"##
 


 $#
 %&* 

### 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 conceptwill 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."##
 


 $#
 %&+"##
 


 $#
 %&,

# EXHIBIT 3CITY 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 shallbe deemed amaterial 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 specializedaviationserrice operator ("SASO").
2.2. In 1983, Tenant leased in writing from Landlord a parcel ofthe Airport property for use in conducting commercial aviation activity, which lease has from time to time been amended pursuantto 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 ofthe 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 "AirportLease Contract 004."
2.4. The original term ofeach ofthe aforementioned leases is setto expire onMay 31, 2012, unless Tenant exercises its optionto renew each ofthe leases for an additionalten years. 2.5. In lieu of exercising the renewal option for each ofthe 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 ofAirport property, all ofwhich are part ofthe "Premises" described in Paragraph 3.1 below.
2.6. It is the intention ofthe 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 andAirportLease Contract 004. 3. LEASE OF PREMISES. 3.1. PREMISES. Landlord leases to Tenant and Tenant leases from Landlord for the term ofthis Lease, at the rental, and upon all ofthe 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 of36described 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 ofthe 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 ofthis Lease, Tenant shall have the following additional rights, each ofwhich is non-exclusive, and each ofwhich 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 subsequentamendments thereto (the "AirportRules"): (a) Anon-exclusiverightto use ofthe Public Airport Facilities. As used inthis 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, butnot 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 bythe AirportAdministrator (fonnerlytheAirportManager); (b) A non-exclusive right ofaccess 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 rightto enter upon and exitthe airside ofthe Airport from thePremisesto conductany commercial aviation activitythat is apennitteduseunderthis 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 "specializedaviation service operator" have the same meanings as set out inthe AirportRules. 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 ofthe 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 ofthem may be on the Effective Date ofthis 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, orusabilitythereoforthe use or uses to which the Premises or any partthereof 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 ofthis 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 onthe Premises is generally depicted in attached Exhibit "B". Page 2 of364.2. 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 andhangarbuilding located atthe north side ofthe Premises; andthe construction ofa new, 15,000 square foot building and appurtenant improvements suitable for FBO and other commercial aviation uses as described in Article 13 ofthe 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 obtainthe 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 ofexecuted approvals to Landlord. The execution ofthis Lease by Landlord does not, and shall not be deemedto, constitute approval by the City ofChandler ofsuchplans and specifications. (a) The Project Work shall be deemed fully completedwhen a final certificate ofoccupancy is issued for the new building by the Transportation and Development Department ofthe City of Chandler (or such other department ofthe City, however denominated, that is responsible for issuing building permits andproviding certificates ofoccupancy). (b) Tenant will perform all ofthe 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 ofanypublic or quasi-public bodyhaving similarjurisdiction. (c) Landlord will be an additional insured on all liability insurance policies maintainedby Tenant and its contractor(s) duringthe performance ofall ofthe Project Work. (d) Tenant shall diligently proceed to fully complete all ofthe Project Work within the five (5) year period stated in the first paragraph ofthis Paragraph 4.2. IfTenant fails to fully completethe Project Workwithin the five (5) yearperiod, 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 ofthe Project, Tenant shall provide Landlord with a performance bond and apaymentbond 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 ofthe Project, including without limitation the demolition and removal of existing structures and construction ofnew improvements. The condition ofsaid bond shall be such that Tenant shall promptly payor cause to be paid all monies due to all persons supplying labor and materials inthe performing the Project Work. Page 3 of36(c) Each bond shall be executed solely by a surety company or companies holding a certificate ofauthority to transact surety business in the State ofArizona issued by the director ofthe Arizona Department ofInsurance pursuant to Title 2, Chapter 2, Article I ofthe ArizonaRevised Statutes, and no suchbond shallbe 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 ofthejudgment such reasonable attorney's fees as may be fixed by acourt ofcompetentjurisdiction. (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 suchbonds. 4.4. TITLE TO IMPROVEMENTS. Title to the improvements on the Premises shall be as follows: (a) Pursuant to the terms and conditions ofAirport 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 ofthe 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 atthe Effective Date ofthis Lease, and as generallyreferenced 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 afterthe Effective Date ofthis Lease, including without limitation all such buildings, structures or improvements constructed as part ofthe Project, shall remain in Tenant. Except for movable property and trade fixtures ofTenantnotpennanently affixedto the Premises, title to any such new buildings, structures or other improvements, whether or not constructed as part ofthe Project orthe Project Work, shall automatically pass to Landlord upon the expiration, termination, or earliercancellation 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 ofthis 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 locatedthereon. 

### 5. TERM.
5.1. THIRTY-YEAR TERM. The term ofthis Lease (the "Term") shall be for a period ofthirty (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 ofthe Effective Date ofthis 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 of36lease extension under terms and conditions that are mutually beneficial and agreed upon by both Tenantand Landlord. The terms and conditions ofthe lease extension will be detailed atthe time ofthe discussions and memorialized as an amendmentto this Lease. Should an agreement on the extension acceptable to both Parties notbe reached. then this Lease shalltemlinate as ofthe lease termination date. 5.2. SHORTENED TERM. Notwithstanding Paragraph 5.1 above, ifTenant 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 offifteen (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 rentpayments that are received by Landlord from Tenant shall be applied first toward any accrued latepayment charges or interest, then to any other charges or fees stated in this Lease that may be due and owing, then to any backrent due and not yet paid, andthen to the currentrent. 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 ofParagraph 6.3. When rent payments commence, the Monthly BaseRentdue hereunder shall bepayable in advance to Landlord on orbefore the first day ofeach month during the Teffil atthe address statedherein orto such otherpersons or at such otherplaces as Landlord may designate in writing and shall be paid in lawful money ofthe United States of America. TheMonthly BaseRentfor any periodduring the Teffil which is for less than one month shallbe apro rataportion ofthe monthly instalhnent. 6.3. MONTHLY BASERENT 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 shallbe deteffilined by multiplying the current annual rentby 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 ofthe anniversary ofthe Effective Date ("the Adjustment Month") ofthe 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 ofLabor, Bureau ofLabor Statistics. Ifthere is no such CPI-U figure for the AdjustmentMonth ofany yearofthe Term, then the Adjustment Month figure ofthe successor or most nearly comparable successor Index shall be used. (a) The calculation ofthe annualrentincrease shallbe as follows: (l) Deteffiline the current annual rent by multiplying the current monthlyrentby 12.

Page 5 of36(2) Detemline the CPI-U index point change by subtractingthe previous year's CPI-U index figure forthe AdjustmentMonth fi:om the currentyear's CPI-U index figure for theAdjustmentMonth. (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 rentbythe annual percentchange. (5) Determine the new annual rent by adding the additional annual rent to the current annual rent. (6) Deten11ine the new monthly rentby dividing the new annual rent by 12. (b) By way ofexample only, the following is shown for deten11ining the annual percentage change: CPI-U for currentperiod Less CPI-U forprevious period Equals Index PointChange Dividedbyprevious 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 thanthe minimumMonthlyBase Rent forthe immediatelypreceding year. 6.4. AIRCRAFT PARKING CHARGES. IfTenantreserves from Landlord any aircraft tie downs that are on the Public Airport Facilities and not on the Premises, Tenant may opt to pay the monthlyrate charged byLandlord for use ofthetie downs as additionalmonthlyrentunderthis Lease (the "Additional Monthly Rent"). Payment ofthe 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 chargedby Landlord foruse ofaircrafttie downs on the Public AirportFacilities tin1es the mnnber oftie downs reserved by Tenant. The Additional MonthlyRent shall be adjusted from tin1e to tin1e to coincide with any change in the rate charged by Landlord to the public for use oftie downs owned andmaintained byLandlord as part ofthe PublicAirportFacilities.
6.5. ADDITIONAL RENT. Any other monetary obligation of Tenant to Landlord underthe terms ofthis Lease shall be deemed rent and payment thereofshall accompany the next Monthly Base Rentpaymentmade by Tenantto Landlord.

Page 6 of366.6. LATE PAYMENT INTEREST. IfLandlord 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 paymentthen due atthe rate oftenpercent (10%) per annum. Suchinterestcommences onthe date the rent is due and aCClUes until such rent is paid. IfTenant 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 ofwhether 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 earlytermination ofthis Lease.
6.7. NET RENT. It is the intention ofthe Parties that the rent specified in the Lease shall be net to Landlord in each year during the Tel'll} ofthis Lease. Accordingly, all costs, expenses and obligations ofevery kind relating to the Premises (except as otherwise, specifically provided in this Lease) thatmay arise orbecome due during the tenn ofthis Lease shallbe paidby Tenant, and Tenant shall indemnify Landlord against such costs, expenses and obligations. However, the rentto be paid underthis Lease is in addition to, and not in lieu of, any requirement to pay any charges orfees thatmay be establishedpursuanttothe AirportRules and any applicable license orpelmitfees requiredpursuanttothe ChandlerCity Code andlorthe AirportRules.
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 ofLandlord, 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 orpermitrequiredbythe ChandlerCity Code and/ortheAirport 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 ofor 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. Pennittedcommercial aviation activities include: (a) Each of the following services: aircraft fueling; aircraft line services; aircraft storage; and customary services to general aviationusers, such as public restrooms, waiting lounges, conferencerooms, crew lounges andflightplanning; and (b) At least three (3) ofthe following services: hangar/shade leasing; aircraft sales services; aircraft maintenance and repair services; aircraft leasing or rental services; flight
Page 7 of36training; specialized aircraft repair services and sales; aircraft charter services; specialized commercial flying services and aircraftmanagement services.
7.2. PROHIBITED USES. The following activities are specifically excluded and prohibited unless priorwritten approval has been granted bythe AirportAdministrator: (a) Groundtransportation for hire. (b) Providing space, including tie-down areas, for other than Tenant's own customers whose aircraftis being serviced. (c) Sale ofinsurance otherthan 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 bythe Landlordto do business on theAirport. (e) Advertising concession (posters, privileges, publications, and othermedia). (f) Food sales, except through coin-operated vending machines as provided in Paragraph 7.4, and except as allowedunderParagraph7.3 below. (g) Paragraph 7. I. (h) (i) News and sundry sales not associated with the primary services listed in

Barber, valet, andpersonal services. Sale ofautomotive fuel, lubricants, andpropellants. G) Storage ofsurplus (inoperable) aircraft except in areas, and ofa number, to be designatedbythe AirportAdministrator. (k) Retail sale ofnon-aviationproducts. (I) Sale of aviation fuels and lubricants except in the ordinary course of Tenant's business permittedpursuantto Paragraph 7.1. 7.3. RESTAURANT SUBLEASED. In recognition ofthe existing restaurant facility on the Premises, which is operated by an existing subtenant ofTenant, the Parties agree that the existing restaurant facility may continue to be operated by the subtenant ofTenant during the Term ofthis 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 ofthis Lease and are expressly made subject to this Lease; and (c) a copy ofthe sublease has been received and deemed acceptable by Landlord. No expansion of the restaurant use or floor area and no alteration ofthe exterior ofthe existing restaurant facility shall be permitted unless written approval is first obtainedbyTenantor its subtenantfrom Landlord.

Page 8 of367.4. 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 onthe Premises and for the exclusive use ofTenant'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, butnot limitedto, 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 ofthe United States ofAmerica, the State ofArizona, the County ofMaricopa, and the City ofChandler and all agencies thereof, that are now in effect orhereafterpromulgated; and further, Tenant will displayto Landlord any and all permits, licenses orotherevidence ofcompliance with all laws upon requestofLandlord. 7.7. HAZARDOUS MATERIAL. (a) As usedherein, "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 adjacentto the Premises or in, on or adjacentto any portion of the Airport without (i) obtaining Landlord's prior written approval, (ii) providing Landlord with thirty (30) days prior written notice ofthe exact amount, nature, and manner ofintended 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, butnot limitedto, the obtaining ofall properpermits. (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 ofthe 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) IfTenant's storage, use or disposal ofany 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 orpolicies 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 of36against 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 ofany Hazardous Material on or aboutthe Premises orthe Airport. (e) Notwithstanding any other right ofentry 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 ofthis Lease for the purpose ofdetermining: (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, ifany, required ofTenant to ensure the safe use, storage and disposal ofHazardous 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 ofobtaining laboratory samples. Landlord shall not be limited in the number ofsuch inspections during the Term. If, during such inspections, it is found that Tenant's use of Hazardous Material constitutes aviolation ofthis Lease, Tenant shall reimburse Landlord for the cost ofsuch inspections within ten (10) days ofreceipt ofa written statement therefor. Ifsuch consultants determine thatthe 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. Theright grantedto Landlord herein to inspectthe Premises shall not create a duty on Landlord's part to inspect the Premises, or liability ofLandlord for Tenant's use, storage or disposal ofHazardous Material, itbeingunderstood thatTenant shall be solely responsible for all liability in connectiontherewith. (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 maybe imposedbyLandlord. (g) Tenant's obligations under this Paragraph 7.7 and all indemnification obligations ofTenant under this Lease shall survive the expiration or earlier termination ofthis Lease. 8. TENANT'S CONDUCT OF BUSINESS. In conducting commercial aviation activities on the Premises or atthe Airport, Tenant shall act as follows: 8.1. NONDISCRIMINATION. Tenant agrees that: (a) In the operations to be conducted pursuant to the provisions ofthis Lease and otherwise in the use ofthe Airport, Tenantwill not discriminate orpel111itdiscrimination against Page 10 of36any person or class ofpersons by reason ofrace, color, creed, or national origin in any manner prohibitedby any ofthe FAA Regulations orany amendments thereto. (b) Tenant shall furnish its accommodations and/or services on a fair, equal and not unjustly discriminatory basis to all users thereofand it shall charge, fair, reasonable and not unjustly discriminatory prices for each unit ofservice; 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 ofthis Lease. In the event ofsuch noncompliance, Landlord may enforce compliance, terminate this Lease, orpursue such otherremedies as maybeprovidedby law. Landlord also reserves the tightto take such action as the appropriate state or federal authority may directin orderto enforce compliance. (e) Tenant agrees that it shall insert the above four (4) proVISIOns in any sublease, agreement or contractby which said Tenant grants aright or privilege to any person, fIrm orcorporationto render accommodations and/or services to the public onthe 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 AirportRules. (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 ofany planned material modifIcation or alteration to the exterior ofany presentorfuture building or structure situatedonthe Premises. (c) Tenant shall not erect nor pennit the erection ofany structure or object, nor permit the growth ofany 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 cutthe offendingtree, all ofwhich shall be atthe 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 of369. 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 atthe 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, ifany 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 shallbepursuantto the AirportRules and shall notbe deemedrentunderthis Lease, butthe failure to have suchpennitat anytime duringthe Term shall constitute amaterial breach ofthis Lease. 9.2. APPLICABLE LAWS. Tenants rights underthis Lease shall be subjectto all ofthe following matters that are now in effect orthat may be in effect in the future during the Tenn: (i) applicable state and federal law; (ii) applicable city codes, ordinances, rules andregulations 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 oftheAirport. 9.3. AIRSPACE RESERVATION. There is hereby reserved to Landlord, for the use and benefit ofthe public, a right offlight for the passage ofaircraft in the airspace above the surface ofthe Premises and the Airport, together with the right to cause in said airspace such noise as may be inherent inthe operation ofaircraft, now known orhereafterused for navigation ofor flight in the air, using said airspace for landing at, taking offfrom, 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 Americarelative 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 FederalAviationAct. 9.6. USA EMERGENCY RIGHTS. This Lease and all the provisions hereofshall be subjectto whateverrightthe United States ofAmericanow has, or inthe future mayhave ormay acquire, affecting the control, operation, regulation, and taking over of the Airport for the exclusive or nonexclusive use ofthe Airport by the United States ofAmerica during a time of war ornational 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 ofthe Airport Rules; however, ifthere is any conflict between the provisions in Page 12 of36Section 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 ofthe policy or policies. Evidence ofsuch insurance shall be provided to Landlord promptly after a requesttherefor. It is understood and agreed that, notwithstanding any other insurance requirement, hangar keeper's liability insurance is required ifaircraft 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 ofanykind and nature for personal injury ordeath orproperty damage arising out ofor resulting from any activity or operation ofTenant on the Premises or in connection with its use ofthe Premises; provided, however, that Tenant shall not be liable for any injury, damage or loss occasionedby the sole negligence orwillful misconduct ofLandlord, its agents or employees. Landlord shall giveto Tenantprompt andtimely notice ofany claim made or suits institutedwhich in any way, directly or indirectly, contingently or otherwise, affects or might affect Tenant and Tenant shallhave the rightto compromise and defend the sameto the extent ofits own interest. (b) Tenanthereby assumes all riskof, andwaives all claim againstLandlord, 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 ofLandlord, 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 ofthe 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 atthe Airport. (a) As part ofits 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 itselfor engage the services ofajanitorial fmn, all suchjanitorial 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 ofthe 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 ofthe Tenant's maintenance obligation, including, but not limited to, Tenant's obligation for providing janitorial and custodial services,providedthat 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 of36maintain the proper standard ofjanitorial and custodial service, and Tenant shall have failed adequately remedy the failure within thirty (30) days ofthe 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 orthe 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 ofthe additions, alterations ormodifications. Landlordreserves the rightto have Tenant remove, atTenant's sole expense, all orany ofsuch alterations, additions or modifications atthe end oftheTerm. 12. PUBLIC AIRPORT FACILITIES. 12.1. LANDLORD'S CONTROL OFAIRPORT. (a) Landlord reserves the right, in its sole discretion, to detennine the nature and extent ofthe Public AirportFacilities. (b) Landlord has the rightto establish and from time to time change, alter and amend the AirportRules, orsuch other reasonable rules and regulations, as may be necessary or desirable for the proper and efficient operation and maintenance ofthe Airport and the Public AirportFacilities. (c) Landlord shall have the sole and exclusive control ofthe Public Airport Facilities, and may, at any time and from time to time during the Term, exclude any person from use or occupancythereof. (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 AirportFacilities. (e) Notwithstanding any ofthe provisions ofthis 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 ofconstruction. 12.2. MAINTENANCE. Landlord shall maintain or causeto 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 of3613. ASSIGNMENT AND SUBLETTING. 13.1. LANDLORD'S CONSENT REQUIRED. Tenant shall not volnntarily or by operation oflaw, 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 ofthe 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 ofthis 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 ofthe Tenant with another corporation, inclnding one formed by Tenant and created to carryon the purposes ofTenant. In snch event, notice to Landlord ofthe mergerorconsolidation shallbe snfficient. 13.2. HANGAR STORAGE. Notwithstanding Paragraph 13.1, ifTenant 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 ofthe improvements on the Premises to third parties without prior written consent ofLandlordprovidedthat: (a) The use ofan individual hangal" unit that is sublet or assigned is for the primary purpose ofparking and storage ofan aircraft ownedby orunder 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 conflictwith, and expressly made subjectto, all oftheprovisions ofthis Lease; and (c) Tenantprovides to the AirportAdministratoron a quarterly basis a listthat identifies the name ofeach subtenant or assignee or other holder ofan interest in a hangar unit (and where said person is a partnership, corporation or other business entity, the name ofits principal contact) andthe tail number ofeach aircraft stored orparked in the unit. 13.3. NO RELEASE OF TENANT. Regardless ofLandlord's consent, no subletting or assignment shall release Tenant ofTenant's obligations or alterthe primary liability ofTenant to pay the rent and to perform all other obligations to be performed by Tenant hereunder. The acceptance ofrent by Landlord from any other person shall not be deemed to be a waiver by Landlord ofany provisions hereof. Consentto one assignment or subletting shall not be deemed consentto any subsequentassignment or subletting.
13.4. TRUST DEED BENEFICIARIES AND MORTGAGEES. Notwithstanding Paragraph 13.1, Landlord agrees that it will consent to Tenant's assignment ofthis 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 ofCity'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 of3614. UTILITIES, TAXES, FEES AND EXPENSES. Tenant shall pay all utilities used in its operation ofthe Premises atthe Airport during the term ofthis Lease, and suchutilities shall be on the basis ofmetered charges. Tenant shall make timely payment ofall taxes and assessments if any, levied against the Premises, or against Tenant's business operation at the Premises. Tenant shall be responsible for payment ofall fees and expenses for all permits and licenses necessary for the conductofTenant's business uponthe Premise duringthe 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 periodthat the same are so untenable orunusable. 16. DEFAULTS; REMEDIES. 16.1. DEFAULTS BY TENANT. Except as provided in Paragraph 17 below, the occurrence of anyone or more ofthe following events shall constitute a material default and breach ofthis Lease by Tenant: (a) The vacating or abandonment ofthe Premises by Tenant for more than ten (10) days. (b) The failure by Tenant to make any payment ofrent or any other payment requiredto be made byTenantwithin fifteen (15) days ofthe datewhen due. (c) The failure by Tenant to observe or perform any of the covenants, conditions orprovisions ofthis Lease to be observed orperformedbyTenant, other than described in Paragraph 16.I(bl above, where such failure continues for a period ofthirty (30) days after written notice thereoffi'om Landlord to Tenant. Provided, however, that ifthe natme ofTenant'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 thereafterdiligently prosecutes the sameto completion. (d) Any ofthe following: (i) the making by Tenant ofany general assignment or general arrangement for the benefit ofcreditors; (ii) the filing by or against Tenant ofapetition to have Tenant adjudged bankrupt or a petition for reorganization or arrangement under any law relating to bankruptcy (unless, in the case ofa 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 ofTenant's assets located at the Premises or ofTenant's interest in this Lease, where possession is not restored to Tenant within thirty (30) days; or (iv) the attachment, execution, or otherjudicial seizure ofsubstantially all ofTenant's assets located atthe Premises or ofTenant's interestinthis Lease, where such seizme is notdischargedwithinthirty (30) days. (e) The chronic delinquency by Tenant in the payment ofmonthly 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 underthis 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 of36month 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 anytime thereafter, with or without notice or demand and without limiting Landlord in the exercise ofany other right or remedy which Landlord may have by reason ofsuch 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 ofTenant's default including, but not limited to, the cost ofrecovering possession ofthe Premises and the expenses of reletting, including necessaryrenovations and alterationofthe Premises. (b) Pursue any other or additional remedy now or hereafter available to Landlord under the laws ofthe State ofArizona, including, without limitation, the imposition ofa landlord's lien against anyproperty located within thePremises. (c) The remedies setforth herein shall be deemed cumulative and not exclusive. (d) No waiver of default by Landlord of any of the terms, covenants or conditions hereofrequired to be kept and observed by Tenant shall be construed to be or act as a waiverby Landlord ofany subsequentdefault ofany oftheterms, covenants and conditions herein containedto be performed, kept and observedby 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 laterthan 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 thanthirty (30) days are required for performance, then Landlord shall not be in default ifLandlord commences performance within such 3D-day peliod and thereafter diligentlyprosecutes the same to completion. (b) In the event ofany material default orbreach byLandlord, Tenantmaytake whatever steps are permitted under applicable law to terminate this Lease and/or to recover its damages from Landlord. (c) No waiver ofdefault by Tenant ofany ofthe terms, covenants or conditions hereofrequired to be kept and observedby Landlord shall be construed to be or act as a waiverby Tenant ofany subsequentdefault ofany ofthe terms, covenants and conditions herein contained to be performed, kept and observedby Landlord. 16.4. CANCELLATION BY TENANT. In addition to any other right ofcancellation herein given by Landlord or any other rights to which Tenantmay be entitled by law or otherwise, Tenant may cancel this Lease in whole or in part and tenninate all ofits obligations hereunder at Page 17 of36any 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 ofanyone ofthe following events: (a) The failure or refusal ofthe Federal Aviation Administration, at any time during the Term ofthis Lease, to pennit Tenant to operate into or from the Chandler Municipal Airport. (b) Issuance, by any COUIt ofcompetentjurisdiction, ofan injunction in any way preventing or restraining the use ofthe Airport or any part thereoffor airport purposes which affects Tenant's operation; and the remaining in force ofsuch injunction for a period ofat least ninety (90) days ifthe injunctionmaterially affects Tenant's normal operations. (c) The inability ofTenant to use, for a period in excess ofninety (90) days, the Airport or any ofthe premises, facilities, rights licenses, services, or privileges leased to Tenant hereunder because ofany 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 othercasualty or acts ofGod orthe public enemy. (d) The assumption bythe United State Government or any authorized agency thereofofthe operation, control, or use ofthe Airport and facilities, or any substantial part or parts thereof, in such a manner as substantially to restrict Tenant for a period ofat least ninety (90) days, from operating thereon for the conductofTenant'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 ofSection 38-511, ArizonaRevised Statutes.
17. CONDEMNATION. Ifthe Premises is taken under the power ofeminent 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 ofthe date the condemning authority takes title or possession, whichever first occurs. Ifcondemnation 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 ofthe 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 entitledto any award separately designated for Tenant's relocation expenses, or for damage to or taking ofTenant's trade fixtures or other personal property; and further provided that Tenant shall be entitled to the portion ofthe condemnation proceeds attributable to the taking ofany 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 aresult ofcondemnation. 18. SUSPENSIONAND ABATEMENT; FORCE MAJEURE. In the eventthatLandlord's operation ofthe Airport, or Tenant's operations at the Airport, is restricted substantiallyby action ofthe Federal Government, or any agency thereof, then either party hereto shall have the right, upon writtennotice to the other, to a suspension ofthis Lease and an abatementofajustproportion Page 18 of36ofthe services and facilities to be afforded hereunder, or ajust proportion ofthe 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, onpaymentofthe rent and performance of the covenants and agreements on the part ofthe Tenant to be perfonned hereunder and subject to any conditions stated inthis Lease, Tenant shall peaceablyhave and enjoy the Premises and all the rights and privileges oftheAirport, its appurtenances and facilities grantedherein. 20. SURRENDER OF POSSESSION. Upon the expiration of the Term or earlier termination ofthis Lease, Tenant's right to use the Premises and the improvements thereon, and any right ofaccess 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 conditionexceptfornonnal wear ortear. 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 includedherein. 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 ofits obligations hereunder, or in the exercise ofits goverrunental functions, or for fire protection or securitypurposes. 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 behalfofthe party giving the notice and addressed to the otherparty atthe address as set forth below: To Landlord:

With a copyto:

To Tenant: AirportAdministrator ChandlerMunicipal Airport 2380 South Stinson Way Chandler, Arizona 85249 FaxNo.: (480) 782-3541 CityAttorney CityofChandler Mail Stop 602, Post Office Box 4008 Chandler, Arizona 85244-4008 FaxNo.: (480) 782-4652 Chandler Air Service, Inc. 1675 EastRyan Road Chandler, Arizona 85249 Fax No.: (480) 963-7639

Page 19 of36Each party may by notice in writing change its address for the purpose ofthis Lease, which address shall thereafter be used in place ofthe former address. Each notice, demand, request, consent or other communication which shall be given to any ofthe 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 notconstitute notice pursuantto 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 orterminated unless the same is in writing executed by bothparties hereto. 21.5. APPLICABLE LAW. Arizona law shall govern the construction, performance and enforcementofthis Lease. 21.6. TIME OF ESSENCE. Time shall be ofthe essence in the performance ofevery term, covenant and condition ofthis Lease. 21.7. HEADlNGS. The paragraph headings contained herein are for convenience in reference and are not intendedto define orlimitthe scope ofany provision ofthis Lease. 21.8. WRITlNG. Any and all approvals, consents, and notices called for in this Lease shallbeinwriting. 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 heldto be invalid by any court ofcompetentjurisdiction, the invalidity ofany such covenant, condition or provision shall in no way affect any othercovenant, 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 inthe valid covenants, conditions orprovisions ofthis Lease.

- 21.11. NO RECORDING; MEMORANDUM OF LEASE. Without the prior written consent ofLandlord, this Lease shall not be placed ofrecord. However, upon execution hereof, the Parties shall execute and cause to be recorded a Memorandum ofLease substantially in the form attachedhereto as Exhibit "E" in orderto 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 setforth: Exhibit "A" Exhibit "B" Premises Legal Description Diagram ofPremises and SurroundingAirport Features Page 20 of36Exhibit "C" Exhibit "D" Exhibit "E" Required Insurance City's Consent and Agreement Memorandum ofLease
IN WITNESS WHEREOF, the pmties hereto have caused this Lease to be executed as ofthe day and yearfirst abovewritten. LANDLORD: CITY OF CHANDLER, an Arizonamunicipal corporilticm

Its: Mayo);/"

APPR9VED AS TO F9R¥

.

•... '.' (" >, !,; r" /.i

.. {( 1/ / '-<! 

# (L
«,.,",J '.'

..**,~'-".........,.<** City Attorney TEN T: CHANDLERAIR SERVICE, INC., an rizo acorporation

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

Page 21 of36EXHIBIT "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 ofSection 11, Township 2 South, Range 5 East ofthe Gila and SaltRiverBase and Meridian, Maricopa County, Arizona, being more particularly as follows:
COMMENCING atthe center ofsaid Section 11; Thence North 00 degrees 14 minutes 21 seconds West, along the North-South Mid-Section line ofsaid Section 11, adistance of1,321.92 feet; Thence North 89 degrees 07 minutes 16 seconds East, along the North line ofChandlerAirport, 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, adistance 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 of320.00 feet to the TRUE POINT OF BEGINNING.
Parcel No. 2 A part ofthe Northeast quarter ofSection 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 atthe center ofsaid Section 11; Thence North 00 degrees 14 minutes 21 seconds West, along the NOith-South Mid-Section line ofsaid Section 11, adistance of1,321.92 feet; Thence North 89 degrees 07 minutes 16 seconds East, along the North line ofChandler Airport, adistance of1,117.00 feet; Page 22 of36Thence South 00 degrees 52 minutes 44 seconds East, a distance of 34.00 feet to the TRUE POINT OF BEGINNING ofthis description; ThenceNorth 89 degrees 07 minutes 16 seconds East, a distance ofl99.00 feet; Thence South 00 degrees 52 minutes 44 seconds East, adistance of400.00 feet;
Thence South 89 degrees 07 minutes 16 seconds West, a distance of199.00 feet; Thence North 00 degrees 52 minutes 44 seconds West, a distance of400.00 feet to the TRUE POINT OF BEGINNING.
Parcel No. 3
A part ofthe Northeast quarter ofSection 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 atthe 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 ofthe Southwest quarter oftheNortheastquarter ofsaid Section II; Thence North 89 degrees 07 minutes 17 seconds East, along the North line ofsaid Southwest quarter, adistance of1,117.00 feet; Thence South 00 degrees 52 minutes 44 seconds East, a distance of434.00 feet to the TRUE POINT OF BEGINNING; ThenceNorth 89 degrees 17 minutes 17 seconds East, adistance of199.00 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 ofI 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 ofSection II, 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 ofsaid Section 11, said comer being a brass cap in a handhole, from which the South quarter corner ofSection 11 a brass cap flush, bears South 00 degrees 20 minutes 37 seconds East, adistance of5,289.84 feet; Page 23 of36Thence, South 00 degrees 20 minutes 37 seconds East along the North-SouthMid-Section line of Section 11, adistance of 1,321.72 feet; Thence, North 89 degrees 10 minutes 47 seconds East along the North line ofChandler 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, adistance of 120.00 feet; Thence, South 00 degrees 49 minutes 13 seconds East, a distance of320.00 feet along the West line ofParcel 2 as described in Document No. 20110662072, Maricopa County Records, to the POINT OF BEGJNNJNG.

Page 24 of36EXHIBIT "B"
DIAGRAM OF THE PREMISES AND SURROUNDING AIRPORT FEATURES

Page 25 of36AirportLayoutPlan modified (orImUBI dfsclJssion purposes & does notcon/alnALPelements in l11eirentirety

M I XED LAND USE**.'''.-** ., "'•..,...,,·.....**Jiti~-M_~_-** ..- "j'-'**,-"",",',~--~ ------_.~---­**  " ,...".,.;;.**~~=-:..-::-**

### ~~., 

# ." 

# r Oc •• ,. ,', ••,,,>,.:, i' ",.,< 

### l:'

. 

### d I'.' ,., 

## ).:1 \,,\ ,I

## ",~.:\ ))**\:{.~7**

... ,->TAl''''''**""'~** ...**~~- ~unJ.llF**  IllIlID'Nr,."**FIIC'~'71~S** E",sn"G**mJl"'h"'~** I**""C'.U!I~** """'

....."".

Of:vEI...C'P_M1JH**ST~(;ES ~.**  ..."".**",-~** 

### ...",,,,,

### ...,,,,,,",,,"",,""

### ... ""'"

..-."'

......

### ~,~~~1~T§~:~Elf:,

### I"·'·I"'~·"I

n,·,·g I**-+R-;7;:~:~~" i::.~:'fi')i,?!_** **:';1'i".':~·,,~,,~ c._~_** 

# /" { ' "',,,,,,,,,, ",8£.,. /' "" 

# ,"

.." .::::- "?' //7'\:'"7:- - " /"

;. / :' /

### ~.1J~ ii

### t l

### ~ir(€::,'~~"**~.** :: ,,,

### ...,,

### .... /\,:[1**'''I-:~/~~/** :'

. jl

- \j!**)-~::i.~~;,l~** I I M I >:: E D L",NO us::::

COMMERCIAL

LAND USE ! 

# !**l~''''''''''''O ::;~,i..f:**  I**t~M".~~""''''·**

COMMERCIAL lNDUSTRIAL

LAND USE <Ii

....."""""" EXHIBIT B DIAGRAM OF THE PREMISESAND SURROUNDING AIRPORT FEATUREs Chandler MunicipalAirport Lease Contract#015

,j

-- N D U S T R J NL



## ._**~~-** 

## $2-'7 !!i'**-"':,~~!b'Ii1) ~\**  .::ifiIIJi-- I', -j

..**"1~"** r .,.,...., COM M E,R C l A L

p."''''-'**~~r:f**

# .. W.',<t..x:,'ftl" .......,"""","""""'.'

"''''''',,.,,**~ji,;~"** .,........**""".Ft~~** l rlref' 

## </0
®/**';;):-;~~\-''':;f****J,~'?t~E*,,"''''**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 aresult 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 inthe amount ofa 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 inthe 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 perperson, $500,000 disease policy limit.
5. Aircraft liability insmance inthe amount ofat least $1,000,000 per occurrence. 6. Hangar keeper's liability insurance in the amount of at least $500,000 per occurrence, ormore as values require.
7. Fueling products-completed liability insurance m the amount of at least $5,000,000 perOCCUlTence.
8. Products-completed operations liability insurance in the amount of at least $2,000,000 perOCCUlTence.
9. Chemical and environmental clean-up liability insurance in the amount ofat least $1,000,000 per occurrence or such greater or lesser amount ofcoverage as approved in writing bythe City ofChandlerRiskManager.
10. Non-OwnerlRenterlStudent pilot liability in the amount ofat least $100,000 per OCCUlTence. 11. Such other insurance as the City's RiskManager may reasonably determine to be necessary for commercial aviation operator's activities conducted at or upon the Premises.

Page 26 of36B. All insurance policies cited herein shall contain a waiver of subrogation rights endorsementwithrespectto 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 ofinsurance evidencing the required coverage cited herein on or before the Effective Date. Such certificates shall provide for unequivocal thirty (30) day notice ofcancellation or material change ofany 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 ofthis 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 of36EXHIBIT "D" CITY'S CONSENT AND AGREEMENT (For Financing Purposes) Description ofGround Lease.

!1Tenant":
"Leaset1 : "Leasehold":

!1Lender": City ofChandler, an Arizonamunicipal corporation
ChandlerAir Service, Inc., anArizonacorporation
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 ofTenant's interest in the Leasehold to Lender for security purposes under the Lender's Deed ofTrustupon closing of the loan. Herein the term "Deed ofTrust" shall mean the Lender's Deed ofTrust as may be applicable and the "Lender" shall mean , as its/their interests appear in the Deed ofTrust. 2. Status ofLease. A true and correct copy ofthe 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 "LeasedPremises").
3. Non-Default. Tenant is not in default (a) in the payment ofrent or any other amounts due and payable by Tenant to City under the Lease or (b) to the actual knowledge ofCity, in the observance or perfoffi1ance ofany other covenant or condition to be observed or performed by Tenant under the Lease. To the actual knowledge ofCity, no event has occurred which now does orhereafterwill authorize City to terminate the Lease.
4. Right to Foreclose Deed ofTrust. Lender recognizes that any Deed of Trusttaken by Lender affects and applies onlyto Tenant's interest in the Leasehold and that City Page 28 of36will not permit any security interest to be taken in any ofits land or to encumber its fee interest in any ofits land. Inthe event ofdefault by Tenant underthe terms ofthe Deed ofTrust, 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 ofForeclosure or by actual foreclosure Uudicial or non-judicial) without further consent ofCity, subjectto the requirements ofParagraph 6.4 below;
4.2. Rent the Leased Premises pending foreclosure ofthe Leasehold by Lenderwithout further consent ofCity; and
4.3. Assign and sell the Leasehold in whole or in part to any person or entity, subjectto 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 ofTrust 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 ofChandler and BenefIciary." 5. Surrender oftheLeased Premises. No surrender ofthe LeasedPremises or any other act ofTenant 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 consentedto the termination in writing.
6. Notice ofDefault and Lender's Rights.
6.1. Notice ofDefault. IfTenant defaults under the Lease or ifany event occurs which would give City the rightto terminate, modify, amend or shorten the term of the Lease, City shall take no steps to exercise any right itmay have underthe Lease without fIrst giving Lender written nqtice ofsuch default. A copy ofeach 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 ofDefault shall specify the event or events ofdefault then outstanding and the time period at the end of which the indicated action wouldbecome 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 ofLender's receipt ofNotice, and kept currentthereafter.

Page 29 of366.3. 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 ofits 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 ofnotification 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 otherperformances that may be required or come due underthe Lease.
7. Termination Due to Bankrnptcy. City shall not terminate the Lease because ofTenant's breach ofany term(s) ofthe Lease relating to the solvency ofLessee or the institution ofany 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 ofanature which requires immediate abatement as a result ofwhich Lender would not normally pursuerealization onthe collateral, and Tenanthas nottaken steps to immediately cW"ethe default, the Lender must take immediate steps to cure such defaultwithin ten (10) days ofreceiptofnotice or else the City mayterminate the Lease. 9. Release ofDeed of Trnst. Upon termination ofthe Lease as provided herein, Lender shall release its Deed ofTrustwithin fifteen (15) days thereafter.
10. Assumption ofthe Lease. IfLenderacquires the interest ofTenant at any time or takes possession ofthe 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 ofa foreclosure under the Deed ofTrust, shall the Trustee under the Deed ofTrusttransfer the Leasehold to any person or entity (other than Lender) without first obtaining the written consent ofCity 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 ofthe 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 of36Upon the purchaser's, assignee's or transferee's assumption and agreement to perfonll and to be bound by all ofthe terms ofthe Lease, Lender shall be relieved offurther liability under the Lease. However, ifLender finances the purchaser, assignee or transferee, Lender shall again be subjectto all the obligations set forth inthis Agreement.
12. Disposition ofInsurance and Condemnation Proceeds. City shall be named as an additional insured under any ofTenant's casualtypolicies on the Leased Premises to the extent ofthe interests stated inthis Paragraph 12. Shouldthe 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 ofCity'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 ofCity'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 ofthe Lease, or in the same condition as at the time ofthe casualty. Underthe Lease, City has the option ofrequiring Tenantto demolish the Improvements at the end ofthe lease tenn, or to have Tenant convey title to City ofTenant's interests in the Leasehold Improvements. In the event the Leased Premises and the Leasehold are so severely damagedthat Tenant's andLenders' decision is not to repair orrestore the Leased Premises, City shall participate inthe insurance proceeds to the extentnecessary 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 inthe same condition as at the time ofthe 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 Lenderhave any interest in City's condemnationproceeds, ifany. 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 ofTenant or Lender therein, including without limitation, any suit, action, arbitration proceeding, condemnation proceeding or insurance claim. City, upon instituting or receiving notice ofany suchlitigation, arbitration or dispute will promptlynotifY Lender ofthe same. 14. Incorporation ofMort!!a!!ee Protection Provisions. To the extent not inconsistent with this Agreement, all provisions ofthe Lease that by their terms are for the benefit ofany leaseholdmortgagee, are hereby incorporatedherein forthe 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 maybe affixed to orplaced upon the LeasedPremises. "Trade fixtures" means the movable personal property ofTenant 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 of36the above trade fixtures by reason ofsuch 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 bythe parties; and, withoutlimiting the generality ofthe foregoing shall notbe deemed modified by any course ofdealing. No provision in the Deed ofTrust, 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 ofany conflict between the terms ofthis Agreement and the Lease, this Agreement shall control.
17. Fees & Costs. In the event oflitigation or arbitration between the parties to enforce or interpret this Agreement, the arbitrator, Board ofArbitration 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 ofthe amount in controversy, plus costs and costs of collection.

18. Notices. All notices, copies ofnotices, consents or other communications givenhereunder 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, addressedto that party; (c) delivery by overnight courier; (d) telephone facsimile with receipt confirmed; or (e) ifgiven 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 ofa party shall be the address ofthe party shownbelow or such other address as thatparty, from time to time, may specifYbywritten notice to the otherparty: Ifto Lender:

Ifto City: AirportAdministrator ChandlerMunicipal Airport 2380 South Stinson Way Chandler, Arizona 85249 Fax No.: (602) 782-3541
With copy to: CityAttorney City ofChandler Mail Stop 602, Post Office Box 4008 Chandler, Arizona 85244-4008 Fax No.: (602) 782-4652
Page 32 of36IN 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 of36SCHEDULE A To City's Consent and Agreement (Exhibit--->
Copy ofLease

Page 34 of36EXHIBIT "E"

Whenrecorded, return to:

MEMORANDUM OF LEASE

This Memorandum ofLease is made as ofthis

__ day of , 20--, by and between the City ofChandler, an Arizona municipal corporation, with an office at the Chandler Municipal Airport, 2380 South Stinson Way, Chandler, Arizona 85249 (hereinafterreferred 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 ContractNo.

__ (the "Lease") on the

__ day of ,20_, pursuantto which Tenant is permitted to make use and take possession ofcertain undeveloped real propeliy for specifiedcommercial aviation activities, all as set forth inthe 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. Thereal property leased to Tenantunder the Lease is described in attachedExhibit "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 ofthe date specified above.

LANDLORD: CITY OF CHANDLER, an Arizonamunicipal corporation By: Its:

_ TENANT:

_ By: Its:

Page 35 of36