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HomeMy WebLinkAbout06/21/2010 Item 050 MOHAVE COUNTY REOUEST FOR BOARD ACTION FORM
From: Bill Ekstrom, Special Deputy County Attorney FORMAL ACTION ❑
CONSENT �
RESOLUTION ❑
Date: May 27, 2010 EXECUTIVE SESSION �
BOS Meeting Date: '�� '�°'� INFORMATION ONLY ❑
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SUMMARIZE THE ISSUE 8� DESIRED ACTION CLEARLY/ATTACH BACKUP MATERIAL:
The Mohave County Airport Authority, Inc. seeks the required approval of the Mohave County
Board of�Supervisors for issuance of tax-exempt promissory note or notes in an aggregate
principal amount not to exceed Five Million, Five Thousand Dollars ($5,005,000.00) for airport
and air terminal purposes and to refinance existing debt at a more advantageous interest rate
pursuant to Section 147(B) of the Internal Revenue Code.
Please schedule this matter for an Executive Session Meeting prior to the public meeting
pursuant to A.R.S. § 38-431.03(A)(3)8�(A)(4) for advice of and direction to counsel.
R ts. o �-�. o � 0 12 � �a Z�s c� � �L� � �.� \`�u — � �2.�
Recommended Motion: I hereby move to approve the issuance of two (2) tax-exempt promissory
note or notes by the Mohave County Airport Authority, Inc. in the aggregate amount not to exceed
Five Million, Five Thousand Dollars ($5,005,000.00).
Reviewed and Approved By: / � ,�
County Attorne, � Personnel ❑ Finance ❑ County Manag�
= C�
/
Board Action Taken:
Approved as Requested� No Action Taken ❑ Disapproved ❑
Continued to (p � ❑ Approved with the following changes:
Acknowledged receipt and referred to
Filing Information and Retrieval
Filed Bid ,�iled Agreemenf r�, �J��' 3 J
BOS Resolution �0 ►D ° 102� Filed Yearly Correspondence
Filed Petition Filed Dedication
Filed Land Sold Filed Land Acquired
Filed Franchise I.D. Resolution
Filed Improvement District Filed Other
Date Routed: ��� 0 9 2J1A Additional Information: � �
XC: `JUN 2 3 ZO1Q` ��.v�.��-- c�.-�
You are reminded that items for the agenda, along with complete backup, must be in the County
Manager's Office 10 days prior to Board Meeting.
Item No.
��
RESOLUTION NO. 2010 -128
A RESOLUTION OF THE BOARD OF SUPERVISORS OF MOHAVE COUNTY
APPROVING THE ISSUANCE BY MOHAVE COUNTY AIRPORT
AUTHORITY, INC., OF ITS TWO TAX- EXEMPT PROMISSORY NOTES, IN
AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $5,005,000 (THE
"OBLIGATIONS ")
WHEREAS, the Mohave County Airport Authority, Inc. (the "Authority "); pursuant to
Title 28, § 28 -8411 et. seq., Arizona Revised Statutes, as amended (the "Act ") is authorized to
issue Obligations and incur obligations for airport and air terminal purposes;
WHEREAS, the Authority intends to issue the Obligations made payable to National
Bank of Arizona (the "Lender ") in an aggregate amount not to exceed $5,005,000, the proceeds
of which will be lent to the Authority, for the purpose of refinancing the existing debt of the
Authority owed to Mohave State Bank and to pay the cost to acquire and equip certain capital
facilities, including hangers at the Laughlin/Bullhead International Airport located at 2550
Laughlin View Drive, Suite 117, Bullhead City, AZ 86429 (collectively, the "Project ");
WHEREAS, on April 20, 2010, the Authority resolved to issue the Obligations, such
Resolution being conditioned upon, among other things, the granting of approval to the issuance
of the Obligations by the Mohave County Board of Supervisors;
WHEREAS, the Resolution authorizes, among other things, the issuance of the
Obligations, the execution and delivery of two (2) Business Loan Agreements, two (2)
Promissory Notes, two (2) Commercial Security Agreements, two (2) Assignments of Rent and
two (2) Tax Certificates as to Arbitrage and the Provisions of Sections 103 and 141 -150 of the
Internal Revenue Code of 1986, and such other documents as required for the issuance of the
Obligations;
WHEREAS, copies of said documents have been made available to the Mohave County
Board of Supervisors, together with the aforementioned Resolution of the Authority;
WHEREAS, the Mohave County Board of Supervisors have been informed that said
documents have been reviewed by competent Bond Counsel, Kutak Rock LLP, and said Bond
4841 -6511- 0276.2
Counsel has determined that said documents adequately meet the requirements of the Act and the
Internal Revenue Code of 1986 (the "Code ");
WHEREAS, as a result of the issuance of the Obligations, certain proceeds will be made
available to the Authority. The Authority will use such funds to finance the Project;
WHEREAS, pursuant to Section 147(f) of the Code, the Mohave County Board of
Supervisors must approve the issuance of the Obligations after a public hearing following
reasonable public notice;
WHEREAS, it is necessary for the Mohave County Board of Supervisors to conduct
proceedings in satisfaction of the public approval requirement of Section 147(f) of the Code,
with respect to tax - exempt bond issues, the proceeds of which will be used to finance the Project;
WHEREAS, the County of Mohave shall not, in any event, be liable for the payment of
principal of, premium, if any, or interest on the Obligations, and neither the Obligations nor the
interest thereon will constitute an indebtedness of the State of Arizona or of the County of
Mohave within the meaning of any constitutional or statutory provisions whatsoever, but shall be
special, limited obligations of the Authority secured solely by revenues derived from the
Laughlin/Bullhead International Airport by the Authority and pledged by the Authority for such
purpose;
WHEREAS, following publication of Notice of Public Hearing in the Mohave Valley
Daily News on May 7, 2010, a public hearing was held by the Authority, pursuant to Section
147(f) of the Code, on May 21, 2010, in the Board Room of the Laughlin/Bullhead International
Airport, 2550 Laughlin View Drive, in Bullhead City, Arizona with respect to the issuance of the
Obligations to assist in the financing of the Project as described in the Notice of Public Hearing,
a copy of which is attached hereto as Exhibit A and made a part of this Resolution.
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF SUPERVISORS
OF MOHAVE COUNTY, ARIZONA, as follows:
1. That this Approval is given on the condition that the County of Mohave shall not
in any event be liable for the payment of principal of premium, if any, or interest on the
Obligations, and neither the Obligations nor the interest thereon will constitute an indebtedness
of the State of Arizona or of the County of Mohave within the meaning of any constitutional or
statutory provisions whatsoever, but shall be special, limited obligations of the Authority secured
solely by revenues derived from the Laughlin/Bullhead International Airport by the Authority
and pledged by the Authority for such purposes.
2. That this Approval is given on the condition that the County of Mohave shall not
in any event be liable for the payment of principal or interest on any debt which may arise
between the Authority and the Lender with respect to the Project to be funded by the
Obligations, and that all such debts shall be obligations of the Authority secured solely by
revenues derived from the Laughlin/Bullhead International Airport by the Authority and pledged
by the Authority for such purpose.
4841 -6511- 0276.2 2
3. That this Approval is given on the condition that the County of Mohave shall in
all events be the legal and equitable owner of all interests in any public buildings constructed on
the Airport property with the proceeds of the Obligations or any moneys derived from the
Obligations or from moneys lent by the Lender with respect to the Obligations, where National
Bank of Arizona (the "Lender ") may have taken the Obligations as collateral security, with said
County of Mohave ownership to be without liens or encumbrance of any nature whatsoever
against the real property of the Laughlin/Bullhead International Airport or against the facilities or
buildings thereon, and this shall be the case whether the principal and interest on such
Obligations are repaid by the Authority or by the Lender or whether payments are made or are in
default under any financings or reimbursement agreement which may exist or be caused to exist
between the Authority and the Lender.
4. That this Approval is given on the condition that should the County of Mohave, as
Lessor of the property to the Authority, at any time during which the Obligations or an
associated debt remains unpaid or outstanding, assume operational and management control of
the Laughlin/Bullhead International Airport property, that the pledge of revenues derived from
the operation and management of the Laughlin/Bullhead International Airport by the Authority,
said pledge made by the Authority to secure repayment of the Obligations, shall be the only
source of revenues to secure repayment of the Obligations which might become binding upon the
County of Mohave for any purpose, and further, at no time shall the County of Mohave be under
any legal duty to appropriate and cause to be raised by taxation funds sufficient to defray or pay
the cost of the Obligations entered into by the Authority.
5. That the utilization of this Approval by the Authority and the Lender and
Obligations holders for the purpose of 26 U.S.C. § 141, et. seq., of the Code to qualify the
Obligations for tax exempt status shall constitute acceptance of the conditions under which this
Approval is given.
6. That at the public hearing conducted on May 21, 2010 by the Authority regarding
the proposal to issue the Obligations for the proposed Project, all interested parties who desired
to do so were given the opportunity to express their views orally or in writing for or against the
Project and the plan of financing therefore.
7. That this Board has considered all oral or written statements which were made or
filed for or against the Project and the plan of financing therefore, and hereby determines that the
proposed issuance by the Authority of the Obligations, for the purposes set forth in the Notice of
Public Hearing and described in the preamble hereof, be and the same are hereby approved in
accordance with the public approval, requirements of Section 147(f) of the Code and in
accordance with the provisions of each condition for Approval set forth herein.
8. That any other resolutions made specifically with respect to the issuance by the
Authority of the Obligations described herein and for which this Approval was requested to meet
the approval requirements of Section 147(f) of the Code or parts thereof in conflicts herewith
shall be and the same are hereby repealed, to the extent of such conflict, and only to the extent
such conflict may be authorized by law.
4841 -6511- 0276.2 3
9. That immediately after its adoption this Resolution shall be signed by the
Chairman and the Clerk, and shall be recorded in the book kept for that purpose and shall take
immediate effect.
PASSED, ADOPTED, AND APPROVED on June 7, 2010.
MOHAVE COUNTY BOARD OF SUPERVISORS
Buster D. Johnson, Chairman
ATTEST:
Barbara Bracken, Clerk of the Board
Attachment: Notice of Public Hearing
4841 -6511- 0276.2 4
EXHIBIT A
NOTICE OF PUBLIC HEARING
PUBLIC NOTICE IS HEREBY GIVEN that on May 21, 2010, at 1:00 p.m., the Mohave
County Airport Authority, Inc. (the "Authority "), through its designated hearing officer, will
hold and conduct a public hearing in the Board Room of the Laughlin/Bullhead International
Airport, 2550 Laughlin View Drive, in Bullhead City, Arizona.
The purpose of the hearing is to provide a reasonable opportunity for interested
individuals to express their views, both orally and in writing, on the proposed issuance by the
Authority of multiple Promissory Notes (collectively, the "Obligations ") to finance and refinance
new equipment and facilities for the Authority, including, without limitation, private hangers,
and fixed base airport operation facilities for the Authority, all of which are or will be located at
the Laughlin Bullhead International Airport located at 2550 Laughlin View Drive, Bullhead City,
Arizona 86429 (the foregoing items shall be collectively referred to as the "Project "). The
Project is or will be owned by the Authority and subject to Master Leases with Mohave County.
The maximum aggregate face principal amount of the Obligations proposed to be issued
by the Authority is an amount not to exceed $5,005,000.
The County of Mohave shall not in any event be liable for the payment of principal of,
premium, if any, or interest on the Obligations, and neither the Obligations nor the interest
thereon will constitute an indebtedness of the State of Arizona or of the County of Mohave
within the meaning of any constitutional or statutory provisions whatsoever, but shall be special,
limited obligations of the Authority payable solely from revenues derived from the Laughlin
Bullhead International Airport and pledged by the Authority for such purpose.
In accordance with Section 147(f) of the Internal Revenue Code of 1986, the Board of
Supervisors of Mohave County must approve the issuance of the Obligations after conducting a
public hearing.
At the time and place fixed for the public hearing, all interested persons will be given an
opportunity to express their views orally and in writing on the proposed issuance of the
Obligations and the location and nature of the Project.
Written comments may be submitted to Director, Mohave County Airport Authority, Inc.,
2550 Laughlin View Drive, Suite 117, Bullhead City, Arizona 86429, until the conclusion of the
public hearing on May 21, 2010. Additional information can be obtained from David Gaines,
Director, at such address.
Dated this 7th day of May, 2010.
By: /s/
David Gaines
Director
Mohave County Airport Authority, Inc.
4841 -6511- 0276.2
PROMISSORY NOTE
Principal Loan Date Maturity "Loan No Call! Coll Account Off icer Initials
$2,105,749.00 June , 2010 June , 2030
References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item.
Any item above containing " ***" has been omitted due to text length limitations.
Borrower: MOHAVE COUNTY AIRPORT AUTHORITY, INC. Lender: NATIONAL BANK OF ARIZONA
(TIN: 86- 0383435) 4676 Hwy. 95, Suite 101
2550 Laughlin View Drive, Suite 117 Fort Mohave, AZ 86426
Bullhead City, Arizona 86429 (928) 763 -5618
Principal Amount: $2,105,749.00 Initial Rate: 5.25% Date of Note: June 2010
PROMISE TO PAY. Mohave County Airport Authority, Inc. ( "Borrower") promises to pay to NATIONAL BANK OF ARIZONA ( "Lender "), or
order, in lawful money of the United States of America, the principal amount of TWO MILLION ONE HUNDRED FIVE THOUSAND SEVEN
HUNDRED FORTY -NINE AND NO /100 DOLLARS ($2,105,749.00) or so much as may be outstanding, together with interest on the outstanding
principal balance, until paid in full. Interest shall be calculated from the date of each advance until repayment of each advance, as set forth
below. The annual interest rate for this Note is computed on a 3651360 basis; that is, by applying the ratio of the annual interest rate over a
year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is
outstanding.
PAYMENT. Borrower will pay this loan in one payment of all outstanding principal plus all accrued unpaid interest on June_, 2030. In
addition, Borrower will pay regular monthly installment payments of principal and accrued unpaid interest, in an amount determined by
Lender based on an amortization term of 20 years, beginning July _, 2010 with all subsequent principal and interest payments to be due
on the same day of each month after that. The initial interest rate applicable to this Note shall be five and one - quarter (5.25 %) percent per
annum. On June _, 2020, the interest rate applicable to this Note shall be adjusted and reset to the then 5 year LIBOR plus 2.00% (with a
floor rate of five and one - quarter (5.25 %) percent per annum) as determined by Lender. On June _, 2025, the interest rate applicable to
this Note shall be adjusted and reset to the then 5 year LIBOR plus 2.00% (with a floor rate of five and one - quarter (5.25 %) percent per
annum) as determined by Lender. At each adjustment of the interest rate Lender shall recalculate the regular monthly installment payments
of principal and accrued unpaid interest to an amount determined by Lender to be sufficient to fully amortize the Loan over the remaining
term of the Loan.
EFFECTIVE RATE. Borrower agrees to an effective rate of interest that is the rate specified in this Note plus any additional rate resulting from any
other charges in the nature of interest paid or to be paid in connection with this Note.
PREPAYMENT PENALTY. Borrower agrees that all loan fees and other prepaid finance charges are earned fully as of the date of the loan and will not
be subject to refund upon early payment (whether voluntary or as a result of default), except as otherwise required by law. Early payments will not,
unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather,
early payments will reduce the principal balance due and may result in Borrower's making fewer payments. Borrower agrees not to send Lender
payments marked "paid in full', "without recourse', or similar language. If Borrower sends such a payment, Lender may accept it without losing any of
Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning
disputed amounts, including any check or other payment instrument that indicates that the payment constitutes "payment in full' of the amount owed or
that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: NATIONAL BANK OF
ARIZONA, Hwy 95, Suite 101, Fort Mohave, Arizona 86426.
LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged 10% of the unpaid portion of the regularly scheduled payment.
INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity, the interest rate on this Note shall be increased to 18% per
annum. However, in no event will the interest rate exceed the maximum interest rate limitations under applicable law.
DEFAULT. Each of the following shall constitute an event of default ( "Event of Default") under this Note:
Payment Default. Borrower fails to make any payment when due under this Note.
Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Note or in any of
the related documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between
Lender and Borrower.
False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Note
or the related documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading
at any time thereafter.
Insolvency. The dissolution or termination of Borrower's existence as a going business, the insolvency of Borrower, the appointment of a receiver
for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against Borrower.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self -help,
repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This
includes a garnishment of any of Borrower's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if
there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding
and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the
creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute.
Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor, endorser, surety, or accommodation party of any
of the indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity
of, or liability under, any guaranty of the indebtedness evidenced by this Note. In the event of a death, Lender, at its option, may, but shall not be
required to, permit the guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender,
and, in doing so, cure any Event of Default.
Change In Ownership. Any change in ownership of twenty -five percent (25 %) or more of the common stock of Borrower.
Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or
performance of this Note is impaired.
Insecurity. Lender in good faith believes itself insecure.
Cure Provisions. If any defauit, other than a default in payment is curable and if Borrower has not been given a notice of a breach of the same
provision of this Note within the preceding twelve (12) months, it may be cured if Borrower, after receiving written notice from Lender demanding
cure of such default: (1) cures the default within fifteen (15) days; or (2) if the cure requires more than fifteen (15) days, immediately initiates steps
which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and
necessary steps sufficient to produce compliance as soon as reasonably practical.
LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this Note and all accrued unpaid interest
immediately due, and then Borrower will pay that amount.
DISPUTE RESOLUTION. This section contains a jury waiver, arbitration clause, and a class action waiver. READ THIS SECTION
CAREFULLY.
4812- 9039 - 2069.3
PROMISSORY NOTE
Loan No: (Continued) Page 2
This dispute resolution provision shall supersede and replace any prior "Jury Waiver," "Judicial Reference," "Class Action Waiver," "Arbitration,"
"Dispute Resolution," or similar alternative dispute agreement or provision between or among the parties.
Jury Trial Waiver; CLASS ACTION WAIVER. As permitted by applicable law, each party waives their respective rights to a trial before a jury in
connection with any Dispute (as "Dispute" is hereinafter defined), and Disputes shall be resolved by a judge silting without a jury If a court determines that
this provision is not enforceable for any reason and at any time prior to trial of the Dispute, but not later than 30 days after entry of the order determining
this provision is unenforceable, any party shall be entitled to move the court for an order compelling arbitration and staying or dismissing such litigation
pending arbitration ( "Arbitration Order'). If permitted by applicable law, each party also waives the right to litigate in court or an arbitration proceeding any
Dispute as a class action either as a member of a class or as a representative or to act as a private attorney general
Arbitration. If a claim, dispute, or controversy arises between us with respect to this Agreement, related agreements, or any other agreement or business
relationship between any of us whether or not related to the subject matter of this Agreement (all of the foregoing, a "Dispute "), and only if a jury trial waiver
is not permitted by applicable law or ruling by a court, any of us may require that the Dispute be resolved by binding arbitration before a single arbitrator at
the request of any party. By agreeing to arbitrate a Dispute each party gives up any right that party may have to a iury trial as well as other rights that
party would have in court that are not available or are more limited in arbitration such as the rights to discovery and to appeal
Arbitration shall be commenced by filing a petition with, and in accordance with the applicable arbitration rules of, JAMS or National Arbitration Forum
( "Administrator") as selected by the initiating party. If the parties agree, arbitration may be commenced by appointment of a licensed attorney who is
selected by the parties and who agrees to conduct the arbitration without an Administrator.
Disputes include matters (i) relating to a deposit account, application for or denial of credit, enforcement of any of the obligations we have to each other,
compliance with applicable laws and /or regulations, performance or services provided under any agreement by any party, (ii) based on or arising from an
alleged tort, or (iii) involving either of our employees, agents, affiliates, or assigns of a party. However, Disputes do not include the validity, enforceability,
meaning, or scope of this arbitration provision and such matters may be determined only by a court. If a third party is a party to a Dispute, we each will
consent to including the third party in the arbitration proceeding for resolving the Dispute with the third party Venue for the arbitration proceeding shall be
at a location determined by mutual agreement of the parties or, if no agreement, in the city and state where lender or bank is headquartered.
After entry of an Arbitration Order, the non - moving party shall commence arbitration. The moving party shall, at its discretion, also be entitled to commence
arbitration but is under no obligation to do so, and the moving party shall not in any way be adversely prejudiced by electing not to commence arbitration.
The arbitrator: (i) will hear and rule on appropriate djspositive motions for judgment on the pleadings, for failure to state a claim, or for full or partial
summary judgment; (ii) will render a decision and any award applying applicable law; (iii) will give effect to any limitations period in determining any Dispute
or defense; Qv) shall enforce the doctrines of compulsory counterclaim, res judicala, and collateral estoppel, if applicable; (v) with regard to motions and the
arbitration hearing, shall apply rules of evidence governing civil cases; and (vi) will apply the law of the stale specified in the agreement giving rise to the
Dispute. Filing of a petition for arbitration shall not prevent any party from (i) seeking and obtaining from a court of competent jurisdiction (notwithstanding
ongoing arbitration) provisional or ancillary remedies including but not limited to injunctive relief, property preservation orders, foreclosure, eviction,
attachment, replevin, garnishment, and /or the appointment of a receiver, (ii) pursuing non - judicial foreclosure, or (iii) availing itself of any self -help remedies
such as setoff and repossession. The exercise of such rights shall not constitute a waiver of the right to submit any Dispute to arbitration.
Judgment upon an arbitration award may be entered in any court having jurisdiction except that, if the arbitration award exceeds $4,000,000, any party shall
be entitled to a de novo appeal of the award before a panel of three arbitrators. To allow for such appeal, if the award (including Administrator, arbitrator,
and attorney's fees and costs) exceeds $4,000,000, the arbitrator will issue a written, reasoned decision supporting the award, including a statement of
authority and its application to the Dispute. A request for de novo appeal must be filed with the arbitrator within 30 days following the date of the arbitration
award; if such a request is not made within that time period, the arbitration decision shall become final and binding. On appeal, the arbitrators shall review
the award de novo, meaning that they shall reach their own findings of fact and conclusions of law rather than deferring in any manner to the original
arbitrator. Appeal of an arbitration award shall be pursuant to the rules of the Administrator or, if the Administrator has no such rules, then the JAMS
arbitration appellate rules shall apply.
Arbitration under this provision concerns a transaction involving interstate commerce and shall be governed by the Federal Arbitration Act, 9 U.S.C. § 1 et
seq. This arbitration provision shall survive any termination, amendment, or expiration of this Agreement. If the terms of this provision vary from the
Administrators rules, this arbitration provision shall control.
Reliance. Each party (j) certifies that no one has represented to such party that the other party would not seek to enforce jury and class action waivers in
the event of suit, and (ii) acknowledges that it and the other party have been induced to enter into this Agreement by, among other things, the mutual
waivers, agreements, and certifications in this section.
ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender
that amount. This includes, subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, whether or not there is a
lawsuit, including attorneys' fees, expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), and
appeals. However, Borrower will only pay attorneys' fees of an attorney not Lender's salaried employee, to whom the matter is referred after
Borrower's default. If not prohibited by applicable law, Borrower also will pay any court costs, in addition to all other sums provided by law.
GOVERNING LAW. This Note will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws
of the State of Arizona without regard to its conflicts of law provisions. This Note has been accepted by Lender in the State of Arizona.
RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower's accounts with Lender (whether
checking, savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open
in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower
authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the indebtedness against any and all such accounts.
COLLATERAL. Borrower acknowledges this Note is secured by All of Debtor's right, title and interest, whether presently existing or hereafter arising in
the following:
(a) All of the right, title and interest of the Debtor as lessor or sublessor in and to all leases and subleases covering the certain real property located in
Mohave County, Arizona, as more particularly described as The Home Depot Subdivision Tract 5106 as recorded in Reception Number 2003- 14836, in
the official records of Mohave County, Arizona; plus the attached Exhibit "B" also know as the Laughlin /Bullhead International Airport (the "Premises ")
or any portion thereof (collectively, the "Leases), and the buildings, fixtures and other improvements located on the Premises (the "Improvements "), or
any portion thereof now or hereafter existing or entered into.
(b) All of the right, title and interest of the Debtor in and to that certain Lease Agreement dated October 7, 1991, by Debtor and Mohave County, a
political subdivision of the State of Arizona (the "County "), and recorded in the official records of Mohave County on January 30, 1992, in Book 2002,
Page 66, as amended by the Amendment to Master Lease dated February 18, 1997, the Amendment to Master Lease dated December 1, 2003, and
the Amendment to Master Lease dated February 22, 2005 (as so amended, the "Master Lease "), together with the rights of the Debtor in and to the
Premises arising pursuant to the Master Lease, and the right, title and interest of Debtor in and to all of the improvements.
(c) All right, title and interest of Debtor now existing or hereafter arising pursuant to the Leases, including, without limitation, all rights of Debtor against
guarantors thereof, all cash or security deposits, advance rentals, and deposits or payments of similar nature.
(d) All rents, issues, profits, royalties, income and other benefits derived by Debtor from the property comprising the Premises or any portion thereof
(the "Rents "),
(e) All the claims or demands with respect to the Premises, the Leases, the Rents, and the Personal Property (collectively, the "Property "), or any
portion thereof, including, without limitation, claims or demands with respect to the proceeds of insurance in effect with respect thereto, claims under
any indemnity agreement, including, without limitation, any indemnity agreement executed for the benefit of the Property or any portion thereof, and
any and all awards make for the taking by eminent domain, or by any proceeding or purchase in lieu thereof, of the whole or any part of the Property.
This loan is cross collateralized with Loan #
INTEREST RATE ADJUSTMENT PROVISION. Interest rate will be fixed for the first 10 years and then adjusted on June _, 2020 and June
2025 to the Loan then 5 year LIBOR plus 2.00 %, in each case subject to a floor rate of 5.25% per annum.
4812 - 9039 - 2069.3
PROMISSORY NOTE
Loan No: (Continued) Page 3
DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $32.00 if Borrower makes a payment on Borrower's loan and the check or
preauthorized charge with which Borrower pays is later dishonored.
SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, successors
and assigns, and shall inure to the benefit of Lender and its successors and assigns.
GENERAL PROVISIONS. If any part of this Note cannot be enforced, this fact will not aff ect the rest of the Note. Lender may delay or forgo enforcing
any of its rights or remedies under this Note without losing them. Borrower and any other person who signs, guarantees or endorses this Note, to the
extent allowed by law, waive presentment, demand for payment, and notice of dishonor. Upon any change in the terms of this Note, and unless
otherwise expressly stated in writing, no party who signs this Note, whether as maker, guarantor, accommodation maker or endorser, shall be released
from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor
or collateral; or impair, fail to realize upon or perfect Lender's security interest in the collateral; and take any other action deemed necessary by Lender
without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone
other than the party with whom the modification is made. The obligations under this Note are joint and several.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE. BORROWER AGREES TO
THE TERMS OF THE NOTE.
BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE,
BORROWER:
MOHAVE COUNTY AIRPORT AUTHORITY, INC.
By:
Name:
Title:
4812- 9039 - 2069.3
BUSINESS LOAN AGREEMENT
Principal loan Date Maturity Loan No Call/ Coll Account Officer Initials
$2,105,749.00 06 -_ -2010 _- _ - 20_.
References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item.
Any item above containing " *. has been omitted due to text length limitations.
Borrower: MOHAVE COUNTY AIRPORT AUTHORITY, INC. Lender: NATIONAL BANK OF ARIZONA
(TIN: 86- 0383435) 4676 Hwy. 95, Suite 101
2550 Laughlin View Drive #117 Fort Mohave, AZ 86426
Bullhead City, AZ 86429 (928) 763 -5618
THIS BUSINESS LOAN AGREEMENT dated June _, 2010, is made and executed between MOHAVE COUNTY AIRPORT AUTHORITY, INC. ( "Borrower ")
and NATIONAL BANK OF ARIZONA ( "Lender ") on the following terms and conditions. Borrower has received prior commercial loans from Lender or has
applied to Lender for a commercial loan or loans or other financial accommodations, including those which may be described on any exhibit or schedule
attached to this Agreement. Borrower understands and agrees that: (A) in granting, renewing, or extending any Loan, Lender is relying upon Borrower's
representations, warranties, and agreements as set forth in this Agreement; (B) the granting, renewing, or extending of any Loan by Lender at all times shall be
subject to Lender's sole judgment and discretion; and (C) all such Loans shall be and remain subject to the terms and conditions of this Agreement.
TERM. This Agreement shall be effective as of June _, 2010, and shall continue in full force and effect until such time as all of Borrower's Loans in favor of
Lender have been paid in full, including principal, interest, costs, expenses, attorneys' fees, and other fees and charges, or until such time as the parties may
agree in writing to terminate this Agreement.
CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the initial Advance and each subsequent Advance under this Agreement shall
be subject to the fulfillment to Lender's satisfaction of all of the conditions set forth in this Agreement and in the Related Documents,
Loan Documents. Borrower shall provide to Lender the following documents for the Loan: (1) the Note; (2) Security Agreements granting to Lender
security interests in the Collateral; (3) Assignment of Rents; (4) financing statements and all other documents perfecting Lender's Security Interests; (5)
evidence of insurance as required below; (6) together with all such Related Documents as Lender may require for the Loan; all in form and substance
satisfactory to Lender and Lender's counsel.
Borrower's Authorization. Borrower shall have provided in form and substance satisfactory to Lender properly certified resolutions, duly authorizing the
execution and delivery of this Agreement, the Note and the Related Documents. In addition, Borrower shall have provided such other resolutions,
authorizations, documents and instruments as Lender or its counsel, may require.
Payment of Fees and Expenses. Borrower shall have paid to Lender all fees, charges, and other expenses which are then due and payable as specified
in this Agreement or any Related Document. A list of all fees chargeable by the Bank for this loan, as set forth in the Loan Proposal, is attached as Exhibit
"A" hereto.
Representations and Warranties. The representations and warranties set forth in this Agreement, in the Related Documents, and in any document or
certificate delivered to Lender under this Agreement are true and correct.
No Event of Default. There shall not exist at the time of any Advance a condition which would constitute an Event of Default under this Agreement or
under any Related Document.
REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as of the date of this Agreement, as of the date of each disbursement
of loan proceeds, as of the date of any renewal, extension or modification of any Loan, and at all times any Indebtedness exists:
Organization. Borrower is a non - profit corporation and a body corporate and politic performing an essential governmental function as an agency or
instrumentality of the County of Mohave, State of Arizona which is, and at all times shall be, duly organized, validly existing, and in good standing under
and by virtue of the laws of Borrower's state of incorporation. Borrower has the full power and authority to own its properties and to transact the business
in which it is presently engaged or presently proposes to engage. Borrower maintains an office at 2550 Laughlin View Drive #117, Bullhead City, AZ
86429. Unless Borrower has designated otherwise in writing, the principal office is the office at which Borrower keeps its books and records including its
records concerning the Collateral. Borrower will notify Lender prior to any change in the location of Borrower's state of organization or any change in
Borrower's name. Borrower shall do all things necessary to preserve and to keep in full force and effect its existence, rights and privileges, and shall
comply with all regulations, rules, ordinances, statutes, orders and decrees of any governmental or quasi - governmental authority or court applicable to
Borrower and Borrower's business activities.
Assumed Business Names. Borrower has filed or recorded all documents or filings required by law relating to all assumed business names used by
Borrower. Excluding the name of Borrower, the following is a complete list of all assumed business names under which Borrower does business:
Laughlin /Bullhead international Airport
Authorization. Borrower's execution, delivery, and performance of this Agreement and all the Related Documents have been duly authorized by all
necessary action by Borrower and do not conflict with, result in a violation of, or constitute a default under (1) any provision of (a) Borrower's articles of
incorporation or organization, or bylaws, or (b) any agreement or other instrument binding upon Borrower or (2) any law, governmental regulation, court
decree, or order applicable to Borrower or to Borrower's properties.
Financial Information. Each of Borrower's financial statements supplied to Lender truly and completely disclosed Borrower's financial condition as of the
date of the statement, and there has been no material adverse change in Borrower's financial condition subsequent to the date of the most recent financial
statement supplied to Lender. Borrower has no material contingent obligations except as disclosed in such financial statements.
Legal Effect. This Agreement constitutes, and any instrument or agreement Borrower is required to give under this Agreement when delivered will
constitute legal, valid, and binding obligations of Borrower enforceable against Borrower in accordance with their respective terms,
4817 - 7684 - 2758.3
BUSINESS LOAN AGREEMENT
Loan No: (Continued) Page 2
Properties. Except as contemplated by this Agreement or as previously disclosed in Borrower's financial statements or in writing to Lender and as
accepted by Lender, and except for property tax liens for taxes not presently due and payable, Borrower or the County of Mohave owns and has good title
to all of Borrower's properties free and clear of all Security Interests, and has not executed any security documents or financing statements relating to such
properties. All of Borrower's properties are titled in Borrower's or the County of Mohave's legal name, and the Borrower has not used or filed a financing
statement under any other name for at least the last five (5) years, except where the Lender has been named the secured party.
Litigation and Claims. No litigation, claim, investigation, administrative proceeding or similar action (including those for unpaid taxes) against Borrower is
pending or threatened, and no other event has occurred which may materially adversely affect Borrower's financial condition or properties, other than
litigation, claims, or other events, if any, that have been disclosed to and acknowledged by Lender in writing.
Taxes. To the best of Borrower's knowledge, all of Borrower's tax returns and reports that are or were required to be filed, have been filed, and all taxes,
assessments and other governmental charges have been paid in full, except those presently being or to be contested by Borrower in good faith in the
ordinary course of business and for which adequate reserves have been provided.
Lien Priority. Unless otherwise previously disclosed to Lender in writing, Borrower has not entered into or granted any Security Agreements, or permitted
the filing or attachment of any Security Interests on or affecting any of the Collateral directly or indirectly securing repayment of Borrower's Loan and Note,
that would be prior or that may in any way be superior to Lender's Security Interests and rights in and to such Collateral.
Binding Effect. This Agreement, the Note, all Security Agreements (if any), and all Related Documents are binding upon the signers thereof, as well as
upon their successors, representatives and assigns, and are legally enforceable in accordance with their respective terms.
AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, so long as this Agreement remains in effect, Borrower will:
Notices of Claims and Litigation. Promptly inform Lender in writing of (1) all material adverse changes in Borrower's financial condition, and (2) all
existing and all threatened litigation, claims, investigations, administrative proceedings or similar actions affecting Borrower or any Guarantor which could
materially affect the financial condition of Borrower or the financial condition of any Guarantor.
Financial Records. Maintain its books and records in accordance with GAAP, applied on a consistent basis, and permit Lender to examine and audit
Borrower's books and records at all reasonable times.
Financial Statements. Furnish Lender with the following:
Annual Statements. One hundred twenty (120) days after the end of each fiscal year, Borrower's balance sheet and project and loss statement for
the year ended, audited by a certified public accountant satisfactory to Lender.
Interim Statements. Forty -five (45) days after the end of each Quarter -year, Borrower's balance sheet and profit and loss statement for the period
ended, prepared by Borrower. As soon as available after the end of each half -year, all rent rolls and land lease payments for the period ended,
prepared by the Borrower.
All financial reports required to be provided under this Agreement, applied on a consistent basis, and certified by Borrower as being true and correct to the
best of their knowledge.
Additional Information. Furnish such additional information and statements, as Lender may request from time to time.
Insurance. Maintain fire and other risk insurance, public liability insurance, and such other insurance as Lender may require with respect to Borrower's
properties and operations, in form, amounts, coverages and with insurance companies acceptable to Lender. Borrower, upon request of Lender, will
deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender, including stipulations that coverages will not be
cancelled or diminished without at least thirty (30) days prior written notice to Lender. Each insurance policy also shall include an endorsement providing
that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Borrower or any other person. In connection with all
policies covering assets in which Lender holds or is offered a security interest for the Loans, Borrower will provide Lender with such lender's loss payable
or other endorsements as Lender may require.
Insurance Reports. Furnish to Lender, upon request of Lender, reports on each existing insurance policy showing such information as Lender may
reasonably request, including without limitation the following: (1) the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the
properties insured; (5) the then current property values on the basis of which insurance has been obtained, and the manner of determining those values;
and (6) the expiration date of the policy.
Other Agreements. Comply with all terms and conditions of all other agreements, whether now or hereafter existing, between Borrower and any other
party and notify Lender immediately in writing of any default in connection with any other such agreements.
Loan Proceeds. Use all Loan proceeds solely for the following specific purposes: TO REFINANCE EXISTING INDEBTEDNESS OF MOHAVE STATE
BANK AND ACQUISITION OF COMMERCIAL AIRCRAFT HANGARS in support of Borrower's commercial business operations, unless specifically
consented to the contrary by Lender in writing.
Taxes, Charges and Liens. Pay and discharge when due all of its indebtedness and obligations, including without limitation all assessments, taxes,
governmental charges, levies and liens, of every kind and nature, imposed upon Borrower or its properties, income, or profits, prior to the date on which
penalties would attach, and all lawful claims that, if unpaid, might become a lien or charge upon any of Borrower's properties, income, or profits. Provided
however, Borrower will not be required to pay and discharge any such assessment, tax, charge, levy, lien or claim so long as (1) the legality of the same
shall be contested in good faith by appropriate proceedings, and (2) Borrower shall have established on Borrower's books adequate reserves with respect
to such contested assessment, tax, charge, levy, lien, or claim in accordance with GAAP.
Performance. Perform and comply, in a timely manner, with all terms, conditions, and provisions set forth in this Agreement, in the Related Documents,
and in all other instruments and agreements between Borrower and Lender, Borrower shall notify Lender immediately in writing of any default in
connection with any agreement.
4817 - 7684 - 2758.3
BUSINESS LOAN AGREEMENT
Loan No: (Continued) Page 3
Operations. Maintain executive and management personnel with substantially the same qualifications and experience as the present executive and
management personnel; provide written notice to Lender of any change in executive and management personnel; conduct its business affairs in a
reasonable and prudent manner.
Environmental Studies. Promptly conduct and complete, at Borrower's expense, all such investigations, studies, samplings and testings as may be
requested by Lender or any governmental authority relative to any substance, or any waste or by- product of any substance defined as toxic or a
hazardous substance under applicable federal, state, or local law, rule, regulation, order or directive, at or affecting any property or any facility owned,
leased or used by Borrower.
Compliance with Governmental Requirements. Comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental
authorities applicable to the conduct of Borrower's properties, businesses and operations, and to the use or occupancy of the Collateral, including without
limitation, the Americans With Disabilities Act. Borrower may contest in good faith any such law, ordinance, or regulation and withhold compliance during
any proceeding, including appropriate appeals, so long as Borrower has notified Lender in writing prior to doing so and so long as, in Lender's sole
opinion, Lender's interests in the Collateral are not jeopardized. Lender may require Borrower to post adequate security or a surety bond, reasonably
satisfactory to Lender, to protect Lender's interest.
Inspection. Permit employees or agents of Lender at any reasonable time to inspect any and all Collateral for the Loan or Loans and Borrower's other
properties and to examine or audit Borrower's books, accounts, and records and to make copies and memoranda of Borrower's books, accounts, and
records. If Borrower now or at any time hereafter maintains any records (including without limitation computer generated records and computer software
programs for the generation of such records) in the possession of a third party, Borrower, upon request of Lender, shall notify such party to permit Lender
free access to such records at all reasonable times and to provide Lender with copies of any records it may request, all at Borrower's expense.
Compliance Certificates. Unless waived in writing by Lender, provide Lender at least annually, with a certificate executed by Borrower's chief financial
officer, or other officer or person acceptable to Lender, certifying that the representations and warranties set forth in this Agreement are true and correct as
of the date of the certificate and further certifying that, as of the date of the certificate, no Event of Default exists under this Agreement.
Environmental Compliance and Reports. Borrower shall comply in all respects with any and all Environmental Laws; not cause or permit to exist, as a
result of an intentional or unintentional action or omission on Borrower's part or on the part of any third party, on property owned and /or occupied by
Borrower, any environmental activity where damage may result to the environment, unless such environmental activity is pursuant to and in compliance
with the conditions of a permit issued by the appropriate federal, state or local governmental authorities, shall furnish to Lender promptly and in any event
within thirty (30) days after receipt thereof a copy of any notice, summons, lien, citation, directive, letter or other communication from any governmental
agency or instrumentality concerning any intentional or unintentional action or omission on Borrower's part in connection with any environmental activity
whether or not there is damage to the environment and /or other natural resources.
Additional Assurances. Make, execute and deliver to Lender such promissory notes, security agreements, assignments, financing statements,
instruments, documents and other agreements as Lender or its attorneys may reasonably request to evidence and secure the Loans and to perfect all
Security Interests.
Indebtedness and Liens. (1) Except for trade debt incurred in the normal course of business and indebtedness to Lender contemplated by this
Agreement, Borrower will not create, incur or assume indebtedness for borrowed money, including capital leases, (2) sell, transfer, mortgage, assign,
pledge, lease, grant a security interest in, or encumber any of Borrower's assets (except as allowed as Permitted Liens), or (3) sell with recourse any of
Borrower's accounts, except to Lender, without first giving five (5) business days notice in writing to Lender.
Errors and Omissions Provision. Borrower hereby agrees that it will, within ten (10) days of a request by Lender, comply with any request by Lender to
correct documentation errors, omissions or oversights, if any, that occur in any documentation relating to this loan.
General.
Tax Covenant. The Borrower covenants for the benefit of the Lender that it will not take any action or omit to take any action with respect to the Loan, the
proceeds thereof, any other funds of the Borrower or any facilities refinanced with the proceeds of the Loan if such action or omission (a) would cause the
interest on the Loan to lose its exclusion from gross income for federal income tax purposes under Section 103 of the Code, (b) would cause interest on
the Loan to lose its exclusion from alternative minimum taxable income as defined in Section 55(b)(2) of the Code or (c) would cause interest on the Loan
to lose its exclusion from Arizona taxable income. In furtherance of this covenant, the Borrower agrees to comply with the procedures set forth in the Tax
Certificate. The foregoing covenant shall remain in full force and effect notwithstanding the payment in full of the Loan until the date on which all
obligations of the District in fulfilling the above covenant under the Code and Arizona law have been met.
Debt Service Coverage Ratio. Maintain a Debt Service Coverage Ratio equal to or greater than 1.30 to 1.00 based on the annual audited financial
statements of Borrower, calculated using net profit (excluding passenger facility revenues /payments received in the fiscal year less applicable project
costs /expenses incurred relating to those revenues /payments received which are not pledged to the repayment of the Loan or any other indebtedness of
Borrower) plus the total of interest, taxes, annual discretionary expense, depreciation and amortization divided by the annual contractual payments of
principal and interest on the Loan and all other debt, including capital lease obligations, of the Borrower.
Determination of Taxability. In the event of a Determination of Taxability, the following shall be applicable:
(a) Any Additions to Tax paid or incurred by the Lender shall be immediately due and payable under the Note.
(b) Interest on the Note shall accrue, retroactively to the Taxable Date, at the Taxable Rate for the most recently reported week prior to the
Taxable Date.
(c) Effective on the first day of the first month following a Determination of Taxability, additional interest shall be due and payable equal to the
interest on the Note at the Taxable Rate from the Taxable Date, less a credit for interest actually paid for the same period. On the next occurring
Payment Date and each Payment Date thereafter, until the Note is paid in full, the amount due and payable on each such Payment Date shall be
4817 - 7684 - 2758.3
BUSINESS LOAN AGREEMENT
Loan No: (Continued) Page 4
increased to an amount determined by the Lender, in its sole and absolute discretion, to reflect the interest due on the outstanding principal balance of
the Note at the Taxable Rate.
Capital Expenditures. Limit Capital Expenditures to $100,000, which capital expenditures test is restricted to financing capital expenditures (excluding
capital expenditures funded by grants received) without the Lender's approval and by using the Borrower's annual audited financial statements to calculate
measurement.
Banking Relationship. Maintain their primary banking relationship with the Lender. An initial deposit of $200,000 shall be received by the Lender within
thirty (30) days of the execution and delivery of this Agreement.
Lease Review. Provide Lender with each new Lease affecting the Borrower is properties and to obtain Lender's consent to all new leases to be entered
into by the Borrower on their properties, such consent not to be unreasonably withheld.
LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the Collateral or if Borrower fails to
comply with any provision of this Agreement or any Related Documents, including but not limited to Borrower's failure to discharge or pay when due any
amounts Borrower is required to discharge or pay under this Agreement or any Related Documents, Lender on Borrower's behalf may but shall not be obligated
to) take any action that Lender deems appropriate, to the extent permitted by applicable law, including but not limited to discharging or paying all taxes, liens,
security interests, encumbrances and other claims, at any time levied or placed on any Collateral and paying all costs for insuring, maintaining and preserving
any Collateral. All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date
incurred or paid by Lender to the date of repayment by Borrower. All such expenses will become a part of the Indebtedness and, at Lender's option, will (A) be
payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during
either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon payment which will be due and
payable at the Note's maturity.
NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this Agreement is in effect, Borrower shall not, without the prior written
consent of Lender, which consent will not be unreasonably withheld:
Continuity of Operations. (1) Engage in any business activities substantially different than those in which Borrower is presently engaged, (2) cease
operations, liquidate, merge, transfer, acquire or consolidate with any other entity, change its name, dissolve or transfer or sell Collateral out of the
ordinary course of business, or (3) pay any dividends on Borrower's stock (other than dividends payable in its stock), provided, however that
notwithstanding the foregoing, but only so long as no Event of Default has occurred and is continuing or would result from the payment of dividends, if
Borrower is a "Subchapter S Corporation" (as defined in the Internal Revenue Code of 1986, as amended), Borrower may pay cash dividends on its stock
to its shareholders from time to time in amounts necessary to enable the shareholders to pay income taxes and make estimated income tax payments to
satisfy their liabilities under federal and state law which arise solely from their status as Shareholders of a Subchapter S Corporation because of their
ownership of shares of Borrower's stock, or purchase or retire any of Borrower's outstanding shares or alter or amend Borrower's capital structure.
Loans. Acquisitions and Guaranties. (1) Loan, invest in or advance money or assets to any other person, enterprise or entity, (2) purchase, create or
acquire any interest in any other enterprise or entity, or (3) incur any obligation as surety or guarantor other than in the ordinary course of business.
Agreements. Borrower will not enter into any agreement containing any provisions which would be violated or breached by the performance of
Borrower's obligations under this Agreement or in connection herewith.
CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to Borrower, whether under this Agreement or under any other
agreement, Lender shall have no obligation to make Loan Advances or to disburse Loan proceeds if: (A) Borrower or any Guarantor is in default under the terms
of, this Agreement or any of the Related Documents or any other agreement that Borrower or any Guarantor has with Lender; (B) Borrower or any Guarantor
dies, becomes incompetent or becomes insolvent, files a petition in bankruptcy or similar proceedings, or is adjudged a bankrupt, (C) there occurs a material
adverse change in Borrower's financial condition, in the financial condition of any Guarantor, or in the value of any Collateral securing any Loan; or (D) any
Guarantor seeks, claims or otherwise attempts to limit, modify or revoke such Guarantor's guaranty of the Loan or any other loan with Lender; or (E) Lender in
good faith deems itself insecure, even though no Event of Default shall have occurred.
RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower's accounts with Lender (whether checking,
savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future.
However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes Lender, to
the extent permitted by applicable law, to charge or setoff all sums owing on the Indebtedness against any and all such accounts, and, at Lender's option, to
administratively freeze all such accounts to allow Lender to protect Lender's charge and setoff rights provided in this paragraph.
DEFAULT. Any determination, decision, or decree is made by the Commissioner or any District Director of the Internal Revenue Service, or by any court of
competent jurisdiction, that the interest payable on the Loan is includable in the gross income for federal income tax purposes of the Lender by virtue of the
occurrence of any event, including any change in the Constitution or laws of the United States of America or the State of Arizona, which results in interest
payable on the Loan becoming includable in the gross income of the Lender pursuant to Section 103(b) of the Code and the rules and regulations promulgated
thereunder, if and so long as such determination, decision or decree is not being appealed or otherwise contested in good faith by the Borrower. Each of the
following shall constitute an Event of Default under this Agreement:
Payment Default. Borrower fails to make any payment when due under the Loan.
Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Agreement or in any of the
Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and
Borrower.
Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension of credit, security agreement, purchase or sales
agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower's or any Grantor's property or
Borrower's or any Grantor's ability to repay the Loans or perform their respective obligations under this Agreement or any of the Related Documents.
4817- 7684 - 2758.3
BUSINESS LOAN AGREEMENT
Loan No: (Continued) Page 5
False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Agreement or
the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any
time thereafter.
Insolvency. The dissolution or termination of Borrower's existence as a going business, the insolvency of Borrower, the appointment of a receiver for any
part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any
bankruptcy or insolvency laws by or against Borrower.
Defective Collateral ization. This Agreement or any of the Related Documents ceases to be in full force and effect (including failure of any collateral
document to create a valid and perfected security interest or lien) at any time and for any reason.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self -help, repossession or
any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the Loan, This includes a garnishment of
any of Borrower's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by
Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written
notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount
determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute.
Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or
becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness.
Change in Ownership. Any change in ownership of twenty -five percent (25 %) or more of the common stock of Borrower.
Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of the
Loan is impaired.
Insecurity. Lender in good faith believes itself insecure.
Right to Cure. If any default, including a default in payment, is curable and if Borrower or Grantor, as the case may be, has not been given a notice of a
similar default within the preceding twelve (12) months, it may be cured if Borrower or Grantor, as the case may be, after receiving written notice from
Lender demanding cure of such default: (1) cure the default within fifteen (15) days; or (2) if the cure requires more than fifteen (15) days, immediately
initiate steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continue and complete all reasonable and
necessary steps sufficient to produce compliance as soon as reasonably practical.
DISPUTE RESOLUTION. This section contains a jury waiver, arbitration clause, and a class action waiver. READ THIS SECTION CAREFULLY.
This dispute resolution provision shall supersede and replace any prior "Jury Waiver," "Judicial Reference," "Class Action Waiver," "Arbitration,"
"Dispute Resolution," or similar alternative dispute agreement or provision between or among the parties.
Jury Trial Waiver; CLASS ACTION WAIVER. As permitted by applicable law, each party waives their respective rights to a trial before a jury in
connection with any Dispute (as "Dispute" is hereinafter defined), and Disputes shall be resolved by a fudge sitting without a iury If a court determines
that this provision is not enforceable for any reason and at any time prior to trial of the Dispute, but not later than 30 days after entry of the order
determining this provision is unenforceable, any party shall be entitled to move the court for an order compelling arbitration and staying or dismissing such
litigation pending arbitration ( "Arbitration Order "). If permitted by applicable law, each party also waives the right to litigate in court or an arbitration
proceeding any Dispute as a class action either as a member of a class or as a representative or to act as a private attorney general
Arbitration. If a claim, dispute, or controversy arises between us with respect to this Agreement, related agreements, or any other agreement or business
relationship between any of us whether or not related to the subiect matter of this Agreement (all of the foregoing, a "Dispute "), and only if a jury trial
waiver is not permitted by applicable law or ruling by a court, any of us may require that the Dispute be resolved by binding arbitration before a single
arbitrator at the request of any party. By agreeing to arbitrate a Dispute each party gives up any right that party may have to a iury trial as well as other
rights that party would have in court that are not available or are more limited in arbitration such as the rights to discovery and to appeal
Arbitration shall be commenced by filing a petition with, and in accordance with the applicable arbitration rules of, JAMS or National Arbitration Forum
( "Administrator ") as selected by the initiating party. If the parties agree, arbitration may be commenced by appointment of a licensed attorney who is
selected by the parties and who agrees to conduct the arbitration without an Administrator.
Disputes include matters (i) relating to a deposit account, application for or denial of credit, enforcement of any of the obligations we have to each other,
compliance with applicable laws and /or regulations, performance or services provided under any agreement by any party, (ii) based on or arising from an
alleged tort, or (iii) involving either of our employees, agents, affiliates, or assigns of a party. However, Disputes do not include the validity, enforceability,
meaning, or scope of this arbitration provision and such matters may be determined only by a court. If a third party is a party to a Dispute, we each will
consent to including the third party in the arbitration proceeding for resolving the Dispute with the third party Venue for the arbitration proceeding shall be
at a location determined by mutual agreement of the parties or, if no agreement, in the city and state where lender or bank is headquartered.
After entry of an Arbitration Order, the non - moving party shall commence arbitration. The moving party shall, at its discretion, also be entitled to
commence arbitration but is under no obligation to do so, and the moving party shall not in any way be adversely prejudiced by electing not to commence
arbitration. The arbitrator: (i) will hear and rule on appropriate dispositive motions for judgment on the pleadings, for failure to state a claim, or for full or
partial summary judgment; (ii) will render a decision and any award applying applicable law; (iii) will give effect to any limitations period in determining any
Dispute or defense; (iv) shall enforce the doctrines of compulsory counterclaim, res judicata, and collateral estoppel, if applicable; (v) with regard to
motions and the arbitration hearing, shall apply rules of evidence governing civil cases; and (vi) will apply the law of the state specified in the agreement
giving rise to the Dispute. Filing of a petition for arbitration shall not prevent any party from (i) seeking and obtaining from a court of competent jurisdiction
(notwithstanding ongoing arbitration) provisional or ancillary remedies including but not limited to injunctive relief, property preservation orders, foreclosure,
4817 - 7684 - 27583
BUSINESS LOAN AGREEMENT
Loan No: (Continued) Page 6
eviction, attachment, replevin, garnishment, and /or the appointment of a receiver, (ii) pursuing non - judicial foreclosure, or (iii) availing itself of any self -help
remedies such as setoff and repossession. The exercise of such rights shall not constitute a waiver of the right to submit any Dispute to arbitration.
Judgment upon an arbitration award may be entered in any court having jurisdiction except that, if the arbitration award exceeds $4,000,000, any party
shall be entitled to a de novo appeal of the award before a panel of three arbitrators. To allow for such appeal, if the award (including Administrator,
arbitrator, and attorney's fees and costs) exceeds $4,000,000, the arbitrator will issue a written, reasoned decision supporting the award, including a
statement of authority and its application to the Dispute. A request for de novo appeal must be filed with the arbitrator within 30 days following the date of
the arbitration award; if such a request is not made within that time period, the arbitration decision shall become final and binding. On appeal, the
arbitrators shall review the award de novo, meaning that they shall reach their own findings of fact and conclusions of law rather than deferring in any
manner to the original arbitrator. Appeal of an arbitration award shall be pursuant to the rules of the Administrator or, if the Administrator has no such
rules, then the JAMS arbitration appellate rules shall apply.
Arbitration under this provision concerns a transaction involving interstate commerce and shall be governed by the Federal Arbitration Act, 9 U.S.C. § 1 et
seq. This arbitration provision shall survive any termination, amendment, or expiration of this Agreement. If the terms of this provision vary from the
Administrator's rules, this arbitration provision shall control.
Reliance. Each party (i) certifies that no one has represented to such party that the other party would not seek to enforce jury and class action waivers in
the event of suit, and (ii) acknowledges that it and the other party have been induced to enter into this Agreement by, among other things, the mutual
waivers, agreements, and certifications in this section.
EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur that has not been cured in a timely manner as provided herein, except where
otherwise provided in this Agreement or the Related Documents, all commitments and obligations of Lender under this Agreement or the Related Documents or
any other acceleration agreement immediately will terminate (including any obligation to make further Loan Advances or disbursements), and, at Lender's option,
all Indebtedness immediately will become due and payable, all without notice of any kind to Borrower, except that in the case of an Event of Default of the type
described in the "Insolvency" subsection above, such acceleration shall be automatic and not optional. In addition, Lender shall have all the rights and remedies
provided in the Related Documents or available at law, in equity, or otherwise. Except as may be prohibited by applicable law, all of Lender's rights and
remedies shall be cumulative and may be exercised singularly or concurrently. Election by Lender to pursue any remedy shall not exclude pursuit of any other
remedy, and an election to make expenditures or to take action to perform an obligation of Borrower or of any Grantor shall not affect Lender's right to declare a
default and to exercise its rights and remedies.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Agreement:
Amendments. This Agreement, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the
matters set forth in this Agreement. No alteration of or amendment to this Agreement shall be effective unless given in writing and signed by the party or
parties sought to be charged or bound by the alteration or amendment.
Attorneys' Fees; Expenses. Borrower agrees to pay upon demand all of Lender's costs and expenses, including Lender's attorneys' fees and Lender's
legal expenses, incurred in connection with the enforcement of this Agreement. Lender may hire or pay someone else to help enforce this Agreement,
and Borrower shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether
or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay
or injunction), appeals, and any anticipated post - judgment collection services, However, Borrower will only pay attorneys' fees of an attorney not Lender's
salaried employee, to whom the matter, is referred after Borrower's default. Borrower also shall pay all court costs and such additional fees as may be
directed by the court.
Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of
this Agreement.
Consent to Loan Participation. Borrower agrees and consents to Lender's sale or transfer, whether now or later, of one or more participation interests in
the Loan to one or more purchasers, whether related or unrelated to Lender. Lender may provide, without any limitation whatsoever, to any one or more
purchasers, or potential purchasers, any information or knowledge Lender may have about Borrower or about any other matter relating to the Loan, and
Borrower hereby waives any rights to privacy Borrower may have with respect to such matters. Borrower additionally waives any and all notices of sale of
participation interests, as well as all notices of any repurchase of such participation interests, Borrower also agrees that the purchasers of any such
participation interests will be considered as the absolute owners of such interests in the Loan and will have all the rights granted under the participation
agreement or agreements governing the sale of such participation interests.
Governing Law. This Agreement will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the
State of Arizona without regard to its conflicts of law provisions. This Agreement has been accepted by Lender in the State of Arizona.
Choice of Venue. If there is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Mohave County, State of
Arizona.
No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is given in writing and signed by
Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of
a provision of this Agreement shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any
other provision of this Agreement. No prior waiver by Lender, nor any course of dealing between Lender and Borrower, or between Lender and any
Grantor, shall constitute a waiver of any of Lender's rights or of any of Borrower's or any Grantor's obligations as to any future transactions. Whenever the
consent of Lender is required under this Agreement, the granting of such consent by Lender in any instance shall not constitute continuing consent to
subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender.
Notices. Any notice required to be given under this Agreement shall be given in writing, and shall be effective when actually delivered, when actually
received by facsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in
the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Agreement.
Any party may change its address for notices under this Agreement by giving formal written notice to the other parties, specifying that the purpose of the
4817 - 7684 - 2758.3
BUSINESS LOAN AGREEMENT
Loan No: (Continued) Page 7
notice is to change the party's address. For notice purposes, Borrower agrees to keep Lender informed at all times of Borrower's current address, Unless
otherwise provided or required by law, if there is more than one Borrower, any notice given by Lender to any Borrower is deemed to be notice given to all
Borrowers.
Severability. If a court of competent jurisdiction finds any provision of this Agreement to be illegal, invalid, or unenforceable as to any circumstance, that
finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible, the offending provision shall be
considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so modified, it shall be considered deleted from
this Agreement. Unless otherwise required by law, the illegality, invalidity, or unenforceability of any provision of this Agreement shall not affect the
legality, validity or enforceability of any other provision of this Agreement.
Subsidiaries and Affiliates of Borrower. To the extent the context of any provisions of this Agreement makes it appropriate, including without limitation
any representation, warranty or covenant, the word "Borrower" as used in this Agreement shall include all of Borrower's subsidiaries and affiliates.
Notwithstanding the foregoing however, under no circumstances shall this Agreement be construed to require Lender to make any Loan or other financial
accommodation to any of Borrower's subsidiaries or affiliates.
Successors and Assigns. All covenants and agreements by or on behalf of Borrower contained in this Agreement or any Related Documents shall bind
Borrower's successors and assigns and shall inure to the benefit of Lender and its successors and assigns. Borrower shall not, however, have the right to
assign Borrower's rights under this Agreement or any interest therein, without the prior written consent of Lender.
Survival of Representations and Warranties. Borrower understands and agrees that in extending Loan Advances, Lender is relying on all
representations, warranties, and covenants made by Borrower in this Agreement or in any certificate or other instrument delivered by Borrower to Lender
under this Agreement or the Related Documents. Borrower further agrees that regardless of any investigation made by Lender, all such representations,
warranties and covenants will survive the extension of Loan Advances and delivery to Lender of the Related Documents, shall be continuing in nature,
shall be deemed made and redated by Borrower at the time each Loan Advance is made, and shall remain in full force and effect until such time as
Borrower's Indebtedness shall be paid in full, or until this Agreement shall be terminated in the manner provided above, whichever is the last to occur.
Time is of the Essence. Time is of the essence in the performance of this Agreement.
DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Agreement, Unless specifically stated to the
contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall
include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code. Accounting words and terms not otherwise defined in this Agreement shall have the
meanings assigned to them in accordance with generally accepted accounting principles as in effect on the date of this Agreement:
Additions to Tax. The word "Additions to Tax" means any penalties, fines, additions to tax, interest and additional amounts described in the Code or
under the laws of any state or local government, paid or incurred by Lender in the event of a Determination of Taxability.
Advance. The word "Advance" means a disbursement of Loan funds made, or to be made, to Borrower or on Borrower's behalf on a line of credit or
multiple advance basis under the terms and conditions of this Agreement.
Agreement. The word "Agreement" means this Business Loan Agreement, as this Business Loan Agreement may be amended or modified from time to
time, together with all exhibits and schedules attached to this Business Loan Agreement from time to time.
Borrower. The word "Borrower" means MOHAVE COUNTY AIRPORT AUTHORITY, INC. and includes all co- Signers and co- makers signing the Note
and all their successors and assigns. The Borrower (i) REPRESENTS THAT BORROWER AND ITS AFFILIATES HAVE NO DEFENSES TO OR
SETOFFS AGAINST ANY INDEBTEDNESS OR OTHER OBLIGATIONS OWING TO LENDER OR ITS AFFILIATES (THE "OBLIGATIONS "), NOR
CLAIMS AGAINST LENDER OR ITS AFFILIATES FOR ANY MATTER WHATSOEVER, RELATED OR UNRELATED TO THE OBLIGATIONS, AND (ii)
RELEASES LENDER AND ITS AFFILIATES FROM ALL CLAIMS, CAUSES OF ACTION, AND COSTS, IN LAW OR EQUITY, EXISTING AS OF THE
DATE OF THIS AGREEMENT WHICH BORROWER AND ITS AFFILIATES HAVE OR MAY HAVE BY REASON OF ANY MATTER OF ANY
CONCEIVABLE KIND OR CHARACTER WHATSOEVER, RELATED OR UNRELATED TO THE OBLIGATIONS, INCLUDING THE SUBJECT MATTER
OF THIS AGREEMENT. THE FOREGOING RELEASE DOES NOT APPLY, HOWEVER, TO CLAIMS FOR FUTURE PERFORMANCE OF EXPRESS
CONTRACTUAL OBLIGATIONS THAT MATURE AFTER THE DATE HEREOF THAT ARE OWING TO BORROWER OR ITS AFFILIATES BY LENDER
OR ITS AFFILIATES.
Collateral. The word "Collateral" means all Grantors' accounts (including, but not limited to, accounts receivable), instruments, payment intangibles,
deposit accounts, revenues, income and other benefits derived from the operation of the Borrower.
Determination of Taxability. The word "Determination of Taxability" means one of the following determinations, made in regard to Section 103 of the
Code to the effect that by reason of any action or inaction by the Borrower or any violation by the Borrower of any of its covenants or representations in
this Agreement, the Tax Certificate, or any misrepresentation in any certificate furnished in connection with the Loan, the interest payable on the Note is
includable in the gross income of the holder thereof: (a) a final determination, decision, or decree by the Commissioner or any District Director of the
Internal Revenue Service, or by any court of competent jurisdiction, which is not subject to further review, in a proceeding in which the Borrower was
afforded the opportunity to contest the issues involving federal income tax treatment of interest on the Note, either directly or in the name of the owner
thereof, or (b) an opinion of a nationally recognized bond counsel furnished by the Lender to the Borrower.
Environmental Laws. The words "Environmental Laws" mean any and all state, federal and local statutes, regulations and ordinances relating to the
protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act
of 1980, as amended, 42 U.S.C. Section 9601, et seq. ( "CERCLA "), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99 -499
( "SARA "), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section
6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto.
Event of Default. The words "Event of Default" mean any of the events of default set forth in this Agreement in the default section of this Agreement.
4817 - 7684 - 2758.3
BUSINESS LOAN AGREEMENT
Loan No: (Continued) Page 8
GAAP. The word "GAAP" means generally accepted accounting principles.
Grantor. The word "Grantor' means each and all of the persons or entities granting a Security Interest in any Collateral for the Loan, including without
limitation all Borrowers granting such a Security Interest,
Guarantor. The word "Guarantor" means any guarantor, surety, or accommodation party of any or all of the Loan.
Guaranty. The word "Guaranty" means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note.
Hazardous Substances. The words "Hazardous Substances" mean materials that, because of their quantity, concentration or physical, chemical or
infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored,
disposed of, generated, manufactured, transported or otherwise handled. The words "Hazardous Substances" are used in their very broadest sense and
include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term
"Hazardous Substances" also includes, without limitation, petroleum and petroleum by- products or any fraction thereof and asbestos.
Indebtedness. The word "Indebtedness" means the indebtedness evidenced by the Note or Related Documents, including all principal and interest
together with all other indebtedness and costs and expenses for which Borrower is responsible under this Agreement or under any of the Related
Documents.
Lender. The word "Lender" means NATIONAL BANK OF ARIZONA, its successors and assigns.
Loan. The word "Loan" means any and all loans and financial accommodations from Lender to Borrower whether now or hereafter existing, and however
evidenced, including without limitation those loans and financial accommodations described herein or described on any exhibit or schedule attached to this
Agreement from time to time.
Note. The word "Note" means the Note executed by MOHAVE COUNTY AIRPORT AUTHORITY, INC. in the principal amount of $2,899,251.00 dated
June 2010, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the note or credit
agreement.
Payment Date. The word "Payment Date' means, with respect to each Note, the date on which payment is due under such Note.
Permitted Liens. The words 'Permitted Liens" mean (1) liens and security interests securing Indebtedness owed by Borrower to Lender; (2) liens for
taxes, assessments, or similar charges either not yet due or being contested in good faith; (3) liens of materialmen, mechanics, warehousemen, or
carriers, or other like liens arising in the ordinary course of business and securing obligations which are not yet delinquent; (4) purchase money liens or
purchase money security interests upon or in any property acquired or held by Borrower in the ordinary course of business to secure indebtedness
outstanding on the date of this Agreement or permitted to be incurred under the paragraph of this Agreement titled "Indebtedness and Liens "; (5) liens and
security interests which, as of the date of this Agreement, have been disclosed to and approved by the Lender in writing; and (6) those liens and security
interests which in the aggregate constitute an immaterial and insignificant monetary amount with respect to the net value of Borrower's assets.
Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements,
guaranties, security agreements, security deeds, and all other instruments, agreements and documents, whether now or hereafter existing, executed in
connection with the Loan.
Security Agreement. The words "Security Agreement' mean and include without limitation any agreements, promises, covenants, arrangements,
understandings or other agreements, whether created by law, contract, or otherwise, evidencing, governing, representing, or creating a Security Interest,
including, without limitation, the Commercial Security Agreement dated June _, 2010.
Security Interest. The words "Security Interest' mean, without limitation, any and all types of collateral security, present and future, whether in the form of
a lien, charge, encumbrance, security deed, assignment, pledge, crop pledge, chattel trust, factor's lien, equipment trust, conditional sale, trust receipt, lien
or title retention contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever whether created by law,
contract, or otherwise.
Tax Certificate. The word "Tax Certificate' means the tax compliance certificate to be signed by the Borrower, in a form acceptable to Bond Counsel (as
that term is defined in the Tax Certificate), relating to the requirements of Sections 103 and 141 to 150, inclusive, of the Code.
Taxable Date. The word 'Taxable Date' means that date when interest on the Loan becomes subject to federal income taxation.
Taxable Rate. The word 'Taxable Rate' means, following the Taxable Date, a rate which reflects the rate set forth in the Note, adjusted to reflect that the
interest on the Loan is not excluded from gross income for federal tax purposes, nor exempt from Arizona personal taxation. The Taxable Rate shall be
determined by the Lender in its sole and absolute discretion, and shall be conclusive absent manifest error.
BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT AND BORROWER AGREES TO ITS
TERMS. THIS BUSINESS LOAN AGREEMENT IS DATED JUNE _, 2010.
BORROWER:
MOHAVE COUNTY AIRPORT AUTHORITY, INC.
By:
JOHN HASTINGS, President
4817 - 7684 - 2758.3
BUSINESS LOAN AGREEMENT
Loan No: (Continued) Page 9
MOHAVE COUNTY AIRPORT AUTHORITY, INC.
LENDER:
NATIONAL BANK OF ARIZONA
By:
Authorized Signer
4817 - 7684 - 2758.3
EXHIBIT A
FEE SCHEDULE
4817- 7684 - 2758.3
COMMERCIAL SECURITY AGREEMENT
Principal Loan Date Maturity Loan No Call / Coll Account Officer Initials
$2,105,749.00 06 -_ 2010 _ -_ -20_ -_ _
References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item.
Any item above containing " ** has been omitted due to text length limitations.
Borrower: Mohave County Airport Authority, Inc. Lender: National Bank of Arizona
(TIN: 86- 0383435) 4676 Hwy. 95, Suite 101
2550 Laughlin View Drive, Suite 117 Fort Mohave, AZ 86426
Bullhead City, AZ 86429 (928) 763 -5618
THIS COMMERCIAL SECURITY AGREEMENT dated June _, 2010, is made and executed between MOHAVE COUNTY AIRPORT AUTHORITY,
INC.. ( "Grantor ") and NATIONAL BANK OF ARIZONA ( "Lender ").
GRANT OF SECURITY INTEREST. For valuable consideration, Grantor grants to Lender a security interest in the Collateral to secure the
Indebtedness and agrees that Lender shall have the rights stated in this Agreement with respect to the Collateral, in addition to all other rights which
Lender may have by law.
COLLATERAL DESCRIPTION. The word "Collateral" as used in this Agreement means the following described property, whether now owned or
hereafter acquired, whether now existing or hereafter arising, and wherever located, in which Grantor is giving to Lender a security interest for the
payment of the Indebtedness and performance of all other obligations under the Note and this Agreement:
All Grantors' accounts (including, but not limited to, accounts receivable), instruments, payment intangibles, deposit accounts, revenues,
income and other benefits derived from the operation of the Borrower.
In addition, the word "Collateral" also includes all the following, whether now owned or hereafter acquired, whether now existing or hereafter arising,
and wherever located:
(A) All accessions, attachments, accessories, replacements of and additions to any of the collateral described herein, whether added now
or later.
(B) All products and produce of any of the property described in this Collateral section.
(C) All accounts, general intangibles, instruments, rents, monies, payments, and all other rights, arising out of a sale, lease, consignment or
other disposition of any of the property described in this Collateral section.
(D) All proceeds (including insurance proceeds) from the sale, destruction, loss, or other disposition of any of the property described in this
Collateral section, and sums due from a third party who has damaged or destroyed the Collateral or from that party's insurer, whether due to
judgment, settlement or other process,
(E) All records and data relating to any of the property described In this Collateral section, whether in the form of a writing, photograph,
microfilm, microfiche, or electronic media, together with all of Grantor's right, title, and interest in and to all computer software required to
utilize, create, maintain, and process any such records or data on electronic media.
CROSS -COLLATE RALIZATI ON. In addition to the Note, this Agreement secures all obligations, debts and liabilities, plus interest thereon, of Grantor
to Lender, or any one or more of them, as well as all claims by Lender against Grantor or any one or more of them, whether now existing or hereafter
arising, whether related or unrelated to the purpose of the Note, whether voluntary or otherwise, whether due or not due, direct or indirect, determined
or undetermined, absolute or contingent, liquidated or unliquidated, whether Grantor may be liable individually or jointly with others, whether obligated
as guarantor, surety, accommodation party or otherwise, and whether recovery upon such amounts may be or hereafter may become barred by any
statute of limitations, and whether the obligation to repay such amounts may be or hereafter may become otherwise unenforceable, (Initial Here )
RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Grantor's accounts with Lender (whether
checking, savings, or some other account). This includes all accounts Grantor holds jointly with someone else and all accounts Grantor may open in
the future, However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Grantor
authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the Indebtedness against any and all such accounts,
and, at Lender's option, to administratively freeze all such accounts to allow Lender to protect Lender's charge and setoff rights provided in this
paragraph.
GRANTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL. With respect to the Collateral, Grantor
represents and promises to Lender that:
Perfection of Security Interest. Grantor agrees to take whatever actions are requested by Lender to perfect and continue Lender's security
interest in the Collateral, Upon request of Lender, Grantor will deliver to Lender any and all of the documents evidencing or constituting the
Collateral, and Grantor will note Lender's interest upon any and all chattel paper and instruments if not delivered to Lender for possession by
Lender. This is a continuing Security Agreement and will continue in effect even though all or any part of the Indebtedness is paid in
full and even though for a period of time Grantor may not be indebted to Lender.
Notices to Lender. Grantor will promptly notify Lender in writing at Lender's address shown above (or such other addresses as Lender may
designate from time to time) prior to any (1) change in Grantor's name; (2) change in Grantor's assumed business name(s); (3) change in the
management of the Corporation Grantor; (4) change in the authorized signer(s); (5) change in Grantor's principal office address; (6) change in
Grantor's state of organization; (7) conversion of Grantor to a new or different type of business entity; or (8) change in any other aspect of
Grantor that directly or indirectly relates to any agreements between Grantor and Lender. No change in Grantor's name or state of
organization will take effect until after Lender has received notice.
4821 - 6245 - 6582.2
COMMERCIAL SECURITY AGREEMENT
Loan No: (Continued) Page 2
No Violation. The execution and delivery of this Agreement will not violate any law or agreement governing Grantor or to which Grantor is a
party, and its certificate or articles of incorporation and bylaws do not prohibit any term or condition of this Agreement.
Enforceability of Collateral. To the extent the Collateral consists of accounts, chattel paper, or general intangibles, as defined by the
Uniform Commercial Code, the Collateral is enforceable in accordance with its terms, is genuine, and fully complies with all applicable laws
and regulations concerning form, content and manner of preparation and execution, and all persons appearing to be obligated on the
Collateral have authority and capacity to contract and are in fact obligated as they appear to be on the Collateral. There shall be no setoffs or
counterclaims against any of the Collateral, and no agreement shall have been made under which any deductions or discounts may be
claimed concerning the Collateral except those disclosed to Lender in writing.
Location of the Collateral. Except in the ordinary course of Grantor's business, Grantor agrees to keep the Collateral (or to the extent the
Collateral consists of intangible property such as accounts or general intangibles, the records concerning the Collateral) at Grantor's address
shown above or at such other locations as are acceptable to Lender. Upon Lender's request, Grantor will deliver to Lender in form
satisfactory to Lender a schedule of real properties and Collateral locations relating to Grantor's operations, including without limitation the
following: (1) all real property Grantor owns or is purchasing; (2) all real property Grantor is renting or leasing; (3) all storage facilities Grantor
owns, rents, leases, or uses; and (4) all other properties where Collateral is or may be located.
Removal of the Collateral. Except in the ordinary course of Grantor's business, Grantor shall not remove the Collateral from its existing
location without Lender's prior written consent. Grantor shall, whenever requested, advise Lender of the exact location of the Collateral.
Transactions Involving Collateral. Except for inventory sold or accounts collected in the ordinary course of Grantor's business, or as
otherwise provided for in this Agreement, Grantor shall not sell, offer to sell, or otherwise transfer or dispose of the Collateral. Grantor shall
not pledge, mortgage, encumber or otherwise permit the Collateral to be subject to any lien, security interest, encumbrance, or charge, other
than the security interest provided for in this Agreement, without the prior written consent of Lender. This includes security interests even if
junior in right to the security interests granted under this Agreement. Unless waived by Lender, all proceeds from any disposition of the
Collateral (for whatever reason) shall be held in trust for Lender and shall not be commingled with any other funds; provided however, this
requirement shall not constitute consent by Lender to any sale or other disposition. Upon receipt, Grantor shall immediately deliver any such
proceeds to Lender.
Title. Grantor represents and warrants to Lender that Grantor holds good and marketable title to the Collateral, free and clear of all liens and
encumbrances except for the lien of this Agreement. No financing statement covering any of the Collateral is on file in any public office other
than those which reflect the security interest created by this Agreement or to which Lender has specifically consented. Grantor shall defend
Lender's rights in the Collateral against the claims and demands of all other persons.
Inspection of Collateral. Lender and Lender's designated representatives and agents shall have the right at all reasonable times to
examine and inspect the Collateral wherever located.
Taxes, Assessments and Liens. Grantor will pay when due all taxes, assessments and liens upon the Collateral, its use or operation, upon
this Agreement, upon any promissory note or notes evidencing the Indebtedness, or upon any of the other Related Documents. Grantor may
withhold any such payment or may elect to contest any lien if Grantor is in good faith conducting an appropriate proceeding to contest the
obligation to pay and so long as Lender's interest in the Collateral is not jeopardized in Lender's sole opinion. If the Collateral is subjected to a
lien which is not discharged within fifteen (15) days, Grantor shall deposit with Lender cash, a sufficient corporate surety bond or other
security satisfactory to Lender in an amount adequate to provide for the discharge of the lien plus any interest, costs, attorneys' fees or other
charges that could acme as a result of foreclosure or sale of the Collateral. In any contest Grantor shall defend itself and Lender and shall
satisfy any final adverse judgment before enforcement against the Collateral. Grantor shall name Lender as an additional obligee under any
surety bond furnished in the contest proceedings. Grantor further agrees to furnish Lender with evidence that such taxes, assessments, and
governmental and other charges have been paid in full and in a timely manner. Grantor may withhold any such payment or may elect to
contest any lien if Grantor is in good faith conducting an appropriate proceeding to contest the obligation to pay and so long as Lender's
interest in the Collateral is not jeopardized.
Compliance with Governmental Requirements. Grantor shall comply promptly with all laws, ordinances, rules and regulations of all
governmental authorities, now or hereafter in effect, applicable to the ownership, production, disposition, or use of the Collateral, including all
laws or regulations relating to the undue erosion of highly - erodible land or relating to the conversion of wetlands for the production of an
agricultural product or commodity. Grantor may contest in good faith any such law, ordinance or regulation and withhold compliance during
any proceeding, including appropriate appeals, so long as Lender's interest in the Collateral, in Lender's opinion, is not jeopardized.
Hazardous Substances. Grantor represents and warrants that the Collateral never has been, and never will be so long as this Agreement
remains a lien on the Collateral, used in violation of any Environmental Laws or for the generation, manufacture, storage, transportation,
treatment, disposal, release or threatened release of any Hazardous Substance. The representations and warranties contained herein are
based on Grantor's due diligence in investigating the Collateral for Hazardous Substances, Grantor hereby (1) releases and waives any future
claims against Lender for indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under any Environmental
Laws, and (2) agrees to indemnify, defend, and hold harmless Lender against any and all claims and losses resulting from a breach of this
provision of this Agreement. This obligation to Indemnify end defend shall survive the payment of the Indebtedness and the satisfaction of this
Agreement.
Maintenance of Casualty Insurance. Grantor shall procure and maintain all risks insurance, including without limitation fire, theft and
liability coverage together with such other insurance as Lender may require with respect to the Collateral, in form, amounts, coverages and
basis reasonably acceptable to Lender and issued by a company or companies reasonably acceptable to Lender. Grantor, upon request of
Lender, will deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender, including stipulations that
coverages will not be cancelled or diminished without at least thirty (30) days' prior written notice to Lender and not including any disclaimer of
the insurer's liability for failure to give such a notice. Each insurance policy also shall include an endorsement providing that coverage in favor
4821 - 6245 - 6582.2
COMMERCIAL SECURITY AGREEMENT
Loan No: (Continued) Page 3
of Lender will not be impaired in any way by any act, omission or default of Grantor or any other person. In connection with all policies
covering assets in which Lender holds or is offered a security interest, Grantor will provide Lender with such loss payable or other
endorsements as Lender may require. If Grantor at any time fails to obtain or maintain any insurance as required under this Agreement,
Lender may (but shall not be obligated to) obtain such insurance as Lender deems appropriate, including if Lender so chooses "single interest
insurance," which will cover only Lender's interest in the Collateral.
Application of Insurance Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Collateral, whether or not such
casualty or loss is covered by insurance. Lender may make proof of loss if Grantor fails to do so within fifteen (15) days of the casualty. All
proceeds of any insurance on the Collateral, including accrued proceeds thereon, shall be held by Lender as part of the Collateral. If Lender
consents to repair or replacement of the damaged or destroyed Collateral, Lender shall, upon satisfactory proof of expenditure, pay or
reimburse Grantor from the proceeds for the reasonable cost of repair or restoration. If Lender does not consent to repair or replacement of
the Collateral, Lender shall retain a sufficient amount of the proceeds to pay all of the Indebtedness, and shall pay the balance to Grantor.
Any proceeds which have not been disbursed within six (6) months after their receipt and which Grantor has not committed to the repair or
restoration of the Collateral shall be used to prepay the Indebtedness.
Insurance Reserves. Lender may require Grantor to maintain with Lender reserves for payment of insurance premiums, which reserves
shall be created by monthly payments from Grantor of a sum estimated by Lender to be sufficient to produce, at least fifteen (15) days before
the premium due date, amounts at least equal to the insurance premiums to be paid. If fifteen (15) days before payment is due, the reserve
funds are insufficient, Grantor shall upon demand pay any deficiency to Lender. The reserve funds shall be held by Lender as a general
deposit and shall constitute a non - interest - bearing account which Lender may satisfy by payment of the insurance premiums required to be
paid by Grantor as they become due. Lender does not hold the reserve funds in trust for Grantor, and Lender is not the agent of Grantor for
payment of the insurance premiums required to he paid by Grantor. The responsibility for the payment of premiums shall remain Grantor's
sole responsibility.
Insurance Reports. Grantor, upon request of Lender, shall furnish to Lender reports on each existing policy of insurance showing such
information as Lender may reasonably request including the following. (1) the name of the insurer; (2) the risks insured, (3) the amount of the
policy; (4) the property insured; (5) the then current value on the basis of which insurance has been obtained and the manner of determining
that value; and (6) the expiration date of the policy. In addition, Grantor shall upon request by Lender (however not more often than annually)
have an independent appraiser satisfactory to Lender determine, as applicable, the cash value or replacement cost of the Collateral
Financing Statements. Grantor authorizes Lender to file a UCC financing statement, or alternatively, a copy of this Agreement to perfect
Lender's security interest. At Lender's request, Grantor additionally agrees to sign all other documents that are necessary to perfect, protect,
and continue Lender's security interest in the Property. Grantor will pay all filing fees, title transfer fees, and other fees and costs involved
unless prohibited by law or unless Lender is required by law to pay such fees and costs, Grantor irrevocably appoints Lender to execute
documents necessary to transfer title if there is a default. Lender may file a copy of this Agreement as a financing statement. If Grantor
changes Grantor's name or address, or the name or address of any person granting a security interest under this Agreement changes,
Grantor will promptly notify the Lender of such change.
LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the Collateral or if Grantor
fails to comply with any provision of this Agreement or any Related Documents, including but not limited to Grantor's failure to discharge or pay when
due any amounts Grantor is required to discharge or pay under this Agreement or any Related Documents, Lender on Grantor's behalf may (but shall
not be obligated to) take any action that Lender deems appropriate, to the extent permitted by applicable law, including but not limited to discharging or
paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on the Collateral and paying all costs for
maintaining and preserving the Collateral. All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged
under the Note from the date incurred or paid by Lender to the date of repayment by Grunter. All such expenses will become a part of the Indebtedness
and, at Lender's option, will (A) he payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any
installment payments to become due during the remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at
the Note's maturity.. The Agreement also will secure payment of these amounts. Such right shall be in addition to all other rights and remedies to which
Lender may be entitled upon Default and shall be exercisable by Lender to the extent permitted by applicable law.
DISPUTE RESOLUTION. This section contains a jury waiver, arbitration clause, and a class action waiver. READ THIS SECTION
CAREFULLY.
This dispute resolution provision shall supersede and replace any prior "Jury Waiver," "Judicial Reference," "Class Action Waiver," "Arbitration,"
"Dispute Resolution," or similar alternative dispute agreement or provision between or among the parties.
Jury Trial Waiver; CLASS ACTION WAIVER. As permitted by applicable law, each party waives their respective rights to a trial before a jury in
connection with any Dispute (as "Dispute" is hereinafter defined), and Disputes shall be resolved by a judge sitting without a jury If a court determines
that this provision is not enforceable for any reason and at any time prior to trial of the Dispute, but not later than 30 days after entry of the order
determining this provision is unenforceable, any party shall be entitled to move the court for an order compelling arbitration and staying or dismissing
such litigation pending arbitration ( "Arbitration Order "). If permitted by applicable law, each party also waives the right to litigate in court or an
arbitration proceeding any Dispute as a class action either as a member of a class or as a representative or to act as a private attorney general
Arbitration. If a claim, dispute, or controversy arises between us with respect to this Agreement, related agreements, or any other agreement or
business relationship between any of us whether or not related to the subject matter of this Agreement (all of the foregoing, a "Dispute "), and only if a
jury trial waiver is not permitted by applicable law or ruling by a court, any of us may require that the Dispute be resolved by binding arbitration before
a single arbitrator at the request of any party. By agreeing to arbitrate a Dispute each party gives up any right that party may have to a jury trial as
well as other rights that party would have in court that are not available or are more limited in arbitration, such as the rights to discovery and to appeal
4821 - 6245 - 6582.2
COMMERCIAL SECURITY AGREEMENT
Loan No: (Continued) Page 4
Arbitration shall be commenced by filing a petition with, and in accordance with the applicable arbitration rules of, JAMS or National Arbitration Forum
( "Administrator ") as selected by the initiating party. If the parties agree, arbitration may be commenced by appointment of a licensed attorney who is
selected by the parties and who agrees to conduct the arbitration without an Administrator.
Disputes include matters (i) relating to a deposit account, application for or denial of credit, enforcement of any of the obligations we have to each
other, compliance with applicable laws and /or regulations, performance or services provided under any agreement by any party, (ii) based on or
arising from an alleged tort, or (iii) involving either of our employees, agents, affiliates, or assigns of a party. However, Disputes do not include the
validity, enforceability, meaning, or scope of this arbitration provision and such matters may be determined only by a court. If a third party is a party to
a Dispute we each will consent to including the third party in the arbitration proceeding for resolving the Dispute with the third party Venue for the
arbitration proceeding shall be at a location determined by mutual agreement of the parties or, if no agreement, in the city and state where lender or
bank is headquartered.
After entry of an Arbitration Order, the non - moving party shall commence arbitration. The moving party shall, at its discretion, also be entitled to
commence arbitration but is under no obligation to do so, and the moving party shall not in any way be adversely prejudiced by electing not to
commence arbitration. The arbitrator: (i) will hear and rule on appropriate dispositive motions for judgment on the pleadings, for failure to state a
claim, or for full or partial summary judgment; (ii) will render a decision and any award applying applicable law; (iii) will give effect to any limitations
period in determining any Dispute or defense; (iv) shall enforce the doctrines of compulsory counterclaim, res judicata, and collateral estoppel, if
applicable; (v) with regard to motions and the arbitration hearing, shall apply rules of evidence governing civil cases; and (vi) will apply the law of the
state specified in the agreement giving rise to the Dispute. Filing of a petition for arbitration shall not prevent any party from (i) seeking and obtaining
from a court of competent jurisdiction (notwithstanding ongoing arbitration) provisional or ancillary remedies including but not limited to injunctive relief,
property preservation orders, foreclosure, eviction, attachment, replevin, garnishment, and /or the appointment of a receiver, (ii) pursuing non - judicial
foreclosure, or (iii) availing itself of any self -help remedies such as setoff and repossession. The exercise of such rights shall not constitute a waiver of
the right to submit any Dispute to arbitration.
Judgment upon an arbitration award may be entered in any court having jurisdiction except that, if the arbitration award exceeds $4,000,000, any party
shall be entitled to a de novo appeal of the award before a panel of three arbitrators. To allow for such appeal, if the award (including Administrator,
arbitrator, and attorney's fees and costs) exceeds $4,000,000, the arbitrator will issue a written, reasoned decision supporting the award, including a
statement of authority and its application to the Dispute. A request for de novo appeal must be filed with the arbitrator within 30 days following the
date of the arbitration award; if such a request is not made within that time period, the arbitration decision shall become final and binding. On appeal,
the arbitrators shall review the award de novo, meaning that they shall reach their own findings of fact and conclusions of law rather than deferring in
any manner to the original arbitrator. Appeal of an arbitration award shall be pursuant to the rules of the Administrator or, if the Administrator has no
such rules, then the JAMS arbitration appellate rules shall apply.
Arbitration under this provision concerns a transaction involving interstate commerce and shall be governed by the Federal Arbitration Act, 9 U.S.C. §
1 et seq. This arbitration provision shall survive any termination, amendment, or expiration of this Agreement. If the terms of this provision vary from
the Administrator's rules, this arbitration provision shall control.
Reliance. Each party (i) certifies that no one has represented to such party that the other party would not seek to enforce jury and class action
waivers in the event of suit, and (ii) acknowledges that it and the other party have been induced to enter into this Agreement by, among other things,
the mutual waivers, agreements, and certifications in this section.
DEFAULT. Each of the following shall constitute an Event of Default under this Agreement:
Payment Default. Grantor fails to make any payment when due under the Indebtedness.
Other Defaults. Grantor fails to comply with or to perform any other term, obligation, covenant or condition contained in this Agreement or in
any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement
between Lender and Grantor.
Default in Favor of Third Parties. Grantor defaults under any loan, extension of credit, security agreement, purchase or sales agreement,
or any other agreement, in favor of any other creditor or person that may materially affect any of Grantor's property or ability to perform
Grantor's obligations under this Agreement or any of the Related Documents.
False Statements. Any warranty, representation or statement made or furnished to Lender by Grantor or on Grantor's behalf under this
Agreement or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes
false or misleading at any time thereafter.
Defective Collateralization. This Agreement or any of the Related Documents ceases to he in full force and effect (including failure of any
collateral document to create a valid and perfected security interest or lien) at any time and for any reason.
Insolvency. The dissolution or termination of Grantor's existence as a going business, the insolvency of Grantor, the appointment of a
receiver for any part of Grantor's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of
any proceeding under any bankruptcy or insolvency laws by or against Grantor.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self -help,
repossession or any other method, by any creditor of Grantor or by any governmental agency against any collateral securing the
Indebtedness. This includes a garnishment of any of Grantor's accounts, including deposit accounts, with Lender. However, this Event of
Default shall not apply if there is a good faith dispute by Grantor as to the validity or reasonableness of the claim which is the basis of the
creditor or forfeiture proceeding and if Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender
monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an
adequate reserve or bond for the dispute.
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COMMERCIAL SECURITY AGREEMENT
Loan No: (Continued) Page 5
Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor, endorser, surety, or accommodation party
of any of the Indebtedness or guarantor, endorser, surety, or accommodation party dies or becomes incompetent or revokes or disputes the
validity of, or liability under, any Guaranty of the Indebtedness.
Adverse Change. A material adverse change occurs in Grantor's financial condition, or Lender believes the prospect of payment or
performance of the Indebtedness is impaired.
Insecurity. Lender in good faith believes itself insecure.
Cure Provisions. If any default, including a default in payment, is curable and if Grantor has not been given a notice of a breach of the same
provision of this Agreement within the preceding twelve (12) months, it may be cured if Grantor, after receiving written notice from Lender
demanding cure of such default: (1) cures the default within fifteen (15) days; or (2) if the cure requires more than fifteen (15) days,
immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and
completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical.
RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this Agreement, at any time thereafter, Lender shall have all the rights of
a secured party under the Arizona Uniform Commercial Code. in addition and without limitation, Lender may exercise any one or more of the following
rights and remedies:
Accelerate Indebtedness. Upon default that has not been cured in a timely manner as Lender may declare the entire Indebtedness,
including any prepayment penalty which Grantor would be required to pay, immediately due and payable.
Sell the Collateral. Lender shall have full power to sell, lease, transfer, or otherwise deal with the Collateral or proceeds thereof in Lender's
own name or that of Grantor. Lender may sell the Collateral at public auction or private sale. Unless the Collateral threatens to decline
speedily in value or is of a type customarily sold on a recognized market, Lender will give Grantor, and other persons as required by law,
reasonable notice of the time and place of any public sale, or the time after which any private sale or any other disposition of the Collateral is
to be made. However, no notice need be provided to any person who, after Event of Default occurs, enters into and authenticates an
agreement waiving that person's right to notification of sale. The requirements of reasonable notice shall be met if such notice is given at least
ten (10) days before the time of the sale or disposition. All expenses relating to the disposition of the Collateral, including without limitation the
expenses of retaking, holding, insuring, preparing for sale and selling the Collateral, shall become a part of the Indebtedness secured by this
Agreement and shall be payable on demand, with interest at the Note rate from date of expenditure until repaid.
Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Collateral, with the
power to protect and preserve the Collateral, to operate the Collateral preceding foreclosure or sale, and to collect the Rents from the
Collateral and apply the proceeds, over and above the cost of the receivership, against the Indebtedness. The receiver may serve without
bond if permitted by law. Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Collateral
exceeds the Indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver.
Collect Revenues, Apply Accounts. Lender, either itself or through a receiver, may collect the payments, rents, income, and revenues from
the Collateral. Lender may at any time in Lender's discretion transfer any Collateral into Lender's own name or that of Lender's nominee and
receive the payments, rents, income, and revenues therefrom and hold the same as security for the Indebtedness or apply it to payment of
the Indebtedness in such order of preference as Lender may determine, Insofar as the Collateral consists of accounts, general intangibles,
insurance policies, instruments, chattel paper, chases in action, or similar property, Lender may demand, collect, receipt for, settle,
compromise, adjust, sue for, foreclose, or realize on the Collateral as Lender may determine, whether or not Indebtedness or Collateral is
then due. For these purposes, Lender may, on behalf of and in the name of Grantor, receive, open and dispose of mail addressed to Grantor;
change any address to which mail and payments are to be sent; and endorse notes, checks, drafts, money orders, documents of title,
instruments and items pertaining to payment, shipment, or storage of any Collateral. To facilitate collection, Lender may notify account
debtors and obligors on any Collateral to make payments directly to Lender.
Obtain Deficiency. If Lender chooses to sell any or all of the Collateral, Lender may obtain a judgment against Grantor for any deficiency
remaining on the Indebtedness due to Lender after application of all amounts received from the exercise of the rights provided in this
Agreement. Grantor shall be liable for a deficiency even if the transaction described in this subsection is a sale of accounts or chattel paper.
Other Rights and Remedies. Lender shall have all the rights and remedies of a secured creditor under the provisions of the Uniform
Commercial Code, as may be amended from time to time. In addition, Lender shall have and may exercise any or all other rights and
remedies it may have available at law, in equity, or otherwise.
Election of Remedies. Except as may be prohibited by applicable law, all of Lender's rights and remedies, whether evidenced by this
Agreement, the Related Documents, or by any other writing, shall be cumulative and may be exercised singularly or concurrently. Election by
Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform
an obligation of Grantor under this Agreement, after Grantor's failure to perform, shall not affect Lender's right to declare a default and
exercise its remedies.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Agreement:
Amendments. This Agreement, together with any Related Documents, constitutes the entire understanding and agreement of the parties as
to the matters set forth in this Agreement. No alteration of or amendment to this Agreement shall be effective unless given in writing and
signed by the party or parties sought to be charged or bound by the alteration or amendment.
Attorneys' Fees; Expenses. Grantor agrees to pay upon demand all of Lender's costs and expenses, including Lender's attorneys' fees
and Lender's legal expenses, incurred in connection with the enforcement of this Agreement. Lender may hire or pay someone else to help
enforce this Agreement, and Grantor shall pay the costs and expenses of such enforcement. Costs and expenses Include Lender's attorneys'
4821 - 6245 - 6582.2
COMMERCIAL SECURITY AGREEMENT
Loan No: (Continued) Page 6
fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings (including
efforts to modify or vacate any automatic stay or Injunction), appeals, and any anticipated post - judgment collection services. However,
Grantor will only pay attorneys' fees of an attorney not Lender's salaried employee, to whom the matter is referred after Grantor's default.
Granter also shall pay all court costs and such additional fees as may be directed by the court.
Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the
provisions of this Agreement.
Governing Law. This Agreement will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the
laws of the State of Arizona without regard to its conflicts of law provisions. This Agreement has been accepted by Lender in the State of
Arizona.
Choice of Venue. if there is a lawsuit, Grantor agrees upon Lender's request to submit to the jurisdiction of the courts of Mohave County,
State of Arizona.
No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is given in writing
and signed by Lender, No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other
right. A waiver by Lender of a provision of this Agreement shall not prejudice or constitute a waiver of Lender's right otherwise to demand
strict compliance with that provision or any other provision of this Agreement. No prior waiver by Lender, nor any course of dealing between
Lender and Grantor, shall constitute a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions.
Whenever the consent of Lender is required under this Agreement, the granting of such consent by Lender in any instance shall not constitute
continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the
sole discretion of Lender.
Notices. Any notice required to be given under this Agreement shall be given In writing, and shall be effective when actually delivered, when
actually received by facsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed,
when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the
beginning of this Agreement. Any party may change its address for notices under this Agreement by giving formal written notice to the other
parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Grantor agrees to keep Lender
informed at all times of Grantor's current address. Unless otherwise provided or required by law, if there is more than one Grantor, any notice
given by Lender to any Grantor is deemed to be notice given to all Grantors.
Power of Attorney. Grantor hereby appoints Lender as Grantor's irrevocable attorney -in -fact for the purpose of executing any documents
necessary to perfect, amend, or to continue the security interest granted in this Agreement or to demand termination of filings of other
secured parties. Lender may at any time, and without further authorization from Grantor, file a carbon, photographic or other reproduction of
any financing statement or of this Agreement for use as a financing statement. Grantor will reimburse Lender for all expenses for the
perfection and the continuation of the perfection of Lender's security interest in the Collateral.
Severability. If a court of competent jurisdiction finds any provision of this Agreement to be illegal, invalid, or unenforceable as to any
circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible, the
offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so
modified, it shall be considered deleted from this Agreement. Unless otherwise required by law, the illegality, invalidity, or unenforceability of
any provision of this Agreement shall not affect the legality, validity or enforceability of any other provision of this Agreement.
Successors and Assigns. Subject to any limitations stated in this Agreement on transfer of Grantor's interest, this Agreement shall be
binding upon and inure to the benefit of the parties, their successors and assigns: If ownership of the Collateral becomes vested in a person
other than Grantor, Lender, without notice to Grantor, may deal with Grantor's successors with reference to this Agreement and the
Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of this Agreement or liability under the
Indebtedness.
Survival of Representations and Warranties. All representations, warranties, and agreements made by Grantor in this Agreement shall
survive the execution and delivery of this Agreement, shall be continuing in nature, and shall remain in full force and effect until such time as
Grantor's Indebtedness shall be paid in full.
Time is of the Essence. Time is of the essence in the performance of this Agreement.
DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Agreement. Unless specifically stated
to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the
singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this
Agreement shall have the meanings attributed to such terms in the Uniform Commercial Code:
Agreement. The word "Agreement" means this Commercial Security Agreement, as this Commercial Security Agreement may be amended
or modified from time to time, together with all exhibits and schedules attached to this Commercial Security Agreement from time to time.
Borrower. The word "Borrower" means MOHAVE COUNTY AIRPORT AUTHORITY, INC. and includes all co- signers and co- makers signing
the Note and all their successors and assigns.
Collateral. The word "Collateral" means all of Grantor's right, title and interest in and to all the Collateral as described in the Collateral
Description section of this Agreement.
Default. The word "Default" means the Default set forth in this Agreement in the section titled "Default ". Environmental Laws. The words
"Environmental Laws" mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human
health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
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COMMERCIAL SECURITY AGREEMENT
Loan No: (Continued) Page 7
as amended, 42 U.S.C. Section 9601, et seq. ( "CERCLA "), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99 -499
"SARA "), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42
U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto.
Event of Default. The words "Event of Default" mean any of the events of default set forth in this Agreement in the default section of this
Agreement.
Grantor. The word "Grantor' means MOHAVE COUNTY AIRPORT AUTHORITY, INC..
Guaranty. The word "Guaranty" means the guaranty from guarantor, endorser, surety, or accommodation party to Lender, Including without
limitation a guaranty of all or part of the Note.
Hazardous Substances. The words "Hazardous Substances" mean materials that, because of their quantity, concentration or physical,
chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly
used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words "Hazardous Substances" are used
in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or
listed under the Environmental Laws. The term "Hazardous Substances" also includes, without limitation, petroleum and petroleum by-
products or any fraction thereof and asbestos.
Indebtedness. The word "Indebtedness" means the indebtedness evidenced by the Note or Related Documents, including all principal and
interest together with all other indebtedness and costs and expenses for which Grantor is responsible under this Agreement or under any of
the Related Documents. Specifically, without limitation, Indebtedness includes all amounts that may be indirectly secured by the Cross -
Collateralization provision of this Agreement.
Lender. The word "Lender" means NATIONAL BANK OF ARIZONA, its successors and assigns.
Note. The word "Note" means the Note executed by MOHAVE COUNTY AIRPORT AUTHORITY, INC. in the principal amount of
$2,105,749.00 dated June _, 2010, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and
substitutions for the note or credit agreement.
Property. The word "Property" means all of Grantor's right, title and interest in and to all the Property as described in the "Collateral
Description" section of this Agreement.
Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental
agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments,
agreements and documents, whether now or hereafter existing, executed in connection with the Indebtedness.
4821- 6245 - 6582.2
COMMERCIAL SECURITY AGREEMENT
Loan No: (Continued) Page 8
GRANTOR HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS COMMERCIAL PLEDGE AGREEMENT AND AGREES TO ITS
TERMS. THIS AGREEMENT IS DATED June _, 2010.
GRANTOR:
MOHAVE COUNTY AIRPORT AUTHORITY, INC.
By.
John Hastings, President
MOHAVE COUNTY AIRPORT AUTHORITY, INC.
LENDER:
NATIONAL BANK OF ARIZONA
By:
Authorized Signer
4821- 6245 - 6582.2
RECORDATION REQUESTED BY:
NATIONAL BANK OF ARIZONA
4676 Hwy. 95, Suite 101
Fort Mohave, AZ 86426
Carri Ferris
WHEN RECORDED MAIL TO
NATIONAL BANK OF ARIZONA
4676 Hwy. 95, Suite 101
Fort Mohave, AZ 86426
Card Ferris
SEND TAX NOTICES TO:
Mohave County Airport Authority, Inc.
2550 Laughlin View Drive #117
Bullhead City, AZ 86429
FOR RECORDER'S USE ONLY
ASSIGNMENT OF RENTS
THIS ASSIGNMENT OF RENTS dated June _, 2010, is made and executed between Mohave County Airport Authority, Inc. (referred to below
as "Grantor ") and NATIONAL BANK OF ARIZONA whose address is 4676 Hwy. 95, Suite 101, Fort Mohave, Arizona 86426 (referred to below
as "Lender ").
ASSIGNMENT. For valuable consideration, Grantor hereby assigns, grants a continuing security interest in, and conveys to Lender all of
Grantor's right, title, and interest in and to the Rents from the following described Property located in Mohave County, State of Arizona:
See Exhibits "A" AND "B ", which is attached to this Assignment and made a part of this Assignment as if fully set forth herein.
The Property or its address is commonly known as Laughlin /Bullhead International Airport and Airport Center, Bullhead City, AZ 86429.
FUTURE ADVANCES. In addition to the Note, this Assignment secures all future advances made by Lender to Grantor whether or not the advances
are made pursuant to a commitment. Specifically, without limitation, this Assignment secures, in addition to the amounts specified in the Note, all
future amounts Lender in its discretion may loan to Grantor, together with all interest thereon.
THIS ASSIGNMENT IS GIVEN TO SECURE (1) PAYMENT OF THE INDEBTEDNESS AND (2) PERFORMANCE OF ANY AND ALL OBLIGATIONS
OF GRANTOR UNDER THE NOTE, THIS ASSIGNMENT, AND THE RELATED DOCUMENTS. THIS ASSIGNMENT IS GIVEN AND ACCEPTED
ON THE FOLLOWING TERMS:
PAYMENT AND PERFORMANCE. Except as otherwise provided in this Assignment or any Related Documents, Grantor shall pay to Lender all
amounts secured by this Assignment as they become due, and shall strictly perform all of Grantor's obligations under this Assignment. Unless and
until Lender exercises its right to collect the Rents as provided below and so long as there is no default under this Assignment, Grantor may remain in
possession and control of and operate and manage the Property and collect the Rents, provided that the granting of the right to collect the Rents shall
not constitute Lender's consent to the use of cash collateral in a bankruptcy proceeding.
GRANTOR'S REPRESENTATIONS AND WARRANTIES. Grantor warrants that:
Ownership. Grantor is entitled to receive the Rents free and clear of all rights, loans, liens, encumbrances, and claims except as disclosed to and
accepted by Lender in writing.
Right to Assign. Grantor has the full right, power and authority to enter into this Assignment and to assign and convey the Rents to Lender.
No Prior Assignment. Grantor has not previously assigned or conveyed the Rents to any other person by any instrument now in force.
No Further Transfer. Grantor will not sell, assign, encumber, or otherwise dispose of any of Grantor's rights in the Rents except as provided in this
Assignment.
LENDER'S RIGHT TO RECEIVE AND COLLECT RENTS. Lender shall have the right at any time, and even though no default shall have occurred
under this Assignment, to collect and receive the Rents. For this purpose, Lender is hereby given and granted the following rights, powers and
authority:
Notice to Tenants. Lender may send notices to any and all tenants of the Property advising them of this Assignment and directing all Rents to be
paid directly to Lender or Lender's agent.
Enter the Property. Lender may enter upon and take possession of the Property, demand, collect and receive from the tenants or from any other
persons liable therefore, all of the Rents; institute and carry on all legal proceedings necessary for the protection of the Property, including such
proceedings as may be necessary to recover possession of the Property; collect the Rents and remove any tenant or tenants or other persons from
the Property.
Maintain the Property. Lender may enter upon the Property to maintain the Property and keep the same in repair, to pay the costs thereof and of
all services of all employees, including their equipment, and of all continuing costs and expenses of maintaining the Property in proper repair and
condition, and also to pay all taxes, assessments and water utilities, and the premiums on fire and other insurance effected by Lender on the
Property.
Compliance with Laws. Lender may do any and all things to execute and comply with the laws of the State of Arizona and also all other laws,
rules, orders, ordinances and requirements of all other governmental agencies affecting the Property.
Lease the Property. Lender may rent or lease the whole or any part of the Property for such term or terms and on such conditions as Lender may
deem appropriate.
Employ Agents. Lender may engage such agent or agents as Lender may deem appropriate, either in Lender's name or in Grantor's name, to rent
and manage the Property, including the collection and application of Rents.
Other Acts. Lender may do all such other things and acts with respect to the Property as Lender may deem appropriate and may act exclusively
and solely in the place and stead of Grantor and to have all of the powers of Grantor for the purposes stated above.
No Requirement to Act. Lender shall not be required to do any of the foregoing acts or things, and the fact that Lender shall have performed one
or more of the foregoing acts or things shall not require Lender to do any other specific act or thing.
APPLICATION OF RENTS. All costs and expenses incurred by Lender in connection with the Property shall be for Grantor's account and Lender may
pay such costs and expenses from the Rents. Lender, in its sole discretion, shall determine the application of any and all Rents received by it;
however, any such Rents received by Lender which are not applied to such costs and expenses shall be applied to the Indebtedness. All expenditures
made by Lender under this Assignment and not reimbursed from the Rents shall become a part of the Indebtedness secured by this Assignment, and
shall be payable on demand, with interest at the Note rate from date of expenditure until paid.
FULL PERFORMANCE. If Grantor pays all of the Indebtedness when due and otherwise performs all the obligations imposed upon Grantor under this
Assignment, the Note, and the Related Documents, Lender shall execute and deliver to Grantor a suitable satisfaction of this Assignment and suitable
statements of termination of any financing statement on file evidencing Lender's security interest in the Rents and the Property. Any termination fee
required by law shall be paid by Grantor, if permitted by applicable law.
LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the Property or if Grantor fails
to comply with any provision of this Assignment or any Related Documents, including but not limited to Grantor's failure to discharge or pay when due
ARd1.1711-I'11R 7
ASSIGNMENT OF RENTS
Loan No: (Continued) Page 2
any amounts Grantor is required to discharge or pay under this Assignment or any Related Documents, Lender on Grantor's behalf may (but shall not
be obligated to) take any action that Lender deems appropriate, to the extent permitted by applicable law, including but not limited to discharging or
paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on the Rents or the Property and paying all
costs for insuring, maintaining and preserving the Property. All such expenditures incurred or paid by Lender for such purposes will then bear interest
at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Grantor. All such expenses will become a part
of the Indebtedness and, at Lender's option, will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be
payable with any installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of the
Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturity. The Assignment also will secure payment of these
amounts. Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon Default and shall be exercisable by
Lender to the extent permitted by applicable law.
DEFAULT. Each of the following, at Lender's option, shall constitute an Event of Default under this Assignment:
Payment Default. Grantor fails to make any payment when due under the Indebtedness.
Other Defaults. Grantor fails to comply with or to perform any other term, obligation, covenant or condition contained in this Assignment or in any
of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between
Lender and Grantor.
Default on Other Payments. Failure of Grantor within the time required by this Assignment to make any payment for taxes or insurance, or any
other payment necessary to prevent filing of or to effect discharge of any lien.
False Statements. Any warranty, representation or statement made or furnished to Lender by Grantor or on Grantor's behalf under this
Assignment or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false
or misleading at any time thereafter.
Defective Collateralization. This Assignment or any of the Related Documents ceases to be in full force and effect (including failure of any
collateral document to create a valid and perfected security interest or lien) at any time and for any reason.
Insolvency. The dissolution or termination of Grantor's existence as a going business, the insolvency of Grantor, the appointment of a receiver for
any part of Grantor's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding
under any bankruptcy or insolvency laws by or against Grantor.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self -help,
repossession or any other method, by any creditor of Grantor or by any governmental agency against the Rents or any property securing the
Indebtedness. This includes a garnishment of any of Grantor's accounts, including deposit accounts, with Lender. However, this Event of Default
shall not apply if there is a good faith dispute by Grantor as to the validity or reasonableness of the claim which is the basis of the creditor or
forfeiture proceeding and if Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety
bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for
the dispute.
Property Damage or Loss. The Property is lost, stolen, substantially damaged, sold, or borrowed against.
Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor, endorser, surety, or accommodation party of any
of the Indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity
of, or liability under, any Guaranty of the Indebtedness. In the event of a death, Lender, at its option, may, but shall not be required to, permit the
guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender, and, in doing so, cure
any Event of Default.
Adverse Change. A material adverse change occurs in Grantor's financial condition, or Lender believes the prospect of payment or performance of
the Indebtedness is impaired.
Insecurity. Lender in good faith believes itself insecure.
Cure Provisions. If any default, other than a default in payment is curable and if Grantor has not been given a notice of a breach of the same
provision of this Assignment within the preceding twelve (12) months, it may be cured if Grantor, after receiving written notice from Lender
demanding cure of such default: (1) cures the default within fifteen (15) days; or (2) if the cure requires more than fifteen (15) days, immediately
initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all
reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical.
DISPUTE RESOLUTION. This section contains a jury waiver, arbitration clause, and a class action waiver. READ THIS SECTION
CAREFULLY.
This dispute resolution provision shall supersede and replace any prior "Jury Waiver," "Judicial Reference," "Class Action Waiver," "Arbitration,"
"Dispute Resolution," or similar alternative dispute agreement or provision between or among the parties.
Jury Trial Waiver; CLASS ACTION WAIVER. As permitted by applicable law, each party waives their respective rights to a trial before a iury in
connection with any Dispute (as "Dispute" is hereinafter defined), and Disputes shall be resolved by a judge sitting without a jury If a court determines
that this provision is not enforceable for any reason and at any time prior to trial of the Dispute, but not later than 30 days after entry of the order
determining this provision is unenforceable, any party shall be entitled to move the court for an order compelling arbitration and staying or dismissing
such litigation pending arbitration ( "Arbitration Order'). If permitted by applicable law, each party also waives the right to litigate in court or an
arbitration proceeding any Dispute as a class action, either as a member of a class or as a representative, or to act as a private attorney general
Arbitration. If a claim, dispute, or controversy arises between us with respect to this Agreement, related agreements, or any other agreement or
business relationship between any of us whether or not related to the subject matter of this Agreement (all of the foregoing, a "Dispute'), and only if a
jury trial waiver is not permitted by applicable law or ruling by a court, any of us may require that the Dispute be resolved by binding arbitration before
a single arbitrator at the request of any party. By agreeing to arbitrate a Dispute each party gives up any right that party may have to a iury trial as
well as other rights that party would have in court that are not available or are more limited in arbitration such as the rights to discovery and to appeal
Arbitration shall be commenced by filing a petition with, and in accordance with the applicable arbitration rules of, JAMS or National Arbitration Forum
( "Administrator") as selected by the initiating party. If the parties agree, arbitration may be commenced by appointment of a licensed attorney who is
selected by the parties and who agrees to conduct the arbitration without an Administrator.
Disputes include matters (i) relating to a deposit account, application for or denial of credit, enforcement of any of the obligations we have to each
other, compliance with applicable laws and /or regulations, performance or services provided under any agreement by any party, (ii) based on or
arising from an alleged tort, or (iii) involving either of our employees, agents, affiliates, or assigns of a party. However, Disputes do not include the
validity, enforceability, meaning, or scope of this arbitration provision and such matters may be determined only by a court. If a third party is a party to
a Dispute we each will consent to including the third party in the arbitration proceeding for resolving the Dispute with the third party Venue for the
arbitration proceeding shall be at a location determined by mutual agreement of the parties or, if no agreement, in the city and state where lender or
bank is headquartered.
After entry of an Arbitration Order, the non - moving party shall commence arbitration. The moving party shall, at its discretion, also be entitled to
commence arbitration but is under no obligation to do so, and the moving party shall not in any way be adversely prejudiced by electing not to
commence arbitration. The arbitrator: (i) will hear and rule on appropriate dispositive motions for judgment on the pleadings, for failure to state a
claim, or for full or partial summary judgment; (ii) will render a decision and any award applying applicable law; (iii) will give effect to any limitations
period in determining any Dispute or defense; (iv) shall enforce the doctrines of compulsory counterclaim, res judicata, and collateral estoppel, if
applicable; (v) with regard to motions and the arbitration hearing, shall apply rules of evidence governing civil cases; and (vi) will apply the law of the
state specified in the agreement giving rise to the Dispute. Filing of a petition for arbitration shall not prevent any party from (i) seeking and obtaining
ARQ1- 1717_'i'31R 9
ASSIGNMENT OF RENTS
Loan No: (Continued) Page 3
from a court of competent jurisdiction (notwithstanding ongoing arbitration) provisional or ancillary remedies including but not limited to injunctive relief,
property preservation orders, foreclosure, eviction, attachment, replevin, garnishment, and /or the appointment of a receiver, (it) pursuing non - judicial
foreclosure, or (iii) availing itself of any self -help remedies such as setoff and repossession. The exercise of such rights shall not constitute a waiver of
the right to submit any Dispute to arbitration.
Judgment upon an arbitration award may be entered in any court having jurisdiction except that, if the arbitration award exceeds $4,000,000, any party
shall be entitled to a de novo appeal of the award before a panel of three arbitrators. To allow for such appeal, if the award (including Administrator,
arbitrator, and attorney's fees and costs) exceeds $4,000,000, the arbitrator will issue a written, reasoned decision supporting the award, including a
statement of authority and its application to the Dispute. A request for de novo appeal must be filed with the arbitrator within 30 days following the
date of the arbitration award; if such a request is not made within that time period, the arbitration decision shall become final and binding. On appeal,
the arbitrators shall review the award de novo, meaning that they shall reach their own findings of fact and conclusions of law rather than deferring in
any manner to the original arbitrator. Appeal of an arbitration award shall be pursuant to the rules of the Administrator or, if the Administrator has no
such rules, then the JAMS arbitration appellate rules shall apply.
Arbitration under this provision concerns a transaction involving interstate commerce and shall be governed by the Federal Arbitration Act, 9 U.S.C. §
1 et seq. This arbitration provision shall survive any termination, amendment, or expiration of this Agreement. If the terms of this provision vary from
the Administrator's rules, this arbitration provision shall control.
Reliance. Each party (i) certifies that no one has represented to such party that the other party would not seek to enforce jury and class action
waivers in the event of suit, and (ii) acknowledges that it and the other party have been induced to enter into this Agreement by, among other things,
the mutual waivers, agreements, and certifications in this section.
RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of any Event of Default and at any time thereafter, Lender may exercise any one or
more of the following rights and remedies, in addition to any other rights or remedies provided by law:
Accelerate Indebtedness. Lender shall have the right at its option without notice to Grantor to declare the entire Indebtedness immediately due
and payable, including any prepayment penalty which Grantor would be required to pay.
Collect Rents. Lender shall have the right, without notice to Grantor, to take possession of the Property and collect the Rents, including amounts
past due and unpaid, and apply the net proceeds, over and above Lender's costs, against the Indebtedness. In furtherance of this right, Lender
shall have all the rights provided for in the Lender's Right to Receive and Collect Rents Section, above. If the Rents are collected by Lender, then
Grantor irrevocably designates Lender as Grantor's attorney -in -fact to endorse instruments received in payment thereof in the name of Grantor and
to negotiate the same and collect the proceeds. Payments by tenants or other users to Lender in response to Lender's demand shall satisfy the
obligations for which the payments are made, whether or not any proper grounds for the demand existed. Lender may exercise its rights under this
subparagraph either in person, by agent, or through a receiver.
Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Property, with the power to
protect and preserve the Property, to operate the Property preceding foreclosure or sale, and to collect the Rents from the Property and apply the
proceeds, over and above the cost of the receivership, against the Indebtedness. The receiver may serve without bond if permitted by law.
Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the Indebtedness by a
substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver.
Other Remedies. Lender shall have all other rights and remedies provided in this Assignment or the Note or by law.
Election of Remedies. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make
expenditures or to take action to perform an obligation of Grantor under this Assignment, after Grantor's failure to perform, shall not affect Lender's
right to declare a default and exercise its remedies.
Attorneys' Fees; Expenses. If Lender institutes any suit or action to enforce any of the terms of this Assignment, Lender shall be entitled to
recover such sum as the court may adjudge reasonable as attorneys' fees at trial and upon any appeal. Whether or not any court action is involved,
and to the extent not prohibited by law, all reasonable expenses Lender incurs that in Lender's opinion are necessary at any time for the protection
of its interest or the enforcement of its rights shall become a part of the Indebtedness payable on demand and shall bear interest at the Note rate
from the date of the expenditure until repaid. Expenses covered by this paragraph include, without limitation, however subject to any limits under
applicable law, Lender's attorneys' fees and Lenders legal expenses, whether or not there is a lawsuit, including attorneys' fees and expenses for
bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post - judgment
collection services, the cost of searching records, obtaining title reports (including foreclosure reports), surveyors' reports, and appraisal fees, title
insurance, and fees for the Trustee, to the extent permitted by applicable law. However, Grantor will only pay attorneys' fees of an attorney not
Lender's salaried employee, to whom the matter is referred after Grantor's default. Grantor also will pay any court costs, in addition to all other
sums provided by law.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Assignment:
Amendments. This Assignment, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the
matters set forth in this Assignment. No alteration of or amendment to this Assignment shall be effective unless given in writing and signed by the
party or parties sought to be charged or bound by the alteration or amendment.
Caption Headings. Caption headings in this Assignment are for convenience purposes only and are not to be used to interpret or define the
provisions of this Assignment.
Governing Law. This Assignment will be governed by federal law applicable to Lender and, to the extent not preempted by federal law,
the laws of the State of Arizona without regard to its conflicts of law provisions. This Assignment has been accepted by Lender in the
State of Arizona.
Merger. There shall be no merger of the interest or estate created by this assignment with any other interest or estate in the Property at any time
held by or for the benefit of Lender in any capacity, without the written consent of Lender.
Interpretation. (1) In all cases where there is more than one Borrower or Grantor, then all words used in this Assignment in the singular shall be
deemed to have been used in the plural where the context and construction so require. (2) If more than one person signs this Assignment as
"Grantor," the obligations of each Grantor are joint and several. This means that if Lender brings a lawsuit, Lender may sue any one or more of the
Grantors. If Borrower and Grantor are not the same person, Lender need not sue Borrower first, and that Borrower need not be joined in any
lawsuit. (3) The names given to paragraphs or sections in this Assignment are for convenience purposes only. They are not to be used to interpret
or define the provisions of this Assignment.
No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Assignment unless such waiver is given in writing and
signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A
waiver by Lender of a provision of this Assignment shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance
with that provision or any other provision of this Assignment. No prior waiver by Lender, nor any course of dealing between Lender and Grantor,
shall constitute a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions. Whenever the consent of Lender is
required under this Assignment, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent
instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender.
Notices. Any notice required to be given under this Assignment shall be given in writing, and shall be effective when actually delivered, when
actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed,
when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the
beginning of this Assignment. Any party may change its address for notices under this Assignment by giving formal written notice to the other
parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Grantor agrees to keep Lender informed at
all times of Grantor's current address. Unless otherwise provided or required by law, if there is more than one Grantor, any notice given by Lender
to any Grantor is deemed to be notice given to all Grantors.
AR41_1717_'i';1R 7
ASSIGNMENT OF RENTS
Loan No: (Continued) Page 4
Powers of Attorney. The various agencies and powers of attorney conveyed on Lender under this Assignment are granted for purposes of
security and may not be revoked by Grantor until such time as the same are renounced by Lender.
Severability. If a court of competent jurisdiction finds any provision of this Assignment to be illegal, invalid, or unenforceable as to any
circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible, the
offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so modified, it
shall be considered deleted from this Assignment. Unless otherwise required by law, the illegality, invalidity, or unenforceability of any provision of
this Assignment shall not affect the legality, validity or enforceability of any other provision of this Assignment.
Successors and Assigns. Subject to any limitations stated in this Assignment on transfer of Grantor's interest, this Assignment shall be binding
upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Property becomes vested in a person other than
Grantor, Lender, without notice to Grantor, may deal with Grantor's successors with reference to this Assignment and the Indebtedness by way of
forbearance or extension without releasing Grantor from the obligations of this Assignment or liability under the Indebtedness.
Time is of the Essence. Time is of the essence in the performance of this Assignment.
WAIVER OF HOMESTEAD EXEMPTION. Grantor hereby releases and waives all rights and benefits of the homestead exemption laws of the State of
Arizona as to all Indebtedness secured by this Assignment.
WAIVER OF RIGHT OF REDEMPTION. NOTWITHSTANDING ANY OF THE PROVISIONS TO THE CONTRARY CONTAINED IN THIS
ASSIGNMENT, GRANTOR HEREBY WAIVES ANY AND ALL RIGHTS OF REDEMPTION FROM SALE UNDER ANY ORDER OR JUDGMENT OF
FORECLOSURE ON GRANTOR'S BEHALF AND ON BEHALF OF EACH AND EVERY PERSON, EXCEPT JUDGMENT CREDITORS OF
GRANTOR, ACQUIRING ANY INTEREST IN OR TITLE TO THE PROPERTY SUBSEQUENT TO THE DATE OF THIS ASSIGNMENT.
DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Assignment. Unless specifically stated
to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the
singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this
Assignment shall have the meanings attributed to such terms in the Uniform Commercial Code:
Assignment. The word "Assignment" means this ASSIGNMENT OF RENTS, as this ASSIGNMENT OF RENTS may be amended or modified from
time to time, together with all exhibits and schedules attached to this ASSIGNMENT OF RENTS from time to time.
Borrower. The word "Borrower' means MOHAVE COUNTY AIRPORT AUTHORITY, INC..
Default. The word "Default" means the Default set forth in this Assignment in the section titled "Default ".
Event of Default. The words "Event of Default" mean any of the events of default set forth in this Assignment in the default section of this
Assignment.
Grantor. The word "Grantor" means MOHAVE COUNTY AIRPORT AUTHORITY, INC..
Guaranty. The word "Guaranty" means the guaranty from guarantor, endorser, surety, or accommodation party to Lender, including without
limitation a guaranty of all or part of the Note.
Indebtedness. The word "Indebtedness" means all principal, interest, and other amounts, costs and expenses payable under the Note or Related
Documents, together with all renewals of, extensions of, modifications of, consolidations of and substitutions for the Note or Related Documents and
any amounts expended or advanced by Lender to discharge Grantor's obligations or expenses incurred by Lender to enforce Grantor's obligations
under this Assignment, together with interest on such amounts as provided in this Assignment. Specifically, without limitation, Indebtedness
includes the future advances set forth in the Future Advances provision of this Assignment, together with all interest thereon.
Lender. The word "Lender" means NATIONAL BANK OF ARIZONA, its successors and assigns.
Note. The word "Note" means the promissory note dated June_, 2010, in the original principal amount of $2,105,749.00 from Grantor to Lender,
together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the promissory note or
agreement.
Property. The word "Property" means all of Grantor's right, title and interest in and to all the Property as described in the "Assignment" section of
this Assignment.
Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental
agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments,
agreements and documents, whether now or hereafter existing, executed in connection with the Indebtedness.
Rents. The word "Rents" means all of Grantor's present and future rights, title and interest in, to and under any and all present and future leases,
including, without limitation, all rents, revenue, income, issues, royalties, bonuses, accounts receivable, cash or security deposits, advance rentals,
profits and proceeds from the Property, and other payments and benefits derived or to be derived from such leases of every kind and nature,
whether due now or later, including without limitation Grantor's right to enforce such leases and to receive and collect payment and proceeds
thereunder.
THE UNDERSIGNED ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS ASSIGNMENT, AND NOT PERSONALLY BUT AS AN
AUTHORIZED SIGNER, HAS CAUSED THIS ASSIGNMENT TO BE SIGNED AND EXECUTED ON BEHALF OF GRANTOR ON JUNE _, 2010.
GRANTOR:
MOHAVE COUNTY AIRPORT AUTHORITY, INC.
By:
Name:
Title:
dRdt_1711 -111R 7
PROMISSORY NOTE 5
Principal Loan Date Maturity I Loan No Call / Coll Account Officer Initials
$2,899,251.00 June 2010 1 June , 2030
References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item.
Any item above containing " *" has been omitted due to text length limitations.
Borrower: MOHAVE COUNTY AIRPORT AUTHORITY, INC. Lender: NATIONAL BANK OF ARIZONA
(TIN: 86- 0383435) 4676 Hwy. 95, Suite 101
2550 Laughlin View Drive, Suite 117 Fort Mohave, AZ 86426
Bullhead City, Arizona 86429 (928) 763 -5618
Principal Amount: $2,899,251.00 Initial Rate: 5.25% Date of Note: June 2010
PROMISE TO PAY. Mohave County Airport Authority, Inc. ( "Borrower ") promises to pay to NATIONAL BANK OF ARIZONA ( "Lender "), or
order, in lawful money of the United States of America, the principal amount of TWO MILLION EIGHT HUNDRED NINETY -NINE THOUSAND
TWO HUNDRED FIFTY -ONE AND NO /100 DOLLARS ($2,899,251.00) or so much as may be outstanding, together with interest on the
outstanding principal balance, until paid in full. Interest shall be calculated from the date of each advance until repayment of each advance,
as set forth below. The annual interest rate for this Note is computed on a 365/360 basis; that is, by applying the ratio of the annual interest
rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is
outstanding
PAYMENT. Borrower will pay this loan in one payment of all outstanding principal plus all accrued unpaid interest on June _, 2030. In
addition, Borrower will pay regular monthly installment payments of principal and accrued unpaid interest, in an amount determined by
Lender based on an amortization term of 20 years, beginning July _, 2010 with all subsequent principal and interest payments to be due
on the same day of each month after that. The initial interest rate applicable to this Note shall be five and one - quarter (5.25°/) percent per
annum. On June _, 2020, the interest rate applicable to this Note shall be adjusted and reset to the then 5 year LIBOR plus 2.00% (with a
floor rate of five and one - quarter (5.25 %) percent per annum) as determined by Lender. On June _, 2025, the interest rate applicable to
this Note shall be adjusted and reset to the then 5 year LIBOR plus 2.00% (with a floor rate of five and one -quarter (5.25 %) percent per
annum) as determined by Lender. At each adjustment of the interest rate Lender shall recalculate the regular monthly installment payments
of principal and accrued unpaid interest to an amount determined by Lender to be sufficient to fully amortize the Loan over the remaining
term of the Loan.
EFFECTIVE RATE. Borrower agrees to an effective rate of interest that is the rate specified in this Note plus any additional rate resulting from any
other charges in the nature of interest paid or to be paid in connection with this Note.
PREPAYMENT PENALTY. Borrower agrees that all loan fees and other prepaid finance charges are earned fully as of the date of the loan and will not
be subject to refund upon early payment (whether voluntary or as a result of default), except as otherwise required by law. Early payments will not,
unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather,
early payments will reduce the principal balance due and may result in Borrower's making fewer payments. Borrower agrees not to send Lender
payments marked "paid in full ", "without recourse ", or similar language. If Borrower sends such a payment, Lender may accept it without losing any of
Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning
disputed amounts, including any check or other payment instrument that indicates that the payment constitutes "payment in full" of the amount owed or
that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: NATIONAL BANK OF
ARIZONA, Hwy 95, Suite 101, Fort Mohave, Arizona 86426.
LATE CHARGE If a payment is 10 days or more late, Borrower will be charged 10% of the unpaid portion of the regularly scheduled payment.
INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity, the interest rate on this Note shall be increased to 18% per
annum. However, in no event will the interest rate exceed the maximum interest rate limitations under applicable law.
DEFAULT. Each of the following shall constitute an event of default ( "Event of Default ") under this Note:
Payment Default. Borrower fails to make any payment when due under this Note.
Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Note or in any of
the related documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between
Lender and Borrower.
False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Note
or the related documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading
at any time thereafter.
Insolvency. The dissolution or termination of Borrower's existence as a going business, the insolvency of Borrower, the appointment of a receiver
for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against Borrower.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self -help,
repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This
includes a garnishment of any of Borrower's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if
there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding
and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the
creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute.
Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor, endorser, surety, or accommodation party of any
of the indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity
of, or liability under, any guaranty of the indebtedness evidenced by this Note. In the event of a death, Lender, at its option, may, but shall not be
required to, permit the guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender,
and, in doing so, cure any Event of Default.
Change In Ownership. Any change in ownership of twenty -five percent (25 %) or more of the common stock of Borrower.
Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or
performance of this Note is impaired.
Insecurity. Lender in good faith believes itself insecure.
Cure Provisions. If any default, other than a default in payment is curable and if Borrower has not been given a notice of a breach of the same
provision of this Note within the preceding twelve (12) months, it may be cured if Borrower, after receiving written notice from Lender demanding
cure of such default: (1) cures the default within fifteen (15) days; or (2) if the cure requires more than fifteen (15) days, immediately initiates steps
which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and
necessary steps sufficient to produce compliance as soon as reasonably practical.
LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this Note and all accrued unpaid interest
immediately due, and then Borrower will pay that amount.
DISPUTE RESOLUTION. This section contains a jury waiver, arbitration clause, and a class action waiver. READ THIS SECTION
CAREFULLY.
4831- 0279- 0149.3
PROMISSORY NOTE
Loan No: (Continued) Page 2
This dispute resolution provision shall supersede and replace any prior "Jury Waiver," "Judicial Reference," "Class Action Waiver," "Arbitration,"
"Dispute Resolution," or similar alternative dispute agreement or provision between or among the parties.
Jury Trial Waiver; CLASS ACTION WAIVER. As permitted by applicable law, each ararty waives their respective rights to a trial before a iury in
connection with any Dispute (as "Dispute" is hereinafter defined), and Disputes shall be resolved by a fudge sitting without a iury If a court determines that
this provision is not enforceable for any reason and at any time prior to trial of the Dispute, but not later than 30 days after entry of the order determining
this provision is unenforceable, any party shall be entitled to move the court for an order compelling arbitration and staying or dismissing such litigation
pending arbitration ( "Arbitration Order"). If permitted by applicable law, each party also waives the right to litigate in court or an arbitration proceeding any
Dispute as a class action either as a member of a class or as a representative, or to act as a private attorney general
Arbitration. If a claim, dispute, or controversy arises between us with respect to this Agreement, related agreements, or any other agreement or business
relationship between any of us whether or not related to the subject matter of this Agreement (all of the foregoing, a "Dispute "), and o nly if a jury trial waiver
is not permitted by applicable law or ruling by a court, any of us may require that the Dispute be resolved by binding arbitration before a single arbitrator at
the request of any party. By agreeing to arbitrate a Dispute each party gives up any right that party may have to a iury trial as well as other rights that
party would have in court that are not available or are more limited in arbitration such as the rights to discovery and to appeal
Arbitration shall be commenced by filing a petition with, and in accordance with the applicable arbitration rules of, JAMS or National Arbitration Forum
( "Administrator') as selected by the initiating party. If the parties agree, arbitration may be commenced by appointment of a licensed attorney who is
selected by the parties and who agrees to conduct the arbitration without an Administrator.
Disputes include matters (i) relating to a deposit account, application for or denial of credit, enforcement of any of the obligations we have to each other,
compliance with applicable laws and /or regulations, performance or services provided under any agreement by any party, (ii) based on or arising from an
alleged tort, or (iii) involving either of our employees, agents, affiliates, or assigns of a party. However, Disputes do not include the validity, enforceability,
meaning, or scope of this arbitration provision and such matters may be determined only by a court. If a third party is a party to a Dispute, we each will
consent to including the third party in the arbitration proceeding for resolving the Dispute with the third party Venue for the arbitration proceeding shall be
at a location determined by mutual agreement of the parties or, if no agreement, in the city and stale where lender or bank is headquartered.
After entry of an Arbitration Order, the non - moving party shall commence arbitration. The moving party shall, at its discretion, also be entitled to commence
arbitration but is under no obligation to do so, and the moving party shall not in any way be adversely prejudiced by electing not to commence arbitration.
The arbitrator: (i) will hear and rule on appropriate dispositive motions for judgment on the pleadings, for failure to state a claim, or for full or partial
summary judgment; (ii) will render a decision and any award applying applicable law; (iii) will give effect to any limitations period in determining any Dispute
or defense; (iv) shall enforce the doctrines of compulsory counterclaim, res judicata, and collateral estoppel, if applicable; (v) with regard to motions and the
arbitration hearing, shall apply rules of evidence governing civil cases; and (vi) will apply the law of the state specified in the agreement giving rise to the
Dispute. Filing of a petition for arbitration shall not prevent any party from (i) seeking and obtaining from a court of competent jurisdiction (notwithstanding
ongoing arbitration) provisional or ancillary remedies including but not limited to injunctive relief, property preservation orders, foreclosure, eviction,
attachment, replevin, garnishment, and /or the appointment of a receiver, (ii) pursuing non - judicial foreclosure, or (iii) availing itself of any self -help remedies
such as setoff and repossession. The exercise of such rights shall not constitute a waiver of the right to submit any Dispute to arbitration.
Judgment upon an arbitration award may be entered in any court having jurisdiction except that, if the arbitration award exceeds $4,000,000, any party shall
be entitled to a de novo appeal of the award before a panel of three arbitrators. To allow for such appeal, if the award (including Administrator, arbitrator,
and attorney's fees and costs) exceeds $4,000,000, the arbitrator will issue a written, reasoned decision supporting the award, including a statement of
authority and its application to the Dispute. A request for de novo appeal must be fled with the arbitrator within 30 days following the date of the arbitration
award; if such a request is not made within that time period, the arbitration decision shall become final and binding. On appeal, the arbitrators shall review
the award de novo, meaning that they shall reach their own findings of fact and conclusions of law rather than deferring in any manner to the original
arbitrator. Appeal of an arbitration award shall be pursuant to the rules of the Administrator or, if the Administrator has no such rules, then the JAMS
arbitration appellate rules shall apply.
Arbitration under this provision concerns a transaction involving interstate commerce and shall be governed by the Federal Arbitration Act, 9 U.S.C. § 1 et
seq. This arbitration provision shall survive any termination, amendment, or expiration of this Agreement. If the terms of this provision vary from the
Administrators rules, this arbitration provision shall control.
Reliance. Each party (i) certifies that no one has represented to such party that the other party would not seek to enforce jury and class action waivers in
the event of suit, and (ii) acknowledges that it and the other party have been induced to enter into this Agreement by, among other things, the mutual
waivers, agreements, and certifications in this section.
ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender
that amount. This includes, subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, whether or not there is a
lawsuit, including attorneys' fees, expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), and
appeals. However, Borrower will only pay attorneys' fees of an attorney not Lender's salaried employee, to whom the matter is referred after
Borrower's default. If not prohibited by applicable law, Borrower also will pay any court costs, in addition to all other sums provided by law.
GOVERNING LAW. This Note will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws
of the State of Arizona without regard to its conflicts of law provisions. This Note has been accepted by Lender in the State of Arizona.
RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower's accounts with Lender (whether
checking, savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open
in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower
authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the indebtedness against any and all such accounts.
COLLATERAL. Borrower acknowledges this Note is secured by All of Debtor's right, title and interest, whether presently existing or hereafter arising in
the following:
(a) All of the right, title and interest of the Debtor as lessor or sublessor in and to all leases and subleases covering the certain real property located in
Mohave County, Arizona, as more particularly described as The Home Depot Subdivision Tract 5106 as recorded in Reception Number 2003 - 14836, in
the official records of Mohave County, Arizona; plus the attached Exhibit "B" also know as the Laughlin /Bullhead International Airport (the "Premises ")
or any portion thereof (collectively, the "Leases), and the buildings, fixtures and other improvements located on the Premises (the "Improvements "), or
any portion thereof now or hereafter existing or entered into.
(b) All of the right, title and interest of the Debtor in and to that certain Lease Agreement dated October 7, 1991, by Debtor and Mohave County, a
political subdivision of the State of Arizona (the "County "), and recorded in the official records of Mohave County on January 30, 1992, in Book 2002,
Page 66, as amended by the Amendment to Master Lease dated February 18, 1997, the Amendment to Master Lease dated December 1, 2003, and
the Amendment to Master Lease dated February 22, 2005 (as so amended, the "Master Lease "), together with the rights of the Debtor in and to the
Premises arising pursuant to the Master Lease, and the right, title and interest of Debtor in and to all of the improvements.
(c) All right, title and interest of Debtor now existing or hereafter arising pursuant to the Leases, including, without limitation, all rights of Debtor against
guarantors thereof, all cash or security deposits, advance rentals, and deposits or payments of similar nature.
(d) All rents, issues, profits, royalties, income and other benefits derived by Debtor from the property comprising the Premises or any portion thereof
(the "Rents ");
(e) All the claims or demands with respect to the Premises, the Leases, the Rents, and the Personal Property (collectively, the "Property "), or any
portion thereof, including, without limitation, claims or demands with respect to the proceeds of insurance in effect with respect thereto, claims under
any indemnity agreement, including, without limitation, any indemnity agreement executed for the benefit of the Property or any portion thereof, and
any and all awards make for the taking by eminent domain, or by any proceeding or purchase in lieu thereof, of the whole or any part of the Property.
This loan is cross collateralized with Loan #
INTEREST RATE ADJUSTMENT PROVISION. Interest rate will be fixed for the first 10 years and then adjusted on June _, 2020 and June
2025 to the Loan then 5 year LIBOR plus 2.00 %, in each case subject to a floor rate of 5.25% per annum.
4831- 0279 - 0149.3
PROMISSORY NOTE
Loan No: (Continued) Page 3
DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $32.00 if Borrower makes a payment on Borrower's loan and the check or
preauthorized charge with which Borrower pays is later dishonored.
SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, successors
and assigns, and shall inure to the benefit of Lender and its successors and assigns.
GENERAL PROVISIONS. If any part of this Note cannot be enforced, this fact will not affect the rest of the Note. Lender may delay or forgo enforcing
any of its rights or remedies under this Note without losing them. Borrower and any other person who signs, guarantees or endorses this Note, to the
extent allowed by law, waive presentment, demand for payment, and notice of dishonor. Upon any change in the terms of this Note, and unless
otherwise expressly stated in writing, no party who signs this Note, whether as maker, guarantor, accommodation maker or endorser, shall be released
from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor
or collateral; or impair, fail to realize upon or perfect Lender's security interest in the collateral; and take any other action deemed necessary by Lender
without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone
other than the party with whom the modification is made. The obligations under this Note are joint and several.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE. BORROWER AGREES TO
THE TERMS OF THE NOTE.
BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.
BORROWER:
MOHAVE COUNTY AIRPORT AUTHORITY, INC.
By:
Name:
Title:
4831- 0279 - 0149.3
b
BUSINESS LOAN AGREEMENT
Principal Loan Date Maturity Loan No Call / Coll Account Officer Initials
$2,899,251.00 06 -_ -2010 _ -_ -20 _
References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item.
Any item above containing " ** has been omitted due to text length limitations.
Borrower: MOHAVE COUNTY AIRPORT AUTHORITY, INC. Lender: NATIONAL BANK OF ARIZONA
(TIN: 86- 0383435) 4676 Hwy. 95, Suite 101
2550 Laughlin View Drive #117 Fort Mohave, AZ 86426
Bullhead City, AZ 86429 (928) 763 -5618
THIS BUSINESS LOAN AGREEMENT dated June _, 2010, is made and executed between MOHAVE COUNTY AIRPORT AUTHORITY, INC. ( "Borrower ")
and NATIONAL BANK OF ARIZONA ( "Lender ") on the following terms and conditions. Borrower has received prior commercial loans from Lender or has
applied to Lender for a commercial loan or loans or other financial accommodations, including those which may be described on any exhibit or schedule
attached to this Agreement. Borrower understands and agrees that: (A) in granting, renewing, or extending any Loan, Lender is relying upon Borrower's
representations, warranties, and agreements as set forth in this Agreement; (B) the granting, renewing, or extending of any Loan by Lender at all times shall be
subject to Lender's sole judgment and discretion; and (C) all such Loans shall be and remain subject to the terms and conditions of this Agreement.
TERM. This Agreement shall be effective as of June _, 2010, and shall continue in full force and effect until such time as all of Borrower's Loans in favor of
Lender have been paid in full, including principal, interest, costs, expenses, attorneys' fees, and other fees and charges, or until such time as the parties may
agree in writing to terminate this Agreement.
CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the initial Advance and each subsequent Advance under this Agreement shall
be subject to the fulfillment to Lender's satisfaction of all of the conditions set forth in this Agreement and in the Related Documents.
Loan Documents. Borrower shall provide to Lender the following documents for the Loan: (1) the Note; (2) Security Agreements granting to Lender
security interests in the Collateral; (3) Assignment of Rents; (4) financing statements and all other documents perfecting Lender's Security Interests; (5)
evidence of insurance as required below; (6) together with all such Related Documents as Lender may require for the Loan; all in form and substance
satisfactory to Lender and Lender's counsel.
Borrower's Authorization. Borrower shall have provided in form and substance satisfactory to Lender properly certified resolutions, duly authorizing the
execution and delivery of this Agreement, the Note and the Related Documents. In addition, Borrower shall have provided such other resolutions,
authorizations, documents and instruments as Lender or its counsel, may require.
Payment of Fees and Expenses. Borrower shall have paid to Lender all fees, charges, and other expenses which are then due and payable as specified
in this Agreement or any Related Document. A list of all fees chargeable by the Bank for this loan, as set forth in the Loan Proposal, is attached as Exhibit
"A" hereto.
Representations and Warranties. The representations and warranties set forth in this Agreement, in the Related Documents, and in any document or
certificate delivered to Lender under this Agreement are true and correct.
No Event of Default. There shall not exist at the time of any Advance a condition which would constitute an Event of Default under this Agreement or
under any Related Document.
REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as of the date of this Agreement, as of the date of each disbursement
of loan proceeds, as of the date of any renewal, extension or modification of any Loan, and at all times any Indebtedness exists:
Organization. Borrower is a non - profit corporation and a body corporate and politic performing an essential governmental function as an agency or
instrumentality of the County of Mohave, State of Arizona which is, and at all times shall be, duly organized, validly existing, and in good standing under
and by virtue of the laws of Borrower's state of incorporation. Borrower has the full power and authority to own its properties and to transact the business
in which it is presently engaged or presently proposes to engage. Borrower maintains an office at 2550 Laughlin View Drive #117, Bullhead City, AZ
86429. Unless Borrower has designated otherwise in writing, the principal office is the office at which Borrower keeps its books and records including its
records concerning the Collateral. Borrower will notify Lender prior to any change in the location of Borrower's state of organization or any change in
Borrower's name. Borrower shall do all things necessary to preserve and to keep in full force and effect its existence, rights and privileges, and shall
comply with all regulations, rules, ordinances, statutes, orders and decrees of any governmental or quasi - governmental authority or court applicable to
Borrower and Borrower's business activities.
Assumed Business Names. Borrower has filed or recorded all documents or filings required by law relating to all assumed business names used by
Borrower. Excluding the name of Borrower, the following is a complete list of all assumed business names under which Borrower does business:
Laughlin /Bullhead international Airport
Authorization. Borrower's execution, delivery, and performance of this Agreement and all the Related Documents have been duly authorized by all
necessary action by Borrower and do not conflict with, result in a violation of, or constitute a default under (1) any provision of (a) Borrower's articles of
incorporation or organization, or bylaws, or (b) any agreement or other instrument binding upon Borrower or (2) any law, governmental regulation, court
decree, or order applicable to Borrower or to Borrower's properties.
Financial Information. Each of Borrower's financial statements supplied to Lender truly and completely disclosed Borrower's financial condition as of the
date of the statement, and there has been no material adverse change in Borrower's financial condition subsequent to the date of the most recent financial
statement supplied to Lender. Borrower has no material contingent obligations except as disclosed in such financial statements.
Legal Effect. This Agreement constitutes, and any instrument or agreement Borrower is required to give under this Agreement when delivered will
constitute legal, valid, and binding obligations of Borrower enforceable against Borrower in accordance with their respective terms,
4847 - 6312- 1670.3
BUSINESS LOAN AGREEMENT
Loan No: (Continued) Page 2
Properties. Except as contemplated by this Agreement or as previously disclosed in Borrower's financial statements or in writing to Lender and as
accepted by Lender, and except for property tax liens for taxes not presently due and payable, Borrower or the County of Mohave owns and has good title
to all of Borrower's properties free and clear of all Security Interests, and has not executed any security documents or financing statements relating to such
properties. All of Borrower's properties are titled in Borrower's or the County of Mohave's legal name, and the Borrower has not used or filed a financing
statement under any other name for at least the last five (5) years, except where the Lender has been named the secured party.
Litigation and Claims. No litigation, claim, investigation, administrative proceeding or similar action (including those for unpaid taxes) against Borrower is
pending or threatened, and no other event has occurred which may materially adversely affect Borrower's financial condition or properties, other than
litigation, claims, or other events, if any, that have been disclosed to and acknowledged by Lender in writing.
Taxes. To the best of Borrower's knowledge, all of Borrower's tax returns and reports that are or were required to be filed, have been filed, and all taxes,
assessments and other governmental charges have been paid in full, except those presently being or to be contested by Borrower in good faith in the
ordinary course of business and for which adequate reserves have been provided.
Lien Priority. Unless otherwise previously disclosed to Lender in writing, Borrower has not entered into or granted any Security Agreements, or permitted
the filing or attachment of any Security Interests on or affecting any of the Collateral directly or indirectly securing repayment of Borrower's Loan and Note,
that would be prior or that may in any way be superior to Lender's Security Interests and rights in and to such Collateral.
Binding Effect. This Agreement, the Note, all Security Agreements (if any), and all Related Documents are binding upon the signers thereof, as well as
upon their successors, representatives and assigns, and are legally enforceable in accordance with their respective terms.
AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, so long as this Agreement remains in effect, Borrower will:
Notices of Claims and Litigation. Promptly inform Lender in writing of (1) all material adverse changes in Borrower's financial condition, and (2) all
existing and all threatened litigation, claims, investigations, administrative proceedings or similar actions affecting Borrower or any Guarantor which could
materially affect the financial condition of Borrower or the financial condition of any Guarantor.
Financial Records. Maintain its books and records in accordance with GAAP, applied on a consistent basis, and permit Lender to examine and audit
Borrower's books and records at all reasonable times.
Financial Statements. Furnish Lender with the following:
Annual Statements. One hundred twenty (120) days after the end of each fiscal year, Borrower's balance sheet and project and loss statement for
the year ended, audited by a certified public accountant satisfactory to Lender.
Interim Statements. Forty -five (45) days after the end of each Quarter -year, Borrower's balance sheet and profit and loss statement for the period
ended, prepared by Borrower. As soon as available after the end of each half -year, all rent rolls and land lease payments for the period ended,
prepared by the Borrower.
All financial reports required to be provided under this Agreement, applied on a consistent basis, and certified by Borrower as being true and correct to the
best of their knowledge.
Additional Information. Furnish such additional information and statements, as Lender may request from time to time.
Insurance. Maintain fire and other risk insurance, public liability insurance, and such other insurance as Lender may require with respect to Borrower's
properties and operations, in form, amounts, coverages and with insurance companies acceptable to Lender. Borrower, upon request of Lender, will
deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender, including stipulations that coverages will not be
cancelled or diminished without at least thirty (30) days prior written notice to Lender. Each insurance policy also shall include an endorsement providing
that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Borrower or any other person. In connection with all
policies covering assets in which Lender holds or is offered a security interest for the Loans, Borrower will provide Lender with such lender's loss payable
or other endorsements as Lender may require.
Insurance Reports. Furnish to Lender, upon request of Lender, reports on each existing insurance policy showing such information as Lender may
reasonably request, including without limitation the following: (1) the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the
properties insured; (5) the then current property values on the basis of which insurance has been obtained, and the manner of determining those values;
and (6) the expiration date of the policy.
Other Agreements. Comply with all terms and conditions of all other agreements, whether now or hereafter existing, between Borrower and any other
party and notify Lender immediately in writing of any default in connection with any other such agreements.
Loan Proceeds. Use all Loan proceeds solely for the following specific purposes: TO REFINANCE EXISTING INDEBTEDNESS RELATED TO
INFRASTRUCTURE AT THE COMMERCIAL AIRPORT CENTER LOCATED AT THE LAUGH LIN /BULLHEAD INTERNATIONAL AIRPORT in support of
Borrower's commercial business operations, unless specifically consented to the contrary by Lender in writing.
Taxes, Charges and Liens. Pay and discharge when due all of its indebtedness and obligations, including without limitation all assessments, taxes,
governmental charges, levies and liens, of every kind and nature, imposed upon Borrower or its properties, income, or profits, prior to the date on which
penalties would attach, and all lawful claims that, if unpaid, might become a lien or charge upon any of Borrower's properties, income, or profits. Provided
however, Borrower will not be required to pay and discharge any such assessment, tax, charge, levy, lien or claim so long as (1) the legality of the same
shall be contested in good faith by appropriate proceedings, and (2) Borrower shall have established on Borrower's books adequate reserves with respect
to such contested assessment, tax, charge, levy, lien, or claim in accordance with GAAP.
Performance. Perform and comply, in a timely manner, with all terms, conditions, and provisions set forth in this Agreement, in the Related Documents,
and in all other instruments and agreements between Borrower and Lender, Borrower shall notify Lender immediately in writing of any default in
connection with any agreement.
4847 - 6312 - 1670.3
BUSINESS LOAN AGREEMENT
Loan No: (Continued) Page 3
Operations. Maintain executive and management personnel with substantially the same qualifications and experience as the present executive and
management personnel; provide written notice to Lender of any change in executive and management personnel; conduct its business affairs in a
reasonable and prudent manner.
Environmental Studies. Promptly conduct and complete, at Borrower's expense, all such investigations, studies, samplings and testings as may be
requested by Lender or any governmental authority relative to any substance, or any waste or by- product of any substance defined as toxic or a
hazardous substance under applicable federal, state, or local law, rule, regulation, order or directive, at or affecting any property or any facility owned,
leased or used by Borrower.
Compliance with Governmental Requirements. Comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental
authorities applicable to the conduct of Borrower's properties, businesses and operations, and to the use or occupancy of the Collateral, including without
limitation, the Americans With Disabilities Act. Borrower may contest in good faith any such law, ordinance, or regulation and withhold compliance during
any proceeding, including appropriate appeals, so long as Borrower has notified Lender in writing prior to doing so and so long as, in Lender's sole
opinion, Lender's interests in the Collateral are not jeopardized. Lender may require Borrower to post adequate security or a surety bond, reasonably
satisfactory to Lender, to protect Lender's interest.
Inspection. Permit employees or agents of Lender at any reasonable time to inspect any and all Collateral for the Loan or Loans and Borrower's other
properties and to examine or audit Borrower's books, accounts, and records and to make copies and memoranda of Borrower's books, accounts, and
records. If Borrower now or at any time hereafter maintains any records (including without limitation computer generated records and computer software
programs for the generation of such records) in the possession of a third party, Borrower, upon request of Lender, shall notify such party to permit Lender
free access to such records at all reasonable times and to provide Lender with copies of any records it may request, all at Borrower's expense.
Compliance Certificates. Unless waived in writing by Lender, provide Lender at least annually, with a certificate executed by Borrower's chief financial
officer, or other officer or person acceptable to Lender, certifying that the representations and warranties set forth in this Agreement are true and correct as
of the date of the certificate and further certifying that, as of the date of the certificate, no Event of Default exists under this Agreement.
Environmental Compliance and Reports. Borrower shall comply in all respects with any and all Environmental Laws; not cause or permit to exist, as a
result of an intentional or unintentional action or omission on Borrower's part or on the part of any third party, on property owned and /or occupied by
Borrower, any environmental activity where damage may result to the environment, unless such environmental activity is pursuant to and in compliance
with the conditions of a permit issued by the appropriate federal, state or local governmental authorities; shall furnish to Lender promptly and in any event
within thirty (30) days after receipt thereof a copy of any notice, summons, lien, citation, directive, letter or other communication from any governmental
agency or instrumentality concerning any intentional or unintentional action or omission on Borrower's part in connection with any environmental activity
whether or not there is damage to the environment and /or other natural resources.
Additional Assurances. Make, execute and deliver to Lender such promissory notes, security agreements, assignments, financing statements,
instruments, documents and other agreements as Lender or its attorneys may reasonably request to evidence and secure the Loans and to perfect all
Security Interests.
Indebtedness and Liens. (1) Except for trade debt incurred in the normal course of business and indebtedness to Lender contemplated by this
Agreement, Borrower will not create, incur or assume indebtedness for borrowed money, including capital leases, (2) sell, transfer, mortgage, assign,
pledge, lease, grant a security interest in, or encumber any of Borrower's assets (except as allowed as Permitted Liens), or (3) sell with recourse any of
Borrower's accounts, except to Lender, without first giving five (5) business days notice in writing to Lender.
Errors and Omissions Provision. Borrower hereby agrees that it will, within ten (10) days of a request by Lender, comply with any request by Lender to
correct documentation errors, omissions or oversights, if any, that occur in any documentation relating to this loan
General.
Tax Covenant. The Borrower covenants for the benefit of the Lender that it will not take any action or omit to take any action with respect to the Loan, the
proceeds thereof, any other funds of the Borrower or any facilities refinanced with the proceeds of the Loan if such action or omission (a) would cause the
interest on the Loan to lose its exclusion from gross income for federal income tax purposes under Section 103 of the Code, (b) would cause interest on
the Loan to lose its exclusion from alternative minimum taxable income as defined in Section 55(b)(2) of the Code or (c) would cause interest on the Loan
to lose its exclusion from Arizona taxable income. In furtherance of this covenant, the Borrower agrees to comply with the procedures set forth in the Tax
Certificate. The foregoing covenant shall remain in full force and effect notwithstanding the payment in full of the Loan until the date on which all
obligations of the District in fulfilling the above covenant under the Code and Arizona law have been met.
Debt Service Coverage Ratio. Maintain a Debt Service Coverage Ratio equal to or greater than 1.30 to 1.00 based on the annual audited financial
statements of Borrower, calculated using net profit (excluding passenger facility revenues /payments received in the fiscal year less applicable project
costs /expenses incurred relating to those revenues /payments received which are not pledged to the repayment of the Loan or any other indebtedness of
Borrower) plus the total of interest, taxes, annual discretionary expense, depreciation and amortization divided by the annual contractual payments of
principal and interest on the Loan and all other debt, including capital lease obligations, of the Borrower.
Determination of Taxability. In the event of a Determination of Taxability, the following shall be applicable:
(a) Any Additions to Tax paid or incurred by the Lender shall be immediately due and payable under the Note.
(b) Interest on the Note shall accrue, retroactively to the Taxable Date, at the Taxable Rate for the most recently reported week prior to the
Taxable Date.
(c) Effective on the first day of the first month following a Determination of Taxability, additional interest shall be due and payable equal to the
interest on the Note at the Taxable Rate from the Taxable Date, less a credit for interest actually paid for the same period. On the next occurring
Payment Date and each Payment Date thereafter, until the Note is paid in full, the amount due and payable on each such Payment Date shall be
4847 - 6312 - 1670.3
BUSINESS LOAN AGREEMENT
Loan No: (Continued) Page 4
increased to an amount determined by the Lender, in its sole and absolute discretion, to reflect the interest due on the outstanding principal balance of
the Note at the Taxable Rate.
Capital Expenditures. Limit Capital Expenditures to $100,000, which capital expenditures test is restricted to financing capital expenditures (excluding
capital expenditures funded by grants received) without the Lender's approval and by using the Borrower's annual audited financial statements to calculate
measurement.
Banking Relationship. Maintain their primary banking relationship with the Lender. An initial deposit of $200,000 shall be received by the Lender within
thirty (30) days of the execution and delivery of this Agreement.
Lease Review. Provide Lender with each new Lease affecting the Borrower is properties and to obtain Lender's consent to all new leases to be entered
into by the Borrower on their properties, such consent not to be unreasonably withheld.
LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the Collateral or if Borrower fails to
comply with any provision of this Agreement or any Related Documents, including but not limited to Borrower's failure to discharge or pay when due any
amounts Borrower is required to discharge or pay under this Agreement or any Related Documents, Lender on Borrower's behalf may but shall not be obligated
to) take any action that Lender deems appropriate, to the extent permitted by applicable law, including but not limited to discharging or paying all taxes, liens,
security interests, encumbrances and other claims, at any time levied or placed on any Collateral and paying all costs for insuring, maintaining and preserving
any Collateral. All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date
incurred or paid by Lender to the date of repayment by Borrower. All such expenses will become a part of the Indebtedness and, at Lender's option, will (A) be
payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during
either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon payment which will be due and
payable at the Note's maturity.
NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this Agreement is in effect, Borrower shall not, without the prior written
consent of Lender, which consent will not be unreasonably withheld:
Continuity of Operations. (1) Engage in any business activities substantially different than those in which Borrower is presently engaged, (2) cease
operations, liquidate, merge, transfer, acquire or consolidate with any other entity, change its name, dissolve or transfer or sell Collateral out of the
ordinary course of business, or (3) pay any dividends on Borrower's stock (other than dividends payable in its stock), provided, however that
notwithstanding the foregoing, but only so long as no Event of Default has occurred and is continuing or would result from the payment of dividends, if
Borrower is a "Subchapter S Corporation" (as defined in the Internal Revenue Code of 1986, as amended), Borrower may pay cash dividends on its stock
to its shareholders from time to time in amounts necessary to enable the shareholders to pay income taxes and make estimated income tax payments to
satisfy their liabilities under federal and state law which arise solely from their status as Shareholders of a Subchapter S Corporation because of their
ownership of shares of Borrower's stock, or purchase or retire any of Borrower's outstanding shares or alter or amend Borrower's capital structure.
Loans. Acquisitions and Guaranties. (1) Loan, invest in or advance money or assets to any other person, enterprise or entity, (2) purchase, create or
acquire any interest in any other enterprise or entity, or (3) incur any obligation as surety or guarantor other than in the ordinary course of business.
Agreements. Borrower will not enter into any agreement containing any provisions which would be violated or breached by the performance of
Borrower's obligations under this Agreement or in connection herewith.
CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to Borrower, whether under this Agreement or under any other
agreement, Lender shall have no obligation to make Loan Advances or to disburse Loan proceeds if: (A) Borrower or any Guarantor is in default under the terms
of, this Agreement or any of the Related Documents or any other agreement that Borrower or any Guarantor has with Lender; (B) Borrower or any Guarantor
dies, becomes incompetent or becomes insolvent, files a petition in bankruptcy or similar proceedings, or is adjudged a bankrupt; (C) there occurs a material
adverse change in Borrower's financial condition, in the financial condition of any Guarantor, or in the value of any Collateral securing any Loan; or (D) any
Guarantor seeks, claims or otherwise attempts to limit, modify or revoke such Guarantor's guaranty of the Loan or any other loan with Lender; or (E) Lender in
good faith deems itself insecure, even though no Event of Default shall have occurred.
RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower's accounts with Lender (whether checking,
savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future.
However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes Lender, to
the extent permitted by applicable law, to charge or setoff all sums owing on the Indebtedness against any and all such accounts, and, at Lender's option, to
administratively freeze all such accounts to allow Lender to protect Lender's charge and setoff rights provided in this paragraph.
DEFAULT. Any determination, decision, or decree is made by the Commissioner or any District Director of the Internal Revenue Service, or by any court of
competent jurisdiction, that the interest payable on the Loan is includable in the gross income for federal income tax purposes of the Lender by virtue of the
occurrence of any event, including any change in the Constitution or laws of the United States of America or the State of Arizona, which results in interest
payable on the Loan becoming includable in the gross income of the Lender pursuant to Section 103(b) of the Code and the rules and regulations promulgated
thereunder, if and so long as such determination, decision or decree is not being appealed or otherwise contested in good faith by the Borrower. Each of the
following shall constitute an Event of Default under this Agreement:
Payment Default. Borrower fails to make any payment when due under the Loan.
Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Agreement or in any of the
Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and
Borrower.
Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension of credit, security agreement, purchase or sales
agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower's or any Grantor's property or
Borrower's or any Grantor's ability to repay the Loans or perform their respective obligations under this Agreement or any of the Related Documents.
4847- 6312 - 1670.3
BUSINESS LOAN AGREEMENT
Loan No: (Continued) Page 5
False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Agreement or
the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any
time thereafter.
Insolvency. The dissolution or termination of Borrower's existence as a going business, the insolvency of Borrower, the appointment of a receiver for any
part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any
bankruptcy or insolvency laws by or against Borrower.
Defective Col lateral ization. This Agreement or any of the Related Documents ceases to be in full force and effect (including failure of any collateral
document to create a valid and perfected security interest or lien) at any time and for any reason.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self -help, repossession or
any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the Loan, This includes a garnishment of
any of Borrower's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by
Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written
notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount
determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute.
Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or
becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness.
Change in Ownership. Any change in ownership of twenty -five percent (25 %) or more of the common stock of Borrower.
Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of the
Loan is impaired.
Insecurity. Lender in good faith believes itself insecure.
Right to Cure. If any default, including a default in payment, is curable and if Borrower or Grantor, as the case may be, has not been given a notice of a
similar default within the preceding twelve (12) months, it may be cured if Borrower or Grantor, as the case may be, after receiving written notice from
Lender demanding cure of such default: (1) cure the default within fifteen (15) days; or (2) if the cure requires more than fifteen (15) days, immediately
initiate steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continue and complete all reasonable and
necessary steps sufficient to produce compliance as soon as reasonably practical.
DISPUTE RESOLUTION. This section contains a jury waiver, arbitration clause, and a class action waiver. READ THIS SECTION CAREFULLY.
This dispute resolution provision shall supersede and replace any prior "Jury Waiver," "Judicial Reference," "Class Action Waiver," "Arbitration,"
"Dispute Resolution," or similar alternative dispute agreement or provision between or among the parties.
Jury Trial Waiver; CLASS ACTION WAIVER. As permitted by applicable law, each party waives their respective rights to a trial before a jury in
connection with any Dispute (as "Dispute" is hereinafter defined), and Disputes shall be resolved by a judge sitting without a jury If a court determines
that this provision is not enforceable for any reason and at any time prior to trial of the Dispute, but not later than 30 days after entry of the order
determining this provision is unenforceable, any party shall be entitled to move the court for an order compelling arbitration and staying or dismissing such
litigation pending arbitration ( "Arbitration Order "). If permitted by applicable law, each party also waives the right to litigate in court or an arbitration
proceeding any Dispute as a class action either as a member of a class or as a representative, or to act as a private attorney general
Arbitration. If a claim, dispute, or controversy arises between us with respect to this Agreement, related agreements, or any other agreement or business
relationship between any of us whether or not related to the subject matter of this Agreement (all of the foregoing, a "Dispute "), and only if a jury trial
waiver is not permitted by applicable law or ruling by a court, any of us may require that the Dispute be resolved by binding arbitration before a single
arbitrator at the request of any party. By agreeing to arbitrate a Dispute, each party gives up any right that party may have to a jury trial, as well as other
rights that party would have in court that are not available or are more limited in arbitration, such as the rights to discovery and to appeal
Arbitration shall be commenced by filing a petition with, and in accordance with the applicable arbitration rules of, JAMS or National Arbitration Forum
( "Administrator ") as selected by the initiating party. If the parties agree, arbitration may be commenced by appointment of a licensed attorney who is
selected by the parties and who agrees to conduct the arbitration without an Administrator.
Disputes include matters (i) relating to a deposit account, application for or denial of credit, enforcement of any of the obligations we have to each other,
compliance with applicable laws and /or regulations, performance or services provided under any agreement by any party, (ii) based on or arising from an
alleged tort, or (iii) involving either of our employees, agents, affiliates, or assigns of a party. However, Disputes do not include the validity, enforceability,
meaning, or scope of this arbitration provision and such matters may be determined only by a court. If a third party is a party to a Dispute, we each will
consent to including the third party in the arbitration proceeding for resolving the Dispute with the third party Venue for the arbitration proceeding shall be
at a location determined by mutual agreement of the parties or, if no agreement, in the city and state where lender or bank is headquartered.
After entry of an Arbitration Order, the non - moving party shall commence arbitration. The moving party shall, at its discretion, also be entitled to
commence arbitration but is under no obligation to do so, and the moving party shall not in any way be adversely prejudiced by electing not to commence
arbitration. The arbitrator: (i) will hear and rule on appropriate dispositive motions for judgment on the pleadings, for failure to state a claim, or for full or
partial summary judgment; (ii) will render a decision and any award applying applicable law; (iii) will give effect to any limitations period in determining any
Dispute or defense; (iv) shall enforce the doctrines of compulsory counterclaim, res judicata, and collateral estoppel, if applicable; (v) with regard to
motions and the arbitration hearing, shall apply rules of evidence governing civil cases; and (vi) will apply the law of the state specified in the agreement
giving rise to the Dispute. Filing of a petition for arbitration shall not prevent any party from (i) seeking and obtaining from a court of competent jurisdiction
(notwithstanding ongoing arbitration) provisional or ancillary remedies including but not limited to injunctive relief, property preservation orders, foreclosure,
4847 - 6312- 167043
BUSINESS LOAN AGREEMENT
Loan No: (Continued) Page 6
eviction, attachment, replevin, garnishment, and /or the appointment of a receiver, (ii) pursuing non - judicial foreclosure, or (iii) availing itself of any self -help
remedies such as setoff and repossession. The exercise of such rights shall not constitute a waiver of the right to submit any Dispute to arbitration.
Judgment upon an arbitration award may be entered in any court having jurisdiction except that, if the arbitration award exceeds $4,000,000, any party
shall be entitled to a de novo appeal of the award before a panel of three arbitrators. To allow for such appeal, if the award (including Administrator,
arbitrator, and attorney's fees and costs) exceeds $4,000,000, the arbitrator will issue a written, reasoned decision supporting the award, including a
statement of authority and its application to the Dispute. A request for de novo appeal must be filed with the arbitrator within 30 days following the date of
the arbitration award; if such a request is not made within that time period, the arbitration decision shall become final and binding. On appeal, the
arbitrators shall review the award de novo, meaning that they shall reach their own findings of fact and conclusions of law rather than deferring in any
manner to the original arbitrator. Appeal of an arbitration award shall be pursuant to the rules of the Administrator or, if the Administrator has no such
rules, then the JAMS arbitration appellate rules shall apply.
Arbitration under this provision concerns a transaction involving interstate commerce and shall be governed by the Federal Arbitration Act, 9 U.S.C. § 1 et
seq. This arbitration provision shall survive any termination, amendment, or expiration of this Agreement. If the terms of this provision vary from the
Administrator's rules, this arbitration provision shall control.
Reliance. Each party (i) certifies that no one has represented to such party that the other party would not seek to enforce jury and class action waivers in
the event of suit, and (ii) acknowledges that it and the other party have been induced to enter into this Agreement by, among other things, the mutual
waivers, agreements, and certifications in this section
EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur that has not been cured in a timely manner as provided herein, except where
otherwise provided in this Agreement or the Related Documents, all commitments and obligations of Lender under this Agreement or the Related Documents or
any other acceleration agreement immediately will terminate (including any obligation to make further Loan Advances or disbursements), and, at Lender's option,
all Indebtedness immediately will become due and payable, all without notice of any kind to Borrower, except that (1) in the case of an Event of Default of the
type described in the "Insolvency" subsection above, such acceleration shall be automatic and not optional; and (2) all other events of acceleration shall be
preceded by five (5) business days written notice to Borrower. In addition, Lender shall have all the rights and remedies provided in the Related Documents or
available at law, in equity, or otherwise. Except as may be prohibited by applicable law, all of Lender's rights and remedies shall be cumulative and may be
exercised singularly or concurrently. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make
expenditures or to take action to perform an obligation of Borrower or of any Grantor shall not affect Lender's right to declare a default and to exercise its rights
and remedies.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Agreement:
Amendments. This Agreement, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the
matters set forth in this Agreement. No alteration of or amendment to this Agreement shall be effective unless given in writing and signed by the party or
parties sought to be charged or bound by the alteration or amendment.
Attorneys' Fees; Expenses. Borrower agrees to pay upon demand all of Lender's costs and expenses, including Lender's attorneys' fees and Lender's
legal expenses, incurred in connection with the enforcement of this Agreement. Lender may hire or pay someone else to help enforce this Agreement,
and Borrower shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's attorneys' fees and legal expenses whether
or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay
or injunction), appeals, and any anticipated post - judgment collection services, However, Borrower will only pay attorneys' fees of an attorney not Lender's
salaried employee, to whom the matter, is referred after Borrower's default. Borrower also shall pay all court costs and such additional fees as may be
directed by the court.
Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of
this Agreement.
Consent to Loan Participation. Borrower agrees and consents to Lender's sale or transfer, whether now or later, of one or more participation interests in
the Loan to one or more purchasers, whether related or unrelated to Lender. Lender may provide, without any limitation whatsoever, to any one or more
purchasers, or potential purchasers, any information or knowledge Lender may have about Borrower or about any other matter relating to the Loan, and
Borrower hereby waives any rights to privacy Borrower may have with respect to such matters. Borrower additionally waives any and all notices of sale of
participation interests, as well as all notices of any repurchase of such participation interests, Borrower also agrees that the purchasers of any such
participation interests will be considered as the absolute owners of such interests in the Loan and will have all the rights granted under the participation
agreement or agreements governing the sale of such participation interests.
Governing Law. This Agreement will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the
State of Arizona without regard to its conflicts of law provisions. This Agreement has been accepted by Lender in the State of Arizona.
Choice of Venue. If there is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Mohave County, State of
Arizona.
No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is given in writing and signed by
Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of
a provision of this Agreement shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any
other provision of this Agreement. No prior waiver by Lender, nor any course of dealing between Lender and Borrower, or between Lender and any
Grantor, shall constitute a waiver of any of Lender's rights or of any of Borrower's or any Grantor's obligations as to any future transactions. Whenever the
consent of Lender is required under this Agreement, the granting of such consent by Lender in any instance shall not constitute continuing consent to
subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender.
Notices. Any notice required to be given under this Agreement shall be given in writing, and shall be effective when actually delivered, when actually
received by facsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in
the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Agreement.
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BUSINESS LOAN AGREEMENT
Loan No: (Continued) Page 7
Any party may change its address for notices under this Agreement by giving formal written notice to the other parties, specifying that the purpose of the
notice is to change the party's address. For notice purposes, Borrower agrees to keep Lender informed at all times of Borrower's current address, Unless
otherwise provided or required by law, if there is more than one Borrower, any notice given by Lender to any Borrower is deemed to be notice given to all
Borrowers.
Severability. If a court of competent jurisdiction finds any provision of this Agreement to be illegal, invalid, or unenforceable as to any circumstance, that
finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible, the offending provision shall be
considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so modified, it shall be considered deleted from
this Agreement. Unless otherwise required by law, the illegality, invalidity, or unenforceability of any provision of this Agreement shall not affect the
legality, validity or enforceability of any other provision of this Agreement.
Subsidiaries and Affiliates of Borrower. To the extent the context of any provisions of this Agreement makes it appropriate, including without limitation
any representation, warranty or covenant, the word "Borrower" as used in this Agreement shall include all of Borrower's subsidiaries and affiliates.
Notwithstanding the foregoing however, under no circumstances shall this Agreement be construed to require Lender to make any Loan or other financial
accommodation to any of Borrower's subsidiaries or affiliates.
Successors and Assigns. All covenants and agreements by or on behalf of Borrower contained in this Agreement or any Related Documents shall bind
Borrower's successors and assigns and shall inure to the benefit of Lender and its successors and assigns. Borrower shall not, however, have the right to
assign Borrower's rights under this Agreement or any interest therein, without the prior written consent of Lender.
Survival of Representations and Warranties. Borrower understands and agrees that in extending Loan Advances, Lender is relying on all
representations, warranties, and covenants made by Borrower in this Agreement or in any certificate or other instrument delivered by Borrower to Lender
under this Agreement or the Related Documents. Borrower further agrees that regardless of any investigation made by Lender, all such representations,
warranties and covenants will survive the extension of Loan Advances and delivery to Lender of the Related Documents, shall be continuing in nature,
shall be deemed made and redated by Borrower at the time each Loan Advance is made, and shall remain in full force and effect until such time as
Borrower's Indebtedness shall be paid in full, or until this Agreement shall be terminated in the manner provided above, whichever is the last to occur.
Time is of the Essence. Time is of the essence in the performance of this Agreement.
DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Agreement, Unless specifically stated to the
contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall
include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code. Accounting words and terms not otherwise defined in this Agreement shall have the
meanings assigned to them in accordance with generally accepted accounting principles as in effect on the date of this Agreement:
Additions to Tax. The word "Additions to Tax" means any penalties, fines, additions to tax, interest and additional amounts described in the Code or
under the laws of any state or local government, paid or incurred by Lender in the event of a Determination of Taxability.
Advance. The word "Advance" means a disbursement of Loan funds made, or to be made, to Borrower or on Borrower's behalf on a line of credit or
multiple advance basis under the terms and conditions of this Agreement.
Agreement. The word "Agreement" means this Business Loan Agreement, as this Business Loan Agreement may be amended or modified from time to
time, together with all exhibits and schedules attached to this Business Loan Agreement from time to time.
Borrower. The word "Borrower" means MOHAVE COUNTY AIRPORT AUTHORITY, INC. and includes all co- Signers and co- makers signing the Note
and all their successors and assigns. The Borrower (i) REPRESENTS THAT BORROWER AND ITS AFFILIATES HAVE NO DEFENSES TO OR
SETOFFS AGAINST ANY INDEBTEDNESS OR OTHER OBLIGATIONS OWING TO LENDER OR ITS AFFILIATES (THE "OBLIGATIONS "), NOR
CLAIMS AGAINST LENDER OR ITS AFFILIATES FOR ANY MATTER WHATSOEVER, RELATED OR UNRELATED TO THE OBLIGATIONS, AND (ii)
RELEASES LENDER AND ITS AFFILIATES FROM ALL CLAIMS, CAUSES OF ACTION, AND COSTS, IN LAW OR EQUITY, EXISTING AS OF THE
DATE OF THIS AGREEMENT WHICH BORROWER AND ITS AFFILIATES HAVE OR MAY HAVE BY REASON OF ANY MATTER OF ANY
CONCEIVABLE KIND OR CHARACTER WHATSOEVER, RELATED OR UNRELATED TO THE OBLIGATIONS, INCLUDING THE SUBJECT MATTER
OF THIS AGREEMENT. THE FOREGOING RELEASE DOES NOT APPLY, HOWEVER, TO CLAIMS FOR FUTURE PERFORMANCE OF EXPRESS
CONTRACTUAL OBLIGATIONS THAT MATURE AFTER THE DATE HEREOF THAT ARE OWING TO BORROWER OR ITS AFFILIATES BY LENDER
OR ITS AFFILIATES.
Collateral. The word "Collateral" means all Grantors' accounts (including, but not limited to, accounts receivable), instruments, payment intangibles,
deposit accounts, revenues, income and other benefits derived from the operation of the Borrower.
Determination of Taxability. The word "Determination of Taxability" means one of the following determinations, made in regard to Section 103 of the
Code to the effect that by reason of any action or inaction by the Borrower or any violation by the Borrower of any of its covenants or representations in
this Agreement, the Tax Certificate, or any misrepresentation in any certificate furnished in connection with the Loan, the interest payable on the Note is
includable in the gross income of the holder thereof: (a) a final determination, decision, or decree by the Commissioner or any District Director of the
Internal Revenue Service, or by any court of competent jurisdiction, which is not subject to further review, in a proceeding in which the Borrower was
afforded the opportunity to contest the issues involving federal income tax treatment of interest on the Note, either directly or in the name of the owner
thereof, or (b) an opinion of a nationally recognized bond counsel furnished by the Lender to the Borrower.
Environmental Laws. The words "Environmental Laws" mean any and all state, federal and local statutes, regulations and ordinances relating to the
protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act
of 1980, as amended, 42 U.S.C. Section 9601, et seq. ( "CERCLA "), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99 -499
( "SARA "), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section
6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto.
Event of Default. The words "Event of Default" mean any of the events of default set forth in this Agreement in the default section of this Agreement.
4847 - 6312 - 1670.3
BUSINESS LOAN AGREEMENT
Loan No: (Continued) Page 8
GAAP. The word "GAAP" means generally accepted accounting principles.
Grantor. The word "Grantor" means each and all of the persons or entities granting a Security Interest in any Collateral for the Loan, including without
limitation all Borrowers granting such a Security Interest.
Guarantor. The word "Guarantor" means any guarantor, surety, or accommodation party of any or all of the Loan.
Guaranty. The word "Guaranty' means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note.
Hazardous Substances. The words "Hazardous Substances" mean materials that, because of their quantity, concentration or physical, chemical or
infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored,
disposed of, generated, manufactured, transported or otherwise handled. The words "Hazardous Substances" are used in their very broadest sense and
include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term
"Hazardous Substances" also includes, without limitation, petroleum and petroleum by- products or any fraction thereof and asbestos.
Indebtedness. The word "Indebtedness" means the indebtedness evidenced by the Note or Related Documents, including all principal and interest
together with all other indebtedness and costs and expenses for which Borrower is responsible under this Agreement or under any of the Related
Documents.
Lender. The word "Lender' means NATIONAL BANK OF ARIZONA, its successors and assigns.
Loan. The word "Loan" means any and all loans and financial accommodations from Lender to Borrower whether now or hereafter existing, and however
evidenced, including without limitation those loans and financial accommodations described herein or described on any exhibit or schedule attached to this
Agreement from time to time.
Note. The word "Note" means the Note executed by MOHAVE COUNTY AIRPORT AUTHORITY, INC. in the principal amount of $2,899,251.00 dated
June 2010, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the note or credit
agreement.
Payment Date. The word "Payment Date" means, with respect to each Note, the date on which payment is due under such Note.
Permitted Liens. The words "Permitted Liens" mean (1) liens and security interests securing Indebtedness owed by Borrower to Lender; (2) liens for
taxes, assessments, or similar charges either not yet due or being contested in good faith; (3) liens of materialmen, mechanics, warehousemen, or
carriers, or other like liens arising in the ordinary course of business and securing obligations which are not yet delinquent, (4) purchase money liens or
purchase money security interests upon or in any property acquired or held by Borrower in the ordinary course of business to secure indebtedness
outstanding on the date of this Agreement or permitted to be incurred under the paragraph of this Agreement titled "Indebtedness and Liens "; (5) liens and
security interests which, as of the date of this Agreement, have been disclosed to and approved by the Lender in writing; and (6) those liens and security
interests which in the aggregate constitute an immaterial and insignificant monetary amount with respect to the net value of Borrower's assets.
Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements,
guaranties, security agreements, security deeds, and all other instruments, agreements and documents, whether now or hereafter existing, executed in
connection with the Loan.
Security Agreement. The words "Security Agreement" mean and include without limitation any agreements, promises, covenants, arrangements,
understandings or other agreements, whether created by law, contract, or otherwise, evidencing, governing, representing, or creating a Security Interest,
including, without limitation, the Commercial Security Agreement dated June _, 2010.
Security Interest. The words "Security Interest" mean, without limitation, any and all types of collateral security, present and future, whether in the form of
a lien, charge, encumbrance, security deed, assignment, pledge, crop pledge, chattel trust, factor's lien, equipment trust, conditional sale, trust receipt, lien
or title retention contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever whether created by law,
contract, or otherwise.
Tax Certificate. The word "Tax Certificate" means the tax compliance certificate to be signed by the Borrower, in a form acceptable to Bond Counsel (as
that term is defined in the Tax Certificate), relating to the requirements of Sections 103 and 141 to 150, inclusive, of the Code.
Taxable Date. The word "Taxable Date" means that date when interest on the Loan becomes subject to federal income taxation.
Taxable Rate. The word "Taxable Rate" means, following the Taxable Date, a rate which reflects the rate set forth in the Note, adjusted to reflect that the
interest on the Loan is not excluded from gross income for federal tax purposes, nor exempt from Arizona personal taxation. The Taxable Rate shall be
determined by the Lender in its sole and absolute discretion, and shall be conclusive absent manifest error.
BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT AND BORROWER AGREES TO ITS
TERMS. THIS BUSINESS LOAN AGREEMENT IS DATED JUNE _, 2010.
BORROWER:
MOHAVE COUNTY AIRPORT AUTHORITY, INC.
By:
JOHN HASTINGS, President
4847 - 6312 - 1670.3
BUSINESS LOAN AGREEMENT
Loan No: (Continued) Page 9
MOHAVE COUNTY AIRPORT AUTHORITY, INC.
LENDER:
NATIONAL BANK OF ARIZONA
By:
Authorized Signer
4847 - 6312 - 1670.3
EXHIBIT A
FEE SCHEDULE
4847 - 6312- 1670.3
i7
COMMERCIAL SECURITY AGREEMENT
Principal Loan Date Maturity Loan No Call / Coll Account Officer Initials
$2,899,251.00 06 -_ -2010 _ -_ -20_ 1 - _
References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item.
Any item above containing " *" has been omitted due to text length limitations.
Borrower: Mohave County Airport Authority, Inc. Lender: National Bank of Arizona
(TIN: 86- 0383435) 4676 Hwy. 95, Suite 101
2550 Laughlin View Drive, Suite 117 Fort Mohave, AZ 86426
Bullhead City, AZ 86429 (928) 763 -5618
THIS COMMERCIAL SECURITY AGREEMENT dated June _, 2010, is made and executed between MOHAVE COUNTY AIRPORT AUTHORITY,
INC.. ( "Grantor ") and NATIONAL BANK OF ARIZONA ( "Lender ").
GRANT OF SECURITY INTEREST. For valuable consideration, Grantor grants to Lender a security interest in the Collateral to secure the
Indebtedness and agrees that Lender shall have the rights stated in this Agreement with respect to the Collateral, in addition to all other rights which
Lender may have by law.
COLLATERAL DESCRIPTION. The word "Collateral" as used in this Agreement means the following described property, whether now owned or
hereafter acquired, whether now existing or hereafter arising, and wherever located, in which Grantor is giving to Lender a security interest for the
payment of the Indebtedness and performance of all other obligations under the Note and this Agreement:
All Grantors' accounts (including, but not limited to, accounts receivable), instruments, payment intangibles, deposit accounts, revenues,
income and other benefits derived from the operation of the Borrower.
In addition, the word "Collateral" also includes all the following, whether now owned or hereafter acquired, whether now existing or hereafter arising,
and wherever located:
(A) All accessions, attachments, accessories, replacements of and additions to any of the collateral described herein, whether added now
or later.
(B) All products and produce of any of the property described in this Collateral section.
(C) All accounts, general intangibles, instruments, rents, monies, payments, and all other rights, arising out of a sale, lease, consignment or
other disposition of any of the property described in this Collateral section.
(D) All proceeds (including insurance proceeds) from the sale, destruction, loss, or other disposition of any of the property described in this
Collateral section, and sums due from a third party who has damaged or destroyed the Collateral or from that party's insurer, whether due to
judgment, settlement or other process,
(E) All records and data relating to any of the property described In this Collateral section, whether in the form of a writing, photograph,
microfilm, microfiche, or electronic media, together with all of Grantor's right, title, and interest in and to all computer software required to
utilize, create, maintain, and process any such records or data on electronic media.
CROSS- COLLATERALIZATION. In addition to the Note, this Agreement secures all obligations, debts and liabilities, plus interest thereon, of Grantor
to Lender, or any one or more of them, as well as all claims by Lender against Grantor or any one or more of them, whether now existing or hereafter
arising, whether related or unrelated to the purpose of the Note, whether voluntary or otherwise, whether due or not due, direct or indirect, determined
or undetermined, absolute or contingent, liquidated or unliquidated, whether Grantor may be liable individually or jointly with others, whether obligated
as guarantor, surety, accommodation party or otherwise, and whether recovery upon such amounts may be or hereafter may become barred by any
statute of limitations, and whether the obligation to repay such amounts may be or hereafter may become otherwise unenforceable, (Initial Here )
RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Grantor's accounts with Lender (whether
checking, savings, or some other account). This includes all accounts Grantor holds jointly with someone else and all accounts Grantor may open in
the future, However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Grantor
authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the Indebtedness against any and all such accounts,
and, at Lender's option, to administratively freeze all such accounts to allow Lender to protect Lender's charge and setoff rights provided in this
paragraph.
GRANTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL. With respect to the Collateral, Grantor
represents and promises to Lender that:
Perfection of Security Interest. Grantor agrees to take whatever actions are requested by Lender to perfect and continue Lender's security
interest in the Collateral, Upon request of Lender, Grantor will deliver to Lender any and all of the documents evidencing or constituting the
Collateral, and Grantor will note Lender's interest upon any and all chattel paper and instruments if not delivered to Lender for possession by
Lender. This is a continuing Security Agreement and will continue in effect even though all or any part of the Indebtedness is paid in
full and even though for a period of time Grantor may not be indebted to Lender.
Notices to Lender. Grantor will promptly notify Lender in writing at Lender's address shown above (or such other addresses as Lender may
designate from time to time) prior to any (1) change in Grantor's name; (2) change in Grantor's assumed business name(s); (3) change in the
management of the Corporation Grantor; (4) change in the authorized signer(s); (5) change in Grantor's principal office address; (6) change in
Grantor's state of organization; (7) conversion of Grantor to a new or different type of business entity; or (8) change in any other aspect of
Grantor that directly or indirectly relates to any agreements between Grantor and Lender. No change in Grantor's name or state of
organization will take effect until after Lender has received notice.
4849 - 6392 - 3974.2
COMMERCIAL SECURITY AGREEMENT
Loan No: (Continued) Page 2
No Violation. The execution and delivery of this Agreement will not violate any law or agreement governing Grantor or to which Grantor is a
party, and its certificate or articles of incorporation and bylaws do not prohibit any term or condition of this Agreement.
Enforceability of Collateral. To the extent the Collateral consists of accounts, chattel paper, or general intangibles, as defined by the
Uniform Commercial Code, the Collateral is enforceable in accordance with its terms, is genuine, and fully complies with all applicable laws
and regulations concerning form, content and manner of preparation and execution, and all persons appearing to be obligated on the
Collateral have authority and capacity to contract and are in fact obligated as they appear to be on the Collateral. There shall be no setoffs or
counterclaims against any of the Collateral, and no agreement shall have been made under which any deductions or discounts may be
claimed concerning the Collateral except those disclosed to Lender in writing.
Location of the Collateral. Except in the ordinary course of Grantor's business, Grantor agrees to keep the Collateral (or to the extent the
Collateral consists of intangible property such as accounts or general intangibles, the records concerning the Collateral) at Grantor's address
shown above or at such other locations as are acceptable to Lender. Upon Lender's request, Grantor will deliver to Lender in form
satisfactory to Lender a schedule of real properties and Collateral locations relating to Grantor's operations, including without limitation the
following: (1) all real property Grantor owns or is purchasing; (2) all real property Grantor is renting or leasing, (3) all storage facilities Grantor
owns, rents, leases, or uses; and (4) all other properties where Collateral is or may be located.
Removal of the Collateral. Except in the ordinary course of Grantor's business, Grantor shall not remove the Collateral from its existing
location without Lender's prior written consent. Grantor shall, whenever requested, advise Lender of the exact location of the Collateral.
Transactions Involving Collateral. Except for inventory sold or accounts collected in the ordinary course of Grantor's business, or as
otherwise provided for in this Agreement, Grantor shall not sell, offer to sell, or otherwise transfer or dispose of the Collateral. Grantor shall
not pledge, mortgage, encumber or otherwise permit the Collateral to be subject to any lien, security interest, encumbrance, or charge, other
than the security interest provided for in this Agreement, without the prior written consent of Lender. This includes security interests even if
junior in right to the security interests granted under this Agreement. Unless waived by Lender, all proceeds from any disposition of the
Collateral (for whatever reason) shall be held in trust for Lender and shall not be commingled with any other funds; provided however, this
requirement shall not constitute consent by Lender to any sale or other disposition. Upon receipt, Grantor shall immediately deliver any such
proceeds to Lender.
Title. Grantor represents and warrants to Lender that Grantor holds good and marketable title to the Collateral, free and clear of all liens and
encumbrances except for the lien of this Agreement. No financing statement covering any of the Collateral is on file in any public office other
than those which reflect the security interest created by this Agreement or to which Lender has specifically consented. Grantor shall defend
Lender's rights in the Collateral against the claims and demands of all other persons.
Inspection of Collateral. Lender and Lender's designated representatives and agents shall have the right at all reasonable times to
examine and inspect the Collateral wherever located.
Taxes, Assessments and Liens. Grantor will pay when due all taxes, assessments and liens upon the Collateral, its use or operation, upon
this Agreement, upon any promissory note or notes evidencing the Indebtedness, or upon any of the other Related Documents. Grantor may
withhold any such payment or may elect to contest any lien if Grantor is in good faith conducting an appropriate proceeding to contest the
obligation to pay and so long as Lender's interest in the Collateral is not jeopardized in Lender's sole opinion. If the Collateral is subjected to a
lien which is not discharged within fifteen (15) days, Grantor shall deposit with Lender cash, a sufficient corporate surety bond or other
security satisfactory to Lender in an amount adequate to provide for the discharge of the lien plus any interest, costs, attorneys' fees or other
charges that could acme as a result of foreclosure or sale of the Collateral. In any contest Grantor shall defend itself and Lender and shall
satisfy any final adverse judgment before enforcement against the Collateral. Grantor shall name Lender as an additional obligee under any
surety bond furnished in the contest proceedings. Grantor further agrees to furnish Lender with evidence that such taxes, assessments, and
governmental and other charges have been paid in full and in a timely manner. Grantor may withhold any such payment or may elect to
contest any lien if Grantor is in good faith conducting an appropriate proceeding to contest the obligation to pay and so long as Lender's
interest in the Collateral is not jeopardized.
Compliance with Governmental Requirements. Grantor shall comply promptly with all laws, ordinances, rules and regulations of all
governmental authorities, now or hereafter in effect, applicable to the ownership, production, disposition, or use of the Collateral, including all
laws or regulations relating to the undue erosion of highly - erodible land or relating to the conversion of wetlands for the production of an
agricultural product or commodity. Grantor may contest in good faith any such law, ordinance or regulation and withhold compliance during
any proceeding, including appropriate appeals, so long as Lender's interest in the Collateral, in Lender's opinion, is not jeopardized.
Hazardous Substances. Grantor represents and warrants that the Collateral never has been, and never will be so long as this Agreement
remains a lien on the Collateral, used in violation of any Environmental Laws or for the generation, manufacture, storage, transportation,
treatment, disposal, release or threatened release of any Hazardous Substance. The representations and warranties contained herein are
based on Grantor's due diligence in investigating the Collateral for Hazardous Substances, Grantor hereby (1) releases and waives any future
claims against Lender for indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under any Environmental
Laws, and (2) agrees to indemnify, defend, and hold harmless Lender against any and all claims and losses resulting from a breach of this
provision of this Agreement. This obligation to Indemnify end defend shall survive the payment of the Indebtedness and the satisfaction of this
Agreement.
Maintenance of Casualty Insurance. Grantor shall procure and maintain all risks insurance, including without limitation fire, theft and
liability coverage together with such other insurance as Lender may require with respect to the Collateral, in form, amounts, coverages and
basis reasonably acceptable to Lender and issued by a company or companies reasonably acceptable to Lender. Grantor, upon request of
Lender, will deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender, including stipulations that
coverages will not be cancelled or diminished without at least thirty (30) days' prior written notice to Lender and not including any disclaimer of
the insurer's liability for failure to give such a notice. Each insurance policy also shall include an endorsement providing that coverage in favor
4849 - 6392 - 3974.2
COMMERCIAL SECURITY AGREEMENT
Loan No: (Continued) Page 3
of Lender will not be impaired in any way by any act, omission or default of Grantor or any other person. In connection with all policies
covering assets in which Lender holds or is offered a security interest, Grantor will provide Lender with such loss payable or other
endorsements as Lender may require. If Grantor at any time fails to obtain or maintain any insurance as required under this Agreement,
Lender may (but shall not be obligated to) obtain such insurance as Lender deems appropriate, including if Lender so chooses "single interest
insurance," which will cover only Lender's interest in the Collateral.
Application of Insurance Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Collateral, whether or not such
casualty or loss is covered by insurance. Lender may make proof of loss if Grantor fails to do so within fifteen (15) days of the casualty. All
proceeds of any insurance on the Collateral, including accrued proceeds thereon, shall be held by Lender as part of the Collateral. If Lender
consents to repair or replacement of the damaged or destroyed Collateral, Lender shall, upon satisfactory proof of expenditure, pay or
reimburse Grantor from the proceeds for the reasonable cost of repair or restoration. If Lender does not consent to repair or replacement of
the Collateral, Lender shall retain a sufficient amount of the proceeds to pay all of the Indebtedness, and shall pay the balance to Grantor.
Any proceeds which have not been disbursed within six (6) months after their receipt and which Grantor has not committed to the repair or
restoration of the Collateral shall be used to prepay the Indebtedness.
Insurance Reserves. Lender may require Grantor to maintain with Lender reserves for payment of insurance premiums, which reserves
shall be created by monthly payments from Grantor of a sum estimated by Lender to be sufficient to produce, at least fifteen (15) days before
the premium due date, amounts at least equal to the insurance premiums to be paid. If fifteen (15) days before payment is due, the reserve
funds are insufficient, Grantor shall upon demand pay any deficiency to Lender. The reserve funds shall be held by Lender as a general
deposit and shall constitute a non - interest - bearing account which Lender may satisfy by payment of the insurance premiums required to be
paid by Grantor as they become due. Lender does not hold the reserve funds in trust for Grantor, and Lender is not the agent of Grantor for
payment of the insurance premiums required to he paid by Grantor. The responsibility for the payment of premiums shall remain Grantor's
sole responsibility.
Insurance Reports. Grantor, upon request of Lender, shall furnish to Lender reports on each existing policy of insurance showing such
information as Lender may reasonably request including the following: (1) the name of the insurer; (2) the risks insured; (3) the amount of the
policy; (4) the property insured; (5) the then current value on the basis of which insurance has been obtained and the manner of determining
that value; and (6) the expiration date of the policy. In addition, Grantor shall upon request by Lender (however not more often than annually)
have an independent appraiser satisfactory to Lender determine, as applicable, the cash value or replacement cost of the Collateral
Financing Statements. Grantor authorizes Lender to file a UCC financing statement, or alternatively, a copy of this Agreement to perfect
Lender's security interest. At Lender's request, Grantor additionally agrees to sign all other documents that are necessary to perfect, protect,
and continue Lender's security interest in the Property. Grantor will pay all filing fees, title transfer fees, and other fees and costs involved
unless prohibited by law or unless Lender is required by law to pay such fees and costs, Grantor irrevocably appoints Lender to execute
documents necessary to transfer title if there is a default. Lender may file a copy of this Agreement as a financing statement. If Grantor
changes Grantor's name or address, or the name or address of any person granting a security interest under this Agreement changes,
Grantor will promptly notify the Lender of such change.
LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the Collateral or if Grantor
fails to comply with any provision of this Agreement or any Related Documents, including but not limited to Grantor's failure to discharge or pay when
due any amounts Grantor is required to discharge or pay under this Agreement or any Related Documents, Lender on Grantor's behalf may (but shall
not be obligated to) take any action that Lender deems appropriate, to the extent permitted by applicable law, including but not limited to discharging or
paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on the Collateral and paying all costs for
maintaining and preserving the Collateral. All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged
under the Note from the date incurred or paid by Lender to the date of repayment by Grunter. All such expenses will become a part of the Indebtedness
and, at Lender's option, will (A) he payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any
installment payments to become due during the remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at
the Note's maturity.. The Agreement also will secure payment of these amounts. Such right shall be in addition to all other rights and remedies to which
Lender may be entitled upon Default and shall be exercisable by Lender to the extent permitted by applicable law.
DISPUTE RESOLUTION. This section contains a jury waiver, arbitration clause, and a class action waiver. READ THIS SECTION
CAREFULLY.
This dispute resolution provision shall supersede and replace any prior "Jury Waiver," "Judicial Reference," "Class Action Waiver," "Arbitration,"
"Dispute Resolution," or similar alternative dispute agreement or provision between or among the parties.
Jury Trial Waiver; CLASS ACTION WAIVER. As permitted by applicable law, each party waives their respective rights to a trial before a Jury in
connection with any Dispute (as "Dispute" is hereinafter defined), and Disputes shall be resolved by a iudge sitting without a jury If a court determines
that this provision is not enforceable for any reason and at any time prior to trial of the Dispute, but not later than 30 days after entry of the order
determining this provision is unenforceable, any party shall be entitled to move the court for an order compelling arbitration and staying or dismissing
such litigation pending arbitration ( "Arbitration Order "). If permitted by applicable law, each party also waives the right to litigate in court or an
arbitration proceeding any Dispute as a class action either as a member of a class or as a representative, or to act as a private attorney general
Arbitration. If a claim, dispute, or controversy arises between us with respect to this Agreement, related agreements, or any other agreement or
business relationship between any of us whether or not related to the subiect matter of this Agreement (all of the foregoing, a "Dispute "), and only if a
jury trial waiver is not permitted by applicable law or ruling by a court, any of us may require that the Dispute be resolved by binding arbitration before
a single arbitrator at the request of any party. By agreeing to arbitrate a Dispute each party gives up any right that party may have to a jury trial as
well as other rights that party would have in court that are not available or are more limited in arbitration such as the rights to discovery and to appeal
4849 - 6392 - 3974.2
COMMERCIAL SECURITY AGREEMENT
Loan No: (Continued) Page 4
Arbitration shall be commenced by filing a petition with, and in accordance with the applicable arbitration rules of, JAMS or National Arbitration Forum
( "Administrator ") as selected by the initiating party. If the parties agree, arbitration may be commenced by appointment of a licensed attorney who is
selected by the parties and who agrees to conduct the arbitration without an Administrator.
Disputes include matters (i) relating to a deposit account, application for or denial of credit, enforcement of any of the obligations we have to each
other, compliance with applicable laws and /or regulations, performance or services provided under any agreement by any party, (ii) based on or
arising from an alleged tort, or (iii) involving either of our employees, agents, affiliates, or assigns of a party. However, Disputes do not include the
validity, enforceability, meaning, or scope of this arbitration provision and such matters may be determined only by a court. If a third party is a party to
a Dispute, we each will consent to including the third party in the arbitration proceeding for resolving the Dispute with the third party Venue for the
arbitration proceeding shall be at a location determined by mutual agreement of the parties or, if no agreement, in the city and state where lender or
bank is headquartered.
After entry of an Arbitration Order, the non - moving party shall commence arbitration. The moving party shall, at its discretion, also be entitled to
commence arbitration but is under no obligation to do so, and the moving party shall not in any way be adversely prejudiced by electing not to
commence arbitration. The arbitrator: (i) will hear and rule on appropriate dispositive motions for judgment on the pleadings, for failure to state a
claim, or for full or partial summary judgment; (ii) will render a decision and any award applying applicable law; (iii) will give effect to any limitations
period in determining any Dispute or defense; (iv) shall enforce the doctrines of compulsory counterclaim, res judicata, and collateral estoppel, if
applicable; (v) with regard to motions and the arbitration hearing, shall apply rules of evidence governing civil cases; and (vi) will apply the law of the
state specified in the agreement giving rise to the Dispute. Filing of a petition for arbitration shall not prevent any party from (i) seeking and obtaining
from a court of competent jurisdiction (notwithstanding ongoing arbitration) provisional or ancillary remedies including but not limited to injunctive relief,
property preservation orders, foreclosure, eviction, attachment, replevin, garnishment, and /or the appointment of a receiver, (ii) pursuing non - judicial
foreclosure, or (iii) availing itself of any self -help remedies such as setoff and repossession. The exercise of such rights shall not constitute a waiver of
the right to submit any Dispute to arbitration.
Judgment upon an arbitration award may be entered in any court having jurisdiction except that, if the arbitration award exceeds $4,000,000, any party
shall be entitled to a de novo appeal of the award before a panel of three arbitrators. To allow for such appeal, if the award (including Administrator,
arbitrator, and attorney's fees and costs) exceeds $4,000,000, the arbitrator will issue a written, reasoned decision supporting the award, including a
statement of authority and its application to the Dispute. A request for de novo appeal must be filed with the arbitrator within 30 days following the
date of the arbitration award; if such a request is not made within that time period, the arbitration decision shall become final and binding. On appeal,
the arbitrators shall review the award de novo, meaning that they shall reach their own findings of fact and conclusions of law rather than deferring in
any manner to the original arbitrator. Appeal of an arbitration award shall be pursuant to the rules of the Administrator or, if the Administrator has no
such rules, then the JAMS arbitration appellate rules shall apply.
Arbitration under this provision concerns a transaction involving interstate commerce and shall be governed by the Federal Arbitration Act, 9 U.S.C. §
1 et seq. This arbitration provision shall survive any termination, amendment, or expiration of this Agreement. If the terms of this provision vary from
the Administrator's rules, this arbitration provision shall control.
Reliance. Each party (i) certifies that no one has represented to such party that the other party would not seek to enforce jury and class action
waivers in the event of suit, and (ii) acknowledges that it and the other party have been induced to enter into this Agreement by, among other things,
the mutual waivers, agreements, and certifications in this section.
DEFAULT. Each of the following shall constitute an Event of Default under this Agreement:
Payment Default. Grantor fails to make any payment when due under the Indebtedness.
Other Defaults. Grantor fails to comply with or to perform any other term, obligation, covenant or condition contained in this Agreement or in
any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement
between Lender and Grantor.
Default in Favor of Third Parties. Grantor defaults under any loan, extension of credit, security agreement, purchase or sales agreement,
or any other agreement, in favor of any other creditor or person that may materially affect any of Grantor's property or ability to perform
Grantor's obligations under this Agreement or any of the Related Documents.
False Statements. Any warranty, representation or statement made or furnished to Lender by Grantor or on Grantor's behalf under this
Agreement or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes
false or misleading at any time thereafter.
Defective Collateralization. This Agreement or any of the Related Documents ceases to he in full force and effect (including failure of any
collateral document to create a valid and perfected security interest or lien) at any time and for any reason.
Insolvency. The dissolution or termination of Grantor's existence as a going business, the insolvency of Grantor, the appointment of a
receiver for any part of Grantor's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of
any proceeding under any bankruptcy or insolvency laws by or against Grantor.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self -help,
repossession or any other method, by any creditor of Grantor or by any governmental agency against any collateral securing the
Indebtedness. This includes a garnishment of any of Grantor's accounts, including deposit accounts, with Lender. However, this Event of
Default shall not apply if there is a good faith dispute by Grantor as to the validity or reasonableness of the claim which is the basis of the
creditor or forfeiture proceeding and if Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender
monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an
adequate reserve or bond for the dispute.
4849 - 6392 - 3974.2
COMMERCIAL SECURITY AGREEMENT
Loan No: (Continued) Page 5
Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor, endorser, surety, or accommodation party
of any of the Indebtedness or guarantor, endorser, surety, or accommodation party dies or becomes incompetent or revokes or disputes the
validity of, or liability under, any Guaranty of the Indebtedness.
Adverse Change. A material adverse change occurs in Grantor's financial condition, or Lender believes the prospect of payment or
performance of the Indebtedness is impaired.
Insecurity. Lender in good faith believes itself insecure.
Cure Provisions. If any default, including a default in payment, is curable and if Grantor has not been given a notice of a breach of the same
provision of this Agreement within the preceding twelve (12) months, it may be cured if Grantor, after receiving written notice from Lender
demanding cure of such default: (1) cures the default within fifteen (15) days; or (2) if the cure requires more than fifteen (15) days,
immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and
completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical.
RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this Agreement, at any time thereafter, Lender shall have all the rights of
a secured party under the Arizona Uniform Commercial Code. in addition and without limitation, Lender may exercise any one or more of the following
rights and remedies:
Accelerate Indebtedness. Upon default that has not been cured in a timely manner as Lender may declare the entire Indebtedness,
including any prepayment penalty which Grantor would be required to pay, immediately due and payable.
Sell the Collateral. Lender shall have full power to sell, lease, transfer, or otherwise deal with the Collateral or proceeds thereof in Lender's
own name or that of Grantor. Lender may sell the Collateral at public auction or private sale. Unless the Collateral threatens to decline
speedily in value or is of a type customarily sold on a recognized market, Lender will give Grantor, and other persons as required by law,
reasonable notice of the time and place of any public sale, or the time after which any private sale or any other disposition of the Collateral is
to be made. However, no notice need be provided to any person who, after Event of Default occurs, enters into and authenticates an
agreement waiving that person's right to notification of sale. The requirements of reasonable notice shall be met if such notice is given at least
ten (10) days before the time of the sale or disposition. All expenses relating to the disposition of the Collateral, including without limitation the
expenses of retaking, holding, insuring, preparing for sale and selling the Collateral, shall become a part of the Indebtedness secured by this
Agreement and shall be payable on demand, with interest at the Note rate from date of expenditure until repaid.
Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Collateral, with the
power to protect and preserve the Collateral, to operate the Collateral preceding foreclosure or sale, and to collect the Rents from the
Collateral and apply the proceeds, over and above the cost of the receivership, against the Indebtedness. The receiver may serve without
bond if permitted by law. Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Collateral
exceeds the Indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver.
Collect Revenues, Apply Accounts. Lender, either itself or through a receiver, may collect the payments, rents, income, and revenues from
the Collateral. Lender may at any time in Lender's discretion transfer any Collateral into Lender's own name or that of Lender's nominee and
receive the payments, rents, income, and revenues therefrom and hold the same as security for the Indebtedness or apply it to payment of
the Indebtedness in such order of preference as Lender may determine, Insofar as the Collateral consists of accounts, general) intangibles,
insurance policies, instruments, chattel paper, chases in action, or similar property, Lender may demand, collect, receipt for, settle,
compromise, adjust, sue for, foreclose, or realize on the Collateral as Lender may determine, whether or not Indebtedness or Collateral is
then due. For these purposes, Lender may, on behalf of and in the name of Grantor, receive, open and dispose of mail addressed to Grantor;
change any address to which mail and payments are to be sent; and endorse notes, checks, drafts, money orders, documents of title,
instruments and items pertaining to payment, shipment, or storage of any Collateral. To facilitate collection, Lender may notify account
debtors and obligors on any Collateral to make payments directly to Lender.
Obtain Deficiency. If Lender chooses to sell any or all of the Collateral, Lender may obtain a judgment against Grantor for any deficiency
remaining on the Indebtedness due to Lender after application of all amounts received from the exercise of the rights provided in this
Agreement. Grantor shall be liable for a deficiency even if the transaction described in this subsection is a sale of accounts or chattel paper.
Other Rights and Remedies. Lender shall have all the rights and remedies of a secured creditor under the provisions of the Uniform
Commercial Code, as may be amended from time to time. In addition, Lender shall have and may exercise any or all other rights and
remedies it may have available at law, in equity, or otherwise.
Election of Remedies. Except as may be prohibited by applicable law, all of Lender's rights and remedies, whether evidenced by this
Agreement, the Related Documents, or by any other writing, shall be cumulative and may be exercised singularly or concurrently. Election by
Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform
an obligation of Grantor under this Agreement, after Grantor's failure to perform, shall not affect Lender's right to declare a default and
exercise its remedies.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Agreement:
Amendments. This Agreement, together with any Related Documents, constitutes the entire understanding and agreement of the parties as
to the matters set forth in this Agreement. No alteration of or amendment to this Agreement shall be effective unless given in writing and
signed by the party or parties sought to be charged or bound by the alteration or amendment.
Attorneys' Fees; Expenses. Grantor agrees to pay upon demand all of Lender's costs and expenses, including Lender's attorneys' fees
and Lender's legal expenses, incurred in connection with the enforcement of this Agreement. Lender may hire or pay someone else to help
enforce this Agreement, and Grantor shall pay the costs and expenses of such enforcement. Costs and expenses Include Lender's attorneys'
4849 - 6392- 3974.2
COMMERCIAL SECURITY AGREEMENT
Loan No: (Continued) Page 6
fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings (including
efforts to modify or vacate any automatic stay or Injunction), appeals, and any anticipated post - judgment collection services. However,
Grantor will only pay attorneys' fees of an attorney not Lender's salaried employee, to whom the matter is referred after Grantor's default.
Granter also shall pay all court costs and such additional fees as may be directed by the court.
Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the
provisions of this Agreement.
Governing Law. This Agreement will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the
laws of the State of Arizona without regard to its conflicts of law provisions. This Agreement has been accepted by Lender in the State of
Arizona.
Choice of Venue. if there is a lawsuit, Grantor agrees upon Lender's request to submit to the jurisdiction of the courts of Mohave County,
State of Arizona.
No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is given in writing
and signed by Lender, No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other
right. A waiver by Lender of a provision of this Agreement shall not prejudice or constitute a waiver of Lender's right otherwise to demand
strict compliance with that provision or any other provision of this Agreement. No prior waiver by Lender, nor any course of dealing between
Lender and Grantor, shall constitute a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions.
Whenever the consent of Lender is required under this Agreement, the granting of such consent by Lender in any instance shall not constitute
continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the
sole discretion of Lender.
Notices. Any notice required to be given under this Agreement shall be given In writing, and shall be effective when actually delivered, when
actually received by facsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed,
when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the
beginning of this Agreement. Any party may change its address for notices under this Agreement by giving formal written notice to the other
parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Grantor agrees to keep Lender
informed at all times of Grantor's current address. Unless otherwise provided or required by law, if there is more than one Grantor, any notice
given by Lender to any Grantor is deemed to be notice given to all Grantors.
Power of Attorney. Grantor hereby appoints Lender as Grantor's irrevocable attorney -in -fact for the purpose of executing any documents
necessary to perfect, amend, or to continue the security interest granted in this Agreement or to demand termination of filings of other
secured parties. Lender may at any time, and without further authorization from Grantor, file a carbon, photographic or other reproduction of
any financing statement or of this Agreement for use as a financing statement. Grantor will reimburse Lender for all expenses for the
perfection and the continuation of the perfection of Lender's security interest in the Collateral.
Severability. If a court of competent jurisdiction finds any provision of this Agreement to be illegal, invalid, or unenforceable as to any
circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible, the
offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so
modified, it shall be considered deleted from this Agreement. Unless otherwise required by law, the illegality, invalidity, or unenforceability of
any provision of this Agreement shall not affect the legality, validity or enforceability of any other provision of this Agreement.
Successors and Assigns. Subject to any limitations stated in this Agreement on transfer of Grantor's interest, this Agreement shall be
binding upon and inure to the benefit of the parties, their successors and assigns: If ownership of the Collateral becomes vested in a person
other than Grantor, Lender, without notice to Grantor, may deal with Grantor's successors with reference to this Agreement and the
Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of this Agreement or liability under the
Indebtedness.
Survival of Representations and Warranties. All representations, warranties, and agreements made by Grantor in this Agreement shall
survive the execution and delivery of this Agreement, shall be continuing in nature, and shall remain in full force and effect until such time as
Grantor's Indebtedness shall be paid in full.
Time is of the Essence. Time is of the essence in the performance of this Agreement.
DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Agreement. Unless specifically stated
to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the
singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this
Agreement shall have the meanings attributed to such terms in the Uniform Commercial Code:
Agreement. The word "Agreement" means this Commercial Security Agreement, as this Commercial Security Agreement may be amended
or modified from time to time, together with all exhibits and schedules attached to this Commercial Security Agreement from time to time.
Borrower. The word "Borrower" means MOHAVE COUNTY AIRPORT AUTHORITY, INC. and includes all co- signers and co- makers signing
the Note and all their successors and assigns.
Collateral. The word "Collateral" means all of Grantor's right, title and interest in and to all the Collateral as described in the Collateral
Description section of this Agreement.
Default. The word "Default" means the Default set forth in this Agreement in the section titled "Default ". Environmental Laws. The words
"Environmental Laws" mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human
health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
4849 - 6392 - 3974.2
COMMERCIAL SECURITY AGREEMENT
Loan No: (Continued) Page 7
as amended, 42 U.S.C. Section 9601, et seq. ( "CERCLA "), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99 -499
"SARA "), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42
U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto.
Event of Default. The words "Event of Default" mean any of the events of default set forth in this Agreement in the default section of this
Agreement.
Grantor. The word "Grantor" means MOHAVE COUNTY AIRPORT AUTHORITY, INC..
Guaranty. The word "Guaranty" means the guaranty from guarantor, endorser, surety, or accommodation party to Lender, Including without
limitation a guaranty of all or part of the Note.
Hazardous Substances. The words "Hazardous Substances" mean materials that, because of their quantity, concentration or physical,
chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly
used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words "Hazardous Substances" are used
in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or
listed under the Environmental Laws. The term "Hazardous Substances" also includes, without limitation, petroleum and petroleum by-
products or any fraction thereof and asbestos.
Indebtedness. The word "Indebtedness" means the indebtedness evidenced by the Note or Related Documents, including all principal and
interest together with all other indebtedness and costs and expenses for which Grantor is responsible under this Agreement or under any of
the Related Documents. Specifically, without limitation, Indebtedness includes all amounts that may be indirectly secured by the Cross -
Collateralization provision of this Agreement.
Lender. The word "Lender" means NATIONAL BANK OF ARIZONA, its successors and assigns.
Note. The word "Note" means the Note executed by MOHAVE COUNTY AIRPORT AUTHORITY, INC. in the principal amount of
$2,899,251.00 dated June _, 2010, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and
substitutions for the note or credit agreement.
Property. The word "Property" means all of Grantor's right, title and interest in and to all the Property as described in the "Collateral
Description" section of this Agreement.
Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental
agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments,
agreements and documents, whether now or hereafter existing, executed in connection with the Indebtedness.
4849 - 6392 - 3974.2
COMMERCIAL SECURITY AGREEMENT
Loan No: (Continued) Page 8
GRANTOR HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS COMMERCIAL PLEDGE AGREEMENT AND AGREES TO ITS
TERMS. THIS AGREEMENT IS DATED June _, 2010.
GRANTOR:
MOHAVE COUNTY AIRPORT AUTHORITY, INC.
By:
John Hastings, President
MOHAVE COUNTY AIRPORT AUTHORITY, INC.
LENDER:
NATIONAL BANK OF ARIZONA
By:
Authorized Signer
4849- 6392 - 3974.2
1 9
RECORDATION REQUESTED BY:
NATIONAL BANK OF ARIZONA
4676 Hwy. 95, Suite 101
Fort Mohave, AZ 86426
Card Ferris
WHEN RECORDED MAIL TO
NATIONAL BANK OF ARIZONA
4676 Hwy. 95, Suite 101
Fort Mohave, AZ 86426
Card Ferris
SEND TAX NOTICES TO:
Mohave County Airport Authority, Inc.
2550 Laughlin View Drive #117
Bullhead City, AZ 86429
FOR RECORDER'S USE ONLY
ASSIGNMENT OF RENTS
THIS ASSIGNMENT OF RENTS dated June _, 2010, is made and executed between Mohave County Airport Authority, Inc. (referred to below
as "Grantor ") and NATIONAL BANK OF ARIZONA whose address is 4676 Hwy. 95, Suite 101, Fort Mohave, Arizona 86426 (referred to below
as "Lender ").
ASSIGNMENT. For valuable consideration, Grantor hereby assigns, grants a continuing security interest in, and conveys to Lender all of
Grantor's right, title, and interest in and to the Rents from the following described Property located in Mohave County, State of Arizona:
See Exhibits "A" AND "B ", which is attached to this Assignment and made a part of this Assignment as if fully set forth herein.
The Property or its address is commonly known as Laughlin /Bullhead International Airport and Airport Center, Bullhead City, AZ 86429.
FUTURE ADVANCES. In addition to the Note, this Assignment secures all future advances made by Lender to Grantor whether or not the advances
are made pursuant to a commitment. Specifically, without limitation, this Assignment secures, in addition to the amounts specified in the Note, all
future amounts Lender in its discretion may loan to Grantor, together with all interest thereon.
THIS ASSIGNMENT IS GIVEN TO SECURE (1) PAYMENT OF THE INDEBTEDNESS AND (2) PERFORMANCE OF ANY AND ALL OBLIGATIONS
OF GRANTOR UNDER THE NOTE, THIS ASSIGNMENT, AND THE RELATED DOCUMENTS. THIS ASSIGNMENT IS GIVEN AND ACCEPTED
ON THE FOLLOWING TERMS:
PAYMENT AND PERFORMANCE. Except as otherwise provided in this Assignment or any Related Documents, Grantor shall pay to Lender all
amounts secured by this Assignment as they become due, and shall strictly perform all of Grantor's obligations under this Assignment. Unless and
until Lender exercises its right to collect the Rents as provided below and so long as there is no default under this Assignment, Grantor may remain in
possession and control of and operate and manage the Property and collect the Rents, provided that the granting of the right to collect the Rents shall
not constitute Lender's consent to the use of cash collateral in a bankruptcy proceeding.
GRANTOR'S REPRESENTATIONS AND WARRANTIES. Grantor warrants that:
Ownership. Grantor is entitled to receive the Rents free and clear of all rights, loans, liens, encumbrances, and claims except as disclosed to and
accepted by Lender in writing.
Right to Assign. Grantor has the full right, power and authority to enter into this Assignment and to assign and convey the Rents to Lender.
No Prior Assignment. Grantor has not previously assigned or conveyed the Rents to any other person by any instrument now in force.
No Further Transfer. Grantor will not sell, assign, encumber, or otherwise dispose of any of Grantor's rights in the Rents except as provided in this
Assignment.
LENDER'S RIGHT TO RECEIVE AND COLLECT RENTS. Lender shall have the right at any time, and even though no default shall have occurred
under this Assignment, to collect and receive the Rents. For this purpose, Lender is hereby given and granted the following rights, powers and
authority:
Notice to Tenants. Lender may send notices to any and all tenants of the Property advising them of this Assignment and directing all Rents to be
paid directly to Lender or Lender's agent.
Enter the Property. Lender may enter upon and take possession of the Property; demand, collect and receive from the tenants or from any other
persons liable therefore, all of the Rents; institute and carry on all legal proceedings necessary for the protection of the Property, including such
proceedings as may be necessary to recover possession of the Property; collect the Rents and remove any tenant or tenants or other persons from
the Property.
Maintain the Property. Lender may enter upon the Property to maintain the Property and keep the same in repair, to pay the costs thereof and of
all services of all employees, including their equipment, and of all continuing costs and expenses of maintaining the Property in proper repair and
condition, and also to pay all taxes, assessments and water utilities, and the premiums on fire and other insurance effected by Lender on the
Property.
Compliance with Laws. Lender may do any and all things to execute and comply with the laws of the State of Arizona and also all other laws,
rules, orders, ordinances and requirements of all other governmental agencies affecting the Property.
Lease the Property. Lender may rent or lease the whole or any part of the Property for such term or terms and on such conditions as Lender may
deem appropriate.
Employ Agents. Lender may engage such agent or agents as Lender may deem appropriate, either in Lender's name or in Grantor's name, to rent
and manage the Property, including the collection and application of Rents.
Other Acts. Lender may do all such other things and acts with respect to the Property as Lender may deem appropriate and may act exclusively
and solely in the place and stead of Grantor and to have all of the powers of Grantor for the purposes stated above.
No Requirement to Act. Lender shall not be required to do any of the foregoing acts or things, and the fact that Lender shall have performed one
or more of the foregoing acts or things shall not require Lender to do any other specific act or thing.
APPLICATION OF RENTS. All costs and expenses incurred by Lender in connection with the Property shall be for Grantor's account and Lender may
pay such costs and expenses from the Rents. Lender, in its sole discretion, shall determine the application of any and all Rents received by it;
however, any such Rents received by Lender which are not applied to such costs and expenses shall be applied to the Indebtedness. All expenditures
made by Lender under this Assignment and not reimbursed from the Rents shall become a part of the Indebtedness secured by this Assignment, and
shall be payable on demand, with interest at the Note rate from date of expenditure until paid.
FULL PERFORMANCE. If Grantor pays all of the Indebtedness when due and otherwise performs all the obligations imposed upon Grantor under this
Assignment, the Note, and the Related Documents, Lender shall execute and deliver to Grantor a suitable satisfaction of this Assignment and suitable
statements of termination of any financing statement on file evidencing Lender's security interest in the Rents and the Property. Any termination fee
required by law shall be paid by Grantor, if permitted by applicable law.
LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the Property or if Grantor fails
to comply with any provision of this Assignment or any Related Documents, including but not limited to Grantor's failure to discharge or pay when due
AA1R_RRQR_977d 9
ASSIGNMENT OF RENTS
Loan No: (Continued) Page 2
any amounts Grantor is required to discharge or pay under this Assignment or any Related Documents, Lender on Grantor's behalf may (but shall not
be obligated to) take any action that Lender deems appropriate, to the extent permitted by applicable law, including but not limited to discharging or
paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on the Rents or the Property and paying all
costs for insuring, maintaining and preserving the Property. All such expenditures incurred or paid by Lender for such purposes will then bear interest
at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Grantor. All such expenses will become a part
of the Indebtedness and, at Lender's option, will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be
payable with any installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of the
Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturity. The Assignment also will secure payment of these
amounts. Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon Default and shall be exercisable by
Lender to the extent permitted by applicable law.
DEFAULT. Each of the following, at Lender's option, shall constitute an Event of Default under this Assignment:
Payment Default. Grantor fails to make any payment when due under the Indebtedness.
Other Defaults. Grantor fails to comply with or to perform any other term, obligation, covenant or condition contained in this Assignment or in any
of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between
Lender and Grantor.
Default on Other Payments. Failure of Grantor within the time required by this Assignment to make any payment for taxes or insurance, or any
other payment necessary to prevent filing of or to effect discharge of any lien.
False Statements. Any warranty, representation or statement made or furnished to Lender by Grantor or on Grantor's behalf under this
Assignment or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false
or misleading at any time thereafter.
Defective Collateralization. This Assignment or any of the Related Documents ceases to be in full force and effect (including failure of any
collateral document to create a valid and perfected security interest or lien) at any time and for any reason.
Insolvency. The dissolution or termination of Grantor's existence as a going business, the insolvency of Grantor, the appointment of a receiver for
any part of Grantor's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding
under any bankruptcy or insolvency laws by or against Grantor.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self -help,
repossession or any other method, by any creditor of Grantor or by any governmental agency against the Rents or any property securing the
Indebtedness. This includes a garnishment of any of Grantor's accounts, including deposit accounts, with Lender. However, this Event of Default
shall not apply if there is a good faith dispute by Grantor as to the validity or reasonableness of the claim which is the basis of the creditor or
forfeiture proceeding and if Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety
bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for
the dispute.
Property Damage or Loss. The Property is lost, stolen, substantially damaged, sold, or borrowed against.
Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor, endorser, surety, or accommodation party of any
of the Indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity
of, or liability under, any Guaranty of the Indebtedness. In the event of a death, Lender, at its option, may, but shall not be required to, permit the
guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender, and, in doing so, cure
any Event of Default.
Adverse Change. A material adverse change occurs in Grantor's financial condition, or Lender believes the prospect of payment or performance of
the Indebtedness is impaired.
Insecurity. Lender in good faith believes itself insecure.
Cure Provisions. If any default, other than a default in payment is curable and if Grantor has not been given a notice of a breach of the same
provision of this Assignment within the preceding twelve (12) months, it may be cured if Grantor, after receiving written notice from Lender
demanding cure of such default: (1) cures the default within fifteen (15) days; or (2) if the cure requires more than fifteen (15) days, immediately
initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all
reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical.
DISPUTE RESOLUTION. This section contains a jury waiver, arbitration clause, and a class action waiver. READ THIS SECTION
CAREFULLY.
This dispute resolution provision shall supersede and replace any prior "Jury Waiver," "Judicial Reference," "Class Action Waiver," "Arbitration,"
"Dispute Resolution," or similar alternative dispute agreement or provision between or among the parties.
Jury Trial Waiver; CLASS ACTION WAIVER. As permitted by applicable law, each party waives their respective rights to a trial before a fury in
connection with any Dispute (as "Dispute" is hereinafter defined), and Disputes shall be resolved by a judge sitting without a jury If a court determines
that this provision is not enforceable for any reason and at any time prior to trial of the Dispute, but not later than 30 days after entry of the order
determining this provision is unenforceable, any party shall be entitled to move the court for an order compelling arbitration and staying or dismissing
such litigation pending arbitration ( "Arbitration Order'). If permitted by applicable law, each party also waives the right to litigate in court or an
arbitration proceeding any Dispute as a class action either as a member of a class or as a representative or to act as a private attorney general
Arbitration. If a claim, dispute, or controversy arises between us with respect to this Agreement, related agreements, or any other agreement or
business relationship between any of us whether or not related to the subject matter of this Agreement (all of the foregoing, a "Dispute "), and only if a
jury trial waiver is not permitted by applicable law or ruling by a court, any of us may require that the Dispute be resolved by binding arbitration before
a single arbitrator at the request of any party. By agreeing to arbitrate a Dispute each party gives up any right that party may have to a fury trial as
well as other rights that party would have in court that are not available or are more limited in arbitration such as the rights to discovery and to appeal
Arbitration shall be commenced by filing a petition with, and in accordance with the applicable arbitration rules of, JAMS or National Arbitration Forum
('Administrator') as selected by the initiating party. If the parties agree, arbitration may be commenced by appointment of a licensed attorney who is
selected by the parties and who agrees to conduct the arbitration without an Administrator.
Disputes include matters (i) relating to a deposit account, application for or denial of credit, enforcement of any of the obligations we have to each
other, compliance with applicable laws and /or regulations, performance or services provided under any agreement by any party, (ii) based on or
arising from an alleged tort, or (iii) involving either of our employees, agents, affiliates, or assigns of a party. However, Disputes do not include the
validity, enforceability, meaning, or scope of this arbitration provision and such matters may be determined only by a court. If a third party is a party to
a Dispute we each will consent to including the third party in the arbitration proceeding for resolving the Dispute with the third party Venue for the
arbitration proceeding shall be at a location determined by mutual agreement of the parties or, if no agreement, in the city and state where lender or
bank is headquartered.
After entry of an Arbitration Order, the non - moving party shall commence arbitration. The moving party shall, at its discretion, also be entitled to
commence arbitration but is under no obligation to do so, and the moving party shall not in any way be adversely prejudiced by electing not to
commence arbitration. The arbitrator: (i) will hear and rule on appropriate dispositive motions for judgment on the pleadings, for failure to state a
claim, or for full or partial summary judgment; (ii) will render a decision and any award applying applicable law, (iii) will give effect to any limitations
period in determining any Dispute or defense; (iv) shall enforce the doctrines of compulsory counterclaim, res judicata, and collateral estoppel, if
applicable: (v) with regard to motions and the arbitration hearing, shall apply rules of evidence governing civil cases, and (vi) will apply the law of the
state specified in the agreement giving rise to the Dispute. Filing of a petition for arbitration shall not prevent any party from (i) seeking and obtaining
AA1A_r,AQA_r';7A 9
ASSIGNMENT OF RENTS
Loan No: (Continued) Page 3
from a court of competent jurisdiction (notwithstanding ongoing arbitration) provisional or ancillary remedies including but not limited to injunctive relief,
property preservation orders, foreclosure, eviction, attachment, replevin, garnishment, and /or the appointment of a receiver, (ii) pursuing non - judicial
foreclosure, or (iii) availing itself of any self -help remedies such as setoff and repossession. The exercise of such rights shall not constitute a waiver of
the right to submit any Dispute to arbitration.
Judgment upon an arbitration award may be entered in any court having jurisdiction except that, if the arbitration award exceeds $4,000,000, any party
shall be entitled to a de novo appeal of the award before a panel of three arbitrators. To allow for such appeal, if the award (including Administrator,
arbitrator, and attorney's fees and costs) exceeds $4,000,000, the arbitrator will issue a written, reasoned decision supporting the award, including a
statement of authority and its application to the Dispute. A request for de novo appeal must be filed with the arbitrator within 30 days following the
date of the arbitration award; if such a request is not made within that time period, the arbitration decision shall become final and binding. On appeal,
the arbitrators shall review the award de novo, meaning that they shall reach their own findings of fact and conclusions of law rather than deferring in
any manner to the original arbitrator. Appeal of an arbitration award shall be pursuant to the rules of the Administrator or, if the Administrator has no
such rules, then the JAMS arbitration appellate rules shall apply.
Arbitration under this provision concerns a transaction involving interstate commerce and shall be governed by the Federal Arbitration Act, 9 U.S.C. §
1 el seq. This arbitration provision shall survive any termination, amendment, or expiration of this Agreement. If the terns of this provision vary from
the Administrator's rules, this arbitration provision shall control.
Reliance. Each party (i) certifies that no one has represented to such party that the other party would not seek to enforce jury and class action
waivers in the event of suit, and (ii) acknowledges that it and the other party have been induced to enter into this Agreement by, among other things,
the mutual waivers, agreements, and certifications in this section.
RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of any Event of Default and at any time thereafter, Lender may exercise any one or
more of the following rights and remedies, in addition to any other rights or remedies provided by law:
Accelerate Indebtedness. Lender shall have the right at its option without notice to Grantor to declare the entire Indebtedness immediately due
and payable, including any prepayment penalty which Grantor would be required to pay.
Collect Rents. Lender shall have the right, without notice to Grantor, to take possession of the Property and collect the Rents, including amounts
past due and unpaid, and apply the net proceeds, over and above Lender's costs, against the Indebtedness. In furtherance of this right, Lender
shall have all the rights provided for in the Lender's Right to Receive and Collect Rents Section, above. If the Rents are collected by Lender, then
Grantor irrevocably designates Lender as Grantor's attorney -in -fact to endorse instruments received in payment thereof in the name of Grantor and
to negotiate the same and collect the proceeds. Payments by tenants or other users to Lender in response to Lender's demand shall satisfy the
obligations for which the payments are made, whether or not any proper grounds for the demand existed. Lender may exercise its rights under this
subparagraph either in person, by agent, or through a receiver.
Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Property, with the power to
protect and preserve the Property, to operate the Property preceding foreclosure or sale, and to collect the Rents from the Property and apply the
proceeds, over and above the cost of the receivership, against the Indebtedness. The receiver may serve without bond if permitted by law.
Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the Indebtedness by a
substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver.
Other Remedies. Lender shall have all other rights and remedies provided in this Assignment or the Note or by law.
Election of Remedies. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make
expenditures or to take action to perform an obligation of Grantor under this Assignment, after Grantor's failure to perform, shall not affect Lender's
right to declare a default and exercise its remedies.
Attorneys' Fees; Expenses. If Lender institutes any suit or action to enforce any of the terms of this Assignment, Lender shall be entitled to
recover such sum as the court may adjudge reasonable as attorneys' fees at trial and upon any appeal. Whether or not any court action is involved,
and to the extent not prohibited by law, all reasonable expenses Lender incurs that in Lender's opinion are necessary at any time for the protection
of its interest or the enforcement of its rights shall become a part of the Indebtedness payable on demand and shall bear Interest at the Note rate
from the date of the expenditure until repaid. Expenses covered by this paragraph include, without limitation, however subject to any limits under
applicable law, Lender's attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit, including attorneys' fees and expenses for
bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post - judgment
collection services, the cost of searching records, obtaining title reports (including foreclosure reports), surveyors' reports, and appraisal fees, title
insurance, and fees for the Trustee, to the extent permitted by applicable law. However, Grantor will only pay attorneys' fees of an attorney not
Lender's salaried employee, to whom the matter is referred after Grantor's default. Grantor also will pay any court costs, in addition to all other
sums provided by law.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Assignment:
Amendments. This Assignment, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the
matters set forth in this Assignment. No alteration of or amendment to this Assignment shall be effective unless given in writing and signed by the
party or parties sought to be charged or bound by the alteration or amendment.
Caption Headings. Caption headings in this Assignment are for convenience purposes only and are not to be used to interpret or define the
provisions of this Assignment.
Governing Law. This Assignment will be governed by federal law applicable to Lender and, to the extent not preempted by federal law,
the laws of the State of Arizona without regard to its conflicts of law provisions. This Assignment has been accepted by Lender in the
State of Arizona.
Merger. There shall be no merger of the interest or estate created by this assignment with any other interest or estate in the Property at any time
held by or for the benefit of Lender in any capacity, without the written consent of Lender.
Interpretation. (1) In all cases where there is more than one Borrower or Grantor, then all words used in this Assignment in the singular shall be
deemed to have been used in the plural where the context and construction so require. (2) If more than one person signs this Assignment as
"Grantor," the obligations of each Grantor are joint and several. This means that if Lender brings a lawsuit, Lender may sue any one or more of the
Grantors. If Borrower and Grantor are not the same person, Lender need not sue Borrower first, and that Borrower need not be joined in any
lawsuit. (3) The names given to paragraphs or sections in this Assignment are for convenience purposes only. They are not to be used to interpret
or define the provisions of this Assignment.
No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Assignment unless such waiver is given in writing and
signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A
waiver by Lender of a provision of this Assignment shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance
with that provision or any other provision of this Assignment. No prior waiver by Lender, nor any course of dealing between Lender and Grantor,
shall constitute a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions. Whenever the consent of Lender is
required under this Assignment, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent
instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender.
Notices. Any notice required to be given under this Assignment shall be given in writing, and shall be effective when actually delivered, when
actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed,
when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the
beginning of this Assignment. Any party may change its address for notices under this Assignment by giving formal written notice to the other
parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Grantor agrees to keep Lender informed at
all times of Grantor's current address. Unless otherwise provided or required by law, if there is more than one Grantor, any notice given by Lender
to any Grantor is deemed to be notice given to all Grantors.
4R1 R- RRQR_R'17d
ASSIGNMENT OF RENTS
Loan No: (Continued) Page 4
Powers of Attorney. The various agencies and powers of attorney conveyed on Lender under this Assignment are granted for purposes of
security and may not be revoked by Grantor until such time as the same are renounced by Lender.
Severability. If a court of competent jurisdiction finds any provision of this Assignment to be illegal, invalid, or unenforceable as to any
circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible, the
offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so modified, it
shall be considered deleted from this Assignment. Unless otherwise required by law, the illegality, invalidity, or unenforceability of any provision of
this Assignment shall not affect the legality, validity or enforceability of any other provision of this Assignment.
Successors and Assigns. Subject to any limitations stated in this Assignment on transfer of Grantor's interest, this Assignment shall be binding
upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Property becomes vested in a person other than
Grantor, Lender, without notice to Grantor, may deal with Grantor's successors with reference to this Assignment and the Indebtedness by way of
forbearance or extension without releasing Grantor from the obligations of this Assignment or liability under the Indebtedness.
Time is of the Essence. Time is of the essence in the performance of this Assignment.
WAIVER OF HOMESTEAD EXEMPTION. Grantor hereby releases and waives all rights and benefits of the homestead exemption laws of the State of
Arizona as to all Indebtedness secured by this Assignment.
WAIVER OF RIGHT OF REDEMPTION. NOTWITHSTANDING ANY OF THE PROVISIONS TO THE CONTRARY CONTAINED IN THIS
ASSIGNMENT, GRANTOR HEREBY WAIVES ANY AND ALL RIGHTS OF REDEMPTION FROM SALE UNDER ANY ORDER OR JUDGMENT OF
FORECLOSURE ON GRANTOR'S BEHALF AND ON BEHALF OF EACH AND EVERY PERSON, EXCEPT JUDGMENT CREDITORS OF
GRANTOR, ACQUIRING ANY INTEREST IN OR TITLE TO THE PROPERTY SUBSEQUENT TO THE DATE OF THIS ASSIGNMENT.
DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Assignment. Unless specifically stated
to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the
singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this
Assignment shall have the meanings attributed to such terms in the Uniform Commercial Code:
Assignment. The word "Assignment" means this ASSIGNMENT OF RENTS, as this ASSIGNMENT OF RENTS may be amended or modified from
time to time, together with all exhibits and schedules attached to this ASSIGNMENT OF RENTS from time to time.
Borrower. The word "Borrower" means MOHAVE COUNTY AIRPORT AUTHORITY, INC..
Default. The word "Default" means the Default set forth in this Assignment in the section titled "Default ".
Event of Default. The words "Event of Default" mean any of the events of default set forth in this Assignment in the default section of this
Assignment.
Grantor. The word "Grantor" means MOHAVE COUNTY AIRPORT AUTHORITY, INC..
Guaranty. The word "Guaranty" means the guaranty from guarantor, endorser, surety, or accommodation party to Lender, including without
limitation a guaranty of all or part of the Note.
Indebtedness. The word "Indebtedness" means all principal, interest, and other amounts, costs and expenses payable under the Note or Related
Documents, together with all renewals of, extensions of, modifications of, consolidations of and substitutions for the Note or Related Documents and
any amounts expended or advanced by Lender to discharge Grantor's obligations or expenses incurred by Lender to enforce Grantor's obligations
under this Assignment, together with interest on such amounts as provided in this Assignment. Specifically, without limitation, Indebtedness
includes the future advances set forth in the Future Advances provision of this Assignment, together with all interest thereon.
Lender. The word "Lender" means NATIONAL BANK OF ARIZONA, its successors and assigns.
Note. The word "Note" means the promissory note dated June_, 2010, in the original principal amount of $2,899,251.00 from Grantor to Lender,
together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the promissory note or
agreement.
Property. The word "Property" means all of Grantor's right, title and interest in and to all the Property as described in the "Assignment" section of
this Assignment.
Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental
agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments,
agreements and documents, whether now or hereafter existing, executed in connection with the Indebtedness.
Rents. The word "Rents" means all of Grantor's present and future rights, title and interest in, to and under any and all present and future leases,
including, without limitation, all rents, revenue, income, issues, royalties, bonuses, accounts receivable, cash or security deposits, advance rentals,
profits and proceeds from the Property, and other payments and benefits derived or to be derived from such leases of every kind and nature,
whether due now or later, including without limitation Grantor's right to enforce such leases and to receive and collect payment and proceeds
thereunder.
THE UNDERSIGNED ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS ASSIGNMENT, AND NOT PERSONALLY BUT AS AN
AUTHORIZED SIGNER, HAS CAUSED THIS ASSIGNMENT TO BE SIGNED AND EXECUTED ON BEHALF OF GRANTOR ON JUNE _, 2010.
GRANTOR:
MOHAVE COUNTY AIRPORT AUTHORITY, INC.
By:
Name:
Title:
AR1R_9RQR_R'174 9