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SQUIRE DRAFT 03/24/15 When recorded return to: Affidavit and Fee Exemption Claimed: Timothy E. Pickrell, Esq. A.R.S. Section 11-1134(A)2 Squire Patton Boggs (US) LLP 1 E. Washington Street, Suite 2700 Property Tax Exemption: Phoenix, Arizona 85004 A.R.S. Section 42-11102(A)2 GROUND LEASE by and between MARICOPA COUNTY, ARIZONA, as Lessor and _____________________________, as Trustee Dated as of ________, 2015 Squire Patton Boggs (US) LLP Special Counsel 003-8071-7561/3 GROUND LEASE THIS GROUND LEASE (this “Ground Lease”), dated as of ________, 2015, by and between MARICOPA COUNTY, ARIZONA (the “County”), as lessor, and _____________________, as trustee for the benefit of the registered owners of the Certificates (as defined herein) (the “Trustee”), as lessee; W I T N E S S E T H: WHEREAS, the County owns the parcel of real property situated in Maricopa County, Arizona and described in Exhibit A and all improvements thereon existing at the time of execution of this Ground Lease (collectively, the “Leased Property”); and WHEREAS, the County, pursuant to the authority in Section 11-256 of the Arizona Revised Statutes (the “Act”), appraised, advertised and then accepted public bids for a leasehold interest in the Leased Property, subject to specified terms and conditions; and WHEREAS, the Trustee was the highest bidder at the auction and has agreed to lease the Leased Property from the County for the term specified herein; and WHEREAS, as a means of financing its payment of rent under this Ground Lease, which will be used by the County to make certain improvements to the Leased Property and pay the expenses incurred by the County, the Trustee will execute and deliver the Certificates of Participation evidencing proportionate ownership interests in the lease payments to be made by the County pursuant to a Lease-Purchase Agreement (as defined below) (the “Certificates”); and WHEREAS, simultaneously with the execution and delivery of this Ground Lease, the Trustee will execute a Trust Agreement, dated as of _________, 2015 (the “Trust Agreement”) with the County; NOW, THEREFORE, in consideration of the above premises and of the mutual covenants hereinafter contained and for other good and valuable consideration, the parties hereto agree as follows: Section 1. Term. The County hereby leases the Leased Property to the Trustee and the Trustee hereby leases the Leased Property from the County for the period commencing as of the date hereof and terminating on July 1, 2034, or such later date as the term of the Lease-Purchase Agreement identified in Section 2 below shall terminate. This Ground Lease shall be subject to earlier termination in accordance with Section 5 hereof. Section 2. Simultaneous Lease-Back; No Merger. The County and the Trustee agree that simultaneously with and upon the execution of this Ground Lease, the parties shall enter into a Lease-Purchase Agreement, dated as of _________, 2015 (the “Lease-Purchase Agreement”), pursuant to which the Trustee, as lessor, will lease the Leased Property to the County, as lessee. The County acknowledges that, as provided in the Lease-Purchase Agreement, if an event of default or termination occurs under the Lease-Purchase Agreement without a concurrent 1 003-8071-7561/3 prepayment or termination of this Ground Lease as provided in Section 5 hereof, this Ground Lease will remain in effect and the Trustee shall have the right to enter upon and occupy the Leased Property and to relet or otherwise dispose of its leasehold interest in the Leased Property under this Ground Lease. It is intended by the parties hereto that no merger of the leasehold estates of the County shall occur by operation of law by reason of this Ground Lease and the Lease-Purchase Agreement, and more particularly that (1) the leasehold interest granted by the County to the Trustee under this Ground Lease is and shall be independent of the Lease-Purchase Agreement, (2) the Lease-Purchase Agreement shall not be an assignment or surrender of the leasehold interest granted to the Trustee under this Ground Lease, and (3) the Lease-Purchase Agreement shall not operate as a merger or extinguishment of the leasehold interest granted to the Trustee under this Ground Lease. Section 3. Title to Property. Title to the Leased Property shall at all times remain with the County, subject to this Ground Lease and the Lease-Purchase Agreement. Section 4. Rent. The Trustee agrees to prepay its rental obligations hereunder to the County, from the proceeds of the Certificates, upon delivery of the Certificates, which consideration is agreed to represent fair market rental value for the Leased Property, and is being paid to the County. The Trustee shall not be responsible for any additional payments hereunder, including any lease or real estate taxes levied with respect to this Ground Lease or the transactions contemplated hereby. Section 5. Early Rights of Termination by the County. (a) (a) The County shall have the right to terminate this Ground Lease upon written notice to the Trustee if the County prepays the Lease-Purchase Agreement in accordance with Section 10.3 thereof, or exercises its option to purchase in accordance with Section 10.2 thereof, and, in either case, defeases the Trust Agreement in accordance with Article XIV thereof. (b) If there is no Event of Default under the Lease-Purchase Agreement in existence at such time, this Ground Lease shall terminate, without any necessity of written notice or further action on the part of the County or the Trustee, on the same date occurring on or after ___________ that the Leased Property is deemed to have been purchased by the County and is released and/or removed from the Lease-Purchase Agreement, in accordance with Section 10.2 thereof. Section 6. Surrender. The Trustee agrees that upon the expiration or termination of this Ground Lease, it will surrender to the County the Leased Property. At the time of such surrender, the Leased Property shall be free and clear of all liens and encumbrances resulting from any act or omission of the Trustee. Section 7. Notices. All notices to be given under this Ground Lease shall be made in writing and mailed by first class mail, postage prepaid, to the party at its address stated below or at such other address as the party may provide in writing from time to time. 2 003-8071-7561/3 If to the County: Maricopa County, Arizona Department of Finance 301 W. Jefferson, Suite 960 Phoenix, Arizona 85003 If to Trustee: Attention: Section 8. Headings. All section headings contained in this Ground Lease are for the convenience of reference only and are not intended to define or limit the scope of any provision of this Ground Lease. Section 9. Cancellation of County Contracts; Conflicts of Interest. The County and the Trustee acknowledge that this Ground Lease is subject to cancellation by the County pursuant to Section 38-511 of the Arizona Revised Statutes, the provisions of which are incorporated herein. The County and the Trustee represent that, to the best of their knowledge, as of the date hereof, no basis exists for the County to cancel this Ground Lease pursuant to Section 38-511 of the Arizona Revised Statutes. Section 10. Governing Law; Arbitration. This Ground Lease shall be construed in accordance with and governed by the laws of the County. The venue for any proceedings on any and all controversies arising under this Ground Lease shall be Maricopa County, Arizona. In the event of a dispute, the parties agree to use arbitration to the extent required by Section 12-1518 of the Arizona Revised Statutes, and the prevailing party shall be entitled to attorneys’ fees and costs. Section 11. Entire Agreement; Amendment; Severability. (a) This Ground Lease, together with attachments, exhibits and other documents or instruments executed by the County and the Trustee in connection with this Ground Lease, or specifically referenced in this Ground Lease, constitutes the entire agreement between the parties with respect to the lease of the Leased Property. (b) This Ground Lease may not be modified, amended, altered or changed except in a writing approved and executed by both the County and the Trustee. (c) If any provision of, or any covenants, obligation or agreement contained in, this Ground Lease is determined by a court to be invalid or unenforceable, that determination shall not affect any other provision, covenant, obligation or agreement, each of which shall be construed and enforced as if the invalid or unenforceable portion were not contained in this Ground Lease. That invalidity or unenforceability shall not affect any valid or enforceable application thereof, and each such provision, covenant, obligation or agreement shall be deemed to be effective, operative, made, entered into or taken in the manner and to the full extent permitted by law. Section 12. Inspection, Audit and Production of Records. The Trustee agrees that all books, accounts, reports, files and other records relating to this Ground Lease shall be subject at all 3 003-8071-7561/3 reasonable times to inspection and audits by the County for five years after completion of this Ground Lease, and that upon request by the County such records shall be produced at any of the County offices designated herein as the place at which notices to the County are to be given. Section 13. Limited Obligation of Trustee. The County acknowledges that any and all obligations of the Trustee hereunder are nonrecourse and are limited to moneys received by the Trustee under the Lease-Purchase Agreement or through funds made available pursuant to the Trust Agreement. Section 14. Execution in Counterparts. This Ground Lease 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 15. Recording. The parties agree that this Ground Lease or a memorandum thereof is to be recorded in the records of Maricopa County, Arizona, and that this Ground Lease or a memorandum thereof may be re-recorded as necessary to correct the legal description of the Leased Property due to replatting or otherwise. [Remainder of page intentionally left blank] 4 003-8071-7561/3 IN WITNESS WHEREOF, the County has caused this Ground Lease to be executed in its name by its duly authorized officer, and the Trustee has caused this Ground Lease to be executed in its corporate name by its duly authorized officer, as of the date first above written. MARICOPA COUNTY, ARIZONA, as Lessor By Chairman, Board of Supervisors ATTEST: By: Clerk, Board of Supervisors APPROVED AS TO FORM: SQUIRE PATTON BOGGS (US) LLP, Special Counsel By: Timothy E. Pickrell __________________________________, as Trustee and Lessee By Vice President [Signature page to Ground Lease] 003-8071-7561/3 STATE OF ARIZONA ) ) ss. COUNTY OF MARICOPA ) On this, the ____ day of ________, 2015, before me, the undersigned Notary Public, personally appeared, Steve Chucri, who acknowledged himself to be the Chairman of the Maricopa County Board of Supervisors and that he, such officer, being authorized so to do, executed the foregoing Ground Lease for the purposes therein contained by signing the name of the County by himself as such officer. IN WITNESS WHEREOF, I have hereunto set my hand and official seal. Notary Public My Commission Expires: STATE OF ARIZONA ) ) ss. COUNTY OF MARICOPA ) On this, the ____ day of ________, 2015, before me, the undersigned Notary Public, personally appeared ___________, who acknowledged himself to be a Vice President of ___________________, and that he, as such officer, being authorized so to do, executed the foregoing Ground Lease for the purposes therein contained by signing the name of the corporation by himself as such officer. IN WITNESS WHEREOF, I have hereunto set my hand and official seal. Notary Public My Commission Expires: [Notarization page of Ground Lease] 003-8071-7561/3 EXHIBIT A LEASED PROPERTY LEGAL DESCRIPTION A-1 003-8071-7561/3