Airport Lease Agreement with Vermillion.pdf

AIRPORT LEASE AGREEMENT

between

CITY OF BUCKEYE, ARIZONA

and

VERMILLION DEVELOPMENT, LLC, an Arizona limited liability company

Dated as of
January 20, 2026

THIS AIRPORT LEASE AGREEMENT (this “Agreement”) effective as of this 20th
day of January, 2026, by and between the CITY OF BUCKEYE, ARIZONA, an Arizona municipal
corporation (“City”), and Vermillion Development, LLC, an Arizona limited liability company (the
“Lessee” and, together with City, the “Parties” and each a “Party”).

RECITALS

WHEREAS, City of Buckeye is the owner and operator of the Buckeye Municipal Airport,
City of Buckeye, Arizona (the “Airport”);

WHEREAS, City has the right, title and interest in and to the real property on the Airport,
together with the facilities, easements, rights, licenses, and privileges hereinafter granted, and has full
power and authority to enter into this Agreement in respect thereof;

WHEREAS, City has the authority to lease land at the Airport in accordance with Ariz.
Rev. Stat. § 28-8425.

WHEREAS, City owns that certain real property located within the Airport legally described
on Exhibit “1” attached hereto and made part hereof which consists of 4,900 square feet of
unimproved land adjacent to taxi lane (such real property, together with all rights, privileges,
easements and appurtenances benefiting such real property and all Preexisting Improvements, as
hereafter defined, are collectively referred to herein as the “Leased Premises”);

WHEREAS, City desires to continue to have and further develop the Leased Premises for
exclusively aeronautical purposes beneficial to the City and the general public;

WHEREAS, Lessee is qualified, ready, willing and able to undertake such commercial
development and/or use; and

WHEREAS, the Parties hereto wish to memorialize their agreement herein and they agree as
follows:

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing Recitals, which by this reference are
hereby incorporated into this Agreement, and the mutual covenants contained in this Agreement, the
Parties hereto hereby agree as follows:

ARTICLE I
LEASE OF LEASED PREMISES; TERM

Section 1.1 Lease of Leased Premises.

A. City hereby leases to Lessee, and Lessee hereby rents from City for its exclusive use
the Leased Premises generally depicted on Exhibit 1, all herein described rights incident thereto, for
and during the Lease Term and upon and subject to the terms, provisions and conditions herein set
forth. All improvements existing in, on or under the Leased Premises as of the Commencement Date,

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as hereafter defined, shall be referred to herein as “Preexisting Improvements”. All improvements
constructed by or on behalf of City from and after the Commencement Date, as hereafter defined,
shall be referred to herein as “City Improvements”. The “Leased Premises” shall be deemed to
include the Preexisting Improvements and the City Improvements, as hereafter defined. The Parties
contemplate that Exhibit 1 (Leased Premises) will be amended or updated to reflect a legal
description containing greater detail and/or accuracy, and the Parties will evidence their approval
thereof by initialing a new Exhibit 1 (Leased Premises), which shall be retroactive the Effective Date.

B. Section 1.2 Lease Term. The term of this Agreement (the “Lease Term”) shall be for a
period of [check the applicable box]:

| fifty (50) years (HANGAR SITE NOS. 2, 3, 4), commencing on , 20
(the “Commencement Date”), and unless sooner terminated pursuant to the provisions of this
Agreement, shall terminate on [n/a . 20_, if (a) the Lessee is not in default of this
Agreement and (b) Lessee’s Improvements located on the Leased Premises are in a good state
of repair and operating condition. [Not Applicable]

pd thirty (30) years (HANGAR SITE NO. 1), commencing on January 20. 2026 (the
“Commencement Date”), and unless sooner terminated pursuant to the provisions of this
Agreement, shall terminate on January 20, 2056, with an automatic extension of twenty (20)
years, for a maximum total of 50 years, as set forth in that certain Development Agreement
between the City of Buckeye and Vermillion Development, dated January 20, 2026 (the
“01/20/2026 Development Agreement”), if (a) the Lessee is not in default of this Agreement
and (b) Lessee’s Improvements located on the Leased Premises are in a good state of repair
and operating condition. The foregoing shall not preclude the Parties from entering into a new
lease in a form revised for the current time and requested provisions, to be effective
immediately after the expiration of Lease Term or sooner, and be at the then fair market value
of the Leased Premises as set forth in an appraisal report prepared by a certified general
appraiser, or as otherwise may be required by the Federal Aviation Administration (also
referred to as the FAA), with familiarity and experience in aviation and airport land appraisals
in the Maricopa County area. The parties will reasonably cooperate to select the appraiser. The
parties agree to share the appraiser’s fee equally, with each party bearing 50% of the total
appraiser’s fee. All new leases are subject to the approval of the governing body of the City
of Buckeye, Arizona. a

Lessee Initials

Section 1.3. Holding Over: Rights at Expiration.

A. If Lessee retains all or any portion of the Leased Premises after the expiration or
termination of the Lease Term by lapse of time or otherwise, such holding over shall constitute the
creation of a tenancy at will with respect to such retained portion, terminable by City at any time upon
thirty (30) days prior written notice to Lessee. Under such tenancy at will, Lessee agrees to pay to
City as liquidated damages, and not as a penalty, THREE AND 40/100 DOLLARS ($3.40) per day.
All provisions of this Agreement shall remain in full force and effect during such holdover period.

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Adobe Acrobat Sign Transaction Number: CBJCHBCAABAApIrq8t0k37EpB3PulNgdpHl1__hIRpdT

B. Lessee further agrees that, upon the expiration or termination of the Lease Term or
failure to enter into a new lease agreement in accordance with Section 1.2, the Leased Premises will
be delivered to City in as good a condition as when this Agreement began, reasonable wear and tear
and matters covered by insurance excepted and the Improvements, as hereafter defined, will be
delivered to City in as good a condition as when such Improvements were constructed, located,
installed, placed or erected in, upon or under the Leased Premises, reasonable wear and tear and
matters covered by insurance excepted.

C. Except as otherwise expressly set forth elsewhere herein, Lessee shall have no rights
with respect to any improvements made to the Leased Premises during the Lease Term that are not
otherwise required to be removed by City.

Section 1.4 —_ Inspection of Leased Premises; Access to Books and Records. City, through its
duly authorized agents, shall have at any reasonable time the full and unrestricted right to enter the
Leased Premises and the Improvements, as hereafter defined, for the purpose of periodic inspection
for fire protection, maintenance and to investigate compliance with the terms of this Agreement;
provided, however, that except in the case of emergency, such right shall be exercised upon reasonable
prior notice to Lessee and with an opportunity for Lessee to have an employee or agent present, and
will not interfere with Lessee’s construction or operations. Lessee agrees to provide any documents
that may be requested by City to determine compliance with this Agreement within thirty (30) days
of such request.

Section 1.5 Ownership of Leased Premises. City and Lessee intend and hereby agree that
the Leased Premises shall be and remain the property of City during the entire term of this Agreement
and thereafter.

ARTICLE I
RENTAL; SECURITY DEPOSIT

Section 2.1 Rent.

A. In consideration for the use of the Leased Premises herein granted, Lessee shall pay to
City the following rental amounts (the “Rent’’). The annual rent shall be in the sum of $0.25 per net
square foot, as determined and provided in Exhibit “1” and subject to retroactive adjustment upon
the final legal description, said sum being stipulated herein as TWELVE HUNDRED TWENTY-
FIVE AND 00/100 DOLLARS ($1,225) (sales tax included), payable in twelve equal monthly
installments of One Hundred Two and 08/100 Dollars ($102.08). Prior to the Commencement Date,
Lessee shall deposit with City, a sum equal to the first and last months’ Rent. As set forth in Section
2.3 herein, all subsequent rental payment will be due in advance on the first of each calendar month
thereafter.

B. Except for those years where the Rent is readjusted in accordance with Section 2.1(C).
the Rent for the Leased Premises shall be readjusted at the end of each two (2) year period during the
Lease Term, starting on the 1st day of February. 2028, and every two (2) years thereafter, on the basis
of the proportion that the then current United States Consumer Price Index for all urban consumers
(“CPI-U”) for the Bureau of Labor Statistics (Phoenix-area) bears to the November 2025 CPI-U,
which was 324.122 (1982-84 = 100).

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C. Upon each ten (10) year anniversary, the Rent for the Leased Premises shall be
readjusted as set forth in an appraisal report prepared by a certified general appraiser with familiarity
and experience in aviation and airport land appraisals in the Maricopa County area, or as otherwise
may be required by the Federal Aviation Administration (FAA). The parties will reasonably cooperate
to select the appraiser. The parties agree to share the appraiser’s fee equally, with each party bearing
50% of the total appraiser’s fee.

D. In no case shall the Rent readjusted in accordance with this Section be lower than the
previous readjusted Rent.

Section2.2 Late Charge. There shall be a service charge levied of the greater of (a)
TWENTY-FIVE AND 00/100 DOLLARS ($25.00), and (b) the bank’s fee on any check returned by
the bank for insufficient funds, account not existing, or for any other reason. Returned checks will
not be deposited Any rental payment not received within ten (10) days of its due date shall carry an
additional charge of one and one-half percent (1.5%) as a late penalty fee.

Section 2.3. Time and Place of Payments. The Rent, as well as all other charges hereunder,
shall be payable in equal monthly installments in advance on or before the first business day of each
calendar month of the Lease Term at City’s offices of the FINANCE DEPARTMENT, CITY OF
BUCKEYE, 530 EMONROE AVENUE, BUCKEYE, AZ, 85326, unless otherwise designated in
writing by the City.

Section 2.4 Delinquent Rent. In the event Rent due pursuant to Section 2.1 or any other
amounts payable by Lessee hereunder shall not be paid by Lessee on the due date thereof, Lessee
shall pay to City as additional Rent, an interest charge of five percent (5%), or the maximum
percentage allowed by law, whichever is greater, of the amount due for each full calendar month of
delinquency, computed as simple interest. No interest shall be charged until payment is thirty (30)
days overdue, but any such interest assessed thereafter shall be computed from the due date.

ARTICLE Il
OCCUPANCY, USE AND CONDITIONS OF LEASED PREMISES

Section 3.1 Condition of Leased Premises. Lessee accepts the Leased Premises in their
present “as is” condition. Lessee releases City and holds City and City’s officers, directors, elected and
appointed officials, employees, and agents harmless for any claims arising out of or related to any
condition of the Leased Premises.

Section 3.2. Construction and Ownership of Improvements.

A. Any and all buildings, structures, fixtures, appurtenances, site work, site utilities, or
other improvements to be located or constructed on the Leased Property by Lessee during the Lease
Term will be in accordance with Section 5.1, Plans and Specifications, and shall be known as
“Improvements”. Improvements” shall not include any Preexisting Improvements or City
Improvements. Any improvements that are constructed, located, installed, placed or erected at, upon
or under the Leased Premises or elsewhere at the Airport require the express prior written consent of

City,

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B. Lessor, at Lessor’s sole expense, agrees to provide the improvements, if any, as set
forth in the 01/20/2026 Development Agreement.

C. [Applies to Vermillion Development] Lessee Vermillion Development, at Lessee
Vermillion Development’s sole expense, agrees to provide the new-construction improvements as set
forth in the 01/20/26 Development Agreement.

D. No structure which does not fully comply with plans, specifications, and proposed
location approved in writing by Lessor shall be constructed or maintained on the Leased Premises.

E. Lessee will own the Improvements upon the Leased Premises during the Lease Term.
Effective upon the expiration or termination of this Agreement or the failure to enter into a new lease
agreement as set forth in Section 1.2, the Improvements shall become the property of City, without the
payment by City of any compensation or other consideration for any Improvements, and title to the
Improvements shall merge with the title of, or be otherwise considered and deemed a part of, the real
property of City, free and clear of any claim of Lessee and any persons or entities claiming under or
through Lessee including, without limitation, the trustee, beneficiary or holder of any mortgage or
deed of trust. Any other personal property of Lessee that can be removed by Lessee without material
damage to the Leased Premises or to the Improvements may remain the personal property of Lessee
and may be removed by Lessee at any time on or before the end of the Lease Term. Lessee shall, in
removing any such personal property, repair all damage to the Leased Premises and Improvements
caused by such removal.

Section 3.3 Access. City agrees that if Lessee is not in breach of this Agreement, Lessee and
Lessee’s employees (if any), officers, directors, sublessees (that are approved by City pursuant to this
Agreement), contractors, subcontractors, suppliers, agents, invitees, and other representatives
(‘“Lessee’s Associates”) are authorized to ingress and egress across the common areas of the Airport
(in the areas designated by City, for the purposes for which they were designed, and as permitted by
applicable Laws and Regulations as defined in Section 3.5) on a non-exclusive basis and to the extent
reasonably necessary for Lessee’s use, occupancy, and operations at the Leased Premises.

Section 3.4 Special Events. During special events at the Airport, including but not limited
to the Buckeye Air Fair, Lessee acknowledges that the standard operation procedure at the Airport
may be altered such that egress and ingress to the Leased Premises may be altered by City. City will
notify Lessee in writing of any special events or closures that will impede Lessee’s use of the Leased
Premises. Lessee’s failure to comply with the altered procedure is a default of this Agreement, and
City may proceed to terminate this Agreement.

Section 3.5 Use of Leased Premises and Compliance with all Laws and Regulations. Lessee
agrees that it shall use the Leased Premises and the Improvements only for aeronautical purposes and
Lessee and Lessee’s Associates shall comply at all times, at Lessee’s sole cost, with any and all laws
and regulations (as amended or otherwise modified from time to time) that are applicable to Lessee’s
business, if any and Lessee’s construction of the Improvements, if any, including those pertaining to
the construction of buildings on public property, and Lessee’s use, occupancy, or operations at the
Leased Premises, the Improvements or the Airport (the “Laws and Regulations”), which include, but
are not limited to, all laws, statutes, ordinances, regulations, rules, orders, writs, judgments, decrees,
injunctions, directives, rulings, guidelines, standards, codes, policies, common law, and other

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pronouncements of any kind having the effect of law that may be applicable at any time during the
term of this Agreement including, but not limited to, Chapter 22 of the Buckeye city code, “Municipal
Airport Rules and Regulations” (available online or through the City Clerk’s Office), as may be
amended from time to time, including the Minimum Operating Standards, master plans and zoning
codes, and all Laws and Regulations pertaining to the environment (the “Environmental Laws”); any
and all plans and programs developed in compliance with such requirements (including, but not
limited to, any Airport Security Plan); and all lawful, reasonable, and nondiscriminatory Airport
policies and other requirements. Lessee shall provide all required notices under the Laws and
Regulations. Upon a written request by City, Lessee will verify, within a reasonable time frame,
compliance with any Laws and Regulations. Further, in its use of the Leased Premises and the
Improvements, Lessee shall comply with the following:

A. Address. Lessee shall file with the Airport Director and keep current its mailing
addresses, telephone numbers, email addresses, and contacts where it can be reached in an emergency.

B. [Reserved].

Section 3.5 No Unauthorized Use. Lessee and Lessee’s Associates shall use the Leased
Premises, the Improvements and the Airport only for purposes that are expressly authorized by this
Agreement and shall not engage in any unauthorized use of the same. Unauthorized uses include,
but are not limited to, restricting access on any road or other area that Lessee does not lease; placing
waste materials on the Airport or disposing of such materials in violation of any Laws and
Regulations; any use that would constitute a public or private nuisance or a disturbance or annoyance
to other Airport users; driving a motor vehicle in a prohibited Airport location; the use of automobile
parking areas in a manner not authorized by City; any use that would interfere with any operation at
the Airport or decrease the Airport’s effectiveness (as determined by City in its sole discretion); and
any use that would be prohibited by or would impair coverage under either Party’s insurance policies
or would cause an increase in the existing rate of insurance upon the Leased Premise.

Section 3.6 Permits and Licenses. Lessee shall obtain and maintain in current status all
permits and licenses that are required under any Laws and Regulations in connection with Lessee’s
construction of Improvements and the use, occupancy, or operations at the Leased Premises, the
Improvements or the Airport. Those permits and licenses include, but are not limited to, (i) all
contractors doing work on the Leased Premises, including work on or for the Improvements, must be
licensed by the State of Arizona, (ii) prior to commencing construction of any Improvements, a
permit must be obtained from the City of Buckeye and a copy of the permit must be furnished to the
Airport Manager, and (iii) if applicable, clearance must be obtained from the responsible health
department or other agency. In the event that Lessee receives notice from any governmental entity that
Lessee lacks, or is in violation of, any such permit or license, Lessee shall provide City with timely
written notice of the same.

Section 3.7 Payment of Taxes. Lessee shall pay (before their respective due dates) all taxes,
fees, assessments, and levies that relate to Lessee’s use, occupancy, or operations at the Leased
Premises, the Improvements or the Airport and all other obligations for which a lien may be created
relating thereto (including, but not limited to, utility charges and work for any Improvements). Lessee
shall be responsible for any and all taxes generated by the County Tax Assessor / Collector.

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Section 3.8 Condition Assessment. Beginning on the tenth (10) anniversary and each
subsequent ten (10) years anniversary of the Commencement Date, Lessee shall be responsible for a
Condition Assessment on all Improvements. Said Condition Assessment shall be (i) Lessee’s
responsibility to initiate, at its sole expense, and (ii) conducted by a licensed commercial building
inspector and subject to the City’s written approval. The building inspector shall examine the
structural components, electrical, plumbing, heating and cooling systems, roof, asphalt, and/or
concrete paving, etc., and shall prepare a report. The Condition Assessment Report (“CAR”) shall be
provided to City within 30 days of the anniversary date. Any deficiencies noted in the CAR shall be
repaired, at Lessee’s sole expense, within 90 days of the anniversary date. Lessee may request a
reasonable extension of time, justifying the need for additional time to complete repairs. The request
must be submitted in writing to City. Any extension request is subject to City’s approval, which shall
not be unreasonably withheld.

Section 3.9 No Liens. No liens may be placed upon the Leased Premises. Within thirty (30)
days, Lessee shall pay all lawful claims made against City and discharge all liens filed or which exist
against the Leased Premises or any other portion of the Airport (other than Lessee’s trade fixtures or
trade equipment) to the extent such claims arise out of or in connection with, whether directly or
indirectly, the failure to make payment for work done or materials provided by Lessee its contractors,
subcontractors, or materialmen. However, Lessee shall have the right to contest the amount or validity
of any such claim or lien without being in default under this Agreement upon furnishing security in
form acceptable to City, in an amount equal to one hundred percent (100%) of such claim or lien, which
insures that such claim or lien will be properly and fully discharged forthwith in the event that such
contest is finally determined against Lessee or City. City shall give timely notice to Lessee of all
such claims and liens of which it becomes aware. WHEN CONTRACTING FOR ANY WORK IN
CONNECTION WITH THE LEASED PREMISES OR THE IMPROVEMENTS, LESSEE SHALL
INCLUDE IN SUCH CONTRACT A PROVISION PROHIBITING THE CONTRACTOR OR ANY
SUBCONTRACTOR OR SUPPLIER FROM FILING A LIEN OR ASSERTING A CLAIM
AGAINST CITY’S REAL PROPERTY OR ANY INTEREST THEREIN. ADDITIONALLY, UPON
THE LESSOR’S REQUEST, LESSEE SHALL POST A NOTICE AT THE LEASD PREMISES
THAT THE CITY OF BUCKEYE IS NOT RESPONSIBLE TO PAY CONTRACTORS,
SUBCONTRACTORS OF SUPPLIERS/VENDORS FOR LESSEE’S IMPROVEMENTS AND
SUCH IMPROVEMENTS ARE CONSTRUCTED FOR THE LESSEE’S BENEFIT, AND THE
LESSEE IS NOT ACTING AS THE CITY’S AGENT. Lessee is solely responsible for ensuring that
all requirements are met such that such lien waivers are effective and enforceable (such as filing such
contracts, if necessary). Furthermore, when completed, the Improvements on the Leased Premises shall
be free from all construction liens.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES

Section 4.1 Representations by City. City represents and warrants that it has the right,
power, and legal capacity to enter into and perform its obligations under this Agreement, has duly
executed and delivered this Agreement, and that this Agreement constitutes a legal, valid, and binding
obligation of City.

Section 4.2 Representations by Lessee. Lessee represents and warrants that it has the right,
power, and legal capacity to enter into and perform its obligations under this Agreement, has duly

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executed and delivered this Agreement, and that this Agreement constitutes a legal, valid, and binding
obligation of Lessee.

ARTICLE V
OBLIGATIONS OF LESSEE

Section 5.1 Plans and Specifications. With respect to any Improvements, Lessee shall select
qualified architects and engineers to prepare, prior to construction or on a phased basis during
construction, the architectural, site, structural, mechanical, and/or electrical drawings and
specifications for the Improvements in the form and content required by the appropriate local planning
and zoning authorities and pursuant to all applicable Laws and Regulations and this Agreement, which
shall be approved in writing by City (collectively, the “Plans and Specifications”).

Section 5.2 Operations and Maintenance. Lessee shall maintain the Leased Premises and
all Improvements in a condition that is clean, free of debris, safe, sanitary, and in good repair and shall
not accumulate or permit the accumulation of any trash, refuse, debris, or of anything that is unsightly,
which creates a fire hazard, nuisance, or causes inconvenience to adjoining properties. Lessee shall
perform all work in accordance with Laws and Regulations and in a good and workmanlike manner.
Lessee shall promptly remedy any condition that fails to meet this standard. Without limiting the
foregoing obligations, Lessee shall not store on the Leased Premises any inoperable equipment,
discarded or unsightly materials, or materials likely to create a hazard; shall not use areas outside of
enclosed buildings for storage; and shall store trash in covered metal receptacles. Any substance or
material that is regulated by any Environmental Law (‘Hazardous Materials”) shall be governed by
Section 5.8. In addition, Lessee agrees to comply with Chapter 16 of the City code of ordinances
regarding pollution prevention.

Section 5.3 Utilities. Subject to the terms of the 01/20/26 Development Agreement, Lessor
represents that there are water, sewer, and 3-phase electrical lines accessible within the general
vicinity of the Leased Premises. Lessee shall be responsible, at Lessee’s sole cost and expense, for
obtaining all utility connections at or for the Leased Premises and the Improvements. Further, Lessee
shall pay for telecommunications, television, internet, gas, light bulbs, electricity, water, sewer, and
garbage and trash removal services provided to or used by Lessee and shall make such deposits as
are required to secure service. Lessee shall be responsible for any water or sewer impact fees incurred
by their use of the Leased Premises. Any repairs of the utility lines, other than those which are the
responsibility of the utility service, are the responsibility of Lessee. If utilities are billed to a common
meter, Lessee shall pay to City the pro-rated amount based on square footage leased.

Section 5.4 Signs. Lessee shall not place, or cause to be placed, any sign or signs on the
Leased Premises or the Improvements unless otherwise agreed to in writing by City, which such
approval shall not be unreasonably withheld by the City.

Section 5.5 Security. Lessee is responsible to comply (at Lessee’s sole cost) with all
security measures that City, the United States Transportation Security Administration, the United
States Department of Homeland Security (“Homeland Security’), the United States Federal Aviation
Administration (“FAA”), or any other governmental entity having jurisdiction may require in
connection with the Airport, including, but not limited to, any access credential requirements, any
decision to remove Lessee’s access credentials, and any civil penalty obligations and other costs

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arising from a breach of security requirements caused or permitted by Lessee or Lessee’s Associates.
Lessee agrees that Airport access credentials are the property of City and may be suspended or
revoked by City for security-related reasons in its sole discretion at any time. Lessee shall pay all fees
associated with such credentials, and Lessee shall immediately report to the Airport Manager any lost
credentials or credentials that Lessee removes from any employee or any of Lessee’s Associates.
Lessee shall protect and preserve security at the Airport. Lessee acknowledges that FAA, Homeland
Security, or a subdivision of either may enact laws or regulations regarding security at general
aviation airports such that City may not be able to comply fully with its obligations under this
Agreement, and Lessee agrees that City will not be liable for any damages to Lessee or Lessee’s
personal property that may result from said noncompliance.

Section 5.6 Obstruction Lights. Lessee shall, at its expense, provide and maintain
obstruction lights on any structure on the Leased Premises, including the Improvements, if required by
City or FAA regulations. Any obstruction lights so required shall comply with the specifications and
standards established for such installations by City or FAA.

Section 5.7. Hazardous Materials.

A. No Violation of Environmental Laws. Lessee shall not cause or permit any Hazardous
Materials to be used, produced, stored, transported, brought upon, or released on, under, or about the
Leased Premises or the Airport by Lessee or Lessee’s Associates in violation of applicable
Environmental Laws. Lessee is responsible for any such violation as provided by Section 7.1.

B. Response to Violations. Lessee agrees that in the event of a release or threat of release
of any Hazardous Material by Lessee or Lessee’s Associates at the Airport, Lessee shall provide City
with prompt notice of the same. Lessee shall respond to any such release or threat of release in
accordance with applicable Laws and Regulations. If City has reasonable cause to believe that any
such release or threat of release has occurred, City may request, in writing, that Lessee conduct
reasonable testing and analysis (using qualified independent experts acceptable to City) to show that
Lessee is complying with applicable Environmental Laws. City may conduct the same at Lessee’s
expense if Lessee fails to respond in a reasonable manner. Lessee shall cease any or all of Lessee’s
activities as City determines necessary, in its sole and absolute discretion, in connection with any
investigation, cure, or remediation. If Lessee or Lessee’s Associates violate any Environmental Laws
at the Airport (whether due to the release of a Hazardous Material or otherwise), Lessee, at Lessee’s
sole expense, shall have the following obligations, which shall survive any expiration or termination
of this Agreement: (i) promptly remediate such violation in compliance with applicable
Environmental Laws; (ii) submit to City a written remediation plan, and City reserves the right to
approve such plan (which approval shall not be unreasonably withheld) and to review and inspect all
work; (iii) work with City and other governmental authorities having jurisdiction in connection with
any violation; and (iv) promptly provide City copies of all documents pertaining to any environmental
concern that are not subject to Lessee’s attorney-client privilege.

C. Obligations upon Termination and Authorized Transfers. Upon any expiration or
termination of this Agreement or any change in possession of the Leased Premises authorized by
City, Lessee shall demonstrate to City’s reasonable satisfaction that Lessee has removed any
Hazardous Materials and is in compliance with applicable Environmental Laws. Such demonstration
may include, but is not limited to, independent analysis and testing to the extent that facts and

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circumstances warrant analysis and testing, such as evidence of past violations or specific uses of the
Leased Premises. If the site is contaminated during Lessee’s possession, Lessee shall bear all costs and
responsibility for the required clean up, and shall hold City, its officers, elected and appointed
officials, employees, and agents harmless therefrom. Notwithstanding anything to the contrary, the
obligations of this Section 5.7 shall survive any termination of this Agreement.

Section 5.8 Trash, Garbage, and Other Refuse. Lessee shall pick up and provide for a
complete and proper arrangement for the adequate sanitary handling and disposal, away from the
Airport through the City or any other licensed refuse hauler (“Refuse Hauler’’). Lessee is responsible
for contacting the Refuse Hauler and arranging for disposal and payment of such services. Lessee
shall provide and use suitable covered metal receptacles for all such garbage, trash, and other refuse
on the Leased Premises. Lessee shall not pile boxes, cartons, barrels, pallets, debris, or similar items
in an unattractive or unsafe manner, on or about the Leased Premises.

ARTICLE VI
INDEMNIFICATION AND INSURANCE

Section 6.1 Insurance. During the Lease Term, Lessee agrees to maintain, at its sole
expense, general liability insurance insuring Lessee against liability for bodily injury, property damage
(including use of loss of property) and personal injury arising out of Lessee’s operations described in
Section 3.5, as well as Lessee’s use or occupancy of the Leased Premises. Lessee shall add the City
as an additional insured under such policy, providing fifteen (15) days’ notice of cancellation. The
amount of such insurance shall be two million dollars ($2,000,000.00) per occurrence and three million
dollars ($3,000,000.00) general aggregate. The liability insurance obtained by Lessee pursuant to this
Section shall be (a) primary and non-contributing, (b) contain cross-liability endorsements, and (c)
insure the City against Lessee’s performance under Section 5.7, if the matters giving rise to the
indemnity under Section 5.7 result from the negligence of Lessee. The amount and coverage of such
insurance shall not limit Lessee’s liability nor relieve Lessee of any other obligation under this
Agreement. City may also obtain comprehensive public liability insurance in any amount and with
coverage determined ty the City insuring the City against liability arising out of the ownership,
operation, use or occupancy of the Leased Premises. Any policy obtained by City shall not be
contributory and shall not provide primary insurance coverage. Lessee shall submit Certificate of
Insurance to City within ten (10) working days after the effective date of this Agreement, and yearly
thereafter.

Section 6.2 Hangar Keeper’s Liability. During the Lease Term, If hangars or structures are
located on the Leased Premises that are not owned by Lessee are placed for any reason or at any time,
Lessee shall maintain, at its sole expense, Hangar Keeper’s Liability Insurance with a minimum
coverage of $1,000,000.00 for any one aircraft and $2,000,000.00 for loss in any one occurrence.

Section 6.3. Worker’s Compensation. During the Lease Term, if Lessee has employees,
Lessee shall maintain, at its sole expense, Worker's Compensation Insurance in such amounts as will
fully comply with the laws of the State of Arizona, which shall indemnify, insure and provide legal
defense to both Lessee and City against any loss, claim or damage arising from any injuries or
occupational diseases happening to or any worker employed by Lessee in the course of carrying out
conditions or activities described within this Lease.

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Section 6.4 Employer’s Liability Insurance. During the Lease Term, if Lessee has
employees, Lessee shall maintain at its sole expense, a policy of Employer’s Liability Insurance in
such amounts as will fully comply with the laws of the State of Arizona.

Section 6.5 No Limitation of Liability. The amount and coverage of Lessee’s minimum
insurance requirements as set forth herein shall not limit Lessee’s liability nor relieve Lessee of any
other obligation under this Lease. City may also obtain comprehensive public liability insurance in
any amount and with coverage determined ty the City insuring the City against liability arising out
of the ownership, operation, use or occupancy of the Leased Premises. Any policy obtained by City
shall not be contributory and shall not provide primary insurance coverage. Lessee shall submit
Certificate(s) of Insurance to City within ten (10) working days after the effective date of this Lease,
and yearly thereafter.

Section 6.6 Insurance Coverage Requirements. Each policy of insurance shall provide
the following: (i) Policies cannot be cancelled, or substantially modified until and unless thirty (30)
days’ written notice is received by City for payment of any premium or for assessments under any
form of policy; (ii) the insurance company shall have no recourse against Landlord for payment of
any premium or for assessments under any form of policy; and (iii) the policies are intended as
primary coverage for City and that any insurance or self-insurance maintained by City shall apply in
excess of and not contributory with the insurance provided by these policies.

Section 6.7 Additional Insured. The comprehensive general liability policy, property
insurance, and hangar keeper’s liability insurance shall name City (as landlord), its departments,
officers, employees, officials, elected officials, volunteers, and agents, as additional insured or loss
payee, as applicable.

Section 6.8 Waiver of Subrogation. Lessee shall, upon obtaining the policies of insurance
required hereunder, give notice to the insurance carrier or carriers of the waiver of subrogation set
forth in this Lease and shall obtain, at Lessee’s sole expense, an appropriate waiver of subrogation
endorsement from its insurer.

Section 6.9 Adjustment of Insurance Requirements. The minimum insurance
requirements as to the type and amounts shall be subject to reasonable increases as the sole
discretion of the City, no more than once per calendar year.

Section 6.10 Failure to Maintain Insurance. Failure to maintain insurance as required by this
Lease shall constitute a default hereunder. Without waiving any remedies available to City for such
Default, City may at its option purchase the required insurance and charge the actual insurance
expense to Lessee, which expense Lessee shall assume and pay.

Section 6.11 Lessee’s Indemnification and Duty to Pay Damages.

A. Lessee shall hold City and City’s officers, elected and appointed officials, employees,
and agents exempt and harmless, to the extent allowed by law, from and against any and all claims,
demands, suits, judgments, costs, and expenses asserted by any person or persons (including agents
or employees of City, Lessee, or sublessee) by reason of death or injury to persons or loss of or
damage to property resulting from Lessee’s operations, or anything done or omitted by Lessee under

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this Agreement except to the extent that such claims, demands, suits, judgments, costs, and expenses
may be attributed to the intentional acts or omissions of City, its agents, or employees.

B. City shall not be liable to Lessee for any damage by or from any act or negligence of
any co-tenant or other occupant of the same building, or by any owner or occupant of adjoining or
contiguous property.

C. Lessee agrees to pay for all damages to the Leased Premises, the Improvements, its
apparatus, or appurtenances caused by Lessee’s misuse or neglect thereof.

D. Lessee shall be responsible and liable for the conduct of Lessee’s Associates in, on and
around the Leased Premises.

ARTICLE VII
DEFAULT AND REMEDIES

Section 7.1 Lessee’s Default. The occurrence of any of the following events shall
constitute a default by Lessee under this Agreement unless cured within thirty (30) days following
written notice of such violation from City: (i) Lessee fails to timely pay any Rent; (ii) Lessee or
Lessee’s Associates violate any requirement under this Agreement (including, but not limited to,
abandonment of the Leased Premises); (iii) Lessee assigns or encumbers any right in this Agreement,
delegates any performance hereunder, or subleases any part of the Leased Premises (except as expressly
permitted in this Agreement); (iv) Lessee files a petition in bankruptcy or has a petition filed against
Lessee in bankruptcy, insolvency, or for reorganization or appointment of a receiver or trustee which is
not dismissed within sixty (60) days; (v) Lessee petitions for or enters into an arrangement for the benefit
of creditors, or suffers this Agreement to become subject to a writ of execution and such writ is not
released within thirty (30) days; (vi) Lessee defaults in constructing any Improvements that are required
to be constructed under this Agreement; or (vii) the death or dissolution of Lessee.

A. Death of Lessee. On the death of a Lessee who is a natural person, this Leased Premises
and this Agreement may be assigned to the person entitled to succeed under applicable law, subject
to the prior written consent of the City, which such consent will not be unreasonably withheld,
conditioned or delayed. If there is no person entitled to succeed, the Leased Premises and this
Agreement will vest with the estate of Lessee.

Section 7.2 Default by City. City shall not be in default under this Agreement unless City
fails to perform an obligation required of City under this Agreement within thirty (30) days after
written notice by Lessee to City. If the nature of City’s obligation is such that more than thirty (30)
days are reasonably required for performance or cure, City shall not be in default if City commences
performance within such thirty (30) day period and thereafter diligently prosecutes the same to
completion.

Section 7.3. Remedies for Failure to Pay Rent. Subject to the written notice set forth in
Section 7.1(i), if any Rent required by this Agreement is not paid when due, City shall have the
option to:

A. Terminate this Agreement, take possession of the Improvements, resume possession
of the Leased Premises for its own account, and recover immediately from Lessee the differences
between the Rent and the fair rental value of the property for the term, reduced to present worth, or

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B. Terminate this Agreement, take possession of the Improvements, resume possession
of the Leased Premises, re-lease the Leased Premises for the remainder of the term for the account of
Lessee, and recover from Lessee, at the end of the term or at the time each payment of Rent comes
due under this Agreement as City may choose, the difference between the Rent and the rent received
on the re-leasing or renting.

In either event, City shall also recover all expenses incurred by reason of breach, including
reasonable attorney’s fees.

Section 7.4 Remedies for Breach of Agreement. If Lessee shall fail to perform or breach any
provision of this Agreement other than the agreement of Lessee to pay Rent, City shall provide written
notice to Lessee specifying the performance required. Thirty (30) days after such notice is provided
under this Section 7.4, City may terminate this Agreement or take any such action it is legally entitled
to take, including instituting litigation to compel performance of this Agreement. Should litigation
be filed by City and it is the prevailing party in that litigation, Lessee shall be liable for all expenses
related to such litigation, including City’s attorney’s fees.

Section 7.5 Survival. The provisions of this Article VII and the remedies and rights
provided in this Article VII shall survive any expiration or termination of this Agreement.

ARTICLE VIII
ASSIGNMENT AND SUBLEASING

Section 8.1 Assignment by Lessee.

A. Lessee shall not assign any of its rights under this Agreement, including, but not
limited to, rights in any Improvements (whether such assignment is voluntarily or involuntarily, by
merger, consolidation, dissolution, change in control, or any other manner), and shall not delegate
any performance under this Agreement, except with the prior written consent of City to any of the
same, which such consent will not be withheld, conditioned or delayed. As a condition of obtaining such
consent, the City reserves the right to require the transferee receiving any such rights from Lessee to
execute a new lease agreement provided by City. Regardless of City’s consent, Lessee shall not be
released from any obligations for matters arising during the time when this Agreement was in effect.
Any purported assignment or delegation of rights or delegation of performance in violation of this
section is void.

B. Upon the expiration or termination of this Agreement, Lessee hereby assigns,
transfers, and conveys to City, without warranty, the following:

i. The right to the use of the Plans and Specifications to the extent owned by Lessee;
ii. Any copyright interests in the Plans and Specifications held by Lessee; and

iii. The right to enforce, in Lessee’s own name as a proper party, (a) any subcontracts
related to the Improvements or other maintenance or services contracts in force with
respect to the Leased Premises or Improvements and any warranties arising under any
of them or in connection with the performance thereof, as the case may be.

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Section 8.2 Assignment by City. City shall have the right, in City’s sole discretion, to assign
any of its rights under this Agreement (and in connection therewith, shall be deemed to have delegated
its duties), and upon any such assignment, Lessee agrees that Lessee shall perform its obligations
under this Agreement in favor of such assignee.

Section 8.3. Encumbrances. Lessee shall not encumber or permit the encumbrance of any
real property at the Airport or the Leased Premises. Except for a Leasehold Mortgage as defined in
Section 8.5, Lessee shall not encumber or permit the encumbrance of any of Lessee’s rights under
this Agreement without City’s prior written consent, in City’s sole discretion. Any purported
encumbrance of rights in violation of this Section 8.3 is void.

Section 8.4 Leasehold Mortgage. Absent the prior written consent of City, Lessee shall not
have the right to mortgage or collaterally assign its interest in the Improvements to a bank or other
similar institutional lender, provided, however, that such consent will not be unreasonably withheld,
conditioned or delayed.

Section 8.5 Leasehold Mortgage - Non-exhaustive List of Preconditions. Notwithstanding
the above Section 8.4, Lessee may mortgage or collaterally assign its interest in this Agreement to a
commercial bank (a “Lender’”) solely in order to secure financing for the construction of the
Improvements, provided that any such leasehold mortgage or collateral assignment shall be subject,
subordinate, and inferior at all times to the rights of City hereunder and subject to the prior written
consent of the City (a “Leasehold Mortgage’). In connection with a Leasehold Mortgage or City’s
written consent to any other encumbrance, at a minimum, City shall require the following:

i. Lender shall certify in writing to City that it has reviewed this Agreement and accepts
the provisions of this Agreement, including but not limited to the provisions of this
Section 8.5, and that no loan requirements conflict with or materially erode any
provisions of this Agreement.

ii. Lender agrees that City must approve any encumbrance proposed to be placed upon the
Improvements or this Agreement and that in no event shall any encumbrance be placed
upon the Leased Premises.

iii. Lender agrees that City may, in its sole discretion, require the inclusion of certain
provisions in lending documents that are defined to protect City and/or comply with
federal law, rules, or regulations.

iv. Lender agrees that its security interest in the Improvements, the Leasehold Mortgage,
the related loan agreement, and this Agreement is subordinate to the provisions of any
existing or future agreements between City and the United States of America, relative
to the operation and maintenance of the Airport, the terms and execution of which have
been or may be required as a condition precedent to the expenditure or reimbursement
to City of federal funds for the development of the Airport (“Grant Assurances’’) and
that Lender further agrees that in the event that the Leasehold Mortgage, the related
loan agreement, or anything in this Agreement, either on its own terms or by any other
reason, conflicts with or violates any such Grant Assurances, City has the right to

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vi.

vii.

viil.

ix.

Xi.

xii.

xiii.

xiv.

amend, alter, or otherwise modify the terms of this Agreement in order to resolve such
conflict or violation.

Lender agrees to maintain current contact information with City and provide City with
concurrent copies of any notices or communications regarding a default under the loan
agreement or Leasehold Mortgage.

Lender agrees that in the event of a default under the loan agreement or Leasehold
Mortgage, Lender shall promptly inform the City of such default.

Lender and Lessee agree that any event of a material default under the loan agreement
or Leasehold Mortgage shall be a default of this Agreement.

Lender agrees that upon any default under the loan agreement or Leasehold Mortgage,
City shall have a lien with first priority on all Lessee-owned property at the Leased
Premises.

Lender agrees that, in the event that Lender takes actual or de facto control of the
Improvements and/or Lessee’s interests in this Agreement, it shall immediately notify
the City of that event (“Lender Control”), Lender will have no more than 180 days from
the beginning date of Lender Control to obtain a replacement tenant that is acceptable
to the City, in City’s sole discretion. In the event that more than 180 days elapses after
the beginning date of Lender Control, the Lender’s security, mortgage, and all other
interests in the Improvements, this Agreement or anything else related to the Leased
Premises terminates.

Lender agrees that any use by Lender, assignee, or any other party, will be limited to
those uses that have been authorized by City and that in no event shall the
Improvements be used for a non-aeronautical purpose.

The Leasehold Mortgage and any other encumbrances shall terminate prior to the
expiration or termination of this Agreement and Lender agrees to promptly remove
such encumbrance upon the earlier of (1) such termination of the Leasehold Mortgage
or other encumbrance, or (2) the date when the obligation that the Leasehold Mortgage
or other encumbrance secures has been satisfied.

Lender agrees to hold City, its officers, elected and appointed officials, employees, and
agents harmless for all claims arising after the date that Lessee was in default under its
loan agreement(s) with the Lender.

Lessee agrees to release and hold City, its officers, elected and appointed officials,
employees, and agents harmless for all claims related to City’s consent, non- consent,
or any other act or omission related to encumbering the Improvements and/or this
Agreement.

City shall have no obligation to provide any notices to Lender and City shall have no
liability of any kind to Lender or other lienholder.

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ARTICLE Ix
MISCELLANEOUS PROVISIONS

Section 9.1 Waiver of Exemption. Any constitutional or statutory exemption of Lessee of
any property usually kept on the Leased Premises, from distress or forced sale, is waived.

Section 9.2 Addresses. All notices given under this Agreement to City shall be sent to the
Airport Director, 945 North 215th Avenue, Suite 137, Buckeye, Arizona, 85326, with a copy to the
City Attorney, 530 E. Monroe Ave, Buckeye, Arizona, 85326, or such other place as City shall specify
in writing. All notices given under this Agreement to Lessee shall be sent to:

Dale E. Klapmeier, Manager
Vermillion Development, LLC
16762 W Windsor Avenue
Goodyear, AZ 85395
daleklap@rocketmail.com

All notices given under this Agreement to the Mortgagee shall be sent to the address provided by
Mortgagee to City. Any notice properly mailed by registered mail, postage and fee prepaid, shall be
deemed delivered when mailed, whether received or not.

Section 9.3. No Waiver. The waiver by City of any breach of any term, covenant, or
condition herein contained shall not be deemed to be a waiver of such term, covenant, or condition or
any subsequent breach of the same or any other term, covenant, or condition herein contained. The
subsequent acceptance of rent hereunder by City shall not be deemed to be a waiver of any preceding
breach by Lessee of any term, covenant, or condition of this Agreement, other than the failure of
Lessee to pay the particular rental so accepted, regardless of City’s knowledge of such preceding
breach at the time of acceptance of such rent.

Section 9.4 Lessee’s Subordination. Lessee hereby subordinates and makes this Agreement
inferior to all existing and future mortgages, trust indentures or other security interest of City or
City’s successor in interest. Lessee shall execute and deliver any documents required to evidence
and perfect such subordination.

Section 9.5 Additional Charges as Rent. Any charges against Lessee by City for services
or for work done on the Leased Premises or the Improvements by order of Lessee or otherwise
accruing under this Agreement shall be considered as Rent due.

Section 9.6 Subordination to Grant Assurances. This Agreement shall be subordinate to
the Grant Assurances. In the event that this Agreement, either on its own terms or by any other reason,
conflicts with or violates any such Grant Assurances, City has the right to amend, alter or otherwise
modify the terms of this Agreement in order to resolve such conflict or violation.

Section 9.7 Non-Interference With Operation of the Airport. Lessee expressly agrees for
itself, its successors, and assigns that Lessee will not conduct operations in or on the Leased Premises
or the Improvements in a manner that in the reasonable judgment of City, (i) interferes or might
interfere with the reasonable use by others of common facilities at the Airport, (ii) hinders or might

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hinder police, fire fighting, or other emergency personnel in the discharge of their duties, (iii) would
or would be likely to constitute a hazardous condition at the Airport, (iv) would or would be likely
to increase the premiums for insurance policies maintained by City unless such operations are not
otherwise prohibited hereunder and Lessee pays the increase in insurance premiums occasioned by
such operations, (v) is contrary to any applicable Grant Assurance; (vi) is in contradiction to any rule,
regulation, directive, or similar restriction issued by agencies having jurisdiction over the Airport
including FAA, Homeland Security, Transportation Security Administration and Customs and Border
Patrol, or (vii) would involve any illegal purposes. In the event this covenant is breached, City reserves
the right, after prior written notice to Lessee, to enter upon the Leased Premises and the Improvements
and cause the abatement of such interference at the expense of Lessee. In the event of a breach in
Airport security caused by Lessee, resulting in fine or penalty to City of which Lessee has received
prior written notice, such fine or penalty will be charged to Lessee.

Section 9.8 Emergency Closures. During time of war or national emergency, City shall have
the right to enter into an agreement with the United States Government for military or naval use of
part or all of the landing area, the publicly-owned air navigation facilities and/or other areas or
facilities of the Airport. If any such agreement is executed, the provisions of this Agreement, insofar
as they are inconsistent with provisions of the agreement with the Government, will be suspended.

Section 9.9 Interpretation.

A. References in the text of this Agreement to articles, sections, or exhibits pertain to
articles, sections, or exhibits of this Agreement, unless otherwise specified.

B. The terms “hereby,” “herein,” “hereof,” “hereto,” “hereunder,” and any similar terms
used in this Agreement refer to this Agreement. The term “including” shall not be construed in a
limiting nature, but shall be construed to mean “including, without limitation.”

C. Words importing persons shall include firms, associations, partnerships, trusts,
corporations, and other legal entities, including public bodies, as well as natural persons.

D. Any headings preceding the text of the articles and sections of this Agreement, and any
table of contents or marginal notes appended to copies hereof, shall be solely for convenience of
reference and shall not constitute a part of this Agreement, nor shall they affect the meaning,
construction or effect of this Agreement.

E. Words importing the singular shall include the plural and vice versa. Words of the
masculine gender shall be deemed to include correlative words of the feminine and neuter genders.

Section 9.10 Force Majeure. No act or event, whether foreseen or unforeseen, shall operate
to excuse Lessee from the prompt payment of rent or any other amounts required to be paid under
this Agreement. If City (or Lessee in connection with obligations other than payment obligations) is
delayed or hindered in any performance under this Agreement by a force majeure event, such
performance shall be excused to the extent so delayed or hindered during the time when such force
majeure event is in effect, and such performance shall promptly occur or resume thereafter at the
expense of the Party so delayed or hindered. A “force majeure event” is an act or event, whether
foreseen or unforeseen, that prevents a Party in whole or in part from performing as provided in this

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Agreement, that is beyond the reasonable control of and not the fault of such Party, and that such
Party has been unable to avoid or overcome by exercising due diligence, and may include, but is not
limited to, acts of nature, war, riots, strikes, accidents, fire, and changes in law. Lessee hereby releases
City and City’s officers, elected and appointed officials, employees, and agents from any and all
liability, whether in contract or tort (including strict liability and negligence) for any loss, damage,
or injury of any nature whatsoever sustained by Lessee, its employees, agents, or invitees during the
Lease Term, including, but not limited to, loss, damage, or injury to the aircraft or other personal
property of Lessee that may be located or stored in, on or under the Leased Premises or the
Improvements due to a force majeure event.

Section 9.11 Governing Law and Venue: Disputes. This Agreement has been made in and
will be construed in accordance with the laws of the State of Arizona. In any action initiated by one
Party against the other, exclusive venue and jurisdiction will be in the appropriate state courts in and
for Maricopa County, Arizona. In the event of any litigation between the City and Lessee arising
under this Lease, the successful party shall be entitled to recover its attorneys’ fees and costs expended
or incurred in connection with such litigation.

In all cases of disputes or defaults under this Agreement, the Parties hereto will first attempt to
resolve differences in good faith between themselves. With the approval of their respective
governing bodies or boards, the Parties may agree to resolve a dispute through an alternative dispute
resolution (ADR) method, with each bearing one-half of the cost.

Section 9.12 Amendments and Waivers. No amendment to this Agreement shall be binding
on City or Lessee unless reduced to writing and signed by both Parties. No provision of this
Agreement may be waived, except pursuant to a writing executed by the Party against whom the
waiver is sought to be enforced.

Section 9.13 Severability. If any provision of this Agreement is determined to be invalid,
illegal, or unenforceable, the remaining provisions of this Agreement shall remain in full force and
effect if both the economic and legal substance of the transactions that this Agreement contemplates
are not affected in any manner materially adverse to any Party. If any provision of this Agreement
is held invalid, illegal, or unenforceable, the Parties shall negotiate in good faith to modify this
Agreement to fulfill as closely as possible the original intents and purposes of this Agreement.

Section 9.14 Merger. This Agreement constitutes the final, complete, and exclusive
agreement between the Parties on the matters contained in this Agreement. All prior and
contemporaneous negotiations and agreements between the Parties on the matters contained in this
Agreement are expressly merged into and superseded by this Agreement. In entering into this
Agreement, neither Party has relied on any statement, representation, warranty, nor agreement of the
other Party except for those expressly contained in this Agreement.

Section 9.15 Relationship of Parties. This Agreement does not create any partnership, joint
venture, employment, or agency relationship between the Parties. Nothing in this Agreement shall
confer upon any other person or entity any right, benefit, or remedy of any nature.

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Section 9.16 Further Assurances. Each Party shall execute any document or take any action
that may be necessary or desirable to consummate and make effective a performance that is required
under this Agreement.

Section 9.17 Required Federal Clauses. Lessee and Lessee’s Associates shall comply with
all Laws and Regulations, including all of the required federal clauses in this Section 9.17.

A. During the performance of this contract, Lessee, for itself, its assignees, and
successors in interest (hereinafter collectively referred to as the “Lessee’”’) agrees as follows:

i.

ii.

iil.

iv.

Compliance with Regulations: Lessee will comply with the Title VI List of
Pertinent Nondiscrimination Acts And Authorities, as they may be amended from
time to time, which are herein incorporated by reference and made a part of this
Agreement.

Non-discrimination: Lessee, with regard to the work performed by it or use of the
Leased Premises and the Improvements during the Lease Term, will not illegally
discriminate against any person or class of persons on the grounds of race, color, or
national origin. Lessee will not participate directly or indirectly in the discrimination
prohibited by the Nondiscrimination Acts and Authorities, including employment
practices when the contract covers any activity, project, or program set forth in
Appendix B of 49 CFR Part 21.

Solicitations for Contracts, including Procurements of Materials and
Equipment: In all solicitations, either by competitive bidding, or negotiation made
by Lessee for work to be performed under a contract, including procurements of
materials, or leases of equipment, each potential contractor or supplier will be
notified by Lessee of Lessee’s obligations under this Agreement and the
Nondiscrimination Acts and Authorities on the grounds of race, color, or national
origin.

Information and Reports: Lessee will provide all information and reports required
by the Acts, the Regulations, and directives issued pursuant thereto and will permit
access to its books, records, accounts, other sources of information, and its facilities
as may be determined by the sponsor or the Federal Aviation Administration to be
pertinent to ascertain compliance with such Nondiscrimination Acts and Authorities
and instructions. Where any information required of Lessee is in the exclusive
possession of another who fails or refuses to furnish the information, Lessee will so
certify to City or the Federal Aviation Administration, as appropriate, and will set
forth what efforts it has made to obtain the information.

Sanctions for Noncompliance: In the event of Lessee’s noncompliance with the
non-discrimination provisions of this contract, City will impose such sanctions as it
or the Federal Aviation Administration may determine to be appropriate, including,
but not limited to cancelling, terminating, or suspending the Lease, in whole or in
part.

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