Res 2023-019/approving an airport facility redevelopment agreement for commercial use with US Aviation Group, LLC for the lease of airport

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DocuSign Envelope ID:CFOA3C46-0329-49E2-B3D4-269B064BBEC1 the Leased Premises by means of roadways and gated entrances owned by the City for automobiles and taxiways at the Airport for aircraft, including access during the construction phase of Airport improvements, unless otherwise agreed to in writing by both parties. Security codes for any gated entrances shall be provided to Lessee by Lessor. Such rights shall be consistent with the Rules and Regulations and applicable laws,rules and regulations("Applicable Law")of the City,the Federal Aviation Administration ("FAA") and other governmental authorities with jurisdiction over the Airport and this Lease. ARTICLE 2: COMMENCEMENT TERM AND RENT 2.01 Commencement.Rental("Rent')shall accrue commencing upon the Effective Date. Rent shall be payable at the place designated in Section 2.04. 2.02 Term.The term of this Lease("Term")will commence on January 17,2023 (the"Effective Date") and will terminate on January 17, 2033 (the "Expiration Date"), subject to earlier termination or renewal as provided herein. Lessee shall have the option to extend the Term in accordance with Exhibit B attached hereto. As used herein, "Lease Year" means each period of twelve (12) full calendar months from and after the Effective Date. 2.03 Rent. Beginning on the Effective Date,Lessee hereby promises and agrees to pay Lessor a ground lease rent equal to $0.40 per square foot per year equal to $2,178.00 per month for the first two years. Beginning on January 17, 2025, Lessee hereby promises and agrees to pay Lessor both a ground lease rent equal to$0.40 per square foot per year equal to$2,178.00 per month plus a facility rent for use of the Hangar equal to $3,200.00 per month until January 2, 2030. Both the ground lease rent and the facility rent shall be increased by a flat ten percent(10%)beginning January 17, 2030 and every five(5)years thereafter. The capitalized term"Rent"as used in this Lease shall be deemed to include the ground lease rent and facility rent for use of the Hangar. Rent shall be paid, in advance, in monthly installments. Rent will be prorated in the event of any partial calendar month. Lessee, at its option, may make advance payments of Rent up to one (1) year in advance, but there will be no discount for advance payments. 2.04 Form and Place of Pam. Rent shall be due on or before the first day of each calendar month. A payment shall be considered past due if, after the fifth (51) day of the calendar month in which the payment is due,Lessor has not received full payment by the end of such day(which shall end during normal working hours) physically or by mail to 4400 Airport Highway 21, San Marcos, Texas. Payments submitted via United States Postal Service or other means are considered paid when received,not on the date posted. 2.05 Late Charges.Payments not received in full by 5:00 p.m. San Marcos,Texas,time,on the fifth(5") day of the calendar month in which such Rent is due will be considered late, and a$15.00 per day late charge will be assessed. In addition, Lessee shall reimburse Lessor for each check that is returned or not honored. 2.06 No Release. Except as expressly provided herein or in any written consent of Lessor, Lessee (i) will not be released from liability pursuant to this Lease for any reason, including, but not limited to, a change in business conditions,voluntary or involuntary job transfer,change of marital status, loss of content, loss of employment,bad health or the sale or disposition of any aircraft; and(ii)is obligated to the terms and conditions of this Lease,including the payment ofRent for the entire Term, subject to earlier termination (except due to an uncured event of default by Lessee) or renewal, as provided herein. -2-