2182 Skydive Buckeye, LLC & Desert Petroleum, LLC Lease.pdf

CITY OF BUCKEYE
AIRPORT PROPERTY LEASE AGREEMENT

with

Skydive Buckeye, LLC and
Desert Petroleum, LLC

Effective Date: November 1, 2021

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City of Buckeye Property Lease Agreement (SKYDIVE BUCKEYE) November 1, 2021

Section

CPA AASE YE

RWWA KWWARWWAkHWNNNNNNNNNN EE ee eee eee
SL PANRMRE NESE HKNAADMESYDYDESLSKLCAAMEP LYNE S

Exhibit A (Description of Premises) A-1
Exhibit B (Airport Rates & Charges Schedule) B-1
Exhibit C (Aircraft Operations) C-l
Exhibit D (Airport Minimum Standards and Rules and Regulations) D-1

1

TABLE OF CONTENTS

Title

LEASE...
TERM.
NONEXCLUSIVE RIGHTS.
RENT.

PERFORMANCE GUARANTEE. .....ssescesseees
AIRCRAFT OPERATIONS GUIDELINES. .
IMPROVEMENTS
MAINTENANCE
ASSIGNMENT, SUBLETTIN AND OTHER TRANSFERS.
IDENTIFICATION SIGNS.
DEFAULT; TERMINATION BY LESSOR.
ASSUMPTION OF CRITICAL OPERATIONS...
INDEMNIFICATION
ENVIRONMENTAL PROTECTION..
PROTECTION OF WETLAND. ........
SPECIAL PROVISIONS. .
INSURANCE..
SURRENDER OF POSSESSIO
INSPECTION BY LESSOR.
NOTICES. o.csssssssssssssessesseees
SEVERABILITY.
SALES AND PROPERTY TAXES. .
APPROVALS, CONSENTS AND NOTICES.
LIENS AND MORTGAGES. ..esccssssessssssssssesses
GOVERNING LAW; ATTORNEY’S FEES.
RULES AND REGULATIONS. ...
CORPORATE AUTHORIZATION......
UTILITY LINES AND SERVICE CHARGES
RESERVATIONS TO LESSOR we
FEDERAL AVIATION ADMINISTRATION (FAA) PROVISIONS...
[RESERVED]. ooscsssssssssssssscssssssscccssssccssssscsessssccesssnsccessusecesssuecsessneecesssnseses
REQUIRED PROVISIONS
ARCHEOLOGICAL OR CULTURAL RESOURCES...
AIRPORT SECURITY [If applicable.]..
DEFAULT BY LESSOR...

BROKERS. ........000000+
SALE BY LESSOR...
ESTOPPEL CERTIFICATE. . ws
MISCELLANEOUS, o...ssssssscssssescsesseeeeees
INCORPORATION OF RECITALS

Exhibit E (Storm Water Permit Compliance) E-
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AIRPORT PROPERTY LEASE AGREEMENT

This Property Lease Agreement (the “Lease”) is executed to be effective the First (1st) day of
November 2021 (the “Effective Date”) between the CITY OF BUCKEYE, an Arizona municipal
corporation (“Lessor”), and SKYDIVE BUCKEYE, LLC an Arizona limited liability company and
DESERT PETROLEUM, LLC, and Arizona limited liability company (collectively the “Lessee”). Lessor
and Lessee may be referred to jointly as “Parties,” and each separately may be referred to as a “Party.”

WITNESSETH:

WHEREAS, Lessor is the owner and operator of the Buckeye Municipal Airport generally located
at the intersection of Yuma and South Palo Verde Road, City of Buckeye, Maricopa County, Arizona (the
“Airport’”); and

WHEREAS, Lessor has the right to lease, license and grant the use of property and facilities on
the Airport and has full power and authority to enter into this Lease in respect thereof; and

WHEREAS, Lessor desires to lease to Lessee, and Lessee desires to lease from Lessor, that certain
real property at the Airport located at 3000 South Palo Verde Road, and described as NORTHWEST
SECTION OF THE QUAD HANGAR, respectively, consisting of approximately TWO THOUSAND
EIGHT HUNDRED SIXTY-SEVEN (2,867) square feet, together with Lessor’s AIRPORT FUEL FARM
consisting of approximately THREE THOUSAND EIGHT HUNDRED (3,800) square feet of land, as set
forth in Exhibit A attached hereto (collectively the “Premises”); and

WHEREAS, Lessor desires to lease the Premises to Lessee on the terms and conditions set forth
herein;

NOW THEREFORE, In consideration of the foregoing and of the mutual covenants and
agreements herein contained, the Parties do hereby undertake, promise and agree, each for itself and its
successors and assigns, as follows:

1. LEASE.

Lessor hereby leases the Premises to Lessee, subject to all easements and rights of way that may
encumber the Premises, and further subject to all operational and use restrictions and other terms and
conditions set forth in this Lease.

1.1 Right to Use Premises. Lessor agrees that so long as Lessee shall timely pay the Base Rent
and other charges required to be paid hereunder, and perform all of its other obligations under this Lease,
Lessee shall peaceably have and enjoy the use of the Premises without hindrance from Lessor. Lessee
specially acknowledges that Lessee has inspected the Premises prior to entering into this Lease and agrees
to accept the Premises in an "as is, where is" condition without any warranty or representation from Lessor,
either express or implied, of any kind or nature whatsoever with respect to the Premises, including, but not
limited to, any warranty of merchantability, habitability, or fitness for any particular or specific purpose,
and all such warranties are hereby disclaimed. Should Lessee desire any inspection report, environmental
assessment, survey, creation of a legal description, drainage report, or any similar study, Lessee shall be
responsible for the same at Lessee's sole expense.

1.2 Substitution of Premises. In addition to Lessor’s other rights set forth in this Lease, Lessor
has the right (but not the obligation) to substitute Comparable Areas for all or any portion of the Premises,

and any additions, alternations or improvements thereon, should Lessor, in its reasonable discretion,

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determine that taking of the Premises, any portion thereof or any improvement thereon, is required for other
Airport purposes, and there exists no appropriate alternative. In the event Lessor makes the determination
to exercise its rights to substitute, all title, right and interest to the portion of the Premises taken shall
immediately vest in Lessor. Furthermore, Lessor may require Lessee to vacate any portion or all of the
Premises taken. For the purposes of this Section 1.2, the term “Comparable Areas” is defined to mean other
facilities at the Airport, or any additions or extensions thereof, similar in size to the Premises, brought to
the same level of improvement as the Premises and having the same or similar usefulness to Lessee as the
portion taken. Lessor shall bear all expenses of bringing the substituted area to the same level of
improvement as the Premises, and of moving Lessee’s improvements, equipment, furniture and fixtures to
the substituted area. If any of Lessee’s improvements, equipment, furniture or fixtures cannot be relocated,
Lessor shall replace, at Lessor’s expense, such non-relocatable improvements and other property with
comparable property in the Premises, and Lessor shall be deemed the owner of the non-relocated
improvements and other property, free and clear of all claims of any interest or title therein by Lessee, or
any other third party whomsoever. It is the specific intent of this Section 1.2 that Lessee be placed, to the
extent possible, in the same position it would have been, had Lessor not substituted new premises for the
Premises; provided, however, that Lessor shall not be obligated to reimburse Lessee for any damages,
including lost profits or revenues, due to such substitution. Notwithstanding the foregoing, Lessor shall
use reasonable efforts to avoid disruption to Lessee’s business.

1.3 Access. Lessee is granted the right of reasonable access to and from the Premises via such
portions of the Airport as are or may be necessary to allow Lessor’s conduct its business operations
permitted herein at and on the Premises. Lessor reserves the right to designate the location of such access
and to change its location from time to time, as Lessor deems reasonably necessary and appropriate.

1.4 Permitted Uses. Subject to the provisions of this Section 1.4, Lessee may use the Premises
for the storage and operation of its airplane, related ancillary storage and office administrative uses related
to the aircraft storage and skydiving business and the storage and delivery of airport fuel, including Lessee’s
construction of improvements to the Fuel Farm.

1.5 Prohibited Activities. Lessee shall not use or permit its agents, employees, contractors,
invitees, licensees or customers to use the Premises or the Airport for any use that is in violation of the
Airport Rules and Regulations, the Airport Minimum Standards, any matters of record, or applicable laws,
tules, regulations and operating policies of any governmental authority, including Lessor, or for any other
activity or operation that does not have advance, written approval of Lessor’s Airport Manager. Lessee’s
use of the Premises is subject to all applicable laws, rules and regulations of any governmental authority,
and to Lessee’s compliance with the Airport Minimum Standards and Lessor’s applicable code and
regulations. Lessee shall not perform maintenance or repairs that would include use or exposure of
petroleum products (oil, fuel, hydraulics, etc.) within the hangar. All such activities shall only be permitted
outside of the hangar in a designated as determined by mutual agreement of the Lessor and Lessee.

1.6 Continuous Operation. Upon commencement of business operations at and on the
Premises, Lessee shall designate an on-site manager for the term of this Lease who shall be available to
Lessor and Lessee’s customers during normal business hours. Lessee also shall provide its services and
operate its business, at a minimum, during normal business days, and otherwise as necessary to
accommodate customer and special event requirements.

1.7 Lessee Acknowledgement. Lessee acknowledges and agrees that its obligations to pay
Base Rent and all other charges due and owing under the terms hereof shall be absolute and unconditional,
and shall not be affected by any circumstances whatsoever, including, without limitation: (i) any set-off,
counterclaim, recoupment, defense or other right which Lessee may have against Lessor or the United States

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of America or anyone else for any reason whatsoever; (ii) any liens, encumbrances or rights of others with
respect to the Premises; (iii) the invalidity or unenforceability or lack of due authorization or other infirmity
of this Lease or any lack of right, power or authority of Lessor or Lessee to enter into this Lease; (iv) any
insolvency, bankruptcy, reorganization or similar proceedings by or against Lessee, or any other person; or
(v) any other cause, whether similar or dissimilar to the foregoing, any future or present law
notwithstanding, it being the intention of the Parties hereto that all rent being payable by Lessee hereunder
shall continue to be payable in all events and in the manner and at the times provided herein.

2. TERM.

2.1 Initial Term. The term of this Lease shall be for a period of THREE (3) years, commencing
at 12:00 A.M. on the Effective Date, November 1, 2021, and terminating 11.59 P.M. on October 31, 2024
thereafter (the “Term’’).

2.2 Renewal Term(s). Provided Lessee is not then in default of this Lease and subject to
approval of Lessor, Lessee shall have the option of extending the Term for Two (2) additional periods of
ONE (1) year each (an “Extension”). Lessee may exercise an Extension by giving written notice to Lessor
of its desire to do so no later than sixty (60) days prior to the expiration of the Term, as set forth in Section
2.1 herein. If Lessee has properly notified Lessor of its desire to exercise an Extension and Lessor approves
in writing, then Lessee's Extension of the Term of this Lease shall become effective and all references
herein to the "Term" shall mean the initial term as extended.

3. NONEXCLUSIVE RIGHTS.

Lessee shall have the exclusive right to occupy and use the Premises while in compliance with the
terms and conditions of this Lease. All other rights granted to Lessee under this Lease are nonexclusive.
Lessor may, in its sole discretion and at any time, permit third parties to conduct any and all business
activities at the Airport that Lessor deems appropriate, or conduct such activities itself, provided that such
activities do not require or materially interfere with Lessee’s use of the Premises.

4. RENT.

4.1 Base Rent. Lessee agrees to pay Lessor rental for the use of the Premises the annual amount
of NINE THOUSAND Two HUNDRED EIGHTY-NINE DOLLARS AND EIGHT CENTS ($9,289.08) (or
approximately TWENTY-SEVEN CENTS ($0.27) per square foot per month) as calculated towards the Quad
Hanger Premises, payable in monthly installments of SEVEN HUNDRED SEVENTY-FOUR DOLLARS AND
NINE CENTS ($774.09) (the Base Rent). It is anticipated that Lessee will make and install improvements to
the Fuel Farm, which costs of improvements will offset the associated ground lease revenue of Twenty-
Five Cents ($0.25) per square foot per year for the Fuel Farm, an estimated annual rent value of
approximately NINE HUNDRED FIFTY DOLLARS ($950.00). If the cost of the improvements to the Fuel
Farm do not exceed value of ground lease value over the term of the Agreement, then Lessor agrees to pay
the difference in rent between the costs of the improvements and the value of the rent for the Fuel Farm.
The Base Rent shall be payable in advance and without any prior demand therefor and without any
abatement, deductions or set-offs whatsoever, and tendered in lawful currency of the United States, either
by check or electronic transfer.

(a) Prior to the construction or installation of any improvements to the Fuel Farm, Lessee shall
obtain the written approval of the Public Works Director for such improvements and after
the work is complete shall provide copies of paid invoices reflecting the expenditures of
funds related to the necessary improvements to the Fuel Farm.

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(b) Lessee shall only pay for the premises as described in Section 4.1 above as part of the rent
to Lessor. Lessee shall pay all other fees as listed in the Airport Schedule of Fees in Exhibit
B of this agreement, including, but not limited to Fuel Flowage, FBO and/or SASO permits,
aircraft storage (outside of leased hangar space), etc.

4.2 CPI Increases. The annual Base Rent paid by Lessee shall be increased (but never
decreased) on every TWELVE (12) month anniversary of the Effective Date of this Lease by the percentage
equal to the greater of THREE PERCENT (3%) or the percentage that the Consumer Price Index (CPI) (as
defined below) increased during the immediately preceding twelve (12) month period ending ninety (90)
days prior to the adjustment period; except, however, that in no case shall any single, 12-month rate of
increase exceed FIVE PERCENT (5%). For purposes of this Lease, CPI means the United States Department
of Labor, Bureau of Statistics Consumer Price Index for all Urban Consumers (CPI-U), U.S. City Average
(1982-1984=100). If at any time CPI ceases to exist, Lessor may substitute any official index published by
the Bureau of Labor Statistics or by a successor or similar government agency as may then exist and which
in Lessor’s reasonable business judgment shall be most nearly equivalent to the CPI.

43 Market Adjustments to Base Rent. Reserved

4.4 Airport Rates and Charges Schedule. Lessee or its subtenants, as applicable, shall pay the
most current Airport Rates and Charges at the time of receipt of service or use of covered facilities and/or
services unless specifically outlined in this Lease. The current Airport Rates and Charges Schedule is
included as Exhibit B and is subject to change without prior notice or approval of Lessee. Lessee
acknowledges and agrees that Lessor may amend the Airport Rates and Charges Schedule at any time at
Lessor’s sole discretion, and that no fee shall apply to the use of the Premises or access to the Premises.

45 Payment.

4.5.1. The first payment of Base Rent shall be paid upon the delivery of this Lease, for
the period from the Effective Date until the end of the calendar month in which the Effective Date occurs,
prorated on the basis of the number of such days to the total number of days in said month. Thereafter all
Base Rent payments shall be paid in monthly installments, in advance, on the first day of each calendar
month (the “Base Rent Due Date’’). On each such date, Lessee shall pay the full Base Rent payment.

4.5.2 No payment to or receipt by Lessor of a lesser amount than that which is due and
payable under the provisions of this Lease at the time of such payment shall be deemed to be other than a
payment on account of the earliest payment due, nor shall any endorsement or statement on any check or
payment prejudice in any way Lessor’s right to recover the balance of such payment or pursue any other
remedy provided in this Lease or by law.

4.5.3. All payments and reports required by this Section 4.5 shall be remitted to the
following address by the due date(s) specified hereinabove:

City of Buckeye

530 East Monroe Avenue
Buckeye, Arizona 85326
Facsimile: (623) 349-6000

Attn: Finance Department - Airport

or such other address specified in writing by Lessor to Lessee.

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4.6 Finance Charges and Late Fees. If Lessee fails to pay any installment of Base Rent or any
other charge due and owing to Lessor in full on or before the applicable due date, Lessee shall be responsible
for interest on the unpaid installment at the rate of eighteen percent (18%) per annum from the due date
until payment in full is made. In addition, in the event any installment of Base Rent is paid more than ten
(10) days after the due date, a late penalty of ten percent (10%) of the amount of such delinquent Base Rent
installment shall be due and payable in addition thereto.

AT Taxes. In the event any governmental authority shall impose a tax or imposition based
upon any Base Rent payments or any other sums paid or owing hereunder or the receipt of such payments
by Lessor, then Lessee shall pay such amounts to Lessor at the same time and in addition to payments
hereunder, which amounts may include, but are not limited to, any or all rental, transaction privilege, sales,
excise or other similar tax except income taxes. Lessee’s obligation to pay such amounts together with any
interest thereon and/or penalties therefor, shall survive the termination of this Lease.

4.8 Survival. Lessee’s obligation to pay all amounts stated herein, together with any interest
thereon and/or penalties therefor, shall survive the termination of this Lease.

5. PERFORMANCE GUARANTEE.

5.1 On or before the Effective Date, Lessee shall pay to Lessor an amount equivalent to two
(2) months Base Rent, or ONE THOUSAND FIVE HUNDRED FORTY-EIGHT DOLLARS AND
EIGHTEEN CENTS ($1,548.18), as a security deposit to insure the faithful performance of all of Lessee’s
obligations hereunder (the “Performance Guarantee”). The Performance Guarantee shall be adjusted
annually, as required, and Concessionaire shall pay Lessor, within five (5) business days of Airport
Manager’s written request therefor, such additional monies as may be necessary to maintain the
Performance Guarantee as a sum equal to two (2) month’s Base Rent.

5.2 The Performance Guarantee, at the election of Lessor, may be applied in reduction of any
loss and/or damage sustained by Lessor by reason of the occurrence of any breach, nonperformance or
default by Lessee under this Lease without the waiver of any other right or remedy available to Lessor at
law, in equity or under the terms of this Lease. If any portion of the security deposit is so used or applied,
Lessee shall, within five (5) days after written notice from Lessor, deposit with Lessor immediately
available funds in an amount sufficient to restore the security deposit to its original amount. In the event
of a sale or other transfer of the Premises by Lessor, Lessor shall transfer the remaining balance (if any) of
the Performance Guarantee to Lessor’s successor in interest, whereupon the transferor Lessor shall be
released from liability to Lessee for the return of such Performance Guarantee. Unless this Lease is
terminated as a result of Lessee’s default, upon termination, Lessor shall return to Lessee all portions of the
Performance Guarantee which were not applied by Lessor as permitted above. Lessor shall have no
obligation to maintain a separate account for such security deposit and shall have no obligation to pay
interest thereon.

6. AIRCRAFT OPERATIONS GUIDELINES.

If and to the extent that Lessee operates aircraft at or on the Airport, Lessee shall be subject to the
provisions of Exhibit C. If any subtenant of Lessee on or at the Premises operates aircraft at the Airport,
such subtenant also shall be subject to the provisions of Exhibit C, which Lessor may enforce directly
against such subtenant.

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7. IMPROVEMENTS.

7A Construction by Lessee. Subject to written approval of the Public Works Director, Lessee
shall be authorized to make necessary improvements for the use and operation of the Fuel Farm.

7.2 Construction Milestones. Reserved.

7.3 No Alterations. Lessee shall make no exterior improvements or alterations to the Premises
during the Term of this Lease without the prior written permission of Lessor, which shall not be
unreasonably withheld or delayed and, if and to the extent applicable, without the approval by Lessor’s
Design Review Committee. Lessee shall provide Lessor with electronic as-built drawings (or their
equivalent) when any improvement or alteration is completed for which such drawings are reasonably
required

TA Title to Alterations and Improvements. Title to all improvements and alterations on the
Premises (but not personal property or trade fixtures) shall vest in Lessor upon the expiration of this Lease,
and Lessee agrees to execute and deliver to Lessor, within ten (10) days after Lessor’s request therefor, a
quitclaim deed confirming that title to such improvement and alterations is vested in Lessor.

15 Mechanics’ Liens. Lessee shall keep the Premises and any/all improvements constructed
by Lessee thereon free of any mechanic or materialmen’s liens. In the event that any such lien is filed,
Lessee shall, at its sole cost, cause such lien to be removed from the Premises by bonding or otherwise
within thirty (30) days of notice thereof.

7.6 Permit Required. Lessee shall be responsible for determining whether it is subject to local
building codes or building permit requirements, and for compliance with them to the extent they are
applicable. All structural, electrical, plumbing or mechanical construction or reconstruction shall conform
to City of Buckeye (the “City”) construction and technical codes. No such work shall be commenced
without first submitting required plans and obtaining required permits from the City. All such work shall
be permitted, inspected and approved by the City prior to concealment or use. Lessee shall provide to
Lessor a contemporaneous copy of Lessee’s permit application and the associated plans and specifications.

77 Damage or Destruction. Lessee shall maintain insurance on the Premises and all
improvements and personal property located on and within the Premises. In the event that all or any portion
of the Premises is destroyed or rendered unusable, Lessee shall be entitled to replace, repair, restore, modify
or improve the Premises, subject to the provisions of Section 7.6, using insurance proceeds together with
any additional funds from other available sources, or, alternatively, Lessee shall pay the replacement cost
of the Premises to Lessor.

78 Fire Department Approval. Lessee shall provide for approval of the City Fire Marshall a
fire protection plan for the premises prior to commencing operations. The Fire Marshall has provided
guidance to the Lessee for the proper protection of the premises prior to the execution of this lease. The
Lessee shall maintain the approved fire protection plan throughout the life of the lease.

8. MAINTENANCE.

8.1 Maintenance by Lessee. Lessee shall, at its sole cost and expense, keep the Premises and
all improvements therein in a neat and clean condition and in good order, condition and repair. Lessee shall
prepare, maintain and follow a preventative maintenance schedule for all mechanical, electrical, plumbing,
drain, piping and air conditioning systems on the Premises, and, upon request, provide a copy of such

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schedule to Lessor and, if required by Lessor, a list of the dates on which such maintenance was actually
done.

8.2 Damage to Lessor Property. Any real or personal property of Lessor damaged or destroyed
by Lessee as a result of Lessee’s use or occupancy of the Premises shall be promptly repaired or replaced
by Lessee to the satisfaction of Lessor. In lieu of such repair or replacement, where required by Lessor,
Lessee shall pay to Lessor an amount sufficient to compensate for the loss sustained by Lessor.

8.3 Trash Removal. Lessee shall at all times keep the Premises in a neat, clean, safe, sanitary
and orderly condition and shall keep such area free of all trash and debris. Lessee shall be responsible for
all trash removal from the Premises. Such trash removal shall be performed on a not less than weekly basis,
and all trash shall be disposed of off the Airport. Prior to its removal from the Airport, Lessee shall deposit
all trash and debris only at collection stations located on the Premises, in accordance with City code.

8.4 Emergency Repairs. Within fifteen (15) days of the Effective Date, Lessee shall provide
Lessor with a list of names and telephone numbers for 24-hour emergency contact for the Premises. Lessee
shall promptly provide Lessor with updated lists and changes as necessary.

9. ASSIGNMENT, SUBLETTING AND OTHER TRANSFERS.

9.1 Right to Transfer. Lessee may freely transfer, assign, encumber, pledge or hypothecate its
interest in this Lease or any right or interest hereunder, or sublet the Premises or any part thereof, without
the prior consent of Lessor; provided, however, any assignment other than an assignment as security in
conjunction with or as part of a mortgage or deed of trust or an assignment by means of a foreclosure or
trustee’s sale thereunder shall require Lessor’s reasonable prior written consent. In the case of an
assignment (other than an assignment as security), the assignee must expressly assume in writing all of
Lessee’s obligations under this Lease, and in the case of a sublease, the sublease shall expressly provide
that it is subject to all of the terms and conditions of this Lease. Upon an assignment of all of its interest in
this Lease, the assignor shall be released from all liability and obligation under this Lease from and after
the effective date of the assignment.

9.2 Consent Not Required. Lessee may, without Lessor’s consent, cause a Transfer to an
Affiliate (as hereinafter defined) if Lessee: (i) notifies Lessor at least thirty (30) days prior to such transfer;
(ii) delivers to Lessor, at the time of Lessee’s notice, current financial statements of Lessee and the proposed
transferee that are reasonably acceptable to Lessor; and (iii) the transferee assumes and agrees in writing to
perform Lessee’s obligations under this Lease. For purposes of this paragraph, “Affiliate” means any
person or entity that, directly or indirectly, controls, is controlled by or is under common control with
Lessee. For purposes of this definition, “control” shall mean possessing the power to direct or cause the
direction of the management and policies of the entity by the ownership of a majority of the voting securities
of the entity.

9.3 Deemed Transfers. For the purposes of this Lease, a Transfer shall be deemed to include
the following: (i) if Lessee is a corporation, partnership, limited liability company, or other legal entity, the
transfer of any ownership interest in such entity resulting in a change in the present control of such entity
by the person or persons owning a majority of the ownership interest thereof as of the date of this Lease;
provided, however, if Lessee is a corporation whose stock is traded on a nationally recognized stock
exchange, the transfer of Lessee’s stock shall not constitute a Transfer requiring Lessor’s consent; or (ii)
the sale of twenty-five percent (25%) or more in value of the assets of Lessee.

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9.4 Non-Disturbance. Lessor agrees, for the benefit of all subtenants of all or any part of the
Premises, that if this Lease or Lessee’s right to possession of the Premises is terminated for default or
otherwise, all subleases of all or any part of the Premises, except any sublease to an affiliate of Lessee, shall
continue in full force and effect notwithstanding the termination as direct leases between Lessor and the
subtenants and all such subtenants upon request shall attorn in writing to Lessor.

10. IDENTIFICATION SIGNS.

Lessee may install on the Premises, a sign or signs identifying its business, provided, however, that
the general type, size, and location of such sign(s) shall conform to Lessor’s Comprehensive Sign Plan, be
approved in writing by Lessor in advance of installation and be subject to any signage rules, codes and/or
regulations of any governmental authority.

11. DEFAULT; TERMINATION BY LESSOR.

11.1 Events of Default. Each of the following shall constitute a material default of this Lease
by Lessee (an “Event of Default”):

11.1.1 The failure of Lessee to pay any installment of Base Rent or any other amount due
from Lessee hereunder, provided that Lessee does not cure such failure within ten (10) business days after
delivery by Lessor of a written notice of such failure.

11.1.2. The failure of Lessee to perform any of its other obligations under this Lease,
provided that Lessee does not cure such failure within thirty (30) calendar days after delivery by Lessor of
a written notice of such default; provided, however, if a cure of the default reasonably requires more than
thirty (30) calendar days to complete, then the time to cure shall be extended so long as the cure is being
diligently pursued.

11.1.3. The filing of any mechanic’s, materialmen’s or other lien or any kind against the
Premises because of any act or omission of Lessee which lien is not discharged, by bonding or otherwise,
within thirty (30) days of receipt of actual notice thereof by Lessee.

11.2 Lessor’s Remedies. Upon the occurrence of an Event of Default under this Lease, Lessor
may, without prejudice to any other rights and remedies available to a Lessor at law, in equity or by statute,
but subject to the provisions of Sections 9.2 and 23 herein, exercise one or more of the following remedies,
all of which shall be construed and held to be cumulative and non-exclusive:

11.2.1 Terminate this Lease and re-enter and take possession of the Premises; or

11.2.2 Without terminating this Lease, re-enter and take possession of the Premises and
terminate Lessee’s right of access or occupancy to the Premises; or

11.2.3. Without such re-entry, recover possession of the Premises in the manner prescribed
by any statute relating to summary process, and any demand for Base Rent, re-entry for condition broken,
and any and all notices to quit, or other formalities of any nature to which Lessee may be entitled, are hereby
specifically waived to the extent permitted by law; or

11.2.4 With or without terminating this Lease, Lessor may re-let the Premises or any
portion thereof.

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11.3. NoImplied Termination. Lessor shall not be deemed to have terminated this Lease unless
Lessor shall have notified Lessee in writing that it has so elected to terminate this Lease. Lessee hereby
waives all claims based on Lessor’s reentering and taking possession of the Premises or removing and
storing the property of Lessee and shall save Lessor harmless from all losses, costs or damages occasioned
thereby. No such reentry shall be considered or construed to be a forcible entry by Lessor.

11.4 Lessor’s Current Damages. Lessor is authorized to make such repairs, refurbishments or
improvements to the Premises as may be necessary for the purpose of attempting to re-let the Premises, and
the costs and expenses incurred in respect of such repairs, redecorating, refurbishments and improvements
shall be paid by Lessee to Lessor within five (5) business days after receipt of Lessor’s statement. If Lessor
exercises any of the remedies stated above, Lessor shall be entitled to recover from Lessee all damages
incurred by Lessor by reason of the Event of Default, which shall include, without limitation, (i) the
equivalent of the amount of the Base Rent and all other payments which would be payable under this Lease
by Lessee for the remainder of the term if this Lease were still in effect, less (ii) the net proceeds of any re-
letting by Lessor after deducting all of Lessor’s expenses in connection with such re-letting, which shall
include, without limitation, repossession costs, repairs, redecorating, refurbishments or improvements to
the Premises, brokerage commissions, attorneys’ fees, and legal expenses. Lessee shall pay such current
damages to Lessor, in the amount set forth in the preceding sentence (hereinafter called the “Deficiency”),
in monthly installments on the days on which the Base Rent would have been payable under this Lease if
this Lease were still in effect. All amounts collected by Lessor from subtenants shall be credited against
Lessor’s damages.

11.5 Lessor’s Final Damages. At any time after an Event of Default, whether or not Lessor shall
have collected any monthly Deficiency as set forth above, Lessor shall be entitled to recover from Lessee,
and Lessee shall pay to Lessor, on demand, as final damages for the applicable Event of Default, the sum
of (a) the then present worth (at a discount at the rate of six percent (6%) per annum) of (i) the aggregate of
the Base Rent and all other amounts to be paid by Lessee hereunder for the unexpired portion of the term
of this Lease (assuming this Lease had not been terminated), less (ii) the amount of such loss that could
have been reasonably avoided, plus (b) repossession costs, Lessor’s expenses in connection with any
attempts is may have made to re-let the Premises (which shall include, without limitation, repairs,
refurbishments or improvements to the Premises and brokerage commissions), attorneys’ fees, legal
expenses, and all other damages incurred by Lessor as a result of such Event of Default. In determining
the amount of loss that could reasonably be provided, rents to be paid by subtenants pursuant to Section 9.4
and other reasonably projected rental income from leasing the Premises shall be taken into account.

11.6 No Waiver by Lessor. No waiver by Lessor of any breach or default by Lessee in the
performance of its obligations under this Lease shall be deemed to be a waiver of any subsequent default
by Lessee in the performance of any of such obligations, and no express waiver shall affect an Event of
Default in a manner other than as specified in said waiver. The consent or approval by Lessor to or of any
act by Lessee requiring Lessor's consent or approval shall not be deemed to waive or render unnecessary
Lessor's consent or approval to or of any subsequent similar acts by Lessee.

11.7. Content of Default Notice. Any default notice tendered to Lessee hereunder shall be
deemed to be sufficient if it is reasonably calculated to put Lessee on inquiry as to the nature and extent of
such default, and is made in accordance with Section 19 herein.

11.8 Limitation on Exercise of Termination Remedy by Lessor. Notwithstanding anything to
the contrary in Section 11.2 hereinabove, if an Event of Default occurs, Lessor shall not have the remedy of
terminating this Lease or of taking possession of the Premises unless: (i) the Event of Default consists of a
failure to pay of Base Rent or other amounts owed to Lessor; or (ii) Lessor has no other remedy that is

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adequate to protect Lessor’s interests. Other remedies that are available to Lessor include self-help and
recovery of damages and nothing in this Section 11 shall limit the exercise of any such other remedy.

11.9 Waiver of Landlord’s Lien. Lessor hereby waives all statutory or common law landlord’s
lien rights with respect to personal property located on the Premises.

11.10 Cancellation. This Lease may be cancelled pursuant to the provisions of Arizona Revised
Statutes Section 38-511.

12. ASSUMPTION OF CRITICAL OPERATIONS.
RESERVED

13. INDEMNIFICATION.

To the fullest extent permitted by law, Lessee hereby agrees to defend, indemnify and hold harmless
Lessor and its members, elected or appointed officials, agents, contractors, subcontractors, boards,
commissions and employees (hereinafter referred to collectively as the “Lessor” for purposes of this Section
13) for, from and against any and all claims, causes of action, liability, suits, litigation (including reasonable
attorney’s fees and other costs of investigation and litigation), actions, losses, damages or claims of any
nature whatsoever which arise out of or in connection with (i) any accident, injury or damages occurring
within the Premises, or (ii) any negligent act or omission of Lessee or its agents, employees, contractors, or
subcontractors (hereinafter referred to collectively as “Lessee” for purposes of this Section 13) in
connection with Lessee’s operations hereunder and which result directly or indirectly in the injury to or
death of any persons or the damage to or loss of any property, or (iii) the failure of Lessee to comply with
any provisions of this Lease. This indemnification shall exclude responsibility for any consequential
damages and for claims arising by reason of the negligent or wrongful act of Lessor or its employees,
contractors or agents.

14, ENVIRONMENTAL PROTECTION.

14.1. Definitions. Unless the context shall clearly require otherwise, the terms defined in this
section shall, for all purposes of this Lease and of any agreement amendatory hereof or supplemental hereto,
have the meanings herein specified, with the following definitions to be equally applicable to both the single
and plural forms of any of the following:

14.1.1 Environmental Laws. The term "Environmental Laws" shall mean any one or all
of the following, as the same are amended from time to time: the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 USC Section 9601 et seq.; the Resource Conservation and Recovery
Act, 42 USC Section 6901, et seq.; the Toxic Substances Control Act, 15 USC Section 2601 et seq.; the
Safe Drinking Water Act, 42 USC Section 300h et seq.; the Clean Water Act, 33 USC Section 1251 et seq.;
the Clean Air Act, 42 USC Section 7401 et seq.; the Arizona Hazardous Waste Management Act, A.R.S.
Section 49-921 et seq. the Arizona Environmental Quality Act, Title 49 of the Arizona Revised Statutes, as
amended; and all regulations thereunder and any other laws, regulations and ordinances (whether enacted
by the local, state or federal government) now in effect or hereafter enacted that deal with the regulation or
protection of the environment, including the ambient air, ground water, surface water, and land use,
including substrata land, or that govern the use of hazardous materials, hazardous waste and hazardous
substances and petroleum products.

14.1.2 Hazardous Material. The term "Hazardous Material" shall mean any toxic or
hazardous material, substance or waste, or any pollutant or contaminant as defined or regulated pursuant to

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any Environmental law and petroleum products. For purposes of this definition, petroleum includes
petroleum-based substances comprised of a complex blend of hydrocarbons derived from crude oil through
processes of separation, conversion, upgrading and finishing (e.g., distillate fuel oils, petroleum solvents
and used oils).

14.2 Release by Lessor. Lessee is not responsible or liable for any environmental damage of
any kind or for the effects of Hazardous Material on the environment or on any person or property, if any,
which have been caused by the use of, or releases from, the Premises prior to Lessee's occupancy of any
part of the Premises. Lessee is not liable for any claims or damages arising from environmental damage
resulting or to result from contamination of any kind existing on the site or surrounding sites prior to
Lessee’s occupancy of the Premises.

14.3. Lessee Compliance.

14.3.1 Lessee shall, at the Lessee's own expense, comply with all present and hereafter
enacted Environmental Laws, and any amendments thereto, affecting Lessee’s operation on and property
interest in the Premises during the period of Lessee's occupancy of the Premises under this Lease.

14.3.2 Lessee shall not cause or permit any Hazardous Material to be brought upon, kept
or used in or about the Airport by Lessee, its agents, employees, contractors or invitees in violation or
threatened or suspected violation of any Environmental Law. The Parties recognize and agree that Lessee
may bring on the Premises and use Hazardous Materials that are ordinarily and customarily used in aircraft
servicing and maintenance, provided that such use shall fully comply with all applicable Environmental
Laws.

14.3.3 If Lessee desires to install upon the Premises, any underground storage tanks
("USTs"), Lessee shall submit the plans for such USTs to Lessor for prior approval and shall comply with
all applicable Environmental Laws related thereto, including Title 40, Code of Federal Regulations, Part
280, as adopted by the State of Arizona ("Part 280"), and Lessee shall be the owner of such USTs for
statutory purposes. Installation of USTs shall comply with the "code of practice" set forth in Part 280.
Lessee is solely responsible for the design, construction, installation, operation, monitoring, inspection,
repair and maintenance of any and all USTs, including any connected piping and/or dispensing apparatus.
Lessee shall provide to Lessor a copy of the Arizona Department of Environmental Quality Notification of
Underground Storage Tank Registration that Lessee submits to the state. All USTs shall meet or exceed
the tank performance standard for USTs installed after December 22, 1998, including corrosion protection,
leak detection and spill/overflow protection. Any UST that stores flammable and combustible liquids shall
meet the provisions of NFPA 30, Flammable and Combustible Liquids Code. Records demonstrating
compliance with release detection requirements, including product inventories, calibration and
maintenance, sampling, tightness testing and any other records, fees and taxes required by the state or
federal governments shall be the responsibility of Lessee. Upon the expiration of this Lease, Lessee shall
remove all USTs in compliance with all UST closure requirements under all applicable Environmental
Laws in effect at that time unless otherwise allowed by Lessor.

14.4 Indemnification. To the fullest extent permitted by law, Lessee shall indemnify, defend
(with counsel reasonably acceptable to Lessor), protect and hold harmless Lessor and its employees and
agents for, from and against any and all liability, loss, damage, expense, penalties and legal and
investigation fees or costs, arising from or related to any claim or action for injury, liability, or damage to
persons or property and any and all claims or actions brought by any person, entity or governmental body,
alleging or arising in connection with contamination of the environment or violation of any Environmental
Law or other statute, ordinance, rule, regulation, judgment or order of any government or judicial entity
which are incurred or assessed as a result of any of Lessee's activities or operations on or discharged on or
from the Premises during the Term of this Lease. This obligation includes, but is not limited to, all costs

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and expenses related to cleaning up the property, land, soil and underground or surface water as required
under the law. Lessee's obligations and liabilities under this Section 14.4 shall survive the termination of
this Lease. The indemnification of Lessor by Lessee as described above includes, without limitation, costs
incurred in connection with any investigation of site conditions or any cleanup, remedial, removal or
restoration work required by any federal, state or local governmental agency or political subdivision
because of Hazardous Material located on the property or present in the soil or ground water on or under
the Airport. If Lessor's right to enforce Lessee's promise to indemnify is not an adequate remedy at law for
Lessee's failure to abide by the provision of this Section 14.4, Lessor shall have the right to injunctive relief
in the event of any violation or threatened violation by Lessee.

14.5 Remediation. Without limiting the foregoing, if the presence of any Hazardous Material
during the Term of this Lease caused or permitted by Lessee results in any Release on the Airport in
violation or potential violation of any Environmental Law, Lessee shall promptly take action to remediate
the affected property at its sole expense as is necessary to return the Airport to the condition existing prior
to the introduction of any such Hazardous Material to the Airport; provided that Lessor's approval of such
actions shall first be obtained, except in emergency, which approval shall not be unreasonably withheld so
long as such actions would not potentially have any material adverse long-term effect on the Airport and
Lessee is not under administrative or court order related to such remediation action. Notwithstanding
Lessor's approval pursuant to this Section 14.5, Lessor is not responsible for directing or managing any
remediation action. For purposes of this Section 14.5, the term "Release" means any releasing, spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, disposing, or
dumping.

14.6 Governmental Submittals. Lessee shall, at Lessee's own expense, make all submissions to,
provide all information to, and comply with all requirements of the appropriate governmental authority (the
"Government") under the Environmental Laws. Should the Government determine that a site
characterization, site assessment and/or cleanup plan should be prepared and/or that a cleanup should be
undertaken because of any spills or discharges of Hazardous Materials by reasons of Lessee's operations or
actions at the Airport which occur during the term of this Lease, then Lessee shall, at the Lessee's own
expense, prepare and submit the required plans and financial assurances, and carry out the approved plans.

14.7 Information Sharing.

14.7.1 Lessee shall immediately notify Lessor of any of the following: (i) Lessee's receipt
of any notification from any governmental entity either charging or informing Lessee that it will be charged
with a significant (as defined below) violation of Environmental Laws, and (ii) any significant change in
Lessee's operation on the Premises that is reasonably likely to adversely change Lessee's or Lessor's
obligations or liabilities under the Environmental Laws. In addition, Lessee agrees to provide Lessor with
copies of documents reflecting the physical condition of the Premises, including but not limited to,
environmental testing of soils and groundwater, and information reasonably requested by Lessor to
determine the applicability of the Environmental Laws to the Premises, or to respond to any governmental
investigation or claim of liability by third parties which is related to environmental contamination of the
Premises or Lessee's operation thereon. A "significant violation of Environmental Law" shall be any
violation that requires more than thirty (30) calendar days to resolve.

14.7.2 Lessee shall install on any UST that it installs pursuant to Section 14.3.3, a method
or a combination of methods for Release detection that can detect a Release from any portion of the UST
and the connected underground piping. Lessee shall immediately notify the Airport Department of
Operations upon discovering a Release or Suspected Release of any amount of material that is stored inside
the UST. For purposes of this Section, a "Suspected Release" is any discovery of released Hazardous
Material at the UST site or surrounding area, erratic behavior of Hazardous Material dispensing equipment,

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the sudden loss of a Hazardous Material, an unexplained presence of water in the UST, or when monitoring
indicates that a Release has occurred. In the case of inventory control, Lessee shall notify the airport
operations department when the second consecutive month of inventory reconciliation data indicates that
there is a discrepancy in the figures recorded.

14.8 Sublease. Lessee shall insert provisions substantially identical to the provisions of this
Section 14 in any sublease agreement or contract by which it grants a right or privilege to any person, firm
or corporation under this Lease.

14.9 Actions of Lessee. The activities or actions of Lessee under this Section 14 shall include
the activities or actions of Lessee's officers, directors, employees, agents, contractors, invitees and
successors.

14.10 Clean Water Act; NPDES Permits and SWPPPs. Without in any way limiting the
foregoing, Lessee shall comply with all Environmental Laws regarding discharges to water and land,
including, without limitation, obtaining and complying with an individual National Pollutant Discharge
Elimination System ("NPDES") permit, or requesting coverage under and complying with any applicable
multi-sector permit obtained by Lessor. If applicable, Lessee shall also prepare and comply with a site-
specific Storm Water Pollution Prevention Plan ("SWPPP") or any revisions to an SWPPP, with respect to
Lessee's operations or activities on the Premises. At Lessee’s discretion, Lessee may chose to be added to
Lessor’s Storm Water Permit and, if such addition is desired, agrees to be subject to the provisions of
Exhibit E attached hereto.

14.11 Environmental Assessments.

14.11.1 If, during the term of this Lease, any of Lessee’s USTs are suspected of or known
to be leaking, Lessee shall perform, or cause to be performed, a site characterization of the Premises using
all appropriate sections of the LUST Site Characterization Manual dated January 15, 1999, or the most
current edition, including tables 1 through 6, as applicable (a "Site Characterization").

14.11.2 Within thirty (30) calendar days immediately preceding the expiration of this
Lease or within thirty (30) calendar days of any earlier termination of the Lease, Lessee shall:

a. Deliver to Lessor: (i) a Phase I environmental site assessment that
conforms to the standards set forth in 42 USC § 9601(35)(B), as amended by Pub. L. 107-118 (Jan. 11,
2002), section 223(2), and as may be further amended, and any regulations thereunder; and (ii) an
environmental compliance audit assessing the status of regulatory compliance of the Premises and all
operations and activities thereon; both prepared by a qualified engineer licensed by the State of Arizona;
and

b. In the event Lessee installs upon the Premises any USTs, perform or cause
to be performed a Site Characterization of the Premises in the event there is evidence that there has been or
may be a leak or Release of the UST contents; and

c. If either the assessment described in Section 14.11.2a (i) above or the Site
Characterization described in Section 14.11.2a (ii) above identifies any "recognized environmental
condition" or any other condition indicating a known or potential liability, including, but not limited to, a
known or potential violation of any Environmental Law or a past, present, or material threat of a future
release of a hazardous substance or a petroleum product into the environment, Lessor reserves the right, at

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Lessor's sole discretion, to require Lessee to conduct, at Lessee’s sole expense and with a scope of work
subject to Lessor's approval, further reasonable investigations and reasonable remediation.

14.12 Protective Devices and Plans. If Lessee is required by the City to estimate the possible
constituents of sanitary sewer discharges in order that the City may define certain discharge limitations for
the Premises, Lessee shall complete and return an Industrial Wastewater Discharge Questionnaire (the
“Questionnaire”) to the City and promptly provide Lessor with updates to the Questionnaire as they arise.
Also, if the City so requires, Lessee shall install and maintain appropriate protective devices to prevent
accidental discharge of any Hazardous Materials into domestic or industrial drains on the Premises, and for
any other material for which a slug load discharge could pollute the Airport’s storm water discharge or
disrupt operations at the sewage treatment plant serving the Premises. Lessee shall at all times post a notice
in a prominent place on the Premises advising employees what actions to take and whom to call in the event
of said discharge, and shall ensure that all employees of Lessee are trained with regard to the spill protection
plan hereinafter referenced. Lessee also shall provide Lessor with immediate notice of any spill.

14.13 Right to Enter Premises. Lessor’s rights under this Lease specifically include the right of
Lessor, the United States Government, the Environmental Protection Agency (the EPA), the Arizona
Department of Environmental Quality (ADEQ) and the Arizona Department of Occupational Safety and
Health (ADOSH) to enter the Premises upon reasonable notice to Lessee for purposes of: (i) inspecting
Lessee’s compliance with environmental, occupational safety and health laws and regulations, whether or
not such party is responsible for enforcing such laws; (ii) conducting environmental investigation or
remediation, including, without limitation, performing tests and surveys, drillings, test-pitting, borings,
compiling data and/or records, and other activities related to environmental investigation; and (iii) carrying
out remedial or removal actions as required or necessary under applicable laws, including, without
limitation, installing monitoring wells, pumping wells and/or treatment facilities. Lessor shall give Lessee
twenty-four (24) hours prior notice of its intention to enter the Premises unless it determines the entry is
required for safety, environmental, operations, or security purposes. Lessee shall have no claim against the
United States, EPA, ADEQ, the Arizona ADOSH or Lessor, or any officer, agent, employee, or contractor
thereof on account of any such entries.

14.14 Cleanup Requirements. Lessee agrees that Lessor assumes no liability to Lessee should
Hazardous Materials cleanup or related requirements, whether imposed by law, regulatory agencies, the
U.S. Government interfere with Lessee's use of the Premises. Lessee shall have no claim against Lessor or
the United States or any officer, agent, employee or contractor thereof on account of any such interference
whether due to entry, performance of remedial or removal investigations, or exercise of any right under this
Lease or otherwise. Lessee agrees to comply with the provisions of any health or safety plan in effect or
any hazardous substance remediation or response agreement with environmental regulatory authorities
during the course of any of the above described response or remedial actions. Any inspection, survey,
investigation, or other response or remedial action shall, to the extent practicable, be coordinated with
representatives designated by Lessee. Lessee shall have no claim on account of such entries against the
United States or any officer, agent, employee, contractor, or subcontractor thereof.

14.15 Spill Protection Plan. In the event Lessee undertakes any type of manufacturing,
maintenance or other activities on the Premises involving the use or generation of any Hazardous Materials
regulated by Hazardous Materials Laws, Lessee shall have an approved plan for responding to Hazardous
Materials, fuel, and other chemical spills prior to commencement of operations on the Premises. Such plan
shall comply with all applicable requirements and shall be updated from time to time as may be required to
comply with changes in site conditions or applicable requirements, and shall be approved by all agencies
having regulatory jurisdiction over such plan. Such plan shall be independent of Lessor’s spill prevention
and response plans, if any. Lessee shall not rely on use of Lessor or Lessor personnel or equipment in
execution of its plan. Lessee shall file a copy of the approved plan and approved amendments thereto with

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Lessor’s Airport Manager within thirty (30) calendar days of receipt of a CofO from the City.
Notwithstanding the foregoing, should Lessor provide any personnel or equipment, whether for initial fire
response and/or spill containment, on the request of Lessee, or because Lessee was not, in the opinion of
Lessor, conducting fire fighting, containment or timely cleanup actions, Lessee agrees to reimburse Lessor
for its actual costs in accordance with all applicable laws and regulations.

14.16 Wells. Lessee shall not install any new drinking water or other wells in any location on
the Premises without the prior written approval of Lessor.

14.17 Construction Activities and Surface Disturbances.

14.17.1 During Lessee’s construction of improvements on the Premises, if any, Lessee
agrees that in the event any hazardous substances, pollutants, contaminants, petroleum or petroleum
derivatives are found, Lessee shall promptly notify Lessor of such discovery and shall immediately cease
said construction pending investigation and remedial action, if necessary, by Lessor or the appropriate
regulatory agency.

14.17.2. After construction of Lessee’s Improvements on the Premises, Lessee shall not
conduct any subsurface excavation, digging, drilling or other disturbance of the surface without the prior
written approval of Lessor, which shall not be unreasonably withheld.

15. PROTECTION OF WETLANDS.

Lessee shall minimize the destruction, loss, or degradation of wetlands located on the Premises.
Lessor believes there are no wetlands existing on the Premises as of the Effective Date. However, before
locating new construction in wetlands, if any exist, Lessee shall contact Lessor and the United States Army
Corps of Engineers and obtain a permit or waivers under Section 404 of the Clean Water Act. For purposes
of this Section 15, the term, “new construction,” includes structures, facilities, draining, dredging,
channeling, filling, diking, impounding, and related activities.

16. SPECIAL PROVISIONS.

16.1 Lessee shall comply with all applicable Federal, State, and local occupational safety and
health regulations.

16.2 Lessee shall be responsible for determining whether it is subject to State and local
sanitation, licensing, building code or building permit requirements and whether or not it requires a permit
to do business and for compliance with them to the extent they are applicable.

17. INSURANCE.

17.1 Coverage Required. Lessee shall procure and maintain, or cause to be procured and
maintained, the following types and amounts of insurance with respect to the Premises:

17.1.1 As set forth in the Buckeye Minimum Standard Requirements for Airport
Aeronautical Services.

17.1.2 Reserved.
17.1.3. Worker’s Compensation insurance, as required by law, and Employer’s Liability

insurance in the amount stated in the Buckeye Minimum Standard Requirements for Airport Aeronautical
Services.

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17.2. Form. Each insurance policy obtained pursuant to this Section, except for Worker’s
Compensation and Employer’s Liability policies, shall: (i) name Lessor as an additional named insured;
(ii) contain a provision that written notice of cancellation or modification thereof shall be given to Lessor
not less than thirty (30) days before such cancellation or modification takes effect ten (10) days in case of
nonpayment of premium); and (iii) contain a waiver of subrogation in favor of Lessor. Lessee shall not
permit any insurance policy to be canceled or modified without Lessor’s written consent unless equivalent
replacement policies are issued with no lapse in coverage. All policies shall be obtained from insurance
companies licensed to do business in the State of Arizona and possessing a rating of at least A - VII or
higher from the A.M. Best Company, or an equivalent rating and approved by Lessor.

17.3. Certificates of Insurance. Lessee shall deliver a certificate of insurance for each policy to
Lessor, in standard ACORD form, prior to the Effective Date and shall continue to provide such certificates
throughout the term of this Lease.

17.4 Additional Insurance. At any time during the term of this Lease, Lessor may, if in its
reasonable determination the insurance coverage required by this Section 17 is no longer adequate, require
Lessee to increase its coverage to commercially reasonable amounts.

17.5 Blanket Insurance. Lessee’s insurance obligations under this Lease may be satisfied by
means of “blanket” or excess policies.

17.6 Insurance by Lessor. In the event Lessee shall fail to procure any insurance required
hereunder, Lessor may, upon written notice to Lessee, procure and maintain any or all of the insurance
required of Lessee under this Section. In such event, all costs of such insurance procured and maintained
by Lessor on behalf of Lessee shall be the responsibility of Lessee and shall be fully reimbursed to Lessor
within ten (10) business days after Lessor advises Lessee of the cost thereof.

18. SURRENDER OF POSSESSION.

18.1 Condition of Property. Upon the expiration or termination of this Lease, Lessee’s right to
occupy the Premises and exercise the privileges and rights granted under this Lease shall cease, and Lessee
shall peaceably surrender the same and leave the Premises broom clean and in good condition except for
normal wear and tear. All trade fixtures, equipment, and other personal property installed or placed by
Lessee on the Premises which are not permanently affixed thereto shall remain the property of Lessee, and
Lessee shall have the right at any time during the term of this Lease, to remove the same from the Airport,
and that Lessee shall repair, at its sole cost, any damage caused by such removal. Any property not removed
by Lessee within the thirty (30) day period immediately following Lease termination shall become a part
of the Premises, and ownership thereof shall vest in Lessor.

18.2 Holding Over. Lessee shall not remain in possession of the Premises after the expiration
or earlier termination of the Term without the express written consent of Lessor. Should Lessee hold over
without the express written consent of Lessor, such tenancy shall be at the sufferance of Lessor and not a
renewal of the Term and in such case, the Base Rent and all other charges due pursuant to this Lease shall
be payable at one hundred fifty percent (150%) of the amount payable during the last year of the Term and
such tenancy at sufferance shall be subject to every other term, covenant and provision of this Lease. In
the event Lessee holds over, Lessee shall be liable for all of Lessor's direct and consequential damages,
which shall include, without limitation, costs, fees, expenses, damages and attorneys’ fees incurred by
Lessor as a result of Lessee's holding over, and damages and expenses incurred by Lessor for its inability
to deliver possession of the Premises to a new lessee.

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19, INSPECTION BY LESSOR.

Lessor may enter upon the Premises at reasonable times and upon reasonable notice for any
reasonable purposes including, but not limited to, compliance with the terms and conditions of this Lease
and the exercise of its governmental functions such as fire protection or security purposes.

20. NOTICES.

20.1 All notices required or permitted under this Lease shall not be effective unless personally
delivered or mailed by certified mail, return receipt requested, postage prepaid, or by reputable commercial
overnight courier service, to the following addresses:

TO LESSOR: City of Buckeye
530 East Monroe Avenue
Buckeye, Arizona 85326
Telephone: 623-349-6880
Attn: Ryan Reeves, Airport Coordinator

TO LESSEE: Skydive Buckeye, LLC and Desert Petroleum, LLC
3000 South Palo Verde Road
Buckeye, Arizona 85326
Telephone: 623-980-4888
Attn.: Shane Seydel, Owner/Manager

20.2 Any notice shall be deemed to have been received two (2) days after the date of mailing, if
given by certified mail, or upon actual receipt if personally delivered or if given by reputable commercial
overnight courier service. Any Party may designate in writing a different address for notice purposes
pursuant to this Section.

21. SEVERABILITY.

Should a court of competent jurisdiction declare any provision of this Lease invalid, the remaining
terms shall remain effective.

22. SALES AND PROPERTY TAXES.

Lessee shall pay any leasehold tax, sales tax, personal property tax, transaction privilege tax, license
or permit fees or other tax assessed as the result of its occupancy of Premises or conduct of business at the
Airport under authority of this Lease, including any such tax assessable on Lessor. In the event that laws
or judicial decisions result in the imposition of a real property tax or any other form of tax or imposition on
the interest of Lessor, such tax shall also be paid by Lessee for the period this Lease is in effect to the extent
such taxes are reasonably attributable to the Premises or a portion thereof or the operation of Lessee’s
business.

23. APPROVALS, CONSENTS AND NOTICES.

All approvals, consents and notices called for in this Lease shall be in writing, signed by the
appropriate party, and may not be established solely by oral testimony.

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City of Buckeye Property Lease Agreement (SKYDIVE BUCKEYE) November 1, 2021

24. LIENS AND MORTGAGES.
24.1 General Provisions.

24.1.1 Except as provided in this Section 24, Lessee shall not engage in any financing or
other transaction creating any mortgage or deed of trust upon the Premises, place or suffer to be placed
upon the Premises any lien or other encumbrance, or suffer any levy or attachment to be made on Lessee’s
interest in the Premises. Any such mortgage or deed of trust, encumbrance, or lien shall be deemed to be a
violation of this Section, constituting a failure to comply with the terms of the Lease, on the date of its
execution or filing of record regardless of whether or when it is foreclosed or otherwise enforced.

24.1.2 Notwithstanding anything to the contrary in Section 9 herein, Lessee shall be
entitled from time to time during the Term of this Lease to mortgage, collaterally assign, or otherwise
encumber its leasehold interest under this Lease to secure indebtedness, including, without limitation, a
loan to finance construction of improvements and other development on the Premises, and refinancings
thereof, subject to the restrictions of Section 24.1.3, and provided, however, that the language of such
mortgage or deed of trust and of all related documents that require the execution, approval, or consent of
Lessor shall be subject to the prior review and approval of legal counsel for Lessor, and that all legal fees
incurred by Lessor in connection with such legal counsel review and approval shall be paid by Lessee. Any
such encumbrance is referred to as a “Mortgage” and the holder thereof a “Mortgagee”. The Mortgagee,
upon taking possession or upon foreclosure or taking an assignment in lieu thereof, shall be liable for all
future rents and obligations hereunder and shall attorn to Lessor. No Mortgage shall encumber Lessor’s
interest in the Premises or the improvements thereon. Further and promptly after Lessee assigns or
encumbers any portion of the Premises or the improvements thereon, Lessee shall furnish Lessor with a
written notice setting forth the name and address of such Mortgagee or trustee.

24.1.3 No Mortgage or deed of trust shall extend to or affect the fee, the reversionary
interest or the estate of Lessor in the Premises. No Mortgage or deed of trust shall be binding upon Lessor
in the enforcement of its rights and remedies under this Lease and by law provided, unless and until a copy
thereof shall have been delivered to Lessor and such Mortgage or deed of trust is authorized in accordance
with provisions of this Section 24.

24.2 Lessor Agreement. With respect to Mortgagees of the Premises, Lessor agrees that:

24.2.1 If requested by a Mortgagee which shall have duly registered in writing with
Lessor its name and address, and if Lessor shall give any notice, demand, election or other communication
required hereunder (hereafter collectively “Notices”) to Lessee, Lessor shall concurrently give a copy of
each such Notice to the Mortgagee at the address designated by it. Notices shall be sent by registered or
certified mail, return receipt requested, and shall be deemed given seventy two (72) hours after the time
they are deposited in a United States Post Office with postage charges prepaid, addressed to the Mortgagee.
No Notice given by Lessor to Lessee shall be binding upon or affect Lessee or the Mortgagee unless a copy
of the Notice shall be given to the Mortgagee pursuant to this Section 24.2.1.

24.2.2 Such Mortgagee entitled to such Notices, as specified above, shall have any and
all rights of Lessee with respect to the curing of any default hereunder by Lessee.

24.2.3 If Lessor shall elect to terminate this Lease by reason of any default by Lessee with
respect to the Premises, the Mortgagee that shall have become entitled to notice as provided in this Section
24.2 shall have any and all rights of Lessee with respect to curing of any default with respect to the Premises.

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