoing, any acts or circumstances that may constitute failure of consideration, eviction or constructive eviction, destruction of or damage to the Projects, commercial frustration of purpose, any change in the tax or other laws of the United States of America or of the State of Georgia or any political subdivision of either, any declaration or finding that any of the Bonds are unenforceable or invalid, the invalidity of any provision of this Lease, or any failure of the Authority to perform and observe any agreement, whether express or implied, or any duty, liability or obligation arising out of or connected with this Lease or the Bond Resolution. Nothing contained in this Section shall be construed to release the Authority from the performance of any of the agreements on its part contained herein or in the Bond Resolution; and if the Authority should fail to perform any such agreement, the Consolidated Government may institute such action against the Authority as the Consolidated Government may deem necessary to compel performance or recover its damages for nonperformance as long as such action shall not adversely affect the agreements on the part of the Consolidated Government contained in this Lease and to make the Lease Payments specified herein. The Consolidated Government may, however, at its own cost and expense and in its own name, prosecute or defend any action or proceeding or take any other action involving third persons which the Consolidated Government deems reasonably necessary in order to insure the operation and maintenance of the Projects or to secure or protect its rights hereunder, and in such event the Authority hereby agrees to cooperate to the extent required so long as the Authority's interests in the Projects would not be adversely affected. Section 4.7. Enforcement of Obligations. The obligation of the Consolidated Government to make Lease Payments under this Article may be enforced by (i) the Authority, (ii) the owners of any Bonds, in accordance with the applicable provisions of the Bond Resolution and independently of the Authority or, (iii) such receiver or receivers as may be appointed pursuant to the Bond Resolution or applicable law. The covenants and agreements hereunder including specifically the obligation to make the Lease Payments shall be enforceable by specific performance; it being acknowledged and agreed -13- AO 859941.4 by the Authority and the Consolidated Government that no other remedy at law is adequate to protect the interests of the parties hereto. Section 4.8. No Set-Off. No breach, default or failure by the Authority to comply with the provisions of this Lease shall permit an abatement or reduction in or set-off against the Lease Payments due from the Consolidated Government. Nothing in tlns Lease shall otherwise impair, diminish or affect any other right or remedy available to the Consolidated Government (i) as a result of the Authority's breach, default or failure under this Lease, or (ii) to enforce the obligations of the Authority under tlns Lease. No dispute or litigation between the Authority and the Consolidated Government with respect to this Lease shall affect any party's duties to perform its obligations or its rights or remedies while such dispute or litigation is pending. -14- AO 85994/.4 ARTICLE V SPECIAL COVENANTS OF CONSOLIDATED GOVERNMENT The Consolidated Government covenants and agrees with the Authority for the benefit of the bondowners as follows; Section 5.1. Use of Proceeds and Specific Tax Covenant. That the Series 2003 Bonds are being issued by the Authority in compliance with the conditions necessary for interest income on the Series 2003 Bonds to be excluded from gross income for federal income tax purposes pursuant to the provisions of Section 103(a) of the Code relating to obligations of the State or political subdivisions thereof. It is the intention of the Authority and the Consolidated Government that the interest on the Series 2003 Bonds be and remain excludable from gross income for federal income tax purposes, and, to that end, the Consolidated Government hereby covenants with the owners of the Series 2003 Bonds as follows; (a) That it will not take any action, or fail to take any action, if any such action or failure to take action would adversely affect the tax exempt status of interest on the Series 2003 Bonds under Section 103 of the Code. (b) That it will not directly or indirectly use or permit the use of any of the proceeds of the Series 2003 Bonds or take or omit to take any action in a way that would cause the Series 2003 Bonds to be (i) "private activity bonds" within the meaning of Section 141 of the Code or (ii) obligations which are "federally guaranteed" within the meaning of Section 149(b) of the Code. (c) That it will not directly or indirectly use or permit the use of any proceeds of the Series 2003 Bonds or any other funds of the Consolidated Government or take or omit to take any action that would cause the Series 2003 Bonds to be "arbitrage bonds" within the meaning of Section ] 48 of the Code. To that end, the Consolidated Government will comply with all requirements of Section 148 of the Code and any regulations promulgated thereunder to the extent applicable to the Consolidated Government. In the event that at any time the Consolidated Government or the Authority is of the opinion that for purposes of this Section it is necessary to restrict or limit the yield on the investment of any moneys held under the Bond Resolution, the Authority and the Consolidated Government shall take such action as may be necessary to effect the same. Section 5.2. Arbitrage Covenants. That it will not, subsequent to the date of the issuance and delivery of the Series 2003 Bonds, intentionally use any p0l1ions of the proceeds of the Series 2003 Bonds to acquire higher yielding investments, or to replace funds which were used directly or indirectly to acquire higher yielding investments, except as may otherwise be pemlitted by the Code or the regulations promulgated thereunder, including, but not limited to, complying with the requirements of Section ] 48(f) of the Code and the regulations promulgated thereunder and the payment of -15- AO 859941.4 rebate, if any, required to be made by the Authority, and that it will expend the proceeds of the Series 2003 Bonds in compliance with the applicable provisions of Sections 141 to 150, inclusive, of the Code. Section 5.3. Rules and Regulations. That it will enforce or cause to be enforced reasonable rules and regulations governing the implementation, operation and use of the Projects and that all compensation, salaries, fees and wages paid or caused to be paid by it in connection with the operation, repair and maintenance of the Projects will be reasonable, and that no more persons will be employed than are necessary, and that it will operate or cause to be operated same in an efficient and economical manner, and will at all times maintain or cause to be maintained the san1e in good repair and in sound operating condition, and will make or cause to be made all necessary repairs, renewals and replacements, and that it will comply or cause to be complied with all valid acts, rules, regulations, orders and directions of any legislative, executive, administrative or judicial body applicable to such undertaking and enterprise. Section 5.4. Contracting Procedure. That any contract relating to the installation, extension, improvement, maintenance or repair of any facilities shall provide for retention of amounts due thereunder in accordance with applicable law. Section 5.5. Liens. That, except as herein provided, the Consolidated Government will not create or suffer to be created, in the operation and maintenance of the Projects, any lien, security interest or charge thereon, or any part thereof, and that it will pay, or cause to be discharged, or will make adequate provisions to satisfY and discharge, within 60 days after the same shall accrue, all lawful claims and demands for labor, materials, supplies or other objects, which, if unpaid, might by law become a lien upon the Projects; provided, however, that nothing contained in this Section shall require the Consolidated Government to pay, or cause to be discharged, or make provision for, any such lien, security interest or charge, so long as the validity thereof shall be contested in good faith and by appropriate legal proceedings. Section 5.6. Insurance. That it shall procure and maintain or cause to be maintained insurance on the Projects of the kinds and in the amounts normally carried by private companies or other agencies engaged in the operation of similar projects as part of similar operations so long as any Bonds are outstanding. Such insurance shall include: (a) fire and extended coverage insurance on the insurable portions of the Projects with a responsible insurance company or companies authorized and qualified to do business under the laws of the State of Georgia; (b) public liability insurance relating to the operation of the Projects. Such insurance may provide reasonable and customary coverage and deductibles for agencies and governmental authorities operating similar facilities, provided that such insurance in such amount is available at a cost which, in the opinion of the Consolidated Government, will not impose an unreasonable financial burden, or the Consolidated Government may self insure against such claims and risks, or the Consolidated -16- AO 859941.4 Government, in its discretion, may provide for any combination of the foregoing. The proceeds of such fire and extended coverage policies are pledged as security for the Lease Payments, but shall be available for and shall, to the extent necessary and desirable, be applied to the repair and replacement of the damaged or destroyed property. In the event the proceeds of such policies ar~ not used for that purpose, then same shall be deposited in the Sinking Fund. All insurance policies shall be open to the inspection of the bondowners or their duly authorized representatives at all reasonable times. All insurance policies shall name the Authority as an additional insured. -17- AO 859941.4 ARTICLE VI SPECIAL COVENANTS AND AGREEMENTS OF THE AUTHORITY The Authority hereby covenants and agrees with the Consolidated Government as follows: Section 6.1. No Warranty of Condition or Suitability by the Authority. The Authority makes no walTanty, either express or implied, as to the condition of the Projects or that they are suitable for the Consolidated Government's purposes or needs. Section 6.2. Inspection of the Projects. The Consolidated Government agrees that the Authority, the bondowners and their duly authorized agents who are acceptable to the Consolidated Government shall have the right at reasonable times during business hours, subject to the Consolidated Govermnent's usual safety and security requirements to examine and inspect the Projects without interference or prejudice to the Consolidated Government's operations. Section 6.3. Granting of Easementsj Conveyance; Sale. If no event of default hereunder shall have occurred and be continuing, the Consolidated Government may direct the Authority to grant or cause to be granted, whether to itself or otherwise, easements, licenses, rights-of-way (temporary or perpetual and including the dedication of public highways) and other rights or privileges in the nature of easements with respect to any property included in the Projects and such grant.will be free from the lien or security interest of this Lease and the Bond Resolution or the Consolidated Government may cause to be released existing easements, licenses, rights-of-way and other rights or privileges in the nature of easements, held with respect to any property included in the Projects with or without consideration. In connection with any such grant, the Authority agrees that it shall execute and deliver any instrument necessary or appropriate to confirm and grant or release any such easement, license, right-of-way or other right or privilege or asset. In addition, if no event of default hereunder shall have occurred and be continuing, the Consolidated Govermnent may direct the Authority to transfer to the Consolidated Government such portions of the real property constituting the Projects as the Consolidated Government and the Authority shall determine are not necessary for the safe, efficient and economical operation of the Projects. Except as set forth above and in the Bond Resolution, the Authority shall not sell the Projects or any portion thereof and shall not otherwise encumber the Projects. Section 6.4. Further Assurances and Corrective Instruments, Recordings and Filings. The Authority and the Consolidated Government agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for carrying out the intention of or facilitating the performance of this Lease. -18- AO 859941.4 Section 6.5. Release Covenants. The Consolidated Government releases the Authority from, and covenants and agrees that the Authority shall not be liable for, all claims by or on behalf of any person arising from: (i) the conduct or management of, or from any work or thing done on, the Projects during the Term hereof; (ii) any condition of the Projects, (iii) any breach or default on the part of the Consolidated Government in the performance of any of its obligations under this Lease; (iv) any act of negligence of the Consolidated Government or of any agents, contractors, servants, employees or licensees of the Consolidated Government or of any lessee or tenant of the Consolidated Government; or (v) any loss or damage to property or any injury to or death of any persons occurring on or about or resulting from any defect in the Projects. -19- A0859941.4 ARTICLE VII EVENTS OF DEFAULT AND REMEDIES Section 7.1. Events of Default Defined. The following shall be "events of default" under this Lease and the terms "event of default" or "default" shall mean, whenever they are used in this Lease, anyone or more of the following events: (a) Failure by the Consolidated Government to make the Lease Payments required to be paid under Section 4.2 hereof at the times specified therein; (b) Failure by the Consolidated Government to observe and perform any covenant, condition or agreement of this Lease on its part to be observed or performed, other than as referred to in subsection (a) of this Section, for a period of 30 days after written notice, specifying such failure and requesting that it be remedied, shall have been given to the Consolidated Government by the Authority or the bondowners, unless the Authority and the bondowners shall agree in writing to an extension of such time prior to its expiration; provided, however, if the failure stated in the notice cannot be corrected within the period specified herein, the Authority and the: bondowners will not unreasonably withhold their consent to an extension of such time if it is possible to correct such failure and corrective action is instituted by the Consolidated GoveflIl11ent within the applicable period and diligently pursued until the default is cOlTected; (c) An "event of default" shall have occurred under the Bond Resolution. Section 7.2. Remedies on Default. Whenever any event of default referred to in Section 7.1 hereof shall have happened and be subsisting, the Authority, or the bondowners as provided in the Bond Resolution, may take anyone or more of the following remedial steps: (a) Projects; The Authority or the bondowners may seek the appointment of a receiver for the (b) The Authority or the bondowners may require the Consolidated Government to furnish copies of all books and records of the Consolidated Government pertaining to the Projects; (c) The Authority or the bond owners may take whatever action at law or in equity may appear necessary or desirable to collect the Lease Payments then due and thereafter to become due, or to enforce performance and observance of any obligation, agreement or covenant of the Consolidated Government under this Lease; and (d) The Authority or the bondowners may exercise any remedies provided for in the Bond Resolution or under the Revenue Bond Law. -20- AO 859941.4 Any amounts collected pursuant to action taken under this Section shall be paid into the Sinking Fund and applied in accordance with the provisions of the Bond Resolution or, if payment in full of the outstanding Bonds has been made (or provision for payment thereof has been made in accordance with the provisions of the Bond Resolution), to the Consolidated Government. Section 7.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority or the bondowners is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Lease or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon the occurrence of any event of default shall impair any such right or power or sha:il be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Authority or the bonc\owners to exercise any remedy reserved to it in this Article, it shall not be necessary to give any notice, other than such notice or notices as may be herein expressly required. Such right~; and remedies as are given to the Authority hereunder shall also extend to the bondowners, and the owners of the Bonds shall be deemed third party beneficiaries of all covenants and agreements herein contained. Section 7.4. No Additional Waiver Implied by One Waiver. If any agreement contained in tllis Lease should be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach hereunder. -21- AO 859941.4 ARTICLE VIII OPTION OF CONSOLIDATED GOVERNMENT Section 8.1. Unqualified Option to Purchase. On and after l:he effective date of this Lease and during the Term and for 365 days after the expiration thereof, the Consolidated Government shall have the unconditional right and option to purchase the Projects at any time. Section 8.2. Purchase Price. The purchase price payable if the Consolidated Government purchases the Projects pursuant to the provisions of this Article VIII shall be $100 to be paid to the Authority plus the full amount necessary under the provisions of the Bond Resolution to cause the payment in full of the Bonds (including, without limitation, principal, interest, premium, if any, expenses of redemption and the Paying Agent's and Bond Registrar's fees accrued and to accrue through final payment of the Bonds and all other liabilities of the Consolidated Government accrued under this Lease). In any case, if no principal installment on the Bonds shall be outstanding at the time of purchase, or the redemption or payment of the Bonds shall be or have been otherwise provided for, the purchase price of the Projects shall be $100 to be paid to the Authority. Section 8.3. Procedure For Exercising Option to Purchase. The Consolidated Government may exercise its option to purchase hereunder by giving written notice to the Authority of its intention to purchase the Projects pursuant to the provisions of this fu1icle VIII specifying the time and place of closing and by giving notice to the Authority. At the closing the Authority shall, upon payment of the purchase price hereinabove specified, deliver to the Consolidated Government appropriate conveyance instruments transferring all of its right, title and interest in and to the Projects. -22- AO 859941.4 ARTICLE IX MISCELLANEOUS Section 9.1. Agreement to Pay Attorneys' Fees and Expenses. If the Consolidated Government should default under any of the provisions of this Lease and either or both the Authority or the bondowners should employ attorneys or incur other expenses for the collection of Lease Payments or the enforcement of performance or observance of any obligation or agreement on the part of the Consolidated Government herein contained, the Consolidated Government agrees that it shall on demand therefor pay to the Authority and the bondowners the reasonable fee of such attorneys and such other reasonable expenses so incurred by the Authority and the bondowners. Section 9.2. Indemnification. The Consoliclated Goverrunent agrees that the Authority (including any person at any time serving as an officer or member of the Authority) shall not be liable for, and agrees to indemnify and hold the Authority (including any person at any time serving as an officer or member of the Authority) harmless (including attorney fees) from: (i) any liability for any loss or damage to property or any injury to, or death of, any person that may be occasioned by any cause whatsoever pertaining to the Projects, (ii) any liabilities, losses or damages, or claims therefor, arising out of the failure, or claimed failure, of the Consolidated Government to comply with its covenants contained in this Lease, (iii) the work done on the Projects or the operation of the Projects during the term of this Lease or at any other time, (iv) any willful act or act of negligence of the Consolidated Government or any of its agents, contractors, servants or employees in connection with the use or operation of the Projects, (v) any violation of law, ordinance or regulation affecting the Projects or any part thereof or the ownership or use thereof (including, without limitation, CERCLA, the Hazardous Materials Transportation Act, The Resource Conservation and Recovery Act, the Toxic Substances Control Act, the Clean Water Act or any so-called "Super Fund" or "Super Lien" legislation), (vi) any condition of the Projects, or (vii) any accident, injury or damage whatsoever caused to any person, firm or corporation, by the Projects. In addition, the Consolidated Government agrees to indemnify and hold the Authority (including any person at any time serving as an officer of the Authority) harmless to the fuI:lest extent permitted by law from any losses, costs, charges, expenses, judgments and liabilities incurred by it in connection with any action, suit or proceeding instituted or threatened in connection with the transactions contemplated by this Lease or the Bonds. If any such .;::laim is assel1ed, the Authority or any individual indemnified herein, as the case may be, will give prompt written notice to the Consolidated Goverrunent and the Consolidated Government will promptly assume the defense thereof, including the employment of counsel and payment of all expenses of such defense, with full power to litigate, compromise or settle the san1e in its sole discretion; provided that the Authority shall have the right to approve in writing all counsel engaged by the Consolidated Goverrunent to conduct such defense, which approval shall not be unreasonably withheld. The Authority shall have the right to employ separate counsel in any such action and to participate in the defense thereof, but the Consolidated Goverrunent shall not be required to pay -23- AO X59941.4 the fees and expenses of such separate counsel unless the separate counsel is employed with the approval of the Consolidated Government. The Consolidated Goverrunent shall not unreasonably withhold its approval of such separate counsel. Section 9.3. Notices. All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed given when mailed by registered or certified mail, return receipt requested, postage prepaid. Section 9.4. Binding Effect. This Lease shall inure to the benefit of and shall be binding upon the Authority, the Consolidated Government and their respective successors and assigns, subject, however, to the limitations contained in this Lease. The owners from time to time of the Bonds shall be third paI1y beneficiaries hereof and shall have the right to enforce the provisions hereof to the extent and in the manner provided for in the Bond Resolution. Section 9.5. Severability. If any provision of this Lease shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. Section 9.6. Amounts Remaining in Sinking Fund. It is agreed by the parties hereto that, subject to and in accordance with the terms and conditions of the Bond Resolution certain surplus moneys remaining in the Sinking Fund after payment of all outstanding Bonds shall belong to and be paid to the Consolidated Goverrunent by the Authority as an overpayment of Lease Payments. Section 9.7. Amendments, Changes and Modifications. Except as otherwise provided in this Lease or in the Bond Resolution, prior to payment in full of all Bonds (or provision for the payment thereof having been made in accordance with the provisions of the Bond Resolution), this Lease may not be effectively amended, changed, modified, altered or tenninated without the requisite concurring written consent of the bondowners in accordance with the Bond Resolution. Section 9.8. Execution Counterparts. This Lease may be simultaneously executed in several counterparts, each of which shall be an original aIId all of which shall constitute but one and the SaIne instrument. Section 9.9. Captions. The captions and headings in this Lease are for convenience only and in no way define, ] imi t or describe the scope or intent of any provisions of this Lease. -24- AO 859941.4 Section 9.10. Law Governing Lease. This Lease shall be governed by, and construed in accordance with, the laws of the State of Georgia. Section 9.11. Consolidated Government a Party to Validation. The Consolidated Government hereby consents to be a party defendant in the validation proceedings related to the Series 2003 Bonds and covenants and agrees that it shall cooperate with the Authority in validating the Series 2003 Bonds and in connection therewith, shall execute such certificates, com;ent to service of process and make sworn answers as may be necessary for the validation proceedings. Section 9.12. Redemption of Bonds. The Authority, at the request at any time of the Consolidated Government, shall take all steps that may be proper and necessary under the applicable redemption provisions of the Bond Resolution to effect the redemption of all or part of the then outstanding Bonds as may be specified by the Consolidated Government, on the earliest redemption date on which such redemption may be effected. It is understood that all expenses of such redemption shall be paid by the Consolidated Government and not from other funds of the Authority. The Authority shall cooperate with the Consolidated Goverrunent in effecting any purchase or redemption of the Bonds. -25- AO 859941.4 IN WITNESS WHEREOF, the Authority and the Consolidated Govemment have caused this Lease to be executed in their respective corporate names and their respective corporate seals to be hereunto affixed and attested by their duly authorized officers, all as of the elate first above written. DOWNTOWN DEVELOPMENT AUTHORITY OF THE CITY OF AUGUSTA (S E A L) By: , Chairman Attest: , Secretary As to the Authority, signed and sealed in the presence of: Witness Notary Public My Commission Expires: (NOT ARIAL SEAL) [Signatures continued on following page] -26- AO 8599414 AUGUSTA, GEORGIA (S E A L) By: , Mayor Attest: , Clerk Augusta- Richmond County Commission As to the Consolidated Goverrullent, signed and sealed in the presence of: Witness Notary Public My Commission Expires: (NOTARIAL SEAL) -27- AO 859941.4 EXHIBIT A LEGAL DESCRIPTION AO 859941.4 ~ .