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HomeMy WebLinkAbout021269 ORD - 10/22/1991AN OI?IIINANCE AUTHORIZING THE EXECUTION OF A 10 YEAR LEASE AGREEMENT BETWEEN CITY OF CORPUS CHRISTI, TEXAS, AND CORPUS CHRISTI AIRPORT DEVELOPMENT CORPORATIOi., .._PPROVING AND AUTHORIZING EXECUTION OF A 10 YEAR SUBLEASE BY CORPUS CHRISTI AIRPORT DEVELOPMENT CORPORATION TO SEMTECH CORPUS CHRISTI CORPORATION OF THE PROPERTY LEASED TO CORPUS CHRISTI AIRPORT DEVELOPMENT CORPORATION; AUTHORIZING CITY OF CORPUS CHRISTI TO EXECUTE A 20 YEAR LEASE WITH SEMTECH CORPUS CHRISTI CORPORATION (ON THE SAME TERMS AND CONDITIONS) UPON TERMINATION OF THE 10 YEAR LEASE AND SUBLEASE ABOVE REFERENCED; AND PROVIDING FOR PUBLICATION. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS: SECTION 1. That the City Manager is hereby authorized to execute a 10 year lease agreement with Corpus Christi Airport Development Corporation, a substantial copy of which is attached hereto and made a part hereof, marked Exhibit "A," included in Exhibit "A" is a metes and bounds property description of the property herein leased. SECTION 2. That the City Council approves and the City Manager is hereby authorized to execute a 10 year sublease agreement between Corpus Christi Airport Development Corporation and Semtech Corpus Christi Corporation, a substantial copy of which is attached hereto and made a part hereof as Exhibit "B." SECTION 3. That the City Council hereby approves and authorizes the City Manager to execute a 20 -year lease with Semtech Corpus Christi Corporation on the same terms and conditions as the sublease herein approved, except that the land rental rate shall be at the fair market value rental rate, (1) in the event Semtech exercises its option to purchase the building as set out in Exhibit "B," or (2) at the expiration of the 10 year lease and sublease. SECTION 4. Publication shall be made in the official publication of the City of Corpus Christi as required by the City Charter of the City of Corpus Christi. AGS000.033.kp 021269 MiF11 MEU. STATE OF TEXAS COUNTY OF NUECES MODIFICATION OF LEASE $ $ $ This Modification of Lease is made and entered into and year hereinbelow stated, by and between the City Christi, a Texas municipal corporation, (the "City") Christi Airport Development Corporation, a Texas corporation, (the "Lessee"); W ITNESSET H: City does by these presents lease and demise unto Lessee, and Lessee hereby leases from City, that certain tract of land situated in the City of Corpus Christi, Nueces County, Texas, described as follows: on the day of Corpus and Corpus non-profit Being a portion of land out of Block Twenty -Three (23), J. C. RUSSELL FARM BLOCKS, a Subdivision of the City of Corpus Christi, Nueces County, Texas, more specifically described on Exhibit "A" attached hereto. 1. DEFINITIONS: For the purposes of this Modification of Lease each of the following words or terms shall have the following meaning, unless a different meaning clearly appears from the context and manner in which each such word is used, to -wit: "Agreement of Sublease" - the Agreement of Sublease covering the Leased Premises entered into on the date hereof between the Corpus Christi Airport Development Corporation, as Landlord, and Semtech Corpus Christi Corporation, as Tenant. "Building" - the building constructed by Lessee containing no less than 25,000 square feet on the Leased Land together with other improvements related thereto. "FAA" - Federal Aviation Administration and its successor agency, or agencies, if any. "Indebtedness" - the Promissory Note of even date herewith in the original principal sum of $575,000 executed by Lessee payable to the order of First City, Texas - Corpus Christi and secured by the Renewal Deed of Trust. "Indenture" - the Indenture of Mortgage and Deed of Trust dated as of December 31, 1973, by and between the Lessee and First City, Texas - Corpus Christi, as Trustee, securing the $1,750,000 in tax-exempt bonds originally issued to finance the construction of the Building. "Leased Land" - the tract of land hereinabove described. "Leased Premises" - the Leased Land and Building. "Renewal Deed of Trust" - the Deed of Trust, Assignment of Leasehold, Security Agreement and Financing Statement executed by Lessee in favor of First City, Texas - Corpus Christi, as Mortgag- ee, renewing and extending the terms of the Indenture covering the Leased Premises. 2. MODIFICATION OF PRIOR LEASE: This Modification of Lease amends and restates that original Agreement of Lease between the parties hereto dated December 31, 1973. Such original Agreement of Lease is superseded hereby and is replaced in its entirety as of the date hereof by this instrument. 3. TERM: This Lease shall commence as of the effective date hereof and continue thereafter for a term of thirty (30) years, subject to earlier termination as provided herein. 4. USE: The Leased Land and Building (collectively the "Leased Premises") are to be used for the purposes of manufactur- -2- ing, warehousing, offices, and any other lawful purpose and in accordance with the Burke Master Plan for City Airport Development (on file in the official records of the City of Corpus Christi, Texas) as approved by the FAA. 5. RENTAL: During the term of this Lease, the annual rentals due hereunder shall be the following: During the first four (4) years of the term of this Lease, representing the remaining term under the original Agreement of Lease, the annual rental shall be the sum of $1,970 per year. During the next six (6) years of the term of this Lease, the annual rental shall be the sum of $3,940 per year. The rentals due for the remaining twenty (20) years of the term of this Modification of Lease shall be established in the manner provided in the Lease Rate Adjustment provisions of this Lease. All rentals for the Leased Premises due under this Modifica- tion of Lease shall be payable in advance in equal quarterly installments, the first quarterly installment being due and payable to the City on the effective date of this Modification of Lease, with a like payment to be due on the first day of every third month thereafter during the term hereof. All rentals are payable at City Hall in Corpus Christi, Nueces County, Texas. 6. MAINTENANCE: The Lessee shall cause the Leased Premises to be kept in good condition and repair during the term of this Lease and upon the termination hereof shall deliver the same to city in good condition, ordinary wear and tear, damage by fire or other casualty, acts of God, riot and civil commotion, excepted. Lessee shall require its Tenant to be responsible for and shall perform, or cause to be performed, maintenance, including custodial -3- maintenance, and repair of the Leased Land and Building. Lessee shall require its Tenant at all times to: a. Perform all routine maintenance and ordinary repairs and inside painting, of a quality not inferior to the original material and workmanship. b. Perform all routine maintenance and ordinary repairs on all heating, cooling, and ventilation systems, and all electrical systems. c. Perform all routine maintenance and ordinary repairs to the exterior of the Building, including without limitation the roof. d. Remove all waste, including without limitation hazardous waste, waste oils and lubricants, and empty contain- ers which held hazardous products, from the Leased Premises. e. Perform all routine maintenance and ordinary repairs on all parking lot and driveway areas, and maintain all landscaped areas. 7. TAXES: Lessee shall cause to be paid all taxes and assessments of every nature, kind and description lawfully levied against the Leased Premises and all personalty situated on the Leased Premises legally classified as personal property. 8. HAZARD INSURANCE: Lessee shall maintain or cause to be maintained at least the following insurance coverages: a. Fire and extended coverage insurance with vandalism and malicious mischief endorsements in the amount of 80% of the replacement costs of the Building; b. Such other hazard insurance coverages as may be reasonably required from time to time by City and usually placed on buildings of similar character in Corpus Christi, Texas. -4- The insurance coverages set forth in subparagraphs a and b above are hereinafter sometimes collectively called "hazard insurance." All such hazard insurance policies shall name City, Lessee and Lessee's Tenant under that Agreement of Sublease as insureds, as their interests may appear, and shall contain a loss payable clause in favor of the Mortgagee under the Renewal Deed of Trust. Lessee shall cause such hazard insurance policies or copies thereof, to be delivered to City and the Mortgagee under that Renewal Deed of Trust. 9. DAMAGES: If the Building is damaged in an amount in excess of $30,000 by any cause insured against under the hazard insurance policies, the following shall occur: a. Lessee shall have the option either to terminate and cancel this Lease or to restore the Building, as hereinafter provided, and to continue this Lease. Such election shall be made by written notification to the City within sixty (60) days after the date of such damage. In the event of cancella- tion of this Lease, then the proceeds from the hazard insur- ance policy shall first be paid to Mortgagee under the Renewal Deed of Trust, to the extent of any outstanding Indebtedness and the accrued interest thereon to date of payment, and the remainder, if any, shall be payable to City. If Lessee elects to cancel this Lease and the insurance proceeds are not sufficient to pay off all the outstanding Indebtedness and the accrued interest thereon to date of payment, then Lessee shall pay the remaining balance due. In the event this Lease is not canceled as hereinabove provided, then Lessee shall promptly restore or cause to be restored the Building to the extent the insurance proceeds will permit, and the title to such restoration shall vest in City upon completion of the restoration work. b. In the event Lessee elects to restore the Building, all funds collected from the hazard insurance policies shall be delivered to and used by Lessee (or the Tenant under that Agreement of Sublease) to restore the Building. -5- c. In the event the Lease is not canceled, Lessee shall continue to pay the rental provided for in this Lease Agree- ment. 10. LIABILITY INSURANCE: Lessee shall cause to be carried the following policies of liability insurance by Lessee's Tenant under that Agreement of Sublease: a. Comprehensive general liability insurance coverage with limits of not less than $500,000 per person for bodily injury or death, $1,000,000 per occurrence for bodily injury or death, and $100,000 per occurrence for property damage or a combined single limit coverage of not less than $1,000,000. Such policy shall include endorsements for contractual liability covering the Lessee's Tenant's obligations under that Agreement of Sublease, and personal injury liability extending to claims arising from employees of Lessee's Tenant. b. Automobile liability insurance covering all owned, hired and non -owned automobiles used in connection with Lessee's Tenant's operations with limits not less than $500,000 per person for bodily injury or death, $1,000,000 per occurrence for bodily injury or death and $100,000 per occurrence for property damage, or a combined single limit coverage of not less than $1,000,000. c. Workers' Compensation Insurance as required by the laws of the State of Texas and employers' liability insurance with minimum limits of liability of $100,000. The workers' compensation insurance shall be endorsed to waive any rights of subrogation the insurance company may acquire by reason of the payment of any claims against the City or Lessee and any of its respective officers, directors, employees, agents and attorneys. The insurance coverages as set forth in subparagraphs a, b and c above are hereinafter sometimes collectively called the "liability insurance." All such liability insurance policies shall name the City and Lessee as additional insureds. 11. NOTICES OF INSURANCE: No insurance policies required under this Lease, whether for hazard insurance or liability insurance, shall be canceled, or materially changed or not renewed without 30 days prior written notice to the City, addressed to the -6- attention of the Director of Aviation. Copies of such insurance policies shall be promptly provided to the City, upon the City's written request. Failure to maintain such insurance coverages for the entire term of this Lease shall be grounds for terminating this Lease. 12. UTILITIES: Lessee agrees to cause to be paid when due all lawful charges for electricity, power, gas, water and any other utilities used by it or its sublessees upon and in the operation of the Leased Premises. 13. SUBLEASE: Upon receipt of the City's prior written approval exercised by the City Manager, which shall not be unreasonably withheld, Lessee may sublease or assign the Leased Premises and the leasehold estate created hereby for the remainder of the term of this Lease; but, notwithstanding any such assignment or sublease, Lessee shall remain liable to City for performance of all the terms, conditions and provisions of this Lease. Any sublease or assignment hereof shall conform to the terms of this Lease. Lessee shall promptly notify City of any sublease or assignment of this lease by giving written notice thereto to City. City acknowledges receipt of notice of the sublease to Semtech Corpus Christi Corporation under that Agreement of Sublease referenced herein. 14. COMPLIANCE WITH LAWS: Lessee shall require its Tenant to comply with all laws, ordinance, orders, rules, regulations, and requirements of all federal, state, and local governmental authorities having jurisdiction over the Leased Premises. 15. INDEMNITY: The Lessee and the Tenant under that Agreement of Sublease or assignee thereof shall forever save and -7- hold harmless the City from any and all claims, demands, damages, injuries and causes of action occasioned by them, their agents, servants or employees to any person, persons, legal entities, or property, by virtue of the operation of the business of said Lessee, said Tenant, or their assignees on said Leased Premises, or in connection with the operation of said business, whether on said Leased Premises or otherwise. 16. ALTERATIONS: Lessee may make or permit to be made, such alterations and modifications of, and additions to, the Leased Premises as Lessee, or its Tenant under that Agreement of Sublease, may deem desirable for the use thereof and may, at Lessee's or such Tenant's option and without cost to City, at any time and from time to time do any one or more of the following: a. Alter or remodel the Building or other improvements on the Leased Premises, provided the rental value of the Building or improvements so altered or remodeled is not adversely affected thereby; b. Construct an addition, or additions thereto, and install any fixtures, machinery and equipment, provided, that any such construction and installation shall be in accordance with applicable laws, ordinances, rules and regulations; c. Demolish and remove from the Leased Premises any building or improvement which in the judgment of Lessee, or its Tenant under that Agreement of Sublease, has become unfit for use, obsolete, surplus or is no longer necessary for operations of the Lessee, or such Tenant, provided, if the property to be demolished and removed shall have an original construction cost, or an allocable purchase cost to Lessee, in excess of $100,000 (or, in the event that such cost, when taken together with the original construction cost, or allocable purchase cost to Lessee, of property previously demolished and removed by Lessee, or its Tenant, for which Lessee, or its Tenant shall not have provided replacements, shall exceed $100,000) the City shall be entitled to condition its consent to such demolition and removal on the receipt from Lessee, or its Tenant, of an undertaking, satisfactory to City, that Lessee, or its Tenant, will at its own expense (or pursuant to arrangements reasonably satisfactory to City) construct on the Leased Land new improvements to the extent reasonably necessary to compensate for such loss of rental -8- value of the Leased Premises as may result from such demoli- tion and removal. In determining whether there has been a net diminution of such value, consideration shall be given to any new improvements Lessee, or its Tenant, may have constructed from time to time on the Leased Premises, in addition to those constructed as specific replacements for property demolished and removed; but in no event shall any demolition or removal of the Building, as hereinabove defined, whether in one removal or demolition or a series thereof, amounting at any time to fifty percent (50%) or more of the permanent, humanly occupiable square footage of the Building be effected without the approval of City; and d. Construct an additional new building or buildings on the Leased Premises. Plans and specifications for the foregoing alterations and modifications shall be subject to approval of City if such alterations or modifications involve an expenditure or scope of work in excess of $50,000.00 in value, and such approval shall not be unreasonably withheld. At the expiration or termination of this Lease, Lessee, or its Tenant, shall leave the Leased Premises in good condition, allowance being made for ordinary wear and tear, damage by fire or other casualty, acts of God, riot and civil commotion, and Lessee, or its Tenant, shall not be required to restore the Leased Premises to the condition in which the Leased Premises were in as of the commencement of the term hereof, it being agreed that City shall accept the Leased Premises with such alterations, remodeling, additions, or new construction, as may have been made pursuant to authorization contained in this paragraph. Lessee agrees that it will not permit or allow any mechanic's, materialman's, or other liens to stand against the Leased Premises for work or materials furnished Lessee, or its Tenant, in connection with any such alterations, remodeling, additions or new construction, it being provided, however, that Lessee, or its Tenant, shall have the right -9- Tenant, shall at its expense repair or cause to be repaired any damage caused to the Leased Premises by virtue of the removal thereof. 19. FINANCIAL REPORTS: Lessee shall furnish to City a financial report relating to Lessee's financial condition annually during the term of this Lease, and Lessee shall cause to be furnished to the City a financial report of the Tenant and Tenant's Guarantor under that Agreement of Sublease referenced herein relating to such parties financial condition annually during the term of this Lease. 20. CONDEMNATION: In the event of the commencement, prosecution or consummation during the term of this Lease of any condemnation proceeding, or proceedings in eminent domain (herein- after called "condemnation"), covering, touching or affecting all or any part of the Leased Premises, City and Lessee at their option may prosecute their respective claims against the public or private body designated as the taking authority on account of any such taking or appropriation of the Leased Premises, or any part thereof, and receive their respective awards as provided by law. However, if such proceeds are not used to restore or improve the Leased Premises, then City shall pay its portion of such proceeds (except as to that portion allocable to the Leased Land) to Lessee as consideration for the diminution of the Leased Premises herein bargained for. If such proceeds are not used to restore or improve the Leased Premises, then Lessee shall pay the condemnation proceeds to the Mortgagee under the Renewal Deed of Trust to the extent sufficient in amount to pay all outstanding Indebtedness. -11- If there is a taking or a partial taking sufficient to impair the business operations of Lessee, or its Tenant under that Agreement of Sublease, then Lessee shall have the option to terminate and cancel this Lease; however, such cancellation shall not be effective unless Lessee pays an amount sufficient to pay all outstanding Indebtedness, after reduction for any condemnation funds applied against said Indebtedness. 21. WAIVER OF LIEN: City hereby waives the statutory landlord's lien on any property of Lessee or its Tenant placed on the Leased Premises. 22. MORTGAGES: (a) Lessee borrowed the funds required to pay all costs of constructing the Building pursuant to the Indenture. The Indebtedness represents the remaining amounts owing pursuant to the Indenture as of the effective date of this Modification of Lease. Lessee is obligated to pay the principal and interest on the Indebtedness from revenues derived by Lessee from its sublease of the Leased Premises pursuant to the Agreement of Sublease. The Leased Land and Building are owned by City, subject to the terms of this Lease. (b) Any rights retained by the City in this Lease shall be and remain subordinate to the rights of the Mortgagee under the Renewal Deed of Trust so long as there is any outstanding Indebted- ness secured thereby. (c) Under no circumstances shall City be liable for any bonds, notes or any other indebtedness incurred by Lessee, the Tenant under that Agreement of Sublease, their successors or assigns. -12- 23. TITLE TO BUILDING: Title to all buildings and all permanent improvements annexed to the realty under the terms of this paragraph is vested in the City. 24. DEFAULT: If Lessee shall violate any of the terms and conditions it has obligated itself to fulfill and comply with under this Lease, or shall fail to cause to be maintained the hazard insurance and liability insurance in the amount set out herein, or shall fail to cause all taxes assessed to be paid prior to penalties being owed, or if the Building remains unoccupied for twelve (12) months, City by notice may advise Lessee that such violation has occurred; and unless Lessee shall within sixty (60) days after such notification commence and prosecute with diligence the curing of such violation, City may, after such 60 -day period declare this Lease ended and may re-enter the Leased Premises, with or without process of law and expel, move and put out the Lessee and any other person or persons occupying the same, using such force as it may deem necessary, and repossess the Leased Premises, without prejudice to its rights to collect the entire rental due and to become due under the terms of this Lease. The provisions this paragraph notwithstanding the rights of the City set forth this paragraph shall be subject to the rights of the Mortgagee set forth in the Renewal Deed of Trust. In addition to the notices to be sent Lessee hereunder, City at the same time notices are sent to Lessee, shall send copies of such notices to the Mortgagee under the Renewal Deed of Trust if there is any outstanding Indebtedness, and to the Tenant under that Agreement of Sublease of Lessee, if the Leased Premises are subleased. Such Tenant and Mortgagee, in addition to Lessee, may -13- of in as whether or not any federal agency or any state or local environmental agency has taken or threatened any action in connection with the presence of any Hazardous Materials. The foregoing indemnity shall survive the expiration of the Lease. in the event Lessee fails, after reasonable notice, to pay any amounts described in this provision, City may, but shall not be obligated to, cause the Hazardous Materials to be removed from the Leased Land and the cost of such removal shall be added to the rentals due hereunder. The City shall have the right to conduct an environmental audit of the Leased Land and Lessee shall cooperate in the conduct of such environmental audit. With respect to liabilities for Hazardous Materials arising from conditions prior to the effective date of this Modification of Lease, Lessee's Tenant under that Agreement of Sublease has assigned to Lessee its rights and remedies concerning such Hazardous Materials liabilities contained in that sale and purchase agreement between said Tenant and the prior holders of the leasehold interest under that original Agreement of Sublease dated December 31, 1973. Lessee hereby assigns such rights and remedies to the City, without recourse upon Lessee. Lessee's Tenant has expressly not assumed any liability for Hazardous Materials releases prior to the effective date of this Modification of Lease. Lessee's Tenant has agreed to cooperate with the City and Lessee in the enforcement of any such rights and remedies against said Tenant's predecessors in interest. Lessee hereby assigns to the City its rights and remedies received from Lessee's Tenant described above, and Lessee agrees to cooperate with the City in any action for enforcement of same. Any such actions may be brought by the City, in its name alone or jointly with Lessee and its Tenant, provided that neither Lessee nor its Tenant shall be responsible for any court costs, attorney's fees or other claims or liabilities associated with such action. -16- 29. NOTICES: All notices required writing and deemed to have been given when sent by registered mail or certified mail as follows: To Lessee: hereunder shall be in Corpus Christi Airport Development Corporation P. O. Box 640 Corpus Christi, Texas 78403 To City: City of Corpus Christi, Texas P. O. Box 9277 Corpus Christi, Texas 78469 Attn: Director of Aviation Such addresses may be changed by notice. 30. AMENDMENT: No amendment, modification, or alteration of the terms hereof shall be binding unless the same is expressed in writing and executed by duly authorized representatives of the parties hereto. 31. ATTORNEY'S FEES: Any party to this Lease who is a prevailing party in any legal proceeding against any other party brought under or with relation to this Lease shall be additionally entitled to recover court costs, reasonable attorney's fees, and all other out-of-pocket costs of litigation, including deposition, travel and witness costs, from the non -prevailing party. 32. LIENS: Lessee shall not permit any mechanics', material - men's or other liens to be fixed or placed against the Leased Premises and agrees immediately to discharge (either by payment or by filing the necessary bond, or otherwise) any mechanics', materialmen's or other lien which is allegedly fixed or placed -17- To the Tenant under that Agreement of Sublease: Semtech Corpus Christi Corporation 121 International Boulevard Corpus Christi, Texas 78406 To Mortgagee: First City, Texas -Corpus Christi P. O. Box 4666 Corpus Christi, Texas 78469 the parties hereto by written against the Leased Premises. Lessee and its Tenant reserve the right to contest the reasonableness of any such charges or impositions against the Leased Premises, and upon providing reasonable security to assure their performance, the City agrees not to interfere with such contested proceedings or otherwise declare a default due to the placement of a lien against the Premises. 33. SUCCESSORS: The provisions of this Lease shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. 34. ENTIRE AGREEMENT: This Lease contains the entire agreement between the parties hereto, and no representations, warranties, expressed or implied, inducements, promises or agreements, oral or otherwise, between the parties not embodied herein shall be of any force or effect. 35. EARLY TERMINATION OF SUBLEASE: (a) The Agreement of Sublease provides, "Tenant shall have the right to terminate this Sublease at any time during the first ten (10) years hereof by paying to [Lessee] a sum equal to the aggregate principal amount of the outstanding [Indebtedness], plus the interest which will accrue to the date the [Indebtedness] is paid, plus the remaining annual rental payments due for the Leased Land through the date of said termination." In the event the Tenant under that Agreement of Sublease exercises the option to terminate the Agreement of Sublease in accordance with the quoted provision, this Modification of Lease shall terminate upon such payment and all of the City's right, title and interest in the Leased Premises shall be released -18- from the encumbrance of this Lease, the Sublease and any mortgage. (b) Lessee's have the option to for the successive Tenant under that Agreement of Sublease shall terminate its occupancy of the Leased Premises two additional ten (10) year periods of this Modification of Lease term upon the following terms and conditions. Not more than two (2) years nor less than 180 days prior to the tenth (10th) anniversary and twentieth (20th) anniversary, respectively, of the Lease term, Lessee's Tenant shall have the option to provide Lessee and City written notice of its intent to cause an early termination of this Lease. Said termination shall be effective upon such tenth (10th) or twentieth (20th) anniversary of this Modification of Lease, whereupon this Lease shall terminate. (c) Upon termination of this Lease, all right, title and interest of Lessee's Tenant in the Leased Premises and Building shall cease. 36. RIGHT OF FIRST REFUSAL: City grants to Lessee and its Tenant under that Agreement of Sublease a right of first refusal during the term of this Modification of Lease to lease the 220 -foot strip adjacent to the west side of the Leased Land as shown on Exhibit "A" attached hereto in accordance with the terms and conditions of this paragraph. In the event City obtains an offer to lease said 220 -foot strip from a qualified tenant on terms and conditions acceptable to City, City agrees to notify Lessee and its Tenant of the rental rate, terms and conditions of such offer and afford Lessee and its Tenant the opportunity to lease said property at the same rental rate, terms and conditions. Lessee and its Tenant shall have thirty (30) days from the date of written notice of the offer to tender an executed written lease containing -19- identical terms to City at the notice address provided herein. Notice of the offer to lease shall be deemed given when deposited by City in the U.S. mail, postage prepaid, properly addressed to Lessee and its Tenant and mailed by certified mail, return receipt requested. In the event City fails to receive in response a written contractual offer by 5:00 p.m. (Corpus Christi time) on the 30th day following the date of notice of the offer to lease, the right of first refusal hereunder shall terminate and be of no further force or effect. The time period allowed for consummating the transaction and other terms and conditions of the lease agreement shall be the same as set forth in the notice of the offer to lease except as otherwise agreed by City, Lessee and its Tenant. 37. OPTION TO PURCHASE BUILDING: Lessee and its Tenant under the Agreement of Sublease shall have the option during the first ten (10) years of the term of this Sublease to purchase the Building and improvements related thereto located on the Leased Land from the City for a purchase price of $500,000, as adjusted by any increases in the Consumer Price Index maintained by the U.S. Department of Labor (or any successor index maintained on a comparable basis by such Department, or any successor agency) from the date of this Lease; provided, however, that in the event such option is exercised prior to the expiration of the first ten (10) years of the term of this Lease, the purchase price shall be increased by amount equal to the balance owing by Lessee on the Indebtedness incurred to finance the construction of said Building and improvements. Upon the exercise of said purchase option, the City agrees to convey title to the Building by General Warranty -20- Deed and furnish Lessee's Tenant an Owner Policy of Title Insur- ance, at said Tenant's expense. 38. LEASE RATE ADJUSTMENTS: During the remainder of the Lease term following the initial ten-year period of this Modifica- tion of Lease, the Lease rates due hereunder shall be payable as follows: (a) In the event the option to purchase the Building from the City has been exercised, the rentals shall be based upon Fair Market Value (FMV) to be calculated as follows: The annual rental for the Leased Land shall be based on the fair market value of the Leased Land, excluding any value associated with the Building or the improve- ments related thereto, as determined by three appraisals. The City shall pay for one appraiser and Lessee shall pay for one appraiser. The City's and Lessee's appraiser shall choose the a third appraiser, and the City and Lessee shall each pay one-half of the third appraiser's fee. Once the FMV has been determined for the Leased Land, the rental rate shall be adjusted effective on the tenth anniversary of this Modification of Lease and thereafter adjusted annually based on increases, or decreases, and the Consumer Price Index issued by the federal government, or such other successor index, each year. The foregoing procedure to determine the FMV of Leased Land and a new Lease rate shall be repeated on the twentieth anniversary of this Modification of Lease. (b) In the event said option to purchase the Building and improvements as above provided is not exercised, the lease of said Building and improvements may be continued at a rental rate equal to $10,000 per month, being the rental rate in effect for the Building in the tenth year of the Sublease, as such rate is adjusted annually to cover increases in the Consumer Price Index each year. Lessee shall additionally be responsible for the rental for the Lease Land provided above. 39. TERMINATION OF LIABILITIES OF LESSEE: Upon the expira- tion of the initial ten-year period of this Modification of Lease -21- and the full payment of the Indebtedness, Lessee's Tenant's occupancy shall continue thereafter as a direct lessee of the City under the terms and conditions of this Lease, and Lessee shall be under no further obligation or liability to either Lessee's Tenant or the City for the continuation of this Lease or continue as a party hereto. 40. FAA APPROVAL: All terms and conditions of this Lease, and any amendments hereto, and any sublease and any amendments thereto, are subject to FAA's prior approval. If FAA requires any modification of this Lease and/or any Sublease or any amendment to same prior to its approval, such modification will be immediately furnished to Lessee and its Tenant for their review. Lessee and its Tenant reserve the right to withdraw any such amendment in the event the FAA modifications are not acceptable. 41. FAA AGREEMENT WITH CITY: This Lease and any Sublease is subordinate to provisions of any existing or future agreement between thereof the City and the United States of America or any agency related to the operation, development, or maintenance of the City's Airport, the execution of which has been or may be required as a condition precedent to the expenditure of federal funds for the development of the Airport. Should any such agreement require modification of this Lease and any Sublease, such modification will immediately be incorporated into the Lease and Sublease terms without need for official action on the part of the City or Lessee; provided however, that in the event such modifica- tion materially impairs the ability of Lessee's Tenant to continu- ous business operations on the Leased Premises to the full extend authorized under the Lease and Sublease, such Tenant shall have -22- ninety (90) days following receipt of notice of such modification to elect to terminate its obligations under the Sublease, whereupon Lessee's obligations under this Lease shall be terminated. The effective date of such termination shall be as set forth in said Tenant's notice of termination, and on such effective date all liability for further rentals due hereunder shall cease. Notwith- standing the foregoing, in the event any indebtedness remains secured under the Renewal Deed of Trust at the time of such termination, such indebtedness shall be paid in full in a lump sum by said Tenant as a condition of termination of the Sublease and this Lease. 42. NONDISCRIMINATION: (a) Lessee assures that it will undertake an affirmative action program, as required by 14 Code of Federal Regulations Part 152, Subpart E, to insure that no person shall on the grounds of race, color, creed, national origin, or sex be excluded from participating in any employment activities covered by 14 Code of Federal Regulations Part 152, Subpart E. Lessee assures that no person shall be excluded on these grounds from participating in or receiving the services or benefits of any program or activity covered by this subpart. Lessee assures that it will require that its covered suborganizations provide assuranc- es to Lessee that they similarly undertake affirmative action programs and that they will require assurance from their suborgani- zations, as required by 14 Code of Federal Regulations Part 152, Subpart E, to the same effect. (b) Lessee for itself and its successors in interest, and assigns, as a part of the consideration hereof, does hereby covenant and agree as a covenant running with the land that: (1) -23- no person on the grounds of race, color, or national origin shall be excluded from participating in, denied the benefits of, or be otherwise subjected to discrimination in the use of said facili- ties, (2) that in the construction of any improvements on, over, or under such land and the furnishing of services thereon, no person on the grounds of race, color, or national origin shall be excluded from participating in, denied the benefits of, or otherwise subject to discrimination, (3) that Lessee shall use the Premises in compliance with all other requirements imposed by or pursuant to 49 CFR Part 21, Nondiscrimination in Federally Assisted Programs of the Department of Transportation, and as said regulations may be amended. (c) That, in the event of breach of any of the proceeding nondiscrimination covenants, after written notice of default and opportunity to cure as provided herein the City shall have the right to terminate this Lease and to reenter and repossess said land and the facilities thereon, and hold the same as if said Lease had never been made or issued. 43. HEIGHT RESTRICTIONS: Lessee shall require its Tenant to restrict the height of structures, objects, or natural growth and other obstructions on the Leased Premises to such a height as to comply with Federal Aviation Regulations, Part 77, as same may be amended. 44. NONINTERFERENCE: Lessee shall require its Tenant to prevent any use of the Leased Premises which would interfere with or adversely affect the operation or maintenance of the Airport, or otherwise constitute a hazard to the Airport. -24- 45. RIGHT TO AIRSPACE: City reserves to itself, its successors and assigns, for the use and benefit of the public, a free and unrestricted right of flight for the passage of aircraft in the airspace above the surface of the Leased Premises, together with the right to cause in such airspace such noise as may be inherent in the operation of aircraft, now known or hereafter used for navigation of or flight in the air, using said airspace for landing at, taking off from, or operating on or about the Airport. 46. FORCE MAJEURE: In case by reason of force majeure either party hereto shall be rendered unable wholly or in part to carry out its obligations under this Lease, then except as otherwise expressly provided in this Lease, if such party shall give notice and full particulars of such force majeure in writing to the other party within a reasonable time after occurrence of the event or cause, the obligations of the party giving such notice, other than the obligation of the Lessee's Tenant to make the rental payments required herein, so far as they are affected by such force majeure, shall be suspended during the continuance of the inability then claimed which shall include a reasonable time for the removal of the effect thereof, but for no longer period, and such party shall endeavor to remove or overcome such inability with all reasonable dispatch. The term "force majeure," as employed herein, shall mean acts of God, strikes, lockouts or other industrial disturbances, acts of public enemy, orders of any kind of the Government of the United States or the State of Texas or any civil or military authority, insurrections, riots, restraining of government and people, epidemics landslides, lightning, earthquakes, fires, hurricanes, storms, floods, washouts, droughts, arrests, civil -25- disturbances, explosions, breakage or accidents to machinery, transmission pipes or canals, partial or entire failure of utilities, shortages of labor, material, supplies or transporta- tion, or any other cause not reasonably within the control of the party claiming such inability. It is understood and agreed that the settlement of existing or impending strikes, lockouts or other industrial disturbances shall be entirely within the discretion of the party having the difficulty and that the above requirements that any force majeure shall be remedied with all reasonable dispatch shall be deemed to be fulfilled even though such existing or impending strikes, lockouts, and other industrial disturbances may not be settled and could have been settled by acceding to the demands of the opposing person or persons. 47. AUTHORITY OF PARTIES: Each party signing this Lease by its signature certifies that it possesses authority to execute this Lease, and all amendments thereto, and be bound thereby, and that all prerequisites to such authorized execution have been accom- plished. 48. NO WARRANTIES: The City does not make any warranty, either express or implied, as to the actual or designed capacity of the Building; as to the suitability or operation of the Building for the purposes specified herein; or as to the condition of the Building or that it will be suitable for Lessee's or its Tenant's purposes or needs. Lessee releases the City from, and the City shall not be liable for, and Lessee will hold City harmless against, any loss or damage to property or any injury to or death of any person that may be occasioned by any cause whatsoever pertaining to the Leased Premises, or the use thereof; provided, -26- that the indemnity in this sentence shall be effective only to the extent of any loss that may be sustained by City in excess of the sums paid for the benefit of City from any insurance carried by Lessee's Tenant with respect to the loss sustained. 49. NONEXCLUSIVITY: Notwithstanding anything herein contained that may be or appear to be to the contrary, it is expressly understood and agreed that the rights granted under this Lease are nonexclusive as to the property comprising the City's airport, and the City herein reserves the right to grant similar privileges to another party or parties on other parts of the airport property. EXECUTED on this day of , 1991. ATTEST: CITY OF CORPUS CHRISTI, TEXAS By: City Secretary Juan Garza City Manager APPROVED: day of , 1991: City Attorney ATTEST: CORPUS CHRISTI AIRPORT DEVELOPMENT CORPORATION By: Secretary President \11\AGMT\AtrLease.150-15/234 -27- EXHIBIT A Being a 6.162 acre tract of land out of Block 23, J. G Russell Farm Blocks as shown by map of record in Volume 3, Page 53, Map Records, Nueces County, Testas, said 6.162 acre tract of land being more particularly described by metes and bounds as follows: Beginning at the intersection of the east boundary line of said Block 23, and the new south right-of-way line of State Highway No. 44, said point being S. 1° 19' 56" E., 240.0 feet from the original northeast comer of said Block 23; thence S. 50 feet to a point in the west right-of-way of the International Drive; Thence S. 1° 19' 56" E. along a line 50' westerly of and parallel to the east boundary of said Block 23, a distance of 50' to the true point of beginning of the herein described tract; thence continuing S. 1° 19' 5C E, a distance of 610.0 feet to the southeast corner of the tract herein described; Thence S. 88° 35' 46" W., with a line that is 660.0 feet south of and parallel to the south right-of-way line of said State Highway No. 44, a distance of 440.0 feet to the southwest corner of the tract herein described; Thence N. 1° 19' 56" W, with a line that is 440.0 feet west of and parallel to the west line of International Drive, a distance of 610.0 feet to the northwest corner of the tract herein described; Thence N. 88° 35' 46" E. along a line 50' southerly of and parallel with the south right-of-way line of State Highway No. 44, a distance of 440.0 feet to the point of beginning and containing 6.16162 acres more or less. STATE OF TEXAS COUNTY OF NUECES AGREEMENT OF SUBLEASE S S This Agreement of Sublease is made and entered into by and between CORPUS CHRISTI AIRPORT DEVELOPMENT CORPORATION, a Texas non-profit corporation, (the "Landlord") and SEMTECH CORPUS CHRISTI CORPORATION, a Texas corporation, (the "Tenant") on the terms and conditions hereinafter set forth. 1. LEASED PREMISES: Landlord subleases unto Tenant and Tenant subleases from the Landlord the following described Leased Land: Being a portion of land out of Block Twenty -Three (23), J. C. RUSSELL FARM BLOCKS, a Subdivision of the City of Corpus Christi, Nueces County, Texas, more particularly described on Exhibit "A" attached hereto. TOGETHER WITH the buildings and improvements located thereon (the Building) which collectively shall herein be referred to as the Leased Premises. 2. TERMINATION OF PRIOR SUBLEASE: This Agreement of Sublease terminates and replaces that prior Agreement of Sublease between Landlord and Power Monolithics, Inc. dated December 31, 1973. Tenant has assumed the rights of occupancy under that prior Agreement of Sublease by one or more assignments, and such prior Agreement of Sublease is superseded hereby and is replaced in its entirety as of the date hereof by this instrument. 3. TERM: The term of this Sublease shall be for a period of thirty (30) years commencing as of January 1, 1991, subject to the provisions on early termination contained herein. 4. USE: The Leased Premises shall be continuously used and occupied during the term of this Sublease by Tenant for no other purpose than for the operation of a light manufacturing facility in compliance with all applicable laws and regulations. 5. RENTAL: (a) Tenant agrees to pay to Landlord, or its designated agent, at the address specified herein or such other place as Landlord shall designate, for the initial ten (10) years of the Sublease term the sum of ONE MILLION TWENTY THOUSAND ($1,020,000), payable in one hundred twenty (120) consecutive monthly installments, without demand, in advance on the first day of each month during the term hereof, as follows: Thirty-six (36) installments of $6,000.00 each; Thirty-six (36) installments of $9,000.00 each; and Forty-eight (48) installments of $10,000.00 each. Said sum shall constitute the "Base Rentals" under this Sublease. (b) Tenant shall also pay as Additional Rentals hereunder during the initial ten (10) years of the term of this Sublease the amount of the rent assessed by the City of Corpus Christi, Texas (the "City") for the Leased Land pursuant to the terms and conditions of that Modification of Lease of even date herewith between Landlord and said City as follows: During the first four (4) years of this Sublease, annual rentals of $1,970 per year. During the next six (6) years of this Sublease, annual rentals of $3,940 per year. Said annual rentals for the Leased Land shall be payable in advance in equal quarterly installments, the first quarterly installment being due and payable on the effective date of this Agreement of Sublease, with a like payment to be due on the first day of every -2- third month thereafter during the term hereof. Landlord agrees to promptly remit such Additional Rentals to the City within 60 days of receipt from Tenant and indemnify and hold harmless Tenant from any claims by the City for non-payment under the Modification of Lease for any periods in which Tenant has timely paid the Addition- al Rentals. In the event Landlord fails to promptly remit such sums as required herein, Tenant reserves the right to pay such Additional Rentals directly to the City in discharge of its obligations under this provision. (c) The Base Rentals and Additional Rentals due for the remaining twenty (20) years of the term of this Sublease shall be established in the manner provided in the Lease Rate Adjustment provisions of this Sublease. (d) The obligation of the Tenant to pay the rentals due hereunder shall be absolute and unconditional, irrespective of any rights of setoff, recoupment or counterclaim it might otherwise have against Landlord. The Tenant will not suspend or discontinue any such payment for any cause or terminate this Agreement of Sublease for any cause. Notwithstanding the foregoing, the Tenant may, at its own cost and expense, and in its own name or in the name of the Landlord, prosecute or defend any action or proceedings or take any other action against the Landlord, the City of Corpus Christi, Texas, or any third persons which the Tenant deems reasonably necessary in order to secure or protect its right of use and occupancy and other rights hereunder. 6. MAINTENANCE: Tenant acknowledges that it has fully inspected the Leased Premises and the buildings and improvements thereon, and on the basis of such inspection, Tenant hereby accepts -3- the Leased Premises, and the buildings and improvements situated thereon, as suitable for the purposes for which same are leased, in their present condition, AS IS, and WITH ALL FAULTS. Tenant shall throughout the term of this Sublease take good care of the Leased Premises including the buildings and other improvements located thereon, keep them free from waste or nuisance of any kind, and shall be responsible for and shall perform, or cause to be performed, maintenance, including custodial maintenance, and repair of the Leased Land and Building. Tenant shall at all times: (a) Perform all routine maintenance and ordinary repairs and inside painting, of a quality not inferior to the original material and workmanship. (b) Perform all routine maintenance and ordinary repairs on all heating, cooling, and ventilation systems, and all electrical systems. (c) Perform all routine maintenance and ordinary repairs to the exterior of the Building, including without limitation the roof. (d) Remove all waste, including without limitation hazardous waste, waste oils and lubricants, and empty containers which held hazardous products, from the Leased Premises placed on the Leased Premises by Tenant. (e) Perform all routine maintenance and ordinary repairs on all parking lot and driveway areas, and maintain all landscaped areas. If any repairs required to be made by Tenant hereunder are not made within sixty (60) days after written notice delivered to Tenant by Landlord, Landlord may at its option make such repairs without -4- liability to Tenant for any loss or damage which may result by reason of such repairs, and Tenant shall pay to Landlord upon demand as additional rent hereunder the cost of such repairs plus interest. At the end or other termination of this Sublease, Tenant shall deliver the Leased Premises to the Landlord and City with all improvements located thereon in good repair and condition, reasonable wear and tear excepted. 7. TAXES: As additional rentals hereunder, Tenant agrees to cause to be paid before they become delinquent all real property taxes and assessments lawfully levied or assessed against the Leased Premises or any part thereof, provided, however, Tenant may, at its sole expense dispute and contest same, and in such case, such disputed item need not be paid until finally adjudged to be valid. Tenant shall additionally pay all taxes levied against personal property, equipment, trade fixtures and inventory placed by Tenant in, on or about the Leased Premises. Landlord agrees to cooperate with Tenant in any effort by Tenant to contest, at Tenant's sole cost and expense, the valuation of properties for tax purposes or the method of assessment of ad valorem taxes, including the execution of necessary documents and providing access to any records held by Landlord concerning market value. 8. HAZARD INSURANCE: Tenant agrees to maintain at least the following insurance coverage insuring the Building: (a) Fire and extended coverage insurance with vandalism and malicious mischief endorsements in the amount of 80% of the replacement costs of the Building or to the maximum amount available from the Texas Catastrophe Insurance Pool (if such Pool coverage is the only coverage available to Tenant), whichever is less; (b) Such other hazard insurance coverages as may be reasonably required from time to time by Landlord or the City -5- and usually placed on buildings of similar character in Corpus Christi, Texas. The insurance coverage set forth above is hereinafter sometimes called "hazard insurance." All such hazard insurance policies shall name the Landlord and the City of Corpus Christi as insureds, as their interests may appear, and shall contain a loss payable clause in favor of First City, Texas - Corpus Christi, as Mortgagee. Tenant shall furnish such hazard insurance policies or copies thereof, to the Landlord, the City and said Mortgagee. Tenant shall additionally be solely responsible for any and all property damage insurance coverage for contents and any personal property or equipment on the Leased Premises. 9. DAMAGES: If any building on the Leased Premises is damaged in an amount in excess of $30,000 by any cause insured against under the hazard insurance policies, the following shall occur: (a) Tenant shall have the option either to terminate and cancel this Sublease or to restore said Building, as hereinaf- ter provided, and to continue this Sublease. Such election shall be made by written notification to the Landlord within fifty (50) days after the date of such damage. In the event of cancellation of this Sublease, then the proceeds from the hazard insurance policy shall first be paid to the Mortgagee under the Renewal Deed of Trust, to the extent of any out- standing indebtedness and the accrued interest thereon to the date of payment, and the remainder, if any, shall be payable to City of Corpus Christi. If Tenant elects to cancel this Sublease and the insur- ance proceeds are not sufficient to pay off all the outstand- ing indebtedness and the accrued interest thereon to date of payment owing to said Mortgagee, then Tenant shall pay the remaining balance due. In the event this Sublease is not canceled as hereinabove provided, then Tenant shall promptly restore or cause to be restored said Building to the extent the insurance proceeds -6- will permit; and the title to such restoration shall vest in the City upon completion of the restoration work. (b) In the event Tenant elects to restore the Building, all funds collected from the hazard insurance policies shall be delivered to and used by Tenant to restore the Building. (c) In the event the Sublease is not canceled, Tenant shall continue to pay the rental provided for in this Sub- lease. 10. LIABILITY INSURANCE: Tenant shall carry and pay the premiums for liability insurance of the types and in the limits stated below. Landlord and the City of Corpus Christi shall be endorsed as an additional named insureds by the Tenant with respect to each such policies of insurance other than the insurance required for workers' compensation. (a) Comprehensive general liability insurance coverage with limits of not less than $500,000 per person for bodily injury or death, $1,000,000 per occurrence for bodily injury or death, and $100,000 per occurrence for property damage, or a combined single limit coverage of not less than $1,000,000. Such policy shall include endorsements for contractual liability covering the Tenant's obligations herein, and personal injury liabili- ty extending to claims arising from employees of the Tenant. (b) Automobile liability insurance covering all owned, hired and non -owned automobiles used in connection with Tenant's operations with limits not less than $500,000 per person for bodily injury or death, $1,000,000 per occurrence for bodily injury or death, and $100,000 per occurrence for property damage, or a combined single limit coverage of not less than $1,000,000. (c) Workers' compensation insurance is required by the laws of the State of Texas and employers' liability insurance with minimum limits of liability of $100,000. The workers' compensation insurance shall be endorsed to waive any rights of subrogation the insurance company may acquire by reason of the payment of any claim against the Landlord and any of its respective officers, directors, employees, agents and attorneys. The insurance coverage set forth above is hereinafter sometimes called "liability insurance." -7- Tenant shall furnish to Landlord proof of such insurance coverage in the form of a certificate of insurance, and it shall maintain such coverage in effect and certificates of insurance reflecting such coverage throughout the term of this Sublease. 11. NOTICES OF INSURANCE: No such insurance policies, whether being the hazard insurance or liability insurance policies, shall be canceled, materially changed, or not renewed without thirty (30) days priors written notice to the Landlord and to the City, addressed to the attention of the Director of Aviation. Copies of insurance policies shall be promptly provided to the Landlord or the City upon their written request. Failure to maintain said insurance for the entire term of this Sublease shall be grounds for terminating this Sublease. 12. UTILITIES: Tenant shall be responsible for obtaining water, sewer, electricity, and gas service connections into the Leased Premises; and Tenant shall pay all utility connection charges including meters, if any, and all charges incurred for any utility services used on the Leased Premises, and shall furnish all electric light bulbs and tubes. 13. ASSIGNMENT: During the first ten (10) years of the term hereof, Tenant shall have the right to assign or transfer this Sublease, as to the whole or any part of the Leased Premises without Landlord's written consent; provided that Tenant shall nevertheless remain liable to Landlord for the full payment of rent and Tenant's other obligations under this Sublease. Thereafter, Tenant's rights hereunder may be assigned or sublet upon the prior written consent of the City Manager of the City, which consent shall not be unreasonably withheld. No such consent shall be -8- required, however, for the assumption of Tenant's rights and obligations hereunder pursuant to a corporate merger, consolidation or acquisition of Tenant's stock. 14. LAWS: Tenant agrees to comply with all laws, ordinances, orders, rules, regulations and requirements of federal, state and local governments and all of their departments applicable to the Leased Premises. 15. INDEMNITY: Tenant hereby covenants and agrees at all times to indemnify and save harmless Landlord and the City of Corpus Christi, Texas, their agents, officers, employees, and invitees, and the Leased Premises from and against any cost, liability, damages or expense arising out of any claims of any person or persons whatsoever by reason of the use or misuse of the Leased Premises, parking area, or facilities by Tenant or any person or persons holding under Tenant, and shall indemnify and save harmless Landlord from any penalty, damage, or charge incurred or imposed by reason of any violation of law or ordinance by Tenant or any person or persons holding under Tenant, and shall indemnify and save harmless Landlord and the City from any cost, liability, damages, or expense arising out of the death of or injury to any person or persons or damage to property arising out of Tenant's operations on the Leased Premises. Landlord hereby covenants and agrees at all times to indemnify and save harmless Tenant from and against any cost, liability, damages or expense arising out of any claims of any person or persons whatsoever by reason of the actions of Landlord. 16. ALTERATIONS: Tenant may make such alterations and modifications of, and additions to, the Leased Premises as Tenant -9- may deem desirable for the use thereof and may, at Tenant's option and without cost to Landlord or City, at any time and from time to time do any one or more of the following: (a) Alter or remodel the Building or other improvements on the Leased Premises, provided the rental value of the Building or improvements so altered or remodeled is not adversely affected thereby, provided, that any such alter- ations and remodeling shall be in accordance with applicable laws, ordinances, rules and regulations; (b) Construct an addition, or additions thereto, and install any fixtures, machinery and equipment, provided, that any such construction and installation shall be in accordance with applicable laws, ordinances, rules and regulations; (c) Demolish and remove from the Leased Premises any building or improvement which in the judgment of Tenant has become unfit for use, obsolete, surplus or is no longer necessary for operations of Tenant, provided, if the property to be demolished and removed shall have an original construc- tion cost, or an allocable purchase cost, in excess of $100,000 (or, in the event that such cost, when taken together with the original construction cost, or allocable purchase cost, of property previously demolished and removed by Tenant for which Tenant shall not have provided replacements, shall exceed $100,000) Landlord and the City shall be entitled to condition their consent to such demolition and removal on the receipt from Tenant of an undertaking, satisfactory to City and Landlord that Tenant will at its own expense (or pursuant to arrangements reasonably satisfactory to Landlord and City) construct on the Leased Premises new improvements to the extent reasonably necessary to compensate for such loss of rental value of the Leased Premises as may result from such demolition and removal. In determining whether there has been a net diminution of such value, consideration shall be given to any new improvements Tenant may have constructed from time to time on the Leased Premises, in addition to those con- structed as specific replacements for property demolished and removed; but in no event shall any demolition or removal of any buildings, whether in one removal or demolition or a series thereof, amounting at any time to fifty percent (50%) or more of the permanent, humanly occupiable square footage of the buildings on the Leased Premises be effected without the approval of Landlord and the City; and (d) Construct an additional new building or buildings on the Leased Premises. Plans and specifications for the foregoing alterations and modifications shall be subject to approval of City if such -10- alterations or modifications involve an expenditure or scope of work in excess of $50,000.00 in value, and such approval shall not be unreasonably withheld. Tenant will comply with all City Codes and Ordinances and will acquire and pay for all permits needed in any alterations, additions, modifications, or remodeling of the Building, or new buildings on the Leased Premises. 17. ENTRY: The Landlord and the City, by their officers, employees, agents, and contractors, shall have the right at all reasonable times to enter the Land and Building for the purpose of inspecting same, for emergency repairs to utility systems, and to perform maintenance, repairs, and replacements in any case where Tenant is required to do so and has failed after reasonable notice to do so, in which event Tenant shall reimburse the Landlord and City for the actual cost thereof within thirty (30) days of demand. Tenant shall not be entitled to any abatement or reduction of rent by reason thereof unless such actions of Landlord result in a permanent reduction in the amount of square feet of the Building of more than three percent (3%). During the last six (6) months of the term of this Sublease or any extension thereof, Landlord shall have the right to post "For Lease" or "For Sale" signs on the Leased Premises. During said periods Landlord or its representa- tives shall have the right to show the Leased Premises to prospec- tive purchasers or tenants at all reasonable times. 18. SIGNS: The signs presently located on the Leased Premises are hereby authorized and approved by Landlord. Tenant shall not place any other signs or objects on the roof or any part of the exterior of any building on the Leased Premises nor place any signs, show cases, displays or fences on the sidewalks, parking -11- lots, driveways or exterior of any building on the Leased Premises except as and where first approved in writing by Landlord and the City's Director of Aviation. The size and shape of such signs shall conform to the general appearance of the City's Airport premises, and said signs shall comply with all City ordinances. All said signs shall be kept in a continual state of good repair, and failure to do so may result in approval of said signs being withdrawn and the removal of said signs. Tenant shall remove all signs at the termination of this Sublease. Such installations and removals shall be made in such manner as to avoid injury, deface- ment or overloading of any building or other improvements. 19. FINANCIAL REPORTS: Tenant shall furnish to Landlord and the City of Corpus Christi annual financial reports relating to Tenant and Tenant's Guarantor covering their financial condition each year during the term of this Sublease. 20. CONDEMNATION: In the event of the commencement, prosecu- tion or consummation during the term of this Sublease of any condemnation proceeding, or proceedings in eminent domain (herein- after called "Condemnation"), covering, touching, or effecting all or any part of the leased premises, Landlord, the City and Tenant at their option many prosecute their respective claims against the public or private body designated as the taking authority on account of any such taking or appropriation of the Leased Premises, or any part thereof, and receive their respective awards as provided by law. If the whole of the Leased Premises, or such portion thereof as will make the premises unusable for the purposes herein leased, is subjected to Condemnation, then in either of said events Tenant shall have the option to terminate this Sublease as -12- of the time when possession thereof is taken by public authorities, and rental shall be abated as of that date. Such termination, however, shall be without prejudice to the right of either Landlord or Tenant to recover compensation and damages caused by condemna- tion from the condemnor. 21. WAIVER: No waiver at any time of the right to terminate this Sublease shall impair the right of Landlord to insist upon such termination in the event of subsequent breach or default by Tenant, nor shall the acceptance of rent at any time constitute such waiver of default or waiver of damages, and in addition to any other remedies which Landlord may have, Landlord may apply for and obtain an injunction or use any other legal process to enforce Landlord's rights. 22. MORTGAGES: This Sublease is and shall always be subordinate to that Deed of Trust, Assignment of Leasehold, Security Agreement and Financing Statement (the "Renewal Deed of Trust") in favor of First City, Texas - Corpus Christi, as Mortgagee, of even date herewith executed pursuant to the Modifica- tion of Lease with the City of Corpus Christi, a copy of which is attached hereto as Exhibit "B", together with any and all renewals, extensions or modifications of such Renewal Deed of Trust, however evidenced or arising. Tenant agrees to execute and deliver any instrument, without cost, which may be deemed necessary to further effect the subordination of this Sublease to any such mortgage or mortgages. 23. POSSESSION: Possession of the Leased Premises shall be granted to Tenant at the time of the effective date of this Sublease. -13- 24. DEFAULT: In the event that Tenant shall default in the prompt payment of rent when the same is due, shall fail to at all times during the term of this Sublease maintain hazard insurance and liability insurance in the amount set out herein, shall fail to pay all taxes assessed prior to penalties and/or interest being owed on said taxes, shall fail to occupy said Building for twelve (12) months, shall fail to maintain the Building as set out herein, shall violate any terms and conditions contained herein, or shall violate or omit to perform any of the other provisions of this Sublease, Landlord may, if it so elects, send written notice of such default, violation or omission to Tenant, by mail or other- wise, and unless Tenant shall have completely cured or removed said default within sixty (60) days after the sending of such notice by Landlord, Landlord may thereupon re-enter the Leased Premises, by summary proceedings or by force or otherwise without being liable for prosecution therefor, take possession of said premises and remove all persons and property therefrom, and may elect to either cancel this Sublease or relet the premises as agent for Tenant or otherwise, and receive the rent therefor, applying the same first to the payment of such expenses as Landlord may incur in entering and letting; and then to the payment of the rent payable under this Sublease and the fulfillment of Tenant's covenants hereunder; the balance (if any) to be paid to Tenant who shall remain liable for any deficiency. On any sums due under the terms of this Sublease placed in the hands of an attorney after default or collected through any judicial probate or bankruptcy proceedings, Tenant agrees to pay a reasonable attorney's fee, together with all court costs. Past due installments of rent shall bear interest at the -14- rate of fifteen percent (15%) per annum until paid. In the event Tenant shall continue to hold the Leased Premises, after demand therefor by Landlord, at the termination of this Sublease, or for default or breach of this Sublease, Landlord shall be entitled to institute and maintain a forcible entry and detainer suit in the Justice Court and obtain a writ of possession for the Leased Premises. 25. BANKRUPTCY: In the event that Tenant shall become bankrupt, voluntary or involuntary, or shall make a voluntary assignment for the benefit of creditors, or in the event that a receiver for Tenant shall be appointed, then, at the option of Landlord and upon ten (10) days notice to Tenant or Tenant's representatives, of the exercise of such notice, this Sublease shall terminate. 26. HOLDING OVER: It is agreed and understood that any holding over by Tenant of the Leased Premises at the expiration of this Sublease shall operate and be construed as a tenancy from month to month at a rental of one and one-fourth (1.25) times the then current monthly rental payable directly to the City, and Tenant shall be liable to Landlord and the City for all loss or damage on account of any holding over against the will of the Landlord or the City after the termination of this Sublease, whether such loss or damage may be contemplated at this time or not. All other terms and conditions of the expired lease shall remain in full force and effect during any hold -over period. 27. SEVERABILITY: In the event of litigation on this instrument and should one or more clauses be found invalid, all other provisions of the Sublease are to stand as written. -15- 28. HAZARDOUS MATERIALS: With respect to any substances defined as or included in the definition of "hazardous substances," "hazardous wastes," "hazardous materials" or "toxic substances" under any applicable federal, state or local laws, ordinances or regulations (including, without limitation, friable asbestos and asbestos deemed hazardous by federal or state regulations) (such substances collectively referred to hereinafter as "Hazardous Materials" and such laws, ordinances and regulations together with all rules, orders and permits pursuant thereto collectively referred to hereinafter as "Hazardous Materials Laws"), Tenant: (a) represents that neither Tenant nor any affiliate, employee, or agent of Tenant will store, bury, install, transport, treat or dispose of any Hazardous Materials at, to or from the Leased Premises in violation of any applicable Hazardous Materials Laws, or (ii) will cause or allow the release, discharge, emission, leak, spill or dumping of any Hazardous Materials at or from the Leased Premises except for those releases allowed under applicable Hazardous Materials Laws; (b) covenants to (i) comply with all applicable Hazard- ous Materials Laws with respect to the manufacture, storage, transmission, presence, discharge and removal of Hazardous Materials at or from the Leased Premises, (ii) pay promptly within thirty (30) days of when demand is made the costs of any required removal of any Hazardous Materials from the Leased Premises and keep the Leased Premises free of any lien imposed pursuant to any Hazardous Materials Laws, (iii) not locate nor allow location of any underground storage tanks on the Leased Premises, (iv) not locate any materials containing asbestos of any type or nature on the Leased Premises, and (v) notify Landlord promptly in writing of the commencement of any legal or regulatory proceedings relating to Hazardous Materi- als affecting the Leased Premises; and (c) agrees to indemnify and to hold harmless Landlord, the City of Corpus Christi, Texas, their officers, employees, agents, successors and assigns (the "Indemnitees") from and against, and to reimburse the Indemnitees with respect to, any and all claims, demands, causes of action, loss, damage, liabilities, costs, and expenses (including attorneys' fees and court costs) of any and every kind or character, known or unknown, fixed or contingent, asserted against or incurred by the Indemnitees at any time or from time to time, by reason of or arising out of any violation of any Hazardous Materials -16- Laws occurring since the commencement of Tenant's occupancy of the premises (including, without limitation, all claims, demands, loss, damage, liabilities, costs and expenses in connection with the presence on the Leased Premises or release from or to the Leased Premises of Hazardous Materials disposed of or otherwise released), regardless of whether the act, omission, event, or circumstance constituted a violation of applicable law at the time of existence or occurrence. Tenant's obligations hereunder shall arise upon the discovery of the presence of any Hazardous Materials, whether or not any federal agency or any state or local environmental agency has taken or threatened any action in connection with the presence of any Hazardous Materials. The foregoing indemnity shall survive the expiration of the Sublease. In the event Tenant fails, after reasonable notice, to pay any amounts described in this provision, Landlord may, but shall not be obligated to, cause the Hazardous Materials to be removed from the Leased Premises and the cost of such removal shall be added to the Rentals due hereunder; provided, however, that Tenant may in good faith contest the reasonableness or necessity of any requirement by any federal, state or local environmental agency, and upon Tenant's providing reasonable security to assure its performance, Landlord agrees not to interfere in Tenant's proceedings with such agency. Landlord and the City shall have the right to conduct an environmental audit of the Leased Premises, and Tenant shall cooperate in the conduct of such environmental audit. Nothing herein shall be construed to require Tenant to be responsi- ble for pollution or Hazardous Materials generated by any other uses of the Leased Premises authorized by the City or the Landlord, included but not limited to, oil and gas wells, petroleum pipe- lines, and farming operations. With respect to liabilities for Hazardous Materials arising from conditions prior to the effective date of this Agreement of Sublease, Lessee's Tenant assigns to Landlord, and its assigns, its rights and remedies concerning such Hazardous Materials liabilities contained in that sale and purchase agreement between said Tenant and the prior holders of the leasehold interest under that original Agreement of Sublease dated December 31, 1973. Tenant expressly does not assume any liability for Hazardous Materials releases prior to the effective date of this Agreement of Sublease. Tenant -17- agrees to cooperate with the City and Landlord in the enforcement of any such rights and remedies against Tenant's predecessors in interest. Any such actions may be brought by the City, in its name alone or jointly with Landlord and Tenant, provided that neither Landlord nor Tenant shall be responsible for any court costs, attorney's fees or other claims or liabilities associated with such action. Landlord has assigned to the City its rights and remedies received from Tenant described above in the Modification of Lease referenced herein. 29. NOTICES: All notices, requests or other communications relating to this Sublease shall be made in writing and may be given by (i) depositing same in the United States mail, postage prepaid, certified mail, with return receipt requested, addressed as set forth in this paragraph, or (ii) delivering the same to the party to be notified. Notice given in accordance with (i) hereof shall be effective upon deposit in the United States mail. The notice addresses of the parties hereto shall, until changed in the manner of giving notice is provided herein, be as follows: Landlord: Corpus Christi Airport Development Corporation 1201 N. Shoreline Drive P. O. Box 640 Corpus Christi, Texas 78403 Attn: Director of Aviation Tenant: Semtech Corpus Christi Corporation 121 International Blvd. Corpus Christi, Texas 78406 The City: City of Corpus Christi, Texas P. O. Box 9277 Corpus Christi, Texas 78469 Mortgagee: First City, Texas - Corpus Christi P. O. Box 4666 Corpus Christi, Texas 78469 -18- 30. AMENDMENT: No amendment, modification, or alteration of the terms hereof shall be binding unless the same is expressed in writing and executed by duly authorized representatives of the parties hereto. The City of Corpus Christi shall be made aware of and approve in writing all amendments prior to their execution. 31. ATTORNEY'S FEES: Any party to this Sublease who is a prevailing party in any legal proceeding against any other party brought under or with relation to this Sublease shall be addition- ally entitled to recover court costs, reasonable attorney's fees, and all other out-of-pocket costs of litigation, including deposition, travel and witness costs, from the non -prevailing party. 32. LIENS: Tenant shall not permit any mechanics', material - men's or other liens to be fixed or placed against the Leased Premises and agrees immediately to discharge (either by payment or by filing the necessary bond, or otherwise) any mechanics', materialmen's or other lien which is allegedly fixed or placed against the Leased Premises. Tenant reserves the right to contest the reasonableness of any such charges or impositions against the Leased Premises, and upon Tenant's providing reasonable security to assure its performance, Landlord agrees not to interfere with Tenant's contested proceedings or otherwise declare a default due to the placement of a lien against the Premises. 33. SUCCESSORS: The covenants and agreements herein contained shall inure to the benefit of and be binding upon the parties hereto, their respective heirs, legal representatives, successors and assigns. -19- 34. ENTIRE AGREEMENT: This Sublease contains the entire agreement between the parties hereto, and no representations, warranties, expressed or implied, inducements, promises or agreements, oral or otherwise, between the parties not embodied herein shall be of any force or effect. 35. EARLY TERMINATION OF SUBLEASE: (a) Tenant shall have the right to terminate this Sublease at any time during the first ten (10) years hereof by paying to Landlord a sum equal to the aggregate principal amount of the outstanding indebtedness owing to First City, Texas - Corpus Christi, as Mortgagee, plus the interest which will accrue to the date such indebtedness is paid, plus the remaining annual rental payments due for the Leased Land through the date of said termination. (b) Tenant shall have the option to terminate its occupancy of the Leased Premises for the successive two additional ten (10) year periods of the lease term upon the following terms and conditions. Not more than two (2) years nor less than 180 days prior to the tenth (10th) anniversary and twentieth (20th) anniversary, respectively, of the term of the lease, Tenant shall have the option to provide City written notice of its intent to cause an early termination of this lease. Said termination shall be effective upon such tenth (10th) or twentieth (20th) anniversary of this lease, whereupon this lease shall terminate. (c) Upon termination of this Sublease, all right, title and interest of Tenant in the Leased Premises and Building shall cease. 36. RIGHT OF FIRST REFUSAL: Tenant shall have a right of first refusal during the term of this Sublease to lease the 220 - foot strip adjacent to the west side of the Leased Premises as -20- shown on Exhibit "A" attached hereto in accordance with the terms and conditions of this paragraph. In the event the City obtains an offer to lease the 220 -foot strip from a qualified tenant on terms and conditions acceptable to the City, the City has agreed pursuant to the Modification of Lease with Landlord to notify Landlord and Tenant of the rental rate, terms and conditions of such offer and afford Tenant the opportunity to sublease said 220 -foot strip at the same rental rate, terms and conditions. Tenant shall have thirty (30) days from the date of written notice of the offer to tender an executed written sublease containing identical terms to Landlord and the City at the notice addresses provided in the notice of the offer. Notice of the offer to lease shall be deemed given when deposited by the City in the U.S. mail, postage prepaid, properly addressed to Landlord and Tenant and mailed by certified mail, return receipt requested. In the event the City and Landlord fail to receive in response a written contractual offer from Tenant by 5:00 p.m. (Corpus Christi time) on the 30th day following the date of notice of the offer to lease, Tenant's right of first refusal hereunder shall terminate and be of no further force or effect. The time period allowed for consummating the transaction and other terms and conditions of the sublease agreement shall be the same as set forth in the notice of the offer to sublease except as otherwise agreed by the City, Landlord and Tenant. 37. OPTION TO PURCHASE BUILDING: At any time during the first ten (10) years of the term of this Sublease, Tenant shall have the option to purchase the Building and improvements related thereto located on the Leased Land from Landlord and assume the rights and obligations of Landlord under that Modification of Lease -21- of even date herewith between Landlord and the City of Corpus Christi upon the following terms and conditions. The purchase price for such Building and improvements shall be equal to FIVE HUNDRED THOUSAND DOLLARS ($500,000), as adjusted by any increases in the Consumer Price Index as maintained by the U. S. Department of Labor (or any successor index maintained on a comparable basis by such Department or a successor agency) from the date of this Sublease. Provided, however, that in the event Tenant exercises such option prior to the expiration of said ten-year period of this Sublease, the purchase price shall be increased by an amount equal to the balance owing by Landlord on the indebtedness incurred to finance the construction of said Building and improvements as evidenced by that indebtedness in the original principal amount of $575,000.00 payable to First City, Texas - Corpus Christi, as Mortgagee. The City shall convey title to said Building by General Warranty Deed and furnish Tenant an Owner Policy of Title Insurance covering the Building, at Tenant's expense. Upon the purchase of the Building by Tenant, the Base Rentals under this Sublease shall terminate, and Tenant shall continue to pay the Additional Rentals for the Land Lease portion only. 38. LEASE RATE ADJUSTMENTS: During the remainder of the Sublease term following the initial ten-year period, the Lease rates due hereunder shall be payable as follows: (a) In the event Tenant has exercised its option to purchase the Building, Tenant shall only pay the Additional Rentals comprising the land rent which shall be based on fair market value (FMV) of the Leased Land to be calculated as follows: -22- The annual rental for the Leased Land shall be based on the fair market value of the Leased Land, excluding any value associated with the Building or the improvements related thereto, as determined by three appraisals. The City shall pay for one appraiser and Tenant shall pay for one appraiser. The City's and Tenant's appraisers shall choose a third appraiser, and the City and the Tenant shall each pay one-half of the third appraiser's fee. Once the FMV has been determined for the Leased Land, the rental rate shall be adjusted annually on the anniversary date of the new Lease between the City and the Tenant based on increases, or decreases, in the Consumer Price Index issued by the Federal Government, or such other successor index, each year. (b) In the event Tenant does not exercise its option to purchase the Building and improvements as above herein, Tenant shall continue to lease the Building and improvements during the remainder of the Sublease term at a Base Rental rate equal to $10,000 per month, being the Base Rental rate in effect for the Building in the tenth year of this Sublease, as such rate is adjusted annually to cover increases in the Consumer Price Index each year. Tenant shall additionally be responsible for the Base Rentals covering the Leased Land as provided above. 39. TERMINATION OF LIABILITIES OF LANDLORD: Upon the expiration of the initial ten-year period of this Sublease and the full and final payment of the indebtedness secured by the Renewal Deed of Trust, Tenant shall become the direct lessee of the City under that Modification of Lease of even date herewith, and this Sublease shall terminate. Tenant's continued occupancy of the Leased Premises shall continue as a direct lessee of the City, and Landlord shall be under no further obligation or liability to either Tenant or the City for the continuation of this Sublease or continue as a party hereto. -23- 40. FAA APPROVAL: All terms and conditions of this Sublease, and any amendments hereto, are subject to FAA's prior approval. If FAA requires any modification of this Sublease or any amendment prior to its approval of same, such modification will be immediate- ly furnished to Landlord and Tenant for their review. Landlord and Tenant reserve the right to withdraw any such amendment in the event the FAA modifications are not acceptable. 41. FAA AGREEMENT WITH CITY: This Sublease is subordinate to provisions of any existing or future agreement between the City and the United States of America or any agency thereof related to the operation, development, or maintenance of the Airport, the execution of which has been or may be required as a condition precedent to the expenditure of federal funds for the development of the City's Airport. Should any such agreement require modifica- tion of this Sublease, such modification will immediately be incorporated into the Sublease terms without need for official action on the part of the City, Landlord or Tenant; provided, however, that in the event such modification materially impairs the ability of Tenant to continue its business operations on the Leased Premises to the full extent authorized under this Sublease, Tenant shall have ninety (90) days following receipt of notice of such modification to elect to terminate this Sublease. The effective date of such termination shall be as set forth in Tenant's notice of termination, and on such effective date all liability for further Rentals due hereunder shall cease. Notwithstanding the foregoing, in the event any indebtedness remains secured under the Renewal Deed of Trust at the time of such termination, such -24- indebtedness shall be paid in full in a lump sum by Tenant as a condition of termination of this Sublease. 42. NONDISCRIMINATION: (a) Tenant assures that it will undertake an affirmative action program, as required by 14 Code of Federal Regulations Part 152, Subpart E, to insure that no person shall on the grounds of race, color, creed, national origin, or sex be excluded from participating in any employment activities covered by 14 Code of Federal Regulations Part 152, Subpart E. Tenant assures that no person shall be excluded on these grounds from participating in or receiving the services or benefits of any program or activity covered by this subpart. Tenant assures that it will require that its covered suborganizations provide assuranc- es to Tenant that they similarly undertake affirmative action programs and that they will require assurance from their suborgani- zations, as required by 14 Code of Federal Regulations Part 152, Subpart E, to the same effect. (b) Tenant for itself and its successors in interest, and assigns, as a part of the consideration hereof, does hereby covenant and agree as a covenant running with the land that: (1) no person on the grounds of race, color, or national origin shall be excluded from participating in, denied the benefits of, or be otherwise subjected to discrimination in the use of said facili- ties, (2) that in the construction of any improvements on, over, or under such land and the furnishing of services thereon, no person on the grounds of race, color, or national origin shall be excluded from participating in, denied the benefits of, or otherwise subject to discrimination, (3) that Tenant shall use the Premises in compliance with all other requirements imposed by or pursuant to 49 -25- CFR Part 21, Nondiscrimination in Federally Assisted Programs of the Department of amended. (c) That, in the event nondiscrimination covenants, Transportation, and as said regulations may be of breach of after written any of the proceeding notice of default and opportunity to cure as provided herein the Landlord shall have the right to terminate this Sublease and to reenter and repossess said land and the facilities thereon, and hold the same as if said Sublease had never been made or issued. 43. HEIGHT RESTRICTIONS: Tenant shall restrict the height of structures, objects, or natural growth and other obstructions on the Leased Premises to such a height as to comply with Federal Aviation Regulations, Part 77, as same may be amended. 44. NONINTERFERENCE: Tenant shall prevent any use of the Leased Premises which would interfere with or adversely affect the operation or maintenance of the City's Airport, or otherwise constitute a hazard to the Airport. 45. RIGHT TO AIRSPACE: City has reserved to itself, its successors and assigns, for the use and benefit of the public, a free and unrestricted right of flight for the passage of aircraft in the airspace above the surface of the Leased Premises, together with the right to cause in such airspace such noise as may be inherent in the operation of aircraft, now known or hereafter used for navigation of or flight in the air, using said airspace for landing at, taking off from, or operating on or about the Airport. 46. FORCE MAJEURE: In case by reason of force majeure either party hereto shall be rendered unable wholly or in part to carry out its obligations under this Sublease, then except as otherwise -26- expressly provided in this Sublease, if such party shall give notice and full particulars of such force majeure in writing to the other party within a reasonable time after occurrence of the event or cause, the obligations of the party giving such notice, other than the obligation of the Sublessee to make the rental payments required herein, so far as they are affected by such force majeure, shall be suspended during the continuance of the inability then claimed which shall include a reasonable time for the removal of the effect thereof, but for no longer period, and such party shall endeavor to remove or overcome such inability with all reasonable dispatch. The term "force majeure," as employed herein, shall mean acts of God, strikes, lockouts or other industrial disturbances, acts of public enemy, orders of any kind of the Government of the United States or the State of Texas or any civil or military authority, insurrections, riots, restraining of government and people, epidemics landslides, lightning, earthquakes, fires, hurricanes, storms, floods, washouts, droughts, arrests, civil disturbances, explosions, breakage or accidents to machinery, transmission pipes or canals, partial or entire failure of utilities, shortages of labor, material, supplies or transporta- tion, or any other cause not reasonably within the control of the party claiming such inability. It is understood and agreed that the settlement of existing or impending strikes, lockouts or other industrial disturbances shall be entirely within the discretion of the party having the difficulty and that the above requirements that any force majeure shall be remedied with all reasonable dispatch shall be deemed to be fulfilled even though such existing or impending strikes, lockouts, and other industrial disturbances -27- may not be settled and could have been settled by acceding to the demands of the opposing person or persons. 47. AUTHORITY OF PARTIES: Each party signing this Sublease by its signature certifies that it possesses authority to execute this Sublease, and all amendments thereto, and be bound thereby, and that all prerequisites to such authorized execution have been accomplished. 48. MEMORANDUM OF SUBLEASE: Landlord agrees to execute a Memorandum of Sublease in recordable form outlining the basic terms of this Sublease, including Tenant's right of first refusal and option to purchase as provided herein, and Tenant may record such Memorandum of Sublease in the Real Property Records of Nueces County, Texas, at its own expense. 49. GUARANTY OF SUBLEASE: Semtech Corporation (the "Guaran- tor"), for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and to induce Landlord to enter into this Agreement of Sublease with Tenant, and at the special insistence and request of Landlord, hereby unconditionally guarantees the prompt payment and performance of all obligations and liabilities of any kind whatsoever by Tenant to Landlord under this Agreement of Sublease. This guaranty is an absolute, completed and continuing one. No demand upon Guarantor shall be required for the effectiveness of this obligation on the part of Guarantor. Guarantor specifically authorizes Landlord, without further notice and without affecting the enforceability of this guaranty to deal in all matters arising under this Agreement of Sublease directly with Tenant and to enforce, waive or release any of the terms and conditions hereof. Guarantor waives any right to -28- require Landlord to proceed against the Tenant or exercise any right of setoff or pursue any other remedies against Tenant within Landlord's power whatsoever. This guaranty shall continue in full force and effect for the term of the Agreement of Sublease and for a period of four years thereafter or until all obligations of Tenant are fully discharged hereunder, whichever shall occur first. This guaranty does not supersede, cancel, amend, discharge or limit any other obligations of Tenant under this Agreement of Sublease, but this guaranty is in addition to and cumulative of any other remedies available to Landlord. EXECUTED in original copies this the day of , 1991, to be effective as of January 1, 1991. Landlord Tenant CORPUS CHRISTI AIRPORT SEMTECH CORPUS CHRISTI DEVELOPMENT CORPORATION CORPORATION By. G. Robert Welch President By: Name: Title: GUARANTOR: ATTEST: SEMTECH CORPORATION By By: John W. Cr field Name: Vice Pres].ent Title: -29- This Sublease is approved and accepted by Juan Garza as City manager of the City of Corpus Christi this day of , 1991. ATTEST: CITY OF CORPUS CHRISTI By: By: Armando Chapa Juan Garza City Secretary City Manager APPROVED: THIS DAY OF , 1991. By: City Attorney \ 11 \ W ork.91 \assemtec .15415 /238 -30- EXHIBIT A Being a 6.162 acre tract of land out of Block 23, J. C. Russell Farm Blocks as shown by map of record in Volume 3, Page 53, Map Records, Nueces County, Teras, said 6.162 acre tract of land being more particularly described by metes and bounds as follows: Beginning at the intersection of the east boundary line of said Block 23, and the new south right-of-way line of State Highway No. 44, said point being S. 1° 19' 56" E., 240.0 feet from the original northeast corner of said Block 23; thence S. 50 feet to a point in the west right-of-way of the International Drive; Thence S. 1° 19' 56" B. along a line 50' westerly of and parallel to the east boundary of said Block 23, a distance of 50' to the true point of beginning of the herein described tract; thence continuing S. 1° 19' 56" E., a distance of 610.0 feet to the southeast corner of the tract herein described; Thence S. 88° 35' 46" W., with a line that is 660.0 feet south of and parallel to the south right-of-way line of said State Highway No. 44, a distance of 440.0 feet to the southwest corner of the tract herein described; Thence N. 1° 19' 56" W., with a line that is 440.0 feet west of and parallel to the west line of International Drive, a distance of 610.0 feet to the northwest corner of the tract herein described; Thence N. 88° 35' 46" E. along a line 50' southerly of and parallel with the south right-of-way line of State Highway No. 44, a distance of 440.0 feet to the point of beginning and containing 6.16162 acres more or less. at the foregoing ordinance was read fo the first time and passed to its second reading on ' e I day of ‘,� ti' (II��G� 19� Mary Rhodes Cezar Galindo Leo Guerrero Betty Jean Longoria That the f this theo2 , by the following vote: Edward A. Martin Joe McComb Dr. David McNichols Clif Moss Mary Pat Slavik egoing ord' ante was rad for thesecond time and passed to its third reading on day of y. C QtC rrk "(kW , 197 / , by the following vote: Mary Rhodes Cezar Galindo Leo Guerrero Betty Jean Longoria y (L r That the . re of ordinance s read for the Edward A. Martin Joe McComb Dr. David McNichols Clif Moss Mary Pat Slavik third time and passed finally on this the ,92\ dayof �i '[ , 1 / , by the following vote: J (ter Mary Rhodes Cezar Galindo Leo Guerrero Betty Jean Longoria Edward A. Martin Joe McComb Dr. David McNichols Clif Moss Mary Pat Slavik �1�� PASSED AND APPROVED, this the J(day of ei'L�'l,l� , 19qr. AI ST: City Secretary MA OR THE Y OF CORPUS CHRISTI APPROVED: 6, DAY OF 2cest , 10>i JAMES R. BRAY, JR., CITY ATTORNEY By, 044 t ; ��� y, Assistant City Attorney PUBLISHER'S AFFIDAVIT State of Texas, ) CITY OF CORPUS CHRISTI County of Nueces } ss: Ad #64097 PO # Before me, the undersigned, a Notary Public, this day personally came Kerri Lesmeister, who being first duly sworn, according to law, says that she is a Business Office Secretary of the Corpus Christi Caller -Times, a daily newspaper published at Corpus Christi in said County and State, generally circulated in Aransas, Bee, Brooks, Cameron, Duval, Hidalgo, Jim Hogg, Jim Wells, Karnes, Kenedy, Kleberg, Live Oak, Nueces, Refugio, San Patricio, Victoria, and Webb Counties, and that the publication of NOTICE OF PASSAGE OF ORDINANCE ON SECOND READING AUTHORIZING which the annexed is a true copy, was published in the Corpus Christi Caller -Times on the 29th day of September 1991. One Time(s) $ 94.50 t Business Office Secretary Subscribed and sworn to before me this 2nd day of October , 1991. - L ,ca kAY Notary Public, Nueces County, Texas My commission expires on PUBLISHER'S AFFIDAVIT State of Texas, } CITY OF CORPUS CHRISTI County of Nueces } ss: Ad 462241 PO # Before me, the undersigned, a Notary Public, this day personally came Kerri Lesmeister, who being first duly sworn, according to law, says that she is a Business Office Secretary of the Corpus Christi Caller -Times, a daily newspaper published at Corpus Christi in said County and State, generally circulated in Aransas, Bee, Brooks, Cameron, Duval, Hidalgo, Jim Hogg, Jim Wells, Karnes, Kenedy, Kleberg, Live Oak, Nueces, Refugio, San Patricio, Victoria, and Webb Counties, and that the publication of NOTICE OF PASSAGE OF ORDINANCE NO. 021269 AUTHORIZING THE which the annexed is a true copy, was published in the Corpus Christi Caller -Times on the 27th day of October 1991. One Time(s) $ 91.80 Business Office Secretary Subscribed and sworn to before me this 31st day of October , 1991. t r a V (abov eo2 Notary Public, Nueces County, Texas My commission expires on PUBLISHER'S AFFIDAVIT State of Texas, } County of Nueces } ss: CITY OF CORPUS CHRISTI Ad #64471 PO # Before me, the undersigned, a Notary Public, this day personally came Kerri Lesmeister, who being first duly sworn, according to law, says that she is a Business Office Secretary of the Corpus Christi Caller -Times, a daily newspaper published at Corpus Christi in said County and State, generally circulated in Aransas, Bee, Brooks, Cameron, Duval, Hidalgo, Jim Hogg, Jim Wells, Karnes, Kenedy, Kleberg, Live Oak, Nueces, Refugio, San Patricio, Victoria, and Webb Counties, and that the publication of NOTICE OF PASSAGE OF ORDINANCE ON FIRST READING AUTHORIZING which the annexed is a true copy, was published in the Corpus Christi Caller -Times on the 22nd day of September 1991. One Time(s) S 90.45 mill l_ LiK t 91 Business Office Secretary Subscribed and sworn to before me this 24th day of September , 1991. 00(0 l.L1/11(1(4/ Notary Public, Nueces County, Texas My commission expires on ..err. . NOTICE OF 156AGE OF OR- DINANCER �f PIIRRT READING AUTHO/IG r EXECU- p TION OF A 10 YEAR LEASE N AGREIMENT BETWEEN CITY T OF CORPUS CHRISTI, TEX- AS. AND CORPUS CHRISTI g AIRPORT DEVELOPMENT b CORPORATION; APPROVING Ti AND AUTHORIZING EXECU- bi TION OF A 10 YEAR bt SUBLEASE BY CORPUS TI CHRISTI AIRPORT DEVELOP- ce MENT CORPORATION TO SEMTECH CORPUS CHRISTI B CORPORATION OF THIS PROPERTY LEASED TO COR- PUS CHRISTI AIRPORT DEVELOPMENT CORPORA- TION; AUTHORIZING CITU OF b, CORPUS CHRISTI TO EXE- 1! CUTE A 20 YEAR LEASE WITH SEMTECH CORPUS 0 CHRISTI CORPORATION ON 1 THE SAME TERMS AND b. CONDITIONS UPON TERMI- NATION OF THE 10 YEAR c LEASE AND SUBLEASE 3 ABOVE REFERENCED; AND PROVIDING FOR PUBLICA• TION; the term will be fbr 0 thirty years; at the end of tan c years, the sublease involving v the Airport Development Cor- poration wig terminate upon payment of $575,000 and I Semtech will then beoortr e tenant of the City. Payment to the City will be $1,970 per year for four years; $3,940 per Year for the next six years, and rentals for the re- maining twenty years will be based on fair market -value of the land as determined by three appraisals. Rentals for the building to Airport Devel- opment Corporation will be $6,000 per month for the first three years, 59,000 per month for the next three years, and $10000 for the last four years. At the end of ten years, Semtech may pur- chase the building for $500,000 or continue to lease the building for $10,000 per month. The ordinance was passed and approved on first reading by the City Council of the City of Corpus Christi, Texas on the 17th day of September. 1991. IN I*41,01 Cense / NOTICE OF PASSAGE OF ORDINANCE NO. 021269 AUTHOIIZ1NO THE EXECU- TION OF A 10 YEAR LEASE AGREEMENT BETWEEN CITY OF CORPUS CHRISTI, TEX- AS, AND CORPUS CHRISTI AIRPORT DEVELOPMENT' CORPORATION: APPROVING AND AUTHORIZING EXECU- TION OF A 10 YEAR SUBLEASE BY CORPUS CHRISTI AIRPORT DEVELOP- MENT CORPORATION TO SEMTECH CORPUS CHRISTI CORPORATION OF THIS PROPERTY LEASED TO COR- PUS CHRISTI AIRPORT DEVELOPMENT CORPORA- TION: AUTHORIZING CITY OF CORPUS CHRISTI TO EXE- CUTE A 20 YEAR LEASE WITH SEMTECH CORPUS CHRISTI CORPORATION ON THE SAME TERMS AND CONDITIONS UPON TERMI- NATION OF THE 10 YEAR LEASE AND SUBLEASE ABOVE REFiRENCED: AND PROVIDING FOR PUBLICA- TION: es term will be for thirty yfls; at the and of ten years, theaublease involving the Airport Development Cor- poration will terminate upon payment of $575,000 and Semtech will then become a tenant of the City. Payment to the City will be $1,970 per year for four years; 53,940 per year for the next six years: and rentals for the re- maining twenty years will be based on fair market value of the land as determined by three appraisals. Rentals tot the building to Airport Devel- opment Corporation will be 56.000 per month for the first three years, $9,000 per month for the next three years, and 510.000 for the laet four yeaAt the end of ten years, Sers.mtech may pur- chase the building for $500,000 or continue to lease the building for $10,000 per month. A copy of the lease is on file in the City Secretary's office. The ordinance was passed and approved on third reading by the City Council of City of Corpus Christi, Texas on the 22nd day of October, 1991. /s/ Armando Chapa City Secretary City of Corpus Christ ND OF unloo MIe, -• �(ECU- ' ION OF A to YSMUASE AGREEM INT $TWEEN CITY SOF CORPUS CHRISTI, TEX- AS, AND CORPUS CHRISTI AIRPORT DEVELOPMENT! CORPORATION: APPROVING AND AUTHORIZING EXECU- TION OF A 10 YEAR SUBLEASE BY CORPUS CHRISTI AIRPORT DEVELOP- ' WENT CORPORATION TO I SEMTECH CORPUS CHRISTI i CORPORATION OF THIS I PROPERTY LEASED TO COR - 'PUS CHRISTI AIRPORT DEVELOPMENT CORPORA- TION; AUTHORIZING CITY OF CORPUS CHRISTI TO EXE- CUTE A 20 YEAR LEASE WITH SEMTECH CORPUS CHRISTI CORPORATION ON THE SAME TERMS AND CONDITIONS UPON TERMI- NATION OF THE 10 YEAR LEASE AND SUBLEASE ABOVE REFERENCED; AND PROVIDING FOR PUBLICA- TION: me term will be for thirty years; at the end of ten years. the subteen involving the Airport Development Cor- - poration will terminate upon payment of 5676.000 and Semtech will then become a tenant of the City. Payment to the City WI be 91,970 per f year for four years; 93,940 s, par yew for -the next six P years; and senna for the re- h minify twenty years will be 1 based on fair market value of 1 the land n determined by tl three appraisals. Renals for the Ebidingo� Airport Devel- b opment Corporation will be - 96.000 per month for the fin P three years, 99.000 per d Mow Ci years, rhe 910,000 for the tfor the S: Int four years. At the end of A, ten yearn, Sennett may pur- an chase the building for In 9500,000 orntinue 10 Rlia lease the building per month. re A copy of the Nan is on file a.1 in the City Secretary's office. Bi The ordinance was passed AI and approved on second ch reading by the City Council of ca the City of Corpus Christi, al Tens on the 24th day of lea September. 1991. /s/ Armando Chapa J Cita ilearetary K C-rq of CoPOIN Caristi a - '•' ''IL# t