HomeMy WebLinkAbout08-17-2010 Regular Meeting 2-2113
MINUTES OF A MEETING OF
THE BOARD OF DIRECTORS OF THE
FAIRHOPE AIRPORT AUTHORITY
The Board of Directors (the "Directors") of FAIRHOPE AIRPORT
AUTHORITY, a public corporation under the laws of the State of Alabama (the "Authority")
held a regular public meeting at City Hall in the City of Fairhope, Alabama, on August 17, 2010,
at 4:30 o'clock p.m. The following members of the Board of Directors were present at the
meeting:
PRESENT: ABSENT:
[Daniel Stankoski [None]
Joe McEnerney
Charles R. Zunk
Pamela Caudill
Rod Platt
Howard Hadley
Charles E. Bassett]
Charles R. Zunk, Chairman of the Board of Directors, acted as chairman of the meeting, and Joe
McEnemey, Secretary of the Authority, acted as secretary of the meeting. The Chairman stated
that each of the members of the Board of Directors had signed a waiver of notice of the time,
place and purpose of the meeting and that notice of the meeting had been posted at the place of
holding of the meeting and on the bulletin board in City Hall of the City of Fairhope, Alabama,
not later than August 6, 2010. Upon motion duly made, seconded and unanimously adopted,
said waiver and said notice with proof of posting was ordered spread upon the minutes of this
meeting at the end thereof. A quorum being present, the chairman declared the meeting open for
the transaction of business.
1
III
There was then presented to the meeting the form of a Mortgage and Security
Agreement, 2010 Appropriation Agreement and Agreement for Sale and Purchase ertaining to
the proposed activity of the Board of Directors.
C
The following resolution was introduced in writing to the meeting:
2
247
Prepared by and Upon
Recordation Return To:
Angie Godwin McEwen
Johnston Barton Proctor & Rose LLP
Colonial Brookwood Center
569 Brookwood Village, Suite 901
Birmingham, Alabama 35209
MORTGAGE AND SECURITY AGREEMENT
Mortgagor: The FAIRHOPE AIRPORT AUTHORITY
To
Mortgagee: RBC BANK (USA)
MORTGAGE AND SECURITY AGREEMENT
Dated August 26, 2010
(W0753708.2)
245 .
THIS MORTGAGE AND SECURITY AGREEMENT (the "Security Instrument" or
"Mortgage") is made as of the 26t' day of August, 2010, by The Fairhope Airport Authority, a public
corporation organized under the laws of the State of Alabama, having its principal place of business at
161 N. Section Street, Fairhope, Alabama 36532 (the `Borrower" or the "Mortgagor") for the benefit of
RBC BANK (USA), having an address of , as
mortgagee (the "Bank" or the "Mortgagee"). All capitalized terms not otherwise defined herein shall
have the meaning ascribed to them in the Bond or the Collateral Documents, as applicable (defined
below).
THIS MORTGAGE IS FILED AS AND SHALL CONSTITUTE A FIXTURE FILING IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 7-9A-102(A)(40) OF THE CODE OF
ALABAMA.
RECITALS:
WHEREAS, the Borrower has determined it is desirable to issue and deliver its [$8,910,000]
Airport Improvement Refunding Bond, Series 2010 (the "Bond"), which is being issued pursuant to a
resolution adopted by the governing body of the Borrower on August 9, 2010 (the "Resolution") to make
funds available to redeem and retire the Airport Improvement Bonds, Series 2007, of the Borrower and to
pay the costs of issuing the Bond; and
WHEREAS, the Bank has agreed to purchase the Bond from Borrower at a price equal to the
face amount thereof [($8,910,000)]; and
WHEREAS, in order to induce the Bank to purchase the Bond, the Borrower has agreed to enter
into an Appropriation Agreement of even date herewith between Borrower and the City of Fairhope,
Alabama (the "Appropriation Agreement"), and to grant a first mortgage lien on the Property (as defined
below) to the Mortgagee pursuant to this Security Instrument; and
WHEREAS, one of the conditions precedent to the Bank purchasing the Bond is that the
Borrower execute and deliver this Security Instrument; and
WHEREAS, the Bank has agreed not to record this Mortgage prior to a Recordable Event (as
hereinafter defined); and
WHEREAS, the Bank will hold this executed Mortgage in escrow and such Mortgage shall not
be recorded or effective until the occurrence of a Recordable Event.
ARTICLE 1- GRANTS OF SECURITY
Section 1.1 Property Mortgaged. In order to secure the payment of the Obligations (as
hereinafter defined), the Mortgagor has granted, bargained, sold, conveyed, assigned, transferred,
pledged, and set over unto the Mortgagee, and by these presents does grant, bargain, sell, convey, assign,
transfer, pledge and set over unto the Mortgagee, and its successors and assigns, the following described
immovable property, rights, titles, interests, and estates (such property, rights and interests being
hereinafter collectively referred to as the "Property"):
(a) Land. The real property described in Exhibit A attached hereto and made a part
hereof (the "Land");
(W0753708.2)
243
(b) Additional Land. All additional lands, estates and development rights hereafter
acquired by Borrower for use in connection with the Land and the development of the Land and all
additional lands and estates therein which may, from time to time, by supplemental mortgage or otherwise
be expressly made subject to the lien of this Security Instrument;
(c) Improvements. The buildings, structures, fixtures, additions, enlargements,
extensions, modifications, repairs, replacements and improvements now or hereafter erected or located on
the Land (the "Improvements");
(d) Easements. All easements, rights -of -way or use, rights, strips and gores of land,
streets, ways, alleys, passages, sewer rights, water, water courses, water rights and powers, air rights and
development rights, and all estates, rights, titles, interests, privileges, liberties, servitudes, tenements,
hereditaments and appurtenances of any nature whatsoever, in any way now or hereafter belonging,
relating or pertaining to the Land and the Improvements and the reversion and reversions, remainder and
remainders, and all land lying in the bed of any street, road or avenue, opened or proposed, in front of or
adjoining the Land, to the center line thereof and all the estates, rights, titles, interests, dower and rights of
dower, curtesy and rights of curtesy, property, possession, claim and demand whatsoever, both at law and
in equity, of Borrower of, in and to the Land and the Improvements and every part and parcel thereof,
with the appurtenances thereto;
(e) Fixtures and Personal Property. All machinery, equipment, fixtures (including,
but not limited to, all heating, air conditioning, plumbing, lighting, communications and elevator fixtures)
and other property of every kind and nature whatsoever owned by Borrower, or in which Borrower has or
shall have an interest, now or hereafter located upon the Land and the Improvements, or appurtenant
thereto, and usable in connection with the present or future operation and occupancy of the Land and the
Improvements and all building equipment, materials and supplies of any nature whatsoever owned by
Borrower, or in which Borrower has or shall have an interest, now or hereafter located upon the Land and
the Improvements, or appurtenant thereto, or usable in connection with the present or future operation and
occupancy of the Land and the Improvements (collectively, the "Personal Property"), and the right, title
and interest of Borrower in and to any of the Personal Property which may be subject to any security
interests, as defined in the Uniform Commercial Code, as adopted and enacted by the state or states where
any of the Property is located (the "Uniform Commercial Code"), superior in lien to the lien of this
Security Instrument and all proceeds and products of the above;
(f) Leases and Rents. All leases and other agreements affecting the use, enjoyment
or occupancy of the Land and the Improvements heretofore or hereafter entered into, whether before or
after the filing by or against Borrower of any petition for relief under 11 U.S.C. §101 et seq., as the same
may be amended from time to time (the "Bankruptcy Code") (the "Leases") and all right, title and interest
of Borrower, its successors and assigns therein and thereunder, including, without limitation, cash or
securities deposited thereunder to secure the performance by the lessees of their obligations thereunder
and all rents, additional rents, revenues, issues and profits (including all oil and gas or other mineral
royalties and bonuses) from the Land and the Improvements whether paid or accruing before or after the
filing by or against Borrower of any petition for relief under the Bankruptcy Code (the "Rents") and all
proceeds from the sale or other disposition of the Leases (the "Proceeds") and the right to receive and
apply the Rents to the payment of the monetary Obligations;
(g) Condemnation Awards. All awards or payments, including interest thereon,
which may heretofore and hereafter be made with respect to the Property, whether from the exercise of
the right of eminent domain (including but not limited to any transfer made in lieu of or in anticipation of
the exercise of the right), or for a change of grade, or for any other injury to or decrease in the value of the
Property;
2
241
(h) Insurance Proceeds. All proceeds of and any unearned premiums on any
insurance policies covering the Property, including, without limitation, the right to receive and apply the
proceeds of any insurance, judgments, or settlements made in lieu thereof, for damage to the Property;
(i) Tax Certiorari. All refunds, rebates or credits in connection with a reduction in
real estate taxes and assessments charged against the Property as a result of tax certiorari or any
applications or proceedings for reduction;
0) Conversion. All proceeds of the conversion, voluntary or involuntary, of any of
the foregoing including, without limitation, proceeds of insurance and condemnation awards, into cash or
liquidation claims;
(k) RigbLts. The right, in the name and on behalf of Borrower, to appear in and
defend any action or proceeding brought with respect to the Property and to commence any action or
proceeding to protect the interest of Bank in the Property;
(1) Agreements. All agreements, contracts, certificates, instruments, franchises,
permits, licenses, plans, specifications and other documents, now or hereafter entered into, and all rights
therein and thereto, respecting or pertaining to the use, occupation, construction, management or
operation of the Land and any part thereof and any Improvements or respecting any business or activity
conducted on the Land and any part thereof and all right, title and interest of Borrower therein and
thereunder, including, without limitation, the right, upon the happening of any default hereunder, to
receive and collect any sums payable to Borrower thereunder;
(m) Trademarks. All tradenames, trademarks, servicemarks, logos, copyrights,
goodwill, books and records and all other general intangibles relating to or used in connection with the
operation of the Property; and
(n) Other Rights. Any and all other rights of Borrower in and to the items set forth
in Subsections (a) through (m) above.
Section 1.2 Assienment of Rents. Borrower hereby absolutely and unconditionally assigns
to Bank Borrower's right, title and interest in and to all current and future Leases and Rents; it being
intended by Borrower that this assignment constitutes a present, absolute assignment and not an
assignment for additional security only. Nevertheless, subject to the terms of this Section 1.2 and Section
3.7, Bank grants to Borrower a revocable license to collect and receive the Rents and to treat with tenants
under the terms and provisions of their respective Leases. Borrower shall hold the Rents, the Proceeds and
any sums otherwise received by Borrower under any lease guaranties, letters of credit and any other credit
support given by any guarantor in connection with any of the Leases ("Lease Guaranties"), or a portion of
any thereof sufficient to discharge all current sums due on the Obligations, for use in the payment of such
SUMS.
Section 1.3 Security Agreement. This Security Instrument is both a real property mortgage
and a "security agreement" within the meaning of the Uniform Commercial Code. The Property includes
both real and personal property and all other rights and interests, whether tangible or intangible in nature,
of Borrower in the Property. By executing and delivering this Security Instrument, Borrower hereby
grants to Bank, as security for the Obligations (defined in Section 2.1), a security interest in the Personal
Property to the full extent that the Personal Property may be subject to the Uniform Commercial Code.
Section 1.4 Pled2e of Monies Held. Borrower hereby pledges to Bank any and all monies
now or hereafter held by Bank, including, without limitation, any sums deposited in the Escrow Fund (as
��
defined in Section 3.5), Net Proceeds (as defined in Section 4.2), and condemnation awards or payments
described in Section 4.2, as additional security for the Obligations until expended or applied as provided
in this Security Instrument.
CONDITIONS TO GRANT
TO HAVE AND TO HOLD the above granted and described Property unto and to the use and
benefit of Bank, and the successors and assigns of Bank, forever;
PROVIDED, HOWEVER, these presents are upon the express condition that, if Borrower shall
well and truly pay to Bank the monetary Obligations at the time and in the manner provided in the Bond
and this Security Instrument, shall well and truly perform the other non -monetary Obligations as set forth
in this Security Instrument and shall well and truly abide by and comply with each and every covenant
and condition set forth herein and in the Bond, these presents and the estate hereby granted shall cease,
terminate and be void.
ARTICLE 2 - DEBT AND OBLIGATIONS SECURED
Section 2.1 Obligations. This Security Instrument and the grants, assignments and transfers
made herein are made in consideration of the Bank purchasing the Bond. The obligations of the Borrower
are evidenced and secured by the Bond and the "Collateral Documents," which shall include, but not be
limited to, this Security Instrument, the Resolution, any assignment of leases and rents, and all
instruments and agreements relating in any way to the foregoing, and any amendment, modification or
supplement, from time to time, to any of the foregoing. The Borrower's obligations for the payment and
performance of the aforementioned obligations and the performance of the other obligations hereunder
shall be referred to collectively herein as the "Obligations." As used herein, "Documents" means the
Bond and the Collateral Documents.
Section 2.2 Payments. Unless payments are made in the required amount in immediately
available funds at the place provided in the Documents, remittances in payment of all or any part of the
Obligations shall not, regardless of any receipt or credit issued therefor, constitute payment until the
required amount is actually received by Bank in funds immediately available at the place provided in the
Documents (or any other place as any Mortgagee may have established by delivery of written notice
thereof to the Borrower) and shall be made and accepted subject to the condition that any check or draft
may be handled for collection in accordance with the practice of the collecting bank or banks. Acceptance
by any Mortgagee of any payment in an amount less than the amount then due shall be deemed an
acceptance on account only, and the failure to pay the entire amount then due shall be and continue to be
an Event of Default (defined below). The Borrower will pay the Obligations at the time and in the manner
provided in the Documents.
ARTICLE 3 - BORROWER COVENANTS
Borrower covenants and agrees that:
Section 3.1 Payment of Obligations. Borrower will pay the Obligations at the time and in
the manner provided in the Bond and in this Security Instrument.
Section 3.2 Incorporation by Reference. All the covenants, conditions and agreements
contained in the Documents, which wholly or partially secure or guaranty payment of the Obligations are
hereby made a part of this Security Instrument to the same extent and with the same force as if fully set
forth herein.
4
237
Section 3.3 Insurance. The Borrower will maintain insurance with reputable insurers for the
Property, Improvements and Personal Property in such amounts and against such risks as is customarily
maintained by other entities of similar size engaged in similar business. Copies of all policies of
insurance (or other evidence thereof satisfactory to the Bank) shall have been made available to the Bank
on or before the date of the purchase of the Bond.
Section 3.4 Payment of Taxes, etc. Borrower shall promptly pay all taxes, assessments,
water rates, sewer rents, governmental impositions, and other charges, if any, including without limitation
vault charges and license fees for the use of vaults, chutes and similar areas adjoining the Land, now or
hereafter levied or assessed or imposed against the Property or any part thereof (the "Taxes"), all ground
rents, maintenance charges and similar charges, now or hereafter levied or assessed or imposed against
the Property or any part thereof (the "Other Charges"), and all charges for utility services provided to the
Property as same become due and payable. Borrower will deliver to Bank, promptly upon Bank's request,
evidence satisfactory to Bank that the Taxes, Other Charges and utility service charges have been so paid
or are not then delinquent. Borrower shall not suffer and shall promptly cause to be paid and discharged
any lien or charge whatsoever which may be or become a lien or charge against the Property. Except to
the extent sums sufficient to pay all Taxes and Other Charges have been deposited with Bank in
accordance with the terms of this Security Instrument, Borrower shall furnish to Bank paid receipts for
the payment of the Taxes and Other Charges prior to the date the same shall become delinquent.
Section 3.5 Escrow Fund. Upon the written demand of the Mortgagee, Borrower shall pay
to Bank on the first day of each calendar month (a) one -twelfth of an amount which would be sufficient to
pay the Taxes payable, or estimated by Bank to be payable, during the next ensuing twelve (12) months
and (b) one -twelfth of an amount which would be sufficient to pay the Insurance Premiums due for the
renewal of the coverage afforded by the Policies upon the expiration thereof (the amounts in (a) and (b)
above shall be called the "Escrow Fund"). Borrower agrees to notify Bank immediately of any changes to
the amounts, schedules and instructions for payment of any Taxes and Insurance Premiums of which it
has obtained knowledge and authorizes Bank or its agent to obtain the bills for Taxes and Other Charges
directly from the appropriate taxing authority. The Escrow Fund and the payment of the monetary
Obligations shall be added together and shall be paid as an aggregate sum by Borrower to Bank. Bank
will apply the Escrow Fund to payments of Taxes and Insurance Premiums required to be made by
Borrower pursuant to Sections 3.3 and 3.4 hereof. If the amount of the Escrow Fund shall exceed the
amounts due for Taxes and Insurance Premiums pursuant to Sections 3.3 and 3.4 hereof, Bank shall, in its
discretion, return any excess to Borrower or credit such excess against future payments to be made to the
Escrow Fund. In allocating such excess, Bank may deal with the person shown on the records of Bank to
be the owner of the Property. If the Escrow Fund is not sufficient to pay the items set forth in clauses (a)
and (b) of this Section 3.5 above, Borrower shall promptly pay to Bank, upon demand, an amount which
Bank shall estimate as sufficient to make up the deficiency. The Escrow Fund shall not constitute a trust
fund and may be commingled with other monies held by Bank. No earnings or interest on the Escrow
Fund shall be payable to Borrower.
Section 3.6 Condemnation. Borrower shall promptly give Bank notice of the actual or
threatened commencement of any condemnation or eminent domain proceeding and shall deliver to Bank
copies of any and all papers served in connection with such proceedings. Bank may participate in any
such proceedings, and Borrower shall from time to time deliver to Bank all instruments requested by it to
permit such participation. Borrower shall, at its expense, diligently prosecute any such proceedings, and
shall consult with Bank, its attorneys and experts, and cooperate with them in the carrying on or defense
of any such proceedings. Notwithstanding any taking by any public or quasi -public authority through
eminent domain or otherwise (including but not limited to any transfer made in lieu of or in anticipation
of the exercise of such taking), Borrower shall continue to pay the Obligations at the time and in the
manner provided for its payment in the Documents and the Obligations shall not be reduced until any
5
235
award or payment therefor shall have been actually received and applied by Bank, after the deduction of
expenses of collection, to the reduction or discharge of the Obligations. Bank shall not be limited to the
interest paid on the award by the condemning authority but shall be entitled to receive out of the award
interest at the rate or rates provided herein or in the Documents.
Section 3.7 Leases and Rents.
(a) Except as otherwise consented to by Bank, all Leases shall be written on the
standard form of lease which shall have been approved by Bank. Upon request, Borrower shall furnish
Bank with executed copies of all Leases. No material changes may be made to the Bank -approved
standard lease without the prior written consent of Bank, which such consent shall not be unreasonably
withheld. In addition, all renewals of Leases and all proposed leases shall provide for rental rates and
terms comparable to existing local market rates and terms and shall be arms -length transactions with bona
fide, independent third party tenants. All proposed leases and renewals of existing Leases shall be subject
to the prior approval of Bank and its counsel, which such consent shall not be unreasonably withheld, at
Borrower's expense. All Leases shall provide that they are subordinate to this Security Instrument and
that the lessee agrees to attorn to Bank. Borrower shall (i) observe and perform all the obligations
imposed upon the lessor under the Leases and shall not do or permit to be done anything to impair the
value of the Leases as security for the Obligations; (ii) promptly send copies to Bank of all notices of
default which Borrower shall send or receive thereunder; (iii) enforce all of the terms, covenants and
conditions contained in the Leases upon the part of the lessee thereunder to be observed or performed,
short of termination thereof; (iv) not collect any of the Rents more than one (1) month in advance; (v) not
execute any other assignment of the lessor's interest in the Leases or the Rents; (vi) not alter, modify or
change the terms of the Leases without the prior written consent of Bank, or cancel or terminate the
Leases or accept a surrender thereof or convey or transfer or suffer or permit a conveyance or transfer of
the Land or of any interest therein so as to effect a merger of the estates and rights of, or a termination or
diminution of the obligations of, lessees thereunder; (vii) not alter, modify or change the terms of any
guaranty, letter of credit or other credit support with respect to the Leases (the "Lease Guaranty") or
cancel or terminate such Lease Guaranty without the prior written consent of Bank; and (viii) not consent
to any assignment of or subletting under the Leases not in accordance with their terms, without the prior
written consent of Bank.
(b) To the extent permitted by law and upon the written demand of the Mortgagee,
Borrower shall promptly deposit with Bank any and all monies representing security deposits under the
Leases, whether or not Borrower actually received such monies (the "Security Deposits"). Bank shall hold
the Security Deposits in accordance with the terms of the respective Lease, and shall only release the
Security Deposits in order to return a tenant's Security Deposit to such tenant if such tenant is entitled to
the return of the Security Deposit under the terms of the Lease and is not otherwise in default under the
Lease. To the extent required by Applicable Laws (defined below), Bank shall hold the Security Deposits
in an interest bearing account selected by Bank in its sole discretion. In the event Bank is not permitted by
law to hold the Security Deposits, Borrower shall deposit the Security Deposits into an account with a
federally insured institution as approved by Bank.
Section 3.8 Maintenance of Proyerty. Borrower shall cause the Property to be maintained
in a good and safe condition and repair. The Improvements and the Personal Property shall not be
removed, demolished or materially altered (except for normal replacement of the Personal Property)
without the consent of Bank. Borrower shall promptly repair, replace or rebuild any part of the Property
which may be destroyed by any casualty, or become damaged, worn or dilapidated or which may be
affected by any proceeding of the character referred to in Section 3.6 hereof and shall complete and pay
for any structure at any time in the process of construction or repair on the Land. Borrower shall not
initiate, join in, acquiesce in, or consent to any change in any private restrictive covenant, zoning law or
6
23.3 .
other public or private restriction, limiting or defining the uses which may be made of the Property or any
part thereof. If under applicable zoning provisions the use of all or any portion of the Property is or shall
become a nonconforming use, Borrower will not cause or permit the nonconforming use to be
discontinued or abandoned without the express written consent of Bank.
Section 3.9 Waste. Borrower shall not commit or suffer any waste of the Property or make
any change in the use of the Property which will in any way materially increase the risk of fire or other
hazard arising out of the operation of the Property, or take any action that might invalidate or give cause
for cancellation of any Policy, or do or permit to be done thereon anything that may in any way impair the
value of the Property or the security of this Security Instrument.
Section 3.10 Compliance With Laws. (a) Borrower shall promptly comply with all existing
and future federal, state and local laws, orders, ordinances, governmental rules and regulations or court
orders affecting the Property, or the use thereof including, but not limited to, the Americans with
Disabilities Act ("ADA") (collectively, the "Applicable Laws"), as well as with all indentures, mortgages,
deeds of trust, agreements or other instruments or contractual obligations to which it is a party or by
which it or any of its property may be bound or affected.
(b) Borrower shall from time to time, upon Bank's request, provide Bank with
evidence satisfactory to Bank that the Property complies with all Applicable Laws or is exempt from
compliance with Applicable Laws.
(c) Notwithstanding any provisions set forth herein or in any document regarding
Bank's approval of alterations of the Property, Borrower shall not alter the Property in any manner which
would increase Borrower's responsibilities for compliance with Applicable Laws without the prior written
approval of Bank. Bank's approval of the plans, specifications, or working drawings for alterations of the
Property shall create no responsibility or liability on behalf of Bank for their completeness, design,
sufficiency or their compliance with Applicable Laws. The foregoing shall apply to tenant improvements
constructed by Borrower or by any of its tenants. Bank may condition any such approval upon receipt of a
certificate of compliance with Applicable Laws from an independent architect, engineer, or other person
acceptable to Bank.
(d) Borrower shall give prompt notice to Bank of the receipt by Borrower of any
notice related to a violation of any Applicable Laws and of the commencement of any proceedings or
investigations which relate to compliance with Applicable Laws.
(e) Borrower will take appropriate measures to prevent and will not engage in or
knowingly permit any illegal activities at the Property.
Section 3.11 Books and Records.
(a) Borrower shall keep adequate books and records of account in accordance with
GAAP or in accordance with other methods acceptable to Bank in its sole discretion, consistently applied
and furnish to Bank:
(b) Upon request from Bank, Borrower shall furnish to Bank an accounting of all
security deposits held in connection with any Lease of any part of the Property, including the name and
identification number of the accounts in which such security deposits are held, the name and address of
the financial institutions in which such security deposits are held and the name of the person to contact at
such financial institution, along with any authority or release necessary for Bank to obtain information
regarding such accounts directly from such financial institutions.
7
231.
(c) Borrower shall furnish Bank with such other additional financial or management
information as may, from time to time, be required by Bank in form and substance satisfactory to Bank.
(d) Borrower shall furnish to Bank and its agents convenient facilities for the
examination and audit of any such books and records. Within a reasonable time after request by Bank,
Borrower shall provide any other information with respect to the Property and the financial condition of
Borrower as Bank may from time to time request.
(e) The Borrower shall use its commercially reasonable best efforts to cause the
following to be furnished to the Bank promptly, but in any event within thirty (30) days following the
completion of the same: (i) the audited comprehensive annual financial reports (CAFR) of the City of
Fairhope (the "City"), (ii) the annual budget of the City, and (iii) upon the written request of the Bank,
copies of the semi-annual financial reports of the City that are presented to the Mayor and City Council of
the City.
(f) The Borrower shall use its commercially reasonable best efforts to cause the City
to renew the Appropriation Agreement while the Bond is outstanding.
Section 3.12 Payment For Labor and Materials. Borrower will promptly pay when due all
bills and costs for labor, materials, and specifically fabricated materials incurred in connection with the
Property and never permit to exist beyond the due date thereof in respect of the Property or any part
thereof any lien or security interest, even though inferior to the liens and the security interests hereof, and
in any event never permit to be created or exist in respect of the Property or any part thereof any other or
additional lien or security interest other than the liens or security interests hereof, except for the Permitted
Encumbrances.
Section 3.13 Intentionally Omitted.
Section 3.14 Performance of Other Aereements. Borrower shall observe and perform each
and every term to be observed or performed by Borrower pursuant to the terms of any agreement or
recorded instrument affecting or pertaining to the Property, or given by Borrower to Bank for the purpose
of further securing an obligation secured hereby and any amendments, modifications or changes thereto.
ARTICLE 4 - SPECIAL COVENANTS
Borrower covenants and agrees that:
Section 4.1 Prouerty Use. The Property shall be used only for the purposes described in the
Resolution, and for no other use without the prior written consent of Bank, which consent may be
withheld in Bank's sole and absolute discretion.
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Bank that:
Section 5.1 Warranty of Title. Borrower has good title to the Property and has the right to
mortgage, grant, bargain, sell, pledge, assign, warrant, transfer and convey the same and that Borrower
possesses an unencumbered fee simple absolute estate in the Land and the Improvements and that it owns
the Property free and clear of all liens, encumbrances and charges whatsoever except for Permitted
Encumbrances. Borrower shall forever warrant, defend and preserve the title and the validity and priority
229
of the lien of this Security Instrument and shall forever warrant and defend the same to Bank against the
claims of all persons whomsoever.
Section 5.2 Authority. Borrower (and the undersigned representative of Borrower, if any)
has full power, authority and legal right to execute this Security Instrument, and to mortgage, grant,
bargain, sell, pledge, assign, warrant, transfer and convey the Property pursuant to the terms hereof and to
keep and observe all of the terms of this Security Instrument on Borrower's part to be performed.
Section 5.3 Legal Status and Authority. Borrower (a) is duly organized, validly existing
and in good standing under the laws of its state of organization or incorporation; (b) is duly qualified to
transact business and is in good standing in the State where the Property is located; and (c) has all
necessary approvals, governmental and otherwise, and full power and authority to own the Property and
carry on its business as now conducted and proposed to be conducted. Borrower now has and shall
continue to have the full right, power and authority to operate and lease the Property, to encumber the
Property as provided herein and to perform all of the other obligations to be performed by Borrower
under this Security Instrument and the Documents.
Section 5.4 Validity of Documents. (a) The execution, delivery and performance of this
Security Instrument and the Documents (i) are within the corporate power of Borrower; (ii) have been
authorized by all requisite corporate action; (iii) have received all necessary approvals and consents,
corporate, governmental or otherwise; (iv) will not violate, conflict with, result in a breach of or constitute
(with notice or lapse of time, or both) a default under any provision of law, any order or judgment of any
Governmental Authority, the Organizational Documents of Borrower, or any indenture, agreement or
other instrument to which Borrower is a party or by which it or any of its assets or the Property is or may
be bound or affected; (v) will not result in the creation or imposition of any Lien, whatsoever upon any of
its assets, except the lien and security interest created hereby; and (vi) will not require any authorization
or license from, or any filing with, any Governmental Authority (except for the recordation of this
instrument in appropriate land records in the State where the Property is located and except for Uniform
Commercial Code flings. relating to the security interest created hereby); and (b) this Security Instrument
and the Documents constitute the legal, valid and binding obligations of Borrower.
Section 5.5 Litieation. There is no action, suit or proceeding, judicial, administrative or
otherwise (including any condemnation or similar proceeding), pending or, to the best of Borrower's
knowledge, threatened or contemplated against, or affecting, Borrower, a Guarantor, if any, a Borrower, if
any, or the Property that has not been disclosed to Bank or is not adequately covered by insurance, as
determined by Bank in its sole and absolute discretion.
Section 5.6 Status of Property. (a) No portion of the Improvements is located in an area
identified by the Secretary of Housing and Urban Development or any successor thereto as an area having
special flood hazards pursuant to the National Flood Insurance Act of 1968 or the Flood Disaster
Protection Act of 1973, as amended, or any successor law, or, if located within any such area, Borrower
has obtained and will maintain flood insurance as required by Section 3.3(a) hereof.
(b) Borrower has obtained all necessary certificates, licenses and other approvals,
governmental and otherwise, necessary for the operation of the Property and the conduct of its business
and all required zoning, building code, land use, environmental and other similar permits or approvals, all
of which are in full force and effect as of the date hereof and not subject to revocation, suspension,
forfeiture or modification.
(c) The Property and the present and contemplated use and occupancy thereof are in
full compliance with all Applicable Laws, including, without limitation, zoning ordinances, building
227
codes, land use and environmental laws, laws relating to the disabled (including, but not limited to, the
ADA) and other similar laws.
(d) The Property is served by all utilities required for the current or contemplated use
thereof. All utility service is provided by public utilities and the Property has accepted or is equipped to
accept such utility service.
(e) All public roads and streets necessary for service of and access to the Property
for the current or contemplated use thereof have been completed, are serviceable and all-weather and are
physically and legally open for use by the public. _
(f) The Property is served by public water and sewer systems.
(g) The Property is free from damage caused by fire or other casualty.
(h) All costs and expenses of any and all labor, materials, supplies and equipment
used in the construction of the Improvements have been paid in full.
(i) Borrower has paid in full for, and is the owner of, all furnishings, fixtures and
equipment (other than tenants' property) used in connection with the operation of the Property, free and
clear of any and all security interests, liens or encumbrances, except the lien and security interest created
hereby.
0) All liquid and solid waste disposal, septic and sewer systems located on the
Property are in a good and safe condition and repair and in compliance with all Applicable Laws.
(k) All Improvements lie within the boundary of the Land.
Section 5.7 Separate Tax Lot. The Property is assessed for real estate tax purposes as one
or more wholly independent tax lot or lots, separate from any adjoining land or improvements not
constituting a part of such lot or lots, and no other land or improvements is assessed and taxed together
with the Property or any portion thereof.
Section 5.8 Leases.
(a) Borrower is the sole owner of the entire lessor's interest in the Leases;
(b) the Leases are valid and enforceable; (c) the terms of all alterations,
modifications and amendments to the Leases are reflected in the certified occupancy statement delivered
to and approved by Bank; (d) none of the Rents reserved in the Leases have been assigned or otherwise
pledged or hypothecated; (e) none of the Rents have been collected for more than one (1) month in
advance; (f) the premises demised under the Leases have been completed and the tenants under the Leases
have accepted the same and have taken possession of the same on a rent -paying basis; (g) there exist no
offsets or defenses to the payment of any portion of the Rents; (h) no Lease contains an option to
purchase, right of first refusal to purchase, or any other similar provision; (i) no person or entity has any
possessory interest in, or right to occupy, the Property except under and pursuant to a Lease; 0) each
Lease is subordinate to this Security Instrument, either pursuant to its terms or a recorded subordination
agreement; and (k) no Lease has the benefit of a non -disturbance agreement that would be considered
unacceptable to prudent institutional Banks.
10
225
Section 5.9 Disclosure. Borrower has disclosed to Bank all material facts and has not failed
to disclose any material fact that could cause any representation or warranty made herein to be materially
misleading.
ARTICLE 6 - OBLIGATIONS AND RELIANCES
Section 6.1 Relationship of Borrower and Bank. The relationship between Borrower and
Bank is solely that of debtor and creditor, and Bank has no fiduciary or other special relationship with
Borrower, and no term or condition of any of this Security Instrument and the Documents shall be
construed so as to deem the relationship between Borrower and Bank to be other than that of debtor and
creditor.
Section 6.2 No Reliance on Bank. The Borrower is experienced in the ownership and
operation of properties similar to the Property, and Borrower and Bank are relying solely upon such
expertise and business plan in connection with the ownership and operation of the Property. Borrower is
not relying on Bank's expertise, business acumen or advice in connection with the Property.
Section 6.3 No Bank Obligations.
(a) Notwithstanding the provisions of Subsections 1.1(f) and 1.1(1) or Section 3.7,
Bank is not undertaking the performance of (i) any obligations under the Leases; or (ii) any obligations
with respect to such agreements, contracts, certificates, instruments, franchises, permits, trademarks,
licenses and other documents.
(b) By accepting or approving anything required to be observed, performed or
fulfilled or to be given to Bank pursuant to this Security Instrument or the Documents, including without
limitation, any officer's certificate, balance sheet, statement of profit and loss or other financial statement,
survey, appraisal, or insurance policy, Bank shall not be deemed to have warranted, consented to, or
affirmed the sufficiency, the legality or effectiveness of same, and such acceptance or approval thereof
shall not constitute any warranty or affirmation with respect thereto by Bank.
Section 6.4 Reliance. Borrower recognizes and acknowledges that in accepting this Security
Instrument and the Documents, Bank is expressly and primarily relying on the truth and accuracy of the
warranties and representations set forth in Article 5 without any obligation to investigate the Property and
notwithstanding any investigation of the Property by Bank; that such reliance existed on the part of Bank
prior to the date hereof; that the warranties and representations are a material inducement to Bank in
accepting this Security Instrument and the Documents; and that Bank would not be willing to purchase
the Bond and accept this Security Instrument in the absence of the warranties and representations as set
forth in Article 5.
ARTICLE 7 - FURTHER ASSURANCES
Section 7.1 Recording of Security Instrument, etc. For purposes of this Mortgage a
"Recordable Event" shall be defined to include any of the following: (i) any period on or after which the
governing body of the City of Fairhope takes action to elect not to renew the Appropriation Agreement;
(ii) any period that the Appropriation Agreement ceases to be in effect while the Bond is outstanding, or
(iii) default in the payment of principal of or interest on the Bond when due, and the continuation of such
default for a period of ten (10) days after there has been given notice of such default to the Borrower.
Upon a Recordable Event the Bank shall have the right to cause this Security Instrument and any of the
Documents creating a lien or security interest or evidencing the lien hereof upon the Property and each
instrument of further assurance to be filed, registered or recorded in such manner and in such places as
11
223
may be required by any present or future law in order to publish notice of and fully to protect and perfect
the lien or security interest hereof upon, and the interest of Bank in, the Property. The Bank hereby
covenants and agrees to hold this Mortgage in escrow and not to file and record the same until the
occurrence of a Recordable Event. In the event the Bank (including its successors and permitted assigns)
no longer is the holder of the Bond, the Bank shall promptly return this mortgage to the Borrower.
Borrower will pay all taxes, filing, registration or recording fees, and all expenses incident to the
preparation, execution, acknowledgment and/or recording of this Security Instrument, the Documents,
any note or mortgage supplemental hereto, any security instrument with respect to the Property and any
instrument of further assurance, and any modification or amendment of the foregoing documents, and all
federal, state, county and municipal taxes, duties, imposts, assessments and charges arising out of or in
connection with the execution and delivery of this Security Instrument, any mortgage supplemental
hereto, any security instrument with respect to the Property or any instrument of further assurance, and
any modification or amendment of the foregoing documents, except where prohibited by law so to do.
Section 7.2 Further Acts, etc. Upon a Recordable Event the Borrower will, at the cost of
the Borrower, furnish the Bank with such due diligence information concerning the Property as is
customary in a commercial real estate transaction, which information shall include an appraisal, title
commitment and insurance policy, an ALTA survey, and an environmental site assessment, all in the form
and substance acceptable to the Bank. Borrower will, at the cost of Borrower, and without expense to
Bank, do, execute, acknowledge and deliver all and every such further acts, deeds, conveyances,
mortgages, assignments, notices of assignments, transfers and assurances as Bank shall, from time to
time, require, for the better assuring, conveying, assigning, transferring, and confirming unto Bank the
property and rights hereby mortgaged, granted, bargained, sold, conveyed, confirmed, pledged, assigned,
warranted and transferred or intended now or hereafter so to be, or which Borrower may be or may
hereafter become bound to convey or assign to Bank, or for carrying out the intention or facilitating the
performance of the terms of this Security Instrument or for filing, registering or recording this Security
Instrument, or for complying with all Applicable Laws. Borrower, on demand, will execute and deliver
and hereby authorizes Bank to execute in the name of Borrower or without the signature of Borrower to
the extent Bank may lawfully do so, one or more financing statements, chattel mortgages or other
instruments, to evidence more effectively the security interest of Bank in the Property. Borrower grants to
Bank an irrevocable power of attorney coupled with an interest for the purpose of exercising and
perfecting any and all rights and remedies available to Bank at law and in equity, including without
limitation such rights and remedies available to Bank pursuant to this Section 7.2.
Section 7.3 Changes in Tax, Obligations, Credit and Documentary Stamp Laws.
(a) If any law is enacted or adopted or amended after the date of this Security
Instrument which deducts the monetary Obligations from the value of the Property for the purpose of
taxation or which imposes a tax, either directly or indirectly, on the Obligations or Bank's interest in the
Property, Borrower will pay the tax, with interest and penalties thereon, if any. If Bank is advised by
counsel chosen by it that the payment of tax by Borrower would be unlawful or taxable to Bank or
unenforceable or provide the basis for a defense of usury, then Bank shall have the option by written
notice of not less than ninety (90) days to declare the Obligations immediately due and payable.
(b) Borrower will not claim or demand or be entitled to any credit or credits on
account of the Obligations for any part of the Taxes or Other Charges assessed against the Property, or
any part thereof, and no deduction shall otherwise be made or claimed from the assessed value of the
Property, or any part thereof, for real estate tax purposes by reason of this Security Instrument or the
Obligations. If such claim, credit or deduction shall be required by law, Bank shall have the option, by
written notice of not less than ninety (90) days, to declare the Obligations immediately due and payable.
12
221
(c) If at any time the United States of America, any State thereof or any subdivision
of any such State shall require revenue or other stamps to be affixed to this Security Instrument, or any of
the Documents or impose any other tax or charge on the same, Borrower will pay for the same, with
interest and penalties thereon, if any.
Section 7.4 Estoppel Certificates.
(a) The Borrower, within ten (10) days after its receipt of a written request by the
Bank, at Borrower's expense, will furnish the Bank with a statement, duly acknowledged and defined,
setting forth the amount of the Obligations and the offsets or defenses thereto, if any.
(b) Borrower shall deliver to Bank, promptly upon request, duly executed estoppel
certificates from any one or more lessees as required by Bank attesting to such facts regarding the Lease
as Bank may require, including but not limited to attestations that each Lease covered thereby is in full
force and effect with no defaults thereunder on the part of any party, that none of the Rents have been
paid more than one month in advance, that the lessee claims no defense or offset against the full and
timely performance of its obligations under the Lease and such other facts the Bank shall reasonably
require to be included in such estoppel certificates.
Section 7.5 Replacement Documents. Upon receipt of an affidavit of an officer of Bank as
to the loss, theft, destruction or mutilation of this Security Instrument or any Other Security Document
which is not of public record, and, in the case of any such mutilation, upon surrender and cancellation of
this Security Instrument or Other Security Document, Borrower will issue, in lieu thereof, a replacement
Other Security Document, dated the date of such lost, stolen, destroyed or mutilated Other Security
Document in the same principal amount thereof and otherwise of like tenor.
ARTICLE 8 - DUE ON SALE/ENCUMBRANCE
Section 8.1 Bank Reliance. Borrower acknowledges that Bank has examined and relied on
the experience of Borrower in owning and operating properties such as the Property in agreeing to
purchase the Bond, and will continue to rely on Borrower's ownership of the Property as a means of
maintaining the value of the Property as security for payment and performance of the Obligations.
Section 8.2 No Sale/Encumbrance. Borrower agrees that Borrower shall not sell, convey,
mortgage, grant, bargain, encumber, pledge, assign, or otherwise transfer the Property or any part thereof
or permit the Property or any part thereof to be sold, conveyed, mortgaged, granted, bargained,
encumbered, pledged, assigned, or otherwise transferred, except with respect to the rights of the City set
forth under that certain Agreement for Sale and Purchase dated of event date with the Bond (as such
agreement is in effect upon the date of issuance and delivery of the Bond to the Bank), between the City
and the Authority (under which the rights of the City are expressly subordinate to the rights of the Bank
hereunder).
ARTICLE 9 - DEFAULT
Section 9.1 Events of Default. The occurrence of any one or more of the following events
shall constitute an "Event of Default":
(a) if any portion of the Obligations is not paid within ten (10) days of the due date;
13
219
(b) if any of the Taxes or Other Charges is not paid when the same is due and
payable except to the extent sums sufficient to pay such Taxes and Other Charges have been deposited
with Bank in accordance with the terms of this Security Instrument;
(c) if the Policies are not kept in full force and effect, or if the Policies are not
delivered to Bank upon request or Borrower has not delivered evidence of the renewal of the Policies
thirty (30) days prior to their expiration as provided in Section 3.3(b);
(d) if Borrower violates or does not comply with any of the provisions of Section 3.7
or Articles 8, 11 or 12;
(e) if any representation or warranty of Borrower or any portion thereof or
performance by Borrower of any of the terms of this Security Instrument made herein or any guaranty, or
in any certificate, report, financial statement or other instrument or document furnished to Bank shall
have been false or misleading in any material respect when made;
(f) if (i) Borrower shall commence any case, proceeding or other action (A) under
any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, conservatorship or relief of debtors, seeking to have an order for relief entered with
respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding -up, liquidation, dissolution, composition or other relief with respect to it or its
Obligations, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar
official for it or for all or any substantial part of its assets, or Borrower shall make a general assignment
for the benefit of its creditors; or (ii) there shall be commenced against Borrower any case, proceeding or
other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief
or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a
period of sixty (60) days; or (iii) there shall be commenced against Borrower any case, proceeding or
other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all
or any substantial part of its assets which results in the entry of any order for any such relief which shall
not have been vacated, discharged, or stayed or bonded pending appeal within sixty (60) days from the
entry thereof; or (iv) Borrower shall take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) Borrower
shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its Obligations as
they become due;
(g) if Borrower shall be in default under any other mortgage, deed of trust, deed to
secure Obligations or other security agreement covering any part of the Property whether it be superior or
junior in lien to this Security Instrument;
(h) if the Property becomes subject to a Lien and the lien shall remain undischarged
of record (by payment, bonding or otherwise) for a period of thirty (30) days except for Permitted
Encumbrances;
(i) if any Federal tax lien is filed against the Property and same is not discharged of
record within thirty (30) days after same is filed except for Permitted Encumbrances;
0) if Borrower consummates a transaction which would cause this Security
Instrument or Bank's exercise of its rights under this Security Instrument or the Documents to constitute a
nonexempt prohibited transaction under ERISA or result in a violation of a state statute regulating
governmental plans, subjecting Bank to liability for a violation of ERISA or a state statute;
14
217
(k) if any default occurs under any guaranty or indemnity executed in connection
herewith and such default continues after the expiration of applicable grace periods, if any;
(1) if for more than ten (10) days after notice from Bank, Borrower shall continue to
be in default under any other term, covenant or condition of this Security Instrument or the Documents in
the case of any default which can be cured by the payment of a sum of money or for thirty (30) days after
notice from Bank in the case of any other default, provided that if such default cannot reasonably be cured
within such thirty (30) day period and Borrower shall have commenced to cure such default within such
thirty (30) day period and thereafter diligently and expeditiously proceeds to cure the same, such thirty
(30) day period shall be extended for so long as it shall require Borrower in the exercise of due diligence
to cure such default, it being agreed that no such extension shall be for a period in excess of sixty (60)
days;
ARTICLE 10 - RIGHTS AND REMEDIES
Section 10.1 Remedies. Upon or at anytime after the occurrence of any Event of Default,
Borrower agrees that Bank may take such action, without notice or demand, as it deems advisable to
protect and enforce its rights against Borrower and in and to the Property, including, but not limited to,
the following actions, each of which may be pursued concurrently or otherwise, at such time and in such
order as Bank may determine, in its sole discretion, without impairing or otherwise affecting the other
rights and remedies of Bank:
(a) declare the entire unpaid Obligations to be immediately due and payable;
(b) by civil action, mandamus or other proceeding enforce payment of such principal
or interest and compel performance of all duties of the Borrower and officers of the Borrower and shall be
entitled as a matter of right and regardless of the sufficiency of any security to the appointment of a
receiver with all the powers of such receiver for the operation and maintenance of the Property and the
collection, segregation and application of rents therefrom;
(c) institute an action, suit or proceeding in equity for the specific performance of
any covenant, condition or agreement contained herein, in the Documents;
(d) the license granted to Borrower in Section 1.2 of this Security Instrument shall
automatically be revoked, and Mortgagee shall immediately be entitled to possession of all Rents,
Proceeds and any and all sums due under any Lease Guaranties, whether or not Mortgagee enters upon or
takes control of the Property. In addition, Mortgagee may, at its option, without waiving such Event of
Default, without notice and without regard to the adequacy of the security for the Obligations, either in
person or by agent, nominee or attorney, with or without bringing any action or proceeding, or by a
receiver appointed by a court, dispossess Borrower and its agents and servants from the Property, without
liability for trespass, damages or otherwise and exclude Borrower and its agents or servants wholly
therefrom, and take possession of the Property and all books, records and accounts relating thereto and
have, hold, manage, lease and operate the Property on such terms and for such period of time as
Mortgagee may deem proper and either with or without taking possession of the Property in its own
name, demand, sue for or otherwise collect and receive all Rents, Proceeds and sums due under all Lease
Guaranties, including those past due and unpaid with full power to make from time to time all alterations,
renovations, repairs or replacements thereto or thereof as may seem proper to Mortgagee and may apply
the Rents, Proceeds and any sums received pursuant to any Lease Guaranties to the payment of the
following in such order and proportion as Mortgagee in its sole discretion may determine, any law,
custom or use to the contrary notwithstanding: (i) all expenses of managing and securing the Property,
including, without limitation, the salaries, fees and wages of a managing agent and such other employees,
15
215
contractors, or agents as Mortgagee may deem necessary or desirable and all expenses of operating and
maintaining the Property, including, without being limited thereto, all taxes, charges, claims, assessments,
water charges, sewer rents and any other liens, and premiums for all insurance which Mortgagee may
deem necessary or desirable, and the cost of all alterations, renovations, repairs or replacements, and all
expenses incident to taking and retaining possession of the Property; and (ii) the Obligations, together
with all costs and reasonable attorneys' fees. In addition, upon the occurrence of a Event of Default,
Mortgagee, at its option, may (A) complete any construction on the Property in such manner and form as
Mortgagee deems advisable, (B) exercise all rights and powers of Borrower, including, without limitation,
the right to negotiate, execute, cancel, enforce or modify Leases, obtain and evict tenants, and demand,
sue for, collect and receive all Rents, Proceeds and all sums due under any Lease Guaranties, (C) either
require Borrower to pay monthly in advance to Mortgagee, or any receiver appointed to collect the Rents,
the fair and reasonable rental value for the use and occupancy of such part of the Property as may be in
possession of Borrower or (D) require Mortgagee to vacate and surrender possession of the Property to
Mortgagee or to such receiver and, in default thereof, Borrower may be evicted by summary proceedings
or otherwise;
(e) exercise any and all rights and remedies granted to a secured party upon default
under the Uniform Commercial Code, including, without limiting the generality of the foregoing: (i) the
right to take possession of the Personal Property or any part thereof, and to take such other measures as
Bank may deem necessary for the care, protection and preservation of the Personal Property, and (ii)
request Borrower at its expense to assemble the Personal Property and make it available to Bank at a
convenient place acceptable to Bank. Any notice of sale, disposition or other intended action by Bank
with respect to the Personal Property sent to Borrower in accordance with the provisions hereof at least
five (5) days prior to such action, shall constitute commercially reasonable notice to Borrower;
(f) apply any sums then deposited in the Escrow Fund and any other sums held in
escrow or otherwise by Bank in accordance with the terms of this Security Instrument or any Other
Security Document to the payment of the following items in any order in its uncontrolled discretion:
(x) Taxes and Other Charges;
(y) Insurance Premiums; and t
(z) All other sums payable pursuant to this Security Instrument and the
Documents, including without limitation advances made by Bank pursuant to the terms of this Security
Instrument;
(g) surrender the Policies maintained pursuant to Article 3 hereof, collect the
unearned Insurance Premiums and apply such sums as a credit on the Obligations in such priority and
proportion as Bank in its discretion shall deem proper, and in connection therewith, Borrower hereby
appoints Bank as agent and attorney -in -fact (which is coupled with an interest and is therefore
irrevocable) for Borrower to collect such Insurance Premiums;
(h) pursue such other remedies as Bank may have under applicable law; or
(i) apply the undisbursed balance of any Net Proceeds Deficiency deposit, together
with interest thereon, to the payment of the Obligations in such order, priority and proportions as Bank
shall deem to be appropriate in its discretion.
16
213
Notwithstanding the provisions of this Section 10.1 to the contrary, if any Event of Default as
described in Section 9.1(f) shall occur, the entire unpaid Obligations shall be automatically due and
payable, without any further notice, demand or other action by Bank.
Section 10.2 Application of Proceeds. The purchase money, proceeds and avails of any
disposition of the Property, or any part thereof, or any other sums collected by Bank pursuant this
Security Instrument or the Documents, may be applied by Bank to the payment of the Obligations in such
priority and proportions as Bank in its discretion shall deem proper.
Section 10.3 Right to Cure Defaults. Upon the occurrence of any Event of Default or if
Borrower fails to make any payment or to do any act as herein provided, Bank may, but without any
obligation to do so and without notice to or demand on Borrower and without releasing Borrower from
any obligation hereunder, make or do the same in such manner and to such extent as Bank may deem
necessary to protect the security hereof. Bank is authorized to enter upon the Property for such purposes,
or appear in, defend, or bring any action or proceeding to protect its interest in the Property or to foreclose
this Security Instrument or collect the Obligations, and the cost and expense thereof (including reasonable
attorneys' fees to the extent permitted by law), with interest as provided in this Section 10.3, shall
constitute a portion of the Obligations and shall be due and payable to Bank upon demand. All such costs
and expenses incurred by Bank in remedying such Event of Default or such failed payment or act or in
appearing in, defending, or bringing any such action or proceeding shall bear interest at the rate of interest
in effect for the Bond (the "Bond Interest Rate"), for the period after notice from Bank that such cost or
expense was incurred to the date of payment to Bank. All such costs and expenses incurred by Bank
together with interest thereon calculated at the Bond Interest Rate shall be deemed to constitute a portion
of the Obligations and be secured by this Security Instrument and the Documents and shall be
immediately due and payable upon demand by Bank therefor.
Section 10.4 Actions and Proceedings. Bank has the right to appear in and defend any action
or proceeding brought with respect to the Property and to bring any action or proceeding, in the name and
on behalf of Borrower, which Bank, in its discretion, decides should be brought to protect its interest in
the Property.
Section 10.5 Recovery of Sums Required To Be Paid. Bank shall have the right from time
to time to take action to recover any sum or sums which constitute a part of the Obligations as the same
become due, without regard to whether or not the balance of the Obligations shall be due, and without
prejudice to the right of Bank thereafter to bring an action of foreclosure, or any other action, for a default
or defaults by Borrower existing at the time such earlier action was commenced.
Section 10.6 Examination of Books and Records. Bank, its agents, accountants and
attorneys shall have the right to examine the records, books, management and other papers of Borrower
which reflect upon its financial condition, at the Property or at any office regularly maintained by
Borrower where the books and records are located. Bank and its agents shall have the right to make
copies and extracts from the foregoing records and other papers. In addition, Bank, its agents, accountants
and attorneys shall have the right to examine and audit the books and records of Borrower pertaining to
the income, expenses and operation of the Property during reasonable business hours at any office of
Borrower where the books and records are located. This Section 10.6 shall apply without regard to
whether an Event of Default has occurred or is continuing.
Section 10.7 Other Riahts, etc.
(a) The failure of Bank to insist upon strict performance of any term hereof shall not
be deemed to be a waiver of any term of this Security Instrument. Borrower shall not be relieved of
17
211
Borrower's obligations hereunder by reason of (i) the failure of Bank to comply with any request of
Borrower to take any action to foreclose this Security Instrument or otherwise enforce any of the
provisions hereof or of the Documents, (ii) the release, regardless of consideration, of the whole or any
part of the Property, or of any person liable for the Obligations or any portion thereof, or (iii) any
agreement or stipulation by Bank extending the time of payment or otherwise modifying or
supplementing the terms of this Security Instrument or the Documents.
(b) It is agreed that the risk of loss or damage to the Property is on Borrower, and
Bank shall have no liability whatsoever for decline in value of the Property, for failure to maintain the
Policies, or for failure to determine whether insurance in force is adequate as to the amount of risks
insured. Possession by Bank shall not be deemed an election of judicial relief, if any such possession is
requested or obtained, with respect to any Property or collateral not in Bank's possession.
(c) Bank may resort for the payment of the Obligations to any other security held by
Bank in such order and manner as Bank, in its discretion, may elect. Bank may take action to recover the
Obligations, or any portion thereof, or to enforce any covenant hereof without prejudice to the right of
Bank thereafter to foreclose this Security Instrument. The rights of Bank under this Security Instrument
shall be separate, distinct and cumulative and none shall be given effect to the exclusion of the others. No
act of Bank shall be construed as an election to proceed under any one provision herein to the exclusion
of any other provision. Bank shall not be limited exclusively to the rights and remedies herein stated but
shall be entitled to every right and remedy now or hereafter afforded at law or in equity.
Section 10.8 Rieht to Release Any Portion of the Property. Bank may release any portion
of the Property for such consideration as Bank may require without, as to the remainder of the Property,
in any way impairing or affecting the lien or priority of this Security Instrument, or improving the
position of any subordinate lienholder with respect thereto, except to the extent that the obligations
hereunder shall have been reduced by the actual monetary consideration, if any, received by Bank for
such release, and may accept by assignment, pledge or otherwise any other property in place thereof as
Bank may require without being accountable for so doing to any other lienholder. This Security
Instrument shall continue as a lien and security interest in the remaining portion of the Property.
Section 10.9 Violation of Laws. If the Property is not in compliance with Applicable Laws,
Bank may impose additional requirements upon Borrower in connection herewith including, without
limitation, monetary reserves or financial equivalents.
Section 10.10 Recourse and Choice of Remedies. Notwithstanding any other provision of this
Security Instrument, including but not limited to Article 14 hereof, Bank and other Indemnified Parties
(defined in Section 13.1 below) are entitled to enforce the obligations of Borrower contained in Sections
12.2 and 12.3 and 12.4 without first resorting to or exhausting any security or collateral and without first
having recourse to any of the Property, through foreclosure or acceptance of a deed in lieu of foreclosure
or otherwise, and in the event Bank commences a foreclosure action against the Property, Bank is entitled
to pursue a deficiency judgment with respect to such obligations against Borrower. Notwithstanding the
foregoing, nothing herein shall inhibit or prevent Bank from foreclosing pursuant to this Security
Instrument or exercising any other rights and remedies pursuant to this Security Instrument and the
Documents, whether simultaneously with foreclosure proceedings or in any other sequence. A separate
action or actions may be brought and prosecuted against Borrower, whether or not action is brought
against any other person or entity or whether or not any other person or entity is joined in the action or
actions. In addition, Bank shall have the right but not the obligation to join and participate in, as a party if
it so elects, any administrative or judicial proceedings or actions initiated in connection with any matter
addressed in Article 11 or Section 12.4.
18
-209
Section 10.11 Right of Entry. Bank and its agents shall have the right to enter and inspect the
Property at all reasonable times.
ARTICLE 11- ENVIRONMENTAL HAZARDS
Section 11.1 Environmental Representations and Warranties. To the best of Borrower's
knowledge, after due inquiry, (a) there are no Hazardous Substances or underground storage tanks in, on,
or under the Property, except those that are both (i) in compliance with all Environmental Laws including
all permits issued pursuant thereto and (ii) fully disclosed to Bank in the written report(s) resulting from
the environmental assessment(s) of the Property delivered to Bank; (b) there are no past, present or
threatened Releases of Hazardous Substances in, on, under or from the Property except as described in the
Environmental Report; (c) there is no threat of any Release of Hazardous Substances migrating to the
Property except as described in the Environmental Report; (d) there is no past or present non-compliance
with Environmental Laws, including permits issued pursuant thereto, in connection with the Property,
except as described in the Environmental Report; (e) Borrower does not know of, and has not received,
any written or oral notice or other communication relating to Hazardous Substances or remediation of the
Property, alleging possible liability or commencing or threatening administrative or judicial proceedings
pursuant to any Environmental Law in connection with the Property, and (f) Borrower has truthfully and
fully provided to Bank, in writing, any and all information relating to conditions in, on, under or from the
Property that is known to Borrower relating to Hazardous Substances in, on, under or from the Property
and/or to the environmental condition of the Property.
Section 11.2 Omitted.
Section 11.3 Bank's Rights/Cooperation and Access. The Bank and any other person or
entity designated by Bank (including but not limited to any receiver, any representative of a governmental
entity and any environmental consultant), shall have the right but not the obligation to enter upon the
Property at all reasonable times to assess any and all aspects of the environmental condition of the
Property and its use, including but not limited to conducting any environmental assessment or audit (the
scope of which shall be determined in Bank's sole and absolute discretion) and taking samples of soil,
groundwater or other water, air or building materials, and conducting other invasive testing. Borrower
shall cooperate with and provide access to such Persons and any such person or entity designated by
Bank.
Section 11.4 Definitions. Capitalized terms used in this Article 11 of the Security
Instrument and not otherwise defined herein shall have the meanings ascribed to them in this
Section 11.4. "Environmental Laws" means all federal, state and local laws, statutes, rules,
regulations, ordinances, programs, permits, guidances, orders ,and consent decrees relating to
health, safety and environmental matters applicable to the Borrower and its business, assets and
property, including, without limitation, the Resource Conservation and Recovery Act, 42 U.S.C.
§ 6901 et SeMc ., as amended; CERCLA; the Toxic Substance Act, 15 U.S.C. § 2601 et seg., as
amended; the Clean Water Act, 33 U.S.C. § 466 et Le ., as amended; the Clean Air Act, 42
U.S.C. § 7401 et seq., as amended; state and federal superlien and environmental cleanup
programs; and U. S. Department of Transportation regulations. "Hazardous Substance" means,
but is not limited to, hazardous substances, materials, wastes, and waste constituents and reaction
by-products, pesticides, oil and other petroleum products, and toxic substances, including,
without limitation, asbestos and PCBs, as those terms are defined pursuant to Environmental
Laws. "Release" means any release, deposit, discharge, emission, leaking, leaching, spilling,
19
207
seeping, migrating, injecting, pumping, pouring, emptying, escaping, dumping, disposing or
other movement of Hazardous Substances.
ARTICLE 12 - INDEMNIFICATION
Section 12.1 General Indemnification. Borrower shall, at its sole cost and expense, protect,
defend, indemnify, release and hold harmless the Indemnified Parties from and against any and all claims,
suits, liabilities (including, without limitation, strict liabilities), actions, proceedings, obligations,
Obligations, damages, losses, costs, expenses, diminutions in value, fines, penalties, charges, fees,
expenses, judgments, awards, amounts paid in settlement, punitive damages, foreseeable and
unforeseeable consequential damages, of whatever kind or nature (including but not limited to attorneys'
fees and other costs of defense) (the "Losses") imposed upon or incurred by or asserted against any
Indemnified Parties and directly or indirectly arising out of or in any way relating to any one or more of
the following: (a) ownership of this Security Instrument, the Property or any interest therein or receipt of
any Rents; (b) any amendment to, or restructuring of, the Obligations or this Security Instrument or any
Documents; (c) any and all lawful action that may be taken by Bank in connection with the enforcement
of the provisions of this Security Instrument or any of the Documents, whether or not suit is filed in
connection with same, or in connection with Borrower becoming a party to a voluntary or involuntary
federal or state bankruptcy, insolvency or similar proceeding; (d) any accident, injury to or death of
persons or loss of or damage to property occurring in, on or about the Property or any part thereof or on
the adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways; (e) any use,
nonuse or condition in, on or about the Property or any part thereof or on the adjoining sidewalks, curbs,
adjacent property or adjacent parking areas, streets or ways; (f) any failure on the part of Borrower to
perform or be in compliance with any of the terms of this Security Instrument; (g) performance of any
labor or services or the furnishing of any materials or other property in respect of the Property or any part
thereof, (h) any failure of the Property to be in compliance with any Applicable Laws; (i) the enforcement
by any Indemnified Party of the provisions of this Article 12; 0) any and all claims and demands
whatsoever which may be asserted against Bank by reason of any alleged obligations or undertakings on
its part to perform or discharge any of the terms, covenants, or agreements contained in any Lease or (1)
any misrepresentation made by Borrower in this Security Instrument or any Other Security Document.
Any amounts payable to Bank by reason of the application of this Section 12.1 shall become immediately
due and payable and shall bear interest at the Bond Interest Rate from the date loss or damage is sustained
by Bank until paid. For purposes of this Article 12, the term "Indemnified Parties" means Bank and any
person or entity who is or will have been involved in the purchase of the Bond secured hereby, any person
or entity in whose name the encumbrance created by this Security Instrument is or will have been
recorded, persons and entities who may hold or acquire or will have held a full or partial interest in the
Bond as well as the respective directors, officers, shareholders, partners, employees, agents, servants,
representatives, contractors, subcontractors, affiliates, subsidiaries, participants, successors and assigns of
any and all of the foregoing (including but not limited to any other person or entity who holds or acquires
or will have held a participation or other full or partial interest in the loan secured hereby or the Property,
whether during the term of the loan secured hereby or as a part of or following a foreclosure of the loan
secured hereby and including, but not limited to, any successors by merger, consolidation or acquisition
of all or a substantial portion of Bank's assets and business).
Section 12.2 Mortgage and/or Intangible Tax. Borrower shall, at its sole cost and expense,
protect, defend, indemnify, release and hold harmless the Indemnified Parties from and against any and
all Losses imposed upon or incurred by or asserted against any Indemnified Parties and directly or
indirectly arising out of or in any way relating to any tax on the making and/or recording of this Security
Instrument or any of the Documents.
20
205
Section 12.3 ERISA Indemnification. Borrower shall, at its sole cost and expense, protect,
defend, indemnify, release and hold harmless the Indemnified Parties from and against any and all Losses
(including, without limitation, attorneys' fees and costs incurred in the investigation, defense, and
settlement of Losses incurred in correcting any prohibited transaction or in the sale of a prohibited loan,
and in obtaining any individual prohibited transaction exemption under ERISA that may be required, in
Bank's sole discretion) that Bank may incur, directly or indirectly, as a result of a default under Section
9.10).
Section 12.4 Environmental Indemnification. Borrower shall, at its sole cost and expense,
protect, defend, indemnify, release and hold harmless the Indemnified Parties from and against any and
all Losses and costs of Remediation (whether or not performed voluntarily), engineers' fees,
environmental consultants' fees, and costs of investigation (including but not limited to sampling, testing,
and analysis of soil, water, air, building materials and other materials and substances whether solid, liquid
or gas) imposed upon or incurred by or asserted against any Indemnified Parties, and directly or indirectly
arising out of or in any way relating to any one or more of the following: (a) any presence of any
Hazardous Substances in, on, above, or under the Property; (b) any past, present or threatened Release of
Hazardous Substances in, on, above, under or from the Property; (c) any activity by Borrower, any person
or entity affiliated with Borrower or any tenant or other user of the Property in connection with any
actual, proposed or threatened use, treatment, storage, holding, existence, disposition or other Release,
generation, production, manufacturing, processing, refining, control, management, abatement, removal,
handling, transfer or transportation to or from the Property of any Hazardous Substances at any time
located in, under, on or above the Property; (d) any activity by Borrower, any person or entity affiliated
with Borrower or any tenant or other user of the Property in connection with any actual or proposed
Remediation of any Hazardous Substances at any time located in, under, on or above the Property,
whether or not such Remediation is voluntary or pursuant to court or administrative order, including but
not limited to any removal, remedial or corrective action; (e) any past or present non-compliance or
violations of any Environmental Laws (or permits issued pursuant to any Environmental Law) in
connection with the Property or operations thereon, including but not limited to any failure by Borrower,
any person or entity affiliated with Borrower or any tenant or other user of the Property to comply with
any order of any governmental authority in connection with any Environmental Laws; (f) the imposition,
recording or filing of any Environmental Lien encumbering the Property; (g) any administrative processes
or proceedings or judicial proceedings in any way connected with any matter addressed in Article 12 and
this Section 12.4; (h) any past, present or threatened injury to, destruction of or loss of natural resources
in any way connected with the Property, including but not limited to costs to investigate and assess such
injury, destruction or loss; (i) any acts of Borrower or other users of the Property in arranging for disposal
or treatment, or arranging with a transporter for transport for disposal or treatment, of Hazardous
Substances owned or possessed by such Borrower or other users, at any facility or incineration vessel
owned or operated by another person or entity and containing such or any similar Hazardous Substance;
0) any acts of Borrower or other users of the Property, in accepting any Hazardous Substances for
transport to disposal or treatment facilities, incineration vessels or sites selected by Borrower or such
other users, from which there is a Release, or a threatened Release of any Hazardous Substance which
causes the incurrence of costs for Remediation; (k) any personal injury, wrongful death, or property
damage arising under any statutory or common law or tort law theory, including but not limited to
damages assessed for the maintenance of a private or public nuisance or for the conducting of an
abnormally dangerous activity on or near the Property; and (1) any misrepresentation or inaccuracy in any
representation or warranty or material breach or failure to perform any covenants or other obligations
pursuant to Article 12. This indemnity shall survive any termination, satisfaction or foreclosure of this
Security Instrument.
Section 12.5 Duty to Defend; Attorneys' Fees and Other Fees and Expenses. Upon written
request by any Indemnified Party, Borrower shall defend such Indemnified Party (if requested by any
21
203
Indemnified Party, in the name of the Indemnified Party) by attorneys and other professionals approved
by the Indemnified Parties. Notwithstanding the foregoing, any Indemnified Parties may, in their sole and
absolute discretion, engage their own attorneys and other professionals to defend or assist them, and, at
the option of Indemnified Parties, their attorneys shall control the resolution of claim or proceeding. Upon
demand, Borrower shall pay or, in the sole and absolute discretion of the Indemnified Parties, reimburse,
the Indemnified Parties for the payment of reasonable fees and disbursements of attorneys, engineers,
environmental consultants, laboratories and other professionals in connection therewith.
ARTICLE 13 - WAIVERS
Section 13.1 Waiver of Counterclaim. Borrower hereby waives the right to assert a
counterclaim, other than a mandatory or compulsory counterclaim, in any action or proceeding brought
against it by Bank arising out of or in any way connected with this Security Instrument, any of the
Documents, or the Obligations.
Section 13.2 Marshallinz and Other Matters. Borrower hereby waives, to the extent
permitted by law, the benefit of all appraisement, valuation, stay, extension, reinstatement and redemption
laws now or hereafter in force and all rights of marshalling in the event of any sale hereunder of the
Property or any part thereof or any interest therein. Further, Borrower hereby expressly waives any and all
rights of redemption from sale under any order or decree of foreclosure of this Security Instrument on
behalf of Borrower, and on behalf of each and every person acquiring any interest in or title to the
Property subsequent to the date of this Security Instrument and on behalf of all persons to the extent
permitted by applicable law.
Section 13.3 Waiver of Notice. Borrower shall not be entitled to any notices of any nature
whatsoever from Bank except with respect to matters for which this Security Instrument specifically and
expressly provides for the giving of notice by Bank to Borrower and except with respect to matters for
which Bank is required by applicable law to give notice, and Borrower hereby expressly waives the right
to receive any notice from Bank with respect to any matter for which this Security Instrument does not
specifically and expressly provide for the giving of notice by Bank to Borrower.
Section 13.4 Waiver of Statute of Limitations. Borrower hereby expressly waives and
releases to the fullest extent permitted by law, the pleading of any statute of limitations as a defense to
payment or performance of the Obligations.
Section 13.5 Sole Discretion of Bank. Wherever pursuant to this Security Instrument (a)
Bank exercises any right given to it to approve or disapprove, (b) any arrangement or term is to be
satisfactory to Bank, or (c) any other decision or determination is to be made by Bank, the decision of
Bank to approve or disapprove, all decisions that arrangements or terms are satisfactory or not satisfactory
and all other decisions and determinations made by Bank, shall be in the sole and absolute discretion of
Bank and shall be final and conclusive, except as may be otherwise expressly and specifically provided
herein.
Section 13.6 Survival. The indemnifications made pursuant to Sections 12.2, 12.3 and 12.4
and the representations and warranties, covenants, and other obligations arising under Article 11, shall
continue indefinitely in full force and effect and shall survive and shall in no way be impaired by: any
satisfaction or other termination of this Security Instrument, any assignment or other transfer of all or any
portion of this Security Instrument or Bank's interest in the Property (but, in such case, shall benefit both
Indemnified Parties and any assignee or transferee), any exercise of Bank's rights and remedies pursuant
hereto including but not limited to foreclosure or acceptance of a deed in lieu of foreclosure, any exercise
of any rights and remedies pursuant to any of the Documents, any transfer of all or any portion of the
22
201
Property (whether by Borrower or by Bank following foreclosure or acceptance of a deed in lieu of
foreclosure or at any other time), any amendment to this Security Instrument or the Documents, and any
act or omission that might otherwise be construed as a release or discharge of Borrower from the
obligations pursuant hereto.
Section 13.7 WAIVER OF TRIAL BY JURY. MORTGAGOR HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR
OTHERWISE, RELATING DIRECTLY OR INDIRECTLY UNDER OR IN CONNECTION WITH
THIS SECURITY INSTRUMENT, THE ASSIGNMENT OF LEASES OR THE DOCUMENTS OR
ANY ACTS OR OMISSIONS OF MORTGAGEE, ITS OFFICERS, EMPLOYEES, DIRECTORS OR
AGENTS IN CONNECTION THEREWITH.
ARTICLE 14 - NOTICES
Section 14.1 Notices. All notices, requests and demands to or upon the respective parties
hereto to be effective shall be in writing and shall be deemed to have been duly given or made when
delivered by hand (or when refused delivery), three (3) days after being deposited in any post office or
mail depository regularly maintained by the U.S. Postal Service and sent by certified mail, return receipt
requested postage prepaid, or one (1) business day after being deposited with a nationally recognized
overnight courier, addressed at their addresses set forth below or to such other address as may be hereafter
notified by the respective parties hereto:
If to the Mortgagor, to:
The Fairhope Airport Authority
161 N. Section Street
Fairhope, Alabama 36532
Attention: Chairman
If to the Mortgagee, to:
RBC Bank (USA)
3725 Highway 14
Millbrook, Alabama 36054
Attn: Tony Mills
Tel: (334) 290-2624
Fax: (334) 290-2626
and
RBC Bank (USA)
301 Fayetteville Street, Suite 1100
Raleigh, North Carolina 27601
Attn: Aaron J. Miller
Tel: (919) 788-7556
Fax: (919) 788-5515
With a copy to:
23
199
E. Alston Ray
Johnston Barton Proctor & Rose LLP
Colonial Brookwood Center
569 Brookwood Village, Suite 901
Birmingham, Alabama 35209
Tel: (205) 458-9488
Fax: (205) 458-9500
ARTICLE 15 - SERVICE OF PROCESS
Section 15.1 Consent to Service. Borrower irrevocably consents to service of the courts of
the State of Alabama and the United States District Court located in the Southern District of Alabama,
and appellate courts from any thereof for any litigation and waives any other venue to which it might be
entitled by virtue of domicile, habitual residence or otherwise.
Section 15.2 Submission to Jurisdiction. With respect to any claim or action arising
hereunder or under the Documents, Borrower (a) irrevocably submits to the nonexclusive jurisdiction of
the courts of the State of Alabama and the United States District Court located in the Southern District of
Alabama and the county in which the Property is located, and appellate courts from any thereof, and (b)
irrevocably waives any objection which it may have at any time to the laying on venue of any suit, action
or proceeding arising out of or relating to this Security Instrument brought in any such court, irrevocably
waives any claim that any such suit, action or proceeding brought in any such court has been brought in
an inconvenient forum.
Section 15.3 Jurisdiction. Nothing in this Security Instrument will be deemed to preclude
Bank from bringing an action or proceeding with respect hereto in any other jurisdiction.
ARTICLE 16 - APPLICABLE LAW
Section 16.1 Choice of Law. This Security Instrument shall be governed, construed, applied
and enforced in accordance with the laws of the State of Alabama and the applicable laws of the United
States of America.
Section 16.2 Usury Laws. This Security Instrument is subject to the express condition that at
no time shall Borrower be obligated or required to pay interest on the Obligations at a rate which could
subject the holder of the Note to either civil or criminal liability as a result of being in excess of the
maximum interest rate which Borrower is permitted by applicable law to contract or agree to pay. If by
the terms of this Security Instrument, Borrower is at any time required or obligated to pay interest on the
Obligations at a rate in excess of such maximum rate, the rate of interest under the Security Instrument
shall be deemed to be immediately reduced to such maximum rate and the interest payable shall be
computed at such maximum rate and all prior interest payments in excess of such maximum rate shall be
applied and shall be deemed to have been payments in reduction of the monetary Obligations.
Section 16.3 Provisions Subiect to Applicable Law. All rights, powers and remedies
provided in this Security Instrument may be exercised only to the extent that the exercise thereof does not
violate any applicable provisions, of law and are intended to be limited to the extent necessary so that they
will not render this Security Instrument invalid, unenforceable or not entitled to be recorded, registered or
filed under the provisions of any applicable law. If any term of this Security Instrument or any application
thereof shall be invalid or unenforceable, the remainder of this Security Instrument and any other
application of the term shall not be affected thereby.
24
197
ARTICLE 17 - COSTS
Section 17.1 Performance at Borrower's Expense. Borrower acknowledges and confirms
that Bank shall impose certain administrative processing and/or commitment fees in connection with (a)
the extension, renewal, modification, amendment and termination of its loans, (b) the release or
substitution of collateral therefor, (c) obtaining certain consents, waivers and approvals with respect to the
Property, or (d) the review of any Lease or proposed lease or the preparation or review of any
subordination, non -disturbance agreement (the occurrence of any of the above shall be called an "Event").
Borrower further acknowledges and confirms that it shall be responsible for the payment of all costs of
reappraisal of the Property or any part thereof, whether required by law, regulation, Bank or any
governmental or quasi -governmental authority. Borrower hereby acknowledges and agrees to pay,
immediately, with or without demand, all such fees (as the same may be increased or decreased from time
to time), and any additional fees of a similar type or nature which may be imposed by Bank from time to
time, upon the occurrence of any Event or otherwise. Wherever it is provided for herein that Borrower
pay any costs and expenses, such costs and expenses shall include, but not be limited to, all legal fees and
disbursements of Bank, whether of retained firms, the reimbursement for the expenses of in-house staff or
otherwise.
Section 17.2 Attorney's Fees for Enforcement. (a) Borrower shall pay all legal fees incurred
by Bank in connection with (i) the preparation of this Security Instrument and the Documents and (ii) the
items set forth in Section 17.1 above, and (b) Borrower shall pay to Bank on demand any and all
expenses, including legal expenses and attorneys' fees, incurred or paid by Bank in protecting its interest
in the Property or Personal Property or in collecting any amount payable hereunder or in enforcing its
rights hereunder with respect to the Property or Personal Property, whether or not any legal proceeding is
commenced hereunder or thereunder and whether or not any default or Event of Default shall have
occurred and is continuing, together with interest thereon at the Bond Interest Rate from the date paid or
incurred by Bank until such expenses are paid by Borrower.
ARTICLE 18 - DEFINITIONS
Section 18.1 General Definitions. Unless the context clearly indicates a contrary intent or
unless otherwise specifically provided herein, words used in this Security Instrument may be used
interchangeably in singular or plural form and the word "Borrower" means "each Borrower and any
subsequent owner or owners of the Property or any part thereof or any interest therein," the word "Bank"
means "Bank and any successor thereto," the word "person" shall include an individual, corporation,
partnership, trust, unincorporated association, government, governmental authority, and any other entity,
the word "Property" shall include any portion of the Property and any interest therein, and the phrases
"attorneys' fees", "legal fees" and "counsel fees" shall include any and all attorneys', paralegal and law
clerk fees and disbursements, including, but not limited to, fees and disbursements at the pre-trial, trial
and appellate levels incurred or paid by Bank in protecting its interest in the Property, the Leases and the
Rents and enforcing its rights hereunder.
ARTICLE 19 - MISCELLANEOUS PROVISIONS
Section 19.1 No Oral Chance. This Security Instrument, and any provisions hereof, may not
be modified, amended, waived, extended, changed, discharged or terminated orally or by any act or
failure to act on the part of Borrower or Bank, but only by an agreement in writing signed by the party
against whom enforcement of any modification, amendment, waiver, extension, change, discharge or
termination is sought.
25
Section 19.2 Liability. If Borrower consists of more than one person, the obligations and
liabilities of each such person hereunder shall be joint and several. This Security Instrument shall be
binding upon and inure to the benefit of Borrower and Bank and their respective successors and assigns
forever.
Section 19.3 Inapplicable Provisions. If any term, covenant or condition of the Note or this
Security Instrument is held to be invalid, illegal or unenforceable in any respect, the Note and this
Security Instrument shall be construed without such provision.
Section 19.4 Headines, etc. The headings and captions of various Sections of this Security
Instrument are for convenience of reference only and are not to be construed as defining or limiting, in
any way, the scope or intent of the provisions hereof.
Section 19.5 Duplicate Originals; Counterparts. This Security Instrument may be executed
in any number of duplicate originals and each duplicate original shall be deemed to be an original. This
Security Instrument may be executed in several counterparts, each of which counterparts shall be deemed
an original instrument and all of which together shall constitute a single Security Instrument. The failure
of any party hereto to execute this Security Instrument, or any counterpart hereof, shall not relieve the
other signatories from their obligations hereunder.
Section 19.6 Number and Gender. Whenever the context may require, any pronouns used
herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of
nouns and pronouns shall include the plural and vice versa.
Section 19.7 Subrogation. If any or all of the proceeds of the Note have been used to
extinguish, extend or renew any indebtedness heretofore existing against the Property, then, to the extent
of the funds so used, Bank shall be subrogated to all of the rights, claims, liens, titles, and interests
existing against the Property heretofore held by, or in favor of, the holder of such indebtedness and such
former rights, claims, liens, titles, and interests, if any, are not waived but rather are continued in full
force and effect in favor of Bank and are merged with the lien and security interest created herein as
cumulative security for the payment, performance and discharge of the Obligations, including the
performance and discharge of Borrower's obligations hereunder and under the Documents.
Section 19.8 Entire Agreement. This Security Instrument and the Documents constitute the
entire understanding and agreement between Borrower and Bank with respect to the transactions arising
in connection with the Obligations and supersede all prior written or oral understandings and agreements
between Borrower and Bank with respect thereto. Borrower hereby acknowledges that, except as
incorporated in writing in this Security Instrument and the Documents, there are not, and were not, and no
persons are or were authorized by Bank to make, any representations, understandings, stipulations,
agreements or promises, oral or written, with respect to the transaction which is the subject of this
Security Instrument and the Documents.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;
SIGNATURE PAGE TO FOLLOW]
26
193
IN WITNESS WHEREOF, THIS SECURITY INSTRUMENT has been executed by
Mortgagor and Mortgagee as of the day and year first above written.
[SEAL]
Attest:
Secretary
MORTGAGOR:
THE FAIRHOPE AIRPORT AUTHORITY,
an Alabama public corporation
Chairman of the Board of Directors
MORTGAGEE:
RBC BANK (USA),
a North Carolina banking corporation
I0
Name:
Its:
27
19.1
STATE OF ALABAMA
COUNTY of
1, , a notary public in and for said County in said State, hereby
certify that whose name as Chairman of the Board of Directors
of The Fairhope Airport Authority, a public corporation, is signed to the foregoing instrument and who is
known to me, acknowledged before me on this day that, being informed of the contents of the instrument,
he, as such officer and with full authority, executed the same voluntarily for and as the act of said
corporation.
Given under my hand this the 26"H day of August, 2010.
[SEAL]
My commission expires:
STATE OF ALABAMA
COUNTY OF
Notary Public
1, , a notary public in and for said County in said State, hereby
certify that whose name as of
RBC BANK(USA), a North Carolina banking corporation, is signed to the foregoing instrument and who
is known to me, acknowledged before me on this day that, being informed of the contents of the
instrument, he, as such officer and with full authority, executed the same voluntarily for and as the act of
said corporation.
Given under my hand this the day of , 2010.
[SEAL]
My commission expires:
Notary Public
28
•
EXHIBIT A
(Description of Land)
A-1
187
Prepared by and Upon
Recordation Return To:
Angie Godwin McEwen
Johnston Barton Proctor & Rose LLP
Colonial Brookwood Center
569 Brookwood Village, Suite 901
Birmingham, Alabama 35209
MORTGAGE AND SECURITY AGREEMENT
Mortgagor: The FAIRHOPE AIRPORT AUTHORITY
To
Mortgagee: RBC BANK (USA)
MORTGAGE AND SECURITY AGREEMENT
Dated as of , 20io
Dated August 26, 2010
(W0753708.2)
185
THIS MORTGAGE AND SECURITY AGREEMENT (the "Security Instrument" or
"Mortgage") is made as of the 260' day of —AuLyust, 2010, by The Fairhope
Airport Authority, a public corporation organized under the laws of the State of Alabama, having its
principal place of business at 161 N. Section Street, Fairhope, Alabama 36532 (the "Borrower" or the
"Mortgagor") for the benefit of RBC BANK (USA), having an address of
as mortgagee (the "Bank" or the "Mortgagee").
All capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Bond or
the Collateral Documents, as applicable (defined below).
THIS MORTGAGE IS FILED AS AND SHALL CONSTITUTE A FIXTURE FILING IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 7-9A-102(A)(40) OF THE CODE OF
ALABAMA.
RECITALS:
WHEREAS, the Borrower has determined it is desirable to issue and deliver its 1$8,910,0001
Airport Improvement Refunding Bond, Series 2010 (the "Bond"), which is being issued pursuant to a
resolution adopted by the governing body of the Borrower on August 9, 2010 (the "Resolution") to make
funds available to redeem and retire the Airport Improvement Bonds, Series 2007, of the Borrower and to
pay the costs of issuing the Bond; and
WHEREAS, the Bank has agreed to purchase the Bond from Borrower at a price equal to the
face amount thereof 1($8,910,000)1; and
WHEREAS, in order to induce the Bank to purchase the Bond, the Borrower has agreed to enter
into an Appropriation Agreement of even date herewith between Borrower and the City of Fairhope,
Alabama (the "Appropriation Agreement"), and to grant a first mortgage lien on the Property (as defined
below) to the Mortgagee pursuant to this Security Instrument; and
WHEREAS, one of the conditions precedent to the Bank purchasing the Bond is that the
Borrower execute and deliver this Security Instrument; and
WHEREAS, the Bank has agreed not to record this Mortgage prior to a Recordable Event (as
hereinafter defined); and
WHEREAS, the Bank will hold this executed Mortgage in escrow and such Mortgage shall not
be recorded or effective until the occurrence of a Recordable Event.
ARTICLE 1- GRANTS OF SECURITY
Section 1.1 Property Morteaeed. In order to secure the payment of the Obligations (as
hereinafter defined), the Mortgagor has granted, bargained, sold, conveyed, assigned, transferred,
pledged, and set over unto the Mortgagee, and by these presents does grant, bargain, sell, convey, assign,
transfer, pledge and set over unto the Mortgagee, and its successors and assigns, the following described
immovable property, rights, titles, interests, and estates (such property, rights and interests being
hereinafter collectively referred to as the "Property"):
(a) Land. The real property described in Exhibit A attached hereto and made a part
hereof (the "Land");
(W0753708.2)
IFIM
(b) Additional Land. All additional lands, estates and development rights hereafter
acquired by Borrower for use in connection with the Land and the development of the Land and all
additional lands and estates therein which may, from time to time, by supplemental mortgage or otherwise
be expressly made subject to the lien of this Security Instrument;
(c) Improvements. The buildings, structures, fixtures, additions, enlargements,
extensions, modifications, repairs, replacements and improvements now or hereafter erected or located on
the Land (the "Improvements");
(d) Easements. All easements, rights -of -way or use, rights, strips and gores of land,
streets, ways, alleys, passages, sewer rights, water, water courses, water rights and powers, air rights and
development rights, and all estates, rights, titles, interests, privileges, liberties, servitudes, tenements,
hereditaments and appurtenances of any nature whatsoever, in any way now or hereafter belonging,
relating or pertaining to the Land and the Improvements and the reversion and reversions, remainder and
remainders, and all land lying in the bed of any street, road or avenue, opened or proposed, in front of or
adjoining the Land, to the center line thereof and all the estates, rights, titles, interests, dower and rights of
dower, curtesy and rights of curtesy, property, possession, claim and demand whatsoever, both at law and
in equity, of Borrower of, in and to the Land and the Improvements and every part and parcel thereof,
with the appurtenances thereto;
(e) Fixtures and Personal Property. All machinery, equipment, fixtures (including,
but not limited to, all heating, air conditioning, plumbing, lighting, communications and elevator fixtures)
and other property of every kind and nature whatsoever owned by Borrower, or in which Borrower has or
shall have an interest, now or hereafter located upon the Land and the Improvements, or appurtenant
thereto, and usable in connection with the present or future operation and occupancy of the Land and the
Improvements and all building equipment, materials and supplies of any nature whatsoever owned by
Borrower, or in which Borrower has or shall have an interest, now or hereafter located upon the Land and
the Improvements, or appurtenant thereto, or usable in connection with the present or future operation and
occupancy of the Land and the Improvements (collectively, the "Personal Property"), and the right, title
and interest of Borrower in and to any of the Personal Property which may be subject to any security
interests, as defined in the Uniform Commercial Code, as adopted and enacted by the state or states where
any of the Property is located (the "Uniform Commercial Code"), superior in lien to the lien of this
Security Instrument and all proceeds and products of the above;
(f) Leases and Rents. All leases and other agreements affecting the use, enjoyment
or occupancy of the Land and the Improvements heretofore or hereafter entered into, whether before or
after the filing by or against Borrower of any petition for relief under 11 U.S.C. §101 et seq., as the same
may be amended from time to time (the "Bankruptcy Code") (the "Leases") and all right, title and interest
of Borrower, its successors and assigns therein and thereunder, including, without limitation, cash or
securities deposited thereunder to secure the performance by the lessees of their obligations thereunder
and all rents, additional rents, revenues, issues and profits (including all oil and gas or other mineral
royalties and bonuses) from the Land and the Improvements whether paid or accruing before or after the
filing by or against Borrower of any petition for relief under the Bankruptcy Code (the "Rents") and all
proceeds from the sale or other disposition of the Leases (the "Proceeds") and the right to receive and
apply the Rents to the payment of the monetary Obligations;
(g) Condemnation Awards. All awards or payments, including interest thereon,
which may heretofore and hereafter be made with respect to the Property, whether from the exercise of
the right of eminent domain (including but not limited to any transfer made in lieu of or in anticipation of
the exercise of the right), or for a change of grade, or for any other injury to or decrease in the value of the
Property;
(WO;537e8.2) 2
181
(h) Insurance Proceeds. All proceeds of and any unearned premiums on any
insurance policies covering the Property, including, without limitation, the right to receive and apply the
proceeds of any insurance, judgments, or settlements made in lieu thereof, for damage to the Property;
(i) Tax Certiorari. All refunds, rebates or credits in connection with a reduction in
real estate taxes and assessments charged against the Property as a result of tax certiorari or any
applications or proceedings for reduction;
0) Conversion. All proceeds of the conversion, voluntary or involuntary, of any of
the foregoing including, without limitation, proceeds of insurance and condemnation awards, into cash or
liquidation claims;
(k) Rights. The right, in the name and on behalf of Borrower, to appear in and
defend any action or proceeding brought with respect to the Property and to commence any action or
proceeding to protect the interest of Bank in the Property;
(1) Agreements. All agreements, contracts, certificates, instruments, franchises,
permits, licenses, plans, specifications and other documents, now or hereafter entered into, and all rights
therein and thereto, respecting or pertaining to the use, occupation, construction, management or
operation of the Land and any part thereof and any Improvements or respecting any business or activity
conducted on the Land and any part thereof and all right, title and interest of Borrower therein and
thereunder, including, without limitation, the right, upon the happening of any default hereunder, to
receive and collect any sums payable to Borrower thereunder;
(m) Trademarks. All tradenames, trademarks, servicemarks, logos, copyrights,
goodwill, books and records and all other general intangibles relating to or used in connection with the
operation of the Property; and
(n) Other Rights. Any and all other rights of Borrower in and to the items set forth
in Subsections (a) through (m) above.
Section 1.2 Assignment of Rents. Borrower hereby absolutely and unconditionally assigns
to Bank Borrower's right, title and interest in and to all current and future Leases and Rents; it being
intended by Borrower that this assignment constitutes a present, absolute assignment and not an
assignment for additional security only. Nevertheless, subject to the terms of this Section 1.2 and Section
3.7, Bank grants to Borrower a revocable license to collect and receive the Rents and to treat with tenants
under the terms and provisions of their respective Leases. Borrower shall hold the Rents, the Proceeds and
any sums otherwise received by Borrower under any lease guaranties, letters of credit and any other credit
support given by any guarantor in connection with any of the Leases ("Lease Guaranties"), or a portion of
any thereof sufficient to discharge all current sums due on the Obligations, for use in the payment of such
SUMS.
Section 1.3 Security Agreement. This Security Instrument is both a real property mortgage
and a "security agreement" within the meaning of the Uniform Commercial Code. The Property includes
both real and personal property and all other rights and interests, whether tangible or intangible in nature,
of Borrower in the Property. By executing and delivering this Security Instrument, Borrower hereby
grants to Bank, as security for the Obligations (defined in Section 2.1), a security interest in the Personal
Property to the full extent that the Personal Property may be subject to the Uniform Commercial Code.
Section 1.4 Pledee of Monies Held. Borrower hereby pledges to Bank any and all monies
now or hereafter held by Bank, including, without limitation, any sums deposited in the Escrow Fund (as
3
179
defined in Section 3.5), Net Proceeds (as defined in Section 4.2), and condemnation awards or payments
described in Section 4.2, as additional security for the Obligations until expended or applied as provided
in this Security Instrument. -
CONDITIONS TO GRANT
TO HAVE AND TO HOLD the above granted and described Property unto and to the use and
benefit of Bank, and the successors and assigns of Bank, forever;
PROVIDED, HOWEVER, these presents are upon the express condition that, if Borrower shall
well and truly pay to Bank the monetary Obligations at the time and in the manner provided in the Bond
and this Security Instrument, shall well and truly perform the other non -monetary Obligations as set forth
in this Security Instrument and shall well and truly abide by and comply with each and every covenant
and condition set forth herein and in the Bond, these presents and the estate hereby granted shall cease,
terminate and be void.
ARTICLE 2 - DEBT AND OBLIGATIONS SECURED
Section 2.1 Obligations. This Security Instrument and the grants, assignments and transfers
made herein are made in consideration of the Bank purchasing the Bond. The obligations of the Borrower
are evidenced and secured by the Bond and the "Collateral Documents," which shall include, but not be
limited to, this Security Instrument, the Resolution, any assignment of leases and rents, and all
instruments and agreements relating in any way to the foregoing, and any amendment, modification or
supplement, from time to time, to any of the foregoing. The Borrower's obligations for the payment and
performance of the aforementioned obligations and the performance of the other obligations hereunder
shall be referred to collectively herein as the "Obligations." As used herein, "Documents" means the
Bond and the Collateral Documents.
Section 2.2 Payments. Unless payments are made in the required amount in immediately
available funds at the place provided in the Documents, remittances in payment of all or any part of the
Obligations shall not, regardless of any receipt or credit issued therefor, constitute payment until the
required amount is actually received by Bank in funds immediately available at the place provided in the
Documents (or any other place as any Mortgagee may have established by delivery of written notice
thereof to the Borrower) and shall be made and accepted subject to the condition that any check or draft
may be handled for collection in accordance with the practice of the collecting bank or banks. Acceptance
by any Mortgagee of any payment in an amount less than the amount then due shall be deemed an
acceptance on account only, and the failure to pay the entire amount then due shall be and continue to be
an Event of Default (defined below). The Borrower will pay the Obligations at the time and in the manner
provided in the Documents.
ARTICLE 3 - BORROWER COVENANTS
Borrower covenants and agrees that:
Section 3.1 Payment of Obligations. Borrower will pay the Obligations at the time and in
the manner provided in the Bond and in this Security Instrument.
Section 3.2 Incorporation by Reference. All the covenants, conditions and agreements
contained in the Documents, which wholly or partially secure or guaranty payment of the Obligations are
hereby made a part of this Security Instrument to the same extent and with the same force as if fully set
forth herein.
two;537e8a} 4
177
Section 3.3 Insurance. The Borrower will maintain insurance with reputable insurers for the
Property, Improvements and Personal Property in such amounts and against such risks as is customarily
maintained by other entities of similar size engaged in similar business. Copies of all policies of
insurance (or other evidence thereof satisfactory to the Bank) shall have been made available to the Bank
on or before the date of the purchase of the Bond.
Section 3.4 Payment of Taxes, etc. Borrower shall promptly pay all taxes, assessments,
water rates, sewer rents, governmental impositions, and other charges, if any, including without limitation
vault charges and license fees for the use of vaults, chutes and similar areas adjoining the Land, now or
hereafter levied or assessed or imposed against the Property or any part thereof (the "Taxes"), all ground
rents, maintenance charges and similar charges, now or hereafter levied or assessed or imposed against
the Property or any part thereof (the "Other Charges"), and all charges for utility services provided to the
Property as same become due and payable. Borrower will deliver to Bank, promptly upon Bank's request,
evidence satisfactory to Bank that the Taxes, Other Charges and utility service charges have been so paid
or are not then delinquent. Borrower shall not suffer and shall promptly cause to be paid and discharged
any lien or charge whatsoever which may be or become a lien or charge against the Property. Except to
the extent sums sufficient to pay all Taxes and Other Charges have been deposited with Bank in
accordance with the terms of this Security Instrument, Borrower shall furnish to Bank paid receipts for
the payment of the Taxes and Other Charges prior to the date the same shall become delinquent.
Section 3.5 Escrow Fund. Upon the written demand of the Mortgagee, Borrower shall pay
to Bank on the first day of each calendar month (a) one -twelfth of an amount which would be sufficient to
pay the Taxes payable, or estimated by Bank to be payable, during the next ensuing twelve (12) months
and (b) one -twelfth of an amount which would be sufficient to pay the Insurance Premiums due for the
renewal of the coverage afforded by the Policies upon the expiration thereof (the amounts in (a) and (b)
above shall be called the "Escrow Fund"). Borrower agrees to notify Bank immediately of any changes to
the amounts, schedules and instructions for payment of any Taxes and Insurance Premiums of which it
has obtained knowledge and authorizes Bank or its agent to obtain the bills for Taxes and Other Charges
directly from the appropriate taxing authority. The Escrow Fund and the payment of the monetary
Obligations shall be added together and shall be paid as an aggregate sum by Borrower to Bank. Bank
will apply the Escrow Fund to payments of Taxes and Insurance Premiums required to be made by
Borrower pursuant to Sections 3.3 and 3.4 hereof. If the amount of the Escrow Fund shall exceed the
amounts due for Taxes and Insurance Premiums pursuant to Sections 3.3 and 3.4 hereof, Bank shall, in its
discretion, return any excess to Borrower or credit such excess against future payments to be made to the
Escrow Fund. In allocating such excess, Bank may deal with the person shown on the records of Bank to
be the owner of the Property. If the Escrow Fund is not sufficient to pay the items set forth in clauses (a)
and (b) of this Section 3.5 above, Borrower shall promptly pay to Bank, upon demand, an amount which
Bank shall estimate as sufficient to make up the deficiency. The Escrow Fund shall not constitute a trust
fund and may be commingled with other monies held by Bank. No earnings or interest on the Escrow
Fund shall be payable to Borrower.
Section 3.6 Condemnation. Borrower shall promptly give Bank notice of the actual or
threatened commencement of any condemnation or eminent domain proceeding and shall deliver to Bank
copies of any and all papers served in connection with such proceedings. Bank may participate in any
such proceedings, and Borrower shall from time to time deliver to Bank all instruments requested by it to
permit such participation. Borrower shall, at its expense, diligently prosecute any such proceedings, and
shall consult with Bank, its attorneys and experts, and cooperate with them in the carrying on or defense
of any such proceedings. Notwithstanding any taking by any public or quasi -public authority through
eminent domain or otherwise (including but not limited to any transfer made in lieu of or in anticipation
of the exercise of such taking), Borrower shall continue to pay the Obligations at the time and in the
manner provided for its payment in the Documents and the Obligations shall not be reduced until any
175
award or payment therefor shall have been actually received and applied by Bank, after the deduction of
expenses of collection, to the reduction or discharge of the Obligations. Bank shall not be limited to the
interest paid on the award by the condemning authority but shall be entitled to receive out of the award
interest at the rate or rates provided herein or in the Documents.
Section 3.7 Leases and Rents.
(a) Except as otherwise consented to by Bank, all Leases shall be written on the
standard form of lease which shall have been approved by Bank. Upon request, Borrower shall furnish
Bank with executed copies of all Leases. No material changes may be made to the Bank -approved
standard lease without the prior written consent of Bank, which such consent shall not be unreasonably
withheld. In addition, all renewals of Leases and all proposed leases shall provide for rental rates and
terms comparable to existing local market rates and terms and shall be arms -length transactions with bona
fide, independent third party tenants. All proposed leases and renewals of existing Leases shall be subject
to the prior approval of Bank and its counsel, which such consent shall not be unreasonably withheld, at
Borrower's expense. All Leases shall provide that they are subordinate to this Security Instrument and
that the lessee agrees to attorn to Bank. Borrower shall (i) observe and perform all the obligations
imposed upon the lessor under the Leases and shall not do or permit to be done anything to impair the
value of the Leases as security for the Obligations; (i) promptly send copies to Bank of all notices of
default which Borrower shall send or receive thereunder; (iii) enforce all of the terms, covenants and
conditions contained in the Leases upon the part of the lessee thereunder to be observed or performed,
short of termination thereof; (iv) not collect any of the Rents more than one (1) month in advance; (v) not
execute any other assignment of the lessor's interest in the Leases or the Rents; (vi) not alter, modify or
change the terms of the Leases without the prior written consent of Bank, or cancel or terminate the
Leases or accept a surrender thereof or convey or transfer or suffer or permit a conveyance or transfer of
the Land or of any interest therein so as to effect a merger of the estates and rights of, or a termination or
diminution of the obligations of, lessees thereunder; (vii) not alter, modify or change the terms of any
guaranty, letter of credit or other credit support with respect to the Leases (the "Lease Guaranty") or
cancel or terminate such Lease Guaranty without the prior written consent of Bank; and (viii) not consent
to any assignment of or subletting under the Leases not in accordance with their terms, without the prior
written consent of Bank.
(b) To the extent permitted by law and upon the written demand of the Mortgagee,
Borrower shall promptly deposit with Bank any and all monies representing security deposits under the
Leases, whether or not Borrower actually received such monies (the "Security Deposits"). Bank shall hold
the Security Deposits in accordance with the terms of the respective Lease, and shall only release the
Security Deposits in order to return a tenant's Security Deposit to such tenant if such tenant is entitled to
the return of the Security Deposit under the terms of the Lease and is not otherwise in default under the
Lease. To the extent required by Applicable Laws (defined below), Bank shall hold the Security Deposits
in an interest bearing account selected by Bank in its sole discretion. In the event Bank is not permitted by
law to hold the Security Deposits, Borrower shall deposit the Security Deposits into an account with a
federally insured institution as approved by Bank.
Section 3.8 Maintenance of Property. Borrower shall cause the Property to be maintained
in a good and safe condition and repair. The Improvements and the Personal Property shall not be
removed, demolished or materially altered (except for normal replacement of the Personal Property)
without the consent of Bank. Borrower shall promptly repair, replace or rebuild any part of the Property
which may be destroyed by any casualty, or become damaged, worn or dilapidated or which may be
affected by any proceeding of the character referred to in Section 3.6 hereof and shall complete and pay
for any structure at any time in the process of construction or repair on the Land. Borrower shall not
initiate, join in, acquiesce in, or consent to any change in any private restrictive covenant, zoning law or
«vn'1 �'2r 6
173
other public or private restriction, limiting or defining the uses which may be made of the Property or any
part thereof. If under applicable zoning provisions the use of all or any portion of the Property is or shall
become a nonconforming use, Borrower will not cause or permit the nonconforming use to be
discontinued or abandoned without the express written consent of Bank.
Section 3.9 Waste. Borrower shall not commit or suffer any waste of the Property or make
any change in the use of the Property which will in any way materially increase the risk of fire or other
hazard arising out of the operation of the Property, or take any action that might invalidate or give cause
for cancellation of any Policy, or do or permit to be done thereon anything that may in any way impair the
value of the Property or the security of this Security Instrument.
Section 3.10 Compliance With Laws. (a) Borrower shall promptly comply with all existing
and future federal, state and local laws, orders, ordinances, governmental rules and regulations or court
orders affecting the Property, or the use thereof including, but not limited to, the Americans with
Disabilities Act ("ADA") (collectively, the "Applicable Laws"), as well as with all indentures, mortgages,
deeds of trust, agreements or other instruments or contractual obligations to which it is a party or by
which it or any of its property may be bound or affected.
(b) Borrower shall from time to time, upon Bank's request, provide Bank with
evidence satisfactory to Bank that the Property complies with all Applicable Laws or is exempt from
compliance with Applicable Laws.
(c) Notwithstanding any provisions set forth herein or in any document regarding
Bank's approval of alterations of the Property, Borrower shall not alter the Property in any manner which
would increase Borrower's responsibilities for compliance with Applicable Laws without the prior written
approval of Bank. Bank's approval of the plans, specifications, or working drawings for alterations of the
Property shall create no responsibility or liability on behalf of Bank for their completeness, design,
sufficiency or their compliance with Applicable Laws. The foregoing shall apply to tenant improvements
constructed by Borrower or by any of its tenants. Bank may condition any such approval upon receipt of a
certificate of compliance with Applicable Laws from an independent architect, engineer, or other person
acceptable to Bank.
(d) Borrower shall give prompt notice to Bank of the receipt by Borrower of any
notice related to a violation of any Applicable Laws and of the commencement of any proceedings or
investigations which relate to compliance with Applicable Laws.
(e) Borrower will take appropriate measures to prevent and will not engage in or
knowingly permit any illegal activities at the Property.
Section 3.11 Books and Records.
(a) Borrower shall keep adequate books and records of account in accordance with
GAAP or in accordance with other methods acceptable to Bank in its sole discretion, consistently applied
and furnish to Bank:
(b) Upon request from Bank, Borrower shall furnish to Bank an accounting of all
security deposits held in connection with any Lease of any part of the Property, including the name and
identification number of the accounts in which such security deposits are held, the name and address of
the financial institutions in which such security deposits are held and the name of the person to contact at
such financial institution, along with any authority or release necessary for Bank to obtain information
regarding such accounts directly from such financial institutions.
171
(c) Borrower shall furnish Bank with such other additional financial or management
information as may, from time to time, be required by Bank in form and substance satisfactory to Bank.
(d) Borrower shall furnish to Bank and its agents convenient facilities for the
examination and audit of any such books and records. Within a reasonable time after request by Bank,
Borrower shall provide any other information with respect to the Property and the financial condition of
Borrower as Bank may from time to time request.
(e) The Borrower shall use its commercially reasonable best efforts to cause the
following to be furnished to the Bank promptly, but in any event within thirty (30) days following the
completion of the same: (i) the audited comprehensive annual financial reports (CAFR) of the City of
Fairhope (the "City"), (ii) the annual budget of the City, and (iii) upon the written request of the Bank,
copies of the semi-annual financial reports of the City that are presented to the Mayor and City Council of
the City.
(f) The Borrower shall use its commercially reasonable best efforts to cause the City
to renew the Appropriation Agreement while the Bond is outstanding.
Section 3.12 Payment For Labor and Materials. Borrower will promptly pay when due all
bills and costs for labor, materials, and specifically fabricated materials incurred in connection with the
Property and never permit to exist beyond the due date thereof in respect of the Property or any part
thereof any lien or security interest, even though inferior to the liens and the security interests hereof, and
in any event never permit to be created or exist in respect of the Property or any part thereof any other or
additional lien or security interest other than the liens or security interests hereof, except for the Permitted
Encumbrances.
Section 3.13 Intentionally Omitted.
Section 3.14 Performance of Other Aereements. Borrower shall observe and perform each
and every term to be observed or performed by Borrower pursuant to the terms of any agreement or
recorded instrument affecting or pertaining to the Property, or given by Borrower to Bank for the purpose
of further securing an obligation secured hereby and any amendments, modifications or changes thereto.
ARTICLE 4 - SPECIAL COVENANTS
Borrower covenants and agrees that:
Section 4.1 Property Use. The Property shall be used only for the purposes described in the
Resolution, and for no other use without the prior written consent of Bank, which consent may be
withheld in Bank's sole and absolute discretion.
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Bank that:
Section 5.1 Warranty of Title. Borrower has good title to the Property and has the right to
mortgage, grant, bargain, sell, pledge, assign, warrant, transfer and convey the same and that Borrower
possesses an unencumbered fee simple absolute estate in the Land and the Improvements and that it owns
the Property free and clear of all liens, encumbrances and charges whatsoever except for Permitted
Encumbrances. Borrower shall forever warrant, defend and preserve the title and the validity and priority
8
MGM]
of the lien of this Security Instrument and shall forever warrant and defend the same to Bank against the
claims of all persons whomsoever.
Section 5.2 Authority. Borrower (and the undersigned representative of Borrower, if any)
has full power, authority and legal right to execute this Security Instrument, and to mortgage, grant,
bargain, sell, pledge, assign, warrant, transfer and convey the Property pursuant to the terms hereof and to
keep and observe all of the terms of this Security Instrument on Borrower's part to be performed.
Section 5.3 Legal Status and Authority. Borrower (a) is duly organized, validly existing
and in good standing under the laws of its state of organization or incorporation; (b) is duly qualified to
transact business and is in good standing in the State where the Property is located; and (c) has all
necessary approvals, governmental and otherwise, and full power and authority to own the Property and
carry on its business as now conducted and proposed to be conducted. Borrower now has and shall
continue to have the full right, power and authority to operate and lease the Property, to encumber the
Property as provided herein and to perform all of the other obligations to be performed by Borrower
under this Security Instrument and the Documents.
Section 5.4 Validity of Documents. (a) The execution, delivery and performance of this
Security Instrument and the Documents (i) are within the corporate power of Borrower; (ii) have been
authorized by all requisite corporate action; (iii) have received all necessary approvals and consents,
corporate, governmental or otherwise; (iv) will not violate, conflict with, result in a breach of or constitute
(with notice or lapse of time, or both) a default under any provision of law, any order or judgment of any
Governmental Authority, the Organizational Documents of Borrower, or any indenture, agreement or
other instrument to which Borrower is a party or by which it or any of its assets or the Property is or may
be bound or affected; (v) will not result in the creation or imposition of any Lien, whatsoever upon any of
its assets, except the lien and security interest created hereby; and (vi) will not require any authorization
or license from, or any filing with, any Governmental Authority (except for the recordation of this
instrument in appropriate land records in the State where the Property is located and except for Uniform
Commercial Code filings relating to the security interest created hereby); and (b) this Security Instrument
and the Documents constitute the legal, valid and binding obligations of Borrower.
Section 5.5 Litigation. There is no action, suit or proceeding, judicial, administrative or
otherwise (including any condemnation or similar proceeding), pending or, to the best of Borrower's
knowledge, threatened or contemplated against, or affecting, Borrower, a Guarantor, if any, a Borrower, if
any, or the Property that has not been disclosed to Bank or is not adequately covered by insurance, as
determined by Bank in its sole and absolute discretion.
Section 5.6 Status of Property. (a) No portion of the Improvements is located in an area
identified by the Secretary of Housing and Urban Development or any successor thereto as an area having
special flood hazards pursuant to the National Flood Insurance Act of 1968 or the Flood Disaster
Protection Act of 1973, as amended, or any successor law, or, if located within any such area, Borrower
has obtained and will maintain flood insurance as required by Section 3.3(a) hereof.
(b) Borrower has obtained all necessary certificates, licenses and other approvals,
governmental and otherwise, necessary for the operation of the Property and the conduct of its business
and all required zoning, building code, land use, environmental and other similar permits or approvals, all
of which are in full force and effect as of the date hereof and not subject to revocation, suspension,
forfeiture or modification.
(c) The Property and the present and contemplated use and occupancy thereof are in
full compliance with all Applicable Laws, including, without limitation, zoning ordinances, building
9
167
codes, land use and environmental laws, laws relating to the disabled (including, but not limited to, the
ADA) and other similar laws.
(d) The Property is served by all utilities required for the current or contemplated use
thereof. All utility service is provided by public utilities and the Property has accepted or is equipped to
accept such utility service.
(e) All public roads and streets necessary for service of and access to the Property
for the current or contemplated use thereof have been completed, are serviceable and all-weather and are
physically and legally open for use by the public.
(f) The Property is served by public water and sewer systems.
(g) The Property is free from damage caused by fire or other casualty.
(h) All costs and expenses of any and all labor, materials, supplies and equipment
used in the construction of the Improvements have been paid in full.
(i) Borrower has paid in full for, and is the owner of, all furnishings, fixtures and
equipment (other than tenants' property) used in connection with the operation of the Property, free and
clear of any and all security interests, liens or encumbrances, except the lien and security interest created
hereby.
0) All liquid and solid waste disposal, septic and sewer systems located on the
Property are in a good and safe condition and repair and in compliance with all Applicable Laws.
(k) All Improvements lie within the boundary of the Land.
Section 5.7 Separate Tax Lot. The Property is assessed for real estate tax purposes as one
or more wholly independent tax lot or lots, separate from any adjoining land or improvements not
constituting a part of such lot or lots, and no other land or improvements is assessed and taxed together
with the Property or any portion thereof.
Section 5.8 Leases.
(a) Borrower is the sole owner of the entire lessor's interest in the Leases;
(b) the Leases are valid and enforceable; (c) the terms of all alterations,
modifications and amendments to the Leases are reflected in the certified occupancy statement delivered
to and approved by Bank; (d) none of the Rents reserved in the Leases have been assigned or otherwise
pledged or hypothecated; (e) none of the Rents have been collected for more than one (1) month in
advance; (f) the premises demised under the Leases have been completed and the tenants under the Leases
have accepted the same and have taken possession of the same on a rent -paying basis; (g) there exist no
offsets or defenses to the payment of any portion of the Rents; (h) no Lease contains an option to
purchase, right of first refusal to purchase, or any other similar provision; (i) no person or entity has any
possessory interest in, or right to occupy, the Property except under and pursuant to a Lease; 0) each
Lease is subordinate to this Security Instrument, either pursuant to its terms or a recorded subordination
agreement; and (k) no Lease has the benefit of a non -disturbance agreement that would be considered
unacceptable to prudent institutional Banks.
{-u:s;43708.2i 10
165
Section 5.9 Disclosure. Borrower has disclosed to Bank all material facts and has not failed
to disclose any material fact that could cause any representation or warranty made herein to be materially
misleading.
ARTICLE 6 - OBLIGATIONS AND RELIANCES
Section 6.1 Relationship of Borrower and Bank. The relationship between Borrower and
Bank is solely that of debtor and creditor, and Bank has no fiduciary or other special relationship with
Borrower, and no term or condition of any of this Security Instrument and the Documents shall be
construed so as to deem the relationship between Borrower and Bank to be other than that of debtor and
creditor.
Section 6.2 No Reliance on Bank. The Borrower is experienced in the ownership and
operation of properties similar to the Property, and Borrower and Bank are relying solely upon such
expertise and business plan in connection with the ownership and operation of the Property. Borrower is
not relying on Bank's expertise, business acumen or advice in connection with the Property.
Section 6.3 No Bank Oblieations.
(a) Notwithstanding the provisions of Subsections 1.1(f) and 1.1(1) or Section 3.7,
Bank is not undertaking the performance of (i) any obligations under the Leases; or (ii) any obligations
with respect to such agreements, contracts, certificates, instruments, franchises, permits, trademarks,
licenses and other documents.
(b) By accepting or approving anything required to be observed, performed or
fulfilled or to be given to Bank pursuant to this Security Instrument or the Documents, including without
limitation, any officer's certificate, balance sheet, statement of profit and loss or other financial statement,
survey, appraisal, or insurance policy, Bank shall not be deemed to have warranted, consented to, or
affirmed the sufficiency, the legality or effectiveness of same, and such acceptance or approval thereof
shall not constitute any warranty or affirmation with respect thereto by Bank.
Section 6.4 Reliance. Borrower recognizes and acknowledges that in accepting this Security
Instrument and the Documents, Bank is expressly and primarily relying on the truth and accuracy of the
warranties and representations set forth in Article 5 without any obligation to investigate the Property and
notwithstanding any investigation of the Property by Bank; that such reliance existed on the part of Bank
prior to the date hereof; that the warranties and representations are a material inducement to Bank in
accepting this Security Instrument and the Documents; and that Bank would not be willing to purchase
the Bond and accept this Security Instrument in the absence of the warranties and representations as set
forth in Article 5.
ARTICLE 7 - FURTHER ASSURANCES
Section 7.1 Recording of Security Instrument, etc. For purposes of this Mortgage a
"Recordable Event" shall be defined to include any of the following: (i) any period on or after which the
governing body of the City of Fairhope takes action to elect not to renew the Appropriation Agreement;
(ii) any period that the Appropriation Agreement ceases to be in effect while the Bond is outstanding, or
(iii) default in the payment of principal of or interest on the Bond when due, and the continuation of such
default for a period of ten (10) days after there has been given notice of such default to the Borrower.
Upon a Recordable Event the Bank shall have the right to cause this Security Instrument and any of the
Documents creating a lien or security interest or evidencing the lien hereof upon the Property and each
instrument of further assurance to be filed, registered or recorded in such manner and in such places as
163
may be required by any present or future law in order to publish notice of and fully to protect and perfect
the lien or security interest hereof upon, and the interest of Bank in, the Property. The Bank hereby
covenants and agrees to hold this Mortgage in escrow and not to file and record the same until the
occurrence of a Recordable Event. In the event the Bank (including its successors and permitted assigns)
no longer is the holder of the Bond, the Bank shall promptly return this mortgage to the Borrower.
Borrower will pay all taxes, filing, registration or recording fees, and all expenses incident to the
preparation, execution, acknowledgment and/or recording of this Security Instrument, the Documents,
any note or mortgage supplemental hereto, any security instrument with respect to the Property and any
instrument of further assurance, and any modification or amendment of the foregoing documents, and all
federal, state, county and municipal taxes, duties, imposts, assessments and charges arising out of or in
connection with the execution and delivery of this Security Instrument, any mortgage supplemental
hereto, any security instrument with respect to the Property or any instrument of further assurance, and
any modification or amendment of the foregoing documents, except where prohibited by law so to do.
Section 7.2 Further Acts, etc. Upon a Recordable Event the Borrower will, at the cost of
the Borrower, furnish the Bank with such due diligence information concerning the Property as is
customary in a commercial real estate transaction, which information shall include an appraisal, title
commitment and insurance policy, an ALTA survey, and an environmental site assessment, all in the form
and substance acceptable to the Bank. Borrower will, at the cost of Borrower, and without expense to
Bank, do, execute, acknowledge and deliver all and every such further acts, deeds, conveyances,
mortgages, assignments, notices of assignments, transfers and assurances as Bank shall, from time to
time, require, for the better assuring, conveying, assigning, transferring, and confirming unto Bank the
property and rights hereby mortgaged, granted, bargained, sold, conveyed, confirmed, pledged, assigned,
warranted and transferred or intended now or hereafter so to be, or which Borrower may be or may
hereafter become bound to convey or assign to Bank, or for carrying out the intention or facilitating the
performance of the terms of this Security Instrument or for filing, registering or recording this Security
Instrument, or for complying with all Applicable Laws. Borrower, on demand, will execute and deliver
and hereby authorizes Bank to execute in the name of Borrower or without the signature of Borrower to
the extent Bank may lawfully do so, one or more financing statements, chattel mortgages or other
instruments, to evidence more effectively the security interest of Bank in the Property. Borrower grants to
Bank an irrevocable power of attorney coupled with an interest for the purpose of exercising and
perfecting any and all rights and remedies available to Bank at law and in equity, including without
limitation such rights and remedies available to Bank pursuant to this Section 7.2.
Section 7.3 Changes in Tax, Obligations, Credit and Documentary Stamp Laws.
(a) If any law is enacted or adopted or amended after the date of this Security
Instrument which deducts the monetary Obligations from the value of the Property for the purpose of
taxation or which imposes a tax, either directly or indirectly, on the Obligations or Bank's interest in the
Property, Borrower will pay the tax, with interest and penalties thereon, if any. If Bank is advised by
counsel chosen by it that the payment of tax by Borrower would be unlawful or taxable to Bank or
unenforceable or provide the basis for a defense of usury, then Bank shall have the option by written
notice of not less than ninety (90) days to declare the Obligations immediately due and payable.
(b) Borrower will not claim or demand or be entitled to any credit or credits on
account of the Obligations for any part of the Taxes or Other Charges assessed against the Property, or
any part thereof, and no deduction shall otherwise be made or claimed*from the assessed value of the
Property, or any part thereof, for real estate tax purposes by reason of this Security Instrument or the
Obligations. If such claim, credit or deduction shall be required by law, Bank shall have the option, by
written notice of not less than ninety (90) days, to declare the Obligations immediately due and payable.
12
161
(c) If at any time the United States of America, any State thereof or any subdivision
of any such State shall require revenue or other stamps to be affixed to this Security Instrument, or any of
the Documents or impose any other tax or charge on the same, Borrower will pay for the same, with
interest and penalties thereon, if any.
Section 7.4 Estoppel Certificates.
(a) The Borrower, within ten (10) days after its receipt of a written request by the
Bank, at Borrower's expense, will furnish the Bank with a statement, duly acknowledged and defined,
setting forth the amount of the Obligations and the offsets or defenses thereto, if any.
(b) Borrower shall deliver to Bank, promptly upon request, duly executed estoppel
certificates from any one or more lessees as required by Bank attesting to such facts regarding the Lease
as Bank may require, including but not limited to attestations that each Lease covered thereby is in full
force and effect with no defaults thereunder on the part of any party, that none of the Rents have been
paid more than one month in advance, that the lessee claims no defense or offset against the full and
timely performance of its obligations under the Lease and such other facts the Bank shall reasonably
require to be included in such estoppel certificates.
Section 7.5 Replacement Documents. Upon receipt of an affidavit of an officer of Bank as
to the loss, theft, destruction or mutilation of this Security Instrument or any Other Security Document
which is not of public record, and, in the case of any such mutilation, upon surrender and cancellation of
this Security Instrument or Other Security Document, Borrower will issue, in lieu thereof, a replacement
Other Security Document, dated the date of such lost, stolen, destroyed or mutilated Other Security
Document in the same principal amount thereof and otherwise of like tenor.
ARTICLE 8 - DUE ON SALE/ENCUMBRANCE
Section 8.1 Bank Reliance. Borrower acknowledges that Bank has examined and relied on
the experience of Borrower in owning and operating properties such as the Property in agreeing to
purchase the Bond, and will continue to rely on Borrower's ownership of the Property as a means of
maintaining the value of the Property as security for payment and performance of the Obligations.
Section 8.2 No Sale/Encumbrance. Borrower agrees that Borrower shall not sell, convey,
mortgage, grant, bargain, encumber, pledge, assign, or otherwise transfer the Property or any part thereof
or permit the Property or any part thereof to be sold, conveyed, mortgaged, granted, bargained,
encumbered, pledged, assigned, or otherwise transferred, except with respect to the rights of the City set
forth under that certain Agreement for Sale and Purchase dated of event date with the
Bond (as such agreement is in effect upon the date of issuance and delivery of the Bond to the Bank),
between the City and the Authority (under which the rights of the City are expressly subordinate to the
rights of the Bank hereunder).
ARTICLE 9 - DEFAULT
Section 9.1 Events of Default. The occurrence of any one or more of the following events
shall constitute an "Event of Default":
(a) if any portion of the Obligations is not paid within ten (10) days of the due date;
13
159
(b) if any of the Taxes or Other Charges is not paid when the same is due and
payable except to the extent sums sufficient to pay such Taxes and Other Charges have been deposited
with Bank in accordance with the terms of this Security Instrument;
(c) if the Policies are not kept in full force and effect, or if the Policies are not
delivered to Bank upon request or Borrower has not delivered evidence of the renewal of the Policies
thirty (30) days prior to their expiration as provided in Section 3.3(b);
(d) if Borrower violates or does not comply with any of the provisions of Section 3.7
or Articles 8, 11 or 12;
(e) if any representation or warranty of Borrower or any portion thereof or
performance by Borrower of any of the terms of this Security Instrument made herein or any guaranty, or
in any certificate, report, financial statement or other instrument or document furnished to Bank shall
have been false or misleading in any material respect when made;
(f) if (i) Borrower shall commence any case, proceeding or other action (A) under
any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, conservatorship or relief of debtors, seeking to have an order for relief entered with
respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding -up, liquidation, dissolution, composition or other relief with respect to it or its
Obligations, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar
official for it or for all or any substantial part of its assets, or Borrower shall make a general assignment
for the benefit of its creditors; or (ii) there shall be commenced against Borrower any case, proceeding or
other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief
or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a
period of sixty (60) days; or (iii) there shall be commenced against Borrower any case, proceeding or
other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all
or any substantial part of its assets which results in the entry of any order for any such relief which shall
not have been vacated, discharged, or stayed or bonded pending appeal within sixty (60) days from the
entry thereof; or (iv) Borrower shall take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) Borrower
shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its Obligations as
they become due;
(g) if Borrower shall be in default under any other mortgage, deed of trust, deed to
secure Obligations or other security agreement covering any part of the Property whether it be superior or
junior in lien to this Security Instrument;
(h) if the Property becomes subject to a Lien and the lien shall remain undischarged
of record (by payment, bonding or otherwise) for a period of thirty (30) days except for Permitted
Encumbrances;
(i) if any Federal tax lien is filed against the Property and same is not discharged of
record within thirty (30) days after same is filed except for Permitted Encumbrances;
0) if Borrower consummates a transaction which would cause this Security
Instrument or Bank's exercise of its rights under this Security Instrument or the Documents to constitute a
nonexempt prohibited transaction under ERISA or result in a violation of a state statute regulating
governmental plans, subjecting Bank to liability for a violation of ERISA or a state statute;
14
157
(k) if any default occurs under any guaranty or indemnity executed in connection
herewith and such default continues after the expiration of applicable grace periods, if any;
(1) if for more than ten (10) days after notice from Bank, Borrower shall continue to
be in default under any other term, covenant or condition of this Security Instrument or the Documents in
the case of any default which can be cured by the payment of a sum of money or for thirty (30) days after
notice from Bank in the case of any other default, provided that if such default cannot reasonably be cured
within such thirty (30) day period and Borrower shall have commenced to cure such default within such
thirty (30) day period and thereafter diligently and expeditiously proceeds to cure the same, such thirty
(30) day period shall be extended for so long as it shall require Borrower in the exercise of due diligence
to cure such default, it being agreed that no such extension shall be for a period in excess of sixty (60)
days;
ARTICLE 10 - RIGHTS AND REMEDIES
Section 10.1 Remedies. Upon or at anytime after the occurrence of any Event of Default,
Borrower agrees that Bank may take such action, without notice or demand, as it deems advisable to
protect and enforce its rights against Borrower and in and to the Property, including, but not limited to,
the following actions, each of which may be pursued concurrently or otherwise, at such time and in such
order as Bank may determine, in its sole discretion, without impairing or otherwise affecting the other
rights and remedies of Bank:
(a) declare the entire unpaid Obligations to be immediately due and payable;
(b) by civil action, mandamus or other proceeding enforce payment of such principal
or interest and compel performance of all duties of the Borrower and officers of the Borrower and shall be
entitled as a matter of right and regardless of the sufficiency of any security to the appointment of a
receiver with all the powers of such receiver for the operation and maintenance of the Property and the
collection, segregation and application of rents therefrom;
(c) institute an action, suit or proceeding in equity for the specific performance of
any covenant, condition or agreement contained herein, in the Documents;
(d) the license granted to Borrower in Section 1.2 of this Security Instrument shall
automatically be revoked, and Mortgagee shall immediately be entitled to possession of all Rents,
Proceeds and any and all sums due under any Lease Guaranties, whether or not Mortgagee enters upon or
takes control of the Property. In addition, Mortgagee may, at its option, without waiving such Event of
Default, without notice and without regard to the adequacy of the security for the Obligations, either in
person or by agent, nominee or attorney, with or without bringing any action or proceeding, or by a
receiver appointed by a court, dispossess Borrower and its agents and servants from the Property, without
liability for trespass, damages or otherwise and exclude Borrower and its agents or servants wholly
therefrom, and take possession of the Property and all books, records and accounts relating thereto and
have, hold, manage, lease and operate the Property on such terms and for such period of time as
Mortgagee may deem proper and either with or without taking possession of the Property in its own
name, demand, sue for or otherwise collect and receive all Rents, Proceeds and sums due under all Lease
Guaranties, including those past due and unpaid with full power to make from time to time all alterations,
renovations, repairs or replacements thereto or thereof as may seem proper to Mortgagee and may apply
the Rents, Proceeds and any sums received pursuant to any Lease Guaranties to the payment of the
following in such order and proportion as Mortgagee in its sole discretion may determine, any law,
custom or use to the contrary notwithstanding: (i) all expenses of managing and securing the Property,
including, without limitation, the salaries, fees and wages of a managing agent and such other employees,
15
155
contractors, or agents as Mortgagee may deem necessary or desirable and all expenses of operating and
maintaining the Property, including, without being limited thereto, all taxes, charges, claims, assessments,
water charges, sewer rents and any other liens, and premiums for all insurance which Mortgagee may
deem necessary or desirable, and the cost of all alterations, renovations, repairs or replacements, and all
expenses incident to taking and retaining possession of the Property; and (ii) the Obligations, together
with all costs and reasonable attorneys' fees. In addition, upon the occurrence of a Event of Default,
Mortgagee, at its option, may (A) complete any construction on the Property in such manner and form as
Mortgagee deems advisable, (B) exercise all rights and powers of Borrower, including, without limitation,
the right to negotiate, execute, cancel, enforce or modify Leases, obtain and evict tenants, and demand,
sue for, collect and receive all Rents, Proceeds and all sums due under any Lease Guaranties, (C) either
require Borrower to pay monthly in advance to Mortgagee, or any receiver appointed to collect the Rents,
the fair and reasonable rental value for the use and occupancy of such part of the Property as may be in
possession of Borrower or (D) require Mortgagee to vacate and surrender possession of the Property to
Mortgagee or to such receiver and, in default thereof, Borrower may be evicted by summary proceedings
or otherwise;
(e) exercise any and all rights and remedies granted to a secured party upon default
under the Uniform Commercial Code, including, without limiting the generality of the foregoing: (i) the
right to take possession of the Personal Property or any part thereof, and to take such other measures as
Bank may deem necessary for the care, protection and preservation of the Personal Property, and (ii)
request Borrower at its expense to assemble the Personal Property and make it available to Bank at a
convenient place acceptable to Bank. Any notice of sale, disposition or other intended action by Bank
with respect to the Personal Property sent to Borrower in accordance with the provisions hereof at least
five (5) days prior to such action, shall constitute commercially reasonable notice to Borrower;
(f) apply any sums then deposited in the Escrow Fund and any other sums held in
escrow or otherwise by Bank in accordance with the terms of this Security Instrument or any Other
Security Document to the payment of the following items in any order in its uncontrolled discretion:
(x) Taxes and Other Charges;
(y) Insurance Premiums; and
(z) All other sums payable pursuant to this Security Instrument and the
Documents, including without limitation advances made by Bank pursuant to the terms of this Security
Instrument;
(g) surrender the Policies maintained pursuant to Article 3 hereof, collect the
unearned Insurance Premiums and apply such sums as a credit on the Obligations in such priority and
proportion as Bank in its discretion shall deem proper, and in connection therewith, Borrower hereby
appoints Bank as agent and attorney -in -fact (which is coupled with an interest and is therefore
irrevocable) for Borrower to collect such Insurance Premiums;
(h) pursue such other remedies as Bank may have under applicable law; or
(i) apply the undisbursed balance of any Net Proceeds Deficiency deposit, together
with interest thereon, to the payment of the Obligations in such order, priority and proportions as Bank
shall deem to be appropriate in its discretion.
(WO7537e8.2) 16
153
Notwithstanding the provisions of this Section 10.1 to the contrary, if any Event of Default as
described in Section 9.1(f) shall occur, the entire unpaid Obligations shall be automatically due and
payable, without any further notice, demand or other action by Bank.
Section 10.2 Application of Proceeds. The purchase money, proceeds and avails of any
disposition of the Property, or any part thereof, or any other sums collected by Bank pursuant this
Security Instrument or the Documents, may be applied by Bank to the payment of the Obligations in such
priority and proportions as Bank in its discretion shall deem proper.
Section 10.3 Right to Cure Defaults. Upon the occurrence of any Event of Default or if
Borrower fails to make any payment or to do any act as herein provided, Bank may, but without any
obligation to do so and without notice to or demand on Borrower and without releasing Borrower from
any obligation hereunder, make or do the same in such manner and to such extent as Bank may deem
necessary to protect the security hereof. Bank is authorized to enter upon the Property for such purposes,
or appear in, defend, or bring any action or proceeding to protect its interest in the Property or to foreclose
this Security Instrument or collect the Obligations, and the cost and expense thereof (including reasonable
attorneys' fees to the extent permitted by law), with interest as provided in this Section 10.3, shall
constitute a portion of the Obligations and shall be due and payable to Bank upon demand. All such costs
and expenses incurred by Bank in remedying such Event of Default or such failed payment or act or in
appearing in, defending, or bringing any such action or proceeding shall bear interest at the rate of interest
in effect for the Bond (the 'Bond Interest Rate"), for the period after notice from Bank that such cost or
expense was incurred to the date of payment to Bank. All such costs and expenses incurred by Bank
together with interest thereon calculated at the Bond Interest Rate shall be deemed to constitute a portion
of the Obligations and be secured by this Security Instrument and the Documents and shall be
immediately due and payable upon demand by Bank therefor.
Section 10.4 Actions and Proceedings. Bank has the right to appear in and defend any action
or proceeding brought with respect to the Property and to bring any action or proceeding, in the name and
on behalf of Borrower, which Bank, in its discretion, decides should be brought to protect its interest in
the Property.
Section 10.5 Recovery of Sums Required To Be Paid. Bank shall have the right from time
to time to take action to recover any sum or sums which constitute a part of the Obligations as the same
become due, without regard to whether or not the balance of the Obligations shall be due, and without
prejudice to the right of Bank thereafter to bring an action of foreclosure, or any other action, for a default
or defaults by Borrower existing at the time such earlier action was commenced.
Section 10.6 Examination of Books and Records. Bank, its agents, accountants and
attorneys shall have the right to examine the records, books, management and other papers of Borrower
which reflect upon its financial condition, at the Property or at any office regularly maintained by
Borrower where the books and records are located. Bank and its agents shall have the right to make
copies and extracts from the foregoing records and other papers. In addition, Bank, its agents, accountants
and attorneys shall have the right to examine and audit the books and records of Borrower pertaining to
the income, expenses and operation of the Property during reasonable business hours at any office of
Borrower where the books and records are located. This Section 10.6 shall apply without regard to
whether an Event of Default has occurred or is continuing.
Section 10.7 Other Rights, etc.
(a) The failure of Bank to insist upon strict performance of any term hereof shall not
be deemed to be a waiver of any term of this Security Instrument. Borrower shall not be relieved of
17
151
Borrower's obligations hereunder by reason of (i) the failure of Bank to comply with any request of
Borrower to take any action to foreclose this Security Instrument or otherwise enforce any of the
provisions hereof or of the Documents, (ii) the release, regardless of consideration, of the whole or any
part of the Property, or of any person liable for the Obligations or any portion thereof, or (iii) any
agreement or stipulation by Bank extending the time of payment or otherwise modifying or
supplementing the terms of this Security Instrument or the Documents.
(b) It is agreed that the risk of loss or damage to the Property is on Borrower, and
Bank shall have no liability whatsoever for decline in value of the Property, for failure to maintain the
Policies, or for failure to determine whether insurance in force is adequate as to the amount of risks
insured. Possession by Bank shall not be deemed an election of judicial relief, if any such possession is
requested or obtained, with respect to any Property or collateral not in Bank's possession.
(c) Bank may resort for the payment of the Obligations to any other security held by
Bank in such order and manner as Bank, in its discretion, may elect. Bank may take action to recover the
Obligations, or any portion thereof, or to enforce any covenant hereof without prejudice to the right of
Bank thereafter to foreclose this Security Instrument. The rights of Bank under this Security Instrument
shall be separate, distinct and cumulative and none shall be given effect to the exclusion of the others. No
act of Bank shall be construed as an election to proceed under any one provision herein to the exclusion
of any other provision. Bank shall not be limited exclusively to the rights and remedies herein stated but
shall be entitled to every right and remedy now or hereafter afforded at law or in equity.
Section 10.8 Right to Release Any Portion of the Property. Bank may release any portion
of the Property for such consideration as Bank may require without, as to the remainder of the Property,
in any way impairing or affecting the lien or priority of this Security Instrument, or improving the
position of any subordinate lienholder with respect thereto, except to the extent that the obligations
hereunder shall have been reduced by the actual monetary consideration, if any, received by Bank for
such release, and may accept by assignment, pledge or otherwise any other property in place thereof as
Bank may require without being accountable for so doing to any other lienholder. This Security
Instrument shall continue as a lien and security interest in the remaining portion of the Property.
Section 10.9 Violation of Laws. If the Property is not in compliance with Applicable Laws,
Bank may impose additional requirements upon Borrower in connection herewith including, without
limitation, monetary reserves or financial equivalents.
Section 10.10 Recourse and Choice of Remedies. Notwithstanding any other provision of this
Security Instrument, including but not limited to Article 14 hereof, Bank and other Indemnified Parties
(defined in Section 13.1 below) are entitled to enforce the obligations of Borrower contained in Sections
12.2 and 12.3 and 12.4 without first resorting to or exhausting any security or collateral and without first
having recourse to any of the Property, through foreclosure or acceptance of a deed in lieu of foreclosure
or otherwise, and in the event Bank commences a foreclosure action against the Property, Bank is entitled
to pursue a deficiency judgment with respect to such obligations against Borrower. Notwithstanding the
foregoing, nothing herein shall inhibit or prevent Bank from foreclosing pursuant to this Security
Instrument or exercising any other rights and remedies pursuant to this Security Instrument and the
Documents, whether simultaneously with foreclosure proceedings or in any other sequence. A separate
action or actions may be brought and prosecuted against Borrower, whether or not action is brought
against any other person or entity or whether or not any other person or entity is joined in the action or
actions. In addition, Bank shall have the right but not the obligation to join and participate in, as a party if
it so elects, any administrative or judicial proceedings or actions initiated in connection with any matter
addressed in Article 11 or Section 12.4.
18
149
Section 10.11 Risht of Entry. Bank and its agents shall have the right to enter and inspect the
Property at all reasonable times.
ARTICLE 11- ENVIRONMENTAL HAZARDS
Section 11.1 Environmental Representations and Warranties. To the best of Borrower's
knowledge, after due inquiry, (a) there are no Hazardous Substances or underground storage tanks in, on,
or under the Property, except those that are both (i) in compliance with all Environmental Laws including
all permits issued pursuant thereto and (ii) fully disclosed to Bank in the written report(s) resulting from
the environmental assessment(s) of the Property delivered to Bank; (b) there are no past, present or
threatened Releases of Hazardous Substances in, on, under or from the Property except as described in the
Environmental Report; (c) there is no threat of any Release of Hazardous Substances migrating to the
Property except as described in the Environmental Report; (d) there is no past or present non-compliance
with Environmental Laws, including permits issued pursuant thereto, in connection with the Property,
except as described in the Environmental Report; (e) Borrower does not know of, and has not received,
any written or oral notice or other communication relating to Hazardous Substances or remediation of the
Property, alleging possible liability or commencing or threatening administrative or judicial proceedings
pursuant to any Environmental Law in connection with the Property, and (f) Borrower has truthfully and
fully provided to Bank, in writing, any and all information relating to conditions in, on, under or from the
Property that is known to Borrower relating to Hazardous Substances in, on, under or from the Property
and/or to the environmental condition of the Property.
Section 11.2 Omitted.
Section 11.3 Bank's Riehts/Cooperation and Access. The Bank and any other person or
entity designated by Bank (including but not limited to any receiver, any representative of a governmental
entity and any environmental consultant), shall have the right but not the obligation to enter upon the
Property at all reasonable times to assess any and all aspects of the environmental condition of the
Property and its use, including but not limited to conducting any environmental assessment or audit (the
scope of which shall be determined in Bank's sole and absolute discretion) and taking samples of soil,
groundwater or other water, air or building materials, and conducting other invasive testing. Borrower
shall cooperate with and provide access to such Persons and any such person or entity designated by
Bank.
Section 11.4 Definitions. Capitalized terms used in this Article 11 of the Security
Instrument and not otherwise defined herein shall have the meanings ascribed to them in this
Section 11.4. `Environmental Laws" means all federal, state and local laws, statutes, rules,
regulations, ordinances, programs, permits, guidances, orders and consent decrees relating to
health, safety and environmental matters applicable to the Borrower and its business, assets and
property, including, without limitation, the Resource Conservation and Recovery Act, 42 U.S.C.
§ 6901 et seq., as amended; CERCLA; the Toxic Substance Act, 15 U.S.C. § 2601 et seg., as
amended; the Clean Water Act, 33 U.S.C. § 466 et M., as amended; the Clean Air Act, 42
U.S.C. § 7401 et seg., as amended; state and federal superlien and environmental cleanup
programs; and U. S. Department of Transportation regulations. "Hazardous Substance" means,
but is not limited to, hazardous substances, materials, wastes, and waste constituents and reaction
by-products, pesticides, oil and other petroleum products, and toxic substances, including,
without limitation, asbestos and PCBs, as those terms are defined pursuant to Environmental
Laws. "Release" means any release, deposit, discharge, emission, leaking, leaching, spilling,
19
147
seeping, migrating, injecting, pumping, pouring, emptying, escaping, dumping, disposing or
other movement of Hazardous Substances.
ARTICLE 12 - INDEMNIFICATION
Section 12.1 General Indemnification. Borrower shall, at its sole cost and expense, protect,
defend, indemnify, release and hold harmless the Indemnified Parties from and against any and all claims,
suits, liabilities (including, without limitation, strict liabilities), actions, proceedings, obligations,
Obligations, damages, losses, costs, expenses, diminutions in value, fines, penalties, charges, fees,
expenses, judgments, awards, amounts paid in settlement, punitive damages, foreseeable and
unforeseeable consequential damages, of whatever kind or nature (including but not limited to attorneys'
fees and other costs of defense) (the "Losses") imposed upon or incurred by or asserted against any
Indemnified Parties and directly or indirectly arising out of or in any way relating to any one or more of
the following: (a) ownership of this Security Instrument, the Property or any interest therein or receipt of
any Rents; (b) any amendment to, or restructuring of, the Obligations or this Security Instrument or any
Documents; (c) any and all lawful action that may be taken by Bank in connection with the enforcement
of the provisions of this Security Instrument or any of the Documents, whether or not suit is filed in
connection with same, or in connection with Borrower becoming a party to a voluntary or involuntary
federal or state bankruptcy, insolvency or similar proceeding; (d) any accident, injury to or death of
persons or loss of or damage to property occurring in, on or about the Property or any part thereof or on
the adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways; (e) any use,
nonuse or condition in, on or about the Property or any part thereof or on the adjoining sidewalks, curbs,
adjacent property or adjacent parking areas, streets or ways; (f) any failure on the part of Borrower to
perform or be in compliance with any of the terms of this Security Instrument; (g) performance of any
labor or services or the furnishing of any materials or other property in respect of the Property or any part
thereof; (h) any failure of the Property to be in compliance with any Applicable Laws; (i) the enforcement
by any Indemnified Party of the provisions of this Article 12; 0) any and all claims and demands
whatsoever which may be asserted against Bank by reason of any alleged obligations or undertakings on
its part to perform or discharge any of the terms, covenants, or agreements contained in any Lease or (1)
any misrepresentation made by Borrower in this Security Instrument or any Other Security Document.
Any amounts payable to Bank by reason of the application of this Section 12.1 shall become immediately
due and payable and shall bear interest at the Bond Interest Rate from the date loss or damage is sustained
by Bank until paid. For purposes of this Article 12, the term "Indemnified Parties" means Bank and any
person or entity who is or will have been involved in the purchase of the Bond secured hereby, any person
or entity in whose name the encumbrance created by this Security Instrument is or will have been
recorded, persons and entities who may hold or acquire or will have held a full or partial interest in the
Bond as well as the respective directors, officers, shareholders, partners, employees, agents, servants,
representatives, contractors, subcontractors, affiliates, subsidiaries, participants, successors and assigns of
any and all of the foregoing (including but not limited to any other person or entity who holds or acquires
or will have held a participation or other full or partial interest in the loan secured hereby or the Property,
whether during the term of the loan secured hereby or as a part of or following a foreclosure of the loan
secured hereby and including, but not limited to, any successors by merger, consolidation or acquisition
of all or a substantial portion of Bank's assets and business).
Section 12.2 Morteaue and/or IntanEible Tax. Borrower shall, at its sole cost and expense,
protect, defend, indemnify, release and hold harmless the Indemnified Parties from and against any and
all Losses imposed upon or incurred by or asserted against any Indemnified Parties and directly or
indirectly arising out of or in any way relating to any tax on the making and/or recording of this Security
Instrument or any of the Documents.
708.2f 20
145
Section 12.3 ERISA Indemnification. Borrower shall, at its sole cost and expense, protect,
defend, indemnify, release and hold harmless the Indemnified Parties from and against any and all Losses
(including, without limitation, attorneys' fees and costs incurred in the investigation, defense, and
settlement of Losses incurred in correcting any prohibited transaction or in the sale of a prohibited loan,
and in obtaining any individual prohibited transaction exemption under ERISA that may be required, in
Bank's sole discretion) that Bank may incur, directly or indirectly, as a result of a default under Section
9.10).
Section 12.4 Environmental Indemnification. Borrower shall, at its sole cost and expense,
protect, defend, indemnify, release and hold harmless the Indemnified Parties from and against any and
all Losses and costs of Remediation (whether or not performed voluntarily), engineers' fees,
environmental consultants' fees, and costs of investigation (including but not limited to sampling, testing,
and analysis of soil, water, air, building materials and other materials and substances whether solid, liquid
or gas) imposed upon or incurred by or asserted against any Indemnified Parties, and directly or indirectly
arising out of or in any way relating to any one or more of the following: (a) any presence of any
Hazardous Substances in, on, above, or under the Property; (b) any past, present or threatened Release of
Hazardous Substances in, on, above, under or from the Property; (c) any activity by Borrower, any person
or entity affiliated with Borrower or any tenant or other user of the Property in connection with any
actual, proposed or threatened use, treatment, storage, holding, existence, disposition or other Release,
generation, production, manufacturing, processing, refining, control, management, abatement, removal,
handling, transfer or transportation to or from the Property of any Hazardous Substances at any time
located in, under, on or above the Property; (d) any activity by Borrower, any person or entity affiliated
with Borrower or any tenant or other user of the Property in connection with any actual or proposed
Remediation of any Hazardous Substances at any time located in, under, on or above the Property,
whether or not such Remediation is voluntary or pursuant to court or administrative order, including but
not limited to any removal, remedial or corrective action; (e) any past or present non-compliance or
violations of any Environmental Laws (or permits issued pursuant to any Environmental Law) in
connection with the Property or operations thereon, including but not limited to any failure by Borrower,
any person or entity affiliated with Borrower or any tenant or other user of the Property to comply with
any order of any governmental authority in connection with any Environmental Laws; (f) the imposition,
recording or filing of any Environmental Lien encumbering the Property; (g) any administrative processes
or proceedings or judicial proceedings in any way connected with any matter addressed in Article 12 and
this Section 12.4; (h) any past, present or threatened injury to, destruction of or loss of natural resources
in any way connected with the Property, including but not limited to costs to investigate and assess such
injury, destruction or loss; (i) any acts of Borrower or other users of the Property in arranging for disposal
or treatment, or arranging with a transporter for transport for disposal or treatment, of Hazardous
Substances owned or possessed by such Borrower or other users, at any facility or incineration vessel
owned or operated by another person or entity and containing such or any similar Hazardous Substance;
0) any acts of Borrower or other users of the Property, in accepting any Hazardous Substances for
transport to disposal or treatment facilities, incineration vessels or sites selected by Borrower or such
other users, from which there is a Release, or a threatened Release of any Hazardous Substance which
causes the incurrence of costs for Remediation; (k) any personal injury, wrongful death, or property
damage arising under any statutory or common law or tort law theory, including but not limited to
damages assessed for the maintenance of a private or public nuisance or for the conducting of an
abnormally dangerous activity on or near the Property; and (1) any misrepresentation or inaccuracy in any
representation or warranty or material breach or failure to perform any covenants or other obligations
pursuant to Article 12. This indemnity shall survive any termination, satisfaction or foreclosure of this
Security Instrument.
Section 12.5 Duty to Defend; Attorneys' Fees and Other Fees and Expenses. Upon written
request by any Indemnified Party, Borrower shall defend such Indemnified Party (if requested by any
(WO7437es.} 21
143
Indemnified Party, in the name of the Indemnified Party) by attorneys and other professionals approved
by the Indemnified Parties. Notwithstanding the foregoing, any Indemnified Parties may, in their sole and
absolute discretion, engage their own attorneys and other professionals to defend or assist them, and, at
the option of Indemnified Parties, their attorneys shall control the resolution of claim or proceeding. Upon
demand, Borrower shall pay or, in the sole and absolute discretion of the Indemnified Parties, reimburse,
the Indemnified Parties for the payment of reasonable fees and disbursements of attorneys, engineers,
environmental consultants, laboratories and other professionals in connection therewith.
ARTICLE 13 - WAIVERS
Section 13.1 Waiver of Counterclaim. Borrower hereby waives the right to assert a
counterclaim, other than a mandatory or compulsory counterclaim, in any action or proceeding brought
against it by Bank arising out of or in any way connected with this Security Instrument, any of the
Documents, or the Obligations.
Section 13.2 Marshalling and Other Matters. Borrower hereby waives, to the extent
permitted by law, the benefit of all appraisement, valuation, stay, extension, reinstatement and redemption
laws now or hereafter in force and all rights of marshalling in the event of any sale hereunder of the
Property or any part thereof or any interest therein. Further, Borrower hereby expressly waives any and all
rights of redemption from sale under any order or decree of foreclosure of this Security Instrument on
behalf of Borrower, and on behalf of each and every person acquiring any interest in or title to the
Property subsequent to the date of this Security Instrument and on behalf of all persons to the extent
permitted by applicable law.
Section 13.3 Waiver of Notice. Borrower shall not be entitled to any notices of any nature
whatsoever from Bank except with respect to matters for which this Security Instrument specifically and
expressly provides for the giving of notice by Bank to Borrower and except with respect to matters for
which Bank is required by applicable law to give notice, and Borrower hereby expressly waives the right
to receive any notice from Bank with respect to any matter for which this Security Instrument does not
specifically and expressly provide for the giving of notice by Bank to Borrower.
Section 13.4 Waiver of Statute of Limitations. Borrower hereby expressly waives and
releases to the fullest extent permitted by law, the pleading of any statute of limitations as a defense to
payment or performance of the Obligations.
Section 13.5 Sole Discretion of Bank. Wherever pursuant to this Security Instrument (a)
Bank exercises any right given to it to approve or disapprove, (b) any arrangement or term is to be
satisfactory to Bank, or (c) any other decision or determination is to be made by Bank, the decision of
Bank to approve or disapprove, all decisions that arrangements or terms are satisfactory or not satisfactory
and all other decisions and determinations made by Bank, shall be in the sole and absolute discretion of
Bank and shall be final and conclusive, except as may be otherwise expressly and specifically provided
herein.
Section 13.6 Survival. The indemnifications made pursuant to Sections 12.2, 12.3 and 12.4
and the representations and warranties, covenants, and other obligations arising under Article 11, shall
continue indefinitely in full force and effect and shall survive and shall in no way be impaired by: any
satisfaction or other termination of this Security Instrument, any assignment or other transfer of all or any
portion of this Security Instrument or Bank's interest in the Property (but, in such case, shall benefit both
Indemnified Parties and any assignee or transferee), any exercise of Bank's rights and remedies pursuant
hereto including but not limited to foreclosure or acceptance of a deed in lieu of foreclosure, any exercise
of any rights and remedies pursuant to any of the Documents, any transfer of all or any portion of the
22
141
Property (whether by Borrower or by Bank following foreclosure or acceptance of a deed in lieu of
foreclosure or at any other time), any amendment to this Security Instrument or the Documents, and any
act or omission that might otherwise be construed as a release or discharge of Borrower from the
obligations pursuant hereto.
Section 13.7 WAIVER OF TRIAL BY JURY. MORTGAGOR HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR
OTHERWISE, RELATING DIRECTLY OR INDIRECTLY UNDER OR IN CONNECTION WITH
THIS SECURITY INSTRUMENT, THE ASSIGNMENT OF LEASES OR THE DOCUMENTS OR
ANY ACTS OR OMISSIONS OF MORTGAGEE, ITS OFFICERS, EMPLOYEES, DIRECTORS OR
AGENTS IN CONNECTION THEREWITH.
ARTICLE 14 - NOTICES
Section 14.1 Notices. All notices, requests and demands to or upon the respective parties
hereto to be effective shall be in writing and shall be deemed to have been duly given or made when
delivered by hand (or when refused delivery), three (3) days after being deposited in any post office or
mail depository regularly maintained by the U.S. Postal Service and sent by certified mail, return receipt
requested postage prepaid, or one (1) business day after being deposited with a nationally recognized
overnight courier, addressed at their addresses set forth below or to such other address as may be hereafter
notified by the respective parties hereto:
If to the Mortgagor, r• to:
The Fairhope Airport Authority
161 N. Section Street
Fairhope, Alabama 36532
Attention: Chairman
If to the Mortgagee, to:
RBC Bank (USA)
3725 Highway 14
Millbrook, Alabama 36054
Attn: Tony Mills
Tel: (334) 290-2624
Fax: (334) 290-2626
and
RBC Bank (USA)
301 Fayetteville Street, Suite 1100
Raleigh, North Carolina 27601
Attn: Aaron J. Miller
Tel: (919) 788-7556
Fax: (919) 788-5515
With a copy to:
23
1.39
E. Alston Ray
Johnston Barton Proctor & Rose LLP
Colonial Brookwood Center
569 Brookwood Village, Suite 901
Birmingham, Alabama 35209
Tel: (205) 458-9488
Fax: (205) 458-9500
ARTICLE 15 - SERVICE OF PROCESS
Section 15.1 Consent to Service. Borrower irrevocably consents to service of the courts of
the State of Alabama and the United States District Court located in the Southern District of Alabama,
and appellate courts from any thereof for any litigation and waives any other venue to which it might be
entitled by virtue of domicile, habitual residence or otherwise.
Section 15.2 Submission to Jurisdiction. With respect to any claim or action arising
hereunder or under the Documents, Borrower (a) irrevocably submits to the nonexclusive jurisdiction of
the courts of the State of Alabama and the United States District Court located in the Southern District of
Alabama and the county in which the Property is located, and appellate courts from any thereof, and (b)
irrevocably waives any objection which it may have at any time to the laying on venue of any suit, action
or proceeding arising out of or relating to this Security Instrument brought in any such court, irrevocably
waives any claim that any such suit, action or proceeding brought in any such court has been brought in
an inconvenient forum.
Section 15.3 Jurisdiction. Nothing in this Security Instrument will be deemed to preclude
Bank from bringing an action or proceeding with respect hereto in any other jurisdiction.
ARTICLE 16 - APPLICABLE LAW
Section 16.1 Choice of Law. This Security Instrument shall be governed, construed, applied
and enforced in accordance with the laws of the State of Alabama and the applicable laws of the United
States of America.
Section 16.2 Usury Laws. This Security Instrument is subject to the express condition that at
no time shall Borrower be obligated or required to pay interest on the Obligations at a rate which could
subject the holder of the Note to either civil or criminal liability as a result of being in excess of the
maximum interest rate which Borrower is permitted by applicable law to contract or agree to pay. If by
the terms of this Security Instrument, Borrower is at any time required or obligated to pay interest on the
Obligations at a rate in excess of such maximum rate, the rate of interest under the Security Instrument
shall be deemed to be immediately reduced to such maximum rate and the interest payable shall be
computed at such maximum rate and all prior interest payments in excess of such maximum rate shall be
applied and shall be deemed to have been payments in reduction of the monetary Obligations.
Section 16.3 Provisions Subiect to Applicable Law. All rights, powers and remedies
provided in this Security Instrument may be exercised only to the extent that the exercise thereof does not
violate any applicable provisions of law and are intended to be limited to the extent necessary so that they
will not render this Security Instrument invalid, unenforceable or not entitled to be recorded, registered or
filed under the provisions of any applicable law. If any term of this Security Instrument or any application
thereof shall be invalid or unenforceable, the remainder of this Security Instrument and any other
application of the term shall not be affected thereby.
24
137
ARTICLE 17 - COSTS
Section 17.1 Performance at Borrower's Expense. Borrower acknowledges and confirms
that Bank shall impose certain administrative processing and/or commitment fees in connection with (a)
the extension, renewal, modification, amendment and termination of its loans, (b) the release or
substitution of collateral therefor, (c) obtaining certain consents, waivers and approvals with respect to the
Property, or (d) the review of any Lease or proposed lease or the preparation or review of any
subordination, non -disturbance agreement (the occurrence of any of the above shall be called an "Event").
Borrower further acknowledges and confirms that it shall be responsible for the payment of all costs of
reappraisal of the Property or any part thereof, whether required by law, regulation, Bank or any
governmental or quasi -governmental authority. Borrower hereby acknowledges and agrees to pay,
immediately, with or without demand, all such fees (as the same may be increased or decreased from time
to time), and any additional fees of a similar type or nature which may be imposed by Bank from time to
time, upon the occurrence of any Event or otherwise. Wherever it is provided for herein that Borrower
pay any costs and expenses, such costs and expenses shall include, but not be limited to, all legal fees and
disbursements of Bank, whether of retained firms, the reimbursement for the expenses of in-house staff or
otherwise.
Section 17.2 Attorney's Fees for Enforcement. (a) Borrower shall pay all legal fees incurred
by Bank in connection with (i) the preparation of this Security Instrument and the Documents and (ii) the
items set forth in Section 17.1 above, and (b) Borrower shall pay to Bank on demand any and all
expenses, including legal expenses and attorneys' fees, incurred or paid by Bank in protecting its interest
in the Property or Personal Property or in collecting any amount payable hereunder or in enforcing its
rights hereunder with respect to the Property or Personal Property, whether or not any legal proceeding is
commenced hereunder or thereunder and whether or not any default or Event of Default shall have
occurred and is continuing, together with interest thereon at the Bond Interest Rate from the date paid or
incurred by Bank until such expenses are paid by Borrower.
ARTICLE 18 - DEFINITIONS
Section 18.1 General Definitions. Unless the context clearly indicates a contrary intent or
unless otherwise specifically provided herein, words used in this Security Instrument may be used
interchangeably in singular or plural form and the word "Borrower" means "each Borrower and any
subsequent owner or owners of the Property or any part thereof or any interest therein," the word "Bank"
means "Bank and any successor thereto," the word "person" shall include an individual, corporation,
partnership, trust, unincorporated association, government, governmental authority, and any other entity,
the word "Property" shall include any portion of the Property and any interest therein, and the phrases
"attorneys' fees", "legal fees" and "counsel fees" shall include any and all attorneys', paralegal and law
clerk fees and disbursements, including, but not limited to, fees and disbursements at the pre-trial, trial
and appellate levels incurred or paid by Bank in protecting its interest in the Property, the Leases and the
Rents and enforcing its rights hereunder.
ARTICLE 19 - MISCELLANEOUS PROVISIONS
Section 19.1 No Oral Chance. This Security Instrument, and any provisions hereof, may not
be modified, amended, waived, extended, changed, discharged or terminated orally or by any act or
failure to act on the part of Borrower or Bank, but only by an agreement in writing signed by the party
against whom enforcement of any modification, amendment, waiver, extension, change, discharge or
termination is sought.
(WO7537e8.2} 25
135
Section 19.2 Liability. If Borrower consists of more than one person, the obligations and
liabilities of each such person hereunder shall be joint and several. This Security Instrument shall be
binding upon and inure to the benefit of Borrower and Bank and their respective successors and assigns
forever.
Section 19.3 Inapplicable Provisions. If any term, covenant or condition of the Note or this
Security Instrument is held to be invalid, illegal or unenforceable in any respect, the Note and this
Security Instrument shall be construed without such provision.
Section 19.4 Headines, etc. The headings and captions of various Sections of this Security
Instrument are for convenience of reference only and are not to be construed as defining or limiting, in
any way, the scope or intent of the provisions hereof.
Section 19.5 Duplicate Orginals; Counterparts. This Security Instrument may be executed
in any number of duplicate originals and each duplicate original shall be deemed to be an original. This
Security Instrument may be executed in several counterparts, each of which counterparts shall be deemed
an original instrument and all of which together shall constitute a single Security Instrument. The failure
of any party hereto to execute this Security Instrument, or any counterpart hereof, shall not relieve the
other signatories from their obligations hereunder.
Section 19.6 Number and Gender. Whenever the context may require, any pronouns used
herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of
nouns and pronouns shall include the plural and vice versa.
Section 19.7 Subrogation. If any or all of the proceeds of the Note have been used to
extinguish, extend or renew any indebtedness heretofore existing against the Property, then, to the extent
of the funds so used, Bank shall be subrogated to all of the rights, claims, liens, titles, and interests
existing against the Property heretofore held by, or in favor of, the holder of such indebtedness and such
former rights, claims, liens, titles, and interests, if any, are not waived but rather are continued in full
force and effect in favor of Bank and are merged with the lien and security interest created herein as
cumulative security for the payment, performance and discharge of the Obligations, including the
performance and discharge of Borrower's obligations hereunder and under the Documents.
Section 19.8 Entire Agrreement. This Security Instrument and the Documents constitute the
entire understanding and agreement between Borrower and Bank with respect to the transactions arising
in connection with the Obligations and supersede all prior written or oral understandings and agreements
between Borrower and Bank with respect thereto. Borrower hereby acknowledges that, except as
incorporated in writing in this Security Instrument and the Documents, there are not, and were not, and no
persons are or were authorized by Bank to make, any representations, understandings, stipulations,
agreements or promises, oral or written, with respect to the transaction which is the subject of this
Security Instrument and the Documents.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;
SIGNATURE PAGE TO FOLLOW]
26
133
IN WITNESS WHEREOF, THIS SECURITY INSTRUMENT has been executed by
Mortgagor and Mortgagee as of the day and year first above written.
[SEAL]
Attest:
Secretary
MORTGAGOR:
THE FAIRHOPE AIRPORT AUTHORITY,
an Alabama public corporation
M-
Chairman of the Board of Directors
MORTGAGEE:
RBC BANK (USA),
a North Carolina banking corporation
Name:
Its:
27
131
STATE OF ALABAMA
COUNTY of
I, , a notary public in and for said County in said State, hereby
certify that whose name as Chairman of the Board of Directors
of The Fairhope Airport Authority, a public corporation, is signed to the foregoing instrument and who is
known to me, acknowledged before me on this day that, being informed of the contents of the instrument,
he, as such officer and with full authority, executed the same voluntarily for and as the act of said
corporation.
Given under my hand this the 26TH day of August, 2010.
[SEAL]
My commission expires:
z
STATE OF ALABAMA
COUNTY OF
Notary Public
I, , a notary public in and for said County in said State, hereby
certify that whose name as of
RBC BANK(USA), a North Carolina banking corporation, is signed to the foregoing instrument and who
is known to me, acknowledged before me on this day that, being informed of the contents of the
instrument, he, as such officer and with full authority, executed the same voluntarily for and as the act of
said corporation.
28
129
Given under my hand this the day of , 2010.
[SEAL]
My commission expires:
Notary Public
29
127
EXHIBIT A
(Description of Land)
A-1
125
Summary Report:
Litera Change -Pro ML 6.5.0.189 Document Comparison done on 8/11/2010
5:57:13 AM
Style Name: Default Style
Original Filename:
Original DMS:dm:/BHM/2063183/3
Modified Filename:
Modified DMS: dm://BHNV2063183/4
Changes:
Add
20
Delete-
18
Move From
2
Move To
2
Table Insert
0
Tableciete
0
Embedded Graphics Visio, ChemDraw, Images etc.
0
Embedded Excel
10
Total Changes:
142
123
AGREEMENT FOR SALE AND PURCHASE
This Agreement for Sale and Purchase (the "Agreement") is made and entered into by and
between the City of Fairhope, Alabama, a municipal corporation (the "City"), and Fairhope
Airport Authority, an Alabama public corporation (the "Authority").
RECITALS:
The City has previously authorized and approved the formation of the Authority and
transferred to the Authority the H.L. "Sonny" Callahan Airpo (sometimes also known as the
Fairhope Municipal Airport and referred to herein as the "Airpo ), cated within the City.
In order to foster continued economic growth an eNe* lent
within the City, as well as to
improve the quality of life and well-being of the citizen ofthe Authority has previously (i)
acquired certain parcels of real property located at or rorport and more particularly
described in Exhibit A attached hereto (the "New Property") for futu a ansion and improvement
of the Airport; (ii) constructed and acquired taxiways and related c i improvements at the
Airport; and (iii) refinanced a construction loan made to construct and acc i aircraft hangars for
use by aircraft owners and operators at the Airport (the "2007 Airport Impr a ent Project" and,
together with the New Property, the "�Q 7 Project").
In order to finance the 2007 Pr e e
Bonds, Series 2007 (the "Series 2007 B t s"
Bonds the City and the Authority entere ,�i tc
2007 (the "2007 Appropriation Agreement
amounts necessary to provide for the payme
Bonds and certain other fees and expenses with
thority issued its $8,845,000 Airport Improvement
sInNqpnection with the issuance of the Series 2007
an riation Agreement, dated as of March 1,
)rovi�lih fo ayments to the Authority of certain
' fie irin�i
es �Mereto.and interest on the Series 2007
In cjpnection with the 2007 Appropriati4lk,,kgreement the City and the Authority also
entered i a ee nt, dated March 15, 2007 (t 007 Purchase Agreement"), providing that
under conditio subject and subordinate to certain agreements entered into with respect
to the 2007 Bonds, a uthority, upon written request from the City, was obligated to transfer
fee simpl it in and to the e Property and all improvements thereon to the City for consideration
of $10.00.
The AutOOT' as dete d and deemed it necessary, desirable and in the public interest
for the Authority t i� u nd iv r its [$8,910,000] Airport Improvement Refunding Bond, Series
2010 (the "2010 Bond" , ' er make funds available to refund and retire the Series 2007 Bonds
and to pay the costs of issu a 2010 Bond, and RBC Bank (USA) (the "Purchaser") has agreed to
purchase the Bond from the Authority. As security for the payment of the 2010 Bond the Authority
will deliver a Mortgage and Security Agreement in favor of the Purchaser respecting the Property
(the "2010 Mortgage") which may be recorded by the Purchaser upon the occurrence of certain
events described in the 2010 Mortgage.
In connection with the issuance of the 2010 Bond the City and the Authority have entered
into an Appropriation Agreement of even date herewith (the "2010 Appropriation Agreement")
pursuant to which the City has agreed to appropriate during each fiscal year of the City during which
the 2010 Appropriation Agreement is in effect an amount equal to the amounts then due on the Bond,
all subject to the terms of the 2010 Appropriation Agreement. As a condition to the delivery of the
121
2010 Appropriation Agreement by the City the City and the Authority have agreed to enter into this
Agreement to set forth the agreements and understandings of the City and the Authority with respect
to the New Property and improvements thereon.
NOW THEREFORE, the parties hereby covenant, promise and agree as follows:
1. If, at any time on or after March 15, 2012, while the 2010 Bond is outstanding and
the 2010 Appropriation Agreement is in effect the Authority does not reimburse the
City for principal payments made by the City under the Appropriation Agreement,
upon written request of the City the Authority shall be obligated to transfer fee simple
title in and to the New Property and all improvements thereon to the City in exchange
for $10.00 from the City.
2. The terms of this Agreement are subject to the 2010 Bond and the 2010 Mortgage
and any and all other agreements 9&Wd into or executed in connection with the
issuance of the 2010 Bond on of the date hereof (collectively, the "Bond
Documents'). In the event the of this Agreement shall conflict with the terms
of the Bond Documents, the term' o he Bond Documents shall govern.
IN WITNESS WHEREOF, the parties have t, it nds and seals on this 26t' day of
August, 2010.
(SEAL)
By:
Attest:
City Clerk
(SEAL)
Attest:
Secretary
11114281_1
FAIRHOPE, ALABAMA
As Its Mayor
FAIRHOPE AIRPORT AUTHORITY
Chairman of the
Board of Directors
119
STATE OF ALABAMA ) -
COUNTY OF BALDWIN )
I, , a notary public in and for said County in said State,
hereby certify that Timothy M. Kant, whose name as Mayor of the City of Fairhope, a municipal
corporation, is signed to the foregoing instrument and who is known to me, acknowledged before me
on this day that, being informed of the contents of the instrument, he, as such officer and with full
authority, executed the same voluntarily for and as the act of said municipal corporation.
Notary Yub11c
My commission expires:
State,
of the
who is
of the
as the
117
EXHIBIT A
Prolegy Description
115
I, JOE MCENERNEY, as Secretary of the FAIRHOPE AIRPORT
AUTHORITY, a public corporation under the laws of the State of Alabama (the "Authority")
hereby certify that the attached pages numbered consecutively from 1 to 14, inclusive, together
with the form of Mortgage and Security Agreement attached as Exhibit I, the form of 2010
Appropriaton Agreement attached as Exhibit II, and the form of Agreement for Sale and
Purchase attached as Exhibit III, constitute a true, correct and complete copy of all those portions
of the minutes of a regular public meeting of the Board of Directors of the Authority held on the
17t' day of August, 2010, that pertain to the matters therein set out, as the said minutes appear in
the records of the said Authority in my office.
WITNESS my signature as the Secretary of the said Authority, under its seal, this
26t` day of August, 2010.
Secretary
FAIRHOPE AIRPORT AUTHORITY
(SEAL)
109
A RESOLUTION AUTHORIZING THE ISSUANCE OF
ONE AIRPORT IMPROVEMENT REFUNDING BOND, SERIES 2010
IN THE PRINCIPAL AMOUNT OF [$8,910,000]
BE IT RESOLVED by the Board of Directors (the "Directors") of the
FAIRHOPE AIRPORT AUTHORITY, a public corporation under the laws of the State of
Alabama (the "Authority"), as follows:
Section 1. Findings. The Directors have found and ascertained and do
hereby declare as follows:
(a) The Authority heretofore issued its $8,845,000 Airport
Improvement Bonds, Series 2007 (the "Series 2007 Bonds") pursuant to the terms
of that certain Trust Indenture dated as of March 1, 2007 (the "2007 Indenture")
between the Authority and Regions Bank, as trustee (the "2007 Trustee") for the
purpose of providing funds to pay costs of (i) acquiring two parcels of real
property located around and adjacent to the then existing site of the operations of
the H.L. "Sonny" Callahan Airport, sometimes known as the Fairhope Municipal
Airport (the "Airport"), for future expansion of the Airport including, but not
limited to, extending the existing runway and/or constructing a new runway at the
Airport, constructing a terminal facility for general public use, providing a noise
reduction buffer for the Airport, and constructing parking and general landscape
improvements for the Airport; (ii) constructing and acquiring taxiway
improvements at the Airport; (iii) refinancing a loan to construct and acquire
hangars available to the public for use by aircraft owners and operators (the
"Improvements" and, together with the Loan and the Property, the "2007
Project"); and (iv) paying the costs of issuing the Series 2007 Bonds;
(b) As security for payment of the Series 2007 Bonds, Allied Irish
Banks, p.l.c., acting through its New York Branch (the "2007 Credit Obligor"),
issued, pursuant to a Credit Agreement dated as of March 1, 2007 (the "2007
Credit Agreement") between the Authority and the 2007 Credit Obligor, an
irrevocable letter of credit (the "2007 Letter of Credit") in favor of the 2007
Trustee to enable the 2007 Trustee to pay debt service on the Series 2007 Bonds
and to pay the purchase price of Series 2007 Bonds tendered for purchase
pursuant to the mandatory or optional tender provisions of the 2007 Indenture;
(c) The Series 2007 Bonds have a stated maturity of March 1, 2032,
but in light of various downgrades of the creditworthiness of the 2007 Credit
Obligor it is uncertain whether and to what extent it now is feasible for the
Authority to realize the intentions of a long-term financing of the Series 2007
Bonds utilizing the 2007 Letter of Credit or a substitute letter of credit, and the
Authority has been advised that it would be advantageous, if possible, to refinance
107
the Series 2007 Bonds through the sale of a bond containing substantially similar
security and payment obligations as the Series 2007 Bonds to a banking
institution;
(d) The Directors have determined and deem it necessary, desirable
and in the public interest for the Authority to issue and deliver its [$8,910,000]
Airport Improvement Refunding Bond, Series 2010 (the "Bond"), authorized
herein in order to make funds available to refund and retire the Series 2007 Bonds
and to pay the costs of issuing the Bond, and RBC Bank (USA) (the "Purchaser")
has agreed to purchase the Bond from the Authority;
(e) In connection with the issuance of the Bond, the City of Fairhope,
Alabama (the "City") and the Authority will enter into an Appropriation
Agreement to be dated August 26, 2010 (the "2010 Appropriation Agreement")
pursuant to which the City shall agree to appropriate during each fiscal year of the
City during which the 2010 Appropriation Agreement is in effect an amount equal
to the amounts then due on the Bond, all subject to the terms of the 2010
Appropriation Agreement; and
(f) As security for the performance of certain payment obligations of
the City under the 2010 Appropriation Agreement, the City has caused the
Authority to deliver a Mortgage and Security Agreement in favor of the Purchaser
respecting the Property (the "2010 Mortgage") which may be recorded by the
Purchaser upon the occurrence of certain events described in the 2010 Mortgage.
Section 2. Pursuant to the constitution and laws of the State of Alabama,
including particularly Section 4-3-40 et. seq, of the Code of Alabama 1975, as amended, and for
the purpose of providing funds to refund and retire the Series 2007 Bonds, the Authority is
hereby authorized to borrow from RBC Bank (USA) (herein sometimes called the "Purchaser")
the principal amount of [$8,910,000] and, in evidence of the money so borrowed, is authorized to
issue and deliver to the Purchaser an Airport Improvement Refunding Bond, Series 2010, in the
principal amount of [$8,910,000] (the "Bond"). The Bond shall be dated August 26, 2010 (the
"Closing Date"), shall be issued as a single fully registered bond and shall be payable to the
Purchaser. Installments of principal on the Bond shall become due and payable on March 1 of
each year, commencing March 1, 2013, in the amounts and at the times as follows:
Maturity Date
Principal Amount
(March 1)
Maturing
2013
$240,000
2014
255,000
2015
270,000
2016
285,000
2017
305,000
2018
320,000
2019
340,000
2020
6,895,000
ii
105
The interest rate on the Bond is subject to change from time to time based on
changes in an independent index which is the LIBOR Base Rate (the "Index"). The Index is not
necessarily the lowest rate charged by the Purchaser on its loans or bonds purchased by the
Purchaser. If the Index becomes unavailable during the term of the Bond, the Purchaser may
designate a substitute Index (as further described in this paragraph below) after providing
reasonable written notice of the same to the Authority. The Purchaser will notify the Authority
in writing of the current Index rate upon the Authority's request. The interest rate change will
not occur more often than each month. The "LIBOR Base Rate" is the London Interbank Offer
Rate for U.S. dollars for a term of one month which appears on Bloomberg Professional screen
BBAM (or any generally recognized successor method or means of publication) as of 11:00
A.M., London time, two (2) London business days prior to the day on which the rate will become
effective. The rate will initially become effective on the date of the Bond as shown on the face
of the Bond. Thereafter, the rate will change and a new rate will become effective on the first
calendar day of each succeeding month. If for any reason the London Interbank Offer Rate is not
available, the "LIBOR Base Rate" shall mean the rate per annum which banks charge each other
in a market comparable to England's Eurodollar market on short-term money in U. S. dollars for
an amount substantially equivalent to the principal amount due under the Bond, as determined at
11:00 A.M., London time, two (2) London business days prior to the day on which the rate will
become effective, as determined in the Purchaser's sole discretion. The Purchaser's
determination of such interest rate shall be conclusive, absent manifest error. The Authority
understands that the Purchaser may make loans or purchase bonds based on other rates as well.
Interest on the unpaid principal balance of the Bond will be calculated using a rate of 135 basis
points (1.35%) over the Index. If a payment is 15 days or more late, the Authority will be
charged 5.000% of the unpaid portion of the regularly scheduled payment.
Interest shall be computed on the basis of a 360 day year with 12 months of 30
days each, and shall be payable in arrears on the first day of each month, commencing September
1, 2010, (each, an "Interest Payment Date") until the Bond shall have been fully paid. In the
event an Interest Payment Date is not a Business Day, the interest due shall be payable on the
then next succeeding Business Day.
Section 3. Execution of the Bond; Registration. (a) The Bond shall be
executed and the corporate seal of the Authority shall be affixed thereto by the Chairman of the
Directors, and the Secretary of the Authority shall attest the same by affixing his signature
thereto. The Bond shall be registered in the records maintained by the Secretary of the
Authority. Said officers are hereby authorized and directed so to execute and attest the Bond,
affix said seal thereto and make such registration.
(b) A registration certificate by the Authority, in substantially the form set
forth in Section 6 hereof, duly executed by the manual signature of the Secretary of the
Authority, shall be endorsed on the Bond and shall be essential to its validity.
(c) The Bond shall be registered as to both principal and interest in the name
of the Purchaser and shall not be transferable.
5
103
Section 4. Optional Redemption. The Authority hereby reserves the right of
prepaying the principal of the Bond, in whole or in part, on any date at and for a redemption
price equal to 100% of the principal amount to be redeemed, plus accrued interest (if any) to the
days set for redemption (said date, the "Redemption Date"), upon not less than five (5) Business
Days prior written notice to the Purchaser; provided, that any principal prepayments shall be in
amounts not less than $100,000 and, in any event, in increments of $10,000. Prepayments of
principal shall be deemed to apply to those principal installments with the latest maturities, in
inverse order. If any notice of redemption specifies a Redemption Date that is not a Business
Day, such notice shall be deemed to specify the next following Business Day.
Section 5. Security. The indebtedness evidenced and ordered paid by the
Bond is and shall be a limited obligation of the Authority payable solely from amounts received
by (or for the account of) the Authority pursuant to the 2010 Appropriation Agreement.
Performance by the Authority of its payment obligations under the Bond shall be secured by the
2010 Mortgage. The general faith and credit of the Authority are not pledged to payment of the
principal of or the interest or premium, if any, on the Bond, and the Bond shall not be a general
obligation of the Authority. None of the agreements, representations or warranties made or
implied in this resolution, or in the issuance of the Bond shall ever impose any personal or
pecuniary liability or charge upon the Authority, whether before or after any breach by the
Authority of any such agreement, representation or warranty, except with the moneys herein
provided. The Authority shall not in any manner be liable for payment of the principal of or the
premium, if any, or interest on the Bond or for the performance of any of the obligations of the
Authority herein contained or contained in the Bond other than out of amounts received by the
Authority under the 2010 Appropriation Agreement. Nothing contained in this section, however,
shall relieve the Authority or its officers from its or their obligation to perform the several
agreements on its or their part contained herein so long as such performance does not impose a
general liability or charge upon the Authority.
Section 6. Form of Bond. The Bond shall be in substantially the following
form, with such changes therein as shall be necessary to comply with the provisions of this
Resolution:
C'.
101
(Form of Bond)
THIS BOND MAY BE TRANSFERRED ONLY TO AN "ACCREDITED INVESTOR"
AS DEFINED IN THE SECURITIES AND EXCHANGE ACT OF 1933 AND THE
RULES AND REGULATIONS PROMULGATED THEREUNDER AND ONLY UPON
COMPLIANCE WITH APPLICABLE STATE AND FEDERAL SECURITIES LAWS
AND WITH THE RESOLUTION REFERRED TO HEREIN
[$8,910,000]
Dated: August 26, 2010
UNITED STATES OF AMERICA
STATE OF ALABAMA
FAIRHOPE AIRPORT AUTHORITY
AIRPORT IMPROVEMENT REFUNDING BOND
SERIES 2010'
The FAIRHOPE AIRPORT AUTHORITY, a public corporation under the laws of the
State of Alabama (herein called the "Authority"), hereby promises to pay to RBC BANK (USA),
or its assigns (the "Purchaser"), the principal sum of
[EIGHT MILLION NINE HUNDRED TEN THOUSAND DOLLARS]
in annual installments of principal becoming become due and payable on March 1 of each year,
commencing March 1, 2013, in the amounts and at the times as follows:
Maturity Date
Principal Amount
(March 1)
Maturing
2013
$240,000
2014
255,000
2015
270,000
2016
285,000
2017
305,000
2018
320,000
2019
340,000
2020
6,895,000
The interest rate on this bond is subject to change from time to time based on
changes in an independent index which is the LIBOR Base Rate (the "Index"). The Index is not
necessarily the lowest rate charged by the Purchaser on its loans or bonds purchased by the
Purchaser. If the Index becomes unavailable during the term of this bond, the Purchaser may
designate a substitute Index (as further described in this paragraph below) after providing
reasonable written notice of the same to the Authority. The Purchaser will notify the Authority
7
r' '
in writing of the current Index rate upon the Authority's request. The interest rate change will
not occur more often than each month. The "LIBOR Base Rate" is the London Interbank Offer
Rate for U.S. dollars for a term of one month which appears on Bloomberg Professional screen
BBAM (or any generally recognized successor method or means of publication) as of 11:00
A.M., London time, two (2) London business days prior to the day on which the rate will become
effective. The rate will initially become effective on the date of this bond as shown on the face
hereof. Thereafter, the rate will change and a new rate will become effective on the first
calendar day of each succeeding month. If for any reason the London Interbank Offer Rate is not
available, the "LIBOR Base Rate" shall mean the rate per annum which banks charge each other
in a market comparable to England's Eurodollar market on short-term money in U. S. dollars for
an amount substantially equivalent to the principal amount due under this bond, as determined at
11:00 A.M., London time, two (2) London business days prior to the day on which the rate will
become effective, as determined in the Purchaser's sole discretion. The Purchaser's
determination of such interest rate shall be conclusive, absent manifest error. The Authority
understands that the Purchaser may make loans or purchase bonds based on other rates as well.
Interest on the unpaid principal balance of this bond will be calculated using a rate of 135 basis
points (1.35%) over the Index. If a payment is 15 days or more late, the Authority will be
charged 5.000% of the unpaid portion of the regularly scheduled payment.
Interest shall be computed on the basis of a 360 day year with 12 months of 30
days each, and shall be payable in arrears on the first day of each month, commencing September
1, 2010, (each, an "Interest Payment Date") until this bond shall have been fully paid. In the
event an Interest Payment Date is not a Business Day, the interest due hereon shall be payable on
the then next succeeding Business Day.
This bond has been issued pursuant to the applicable provisions of the constitution
and laws of the State of Alabama, including particularly Section 4-3-40 et seq. of the Code of
Alabama 1975, as amended (the "Enabling Law"), and a resolution (the "Resolution") of the
governing body of the Authority duly and legally adopted on August 9, 2010, to provide funds
for the purposes for which the Authority is authorized to borrow money under the Enabling Law.
This bond evidences a valid limited obligation of the Authority for payment of the
principal of and the interest on which the Authority has irrevocably pledged all funds and
amounts received by (or for the account of) the Authority under an Appropriation Agreement
dated of even date herewith from the City of Fairhope, Alabama (the "2010 Appropriation
Agreement"). The indebtedness evidenced and ordered paid by this bond is and shall be a limited
obligation of the Authority payable solely from amounts received by the Authority pursuant to
the 2010 Appropriation Agreement. Performance by the Authority of its payment obligations
under this bond shall be secured by the 2010 Mortgage. The general faith and credit of the
Authority are not pledged to payment of the principal of or the interest or premium, if any, on
this bond, and this bond shall not be a general obligation of the Authority. None of the
agreements, representations or warranties made or implied in the Resolution, or in the issuance
of this bond shall ever impose any personal or pecuniary liability or charge upon the Authority,
whether before or after any breach by the Authority of any such agreement, representation or
warranty, except with the moneys herein provided. The Authority shall not in any manner be
liable for payment of the principal of or the premium, if any, or interest on this bond or for the
8
97
performance of any of the obligations of the Authority herein contained or contained in the
Resolution other than out of amounts received by the Authority under the 2010 Appropriation
Agreement. Nothing contained in this paragraph, however, shall relieve the Authority or its
officers from its or their obligation to perform the several agreements on its or their part
contained herein or in the Resolution so long as such performance does not impose a general
liability or charge upon the Authority.
The Authority shall have the right of prepaying the principal of this bond, in whole
or in part, on any date at and for a redemption price equal to 100% of the principal amount to be
redeemed, plus accrued interest (if any) to the days set for redemption (said date, the
"Redemption Date"), upon not less than five (5) Business Days prior written notice to the
Purchaser; provided, that any principal prepayments shall be in amounts not less than $100,000
and, in any event, in increments of $10,000. Prepayments of principal shall be deemed to apply
to those principal installments with the latest maturities, in inverse order. If any notice of
redemption specifies a Redemption Date that is not a Business Day, such notice shall be deemed
to specify the next following Business Day.
It is hereby certified that the indebtedness evidenced hereby has been duly and
legally incurred and will at the maturity hereof become lawfully due without condition,
abatement or offset of any description; that all conditions, actions and things required by the
constitution and laws of the State of Alabama to exist, be performed and happen precedent to and
in the issuance of this bond, exist, have been performed and have happened.
0
Mr'
IN WITNESS WHEREOF, the Authority has caused this bond to be executed
and its official seal to be hereunto affixed by the Chairman of the Board of Directors of the
Authority and has caused the same to be attested by the Secretary of the Authority, both of whom
have hereunto subscribed their signatures and are hereunto duly authorized, and has caused this
bond to be dated August 26, 2010.
[SEAL]
Attest:
FAIRHOPE AIRPORT AUTHORITY
Chairman
Board of Directors
Secretary
(Form of Certificate of Registration by the Secretary of the Authority)
I hereby certify that this bond was at the time of issuance thereof duly registered by me
as a limited obligation of the FAIRHOPE AIRPORT AUTHORITY.
Secretary
FAIRHOPE AIRPORT AUTHORITY
10
.a
Section 7. Sale and Delivery of Bond. The Bond is hereby sold to RBC
Bank (USA) at and for a purchase price equal to [$8,910,000] (the face amount of the Bond),
which shall be paid to the Authority at closing in immediately available funds. The Chairman of
the Board of Directors and the Secretary of the Authority are hereby authorized and directed to
deliver the Bond, which shall have been executed, sealed, attested and registered as herein
provided, to the Purchaser upon payment to the Authority by the Purchaser of an amount equal to
the purchase price of the Bond.
Section 8. Use of Proceeds. Acting pursuant to the authority granted under
Alabama law, including, without limitation, Section 40-3-51 Code of Alabama 1975, as
amended, a portion of the proceeds of the Bond shall be used to redeem and retire the Series
2007 Bonds. A portion of the proceeds of the Bond shall be used to pay the costs of issuing the
Bond.
Section 9. Redemption of Series 2007 Bonds. Acting pursuant to the
provisions of Section 6.01 of the 2007 Indenture, the Authority does hereby call for redemption
and payment on August 27, 2010 (the "Redemption Date"), all of the outstanding Series 2007
Bonds. Regions Bank, in its capacity as trustee under the 2007 Indenture, is hereby authorized
and directed to give notice to the holders of the Series 2007 Bonds of said redemption as set forth
in the 2007 Indenture, and to take such other actions and deliver such other notice as may be
necessary or desirable to enable the redemption and payment of the Series 2007 Bonds on the
Redemption Date.
Section 10. Authorization of 2010 Mortgage. The Authority has determined
to execute a Mortgage and Security Agreement in favor of the Purchaser, as mortgagee
thereunder (the "2010 Mortgage"), in substantially the form presented to the meeting at which
this resolution is adopted (which form shall be attached to the minutes of such meeting as Exhibit
I and which is hereby adopted in all respects as if set out in full herein) respecting the Property,
and on the date of issuance and delivery of the Bond to deliver said 2010 Mortgage to the
Purchaser. The Chairman or Vice -Chairman of the Directors is hereby authorized to execute and
deliver, contemporaneously with the issuance and delivery of the Bond, the Mortgage, and the
Secretary of the Authority is hereby authorized and directed to affix the corporate seal of the
Authority to the Mortgage and to attest the same.
Section 11. Authorization of 2010 Appropriation Agreement. The
Directors hereby authorize and direct the Chairman or Vice -Chairman of the Directors to execute
and deliver, for and in the name and behalf of the Authority, the 2010 Appropriation Agreement
in substantially the form presented to the meeting at which this resolution is adopted (which form
shall be attached to the minutes of such meeting as Exhibit II and which is hereby adopted in all
respects as if set out in full herein). The Secretary of the Authority is hereby authorized and
directed to affix the corporate seal of the Authority to the 2010 Appropriation Agreement and to
attest the same.
Section 12. Authorization of Agreement for Sale and Purchase. The
Authority has determined to execute an Agreement for Sale and Purchase with the City (the
"Agreement for Sale and Purchase"), in substantially the form presented to the meeting at which
11
91
this resolution is adopted (which form shall be attached to the minutes of such meeting as Exhibit
III and which is hereby adopted in all respects as if set out in full herein) respecting the Property.
The Chairman or Vice -Chairman of the Directors is hereby authorized to execute and deliver,
contemporaneously with the issuance and delivery of the Bond, the Agreement for Sale and
Purchase, and the Secretary of the Authority is hereby authorized and directed to affix the
corporate seal of the Authority to the Agreement for Sale and Purchase and to attest the same.
Section 13. Additional Documents Authorized. The Chairman of the
Directors and the Secretary of the Authority, or either of them, are each hereby authorized and
directed to execute such other documents or certificates necessary in order to carry out the
transactions contemplated by this Resolution. The Authority understands that one of the principal
inducements to the purchase of the Bond by the purchaser thereof is that the interest income on
the Bond be and remain exempt from federal income taxation. Accordingly, without any way
limiting the generality of the foregoing, the Chairman of the Directors and the Secretary of the
Authority are each hereby authorized and directed to cause to be prepared, signed on behalf of
the Authority and filed with the Internal Revenue Service a Form 8038-G or other form
prescribed by the Internal Revenue Service as a condition to the exemption of the interest income
on the Bond from federal income taxation. The Chairman of the Directors and the Secretary of
the Authority are each hereby authorized and directed to execute such certificates, agreements
and other documents respecting the Internal Revenue Code of 1986, as amended (herein called
the "Code"), as contemplated by this Resolution, to the end that the interest income on the Bond
be and remain exempt from federal income taxation.
Section 14. Concerning the Code. (a) General. The Authority recognizes
that the Code imposes certain conditions to the exemption from federal income taxation of
interest income on the Bond. Accordingly, the Authority agrees that it will continually comply
with all requirements imposed by the Code as a condition to the exemption from federal income
taxation of the interest income on the Bond. With respect to any question arising under this
Section 14, the Authority may rely upon an opinion of nationally recognized bond counsel
acceptable to it.
(b) Bond not to be "Private Activity Bonds". The Authority will not apply
the proceeds of the Bond or otherwise use or permit use of the facilities financed with sale
proceeds of the Series 2007 Bonds in a manner that would cause the Bond to be "private activity
bonds" within the meaning of Section 141(a) of the Code.
(c) Concerning the Arbitrage Provisions of the Code. The Authority
agrees that it will comply with all provisions of the Code necessary to preclude the Bond being
considered "arbitrage bonds" within the meaning of Section 148 of the Code.
(d) Required Rebate. The Authority recognizes and agrees that, absent the
expenditure of all of the proceeds of the Bond within six months from the date of the delivery of
the Bond, it will be necessary for all Required Rebates to be made in order for the interest
income on the Bond to be and remain exempt from federal income taxation. As used in this
Section 14, the term "Required Rebates" means the amounts, if any, required by the provisions of
Section 148(f) of the Code and any regulations of the Department of Treasury issued thereunder,
12
to be paid by the Authority to the United States of America in order that the Bond shall not be
treated as "arbitrage bonds" within the meaning of Section 103(b)(2) and Section 148 of the
Code.
(e) Designation of Bond as "Qualified Tax -Exempt Obligation" The
Authority hereby designates the Bond as a "qualified tax-exempt obligation" for the purpose of
paragraph (b)(3)(A) of Section 265 of the Internal Revenue Code of 1986, as amended, and, in
connection therewith and after due investigation and consideration, hereby finds, determines and
declares that the amount of tax-exempt obligations that have heretofore during the current
calendar year been issued by the Authority and the reasonably anticipated amount of tax-exempt
obligations that will be issued by the Authority during the current calendar year (including,
without limitation, the Bond) will not exceed the sum of $30,000,000.
Section 15. Creation of Contract. The provisions of this Resolution shall
constitute a contract between the Authority and the Purchaser of the Bond.
Section 16. Provisions of Resolution Severable. The provisions of this
Resolution are hereby declared to be severable. In the event any provision hereof shall be held
invalid by a court of competent jurisdiction, such invalidity shall not affect any other portion of
this Resolution.
60
13
I'M
thereupon moved that the resolution be finally adopted, which motion
was seconded by
approved [by unanimous vote].
and, upon the said motion being put to vote, was
ADOPTED AND APPROVED by the Board of Directors of the Authority this
17t' day of August, 2010.
ATTEST:
/s/ Joe McEnerney
Secretary
14
/s/ Charles R. Zunk
Chairman
Board of Directors
EXHIBIT I
FORM OF MORTGAGE AND SECURITY AGREEMENT
Exhibit I
EXHIBIT II
FORM OF AGREEMENT FOR SALE AND PURCHASE
Exhibit I
I, JOE MCENERNEY, as Secretary of the FAIRHOPE AIRPORT
AUTHORITY, a public corporation under the laws of the State of Alabama (the "Authority")
hereby certify that the attached pages numbered consecutively from I to —14, inclusive,
together with the form of Mortgage and Security Agreement attached as Exhibit I, the form of
2010 Approp iaton Agreement attached as Exhibit II and the form of Agreement for Sale and
Purchase attached as Exhibit III, constitute a true, correct and complete copy of all those portions
of the minutes of a speeilre ug lar public meeting of the Board of Directors of the Authority held
on the —17'h day of J*Auust, 2010, that pertain to the matters therein set out, as the said
minutes appear in the records of the said Authority in my office.
WITNESS my signature as the Secretary of the said Authority, under its seal, this
26t' day of J*Aug_ust, 2010.
Secretary
FAIRHOPE AIRPORT AUTHORITY
(SEAL)
79
MINUTES OF A MEETING OF
THE BOARD OF DIRECTORS OF THE
FAIRHOPE AIRPORT AUTHORITY
The Board of Directors (the "Directors") of FAIRHOPE AIRPORT
AUTHORITY, a public corporation under the laws of the State of Alabama (the "Authority")
held a regular public meeting at City Hall in the City of Fairhope, Alabama, on
-August 17, 2010, at 4:30 o'clock-,*in4 p.m. The following members of the Board of
Directors were present at the meeting:
PRESENT: ABSENT:
[Daniel Stankoski [None]
Joe McEnerney
Charles R. Zunk
Pamela Caudill
Rod Platt
Howard Hadley
Charles E. Bassett]
Charles R. Zunk, Chairman of the Board of Directors, acted as chairman of the meeting, and Joe
McEnerney, Secretary of the Authority, acted as secretary of the meeting. The Chairman stated
that each of the members of the Board of Directors had signed a waiver of notice of the time,
place and purpose of the meeting and that notice of the meeting had been posted at the place of
holding of the meeting and on the bulletin board in City Hall of the City of Fairhope, Alabama,
not later than Au ug st 6, 2010. Upon motion duly made, seconded and unanimously
adopted, said waiver and said notice with proof of posting was ordered spread upon the minutes
of this meeting at the end thereof. A quorum being present, the chairman declared the meeting
open for the transaction of business.
1
77
There was then presented to the meeting the form of a Mortgage and Security
Agreement, 2010 Appropriation Agreement and
Agreement for Sale and Purchase pertaining to athe proposed activity of the Board of Directors.
The following resolution was introduced in writing to the meeting:
Fa
75
A RESOLUTION AUTHORIZING THE ISSUANCE OF
ONE AIRPORT IMPROVEMENT REFUNDING BOND, SERIES 2010
IN THE PRINCIPAL AMOUNT OF [$8,910,000)
BE IT RESOLVED by the Board of Directors (the "Directors") of the
FAIRHOPE AIRPORT AUTHORITY, a public corporation under the laws of the State of
Alabama (the "Authority"), as follows:
Section 1. Findings. The Directors have found and ascertained and do
hereby declare as follows:
(a) The Authority heretofore issued its $8,845,000 Airport
Improvement Bonds, Series 2007 (the "Series 2007 Bonds") pursuant to the terms
of that certain Trust Indenture dated as of March 1, 2007 (the "2007 Indenture")
between the Authority and Regions Bank, as trustee (the "2007 Trustee") for the
purpose of providing funds to pay costs of (i) acquiring two parcels of real
property located around and adjacent to the then existing site of the operations of
the H.L. "Sonny" Callahan Airport, sometimes known as the Fairhope Municipal
Airport (the "Airport"), for future expansion of the Airport including, but not
limited to, extending the existing runway and/or constructing a new runway at the
Airport, constructing a terminal facility for general public use, providing a noise
reduction buffer for the Airport, and constructing parking and general landscape
improvements for the Airport; (ii) constructing and acquiring taxiway
improvements at the Airport; (iii) refinancing a loan to construct and acquire
hangars available to the public for use by aircraft owners and operators (the
"Improvements" and, together with the Loan and the Property, the "2007
Project"); and (iv) paying the costs of issuing the Series 2007 Bonds;
(b) As security for payment of the Series 2007 Bonds, Allied Irish
Banks, p.l.c., acting through its New York Branch (the "2007 Credit Obligor"),
issued, pursuant to a Credit Agreement dated as of March 1, 2007 (the "2007
Credit Agreement") between the Authority and the 2007 Credit Obligor, an
irrevocable letter of credit (the "2007 Letter of Credit") in favor of the 2007
Trustee to enable the 2007 Trustee to pay debt service on the Series 2007 Bonds
and to pay the purchase price of Series 2007 Bonds tendered for purchase
pursuant to the mandatory or optional tender provisions of the 2007 Indenture;
(c) The Series 2007 Bonds have a stated maturity of March 1, 2032,
bui) in light of various downgrades of the creditworthiness of the 2007 Credit
Obligor it is uncertain whether and to what extent it now is feasible for the
Authority to realize the intentions of a long-term financing of the Series 2007
Bonds utilizing the 2007 Letter of Credit or a substitute letter of credit, and the
73
Authority has been advised that it would be advantageous, if possible, to refinance
the Series 2007 Bonds through the sale of a bond containing substantially similar
security and payment obligations as the Series 2007 Bonds to a banking
institution;
(d) The Directors have determined and deem it necessary, desirable
and in the public interest for the Authority to issue and deliver its [$8,910,000]
Airport Improvement Refunding Bond, Series 2010 (the 'Bond"), authorized
herein in order to make funds available to refund and retire the Series 2007 Bonds
and to pay the costs of issuing the Bond, and RBC Bank (USA) (the "Purchaser")
has agreed to purchase the Bond from the Authority;
(e) In connection with the issuance of the Bond, the City of Fairhope,
Alabama (the "City") and the Authority enteredwill enter into an Appropriation
Agreement to be dated Au sugu t 26, 2010 (the "2010 Appropriation
Agreement") pursuant to which the City has-ag-eedshall agree to appropriate
during each fiscal year of the City during which the 2010 Appropriation
Agreement is in effect an amount equal to the amounts then due on the Bond, all
subject to the tetras of the 2010 Appropriation Agreement; and
(f) As security for the performance of certain payment obligations of
the City under the 2010 Appropriation Agreement, the City has caused the
Authority to deliver a Mortgage and Security Agreement in favor of the Purchaser
respecting the Property (the "2010 Mortgage") which may be recorded by the
Purchaser upon the occurrence of certain events described in the 2010 Mortgage.
Section 2. Pursuant to the constitution and laws of the State of Alabama,
including particularly Section 4-3-40 et. seq, of the Code of Alabama 1975, as amended, and for
the purpose of providing funds to refund and retire the Series 2007 Bonds, the Authority is
hereby authorized to borrow from RBC Bank (USA) (herein sometimes called the "Purchaser")
the principal amount of [$8,910,000] and, in evidence of the money so borrowed, is authorized to
issue and deliver to the Purchaser an Airport Improvement Refunding Bond, Series 2010, in the
principal amount of [$8,910,000] (the 'Bond"). The Bond shall be dated —August,
2010 (the "Closing Date"), shall be issued as a single fully registered bond and shall be payable
to the Purchaser. Installments of principal on the Bond shall become due and payable on March
1 of each year, commencing March 1, 2013, in the amounts and at the times as follows:
Maturity Date
Principal Amount
(March 1)
Maturing
2013
$240,000
2014
255,000
2015
270,000
2016
285,000
2017
305,000
2018
320,000
2019
340,000
4
71
2020 6,895,000
The interest rate on the Bond is subject to change from time to time based on
changes in an independent index which is the LIBOR Base Rate (the "Index"). The Index is not
necessarily the lowest rate charged by the Purchaser on its loans or bonds purchased by the
Purchaser. If the Index becomes unavailable during the term of the Bond, the Purchaser may
designate a substitute Index (as further described in this paragraph below) after providing
reasonable written notice of the same to the Authority. The Purchaser will notify the Authority
in writing of the current Index rate upon the Authority's request. The interest rate change will
not occur more often than each month. The "LIBOR Base Rate" is the London Interbank Offer
Rate for U.S. dollars for a term of one month which appears on Bloomberg Professional screen
BBAM (or any generally recognized successor method or means of publication) as of 11:00
A.M., London time, two (2) London business days prior to the day on which the rate will become
effective. The rate will initially become effective on the date of the Bond as shown on the face
of the Bond. Thereafter, the rate will change and a new rate will become effective on the first
calendar day of each succeeding month. If for any reason, the London Interbank Offer Rate is
not available, the "LIBOR Base Rate" shall mean the rate per annum which banks charge each
other in a market comparable to England's Eurodollar market on short-term money in U. S.
dollars for an amount substantially equivalent to the principal amount due under the Bond, as
determined at 11:00 A.M., London time, two (2) London business days prior to the day on which
the rate will become effective, as determined in the Purchaser's sole discretion. The Purchaser's
determination of such interest rate shall be conclusive, absent manifest error. The Authority
understands that the Purchaser may make loans or purchase bonds based on other rates as well.
Interest on the unpaid principal balance of the Bond will be calculated using a rate of 135 basis
points (1.35%) over the Index. If a payment is M15 days or more late, the Authority will be
charged 5.000% of the unpaid portion of the regularly scheduled payment.
Interest shall be computed on the basis of a 360 day year with 12 months of 30
days each, and shall be payable in arrears on the first day of each month, commencing September
1, 2010, (each, an "Interest Payment Date") until the Bond shall have been fully paid. In the
event an Interest Payment Date is not a Business Day, the interest due shall be payable on the
then next succeeding Business Day.
Section 3. Execution of the Bond; Registration. (a) The Bond shall be
executed and the corporate seal of the Authority shall be affixed thereto by the Chairman of the
Directors, and the Secretary of the Authority shall attest the same by affixing his signature
thereto. The Bond shall be registered in the records maintained by the Secretary of the
Authority. Said officers are hereby authorized and directed so to execute and attest the Bond,
affix said seal thereto and make such registration.
(b) A registration certificate by the Authority, in substantially the form set
forth in Section 6 hereof, duly executed by the manual signature of the Secretary of the
Authority, shall be endorsed on the Bond and shall be essential to its validity.
5
ME
(c) The Bond shall be registered as to both principal and interest in the name
of the Purchaser and shall not be transferable.
Section 4. Optional Redemption. The Authority hereby reserves the right of
prepaying the principal of the Bond, in whole or in part, on any date at and for a redemption
price equal to 100% of the principal amount to be redeemed, plus accrued interest (if any) to the
days set for redemption (said date, the "Redemption Date"), upon not less than five (5) Business
Days prior written notice to the Purchaser; provided, that any principal prepayments shall be in
amounts not less than $100,000 and, in any event, in increments of $10,000. Prepayments of
principal shall be deemed to apply to those principal installments with the latest maturities, in
inverse order. If any notice of redemption specifies a Redemption Date that is not a Business
Day, such notice shall be deemed to specify the next following Business Day.
Section 5. Security. The indebtedness evidenced and ordered paid by the
Bond is and shall be a limited obligation of the Authority payable solely from amounts received
by (or for the account of) the Authority pursuant to the 2010 Appropriation Agreement.
Performance by the Authority of its payment obligations under the Bond shall be secured by the
2010 Mortgage. The general faith and credit of the Authority are not pledged to payment of the
principal of or the interest or premium, if any, on the Bond, and the Bond shall not be a general
obligation of the Authority. None of the agreements, representations or warranties made or
implied in this resolution, or in the issuance of the Bond shall ever impose any personal or
pecuniary liability or charge upon the Authority, whether before or after any breach by the
Authority of any such agreement, representation or warranty, except with the moneys herein
provided. The Authority shall not in any manner be liable for payment of the principal of or the
premium, if any, or interest on the Bond or for the performance of any of the obligations of the
Authority herein contained or contained in the Bond other than out of amounts received by the
Authority under the 2010 Appropriation Agreement. Nothing contained in this section, however,
shall relieve the Authority or its officers from its or their obligation to perform the several
agreements on its or their part contained herein so long as such performance does not impose a
general liability or charge upon the Authority.
Section 6. Form of Bond. The Bond shall be in substantially the following
form, with such changes therein as shall be necessary to comply with the provisions of this
Resolution:
G
67
(Form of Bond)
THIS BOND MAY BE TRANSFERRED ONLY TO AN "ACCREDITED INVESTOR"
AS DEFINED IN THE SECURITIES AND EXCHANGE ACT OF 1933 AND THE
RULES AND REGULATIONS PROMULGATED THEREUNDER AND ONLY UPON
COMPLIANCE WITH APPLICABLE STATE AND FEDERAL SECURITIES LAWS
AND WITH THE RESOLUTION REFERRED TO HEREIN
[ 8,910,0001
Dated: August 26, 2010
UNITED STATES OF AMERICA
STATE OF ALABAMA
FAIRHOPE AIRPORT AUTHORITY
AIRPORT IMPROVEMENT REFUNDING BOND
SERIES 2010
The FAIRHOPE AIRPORT AUTHORITY, a public corporation under the laws of the
State of Alabama (herein called the "Authority"), hereby promises to pay to RBC BANK (USA),
or its assigns (the "Purchaser"), the principal sum of
[EIGHT MILLION NINE HUNDRED TEN THOUSAND DOLLARS]
in annual installments of principal becoming become due and payable on March 1 of each year,
commencing March 1, 2013, in the amounts and at the times as follows:
Maturity Date
Principal Amount
(March 1)
Maturing
2013
$240,000
2014
255,000
2015
270,000
2016
285,000
2017
305,000
2018
320,000
2019
340,000
2020
6,895,000
The interest rate on this bond is subject to change from time to time based on
changes in an independent index which is the LIBOR Base Rate (the "Index"). The Index is not
necessarily the lowest rate charged by the Purchaser on its loans or bonds purchased by the
Purchaser. If the Index becomes unavailable during the term of this bond, the Purchaser may
7
65
designate a substitute Index (as further described in this paragraph below) after providing
reasonable written notice of the same to the Authority. The Purchaser will notify the Authority
in writing of the current Index rate upon the Authority's request. The interest rate change will
not occur more often than each month. The "LIBOR Base Rate" is the London Interbank Offer
Rate for U.S. dollars for a term of one month which appears on Bloomberg Professional screen
BBAM (or any generally recognized successor method or means of publication) as of 11:00
A.M., London time, two (2) London business days prior to the day on which the rate will become
effective. The rate will initially become effective on the date of this bond as shown on the face
hereof. Thereafter, the rate will change and a new rate will become effective on the first
calendar day of each succeeding month. If for any reason the London Interbank Offer Rate is not
available, the "LIBOR Base Rate" shall mean the rate per annum which banks charge each other
in a market comparable to England's Eurodollar market on short-term money in U. S. dollars for
an amount substantially equivalent to the principal amount due under this bond, as determined at
11:00 A.M., London time, two (2) London business days prior to the day on which the rate will
become effective, as determined in the Purchaser's sole discretion. The Purchaser's
determination of such interest rate shall be conclusive, absent manifest error. The Authority
understands that the Purchaser may make loans or purchase bonds based on other rates as well.
Interest on the unpaid principal balance of this bond will be calculated using a rate of 135 basis
points (1.35%) over the Index. If a payment is 3015 days or more late, the Authority will be
charged 5.000% of the unpaid portion of the regularly scheduled payment.
Interest shall be computed on the basis of a 360 day year with 12 months of 30
days each, and shall be payable in arrears on the first day of each month, commencing September
1, 2010, (each, an "Interest Payment Date") until this bond shall have been fully paid. In the
event an Interest Payment Date is not a Business Day, the interest due hereon shall be payable on
the then next succeeding Business Day.
This bond has been issued pursuant to the applicable provisions of the constitution
and laws of the State of Alabama, including particularly Section 4-3-40 et seq. of the Code of
Alabama 1975, as amended (the "Enabling Law"), and a resolution (the "Resolution") of the
governing body of the Authority duly and legally adopted on August 9, 2010, to provide funds
for the purposes for which the Authority is authorized to borrow money under the Enabling Law.
This bond evidences a valid limited obligation of the Authority for payment of the
principal of and the interest on which the Authority has irrevocably pledged all funds and
amounts received by (or for the account of) the Authority under an Appropriation Agreement
dated , 2& 4,^f even date herewith from the City of Fairhope, Alabama (the "2010
Appropriation Agreement"). The indebtedness evidenced and ordered paid by this bond is and
shall be a limited obligation of the Authority payable solely from amounts received by the
Authority pursuant to the 2010 Appropriation Agreement. Performance by the Authority of its
payment obligations under this bond shall be secured by the 2010 Mortgage. The general faith
and credit of the Authority are not pledged to payment of the principal of or the interest or
premium, if any, on this bond, and this bond shall not be a general obligation of the Authority.
None of the agreements, representations or warranties made or implied in the Resolution, or in
the issuance of this bond shall ever impose any personal or pecuniary liability or charge upon the
Authority, whether before or after any breach by the Authority of any such agreement,
8
63
representation or warranty, except with the moneys herein provided. The Authority shall not in
any manner be liable for payment of the principal of or the premium, if any, or interest on this
bond or for the performance of any of the obligations of the Authority herein contained or
contained in the Resolution other than out of amounts received by the Authority under the 2010
Appropriation Agreement. Nothing contained in this paragraph, however, shall relieve the
Authority or its officers from its or their obligation to perform the several agreements on its or
their part contained herein or in the Resolution so long as such performance does not impose a
general liability or charge upon the Authority.
The Authority shall have the right of prepaying the principal of this bond, in whole
or in part, on any date at and for a redemption price equal to 100% of the principal amount to be
redeemed, plus accrued interest (if any) to the days set for redemption (said date, the
"Redemption Date"), upon not less than five (5) Business Days prior written notice to the
Purchaser; provided, that any principal prepayments shall be in amounts not less than $100,000
and, in any event, in increments of $10,000. Prepayments of principal shall be deemed to apply
to those principal installments with the latest maturities, in inverse order. If any notice of
redemption specifies a Redemption Date that is not a Business Day, such notice shall be deemed
to specify the next following Business Day.
It is hereby certified that the indebtedness evidenced hereby has been duly and
legally incurred and will at the maturity hereof become lawfully due without condition,
abatement or offset of any description; that all conditions, actions and things required by the
constitution and laws of the State of Alabama to exist, be performed and happen precedent to and
in the issuance of this bond, exist, have been performed and have happened.
6
61
IN WITNESS WHEREOF, the Authority has caused this bond to be executed
and its official seal to be hereunto affixed by the Chairman of the Board of Directors of the
Authority and has caused the same to be attested by the Secretary of the Authority, both of whom
have hereunto subscribed their signatures and are hereunto duly authorized, and has caused this
bond to be dated Au ust 26 2010.
[SEAL]
Attest:
Secretary
By
FAIRHOPE AIRPORT AUTHORITY
10
Chairman
Board of Directors
59
(Form of Certificate of Registration by the Secretary of the Authority)
I hereby certify that this bond was at the time of issuance thereof duly registered by me
as a limited obligation of the FAIRHOPE AIRPORT AUTHORITY.
Secretary
FAIRHOPE AIRPORT AUTHORITY
11
57
Section 7. Sale and Delivery of Bond. The Bond is hereby sold to RBC
Bank (USA) at and for a purchase price equal to [$8,910,000] (the face amount of the Bond),
which shall be paid to the Authority at closing in immediately available funds. The Chairman of
the Board of Directors and the Secretary of the Authority are hereby authorized and directed to
deliver the Bond, which shall have been executed, sealed, attested and registered as herein
provided, to the Purchaser upon payment to the Authority by the Purchaser of an amount equal to
the purchase price of the Bond.
Section 8. Use of Proceeds. Acting pursuant to the authority granted under
Alabama law, including, without limitation, Section 40-3-51 Code of Alabama 1975, as
amended, a portion of the proceeds of the Bond shall be used to redeem and retire the Series
2007 Bonds. A portion of the proceeds of the Bond shall be used to pay the costs of issuing the
Bond.
Section 9. Redemption of Series 2007 Bonds. Acting pursuant to the
provisions of Section 6.01 of the 2007 Indenture, the Authority does hereby call for redemption
and payment on —August 27 2010 (the "Redemption Date"), all of the
outstanding Series 2007 Bonds. Regions Bank, in its capacity as trustee under the 2007
Indenture, is hereby authorized and directed to give notice to the holders of the Series 2007
Bonds of said redemption as set forth in the 2007 Indenture, and to take such other actions and
deliver such other notice as may be necessary or desirable to enable the redemption and payment
of the Series 2007 Bonds on the Redemption Date.
Section 10. Authorization of 2010 Mortgage. The Authority has determined
to execute a Mortgage and Security Agreement in favor of the Purchaser, as mortgagee
thereunder (the "2010 Mortgage"), in substantially the form presented to the meeting at which
this resolution is adopted (which form shall be attached to the minutes of such meeting as Exhibit
I and which is hereby adopted in all respects as if set out in full herein) respecting the Property,
and on the date of issuance and delivery of the Bond to deliver said 2010 Mortgage to the
Purchaser. The Chairman or Vice -Chairman of the Directors is hereby authorized to execute and
deliver, contemporaneously with the issuance and delivery of the Bond, the Mortgage, and the
Secretary of the Authority is hereby authorized and directed to affix the corporate seal of the
Authority to the Mortgage and to attest the same.
Section 11. Authorization of 2010 Appropriation Agreement. The
Directors hereby authorize and direct the Chairman or Vice -Chairman of the Directors to execute
and deliver, for and in the name and behalf of the Authority, the 2010 Appropriation Agreement
in substantially the form presented to the meeting at which this resolution is adopted (which form
shall be attached to the minutes of such meeting as Exhibit II and which is hereby adopted in all
respects as if set out in full herein). The Secretary of the Authority is hereby authorized and
directed to affix the corporate seal of the Authority to the 2010 Appropriation Agreement and to
attest the same.
Section 12. Authorization of Agreement for Sale and Purchase. The
Authority has determined to execute an Agreement for Sale and Purchase with the City (the
12
55
"Agreement for Sale and Purchase"), in substantially the form presented to the meeting at which
this resolution is adopted (which form shall be attached to the minutes of such meeting as Exhibit
III and which is hereby adopted in all respects as if set out in full herein) respecting the Property.
The Chairman or Vice -Chairman of the Directors is hereby authorized to execute and deliver,
contemporaneously with the issuance and delivery of the Bond, the Agreement for Sale and
Purchase and the Secretary of the Authority is hereby authorized and directed to affix the
corporate seal of the Authority to the Agreement for Sale and Purchase and to attest the same.
Section 4413. Additional Documents Authorized. The Chairman of the
Directors and the Secretary of the Authority, or either of them, are each hereby authorized and
directed to execute such other documents or certificates necessary in order to carry out the
transactions contemplated by this Resolution. The Authority understands that one of the principal
inducements to the purchase of the Bond by the purchaser thereof is that the interest income on
the Bond be and remain exempt from federal income taxation. Accordingly, without any way
limiting the generality of the foregoing, the Chairman of the Directors and the Secretary of the
Authority are each hereby authorized and directed to cause to be prepared, signed on behalf of
the Authority and filed with the Internal Revenue Service a Form 8038-G or other form
prescribed by the Internal Revenue Service as a condition to the exemption of the interest income
on the Bond from federal income taxation. The Chairman of the Directors and the Secretary of
the Authority are each hereby authorized and directed to execute such certificates, agreements
and other documents respecting the Internal Revenue Code of 1986, as amended (herein called
the "Code"), as contemplated by this Resolution, to the end that the interest income on the Bond
be and remain exempt from federal income taxation.
Section 4-214. Concerning the Code. (a) General. The Authority recognizes
that the Code imposes certain conditions to the exemption from federal income taxation of
interest income on the Bond. Accordingly, the Authority agrees that it will continually comply
with all requirements imposed by the Code as a condition to the exemption from federal income
taxation of the interest income on the Bond. With respect to any question arising under this
Section 4-214, the Authority may rely upon an opinion of nationally recognized bond counsel
acceptable to it.
(b) Bond not to be "Private Activity Bonds". The Authority will not apply
the proceeds of the Bond or otherwise use or permit use of the facilities financed with sale
proceeds of the Series 2007 Bonds in a manner that would cause the Bond to be "private activity
bonds" within the meaning of Section 141(a) of the Code.
(c) Concerning the Arbitrage Provisions of the Code. The Authority
agrees that it will comply with all provisions of the Code necessary to preclude the Bond being
considered "arbitrage bonds" within the meaning of Section 148 of the Code.
(d) Required Rebate. The Authority recognizes and agrees that, absent the
expenditure of all of the proceeds of the Bond within six months from the date of the delivery of
the Bond, it will be necessary for all Required Rebates to be made in order for the interest
13
M
income on the Bond to be and remain exempt from federal income taxation. As used in this
Section 4-214, the term "Required Rebates" means the amounts, if any, required by the provisions
of Section 148(f) of the Code and any regulations of the Department of Treasury issued
thereunder, to be paid by the Authority to the United States of America in order that the Bond
shall not be treated as "arbitrage bonds" within the meaning of Section 103(b)(2) and Section
148 of the Code.
(e) Designation of Bond as "Qualified Tax -Exempt Obligation" The
Authority hereby designates the Bond as a "qualified tax-exempt obligation" for the purpose of
paragraph (b)(3)(A) of Section 265 of the Internal Revenue Code of 1986, as amended, and, in
connection therewith and after due investigation and consideration, hereby finds, determines and
declares that the amount of tax-exempt obligations that have heretofore during the current
calendar year been issued by the Authority and the reasonably anticipated amount of tax-exempt
obligations that will be issued by the Authority during the current calendar year (including,
without limitation, the Bond) will not exceed the sum of $30,000,000.
Section -1-315. Creation of Contract. The provisions of this Resolution shall
constitute a contract between the Authority and the Purchaser of the Bond.
Section 1416. Provisions of Resolution Severable. The provisions of this
Resolution are hereby declared to be severable. In the event any provision hereof shall be held
invalid by a court of competent jurisdiction, such invalidity shall not affect any other portion of
this Resolution.
14
51
thereupon moved that the resolution be finally adopted, which motion
was seconded by
approved [by unanimous vote].
and, upon the said motion being put to vote, was
ADOPTED AND APPROVED by the Board of Directors of the Authority this
17t` day of JyAugust, 2010.
ATTEST:
/s/ Joe McEnernev
Secretary
15
/s/ Charles R. Zunk
Chairman
Board of Directors
EXHIBIT I
FORM OF MORTGAGE AND SECURITY AGREEMENT
Exhibit I
47
EXHIBIT II
FORM OF AGREEMENT FOR SALE AND PURCHASE
Exhibit I
45
Summary Report:
Litera Change -Pro ML 6.5.0.189 Document Comparison done on 8/11/2010
5:54:22 AM
Style Name: Default Style
Original Filename:
Original DMS:dm://BHM/2054459/5
Modified Filename:
Modified DMS: dm://BHM/2054459/6
Changes:
Add
38
Delete-
40
Move From
0
Move To
0
Table Insert
0
'abbe Delete
0
Embedded Graphics Visio, ChemDraw, Images etc.
0
Embedded Excel
0
Total Changes:
178
249
Pandora Heathcoe
From: Z4bicycle@aol.com
Sent: Friday, September 10, 2010 8:43 PM
To: cebassett@gmail.com; rod@big-red-drum.com; Gregg Mims; david@bagwellesq.com;
jjanmack@bellsouth.net; dstankoski@bellsouth.net; caudillps101@aol.com;
howard had ley@segers.aero; jmcenerney@febala.com
Cc: Sherry Sullivan; Nancy Wilson; wabf 1 220@bellsouth. net; rhenderson@press-register.com;
modom@gulfcoastnewspapers.com; Lisa Hanks; Pandora Heathcoe; Candace Antinarella
Subject: Airport Authority - September Meeting
There being no current items for resolution by the Fairhope Airport Authority, its regular meeting scheduled for September
21, 2010 is canceled.
The next regular meeting of the Fairhope Airport Authority will be held as scheduled, Tuesday October 19, 2010 at 4:30
p.m. in the Mayor's Conference Room at City Hall, 161 N. Section St.
Lisa/Candace/Sherry - Please post and distribute to the Media.
Thanks -
Chuck Zunk
251-929-3966 Home
251-404-0628 Cell
The Fairhope Airport Authority did not hold a meeting for the month of September,
2010, at the City Administration Building, 161 N. Section Street.
M