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09-11-1989 Regular Meetingq. LEASE CONTRACT between DOWNTOWN SMYRNA DEVELOPMENT AUTHORITY and CITY OF SMYRNA I Dated as of September 1, 1989 P P- LEASE CONTRACT THIS LEASE CONTRACT is entered into as of September 1, 1989, by and between the DOWNTOWN SMYRNA DEVELOPMENT AUTHORITY (the AAuthority"), a body corporate and politic and deemed to be a political subdivision and public corporation of the State of Georgia created and existing under the Constitution of the State of Georgia, as Lessor, and CITY OF SMYRNA (the "Lessee" or the Ncity"), a political subdivision of the State of Georgia, as Lessee. W I T N E S S E T H• In consideration of the respective representations ,4 ntracts hereinafter contained, the Authority and the Lessee as follows: ARTICLE I. DEFINITIONS and agree In addition to the words and terms elsewhere defined in this Lease Contract, the following words and terms as used in this Lease contract shall have the following meanings unless the context or use indicates another or different meaning or intent and such definitions shall be equally applicable to both the singular and plural forms of the words and terms herein defined: "Additional Bonds" means any of the ranking on a parity with the Series 1989 be issued pursuant to Article V, Section Authority's revenue bonds Bonds which may hereafter 4 of the Resolution. s�. "Authority" shall mean the Downtown Authority, its successors and assigns. Smyrna Development "Authority Act" shall mean Georgia Laws 1988, p. 4382 et sea. "Basic Lease Payments" means an amount equal to the principal Of and the interest on the Bonds coming due on the next succeeding February 1 and an amount equal to the interest on the Bonds coming due on the next succeeding August 1 in each year; provided, however, the Lessee shall receive a credit against any Basic Lease Payment to the extent moneys are on deposit in the Sinking Fund and not previously credited to a Basic Lease Payment. In addition to the foregoing, each Basic Lease Payment shall include the charges a$ billed specified in subparagraphs (e) , (f) and (g) of Section 3, Article V of the Resolution and any deficit in any preceding Basic Lease Payment. "Bondholder" and "bondholder" means the registered owner of 4nY of the outstanding Bonds. IlBonds" shall mean any revenue bonds authorized by and issued ur5uant to the Resolution, including the Series 1989 Bonds and any tlonal Bonds of the Authority issued pursuant to the iiddi Resolution. soCapital Improvement Program" shall mean roject yrna Master Flan, Phase I: Community Center and Librarythe pSizemore Floyd datedSeptember , 1989, prepared by �rchitects, Atlanta, Georgia for the Lessee and the Authority. voCity" or "Lessee" means the City of Smyrna, its successors and assigns. ispiscal designated by Year'e means the fiscal year for the City as may appropriate proceedings of the City. "Lease'' or "Contract" means this Lease Contract, as from time to time amended. 'Lease Term" shall have the meaning specified in Section 4.1 hereof . IlLeased Facilities" means the facilities and financed with the proceeds of the Series 1989 Bonds ds issued by the Authority. real property and Additional Bon ,,permitted Encumbrances" means liens and encumbrances existing on the date of acquisition by the Authority of any Leased Facilities. oopermitted Investments" shall mean and include any of the following securities, if and oto theextentthe same are at the time legal for investment of Authority funds: (i) any bonds or other obligations of the City of Smyrna, Cobb County or bonds or obligationsof the orations eof ared Y municipal corporations Georgia or of other counties, P political subdivisions of the State of Georgia which are rated "A" or better by Moody's Investors Service, Inc. or Standard & Poor's Corporation; (ii) any bonds or other obligations which as to pro ciare and interest constitute direct obligations of, unconditionally.guaranteed by, the United States of America, including obligations of any of. the Federal agencies set forth in clause (iii) below to the extent unconditionally guaranteed by the United States of America; (iii) obligations of the Federal National Mortgage Association, the Government National Mortgage Association, the Federal Financing for k'the Federal Cooperat cooperatives, IFederallate Home rLoan Banks, Federal Banks -2- �L Banks, Farmers Home Administration and Federal Home Loan Mortgage Association; (iv) negotiable certificates of deposit issued by any bank or trust company organized under the laws of any state of the United States of America or any national banking association, provided that such certificates of deposit must be purchased directly from such bank, trust company or national banking association and must be either (a) continu- ously and fully insured by the Federal Deposit Insurance Corporation, or (b) continuously and fully secured by such securities as are described in clauses (ii) and (iii) above which (1) have a market value (exclusive of accrued interest) at all times at least equal to the principal amount of such certificates of deposit, (2) are lodged with the particular fund custodian or an agent acting solely on behalf of the particular fund custodian, and (3) are subject to a security interest in favor of the particular fund custodian and not subject to any security interest in favor of any other person. Additionally, the bank, trust company or national banking association issuing each such certificate of deposit required to be so secured must furnish the particular fund custodian with an undertaking satisfactory to it that the aggregate market value of all such obligations securing each such certificate of deposit will at all times be an amount equal to the principal amount of each such certificate of deposit; (v) any repurchase agreement with any bank organized under the laws of any state of the United States of America or any national banking association, provided if such bank's or association's principal office is located outside Cobb County, such bank or association either (a) has a long term debt rating by Moody Is Investors Service or Standard & Poor 's Corporation either equivalent to or higher than "A," or (b) has a capital and surplus at least equal to $100,000,000; provided that such repurchase agreement is secured by any one or more of the securities described in clauses (ii) and (iii) above and in the manner described in clause (iv) above; and (vi) pooled investment programs sponsored by the State of Georgia for the investment of local government funds. "Project Fund" shall mean the Downtown Smyrna Development Authority Project Fund created in Article IV, Section 2 of the Resolution. "Project Fund Depository" means initially Smyrna Bank and Trust Co., Smyrna, Georgia, its successors and assigns, or any successor depository for the Project Fund hereafter appointed by the Authority with the approval of the Lessee; provided, however, the Project Fund Depository shall at all times be a. commercial bank. -3- IlResolutionel means that certain bond resolution of the Autho- rity adopted September 5, 1989 authorizing the issuance of the Series 1989 Bonds and as same may be supplemented from time to time. "Revenue Bond Laws, means the Revenue Bond Law, Title 36, Chapter 82, Article 3 of the Official Code of Georgia Annotated, as amended, and as same may hereafter be amended from time to time. I'Series 1989 Bonds" means the Bonds authorized to be issued pursuant to Article II of the Resolution. "Sinking Fundle shall mean the Downtown Smyrna Development Authority Sinking Fund created in Article v, Section 1 of the Resolution. ('Sinking Fund Custodian" means initially Smyrna Bank and Trust Co., Smyrna, Georgia, its successors and assigns, or any successor custodian for the Sinking Fund hereafter appointed by the Authority; provided, however, the Sinking Fund Custodian shall at all times be a commercial bank. "Sinking Fund Year" shall mean the period commencing on the 2nd day of February in each year and extending through the 1st day of February in the next year. ARTICLE II. REPRESENTATIONS Section 2.1. Representations by the Authority. The Author- ity makes the following representations as the basis for the undertakings on its part herein contained: (a) The Authority is authorized to enter into the transactions contemplated by this Lease and to carry out its obligations hereunder, has been duly authorized to execute and deliver -this Lease, and will do or cause to be done all things necessary to preserve and keep in full force and effect its'status and existence; (b) The issuance and sale of the Series 1989 Bonds, the execution and delivery of this Lease, the adoption of the Resolution, and the performance of all covenants and agreements of the Authority contained in this Lease and of all other acts and things required under the Constitution and laws of the State of Georgia to make this Lease a valid and binding obligation of the Authority in accordance with its terms are authorized by law and have been duly authorized by proceedings of the Authority adopted at public meetings thereof duly and lawfully called and held; 1 4- (c) The Authority has not made, done, executed or suffered, and warrants that it will not make, do, execute or suffer any act or thing whereby its title to and interest in the Leased Facilities will or may be, impaired or encumbered in any manner except as permitted herein and the Resolution and except for acts or things done or permitted by the Lessee; and (d) There is no litigation or proceeding pending, or to the knowledge of the Authority threatened, against the Authority or against any person having a material adverse effect on the right of the Authority to execute this Lease or the ability of the Authority to comply with any of its obligations under this Lease. Section 2.2. Representations and Agreements by the Lessee. The Lessee makes the following representations and agreements: (a) The Lessee is a political subdivision under the laws of the State of Georgia having power to enter into and execute and deliver this Lease, and, by proper action of its governing }= body, has authorized the execution and delivery of this Lease and the taking of any and all such actions as may be required on its part to carry out, give effect to, and consummate the `. transactions contemplated by this Lease and the Resolution, and no approval or other action by any governmental authority, agency, or other person is required in connection with the delivery and performance of this Lease by it except as shall have been obtained as of the date hereof; (b) This Lease has been duly executed and delivered by t the Lessee and constitutes its legal, valid, and binding obli- gation enforceable in accordance with its terms, except as enforcement may be limited by the application of equitable ` principles; (c) The Lessee does not rely on any warranty of the Authority, either express or implied, except as provided herein, as to any title to or condition of the Leased Facilities or that the Leased Facilities will be suitable to the Lessee's needs, and the Lessee recognizes that the Authority is not authorized to expend any fundsfor the Leased Facilities other than rental revenue received by it therefrom hereunder or the proceeds of the Bonds; (d) The authorization, execution, delivery, and perfor- mance by -the Lessee of this Lease and compliance by the Lessee with the provisions thereof do not violate the laws of the State of Georgia relating to the Lessee or constitute a breach of or a default under, any other law, court order, administrative regulation or legal decree, or any agreement or other instrument to which it is a party or by which it is bound; -5- proceeding pending, or to (e) There is no litigation or p against the Lessee or the knowledge of the Lessee threatened, any other person having a material adverse affect on the ecoight of the Lessee to execuionslunder sthis Leasee or its . shall With any of its obligations f) During the Lease Term, the Lessee shall restrict he extent and nature the ,tastcra the dle Leased Facilities Section 1-41 t so as to npr1vSte business use as S"y'" as amended, applicable of the Internal Revenue fromde of federal9inc,ome taxation not enter preserve the exemption to the interest paid on the Bonds. The options of the Leased into leases or management contracts for p governmental Facilities with any person or entity other than a g . permit the use of the Leased Facilities unit• The Lessee only for short periods of time on a buch non y non-exempt prests Of rate -scale basis so that to ly those and ot lat transient socc panat exempt persons shall be Y interests. The Lessee may rather than full legal possessory enter into concessionaire contracts provided the following conditions are met: does (i) The contract (including renewal options) not exceed five (5) years; (ii) Compensation to the concessionaire is not based on net profits from the operations, or Authority) has the option to (iii) The Lessee ( penalty at the end of any three cancel the contract p (3) year period, an (iv) At least fifty percentum (50*) of the compen- sation to the concessionaire on the basis of gross revenue)must be on a f ixed fee - the other portion can b ARTICLE III. -- (iv) EED LEASING • _I _ _A ,,EnOFm NDOF THECPROJF -- The Authority hereby leases to the Section 3.1. Leasin the Leased Lessee, and the Lessee hereby leases from the Authority, Lease. The Authority makes Facilities at the rental set forthhin is Section 4.3 hereof and in accordance with the provisions of t no warranties to the Lessee with respect to the Leased Facilities. Section 3.2. A reement to Issue Seriesce S. The rity eesth t i will validate tion ofoto be°issued the Series 1989 Bonds, the proceeds of which and cause shall be applied as provided in Article IV, Section 1 of the Resolution. Section 3.3. Project Fund Moneys. The City and. the Authority agree to cooperate with each other and will take such action to the extent reasonably necessary to apply for and/or receive any grants, gifts, or donations to be applied to the cost of additions, extensions and improvements to the Leased Facilities in accordance with the Capital Improvement Program or any program or report approved and ratified by the Authority and the City with respect to any issue of Additional Bonds. Any costs and expenses incurred in connection with the issuance and delivery of the Series 1989 Bonds not paid by the purchaser of the Series 1989 Bonds shall be borne by the City and shall be paid for the account of the City. Section 3.4. Agreement to Construct the Projects. (a) The Authority hereby appoints the Lessee as its agent to proceed forthwith with the Capital Improvement Program. The Lessee shall obtain or cause to be obtained all necessary approvals from any and all governmental agencies requisite to undertaking the Capital Improvement Program and the Capital Improvement Program shall be acquired, constructed and installed in compliance with all federal, state and local laws, ordinances and regulations applicable thereto. The Lessee will take or cause to be taken such action and institute or cause to be instituted such proceedings as it shall deem appropriate to cause and require all contractors and suppliers of materials to complete their contracts, including the correcting of any defective work, and the Authority agrees that the Lessee may, from time to time, in its own name, or in the name of the Authority, take or cause to be taken such action as may be necessary or advisable, as determined by the Lessee, to assure that the construction and the installation of such projects will proceed in an efficient and workmanlike manner. Any amounts recovered by way of damages, refunds, adjustments or otherwise in connection with the foregoing shall (i) if Lessee has corrected at its own expense the matter which gave rise to such default or breach, be paid to the Lessee or (ii) if Lessee has not corrected at its own expense the matter which gave rise to such default or breach, be paid into the Project Fund. (b) The Lessee, as agent for the Authority, shall acquire, construct, install and equip, or cause to be acquired, constructed, installed and equipped, the Capital Improvement Program with all reasonable dispatch and shall use its best efforts to cause the acquisition, construction, installation and equipping to be completed as soon as may be practical, delays incident to strikes, riots, acts of God or the public enemy beyond the reasonable control of the Lessee excepted; but if for any reason such acquisition, construction and installation is not completed by any specified date there shall be no resulting liability on the part Of the Lessee. -7- (c) The Lessee shall create on its books and records special ;counts for the Project Fund as to any issue of Bonds providing -oject Fund moneys, a separate account each of which shall be ;signated as "Series Capital Improvement Account" iereinafter referred to as a "Capital Improvement Account"). The moneys credited to the Series 1989 Capital Improvement Account shall be used and applied for the purpose of paying the cost of the Leased Facilities in accordance with the Capital Improvement program and otherwise disbursed as herein provided. The moneys derived from the sale of any Additional Bonds under the Resolution to be credited to the related Capital Improvement Account shall be used and applied for the purpose of paying the cost of additions, extensions and improvements to the Leased Facilities in accordance with the capital improvement program or report approved and ratified by the Authority and the City with respect to each such issue of additional Bonds. (d) All payments from the Project Fund shall be made upon checks signed by the officers of the City properly authorized to sign on its behalf, but before .they shall sign any such checks there shall be filed with the Project Fund Depository: (1) A requisition for such payment (the above -mentioned checks may be deemed a requisition for the purpose of this Section), stating each amount to be paid, and the name of the person, firm or corporation to whom payment thereof is due; and .(2) A certificate signed by such officers, attached to the requisition and certifying: (i) That an obligation in the stated amount has been incurred by the City on behalf of the Authority, and that the same is a proper charge against the Project Fund and has not been paid, specifying the purpose and circumstances of such obligation in reasonable detail and to whom such obliga- tion is owed, accompanied by the bill or statement of account for such obligation, or a copy thereof; (ii) That they have no notice of any vendor's, mechanic's or other liens or rights to liens, chattel mortgages, conditional sales contracts or any security, interest, which should be satisfied or discharged before such payment is made; (iii) That such requisition contains no item repre- senting payment on account or any retained percentages which the Authority or the City is, at the date of such certificate, entitled to retain; and (iv) That insofar as such obligation was incurred for work, materials, supplies or equipment in connection with the undertaking, such work was actually performed, or such -8- materials, supplies or equipment were actually installed in or about the construction or delivered at the site of the work for that purpose; and (e) Simultaneously with any payment from the Project Fund with respect to the acquisition of any real property (or interests therein) the City shall cause to be transferred to the Authority such real property (or interests therein), free of any liens and encumbrances and the same shall constitute part .of the Leased Facilities. (f) The City will do or cause to be done all things, and take or cause to be taken all reasonable and prudent measures, necessary. to continue construction with due diligence and to expend the moneys credited to each Capital Improvement Account in the Project Fund as expeditiously as possible in order to assure the completion of the projects for which such accounts were created, on the earliest practicable date, and will indemnify itself against the usual hazards incident to the construction of such projects, and without in any way limiting the generality of the above, agrees to: (a) require each construction contractor, and each subcon- tractor to furnish a bond, or bonds, of such type and in amounts adequate to assure the faithful performance of their contracts and the payment of all bills and claims for labor and material arising by virtue of such contract; and (b) require each construction contractor or the subcontractor to maintain at all times until the completion and acceptance of the undertaking adequate compensation insurance for all of their employees and adequate public liability and property damage insurance for the full and complete protection of the Authority or the City from any and all claims of every kind and character which may arise by virtue of the operations under their contracts, whether such operations be by itself or by anyone directly or indirectly for it, or under its control. (g) All requisitions and certificates required by this Section shall be retained either by the Project Fund Depository or by the Authority or the City, subject at all times to inspection by any officer of the Authority or any bondholder. Section 3.5. In Event Project Fund Insufficient. The Authority does not make any warranty, either express or implied, that the moneys which will be paid into the Project Fund under the provisions of this Lease will be sufficient to pay all the costs Of the projects which will be incurred in that connection. The Lessee agrees that, if after exhaustion of the moneys in the Project Fund the Lessee should pay any portion of the costs of the projects it shall not be entitled to any reimbursement therefor from the Authority or from the owners of any of the Bonds, nor shall it be entitled to. any diminution in or postponement or abatement of the amount of the rents and other amounts payable under Article IV hereof. cm Section 3.6. Investment of Project Fund Moneys Permitted. PY moneys held in the Project Fund -shall be invested or reinvested ,t the direction of the City in Permitted Investments. ARTICLE IV. EFFECTIVE DATE OF THIS LEASE: DURATION OF LEASE TERM: RENTAL PROVISIONS; FLOW OF FUNDS Section 4.1. Effective Date of this Lease; Duration of Lease 1grm. This Lease shall become effective as of September 1, 1989 and the leasehold interest created by this Lease shall then begin, and, subject to the other provisions of this Lease (including particularly Article VIII hereof), shall expire February 2, 2016, or if at said time and on said date all of the Bonds have not been paid in full, then on such date as such payment shall have been pade, but in no event in excess of fifty (50) years from the date hereof. t. Section 4.2. Delivery and Acceptance of Possession. The Authority agrees to deliver to the Lessee sole and exclusive possession of the Leased Facilities upon delivery of the Series 1989 Bonds and the Lessee agrees to accept possession of the Leased Facilities upon delivery of the Series 1989 Bonds upon such delivery. The Lessee agrees to operate, maintain and insure or cause to be operated, maintained or insured the Leased Facilities on a sound, businesslike basis. Section 4.3 Basic Lease Payments. On or before January 15 and July 15 of each year, commencing with July 15, 1990, the City shall make the Basic Lease Payments to the Authority if such date is January 15th, an amount sufficient to pay the principal of and interest on the Bonds coming due on February 1, and if such date is July ;L5th, an amount sufficient to pay the interest on the Bonds coming due on August 1, and such Basic Lease Payments shall continue and recontinue until provision has been made for the payment in full of said Bonds. In addition to the foregoing, each Basic Lease Payments shall include the charges as billed specified in subparagraphs (e) , (f) and (g) of Section 3, Article V of the Resolution. The Basic Lease Payments provided for herein shall be made by payment directly to the Sinkina Fund Custodian for deposit into the Sinking Fund. Section 4.4 Operating Expenses. The City shall pay or cause to be paid the reasonable and necessary costs of operating, maintaining and repairing the Leased Facilities, including salaries, wages, employee benefits, the payment of any contractual obligations incurred pertaining to the operation of the Leased Facilities, cost of materials and supplies, rentals (excluding Basic Lease Payments) of leased property, real or personal, insurance premiums, audit fees, any incidental expenses of the -10- Aatihority and _ -%r%ge of Puy r ea-ilities in Section such other charges as may properly be made for the operating, maintaining and repairing the Leased accordance with sound business practice. 4.5. optional Prepayment of Rent; Fedemntion of (a) The.rent due under Section 4.3 shall be subject to pre- payment, in whole or in part, for the purpose of calling and rEdeeming, at the optic.-, cf the City, all or part of the Bonds in providence ever, that the funds used to prepay s th the provisions of Article III of the provided, however, erentthave ow , been deposited to the Sinking Fund prior to the giving of notice to redeem by the Bond Registrar (as defined in the Resolution) to the bondholders, and the Lessee shall pay all costs which may be incurred with anecaiolicablethe call of redemption preen Bonds m ds to be redeemed together Y PP (b) No prepayment of any amount of rent in accordance with the provisions of the preceding subsection shall relieve the Lessee to any extent from its obligations thereafter to make the full Basic Lease Payments required by the provisions hereof until all the Bonds issued under the Resolution and the interest thereon and the charges of the Bond Registrar and Paying Agent (as defined of in the Resolution) have been paid in full. Upon any prepayment rent, as authorized by the preceding subsection, in part, the Bonds to be redeemed shall be called for redemption by lot or in s uch other manner prescribed by the Resolution. Upshall paymentbe used of to such rent in whole the amount of such prepayment retire all outstanding Bonds in the manner provided in, and subject to, the Resolution. Section 4.6. obli anions vz ,���� ==G.....•-----_ _- Unconditional. The obligation of the Lessee to make the payments required in Section 4.3 hereof and to perform and observe the other agreement on its part contained herein shall be absolute and unconditional. Until such time as the principal of and interest on the Bonds outstanding under the Resolution shall have been paid in full or provision for the payment thereof shall have been made in accordance with the Resolution, the Lessee (i) will not suspend or discontinue any payments provided for in Section 4.3 hereof except to the extent the same have been prepaid, (ii) will perform and observe all of its other agreements contained in this Lease, and (iii) except as provided in Article vIII hereof, will not terminate the Lease Term for any cause, including, without limiting the generality of the foregoing, failure of the Authority's or the city's title in and to the Leased Facilities or any part thereof, any acts or circumstances that may constitute failure of consider- ation, eviction or constructive eviction, destruction of or damage to the Leased Facilities, commercial frustration of purpose, any change in the tax or other laws of the United States of America or Of the State of Georgia or any political subdivision of either or any failure of the Authority to perform and observe any agreement, -11- whether express or implied, or any duty, liability or obligation rising out of or connected with this Lease or the Resolution. othing contained in this Section shall be construed to release the uthority from the performance of any of the agreements on its part erein contained; and if the Authority should fail to perform any such agreement, the Lessee may institute such action against the Authority as the Lessee may deem necessary to compel performance or recover its damages for nonperformance as long as such action shall not do violence to or adversely affect the agreements on the part of the Lessee contained in the preceding sentence and to make the payments specified in Section 4.3 hereof; provided, however any liability of the Authority shall be payable solely from rents, revenues and receipts arising from the Authority's interest in the Leased Facilities. The Lessee may, however, at its own cost and expense and in its own name or in the name of the Authority, prosecute or defend any action or proceeding or take any other action involving third persons which the Lessee deems reasonably necessary in order to insure the acquisition and construction of the Leased Facilities or to secure or protect its right of possession, occupancy and use hereunder, and in such event the Authority hereby agrees to cooperate fully with the Lessee and to take all lawful action which is required to effect the substitution of Lessee for the Authority in any such action or proceeding if the Lessee shall so request. Section 4.7. Tax Levy to Pay Basic Lease Payments. (a) The obligations of the Lessee to make the Basic Lease Layments when due under Section 4.3 hereof, and to perform its other obligations hereunder, are absolute and unconditional as herein provided, and the Lessee hereby pledges its full faith and .credit to such payment and performance. (b) The Lessee covenants that, in order to make any Basic Lease Payments when due from its general funds to the extent required, it will exercise its power of taxation to the extent necessary to pay any amounts required to be paid hereunder and it will make available and use for such payments all taxes levied and collected for that purpose together with funds received from any other source. The Lessee further covenants and agrees that in order to make funds available for such purpose, it will, in its general revenue, appropriation, and budgetary measures whereby its tax funds or revenues and the allocation thereof are controlled or provided for, include sums sufficient to satisfy any such Basic Lease Payments that may be required to be made from the general funds, whether or not any other sums are included in such measure, until all payments so required to be made shall have been made in full. The obligation of the Lessee to make any payments that may be required to be made from its general .funds shall constitute a qeneral obligation of the Lessee and a pledge of the full faith and :redit of the Lessee to provide the funds required to fulfill any ;uch obligation. -12- (c) In the event for any reason any such provision or appropriation is not made as provided in the preceding subsection (b), then the fiscal officers of the Lessee are hereby authorized and directed to set up as an appropriation on their accounts in the appropriate fiscal year the amounts required to pay the obligations which may be due from the general funds. 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 Lessee had included the amount of the appropriation in its general revenue, appropriation, and budgetary measures, and the fiscal officers of the Lessee shall make such Basic Lease Payments to the Sinking Fund Custodian for deposit to the Sinking Fund if for any reason the payment of such obligations shall not otherwise have been made. ARTICLE V SPECIAL COVENANTS OF CITY The City covenants and agrees with the Authority for the bene- fit of the bondholders as follows: Section 5.1. Rules and Regulations. That it will enforce .or cause to be enforced reasonable rules and regulations governing the Leased Facilities and the operation thereof, and that all compensation, salaries, fees and wages paid or caused to be paid by it in connection with the operation, repair and maintenance of the Leased Facilities will be reasonable, and that no more persons will be employed than are necessary, and that it will operate or cause to be operated same in an efficient and economical manner, and will at all times maintain or cause to be maintained the same in good repair and in sound operating condition, and will make or cause to be made all necessary repairs, renewals and replacements, and that it will comply or cause to be complied with all valid acts, rules, regulations, orders and directions of any legislative, executive, administrative or judicial body applicable to such undertaking and enterprise. Section 5.2. Contracting Procedure. That any contract rela- ting to the installation, extension, improvement, maintenance or repair of any facilities shall provide for retention of amounts due thereunder in accordance with applicable law. Section 5.3. Liens. That, except as herein provided and except for Permitted Encumbrances, the City will not create or suffer to be created, in the operation and maintenance of the Leased Facilities, any lien, security interest or charge thereon, or any part thereof, and that it will pay, or cause to be dis- charged, or will make adequate provisions to satisfy and discharge, within sixty (60) days after the same shall accrue, all lawful claims and demands for labor, materials, supplies or other objects, Which, if unpaid, might by law become a lien upon the Leased -13- Facilities, or any part thereof; provided, however, that nothing contained in this Section shall require the City to pay, or cause to be discharged, or make provision for, any such lien, security interest or charge, so long as the validity thereof shall be contested in good faith and by appropriate legal proceedings. Section 5.4. Insurance. That, to necessary, it will cause to be bonded its handling funds of the Leased Facilities in its protection and it shall procure and main maintained insurance on the physical prope: Facilities of the kinds and in the amounts private companies or other agencies engaged similar properties so long as any Bonds are insurance shall include: (a) fire and extende on the insurable portions of the Leased responsible insurance company or companies aut; to do business under the laws of the State of . t _L: 1 : 1-.s r.�..rnnnn rnl at i 11fY fn t'hP_ nnera the extent deemed employees or agents amounts adequate for tain or cause to be ties of the Leased normally carried by in the operation of outstanding. Such d coverage insurance Facilities with a iorized and qualified Georgia; (b) public pion of the Leased Facilities; and (c) vehicular public liability insurance on any vehicle owned or operated by'the City and used in the operation of the Leased Facilities. Such insurance may provide reasonable and customary coverage and deductibles for agencies and governmental authorities operating similar facilities, provided that such insurance in such amount is available at a cost which, in the opinion of the City, will not impose an unreasonable financial burden, or the City may self insure against such claims and risks, or the City, in its discretion, may provide for any combination of the foregoing. The proceeds.of such fire and extended coverage policies are pledged as security for the Basic Lease Payments, but shall be available for and shall, to the extent necessary and desirable, be applied to the repair and replacement of the damaged or destroyed property. In the event the proceeds of such policies are not used for that purpose, then same shall be deposited in the Sinking Fund. Proceeds from the fidelity bonds on employees and agents shall be paid into the appropriate fund. All insurance policies and fidelity bonds shall be open to the inspection of the bondholders or their duly authorized representatives at all reasonable times. All insurance policies shall name the Authority as an additional insured. Section 5.5. Sale of Assets. That so long as any of the Bonds shall be outstanding, and except as in this Lease otherwise permitted or provided for, it will not encumber the Leased Facilities or any part thereof, and it will not sell or otherwise dispose of the Leased Facilities or any integral part thereof, except it may -request the Authority to sell the Leased Facilities, and the Authority shall sell the Leased Facilities if required by the City, as a whole, or substantially as a whole, if the proceeds Of such sale be at least sufficient to provide for the payment of all Bonds secured by this Lease and any interest accrued or to accrue thereon, and that the proceeds of any such sale shall be deposited in trust and applied by the Authority to the extent -14- necessary to purchase or redeem such Bonds. Nothing contained herein, however, shall preclude sale of a part of the Leased gacilities, if the proceeds from such sale are used for other public projects to be owned and operated by the City, or for extensions and improvements to the Leased Facilities, or deposited with the Sinking Fund Custodian as prepayment of rent due hereunder and applied toward the purchase or redemption of Bonds. Section 5.6. Arbitrage. The City hereby covenants and agrees that it will not, subsequent to the date of issuance and delivery of the Series 1989 Bonds, intentionally use any portion of the proceeds of said Series, 1989 Bonds to acquire higher yielding investments, except as may be otherwise permitted by Section 148 of the Internal Revenue Code of 1986, as amended (the "Code") and that, as directed by the Authority in order to fulfill the , Authority's obligations under Article VII, Section 5 of the Resolution, it will comply with, and take such action and make such payments as may be permitted or required by Section 148(f) of the Code, to ensure that the Series 1989 Bonds do not constitute "arbitrage bonds" within the meaning of Section 148(a) of the Code and that it will expend the proceeds from the sale of the Series 1989 Bonds and will take such action as may be necessary.so that the interest on the Series 1989 Bonds will be and will remain excluded from`' gross income of the owners for federal income tax purposes, including without limitation, compliance with provisions of Sections 141-149 of the Code, as applicable. All expenses incurred by the Authority in connection with its obligations under Article VII, Section 5 of the Resolution shall be paid by the City. The obligations of the City under this Section 5.6 shall survive termination of this Lease. ARTICLE VI. SPECIAL COVENANTS OF AUTHORITY AND CITY Section 6.1. No Warranty of Condition or Suitability by the Authority. The Authority makes no warranty, either express or implied, as to the condition of the Leased Facilities or that it will be suitable for the Lessee's purposes or needs. Section 6.2. Inspection of the Leased Facilities. The Lessee agrees that the Authority, the bondholders and their duly authorized agents who are acceptable to the Lessee shall have the right at reasonable times during business hours, subject to the Lessee's usual safety and security requirements to examine and inspect the Leased Facilities without interference or prejudice to the Lessee's operations. Section 6.3. Granting of Easements: Sale. If no event of default hereunder shall have happened and be continuing, the Lessee may at any time or times cause to be granted, whether to itself or Otherwise, easements, licenses, rights -of -way (temporary or -15- j perpetual and including the dedication of public highways) and other rights or privileges in the nature of easements with respect to any property included in the Leased Facilities and such grant will. be free from the lien or security interest of this IRase and the Resolution or the Lessee may cause to be released existing easements, licenses, rights -of -way and other rights or privileges in the nature of easements, held with respect to any property included in the Leased Facilities with or without consideration. In connection with any such grant or any sale permitted by Section 5.5 hereof, the Aut::critl agrees that it shall execute and deliver any instrument necessary or appropriate to confirm and grant or release any such easement, license, right-of-way or other right or privilege or asset. Section 6.4. Further Assurances and Corrective Instrument. Recordings and Filings. The Authority and the Lessee agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required to perfect title in and to -that portion of the Leased Facilities leased or intended so to be or for carrying out the intention of or facilitating the performance of this Lease. Section 6.5. Release Covenants. The Lessee releases the Authority from, covenants and agrees that the Authority shall not be liable for, all claims by or on behalf of any person arising from: (1) the conduct or management of, or from any work or thing done in or on, the Leased Facilities during the Lease Term; (ii) any condition of the Leased Facilities, (iii) any breach or default on the part of the Lessee in the performance of any of its obligations under this Lease; (iv) any act of negligence of the Lessee or of any agents, contractors, servants, employees or licensees of the Lessee or of any lessee or tenant of the Lessee; and (v) any loss or damage to property or any injury to or death of any persons occurring on or about or resulting from any defect in the Leased Facilities. ARTICLE VII. EVENTS OF DEFAULT AND REMEDIES Section 7.1. Events of Default Defined. The following shall be "events of default" under this Lease and the terms "event of default" or "default" shall mean, whenever they are used in this Lease, any one or more of the following events: (a) Failure by the Lessee to make the Basic Lease Payments required to be paid under Section 4.3 hereof at the times specified therein; (b) Failure by the Lessee to observe and perform any covenant, condition or agreement of this Lease on its part to -16- be observed or performed, other than as referred to in subsection (a) of this Section, for a period of thirty (30) days". after written notice, specifying such failure and requesting that it be remedied, shall have been given to the Lessee by the Authority or the bondholders, unless the Authority and the bondholders shall agree in writing to an extension of such time prior to its expiration; provided, however, if the failure stated in the notice cannot be corrected within the period specified herein, the Authority and the bondholders will not unreasonably withhold their consent to an extension of such time if it is possible to correct such failure and corrective action is instituted by the Lessee within the applicable period and diligently pursued until the default is corrected; and (c) An "event of default" shall have occurred under the Resolution. Section 7.2. Remedies on Default. Whenever any event'of default referred to in Section 7.1 hereof shall have happened and be subsisting, the Authority, or the bondholders as provided in the Resolution, may take any one or more of the following remedial steps: (a) If the principal and interest accrued on the Bonds shall have been declared immediately due and payable pursuant to the Resolution, the Authority or the bondholders may, at its option, declare all installments of rent payable under Section 4.3 hereof for the remainder of the Lease Term to be immediately due and payable, whereupon the same shall become immediately due and payable. If the Authority or the bondholders elect to exercise the remedy afforded in this Section 7.2(a) and accelerates all rents payable under Section 4.3 hereof for the remainder of the Lease Term, the amount then due and payable by the Lessee as accelerated rent shall be the sum of (1) the aggregate principal amount of the outstanding Bonds, (2) all interest then due on the Bonds and (3) any other amounts which may be owing to the Authority pursuant to this Lease. Such sums as may then become payable shall be paid into the Sinking Fund and after the Bonds and accrued interest thereon have been fully paid and any costs occasioned by such default and the collection of the rents have been satisfied, any excess moneys in the Sinking Fund shall be returned to the Lessee as an overpayment of rents; (b) The Authority or the bondholders may seek the appointment of a receiver for the Leased Facilities; (c) The Authority or the bondholders may require the Lessee to furnish copies of all books and records of the Lessee pertaining to the Leased Facilities; -17- (d) The Authority or the bondholders may take whatever action at law or in equity may appear necessary or desirable to collect the rents then due and thereafter to become due, or to enforce performance and observance of any obligation, agreement or covenant of the Lessee under this Lease; and (e) The Authority or the bondholders may exercise any remedies provided for in the Resolution. Any amounts collected pursuant to action taken under this Section shall be paid into the Sinking Fund and applied in accordance with the provisions of the Resolution or, if payment in full of the outstanding Bonds has been made (or provision for payment thereof has been made in accordance with the provisions of the Resolution), to the Lessee. Section 7.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority or the bondholders is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Lease or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon the occurrence of any event of default shall impair any such right or power or 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 Authority or the bondholders to exercise any remedy reserved to it in this Article, it shall not be necessary to give any notice, other than such notice or notices as may be herein expressly required. Such rights and remedies as are given to the Authority hereunder shall also extend to the bondholders, and the holders of the Bonds shall be deemed third party beneficiaries of all covenants and agreements herein contained. Section 7.4. Agreement to Pay Attorneys' Fees and Expenses. If the Lessee should default under any of the provisions of this Lease and either or both the Authority or the bondholders should employ attorneys or incur other expenses for the collection of rents or the enforcement of performance or observance of any obli- gation or agreement on the part of the Lessee herein contained, the Lessee agrees that it shall on demand therefor pay to the Authority, the bondholders the reasonable fee of such attorneys and such other reasonable expenses so incurred by the Authority and the bondholders. Section 7.5. No Additional Waiver Implied by one Waiver. If any agreement contained in this Lease should be breached by either party and thereafter waived by the other party, such waiver shall be limited• to the particular breach so waived and shall not be deemed to waive any other breach hereunder. -18- ARTICLE VIII OPTION OF LESSEE Section 8.1. Unqualified Option to Purchase. On and after the effective date of this Lease and during the Lease Term and for three hundred sixty-five (365) days after the expiration thereof, the Lessee shall have the unconditional right and option to purchase the Leased Facilities at any time. Section 8.2. Purchase Price. The purchase price payable if the Lessee purchases the Leased Facilities pursuant to the provi- sions of this Article VIII shall be One Hundred Dollars ($100) to be paid to the Authority plus the full amount necessary under the provisions of the Resolution to cause the payment in full of the Bonds (including, without limitation, principal, interest, expenses of redemption and the Paying Agent's and Bond Registrar's fees accrued and to accrue through final payment of the Bonds and all other liabilities of the Lessee accrued under this Lease). In any case, if no principal installment on the Bonds shall be outstanding at the time of purchase, or the redemption or payment of the Bonds shall be or have been otherwise provided for, the purchase price of the Leased Facilities shall be One Hundred Dollars ($100) to be paid to the Authority. Section 8.3. Procedure For Exercising Option to Purchase. The Lessee may exercise its option to purchase hereunder by giving written notice to the Authority of its intention to purchase the Leased Facilities pursuant to the provisions of this Article VIII specifying the ;time and place of closing and by giving notice to the Authority. At the closing the Authority shall, upon payment of the purchase price hereinabove specified, deliver to the Lessee appropriate conveyance instruments transferring all of its right, title and interest in and to the Leased Facilities. ARTICLE IX. MISCELLANEOUS Section 9.1. Notices. All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed given when mailed by registered or certified mail, return receipt requested,.postage prepaid. Section 9.2. Binding Effect. This Lease shall inure to the benefit of and shall be binding upon the Authority, the Lessee and their respective successors and assigns, subject, however, to the limitations contained in this Lease. Section 9.3. Severability. If any provision of this Lease shall be held invalid or unenforceable by any court of competent -19- jurisdiction, such holding shall not invalidate or render unen- forceable any other provision hereof. Section 9.4. Amounts Remaining in Sinking Fund. It is agreed by the parties hereto that, subject to and in accordance with the terms and conditions of the Resolution certain surplus moneys remaining in the Sinking Fund shall belong to and be paid to the Lessee by the Authority as an overpayment of rents. Section. 9.5. Amendments, Changes and Modifications. Except as otherwise provided in this Lease or in the Resolution, prior to payment in full of all Bonds (or provision for the payment thereof having been made in accordance with the provisions of the Resolution), this Lease may not be effectively amended, changed, modified, altered or terminated without the requisite concurring written consent of the bondholders in accordance with the Resolution. Section 9.6. Execution Counterparts. This Lease may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Section 9.7.' Captions. The captions and headings in this Lease are for convenience only and in no way define, limit or describe the scope or intent of any provisions of this Lease. Section 9.8. Law Governing Project of Lease. This Lease shall be governed by, and construed in accordance with, the laws of the State of Georgia. Section 9.9. Redemption of Bonds. The Authority, at the request at any time of the Lessee, shall take all steps that may be proper and necessary under the applicable redemption provisions of the Resolution to effect the redemption of all or part of the then outstanding Bonds as may be specified by the Lessee, on the earliest redemption date on which such redemption may be effected. It is understood that all expenses of such redemption shall be paid by the Lessee and not from other funds of the Authority. The Authority shall cooperate with the Lessee in effecting any purchase or redemption of the Bonds. Section 9.10. Net Lease. This Lease shall be deemed a "net lease," and the Lessee shall pay absolutely net during the Lease Term the rents, revenues and receipts pledged hereunder, without abatement, deduction or set-off other than those herein expressly Provided. Section 9.11. Operating Contracts. Nothing contained in this Lease shall affect or impair any existing agreements or contracts between the City and the Authority regarding the operation and management of the Leased Facilities. -20- IN WITNESS WHEREOF, the Authority and the Lessee have caused this Lease to be executed in their respective corporate names and their respective corporate seals to be hereunto affixed and attested by their duly authorized officers, all as of the date first above written. THE. AUTHORITY: DOWNTOWN SMYRNA DEVELOPMENT AUTHORITY (Corporate Seal) / Chairman Attest: i - � � Secretary and TreapOrer As to the Authority, signed and Sealed �p the presence of: My commission expirePary Public, Cobb County, Georgia y Commission Expires Sept. 12, 1991 (Notarial Seal) THE LESSEE: CITY OF SMYRNA (Seal) By: Mayor Attest: Clerk As to the Lessee, signed and sealed in the presence of: W fn;�4 ary Public i;b C( '`y. lc My commission exp;� •;s_;^rr;�;;r ept.. , 1: �_ (Notarial Seal) September 11, 1989 The Downtown Smyrna Development Authority met September 11, 1989 at 6:30 p.m. at Smyrna City Hall. Those in attendance were Hubert Black, Alton Curtis, C. J. Fouts, Jim Pitts, Willouise Spivey, Pete Wood and Mayor A. Max Bacon. Also attending were Attorney Chuck Camp; Council members Jack Shinall, Bob Davis, Jim Hawkins, Kathy Jordan, Bill Scoggins; City Administrator John Patterson and Wit Carson. Wit Carson stated the response to the letter mailed to property owners was not good. John Patterson said he still did not have the appraisals requested by the property owners. The attorney representing the Sunset Avenue group had called him this afternoon and said he would bring them by City Hall today, but as yet he has not brought them. He also reported that Mr. Carter chose not to have his property appraised. John Patterson distributed land acquisition information sheets, showing "closed out" properties, those being negotiated, must have's, etc. John Patterson reported he had talked with the representative of the Sunset Avenue group during the meeting and he reported they did not want to sell and just wanted to be left alone. With no further business, meeting adjourned.