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1.06 Ingress and Egress. Lessor agrees that Lessee, its officers, directors, agents, representatives,
<br /> contractors,employees,invitees and licensees shall have the right of ingress and egress to and from
<br /> the Leased Premises by means of roadways and gated entrances owned by the City for automobiles
<br /> and taxiways at the Airport for aircraft, including access during the construction phase of Airport
<br /> improvements, unless otherwise agreed to in writing by both parties. Security codes for any gated
<br /> entrances shall be provided to Lessee by Lessor. Such rights shall be consistent with the Rules and
<br /> Regulations and applicable laws,rules and regulations("Applicable Law")of the City,the Federal
<br /> Aviation Administration ("FAA") and other governmental authorities with jurisdiction over the
<br /> Airport and this Lease.
<br /> ARTICLE 2: COMMENCEMENT TERM AND RENT
<br /> 2.01 Commencement.Rental("Rent")shall accrue commencing upon the Effective Date. Rent shall be
<br /> payable at the place designated in Section 2.04.
<br /> 2.02 Term. The term of this Lease ("Term") will commence on March 1, 2023 (the "Effective Date")
<br /> and will terminate on February 28,2053 (the "Expiration Date"), subject to earlier termination or
<br /> renewal as provided herein. As used herein, "Lease Year" means each period of twelve (12) full
<br /> calendar months from and after the Effective Date.
<br /> 2.03 Rent.Beginning on the Effective Date,Lessee hereby promises and agrees to pay Lessor a facility
<br /> rent equal to$3.00 per square foot per year equal to$1,800 per month and a ground lease rent equal
<br /> to $0.40 per square foot per year equal to $266.67 per month The rent shall be increased by a flat
<br /> ten percent(10%)beginning on March 1, 2028 and every five(5)years thereafter.
<br /> Rent shall be paid, in advance, in monthly installments. Rent will be prorated in the event of any
<br /> partial calendar month. Lessee, at its option, may make advance payments of Rent up to one (1)
<br /> year in advance, but there will be no discount for advance payments.
<br /> 2.04 Form and Place of Pam. Rent shall be due on or before the first day of each calendar month.
<br /> A payment shall be considered past due if, after the fifth(5t') day of the calendar month in which
<br /> the payment is due, Lessor has not received full payment by the end of such day(which shall end
<br /> during normal working hours) physically or by mail to 4400 Airport Highway 21, San Marcos,
<br /> Texas. Payments submitted via United States Postal Service or other means are considered paid
<br /> when received,not on the date posted.
<br /> 2.05 Late Charges.Payments not received in full by 5:00 p.m. San Marcos,Texas,time,on the fifth(51)
<br /> day of the calendar month in which such Rent is due will be considered late, and a$15.00 per day
<br /> late charge will be assessed. In addition, Lessee shall reimburse Lessor for each check that is
<br /> returned or not honored.
<br /> 2.06 No Release. Except as expressly provided herein or in any written consent of Lessor, Lessee (i)
<br /> will not be released from liability pursuant to this Lease for any reason, including, but not limited
<br /> to,a change in business conditions,voluntary or involuntary job transfer,change of marital status,
<br /> loss of content, loss of employment,bad health or the sale or disposition of any aircraft; and(ii)is
<br /> obligated to the terms and conditions of this Lease,including the payment of Rent for the entire
<br /> Term, subject to earlier termination (except due to an uncured event of default by Lessee) or
<br /> renewal, as provided herein.
<br /> 2.07 Holdover. In the event Lessee holds over after the expiration of this Lease, such hold over status
<br /> will create a tenancy from calendar month to calendar month. In such event,Lessee agrees to pay
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