Contract from 2004

LEASE AGREEMENT
BETWEEN THE
TOWN OF WICKENBURG
AND
JOHN GRACE

PARTIES. This Lease, dated, for reference purposes only, July-30-2004 is made by and between the Town
of Wickenburg, Arizona, a municipal corporation and political subdivision of the State of Arizona (herein
called "Landlord”) whose address for purposes of notice hereunder is 165 North Tegner, Suite A,
Wickenburg, Arizona 85300, and John Grace (herein called “Tenant’) whose address for purposes of notice
hereunder is: 2052 Rabbit Road, Wickenburg, Arizona 65390.

PREMISES; PRIVILEGES; RESTRICTIONS. Landlord does hereby lease to Tenant and Tenant hereby

leases from Landlord one (1) parcel of land located at the Wickenburg Municipal Airport for the

construction and use of aircraft hangars (herein called "Premises") as more particularly described in Exhibit

"A" attached hereto and made a part hereof. Tenant shall have an exclusive ground lease including all

privileges, uses and rights further defined herein to the Premises and a non-exclusive right to use all other

areas and amenities of the Wickenburg Municipal Airport.

2.1. Landlord grants to Tenant the following privileges, uses and rights:

2.1.1. The general use of all public facilities and improvements, which are or may hereafter be
constructed at the Wickenburg Airport, including runways, approach ways, taxiways and
navigational aids.

2.1.2. The right of ingress and egress from the Premises over and across the designated Airport
property and public roadways serving the Airport, and the public parking areas, to be utilized
by Tenant, its agents, employees and invitees.

2.1.3. In addition to said general privileges, uses and rights, Landlord grants to Tenant the right to
construct aircraft hangars on the Premises. Tenant may use, lease or sell such hangars,
provided that Tenant, its heirs, successors and assigns, comply with all provisions of this Lease
Agreement, the Town Code, Airport’s Rules and Regulations and Minimum Operating
Standards applicable to the use selected by Tenant.

2.2. Tenant shall not use the property for any purposes other than those specified above. All rights
granted to Tenant under this Lease are nonexclusive excepting only those rights to build hangars at
the Premises, which are exclusive to Tenant.

2.3. Tenant is leasing the Premises, which is that part of the Wickenburg Municipal Airport on which the
hangars will be built. Tenant will improve other portions of the Wickenburg Municipal Airport and
upon completion of all such improvements and acceptance by Landlord, Landlord will fully
maintain and be wholly responsible for such improvements that are not located on the Premises and
for the restroom all as further defined herein.

TERM AND RIGHT TO RENEW.

3.1. The term of this Lease shall be for twenty (20) years, commencing on the Ig day of January
20.04, and ending on the \G. day of Januar, , 202 4, unless sooner terminated as provided
herein. ?

3.2. Landlord grants to Tenant an option to renew this Lease for one successive twenty (20) year period,
subject to the terms and conditions as are contained in this Lease, provided that Tenant is not in
default of any of its obligations under this Lease at the time of the renewal. Landlord shall give
Tenant one hundred (120) days written notice prior to the renewal period. Tenant may exercise said

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option by delivering to the Airport Director written notice of its intention to do so at least ninety (90)
days prior to the expiration of this Lease.

4, POSSESSION.

41.

4.2.

5. RENT.

5.1.

5.2,

If Landlord, for any reason whatsoever, cannot deliver possession of the said Premises to Tenant at
the commencement of the term hereof as a result of causes beyond its reasonable control, this Lease
shall not be voidable, nor shall Landlord be liable to Tenant for any loss or damage resulting
therefrom, but in that event, all rent shall be abated during the period between the commencement
of said term and the time when Landlord delivers possession and the term of the Lease shall be
extended by the same amount of time Landlord does not deliver possession of the Premises. If
Landlord does not deliver possession of the premises to Tenant on or before the ninetieth day
following execution of this Lease, Tenant shall not be responsible for any additional payments.
Tenant may elect to terminate this Lease by giving notice to Landiord at any time before the date
Landlord delivers possession of the Premises to Tenant.

4.1.1 Landlord knows of no reason or circumstance, which would prohibit Tenant from occupying
the Premises at the commencement date set forth in Section 3.1 above.

In the event that Landlord shall permit Tenant to occupy the Premises prior to the commencement
date of the term, such occupancy shall be subject to all the provisions of this Lease. Said early
possession shall not advance the termination date hereinabove provided.

Tenant owns the structure and shall pay, without notice and free from all claims, the annual rent in
the amount $898.00 for the ground that is leased from the Town of Wickenburg as described in
Exhibit “A”. This amount may be adjusted periodically but not more often than once every two years
to reflect changes in the market. Market rate will be calculated by establishing an equalized rent for
the Grace Hanger. The equalized rent is used to establish an equitable rate for the ground lease and
is calculated on the per square foot rent amount charged for hanger space by Gant/Bonanza or it’s
successor, times the area of the Grace Hanger times thirteen percent (13%). Grace owns the structure.
Gant/Bonanza pays the Town 13% of the gross rent collected from the rental of its hangers.

If Tenant fails to pay any rent in full on or before the due date, Tenant shall be responsible for
interest on the unpaid balance at the rate of eighteen percent (18%) per annum from the due date
until the payment is made in full.

6. IMPROVEMENTS AND ALTERATIONS,

6.1.

6.2.

Tenant may install improvements and alterations to the Premises at Tenant’s expense, provided
Tenant obtains Landlord’s prior written approval, which shall not be unreasonably withheld.
Tenant shall provide reasonable information to Landlord upon request concerning improvements
and alterations. Before the start of construction of improvements or modifications to the Premises,
Tenant shall secure all applicable building permits and approvals from the Town of Wickenburg. In
addition, Tenant shall furnish any additional information concerning any proposed improvements
or modifications, which Landlord may deem necessary with regard to safety of the Premises and/or
compatibility with the general use of the Airport. Tenant shall coordinate all design and
construction on the Premises with any and all other development occurring at the Wickenburg
Municipal Airport including, but not limited to, construction of the on-airport access road.

The design and construction of all improvements on the Premises shall comply with all federal, state,
and local laws and regulations including, but not limited to, the National Fire Protection Association
Code, the Uniform Fire Code as adopted by the Town of Wickenburg and the International Building
Code as adopted by the Town of Wickenburg. Further, Tenant agrees to comply with all terms and
related regulations pertaining to the permit issued by the Department of the Army, Corps of
Engineers pursuant to Section 404 of the Clean Water Act (33 U.S.C. 1344) and the Nationwide
Permit Number 26.

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6.3, Landlord may require modifications to the Premises as necessary for the safety of air navigation. If
any improvements or modifications to the Premises made by Tenant interfere with any Federal
Aviation Administration (hereinafter “F.A.A.”), or such succeeding federal authority, navigational
aid, Tenant and Landlord agree to negotiate in good faith on the cost of removal or modification of
the improvements, which interfere with any F.A.A. navigational aid. All improvements and
modifications made by Tenant shall be constructed in a good, workmanlike manner, free from
defects, and in accordance with plans approved by the Town of Wickenburg.

64. Tenant shall keep the Premises and all improvements thereon free from any mechanics or material
man’s liens or liens of any kind or nature for any work done, labor performed or material furnished
on or to the Premises. In the event any contractor, subcontractor or laborer to Tenant files any
mechanic's or material man’s lien ("lien") for work performed for Tenant at the Premises, Tenant
shall either (i) take all actions necessary to pay such claimant and have the lien released and
satisfied, or (ii) record a statutory discharge of lien bond pursuant to A.R.S. § 33-1004, and the cost of
such bond shall be borne by Tenant. Tenant shall either pay the lien claimant or record the lien
discharge bond within ninety (90) days of Tenant receiving actual notice of lien or within fifteen (15)
days after a foreclosure, lien suit is filed. Tenant shall indemnify, defend and hold harmless
Landlord from all liens, costs and damages resulting from lien claims.

6.5. All improvements and modifications made by Tenant which become fixtures to the Premises shall
become the property of Landlord, at no cost to Landlord, upon the expiration or termination of this
Lease, free of any security, interest, or claims of any kind from or through Tenant excepting only the
hangars which Tenant or Tenant's lessees may remove at their sole expense at the expiration or
termination of this Lease. The public restroom to be constructed by Tenant shall be a fixture and
become the property of Landlord. Tenant shall thereafter supply Landlord with copies of any
environmental tests or reports generated in connection with such removal together with the
certification from a licensed engineer demonstrating that the Premises are free of contamination
from any and all hazardous materials on the property or which may have escaped from equipment
on the property.

6.6. Tenant agrees, at its expense, to return the Premises at the conclusion of the Lease term to Landlord
in a condition that is equal to or better than the condition at the inception of the Lease and free from
the presence of pollutants, contaminants and Regulated Substances which result from Tenant's use
or occupancy of the Premises as defined below in Paragraph 7 of this Agreement.

USE. Tenant shall use the Premises for the construction of hangars as described in Section 6 of this Lease,
for lease or sale, subject to approval of Landlord, which approval shall not be unreasonably withheld, of
such hangars subject to the restrictions set forth in this Lease Agreement, storage of aircraft, and individual,
non-commercial aircraft maintenance and repair and shall not use or permit the Premises to be used for
commercial use, unless such use is approved by the Wickenburg Airport Commission and Town Council,
aircraft maintenance (other than non-commercial maintenance on individual aircraft) or for any other
purpose without the prior written consent of Landlord, storage of aircraft for air rescue purposes excepted.

Commercial aircraft maintenance is defined as a for-profit aircraft maintenance business operated at the

Wickenburg Municipal Airport. Tenant shall use all reasonable efforts to insure that all lessees of hangars

comply with this Lease Agreement, the Town Code, and the Airport Rules and Regulations relating to the

use of the hangars. Tenant shall not use or allow the Premises to be used for any unlawful purpose or a

purpose inconsistent with the terms of this Lease, nor shall Tenant cause, maintain or permit any nuisance

in, on or about the Premises. Tenant shall not commit or suffer to be committed any waste in or upon the

Premises.

7.1. Tenant recognizes that assuring protection of public health, welfare and the environment from
activities upon the Premises during the Lease Term is an important consideration for Landlord and
during the Lease Term the federal, state and local laws, rules, regulations and ordinances relating to
pollution, protection of the environment, public health, safety or industrial hygiene (hereinafter

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7.2,

7.3.

7A,

7.5.

7.6.

referred to as the “Applicable Laws’) will change. Throughout the Lease Term, Tenant will use
reasonable efforts to maintain compliance with all Applicable Laws.
Tenant will not, unless disclosed and agreed to by Landlord, use any liquid, solid, semi-solid or
gaseous substances (hereinafter referred to as Regulated Substances), which are, or during the Lease
Term may become, subject to regulation under Applicable Laws on the Premises. Tenant shall not
have on the Premises any Regulated Substances. Regulated Substances include, but are not limited
to, any and all substances, materials or wastes regulated under the Resource Conservation and
Recovery Act, 43 U.S.C. Section 8909, et. Seq; the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Sections 9601, ET. Seq.; the Toxic Substances Control Act,
15 U.S.C. Sections 2601, ET. Seq,; the Arizona Hazardous Waste Management Act, A.R.S. Section 49-
921, ET. Seq.; the Arizona Underground Storage Tank Regulation Act, A.R.S. Section-101, ET. Seg.;
and the rules and regulations adopted and guidelines promulgated pursuant to the Applicable
Laws. Landlord recognizes that Tenant's lessees will use the hangars for the storage of aircraft,
which by necessity involves some storage for individual use for aircraft housed within the hangars
of Regulated Substances including fuel and lubricating oil. However, Tenant shall use all reasonable
efforts to insure that its lessees comply with the requirements of this Section 7.2 and shall require
that the provisions of this section shall be included in all leases and contracts relating to the use of
the hangars. Proof of such inclusion shall be provided to Landlord upon reasonable request.
In addition to the other requirements of this section, Tenant shall not release, discharge, leak or emit,
or permit to be released, discharged, leaked or emitted into the atmosphere, ground, soil, sewer
system, surface water or groundwater any substance if such substance (as reasonably determined by
Landlord, or any governmental authority) does or may pollute or contaminate the same, or may
adversely effect (a) the environment, (b) the health, welfare or safety of persons whether located on
the Premises or elsewhere, or (c) the condition, value, use or enjoyment of the Premises or any other
real or personal property. Tenant has or will timely obtain, maintain and comply with all provisions
of all permits, which are required under the Applicable Laws (hereinafter referred to as the
“Permits”).
Tenant shall immediately notify Landlord, and Landlord shall immediately notify Tenant, orally and
in writing, of any allegations by any governmental authority or other person or entity of any event of
non-compliance with the applicable laws or permits of this section. Tenant shall also immediately
notify Landlord, and Landlord shall immediately notify Tenant, orally and in writing, of any
allegations by any governmental! authority or other person or entity, of any events, conditions,
circumstances, activities, practices, incidents, actions or plans which may interfere with or prevent
continued compliance with Applicable Laws, Permits or the provisions of this section, or which may
give rise to any common law or legal liability, or otherwise form the basis of any claim, action, suit,
proceeding, hearing or investigation, based on or related to the generation, manufacture,
distribution, use, treatment, storage, disposal, transport, or handling, or the emission, discharge,
release or threatened release into the environment, of any pollutant, contaminant or Regulated
Substance.
Landlord, or its authorized representative, agent or contractor, shall have the right, upon reasonable
notice and in cooperation with Tenant, to inspect the Premises and to review and copy documents,
records, and data maintained by Tenant relating to substances used and stored on the Premises or
disposed of, released or otherwise removed from the Premises, in order to assure itself that Tenant is
in compliance with the provisions of this Paragraph.
In addition, Landlord shall have the right, at its expense, to perform periodic environmental
inspections as Landlord deems necessary using the services of a qualified and duly licensed
environmental engineer approved by Tenant whose approval thereof may not be unreasonably
withheld. Unless Landlord has actual knowledge of Tenant's failure to comply with the Lease
provisions concerning use as set forth in this Section 7, periodic environmental inspections shall not
be done more frequently than every five (5) years. Landlord and Tenant shall reasonably agree on
an appropriate procedure for environmental inspections. The said engineers shall conduct such
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7.7.

78.

sampling and testing of soils, water, substances and emissions, as Landlord deems necessary to
assure itself that Tenant complies with the provisions of this Section. In the event the results of the
inspection indicate a need, such as a violation of federal, state or local laws or a health or safety
hazard, for further testing and/or remediation as a result of Tenant’s use of the Premises in order to
comply with ADEQ or EPA remediation standards or guidelines, then Tenant hereby agrees to
reimburse Landlord for its reasonable inspection costs and to pay for such additional testing and
remediation as will be required as a consequence of Tenant's use of the Premises. Should
remediation be required as a consequence of Tenant’s use of Premises, Tenant shall immediately
undertake such remediation as is necessary to restore the condition of the Premises and shall
diligently pursue such work to completion. Tenant's failure to timely perform its obligations under
this Paragraph shall be considered a material breach of this Lease, and Tenant's obligations under
this Paragraph shall continue beyond the expiration or termination hereof. Nothing in this
Paragraph shall constitute a waiver of any right of Tenant, including without limitation, the right to
receive contribution from any individual or entity responsible for contamination of any part of the
Premises.

Any instance of non-compliance with Applicable Laws, Permits or the provisions of this Paragraph
shall be grounds for termination of this Lease by Landlord provided, however, Landlord shall give
Tenant written notice of non-compliance and Tenant shall have at least thirty (30) days to take all
actions to comply with Applicable Law. If thirty (0) days is insufficient to comply but Tenant acts
consistently, and in good faith to obtain compliance, Landlord shall extend the time for compliance
as determined to be necessary and appropriate by the Parties without termination of this Lease.

To the fullest extent permitted by law or as provided in this Lease, Tenant agrees to indemnify,
defend and hold Landlord harmless for any and all costs of legally required remediation of
environmental contamination and from any and all claims, demands, actions, suits, proceedings,
hearings, investigations, responsibility, liability, orders, injunctions, judgments, fines, damages and
losses of any nature whatsoever, arising out of or relating in any way to Tenant’s present or future
use of, or activities or operations on or at, the Premises or arising from or relating to any breach of
the provisions of this Paragraph except for those damages directly attributable to Landlord’s
negligence. Tenant also agrees to indemnify and hold Landlord harmless for any and all costs and
expenses incurred in connection therewith, including without limitation, any and all attorneys’ and
expert witness fees, investigation, clean up, removal, disposal, remedial, corrective, or mitigating
action costs, fines and penalties related in any way to Tenant's use of the Premises except for those
damages directly attributable to Landlord’s negligence. These indemnities shall survive the
termination of this Lease.

8. ACCEPTANCE; MAINTENANCE; REPAIRS.

8.1.

8.2.

Subject to the provisions of Section 24 below, Tenant warrants that it has inspected the Premises and
accepts possession of the Premises and the improvements thereon “as is” in its present condition,
and subject to all limitations imposed upon the user thereof by the rules and regulations of the
F.A.A. and by ordinances of Landlord, and Tenant acknowledges the suitableness or sufficiency of
the Premises for the uses permitted hereunder. Except as may otherwise be specifically provided for
herein, Landlord shall not be required to maintain or to make any improvements, repairs or
restorations upon or to the Premises or to any of the improvements presently located thereon except
provided in Section 6.3 above. Under no circumstances shall Landlord have any obligation to repair,
maintain or restore any improvements placed upon the Premises by Tenant.

Tenant shall be solely responsible, at its cost, for all repairs and maintenance whatsoever on the
Premises and shall maintain all improvements thereon in a good, workmanlike manner and free
from defects, whether such repair or maintenance be ordinary, extraordinary, structural or
otherwise. Additionally, Tenant, without limiting the generality hereof, shall:

8.2.1. Keep at all times, in a clean and orderly condition and appearance, the Premises, all

improvements thereon and all of Tenant's fixtures, equipment and personal property which are
Page 5 of 14

located on any part of the Premises. Except for the restroom which Landlord shall maintain,
Tenant shall be responsible for all janitorial services on the Premises;

8.2.2. Be responsible for the maintenance and repair of all interior utility service lines placed on the

Premises and used by Tenant or its assignees exclusively.

9. ADDITIONAL OBLIGATIONS OF TENANT.

9.1.

9.2.

9.3.

9.4,

9.5.

9.6.

9.7,

9.8.

9.9.

9.10.

Tenant shall designate (to the Airport Director) at least one (1) person who shall be Tenant's Agent
for purposes of operations coordination, notices and compliance with the terms of this Lease. Such
person shall be authorized by Tenant to take al! remedial action as is necessary and approved in
writing by Tenant so long as such remedial measures are not of an emergency nature requiring
immediate action. If such measures are of an emergency nature requiring immediate action,
Landlord shall not be required to obtain Tenant’s written consent. All notices shall be given in
accord with Section 1 above and to Tenant's Agent as designated. Until further written notice
Tenant's Agent is John Grace.

Tenant shall conduct its operations hereunder in an orderly and proper manner, considering the
nature of such operation, so as not to unreasonably annoy, disturb, endanger or be offensive to
others.

Tenant shall take all reasonable measures:

9.3.1. Not to produce on the Airport any disturbance that interferes with the operation by the Town of

Wickenburg or the F.A.A. of air navigational, communication or flight equipment on the
Airport; and

9.3.2. To reduce to a minimum vibrations tending to damage any equipment, structure or building.

Tenant shall control the conduct and demeanor of its officers, agents, employees, and invitees as
reasonable and practicable and, upon objection from Landlord concerning the conduct, or demeanor
of any such person, Tenant shall immediately take all lawful steps necessary to remove the cause of
the objection.

Tenant shall comply with all written instructions of Landlord in disposing of its trash and refuse and
shall use a system of refuse disposal approved by Landlord.

Tenant shall not do, nor permit to be done, anything which may interfere with the effectiveness or
accessibility of the drainage system, sewerage system, fire protection system, sprinkler system, alarm
system and fire hydrants and hoses, if any, installed or located on the Premises.

Tenant shall take measures to ensure reasonable security in accordance with generally accepted and
reasonable security procedures.

Tenant shall not do, nor permit to be done, any act or thing upon the Premises:

9.8.1. Which may constitute a hazardous condition so as to unreasonably increase the risks attendant

upon the operations permitted by this Lease; or

9.8.2. Which will invalidate or conflict with any fire insurance policies or regulations, Uniform Fire

Code, N.F.P.A. Standard No. 409 for operation of aircraft, and other provisions as applicable to
the Premises or other contiguous premises at the Airport.
Tenant shall provide prompt written notice to Landlord of any person or entity performing aircraft
maintenance work, flight instruction, air taxi, charter or aircraft leasing of any sort on the Premises
for commercial purposes without a valid permit or approval from Landlord.
Tenant shail conduct its operations in such a manner as to keep the noise produced by aircraft
engines and component parts thereof or any other noise to a minimum by the use of such methods or
devices as are practicable, considering the extent and type of the operations of Tenant. In addition,
all reasonable care, caution and precaution shall be used to minimize prop or jet blast interference on
the Premises to aircraft operations, or to buildings, structures and roadways now located on, or
which in the future may be located on, areas adjacent to the Airport.

Page 6 of 14

10. COMPLIANCE WITH LAW. Tenant shall not use the Premises or permit anything to be done in or about

11,

12.

the Premises which will in any way conflict with any law, statute, ordinance or governmental rule or
regulation now in force or which may hereafter be enacted or promulgated. Tenant shall, at its sole cost and
expense, promptly comply with all laws, statutes, ordinances and governmental rules, regulations or
requirements now in force or which may hereafter be in force, and with the requirements of any board of
fire insurance underwriters or other similar bodies now or hereafter constituted which offer any opinions
relating to, or affecting the condition, use or occupancy of the Premises, excluding structural changes not
related to or affected by Tenant's improvements or acts. The judgment of any court of competent
jurisdiction or the admission of Tenant in any action against Tenant, whether Landlord be a party thereto or
not, that Tenant has violated any law, statute, ordinance or governmental rule, regulation or requirement,
shall be conclusive of that fact as between Landlord and Tenant.

ASSIGNMENT AND SUBLETTING. Subject to Section 11.2. and to Tenant's right to sublease or sale,
subject to approval of Landlord which approval shall not be unreasonably withheld, hangars to tenants for
purposes of storing aircraft, Tenant shall not assign or sublease any of its interest under this Lease, nor
permit any other person to occupy the Premises without the prior written consent of Landlord, such consent
not to be unreasonably withheld. Landlord, may, as a condition of approval, require that any potential
transferee submit biographical and financial information to Landlord at least thirty (30) days prior to any
transfer of Tenant’s interest. Upon completion of the construction of the Hangars and completion and
acceptance by Landlord of all improvements, Tenant may assign his interests under this Lease subject to
review and approval of such transfer by Landlord which approval shall not be unreasonably withheld.
1L1. Tenant may mortgage, encumber or assign any portion of its right, title and interest in the leasehold
estate created by this Lease to lenders for purposes of financing the initial construction of the capital
improvements required by this Lease. Any such mortgage, encumbrance or assignment shall be
subject to all Tenants’ obligations under this Lease. No person or entity shall have the right to place
any mortgages, deeds of trust, liens or encumbrances of any nature on the Premises, nor shall any
permitted assignment result in a subordination, in whole or in part, of Landlord’s rights under this
Lease.
11.2. Tenant may install signs on the Premises, subject to the Town of Wickenburg’s sign ordinance and
approval, in writing, by the Airport Director prior to installation.

INDEMNIFICATION. Landlord shall not be responsible or liable for any loss, theft, or damage to property

or injury to or death of Tenant or any person on the Premises (or about the Premises due to activities on the

Premises), except for Landlord and its agents and assigns, and except for loss, theft or damage to property

or injury or death of Tenant or other person which results from Landlord’s negligence, and Tenant agrees to

indemnify, defend, and hold Landlord harmless therefrom.

12.1. Tenant agrees that Landlord shall not be liable or responsible for any loss, injury, death or damage to
persons or property which at any time may be suffered or sustained by Tenant, customers, invitees
or licensees using or coming onto the Premises unless such loss, injury, death or damage to persons
or property is caused by Landlord’s negligence. If both parties are negligent, fault will be
apportioned accordingly. Tenant agrees to indemnify and hold Landlord harmless from any and all
claims, liabilities, losses, damages, costs and expenses whatsoever, arising from the use of the
Premises by Tenant's agents, employees, customers, invitees or licensees.

12.2. If any person not a party to this Lease shall institute an action against Tenant which is subject to this
indemnity in which Landlord involuntarily and without cause shall be made a party defendant,
except for an action caused by Landlord’s acts or failure to act when it was legally obligated to do so.
If both parties are negligent, fault will be apportioned accordingly. Tenant shall indemnify and
defend Landlord through legal counsel reasonably satisfactory to Landlord and shall save Landlord
harmless from all liabilities by reason thereof, including reasonable attorneys’ fees and all costs
incurred by Landlord in such action.

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12,3,

12.4.

Landlord shall give Tenant prompt notice of any claim made or suit instituted which may subject
Tenant to liability under this Section and Tenant shall have the right to compromise and defend the
same to the extent of its own interest. Landlord shall have the right, but not the duty, to participate
in the defense of any claim or litigation with attorneys of Landlord’s selection without relieving
Tenant of any obligations hereunder. Tenant's obligations hereunder shall survive any termination
of this Lease or Tenant's activities at the Airport.

Notwithstanding anything to the contrary set forth herein, Tenant shall owe Landlord no duty for
indemnification for any loss, injury, death or damage that occurs outside the Premises.

13, WAIVER OF SUBROGATION.

13.1.

13.2.

The parties release each other, and their respective authorized representatives, from any claims for
damage to any person or to the Premises and its improvements, and to the fixtures and personal
property that are caused by or result from risks insured against under any insurance policies carried
by the parties and in force at the time of any such damage.

Each party shall cause each insurance policy obtained by it to provide that the insurance company
waives all right of recovery by way of subrogation against either party in connection with any
damage covered by any policy. Neither party shall be liable to the other for any damage caused by
fire or any of the risks insured against under any insurance policy required by this Lease. If any
insurance policy cannot be obtained with a waiver of subrogation, or is obtainable only by the
payment of an additional premium charge above that charged by insurance companies issuing
policies without waiver of subrogation, the party undertaking to obtain the insurance shall notify the
other party of this fact. The other party shall have a period of ten (10) days after receiving the notice
either to place the insurance with a company that is reasonably satisfactory to the other party and
that will carry the insurance with a waiver of subrogation, or to agree to pay the additional cost. If
the insurance cannot be obtained or the party in whose favor a waiver of subrogation is desired
refuses to pay the additional premium charged, the other party is relieved of the obligation to obtain
a waiver of subrogation rights with respect to that particular insurance involved.

14. LIABILITY INSURANCE.

14,1,

14.2,

14,3.

14.4,

During the entire term hereof, Tenant shall keep in full force and effect a policy of general public
liability and property damage insurance with respect to the premises and the businesses conducted
by Tenant, in which the limits of public liability shall not be less than $1,000,000 per person and
$2,000,000 per occurrence, and in which the property damage liability shall not be less than
$2,000,000 per occurrence. Coverage must include broad form contractual, broad form property
damage and personal injury, premises operations, independent contractors and subcontractors and
fire damage. The policy shall name Landlord as an additional insured, and shall contain a clause
that the insurance company will not cancel or materially change the insurance without giving
Landlord thirty (30) days prior written notice. The insurance shall be in an insurance company
authorized to do business in the State of Arizona and a copy of the policy or certificate of insurance
shall be delivered to Landlord.

Fire and extended casualty coverage for all improvements and fixtures on the Premises, in an
amount not less than the full replacement value thereof, to the extent such coverage is available to
Tenant.

Worker’s compensation and employer's liability coverage in the amounts required by law, if
necessary

Landlord may increase such insurance limits if the standard insurance limits for Landlord increase
during the term of this Lease. Such increases shall be determined when the rent is increased
pursuant to Section 5.2 of this Lease.

15. SERVICES AND UTILITIES. Provision of utilities to the Premises shall be in accordance with Paragraph
6.3. All costs for utilities are to be paid, before delinquent, by Tenant or its assignees.

Page 8 of 14

16.

17.

18.

19.

PROPERTY TAXES. Tenant shall pay, or cause to be paid, before delinquency, any and all taxes levied or
assessed and which become payable during the term hereof upon all Tenant's leasehold improvements,
equipment, furniture, fixtures and personal property located in the Premises. In the event any or all of
Tenant's leasehold improvements, equipment, furniture, fixtures and personal property shall be assessed
and taxed with the Premises, Tenant shail pay to Landlord its share of such taxes within ten (10) days after
delivery to Tenant by Landlord of a statement in writing setting forth the amount of such taxes applicable to
Tenant's property.

HOLDING OVER. If Tenant remains in possession of the Premises or any part thereof after the expiration
of the term hereof, with the express written consent of Landlord, such occupancy shall be a tenancy from
month to month at a rental in the amount of the last monthly rental, plus all other charges payable
hereunder, and upon all the terms hereof applicable to a month to month tenancy.

ENTRY BY LANDLORD.

18.1. Landlord reserves and shall at any reasonable time have the right to enter the Premises which shall
not include any hanger, inspect the same, supply service to be provided by Landlord to Tenant
hereunder, to submit said Premises to prospective purchasers or tenants and to post notices of non-
responsibility.

18.2. Landlord shall not be required to repair any injury or damage by fire or other cause, or to make any
repairs of the Premises, of improvements and property of Tenant. Tenant shall not be entitled to any
compensation or damages from Landlord for loss of the use of the whole or any part of the Premises,
Tenant's personal property or any inconvenience or annoyance occasioned by such damage.

F.A.A. REQUIRED PROVISIONS.

19.1. Tenant shall, in the event facilities are constructed, maintained or otherwise operated on the
Premises for a purpose for which a D.O.T. program or activity is extended or for another purpose
involving the provision of similar services or benefits, maintain and operate such facilities and
services in compliance with all other requirements imposed pursuant to Title 49, Code of Federal
Regulations (“CFR.”), D.O.T., Subtitle A, Office of the Secretary, Part 21, Nondiscrimination in
Federally-Assisted Programs of the Department of Transportation-Effectuation of Title VI of the
Civil Rights Act of 1964, and any amendments thereto.

19.2. Tenant agrees that: (1) no person on the grounds of race, color, or national origin shall be excluded
from participation in, denied the benefits of or be otherwise subjected to discrimination in the use of
the Premises; (2) in the construction of any improvements on, over or under the Premises and the
furnishing of services thereon, no person on the grounds of race, color, or national origin shall be
excluded from participation in, denied the benefits of or otherwise be subject to discrimination; and
(3) Tenant shall use the Premises in compliance with all other requirements imposed by or pursuant
to Title 49, CFR., D.O.T., Subtitle A, Office of the Secretary, Part 21, Nondiscrimination in Federally-
Assisted Programs of the Department of Transportation-Effectuation of Title VI of the Civil Rights
Act of 1964, and any amendments thereto.

19.3. In the event of breach of any of the above nondiscrimination covenants, Landlord shall have the
right to terminate this Lease and to reenter and repossess the Premises and hold the same as if this
Lease had never been made or issued. This provision does not become effective until the procedures
of 49 CER. Part 21 are followed and completed including expiration of appeal rights. Landlord shall
also give Tenant thirty (30) days’ written notice and a reasonable opportunity to cure any alleged
breach of any obligation set forth in this Section 19 before this Lease can be terminated or judicially
enforced.

19.4. Tenant shall furnish its accommodations and/or services on a fair, equal and not unjustly
discriminatory basis to all users thereof and it shall charge fair, reasonable and not unjustly
discriminatory prices for each unit or device; provided that Tenant may be allowed to make

Page 9 of 14

19.5.

19.6,

19.7.

19.8.

19.9,

19,10.

19,11,

19,12.

19.13.

19,14.

19.15.

reasonable and nondiscriminatory discounts, rebates or other similar types of price reductions to
volume lessees.

Non-compliance with this Section 19 shall constitute a material breach and Landlord shall be entitled
to the remedies set forth in Section 20 of this lease if Tenant fails to cure such breach in accordance
with Sections 19.3 and 20.3.
Tenant shall insert the above five provisions in any lease by which Tenant grants a right or privilege
to any person, firm or corporation to render accommodations and/or services to the public on the
Premises.

Tenant shall undertake an affirmative action program as required by 14 CFR. Part 152, Subpart E, to
insure that no person shall on the grounds of race, creed, color, national origin or sex be excluded
from participating in any employment activities covered in 14 CFR. Part 152, Subpart E. Lessee
agrees that no person shall be excluded on these grounds from participating in or receiving the
services or benefits of any program or activity covered by this Subsection. Tenant shall require its
covered sub organizations to provide assurances to Tenant that they similarly will undertake
affirmative action programs and that they will require assurances from their sub organizations, as
required by 14 CFR. 152, Subpart E, to the same effect.
Landlord reserves the right to further develop or improve the Airport as it sees fit, regardless of the
desires or view of Tenant, and without interference or hindrance. Landlord shall develop or
improve the Airport taking into account and without impairing Tenant’ rights and those of Tenant's
hanger lessees and the goals and purposes of this Lease.
This Lease shall be subordinate to the provisions and requirements of any existing or future
agreement between the Town of Wickenburg and the United States relative to the development,
operation or maintenance of the Airport. In the event any future agreement between the Town of
Wickenburg and the United States results in a substantial impairment to Tenant's rights hereunder,
Tenant shall have the option to terminate this lease.
There is hereby reserved to Town, for the use and benefit of the public, a right of flight for the
passage of aircraft in the airspace above the surface of the Premises. This public right of flight shall
include the right to cause in said airspace any noise inherent in the operation of any aircraft used for
navigation of flight through said airspace or landing at, taking off from or operation on the Airport.
Tenant shall comply with the notification and review requirements covered in Federal Aviation
Regulations (“F.A.R.”) Part 77 in the event future construction of a building is planned for the
Premises, or in the event of any planned modification or alteration of any present or future building
or structure situated on the Premises.
Tenant shall not erect nor permit the erection of any structure or object, nor permit the growth of any
tree on the Premises that exceeds the mean sea level elevations contained in F.A.R. Part 77 or
amendments thereto, or interferes with the runway and/or taxiway “line of sight” of the control
tower. If these covenants are breached, Landlord reserves the right to enter upon the Premises and
to remove the offending structure or object and cut the offending tree, all of which shail be at the
expense of Tenant.
Tenant shall not make use of the Premises in any manner, which might interfere with the landing
and taking off of aircraft from the Airport or otherwise constitute a hazard. If this covenant is
breached, Landlord reserves the right to enter upon the Premises and cause the abatement of such
interference at the expense of Tenant.

Nothing in this Lease shall be construed to grant or authorize the granting of any exclusive right
within the meaning of Section 308a of the Federal Aviation Act of 1985 (49 U.S.C. 1349a).
If the F.A.A. or any other federal, state or local authority requires the relocation of the Wickenburg
Municipal Airport from its present location or if the Town of Wickenburg desires to relocated the
Wickenburg Municipal Airport, Tenant shall have the following remedies:

19.15.1.1. Reimbursement of all costs, fees and expenses reasonably incurred by Tenant in moving

the improvements to the new location of the Wickenburg Municipal Airport; or

Page 10 of 14

19.15.1.2. At Tenant’s sole option, buy-out of Tenant's interest in this Lease by the payment of
then fair-market value of the Lease considering all existing subleases; or
19.15.1.3. This Lease shall terminate.

20. DEFAULT. The breach of any of the above-mentioned provisions or the occurrence of any one or more of
the following events shall constitute a default and breach of this Lease by Tenant.

20.1.
20.2.

20.3.

20,4.

The vacating or abandonment of the Premises by Tenant.

The failure by Tenant to make any payment of rent or any other payment required to be made by
Tenant hereunder, as and when due, where such failure shall continue for a period of ten (10),
business days after written notice thereof by Landlord to Tenant.

The failure by Tenant to observe or perform any of the covenants, conditions or provisions of this
Lease to be observed or performed by Tenant, other than described in Paragraph 20.2., above where
such failure shall continue for a period of thirty (80) days after written notice thereof by Landlord to
Tenant; provided, however, that if the nature of Tenant's default is such that more than thirty (30)
days are reasonably required for its cure, then Tenant shall not be deemed to be in default if Tenant
commences such cure within said thirty (30) day period or for the time periods required by notice in
other sections of this Lease and thereafter diligently prosecutes such cure to completion.

The making by Tenant of any general assignment or general arrangement for the benefit of creditors
not previously approved by Landlord; or the filing by or against Tenant of a petition to have Tenant
adjudged bankrupt, or a petition for reorganization or arrangement under any law relating to
bankruptcy unless, in the case of a petition filed against Tenant, the same is dismissed within sixty
(60) days; or the appointment of a trustee or a receiver to take possession of substantially all of
Tenant's assets located at the Premises or of Tenant's interest in this Lease, where possession is not
restored to Tenant within thirty (30) days; or the attachment, execution or other judicial seizure of
substantially all of Tenant's assets located at the Premises or of Tenant's interest in this Lease, where
such seizure is not discharged in thirty (30) days.

21. LANDLORD'S REMEDIES IN DEFAULT.

21,1.

In the event of any such material default or breach by Tenant, which is not cured by Tenant Landlord
shall give Tenant notice of intention to cancel this Lease at the expiration of ten (10) business days
from the date of service of said notice. At the expiration of said ten (10) days, if Tenant has not cured
the default or breach, the term of this Lease shall expire. Said notice shall contain a statement of the
facts constituting the default or breach by Tenant. Upon the expiration of the ten (10) days, Landlord
may:

21.1.1, Terminate Tenant's right to possession of the Premises by any lawful means, in which case this

Lease shall terminate and Tenant shall immediately surrender possession of the Premises to
Landlord. Landlord's remedy for Tenant's material default under this Lease shail be limited to
termination of the Lease, the cost of recovering possession of the Premises, and reasonable
attorney's fees.

21.2 It is hereby understood and mutually agreed by and between Tenant and Landlord that the date of
beginning, rate of progress and the time for completion of the Airport Hangars to be done hereunder
are essential conditions of this lease; and it is further mutually understood and agreed that the work
embraced in this Lease shall be complete on or before the dates set forth in Section 6.2 of this Lease.
Tenant agrees that said work shall be prosecuted regularly, diligently and uninterruptedly at such rate
of time specified. It is expressly understood and agreed, by and between Tenant and Landlord that the
time for completion of the work shall be in the time as identified in this Lease. If Tenant fails to perform
such work on or before the dates set forth in Section 6.2, Landlord has the right to terminate this Lease
and assume ownership of all improvements installed by Tenant or to seek damages from Tenant in the
amount of TWO HUNDRED THIRTY-FOUR DOLLARS ($234) per month for each month said
improvements remain uncompleted.

Page 11 of 14

22, TENANT'S REMEDIES AND DEFAULT.

23,

24,

22.1,

22,2.

Landlord shall be in default of this Lease if it fails or refuses to perform any provision of this Lease
that it is obligated to perform if the default cannot reasonably be cured within thirty (30) days after
notice of the default has been given by Tenant to Landlord. If the default cannot reasonably be cured
within thirty (30) days, Landlord shall not be in default of this Lease if Landlord commences to cure
the default within the 30-day period and diligently and in good faith prosecutes such cure to
completion.

Tenant, at any time after Landlord defaults, can cure the default at Landlord's cost. If Tenant at any
time, by reason of Landlord's default, pays any sum or does any act that requires the payment of any
sum, the sum paid by Tenant shall be due immediately from Landlord to Tenant at the time the sum
is paid, and if paid at a later date, shall bear interest at the rate of eighteen percent (18%) per annum
from the date the sum is paid by Tenant until Tenant is reimbursed by Landlord. If Landlord fails to
reimburse Tenant as required by this Paragraph, Tenant shall have the right to withhold from future
rent due the sum Tenant has paid until Tenant is reimbursed in full for the sum and interest on it.

OFFSET STATEMENT. Tenant shall at any time and from time to time upon not less than ten (10) days
prior written notice from Landlord execute, acknowledge and deliver to Landlord a statement in writing, (a)
certifying that this Lease is unmodified and in full force and effect (or, if modified, stating the nature of such
modification and certifying that this Lease as so modified, is in full force and effect), and the date to which
the rental and other charges are paid in advance, if any, and (b) acknowledging that there are not, to
Tenant's knowledge, any uncured defaults on the part of Landiord hereunder, or specifying such defaults if
any are claimed.

TERMINATION RIGHTS,

24,1.

24.2.

25.1.

25.2.

25.3.

If Tenant is unable to obtain all applicable building permits or obtain additional information and
conduct such studies, tests and surveys concerning the proposed improvements with results
satisfactory to Tenant then, within one hundred fifty (150) days after executing this Lease, Tenant
may terminate this Lease and all obligations hereunder shall terminate and be null and void effective
as of the date this Lease is signed. All rent, which may have been paid, shall be returned to Tenant.
Notwithstanding anything stated herein to the contrary including without limitation Paragraphs 6.5,
7.3 and 10 above, if any governmental entity or authority adopts any law, regulation or directive that
requires Tenant under the provisions of this Lease to make modifications to the Premises the cost of
which would be substantial and prohibitive, Landlord and Tenant agree that at Tenant's option, the
rent under this Lease will be abated until Tenant has recouped a sum equal to the amount of the cost
actually incurred or the Lease may be terminated.

. GENERAL PROVISIONS.

Plats and Riders. Clauses, plats and riders, if any, signed by Landlord and Tenant and endorsed on
or affixed to this Lease are a part hereof.

Waiver. The waiver by Landlord of any term, covenant or condition herein contained shall not be
deemed to be a waiver of such term, covenant or condition on any subsequent breach of the same or
any other term, covenant or condition herein contained. The subsequent acceptance of rent
hereunder by Landlord shall not be deemed to be a waiver of any preceding breach by Tenant of any
term, covenant or condition of this Lease, other than the failure of Tenant to pay the particular rental
so accepted, regardless of Landlord's knowledge of such preceding breach at the time of the
acceptance of such rent.

Notices. All notices and demands that may or are to be required or permitted to be fixed by either
party to the other hereunder shail be in writing. All notices and demands by Landlord to Tenant
shall be sent by United States mail, postage prepaid, addressed to Tenant at the below-mentioned
address, or to such other place as Tenant may from time to time designate in a notice to Landlord.

All notices and demands by Tenant to Landlord shali be sent by United States mail, postage prepaid,
Page 12 of 14

25.4.

25.5.

25.6.

25.7.

25.8.

25.9,

25.10,

25.11.

25.12.

addressed to Landlord at the below-mentioned address, or to such other person or place as Landlord
may from time to time designate in a notice to Tenant. :

TENANT: LANDLORD:

john Grace Shane Dille, Town Manager
2052 Rabbit Road Town of Wickenburg
Wickenburg, Arizona 85390 155 N. Tegner Street, Suite A

Wickenburg, Arizona 85390
With copy mailed to by U.S. Mail to:

Craig L. Keller, Esq. Susan D. Goodwin, Esq./K. Russell Romney, Esq.
Keller & Hickey, P.C. Martinez & Curtis, P.C.

4450 S. Rural Rd., Suite C-222 2712 N. 7* Street

Tempe, AZ 85282-7020 Phoenix, Arizona 85006

Marginal Headings. The marginal headings and Article titles to the Articles of this Lease are not a
part of this Lease and shali have no effect upon the construction or interpretation of any part hereof.
Time. Time is of the essence of this Lease, each, and all of its provisions in which performance is a
factor.
Successors and Assigns. The covenants and conditions herein contained, subject to the provisions as
to assignment, apply to and bind the heirs, successors, executors, administrators and assigns of the
parties hereto.
Recordation. Neither Landlord nor Tenant shall record this Lease or a short form memorandum
hereof without the prior written consent of the other party.
Prior Agreements. This Lease contains all of the agreements of the parties hereto with respect to any
matter covered or mentioned in this Lease, and no prior agreement or understanding pertaining to
any such matters shall be effective for any purpose. No provision of this Lease may be amended or
added to except by an agreement in writing signed by the parties hereto or their respective
successors in interest. This Lease shall not be effective or binding on any party until fully executed
by both parties hereto.
Inability to Perform. This Lease and the obligations of Landlord and Tenant hereunder shall not be
affected or impaired because Landlord or Tenant is unable to fulfill any of its obligations hereunder
or is delayed in doing so, if such inability or delay is caused by reason of strike, labor troubles, acts
of God or any other cause beyond the reasonable control of Landiord or Tenant.
Attorneys’ Fees. In the event of any action or proceeding brought by either party against the other
under this Lease, the prevailing party shall be entitled to recover all costs and expenses including the
fees of its attorneys in such action or proceeding in such amount as the court may adjudge
reasonable as attorneys’ fees.
Sale of Premises by Landlord. In the event of any sale of the Premises, Landlord shall be and is
hereby entirely freed and relieved of all liability under any and all of its covenants and obligations
contained in or derived from this Lease arising out of any act, occurrence or omission occurring after
the consummation of such sale; and the purchaser, at such sale or any subsequent sale of the
Premises shall be deemed, without any further agreement between the parties or their successors in
interest or between the parties and any such purchaser, to have assumed and agreed to carry out any
and all of the covenants and obligations of Landlord under this Lease.
Subordination, Attornment. Upon request of Landlord, Tenant will in writing subordinate its rights
hereunder to the lien of any first mortgage, or first deed of trust to any bank, insurance company or
other lending institution, now or hereafter in force against the land and Building of which the
Premises is a part, and upon any buildings hereafter placed upon the land of which the Premises are
a part, and to all advances made or hereafter to be made upon the security thereof. In the event any
proceedings are brought for foreclosure, or in the event of the exercise of the power of sale under
Page 13 of 14

25.13.

25.14.

25,15,

25.16,
25.17,

any mortgage or deed of trust made by Landlord covering the Premises, Tenant shall attorn to the
purchaser upon any such foreclosure or sale and recognize such purchaser as Landlord under this
Lease.

The provisions of this Article to the contrary notwithstanding, and so long as Tenant is not in default
hereunder, this Lease shal! remain in full force and effect for the full term hereof.

Severability. Any provision of this Lease which shall prove to be invalid, void or illegal shall in no
way affect, impair or invalidate any other provision hereof and such other provision shall remain in
full force and effect.

Cumulative Remedies. No remedy or election hereunder shall be deemed exclusive but shall,
wherever possible, be cumulative with all other remedies at law or in equity.

Choice of Law. The laws of the State of Arizona shall govern this Lease.

Future Cooperation. Landlord and Tenant shall execute such other documents and take such other
actions as are reasonably necessary to accomplish the purposes of this Lease.

The parties hereto have executed this Lease at the place and on the dates specified immediately adjacent
to their respective signatures.

TOWN OF WICKENBURG, Landlord JOHN GRACE, Tenant
oy

,
Bosee-

Jes GRACE, TENANT

xx

K, Russell Rontiéy, Town Attoriey

Martinez & Curtis, P.C.

Page 14 of 14

NORTHWEST CORNER SEC 8,

[re GLO BRASS CAP IN
FENCE LINE
SKETCH
@ OF
AIRCRAFT HANGAR FOOT PRINT
AT WICKENBURG AIRPORT,
SITUATED IN THE NW 4, SEC 8,
= T 7 N, RSW, OF THE GILA AND
of SALT RIVER BASE AND
sf MERIDIAN,
MARICOPA, COUNTY
ne ARIZONA
= SCALE 17 = 40
be Ae
r 3
= o\s
S88°59'51" oO oan
b \y eon 3,934 sq, ON,
= , 0.09 acres
ral
sr “SN.GUTSIDE EDGE OF CONCRETE
NOTES: FOUNDATION
a SURVEYED DEC. 2003
BASIS OF BEARINGS IS WEST LINE OF SECTON 8,
SEE MAP FILED AT BOOK 451, PAGE 28, OFFICIAL
RECORDS OF MARICOPA COUNTY
GPSND
LAND SURVEYING
TOPOGRAPHIC MAPPING

@—_west ¥% CORNER SEC 8,

FOUND %° IRON PIPE P.O. BOX 188

MORRISTOWN, AZ. 85344
928.671.1100
email jay@gpsnd.com

* LEGAL DESCRIPTION

A portion of the Northwest quarter of Section 8, Township 7 North, Range 5
West of the Gila and Salt River Base and Meridian, Maricopa County,
Arizona more particularly described as follows;

Commencing at the Northwest Corner of said Section 8;

Thence South 01°00'09” West along the West line of said Section 8 a distance
of 1739.31 feet to a point;

Thence South 88°59'51” East a distance of 1733.25 feet to the Northwest
corner of a concrete foundation, the TRUE POINT OF BEGINNING;
Thence North 60°36'22” East a distance of 65.26 feet to the Northeast corner
of said foundation;

Thence South 29°31'24” East a distance of 60.28 feet to the Southeast corner
of said foundation;

Thence South 60°36'22” West a distance of 65.26 feet to the Southwest
corner of said foundation;

Thence North 29°31'24” West a distance of 60.28 feet to the true point of

beginning.

Scrivener Jay S. Zimmerman, RLS 14972