ORDER NO. 15147 APPROVAL OF LEASE AGREEMEIdT BETL'~1EEId THE CITY OF KERRVILLE AND THE COUNTY OF KERR, TEXAS, LESSOR AND I:X AVIATION, INC., BY JOHN L4ILLER, JR., PRESIDENT, LESSEE On this the 15th day of August 19E3, upon motion made by Commissioner Holland, seconded by Commissioner Guthrie, the Court unanimously approved a Lease Agreement, between the City of Kerrville and the County of I:err, Lessor and I:X Aviation, Inc., by John P4iller, Jr., President, Lessee. Said Lease Agreement was approved as is, with an addition to Sub-paragraph F - 16, as follows: "Provided however, any subsequent assignee shall thereupon be bound by the terms and conditions of this lease". ERR, • COUNT`S OF o-O„o_o-O'O ° o_o Y OF KERRY 3R S PRESx ENT, LRSSES conded o- NT BE'~EEN THE CIT N MILLER, golland' OGREE~ ON. INC., B~ JOL3 e by Commi-ssi°ner wean the City PROVAL OF LEASE ~ AVIATI motion tsad reement. bet AP SSOR AND uP°n Lease Ag ler, 3r., NO 15147 TEXAS, 15 h day °~ August Ig83 mously apprOVed a Ina.: by Sohn 'Mil ~ s the the ours unany and Aviation, aragraPh F - 16: as th loner Guthrie, f Kerr, Lessor ~ by C e~ vine and the County ° ys, wyth an additi hey up n be bound by the terms °£ K Lessee' a FrOQed as ee shall t President> reement was a y subse0uent assign Said Lease Ag r~ - " „ ovided howeve _ foil°ws' P° s of s lease ' o_O-o-o-o"O..o-o"°"O- 4 thi d aonditi ___-~--~ an ORDER NO. 15147 APPROVAL OF ELASE AGREED'1ENT BET6dEEN THE CITY OF PERRVILLE AND THE COUNTY OF I:ERR, TEXAS, LESSOR AND I:X AVIATION, INC., BY JOHTd gIILLER, JR. , PRESIDENT, LESSEE E3-15-33 VOL. P, Page 355 LEASE AGREEMENT THE STATE OF TEXAS § THE COUNTY OF KERR ~ KNOW ALL MEN BY THESE PRESENTS: 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 the undersigned Lessee, hereinafter called Lessee; W I T N E S S E T H: 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 tracts of real property situated in Kerr County, Texas, described as Tract 3 and "Fuel Site" on Exhibit "A" attached hereto and made a part hereof by this reference, and all public areas, ramps, roads, runways, taxiways and aprons of the Kerrville Municipal Airport (the use and lease of such public areas to be in common with others), hereinafter collectively sometimes called the "Leased Premises", together with all and singular the rights, easements, privileges and appurtenances in anywise belonging unto said above-described tracts of land. 2.A. Lessor shall provide to Lessee and its guests, invitees, representatives and agents, reasonable road access to and from the Leased Premises to public roads, taxiways and public areas, at no additional rent or cost to Lessee. 3. Term. To have and to hold, with possession to Lessee of the Leased Premises, for a term of thirty (30) years, beginning on~ ~_ ~~ ~, 1983, and ending at 11:59 p.m. on ~ A /., (~- 32, 2013 (hereinafter sometimes called the "Lease Term", which term shall include any renewal hereof in accordance with the terms hereof) upon and subject ~ ~ ' TST/b 8/3/83 to the terms, covenants and conditions herein set forth, unless earlier terminated, 4. Rental. A. Basic Rental. Lessee shall pay to Lessor as Basic Rental for the Leased Premises the sum of Eighty Eight Dollars ($88.00) per month per acre, or $ {:~~.`tC ~ such amount being payable in monthly installments, payable in advance, The first such monthly installment shall be due and payable on or before the beginning of the Lease Term, 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 practi- cable after the end of each five (5) years after the beginning date of this Lease, Lessor shall compute the percentage of change (increase or decrease), if any, in the cost of living during the period between the beginning date and the date of each fifth anniversary thereof during the term of this Lease, based upon the changes in the Consumer Price Index for Urban [4age Earners and Clerical Tv7orkers - 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 co.-nmencement date of this Lease is 3(x{_1 ~Oi1F~~~3 (herein called "Base Index Number") . If the Consumer Price Index Number for the month in which any such fifth year anniversary of the beginning date shall occur (each such number being herein called an "Anniversary Index Number") is higher or lower 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 number, multiplied by TST/b 8/3,'83 . ~_ ~' one hundred, shall be deemed to be the percentage of increase or decrease in the cost of living. Such percentage of change shall be multiplied by the Basic Rental and the product thereof shall be added to or subtracted from the Basic Rental to determine the annual rental payable for the next five year period commencing on the immediately preceding anniversary of the beginning date {such amount being herein sometimes called "Adjusted Basic Rental"). Such Adjusted Basic Rental shall be calculated in the above manner during each fifth year of the Lease Term. Lessor shall, within a reasonable time after obtaining the appropriate data necessary for computing any change in the annual rent, give Lessee notice of any change 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. As an example, only, of the foregoing adjustment: a. Assume Basic Rental is per acre $100.00 per year, b. Assume Basic Index Number is 200, c. Assume Anniversary Index Number on the fifth anniversary date of the commencement date is 300, then based upon the foregoing, the Annual Basic Rental shall be: Anniversary Index Number 300 r Base Index Number 200 = L S - 1 = . 5 x 100 = 50 = 50~ 50% x 100 = 50.00 50.00 + 100.00 = 150.00 Adjusted Basic Rental. If there is a change in Basic Rental, and if monthly installments of Basic Rental have been paid before such change is calculated, the difference in the old Basic Rental ~' , ' 1 TST/b 8j3/8;3 and the Adjusted Basic Rental shall be paid with, or credited to, the next due installment of Basic Rental. 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 o£ this Lease, without offset of any kind. 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 cove- nants and agrees timely to pay to Lessor at City Hall, Kerr- ville, 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 of Improvements. As of the effective date hereof, Lessee has prepared and submitted to Lessor, and Lessor has approved, plans, specifications, and an architect's rendering for Lessee's proposed improvements {herein called "Improvements") to be constructed on the Leased Premises. Such improvements shall be those necessary for the performance of the mandatory services required hereinbelow approved. Those renderings, plans and specifi- cations are attached hereto as Exhibit "B". Upon execution hereof, and Lessee's obtaining all required building permits, 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 six (6) months of beginning date hereof, except that in the event of TST/b 8/4/83 ` ~ 1 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 regula- tions applicable thereto; it being understood that all hangers shall comply with the windload standards imposed by the City of San Antonio for the San Antonio airport, and if such hangers comply with such standards the same will comply with the terms of this Lease. 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 through- out the Lease Term, and upon termination, Lessee shall have a reasonable time in which to remove all its improvements. Upon such removal Lessee shall restore the premises to its original condition. All of Lessee's utility services shall be underground. Notwithstanding the foregoing, Lessee shall have the right, subject to any liens, to donate or give all or any improvement and/or tangible personal property, including ~' TST/b 8/3j83 portable hangars to the Lessor and the Lessor agrees to accept the gift of any such improvement or hangar. After such donation, Lessee will nevertheless continue to have the use of any such donated property during the term of this Lease, without any increase in rent by reason of Lessor's ownership. Such donation shall never have the effect of Lessor becoming liable for any debts or liens secured by any such property, and any such donation shall never alter or impair Lessee's obligation during this Lease Term to main- tain and repair buildings and improvements. 7. 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 Leased Premises for the purposes herein provided, subject only to any express restrictions set forth herein or imposed by applicable law or ordinance, or (ii) terminate this Lease, whereupon any insurance proceeds collected by Lessee pursuant to policies held by Lessee in accordance with this Lease shall be paid to Lessee. Except, if Lessor has become the owner of any improvements, as herein provided, then the insurance proceeds 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. 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 $50,000.00, plus 5o per annum for each year after date hereof. 8. Property Damage Insurance. A. Lessee, at its expense, shall during the entire Lease Term keep the Improvements insured against loss ~, ~ / TST/b 8/3/83 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 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 proceeds, any excess shall be paid to Lessee. If any of the improvements are donated to Lessor, as herein provided, Lessor shall be a loss payee in such policies of insurance, to the extent of its interest and as its interest may appear. 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. 9. Taxes and 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. All ad valorem taxes upon or with respect to the Lessee's leasehold estate and the Improvements shall be . , _, "'} TST/b 8/3/83 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 assessed 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 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. Notwithstanding 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. 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 _, TST/b 8/3/83 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 ogerating 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 utilities or ad valorem taxes on real estate, 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. 10. Use. Lessee's use of the Leased Premises shall be limited to the mandatory services specified in this Lease and the following: Any use otherwise lawful provided for in the "Kerrville - Kerr County Airport Policies and Standards", and including: A. Flight Training B. Aircraft Rental C. Aircraft Sales D. Hangar Storage Facilities E. Airframe and Power Plant Repair F. P.adio and Instrument Repair Services G. Miscellaneous Aeronautical Operations. 11. Mandatory Services. Lessee shall provide the following services: A. Aviation fuel and oil sales and service; B. Car rental service, including return of auto at the airport; C. Air taxi and charter service; and D. Tie down services. The twenty-one (21) existing aircraft tiedowns on the concrete pad will be managed by the Lessee. In addi- tion, the Lessee may provide additional tiedowns in the grass areas east and west of the diagonal taxiway as shown ' ~ -, TP'1'/b 8/? /83 ._ as Tracts 12, 13 and 14 on Exhibit "A". Lessee will provide the tiedown ropes, anchors, insurance, management and service and Lessee shall receive all tiedown rental from such location=_. Lessee shall commence providing such services on or before ninety (90) days after date hereof, and shall continue to provide same continuously during the Lease Term. In the event Lessee's permanent improvements are not complete within ninety (90) days, Lessee may provide such services from temporary facilities. Such mandatory services shall be provided from thirty minutes before sunrise to thirty minutes after sunset, seven days per week. 12. Local Management. Lessee shall have in charge a competent and experienced local manager who shall be responsible for the day-to-day operation of the Fixed Base Operations under this Lease. 13. Operation of Radio. Lessee shall operate and man the existing Unicorn radio from 30 minutes before sunrise to 30 minutes after sunset, seven days per week. In the event Lessor desires to substitute a different kind of radio or communications system, in lieu of the Unicom, then the Lessee shall operate such substitute system. Lessee shall not be obligated to maintain or repair the Unicom or any substitute communications system, and shall not be required to expend any man hours in the operation of a substitute system over and above what is necessary and reasonable for the operation of the existing Unicom. Lessee shall have exclusive use of the Unicom (or substitute) for advisory purposes. 14. 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, 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 TST/b 8/3/83 -, 1 V 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. 15. Default. A. In the event of any failure of Lessee timely to pay in full 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, or of the Airport Standards and Regulations, for more than ninety (90) 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 below, then and in any of such events, Lessor shall have the right, at its option to terminate this Lease, and shall also have the immediate right of re-entry and may remove all persons and pzoperty TST/b 8/3/83 ~`-~ 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 90 days, but Lessee shall commence within such 90 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. B. 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. C. In the event of termination of this Lease, then Lessor shall thereby acquire and own all of the Improve- ments, buildings and appurtenant fixtures theretofore donated or transferred to Lessor. Lessee shall be entitled to remove all other improvements, chattels, books, records, trade fixtures, equipment, airplanes, and all other personal property from the Leased Premises, and Lessee shall not be further liable or responsible to Lessor for payment of further rent or performance of further obligations hereunder. TST/b 8/3/83 ~ ., -~ 16. Leasehold Mortgage. Lessee shall have the right to grant mortgages to any bank, insurance company, other lending institution, or any governmental agency, 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- ~ ' 16. Leasehold Mortgage. Lessee shall have the right to grant mortgages to any bank, insurance company, other lending institution, or any governmental agency, 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 other 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 Obligations. Lessor will accept performance by any Portgagee who has theretofore notified Lessor in writing of the existence of such mortgage, within the following periods of time (which shall be concurrent TST/b 8/3/83 (_ '' ~ ~ i y,,ith the time periods set forth above) of any term, covenant or condition to be performed by Lessee: (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 ninety (90) days after such notice is delivered to such Mort- gagee; provided, however, that with respect to any such default which cannot reasonably be cured within such ninety (90) day period, Lessor will accept performance by any Mortgagee if such Mortgagee has commenced to cure such default within ninety (90) 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 Portgagee 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 90 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 ninety (90) 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 TST/b 8/3/83 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 ninety (90) 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) days after delivery to Lessor of notice 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 attorneys' 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 of 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 or by an agreement of record between all such D7ortgagees covering 1 TST/b 8/3/83 - 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 Mortgagee or its designee or nominee until such parties shall pay all amounts (including any fees or use charges) due Lessor. In no event shall the 2ortgagee be under any obligation or liability whatsoever with respect to any such New Lease entered into by its designee or nominee. D. Mortgagee's Possession. 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 Portgagee shall release Lessee of any liability which it may have as a result of any provision of this Lease. E. Estoppel Letter. Lessor shall, if required, confirm to Mortgagee that this Lease sets forth the entire agreement of the parties thereto, is in full force and effect in accordance with its terms, and has not been amended, modified or assigned, except as herein set forth; state what, if any, offsets or credits against rentals exist and what rentals are due under this Lease to the date thereof, and what, if any, defaults by either party or ground for cancellations exist under this Lease. F. Foreclosure. If such Mortgagee succeeds to the interest of the Lessee under this Lease, it shall be bound to all of the terms, covenants and conditions set TSTjb 8/3/83 ,l _ , ~ ~- forth herein from and after its succession to such interest; provided that it and its successors and assigns shall have no corporate or personal liability for the performance of the obligations of the Lessee hereunder, and its liability and that of its successors and assigns for any and all defaults of the Lessee under the terms of the Lease shall be limited to its interest in the Leased Premises, including all improvements, and in connection with any foreclosure under the Deed of Trust, or transfer in lieu thereof, or if subsequent thereto, Mortgagee is the successor or in the case of the foreclosure of the Deed of Trust, the Trustee under the Deed of Trust shall be authorized and may assign ~~ transfer or sublease this Lease to any other party without T S f8~8, the consent or approval of Lessor. Provided however, any subsequent assignee shall thereupon be bound by the terms and conditions of this lease. 17. Lessor's Right of Entry. Lessor shall have the right, upon reasonable notice, to enter upon the Leased Premises at reasonable times for all reasonable purposes, ~--I~' 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. 18. 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. 19. Surrender of Leased Premises At the expiration of the Lease Term, Lessee shall peaceably surrender the Leased Premises. 20. 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 the rental for the last month of the Lease Term, and shall otherwise be on the terms and conditions herein specified, insofar as applicable. TST/b 8/3/83 ~ 21. 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. 22. 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 matured, shall fully survive any such termination and shall be and remain in all things enforceable hereunder. tst/b 8/3/83 ~' : ~ B. Zf 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 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 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 fore- going 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 Premises 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 improve- menu affected by such taking. 23. Lessor's Warranty. Lessor warrants that Lessor has good title to the Leased Premises, and has the right to make 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 ~r ~, TST/b 8/3/83 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 or claiming under Lessor, or those holding or claiming under a right or title superior to Lessor's; provided, however, that this warranty is subject to, and does not warrant against the effects of, present or future building ordinances or other governmental laws, rules, regulations, orders or actions, or the exercise of any power of condemnation or eminent domain. 24. Examination o£ 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. 25. 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 5 '` TST/b 8/3/83 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 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 invali- dating any insurance coverage. 26. 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: Post Office Box 927 Kerrville, Texas 78028 If Lessor is the party to receive such notice, demand, request or instrument, then the addressee and address for Lessor shall be: . ., ~ TST/b 8/3/83 City Hall Attention: City Manager 600 Main Street Kerrville, Texas 78028 Either party may change such addressee or address by notice to the other party as provided hereunder. 27. 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. 28. Partial Invalidity. If any term, covenant, or 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. 29. 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 or 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. 30. Standard Lease Provisions. (1) Discrimination. a. Lessee shall furnish services on a fair, TST/b 8/3/83 ( ~ equal, and not unjustly discriminatory basis to all users thereof; and b. Lessee shall charge fair, reasonable and not unjustly discriminatory prices for each unit or service; provided that reasonable and nondiscriminatory discounts, rebates, or other similar types of price reductions to volume purchasers may be made. c. Lessee, in exercising any of the rights or privileges herein granted to it shall not on the grounds of race, color or national origin, discriminate or permit discrimination against any person or group of persons in any manner prohibited by Part 21 of the regulations of the Secretary of Transportation. The Lessor is granted hereby the right to take such action, anything to the contrary herein notwithstanding, as the United States may direct to enforce this nondiscrimination covenant. (2) 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, hocaever, waive any right to compensation for any taking under power of eminent domain. (3) 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 tst/b 8/3/83 on its own aircraft with its own regular employees (including but not limited to maintenance and repair) that it may choose to perform. Such person, firm or corporation may employ contractors to perform services on its own aircraft which require technical services not available at the airport. (4) 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 Lessee to exclusive possession of leased premises. (5) 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. (6) 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. (7) Maintenance of Facilities. All hangars, buildings, properties or land on the airport (whether real estate or tangible personal property) shall be maintained in a clean, attractive, weed free, well painted, junk free, condition, and kept in good repair. 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. (8) Structural Hazards. Lessor reserves the right to take any action it considers necessary to protect the aerial approaches of the airport against obstruction, together with the right to _` ~ TST/b 8/3/83 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. (9) 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 o£ 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. (10) 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. (11) Insurance. Each Lessee shall at all times have in effect liability insurance for all of Lessee's operations in the amounts of $1,000,000 per person, $1,000,000 per accident- bodily injury, and $1,000,000 per accident-property damage. Such insurance policies shall further name the City of Kerrville, the County of Kerr and the Board as additional insureds. Certificates of such insurance shall be furnished by Lessee to the Kerrville-Kerr County Joint Airport Board, and a certificate presently then in effect shall be on file TST/b 8/3/83 1 '~ ~ _ at all times. (12) 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. (13) 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 of all three. (14) Indemnity. Lessee agrees 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 of Lessee's businesses, operations, occupancy, or use of the airfield, or resulting from any act or omission of Lessee's 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 their conduct or omission in any way caused, or contributed to, any such liability, expense, damage, cause of action or attorney's fees. TST/b 8/3/83 .' (15) Purpose and Premises. The purpose of the lease and the operations to be conducted by Lessee or Sublessee, and the identify 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. (16) 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 of the Board. Such consent shall not be unreasonably withheld. (17) Liens and Insolvency. Lessee shall keep the premises free from any liens arising out of any work performed, materials furnished or obligations incurred by Lessee. In the event-Lessee becomes insolvent, or the subject of any kind or chapter of bankruptcy proceeding, or if a receiver, assignee, or other liquidating officer is appointed for the business of Lessee, then Lessor may cancel this lease at Lessor's option upon giving written notice to Lessee. 31. Right of First Refusal and Option. A. Lessor hereby grants to Lessee a five year right of first refusal on Tracts One (1)_ and Nine (4), according to that certain plat prepared by the City of Kerrville, and attached hereto as Exhibit "A" B. In the event, that during the first five years of the Lease Term Lessor desires to sell or lease either tract, then the proposed Lease Agreement, Earnest r2oney Contract, or other instrument of proposed transfer shall be furnished to Lessee, who shall then have thirty days within which to execute and return such proposed instru- ment. If the proposed instrument requires any other TST/b 8/3/83 contemporaneous performance, such as earnest money, security deposit, or advance rental, then Lessee shall render such performance contemporaneously with the execution of the instrument. The failure of the Lessee to execute, or perform, within the thirty days, shall constitute Lessee's full and final refusal. C. This right of first refusal terminates five (5) years from the beginning date of this lease, and there- after Lessor is free to alienate the said tract in any manner it desires. D. Lessor hereby grants to Lessee a five year exclusive option to lease Tract 2 described in Exhibit "A" attached hereto and made a part hereof by this reference, upon the same terms, rental and provisions as herein provided; provided that such option is exercisable on written notice to Lessor if Lessee is not in default hereunder. _ E. This option terminates five (5) years from the beginning date of this Lease, and thereafter Lessor is free to alienate the said tract in any manner it desires. Vrsfi2f ~3r~s 32. Electrical~Easement. Lessor hereby~grant$ to Lessee an easement for the purpose of constructing, repair- a~.c w~t./ ing, and maintaining electricalnservice as follows: (,'~S {-i:C~a•t •.sl~ 11 ~t..~ •5 ~t •'9 ~itif yw -y l / ~ V TST/b 8/3/83 33. Exceptions to Standard Lease Provisions. The following shall modify the Standard Lease Provisions set forth above: A. Lessee may rent hangars, hangar space, and tiedowns to owners or operators of aircraft and may delegate portions of the services and operations herein required by concession sublease or other agreement, as it may determine, all with- out the consent of Lessor; provided that Lessee shall remain liable and responsible hereunder. Such subleases, concessions and agreements shall, however, be limited to short-term periods, and not comprise a substantial portion of the Leased Premises. This Lease and/or the Leased Premises may be transferred as permitted under the provisions of Paragraph 16. B. The fuel flowage fee on fuel shall not exceed $0.04 per gallon, or 2-1/2~ of the retail price of fuel (whichever' is greater), for the first fifteen years of the Lease Term. For the second fifteen years of the Lease Term, the fuel flowage fee on fuel shall not exceed the greater of the following amounts: $0.04 per gallon, 2-1/2e of the retail price; or the average of fuel flowage fees of the following named airports: 1. New Braunfels 2. San Marcos 3. Uvalde 4. Seguin 5. Brownwood In the event that any fuel flowage fee at one of the airports named above becomes zero, or is not assessed, then that airport shall not be considered in computing the average. C. The use charge presently assessed on car rentals is So of the gross. Such percentage shall not be exceeded TST/b 8/4/83 during the first fifteen years of the Lease Term. D. This paragraph applies to the first fifteen (15) years of the Lease Term. Lessor shall assess no use charges, which Lessee pays, other than on fuel flowage and car rental. Nor shall Lessor assess any other use charges which may substantially impair Lessee's sales or Lessee's operations or Lessee's rentals. Specifically, Lessor may not assess landing fees on landings of private aircraft, but may assess landing fees on landings of scheduled carriers, including scheduled air taxi. E. During the second fifteen year Term of this Lease, Lessor shall not assess any use or other charges (other than fuel flowage as hereinabove provided) which exceed the average of the five airports named in Subparagraph B above; using for computation purposes only those named airports which assess the contemplated use or charge. Lessor shall not permit, by lease or otherwise, any car rental operation within the Kerrville Municipal Airport, so long as there is no demonstrated public need requiring certifi- cation for additional car rental operations. Except for the existing private fuel concession of R&R Ltd., Lessor shall not directly or indirectly permit or cause any other private fuel concession or operation at the Kerrville Municipal Airport. Lessor, during the term of this lease, shall not grant fuel sales certificates or leases and shall not permit opera- tions or services on or within the Kerrville Municipal Airport which do not conform to the same standards and covenants set forth in this Lease or which are granted on terms and condi- tions more advantageous than those provided to Lessee herein. ~~, '~ TST/b 8/4/83 F. Lessee shall not be liable for the acts or con- duct of Lessor, its agents, invitees, guests, or employees. 34. Lease Extensions. In the event that Lessee desires to extend the term of this Lease for an additional ten (10) years, then Lessee shall give written notice of such desire, on or before the end of the twenty-fifth year of this Lease. After the giving of such notice, the parties shall thereupon engage in good faith negotiations for a period up to ninety days after the end of the twenty-fifth year, for a ten year extension on the Lease Term. The subject of the negotiations shall be the amount of rental to be paid, and other use charges, which the Lessee may be required to pay, including fuel flowage fees, percentage of car rents and other revenues, landing fees, and the like. In the event that the parties are unable to agree by the end of such ninety day period, then within ten (10) days after the end of such ninety day period, each party shall select an American Arbitration Association arbitrator. The arbitrators will be bound by: (a) the appraised fair market value of the ground used bX the Lessee (excluding all improve- ments) and a fair return to Lessee thereon; and (b) comparable fees and charges in effect at comparable airports. Such arbi- trators shall have ninety days after the expiration of the said ten day period to reach a decision. If within such time the arbitrators are unable to agree, or, their decision is unacceptable to either party hereto, then the arbitrators shall select a third arbitrator of the American Arbitration Asso- ciation, and thereafter, the arbitrators shall have an addi- tional period of ninety days to reach a decision. A decision of two out of the three arbitrators shall be final and binding upon the parties hereto. In the event that Lessee desires to extend this Lease Agreement for a second term of ten years, then on or before the end of the thirty-fifth year of this Lease, Lessee shall give written notice thereof to the other. The same procedure shall then ensue as set forth above, and result in an additional ten year extension of this Lease Agreement. t ~ j TST/b 8/3/83 The agreement set forth herein has been agreed upon based on the advice of counsel, as evidenced by the signa- tures of the parties and their respective attorneys. 35. Death of Principal. In the event of the death of JOHN W. MILLER, JR., Lessee, upon six (6) months written notice, may terminate this Lease. 36. Site Work. Within sixty (60) days after the execution hereof, Lessor agrees to complete the following site work: A. Provide underground drainage improvements into Tract 1 from the roadway/taxiway adjacent to the northerly side of said Tract 1. B. Construct a thirty (30) foot wide paved taxiway along reserved strip 4. C. Fill drainage ditch along the easterly edge of the concrete ramp on Tracts 2 and 3. If so desired by the Lessee and mutually agreed upon by the City and County, the improvements described in Item "B" of this section may be deleted and a like cost provided for the grading of Lot 3. 37. Notice of Standards. The Airport Standards set forth the minimum requirements for services offered by Lessee. Such standard minimum requirements pertain to hours of operation, building space, personnel and the like. Lessee should take special notice of the current minimum standards for the mandatory services required herein. 38. Lessor Covenant/Default. Lessor shall not directly or indirectly do, commit or permit to be done or committed, any act, occurrence or condition which impairs or prevents the operations on the Leased Premises and the conduct and use of the Leased Premises for the purposes herein specified, including without limitation the services and operations required hereunder. Lessee shall not be in default here- under if any occurrence constituting a default is caused or results from the acts of Lessor. If the Lessor shall be in TST/b 8J4/83 ' ` ~ J ' Y 1 / default hereunder, Lessee may terminate this Lease or pursue whatever right or remedy as may be available at law or in equity. 39. Public Areas. The Leased Premises include the public or common areas of the F:errville Municipal Airport and Lessee agrees and acknowledges that the use of such areas shall be in common with others. Lessor shall maintain such areas at its cost in a condition which is the same or better than existing on the date hereof (reasonable wear and tear excepted), and such areas and the improvements thereon shall not, without Lessee's consent in writing, be altered or changed in any manner which would materially and adversely affect the use of tlh/e, Leased Premises by Lessee. EXECUTED this ~~day of ~y~gMsf^ , 1983. LESSOR L/E~/SS,E\E CITY F ERRVI /~/~nhiV,\R.~~OM~ ~ . By: Byi~ Tit Title: r~. Tho s . o11a John Miller,~~r ~Cn'~. COUNTY F RR ~ By: uii~ ~uuyC ~S. orr ss KERR~COUNTY JOINT Its Chairman E. M. Anderson The undersigned attorneys for the respective parties to this Lease join herein in acknowledgment only that the agreement set forth in paragraph 34 of this Lease has been entered into upon the advice of, and after conferring with, the respective attorney for each such party. i _. ~ , . Attorney for Lessor~f Attorney "r Lessee Thomas S. Terrell `J David L. Jackson .. -` - TST/b 8j3/83 THE STATE OF TEXAS § THE COUNTY OF KERR § BEFORE ME, the undersigned authority, on this day personally appeared T/,,,„~, (~/ r~,//4~~ who is the nl,;,,,r of the City of Kerrville, known to me to be he person whose name is subscribed to the fore- going instrument, and acknowledged to me that he executed same for the purposes and consideration therein expressed, in the capacity therein stated, and pursuant to the resolu- tion of the City Council of the City of Kerrville, Texas. GIVEN UNDER MY HAND AND SEAL OF OFFICE of ~, ,~ 1983. ~~J Notary Public State of Texa THE STATE OF TEXAS § THE COUNTY OF KERR § this ~~ day Sheila L. Brand P;o?ary Public A".y Commission Expires 12-1, 84 BEFORE ME, the undersigned authority, on this day personally appeared who is the of Kerr County, Texas, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed same for the purposes and consideration therein expressed, in the capacity therein stated, and pursuant to an order of the Commissioners Court of Kerr County, Texas. GIVEN UNDER MY HAND AND SEAL OF OFFICE this day of 1983. Notary Public State of Texas THE STATE OF TEXAS § THE COUNTY OF KERR § BEFORE ME, the undersigned authority, on this day personally appeared E',/~1. /3.t/nEns o,/.,J,2_ who is the Chairman of the Kerrville-Kerr County Joint Airport Board, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed same for the purposes and consideration therein expressed, in the capacity therein stated, and pursuant to a resolution of said Board. GIVEN UNDER MY HAND AND SEAL OF OFFICE this ~ day of /a~GVST 1983. Notary Pub1i~' ~ State of Texas /r' '° J .~ THE STATE OF TEXAS X THE COUNTY OF KERR X BEFORE ME, the undersigned authority, on this day personally appeared John Miller, Jr. who is the President of KX Aviation, Inc., known to me to be the person whose name is subscribed to the fore- going instrument, and acknowledged to me that he executed same for the purposes and consideration therein expressed, in the capacity there in stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE this 4th day of August 1983. Notary Pub 'c Statepof Texas ~'fi. C'~isr~-ri<-aa~c-EY` Z~C~/'"r'E'e'~ ~/~/ S' ~y ~ mew ~ ' D. 19_6L_ MTR I DY`c dl~n Coo, ~ fi n~~/ A ,, EXHIBIT A FIELD NOTES FOR LEASED PREMISES KX AVIATION, INC. KERRVILLE, TEXAS 78028 T)F.S ~RTPTTnN LEASED PREMISES TRACT l: A 1.84 Acre tract of land known as Lot 3 of an unrecorded subdivision of Louis Schreiner Municipal Airport out of the O.V. Robinson Survey, No. 44, Abstract 282, City of Kerrville, Kerr County, Texas and more particularly described by metes and bounds as follows: BEGINNING, at the North corner of concrete aircraft parking ramp, said point being located WEST, 185.8 ft; North, 996.2 ft; S 76° 20' 30" W, 705.7 ft; and N 13° 38' 00" W, 500.0 ft. from the Southwest corner of Lot 16 of the Shady Grove Subdivision as re- corded in Vol. 1 at page 48 of the plat records of Kerr County, Texas and being the West corner of the here-in described tract; THENCE, N 76° 22'00" E, 200.0 ft. to a i" iron pin set for the North corner of this tract; THENCE, S 13° 38'00" E, 400.0 ft. to a '2" iron pin set for the East corner of this tract; THENCE, S 76° 22'00" W, 200.0 ft. to an iron pin set at the edge of the above referenced concrete ramp for the South corner hereof; THENCE, N 13° 38'00" E, 400.0 ft. to the place of beginning and containing 1.837 acres of land more or less. TRACT 2: FUEL STORAGE SITE A 10,448 square foot tract of land known as a portion of Lot A-6 of an unrecorded subdivision of Louis Schreiner Municipal Airport out of W. M. Pruitt Survey No. 1921, Abstract 1281, City of Kerrville, Kerr County, Texas and more particularly described by metes and bounds as follows: BEGINNING, at an iron pin set in the North R.O.W. of a roadway/ taxiway, said point being located West, 185.8 ft; North, 1874.97 ft; S 76° 21'20" W, 197.55 and N 13° 38'40" W, 60.0 ft. from the Southwest corner of Lot 16 of the Shady Grove Subdivision as re- corded in Vol. 1 of page 48 of the plat records of Kerr County, Texas and being the Southwesterly corner of the tract herein described; THENCE, N 13° 38' 40" W, 125.0 ft. to a iz„ iron pin set for the Northwesterly corner of this tract; THENCE, N 76° 21' 20" E, 97.16 ft. to a 'z" iron pin set in the R.O.W. of future "Airport Loop" roadway for the Northeasterly corner hereof; TH&NCE, with said R.O.W., S Ol° 22' 00" E, 127.88 ft. to a ~" iron pin set at the intersection of said Airport Loop with the aforementioned roadway/taxiway for the Southeasterly corner hereof; THINCE, with said roadway/taxiway S 76° 21' 20" W, 70,0 ft. to the place of beginning and containing 10,448 sq. ft. of land more or less. EXHIBIT A FIELD NOTES FOR LEASED PREMISES KX AVIATION, INC., KERRVILLE, TEXAS Page 2 UTILITY EASEMENTS TRACT 3: A 15.0 ft. Utility Easement across Lots 1 and 2 of an unrecorded subdivision of Louis Schreiner Municipal Airport in 0. V. Robinson Survey No. 44, Abstract 282, in the City of Kerrville, Kerr County, Texas and more particularly described by metes and bounds as follows: BEGINNING, at the most Northerly corner of the concrete ramp said corner being also the most Westerly corner of the above described Lot 3; THENCE, along the Northwesterly line of said ramp, S 76° 22' W, 300.0 ft.; N 13° 38' W, 15.0 ft; N 76° 22' E, 500.0 ft; S 13° 38' E, 15.0 ft. and along the Northwesterly line of said Lot 3, S 76° 22' W, 200 ft. to the place of beginning. TRACT 4: A 15.0 ft. Utility Easement across reserve strip //4 and Lot 5 of an unrecorded subdivision of Louis Schreiner Municipal Airport out of 0. V. Robinson Survey No. 44, Abstract 282, City of Kerrville, Kerr County, Texas and more particularly described by metes and bounds as follows: BEGINNING, at the most Southeasterly corner of the above described Lot 3; THENCE, N 76° 20' E, 408.2 ft; N Ol° 22' W, 15.4 ft; S 76° 20' W, 411.44 ft.; and S 13° 38' E, 15.0 ft. to the place of beginning. OPTION TO LEASE TRACT 5: Being a 2.03 Acre tract of land known as Lot 2 of an unrecorded subdivision of the Louis Schreiner Municipal Airport out of the 0. V. Robinson Survey No. 44, Abstract 282 and being more particularly described by metes and bounds as follows: BEGINNING, at the most Northeasterly corner of the said concrete ramp and the Northwesterly corner of the above described Lot 3 for a point in the Southerly line of this tract; THENCE, S 76° 22' 00" W, 100.00 ft. to a point for the Southwesterly corner of this tract; THENCE, N 13° 38' 00" W, 294.13 ft. to a point in the Southerly line of an existing roadway/taxiway for the Northwesterly corner hereof; THENCE, with said roadway/taxiway, N 76° 21'20" E, 300.00 ft. to a point for the Northeasterly corner hereof; THENCE, S 13° 38' 00" E, 294.19 ft. to an iron pin set for the Northeasterly corner of said Lot 3 and the Southeasterly corner of the herein described tract; THENCE, with the Northerly line of said Lot 3, S 76° 22' 00" W, 200.00 ft. to the place of beginning and containing 2.026 acres of land more or less. RIGHT OF FIRST REFUSAL TRACT 6: Being a 1.35 acre tract of land known as Lot 1 of an unrecorded subdivision of the Louis Schreiner Municipal Airport out of the 0. V. Robinson Survey No. 44, Abstract 282 and being more particularly described by metes and bounds as follows: EXHIBIT'A FIELD NOTES FOR LEASED PREMISES KX AVIATION, INC., KERRVILLE, TEXAS Page 3 Continuation of Description for Tract 6 - Right of First Refusal BEGINNING, at a point in the Northerly line of the concrete ramp, said point being S 76° 22'00" W, 100.00 ft. from the Northwesterly corner of the above described Lot 3 and also being the Southwesterly corner of the above described Lot 2 for the Southeasterly corner of the tract herein described; THINCE, with said concrete ramp, S 76° 22'00" W, 200.00 ft. to a point for the Southwesterly corner of this tract; THENCE, N 13° 38' 00" W, 294.09 ft. to a point in the Southerly line of a roadway/taxiway for the Northwesterly corner hereof; THENCE, with said roadway/taxiway, N 76° 21' 20" E, 200.00 ft. to a point for the Northeasterly corner of this tract; THENCE, S 13° 38'00" E, 294.13 ft. to the place of beginning and containing 1.351 acres of land more or less. TRACT 7: Being a 1.38 acre tract of land known as Lot 9 of an unrecorded subdivision plat of Louis Schreiner Municipal Airport out of 0. V. Robinson Survey No. 44, Abstract 282, in the City of Kerrville, Kerr County, Texas and more particularly described by metes and bounds as follows: BEGINNING, at a point in the Easterly line of a concrete ramp, said point being S 13° 38'00" E, 200.00 ft. from the Southwesterly corner of the above described Lot 3 for the Northwesterly corner of the tract herein described; THENCE, continue with said ramp, S 13° 38'00" E, 300.00 ft. to a point for the Southwesterly corner hereof; THENCE, N 76° 22' 00" E, 200.00 ft. to a point for the Southeasterly corner of this tract; THENCE, N 13° 38'00" W, 300.00 ft. to a point for the Northeasterly corner of the herein described tract; THINCE, S 76° 22'00" W, 200.00 ft. to the place of beginning and containing 1.377 acres of land more or less. I hereby certify that the above descriptions are true and correct representations of actual surveys made on the ground under my supervision. _~ / Z ~.~ fl1 ~~ Ne~ly/ ~ Date R.P.S. /x'1804 ,~?~~..vr. T~•. . .....:.. t•. F. r..a., ..`r~.. . r '~- Q J T 1 x W K Grp e.,.i t'!~~et. ~ h P, pr ~~~ i ~- 1 ~ 6.Gs.., I I I 5 I '~, 720. ~c i r---._........ 420 ~p~ Si~`P ~ a 2d~ 0 ... '~ ~ 1K~ ,' fi ,~, ,~ ~ ••\ ~1 w i =f I~ h ~ ~ iu k- ~ I • N 11 .. it c D i~ 11 ~~ ~ o ~ ~ T nu ~. ~ ~ ~ ;~I 'I 1I - ~ j~i . . ._~ 1~ IOO~ F dL li ~ 1-----~----- ,~ - I~ • ~ T ~_ ~_ ~a t ~ OU ~~• .. ~~2 .... . I~~Y / tV~'~GI.1, E ~I I Q °~TFIP 300' '~-~, ~ ~ x•84 Acres i -~ ~ s •,t- ~$1 'a '~ T Pace 1'x.1' © I ~~~ fV VC}IOF'0~~~2 «~ ' ` I h~ o~ ~ Rco P. 2'i' (7TJ ~ ~ __ CuIOCr{ ® 1 .1 ,~ d' ` 1 C.~ 9 ss~w ~1 /~kl\ ~~ L 4.c, O p', 3 n~ /cBo Leases ~ /CO ~ oo~ ~ oo' - F ~~~~~~ ~a~ APR 0 Pd G ease. ~~0 8-~-83. 3 --- % - CsrcM ~1 •~f~N 8 O 14es, Q 9 ~ n 300 ~ 12 --_1 l0 8 ~__i e, ~d . 4 ~~ti 12 ~.. 0 11 ~_ ~ ~\\', ------~ ------ --••---I ~' J r I ... ", ~~ ~ KX AVIATION SPECIFICATIONS FOR CONSTRUCTION & IMPROVEMENTS A, SITE WORK 1. Remove all vegetation. 2, Grade site to near level position so as to allow proper drainage of water, B. FOUNDATION 1. Hanger Floor: 6" slab with 3/8" rebar on 15" centers. Beams - 12" X 24" with 4 - 5/8" rebar. All beams minimum of 12" in undisturbed soil, 6 mil. poly water proofing. 5 sack concrete mix, All steel to be placed on chairs. 2. Office and shop: 4" slab with 3/8" rebar on 15" centers, Beams- 12"X-24" with 4 - 5/8 " rebar. all beams minimum of 12" in undisturbed soil. 6 mil. poly water proofing. 4'~ sack concrete mix. All steel to be placed on chairs. C. $UIlDING STRUCTURE Pre-engineered metal system as by Abilene Metal "building" Systems, or equal. With load factors to conform to San Antonio hedger codes. All sides to be {>ainted 26 ga, metal. Roof to be Galvalume 26 ga. metal. Hanger to be fully enclosed with sliding doors, D. PARKING AREA Double coating penetration. r i r ~~~~~ ~~"~ ~ , 7 0 • a~ s .. ""i. -.. u"s o . a..._. y i 8. z ~•~ Y _ • V § } ~/ ~ ` R ~ +Y . 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