HomeMy WebLinkAboutC2013-352 - 11/19/2013 - Approved CORPUS CHRISTI INTERNATIONAL AIRPORT
AMENDED AND RESTATED HANGAR AND
FIXED BASE OPERATOR'S LEASE
STATE OF TEXAS §
COUNTY OF NUECES §
This Corpus Christi International Airport Amended and Restated Hangar and Fixed Base
Operator's Lease ("Lease") is entered into by and between the CITY OF CORPUS CHRISTI
("Lessor" or "City"), a Texas home-rule municipal corporation, and MERCURY AIR CENTER —
CORPUS CHRISTI, INC., dba ATLANTIC AVIATION ("Lessee"), a corporation authorized to do
business in Texas, acting by and through its duly authorized officers. The initial addresses of the
parties are as follows:
Lessor or City Lessee
Aviation Director Louis Pepper, CEO
City of Corpus Christi Mercury Air dba Atlantic Aviation
1000 International Drive 6652 Pinecrest Dr., Suite 300
Corpus Christi, Texas 78406 Plano, Texas 75024
WHEREAS, by Ordinance No. 14976, passed and approved by City Council on July 3, 1979,
the City of Corpus Christi, a Texas home rule municipal corporation, approved, subject to
certain conditions, an assignment of a Hangar and Fixed Base Operator's Lease to Chaparral
Aviation, Inc., a Texas corporation, effective October 14, 1979, and performable in Nueces
County, Texas; and
WHEREAS, through a series of subsequent authorized lease assignments, the Lease was
assigned and is now held by Lessee, pursuant to a Consent to Assignment of Hangar and Fixed
Base Operator's Lease dated November 19, 2002 (the "Consent Agreement"), among City,
Mercury Air Group, Inc., a Delaware corporation and parent company of Lessee, and Lessee,
with all Lease guarantees remaining with Lessee; and
WHEREAS, subsequent to the Consent Agreement, an assignment and assumption of guaranty
agreement ("Assumption Agreement") was executed between the City of Corpus Christi, Lessee
and Macquarie FBO Holdings, L.L.C. ("Macquarie") dated September 13, 2007, in which the
City of Corpus Christi consented to the transfer of the Lease guarantees from Lessee to
Macquarie, pursuant to a stock purchase agreement dated April 16, 2007, and executed
between Macquarie and Lessee, in order for Macquarie to acquire all of the outstanding and
issued capital stock of Lessee; and
WHEREAS, Macquarie subsequently filed an application, on January 2, 2008, with the
Secretary of State's Office of the State of Delaware to change its corporate identity from
Macquarie to Atlantic Aviation FBO Holdings, L.L.C. ("Atlantic"); and
WHEREAS, Lessee is a current tenant pursuant to the above-referenced lease agreement
assignments, amendments, modifications, and name changes.
WHEREAS, the parties hereto desire to modify the provisions of said lease agreement; and
2013-352
11/19/13
Ord. 030016 JAL Page 1 of 36
Mercury Air Center- CC INDEXED
NOW, THEREFORE, the following Amended and Restated Hangar and Fixed Base Operator's
Lease is hereby entered into by and between the parties hereto in complete substitution for the
previous lease agreement and all amendments and modifications thereto, as heretofore
amended:
ARTICLE 1. DEFINITIONS
As used herein, the following words and phrases shall have the meanings set forth below:
1.01 Affiliate. "Affiliate" is any corporation or other entity which directly or indirectly controls or
is directly or indirectly controlled by or is under common control with Lessee; "control" shall
mean the possession, directly or indirectly, of the power to direct or cause the direction of the
management and policies of such entity, whether through the ownership of voting securities or
by contract or otherwise.
1.02 Airport. "Airport" means Corpus Christi International Airport.
1.03 AOA. "AOA" means Aircraft Operating Area.
1.04 Appraisal. "Appraisal" means the process to arrive at a property valuation based on
rental rates for similar property at the Airport and at similar nearby airports and consistent with
airports included in the appraisal done by Aviation Management Consulting Group, dated
November 18, 2011, identified in EXHIBIT 2, attached hereto and incorporated into this Lease,
that will be utilized to set rental rates during the term of this Lease.
1.05 Aviation Director. "Aviation Director" means the Aviation Director of the City of Corpus
Christi or Assistant Aviation Director.
1.06 Capital Improvement. "Capital Improvement" means an expenditure for a project or
improvement at the Leased Premises that increases the value of the Leased Premises or
extends its life expectancy by (i) returning the Leased Premises to its originally efficient
operating condition if it has deteriorated to a state of disrepair and is no longer functional for its
intended use, (ii) rebuilding Leased Premises to a like-new condition after the end of its
economic useful life, or (iii) replacing or adding a major component or substantial structural part
of the Leased Premises.
1.07 DOT. "DOT" means the United States Department of Transportation, and any federal
agency succeeding to its jurisdiction.
1.08 FAA. "FAA" means the Federal Aviation Administration of the United States government,
and any federal agency succeeding to its jurisdiction.
1.09 FBO. "FBO" is an abbreviation for Fixed Base Operator, which is further defined in the
Minimum Standards for Commercial Aeronautical Service Providers.
1.10 Fiscal Year. "Fiscal Year" means a period of twelve (12) consecutive months
commencing on October 1 and ending on September 30.
1.11 Leased Premises. "Leased Premises" means those certain premises at Airport more
particularly described in Article 2.
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1.12 Maintenance. "Maintenance" means a repair of less than $100,000 that keeps the
Leased Premises in proper working condition but does not add to the value or extend the life
expectancy of the Leased Premises. Maintenance merely keeps the Leased Premises in an
operating condition over its probable useful life for which it was acquired.
1.13 Sign. "Sign" means any advertising sign, billboard, identification sign or symbol, or other
similar device, regardless of content.
1.14 Subsidiary. "Subsidiary" shall mean any corporation or other entity not less than fifty
percent (50%) of whose outstanding stock (or other form of equity ownership) shall, at the time,
be owned directly or indirectly by Lessee or the entity owning directly or indirectly 50% or more
of Lessee, as applicable.
1.15 Trade Fixtures. "Trade Fixtures" shall mean, but shall not be limited to, any signs
(electrical or otherwise) used to identify Lessee's business; all shelves, bins, racking, machinery
and equipment used in connection with Lessee's required or permitted activities pursuant to this
Lease, whether or not such machinery or equipment is bolted or otherwise attached to the
Leased Premises; and all other miscellaneous office equipment, furnishings, and personal
property.
1.16 TSA. "TSA" means the Transportation Security Administration, and any federal agency
succeeding to its jurisdiction.
ARTICLE 2. DESCRIPTION OF LEASED PREMISES
2.01 Lessor, for and in consideration of the rents, covenants and promises herein contained
to be kept, performed and observed by Lessee, does hereby lease unto Lessee, and Lessee
does hereby accept from Lessor, the property, including all structures and improvements
erected on the property existing and in operation as of the Commencement Date of this Lease
(collectively referred to as "Leased Premises") located at 506 International Drive, at the Airport,
identified in EXHIBIT 1, attached hereto and incorporated into this Lease, provided however that
WGA-H4 ("Hangar 4"), as it exists as of the Commencement Date of this Lease, specifically is
excluded from the Leased Premises.
ARTICLE 3. RENTAL
3.01 Lessee agrees to pay Lessor the rental as indicated on the tables (entitled "Premises
Rent" and "Fuel Farm Rent") below, monthly in advance (without notice or demand, both of
which are expressly waived) for the use and occupancy of the Leased Premises, at the times
and in the manner hereinafter provided. During the Term, any change in rent for the Option
periods discussed in Article 5 below, will be based on an Appraisal by a third party appraiser,
pursuant to the Appraisal process defined herein and described in section 3.02 herein. Initial
values will be determined by the amount set by the appraisal done by Aviation Management
Consulting Group, dated November 18, 2011, identified in EXHIBIT 2, attached hereto and
incorporated into this Lease.
All rentals for any subsequent periods shall be calculated based on the Appraisal and
shall be paid by Lessee to Lessor in advance without invoicing, notice or demand, in equal
monthly installments on or before the first day of each calendar month beginning on the
Commencement Date and continuing throughout the remainder of the term of this Lease and
any extension(s) hereof. In the event that the term of this Lease shall commence on the day
Atlantic FBO Lease 8-27-13 FINAL Page 3 of 36
other than the first day of any calendar month or expire on a day other than the last day of a
calendar month, then, and in such event, the rent will be prorated for the first or last month as
the case may be.
From Lease Commencement through September 30, 2018:
PREMISES RENT
Rent per Annual Rent
Premises Area SF Acreage SF/YR
WGA-H1 14,000 0.32 $1.500 $21,000.00
WGA-H2 14,000 0.32 $1.500 $21,000.00
WGA-H3 11,500 0.26 $1.650 $18,975.00
WGA-OF1(TERM) 3,105 0.07 $6.000 $18,630.00
WGA-0F2 4,680 0.11 $5.650 $26,442.00
PARKING LOT 44,141 1.01 $0.300 $13,242.30
CONCRETE 116,629 2.68 $0.350 $40,819.98
APRON
UNDEVELOPED 40,955 0.94 $0.300 $12,286.50
FUEL FARM PAD 11,246 0.26 $0.350 $ 3,963.10
TOTAL 260,255.50 5.97 $176,331.88
FUEL FARM RENT
Capacity Rent per Annual Rent
Description Gallons) GAL/YR
JETA 24,000 $0.750 $18,000.00
AVGAS 10,000 $0.750 $7,500.00
UNLEADED 500 $0.750 $375.00
TOTAL 34,500 $25,875.00
3.02 All rent and payments that become due and payable by the Lessee shall be made to the
City of Corpus Christi, Office of the Aviation Director, Corpus Christi International Airport, 1000
International Drive, Corpus Christi, Nueces County, Texas, 78406 unless otherwise notified in
writing. All rent and payments unpaid for ten (10) days after the date due shall bear interest at
the rate of eighteen (18) percent per annum from that date.
3.03
(a) The Appraisal shall be updated approximately every five (5) years after the date
of the previous Appraisal, to arrive at an updated property rental valuation that will be utilized to
set rental rates for any subsequent five (5) year period.
(b) All appraisers appointed pursuant to this provision shall be qualified and impartial
members of the Appraisal Institute or a person with equivalent credentials, experienced in
airport property appraisals. No two (2) appraisers may be employed by, or maintain an office
within, the same company, firm or organization, or affiliated organizations or companies.
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ARTICLE 4. USE OF LEASED PREMISES
Lessee shall use the Leased Premises solely for operating an FBO as defined Section 15 of the
current Minimum Standards dated October 17, 2012 for Commercial Aeronautical Service
Providers and as the same may be amended from time to time, which includes performing
and/or subleasing to qualified tenants to perform full aircraft servicing facilities including but may
not be limited to the sale of aircraft and aircraft parts; aircraft maintenance and repair; servicing
of aircraft engines, instruments, propellers and accessories in connection with said business,
aircraft storage, aircraft training, aircraft charter and rentals, aviation school instruction,
classroom and flight simulator instruction, and other flight instruction provided only to those
persons already holding an aircraft pilot license and seeking a certification towards an aircraft
being manufactured or sold on the Leased Premises, and such other activities reasonably
incidental thereto and such business directly related thereto or as may be set forth in the
Minimum Standards as amended from time to time. Such use may also include any other
activity or services normally performed or offered by an FBO at the Airport, as adopted in the
Minimum Standards, as they may be amended from time to time, and such other aviation
related uses as may be included in the Minimum Standards as amended from time to time.
Provided Lessee is a holder of a valid aviation fuel dispensing permit issued by the City of
Corpus Christi and not in default of any other provision of this Lease, Lessee may also conduct
fueling operations as authorized under said fuel dispensing permit on the Leased Premises.
In connection with such use and occupancy, Lessee shall have the right to occupy and
maintain, as required by this Lease, all buildings, shops, hangars and other improvements
existing on the Leased Premises as of the Commencement Date of this Lease, provided,
however, that Hangar 4 as it exists on the Commencement Date of this Lease is not included in
the Leased Premises and Lessee shall have no right to occupy and no right or obligation to
maintain Hangar 4 at any time during the term of this Lease.
The City reserves the right to replace or repair portions of the concrete apron included in the
Leased Premises. During any such replacement or repair work, if Lessee cannot use portions of
the concrete apron due to the work being done, the City will provide Lessee alternate space of
substantially the same size of said portions and as close to the Leased Premises as is practical.
Prior to the award of any contract for such replacement or repair, the City shall consult with
Lessee on alternative space options and use its best efforts to provide an alternative that has
the least impact on Lessee's operations. Following the completion of any such replacement or
repair, Lessee's Leased Premises will be restored to its original layout. Lessee waives any
claims for compensation for loss caused by such temporary relocation provided the steps
identified herein are followed.
The Lessee shall not at any time leave the Leased Premises vacant, but shall in good faith
continuously throughout the term of this Lease conduct and carry on in the entire Leased
Premises the type of business for which the Leased Premises are leased, except during periods
in which the Leased Premises may not be occupied as a result of fire or other casualty, or
reasonable periods for repairs and alterations, all such repairs and alterations to be diligently
pursued to completion.
All services performed by Lessee shall be in compliance with all applicable state and federal
environmental rules and regulations at Lessee's sole expense.
No other activities shall be conducted on the Leased Premises unless authorized in writing by
the Aviation Director provided, however that such other activities be aeronautical in nature.
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ARTICLE 5. LEASE TERM
5.01 The initial term of this Lease shall be five (5) years ("Initial Term") that shall commence
on the first day of the month following the later of (i) the date of passage of an Ordinance by the
City Council of Corpus Christi approving this Lease or (ii) the date of passage of an Ordinance
by the City Council of Corpus Christi approving the Amended and Restated Hangar and Fixed
Base Operator's Lease between the City and Signature Flight Support Corporation, but in no
event later than sixty (60) days following passage of an Ordinance by the City Council of Corpus
Christi approving this Lease ("Commencement Date") and shall terminate at midnight of the last
day of the 5-year term unless earlier terminated in accordance with this Lease or extended for
additional periods as provided in section 5.02 below. Together the Initial Term and any
extension shall collectively be referred to as the Term of this Lease.
5.02 Lessee shall have the option to extend the Term by up to four (4) additional five (5) year
periods ("Option(s)"), with the maximum term of the Lease not to exceed twenty-five (25) years.
Each five (5) year Option shall be conditioned upon i) a Capital Improvement Plan (as defined
herein in the paragraph below) and related budget, agreed upon by the parties as described
herein, ii) a capital investment by Lessee of not less than One Million One Hundred Thousand
dollars ($1,100,000) for Direct Construction Costs (as defined below) for such Capital
Improvements, and iii) a performance bond or irrevocable standby letter of credit in the face
amount of the agreed upon budget for the Capital Improvement Plan, as described below,
provided however, if the Lessee submits and the City approves a Capital Improvement Plan
equal to or in excess of a multiple of $1,100,000, the Term of this Agreement shall be extended
for five year Option periods equal to the multiple of the Direct Construction Costs in the
approved Capital Improvement Plan. Upon satisfaction of the foregoing three conditions, the
Term of this Agreement shall be extended by letter agreement to be promptly issued by the City
and countersigned by the Lessee. Failure to meet any of the three conditions stated herein will
invalidate the Option.
As used herein, "Capital Improvement Plan" means a detailed description of the Capital
Improvements including budgetary costs, and intended uses for each item intended to be
installed or constructed at the Leased Premises by the Lessee. "Direct Construction Costs"
means all general contractor and construction related trades required to complete the project in
accordance with the approved drawings as well as related costs associated with architecture,
engineering, testing, permits, and construction management.
Subject to the requirements set forth in Article 13 herein, Lessee will submit the above-
referenced Capital Improvement Plan to the Aviation Director before the end of the thirtieth
(30th) month after the Commencement Date of the Initial Term (or current Option period, in the
case of exercise of the second or third Option). The Aviation Director shall have thirty (30)
calendar days after receipt of the Capital Improvement Plan, to approve or to object in writing to
any matter referenced within. If the Aviation Director objects within such 30-day period in writing
to any matter contained within such Plan (including its budget), the Aviation Director and Lessee
agree to work together in good faith to resolve any such objections to the reasonable
satisfaction of both parties. Subject to the approval by the Aviation Director of the Capital
Improvement Plan, Commencement of Construction of such Capital Improvements shall begin
no later than the end of the sixth (6th) month of the fourth (4th) year after the Commencement
Date of the Initial Term (or current Option period, in the case of exercise of the second or third
Option). "Commencement of Construction" means (i) to commence the work of constructing the
Capital Improvements or features with all approvals thereof required by applicable governmental
authorities obtained as necessary; (ii) a notice to proceed has been issued to the contractor;
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and (iii) onsite construction of the site development components (such as drainage, extensive
grading or utilities) is underway and being pursued.
As security for full and faithful Completion of such Capital Improvements required for
each Option, before the end of the thirtieth (30th) month after the Commencement Date of the
Term (or current Option period, in the case of exercise of the second or third Option), Lessee
must furnish to the Aviation Director a performance bond or irrevocable standby letter of credit
in the face amount of the agreed upon budget for the Capital Improvement Plan referenced
above, but in no event less than One Million One Hundred Thousand dollars ($1,100,000),
issued by a surety company authorized and licensed to transact business in the State of Texas,
with the City of Corpus Christi Aviation Department as obligee, not subject to reduction or
cancellation except after thirty (30) days' written notice by certified mail, return receipt
requested, to the Aviation Director. Said performance bond or irrevocable standby letter of credit
shall be kept in force until Completion of the above-referenced Capital Improvement.
"Completion" means issuance of Certificates of Occupancy for the Capital Improvement(s) have
been issued or a determination by an engineering or architectural firm that the Capital
Improvement Plan is substantially complete and Lessee may safely use and occupy the
improvements.
Upon Lessor's request, Lessee shall provide documentation such as invoices, contracts,
proof of payment, and other records satisfactory to the Aviation Director as evidence of
expenditure towards Capital Improvement Plan.
Only in the event that this Lease is terminated by the City prior to the end of an
exercised Option without fault or default on the part of Lessee and (i) other than as a result of
the lawful assumption by the United States Government or any authorized agency thereof of the
operation, control or use of the Leased Premises that substantially restricts Lessee from
operating thereon; or (ii) other than as a result of the issuance by any court of competent
jurisdiction of an injunction that prevents or restrains the use of the Leased Premises that
prevents Lessee from operating thereon, the total Direct Construction Costs for the approved
Capital Improvement Plan associated with said Option shall be amortized on a straight line
basis over the term of that Option and a payment issued by the City to the Lessee for the
unamortized amount of the Direct Construction Costs for the approved Capital Improvement
Plan for the remaining balance of that Option term, with payment to be made within sixty (60)
days of such termination. If the Lease is terminated as a result of a Lessee default as stated in
Section 24 of this Lease or for any reason other than that stated in the immediately preceding
sentence herein, no reimbursement of Direct Construction Costs will be made and Lessee
forfeits the full investment to the City.
The budget for the Capital Improvement Plan required to exercise an Option, as
described in this Section 5.02, shall be in addition to the deferred maintenance and other
maintenance required in Article 15 herein.
The performance bond or irrevocable standby letter of credit required to exercise an
Option, as described in this Section 5.02, shall be in addition to the performance guarantee
required in Article 8 herein.
ARTICLE 6. INDEMNIFICATION
6.01 LESSEE covenants and agrees to FULLY INDEMNIFY, DEFEND and HOLD
HARMLESS, the CITY and the elected officials, employees, officers, directors, volunteers and
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representatives of the CITY, individually and collectively, from and against any and all costs,
claims, liens, damages, losses, expenses, fees, fines, penalties, proceedings, actions,
demands, causes of action, liability and suits of any kind and nature, including but not limited to,
personal or bodily injury, death and property damage, made upon the CITY directly or indirectly
arising out of, resulting from or related to LESSEE's use or occupancy of the Lease Premises
under this LEASE, including any acts or omissions of LESSEE, any agent, officer, director,
representative, employee, consultant, sub lessee, assignee or subcontractor of LESSEE, and
their respective officers, agents, employees, directors and representatives while in the exercise
of performance of the rights or duties under this LEASE, all without however, the City waiving
any governmental immunity available to the CITY under Texas Law and without waiving any
defenses of the parties under Texas Law. IT IS FURTHER COVENANTED AND AGREED
THAT SUCH INDEMNITY SHALL APPLY EVEN WHERE SUCH COSTS, CLAIMS, LIENS,
DAMAGES, LOSSES, EXPENSES, FEES, FINES, PENALTIES, ACTIONS, DEMANDS,
CAUSES OF ACTION, LIABILITY AND/OR SUITS ARISE IN ANY PART FROM THE
NEGLIGENCE OF CITY, THE ELECTED OFFICIALS, EMPLOYEES, OFFICERS,
DIRECTORS AND REPRESENTATIVES OF CITY, UNDER THIS LEASE. The provisions of
this INDEMNITY are solely for the benefit of the parties hereto and not intended to create or
grant any rights, contractual or otherwise, to any other person or entity. LESSEE and the CITY
shall promptly advise the other party in writing of any claim or demand against the CITY or
LESSEE which is made known to the disclosing party related to or arising out of LESSEE's
activities under this LEASE and LESSEE shall see to the investigation and defense of such
claim or demand at LESSEE's cost. The CITY shall have the right, at its option and at its own
expense, to participate in such defense without relieving LESSEE of any of its obligations under
this paragraph.
6.02 It is the EXPRESS INTENT of the parties to this LEASE, that the INDEMNITY provided
for in this Article 6, is an INDEMNITY extended by LESSEE to INDEMNIFY, PROTECT and
HOLD HARMLESS, the CITY from the consequences of the CITY's OWN NEGLIGENCE,
provided however, that the INDEMNITY provided for in this Article SHALL APPLY only when
the NEGLIGENT ACT of the CITY is a CONTRIBUTORY CAUSE of the resultant injury, death,
or damage, and shall have no application when the negligent act of the CITY is the sole cause
of the resultant injury, death, or damage. LESSEE further AGREES TO INVESTIGATE,
SETTLE, AND DEFEND, AT ITS OWN EXPENSE and ON BEHALF OF THE CITY AND IN
THE NAME OF THE CITY, with counsel reasonably satisfactory to the CITY, any claim or
litigation brought against the CITY and its elected officials, employees, officers, directors,
volunteers and representatives, in connection with any such injury, death, or damage for which
this INDEMNITY shall apply, as set forth above.
6.03 NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY CONSEQUENTIAL,
INDIRECT, SPECIAL OR PUNITIVE DAMAGES ARISING OUT OF THE PERFORMANCE OF
THIS AGREEMENT.
ARTICLE 7. INSURANCE
7.01 General Requirements. Lessee shall not commence use or occupancy of the Leased
Premises until Lessee has obtained the types and amounts of required insurance as indicated
below and until such insurance has been reviewed by the City and a Certificate of Insurance is
received indicating required coverage. If the coverage period ends prior to the end of the Term
of this Lease, including any extensions thereof, Lessee must, prior to the end of the coverage
period, forward a new Certificate of Insurance to City as verification of continuing coverage for
the duration of the Term of this Lease. Lessee must submit certificates of insurance for all sub
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lessees, assignees and subcontractors to the City prior to commencing work.
Lessee and all sub lessees', assignees' and subcontractors' insurance coverage shall be written
by companies licensed to do business in the State of Texas at the time the policy is issued and
shall be written by companies with an A.M. Best rating of A-VII or better. Hazardous materials
insurance, if required, shall be written by companies with an A.M. Best rating of A-VII or better.
Lessee, sub lessees, assignees and subcontractors must obtain workers' compensation
coverage through a licensed insurance company in accordance with Texas law. The contract for
coverage must be written on a policy and with endorsements approved by the Texas
Department of Insurance. The coverage provided must be in amounts sufficient to assure that
all workers' compensation obligations incurred by the Operation will be promptly met.
The following conditions apply:
(a) Approval of insurance by City and the required minimums shall not relieve or
decrease the liability or responsibility of the Lessee hereunder and shall not be construed to be
a limitation of liability on the part of the Lessee.
(b) The Lessee, sub lessees, assignees and subcontractors must obtain and
maintain in force insurance at all times during the Term of this Lease.
(c) All endorsements naming the City as additional insured, waivers of subrogation,
and notices of cancellation, endorsements, as well as Certificates of Insurance shall indicate:
City of Corpus Christi
Department of Aviation
1000 International Drive
Corpus Christi, Texas 78406
Attn: Director of Financial Services
A copy of the insurance certificate shall be provided to the City's Risk Management
Division.
(d) It is intended that Policies required in the Minimum Standards, which may be
amended from time to time, covering the City and Lessee shall be considered primary and non-
contributory coverage, as applicable.
(e) If insurance policies are not written for the amounts specified below, the Lessee,
sub lessees, assignees and subcontractors shall carry Umbrella or Excess Liability Insurance
for any differences in amounts specified. If Excess Liability Insurance is provided, it shall follow
the form of the Primary Coverage.
(f) The City shall be entitled, upon request and without expense, to receive certified
copies of policies and endorsements thereto.
(g) The City reserves the right to review insurance requirements set forth during the
term of a Lease and to make reasonable adjustments to required types of insurance coverage,
limits, and exclusions when deemed necessary and prudent by the City based upon changes in
statutory law, court decisions, the claims history of the industry or financial considerations of the
insurance company as well as the Lessee, sub lessees, assignees and subcontractors.
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(h) The Lessee, sub lessees, assignees and subcontractors shall not cause any
insurance to be cancelled or permit any insurance to lapse during the Term of a Lease or as
required in the Lease.
(i) The Lessee, sub lessees, assignees and subcontractors shall provide all
deductibles and self-insured retentions, if any, stated in the policies. All deductibles and self-
insured retentions shall be disclosed on the Certificates of Insurance.
(j) Liability Insurance provided by the Lessee, sub lessees, assignees and
subcontractors pursuant to the Minimum Standards shall cover and protect the City, its officials,
officers, agents, Personnel, contractors, successors, and assigns, as their interests may appear.
(k) The Lessee, sub lessees, assignees and subcontractors are responsible for
insuring their own interest.
7.02 Specific Insurance Requirements. The Lessee, sub lessees, assignees and
subcontractors shall obtain, and maintain throughout the Term of this Lease, the following
insurance coverages and furnish certificates of insurance and policy endorsements as evidence
thereof:
(a) Workers' Compensation and Employers Liability coverage with limits consistent
with statutory benefits outlined in the Texas Workers' Compensation Act (Section 401) and
minimum policy limits for employers liability of $1,000,000 bodily injury each accident,
$1,000,000 bodily injury by disease policy limit and $1,000,000 bodily injury by disease each
Personnel. The following endorsements shall be added to the policy:
(i) A Waiver of Subrogation in favor of the City of Corpus Christi;
(ii) A thirty (30) day written notice of Cancellation/Material Change in favor of
the City.
(b) Property insurance coverage on an "All Risk of Physical Loss" form for 100% of
the replacement value of all improvements constructed by or for Lessee on the Leased
Premises. Coverage shall include, but not be limited to fire, wind, hail, theft, vandalism, and
malicious mischief. The coverage shall be written on a replacement cost basis. The proceeds
from such insurance shall be used to restore the improvements to their original condition in the
event of a covered loss. Lessee is responsible for insuring their own interests. Lessee is
responsible for deductibles for any loss not arising from an act of nature.
(c) Liability insurance in the specific types and amounts specified in section 7.03
below as applicable for the proposed Commercial Aeronautical Service Operator, as defined in
the Minimum Standards, as may be amended from time to time.
(i) All Commercial General Liability Insurance policies shall contain:
(1) Waiver of Subrogation in favor of the City of Corpus Christi.
(2) Thirty (30) day written notice of Cancellation in favor of the City of
Corpus Christi.
(3) City of Corpus Christi listed as additional insured, form CG 2010,
or its equivalent.
(4) Independent Contractors coverage.
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(5) Blanket contractual liability coverage for liability assumed under
the Lease or Permit.
(6) Damage to Premises Rented to you in an amount not less than
$250,000.
(7) Medical Expense coverage with a limit of$5,000 any one person.
(c) Environmental site Liability to include remediation and spill / leakage clean-up
with minimum limits of $2,000,000 each incident/ $2,000,000 policy aggregate limit issued on a
claims made policy with extended reporting coverage of 24 months.
7.03 Lessee Requirements.
Environmental Commercial ,
Aircraft
Impairment General Liability
Liability i Liability 1 L
(Bodily Injury
(Broad Form t (Bodily Injury t Completed ' Hangar and Property k Non Owned
Pollution Liability i and Property 1 Operations Keepers Damage/ Aircraft
Coverage/Third , Damage/
party Clean up. Personal and ° including
AST/UST : Advertising Passengers
t
coverage) Injury)
$2MM each
incident— limit r
/$2MM policy
aggregate; if
claims made 't $10MM / $10MM /
policy needs $10MM $10,000,000 $2,000,000 $10MM $10MM
twenty four (24)
month extension t
period post I
termination date
7.04 Motor Vehicle Requirements. For vehicles operated in the AOA the following conditions
apply:
(a) Business Automobile Liability Insurance for all owned, non-owned, and hired
vehicles with a minimum combined single limit of $5,000,000 for bodily injury and property
damage.
(b) City of Corpus Christi named as additional insured, Form TE 9901 B.
(c) Thirty (30) day written Notice of Cancellation in favor of the City of Corpus
Christi, form TE 0202A.
ARTICLE 8. PERFORMANCE GUARANTEE & LANDLORDS LIEN
8.01 Lessee shall deliver to the City, on or before the Commencement Date of this Lease, but
at a minimum must show written evidence of performance guarantee commitment no later than
the date of execution of this Lease, and shall keep in force throughout the Term hereof, an
Atlantic FBO Lease 8-27-13 FINAL Page 11 of 36
irrevocable standby letter of credit ("ISLC") in favor of Lessor, drawn upon a bank satisfactory to
Lessor and payable to City of Corpus Christi, Aviation Department. The foregoing shall be in a
form and content satisfactory to Lessor, shall be conditioned upon satisfactory performance of
all terms, conditions and covenants, including maintenance requirements, contained herein
during the Term hereof and shall stand as security for payment by Lessee of all amounts due by
Lessee as a result of valid declarations of uncured default, as set forth herein, asserted by
Lessor. The amount of the ISLC shall be adjusted, as necessary, so that it shall at all times
equal at least one (1) year of the total estimated annual rentals, fees and charges payable by
Lessee to Lessor hereunder. The ISLC shall not be subject to reduction in coverage or
cancellation. If the available balance on the ISLC falls below the amount required herein, Lessor
agrees to replenish it to the full required amount within seven (7) days of it falling below the full
required amount. Failure to replenish the ISLC as stated herein constitutes default of the Lease.
The surety on the ISLC must, by appropriate notation thereon, stipulate and agree that no
change, extension of time, alteration or addition to the terms of this Lease in any way affects its
obligations under the ISLC and consents to waive notice of any such matters.
8.02 Lessee hereby gives to Lessor a lien upon all of its property now, or at any time
hereafter, in or upon the Leased Premises, to secure the prompt payment of charges herein
stipulated to be paid for the use of said Premises; all exemptions of such property, or any of it,
being hereby waived.
In the event that the amount of the performance guarantee provided by Lessee under the terms
of this Lease, at all times during the term hereof, shall equal the greater of the rents, fees and
charges payable by Lessee to Lessor for the current calendar year, or double the amount of the
performance guarantee set forth in Section 8.01 above, then the provisions set forth in Section
8.02 above, shall not apply hereto.
8.03 The performance guarantee required in Article 8 herein shall be in addition to the
performance bond or irrevocable standby letter of credit required to exercise the Option, as
described in Section 5.02 herein.
ARTICLE 9. MINIMUM STANDARDS
Lessor has adopted Minimum Standards ("Minimum Standards") and Rules and Regulations
("Rules and Regulations"), which shall govern Lessee in the use of the Leased Premises and all
common facilities, a copy of each of which has been furnished to Lessee and are incorporated
herein by reference. Lessee agrees to comply fully at all times with these governing documents.
Lessor, in its sole discretion, shall have the right to amend, modify and alter these Minimum
Standards and Rules and Regulations from time to time in a reasonable manner or may
introduce other regulations as deemed necessary for the purpose of assuring the safety,
welfare, convenience and protection of property of Lessor, Lessee and all other tenants and
customers of the Airport; provided, however, that Lessor shall give Lessee reasonable advance
notice of any such amendments, modifications or alteration of the Minimum Standards and/or
Rules and Regulations.
ARTICLE 10. FEES AND CHARGES
10.01 Fees and Charges.
(a) Fuel flowage fees shall be paid by Lessee to the Lessor for all fuel delivered to
the Leased Premises for dispensal by the Lessee to all categories of customers except any
Atlantic FBO Lease 8-27-13 FINAL Page 12 of 36
signatory airline paying a landing fee at the Airport, in the amount per gallon, subject to
atmospheric adjustments, now or hereafter set by the Aviation Director, as may be adjusted
periodically. The fees and charges in effect as of the Commencement Date of this Lease are set
forth in EXHIBIT 5 attached hereto. Lessee agrees to keep accurate books, records and
accounts of its purchase and sale of aircraft fuel delivered to its customers on the Airport
premises. Lessee agrees to remit to the Aviation Director payment and related delivery tickets
provided by the various suppliers as to the amount of aircraft fuel delivered to the Leased
Premises, by the 10th day of the month following such delivery. If no such delivery is made
during a particular month, Lessee shall provide the Aviation Director with a written statement to
that effect.
(b) Any City controlled ramp related uses by Lessee that are not included in the
Leased Premises shall be for public use and subject to a Ramp Fee, as set forth in EXHIBIT 5
attached hereto. The Ramp Fee shall be set annually by the City for use of City controlled ramp.
Lessee or sub lessee shall remit to the City seventy-five percent (75%) of all revenues received
for use of City controlled ramp or equivalent charges within ten (10) days following the end of
the month in which the ramp was utilized, accompanied by an accounting of all City controlled
ramp rental activity. Lessee shall retain the remaining twenty-five percent (25%) of such
revenues as consideration for Lessee's management of said City controlled ramp rental and
collection of resulting revenues. The City retains the right to enter upon City controlled ramp at
any time and to take an inventory of any aircraft parked on the City controlled ramp, as well as a
right to audit Lessee's or sub lessee's accounting of City controlled ramp rental activity. Lessee
or sub lessee cannot charge any fees for use of the City controlled ramp other than the Ramp
Fee set by the City for use of City controlled ramp and cannot waive any fees set by the City
and due to the City for use of City controlled ramp without City's written approval.
(c) Fees and charges for miscellaneous items and services provided by the City,
including, but not limited to, employee badges, shall be assessed by the City in connection with
the ordinary usage of Airport facilities (hereafter "City Fees," set forth in EXHIBIT 5 attached
hereto).
(d) All rentals, fees and charges payable by Lessee to Lessor under the terms
hereof, whether or not expressly denominated as rent, shall constitute rent for all purposes,
including, but not limited to, purposes of the United States Bankruptcy Code.
(e) For those services or functions listed in EXHIBIT 5 attached hereto, Lessee
cannot charge fees to their customers that are in excess of the applicable fees and charges that
are approved by the City, as amended from time to time, set forth in EXHIBIT 5 attached hereto.
10.02 Proceeds Rent.
(a) Lessee covenants and agrees to pay as additional Rent hereunder an amount
equal to three percent (3%) of any Gross Proceeds (as hereinafter defined) from a Sale (as
hereinafter defined) of the Lessee's Leasehold Interest in the Leased Premises, or any portion
thereof, as the case may be, at the times and in the manner hereinafter set forth (the "Proceeds
Rent"). This section 10.02 applies only to the sale of Lessee's Leasehold Interest in the Leased
Premises, or any portion thereof, at Corpus Christi International Airport and no other location.
(b) Payments of the Proceeds Rent shall be paid immediately upon a Sale as
follows: upon the Closing and payment of the total purchase price in a Sale, accompanied by a
certificate of the chief financial officer of the Lessee as to the amount of Gross Proceeds of the
Atlantic FBO Lease 8-27-13 FINAL Page 13 of 36
Sale. At the election of the City, the City and the Lessee shall coordinate payment of the
Proceeds Rent through an escrow.
(c) Lessee shall, at the time of any such Sale, deliver to the City a statement
certifying the amount of the Gross Proceeds for such Sale and the amount of the Proceeds Rent
due and payable to the City. Such statement shall set forth in detail reasonably satisfactory to
the City the computation of Gross Proceeds, and Proceeds Rent therefor, together with such
other information as the City may deem reasonably necessary for the determination of the
Proceeds Rent, such as the purchase agreement and/or sale closing statement. Except for such
changes as are necessary to calculate the Gross Proceeds from the Sale, the statements
required above shall be prepared in accordance with generally accepted accounting principles
on the accrual basis consistently applied and otherwise in such manner as the City shall have
approved in writing.
(d) For purposes of this Section, capitalized terms set forth below shall have the
meanings ascribed to them below:
"Beneficial Interest" shall mean the interest of the Beneficiary in any trust of
which it is beneficiary, if the Lessee is ever a land trust.
"Beneficiary" shall mean the Beneficiary under a trust which at any time the
Lessee is a trustee under a land trust.
"Gross Proceeds" shall mean the purchase price in a Sale (including, without
limitation, (1) the principal and interest of any financing to which the Sale is subject or which is
assumed by the Lessee and (2) the fair market value of any consideration consisting of property
other than cash).
"Leasehold Interest" shall mean the Lease between the City and Lessee and all
resulting income streams and contracts resulting from Lessee's use of the Leased Premises, as
defined herein.
"Sale" shall mean (i) a sale, assignment, transfer or other conveyance of any
portion of Lessee's interest under this Lease (including an assumption and assignment of the
Lease by Lessee as debtor or debtor in possession or by a trustee in bankruptcy acting on
behalf of Lessee) and/or in the Leased Premises or any portion of the Leased Premises; (ii)
execution and delivery of a contract to convey any portion of Lessee's interest under this Lease
upon payment of part or all of the purchase price which is accompanied by a transfer of
possession and the risks and benefits of ownership to the purchaser; (iii) a taking by eminent
domain of any portion of Lessee's interest under this Lease; (iv) a transaction or series of
related transactions involving Lessee which has the economic equivalence to the owners of
interests in Lessee as a transaction described as a Sale, regardless of the form of such
transaction, whether by sales of direct or indirect interests in Lessee (including, without
limitation, sales or other transfer of any membership interests in Lessee or in any constituent
members of Lessee or in any corporate stock, partnership interests or Beneficial Interests in any
future tenant organized as a corporation, partnership or trust, respectively, or in any constituent
shareholders, partners or Beneficiaries thereof) or sales of assets by an entity which owns
Lessee's interest under this Lease and other property.
Atlantic FBO Lease 8-27-13 FINAL Page 14 of 36
(e) The City shall not, as a result of the rights granted herein to receive Proceeds
Rent, be considered as a co-owner, co-partner or co-adventurer with Lessee in the Leased
Premises.
(f) The Lessee shall not be required to pay Proceeds Rent on its receipt of proceeds
from business interruption or loss of rents insurance payments.
ARTICLE 11. PRIVILEGES AND CONDITIONS
11.01 Lessor hereby grants to Lessee and any assignees and/or sub lessees pursuant to
Article 26 herein, the following general, non-exclusive privileges, uses and rights, subject to the
terms, conditions and covenants herein set forth:
(a) The general use by Lessee, for commercial aviation activities, of all common
aircraft facilities and improvements, which are now, or may hereafter be, connected with or
appurtenant to said Airport, except as hereinafter provided. "Common airport facilities" shall
include all necessary landing area appurtenances, including, but not limited to, approach areas,
runways, taxiways, unleased aprons provided for in 10.01(b) of this Lease, public roadways,
sidewalks, navigational and aviation aids, the airfield lighting facilities, terminal facilities or other
common or public facilities appurtenant to said Airport.
(b) The right of ingress to and egress from the Leased Premises, over and across
common or public roadways serving the Airport for Lessee and sub lessees, its agents,
contractors, employees, patrons, invitees, suppliers of service and furnishers of material. Said
right shall be subject to such ordinances, rules and regulations as now, or may hereafter, apply
at the Airport.
(c) Lessee must remain in compliance at all times with all FAA, Department of
Homeland Security and all other governmental organizations with jurisdiction over the Airport as
well as all rules, laws and regulations as may be amended from time to time.
11.02 The granting and acceptance of this Lease is conditioned upon compliance with the
covenant that the right to use said common Airport facilities, in common with others so
authorized, shall be exercised subject to and in accordance with the laws of the United States,
State of Texas and City of Corpus Christi, the rules and regulations promulgated by their
authority with reference to aviation and navigation, and all reasonable and applicable rules,
regulations and ordinances of Lessor, now in force or hereafter prescribed or promulgated by
charter authority or by law, as may be amended from time to time.
11.03 Lessor reserves the right to enter the Leased Premises at any reasonable time for the
purpose of inspecting same or verifying that fire, safety, sanitation regulations and other
provisions contained in this Lease are being adhered to by Lessee.
ARTICLE 12. AS IS ACCEPTANCE AND CONDITION OF PREMISES
12.01 The parties agree that this Lease is granted by Lessor, at Lessee's request, and that the
Leased Premises were formerly and presently are leased to and occupied by Lessee, with the
exception of Hangar 4, which specifically is excluded from the Leased Premises as of the
Commencement Date of this Lease.
Atlantic FBO Lease 8-27-13 FINAL Page 15 of 36
12.02 Lessee has had full opportunity to examine the Leased Premises and to review the
structural report prepared by engineering firm PGAL, dated November, 2010, attached hereto
as EXHIBIT 3 and incorporated into this Lease. Except for environmental matters not caused by
or reasonably discoverable by Lessee prior to the commencement of this Lease, Lessee's
taking possession of the Leased Premises shall be conclusive evidence of Lessee's acceptance
thereof in an "AS IS" condition, and Lessee hereby accepts same in its present condition as
suitable for the purpose for which leased, with the exception of Hangar 4, which specifically is
excluded from the Leased Premises as of the Commencement Date of this Lease.
12.03 Lessee agrees that no representations respecting the condition of the Leased Premises
and no promises to improve same, either before or after the execution hereof, have been made
by Lessor or its agents to Lessee, unless contained herein or made a part hereof by specific
reference.
ARTICLE 13. CONSTRUCTION/CAPITAL IMPROVEMENT BY LESSEE
13.01 Lessee shall have the right to erect, alter, remodel and renovate buildings and make
other improvements as Capital Improvements on the Leased Premises, provided that it shall
submit to the Aviation Director plans and specifications prepared by registered architects and
engineers setting forth the renovations, construction, alterations or improvements that Lessee
desires to perform, in such detail as may be required by the Aviation Director, and provided that
approval of such plans and specifications by said Director is obtained as set forth below. In
addition to the requirements herein, approval of any Capital Improvement Plan shall be pursuant
to section 5.02 herein.
13.02 Lessor agrees to examine and approve or disapprove plans and specifications submitted
in accordance with the provisions above, within thirty (30) business days after receipt thereof,
and to give Lessee written notification of same. The approval by Lessor of such plans and
specifications refers only to the conformity of same to the general architectural plan for the
Leased Premises, as opposed to their architectural or engineering design. Lessor, by giving its
approval, assumes no liability or responsibility therefor or for any defect in any work performed
according to such plans and specifications. Lessee agrees not to commence any renovations,
construction, alterations or improvements until Lessor, through the Aviation Director, has given
written approval regarding Lessee's plans and specifications.
13.03 Further, prior to the commencement of any construction, Lessee shall procure any and
all additional approvals of the plans and specifications for its buildings and improvements
required by any federal, state or municipal authorities, agencies, officers and departments
having jurisdiction thereof and shall obtain any and all requisite building or construction licenses,
permits or approvals. Construction shall comply with applicable building code requirements and
with applicable regulations promulgated by any federal, state or municipal agency or department
having jurisdiction thereof. Lessee specifically agrees that it shall hold Lessor completely
harmless from and against any and all claims, causes of action or liabilities, whether actual or
potential, associated with any construction undertaken by Lessee hereunder.
13.04 The cost of any renovations, construction, alterations or improvements upon the Leased
Premises shall be borne and paid for solely by Lessee. Except as may be otherwise set forth
herein, Lessor has no financial or other obligation of any kind under this Lease, other than the
renting to Lessee of the Leased Premises which are the subject hereof for the term and
consideration hereinbefore set forth.
Atlantic FBO Lease 8-27-13 FINAL Page 16 of 36
13.05 Upon completion of all renovations, construction, alterations or improvements, a
conformed set of "as built" plans and a Certificate of Occupancy shall be provided by Lessee to
the Aviation Director.
13.06 In undertaking any such renovations, construction, alterations or improvements, it is
expressly understood that, where applicable, unless otherwise agreed to in writing by the
parties, Lessee shall be responsible, at its sole expense, for any and all construction and
maintenance of taxiways and connections to the Airport's runway and taxiway system, along an
alignment and in accordance with designs and plans approved in advance, in writing, by the
Aviation Director. It is further expressly understood and agreed that any improvements and
access thereto constructed by Lessee on the Leased Premises shall be performed in such a
manner that shall not cause flowage of surface drainage onto adjacent tracts or interrupt flow to
the storm drainage system.
13.07 Any construction of a Capital Improvement pursuant to this Article 13 may, at the option
of the Lessee be considered part of a Capital Improvement Plan and subject to the review and
approval procedures in Article 5 hereof.
ARTICLE 14. LIENS PROHIBITED
14.01 Lessee shall not suffer or permit any mechanics' or other liens to be filed against the fee
of the Leased Premises, or against Lessee's leasehold interest in the land, buildings or
improvements thereon, by reason of any work, labor, services or materials supplied, or claimed
to have been supplied, to Lessee or to anyone holding the Leased Premises, or any part
thereof, through or under Lessee.
14.02 If any such mechanics' lien or materialmen's lien described in Section 14.01 above shall
be recorded against the Leased Premises, or any improvements thereon, Lessee shall cause
the same to be removed or, bonded around pursuant to the terms of the Texas Property Code.
In the alternative, if Lessee, in good faith, desires to contest the same, it shall be privileged to
do so; however, in such case, Lessee hereby agrees to indemnify and save Lessor harmless
from all liability for damages occasioned thereby and shall, in the event of a judgment of
foreclosure on said mechanics' lien, cause the same to be discharged and removed prior to sale
of the property or execution of such judgment.
ARTICLE 15. MAINTENANCE AND REPAIR
15.01 Lessee shall pay or cause to be paid any and all charges for water, heat, gas, electricity,
sewer and any and all other utilities used on the Leased Premises, throughout the term of this
Lease, including, but not limited to, any connection fees and any and all additional costs related
to utility connection, metering, maintenance, repair and usage.
15.02 Deferred Maintenance. Lessee shall complete all deferred Maintenance items identified
on EXHIBIT 4 , attached hereto and incorporated into this Lease ("Deferred Maintenance"), no
later than eighteen (18) months from the Commencement Date of this Lease. In this respect, as
a point of reference, Lessee shall refer to the structural report prepared by PGAL, dated
November, 2010, attached hereto as EXHIBIT 3 and incorporated into this Lease, which shall
be considered the base condition of the Leased Premises from which Deferred Maintenance
requirements shall be measured.
Atlantic FBO Lease 8-27-13 FINAL Page 17 of 36
The Aviation Director shall have thirty (30) calendar days after Lessee's completion of all
Deferred Maintenance items to object to any deficiencies thereof. If the Aviation Director does
not object in writing within such 30-day period, Lessor shall be deemed to have approved such
Deferred Maintenance. If, however, the Aviation Director objects within such 30-day period in
writing as to any deficiencies of the Deferred Maintenance completed, the Aviation Director and
Lessee agree to work together in good faith to resolve any such objections to the reasonable
satisfaction of both parties.
Deferred Maintenance completed pursuant to this Section 15.02 is in addition to the
repair and maintenance required in Sections 15.01, 15.03 and 15.04 herein.
15.03 In addition to the Deferred Maintenance required in Section 15.02 above, except as may
be otherwise provided herein, Lessee shall, throughout the term of this Lease, assume the
entire responsibility, cost and expense for all repair and Maintenance of the Leased Premises
and all buildings and improvements thereon, whether such repair or Maintenance be ordinary,
extraordinary, structural or otherwise, normal wear and tear excepted. In this respect, as a point
of reference, Lessee shall refer to the structural report prepared by PGAL, dated November,
2010, attached hereto as EXHIBIT 3 and incorporated into this Lease, which shall be
considered the base condition of the Leased Premises from which any needed repairs shall be
measured. Additionally, without limiting the foregoing, Lessee shall:
(a) at all times maintain the buildings and improvements in a good state of repair and
preservation, excepting ordinary wear and tear and obsolescence in spite of repair; and
(b) replace or substitute any fixtures and equipment which have become inadequate,
obsolete, worn out, or unsuitable, with replacement or substitute fixtures and equipment, free of
all liens and encumbrances, which shall automatically become a part of the buildings and
improvements and revert to City ownership at termination of this Lease, as provided for herein;
and
(c) at all times keep the Leased Premises, its buildings, improvements, fixtures,
equipment and personal property, in a clean and orderly condition and appearance; and
(d) provide, and maintain in good working order, all obstruction lights and similar
devices, fire protection and safety equipment, and all other equipment of every kind and nature
required by applicable laws, rules, orders, ordinances, resolutions or regulations of any
competent authority, including Lessor and Aviation Director; and
(e) observe all insurance regulations and requirements as required in Article 7 herein
concerning the use and condition of the Leased Premises, for the purpose of reducing fire
hazards and insurance rates on the Airport; and
(f) repair any damage caused by Lessee to paving or other surfaces of the Leased
Premises or the Airport, in connection with the scope of the Lease, caused by any oil, gasoline,
grease, lubricants, flammable liquids and/or substances having a corrosive or detrimental effect
thereon, or by any other reason whatsoever; and
(g) take measures to prevent erosion, including, but not limited to, the planting and
replanting of grass on all unpaved or undeveloped portions of the Leased Premises; the
planting, maintaining and replanting of any landscaped areas; the designing and constructing of
Atlantic FBO Lease 8-27-13 FINAL Page 18 of 36
improvements on the Leased Premises; and the preservation of as many trees as possible,
consistent with Lessee's construction and operations; and
(h) be responsible for the maintenance and repair of all utility services lines serving
the Leased Premises, including, but not limited to, water and gas lines, electrical power and
telephone conduits and lines, sanitary sewers and storm sewers; and
(i) keep and maintain all vehicles and equipment operated by Lessee on the Airport
in safe condition, good repair, properly licensed and insured, as required by this Lease; and
(j) replace broken or cracked plate glass, repair roofing material as needed,
paint/repaint structures upon the Leased Premises and, where applicable, mow the grass; and
(k) provide and use suitable covered metal receptacles for all garbage, trash and
other refuse; assure that boxes, cartons, barrels or similar items are not piled in an unsightly,
unsafe manner, on or about the Leased Premises; promptly collect and remove all trash and
foreign materials from parking lots and Leased Premises; provide a complete and proper
arrangement, satisfactory to the Aviation Director, for the adequate sanitary handling and
disposal (away from the Airport), of all trash, garbage and refuse generated as a result of the
operation of Lessee's business;
(I) at the expiration or termination of this Lease, deliver the Leased Premises to
Lessor clean and free of trash and in good repair and condition, with all fixtures and equipment
situated in the Leased Premises in good working order, reasonable wear and tear excepted;
and
(m) within five (5) calendar days of receipt of Lessor's written request, Lessee shall
provide documentation such as invoices, contracts, proof of payment and other records
satisfactory to the Aviation Director as evidence of performance of major Maintenance.
15.04 Following consultation with Lessee, the adequacy of the performance of the foregoing
Maintenance and repair by Lessee shall be determined by the Aviation Director, whose
reasonably exercised judgment shall be conclusive. No more than thirty (30) days after
determining the inadequacy of such Maintenance or repair, the Aviation Director shall provide
Lessee a written request that Lessee remedy such inadequate Maintenance or repair. Should
Lessee fail to undertake any such Maintenance or repair within ten (10) days of receiving written
notice from the Aviation Director, or if Lessor performs any Maintenance or repair on behalf of
and for Lessee necessitated by Lessee's failure to start or complete Maintenance or repairs,
then the costs of such Maintenance or repair, plus any associated overhead reasonably
determined by Lessor, plus a 15% administrative fee, shall be reimbursed by Lessee to Lessor
no later than ten (10) days following receipt by Lessee of written demand from Lessor for same.
In cases not involving Maintenance or repair requiring exigent action, Lessor shall provide
Lessee a written request that Lessee perform such Maintenance or repair, at least thirty (30)
days before Lessor affects such Maintenance or repair on behalf of Lessee.
15.05 Any Maintenance or repair performed pursuant to this Article 15 will not be part of a
Capital Improvement plan.
15.06 The Capital Investment required to exercise an Option, as described in Section 5.02,
shall be in addition to the Deferred Maintenance and other Maintenance required in Article 15
herein.
Atlantic FBO Lease 8-27-13 FINAL Page 19 of 36
ARTICLE 16. TITLE
16.01 It is expressly understood and agreed that any and all fixtures, furniture, equipment, and
improvements that may be reasonably removed, placed or maintained by Lessee in the Leased
Premises during the Term hereof shall be and remain Lessee's property, and the Leased
Premises returned to its original condition at the sole expense of Lessee, normal wear and tear
excepted. Provided that Lessee is not in default under this Lease, it may remove or cause to be
removed all such items from the Leased Premises, with any damage caused by such removal
repaired at the Lessee's sole expense. At Lessor's sole election, any such items remaining on
the Leased Premises more than ten (10) days after the expiration or termination of the term
hereof, shall then belong to Lessor without payment of consideration therefor.
16.02 Unless otherwise provided, all foundations, buildings, alterations, additions or
improvements ("Improvements") made upon the Leased Premises by Lessee are and shall be
the property of Lessee during the Term hereof. During said Term, absent the Aviation Director's
written approval, such Improvements shall be conveyed, transferred or assigned, only to a
person or entity to whom this Lease is being transferred or assigned, whereupon such
Improvements shall become the property of the holder of the leasehold interest hereunder.
Absent such written approval of the Director any attempted conveyance, transfer or assignment
of Improvements, to any person or entity, whether voluntary, by operation of law or otherwise,
shall be void and of no effect.
16.03 Title to Improvements made upon the Leased Premises by Lessee, and fixtures annexed
thereto, shall vest in and become the property of Lessor, at no cost to Lessor and without any
instrument of conveyance, upon the expiration of the Term of this Lease or upon earlier
termination thereof. Notwithstanding the foregoing, Lessee covenants and agrees, upon
Lessor's demand, on or after termination of the Lease, to execute any instruments requested by
Lessor in connection with the conveyance of such Improvements. Lessor shall notify Lessee
whether or not Lessor intends take title to Improvements, or any portion thereof, as herein
provided, at least sixty (60) days prior to the expiration of the Term of this Lease or earlier
termination thereof. Lessor's failure to provide such notice, however, shall not act as a waiver of
its rights hereunder; provided that Lessor, within a reasonable time after receipt of Lessee's
written request, advises Lessee of its election hereunder. No obligations under this section
herein are waived by the termination of this Lease.
16.04 Should Lessor elect not to take title to Improvements, or any portion thereof, as provided
in Section 16.03 above, same shall be removed by Lessee, at its sole cost and risk, no later
than midnight of the expiration or termination date of the Lease, in compliance with all
applicable laws and regulations and, to the degree reasonably possible, the Leased Premises
shall be restored to the condition that existed prior to the construction of same, provided
however, that Lessee shall not be required to demolish or remove any building, structure or
improvement that was the subject of a Capital Improvement Plan. Should Lessee fail to
undertake such removal within ninety (90) days following the expiration or termination of this
Lease, Lessor may undertake such removal at Lessee's expense. The performance guarantee,
required under this Lease, may not be applied towards any costs incurred by Lessor for such
removal.
ARTICLE 17. ENVIRONMENTAL COMPLIANCE
17.01 Lessee agrees that it shall, at its sole expense, comply with all applicable federal, state
and local statutes, laws, ordinances, rules and regulations concerning the use and operation of
Atlantic FBO Lease 8-27-13 FINAL Page 20 of 36
all fuel storage facilities presently existing upon the Leased Premises, including, but not limited
to, regulations promulgated by the Environmental Protection Agency ("EPA") as well as all
inspection, financial liability and inventory control recording requirements of the EPA, and that it
shall provide Lessor with copies of certificates of registration from the Texas Commission on
Environmental Quality ("TCEQ") for any existing fuel storage facilities, together with copies of
any required proof of financial responsibility and other documentation, such as an :Accord
Form" certificate of insurance applicable to above ground fuel storage tanks, income
statements or balance sheets, reasonably required by the Aviation Director or applicable
regulatory agency. For purposes of this provision, "facilities" are defined as any mobile or fixed,
onshore building, structure, installation, equipment, pipe, or pipeline used in fuel storage, fuel
gathering, fuel transfer, or fuel distribution.
17.02 During the Term of this Lease and any extensions thereof, should changes in applicable
statutes, laws, rules or regulations regarding fuel storage facilities and/or dispensing equipment
necessitate the removal, modification or replacement of any component, piping, valves, or
connections comprising part of the fuel storage facilities and/or dispensing equipment,
potentially including the entire fuel storage facilities, in, on, upon or under the Leased Premises,
then such removal, modification or replacement shall be timely undertaken and performed by
Lessee, at its sole cost and expense. Furthermore, if requested by Lessor, Lessee shall, no
later than Midnight of the termination or expiration of this Lease, at its sole cost, remove said
fuel storage facilities, dispensing equipment and/or component(s) thereof from the Leased
Premises, perform any required soil or other investigations, perform regulatory remediation and
restore the Leased Premises in a condition that complies with all applicable statutes, laws,
rules, or regulations governing fuel storage facilities. Provided, however, that if Lessee has
made significant improvements to such fuel storage facilities and/or dispensing equipment, as
determined and approved by the Aviation Director, whose approval shall not unreasonably be
withheld, such removal by Lessee upon termination or expiration shall not be required. Any such
removal of Lessee's property shall be coordinated by Lessee so that there is no unreasonable
interference with Airport customers' use of the Airport or of other aeronautical service providers'
use and occupancy of other areas at the Airport. In the event Lessee plans to conduct any
environmental remediation work on the Leased Premises, Lessee shall give the Aviation
Director and the aeronautical service providers adjacent to Lessee written notice of the same,
with a general description of the work to be conducted, including if Lessee anticipates that such
work will impact the use and occupancy of adjacent areas at the Airport and, if so, how Lessee
intends to minimize such impact. Following the termination or expiration of this Lease, City will
conduct a comprehensive environmental assessment to determine compliance with TCEQ
and/or EPA standards, at Lessee's sole expense, to reasonably determine if any environmental
pollution or contamination exists and, if so, an accepted contamination removal program shall
be implemented at Lessee's sole expense. Lessee or any City approved sub lessee shall
remain liable for any discharge if contamination is found at a future date if such discharge is the
responsibility of Lessee or sub lessee.
17.03 Lessee shall, in conducting any activity or business on the Leased Premises, including
environmental response or remedial activities, comply with all environmental laws, including, but
not limited to, those regarding the generation, storage, use, transportation and disposal of solid
wastes, hazardous materials, toxic chemicals, special wastes or other contaminants, and all
laws, regulations and notice requirements pertaining to releases or threatened releases of
hazardous materials, toxic chemicals, special wastes or other contaminants into the
environment. Lessee shall not cause the release, or permit its employees, agents, permittees,
contractors, subcontractors, sublessees, or others in Lessee's control, supervision, or
employment, to release (whether by way of uncapping, pouring, spilling, spraying, spreading,
Atlantic FBO Lease 8-27-13 FINAL Page 21 of 36
attaching or otherwise), into or onto the Leased Premises or any other location upon or above
the Airport (including the air, ground and ground water thereunder and the sewer and storm
water drainage systems thereon), any quantity of hazardous substances (as defined or
established from time to time by applicable local, state, or federal law and including, among
other things, hazardous waste and any other substances that have been or may in the future be
determined to be toxic, hazardous or unsafe). To the extent any such release may exceed
quantities or volumes permitted by applicable federal, Texas or local law, Lessee shall
immediately notify the Aviation Director, TCEQ, and Local Emergency Planning Committee, as
may be required under the federal Emergency Planning and Community Right To Know Act.
The Lessee, or any occupant of Leased Premises, shall be responsible for compliance with said
Act, in the event of any such release.
17.04 Lessee shall remedy any release or threatened release caused by Lessee's operations
at the Airport, as described above and, whether resulting from such release or otherwise,
remove any hazardous materials, special wastes and any other environmental contamination
caused by Lessee on, under or upon the Leased Premises, as may be required by a
governmental or regulatory agency responsible for enforcing environmental laws and
regulations. Such work shall be performed, at Lessee's sole expense, after Lessee submits to
Lessor a plan, approved in writing by the appropriate governmental or regulatory agency(ies)
responsible for enforcing such environmental laws and regulations, for completing such work.
Lessor shall have the right to review and inspect all such work at any time, using consultants
and representatives of its choice, at Lessor's sole cost and expense. Specific cleanup levels for
any environmental remedial work shall be designed to meet all of the applicable environmental
laws and regulations, to the satisfaction of the appropriate government or regulatory agency
responsible for enforcing environmental laws and regulations.
17.05 Lessee agrees to defend, indemnify and hold harmless Lessor, its elected and
appointed officials, officers, agents and employees, from and against any and all
reasonable losses, claims, liability, damages, injunctive relief, injuries to person,
property or natural resources, costs, expenses, enforcement actions, actions or causes
of action, fines and penalties, arising as a result of action or inaction of Lessee, its
employees, agents or contractors, in connection with the release, threatened release or
presence of any hazardous material, contaminants, or toxic chemicals at, on, under, over
or upon the Leased Premises or Airport, whether or not foreseeable. The foregoing
indemnity includes, without limitation, all reasonable costs at law or in equity for
removal, clean-up, remediation and disposal required to bring the Leased Premises or
Airport to be in compliance with, all applicable environmental laws and regulations and
all reasonable costs associated with claims for damages to persons, property or natural
resources arising out of Lessee's use and occupancy of the Leased Premises or its
operations at the Airport. In the event that Lessor is named in any enforcement action or
lawsuit by any party in connection with the environmental condition of the Leased
Premises caused by the action or inaction of the Lessee, Lessee shall defend Lessor and
indemnify and hold harmless Lessor from any reasonable costs, damages, fines and
penalties resulting therefrom.
Nothing in this Lease shall prohibit Lessee from pursuing contribution or indemnity for such
cleanup costs or remediation by other responsible parties and the Aviation Director shall provide
reasonable cooperation and coordination in such endeavors.
17.06 In addition to any other rights of access herein regarding the Leased Premises, Lessor
shall, upon reasonable notice, have access thereto in order to inspect and confirm that the
Atlantic FBO Lease 8-27-13 FINAL Page 22 of 36
Lessee is using same in accordance with all applicable environmental laws and regulations.
Lessee shall, upon the Aviation Director's reasonable demand and at Lessee's sole expense,
demonstrate to said Director (through such tests, professional inspections, samplings, or other
methods as may be reasonably required by said Director) that Lessee has not caused or
permitted any release of hazardous substances or contaminants in excess of quantities or
volumes permitted by applicable federal, Texas or local law. Qualified independent experts,
chosen by Lessee, subject to Lessor's approval, which approval shall not be unreasonably
withheld, shall conduct any such tests and assessments. Lessee shall provide copies of reports
from any such testing or assessments to Lessor upon receipt. Should Lessee not provide same
to Lessor, Lessor may conduct, or cause to be conducted, such tests, inspections, samplings
and assessments, and Lessee shall reimburse Lessor for all costs of such actions, no later than
thirty (30) days following receipt by Lessee of invoices therefor. Lessor reserves the right to
conduct any of the above actions, at the Aviation Director's discretion, when in the opinion of
same, additional or supplemental assessments are in Lessor's best interest.
17.07 Lessee, at Lessor's request, shall make available for inspection and copying, upon
reasonable notice and at reasonable times, any or all of the non-privileged documents and
materials Lessee has prepared pursuant to any environmental law or regulation, which may be
retained by Lessor or submitted to any governmental regulatory agency; provided, such
documents and materials relate to environmental regulatory compliance and pertain to the
Airport or the Leased Premises. If any environmental law or regulation requires Lessee to file
any notice or report of a release or threatened release of regulated materials on, under or about
the Leased Premises or the Airport, Lessee shall promptly submit such notice or report to the
appropriate governmental agency and simultaneously provide a copy of such report or notice to
Lessor. In the event that any written allegation, claim, demand, action or notice is made against
Lessee regarding Lessee's failure or alleged failure to comply with any environmental law or
regulation, Lessee, as soon as practicable, shall notify Lessor in writing and provide same with
copies of any such written allegations, claims, demands, notices or actions so made.
17.08 The parties to this Lease, including the tenants or sublessees who may enjoy a future
right of occupation through Lessee, acknowledge a right and a duty in Lessor, exercised by the
Aviation Director, to review safety and potential environmental impacts of any proposed
operation, business, maintenance or other activity of the Lessee and its sublessees. To this
end, said Director shall have authority to disapprove an activity of the Lessee and/or any
sublessee not otherwise expressly permitted under this Lease, on the basis of a risk
assessment. The parties understand that Leased Premises are not intended for use involving
refining, processing, manufacturing, maintenance (not already required by the Minimum
Standards), overhaul, or similar heavy industrial activities entailing use, storage, manufacture,
or transport of critical volumes of regulated or hazardous materials or toxic chemicals. For
purposes of this Lease, "critical volumes" are those which pose or may pose an unreasonable
risk to Airport property, its occupants, employees or the traveling public.
ARTICLE 18. SIGNS
Any signs installed on the Leased Premises shall be submitted to the Aviation Director for
approval prior to installation. Lessee shall neither erect signs nor distribute advertising matter
upon Airport Premises, without the prior written consent of the Aviation Director. All signage
must be in compliance with applicable City code standards and restrictions.
Atlantic FBO Lease 8-27-13 FINAL Page 23 of 36
ARTICLE 19. REGULATIONS
Lessee's officers, agents, employees, contractors, subcontractors, tenants and subtenants shall
obey all rules and regulations promulgated by Lessor, its authorized agents in charge of the
Airport, or other lawful authority, to insure the safe and orderly conduct of operations and traffic
thereon.
ARTICLE 20. QUALITY OF SERVICES
Lessee shall, at all times, furnish good, prompt and efficient commercial aviation services, in
compliance with the applicable Minimum Standards, adequate to meet demand for same at the
Airport, furnish said services on a non-discriminatory basis to all users thereof, and charge non-
discriminatory prices for each unit of sale or service; provided, however, that Lessee will be
allowed to make reasonable and non-discriminatory discounts, rebates or other similar types of
price reductions to volume purchasers.
ARTICLE 21. TIME OF EMERGENCY
During time of war or national emergency, Lessor shall have the right to lease the landing area
or any part thereof to the United States for government use, and, if such lease is executed, the
provisions of this Lease, insofar as they are inconsistent with those of the Government lease,
shall be suspended.
ARTICLE 22. SUBORDINATION OF LEASE & RIGHT OF RECAPTURE
22.01 This Lease shall be subordinate to the provisions of any existing or future agreement
between Lessor and the United States of America and/or the State of Texas regarding operation
or maintenance of the Airport, the execution of which has been or may be required as a
condition precedent to the expenditure of Federal or state funds for the development of the
Airport. Should the effect of such agreement with the United States be to take any of the
property under lease, or substantially alter or destroy the commercial value of the leasehold
interest granted herein, Lessor shall not be held liable therefore, but, in such event, Lessee may
cancel this Lease upon ten (10) days' written notice to Lessor. Notwithstanding the foregoing,
Lessor agrees that, in the event it becomes aware of any such proposed or pending agreement
or taking, Lessor shall utilize its best efforts to give the maximum possible notice thereof to
Lessee. Any portion of the Leased Premises recaptured from Lessee under this provision shall
result in a proportionate abatement of rent as of the date the recapture is effectuated.
22.02 Lessor shall have the right to recapture any or all of the Leased Premises to the extent
that such are necessary for the City's development, improvement, and or maintenance of the
Airport's runways and taxiways; for protection or enhancement of flight operations; or for other
development in compliance with any current or future Airport Master Plan and Airport layout
plan. In the event of any such recapture, Lessee and Lessor shall execute a writing reflecting a
corresponding adjustment to the Leased Premises and rent.
ARTICLE 23. SECURITY
23.01 Lessee shall comply with all rules, regulations, statutes, orders, directives or other
mandates of the United States or State of Texas, regarding Airport security requirements or
measures. Additionally, Lessee shall comply with the Airport Security Program, as may be
amended from time to time, a copy of which will be provided by Lessor to Lessee upon
Atlantic FBO Lease 8-27-13 FINAL Page 24 of 36
request. Lessor reserves the right to require Lessee to install access control system(s) and/or
surveillance cameras at all points of access from public areas to security-restricted
areas. Airport security officials must be able to access, inspect and monitor such access control
system(s) and/or surveillance cameras.
23.02 Lessee shall comply with all current and future mandates of the Transportation Security
Administration, of successor agency, for background investigations of its personnel.
23.03 Lessee shall indemnify and hold harmless Lessor, its officers and employees from
any charges, fines or penalties that may be assessed or levied by any department or
agency of the United States or State of Texas, by reason of Lessee's failure to comply
with any applicable security provision and/or requirement for compliance set forth
herein. Lessee is responsible for payment of all such fines and penalties.
ARTICLE 24. DEFAULT AND REMEDIES
24.01 Each of the following shall constitute an event of default by Lessee or its parent
company, successor company or related company(ies):
(a) Lessee shall fail to pay any rent as provided for in this Lease and such failure
shall continue for a period of ten (10) days after receipt by Lessee of written notice thereof.
(b) Lessee shall neglect or fail to perform or observe any of the terms, provisions,
conditions or covenants herein contained, and if such neglect or failure should continue for a
period of thirty (30) days after receipt by Lessee of written notice of same, or if more than thirty
(30) days shall be required because of the nature of the default, if Lessee shall fail within said
thirty (30) day period to commence and thereafter diligently proceed to cure such default.
(c) Lessee shall become insolvent; take the benefit of any present or future
insolvency statute; make a general assignment for the benefit of creditors; file a voluntary
petition in bankruptcy or a petition or answer seeking a reorganization or the readjustment of its
indebtedness under the federal bankruptcy laws, or under any other law or statute of the United
States or of any state thereof; or consent to the appointment of a receiver, trustee or liquidator
of all or substantially all of its property.
(d) An Order of Relief shall be entered, at the request of Lessee or any of its
creditors, under federal bankruptcy, reorganization laws or any law or statute of the United
States or any state thereof.
(e) A petition under any part of the federal bankruptcy laws, or an action under any
present or future insolvency law or statute, shall be filed against Lessee and shall not be
dismissed within thirty (30) days after the filing thereof.
(f) Pursuant to, or under the authority of, any legislative act, resolution, rule, or any
court, governmental, agency or board order or decree or officer, a receiver, trustee, or liquidator
shall take possession or control of all or substantially all of the property of Lessee and such
possession or control shall continue in effect for a period of fifteen (15) days.
(g) Lessee shall become a corporation in dissolution or voluntarily or involuntarily
forfeit its corporate charter.
Atlantic FBO Lease 8-27-13 FINAL Page 25 of 36
(h) The rights of Lessee hereunder shall be transferred to, pass to or devolve upon,
by operations of law or otherwise, any other person, firm, corporation or other entity, in
connection with or as a result of any bankruptcy, insolvency, trusteeship, liquidation or other
proceeding or occurrence described in Paragraphs c through g of this Section 24.01.
(i) Lessee shall voluntarily discontinue its operations at the Airport for a period of
ninety (90) consecutive days.
(j) If Lessee sells, transfers or assigns this Lease to or is sold, transferred or
assigned this Lease from any entity or organization that have an interest in any other FBO
operating at the Airport.
24.02 In the event any default shall occur, Lessor then, or at any time thereafter, but prior to
the removal of such condition of default, shall have the right, at its election, either to terminate
this Lease and/or any sublease agreements that Lessee may have, by giving at least five (5)
days written notice to Lessee, at which time Lessee will then quit and surrender the Leased
Premises to Lessor, but Lessee shall remain liable as herein provided, or enter upon and take
possession of the Leased Premises (or any part thereof in the name of the whole), without
demand or notice, and repossess the same as of the Lessor's former estate, expelling Lessee
and those claiming under Lessee, forcibly if necessary, without prejudice to any remedy for
arrears of rent or preceding breach of Lease.
24.03 Lessor's repossession of the Leased Premises shall neither be construed as an election
to terminate this Lease and/or any sublease agreements that Lessee may have nor shall it
cause a forfeiture of rents or other charges remaining to be paid during the balance of the term
hereof, unless a written notice of such intention be given to Lessee, or unless such termination
is decreed by a court of competent jurisdiction.
24.04 Upon repossession, Lessor shall have the right, at its election, whether or not this Lease
and/or any sublease agreements that Lessee may have shall be terminated, to relet the Leased
Premises or any part thereof for such period(s), which may extend beyond the term hereof, at
such rent and upon such other terms and conditions as Lessor may, in good faith, deem
advisable. Notwithstanding any law or anything contained herein to the contrary, to the full
extent permitted under applicable law, Lessee and Lessor agree that Lessor's duty to relet the
Leased Premises or otherwise to mitigate damages hereunder shall be limited to those
requirements set forth in the Texas Property Code, as amended. Lessor shall in no event be
liable, and Lessee's and sub lessees' liability shall not be affected or diminished whatsoever, for
failure to relet the Leased Premises, or in the event the Leased Premises are relet, for failure to
collect any rental under such reletting, so long as the Lessor uses objectively reasonable efforts
to comply with said Property Code. Lessor and Lessee agree that any such duty shall be
satisfied and Lessor shall be deemed to have used objective reasonable efforts to relet the
Leased Premises and mitigate Lessor's damages by: (a) posting a "For Lease" sign on the
Leased Premises; (b) advising Lessor's lease agent, if any, of the availability of the Leased
Premises; and (c) advising at least one (1) outside commercial brokerage entity of the
availability of the Premises.
24.05 In the event that Lessor elects to relet, rentals received by same from such reletting shall
be applied: first, to the payment of any indebtedness, other than rent due hereunder from
Lessee under this Lease; second, to the payment of any cost of such reletting; third, to the
payment of rent due and unpaid hereunder; and finally, the residue, if any, shall be held by
Lessor and applied hereunder. Should that portion of such rentals received from such reletting
Atlantic FBO Lease 8-27-13 FINAL Page 26 of 36
during any month, which is applied to the payment of rent hereunder, be less than the rent
payable during that month by Lessee hereunder, then Lessee shall pay such deficiency to
Lessor. Such deficiency shall be calculated and paid monthly. Lessee shall also pay to Lessor,
as soon as ascertained, any costs and expenses incurred by Lessor in such reletting not
covered by the rentals received from such reletting of the Leased Premises.
24.06 If Lessor shall terminate this Lease or take possession of the Leased Premises by
reason of a condition of default, Lessee and those holding under Lessee, shall forthwith remove
their goods and effects from the Leased Premises. If Lessee or any such claimant shall fail to
effect such removal forthwith, Lessor may, without liability to Lessee or those claiming under
Lessee, remove such goods and effects and store same for the account of Lessee or of the
owner thereof at any place selected by Lessor, or, at Lessor's election, and upon giving fifteen
(15) days' written notice to Lessee of date, time and location of sale, Lessor may sell the same
at public auction or private sale on such terms and conditions as to price, payment and
otherwise, as Lessor in its sole discretion may deem advisable. If, in Lessor's judgment, the cost
of removing and storing, or of removing and selling any such goods and effects, exceeds the
value thereof or the probable sale price thereof, as the case may be, Lessor shall have the right
to dispose of such goods in any manner Lessor may deem advisable.
24.07 Lessee shall be responsible for all costs of removal, storage and sale, and Lessor shall
have the right to reimburse the Airport from the proceeds of any sale for all such costs paid or
incurred by Lessor. If any surplus sale proceeds remain after such reimbursement, Lessor may
deduct from such surplus any other sum due to Lessor hereunder and shall pay over to Lessee
any remaining balance of such surplus sale proceeds.
24.08 If Lessor shall enter into and repossess the Leased Premises as a result of Lessee's
default in the performance of any of the terms, covenants or conditions herein contained, then
Lessee hereby covenants and agrees that it will not claim the right to redeem or re-enter the
said Premises to restore the operation of this Lease , and Lessee hereby waives the right, and
the right of any party claiming through or under Lessee, to such redemption and re-entrance
under any present or future law, and does hereby further, for any party claiming through or
under Lessee, expressly waive its right, if any, to make payment of any sum or sums of rent, or
otherwise, of which Lessee shall have made default under any of the covenants of the Lease
and to claim any subrogation of the rights of Lessee under these presents, or any of the
covenants thereof, by reason of such payment.
24.09 All rights and remedies of Lessor herein created or otherwise existing at law are
cumulative, and the exercise of one or more rights or remedies shall not be taken to exclude or
waive the right to the exercise of any other. All such rights and remedies may be exercised and
enforced concurrently, whenever and as often as deemed desirable.
24.10 If proceedings shall, at any time, be commenced for recovery of possession, as
aforesaid, and compromise or settlement shall be effected either before or after judgment
whereby Lessee shall be permitted to retain possession of the Leased Premises, then such
proceeding shall not constitute a waiver of any condition or agreement contained herein or of
any subsequent breach thereof or to this Lease.
24.11 Any amount paid or expense or liability incurred by Lessor for the account of Lessee
may be deemed to be additional rental and the same may, at the option of Lessor, be added to
any rent then due or thereafter falling due hereunder.
Atlantic FBO Lease 8-27-13 FINAL Page 27 of 36
ARTICLE 25. HOLDING OVER
It is agreed and understood that any holding over by Lessee or sub lessee, with Lessor's written
consent, at sole discretion of Lessor, after the termination of this Lease, shall not renew and
extend same, but shall operate and be construed as a tenancy from month-to-month, not to
exceed six (6) months, upon all the terms and conditions set forth herein, except that rental shall
be paid to Lessor by Lessee for all buildings on the Leased Premises at one hundred twenty-
five percent (125%) the then current rents, fees and charges in effect as of the end of the
primary term of this Lease or the ground rental rate established through appraisal. Lessee shall
be liable to Lessor for all loss or damage resulting from such holding over against Lessor's will
after the termination of this Lease, whether such loss or damage may be contemplated at this
time or not. It is expressly agreed that acceptance of the foregoing rental by Lessor, in the event
that Lessee fails or refuses to surrender possession, shall not operate to give Lessee any right
to remain in possession beyond the period for which such amount has been paid nor shall it
constitute a waiver by Lessor of its right to immediate possession thereafter.
ARTICLE 26. ASSIGNMENT AND SUBLET
26.01 Lessee shall not transfer or assign this Lease or Lessee's interest in or to the Leased
Premises, or any part thereof, without having first obtained Lessor's prior written consent, which
may be given only by or pursuant to an ordinance enacted by the City Council of the City of
Corpus Christi, Texas. Lessee may not assign or sublet this Lease to any other FBO operating
at the Airport or to any entity or organization that has any financial, equity or ownership interest
in any other FBO operating at the Airport. Notwithstanding the foregoing and for so long as any
pledge or collateral assignment of Lessee's interest in the Lease shall be by instrument
substantially in such form as shall have previously been approved by the City Council, the
consent of Lessor to such pledge or collateral assignment may be given by Lessor acting by
and through the Aviation Director.
26.02 Lessee shall not sublet the Leased Premises or any part thereof without having first
obtained the Aviation Director's written consent, which will be granted in the Aviation Director's
sole discretion, and co-signature to any sublease. Failure either to obtain Lessor's prior written
consent or to comply with the provisions herein contained shall operate to prevent any such
transfer, assignment or subletting from becoming effective. In the event Lessee requests
permission to sublease, the request shall be submitted to the said Director prior to the effective
date of the sublease requested, and shall be accompanied by a copy of the proposed sublease
agreement(s) and of all agreement(s) collateral thereto. The identity of the sublessee, the area
or space to be subleased, the rental to be charged, the type of business to be conducted,
reasonable financial history and all other relevant information requested by said Director shall
be specified. It is expressly understood and agreed that the storage of aircraft inside any hangar
at the Leased Premises pursuant to what is commonly referred to as a "use and occupancy
agreement" as part of the permitted FBO services offered at the Airport shall not constitute a
sublease which would otherwise be subject to the terms and conditions of this section 26.02.
26.03 Should the subletting of the Leased Premises be approved by Lessor, however, Lessee
agrees and acknowledges that it shall remain fully and primarily liable under this Lease,
notwithstanding any such sublease and that any such sublessee shall be required to attorn to
Lessor hereunder.
26.04 The receipt by the Lessor of rent from an assignee, subtenant or occupant of the Leased
Premises shall not be deemed a waiver of the covenant in this Lease against assignment and
Atlantic FBO Lease 8-27-13 FINAL Page 28 of 36
subletting or an acceptance of the assignee, subtenant or occupant as a tenant or a release of
the Lessee from further observance or performance by Lessee of the covenants contained in
this Lease. No provision of this Lease shall be deemed to have been waived by the Lessor,
unless such waiver is in writing, signed by the Aviation Director.
ARTICLE 27. FIRE AND OTHER DAMAGE
27.01 In the event the Premises shall be partially damaged by fire or other casualty through no
fault of Lessee, Lessee shall give immediate notice thereof to Lessor and the same shall be
repaired, at Lessor's expense, without unreasonable delay, unless Lessor determines that the
damage is so extensive that repair or rebuilding is not feasible. From the date of such casualty
until repair, monthly rents, fees and charges hereunder shall abate based on the proportion of
the Premises destroyed, or rendered untenantable, bears to the total Premises; provided,
however, that if said Premises shall be so slightly damaged in any such way so as to be
rendered unusable, the rent hereunder shall not cease or be abated during any repair period. In
the event that the damage to the Premises, by fire or other casualty, is so extensive that the
Premises is rendered wholly unusable, and such damage to the Premises, in the exclusive
judgment of Lessor, makes occupancy and use to be impractical, then at the option of the
Lessor, and upon notice to Lessee, this Lease, as it applies to said Premises, shall cease, and
the rent hereunder shall be apportioned and paid up to date of such damage. If Lessor elects to
restore the Premises, Lessor shall notify Lessee of such intention within thirty (30) days of the
date of the damage, otherwise the Lease, as applicable to said Premises, shall be deemed
canceled and of no further force or effect.
27.02 Lessor's obligations to rebuild or repair under this Article shall, in any event, be limited to
restoring said Premises to substantially the condition that existed prior to the commencement of
improvements, if any, performed by Lessee and shall further be limited to the extent of the
insurance proceeds available to Lessor for such restoration. Lessee agrees that if Lessor elects
to repair or rebuild as set forth in this Article, then Lessee will proceed with reasonable
diligence, at its sole cost and expense, to rebuild, repair and restore its improvements, signs,
fixtures, furnishings, equipment and other items provided or installed by Lessee in or about the
Leased Premises in a manner and to a condition at least equal to that which existed prior to the
damage or destruction.
ARTICLE 28. LAWS AND ORDINANCES
Lessee agrees to comply promptly with all laws, ordinances, orders and regulations affecting the
Leased Premises, including, but not limited to, those related to its cleanliness, safety, operation,
security, environmental, use and business operations. Lessee shall comply with all Federal,
State and local regulations concerning its operation on the Airport and shall indemnify and hold
harmless Lessor, its officers and employees, from any charges, fines or penalties that may be
assessed or levied by any department or agency of the United States, the State of Texas, or
any other governmental agencies, or their successor agencies, with jurisdiction over the Airport
by reason of Lessee's failure to comply with the terms of this Article or with any other terms set
forth in this Lease .
ARTICLE 29. TAXES AND LICENSES
Lessee shall, at its sole cost and expense, pay on or before their respective due dates, to the
appropriate collecting authority, all Federal, State and local taxes and fees, which are now or
may hereafter be levied upon the Lessee, Leased Premises, the business conducted thereon or
Atlantic FBO Lease 8-27-13 FINAL Page 29 of 36
upon any of Lessee's property used in connection therewith including, but not limited to, any
possessory interest taxes. Lessee shall also maintain and provide to the City upon request, in
current status, all Federal, State and local licenses and permits required for the operation of its
business.
ARTICLE 30. NONDISCRIMINATION & AFFIRMATIVE ACTION REGULATIONS
30.01 Any discrimination by Lessee, its sublessees, agents or employees, based on race,
color, creed, sex, age, religion, national origin or handicap, in employment practices, use of or
admission to the Leased Premises, is prohibited.
30.02 Lessee for itself, its heirs, representatives, successors and assigns, as a part of the
consideration hereof, does hereby covenant and agree, as a covenant running with the land,
that in the event facilities are constructed, maintained or otherwise operated on the Leased
Premises, for a purpose for which a DOT program or activity is extended or for another purpose
involving the provision of similar services or benefits, Lessee shall maintain and operate such
facilities and services in compliance with all other requirements imposed pursuant to 49 CFR pt
21, Nondiscrimination in Federally Assisted Programs of the Department of Transportation, and
as said Regulations may be amended.
30.03 Lessee for itself, its representatives, successors and assigns, as a part of the
consideration hereof, does hereby covenant and agree, as a covenant running with the land,
that: (a) no person, on the grounds of race, color, creed, sex, age, religion, national origin or
handicap, shall be excluded from participation in, denied the benefits of, or be otherwise
subjected to discrimination, in the use of said facilities; (b) that in the construction of any
improvements on, over or under such land and the furnishing of services thereon, no person on
the grounds of race, color, creed, sex, age, religion, national origin or handicap shall be
excluded from participation, denied the benefits of, or otherwise be subjected to discrimination;
and (c) that Lessee shall use the Leased Premises in compliance with all other requirements
imposed by or pursuant to 49 CFR pt 21, Nondiscrimination in Federally Assisted Programs of
the Department of Transportation, and as said Regulations may be amended.
30.04 Lessee agrees that it will comply with applicable statutes, Executive Orders and such
rules as are promulgated by applicable state, federal or municipal agencies to assure that no
person shall be excluded from participating in any activity conducted with or benefiting from
Federal assistance on the basis of race, creed, color, national origin, sex age, or handicap.
Lessee, is successors and assigns, shall be obligated to comply with the provisions of this
Section 30.04 for the period during which Federal assistance is extended to the Airport during
the Term of this Lease, except where Federal assistance is to provide, or is in the form of
personal property or real property or interest therein or structures of improvements thereon. In
these cases, this Section 30.04 shall apply to Lessee, its successors and assigns, through the
later of: (a) the period during which such property is used by Lessor, its successors and assigns
for a purpose for which Federal assistance is extended, or for another purpose involving the
provision of similar services or benefits; or (b) the period during which Lessor, its successors or
assigns, retains ownership or possession of the Leased Premises.
ARTICLE 31. WAGES and EMPLOYMENT
Lessee shall pay at a minimum the prevailing wage for the applicable Corpus Christi, Texas job
market to employees of its operations hereunder. All employees must be legally employable in
the United States.
Atlantic FBO Lease 8-27-13 FINAL Page 30 of 36
ARTICLE 32. FORCE MAJEURE
If either party shall be delayed or prevented from the performance of any act required hereunder
by reason of acts of God, strikes, lockouts, labor troubles, war, terrorism, inability to procure
materials, restrictive governmental laws or regulations or other cause, without fault and beyond
the control of the party obligated (the financial inability of the party excepted), performance of
such act shall be extended by a period equal to the period of such delay; provided, however,
that nothing in this paragraph shall excuse Lessee from the prompt payment of any rental
except as may be expressly provided otherwise in this Lease; and further provided that the party
relying on this paragraph shall provide written notice to the other party notifying such other party
of the force majeure event promptly after such force majeure event, and shall proceed with all
diligence to complete the performance of the act upon the cessation of the force majeure event.
ARTICLE 33. ATTORNEYS' FEES
In the event that Lessor or Lessee brings an action under this Lease, each party shall be
responsible for their own attorneys' fees incurred in the defense or prosecution thereof.
ARTICLE 34. SEVERABILITY
If any clause or provision of this Lease is illegal, invalid or unenforceable under present or future
laws, it is the parties' intention that the remainder hereof not be affected. In lieu of each clause
or provision that is illegal, invalid or unenforceable, the parties intend that there be added, as a
part of this Lease, a clause or provision, as similar in terms to such illegal, invalid or
unenforceable clause or provision, as may be possible, yet be legal, valid and enforceable.
ARTICLE 35. AMENDMENT
This Lease, together with its authorizing ordinance, constitutes the entire agreement between
the parties. No amendment, modification or alteration of the terms of this Lease shall be binding,
unless the same is in writing, dated subsequent to the date hereof and duly executed by the
parties hereto.
ARTICLE 36. NOTICES
Notices to City provided for in this Agreement shall be sufficient if sent by
registered or certified mail, postage prepaid, addressed to the Aviation Director, Corpus Christi
International Airport, 1000 International Drive, Corpus Christi, Texas 78406; and notices to
Lessee shall be sufficient if sent by registered or certified mail, postage prepaid, addressed to:
Louis Pepper, CEO
Mercury Air dba Atlantic Aviation
6652 Pinecrest Dr., Suite 300
Plano, TX 75024
or to such other respective addresses as the parties may designate to each other in writing
from time to time.
Atlantic FBO Lease 8-27-13 FINAL Page 31 of 36
ARTICLE 37. RELATIONSHIP OF PARTIES
Nothing contained herein shall be deemed or construed by the parties hereto, or by any third
party, as creating the relationship of principal and agent, partners, joint venturers or any other
similar such relationship, between the parties hereto. It is understood and agreed that neither
the method of computation of rent, nor any other provision contained herein, nor any acts of the
parties hereto, creates a relationship other than one of Lessor and Lessee.
ARTICLE 38. CUMULATIVE REMEDIES
NO WAIVER - NO ORAL CHANGE
The specific remedies of the parties under this Lease are cumulative and do not exclude any
other remedies to which they may be lawfully entitled, in the event of a breach or threatened
breach hereof. The failure of either party ever to insist upon the strict performance of any
covenant of this Lease, or to exercise any option herein contained, shall not be construed as its
future waiver or relinquishment thereof. Lessor's receipt of a rent payment, with knowledge of
the breach of any covenant hereof, shall not be deemed a waiver of such breach. Further, no
waiver, change, modification or discharge by either party of any provision of this Lease shall be
deemed to have been made or be effective, unless in writing and signed by the party to be
charged. In addition to other remedies herein, the parties shall be entitled to an injunction
restraining the violation, or attempted violation, of any of the covenants, conditions or provisions
hereof, or to a decree compelling performance of same; subject, however, to other provisions
herein.
ARTICLE 39. CONFLICT OF INTEREST
Lessee acknowledges that it is informed that the Charter of the City of Corpus Christi and its
Ethics Code prohibit a City officer or employee, as those terms are defined in Section 2-312 of
the Ethics Code, from having a financial interest in any contract with the City or any City agency
such as city owned utilities. An officer or employee has a "prohibited financial interest" in a
contract with the City or in the sale to the City of land, materials, supplies or service, if any of the
following individual(s) or entities is a party to the contract or sale: a City officer or employee; his
parent, child or spouse; a business entity in which the officer or employee, or his parent, child or
spouse owns ten (10) percent or more of the voting stock or shares of the business entity, or ten
(10) percent or more of the fair market value of the business entity; a business entity in which
any individual or entity above listed is a subcontractor on a City contract, a partner or a parent
or subsidiary business entity.
Pursuant to the subsection above, Lessee warrants and certifies, and this contract is made in
reliance thereon, that it, its officers, employees and agents are neither officers nor employees of
the City. Lessee further warrants and certifies that is has tendered to the City a Discretionary
Contracts Disclosure Statement in compliance with the City's Ethics Code.
ARTICLE 40. GENERAL PROVISIONS
40.01 Incorporation of Exhibits. All exhibits referred to in this Lease are intended to be and
hereby are specifically made a part of this Lease.
EXHIBIT 1: Leased Premises
EXHIBIT 2: November 18, 2011 Appraisal
EXHIBIT 3: PGAL Structural Report
Atlantic FBO Lease 8-27-13 FINAL Page 32 of 36
EXHIBIT 4: Deferred Maintenance Items and Budget
EXHIBIT 5: Fees and Charges
40.02 Incorporation of Required Provisions. Lessor and Lessee incorporate herein by this
reference all provisions lawfully required to be contained herein by any governmental body or
agency.
40.03 Nonexclusive Rights. It is understood and agreed that nothing herein contained shall be
construed to grant to Lessee any exclusive right or privilege within the meaning of Section 308
of the Federal Aviation Act, as amended, for the conduct of any activity on the Airport, except
that, subject to the terms and provisions hereof, Lessee shall have the right to exclusive
possession of the Leased Premises.
40.04 Removal of Disabled Aircraft. Lessee shall promptly remove any disabled aircraft that is
in the care, custody, or control of Lessee from any part of the Airport (other than the Leased
Premises) (including, without limitation, runways, taxiways, aprons, and gate positions) and
place any such disabled aircraft in such storage areas as may be designated by the Aviation
Director. Except as to aircraft subject to bailment and/or for which Lessee is owed money from a
customer, Lessee may store such disabled aircraft only for such length of time and on such
terms and conditions as may be established by Lessor. If Lessee fails to remove any of disabled
aircraft promptly, the Aviation Director may, but shall not be obligated to, cause the removal of
such disabled aircraft, provided, however, the obligation to remove or store such disabled
aircraft shall not be inconsistent with federal laws and regulations and Lessee agrees to
reimburse Lessor for all costs of such removal, and Lessee further hereby releases Lessor from
any and all claims for damage to the disabled aircraft or otherwise arising from or in any way
connected with such removal by Lessor unless caused by the negligence or recklessness of
Lessor.
40.05 Airport Access License/Permit. Lessor reserves the right to establish a licensing or
permit procedure for vehicles requiring access to the Airport operational areas and to levy
directly against Lessee or its suppliers a reasonable regulatory or administrative charge (to
recover the cost of any such program) for issuance of such Airport access license or permit.
40.06 Compliance with 14 CFR pt 77. Lessee agrees to comply with the notification and review
requirements covered in Part 77, Title 14, Code of Federal Regulations, FAA Regulations, in the
event future construction of a building is planned for the Leased Premises, or in the event of any
planned modification or alteration of any present or future building or structure situated on the
Leased Premises.
40.07 Reservations re: Airspace and Noise. There is hereby reserved to Lessor, its
successors, and assigns, for the use and benefit of the public, a right of flight for the passage of
aircraft in the airspace above the surface of the Leased Premises.
40.08 Inspection of Books and Records. Each party hereto, at its expense and on reasonable
notice, shall have the right from time to time to inspect and copy the books, records, and other
data of the other party relating to the provisions and requirements hereof, provided such
inspection is made during regular business hours and such is not prohibited by the U.S.
Government.
Atlantic FBO Lease 8-27-13 FINAL Page 33 of 36
40.09 Independent Contractor. Lessee is not an employee or agent of City by reason of this
Lease, or otherwise. Lessee shall be solely responsible for its acts and omissions arising from
or relating to its operations or activities at Airport, or lease of property herein.
40.10 Authority of Agreement. Lessee warrants and represents that it has the right, power, and
legal capacity to enter into, and perform its obligations under this Lease, and no approvals or
consents of any persons are necessary in connection with it. The execution, delivery, and
performance of this Lease by the undersigned Lessee representatives have been duly
authorized by all necessary corporate action of Lessee, and this Lease will constitute a legal,
valid, and binding obligation of Lessee, enforceable in accordance with its terms.
40.11 Authority of the Aviation Director. The Aviation Director shall administer this Lease on
behalf of Lessor. Whenever this Lease calls for approval by Lessor, such approval shall be
evidenced, in writing, by either the Aviation Director or the City Manager of the City of Corpus
Christi or his designee. In no event shall this language be considered a waiver by Lessee to
object to decisions by the Aviation Director which it considers to be arbitrary, capricious or
inconsistent with any express obligations to act reasonably set forth herein.
40.12 Consent. Unless stipulated otherwise herein, whenever the consent or approval of either
party hereto is required or authorized hereunder, such consent or approval shall not be
unreasonably withheld, unreasonably conditioned, or unreasonably delayed.
40.13 Net Agreement. It is the intent and purpose of the City and Lessee that all rental payable
by Lessee herein shall be absolutely net to the City so that this Lease shall yield to City the
entire rent specified, in each year of this Lease, free of any charges, assessments, impositions
or deductions of any kind or character which may be charged, assessed, or imposed on or
against Lessee or the Leased Premises, without abatement, deduction or set-off by Lessee.
40.14 Noise Control. Lessee, for itself and each of its officers, representatives, agents,
employees, guests, patrons, contractors, subcontractors, licensees, subtenants, invitees, or
suppliers shall not conduct any operation or activity on the Leased Premises, or elsewhere at
Airport, in which the sound emitting therefrom is of such volume, frequency or intensity at such
time as to constitute a nuisance. The Aviation Director shall have the sole and exclusive
authority to determine what constitutes a nuisance under the provisions of this Lease
Agreement except that operations and activities having noise levels not in violation of federal,
State, or local governmental standards shall not be deemed a nuisance.
40.15 Time is of the Essence. Time shall be of the essence in complying with the terms,
conditions and provisions of this Lease.
40.16 Vehicular Parking. Vehicular parking in the areas included in the Leased Premises shall
be restricted to parking directly related to Lessee's operations on the Leased Premises by
Lessee, its officers, representatives, agents, employees, guests, patrons, volunteers,
contractors, subcontractors, licensees, and suppliers. Access to vehicular parking areas within
the Leased Premises shall be coordinated through the Airport's overall parking management
program.
ARTICLE 41. AUDIT
Lessee shall keep complete and accurate accounts, records and books pertaining to the
lease of the Leased Premises and FBO services rendered in connection with the permitted uses
Atlantic FBO Lease 8-27-13 FINAL Page 34 of 36
under this Lease, including all expenses, costs and expenditures for the Leased Premises and
other information reasonably necessary or pertinent to determine the amounts due and payable
under this Lease. Such records may be kept by Lessee at its local office or at the management
office for the Leased Premises for seven (7) years after each annual financial statement has
been delivered to Lessor. Such books and records shall be made available to the City and its
agents (or copies shall be furnished at the City's request) at all times, on not less than five (5)
Business Days' notice, during regular business hours for examination and audit. If such books
and records are located outside the City of Corpus Christi, Lessee shall make them available to
the City within the City of Corpus Christi.
If the results of such examination by the City establish a deficiency in Proceeds Rent payable to
the City, Lessee shall within ten (10) days' pay to the City the deficiency. In the event that a
deficiency in such Proceeds Rent of five percent (5%) or more is established for any calendar
year, Lessee shall pay the full cost of any examination requested by the City if Lessee is
responsible for such deficiency, and Lessee shall also pay interest at the Default Rate on said
deficiency in Proceeds Rent from the time it should have been paid until the date paid. The
inspection on behalf of the City may be made by an officer, employee or other designee of the
City.
Lessor shall have the right during each calendar or fiscal year to authorize an audit of Lessee's
records pertaining to its operation on the airport. Such audits shall be undertaken by the
Lessor's staff or a firm of certified public accountants, satisfactory to Lessor. Except with respect
to an audit of Proceeds Rent as set forth above, the cost of such audit shall be paid by Lessor,
unless the results of such audit reveal a discrepancy of more than three percent (3%) between
the amounts that should have been paid under this Lease and the amounts actually paid during
any calendar or fiscal year. In case of such discrepancy, the full cost of the audit shall be paid
by Lessee. Any additional auditing expense resulting from Lessee's inability or refusal to provide
records as required by the auditor shall be paid by Lessee. The Lessee shall forthwith pay to the
Lessor the full amount of fees due based upon the results of the audit if a discrepancy exists.
This amount shall be paid within thirty (30) days of written notice by Lessor.
ARTICLE 42. MOST FAVORED NATION
CITY covenants and agrees not to enter into any agreement with any FBO which (i) makes
substantially similar use of the Airport as set forth in Article 4 herein, and (ii) utilizes substantially
similar facilities to that of Lessee, which contains more favorable terms than this Lease, or to
grant to any such FBO rights or privileges with respect to the Airport which are not afforded to
Lessee hereunder unless substantially the same terms, rights, privileges and facilities are
concurrently made available to Lessee.
ARTICLE 43. PARTIES BOUND
This Lease shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, executors, administrators, legal representatives, successors and assigns, as
permitted hereby.
ARTICLE 44. TEXAS LAW TO APPLY
All obligations under this Lease are performable in Nueces County, Texas, and shall be
construed pursuant to the laws of the State of Texas, except where state law shall be
preempted by any rules, laws or regulations of the United States.
Atlantic FBO Lease 8-27-13 FINAL Page 35 of 36
ARTICLE 45. GENDER
Words of either gender used in this Lease shall be held and construed to include the other
gender, and words in the singular number shall be held to include the plural, unless the context
otherwise requires.
ARTICLE 46. CAPTIONS
The captions of the provisions contained herein are for convenience in reference and are not
intended to define, extend or limit the scope of any provision of this Lease.
ARTICLE 47. ENTIRE AGREEMENT
This Lease comprises the final and entire agreement, including all terms and conditions thereof,
between the parties hereto, and supersedes all other agreements, oral or otherwise, regarding
the subject matter hereof, none of which shall hereafter be deemed to exist or to bind the parties
hereto. The parties intend that neither shall be bound by any term, condition or representation
not herein written.
IN WITNESS WHEREOF, the undersigned have duly executed this Lease as of the dates set
forth below.
CITY/LESSOR: LESSEE:
CITY O CORP - - 'TI MERCURY AIR CENTER—CORPUS
CHRISTI, INC., dba ATLANTIC TION
By:II!''./ Al& _ Bye,
Rona d ` amity Manager ,.. Pepper, CEO
Date: Date: • ,_ =
; 2.5z_
'
'� --"-' —
ARM1ANDO CFIARA �� _ I �i
CITY SECRETAir' ...__.._
ST NIUNCIL_._►1. L .�.f 3
Atlantic FBO Lease 8-27-13 FINAL Page 36 of 36
EXHIBIT 5
Fees and Charges
(as of Commencement Date*)
Fuel Flowage Fee: $0.0625/gal
Ramp Fees:
Tie-Down (all aircraft): $25.00/day
Remain Overnight (per night. On Ramp after 9 p.m.):
Single Engine $20.00
Light Twin $25.00
Heavy Twin $30.00
Turbo Prop $40.00
Light Jets $50.00
Heavy Jets $100.00
Super Heavy Jets $125.00
Helicopter $30.00
Cabin Class Charter $250.00
"City Fees"
Security Identification Badge Deposit: $100.00
Security Identification Badge Fee: $20.00 - $100.00
Security Identification Badge Replacement Fee: $100.00 reissue fee plus $20 ($120.00)
Rental Car— not rented at Airport: ** $3.50/transaction day
*All Fees and Charges may be adjusted by the Aviation Director periodically.
** Not applicable if a CFC has been assessed.
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