Draft_Lease_Agreement_9900_Flightline_Drive_4_14_2025.docx

Example Lease

This Land and Building Agreement (“Lease”) is made and entered into as of _____ day of __________, 2025 (“Effective Date”), by and between the City of Kingman, an Arizona municipal corporation (“Lessor”), and ________________________________, an Arizona corporation (“Lessee”). The Lessor and Lessee are sometimes referred to collectively as the “Parties”, or individually as a “Party”.

WHEREAS, the City is the owner of the Kingman Municipal Airport;

WHEREAS, Lessee desires to lease certain property at the Airport on which to <insert business purpose> containing approximately <square feet of building and total acres> and being more particularly described in Exhibit A attached to this Lease (the “Property”);

WHEREAS, Lessee desires to use the Property <insert aeronautical operation> and subject to the terms and conditions of this Agreement; and

WHEREAS, the City is willing to lease the Property to Lessee on the terms and conditions specified below.

THEREFORE, in consideration of the following mutual covenants and conditions, the parties hereby agree as follows:

1. Leased Premises. Lessor hereby leases to Lessee, and Lessee agrees to take and let from Lessor, that real property described as follows (collectively, the "Leased Premises"):

a. Premises include 3.46 acres (150,718 square feet) with a building of approximately 25,200 square feet known as "Hanger A" located at 9900 Flightline Drive, Kingman, Arizona, described on the attached Exhibit "A" ("Hangar A"); and,

2. Term. Except as provided in this Paragraph 2, the term of this Lease shall be for <Insert number> (#) years, commencing on <month day, year> (the "Commencement Date") and ending at 11:59 p.m. on <month day, year> (the "Initial Term"), subject to the right of renewal hereinafter set forth. Notwithstanding the foregoing, on <month day, year>, this Lease as to Hangar A only shall expire and automatically terminate. Upon such termination, Lessee shall remove its personal property from Hangar A and surrender possession of Hangar A in a clean condition with all trash and refuse removed therefrom, and in a condition at least as good as it was in on the Commencement Date, reasonable wear and tear accepted.

3. Renewal. At the expiration of the Initial Term, this Lease shall automatically be renewed for <insert number> (#) additional <insert number> (#) year terms (each, a "Renewal Term" and with the Initial Term, collectively, the "Term"), the first of which shall commence on <month day, year>, and shall expire at 11:59 p.m. on <month day, year>, and the second of which shall commence on <month day, year>and shall expire on <month day, year>. Provided that Lessee is not in default under this Lease at the time of renewal, this Lease shall automatically be renewed for such Renewal Terms unless either Lessor or Lessee give the other party written notice of their intent not to renew this Lease at least sixty (60) days prior to expiration of the Initial Term or the then-effective Renewal Term. If either party gives such notice, then this Lease shall be deemed terminated and expired at the end of the last effective term. If this Lease is renewed as provided herein, all terms and conditions of this Lease shall remain in full force and effect during the Renewal Terms, including, without limitation, the annual increase to the Rent as set forth in Paragraph 4.

4. Rent.

a. Lease Rate. Lessee agrees to pay the following sums to Lessor as base rent for the Leased Premises (collectively, the "Base Rent") payable in advance on the first (1st) day of each and every month during the Term of this Lease, commencing on the first (1st) day of <month, year>, subject to the annual adjustment as provided in Paragraph 4.d below:

i. Hangar A:

1. For the period of July 1, 2025 through June 30, 2026, the sum of <insert amount> ($#) per month; and,

b. Term and Proration. For the initial payment of Rent, the Lessor may prorate the rental amount in order to adjust the first payment if the payment date does not fall on the first of the month or other date upon which future payments will be due.

c. Payment of Rent. Lessee shall, without prior notice or demand and without any set off or deduction whatsoever, pay the Rent and any other rent or other charges due under this Lease. Lessee covenants and agrees that all sums to be paid under this Lease, if not paid when due, shall bear interest on the unpaid portion thereof at the rate described in Section 3.4.

d. Late Charge and Interest. In the event that any payment required to be made by Lessee to Lessor under the terms of this Lease is not received within the notice and cure period, if any, a late charge shall become immediately due and payable as a late charge in an amount equal to fifteen percent (15%) of the payment that is late. Further, in the event of Lessee's failure to pay Rent or any other amounts due under this Lease, Lessee shall pay Lessor interest on any such overdue payments and associated late charges at the rate of one and one-half percent (1.5%) per month until such sums are paid, but in no event an amount greater than permitted by law. The late charge and interest on overdue amounts shall not limit any claim by Lessor for damages due to Lessee's default.

5. Taxes and Rental Impositions. With and in addition to the Rent and at the same times as Rent is payable, Lessee agrees to pay to Lessor as additional rent (or pay the appropriate governmental body) any and all excise, privilege, license or sales taxes, assessments, special assessments, enhanced municipal services district assessments, water and sewer rents, rates and charges, charges for public utilities, excises, levies, licenses and permit fees, and other governmental or quasi-governmental charges, general and special, ordinary and extraordinary, foreseen and unforeseen, of any kind or nature whatsoever which, at any time during the Term may be assessed, levied, confirmed, imposed upon, or become due and payable out of or with respect to, or become a lien on or encumbering, the Premises or any part thereof, or any appurtenances thereto. Lessee will pay, prior to them becoming delinquent, all taxes of every nature levied or assessed against either the interest of Lessor or Lessee on the Premises during the term hereof, and on all property of Lessee placed upon the Premises. Further, Lessee shall also pay any governmental property lease excise taxes or other taxes imposed on this Lease or Lessee's lease of the Premises on or prior to the due date of such taxes. Within ten (10) days following request by Lessor, Lessee shall provide Lessor with evidence of payment of all such taxes or impositions.

6. Rental Rate Adjustment.

a. Rate Adjustment. Effective on July 1st of each and every year and continuing during the entire Term of this Lease thereafter, the rent amount shall be adjusted upward annually by the “Consumer Price Index for All Urban Consumers Unadjusted” (Index) using an annual June calculation period. Said adjusted base rent shall be calculated on each Adjustment Date and will become the new base rent amount for the ensuing year.

b. Modifications and Replacement of Index. If the lndex is changed so that the base year differs from that in effect when the term commenced, the lndex shall be converted in accordance with the conversion factor published by the United States Department of Labor, Bureau of Labor Statistics. If the Index is discounted or revised during the term, such other government index or computation with which it is replaced, as reasonably determined by Lessor, shall be used in order to obtain substantially the same result as would be obtained if the Index had not been discounted or revised. If the CPl-U index is no longer published by the US Department of Labor, the parties shall use the US Department of Labor index or report most clearly approximating the CPI-U, as reasonably determined by Lessor. If the US Department of Labor ceases to publish any index that approximates the CPI U, Lessor shall have the right to select such available replacement index as Lessor reasonably determines will most closely approximate the CPI-U.

c. Delay in Adjustment. If the Parties fail to timely recognize any adjustment of the rent, the rent shall adjust automatically notwithstanding such failure of the Parties, and any increased rent not paid as a result of such failure of the Parties shall be due and payable by Lessee within thirty (30) days following notice from Lessor.

7. Security Deposit. Lessee shall, at execution of the Lease by Lessor, deposit with Lessor a Security Deposit in the amount to be received from Lessee prior to occupancy to cover the full and faithful performance by Lessee of all of the terms and conditions of the Lease, including without limitation, payment of the Rent. The Security Deposit shall be in the amount of <amount> which is equal to two (2) months of Rent, with such deposit to be by cash or certified check. If Lessee defaults hereunder, Lessor may apply or retain all or any part of the Security Deposit for the payment of any sum due hereunder or any amount which Lessor may spend or become obligated to spend by reason of Lessee's default, or to compensate Lessor for any other loss or damage which Lessor may suffer by reason of Lessee's default. Upon the application or retention of any or all of the Security Deposit by Lessor, Lessee shall, within fifteen (15) days after written demand by Lessor, deposit cash with Lessor in an amount sufficient to restore the Security Deposit to its original amount. Lessor shall not be required to keep the Security Deposit separate from its general funds, and Lessee shall not be entitled to interest on the Security Deposit. If Lessee is in compliance with every provision of the Lease and owes no monies to Lessor at the expiration or termination of this Lease, the Security Deposit or any remaining balance thereof shall be returned to Lessee (or, at Lessor's option, to the last assignee of Lessee's interest hereunder) within thirty (30) days following expiration or termination of the Term.

8. Use of Leased Premises. Lessee may use Hangar A for <insert aeronautical operation>. Lessee may use the Surrounding Property solely for the <insert operation(s)>. Lessee may further use the Leased Premises for other activities necessarily and directly incidental to the foregoing permitted uses of the Leased Premises. Any other uses not directly incidental to the uses permitted hereunder are hereby prohibited without the express written consent of Lessor.

9. Improvements. Lessor shall have no obligation whatsoever to construct any improvements on the Leased Premises. Lessee, at its expense, may construct various improvements on the Leased Premises with Lessor's prior written consent and provided that all improvements constructed by Lessee shall:

a. Comply with the requirements of any governmental or quasi-governmental authority having jurisdiction, including without limitation, the City and Mohave County, Arizona ordinances and codes; comply with the requirements of Lessor's insurance carriers and with Lessor's safety and access requirements;

b. Be constructed in good workmanlike manner and conform to complete working drawings approved by Lessor;

c. Be of a quality that equals or exceeds the current standard for the Leased Premises and comply with all building, fire and safety codes; and

d. Be carried out only during hours approved by Lessor by licensed contractors selected by Lessee and approved by Lessor. Such contractors shall, at Lessor's request, deliver to Lessor proof of workers' compensation and general liability insurance coverage, including coverage for completed operations and contractual liability, in amounts, with companies and in forms reasonably satisfactory to Lessor, which shall remain in effect during the entire period in which the work will be carried out.

e. Lessee shall pay before delinquency all costs for work done or caused to be done by Lessee on the Leased Premises which could result in any lien or encumbrance on Lessor's interest in the Leased Premises. Any and all improvements placed upon the Leased Premises by Lessee shall be made at the sole expense of Lessee. All permanent improvements and/or alterations to the Leased Premises will hereby be prohibited without the express written consent of Lessor, which consent shall not be unreasonably withheld. All permanent improvements placed on the Leased Premises by Lessee shall become the property of Lessor upon the termination or expiration of this Lease.

10. Insurance and Indemnity. Lessee shall acquire and keep in effect adequate bodily injury liability and property damage insurance and all other insurance needed or required for the operations of Lessee as contemplated by this Lease, covering all of Lessee's employees and equipment, and shall indemnify and hold Lessor harmless from any causes of action arising from Lessee's operations hereunder. In all the above policies, Lessor and the City shall be named as additional insureds with the Lessee. For the Term of this Lease such policies shall not be for less than the amount of Two Million Dollars ($2,000,000.00) combined single limit for bodily injury and property damage. All such policies shall be placed with a reputable company approved by the Lessor. Copies of all such policies or certificates of insurance shall be delivered to the Lessor within thirty (30) days after the execution of this Lease and shall be held for the benefit of the parties as their respective interests may appear. The amount of said insurance shall not be deemed as a limitation of Lessee's agreement to save and hold the Lessor harmless, and if Lessor or Lessee becomes liable for an amount in excess of the insurance, Lessee will defend, indemnify, save and hold Lessor harmless for the whole thereof. Copies of policies or certificates of insurance of all such policies entered into after the commencement of this Lease shall be delivered to the Lessor within ten (10) days of the commencement of each such policy. In addition to the above-named policies, and under the same obligations to deliver copies of said policies or certificates of insurance to Lessor, Lessee shall obtain fire insurance and other property loss insurance on all improvements placed upon the Leased Premises, in an amount equal to the value of said improvements.

11. Utilities. Lessee shall pay promptly and prior to any delinquency any and all charges which may be incurred for water, gas, electrical power, telephone and any other utilities delivered to or used upon the Leased Premises during the Term, and any renewal or extension thereof, and shall hold Lessor harmless therefrom. Within thirty (30) days after execution of this Lease by the parties, Lessor shall either (a) install a separate electric meter to measure the power used for Gate #4 (the "Gate") to the Kingman Airport, which is currently connected to Lessee's electric meter, or (b) make other arrangements with Lessee for reimbursement to Lessee for the prorated power used in operating the Gate for parties other than Lessee.

12. Assignment and Sublease. Lessee shall not transfer, assign or sublet this Lease or any privileges granted hereunder without prior written approval of Lessor. Upon any assignment or sublease, this Lease is voidable at the option of the Lessor, which option may be exercised within a reasonable period subsequent to the Lessor obtaining actual knowledge of any assignment or sublease. In the event of a transfer, assignment or sublease of this Lease, Lessee shall pay to Lessor an amount equal to Lessor's attorneys' fees and costs arising out of such transfer, assignment or sublease; said attorneys' fees and costs for each request for approval of an assignment shall be no less than the sum of Five Hundred Dollars ($500.00) or greater than the sum of One Thousand Five Hundred Dollars ($1,500.00), provided that (a) such assignment or request for approval of an assignment does not result in any litigation or dispute, in which event, the foregoing limitations shall not apply; and, (b) the foregoing maximum attorney's fees shall increase by an amount of three percent (3%) per Adjustment Year in the same manner as rent increases are calculated pursuant to Paragraph 4.d.. Regardless of Lessor's consent, no subletting or assignment shall release Lessee of Lessee's obligation or alter the primary liability of Lessee to pay the rent and to perform all other obligations to be performed by Lessee hereunder. The acceptance of rent by Lessor from any other person shall not be deemed to be a waiver by Lessor of any provision hereof. Consent to one assignment or subletting shall not be deemed consent to any subsequent assignment or subletting.

13. Waste and Nuisance Prohibited. During the Term of this Lease, and any renewals or extensions thereof, Lessee shall comply with all applicable present and future federal, state and local laws, statutes, ordinances, orders, rules and regulations affecting the Leased Premises (collectively, "Laws"). Lessee shall not commit, or permit, any waste or nuisance on the Leased Premises.

14. Environmental Laws. Without limiting the foregoing, Lessee shall comply with all present and future federal, state and local Laws relating to environmental matters (collectively, "Environmental Law"), and shall defend, indemnify and hold harmless Lessor and Lessor's present from and against all claims, demands, liabilities, fines, penalties, losses, costs and expenses, including but not limited to costs of compliance, remedial costs, clean-up costs and reasonable attorneys' fees, arising from or related to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling, or the emission, discharge, release or threatened release into the environment, of any pollutant, contaminant or hazardous or toxic material, substance or matter (as those terms are defined under any Environmental Law) from, on or at the Leased Premises as a result of any act or omission on the part of Lessee. Lessee's indemnification obligations shall survive the expiration or termination of this Lease.

15. Care of Leased Premises. At Lessee's own expense, Lessee shall keep and maintain the Leased Premises and the immediate surrounding areas clean, neat, safe and orderly at all times. Furthermore, Lessee hereby assumes all responsibilities for maintenance, upkeep and repairs of all walls, roofs, plumbing, electrical systems, sewer/septic systems heating and cooling, appliances and/or fixtures in connection with Hangar A and paving and resurfacing with respect to the Surrounding Property during the Term of this Lease, or any extensions thereof. Lessee's obligations with respect to the Surrounding Areas shall include (i) repairing any damage to the paving caused by Lessee; and, (ii) completion of ordinary repairs arising due to the use of the Surrounding Area by Lessee; and, (iii) resurfacing as required in accordance with reasonable maintenance standards. Lessee acknowledges that Lessor shall have no repair or maintenance obligations whatsoever with respect to the Leased Premises. Upon the expiration of this Lease, or at the termination of this Lease for any reason, Lessee shall redeliver the Leased Premises in good order and condition, reasonable wear and tear excepted. Lessee hereby acknowledges that Lessee has examined the Leased Premises and accepts the same in its "AS IS" condition as of the commencement date of this Lease without reliance upon any warranty or representation of any kind by Lessor.

16. Inspection of Leased Premises. Lessor and its agents shall during normal business hours and normal business days, by appointment, have the right to inspect the Leased Premises during the Term of this Lease, except in cases of imminent threat to public safety or health or other emergencies, in which event no prior notice or appointment shall be required.

17. Waiver of Performance. The waiver by Lessor of, or the failure by Lessor to take action with respect to any breach of any term, covenant or condition herein contained shall not be deemed a waiver of such term, covenant or condition or subsequent breach of same, nor shall the acceptance of rent by Lessor be deemed a waiver of any preceding breach under this Lease.

18. Disputes - Attorneys' Fees. In the event that either party hereto shall institute and prevail in any action or suit for the enforcement of any of its rights hereunder, the prevailing party in said action or suit shall be awarded its reasonable attorneys' fees and costs arising therefrom.

19. Notices. Any notice desired or required to be served by either party upon the other or any notice provided for in this Lease shall be in writing and shall be deemed given upon hand-delivery or, if mailed, three (3) business days after being deposited in the United States mail, certified, return receipt requested, to the party to whom addressed, as set forth hereinbelow:

Lessor:

Lessee:

Any party may change the address to which notice shall be delivered or mailed by notice duly given.

20. Default and Remedies.

a. i) If at any time the rent or any money payments hereunder, or any part thereof, shall remain unpaid for a period of five (5) calendar days after the same become due; or (ii) if Lessee is adjudged bankrupt; or (iii) if Lessee abandons and/or discontinues operations at the Leased Premises; or (iv) if Lessee shall fail to fulfill or perform or is in default of any of the other agreements or provisions hereunder [except for the non-payment of rent, which shall be controlled by Subparagraph a.(i) hereinabove] and if Lessee does not cure and completely remedy any said default within ten (10) calendar days after Lessor gives Lessee written notice of such default, then Lessor may exercise the rights and remedies pursuant to Subparagraphs b. and c. herein.

b. Upon the happening of any of the events of default mentioned in Subparagraphs a.(i), (ii), (iii) and/or (iv) above, Lessee shall be deemed in default hereunder, and upon such default and at any time thereafter, Lessor may exercise any one or more of the following remedies concurrently or in succession:

i. Terminate Lessee's right to possession of the Leased Premises by legal process or otherwise, with or without terminating this Lease, and retake exclusive possession of the Leased Premises. If this Lease is terminated by Lessor, Lessor shall be entitled to recover from Lessee and Lessee shall pay on demand, as damages for Lessee's default, an amount equal to the difference between the then-present worth of the aggregate of the rent and any other charges to be paid by Lessee hereunder for the unexpired portion of the term of this Lease (assuming this Lease had not been so terminated), and the then-present worth of the then-aggregate fair and reasonable fair market rent of the Leased Premises for the same period. In the computation of present worth, a discount at the rate of eight percent (8%) per annum shall be employed.

ii. With or without terminating this Lease and without waiving or affecting Lessor's right to terminate this Lease, from time to time relet all or portions of the Leased Premises, using reasonable efforts to mitigate Lessor’s damages. In connection with any reletting, Lessor may relet for a period less than or extending beyond the term of this Lease and may make alterations or improvements to the Leased Premises without releasing Lessee of any liability.

iii. From time to time recover accrued and unpaid rent and damages arising from Lessee's breach of this Lease, regardless of whether this Lease has been terminated together with applicable late charges and interest at the rate of 12% per annum or the highest lawful rate, whichever is less.

iv. Terminate this Lease.

v. Enforce the statutory landlord's lien on Lessee's property.

vi. Recover all reasonable attorneys' fees and other expenses incurred by Lessor in connection with enforcing this Lease, recovering possession and collecting amounts owed.

vii. Perform any obligation of Lessee hereunder on Lessee's behalf and recover from Lessee, upon demand, the entire amount expended by Lessor plus 12% for handling, supervision and overhead.

viii. Exercise any other remedies available under applicable Laws.

c. Each and every term, covenant and condition contained in this Paragraph 19. shall be deemed separate and independent, and all remedies herein shall be deemed cumulative to any and all remedies Lessor might have under this Lease or in accordance with law.

21. Correction of Breach. Lessor may correct any breach or default by the Lessee of which the Lessee has received written notice by certified mail and failed or neglected to remedy within ten (10) calendar days, and Lessee agrees upon demand to reimburse the Lessor for all expenses incurred by the Lessor in correcting said breach or default.

22. Holdover. In the event Lessee holds over beyond the expiration of the Term herein or beyond the date of any such termination, such holding over shall be from month-to-month only, subject to all of the terms and conditions of this Lease, but shall not be a renewal hereof nor a waiver of any breach of conditions or covenant, and the rent to be paid therefor shall be at the rate then prevailing under the terms of this Lease.

23. Fire Prevention Regulations. Lessee shall at all times comply with all applicable laws and ordinances pertaining to fire regulations, and shall furnish and keep, at Lessee's sole expense, adequate fire extinguishers in sufficient numbers and in convenient and accessible places upon said Lease Premises, charged and ready for immediate use, as required by said fire regulations and applicable laws or ordinances.

24. Conduct of Business. Lessee agrees to conduct its operations using modern and practical techniques and equipment available in order to reduce to a minimum the emanation of fumes, odors and noises.

25. Security. Lessee shall be responsible for the security of the Leased Premises and all improvements and personal property located thereon. Lessor shall have no responsibility to Lessee or any of Lessee's customers, guests and/or invitees for security of any persons and/or property located on the Leased Premises.

26. Signs. Lessee shall reinstall, if found by Lessor or install a similar metal sign for Hangar A entitled the " Hangar A" and shall maintain said sign during the term of this Lease. Except for said sign, Lessee agrees not to erect or display, or permit to be erected or displayed, any exterior sign or advertising matter of any kind on the Leased Premises without first obtaining the written consent of Lessor.

27. Permits, Rules, and Regulations. Lessee agrees to obtain at Lessee's expense all necessary licenses and permits for the construction and operation of the Leased Premises. Further, with respect to the use of the Leased Premises and/or the public areas of the Kingman Airport, Lessee agrees to observe, obey and abide by all applicable Laws, field rules, policies, procedures and other regulations which are now or may hereafter be imposed or promulgated by Lessor, the Federal Aviation Administration, or any other government agency having jurisdiction over the subject matter, and which relate to the common and joint use of Airport facilities and the maintenance and conduct of all its operations.

28. Application Fee. Lessor and Lessee acknowledge that Lessee has paid to Lessor a non-refundable Lease Application Fee in the amount of One Thousand Dollars ($1,000.00). Said Lease Application Fee is in addition to any rent and/or expenses owed by Lessee under the terms of this Lease. The Lease Application Fee is intended by the Lessor and Lessee as reimbursement to Lessor for its reasonable costs and expenses incurred prior to the execution date of this Lease.

29. Continuity. This Lease and each and all of the covenants, obligations and conditions hereof shall inure to the benefit of and bind the Lessor and Lessee respectively, their heirs, personal representatives, executors, administrators, successors and assigns.

30. Paragraph Headings. The paragraph headings contained herein are for convenience and reference and are not intended to define or limit the scope of any provision of this Lease.

31. Applicable Law. This Lease shall be interpreted and enforced according to the laws of the State of Arizona. Any civil actions relating to this Lease shall be brought and maintained in the Superior Court of Mohave County, Arizona.

32. No Boycott of Israel. The Parties agree that they are not currently engaged in, and agree that for the duration of the Agreement they will not engage in, a boycott of Israel, as that term is defined in A.R.S. §35-393.

33. Uyghurs. Lessee certifies that it is not currently engaged in the use of forced labor of the ethnic Uyghurs in the People’s Republic of China, nor using any goods or services produced by same as defined in ARIZ. REV. STAT. §35-394.

34. F.A.A. Provisions. (See Exhibit C)

35. Eminent Domain.

a. If at any time during the term of this Lease the whole of the Leased Premises, or so much thereof as to render the balance unusable for the intended use of Lessee as said use is defined herein, shall be taken for any public or quasi-public use, under any statute, or by right of eminent domain or by conveyance in lieu thereof, then, in such event, when title shall have been taken thereunder of the Leased Premises by the condemning authority, the term hereby granted, and all right of the Lessee hereunder, shall immediately cease and terminate and the rent shall be apportioned and paid to the time of such termination. Lessor reserves to itself, and Lessee assigns to Lessor all rights to awards or damages accruing on account of any such taking or condemnation or by conveyance in lieu thereof or by reason of any act of any public or quasi-public authority for which awards or damages are payable, except as to such awards or damages as are set forth under Subparagraph B hereinbelow, provided that they are specifically defined by the condemning or awarding authority.

b. Lessee hereby assigns to Lessor any and all claims which Lessee might otherwise prosecute in its own name and on its behalf, under applicable laws or regulations at the time thereof, for loss or damage sustained by Lessee for the value of leasehold improvements installed by Lessee at Lessee's cost, Lessee's fixtures and equipment, and any removal or relocation expenses resulting from such taking.

c. Lessee agrees to execute such instruments of assignment as may be required by Lessor, to join with Lessor in any petition for the recovery of awards or damages, if so requested by Lessor, and to turn over to Lessor any such awards or damages that may be recovered in any such proceeding.

36. Restrictive Covenants. The parties acknowledge that certain restrictive covenants limiting the use of the Leased Premises have been placed upon the Leased Premises by Lessor, Mohave County and/or the City. Said restrictive covenants were filed in the Mohave County Recorder's Office on July 22, 1980, in Book 646, Pages 767-781; the First Amended Restrictive Covenants were recorded on November 28, 1989, in Book 1632, Pages 443-462; and the Second Amended Restrictive Covenants were recorded on November 15, 1990, in Book 1819, beginning at Page 961. Lessee hereby acknowledges the legitimacy of said restrictive covenants and agrees to adhere to all terms thereof.

37. Lessee Authority to Execute. The person executing this Lease on behalf of or as representative for Lessee warrants that he or she is duly authorized to execute and deliver this Lease on behalf of Lessee and that this Lease is binding upon Lessee in accordance with its terms.

(SIGNATURES ON NEXT PAGE)

IN WITNESS WHEREOF, the parties executed this Lease as of the date and year first written above.

LESSOR: LESSEE:

City of Kingman, a Municipal Corporation ____________________________________

By: _____________________________ By: ______________________________

Name: _____________________________ Name: ______________________________

Title: _____________________________ Title: _____________________________

County of ________________ )

The foregoing instrument was acknowledged before me this ___ day of _______________, 20___, by ______________________________, the ________________________ of the City of Kingman, on behalf of the City of Kingman.

___________________________________________ (Seal and Expiration Date) Notary Public

County of ________________ )

The foregoing instrument was acknowledged before me this ___ day of _______________, 20___, by ______________________________, the ________________________ of ______________________________.

___________________________________________ (Seal and Expiration Date) Notary Public

Exhibit A Legal Description of Premises

Exhibit B Depiction of Premises

Exhibit B-1 Approximate Premises Location Map

9900 Flightline Drive Hangar A

Exhibit C FAA Requirements

A. Lessee shall, in the event facilities are constructed, maintained or otherwise operated on the Property 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 (“C.F.R.”), 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.

B. Lessee and its sublessees, if any, agree to comply with pertinent statutes, executive orders and such rules as are promulgated to ensure that no person will, on the grounds of race, creed, color, national origin, sex, age, or disability be excluded from participating in any activity conducted with or benefiting from federal assistance. This provision obligates the Lessee or its transferee for the period during which federal assistance is extended to the airport through the airport improvement program. In cases where federal assistance provides, or is in the form of personal property; real property or interest therein; structures or improvements thereon, this provision obligates the party or any transferee for the longer of the following periods:

a. The period during which the property is used by the airport sponsor or any transferee for a purpose for which federal assistance is extended, or for another purpose involving the provision of similar services or benefits; or

b. The period during which the airport sponsor or any transferee retains ownership or possession of the property.

C. Lessee 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 otherwise be subjected to discrimination in the use of the Property; (2) in the construction of any improvements on, over or under the Property 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) Lessee shall use the Property in compliance with all other requirements imposed by or pursuant to Title 49, C.F.R., D.O.T., Subtitle A, Office of the Secretary, Part 21, Non-discrimination in Federally-Assisted Programs of the Department of Transportation-Effectuation of Title VI of the Civil Rights Act of 1964, and any amendments thereto.

D. During the performance of this contract, Lessee, for itself, its assignees, and successors in interest agrees to comply with the following non-discrimination statutes and authorities; including but not limited to:

a. Title VI of the Civil Rights Act of 1964 (42 U.S.C. § 2000d et seq., 78 stat. 252), (prohibits discrimination on the basis of race, color, national origin);

b. 49 CFR part 21 (Non-discrimination In Federally-Assisted Programs of The Department of Transportation—Effectuation of Title VI of The Civil Rights Act of 1964);

c. The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, (42 U.S.C. § 4601), (prohibits unfair treatment of persons displaced or whose property has been acquired because of Federal or Federal-aid programs and projects);

d. Section 504 of the Rehabilitation Act of 1973, (29 U.S.C. § 794 et seq.), as amended, (prohibits discrimination on the basis of disability); and 49 CFR part 27;

e. The Age Discrimination Act of 1975, as amended, (42 U.S.C. § 6101 et seq.), (prohibits discrimination on the basis of age);

f. Airport and Airway Improvement Act of 1982, (49 USC § 471, Section 47123), as amended, (prohibits discrimination based on race, creed, color, national origin, or sex);

g. The Civil Rights Restoration Act of 1987, (PL 100-209), (Broadened the scope, coverage and applicability of Title VI of the Civil Rights Act of 1964, The Age Discrimination Act of 1975 and Section 504 of the Rehabilitation Act of 1973, by expanding the definition of the terms “programs or activities” to include all of the programs or activities of the federal-aid recipients, sub-recipients and contractors, whether such programs or activities are federally funded or not);

h. Titles II and III of the Americans with Disabilities Act of 1990, which prohibit discrimination on the basis of disability in the operation of public entities, public and private transportation systems, places of public accommodation, and certain testing entities (42 U.S.C. §§ 12131 – 12189) as implemented by Department of Transportation regulations at 49 CFR parts 37 and 38;

i. The Federal Aviation Administration’s Non-discrimination statute (49 U.S.C. § 47123) (prohibits discrimination on the basis of race, color, national origin, and sex);

j. Executive Order 13166, Improving Access to Services for Persons with Limited English Proficiency, and resulting agency guidance, national origin discrimination includes discrimination because of limited English proficiency (LEP). To ensure compliance with Title VI, you must take reasonable steps to ensure that LEP persons have meaningful access to your programs (70 Fed. Reg. at 74087 to 74100);

k. Title IX of the Education Amendments of 1972, as amended, which prohibits you from discriminating because of sex in education programs or activities (20 U.S.C. 1681 et seq).

E. In the event of breach of any of the above non-discrimination covenants, the City shall have the right to terminate this Lease and to reenter and repossess the Property 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 C.F.R. Part 21 are followed and completed, including expiration of appeal rights.

F. The Lessee assures that it will comply with pertinent statutes, Executive orders and such rules as are promulgated to assure that no person shall, on the grounds of race, creed, color, national origin, sex, age or handicap be excluded from participating in any activity conducted with or benefiting from Federal assistance. This provision obligates the Lessee or its transferee for the period during which Federal assistance is extended to any Airport program, except where Federal assistance is to provide, or is in the form of personal property or real property or interest therein or structures or improvements thereon. In these cases, the provision obligates the Lessee or any transferee for the longer of the following periods: (i) the period during which the Property is used by the Lessee or any transferee for a purpose for which Federal assistance is extended, or for another purpose involving the provision of similar services or benefits; or (ii) the period during which the Lessee or any transferee retains possession of the Property. In the case of contractors, this provision binds the contractors from the bid solicitation period through the completion of the contract. This provision is in addition to that required of Title VI of the Civil Rights Act of 1964.

G. Lessee 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 Lessee may be allowed to make reasonable and nondiscriminatory discounts, rebates or other similar types of price reductions to volume purchasers.

H. Non-compliance with Subsection G shall constitute a material breach thereof, and in the event of such non-compliance, the City shall have the right to terminate this Lease without liability therefore, or, at the election of the City or the United States, either shall have the right to judicially enforce Subsection G.

I. Lessee shall insert the above provisions in any lease by which Lessee grants a right or privilege to any person, firm or corporation to render accommodations and/or services to the public on the Property.

J. Lessee shall undertake an affirmative action program as required by 14 C.F.R. Part 152, Subpart E, to ensure 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 C.F.R. 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. Lessee shall require its covered sub-organizations to provide assurances to Lessee that they similarly will undertake affirmative action programs and that they will require assurances from their sub-organizations, as required by 14 C.F.R. 152, Subpart E, to the same effect.

K. The City reserves the right to further develop or improve the Airport as it sees fit, regardless of the desires or view of Lessee, and Lessee shall not interfere with, or hinder the Lessor in its plans, policies or actions for Airport development. This provision in no way precludes Lessee’s right to public voice and input during meetings or solicitations calling for such comments or input.

L. The City reserves the right, but shall not be obligated to Lessee, to maintain and keep in repair the landing area of the Airport and all publicly-owned facilities of the Airport, together with the right to direct and control all activities of Lessee in this regard. This Lease shall be subordinate to the provisions and requirements of any existing or future agreement between the City and the United States relative to the development, operation or maintenance of the Airport.

M. There is hereby reserved to the City, 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 Property. 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 or flight through said airspace or landing at, taking off from or operation on the Airport.

N. Lessee 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 Property, or in the event of any planned modification or alteration of any present or future building or structure situated on the Property.

O. Lessee shall not erect nor permit the erection of any structure or object, nor permit the growth of any tree on the Property 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, the City reserves the right to enter upon the Property and to remove the offending structure or object and cut the offending tree, all of which shall be at the expense of Lessee.

P. Lessee shall not make use of the Property 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, the City reserves the right to enter upon the Property and cause the abatement of such interference at the expense of Lessee.

Q. 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).

R. This Lease is subordinate to Lessor’s obligations to the federal government under existing and future agreements for federal aid for the development and maintenance of the Airport. Lessee shall do nothing in its performance of its obligations under this Lease that would cause any noncompliance with such obligations of the Lessor. Lessor and Lessee agree that, to the extent any provisions of this Lease are in noncompliance with such obligations, Lessor and Lessee shall take any necessary corrective action in order to bring the Lease into compliance with such obligations.

S. This Lease incorporates by reference the requirements of 29 CFR Part 1910 with the same force and effect as if given in full text. Lessee must provide a work environment that is free from recognized hazards that may cause death or serious physical harm to the employee. The Lessee retains full responsibility to monitor its compliance and their subcontractor’s compliance with the applicable requirements of the Occupational Safety and Health Act of 1970 (20 CFR Part 1910). Lessee must address any claims or disputes that pertain to a referenced requirement directly with the U.S. Department of Labor – Occupational Safety and Health Administration.

LEGAL DESCRIPTION FOR HANGAR "A" LEASE PARCEL

That part of the Northwest¼ (one-quarter) of Section 25, Township 22 North, Range 16 West, Gila and Salt River Meridian, Mohave County, Arizona, described as:

Commencing at the west ¼ (one-quarter) comer of said section 25, a 3" brass disk in concrete stamped RLS 13023;

thence N. 00°09'04" E., along the west section line of said section a distance of 881.26'feet;

thence S. 89°50'56" E., 84.00' feet to the southwest comer of parcel, which is also the Point of Beginning;

thence continuing S. 89°50'56" E., a distance of 316.04' feet to the most southeast comer of parcel;

thence N. 00°09'04" E., a distance of 476.75' feet to the northeast comer of said parcel; thence N. 89°50'56" W., a distance of 316.04' feet to the northwest comer of said parcel;

thence S. 00°09'04" W., a distance of 476.75' feet to the southwest comer of said parcel, which is also the Point of Beginning.

This lease parcel known as Hangar A, contains 3.46 acres.

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