1998-350AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE AN AIRPORT
LEASE AGREEMENT BETWEEN THE CITY OF DENTON AND JIM OSBORNE 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 mrport lease agreement
between the City of Denton, Texas and Jim Osborne, to lease certmn premises of the Mumc~pal
Airport for the purposes of and constructing and mmntmmng a office and hangar facthtles
thereon, under the terms and conditions contained w~thln th~s Agreement, whmh is attached
hereto and made a part hereof
SECTION II That this ordinance shall become effective immediately upon its passage
and approval
PASSED AND APPROVED thls the ~/~~ dayof (~2~~ ,1998
ATTEST
JENNIFER WALTERS, CITY SECRETARY
APPR(~4E; AS~O LEGAI~F;~
HERBERT L PROUTY, CITY ATTORNEY
AIRPORT LEASE AGREEMENT
COMMERCIAL OPERATOR
THE STATE OF TEXAS §
§ KNOW ALL MEN BY THESE PRESENTS
COUNTY OF DENTON
Thls lease is made and executed this. _~.~--~d ~~
1998, at Denton, Texas, by and between the cl5y o~YD=~ton, ex ,
municipal corporation, hereinafter referred to as "Lessor", and Jim
Osborne, having his principal offices at 1912 Vintage Drive,
Corinth, Texas 76205, hereinafter referred to as "Lessee"
WITNESSETH~
WHEREAS, Lessor now owns, controls and operates the Municipal
Airport (Airport) in the City of Denton, County Df Denton, State of
Texas, and
WHEREAS, Lessee desires to lease certain premises on said
airport and construct and maintain an aircraft hangar and related
aviation facilities thereon, and
NOW, THEREFORE, for and in consideration of the promises and
the mutual covenants contained in this Agreement, the parties 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 furnishing services to the public is
granted to Lessee subject to Lessee agreeing
1 To furnish said services on a fair, equal and not
unjustly dlscrlm~natory bas~s to all users thereof, and
2 To charge fair, reasonable and not un]ustly
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
B NON-DISCRIMINATION Lessee, for himself, his personal
representatives, successors and interests, 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 grounds of race, rellg~on, color, sex,
or national origin shall be excluded from partlc~pat~on
in, denied the benefits of, or be otherwise subjected to
d~scrlm~nat~on ~n the use of said facilities,
2 In the construction of any improvements on, over, or
under such land and the furnishings of services thereon,
no person on the grounds of race, religion, color, sex,
or national origin shall be excluded from participation
in, denied the benefits of, or otherwise be subjected to
discrimination,
3 Lessee shall use the premises zn compliance with all
other requirements imposed by or pursuant to Title 49,
Code of Federal Regulations, Department of
Transportation, Subtitle A, Office of the Secretary, Part
21, Nondiscrimination in Federally assisted programs of
the Department of Transportation Effectual of Title VI
of the Civil Rights Act of 1964, as said Regulations may
be amended
C RIGHT OF INDIVIDUALS TO MAINTAIN AIRCRAFT It zs 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
D NON-EXCLUSIVE RIGHT It is understood and agreed that
nothing herein contained shall be construed to grant or authorize
the granting of an exclusive right within the meaning of Title 49
U S C Appendix §1349
E PUBLIC AREAS
1 Lessor reserves the right to further develop or improve
the landing area of the airport as ~t sees fit,
regardless of the desires or views of Lessee, and without
interference or hindrance
2 Lessor shall be obligated to maintain and keep zn 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
3 During time of war or national emergency, Lessor shall
have the right to lease the landing area or any part
thereof to the United States Government for military or
naval use, and, if such lease is executed, the provisions
of this instrument insofar as they are inconsistent with
the provisions of the lease to the Government, shall be
suspended
Osborne Lease Agreement Page 2
4 Lessor reserves the right to take any action it considers
necessary to protect the aerial approaches of the airport
against obstruction, together with the r~ght to prevent
Lessee from erecting, or permitting to be erected, any
building or other structure on or adjacent to the airport
which, in the opinion of Lessor, would l~mlt the
usefulness or safety of the airport or constitute a
hazard to aircraft or to aircraft navigation
5 This Lease shall be subordinate to the provisions of any
existing or future agreement between Lessor and the
United States or agency thereof, relative to the
operation or maintenance of the airport
II. LEASED PREMISES
Lessor, for and in consideration of the covenants and agree-
ments 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 described land situated in Denton County,
Texas
A LAND A tract of land, being approximately 8,800 square
feet, or 0 202 acres, drawn and outlined on Attachment "A", and
legally described in Attachment "B", such attachments being
incorporated herein by reference
Together with the right of ingress and egress to said property,
and the right in 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 lnv~tees For purposes of this
agreement, the term "Premises" shall mean all property located
within the metes and bounds described and identified within
Attachment "B", including leasehold Improvements constructed by the
Lessee, but not including certain easements or property owned
and/or controlled by the Lessor
B IMPROVEMENTS PROVIDED BY LESSOR NONE There will be no
improvements provided by Lessor, except as set forth in Article
II E "Access to Utilities" below
For the purpose of this Agreement, the term "Lessor improve-
ments'' shall mean those things on the leased premises 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 otherwise noted herein, all Lessor
improvements are and will remain the property of Lessor All
Lessor improvements must be described in detail above, or above
referenced and attached to this Agreement in an exhibit approved by
Lessor
Osborne Lease Agreement Page
C IMPROVEMENTS PROVIDED BY LESSEE On Lot 3, Lessee shall
construct a hangar and office facility not less than 2,500 square
feet with taxiway access and approprlate culverts as required by
C~ty ordlnances in the utlllty rlght of way south of the proposed
hangar and north of the Taxlway (Lockheed) as well as other
improvements as shown on the site plan attached hereto and made a
part hereof for all purposes and ~dent~fled as Attachment KC"
D EASEMENTS Lessor and Lessee by mutual agreement may
establish, on the lease premises, easements for public access on
roads and taxlways
E ACCESS TO UTILITIES Lessor represents that there are
water and 3-phase electr~clty lines wlthln three hundred feet
(300') of the leased premises avallable to "tap-~n" by Lessee, and
that the same are sufficient for usual and customary service on the
leased premises Lessor shall make required sewer lines available
to Lessee wlthln twelve months (12) from the effective date of this
agreement Sewer l~nes wlll be w~th~n one hundred (100) feet of
the leased premzses Lessee will be requzred to connect to said
sewer line wzthln slx (6) months of completion of said sewer lzne
III. TERM
The term of this Agreement shall be for a perlod of thirty (30)
years, commencing on the 15th day of October , 1998, and cont~nu-
lng through the 15=h Day of October, 2028, unless earlier
terminated under the provisions of the Agreement Any attempt by
Lessee to renegotlate this Lease shall be ~n writing addressed to
the C~ty Manager at least one hundred eighty (180) days before the
expiration of the stated term of th~s lease, and at least 180 days
before the expiration of any additional renegotlated period
Lessee has the option to renew for two (2) additional ten {10) year
terms The rental and terms to be negotiated shall be reasonable
and conslstent with the then value, rentals and terms of s~mllar
property on the airport
IV. PAYMENTS, RENTALS AND FEES
Lessee covenants and agrees to pay Lessor, as consideration for
th~s lease, the following payments, rentals and fees
A LAND RENTAL shall be due and payable ~n twelve (12) equal
monthly installments in the sum ~n advance, on or before the 15th
day of each and every month durlng the term of th~s agreement
Lessee may have the option to pay annual rentals and fees in whole
on or before the 15th day of October each and every year of th~s
lease
1 10/15/98 $0 06 per square foot minimum yearly
rental, adjusted annually per paragraph IV C
2 10/15/03 The current lease rate (previous year's
rental) will be increased by an additional $0 06 per
square foot, and then adjusted annually per paragraph
IV C
3 10/15/13 The current lease rate (previous year's
rental) will be zncreased by an additional $0 02 per
square foot, and then adjusted annually per paragraph
IV C
Notwithstanding the foregoing, the annual lease rental to be
reduced by the current lease rate per square foot, times the number
of square feet comprising all easements established in accordance
w~th Article II(D)
B LESSOR IMPROVEMENTS RENTALS NONE There are no Lessor
improvements on the leased premises
C PAYMENT, PENALTY, ;%DJUSTMENTS All payments due Lessor from
Lessee shall be made to Lessor at the offices of the F~nance
Department of the City of Denton, Accounts Receivable, 215 E
McKlnney, Denton, Texas, unless otherwise designated in wrltlng by
the Lessor If payments are not received before or on the 15th, a
five (5) percent penalty will be due as of the 16th If payments
are not received by the 1st of the subsequent month, an additional
penalty of one (1) percent of the unpald rental/fee amount wzll be
due A one (1) percent charge will be added on the 1st 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 th~s lease
The yearly rental for land and improvements herein leased shall
be readjusted at the end of each one (1) year perzod during the
term of this lease on the basis of the proportion that the then
current Unzted States Consumer Price Index for all urban consumers
(CPI-U) for the Dallas-Fort Worth geographical regzon, as compiled
by the U S Department of Labor, Bureau of Labor Statistics bears
to the applzcable index at the executzon of this lease The
orzglnal land rental amount is based upon the formulae set forth in
Section IV A for the land herein leased Each rental adjustment,
if any, shall occur on the 15th day of October, beginning 1999, and
every year thereafter on such date
The ad3ustments in the yearly rent shall be determined by
multiplying the minimum yearly rent as set forth in Section IV A
by a fraction, the numerator of which is the index number for the
last month prior to the adjustment, and the denominator of which
is the index number applicable at the executzon of th~s lease If
the product of th~s multlpllcat~on ~s greater than the m~n~mum
yearly rent as set forth in Section IV A , Lessee shall pay this
greater amount as the yearly rent until the time of the next
rental adjustment as called for in this section If the product of
Osborne Lease ~reement Page 5
thzs multiplication is less than the mznzmum yearly rent of as set
forth in Sectzon IV A , there shall be no adjustment zn the annual
rent at that tzme, and Lessee shall pay the previous year's annual
rent untzl the time of the next rental adjustment as called for in
this sectzon In no event shall any rental adjustment called for
in this section result zn an annual rent less than the previous
year's annual rent The ad3ustment shall be limited 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 10/15/03 and 10/15/13
If the consumer price lndex for all urban consumers (CPI-U) for
the Dallas-Fort Worth geographical region, as compiled by the U S
Department of Labor, Bureau of Labor Statistics, is d~scontlnued
during the term of thzs lease, the remaining rental adjustments
called for in this section shall be made using the formula set
forth in Subsectlon (a) above, but substztut~ng the index numbers
for the Consumer Price Index-Seasonally Adjusted U S City Average
For All Items For All Urban Consumers (CPI-U) for the Index numbers
for the CPI-U applicable to the Dallas-Fort Worth geographical
region If both the CPI-U for the Dallas-Fort Worth geographical
region and the U S Czty Average are d~scontlnued during the term
of this lease, the remaining rental adjustments called for in this
section shall be made using the statistics of the Bureau of Labor
Statzstlcs of the Un,ted States Department of Labor that are most
nearly comparable to the CPI-U applicable to the Dallas-Fort Worth
geographlcal region If the Bureau of Labor Statistics of the
United States Department of Labor ceases to exzst or ceases to
publish statistics concerning the purchasing power of the consumer
dollar during the term of thzs lease, the remaining rental
adjustments called for in this section shall be made using the most
nearly comparable statistics published by a recognized financial
authorlty selected by Lessor
V. RIGHTS AND OBLIGATIONS OF LESSEE
A USE OF LEASED PREMISES Lessee is granted the non-
exclusive privilege to engage in or provide the following
1 Hangar Leases and Rental The rental or lease of hangars
and hangar space and related facilities upon the leased
premises
2 Off~ce Space Lease or Rental The rental or lease of
office space in or adjoining Lessee's hangars
3 A~rcraft Storage and Tie Down To provide parking,
storage and tie down service, for both Lessee's and
~tlnerant aircraft upon or within the leased premises
Osborne Lease Agreement - Page 6
Lessee, his tenants and sublessees shall not be authorized to
conduct any services not specifically listed in this agreement
The use of the lease premises of Lessee, h~s tenants or sublessees
shall be limited to only those private, commercial, retail or in-
dustrial activities hav~ng to do with or related to airports and
aviation No person, business or corporation may operate a commer-
cial, retaml or ~ndustrlal bus,ness upon the premises of Lessee or
upon the Airport wlthout a lease or l~cense from Lessor authorizing
such commercial, retail or Industrial activity The Lessor shall
not unreasonably withhold authorization to conduct aeronautical or
related services
B STANDARDS Lessee shall meet or exceed the following
standards
1 Address Lessee shall f~le with the Airport Manager and
~-~p current h~s mailing addresses, telephone numbers and
contacts where he can be reached in an emergency
2 Llst Lessee shall file with the Airport Manager and keep
current a list of his tenants and sublessees
3 Conduct Lessee shall contractually require his employers
and sublessees (and sublessee's lnvltees) to ab~de by the
terms of th~s agreement Lessee shall promptly enforce
his contractual rights in the event of a default of such
covenants
4 Utilities, Taxes and Fees Lessee shall meet all expenses
and payments in connection with the use of the Premises
and the rights and privileges herein granted, including
the timely payment of utilities, taxes, permit fees,
license fees and assessments lawfully levied or assessed
5 Laws Lessee shall comply with all current and future
federal, state and local laws, rules and regulations which
may apply to the conduct of bus~ness contemplated,
including rules, regulations and ordinances promulgated by
Lessor, and Lessee shall keep in effect and post in a
prominent place all necessary and/or required l~censes or
permits
6 Maintenance of Property Lessee shall be responsible for
the maintenance, repair and upkeep of all property, build-
ings, structures and improvements, including the mowing or
elimination of grass and other vegetation on the Premises,
and shall keep said Premises neat, clean and ~n
respectable condition, free from any ob]ect~onal matter or
thing Lessee agrees not to utzllze or permit others to
utilize areas on the leased premzses which are located on
the outside of any hangar or building for the storage of
wrecked or permanently disabled a~rcraft, a~rcraft parts,
osborne Lease ~reement Page 7
automobiles, vehmcles of any type, or any other equmpment
or mtems which would d~stract from the appearance of the
leased premises Lessee agrees that at no tmme shall the
leased premises be used for a flea market type sales
operation
7 Painting of Bumld~ngs During the ormgmnal term of this
Lease and during each extension, Lessor shall have the
right to require, not more than once every fmve years,
that the metal exterlor of hangar(s) or bumldmng(s)
located on the premises be revmewed by the A~rport
Advmsory Board for the purpose of determlnang whether
painting of the exteriors of such bumld~ngs or hangars ~s
necessary If the Aarport Advmsory Board determines
pamntlng is necessary, mt shall furnash a recommendation
to thms effect to the C~ty Council The Councml, may,
upon the Board's recommendatmon, requmre Lessee to repamnt
said extermors accordang to Lessors specaflcat~ons (to
specify color of paznt, qualmty of workmanship and the
year and month ~n which the hangar(s) or buald~ng(s) are
to be pamnted, ~f needed ) Lessee shall complete the
paznt~ng an accordance wmth such specafacatmons within one
(1) year of recempt of notice from lessor Lessee agrees
to pay all costs and expense mnvolved mn the hangar or
bumldlng palntlng process Famlure of Lessee to complete
the palntmng requlred by Lessor's City Counczl wmthmn one
(1) year permod shall constitute Lessee's default under
this Lease
8 Unauthormzed use of premises Lessee may not use any of
the leased land or premmses for the operation of a motel,
hotel, restaurant, private club or bar, apartment house,
or for ~ndustrmal, commercaal or retaml purposes, except
as authorized herein
9 Dwellmngs It ms expressly understood and agreed that no
permanent dwellmng or domicile may be built, moved to or
establlshed on or within the leased premises nor may
lessee, h~s tenants, mnvmtees, or guests be permztted to
resmde or remain as a resident on or wathmn the leased
premmses or other a~rport premmses
10 Qumt Possessaon Lessee shall qumt possessmon of all
premises leased here~n at the end of the primary term of
thas lease or any renewal or extensmon thereof, and
delzver up the premmses to Lessor an as good condmt~on as
exmsted when possession was taken by Lessee, reasonable
wear and tear excepted
11 Hold Harmless Lessee shall ~ndemnmfy and hold harmless
Lessor from and agamnst all loss and damages, ancludang
death, personal injury, loss of property or other damages,
arising or resulting from the operation of Lessee's
business in and upon the leased premises
12 Chemicals Lessee agrees to properly store, collect and
dispose of all chemicals and chemical residues, to
properly store, confine, collect and dispose of all paint,
including paint spray in the atmosphere, and paint
products, and to comply with all Local, State and Federal
regulations governing the storage, handling or disposal of
such chemicals and paints
13 Hazardous Activities Should Lessee violate any law,
rule, restriction or regulation of the City of Denton or
the Federal Aviation Administration, or should the Lessee
engage in or permit other persons or agents to engage in
activities which could produce hazards or obstruction to
air navigation, obstructions to visibility or interference
with any aircraft navigational aid station or device,
whether airborne or on the ground, then Lessor shall state
such violation in writing and deliver written not~ce to
Lessee or Lessee's agent on the leased premises, or to the
person(s) on the leased premises who are causing said
violation(s), and upon delivery of such written not~ce,
Lessor shall have the right to demand that the person(s)
responsible for the vlolatlon(s) cease and desist from all
such activity creating the violation(s) In such event,
Lessor shall have the right to demand that corrective
action, as required, be commenced immediately to restore
the leased premises into conformance with the particular
law, rule or aeronautical regulation being v~olated
Should Lessee, Lessee's agent, or the person(s)
responsible for the violation(s) fall to cease and desist
from said violation(s) and to immediately commence
correcting the violation(s), and to complete said correc-
tions within twenty-four (24) hours following written
notification, then Lessor shall have the right to enter
onto the leased premises and correct the violation(s), and
Lessor shall not be responsible for any damages incurred
to any improvements on the leased premises as a result of
the corrective action process
D SIGNS During the term of this Agreement, Lessee shall
have the right, at its own expense, to place in or on the lease
Premises s~gns identifying Lessee Said signs shall be of a size,
shape and design, and at a location or locations, approved by the
Lessor and in conformance w~th any overall d~rect~onal graphics or
s~gn program established by Lessor for the A~rport Lessor's
approval shall not be withheld unreasonably Sa~d s~gns shall be
maintained in good repair throughout the term of this agreement
Notw~thstandlng any other provlslon of this agreement, said s~gns
shall remain the property of Lessee Lessee shall remove, at lts
expense, all letterlng, slgns and placards so erected on the
premises at the expiration of the term of this 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 en~oy
the leased premises and all r~ghts and privileges here~n granted,
B COMPLIANCE Lessor warrants and represents that in the
establishment, construction and operation of sa~d Denton Municipal
A~rport, that Lessor has heretofore and at this time ~s complying
w~th all ex~st~ng rules, regulations, and criteria d~strlbuted by
the Federal Aviation Administration, or any other governmental
authority relating to and including, but not l~m~ted to, no~se
abatement, a~r rights and easements over adjoining and contiguous
areas, over-flight ~n landing or takeoff, to the end that Lessee
will not be legally l~able for any action of trespass or similar
cause of action by v~rtue of any aerial operations of adjoining
property in the course of normal take-off and landing procedures
from sa~d Denton Municipal Airport, Lessor further warrants and
represents that at all times during the term hereof, or any renewal
or extension of same, that ~t will continue to comply with the
foregoing
VII. SPECIA~ CONDITIONS
It is expressly understood and agreed by and between Lessor and
Lessee that this lease agreement is subject to the following
special terms and conditions
A RUNWAYS AIqD TAXIWAYS That because of the present f~fteen
thousand (15,000) pound continuous use weight bearing capacity of
the runway and taxlways of the A~rport, Lessee here~n agrees to
l~mlt all aeronautical activity including landing, take-off and
taxiing, to a~rcraft hav~ng an actual weight, including the weight
of its fuel, of fifteen thousand (15,000) pounds or less, until
such time that the runway and designated taxlways on the A~rport
Osborne Lease ~reement Page 10
have been improved to handle aircraft of such excessive weights
It is further agreed that, based on qual~fled engineering studies,
the weight restrictions and provIsions of this clause may be
adjusted, up or down, and that Lessee agrees to abide by any such
changes or revisions as such studies may dictate "Aeronautical
Activity" referred to in this clause shall include that activity of
the Lessee or its agents or subcontractors, and its customers and
lnvltees, but shall not include those activities over which it has
no sollcltory part or control, such as an unsolicited or
unscheduled or emergency landing A pattern of negligent disregard
of the provisions of this section shall be sufflc~ent to cause the
immediate termination of this entire Agreement and subject Lessee
to liability for any damages to the Airport that might result
VIII. LEASEHOLD IMPROVEMENTS
A REQUIREMENTS Before commencing the construction of any
improvements upon the premises, Lessee shall submit
1 Documentation, speclf~catlons, or design work, to be
approved by the Lessor, which shall establish that the
improvements to be built or constructed upon the lease
premises are in conformance with the overall size, shape,
color, quality and design, in appearance and structure of
the program established by Lessor on the Airport
2 All plans and specifications showing the location upon the
premises of the proposed construction,
3 The estimated cost of such construction
No construction may commence until Lessor, acting by 1ts City
Council, has approved the plans and specifications and the location
of the improvements, the estimated costs of such construction and
the agreed estimated life of the building or structure Approval
by the City Council shall not be unreasonably withheld, should the
Council fall to deny Lessee's plans and specifications within sixty
(60) days of submission thereof to the Council, such plans and
specifications shall be deemed approved Documentary evidence of
the actual cost of construction on publmc areas only (such as
taxlways) shall be delivered by Lessee to Lessor's City Manager
from tlme to time as such costs are paid by Lessee, and Lessor's
Cmty Manager is hereby authorized to endorse upon a copy of this
lease f~led with the City Secretary of Lessor such actual amounts
as he shall have found to have been paid by Lessee, and the
findings of the City Manager when endorsed by him upon said
contract shall be conclusive upon all parties for all purposes of
this agreement
Osborne Lease Agreement Page 11
B ADDITIONAL CONSTRUCTION OR IMPROVEMENTS Lessee is hereby
authorized to construct upon the land herein leased, at his own
cost and expense, bulldmngs, hangars, and structures, that Lessor
and Lessee mutually agree are necessary for use mn connection wmth
the operatmons authormzed by th~s lease, provided however, before
commencmng the construction of any mmprovements upon the premises,
Lessee shall submmt plans and specmficatmons for approval by Lessor
as specmfmed in Artmcle VIII A , above
C OWNERSHIP OF IMPROVEMENTS All bumld~ngs and
mmprovements constructed upon the premises by Lessee shall remain
the property of Lessee unless sa~d property becomes the property of
Lessor under the followmng condmtlons, terms and provlsmons
1 Removal of Bumldmn~s No bu~ldmng or permanent f~xture
may be removed from the premmses
2 Assumptmon All bumldmngs and mmprovements of whatever
nature remamn~ng upon the leased premises at the end of
the primary term, or any extensmon thereof, of thms lease
shall automatmcally become the property of Lessor
absolutely mn fee w~thout any cost to Lessor
3 Bumld~n~ L~fe It ms agreed that the lmfe of the bu~ldmng
to be constructed by Lessee on the property heremn leased
· s thmrty (30) years
4 Cancellation Should th~s lease be cancelled for any
reason before the end of the thirty (30) year expected
bumldmng l~fe, mt is especially understood and agreed that
Lessor reserves the rmght to purchase all buildings,
structures and mmprovements then exmst~ng upon the
premmses by tendering to Lessee one th~rtmeth (1/30) of
the undeprecmated value of such buzld~ng for each year
remamn~ng on the agreed l~fe of such bumldlng The
undeprec~ated value of all mmprovements is to be
determmned by havmng such improvements appramsed by three
appramsers, one appointed by Lessor, one appomnted by
Lessee and one appointed by the two appramsers
IX SUBROGATION OF MORTGAGEE
A Any person, corporatzon or mnstmtutmon that lends money
to Lessee for constructzon of any hangar, structure, bulldmng or
mmprovement and retains a securzty mnterest zn samd hangar, struc-
ture, building or ~mprovement shall, upon default of Lessee' s
oblmgatlons to samd mortgagee, have the r~ght to enter upon sa~d
leased premises and operate or manage samd hangar, structure,
building or mmprovement according to the terms of thms Agreement,
for a permod not to exceed the term of the mortgage w~th Lessee,
or untml the loan ms paid mn full, whichever comes first, but In
Osborne Lease Agreement Page 12
no event longer than the term of this lease It is expressly
understood and agreed that the right of the mortgagee referred to
herein is limited and restricted to those improvements constructed
with funds borrowed from mortgagee, those improvements purchased
with the borrowed funds, and those improvements pledged to secure
the refinancing of the improvements
B Lessee shall have the right to place a first mortgage
lien upon the leasehold ~n an amount not to exceed ezghty-flve
percent (85%) of the constructlon cost or current market value of
the leasehold improvements
X. RIGHT OF EASEMENT
Lessor shall have the r~ght to establish easements, at no cost
to Lessee, upon the leased ground space for the purpose of
providing underground utility services to, from or across the
airport property or for the construction of public facilities on
the Airport However, any such easements shall not interfere with
Lessee's use of the leased premises and Lessor shall restore the
property to original condition upon the installation of any utility
services on, in, over or under any such easement or the conclusion
of such construction Construction in or at the easement shall be
completed within a reasonable time
XI. ASSIGNMENT OF LEASE
Lessee expressly covenants that it will not assign this lease,
convey more than ten percent (10%} of the interest ~n his business,
through the sale of stock or otherwise, transfer, license, nor
sublet the whole or any part of the said premises for any purpose,
except for rental of hangar space or tie-down space, without the
written consent of Lessor Lessor agrees that it will not
unreasonably withhold its approval of such sale, sublease,
transfer, license, or assignment of the facilities for the airport
related purposes, provided however, that no such assignment,
sublease, transfer, license, sale or otherwise shall be approved ~f
the rental, fees or payments, received or charged are ~n excess of
the rental or fees paid by Lessee to Lessor under the terms of this
lease, for such portion of the premises proposed to be assigned,
subleased, transferred, licensed, or otherwise The provisions of
this lease shall remain b~ndlng upon the assignees, ~f any, of
Lessee
XII. INSURANCE
A REQUIRED INSURANCE Lessee shall maintain continuously in
effect at all t~mes during the term of this agreement, at Lessee's
expense, the following insurance coverage
Osborne Lease Agreement Page
1 Comprehensive general liability covering the leased
premises, the Lessee or its company, its personnel, and
its operations on the airport
2 Aircraft liability to cover all flight operations of
Lessee
3 Fire and extended coverage for replacement value for all
facilities used by the Lessee either as a part of this
agreement or erected by the Lessee subsequent to this
agreement
4 Liability insurance limits shall be in the following
minimum amounts
Bodily Injury and Property Damage
One Million Dollars ($1,000,000) combined single limits on
a per occurrence basis
5 All policies shall name the City of Denton as an
additional named ~nsured and provide for a minimum of
thirty (30) days written notice to the City prior to the
effective date of any cancellation or lapse of such
policy
6 All pollcles must be approved by the Lessor
7 The Lessor shall be provided w~th a copy of all such
policies and renewal certificates
During the term of thls lease, Lessor herein reserves the right
to adjust or increase the liability insurance amounts required of
the Lessee, and to require any additional rider, provisions, or
certificates of insurance, and Lessee hereby agrees to provide any
such insurance requirements as may be required by Lessor, provided
however, that any requirements shall be commensurate with insurance
requirements at other public use airports s~mllar to the Denton
Municipal Airport in s~ze and in scope of aviation activities,
located ~n the southwestern region of the United States Lessee
herein agrees to comply w~th all ~ncreased or adjusted Insurance
requirements that may be required by the Lessor throughout the
original or extended term of this lease, including types of insur-
ance and monetary amounts or limits of insurance, and to comply
with said insurance requirements within sixty (60) days following
the receipt of a notice in writing from Lessor stating the
increased or adjusted insurance requirements Lessee shall have
the right to maintain ~n force both types of insurance and amounts
of insurance which exceed Lessor's minimum insurance requirements
In the event that State law should be amended to require types
of insurance and/or insurance amounts which exceed those of like or
similar public use airports in the southwestern region of the
United States of America, then in such event, Lessor shall have the
right to require that Lessee maintain in force types of insurance
and/or amount of insurance as specified by State law
Failure of Lessee to comply with the minimum specified amounts
or types of insurance as required by Lessor shall constitute
Lessee's default of this Lease
XIII. CANCELLATION BY LESSOR
In the event that Lessee shall file a voluntary petition in
bankruptcy or proceedings in bankruptcy shall be instituted against
it and Lessee thereafter is ad3udlcated bankrupt pursuant to such
proceedings, or any court shall take ]urlsdlctlon of Lessee and its
assets pursuant to proceedings brought under the provisions of any
Federal reorganization act, or Lessee shall be divested of its
estate herein by other operation of law, or Lessee shall fall to
perform, keep and observe any of the terms, covenants, or
conditions herein contained, or on its part to be performed, the
Lessor may give Lessee written notice to correct such condition or
cure such default and, if any condition or default shall continue
for thirty (30) days after the receipt of such notice by Lessee,
then Lessor may terminate this lease by written notice to Lessee
In the event of default, Lessor has the right to purchase any or
all structures on the leased premises under the provisions of
Section VIII Paragraph C 4 (Cancellation) hereof
XIV. CANCELLATION BY LESSEE
Lessee may cancel this Agreement, in whole or part, and termi-
nate all or any of its obligations hereunder at any time, by thirty
(30) days written notice, upon or after the happening of any one of
the following events (1) issuance by any court of competent
]urlsdlctlon of a permanent in]unction in any way preventing or
restraining the use of said airport or any part thereof for airport
purposes, (2) the breach by Lessor of any of the covenants or
agreements contained herein and the failure of Lessor to remedy
such breach for a period of ninety (90) days after receipt of a
written notice of the existence of such breach, (3) the inability
of Lessee to use said 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 authority having
jurisdiction over the operations of Lessor or due to war,
earthquake or other casualty, or (4) the assumption or recapture by
the United States Government, or any authorized agency thereof, of
the maintenance and operation of said airport and facilities or any
substantial part or parts thereof
Upon the happening of any of the four events listed in the
preceding paragraph, such that the leased premises cannot be used
for aviation purposes, then the Lessee may cancel this lease as
Osborne Lease ~reement Page 15
aforesaid, or may elect to continue this lease under its terms,
except, however, that the use of the leased premises shall not be
limited to aviation purposes, their use being only limited by such
laws and ordinances as may be applicable at that time
XV. MISCELLANEOUS PROVISIONS
A ENTIRE AGREEMENT This Agreement constitutes the entire
understanding between the parties and as of 1ts effective date
supersedes all prior or independent Agreements between the parties
covering the subject matter hereof Any change or modification
hereof shall be in writing signed by both parties
B BINDING EFFECT Ail covenants, stipulations and agreements
herein shall extend to, bind and inure to the benefit of the legal
representatives, successors and assigns of the respective parties
hereto
C SEVERABILITY If a provision hereof shall be finally
declared void or illegal by any court or administrative agency hay-
lng jurisdiction, the entire Agreement shall not be void, but the
remaining provisions shall continue in effect as nearly as possible
in accordance with the original intent of the parties
D NOTICE Any notice given by one party to the other in
connection with this agreement shall be in writing and shall be
sent by registered mall, return receipt requested, with postage and
registration fees prepaid as follows
1 If to Lessor, addressed to
City Manager
City of Denton
215 E McKlnney Street
Denton, Texas 76201
2 If to Lessee, addressed to
Mr Jim Osborne
1912 Vintage Drive
Corinth TX 76205
Notlces shall be deemed to have been received on the date of
receipt as shown on the return receipt
E HEADINGS The headings used in this Agreement are intended
for convenience of reference only and do not define or limit the
scope or meaning of any provision of this Agreement
F GOVERNING LAW This Agreement is to be construed in
Osborne Lease Agreement Page 16
accordance wath the laws of the State of Texas
G NO WAIVER No wamver by Lessor or Lessee of any default or
breach of covenant or term of thas lease may be treated as a waaver
of any subsequent default or breach of the same or any other
covenant or term of thms Agreement
H INDEPENDENT CONTRACTOR Durang all times that thas Lease
as mn effect, the partaes agree that Lessee as and shall be deemed
to be an andependent contractor and operator and not an agent or
employee of the Lessor wath respect to thear acts or ommssmons
hereunder For all the purposes hereunder, Lessee ms and shall be
deemed an andependent contractor and at ms mutually agreed that
nothing contamned heremn shall be deemed or construed to constmtute
a partnershmp or ]omnt venture between the partaes
IN WITNESS WHEREOF, the partmes have executed this Agreement as
of the day and year fmrst above wratten
CITY OF DENTON, TEXAS, LESSOR
APPROVED AS TO LEGAL FORM
HERBERT L PROUTY, CITY ATTORNEY
CITY OF DENTON, TEXAS
BY c
or~e, LESSEE
Osborne L~a~e Agreement Page 17
THE STATE OF TEXAS §
COUNTY OF DENTON §
h~s,lnstrument was acknowledged before me on the /-~ day of
~ , 199~by LESSEE
NO~/~RY PUBLIC, STATE OF TEXAS
My Commission Expires ~.~. ~J_
ATTACHMENT "C"
/
/ ~
/
I '