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HomeMy WebLinkAbout024717 ORD - 12/18/2001 '"' AN ORDINANCE APPROVING A ONE-YEAR GROUND LEAS CORPUS CHRISTI INTERNATIONAL AIRPORT BETWEEN T CITY OF CORPUS CHRISTI AND THE CORPUS CHRISTI REGI I. ECONOMIC DEVELOPMENT CORPORATION; PROVIDING SEVERABILITY; AND DECLARING AN EMERGENCY. NOW, THE OF CORPUS C 61<6. t7 E.5 CO...JDG"?> Ih-7/~z. ORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY STI, TEXAS, THAT: SECTION 1. The City Manager is hereby authorized to execute the one.year "Ground Lease at Corpus Christi International Airport Between the City of Corpus Christi and the Corpus Christi Regional Economic Development Corporation," a substantial copy of which is attached hereto as Exhibit A and incorporated herein for all purposes. SECTION 2. If for any reason any section, paragraph, subdivision, clause, phrase, word or provision of this ordinance shall be held invalid or unconstitutional by final judgment of a court of competent jurisdiction, it shall not affect any other section, paragraph, subdivision, clause, phrase, word or provision of this ordinance, for it is the definite intent of this City Council that every section, paragraph, subdivision, clause, phrase, word or provision hereof be given full force and effect for its purpose. SECTION 3. 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. SECTION 4. That upon written request of the Mayor or five Council members, copy attached, to find and declare an emergency due to the need for immediate action necessary for the efficient and effective administration of City affairs, such finding of an emergency is made and declared requiring suspension of the Charter rule as to consideration and voting upon ordinances at two regular meetings so that th!s)?qFnance ~ssed and shall take effect upon first reading as an emergency measure this the -.lJ1.''day of (!cry\. tf)f'f"' ,2001. ATTEST: Samuel L. N , Jr. Mayor, T City of Corpus Christi -yf? IJ 0 r~'y d,,, A-w ,e () 7... '11717 ~p OVfP~. IS THE 1'1 DAY OF tJ~v, 2001: W-a.s r~" ,." tI~ef __ 11..'/' L. ~. ~7ry e -R. Bray, Jr., ty Attorney 'q (jrcf. -I/- tl.2. . IJRB4000.006 r," ~') I , J , ... , . TI Lf\10 EXr::O 2 Ce~-*, Christ~exas lnf'_r -LJLdayof Co.\rvL';-'ZUOI TO THE MEMBERS OF THE CITY COUNCIL Corpus Christi, Texas For the reasons set forth in the emergency clause of the foregoing ordinance an emergency exists requiring suspension of the Charter rule as to consideration and voting upon ordinances at two regular meetings: I/we, therefore, request that you suspend said Charter rule and pass this ordinance finally on the date it is introduced, or at the present meeting of the City Council. Respectfully, Respectfully, Samuel L. Nea , Jr. Mayor, The City of Corpus C Council Members The above ordinance was passed by the following vote: Henry Garrett f1L~ Q.~L (l7f a~j, a~_ UW' Ol'J Qb4-tcun 01- Samuel L. Neal, Jr. Brent Chesney Javier D. Colmenero Bill Kelly Rex A. Kinnison John Longoria Jesse Noyola Mark Scott IJRB4000.006 :' r, /. t) 7 ' .~ " I J. .. . , , . c Ground Lease at Corpus Christi International Airport Between the City of Corpus Christi and the Corpus Christi Regional Economic Development Corporation (One-Year Term) This Lease is between the CITY OF CORPUS CHRISTI, a Texas municipal corporation (the "City"), and the CORPUS CHRISTI REGIONAL ECONOMIC DEVELOPMENT CORPORATION, a Texas nonprofit corporation, (the "CCREDC"). Recitals: Whereas, the City owns the Corpus Christi International Airport (the "Airport"), located in Nueces County, Texas; Whereas, the CCREDC desires to lease a certain parcel of land at the Airport to construct a master-planned aviation maintenance facility at the Airport ultimately to be subleased to Vision Technologies Aerospace, Ltd. ("VT Aero"), as a sublessee as set out in Section 5; Whereas, the parties wish to enter into a written lease for land on which the CCREDC will construct said aviation maintenance facility, which shall include up to six aircraft hangars, each capable of accommodating a wide-body aircraft, with related ramp improvements adjacent to the west taxiway (collectively the "Facility") under the terms and conditions herein contained; Whereas, in entering into this Lease, the City is exercising its authority as a home rule city under the Constitution of the State of Texas, including but not limited to its authority under Texas Local Government Code Chapter 380 and the Resolution adopted by the City on December 18, 2001 pursuant to Chapter 380 of said Code; Agreement: 1. Premises. The City leases unto the CCREDC an area located on the west side of the terminal as described on the attached and incorporated Exhibit A (the "Premises") for the construction and operation of the Facility, which site contains approximately ten (10) acres of land, together with easements and access for ingress and egress. Additionally, the City grants to the CCREDC an option to lease up to an additional twenty (20) acres of land adjacent thereto as described on the attached and incorporated Exhibit B (the "Option Premises") for the construction and operation of additional phases of the Facility. Upon the exercise of any of the options granted herein, such portion of the Option Premises covered by the exercise of the option shall be and become part of the Premises as described herein. The City Manager may adjust the boundaries set forth in Exhibits A and B consistent with the purposes of this Lease, so long as the tract described in Exhibit A does not exceed ten acres and the tract described in Exhibit B does not exceed twenty acres 2. Term. This Lease is for a term of one (1) year beginning at 12:01 a.m., January 1, 2002 (the "Effective Date") and ending at 12:00 midnight, December 31, 2002 (the "Termination Date"); provided that, upon the execution of a new Ground Lease by the parties covering the 1'" , Premises providing for a longer lease term, this Lease shall terminate and be of no further force or effect. 3. Ground Rent. (a) Calculations. As a substitute for fair market value rent payments and pursuant to U.S. Department of Transportation Federal Aviation Administration (FAA) policies and procedures concerning the use of revenue, Section VII.B.S., the City shall charge the CCREDC as Ground Rent under this Lease the reimbursable costs of providing aeronautical services and facilities to the Premises, such cost being based upon the cost of City staff services, any loss of revenue due to decreased use of lands for agricultural purposes and other expenses as documented in accordance with City policies and FAA regulations. The amount of reimbursable costs to be paid as Ground Rent for the year of this Lease shall be $10,000.00 per year. (b) Payment. The City shall bill the CCREDC the amount of the reimbursable cost to be paid as Ground Rent under this Lease on a quarterly basis, which amount shall be due and payable on the last day of each calendar quarter during the Lease. Any such payments not paid within ten days of the due date shall be considered past due. (c) Agent. The City Manager, or his designee ("the City Manager") appoints the Aviation Director, or designee, (the "Aviation Director") as agent to receive all rentals and reports under this Lease. (d) Reports. The CCREDC shall cause its sublessee to submit monthly reports to the Aviation Director showing the number and type of planes landed and gross landing weight for each plane landed during the month, including the day and time, and such other related information that may be requested from time to time. The Aviation Director and the CCREDC's sublessee shall agree upon a form to be used for this report. 4. Use of Premises. The CCREDC shall cause the Premises to be used solely for Facility operations, including aviation maintenance and related activities. The CCREDC and its sublessee shall have preferential use only of any apron(s) constructed by the CCREDC. (a) Parking. The CCREDC and its sublessee shall be authorized to park on the Premises all Facility and employee automobiles, trucks, vans and similar vehicles, sales representatives and customers without the payment of any additional fees to the City. The CCREDC shall cause its sublessee nevertheless to comply fully with all of the Aviation Director's rules and regulations for parking and using vehicles at the Airport. (b) Signs. The CCREDC and its sublessee may install on the Premises signs or other corporate identification of the business. The size, type, design and location of such signs or other corporate identification shall be subject to the Aviation Director's prior written consent, which consent shall not be withheld umeasonably. (c) Rates. The CCREDC shall cause its sublessee to provide its services at the Airport on a fair, equal and nondiscriminatory basis, and to charge a fair, reasonable, and nondiscriminatory price for each unit of sale or service; provided that such sublessee shall be allowed to make reasonable and nondiscriminatory discounts, rebates, or other similar types of -2- '" ~ . . price reductions to volume purchasers. Nothing herein contained is intended to be construed as vesting in the City any power or authority to regulate the charges for services rendered on the Premises by the CCREDC's sublessee. (d) Prohibited activities and uses. The following activities and uses are expressly excluded from this Lease and the CCREDC and its sublessee are prohibited from any such use or activity: (I) Ground Transportation for hire. (The CCREDC's sublessee may provide ground transportation for its employees as a service; however, said service may not be offered to the general public on a commercial basis.) (2) Automobile Rental Service. (3) News and sundry sales. (4) Advertising concessions except for those that may be conducted within the Facility. (5) Barber, valet and personal services. (6) The sale of food or drink, except from dispensing machines located within the Facility; however, no cafe or cafeteria type of service may be operated. (7) The sale of flight or trip insurance. (8) Commercially engaging in the business of making reservations for hotels, motels and other lodging. (9) Sale or transfer of fuel into any aircraft or from any aircraft. (10) For profit charter flights. (II) Flight or ground instruction, except instruction or training for employees or agents of the CCREDC's sublessee is allowed. (e) Non-Exclusive Right To Use Airfield. The CCREDC and its sublessee shall have a non-exclusive right to use the public areas of the Airport facilities including the runways, taxiways, aprons, ramps and navigational aids, and facilities, in accordance; with the applicable federal, state, and local laws, rules, and regulations. (1) Acceptance of Premises. The CCREDC shall cause its sublessee to acknowledge that it has inspected the Premises and accepts the Premises in their present physical condition. 5. Assignment and Sublease. (a) Except as explicitly set forth in this Section, the CCREDC shall not assign, sell, convey, transfer, mortgage, or pledge this Lease or any part thereof without the prior written consent of the City. Any restrictions which form a part of any such written consent granted must be incorporated into a written instrument and form a part of this Lease. The City authorizes the CCREDC to sublease the Facility to VT Aero, and the City hereby consents to the sublease of the Premises to VT Aero in accordance with the terms of a Sublease (the "Sublease") approved by the City Manager. The City additionally authorizes the CCREDC to mortgage its leasehold interest in the Facility to Bank of America, N.A., and the City hereby consents to such leasehold mortgage in accordance with the terms of a Leasehold Mortgage (as hereinafter defined) approved by the City Manager. Neither the CCREDC nor any sublessee shall use, or permit any person to use, the Premises, for any purposes other than as the Facility. - 3 - .. .,.... . (b) Change in Control. If the CCREDC or its sublessee merges, consolidates, acquires, affiliates, or associates with any other person, company, corporation or other entity, or in any manner whatsoever either is bought out or buys out another person, company, corporation or other entity, and such merger, consolidation, affiliation or association results in a change in control or management of the operations authorized herein, then in that event, such merger, consolidation, affiliation; or association will be considered by the City as an assignment of this Lease which requires the prior written approval of the City. (c) Other Changes. Name changes or mergers or other affiliations that do not result in a change of control or management of operations may be approved by the City Manager. 6. Right to Amend. If the FAA, or its successors, requires modifications or changes in this Lease as a condition precedent to granting funds for Airport improvements, the CCREDC and its sublessee agree to consent to the amendments, modifications, or changes of this Lease as may be reasonably required to obtain the funds; provided, however, that neither party will be required to pay increased rent or change the use of the Premises or accept a relocation or reduction in size of the Premises until the CCREDC and the City have executed an amendment to this Lease that is mutually satisfactory to all parties for any terms or conditions of this Lease affected by such actions or the Lease is terminated. 7. Subordination to U.S./FAA Requirements. This Lease is subordinate to the provisions of any existing or future agreement between the City and the United States relating to operating or maintaining the Airport, the execution of which has been or may be required as a condition to the expenditure of federal funds for the development of the Airport. If the effect of such agreement with the United States is to take any of the Premises under this Lease out from the control of the City or to substantially destroy the commercial value of the Premises, then the City must provide adequate replacement Premises to the CCREDC or allow the CCREDC to seek just compensation from the federal government for the taking of such Premises. 8. Construction oflmprovements. (a) Plans. All plans and specifications for the improvements related to the construction of each phase of the Facility upon the Premises shall meet all of the City's fire and building code requirements. Upon final completion and acceptance of the Facility by the CCREDC, the CCREDC shall cause two sets of mylar as-built plans and one electronic copy of the record documents to be provided to the Aviation Director, who will keep the plans on file at the Airport and provide a copy to the City Secretary. Further, the CCREDC shall cause said documents to be kept current, by requiring that two sets of mylar as-built plans and one electronic copy of all record documents showing any alteration in excess of $15,000 to the Facility during the Lease to the Aviation Director in the same manner as provided for the Original plans and specifications. The exterior design, color scheme, and plans and specifications for the Facility must be approved by the Aviation Director, which approval shall not be unreasonably withheld. The plans and specifications as approved by the Aviation Director must be in compliance with all code requirements' as presented. No substantial changes or alterations must be made in said plans or -4- I r. I specifications after initial approval by the Aviation Director without the consent of the Aviation Director, which consent shall not be unreasonably withheld. (b) Permits. The CCREDC shall cause its sublessee, at its expense, to obtain all licenses and permits required for any maintenance, repairs, construction on, or use of the Premises. The cost of developing all plans and specifications as provided herein and the construction of improvements and facilities upon Premises shall be paid solely by the CCREDC's sublessee and must not be an expense to the City whatsoever. (c) Ownership of Facility. The parties intend for the Facility to qualify as an "airport facility" under Section 142 of the Code, and the parties further recognize and acknowledge that the Facility must be "governmentally-owned" in order for the Bonds to qualify as tax-exempt obligations. In entering into any sublease, CCREDC agrees, if the Bonds are issued as tax- exempt obligations, not to take any action, or omit to take action, that would result in the Bonds not qualifying as tax-exempt obligations under the Code. Upon the termination of this Lease and payment of the Bonds and discharge of all of CCREDC's obligations under the other Financing Documents (as hereinafter defined), the City's ownership of the Facility shall be free and clear of all liens, leases and other encumbrances and adverse interest in property and improvements. (d) Inspections. During the progress of all construction, the City Manager's duly authorized representatives may enter upon the Premises, during normal business hours with reasonable prior notice, and make such inspection as may be reasonably necessary to satisfy the Aviation Director that the work or construction meets such requirements and standards. ( e) Remodeling and Repairs. During this Lease, the CCREDC and its sublessee shall (subject to the other terms and conditions of this Lease) have the continuing right to remodel, renovate and refurbish the Facility and any improvements and facilities thereon, or any part thereof, and to build and construct new additions and improvements thereto and thereon, provided notice has first been given to the Director of Aviation, whose approval of the modifications must not be unreasonably withheld. (1) Required Provisions and Bonds. The CCREDC shall include in any construction contract or subcontract all provisions required by the Aviation Director relating to the operations of the contractor on the Airport; and such provisions shall include a payment and performance bond for any work in excess of $1 00,000 to be performed by the CCREDC or the contractor. (g) Liens. Except as provided in Section 9 hereof, the CCREDC and its sublessee shall not allow a lien to attach to the Premises or the CCREDC's leasehold interest without the prior written approval of the City Manager. Notwithstanding the City Manager's approval, the City's fee simple estate in the surface of the property burdened by the CCREDC's leasehold estate must be exempt from such lien, and any lien shall contain the following language: "Lender agrees that the lien created by this instrument is effective only as to the CCREDC's leasehold estate created by the lease dated the _ day of , 200_, executed by the City of Corpus Christi, as the City, and the CCREDC, as - 5 - .. ~ . , the lessee, and does not affect the City's interest, being the fee simple estate burdened by the CCREDC's leasehold estate." or such other language as is approved by the City Attorney. (h) Foreclosure. In the event of any foreclosure by Bank or any other Leasehold Mortgagee (as hereinafter defined) of its lien or liens on the leasehold interest in the Facility, fixtures, or trade fixtures located on the Premises, such Bank or other Leasehold Mortgagee succeeds hereunder to all rights, privileges, and duties of the CCREDC, including without limitation paying rent, as if said Bank or other Leasehold Mortgagee were originally named tenant herein, and such Bank or other Leasehold Mortgagee shall have a reasonable time after date of foreclosure (not less than three hundred sixty (360) days) to sublease the remaining Improvements to such parties as may be approved by the City in writing. (i) Certificate of Occupancy. The CCREDC covenants that the construction of the initial hangar improvements, including all workmanship and materials, will be of first-class quality and will be in accordance with the plans and specifications approved by the Aviation Director. As used herein, the term "first-class quality" means of the same quality as buildings used or to be used for the same or similar purposes already constructed at the Airport. When the City's Building Official is satisfied that such construction is so in compliance, the Building Official shall deliver a Certificate of Occupancy to the CCREDC and its sublessee. After completing any alteration to the Premises, the CCREDC's sublessee must certify to Aviation Director that the alteration was completed according to the approved plans and specifications complying with all applicable laws, and regulations. (j) Alterations. The CCREDC and its sublessee shall not make any external alteration or any internal alteration that exceeds $15,000 or install any fixtures (except trade fixtures, equipment, furniture and other items of personal property removable without material damage to the Premises) during the Lease without the Aviation Director's prior written approval, which shall not be unreasonably withheld. If the Premises are damaged by such removal, they must be immediately repaired. (k) Construction Indemnity. The CCREDC and its sublessee shall include in all construction contracts entered into, a provision requiring the contractor to indemnify, hold harmless, defend and insure the City, including its officers, agents, and employees, against the risk oflegalliability for death, injury or damage to persons or property, direct or consequential, arising or alleged to arise out of, or in connection with, the performance of any or all of such construction work, whether the claims and demands made are just or unjust, unless same are caused by the gross negligence or willful act of the City, its officers, agents, or employees. The CCREDC shall require its sublessee to furnish, or require the contractor to furnish, insurance as required in Section 21 herein. 9. Leasehold Mortgage. (a) It is anticipated that CCREDC will obtain fmancing to construct the Facility required by its sublease with VT Aero through industrial development revenue bonds (the "Bonds") to be issued by the Corpus Christi Industrial Development Corporation in an amount not to exceed $18,000,000. It is anticipated that the Bonds will be - 6. - ... . secured by a letter of credit (the "Letter of Credit") from the Bank in favor of the Trustee of said Bonds, pursuant to a credit agreement between CCREDC and the Bank (the "Credit Agreement"). It is further anticipated that the CCREDC will grant to the Bank a deed of trust lien, pledge and collateral assignment (the "Bank Mortgage") in and against the leasehold interest granted to it in this Lease, as well as in and against its sublease with VT Aero, to secure the payment all obligations of CCREDC under the Bonds, the Credit Agreement, and any other related financing documents (collectively referred to herein as the "Financing Documents"). The City acknowledges that the Bank would not issue the Letter of Credit but for the City's consent to the Leasehold Mortgage and collateral assignment of this Lease as set forth herein. (b) As used herein, "Leasehold Mortgage" means the Bank Mortgage and any other mortgage or deed of trust covering the CCREDC's leasehold interest in this Lease given by the CCREDC to Bank or to any other third party ("Leasehold Mortgagee") to secure repayment of funds advanced or to be advanced by a Leasehold Mortgagee to the CCREDC to construct the Facility on the Premises (the "Project"). As used herein, "Leasehold Mortgagee" means the mortgagee or beneficiary under the Leasehold Mortgage. As used herein, "mortgage" means any mortgage, deed of trust, collateral assignment, pledge or other indenture consisting of a lien on the CCREDC's leasehold interest created hereunder, together with any promissory note or obligation or bond which it secures. Subject to the conditions set forth herein, the CCREDC is hereby authorized to mortgage its leasehold interest created hereunder, solely for the purpose of (I) obtaining financing to construct the Project, including any additional construction or alteration thereof made subsequent to the initial construction, (2) refinancing such construction mortgage, and (3) providing financing in connection with the assignment or transfer by the CCREDC of its interest in this Lease and its leasehold interest created hereunder; provided, however, that, with respect to the financing described in clauses (2) and (3) above, the principal amount of any such mortgage must not be greater than the original principal amount of the mortgage obtained to construct the Project, including any additional construction or alteration thereof made subsequent to the initial construction, and further provided: (i) Such mortgage in no way affects or diminishes the City's interest in the Premises, or its rights under this Lease, nor relieves the CCREDC of any of its obligations hereunder, (ii) Under no circumstances is the City's fee simple interest in the Premises subordinate to such mortgage; (iii) Such mortgage covers no interests in any real property other than the CCREDC's and VT Aero's leasehold interest in the Premises hereunder; and (iv) The making of such a mortgage by the CCREDC will not be deemed to constitute an assignment or transfer of this Lease, nor will any mortgagee, as such, be deemed an assignee or transferee of this Lease, until after foreclosure of the same. (c) Rights of Leasehold Mortgagees. No Leasehold Mortgage is binding upon the City in the enforcement of its rights and remedies under this Lease and by law provided, unless, and ' until, a copy thereof has been delivered to the Aviation Director. The City Manager agrees to - 7 . - ~. execute an estoppel certificate and any other similar documentation as may reasonably be required by the Leasehold Mortgagee so as to certify to the status of this Lease and to the performance of the CCREDC hereunder as of the date of such certification. The CCREDC shall furnish Aviation Director a written notice setting forth the name and address of any Leasehold Mortgagee. If a Leasehold Mortgagee or purchaser at foreclosure of the mortgage acquires the CCREDC's leasehold interest in the Premises, by virtue of the default of the CCREDC under the mortgage or otherwise, this Lease will continue in full force and effect so long as the Leasehold Mortgagee or purchaser at foreclosure is not in default hereunder, including the obligation to timely pay rent. For the period of time during which the Leasehold Mortgagee or any purchaser at foreclosure of a mortgage holds the CCREDC's leasehold interest in the Premises, the Leasehold Mortgagee or such purchaser becomes liable and fully bound by the provisions of this Lease during such time. With respect to any Leasehold Mortgagee of the Premises, the City agrees that the following apply: (i) If requested by a Leasehold Mortgagee, who is duly registered in writing with the Aviation Director, any notice from the City affecting the Premises must be simultaneously delivered to the CCREDC and such Leasehold Mortgagee at its registered address, and if so registered, no notice of default or termination of this Lease affecting the Premises given by the City shall be deemed legally effective until and unless like notice has been given by the Aviation Director to such Leasehold Mortgagee. (ii) Any Leasehold Mortgagee entitled to such notice shall have any and all rights of the CCREDC with respect to the curing of any default hereunder by the CCREDC. (iii) The City will not enter into any material modification of this Lease affecting the Premises without the prior written consent thereto of each Leasehold Mortgagee who becomes entitled to notice as provided in this Section. The foregoing does not apply nor may be construed to apply to any right the City may have to terminate this Lease pursuant to its terms. The CCREDC shall provide any Leasehold Mortgagee with notice of any proposed modification. (d) Termination. If the City elects to terminate this Lease for any default by the CCREDC with respect to the Premises, the Leasehold Mortgagee that has become entitled to notice as provided in this Section has not only any and all rights of the CCREDC with respect to curing of any default with respect to the Premises, but also the right to postpone and extend the specified date, for a maximum of six (6) months, for the termination of this Lease (Leasehold Mortgagee's Right to Postpone) in any notice of termination by the City to the CCREDC (the "Termination Notice" as defined in Section 16), subject to the following conditions: (i) The Leasehold Mortgagee must give the Aviation Director written notice of the exercise of the Leasehold Mortgagee's Right to Postpone at least ten (10) days prior to the date of termination specified by the Aviation Director in the Termination Notice and simultaneously pay to the Lessor all amounts required to cure all defaults then existing and owing by CCREDC under this Lease (as of date of the exercise of Leasehold Mortgagee's Right to Postpone) which may be cured by the payment ofa sum of money. - 8 - - (ii) The Leasehold Mortgagee also must promptly undertake to cure, diligently prosecute, and, as soon as reasonably possible, complete the curing of all other defaults of the CCREDC specified in the Termination Notice which are susceptible of being cured by the Leasehold Mortgagee. (iii) The Leasehold Mortgagee's exercise of its Right to Postpone may extend the date for the termination of this Lease specified in the Termination Notice for a maximum of six (6) months. (iv) If, before the date specified for the termination of this Lease as extended by a Leasehold Mortgagee's exercise of its Right to Postpone, the Leasehold Mortgagee has cured the defaults specified in the Termination Notice and no further defaults with respect to the Premises have occurred which not have been timely cured, then all defaults under this Lease with respect to the Premises will be deemed to have been cured, and the City's Termination Notice will be deemed to have been withdrawn. (v) Nothing herein may be deemed to impose any obligation on the City's part to deliver physical possession ofthe Premises to a Leasehold Mortgagee. (vi) If more than one Leasehold Mortgagee seeks to exercise any of the rights provided for in this Section, the most senior lienholder is entitled, as against the others, to exercise such rights. Should a dispute arise among Leasehold Mortgagees regarding the priority of lien, the Leasehold Mortgagees must prove to the satisfaction of the City Attorney that they have settled that dispute. 10. Repairs And Maintenance. The CCREDC shall cause its sublessee to make any and all repairs and replacements necessary to keep the Premises in a first class condition and safe repair and shall make any and all repairs and replacements necessary to remedy defects of a structural nature. The CCREDC shall cause its sublessee to provide janitorial service and maintenance to keep the Premises in a clean, attractive and sanitary condition at all times. The landscaping must be well maintained and kept in a neat and tidy condition. The Aviation Director shall have the right to inspect the Premises during Lessor's normal business hours with reasonable prior notice. The CCREDC shall cause its sublessee to repair any and all damage caused to real and/or personal property of the City occurring on the Premises or elsewhere on the Airport as the result of the willful or negligent acts, or omissions of the CCREDC or its sublessee, their employees or agents, and not the result of acts or omissions of the City, its employees or agents. As to the paved common use areas of the Airport, the CCREDC has no obligation to make any structural improvements to these areas, which is solely the obligation of the City, including any obligation to maintain repair, resurface, repave or cap the surface in a smooth and operable condition, similar to other national airports; provided that the CCREDC shall be responsible for any improvements required for its construction activities and for the repair of any damages caused during construction. 11. Security Badges. Each of the employees of the CCREDC and its sublessee needing access to a restricted area (including the AOA, see Section 12) must wear a security - 9 . .. .,... . identification badge. A fee and a deposit will be required for each badge, and a replacement fee will be required for each lost badge. The CCREDC shall cause its sublessee to notify the Aviation Director immediately after an employee is terminated or loses a badge. 12. Access to the Aircraft Operating Area (AOA). (a) The CCREDC, its sublessee, and their respective contractors, suppliers of materials, furnishers of services, employees, agents, and business invitees, shall comply with all present and future laws, rules, regulation, or ordinances promulgated by the City, the Airport, the Federal Aviation Administration (FAA), or other governmental agencies to protect the security and integrity of the Aircraft Operating Area (AOA), as defined by the Airport and the FAA, and to protect against access to the AOA by unauthorized persons. (b) Procedures. Subject to the approval of the Aviation Director, the CCREDC shall cause its sublessee to adopt procedures to control and limit access to the AOA by the CCREDC, its sublessee and their respective contractors, suppliers of materials, furnishers of services, employees, and business invitees in accordance with all present and future Airport and FAA laws, rules, regulations, and ordinances. Physical barriers to prevent access to the Air Operations Area must be in effect during any construction upon the Premises. (c) Indemnification. The CCREDC further agrees cause its sublessee to indemnify, hold harmless, defend and insure the City, its officers, agents, and employees against the risk of legal liability for death, injury, or damage to persons or property, direct or consequential, arising from entry of the AOA permitted, allowed or otherwise made possible by the CCREDC or sublessee or their respective contractors, suppliers of materials, furnishers of services, employees, business invitees, agents, or any person under the direction of such sublessee in violation of the City, Airport, and FAA laws, rules, regulations, or ordinances or such sublessee's Director-approved procedures for controlling access to the AOA. (d) Fines. The CCREDC shall cause its sublessee to pay any Federal Aviation Administration fines associated with security breaches or infractions by its agents, officers, business invitees, or employees in the AOA, regardless of whether the fine is assessed to the City, Airport, or the CCREDC or its sublessee, and their respective agents, officers, business invitees, or employees, which may be passed through to the CCREDC, its sublessee, agents or employees as set out in the City Code of Ordinances, Sec. 9-32. (e) Movement into Aircraft Operations Area ("AOA"). The CCREDC and its sublessee shall have access to the Airport's AOA, subject to compliance with all applicable FAA and Airport security procedures. Movement of all aircraft and persons from the Premises into the AOA and from the AOA into the Premises must be cleared in accordance with Airport and FAA rules and regulations. The CCREDC's sublessee is primarily responsible for opening and closing any security gates and doors permitting access to or from the Premises from or to the AOA. (f) Vehicles in AOA. No vehicles owned or operated by the CCREDC or its sublessee may operate within the movement or non-movement areas of the AOA except in compliance with FAA and Airport regulations. - 10- . f' . (g) Airport Certification. The CCREDC shall cause its sublessee to comply with all rules that are applicable to its operations on the Airport under the Airport Certification Rules of the Federal Aviation Regulations, Part 139, as amended [14 CFR Part 139, as amended]. Copies of the FAR are available in the office of the Aviation Director. (h) Airport Security.The CCREDC, its sublessee, and their officers, employees, invitees, agents, contractors, and guests shall comply with all federal and local Airport Security Regulations adopted by the City pursuant to 14 CFR Part 107, as same may be amended. The CCREDC shall cause its sublessee to indemnify and hold harmless the City, its officers and employees, from any charges, fines, or penalties that may be assessed or levied by the FAA by reason of the negligent or intentional failure of the CCREDC or its sublessee and their officers, employees, invitees, agents, contractors, or guests to comply with such Airport Security Regulations, regardless of whether the CCREDC, the City, or Airport has such fine, charge, or penalty levied against it. (i) 14 CFR Part 77 Requirements. The CCREDC shall cause its sublessee to comply with the notification and review requirements set out in Part 77 of the Federal Aviation Regulations [14 CFR Part 77], as amended, if it plans to construct or modify any present or current structure, antenna, or building located on the Premises. Copies of the FAR are available in the office of the Aviation Director. G) Control of Structures. The CCREDC shall cause its sublessee to not erect nor permit the erection of any structure, antenna, or building, nor permit the growth of any tree on the Premises, which has highest point above a mean sea level elevation established by FAA and the City as a height limitation on such structure, antenna, building, or object. The City may enter the Premises and remove the encroaching structure, antenna, building, or object at the expense of the CCREDC's sublessee. (k) Aerial Approaches. The City Manager may take any action he considers necessary to protect the Airport's aerial approaches against obstruction, including the right to prevent the CCREDC or its sublessee from erecting, or permitting to be erected, any building, antenna, or structure on or adjacent to the Airport, which in the City Manager's opinion, would limit the usefulness of the Airport or constitute a hazard to aircraft. (I) Right to Overflight. The City hereby reserves, for the use and benefit of the public, a right of flight for the passage of aircraft above the surface of the Premises, together with the right to cause in the airspace such noise as may be inherent in the operation of aircraft, now known or hereafter used for flight in the air, using the airspace for, landing at, or taking off from, or operating on the Airport. (m) Airport Layout Plan. The CCREDC shall cause its sublessee to furnish the Aviation Director with an amended airport layout plan prior to completion of construction. 13. Hazardous Substances. (a) The CCREDC and its sublessee shall comply with all environmental laws, rules, regulations, orders, and permits applicable to the their operations on or in the vicinity of the Airport, including but not limited to required National Pollutant - 11 - I r' I Discharge Elimination System Permits and all applicable laws relating to the use, storage, generation, treatment, transportation, or disposal of hazardous or regulated substances. Except for the hazardous substances governed by and transported in full compliance with the transportation laws of the state or federal government, neither such party shall knowingly use, store, generate, treat, transport, or dispose of any hazardous or regulated substances or waste on or near the Airport without the Aviation Director's prior written approval and without first obtaining all required permits and approvals from all authorities having jurisdiction over the operations on or near the Airport. (b) If the CCREDC or its sublessee determines that a threat to the environment, including but not limited to a release, discharge, spill, or deposit of a hazardous or regulated substance, has occurred or is occurring which affects or threatens to affect the Airport, or the persons, structures, equipment, or other property thereon, such party must immediately verbally notify (I) the Airport's Public Safety Office and (2) all emergency response centers and environmental or regulatory agencies as required by law or regulation. Such party shall provide the Aviation Director with written confirmation of the verbal report within 72 hours and cooperate fully with the Airport in promptly responding to, reporting, and remedying any threat to the environment, including without limitation a release or threat of release of a hazardous or regulated substance into the drainage systems, soils, ground water, waters, or atmosphere, in accordance with applicable law or as authorized or approved by any federal, state, or local agency having authority over environmental matters. (c) The CCREDC shall cause its sublessee to keep a readily accessible file of Materials Safety Data Sheets for each hazardous substance stored, used or transported in accordance with federal and state transportation laws, which file must be posted and immediately available to any Airport or the City employee who responds to the scene in the event of an accidental discharge of a hazardous substance. The sublessee's employees shall try to determine which hazardous substance was accidentally discharged and have that MSD sheet available for the first responders to the scene. (d) The CCREDC shall cause its sublessee to undertake all required remediation and pay all costs associated with its action or inaction that directly or indirectly causes the Airport to fail to materially conform to all then applicable environmental laws, rules, regulations, orders, or permits. The rights and obligations set forth in this Section 14 survive termination of this Lease. 14. Nondiscrimination/Affirmative Action. (a) Nondiscrimination-general. The CCREDC and its sublessee, as a part of the consideration hereof, covenants that: (I) no person on the grounds of race, creed, color, religion, sex, age, national origin, disability, or political belief or affiliation will be excluded from participation in, denied the benefits of, or otherwise be subjected to discrimination in the use of the Premises; (2) in the construction of any improvements on, over, or under the Premises and the furnishing of services thereon, no person on the grounds of race, color, religion, sex, age, national origin, disability or political belief or affiliation will be excluded from participation in, denied the benefits of, or otherwise be subjected to discrimination; (3) the CCREDC and its sublessee shall use the Premises in compliance with all other requirements imposed by orpursuant to Title 49, Code of Federal Regulations, Department of Transportation, Subtitle A, - 12 - .. l'"' . Office of the Secretary, Part 21, Nondiscrimination in Federally-assisted Programs of the Department of Transportation-Effectuation of Title VI of the Civil Rights Act of 1964, as amended, and with any other applicable state or federal laws or regulations, as amended. (b) Nondiscrimination-business owner. This Lease is subject to the requirements of the U.S. Department of Transportation's regulations, 49 CFR Part 23, Subpart F. The CCREDC and its sublessee agree that they will not discriminate against any business owner because of the owner's race, national origin, or sex in connection with the award or performance of any concession agreement, management contract or subcontract, purchase or lease agreement, or other agreement covered by 49 CFR Part 23, Subpart F. (c) Remedy for breach. If any party breaches a non-discrimination covenant, upon due notice and opportunity to cure, the City may reenter the Premises and the Premises and all the leasehold interest therein shall revert to the City and its assigns. This provision is not effective until the procedures of Title 49, Code of Federal Regulations, Part 21 are completed, including exercise or expiration of appeal rights. (d) Affirmative Action. The CCREDC shall cause its sublessee to undertake an affirmative action program as required by 14 CFR Part 152, Subpart E, to insure that no person on the grounds of race, creed, color, religion, sex, age, national origin, handicap, or political belief or affiliation is excluded from participating in any employment activities covered in 14 CFR Part 152, Subpart E. The CCREDC shall cause its sublessee to assure that no person will be excluded on these grounds from participating in or receiving the services or benefits of any program or activity covered by that Subpart. The CCREDC shall cause its sublessee to further agree to require its covered suborganizations to provide similar assurances to undertake affirmative action programs and to require assurances from their suborganizations, as required by 14 CFR Part 152, Subpart E. The CCREDC shall cause its sublessee at its expense to comply with any applicable requirements of the Americans with Disabilities Act (ADA) as it may be amended. IS. Compliance with laws. (a) General. The CCREDC shall cause its sublessee to promptly observe, comply with, and execute the provisions of any and all present and future governmental laws, ordinances, rules, regulations, requirements, orders and directions. Failure to observe or comply with the aforementioned laws will subject this Lease to cancellation by the City under Section 16 of the Lease. (b) Federal. The CCREDC shall cause its sublessee to comply with all applicable Federal laws, rules, and regulations, including without limitation the Drug Free Workplace Act, the Violence in the Workplace Act, the Americans with Disabilities Act, and any other acts that the U.S. Congress passes that applies to any entity that operates at the Airport. (c) Disadvantaged Business Enterprises (DBE). The CCREDC and its sublessee shall understand and agree to the following assurances: It is the City's policy that DBEs have the maximum practicable opportunity to be awarded Airport contracts. The CCREDC and its sublessee agree to use good faith efforts to promote this policy through the Lease at the Airport. - 13 . -, r r-'. Additionally, the CCREDC shall cause its sublessee as an Equal Opportunity Employer to use good faith efforts to provide maximum opportunity for the consideration and use of DBEs in the contracting, subcontracting and purchasing activities associated with this Lease and to abide by all applicable provisions of the Airport's DBE Program and this Lease. The CCREDC and its sublessee further agree that no person will be excluded from participation in, denied the benefits of, or otherwise be discriminated against in connection with the award and performance of any Airport contract because of race, color, religion, national origin, sex, age, disability, or political belief or affiliation, and as more specifically provided in Section 14 hereof. (d) State. The CCREDC and its sublessee shall covenant to comply with all applicable state laws, rules, and regulations. (e) Local. The CCREDC and its sublessee shall covenant to comply with all applicable City ordinances, and rules and regulations promulgated by the Aviation Director. 16. Cancellation - Termination. (a) Cancellation by the CCREDC. Without limiting any other rights and remedies to which the CCREDC or its sublessee may be entitled by common law, statutory law, or as elsewhere provided in this Lease, this Lease may be canceled by the CCREDC or its sublessee at any time in the event of one or more of the following events: (i) The permanent abandonment of the Airport; (ii) The lawful assumption by the United States Government, or any authorized agency thereof, of the operation, control, or use of the Airport, or any substantial part or parts thereof, that substantially restricts the CCREDC's sublessee from operating for at least 150 days; (iii) The issuance by any court of competent jurisdiction of an injunction that prevents or restrains the use of the Airport that continues for at least 150 days; or (iv) The default by the Airport in the performance of any covenant and the failure of the Airport to remedy the default for 150 days after receipt by the City of written notice to remedy the same. This Lease may not be terminated by CCREDC for as long as (i) the Bonds and CCREDC's obligations under the Credit Agreement and other Financing Documents are unpaid without the Bank's consent. (b) Termination by the City. Without limiting any other rights and remedies to which the City may be entitled at common law, statutory law, or as elsewhere provided in this Lease, this Lease may be terminated by the City if the CCREDC: (i) Is in arrears in paying any part of the rent, fees, or charges; '(ii) Makes a general assignment for the benefit of creditors; - 14- 'I r' , (iii) Abandons the Premises or any part thereof; (iv) Files a voluntary petition in bankruptcy; (v) Defaults on indebtedness to any lender with a security interest on any of the personal property ofthe CCREDC or its sublessee at the Premises; or (vi) Otherwise defaults in the performance of any of the covenants of the CCREDC and continues the default for 60 days, or such other time as may be provided herein, after receipt of written notice from the Aviation Director of the default. (If the default is such that it cannot be cured within 60 days or such other times may be set out in the notice of default, the CCREDC is deemed to have cured the default if it within the applicable period commences performance and thereafter diligently prosecutes the same to completion.) The Aviation Director shall provide written notice to the CCREDC and any Leasehold Mortgagee of any such termination (the 'Termination Notice") and the CCREDC and the Leasehold Mortgagee shall be afforded a cure period of not less than thirty (30) days for any default provided above [but any default under (vi) above shall have a 60-day cure period as provided above]. ( c) The City's Right of Entry Upon Termination. If the City terminates the Lease or if the Premises are abandoned, the City may enter upon the Premises. (i) In the event of termination by the City, the CCREDC hereby irrevocably appoints the City Manager its agent to remove any and all persons or property from the Premises and place any property in storage for the account of and at expense of the CCREDC. Except for personal property belonging to third parties, all property on the Premises is hereby subjected to a contractual landlord's lien to secure payment of delinquent rent and other sums due and unpaid under this Lease, any and all exemption laws are hereby expressly waived in favor of such landlord's lien; and it is agreed that such landlord's lien is not a waiver of any statutory or other lien given or which may be given to the City but is in addition thereto. (ii) The CCREDC agrees that if it defaults, the City Manager may, on 30 days prior written notice, sell the CCREDC's property found on the Premises at a public or private sale with proceeds of the sale applied first to the cost of the sale, then to the cost of storage of the property, if any, and then to the indebtedness of the CCREDC, with the surplus, if any, to be mailed to the CCREDC at the address herein designated. If the City terminates and reenters the Premises, the City may relet the Premises and if a sufficient sum is not realized, after paying expenses of the reletting, to pay the rent and other sums agreed to be paid by the CCREDC, the CCREDC agrees to pay any deficiency within 30 days of Aviation Director's written demand therefor, including itemized breakdown of all costs related thereto. The CCREDC further agrees to hold harmless and indemnify the City including its officers, agents, and employees, against any loss or dan\.age or claim arising out of the City's action in collecting monies owed it under this paragraph, except - 15 - I f' I for any loss, damage, or claim caused by the negligence or willful misconduct of the City or its employees. (d) Notice of Termination. If an event of default occurs, and after due notice the defaulting party has failed to cure, the complaining party may at any time after the expiration of any cure period, and if the default has not been cured, terminate this Lease by notice in writing. The Lease will be terminated on the date specified in the notice but not less than 5 business days from mailing the notice. Rental payments are payable only to the date oftermination. (e) Partial Destruction. If the Premises or the Facility or the Airport facilities reasonably necessary to operate the Facility are partially damaged due to acts of God or other acts outside the control of the CCREDC or the City to the extent that the Facility cannot be used, the insurance proceeds shall be used either to (i) replace the Facility or (ii) remove all trace of the Facility, take the Premises back down to raw land, and any remainder applied to the payment of the Bonds and other Financing Documents if the Bonds and such financial obligations have not been fully paid at such time. Any insurance proceeds remaining after either of the above options have been satisfied shall be paid as directed by the CCREDC. 17. Property Rights upon Expiration or Termination. (a) Removal of Equipment. Upon termination or expiration of this Lease, the CCREDC or its sublessee may remove all removable furniture, fixtures and equipment installed by them within 30 business days after termination or expiration of the Lease. Any damage to the Premises caused by the removal of such property must be repaired within 15 business days after termination or expiration of the Lease to the satisfaction of the Aviation Director. Notwithstanding the foregoing, if the CCREDC or its sublessee fails to remove such removable furniture, fixtures and equipment within 30 business days from the date of termination or expiration of this Lease, then the City Manager may, at his option, take title to the said personalty and sell lease or salvage the same, as permitted by law. Any net expense the City Manager incurs in behalf of the City in disposing of the personalty must be paid by the CCREDC within 10 days of the City Manager's written demand therefor including an itemized breakdown of the costs recaptured and the balance due. (b) New Lease - Equipment Removal Not Required. If the City and the CCREDC negotiate a new lease, the CCREDC does not have to remove its equipment or personal property. (c) Improvements Revert to The City. Except for the CCREDC's personal property and subject to Section 8, at the expiration of the Lease all improvements placed on the Premises by the CCREDC shall revert to the City in accordance with the City Charter, Article VIII, Section 2, as amended. (d) Holdover. Any holding over by the CCREDC of the Premises after the expiration or other termination of this Lease will be on a month-to-month tenancy at sufferance, at the then current monthly rental rate, and the CCREDC agrees to surrender the Premises upon 30 days written notice. Failure to timely surrender the Premises following notice subjects the CCREDC to a monthly hold over fee ofthe then current monthly rental rate for each month of delay. - 16 - - ~ . - 18. Redelivery of Premises. Upon expiration or termination of this Lease, the CCREDC shall deliver the Premises to the City peaceably, quietly, and in as good condition as the same now are or may be hereafter improved by the CCREDC or the City, normal use and wear thereof and damage by casualty excepted. In addition to landlord's lien provided by the law of the State of Texas, the Airport has a contractual lien on all property of the CCREDC on the Premises, which shall be second and inferior only to the Bank Mortgage, as security for payment of rent. 19. The CCREDC's Maintenance Obligations. (a) Premises. The CCREDC shall cause its sublessee to maintain the Premises in good appearance and repair, and in a safe condition at its expense. The CCREDC shall cause its sublessee to maintain, repair, replace, paint, or otherwise finish all leasehold improvements on the Premises (including, without limitation, walls, partitions, floors, ceilings, windows, doors, and glass, and all furnishings, fixtures, and equipment therein). All of the maintenance, repairs, finishing and replacements must be of quality at least equal to the original in materials and workmanship. (b) Quality of Maintenance. It is the intent of the Aviation Director and the CCREDC that all improvements will be maintained in such a manner as to keep the Facility intact, in good repair, and in such condition that it will be usable at the end of the Lease. The CCREDC shall cause its sublessee to comply with the maintenance obligations of Sections 10 and 19 and with all applicable governmental laws, rules, or regulations. The Aviation Director is the sole judge of the quality of such maintenance, which must be reasonable and consistent with other Airport properties. The Aviation Director may at any time, during the City's normal business hours, with reasonable prior notice, enter upon the Premises to determine if the CCREDC is fulfilling the maintenance requirements of this Lease. The Aviation Director must notify the CCREDC in writing of any default. If the required maintenance in the Aviation Director's notice to the CCREDC is not commenced by the CCREDC within 15 business days after receipt of written notice, or is not diligently prosecuted to completion, the Aviation Director may enter upon the Premises and perform the subject maintenance, and the CCREDC agrees to reimburse the Airport for its cost within 30 days after Aviation Director's written demand therefor, together with copies of all bids for the repairs and maintenance. (c) Correct Hazards. The CCREDC shall cause its sublessee to immediately correct any hazardous or potentially hazardous condition on the Premises after receipt of notice from the Aviation Director. At the Aviation Director's discretion, the CCREDC shall require its sublessee to close the Premises, or any affected portion, until the hazardous or potentially hazardous condition is removed or corrected. 20. The City's Obligations: (a) To operate Corpus Christi International Airport as a public airport during this Lease subject to the assurances given by the City to the United States Government under the Federal Airport Act. - 17- - ..... - (b) To make water, gas, and wastewater service available to the property lease line upon the same basis as applies to other businesses on the Airport. The CCREDC shall cause its sublessee to pay for utility usage charges for water, gas, wastewater, electricity and other utilities supplied to the Premises during the Lease as such charges become due and payable. 21. Indemnification. (a) General. The CCREDC shall cause its sublessee to indemnify, hold harmless, defend and insure the City, its officers, agents, and employees from and against any and all claims and causes of. action, administrative proceedings, judgments, penalties, fines, damages, losses, demands, liabilities, or expenses whatsoever (including reasonable attorney's fees and costs of litigation, mediation and/or administrative proceedings) which may be brought, alleged, or imposed against the City, its officers, agents, or employees arising directly or indirectly from or in any way connected with (i) any property damage or loss, personal injury, including death, or adverse effect on the environment arising out of any action or inaction of the sublessee with regard to its operations hereunder, including the use or occupancy of the Premises, or in providing access to secured areas of the Airport as set out herein, excepting only such liability as may result from the gross negligence ofthe City, including its officers, agents, and employees; (ii) the failure of such sublessee, its agents or employees, to comply with the terms and conditions of this Lease, or to comply with any applicable federal, state, or local laws, rules, regulations, or orders including, but not limited to, any and all federal, state, or local environmental laws, rules, regulations, or orders; or (Hi) release of any hazardous or regulated substances or waste onto, into, or from the Premises or other Airport property connected in any way with the sublessee's operations or the action or inaction of such sublessee, its agents or employees, regardless of whether the act, omission, event, or circumstance constituted a violation of applicable law at the time of the occurrence. The rights and obligations set forth in this Paragraph shall survive the termination of this Lease. (b) Special Claims. The CCREDC shall cause its sublessee to defend, at its own cost, and protect, indemnify, and otherwise hold harmless, the City, including its officers, agents, and employees (including but not restricted to the posting of bond and release of attachment) from and against any and all claims in any way arising out of or in connection with the construction, repair, or maintenance work undertaken hereunder by, through or on behalf of the CCREDC or its sublessee, or arising out of or in connection with the operation of the concession under this Lease, including but not restricted to attachments, liens or levies, and whether or not the claim is meritorious, made, failed or asserted by any party other than the CCREDC or its sublessee against the City, including its officers, agents, and employees or the Premises or improvements thereon or part thereof, or monies owing to the Airport. (c) Notice. Notwithstanding the above indemnifications, the CCREDC shall give the Aviation Director notice of any matter covered hereby and forward to the Aviation Director copies of every demand, notice, summons, or other process received in any claim or legal proceeding covered hereby within 10 working days of the CCREDC's receipt of said notice, demand, summons, etc. - 18 - 'I' , 22. Insurance. (a) The CCREDC shall cause its sublessee to provide insurance in the amounts and types of coverages required by the City's Risk Manager. Such insurance company(ies) shall provide the Aviation Director and the Risk Manager certificate(s) of insurance 30 days prior to the annual anniversary date of the Effective Date of the Lease, which shows the level and type of insurance. The insurance company(ies) shall provide the Aviation Director 30 days written notice, by certified mail, prior to cancellation, non-renewal, or material change in the insurance policy(ies). (b) The City's Risk Manager will annually assess the level and types of insurance required by the Lease. The Risk Manager can increase or decrease the level or types of insurance by giving the CCREDC and its sublessee notice no less than 60 days prior to the annual anniversary date of the Effective Date of the Lease; however, such increase or decrease of the level or type of insurance must be comparable with, and no greater than, the minimal levels or types of insurance of other tenants with similar activities on the Airport. The CCREDC and its sublessee shall have 30 days to procure the changed insurance and provide written proof of insurance to the Aviation Director. (c) All insurance required by this Lease must be primary insurance, and not in excess of or contributing with other insurance which the CCREDC's sublessee may carry. All policies must name the City as an additional insured or loss payee. The insurance policies as required by this Lease must apply separately to the City, as if separate policies had been issued to such sublessee and the City. (d) The amounts of all required insurance policies must not be deemed a limitation of the covenant to indemnify the City, and if the CCREDC's sublessee or the City becomes liable in an amount in excess of the amount(s) of such policies, then the CCREDC's sublessee must indemnify the City from the whole thereof, except in the event of grossly negligence or willful misconduct on the part of the City, its officers, agents, or employees. 23. Notice. Notices are sufficient if in writing; and sent by certified mail, return receipt requested, postage prepaid, or by overnight delivery service, or by facsimile as addressed below: If to the City: If to the CCREDC: Aviation Director Corpus Christi International Airport 100 International Drive Corpus Christi, Texas 78406 ph: (361) 289-0171 fax: (361) 289-0251 President Corpus Christi Regional Eco. Dev. Corp. 800 N. Shoreline Drive, Suite 1300 South Corpus Christi, Texas 78401 ph: (361) 882-7448 fax: (361) 882-9930 If to Bank: Bank of America, N.A. Attn: Ted Puckett 500 N. Shoreline Blvd. - 19- .. 1'"" , Corpus Christi, TX 78401 Ph: (361) 881-6797 Fax: (361) 881-6809 or to such other address as may be designated in writing from time to time. All notices sent by certified mail are deemed received on the third business day after mailing. All notices sent by overnight delivery are deemed received on the next business day after being sent. All notices sent by facsimile are deemed received on the day sent. Any party may change its address by giving notice to all other parties as set out herein. 24. GENERAL PROVISIONS. (a) Mineral Rights. The City expressly reserves all water, gas, oil and mineral rights in and under the soil beneath the Premises. (b) No Waiver of Forfeiture. Any failure or neglect of the City Manager or the CCREDC at any time to declare a forfeiture of this Lease for any breach or default whatsoever hereunder does not waive the City's right thereafter to declare a forfeiture for like or other or succeeding breach or default. (c) Force Majeure. Neither the City nor the CCREDC will be deemed to be in breach of this Lease if either is prevented from performing any of its obligations hereunder by reason of force majeure. Force Majeure means any prevention, delay, or stoppage due to strikes, lockouts, labor disputes, acts of God, including inclement weather and/or periods of rain or snow, inability to obtain labor or materials, or reasonable substitutes therefor, governmental restrictions or requirements, governmental regulations, governmental controls, inability to timely obtain governmental approvals, enemy or hostile government action, civil commotion, fire or other casualty, and other causes beyond the reasonable control of the party obligated to perform. All such events excuse the performance by such party for a period equal to any such prevention, delay, or stoppage, including; the obligations imposed with regard to commencement or payment of rental and other charges to be paid by the CCREDC pursuant to this Lease and the obligation of the City to deliver the Premises. (d) Quiet Enjoyment. The City covenants that it has the authority to execute this Lease, that at commencement of the Lease, the City has good title to the Premises and that throughout the term hereof, the CCREDC will have peaceful and uninterrupted possession of the Premises subject to its payment of Rentals and other charges and to its performance of the covenants of the Lease. The City agrees to remedy any violation of quiet enjoyment caused by the City or one of the other Airport Tenants and to honor the CCREDC's tenancy for the term of the Lease. (e) Rules and Regulations. The Aviation Director may adopt and enforce Rules and Regulations, to be uniformly applied to similar uses and users of similar space, which the CCREDC agrees to observe and obey with respect to the use of the Premises and the Airport, and the health, safety and welfare of those using the Premises and the Airport. .20. .. f" I (f) Headings. The titles and headings in this Lease are used only for reference, and in no way define or limit the scope or intent of a provision of the Lease. (g) Venue. Venue of any action brought under this Lease lies in Nueces County, Texas, exclusively, where the Lease was executed and will be performed. (h) Successors and Assigns. Subject to the limitations upon assignment and transfer herein contained, this Lease binds and inures to the benefit of the parties hereto and their respective successors and assigns. (i) No Third Party Benefit. No provision of this Lease creates a third party claim against the City of Corpus Christi, the Airport, or the CCREDC, beyond that which may legally exist in the absence of any such provision. G) Taxes and Licenses. The CCREDC shall cause its sublessee to pay all taxes of whatever character, including ad valorem and intangible taxes, that may be levied or charged upon the Premises, leasehold Improvements, or operations hereunder and upon the CCREDC's rights to use the Premises, whether the taxes are assessed against the CCREDC or the City prior to the past due date. The CCREDC shall cause its sublessee to pay any and all sales taxes arising in connection with its occupancy or use of the Premises whether the taxes are assessed against the CCREDC or the City. The CCREDC shall cause its sublessee to obtain and pay for all licenses or permits necessary or required by law for the construction of Improvements, the installation of equipment and furnishings, and any other licenses necessary for the conduct of its operations hereunder. If the CCREDC wishes to contest any such tax or charge, that contest will not be a default under the Lease so long as the CCREDC diligently prosecutes the contest to conclusion and promptly pays whatever tax is ultimately owed. Further, the CCREDC must pay any taxes not being contested prior to the past due date. (k) Trash and Refuse. The CCREDC shall cause its sublessee to arrange for the collection and lawful disposal of all trash and other refuse resulting from its operation of the Premises. The CCREDC shall cause its sublessee to provide and use suitable sealed fireproof receptacles approved by the Aviation Director for all trash and other refuse generated by the CCREDC's use of the Premises. Piling of boxes, cartons, barrels or other similar items in, or within view from, a public area is not permitted. The CCREDC shall cause its sublessee to comply with all applicable laws and regulations relative to trash disposal, and the CCREDC must pay the costs associated with trash removal and disposal. (I) Terms binding on successors and assigns. agreements herein contained shall be binding upon and successors and assigns of the CCREDC and the City. All of the terms, covenants and shall inure to the benefit of the (m) Estoppel. Both parties agree that at any time and from time to time at reasonable intervals, within fifteen (15) days after written request by the other party, such party will execute, acknowledge and deliver to the party designated by the other parry, a certificate in a form as may from time to time be provided, certifying the following, as well as any other provision reasonably requested by the other party: (i) that the CCREDC has entered into occupancy of the - 21 - .. . Premises and the date of such entry if requested; (ii) that this Lease is in full force and effect, and has not been assigned, modified, supplemented or amended in any way (or if there has been any assignment, modification, supplement or amendment, identifYing the same); (iii) that this Lease represents the entire agreement between the City and the CCREDC as to the subject matter hereof (or if there has been any assignment, modification, supplement or amendment, identifying the same); (iv) the date of commencement and expiration of the term; (v) that all conditions under this Lease to be performed by the City, if any, have been satisfied (and if not, what conditions remain unperformed); (vi) that to the knowledge of the signor of such writing no default exists in the performance or observance of any covenant or condition in this Lease and there are no then existing defenses or offsets against the enforcement of this Lease by the City or specifYing each default, defense or offset of which the signer may have knowledge; and (vii) the amount of rent or other rental, if any, that has been paid in advance and the amount of security, if any, that has been deposited with the City. (n) Short Form of Lease. The parties agree to execute a short form of lease referring to this Lease and suitable for recording. (0) Sublease. The parties agree and acknowledge that the CCREDC's obligations hereunder are conditioned on the delivery of a fully executed sublease between the CCREDC, as sublessor, and Vision Technologies Aerospace, Ltd., as sublessee, to use the Facility constructed by the CCREDC upon the Premises. rfVision Technologies Aerospace, Ltd. and the CCREDC fail to enter into a sublease, the CCREDC may terminate this Lease within 60 days of notice that there will be no sublease, and the Lease will automatically terminate upon the Aviation Director's receipt of the CCREDC's notice of termination for failure to execute a sublease with Vision Technologies Aerospace, Ltd. without further action of the City Council being required. (P) Radio Antenna. Subject to the Aviation Director's prior written approval as to height and location, which Will not be unreasonably withheld, the CCREDC may furnish and install, at its own expense, a radio antenna on the roof of the building over the Premises, subject to (i) any and all zoning and other regulatory laws, ordinances, statutes, rules, regulations and orders applicable thereto, (ii) the CCREDC obtaining any and all building and other permits, licenses and other approvals with respect thereto, (iii) the antenna and building both must be structurally sound and not adversely effect the soundness of and/or the condition of the roof and/or other parts of the building, and (iv) any and all costs of maintaining and operating the same must be paid entirely by the CCREDC. Upon the expiration or termination of this Lease, the CCREDC shall remove said antenna(s) and restore any damage to the roof and/or building and Premises caused by the installation and/or removal thereof the CCREDC must pay for all costs for the repair and maintenance of said installation of the antenna. (q) Environmental Assessment. The City will conduct a phase r environmental assessment of the Premises prior to start of construction by the City to establish a baseline for the Premises. The City will provide the CCREDC a copy of the phase r environmental assessment prior to start of construction, and the CCREDC will reimburse the City for the cost of such assessment. - 22- -., f' 1 (r) Requirements of Sublessee. The CCREDC may fully discharge its obligation to cause its sublessee to take the actions described above in various provisions of this Lease by requiring such actions in the Sublease between the CCREDC and its sublessee and enforcing the Sublease in accordance with its terms. The CCREDC shall not be required to take any further action, other than the contractual requirement as specified above, to cause such sublessee to perform as required. (s) Terms binding on successors and assigns. All of the terms, covenants and agreements herein contained must be binding upon and inure to the benefit of the heirs, successors and assigns of the CCREDC and the City. EXECUTED on ,2001. Attest: CITY OF CORPUS CHRISTI By: David R. Garcia, City Manager Armando Chapa, City Secretary Legal Form Approved on James R. Bray, Jr. City Attorney ,2001 By: CORPUS CHRISTI REGIONAL ECONOMIC DEVELOPMENT CORPORATION By: President \\SERVER\SYS\lI\Agmt.Ol\EOC\City.Ground Lease-I-2.doc - 23 - -. r r-..,..