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SUMMARY 

The recommended landside development alternatives are presented in Exhibit 4.9 and 

recommended airside development alternatives are presented in Exhibit 4.10. The 

process utilized in assessing the airside and landside development alternatives involved 

a detailed analysis of short and long term requirements as well as future growth 

potential. Current and future airport and aircraft design standards were considered at 

every stage of development. Safety both in the air and on the ground was given a high 

priority in the development and analysis of alternatives. Important considerations of 

local political influences and surrounding community interests were also applied to the 

development and analysis of alternatives. 

After review and input from the Planning Advisory Committee, City officials, public and 

other Airport stakeholders, an Airport development plan concept will be developed. The 

resultant plan will represent airside and landside facilities that fulfill safety design 

standards while addressing future demands to the greatest extent possible. The 

development plan for Chandler Municipal Airport must represent a means by which the 

Airport can evolve in a balanced manner with the rest of the community and 

accommodate the forecasted demand. In addition, the plan must provide for flexibility to 

meet activity growth beyond the long range planning horizon. 

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EXHIBIT 3
CITY OF CHANDLER

AmPORTLEASECONTRACT

NO. 015

1. PARTIES. This Airport Lease Contract (this "Lease"), dated MaTch 1, 2012 (the

"Effective Date"), is made by and between the CITY OF CHANDLER, an Arizona municipal

corporation ("Landlord"), and CHANDLER AIR SERVICE, INC., an Arizona corporation

("Tenant"). Landlord and Tenant may be referred to in this Lease as a "Party" or collectively as

the "Parties.'l

2. RECITALS. As background to this Lease, the Parties agree, acknowledge and recite as

follows, each ofwhich shall be deemed a material term and provision ofthis Lease:

2.1. Landlord owns and operates a municipal airport known as Chandler Municipal

Airport (the "Airport"), a portion of which has been made available for use by tenants for

conduct of commercial aviation activity as either a .fixed base operator ("FBO") or as a

specialized aviation serrice operator ("SASO").

2.2. In 1983, Tenant leased in writing from Landlord a parcel of the Airport property

for use in conducting commercial aviation activity, which lease has from time to time been

amended pursuant to mutual agreement ofthe Parties, and which is identified herein as "Airport

Lease Contract 001,"

2.3. In 1987, Tenant leased in writing from Landlord a second parcel of the Airport

property for use in conducting commercial aviation activity, which lease has from time to time

been amended pursuant to mutual agreement of the Parties, and which is identified herein as

"Airport Lease Contract 004."

2.4. The original term of each ofthe aforementioned leases is set to expire on May 31,

2012, unless Tenant exercises its option to renew each ofthe leases for an additional ten years.

2.5. In lieu of exercising the renewal option for each of the leases, Landlord and

Tenant desire to enter into this Lease, which covers the parcels leased under Airport Lease

Contract 001 and Airport Lease Contract 004, together with an additional parcel of Airport

property, all ofwhich are part ofthe "Premises" described in Paragraph 3.1 below.

2.6. It is the intention of the Parties that this Lease, as of its Effective Date, shall

supersede, nullifY, void, and automatically constitute the mutual termination of both Airport

Lease Contract 001 and Airport Lease Contract 004.

3. LEASE OF PREMISES.

3.1. PREMISES. Landlord leases to Tenant and Tenant leases from Landlord for the

term of this Lease, at the rental, and upon all of the covenants and conditions set forth herein,

that certain real property located in Maricopa County, Arizona, and legally described in attached

Exhibit "A", which consists of four (4) contiguous land parcels comprising a total of

approximately five (5) acres or 220,053 square feet gross more or less, together with the

improvements presently situated on the described real property, or to be constructed on the

Page I of36
described real property by Tenant in accordance with the tenns and provisions ofthis Lease (the

"Premises"), and together with certain additional rights to use and access of the Public Airport

Facilities (defined below) set forth in Paragraph 3.2 ofthis Lease. The location ofthe Premises

and the portion of the Public Airport Facilities immediately adjacent to the Premises are

conceptually shown in attached Exhibit "B".

3.2. AIRPORT ACCESS RIGHTS. During the telm of this Lease, Tenant shall have

the following additional rights, each of which is non-exclusive, and each of which is subject to all

applicable laws, ordinances, rules and regulations, including, but not limited to, the Chandler

Municipal AirpOlt Rules and Regulations, 2006, adopted and approved by the Chandler City

Council on July 24, 2006, and any subsequent amendments thereto (the "Airport Rules"):

(a) A non-exclusive right to use ofthe Public Airport Facilities. As used in this

Lease, the tenn "Public AirpOlt Facilities" means (i) the Airport landside areas; (ii) the Airport

airside facilities operated and maintained by Landlord for public use, including, but not limited to,

the landing areas, approach areas, runways, taxiways, aprons, aircraft parking areas, navigational

and avigational aids, lighting facilities; and (iii) other areas of the AirpOlt that may be made

available to the public by the Airport Administrator (fonnerly the Airport Manager);

(b) A non-exclusive right of access to and from the Premises over and across

the landside roadways serving the Airport, which shall be available for use by Tenant, and

Tenant's agents, servants, patrons, and invitees; and

(c) A non-exclusive right to enter upon and exit the airside ofthe Airport from

the Premises to conduct any commercial aviation activity that is a pennitted use under this Lease.

As used in Paragraph 2.1, this Paragraph 3.2 or elsewhere in this Lease, the terms "airside",

"Airport Manager", "commercial aviation activity", "fixed base operator", "landside", and

"specialized aviation service operator" have the same meanings as set out in the Airport Rules.

3.3. ACCEPTANCE OF PREMISES. Tenant acknowledges that the Premises, the

title to the Premises, any parking, drive and walk areas adjoining the Premises (including but not

limited to any adjacent airside facilities), the environmental condition of the Premises and any

subsurface conditions thereof, and the permitted and prohibited uses ofthe Premise, have been

examined by Tenant and that Tenant accepts the same in the condition or state in which they or

any of them may be on the Effective Date of this Lease, without representation or warranty,

express or implied in fact or by law, by Landlord and without recourse to Landlord, as to the

nature, condition, or usability thereof or the use or uses to which the Premises or any part thereof

may be put. Tenant agrees to make any changes in the Premises reasonably needed to conform

to any federal, state or local law applicable to the Tenant's use ofthe Premises.

4. REMOVAL AND CONSTRUCTION OF IMPROVEMENTS.

4.1. EXISTING IMPROVEMENTS. The improvements existing on the Premises at

the Effective Date of this Lease include, without limitation, the following: an existing, original

office building with attached hangar at approximately 4,700 square feet, large hangar with

current maintenance operations at approximately 14,200 square feet and fuel service station.

Their location on the Premises is generally depicted in attached Exhibit "B".

Page 2 of36
4.2. COMPLETION OF PROJECT. Tenant covenants and agrees that, within five (5)

years from the Effective Date ofthis Lease, Tenant, at Tenant's expense, shall fully complete a

construction project (the "Project") that includes: the alteration and renovation of existing

improvements on the Premises, including, without limitation, the demolition and removal of

existing office and hangar building located at the north side ofthe Premises; and the construction

of a new, 15,000 square foot building and appurtenant improvements suitable for FBO and other

commercial aviation uses as described in Article 13 of the Airport Rules (the "Project Work").

The Project Work shall be done in accordance with plans and specifications approved by

Landlord in its reasonable discretion. Tenant will also obtain the approval ofthe final plans and

specifications by any and all federal, state, municipal and other governmental authorities, offices

and departments having jurisdiction in the matter and provide confOimed copies of executed

approvals to Landlord. The execution of this Lease by Landlord does not, and shall not be

deemed to, constitute approval by the City ofChandler ofsuch plans and specifications.

(a) The Project Work shall be deemed fully completed when a final certificate

of occupancy is issued for the new building by the Transportation and Development Department

of the City of Chandler (or such other department of the City, however denominated, that is

responsible for issuing building permits and providing certificates of occupancy).

(b) Tenant will perform all of the Project Work, including without limitation

all demolition of existing improvements and construction of new improvements, in a good,

careful, proper, and workmanlilce manner in accordance with the approved plans and

specifications; all provisions oflaw and any and all permits and authority required by ordinance,

code, law, or public regulations or by any authority at any time having jurisdiction over the

Premises; and the requirements of any public or quasi-public body having similar jurisdiction.

(c) Landlord will be an additional insured on all liability insurance policies

maintained by Tenant and its contractor(s) during the performance of all ofthe Project Work.

(d) Tenant shall diligently proceed to fully complete all of the Project Work

within the five (5) year period stated in the first paragraph ofthis Paragraph 4.2. If Tenant fails

to fully complete the Project Work within the five (5) year period, the term ofthis Lease shall be

shortened in accordance with Paragraph 5.2 below.

4.3. SURETY BONDS. Prior to commencing the Project Work, and continuing

during the entire period of the Project, Tenant shall provide Landlord with a performance bond

and a payment bond as follows:

(a) The performance bond shall be in an amount equal to the total cost ofthe

Project. The condition ofsaid bond shall be such that Tenant shall faithfully perform all ofthe

Project Work in accordance with the approved plans and specifications. Such bond shall be

solely for the protection ofLandlord.

(b) TIle payment bond shall be in an amount equal to the total cost of the

Project, including without limitation the demolition and removal of existing structures and

construction of new improvements. The condition of said bond shall be such that Tenant shall

promptly payor cause to be paid all monies due to all persons supplying labor and materials in the

performing the Project Work.

Page 3 of36
(c) Each bond shall be executed solely by a surety company or companies

holding a certificate of authority to transact surety business in the State of Arizona issued by the

director of the Arizona Department of Insurance pursuant to Title 2, Chapter 2, Article I ofthe

Arizona Revised Statutes, and no such bond shall be executed by an individual surety or sureties.

(d) Each bond shall include a provision allowing the prevailing party in a suit

on such bond to recover as a part of the judgment such reasonable attorney's fees as may be fixed

by a court of competent jurisdiction.

(e) In the event that Tenant's lender, if any, requires such bonds, the bond

requirements herein shall be satisfied ifthe bonds required by the lender meet the conditions of

Paragraphs 4.3(a), (b), and (c), provided Landlord shall be named as a dual obligee or co-obligee

under such bonds.

4.4. TITLE TO IMPROVEMENTS. Title to the improvements on the Premises shall

be as follows:

(a) Pursuant to the terms and conditions of Airport Lease Contract 001 and

Airport Lease Contract 004, title to any buildings, structures or other improvements on the

premises described in each lease passes to Landlord upon the expiration, termination or earlier

cancellation of the lease. Notwithstanding those provisions, the Parties to this Lease mutually

agree that title to any buildings, structures or other improvements existing on the Premises

described herein at the Effective Date ofthis Lease, and as generally referenced in Paragraph 4.1,

shall remain in Tenant. Except for movable property and trade fixtures of Tenant not

permanently affixed to the Premises, title to all such existing buildings, structures or other

improvements shall automatically pass to Landlord upon the expiration, termination, or earlier

cancellation ofthis Lease as provided herein.

(b) Title to any new buildings, structures or other improvements constructed

on the Premises by Tenant after the Effective Date ofthis Lease, including without limitation all

such buildings, structures or improvements constructed as part of the Project, shall remain in

Tenant. Except for movable property and trade fixtures ofTenant not pennanently affixed to the

Premises, title to any such new buildings, structures or other improvements, whether or not

constructed as part ofthe Project or the Project Work, shall automatically pass to Landlord upon

the expiration, termination, or earlier cancellation ofthis Lease as provided herein.

(c) Notwithstanding Paragraphs 4.4(a) and 4.4(b), Tenant agrees to execute,

acknowledge and deliver to Landlord, at or prior to the expiration, termination, or earlier

cancellation of this Lease, a proper recordable instrument prepared by Landlord quit claiming

and releasing to Landlord any right, title and interest ofTenant in and to the Premises and any of

the improvements located thereon.

5. TERM.

5.1. THIRTY-YEAR TERM. The term of this Lease (the "Term") shall be for a

period of thirty (30) years, commencing on the Effective Date and ending on the last day of

February, 2042, unless this Lease is sooner terminated as hereinafter provided. From and after

the 2Sd' anniversary of the Effective Date of this Lease, but no later than the lease termination

date, Tenant may submit a written request to Landlord to open discussions relating to a ten-year

Page 4 of36
lease extension under terms and conditions that are mutually beneficial and agreed upon by both

Tenant and Landlord. The terms and conditions ofthe lease extension will be detailed at the time

ofthe discussions and memorialized as an amendment to this Lease. Should an agreement on the

extension acceptable to both Parties not be reached. then this Lease shall temlinate as ofthe lease

termination date.

5.2. SHORTENED TERM. Notwithstanding Paragraph 5.1 above, if Tenant fails to

complete the Project Work within the five (5) year period stated in Paragraph 4.2, the Term of

this Lease shall be shotiened automatically and without futiher notice to a period of fifteen (15)

years cOlmnencing on the Effective Date.

6. RENT.

6.1. RENT PAYMENTS. Rent payments for the Premises shall commence on the

Effective Date ofthis Lease. All rent payments that are received by Landlord from Tenant shall

be applied first toward any accrued late payment charges or interest, then to any other charges or

fees stated in this Lease that may be due and owing, then to any back rent due and not yet paid,

and then to the current rent.

6.2. MONTHLY BASE RENTAL. During the first year ofthe Teffil, Tenant shall pay

to Landlord a monthly base rental of $3850.93 (the "Monthly Base Rent"), which is based on an

annual lease rate of $0.21 per square foot per year times 220,053 square feet divided by 12. On

each one (1) year anniversary ofthe Effective Date, the Monthly Base Rent shall be increased in

accordance with the provisions of Paragraph 6.3. When rent payments commence, the Monthly

Base Rent due hereunder shall be payable in advance to Landlord on or before the first day of each

month during the Teffil at the address stated herein or to such other persons or at such other places

as Landlord may designate in writing and shall be paid in lawful money of the United States of

America. The Monthly Base Rent for any period during the Teffil which is for less than one month

shall be a pro rata portion ofthe monthly instalhnent.

6.3. MONTHLY BASE RENT INCREASE. Commencing on March 1,2013, said date

being the first one (I) year anniversary ofthe Effective Date, and on each subsequent one (l) year

anniversary thereafter, the Monthly Base Rent shall be adjusted in accordance with this paragraph.

The rent increase shall be deteffilined by multiplying the current annual rent by the annual percent

change in the Consumer Price Index for all Urban Consumers (CPI-U), as reflected in the U.S.

Western Region Average CPI-U for Allltems (Base period 1982-1984), for the month which is

two (2) months prior to the month of the anniversary of the Effective Date ("the Adjustment

Month") of the current lease year fi'om the CPI-U for the Adjustment Month ofthe prior year, as

those index figures are determined by the United States Department of Labor, Bureau of Labor

Statistics. Ifthere is no such CPI-U figure for the Adjustment Month of any year ofthe Term, then

the Adjustment Month figure ofthe successor or most nearly comparable successor Index shall be

used.

(a) The calculation ofthe annual rent increase shall be as follows:

(l) Deteffiline the current annual rent by multiplying the current

monthly rent by 12.

Page 5 of36
(2) Detemline the CPI-U index point change by subtracting the previous

year's CPI-U index figure for the Adjustment Month fi:om the current year's

CPI-U index figure for the Adjustment Month.

(3) Detennine the CPI-U annual percent change by dividing the index

point change by the previous year's CPI-U index figure for the Adjustment

Month. This quotient can be expressed as a percentage by multiplying by

100.

(4) Deten11ine the additional annual rent by multiplying the current

annual rent by the annual percent change.

(5) Determine the new annual rent by adding the additional annual rent

to the current annual rent.

(6) Deten11ine the new monthly rent by dividing the new annual rent by

12.

(b) By way of example only, the following is shown for deten11ining the annual

percentage change:

CPI-U for current period

Less CPI-U for previous period

Equals Index Point Change

Divided by previous period CPI-U

Equals

Result multiplied by 100

Equals percent change

133.0

130.0

3.0

130.0

0.023

0.023 x

2.3 %

100

(c) In no event shall the minimum Monthly Base Rent for any year during the

TelID be less than the minimum Monthly Base Rent for the immediately preceding year.

6.4. AIRCRAFT PARKING CHARGES. IfTenant reserves from Landlord any aircraft

tie downs that are on the Public Airport Facilities and not on the Premises, Tenant may opt to pay

the monthly rate charged by Landlord for use ofthe tie downs as additional monthly rent under this

Lease (the "Additional Monthly Rent"). Payment of the Additional Monthly Rent is due and

payable at the same as the Monthly Base Rent and shall accompany the Monthly Base Rent

payment made by Tenant to Landlord. The Additional Monthly Rent shall be the monthly rate

charged by Landlord for use of aircraft tie downs on the Public Airport Facilities tin1es the mnnber

oftie downs reserved by Tenant. The Additional Monthly Rent shall be adjusted from tin1e to tin1e

to coincide with any change in the rate charged by Landlord to the public for use of tie downs

owned and maintained by Landlord as part ofthe Public Airport Facilities.

6.5. ADDITIONAL RENT. Any other monetary obligation of Tenant to Landlord

under the terms of this Lease shall be deemed rent and payment thereof shall accompany the next

Monthly Base Rent payment made by Tenant to Landlord.

Page 6 of36
6.6. LATE PAYMENT INTEREST. If Landlord does not receive the monthly rent by

the tenth (10th) ofthe month, then in addition to the overdue rent, Tenant shall pay interest on the

rent payment then due at the rate often percent (10%) per annum. Such interest commences on the

date the rent is due and aCClUes until such rent is paid. If Tenant does not pay the rent when due

and interest is incurred each month for three (3) consecutive months, then, beginning on the first

(1st) day ofthe fomih (4tl') consecutive month, all further rent called for herein shall automatically

become due and payable quarterly in advance rather than monthly, notwithstanding any other

provision in this Lease to the contrary, and regardless of whether or not the interest is paid or

collected. The imposition of such interest, or the conversion to quarterly payments, does not

prevent Landlord fi'om exercising any other rights and remedies under this Lease, including the

early termination ofthis Lease.

6.7. NET RENT. It is the intention of the Parties that the rent specified in the Lease

shall be net to Landlord in each year during the Tel'll} of this Lease. Accordingly, all costs,

expenses and obligations of every kind relating to the Premises (except as otherwise, specifically

provided in this Lease) that may arise or become due during the tenn ofthis Lease shall be paid by

Tenant, and Tenant shall indemnify Landlord against such costs, expenses and obligations.

However, the rent to be paid under this Lease is in addition to, and not in lieu of, any requirement

to pay any charges or fees that may be established pursuant to the Airport Rules and any applicable

license or pelmit fees required pursuantto the Chandler City Code andlor the Airport Rules.

7. USE OF PREMISES.

7.1. PERMlTTED USES. Subject to Paragraph 7.3 below, Tenant shall use the

Premises only for those commercial aviation activities listed below and for no other purpose

without the written consent of Landlord, which may be withheld in Landlord's sale discretion.

Tenant shall only use the Premises for said commercial aviation activities during such period that

Tenant holds an applicable license or permit required by the Chandler City Code and/or the Airport

Rules to conduct such commercial aviation activities at the Airport. The Premises shall be used

only for lawful purposes, and only in accordance with applicable building, fire and zoning codes.

In using the Premises for commercial aviation activities, Tenant shall do so after qualifying either

as a Fixed Based Operator (FBO) or a Specialized Aviation Services Operator (SASO), as those

terms are defmed and described in the Airport Rules. The Airport Administrator is designated as

Landlord's representative in giving consent for Tenant to engage in other commercial aviation

activities applicable to an FBO or SASO, as the case may be, in lieu of or in addition to those

activities listed below. Any such consent from the Airport Administrator shall be in writing, shall

be affixed to this Lease, and may be given or withheld in the Airport Administrator's sole

discretion.

Pennitted commercial aviation activities include:

(a) Each of the following services: aircraft fueling; aircraft line services;

aircraft storage; and customary services to general aviation users, such as public restrooms, waiting

lounges, conference rooms, crew lounges and flight planning; and

(b) At least three (3) of the following services: hangar/shade leasing; aircraft

sales services; aircraft maintenance and repair services; aircraft leasing or rental services; flight

Page 7 of36
training; specialized aircraft repair services and sales; aircraft charter services; specialized

commercial flying services and aircraft management services.

7.2. PROHIBITED USES. The following activities are specifically excluded and

prohibited unless prior written approval has been granted by the Airport Administrator:

(a) Ground transportation for hire.

(b) Providing space, including tie-down areas, for other than Tenant's own

customers whose aircraft is being serviced.

(c) Sale ofinsurance other than aviation and aviation trip insurance.

(d) Auto rental agency or service; however, this prohibition does not prohibit

the Tenant operation, as a company function, fi'om assisting its customers in making appropriate

arrangements with a duly licensed auto rental agency authorized by the Landlord to do business on

the Airport.

(e) Advertising concession (posters, privileges, publications, and other media).

(f) Food sales, except through coin-operated vending machines as provided in

Paragraph 7.4, and except as allowed under Paragraph 7.3 below.

(g)

Paragraph 7. I.

(h)

(i)

News and sundry sales not associated with the primary services listed in

Barber, valet, and personal services.

Sale ofautomotive fuel, lubricants, and propellants.

G) Storage ofsurplus (inoperable) aircraft except in areas, and of a number, to

be designated by the Airport Administrator.

(k) Retail sale ofnon-aviation products.

(I) Sale of aviation fuels and lubricants except in the ordinary course of

Tenant's business permitted pursuant to Paragraph 7.1.

7.3. RESTAURANT SUBLEASED. In recognition ofthe existing restaurant facility

on the Premises, which is operated by an existing subtenant of Tenant, the Parties agree that the

existing restaurant facility may continue to be operated by the subtenant of Tenant during the

Term of this Lease provided, however, that: (a) the sublease is in writing; (b) the terms and

conditions ofthe sublease are not in conflict with the terms and conditions of this Lease and are

expressly made subject to this Lease; and (c) a copy of the sublease has been received and

deemed acceptable by Landlord. No expansion of the restaurant use or floor area and no

alteration of the exterior of the existing restaurant facility shall be permitted unless written

approval is first obtained by Tenant or its subtenant from Landlord.

Page 8 of36
7.4. VENDING MACHlNES. Tenant shall be limited to one each of soft drink,

candy, coffee, and food vending machines to be located on each floor within each building on the

Premises and for the exclusive use of Tenant's employees and customers.

7.5. SIGNS. All signs installed by Tenant shall conform to the requirements of

applicable provisions ofthe Chandler City Code, including, but not limited to, the Sign Code and

the Zoning Code.

7.6. COMPLIANCE WITH APPLICABLE LAWS. Tenant shall observe and comply

with all applicable laws, ordinances, rules, and regulations of the United States of America, the

State of Arizona, the County of Maricopa, and the City of Chandler and all agencies thereof, that

are now in effect or hereafter promulgated; and further, Tenant will display to Landlord any and all

permits, licenses or other evidence of compliance with all laws upon request ofLandlord.

7.7. HAZARDOUS MATERIAL.

(a) As used herein, "Hazardous Material" shall mean any chemical, substance,

material, waste or similar matter defined, classified, listed or designated as hamlful, hazardous,

extremely hazardous, dangerous, toxic or radioactive, or as a contaminant or pollutant, or other

similar term, by, and/or which are subject to regulation under, any federal, state or local

environmental statute, regulation or ordinance presently in effect or that may be promulgated in

the future, and as they may be amended from tin1e to time.

(b) Except for Hazardous Material normally used in Tenant's business in

quantities customary for Tenant's business which shall be stored and used in accordance with

applicable laws and regulations and manufacturer's requirements, Tenant agrees not to introduce

any Hazardous Material in, on or adjacent to the Premises or in, on or adjacent to any portion of

the Airport without (i) obtaining Landlord's prior written approval, (ii) providing Landlord with

thirty (30) days prior written notice of the exact amount, nature, and manner of intended use of

such Hazardous Material, and (iii) complying with all applicable federal, state, and local laws,

rules, regulations, policies and authorities relating to the storage, use, disposal and clean-up of

Hazardous Material, including, but not limited to, the obtaining of all proper permits.

(c) Tenant shall immediately notify Landlord of any inquiry, test,

investigation, or enforcement proceeding by, against or directed at Tenant or the Premises

concerning a Hazardous Material. Tenant acknowledges that Landlord, as the owner of the

Premises, shall have the right, at its election, in its own name or as Tenant's agent, to negotiate,

defend, approve, and appeal, any action taken or order issued with regard to a Hazardous

Material by any applicable governmental authority, and such negotiation, defense, approval and

appeal shall be at Tenant's expense to the extent the contamination was caused by Tenant or

Tenants' agents, or occurred during the Lease Term.

(d) If Tenant's storage, use or disposal of any Hazardous Material in, on or

adjacent to the Premises or the Airport results in any contamination ofthe Premises, the Airport,

the soil, surface or groundwater thereunder, or the air above and around the Premises and the

Airport, that (i) requires remediation under federal, state or local statutes, ordinances, regulations

or policies or (Ii) is at levels which are unacceptable to Landlord, in Landlord's sole and absolute

discretion, Tenant agrees to clean-up the contamination immediately, at Tenant's sole cost and

expense. Tenant further agrees to indemnify, defend and hold Landlord hannless from and

Page 9 of36
against any claims, suits, causes of action, costs, damages, loss and fees, including attorneys'

fees and costs, arising out of or in connection with: (i) any clean-up work, inquiry or

enforcement proceeding relating to Hazardous Material currently or hereafter used, stored or

disposed by Tenant or its agents, employees, contractors, or invitees on or about the Premises or

the Airport; and (ii) the use, storage, disposal or release by Tenant or its agents, employees,

contractors, or invitees of any Hazardous Material on or about the Premises or the Airport.

(e) Notwithstanding any other right of entry granted to Landlord under this

Lease, Landlord shall have the right to enter the Premises or to have consultants enter the

Premises at reasonable times throughout the Term of this Lease for the purpose of determining:

(i) whether the Premises is in conformity with federal, state and local statutes, regulations,

ordinances, and policies, including those pertaining to the environmental condition of the

Premises; (ii) whether Tenant has complied with this Paragraph 7.7; and (iii) the corrective

measures, if any, required of Tenant to ensure the safe use, storage and disposal of Hazardous

Material. Tenant agrees to provide access and reasonable assistance for such inspections. Such

inspections may include, but are not limited to, entering the Premises with machinery for the

purpose of obtaining laboratory samples. Landlord shall not be limited in the number of such

inspections during the Term. If, during such inspections, it is found that Tenant's use of

Hazardous Material constitutes a violation ofthis Lease, Tenant shall reimburse Landlord for the

cost of such inspections within ten (10) days of receipt of a written statement therefor. If such

consultants determine that the Premises is contaminated with Hazardous Material or in violation

of any applicable environmental law and the same was caused by Tenant or Tenant's agents,

Tenant shall, in a timely manner, at its expense, remove such Hazardous Material or otherwise

comply with the recommendations ofsuch consultants to the reasonable satisfaction ofLandlord

and any applicable governmental agencies. If Tenant fails to do so, Landlord, at its sole

discretion, may, in addition to all other remedies available to Landlord under this Lease and at

law and in equity, cause the violation and/or contamination to be remedied at Tenant's sole cost

and expense. The right granted to Landlord herein to inspect the Premises shall not create a duty

on Landlord's part to inspect the Premises, or liability of Landlord for Tenant's use, storage or

disposal ofHazardous Material, it being understood that Tenant shall be solely responsible for all

liability in connection therewith.

(1) Tenant shall surrender the Premises to Landlord upon the expiration or

earlier termination of this Lease free of Hazardous Material placed thereon by Tenant or

Tenants' agents, and in a condition which complies with all governmental statutes, ordinances,

regulations and policies, recommendations of consultants hired by Landlord, and such other

reasonable requirements as may be imposed by Landlord.

(g) Tenant's obligations under this Paragraph 7.7 and all indemnification

obligations of Tenant under this Lease shall survive the expiration or earlier termination of this

Lease.

8. TENANT'S CONDUCT OF BUSINESS. In conducting commercial aviation activities

on the Premises or at the Airport, Tenant shall act as follows:

8.1. NONDISCRIMINATION. Tenant agrees that:

(a) In the operations to be conducted pursuant to the provisions of this Lease

and otherwise in the use ofthe Airport, Tenant will not discriminate or pel111it discrimination against

Page 10 of36
any person or class of persons by reason of race, color, creed, or national origin in any manner

prohibited by any ofthe FAA Regulations or any amendments thereto.

(b) Tenant shall furnish its accommodations and/or services on a fair, equal and

not unjustly discriminatory basis to all users thereof and it shall charge, fair, reasonable and not

unjustly discriminatory prices for each unit of service; provided, that Tenant may make reasonable

and non-discriminatory discounts, rebates or other similar type of price reductions to volume

purchasers.

(c) Tenant shall make its accommodations and/or services available to the

public on fair and reasonable tenns without unjust discrimination on the basis ofrace, creed, color,

or national origin.

(d) Tenant's noncompliance with the provisions in Paragraphs 8.1 (a), (b) and

W shall constitute a material breach of this Lease. In the event ofsuch noncompliance, Landlord

may enforce compliance, terminate this Lease, or pursue such other remedies as may be provided by

law. Landlord also reserves the tight to take such action as the appropriate state or federal authority

may direct in order to enforce compliance.

(e) Tenant agrees that it shall insert the above four (4) proVISIOns in any

sublease, agreement or contract by which said Tenant grants a right or privilege to any person, fIrm

or corporation to render accommodations and/or services to the public on the Premises.

8.2. OPERATIONS.

(a) Tenant shall keep Tenant's business open to serve the flying public for at

least seven (7) days a week from 6:00 o'clock a.m. to 8:00 o'clock p.m., and on call twenty-four

(24) hours with after-hour response time of one (1) hour or less, as per the Airport Minimwn

Operating Standards portion ofthe Airport Rules.

(b) Tenant shall comply with the notification and review requirements covered

in Part 77 ofthe FAA Regulations in the event any future structure or building is planned for the

Premises, or in the event of any planned material modifIcation or alteration to the exterior of any

present or future building or structure situated on the Premises.

(c) Tenant shall not erect nor pennit the erection of any structure or object, nor

permit the growth of any tree, on the Premises that extends above a mean sea level elevation not

approved by the FAA and Landlord. In the event the aforesaid covenant is breached, Landlord

reserves the right to enter upon the Premises, without prior notice, and remove the offending

structure or object, or cut the offending tree, all ofwhich shall be at the expense ofTenant.

(d) Tenant shall not make use of the Premises in any manner that might

interfere with the landing and taking off of aircraft from the Airport or othelwise constitute a

hazard. In the event the aforesaid covenant is breached, Landlord reserves the right to enter upon

the Premises, without prior notice, and cause the abatement ofsuch interference at the expense of

Tenant.

Page 11 of36
9. ADDITIONAL GENERAL CONDITIONS OF THE LEASE.

9.1. AERONAUTICAL BUSINESS PERMIT. Tenant acknowledges that the Airport

Rules provide that no person shall conduct or operate any commercial aviation activity at the

Airport without first obtaining an aeronautical business permit which must be in effect at the time

the cOimnercial aviation activity is perfOimed. Accordingly, Tenant agrees that, at all times during

the Tenn, Tenant shall have and shall maintain a valid, effective aeronautical business pennit.

Furthennore, if any portion ofthe Premises is transferred, assigned or sublet, then said transferee,

assignee or subtenant shall, at all times, have and shall maintain a valid, effective aeronautical

business permit. The fee charged and the fee payment made for the aeronautical business permit

shall be pursuant to the Airport Rules and shall not be deemed rent under this Lease, but the failure

to have such pennit at any time during the Term shall constitute a material breach ofthis Lease.

9.2. APPLICABLE LAWS. Tenants rights under this Lease shall be subject to all ofthe

following matters that are now in effect or that may be in effect in the future during the Tenn: (i)

applicable state and federal law; (ii) applicable city codes, ordinances, rules and regulations passed,

adopted and/or approved by the Chandler City Council (including the Airport Rules and

Regulations); and (iii) reasonable regulations established by the Airport Administrator for the use

and operation ofthe Airport.

9.3. AIRSPACE RESERVATION. There is hereby reserved to Landlord, for the use

and benefit of the public, a right of flight for the passage of aircraft in the airspace above the

surface of the Premises and the Airport, together with the right to cause in said airspace such

noise as may be inherent in the operation of aircraft, now known or hereafter used for navigation

of or flight in the air, using said airspace for landing at, taking off from, or operating at the

Airport.

9.4. USA AGREEMENTS. This Lease shall be subordinate to the provisions and

requirements of any existing or future agreement between Landlord and the United States of

America relative to the development, operation or maintenance ofthe AirpOit.

9.5. NO EXCLUSIVE RIGHTS. It is understood and agreed that nothing herein

contained shall be construed to grant or authorize the granting of an exclusive right within the

meaning ofSection 308 ofthe Federal Aviation Act.

9.6. USA EMERGENCY RIGHTS. This Lease and all the provisions hereof shall be

subject to whatever right the United States ofAmerica now has, or in the future may have or may

acquire, affecting the control, operation, regulation, and taking over of the Airport for the

exclusive or nonexclusive use of the Airport by the United States of America during a time of

war or national emergency.

10. INSURANCE; INDEMNITY.

10.1. INSURANCE. Tenant shall, at its sole cost and expense, procure and maintain

from insurance companies, and in a form satisfactory to Landlord, the type and minimum

amounts of insurance coverage Landlord deems applicable to Tenant's commercial aviation

activity at the Airport and on the Premises. Such required insurance is listed in attached Exhibit

"Coo. Such required insurance is generally consistent with the insurance requirements under

Section II of the Airport Rules; however, if there is any conflict between the provisions in

Page 12 of36
Section II ofthe Airport Rules and the provisions ofthis Lease, including without limitation the

provisions ofExhibit "C", the provisions ofthis Lease shall control. Each insurance policy shall

name Landlord as an additional insured and shall provide for thirty (30) days prior written notice

by the insurance company to Landlord in the event of cancellation of the policy or policies.

Evidence ofsuch insurance shall be provided to Landlord promptly after a request therefor. It is

understood and agreed that, notwithstanding any other insurance requirement, hangar keeper's

liability insurance is required if aircraft are on the Premises for safekeeping, storage, service, or

repair, and such insurance shall be in at least that minimum amount stated in attached Exhibit

"C".

10.2. INDEMNIFICATION.

(a) Tenant does hereby covenant and agree to indemnifY and save harmless

Landlord, its agents and employees, trom any and all fines, suits, claims, demands, actions and/or

causes ofactions of any kind and nature for personal injury or death or property damage arising out

of or resulting from any activity or operation of Tenant on the Premises or in connection with its

use of the Premises; provided, however, that Tenant shall not be liable for any injury, damage or

loss occasioned by the sole negligence or willful misconduct ofLandlord, its agents or employees.

Landlord shall give to Tenant prompt and timely notice of any claim made or suits instituted which

in any way, directly or indirectly, contingently or otherwise, affects or might affect Tenant and

Tenant shall have the right to compromise and defend the same to the extent ofits own interest.

(b) Tenant hereby assumes all risk of, and waives all claim against Landlord, its

agents and employees, for any loss, injury, death or damage to Tenant or Tenant's property, or to

other persons or property sustained while in, on or about the Premises, except where such loss,

injury, death or damage is solely the result ofthe negligence or intentional acts of Landlord, its

agents and employees.

11. MAINTENANCE, REPAIRS AND ALTERATIONS.

11.1. MAINTENANCE AND REPAIRS. Tenant, at Tenant's own expense, shall

provide all maintenance and repair of the Premises and the improvements thereon. All such

maintenance shall be reasonably commensurate with a level of maintenance sufficient to

maintain the improvements and the remainder of the Premises in a presentable condition

consistent with good business practice and equal in appearance and character to other similar

improvements at the Airport.

(a) As part of its maintenance obligation, Tenant shall provide all janitorial

and custodial services on the Premises and in the improvements thereon. Whether Tenant shall

elect to furnish such services itself or engage the services of a janitorial fmn, all such janitorial

services shall be commensurate with the level of such services provided for by Landlord in

similarly situated circumstances.

(b) Landlord, in order to maintain the Premises in the manner consistent with

the general maintenance of the Airport or in order to maintain similar standards of custodial

service throughout the Airport, may, but shall not be required to, assume some or all of the

Tenant's maintenance obligation, including, but not limited to, Tenant's obligation for providing

janitorial and custodial services, provided that Landlord shall first give written notice to Tenant,

which shall advise Tenant of Tenant's failure to provide proper maintenance, or failure to

Page 13 of36
maintain the proper standard of janitorial and custodial service, and Tenant shall have failed

adequately remedy the failure within thirty (30) days of the notice having been given. In the

event that Landlord does take over the maintenance obligation, Tenant shall be responsible for

the reasonable expense incurred by Landlord in doing so.

11.2. ALTERATIONS. Tenant shall make no significant additions, alterations or

modifications to the Premises or the improvements thereon, nor shall Tenant install any fixtures

(other than trade fixtures which can be removed without injury to the Premises or the

improvements thereon), without first obtaining written approval of Landlord. Landlord's

response to Tenant's request for approval shall be prompt, and such approval shall not be

unreasonably withheld. Upon installation, Tenant shall furnish Landlord with a copy ofthe "asbuilt" drawings including utility installations and site plans detailing the nature of the additions,

alterations or modifications. Landlord reserves the right to have Tenant remove, at Tenant's sole

expense, all or any ofsuch alterations, additions or modifications at the end ofthe Term.

12. PUBLIC AIRPORT FACILITIES.

12.1. LANDLORD'S CONTROL OF AIRPORT.

(a) Landlord reserves the right, in its sole discretion, to detennine the nature

and extent ofthe Public Airport Facilities.

(b) Landlord has the right to establish and from time to time change, alter and

amend the Airport Rules, orsuch other reasonable rules and regulations, as may be necessary or

desirable for the proper and efficient operation and maintenance of the Airport and the Public

Airport Facilities.

(c) Landlord shall have the sole and exclusive control of the Public Airport

Facilities, and may, at any time and from time to time during the Term, exclude any person from

use or occupancy thereof.

(d) Landlord shall have the right to make changes to the Public Airport

Facilities or any part thereof, including, without limitation, changes in the location ofthe landing

areas, the heliport, approach areas, runways, taxiways, and aircraft parking areas, as Landlord

deems necessary or advisable for the proper and efficient operation and maintenance of the

Public Airport Facilities.

(e) Notwithstanding any of the provisions of this Paragraph 12.1, Landlord

shall not make changes in the Public Airport Facilities that materially and adversely affect

Tenant's right of access and use of the Public Airport Facilities, except temporarily during

periods of construction.

12.2. MAINTENANCE. Landlord shall maintain or cause to be maintained and repaired

in good condition the Airport, including, without limitation, the landing areas, approach areas,

runways, taxiways, aprons, aircraft parking areas, navigational and avigational aids, lighting

facilities. Landlord shall provide ramp cleaning and custodial services in the Public Airport

Facilities portion ofthe Airport.

Page 14 of36
13. ASSIGNMENT AND SUBLETTING.

13.1. LANDLORD'S CONSENT REQUIRED. Tenant shall not volnntarily or by

operation of law, assign, transfer, mortgage, sublet, or otherwise transfer or encumber all or any

part of Tenant's interest in this Lease, in the Premises or in any of the improvements on the

Premises, without Landlord's prior written consent, such consent not to be unreasonably withheld

or delayed. Any attempted assignment, transfer, mortgage, encumbrance, or subletting without

such consent shall be void, and shall constitute a breach of this Lease. Any transfer of any

ownership interest in Tenant is a transfer snbject to Landlord's consent under this paragraph.

Notwithstanding the foregoing to the contrary, the prior approval of Landlord shall not be

necessary for the assignment ofthe Lease to an entity owned or controlled by Tenant or by reason

of a merger or consolidation of the Tenant with another corporation, inclnding one formed by

Tenant and created to carryon the purposes of Tenant. In snch event, notice to Landlord ofthe

merger or consolidation shall be snfficient.

13.2. HANGAR STORAGE. Notwithstanding Paragraph 13.1, if Tenant is expressly

permitted to use the Premises for hangar leasing service pnrsuant to Paragraph 7.1 above, and

Tenant is using the Premises for such pnrpose, then Tenant may sublet or assign individual

hangar units that are part of the improvements on the Premises to third parties without prior

written consent ofLandlord provided that:

(a) The use of an individual hangal" unit that is sublet or assigned is for the

primary purpose of parking and storage of an aircraft owned by or under lease to the subtenant or

assignee, and the subtenant or assignee is specifically prohibited from conducting commercial

activity; and

(b) The terms and conditions of the subletting or assignment are not 111

conflict with, and expressly made subject to, all ofthe provisions ofthis Lease; and

(c) Tenant provides to the Airport Administrator on a quarterly basis a list that

identifies the name of each subtenant or assignee or other holder of an interest in a hangar unit

(and where said person is a partnership, corporation or other business entity, the name of its

principal contact) and the tail number of each aircraft stored or parked in the unit.

13.3. NO RELEASE OF TENANT. Regardless ofLandlord's consent, no subletting or

assignment shall release Tenant ofTenant's obligations or alter the primary liability of Tenant to

pay the rent and to perform all other obligations to be performed by Tenant hereunder. The

acceptance of rent by Landlord from any other person shall not be deemed to be a waiver by

Landlord of any provisions hereof. Consent to one assignment or subletting shall not be deemed

consent to any subsequent assignment or subletting.

13.4. TRUST DEED BENEFICIARIES AND MORTGAGEES. Notwithstanding

Paragraph 13.1, Landlord agrees that it will consent to Tenant's assignment of this Lease (and

the leasehold created hereby) for security purposes to a bona fide lender, but only under and

pursuant to the terms and conditions contained in the form of City's Consent and Agreement

attached hereto as Exhibit "D", which must be signed by such lender prior to Landlord's consent

being given.

Page 15 of36
14. UTILITIES, TAXES, FEES AND EXPENSES. Tenant shall pay all utilities used in its

operation ofthe Premises at the Airport during the term ofthis Lease, and such utilities shall be on

the basis of metered charges. Tenant shall make timely payment of all taxes and assessments if

any, levied against the Premises, or against Tenant's business operation at the Premises. Tenant

shall be responsible for payment of all fees and expenses for all permits and licenses necessary for

the conduct ofTenant's business upon the Premise during the Term.

15. DAMAGE OR DESTRUCTION OF PREMISES. Tn the event that the Premises, the

improvements thereon or the Public Airport Facilities are so damaged that the Premises can

reasonably be deemed untenable or unusable by Tenant, there shall be a reasonable and

proportionate abatement ofthe rentals, fees, and charges provided for herein during the period that

the same are so untenable or unusable.

16. DEFAULTS; REMEDIES.

16.1. DEFAULTS BY TENANT. Except as provided in Paragraph 17 below, the

occurrence of anyone or more of the following events shall constitute a material default and

breach ofthis Lease by Tenant:

(a) The vacating or abandonment of the Premises by Tenant for more than ten

(10) days.

(b) The failure by Tenant to make any payment of rent or any other payment

required to be made by Tenant within fifteen (15) days ofthe date when due.

(c) The failure by Tenant to observe or perform any of the covenants,

conditions or provisions ofthis Lease to be observed or performed by Tenant, other than described

in Paragraph 16.I(bl above, where such failure continues for a period of thirty (30) days after

written notice thereoffi'om Landlord to Tenant. Provided, however, that ifthe natme of Tenant's

obligation is such that more than thirty (30) days are required for performance, then Tenant shall

not be in default if Tenant commences performance within such thirty (30) day period and

thereafter diligently prosecutes the same to completion.

(d) Any ofthe following: (i) the making by Tenant of any general assignment

or general arrangement for the benefit of creditors; (ii) the filing by or against Tenant of a petition

to have Tenant adjudged bankrupt or a petition for reorganization or arrangement under any law

relating to bankruptcy (unless, in the case of a petition filed against Tenant, the same is dismissed

within sixty (60) days); (iii) the appointment of a trustee or receiver to take possession of

substantially all of Tenant's assets located at the Premises or of Tenant's interest in this Lease,

where possession is not restored to Tenant within thirty (30) days; or (iv) the attachment,

execution, or other judicial seizure ofsubstantially all ofTenant's assets located at the Premises or

ofTenant's interest in this Lease, where such seizme is not discharged within thirty (30) days.

(e) The chronic delinquency by Tenant in the payment of monthly rental, or

any other periodic payment required to be paid by Tenant under this Lease. "Chronic

delinquency" shall mean failme by Tenant to pay monthly rental, or any other periodic payment

required to be paid by Tenant under this Lease, within fifteen (15) days as described in Paragraph

16.l(bl above, for any three (3) months (consecutive or nonconsecutive) dming any twelve (12)

Page 16 of36
month period during the Term. In the event of a chronic delinquency, at Landlord's option,

Landlord shall have the additional right to require that monthly rental be paid by Tenant quarterannually, in advance, for the remainder ofthe Term.

16.2. REMEDIES. In the event of any such material default or breach by Tenant,

Landlord at any time thereafter, with or without notice or demand and without limiting Landlord in

the exercise of any other right or remedy which Landlord may have by reason of such default or

breach, may:

(a) Terminate this Lease by any lawful means, in which case Tenant shall

iImnediately surrender possession ofthe Premises to Landlord. In such event, Landlord shall be

entitled to recover from Tenant all damages incurred by Landlord by reason of Tenant's default

including, but not limited to, the cost ofrecovering possession ofthe Premises and the expenses of

reletting, including necessary renovations and alteration ofthe Premises.

(b) Pursue any other or additional remedy now or hereafter available to

Landlord under the laws of the State of Arizona, including, without limitation, the imposition of a

landlord's lien against any property located within the Premises.

(c) The remedies set forth herein shall be deemed cumulative and not exclusive.

(d) No waiver of default by Landlord of any of the terms, covenants or

conditions hereof required to be kept and observed by Tenant shall be construed to be or act as a

waiver by Landlord of any subsequent default of any ofthe terms, covenants and conditions herein

contained to be performed, kept and observed by Tenant.

16.3. DEFAULT BY LANDLORD.

(a) Landlord shall not be deemed in default unless Landlord fails to perform

any obligation required by Landlord within a reasonable time, but in no event later than thirty (30)

days after Landlord's receipt of a written notice from Tenant to Landlord that specifies the

obligations that Tenant alleges Landlord has failed to perform. If the nature of Landlord's

obligation is such that more than thirty (30) days are required for performance, then Landlord shall

not be in default if Landlord commences performance within such 3D-day peliod and thereafter

diligently prosecutes the same to completion.

(b) In the event of any material default or breach by Landlord, Tenant may take

whatever steps are permitted under applicable law to terminate this Lease and/or to recover its

damages from Landlord.

(c) No waiver of default by Tenant of any ofthe terms, covenants or conditions

hereof required to be kept and observed by Landlord shall be construed to be or act as a waiver by

Tenant of any subsequent default of any ofthe terms, covenants and conditions herein contained to

be performed, kept and observed by Landlord.

16.4. CANCELLATION BY TENANT. In addition to any other right of cancellation

herein given by Landlord or any other rights to which Tenant may be entitled by law or otherwise,

Tenant may cancel this Lease in whole or in part and tenninate all of its obligations hereunder at

Page 17 of36
any time that Tenant is not in default in its payments to Landlord hereunder, by giving Landlord

thirty (30) days advance written notice to be served as hereinafter provided, upon or after the

happening of anyone ofthe following events:

(a) The failure or refusal of the Federal Aviation Administration, at any time

during the Term of this Lease, to pennit Tenant to operate into or from the Chandler Municipal

Airport.

(b) Issuance, by any COUIt of competent jurisdiction, of an injunction in any

way preventing or restraining the use ofthe Airport or any part thereof for airport purposes which

affects Tenant's operation; and the remaining in force of such injunction for a period of at least

ninety (90) days ifthe injunction materially affects Tenant's normal operations.

(c) The inability of Tenant to use, for a period in excess of ninety (90) days,

the Airport or any of the premises, facilities, rights licenses, services, or privileges leased to

Tenant hereunder because of any law or order, rule, regulation, or other action or any inaction of

the Federal Aviation Administration or any other govermnental authority, or because of fire,

earthquake, or other casualty or acts ofGod or the public enemy.

(d) The assumption by the United State Government or any authorized agency

thereof of the operation, control, or use of the Airport and facilities, or any substantial part or

parts thereof, in such a manner as substantially to restrict Tenant for a period of at least ninety

(90) days, from operating thereon for the conduct ofTenant's normal business.

16.5. CITY'S RIGHT OF CANCELLATION UNDER A.R.S. §38-51I. The Parties

further acknowledge that this Lease is subject to cancellation by the Landlord pursuant to the

provisions of Section 38-511, Arizona Revised Statutes.

17. CONDEMNATION. If the Premises is taken under the power of eminent domain, or

sold under the threat of the exercise of said power (all of which are herein called

"condemnation") to such an extent as to render the Premises untenantable, either Landlord or

Tenant shall have the option to terminate this Lease effective as of the date the condemning

authority takes title or possession, whichever first occurs. If condemnation does not render the

Premises untenantable, this Lease shall continue in effect, and Landlord shall promptly restore

the portion ofthe Premises not taken to the extent possible to the condition existing prior to the

condemnation. If, as a result of such restoration, the area size of the Premises is reduced, the

rental shall be reduced proportionately. All condemnation proceeds shall be paid to Landlord,

and Tenant waives all claims against such proceeds; provided, however, that Tenant shall be

entitled to any award separately designated for Tenant's relocation expenses, or for damage to or

taking of Tenant's trade fixtures or other personal property; and further provided that Tenant

shall be entitled to the portion of the condemnation proceeds attributable to the taking of any of

the improvements on the Premises while the Term ofthis Lease is in effect, but not to any such

proceeds awarded to compensate for severance damages or costs to cure harm to the remainder

ofthe Premises as a result of condemnation.

18. SUSPENSION AND ABATEMENT; FORCE MAJEURE. In the event that Landlord's

operation ofthe Airport, or Tenant's operations at the Airport, is restricted substantially by action

of the Federal Government, or any agency thereof, then either party hereto shall have the right,

upon written notice to the other, to a suspension ofthis Lease and an abatement of a just proportion

Page 18 of36
of the services and facilities to be afforded hereunder, or a just proportion of the payments to

become due hereunder, from the time of such notice until such restrictions shall have been

remedied and normal operations restored.

19. QUIET ENJOYMENT. Landlord agrees that, on payment ofthe rent and performance of

the covenants and agreements on the part ofthe Tenant to be perfonned hereunder and subject to

any conditions stated in this Lease, Tenant shall peaceably have and enjoy the Premises and all the

rights and privileges ofthe Airport, its appurtenances and facilities granted herein.

20. SURRENDER OF POSSESSION. Upon the expiration of the Term or earlier

termination of this Lease, Tenant's right to use the Premises and the improvements thereon, and

any right of access and use ofthe Public Airport Facilities provided under this Lease, shall cease

and Tenant shall forthwith upon such expiration or tennination surrender the same and leave the

Premises in good condition except for nonnal wear or tear.

21. GENERAL PROVISIONS.

21.1. DEFINITIONS OF TERMS. All defmitions contained within Airport Ordinance

No. 1426 and the Federal Aviation Act of 1958 including all amendments thereto shall be

considered as included herein.

21.2. INSPECTION BY LANDLORD. Landlord may enter upon the Premises at any

reasonable time for any purpose necessary, incidental to, or connected with the performance of its

obligations hereunder, or in the exercise of its goverrunental functions, or for fire protection or

security purposes.

21.3. NOTICE. Any notice, request, demand, statement, consent or other

communication herein required or permitted to be given by either party to the other party

hereunder, shall be in writing signed by or on behalf ofthe party giving the notice and addressed

to the other party at the address as set forth below:

To Landlord:

With a copy to:

To Tenant:

Airport Administrator

Chandler Municipal Airport

2380 South Stinson Way

Chandler, Arizona 85249

Fax No.: (480) 782-3541

City Attorney

City ofChandler

Mail Stop 602, Post Office Box 4008

Chandler, Arizona 85244-4008

Fax No.: (480) 782-4652

Chandler Air Service, Inc.

1675 East Ryan Road

Chandler, Arizona 85249

Fax No.: (480) 963-7639

Page 19 of36
Each party may by notice in writing change its address for the purpose of this Lease,

which address shall thereafter be used in place of the former address. Each notice, demand,

request, consent or other communication which shall be given to any of the aforesaid shall be

deemed sufficiently given, served, or sent for all purposes herewlder: (i) two (2) business days

after it shall be mailed by United States registered or certified mail, postage prepaid and return

receipt requested, in any post office or branch post office regularly maintained by the United

States Postal Service; (ii) upon personal delivery or upon direct facsimile transmission; or (iii)

one (I) business day after deposit with any recognized commercial air courier or express service.

Any communication made bye-mail or similar method shall not constitute notice pursuant to this

Lease.

21.4. ENTIRE AGREEMENT. This document contains the entire agreement between

the parties hereto, and no term or provision hereof may be amended, changed, waived,

discharged or terminated unless the same is in writing executed by both parties hereto.

21.5. APPLICABLE LAW. Arizona law shall govern the construction, performance

and enforcement ofthis Lease.

21.6. TIME OF ESSENCE. Time shall be ofthe essence in the performance of every

term, covenant and condition ofthis Lease.

21.7. HEADlNGS. The paragraph headings contained herein are for convenience in

reference and are not intended to define or limit the scope of any provision ofthis Lease.

21.8. WRITlNG. Any and all approvals, consents, and notices called for in this Lease

shall be in writing.

21.9. BJNDlNG EFFECT. All the covenants, stipulations and agreements in this Lease

shall extend to and bind the legal representatives, successors and assigns ofthe respective parties

hereto.

21.10. SEVERABILITY. In the event that any covenant, condition, or provIsIOn

contained in this Lease is held to be invalid by any court of competent jurisdiction, the invalidity

of any such covenant, condition or provision shall in no way affect any other covenant, condition

or provision herein contained; provided that the invalidity of any such covenant, condition or

provision does not materially prejudice either Landlord or Tenant in their respective rights and

obligations contained in the valid covenants, conditions or provisions ofthis Lease. -

21.11. NO RECORDING; MEMORANDUM OF LEASE. Without the prior written

consent of Landlord, this Lease shall not be placed ofrecord. However, upon execution hereof,

the Parties shall execute and cause to be recorded a Memorandum of Lease substantially in the

form attached hereto as Exhibit "E" in order to give notice ofthe Lease.

21.12. EXHIBITS AND INCORPORATION. The following exhibits, which are

attached hereto or are in the possession ofthe Landlord and Tenant, are incorporated herein by

reference as though fully set forth:

Exhibit "A"

Exhibit "B"

Premises Legal Description

Diagram of Premises and Surrounding Airport Features

Page 20 of36
Exhibit "C"

Exhibit "D"

Exhibit "E"

Required Insurance

City's Consent and Agreement

Memorandum of Lease

IN WITNESS WHEREOF, the pmties hereto have caused this Lease to be executed as ofthe day

and year first above written.

LANDLORD: CITY OF CHANDLER, an

Arizona municipal corporilticm

Its: Mayo);/"

APPR9VED AS TO F9R¥ .

>, •... !,; '.' ("r"

«,.,",J

/.i .. {('.'..1/ ,~'-".........,.</ '-<! (L

City Attorney

TEN T: CHANDLER AIR SERVICE, INC.,

an rizo a corporation

Its. --It----'-''''''''''--'-------

Page 21 of36
EXHIBIT "A"

PREMISES LEGAL DESCRIPTION

The Premises consists of four (4) contiguous parcels of land located upon the Chandler

Municipal Airport situated within Chandler, Arizona. The land parcels are legally described as

follows:

Parcel No. 1

A part ofthe Northeast quarter of Section 11, Township 2 South, Range 5 East ofthe Gila and

Salt River Base and Meridian, Maricopa County, Arizona, being more particularly as follows:

COMMENCING at the center ofsaid Section 11;

Thence North 00 degrees 14 minutes 21 seconds West, along the North-South Mid-Section line

ofsaid Section 11, a distance of 1,321.92 feet;

Thence North 89 degrees 07 minutes 16 seconds East, along the North line of Chandler Airport,

a distance of727.00 feet;

Thence South 00 degrees 52 minutes 44 seconds East, a distance of 34.00 feet to the TRUE

POINT OF BEGINNING ofthis description;

Thence North 89 degrees 07 minutes 16 seconds East, a distance of270.00 feet;

Thence South 00 degrees 52 minutes 44 seconds East, a distance of320.00 feet;

Thence South 89 degrees 07 minutes 16 seconds West, a distance of270.00 feet;

Thence North 00 degrees 52 minutes 44 seconds West, a distance of 320.00 feet to the TRUE

POINT OF BEGINNING.

Parcel No. 2

A part ofthe Northeast quarter of Section 11, Township 2 South, Range 5 East ofthe Gila and

Salt River Base and Meridian, Maricopa County, Arizona, being more particularly described as

follows:

COMMENCING at the center ofsaid Section 11;

Thence North 00 degrees 14 minutes 21 seconds West, along the NOith-South Mid-Section line

ofsaid Section 11, a distance of 1,321.92 feet;

Thence North 89 degrees 07 minutes 16 seconds East, along the North line of Chandler Airport,

a distance of 1,117.00 feet;

Page 22 of36
Thence South 00 degrees 52 minutes 44 seconds East, a distance of 34.00 feet to the TRUE

POINT OF BEGINNING ofthis description;

Thence North 89 degrees 07 minutes 16 seconds East, a distance ofl99.00 feet;

Thence South 00 degrees 52 minutes 44 seconds East, a distance of 400.00 feet;

Thence South 89 degrees 07 minutes 16 seconds West, a distance of 199.00 feet;

Thence North 00 degrees 52 minutes 44 seconds West, a distance of 400.00 feet to the TRUE

POINT OF BEGINNING.

Parcel No. 3

A part ofthe Northeast quarter of Section 1I, Township 2 South, Range 5 East ofthe Gila and

Salt River Base and Meridian, Maricopa County, Arizona, being more particularly described as

follows:

COMMENCING at the center ofsaid Section 11;

Thence North 00 degrees 14 minutes 21 seconds West, along the North-South Mid-Section line

ofsaid Section 11, a distance of 1,321.95 feet to the Northwest comer of the Southwest quarter

ofthe Northeast quarter ofsaid Section I I;

Thence North 89 degrees 07 minutes 17 seconds East, along the North line of said Southwest

quarter, a distance of 1,117.00 feet;

Thence South 00 degrees 52 minutes 44 seconds East, a distance of 434.00 feet to the TRUE

POINT OF BEGINNING;

Thence North 89 degrees 17 minutes 17 seconds East, a distance of 199.00 feet;

Thence South 00 degrees 42 minutes 43 seconds East, a distance of59.34 feet;

Thence South 49 degrees 39 minutes 44 seconds West, a distance of I 12.94 feet;

Thence North 41 degrees 09 minutes 45 seconds West, a distance of 172.64 feet to the TRUE

POINT OF BEGINNING.

Parcel No.4

A part ofthe Northeast Quarter of Section I I, Township 2 South, Range 5 East ofthe Gila and

Salt River Base and Meridian, Maricopa County, Arizona, being more particularly described as

follows:

Commencing at the North quarter comer of said Section 11, said comer being a brass cap in a

handhole, from which the South quarter corner of Section 11 a brass cap flush, bears South 00

degrees 20 minutes 37 seconds East, a distance of 5,289.84 feet;

Page 23 of36
Thence, South 00 degrees 20 minutes 37 seconds East along the North-South Mid-Section line of

Section 11, a distance of 1,321.72 feet;

Thence, North 89 degrees 10 minutes 47 seconds East along the North line of Chandler Airport,

a distance of997.00 feet;

Thence, South 00 degrees 49 minutes 13 seconds East, a distance of34.00 feet to the POINT OF

BEGINNING;

Thence, North 89 degrees 10 minutes 47 seconds East, a distance of 120.00 feet;

Thence, South 00 degrees 49 minutes 13 seconds East, a distance of 320.00 feet along the West

line of Parcel 2 as described in Document No. 20110662072, Maricopa County Records, to the

POINT OF BEGJNNJNG.

Page 24 of36
EXHIBIT "B"

DIAGRAM OF THE PREMISES AND

SURROUNDING AIRPORT FEATURES

Page 25 of36
Airport Layout Plan modified (or ImUBI dfsclJssion

purposes & does not con/aln ALP elements in

l11eir entirety

M I XED

LAND USE

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EXHIBIT B

DIAGRAM OF THE PREMISES AND SURROUNDING AIRPORT FEATUREs

Chandler MunicipalAirport Lease Contract #015

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EXHIBIT "C"

REQUIRED INSURANCE

A. From and after the Effective Date ofthis Lease, Tenant shall carry, at Tenant's sole cost

and expense, the following types of insurance, in the amounts specified or in such higher

amounts as are customary as a result ofincreases in standard liability coverage resulting from the

passage oftime during the term ofthe Lease:

1. Commercial General Liability insurance in the amount of $2,000,000 per

OCCUlTence and $2,000,000 annual aggregate. Such insurance shall contain contractual

liability insurance covering applicable leases, licenses, permits, or agreements.

2. Commercial/business automobile liability insurance for all owned, non-owned

and hired vehicles assigned to or used in performance of commercial aeronautical

activities in the amount of a least $1,000,000 per OCCUlTence.

3. Fire and extended property coverage for all improvements and fixtures on the

Premises in an amount not less than the full replacement cost thereof, to the, extent of

Tenant's insurable interest in the Premises.

4. Worker's compensation insurance as required by law and employers liability

insurance in the amount of$100,000 per accident, $100,000 disease per person, $500,000

disease policy limit.

5. Aircraft liability insmance in the amount of at least $1,000,000 per occurrence.

6. Hangar keeper's liability insurance in the amount of at least $500,000 per

occurrence, or more as values require.

7. Fueling products-completed liability insurance m the amount of at least

$5,000,000 per OCCUlTence.

8. Products-completed operations liability insurance in the amount of at least

$2,000,000 per OCCUlTence.

9. Chemical and environmental clean-up liability insurance in the amount of at least

$1,000,000 per occurrence or such greater or lesser amount of coverage as approved in

writing by the City ofChandler Risk Manager.

10. Non-OwnerlRenterlStudent pilot liability in the amount of at least $100,000 per

OCCUlTence.

11. Such other insurance as the City's Risk Manager may reasonably determine to be

necessary for commercial aviation operator's activities conducted at or upon the

Premises.

Page 26 of36
B. All insurance policies cited herein shall contain a waiver of subrogation rights

endorsement with respect to Landlord.

C. All insurance shall be in a form and from an insurance company with a Best's finallcial

rating of at least B ++ 6. All policies, except worker's compensation policy, shall name

Landlord, and Landlord's elected or appointed officials, officers, representatives, directors,

commissioners, agents and employees, as "Additional Insureds," and the Tenant shall furnish

certificates of insurance evidencing the required coverage cited herein on or before the Effective

Date. Such certificates shall provide for unequivocal thirty (30) day notice of cancellation or

material change of any policy limits or conditions.

D. All insurance policies must remain in force and effect at all times during the Term ofthis

Lease. If any required insurance coverage is not in force and effect during the Teffil of this

Lease, Tenant permit period, the commercial aviation operator shall cease all commercial

aviation activities and other activities that allowed under the pennit lmtil the appropriate

insurance coverage is reinstated.

Page 27 of36
EXHIBIT "D"

CITY'S CONSENT AND AGREEMENT

(For Financing Purposes)

Description ofGround Lease.

!1Tenant":

"Leaset1:

"Leasehold":

!1Lender":

City ofChandler, an Arizona municipal corporation

Chandler Air Service, Inc., an Arizona corporation

Ground Lease dated _

Tenant's interest m the Lease and all Leasehold

Improvements

NOW, THEREFORE, City and Lender represent, warrant, covenant and agree as

follows:

1. Consents. City hereby consents to the assigmnent of Tenant's interest in

the Leasehold to Lender for security purposes under the Lender's Deed of Trust upon closing of

the loan. Herein the term "Deed of Trust" shall mean the Lender's Deed of Trust as may be

applicable and the "Lender" shall mean , as its/their interests appear in

the Deed ofTrust.

2. Status of Lease. A true and correct copy of the Lease, together with all

amendments, supplements, and modifications thereto, is attached as Schedule A to this

Agreement. The Lease is presently in full force and effect, is valid and enforceable according to

its terms and has not been modified or amended in any way except as shown on the copy ofthe

Lease attached hereto. The Lease includes a description ofthe land and improvements to which

the Leasehold applies (herein, the "Leased Premises").

3. Non-Default. Tenant is not in default (a) in the payment of rent or any

other amounts due and payable by Tenant to City under the Lease or (b) to the actual knowledge

of City, in the observance or perfoffi1ance of any other covenant or condition to be observed or

performed by Tenant under the Lease. To the actual knowledge of City, no event has occurred

which now does or hereafter will authorize City to terminate the Lease.

4. Right to Foreclose Deed of Trust. Lender recognizes that any Deed of

Trust taken by Lender affects and applies only to Tenant's interest in the Leasehold and that City

Page 28 of36
will not permit any security interest to be taken in any of its land or to encumber its fee interest

in any ofits land. In the event of default by Tenant under the terms ofthe Deed of Trust, Lender

may enforce or foreclose the Deed of Trust including the acceptance of a Deed in Lieu of

Foreclosure. City agrees that in connection with any such foreclosure, Lender may:

4.1. Acquire Tenant's interest in the Leasehold either by Deed in Lieu

of Foreclosure or by actual foreclosure Uudicial or non-judicial) without further consent of City,

subject to the requirements ofParagraph 6.4 below;

4.2. Rent the Leased Premises pending foreclosure ofthe Leasehold by

Lender without further consent of City; and

4.3. Assign and sell the Leasehold in whole or in part to any person or

entity, subject to the requirements set fOith in Paragraph II below.

Tn the event the successful purchaser at the foreclosure sale is a person or entity other than

Lender, such purchaser shall not automatically succeed to Tenant's interest in the Leasehold, but

must fIrst qualify as an acceptable party as set forth in Paragraph 11 below and Lender agrees to

insert the following language in its Deed of Trust: "Trustee's and BenefIciary's right to

sell/assign the Leasehold interest secured by this Deed of Trust upon foreclosure to any person

other than BenefIciary, is limited to such person reasonably being approved by the City of

Chandler pursuant to that certain 'City's Consent and Agreement' between the City of Chandler

and BenefIciary."

5. Surrender ofthe Leased Premises. No surrender ofthe Leased Premises

or any other act of Tenant shall be deemed to terminate the Lease and City will not terminate

voluntarily the Lease by agreement with Tenant unless Lender has been previously notifIed in

writing and has consented to the termination in writing.

6. Notice ofDefault and Lender's Rights.

6.1. Notice of Default. If Tenant defaults under the Lease or if any

event occurs which would give City the right to terminate, modify, amend or shorten the term of

the Lease, City shall take no steps to exercise any right it may have under the Lease without fIrst

giving Lender written nqtice of such default. A copy of each and every Notice ofDefault served

or sent by City or its agent to or upon Tenant pursuant to the Lease shall be sent

contemporaneously to Lender in accordance with Paragraph 18 below. Such Notice of Default

shall specify the event or events of default then outstanding and the time period at the end of

which the indicated action would become effective.

6.2. Termination for Monetary Default. If the Notice of Default

given by City to Lender relates to a monetary default and Tenant has not cured such monetary

default within 15 days as provided in the Lease and Tenant's failure to cure results in City

desiring to tenninate the Lease, City may telminate the Lease if such monetary default is not

cured by either Tenant or Lender within twenty (20) days of Lender's receipt ofNotice, and kept

current thereafter.

Page 29 of36
6.3. Termination for Non-Monetary Defanlt. Tfthe notice given by

City to Lender relates to a non-monetary default and Tenant has not cured such non-monetary

default within the 30-day period specified in the Lease, City shall take no action to terminate the

Lease if:

6.3.1. Within 20 days after City's notice to Lender of Tenant's

failure to cure (or failure to diligently pW"sue a cW"e) Lender notifies City of its intent to realize

upon its secW"ity interest and commences realization within 60 days thereafter, and diligently

pursues realization; and

6.3.2. Lender notifies City that it will assume the Lease when

Lender is legally entitled to the ownership and/or possession of Tenant's interest in the

Leasehold; and

6.3.3. Lender pays City at time of notification all back rent or

other monies or performances due that may be in default up to the date Lender notifies City of

Lender's intent and further pays all rent that accrues during the period after Lender so notifies

City and completes such other performances that may be required or come due under the Lease.

7. Termination Due to Bankrnptcy. City shall not terminate the Lease

because of Tenant's breach of any term(s) ofthe Lease relating to the solvency of Lessee or the

institution of any bankruptcy, insolvency, receivership or related action by or against Lessee as

long as Lender cures any default under the Lease by Tenant as provided in this Consent and

Agreement.

8. Failure to Cure Default. Tfthe non-monetary default is of a nature which

requires immediate abatement as a result ofwhich Lender would not normally pursue realization

on the collateral, and Tenant has not taken steps to immediately cW"e the default, the Lender must

take immediate steps to cure such default within ten (10) days ofreceipt of notice or else the City

may terminate the Lease.

9. Release of Deed of Trnst. Upon termination of the Lease as provided

herein, Lender shall release its Deed ofTrust within fifteen (15) days thereafter.

10. Assumption of the Lease. IfLender acquires the interest ofTenant at any

time or takes possession of the collateral, then Lender shalI formally assume the Lease within

twenty (20) days thereafter. Failure to so assume the Lease shall give City the right to

immediately terminate the Lease.

II. Right to Assign. Lender shall not have the right to assign its interest in

the Leasehold nor, in the case of a foreclosure under the Deed of Trust, shall the Trustee under

the Deed of Trust transfer the Leasehold to any person or entity (other than Lender) without first

obtaining the written consent of City or such assignment or transfer, which consent will not be

unreasonably withheld or delayed provided that Lender (i) has disclosed to City the identity of

the proposed pW"chaser, assignee or transferee; (ii) shown to City that the purchaser's, assignee's

or transferee's credit standing would reasonably be acceptable to a commercially prudent lender;

and (iii) provided evidence to City that the use of the Leasehold by such pW"chaser, assignee or

transferee will be consistent with the terms ofthe Lease or Lessee's prior use ofthe Leasehold.

Page 30 of36
Upon the purchaser's, assignee's or transferee's assumption and agreement to perfonll and to be

bound by all of the terms of the Lease, Lender shall be relieved of further liability under the

Lease. However, if Lender finances the purchaser, assignee or transferee, Lender shall again be

subject to all the obligations set forth in this Agreement.

12. Disposition of Insurance and Condemnation Proceeds. City shall be

named as an additional insured under any ofTenant's casualty policies on the Leased Premises to

the extent ofthe interests stated in this Paragraph 12. Should the Leased Premises suffer any loss

which is covered by casualty insurance, and the insurance proceeds are used to restore any

improvements made by Tenant, City agrees that Tenant and Lender shall have the right to such

proceeds so long as none of City's property, utilities or other services therein are damaged or

such damages are repaired. In the event the Leased Premises are substantially damaged and

Tenant's improvements have been repaired, City shall only participate in the insurance proceeds

to the extent necessary to repair and restore the land and any of City's or Tenant's improvements

(excluding buildings and personal property) on or in the ground to the same condition that the

land was in at the commencement of the Lease, or in the same condition as at the time of the

casualty. Under the Lease, City has the option ofrequiring Tenant to demolish the Improvements

at the end of the lease tenn, or to have Tenant convey title to City of Tenant's interests in the

Leasehold Improvements. In the event the Leased Premises and the Leasehold are so severely

damaged that Tenant's and Lenders' decision is not to repair or restore the Leased Premises, City

shall participate in the insurance proceeds to the extent necessary to remove the remainder ofthe

damaged improvements and to restore the Leased Premises and any utilities or other such

improvements (excluding rebuilding the improvements or restoring other personal property of

Tenant) to the same condition the land was in at the commencement ofthe Lease, or in the same

condition as at the time of the casualty. Other than as described herein, City shall have no claim

to insurance proceeds or condemnation proceeds that are attributable to Tenant's interest in the

Leasehold, nor shall Lender have any interest in City's condemnation proceeds, if any.

13. Right to Participate in Litigation. Lender shall have the right to

participate in any litigation, arbitration or dispute directly affecting the Leased Premises or the

interests of Tenant or Lender therein, including without limitation, any suit, action, arbitration

proceeding, condemnation proceeding or insurance claim. City, upon instituting or receiving

notice of any such litigation, arbitration or dispute will promptly notifY Lender ofthe same.

14. Incorporation of Mort!!a!!ee Protection Provisions. To the extent not

inconsistent with this Agreement, all provisions of the Lease that by their terms are for the

benefit of any leasehold mortgagee, are hereby incorporated herein for the benefit ofLender.

15. Right to Remove Collateral. In the event Lender exercises its rights

under its collateral and realizes upon the collateral, City agrees that Lender is entitled to remove

Tenant's furniture, movable trade fixtures and equipment installed by Tenant from the Leased

Premises at any reasonable time and that the collateral shall remain personal property even

though the trade fixtures may be affixed to or placed upon the Leased Premises. "Trade fixtures"

means the movable personal property of Tenant which is free standing or attached to floors,

walls or ceiling, but does not include installed light fixtures, floor coverings, doors, windows,

heating, plumbing or electrical systems or components thereof, including any roof-mounted

HVAC equipment andlor units thereof, or pennanent walls or partitions installed by Tenant. In

the event Lender so realizes on its collateral, City waives any right, title, claim, lien or interest in

Page 31 of36
the above trade fixtures by reason of such fixtures being attached to or located on the Leased

Premises. Lender shall use reasonable care in removing the trade fixtures from the premises and

shall repair any damage that may result from such removal which shall be completed accordance

with the terms ofthe Lease.

16. Interpretation of Agreement. This Agreement sets forth the complete

understanding ofLender with respect to this transaction; may be amended only in writing signed

by the parties; and, without limiting the generality ofthe foregoing shall not be deemed modified

by any course of dealing. No provision in the Deed of Trust, or in any other document executed

by or for the Lender or Tenant to which City is not a party, shall vary, modifY or expand the

covenants herein contained. In the event of any conflict between the terms ofthis Agreement

and the Lease, this Agreement shall control.

17. Fees & Costs. In the event of litigation or arbitration between the parties

to enforce or interpret this Agreement, the arbitrator, Board of Arbitration or Judge, as may be

appropriate, may award the prevailing party in such arbitration or litigation a reasonable

attorney's fee not to exceed 20 percent of the amount in controversy, plus costs and costs of

collection.

18. Notices. All notices, copies of notices, consents or other communications

given hereunder shall be in writing and may be given in person, by registered or certified United

States mail, by delivery service, or by telephone facsimile. Any notice given to a party shall be

deemed effective upon the earliest ofthe following: (a) actual receipt by that party; (b) personal

delivery to the designated address ofthat party, addressed to that party; (c) delivery by overnight

courier; (d) telephone facsimile with receipt confirmed; or (e) if given by certified or registered

United States mail, forty-eight (48) hours after deposit with the United States Postal Service,

Postage Prepaid, addressed to that party at its designated address. The designated address of a

party shall be the address ofthe party shown below or such other address as that party, from time

to time, may specifY by written notice to the other party:

Ifto Lender:

Ifto City: Airport Administrator

Chandler Municipal Airport

2380 South Stinson Way

Chandler, Arizona 85249

Fax No.: (602) 782-3541

With copy to: City Attorney

City ofChandler

Mail Stop 602, Post Office Box 4008

Chandler, Arizona 85244-4008

Fax No.: (602) 782-4652

Page 32 of36
IN WITNESS WHEREOF, the City has executed these presents this __ day of

____,,20_

CITY OF CHANDLER, an Arizona Municipal

corporation

By: _

Its: _

AGREED to this dayof , 20

LENDER: _

By: _

Its: _

Page 33 of36
SCHEDULE A

To City's Consent and Agreement (Exhibit--->

Copy of Lease

Page 34 of36
EXHIBIT "E"

When recorded, return to:

MEMORANDUM OF LEASE

This Memorandum of Lease is made as of this __ day of , 20--, by and

between the City of Chandler, an Arizona municipal corporation, with an office at the Chandler

Municipal Airport, 2380 South Stinson Way, Chandler, Arizona 85249 (hereinafter referred to as

"Landlord") and a(n) , with an office at

___________, Arizona (hereinafter referred to as "Tenant").

1. Landlord and Tenant have entered into a lease agreement identified as Airport Lease

Contract No. __ (the "Lease") on the __ day of ,20_, pursuant to which

Tenant is permitted to make use and take possession of certain undeveloped real propeliy for

specified commercial aviation activities, all as set forth in the Lease.

2. The term ofthe Lease is for thirty (30) years commencing on , the "Effective

Date" ofthe Lease, and terminating on , the 30th anniversary ofthe Effective Date.

3. The real property leased to Tenant under the Lease is described in attached Exhibit "A".

4. This Memorandum of Lease may be executed in counterparts, which together shall

constitute a single instrument.

IN WITNESS WHEREOF, the parties have executed this Memorandum as of the date specified

above.

LANDLORD: CITY OF CHANDLER,

an Arizona municipal corporation

By:

Its: _

TENANT: _

By:

Its:

Page 35 of36