Duncan Aviation Lease of Battle Creek Airport Hangar

Lease Surrender Agreement
This lease surrender agreement (Agreement) is made August ____, 2017, among the
CITY OF BATTLE CREEK, a Michigan municipal corporation (Landlord), whose
address is 10 N Division Street, Battle Creek, Michigan 49014 and KELLOGG
COMPANY, a Delaware corporation (Tenant), whose address is One Kellogg Square,
P.O. Box 3599, Battle Creek, Michigan 49016.
RECITALS
A. Landlord and Tenant entered into a Lease Summary on March 9, 2010 and a
Lease, with a Lease Commencement date of December 1, 2010 (Lease), a copy of
which is attached to this Agreement.
B. The subject of the Lease is for what is commonly known as the Kellogg Hangar,
the underlying land and a surrounding approach area as identified more specifically in
the Lease. (Premises)
C. The Lease contained two rent components: Building Rent in paragraph 4.1 and
Land Rent, in paragraph 4.2.
D. The Lease is for a minimum term of nine years, expiring December 1, 2019 (Initial
Term), which was intended to extend the Lease minimally to the date where the
bonds used to finance the construction of a hangar/office building, a connector
building and various improvement to Hangar 1, were eligible to be called and paid
off.
E. Tenant wishes to surrender the Premises prior to the expiration of the Initial Term
which, according to a strict interpretation of the Lease, would require continued
Building Rent and Land rent from Tenant to Landlord through the Initial Term.
F. A third party, Duncan Aviation, Inc., is interested in entering into a new lease
agreement with Landlord for the Premises, which would provide payment toward the
bond obligations but would be in an amount less than what Tenant is currently
obligated to pay Landlord under the Lease.
G. Landlord is willing to accept Tenants early termination of the Lease and surrender
of the Premises for a lesser payment than would otherwise be pursuant to the express
terms set forth in this Agreement.
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The parties therefore agree as follows:
1. Tenant shall pay Landlord Three Hundred Twenty-One Thousand One Hundred
Forty-Three Dollars and Sixteen cents ($321,143.16) in check, payable beginning on
or before August 15, 2017 (Payment Date) (Surrender Payment). Upon payment of
the Surrender Payment, Tenant shall have no further obligation to pay Building Rent
or Land Rent to the Landlord.
2. Conditioned upon Landlords receipt of the full Surrender Payment on or before

Payment Date, (a) Landlord will accept Tenants surrender of the Premises on July
30, 2017 (Surrender Date); and (b) the Lease shall be deemed terminated, effective on
the Surrender Date. If the payment condition is not satisfied, this Agreement will be
deemed null and void, and the Lease will continue in full force and effect.
3. Conditioned on Landlords receipt of the Surrender Payment on or before the

Payment Date, effective on the Surrender Date, Landlord and Tenant release,
discharge, and acquit one another and all of their related or affiliated corporations,
partnerships, entities, individuals, successors, and assigns from all claims they have
or may have, arising out of or in any manner relating to the Lease, the Premises, the
condition of the Premises, or any other matter, known or unknown.
4. The parties acknowledge and represent that this Agreement is entered into freely
and voluntarily, without duress, undue influence, or misrepresentation.
5. This Agreement will not be modified or amended in any manner, except by written
agreement signed by all parties. This Agreement contains all the representations and
agreements of the parties concerning surrender, termination, and release. There are no
representations or agreements beyond those expressly set forth in this Agreement.
6. This Agreement will be governed by the laws of the State of Michigan and must
not be construed against any party.
7. This Agreement will bind all of the parties and their respective heirs, personal
representatives, successors, and assigns. It may be executed in counterparts and
delivered by fax or e-mail.
TENANT:
LANDLORD: KELLOGG COMPANY
CITY OF BATTLE CREEK

By: /s/________________________ By: /s/_____________________
Rebecca L. Fleury
Its: City Manager Its:
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CITY OF BATTLE CREEK
W.K. Kellogg Airport
15551 South Airport Road
Battle Creek, Michigan 49015
(269) 966-3470
Commercial Lease and Use

Agreement
Between the CITY OF BATTLE

CREEK and DUNCAN AVIATION,
INC.
W.K. Kellogg Airport (KBTL)
TABLE OF CONTENTS
1. INTRODUCTION ............................................................................................................. 1
1.1. Recitals ................................................................................................................. 1
2. INCORPORATION OF RECITALS .................................................................................. 1
3. DEFINITIONS .................................................................................................................. 1
4. PREMISES ...................................................................................................................... 1
4.1. Description ............................................................................................................ 1
4.2. Use ....................................................................................................................... 3
4.3. Prohibited Uses .................................................................................................... 3
4.4. Compliance ........................................................................................................... 3
5. TERM .............................................................................................................................. 4
5.1. Original ................................................................................................................. 4
6. RENTS AND FEES ......................................................................................................... 5
6.1. Initial Rents ........................................................................................................... 5
6.2. Rent Adjustments ................................................................................................. 5
6.3. Fees and Other Charges ...................................................................................... 5
6.4. Payments .............................................................................................................. 6
6.5. Late Charges ........................................................................................................ 6
7. OPTION TO PURCHASE ................................................................................................ 6
7.1. General Requirement ........................................................................................... 6
7.2. Timing and Notice ................................................................................................. 6
7.3. Purchase Price ..................................................................................................... 6
7.4. Structure ............................................................................................................... 7
8. IMPROVEMENTS ........................................................................................................... 7
9. LESSEES RIGHTS AND PRIVILEGES .......................................................................... 9
9.1. Use of the Airport .................................................................................................. 9
9.2. Ingress and Egress ............................................................................................... 9
9.3. Quiet Enjoyment ................................................................................................... 9
9.4. Fixtures and Equipment ...................................................................................... 10
9.5. Other ................................................................................................................... 10
10. LESSORS RIGHTS AND PRIVILEGES ....................................................................... 10
10.1. Rights Lessor reserves the following rights:..................................................... 10
10.2. Privileges Lessor shall have the following privileges: ...................................... 11
11. LESSEES OBLIGATIONS ............................................................................................ 12
11.1. Conduct .............................................................................................................. 12
11.2. Disturbance......................................................................................................... 12
11.3. Taxes, Assessments, and Fees .......................................................................... 12
11.4. Maintenance and Repair ..................................................................................... 12
11.5. Utilities ................................................................................................................ 12
11.6. Costs, Expenses, and Other Charges ................................................................ 13
11.7. Based Aircraft Report ......................................................................................... 13
11.8. On-Going Business. ............................................................................................ 13
11.9. Business Status. ................................................................................................. 13
11.10. Signage and Lighting .......................................................................................... 13
11.11. Special Events .................................................................................................... 13
11.12. Security ............................................................................................................... 13
Commercial Lease and Use Agreement (Duncan Aviation Kellogg Hangar) i

City of Battle Creek, W.K. Kellogg Airport
TABLE OF CONTENTS
12. REQUIRED FAA CLAUSES .......................................................................................... 14

12.1. Non-Exclusive Use ............................................................................................. 14
12.2. Non-Discrimination ............................................................................................. 14
13. DEFAULTS AND REMEDIES........................................................................................ 15
13.1. Default ................................................................................................................ 15
13.2. Remedies............................................................................................................ 16
14. TERMINATION BY LESSEE ......................................................................................... 18
15. CONDEMNATION OR EMINENT DOMAIN .................................................................. 18
15.1. General ............................................................................................................... 18
15.2. Total .................................................................................................................... 19
15.3. Substantial and Partial ........................................................................................ 19
16. FORCE MAJEURE ........................................................................................................ 19
17. NO WAIVER .................................................................................................................. 19
18. LICENSES, CERTIFICATES, AND PERMITS............................................................... 20
19. INSURANCE ................................................................................................................. 20
20. DAMAGE ....................................................................................................................... 21
21. INDEMNIFICATION....................................................................................................... 21
22. SUBLEASE ................................................................................................................... 22
23. SALE, ASSIGNMENT, OR TRANSFER ........................................................................ 22
24. ENCUMBRANCES ........................................................................................................ 23
25. MORTGAGE.................................................................................................................. 23
26. RELOCATION ............................................................................................................... 24
27. BOOKS AND RECORDS .............................................................................................. 24
27.1. Lessees Obligations ........................................................................................... 24
27.2. Lessors Rights ................................................................................................... 24
28. SURRENDER PREMISES ............................................................................................ 25
29. HOLDOVER POSSESSION .......................................................................................... 25
30. INDEPENDENT ENTITIES ............................................................................................ 25
31. BINDING EFFECT......................................................................................................... 25
32. SUBORDINATION......................................................................................................... 26
33. GOVERNING LAW AND VENUE .................................................................................. 26
34. PARAGRAPH HEADINGS ............................................................................................ 26
35. SEVERABILITY ............................................................................................................. 26
36. COUNTERPARTS ......................................................................................................... 26
37. MODIFICATION ............................................................................................................ 26
38. TIME OF ESSENCE ...................................................................................................... 26
39. ENTIRE AGREEMENT .................................................................................................. 26
40. NOTICES ...................................................................................................................... 27
41. REPRESENTATIONS AND WARRANTIES OF LESSEE ............................................. 27
EXHIBIT A DEFINITIONS.......................................................................................................
EXHIBIT B PREMISES ...........................................................................................................
EXHIBIT C RENT STUDY ......................................................................................................
Commercial Lease and Use Agreement (Duncan Aviation Kellogg Hangar) ii

COMMERCIAL LEASE AND USE AGREEMENT
This Commercial Lease and Use Agreement (Agreement) is made and entered into the 1st day of
__________, 2017 by and between the City of Battle Creek (City), a Michigan municipal corporation,
whose mailing address is P.O. Box 1717, Battle Creek, Michigan 49016 (Lessor) and Duncan
Aviation, Inc., a Nebraska corporation, whose mailing address is 3701 Aviation Road, Lincoln,
Nebraska 68524 (Lessee). Lessor and Lessee may hereinafter be referred to as the Parties.
1. INTRODUCTION
1.1. Recitals
1.1.1. Lessor is a Michigan municipal corporation duly organized and validly existing under
the laws of the State of Michigan with the power to carry on its business as it is now
being conducted under the statutes of the State of Michigan and the Charter of the
City of Battle Creek.
1.1.2. WHEREAS, Lessor is the owner and operator of the W.K. Kellogg Airport (Airport)
located in Battle Creek, Michigan;
1.1.3. WHEREAS, Lessor is the owner of certain real property located at the Airport and
described in Section 4.1 below (Premises);
1.1.4. WHEREAS, Lessee desires to lease the Premises from Lessor to engage in certain
Commercial Aeronautical Activities described in Section 4.2 below (Activities) at the
Airport; and
1.1.5. WHEREAS, Lessor desires to lease the Premises to Lessee and allow Lessee to
engage in such Activities at the Airport.
1.1.6. NOW, THEREFORE, for and in consideration of the conditions, obligations,
privileges, and agreements contained herein, and for other good and valuable
consideration, Lessor hereby leases the Premises to Lessee and Lessee hereby
leases the Premises from Lessor and the Parties hereby agree as follows:
2. INCORPORATION OF RECITALS
2.1.1. This Agreement is based on the preceding recitals which are incorporated herein by
reference.
3. DEFINITIONS
3.1.1. The words or phrases defined in Exhibit A, whenever used in this Agreement, shall
be construed as defined therein unless (from the context) a different meaning is
intended or unless a different meaning is specifically defined and more particularly
ascribed to the use of such words or phrases.
4. PREMISES
4.1. Description
4.1.1. Lessor hereby leases to Lessee, certain real property located at the Airport,
commonly known as the Kellogg Hangar (herein referred to as the Premises) and
more particularly shown in Exhibit B, attached hereto, made part hereof, and
incorporated herein by reference.
Commercial Lease and Use Agreement (Duncan Aviation Kellogg Hangar) 1

4.1.2. The leased Premises consist of the following elements and Improvements:
Approximate
Elements / Improvements Notes
Square Feet
Improved Land 26,448
Landside Vehicle 45,000 Includes sixty-nine (69) vehicle parking spaces
Parking/Driveways
Concrete Apron 57,400 Airside aircraft parking area
Asphalt Apron/Apron Access 12,000 Airside aircraft parking area, asphalt drive/parking
Corporate Hangar/Office 21,000 Includes hangar, office, support facilities, etc.
Executive Hangar/Shop/Office 5,200 Includes hangar, office, shop, support facilities,
etc.
Fuel Storage Facility 2,400 Two (2) twelve thousand (12,000) gallon fuel
tanks & associated equipment
TOTAL PREMISES 169,448
4.1.3. The address of the Premises is 16101 South Airport Road, Battle Creek, Michigan.
4.1.4. Except for those Improvements, if any, agreed to by the Parties as of the date of this
Agreement, no material, structural additional Improvements (including no
modifications, additions or deletions) (Alterations) shall be made to the Premises by
Lessee without the prior written approval of Lessor, which shall not be unreasonably
withheld, conditioned or delayed.
4.1.5. Lessee warrants and represents that it has carefully and completely examined and
inspected the Premises and fully understands its responsibilities and obligations with
respect to the Premises and this Agreement.
4.1.6. Lessee accepts the Premises in an as is, where is condition.
4.1.7. Lessor represents and warrants to Lessee that:
4.1.7.1. Lessor has full right and power to execute and perform this Agreement
and Lessor has the right and power to grant the estate demised herein.
4.1.7.2. Lessor owns fee simple title to the Premises, free and clear of any
restrictions, easements and covenants, highways, leases, severances,
agreements, conditions, limitations, mortgages and liens (except as
granted to lenders that have entered an SNDA with Lessee) and other
encumbrances which would materially interfere with the Activities. Lessee
acknowledges that there are FAA assurances, restrictions, obligations,
and covenants attached to the Premises and agrees that that there are
FAA assurances, restrictions, obligations, and covenants attached to the
Premises and Lessor represents and Lessee agree that they do not
materially interfere with the permitted Activities.
4.1.7.3. As of the Commencement Date, the Premises are in good working
condition and repair, reasonable wear and tear excepted, are free from
latent and patent defects and are suitable for Lessees Activities.
4.1.7.4. As of the Commencement Date all utility and mechanical systems are
established, connected to the Premises, and are in good working
condition and repair, reasonable wear and tear excepted.
4.1.7.5. As of the Commencement Date, the Premises are in compliance with, and
the Activities are permitted and expressly authorized under, all applicable
Legal Requirements, including those pertaining to zoning.

4.1.7.6. Lessor has not received any notice of, and has no knowledge of, existing
violations on the Premises, or any portion thereof.
4.1.7.7. Lessor has no knowledge of any persons or entities claiming a right of
possession to all or any portion of the Premises.
4.2. Use
4.2.1. In addition to Lessor leasing the Premises to Lessee, this Agreement grants Lessee
the right and privilege to use the Premises to engage (on a non-exclusive basis)
Activities at the Airport, subject to, and in accordance with, the terms and conditions
of this Agreement and the Airports Primary Management Compliance Documents.
The Premises may not be used for any other purposes or uses without the prior
written consent of Lessor, which consent may be withheld in the sole and absolute
discretion of Lessor.
4.2.2. Permitted Uses and Activities (Commercial Aeronautical Activities).
4.2.2.1 Lessee is required to use the Premises to provide the following
Commercial Aeronautical Activities: Aircraft Maintenance and all
administrative and operation activities incidental or accessory thereto.
4.2.2.2. Lessee has the option to use the Premises to provide the following
Commercial Aeronautical Activities: Aircraft Storage and all administrative
and operation activities incidental and accessory thereto. The Commercial
Aeronautical Activities identified in Section 4.2.2.1 and Section 4.2.2.2 of
this Agreement shall be performed in accordance with the Airports
Minimum Standards.
4.2.3. Lessees right and privilege to use the Premises for engaging in Commercial
Aeronautical Activities may be suspended or permanently revoked if Lessee does not
comply with the terms and conditions of this Agreement, the Primary Management
Compliance Documents (including the Minimum Standards), and Lessees
Commercial Operator Permit (herein referred to as the Permit) and such
noncompliance continues for fourteen (14) calendar days after written notice to
Lessee of such noncompliance.
4.3. Prohibited Uses
4.3.1. Lessee agrees not to use and/or occupy the Premises in any manner or purpose
contrary to this Agreement or any Regulatory Measure.
4.3.2. The provision of non-aeronautical products, services, or facilities (or any non-
aeronautical uses, occupancy, and/or purposes) on the Premises that are not
incidental or accessory to the Activities is expressly prohibited.
4.4. Compliance
4.4.1. Lessees use of the Premises and the Airport is subject to the following requirements:
4.4.1.1. As may be promulgated or amended from time to time, Lessee shall
comply with all:
4.4.1.1.1. Regulatory Measures,
4.4.1.1.2. Airport Sponsor Assurances and all other federal laws or
Federal Aviation Administration (FAA) regulations,
obligations, or guidance,
4.4.1.1.3. Airports Primary Management and Compliance
Documents,
4.4.1.1.4. Airport policies, standards, rules, and directives, and

4.4.1.1.5. Zoning, building, fire, safety, and other codes, ordinances,

statues, and other directives of any Agencies having
jurisdiction.
4.4.1.2. If any provision of this Agreement is found to be in conflict with Section
4.4, then the provision that establishes the higher or stricter standard shall
prevail. In addition, if an addition, if any of the matters described in
Section 4.4.1.1 are amended, altered, or modified following the date of
this Agreement and such amendment, alteration, or modification
materially interferes with Lessees use of the Premises or the business
conducted by Lessee on the Premises, Lessee shall be permitted to
terminate this Agreement on written notice to Lessor except where Lessee
has purchased the Option Improvements as provided in below Article 7, in
which case Lessee shall be obligated to remain in the Agreement until
such time as it sells the Improvements to a third party as provided in this
Agreement.
4.4.1.3. In the event of an alleged violation of this Section 4.4 (or initiation of an
investigation relating to same), Lessee shall promptly notify Lessor of the
alleged violation and describe the action(s) being taken to resolve it.
4.4.1.4. Any violation of (or failure to comply with) this Section 4.4 that continues
for fourteen (14) calendar days after written notice to Lessee of such
violation (or failure to comply) shall be construed as a default or breach of
this Agreement.
4.4.1.4.1. Lessor may deny access, consistent with Regulatory
Measures, to the Airport or the Premises to Lessee or its
representatives, officers, agents, employees, guests,
suppliers, vendors, invitees, contactors, subcontractors, or
any other entity for any default or breach of this Agreement
arising out of a violation of (or failure to comply with)
Section 4.4.
4.4.1.5. Lessee shall pay any penalties, fines, costs, and expenses for any
violation of (or failure to comply with) this Section 4.4 except where such
penalties, fines, costs, or expenses arising out of a violation of (or failure
to comply) attributable to facts or circumstances existing as of the date of
the of this Agreement set forth above without any additional actions by
Lessee.
4.4.1.6. If penalties or fines are levied against Lessor or costs or expenses are
incurred by Lessor relating to Lessees violation of (or failure to comply
with) Section 4.4, Lessee shall pay Lessor one hundred ten percent
(110%) of the penalty, fine, cost, or expense.
5. TERM
5.1. Original
5.1.1. The original term of this Agreement shall be for a period of twenty (20) years
commencing at 12:00 a.m. on the 1st day of August 2017 (Commencement Date)
and ending at 11:59 p.m. on the 31st day of July 2037 (Original Term), unless sooner
terminated in accordance with this Agreement.

6. RENTS AND FEES

6.1. Initial Rents
6.1.1. The annual rent for the Premises for the first year of the Original Term of this
Agreement shall be as follows:
6.1.1.1. Annual rent for all Improvements (excluding the associated land and
apron) in the amount of two hundred forty-six thousand six hundred forty
dollars ($246,640) and
6.1.1.2. Annual land and apron rent in the amount of fifty thousand dollars
($50,000).
6.2. Rent Adjustments
6.2.1. Throughout the Original Term of this Agreement, the annual rents shall be adjusted
as follows:
6.2.2. Consumer Price Index
6.2.2.1. The annual rents shall be adjusted on an annual basis beginning at the
start of the second year of this Agreement, between each Rent Study
(outlined in Section 6.2.3 of this Agreement) based on the percentage
change in the Consumer Price Index (CPI).
6.2.2.2. CPI shall mean the Consumer Price Index for All Urban Consumers for
the Midwest Region published by the United States Department of Labor,
Bureau of Labor Statistics.
6.2.2.3. If a substantial change is made in the method by which the CPI is
determined, the CPI shall be adjusted to the figure that would have
resulted had no change occurred in the manner of determining the CPI. In
the event that the CPI (or a successor or substitute index) is not available,
a reliable governmental or other nonpartisan publication evaluating the
information previously used in determining the CPI shall be used instead
of the CPI.
6.2.2.4. Data for the twelve (12) month period prior to the first day of the Fiscal
Year following execution of this Agreement shall be utilized as the base
year. All rents shall be adjusted using the percentage change in the CPI,
which shall be calculated using the following formula: CPI (at the time of
adjustment) minus CPI (at the time of the last adjustment) divided by CPI
(at the time of the last adjustment).
6.2.2.5. In no event shall rents established under this Section 6.2.2 be less than
the rents paid during the immediately preceding year. Further, in no event
shall annual adjustment to rents under this Section 6.2.2 exceed three
percent (3%), on a non-cumulative basis.
6.2.3. Rent Study
6.2.3.1. The annual rents shall be adjusted every fifth (5th) year and every five (5)
years thereafter to Market Rent.
6.2.3.2. Adjustments shall be made based on the findings of a Rent Study. The
process delineated in Exhibit C shall be used to determine Market Rent.
6.3. Fees and Other Charges
6.3.1. Lessee shall pay applicable fees and other charges identified in the Citys Fee, Bond
and Insurance Schedule (Schedule) which are subject to change from time to time
based upon resolutions of the Battle Creek City Commission amending the Schedule
or in accordance with the Airports General Aviation Leasing/Rents and Fees Policy,
to Lessor when due and owing if the specific fee is not addressed in the Schedule.

6.4. Payments
6.4.1. Payment of rents, fees, and other charges shall be made promptly without notice or
demand, in legal tender of the United States of America. Payments shall be made by
check or money order, payable to the City of Battle Creek. Payments shall be
delivered or mailed to the W.K. Kellogg Airport at 15551 South Airport Road, Battle
Creek, Michigan 49015 or to such other location as may be directed in writing by
Lessor. Payments shall be made without any abatement, deductions, reductions,
offsets, or counterclaims of any kind, except as otherwise provided herein.
6.4.1.1. Payment of rent shall be made by Lessee to Lessor monthly (in
installments equal to one-twelfth (1/12) of the annual rent) in advance on
or before the first (1st) day of each month. The rent for any partial month
shall be prorated.
6.4.1.2. Payment of fees and other charges shall be made by Lessee to Lessor
monthly on or before the tenth (10th) day of each month for the previous
month.
6.5. Late Charges
6.5.1. A late charge (as identified in the Schedule) shall be automatically added to any
rents, fees, or other charges not received by Lessor by the close of business five (5)
calendar days after due and owing. Additional late charges shall be imposed for each
thirty (30) calendar day period payment remains due and owing. Late charges shall
become part of the rents, fees, and other charges due and owing to Lessor.
6.5.2. In addition to late charges, Lessor shall be entitled to interest at the State of Michigan
judgment rate plus all costs and expenses incurred by Lessor to collect (or attempt to
collect) amounts past due, including without limitation, reasonable attorney and court
fees, costs, and expenses.
7. OPTION TO PURCHASE
7.1. General Requirement
7.1.1. If Lessee is not then in default or breach under this Agreement, on or after the 1st day
of July 2018, Lessee shall have the option and right to purchase (herein referred to
as the Option) the Improvements situated on the Premises (herein referred to as the
Option Improvements).
7.2. Timing and Notice
7.2.1. Lessee may exercise the Option by written notice to Lessor given no less than sixty
(60) calendar days prior to the Lessees desired closing date (herein referred to as
the Closing Date), which may not take place until on or after the 1st day of July
2018.
7.2.2. The Option Improvements shall include the following: (a) 160 x 120 Corporate
Hangar/office complex, landside vehicle parking lot, security fencing, one (1) non-
electric gate, two (2) electric gates and hardware; (b) 60 x 130 Executive Hangar
and connector building; and (c) fuel storage facility with two (2) twelve thousand
(12,000) gallon above ground fuel tanks and dispensing equipment.
7.3. Purchase Price
7.3.1. The purchase price for the Option Improvements (herein referred to as the Purchase
Price) upon exercise of the Option shall be an amount equal to two million three
hundred thousand dollars ($2,300,000). At the closing of the purchase of the
Improvements, Lessee shall be given credit against the Purchase Price equal to
ninety-five percent (95.0%) of that portion of rent paid pursuant to Section 6.1.1.1 up
to the Closing Date.

7.4. Structure
7.4.1. If this Option is exercised, the purchase and sale of the Option Improvements shall
be made in accordance with the following terms and conditions:
7.4.1.1. At Closing, Lessor shall convey good and marketable title to the Option
Improvements free and clear of all mortgages, liens, claims, pledges,
security interests and other encumbrances by warranty Bill of Sale.
Lessee shall pay the Purchase Price to Lessor.
7.4.1.2. All real estate taxes and special assessments, if any, shall be prorated to
the Closing Date in accordance with the calendar year method. As such,
real estate taxes and special assessments, if any shall be deemed to
cover the calendar year in which they become due and payable.
Notwithstanding the foregoing, Lessor shall receive no credit for real
estate taxes and special assessments paid by Lessee pursuant to this
Agreement.
7.4.1.3. The closing of title (herein referred to as the Closing) shall occur within
sixty (60) calendar days from the date the Option is exercised, but in no
event later than the Closing Date.
7.4.1.4. The term of this Agreement shall be twenty-five (25) years, commencing
as of the Closing Date.
7.4.1.5. Upon the Closing, this Agreement shall immediately terminate with
respect to the Option Improvements; Lessee shall have no further liability,
responsibility, or obligation to Lessor under this Agreement with respect to
the Option Improvements; Less shall have no further obligation under
Section 6.1.1.1 or otherwise for the continued payment of rent attributable
to the Option Improvements; and Lessee shall continue paying the land
and apron rent described in Section 6.1.1.2 as of the Closing Date and
said land and apron rent shall be adjusted in accordance with this
Agreement; provided, however, that any Rent Study conducted pursuant
to Section 6.2.3 shall be performed with respect to and shall apply only to
the land and apron rent described in Section 6.1.1.2.
7.4.1.6. All other terms and conditions of this Agreement shall continue as set
forth herein.
8. IMPROVEMENTS
8.1.1. Except where Lessee has closed on the purchase of the Option Improvements as
provided in Section 7, and except for those Alterations, if any, agreed to by the
Parties as of the date of this Agreement, Lessee shall not make any Alterations to the
Premises without the prior written consent of Lessor, which consent shall not be
unreasonably withheld, conditioned or delayed.
8.1.1.1. Prior to making any Alterations to the Premises, Lessee shall submit to
Lessor for its review and approval detailed plans, designs, and
specifications, which shall be prepared by a registered architect and
approved by a registered engineer, both licensed in the State of Michigan.
Said plans shall include cost estimates, a project schedule, and a list of
the contractors selected by Lessee. Lessee shall also complete and
include Federal Aviation Administration 7460-1 Notice of Proposed
Construction Alterations form.
8.1.1.2. Any Alterations made to the Premises without the prior written consent of
Lessor may be removed by Lessor or Lessor may require that Lessee
modify the Alterations to Lessors satisfaction.

8.1.1.2.1. If Lessee fails to comply with such notice within thirty (30)
calendar days, Lessor may affect the removal or
modification of said Improvements and Lessee shall pay
one hundred ten percent (110%) of the costs and expenses
thereof within thirty (30) calendar days upon receipt of an
invoice from Lessor.
8.1.2. Regardless of whether Lessee has purchased the Option Improvements, any
Alterations made to the Premises shall be compatible with the Airport and associated
airspace, and comply with 14 CFR Part 77 Safe, Efficient Use, and Preservation of
the Navigable Airspace.
8.1.3. The Alterations shall be made: (1) in conformance with the approved plans, designs,
and specifications, (2) in accordance with the approved schedule, and (3) in
compliance with Section 4.4.
8.1.4. Lessee shall procure all required building, fire, safety, and other permits from federal,
state, and local Agencies having jurisdiction regardless of whether Lessee has
purchased the Option Improvements as provided in Section 7.
8.1.5. Within one hundred twenty (120) calendar days of Lessors written approval, Lessee
shall commence work in conformance with the approved plans, designs, and
specifications and any other terms and conditions of Lessors approval.
8.1.6. No work shall be performed until evidence of required funding (equal to one hundred
percent (100%) of the costs and expenses of the Improvements) satisfactory to
Lessor has been provided.
8.1.7. No work shall be performed until evidence of required insurance satisfactory to
Lessor has been provided.
8.1.8. Lessee shall be fully liable for any damages relating to the work on or associated with
the Alterations.
8.1.9. All materials and supplies shall be delivered to the Premises via Airport access points
and/or routes approved by Lessor.
8.1.10. Notwithstanding circumstances beyond Lessees control, all work shall, unless
otherwise agreed by the Parties, be completed in accordance with the schedule and
shall be free and clear of liens for labor and/or material.
8.1.10.1. If the work is not completed in accordance with the schedule (or
Improvements have only been partially completed), then no later than
sixty (60) calendar days following Lessees receipt of notice from Lessor,
Lessee shall either remove or demolish the improvements that have been
made and, failing to do so the Lessor, at Lessors option, may remove or
demolish the Improvements.
8.1.11. Lessee shall indemnify Lessor, as required in this Agreement.
8.1.12. Lessee shall pay all claims lawfully made against it by its contractors, subcontractors,
material men, and workmen, and all claims lawfully made against it by other third
persons resulting from, caused by, arising out of, or associated with the performance
of any work, and shall cause its contractors, subcontractors, material men, and
workmen to pay all such claims lawfully made against them. Lessee shall also pay all
liens held by contractors, subcontractors, material men, and workmen and provide
proof of payment to Lessor.
8.1.12.1. Nothing in this Agreement shall be construed, in any way, to constitute
consent to the creation of any lien or claim against the Premises or the
Airport.

8.1.13. Upon completion of Alterations, Lessee shall provide a complete set of as-built plans
and specifications in digital (CAD) format to Lessor.
8.1.14. Upon expiration of the term or any other termination that is not related to a default or
a breach of this Agreement, at Lessors option, the Lessor will;
8.1.14.1. purchase the Option Improvements at the unamortized value (based on a
thirty (30) year amortization schedule);
8.1.14.2. permit Lessee to enter into a new agreement with new terms; or
8.1.14.3. permit Lessee to sell the Option Improvements (to the extent owned by
Lessee) to a third party (such lessee will be required to enter into a new
land rent agreement with the Lessor);
8.1.14.4. or require Lessee to return Premises to its original condition.
9. LESSEES RIGHTS AND PRIVILEGES
9.1. Use of the Airport
9.1.1. Lessee is allowed to use the Airport and its appurtenances together with all Public
Areas and facilities, in common with others, on a non-exclusive basis and subject to
the terms and conditions of this Agreement.
9.1.2. Lessee shall be liable (and shall reimburse Lessor) for all reasonable costs and
expenses incurred by Lessor for the repair of any damage caused by Lessee to the
Airport and its appurtenances and/or Public Areas or facilities, excluding ordinary and
reasonable wear and tear.
9.2. Ingress and Egress
9.2.1. Lessee, its representatives, officers, agents, Employees, guests, suppliers, vendors,
invitees, contactors, subcontractors, and shall have the right of ingress and egress to
and from the Premises. However, if the privileges granted by this provision adversely
affect or conflict with others, Lessor shall have the right to restrict and/or limit the
manner in which such ingress and/or egress may be exercised. This right to Ingress
and Egress shall include the use of two driveways on the Southern portion of the
Premises off Territorial Road. Lessee shall also be entitled to the use of the Gate
pedestal with card reader located on the driveway off Territorial Road.
9.2.2. Lessee shall be responsible for the repair and maintenance, including snowplowing
at a frequency as designated by Lessor, of that portion of the Ingress and Egress as
is identified on Exhibit B, including that described in Section 9.2.1 herein. However,
Lessor shall plow the aircraft apron as depicted on Exhibit B and shall invoice Lessee
for that service, which Lessee shall pay within thirty (30) calendar days from the date
on the invoice.
9.3. Quiet Enjoyment
9.3.1. Subject to the terms and conditions of this Agreement, Lessee shall peacefully and
quietly have, hold, and enjoy the Premises free from hindrance or interruption by
Lessor. Lessee agrees temporary inconveniences such as noise, disturbances, traffic
detours and the like resulting from, caused by, arising out of, or associated with
Lessors construction, maintenance, and/or repair of Airport improvements or special
events, including, but not limited to, Field of Flight and Balloon Fest, shall not
constitute a breach of this section; provided, however, if Lessee provides to Lessor in
writing specific reasons Lessee believes the temporary inconveniences previously
described would materially interfere with Lessees use of the Premises, the Lessor
shall work in good faith with Lessee to lessor or alleviate the inconveniences but shall
under no circumstances have an obligation to cancel the work or event.

9.4. Fixtures and Equipment

9.4.1. In conformance with this Agreement, Lessee may install fixtures on the Premises and
use equipment, tools, machinery, or other items of personal Property in connection
with the use of the Premises and/or Activities authorized in this Agreement.
Notwithstanding Lessors rights and remedies upon default or breach of this
Agreement, Lessee shall retain title to its personal Property.
9.4.2. Lessor shall have no liability or responsibility for any theft, misappropriation, or
damage to any personal Property belonging to Lessee or others.
9.4.3. Lessee shall be entitled to remove its personal Property from the Premises. If a
facility or Improvement is damaged from removal of personal Property, it shall be
restored/repaired by Lessee at its sole cost and expense.
9.5. Other
9.5.1. Unless otherwise stated in this Agreement, Lessees rights and privileges are limited
strictly to the Premises, no other rights or privileges are being granted by Lessor to
Lessee for any other premises, uses or any other properties owned or leased by
Lessee.
9.5.2. Unless otherwise stated, this Agreement does not: (a) modify any other agreements
between the Parties or (b) extend any rights or privileges to Lessee in any other
agreements between the Parties.
10. LESSORS RIGHTS AND PRIVILEGES
10.1. Rights Lessor reserves the following rights:
10.1.1. Nothing contained in this Agreement shall be construed, in any way, to limit the use
of the Airport by Lessor, its Police Department, Fire Department, FAA or other
regulatory agencies performing official duties at the Airport, or others.
10.1.2. Lessor reserves the right to designate specific areas of the Airport to be used for
specific purposes and/or conducting/engaging in specific activities.
10.1.3. Lessor reserves the right to develop and make any improvements, repairs,
restoration, or replacement on, at, or to the Airport it deems necessary. Lessor will
provide advance notice of the date and time of such projects. Lessor shall not be
obligated or required to reimburse or compensate Lessee for any inconvenience that
may result from, arise out of, or be associated in any way with such projects.
10.1.4. Lessor (and its representatives, officers, officials, employees, agents, and volunteers)
shall not be responsible for loss, injury, or damage to persons or Property at the
Airport resulting from, caused by, arising out of, or associated in any way with any
acts of nature, natural disasters, or illegal activity.
10.1.5. During time of war or national emergency, Lessor shall have the right to enter into an
agreement with the United States Government for military use of part or all of the
Airport and its facilities. If any such agreement is executed, any agreement between
Lessor and Lessee, insofar as it is inconsistent with the agreement between Lessor
and the United States Government, shall be suspended, without any liability to
Lessor; provided, however, that if such agreement materially interferes with the right,
title or interest of Lessee to the Premises or Option Improvements, or with Lessees
use and occupancy of the Premises or Option Improvements for the Activities,
Lessee shall have the right to terminate this Agreement on written notice to Lessor.
10.1.6. Lessor will not relinquish the right to take any action Lessor considers necessary to
protect the aerial approaches of the Airport against obstruction or to prevent any
person from erecting or permitting to be erected any facility or structure which might
limit the usefulness of the Airport or constitute a hazard to Aircraft.

10.1.7. Lessor will not waive any sovereign, governmental, or other immunity to which Lessor
may be entitled nor shall any provision of this Agreement or any other agreement
with Lessor be so construed.
10.1.8. Lessor will not submit to the laws of any state other than those of the State of
Michigan.
10.1.9. Lessor is under no obligation to obtain or provide financing or funding, make any
improvements to the Airport, and/or facilitate any development proposed by Lessee
or others aside from fulfilling its obligations under the Airport Sponsor Assurances or
comply with Regulatory Measures.
10.1.10. Lessor reserves the right to take such actions as it may deem necessary to protect
the safety and security of the public.
10.1.11. Lessor shall have no responsibility or liability to furnish any services to Lessee,
however Lessee may request the provision of services and if agreed upon, shall pay
Lessor the amount of Compensation agreed upon by the Parties.
10.1.12. Nothing contained in this Agreement shall be construed, in any way, as restricting or
limiting the powers of Lessor to fully exercise its governmental functions and/or
authority or fulfill its obligations under the Airport Sponsor Assurances or comply with
Regulatory Measures.
10.2. Privileges Lessor shall have the following privileges:
10.2.1. Access to the Premises
10.2.1.1. Upon advanced written notice, Lessor shall have the right to enter in,
upon, or under the Premises during regular business hours, with forty-
eight (48) hours prior written notice for the purpose of inspecting the
condition of the Premises and ensuring Lessees compliance with the
terms and conditions of this Agreement including, but not limited to,
Section 4.4. Lessor agrees that it will avoid unreasonable interference
with Lessees operation in connection with any such entry.
10.2.1.2. Lessor shall have the right to enter the Premises at any time in the event
of an apparent or actual emergency (e.g., fire, flood, or failure of an
Improvement, utility, etc.).
10.2.2. Performance of Acts
10.2.2.1. All acts performable under this Agreement by Lessor may, at the option of
Lessor and without right of objection by Lessee, be performed by a
representative of Lessor.
10.2.2.2. Lessor shall be responsible for the conduct of its representatives, officers,
officials, employees, agents and volunteers on the Premises.
10.2.3. Exercising Rights
10.2.3.1. No exercise of any rights reserved by Lessor pursuant to the terms and
conditions of this Section 10.2 shall be deemed or construed, in any way,
as grounds for any abatement of rents, fees, or other charges nor serve
as the basis for any claim or demand for damages of any nature
whatsoever.

11. LESSEES OBLIGATIONS

11.1. Conduct
11.1.1. Lessee shall be responsible for the conduct, demeanor of its representatives,
officers, officials, employees, agents, and volunteers and guests on the Premises.
Upon receipt of a written complaint, Lessee shall take action to immediately address
and/or resolve the complaint.
11.1.2. Lessees personnel shall cooperate with Lessor, its representatives or Agencies in
dealing with emergencies on the Premises and at the Airport.
11.2. Disturbance
11.2.1. Lessee shall conduct its Activities in an orderly and proper manner so as not to
disturb, or interfere with others and will not in any manner interfere with Aircraft
operations or create a hazard to Aircraft, other lessees or the public.
11.2.2. Lessee shall not cause or permit to be caused any act that would adversely affect the
environment or violate environmental Regulatory Measures.
11.3. Taxes, Assessments, and Fees
11.3.1. Lessee shall pay and discharge all taxes, assessments, and other fees, without offset
or abatement, whether general or special, ordinary or extraordinary, charged by any
government or quasi-governmental entity during the term of this Agreement.
11.4. Maintenance and Repair
11.4.1. Lessee shall, at its sole risk, cost, and expense, diligently keep and properly maintain
and repair the Premises, the Ingress and Egress as provided in Section 9.2 herein,
the Improvements including pavements, utilities, and personal Property in good
condition and in a clean, neat, and orderly state.
11.4.1.1. Pavement maintenance shall include, but not be limited to, crack repair,
spalling repair, and slurry seal (asphalt only).
11.4.1.2. Lessor shall, at its sole risk, cost, and expense, replace pavements at the
end of the pavement life, unless such pavements have been purchased by
Lessee as part of the Option Improvements.
11.4.1.3. Lessor shall be responsible for snow removal on aprons (within 10 feet of
structures and buildings) on the Premises and will bill Lessee for the
associated snow removal costs.
11.4.2. In the event Lessee fails to comply with Section 11.4.1, Lessor may notify Lessee
and Lessee may dispute or correct the condition within fourteen (14) calendar days of
Lessors written notice. If Lessee disputes within that time but Lessor determines that
the dispute is not valid, then Lessor shall notify Lessee of such determination and
Lessee shall have fourteen (14) calendar days from the notice of invalidity of the
dispute to correct the condition. If Lessee does not dispute or correct within fourteen
(14) calendar days, or if Lessor has determined the dispute is invalid and the
correction is not made, then Lessor may enter the Premises and perform any
necessary maintenance, repair, restoration, replacement, or cleaning and Lessee
shall pay one hundred ten percent (110%) of the costs and expenses thereof to
Lessor within fourteen (14) calendar days upon receipt of an invoice from Lessor.
11.5. Utilities
11.5.1. Lessee shall pay all fees and charges due and owning for all utilities (including
connections) serving the Premises. Such services shall include, but not be limited to:
water, gas, electricity, sewer, telephone, internet, etc.

11.6. Costs, Expenses, and Other Charges

11.6.1. Lessee shall pay all other costs, expenses, and other charges of every kind and
nature whatsoever relating to the Premises and/or Lessees Activities during the term
of this Agreement.
11.7. Based Aircraft Report
11.7.1. Lessee shall maintain and furnish on or before the tenth (10th) of January each year
(or upon request of Lessor) a report identifying all Based Aircraft on the Premises.
The report shall identify the aircraft owner, contact information, registration number,
year, make, and model of the Aircraft. Lessee shall immediately provide an updated
report of any changes to the Based Aircraft report.
11.8. On-Going Business.
11.8.1. Lessee shall be responsible for maintaining an on-going business at the Airport and
complying with the PMCDs, currently in effect or as may be amended, throughout the
term of this Agreement.
11.9. Business Status.
11.9.1. Lessee shall notify Lessor immediately of any changes to Lessees business or
corporate structure or status or if Lessees authorization to conduct business at the
Airport, in the State, or in the United States will be (or has been) suspended or
revoked.
11.10. Signage and Lighting
11.10.1. All exterior signage must be approved in writing, which approval shall not be
unreasonably withheld; so long as it is in conformance with the Citys sign and zoning
ordinances, applicable covenants, FAA regulations and Airport Rules and
Regulations by the Transportation Director and shall conform to Section 4.4.
11.11. Special Events
11.11.1. Lessee shall not conduct or hold Special Events or filming activities without obtaining
the prior written consent of Lessor. Prior written consent for filming activities shall not
be unreasonably withheld so long as they are in compliance with City ordinances,
applicable covenants, FAA regulations and Airport Rules and Regulations.
11.12. Security
11.12.1. Lessee shall comply with the Citys security requirements and/or best practices.
Lessee shall designate a responsible person for the coordination of security
procedures and communications and provide point-of-contact information to the City
of the primary and secondary contacts including twenty-four (24) hour telephone
numbers.
11.12.2. Lessee shall develop and maintain a Security Plan. Security Plan shall be available
for the City to review no later than thirty (30) calendar days prior to commencement
of Activities and it shall be updated any time changes are made. Upon request,
Lessee must demonstrate compliance with all relevant and applicable TSA
requirements.
11.12.3. All fencing, doors, gates, lighting, and locks which are part of the Premises must be
maintained and kept in good working conditions. Gates or doors which provide
access to Airside must remain closed, locked, and secured except when in use.

12. REQUIRED FAA CLAUSES

12.1. Non-Exclusive Use
12.1.1. Lessor hereby grants Lessee the non-exclusive use of the Airport (together with all
appurtenances thereunto) in common with Lessor and others, except such land
and/or Improvements specifically leased herein and as may be leased by Lessor to
others.
12.1.2. This Agreement and all of the provisions hereof shall be subject to whatever right the
United States Government has now or may have in the future or may acquire
affecting the control, operation, regulation and taking over of the Airport or the
exclusive or non-exclusive use of the Airport by the United States during the time of
war or national emergency.
12.1.2.1. If any such agreement is executed, the provisions of this Agreement shall
be subordinate to the provisions of any agreement between Lessor and
the United States relative to the Airport.
12.1.3. It is clearly understood by Lessee that no right or privilege has been granted which
would operate to prevent any person, firm, or corporation operating Aircraft at the
Airport from performing any services on its own Aircraft with its own Employees
(including but not limited to, fueling, maintenance, and repair) that it may choose to
perform.
12.2. Non-Discrimination
12.2.1. Lessee, for itself, its heirs, successors, and assigns, as a part of the consideration
hereof, does hereby covenant and agree that in the event Improvements are
constructed, maintained, or otherwise operated on the Premises described in this
Agreement for a purpose for which a Department of Transportation (DOT) program or
activity is extended, Lessee shall maintain and operate such Improvements in
compliance with all other requirements imposed pursuant to 49 CFR Part 21,
Nondiscrimination in Federally Assisted Programs of the DOT, and as said
Regulations may be promulgated or amended from time to time.
12.2.2. Notwithstanding any other provision of this Agreement, during the performance of this
Agreement, Lessee, for itself, its heirs, successors, and assigns, as part of the
consideration of this Agreement does hereby agree, as a covenant running with the
land, that: (a) no person on the grounds of race, color, religion, sex, familial status or
national origin shall be excluded from participation in, denied the benefits of, or
otherwise be subjected to discrimination in the use of the Premises; (b) in the
construction of any improvements on, over, or under the Premises, no person on the
grounds of race, color, religion, sex, familial status or national origin shall be
excluded from participation in, or denied the benefits of, such activities, or otherwise
be subjected to discrimination; (c) in the breach of any of the above nondiscrimination
covenants, Lessor shall have the right to terminate this Agreement and to reenter and
repossess the Premises and hold the same as if this Agreement had never made or
issued. This provision does not become effective until the procedures of 49 CFR Part
21 have been followed and completed, including expiration of appeal rights; (d)
Lessee, for itself, its heirs, successors, and assigns, as a part of the consideration
hereof, does hereby agree as a covenant running with the land that in the event
Improvements are constructed, maintained, or otherwise operated on the Premises
for a purpose for which a DOT program or activity is extended or for another purpose
involving the provision of similar services or benefits, Lessee shall maintain and
operate such improvements and services in compliance with all other requirements
imposed pursuant to 49 CFR Part 21, Nondiscrimination in Federally Assisted
Programs of the DOT, and as said Regulations may by amended.

12.2.3. Lessee will comply with pertinent statues, Executive Orders and such rules as are
promulgated or amended from time to time to assure that no person shall, on the
grounds of race, creed, color, national origin, sex, age, or handicap be excluded from
participating in any activity conducted with or benefiting from federal assistance. This
provision obligates Lessee or its transferee for the period during which federal
assistance is provided, or is in the form of personal Property or real Property or
interest therein or structures or Improvements thereon. In these cases, this provision
obligates Lessee or any transferee for the longer of the following periods:
12.2.3.1. the period during which the Property is used by the sponsor or any
transferee for a purpose for which federal assistance is extended, or for
another purpose involving the provision of similar services or benefits, or
12.2.3.2. the period during which Lessor or any transferee retains ownership or
possession of the Property.
12.2.4. In the case of contractors, this provision binds the contractors from the bid solicitation
period through the completion of the contract.
12.2.5. Lessee agrees it will practice non-discrimination in its activities and will provide
Disadvantaged Business Enterprise (DBE) participation as required by the sponsor,
in order to meet Lessors goals, or required by the FAA.
12.2.6. Lessee shall not discriminate in any manner against any employee or Applicant for
employment because of political or religious opinion or affiliation, race, creed, color,
national origin, sex, age, or disability and further, Lessee shall include a similar
clause in all subcontracts. Lessee agrees Lessor has the right to take such action
against Lessee as the government may direct to enforce this provision of this
Agreement.
12.2.7. Lessee shall not discriminate on the basis of his or her actual or perceived race,
color, religion, national origin, sex, age, height, weight, marital status, physical or
mental disability, family status, sexual orientation, or gender identity. Breach of these
obligations as set out in Chapter 214 of Battle Creek ordinances shall be considered
a material breach of this contract.
12.2.8. Lessee shall insert Section 12.2.1 through Section 12.2.7 in any Sublease approved
by the City through which said Lessee grants a right or privilege to any person, firm,
or corporation to render accommodations to the public on the Premises.
13. DEFAULTS AND REMEDIES
13.1. Default by Lessee
13.1.1. In addition to the defaults and breaches identified in this Agreement, the occurrence
of any one or more of the following events shall constitute a default or breach:
13.1.1.1. The filing by Lessee of a voluntary petition in bankruptcy.
13.1.1.2. The assignment of substantially all of Lessees assets for the benefit of
Lessees creditors.
13.1.1.3. A court making or entering any decree or order:
13.1.1.3.1. adjudging Lessee to be bankrupt or insolvent,
13.1.1.3.2. approving a properly filed petition seeking reorganization of
Lessee or an arrangement under the bankruptcy laws or
any other applicable debtors relief law or statute of the
United States or any state thereof,
13.1.1.3.3. appointing a receiver, trustee, or assignee of Lessee in
bankruptcy or insolvency or for its Property, or

13.1.1.3.4. directing the winding up or liquidation of Lessee and such

decree or order shall continue for a period of sixty (60)
calendar days.
13.1.1.4. The filing of any lien against the Premises resulting from any act, error,
omission, or negligence of Lessee which is not discharged or contested in
good faith as determined by Lessor by proper legal proceedings within
fourteen (14) calendar days of receipt of actual notice by Lessee, unless
Lessee posts a bond within this time period equal to the amount of the
lien.
13.1.1.5. The voluntary abandonment by Lessee of the Premises or Lessees
failure to maintain the on-going Commercial Aeronautical Activity on the
Premises for a period of thirty (30) calendar days or more, notwithstanding
circumstances beyond Lessees control.
13.1.1.6. The transfer of Lessee's interest herein by other operation of law.
13.1.1.7. Lessee becomes in arrears in the payment of the whole or any part of the
amount(s) agreed to be paid for a period of fourteen (14) calendar days
after the time such payments become due and owing. In this event, no
written or other notice of default or breach shall be required.
13.1.1.8. The falsification by Lessee of any of its records so as to deprive Lessor of
any of its rights, privileges, rents, fees, or other charges under this
Agreement or any other agreement between the Parties.
13.1.1.9. The failure by Lessee to perform any of the conditions, obligations,
privileges, and agreements contained herein or in any other agreement
between the Parties where the failure continues for a period of fourteen
(14) calendar days after written notice from Lessor; provided, however,
that if such failure cannot reasonably be cured within fourteen (14)
calendar days, Lessee will not be in default so long as Lessee begins to
cure such fourteen (14) calendar day period and diligently attempts to
cure, which determination shall be in the sole and reasonable discretion of
Lessor.
13.1.1.10. A sale of stock in Lessees company which divests the present owners of
controlling interest without the written approval of the Lessor.
13.1.1.11. The sale, assignment, or transfer or the attempted sale, assignment, or
transfer of this Agreement by Lessee. Negotiations by Lessee for the sale,
assignment, or transfer of this Agreement or Lessees rights hereunder,
including its rights to the Option Improvements, shall not be construed as
an "attempted transfer.
13.1.1.12. Any default or breach of this Agreement by Lessee shall constitute a
default or breach by Lessee of all other Agreements between the Parties.
13.2. Remedies of Lessor
13.2.1. In the event a default or breach of this Agreement by Lessee is not cured within
fourteen (14) calendar days of receiving notice from Lessor, or if such default or
breach cannot reasonably be cured with fourteen (14) calendar days, Lessee fails to
begin to cure during such fourteen (14) calendar day period or diligently attempts to
cure thereafter, which determination of diligence shall be in the sole and reasonable
discretion of Lessor, Lessor may, in addition to any other remedies available to
Lessor, terminate this Agreement, in whole or in part.

13.2.2. If this Agreement is terminated for any default or breach by Lessee, any payments
made to Lessor shall be forfeited to Lessor and Lessee shall have no right to recover
any payments. This forfeiture shall not diminish nor limit Lessor's right to recover
such damages resulting from the default or breach by Lessee.
13.2.2.1. If this Agreement is terminated for any default or breach by Lessor (in
accordance with Section 13 of this Agreement), any payments made to
Lessor shall be prorated.
13.2.3. Notwithstanding the foregoing, no failure to perform or delay in performance which is
caused by any war, national emergency, act of nature, or natural disaster shall be
deemed an event of default or breach.
13.2.4. In addition to the termination and forfeiture right described in the preceding
paragraph, Lessor shall have the following rights and remedies upon default or
breach:
13.2.4.1. the recovery of any unpaid rent, fees, and other charges due and owing at
the time of termination, plus any unpaid rent, fees, or other charges that
would have been earned or made if Lessee had not defaulted or breached
this Agreement;
13.2.4.2. the recovery of any damages, fees, costs, and/or expenses incurred by
Lessor as a result of the default or breach of this Agreement, including
court fees, costs, and expenses;
13.2.4.3. the removal, storage, and/or disposal of personal Property from the
Premises at Lessees sole risk, cost, and expense and without any liability
to Lessor for resulting damage in which case Lessee shall pay one
hundred ten percent (110%) of the costs and expenses thereof to Lessor
within fourteen (14) calendar days upon receipt of an invoice from Lessor;
13.2.4.4. placing a lien on or against the Premises; and
13.2.4.5. any other right or remedy, legal or equitable, that Lessor is entitled to
under applicable law including, but not limited to, injunctive relief.
13.2.5. No termination shall relieve Lessee of the obligation to deliver and perform any
outstanding requirements and agreements prior to the effective date of the
termination and/or continue to be liable under this Agreement.
13.2.6. In the event of any such termination enumerated herein, Lessor shall have the right,
at once and without further notice, to enter and peacefully take full possession of the
Premises. Upon termination of this Agreement for any reason, Lessee shall
peacefully surrender the Premises to Lessor in the same condition as when received,
with exception of ordinary and reasonable wear and tear, subject to Section 8.1.15
above.
13.2.7. All of the rights and remedies given to Lessor in this Agreement are cumulative and
no one is exclusive of any other. Lessor shall have the right to pursue any or all
remedies available to Lessor, whether legal or equitable in nature, whether stated in
this Agreement or not.

13.3. Default by Lessor; Remedies of Lessee

13.3.1. The following shall be considered a "Lessor Default":
13.3.1.1. If Lessor defaults in the performance of any of the covenants on the part
of Lessor to be kept or performed and such default continues for thirty
(30) calendar days after receipt of written notice from Lessee stating the
nature and extent of the default or, if such default cannot reasonably be
cured within thirty (30) calendar days, Lessor fails to begin to cure during
such thirty (30) calendar day period or diligently attempt to cure thereafter;
or
13.3.1.2. If any warranty or representation expressly set forth by Lessor in this
Agreement is untrue and remains untrue thirty (30) calendar days after
receipt of written notice from Lessee specifying such untruth.
13.3.1.3.
In the event of a Lessor Default, Lessee may, in addition to all other rights and remedies
provided at law or in equity, (a) terminate this Agreement, provided Less has purchased the
Option Improvements, in which case Lessee may sell the Option Improvements to a third
party, or (b) cure the default, including, but not limited to, the making of any repairs or
replacements to the Premises, and Lessor shall reimburse Lessee, on demand, for one
hundred ten percent (110%) of Lessees actual costs and expenses incurred thereby, such
sum to be set off against rent next coming due until fully repaid.
14. TERMINATION BY LESSEE
14.1.1. If current, and subject to providing written notice to Lessor, Lessee may terminate
this Agreement after the occurrence of one (1) or more of the following events:
14.1.1.1. permanent abandonment or closure of the Airport.
14.1.1.2. the lawful assumption by the United States Government, or any
authorized Agency of the operation, control, use, or occupancy of the
Airport, or any substantial part or parts thereof, in such manner as to
substantially restrict Lessee from conducting the Activities authorized in
this Agreement for a period of at least ninety (90) calendar days.
14.1.1.3. the default or breach by Lessor of any conditions, obligations, privileges,
and agreements contained herein required to be performed by Lessor and
the failure of Lessor to remedy such default or breach for a period of
fourteen (14) calendar days after receipt from Lessee of written notice
while Lessee is in Good Standing.
15. CONDEMNATION OR EMINENT DOMAIN
15.1. General
15.1.1. In the event of the acquisition by Condemnation or the exercise of the power of
eminent domain (by any governmental or other permitted Agency to take Property for
public use) of interest in all or a portion of the Premises, Lessee shall not institute any
action or proceeding or assert any claim against Lessor for Compensation or
consideration of any nature whatsoever and any provision contained herein contrary
to the provisions of this Section shall have no force or effect.
15.1.2. All Compensation or consideration awarded or paid upon a total or partial acquisition
of the Premises (which for these purposes shall not include Compensation or
consideration from Lessor) shall belong to and be the Property of Lessor without any
participation by Lessee.

15.1.2.1. Nothing contained herein shall be construed or preclude Lessee from

recovering directly from the condemning Agency the value of any claim,
that may exist, or depreciation, damage, or costs or expenses of removal,
or for the value of Lessees personal Property; provided, however, that no
such claim shall diminish or otherwise adversely affect Lessors award.
15.2. Total
15.2.1. In the event of the acquisition by Condemnation or eminent domain of all interest in
the Premises, Lessees obligation to pay rent and the leasehold estate created shall
cease and terminate as of the date Condemnation or eminent domain is asserted to
the governmental or other permitted Agency taking the Premises for public use.
15.3. Substantial and Partial
15.3.1. In the event of the acquisition by Condemnation or eminent domain of a portion of
interest in the Premises, Lessees obligation to pay rent shall cease and terminate as
it pertains to the specific portion of the Premises taken as of the date Condemnation
or eminent domain is asserted date title of the Premises is transferred to the
governmental or other permitted Agency taking the Premises for public use.
15.3.1.1. In the event of partial Condemnation or eminent domain, rent shall be
adjusted accordingly.
15.3.2. In the event of substantial Condemnation or eminent domain which prevents or
substantially impairs the conduct of Lessees Activities or which equates to 50% or
more of the total Premises, Lessee may, at Lessees option, terminate this
Agreement.
15.3.2.1. If terminating this Agreement, Lessee shall notify Lessor of termination
within thirty (30) calendar days of receiving notice of Condemnation or
eminent domain.
15.3.2.2. If Lessee does not notify Lessor of termination, the Condemnation or
eminent domain shall be considered a partial acquisition.
16. FORCE MAJEURE
16.1.1. If either party shall be delayed, hindered in, or prevented from, the performance of its
conditions, obligations, privileges, and agreements contained herein by reason of
war, national emergency, act of nature, or natural disaster, or not the fault of such
party (Permitted Delay), such party shall be excused for the period of time equivalent
to the delay caused by such Permitted Delay.
16.1.2. Notwithstanding the foregoing, any extension of time sought by Lessee or Lessor for
a Permitted Delay shall be conditioned upon it providing written notice of such
Permitted Delay to the other Party within fourteen (14) calendar days of the event
causing the Permitted Delay.
16.1.3. In no event shall Lessee be relieved of its obligations to pay Lessor the rents, fees, or
other charges due and owing, as set forth in this Agreement.
17. NO WAIVER
17.1.1. No failure on the part of Lessor or Lessee to enforce any of the conditions,
obligations, privileges, and agreements contained herein shall be construed as or
deemed to be a waiver or a relinquishment of the right to enforce such conditions,
obligations, privileges, and agreements.
17.1.2. The acceptance by Lessor of any payment shall not be construed as or deemed to
be a waiver by Lessor of any default or breach by Lessee of any condition, obligation,
privileges, or agreement contained herein and shall not be construed as or deemed
to be a waiver of Lessors right to terminate this Agreement.

18. LICENSES, CERTIFICATES, AND PERMITS

18.1.1. Lessee, at its sole risk, cost, and expense, shall obtain any and all required licenses,
certificates, permits, or other authorizations from any and all Agencies having
jurisdiction necessary to conduct the Activities authorized in this Agreement.
18.1.2. Lessee shall not engage in or permit others to engage in activities on the Premises in
violation of any, license, certificate, permit, or other authorization.
18.1.3. If the attention of Lessee is called to any such violation, Lessee will immediately
notify Lessor and cease and desist from and immediately cause to be corrected such
violation. Lessee shall pay all penalties, fines, costs, or expenses associated with any
such violation or correction.
19. INSURANCE
19.1.1. Lessee shall procure, maintain, and pay all premiums throughout the term of this
Agreement for the applicable insurance coverages and amounts reasonably required
by the City of Battle Creek and in conformance with Regulatory Measures.
19.1.1.1. Such insurance shall be kept in full force and effect at all times during the
term of this Agreement.
19.1.1.2. Such insurance shall name Lessor as additional insured.
19.1.1.3. Current Certificates of Insurance shall be provided to Lessor to this effect.
19.1.2. Liability policies shall contain, or be endorsed to contain, the following provisions.
19.1.2.1. City of Battle Creek and the Battle Creek City Commission, individually
and collectively, and its representatives, officers, officials, employees,
agents, and volunteers are to be covered as additional insured with
respect to: liability arising out of activities performed by or on behalf of
entity (with the exception of gross negligence and or intentional torts);
premises owned, leased, occupied, or used by entity; or vehicles,
equipment, or aircraft owned, leased, hired, borrowed, or operated by
entity. Such insurance shall provide primary coverage and shall not seek
any contribution from any insurance or self-insurance carried by agent or
the City of Battle Creek.
19.1.2.2. Such insurance, as to the interest of the City of Battle Creek only, shall
not be invalidated by any act or neglect (or default or breach of contract)
of entity. Any failure to comply with reporting or other provisions of the
policies, including any breach of warranty, shall not affect coverage
provided to the City of Battle Creek and the Battle Creek City
Commission, individually and collectively, and its representatives, officers,
officials, employees, agents, and volunteers. Entitys insurance shall apply
separately to each insured against whom claim is made or suit is brought,
except with respect to the aggregate limits of the insurers liability.
19.1.2.3. Coverage shall not be suspended, voided, or cancelled by either party or
reduced in coverage or in limits except after thirty (30) calendar days prior
written notice (or fourteen (14) calendar days prior written notice for
cancelation for non-payment of premium) by certified mail, return receipt
requested, has been given to the City of Battle Creek.

20. DAMAGE
20.1.1. If any part of the Premises, the Airport, or associated Improvements is damaged or
destroyed by Lessee, its representatives, officers, agents, employees, guests,
suppliers, vendors, invitees, contractors or subcontractors, Lessee shall diligently,
properly, and promptly repair, restore, or replace to the condition and character of the
Premises, the Airport, or associated Improvements immediately prior to damage
within thirty (30) calendar days after the damage or destruction; provided, however,
that if the damage or destruction is of a character that it cannot reasonably be
repaired, restored or replaced within thirty (30) calendar days, Lessee shall only be
required to commence such repair, restoration or replacement during such thirty (30)
calendar day period and diligently pursue it to completion.
20.1.2. If Lessee fails to comply with Section 20.1.1, Lessor may, at its own discretion,
repair, restore, or replace the Premises, the Airport, or associated Improvements.
Lessee shall pay Lessor, upon demand, one hundred ten percent (110%) of the
amount that Lessor expended to repair, restore, or replace the damaged or
destroyed part of the Premises, the Airport, or associated Improvements.
20.1.3. If at any time during the term of this Agreement, any part of the Premises is damaged
or destroyed, Lessor shall be under no obligation to repair, restore, or replace the
damaged or destroyed portion of the Premises unless Lessor is responsible for such
damage or destruction.
21. INDEMNIFICATION
21.1.1. Lessee shall defend, indemnify, save, protect, and hold harmless Lessor, individually
and collectively, and its representatives, officers, officials, employees, agents, and
volunteers from and against (and reimburse Lessor for) any and all actual claims,
demands, damages, expenses, costs, fees (including, but not limited to, reasonable
attorney, accountant, paralegal, expert, and escrow fees), fines, environmental costs,
and/or penalties (collectively referred to as costs) which may be imposed upon,
claimed against or incurred or suffered by Lessor and which, in whole or in part,
directly or indirectly, arise from or are in any way connected with any of the following,
except to the extent resulting from Lessors negligence or willful misconduct: (a) any
negligent or willful act, error, omission of Lessee or Lessees partners, officers,
directors, agents, employees, invitees, or contractors, (b) any use or occupation,
management, or control of the Lessees Premises, whether or not due to Lessee or
Lessees own act, error, omission, or negligence (c) any condition created in, on, or
about the Lessees Premises after the effective date, and (d) any breach, violation, or
nonperformance of the Lessee or the Lessees obligations under this Agreement or
any other agreement between the Parties. To the extent permitted by applicable law,
Lessor shall defend, indemnify, save, protect, and hold harmless Lessee, individually
and collectively, and its representatives, officers, officials, employees, agents, and
known volunteers from and against (and reimburse Lessee for) any and all actual or
alleged claims, demands, damages, expenses, costs, fees (including, but not limited
to, attorney, accountant, paralegal, expert, and escrow fees), fines, environmental
costs, and/or penalties (collectively referred to as costs) which may be imposed
upon, claimed against or incurred or suffered by Lessee and which, in whole or in
part, directly or indirectly, arise from or are in any way connected with any act, error,
omission, or negligence of Lessor or Lessors officers, directors, agents, employees,
invitees, or contractors on or about the Premises or the Airport.

21.1.1.1. In the event a party indemnified hereunder is responsible, in part, for the
loss, the indemnitor shall not be relieved of the obligation to indemnify;
however, in such a case, liability shall be shared in accordance with the
State of Michigans principles of comparative fault.
21.1.2. In the event of an environmental Regulatory Measure violation or an environmental
contaminating accident or incident caused by Lessee or Lessees employees,
vendors, suppliers, contractors, or any other entity associated with Lessee or in the
event any of these entities violates any environmental Regulatory Measure, the
following shall apply:
21.1.2.1. Lessee shall defend, indemnify, save, protect, and hold harmless Lessor,
individually and collectively, and its representatives, officers, officials,
employees, agents, and volunteers.
21.1.3. Nothing herein shall constitute a waiver of any protection available to Lessor,
individually and collectively, and its representatives, officers, officials, employees,
agent, and volunteers under the State of Michigans sovereign, governmental, or
other immunity acts or similar statutory provisions, if any.
22. SUBLEASE
22.1.1. Lessee shall not sublease any portion of the Premises without the prior written
consent of Lessor which said consent shall not be unreasonably withheld,
conditioned or delayed.
22.1.1.1. Lessee shall submit the written agreement between Lessee and the
sublessee to Lessor for review and evaluation. Lessor may require that an
application be completed and all relevant and applicable information
relating to the requested sublease be provided to Lessor for review and
evaluation. If Lessor fails to require an application or notify Lessee of its
consent to (or disapproval of) the proposed sublease agreement within
thirty (30) calendar days after its submission to Lessor or, if Lessor
requires an application, within thirty (30) calendar days after submission of
the application, then Lessor shall conclusively be deemed to consent to
such sublease.
22.1.1.2. A sublease made contrary to the requirements of this Section 22 shall be
null and void. Unless otherwise stated in the written consent, a sublease
is subordinate (subject) to all of the terms and conditions of this
Agreement.
22.1.1.3. Sublessee may not occupy the Premises before Lessor consents to the
sublease in writing.
23. SALE, ASSIGNMENT, OR TRANSFER
23.1.1. Lessee shall not sell, assign, transfer, or hypothecate its interest in the Premises or
this Agreement, in whole or in part, without the prior express written consent of
Lessor which said consent shall not be unreasonably withheld, conditioned or
delayed.
23.1.1.1. Any such sale, assignment, transfer, or hypothecation without Lessors
prior express written consent shall be null and void and, at Lessors
option, shall constitute a default or breach of this Agreement.
23.1.2. Dissolution of Lessee or the transfer of fifty-one percent (51%) or more of its
outstanding stock, equity, or certificates of membership or interest in a single transfer
or multiple transfers shall be deemed a sale, assignment, or transfer under this
Agreement.

23.1.3. In the event Lessees interest in the Premises or this Agreement is sold, assigned,
transferred, hypothecated, in whole or in part, Lessee shall remain liable to Lessor for
the remainder of the term of this Agreement including paying to Lessor any portion of
rents, fees, and/or other charges not paid by the assignee when due and owing.
23.1.4. The assignee shall not sell, assign, transfer, or hypothecate its interest in the
Premises or this Agreement without the prior express written consent of Lessor and
any sale, assignment, transfer, or hypothecation by Lessee shall contain a provision
to this effect. Any assignee of Lessee shall be bound by the conditions, obligations,
privileges, and agreements contained herein.
24. ENCUMBRANCES
24.1.1. Lessee shall have no authority, express or implied, to create (or consent to the
creation of) any lien, charge or encumbrance upon the Premises and Lessee shall
not permit the Premises to be or become subject to any lien (including mechanics
liens), charge, or encumbrance whatsoever without the prior express written consent
of Lessor.
25. MORTGAGE
25.1.1. Lessee shall not mortgage, pledge, assign as collateral, voluntarily or otherwise, its
interest in the Premises or this Agreement without the prior express written consent
of Lessor; provided, however, that if Lessee has purchased the Option
Improvements, then Lessee shall have the right to mortgage, pledge, and assign the
Option Improvements as collateral subject to the prior written consent of Lessor
which shall not be unreasonably withheld.
25.1.2. This Agreement will not be subject or subordinate to any mortgage placed on the
Premises by Lessor unless the at-issue lender (Lender) executes an instrument that
is in a form and content reasonably acceptable to Lessee and such Lender (SNDA),
and which substantially provides that, as long as Lessee is not in default under this
Agreement: (i) Lessee will not be named or joined as a party in a proceeding arising
from the liens of such Lender; (ii) any such proceeding shall not in any way affect or
impair Lessees rights under this Agreement; (iii) such Lender will affirmatively
recognize the validity of this Agreement and Lessees rights under this Agreement;
and (iv) such Lender will assume Lessors obligations under this Agreement on
foreclosure of such Lenders liens or on obtaining title to the Premises by deed in lieu
thereof. Lessor will present such an instrument to Lessee with Lessors current
Lender, if any, prior to the execution of this Agreement, which Lessor, Lessee and
Lessors current Lender will execute simultaneously with the execution of this
Agreement.
25.1.3. At the request of Lessee, Lessor will, within fourteen (14) calendar days, deliver to
Lessee, or Lessees designee, a certificate stating and certifying under oath as of its
date (i) the date to which rent under this Agreement has been paid; (ii) if true, that
this Agreement is unmodified and in full force and effect (or if there have been
modifications, the specific nature of such modifications) and that neither party is in
default under any provision of this Agreement (or if a party is in default, the specific
nature of such default); and (iii) such other information that Lessee may reasonably
request in connection with landlord-tenant relationship established by this
Agreement.

26. RELOCATION
26.1.1. Lessee understands Lessor has the right to replace the Premises, in whole or in part,
at Lessors sole cost, with equivalent premises similarly situated at the Airport;
provided that (a) the total land area of such replacement Premises must be at least
ninety-five percent (95%) of the total land area of the existing Premises, (b) the
replacement Improvements must be the same or better as the existing Improvements
and any Alterations, as determined by Lessee in the exercise of its reasonable
judgment, and (c) the rents, Purchase Price, and any other amount due from Lessee
to Lessor shall be adjusted in proportion to any reduction in size or value of the
replacement Premises.
27. BOOKS AND RECORDS
27.1. Lessees Obligations
27.1.1. Lessee shall maintain records containing the payment of rents, fees, and other
charges paid by Lessee for the current year and previous five (5) year period.
27.1.2. All payment records shall be kept by Lessee in accordance with generally accepted
accounting principles and shall reflect all amounts due and owing to Lessor.
27.1.3. Upon request of an audit by Lessor, Lessee shall provide the auditor access to and
shall furnish the auditor with information, records, reports, or other documentation
regarding the payment of rents, fees, and other charges owed and paid by Lessee.
27.2. Lessors Rights
27.2.1. Lessor may, at all reasonable times, audit records to enable verification and/or
confirmation of the amount of rents, fees, and other charges due and owing to
Lessor.
27.2.2. If Lessor is not satisfied with the findings of any audit conducted by Lessor, Lessor
shall serve notice to Lessee.
27.2.3. If Lessee agrees with Lessor's audit findings, Lessee shall, within thirty (30) calendar
days after receipt of notice, make known Lessees agreement with Lessors findings
in writing and pay one hundred twenty-five percent (125%) of all monies due and
owing to Lessor. If Lessee does not agree with Lessor's findings, Lessee shall, within
sixty (60) calendar days after receipt of notice from Lessor, furnish to Lessor, at
Lessee's sole cost and expense, an audit made by an independent CPA mutually
agreeable to both Parties.
27.2.4. All costs and expenses of Lessor's audit shall be paid by Lessee if the report of the
independent CPA certifies Lessor's audit contained a finding prejudicial to Lessor's
receipt of rents, fees, and/or other charges as described herein, in an amount equal
to or greater than two percent (2%) of the amount of rents, fees, and/or other charges
reported by Lessee.
27.2.5. The final audit of the independent CPA made under this Section shall be conclusive
upon the Parties and Lessee shall pay to Lessor, within fourteen (14) calendar days
after a copy of the independent CPA's final report has been delivered to Lessee, one
hundred ten percent (110%) of the amount, if any, identified as due and owing to
Lessor. The failure of Lessee to make payment within fourteen (14) calendar days
shall constitute a default under this Agreement and shall give cause to Lessor for
immediate termination of this Agreement.
27.2.6. Any information, records, reports, or other documentation provided to or obtained by
Lessor, or which Lessor otherwise comes into possession of pursuant to this
Agreement, shall be subject to the provisions of the Freedom of Information Act.

28. SURRENDER PREMISES

28.1.1. Upon expiration of the term of this Agreement or earlier termination of this
Agreement, Lessee shall vacate and surrender possession of the Premises to
Lessor. Provided Lessee is not in default or breach of this Agreement, Section 28
shall be subject to the provisions identified in Section 8.1.14 above. If Lessee fails to
do so, Lessor may immediately commence eviction proceedings at its sole discretion.
28.1.2. Lessee shall return the Premises to Lessor in as good condition as when Lessee took
possession, normal wear and tear excepted. Any deterioration or damage caused by
incident, accident, abuse, carelessness, negligence, or misconduct shall not be
considered normal wear and tear. In the event that Lessee fails to return the
Premises to Lessor in good condition, Lessor may perform any work necessary to
return the Premises to good condition including maintenance, repair, restoration,
replacement, and cleaning all at the expense of the lessee.
28.1.3. Provided Lessee is not in default or breach of this Agreement, Lessee shall also
remove all Personal property from the Premises upon expiration of the term of this
Agreement or earlier termination of this Agreement, subject to the provisions in
Section 8.1.14. If Lessee fails to do so, Lessor may remove or caused to be
removed, at Lessees sole risk, cost, and expense and without any liability to Lessor,
all personal Property. Lessor may dispose of any personal Property removed from
the Premises in accordance with the Airports Primary Management and Compliance
Documents, other directives of the City and Regulatory Measures.
28.1.4. Lessee shall, at the expiration of the Original Term, or upon its earlier termination, if
another entity enters into an agreement with Lessor to use and/or occupy the
Premises, Lessee shall work with the parties in a cooperative and responsive manner
to complete the transition while also ensuring that there is no interruption in the
provision of Activities during the transition.
29. HOLDOVER POSSESSION
29.1.1. If Lessee, upon expiration of the term of this Agreement remains in possession of the
Premises, such holding over shall be regarded as a month-to-month tenancy (not as
an extension of this Agreement) which may be terminated at any time by Lessor or
Lessee by providing not less than thirty (30) calendar days written notice. The rents,
fees, and other charges that shall be paid during the holding over period shall be
equal to one hundred ten percent (110%) of the monthly rents, fees, and other
charges that were being charged by Lessor at the time the term of this Agreement
expired. The holdover period shall be subject to all of the terms and conditions of this
Agreement. This provision shall not be construed as Lessors permission for Lessee
to hold over. Acceptance of rents, fees, and other charges shall not constitute an
extension of this Agreement.
30. INDEPENDENT ENTITIES
30.1.1. Nothing in this Agreement is intended to nor shall it be construed, in any way, as
creating or establishing a relationship of partners between the Parties or as
constituting Lessee as a representative, officer, official, employee, agent, or volunteer
of Lessor for any purpose or in any manner whatsoever.
31. BINDING EFFECT
31.1.1. This Agreement shall be binding on and inure to the benefit of the heirs, successors,
and assigns of the Parties. Whenever a reference is made to either party, such
reference shall be deemed to include, wherever applicable, a reference to the heirs,
successors, and assigns of such party, as if in every case so expressed.

32. SUBORDINATION
32.1.1. This Agreement is subject and subordinate to the provisions of any existing or future
agreements between Lessor and the United States, the State of Michigan, or any
other entity pertaining to the planning, development, operation (including
maintenance and repair), and management of the Airport.
33. GOVERNING LAW AND VENUE
33.1.1. This Agreement shall be deemed to have been made in, and shall be construed in,
accordance with the laws of the State of Michigan without regard to conflicts of law
principles.
33.1.2. The Calhoun County Court and/or District Court (Court) shall have exclusive
jurisdiction and venue with respect to all disputes, actions, and proceedings arising
from or under this Agreement, regardless of the nature or basis of the dispute.
33.1.3. Should any lawsuit or arbitration be commenced between the Parties concerning the
terms of this Agreement, or the rights and duties of the Parties hereto, the prevailing
Party or Parties in such proceeding shall be entitled, in addition to such other relief as
may be granted, to payment of all of their costs, expenses (including, but not limited
to, expert fees), and reasonable attorneys' fees incurred in connection therewith.
Prevailing Party shall mean the party that receives a favorable judgment (either by
trial or dispositive motion that closes the action) or the Party that obtains substantially
what was sought in the lawsuit or arbitration.
34. PARAGRAPH HEADINGS
34.1.1. All section, paragraph, and subparagraph headings contained in this Agreement are
inserted only as a matter of convenience or reference only, and are not intended to
define, limit, or describe the scope of this Agreement or any provision contained
herein.
35. SEVERABILITY
35.1.1. If any provision in this Agreement is held to be invalid by any court of competent
jurisdiction, the invalidity of any such provision shall in no way affect any other
provisions in this Agreement, provided that the invalidity of any such provision does
not materially prejudice either party with regard to the respective rights and
obligations of each party contained in the valid provisions of this Agreement.
36. COUNTERPARTS
36.1.1. This Agreement may be executed in several counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
37. MODIFICATION
37.1.1. Any change or modification to this Agreement shall not be valid unless made in
writing, agreed to, and signed by both Parties.
38. TIME OF ESSENCE
38.1.1. It is mutually agreed by the Parties that time is of the essence in the performance of
all conditions, obligations, privileges, and agreements to be kept and performed
under the terms of this Agreement.
39. ENTIRE AGREEMENT
39.1.1. This Agreement contains and embodies the entire understanding and agreement
between the Parties and supersedes and replaces any and all prior understandings
and agreements, written or oral, expressed or implied, relating to this Agreement.

40. NOTICES
40.1.1. Whenever any notice is required by this Agreement to be made, given or transmitted
to the Parties, such notice shall be hand delivered or sent by registered or certified
mail (postage prepaid), courier, or overnight carrier, and addressed to:
Lessor with a copy to:
City of Battle Creek City of Battle Creek

Transportation Director City Attorney
15551 S. Airport Rd 10 N. Division St.
Battle Creek, MI 49015 Battle Creek, MI 49014
Lessee with a copy to:
Duncan Aviation, Inc. Duncan Aviation, Inc.

Attn: Thomas J. Burt or EVP Attn: Thomas B. Fischer or Vice President
15745 S. Airport Road & General Counsel
Battle Creek, MI 49015 3701 Aviation Road
Lincoln, NE 68524
40.1.2. The date of service of notice shall be the date such notice is actually delivered to the
intended recipient or the date delivery is refused by the intended recipient.
40.1.3. The Parties may, from time to time, designate to each other in writing a different
address or different entity or entities to which all such notices, communications, or
payments shall be given or made.
41. REPRESENTATIONS AND WARRANTIES OF LESSEE
41.1.1. Lessee represents and warrants to Lessor that:
41.1.1.1. It is duly organized and validly existing under the laws of its jurisdiction,
incorporation, or establishment;
41.1.1.2. It has the power and the authority to enter into and perform its conditions,
obligations, privileges, and agreements contained herein and to pay the
rents, fees, or other charges required under this Agreement;
41.1.1.3. This Agreement has been duly authorized, executed, and delivered by
Lessee and assuming the due authorization, execution and delivery
hereof by the Parties hereto, constitutes a legal, valid, and binding
obligation of it enforceable against it in accordance with the conditions,
obligations, privileges, and agreements contained herein, subject to
applicable bankruptcy, insolvency, and similar laws affecting creditors
rights generally, and subject, as to enforceability, to general principles of
equity regardless of whether enforcement is sought in a proceeding in
equity or at law;
41.1.1.4. Its execution and delivery of this Agreement and its performance of its
conditions, obligations, privileges, and agreements contained herein do
not and will not constitute or result in a default, breach, or violation of, or
the creation of any lien or encumbrance on the Premises under, its charter
or by-laws (or equivalent organizational documents), or, to the best of
Lessees knowledge, any other agreement, instrument, law, ordinance,
regulation, judgment, injunction, or order applicable to it or the Premises;

41.1.1.5. All consents, authorizations, and approvals requisite for its execution,
delivery, and performance of this Agreement have been obtained and
remain in full force and effect and all conditions, obligations, privileges,
and agreements thereof have been duly complied with, and no other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for such execution, delivery, or performance;
and
41.1.1.6. Lessee has not received any written notice of any proceeding pending or
threatened against Lessee at law or in equity, or before any governmental
instrumentality or in any arbitration, which would materially impair
Lessees ability to perform its conditions, obligations, privileges, and
agreements contained herein and there is no such proceeding pending
against Lessee which purports or is likely to affect the legality, validity, or
enforceability of this Agreement.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year set forth
herein. This Agreement is effective as of the last date signed by either party.
CITY OF BATTLE CREEK: ATTEST:
____________________________ _____________________________
Rebecca L. Fleury, City Manager [NAME OF SECRETARY], Secretary
NOTARY: Date:
____________________________
[NAME OF NOTARY] Approved as to form and legality by:
Commission Expires: _________
SEAL _____________________________
Jill Humphreys Steele
Attorney for the City of Battle Creek
DUNCAN AVIATION, INC.: ATTEST:
____________________________ _____________________________
[NAME], [TITLE]
By: _________________________
NOTARY: Date: ________________________
____________________________
[NAME OF NOTARY]
Commission Expires: _________
SEAL

EXHIBIT A DEFINITIONS
Aeronautical Activity (or Activity), Any activity or service that involves, makes possible, facilitates, is
related to, assists in, or is required for the operation of Aircraft. Any activity which contributes to, or is
required for, the safety of such operations. Any activities which have a direct relationship to the
operation of Aircraft or the operation of the Airport.
Agency, Any federal, state, or local governmental entity, unit, organization, or authority.
Agreement, A written contract (e.g., lease agreement, permit, etc.), enforceable by law, executed by
both parties, between the City and entity transferring rights or interest in land and/or Improvements
and/or otherwise authorizing the conduct of certain Activities.
Aircraft, A device that is used or intended to be used for flight.
Aircraft Maintenance, The repair, maintenance, alteration, calibration, adjustment, preservation, or
inspection of Aircraft airframe, powerplant, propeller, and accessories, parts and components
(including the replacement of parts) as described in 14 CFR Part 43.
Aircraft Storage Hangar, Any Hangar approved and used specifically for the purposes of Aircraft
storage not including Aircraft Maintenance.
Airport, All land, Improvements, and appurtenances within the legal boundaries as it now exists on the
Airport Layout Plan (or Exhibit A of the most recent FAA grant) and as it may hereinafter be modified
at the W.K. Kellogg Airport (BTL).
Airport Layout Plan, (or ALP), The FAA approved and City adopted drawing, as may be amended
from time to time, which reflects an agreement between the FAA and City depicting the physical
layout of an airport and identifying the location and configuration of current and proposed Runways,
Taxiways, buildings, roadways, utilities, navaids, etc.
Airport Sponsor Assurances, Those contractual obligations that are described by law in 49 U.S.C.
47107 and are undertaken by a public airport sponsor as a condition of receipt of federal airport
development grants or federal surplus Property.
Airside, The Runways for landing and taking off of Aircraft, designated helipads, Taxiways and
Taxilanes for ground movement of Aircraft, and Ramp for parking, loading, unloading, fueling, and
servicing of Aircraft.
Based Aircraft, An Aircraft which has been or will be stored at the Airport for more than one hundred
eighty-three (183) calendar days over a one-year period (including days that the Aircraft is operating
off the Airport and not paying Based Aircraft storage rents or fees at another airport).
Certificates of Insurance, A certificate provided by and executed by an Operators, Lessees, or
Sublessees insurance company providing evidence of the insurance coverages and policy limits of
the Operator, Lessee, or Sublessee.
Commercial, For the purpose of securing earnings, income, Compensation (including exchange or
barter of goods and services), and/or profit.
Compensation, Any form of reimbursement for goods or services such as monetary, exchange, barter,
favors, gratuity, etc.
Condemnation, The taking of land and/or Improvements for any public or quasi-public use under any
Regulatory Measure or by the right of eminent domain.
Department of Transportation (or DOT), The Cabinet department of the United States Government
concerned with transportation. It was established by an act of Congress on October 15, 1966 and
began operation on April 1, 1967. It is administered by the United States Secretary of Transportation.
Equipment, All Property and machinery, together with the necessary supplies, tools, and apparatus
required for the proper conduct of the Activity being performed.

Federal Aviation Administration (or FAA), The Agency within the Department of Transportation of the
United States Government that has the responsibility of regulating Aeronautical Activities. It was
established by an act of Congress on April 1, 1967.
Fire Department (or Fire Department), The City of Battle Creek Fire Department provides fire services
as well as several community services to the City.
Hangar, Any fully or partially enclosed storage facility for an Aircraft.
Improvements, All buildings, structures, additions, and facilities including pavement, fencing, and
landscaping constructed, installed, or placed on, under, or above any land on the Airport.
Land Use Plan, A document approved by the FAA as part of the Airport Layout Plan used to guide
land use surrounding the Airport.
Master Plan, An assembly of documents and drawings (which have been approved by the FAA and
adopted by the City) covering the development of the Airport from a physical, economic, social, and
political jurisdictional perspective. The Airport Layout Plan is part of the Master Plan.
Non-Commercial, Not for the purpose of securing earnings, income, Compensation (including
exchange or barter of goods and services), and/or profit.
Police Department (or Police Department), The City of Battle Creek Police Department provides law
enforcement services as well as several other community services to the City.
Primary Management and Compliance Documents (PMCDs), A compendium of Airport policies,
standards, guidelines, rules, and regulations that govern the development, operation, and
management of an airport, that may be promulgated by the City, and may be amended from time to
time, including General Aviation Leasing/Rents and Fees Policy, General Aviation Minimum
Standards, Rules and Regulations, and Design Standards.
Property, Any tangible or intangible possession that is owned by an entity or a person.
Public Area, Those areas normally used by the general public. Such areas include, restrooms,
General Aviation Passenger Terminal Building lobbies, hallways, passage ways, roadways, walkways,
sidewalks, and Vehicle parking lots. Public areas do not include the areas owned and/or leased by
Commercial businesses unless such businesses so designate certain areas as public use areas.
Public Areas do not include the AOA, Restricted Areas, and employee parking lots.
Ramp, Those Paved areas of the Airport within the AOA designated by the City for parking, loading,
unloading, fueling, or servicing of Aircraft.
Regulatory Measures, All applicable federal, state, county, and local laws, codes, ordinances,
policies, rules, and regulations, including the PMCDs.
Rules and Regulations, The rules and regulations set forth by the City for the safe, secure, orderly,
and efficient use of the Airport, as may be amended from time to time.
Security Plan, A document developed by Operators to ensure the safety and security of people and
property at the Airport.
Security Deposit, A security and damage deposit as security for the return of the premises at the
expiration of the term of the agreement in as good condition as when Lessee took possession, normal
wear and tear excepted, as well as the complete performance of all other terms, conditions, and
covenants of the lease agreement.
Special Event, Any event at the Airport whereby individuals have unescorted access to the AOA or
any event that may or will require: the assistance of City staff (outside the realm of typical duties); the
closure of any portion of any roadway, walkway, Vehicle parking area, Ramp, Taxilane, Taxiway, or
Runway; and/or the issuance of an airspace waiver or NOTAM.

Sublease, An agreement entered into by an entity with an Operator or Lessee that transfers rights or
interests in the Operators or Lessees Premises and for which, the City has given proper consent.
Sublessee, An entity that has entered into a Sublease with an Operator or Lessee who is authorized
(by the City) to engage in Subleasing.
Transportation Director, That person (or designated representative thereof), appointed by the City,
responsible for the administration and day-to-day operation and management of the Airport, all City
owned Property, Vehicles, equipment, material, financial assets, and Employees at the Airport, and all
employees assigned to the Airport.
Transportation Security Administration (or TSA), The Agency within the Department of Homeland
Security of the United States Government responsible to safeguard United States transportation
systems and ensure secure travel. It was established by the Aviation and Transportation Act passed
on November 19, 2001.

EXHIBIT B PREMISES

EXHIBIT C RENT STUDY
Rent Study
The objective of the Rent Study is to establish market rent for the Premises based on a comparative
analysis of the rents being charged for similar properties at comparable airports. The process that
shall be used to establish market rent for the Premises is set forth as follows.
The City shall engage an aviation consultant to conduct a Rent Study to determine the market rent for
the Premises.
The aviation consultant shall have working knowledge of the aviation industry (in general) and
airports (in particular) including Commercial entities (i.e., aviation businesses FBOs and
SASOs) and Non-Commercial entities (i.e., Aircraft Owners and Operators) and related
activities.
The aviation consultant shall be familiar with federal laws and FAA regulations, obligations,
and guidance pertaining to setting rents for airport (aeronautical) properties being used for
General Aviation purposes.
The aviation consultant shall have
experience providing the same services at comparable airports.
The aviation consultant shall have
performed a minimum of five (5) rent studies involving airport (aeronautical) properties within
the past five (5) years. Prior to initiating work, the aviation consultant shall provide a list to the
City identifying the airports, the type of rent studies conducted (i.e., land and/or
Improvements), and the extent of the analysis performed.
The aviation consultant shall develop a profile of the Airport and the Premises. The profile shall be
utilized to identify comparable airports and similar properties at those airports. Rents and related
information shall then be obtained (from the comparable airports identified) and analyzed to derive the
market rent for the Premises.
In identifying comparable airports, the aviation consultant shall, at a minimum, consider the following:
Infrastructure (number, configuration, and capacity of Runways, Taxiways, and Taxilanes);
approaches (precision versus non-precision); presence or absence of Air Traffic Control; number and
type of aviation businesses including the number of Fuel providers; amount of land that is available for
aviation development (and related land use considerations); type of market; number and type of
airports in the market; and activity levels (Based Aircraft, Aircraft operations, and Fuel volumes).
The City may suggest airports to the aviation consultant that the City believes should be
considered based on the factors set forth herein.
The Lessee may suggest airports to the aviation consultant that the Lessee believes should be
considered based on the factors set forth herein.
Only those airports that are considered comparable by the aviation consultant shall be used to
determine the market rent for the Premises.
In identifying similar properties at comparable airports, the aviation consultant shall, at a minimum,
consider the following: use (Commercial versus Non-Commercial), size, location, Landside and
Airside access (to/from the Premises and Infrastructure), and type, quality, and condition of the land
and/or Improvements.
Only those properties considered most similar by the aviation consultant shall be used to
determine the market rent for the Premises. Any disparities with respect to the factors listed
above shall be carefully considered and clearly addressed by the aviation consultant.

EXHIBIT C RENT STUDY
In determining the market rent for the Premises, the aviation consultant shall use categorizations and
groupings with consideration given to the functional utility or limitations of the land and/or
Improvements (if any) under study. This shall include, but not necessarily be limited to, any limitations
or restrictions on the development of the Premises, the availability of utilities to the Premises, and/or
the ability of the subject property to support the Aircraft that normally frequent the Airport.
The aviation consultant shall consider properties at the Airport that are similar to the Premises and if
relevant, reasonable, and appropriate, the aviation consultant may also consider the following:
properties located at competitive airports and general real estate market conditions and trends in the
local market.
Rents charged for similar properties at the Airport, comparable airports, and competitive airports shall,
to the extent possible, be considered by component such as unimproved land, improved land, asphalt
or concrete Ramp areas, asphalt or concrete Vehicle parking areas, fuel storage facilities, terminal
buildings, office and shop facilities, Hangars, storage areas, and other support buildings or related
facilities.
If the rents charged for similar properties at the Airport, comparable airports, and/or competitive
airports are impacted by the fees being charged or if fees are charged in lieu of rent, the relationship
between the rents and fees shall be considered and addressed by the aviation consultant.
Similar Properties On-Airport
The City may, in its sole discretion, set rents for the Premises if rents for similar properties at the
Airport have been established through an agreement with the City within six (6) months.
In this case, each of the elements herein shall be considered by the City in determining the market
rent for the Premises.


Duncan Aviation Lease of Battle Creek Airport Hangar

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Lease Surrender Agreement

2. Conditioned upon Landlords receipt of the full Surrender Payment on or before

3. Conditioned on Landlords receipt of the Surrender Payment on or before the

LANDLORD: KELLOGG COMPANY

CITY OF BATTLE CREEK

Commercial Lease and Use

Between the CITY OF BATTLE

Commercial Lease and Use Agreement (Duncan Aviation Kellogg Hangar) i

12. REQUIRED FAA CLAUSES .......................................................................................... 14

Commercial Lease and Use Agreement (Duncan Aviation Kellogg Hangar) ii

Commercial Lease and Use Agreement (Duncan Aviation Kellogg Hangar) 1

Commercial Lease and Use Agreement (Duncan Aviation Kellogg Hangar) 2

Commercial Lease and Use Agreement (Duncan Aviation Kellogg Hangar) 3

4.4.1.1.5. Zoning, building, fire, safety, and other codes, ordinances,

Commercial Lease and Use Agreement (Duncan Aviation Kellogg Hangar) 4

6. RENTS AND FEES

Commercial Lease and Use Agreement (Duncan Aviation Kellogg Hangar) 5

Commercial Lease and Use Agreement (Duncan Aviation Kellogg Hangar) 6

Commercial Lease and Use Agreement (Duncan Aviation Kellogg Hangar) 7

Commercial Lease and Use Agreement (Duncan Aviation Kellogg Hangar) 8

Commercial Lease and Use Agreement (Duncan Aviation Kellogg Hangar) 9

9.4. Fixtures and Equipment

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Commercial Lease and Use Agreement (Duncan Aviation Kellogg Hangar) 11

11. LESSEES OBLIGATIONS

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11.6. Costs, Expenses, and Other Charges

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12. REQUIRED FAA CLAUSES

Commercial Lease and Use Agreement (Duncan Aviation Kellogg Hangar) 14

Commercial Lease and Use Agreement (Duncan Aviation Kellogg Hangar) 15

13.1.1.3.4. directing the winding up or liquidation of Lessee and such

Commercial Lease and Use Agreement (Duncan Aviation Kellogg Hangar) 16

Commercial Lease and Use Agreement (Duncan Aviation Kellogg Hangar) 17

13.3. Default by Lessor; Remedies of Lessee

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15.1.2.1. Nothing contained herein shall be construed or preclude Lessee from

Commercial Lease and Use Agreement (Duncan Aviation Kellogg Hangar) 19

18. LICENSES, CERTIFICATES, AND PERMITS

Commercial Lease and Use Agreement (Duncan Aviation Kellogg Hangar) 20

Commercial Lease and Use Agreement (Duncan Aviation Kellogg Hangar) 21

Commercial Lease and Use Agreement (Duncan Aviation Kellogg Hangar) 22

Commercial Lease and Use Agreement (Duncan Aviation Kellogg Hangar) 23

Commercial Lease and Use Agreement (Duncan Aviation Kellogg Hangar) 24

28. SURRENDER PREMISES

Commercial Lease and Use Agreement (Duncan Aviation Kellogg Hangar) 25

Commercial Lease and Use Agreement (Duncan Aviation Kellogg Hangar) 26

Lessor with a copy to:

City of Battle Creek City of Battle Creek

Lessee with a copy to:

Duncan Aviation, Inc. Duncan Aviation, Inc.

Commercial Lease and Use Agreement (Duncan Aviation Kellogg Hangar) 27

CITY OF BATTLE CREEK: ATTEST:

Commission Expires: _________

DUNCAN AVIATION, INC.: ATTEST:

NOTARY: Date: ________________________

Commission Expires: _________

Commercial Lease and Use Agreement (Duncan Aviation Kellogg Hangar) 28

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