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HomeMy WebLinkAbout026920 ORD - 08/22/2006AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE A REAL ESTATE OPTION AGREEMENT WITH SCANNELL DEVELOPMENT COMPANY OR ITS SUBSIDIARY IN CONSIDERATION OF $1.00 OPTION FEE FOR THE FIRST OPTION PERIOD OF NINE (9) MONTHS, $20,000 FOR NEXT SUCCESSIVE TWELVE (12) MONTHS AND $20,000 FOR NEXT SUCCESSIVE TWELVE (12) MONTH PERIOD, TO LEASE ALL OR PART OF APPROXIMATELY 56 ACRES OF LAND IN PHASE I OF THE CORPUS CHRISTI INTERNATIONAL AIRPORT BUSINESS CENTRE (STATE HWY 44 WEST OF INTERNATIONAL DRIVE NORTH OF GLASSON AND EAST OF PINSON ROAD) AT ANNUAL RATE OF TWENTY -FIVE CENTS PER SQUARE FOOT FOR PROPERTY WHICH FRONTS INTERNATIONAL DRIVE, AND ANNUAL RATE OF FIFTEEN CENTS PER SQUARE FOOT FOR ALL OTHER PROPERTY, TO BE INCREASED EVERY FIVE YEARS BY 7.5 %, FOR A TERM OF FORTY YEARS WITH TWO SUCCESSIVE FIVE YEAR OPTIONS TO RENEW; AND PROVIDING FOR PUBLICATION. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS, THAT: SECTION 1. The City Manager, or his designee, is authorized to execute a real estate opon agreement with Scannell Development Company or its subsidiary in consideration of $1.00 option fee for the first option period of nine (9) months, $20,000 for next successive twelve (12) months and $20,000 for next successive twelve (12) month period to lease all or part of approximately 56 acres of land in Phase I of the Corpus Christi International Airport Business Centre (State HWY 44 west of International Drive north of Glasson and east of Pinson Road) for a term of forty years with two successive five year options to renew. Rent shall be twenty -five cents per year per square foot for property which fronts International Drive, and fifteen cents per year per square foot for all other property. The Real Estate Option Agreement shall be in substantially the same format and content as attached in Exhibit "A ". SECTION 2. Publication will be made in the official publication of the City of Corpus Christi as required by the City Charter of the City of Corpus Christi. Airport Scannell.doc _l) That the fore oing ordinance as r-ad for the first time and passed to its second reading on this they of ! , 2006 for the following vote: Henry Garrett Brant Chesney John E. Marez Melody Cooper Jerry Garcia Bill KeIIy Rex A. Kinnison Jesse Noyola Mark Scott That the foregping or inance was read for the second time and passed finally on this the day of of Henry Garrett Brent Chesney John E. Marez Melody Cooper Jerry Garcia 2006, by the following vote: Bill KeIIy Rex A. Kinnison Jesse Noyola 14/341(44, Mark Scott APPROVED AND PASSED on this - day of ATTEST: Armando Chapa, City + : cretary - my Garr- Mayor APPROVED: July 20, 2006 Lisle Aguilar Aseistant City Attorney For City Attorney AIRPORT SC: ANNELL doc.11a , 2006. REAL ESTATE OPTION AGREEMENT THIS REAL ESTATE OPTION AGREEMENT (the "Agreement ") is made as of the day of 2006 ( "Agreement Date ") by and between the City of Corpus Christi ( "Owner "), and SCANNELL DEVELOPMENT COMPANY. an Indiana corporation ('`Grantee "). In consideration of the mutual covenants and agreements hereinafter set forth, Grantee desires to obtain from Owner and Owner desires to grant to Grantee an option to lease all or part of approximately 5' acres of land located in Phase I, of the Corpus Christi International Airport International Business Centre. The actual site is south of State Hwy 44, west of International Drive, north of Glasson, and east of Pinson Road, certain real estate located in Nueces County, Corpus Christi, TX, together with any improvements located thereon. as more specifically described on Exhibit A attached hereto (the "Real Estate ") upon the following terms and conditions: 1. Option and Consideration. Owner hereby grants to Grantee an exclusive and irrevocable right and option to lease all or portions of the Real Estate for the price and subject to the terms and conditions set forth herein (each such exercise by Grantee being referred to herein as an "Option" or the "Option "). Grantee may not sublease the Real Estate to a current or potential tenant of the Corpus Christi International Airport. A listing of current tenants and potential tenants shall be provided to Grantee upon the execution of this Agreement and upon execution of the Lease. Grantee's exclusive right to exercise the Option shall begin as the Agreement Date and shall continue from the date of City Council approval, which is and continue for a period of thirty -three (33) months thereafter) (the "Option Period "). Grantee shall exercise an Option by giving written notice thereof to Owner by depositing said notice in the t.S. Mail (certified, return receipt requested) or by commercial overnight delivery service, or by hand delivery, facsimile or electronic mail, at or before midnight on the last day of the Option Period. In consideration for such Option, Grantee has deposited with Chicago Title Insurance Company (the "Title Company ") funds in the total amount of One Dollar (S1.00) (the "First Option Fee "), which shall be the only deposit necessary for the first nine (9) months of the Option Period, beginning on the Option Period Trigger Date (the "First Period "). If the Grantee has not exercised its Option for the entire Real Estate by the expiration :If the First Period, Grantee shall deposit an additional amount of Twenty Thousand Dollars ($20,000.00) to the Title Company. which amount will become the Option Fee necessary for the next successive 12 months (the "Second Period "), and if the Grantee has not exercised its Option for the entire Real Estate by the expiration of the Second Period, Grantee shall deposit an additional amount of Twenty Thousand Dollars ($20.000.00) to the Title Company, which will become the Option fee necessary for the next successive 12 months (the "Third Period "). Fifty percent (50 %) of the Option Fee will be applied as a credit against the Rent (defined below) in the event Grantee exercises an Option; otherwise, if Grantee has not exercised an Option, and the failure to exercise an Option or close on a Lease is not due to an Owner's failure to perform a condition precedent, the Option Fee shall be immediately delivered to Owner. In such an event. Owner shall retain the Option Fee as liquidated damages and Owner waives any claim for damages at law or in equity and waives any claim for specific performance and agrees that such liquidated damages shall be Owner's sole remedy at law or in equity. t pun expiration or termination of the Option Period, Grantee shall have no further right or Option under this Agreement. 2. Lease Execution. If an Option is exercised by the Grantee in accordance with the terms and conditions set forth herein. a mutually acceptable document, substantially in the form attached hereto as Exhibit B for the portion of the Real Estate for which the Option has been exercised, (the "Leased Real CLEAN Scannell Option Agreement -Cit■ of( orpus ('hnst+ 7-2o 06 [K)C Estate "), shall be executed by the parties in a timely fashion after the said Option is exercised (a "Lease "). Possession of the Leased Real Estate shall be delivered to Grantee simultaneously with the Lease execution. Owner shall execute and deliver to Grantee such documents or instruments as may be reasonably necessary or appropriate to evidence the execution of the Lease. 3. Lease Terms. The term of the Lease for the Leased Real Estate shall be forty (40) years, with up to two (2) five (5) -year non - automatic options to extend the term with terms to be negotiated at the time of each renewal. The Rent for the Leased Real Estate shall be fifteen cents ($0.15) per year, times the square footage of the Leased Real Estate, as determined by the Survey, net of square footage located within any rights -of -way. roads. easements, ditches, wetlands, or other physical or legal impediments to the full use of the Leased Real Estate ( "Rent "). However, any parcels leased with frontage on International Drive which shall be leased at a rate of twenty -five cents ($0.25) per year times the square footage of the Leased Real Estate. Rent shall be paid in monthly installments, beginning on the first day of the month immediately following the execution of the Lease. Rent shall increase7.5% every five (5) years from Commencement Date of each Supplemental Lease. 4. Site Condition. Owner shall deliver the Real Estate fully improved, with all utilities and access roads in place. Owner further warrants the Real Estate to be environmentally clean condition and in compliance with all applicable environmental laws; and zoned for office, warehouse /distribution development. Owner will provide to Grantee any information it has with regards to environmental reports & geotechnical /soils reports within ten (10) days following the execution of this Agreement. 5. Survey and Title. A commitment for and Owner's Policy of Title Insurance, an ALTA and a Topographical Survey ( "Survey ") will be provided by Owner to Grantee, within forty -five (45) days following the execution of this Agreement. Grantee shall have thirty (30) days in which to review and either accept the status of title and the Survey or make an objection to Owner, and Owner shall have forty - five (45) days in which to remove or otherwise correct the objection to Grantee's satisfaction. Further, upon the exercise of an Option, Owner shall provide an updated Survey and Title Commitment for the Leased Real Estate, and the same review and objection procedure shall apply. 6. Taxes. At each Lease execution, Owner shall pay all taxes and assessments relating to the Leased Real Estate that have accrued and are due and payable prior to and on the date of the Lease signing. Grantee shall pay all taxes and assessments related to the Real Estate due and payable after the Lease execution. Any and all transfer or conveyance taxes and all recording fees shall be paid by the Owner. 7. Owner's Representations. There are no existing violations of zoning ordinances or of other governmental laws or restrictions applicable to the Real Estate. The Owner holds marketable fee simple title to the Real Estate and has not entered into any other agreement for the lease, purchase or sale of the Real Estate and is not bound by any law, statute, agreement or indenture that would prevent Owner from complying with its obligations under this Agreement. The Owner has taken, or will take, all required action necessary to enter into this Agreement, grant the Option and enter into Lease(s) of the Real Estate. The person signing this Agreement on behalf of Owner has been duly authorized to do so, and upon execution, this Agreement shall he the valid, duly binding obligation of Owner, enforceable with its terms. There are no brokers' commissions due by reason of this Agreement or any transaction contemplated hereby. 8. Conditions Precedent. The exercise of any Option and entry into any Lease by Grantee is �i,.cil Op n,gren hr subject to the satisfaction of the following conditions precedent: (a) that the Survey and Title Commitment reveal no matters or exceptions which are objectionable to Grantee, in its sole discretion; (b) the Real Estate is finally and unconditionally zoned for Grantee's intended use of the Real Estate as ll imited by Section 9. and all permits for the Grantee's intended use of the Real Estate have been obtained by Grantee: (c) that the physical condition of the Real Estate, as reported by Owner or tested and inspected by Grantee is suitable to Grantee, as determined solely by Grantee; (d) that the environmental condition of the Real Estate, as reported by Owner or tested and inspected by Grantee is acceptable to Grantee, as determined solely by Grantee; (e) all required infrastructure has been completed by Owner as required herein to Grantee's satisfaction: (t) all utilities deemed necessary or desirable for Grantee's intended use of the Real Estate are available at the Real Estate at such locations and in such quantities as are satisfactory to Grantee; (g) Grantee has secured a sublease for the Leased Real Estate upon such terms which are satisfactory to Grantee in its sole discretion; (h) development within the site will be located on sites which are mutually agreed upon by Grantee and Owner; and (i) all of Owner's representations and warranties remain true and correct. In the event of the failure of one or more of any of these conditions precedent, at any time prior to the execution of a Lease, the Grantee, at its option, (i) may terminate the Option as to the Leased Real Estate or the entire (remaining) Real Estate, (ii) may make the objection in writing to Owner, which shall have sixty (60) days in which to cure said objection, or (iii) may waive any objection and proceed to enter into the Lease. If Grantee terminates the Option as to the Leased Real Estate but not the entire (remaining) Real Estate, this Agreement and the Option shall survive, and any Option Fee shall remain with the Title Company. In the event Grantee terminates the Option as to the entire (remaining) Real Estate due to failure of Owner to comply with conditions herein, then this Agreement shall terminate, and any portion of the Option Fee remaining with the Title Company shall be paid over to Grantee. At the termination of this agreement, Grantee shall turn over all studies and data gathered for the purpose of development of the site including marketing data as well as any engineering or architectural drawings, soil samplings. environmental studies, appraisals, proformas, surveys, and construction cost estimates. 9, Permitted Uses: No Building, structure, or land shall be used for any purpose other than the following, or any combination thereof. and such uses shall satisfy the standards set forth is this Declaration ndl 0,ti Apeeui. - a, General permitted industrial classifications are as follows: research and light industry. industrial support, and medium and heavy industry, warehousing, and wholesaling. b Administrative, retail. and professional office use shall be permitted. Prohibited Uses: The following uses shall not be permitted on the Leased Premises at any time: activities not allowed in City Of Corpus Christi Zoning Ordinance Classification 1 -3, junkyards; mining and quarrying; dumping, disposal, incineration, or reduction of garbage, sewage, offal, dead animals, or refuse; fat rendering, stockyards or slaughtering of animals; smelting of iron, tin, zinc, or other ores; large animal raising, sexually oriented business establishments, any establishment that derives more than fifty (50) percent of its gross receipts from the sale of alcohol, advertisement signage excluding Lessor approved tenant signage and Lessor approved Lessee marketing signage, and paid public parking facilities. �rc�,u�•hn,., 2 Approval of Uses: Certain industrial uses may neither be specifically prohibited nor specifically permitted. In these cases. approval in writing of the use must be obtained from the Owner prior to approval of plans and specifications for construction of the facility. 10. Assignment. This Agreement may be assigned by the Grantee by obtaining the written consent of the Owner which shall not be unreasonably withheld. The Owner shall not be permitted to assign this Agreement without the written consent to the Grantee which may be withheld in the Grantee's sole and absolute discretion. 11. Authority. The persons executing this Agreement on behalf of Owner are duly elected or appointed representatives of Owner and have been fully empowered by proper ordinance of the Owner to execute and deliver this Agreement. 12. Cooperation. The Owner will cooperate with Grantee in providing information about the Real Estate and grants to Grantee the right to go on the Real Estate to perform such tests and inspections as Grantee determines to be necessary. The Owner will execute all documents reasonable necessary to consummate the transaction contemplated in this Agreement. 13. Miscellaneous. This Agreement may be executed in counterparts, each of which shall be deemed to he an original. and all of which when taken together shall constitute one and the same instrument. At the request of either party, a Memorandum of this Agreement shall be prepared and executed by the parties. which shall be recorded in the appropriate government office in the County where the Real Estate is located. Time is of the essence of this Agreement. The risk of loss of all (or a portion of the Real Estate) shall be on Owner until such time that such Real Estate is leased. EXECUTED, the day and year first above written. CITY OF CORPUS CHRISTI. SCANNELL DEVELOPMENT COMPANY, a(11) an Indiana corporation Bv. Printed: George K. Noe Title: City Manager ,.,,,,,e, ,,,n ,gee,.,, -„ By: Printed: Title: 4 EXHIBIT A INTERNATIONAL BUSINESS CENTRE $TATS HWY 44 i AND AREA N T P CEL 4 ' / S . '/ , \ A� I's�f6 1 IiiiI ' I INTERNATIONAL BUSINESS CENTRE # ,, 9 ( ' I 7 r Total Land Area Available- Approx. +i- 57.0 Acres t 1. I fti; ,s; ex vCtc .»v e''''''÷'''' COMMINP - - 7 —1 7 " — a manoggiitior r, . M li�'i r llJ Fiit3i - T4A0vf EXHIBIT A REAL ESTATE 5 EXHIBIT B GENERAL TERMS AND CONDITIONS AGREEMENT (to Supplemental Leases) This General Terms and Conditions Agreement (to Supplemental Leases) "GTCA" is made and entered into as of 200(the "Effective Date "), between the City of Corpus Christi, a political subdivision of the State of Texas ( "Lessor "), and Scannell Development Company, an Indiana corporation (together with its successors and assigns "Lessee "), with respect to the following facts, and is as follows: A. B. D. RECITALS Lessor is the owner of approximately acres of land located in the City of Corpus Christi. County of Nueces, Texas more particularly described in Exhibit A attached hereto and incorporated herein (the "Land "). Lessor intends to Lease from time to time its ownership interest in all or part the Land to Lessee to permit Lessee to construct and own buildings and other structures and improvements (the "Improvements ") on the Leased Premises as defined below at Lessee's sole cost, expense and risk. The lease of all or part of the Land shall be evidenced by Supplemental Leases executed by and between Lessor and Lesssee, similar in form and substance to the Short term and Long term Supplemental Leases attached hereto as Exhibit B. The Improvements together with the Land are on occasion collectively referred to as the "Property ". The "Leased Premises" shall consist of the Property leased and demised under any Supplemental Lease. Lessor and Lessee desire to create hereby a GTCA under which Lessor and Lessee shall have the right to enter into Supplemental Leases for all or part of the Property, which Supplemental Leases shall be operative pursuant to the terms, covenants and conditions hereof. It is specifically agreed and understood that any Supplemental Lease executed by and between Lessor and Lessee shall be governed by and subject to all of the terms, .. ovenants and conditions hereof as if set out verbatim in any Supplemental Lease. 1. BASIC TERMS 1.1 This Section 1 contains the Basic Terms of the GTCA between the Lessor and Lessee named below. Other Sections of the GTCA referred to in this Section 1 explain and define the Basic Terms and are to be read in conjunction with the Basic Terms. Address of Lessee: Scannell Development Company 800 East 96th Street, Suite 175 Indianapolis, IN 46240 Attn: Douglas L. Snyder Telephone No: (317) 843 -5959 6 Address of Lessor: Facsimile No: (317) 843 -5957 With a copy to: James C. Carlino, Esq. General Counsel Scannell Development Company 800 East 96th Street, Suite 175 Indianapolis, IN 46240 Corpus Christi International Airport 1000 International Drive Corpus Christi, Texas 78406 Attn: Dave Hamrick , Director of Aviation Telephone No.: (_361 J 289_- 0171 Facsimile No.: ( 361 j _298 - 0251 1.2 Land: All of Lessor's undivided interest in the Land. 1.3 Lease Term: The short term Supplemental Lease has a one (1) year term which shall be superceded by a forty (40) years and zero (0)months Long term Supplemental Lease beginning on the sixty -first (61st) day after final City Council approval (Commencement Date) (the "Initial Term ") (See Section 2.2) or such other date as is specified in the Long term Supplemental Lease executed by and between Lessor and Lessee, and ending on the Expiration Date (See Section 2.2), ( "Lease Term "). 1.4 Options To Extend: Two (2) successive five (5) year non - automatic options to extend Lease Term with terms to be negotiated at time of each renewal. (See Section 2.3) 1.5 Permitted Uses: No Building, structure, or land shall be used for any purpose other than the following, or any combination thereof, and such uses shall satisfy the standards set forth is this Declaration: a. General permitted industrial classifications are as follows: research and light industry industrial support, and medium and heavy industry, warehousing, and wholesal ing. b. Administrative, retail, and professional office use shall be permitted. 1.5.1 Prohibited Uses: The following uses shall not be permitted on the Leased Premises at any time: activities not allowed in City Of Corpus Christi Zoning Ordinance Classification 1 -3, junkyards; mining and quarrying; dumping, disposal, incineration, or reduction of garbage, sewage, offal, dead animals, or refuse; fat rendering, stockyards or slaughtering of animals; smelting of iron, tin, zinc, or other ores; large animal raising, sexually oriented business establishments, any establishment that derives more than fifty (50) percent of its gross receipts from the sale of alcohol, advertisement signage excluding Lessor approved tenant signage and Lessor approved Lessee marketing signage, and paid public parking facilities. 1.5? Approval of Uses: Certain industrial uses may neither be specifically prohibited nor specifically permitted. In these cases, approval in writing of the use must be obtained from the Lessor prior to approval of plans and specifications for construction of the facility. 1.5.3 Performance Standards: The Leased Premises shall not be used or occupied in any manner so as to create any dangerous, injurious, noxious, or otherwise objectionable conditions that may materially and adversely affect any other lots, including but not limited to: Hazardous activities Vibration or shock Noise Smoke, dust, odor, or other forms of air pollution lleat or glare Electronic or radio interference Illumination Liquid or solid refuse or waste Other substance, condition, or element in such amount as to affect the surrounding area or adjoining premises. 1.6 initial Deposit: $ N/A (See Section 3.2, below) 1.7 Rent and Other Charges Payable by Lessee: 1.7.1 Annual Base Rent. The annual base rent (the "Base Rent ") as outlined below shall be paid by the Lessee to Lessor in equal monthly amounts from the Commencement Date, as defined below, through the end of the Lease Term as set forth in Section 1.4 "Period AlUMW Base Rent Years 1 -10 Years 11-20 Years 21 -30 Years 31 -40 Extension Period 1 Pursuant to terms in Section 2.3 Extension Period 2 Pursuant to terms in Section 2.3 Rent is paid monthly. 1.7.2 Accrual: Due Date. The Base Rent set forth above shall be paid monthly, in advance. on the first day of each month, as provided in Section 3.1. 1.8 Riders: The following Riders are attached to and made a part of this GTCA: Exhibit A Land R Exhibit B Exhibit C Exhibit D 2 LEASE TERM Short term Supplemental Lease and Long term Supplemental Lease Plans & Specifications Memorandum of Lease 2.1 Lease of Land For Lease Term. Lessor leases the Leased Premises to Lessee and Lessee leases the Leased Premises from Lessor for the Lease Term. The Lease Term is for the period stated in Section 1.3 above and shall begin and end on the dates specified in Section 2.2, unless the beginning or end of the Lease Term is changed under any provision of this GTCA. The term "Commencement Date" shall be the date specified in Section 2.2 unless advanced or delayed under any other provision of this GTCA. 2.2 Lease Term. Any Supplemental Lease shall commence on the date specified therein (the "Commencement Date "). and shall run for the term as set forth in Section 1.3 (the "Initial Term "), subject to earlier termination or cancellation as provided herein. Any Supplemental Lease shall expire, if not cancelled or terminated earlier in accordance with its provisions. at 11:59 p.m. local time on the last day of the Lease Term, as extended (the "Expiration Date "). 2.3 Options To Extend. Lessee shall have, at its option, two (2) successive non - automatic options to extend the Lease Term, each such option being for a period of five (5) years (each such period also referred to herein as an "Extension Period "). Lessee shall notify 1_,essor of its intent to exercise the option in writing at least ninety (90) days prior to the expiration of the Initial Term or Extension Period, as the case may be. Minimum Annual Rent for each Renewal Term shall be an amount equal to the then current Market Rate, as hereinafter defined. As used herein, the term "Market Rate" shall mean and refer to the product of the Per Square Foot Market Rate (as herein defined) times (or the combined actual square tbotage of the Office Space, Maintenance Space and Plant Space). For the purposes of this calculation, the term "Per Square Foot Market Rate" will mean and refer to a per square foot rental rate determined by Landlord, based upon rental rates then being charged for premises of similar size, of a similar age, and with similar improvements in Nueces County, Texas, taking into account the then current interest rate climate for mortgage indebtedness. The Landlord will determine the Per Square Foot Market Rate and the Market Rate for each Renewal Term, and provide written notice to Tenant of its determination, within thirty (30) days following Landlord's receipt of the Tenant's notice, exercising its right to extend the Lease Term for the applicable Renewal Term (herein a "Market Rate Notice"). If the Tenant does not object to the Market Rate specified in any such Market Rate Notice. within thirty (30) days following receipt thereof, the Minimum Annual Rent for the Renewal Term shall be the Market Rate specified in the Market Rate Notice. If the 1 enant does object to the Market Rate specified in any such Market Rate Notice, within the thirty (30) day period provided, then Landlord and Tenant shall each appoint an appraiser qualified to determine Market Rate, and those two appraisers shall either agree to a joint determination of Market Rate, which shall be binding upon Landlord and Tenant, or, if they cannot agree, then they shall appoint a third appraiser, whose determination shall be binding: provided, however. Tenant may withdraw its right to renew the Lease Terrn within ten ( 10) days after the Tenant's receipt of either the joint hr determination oI Market Rae or the third appraiser's determination of Market Rate, and the Lease will then expire and terminate as of the end of the Initial Term, or then current Renewal Term as the case may he. 2.4 Holding Over. Lessee shall vacate the Leased Premises upon the expiration or earlier termination of the Supplemental Lease. Lessee shall reimburse Lessor for and indemnify Lessor against all damages which Lessor incurs from Lessee's delay in vacating the Leased Premises (excluding punitive and /or consequential damages but including all costs associated with any eviction proceedings initiated by Lessor and together with all reasonable attorney's fees incurred both at trial and upon any appeal). If Lessee does not vacate the Leased Premises upon the expiration or earlier termination of the Supplemental Lease and remains in possession thereof, either itself or through a subtenant, with the written consent of Lessor, Lessee's occupancy of the Leased Premises shall be a "month - to- month" tenancy. 3 BASE RENT 3.1 Time and Manner of Payment. Subject to the provisions of this GTCA, Lessee shall pay Lessor the Base Rent, in advance, without offset, deduction or prior demand on the first day of each month during the Lease Term. If the Commencement Date falls on other than the first day of a month, and/or if the last day of the Lease Term falls on other than the last day of a month, then Rent for the first month and /or the last month of the Lease Term shall he prorated based upon the number of days of the respective months the Lessee actually had possession of the Leased Premises. The Base Rent shall be payable at Lessor's address or at such other place as Lessor may designate in writing. 3.2 Credit Option for Payment. Notwithstanding anything to the contrary contained herein, Lessor shall apply 50% of the option money on deposit with Chicago Title Insurance Company (the "Title Company ") towards Base Rent, beginning with the first installment thereof. The parties agree and stipulate that the amount of said option money on deposit with the Title Company is , and that 50% of said amount shall be applicable to Base Rent through , 20, at which time Lessee shall begin paying Base Rent to Lessor. Lessor and Lessee shall issue joint written instructions to the Title Company authorizing the release of the option money to Lessor. 3.3 Late Payment. =\ny rental payment or other sum due under any Supplemental Lease, all of which shall be deemed "Rent" by the parties, not received within five (5) days of the due date shall bear interest until collected, at a rate equivalent to the lesser of (i) the highest rate of interest allowed by law: and (ii) twelve percent (12 %) per annum. 3.4 Sublease. Lessor acknowledges that Lessee may be subleasing all or portions of the Improvements constructed on the Leased Premises. During the Lease Term, Lessor shall not have the right to object to any sublease entered into by Lessee for the Leased Premises that is in compliance with all provisions of this GTCA, or any Supplemental Lease executed pursuant to the terms hereof. 4 OTHER CHARGES PAYABLE BY LESSEE 10 4.1 Additional Rent. All charges payable by Lessee other than Rent are called "Additional Rent." Lnless this GTCA provides otherwise, Lessee shall pay all Additional Rent then due with the nest monthly installment of Base Rent. 4.2 Property Taxes. 4.2.1 Real Property Taxes. Lessee shall pay directly to the tax collector, prior to delinquency, all Real Property Taxes on the Leased Premises (including any fees, taxes or assessments against, or as a result of, any Lessee Improvements installed on the Leased Premises by or for the benefit of Lessee) during the Lease Term which are due and payable during the Lease Term. Written evidence of the payment of Real Property Taxes and special assessments shall be furnished by the Lessee to the Lessor upon Lessee's receipt of any written request from Lessor for such written evidence of payment. If Lessee fails to pay the Real Property Taxes when due, Lessor shall have the right. but not the obligation, to pay the taxes, and 1 essee shall reimburse Lessor for the amount of such tax payment as Additional Rent. The taxes for the year in which the Commencement Date occurs shall be prorated between the parties. with the Lessee paying the Real Property Taxes attributed to the portion of the first year of the Lease Term from the Commencement Date through December 31st of said year. Taxes for the year in which the Lease ends be prorated between the Lessor and Lessee as of the ending date. 4.2.2 Definition of Real Property Tax(es). For purposes of this GTCA the term "Real Property Tax" and/or "Real Property Taxes" shall mean: (i) any fee, license fee, license tax. business license fee, commercial rental tax, levy, charge, assessment, penalty or tax imposed by any taxing authority against the Leased Premises; (ii) any tax on the I essor's right to receive, or the receipt of, rent or income from the Leased Premises or against Lessor's business of leasing the Leased Premises; (iii) any tax or charge for fire protection, streets, sidewalks, road maintenance, refuse or other services provided to the Leased Premises by any governmental agency; (iv) any tax mposed upon this transaction or based upon a re- assessment of the Leased Premises due to a change of ownership, as defined by applicable law, or other transfer of all or part of Lessor's interest in the Leased Premises; and (v) any charge or fee replacing any tax previously included within the definition of Real Property Tax. Real Property Taxes shall include all charges levied, assessed or imposed ° whether general or special. ordinary or extraordinary, unforeseen as well as foreseen. of any kind and nature, made, assessed, levied or imposed upon, or which become a lien upon, the land, the Improvements, or any part of the Leased Premise:, or upon this GTCA. and are due and payable during the Lease Term, as well as assessments for sidewalks, streets, sewers, water, or any other public improvements and any other improvements or benefits which shall, during the Lease Term. be levied, assessed or imposed, or become a lien upon the land, the improvements, or any part of the Leased Premises, or upon this GTCA, and become due and payable during the Lease Term. Real Property Taxes shall not, however. include Lessor's federal or state income, franchise, inheritance or estate taxes. 4.2.3 Personal Property Taxes. 4.2.3.1 Lessee shall pay all taxes levied or assessed against trade fixtures, furnishings, equipment or any other personal property belonging to Lessee or anyone claiming by or through Lessee. Lessee shall try to have personal property taxed separately from the Leased Premises. 4.2.3.2 if any personal property is taxed with the Leased Premises, Lessee shall pay all such taxes on or before the date when due. 4.2.4 Lessee's Right to Contest Taxes. Lessee may attempt to have the assessed valuation of the Leased Premises reduced or may initiate proceedings to contest the Real Property Taxes If required by law, Lessor shall join in the proceedings brought by Lessee. However, Lessee shall pay all costs of the proceedings, including any costs or fees incurred by Lessor. Upon the final determination of any proceeding or contest. Lessee shall immediately pay the Real Property Taxes due, together with all costs. charges, interest and penalties incidental to the proceedings. If Lessee does not pay the Real Property Taxes when due and contests such taxes, I essee shall not be in Default under this GTCA for nonpayment of such taxes if Lessee deposits funds with Lessor or opens an interest - bearing account reasonably acceptable to Lessor in the joint names of Lessor and Lessee. The amount of such deposit shall be sufficient to pay the Real Property Taxes plus a reasonable estimate of the interest, costs, charges and penalties which may accrue if Lessee's action is unsuccessful, less any applicable tax impounds previously paid by Lessee to Lessor. the deposit shall be applied to the Real Property Taxes due, as determined at such proceedings. The Real Property Taxes shall be paid under protest from such deposit if such payment under protest is necessary to prevent the Leased Premises from being sold under a "tax sale" or similar enforcement proceeding. 4.3 Utilities. Lessee shall pay, directly to the appropriate supplier, the cost of all natural gas, heat, light. power, sewer service, telephone. water, refuse disposal and other utilities and services supplied to the Leased Premises. 4.4 Insurance Policies. 4.4.1 Liability Insurance. During the Lease Term, Lessee or Lessee's sublessee shall maintain a policy of commercial general liability insurance (sometimes known as broad firm comprehensive general liability insurance) insuring Lessee against liability for bodily injury, property damage (including loss of use of property) and personal injury arising out of the operation, use or occupancy of the Leased Premises. Lessee shall name Lessor as an additional insured under such policy. The amount of such insurance shall be Two Million and no /100 Dollars (52,000.000.00) per occurrence with an aggregate limit, including through umbrella coverages, of not less than Five Million and no /100 Dollars ($5,000,000.00). The 12 liability insurance obtained by Lessee under this Section 4.4.1 shall be primary and non - contributing. fhe amount and coverage of such insurance shall not limit Lessee's liability nor relieve Lessee of any other obligation under this GTCA. Lessor may also obtain comprehensive public liability insurance in an amount and with coverage determined by Lessor insuring Lessor against liability arising out of ownership, operation. use or occupancy of the Leased Premises. The policy obtained by Lessor shall not be contributory and shall not provide primary insurance. Contractors shall provide commercial automobile liability coverage of $1.000,000 combination single limit. 4.4.2 Property Insurance. During the Lease Term, Lessee shall maintain policies of insurance covering loss of or damage to the Improvements on the Leased Premises in the full amount of its replacement value. Such policy shall provide protection against all perils included within the classification of fire, extended coverage, vandalism, malicious mischief, special extended perils to include wind, hurricane and hail (all risk), sprinkler leakage and any other perils which Lessee deems reasonably necessary. Lessee shall not do anything nor permit anything to be done which invalidates any such insurance policies. Lessor shall be shown as an additional insured party under said policies. 4.4.3 Workers' Compensation Insurance. If applicable, the Lessee shall carry workers' compensation insurance required to be carried by Lessee by Texas law in amounts not less than the amount required by law. The Lessee shall require all contractors and sublessees that Lessee contracts with in connection with the Improvements on Leased Premises to promise to carry workers' compensation insurance in amounts not less than the amount required by law covering all persons employed by the contractor or sublessee, as the case may be, in connection with the Improvements on the Leased Premises and with respect to whom death, bodily injury, or sickness insurance claims could be asserted against the Lessor or Lessee. 4.4.4 Builders' Risk Insurance. During the course of any alteration, construction, or reconstruction, the Lessee shall provide or cause to be provided all risk builders' risk insurance for the amount of construction. 4.4.5 Payment of Premiums. Lessee shall pay all premiums for the insurance policies described in Sections 4.4 no later than the due date. Lessee shall deliver to Lessor a copy of any policy of insurance which Lessee is required to maintain under this Section. As an alternative to providing a policy of insurance, Lessee shall have the right to provide Lessor evidence of insurance (Accord Form 27), executed by an authorized officer of the insurance company, showing that the insurance which Lessee is required to maintain under this Section is in full force and effect and containing such other information which Lessor reasonably requires. 4.4.6 General Insurance Provisions. 4.4.6.1 If Lessee fails to deliver any policy, evidence of insurance or renewal to Lessor required under this GTCA within ten (10) 13 business days of written notice from the Lessor, or if any such policy is canceled or modified during the Lease Term without Lessor's consent, then Lessee will be in default under this GTCA and any Supplemental Leases executed pursuant to the terms hereof. 4.4.6.2 Lessee shall maintain all insurance required under this GTCA with companies holding a "General Policy Rating" of B +, VIII or better, as set forth in the most current issue of "Best Key Rating Guide ". Lessor and Lessee acknowledge the insurance markets are rapidly changing and that insurance in the form and amounts described in this Section 4.4 may not be available in the future. If at any time during the Lease Term, Lessee is unable to maintain the insurance required under the Lease, or the cost of such coverage becomes prohibitive, Lessee shall nevertheless maintain insurance coverage which is customary and commercially reasonable in the insurance industry for Lessee's type of business in the greater metropolitan area in and around Corpus Christi, Texas, as that coverage may change from time to time. In such a case, Lessee shall obtain any such additional property or liability insurance as Lessee, Lessor and any Lender (as defined in Section 11, below) mutually deem to be reasonably necessary to protect Lessor's and Lessee's interest under this GTCA. Lessee and Lessor understand and agree that the minimum limits of the insurance herein required may become inadequate, and Lessee agrees that it shall increase such minimum limits upon receipt of notice in writing from Lessor. 4.4.6.3 Lessee shall waive any and all rights of recovery against the Lessor, 01 against the officers, employees, agents or representatives of the other, for loss of or damage to its property or the property of others under its control. if such loss or damage is covered by any insurance policy- in force (whether or not described in this GTCA) at the time of such loss or damage. 4.5 Cost of Loans to be Paid by Lessee. The Lessee affirms that it shall bear all of the costs and expenses charged by any lender in connection with any debt on the Lessee's Leasehold Estate (as defined in Section 1 1.1 below) for the Leased Premises. 4.6 Direct Payment by Lessor. If any Additional Rent must be paid directly by Lessor and the payee refuses to accept payment from the Lessee, then: (a) Lessor appoints Lessee as Lessor's attorney -in -fact for making such payment; and (b) if the payee nevertheless refuses to accept payment from Lessee, then Lessee shall notify Lessor of such fact and shall pay such amount to Lessor in a timely manner accompanied by reasonable instructions on the further remittance of such payment. Lessor shall with reasonable promptness comply with Lessee's reasonable instructions. Lessor shall indemnify and hold harmless Lessee against Lessor's failure to timely remit such payment. 14 4.7 Absolutely-Net Lease. It is understood and agreed between the Lessor and Lessee that this is an "absolutely -net Lease ". It is intended that the Rent provided for in this GTCA shall be an absolutely net return to Lessor throughout the Term, free of any Property expense. charge. or other deduction whatsoever, including all claims, demands, or setoffs of any nature whatsoever except as expressly stated herein to be the Lessor's obligation. Lessee shall also pay without notice, except as may be provided in this GTCA, and without abatement, deduction. or setofff, as additional rent, all sums, impositions, costs, and other payments arising out of its occupancy and use of the Leased Premises except those with which Lessor in any of the provisions of this GTCA expressly assumes or agrees to pay, and in the event of any nonpayment, Lessor shall have (in additional to all other rights and remedies) all the rights and remedies provided for in this GTCA or by law in the case of nonpayment of the Rent. Lessee's payment obligations include but are not limited to any and all utility and other services needed by Lessee with respect to the operation of its business on the Leased Premises. Except as otherwise specifically provided in this GTCA, no abatement, refund, diminution, E)r reduction of Rent or other compensation shall be claimed by Lessee on account of work on the Improvements, by virtue or because of legal requirements, or the occurrence of any matters referred to in Section 8 (condemnation) of this GTCA, or for any other reason, cause, or occurrence. 5 USE OF PROPERTY 5.1 Use of Property At Lessee's sole cost and expense and at Lessee's sole discretion, Lessee shall have the right, subject to limitations in Section 5.2, to construct Improvements on the Leased Premises, In that connection, Lessee may finance the construction of Improvements and/or its Leasehold Estate (as defined in Section 11.1 below) with any Lender, subject to the restrictions set forth herein. Lessee shall have the right to not only construct any and all Improvements on the Leased Premises deemed necessary by the Lessee, but to develop and use the Leased Premises in any lawful manner which is in accordance with Section 1.5. pon and after construction of any building or structure on the Leased Premises, Lessee shall maintain same in a reasonable condition and state of repair (subject to the limitations on the Lessee's maintenance obligations set forth in Section 6.3, below); and Lessee shall provide Lessor v ith a set of the mylar plans (as- builts) and /or specifications, if any, for the work for Lessor' . information and for retention in Lessor's files. Lessee reserves the right to change the Improvements it expects to construct depending on economic circumstances, zoning and other issues as approved by Director. Lessee shall have the right to lease the I eased Premises to third -party subtenants and accept rental payments from such subtenants without the Lessor's consent. Lessee shall have the further right to manage the Leased Premises and take whatever action, in Lessee's judgment, it deems necessary and appropriate so long as such action is consistent with the other terms and provisions of this GTCA. Lessee shall he deemed the owner of all Improvements that it constructs for the duration of the term of this GTCA. Except as provided elsewhere in this GTCA, Lessor and Lessee acknowledge that it is the intention of the parties that, to the extent Lessee performs all of its obligations under this GTCA, Lessor relinquishes any and all rights to share in the income of the Leased Premises. on account of its interest in the Leased Premises, its interest under this GTCA or otherwise i .nndlOppo:. lux 15 5.2 Manner of Use. Lessee shall not cause or permit the Leased Premises to be used in any way which constitutes a violation of any law, ordinance, or governmental regulation or order. or which constitutes a nuisance or waste or is in violation of Section 1.5 of this <iTCA. From time to time, Lessor shall provide Lessee with copies of all regulations and requirements pertaining to the development of the Leased Premises as property of a municipal airport promptly following request of Lessee. Lessee shall obtain and pay for all permits, including a Certificate of Occupancy (to the extent applicable), required for Lessee's occupancy of the Improvements and shall promptly take all actions necessary to comply with all applicable statutes, ordinances, rules, regulations, orders and requirements regulating the use by Lessee of the Leased Premises or cause any sublessee occupying any portion of the Improvements to take such actions. 5.3 Exclusive Control. Lessee shall have exclusive control, possession, occupancy, use, and management of the Leased Premises. Lessee shall have the exclusive right to install signage on or at the Leased Premises, or to transfer the right to install such signage during the Lease Term to one or more third parties, which is in compliance with all laws and meet the standards for signage established by the Aviation Director. Lessee may enter into, terminate, modify, amend, or waive any existing or future contracts relating to management or operation of the Leased Premises and provision of services to the Leased Premises. Any such contracts shall automatically expire on the Expiration Date. 5.4 Hazardous Materials. Lessee shall not violate any law or regulation of any federal, state or local governmental authority having jurisdiction over Hazardous Material. As used in this GTCA, the term '`Hazardous Material" means any flammable items, explosives, radioactive materials. hazardous or toxic substances. material or waste or related materials, including any substances defined as or included in the definition of "hazardous substances ", "hazardous wastes ". '`hazardous materials" or "toxic substances" now or subsequently regulated under any applicable federal, state or local laws or regulations, including without limitation petroleum -based products, paints, solvents, lead, cyanide, DDT, printing inks, acids, pesticides. ammonia compounds and other chemical products, asbestos, PCBs and similar compounds, and including any different products and materials which are subsequently found to have adverse effects on the environment or the health and safety of persons. Lessee shall have the duty and obligation to cure any environmental contamination of the Leased Premises caused by the Lessee or cause any sublessee to cure any such contamination caused by said sublessee during the term of this GTCA, and Lessee agrees to indemnify and hold harmless Lessor from and against all claims and damages of whatsoever nature, asserted against the Lessor or the Leased Premises as a result of the 1 essee's or any Sublessee's use and occupancy of the Leased Premises, including but not limited to all clean -up and remediation costs, claims of personal injury or property damage, _and court costs and reasonable attorneys' fees incurred in any mediation, arbitration trial or appellate proceeding pertaining thereto. Lessee shall have no obligation to remediate any preexisting Hazardous Substances on the Leased Premises and the Lessor agrees to indemnify and hold harmless the Lessee from the same. Lessee shall not be allowed to construct an underground storage tank on any of the leased premises. Had Ow., Agrek,,+ Ih C f Lessee determines that a threat to the environment, as a result of Lessee's operations. including but not limited to a release, discharge, spill, or deposit of a hazardous substance has occurred or is occurring which affects or threatens to affect the Airport, or persons, structures, equipment, or other property thereon, Lessee must immediately verbally notify (1) the Director, (2) the Airport Public Safety Office, and (3) all emergency response centers and environmental or regulatory agencies, as required by law or regulation. Lessee must provide Director with written confirmation of the verbal report within 72 hours. Lessee agrees to cooperate fully with the Airport in promptly responding to, reporting, and remedying. as a � °esult of Lessee's operations, any such threat to the environment, including 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. 5.5 Quiet Possession. If Lessee pays the Base Rent and Additional Rent (collectively referred to herein as the "Rent ") and complies with all other terms of this GTCA, Lessee or its subtenant(s) mad occupy and enjoy the Leased Premises for the full Lease Term without molestation or disturbance by or from Lessor or anyone claiming by or through Lessor or having title to the Leased Premises paramount to Lessor, and free of any encumbrance created or suffered by the Lessor. 5.6 Lessor's Encumbrances. Lessor shall not cause any lien or encumbrance, including without limitation, trust deeds. mortgages, security agreements, pledges or hypothecations on Lessor's ownership interest. to burden the Leased Premises without the prior written consent of Lessee, which consent may be given or withheld at the sole and arbitrary discretion of the Lessee. This provision shall not preclude the Lessor from pledging, hypothecating, or otherwise encumbering its interest as Lessor under the terms of this (iTC A, provided that in so doing, the Lessor will deliver to Lessee (and any Lender) an agreement recognizing the rights of the Lessee (and any Lender) in, to and under this (iTCA. 5.7 Applications and Filings. Upon Lessee's request, Lessor shall promptly join in and execute any Application or Filing (as defined below) as Lessee may from time to time request, provided that: (a) such Application or Filing is in customary form; and (b) no uncured Default (as defined below) exists beyond any notice or grace period. For purposes of this Section 5.7 of the Lease, the term "Application or Filings" shall mean and refer to any instrument, document, agreement, certificate. or filing (or amendment of any of the toregoing): (a) necessary or appropriate for any construction work this GTCA allows, including any application for any utility service or hookup, easement, covenant, condition, restriction, subdivision plat. or such other instruments as Lessee may from time to time request in connection with such construction work; (b) to enable Lessee to obtain any abatement. deferral or other benefit that may otherwise be reasonably available for the payment of real estate taxes; (c) to allow Lessee to change the use or zoning of the Leased Premises. provided such change in use or zoning shall be subject to Lessor's consent, which shall not be unreasonably withheld; (d) to enable Lessee from time to time to seek any approval or to use and operate the Leased Premises in accordance with this GTCA; (e) otherwise reasonably necessary and appropriate to permit Lessee to realize the benefits of the Leased Premises under this GTCA; or (f) that this GTCA otherwise requires Lessor to sign for Lessee. 6 CONDITION OF PROPERTY; MAINTENANCE, REPAIRS AND ALTERATIONS 6.1 Existing Conditions. Lessee accepts the Leased Premises in its condition as of the execution of the Lease. subject to all recorded matters, laws, ordinances, and governmental regulations and orders, and the terms of the Option Agreement between Lessor and Lessee (the "Option "). Except as provided in this GTCA and the Option (which representations are incorporated by reference). Lessee acknowledges that neither Lessor nor any agent of Lessor has made any representation as to the condition of the Leased Premises or the suitability of the Leased Premises for Lessee's intended use. 6.2 Exemption of Lessor from Liability. Lessor shall not be liable for any damage or injury to the person, business (or any loss of income therefrom), goods, wares, merchandise or other property of Lessee, Lessee's employees, invitees, customers or any other person in or about the Leased Premises. whether such damage or injury is caused by or results from: (a) tire, steam, electricity, water, gas or rain; (b) the breakage, leakage, obstruction or other defects of pipes. sprinklers, wires, appliances, Improvements or any other cause; or (c) conditions arising in or about the Leased Premises, or from other sources or places. Lessor shall not he liable for any such damage or injury even though the cause of or the means of repairing such damage or injury are not accessible to Lessee. The provisions of this Section shall not, however, exempt Lessor and /or Lessor's agents or employees from liability for Lessor's negligence or misconduct. 6.3 Lessee's Obligations. 6.3.1 Except as provided in Section 7 (Damage or Destruction) and Section 8 (Condemnation). Lessee shall keep all portions of the Leased Premises (including structural, nonstructural. interior, exterior. and landscaped areas, portions, systems and equipment) in good order, condition and repair (including interior repainting and refinishing, as needed) as suited to its use, excluding ordinary wear, tear, casualty condemnation. depreciation and physical, technological and /or economic obsolescence. Lessee's obligations shall extend to both structural and non- structural items, and to all maintenance, repair and replacement work, including but not limited to unforeseen and extraordinary items (subject to the limitations set forth above). 6.3.2 Lessee shall. at its own cost and expense, promptly observe and keep all laws, rules. orders, ordinances and regulations of the federal, state and city governments and any and all of their departments and bureaus and those of any other competent authority applicable to the Leased Premises, (the "Legal Requirements ") whether or not such Legal Requirements affect the interior or exterior of the Improvements, necessitate structural changes or improvements, or interfere with the use and enjoyment of the Leased Premises. and whether or not compliance with the Legal Requirements is required by reason of any condition, event, or circumstance existing before or after the Lease Term commences; and shall promptly comply Option ■ n.,, -_ u,. 18 with all laws. rules, orders, regulations and requirements of the issuer(s) of the insurance policy(ies) contemplated in Section 4.4.2, above, and will use no part of Leased Premises for any unlawful purposes. If; however, the Lessee in good faith, shall desire to contest any laws, rules, orders, ordinances or regulations of the federal. state. city or other competent authority requiring repairs, alterations or changes in the Leased Premises or in any building at any time situated thereon, Lessor may contest same, and it shall not be required to make such repairs, alterations, or changes so long as it shall, in good faith, at its own expense, contest the same or the validity thereof by appropriate proceedings, and any such delay of the Lessee in complying with any such laws, rules, orders, ordinances and regulations until tinal determination of such disputed matter shall not be deemed a default m the conditions of this GTCA; Lessor will not unreasonably withhold, condition or delay its consent to execute such instruments, and give Lessee such assistance in connection with such contest as shall be necessary, reasonable and proper pit no cost or expense to Lessor; however, Lessee's time to comply hereunder shall not be so extended if Lessor shall be threatened with fine or imprisonment. Lessee shall hold Lessor harmless of all costs, expenses, liabilities, losses. damages, fines, penalties. claims and demands, including reasonable counsel fees, that may in any manner arise out of or be imposed because of the failure of the Lessee to comply with any law, rule, order, ordinance or regulation as aforesaid. Nothing contained in this Section or elsewhere in this GTCA will be deemed or construed as requiring the Lessee or any sublessee, under any circumstance. to open or continuously operate within the Improvements or otherwise on the (,eased Premises at any particular time or date or for any particular period during the Lease Term, and to the extent that the Improvements are not occupied at any particular time during the Lease Term, then the legal requirements applicable to the Improvements will be those legal requirements that are applicable in circumstances where such premises are not occupied; however, but upon any occupancy of the Improvements. either initially or after any period of vacancy, the legal requirements applicable to an occupied facility will be applicable to the Lessee's obligations hereunder 6.3.3 Lessee shall fulfill all of Lessee's obligations under this Section 6 at Lessee's sole expense If Lessee fails to maintain, repair or replace any element of the Leased Premises to the condition required hereunder within sixty (60) days of written notice from Lessor, Lessee shall be deemed to be in Default of its obligations under this Section 6.3. 6.3.4 Except for the negligence or willful misconduct of Lessor, Lessee shall indemnify, defend and hold Lessor harmless from and against any and all liability, claim, loss, cost, expense, damage (including reasonable attorneys' fees and consultants fees), lien, judgment or penalty arising in any manner whatsoever out of, involving, or in connection with, the use and/or occupancy of the Leased Premises by Lessee and/or its subtenants or any one else claiming by or through Lessee. 6.4 Improvements . 19 6.4.1 All plans and specifications for Lessee's Improvements, including all renovations, remodeling, refurbishing, signage, and construction upon the Leased Premises, must meet all City fire, building and other applicable city, state and federal regulations and code requirements. including obtaining required building permits. Lessee, at its expense. shall obtain all licenses and permits required prior to all renovations, remodeling, refurbishing, or construction on the Leased Premises. The costs of developing all plans and specifications as provided herein and the construction of improvements and facilities upon the Leased Premises must be paid solely by Lessee. without any cost or expense to Lessor whatsoever. The plans and specifications, including the architectural design, color, building material, signage, and landscaping of Lessee's improvements must be approved by the Aviation Director, which approval will not be unreasonably withheld. No substantial changes or alterations must be made to said plans or specifications after initial approval by Aviation Director without further written approval by Aviation Director. which appro‘ al will not be unreasonably withheld. pon final completion and acceptance of the Improvements by Lessee, Lessee must provide two sets of Mylar "as- built" plans and one electronic copy of the record documents to Aviation Director, who will keep one set of plans on file at the Airport and provide the other set to the City Secretary for incorporation into this GTCA as Exhibit C. Exhibit C becomes effective upon filing with the City Secretary and subsequent attachment to this GTCA. Lessee must keep said documents current. by providing two sets of Mylar "as- built" plans and one electronic copy of all record documents showing any alteration in excess of 52.5,000 to the L. eased Premises during the term of the Lease to Aviation Director, to be attached to this GTCA in the same manner as provided for the original plans and specifications. During the construction of Improvements, Aviation Director may, after providing reasonable notice to Lessee, enter upon the Leased Premises during City's normal business hours and make inspections as may be necessary to ensure that the construction of Improvements is performed in accordance with the requirements of this (GT('A. Initial Improvements for construction must begin within one (1) year of the execution of this GTCA and be completed with two (2) years from the execution of this GTCA. During this GTCA, Lessee shall (subject to the other terms and conditions of this GTCA) have the continuing right to remodel, renovate and refurbish the Leased Premises, or any part thereof, and to build and construct new additions and improvements thereon and thereto, provided; however, that Lessee has obtained the prior consent of the Federal Aviation Administration and the written consent of Aviation Director, whose consent to the modifications will not be unreasonably withheld. All alterations, additions, and Improvements to the Leased Premises �r� shall be done in a good and workmanlike manner, in conformity with all applicable laws and regulations_ Lessee and assignees and sub lessees, must include in all construction contracts entered into, a provision requiring the contractor, or, in the alternative, Lessee, to indemnify, hold harmless, defend and insure the Lessor, including its officers, agents, and employees, against the risk of legal liability 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 Lessor, its officers, agents, or employees. Lessee must furnish, or require the contractor to furnish. insurance. as required in Section 4 herein. Lessee =nust include in a construction contract, or subcontract, all provisions required by the Director relating to the operations of the contractor on the Airport; such provisions, must include a Payment and Performance Bond for any work in excess of $25,000 to he performed by Lessee or the contractor. 6.4.2 Lessee shall pay when due all claims for labor and material furnished on or about the Leased Premises or in connection with the Improvements. 6.4.3 Lessee shall have no power to do any act or to make any contract that may create or be the foundation for any lien, mortgage, or other encumbrance on the reversion or other estate of Lessor or that would be prior to any interest of Lessor in the Leased Premise:, except that Lessee (or a Sublessee) shall have the right, in the ordinary course of business, to finance purchases of FF &E (as defined in Section 13.17) by providing a first lien on such items, so long as any FF &E so liened can be safely removed as provided in Section 13.17. Lessee shall not suffer or permit any liens to attach to the interest of Lessee in all or any part of the Leased Premises by reason ofany work, labor, services. or materials done for, or supplied to, or claimed to have been done for or supplied to Lessee or anyone occupying or holding an interest in all or any part of the Improvements on the Leased Premises through or under Lessee. If any mechanic's, construction or other liens or orders for the payment of money shall be filed against the Leased Premises or any improvements thereon by reason of, or arising out of any labor or material furnished to, or for the Lessee at the Leased Premises or for or by reason of any change, alteration or addition by Lessee, or the cost or expense thereof, or any contract relating thereto, or against the Lessor as leased fee owner thereof by reason of Lessee's work or contract relating thereto, then within sixty (60) days, the Lessee shall cause the same to he canceled and discharged of record, by bond or otherwise, at the election and expense of the Lessee, and shall also defend on behalf of Lessor, at Lessee's sole cost and expense, any action, suit or proceeding which may be brought thereon or for the enforcement of such lien, liens or orders, and the Lessee will pay any damages and discharge any judgment entered therein and hold the Lessor harmless from any loss, claim or damage resulting therefrom, including reasonable attorney s fees. Nothing in this GTCA shall be deemed to be, or be construed in any way as constituting, the consent or request of Lessor, express or implied, by inference or otherwise, to any person, firm, or entity for the performance of any labor or the furnishing of any materials for any construction, rebuilding, alteration, or repair of or to the Leased Premises or to the Improvements, or as giving Lessee any right, power, or authority to contract for or permit the rendering of any services or the furnishing of any materials that might in any way give rise to the right to file any lien against Lessor's interest in the Leased Premises or against Lessor's interest, if any. in the Improvements. Lessee is not intended to be an agent of Lessor for the construction of Improvements on the Leased Premises. Lessor shall have the right to post and keep posted at all reasonable times on the Leased Premises and on the Improvements any notices that Lessor may reasonably wish to post for the protection of Lessor and of the Leased Premises and of the Improvements from any such lien The foregoing shall not be construed to diminish or vitiate any rights of Lessee in this GTCA to construct. alter, or add to the Improvements. 7 DAMAGE OR DESTRUCTION 7.1 Casualty. If Lessee becomes aware of any damage or destruction to all or any material portion of the Improvements, whether ordinary or extraordinary, foreseen or unforeseen, affecting any or all Improvements and/or the Leased Premises (each, a "Casualty "), Lessee shall immediately notify Lessor of such fact. 7.2 Effect of Casualty. If any Casualty occurs (i) no Rent shall abate, (ii) this GTCA shall not terminate or be impaired, and (iii) Lessee shall, to the extent that insurance proceeds payable on account of the Casualty are made available to Lessee by the Lender (as defined in Section 11) rebuild and; or restore that portion of the Improvements damaged by such Casualty 7.3 Adjustment of Claims; Use of Property Insurance Proceeds. Lessee shall be solely responsible for adjusting any insurance claim(s) pertaining to any Casualty, subject to the rights of any Lender. Subject to the terms of any Lender's loan documents, if the Lender makes the insurance proceeds (that are payable as a result of a Casualty) available to Lessee, such insurance proceeds shall be disbursed directly to a depository acceptable to Lender to be disbursed in accordance with Lender's loan documents for the safeguarding, clearing, repair. restoration, alteration, replacement, rebuilding and reconstruction of the portion of the Improvements damaged by such Casualty, to rebuild, repair and /or restore the affected Improvements to a condition that complies with applicable laws and is otherwise consistent with the Lessee's permitted use of the Leased Premises. 7.4 Waiver. Lessee waives the protection of any statute, code or judicial decision which grants a Lessee the right to terminate a lease in the event of the substantial or total destruction of the Leased Premises. Lessee agrees that the provisions of this Section 7 shall govern the rights and obligations of Lessor and Lessee in the event of any such Casualty. 8 CONDEMNATION. If a portion of the Leased Premises is taken under the power of eminent domain or sold under the threat of that power (all of which are called "Condemnation "), the Condemnation award shall be distributed in the following order of priority: 8.1 First, to Lessor. in amount to he calculated to reflect its reversionary interest in the Leased Premises so taken; 8.2 Second, to Lessee or its assigns, in an amount equal to the balance of the Condemnation award. 8.3 If the Leased Premises is partially or totally unusable as a result of such condemnation, as reasonably determined by the Lessee. Lessee shall have the right and option of terminating this GTCA on the date that the condemning authority has acquired title or taken possession of any portion of the Leased Premises that is subject to the Condemnation and thereafter neither party shall have any further rights, duties or obligations under the Lease. If the Lessee does not exercise any such right and option, Rent shall abate from the date that the condemning authority has acquired title or taken possession of any portion of the Leased Premises in proportion to the value of the Leased Premises so taken, giving due regard to the impact of that taking on the use and usefulness of the Leased Premises to accommodate the Improvements and use thereof. 9 ASSIGNMENT AND SUBLETTING 9.1 Lessor's Consent Not Required for Sublease. Lessor acknowledges that Lessee does not intend to occupy the Leased Premises and the Leased Premises will be subleased to one or more subtenants. Notwithstanding anything to the contrary in this GTCA, Lessee shall have the right, without the prior consent of Lessor, to sublease the Leased Premises under the terms and conditions of a sublease, negotiated and entered into solely by Lessee and its subtenant. As such. Lessee may sublease the Leased Premises without Lessor's prior consent. 9.2 Assignment. This GTCA may be assigned to Lessee's principal, affiliates, or subsidiaries of its principals without the written consent of Lessor. For all other assignments, the written consent of the Lessor must be obtained, but Lessor's consent thereto shall not be unreasonably withheld. Upon approval of the assignment by the Lessor, together with a copy of the document effectuating such assignment, the Lessee shall be released from all terms, conditions and obligations under the Lease. 10 DEFAULTS; REMEDIES 10.1 Defaults. Lessee shall he in material default (herein referred to as a "Default ") under this GTCA: 10.1.1 If the Lessee shall default in the payment of Base Rent for a period of ten (10) days following receipt of written notice from Lessor of any delinquency or failure to pay such Base Rent; 10.1.2 If the Lessee shall default in the payment of any Additional Rent for a period of thirty (30) days following receipt of written notice from Lessor of any delinquency or failure to pay such Additional Rent; 10.1.3 Except as otherwise herein provided, in the event that Lessee shall default or fail in the performance of a covenant or agreement to be performed by it under this GTCA, and such default shall not have been cured for a period of thirty (30) days after receipt by Lessee of written notice of such default or failure in performance; provided, however, if such default or failure cannot, with due diligence, be cured within thirty (30) days after receipt by Lessee of any such written notice, and Lessee shall not have commenced the remedying thereof within such period or shall not be proceeding with due diligence to remedy such default or failure (it being intended in connection with any such default or failure that is not susceptible of being cured by Lessee with due diligence within any such thirty (30) day period, that the time within which to remedy that default or failure shall be extended for such period as may be necessary to complete same with due diligence), or 10.1.4 If the Lessee shall make an assignment for the benefit of creditors or file a voluntary petition in bankruptcy or be adjudicated a bankrupt or insolvent by any court, or file a petition for reorganization or an arrangement under the Federal Bankruptcy Code or any state insolvency act, or a receiver or trustee for its propertti shall be appointed in any proceeding other than a bankruptcy proceeding, and such appointment shall not be vacated within ninety (90) days after it has been made. 10.2 Lessor's Remedies. Upon the occurrence of an event of Default, and in all events subject to the provisions of Section 11, below, Lessor may exercise any one or more of the remedies set forth in this section or any other remedy available under applicable law or contained in this GTCA. In addition to all other rights and remedies provided for under this GTCA. at law or in equity, after service of written notice informing Lessee of termination of this GTCA. at the end of the tenth day, following the date of that notice, it shall he lawful for the Lessor to terminate this GTCA and to enter into Leased Premises or any part hereof. and expel the Lessee or any person or persons occupying Leased Premises, and so to repossess and enjoy the Leased Premises, provided, however, that if any voluntary or involuntary proceeding for a reorganization or an arrangement is instituted, and no application is made in any such proceeding and no relief is requested therein by the 1 essee to reject this GTCA, or to reform or recast the same or for any change, modification or alteration of any of the terms, covenants and conditions of this GTCA or to relieve the Lessee from the punctual payment of the Rent or other charges required to be paid by Lessee under this GTCA, and if all Rent and other charges due form Lessee under this GTCA are paid within the time period(s) hereinbefore provided, and all of the terms, covenants and conditions of this GTCA required to be performed by Lessee are promptly performed and complied with within the time period(s) hereinbefore provided, then this GTCA shall not be so terminated, but shall continue in full force and effect, provided however, nothing herein contained shall modify the rights of the Lessor or the obligations of the Lessee w ith respect to this GTCA under the Federal Bankruptcy Code in the event of the filing of a petition thereunder by the Lessee. Lessor or Lessor's agents and employees may immediately or at any time thereafter reenter the Leased Premises either by summary eviction proceedings or by any suitable action or proceeding at law, or by force or otherwise. without being liable to indictment, prosecution, or damages. and may repossess the same, and may remove any person from the Leased Premises, to the end that Lessor may have, hold, and enjoy the Leased Premises. Lessor may relet the whole or any part of the Leased Premises from time to time, either in the name of Lessor or otherwise, to such tenants, for such terms ending before, on, or after the expiration date of the Lease Term, at such rentals and on such other conditions ( including concessions and free rent) as Lessor may determine to be appropriate. To the extent allowed under applicable law, Lessor shall have no obligation to relet all or any part of the Leased Premises and shall not he liable for refusal to relet the Leased Premises, or, in the event of such reletting. for refusal or failure to collect any rent due on such reletting. Any such reletting will operate to relieve Lessee of and from any further liability under this GTCA. If the Lessor does not terminate this GTCA or otherwise terminate Lessee's rights of possession to the Leased Premises, Lessor has the right to recover its damages, including without limitation all lost rentals, all legal expenses including reasonable attorney's fees, all costs incurred by Lessor in restoring the Leased Premises or otherwise preparing the Leased Premises for reletting, and all costs incurred by Lessor in reletting the Leased Premises and interest thereon at the rate set forth above for past due Rent under this GTCA. No failure by Lessor to insist on the strict performance of any agreement, term, covenant, or condition of this GTCA or to exercise any right or remedy consequent upon a breach, and no acceptance of full or partial Rent during the continuance of any such breach, constitutes a waiver of any such breach or of such agreement, term, covenant, or condition. No agreement. term, covenant. or condition to be performed or complied with by Lessee, and no breach by Lessee shall be waived, altered, or modified except by a written instrument executed by Lessor. No waiver of any breach shall affect or alter this GTCA, hut each and every agreement. term, covenant, and condition of this GTCA shall continue in full force and effect with respect to any other then - existing or subsequent breach. Each right and remedy provided for in this GTCA shall be cumulative and shall be in addition to every other right or remedy provided for in this GTCA or now or hereafter existing at law or in equity or by statute or otherwise, and the exercise or beginning of the exercise by Lessor or Lessee of any one or more of the rights or remedies provided for in this GTCA or now or hereafter existing at law or in equity or by statute or otherwise shall not preclude the simultaneous or later exercise by the party in question of any or all other rights or remedies provided for in this GTCA or now or hereafter existing at law or in equity or by statute or otherwise. Should the Lease Term at any time be terminated under the terms and conditions hereof, or in any other way, the Lessee hereby covenants and agrees to surrender and deliver the Leased Premises peaceably to the Lessor immediately upon the termination of said term together with all the improvements described in this GTCA in good condition with normal wear and tear accepted. Furniture, fixtures, and equipment may be removed by Lessee or any subtenant at or before this GTCA terminates, provided, however, that the removal will not injure the Improvements or necessitate repairs to the same, or if such repairs are required. those repairs will be made promptly following any such removal. Lessee shall pay or cause to be paid to Lessor the cost of repairing any damage arising from such removal and restoration of the Improvements to their condition before such removal. Any personal property of Lessee or any subtenant that shall remain on the Leased Premises for a period of more than thirty (30) days after the termination of this GTCA and the removal of Lessee or such subtenant from the Leased Premises may, at the option of Lessor, be deemed to have been abandoned by Lessee or such subtenant and may either be retained by I essor as it's property or be disposed of, without accountability, in such manner as Lessor may see tit, or f Lessor gives written notice to Lessee to such effect, such property, shall be removed by Lessee at Lessee's sole cost and expense. 10.3 Limitation on Lessor's Remedies. Notwithstanding anything to the contrary in this GTCA, Lessor shall not exercise any remedy that would dispossess any subtenant of the Leased Premises or Lessee without the prior written consent of the Lessee unless in the event of Lessee Default. Lessor shall pursue all remedies available to Lessor prior to termination of this GTCA. Subject to the terms of this Section 10.3, Lessor shall be entitled to enforce all of Lessor's rights and remedies under this GTCA, at law or in equity, including the right to recover the Rent as it becomes due. Notwithstanding the foregoing, Lessor shall not unreasonably withhold consent to execute any reasonable non - disturbance agreement requested by any subtenant of the Leased Premises to ensure that subtenant's interest in the Leased Premises shall not be disturbed by the Lessor in the event of Lessee Default. ■m,cuogi,. 10.4 Lessor's Default. Notwithstanding anything to the contrary contained in this GTCA, in the event of preach or default of this GTCA by Lessor, Lessee shall have all rights available to it hereunder or at law or in equity. Lessee's right to seek any remedy for Lessor's default shall not he deemed waived by the failure to exercise said right nor shall any such failure estop Lessee from afterward asserting said right to seek any remedy as provided herein or as provided by law. The remedies of Lessee shall be cumulative, and include any and all remedies as provided by law or in equity, and no one of them shall be construed as exclusive of anv other or of any remedy provided by law. Any prior waiver of any of Lessee's rights under the Lease shall not constitute a waiver of Lessee's rights to damages in event of subsequent default or breach of Lessor. In the event a court of competent jurisdiction finds that the Lessor has breached the terms and conditions of this GTCA, in addition to any civil remedies. the Lessee shall be entitled to its reasonable attorneys' fees associated with such suit andlor claim. 11. PROTECTION OF LENDERS 11.1 Definition. As used in this GTCA "Lender" shall collectively mean, each and every lender which (a) takes a security interest in, or otherwise encumbers, the Lessee's leasehold interest in the Leased Premises (the "Leasehold Estate "), which security interest is evidenced by a deed of trust, or mortgage, or other security instrument (herein referred to, collectively. as the "Leasehold Security Instrument ") as recorded in the office of the County Recorder of Nueces County, in the State of Texas, and (b) has notified Lessor of such recorded Leasehold Security Instrument. Every Lender shall have the following rights in addition to all other rights and remedies conferred upon the Lender in law or in equity 11.2 General. Lender shall have the right: (a) to do any act or thing required of Lessee hereunder and all such acts or things done and performed shall be as effective to prevent a forfeiture of Lessee's rights hereunder, as if done by the Lessee; and (b) to exercise its remedies pursuant to its Leasehold Security Instrument; and, to transfer, convey, and assign Lessee's Leasehold Estate created hereby to any purchaser at any foreclosure sale, trustee's sale, or other sale held pursuant to such Leasehold Security Instrument, and to acquire and succeed to the interest of Lessee hereunder by virtue of any such sale, without the consent of Lessor. In furtherance of the foregoing, if Lender is the successful bidder at such sale held pursuant to any such Leasehold Security Instrument (or a senior security instrument) then Lender shall he entitled to further assign or transfer this GTCA or sublet the Leased Premises in the same manner as provided under Section 9, above, without the prior written consent of Lessor: and (c) to accept an assignment in lieu of foreclosure under the Leasehold Security Instrument, without the consent of Lessor or otherwise acquire the Lessee's Leasehold Estate, by assignment or conveyance in lieu of any such foreclosure proceedings. in which case the Lender's rights and interest under its Leasehold Security Instrument shall not merge into the Leasehold Estate but shall remain separate and distinct in all respects, the Leasehold Security Instruments shall remain in full force and effect; and the Lender shall be entitled to further assign or transfer this GTCA or sublet the Leased Premises in the same manner as provided under Section 9, above, without the prior written consent of Lessor. 11.3 Lender's Right to Cure Default. In the event of Default by Lessee, Lessor shall not be entitled to exercise any of its rights or pursue any of its remedies which arise by reason of such Default until the events described in the remainder of this Section 11.3 have occurred: 11.3.1 Notice to All Lenders. Written notice describing the Default in reasonable detail shall have been given to all Lenders (at the address designated by each such Lender in the manner provided in Section 11.7 below), which written notice to each Lender shall be either (i) personally delivered to the person designated to Lessor by Lender to receive such notice, or in the event no such designation is made and Lender is a corporation. to a corporate officer of Lender, or (ii) shall be given by depositing such notice in the United States mails, certified or registered mail, postage prepaid. addressed to Lender at the address so designated to Lessor by Lender, which notice if mailed shall be deemed complete seventy -two (72) hours after the same is deposited in the United States mails; and 11.3.2 Right to Cure Default. Lender shall have failed to cure any Default described in such notice that can be cured by the payment of money within thirty (30) days after such notice is given to the Lender; or if the Default so described is in the performance of any other covenant or condition of this GTCA which cannot be cured by the payment of money. then Lender shall have failed to cure such Default within sixty (60) days after such notice is given; provided, however that if such cure requires Lender's entry upon the Leased Premises and Lender is prevented by either Lessor or Lessee from entering upon the Leased Premises, then Lender shall have sixty (60) days from the date Lender is permitted free and unrestricted entry upon the Leased Premises within which to cure such Default; and further provided, however. that if the Default is of such a nature that it cannot reasonably be cured within any such sixty (60) day period, then Lender shall have such additional time as is reasonably necessary to cure such Default, provided that Lender has commenced the curing of such Default within such sixty (60) day period, and thereafter has proceeded diligently to cure the same. Lessor and Lessee agree that Lender may enter upon the Leased Premises to cure any Default of Lessee hereunder at all reasonable times, and that neither Lessor nor Lessee shall in any way obstruct or limit Lender's right of entry upon the Leased Premises. Nothing contained herein shall in any manner obligate Lender to cure any Default of Lessee. 11.4 Right to a New Lease. Notwithstanding any provision to the contrary set forth herein, if for any reason this GTCA is terminated by reason of, or in connection with, any court proceeding relating to any state or federal law for the relief of debtors, and if at such time any Lender holds a security interest in the Leasehold Estate so terminated, then such -'5 Lender shall be entitled to receive a new lease for the Leased Premises, wherein such Lender is Lessee upon the same terms and conditions set forth herein, and Lender shall have the same rights and obligations under such new lease as if such Lender had acquired the leasehold interest in the Leased Premises through foreclosure of its Leasehold Security Instrument. Such new lease shall have the same relative priority as this GTCA. No such termination of this GTCA shall in any manner affect the rights of any Lender until all of the tollowing ev ents hax e occurred: (i) Lessor shall have notified such Lender in writing of the termination of this GTCA and shall have offered such new lease to such Lender, which notice and offer shall be communicated to such Lender in the manner provided in Section 11.3.1 above, and (ii) such Lender shall have failed to accept in writing such offer of Lessor fir a new lease and to communicate such acceptance to Lessor in the manner provided in Section 11.7 below within thirty (30) days after receipt of such written offer for a new lease. or the events described in clauses (i) and (ii) above have occurred, but such Lender has failed within such thirty (30) day period to cure any and all delinquent Rent payments and other monetary Defaults of Lessee under this GTCA and to commence to cure any other Defaults of Lessee. If Lender fails to comply with the provisions of this Section 11.4 its right to a new lease as set forth in this section shall terminate and Lender shall thereafter have no further right, title or interest in and to the Leasehold Estate or the Leased Premises. In the event Lender complies with the provisions of this Section 11.4, the existing subleases ot'the Leased Premises (if any) shall remain in full force and effect and shall not be affected. 11.5 Lease Amendments and Termination. Lessor and Lessee shall not voluntarily and materially modify, amend, or change the provisions of this GTCA that would impact the Lender's security interest, without the prior written consent of the Lender, which consent shall not be unreasonably withheld. Lessor and Lessee shall not agree to voluntarily terminate this GTCA unless the obligations to all Lenders which are secured hereby have been paid in ful! . 11.6 Lender's Liability Hereunder. No Lender which takes a security interest in the Leasehold Estate shall be liable to Lessor as an assignee of Lessee, unless, and until such time as. such Lender shall have acquired the rights of Lessee hereunder through toreclosure or other appropriate proceedings in the nature thereof, or by assignment in lieu of foreclosure, or as a result of any other action or remedy provided for by Lender's Leasehold Security Instrument, or which may otherwise be provided by law. Any Lender which so acquires the Leasehold Estate shall be entitled to further assign or transfer this GTCA or sublet the Leased Premises in the same manner as provided under Section 9, above, with the prior written consent of Lessor. In the event such Lender has so acquired the rights of Lessee hereunder, such Lender assigns the Leasehold Estate to a third party in the manner contemplated herein, and such assignee agrees in writing to pay and perform all of Lessee's obligations hereunder, then from and after the date of such assignee's written assumption of Lessee's obligations hereunder, Lender shall thenceforth be relieved of all liability under this GTCA. 11.7 Notices. Notices given by any and all Lenders to Lessor under this Section 11.7 shall be in writing and shall either be delivered to Lessor personally, or deposited in the United States mails. postage prepaid and addressed to Lessor at the address which Lessee shall designate. Any notice which is so mailed shall be deemed to have been received by Lessor within seventy -two (72) hours after the same is deposited in the United States mails. Lessor hereby agrees that upon receipt of any notice, either from Lessee or from any Lender. of the existence of any Leasehold Security Instrument, the Lessor will thereafter deliver to such Lender a duplicate copy of any written notice required or permitted to be given by Lessor to Lessee under the terms of this GTCA. Any such notice given to a ender under this Section 11.7 shall be in writing and shall either be delivered to Lender personally, or deposited in the United States mails, postage prepaid and addressed to Lender at the address provided to Lessor. Any notice which is so mailed shall be deemed to have been received by Lender within seventy -two (72) hours after the same is deposited in the United States mails. 11.8 Implementation of Lender Protection Provisions. Lessor and Lessee shall cooperate to include in this (iTCA by suitable amendment from time to time any provision which may reasonably he requested by any proposed Lender for the purpose of implementing the 'lender protection" provisions contained in this GTCA and allowing such Lender reasonable means to protect or preserve such Lender's lien and security interest in the Leasehold Estate on the occurrence of a Default under the terms of this GTCA. Lessor and Lessee shall execute and deliver (and to acknowledge, if necessary, for recording purposes) any agreement necessary to effect any such amendment; provided, however, that any such amendment shall not in any way affect the term of this GTCA or Rent under this GTCA, nor otherwise in any material respect adversely affect any rights of Lessor under this ( if( `A: and further provided. however, that Lessor shall not be obligated to encumber its reversionary interest in the Leased Premises. ( "subordinate the fee "), execute any document creating personal liability on the part of Lessor, or otherwise subject Lessor or Lessor's interest in the Leased Premises to liability whatsoever for such loan. Notwithstanding the foregoing, Lessor and /or its lender shall be required to execute any reasonable subordination and non - disturbance agreement requested by any Lender to ensure that Lender's interest in the Leasehold Estate shall not be disturbed by the Lessor and /or any of Lessor's lenders on the Leased Premises if any) in the event of a foreclosure action, 11.9 Merger of Estates. In the event Lessee acquires the reversionary interest of Lessor in the Leased Premises and any Lender holds a Leasehold Security Instrument encumbering the Leasehold Estate, then the Leasehold Estate shall not merge with such reversionary interest, hut shall remain a separate and distinct estate until all obligations to all Lenders have been fully paid, performed and satisfied, and such security interest in the Leasehold Estate shall remain in full force and effect, unless and until such time as Lessee has executed an appropriate security interest in the Leased Premises in a form, and having a priority, acceptable to all such Lenders. 12. PROCEEDINGS. If any action for breach of or to enforce the provisions of this GTCA is commenced, the court in such action shall award to the prevailing party a reasonable sum as attorneys' fees and costs both for trial and any appeal. The non - prevailing party in such action shall pay such attorneys' fees and costs both for trial and any appeal. Lessee agrees to indemnify and save harmless Lessor and its partners, officers, agents, employees and Affiliates from and Il Orb!. Ape._.!.! .. 30 against any and all losses, claims, demands or suits by third parties in the manner contemplated in Section 6.3 (including reasonable attorneys' fees). If any action or proceeding is brought against Lessor by reason of anv such claims. Lessee upon notice from Lessor covenants at Lessee's cost and expense to resist or defend such action or proceeding or to cause it to be resisted or defended by an insurer. or if uninsured by counsel reasonably acceptable to Lessor, appointed and paid by Lessee. 13 MISCELLANEOUS PROVISIONS 13.1 Representations. Lessor represents and warrants to Lessee that the following facts and conditions exist and are true as of the Commencement Date and, to the extent specifically so stated. will remain true throughout the Lease Term: 13.1.1 Due Authorization and Execution. Lessor has full right, title, authority, and capacity to execute and perform this GTCA, the Memorandum of Lease (as defined below), and any other agreements and documents to which Lessor is a party and referred to or required by this GTCA (collectively, the "Lease- Related Documents "); the execution and delivery of the Lease - Related Documents has been duly authorized by all requisite actions of Lessor; the Lease - Related Documents constitute valid, binding, and enforceable obligations of Lessor; and neither the execution of the Lease- Related Documents nor the consummation of the transactions contemplated thereby violates any agreement (including Lessor's organizational documents), contract or other restriction to which Lessor is a party or is bound. Lessor's representations and warranties contained in this paragraph shall continue to apply in full force and effect throughout the Term as if made continuously during the Term. 13.1.2 No Litigation. There is no existing or, to Lessor's knowledge, pending or threatened litigation, suit, action, or proceeding before any court or administrative agency affecting the Leased Premises that would, if adversely determined, adversely affect the Leased Premises, or Lessee's ability to develop and operate the I eased Premises for the purposes set forth herein. 13.2 Severability. A determination by a court of competent jurisdiction that any provision of this GTCA or any part thereof is illegal or unenforceable shall not cancel or invalidate the remainder of such provision or this GTCA, which shall remain in full force and effect. 13.3 Interpretation. The captions of the Sections of this GTCA are to assist the parties in reading this GTCA and are not a part of the terms or provisions of this GTCA. Whenever required by the context of this GTCA, the singular shall include the plural and the plural shall include the singular. The masculine, feminine and neuter genders shall each include the other. In any provision relating to the conduct. acts or omissions of Lessee, the term -Lessee" shall include Lessee's agents, employees, contractors, invitees, successors or others using the Leased Premises with Lessee's expressed or implied permission. 13.4 Notices. All notices require or permitted under this GTCA shall be in writing and shall be personally deli\ ered or sent by certified mail, return receipt requested, postage prepaid, or sent for overnight delivery by a nationally recognized courier such as Federal Express. Notices to Lessee shall be delivered to the address specified in Section 1.1 above. Notices to Lessor shall he delivered to the address specified in Section 1.1 above. All notices shall he effective upon delivery or delivery refused. Either party may change its notice address upon written notice to the other party. 13.5 Waivers. Except as otherwise provided under the terms of this GTCA all waivers must be in writing and signed by the waiving party. Lessor's failure to enforce any provision of this GTCA or its acceptance of Rent shall not be a waiver and shall not prevent Lessor from enforcing that provision or any other provision of this GTCA in the future. No statement on a payment check from Lessee or in a letter accompanying a payment check shall be binding on Lessor. Lessor may, with or without notice to Lessee, negotiate such check without being bound to the conditions of such statement. 13.6 Recordation of Memorandum of Lease. Lessor and Lessee each hereby agree to execute a Memorandum of Lease in the form attached hereto as Exhibit D (the "Memorandum of Lease ") upon the execution of any Supplemental Lease pursuant to the terms hereof which Memorandum of Lease shall. at Lessee's option, be recorded in the Office of the Recorder of Nueces County, Texas on or at any time following the Commencement Date. Any transfer taxes or conveyance fees payable upon recordation of the Memorandum of Lease will be payable by the Lessor. 13.7 Binding Effect; Choice of Law. This GTCA binds any party who legally acquires any rights or interest in this GTCA from Lessor or Lessee. However, Lessor shall have no obligation to Lessee's successor unless the rights or interests of Lessee's successor are acquired in accordance with the terms of this GTCA. The laws of the state in which the 1_:eased Premise: is located shall govern this GTCA. 13.8 Corporate Authority; Partnership Authority. Each person signing this GTCA on behalf of Lessee represents and warrants that he has full authority to do so and that this GTCA binds the corporation. If requested by Lessor, within thirty (30) days after this GTCA is signed, Lessee shall deliver to Lessor a certified copy of a resolution of Lessee's Board of Directors authorizing the execution of this GTCA or other evidence of such authority reasonably acceptable to Lessor. 13.9 Joint and Several Liability. All parties signing this GTCA as Lessee shall be jointly and severally liable for all obligations of Lessee. 13.10 Execution of Lease. This GTCA may be executed in counterparts and, when all counterpart documents are executed, the counterparts shall constitute a single binding instrument. Lessor's delivery of this GTCA to Lessee shall not be deemed to be an offer to lease and shall not be binding upon either party until executed and delivered by both parties. 13.11 Survival. All representations and warranties of Lessor and Lessee shall survive the termination of this GTCA. 13.12 GTCA Termination. This GTCA shall terminate on the Expiration Date. 32 13.13 Controlling Document. in the event that there is a conflict in the terms, conditions, rights, or obligations, including but not limited to Lessor's right to receive income, in any documents entered into by and between Lessor and Lessee, the terms, conditions, rights, and obligations of this CiTCA shall control. 13.14 Counterparts. if this GTCA is executed in any number of counterparts in the manner contemplated under Section 13.10, above, all such counterparts, taken together, shall constitute one and the same instrument. 13.15 Ownership of Improvements During Term. During the Lease Term, title to any and all Improvements, including, without limitation. buildings, parking areas,drives, walkways, landscape improvements and infrastructure improvements such as roadways, utilities, mains and lines. curbs and drainage facilities, which are constructed, installed or erected on the Leased Premises by Lessee during the Lease Term shall vest in Lessee (unless any such improvements are dedicated to the local municipality or applicable utility service provider) or attached and or affixed to any building by Lessee, shall remain with Lessee during the Lease Term or until the Expiration Date or earlier termination or cancellation of this CTCA and shall thereupon automatically vest in Lessor as provided in Section 13.17, below Notwithstanding the thregoing, title to any and all FF &E (as defined in Section 13.17. below) belonging to the Lessee or any sublessee, shall keep and retain their character as personal property. shall not be deemed to be a part of the Leasehold Estate, and shall be and remain the property of the Lessee or its sublessee, as applicable, during the Lease Term and thereafter. following the Expiration Date. 13.16 Expiration of Term. Upon the Expiration Date: (a) all Improvements constituting part of the Leased Premises (including any buildings) shall become Lessor's property and shall be vacated in broom -clean condition; (b) Lessee shall deliver to Lessor possession of the I. eased Premises; (c) Lessee shall surrender any right, title, or interest in and to the Leased Premises: (d) Lessee shall deliver the Leased Premises free and clear of all: (i) subleases, and (ii) liens except liens created as a result of Lessor's or any of its agents' acts or emissions., (e) Lessee shall assign to Lessor, without recourse, and give Lessor copies or originals of, an\ then current subleases that Lessor has elected to assume from Lessee, and all assignable licenses, permits. contracts. warranties, and guarantees then in effect for the Leased Premises, if any: (f) the parties shall cooperate to achieve an orderly transition of operations from Lessee to Lessor without interruption, including delivery of such books and records (or copies thereof) as Lessor shall reasonably require; (g) the parties shall terminate the Memorandum of Lease. Notwithstanding anything to the contrary set for herein. Lessee ;nay remove from the Leased Premises any FF &E (as defined herein) that Lessee or any sublessee acquired or utilized in connection with the use and operation of the Leased Premises, but Lessee or its sublessee must do so, if at all, before or within thirty (30) days after the Expiration Date. During such 30 -day period: (a) Lessee may enter the Leased Premises for such purposes. without being deemed a holdover; (b) Lessor shall have no obligation to preserve or protect such FF &E; and (c) in entering the Leased Premises. Lessee shall comply with Lessor's reasonable instructions. During said thirty (30) day period Lessee shall keep in force all insurance coverages as required under the terms of this GL'CA. with Lessor being named as an additional insured. Lessee shall also indemnify, hold and save harmless Lessor from any and all claims, losses and damages of whatsoever nature that might occur or be claimed as a result of Lessee's actions during said thirty (30) day period. Lessee's FF &E not removed from the Leased Premises within thirty (30) days after the Expiration Date shall be deemed abandoned. For purposes of this GTCA, "FF &E" means all movable furniture, fixtures, equipment, and personal property of Lessee that may be removed from the Leased Premises without material damage thereto and without adversely affecting: (a) the structural integrity of the Leased Premises; (b) any electrical, plumbing. mechanical, or other system of the Leased Premises: (c) the present or tuture operation of any such system; or (d) the present or future provision of any utility service to the Leased Premises. FF &E includes, but is not limited to, such items such as such as factory equipment, furniture, fixtures and equipment, telephone. telecommunications and facsimile transmission equipment, point of sale equipment. telev isions. radios. and computer systems. 13.17 Right of First Refusal. In the event that at any time during the Lease Term or within ninety (90) days atter the expiration thereof, Lessor should receive an offer for the purchase of the Leased Premises, and if such offer to purchase is acceptable to Lessor ("Offer "), then Lessee shall have, and Lessor does hereby grant to Lessee, the right of first refusal to purchase the Leased Premises at the same price and under the same terms and conditions as are contained in such Offer. Upon receipt of any such Offer to purchase the Leased Premises, Lessor shall deliver to Lessee a copy of any such Offer to Lessee, certified by the Lessor as being a complete. true and correct copy of such Offer. Lessee shall have a period of thirty (30) days from the date of the receipt of such Offer to elect whether or not It intends to accept or reject such Offer. If Lessee desires to purchase the Leased Premises from Lessor upon the same terms and conditions as set forth in such Offer, Lessee shall so notify Lessor in writing within thirty (30) days of the receipt of the Offer and shall accompany such notice with an earnest money deposit equivalent to any earnest money deposit that was made with the Offer. If Lessee fails to so notify Lessor of Lessee's acceptance of such Offer and exercise of the right of first refusal within such thirty (30) day period, such failure to so notify Lessor shall be deemed a rejection of such Offer. Rejection of such Offer shall not terminate this right of first refusal as to any other or subsequent sales of the Leased Premises by Lessor, or Lessor's successors or assigns. If Lessee fails to exercise its right of first refusal with respect to any such Offer, the Lessor will remain obligated to give Lessee an additional opportunity, within the time period pro' ided herein. to purchase the Leased Premises if the party that originally submitted that Offer proposes any material change in that Offer that is less favorable to the Lessor, and the Lessor is otherwise willing to accept any such lesser Offer. In the event of the exercise by Lessee of this right of first refusal. Lessor and Lessee shall consummate the sale and purchase of the Leased Premises in accordance with, and within the time limitations set forth in the tenns and conditions of such Offer as originally submitted to Lessor and as certified to Lessee. In the event that such Offer should include as a part of the consideration to be paid for the Leased Premises any particular or unique property, or the exchange of any other property, Lessee shall not be required to deliver to Lessor such property, but shall satisfy such obligations by the payment to Lessor of cash in an amount equivalent in value of such other property. Any sale between the Lessor and Lessee pursuant to this provision shall be on the same terms and conditions as were contained in the Offer. 13.18 Estoppel Certificates. Upon the written request by a party to this GTCA, the other party shall within fifteen (15) days, furnish an estoppel certificate containing information customarily contained in such certificates or as may be reasonably requested, including, hut not limited to, the commencement and expiration dates of the Lease, the status of the payment of rent. and the existence of any then current defaults. 13.19 Brokers. Each party represents and warrants to the other that it has dealt with no broker, tinder or other person with respect to this GTCA contemplated hereby. Lessor and Lessee each agree to indemnify and hold harmless one another against any loss, liability, damage, cost, expense or claim incurred by reason of any brokerage commission alleged to be payable because of any act. omission or statement of the indemnifying party. Such indemnity obligation shall be deemed to include the payment of reasonable attorneys' fees and court costs incurred in defending any such claim. 13.20 Effective Date. Notwithstanding the definition of the term "Effective Date" in the introductory paragraph of this GTCA, the term "Effective Date" will mean and refer to the date upon which this GTCA was last executed by the Lessor or Lessee, as evidenced by the date ascribed next to each party's signature, below. 13.21 References /Definitions. All references herein to "GTCA" shall mean this General Terms and Conditions Agreement. and where appropriate and/or applicable, any Supplemental Lease entered into by and between Lessor and Lessee. 13.22 Conditions Operative. This GTCA shall become operative only upon the execution of any Supplemental Lease (as previously described herein) by and between Lessor and Lessee. In connection therewith, upon execution of any Supplemental Lease, this GTCA and any such Supplemental Lease shall he considered and deemed to be merged into one lease agreement. [SIGNATURES ON NEXT PAGE] 35 SIGNATURE PAGE IN WITNESS WHEREOF, the parties have executed this GTCA as of the date first above written. Lessor: City of Corpus Christi n) B v: George K. Noe City Manager Lessee: Scannell Development Company By: N am e: Title: '1 N s.II Orool Agree,,,n, orp, ('hr x 36 Date: Date: As, ,uumell OVIwn Are,mm, Corpus Chum 7 EXHIBIT A LEASED PREMISES 37 Date: Lessor: Lessor's Address: EXHIBIT B SHORT TERM SUPPLEMENTAL LEASE [to General Terms and Conditions Agreement] 200 City of ('orpus Christi, a political subdivision of the State of Texas c Corpus Christi International Airport 1000 Intemational Drive Corpus Christi, Texas 78406 Lessee: Scannell Development Company, an Indiana corporation Lessee's Address: 800 East 96th Street, Suite 175 Indianapolis, Indiana 46240 Leased Premises: Description of Leased Premises is contained on Exhibit "A" attached hereto, made a part hereof and incorporated by reference herein. Lease Term: One (1) year which shall be superceded by a Long Term Supplemental Lease executed between Lessor and Lessee for the Leased Premises described above. Reimbursement: If Lessor fails to execute a Long Term Supplemental Lease for the Leased Premises as described above. Lessor agrees to reimburse Lessee for Lessee's expenses incurred during the ninety (90) day period from Commencement Date of this Supplemental Lease to develop the Leased Premises up to a maximum reimbursable amount of $25,000.00. (`ommencement Date: , 20 Termination Date , 20 Base Rent (monthly): As stipulated in the GTCA. Permitted Use: As stipulated in the GTCA. This Supplemental Lease is operative under, subject to and performable pursuant to the terms, covenants and conditions of that one certain GTCA dated , 20 , executed by and between Lessor and Lessee, reference to which is here made for all pertinent purposes. Lessee acknowledges that a true and correct copy of the GTCA has been given to Lessee by Lessor, and that this signed instrument shall be deemed conclusive evidence of Lessee's receipt thereof. All terms, covenants and conditions contained in said GTCA are incorporated in their entirety herein as if same were set forth verbatim herein. In connection therewith, it is understood and agreed by Lessor and Lessee that all terms, covents and conditions contained in said GTCA shall be the governing terms, covenants and conditions of this Supplemental Lease. 13 x This Supplemental Lease is executed pursuant to the terms, covenants and conditions of the above described GTCA and is intended to supplement the GTCA pursuant to the terms hereof. Upon execution hereof, the GTCA and this Supplemental Lease shall be considered and deemed to be merged into one lease agreement. In the event of any inconsistency or conflict between the terms, covenants and conditions of the GTCA and this Supplemental Lease, those of the GTCA shall prevail and control. Lessor City of Corpus Christi, a political subdivision of the State of Texas By: Date: George K. Noe City Manager Lessee Scannell Development Company, an Indiana Corporation By: — Name: Title: 39 Date: ■ °mon Agrevma, t, co,s Chnst EXHIBIT A LEASED PREMISES 4() Date: Lessor: Lessor's Address: Lessee: Lessee's Address: 800 East 96th Street, Suite 175 Indianapolis, Indiana 46240 EXHIBIT B LONG TERM SUPPLEMENTAL LEASE [to General Terrns and Conditions Agreement] 200 City of (''orpus Christi. a political subdivision of the State of Texas c/o Corpus Christi International Airport 1000 International Drive Corpus Christi, Texas 78406 Scannell Development Company, an Indiana corporation Leased Premises: Description of Leased Premises is contained on Exhibit "A" attached hereto, made a part hereof and incorporated by reference herein. Lease Term: ('ommencement. Date: Termination Date Forty (40) years and zero (0) months which may be extended pursuant to Section 2.3 of the General Terms and Condition Agreement (GTCA). , 20 , 20 Base Rent (monthly): As stipulated in the GTCA. Permitted L se: As stipulated in the GTCA. This Supplemental Lease is operative under, subject to and performable pursuant to the terms, covenants and conditions of that one certain GTCA dated , 20 , executed by and between Lessor and Lessee, reference to which is here made for all pertinent purposes. Lessee acknowledges that a true and correct copy of the GTCA has been given to Lessee by Lessor, and that this signed instrument shall he deemed conclusive evidence of Lessee's receipt thereof. All terms, covenants and conditions contained in said GTCA are incorporated in their entirety herein as if same were set forth verbatim herein. In connection therewith, it is understood and agreed by Lessor and Lessee that all terms, covenants and conditions contained in said GTCA shall be the governing terms, covenants and conditions of this Supplemental Lease This Supplemental Lease is executed pursuant to the terms, covenants and conditions of the above described GTCA and is intended to supplement the GTCA pursuant to the terms hereof. Upon execution hereof, the GTCA and this Supplemental Lease shall be considered and deemed to be merged Inncll 00 , Agre 41 into one lease agreement. In the event of any inconsistency or conflict between the terms, covenants and conditions of the GTCA and this Supplemental Lease, those of the GTCA shall prevail and control. Lessor City of Corpus Christi. a political subdivision of the State of Texas By: Date: George K. Noe City Manager Lessee Scannell Development Company, an Indiana Corporation By: Name: Title: 42 Date: Agrec,cni, ts Come. ■'hnsv ( i ,,,mnellOpitort Agrct,,,trtt, EXHIBIT C PLANS AND SPECIFICATONS 44 ('1 r , ,.:Wm,CII Op. AQjec, rl EXHIBIT D MEMORANDUM OF LEASE 4S State ountt NI-'e PUBLISHER'S AFFIDAVIT CITY OF CORPUS CHRISTI s,; Ad # 5557913 PO Before rfl dersignrd_ Notary Public, this day personally came Sandra °rum, h o )eini, ; firs- d t_; i\ sworn according to law. says that she is Legal Sales Representative if he ( 'orpus Christi Caller - Times, a daily newspaper nublis ed at Cc, pus Christ) in said City and State. generally circulated in Aransas. Bet H rooks Duval, _)in Hogg, Jim Wells, Karnes, Kenedy, Kleberg, live Oak Ref :igio San Patricia, Victoria and Webb Counties, and that she pt l)l!cat on NOTICE, OF PASSAGE OF ORDINANCE NO. which the nnev-1 c , was nsortt d in the Corpus Christi Caller -Times and on he W Wido `Neb on Caller-Times Interactive on the 27TH day(s) of AUGUST 200h $181.( cgal Sales Representative TWO (2 ) Time(s) Subscribed and sworn to o me on the date of Notary Public. N% ces County, Texas Michelle Cabrera Print or Type Name of Notary Public My commission expires on March 19, 2008. 'Su y „Au ust 27 2006 •CALLER -TIMES OTICE OF PASSAGES OF ORDINANCE NO 026920 Authorizing the City Manager to execute a Real Estate Option Agreement with Scannell Development Company or its subsidiary it consideration of $1 OC option fee for the first option period of nine (9) months, $20,000 for next successive twelve (12) months and $20,000 for next suoeeaslve tltelwe (12) month period, to tease all or part of approximately 56 acres of land in Phase 1 of the Corpus Christi International Airport Business Centre (State Highway 44 west of International Drive north of Giasson and east of Pinson Road) at annual rate of twenty - five cents per square foot for property which fronts International Drive, and annual rate of fifteen cents per square foot for all other property, to be increased every five years by 7.5 %, for a term of forty years with two successive five year options to renew. This ordinance was passed and approved by the City Council of the City of Corpus Christi on its second reading on August 22, laf Armando Chapa City Secretary City of Corpus Christi.