ORDER NO. 14205
On this the 8th day of December, 1980, at a regularly scheduled
meeting of the Commissioners' Court of Kerr County, Texas, on motion
by Commissioner SpeaknmZ seconded by Commissioner Guthrie
and unanimously approved by the Court, it is ordered that the County Judge
of Kerr County be authorized to execute that certain 27 page lease agreement
between City of Kerrville and the County of Kerr, Lessor, and RR LTD., Lessee,
covering a 3.32 acre tract of airport land for a period of 33 years, as the act
and deed of the County of Kerr. Each page thereof was initialed by the
County Judge for identification.
Signed at meeting held on this the 8th day of December, 1980.
County Commissioner
•.; ~ f : .i /J.
r rl; r
Emmie M Mirenker, County Clerk
" and .Ex-©ffSreiQ~ Clerk of the
Commissioners' Court
,, ~ i
By = _ Deputy
ro y ei e
x
Lich, County Commis
RESOLUTION
On this day, at a regular meeting of the Kerrville-Kerr
County Joint Airport Board by motion duly made and seconded, it
was unanimously resolved that the attached Lease Agreement leasing
3.32 acres of land for a term of thirty-three (33) years to RR
LTD. be approved, and the Board recommended that the Lease be
executed by the City and County. Each page of such Lease Agreement
was initialed by the chairman for identification.
Dleeting held and Resolution adopted this ~~! day of
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LEASE AGREEMENT
STATE OF TEXAS X
X KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF KERR X
1. Parties. This Lease Agreement made this day by
and between CITY OF KERRVILLE, a municipal corporation
located in Kerr County, Texas, and COUNTY OF KERR, TEXAS,
hereinafter collectively called Lessor, and RR, LTD., a
Texas limited partnership, hereinafter called Lessee, WITNESSETH:
2. Leased Premises. In consideration of the rents,
covenants and agreements hereinafter reserved and contained
on the part of Lessee to be paid, observed and performed,
Lessor hereby demises and leases to Lessee, and Lessee
hereby takes and rents from Lessor, for the term provided
below, the following described tract of real property situated
in Kerr County, Texas, together with any improvements thereon
(hereinafter sometimes called the "Leased Premises"):
That certain tract or parcel of land containing 3.32
acres, as more particularly described in Exhibit "A"
attached hereto and made a part hereof for all purposes;
A roadway and taxiway easement for ingress and egress
in common with others as more particularly described in
Exhibit "C" attached hereto and incorporated herein;
together with all and singular the rights, easements, privileges
and appurtenances in anywise belonging unto said above
described tract of land.
3. Term. To have and to hold, with possession to
Lessee of the Leased Premises, for a term of thirty-three
(33) years beginning on the Commencement Date (as hereinafter
defined) and ending at 11:59 P.M. on the thirty-third anniversary
of the Commencement Date (hereinafter sometimes called the
"Lease Term") upon and subject to the terms, covenants and
conditions herein set forth, unless earlier terminated.
4. Rental.
A. Basic Rental. Lessee shall pay to Lessor as
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Basic Rental for the Leased Premises the sum of Two Thousand
Five Hundred Eighty-nine and 60/100 Dollars ($2,589.60) per
year, such amount being payable in installments of Two
Hundred Fifteen and 80/100 Dollars ($215.80) per month,
payable monthly in advance. The first such monthly installment
shall be due and payable on or before the Commencement Date,
and a like monthly installment (subject to adjustments as
provided herein) shall be due and payable on or before the
first day of each succeeding calendar month during the Lease
Term.
B. Adjustments to Rent. As promptly as practicable
after each anniversary of the Commencement Date of this
Lease, Lessor shall compute the percentage of increase, if
any, in the cost of living during the period between the
Commencement Date and the date of each anniversary thereof
during the term of this Lease based upon the changes in the
Consumer Price Index for Urban Wage Earners and Clerical
Workers - U. S. Average (1967=100) (herein called "Consumer
Price Index"), as determined by the United States Department
of Labor, Bureau of Labor Statistics for "All Items". It is
agreed that the Consumer Price Index Number at the Commencement
Date of this Lease is
(herein called "Base Index
Number"). If the Consumer Price Index Number for the month
in which any anniversary of the Commencement Date shall
occur (each such number being herein called an "Anniversary
Index Number" is higher than the Base Index Number, then
such Anniversary Index Number shall be divided by the Base
Index Number and from the quotient thereof shall be subtracted
the integer one (1). The resulting positive number, multiplied
by one hundred, shall be deemed to be the percentage of
increase in the cost of living. Such percentage of increase
shall be multiplied by the Basic Rental and the product
thereof shall be added to the Basic Rental to determine the
annual rental payable for the one year period commencing on
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the immediately preceding anniversary of the Commencement
Date (such amount being herein sometimes called "Adjusted
Basic Rental"). Such Adjusted Basic Rental shall be calculated
in the above manner during each year of the Lease Term.
Lessor shall, within a reasonable time after obtaining the
appropriate data necessary for computing any increase in the
annual rent, give Lessee notice of any increase so determined.
Lessee shall notify Lessor of any claimed error therein
within thirty (30) days after receipt of such notice. If
publication of the Consumer Price Index shall be discontinued,
the parties hereto shall thereafter accept the comparable
statistics on the cost of living for the City of San Antonio,
Texas, as they shall be computed and published by an agency
of the United States or by a responsible financial periodical
of recognized authority, then to be selected by the parties
hereto.
5. Payment of Rent. All Basic Rental or Adjusted
Basic Rental hereunder shall be due and payable monthly in
advance on the first day of each and every calendar month
during the term of this Lease. Any rental, additional
rental or other payment which this Lease requires Lessee to
pay which is more than thirty (30) days past due shall bear
interest at the rate of 10% per annum from and after maturity
and until paid. Lessee covenants and agrees timely to pay
to Lessor at City Hall, Kerrville, Kerr County, Texas (or at
such other place in said county as Lessor may from time to
time designate in writing) all rental hereunder and all
additional rental and other sums which under the provisions
hereof Lessee is to pay to Lessor.
6. Construction by Lessor. Promptly after execution
hereof, Lessor shall cause to be constructed an asphalt road
herein called "a Temporary Entrance Road". Such temporary
entrance road is shown on the attached Exhibit C. The
portion of the temporary entrance road running ncrth and
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south shall be constructed of suitable asphalt topping and
6" of flexible base material. This portion will ultimately
become part of Loop 535 around the airport. The portion of
the temporary entrance road running from the apron easterly
will be constructed according to minimum City of Kerrville
Specifications for the construction of a two-lane city
street. Such road shall be completed and ready for use
within 6 months from the date of execution of this Lease,
unless completion is prevented by delays occasioned by
strikes, unavailability of materials, labor shortages,
delays in receipt of materials, acts of God, fire, accidents,
boycotts, storm or inclement weather, forced majeure or
other casualty or cause beyond Lessor's control and such
completion date shall be extended to the extent of all such
delays. For purposes of this lease, the date upon which the
construction of the Temporary Entrance Road is completed
shall be deemed the "Commencement Date". If the Temporary
Entrance Road has not been completed within 6 months (including
any extensions on account of the above force majeure causes),
then the Lessee may, at its option, terminate this lease by
giving Lessor written notice of its intention to do so, and
neither party shall have any claim against the other under
this lease. Lessor agrees that Lessee shall be entitled to
free and uninterrupted use of the Temporary Entrance Road
(except as interrupted for State Highway construction) to
serve the leased premises throughout the term of this lease.
Lessor shall, at its expense cause the east-west Temporary
Entrance Road to be maintained in good operating condition
throughout the lease term.
7. Construction of Improvements. As of the effective
date hereof, Lessee has prepared and submitted to Lessor,
and Lessor has approved, plans and specifications for Lessee's
proposed improvements (herein called "Improvements") to be
constructed on the Leased Premises. Such approved plans and
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specifications are listed on Exhibit "B" hereto. Lessee
shall with due diligence attempt to obtain all required
consents, permits, authorizations and licenses (all of which
are collectively herein referred to as the "building permits")
from all appropriate governmental authorities for construction
of the Improvements provided for under said mutually approved
plans and specifications. Lessor agrees to cooperate with
Lessee in obtaining such building permits. In the event
that any of the applicable governmental authorities involved
decline to issue a building permit to Lessee on the basis of
said agreed plans and specifications, Lessor and Lessee
shall attempt to make mutually agreeable revisions to said
plans and specifications which will reasonably satisfy the
requirements for issuance o£ a building permit in accordance
with the usage provided for under this Lease (although
neither Lessor or Lessee shall be obligated to approve any
of such revisions). If, within thirty (30) days after the
denial of such building permit, Lessor and Lessee have not
agreed upon all such required revisions and Lessee still has
not secured all necessary building permits for the Leased
Premises after the exercise of due diligence, then this
Lease may be cancelled by Lessee, at its option, and neither
party shall have any claim against the other under this
Lease, irrespective of whatever costs or expenses, if any,
either party shall have incurred in connection with this
Lease prior to such cancellation.
Upon Lessor's completion o£ the Temporary Entrance Road
and Lessee's obtaining all required building permits, Lessee
agrees that Lessee will, solely and entirely at Lessee's
cost, risk and expense, commence to construct, build and
erect the Improvements in accordance with the final plans
and specifications hereinabove mentioned. All such construction
work shall be performed by contractors engaged by Lessee and
shall. be completed within one (1) year from the date such
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conditions have been finally satisfied, except that in the
event of delays, occasioned by strikes, unavailability of
materials, labor shortages, delays in receipt of materials,
acts of God, fire, accidents, boycotts, storm or inclement
weather, force majeure, or other casualty or causes beyond
Lessee's control, such completion date shall be extended to
the extent of all such delays.
Lessee covenants and agrees to do all construction work
and other work and installations required to Lessee hereunder
in a good and workmanlike manner in accordance with all
federal, state and local laws, ordinances, rules and regulations
applicable thereto.
Lessee covenants and agrees to pay for all labor and
materials in connection with the construction of the Leased
Premises. With respect to any contract for any such labor
or materials, Lessee acts as a principal and not as the
agent of Lessor. Lessee shall have no authority to place
any lien upon the Lessor's title to the Leased Premises nor
in any way to bind Lessor; and any attempt to do so shall be
void and of no effect.
All improvements constructed by Lessee on the Leased
Premises shall be and remain the property of Lessee throughout
the Lease Term hereinabove provided for. Upon expiration of
such Lease Term, title to such Improvements shall automatically
pass to and vest in Lessor, subject to the rights of Lessee
provided for in paragraph 13 hereof. All of Lessee's utility
services shall be underground.
8. Repair. In the event of substantial damage to the
Improvements, Lessee shall have the option to (i) either
reconstruct, restore and repair the Improvements, or demolish
the Improvements and erect new and different Improvements
and in either case to otherwise use and occupy the Lease
Premises for the purposes herein provided, subject only to
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any express restrictions set forth herein or imposed by
applicable law or ordinance, or (ii) terminate the Lease,
whereupon any insurance proceeds collected by Lessee pursuant
to policies held by Lessee in accordance with this Lease
shall be prorated as between Lessor and Lessee, with Lessee
being entitled to that prorated portion of the proceeds
based on the ratio of the remaining Lease Term to the entire
Lease Term, and Lessor being entitled to the balance of the
proceeds. If the damage occurs after the expiration of the
Lease Term and Lessee elects to terminate the Lease, all
insurance proceeds shall be paid to Lessor. For purpose of
the foregoing sentence, "substantial damage" shall be defined
as damage to such an extent that the cost to repair and
restore the Improvements would exceed $100,000.00.
9. Property Damage Insurance.
A. Lessee, at its expense, shall during the
entire Lease Term keep the Improvements insured agsinst loss
or damage by fire or other peril within the coverage of the
Texas Standard Fire Insurance Policy with "extended coverage"
endorsement, in an amount and with insurance companies
acceptable to Lessee in the exercise of its sole discretion.
Lessee shall advise Lessor in writing of the type and amount
of such coverage and of the name of the insurance company
issuing same. In case of any damage to or destruction of
the Improvements, or any part thereof, which are covered by
the above described policy or policies of insurance, then
unless Lessee shall elect to terminate this Lease as provided
for under Section 8 above, the entire loss proceeds paid
under any such policy of insurance because of such damage or
destruction shall be paid to Lessee and used and applied by
Lessee as it deems proper and prudent under the then existing
circumstances. In the event the cost of such reconstructing,
restoring or repairing is less than the amount of the insurance
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proceeds, any excess shall be paid to Lessee. Lessor shall
be a loss payee in such policies of insurance.
B, Lessee shall promptly give the appropriate
insurance company written notice of any damage to or destruction
of the Improvements within the coverage of any insurance
policy maintained by Lessee, and shall notify Lessor with
respect to any such damage or destruction.
10. Taxes; Utilities.
A. Lessee shall be responsible for and shall
timely pay any and all ad valorem taxes upon or with respect
to, its leasehold interest in the Leased Premises, the
Improvements and all watermain, sewage, garbage or other
assessments and charges with respect to the Leased Premises
or Lessee's use thereof; provided, however Lessee shall not
be responsible and Lesssor agrees to pay any assessments
resulting from construction of the Temporary Entrance Road.
All ad valorem taxes upon or with respect to the Lessee's
leasehold estate and the Improvements shall be rendered and
assessed in the name of Lessee. The parties acknowledge
that at present the Lessor's title to the Leased Premises is
not subject to ad valorem taxation and that any taxes which
may be hereafter so assesed against the Lessor's interest in
the Leased Premises shall be paid by Lessor.
B. With respect to taxes, assessments or charges
for which Lessee is responsible as aforesaid and which are
assessed or levied in the name of Lessee, or anyone holding
under Lessee, Lessee shall be responsible to pay the same
not later than 10 days before the same become delinquent.
With respect to such taxes, assessments or charges levied or
assessed in the name of Lessor, or some person holding under
Lessor and for which Lessee is responsible (other than
Lessee or one holding under Lessee), then Lessor shall
furnish Lessee appropriate notice of such taxes and Lessee
shall be responsible to pay the same not later than 10 days
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after such notice or 10 days before the same become delinquent,
whichever is later. Lessee shall furnish Lessor receipts
indicating full, timely payment of all such taxes, assessments
and charges.
C. Notwithstandng the foregoing, with respect to
any such ad valorem tax or any such watermain, sewage,
garbage or other assessment or charge (other than ad valorem
taxes, water or sewer main or other permanent type improvement
assessment, for the year in which this Lease terminates)
Lessee shall (if Lessee gives Lessor prior written notice of
Lessee's intention to do so) be permitted to make bona fide
contest in Lessee's name or in the name of Lessor of the
invalidity or amount of any such tax, charge or assessment,
provided Lessee first posts security with a state or national
bank in Kerrville, Texas, for Lessor's benefit in the amount
of such contested taxes, assessments or charges plus any
then accrued interest or penalty thereon, plus an amount
equal to an additional year's penalty and interest thereon,
all in form to the reasonable satisfaction of Lessor; and so
long as Lessee takes steps to prevent a foreclosure during
the said contest, and pursues same bona fide and with reasonable
dispatch to conclusion, Lessee shall not be in default
pending said contest. However, Lessee shall be responsible
for all penalties and/or interest arising by virtue of such
a contest or the failure timely to pay such tax or assessment.
D. Lessee shall also pay for all utilities used
on or in respect of the Leased Premises and the Improvements,
if any, and all expenses of operating the Leased Premises
and the Improvements (in each case whether or not charged or
assessed to the reversion or to leasehold) during the Lease
Term, and such payments shall be made prior to same becoming
delinquent.
E. If Lessee fails to pay timely as required
herein any of the sums provided in this Section 10 to be
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paid by Lessee, then Lessor in addition to Lessor's other
rights hereunder, may (but shall not be obligated to) pay
the same, in which event Lessee shall be required to pay
Lessor on demand, and as additional rent, the entire amount
so paid by Lessor.
11. Use. Lessee's use of the Leased Premises shall be
limited to the following: Private Hangar Facility, as set
forth in the Airport Policies and Standards.
12. No Liens on Lessor's Title to Leased Premises.
Lessee shall have the right to mortgage or create a lien on
its leasehold interest and the Improvements, equipment,
machinery, fixtures and furnishings as stated in Section 14
hereof, but Lessee shall have no right or authority to
create, or to do or authorize the doing of anything giving
rise to, any mortgage or any other lien of any kind or
character on Lessor's fee interest in the Leased Premises or
any part thereof, and should any such mortgage or other lien
affecting Lessor's fee interest in the Leased Premises arise
out of anything done or authorized to be done by or under
the authority of Lessee, then Lessee shall promptly bond
against or discharge the same within ten (10) days after
Lessee's receipt of written request by Lessor, and in no
event shall any such lien attach to or be enforceable against
Lessor's interest in the Leased Premises or any part thereof.
Lessee covenants and agrees not to create or suffer the
creation of any such mortgage or other lien on the Lessor's
fee interest. If any such mortgage or lien is created
contrary to the terms hereof, Lessor shall have, among other
rights and not by way of limitation, the right, but not the
obligation, to pay and discharge the same, in which event
Lessee shall be required to pay Lessor on demand, and as
additional rent, the entire amount so paid by Lessor.
13. Default.
A. If Lessee shall be adjudicated insolvent or
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Ig~i~y.
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bankrupt pursuant to the provisions of any state or federal
insolvency or bankruptcy act, or if a trustee or receiver of
the property of Lessee shall be appointed by reason of
Lessee's insolvency or inability to pay its debts, or if any
assignment shall be made of Lessee's property for the benefit
of creditors, or if Lessee shall institute, or cause or give
cause for the institution of legal proceedings seeking to
have Lessee adjudicated insolvent or bankrupt under the
insolvency or bankruptcy laws of any state or of the United
States or for the appointment of a trustee or receiver for
Lessee's assets then and in any such event, subject to
applicable provisions of the federal bankruptcy laws, Lessor
may, at its option, terminate this Lease and all rights of
Lessee hereunder as stated below. The allowance of any
petition under any insolvency or bankruptcy laws, or the
appointment of a trustee or receiver of Lessee or its assets,
shall be conclusive evidence that Lessee caused or gave
cause therefor unless such allowance of petition or the
appointment of a trustee or receiver is vacated within 60
days after such allowance or appointment.
B.. In the event of any failure of Lessee timely
to pay in £ull any rental, additional rental, or any other
amount due hereunder, or timely to perform in full any of
Lessee's obligations under any of the provisions regarding
payment of utilities, taxes and insurance for more than ten
(10) days after written notice of such failure or default
shall have been received by Lessee, or in the event of any
failure fully to perform any other of the terms, conditions,
or covenants of this Lease to be observed or performed by
Lessee for more than 30 days after written notice of such
other failure or default shall have been received by Lessee,
or in the event of the occurrence of any of the insolvency
events specified above, then and in any of such events,
Lessor shall have the right, at its option to terminate this
Lease, shall also have the immediate right of re-entry and
11 - + 41 ~11
may remove all persons and property from the Leased Premises,
all without resort to legal process and without being deemed
guilty of trespass or becoming liable for any loss or damage
which may be occasioned thereby. Any property removed from
the Leased Premises hereunder may be stored in a public
warehouse or elsewhere at the cost and for the account of
Lessee. Notwithstanding the foregoing provision hereof, in
the event such nonmonetary default is of the type that
cannot be cured within such 30 days, but Lessee shall commence
within such 30 days to cure such default and shall thereafter
proceed with due diligence to cure such default as soon as
practically possible, then Lessor shall not have the right
to terminate this Lease or otherwise disturb Lessee's possession
of the Leased Premises.
C. Notwithstanding anything to the contrary
above, in the event any default by Lessee shall be cured
(either by Lessee or by the holder of a leasehold mortgage
covering Lessee's rights under this Lease), including the
payment to Lessor of all sums owing by Lessee hereunder with
respect to such default, all prior to either the termination
of this Lease or the re-entry of the Leased Premises by
Lessor in accordance with the terms hereof, then all of the
rights and interests of Lessee under this Lease shall continue
in force unaffected by the occurrence of any such default to
the same extent as if such default had not occurred.
D. In the event of termination of this Lease,
then Lessor shall thereby acquire and own all of the Improvements
and appurtenant fixtures theretofore constructed by Lessee
or the Leased Premises. Lessee shall be entitled to remove
all chattels, books, records, trade fixtures, equipment,
airplanes, and other personal property from the Leased
Premises, and Lessee shall not be further liable or responsible
to Lessor for payment of further rent or performances of
further obligations hereunder. It is agreed that Lessor's
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right to terminate this Lease shall be Lessor's sole and
exclusive remedy hereunder.
14. Leasehold Mortgage. Lessee shall have the right to
grant mortgages to any bank, insurance company or other
lending institution, covering its leasehold interest created
by this Lease and in and to the Improvements and fixtures,
furnishings, machinery or equipment located therein and in
the event of a mortgage the following terms and provisions
shall apply:
A. Notices. If any holder of such leasehold
mortgage (herein called the "Mortgagee") shall have notified
Lessor in writing of the existence of one or more leasehold
mortgages, Lessor shall give to such Mortgagee a copy of any
notices sent or required to be given to Lessee under the
terms of this Lease after the date Lessor is so notified.
Such copy shall be addressed to such Mortgagee at the address
last furnished to Lessor. In the event of receipt of any
such notice from a Mortgagee, Lessor shall not be entitled
to deliver a notice to Lessee terminating this Lease or to
exercise its right of re-entry unless a copy of any notice
of default shall have been given to such Mortgagee as herein-
above provided and the time specified above for the curing
of such default shall have expired without the same having
been cured. Any Mortgagee shall have the right, but not the
obligation, to cure any such default or to perform any
condition or agreement to be performed hereunder by Lessee,
or to exercise any egfiea-er-etke~ right granted to Lessee
hereunder, as attorney-in-fact for Lessee. The performance
by any such Mortgagee of any condition or agreement on the
part of Lessee to be performed hereunder will be deemed to
have been performed with the same force and effect as though
performed by Lessee
B. Performance of Lessee's Obliqations. Lessor
will accept performance by any Mortgagee who has theretofore
notified Lessor in writing of the existence of such mortgage,
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~I~~'`~
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within the following periods of time (which shall be concurrent
with the time periods set forth above) of any term, covenant
or condition to be performed by Tenant:
(i) As to any payment of money within thirty (30)
days after notice of such default is delivered to
such Mortgagee; and
(ii) As to all other defaults, within thirty (30)
days after such notice is delivered to such ^lortgagee;
provided, however, that with respect to any such
default which cannot reasonably be cured within
such thirty (30) day period, Lessor will accept
performance by any Mortgagee if such Mortgagee has
commenced to cure such default within thirty (30)
days after notice is delivered to such Mortgagee
and is diligently and continuously proceeding
therewith.
Lessor additionally agrees not to exercise any of its rights
to terminate this Lease during such reasonable time as any
Mortgagee shall require in order to exercise its rights
under such mortgage so long and only so long as (i) the
Mortgagee proceeds reasonably with its remedies under the
"mortgage on the leasehold estate and thereafter prosecutes
the same with all due diligence and likewise completes the
same with all due diligence, (ii) the Mortgagee shall timely
pay all rent and other sums due under the terms of the Lease
which have accrued and which shall become due and payable
during said period of time; and (iii) the Mortgagee cures
the default as and within the time limits specified above or
proceeds with due diligence to cure any non-monetary default
which cannot be cured within 30 days.
C. New Lease. Lessor shall also be obligated
to give to any Mortgagee who has notified Lessor in writing
of the existence of its mortgage any notice of termination
given by Lessor to Lessee, simultaneously with giving such
notice to Lessee. In the event this Lease is terminated by
Lessor, or by operation of law with or without the intent of
Lessor to so terminate, the Mortgagee shall then have the
right within thirty (30) days after receipt by Mortgagee of
such termination notice, or after receipt by law, to notify
Lessor in writing that such Mortgagee or any designee or
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nominee of such Mortgagee elects to enter into a new lease
(herein called the "New Lease") leasing the Leased Premises
from the date of termination of this Lease for the remainder
of the original Lease Term, at the rent and upon the same
terms, covenants, and conditions as are herein set forth,
with the same priority as this Lease and vesting in such
Mortgagee, its designee or nominee, all of the rights,
titles, interest, powers and privileges which Lessee held
hereunder prior to any default hereunder. Lessor shall, on
such written election by a Mortgagee, execute and deliver
such New Lease to such Mortgagee or its designee or nominee
within thirty (30) days after receipt of such request, which
New Lease shall be effective as of the date of the termination
of this Lease, provided that such Mortgagee shall (i) within
ten (10) ways after delivery to Lessor of nofice of such
election, pay to Lessor all rent and other sums due under
this Lease up to and including the date of commencement of
the term of such New Lease, but excluding any damages or
other claim for rent attributable to the period of time
covered by the term of such New Lease, and (ii) pay Lessor
all reasonable expenses and aL-torneys' fees incurred by
Lessor in connection with the preparation, execution and
delivery of such New Lease. Nothing contained in this
Section shall be deemed to relieve Lessee from any liability
it may have as a result of the breach of any provision under
this Lease, but all rental and other amounts paid to Lessor
under the New Lease shall be applied in reduction of Lessee's
obligations hereunder. If there is more than one mortgage ,
outstanding at the time of the termination o,f this Lease,
Lessor shall not be required to execute and deliver such New
Lease to any Mortgagee, or its nominee or designee, other
than to the Mortgagee which Lessee has designated to Lessor
in writing as the holder of first lien priority of be an
agreement of record between all such Mortgagees covering
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their respective rights with respect to such New Lease.
Lessor, however, shall not be obligated to deliver physical
possession of the Leased Premises and Improvements to the
Mortcagee or its designee or nominee and such parties shall
pay all costs incurred in obtaining such possession. In no
event shall the Mortgagee be under any obligation or liability
whatsoever with respect to any such New Lease entered into
by its designee or nominee.
D. No Surrender or Modification Without Notice.
Anything herein contained to the contrary notwithstanding,
Lessor and Lessee mutually covenant and agree that so long
as there exists an unpaid mortgage on the leasehold estate
of Lessee of which Lessor has actual notice, this Lease or
any renewal thereof shall not be modified, amended or altered
and Lessor shall not accept a surrender of the Leased Premises
and Improvements or a cancellation or release of this Lease
or any renewal thereof from Lessee prior to the expiration
or sooner termination thereof as hereinbefore provided,
without the prior written consent of the holder of such
mortgage, and any such attempted modification, amendment,
alteration, surrender, cancellation or release without such
prior consent shall be void and of no effect.
E. In the event any Mortgagee shall, by foreclosure
of its mortgage lien or otherwise, acquire and become the
owner of Lessee's rights and interests under this Lease, it
is expressly agreed that such Mortgagee shall be obligated
and liable under this Lease only during the period of its
occupancy of the Leased Premises and shall have no further
obligation or liability under this Lease subsequent to its
assignment hereof or otherwise beyond the period of its
occupancy of the Leased Premises. No acquisition, by foreclosure
of a mortgage lien or otherwise, of Lessee's rights and
interests under this Lease by any Mortgagee shall release
- 16 -

Lessee of any liability which it may have as a result of any
provision of this Lease.
15. Lessor's Right of Entry. Lessor shall have the
right to enter upon the Leased Premises at reasonable times
for all reasonable purposes, including the purpose of inspecting
the same and of exhibiting same to prospective purchasers or
tenants, and commencing sixty (60) days prior to the termination
of this Lease, for the purpose of exhibiting same to prospective
tenants.
16. Release of Landlord's Lien. Lessor expressly
releases, waives and relinquishes any and all rights to or
to claim a statutory landlord's lien or any other type of
lien covering any of Lessee's personal property situated
upon the Leased Premises.
17. Surrender of Leased Premises. At the expiration
of the Lease Term, Lessee shall peaceably surrender the
Leased Premises nnles9-Lessee-3~as-e~ereised-ids-egg}erg-te
-cease-the-teaseel-Pte~nsses-as-3~e~e3n-gie~ided:
18. Holding Over. Holding over by Lessee, at the
expiration of the Lease Term and with the consent of Lessor,
shall be construed to be a tenancy from month to month at
1208 of the rental (being the Basic Rental as adjusted under
Section 4) otherwise payable hereunder on the date of such
expiration, and shall otherwise be on the terms and conditions
herein specified, insofar as applicable.
19. No Partnership or Agency. Lessor does not, in any
way or for any purpose, become a partner of Lessee in the.
conduct of its business, or otherwise, or a joint venturer _
with Lessee. Lessee shall not be deemed an agent of Lessor
for any purpose. Lessor shall not be in any way responsible
(to Lessee or to any other person or entity) for, or in any
fashion required or obligated in any way to police or regulate,
any of the conduct or acts of Lessee, or of any agent,
servant, invitee, licensee, contractor or quest of Lessee.
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20. Condemnation.
A. If during the lease term, the whole of
the Leased Premises or Improvement be taken by eminent
domain, or if a portion thereof be so taken which causes the
remainder to be insufficient and unsuitable for conduct of
the business to which the Leased Premises were (in good
faith and in accordance with the terms of this Lease) being
devoted just prior to the initial negotiations with the
condemning authority (or the institution of condemnation
proceedings, whichever is first), then and in such events,
Lessee shall have the right to (i) terminate this Lease, and
(ii) collect the reasonable value of its .leasehold estate.
In the event Lessee elects to terminate this Lease, such
termination shall be effective as such date as Lessee shall
elect, but in no event earlier than the date of such notice,
and upon any such termination, neither party hereto shall
have any further obligation to the other or rights under
this Lease and this~Lease shall be of no further force or
effect; provided, however, that the parties' respective
rights and obligations of any kind under this Lease accrued
at or prior to such termination or which relate to periods
of time prior thereto, whether or not then matures, shall
fully survive any such termination and shall be and remain
in all things enforceable hereunder.
B. If during the Lease Term there is a taking by
eminent domain of a part of the Leased Premises which does
not cause a termination of this Lease, then the rental
provided in Section 4 shall be abated and reduced so that
such rental as so abated or reduced is the same fraction of
such rental which would otherwise have been payable (in the
absence of there ever having been at any time any abatement
or reduction of rental under this paragraph) as the number
of square feet remaining in the Leased Premises after such
taking is of the total number of square feet originally in
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the Leased Premises upon commencement of the Lease Term.
Such abatement of rental shall be effective upon the date
the taking of possession by the condemning authority occurs,
with the rental for the month in which same occurs being
prorated as of such date.
C. Upon any taking as aforesaid under the foregoing
provisions, Lessee shall be entitled to the entire award
made for or with respect to any Improvements erected by
Lessee on the Leased Premises which are taken, damaged or
otherwise diminished by such taking and for the reasonable
value of its leasehold estate. Lessor shall be entitled to
the entire remaining award made for or with respect to the
Leased Fremises or this Lease. Neither party shall have any
right in or to any award to which the other party is so
entitled by reason of any such condemnation and/or taking by
eminent domain, whether total or partial. Lessee shall in
no event be under any duty to repair or restore any improvements
affected by such taking.
21. Lessor's Warranty: Lessor warrants that Lessor
has good title to the Leased Premises, and has the right to
rnake and grant this Lease, that no taxes respecting the
Leased Premises are owing and that Lessee shall, upon payment
of all rental provided to be paid by Lessee, and Lessee
fully observing and performing the covenants and agreements
herein provided to be observed and performed by Lessee, for
the term of this Lease (unless said Lease be sooner terminated
under and in accordance with any of the provisions herein
elsewhere contained providing for such termination) quietly
and peaceably possess and enjoy the Leased Premises, free
from claim, interference or hindrance by Lessor, or those
holding under Lessor, or those holding under a right or
title superior to Lessor's; provided, however, that this
warranty is subject to, does not warrant against the effects
of, present or future building or zoning ordinances or other
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governmental laws, rules, regulations, orders or actions, or
the exercise of any power of condemnation or eminent domain.
22. Examination of Title and Premises. The Lessee
shall have the right, at Lessee's cost, to obtain a current
survey of the Leased Premises and to obtain a current Title
Report relating to the Leased Premises. In the event such
survey or Title Report indicates that the description of the
Leased Premises herein contained is inaccurate, Lessor and
Lessee agree to execute an amendment to this Lease correcting
the legal description of the Leased Premises to such description
as may be required by a reputable title company issuing such
title reports. At any time during the term of this lease,
Lessee shall also have the right, at its costs, to obtain an
Owners Title Insurance Policy covering its leasehold interest
under this Lease.
23. Waiver of Subrogation. Each party hereto waives
any and every claim which arises or may arise in its favor
and against the other party hereto during the term of this
Lease for any and all loss of or damage to any of its property
located within or upon, or constituting a part of, the
Leased Premises or Improvements, which loss or damage is
covered by valid and collectible fire and extended coverage
insurance policies, to the extent that such loss or damage
is recoverable by the waiving party under said insurance
policies. Said mutual waivers shall be in addition to, and
not in limitation or derogation of, any other waiver or
release contained in this Lease with respect to any loss of
or damage to property of the parties hereto. Inasmuch as
the above mutual waivers will preclude the assignment of any
aforesaid claim by way of subrogation (or otherwise) to an
insurance company, Lessee hereby agrees immediately to give
to each insurance company which has issued to it policies of
insurance coverage, written notice of the terms of said
mutual waivers, and to have said insurance policies properly
- 20 -
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endorsed, if necessary, to prevent the invalidation of said
insurance coverages by reason of said waivers. This paragraph
shall be null and void if it would have the effect of invalidating
any insurance ocverage.
24. Notices. All notices, demands, requests, or other
instruments, which are required or permitted to be given
under this Lease, shall be deemed given and received on the
first of the following to occur: (i) the day actually
received by the party to receive same; (ii) the first day
which is neither a Sunday nor legal holiday following the
day on which actually delivered, by mail or otherwise, to
the below specified address of the party to receive the
same; or (iii) the third day which is neither a Saturday,
Sunday, nor a legal holiday following the day on which same
is mailed, certified or registered mail, postage prepaid,
addressed to the below specified address of the party to
receive same. If the Lessee is the party to receive such
notice, demand, request, or instrument, then the addressee
and address for Lessee shall be:
If Lessor is the party to receive such notice, demand,
request, or instrument, then the addressee and address for
Lessor shall be: City Hall, Attention: City Manager, 600
Main Street, Kerrville, Texas. Either party may change such
addressee or address by notice to the other party as provided
hereunder.
25. Interpretation	The	singular	shall be	interpreted
as the plural, and vice	versa,	if such	treatment	is necessary
to a proper construction of this Lease, and if the feminine,
masculine or neuter gender should for such purpose be one of
the other genders it shall be so treated. Paragraph or
Section headings are for convenience only and shall be
disregarded in interpretation. The law of Texas shall
govern the interpretation and validity of, and other matters
pertaining to, this Lease.
26. Partial Invalidity. If any term, covenant, or
1
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I
condition of this Lease or the application thereof to any
person or circumstance shall, to any extent, be invalid,
illegal or unenforceable, the remainder of this Lease, or
the application of such term, covenant or condition to
persons or circumstances other than to those which it is
held invalid, illegal or unenforceable, shall not be affected
thereby and shall continue in full force and effect.
27. Entire Agreement. This Lease sets forth all the
covenants, promises, agreements, conditions or understandings,
either oral or written, between Lessor and Lessee concerning
the subject matter and the Leased Premises and there are no
covenants, promises, agreements, conditions, understandings
o`r representations, oral or written, between them other than
as are herein set forth. Except as herein otherwise provided,
no subsequent alteration, amendment, change or addition to
this Lease shall be binding on Lessor and Lessee unless
reduced to writing and signed by both parties.
28 (1) National Emergency.
In the event the United States Government requires
the use of said premises in the event of a national emergency,
or for any defense program, or defense purposes on the part
of the government, the party in possession agrees to deliver
up possession within ninety (90) days after notice. After
use by the United States Government has terminated, if in
fact the Government has taken over the airport, the said
party is entitled to re-enter the premises covered by this
agreement and resume its operation, and such loss of time
shall be added to the term of the agreement so that the full
term may be enjoyed without being penalized on account of
the occupancy of the United States Government. Lessee does
not, however, waive any right to compensation for any taking
under power of eminent domain.
- 22 -
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(2) Self-Service.
No right or privilege has been granted which would
operate to prevent any person, firm or corporation operating
aircraft on the airport from performing any services on its
own aircraft with its own regular employees (including but
not limited to maintenance and repair) that it may choose to
perform.
(3) No Exclusive Franchise.
Nothing herein shall be construed to grant or
authorize the granting of an exclusive franchise or right,
except the lawful right of a lessee to exclusive possession
of leased premises.
(4) Development.
Lessor reserves the right, in a reasonable and
non-discriminatory manner, to further develop or improve the
landing area of the airport as it sees fit, regardless of
the desires or views of any party and without interference
or hindrance.
(5) Maintenance of Airport.
Lessor shall keep the Airport in an operable
condition and shall have the right to direct and control all
activities of any party in this regard.
(6) Maintenance of Facilities.
All hangars, buildings, properties or land on the
airport, shall be maintained in a clean, attractive, weed
free, well painted, junk free, condition.
If an operator or lessee has an area where it
normally keeps damaged aircraft, aircraft parts, construction
fixtures, and jigs, barrels, containers, or other unattractive
items, lessee shall enclose such an area with a fence that
will hide such area from public view.
(7) Structural Hazards.
Lessor reserves the right to take any action it
2 3 ~~ ~~ ; 1
considers necessary to protect the aerial approaches of the
airport against obstruction, together with the right to
prevent the erection of any building or other structure on
or adjacent to the airport which would limit the usefulness
of the airport or constitute a hazard to aircraft.
(8) Subordination to Federal Agreement.
This agreement shall be subordinate to the provisions
of any existing or future agreement between Lessor and the
United States, relative to the 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 funds for the development of the airport. Lessee,
however, does not waive any right to compensation resulting
from a taking under power of eminent domain.
(9) Laws and Regulations.
Incorporated into this agreement, by reference and
as though set forth herein verbatim, are the policies,
standards, and regulations adopted or to be adopted by the
Kerrville-Kerr County Joint Airport Board, or by any other
governmental agency legally responsible for the airport.
Such policies, standards and regulations shall be lawful,
reasonable and non-discriminatory. Further, all parties
hereto agree to comply with any and all laws and regulations,
including those of the Federal Aviation Administration, and
will not permit the premises covered by this agreement to be
used for any unlawful or improper purpose.
(10) Insurance.
Each Lessee shall at all times have in effect
liability insurance for all of Lessees' operations in the
amounts of $100,000 per person, $300,000 per accident-bodily
injury, and $100,000 per accident-property damage. Such
insurance policies shall further name the City of Kerrville,
the County of Kerr and the Board, as additional insureds. ~
i
Certificates of such insurance shall be furnished
~J
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by Lessee to the Kerrville-Kerr County Joint Airport Board,
and a Certificate presently then in effect shall be on file
at all times.
(11) Use Charges.
The standards and regulations enacted by the Joint
Airport Board, or other governmental agency responsible for
the operation of the airport, now or in the future, may
provide for use charges to be paid by those using, occupying,
or conducting operations at the airport. Such charges may
be based upon square footage, receipts, or other reasonable
basis, to be established by such standards and regulations.
Lessee agrees to pay such charges as same are due and owing
under any such standards or regulations, now or hereafter in
effect. Any such use charges shall be lawful, reasonable
and non-discriminatory.
(12) Consent by Board.
This agreement shall contain an appropriate space
for approval by the Kerrville-Kerr County Joint Airport
Board, Kerr County and the City of Kerrville. This agreement
shall never be effective without the consent o£ all three.
(13) Indemnity.
Lessee, and other users of airport property, agree
to save and hold harmless the City of Kerrville, County of
Kerr, the Kerrville-Kerr County Joint Airport Board, and
their agents, servants, and employees of and from any and
all liabilities, expenses, causes of action, damages, and
attorney's fees resulting or to result from any businesses,
operations, occupancy, or use of the airfield, or resulting
from any act or omission of any Lessee's or others' agents,
servants, or employees. And this indemnity agreement shall
apply and protect such City, County, and Board, and their
agents, servants, and employees, even though it be contended,
or even established, that said City, County, or Board, or
their agents, servants, or employees were negligent, or that j
"~~
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~~
their conduct, or omission, in any way caused, or contributed
to, any such liability, expense, damage, cause of action, or
attorney's fees.
(14) Purpose and Premises.
The purpose of the lease and the operations to be
conducted by lessee or sublessee, and the indentity of the
premises to be occupied, are set forth in this lease. No
other operation, operations, business, or occupancy may be
had or done without the additional written consent of the
Board.
A sketch or plat of the premises covered by this
agreement shall be attached prior to approval by the Board.
~- (15) Assignment and Sublease.
This agreement may not be assigned, in whole or in
part, nor may the premises described herein be subleased, in
whole or in part, without the prior written consent o£ the
Board. Such consent shall not be unreasonably withheld.
EXECUTED this
LESSOR:
CITY OF KERRVILLE
BY:
TITLE:
COUNTY OF KERR
BY:
TITLE:
LESSEE:
RR, LTD.
1980.
BY:
SOHN DUNCAN
TITLE:
BY:_
W. F. RODEN
TITLE:
BY: SHELTON RANCH CORPORATION
BY:
ROBERT R. SHELTON, Pres. &
General Partner
day of
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.. :rVe r:?;AIBIT A =_s. :_ _,cv
DOM,fNGUES & ASSOCIATES, fNC.
R' IRAL AND OITV SURVEYING
' SUBDIVISION PLANKING PND SUP.VEYING
609 SIDNEY BAKER i KERRVILLE, TEXA$ 78028
TELEPHONE (512) 896-6900
July 16, 1980
R.R.LTD. Job No. 2346
Ic~yd Jaiy
2926 Ceetee Street
San ,~ntonio, Texas 78217
Field notes for 3.32 acres , for R.R.LTD Hanyar, Kerrville Municipal `
Airport.
All that certain tract or Ixirc-el of land lying and being situated in
the County of Kerr, State of Texas, corpringing 3.32 acres of land,
out of Original Survey No.44, O.V.Fnbinson, Abstract No. 282, being
rs-3rt of the Ic~uis Schreiner Airport, and s~il~ject tract being more
~rticularly described by i;etes and bounds, as follaas, to wit:
B:;~,N^.QING at an iron stake sit where a li:.e parallel to and 3C0 feet
SE of the center of existing 100 foot wide iv'E - SW runway intersects
a line nLnning parallel to ~s,d 50 fetes East of the extension of an
~>>isting 40 foot wide taxi way mining N.15°36'W., located at-~proxi,Tately
2343.2 ftxt N. 39°30'W. frcm a creosoted post, the SE corner of a
2 acre tract previously leased to ihLkes Astronautics Co., being t,~
SZ9 ~z~rner of It~t No. 16 of Shady Grove Sulxlivision as recorded in
Volu^ne 1 at Page 48 of the Plat Rc'COYUS of Kerr County, Texas, and
being a ~rner of the said Au-port property;
T.~^1CE along a line parallel to and 300 feet SE from said existing
100 foot wide NE & SW runway, also parallel to and 100 feet SE from
existing 40 foot wide taxi way, N.32°C6'F.. 387.7 feet to an iron
sta;ce, the North corner of subject tract;
Tirl""vr'CE 5.57°55'E. 131.2 feet, an iron stake, and 5.15°36'E. 400.0 feet
to an iron stake, the SE corner of subect tract, in the North line
of a'proposed 100 foot wide Taxi-Finadway;
Tkt"-?dCE with the North line of said 100 foot wide Taxi-Roadway, 5.74°24'W.
375.0 feet to an iron stake, the SW corner of subject tract;
THENCE N.15°36'W. parallel to and 50 feet East of the extension of
an existing 40 foot wide taxi ways 236.0 feet to the place of beginning.
1
Surveyed on the ground and field notes written by Dcmingues & Associates,
Inc.'; Charles B. Daningues, President,Registered Public Surveyor No.1713,
and, Louis Dotningues, Vice-President, Registered Professional Engineer
No. 1633, Rogister-d Public Surveyor No.222,a Licensed State 7an3
Surveyor and County Surveyor of Kerr County, 'Texas.
Cnarles B. Dcmingues
President
Registered Public Surveyor No. 1713
609 Sidney Baker Street
Kerrville, Texas 78028
Telephone (512) 896-6900
_;,
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~ ~~/~~ PROJECT
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RRAG70R S
RaNCE
\_
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--- ---
- - U-5_~: HIGHWAY 27-
- AIRPORT LAYOUT _
SCaLE 1-~= 500' _ - ~
~_
-- - - .~ -~ ~=r--.~= __ -_~.__. ------_-- ___ ---

~~S ~'~1 trordry
~/ /~ .. ~4YJ{ G c~
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FX77TRTT R
1. Eleven (11) Pages of Plans filed with Lessor dated October
17, 1980, prepared by Jary & Sanchez Assoc.
2. Specifications set #11 filed with Lessor prepared by
Jary & Sanchez Assoc.

Iv ~.
DO~'~~ill~rGUES ~ ASSOCIATF_S, ITJC.
RURAL AND GTY $URV El• It:G
SU BDI V. SIGN PLA`T,71 r;G AKD SURVEYING
' L09 SIDNEY BAKER ~ KERRVILL E, 7EXAS 75G26
- TELEPHONE (517) E9E -69D0
July 16, 1980
R_R, L4~. Job 130, 2356
Ioyd Ja_-y
2426 Cc~tee StsEz_t
Ssn Ant_-nio, 7L•_as 78227
Fie]d notes for p:cr_,,c=_33 100 fart wide. Taai ic,7~:~ay, I~e~zviIle
l:znici~l Auyort.
All that certain tracrt or pis cel of Land lying and bezng situated in
t`~ Ca,znty of Kerr, State of Tc~~:as, cxlr~rising 2.9 acres of land,
azt of Original Survey 130, 49, O.V.h~birscn, ,bstract Igo. 282, being
part of 7AUis Sc1;:.e;nar Ai1,a~rt, r_nd being a strip of lznd 100 feet
ti-ide, running fray 7~->=~s Y.?,nlrhay D_a=sil,~s~t b._snline of pruxsed
rend to er.istiJ-~g 4G f~~t wide tr_xi way, and s,ibject ;_-~,ct ra_ir,g
rore p3rt_ic-ularly d=scr;`2~3 >Ty r„~tes ar,d iu,mrs, as fo11o..~, to w-it:
P~7]~'tiL'~'G at a~ i1u7 s`_ti};e set at stotian 157+73.1 cri said Te>_?s
Hic`:.:ay If==zline, 1o:atc3 apt,io>:;r;,,{Ply 1822.1 fc~t N.9°11'W. fran
a cree~tcd post, f_~ SE c~r,~er of a 2 acre tract pz~vio.:sly lca:-~3
to Dakcs rstrrr~autics Cb., t.~ing t_he ~* a~rT,er of 7nt 1:0. 16 of
5?..~dy Grrn~e SLLb3ivision as re~ic~,3 in Volli~ 1 at Faoe 48 of the
Plat Rc-cords of 3:err O~,v~ty, 7~~:as, °=.*~d L=ping a comes of t]~ said
.':irp0rt property;
Tn`~ S.79°24'W. 1211.5 feet t~ a nail in NE edoe of~existing
40 foot wide tax; way, rwzning perpendicular to existing 100 foot
wide NE s ST4 rurr..ay; _
7S'~i with NE e3ge of pav~nt of said existing 40 fit wide
taxi way, N_57°55'W. 135.2 feet to a nail, the NW o0rr~r
of subject tract;
Tiu~l.i N.79°24'E., at 147.9 feet, the SW corner of a 3.32 acre
tract, at 522.9 feet, the SE wrner of said 3.32 acre tract,
a total distsnce of 1328.5 fc-et to an iron stake, set an
aforesaid 7~x:as Highway ]xseline;
'Ih~=33C~ with said 7~css Hig7rway hseline, S.1°09'E. 103.3 feet
to the place of Ix~ginning.
Surveyed on the gro,md and field notes written by Ixmingues &
Pssociates inc., Cfi3r-les B. Bo-~nzes, President, RAgistered Public
Surveyor 130. 1713, ar~i, Louis ~xni_ngues, Vim-Presic~t, R•gistered
Professia-~l En?ineer tJO. 1633, R~7istercxd P,iblic Surveyor 130.222,
a Lia~~sF~ State Lana Surveyor and Coanty Sllrti-eyor of 'reSr (b,mty,
Texas.
G~arles B. Do:Lingues
President
IR~gistera3 Public Surma}ror 1'»_1713,
609 Sidney Porker Strc-et
3cPxrville, 'Im:zs 78028
7tlep'~,e (512) 896-6900
Filed~_D of. _ .A. D. 19~.~ ~ `
EMM1E NKER ~ ~-~~' ~~~ ~
Cla unty urt, ea eras
By ~ I
J
OYder iyo. 7,4205 gETV7EEi~
E AGI2EEt'~~T gg COUNT`X r
APPROVAL OF REggVILLE 1'S7D sZE
TiiE CITY OED LTD, , LE55EE
I,E5SOi'` AED
7.2-3'19$0
„~~e 636