Project Development and Cooperation Agreement with Capital Aircraft

10 NOTICE For a Public Hearing for March 21 , 2022 Johnston County Airport Authority Notice is hereby given that the Johnston County Airport Authority will hold a public hearing on Monday , March 21 , 2022 , at the regular board meeting at 5 00PM The hearing will be held at the Johnston Regional Airport located at 3149 Swift Creek Road , Smithfield , North Carolina , in the Terminal Building The purpose of the hearing will be to receive public comments and to discuss a Project Development and Cooperation Agreement between the Johnston County Airport Authority and Capital Aircraft LLC This meeting of the Johnston County Airport Authority is an open session meeting and open to the public Ken Starling , Chairman Johnston County Airport Authority 919 934 - 0992 Hearing Public ForPagePROJECT DEVELOPMENT AND COOPERATION AGREEMENT BETWEEN THE JOHNSTON COUNTY AIRPORT AUTHORITY AND CAPITAL AIRCRAFT , LLC 4851 - 1272 - 8575 , v 1 Hearing Public ForPagePROJECT DEVELOPMENT AND COOPERATION AGREEMENT This Project Development and Cooperation Agreement this “ Agreement ” is made and entered into as of March 21 , 2022 , by and between the Johnston County Airport Authority the “ Authority ” and Capital Aircraft LLC , a limited liability company organized pursuant to the laws of the State of North Carolina and authorized to do business in North Carolina the “ Developer ” RECITALS WHEREAS , the Authority has determined that the development of additional hangar facilities for itinerant corporate aircraft and office space for commercial aeronautical operations is critical to the continued development of Johnston Regional Airport the “ Airport ” , and has determined to develop critically needed hangar space and office space under the provisions of NCGS § 143 - 1281 C that permit public - private partnerships to construct certain capital improvements projects the “ PPP Act ” ; and WHEREAS , the Developer has the necessary qualifications to develop and construct hangars and office space in an airport environment ; and WHEREAS , the Authority has reviewed the qualifications of the Developer to serve as its development partner to develop critically needed hangar and office space as a part of a project to construct additional hangar and office space at the Airport to be utilized for commercial aeronautical purposes the “ Project ” as more particularly described herein on certain real property owned by the Authority within the Airport as shown on the Site Plan attached hereto as Exhibit A , including review of the Developer’s i financial stability , ii experience in constructing developments such as the Project , iii experience and that of its project team and its proposed method of design and construction of the Project , and iv the proposed timeline for the construction of the Project ; and WHEREAS , after conducting such review , the Authority has determined to enter into this Agreement with the Developer in order to accomplish the purposes set forth herein ; and WHEREAS , the Authority and the Developer have agreed to cooperate with each other to facilitate the planning , design , financing , construction , and operation of the Project ; and WHEREAS , as a part of the Project , the Developer will construct hangar space and office facilities and will lease a portion of the hangar and office space to the Authority the “ Authority Space ” pursuant to agreements between the Authority and the Developer ; and WHEREAS , it is the intent of the Authority and the Developer that the development of the Project and the design , construction and leasing of the Authority Space constitute a public - private partnership and that this Agreement be a “ development contract ” under the PPP Act ; and WHEREAS , the parties hereto have common and compelling interests in developing the Project in order to foster the success of the Airport and its continued commercial aeronautical development ; 4851 - 1272 - 8575 , v 1 Hearing Public ForPageNOW , THEREFORE , for and in consideration of the premises and the mutual covenants hereinafter contained , the parties hereto covenant , agree , and bind themselves as follows ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION Section 11 Definitions For all purposes of this Agreement , except as otherwise expressly provided or unless the context otherwise requires a The terms defined in the recital paragraphs above shall have the meanings assigned to them in such paragraphs The terms defined in this Article have the meanings assigned to them in the Article Singular terms shall include the plural as well as the singular , and vice versa All defined terms shall include any and all amendments , modifications , replacements , supplements or substitutions thereof or thereto b All accounting terms not otherwise defined herein have the meaning assigned to them , and all computations herein provided for shall be made , in accordance with generally accepted accounting principles All references herein to “ generally accepted accounting principles ” refer to such principles as they existed on the Date of Delivery c All references in this instrument to designated “ Articles ” , “ Sections ” and other subdivisions are to designated Articles , Sections and subdivisions of this instrument as originally executed d The terms “ herein ” , “ hereof ” and “ hereunder ” and other words of similar import refer to this Agreement as a whole and not to any particular Article , Section or subdivision e The term “ person ” shall include any individual , corporation , partnership , joint venture , association , trust , unincorporated organization and any government or other agency or political subdivision thereof “ Affiliate ” of any specified person means any other person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified person For purposes of this definition “ control ” when used with respect to any specified person means the power to direct the management and policies of such person , directly or indirectly , whether through the ownership of voting rights , by contract or otherwise , and the terms “ controlling ” and “ controlled ” have meanings correlative to the foregoing “ Airport ” means Johnston County Regional Airport “ Authority ” means the Johnston County Airport Authority 4851 - 1272 - 8575 , v 1 Hearing Public ForPagePage pageNumber5“ Authority Financial Contribution ” means the amount contributed by the Authority to the Project Cost , up to the maximum sum of 2,000,000 , but not to exceed 49 of the Project Cost “ Authority Hangar Space ” means up to 25 of the square footage of the Hangar Facility to be used by the Airport for storage of itinerant corporate aircraft “ Authority Hangar Space Agreement ” means the agreement by which the Authority will have the right to use for the storage of itinerant corporate aircraft up to 25 of the Hangar Facility to be constructed by the Developer as a part of the Project , with an initial term of twenty 20 years with two 2 five 5 year renewal terms “ Authority Land ” shall mean the parcel of the Airport owned by the Authority as specifically described in the Site Plan attached hereto as Exhibit A on which Developer will construct the Project and which will be leased by the Authority to the Developer “ Authority Office Space ” means the approximately 2,000 square feet of the Total Office Space to be constructed by Developer and leased to the Authority “ Authority Office Space Lease ” means a lease agreement pursuant to which the Developer will lease to the Authority the approximately 2,000 square feet of Office Space to be constructed by Developer as a part of the Project “ Authority Space ” shall mean the Authority Hangar Space and the Authority Office Space “ Business Day ” means any day other than a Saturday , Sunday or a day on which the banking institutions in the State of North Carolina are authorized to be closed “ Closing ” means the closing which marks the execution and delivery of all the Authority Documents and Developer Documents “ Completion of the Project ” means the completion of the Project pursuant to Section 34 a “ Construction Lender ” means , collectively , whether one or more , any entity providing a Construction Loan to the Developer secured by a Leasehold Deed of Trust “ Construction Loan ” means , collectively , whether one or more , any construction loan obtained by the Developer to fund the Developer’s obligations for the construction of the Project “ Construction Loan Documents ” means any notes , agreements , leasehold deeds of trust , including the Leasehold Deed of Trust , between the Developer and any Construction Lender relating to a Construction Loan “ Date of Delivery ” shall mean one 1 business day following the date on which the Authority Board approves the execution of this Agreement , subject to LGC approval , or other date mutually acceptable to the Authority and the Developer 4851 - 1272 - 8575 , v 1 Hearing Public ForPagePage pageNumber6“ Developer ” means Capital Aircraft , LLC and includes its successors and assigns permitted hereunder and any corporation resulting from or surviving any consolidation or merger to which it or its successors may be a party , as permitted pursuant to this Agreement “ Developer Documents ” means , collectively , this Agreement , the Construction Loan Documents , the Authority Hangar Space Agreement , the Authority Office Space Lease , the Ground Lease and any other documents executed and delivered by the Developer at the time of Closing “ Ground Lease ” means the ground lease , substantially in the form attached hereto as Exhibit C , with an initial term of twenty 20 years , with two 2 five 5 year renewal terms , pursuant to which the Authority will lease the Authority Land to the Developer “ Hangar Facility ” means the hangar s constructed by Developer for the purpose of providing space for commercial aeronautical services at the Airport as well as for use by the Airport for itinerant corporate aircraft storage “ Improvements ” means , collectively , the Hangar Facility and the Office Space “ Leasehold Deed of Trust ” means , collectively , whether one or more , any leasehold deed of trust given by the Developer to secure and Construction Loan s “ LGC ” means the North Carolina Local Government Commission , or any successor entity with similar jurisdiction over the Authority “ PPP Act ” has the meaning assigned to it in the recitals to this Agreement “ Project ” means , collectively , the Hangar Facility and the Total Office Space to be constructed by the Developer All plans and specifications for the Project shall be approved by the Authority in accordance with the normal approval provisions for Johnston County and the applicable provisions of this Agreement “ Project Construction Plans ” means the plans and specifications for the Project as the same may be amended and modified from time to time “ Project Costs ” means all costs and expense of any kind or nature whatsoever paid or incurred by or on behalf of the Developer for or in connection with the development and design of the Project and the Project Work “ Project Work ” means all administrative , labor , equipment and materials , whether on or off the property depicted on the Site Plan necessary to produce and fully effect the Completion of the Project “ Site Plan ” means the initial site plan attached to this Agreement as Exhibit A representing the Authority Property , including the Project , as the same may be amended from time to time 4851 - 1272 - 8575 , v 1 Hearing Public ForPagePage pageNumber7“ Total Office Space ” means all the office space to be constructed by the Developer Section 12 Effect of Headings and Table of Contents The Article and Section headings herein and in the Table of Contents are for convenience of reference only and not affect the construction of this Agreement Section 13 Severability If any provision in this Agreement shall be held to be invalid or unenforceable , the validity , legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby Section 14 Governing Law This Agreement , its execution , interpretation , and performance , shall be governed by and construed in accordance with the laws of the State of North Carolina Any controversy or claim arising out of or in any way related to this Agreement or the relationship established by it , or the alleged breach thereof , whether at common law , in contract , in tort , or under statute , shall be governed by the laws of the State of North Carolina Legal proceedings involving any such controversy or claim may be instituted only in the state courts for Johnston County , North Carolina or in the United States District Court for the Eastern District of North Carolina , and the parties hereby irrevocably consent to the jurisdiction of such courts over their persons and waive any defense based on improper or inconvenient venue , lack of personal jurisdiction , or improper or insufficient process or service of process Section 15 Counterparts This Agreement may be executed in any number of counterparts , each of which when executed shall be deemed an original , but all such counterparts shall together constitute one and the same instrument Section 16 Approval of the Authority or the Developer Whenever this Agreement indicates that a matter is subject to the Authority’s or the Developer’s approval or consent , and no standard is otherwise provided , then such approval or consent shall not be unreasonably withheld , conditioned or delayed and , except as set forth in Section 63 below , shall be deemed to be given if the Authority or the Developer , as applicable , has not responded to any written request for such approval or consent within sixty 60 days of the Authority’s or the Developer’s actual receipt thereof The Authority or the Developer shall be entitled to such additional time for approvals or consent as is reasonable under the circumstances , not to exceed an additional forty - five 45 days 4851 - 1272 - 8575 , v 1 Hearing Public ForPagePage pageNumber8ARTICLE 2 PURPOSE AND PLAN OF FINANCE Section 21 Purpose The purpose of this Agreement is to evidence the agreement of the Authority and the Developer in connection with the planning , designing and constructing of the Project on the Authority Land , payment of Project Costs and to address certain other matters of mutual concern to the parties This Agreement is intended to be a “ development contract ” for purposes of the PPP Act The Authority and the Developer hereby desire to cooperate with one another in order to cause the timely and efficient completion of the Project and grant the Developer the exclusive right to develop the Hangar Facility and the Office Space on the Authority Land This Agreement shall be interpreted in a manner as be most consistent with the foregoing purposes Section 22 Plan of Finance for the Project The parties hereto understand and agree that a It is in the best interest of the parties hereto to provide for the planning , design , financing , construction , development and operation of the Project b The Authority Land will be owned by the Authority and will be leased to the Developer pursuant to the Ground Lease c The Developer will have the exclusive right to develop the Hangar Facility and the Total Office Space on the Authority Land The Developer will own the Hangar Facility and Total Office Space during the Term of the Ground Lease and may lease these facilities to third - parties subject to the terms of the Ground Lease and retain the proceeds thereof The Developer agrees that he may operate a Part 135 Air Charter Specialized Aviation Service Operation at the Airport based in the hangar facilities to be constructed or as otherwise approved by the Airport Authority d The Developer will design , develop and construct the Authority Office Space , which will be owned by the Developer and leased to the Authority pursuant to the Authority Office Space Lease at no charge e The Developer will design , develop and construct the Authority Hangar Space , which will be owned by the Developer and the Authority will have the right to use up to 25 of the Hangar Facility for the storage of itinerant corporate aircraft at no charge f The Authority shall contribute up to a maximum of 49 of the Project Cost , not to exceed a maximum of two million , 2,000,000 All other costs shall be the sole responsibility of the Developer The Authority at no time shall be deemed a guarantor of the obligations of the Developer 4851 - 1272 - 8575 , v 1 Hearing Public ForPagePage pageNumber9ARTICLE 3 CONSTRUCTION OF THE PROJECT Section 31 Construction Subject to the terms of this Agreement , the Ground Lease , the Authority Hangar Agreement , and the Authority Office Space Lease , the Developer agrees to design , develop and construct the Project substantially in accordance with the Project Construction Plans , attached hereto as Exhibit D The parties expressly intend for the development of the Project , including but not limited to , the design , development , and construction of the Office Space , to constitute a public - private partnership under the PPP Act Section 32 Site Plans ; Project Construction Plans a The Authority and the Developer recognize and agree that the Site Plan shows only the general concept of the Project and that during the development of the Project numerous changes relating to the Project may have to be made because no final plans or specifications have been rendered as the time of the execution of this Agreement The Authority reserves the right to approve any change in the basic concept of the Project Authority recognizes and agrees the Office Space will consist of a shell building including HVAC , bathrooms and electric b The Authority and the Developer recognize and agree that the Project Construction Plans shall be approved by the Authority before implementation thereof The Authority’s approval shall not be unreasonably withheld , conditioned , or delayed provided such plans are consistent with the Site Plans originally presented to the Authority or as modified with the Authority’s consent Section 33 Construction of the Project a The Developer agrees to commence construction of the Project , at the latest , within ninety 90 days of the date of Delivery and to use its best efforts to effect Completion of the Project on or before eighteen 18 months of the date of Delivery subject to delays incident to riots , acts of God or other causes beyond the reasonable control of the Developer , other than COVID - 19 b The Developer shall not commence construction of the Project until it has provided written notice to the Authority that it has obtained all the insurance required in the Ground Lease c The Developer shall complete the Project in conformity with the Project Construction Plans d The Project shall be constructed in a good and workmanlike manner and in compliance with all applicable laws The Developer shall complete the Project with reasonable diligence and shall , promptly after Completion of the Project , obtain all certificates , signoffs , licenses , permits and approvals required by law to be obtained with respect to the Project and with respect to all equipment , machinery and fixtures installed in connection with the Project 4851 - 1272 - 8575 , v 1 Hearing Public ForPage0 e The Developer shall put forth a good faith effort , in compliance with the PPP Act , to recruit and select small business entities with respect to the development , design and construction of the Project and to comply with NCGS Sections 143 - 1282 and 143 - 1284 regarding participation by minority and historically underutilized businesses in developing the Project f For purposes of this section , “ commence construction ” by a party shall be deemed to occur on the later of i the date on which such party executes a contract with a licensed contractor to construct improvements on the real estate depicted on the Site Plan , or ii the date on which soil - disturbing activities begin on the real estate depicted on the Site Plan pursuant to permits issued by Johnston County g The Developer shall provide a payment and performance bond in the amount of 100 of the total anticipated amount of the construction contracts for the Project and shall comply with the requirements of North Carolina General Statute section 143 - 1281C g For the purposes of this section , the Developer certifies that 4,100,000 is the total anticipated cost of construction of the Project as of the date of this Agreement The Developer believes this amount is a good - faith projection of the total cost to construct the Project Section 34 Completion of the Project a The Completion of the Project shall be deemed to have occurred when all of the following have been substantially completed the construction of the Project and the substantial completion of all other Project Work in accordance with the Project Construction Plans , including but not limited to the achievement of “ substantial Completion ” as defined in the construction contracts relating to every aspect of the Project , including the issuance of a certificate of occupancy for all portions of the Project b Promptly after Completion of the Project as defined in Section 34 a , the Developer shall deliver to the Authority an architect’s certificate of substantial completion of the Project , certifying that the Project has been completed in accordance with this Agreement Certification by the architect shall be a conclusive determination of the satisfaction of the Developer’s agreements and covenants to effect Completion of the Project c The Developer shall deliver to the Authority copies of the “ as - built ” plans for the Project and all material alterations , including AutoCAD drawings within sixty 60 days of the final completion of the Project Section 35 Cooperation The Authority agrees to cooperate with the Developer in the development of the Project and agrees not to unreasonably withhold its consent or agreement to modifications to the Project , the Project Construction Plans , the Site Plan or any matter related thereto Subject to the provisions hereof , the Developer will enter into such other contracts , and do , or cause to be done , all other acts or things necessary or proper to complete the construction of the 4851 - 1272 - 8575 , v 1 Hearing Public ForPage1Project in order to enable the Developer and the Authority to perform fully their respective obligations under this Agreement The Developer and the Authority each agree to comply with the requirements of the PPP Act in developing and constructing the Office Space and the Project The Developer shall be responsible for obtaining financing for the entire Project , other than the payment by the Authority identified in Section 22 e The Developer shall provide evidence satisfactory to the Authority of the availability of such financing and that such financing meets the requirements of NCGS Section 143 - 1281C a 4 Section 36 Description of the Project The Developer acknowledges its understanding and agreement that the construction of the Project in conformance with this Agreement contains an important , material and substantial inducement to the Authority to enter into this Agreement The Developer will construct a hangar which shall consist of no less than 12,000 square feet of space which will be located on the Authority’s Land which shall be leased to the Developer , and the Authority will have the right to use up to 25 of the hangar for the storage of itinerant aircraft The Developer shall also construct no less than approximately 7,000 square feet of office space , of which approximately 2,000 square feet shall be leased to the Authority for the same term , including renewals terms , of the Ground Lease , at no charge Section 37 Office Space Lease The Authority and the Developer shall enter into an Authority Office Space Lease pursuant to which the Developer will lease approximately 2,000 square feet of the Total Office Space to the Authority The Authority Office Space Lease is attached hereto as Exhibit B or such other form as mutually agreed to by the parties hereto and approved by the Local Government Commission , if necessary The Authority Office Space Lease shall be for the same term , including renewal terms , as the Ground Lease The rental rate for the Office Space shall be 0 Section 38 Hangar Use Agreement The Authority and Developer shall enter into a Hangar Use Agreement pursuant to which the Developer will allow the Authority to use up to 25 of the Hangar Facility for the storage of itinerant aircraft at no charge to the Authority 4851 - 1272 - 8575 , v 1 Hearing Public ForPage2ARTICLE 4 Section 41 Conditions Precedent to Closing Prior to or contemporaneously with the Closing , each of the following conditions shall have been fully satisfied a The Authority shall lease the Authority Land to the Developer pursuant to the Ground Lease ; b The Authority and Developer shall enter into a Lease for the lease of the Office Space ; c The Authority and Developer shall enter into an agreement whereby the Airport has the right to use up to 25 of the Hangar Facility for itinerant corporate aircraft storage d The Developer shall have obtained commitments from any private lending sources for its financing of the Project and delivered copied thereof to the Authority and no defaults shall exist thereunder ; e To the extent the referenced exhibits to this Agreement are not all attached as of the execution of this Agreement , the same shall be satisfactory in all respects to the Authority and the Developer and shall be affixed hereto and executed in counterpart originals Section 42 Termination At any time prior to Closing , the Developer may , by giving written notice to the Authority , terminate this Agreement and the Developer’s obligations hereunder , if Developer , in its sole discretion , determines i that the Project is not economically feasible , or ii that any aspect of its due diligence investigations of the Project is unsatisfactory In the event of the termination of this Agreement pursuant to the provisions of this paragraph , the Parties shall have no liability to the other Party under this Agreement or otherwise ARTICLE 5 REPRESENTATIONS AND WARRANTIES Section 51 Representations and Warranties of the Authority The Authority hereby represents and warrants to the Developer as of the Date of Delivery and as of Closing a All consents , approvals , authorizations , and orders of governmental authorities including but not limited to the LGC , if required which are required as a condition to the execution and delivery of this Agreement either has been obtained or will be obtained by or on behalf of the Authority and are or will be in full force and effect b The execution and delivery by the Authority of this Agreement will not conflict with , be in violation of or constitute a default under the acts creating the Authority 4851 - 1272 - 8575 , v 1 Hearing Public ForPage3 c There is no action , suit , proceeding , inquiry or investigation pending before any court or government authority or , to the Authority’s knowledge , threatened against or affecting the Authority which involves the consummation of this Agreement or the powers of the Authority , d This Agreement constitutes the legal , valid and binding obligation of the Authority and is enforceable against the Authority in accordance with its terms , except insofar as enforceability thereof may be limited by i bankruptcy , insolvency , or other similar laws affecting the enforcement of creditors ’ rights and ii general principles of equity , regardless of whether such enforcement is considered a proceeding at law or in equity e The Authority has complied with the requirements of NCGS Section 143 - 1281C in entering into this Agreement Section 52 Representations and Warranties of the Developer The Developer hereby represents and warrants to the Authority as of the Date of Delivery and as of Closing a The Developer is duly organized and existing as a limited liability company under the laws of the State of North Carolina , is duly qualified to do business in North Carolina , and in good standing under its organizational documents and the laws of North Carolina b The Developer has the power to consummate the transactions contemplated by this Agreement c By proper company action , the Developer has duly authorized the execution and delivery of the Developer Documents to which it is a party and the consummation of the transactions contemplated therein d The Developer has obtained all consents , approvals , authorizations and orders of governmental authorities that are required to be obtained by it as a condition to the execution and delivery of the Developer Documents e The execution and delivery by the Developer of the Developer Documents and the consummation by the Developer of the transactions contemplated herein will not conflict with , be in violation of , or constitute a default under its operating agreement or any agreement , instrument , order or judgment to which it is a party or is subject f The Developer Documents constitute legal , valid and binding obligations and are enforceable against it in accordance with the terms of such instruments , except as enforcement thereof may be limited by i bankruptcy , insolvency , or other similar laws affecting the enforcement of creditor’s rights and ii general principles of equity , regardless of whether such enforceability is considered in a proceeding in equity or at law g With respect to the Project , the Developer has made no attempt to become a “ design - builder ” within the meaning of that term as it is defined in NCGS Section 143 - 1281B 4851 - 1272 - 8575 , v 1 Hearing Public ForPage4ARTICLE 6 MISCELLANEOUS Section 61 Notices All notices or other communications required to be given under this Agreement shall be given in writing and shall be deemed to have been duly given on the date delivered , if delivered personally or the next business day , if delivered to a nationally recognized overnight courier service , addressed as follows Authority Airport Director Johnston Regional Airport 3149 Swift Creek Road Smithfield , North Carolina 27577 Developer Capital Aircraft , LLC Attention David Stallings 3724 National Drive , STE 215 Raleigh , North Carolina 27612 The Authority and the Developer may specify a different address for the receipt of such documents by giving notice of the change of address in writing to the other parties named in this Section Section 62 Costs and Expenses Except as set forth in Section 22 e , the Developer acknowledges that it shall be responsible for all costs of developing the Project , including but not limited to , the cost of all improvements required to the real property depicted on the Site Plan in order to implement the Project and the cost of planning , developing and maintain the real property depicted on the Site Plan , such as legal , engineering , architectural , construction and environmental services ; otherwise , each party hereto agrees to pay its own costs incurred in connection with the negotiation and preparation of this Agreement The Developer shall not hold itself out as an agent of the Authority and shall not make any representation or make any action which shall convey the impression to any contractor , subcontractor , laborer or supplier that the Authority has any obligation or responsibility for any payment to such contractor , subcontractor , laborer or supplier in connection with the Project Section 63 Amendment The terms of this Agreement may not be changed , modified , waived , discharged or terminated orally , but only by an instrument or instruments in writing signed by both the Authority and the Developer 4851 - 1272 - 8575 , v 1 Hearing Public ForPage5Section 64 Assignment The Developer shall not sell , assign , or transfer this Agreement without the prior written consent of the Authority , which consent may be withheld for any reason No assignment or sublease shall serve to release the Developer from any of its obligations , duties or responsibilities under this Agreement unless the Authority agrees thereto in writing The provisions of this Agreement shall bind and inure to the benefit of the successors and assigns of the parties hereto No assignee for the benefit of the Developers creditors , and no trustee , receiver , or referee in bankruptcy shall acquire any rights under this Agreement by virtue of this Section Section 65 Benefit of Agreement Nothing in this Agreement , express or implied , is intended to give any person , other than the parties hereto and their respective successors and permitted assigns , any benefit or equitable right , remedy or claim under this Agreement Section 66 Further Assurances The Authority and the Developer will do , execute , acknowledge and deliver such further acts , instruments and assurances , and otherwise cooperate with one another as necessary or appropriate for accomplishing the purposes of this Agreement , including , but not limited to , executing any and all instruments or providing any and all documentation reasonably requested by any of Developer’s lender s Section 67 Entire Agreement This Agreement , the Ground Lease and Office Space Lease set forth the entire agreement between the parties and supersede any and all prior agreements , oral or written , concerning the subject matters contained herein There are no promises , agreements , conditions , oral or written , express or implied , among the parties other than those set forth in these agreements Section 68 Compliance with Applicable Laws The Developer shall comply with all applicable laws and regulations in providing services under this Agreement In particular , the Developer represents and warrants that it is aware of and in compliance with the Immigration Reform and Control Act and North Carolina Law requiring the use of the E - verify system for employees who employ twenty - five 25 or more employees and that it is and will remain in compliance with these laws at al times while providing services pursuant to this Agreement The Developer shall also require that its contractor and will require the contractor to require its subcontractors , of any tier , remain in compliance with these laws at all times while providing contracted or subcontracted services in connection with this Agreement Section 69 Compliance with Iran Divestment Act of 2015 The Developer certifies that as of the date of this Agreement , the Developer is not listed on the Final Divestment List created by the North Carolina State Treasurer pursuant to NCGS Section 147 - 8658 The Developer understands that it is not entitled to any payments whatsoever 4851 - 1272 - 8575 , v 1 Hearing Public ForPage6under this Agreement if this certification is false The individual signing this Agreement certifies that he or she is authorized by the Developer to make the foregoing statement Section 610 Indemnification The Developer agrees to indemnify , defend and hold harmless the Authority , its Board members , employees , agents , and representatives from any and all liability for injury , death , damages to persons and property and costs and expenses incurred as a result of any direct or indirect acts or omissions , including negligence , of the Developer During construction of the Project , the Developer is and shall be solely responsible for all construction , construction contracts , architects , contractors , subcontractors , agents and employees and shall indemnify and hold harmless the Authority , its Board members , employees , agents , and representatives from liability related to construction and on - going repairs or modifications to the Project 4851 - 1272 - 8575 , v 1 Hearing Public ForPage7EXHIBIT A – Site Plan 4851 - 1272 - 8575 , v 1 Hearing Public ForPage8Hearing Public ForPage9EXHIBIT B – Office Space Lease 4851 - 1272 - 8575 , v 1 Hearing Public ForPage0OFFICE SPACE LEASE AGREEMENT BY AND BETWEEN Capital Aircraft LLC AS LANDLORD AND THE JOHNSTON COUNTY AIRPORT AUTHORITY AS TENANT { 00241580 DOC V S034011497 ; } i 4854 - 5288 - 4736 , v 1 Hearing Public ForPage1LEASE AGREEMENT THIS Office Space LEASE AGREEMENT the “ Lease ” is made and entered into as of the _____ day of _______________ , 20___ , by and between Capital Aircraft LLC hereinafter called “ Landlord ” and the Johnston County Airport Authority hereinafter called “ Tenant ” W I T N E S S E T H In consideration of the mutual covenants and agreements contained herein , the parties hereto agree for themselves , their successors and assigns , as follows 1 DESCRIPTION OF PREMISES Landlord hereby leases to Tenant , and Tenant hereby accepts and rents from Landlord , that certain office space the “ Premises ” , containing approximately 2,000 rentable square feet , in that certain building the “ Building ” having an address of 3149 - C Swift Creek Rd Smithfield North Carolina , 27577 on a tract of land the “ Land ” as more particularly described on Exhibit “ A ” attached hereto , together with the nonexclusive right to use all parking areas , driveways , sidewalks and other common facilities furnished by Landlord from time to time in or for the Building The Premises are identified on the building plan attached hereto as Exhibit “ B ” The Land , together with the Building and the Premises and all other improvements thereon , are sometimes referred to herein collectively as the “ Project ” 2 TERM The initial term of this Lease shall begin as of _______________ , 202_ , and shall end at midnight on _____________ , 20___ , unless terminated sooner in accordance with the provisions hereof and the Ground Lease entered into between the parties As used in this Lease , the word “ Term ” shall mean the initial term of this Lease as specified in this paragraph and any extension or renewal thereof as provided under this Lease Landlord agrees that if Tenant shall not be in default in performing any of its obligations under this Lease , Tenant shall have and is hereby granted the option to extend the term of this Lease for two 2 additional five 5 year term s by giving written notice of said renewal at least ninety 90 days prior to the expiration of the then current Term All of the terms of this Lease shall apply to an extended Term 3 RENTAL There shall be no charge to Tenant for the lease of the Premises 4 DELIVERY OF POSSESSION Landlord will deliver the Premises to Tenant on the Commencement Date “ AS IS , WHERE IS , AND WITH ALL FAULTS ” Tenant has previously inspected the Premises and determined same to be acceptable in all respects 5 ALTERATIONS AND IMPROVEMENTS BY TENANT Tenant shall make no structural changes respecting the Premises or the Building and shall make no changes of any kind respecting the Premises or the Building that are visible from the exterior of the Premises Any other nonstructural changes or other alterations , additions , or improvements to the Premises shall be made by or on behalf of Tenant only with the prior written consent of Landlord , which consent { 00241580 DOC V S034011497 ; } Hearing Public ForPage2shall not be unreasonably withheld or delayed All alterations , additions or improvements , including , without limitation , all partitions , walls , railings , carpeting , floor and wall coverings and other fixtures excluding , however , Tenant’s trade fixtures as described in the paragraph entitled “ Trade Fixtures and Equipment ” below made by , for , or at the direction of Tenant shall , when made , become the property of Landlord , at Landlord’s sole election , and , at Landlord’s sole election , shall remain upon the Premises at the expiration or earlier termination of this Lease 6 USE OF PREMISES a Tenant shall use the Premises for general office space Tenant shall comply with all laws , ordinances , orders , regulations , or zoning classifications of any lawful governmental authority , agency or other public or private regulatory authority including insurance underwriters or rating bureaus having jurisdiction over the Premises or Tenant Tenant shall not do any act or follow any practice relating to the Premises which shall constitute a nuisance or detract in any way from the reputation of the Building b Without limiting the generality of a above , the Premises shall not be used for the treatment , storage , transportation to or from , use or disposal of toxic or hazardous wastes , materials or substances , or any other substance that is prohibited , limited or regulated by any governmental or quasi - governmental authority or that , even if not so regulated , could or does pose a hazard to health and safety of the occupants of the Building or surrounding property c Tenant shall exercise due care in its use and occupancy of the Premises and shall not commit or allow waste to be committed on any portion of the Premises ; and at the expiration or earlier termination of this Lease , Tenant shall deliver the Premises to Landlord in as good condition as on the date of the completion of the tenant improvements in the Premises , ordinary wear and tear and acts of God alone excepted 7 TAXES a Tenant shall pay prior to delinquency any taxes , documentary stamps or assessments of any nature imposed or assessed upon this Lease , Tenant’s occupancy of the Premises or Tenant’s trade fixtures , equipment , machinery , inventory , merchandise or other personal property located on the Premises and owned by or in the custody of Tenant as promptly as all such taxes or assessments may become due and payable b Landlord , shall pay all ad valorem property taxes which are now or hereafter assessed upon the Building and the Premises , except as otherwise expressly provided in this Lease 8 FIRE AND EXTENDED COVERAGE INSURANCE Landlord shall maintain and pay for fire insurance , with extended coverage , covering the Building , equal to at least eighty percent 80 of the replacement cost thereof Tenant shall not do or cause to be done or permit on the Premises or in the Building anything deemed extra hazardous on account of fire and Tenant shall not use the Premises or the Building in any manner which will cause an increase in the premium rate for any insurance in effect on the Building or a part thereof If , because of anything done , caused to be done , permitted or omitted by Tenant or its agent s , contractor s , employee s , invitee s , licensee s , servant s , subcontractor s or subtenant s the premium rate for any kind of insurance in effect on the Building or any part thereof shall be raised , Tenant shall pay Landlord on demand the amount of any such increase in premium which Landlord shall pay for such insurance and if Landlord shall demand that Tenant remedy the condition which caused any such increase in an insurance premium rate , Tenant shall remedy such condition within five 5 days after receipt of such demand Tenant shall maintain and pay for all fire 2 4854 - 5288 - 4736 , v 1 Hearing Public ForPage3and extended coverage insurance on its contents in the Premises , including trade fixtures , equipment , machinery , merchandise or other personal property belonging to or in the custody of Tenant 9 UTILITIES AND SERVICESIn accordance with all applicable laws , regulations and ordinances , Landlord , at its expense , shall provide the Premises with reasonable heating and air conditioning which shall be available to Tenant twenty - four 24 hours per day , seven 7 days per week So long as the Premises are kept in reasonable order by Tenant , Landlord shall provide the Premises , with reasonable janitorial and general cleaning services from Monday through Friday ; provided , however , that Landlord shall not be obligated to provide such services on holidays observed as national holidays in Smithfield , North Carolina Such cleaning services shall include , without limitation , trash disposal five 5 days per week ; mopping or equivalent of hard surface floors five 5 days per week ; vacuuming of carpets twice per week ; polishing waxing of hard surface flooring once per month ; cleaning of lighting fixtures twice per year ; cleaning of windows interior and exterior three 3 times per year ; replacement of light tubes and bulbs as required ; and provision of sanitary paper products as required Landlord shall , at its expense , furnish the Premises with electricity for routine lighting and the operation of general office machines and equipment typical for general office use , which machines and equipment use 110 volt electrical power and 20 AMP circuits Tenant shall not use any electrical equipment which in Landlord’s opinion will overload the Building’s electrical circuits or interfere with the reasonable use thereof by other tenants , nor shall Tenant install or use heat generating machines or equipment which affects the temperature otherwise maintained by the heating and air conditioning system Tenant shall not , without Landlord’s prior written consent in each instance which consent shall not be unreasonably withheld , connect any additional items such as electrical heaters or mainframe computer systems to the Building’s electrical distribution system or make any alteration or addition to such system In the event that Landlord shall consent to such alterations or additions , all labor , material and equipment required therefor shall be provided by Landlord and the reasonable cost thereof shall be paid by Tenant upon demand by Landlord If Tenant shall install any equipment that i uses electrical power requiring other than 110 volt service , or ii in any way increases demands for electrical power , water or gas usually furnished for use in Premises of like size in the Building , Tenant shall pay Landlord upon demand the cost of any such excess Landlord shall furnish elevator service to all floors of the Building at all times At Landlord’s option , all elevators may be self - service Landlord shall furnish a reasonable amount of hot and cold running water to lavatories and toilets in or appurtenant to the Premises and shall keep all plumbing in working order Landlord shall maintain and repair all elevators , rest rooms , corridors , parking areas and other common areas of the Building Landlord shall have the right to terminate the furnishing of any or all of the utilities and services hereinbefore provided for at and for any and all such reasonable time or times as Landlord shall deem necessary for repairs , alterations or improvements Landlord shall have no liability or responsibility to Tenant for loss or damage in the event the furnishing of any of the utilities and services hereinbefore provided for is prohibited or stopped for repairs , alterations or improvements or by reason of causes beyond Landlord’s reasonable control including , without limitation , accidents , strikes , lockouts , or orders or regulations of any federal , state or municipal authority Notwithstanding the foregoing to the contrary , Landlord recognizes that due to the nature of Tenant’s business operations , failure of certain building equipment or components shall need to be addressed promptly Therefore , Landlord shall grant Tenant the ability to remedy any such failure in a critical system which has an immediate material adverse effect on Tenant’s business operations if Landlord does not commence the needed repair or replacement within three 3 business days of receipt of written notice of the need for such repair or replacement from Tenant In such event , Landlord will reimburse Tenant for the reasonable third party costs incurred in curing any such failure in a critical system within thirty 30 days of receipt of an invoice or other reasonably satisfactory evidence of expenditures from Tenant In the event Tenant exercises its self - help rights pursuant to this Paragraph 9 , Tenant shall perform any such work in a manner so as not to void or otherwise impact Landlord’s warranties and otherwise in a 3 4854 - 5288 - 4736 , v 1 Hearing Public ForPage4good and workmanlike manner , and Tenant shall indemnify and hold Landlord harmless for any failure to do so 10 PROPERTY OF TENANT All property placed on the Premises by , at the direction of or with the consent of the Tenant , its employees , agents , licensees or invitees , shall be at the risk of the Tenant or the owner thereof and Landlord shall not be liable for any loss of or damage to said property resulting from any cause whatsoever 11 TRADE FIXTURES AND EQUIPMENT So long as Tenant is not in default under this Lease , any trade fixtures installed in the Premises at Tenant’s expense shall remain Tenant’s personal property and Tenant shall have the right at any time during the term of this Lease to remove such trade fixtures Upon removal of any trade fixtures , Tenant shall immediately restore the Premises to substantially the same condition as they were when received by Tenant , ordinary wear and tear and acts of God alone excepted Any trade fixtures not removed by Tenant at the expiration or an earlier termination of this Lease shall become , at Landlord’s sole election , either i the property of Landlord , in which event Landlord shall be entitled to handle and dispose of same in any manner Landlord deems fit without any liability or obligation to Tenant or any other third party with respect thereto , or ii subject to Landlord’s removing such property from the Premises and storing same , all at Tenant’s expense and without any recourse against Landlord with respect thereto Without limiting the generality of the foregoing , the following property shall in no event be deemed to be “ trade fixtures ” and Tenant shall not remove any such property from the Premises under any circumstances , regardless of whether installed by Landlord or Tenant a any air conditioning , air ventilating or heating fixtures or equipment ; b any lighting fixtures or equipment ; c any dock levelers ; d any carpeting or other permanent floor coverings ; e any paneling or other wall coverings ; f plumbing fixtures and equipment ; or g permanent shelving 12 DAMAGE OR DESTRUCTION OF PREMISES If the Premises is damaged by fire or other casualty , but are not rendered untenantable for Tenant’s business , either in whole or in part , Landlord shall cause such damage to be repaired or restored without unreasonable delay and the Annual Rental shall not be abated If by reason of such casualty the Premises is rendered untenantable in Tenant’s business , either in whole or in part , Landlord shall cause the damage to be repaired or replaced without unreasonable delay Provided , however , if by reason of such casualty , the Premises is rendered untenantable in some material portion , and the amount of time required to repair the damage using due diligence is in excess of one hundred twenty 120 days , then either party shall have the right to terminate this Lease by giving written notice of termination within sixty 60 days after the date of casualty , and the Annual Rental shall abate as of the date of such casualty in proportion to the portion of the Premises rendered untenantable Notwithstanding the other provisions of this paragraph , in the event there should be a casualty loss to the Premises to the extent of fifty percent 50 or more of their replacement value or if the Premises are rendered untenantable for the conduct of Tenant’s business operations during the last Lease Year of the initial term or any extended term , either party may , at its option , terminate this Lease by giving written notice within sixty 60 days after the date of the casualty and rent shall abate as of the date of such notice Except as provided herein , Landlord shall have no obligation to rebuild or repair in case of fire or other casualty , and no termination under this paragraph shall affect any rights of Landlord or Tenant hereunder because of prior defaults of the other party Tenant shall give Landlord immediate notice of any fire or other casualty in the Premises 13 MUTUAL WAIVER OF SUBROGATION 4 4854 - 5288 - 4736 , v 1 Hearing Public ForPage5For the purpose of waiver of subrogation , the parties mutually release and waive unto the other all rights to claim damages , costs or expenses for any injury to property caused by a casualty of any type whatsoever in , on or about the Premises if the amount of such damage , cost or expense has been paid to such damaged party under the terms of any policy of insurance or would have been paid had such party procured the insurance it is required to procure hereunder All insurance policies carried with respect to this Lease , if permitted under applicable law , shall contain a provision whereby the insurer waives , prior to loss , all rights of subrogation against either Landlord or Tenant 14 INDEMNIFICATION AND LIABILITY INSURANCE a Landlord shall indemnify and save Tenant harmless against any and all claims , suits , demands , actions , fines , damages , and liabilities , and all costs and expenses thereof including without limitation reasonable attorneys ’ fees arising out of injury to persons including death or property occurring in , on or about , or arising out of the Premises or other areas in the Building to the extent caused or occasioned by any negligent act s or omission s or intentional misconduct of Landlord , its agent s or employee s Provided , however , Landlord shall not be liable for any damage caused or occasioned by or from water , snow or ice being upon or coming through the roof , trapdoor , walls , windows , doors , or otherwise in , upon or about the Premises or the Building , or from any damage arising from acts or omissions of tenants or other occupants of the Building b At all times during the term of this Lease , Tenant , at its own expense , shall keep in force adequate public liability insurance under the terms of a commercial general liability policy occurrence coverage in the amount of not less than 1,000,00000 coverage and with such company ies licensed to do business in the State of North Carolina and naming Landlord as an additional insured Tenant shall first furnish to Landlord copies of policies or certificates of insurance evidencing the required coverage prior to the Commencement Date and thereafter prior to each policy renewal date All policies required of Tenant hereunder shall contain a provision whereby the insurer is not allowed to cancel or change materially the coverage without first giving thirty 30 days ’ written notice to Landlord 15 LANDLORD’S RIGHT OF ENTRY Landlord , and those persons authorized by it , shall have the right to enter the Premises at all reasonable times and upon reasonable notice for the purposes of making repairs , making connections , installing utilities , providing services to the Premises or for any other tenant , making inspections or showing the same to prospective purchasers and or lenders , as well as at any time in the event of emergency involving possible injury to property or persons in or around the Premises or the Building Further , during the last six 6 months of the initial or of any extended term , Landlord and those persons authorized by it shall have the right at reasonable times and upon reasonable notice to show the Premises to prospective tenants 16 EVENTS OF DEFAULT AND REMEDIES a Upon the occurrence of any one or more of the following events the “ Events of Default , ” any one an “ Event of Default ” , the party not in default shall have the right to exercise any rights or remedies available in this Lease , at law or in equity Events of Default shall be i Failure by either party to perform any other of the terms , covenants or conditions contained in this Lease if not remedied within thirty 30 days after receipt of written notice thereof , or if such default cannot be remedied within such period , such party , within thirty 30 days after written notice thereof has been given , does not commence such act or acts as shall be necessary to remedy the default and shall not thereafter complete such act or acts within a reasonable time ; 5 4854 - 5288 - 4736 , v 1 Hearing Public ForPage6 ii Tenant vacates , abandons or fails to operate in the Premises or any substantial portion thereof or allows its leasehold estate to be taken under any writ of execution and such writ is not vacated or set aside within thirty 30 days b In addition to its other remedies , Landlord , upon an Event of Default by Tenant , shall have the immediate right , after any applicable grace period expressed herein , to terminate and cancel this Lease and or to reenter and remove all persons and properties from the Premises and dispose of such property as it deems fit , all without being guilty of trespass or being liable for any damages caused thereby 17 SUBORDINATION This Lease is subject and subordinate to any and all mortgages or deeds of trust now or hereafter placed on the property of which the Premises is a part , and this clause shall be self - operative without any further instrument necessary to effect such subordination ; however , if requested by Landlord , Tenant shall promptly execute and deliver to Landlord any such certificate s as Landlord may reasonably request evidencing subordination of this Lease to or the assignment of this Lease as additional security for such mortgages or deeds of trust Provided , however , in each case the holder of the mortgage or deed of trust shall agree that this Lease shall not be divested by foreclosure or other default proceedings thereunder so long as Tenant shall not be in default under the terms of this Lease beyond any applicable cure period set forth herein Tenant shall continue its obligations under this Lease in full force and effect notwithstanding any such default proceedings under a mortgage or deed of trust and shall attorn to the mortgagee , trustee or beneficiary of such mortgage or deed of trust , and their successors or assigns , and to the transferee under any foreclosure or default proceedings Tenant will , upon request by Landlord , execute and deliver to Landlord or to any other person designated by Landlord , any instrument or instruments required to give effect to the provisions of this paragraph 18 ASSIGNING AND SUBLETTING Tenant shall not assign this Lease , the Premises , or any interest in the whole or in any portion thereof , directly or indirectly , without the prior written consent of Landlord , which consent shall not be unreasonably withheld or delayed If Tenant makes any assignment with Landlord’s written consent , Tenant shall still remain primarily liable for the performance of all of the terms and provisions of this Lease Landlord’s consent to one assignment shall not waive the requirement of its consent to any subsequent assignment as required herein Tenant has the right to sublease the Premises to third parties for office use Notwithstanding anything to the contrary contained herein , in the event this Lease is terminated following such assignment for any reason other than a voluntary termination consented to by Landlord , then , in such event , at Landlord’s request , Tenant hereby agrees to enter into a new lease with Landlord relative to the Premises for the then - remaining term of this Lease upon the terms and conditions set forth herein 19 TRANSFER OF LANDLORD’S INTEREST If Landlord shall sell , assign or transfer all or any portion of its interest in the Premises or in this Lease to a successor in interest which expressly assumes the obligations of Landlord hereunder , then Landlord shall thereupon be released and discharged from all covenants and obligations hereunder , and Tenant shall look solely to such successor in interest for performance of all of Landlord’s obligations hereunder Tenant’s obligations under this Lease shall in no manner be affected by Landlord’s sale , 6 4854 - 5288 - 4736 , v 1 Hearing Public ForPage7assignment , or transfer of all or any portion of such interest s of Landlord , and Tenant shall thereafter attorn and look solely to such successor in interest as the Landlord hereunder 20 COVENANT OF QUIET ENJOYMENT Landlord represents that it has full right and authority to lease the Premises and , subject to the terms of this Lease , Tenant shall peacefully and quietly hold and enjoy the Premises for the full term hereof so long as Tenant does not default in the performance of any of the terms hereof 21 MEMORANDUM OF LEASE If requested by Tenant , Landlord shall execute a recordable Memorandum or Short Form Lease , prepared at Tenant’s expense , specifying the exact term of this Lease and such other terms as the parties shall mutually determine 22 FORCE MAJEURE In the event Landlord or Tenant shall be delayed , hindered or prevented from the performance of any act required hereunder , by reason of governmental restrictions , scarcity of labor or materials , strikes , fire , or any other reasons beyond its reasonable control , the performance of such act shall be excused for the period of delay , and the period for performance of any such act shall be extended as necessary to complete performance after the delay period 23 REMEDIES CUMULATIVE - - NONWAIVER Unless otherwise specified in this Lease , no remedy of Landlord or Tenant shall be considered exclusive of any other remedy , but each shall be distinct , separate and cumulative with other available remedies Each remedy available under this Lease or at law or in equity may be exercised by Landlord or Tenant from time to time as often as the need may arise No course of dealing between Landlord and Tenant or any delay or omission of Landlord or Tenant in exercising any right arising from the other party’s default shall impair such right or be construed to be a waiver of a default 24 NOTICES Wherever in this Lease it shall be required or permitted that any notice , request , report , communication or demand be given , served or transmitted by either party to this Lease to or on the other , such notice or demand shall be in writing and shall be personally delivered or forwarded by registered or certified mail , return receipt requested with proper postage prepaid , or by nationally recognized overnight courier service providing written confirmation of delivery , to the addresses of the parties as follows 7 4854 - 5288 - 4736 , v 1 Hearing Public ForPage8AS TO LANDLORD WITH A COPY TO AND WITH A COPY TO AS TO TENANT Notice shall be deemed to have been given or served i on the delivery date if delivered by hand , ii on the third business day after the date of deposit in the United States Postal Service , iii the next business day after the date of deposit with an overnight courier service , or iv on the date such delivery is refused or marked “ undeliverable ” Either party may change its address by providing written notice as specified herein ; provided , however , all addresses provided must be the actual street address of a residence or business establishment The foregoing method of service shall be exclusive , and Tenant and Landlord waive , to the fullest extent permitted under law , the right to any other meth