HomeMy WebLinkAbout24-1960Docusign Envelope ID: E5CE1206-5D93-+159-8D75-FC53FE91D253
ORDINANCE NO. 24-1960
AN ORD[NANC'E OF THE CITY OF DENTON APPROVING AN AIRPORT LAND LEASE
AGREEMENT BETWEEN THE CITY OF DENTON, TEXAS AND US TRINITY AVIATION,
LLC. AT THE DENTON ENTERPRISE AIRPORT; AUTHORIZING THE CITY MANAGER
TO EXECUTE THE AIRPORT LEASE AGREEMENT; AND PROVIDING AN EFFECTIVE
DATE
WHEREAS, US Trinity Aviation, LLC (“Lessee”) has requested an Airport Land Lease
Agreement (“Lease”) from the City of Denton (“Lessor”) for a certain 9.822-acre parcel at the
Denton Enterprise Airport (“Airport”); and
WHEREAS, at the October 9, 2024 meeting of the Airport Advisory Board, the Board
recommended that the City approve the Airport Land Lease Agreement by a vote of 7 to 0; and
WHEREAS, the City Council deems it in the public interest to enter into an Airport Land
Lease Agreement; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The findings and recitations contained in the preamble of this ordinance are
incorporated herein by reference.
SECTION 2. The Airport Land Lease Agreement in the form attached hereto as Exhibit
A is hereby approved and made a part of this ordinance for all purposes.
SECTION 3. The City Manager, or their designee, is hereby authorized to execute the
approved Airport Land Lease Agreement.
SECTION 4. This ordinance shall become effective immediately upon its passage and
approval.
The motion to approve this ordinance was made by Brian Beck and
seconded by Paul Meltzer , the ordinance was passed and approved by
the following vote U - A
Aye Nay Abstain Absent
Mayor Gerard Hudspeth:X
X
X
X
Vicki Byrd, District 1 :
Brian Beck. District 2:
Paul Meltzer, District 3 :
Joe Holland, District 4:
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Brandon Chase McGee, At Large Place 5 :X
XJill Jester, At Large Place 6:
PASSED AND APPROVED this the 15th day of October , 2024.
ATTEST:
LAUREN THODEN, CITY SECRETARY
T
APPROVED AS TO LEGAL FORM:
MACK REINWAND, CITY ATTORNEY
DocuStgned by:
BY:
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AIRPORT LEASE AGREEMENT
between
CITY OF DENTON
and
US Trinity Aviation, LLC
dated as of
October 15 , 2024
Airport Lease Agreement (1 1/20)
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TABLE OF CONTENTS
Page No.
ARTICLE I LEASE OF LEASED PREMISES; TERM __..__.__..._-...-...--..-....---..----.I
Section 1.1
Section 1.2
Section 1.3
Section 1.4
Section 1.5
Section 1.6
Lease of Leased Premises ..................................................................................1
Lease Term.........................................................................................................2
Extension of Lease Term. ..................................................................................2
Holding Over; Rights at Expiration ...................................................................2
Inspection of Leased Premises; Access to Books and Records .........................3
Ownership of Leased Premises..........................................................................3
ARTICLE II RENTAL; SECURITY DEPOSIT ___.._...._._________.____._....---.-------3
Section 2. 1 Rent
Section 2.2 Insufficient Funds Charge ............
Section 2.3 Time and Place of Payments..............................
Section 2.4 Delinquent Rent ............................................................
ARTICLE III OCCUPANCY, USE, AND CONDITIONS OF LEASED PREMISES...........4
Section 3.1
Section 3.2
Section 3.3
Section 3.4
Section 3.5
Section 3.6
Section 3.7
Section 3.8
Section 3.9
Condition of Leased Premises ...........................................................................4
Construction and Ownership of Improvements .................................................4
Access ................................................................................................................6
Use of Leased Premises and Compliance with all Laws and Regulations ........6
No Unauthorized Use.........................................................................................7
Permits and Licenses..........................................................................................7
Payment of Taxes...............................................................................................7
No Liens.............................................................................................................7
Compliance with 2252.909 of Texas Government Code. ..................................8
ARTICLE IV REPRESENTATIONS AND WARRANTIES ..__.____._.....__........_..______9
Section 4.1
Section 4.2
Representations by City .....................................................................................9
Representations by Lessee .................................................................................9
ARTICLE V OBLIGATIONS OF LESSEE _...._._______._.__.__.______.___.____._.___.._9
Section 5.1
Section 5.2
Section 5.3
Section 5.4
Section 5.5
Section 5.6
Section 5.7
Section 5.8
Section 5.9
Plans and Specifications ....................................................................................9
Appraisal at Conclusion of Construction...........................................................9
Operations and Maintenance..............................................................................9
Utilities.............................................................................................................10
Signs.................................................................................................................10
Securitv ............................................................................................................10
Obstruction Lights ...........................................................................................10
Hazardous Materials. .......................................................................................11
Trash, Garbage, and Other Refuse ...................................................................11
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ARTICLE VI INDEMNIFICATION AND INSURANCE ..............__.__..___..__.._._._..._..12
Section 6.1 Insurance ..........................................................................................................12
Section 6.2 Lessee’s Indemnification and Duty to Pay Damages. .....................................13
ARTICLE VII DEFAULT AND REMEDIES .........___.________.____.._...._....._...........__.13
Section 7.1
Section 7.2
Section 7.3
Section 7.4
Section 7.5
Lessee’s Default
Default by City..
Remedies for Failure to Pay Rent ..
Remedies for Breach of Agreement.,
Survival .....................................
13
14
14
14
14
ARTICLE VIII ASSIGNMENT AND SUBLEASING __....__.....___.___.___.______._..__.14
Section 8.1
Section 8.2
Section 8.3
Section 8.4
Section 8.5
Assignment by Lessee......................................................................................14
Assignment by City..........................................................................................15
Encumbrances ..................................................................................................15
Leasehold Mortgage.........................................................................................15
Leasehold Mortgage - Non-exhaustive List of Preconditions .........................15
ARTICLE IX MISCELLANEOUS PROVISIONS..................................................................17
Section 9. 1
Section 9.2
Section 9.3
Section 9.4
Section 9.5
Section 9.6
Section 9.7
Section 9.8
Section 9.9
Section 9.10
Section 9.11
Section 9. 12
Section 9.13
Section 9.14
Section 9.15
Section 9.16
Section 9.17
Waiver of Exemption ................17
17
18
18
18
18
18
18
19
19
19
19
20
20
20
20
20
Addresses .................................
No Waiver
Lessee’s Subordination
Additional Charges as Rent ......................................................
Subordination to Grant Assurances ....................................
Non-Interference With Operation of the Airport ......................
Emergency Closures ..........
Interpretation . . . . . . . . . ,
Force Majeure .......
Governing Law and Venue ...........................................,
Amendments and Waivers ..........,
Mnd@ ..............................................................................,
Merger
Relationship of Parties ................
Further Assurances....................
Required Federal Clauses .......................
li
LESSEE
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AIRPORT LEASE AGREEMENT
THIS AIRPORT LEASE AGREEMENT (this “Agreement”) effective as of this
15th day of October , 2024, by and between the CITY OF
DENTON, TEXAS, a Texas home-rule municipal corporation (“eity.”), and US Trinity Aviation,
LLC, a Texas limited liability company (the “Lessee” and, together with City, the “Parties“ and
each a “Party”).
RECITALS
WHEREAS, City is the owner and operator of the Denton Enterprise Airport in the City of
Denton, Texas (the “Airport”);
WHEREAS, City has the right, title, and interest in and to the real property on the Airport,
together with the facilities, easements, rights, licenses, and privileges hereinafter granted, and has
full power and authority to enter into this Agreement in respect thereof;
WHEREAS, City owns that certain real property located within the Airport legally
described on Exhibit A attached hereto and made part hereof which consists of 427,846.32 square
feet or 9.822 acres (such real property, together with all rights, privileges, easements, and
appurtenances benefiting such real property and all Preexisting Improvements, as hereafter
defined, are collectively referred to herein as the “Leased Premises”);
WHEREAS, the City desires to continue to have and further develop the Leased Premises
for exclusively aeronautical purposes beneficial to the City and the general public;
WHEREAS, Lessee is qualified, ready, willing, and able to undertake such commercial
development and/or use; and
WHEREAS, the Parties hereto wish to memorialize their agreement herein and they agree
as follows:
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing Recitals, which by this reference
are hereby incorporated into this Agreement, and the mutual covenants contained in this
Agreement, the Parties hereto hereby agree as follows:
ARTICLE I
LEASE OF LEASED PREMISES; TERM
Section 1.1 Lease of Leased Premises
A. City hereby leases to Lessee, and Lessee hereby rents from City for its exclusive
use the Leased Premises, all herein described rights incident thereto, for and during the Lease Term
and upon and subject to the terms, provisions, and conditions herein set forth. All improvements
existing in, on, or under the Leased Premises as of the Commencement Date, as hereafter defined,
shall be referred to herein as “Preexisting Improvements”. All improvements constructed by or on
[ aCL 1
as
CITY
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behalf of the City from and after the Commencement Date, as hereafter defined, shall be referred
to herein as “City Improvements”. The “Leased Premises” shall be deemed to include the
Preexisting Improvements and the City Improvements, as hereafter defined.
Section 1.2 Lease Term. The term of this Agreement (the “Lease Term”), shall be for
a period of forty (40) years commencing on October 15 , 2024 (the “Commencement
Date”), and unless sooner terminated pursuant to the provisions of this Agreement, shall
terminate on October 15 . 2064
Section 1.3 Extension of Lease Term. The Lease Term may be extended for an
additional ten (10) years. The granting of such extension shall require additional capital
investment in the Leased Premises, not inclusive of any requirements, maintenance, or otherwise,
contained elsewhere within the Agreement or as required by any applicable rules, regulations, or
minimum operating standards, in an amount consistent with the then current Denton Leasing and
Development Policy, or other applicable policy in force at the time, provided that such capital
investment shall take place not later than prior to the termination of the initial Lease Term. The
value of the additional capital investment shall be negotiated between the parties and be
consistent with the existing leasing practices at such time and any additional improvements
related to such capital investment will be reviewed following the same development process as
the initial Improvements. A request for extension will be reviewed by the City upon a written
request by the Lessee to be provided to the City not less than ninety (90) days prior to the
termination that includes details as to the capital investment plan and what activities related
thereto have been completed. No further extensions shall be granted by the City. However; the
foregoing shall not preclude the Parties from entering into a new lease to be effective after the
expiration of the Lease Term.
Section 1.4 Holding Over: Rights at Expiration.
A. If Lessee retains all or any portion of the Leased Premises after the expiration or
termination of the Lease Term by lapse of time or otherwise, such holding over shall constitute the
creation of a tenancy at will with respect to such retained portion, terminable by City at any time
upon thirty (30) days prior written notice to Lessee. Under such tenancy at will, Lessee agrees to
pay to City as liquidated damages, and not as a penalty, 150 percent of the last monthly rental rate
under this agreement for each month of holdover. All provisions of this Agreement shall remain
in full force and effect during such holdover period.
B. Lessee further agrees that upon the expiration or termination of the Lease Term, the
Leased Premises will be delivered to City in as good a condition as when this Agreement began,
reasonable wear and tear and matters covered by insurance excepted and the Improvements, as
hereafter defined, will be delivered to City in as good a condition as when such Improvements
were constructed, located, installed, placed or erected in, upon or under the Leased Premises,
reasonable wear and tear and matters covered by insurance excepted.
C. Except as otherwise expressly set forth elsewhere herein, Lessee shall have no
rights with respect to any improvements made to the Leased Premises during the Lease Term that
are not otherwise required to be removed by the City.
– DS
dl
CITY
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Section 1.5 Inspection of Leased Premises: Access to Books and Records. City, through
its duly authorized agents, shall have at any reasonable time the full and unrestricted right to enter
the Leased Premises and the Improvements, as hereafter defined, for the purpose of periodic
inspection for fire protection, maintenance and to investigate compliance with the terms of this
Agreement; provided, however, that except in the case of emergency, such right shall be exercised
upon reasonable prior notice to Lessee and with an opportunity for Lessee to have an employee or
agent present, and will not interfere with Lessee’s construction or operations. Lessee agrees to
provide any documents that may be requested by City to determine compliance with this
Agreement within thirty (30) days of such request.
Section 1.6 Ownership of Leased Premises. City and Lessee intend and hereby agree
that the Leased Premises shall be and remain the property of City during the entire term of this
Agreement and thereafter.
ARTICLE II
RENTAL; SECURITY DEPOSIT
Section 2.1 Rent
A. In consideration for the use of the Leased Premises herein granted, Lessee shall
pay to City the following rental amounts (the “Rent”). The monthly rent shall be in the sum of $
0.40 per net square foot, as determined and provided in Exhibit A, said sum being stipulated
herein as One Hundred and Seventy One Thousand One Hundred and Thirty-Eight Dollars and
Fifty-Three Cents ($ 171,138.53) (sales tax included), payable in twelve equal monthly
installments of Fourteen Thousand, Two Hundred and Sixty-One Dollars and Fifty-Four Cents
($14,261.54). All rental payment will be due in advance on the first of each calendar month
thereafter. City will mail a courtesy statement on or about the first of each month. Failure to
receive the statement in a timely manner does not absolve Lessee from making rental payment
on the first of each month.
B. The Rent shall begin at the earlier of the issuance of a building permit or the first
day of the third month following the Commencement date.
C. The Rent for the Leased Premises shall be readjusted at the end of each two (2) year
period during the Lease Term, starting on the Commencement Date month and every two (2) years
thereafter, on the basis of the proportion that the then-current United States Consumer Price Index
for all urban consumers (“CPI-U”) for the Dallas-Fort Worth Bureau of Labor Statistics (1982-84
= 100) bears to that of the Commencement Date month.
Section 2.2 Insufficient Funds Charge. There shall be an extra charge of THIRTY
DOLLARS ($30.00) on any check returned by the bank for insufficient funds or account not
exlstrng.
Section 2.3 Time and Place of Payments. The Rent, as well as all other charges
hereunder, shall be payable in equal monthly installments in advance on or before the first business
day of each calendar month of the Lease Term at City’s offices of the Finance Department of the
@ CITY
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LESSEE
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City of Denton, 215 E. McKinney, Denton, Texas, unless otherwise designated in writing by the
City
Section 2.4 Delinquent Rent. In the event Rent due pursuant to Section 2.1 or any other
amounts payable by Lessee hereunder shall not be paid by Lessee on the due date thereof, Lessee
shall pay to City as additional Rent, an interest charge of five percent (5%), or the maximum
percentage allowed by law, whichever is greater, of the amount due for each full calendar month
of delinquency, computed as simple interest. No interest shall be charged until payment is thirty
(30) days overdue, but any such interest assessed thereafter shall be computed from the due date.
ARTICLE III
OCCUPANCY, USE, AND CONDITIONS OF LEASED PREMISES
Section 3.1 Condition of Leased Premises. Lessee accepts the Leased Premises in their
present “as is” condition. Lessee releases City and holds City and City’s officers, directors, elected
and appointed officials, employees, and agents harmless for any claims arising out of or related to
any condition of the Leased Premises.
Section 3.2 Construction and Ownership of Improvements.
A. The Parties agree that this Agreement is entered into specifically with the
understanding that Lessee will build, construct, complete, and furnish one or more buildings,
generally described as: Phase 1, consisting of one hangar with office space, one hangar for
aircraft storage, aircraft apron, a fuel farm, and vehicle parking; Phase 2, consisting of one
aircraft storage hangar and aircraft apron, and Phase 3, consisting of one aircraft storage hangar
and aircraft apron; at its own expense in accordance to Plans and Specifications, as defined in
Section 5.1. Any and all buildings, structures, fixtures, appurtenances, site work, site utilities, or
other improvements to be located or constructed on the Leased Property by Lessee during the
Lease Term in accordance with the Plans and Specifications shall be known as “Improvements”
and Lessee agrees to complete construction of the Improvements as follows and to complete the
construction of the Improvements in accordance with all governmental requirements and the
Plans and Specifications and to obtain a Certificate of Occupancy.
(a) Complete construction of Phase 1 and obtain a Certificate of Occupancy
within 365 days (one year) of issuance of a building or grading permit. Lessee may request an
extension of time with sufficient justification as to the necessity for such an extension. No such
requested extension shall extend this requirement more than a total of 90 days. The Lessee must
receive written approval of the requested extension from the Lessor for any extension to be valid.
(b) Phase 2 shall complete construction and obtain a Certificate of Occupancy
within 365 days (one year) of the completion of Phase 1. Lessee may request an extension of
time with sufficient justification as to the necessity for such an extension. No such requested
extension shall extend this requirement for more than a total of 90 days. The Lessee must receive
written approval of the requested extension from the Lessor for any extension to be valid.
(c) Phase 3 shall complete construction and obtain a Certificate of Occupancy
within 365 days (one year) of the completion of Phase 2. Lessee may request an extension of/– W /– DSB ..„ ' a+ CITY \ ’ LESSEE
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time with sufficient justification as to the necessity for such an extension. No such requested
extension shall extend this requirement more than a total of 90 days. The Lessee must receive
written approval of the requested extension from the Lessor for any extension to be valid.
B. Notwithstanding anything contained in the Lease Agreement to the contrary, a
failure to complete the Improvements within the construction period and any City approved
extensions described in Section 3.2, may at the sole option and discretion of the Lessor, result in
the immediate termination and cancellation of this Lease Agreement upon 30 days written notice
of cancellation to Lessee. In such case Lessee’s rights under this Lease Agreement will
immediately cease and be forfeited, and all Improvements shall immediately become the
property ofLessor at no cost, expense or other compensation paid by lessor to Lessee; and
Lessee shall immediately vacate the Premises.
C. The capital investment in the Improvements on the Leased Premises shall be a
minimum of Six Million Dollars ($6,000,000.00), upon the completion of all phases of
Improvement construction. The Improvements, at the completion of all phases of construction,shall include:
a. No less than an 8,000 square foot building with a minimum of 6,000
square feet dedicated to customer service and support functions.
b.No less than 24,000 square feet for transient airfraft storage.
C.No less than 100,000 square feet of Apron to support aircraft operations.
d.No less than 12,000 gallons of storage for Jet Fuel
e.No less than 12,000 gallons of storage for AvGas
f Off-street vehicular parking with the capacity to meet or exceed local
building regulations taking into consideration permitted use at peak demand.
D. The Lessee shall use the Leased property for the following aeronautical uses:
Fixed Based Operator. Any changes in aeronautical use must be approved in writing by the
Airport Director or designee.
E. Lessee will own the Improvements during the Lease Term only. Effective upon
the expiration or termination of this Agreement, the Improvements shall become the property of
City, without the payment by City of any compensation or other consideration for any
Improvements, and title to the Improvements shall merge with the title of, or be otherwise
considered and deemed a part of, the real property of City, free and clear of any claim of Lessee
and any persons or entities claiming under or through Lessee including, without limitation, the
trustee, beneficiary or holder of any mortgage or deed of trust. Any other personal property of
Lessee that can be removed by Lessee without material damage to the Leased Premises or to the
Improvements may remain the personal property of Lessee and may be removed by Lessee at
any time on or before the end of the Lease Term. Lessee shall, by removing any such personal
property, repair all damage to the Leased Premises and Improvements caused by such removal.
DSal 5
CITY LESSEE
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The City shall have the option to have the tenant remove any or all Improvements at the end of
the term if the Improvements have not been maintained in accordance with the Lease or, based
on the most recent Condition Assessment, have reached the end of their useful life.
F. The tenant shall be responsible for conducting a condition assessment report on
their facilities during the term of the lease (the “Condition Assessment”). This shall be conducted
in 5-year increments beginning at the 10th anniversary of the lease agreement. The
engineering/inspection shall be hired by the tenant at the tenant’s expense but must be approved
in writing by the City. The Condition Assessment shall examine the building’s structural
components, electrical, plumbing, heating and cooling systems, roof, etc. Additionally, any
pavement (asphalt or concrete) within the leasehold area shall also be examined and reported on.
The Condition Assessment shall be provided to the lessor within thirty (30) days of the
Condition Assessment due date. Any extensions must be requested by the Lessee and approved
by the Lessor in writing. The Lessee shall within ninety (90) days provide to the Lessor a plan to
correct any deficiencies identified in the Condition Assessment within one (1) year, unless
extended in writing by the Airport Director, or designee.
Section 3.3 Access. City agrees that if Lessee is not in breach of this Agreement, Lessee
and Lessee’s employees, officers, directors, sublessees (that are approved by City pursuant to this
Agreement), contractors, subcontractors, suppliers, agents, invitees, and other representatives
(“Lessee’s Associates”) are authorized to ingress and egress across the common areas of the
Airport (in the areas designated by City, for the purposes for which they were designed, and as
permitted by applicable Laws and Regulations as defined in Section 3.4) on a non-exclusive basis
and to the extent reasonably necessary for Lessee’s use, occupancy, and operations at the Leased
Premises. Lessee agrees to comply with any driver training program or guidelines established by
the Lessor. Lessee further agrees to ensure that Lessee’s Associates shall comply with such
program guidelines. During special events at the Airport, Lessee acknowledges that the standard
operation procedure at the Airport may be altered such that egress and ingress to the Leased
Premises may be altered by the City. The City will notify Lessee in writing of any special events
or closures that will impede Lessee’s use of the Leased Premises. Lessee’s failure to comply with
the altered procedure is a default of this Agreement, and City may proceed to terminate this
Agreement.
Section 3.4 Use of Leased Premises and Compliance with all Laws and Regulations.
Lessee agrees that it shall use the Leased Premises and the Improvements only for aeronautical
purposes and Lessee and Lessee’s Associates shall comply at all times, at Lessee’s sole cost, with
any and all laws and regulations (as amended or otherwise modified from time to time) that are
applicable to Lessee’s business and Lessee’s construction of the Improvements, including those
pertaining to the construction of buildings on public property, and Lessee’s use, occupancy, or
operations at the Leased Premises, the Improvements or the Airport (the “Laws and Regulations“),
which include, but are not limited to, all laws, statutes, ordinances, regulations, rules, orders, writs,
judgments, decrees, injunctions, directives, rulings, guidelines, standards, codes, policies, common
law, and other pronouncements of any kind having the effect of law that may be applicable at any
time during the term of this Agreement including, but not limited to, the Airport Rules and
Regulations, Minimum Operating Standards, master plans and zoning codes, and all Laws and
Regulations pertaining to the environment (the “Environmental Laws”); any and all plans and
programs developed in compliance with such requirements (including, but not limited to, anyBCITLESSEELz
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Airport Security Plan); and all lawful, reasonable, and nondiscriminatory Airport policies and
other requirements. Lessee shall provide all required notices under the Laws and Regulations.
Upon a written request by City, Lessee will verify, within a reasonable time frame, compliance
with any Laws and Regulations. Further, in its use of the Leased Premises and the Improvements,
Lessee shall comply with the following:
A. Address. Lessee shall file with the Airport Director and keep current its mailing
addresses, telephone numbers, and contacts where it can be reached in an emergency.
B. List of Sublessee and Aircraft. At least quarterly, Lessee shall file with the Airport
Director and keep current a list of its sublessees and a list of all aircraft hangared or tied down on
the Leased Premises within the previous four (4) month period.
Section 3.5 No Unauthorized Use. Lessee and Lessee’s Associates shall use the Leased
Premises, the Improvements, and the Airport only for purposes that are expressly authorized by
this Agreement and shall not engage in any unauthorized use of the same. Unauthorized uses
include, but are not limited to, restricting access on any road or other area that Lessee does not
lease; placing waste materials on the Airport or disposing of such materials in violation of any
Laws and Regulations; any use that would constitute a public or private nuisance or a disturbance
or annoyance to other Airport users; driving a motor vehicle in a prohibited Airport location; the
use of automobile parking areas in a manner not authorized by City; any use that would interfere
with any operation at the Airport or decrease the Airport’s effectiveness (as determined by City in
its sole discretion); and any use that would be prohibited by or would impair coverage under either
Party’s insurance policies or would cause an increase in the existing rate of insurance upon the
Leased Premise.
Section 3.6 Permits and Licenses. Lessee shall obtain and maintain in current status all
permits and licenses that are required under any Laws and Regulations in connection with Lessee’s
construction of Improvements and the use, occupancy, or operations at the Leased Premises, the
Improvements, or the Airport. Those permits and licenses include but are not limited to, (i) all
contractors doing work on the Leased Premises, including work on or for the Improvements, must
be licensed by the State of Texas, (ii) prior to commencing construction of any Improvements, a
permit must be obtained from the City of Denton and a copy of the permit must be furnished to
the Airport Manager, and (iii) if applicable, clearance must be obtained from the responsible health
department or other agency. In the event that Lessee receives notice from any governmental entity
that Lessee lacks, or is in violation of, any such permit or license, Lessee shall provide City with
timely written notice of the same.
Section 3.7 Payment of Taxes. Lessee shall pay (before their respective due dates) all
taxes, fees, assessments, and levies that relate to Lessee’s use, occupancy, or operations at the
Leased Premises, the Improvements, or the Airport and all other obligations for which a lien may
be created relating thereto (including, but not limited to, utility charges and work for any
Improvements). Lessee shall be responsible for any and all taxes generated by the Denton County
Tax Assessor / Collector.
Section 3.8 No Liens. No liens may be placed upon the Leased Premises. Within thirty
(30) days, Lessee shall pay all lawful claims made against City and discharge all liens filed or
Ba CITY
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LESSEE
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which exist against the Leased Premises or any other portion of the Airport (other than Lessee’s
trade fixtures or trade equipment) to the extent such claims arise out of or in connection with,
whether directly or indirectly, the failure to make payment for work done or materials provided by
Lessee its contractors, subcontractors, or materialmen. However, Lessee shall have the right to
contest the amount or validity of any such claim or lien without being in default under this
Agreement upon furnishing security in a form acceptable to the City, in an amount equal to one
hundred percent (100%) of such claim or lien, which insures that such claim or lien will be properly
and fully discharged forthwith in the event that such contest is finally determined against Lessee
or City. The City shall give timely notice to Lessee of all such claims and liens of which it becomes
aware. When contracting for any work in connection with the Leased Premises or the
Improvements, Lessee shall include in such contract a provision prohibiting the contractor or any
subcontractor or supplier from filing a lien or asserting a claim against City’s real property or any
interest therein. The lessee is solely responsible for ensuring that all requirements are met such
that such lien waivers are effective and enforceable (such as filing such contracts, if necessary).
Furthermore, when completed, the Improvements on the Leased Premises shall be free from all
construction liens.
Section 3.9 Compliance with 2252.909 of Texas Government Code.
A. In connection with Lessee’s construction, alteration, or repair of the Improvements
or any other construction on the Leased Property, Lessee shall require their contractor to:
(a) execute a payment bond that conforms to Subchapter I, Chapter 53,
Property Code; and
(b) execute a performance bond in an amount equal to the amount of
the contract for the protection of the City and conditioned on the faithful performance of
the contractor’s work in accordance with the plans, specifications, and contract documents.
B. Lessee shall provide the Lessor with a notice of commencement of construction no
later than ninety (90) days prior to the commencement of construction, alteration, or repair of any
improvement to the Leased Property (“Notice of Commencement”), which will materially conform
with the requirements under Texas Local Government Code 2252.909.
C. Notice of Commencement must:
(a)identify the public property where the work will be performed;
(b)described the work to be performed;
(C)state the total cost of the work to be performed;
(d)include copies of the performance and payment bonds required; and
(e) include a written acknowledgment signed by the contractor stating
that copies of the required performance payment bonds will be provided to all
subcontractors not later than the fifth day after the date a subcontract is executed.
[#LESSEE
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 Representations by City. City represents and warrants that it has the right,
power, and legal capacity to enter into and perform its obligations under this Agreement, has duly
executed and delivered this Agreement, and that this Agreement constitutes a legal, valid, and
binding obligation of City.
Section 4.2 Representations by Lessee. Lessee represents and warrants that it has the
right, power, and legal capacity to enter into and perform its obligations under this Agreement, has
duly executed and delivered this Agreement, and that this Agreement constitutes a legal, valid, and
binding obligation of Lessee.
ARTICLE V
OBLIGATIONS OF LESSEE
Section 5.1 Plans and Specifications. With respect to any Improvements, Lessee shall
select qualified architects and engineers to prepare, prior to construction or on a phased basis
during construction, the architectural, site, structural, mechanical, and/or electrical drawings and
specifications for the Improvements in the form and content required by the appropriate local
planning and zoning authorities and pursuant to all applicable Laws and Regulations and this
Agreement, which shall be approved in writing by City (collectively, the “Plans and
Specifications”).
Section 5.2 Appraisal at Conclusion of Construction. Lessee shall, at its own expense,
conduct an appraisal of the property within ninety (90) days of the conclusion of the construction
of Improvements described in Section 3.2 The appraisal shall confirm the investment of capital
by the Lessee due to the construction of the Improvements at the level required by Section 3.2.
The appraiser selected by the Lessee shall be approved in writing by the Airport Director, or
designee.
Section 5.3 Operations and Maintenance. Lessee shall maintain the Leased Premises
and all Improvements in a condition that is clean, free of debris, safe, sanitary, and in good repair
and shall not accumulate or permit the accumulation of any trash, refuse, debris, or of anything
that is unsightly, which creates a fire hazard, nuisance, or causes inconvenience to adjoining
properties. Lessee shall at its own expense create, execute, and maintain a comprehensive
landscaping and irrigation plan for the Leased Premises in accordance with relevant local
landscaping codes. Lessee shall perform all work in accordance with Laws and Regulations and
in a good and workmanlike manner. Lessee shall promptly remedy any condition that fails to meet
this standard. Without limiting the foregoing obligations, Lessee shall not store on the Leased
Premises any inoperable equipment, discarded or unsightly materials, or materials likely to create
a hazard; shall not use areas outside of enclosed buildings for storage; and shall store trash in
covered metal receptacles or any other receptacles approved in writing by the Airport Director, or
designee. Any substance or material that is regulated by any Environmental Law (“Hazardous
Materials”) shall be governed by Section 5.8. In addition, Lessee agrees to comply with allaCITY
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applicable provisions of City’s Texas Pollutant Discharge Elimination Multi-Sector General
Permit
Section 5.4 Utilities. Lessor represents that there are water, sewer, and 3-phase
electrical lines accessible within the general vicinity of the Leased Premises. Lessee shall be
responsible, at Lessee’s sole cost and expense, for obtaining all utility connections at or for the
Leased Premises and the Improvements. Further, Lessee shall pay for telecommunications,
television, internet, gas, light bulbs, electricity, water, sewer, and garbage and trash removal
services provided to or used by Lessee and shall make such deposits as are required to secure
service. Lessee shall be responsible for any water or sewer impact fees incurred by their use of
the Leased Premises. Any repairs of the utility lines, other than those which are the responsibility
of the utility service, are the responsibility of Lessee. If utilities are billed to a common meter, the
Lessee shall pay to City the pro-rated amount based on the square footage leased.
Section 5.5 Signs. Lessee shall not place, or cause to be placed, any sign or signs on
the Leased Premises or the Improvements unless otherwise agreed to in writing by City. Lessee,
at its sole expense, shall be responsible for the creation, installation, and maintenance of all such
Signage. Lessee shall pay to the lessor any and all damages, injuries, or repairs resulting from the
installation, maintenance or repair of any such signage. Any Signage placed on the Lease premises
shall be maintained at all times in a safe, neat, sightly, and good physical condition. All signage
shall be removed from the lease Premises by Lessee immediately upon receipt of instructions for
removal of same from Lessor, including without limitation, upon expiration or termination of this
Lease Agreement. If Lessee fails to remove the Signage, then Lessor may do so at the sole cost
and expense of Lessee. Notwithstanding anything contained herein to the contrary, all signage
shall comply with all applicable City of Denton ordinances, including the City of Denton sign
ordinance.
Section 5.6 Security. Lessee is responsible to comply (at Lessee’s sole cost) with all
security measures that City, the United States Transportation Security Administration, the United
States Department of Homeland Security (“Homeland Security”), the United States Federal
Aviation Administration (“FAA”), or any other governmental entity having jurisdiction may
require in connection with the Airport, including, but not limited to, any access credential
requirements, any decision to remove Lessee’s access credentials, and any civil penalty obligations
and other costs arising from a breach of security requirements caused or permitted by Lessee or
Lessee’s Associates. Lessee agrees that Airport access credentials are the property of City and
may be suspended or revoked by City for security-related reasons in its sole discretion at any time.
Lessee shall pay all fees associated with such credentials, and Lessee shall immediately report to
the Airport Manager any lost credentials or credentials that Lessee removes from any employee or
any of Lessee’s Associates. Lessee shall protect and preserve security at the Airport. Lessee
acknowledges that FAA, Homeland Security, or a subdivision of either may enact laws or
regulations regarding security at general aviation airports such that City may not be able to comply
fully with its obligations under this Agreement, and Lessee agrees that City will not be liable for
any damages to Lessee or Lessee’s personal property that may result from said noncompliance.
Section 5.7 Obstruction Lights. Lessee shall, at its expense, provide and maintain
obstruction lights on any structure on the Leased Premises, including the Improvements, if required
– DSal
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by City or FAA regulations. Any obstruction lights so required shall comply with the
specifications and standards established for such installations by City or FAA.
Section 5.8 Hazardous Materials
A. No Violation of Environmental Laws. Lessee shall not cause or permit any
Hazardous Materials to be used, produced, stored, transported, brought upon, or released on, under,
or about the Leased Premises or the Airport by Lessee or Lessee’s Associates in violation of
applicable Environmental Laws. Lessee is responsible for any such violation as provided by
Section 7
B. Response to Violations. Lessee agrees that in the event of a release or threat of
release of any Hazardous Material by Lessee or Lessee’s Associates at the Airport, Lessee shall
provide City with prompt notice of the same. Lessee shall respond to any such release or threat of
release in accordance with applicable Laws and Regulations. If City has reasonable cause to
believe that any such release or threat of release has occurred, City may request, in writing, that
Lessee conduct reasonable testing and analysis (using qualified independent experts acceptable to
City) to show that Lessee is complying with applicable Environmental Laws. City may conduct
the same at Lessee’s expense if Lessee fails to respond in a reasonable manner. Lessee shall cease
any or all of Lessee’s activities as City determines necessary, in its sole and absolute discretion, in
connection with any investigation, cure, or remediation. If Lessee or Lessee’s Associates violate
any Environmental Laws at the Airport (whether due to the release of a Hazardous Material or
otherwise), Lessee, at Lessee’s sole expense, shall have the following obligations, which shall
survive any expiration or termination of this Agreement: (i) promptly remediate such violation in
compliance with applicable Environmental Laws; (ii) submit to City a written remediation plan,
and City reserves the right to approve such plan (which approval shall not be unreasonably
withheld) and to review and inspect all work; (iii) work with City and other governmental
authorities having jurisdiction in connection with any violation; and (iv) promptly provide City
copies of all documents pertaining to any environmental concern that are not subject to Lessee’s
attorney-client privilege.
C. Obligations upon Termination and Authorized Transfers. Upon any expiration or
termination of this Agreement or any change in possession of the Leased Premises authorized by
City, Lessee shall demonstrate to City’s reasonable satisfaction that Lessee has removed any
Hazardous Materials and is in compliance with applicable Environmental Laws. Such
demonstration may include, but is not limited to, independent analysis and testing to the extent
that facts and circumstances warrant analysis and testing, such as evidence of past violations or
specific uses of the Leased Premises. If the site is contaminated during Lessee’s possession, Lessee
shall bear all costs and responsibility for the required clean up, and shall hold City, its officers,
elected and appointed officials, employees, and agents harmless therefrom. Notwithstanding
anything to the contrary, the obligations of this Section 5.8 shall survive any termination of this
Agreement.
Section 5.9 Trash, Garbage, and Other Refuse. Lessee shall pick up and provide for a
complete and proper arrangement for adequate sanitary handling and disposal, away from the
Airport through the City or any other licensed refuse hauler. Lessee is responsible for contacting
the Master Refuse Hauler and arranging for disposal and payment of such services. Lessee shall
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provide and use suitable covered metal receptacles, or any other receptacles approved by the
Airport Director, or designee, for all such garbage, trash, and other refuse on the Leased Premises.
Lessee shall not pile boxes, cartons, barrels, pallets, debris, or similar items in an unattractive or
unsafe manner, on or about the Leased Premises.
ARTICLE VI
INDEMNIFICATION AND INSURANCE
Section 6.1 Insurance. Lessee agrees to purchase general liability covering the Lessee
and Lessee’s Associates, and its operations on the Airport as described in Section 3 in an amount
not less than $1,000,000 per occurrence and provide coverage for premises/operations and
contractual liability AND where exposure exists in the opinion of the Lessor, coverage for:
products/completed operations; explosions, collapse, and underground property damage; and
environmental impairment.
A. All risk property insurance on a one-hundred percent (100%) replacement cost
basis covering loss or damage to all facilities and improvements located on the Lease premises,
either as a part of this Lease Agreement or erected by the Lessee subsequent to this Lease
Agreement. Covered perils shall include, but not be limited to, Fire, Extended Coverage, and
Vandalism & Malicious Mischief. Under no circumstances shall the Lessor be liable for any
damages to fixtures, merchandise, or personal property of the Lessee or its sub-lessees. The City
of Denton will be shown as a loss payee, as their interest may appear.
B. Additional Insurance requirements may be necessary as identified in the Airport
Minimum Operating Standards for specific aeronautical uses.
C . CoveraRe Requirements
a. All liability policies shall be endorsed to include the city of Denton, and
its officers and employees as an Additional Insured. All all-.risk property policies shall be
endorsed to name the City of Denton as a loss payee. All required insurance policies shall
provide for a minimum of 30 days written notice to the City of any cancellation or material
change to the policy.
b. All insurance required by the Lease Agreement must be issued by a
company or companies of sound and adequate financial responsibility and authorized to do
business in the State of Texas. All policies are subject to the examination and approval of the
City’s office of Risk Management for their adequacy as to content, form of protection and
providing company.
c. Required insurance naming the City as an additional insured much be
primary insurance and not contributing with any other insurance available to the City whether
from a third-party liability policy or other. Said limits of insurance shall in no way limit the
liability the Lessee hereunder.
B CITY
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d. The Lessor shall be provided with a copy of all such policies and renewal
certificates. Failure to Lessee to comply with the minimum specified amounts or types of
insurance as required by Lessor shall constitute Lessee’s default of this Lease Agreement.
e. During the Lease Term, or any extension thereof, Lessor herein reserves
the right to, with one hundred twenty (120) days’ notice, adjust or increase the liability insurance
amounts required of the Lessee, and to require any additional rider, endorsement, provisions, or
certificates of insurance, and Lessee hereby agrees to provide any such insurance requirements as
may be required by Lesson
Section 6.2 Lessee’s Indemnification and Duty to Pay Damages.
A. LESSEE SHALL HOLD CITY AND CITY’S OFFICERS, ELECTED AND APPOINTED
OFFICIALS9 ENIPLOYEES9 AND AGENTS EXEMPT AND HARMLESS, TO THE EXTENT ALLOWED BY
LAW, FROM AND AGAINST ANY AND ALL CLAINIS9 DEMANDS9 SUITS9 JUDGMENTS, COSTS, AND
EXPENSES ASSERTED BYAVV PERSON OR PERSONS (INCLUDING AGEVrs OR EMPLOYEES OF CITy,
LESSEE, OR SUBLESSEE) BY REASON OF DEATH OR INJURY TO PERSONS OR LOSS OF OR DAMAGE
TO PROPERTY RESULTING FROM LESSEE’S OPERATIONS, OR AVVTHrNG DONE OR OMITTED BY
LESSEE UNDER THIS AGREEMENT EXCEPT TO THE EXTENT THAT SUCH CLAIMS, DEMANDS, SUITS,
JUDGMENTS9 COSTS) AND EXPENSES MAY BE ATTRIBUTED TO THE INTENTIONAL ACTS OR
OMISSIONS OF CITY, ITS AGENTS, OR EMPLOYEES.
B. CITY SHALL NOT BE LIABLE TO LESSEE FOR AVV DAMAGE BY OR FROM ANy ACT
OR NEGLIGENCE OF ANY CO-TENANT OR OTHER OCCUPANT OF THE SAME BUILDING9 OR BY ANY
OWNER OR OCCUPANT OF ADJOINING OR CONTIGUOUS PROPERTY.
C. LESSEE AGREES TO PAY FOR ALL DAMAGES TO THE LEASED PREMISES, THE
IMPROVEMENTS, ITS APPARATUS, OR APPURTENANCES CAUSED BY LESSEE’S MISUSE OR
NEGLECT THEREOF.
D. LESSEE SnALL BE RESPONSIBLE AND LIABLE FOR THE CONDUCT OF LESSEE’S
ASSOCIATES IN, ON AND AROUND THE LEASED PREMISES.
ARTICLE VII
DEFAULT AND REMEDIES
Section 7.1 Lessee’s Default. The occurrence of any of the following events shall
constitute a default by Lessee under this Agreement unless cured within thirty (30) days following
written notice of such violation from City: (i) Lessee fails to timely pay any Rent; (ii) Lessee or
Lessee’s Associates violate any requirement under this Agreement (including, but not limited to,
abandonment of the Leased Premises); (iii) Lessee assigns or encumbers any right in this
Agreement, delegates any performance hereunder, or subleases any part of the Leased Premises
(except as expressly permitted in this Agreement); (iv) Lessee files a petition in bankruptcy or has
a petition filed against Lessee in bankruptcy, insolvency, or for reorganization or appointment of
a receiver or trustee which is not dismissed within sixty (60) days; (v) Lessee petitions for or enters
into an arrangement for the benefit of creditors, or suffers this Agreement to become subject to a
writ of execution and such writ is not released within thirty (30) days; (vi) Lessee defaults inB .,„ "; a\ CITY \ - LESSEE
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constructing any Improvements that are required to be constructed under this Agreement; or (vii)
Lessee dissolves or dies.
Section 7.2 Default by City. City shall not be in default under this Agreement unless
City fails to perform an obligation required of City under this Agreement within thirty (30) days
after written notice by Lessee to City. If the nature of City’s obligation is such that more than
thirty (30) days are reasonably required for performance or cure, City shall not be in default if City
commences performance within such thirty (30) day period and thereafter diligently prosecutes
the same to completion.
Section 7.3 Remedies for Failure to Pay Rent. If any Rent required by this Agreement
shall not be paid when due, City shall have the option to:
A. Terminate this Agreement, take possession of the Improvements, resume
possession of the Leased Premises for its own account, and recover immediately from Lessee the
differences between the Rent and the fair rental value of the property for the term, reduced to
present worth, or
B. Terminate this Agreement, take possession of the Improvements, resume
possession of the Leased Premises, re-lease the Leased Premises for the remainder of the term for
the account of Lessee, and recover from Lessee, at the end of the term or at the time each payment
of Rent comes due under this Agreement as City may choose, the difference between the Rent and
the rent received on the re-leasing or renting.
In either event, City shall also recover all expenses incurred by reason of breach, including
reasonable attorney’s fees.
Section 7.4 Remedies for Breach ofAgreement. If Lessee shall fail to perform or breach
any provision of this Agreement other than the agreement of Lessee to pay Rent, City shall provide
written notice to Lessee specifying the performance required. Thirty (30) days after such notice is
provided under this Section 7.4, City may terminate this Agreement or take any such action it is
legally entitled to take, including instituting litigation to compel performance of this Agreement.
Should litigation be filed by City and it is the prevailing party in that litigation, Lessee shall be
liable for all expenses related to such litigation, including City’s attorney’s fees.
Section 7.5 Survival. The provisions of this Article VII and the remedies and rights
provided in this Article VII shall survive any expiration or termination of this Agreement.
ARTICLE VIII
ASSIGNMENT AND SUBLEASING
Section 8. 1 Assignment by Lessee.
A. Lessee shall not assign any of its rights under this Agreement, including, but not
limited to, rights in any Improvements, (whether such assignment is voluntarily or involuntarily,
by merger, consolidation, dissolution, change in control, or any other manner), and shall not
delegate any performance under this Agreement, except with the prior written consent of City toBCIT
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any of the same, in City’s sole discretion. As a condition of obtaining such consent, the City
reserves the right to require the transferee receiving any such rights from Lessee to execute a new
lease agreement provided by City. Regardless of City’s consent, Lessee shall not be released from
any obligations for matters arising during the time when this Agreement was in effect. Any
purported assignment or delegation of rights or delegation of performance in violation of this
section is void.
B. Upon the expiration or termination of this Agreement, Lessee hereby assigns,
transfers, and conveys to City, without warranty, the following:
(a)The right to the use of the Plans and Specifications to the extent owned by
Lessee;
(b)Any copyright interests in the Plans and Specifications held by Lessee; and
(c) The right to enforce, in Lessee’s own name as a proper party, (i) any
subcontracts related to the Improvements or other maintenance or services contracts in force with
respect to the Leased Premises or Improvements and any warranties arising under any of them or
in connection with the performance thereof, as the case may be.
Section 8.2 Assignment by City. City shall have the right, in City’s sole discretion, to
assign any of its rights under this Agreement (and in connection therewith, shall be deemed to have
delegated its duties), and upon any such assignment, Lessee agrees that Lessee shall perform its
obligations under this Agreement in favor of such assignee.
Section 8.3 Encumbrances. Lessee shall not encumber or permit the encumbrance of
any real property at the Airport. Except for a Leasehold Mortgage as defined in Section 8.5, Lessee
shall not encumber or permit the encumbrance of any of Lessee’s rights under this Agreement
without City’s prior written consent, in City’s sole discretion. Lessee shall not record this
Agreement or any document or interest relating thereto. Any purported encumbrance of rights in
violation of this Section 8.3 is void.
Section 8.4 Leasehold Mortgage. Absent the prior written consent of City, Lessee shall
not have the right to mortgage or collaterally assign its interest in this Agreement, the Leased
Premises or the Improvements to a bank or other similar institutional lender.
Section 8.5 Leasehold Mortgage - Non-exhaustive List of Preconditions.
Notwithstanding the above Section 8.4, Lessee may mortgage or collaterally assign its interest in
this Agreement to a commercial bank (a “Lender”) solely in order to secure financing for the
construction of the Improvements, provided that any such leasehold mortgage or collateral
assignment shall be subject, subordinate, and inferior at all times to the rights of City hereunder
and subject to the prior written consent of the City (a “Leasehold N4ortgage”). In connection with
a Leasehold Mortgage or City’s written consent to any other encumbrance, at a minimum, City
shall require the following:
1.Lender shall certify in writing to City that it has reviewed this Agreement and accepts
the provisions of this Agreement, including but not limited to the provisions of this
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Section 8.5, and that no loan requirements conflict with or materially erode any
provisions of this Agreement.
11.Lender agrees that City must approve any encumbrance proposed to be placed upon the
Improvements or this Agreement and that in no event shall any encumbrance be placed
upon the Leased Premises.
111 .Lender agrees that City may, in its sole discretion, require the inclusion of certain
provisions in lending documents that are defined to protect City and/or comply with
federal law, rules, or regulations.
IV .Lender agrees that its security interest in the Improvements, the Leasehold Mortgage,
the related loan agreement, and this Agreement is subordinate to the provisions of any
existing or future agreements between City and the United States of America, relative
to the operation and maintenance of the Airport, the terms and execution of which have
been or may be required as a condition precedent to the expenditure or reimbursement
to City of federal funds for the development of the Airport (“Grant Assurances”) and
that Lender further agrees that in the event that the Leasehold Mortgage, the related
loan agreement, or anything in this Agreement, either on its own terms or by any other
reason, conflicts with or violates any such Grant Assurances, City has the right to
amend, alter, or otherwise modify the terms of this Agreement in order to resolve such
conflict or violation.
V.Lender agrees to maintain current contact information with City and provide City with
concurrent copies of any notices or communications regarding a default under the loan
agreement or Leasehold Mortgage.
Vl.
Vll.
Vlll.
Lender agrees that in the event of a default under the loan agreement or Leasehold
Mortgage, Lender shall promptly inform the City of such default.
Lender and Lessee agree that any event of a default under the loan agreement or
Leasehold Mortgage shall be a default of this Agreement.
Lender agrees that upon any default under the loan agreement or Leasehold Mortgage,
City shall have a lien with first priority on all Lessee-owned property at the Leased
Premises.
IX.Lender agrees that, in the event that Lender takes actual or de facto control of the
Improvements and/or Lessee’s interests in this Agreement, it shall immediately notify
the City of that event (“Lender Control”), Lender will have no more than 180 days to
obtain a replacement tenant that is acceptable to the City, in City’s sole discretion. In
the event that more than 180 days elapses after the beginning of Lender Control, the
Lender’s security, mortgage, and all other interests in the Improvements, this
Agreement or anything else related to the Leased Premises terminates.
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X.Lender agrees that any use by Lender, assignee, or any other party, will be limited to
those uses that have been authorized by City (namely, the hangaring of aircraft) and
that in no event shall the Improvements be used for a non-aeronautical purpose.
XI .The Leasehold Mortgage and any other encumbrances shall terminate prior to the
expiration or termination of this Agreement and Lender agrees to promptly remove
such encumbrance upon the earlier of (1) such termination of the Leasehold Mortgage
or other encumbrance, or (2) the date when the obligation that the Leasehold Mortgage
or other encumbrance secures has been satisfied.
xii.Lender agrees to hold City, its officers, elected and appointed officials, employees,
and agents harmless for all claims arising after the date that Lessee was in default
under its loan agreement(s) with the Lender.
xiii. Lessee agrees to release and hold City, its officers, elected and appointed officials,
employees, and agents harmless for all claims related to City’s consent, non-
consent, or any other act or omission related to encumbering the Improvements
and/or this Agreement.
xiv. City shall have no obligation to provide any notices to Lender and City shall have no
liability of any kind to Lender or other lienholder.
Section 8.6 Subleasing. Any sublease of Improvements shall be for aviation-related
purposes only. Any sublease agreement for the purposes of conducting commercial aeronautical
activities as identified in the Airport Minimum Operating Standards will require an approved
Airport Business Permit prior to commencing operation. All sublease agreements shall be
provided to the Lessor at the time of execution.
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.1 Waiver of Exemption. Any constitutional or statutory exemption of Lessee
of any property usually kept on the Leased Premises, from distress or forced sale, is waived.
Section 9.2 Addresses. All notices given under this Agreement to City shall be sent to
the Airport Manager at 5000 Airport Road, Denton, Texas 76207, with a copy to the City Attorney
at 215 E. McKinney, Denton, Texas 76201, or such other place as City shall specify in writing.
All notices given under this Agreement to Lessee shall be sent to:
US Trinity Aviation, LLC
200 Highland Circle
Argyle, Texas 76226
Jim@ustrinity .com
All notices given under this Agreement to the Mortgagee shall be sent to the address provided by
Mortgagee to City. Any notice properly mailed by registered mail, postage and fee prepaid, shall
be deemed delivered when mailed, whether received or not.
@ CITY
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Section 9.3 No Waiver. The waiver by City of any breach of any term, covenant, or
condition herein contained shall not be deemed to be a waiver of such term, covenant, or condition
or any subsequent breach of the same or any other term, covenant, or condition herein contained.
The subsequent acceptance of rent hereunder by City shall not be deemed to be a waiver of any
preceding breach by Lessee of any term, covenant, or condition of this Agreement, other than the
failure of Lessee to pay the particular rental so accepted, regardless of City’s knowledge of such
preceding breach at the time of acceptance of such rent.
Section 9.4 Lessee’s Subordination. Lessee hereby subordinates and makes this
Agreement inferior to all existing and future mortgages, trust indentures or other security interest
of City or City’s successor in interest. Lessee shall execute and deliver any documents required
to evidence and perfect such subordination.
Section 9.5 Additional Charges as Rent. Any charges against Lessee by City for
services or for work done on the Leased Premises or the Improvements by order of Lessee or
otherwise accruing under this Agreement shall be considered as Rent due.
Section 9.6 Subordination to Grant Assurances. This Agreement shall be subordinate
to the Grant Assurances. In the event that this Agreement, either on its own terms or by any other
reason, conflicts with or violates any such Grant Assurances, City has the right to amend, alter or
otherwise modify the terms of this Agreement in order to resolve such conflict or violation
Section 9.7 Non-Interference With Operation of the Airport. Lessee expressly agrees
for itself, its successors, and assigns that Lessee will not conduct operations in or on the Leased
Premises or the Improvements in a manner that in the reasonable judgment of City, (i) interferes
or might interfere with the reasonable use by others of common facilities at the Airport, (ii) hinders
or might hinder police, fire fighting, or other emergency personnel in the discharge of their duties,
(iii) would or would be likely to constitute a hazardous condition at the Airport, (iv) would or
would be likely to increase the premiums for insurance policies maintained by City unless such
operations are not otherwise prohibited hereunder and Lessee pays the increase in insurance
premiums occasioned by such operations, (v) is contrary to any applicable Grant Assurance; (vi)
is in contradiction to any rule, regulation, directive, or similar restriction issued by agencies having
jurisdiction over the Airport including FAA, Homeland Security, Transportation Security
Administration and Customs and Border Patrol, or (vii) would involve any illegal purposes. In the
event this covenant is breached, City reserves the right, after prior written notice to Lessee, to enter
upon the Leased Premises and the Improvements and cause the abatement of such interference at
the expense of Lessee. In the event of a breach in Airport security caused by Lessee, resulting in
fine or penalty to City of which Lessee has received prior written notice, such fine or penalty will
be charged to Lessee.
Section 9.8 Emergency Closures. During time of war or national emergency, City shall
have the right to enter into an agreement with the United States Government for military or naval
use of part or all of the landing area, the publicly owned air navigation facilities and/or other areas
or facilities of the Airport. If any such agreement is executed, the provisions of this Agreement,
insofar as they are inconsistent with provisions of the agreement with the Government, will be
suspended.
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Section 9.9 Interpretation.
A. References in the text of this Agreement to articles, sections, or exhibits pertain to
articles, sections, or exhibits of this Agreement, unless otherwise specified.
B. The terms “hereby,” “herein,” “hereof,” “hereto,” “hereunder,” and any similar
terms used in this Agreement refer to this Agreement. The term “including” shall not be construed
in a limiting nature, but shall be construed to mean “including, without limitation.”
C. Words importing persons shall include firms, associations, partnerships, trusts,
corporations, and other legal entities, including public bodies, as well as natural persons.
D. Any headings preceding the text of the articles and sections of this Agreement, and
any table of contents or marginal notes appended to copies hereof, shall be solely for convenience
of reference and shall not constitute a part of this Agreement, nor shall they affect the meaning,
construction or effect of this Agreement.
E. Words importing the singular shall include the plural and vice versa. Words of the
masculine gender shall be deemed to include correlative words of the feminine and neuter genders.
Section 9.10 Force Majeure. No act or event, whether foreseen or unforeseen, shall
operate to excuse Lessee from the prompt payment of rent or any other amounts required to be
paid under this Agreement. If City (or Lessee in connection with obligations other than payment
obligations) is delayed or hindered in any performance under this Agreement by a force majeure
event, such performance shall be excused to the extent so delayed or hindered during the time
when such force majeure event is in effect, and such performance shall promptly occur or resume
thereafter at the expense of the Party so delayed or hindered. A “force majeure event” is an act or
event, whether foreseen or unforeseen, that prevents a Party in whole or in part from performing
as provided in this Agreement, that is beyond the reasonable control of and not the fault of such
Party, and that such Party has been unable to avoid or overcome by exercising due diligence, and
may include, but is not limited to, acts of nature, war, riots, strikes, accidents, fire, and changes in
law. Lessee hereby releases City and City’s officers, elected and appointed officials, employees,
and agents from any and all liability, whether in contract or tort (including strict liability and
negligence) for any loss, damage, or injury of any nature whatsoever sustained by Lessee, its
employees, agents, or invitees during the Lease Term, including, but not limited to, loss, damage,
or injury to the aircraft or other personal property of Lessee that may be located or stored in, on or
under the Leased Premises or the Improvements due to a force majeure event.
Section 9.11 Governing Law and Venue. This Agreement has been made in and will be
construed in accordance with the laws of the State of Texas. In any action initiated by one Party
against the other, exclusive venue and jurisdiction will be in the appropriate state courts in and for
Denton County, Texas.
Section 9.12 Amendments and Waivers. No amendment to this Agreement shall be
binding on City or Lessee unless reduced to writing and signed by both Parties. No provision of
this Agreement may be waived, except pursuant to a writing executed by the Party against whom
the waiver is sought to be enforced.
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Section 9.13 Severability. If any provision of this Agreement is determined to be invalid,
illegal, or unenforceable, the remaining provisions of this Agreement shall remain in full force and
effect if both the economic and legal substance of the transactions that this Agreement
contemplates are not affected in any manner materially adverse to any Party. If any provision of
this Agreement is held invalid, illegal, or unenforceable, the Parties shall negotiate in good faith
to modify this Agreement to fulfill as closely as possible the original intents and purposes of this
Agreement.
Section 9.14 Merger. This Agreement constitutes the final, complete, and exclusive
agreement between the Parties on the matters contained in this Agreement. All prior and
contemporaneous negotiations and agreements between the Parties on the matters contained in this
Agreement are expressly merged into and superseded by this Agreement. In entering into this
Agreement, neither Party has relied on any statement, representation, warranty, nor agreement of
the other Party except for those expressly contained in this Agreement.
Section 9.15 Relationship of Parties. This Agreement does not create any partnership,
joint venture, employment, or agency relationship between the Parties. Nothing in this Agreement
shall confer upon any other person or entity any right, benefit, or remedy of any nature.
Section 9.16 Further Assurances. Each Party shall execute any document or take any
action that may be necessary or desirable to consummate and make effective a performance that is
required under this Agreement.
Section 9.17 Required Federal Clauses. Lessee and Lessee’s Associates shall comply
with all Laws and Regulations, including all of the required federal clauses in this Section 9.17.
A. During the performance of this contract, Lessee, for itself, its assignees, and
successors in interest (hereinafter collectively referred to as the “Lessee”) agrees as follows:
1. Compliance with Regulations: Lessee will comply with the Title VI List of
Pertinent Nondiscrimination Acts And Authorities, as they may be amended from
time to time, which are herein incorporated by reference and made a part of this
Agreement.
2.Non-discrimination: Lessee, with regard to the work performed by it during the
term of this Agreement, will not discriminate on the grounds of race, color, or
national origin in the selection and retention of contractors, including
procurements of materials and leases of equipment. Lessee will not participate
directly or indirectly in the discrimination prohibited by the Nondiscrimination
Acts and Authorities, including employment practices when the contract covers
any activity, project, or program set forth in Appendix B of 49 CFR Part 2 1.
'1J.Solicitations for Agreements, Including Procurements of Materials and
Equipment: in all solicitations, either by competitive bidding, or negotiation
made by Lessee for work to be performed under a subcontract, including
procurements of materials, or leases of equipment, each potential contractor or
supplier will be notified by Lessee of Lessee’s obligations under this Agreement
CITYa 20
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and the Nondiscrimination Acts And Authorities on the grounds of race, color, or
national origin.
4.Information and Reports: Lessee will provide all information and reports
required by the Acts, the Regulations, and directives issued pursuant thereto and
will permit access to its books, records, accounts, other sources of information,
and its facilities as may be determined by the sponsor or the Federal Aviation
Administration to be pertinent to ascertain compliance with such
Nondiscrimination Acts And Authorities and instructions. Where any information
required of Lessee is in the exclusive possession of another who fails or refuses to
furnish the information, Lessee will so certify to LESSOR or the Federal Aviation
Administration, as appropriate, and will set forth what efforts it has made to obtain
the information.
5.Sanctions for Noncompliance: in the event of Lessee’s noncompliance with the
Non-discrimination provisions of this contract, LESSOR will impose such
sanctions as it or the Federal Aviation Administration may determine to be
appropriate, including, but not limited to cancelling, terminating, or suspending
the Agreement, in whole or in part.
6.Incorporation of Provisions: Lessee will include the provisions of paragraphs
one through six of this Section 9.17(A) in every contract, including procurements
of materials and leases of equipment, unless exempt by the Acts, the Regulations
and directives issued pursuant thereto. Lessee will take action with respect to any
contract or procurement as LESSOR or the Federal Aviation Administration may
direct as a means of enforcing such provisions including sanctions for
noncompliance. Provided, that if Lessee becomes involved in, or is threatened
with litigation by a contractor, or supplier because of such direction, Lessee may
request LESSOR to enter into any litigation to protect the interests of LESSOR.
In addition, Lessee may request the United States to enter into the litigation to
protect the interests of the United States.
B. Real Property Acquired or Improved Under the Airport Improvement Program.
Lessee for itself, its heirs, personal representatives, successors in interest, and assigns, as a part of
the consideration hereof, does hereby covenant and agree as a covenant running with the land that
in the event facilities are constructed, maintained, or otherwise operated on the property described
in this Agreement for a purpose for which a Federal Aviation Administration activity, facility, or
program is extended or for another purpose involving the provision of similar services or benefits,
Lessee will maintain and operate such facilities and services in compliance with all requirements
imposed by the Nondiscrimination Acts and Regulations listed in the Pertinent List of
Nondiscrimination Authorities (as may be amended) such that no person on the grounds of race,
color, or national origin, will be excluded from participation in, denied the benefits of, or be
otherwise subjected to discrimination in the use of said facilities.
C. Construction/Use/Access to Real Property Acquired Under the Activity. Facility or
Program. Lessee for itself, its heirs, personal representatives, successors in interest, and assigns,
as a part of the consideration hereof, does hereby covenant and agree as a covenant running with
the land that (1) no person on the ground of race, color, or national origin, will be excluded from
B CIT
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participation in, denied the benefits of, or be otherwise subjected to discrimination in the use of
said facilities, (2) that in the construction of any improvements on, over, or under such land, and
the furnishing of services thereon, no person on the ground of race, color, or national origin, will
be excluded from participation in, denied the benefits of, or otherwise be subjected to
discrimination, and (3) that Lessee will furnish its services in compliance with all other
requirements imposed by or pursuant to the List of Nondiscrimination Acts And Authorities.
D. Title VI List of Pertinent Nondiscrimination Acts and Authorities. During the
performance of this Agreement, Lessee, for itself, its assignees, and successors in interest
(hereinafter referred to as the “contractor”) agrees to comply with the following non-
discrimination statutes and authorities; including but not limited to:
1.
li.
111.
Title VI of the Civil Rights Act of 1964 (42 U.S.C. § 2000d er seq ., 78 stat.
252), (prohibits discrimination on the basis of race, color, national origin);
49 CFR Part 21 (Non-discrimination in Federally-Assisted Programs of The
Department of Transportation–Effectuation of Title VI of The Civil Rights Act
of 1964);
The Uniform Relocation Assistance and Real Property Acquisition Policies Act
of 1970, (42 U.S.C. § 4601), (prohibits unfair treatment of persons displaced or
whose property has been acquired because of Federal or Federal-aid programs
and projects);
Section 504 of the Rehabilitation Act of 1973, (29 U.S.C. § 794 er seq.), as
amended, (prohibits discrimination on the basis of disability); and 49 CFR Part
27
The Age Discrimination Act of 1975, as amended, (42 U.S.C. § 6101 et seq.),
(prohibits discrimination on the basis of age);
Airport and Airway Improvement Act of 1 982, (49 USC § 47 1, Section 47123),
as amended, (prohibits discrimination based on race, creed, color, national
orlgln, or sex);
The Civil Rights Restoration Act of 1987, (PL 100-209), (Broadened the scope,
coverage and applicability of Title VI of the Civil Rights Act of 1964, The Age
Discrimination Act of 1975 and Section 504 of the Rehabilitation Act of 1 973,
by expanding the definition of the terms “programs or activities” to include all
of the programs or activities of the Federal-aid recipients, sub-recipients and
contractors, whether such programs or activities are Federally funded or not);
Titles II and III of the Americans with Disabilities Act of 1990, which prohibit
discrimination on the basis of disability in the operation of public entities,
public and private transportation systems, places of public accommodation, and
certain testing entities (42 U.S.C. §§ 12131 – 12189) as implemented by
Department of Transportation regulations at 49 CFR Parts 37 and 38;
IV .
V.
VI.
Vll
Vlll.
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IX.The Federal Aviation Administration’s Non-discrimination statute (49 U.S.C.
§ 47123) (prohibits discrimination on the basis of race, color, national origin,
and sex);
Executive Order 12898, Federal Actions to Address Environmental Justice in
Minority Populations and Low-Income Populations, which ensures non-
discrimination against minority populations by discouraging programs,
policies, and activities with disproportionately high and adverse human health
or environmental effects on minority and low-income populations;
Executive Order 13166, Improving Access to Services for Persons with Limited
English Proficiency, and resulting agency guidance, national origin
discrimination includes discrimination because of limited English proficiency
(LEP). To ensure compliance with Title VI, you must take reasonable steps to
ensure that LEP persons have meaningful access to your programs (70 Fed.
Reg. at 74087 to 74100); and
Title IX of the Education Amendments of 1972, as amended, which prohibits
you from discriminating because of sex in education programs or activities (20
U.S.C. 1681 et seq).
X.
XI.
Xll.
E. General Civil Rights Provision. Lessee agrees to comply with pertinent statutes,
Executive Orders and such rules as are promulgated to ensure that no person shall, on the grounds
of race, creed, color, national origin, sex (including gender identity), age, or disability be excluded
from participating in any activity conducted with or benefiting from Federal assistance. If Lessee
transfers its obligation to another, the transferee is obligated in the same manner as Lessee. This
provision obligates Lessee for the period during which the property is owned, used or possessed
by Lessee and the airport remains obligated to the Federal Aviation Administration. This provision
is in addition to that required by Title VI of the Civil Rights Act of 1964.
F. Right of Re-entry. In the event of breach of any of the above Nondiscrimination
covenants, LESSOR will have the right to terminate the Agreement and to enter, re-enter, and
repossess said lands and facilities thereon, and hold the same as if the Agreement had never been
made or issued.
G. Subcontracts. Lessee agrees that it shall insert the above six provisions (Section
a) through Section (F)) in any agreement by which Lessee grants a right or privilege to any
person, firm, or corporation to render accommodations and/or services to the public under this
Agreement.
H. Lessee agrees to furnish service on a fair, equal, and not unjustly discriminatory
basis to all users thereof, and to charge fair, reasonable, and not unjustly discriminatory prices for
each unit or service; provided that Lessee may be allowed to make reasonable and
nondiscriminatory discounts, rebates, or other similar types of price reductions to volume
purchasers. (Grant Assurance 22)
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I. It is hereby specifically understood and agreed that nothing herein contained shall
be construed to grant or authorize the granting of an exclusive right to provide aeronautical services
to the public as prohibited by the Grant Assurances, and City reserves the right to grant to others
the privilege and right of conducting any one or all activities of an aeronautical nature. (Grant
Assurance 23)
J. City reserves the right to further develop or improve the landing area of the Airport
as it sees fit, regardless of the desires or view of Lessee, and without interference or hindrance.
(FAA Order 5 190.6B)
K. City reserves the right, but shall not be obligated to Lessee, to maintain and keep in
repair the landing area of the Airport and all publicly-owned facilities of the Airport, together with
the right to direct and control all activities of Lessee in this regard. (FAA Order 5 190.6B)
L. This Agreement shall be subordinate to the provisions of and requirements of any
existing or future agreement between City and the United States, relative to the development,
operation, or maintenance of the Airport. (FAA Order 5 190.6B)
M. Lessee agrees to comply with the notification and review requirements covered in
Part 77 of the Federal Aviation Regulations in the event any future structure or building is planned
for the Leased Premises, or in the event of any planned modification or alteration of any present
or future building or structure situated on the Leased Premises. (FAA Order 5 190.6B)
N. It is clearly understood by Lessee that no right or privilege has been granted which
would operate to prevent any person, firm, or corporation operating aircraft on the Airport from
performing any services on its own aircraft with its own regular employees (including but not
limited to, maintenance and repair) that it may choose to perform. (Grant Assurance 22(f))
[SIGNATURE PAGES FOLLOW I
CITYB LESSEE[#24
Docusign Envelope ID: IDB6B843-31B7-45Dl-B8FC-10F9E8BI 191 A
IN WITNESS WHEREOF, the Parties have set their hands and seals this 15th day of
October 9 20 24.
CITY OF DENTON, TEXAS, LESSOR
HTm City Manager
ATTEST:
Lauren Thoden. City SecretaryDmuStgned by:
APPROVED AS TO LEGAL FORM:
Mack Reinwand, City Attorney
US Trinity Aviation, LLC, Lessee
@By
tdm President
Signature Page to Airport Lease Agreement between
City of Denton and US Trinity Aviation, LLC