HomeMy WebLinkAboutResolution 2001-092 first amended FBO lease MARANA RESOLUTION NO. 2001-92
A RESOLUTION OF THE MAYOR AND COUNCIL OF THE TOWN OF MARANA, ARIZONA,
APPROVING THE FIRST AMENDED FBO LEASE, INCLUDING VARIOUS AMENDMENTS
TO THE FBO LEASE, AND CLARIFICATION AND EXTENSION OF THE LEASED
PREMISES.
WHEREAS, the Town Council did approve Resolution No. 99-65, authorizing the execution
of an Intergovernmental Agreement for the purpose of transferring the Avra Valley Airport from
Pima County to the Town of Marana; and
WHEREAS, the Town of Marana did succeed Pima County to the Lease Agreement, contract
number 04-04-A-102910-1181, dated November 2, 1981, entered into by and between Pima County
and APEC, Inc., wherein Pima Aviation, Inc., did succeed APEC, Inc.; and
WHEREAS, the Town Council did approve and execute a pre-annexation agreement by and
between the Town of Marana and Pima Aviation, Inc., wherein, in part, the Town agreed to amend
and extend the current FBO Lease; and
WHEREAS, the Mayor and Council find that the current lease contains errors in the
boundaries description, resulting in a possible condition of"non-compliance" with Federal Aviation
Administration regulations; and
WHEREAS, the Mayor and Council find that some of the language within the current lease
needs to be updated and not in conformity with industry standards; and
WHEREAS, the Mayor and Council have determined that it is in the best interests of the
Town, the Marana Northwest Regional Airport and the airport's patrons to continue a business
relationship with the current tenant as FBO operator; and
WHEREAS, Arizona Revised Statutes Section 28-8425 provides the mechanism for the
Town to extend the existing lease for a per/od of not more than forty years; and
WHEREAS, The Mayor and Council find that the appropriate requirements of A.R.S.
Section 28-8425 have been met; and
WHEREAS, the Town staff has conducted an analysis of the current market for similar
airports and has negotiated the provisions contained within the amended lease in good faith; and
Marana, Arizona Resolution No, 2001-92 Page 1 of 2
WHEREAS, on August 7, 2001, the Town Council duly noticed and held a public hearing
in accordance with State law, and has heard fi.om the representative(s) of the Lessee, Town staff, and
members of the public.
NOW, THEREFORE, BE IT RESOLVED by the Mayor and Council of the Town of
Marana, Arizona, that the Amended FBO Lease Agreement is hereby approved and the Mayor is
authorized and directed to execute said Agreement.
BE IT FURTHER RESOLVED that the Town's officers and staff are authorized to take all
steps necessary and proper to give effect to the Agreement.
BE IT FURTHER RESOLVED that the Town's officers and staff are authorized to enter into
a contract for the survey of the Leasehold area and to incorporate this survey into the Agreement.
PASSED AND ADOPTED by the Mayor and Council of the Town of Marana, Arizona, this
4th day °f September' 2001'
Mayor Bobby Sutton, Jr.
ATTEST:
...~-'""'~aniel J. Hochuli
As Town Attorney and not personally
Marana, Arizona Resolution No. 2001-92 Page 2 of 2
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F. ANN RODRIG~ RECORDER
RECORDED BY: i~ ~
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DEPUTY RECORDER
7864 ROOC
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Of '~T: 11705
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NO. OF PAGES: 45
SEQUENCE: 20012501212
12/28/2001
ALEASE 17:01
SMARA
TOWN OF MARANA
ATTN: TOWN CLERK
13251 N LON ADAMS RD
MARANA AZ 85653
MAIL
AMOUNT PAID $ 28.00
FIRST AMENDED FBO LEASE AGREEMENT
THIS FIRST AMENDED LEASE AGREEMENT (the "Lease" or "Agreement") is
made and entered into this 4th day of September, 2001, by and between the TOWN OF MARANA,
a municipal corporation ("LESSOR") and PIMA AVIATION, INC., an Arizona corporation
("LESSEE"). LESSOR and LESSEE may be referred to collectively in this Lease as the
"parties. "
RECITALS
1. In connection with LESSOR acquiring ownership of the airport known as MARANA
NORTHWEST REGIONAL AIRPORT (the "Airport"), LESSOR succeeded to the landlord's
interest under that certain "Avra Valley Airport Sublease" dated November 2, 1981, by and
between PIMA COUNTY, a political subdivision of the State of Arizona, and APEC, INC., d/b/a
A VRA V ALLEY AVIATION, covering approximately 26 acres (the "FBO Lease"), the
sublessee's interest in which was assigned to PIMA A VIA TION, INC., an Arizona corporation,
by "Assignment of Sublease" dated July 31, 1989 and recorded in Docket 8590, Page 2159,
Office of the Pima County Recorder.
2. The parties have agreed that amendment of the FBO Lease is necessary in order to
adopt the improved format of more recent leases of Airport property, and to resolve certain
discrepancies therein, including adjustment of the boundaries of the leased premises.
3. The parties therefore agree that effective as of the date set forth above, the FBO Lease
shall be amended in its entirety to read as follows.
AGREEMENT
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In consideration of the mutual agreement of the parties to the terms and conditions set forth
below, LESSOR does hereby lease to LESSEE a portion of Airport, as follows:
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DESCRIPTION OF PREMISES.
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1.1 Premises. LESSOR hereby leases to LESSEE a portion of Airport, which
portion consists of approximately 34 acres, as set forth on the map attached hereto as
Exhibit "A " (the "Premises"). The parties acknowledge that the Premises differ from
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those set forth in the FBO Lease, because it is necessary to adjust the boundaries of the
Premises to correct the legal description of the boundaries which were previously in
error, and to include some additional areas which are appropriate for the uses described
in this Agreement. The parties agree that LESSOR shall, at its sole expense, obtain a
survey and legal description of the Premises consistent with the map attached as Exhibit
"A." Upon completion of the survey, the legal description resulting from that survey
shall be approved and signed by the parties hereto and attached hereto as Exhibit "B,"
and thereafter this Agreement shall be recorded in the offices of the Pima County
Recorder at the expense of LESSOR. The original boundary of the Premises was 26.4
acres. To offset the difference between the original 26.4 acreage and the present
acreage, by separate agreement the parties shall reduce the number of acres included
within the Master Development Lease Agreement, dated June 15, 1999 by and between
PIMA COUNTY, a political subdivision of the State of Arizona, and Pima Aviation,
Inc. (the "73-Acre Lease") and assigned to the Lessor. The parties have mutually
determined the location of the acres to be removed from the 73-Acre Lease. LESSEE
shall have, subject to the terms and provisions of this Lease and any subleases, the use,
occupancy and control of the Premises with all improvements constructed thereon.
1.2 LESSOR's Right to Remove Land from Premises. LESSEE acknowledges that
the Airport is in its first phase of development under the sponsorship of the Town of
Marana, and the Airport Master Plan provides for significant and ongoing expansion
and improvement of the Airport. As such, LESSEE acknowledges that the restriction
or loss of leased property due to Airport development requirements is likely. Such
restriction or loss of leased property may come about as a result of LESSOR's need to
use such property for airport improvement or expansion, or may come about as a result
of governmental regulation, including but not limited to Federal Aviation
Administration (FAA) regulations regarding setbacks, clear zones, and restricted
visibility zones at the intersection of runways (hereinafter referred to as a
"Restriction"). By entering into this Lease, LESSEE acknowledges that it has
reviewed the Airport Master Plan and other necessary documentation, and has made an
independent determination regarding this risk.
1.3 Removal of Land from Premises. In the event that it becomes necessary for
LESSOR to delete any property from the Premises as provided above, LESSEE agrees
to cooperate in such transaction as set forth hereinafter.
1.3.1 During the Term, LESSOR may require that certain portions of the
Premises must be deleted from the Premises, but such may occur only for the
purpose of being utilized for additional aeronautical and aviation purposes.
Additionally, during the Term, LESSOR may require, as the result of a
Restriction, that LESSEE's use of certain portions of the Premises be restricted.
In connection with any determination by LESSOR that portions of the Premises
be deleted from the Premises or that the use thereof be restricted as determined
by the LESSOR, the following shall apply.
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a. In the event that LESSOR determines that a deletion of a portion of
the Premises shall take place whether or not indicated in the current
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Airport Master Plan, Airport Layout Plan or any subsequent
amendment thereto, the following shall apply: 1) LESSOR shall use
its best efforts to provide, in substitution for the parcel deleted,
another parcel of equivalent size and fair rental value located within
the Airport. If such substituted parcel is accepted by LESSEE, the
Premises shall be redefined to include the substituted parcel in lieu
ofthe deleted parcel and the "Fixed Rent" (defined below) shall be
adjusted to reflect any difference in the size of the Premises. An
amendment to this Agreement, acknowledged by a duly appointed
representative of both parties, shall be recorded with the Pima
County Recorder. 2) If no substitute parcel is mutually agreed
upon, LESSOR shall be required to reduce the Fixed Rent (as
hereinafter defined) in a proportionate amount. An amendment to
this Agreement, acknowledged by a duly appointed representative of
both parties, shall be recorded with the Pima County Recorder.
b. If LESSOR determines that a Restriction in Use of a certain portion
of the Premises will take place, whether or not indicated in the
current Airport Master Plan, Airport Layout Plan, or any
subsequent amendment thereto, LESSOR and LESSEE shall
negotiate to determine the extent of Restricted Use and thereafter the
following shall apply: 1) In the event it is determined that the
restriction results in LESSEE being unable to use that restricted
portion for any purpose, then a deletion shall be implemented, in
which case paragraph "a" above shall govern. 2) If it is determined
that any use of the Restricted portion of the Premises exists, then
there shall be no adjustment in the "Fixed Rent" or any other rent
or compensation to be paid by LESSEE for such portion of the
Premises and the Restriction shall be adhered to as soon as possible
upon implementation.
1.3.2 LESSEE hereby agrees and acknowledges that a portion of the Premises
currently contains structures used for storage of aircraft, and that said structures
may be in conflict with the Building Restriction Line as determined by the FAA
upon implementation of the improvements to Runway 03/21. It is further agreed
that these structures, which are identified and labeled in Exhibit "C," may be
required to be removed from their present location upon becoming an obstruction
as a result of said improvements as determined by LESSOR. If it is determined by
LESSOR that any of the aforementioned structures or any other structure contained
within the Premises becomes an obstruction, then LESSOR and LESSEE and/or
Holder of Title ("Owner") shall negotiate one of the following options: 1) The
cost and compensation payable to LESSEE and/or Owner by LESSOR as well as
any other applicable terms for the removal and relocation of said structures whereas
LESSEE and/or Owner shall retain title to said structure or structures in accordance
with the Terms of the original agreement currently in force. Upon agreement
between LESSOR and LESSEE and/or Owner, LESSEE and/or Owner shall be
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given sixty (60) days within which to commence removal, or 2) the establishment
of a Fair Market Value, for the purpose of purchasing by LESSOR, said structure
or structures. Upon compensation, the title and ownership shall be transferred to
LESSOR. LESSOR shall then be responsible for the removal of the structure or
structures. The costs, compensation and terms of the exercising and agreement to
either of the aforementioned options shall be approved by and be subjected to the
funding limitations of the FAA and/or ADOT. The Town of Marana shall have and
maintain as it's right, the ability to fund projects beyond that of the limitations of
the FAA and ADOT. If LESSOR and LESSEE and/or Owner cannot reach an
agreement within sixty (60) days from commencing negotiations, then all Parties
hereto agree to submit this issue to arbitration in accordance with the terms of this
agreement as specified in Section 19.14 of the General Provisions. LESSOR and
LESSEE further agree that the land currently associated with the aforementioned
structures shall remain part of the Premises and the use thereof shall be subject to
the terms and restrictions of this Lease, including any restrictions established by the
FAA or other governmental regulation.
1.3.3 Nothing in this Lease shall be interpreted to remove the LESSOR'S legal
right of eminent domain.
2 TERM.
2.1 Term. The Term of this Lease shall end on November 29, 2046. As used
herein the term "Lease Year" means a one year period beginning on the first day of
any December during the Term and ends on the day preceding the next following
December 1.
2.1.1. LESSOR and LESSEE agree that this and all subsequent amendments
shall take effect and govern this Agreement on the preceding calendar day
following the execution of any and all amendments hereto. The date of
expiration, as defined in paragraph 2.1 above, shall remain in effect unless
agreed to in writing and an amendment to this agreement is attached hereto.
3 COMPENSATION.
3.1 Fixed Rent. Notwithstanding any additional rent, fees, taxes, or other monies
paid to LESSOR pursuant to this Lease or otherwise and except as otherwise set forth
below, LESSEE agrees to pay to LESSOR an amount of rent equal to Eight Hundred
Dollars ($800.00) per acre of the Premises for each Lease Year (the "Fixed Rent"),
plus rental tax. The Fixed Rent shall be payable quarterly. The Fixed Rent for partial
acres shall be prorated. Fixed Rent for land which is deleted from the Premises or
taken by eminent domain shall cease as of the first day of the calendar month following
the month in which such land ceases to be a part of the Premises. Beginning on the
second anniversary of the date of this First Amendment and on every biannual
anniversary of the date of this First Amendment thereafter, the Fixed Rent for the next
two (2) Lease Years shall be adjusted by the cumulative amount of any percentage
change in the Consumer Price Index for all Urban Consumers (CPI-U) for the previous
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two (2) years, as published by the U. S. Department of Labor of Bureau of Statistics.
In the event publication of the CPI-U is terminated, then such periodic adjustment shall
be made by application of the index published by the U. S. Department of Labor which
most closely resembles the CPI-U. The parties hereto agree and acknowledge that the
Fixed Rent for the Premises shall be adjusted every two years in accordance herewith
throughout the entire Term of this Lease. In no event shall the Fixed Rent be decreased
at any time during the Term hereof as the result of the CPI-U, to an amount less than
that of $800 per acre. For purposes of this Agreement, the term "Rent" shall refer to
any and all amounts due to LESSOR hereunder.
3.2 Percentage Rent. In addition to the Fixed Rent set forth above, and except as
otherwise set forth below, LESSEE agrees to pay LESSOR the following sums,
hereinafter referred to as "Percent Rent."
3.2.1 Gross Rents on Subleases. As part of Percentage Rent, LESSEE shall pay
to LESSOR an amount equal to five percent (5%) of all gross rents, excluding
rental taxes, which LESSEE receives in connection with any and all current and/or
future subleases to third parties for any portion of the Premises, regardless of
whether those subleases are for hangar or non-hangar space. The parties hereto
agree and acknowledge that Tenant shall only enter into written, and not oral,
subleases for portions of the Premises.
3.2.2 Additional Hangar. Tie Down and Shade Port Income. In regard to any and
all current and/or future hangars, tie downs and shade ports on the Premises, the
following definitions shall apply:
a. "Use Fee" shall mean any fee or compensation received by
LESSEE from a third party in exchange for the use of hangar space,
tie downs and/or shade ports, provided that such use is not pursuant
to a written sublease entered between LESSEE and a third party for
such hangar space, tie downs and/or shade ports.
b.
"Standard Rental Rate" shall mean those rental rates as published
by LESSEE and provided to LESSOR on at least a quarterly basis
for all of the following: (i) commonly recognized sizes and/or names
of the individual hangar units (Le. T-30, T-40, T-50, etc.) within
the Premises; (ii) commonly recognized locations of aircraft tie
down areas within the Premises; (iii) commonly recognized
locations of shade port areas within the Premises; and (iv) facilities
that do not adhere to the type, dimension and/or common name or
location as previously set forth, in which case the rental rates
published by LESSEE shall be based on the square footage of said
facility, including all build-outs, storage rooms, parts and equipment
rooms and other appurtenances, multiplied by the average rental rate
published by LESSEE as required herein for the same class of
hangar or other facility.
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3.2.3 Percentage Rent on Use Fees or Standard Rental Rates. LESSEE shall pay
to LESSOR as part of the Percentage Rent an amount equal to five percent (5 %) of
any and all Use Fees which LESSEE receives from third parties for the use of
hangar space, tie down space and/or shade ports, provided however, that if any
Use Fee received by LESSEE is less than the Standard Rental Rate for that same
facility in connection with which the Use Fee is paid, LESSEE shall instead pay to
LESSOR an amount equal to five percent (5 %) of the Standard Rental Rate for said
facility. Additionally, LESSEE shall pay to LESSOR as part of the Percentage Rent
an amount equal to five percent (5 %) of any and all Standard Rental Rates for
hangars, tie downs, shade ports, and/or spaces within the same which are Occupied
by LESSEE or which are Occupied by a third party but for which no compensation
is paid to LESSEE, however, those spaces occupied by the Town of Marana are
exempted from the provisions of this paragraph.
3.2.4 Miscellaneous Terms Regarding Percentage Rent. As used herein, the
definition of "aircraft hangar" or "hangar" shall be any enclosed structure existing
at the Premises at any time during the Term of this Lease constructed for the
purpose of the storage, maintenance and repair, painting, construction and/or
refurbishing of aircraft. As used herein, the definition of "tie down" or "tie down
area" shall be any open, uncovered area within the Premises at any time during the
Term of this Lease which is typically used for parking and securing aircraft to the
ground. As used herein, the definition of "shade port" or "shade port area" shall
be any covered but open area within the Premises at any time during the Term of
this Lease which is typically used for parking aircraft.
a. With respect to this article and all others contained herein, unless so
stated otherwise, "Occupancy" or "Occupied" shall mean any
physical possession by LESSEE or a third party, contractual
obligation or other arrangement for the control, use, tenancy or other
habitation by LESSEE or any other entity or individual of any aircraft
hangar or part thereof. In no event, however, shall LESSEE be
required to pay Percent Rent for any aircraft hangar, tie down or
shade port that is not Occupied.
b.
If a third party uses any space, including but not limited to office
space, within the Premises other than hangar space, tie downs
and/or shade ports, such use by a third party shall be pursuant to a
written sublease.
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3.2.5. Reporting. LESSEE shall provide to LESSOR, by the fifteenth calendar
day following the end of each calendar quarter or as soon as practicable upon
written request, a report containing the following information in the manner
prescribed herein:
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~ A listing of all then existing hangars, tie down areas and shade ports,
enumerated or named in such detail as to determine location.
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~ A schedule of Standard Rental Rates, corresponding to the hangar units, tie
down areas, and shade ports, as defined above, currently implemented or as
may be hereafter amended.
~ The status of Occupancy as it pertains to the individual hangar units, tie
downs areas and shade ports, as defined above, as well as a list of all long
term users of any tie down areas within the Premises.
~ A list of all then existing subleases between LESSEE and a third party for
any and all portions of the Premises, the rent due thereunder and the
frequency with which such rent is to be paid.
~ A summary of actual revenues received from the renting, providing or
otherwise allowing use and Occupancy of all hangars, tie downs areas,
shade ports and any other space within the Premises. In the case where no
actual income is generated, the Standard Rental Rate of an Occupied
facility, tie down area, shade port or hangar shall be reported.
~ All reports shall be in both printed and electronic form. The electronic data
shall be of a spreadsheet base capable of being opened, read or translated,
and manipulated by Microsoft Excel and submitted with payment.
3.2.6. Payment. In accordance with all of section 3.2 above, including any and all
subsections thereto, and as prescribed therein, LESSEE shall compute and
report the Percent Rent each calendar quarter. Percent Rent for a quarter
shall be due and payable no later than thirty (30) days following the end of
said quarter. Payment shall be remitted to the person and address as
designated by LESSOR.
3.3. Fuel Flowage Fee. During the Term, LESSEE shall pay to LESSOR, in
addition to Fixed Rent, sales taxes and other taxes, Percentage Rent and all other fees
and amounts due hereunder, a fee (the "Fuel Flowage Fee") for every gallon of all
aviation fuel and other fuel delivered upon the Premises, whether delivered directly into
a centralized fuel farm, an airplane or other vehicle, delivered into a fuel pumping
truck, or delivered into any other container (but excluding any fuel which has already
been subject to payment of a Fuel Flowage Fee when it was previously delivered at the
Airport). This Fuel Flowage Fee shall apply to fuel delivered to or upon the Premises
regardless of whether such fuel is delivered to LESSEE or a subtenant of LESSEE.
LESSEE may assign the obligation to pay the Fuel Flowage Fee to subtenants, and to
the extent such fees are actually paid by the subtenant, LESSEE's obligation for such
fees is satisfied. Except as otherwise set forth herein the Fuel Flowage Fee shall be in
the amount of six cents ($0.06) per gallon. On a quarterly basis, no later than thirty
(30) days following the end of such quarter, LESSEE shall report to LESSOR the
number of gallons of fuel delivered upon the Premises, substantiated by copies of the
manifests, during the previous quarter and shall remit the Fuel Flowage Fee based
thereon. LESSEE shall submit a statement of fuel flowage for the preceding calendar
year not later than March 1 of each year. The statement shall show in reasonable detail
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the actual amount of each type of Fuel for which delivery was taken and the amount
paid to LESSOR for Fuel Flowage Fees during the same period. Such annual statement
shall be accompanied by the signed opinion of the person certifying such statement
specifically stating that he has examined the report for such year, that he has examined
LESSEE's books and records as he considered necessary under the circumstances, and
that such statement accurately presents the total fuel deliveries of such year. Each
sublease entered by LESSEE shall include a section imposing the same payment and
reporting obligations upon the sublessee with regard to fuel(s) for which sublessee takes
delivery at the Airport. The parties hereto agree and acknowledge that LESSEE may
not preclude any subtenant of any portion of the Premises from having fuel delivered
directly to that subtenant. In the event a subtenant takes delivery of fuel from a source
other than Lessee, Lessee shall have no obligation to pay the Fuel Flowage Fee for such
fuel deliveries unless such deliveries are prohibited by Lessor's minimum standards for
the Airport. In the event a subtenant takes delivery of fuel from a source other than
Lessee, Lessee shall have no obligation to pay the Fuel Flowage Fee for such fuel
deliveries. In the event that LESSEE constructs or otherwise has built, a large fuel
farm consisting of one hundred thousand gallons (100,000 gal) or more, and solely
incurs the cost of filling said fuel farm, then the associated fuel flowage fees shall be
abated for the initial filling of the fuel tanks associated with the fuel farm. Any
subsequent replenishing, filling or any other associated deliveries shall be subject to the
aforementioned fee and conditions. Nothing herein shall prohibit LESSOR from
constructing a fuel farm at the Airport.
3.4 Amendment of Compensation.
3.4.1 Adopted Rates and Charges. The LESSOR and LESSEE hereby agree
and acknowledge that the Council for the Town of Marana (the "Council") will
periodically during the term, as limited in Section 3.4.3. below, adopt new
schedules and policies of rate and charges relating to the Airport and the
Premises (the "Adopted Rates and Charges"). The LESSOR and LESSEE
hereby additionally agree that the Adopted Rates and Charges may include
categories of fees which may not be identified herein. An analysis of the then
current Rates and Charges shall be conducted by a consultant or firm having
demonstrated a minimum of five (5) years experience in performing said
analysis. The analysis shall take in to account the Rates and Charges from other
airport of comparable size, capacity and service designation as well as a land
appraisal. The date of adoption by the Council of the Adopted Rates and
Charges shall be the date of the Council meeting during which the Adopted
Rates and Charges are approved by the Council. LESSEE and LESSOR hereby
agree that the amount of Fixed Rent, Percentage Rent, and Fuel Flowage Fee to
be paid by LESSEE to LESSOR hereunder may be adjusted in accordance with
the Adopted Rates and Charges. Until such time as the first Adopted Rates and
Charges are adopted, the terms of Sections 3.1, 3.2 and 3.3 shall govern the
amount of Fixed Rent, Percentage Rent, and Fuel Flowage Fee to be paid by
LESSEE to LESSOR hereunder. If LESSEE provides written notice to
LESSOR that LESSEE objects to the Adopted Rates and Charges and elects to
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submit such objection to the provisions of Paragraph 19.14 herein, LESSEE
shall continue to pay LESSOR such Fixed Rent, Percentage Rent and Fuel
Flowage Fee as determined in accordance with Sections 3.1,3.2, and 3.3
without regard to said Adopted Rates and Charges, until such time as a
negotiated settlement is reached or the arbitration is complete and the Arbitrator
has rendered the final decision. LESSEE and LESSOR further agree that the
standard to be utilized during any negotiations and by the Arbitrator in
considering whether the LESSEE's objection to the Adopted Rates and Charges
is justified shall be whether said Adopted Rates and Charges provide for
reasonable consideration to be paid for rental of the Premises based upon rental
rates charged at comparable facilities in the United States. Unless the Adopted
Rates and Charges provide otherwise, LESSEE shall pay these additional
categories of rent to LESSOR on a quarterly basis.
3.4.2 Effective Dates of Rent Changes. All changes in the amount of any rents
and fees due hereunder resulting from the Adopted Rates and Charges shall take
effect as of the next due date for such rents and fees occurring after the date of
adoption of said Adopted Rates and Charges, provided however, that LESSEE
shall not be responsible for any adjusted amounts of or additional categories of
rents and fees relating to then current written subleases which provide for rental
rates which were fixed prior to the adoption of the Adopted Rates and Charges
(such subleases being hereinafter referred to as "Fixed Rent Subleases").
Additionally LESSEE shall not be responsible for any adjusted amounts of or
additional categories of rents and fees relating to exercised options for renewal
under Fixed Rent Subleases which also provide for rental rates and fees which
were fixed prior to the adoption of the Adopted Rates and Charges (such
renewals being referred to herein as "Fixed Rent Renewals"). For all subleases
other than Fixed Rent Subleases and Fixed Rent Renewals, LESSEE's
obligations for the adjusted amounts of and additional categories of rent relating
to subleases shall commence on the next due date for such rent occurring after
the date of adoption of said Adopted Rates and Charges. For new subleases
and/or renewals of subleases other than Fixed Rent Renewals, LESSEE's
obligations for the adjusted amounts of and additional categories of rent relating
to such new subleases and renewals shall commence upon LESSEE's entering
into said new sublease or renewal.
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3.4.3. Changes in Adopted Rates and Charges. LESSEE and LESSOR hereby
agree and acknowledge that the Council may adopt new or revised Adopted
Rates and Charges as often as it deems appropriate; however, the rents due
hereunder may only be changed as the result of Adopted Rates and Charges
once every five (5) years during the Term hereof.
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3.5 Record Keeping. LESSEE shall keep true and accurate account records, books and
data in accordance with generally accepted accounting principles that shall show all rents
billed to and receipts collected from third parties for any part of the Premises. LESSEE
shall maintain annual corporate income tax returns and corporate financial statements
certified by a Certified Public Accountant. LESSOR shall have the right to examine all
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financial books and records pertaining to this Lease or to the use of the Premises upon
three (3) business days advance written notice to LESSEE. LESSOR shall have the right
to annually conduct an audit of the airport records and financial statements.
4 USE OF PREMISES.
4.1 Aeronautical and Aviation Related Uses. LESSEE shall use the Premises only for
businesses associated with aeronautical and/or aviation related private businesses, airport
support businesses, appropriate aviation related governmental agencies, and related
structures, including storage, overhaul, repair, sale, rental and other normal and customary
functions of a fixed base operator, so long as they are consistent with FAA regulations and
do not interfere with the LESSOR's ability to receive grant funding. Without limiting the
foregoing, the Premises may be used for any of the following purposes:
a. Operation of the business of buying and selling aircraft, parts and
accessories therefor, and aviation equipment of all descriptions
either at retail or wholesale.
b. The business of renting and leasing of aircraft.
c. Conducting a flying school for training of personnel in the employ
of LESSEE and members of the general public as students limited to
dual and solo flight training in fixed and rotary wing aircraft and
such related ground school instruction as is necessary to prepare a
student pilot to take a written examination and flight check ride for a
pilot's certificate or appropriate aircraft rating from the FAA
d. Operation and sale of aerial survey, photograph and mapping
serVIces.
e. Overhaul services to aircraft engines, airframes and propellers as
licensed by the F. A. A.
f. Operation of a non-scheduled charter transportation of passengers
complying with all federal regulations and pertinent laws of the
State of Arizona.
g.
Operation of a radio and instrument repair and overhaul service as
licensed by the FAA.
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Operation of school for the instruction of navigation, mechanics,
aerial photography, aircraft design and theory and construction of
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4.2. Non-Airport Activities. LESSEE shall not permit its sublessees, agents, customers,
patrons or others to engage in activities which are not reasonably related to aeronautical
and/or aviation related private businesses, airport support businesses, appropriate aviation
Page 10 of36
related governmental agencies, and related purposes without fIrst obtaining the prior
written consent of FAA (where applicable) and LESSOR.
4.3. Report of Leasing Activity.
4.3.1 On a periodic basis, but not less than annually, LESSEE shall submit a
written report to LESSOR describing LESSEE's efforts to develop the Premises,
the names of persons or entities which have inquired about subleasing a portion of
the Premises, and a description of the status of planned development.
4.3.2 If any person or entity requests to sublease a portion of the Premises (a
"Prospect") and LESSEE does not enter into a sublease with such Prospect,
LESSEE shall provide LESSOR with written justifIcation for LESSEE's decision
not to sublease to such Prospect. Further, LESSEE shall, if requested by LESSOR
or the Federal Aviation Administration ("FAA"), provide data to support
LESSEE's action.
4.3.3 The parties acknowledge that LESSEE does not have exclusive use of the
Airport, nor the exclusive right to provide fIxed base operation services at the
Airport. In order to assure this, the parties agree to certain conditions which will
allow LESSOR to negotiate with prospective tenants with whom LESSEE is
unwilling to enter into a lease. To this end, if any person or entity is interested in
subleasing a part of the Premises and LESSEE does not reach agreement with such
Prospect within six (6) months after receipt from such Prospect of a formal written
proposal, LESSEE shall promptly refer such Prospect to LESSOR's Airport
Manager for all further negotiations (which negotiations shall relate only to
property other than the Premises) and shall confIrm such referral by written notice
to the Airport Manager accompanied by all information in LESSEE's possession
pertaining to such Prospect. LESSEE shall thenceforth refrain from any further
contact with such Prospect except to the extent specifIcally requested by LESSOR.
4.4 Approval of Subleases. LESSEE is permitted to sublet portions of the Premises
only for aeronautical and/or aviation related private businesses, airport support businesses,
and appropriate aviation related governmental agencies, subject to prior written approval of
LESSOR. Such approval shall not be unreasonably withheld. When requesting LESSOR's
approval of a sublease, LESSEE shall accompany its request with a copy of the actual
sublease documents it plans to submit for execution by the sublessee, including a specifIc
description of the activities to be conducted by the sublessee at the Airport. Within thirty
(30) days after submission of the proposed sublease documents by LESSEE, LESSOR shall
notify LESSEE in writing of approval or rejection thereof. In the event LESSOR deems
such thirty (30) day period to be inadequate for its review of a proposed sublease, LESSOR
may extend such period for an additional thirty (30) days by giving written notice thereof
to LESSEE prior to the expiration of the initial period. Thereafter, such period may be
extended only for good cause or by mutual agreement of the parties. If LESSOR rejects
the sublease, it shall give detailed reasons therefor and use its best efforts to provide
recommended revisions or other conditions for acceptance. All subleases, amendments,
and other lease documents shall be approved as to form by LESSOR, as evidenced by the
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Page 11 of36
signature of LESSOR's designated representative on the original of such document. Any
such sublease shall only be for a portion of the Premises reasonably necessary for the
authorized activity of the sublessee, shall be subject to the terms of this Lease, and shall
contain, as a minimum, the provisions required by this Lease. In lieu of initially
submitting the actual sublease documents, LESSEE may submit to LESSOR for approval a
memorandum of understanding or letter of intent (a "Proposal") between LESSEE and the
proposed sublessee. A Proposal shall cover all of the essential business terms of the deal
in sufficient detail for LESSOR to evaluate them as provided above. In the event a
Proposal is so approved, LESSEE and the sublessee shall proceed to fmalize the sublease
documents, which shall remain subject, however, to LESSOR's final review and approval,
which approval will not be unreasonably withheld or delayed.
4.5 Lawful Use and Condition of Premises. LESSEE shall comply with all county,
state and federal laws, including without limitation FAA Regulations and any and all
applicable zoning laws that may apply to LESSEE's use of the Premises, as well as with
applicable Town of Marana laws, regulations and ordinances. LESSEE shall obtain, at its
own cost, any licenses that may be required by law for its operation. LESSOR will assist
and cooperate to the extent possible to obtain required licenses and permits.
4.6 Other Rights of LESSEE. LESSOR hereby grants LESSEE and its sublessees and
their agents, employees, contractors, and invitees the following additional privileges, uses
and rights, all of which are subject to the terms, conditions, and covenants contained in
this Lease and all of which shall be nonexclusive with respect to the Airport:
4.6.1 The use of all public airport facilities and improvements which are now or
may hereafter be constructed and are appurtenant to the Airport. For the purpose of
this Lease public airport facilities shall include, without limitation, all necessary
landing area appurtenances, including but not limited to approach areas, runways,
taxiways, aprons, aircraft and automobile parking areas, roadways, sidewalks,
navigational and aviation aids, lighting facilities and other public facilities of the
Airport.
4.6.2 The right of ingress and egress from the Premises to all runways, taxiways
and facilities enumerated in the preceding paragraph, and over and across the
public roadways serving the Airport, subject to any and all ordinances, rules and
regulations which are now or may hereafter apply at Airport.
4.7 Public Funding for Improvements. The LESSOR has demonstrated a desire to
develop and promote the Airport and surrounding area through tenant negotiations and
establishing zoning guidelines as well as pursuing the establishment of an airport influence
area to protect the airport environment. LESSOR acknowledges that LESSEE's ability to
sublease various portions of the Premises may depend upon the availability of certain
public improvements. In the event that such improvements become apparent, LESSEE will
submit a written request to LESSOR detailing the needed improvement. Accompanying
this request will be necessary documentation consisting of an estimate of the project costs,
site map, reasoning of need and any other substantiating data. LESSOR will then
determine if said improvements fit within the overall priority and scope of public
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Page 12 of36
improvements, which meet the needs of all facility users. If approved improvements are
not contained within the current Master Plan and/or ALP, LESSOR will initiate the process
whereby those changes can be effected. Notwithstanding the foregoing, the areas
identified on Exhibit "D," although part ofthe Premises under this Agreement, are also
public access areas of the Airport. All of the areas identified on Exhibit "D" shall
continue to be available for construction and maintenance funds from all local, state or
federal sources.
4.7.1. Sole Use and Single Leaseholds. Both parties acknowledge that public
funding for the development of improvements which benefits a sole user mayor
may not be made available by any government agency. With few exceptions, it has
been determined by the director of the ADOT Aeronautics Division, with FAA
concurrence, that regardless of the number and type of operations of any subleases,
a leaseholder is the sole beneficiary of any proposed improvement, which effects
only that land of a single leasehold. It is further acknowledged that it shall be the
discretion of the LESSOR to fund any approved improvements and projects to the
extent LESSOR deems necessary in order to provide the users a safe and effective
airport and shall take necessary steps to secure the long term viability of the
Airport.
4.7.2. Governmental Funding. LESSOR makes no representation that
governmental funding for Public Airport Facilities will be made available or as to
the amount thereof. LESSOR shall however, take all actions that are prudent and
within its means to obtain as promptly as possible whatever state, federal or other
governmental funding that may be made available. Nothing contained in this
Paragraph 4 shall be deemed to obligate LESSOR to pay for or seek other
governmental funding for any project or improvement which is located entirely
within a subleased portion of the Premises or which benefits only one sublessee.
4.8 Water Delivery for Fire Protection System. LESSOR acknowledges that LESSEE
may be unable to sublease any part of the Premises by reason of the lack of a water
delivery system at the Airport sufficient to provide the fire protection required by the
relevant governmental authorities. LESSOR therefore agrees to use due diligence and take
all actions reasonably necessary to ensure that by June 30,2001, a suitable water delivery
system is designed and either constructed or will imminently be constructed, to the extent
necessary to allow LESSEE to sublease the Premises without the use thereof by sub lessees
violating applicable legal, regulatory or insurance requirements. After the completion of
such construction, LESSEE or its sublessees, as the case may be, shall be responsible for
paying the cost of installing fire protection systems as required by applicable fire codes in
any buildings or other improvements owned or occupied by LESSEE or its sublessees at
the Airport.
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4.8.1 In the event LESSOR fails to meet the June 30,2001, date set forth above 0
for any reason except "force majeure" (defined below), the Fixed Rent shall be .j
abated for those unimproved portions of the Premises marked with diagonal lines
on Exhibit "A" for the period from June 30, 2001, through the date construction of
the water delivery system, as described above, is completed. As used herein, the
Page 13 of36
term "force majeure" means labor dispute, fire, flood or other disaster, unusual
delay in deliveries, unavoidable casualties or other causes beyond the control of
LESSOR or the contractor constructing the water delivery system.
4.8.2 In the event the lack of a water delivery system prevents LESSEE from
subleasing the premises in the manner described in the preceding paragraph 4.8, the
LESSEE will have the option to cancel this Lease. If LESSEE desires to cancel
this Lease pursuant to this subsection, LESSEE must deliver written notice to
LESSOR within thirty-six (36) months from the date of this Lease, and if not
exercised within that period, this right shall forever terminate.
4.9 Financing of Improvements. LESSOR acknowledges that LESSEE may wish to
borrow money from time to time in order to finance the construction of
improvements to the Premises, and that the lender (the "Leasehold Mortgagee")
will require a mortgage or deed of trust encumbering LESSEE's interests under this
Lease (a "Leasehold Mortgage") as collateral for any such loan. The exact terms
that a Leasehold Mortgagee will require to protect the security for its loan will not
be known until LESSEE negotiates for a specific loan. If LESSEE enters into a
Leasehold Mortgage and provided that LESSOR is given written notice of the
existence of such Leasehold Mortgage from the Leasehold Mortgagee and that the
Leasehold Mortgage itself requires the following LESSOR agrees to: (1) send the
Leasehold Mortgagee a copy of any notice which it sends to LESSEE under this
Lease; (2) allow the Leasehold Mortgagee an additional thirty (30) days beyond the
time given to LESSEE to cure any defaults by LESSEE under this Lease; (3) obtain
the Leasehold Mortgagee's consent to any cancellation, or surrender of this Lease
or any amendment or modification thereof which materially affects the collateral
position of the Leasehold Mortgagee,;, and (4) allow the Leasehold Mortgagee to
foreclose and otherwise enforce its Leasehold Mortgage (by, for example,
collecting rent directly from sublessees or having a court appoint a receiver) in the
event of a default by LESSEE under the terms of the loan provided that the
Leasehold Mortgagee performs all obligations of LESSEE under this Lease. The
consent requirement in the preceding sentence shall not be deemed to limit
LESSOR's rights and remedies in the event of default by LESSEE. LESSOR shall
have the right to approve any receiver to be appointed by a court during the
foreclosure of the Leasehold Mortgage and the ultimate purchaser of LESSEE's
interest at the foreclosure sale, as well as the right to require that the LESSEE's
obligations herein be performed by the Leasehold Mortgagee and any successor
thereto.
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4.10 Provision of FBO Services. During the term of this Lease and any extension
thereof, LESSEE shall provide the services of Fixed Base Operator through its affiliate
Tucson Aeroservice Center or successor entity. Those minimum services shall include, but
not be limited to, aviation fuel sales, hangar rental, aircraft maintenance and Unicorn Radio
service. These, and any other services which the LESSEE deems desirable, shall be
provided on a daily basis during the normal operating hours of7:30 a.m. to 5:30 p.m. with
provisions being made for the availability of non-working hours fuel servicing of aircraft.
Nothing contained within this paragraph shall be interpreted to preclude LESSEE or
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Page 14 of36
Tucson Aeroservice Center from selling or transferring its rights and obligations as Fixed
Base Operator to another entity whether related or unrelated, whereupon LESSEE's
obligations under this paragraph shall cease permanently.
4.11 Restrictions of Use of Premises. LESSEE hereby agrees and acknowledges that
the use of all portions of the Premises shall comply and be in accordance with the Airport
Master Plan and Airport Layout Plan as may be amended. LESSEE further agrees and
acknowledges that all uses of all or any portion of the Premises shall not conflict with any
current, future or amended Rule, Regulation and/or Order as may be imposed by the FAA,
ADOT or LESSOR. In the event that a use of any portion of the Premises is determined to
be in conflict with any Restriction, LESSEE shall be given reasonable time in which to
correct said conflict. Any and all mitigation resulting from LESSEE's actions, errors or
omissions and any and all actions required to be taken by LESSEE so that the use of the
Premises complies herewith shall be the sole responsibility of and shall be at the sole cost
of LESSEE, except as otherwise provided for in this agreement.
5 INSURANCE.
5.1 LESSEE's Insurance. LESSEE shall keep and maintain at its sole cost fire and
extended damage coverage insurance for all structures and facilities constructed on the
Premises in an amount reasonably comparable to that of similar insurance carried by other
Airport lessees in the State of Arizona. LESSEE shall also keep and maintain at its sole
cost and expense a Three Million Dollar ($3,000,000. (0) single limit comprehensive public
or commercial general liability insurance policy with specific provisions covering bodily
injuries, property damage, premises liability, contractual liability , completed operations, if
any, products liability, if any, and Hangar Keepers Liability. In addition, LESSEE shall
provide such additional insurance, for example jump and special events coverage, as may
be reasonable and appropriate to cover liability arising out of activities authorized by
LESSEE or its sublessees to be conducted on the Premises or as otherwise reasonably
required by LESSOR.
5.2. Sublessees' Insurance. In lieu of providing such insurance itself, LESSEE shall
require a sublessee to maintain (i) property damage and/or liability insurance with
respect to any improvements, which such sublessee is occupying, and (ii) additional
insurance with respect to the activities such sublessee is conducting at the Airport.
Such sublessees and any insurance policies, which they provide, shall be subject to all
of the requirements this Article imposes with regard to LESSEE's insurance, including
but not limited to those in the following paragraph.
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5.3. Additional Insured. LESSEE shall name LESSOR as additional insured on all
liability policies and shall provide LESSOR with copies of certificates of insurance and the
endorsement of additional insured each year as the policies are renewed. LESSEE shall
also require the insurer to provide LESSOR with a written notice of cancellation a
minimum of thirty (30) days before cancellation. In those instances where special events
are to be conducted on or within proximity of leasehold where leasehold may be affected,
it is agreed that the sponsoring entity shall provide insurance, either by separate policy or
Page 15 of36
as a condition of an existing policy, Special Event Insurance whereby the LESSEE shall be
named as additional insured.
5.4. Unavailability of Insurance. If LESSEE cannot obtain any insurance required
pursuant to this Lease because of its unavailability or umeasonably prohibitive cost,
LESSEE shall be entitled to be relieved of the requirement to maintain such insurance
provided it discontinues the activity which would otherwise be covered thereby. The
parties may renegotiate the terms of this Lease with respect to insurance requirements in
the event LESSEE encounters difficulty in fulfilling such requirements.
5.5 Application to Sub-leases. LESSEE shall include in any and all subleases for
portions of the Premises and/or the Airport and in any and all agreements with third parties
to provide services at the Airport the requirement that the sublessee or third party maintain
at all times during the sublease or service agreement appropriate types and levels of
insurance coverage, as reasonably determined by LESSOR when reviewing said subleases
for approval in accordance with Section 4.4 above. Additionally, LESSEE shall include in
any and all subleases for portions of the Premises and/or the Airport and any and all
agreements with third parties to provide services at the Airport the requirement that
LESSOR be named as an additional insured under all policies of insurance required to be
maintained by the sublessee or third party.
6 INDEMNIFICATION.
6.1. By LESSEE. LESSEE shall indemnify, defend and hold harmless LESSOR, its
officers, departments, employees and agents from, for and against any and all suits,
actions, legal or administrative proceedings, claims, demands or damages of any kind or
nature arising out of this Lease which are the result of any act or omission of LESSEE, its
agents, employees, or anyone acting under the direction or control or on behalf of
LESSEE, its agents or employees.
6.2. By LESSOR. LESSOR shall indemnify, defend and hold harmless LESSEE, its
owners, affiliates, officers, employees and agents from, for and against any and all suits,
actions, legal or administrative proceedings, claims, demands or damages of any nature
arising out of this Lease which are the result of any act or omission of LESSOR, its
officers, departments, employees and agents or anyone acting under their direction or
control or on their behalf.
1
6.3. Duty of Care. LESSEE shall exercise reasonable care on the Premises and Airport
and shall advise LESSOR when conditions, which may pose an umeasonable risk of harm
to members of the general public, are discovered. When LESSEE is advised by its
employees or the LESSOR that an unsafe or dangerous condition exists on the Premises,
LESSEE shall take reasonable steps to correct the condition and shall be responsible that
members of the general public are not exposed to danger. LESSOR shall take reasonable
steps to correct any such condition with regard to portions of the Airport, which are
outside the Premises and not otherwise leased.
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Page 16 of36
6.4 Application to Sub-leases. All of LESSEE's obligations under Sections 6.1 and 6.3
above shall be included in all subleases for portions of the Premises and/or Airport and
agreements with third parties to provide services at the Airport as obligations of the
sublessee or third party thereunder with such obligations to also be in favor of LESSOR.
Such inclusion in subleases and service agreements shall not in any way diminish
LESSEE's obligations as set forth in Section 6.1 and 6.3 above.
7. CONSTRUCTION OF STRUCTURES & IMPROVEMENTS.
7.1 LESSEE's Improvements. LESSEE may construct improvements on the Premises
as contemplated by this Lease, provided:
a. All proposed construction shall conform to this Lease and to the
scheme contained in the Airport master plan; and
b. LESSEE is not in default in the performance of any of the terms of
this Lease.
7.2. LESSOR's Approval. LESSEE shall notify LESSOR in writing of its intention to
construct improvements on the Premises. The written notice shall specify the location of
the improvements together with a detailed site plan and (if available) architectural plans,
specifications and other relevant documentation. Additionally, the written notice will set
forth the particular infrastructure needs of the improvements, including but not limited to
water, electric, fire protection, transportation, wastewater, and other utilities. These
documents shall be submitted to the Airport Manager and such other officials as LESSOR
may designate. LESSOR acknowledges the necessity for expedited review of all plans
submitted by LESSEE to LESSOR pertaining to the development of the Premises and
agrees to use its best efforts to accomplish such expedited review of the plans. If LESSOR
rejects the proposed improvements, LESSOR shall give detailed reasons therefor and will
use its best efforts to provide recommended revisions for acceptance. If LESSOR gives its
acceptance, such acceptance shall be subject to LESSEE's compliance with Part 77 of the
FAA Regulations, as they may be amended. LESSOR may refuse to permit the
construction or installation of any improvement if the type of construction or installation or
the location of such improvement (1) does not meet LESSOR's reasonable and lawful
requirements for safe use of the Airport, (2) does not comply with the LESSOR's building
codes, laws or other regulations, (3) does not conform to the applicable laws ofthe United
States or the State of Arizona, or (4) does not conform to applicable Federal Aviation
Regulations (FARs), Advisory Circulars, FAA Orders, and other FAA directives as they
exist and as they may be amended or added from time to time. Following approval of such
improvements, LESSEE shall obtain the necessary permits and proceed with approval and
construction as set forth in the LESSOR's applicable development codes. LESSEE shall
have the right to make major alterations and modifications in any buildings, structures or
other improvements now or hereafter constructed or installed in or on the Premises, subject
to the provisions of this paragraph. Items of normal repair and maintenance and minor
alterations and modifications constructed at a cost under ten thousand dollars ($10,000.00)
need not be submitted to LESSOR for approval unless required by applicable development
or building codes.
Page 17 of36
7.2.1. In the event LESSOR is unable to provide sufficient personnel (either in-
house staff or outside consultants to LESSOR) to review the plans within thirty (30)
days, LESSEE may elect to pay the reasonable costs incurred by LESSOR to retain
such consultants or other experts as LESSOR may reasonably deem necessary to
review the plans on behalf of LESSOR. Because of LESSEE's liability for the
consultant's fees, any consultants under this paragraph shall be selected by the
agreement of both LESSOR and LESSEE. LESSOR and LESSEE shall diligently
select consultants following a request by LESSEE hereunder. LESSEE
acknowledges that the consultants' recommendations will be subject to review and
revision by LESSOR's staff and that LESSOR shall not be bound by any of the
consultants' recommendations unless approved by LESSOR's governing body or
other board or person having final approval rights with respect to the plans.
LESSOR's non-liability for a consultant's fees hereunder shall be unconditional and
LESSEE shall indemnify and hold LESSOR harmless from any claims relating to
such fees.
7.3 No Obligation for Leasehold Improvements. Without limiting the effect of
paragraph 4.7 of this Lease, LESSOR shall have no obligation to pay for the cost of
construction of leasehold improvements.
7.4 No Liens. LESSEE shall not permit any mechanic's lien to be filed against the
Premises or the improvements located on the Premises by reason of work, labor, services,
or materials supplied or claimed to have been supplied, whether before or after the
commencement of this Lease. If any mechanic's lien is at any time filed against the
Premises or any improvement on the Premises, LESSEE shall, as soon as possible after
notice of the filing of the lien, cause such lien to be discharged of record by payment,
deposit, bond, order of a court of competent jurisdiction, or otherwise. If LESSEE fails to
discharge the lien within thirty (30) days, LESSOR may discharge such lien with
LESSEE's approval or after a [mal judgment is rendered either by paying the amount
claimed to be due or by procuring the discharge of such lien by deposit or by bonding
proceedings. If a foreclosure action initiated by lien results in a final judgment in its favor,
the LESSOR may, at its sole option, pay the full amount of such final judgment. Any
amount paid or expended by LESSOR, including but not limited to costs and reasonable
attorneys' fees for any of such purposes, with interest at twelve percent (12 % ) per annum
from the date of payment, shall be repaid by LESSEE to LESSOR on demand. LESSOR's
options under this paragraph shall be in addition to any other right or remedy LESSOR
may have.
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7.5 Consent to Removal. No building, structure or other improvement installed,
constructed, erected or placed by LESSEE or a third party on the Premises shall be
removed from the Premises without the prior written consent of LESSOR, which shall not
be unreasonably withheld.
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7.6 No Obligation for Public Airport Facilities. Notwithstanding anything in this Lease
to the contrary, neither LESSEE nor its permitted sublessees shall have any responsibility
or obligation for the construction, installation or maintenance of public airport facilities.
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Page 18 of36
7.7 Applicability to Third Parties. LESSEE shall make the provisions of Section 7
binding upon the other party in any sublease agreement or contract by which LESSEE
grants a right or privilege to any person, firm, or corporation under this lease.
8 ENVIRONMENTAL PROVISIONS.
8.1 LESSEE's Obligation. LESSEE shall, at LESSEE's own expense, comply with all
present and hereinafter enacted Environmental Laws, and any amendments thereto,
applicable to LESSEE's operation on the Premises.
8.2 Definitions.
"Environmental Laws" shall mean anyone or all ofthe following as the same are amended
from time to time: the Comprehensive Environmental Response, Compensation, and
Liability Act, 42 V.S.C. Section 9601 et seq.; the Resource Conservation and Recovery
Act, 42 V.S.C. Section 6941 et seq.; the Toxic Substances Control Act, 15 V.S.C. Section
2601 et seq.; the Safe Drinking Water Act, 42 V.S.C. Section 300h et seq.; the Clean
Water Act, 33 V.S.C. Section 1251 et seq.; the Clean Air Act, 42 V.S.C. Section 7401 et
seq.; the Arizona Environmental Quality Act, A.R.S. Section 49-201 et seq.; the Arizona
Hazardous Waste Management Act, A.R.S. Section 49-921 et seq.; and the Arizona
Vnderground Storage Tank Regulation statute, A.R.S. Section 49-1001 et seq.; and the
regulations promulgated thereunder and any other laws, regulations and ordinances
(whether enacted by the local, state or federal government) now in effect or hereinafter
enacted that deal with the regulation or protection of the environment, including the
ambient air, ground water, surface water, and land use, including substrata land.
The term "hazardous material" includes:
a.
Those substances included within the definitions of hazardous
substance, hazardous material, toxic substance, regulated substance,
or solid waste in the Comprehensive Environmental Response,
Compensation and Liability Act, 42 V.S.C. Section 9601 et seq.,
the Resource Conservation and Recovery Act, 42 V.S.C. Section
6901 et seq.; and the Hazardous Materials Transportation Act, 49
V.S.C. Section 1801 et seq. and the regulations promulgated
thereto;
b.
Those substances included within the definitions of hazardous
substance, pollutant, toxic pollutant, regulated substance, hazardous
or solid waste in the Arizona Environmental Quality Act, A.R.S.
Section 49-201 et seq.; including, but not limited to, the Water
Quality Assurance Revolving Fund statute, A.R.S. Section 49-701
et seq., and the Vnderground Storage Tank Regulation statute,
A.R.S. Section 49-1001 et seq.;
9
c. Those substances listed in the Vnited States Department of
Transportation Table (49 D.F.R. Section 172.101 and amendments
Page 19 of36
thereto) or by the Environmental Protection Agency as hazardous
substances (40 C.F.R. part 302 and amendments thereto); and,
d. All substances, materials and wastes that are, or that become,
regulated under, or that are classified as hazardous or toxic under any
environmental law.
The term "release" shall mean any releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, disposing, or dumping.
8.3 Compliance. LESSEE shall not cause any hazardous material to be used,
generated, manufactured, produced, stored, brought upon, or released, on, under, or about
the Premises, or transported to and from the Premises, by LESSEE, its affiliated entities,
owners, agents, employees, contractors, invitees, sublessees or a third party in violation of
any Environmental Law, and shall use its reasonable best efforts to prevent any such
occurrence. LESSEE shall indemnify, defend and hold harmless LESSOR, its successors
and assigns, its employees, agents and attorneys from, for and against any and all liability,
loss, damage, expense, penalties and legal and investigation fees or costs, arising from or
related to any claim or action for injury, liability, breach of warranty or representation or
damage to persons or property and any other claims or actions brought by any person,
entity or governmental body, alleging or arising in connection with contamination of, or
adverse effects on, the environment or violation of any Environmental Law or other
statute, ordinance, rule, regulation, judgment or order of any government or judicial entity
which are incurred or assessed as a result (whether in part or in whole) of any activity or
operation on or discharge from the Premises during the term of this Lease by LESSEE or
its owners or related entities. This obligation includes but is not limited to all costs and
expenses related to cleaning up the Premises, land, soil, underground or surface water as
required under the law. LESSEE's obligations and liabilities under this Paragraph shall
continue so long as LESSOR bears any liability or responsibility under the Environmental
Laws for any action that occurred on the Premises during the term of this Lease. This
indemnification of LESSOR by LESSEE includes, without limitation, costs incurred in
connection with any investigation of site conditions or any cleanup, remedial, removal or
restoration work required by any federal, state or local governmental agency or political
subdivision. The parties agree that LESSOR's right to enforce LESSEE's promise to
indemnify is not LESSOR's sole remedy for LESSEE's violation of any provision of this
Paragraph; LESSOR shall also have the rights set forth in this Paragraph 8.3 in addition to
all other rights and remedies provided by law or otherwise provided in this Lease.
Notwithstanding the foregoing, nothing contained in this Paragraph 8.3 shall obligate
LESSEE to indemnify, defend or hold LESSOR harmless from the results of any
negligence or willful misconduct by LESSOR or its agents, nor to waive any legal right or
remedy LESSEE might have against LESSOR by reason thereof. As used herein, "related
entities" means two entities which are under common control or one of which controls the
other, and "control" means the power to impose management and policy decisions.
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8.3.1 Without limiting the foregoing, if the presence of any hazardous material
on, under or about the Premises caused by LESSEE or its owners or related entities
in violation of this Lease results in any contamination of the Premises, LESSEE
Page 20 of 36
shall promptly take all actions at its sole cost and expense as are necessary to return
the Premises to the condition existing prior to the introduction of any such
hazardous material to the Premises; provided that LESSOR's approval of such
actions shall first be obtained, which approval shall not be unreasonably withheld
so long as such actions would not potentially have any material adverse long-term
effect on the Premises.
8.3.2 LESSEE shall, at LESSEE's own cost and expense, make all
submissions to, provide all information to, and comply with all requirements of
the appropriate governmental authority (the "Government") under the
Environmental Laws pertaining to LESSEE's operation on the Premises.
Should the Government determine that a site characterization, site assessment
and/or a cleanup plan be prepared or that a cleanup should be undertaken
because of any spills or discharges of hazardous materials at the Premises during
the term of this Lease which are caused by LESSEE, its sublessees, or its
owners or related entities, then LESSEE shall, at LESSEE's own cost and
expense, prepare and submit the required plans and financial assurances, and
carry out the approved plans. At no cost or expense to LESSOR, LESSEE shall
promptly provide all information reasonably requested by LESSOR to determine
the applicability of the Environmental Laws to the Premises, or to respond to
any governmental investigation or to respond to any claim of liability by third
parties which relates to environmental contamination.
8.3.3 LESSEE shall immediately notify LESSOR of any of the following: (a) any
correspondence or communication from any governmental entity regarding the
application of Environmental Laws to the Premises or LESSEE's operation on the
Premises, and (b) any change in LESSEE's operation on the Premises that will
change or has the potential to change LESSEE's or LESSOR's obligations or
liabilities under the Environmental Laws.
8.3.4 LESSEE shall make the provisions of this Paragraph 8.3 binding upon the
other party in any sublease agreement or contract by which it grants a right or
privilege to any person, firm, or corporation under this Lease.
8.4 Remedies. LESSEE's material failure to comply with any of the requirements and
obligations of Paragraph 8.3 or applicable Environmental Law shall constitute a default of
this Lease and shall permit LESSOR to pursue the following remedies, in addition to all
other rights and remedies provided by law or otherwise provided in the Lease, to which
LESSOR may resort cumulatively, or in the alternative:
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a.
LESSOR may, at LESSOR's election, and upon thirty (30) days
written notice to LESSEE, make payments required of LESSEE
under this Paragraph 8 or perform LESSEE's obligations under this
Paragraph and be reimbursed by LESSEE for the cost thereof,
unless such payment is made or obligation performed by LESSEE
within such thirty (30) day period.
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b. LESSOR may, at LESSOR's election, and upon thirty (30) days
written notice to LESSEE, terminate this Lease, unless, within such
thirty (30) day period, LESSEE cures the default or, if the default is
one which cannot reasonably be cured in that time, commences such
cure and thereafter diligently pursues it. Upon LESSOR's
termination, LESSOR shall be entitled to recover from LESSEE
damages equal to the present value of the total amount by which all
Rent and Fuel Flowage Fees during the balance of the Lease Term
exceeds the amount of loss of such items that LESSEE proves could
have been reasonably avoided by LESSOR.
c. Notwithstanding any other provision in this Lease to the contrary,
LESSOR shall have the right of "self-help" or similar remedy in
order to minimize any damages, expenses, penalties and related fees
or costs, arising from or related to a violation of Environmental
Law on, under or about the Premises.
9 PUBLIC UTILITIES.
9.1 Payment. LESSEE shall payor cause it's permitted sublessees to pay for all public
utility services supplied to it on the Premises, including but not limited to electricity, gas,
water and sewage service and commodities.
9.2 Repair. LESSOR retains the right at its sole cost to utilize, connect or otherwise
use any utility located within any utility easement and/or right-of-way within the Premises
for the expansion and/or providing of services for use on the Airport and shall have the
right and duty to repair the same. LESSEE shall not be required to bear the cost of
repairing these utilities except as provided for in the applicable Town Code(s) or as agreed
to by the execution of any and all contracts with any entity, whether held publicly or as a
private corporation, for the providing of any service(s). Utility repairs, to be effected by
the LESSOR, shall be done on a priority basis and shall not unreasonably interfere with
LESSEE's operations.
9.3 Provision of Utilities. For those utilities solely supplied by the Town of Marana,
LESSOR shall take all actions necessary to establish all utility corridors in order to
maximize the utilization of the Premises. LESSOR, upon determining if a project's scope
and priority coincides with the general overall plan for public improvements, shall exercise
due diligence to obtain outside funding as may be available. LESSOR shall bear any costs
and expenses incurred in establishing said corridors, and shall have all rights and
obligations of the same. Without limiting the foregoing, LESSOR shall provide a water
supply to LESSEE and to other water users on the Premises sufficient to allow fulfillment
of the purposes contemplated by this Lease. LESSOR shall provide water to the Premises
for use by LESSEE and its sub-lessees and the installation, maintenance, rates and fees,
payment methods and all other applicable provisions shall be in accordance with the Town
of Marana, Town Code, Chapter 14, "WATER". LESSEE shall, at no cost or expense to
LESSOR, provide all public utility and sewage connections within the Premises which are
needed for buildings, structures and other improvements, constructed on the Premises by
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LESSEE or its sub-lessees. In the event that the creation of a publicly funded utility
corridor prevents LESSEE from utilizing any portion of the Premises for the purposes
contemplated by this Lease, such portion shall, if requested by LESSEE, be deleted from
the Premises in accordance with Paragraph 1.3.
9.4 Rights of Way. If requested to do so by LESSEE, LESSOR shall grant reasonable
rights-of-way on or across the Airport to public utility companies for the purpose of
supplying LESSEE with utilities, but LESSOR reserves the right to designate the location
of such rights-of-way.
10 MAINTENANCE.
10.1 LESSEE's Obligations. LESSEE shall retain the title to all improvements made by
LESSEE on the Premises until such time as the title thereto transfers to LESSOR pursuant
to Paragraph 18.4 below. LESSEE shall keep and maintain all improvements on the
Premises to which LESSEE has title in a clean, good, safe and usable condition, and shall
promptly commence and continue with reasonable due diligence to repair any damage or
defects. LESSEE shall be responsible for coordinating and notifying the LESSOR of any
construction or alteration on the Premises that will fall under the requirements of FAA
Form 7460-1, Notice of Proposed Construction or Alteration; FAA Form 7480-1, Notice
of Landing Area Proposal; or the Airport Master Record, FAA Form 5010-1 or other
forms and/or notification that may be currently in effect or hereafter enacted by any duly
authorized government agency or its assignee.
10.1.1 With respect to open or otherwise vacant land within the Premises, LESSEE
agrees to periodically inspect said property and perform any general maintenance
including but not limited to mowing and trimming, refuse removal, tree and shrub
trimming, compliance with the Storm Water Pollution Plan as adopted by the
Town, sight and visibility compliance.
10.2 LESSOR's Obligations. LESSOR shall keep and maintain in good condition and
repair in compliance with FAA Regulations, other applicable Federal and State law and
regulations and LESSOR's approved maintenance plan, all public airport facilities,
including those areas identified on Exhibit "C," as well as any non-public improvements to
which LESSOR has title. LESSOR shall be responsible for notifying and properly filing
the necessary forms that fall under the requirements of FAA Form 7460-1, Notice of
Proposed Construction or Alteration; FAA Form 7480-1, Notice of Landing Area
Proposal; or the Airport Master Record, FAA Form 5010-1 1 or other forms and/or
notification that may be currently in effect of hereafter enacted by any duly authorized
government agency.
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10.3 Notices by LESSEE. Upon discovery, LESSEE shall immediately notify LESSOR
of any Airport property within the Premises for which this Lease provides that LESSOR
has the responsibility to repair and which is in need of maintenance and repair. Airport
property within the Premises which is to be maintained by LESSOR as set forth herein
shall be repaired on a priority basis if it adversely affects LESSEE's operation; otherwise,
such repairs and maintenance shall be done within a reasonable time.
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10.4 Inspection by LESSOR. The condition of the Airport, LESSEE's operation, and
the Premises shall be subject to inspection at any time by LESSOR with reasonable
frequency and at reasonable times on no less than twenty-four (24) hours advance notice
unless such notice is not feasible due to an emergency. This provision shall not impair
LESSOR's ability to inspect, without prior notice to LESSEE, any portion of the Airport
located outside of the Premises.
11 TAXES.
11.1 LESSEE's Payment. LESSEE shall pay before delinquent any and all applicable
taxes levied or assessed by any government body as a result of LESSEE's operations and
including but not limited to all rental taxes which may be levied or assessed against
LESSOR and/or LESSEE, as provided by the Marana Tax Code.
12 RULES AND REGULATIONS.
12.1 LESSOR's Regulations. LESSEE shall observe and obey all applicable rules,
policies, minimum standards and regulations relating to the Premises and/or the Airport
which have been or may in the future be adopted or amended by LESSOR; provided,
however, that such rules and regulations shall be consistent with rules, regulations and
orders of the FAA. In addition LESSEE shall comply with the following standard FAA
lease provisions listed in Paragraphs 12.2 through 12.17 below.
12.2 Department of Transportation Regulations. If facilities are constructed, maintained,
or otherwise operated on the Premises for a purpose for which a Department of
Transportation program or activity is extended or for another purpose involving the
provision of similar services or benefits, LESSEE shall maintain and operate such facilities
and services in compliance with all other requirements imposed pursuant to Title 49, Code
of Federal Regulations, Department of Transportation, 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, as may be
amended from time to time.
12.3 Non-Discrimination. LESSEE, its successors in interest and assigns, do hereby
covenant and agree that (1) no person on the grounds of race, color, gender, or national
origin shall be excluded from participation in, denied the benefits of, or be otherwise
subjected to discrimination in the use of the Airport facilities on the Premises, (2) that 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, physical disability or national
origin shall be excluded from participation in, denied the benefits of, or otherwise be
subject to discrimination, (3) that the LESSEE shall use the Premises in compliance with
all other requirements imposed by or pursuant to Title 49, Code of Federal Regulations,
Department of Transportation, 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, as may be amended from time to
time.
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12.4 Fairness. LESSEE shall furnish its accommodations and services on a fair, equal
and not unjustly discriminatory basis to all users thereof.
12.5 Applicable to Other Agreements. LESSEE shall insert Paragraphs 12.2, 12.3, and
12.4 in any rental agreement, Sub-operator's agreement and the like, by which LESSEE
grants a right or privilege to any person, firm, or corporation to render accommodations or
services to the public on the Premises.
12.6 Affirmative Action. LESSEE shall undertake an affirmative action program as
required by 14 C.F.R. 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 covenants 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 provision. LESSEE shall require its
suborganizations, sublessees, agents, and employees provide assurances to LESSEE that
they similarly shall undertake affirmative action programs and that they shall require
assurances from their suborganizations, as required by 14 CFR Part 152, Subpart E, to the
same effect.
12.7 Non-Compliance. If a complaint is lodged alleging noncompliance by LESSEE
with Paragraphs 12.2, 12.3, or 12.4 of this Article and an investigation and determination
of noncompliance is made by a proper authority, LESSEE shall have a reasonable time but
not less than thirty (30) days to comply after receipt of written notice of such
noncompliance from LESSOR. Failure by LESSEE to cure the noncompliance shall
constitute a material breach of this Lease and LESSOR shall have the right to terminate this
Lease and the estate hereby created in accordance with ARTICLE XVI, at the election of
LESSOR. LESSOR may enforce Paragraphs 12.2, 12.3, and 12.4 ofthis Article through
court action or any other legal remedy in lieu of termination.
12.8 Future Development. LESSOR reserves the right to further develop or improve the
air navigation facility and the landing and apron areas for the Airport in coordination with
ADOT Aeronautics and the FAA for further growth and development. LESSEE shall not
be required to bear any of the cost or expense of construction and maintenance of such
improvements.
12.9 Future Construction. The parties agree to comply with their respective notification
and review requirements covered in Part 77 of the Federal Aviation Regulations in the
event future construction of a building is planned for the leased Premises, or in the event of
any planned modification or alteration of any present or future building or structure
situated on the leased Premises.
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12.10 Elevation Restriction. LESSEE, by accepting this Lease, expressly agrees for
itself, its successors and assigns that it will not erect nor permit the erection of any
structure or object, nor permit the growth of any tree on the land leased hereunder above
the permitted mean sea level elevation. In the event the aforesaid covenant is breached, the
LESSOR reserves the right to enter upon the land leased hereunder and to remove the
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offending structure or object and cut the offending tree, all of which shall be at the expense
of the LESSEE.
12.11 Subordination to Federal Agreements. This Lease shall be subordinate to the
provisions and requirements of any existing or future agreement between LESSOR and the
United States or its agencies and departments relative to the development, operation or
maintenance of the Airport.
12.12 No Exclusive Right. Nothing in this Lease shall be construed to grant or authorize
the granting of an exclusive right within the meaning of U.S. Code 40103 (e) and 47107
(a) (4).
12.13 Applicable to Subleases. LESSEE shall insert the relevant provisions of this Article
12 in any agreement or contract by which it grants a right or privilege to any person, fIrm,
or corporation under a sublease. As used in this Lease, the term "sublease" shall include
month-to-month tenancies.
12.14 Compliance with Aviation Regulations. LESSEE shall conduct its operations and
activities on the Airport in compliance with all applicable regulations of the FAA and the
Arizona Department of Aeronautics.
13 SUPERIOR RIGHTS.
13.1 Preemption by U.S. During time of war or national emergency, LESSOR may
enter into agreements with the United States Government for use of part or all of the
Airport. LESSOR will coordinate any such agreement which affects LESSEE's operation
with LESSEE in advance to the extent feasible. If any such agreement is executed by
LESSOR, the provisions of this Lease, insofar as they are inconsistent with the provisions
of any agreement made by LESSOR with the United States Government shall be
superceded, and LESSEE shall have no claim against LESSOR for any loss or damage
sustained by LESSEE because of the making of such agreement by LESSOR.
13.2 Disclaimer. The parties shall not be required to repair, replace, rebuild or
construct any building or portion of any building so long as the obligated party is
prevented from so doing by action of the United States Government.
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RESERVATION OF EASEMENT.
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14.1 LESSO R' s Reservation of Rights. LESSOR hereby reserves for the use and benefIt
of aircraft using the Airport a right of flight for the passage of aircraft in the airspace
above the uppermost level of the construction on the Premises, together with the right to
cause such noise as may be inherent in the operation of aircraft now known or hereafter
used for navigation of or flight in the air using said airspace, or landing at, or taking off
from, or operating on, the Airport.
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14.2 No Obstruction. LESSEE shall not make use of the Premises in any manner that
might interfere with the landing and taking off of aircraft from the Airport or otherwise
constitute a hazard. If this provision is violated, LESSEE shall immediately remedy the
Page 26 of 36
situation upon reasonable notice by LESSOR. If LESSEE does not immediately remedy
the hazard, LESSOR may at its option enter upon the Premises and abate the hazard at the
expense of LESSEE. This paragraph shall not apply to improvements constructed with
LESSOR's approval under Paragraph 7.2
15 ASSIGNMENT.
15.1 LESSOR's Consent. LESSEE shall not assign, sell, transfer, mortgage or pledge
this Lease or any interest in it without first obtaining written consent from LESSOR, which
consent shall not be unreasonably withheld. LESSEE granting to a lender a security
interest in the proceeds of a sublease or in buildings or other improvements constructed for
a sublessee in order to finance the cost of such construction shall not constitute an
assignment prohibited hereby. Any change in principal ownership or control of LESSEE,
except if due to the death or disability of a shareholder or made for estate planning or
testamentary purposes, shall be considered an assignment of rights under this Lease. Any
assignment of this Lease by LESSEE shall be upon the following conditions.
15.1.1 Any assignment of this Lease shall be in writing, signed by all parties to
this Lease, and signed by the assignee.
15.1.2 Any assignment of this Lease shall provide that the assignee assumes and
agrees to perform all of the terms, covenants and agreements which LESSEE has
agreed to perform under this Lease. Provided LESSOR approves the assignee's
financial and operative capabilities, LESSOR shall enter into a new agreement
(novation) with LESSEE's assignee. LESSOR's approval for such novation shall
not be unreasonably withheld or delayed. LESSOR shall thereafter rely solely on
the assignee, and LESSEE shall have no further liability to LESSOR under this
Lease except with respect to environmental indemnification for releases that
occurred prior to the assignment. Absent a novation, the assignee shall become
jointly and severally liable with LESSEE or any successor in interest of LESSEE
for the performance of the terms and covenants of this Lease.
15.2 Compliance with Requirements. Any assignment or transfer whatsoever or pledge
or mortgage made contrary to the terms of this Article shall be void.
16
TERMINATION BY LESSOR.
16.1 Default by LESSEE. If LESSEE defaults in the payment of any sums due LESSOR
under this Lease, defaults by the nonperformance of some other obligation set forth in this
Lease, or if one of the events of default set forth in Paragraph 16.2 below or elsewhere in
this Lease takes place, LESSEE shall have thirty (30) days after written notice is served in
accordance with Article 20 to cure or remedy the default, unless a shorter period of time is
expressly set forth herein for LESSEE to cure the default in which case that shorter time
period shall control. If LESSEE fails to cure or remedy the default within thirty (30) days
after such notice has been served, or, in the event such default cannot reasonably be
remedied within such thirty (30) day period, to commence such remedy within such period
and diligently pursue it thereafter, LESSOR may, at its option, and without prejudice to
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any other right or remedy, terminate this Lease and recover possession of the Premises by
summary proceedings.
16.2 Additional Defaults. In addition to the events of default mentioned above, any of
the following shall also constitute an event of default hereunder:
a. The making by LESSEE of any general assignment, or general
arrangement for the benefit of creditors;
b. The filing by or against LESSEE of a petition to have LESSEE
adjudged a bankrupt or a petition for reorganization or arrangement
under any law relating to bankruptcy unless the same is dismissed
within sixty (60) days;
c. The appointment of a trustee or receiver to take possession of
substantially all of LESSEE's assets located at the Premises, or of
LESSEE's interest in this Lease, where possession is not restored to
LESSEE within thirty (30) days; or
d. The attachment, execution, or other judicial seizure of substantially
all of LESSEE's assets located at the Premises, or of LESSEE's
interest in this Lease, where such seizure is not discharged within
thirty (30) days.
16.3 No Waiver. No waiver by LESSOR of default in any of the terms, covenants or
conditions of this Lease shall be construed to be or act as a waiver of any subsequent
default.
16.4 Remedies Cumulative. All remedies granted to LESSOR under this Article are
cumulative and are in addition to any other rights LESSOR may have as a matter of law.
16.5 Expiration of Cause. If the basis for termination by LESSOR ceases to exist prior
to a termination, the right to terminate on such basis shall cease.
17 TERMINATION BY LESSEE.
17.1 Causes. Without prejudice to any of its other remedies under law, or this Lease,
LESSEE may terminate this Agreement upon thirty (30) days written notice given
in accordance with ARTICLE 20, upon or after the happening of or during the
continuation of any of the following events:
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a.
The inability of LESSEE or its sublessees to use, for a period of
ninety (90) days, any material portion of the Premises or
improvements thereon, because of any law, rule, regulation or other
action or failure to act on the part of any governmental authority
having jurisdiction thereof.
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b. The material default by LESSOR under this Lease and the failure of
LESSOR to remedy such default for a period of thirty (30) days
after receipt of written request or demand from LESSEE to remedy
the same, or; in the event such default is incapable of being
remedied within such thirty (30) day period, to commence such
remedy within such period and diligently pursue it thereafter.
c. The assumption by the United States Government or any authorized
agency thereof of the operation or control of Airport or any part of
it in a way that substantially restricts LESSEE for a period of thirty
days from conducting its operations on the Premises.
d. Discovery of a defect or condition in the Premises, including but not
limited to the presence of hazardous waste or other soil problems
not caused by or resulting from any action by LESSEE, its affiliated
entities, owners, employees, agents, contractors, invitees,
sublessees or a third party, which could be reasonably expected to
have a material adverse effect on LESSEE's ability to use the
Premises for the purposes contemplated by this Lease.
17.2 Expiration of Cause. If the basis for termination by LESSEE ceases to exist prior
to a termination, the right to terminate on such basis shall cease.
17.3 Non-Waiver. No waiver by LESSEE of default in any of the terms, covenants or
conditions of this Lease shall be construed to be or act as a waiver of any subsequent
default.
17.4 Remedies Cumulative. All remedies granted to LESSEE under this article are
cumulative and are in addition to any other rights LESSEE may have as a matter of law.
18 SURRENDER OF POSSESSION; CONDITION OF PREMISES.
18.1 Surrender. Upon the expiration or earlier termination of this Lease, LESSEE shall
immediately surrender the Premises to LESSOR.
18.2 Condition. The Premises shall be returned to LESSOR in the same condition as
maintained by LESSEE during its operation prior to surrender.
18.3 Removal of Personal Property. All buildings, structures and improvements shall be
delivered to LESSOR in good condition, ordinary wear and tear excepted. Not later than
thirty (30) days after the expiration or termination of this Lease, LESSEE shall remove any
and all signs, trade fixtures, machinery and equipment from the Premises. LESSEE shall
repair any damage caused by such removal. Upon failure of LESSEE to remove such
personal property within the thirty-day period, LESSOR may at its option cause the
personal property to be removed and charge LESSEE the actual costs of such removal or
take title to the personal property.
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18.4 Transfer to LESSOR. All permanent buildings, structures and improvements
constructed, installed, erected or placed on the Premises by LESSEE or its sublessees to
which LESSOR does not already have title shall automatically become the property of the
LESSOR upon the expiration or earlier termination of this Lease without further action on
the part of either party, without cost or charge to LESSOR, and without further
conveyance or transfer to LESSOR; provided, however, that LESSEE shall, if requested
by LESSOR, execute any instruments or documents reasonably required by LESSOR to
evidence the vesting of title to such improvements and property.
19 GENERAL PROVISIONS.
19.1 Cumulative . Unless specifically indicated otherwise, no remedy, right, option or
election set forth in any provisions of this Lease shall be deemed exclusive; rather, each
shall be cumulative with other remedies in law or equity. This Lease shall be deemed both
a contract between the parties and a declaration of conditions, covenants and restrictions
running with the land for the duration of the Lease term or any extensions of it.
19.2 Non-Waiver. No circumstance in which LESSOR or LESSEE, either expressed or
implied, consents to, suffers, or permits the doing by the other of any act or omission
under this Lease shall be construed to be or shall be a waiver of any provision or condition
of this Lease or shall be construed to condone any future breaches, unless the provision or
condition in question is expressly waived in writing by the waiving party.
19.3 Time of Essence. Time is of the essence in the performance of all terms and
conditions of this Lease.
19.4 Entire Agreement. This instrument contains the entire agreement between the
parties, and no statement, promise, or inducements made by either party or agent of either
party that is not contained in this instrument shall be valid or binding.
19.5 Modification. This Lease may not be enlarged, modified or altered except in
writing by the parties.
19.6 Abandonment. If the Premises are abandoned, deserted or vacated by LESSEE for
thirty (30) days or more, and remain so for an additional thirty (30) days after LESSOR
gives LESSEE notice thereof, LESSOR may, at its option, terminate this Lease and reenter
and repossess the Premises without liability to LESSEE.
19.7 Successors and Assigns Bound. All the terms, covenants and conditions of this
Lease shall inure to and bind the successors and assigns of the parties to this Lease.
19.8 Article Headings. The article headings in this Lease are for convenience and
reference only and are not intended to define or limit the scope of any provision of this
Lease.
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19.9 Severability. If any term or condition of this Lease is invalid or unenforceable, all
other terms and conditions shall remain in full force and effect.
Page 30 of 36
19.10 Applicable Law. This Lease shall be governed by the laws of the State of Arizona,
and any actions to enforce or interpret the terms and provisions of this Lease shall be
brought and maintained in Pima County, Arizona.
19.11 Authority. Each of the respective undersigned signatories for LESSEE and
LESSOR warrant that they have authority to enter into this Lease for and on behalf of the
party for whom they are signing and to legally bind such party.
19.12 Recording and Effective Date. Upon execution by all parties, this Lease shall be
recorded in the office of the Pima County Recorder.
19.13 Approvals. Whenever this Lease requires the approval or consent of a party, such
approval or consent shall not be unreasonably withheld or delayed.
19.14 Arbitration. Any controversy or claim arising out of or relating to this contract,
or the breach thereof, shall be settled by arbitration administered by the
American Arbitration Association in accordance with its Commercial
Arbitration Rules, and judgment on the award rendered by the arbitrators may
be entered in any court having jurisdiction thereof.
a. In the event of any dispute, claim, question, or disagreement arising
from or relating to this agreement or the breach thereof, the parties
hereto shall use their best efforts to settle the dispute, claim, question, or
disagreement. To this effect, they shall consult and negotiate with each
other in good faith and, recognizing their mutual interests, attempt to
reach a just and equitable solution satisfactory to both parties. If they do
not reach such solution within a period of 60 days, then, upon notice by
either party to the other, all disputes, claims, questions, or differences
shall be finally settled by arbitration administered by the American
Arbitration Association in accordance with the provisions of its
Commercial Arbitration Rules.
b.
Within 15 days after the commencement of arbitration, each party shall
select one person to act as arbitrator and the two selected shall select a
third arbitrator within 10 days of their appointment. If the arbitrators
selected by the parties are unable or fail to agree upon the third
arbitrator, the American Arbitration Association shall select the third
arbitrator.
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c.
The arbitration proceedings shall be conducted before a panel of three
neutral arbitrators, all of whom shall be members of the bar of the state
of Arizona, actively engaged in the practice of law for at least 10 years.
5
d.
The place of arbitration shall be Tucson, Arizona.
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e. Disputes under this clause shall be resolved by arbitration in accordance
with Title 9 of the US Code (United States Arbitration Act) and the
Commercial Arbitration Rules of the American Arbitration Association.
Page 31 of36
f. Either party may apply to the arbitrator seeking injunctive relief until the
arbitration award is rendered or the controversy is otherwise resolved.
Either party also may, without waiving any remedy under this
agreement, seek from any court having jurisdiction any interim or
provisional relief that is necessary to protect the rights or property of
that party, pending the arbitrage tribunal's determination of the merits of
the controversy.
g. Consistent with the expedited nature of arbitration, each party will, upon
the written request of the other party, promptly provide the other with
copies of documents relevant to the issues raised by any claim or
counterclaim on which the producing party may rely in support of or in
opposition to any claim or defense. Any dispute regarding discovery, or
the relevance or scope thereof, shall be determined by the chair of the
arbitration panel, which determination shall be conclusive. All
discoveries shall be completed within 60 days following the appointment
of the arbitrators
h. The arbitrators shall award to the prevailing party, if any, as determined
by the arbitrators, all of its costs and fees. "Costs and fees" mean all
reasonable pre-award expenses of the arbitration, including the
arbitrators' fees, administrative fees, travel expenses, out-of-pocket
expenses such as copying and telephone, court costs, witness fees, and
attorneys I fees.
1. The award shall be in writing, shall be signed by a majority of the
arbitrators, and shall include a statement regarding the reasons for the
disposition of any claim.
20 NOTICES.
20.1 Addresses. All notices under this Lease shall be in writing, and shall be deemed
sufficiently served if hand delivered or sent by certified mail, postage prepaid, to the
recipient at the following address:
If to LESSOR:
1
Airport Manager
TOWN OF MARANA
13251 N. Lon Adams Road
Marana, Arizona 85653
.-
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Town Manager
TOWN OF MARANA
13251 N. Lon Adams Road
Marana, Arizona 85653
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Page 32 of36
and with a copy to:
Daniel J. Hochuli
Daniel J. Hochuli & Associates, P.C.
Town Attorney
220 E. Wetmore Road, Suite 110
Tucson, AZ 85705
If to LESSEE:
PIMA AVIATION, INC., c/o Gary Abrams
Marana Northwest Regional Airport
Leased Premises Office
11700 W. Avra Valley Road, #86
Marana, Arizona 85653
and with copies to:
PIMA AVIATION, INC.
P.O. Box 5367
Tucson, Arizona 85703
MARKB. RAVEN, Esq.
Law Offices of Raven & Awerkamp, P.C.
One South Church A venue
Suite 1600
Tucson, Arizona 85701-1612
20.2 Service. Service of any notice or demand by hand delivery shall be deemed
complete upon the date of delivery. Service of any notice or demand by certified mail shall
be deemed complete upon receipt.
20.3 Change of Address. Either party may change its address to such other addresses as
such party may designate to the other in writing from time to time.
21 REPORTS TO LESSOR.
21.1 Types of Reports Required. The following reports shall be submitted to LESSOR
in the manner and at the times as indicated below:
1
21.1.1 Monthly Based Aircraft. LESSEE shall provide to LESSOR, by the
fifteenth calendar day following the end of each calendar month a list including all
aircraft permanently occupying hangar, tie-down or other area within the Premises
under the control of the LESSEE as well as those aircraft which are expected to be
occupying any of the aforementioned areas for a cumulative total of sixty (60) days
if owner or entity maintains an Arizona residency or for a total ninety (90) days if
the owner or entity maintains a non-Arizona residency.
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Page 33 of 36
21.1.2 Fixed Rent. LESSEE shall by the fifteenth calendar day following the end
of each calendar quarter submit to LESSOR a quarterly statement containing in
detail the amounts and method of computation of the Fixed Rent to be paid in
advance. This report shall contain, as a minimum, (a) the total amount paid to
date, (b) the amounts paid for each quarter and (c) the unpaid balance remaining
over the term of this Lease.
21.1.3 Percent Rent. LESSEE shall submit a report, in sufficient detail to
determine Percent Rent, in accordance with the provisions and in the manner
prescribed in Section 3.2, including all subsections thereof.
21.1.4 Fuel Flowage. LESSEE shall by the fifteenth calendar day following the
end of each calendar quarter submit to LESSOR a quarterly statement in regard to
the types and amounts of fuels for which it took delivery at the Airport. This
report shall also contain the applicable computation of the Fuel Flowage Fee at the
rate and in the manner prescribed in paragraph 3.3.
21.1.5 Statement of Leasing Activity. LESSEE shall by the fifteenth calendar day
following the end of each calendar quarter submit to LESSOR a quarterly report in
accordance with the provisions as set forth in Section 4.3.
21.1.6 Tenant Occupancy. LESSEE shall by the fifteenth calendar day following
the end of each calendar quarter submit to LESSOR a quarterly report detailing the
occupancy of all structures under the control of LESSEE including but not limited
to "T" - hangars, Common hangars, storage facilities, tie down areas, shade ports
and/or offices.
21. 1.7 Rates and Fees. LESSEE shall by the fifteenth calendar day following the
end of each calendar quarter submit to LESSOR a quarterly report detailing the
rates and fees it intends to impose upon its customers for the following quarter.
This report shall apply, but not be limited, for fuel, hangar, shade port, storage,
office, land, apron, tie-down and aircraft rentals; instructional fees and
maintenance and repair rates, rentals and any other service with respect to which
LESSOR receives payments under this Lease. In the event an increase is needed,
then LESSEE shall notify LESSOR, in writing, of the increase no later than fifteen
calendars days following the day the increase becomes effective.
21.1.8 Report Format. Unless otherwise so stated the aforementioned reports and
statements shall be such form and format whereby in addition to paper media, those
lists, data and reports supplied shall also be accompanied by electronic data
consisting of diskette, either the 3 1/2" x 5" or ZIP, or compact disk in the IBM
compatible format. Where the information to be disseminated is of a list and/or
data type, the information shall be of a spreadsheet nature such that it can be
opened, read or translated and manipulated by the Excel Program, and where the
information to be disseminated is of a report in nature, the information shall be
capable of being opened, read or translated, and manipulated by the Microsoft
Word Program.
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Page 34 of 36
IN WITNESS WHEREOF, the parties have affixed their signatures below.
LESSOR:
TOWN OF MARANA, an Arizona Municipal Corporation
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APPROVED AS TO FORM:
Daniel J. Hochuli
As Town Attorney and not personally
STATE OF ARIZONA )
) ss:
County of Pima )
The foregoing instrument was acknowledged before me this 4'" day of September, 2001 by
Bobby Sutton, as Mayor of the Town of Marana.
~~
Notary Pub .
My Commission Expires:
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NOTARY PUBLIC
8T A TE OF ARIZONA
County of Pima
DIANE MANGIALARDI
"IV hpr;UIIIIIf181lt Expires 03-17-04
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Page 35 of 36
)
) ss.
County of Pima )
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The foregoing instrument was acknowledged before me this ~ day of Al:lgust, 2001 by Gary
L. Abrams, as President of Pima Aviation, Inc.
LESSEE:
PIMA AVIATION, INC., an Arizona corporation,
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. NoIaly PubHc StMe~AdIIlInI
PIma County
RobIn Crowe
ExpIres Jtkf 21. 2IIllI
STATE OF ARIZONA
r"K crfOA~V0 C Y\ ~ L ~ ~
Notary Public
My Commission Expires: ~dvlo I 2~
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Page 36 of36
EHXIBITS:
A. Map of area covered under FBO Lease.
B. Future Legal Description of the area covered under FBO Lease.
C. Structures which may have to be removed.
D. Public Areas included in Leasehold Premises.
E. Public Airport Facilities
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EXHIBIT B
F.B.O. LEASE
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PARCEL DESCRIPTION
(F.B.O. LEASE)
Prepared by
CARLSON-PUTT SURVEYORS, INC.
2251 N. Indian Ruins Road, Suite A
Tucson, Arizona 85715
Job No. 178-98A
Page 1 of 2 Pages
November 27,2001
That portion of Sections 9 and 10, Township 12 South, Range 11 East, Gila &
Salt River Meridian, Pima County, Arizona more particularly described as follows:
COMMENCING at the East Quarter corner of said Section 9;
THENCE along the Center Section line of said Section 9, South 890 27'
13" West, 1579.00 feet;
THENCE North 000 32' 47" West, 80.00 feet to the POINT OF BEGINNING;
THENCE continuing North 000 32' 47" West, 111.10 feet;
THENCE North 450 05' 45" East, 45.10 feet;
THENCE North 890 27' 13" East, 80.26 feet;
THENCE North 750 39' 12" East, 53.85 feet
THENCE North 61006' 51" East, 528.76 feet;
THENCE North 00032' 47" West, 72.57 feet to the beginning of a non-tangent
curve to the left having a radius of 43.98 feet, from which a radial line bears
North 390 14' 47" West;
THENCE 39.38 feet along the arc of said non-tangent curve to the left, through a
central angle of 510 18' 00" (the chord of which bears North 250 06' 13" East, a
distance of 38.07 feet) to a point of tangency;
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THENCE North 000 32' 47" West, 143.89 feet to the beginning of a tangent curve
to the left having a radius of 65.16 feet;
5
Page 2 of 2 Pages
Parcel Description
November 27, 2001
Job No. 178-98A
THENCE 66.68 feet along the arc of said curve to the left, through a central
angle of 580 37' 34" (the chord of which bears North 290 51' 34" West, a distance
of 63.81 feet) to a point of cusp from which a radial line bears South 30049' 39"
West;
THENCE North 45005'45" East, 361.72 feet;
THENCE North 89027'13" East, 678.46 feet;
THENCE North 45005'45" East, 271.90 feet;
THENCE South 44053'52" East, 475.01 feet;
THENCE South 45005'45" West, 370.78 feet;
THENCE South 44053'52" East, 778.10 feet to a point being 80.00 feet North of
the center of section line of said Section 10;
THENCE South 89024'35" West, along a line being 80.00 feet North of and
parallel with said center of section line, 778.79 feet to the West line of said
Section 10;
THENCE South 89027'13" West, along a line being 80.00 feet North of and
parallel with the center of section line of said Section 9, a distance of 80.00 feet;
THENCE North 00032'47" West, 125.00 feet;
THENCE South 89027'13" West, 300.00 feet;
THENCE South 00032'47" East, 125.00 feet to a point being 80.00 feet North of
the center of section line of said Section 9;
THENCE South 89027'13" West, along a line being 80.00 feet North of and
parallel with said center of section line, 1199.02 feet to the POINT OF
BEGINNING.
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Said parcel contains an approximate area of 1,473,279 square feet or 33.82
acres, more or less.
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AVRA VALLEY ROAD
AVRt. VALLEY ROAD~ (
EAST 1/4 CORNER
SECTION 9
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NOIJENBER 26. 2001
MARANA NORTHWEST REGIONAL AIRPORT
F.8.0. LEASE
TOTAL AREA: :t33.82 ACRES
CARLSOIHIITT SlllVEYORS
2251 N. INDIAN RUINS RD., SUITE A. TUCSON, AZ 85715
TELEPHONE: (520) 298-3878 FAX: (520)722-1122
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DRAWN
DATE
JOB No.
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APPROVAL OF LEGAL DESCRIPTION BASED UPON SURVEY PREPARED BY
CARLSON-PUTT SURVEYORS, INC. DATED NOVEMBER 27,2001
TOWN OF MARANA
LESSOR
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,
Mike Rein
Town Manager
PIMA AVIATION, INC.
an Arizona corporation
LESSEE
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