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1998-133 %(+$1$%$1$-"$%.1, 98133 AdditionalFileExists AdditionalFileContainsRecordsNotPublic,AccordingtothePublicRecords Act Other %(+$2#§º«(´¯º¯§²¹ AmendedbyletterdatedJune8,199806/08/98JR ThirdAmendmenttoLeaseAgreementKOrdinanceNo.201325809/17/13JR Amended by letter dated June 8, 1998 O INANCE NO AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE AN AIRPORT LEASE AGREEMENT BETWEEN THE CITY OF DENTON AND ALAN RITCHEY, INC TO LEASE CERTAIN PREMISES OF THE MUNICIPAL AIRPORT FOR THE PURPOSE OF CONSTRUCTING AND MAINTAINING OFFICE AND HANGAR FACILITIES THEREON, AND PROVIDING AN EFFECTIVE DATE THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS SECTION I That the City Manager is authorized to execute an airport lease agreement between the City of Denton, Texas and Alan Rltchey, Inc, to lease certmn premises of the Municipal Parport for the purposes of and constn~ctmg and maintaining a office and hangar facilities thereon, under the terms and conditions contained within this Agreement, which is attached hereto and made a part hereof SECTION II That this ordinance shall become effective immediately upon its passage and approval //A PASSED AND APPROVED thlsthe/,~d_ day of //r/~/.4/ ,1998 JAC~LLER, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY HERBERT L PROUTY, CITY ATTORNEY AIRPORT LEASE AGREEMENT COMMERCIAL OPERATOR THE STATE OF TEXAS § § KNOW ALL MEN BY THESE PRESENTS COUNTY OF DENTON § Tbas lease is made and executed tbas 15th day of May , 1998, at Denton, Texas, by and between the City of Denton, Texas, a mumelpal corporation, herelnat~er referred to as "Lessor", and Alan Pdtchey, linc, having bas pnnclpal offices at P O Box 249 Valley View, Texas, 76272 heremat~er referred to as "Lessee" WITNESSETH. WHEREAS, Lessor now owns, controls and operates the Mumclpal Airport (Atrport) m the City of D~nton, County of Denton, State of Texas, and WHEREAS, Lessee desires to lease certain premises on said mrport and construct and maintain an tureraR hangar and related awatlon facthtles thereon, and NOW, THEREFORE, for and m consideration of the prormses and the mutual covenants contained m tbas Agreement, the part, es agree as follows I. CONDITIONS OF AGREEMENT NOTWITHSTANDING ANY LANGUAGE TO THE CONTRARY HEREINAFTER CONTAINED, THE LANGUAGE IN PARAGRAPHS A THROUGH D OF THIS SECTION SHALL BE BINDING A PRINCIPLES OF OPERATIONS The right to conduct aeronautical activities for funusbang serrates to the pubhc is grimed to Lessee subject to Lessee agreeing 1 To furmsh smd services on a fair, equal and not unjustly discriminatory basis to all users thereof, and 2 To charge fair, reasonable and not unjustly discriminatory prices for each umt or service, provided, that Lessee may be allowed to make reasonable and nondlscrnulnatory chseounts, rebates, or other similar types of price reductions to volume purchasers B NON-DISCRIMINATION Lessee, for himself, has personal representatives, successors and interests, and assigns, as a part of the consideration hereof, does hereby covenant and agree as a covenant running w~th the land that 1 No person on the grounds of race, rehg~on, color, sex, or national ongm shall be excluded from pamcipaUon m, demed the benefits of, or be otherwise subjected to dascnmmatlon m the use of smd faeflmes, 2 In the construction of any improvements on, over, or under such land and the fumlslungs of services thereon, no person on the grounds of race, rehguon, color, sex, or national origin shall be excluded from pamclpatuon in, demed the benefits of, or otherwise be sub3ected to d~scnnunatlon, 3 Lessee shall use the premises m comphance with all other reqmrements imposed by or pursuant to Title 49, Code of Federal Regulations, Department of Transportation, Subtitle A, Office of the Secretary, Part 21, Nondlscnmmatmn m Federally assisted programs of the Department of Transportation - Effectual of Title VI of the Civil Paghts Act of 1964, as smd Regulations may be amended C RIGHT OF INDIVIDUALS TO MAINTAIN AIRCRAFT It is clearly understood by Lessee that no right or pnwle§e has been granted wlueh would operate to prevent any person, firm or corporauon operating ~ureratt on the mrport from performing any services on its own aircraft wath its own regular employees (mcluchng, but not lnmted to, mamtenance and repmr) that it may choose to perform D NON-EXCLUSWE RIGHT It is understood and agreed that nothing hereto contained shall be construed to grant or authorize the granting of an exclusave nght within the meaning of Title 49 U S C Appen&x §1349 E PUBLIC AREAS 1 Lessor reserves the right to further develop or improve the landing area of the airport as it sees fit, regardless of the desires or views of Lessee, and w~thout interference or lundrance 2 Lessor reserves unto itself, its successors and assigns, for the use and benefit of the flying public, a right of flight for the passage of mreraft above the surface of the premises described hereto, together with the nght to cause in smd airspace such noise as may be inherent m the operatmn of mreraf~ now known or hereatter used, for nawgat~on of or flight in the smd mrspace, and for use of smd an'space for landang on, tal~ng off from, or operating on the Parport 3 Lessor shall be obligated to mmntsm and keep m repair the landing area of the mrport and all publicly owned fecllmes of the aurport, together w~th the right to (hrect and control all actlwtles of Lessee m fins regard 4 During time of war or naUonal emergency, Lessor shall have the right to lease the landing area or any part thereof to the United States Government for malltury or naval use, and, if such lease ~s executed, the provmaons of fins instrument insofar as they are inconsistent w~th the proxqslons of the lease to the Government, shall be suspended 5 Lessor reserves the right to take any action it considers necessary to protect the aerial approaches of the anport agmnst obstruction, together with the right to prevent Lessee from erecting, or penmttmg to be erected, any braiding or other structure on or adjacent to the airport which, m the opimon of Lessor, would hrmt the usefulness or safety of the mrport or constitute a hazard to mmraff or to aircraft namgutlon 6 Tins Lease shall be subordinate to the provisions of any existing or future agreement between Lessor and the Umted States or agency thereof, relative to the operation or maintenance of the mrport II. LEASED PREMISES Lessor, for and m considerat~on of the covenants and agreements herein contained, to be kept by Lessee, does hereby demise and lease unto Lessee, and Lessee does hereby hire and take from Lessor, the following descnbed land situated in Denton County, Texas A LAND 1 A tract of land, being approximately 32,400 square feet, or 0 745 acres, drawn and outlined on Attachment "A" as Exlublt 1, and legally described in Attachment "B", such attachments being incorporated herein by reference Together w~th the nght of ingress and egress to smd property, and the right in common with others so anthonzed of passage upon the Airport property generally, subject to reasonable regulations by the City of Denton and such rights shall extend to Lessee's employees, passengers, patrons and mvltees For purposes of this agreement, the term "Premises" shall mean all property located wltlun the metes and bounds described above, including leasehold improvements constructed by the Lessee, but not lnclu&ng certain easements or property owned and/or controlled by the Lessor 2 A tract of land, bemg approximately 16,200 square feet, or 0 272 acres, drawn and outlined on Attachment "A" as Exlnblt 2, and legally deacnbed in Attachment "B", such attachments being incorporated herein by reference Together with the right of ingress and egress to smd property, and the right m common with others so authorized of passage upon the Airport property generally, subject to reasonable regulations by the City of Denton and such rights shall extend to Lessee's employees, passengers, patrons and mxatees For purposes of tlus agreement, the term "Premises" shall mean all property located w~ttnn the metes and bounds described above, including leasehold unpmvements constructed by the Lessee, but not including certmn easements or property owned and/or controlled by the Lessor B DEVELOPMENT OF EXHIBITS 3 and 4 1 A tract of land being approxtmately 0 272 acres of land or 16,200 square feet, drawn and outlmed on Attachment "A" as Exhibit 3 and legally described m Attachment "C" ~s leased to Lessee for the purpose of future development by Lessee Upon commencement of development of any property w~tlun Exbab~t 3, the property shall on that date be considered to be an adchtion to Exlmb~t 1 and be subject to the same terms and conditions as Exhibit 1, including but not hunted to the same rental rate and adjustments, ~f any, as if the added property had been w~ttun Extubxt 1 fi.om the original date of execution of this Lease The date of ~ssuance of a bmldmg penmt by Lessor for the ~mprovements shall be considered the "commencement of development" 2 If Lessee fails to commence development of Exhibit 3 by May 15, 2000, that amount of property shall automatically be considered as an addmon to Extub~t 1 and subject to those terms as ~f development had begun on that property 3 Lessee shall have the option of extending the terms of th~s lease to a tract of land being approximately 0 745 acres of land or 32,400 square feet, drawn and outlined on Attachment "A" as Extub~t 4, and legally described m Attachment "C" Upon commencement of development of any property w~thm Exlub~t 4, the property shall on that date be eonsadered to be an addition to Exlub~t 1 and be subject to the same terms and conchtiuns as Extablt 1, ~ncludmg but not hm~ted to the same rental rate and adjustments, xf any, as ff the added property had been w~thm Extublt 1 fi'om the original date of execution of th~s Lease The date of ~ssuanee of a bmldmg permit by Lessor for the unprovements shall be considered the "commencement of development 4 The option above relating to Extub~t 4 shall be exercised no later than four (4) years fi.om the execution of flus lease If the option relating to Exhibit 4 is not treacly exercised w~ttun four (4) years of the execution of flus lease by the pames then Lessor shall have the nght to market Extub~t 4 to another possible tenant C LMPROVEMENTS PROVIDED BY LESSOR NONE There will be no improvements prowded by Lessor, except as set forth m Article II F "Access to Utihtaes" below For the purpose of this Agreement, the term "Lessor improvements" shall mean those ttungs on the leased prenuses belonging to, constructed by, or to be constructed by Lessor, which enhances or increases, or will enhance or increase, the value or quality of the leased land or property Unless othenwse noted herein, all Lessor improvements are and will remain the property of Lessor All Lessor improvements must be described m detml above, or above referenced and attached to tins Agreement m an exhibit approved by Lessor D IMPROVEMENTS PROVIDED BY LESSEE On Extnblt 1, Lessee shall construct a hangar and office fa~lhty not less than 10,000 square feet with taxlway access and appropriate culverts as reqmred by City ordinances m the drainage channel south of the proposed hangar and north of the taxlway, as well as other nnprovements as shown on the s~te plan attached hereto and made a part hereof for all purposes and identified as Extnb~t "D" Improvements to Exlublt 3 and 4 will be similar to those identified for Exhtbit 1 E EASEMENTS Lessor and Lessee by mutual agreement may establish, on the lease premises, easements for pubhe access on roads and taxiways F ACCESS TO UTILITIES Lessor represents that water, wastewater, and 3-phase eleemclty hnes are currently, or will be made available, w~thm two hundred (200) feet of the leased premises available to "tap-m" by Lessee, and that the same are sufficient for usual and customary sermee on the leased premises III. TERM The term of tins Agreement shall be for a period of thtrty (30) years, commencing on the 15th day of May, 1998 , and continuing through the 14th day of May, 2028, unless earher terminated under the prov~smns of the Agreement Any attempt by Lessee to renegotmte this Lease shall be m writing addressed to the City Manager at least one hundred eighty (180) days before the expiration of the stated term ofthts lease, and at least 180 days before the expiration of any additional renegotiated period Lessee has the optmn to renew for two (2) additional ten (10) year terms The rental and terms to be negotiated shall be reasonable and consistent with the then value, rentals and terms of similar pwperty on the airport IV. PAYMI~NTS~ RI~NTALS AND FI~I~S Lessee covenants and agrees to pay Lessor, as consideration for flus lease, the follovong payments, rentals and fees A LAND RENTAL shall be due and payable in twelve (12) equal monthly mstallments m the sum in advance, on or before the first day of each and every month dimng the term of ttus agree- ment in the amount of one-twelfth (1/12) of an annual rental payment based on the following formulae, calculated on the basis of mlmmum yearly rentals adjusted for inflation as per paragraph IV C 1 05/15/98 $0 05 per square foot rmmmum yearly rental, adjusted annually per paragraph IV C 2 05/14/03 The current lease rate (prewous year's rental) will be ~ncreased by an additional $0 10 per square foot, and then adjusted annually per paragraph IV C 3 09/15/11 The current lease rate (previous year's rental) will be increased by an addmonal $0 03 per square foot, and then adjusted annually per paragraph IV C Notwithstanding the foregoing, the annual lease rental ~s to be reduced by the current lease rate per square foot, tmaes the number of square feet comprising all easements established m accordance with Article II(F) B LESSOR IMPROVEMENTS RENTALS NONE There are no Lessor improvements on the leased prermses C pAYMENT~ PENALTY~ ADJUSTMENTS All payments due Lessor from Lessee shall be made to Lessor at the offices of the Finance Department of the City of Denton, Accounts Receivable, 215 E MeKmney, Denton, Texas, unless othervose designated m writing by the Lessor If payments are not received before or on the 1st, a five (5) percent penalty will be due as of the 2nd If payments are not received by the 15th of the subsequent month, an adcht~onal penalty of one (1) percent of the unpmd rental/fee amount will be due A one (1) percent charge will be added on the 15* of each subsequent month until the unpaid rental/fee payment ~s made Failure to pay the rent or penalty amounts on delinquent rent shall constitute an event of default of this lease The yearly rental for land and unprovements hereto leased shall be readjusted at the end of each one (1) year period during the term of tins lease on the basis of the pmpomon that the then current Umted States Consumer Price Index for all urban consumers (CPI-U) for the Dallas-Fort Worth geogreplueal region, as complied by the U S Department of Labor, Bureau of Labor Statistics bears to the applicable index at the execution of flus lease The original land rental amount ~s based upon the formulae set forth m Section IV A for the land hereto leased Each rental adjustment, if any, shall,occur on the 15th day of May, begmmng 1999, and every year thereafter on such date The adjustments in the yearly rent shall be determined by multiplying the mlmmum yearly rent as set forth in Section IV A by a fraction, the numerator of wtueh is the index number for the last month prior to the adjustment, and the denominator of wlueh ~s the index number appheable at the exeeutlun of flus lease If the product of flus multiplication IS greater than the mimmum yearly rent as set forth m Section IV A, Lessee shall pay flus greater amount as the yearly rent until the time of the next rental adJUStment as called for m flus section If the product of flus mulUphcation is less than the m~mmum yearly rent of as set forth m Section IV A, there shall be no adjustment in the annual rent at that time, and Lessee shall pay the previous year's annual rent until the time of the next rental adjustment as called for m flus section In no event shall any rental adJUStment called for m flus section result in an annual rent less than the prewous year's annual rent The adjustment shall be hmlted so that the annual rental payment determined for any given year shall not exceed the annual rental payment calculated for the previous year by more than ten (10) percent, except for the adjustments under the lease effective 05/15/03 and 09/15/11 If the consumer price index for all urban consumers (CPI-U) for the Dallas-Fort Worth geograpbaeal regmn, as compiled by the U S Department of Labor, Bureau of Labor Stat~staes, ~s d~seontmued during the term of tbas lease, the remaining rental adjustments called for an flus section shall be made using the fomaula set forth m Subsection (a) above, but substituting the index numbers for the Consumer Pnee Index-Seasonally Adjusted U S C~ty Average For All Items For All Urban Consumers (CPI-U) for the index numbers for the CPI-U appheable to the Dallas-Fort Worth geograptucal regmn If both the CPI-U for the Dallas-Fort Worth geograptueal regaon and the U S C~ty Average are chseontmued dunng the term of flus lease, the remmmng rental adJUStments called for an flus section shall be made using the statistics of the Bureau of Labor Statastms of the Umted States Department of Labor that are most nearly comparable to the CPI-U apphcable to the Dallas- Fort Worth geograplucal mg~on If the Bureau of Labor Statlstms of the Umted States Department of Labor ceases to exast or ceases to pubhah statistics concermng the purchasing power of the consumer dollar during the term oftlus lease, the remamang rental adjustments called for ~n fins section shall be made using the most nearly comparable stamtms pubhshed by a recogmzed financial anthonty selected by Lessor V. RIGHTS AND OBLIGATIONS OF LESSEE A USE OF LEASED PREMISES Lessee ~s granted the non-exclusive privilege to engage m or promde the following 1 Hangar Leases and Rental The rental or lease of hangars and hangar space and related famht~es upon the leased premises 2 Office Space Lease or Rental The rental or lease of office space m or adjmmng Lessee's hangars 3 Atrera~t Storage and T~e Down To prowde parking, storage and tie down service, for both Lessee's and ~tmerant mrerai~ upon or w~thm the leased premases 4 A~r Transport The abthty to prowde common services related to the mr transport/cargo ~ndust~y Lessee, bas tenants and sublessees shall not be authorized to conduct any serwees not specifically hated m th~s agreement The use of the lease premises of Lessee, h~s tenants or sublesseas shall be hm~ted to only those private, commercial, re~l or industrial aetlwt~es hawng to do wath or related to awports and awat~on No person, business or eorporaUon may operate a commercial, retml or mdusmal busmeas upon the prenuses of Lessee or upon the A~rport w~thout a lease or lieanse from Lessor authorizing such commercml, retail or industrial aeUv~y The Lessor shall not unreasonably w~thholfl authorization to conduct aeronautical or related services B STANDARDS Lessee shall meet or exceed the following standards I Address Lessee shall file w~th the A~rport Manager and keep current t~s marling Alan Ritchey Lease Agreement Page 7 addresses, telephone numbers and contacts where he can be reached m an emergency 2 List Lessee shall file w~th the garport Manager and keep current a hst of has tenants and sublessees 3 Conduct Lessee shall contractually reqmre hm employers and sublessees (and sublessee's ~nv~tees) to ahade by the terms of thas agreement Lessee shall promptly enforce has contractual rights m the event of a default of such covenants 4 Utfl~t~e% Taxes and Fees Lessee shall meet all expenses and payments m connection with the use of the Premises and the rights and pnwleges here~n granted, mcludmg the t~mely payment of utilities, taxes, permit fees, hcense fees and assessments lawfully lewed or assessed 5 Laws Lessee shall comply wtth all current and future federal, state and local laws, roles and regulations whach may apply to the conduct of business contemplated, mchadlng roles, regulations and ordinances promulgated by Lessor, and Lessee shall keep m effect and post m a prominent place all necessary and/or reqmred hconses or permits 6 Maintenance of Property Lessee shall be responmble for the mmntenance, reptur and upkeep of all property, bmldmgs, structures and ~mprovements, ~ncludmg the mowing or elmamat~on of grass and other vegetatton on the Premises, and shall keep smd Prenuses neat, clean and ~n respectable condmon, free from any object~onal matter or thang Lessee agrees not to utthze or permit others to utilize areas on the leased premises whach are located on the outside of any hangar or bmld~ng for the storage of wrecked or permanently dasabled mrcraf~, atrcraf~ parts, automobiles, vehtcles of any type, or any other eqmpment or items whach would dastmct from the appearance of the leased premises Lessee agrees that at no t~me shall the leased premases be used for a flea market type sales operation 7 Painting of Bmldtnl~s During the original term of thas Lease and dunng each extension, Lessor shall have the right to reqmre, not more than once every five years, that the metal exterior of hangar(s) or braiding(s) located on the premises be rewewed by the 3arport Adwsory Board for the purpose of determ~mng whether pmnt~ng of the exteriors of such bmldmgs or hangars ~s necessary If the Airport Advisory Board determines pmntmg is necessary, ~t shall furmsh a recommendataon to this effect to the City Council The Council, may, upon the Board's recommendation, reqmre Lessee to repmnt smd exteriors according to Lessors speefficat~ons (to specify color of pmnt, quahty of workmanshap and the year and month ~n whach the hangar(s) or braiding(s) are to be painted, ~f needed ) Lessee shall complete the pmntang m accordance w~th such specaficat~ons w~than one (1) year of receipt of not,co from lessor Lessee agrees to pay all costs and expense mvolved m the hangar or barld~ng painting process Fmlure of Lessee to complete the pamtmg reqmred by Lessor's C~ty Council w~th~n one (1) year period shall constitute Lessee's default under thas Lease Alan Ritchey Lease Agreement Page 8 8 Unanthonzed use ofpmnuses Lessee may not use any of the leased land or premises for the operation of a motel, hotel, restaurant, private club or bar, apartment house, or for industrial, commemlal or retml purposes, except as authorized herein 9 Dwellml~s It is expressly understood and agreed that no permanent dwelling or dormclle may be built, moved to or established on or wltban the leased prermses nor may lessee, bas tenants, lnmtees, or guests be permitted to reside or remain as a resident on or wltban the leased premises or other atrport premises 10 Qtut Possession Lessee shall quit possession of all pmmmes leased herein at the end of the primary term of tbas lease or any renewal or extension thereof, and deliver up the premmes to Lessor in as good condition as existed when possesmon was taken by Lessee, reasonable wear and tear excepted 11 Hold Harmless Lessee shall mdemmfy and hold harmless Lessor from and against all loss and damages, including death, personal injury, loss of property or other damages, arising or resulting fi.om the operation of Lessee's business m and upon the leased prcmlsas 12 Chemicals Lessee agr~s to properly store, collect and ~hspose of all chemicals and chermcal residues, to properly store, confine, collect and chspose of all paint, including paint spray m the atmosphere, and paint products, and to comply w~th all Local, State and Federal regulations govemmg the storage, handling or disposal of such chermcals and pamts 13 Hazardous Actlvmes Should Lessee violate any law, rule, resmct~on or regulation of the City of Denton or the Federal Aviation Admmmtrat~on, or should the Lessee engage in or p~mut other persons or agents to engage m act~wtles wbach could produce hazards or obstruction to mr navigation, obstructions to wslbahty or interference w~th any arreraft navigational md station or device, whether mrbome or on the ground, then Lessor shall state such wolatlon in writing and deliver written notme to Lessee or Lessee's agent on the leased premises, or to the person(s) on the leased premises who are cansmg smd violation(s), and upon dehvery of such written notice, Lessor shall have the right to demand that the person(s) responsible for the violation(s) cease and desist fi.om all such activity creating the violation(s) In such event, Lessor shall have the right to demand that corrective action, as reqmred, be commenced lmmedmtely to restore the leased premises into conformance w~th the particular law, rule or aeronautmal regulation being wolated Should Lessee, Lessee's agent, or the person(s) responsible for the wolat~on(s) fml to cease and desist ~om smd violation(s) and to immediately commence correcting thc violation(s), and to complete smd corrections witban twenty-four (24) hours following written notfficat~on, then Lessor shall have the right to enter onto the leased premmas and correct the violat~on(s), and Lessor shall not be responsible for any damages incurred to any improvements on the leased premises as a result of the Alan Ri~ch~y Lease Agreement Page 9 corrective action process D SIGNS Dunng the term oft/oas Agreement, Lessee shall have the right, at its own expense, to place m or on the lease Premises signs identifying Lessee Smd signs shall be of a size, shape and design, and at a location or locations, approved by the Lessor and m conformance with any overall directional graphics or sign program established by Lessor for the Parport Lessors approval shall not be withheld unreasonably Smd signs shall be maintained In good repmr throughout the term of this agreement Notwithstanding any other prov~sion of this agreement, smd signs shall remain the property of Lessee Lessee shall remove, at its expense, all lettenng, signs and placards so erected on the premises at the expiration of the term of tlus Agreement or extensions thereof VI. COVENANTS BY LESSOR Lessor hereby agrees as follows A PEACEFUL ENJOYMENT That on payment of rent, fees, and performance of the covenants and agreements on the part of Lessee to be performed hereunder, Lessee shall peaceably hold and enjoy the leased premises and all rights and privileges hereto granted, B COMPLIANCE Lessor warrants and represents that in the establishment, construction and operation of smd Denton Municipal An'port, that Lessor has heretofore and at flus tame is complying with all existing roles, regulations, and cntena dlsmbuted by the Federal Aviation Admamstratlun, or any other governmental authority relating to and including, but not limited to, noise abatement, mr rights and easements over adjoamng and contiguous areas, over-fhght m landing or takeoff, to the end that Lessee will not be legally liable for any action of Ixespass or similar cause of action by virtue of any aerial operations of adjoamng property m the course of normal take-off and landing procedures from smd Denton Mumclpal Airport, Lessor further warrants and represents that at all times dunng the term hereof, or any renewal or extension of same, that it will continue to comply with the foregoing VII SPECIAL CONDITIONS It is expressly understood and agreed by and between Lessor and Lessee that tins lease agreement is subject to the following special terms and conditions A RUNWAYS AND TAXIWAYS That because of the present sixty thousand (60,000) pound continuous use weight beanng capacity of the mnway and taxlways of the Airport, Lessee hereto agrees to lnmt all aeronant~eal aet~wty including landing, take-off and taxiing, to mreraff having an actual weight, including the weight of its fuel, of sixty thousand (60,000) pounds or less, until such time that the runway and designated taxlways on the Parport have been improved to handle mreraft of such excessive weights It is further agreed that, based on qualified engmeermg stuches, the weight restrictions and prowmons of tins clause may be adjusted, up or down, and that Lessee agrees to abide by any such changes or revmlons as such studies may chctate "Aeronautical Activity" referred to in flus clause shall include that activity of the Lessee or its agents or subcontractors, and its customers and mvltees, but shall not include those activities over which it has Alan Ritchey Lease Agreement Page 10 no sohc~tory part or control, such as an unsolicited or unscheduled or emergency landmg A pattern of neghgent thsregard of the prowslons of flus section shall be sufficient to cause the ~mmethate termination of flus enUre Agreement and subject Lessee to hahahty for any damages to the Au-port that might result VIII. LEASEHOLD IMPROVEMENTS A REQUIREMENTS Before commencmg the construction of any improvements upon the premises, Lessee shall submit 1 Documantat~on, specifications, or design work, to be approved by the Lessor, which shall estabhsh that the ~mprovements to be built or constructed upon the lease premises are m conformance wxth the overall size, shape, color, qnahty and design, m appearance and structure of the program estabhshed by Lessor on the Airport 2 All plans and specifications shovang the location upon the premises of the proposed constrUCtion. 3 The estunated cost of such construction No construction may commence tmtfl Lessor, acting by ~ts C~ty Council, has approved the plans and spec~ficatmns and the locataon of the improvements, the estimated costs of such construe- tmn and the agreed estimated hfe of the building or structure Approval by the C~ty Council shall not be unreasonably w~thheld, should the Council fail to deny Lessee's plans and spec~ficataons w~thm s~xty (60) days of submission thereof to the Council, such plans and specifications shall be deemed approved Documentary ewdenee of the actual cost of construction on pubhe areas only (such as tax,ways) shall be dehvered by Lessee to Lessors C~ty Manager from t~me to t~me as such costs are pa~d by Lessee, and Lessors C~ty Manager ~s hereby authorized to endorse upon a copy of flus lease filed w~th,the C~ty Secretary of Lessor such actual amounts as he shall have found to have been prod by Lessee, and the findings of the C~ty Manager when endorsed by ham upon smd contract shall be conclusive upon all part,es for all purposes of flus agreement B ADDITIONAL CONSTRUCTION OR IMPROVEMENTS Lessee is hereby authorized to construct upon the land hereto leased, at bas own cost and expense, bmkhngs, hangars, and struc- tures, that Lessor and Lessee mutually agree are necessary for use ~n connectaon w~th the operatmns authorized by flus lease, prowded however, before commencing the construction of any ~mprove- ments upgn the premases, Lessee shall submit plans and specifications for approval by Lessor as specified in Amcle VIII A, above C OWNERSHIP OF IMPROVEMENTS All bmldlngs and ~mprovements constructed upon the prermsas by Lessee shall remain the property of Lessee unless said property becomes the property of Lessor under the following concht~ons, terms and provm~ons 1 Removal of Bulldmss No bmldlng or permanent fixture may be removed from the premlsas 2 Assumption All bmldlngs and improvements of whatever nature mmatmng upon the leased premises at the end of the primary term, or any extension thereof, of this lease shall automatically become the property of Lessor absolutely m fee without any cost to Lessor 3 Bulldm~ Life It is agreed that the hfe of the braiding to be constructed by Lessee on the property hereto leased is flurry (30) years 4 Cancellation Should flus lease be cancelled for any reason before the end of the flurry (30) year expected bmldmg life, It is especlally understood and agreed that Lessor reserves the right to purchase all bualdmgs, structures and ~mprovements then existing upon the premises by tendenng to Lessee one thLrtaeth (1/30) of the undepreciated value of such btuldmg for each year remamang on the agreed hfe of such bmldmg The undepreclated value of all improvements is to be determined by havmg such unprovements apprmsed by three apprmsers, one appointed by Lessor, one appointed by Lessee and one appointed by the two apprmsers IX. SUBROGATION OF MORTGAGEE A Any person, corporation or mstamt~on that lends money to Lessee for construction of any hangar, structure, bmldmg or improvement and retmns a security ~nterest ~n smd hangar, structure, bmkhng or improvement shall, upon default of Lessee's obhgatlons to smd mortgagee, have the right to enter upon smd leased premises and operate or manage smd hangar, structure, bmkhng or improvement according to the terms of flus Agreement, for a period not to exceed the term of the mortgage with Lessee, or until the loan is prod m full, wluchever comes first, but m no event longer than the term of flus lease It is expressly understood and agreed that the right of the mortgagee referred tO herein is llmated and restricted to those xmpmvements constructed w~th funds borrowed t~om mortgagee, those improvements purchased w~th the borrowed funds, and those maprovements pledged to secure the refinancing of the improvements B Lessee shall have the right to place a first mortgage hen upon the leasehold m an amount not to exceed eighty-five percent (85%) of the construction cost or current market value of the leasehold xmprovements X. RIGHT OF EASEMENT Lessor shall have the right to establish easements, at no cost to Lessee, upon the leased ground space for the purpose of providing underground utthty services to, from or across the mrport property or for the ennstructmn of public factht~es on the Awport However, any such easements shall not interfere w~th Lessee's use of the leased premises and Lessor shall restore the property to ongmal condition upon the mstallatlon of any utthty services on, m, over or under any such easement or the conclusion of such construction Construction m or at the easement shall be completed watlun a reasonable time XI. ASSIGNMENT OF LEASE Lessee expressly covenants that ~t wall not assign this lease, convey more than ten percent (10%) of the interest in bas business, through the sale of stock or otherwise, transfer, heense, nor sublet the whole or any part of the said prermses for any purpose, except for rental of hangar space or tie-down space, w~thout the wntten consent of Lessor Lessor agrees that a will not unreasonably w~thhold its approval of such sale, sublease, transfer, license, or assignment of the facflmes for the airport related purposes, prowded however, that no such assignment, sublease, mmsfer, heense, sale or otherwise shall be approved if the rental, fees or payments, received or charged are m excess of the rental or fees paid by Lessee to Lessor under the terms of this lease, for such portion of the prenuses proposed to be assigned, subleased, transferred, licensed, or othervase The prowslons of tbas lease shall remain bmdlng upon the assignees, if any, of Lessee XII. INSURANCE A REQUIRED INSURANCE Lessee shall maintain continuously in effect at all t~mes during the term oftbas agreement, at Lessee's expense, the following insurance coverage 1 Comprehensive general liability covenng the leased premises, the Lessee or its company, its personnel, end its operations on the mrport 2 3arcral~ hab~hty to cover all flight operations of Lessee 3 Fare and extended coverage for replacement value for all faclhtles used by the Lessee e~ther as a part oftbas agreement or erected by the Lessee subsequent to tbas agreement 4 Llshthty insurance limits shall be m the following munmum amounts Bodily InJury and Property Damage One Mllhon Dollars ($1,000,000) combined single lunits on a per occurrence basis 5 All policies shall name the City of Denton as an additional named ~nsured and prowde for a unmmum of thirty (30) days written not, ce to the City prior to the effective date of any cancellation or lapse of such pohcy 6 All pohcles must be approved by the Lessor 7 The Lessor shall be provided with a copy of all such pohc~es and renewal ce~ficates During the term of ttus lease, Lessor hereto reserves the right to adjust or increase the habfl~ty insurance amounts reqmred of the Lessee, and to reqmre any addxt~onal rider, prows~ons, or certificates of insurance, and Lessee hereby agrees to proxade any such insurance requirements as may be reqmred by Lessor, provided however, that any requxrements shall be commensurate wxth ~nsurance reqmraments at other pubhc use mrports sunflar to the Denton Mumclpal .adrport m s~ze and m scope of awat~on actxwtxes, located m the southwestern region of the United States Lessee hereto agrees to comply w~th all increased or adjusted ~nsurance reqmrements that may be required by the Lessor throughout the original or extended term of ttus lease, ~nclu&ng types of insurance and monetary amounts or hm~ts of insurance, and to comply wxth said lusurance reqmrements w~tlun s~xty (60) days following the receipt of a not,ce m writing from Lessor stating the increased or adjusted insurance reqmrements Lessee shall have the right to maintain m force both types of insurance and amounts of msuranee winch exceed Lassor's nummum insurance requlraments In the event that State law should be amended to reqmre types of insurance and/or insurance amounts winch exceed those of hke or samlar public use airports m the southwestern region of the Umted States of America, then in such event, Lessor shall have the right to reqmre that Lessee mamtmn m force types of insurance and/or amount of insurance as specified by State law Fmlure of Lessee to comply w~th the maumum specified amounts or types of insurance as reqmred by Lessor shall constxtute Lessee's default of this Lease XIII. CANCELLATION BY LESSOR In the event that Lessee shall file a voluntary petxt~on ~n bankruptcy or proceechngs m bankruptcy shall be instituted against it and Lessee thereat~er ~s adjudicated bankrupt pursuant to such proceedings, or any court shall take junsdmt~on of Lessee and xts assets pursuant to proceedxngs brought under the provisions of any Federal reorgamzatlon act, or Lessee shall be d~vested of ~ts estate hereto by other operatxon of law, or Lessee shall fall to perform, keep and observe any of the terms, covenants, or cond~t~ous hereto contained, or on its part to be performed, the Lessor may give Lessee written notice to correct such cond~tlon or cure such default and, xf any condition or default shall continue for thn'ty (30) days after the receipt of such notice by Lessee, then Lessor may term~nate~fins lease by written notme to Lessee In the event of default, Lessor has the right to purchase any or all structures on the leased premxses under the provlslous of Scot,on vm Paragraph C 4 (Cancellatton) hereof XIV. CANCELLATION BY LESSEE Lessee may cancel fins Agreement, m whole or part, and terminate all or any of~ts obhganons hereunder at any t~me, by finrty (30) days written notme, upon or aider the happemng of any one of the following events (1) ~ssuance by any court of competent junschction of a permanent ~njunction m any way preventing or restralmng the use of smd mrport or any part thereof for mrport purposes, (2) the breach by Lessor of any of the covenants or agreements contained hereto and the fmlure of Lessor to remedy such breach for a period of ninety (90) days after receipt of a written not~ce of the exlstenee of such breach, (3) the lnabthty of Lessee to use smd premises and facilities continuing for a longer period than ninety (90) days due to any law or any order, rule or regulation of any appropriate governmental authonty having junsihctmn over the operations of Lessor or due to war, earthquake or other casualty, or (4) the assumption or recapture by the Umted States Government, or any anthonzed agency thereof, of the mmntenance and operation of smd airport and faclht~es or any substantial part or parts thereof Upon the happemng of any of the four events hsted in the preceding paragraph, such that the leased prermses cannot be used for awat~on purposes, then the Lessee may cancel tins lease as aforesmd, or may elect to continue flus lease under ~ts terms, except, however, that the use of the leased prewases shall not be hnuted to awatlon purposes, their use being only hm~ted by such laws and ordmanees as may be applicable at that tune XV. MISCELLANEOUS PROVISIONS A ENTIRE AGREEMENT Ttus Agreement constitutes the entn:e understanding between the partaes and as of its effective date supersedes all prior or independent Agreements between the parhes covering the subject matter hereof Any change or mo&ficatlon hereof shall be m writing s~gued by both partlas B BINDING EFFECT All covenants, stapulat~ons and agreements hereto shall extend to, brad and mute to the benefit of the legal representataves, successors and asSlguS of the respective par- t~es hereto C SEVERABILITY If a provmlon hereof shall be finally declared void or Hlegal by any court or admlmstrat~ve agency having jurisdiction, the entire Agreement shall not be vmd, but the remmmng prommons shall conttnue m effect as nearly as possible m accordance w~th the original intent of the part, es D NOTICE Any notme gtven by one party to the other m connection w~th flus agreement shall be in writing and shall be dehvered personally or sent by certified mml, return receipt requested, with postage and regmtratlon fees prapatd as follows 1 If to Lessor, addressed to City Manager C~ty of Denton 215 E McKanney Street Denton, Texas 76201 2 IftoLessee, addressedto Alan R~tchey, Ine Post Office Box 249 Valley View, Texas 76272 Notices shall be deemed to have been receaved on the date of receapt as shown on the return receapt or affidavit of person making personal dehvery E HEADINGS The headings used in flus Agreement are antended for convemence of reference only and do not define or lmut the scope or meaning of any provaslon of this Agreement F GOVERNING LAW This Agreement as to be construed m accordance wath the laws of the State of Texas G NO WAIVER No watver by Lessor or Lessee of any default or breach of covenant or term of this lease may be treated as a waiver of any subsequent default or breach of the same or any other covenant or term of flus Agreement H INDEPENDENT CONTRACTOR Dunng all times that flus Lease as m effect, the parties agree that Lessee as and shall be deemed to be an independent contractor and operator and not an agent or employee or the Lessor wath respect to their acts or omissions hereunder For all the purposes hereunder, Lessee is and shall be deemed an independent contractor and it as mutually agreed that notiung eontmned hereto shall be deemed or construed to constitute a parmership or jomt venture between the pames IN WITNESS WHEREOF, the partaes have executed this Agreement as of the day and year first above written CITY OF DENTON, TEXAS, LESSOR BY j~ ATTEST~, O ~{~. V~ALTEI~S, CITY SECRETARY F DENTON, TEXAS APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY CITY OF DENTON, TEXAS ALAN RITCHEY, INC, LESSEE THE STATE OF TEXAS § coum'¥ OF DENION § Before me AI0fft-~c~qeq on flus day personally appeared , known to ml or through, to be the person whose name m subscribed to the foregoing instrument and acknowledged to that he executed the same for the purposes and eonmderatmn thereto expressed G~ven under my hand and seal of 91T~m ~/44~ day of [~q t/J/'CJn., , A D N~)~RY PUBLIC, STATE OF TE~S My Co~sslon Exp~es ~ - ~ ~ ~ ~ 111[~~ MY COMMISSION ~PIaES Ii Alan Ritchey Lease A~reement - Page 17 CITY OF DENTON, TEXAS DENTON MUNICIPAL AIRPORT June 8, 1998 TERMINAL BUILDING 5000 AIRPORT RD DENTON TX 76207 Mr Alan Patchey P O Box 249 Valley V~ew, TX 76272 Dear Mr R~tchey TNs xs a follow up to my letter dated May 21, 1998 concermng the due date for your lease payment As stated m that letter, Section IV PAYMENTS, RENTALS AND FEES of your lease states all payments are due on or before the first day of each and every month dunng the term of tNs agreement It was the intent of the lease agreement that payments would be due on the 15th day of each and every month dunng the term of th~s lease I have contacted the Cxty Attorney's Office and was reformed that thru letter could serve as a notxficat~on that payment will be due on the 15th of each and every month Upon your approval, a copy of tNs notification will be attached to your file m flus office, the Cxty Attorney's Office, and the C~ty Secretary's Office If you do not feel comfortable with th~s arrangement, please notify me at (940) 349-7702 and an amendment to your lease can be made to correct the error I apologxze for any mconvemence and look forward to working wxth you on your proposed development Smcerely, Mark Nelson A~rport Manager pc Lmda Ratllff, D~rector Economic Development Appr°ved bY ~hey;~~~ '--- Alan R~tchey Inc~,, Telephones (940) 349-7736 or 349-7702 Fax (940) 383- 7289 "Dedicated to Quality Serwce"