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07-18-2001 Regular MeetingMinutes Downtown Development Authority Wednesday, July 18, 2001,11:30 am., Second Floor Conference Room, City Hall Attendees: Max Bacon Hubert Black C.J. Fouts Jim Pitts Larry Freeman Melinda Dameron Scott Cochran Howard Smith Guest: Ed Wall Members of the Press Mayor Bacon called the meeting to order and asked Ed Wall to give a brief overview of the proposed intergovernmental contract with the City and the issuance of bonds for the purpose of purchasing the Brawner's site. Dr. Jim Pitts made motion to adopt the intergovernmental agreement with the City regarding the lease/purchase of the Brawner's site, seconded by Melinda Dameron, approved unanimously. Larry Freeman made a motion to approve the issuance of bonds for $2,875,000 to purchase Brawner's site, seconded by Hubert Black, approved unanimously. Hubert Black made motion authorizing the Max Bacon to sign on behalf of Downtown Development Authority, seconded by Dr. Jim Pitts, approved unanimously. Mayor Bacon then called for nominations for officers. Larry Freeman nominated Melinda Dameron to be secretary, seconded by C.J. Fouts, approved unanimously. Melinda Dameron nominated Larry Freeman to be Vice Chair, seconded by Hubert Black, approved unanimously. Dr. Jim Pitts nominated Max Bacon to be Chair, seconded by C.J. Fouts, approved unanimously. There being no further business, Larry Freeman made a motion to adjourn, seconded by Melinda Dameron, approved unanimously. a BOND RESOLUTION A RESOLUTION OF THE DOWNTOWN SMYRNA DEVELOPMENT AUTHORITY AUTHORIZING, INTER ALIA, THE ISSUANCE OF ITS REVENUE BOND (BRAWNER PROJECT), SERIES 2001 IN A PRINCIPAL AMOUNT OF $2,875,000 Adopted July 18, 2001 Exhibit "A" - Form of Bond Purchase Agreement Exhibit `B" - Form of Agreement of Sale Exhibit "C" - Form of Assignment and Security Agreement 1190662.v1 BOND RESOLUTION WHEREAS, the Downtown Smyrna Development Authority (the "Issuer") is a public corporation duly created and validly existing under and pursuant to an amendment to Article VII, Section VII, Paragraph I of the Constitution of the State of Georgia of 1945 (1970 Ga. Laws 1117 to 1119, inclusive), now specifically continued as a part of the Constitution of the State of Georgia of 1983 pursuant to an Act of the General Assembly of the State of Georgia (1986 Ga. Laws 3957 to 3958, inclusive), as implemented by an Act of the General Assembly of the State of Georgia (1989 Ga. Laws 4382 to 4396, inclusive) (collectively the "Act"); and WHEREAS, the Act authorizes the Issuer to issue revenue bonds and use the proceeds thereof for the purpose of paying all or any part of the cost of any "project," which includes the acquisition, construction, remodeling, altering, renovating, equipping, maintaining, and operating of buildings, both private and public, and the usual and convenient facilities appertaining to such undertakings and extension and improvement of such buildings, the acquisition of parking facilities or parking areas in connection therewith, the acquisition of the necessary property therefor, both real and personal, and the sale of any part or all of such buildings, including real and personal property, so as to assure the efficient and proper development, maintenance, and operation of such buildings deemed by the Issuer to be necessary, convenient, or desirable in connection therewith; and WHEREAS, the Act also authorizes the Issuer (1) to construct, erect, purchase, acquire, renovate, rehabilitate, improve, and sell projects, (2) to make and execute contracts and other instruments necessary or convenient to exercise the powers of the Issuer, including, but not limited to, contracts for construction of projects and contracts for sale of projects, and (3) to contract for any period, not exceeding 50 years, with any municipality of the State of Georgia for the use by such municipality of any facilities or services of the Issuer, provided that such contracts shall deal with such activities and transactions as the Issuer and any such municipality are by law authorized to.undertake; and WHEREAS, the Act also authorizes the Issuer, as security for repayment of its revenue bonds, to pledge, convey, assign, hypothecate, or otherwise encumber any property of the Issuer and to execute any agreement for the sale of its revenue bonds, security agreement, assignment, or other instrument as may be necessary or desirable, in the judgment of the Issuer, to secure any such revenue bonds; and WHEREAS, the Issuer proposes to issue, sell, and deliver its revenue bond to be known as "Downtown Smyrna Development Authority Revenue Bond (Brawner Project), Series 2001," in the principal amount of $2,875,000 (the "Bond"), for the purpose of obtaining funds to finance the costs of acquiring, constructing, and installing the Brawner campus (the "Project"), and to finance related costs; and WHEREAS, the Issuer will sell the Project to the City of Smyrna (the "Purchaser") pursuant to an Agreement of Sale (the "Contract"), to be dated as of July 1, 2001, under the terms of which the Purchaser (1) will agree to make installment payments of purchase price to the Issuer in amounts sufficient to enable the Issuer to pay the principal of, premium, if any, and interest on the Bond when due, and (2) will agree to levy an annual ad valorem tax on all taxable property located within the corporate limits of the Purchaser, at such rates within the 15.00 mill limit prescribed by the Purchaser's Charter or such greater millage limit hereafter prescribed by applicable law, as may be necessary to produce in each year revenues that are sufficient to fulfill the Purchaser's obligations under the Contract; and WHEREAS, to secure its obligation to pay principal of, premium, if any, and interest on the Bond, the Issuer proposes to assign and pledge to First Union National Bank (the "Bond Buyer"), and proposes to grant a first priority security interest in, all of its right, title, and interest in the Contract (except for the Unassigned Rights, as defined in the hereinafter defined Bond Purchase Agreement) and all revenues, payments, receipts, and moneys to be received and held thereunder, pursuant to an Assignment and Security Agreement (the "Assignment"), to be dated as of July 1, 2001, between the Issuer and the Bond Buyer; and WHEREAS, the Issuer proposes to sell the Bond at private sale as permitted by the Act to the Bond Buyer pursuant to a Bond Purchase Agreement (the "Bond Purchase Agreement"), to be dated the date of its execution and delivery, between the Issuer and the Bond Buyer; and WHEREAS, the Issuer hereby finds and determines that the Project is a "project" within the meaning of the Act and that the financing of the Project will further the purposes and policies of the Act; and WHEREAS, the members of the Issuer have determined that accomplishing the foregoing is in the best interests of the Issuer, and the members of the Issuer have found and do hereby declare that such undertaking is for a lawful, valid, and necessary public purpose, which will further the redevelopment of the downtown Smyrna area, all to the public benefit and good; and WHEREAS, copies of the forms of the following documents relating to the transactions described above have been .submitted to the Issuer, are now on file with the Issuer, and are attached as exhibits: Exhibit "A' - Bond Purchase Agreement, to be dated the date of its execution and delivery, between the Issuer and the Bond Buyer, Exhibit `B" - Agreement of Sale, to be dated as of July 1, 2001, between the Issuer and the Purchaser, and Exhibit "C" - Assignment and Security Agreement, to be dated as of July 1, 2001, between the Issuer and the Bond Buyer; NOW, THEREFORE, BE IT RESOLVED BY THE MEMBERS OF THE DOWNTOWN SMYRNA DEVELOPMENT AUTHORITY AS FOLLOWS: 1. In order to further the public purposes of the Act, the Issuer is hereby authorized to issue the Bond to finance the costs of acquiring, constructing, and installing the Project and to finance related costs, and all such assistance previously provided is hereby ratified and approved. It is hereby found, ascertained, determined, and declared that the Project constitutes a "project," -2- I) within the meaning of that term as defined in the Act, and that the financing of the acquisition, construction, and installation of the Project and the related costs thereto is for a public purpose and is necessary to further the redevelopment of the downtown Smyrna area, all to the public benefit and good. 2. For the purpose of financing the cost of the acquisition, construction, and installation of the Project and of financing related costs, the issuance of $2,875,000 in principal amount of a revenue bond of the Issuer to be known as the "Downtown Smyrna Development Authority Revenue Bond (Brawner Project), Series 2001" is hereby approved and authorized pursuant to the provisions of the Act. 3. The Bond shall be dated the date of its delivery, and shall be issued as a single, fully registered bond without coupons in the principal amount of $2,875,000 and shall be numbered R-1. The Bond shall bear interest from its dated date on the outstanding principal amount thereof at the rate of 5.14% per annum, computed on the basis of a 360-day year consisting of twelve 30-day months. Interest on the Bond shall be payable on February 1, 2002, and semi-annually thereafter on each August 1 and February 1 of each year. Principal of the Bond shall be payable on August 1, in the years and in the amounts as follows, unless earlier called for redemption: Year Amount Year Amount 2002 $ 85,000 2012 $140,000 2003 90,000 2013 150,000 2004 95,000 2014 155,000 2005 100,000 2015 165,000 2006 105,000 2016 175,000 2007 110,000 2017 180,000 2008 115,000 2018 190,000 2009 120,000 2019 200,000 2010 130,000 2020 210,000 2011 135,000 2021 225,000 The Bond shall bear interest on any overdue installment of principal and, to the extent permitted by applicable law, on any overdue installment of interest, at the aforesaid rate. A late charge shall be payable under the Bond in an amount equal to five percent (5%) of any installment payment thereunder that is not paid within fifteen (15) days after such payment is due. The Bond shall be substantially in the form set forth in the Bond Purchase Agreement hereinafter authorized and shall be subject to redemption, shall be payable in such medium of payment at such place or places, shall be of such tenor, and shall have such other terms and provisions as are provided in the Bond Purchase Agreement. The form of the Bond and the provisions for execution, delivery, payment, substitution, transfer, registration, and redemption shall be as set forth in the Bond Purchase Agreement hereinafter authorized. -3 - 4. The Bond shall be secured as provided in the Bond Purchase Agreement and the Assignment. 5. The Bond shall never constitute an indebtedness or general obligation of the State of Georgia, the City of Smyrna, or any other political subdivision of the State of Georgia, within the meaning of any constitutional provision or statutory limitation whatsoever, nor a pledge of the faith and credit or taxing power of any of the foregoing or of the Issuer, nor shall any of the foregoing be subject to any pecuniary liability thereon. The Bond shall not be payable from nor a charge upon any funds other than the revenues pledged to the payment thereof and shall be a limited or special obligation of the Issuer payable solely from the funds provided therefor in the Bond Purchase Agreement and the Assignment, including the proceeds of the ad valorem tax that the Purchaser is obligated to levy pursuant to the Contract. No owner of the Bond shall ever have the right to compel the exercise of the taxing power of the State of Georgia, the City of Smyrna, the Issuer, or any other political subdivision of the State of Georgia, except to levy the ad valorem tax required by the Contract, to pay the principal of the Bond or the interest or any premium thereon, or to enforce payment thereof against any property of the foregoing, other than the proceeds of the ad valorem tax required by the Contract, nor shall the Bond constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the foregoing other than the revenues pledged to the payment thereof and the proceeds of the ad valorem tax required by the Contract. Neither the members of the Issuer nor any person executing the Bond shall be liable personally on the Bond by reason of the issuance thereof. 6. The obligations of the Issuer with respect to the Security (as defined in the Bond Purchase Agreement) shall be as provided in the Bond Purchase Agreement and the Assignment. 7. The forms, terms, and conditions and the execution, delivery, and performance of the Bond Purchase Agreement, the Contract, and the Assignment, attached hereto as Exhibits A, B, and C, respectively, are hereby approved and authorized. The Bond Purchase Agreement, the Contract, and the Assignment (collectively the "Bond Documents") shall be in substantially the forms submitted to the members of the Issuer with such changes, corrections, deletions, insertions, variations, additions, or omissions as may be approved by the Chairman or Vice Chairman of the Issuer, whose approval thereof shall be conclusively evidenced by the execution of each such instrument. 8. The execution and delivery of the Bond to the Bond Buyer for the purchase price and upon the terms and conditions set forth in the Bond Purchase Agreement are hereby .approved and authorized. The Issuer hereby determines that the sale of the Bond at private sale upon a negotiated basis in the manner, at the price, and at the time determined in and pursuant to the Bond Purchase Agreement is most advantageous to the Issuer. 9. The Chairman or Vice Chairman of the Issuer is hereby authorized and directed to execute on behalf of the Issuer the Bond Documents, and the Secretary or Assistant Secretary of the Issuer is hereby authorized and directed to affix thereto and attest the seal of the Issuer, upon proper execution and delivery of the other parties thereto, provided, that in no event shall any such attestation or affixation of the seal of the Issuer be required as a prerequisite to the effectiveness thereof, and the Chairman or Vice Chairman and Secretary or Assistant Secretary are authorized and directed to deliver the Bond Documents on behalf of the Issuer to the so Purchaser or the Bond Buyer, as the case may be, and to execute and deliver all such other contracts, instruments, documents, affidavits, or certificates and to do and perform all such things and acts as each shall deem necessary or appropriate in furtherance of the issuance of the Bond and the carrying out of the transactions authorized by this Bond Resolution or contemplated by the instruments and documents referred to in this Bond Resolution. The Bond shall be executed on behalf of the Issuer by its Chairman or Vice Chairman by his manual signature, and the official seal of the Issuer shall be impressed thereon and attested by the manual signature of the Secretary or Assistant Secretary of the Issuer. 10. The attorneys for the Issuer, Cochran, Camp & Snipes, are hereby authorized and instructed to commence validation proceedings in accordance with the requirements of Article 3 of Chapter 82 of Title 36 of the Official Code of Georgia Annotated, as amended, and to take all actions necessary to obtain an order of the Superior Court of Cobb. County, Georgia validating and confirming the Bond and the security therefor. The Chairman or Vice Chairman and Secretary or Assistant Secretary are hereby authorized and directed to execute any pleadings in connection therewith. 11. This Bond Resolution and the Bond Purchase Agreement, the Contract, and the Assignment, as approved by this Bond Resolution, all of which are hereby incorporated in this Bond Resolution by this reference thereto, shall be placed on file at the office of the Issuer and made available for public inspection by any interested party immediately following the passage and approval of this Bond Resolution. 12. No representation, statement, covenant, stipulation, obligation, or agreement herein contained, or contained in the Bond, the Bond Documents, or in any certificate or other instrument to be executed in connection with the issuance of the Bond, shall be deemed to be a representation, statement, covenant, stipulation, obligation, or agreement of any member, officer, employee, or agent of the Issuer in his individual capacity, and none of the foregoing persons nor any of the officers of the Issuer executing the Bond, the Bond Documents, or any certificate or other instrument to be executed in connection with the issuance of the Bond shall be liable personally thereon or be subject _ to any personal liability or accountability by reason of the execution or delivery thereof. 13. Except as otherwise expressly provided herein or in the Bond or the Bond Documents, nothing in this Bond Resolution or in the Bond or the Bond Documents, express or implied, is intended or shall be construed to confer upon any person, firm, corporation, or other organization, other than the Issuer, the Purchaser, the Bond Buyer, and the registered owner from time to time of the Bond, any right, remedy, or claim, legal or equitable, under and by reason of this Bond Resolution or any provision hereof, or of the Bond or the Bond Documents, all provisions hereof and thereof being intended to be and being for the sole and exclusive benefit of the Issuer, the Purchaser, the Bond Buyer, and the registered owner from time to time of the Bond. -5- 14. All acts, conditions, and things relating to the passage of this Bond Resolution, to the issuance, sale, and delivery of the Bond, and to the execution and delivery of the Bond Documents, required by the Constitution or other laws of the State of Georgia to happen, exist, and be performed precedent to the passage hereof, have happened, exist, and have been performed as so required, with the exception of the validation proceedings referred to in paragraph 10 above. 15. The directors of the Issuer and its officers, attorneys, engineers, or other agents or employees are hereby authorized to do all acts and things required of them by this Bond Resolution, the Bond, and the Bond Documents and to do all acts and things that are desirable and consistent with the requirements hereof or of the Bond and the Bond Documents for the full, punctual, and complete performance of all the terms, covenants, and agreements contained herein or in the Bond and the Bond Documents. 16. The Issuer covenants and agrees that this Bond Resolution shall constitute a contract between the Issuer and the registered owner from time to time of the Bond, and that all covenants and agreements set forth herein and in the Bond and the Bond Documents to be performed by the Issuer shall be for the benefit and security of the registered owner from time to time of the Bond. 17. All motions, orders, ordinances, bylaws, resolutions, and parts thereof in conflict herewith are hereby repealed to the extent only of such conflict. This repealer shall not be construed as reviving any motion, order, ordinance, bylaw, resolution, or part thereof. 18. The Chairman or Vice Chairman of the Issuer is authorized and directed on behalf of the Issuer (i) to execute and deliver a certificate as to the reasonable expectations of the Issuer regarding the amount and use of the proceeds of the Bond, such certificate to be based upon representations of the Purchaser, (ii) to execute and file with the Internal Revenue Service Internal Revenue Service Form 8038-G, as required by Section 149(e) of the Internal Revenue Code of 1986, as amended (the "Code"), and (iii) to execute and make all other certifications and filings required under Section 103 of the Code and the applicable Treasury Regulations promulgated thereunder. 19. The Issuer hereby designates the Bond as a "qualified tax-exempt obligation" for purposes of Section 265(b)(3) of the Code and covenants that not more than $10,000,000 in aggregate principal amount of obligations the interest on which is excludable from gross income for federal income tax purposes (excluding, however, private activity bonds, as defined in Section 141 of the Code, other than qualified 501(c)(3) bonds, as defined in Section 145 of the Code), including the Bond, have been or shall be issued by the Issuer, including all subordinate entities of the Issuer and all entities that issue obligations on behalf of the Issuer, during the calendar year 2001. in 20. This Bond Resolution shall become effective immediately, and if any section, paragraph, clause, or provision hereof shall for any reason be held invalid or unenforceable, the invalidity or unenforceability thereof shall not affect any of the remaining provisions hereof. PASSED, ADOPTED, SIGNED, APPROVED, and EFFECTIVE this 18th day of July 2001. (SEAL) Attest: DOWNTOWN SMYRNA DEVELOPMENT AUTHORITY By: Chairman -7- EXHIBIT A Downtown Smyrna Development Authority $2,875,000 Revenue Bond (Brawner Project), Series 2001 BOND PURCHASE AGREEMENT Dated July _, 2001 1190652.v1 Section 1. 2. 3. 4. I 7. TABLE OF CONTENTS Page ISSUANCEOF THE BOND......................................................................................... I 1.1. Authorization of the Bond....................................................................................1 1.2. Terms of the Bond...............................................................................................1 1.3. Security for the Bond...........................................................................................2 1.4. Limited Obligation...............................................................................................2 1.5. Premium on the Bond.......................................................................................... 3 SALE AND PURCHASE OF THE BOND; ADVANCES ........................................... 4 CLOSING...................................................................................................................... 5 CONDITIONSTO CLOSING......................................................................................5 4.1. Representations and Warranties........................................................................... 5 4.2. Performance; No Default..................................................................................... 5 4.3. Compliance Certificates....................................................................................... 5 4.4. Opinions of Counsel............................................................................................ 6 4.5. Purchase Permitted By Applicable Law, etc ......................................................... 6 4.6. Security Documents............................................................................................. 6 4.7. Lien Documents................................................................................................... 6 4.8. Validation Order.................................................................................................. 6 4.9. Proceedings and Documents................................................................................ 7 PROJECTFUND.......................................................................................................... 7 5.1. Creation of the Project Fund................................................................................ 7 5.2. Disbursements..................................................................................................... 7 5.3. Investments.......................................................................................................... 7 5.4. Depository ........................................................................................................... 8 REPRESENTATIONS OF THE PURCHASER..........................................................9 REDEMPTION OF THE BOND..................................................................................9 7.1. Mandatory Redemption........................................................................................ 9 7.2. Redemption at Option of Purchaser...................................................................... 9 7.3. Partial Redemption.............................................................................................. 9 7.4. Maturity...............................................................................................................9 (i) n Section Page 8. COVENANTS ..............................................................................................................10 8.1. Payment of Principal, Interest, and Premium......................................................10 8.2. Performance of Covenants; Authority of the Issuer............................................10 8.3. Instruments of Further Assurance.......................................................................10 8.4. Inspection of Project Books...............................................................................10 8.5. Rights Under and Possession of the Contract.....................................................11 8.6. Recording and Filing.........................................................................................11 8.7. Maintenance of Existence; Compliance with Laws.............................................11 9. EVENTS OF DEFAULT AND REMEDIES..............................................................12 9.1. Events of Default...............................................................................................12 9.2. Remedies...........................................................................................................13 9.3. No Waivers or Election of Remedies; Expenses ................................................. I 10. REGISTRATION; TRANSFER; SUBSTITUTION OF THE BOND ......................14 10.1. Registration of the Bond....................................................................................14 10.2. Transfer of the Bond..........................................................................................14 10.3. Replacement of the Bond...................................................................................14 11. PAYMENTS ON THE BOND....................................................................................15 12. EXPENSES, ETC........................................................................................................15 12.1. Transaction Expenses.........................................................................................15 12.2. Survival.............................................................................................................16 13. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIREAGREEMENT.............................................................................................16 14. AMENDMENT AND WAIVER.................................................................................16 14.1. Requirements ............................ 14.2. Binding Effect, etc .................... 14.3. Contract .................................... 16 16 ......................................17 15. NOTICES....................................................................................................................17 16. SUBSTITUTION OF PURCHASER..........................................................................17 Section 17. 18. Page INTERPRETATION...................................................................................................18 17.1. Definitions.........................................................................................................18 17.2. Construction of Certain Terms...........................................................................19 17.3. Table of Contents; Titles and Headings..............................................................19 MISCELLANEOUS....................................................................................................19 18.1. Successors and Assigns......................................................................................19 18.2. Payments Due on Non -Business Days................................................................19 18.3. Severability........................................................................................................19 18.4. Construction...................................................................................................... 20 18.5. Counterparts...................................................................................................... 20 18.6. Governing Law ...................... :........................................................................... 20 18.7. No Liability of Issuer's Officers......................................................................... 20 18.8. Third Party Beneficiary ...................................................................................... 20 SIGNATURESAND SEALS..................................................................................................22 EXHIBIT A - Form of Bond EXHIBIT B - Form of Opinion of Counsel for the Issuer EXHIBIT C - Form of Opinion of Counsel for the Purchaser EXHIBIT D - Form of Opinion of Bond Counsel EXHIBIT E - Form of Investment Letter DOWNTOWN SMYRNA DEVELOPMENT AUTHORITY Smyrna, Georgia BOND PURCHASE AGREEMENT July 2001 First Union National Bank Atlanta, Georgia Ladies and Gentlemen: Downtown Smyrna Development Authority (the "Issuer"), a public corporation created and existing under the laws of the State of Georgia, agrees with you as follows: 1. ISSUANCE OF THE BOND. 1.1. Authorization of the Bond. The Issuer has duly authorized the issuance and sale of $2,875,000 in principal amount of its Revenue Bond (Brawner Project), Series 2001 (the "Bond," such term to include any such bond issued in substitution therefor pursuant to Section 10 of this Agreement). The Bond shall be substantially in the form set out in Exhibit A, with such changes therefrom, if any, as may be approved by you and the Issuer. Certain capitalized terms us%d in this Agreement are defined in Section 17 of this Agreement; references to an "Exhibit" are, unless otherwise specified, to an Exhibit attached to this Agreement. 1.2. Terms of the Bond. The Bond shall be dated the date hereof, and shall be designated "Downtown Smyrna Development Authority Revenue Bond (Brawner Project), Series 2001." The Bond shall be issued as a single, fully registered bond without coupons in the principal amount of $2,875,000 and shall be numbered R-1. The Bond shall bear interest from its dated date on the outstanding principal amount thereof at the rate per annum of 5.14%, computed on the basis of a 360-day year consisting of twelve 30-day months. Interest on the Bond shall be payable on February 1, 2002, and semi-annually thereafter on each August 1 and February 1 of each year. Principal of the Bond shall be payable on August 1, in the years and in the amounts as follows, unless earlier called for redemption: Year Amount Year Amount 2002 $ 85,000 2012 $140,000 2003 90,000 2013 150,000 2004 95,000 2014 155,000 2005 100,000 2015 165,000 2006 105,000 2016 175,000 2007 110,000 2017 180,000 2008 115,000 2018 190,000 2009 120,000 2019 200,000 2010 130,000 2020 210,000 2011 135,000 2021 225,000 The Bond shall bear interest on any overdue installment of principal and, to the extent permitted by applicable law, on any overdue installment of interest, at the aforesaid rate. A late charge shall be payable under the Bond in an amount equal to five percent (5%) of any installment payment thereunder that is not paid within fifteen (15) days after such payment is due. 1.3. Security for the Bond. Contemporaneously with the issuance of the Bond, as security for the payment of the Bond, the Issuer shall execute and deliver the Assignment. 1.4. Limited Obligation., The Bond shall be a special or limited and not general obligation of the Issuer giving rise to no pecuniary liability of the Issuer, shall be payable solely from the Security, and shall be a valid claim of the Bondholder only against the Security, which Security is hereby again specifically pledged and assigned for the payment of the Bond and shall be used for no other purpose than to pay the principal of, premium, if any, and interest on the Bond, except as may be otherwise expressly authorized in the Bond Documents. The Bond shall not constitute a general or moral obligation of the City of Smyrna, nor a debt, indebtedness, or obligation of, or a pledge of the faith and credit or taxing power of, the City of Smyrna, the Issuer, or the State of Georgia or any political subdivision thereof, within the meaning of any constitutional or statutory provision whatsoever. Neither the faith and credit nor the taxing power of the State of Georgia, the City of Smyrna, the Issuer, or any political subdivision thereof is pledged to the payment of the principal of, premium, if any, or interest on the Bond or other costs incident thereto. Neither the members of the Governing Body of the Issuer nor any person executing the Bond shall be liable personally on the Bond by reason of the issuance thereof. -2- 1.5. Premium on the Bond. In order to assist the Purchaser and the Issuer, you have or will be engaging in transactions or hedges with other entities or making other arrangements for which you could incur losses, costs, and expenses if the anticipated future interest payments on the Bond would not be made at the locked -in fixed rate for the specified term due to any Failure to Advance, Redemption, or Acceleration as defined below. In the event of any Failure to Advance, Redemption, or Acceleration, a Premium on the Bond shall be due if the rate under "A" below exceeds the rate under `B" below. The Issuer shall on demand pay to the Bondholder, but solely from the Security, the Premium, which shall be determined as follows: "Premium" = the Present Value of ((A-B) x C) + LIBOR Breakage, where: A = A rate per annum equal to the sum of (i) the bond equivalent yield (bid side) of the U.S. Treasury security with a maturity closest to the Maturity Date as reported by the Wall Street Journal (or other published source) on the Lock In Date, plus (ii) the corresponding swap spread of you on the Lock In Date for a fixed rate payor to pay you the fixed rate side of an interest rate swap of that maturity, plus (iii) 0.25%. B = A rate per annum equal to the sum of (i) the bond equivalent yield (bid side) of the U.S. Treasury security with a maturity closest to the Maturity Date as reported by the Wall Street Journal (or other published source) on the Break Date, plus (ii) the corresponding swap spread that you determine another swap dealer would quote to you on the Break Date for paying to you the fixed rate side of an interest rate swap of that maturity. C = The sum of the products of (i) each Specified Principal Amount times (ii) the remaining number of days from and including the Break Date to but excluding the Scheduled Due Date for that Specified Principal Amount divided by 360 (and for any Redemption, multiplying that sum by a fraction equal.to the principal amount being redeemed over the sum of each Specified Principal Amount that would, but for that redemption, have become due after the Break Date). "LIBOR Breakage" is any additional loss, cost, or expenses that you may incur based on the difference between a London interbank offered rate in effect under any hedge or funding source of you relating to the Bond's fixed interest rate and that which is available to you in the London interbank market on the Break Date. "Present Value" is determined as of the Break Date using `B" above as the discount rate. As used in this Section 1.5: (1) "Acceleration" means that the Bond is declared due and payable, or the Bond, this Agreement, or any commitment hereunder to make any advances on the Bond is terminated or cancelled, prior to the Maturity Date; (2) "Borrowing Date" means the date of Closing or any other date on which any advance of the Bond is scheduled to be made; (3) "Break Date" means (i) the relevant Borrowing Date for any Failure to Advance, (ii) the Redemption Date for any Redemption, or (iii) otherwise the Acceleration date; (4) "Failure to -3- Advance" means that any advance of the Bond fails to be made in full on or before the respective Borrowing Date for any reason or no reason; (5) "Lock In Date" means 1, 2001; (6) "Lock In Rate" means 5.14%; (7) "Maturity Date" means August 1, 2021, which is the last day the Lock In Rate would (but for a Failure to Advance, Redemption, or Acceleration) have remained in effect; (8) "Redemption" means that the Bond is redeemed on any date or dates ("Redemption Date") prior to the Maturity Date; (9) "Scheduled Due Date" means each of the repayment dates on the Bond as specified in Section 1.2; (10) "Specified Principal Amount" means each of the principal amounts corresponding to their respective repayment dates on the Bond as specified in Section 1.2. You shall determine the Premium hereunder in good faith using such methodology as you deem appropriate under the circumstance, and your determination shall be conclusive and binding in the absence of manifest error. The Premium shall be due, together with interest thereon computed on a 360-day basis, payable on demand and accruing at a rate per annum equal to the Prime Rate in effect for each day that such amount remains unpaid. The Premium is payable as liquidated damages, is a reasonable pre -estimate of the losses, costs, and expenses referred to above, is not a penalty, and will not require claim for, or proof of, actual damages. 2. SALE AND PURCHASE OF THE BOND; ADVANCES. Subject to the terms and conditions of this Agreement, the Issuer shall issue and sell to you and you shall purchase from the Issuer, at the Closing provided for in Section 3, the Bond at the purchase price of 100% of the principal amount thereof plus accrued interest thereon. You shall pay the purchase price of the Bond by making advances to the Issuer, from time to time on or prior to August 1, 2001, at the request of the Issuer, up to 100% of the principal amount of the Bond plus accrued interest thereon. All advances shall be immediately deposited in the Project Fund and shall be held,. invested, and disbursed as provided in this Agreement. The purchase price of the Bond may be disbursed in one or more advances, but your obligation to pay the purchase price of the Bond shall be reduced by each advance hereunder, and any purchase price advanced hereunder may not be repaid and then re -advanced hereunder. Your obligation hereunder to make advances of the purchase price of the Bond shall expire on August 1, 2001. All advances by you of purchase price of the Bond under this Agreement shall constitute principal and accrued interest advanced under the Bond, shall bear interest at the rate provided in Section 1.2 from the date of the Bond until paid, and shall be secured as provided in Section 1.3. All of your rights under the Bond and the Bond Documents shall continue in full force and effect with respect to all such advances. The principal represented by all advances of purchase price of the Bond hereunder, including the date and amount of principal represented by each advance, shall be endorsed by you on the Schedule of Advances attached to the Bond; provided, however, that any failure by you to endorse such information on such Schedule shall not in any manner affect the obligation of the Issuer to make payments of principal and interest in accordance with the terms of the Bond. The Issuer hereby irrevocably authorizes and directs you to enter on the Schedule of Advances attached to the Bond the date and amount of principal represented by each advance of purchase price of the Bond. .n 3. CLOSING. The sale and purchase of the Bond shall occur at the offices of the Issuer, 2800 King Street, S.E., Smyrna, Georgia, at 10:00 a.m., local time, at a closing (the "Closing") on July 2001, or on such other Business Day thereafter on or prior to August 1, 2001, as may be agreed upon by the Issuer and you and the Purchaser. At the Closing the Issuer shall deliver to you the Bond duly executed in the form of a single, fully registered Bond without coupons in a denomination of $ , dated as of July 1, 2001, and registered in your name (or in the name of your nominee), against delivery by you to the Issuer or its order of immediately available funds in the amount of the initial advance of the purchase price therefor (which shall not be less than $50,000), which shall be immediately deposited in the Project Fund. If at the Closing the Issuer shall fail to tender the Bond to you as provided above in this Section 3, or any f of the conditions specified in Section 4 shall not have been fulfilled to your satisfaction, you shall, at your election, be relieved of all further obligations under this Agreement, without thereby waiving any rights you may have by reason of such failure or such nonfulfillment. 4. CONDITIONS TO CLOSING. Your obligation to purchase and pay for the Bond at the Closing is subject to the fulfillment to your satisfaction, prior to or at the Closing, of the following conditions: 4.1. Representations and Warranties. The representations and warranties of the Issuer and the Purchaser in the Contract shall be correct when made and at the time of the Closing. 4.2. Performance; No Default. The Issuer and the Purchaser shall have performed and complied with all agreements and conditions contained in this Agreement and the Contract required to be performed or complied with by them prior to or at the Closing and after giving effect to the issue and sale of the Bond (and the application of the proceeds thereof as contemplated by this Agreement) no Event of Default under this Agreement or the Contract shall have occurred and be continuing. 4.3. Compliance Certificates. (a) Issuer's Certificate. The Issuer shall have delivered to you a closing certificate, dated the date of the Closing, incorporating a copy of the Bond Resolution, certified by the Secretary or the Assistant Secretary of the Issuer, and certifying that the conditions applicable to the Issuer specified in Sections 4.1 and 4.2 have been fulfilled. (b) Purchaser's Certificate. The Purchaser shall have delivered to you a closing certificate, dated the date of the Closing, incorporating a copy of the resolution of the Mayor and Council of the Purchaser authorizing and approving the execution and delivery of the Contract and all other documents to be delivered by the Purchaser in connection with the transactions contemplated by such instruments, each certified by the City Clerk, and certifying that the conditions applicable to the Purchaser specified in Sections 4.1 and 4.2 have been fulfilled. -5- 4.4. Opinions of Counsel. You shall have received opinions in form and substance satisfactory to you, dated the date of the Closing, (a) from Cochran, Camp & Snipes, counsel for the Issuer, substantially in the form set forth in Exhibit B, (b) from Cochran, Camp & Snipes, counsel for the Purchaser, substantially in the form set forth in Exhibit C, and (c) from Kilpatrick Stockton LLP, Bond Counsel, substantially in the form set forth in Exhibit D, each opinion covering such other matters incident to the transactions contemplated hereby as you or your counsel may reasonably request. 4.5. Purchase Permitted By Applicable Law, etc. On the date of the Closing, your purchase of the Bond shall (i) be permitted by the laws and regulations of each jurisdiction to which you are subject, (ii) not violate any applicable law or regulation (including, without limitation, Regulation G, T, or X of the Board of Governors of the Federal Reserve System), and (iii) not subject you to any tax, penalty, or liability under or pursuant to any applicable law or regulation, which law or regulation was not in effect on the date hereof. 4.6. Security Documents You shall have received in form and substance satisfactory to you original duly executed counterparts of the Contract and the Assignment. 4.7. Lien Documents. You shall have received in form and substance satisfactory to you (a) evidence to the effect that all appropriate filings and other steps then necessary for perfection of the liens and security interests created by the Assignment and in the Security, as against third party creditors of and purchasers for value in good faith from the Issuer have been taken, and (b) certified copies of Requests for Information or Copies (Form UCC-11), or equivalent reports, listing all effective financing statements that name the Issuer as debtor and that are filed in Cobb County, Georgia, together with copies of such financing statements, none of which shall cover the collateral purported to be covered by the Assignment, except as shall be terminated on the date of the Closing. 4.8. Validation Order. You shall have received a certified copy of an order of the Superior Court of Cobb County, Georgia validating and confirming the Bond and the security therefor. SZ 4.9. Proceedings and Documents. All corporate and other proceedings in connection with the transactions contemplated by this Agreement and the other Bond Documents and all documents and instruments incident to such transactions shall be satisfactory to you and your counsel, and you and your counsel shall have received all such counterpart originals or certified or other copies of such documents as you or they may reasonably request. 5. PROJECT FUND. 5.1. Creation of the Project Fund. There is hereby created by the Issuer and ordered established with the Depository a trust fund in the name of the Issuer to be designated the "Project Fund." All advances of purchase price of the Bond shall be immediately deposited into the Project Fund. The Issuer hereby grants a security interest in the moneys and investments in the Project Fund held by the Depository for the benefit of the Bondholder, and this Agreement shall be deemed a security agreement with respect to the security interest so created. The Depository shall be deemed to be (1) the secured party under the Uniform Commercial Code of Georgia, as representative of the Bondholder, or (2) a bailee, which under the Uniform Commercial Code of Georgia holds collateral for the benefit of the Bondholder as secured party, in either case with an obligation to use moneys in the Project Fund solely as provided herein. Upon the occurrence of an Event of Default under this Agreement, the Depository shall, upon the written direction of the Bondholder, apply all moneys in the Project Fund to the payment of the amounts due on the Bond, and for no other purpose. Any such application shall reduce and discharge the amount then due and payable on the Bond to the extent of such application. The Depository shall promptly notify the Purchaser and the Issuer of the amount of such reduction. 5.2. Disbursements.. Moneys in the Project Fund shall be expended in accordance with the provisions of the Contract, particularly Sections 4.03 and 4.04 thereof. The Depository is hereby authorized and directed to issue its checks for each disbursement required by the aforesaid provisions of the Contract. The Depository shall keep and maintain adequate records pertaining to the Project Fund and all .disbursements therefrom, and the Depository shall, if requested by the Purchaser, file an accounting thereof with the Issuer and the Purchaser. 5.3. Investments. The Depository shall invest and reinvest any moneys held in the Project Fund at the direction of the Purchaser as provided in the Contract, particularly Section 4.10 thereof. The Depository shall not be required to invest or reinvest any moneys in the Project Fund or any earnings therefrom unless directed by the Purchaser. The Depository shall not be liable for interest upon any moneys held in the Project Fund during any period of time that such moneys are uninvested. Such investments shall be held by or under the control of the Depository and shall be deemed at all times a part of the Project Fund, and the interest accruing thereon and any profit realized therefrom shall be credited as set forth below, and any loss therefrom shall be -7- charged against the Project Fund. The Depository is directed to sell and convert to cash a sufficient amount of such investments whenever the cash held in the Project Fund is insufficient for the uses prescribed for moneys held in the Project Fund. Neither the Depository nor the Issuer shall be liable or responsible for any loss resulting from any such investment or resulting from the redemption or sale of any such investment as herein authorized. In computing the assets of the Project Fund, investments and accrued interest thereon shall be deemed, a part thereof. Such investments shall be valued at the face value or the cost thereof, whichever is lower. Moneys in the Project Fund shall be invested only in obligations maturing or redeemable at the option of the holder in such amounts and on such dates as may be necessary to provide moneys to meet the payments from such fund. Interest and profits from the investment of moneys held in the Project Fund shall be retained in the Project Fund. 5.4. Depository. First Union National Bank, Atlanta, Georgia, is hereby designated as Depository of the Project Fund. The Issuer and the Bondholder may, from time to time, with the prior written consent of the Purchaser, designate a successor Depository; provided, that any such successor Depository shall be a bank or trust company having trust powers, shall be duly authorized to exercise trust powers in the State, and shall have an unimpaired capital and surplus of not less than $20,000,000. All moneys received by the Depository under this Agreement shall, until used or applied as herein provided, be held in trust for the purposes for which they were received but need not be segregated from other funds except to the extent required by this Agreement or by law. In making any disbursement or payment from the Project Fund as provided herein, the Depository may rely upon all requisitions, certificates, and other items submitted to it pursuant to this Agreement, and the Depository shall be relieved of all liability with respect to disbursements or payments made in accordance with this Agreement. The Depository shall be protected in acting upon any requisition, certificate, or other item believed to be genuine and correct and to have been signed or sent by the proper person or persons. The duties of the Depository hereunder shall be entirely administrative and not discretionary. The Depository shall be obligated to act only in accordance with written directions or written instructions received by it as provided in this Agreement. The Issuer hereby waives any suit, claim, demand, or cause of action of any kind, which it may have or may assert against the Depository arising out of or relating to the execution or performance by the Depository of this Agreement, unless such suit, claim, demand, or cause of action is based upon the negligence or willful misconduct of the Depository. -8- 6. REPRESENTATIONS OF THE PURCHASER. You represent that you are purchasing the Bond for your own account or for one or more separate accounts maintained by you for investment purposes or for your loan portfolio and not with a view to the distribution thereof, provided that the disposition of your property shall at all times be within your control. You agree (1) to execute and deliver to the Issuer and the Purchaser an Investment Letter substantially in the form attached hereto as Exhibit E, at or prior to the Closing, and (2) that the Bond may not be resold unless the purchaser executes and delivers to the Issuer and the Purchaser an Investment Letter substantially in the form attached hereto as Exhibit E, at or prior to such resale. 7. REDEMPTION OF THE BOND. 7.1. Mandatory Redemption. The Bond shall be subject to mandatory redemption by the Issuer prior to maturity on the earliest available scheduled interest payment date from excess moneys in the Project Fund to the extent required in Section 4.03(b) of the Contract. If the Bond is called for redemption in the event described in the preceding sentence, the Bond shall be redeemed by the Issuer in a principal amount equal to the excess moneys in the Project Fund, at a redemption price equal to one hundred percent (100%) of the principal amount being redeemed plus accrued interest to the redemption date and plus premium calculated as provided in Section 1.5. 7.2. Redemption at Option of Purchaser. The Bond shall be subject to optional redemption by the Issuer upon the written request of the Purchaser prior to maturity, in whole on any date or in part on any scheduled interest payment date, and if in part in amounts not less than $10,000, at a redemption price equal to one hundred percent (100%) of the principal amount being redeemed plus accrued interest to the redemption date and plus premium calculated as provided in Section 1.5. As a condition precedent to each optional redemption under this Section 7.2, the Bondholder shall receive written notice of such optional redemption not less than 30 days and not more than 60 days prior to the date fixed for such redemption. Each such notice shall specify the date of redemption, the principal amount of the Bond to be redeemed on such date, and the accrued interest (if the same can be calculated) to be paid on the redemption date with respect to the principal amount being redeemed. 7.3. Partial Redemption. Any partial redemptions of the Bond shall be applied to the annual principal payments due on the Bond in the inverse order of their maturities. 7.4. Maturity. In the case of each redemption of the Bond pursuant to this Section 7, the principal amount of the Bond to be redeemed shall mature and become due and payable on the date fixed for such redemption, together with interest on such principal amount accrued to such date and the applicable premium, if any. From and after such date, unless the Issuer shall fail to pay such principal amount when so due and payable, together with the interest and premium, if any, as aforesaid, interest on such principal amount shall cease to accrue. 8. COVENANTS. 8.1. Payment of Principal, Interest, and Premium. The Issuer covenants that it will promptly pay or cause to be paid the principal of, premium, if any, and interest on the Bond at the place, on the dates, and in the manner provided herein and in the Bond according to the true intent and meaning thereof, but solely from the Security. The principal of, premium, if any, and interest on the Bond are payable solely from the sources as provided herein, which sources are hereby specifically pledged to the payment thereof in the manner and to the extent specified in the Assignment, and nothing in the Bond or in this Agreement shall be construed as pledging any other funds or assets of the Issuer. 8.2. Performance of Covenants; Authority of the Issuer. The Issuer covenants that it shall faithfully perform at all times any and all covenants, undertakings, stipulations, and provisions contained in this Agreement, in the Bond, and in all proceedings pertaining thereto. The Issuer represents that it is duly authorized under the Constitution and laws of the State, including particularly the Act, to issue the Bond and to execute this Agreement, and to pledge the Security pledged in the manner and to the extent set forth in the Assignment, that all action required on its part for the issuance of the Bond and the execution and delivery of this Agreement have been duly and effectively taken, and that the Bond in the hands of the Bondholder is and will be the valid and enforceable obligation of the Issuer according to the import thereof. 8.3. Instruments of Further Assurance. The Issuer agrees that the Bondholder may defend its rights to the payments and other amounts due under the Contract against the claims and demands of all persons whomsoever. The Issuer covenants that it will do, execute, acknowledge, and deliver or cause to be done, executed, acknowledged, and delivered such agreements and such further acts, instruments, and transfers as the Bondholder may reasonably require for the better assuring, transferring, conveying, pledging, assigning, and confirming unto the Bondholder the Security. The Issuer covenants and agrees that, except as herein and in the Assignment provided, it has not and will not sell, transfer, convey, assign, pledge, encumber, grant a security interest in, or otherwise dispose of, or create or suffer to be created any lien, encumbrance, security interest, or charge upon, any part of the Security or the income and revenues therefrom or of its rights under the Contract, or enter into any contract or take any action by which the rights of the Bondholder may be impaired. 8.4. Inspection of Project Books. The Issuer covenants and agrees that all books and documents in its possession relating to the Project and the income and revenues derived from the Project shall at all reasonable times be open to inspection by such accountants or other agents as the Bondholder may from time to time designate. -10- 8.5. Rights Under and Possession of the Contract. The Contract, a duly executed original or counterpart of which has been filed with you, sets forth the covenants and obligations of the Issuer and the Purchaser, including provisions that subsequent to the initial issuance of the Bond and prior to its payment in full, the Contract may not be effectively amended, changed, modified, altered, or terminated (other than as provided therein) without the written consent of the Bondholder, and reference is hereby made to the Contract for a detailed statement of such covenants and obligations of the Purchaser under the Contract, and the Bondholder in its own name or in the name of the Issuer may enforce all rights of the Issuer and all obligations of the Purchaser under and pursuant to the Contract, whether or not the Issuer is in default hereunder. So long as the Bond remains outstanding, and for such longer period when required by the Bond Documents, the Issuer shall faithfully and punctually perform and observe all obligations and undertakings on its part to be performed and observed under the Contract. The Issuer covenants to maintain, at all times, the validity and effectiveness of the Contract and (except as expressly permitted thereby) shall take no action, shall permit no action to be taken by others, and shall not omit to take any action or permit others to omit to take any action, which action or omission might release the Purchaser from its liabilities or obligations under the Contract or result in the surrender, termination, amendment, or modification of, or impair the validity of, the Contract. The Issuer covenants to diligently enforce all covenants, undertakings, and obligations of _ the Purchaser under the Contract, and the Issuer hereby authorizes and directs the Bondholder to enforce any and all of the Issuer's rights under the Contract on behalf of the Issuer. 8.6. Recording and Filing. The security interest of the Bondholder created by the Assignment shall be perfected by the filing of financing statements required to be filed pursuant to the State of Georgia Uniform Commercial Code or by the taking of possession of appropriate collateral. Such financing or continuation statements shall be filed from time to time, and the appropriate parties shall take or maintain possession of appropriate collateral, as is necessary to preserve the security interest of the Assignment. 8.7. Maintenance of Existence; Compliance with Laws. The Issuer shall at all times maintain its corporate existence or assure the assumption of its obligations under the Bond Documents by any other entity succeeding to its powers. The Issuer shall comply with all valid acts, rules, regulations, orders, and directions of any legislative, executive, administrative, or judicial body known to it to be applicable to the Bond Documents. -11- 9. EVENTS OF DEFAULT AND REMEDIES. 9.1. Events of Default. (a) If any of the following events occur, it is hereby defined as and declared to be and to constitute a default and an "Event of Default": (1) default in the due and punctual payment of any interest on the Bond, (2) default in the due and punctual payment of any principal of the Bond (or premium thereon, if any), whether at the stated maturity thereof, or upon proceedings for redemption thereof, (3) any material breach by the Issuer of any representation or warranty made in the Bond Documents or default in the performance or observance of any other of the covenants, agreements, or conditions on the part of the Issuer in the Bond Documents or in the Bond contained, subject to the provisions of subsection (b) of this Section 9.1, (4) the issuance of an order of relief by the Bankruptcy Court of the United States District Court having valid jurisdiction, granting the Issuer relief under federal bankruptcy law, or the issuance by any other court having valid jurisdiction of an order or decree under applicable federal or state law providing for the appointment of a receiver, liquidator, assignee, trustee, or sequestrator (or other similar official) of the Issuer or any substantial part of its property, affairs, or assets, and the continuance of any such decree or order unstayed and in effect for a period of sixty consecutive days, (5) the consent by the Issuer to the institution of proceedings in bankruptcy against it, or to the institution of any proceeding against it under any federal or state insolvency laws, or to the filing of any petition, application, or complaint seeking the appointment of a receiver, liquidator, assignee, trustee, or sequestrator (or other similar official) of the Issuer or of any substantial part of its property, affairs, or assets, or (6) the occurrence of an "Event of Default" under any of the Bond Documents. (b) Anything herein to the contrary notwithstanding, no default under Section 9.1(a)(3) shall constitute an Event of Default until actual written notice of such default by registered or certified mail shall be given by the Bondholder to the Purchaser and the Issuer, and the Purchaser and Issuer shall have had thirty (30) days after receipt of such notice to correct such default or cause such default to be corrected and shall not have corrected such default or caused such default to be corrected within the applicable period; provided, however, if such default be such that it cannot with due diligence be cured within the applicable period but can be wholly cured within a period of time not materially detrimental to the rights of the Bondholder, to be determined conclusively by the Bondholder, it shall not constitute an Event of Default if corrective action is instituted by the Purchaser or the Issuer, as the case may be, within the applicable period and diligently pursued until the default is corrected in accordance with and subject to any directions or limitations of time established by the Bondholder. -12- With regard to any alleged default concerning which notice is given to the Purchaser under the provisions of this Section 9.1(b), the Issuer hereby grants the Purchaser full authority for the account of the Issuer to perform any covenant or obligation alleged in such notice to constitute a default,, in the name and stead' of the Issuer with full power to do any and all things and acts to the same extent that the Issuer could do and perform any such things and acts and with power of substitution. In addition, the Bondholder shall give written notice of all other Events of Default by registered or certified mail to the Purchaser, provided, however, such notice shall not be a condition precedent to the Bondholder exercising any right or remedy granted to it hereunder. 9.2. Remedies. Upon the occurrence of an Event of Default, you may, in your discretion, by written notice to the Issuer and the Purchaser, terminate your remaining commitment (if any) hereunder to make any further advances of purchase price of the Bond, whereupon any such commitment shall terminate immediately. If any Event of Default has occurred and is continuing, the Bondholder may exercise any right, power, or remedy permitted to it by law or under the terms of the Bond Documents and may proceed to protect and enforce the rights of the Bondholder by an action at law, suit in equity, or other appropriate proceeding, whether for the specific performance of any covenant or agreement contained herein, in the other Bond Documents, or in the Bond, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise. 9.3. No Waivers or Election of Remedies; Expenses. No course of dealing and no delay or omission on the part of the Bondholder in exercising any right, power,. or remedy shall operate as a waiver thereof or otherwise impair or prejudice the Bondholder's rights, powers, or remedies, but any such right, power, or remedy may be exercised from time to time and as often as may be deemed expedient. No right, power, or remedy conferred by this Agreement, by any other Bond Document, or by the Bond upon the Bondholder shall be exclusive of any other right, power, or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute, or otherwise, but each and every such right, power, or remedy shall be cumulative and shall be in addition to every other right, power, or remedy given under this Agreement, any other Bond Document, or the Bond or now or hereafter existing at law, in equity, by statute, or otherwise. Without limiting the obligations of the Issuer under Section 12, the Issuer will pay to the Bondholder on demand, but solely from the Security, such further amount as shall be sufficient to cover all costs and expenses of the Bondholder incurred in any enforcement or collection under this Section 9, including, without limitation, reasonable attorneys' fees, expenses, and disbursements. -13- 10. REGISTRATION; TRANSFER; SUBSTITUTION OF THE BOND. 10.1. Registration of the Bond. The Issuer shall keep at its office a register for the registration and registration of transfers of the Bond. The name and address of the Bondholder, each transfer thereof, and the name and address of each transferee of the Bond shall be registered in such register. Prior to due presentment for registration of transfer, the Person in whose name the Bond shall be registered shall be deemed and treated as the owner and holder thereof for all purposes hereof (including the receipt of payments of principal of, premium, if any, and interest on the Bond), whether or not the Bond shall be overdue, and the Issuer shall not be affected by any notice or knowledge to the contrary. 10.2. Transfer of the Bond. Upon surrender of the Bond at the office of the Issuer for registration of transfer, duly endorsed or accompanied by a written instrument of transfer duly executed by the registered owner of the Bond or its attorney duly authorized in writing and accompanied by the address for notices of each transferee of the Bond, the Issuer shall execute and deliver, at the Issuer's expense (except as provided below), a new Bond in exchange therefor, in a principal amount equal to the unpaid principal amount of the surrendered Bond. Each such new Bond shall be payable to such Person as the former Bondholder may request and shall be issued as a single, fully registered bond substantially in the form of Exhibit A. Each such new Bond shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Bond or dated the date of the surrendered Bond if no interest shall have been paid thereon. The Issuer may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of the Bond. The Bond shall not be transferred in a denomination of less than the unpaid principal amount of the surrendered Bond. No transfer of the Bond shall be made until (1) the transferring Bondholder has assigned all of its right, title, and interest in this Agreement and the Assignment to such transferee, and (2) the transferee has assumed in writing your obligations under this Agreement and has executed and delivered to the Purchaser and the Issuer an Investment Letter substantially in the form of Exhibit E. The Issuer shall not be required to transfer the Bond until the certificate of validation on any new Bond shall have been properly executed by the Clerk of the Superior Court of Cobb County. 10.3. Replacement of the Bond. Upon receipt by the Issuer of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction, or mutilation of the Bond, and (a) in the case of loss, theft, or destruction, of indemnity reasonably satisfactory to it (provided that if the Bondholder is, or is a nominee for, you or another Bondholder with a minimum net worth of at least $25,000,000, such Person's own unsecured agreement of indemnity shall be deemed to be satisfactory), or (b) in the case of mutilation, upon surrender and cancellation thereof, -14- the Issuer at its own expense shall execute and deliver, in lieu thereof, a new single, fully registered Bond, dated and bearing interest from the date to which interest shall have been paid on such lost, stolen, destroyed, or mutilated Bond or dated the date of such lost, stolen, destroyed, or mutilated Bond if no interest shall have been paid thereon. 11. PAYMENTS ON THE BOND. All sums becoming due on the Bond for principal, premium, if any, and interest shall be paid in lawful money of the United States by the method and at the address specified for such purpose by the Bondholder in writing to the Purchaser and the Issuer, without the presentation or surrender of the Bond or the making of any notation thereon, except that upon written request of the Issuer made concurrently with or reasonably promptly after payment or redemption in full of the Bond, you shall surrender the Bond for cancellation, reasonably promptly after any such request, to the Issuer. Prior to any sale or other disposition of the Bond held by you or your nominee you shall endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon. All payments of principal of the Bond (whether at maturity or upon redemption), including the date and amount of each payment, shall be endorsed by you on the Schedule of Payments and Redemptions attached to the Bond; provided, however, that any failure by you to endorse such information on such Schedule shall not in any manner affect the obligation of the Issuer to make payments of principal and interest in accordance with the terms of the Bond. The Issuer hereby irrevocably authorizes and directs you to enter on the Schedule of Payments and Redemptions the date and amount of each payment of principal of the Bond. You shall permit the Issuer or the Purchaser at any time during regular business hours to make at your principal office an appropriate notation on the Bond of payments of principal thereof, if at least five days prior thereto the Issuer or the Purchaser shall have given written notice of its intention to do so and if it shall not have received from you a written confirmation that the requested notation has been made. In the event that on any date the Issuer shall pay less than the amount then due on the Bond, such partial payment shall be applied to the amounts then due in the following order of priority: (i) reimbursable expenses and indemnities, (ii) accrued interest and premium, if any, on the Bond, (iii) principal of the Bond, and (iv) any other amounts due under the Bond or the Bond Documents. 12. EXPENSES, ETC. 12.1. Transaction Expenses. Whether or not the transactions contemplated hereby are consummated, the Issuer will pay, but solely from the Security, all costs and expenses (including reasonable attorneys' fees of a counsel and, if reasonably required, local or other counsel) incurred by you in connection with such transactions and in connection with any amendments, waivers, or consents under or in respect of this Agreement, the other Bond Documents, or the Bond (whether or not such amendment, waiver, or consent becomes effective), including, without limitation: (a) the costs and expenses incurred in enforcing or defending (or determining whether or how to enforce or -15- defend) any rights under this Agreement, the other Bond Documents, or the Bond, or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Agreement, the other Bond Documents, or the Bond, or by reason of being the Bondholder, and (b) the costs and expenses, including financial advisors' fees, incurred in connection with the insolvency or bankruptcy of the Issuer or the Purchaser or in connection with any work-out or restructuring of the transactions contemplated hereby, by the other Bond Documents, and by the Bond. 12.2. Survival. The obligations of the Issuer under this Section 12 will survive the payment or transfer of the Bond, the enforcement, amendment, or waiver of any provision of this Agreement, any of the other Bond Documents, or the Bond, and the termination of this Agreement. 13. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT. All representations and warranties contained herein shall survive the execution and delivery of this Agreement and the Bond, the purchase or transfer by you of the Bond or interest therein and the payment of the Bond, and may be relied upon by any subsequent Bondholder, regardless of any investigation made at any time by or on behalf of you or any other Bondholder. All statements contained in any certificate or other instrument delivered by or on behalf of the Issuer pursuant to this Agreement shall be deemed representations and warranties of the Issuer under this Agreement. Subject to the preceding sentence, this Agreement, the other Bond Documents, and the Bond embody the entire agreement and understanding between you and the Issuer and supersede all prior agreements and understandings relating to the subject matter hereof. 14. AMENDMENT AND WAIVER. 14.1. Requirements This Agreement, the Assignment, and the Bond may be amended, changed, and modified, and the observance of any term hereof or of the Assignment or the Bond may be waived (either retroactively or prospectively), by the written agreement of the parties hereto, with (and only with) the prior written consent of the Purchaser. 14.2. Binding Effect, etc. Any amendment, change, modification, or waiver consented to as provided in this Section 14 shall be binding upon you and upon each future Bondholder and upon the Issuer without regard to whether the Bond has been marked to indicate such amendment, change, modification, or waiver. No such amendment, change, modification, or waiver will extend to or affect any obligation, covenant, agreement, or Event of Default not expressly amended, changed, modified, or waived or impair any right consequent thereon. No course of dealing between the Issuer and any Bondholder nor any delay in exercising any rights hereunder or under the Bond shall operate as a waiver of any rights of any Bondholder. -16- 14.3. Contract. The Issuer shall not amend, change, or modify the Contract, or waive the observance of any term thereof, without the prior written consent of the Bondholder. 15. NOTICES. All notices, certificates, and other communications provided for hereunder shall be in writing and sent (a) by telecopy if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid), or (b) by registered or certified mail with return receipt requested (postage prepaid), or (c) by a recognized overnight delivery service (with charges prepaid). Any such notice must be sent to any party hereto at the following addresses or to such other address as any party hereto shall have specified in writing to the other party: Issuer: Downtown Smyrna Development Authority 2800 King Street, S.E. Smyrna, Georgia 30080-3506 Attention: Chairman Bondholder: First Union National Bank 999 Peachtree Street Atlanta, Georgia 30309 Attention: Government and Institutional Banking Portfolio Management Notices under this Section 15 will be deemed given only when actually received. A duplicate copy of each notice, certificate, or other communication given hereunder shall also be given to the Purchaser. 16. SUBSTITUTION OF PURCHASER. You shall have the right to substitute any one of your Affiliates as the purchaser of the Bond, by written notice to the Issuer and the Purchaser, which notice shall be signed by both you and such Affiliate, shall contain such Affiliate's agreement to be bound by this Agreement, and shall contain a confirmation by such Affiliate of the accuracy with respect to it of the representations set forth in Section 6. Upon receipt of such notice, wherever the word "you" is used in this Agreement (other than in this Section 16), such word shall be deemed to refer to such Affiliate in lieu of you. In the event that such Affiliate is so substituted as a purchaser hereunder and such Affiliate thereafter transfers to you the Bond then held by such Affiliate, upon receipt by the Issuer and the Purchaser of notice of such transfer, wherever the word "you" is used in this Agreement (other than in this Section 16), such word shall no longer be deemed to refer to such Affiliate, but shall refer to you, and you shall have all the rights of the original Bondholder under this Agreement. -17- 17. INTERPRETATION. 17.1. Definitions. Certain words and terms used in this Agreement shall have the meaning given them in Section 1.01 of the Contract, which by this reference is incorporated herein. In addition to the words and terms defined elsewhere herein, the following words and terms shall have the meanings set forth below. When used herein, such words and terms shall have the meanings given to them by the language employed in Section 1.01 of the Contract and in this Section 17.1 defining such words and terms, unless the context or use clearly indicates otherwise. "Affiliate" means any Person directly or indirectly controlling, controlled by, or under common control with another Person or any Person controlling ten percent (10%) or more of the voting securities or equity or membership interest of such Person or any officer, director, or partner of such Person and if such Person is an officer, director, or partner, any entity for which such Person acts in any such capacity. For purposes of this definition, "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities or an equity interest, by contract, or otherwise. "Business Day" means any day other than a Saturday, a Sunday, or a day on which commercial banks in Atlanta, Georgia are required or authorized to be closed. "Closing" is defined in Section 3. "Contract" means the Agreement of Sale, dated as of July 1, 2001, between the Issuer and the Purchaser. The term Contract shall include any amendments or supplements thereto. "Default" means an event or condition the occurrence or existence of which would, with the lapse of time or the giving of notice or both, become an Event of Default. "Event of Default" is defined in Section 9. "Prime Rate" means the rate of interest announced by you from time to time as your "prime rate," "prime lending rate," "base rate," or similar reference rate (any such rate announced by you is a reference rate only and does not necessarily represent the best or lowest rate actually charged by you to any customer, and you may make loans at rates of interest that are at, above, or below such reference rate). For purposes of calculating interest based on the Prime Rate, and except as expressly provided below, the Prime Rate shall be adjusted daily. In the event the Prime Rate is discontinued as a standard, you shall designate a comparable reference rate as a substitute therefor. For purposes hereof, the Prime Rate in effect at the close of business on each Business Day shall be the Prime Rate for that day and any immediately succeeding non -Business Day or days. "Security" means any of the property subject to the operation of the assignment and pledge and grant of lien and security interest contained in the Assignment. -18- 17.2. Construction of Certain Terms. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires, the following rules of construction shall apply: (1) The use of the masculine, feminine, or neuter gender is for convenience only and shall be deemed and construed to include correlative words of the masculine, feminine, or neuter gender, as appropriate. (2) All references in this instrument to designated "Sections" and other subdivisions are to the designated Sections and other subdivisions of this instrument. The words "herein," "hereof," "hereto," "hereby," and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Section or other subdivision. (3) The terms defined in this Section include the plural as well as the singular. 17.3. Table of Contents; Titles and Headings. The table of contents; the titles of the sections, and the headings of the subdivisions of this Agreement are solely for convenience of reference, are not a part of this Agreement, and shall not be deemed to affect the meaning, construction, or effect of any of its provisions. 18. MISCELLANEOUS. 18.1. Successors and Assigns. All covenants and other agreements contained in this Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their respective successors and assigns (including, without limitation, any subsequent Bondholder) whether so expressed or not. 18.2. Payments Due on Non -Business Days. Anything in this Agreement or the Bond to the contrary notwithstanding, any payment of principal of or premium or interest on the Bond that is due on a date other than a Business Day shall be made on the next succeeding Business Day without including the additional days elapsed in the computation of the interest payable on such next succeeding Business Day. 18.3. Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by law) not invalidate or render unenforceable such provision in any other jurisdiction. -19- 18.4. Construction. Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant. Where any provision herein refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person. 18.5. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument. Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto. 18.6. Governing Law. This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of Georgia excluding choice -of -law principles of the law of such State that would require the application of the laws of a jurisdiction other than such State. 18.7. No Liability of Issuer's Officers. No recourse under or upon any obligation, covenant, or agreement contained in this Agreement, in any other Bond Document, or in the Bond, or for any claim based thereon, or under any judgment obtained against the Issuer, or by the enforcement of any assessment or penalty or otherwise or by any legal or equitable proceeding by virtue of any constitution, rule of law or equity, or statute or otherwise or under any other circumstances, under or independent of this Agreement, shall be*had against any incorporator, member; director, or officer, as such, past, present, or future, of the Issuer, or any incorporator, member, director, or officer of any successor corporation, as such, either directly or through the Issuer or any successor corporation, or otherwise, for the payment for or to the Issuer or any receiver thereof, or for or to the Bondholder or otherwise, of any sum that may be due and unpaid by the Issuer under this Agreement, under any other Bond Document, or upon the Bond. Any and all personal liability of every nature, whether at common law or in equity, or by statute or by constitution or otherwise, of any such incorporator, member, director, or officer, as such, to respond by reason of any act or omission on his part or otherwise, for the payment for or to the Issuer or any receiver thereof, or for or to the Bondholder or otherwise, of any sum that may remain due and unpaid under this Agreement, under any other Bond Document, or upon the Bond, is hereby expressly waived and released as a condition of and in consideration for the execution of this Agreement and the issuance of the Bond. 18.8. Third Party Beneficiary. The Purchaser is and shall be deemed to be a third party beneficiary of this Agreement. -20- SIGNATURES AND SEALS If you are in agreement with the foregoing, please sign the form of agreement on the accompanying counterpart of this Agreement and return it to the Issuer, whereupon the foregoing shall become a binding agreement between you and the Issuer. Very truly yours, DOWNTOWN SMYRNA DEVELOPMENT AUTHORITY By: Chairman (SEAL) Attest: Secretary The foregoing is hereby agreed to as of the date thereof. FIRST UNION NATIONAL BANK Authorized Officer -21- EXHIBIT A [FORM OF BOND] THIS BOND AND THE INSTRUMENTS HEREINAFTER DESCRIBED ARE SUBJECT TO AN INVESTMENT LETTER AGREEMENT AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO THE TERMS OF SUCH INVESTMENT LETTER AGREEMENT AND THE HEREINAFTER DESCRIBED BOND PURCHASE AGREEMENT. UNITED STATES OF AMERICA STATE OF GEORGIA DOWNTOWN SMYRNA DEVELOPMENT AUTHORITY REVENUE BOND (BRAWNER PROJECT), SERIES 2001 Number R-1 Maturity Date: August 1, 2021 Registered Owner: First Union National Bank Principal Amount $ Dated: July _, 2001 KNOW ALL MEN BY THESE PRESENTS that the DOWNTOWN SMYRNA DEVELOPMENT AUTHORITY (the "Issuer"), a public corporation duly created and existing under the laws of the State of Georgia, for value received, hereby promises to pay, but only from the source as hereinafter provided, to the registered owner shown above, or registered assigns, the principal sum stated above, or so much of the principal sum stated above as shall have been advanced and shall be outstanding, as indicated on the Schedule of Advances and the Schedule of Payments and Redemptions attached to this Bond, payable as provided herein. The principal represented by all advances of purchase price of this Bond under the hereinafter defined Bond Purchase Agreement, including the date and amount of principal represented- by each advance, shall be endorsed by the registered owner of this Bond on the Schedule of Advances attached to this Bond; provided, however, that any failure by the registered owner of this Bond to endorse such information on such Schedule shall not in any manner affect the obligation of the Issuer to make payments of principal and interest in accordance with the terms of this Bond. The Issuer hereby irrevocably authorizes and directs the registered owner of this Bond to enter on the Schedule of Advances attached to this Bond the date and amount of principal represented by each advance of purchase price of this Bond. 1190658A This Bond shall bear interest from its dated date on the outstanding principal amount hereof at the rate of 5.14% per annum, computed on the basis of a 360-day year consisting of twelve 30-day months. Interest on this Bond shall be payable on February 1, 2002, and semi-annually thereafter on each August 1 and February 1 of each year. Principal of this Bond shall be payable on August 1, in the years and in the amounts as follows, unless earlier called for redemption: Year Amount Year Amount 2002 $ 85,000 2012 $140,000 2003 90,000 2013 150,000 2004 95,000 2014 15 5, 000 2005 100,000 2015 165,000 2006 105,000 2016 175,000 2007 110,000 2017 180,000 2008 115,000 2018 190,000 2009 120,000 2019 200,000 2010 130,000 2020 210,000 2011 135,000 2021 225,000 This Bond shall bear interest on any overdue installment of principal and, to the extent permitted by applicable law, on any overdue installment of interest, at the aforesaid rate. A late charge shall be payable under this Bond in an amount equal to five percent (5%) of any installment payment hereunder that is not paid within fifteen (15) days after such payment is due. The following words and terms shall have the meanings set forth below for purposes of this Bond: "Business Day" means any day other than a Saturday, a Sunday, or a day on which commercial banks in Atlanta, Georgia are required or authorized to be closed. "Prime Rate" means the rate of interest announced by the registered owner of this Bond from time to time as its "prime rate," "prime lending rate," "base rate," or similar reference rate (any such rate announced by it is a reference rate only and does not necessarily represent the best or lowest rate actually charged by it to any customer, and it may make loans at rates of interest that are at, above, or below such reference rate). For purposes of calculating interest based on the Prime Rate, and except as expressly provided below, the Prime Rate shall be adjusted daily. In the event the Prime Rate is discontinued as a standard, the registered owner of this Bond shall designate a comparable reference rate as a substitute therefor. For purposes hereof, the Prime Rate in effect at the close of business on each Business Day shall be the Prime Rate for that day and any immediately succeeding non -Business Day or days. In order to assist the hereinafter defined Purchaser and the Issuer, First Union National Bank (the "Bond Buyer") has or will be engaging in transactions or hedges with other entities or making other arrangements for which the Bond Buyer could incur losses, costs, and expenses if the anticipated future interest payments on this Bond would not be made at the locked -in fixed -2- rate for the specified term due to any Failure to Advance, Redemption, or Acceleration as defined below. In the event of any Failure to Advance, Redemption, or Acceleration, a Premium on this Bond shall be due if the rate under "A" below exceeds the rate under `B" below. The Issuer shall on demand pay to the registered owner of this Bond, but solely from the source as hereinafter provided, the Premium, which shall be determined as follows: "Premium" = the Present Value of ((A-B) x C) + LIBOR Breakage, where: A = A rate per annum equal to the sum of (i) the bond equivalent yield (bid side) of the U.S. Treasury security with a maturity closest to the Maturity Date as reported by the Wall Street Journal (or other published source) on the Lock In Date, plus (ii) the corresponding swap spread of the Bond Buyer on the Lock In Date for a fixed rate payor to pay the Bond Buyer the fixed rate side of an interest rate swap of that maturity, plus (iii) 0.25%. B = A rate per annum equal to the sum of (i) the bond equivalent yield (bid side) of the U.S. Treasury security with a maturity closest to the Maturity Date as reported by the Wall Street Journal (or other published source) on the Break Date, plus (ii) the corresponding swap spread that the Bond Buyer determines another swap dealer would quote to the Bond Buyer on the Break Date for paying to the Bond Buyer the fixed rate side of an interest rate swap of that maturity. C = The sum of the products of (i) each Specified Principal Amount times (ii) the remaining number of days from and including the Break Date to but excluding the Scheduled Due Date for that Specified Principal Amount divided by 360 (and for any Redemption, multiplying that sum by a fraction equal to the principal amount being redeemed over the sum of each Specified Principal Amount that would, but for that redemption, have become due after the Break Date). "LIBOR Breakage" is any additional loss, cost, or expenses that the Bond Buyer may incur based on the difference between a London interbank offered rate in effect under any hedge or funding source of the Bond Buyer relating to this Bond's fixed interest rate and that which is available to the Bond Buyer in the London interbank market on the Break Date. "Present Value" is determined as of the Break Date using `B" above as the discount rate. -3- As used in this Bond: (1) "Acceleration" means that this Bond is declared due and payable, or this Bond, the Bond Purchase Agreement, or any commitment thereunder to make any advances on this Bond is terminated or cancelled, prior to the Maturity Date; (2) "Borrowing Date" means the date of issuance and delivery of this Bond or any other date on which any advance of this Bond is scheduled to be made; (3) "Break Date" means (i) the relevant Borrowing Date for any Failure to Advance, (ii) the Redemption Date for any Redemption, or (iii) otherwise the Acceleration date; (4) "Failure to Advance" means that any advance of this Bond fails to be made in full on or before the respective Borrowing Date for any reason or no reason; (5) "Lock In Date" means 1, 2001; (6) "Lock In Rate" means 5.14%; (7) "Maturity Date" means August 1, 2021, which is the last day the Lock In Rate would (but for a Failure to Advance, Redemption, or Acceleration) have remained in effect; (8) "Redemption" means that this Bond is redeemed on any date or dates ("Redemption Date") prior to the Maturity Date; (9) "Scheduled Due Date" means each of the repayment dates on this Bond as specified herein; and (10) "Specified Principal Amount" means each of the principal amounts corresponding to their respective repayment dates on this Bond as specified herein. The Bond Buyer shall determine the Premium hereunder in good faith using such methodology as it deems appropriate under the circumstance, and its determination shall be conclusive and binding in the absence of manifest error. The Premium shall be due, together with interest thereon computed on a 360-day basis, payable on demand and accruing at a rate per annum equal to the Prime Rate in effect for each day that such amount remains unpaid. The Premium is payable as liquidated damages, is a reasonable pre -estimate of the losses, costs, and expenses referred to above, is not a penalty, and will not require claim for, or proof of, actual damages. All sums becoming due on this Bond for principal, premium, if any, and interest shall be paid in lawful money of the United States by the method and at the address specified for such purpose by the registered owner of this Bond in writing to the Purchaser and the Issuer, without the presentation or surrender of this Bond or the making of any notation -hereon, except that upon the written request of the Issuer made concurrently with or reasonably promptly after payment or redemption in full of this Bond, the registered owner of this Bond shall surrender this Bond for cancellation, reasonably promptly after any such request, to the Issuer. Prior to any sale or other disposition of this Bond the registered owner of this Bond shall endorse hereon the amount of principal paid hereon and the last date to which interest has been paid hereon. All payments of principal of this Bond (whether at maturity or upon redemption), including the date and amount of each payment, shall be endorsed by the registered owner of this Bond on the Schedule of Payments and Redemptions attached to this Bond; provided, however, that any failure by the registered owner of this Bond to endorse such information on such Schedule shall not in any manner affect the obligation of the Issuer to make payments of principal and interest in accordance with the terms of this Bond. The Issuer hereby irrevocably authorizes and directs the registered owner of this Bond to enter on the Schedule of Payments and Redemptions the date and amount of each payment of principal of this Bond. -4- THIS BOND SHALL NEVER CONSTITUTE AN INDEBTEDNESS OR GENERAL OBLIGATION OF THE STATE OF GEORGIA, THE CITY OF SMYRNA, OR ANY OTHER POLITICAL SUBDIVISION OF THE STATE OF GEORGIA, WITHIN THE MEANING OF ANY CONSTITUTIONAL PROVISION OR STATUTORY LIMITATION WHATSOEVER, NOR A PLEDGE OF THE FAITH AND CREDIT OR TAXING POWER OF ANY OF THE FOREGOING OR OF THE ISSUER, NOR SHALL ANY OF THE FOREGOING BE SUBJECT TO ANY PECUNIARY LIABILITY HEREON. THIS BOND SHALL NOT BE PAYABLE FROM NOR A CHARGE UPON ANY FUNDS OTHER THAN THE REVENUES PLEDGED TO THE PAYMENT HEREOF AND SHALL BE A LIMITED OR SPECIAL OBLIGATION OF THE ISSUER PAYABLE SOLELY FROM THE FUNDS PROVIDED THEREFOR IN THE BOND PURCHASE AGREEMENT AND THE HEREINAFTER DEFINED ASSIGNMENT, INCLUDING THE PROCEEDS OF THE HEREINAFTER DESCRIBED AD VALOREM TAX, WHICH THE CITY OF SMYRNA IS OBLIGATED TO LEVY. NO OWNER OF THIS BOND SHALL EVER HAVE THE RIGHT TO COMPEL THE EXERCISE OF THE TAXING POWER OF THE STATE OF GEORGIA, THE CITY OF SMYRNA, THE ISSUER, OR ANY OTHER POLITICAL SUBDIVISION OF THE STATE OF GEORGIA, EXCEPT TO LEVY THE HEREINAFTER DESCRIBED AD VALOREM TAX, TO PAY THE PRINCIPAL OF THIS BOND OR THE INTEREST OR ANY PREMIUM HEREON, OR TO ENFORCE PAYMENT HEREOF AGAINST ANY PROPERTY OF THE FOREGOING, OTHER THAN THE PROCEEDS OF THE HEREINAFTER DESCRIBED AD VALOREM TAX, NOR SHALL THIS BOND CONSTITUTE A CHARGE, LIEN, OR ENCUMBRANCE, LEGAL OR EQUITABLE, UPON ANY PROPERTY OF THE FOREGOING OTHER THAN THE REVENUES PLEDGED TO THE PAYMENT HEREOF. NEITHER THE MEMBERS OF THE GOVERNING BODY OF THE ISSUER NOR ANY PERSON EXECUTING THIS BOND SHALL BE LIABLE PERSONALLY ON THIS BOND BY REASON OF THE ISSUANCE HEREOF. This Bond is the only bond of an authorized issue limited in original principal amount to $2,875,000, authorized to be, issued pursuant to a resolution duly adopted by the governing body of the Issuer for the purpose of financing the costs of acquiring, constructing, and installing the Brawner campus (hereinafter referred to as the "Project"), and related costs and necessary expenses incidental thereto. The Issuer will sell the Project to the City of Smyrna (the "Purchaser") pursuant to an Agreement of Sale (the "Contract"), dated the date hereof, under the terms of which the Purchaser (1) agreed to make installment payments of purchase price to the Issuer in amounts sufficient to enable the Issuer to pay the principal of, premium, if any, and interest on this Bond when due, and (2) agreed to levy an annual ad valorem tax on all taxable property located within the corporate limits of the Purchaser, at such rates, within the 15.00-mill limit prescribed by the Purchaser's Charter or such greater millage limit hereafter prescribed by applicable law, as may be necessary to produce in each year revenues that are sufficient to fulfill the Purchaser's obligations under the Contract. To secure its obligation to pay principal of, premium, if any, and interest on this Bond, the Issuer has assigned and pledged to First Union National Bank (the "Bond Buyer"), and granted a first priority security interest in, all of its right, title, and interest in the Contract (except for the Unassigned Rights, as defined in the hereinafter defined Bond Purchase Agreement) and -5- all revenues, payments, receipts, and moneys to be received and held thereunder, pursuant to an Assignment and Security Agreement (the "Assignment"), dated the date hereof, between the Issuer and the Bond Buyer. The Issuer issued and delivered this Bond to the Bond Buyer pursuant to, and the Bond Buyer purchased this Bond from the Issuer pursuant to, the terms and conditions of a Bond Purchase Agreement (the "Bond Purchase Agreement"), dated July ---, 2001, between the Issuer and the Bond Buyer. Reference is hereby made to the Assignment and the Bond Purchase Agreement for a description of the security for this Bond, the provisions, among others, with respect to the nature and extent of the security for this Bond, the rights, duties, and obligations of the Issuer, the Purchaser, and the registered owner of this Bond, and the provisions regulating the manner in which the terms of the Bond Purchase Agreement, the Assignment, and the Contract may be modified, to all of which provisions the owner of this Bond, on behalf of itself and its successors in interest, assents by acceptance hereof. This Bond shall be issued as a single, fully registered bond without coupons in the original principal amount of $2,875,000. Upon surrender of this Bond at the office of the Issuer for registration of transfer,. duly endorsed or accompanied by a written instrument of transfer duly executed by the registered owner of this Bond or its attorney duly authorized in writing and accompanied by the address for notices of each transferee of this Bond, the Issuer shall execute and deliver, at the Issuer's expense (except as provided below), a new Bond in exchange herefor, in a principal amount equal to the unpaid principal amount of the surrendered Bond. Each such new Bond shall be payable to such person as the former registered owner of this Bond may request and shall be issued as a single, fully registered bond. Each such new Bond shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Bond or dated the date of the surrendered Bond if no interest shall have been paid hereon. The Issuer may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of this Bond. This Bond shall not be transferred in a denomination of less than the unpaid principal amount of the surrendered Bond. No transfer of this Bond shall be made until (1) the transferring registered owner hereof has assigned all of its right, title, and interest in the Bond Purchase Agreement and the Assignment to such transferee, and (2) the transferee has assumed in writing the registered owner's obligations under the Bond Purchase Agreement and has executed and delivered to the Purchaser and the Issuer an Investment Letter substantially in the form of Exhibit E to the Bond Purchase Agreement. This Bond shall be subject to mandatory redemption by the Issuer prior to maturity on the earliest available scheduled interest payment date from excess moneys in the Project Fund held under the Bond Purchase Agreement, to the extent required in Section 4.03(b) of the Contract. If this Bond is called for redemption in the event described in the preceding sentence, this Bond shall be redeemed by the Issuer in a principal amount equal to the excess moneys in the Project Fund, at a redemption price equal to one hundred percent (100%) of the principal amount being redeemed plus accrued interest to the redemption date and plus premium calculated as provided in this Bond. This Bond shall be subject to optional redemption by the Issuer upon the written request of the Purchaser prior to maturity, in whole on any date or in part on any scheduled interest payment date, and if in part in amounts not less than $10,000, at a redemption price equal to one hundred percent (100%) of the principal amount being redeemed plus accrued interest to the redemption date and plus premium calculated as provided in this Bond. As a condition precedent to each optional redemption pursuant to the preceding sentence, the registered owner of this Bond shall receive written notice of such optional redemption not less than 30 days and not more than 60 days prior to the date fixed for such redemption. Each such notice shall specify the date of redemption, the principal amount of this Bond to be redeemed on such date, and the accrued interest (if the same can be calculated) to be paid on the redemption date with respect to the principal amount being redeemed. Any partial redemptions of this Bond shall be applied to the annual principal payments due on this Bond in the inverse order of their maturities. In the case of each redemption of this Bond, the principal amount of this Bond to be redeemed shall mature and become due and payable on the date fixed for such redemption, together with interest on such principal amount accrued to such date and the applicable premium, if any. From and after such date, unless the Issuer shall fail to pay such principal amount when so due and payable, together with the interest and premium, if any, as aforesaid, interest on such principal amount shall cease to accrue. The Issuer has designated this Bond as a "qualified tax-exempt obligation" for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. This Bond is issued pursuant to and in full conformity with a resolution duly adopted by the governing body of the Issuer under the authority of and in full conformity with the Constitution and laws of the State of Georgia, particularly the provisions of an amendment to Article VII, Section VII, Paragraph I of the Constitution of the State of Georgia of 1945 (1970 Ga. Laws 1117 to 1119, inclusive), now specifically continued as a part of the Constitution of the State of Georgia of 1983 pursuant to an Act of the General Assembly of the State of Georgia (1986 Ga. Laws 3957 to 3958, inclusive), as implemented by an Act of the General Assembly of the State of Georgia (1989 Ga. Laws 4382 to 4396, inclusive) (collectively the "Act"). This Bond is not a general obligation of the Issuer but is payable solely from the Security (as defined in the Bond Purchase Agreement). Pursuant to the provisions of the Contract, installment payments of purchase price sufficient for the prompt payment when due of the principal of, premium, if any, and interest on this Bond are to be paid to the registered owner of this Bond for the account of the Issuer and have been and are hereby again duly pledged for that purpose. The obligations hereunder shall be limited as provided in the Act. This Bond is issued by the Issuer to aid in the financing of a "project," as such term is defined in the Act, to accomplish the public purposes of the Act. IT IS HEREBY CERTIFIED, RECITED, AND DECLARED that all acts, conditions, and things required to exist, happen, and be performed precedent to and in the issuance of this Bond do exist, have happened, and have been performed in due time, form, and manner as required by law in order to make this Bond a valid and legal revenue obligation of the Issuer and that the issuance of this Bond, together with all other obligations of the Issuer, does not exceed or violate any constitutional or statutory limitation applicable to the Issuer. -7- IN WITNESS WHEREOF, the DOWNTOWN SMYRNA DEVELOPMENT AUTHORITY has caused this Bond to be executed by its Chairman by his manual signature, has caused its official seal to be impressed hereon, and has caused this Bond to be attested by its Secretary by his manual signature, all as of July _, 2001. DOWNTOWN SMYRNA DEVELOPMENT AUTHORITY (AUTHORITY SEAL) Chairman Attest: Secretary VALIDATION CERTIFICATE STATE OF GEORGIA COUNTY OF COBB The undersigned Clerk of the Superior Court of Cobb County, Georgia, does hereby certify that the within Bond and the security therefor was validated and confirmed by judgment of the Superior Court of Cobb County, Georgia rendered on the day of July 2001, that no intervention or objection was filed thereto, and that no appeal has been taken therefrom. WITNESS my official signature and the official seal of the Superior Court of Cobb County, Georgia. (COURT SEAL) Clerk, Superior Court, Cobb County, Georgia Date of Amount of Advance Advance 7/ /01 $ SCHEDULE OF ADVANCES Notation Made By Date of Amount of Advance Advance Notation Made By lea SCHEDULE OF PAYMENTS AND REDEMPTIONS Date of Amount of Notation Date of Amount of Notation payment Payment Made By Payment Payment Made By -10- SCHEDULE OF PAYMENTS AND REDEMPTIONS Date of Amount of Notation Date of Amount of Notation payment Payment Made By Payment Payment Made By -11- ASSIGNMENT AND TRANSFER FOR VALUE RECEIVED, the undersigned, hereby sells, assigns, and transfers unto (Tax Identification or Social Security No. ) the within Bond and all rights thereunder (including all of its right, title, and interest in and to the Bond Purchase Agreement, the Assignment, and the Contract referenced therein) and hereby irrevocably constitutes and appoints attorney to transfer the within Bond on the books kept for registration thereof, with full power of substitution in the premises. Dated: Signature NOTICE: The signature(s) to this assignment must correspond with the name as it appears upon the face of the within bond in every particular, without alteration or enlargement or any change whatsoever. -12- EXHIBIT B DOWNTOWN SMYRNA DEVELOPMENT AUTHORITY (a public corporation created and existing under the laws of the State of Georgia) as Seller and CITY OF SMYRNA (a municipal corporation created and existing under the laws of the State of Georgia) as Purchaser AGREEMENT OF SALE Dated as of July 1, 2001 THE RIGHTS AND INTEREST OF THE DOWNTOWN SMYRNA DEVELOPMENT AUTHORITY IN THIS AGREEMENT OF SALE AND THE REVENUES AND RECEIPTS DERIVED THEREFROM, EXCEPT FOR ITS UNASSIGNED RIGHTS, AS DEFINED HEREIN, HAVE BEEN ASSIGNED AND ARE THE SUBJECT OF A GRANT OF A SECURITY INTEREST TO FIRST UNION NATIONAL BANK, UNDER AN ASSIGNMENT AND SECURITY AGREEMENT DATED THE DATE HEREOF. 1190651.v1 AGREEMENT OF SALE TABLE OF CONTENTS (This Table of Contents is not a part of the Agreement of Sale and is only for convenience of reference.) Page PARTIESAND RECITALS..................................................................................................... I ARTICLE I - DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION..........................................................................................2 Section1.01. Definitions............................................................................................2 Section 1.02. Construction of Certain Terms............................................................... 5 Section 1.03. Table of Contents; Titles and Headings ................................................. 6 Section 1.04. Contents of Certificates or Opinions...................................................... 6 ARTICLE II - REPRESENTATIONS AND UNDERTAKINGS......................................7 Section 2.01. Representations by the Issuer................................................................. 7 Section 2.02. Representations by the Purchaser........................................................... 9 Section 2.03. Reliance by Bondholder......................................................................12 ARTICLE III - SALE OF THE PROJECT; SECURITY; TITLE...................................13 Section 3.01. Sale of the Project...............................................................................13 Section 3.02. Security for Payments under this Agreement.......................................13 Section 3.03. Security for the Bond; Perfection.........................................................15 Section 3.04. Warranty of Title.................................................................................16 ARTICLE IV - THE PROJECT; ISSUANCE OF THE BOND; PROJECT FUND .......17 Section 4.01. Agreement to Acquire, Construct, and Install the Project.....................17 Section 4.02. Agreement to Issue the Bond; Application of Proceeds ........................17 Section 4.03. Application of Moneys in the Project Fund..........................................17 Section 4.04. Disbursements from the Project Fund..................................................18 Section 4.05. Obligation of the Parties to Cooperate in Furnishing Documents; Reliance of the Depository ..............................................................19 Section 4.06. Establishment of Completion Date......................................................19 Section 4.07. Purchaser Required to Pay Project Costs in Event Project Fund Insufficient.....................................................................................19 Section 4.08. Authorized Purchaser and Issuer Representatives and Successors ........ 20 Section 4.09. Enforcement of Remedies against Contractors and Subcontractors and their Sureties and Against Manufacturers ......... 20 Section 4.10. Investment of Project Fund.................................................................. 20 Section 4.11. Special Investment Covenants............................................................. 21 Section 4.12. Calculation and Payment of Rebate Amount........................................21 (i) Page ARTICLE V - INSTALLMENT PURCHASE PROVISIONS; NATURE OF OBLIGATIONS OF PURCHASER .................................................. 22 Section 5.01. Term of Agreement............................................................................. 22 Section 5.02. Delivery and Acceptance of Possession ............................................... 22 Section 5.03. Purchase Price and Other Amounts Payable ......................................... 22 Section 5.04. Place of Purchase Price Payments........................................................ 23 Section 5.05. Nature of Obligations of Purchaser Hereunder ..................................... 23 ARTICLE VI - ADDITIONAL COVENANTS................................................................. 25 Section 6.01. No Warranty of Condition or Suitability by the Issuer ......................... 25 Section6.02. Indemnity............................................................................................ 25 Section 6.03. Annual Budgets and Financial Statements ........................................... 25 Section 6.04. Tax Covenants..................................................................................... 25 ARTICLE VII - ASSIGNMENT; PURCHASE PRICE PREPAYMENTS .......................27 Section 7.01. No Assignment by Purchaser ................................................ I.............. 27 Section 7.02. Redemption of Bond........................................................................... 27 Section 7.03. Prepayment of Purchase Price............................................................. 27 Section 7.04. Option to Prepay the Purchase Price and Redeem the Bond at Prior Optional Redemption Dates ................................................... 27 ARTICLE VIII - EVENTS OF DEFAULT AND REMEDIES...........................................28 Section 8.01. Events of Default Defined................................................................... 28 Section 8.02. Remedies on Default........................................................................... 29 Section 8.03. No Remedy Exclusive......................................................................... 29 Section 8.04. Agreement to Pay Fees and Expenses .................................................. 29 Section 8.05. Waiver of Events of Default................................................................ 30 ARTICLE 1X - MISCELLANEOUS .................................................................................31 Section9.01. Notices......................................................................I......................... 31 Section 9.02. Construction and Binding Effect.......................................................... 31 Section 9.03. Severability......................................................................................... 31 Section 9.04. Amounts Remaining in Funds............................................................. 32 Section 9.05. Amendments, Changes, and Modifications .......................................... 32 Section 9.06. Execution of Counterparts................................................................... 32 Section 9.07. Law Governing Construction of this Agreement..................................32 Section 9.08. Immunity of Officials, Officers, and Employees of Issuer and Purchaser........................................................................................ 32 SIGNATURES AND SEALS..................................................................................................31 EXHIBIT A - DESCRIPTION OF PREMISES..................................................................A-1 EXHIBIT B - DESCRIPTION OF EQUIPMENT.............................................................. B-1 AGREEMENT OF SALE This AGREEMENT OF SALE, dated as of July 1, 2001, by and between the Downtown Smyrna Development Authority (the "Issuer"), a public corporation created and existing under the laws of the State of Georgia, and the City of Smyrna (the "Purchaser"), a municipal corporation created and existing under the laws of the State of Georgia; WITNESSETH: WHEREAS, the Issuer desires to sell the Project, as hereinafter defined, to the Purchaser, and the Purchaser desires to purchase the Project from the Issuer, subject to the terms and conditions of and, for the purposes set forth in this Agreement; and WHEREAS, the Issuer and the Purchaser are authorized under the Constitution and laws of the State of Georgia to enter into this Agreement for the purposes set forth herein; NOW, THEREFORE, for and in consideration of the promises and covenants hereinafter contained, the parties hereby agree as follows: ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION Section 1.01. Definitions. Certain words and terms used in this Agreement are defined herein. When used herein, such words and terms shall have the meanings given to them by the language employed in this Article I defining such words and terms, unless the context clearly indicates otherwise. In addition to the words and terms defined elsewhere herein, the following words and terms are defined terms under this Agreement: "Act" means an amendment to Article VII, Section VII, Paragraph I of the Constitution of the State of Georgia of 1945 (1970 Ga. Laws 1117 to 1119, inclusive), now specifically continued as a part of the Constitution of the State of Georgia of 1983 pursuant to an Act of the General Assembly of the State of Georgia (1986 Ga. Laws 3957 to 3958, inclusive), as implemented by an Act of the General Assembly of the State of Georgia (1989 Ga. Laws 4382 to 4396, inclusive), and as the same may be from time to time supplemented and amended. "Additional Contract" means a contract or supplemental agreement binding the Purchaser pursuant to Article IX, Section III, Paragraph I of the Constitution of the State of Georgia of 1983, pursuant to the terms of which a payment obligation is created or expanded from the Purchaser to the other party to such contract. "Agreement" means the within Agreement of Sale between the Issuer and the Purchaser, as the same may be amended from time to time in accordance with the provisions hereof. "Assignment" means the Assignment and Security Agreement, dated the date hereof, between the Issuer and the Bond Buyer, under the terms of which the Issuer assigned and pledged, and granted a first priority security interest in, its right, title, and interest in this Agreement (except Unassigned Rights) to the Bond Buyer, as security for the payment of principal of, premium, if any, and interest on the Bond. The term Assignment shall include any amendments or supplements thereto. "Authorized Issuer Representative" means the person at the time designated to act on behalf of the Issuer by written certificate furnished to the Purchaser, the Bondholder, and the Depository, containing the specimen signature of such person and signed on behalf of the Issuer by the Chairman or Vice Chairman of its Governing Body. Such certificate or any subsequent or supplemental certificate so executed may designate an alternate or alternates. "Authorized Purchaser Representative" means the person at the time designated to act on behalf of the Purchaser by written certificate furnished to the Issuer, the Bondholder, and the Depository, containing the specimen signature of such person and signed on behalf of the Purchaser by its Mayor or Mayor Pro Tem. Such certificate or any subsequent or supplemental certificate so executed may designate an alternate or alternates. -2- "Bond" means the revenue bond designated "Downtown Smyrna Development Authority Revenue Bond (Brawner Project), Series 2001," dated the date of its delivery, in the principal amount of $2,875,000, to be issued pursuant to the Bond Purchase Agreement, and any bond issued in substitution or exchange therefor. "Bond Buyer" means First Union National Bank, Atlanta, Georgia, and its successors and assigns. "Bond Documents" means, collectively, this Agreement, the Assignment, and the Bond Purchase Agreement. "Bondholder" means the Person in whose name the Bond is registered on the bond registration books kept and maintained by the Issuer. "Bond Purchase Agreement" means the Bond Purchase Agreement, dated the date hereof, between the Issuer and the Bond Buyer, under the terms of which the Issuer agreed to issue and sell the Bond to the Bond Buyer and the Bond Buyer agreed to purchase the Bond from the Issuer. The term Bond Purchase Agreement shall include any amendments or supplements thereto. "Bond Resolution" means the resolution or resolutions adopted by the Governing Body of the Issuer authorizing the issuance and sale of the Bond and the security therefor. "Building" means that certain building and all other facilities and improvements constituting part of the Project and not constituting part of the Equipment, which are or will be located on the Premises. "Code" means the Internal Revenue Code of 1986, as amended. "Completion Date" means the date of completion of the acquisition, construction, and installation of the Project, as -that date shall be certified as provided in Section 4.06 hereof. "Construction Contracts" means the contracts between the Issuer and the general contractor for the construction of the Project and the contracts between the Issuer and suppliers of materials and Equipment. "Construction Period" means the period between the beginning of construction of the Building and site work incidental thereto and the Completion Date. "Consulting Architect" means the architect or architectural firm at the time employed by the Purchaser and designated to act on behalf of the Issuer by written certificate furnished to the Bondholder and the Depository, containing the signature of such person or the signature of a partner or officer of such firm, and signed on behalf of the Purchaser by its Mayor or Mayor Pro Tem. and on behalf of the Issuer by the Chairman or Vice Chairman of its Governing Body. The Consulting Architect shall be registered and qualified to practice under the laws of the State and shall not be a full-time employee of the Issuer or the Purchaser. "Contracts" means this Agreement, the Prior Contract, and all Additional Contracts. -3- "Costs of the Project" means those costs and expenses in connection with the acquisition, construction, and installation of the Project permitted by Section 4.03 hereof to be paid or reimbursed from proceeds of the Bond. "Depository" means First Union National Bank, Atlanta, Georgia, and its successors and assigns. "Equipment" means the equipment, machinery, furnishings, and other property described in Exhibit B attached hereto, which, by this reference thereto, is incorporated herein. "Event of Default" means any event specified in Section 8.01 of this Agreement. "Fiscal Year" means any period of twelve consecutive months adopted by the Purchaser as its fiscal year for financial reporting purposes and shall initially mean the period beginning on July 1 of each calendar year and ending on June 30 of the next calendar year. "Governing Body" means, in the case of the Issuer, the members of the Issuer and, in the case of the Purchaser, its Mayor and Council. "Issuer" means the Downtown Smyrna Development Authority, a public corporation created and existing under the laws of the State, the party of the first part hereto, and its successors and assigns. "Lien" . means any mortgage or pledge of or security interest in or lien, charge, or encumbrance on the Project. "Permitted Investments" means the obligations in which the Issuer is permitted to invest proceeds of the Bond pursuant to applicable law. "Person" means natural persons, firms, joint ventures, associations, trusts, partnerships, corporations, and public bodies. "Plans and Specifications" means the detailed plans and specifications for the construction of the Project prepared by the Consulting Architect or by architects and engineers acceptable to the Consulting Architect, as amended from time to time by the Purchaser, a copy of which is or will be on file with the Bondholder. "Premises" means the real estate described in Exhibit A attached hereto, which, by this reference thereto, is incorporated herein. "Prior Contract" means the Fourth Amended and Restated Lease Contract, dated as of September 1, 1989, between the Issuer and the Purchaser. "Project" means the Brawner campus and all related property both real and personal, consisting of the Premises, the Building, and the Equipment. "Project Fund" means the Project Fund created in Section 5.1 of the Bond Purchase Agreement and referred to herein. -4- "Purchase Price" means the purchase price payable by the Purchaser to the Issuer pursuant to Section 5.03(a) of this Agreement. "Purchaser" means the City of Smyrna, a municipal corporation created and existing under the laws of the State, the party of the second part hereto, and its successors and assigns. "Rebate Amount" means the rebatable arbitrage in connection with the Bond, which is payable to the United States Treasury pursuant to Section 148(f) of the Code and any Regulations proposed or promulgated in connection therewith. "Rebate Calculator" means any nationally recognized bond counsel, nationally recognized firm of certified public accountants, or other firm acceptable to the Bondholder, which is expert in making the calculations required by Section 148(f) of the Code, appointed by the Purchaser pursuant to Section 4.12 hereof to make the calculations required by Section 148(0 of the Code and any Regulations proposed or promulgated in connection therewith. Code. "Regulations" means the Treasury Regulations promulgated under and pursuant to the "State" means the State of Georgia. "Unassigned Rights" means all of the rights of the Issuer to receive reimbursements and payments pursuant to Sections 5.03(b), 6.02, and 8.04 hereof, to give consents and approvals pursuant to Section 4.01 hereof, and to be held harmless and indemnified pursuant to Section 6.02 hereof. Section 1.02. Construction of Certain Terms. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires, the following rules of construction shall apply: (1) The use of the masculine, feminine, or neuter gender is for convenience only and shall be deemed and construed to include correlative words of the masculine, feminine, or neuter gender, as appropriate. (2) "This Agreement" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more agreements of sale supplemental hereto entered into pursuant to the applicable provisions hereof. (3) All references in this instrument to designated "Articles," "Sections," and other subdivisions are to the designated Articles, Sections, and other subdivisions of this instrument. The words "herein," "hereof," and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section, or other subdivision. (4) The terms defined in this Article shall have the meaning assigned to them in this Article and include the plural as well as the singular. -5- (5) All accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles as promulgated by the American Institute of Certified Public Accountants, on and as of the date of this instrument. Section 1.03. Table of Contents; Titles and Headings. The table of contents, the titles of the articles, and the headings of the sections of this Agreement are solely for convenience of reference, are not a part of this Agreement, and shall not be deemed to affect the meaning, construction, or effect of any of its provisions. Section 1.04. Contents of Certificates or Opinions. Every certificate or opinion with respect to the compliance with a condition or covenant provided for in this Agreement shall include: (i) a statement that the person or persons making or giving such certificate or opinion have read such covenant or condition and the definitions herein relating thereto, (ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based, (iii) a statement that, in the opinion of the signers, they have made or caused to be made such examination or investigation as is necessary to enable them to express an informed opinion as to whether or not such covenant or condition has been complied with, and (iv) a statement as to whether, in the opinion of the signers, such condition or covenant has been complied with. Any such certificate or opinion made or given by an official of the Issuer or the Purchaser may be based, insofar as it relates to legal or accounting matters, upon a certificate or an opinion of counsel or an accountant, which certificate or opinion has been given only after due inquiry of the relevant facts and circumstances, unless such official knows that the certificate or opinion with respect to the matters upon which his certificate or opinion may be based as aforesaid is erroneous or in the exercise of reasonable care should have known that the same was erroneous. Any such certificate or opinion made or given by counsel or an accountant may be based (insofar as it relates to factual matters with respect to information that is in the possession of an official of the Issuer or the Purchaser or any third party) upon the certificate or opinion of or representations by an official of the Issuer or the Purchaser or any third party on whom counsel or an. accountant could reasonably rely unless such counsel or such accountant knows that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion may be based as aforesaid are erroneous or in the exercise of reasonable care should have known that the same were erroneous. The same official of the Issuer or the Purchaser, or the same counsel or accountant, as the case may be, need not certify or opine to all of the matters required to be certified or opined under any provision of this Agreement, but different officials, counsel, or accountants may certify or opine to different matters, respectively. [End of Article I] IRI ARTICLE H REPRESENTATIONS AND UNDERTAKINGS Section 2.01. Representations by the Issuer. The Issuer makes the following representations and warranties as the basis for the undertakings on its part herein contained: (a) Creation and Authority. The Issuer is a public corporation duly created and validly existing under the laws of the State, including the provisions of the Act. The Issuer has all requisite power and authority under the Act and the laws of the State (1) to issue the Bond to finance the costs of acquiring, constructing, and installing the Project, (2) to acquire, construct, and install the Project and to sell the same to the Purchaser, and (3) to enter into, perform its obligations under, and exercise its rights under this Agreement, the Bond Purchase Agreement, and the Assignment. The Act authorizes the Issuer to issue revenue bonds and use the proceeds thereof for the purpose of paying all or any part of the cost of any "project," which includes the acquisition, construction, remodeling, altering, renovating, equipping, maintaining, and operating of buildings, both private and public, and the usual and convenient facilities appertaining to such undertakings and extension and improvement of such buildings, the acquisition of parking facilities or parking areas in connection therewith, the acquisition of the necessary property therefor, both real and personal, and the sale of any part or all of such buildings, including real and personal property, so as to assure the efficient and proper development, maintenance, and operation of such buildings deemed by the Issuer to be necessary, convenient, or desirable in connection therewith. The Act also authorizes the Issuer (I)to construct, erect, purchase, acquire, renovate, rehabilitate, improve, and sell projects, (2) to make and execute contracts and other instruments necessary or convenient to exercise the powers of the Issuer, including, but not limited to, contracts for construction of projects and contracts for sale of projects, and (3) to contract for any period, not exceeding 50 years, with any municipality of the State for the use by such municipality of any facilities or services of the Issuer, provided that such contracts shall deal with such activities and transactions as the Issuer and any such municipality are by law authorized to undertake. The Act also authorizes the Issuer, as security for repayment of its revenue bonds, to pledge, convey, assign, hypothecate, or otherwise encumber any property of the Issuer and to execute any agreement for the sale of its revenue bonds, security agreement, assignment, or other instrument as may be necessary or desirable, in the judgment of the Issuer, to secure any such revenue bonds. The Issuer has found that the Project constitutes a "project" within the meaning of that term as defined in the Act, has found that the Project will further the redevelopment of the downtown Smyrna area, and has found that the Project is for the lawful and valid public purposes set forth in the Act. (b) Pending? Litigation. There are no actions, suits, proceedings, inquiries, or investigations pending or, to the knowledge of the Issuer, after making due inquiry with respect thereto, threatened against or affecting the Issuer in any court or by or before any governmental authority or arbitration board or tribunal, which involve the possibility of materially and adversely affecting the transactions contemplated by this Agreement or which, in any way, would adversely affect the validity or enforceability of the Bond, the Bond Purchase Agreement, the Assignment, this Agreement, or any agreement or instrument to which the Issuer is a party and which is used or contemplated for use in the consummation of the transactions contemplated -7- hereby or thereby, nor is the Issuer aware of any facts or circumstances presently existing which would form the basis for any such actions, suits, or proceedings. (c) Agreements Are Legal and Authorized. The execution and delivery by the Issuer of this Agreement, the Bond, the Bond Purchase Agreement, and the Assignment and the compliance by the Issuer with all of the provisions of each thereof (i) are within the purposes, powers, and authority of the Issuer, (ii) have been done in full compliance with the provisions of the Act and have been approved by the Governing Body of the Issuer and are legal and will not conflict with or constitute on the part of the Issuer a violation of or a breach of or a default under any organic document, indenture, mortgage, security deed, pledge, note, lease, loan, or installment sale agreement, contract, or other agreement or instrument to which the Issuer is a party or by which the Issuer or its properties are otherwise subject or bound, or any license, judgment, decree, law, statute, order, writ, injunction, demand, rule, or regulation of any court or governmental agency or body having jurisdiction over the Issuer or any of its activities or properties, and (iii) have been duly authorized by all necessary action on the part of the Issuer. (d) Governmental Consents. Neither the nature of the Issuer nor any of its activities or properties, nor any relationship between the Issuer and any other Person, nor any circumstance in connection with the offer, issue, sale, or delivery of the Bond is such as to require the consent, approval, permission, order, license, or authorization of, or the filing, registration, or qualification with, any governmental authority on the part of the Issuer in connection with the execution, delivery, and performance of this Agreement, the Bond Purchase Agreement, and the Assignment or the consummation of any transaction therein contemplated, or the offer, issue, sale, or delivery of the Bond, except as shall have been obtained or made and as are in full force and effect. (e) No Defaults. To the knowledge of the Issuer, after making due inquiry with respect thereto, no event has occurred and no condition exists that would constitute an event of default under the Bond Purchase Agreement or that, with the lapse of time or with the giving of notice or both, would become such am event of default. To the knowledge of the Issuer, after making due inquiry with respect thereto, the Issuer is not in default or violation in any material respect under the Act or under any organic document or other agreement or instrument to which it is a party or by which it may be bound. (f) No Prior Pledge. Neither this Agreement nor any of the payments or amounts to be received by the Issuer hereunder have been or will be assigned, pledged, or hypothecated in any manner or for any purpose or have been or will be the subject of a grant of a security interest by the Issuer other than as provided in the Assignment. (g) Disclosure. The representations of the Issuer contained in this Agreement and any certificate, document, written statement, or other instrument furnished to the Bond Buyer by or on behalf of the Issuer in connection with the transactions contemplated hereby do not contain any untrue statement of a material fact relating to the Issuer and do not omit to state a material fact relating to the Issuer necessary in order to make the statements contained herein and therein relating to the Issuer not misleading. Nothing has come to the attention of the Issuer that would materially and adversely affect or in the future may (so far as the Issuer can now reasonably foresee) materially and adversely affect the acquisition, construction, and installation of the ME Project by the Issuer or any other transactions contemplated by this Agreement, the Bond Purchase Agreement, and the Assignment, which has not been set forth in writing to the Bond Buyer or in the certificates, documents, and instruments furnished to the Bond Buyer by or on behalf of the Issuer prior to the date of execution of this Agreement in connection with the transactions contemplated hereby. (h) Compliance with Conditions Precedent to the Issuance of the Bond. All acts, conditions, and things required to exist, happen, and be performed precedent to and in the execution and delivery by the Issuer of the Bond do exist, have happened, and have been performed in due time, form, and manner as required by law; the issuance of the Bond, together with all other obligations of the Issuer, do not exceed or violate any constitutional or statutory limitation, and the revenues, funds, property, and amounts pledged to the payment of the principal of, premium, if any, and interest on the Bond, as the same become due, have been calculated to be sufficient in amount for that purpose. Section 2.02. Representations by the Purchaser. The Purchaser makes the following representations and warranties as the basis for the undertakings on its part herein contained: (a) Creation and Authority. The Purchaser is a municipal corporation duly created and validly existing under the laws of the State. The Purchaser has all requisite power and authority under the laws of the State to purchase the Project from the Issuer and to enter into, perform its obligations under, and exercise its rights under this Agreement. Article IX, Section III, Paragraph I(a) of the Constitution of the State of Georgia of 1983 authorizes the Purchaser to contract for any period not exceeding fifty years with any public corporation or public authority for joint services, for the provision of services, or for the joint or separate use of facilities or equipment, if such contract deals with activities, services, or facilities which the contracting parties are authorized by law to undertake or provide. Section 36-34-3 of the Official Code of Georgia Annotated authorizes the Purchaser to acquire, own, and operate parks, recreation grounds, and buildings for educational purposes. (b) Pending Litigation. There are no actions, suits, proceedings, inquiries, or investigations pending or, to the knowledge of the Purchaser, after making due inquiry with respect thereto, threatened against or affecting the Purchaser in any court or by or before any governmental authority or arbitration board or tribunal, which involve the possibility of materially and adversely affecting the properties, activities, prospects, profits, operations, or condition (financial or otherwise) of the Purchaser, or the ability of the Purchaser to perform its obligations under this Agreement, or the transactions contemplated by this Agreement or which, in any way, would adversely affect the validity or enforceability of this Agreement or any agreement or instrument to which the Purchaser is a party and which is used or contemplated for use in the consummation of the transactions contemplated hereby or thereby, nor is the Purchaser aware of any facts or circumstances presently existing that would form the basis for any such actions, suits, or proceedings. The Purchaser is not in default with respect to any judgment, order, writ, injunction, decree, demand, rule, or regulation of any court, governmental authority, or arbitration board or tribunal. In (c) Agreement Is Legal and Authorized. The execution and delivery by the Purchaser of this Agreement, the consummation of the transactions herein contemplated, and the fulfillment of or the compliance with all of the provisions hereof (i) are within the power, legal right, and authority of the Purchaser, (ii) are legal and will not conflict with or constitute on the part of the Purchaser a violation of or a breach of or a default under, any organic document, indenture, mortgage, security deed, pledge, note, lease, loan, or installment sale agreement, contract, or other agreement or instrument to which the Purchaser is a party or by which the Purchaser or its properties are otherwise subject or bound, or any license, law, statute, rule, regulation, judgment, order, writ, injunction, decree, or demand of any court or governmental agency or body having jurisdiction over the Purchaser or any of its activities or properties, and (iii) have been duly authorized by all necessary and appropriate official action on the part of the Governing Body of the Purchaser. This Agreement is the valid, legal, binding, and enforceable obligation of the Purchaser. The officials of the Purchaser executing this Agreement are duly and properly in office and are fully authorized and empowered to execute the same for and on behalf of the Purchaser. (d) Governmental Consents. Neither the Purchaser nor any of its activities or properties, nor any relationship between the Purchaser and any other Person, nor any circumstances in connection with the execution, delivery, and performance by the Purchaser of its obligations under this Agreement or the offer, issue, sale, or delivery by the Issuer of the Bond, is such as to require the consent, approval, permission, order, license, or authorization of, or the filing, registration, or qualification with, any governmental authority on the part of the Purchaser in connection with the execution, delivery, and performance of this Agreement or the consummation of any transaction herein contemplated, or the offer, issue, sale, or delivery of the Bond, except as shall have been obtained or made and as are in full force and effect and except as are not presently obtainable. To the knowledge of the Purchaser, after making due inquiry with respect thereto, the Purchaser will be able to obtain all such additional consents, approvals, permissions, orders, licenses, or authorizations of governmental authorities as may be required on or prior to the date the Purchaser is legally required to obtain the same. (e) No Defaults. No event has occurred and no condition exists that would constitute an Event of Default or that, with the lapse of time or with the giving of notice or both, would become an Event of Default. To the knowledge of the Purchaser, after making due inquiry with respect thereto, the Purchaser is not in default or violation in any material respect under any organic document or other agreement or instrument to which it is a party or by which it may be bound. (f) Compliance with Law. To the knowledge of the Purchaser, after making due inquiry with respect thereto, the Purchaser is not in violation of any laws, ordinances, or governmental rules or regulations to which it or its properties are subject and has not failed to obtain any licenses, permits, franchises, or other governmental authorizations (which are presently obtainable) necessary to the ownership of its properties or to the conduct of its affairs, which violation or failure to obtain might materially and adversely affect the properties, activities, prospects, profits, and condition (financial or otherwise) of the Purchaser, and there have been no citations, notices, or orders of noncompliance issued to the Purchaser under any such law, ordinance, rule, or regulation. -10- (g) Restrictions on the Purchaser. The Purchaser is not a party to or bound by any contract, instrument, or agreement, or subject to any other restriction, that materially and adversely affects its activities, properties, assets, operations, or condition (financial or otherwise). The Purchaser is not a party to any contract or agreement that restricts the right or ability of the Purchaser to enter into agreements of sale on an installment basis. (h) Disclosure. The representations of the Purchaser contained in this Agreement and any certificate, document, written statement, or other instrument furnished by or on behalf of the Purchaser to the Issuer or the Bond Buyer in connection with the transactions contemplated hereby, do not contain any untrue statement of a material fact and do not omit to state a material fact necessary to make the statements contained herein or therein not misleading. There is no fact that the Purchaser has not disclosed to the Issuer or the Bond Buyer in writing that materially and adversely affects or in the future may (so far as the Purchaser can now reasonably foresee) materially and adversely affect the purchase of the Project or the properties, activities, prospects, operations, profits, or condition (financial or otherwise) of the Purchaser, or the ability of the Purchaser to perform its obligations under this Agreement or any of the documents or transactions contemplated hereby or thereby or any other transactions contemplated by this Agreement, which has not been set forth in writing to the Bond Buyer or in the certificates, documents, and instruments furnished to the Bond Buyer by or on behalf of the Purchaser prior to the date of execution of this Agreement in connection with the transactions contemplated hereby. (i) Project Compliance. The Project complies or will comply with all presently applicable building and zoning, health, environmental, and safety ordinances and laws and all other applicable laws, rules, and regulations of any and all governmental and quasi -governmental authorities having jurisdiction over any portion of the Project. 0) Purchaser's Tax Certificate. The representations and warranties of the Purchaser set forth in the Purchaser's Tax Certificate, dated the date of issuance and delivery of the Bond, are hereby incorporated herein and made a part hereof by this reference thereto, as if fully set forth herein, and are true and correct as of the date hereof. (k) Financial Statements. The balance sheet of the Purchaser as of June 30, , and the statement of revenues, expenditures, and changes in fund balance and the statement of cash flow for the year ended June 30, (copies of which, audited by , independent certified public accountants, have been furnished to the Bond Buyer) present fairly the financial position of the Purchaser as of June 30, , and the results of its operations and its cash flows for the year ended June 30, , with such exceptions as may be disclosed in the audit report. Since June 30, , there has been no material adverse change in the financial position or results of operations or cash flows of the Purchaser. -11- Section 2.03. Reliance by Bondholder. The Issuer and the Purchaser acknowledge and agree that these representations and warranties are made to induce the Bond Buyer to purchase the Bond, and that such representations and warranties and any other representations and warranties made by the Issuer and the Purchaser in the Bond Documents are made for the benefit of the Bondholder and may be relied upon by the Bondholder. [End of Article II] -12- ARTICLE III SALE OF THE PROJECT; SECURITY; TITLE Section 3.01. Sale of the Project. The Issuer hereby sells to the Purchaser, and the Purchaser hereby purchases from the Issuer, the Project at the purchase price set forth in Section 5.03 hereof and in accordance with the provisions of this Agreement. Promptly after acquiring the components of the Project, the Issuer shall deliver to the Purchaser documents conveying to the Purchaser good and marketable title (of the same quality as received by the Issuer) to such components of the Project. Section 3.02. Security for Payments under this Agreement. (a) As security for the payments required to be made and the obligations required to be performed by the Purchaser under this Agreement, the Purchaser hereby pledges to the Issuer its full faith and credit and taxing power for such payment and performance. The Purchaser covenants that, in order to make any payments of Purchase Price when due from its general funds to the extent required hereunder, it will exercise its power of taxation to the extent necessary to pay the amounts required to be paid hereunder and will make available and use for such payments all taxes levied and collected for that purpose together with funds received from any other sources. The Purchaser further covenants and agrees that in order to make funds available for such purpose in each Fiscal Year, it will, in its general revenue, appropriation, and budgetary measures through which its tax funds or revenues and the allocation thereof are controlled or provided for, include sums sufficient to satisfy any such payments of Purchase Price that may be required to be made hereunder, whether or not any other sums are included in such measure, until all payments so required to be made hereunder shall have been made in full. The obligation of the Purchaser to make any payments that may be required to be made from its general funds shall constitute a general obligation of the Purchaser and a pledge of the full faith and credit of the Purchaser to provide the funds required to fulfill any such obligation. In the event for any reason any such provision or appropriation is'not made as provided in this Section 3.02, then the fiscal officers of the Purchaser 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 that- may be due from the general funds of the Purchaser. 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 Purchaser had included the amount of the appropriation in its general revenue, appropriation, and budgetary measures, and the fiscal officers of the Purchaser shall make such payments of Purchase Price to the Issuer if for any reason the payment of such obligations shall not otherwise have been made. (b) The Purchaser covenants and agrees that it shall, to the extent necessary, levy an annual ad valorem tax on all taxable property located within the corporate limits of the Purchaser, as now existent and as the same may hereafter be extended, at such rate or rates, within the 15.00 mill limit prescribed by the Purchaser's Charter or within such greater millage as may hereafter be prescribed by applicable law, as may be necessary to produce in each year revenues that will be sufficient to fulfill the Purchaser's obligations under this Agreement, from which revenues the Purchaser agrees to appropriate sums sufficient to pay in full when due all of the Purchaser's obligations under this Agreement. The Purchaser hereby creates and grants a -13- lien in favor of the Issuer on any and all revenues realized by the Purchaser from such tax, to make the payments that are required under this Agreement, which lien is superior to any that can hereafter be created, except that this lien may be extended to cover any Additional Contracts, as permitte& by Section 3.02(e) hereof. Nothing herein contained, however, shall be construed as limiting the right of the Purchaser to make the payments called for by this Agreement out of any funds lawfully available to it for such purpose, from whatever source derived (including general funds). (c) The Purchaser's obligation to levy an annual ad valorem tax within the 15 mill limit prescribed by the Purchaser's Charter, or such greater millage hereafter authorized by law, for the purpose of providing funds to meet the Purchaser's payment obligations under this Agreement shall not be junior and subordinate, but shall be superior or equal to the Purchaser's obligation to levy an annual ad valorem tax at such rate or rates within such 15. mill limit or such greater millage as hereinafter prescribed by law pursuant to the provisions of any Additional Contract. It is expressly provided, however, that the Purchaser shall not be required to levy a tax in any year at a rate or rates exceeding in the aggregate the maximum 15 mills now prescribed by the Purchaser's Charter, or any greater millage hereafter prescribed by law, in order to meet its obligations under the Contracts. (d) So long as the Bond is unpaid, the Purchaser shall not: (1) enter into an Additional Contract that creates a lien on the revenues to be derived from the tax to be levied hereunder by the Purchaser to fulfill its obligations hereunder, which is superior to the lien created hereunder, (2) enter into any other contract or agreement creating a lien on such tax revenues for any purpose other than debt service payments (including creation and maintenance of reasonable reserves therefor) superior to or on a parity with the lien created thereon to fulfill the obligations of the Purchaser hereunder, and (3) enter into any Additional Contract that provides for payment to be made by the Purchaser from moneys derived from the levy of a tax within the maximum millage now or hereafter authorized by law if each annual payment of all amounts payable with respect to debt service or which are otherwise fixed in amount or currently budgeted in amount under all Contracts then in existence, together with each annual payment to be made under the proposed Additional Contract, in each future Fiscal Year, would exceed the amount then capable of being produced by a levy of a tax within the maximum millage now or hereafter authorized by law on the taxable value of property located within the corporate limits of the Purchaser subject to taxation for such purposes, as shown by the latest tax digest available immediately preceding the execution of any such Additional Contract. (e) It is further expressly provided that so long as the Bond is unpaid, the Purchaser shall not hereafter enter into any Additional Contract for the purpose of debt service payments (including creation and maintenance of reserves therefor), unless the amount then capable of being produced by the levy of an ad valorem tax within the maximum millage then prescribed by the Purchaser's Charter or any successor provision on all taxable property within the corporate -14- limits of the Purchaser, as shown by the latest tax digest available immediately preceding the execution of such Additional Contract, is equal to at least one and twenty-five hundredths (1.25) times the maximum combined amount payable in any future Fiscal Year with respect to debt service under all existing Contracts and any such Additional Contract. Debt service for purposes of this paragraph (e) shall mean required payments of principal, including principal to be paid through mandatory redemption, interest, and amounts required to be paid for creation and maintenance of reasonable debt service reserves and to establish and maintain mandatory investment programs, less principal and interest received or to be received from investment of any of the foregoing amounts (except funds on hand or to be on hand in any debt service reserve) required to be applied to debt service in each Fiscal Year. The Purchaser shall furnish the Issuer, not less than five (5) nor more than sixty (60) days prior to the date of execution and delivery of any such Additional Contract, a report of an independent certified public accountant to the effect that, based upon an affidavit of the Tax Commissioner of Cobb County as to the taxable value of property located within the -corporate limits of the Purchaser, the requirements of this paragraph (e) have been met. Section 3.03. Security for the Bond; Perfection. Contemporaneously with the issuance of the Bond, as security for the payment of the Bond, the Issuer shall execute and deliver the Assignment. The Purchaser hereby assents to the assignment and grant of a first priority security interest made in the Assignment and hereby agrees that its obligations to make all payments under this Agreement shall be absolute and shall not be subject to any defense, except payment, or to any right of setoff, counterclaim, or recoupment arising out of any breach by the Issuer of any obligation to the Purchaser, whether hereunder or otherwise, or arising out of any indebtedness or liability at any time owing to the Purchaser by the Issuer. The Purchaser further agrees that all payments required to be made under this Agreement, except for those arising out of Unassigned Rights, shall be paid directly to the Bondholder for the account of the Issuer. The Bondholder shall have all rights and remedies herein accorded to the Issuer (except for Unassigned Rights), and any reference herein to the Issuer shall be deemed, with the necessary changes in detail, to include the Bondholder, and the Bondholder is deemed to be and is a third party beneficiary of the representations, covenants, and agreements of the Purchaser herein contained. Upon reasonable and timely written notice from the Bondholder as to the required form, substance, timing, and place for filing, refiling, recording, or re-recording, or for taking possession of any collateral, the Purchaser shall file, refile, record, or re-record all financing statements, continuation statements, documents, and notices or deliver possession of any instrument or cash necessary to perfect and maintain any lien or security interest created by the Assignment for the benefit of the Bondholder as a first and preferred pledge, lien, encumbrance, and security interest in and to the property encumbered thereby. The Issuer agrees that it will cooperate fully and will take any action required to assist the Purchaser in meeting the provisions of this Section 3.03. -15- Section 3.04. Warranty of Title. The Issuer warrants that (a) the Purchaser will acquire good and marketable fee simple title to the Premises, (b) the Purchaser will be the legal and equitable owner of all Equipment and the Building and will have good and merchantable title to the Equipment, and (c) the Project is and will be free from all Liens, adverse claims, security interests, and encumbrances. [End of Article III] -16- ARTICLE IV THE PROJECT; ISSUANCE OF THE BOND; PROJECT FUND Section 4.01. Agreement to Acquire, Construct, and Install the Proiect. Promptly following the issuance and sale of the Bond, the Issuer will acquire the Premises and convey the Premises to the Purchaser as required by Section 3.01 hereof. Promptly following the acquisition of the Premises, the Issuer will acquire and construct the Building and acquire and install therein the Equipment and convey the same to the Purchaser as required by Section 3.01 hereof. The Issuer hereby authorizes the Purchaser to, on its behalf, acquire, construct, and install the Project. The Purchaser agrees (i) that it will exercise the foregoing authorizations given to it by the Issuer, (ii) that it will cause the Equipment to be acquired in the name of the Issuer, and (iii) that the Project has been and will be acquired and constructed without material deviation from the Plans and Specifications. The Issuer will enter into, or accept the assignment of, such contracts as the Purchaser may request in order to effectuate the purposes of this Section 4.01, but it will not execute any other contract or give any order for such construction or such purchase of material, supplies, furnishings, or equipment unless and until the Purchaser shall have approved the same in writing. The Purchaser covenants to cause the Project to be constructed without material deviation from the Plans and Specifications and the Construction Contracts and warrants that the construction of the Building without material deviation from the Plans and Specifications will, when supplemented by the Equipment, result in facilities suitable for use by the Purchaser and that all real and personal property provided for therein is necessary or appropriate in connection with the Project. The Purchaser may make changes in or additions to the Plans and Specifications; provided, however, changes in or additions to the Plans and Specifications that are material shall be subject to the prior written approval of the Consulting Architect and the Authorized Issuer Representative. The Purchaser agrees, on behalf of the Issuer, to complete the acquisition, construction, and installation of the Project as promptly as practicable and with all reasonable dispatch after the date of issuance and sale of the Bond. Section 4.02. Agreement to Issue the Bond; Application of Proceeds. In order to provide funds for payment of the Costs of the Project, the Issuer agrees that it shall execute and deliver the Bond Purchase Agreement and sell and cause to be delivered to the Bond Buyer the Bond in the principal amount of $2,875,000 and shall thereupon deposit in the Project Fund all advances of purchase price of the Bond made from time to time under the terms of the Bond Purchase Agreement. Section 4.03. Application of Moneys in the Proiect Fund. The Issuer shall in the Bond Purchase Agreement authorize and direct the Depository to use the moneys in the Project Fund for the following purposes (but for no other purposes): (a) payment of any costs and expenses relating to the Project that would constitute a "cost of the project" permitted to be paid by the Issuer under the Act; and -17- (b) all proceeds of the Bond remaining in the Project Fund on the Completion Date, less amounts retained or set aside to meet costs not then due and payable or that are being contested, shall be used to redeem the Bond. Section 4.04. Disbursements from the Proiect Fund. All disbursements from the Project Fund shall be made upon draft, signed by the Authorized Issuer Representative and the Authorized Purchaser Representative, but before they shall sign any such draft, there shall be filed with the Depository: (a) A requisition for such payment (the above -mentioned draft may be deemed a requisition for the purpose of this Section 4.04), stating each amount to be paid and the name of the person to whom payment is due. (b) A certificate executed by the Authorized Issuer Representative and the Authorized Purchaser Representative attached to the requisition and certifying: (1) that an obligation in the stated amount has been incurred by the Issuer and that the same is a proper charge against the Project Fund and has not been paid and stating that the bill or statement of account for such obligation, or a copy thereof, is on file in the office of the Purchaser; (2) that the signers have no notice of any vendor's, mechanic's, or other liens or rights to liens, chattel mortgages, or conditional sales contracts that should be satisfied or discharged before such payment is made; and (3) that such requisition contains no item representing payment on account of any retained percentages that the Issuer is, at the date of any such certificate, entitled to retain. (c) If the requisition for payment is for amounts due under the Construction Contracts, an application for payment in the form of American Institute of Architects Document G702, Application and Certificate for Payment, and American Institute of Architects Form G702A, Continuation Sheets, showing by trade the cost.of work on the Project and the cost of materials incorporated into the Project or stored on the Premises, all to the date stated in the Application and Certificate for Payment. The Application and Certificate for Payment must be signed by the Authorized Issuer Representative, the Authorized Purchaser Representative, the appropriate contractor under the Construction Contracts, and the Consulting Architect. The cost breakdown included in the Application and Certificate for Payment shall show the percentage of completion of each line item on the Purchaser's detailed estimate of Project costs as submitted to the Depository, and the accuracy of the cost breakdown shall be certified by the Purchaser and the appropriate contractor under the Construction Contracts. The completed construction on the Project shall be reviewed (at the time each Application and Certificate for Payment is submitted) by the Consulting Architect, and the Consulting Architect shall certify to the Depository as to (A) the cost of completed construction, (B) the percentage of completion, and (C) compliance with the Plans and Specifications. -18- Section 4.05. Obligation of the Parties to Cooperate in Furnishing Documents; Reliance of the Depository. Upon payment of any expenses of the Issuer incurred in connection therewith pursuant to Section 5.03(b) hereof, the Issuer agrees to cooperate with the Purchaser in furnishing to the Depository the documents referred to in Section 4.04 hereof that are required to effect payments out of the Project Fund, and the Issuer agrees to cause such orders to be directed to the Depository as may be necessary to effect payments out of the Project Fund, in accordance with Section 4.04 hereof. Such obligation of the Issuer is subject to any provisions of the Bond Purchase Agreement requiring additional documentation with respect to payments and shall not extend beyond the moneys in the Project Fund available for payment under the terms of the Bond Purchase Agreement. In making any such payment from the Project Fund, the Depository may rely on any such orders and certifications delivered to it pursuant to Section 4.04 hereof. Section 4.06. Establishment of Completion Date. The Completion Date shall be evidenced to the Bondholder and the Depository by a certificate of substantial completion listing the items to be completed or corrected, if any, and the amounts to be withheld therefor, signed by the Authorized Issuer Representative and the Authorized Purchaser Representative and approved by the Consulting Architect stating that, except for amounts retained by the Depository for Costs of the Project not then due and payable, (i) the acquisition, construction, and installation of the Project has been substantially completed without material deviation from the Plans and Specifications and all labor, services, materials, and supplies used in such acquisition, construction, and installation have been paid or provided for, (ii) all other facilities necessary in connection with the acquisition, construction, and installation of the Project have been constructed, acquired, and installed without material deviation from the Plans and Specifications and all costs and expenses incurred in connection therewith have been paid or provided for, and (iii) a certificate of occupancy for the Building has been issued by appropriate local governmental authorities. Notwithstanding the foregoing, such certificate may state that it is given without prejudice to any rights against third parties that exist at the date of such certificate or that may subsequently come into being. The Consulting Architect shall certify the matter covered by clauses (i) and (ii) above. It shall be the duty of the Purchaser to cause the certificate contemplated by this Section 4.06 to be furnished as soon as the acquisition, construction, and installation of the Project shall have been substantially completed. Section 4.07. Purchaser Required to Pay Project Costs in Event Proiect Fund Insufficient. In the event the moneys in the Project Fund available for payment of the Costs of the Project shall not be sufficient to pay the costs thereof in full, the Purchaser agrees to complete the acquisition, construction, and installation of the Project and to pay all that portion of the Costs of the Project as may be in excess of the moneys available therefor in the Project Fund. The Issuer does not make any warranty, either express or implied, that the moneys which will be paid into the Project Fund and which, under the provisions of this Agreement, will be available for payment of the Costs of the Project, will be sufficient to pay all the costs that will be incurred in that connection. The Purchaser agrees that if after exhaustion of the moneys in the Project Fund the Purchaser shall pay any portion of the Costs of the Project pursuant to the provisions of this Section 4.07, it shall not be entitled to any reimbursement therefor from the Issuer, the Depository, or the Bondholder, nor shall it be entitled to any diminution of the amounts payable under Section 5.03 hereof. -19- Section 4.08. Authorized Purchaser and Issuer Representatives and Successors. The Purchaser and the Issuer, respectively, shall designate, in the manner prescribed in Section 1.01 hereof, the Authorized Purchaser Representative and the Authorized Issuer Representative. In the event that any person so designated and his alternate or alternates, if any, should become unavailable or unable to take any action or make any certificate provided for or required in this Agreement, a successor shall be appointed in the same manner. Section 4.09. Enforcement of Remedies against Contractors and Subcontractors and their Sureties and Against Manufacturers. The Purchaser covenants that it will take such action and institute such proceedings as shall be necessary to cause and require all contractors and subcontractors and material suppliers to complete their contracts diligently in accordance with the terms of such contracts, including, without limitation, the correction of any defective work, with all expenses incurred by the Purchaser in connection with the performance of its obligations under this Section 4.09 to be considered part of the Costs of the Project referred to in Section 4.03 hereof. The Issuer agrees that the Purchaser may, from time to time, in its own name, or in the name of the Issuer, take such action as may be necessary or advisable, as determined by the Purchaser, to ensure the construction of the Project in accordance with the terms of the Construction Contracts and the Plans and Specifications, to ensure the peaceable and quiet enjoyment of the Project, and to ensure the performance by the Issuer of all covenants and obligations of the Issuer under this Agreement, with all costs and expenses incurred ,by the Purchaser in connection therewith to be considered as partof the Costs of the Project referred to in Section 4.03 hereof. All amounts recovered by way of penalties, damages, whether liquidated or actual, refunds, adjustments, or otherwise in connection with the foregoing prior to the Completion Date, less any unreimbursed legal expenses incurred to collect the same, shall be paid into the Project Fund and, after the Completion Date, shall be disbursed pursuant to the provisions of Section 4.03(b) of this Agreement. The Purchaser covenants that it will take such action and institute such proceedings as shall be necessary to cause and require any manufacturers of the Equipment and any dealer to fulfill their warranties and contractual responsibilities diligently in accordance with the terms of any purchase and installation contracts, including, without limitation, the correction of any defective parts or workmanship, with all expenses incurred by the Purchaser in connection with the performance of its obligations under this Section 4.09 to be considered part of the Costs of the Project referred to in Section 4.03 hereof. The Issuer agrees that the Purchaser may, from time to time, take such action as may be necessary or advisable, as may be determined by the Purchaser, to ensure the conformity of the Equipment to the specifications therefor, with all costs and expenses incurred by the Purchaser in connection therewith to be considered as part of ,the Costs of the Project referred to in Section 4.03 hereof. Section 4.10. Investment of Project Fund. Subject to Section 5.3 of the Bond Purchase Agreement and Section 4.11 hereof, any moneys held as a part of the Project Fund shall be invested or reinvested by the Depository at the written direction of the Authorized Purchaser Representative in such Permitted Investments as may be designated by the Purchaser. The Depository may make any and all such investments through its own bond or investment department or through its broker -dealer affiliate. -20- The investments so purchased shall be held by the Depository and shall be deemed at all times a part of the Project Fund, and the interest accruing thereon and any profit realized therefrom shall be credited to the Project Fund, and any losses resulting from such investments shall be charged to the Project Fund and paid by the Purchaser. Section 4.11. Special Investment Covenants. The Issuer and the Purchaser each covenant that it will not directly or indirectly use or permit the use of any proceeds (as defined in the Regulations) of the Bond or any other funds of the Issuer or the Purchaser, or take or omit to take any action, or direct the Depository to invest any funds held by it, in such manner as will, or allow any "related party" (as defined in Section 1.150-1(b) of the Regulations) to enter into any arrangement, formal or informal, as will, cause the Bond to be "federally guaranteed", as such term is used and defined in Section 149(b) of the Code, or to be an "arbitrage bond" within the meaning of Section 148 of the Code, and any Regulations proposed or promulgated in connection therewith. To that end, the Issuer and the Purchaser shall comply with all requirements of Section 149(b) and Section 148 of the Code to the extent applicable to the Bond. In the event that at any time the Issuer or the Purchaser is of the opinion that for purposes of this Section 4.11 it is necessary to dispose of any investment or to restrict or limit the yield on any investment held under the Bond Documents or otherwise, the Issuer or the Purchaser, as the case may be, shall so instruct the Depository in writing. Section 4.12. Calculation and Payment of Rebate Amount. The Purchaser agrees to appoint and pay a Rebate Calculator to calculate and determine the Rebate Amount, if any, as required by Section 148(f) of the Code and any Regulations proposed or promulgated in connection therewith. All calculations and determinations made by a Rebate Calculator shall be accompanied by the opinion of a Rebate Calculator that such calculations and determinations have been made in accordance with the requirements of Section 148(f) of the Code. The Purchaser agrees to pay to the United States Treasury for and on behalf of the Issuer the amount determined by the Rebate Calculator to be due to the United States Treasury before the due date specified by the Rebate Calculator. The obligations created by this Section 4.12 shall survive the termination of this Agreement. The Issuer hereby delegates to the Purchaser the authority and responsibility for compliance with. Section 148(o of the Code. [End of Article IV] -21- ARTICLE V INSTALLMENT PURCHASE PROVISIONS; NATURE OF OBLIGATIONS OF PURCHASER Section 5.01. Term of Agreement. This Agreement shall become effective upon its delivery and shall be in full force and effect until midnight, August 1, 2021, subject to the provisions of this Agreement permitting earlier termination (including particularly Article VII hereof), or if all the Purchase Price and other amounts payable pursuant to Section 5.03 hereof have not been paid or retired, until such date as such payment shall have been made; provided, however, that the covenants and obligations expressed herein to so survive shall survive the termination of this Agreement, but in no event shall the term of this Agreement exceed fifty (50) years. Section 5.02. Delivery and Acceptance of Possession. The Issuer agrees to deliver to the Purchaser sole and exclusive possession and use of the Premises promptly following execution and delivery of this Agreement, and the Purchaser will accept possession and use of the Premises and will accept possession of the Project upon the Completion Date; provided that prior to such date for delivery of sole and exclusive possession, the Purchaser may take such possession of all or any part of the Project as shall not interfere with the construction or installation of the Project. The Issuer shall be permitted such continued possession of the Project as shall be necessary and convenient for it to construct or install or cause to be constructed or installed the Project. The Issuer covenants and agrees that it shall not take any action to prevent the Purchaser from having quiet and peaceable possession and enjoyment of the Project during the term of this Agreement and shall, at the request of the Purchaser and at the cost of the Purchaser, cooperate with the Purchaser in order that the Purchaser may have quiet and peaceable possession and enjoyment of the Project. Section 5.03. Purchase Price and Other Amounts Payable. (a) Until the principal of, premium, if any, and interest on the Bond shall have been fully paid, the Purchaser shall pay the Purchase Price in installments and shall pay to the Bondholder for the account of the Issuer as installments of Purchase Price, on or before February 1, 2002, and on or before each August 1 and February 1 thereafter, to and including August 1, 2021, a sum equal to the amount payable on such date as principal of, premium, if any, and interest on the Bond, as provided in the Bond Purchase Agreement. Each installment of Purchase Price under this Section due on an interest or principal payment date or redemption date until the Bond is fully paid shall in all events be sufficient to pay the total amount of interest, principal, redemption requirement, and premium, if any, payable on the Bond on the principal or interest payment date or on the redemption date. Any installment of Purchase Price not received by the Bondholder when due shall continue as an obligation of the Purchaser until paid and shall bear interest at the rate of interest on the Bond. -22- (b) The Purchaser agrees to pay all reasonable out-of-pocket costs and expenses of the Issuer and the Bond Buyer incurred in connection with their negotiation, structuring, documenting, and closing the Bond, including, without limitation, the reasonable fees and disbursements of counsel for the Issuer, counsel for the Bond Buyer, and Bond Counsel. The Purchaser agrees to pay all reasonable out-of-pocket. costs and expenses of the Issuer, the Bondholder, and the Depository incurred in connection with their administration or modification of, or in connection with the preservation of their rights under, enforcement of, or any refinancing, renegotiation, restructuring, or termination of, any Bond Document or any instruments referred to therein or any amendment, waiver, or consent relating thereto, including, without limitation, the reasonable fees and disbursements of counsel for the Issuer, counsel for the Bondholder, and counsel for the Depository. Such additional installments of Purchase Price shall be billed to the Purchaser by the Issuer, the Bond Buyer, the Bondholder, or the Depository from time to time, together with a statement certifying that the amount billed has been incurred or paid by such party for one or more of the above items. Amounts so billed shall be paid by the Purchaser within thirty (30) days after receipt of the bill by the Purchaser. (c) In the event the Purchaser shall fail to make any of the payments required in this Section 5.03, the item or installment so in default shall continue as an obligation of the Purchaser until the amount in default shall have been fully paid. Section 5.04. Place of Purchase Price Payments. The payments of Purchase Price provided for in Section 5.03(a) hereof shall be paid in lawful money of the United States of America directly to the Bondholder for the account of the Issuer. The payments of additional purchase price to be made to the Issuer, the Bond Buyer, the Bondholder, or the Depository pursuant to Section 5.03(b) hereof shall be paid directly to the Issuer, the Bond Buyer, the Bondholder, or the Depository for its own use. Section 5.05. Nature of Obligations of Purchaser Hereunder. (a) The obligations of the Purchaser to make the payments required in Section 5.03 hereof and other sections hereof and to perform and observe any and all of the other covenants and agreements on its part contained herein shall be a general obligation of the Purchaser and shall be absolute and unconditional irrespective of any defense or any rights of setoff, recoupment, or counterclaim, except payment, it may otherwise have against the Issuer. The Purchaser agrees that it shall not (i) suspend, abate, reduce, abrogate, diminish, postpone, modify, or discontinue any payments provided for in Section 5.03 hereof, (ii) fail to observe any of its other agreements contained in this Agreement, or (iii) except as provided in Article VII hereof, terminate its obligations under this Agreement for any contingency, act of God, event, or cause whatsoever, including, without limiting the generality of the foregoing, failure of the Purchaser to complete the construction of the Project on behalf of the Issuer, failure of the Purchaser to occupy or to use the Project as contemplated in this Agreement or otherwise, any change or delay in the time of availability of the Project, any acts or circumstances that may impair or preclude the use or possession of the Project, any defect in the title, design, operation, merchantability, fitness, or condition of the Project or in the suitability of the Project for the Purchaser's purposes or needs, failure of consideration, any declaration or finding that the Bond is unenforceable or invalid, the invalidity of any provision of this Agreement, any acts or circumstances that may constitute an eviction or -23- constructive eviction, destruction of or damage to the Project, the taking by eminent domain of title to or the use of all or any part of the Project, failure of the Issuer's title to the Project or any part thereof, commercial frustration of purpose, any change in the tax or other laws of the United States of America or of the State or any political subdivision of either thereof or in the rules or regulations of any governmental authority, or any failure of the Issuer to perform and observe any agreement, whether express or implied, or any duty, liability, or obligation arising out of or connected with this Agreement. (b) Nothing contained in this Section 5.05 shall be construed to release the Issuer from the performance of any of the agreements on its part herein contained. In the event the Issuer should fail to perform any such agreement on its part, the Purchaser may institute such action against the Issuer as the Purchaser may deem necessary to compel performance so long as such action does not abrogate the Purchaser's obligations hereunder. The Issuer hereby agrees that it shall not take or omit to take any action that would cause this Agreement to be terminated. The Purchaser may, however, at its own cost and expense and in its own name or in the name of the Issuer, prosecute or defend any action or proceeding or take any other action involving third persons that the Purchaser deems reasonably necessary in order to secure or protect its right of possession, occupancy, and use hereunder, and in such event the Issuer hereby agrees to cooperate fully with the Purchaser and to take all action necessary to effect the substitution of the Purchaser for the Issuer in any such action or proceeding if the Purchaser shall so request. [End of Article V] -24- ARTICLE VI ADDITIONAL COVENANTS Section 6.01. No Warranty of Condition or Suitability by the Issuer. THE ISSUER MAKES NO WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE HABITABILITY, MERCHANTABILITY, CONDITION, OR WORKMANSHIP OF ANY PART OF THE PROJECT OR THAT IT WILL BE SUITABLE FOR THE PURCHASER'S PURPOSES OR NEEDS. Section 6.02. Indemnity. To the extent permitted by the laws and Constitution of the State, the Purchaser shall protect, hold harmless, and indemnify the Issuer, the Bondholder, and the Depository from and against any and all liability, obligations, losses, claims, and damages whatsoever, regardless of cause thereof, and expenses in connection therewith, including, without limitation, counsel fees and expenses, penalties, and interest arising out of or as the result of the entering into of the Bond Documents, the ownership of any item of the Project, the ordering, acquisition, construction, use, operation, condition, purchase, delivery, rejection, storage, or return of any item of the Project or any accident in connection with the construction, operation, use, condition, possession, storage, or return of any item of the Project resulting in damage to property or injury to or death of any person. The indemnification arising under this Section shall continue in full force and effect notwithstanding the full payment of all obligations under this Agreement and shall survive the termination of this Agreement for any reason. Section 6.03. Annual Budgets and Financial Statements. (a) Commencing with the Purchaser's first Fiscal Year commencing after the date of execution and delivery of this Agreement, the Purchaser shall furnish to the Issuer and the Bondholder copies of each annual budget of the Purchaser within ten (10) days after the filing of the adopted budget with its Governing Body. The covenants on the part of the Purchaser herein contained shall be deemed to be and shall be construed to be duties imposed by law, and it shall be the duty of each and every public official of the Purchaser to take such action and do such things as are required by law in the performance of the official duty of such officials to enable the Purchaser to carry out and perform the agreements and covenants in this Agreement agreed to be carried out and performed by the Purchaser. (b) During the term of this Agreement, the Purchaser shall provide the Issuer and the Bondholder annually, within one hundred eighty (180) days after the end of each Fiscal Year, its general purpose financial statements for each Fiscal Year, with comparative totals for the preceding Fiscal Year, which general purpose financial statements shall be accompanied by an audit report resulting from an audit conducted by an independent certified public accountant or firm of independent certified public accountants. Section 6.04. Tax Covenants. The Purchaser covenants that it will not take or omit to take any action nor permit any action to be taken or omitted that would cause the interest on the Bond to become includable in the gross income of any owner thereof. -25- The Purchaser further covenants and agrees that it shall comply with the representations and certifications it made in its Purchaser's Tax Certificate dated the date of issuance and delivery of the Bond and that it shall take no action nor omit to take any action that would cause such representations and certifications to be untrue. [End of Article VI] -26- ARTICLE VII ASSIGNMENT; PURCHASE PRICE PREPAYMENTS Section 7:01. No Assignment by Purchaser. This Agreement may not be sold, assigned, or encumbered by the Purchaser without the prior written consent of the Issuer. Section 7.02. Redemption of Bond. The Issuer, at the written request of the Purchaser at any time and if the Bond is then callable or available for purchase, and if there are funds available therefor, shall forthwith take all steps that may be necessary under the applicable redemption or purchase provisions of the Bond Purchase Agreement to effect redemption or purchase of all or part of the then outstanding Bond, as may be specified by the Purchaser, on the earliest date on which such redemption or purchase may be made under such applicable provisions. Section 7.03. Prepayment of Purchase Price. There is expressly reserved to the Purchaser the right, and the Purchaser is authorized and permitted, at any time it may choose, to prepay all or any part of the Purchase Price and other amounts payable under Section 5.03 hereof, and the Issuer agrees that the Bondholder may accept such prepayments of Purchase Price and other amounts when the same are tendered by the Purchaser. All Purchase Price and other amounts so prepaid shall at the written direction of the Purchaser be credited toward the Purchase Price and other amounts specified in Section 5.03 hereof, in the order of their due dates, or applied to the retirement of the Bond prior to maturity (either by redemption or purchase) in accordance with the Bond Purchase Agreement. Section 7.04. Option to Prepay the Purchase Price and Redeem the Bond at Prior Optional Redemption Dates. The Purchaser shall also have the option to prepay Purchase Price and other amounts payable under this Agreement in such manner and amounts as will enable the Issuer to redeem the Bond prior to maturity, in whole on any date or in part on any scheduled interest payment date, as provided in Section 7.2 of the Bond Purchase Agreement. The Purchase Price and other amounts payable by the Purchaser in the event of its exercise of the option granted under this Section shall be (i), in the case of partial redemption, the amount necessary to pay principal, all interest to accrue to the redemption date, the applicable redemption premium, as provided in Section 7.2 of the Bond Purchase Agreement, and any redemption expense, and (ii) in the case of a total redemption, the amount necessary to pay and satisfy all amounts due under the Bond Documents. [End of Article VII] -27- ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES Section 8.01. Events of Default Defined. The following shall be "Events of Default" under this Agreement, and the terms "Event of Default" or "Default" shall mean, whenever they are used in this Agreement, any one or more of the following events: (a) The Purchaser's failure to pay the amounts required to be paid under Section 5.03 of this Agreement at the times specified therein. (b) The Purchaser's breach in any material respect of any representation or warranty contained in this Agreement or the Purchaser's failure to observe, perform, or comply with any covenant, condition, or agreement in this Agreement on the part of the Purchaser to be observed or performed, other than as referred to in subsection (a) of this Section 8.01, for a period of thirty (30) days after written notice specifying such breach or failure and requesting that it be remedied, given to the Purchaser by the Issuer or the Bondholder, unless the Bondholder shall agree in writing to an extension of such time prior to its expiration. In the case of any such breach or default that cannot with due diligence be cured within such thirty (30) day period but can be wholly cured within a period of time not materially detrimental to the rights of the Issuer and the Bondholder, to be determined conclusively by the Bondholder, it shall not constitute an Event of Default j if corrective -action is instituted' by the Purchaser within the applicable period and L diligently pursued until the breach or default is corrected in accordance with and subject to any directions or limitations of time established in writing by the Bondholder. (c) The Purchaser shall (i) apply for or consent to the appointment of or the taking of possession by a receiver, custodian, trustee, or liquidator of it or of all or a substantial part of its property, (ii) enter into an agreement of composition with its creditors, (iii) admit in writing its inability to pay its debts as such debts become due, (iv) make a general assignment for the benefit of its creditors, (v) commence a voluntary case under the federal bankruptcy law (as now or hereafter in effect), (vi) file a petition or answer seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding -up, or composition or adjustment of debts, (vii) fail to controvert in a timely or appropriate manner or acquiesce in writing to any petition filed against it in an involuntary case under such federal bankruptcy law, or (viii) take any action for the purpose of effecting any of the foregoing. (d) A proceeding or case shall be commenced, without the application of the Purchaser, in any court of competent jurisdiction, seeking (i) the liquidation, reorganization, dissolution, winding -up, or composition or adjustment of debts of the Purchaser, (ii) the appointment of a trustee, receiver, custodian, liquidator, or the like of the Purchaser or of all or any substantial part of the assets of it, or (iii) similar relief in respect of the Purchaser under any law relating to bankruptcy, insolvency, reorganization, winding -up, or composition and adjustment of debts, and such proceeding or case shall continue undismissed or an order, judgment, or decree approving or ordering any of the -28- foregoing shall be entered and shall continue unvacated and unstayed and in effect for a period of sixty (60) days, whether consecutive or not. Section 8.02. Remedies on Default. Whenever any Event of Default referred to in Section 8.01 hereof shall have happened and be continuing, the Issuer, in its discretion, may exercise any one or more of the following remedies: (a) The Issuer may have access to and inspect, examine, and make copies of the books and records and any and all accounts and similar data of the Purchaser. (b) The Issuer may from time to time take whatever action at law or in equity or under the terms of this Agreement may appear necessary or desirable to collect the Purchase Price and other amounts payable by the Purchaser hereunder then due or thereafter to become due, or to enforce performance and observance of any obligation, agreement, or covenant of the Purchaser under this Agreement. No action taken pursuant to this Section 8.02 shall relieve the Purchaser from its obligations pursuant to Section 5.03 hereof, all of which shall survive any such action, and the Issuer may take whatever action at law or in equity as may appear necessary and desirable to collect the Purchase Price and other amounts then due and thereafter to become due or to enforce the performance and observance of any obligation, agreement, or covenant of the Purchaser hereunder. Section 8.03. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Issuer 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 Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time -and as often as may be deemed expedient. In order to entitle the Issuer to exercise any remedy reserved to it in this Article VIII, it shall not be necessary to give any notice, other than such notice as may be herein expressly required. Such rights and remedies as are given the Issuer hereunder shall also extend to the Bondholder, and the Bondholder shall be deemed a third party beneficiary of all covenants and agreements herein contained. Section 8.04. Agreement to Pay Fees and Expenses. In the event the Purchaser should default under any of the provisions of this Agreement and the Issuer or the Bondholder should employ attorneys, accountants, or other experts or incur other expenses for the collection of Purchase Price and other amounts due hereunder or the enforcement of performance or observance of any obligation or agreement on the part of the Purchaser herein contained, the Purchaser agrees that it shall on demand therefor pay to the Issuer or to the Bondholder for the account of the Issuer the reasonable fees of such attorneys, accountants,. or other experts and such other expenses so incurred by the Issuer or the Bondholder. Any attorneys' fees required to be paid by the Purchaser under this Agreement shall include attorneys' and paralegals' fees through all proceedings, including, but not limited to, negotiations, administrative hearings, trials, and appeals. -29- Section 8.05. Waiver of Events of Default. The Issuer may waive any Event of Default hereunder and its consequences. In case of any such waiver, or in case any proceeding taken by the Issuer or the Bondholder on account of any such Event of Default shall be discontinued or abandoned or determined adversely to the Issuer or the Bondholder, then and in every such case the Issuer and the Purchaser shall be restored to their former position and rights hereunder, but no such waiver or rescission shall extend to or affect any subsequent or other Event of Default or impair or exhaust any right, power, or remedy consequent thereon. [End of Article VIII] -30- ARTICLE IX MISCELLANEOUS Section 9.01. Notices. All notices, certificates, and other communications provided for hereunder shall be in writing and sent (a) by telecopy if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid), or (b) by registered or certified mail with return receipt requested (postage prepaid), or (c) by a recognized overnight delivery service (with charges prepaid). Any such notice must be sent to any party hereto at the following addresses or to such other address as any party hereto shall have specified in writing to the other party: If to the Issuer: Downtown Smyrna Development Authority 2800 King Street, S.E. Smyrna, Georgia 30080-3506 Attention: Chairman If to the Purchaser: City of Smyrna 2800 King Street, S.E. Smyrna, Georgia 30080-3506 Attention: City Administrator If to the Bondholder: First Union National Bank 999 Peachtree Street Atlanta, Georgia 30309 Attention: Government and Institutional Banking Portfolio Management Notices under this Section 9.01 will be deemed given only when actually received. A duplicate copy of each notice, certificate, or other communication. given hereunder shall also be given to the Bondholder. Section 9.02. Construction and Binding Effect. This Agreement constitutes the entire agreement of the parties and supersedes any prior agreements. This Agreement shall inure to the benefit of and shall be binding upon the Issuer, the Purchaser, and their respective successors and assigns subject, however, to the limitations contained in Section 7.01 hereof. Section 9.03. Severability. In the event any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. -31- Section 9.04. Amounts Remaining in Funds. It is agreed by the parties hereto that any amounts remaining in the Project Fund or other funds provided for herein upon expiration or sooner termination of this Agreement, as provided in this Agreement, after payment in full of the Purchase Price and the Bond, the fees, charges, and expenses of the Issuer, the Bondholder, and the Depository, in accordance with the terms hereof, and all sums due and owing to the Issuer, shall belong to and be paid to the Purchaser by the Issuer as overpayment of Purchase Price. Section 9.05. Amendments, Changes, and Modifications. This Agreement may not be amended, changed, modified, altered, or terminated, and the observance of any term hereof may not be waived, without the prior written consent of the Bondholder. Section 9.06. Execution of Counterparts. This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Section 9.07. Law Governing Construction of this Agreement. This Agreement is prepared and entered into with the intention that the law of the State of Georgia, exclusive of such state's rules governing choice of law, shall govern its construction. Section 9.08. Immunity of Officials, Officers, and Employees of Issuer and Purchaser. No recourse shall be had for the enforcement of any obligation, covenant, promise, or agreement of the Issuer or the Purchaser contained in this Agreement or for any claim based hereon or otherwise in respect hereof against any member of a Governing Body, officer, or employee, as such, in his individual capacity, past, present, or future, of the Issuer, the Purchaser, or any successor body, whether by virtue of any constitutional provision, statute, or rule of law, or by the enforcement of any assessment or penalty or otherwise, it being expressly agreed and understood that this Agreement is solely a corporate obligation of the Purchaser and the Issuer payable only from the funds and assets of the Purchaser and the Issuer herein specifically provided to be subject to such obligation and that no personal liability whatsoever shall attach to, or be incurred by, any member of a Governing Body, officer, or employee, as such, past, present, or future, of the Purchaser or the Issuer, or of any successor corporation, either directly or through the Purchaser; the Issuer, or any successor corporation, under or by reason of any of the obligations, covenants, promises, or agreements entered into between the Issuer and the Purchaser whether contained in this Agreement or in the other Bond Documents or to be implied herefrom or therefrom as being supplemental hereto or thereto, and that all personal liability of that character against every such member of a Governing Body, officer, and employee is, by the execution of this Agreement and as a condition of and as part of the consideration for the execution of this Agreement, expressly waived and released. The immunity of members of a Governing Body, officers, and employees of the Issuer and the Purchaser under the provisions contained in this Section 9.08 shall survive the completion of the Project and the termination of this Agreement. [End of Article IX] -32- SIGNATURES AND SEALS IN WITNESS WHEREOF; the Issuer has executed this Agreement by causing its name to be hereunto subscribed by its Chairman and by causing the official seal of the Issuer to be impressed hereon and attested by its Secretary; and the Purchaser has executed this Agreement by causing its name to be hereunto subscribed by its Mayor and by causing the official seal of the Purchaser to be impressed hereon and attested by its City Clerk; all being done as of the day and year first above written. (SEAL) Attest: Secretary (SEAL) Attest: City Clerk DOWNTOWN SMYRNA un DEVELOPMENT AUTHORITY Chairman CITY OF SMYRNA Mayor -33- EXHIBIT A DESCRIPTION OF PREMISES A-1 EXHIBIT B DESCRIPTION OF EQUIPMENT All fixtures, equipment, furnishings, and other personal property that are to be acquired with the proceeds of the Bond. In EXHIBIT C ASSIGNMENT AND SECURITY AGREEMENT THIS ASSIGNMENT AND SECURITY AGREEMENT, made and entered into as of July 1, 2001, between the Downtown Smyrna Development Authority (the "Issuer"), a public corporation created and existing under the laws of the State of Georgia, and First Union National Bank (the "Bond Buyer"); WITNESSETH: WHEREAS, the Issuer has adopted a resolution (the "Bond Resolution") authorizing the issuance of $2,875,000 in principal amount of its Revenue Bond (Brawner Project), Series 2001 (the "Bond"), the Bond to be dated the date of its delivery, and the Bond to have a final stated maturity of August 1, 2021, and authorizing the execution and delivery of a Bond Purchase Agreement (the "Bond Purchase Agreement") with the Bond Buyer, dated July_, 2001, under the terms of which the Issuer agreed to sell the Bond to the Bond Buyer to finance the costs of acquiring, constructing, and installing the Brawner campus (the "Project"); and WHEREAS, the Issuer will sell the Project to the City of Smyrna (the "Purchaser") pursuant to an Agreement of Sale (the "Contract"), dated the date hereof, under the terms of which the Purchaser (1) will agree to make installment payments of purchase price to the Issuer in amounts sufficient to enable the Issuer to pay the principal of, premium, if any, and interest on the Bond when due, and (2) will agree to levy an annual ad valorem tax on all taxable property located within the corporate limits of the Purchaser, at such rates within the 15.00 mill limit prescribed by the Purchaser's Charter or such greater millage limit hereafter prescribed by applicable law, as may be necessary to produce in each year revenues that are sufficient to fulfill the Purchaser's obligations under the Contract; and WHEREAS, to secure its obligation to pay principal of, premium, if any, and interest on the Bond, the Issuer desires to assign and pledge, and grant a first priority security interest in, its right, title, and interest in the Contract to the Bond Buyer and desires to make and execute this instrument for that purpose; NOW, THEREFORE, for and in consideration of the foregoing premises, the sum of Ten Dollars ($10.00) cash in hand paid, and other good and valuable consideration, all of which the Issuer acknowledges constitutes sufficient consideration and value received by the Issuer at the time of or before the Issuer's execution, sealing, and delivery hereof, the Issuer does hereby covenant and agree as follows: 1. The Issuer does hereby grant, bargain, convey, sell, transfer, assign, pledge, and set over, and grant a security interest in, unto the Bond Buyer and its successors and assigns all of the Issuer's right, title, interest, remedies, powers, options, benefits, and privileges in, to, and under the Contract (reserving, however, to the Issuer the Unassigned Rights, as defined in the Bond Purchase Agreement) and all amounts due and to become due to the Issuer under and pursuant to the Contract. 1190656.v1 2. This Assignment shall not be deemed to impose any obligations or liabilities whatsoever on the Bond Buyer or to transfer or pass or in any way affect or modify any obligations of the Issuer under the Contract, it being understood and agreed that all such obligations of the Issuer shall be and remain enforceable only against the Issuer. 3. The Issuer represents and warrants to the Bond Buyer that it has not previously assigned, transferred, pledged, or encumbered in any manner, or granted a security interest in, any of its right, title, interest, remedies, powers, options, benefits, and privileges in, to, or under the Contract. The Issuer shall defend the title to all of the foregoing against the claims and demands of all persons whomsoever claiming by, through, or under the Issuer. 4. The Bond Buyer may assign, transfer, pledge, or encumber, or grant a security interest in, the Contract and any or all rights of the Bond Buyer under this Assignment, without consent or approval of, or notice to, the Issuer. 5. The Issuer hereby authorizes and empowers the Bond Buyer, and hereby irrevocably and duly constitutes and appoints the Bond Buyer as the Issuer's attorney -in -fact, to receive any and all amounts payable under the Contract (except pursuant to Unassigned Rights), to collect any and all such amounts by such means and taking such action as the Bond Buyer may deem necessary or desirable, to exercise any and all rights or remedies provided for under the Contract, to file such claims and take any other action or to institute any other proceedings that the Bond Buyer may deem necessary or advisable to enforce any such obligations, and to act in all other ways under and with respect to the Contract in the place and stead of the Issuer. The foregoing appointment of the Bond Buyer as the Issuer's attorney -in -fact is coupled with an interest, cannot be revoked by insolvency, reorganization, merger, consolidation, or otherwise, and shall not terminate until the Bond has been paid and satisfied in full. -2- IN WITNESS WHEREOF, the Issuer has executed this Assignment by causing its name to be hereunto subscribed by its Chairman and by causing the official seal of the Issuer to be impressed hereon and attested by its Secretary; and the Bond Buyer has executed this Assignment by causing its name to be hereunto subscribed by its Authorized Officer; all as of July 1, 2001. (SEAL) Attest: Secretary DOWNTOWN SMYRNA IM DEVELOPMENT AUTHORITY Chairman FIRST UNION NATIONAL BANK Authorized Officer -3- SECRETARY'S CERTIFICATE ,_, the duly appointed, qualified, and acting Secretary of the Downtown Smyrna Development Authority (the "Issuer"), DO HEREBY CERTIFY that the foregoing pages of typewritten matter pertaining to the revenue bond designated "Downtown Smyrna Development Authority Revenue Bond (Brawner Project), Series 2001" constitute a true and correct copy of the Bond Resolution adopted on July 18, 2001, by the members of the Issuer in a meeting duly called and assembled, after due and reasonable notice was given in accordance with the procedures of the Issuer and with applicable provisions of law, which was open to the public and at which a quorum was present and acting throughout, and that the original of such Bond Resolution appears of public record in the Minute Book of the Issuer, which is in my custody and control. I further certify that such Bond Resolution has not been rescinded, repealed, or modified. GIVEN under my hand and the seal of the Issuer, this 18th day of July 2001. (SEAL) �11� Q�hat� SECRETARY, DOWNTOWN SMYRNA DEVELOPMENT AUTHORITY 08/13/2001 10:06 7704312808 COMMUNITY DEVELOPMEN PAGE 02 DDA SIGN IN SHEET JULY 19, 2001 NAME 1. Thomas J. Laccetti 2, Karen Kirk 3. Doug zienke 4. Angela Calhoun 5. Peter Stelling 6. Robert Thorn 7. R. Larry Freeman 8. C.J. Fouts 9. William J. De St. Aubin, AIA 10. M. M. Dikko, Assoc. AIA 11. G.K. Johnson, GKJ Development 12. Doug Stoner 13. Carol Wagner 14. Jeannette Ruthledge 15, Jane Allen Shope 16. Jim Pitts 17. Max Bacon 18. Charlie Phillips 19. Melinda Dameron DTF DTF DDA & DTF & UDC DDA & UDC DDA & UDC DDA & UDC DDA & UDC DDA & UDC DDA & UDC NOTE: All members on the DDA are also on the UDC plus Mike Sizemore and Harold Smith.