1996-216
FILE REFERENCE FORM
96-216
Additional File Exists
Additional File Contains Records Not Public, According to the Public Records Act
Other
FILE(S) Date Initials
JR
First Amendment to Agreement – Ordinance 97-050 02/18/97
JR
Second Amendment to Agreement – Ordinance No. 99-372 10/05/99
JR
Assignment & Assumption Agreement – Ordinance No. 2000-290 09/05/00
JR
Collateral Transfer of Lease Agreement – Ordinance No. 2011-242 12/06/11
A \H£BRIG ORD NOTE First Amendment - Ordinance No 97-050
Second Amendment - Ordinance No 99-372
ORDINANCE NO. ~
AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE AN AGREEMENT
BETWEEN THE CITY OF DENTON AND NEBRIG & ASSOCIATES, INCORPORATED TO
LEASE CERTAIN PREMISES OF THE MUNICIPAL AIRPORT AND CONSTRUCT AND
MAINTAIN AN OFFICE, HANGAR, MAINTENANCE AND RELATED AVIATION
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
a lease agreement between the City of Denton, Texas and Nebrlg &
Associates, Inc to lease certain premises of the Municipal Airport
and construct and maintain an office, hangar, maintenance and
related aviation 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.
PASSED AND APPROVED this the~ day of~, 1996
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM:
HERBERT L. PROUTY, CITY ATTORNEY
AIRPORT LEASE AGREEMENT
THE STATE OF TEXAS §
KNOW ALL MEN BY THESE PRESENTS
COUNTY OF DENTON §
This lease agreement~ hereinafter referred to as "Lease" is made
and executed this /~ day of-.~_~, 1996, at Denton, Texas,
by and between the City of Denton, a Municipal Corporation,
hereinafter referred to as "Lessor", and Nebrlg & Associates, Inc ,
a Texas corporation, having its principal offices at 7515 Lemmon
Avenue, Dallas, Texas 75209, hereinafter referred to as "Lessee"
WITNESSETH
WHEREAS, Lessor now owns, controls and operates the Municipal
Airport (Airport) in the City of Denton, County of Denton, State of
Texas, and
WHEREAS, Lessee desires to lease certain premises on Airport
and construct and maintain an office, hangar, maintenance and
related aviation facilities thereon,
NOW, THEREFORE, in consideration of the premises 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 aeronauti-
cal activities for furnishing services to the public is granted the
Lessee sub3ect to Lessee agreeing
1 To furnish sa~d services on a fair, equal and not
unjustly discriminatory basis to all users thereof,
and
2 To charge fair, reasonable and not unjustly dis-
criminatory prices for each unit or service, pro-
vlded that the Lessee may be allowed to make rea-
sonable and nondiscriminatory discounts, rebates,
or other similar types of price reductions to
volume purchasers
B Non-Discrimination The Lessee, for itself, its 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 grounds of race, rellgzon, color,
sex, or national origin shall be excluded from
participation zn, denied the benefits of, or be
otherwise subjected to discrimInation in the use of
said facilities
2 In the construction of any improvements on, over,
or under such land and the furnishing of services
thereon, no person on the grounds of race, reli-
gion, color, sex, or national or,gin shall be
excluded from participation ~n, denied the benefits
of, or otherwise be subjected to discrimination
3 The Lessee shall use the premises in compliance
with all other requirements imposed by or pursuant
to Title 49, Code of Federal Regulations, Depart-
ment of Transportation, Subtitle A, Office of the
Secretary, Part 21, Non-discrimination in Federally
Assisted Programs of the Department of Transporta-
tion-Effectual of Title VI of the C~vll Rights Act
of 1964, and as said Regulations may be amended
In the event of breach of any of the above non-d~scrlmlnatory
covenants, and Lessee's failure to cure same within thirty (30)
days after receipt of written notice thereof, except this thirty
(30) day period shall be extended for a reasonable period of time
if the alleged breach is not reasonably capable of cure within such
thirty (30) day period and Lessee proceeds to diligently cure such
breach, Lessor shall have the right to terminate the Lease and to
reenter and repossess said land and the facilities thereon, and
hold the same as if said Lease had never been made or issued This
provision does not become effective until the procedures of 49 CFR
Part 21 are followed and completed, including expiration of appeal
rights
C Rzqht of Individuals to Maintain Aircraft It ls clearly
understood by the Lessee that no right or privilege has been
granted which would operate to prevent any person, f~rm, or
corporation operating aircraft on the a~rport 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 Section
Page 2
1349 of Tltle 43, U S C A
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 the
Lessee, and without interference or h~ndrance,
provided such further development or ~mprovement
does not prevent Lessee from reasonably utilizing
the premises and all appurtenances related thereto
as contemplated by the terms of this Lease
2 Lessor reserves unto itself, its successors and
asslgns, for the use and benefit of the flying
public, a right of flight for the passage of a~r-
craft above the surface of the premises described
here~n, together w~th the r~ght to cause in sa~d
airspace such no~se as may be inherent in the
operation of aircraft now known or hereafter used,
for navigation of or flight in the sa~d airspace,
and for use of sa~d a~rspace for landing on, taking
off from, or operating on the Airport
3 Lessor shall be obligated to maintain and keep in
repalr the landing area of the Airport and shall
have the right to d~rect and control all activities
of Lessee ~n this regard
4 During t~me of war or national emergency, Lessor
shall have the r~ght 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 th~s instrument ~nsofar
as they are inconsistent w~th the provisions of the
lease to the Government, shall be suspended
5 Lessor reserves the r~ght to take any action it
conslders necessary to protect the aerial approach-
es of the a~rport against obstruction, together
with the right to prevent Lessee from erecting, or
permitting to be erected, any building or other
structure on or adjacent to the Airport which, ~n
the oplnlon of the Lessor, would l~mlt the useful-
ness or safety of the airport or constitute a
hazard to aircraft or to aircraft navigation
6 This Lease shall be subordinate to the provisions
of any existing or future agreement between Lessor
and the Un~ted States or agency thereof, relative
to the operation or maintenance of the Airport
Page 3
II LEASED PREMISES
Lessor, for and in conslderataon of the covenants and
agreements herein contaaned to be kept by Lessee, does hereby
demise and lease unto Lessee, and Lessee does hereby lease and take
from Lessor, the following described land situated in Denton
County, Texas, as described as follows
A Land
1 A tract of land, beang approximately 65,688 square
feet, or 1 508 acres, as illustrated an Attachment
"A", as descrabed by metes and bounds in Attachment
"B", and as adent~faed as Parcel 1 of Lot 1, Block
1 of Attachment "C", all such attachments, and
Attachment "D" and "E" described below, are incor-
porated here~n by reference
(Include Survey)
Together wlth the right of angress and egress to
said property, and the right, an common wlth 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
lnvltees
For the purposes of th~s Lease, the term "Premises"
shall mean all property located wlthan the metes
and bounds described above, lncludang leasehold
~mprovements constructed by the Lessee, and the
rlght to the use (an common with other lessees of
the Airport) of all runways and taxlways wathan the
Airport, but not ancludlng certain easements or
property owned and/or controlled by the Lessor
2 Lessee shall have the option of extendang the terms
of thas lease to an additional one and one-half (1
1/2) acres of land or 65,340 square feet depacted
as Parcel 2 on Attachment "C" (and described by
metes and bounds in Attachment "D"), subject to the
division of th~s property into two separate 3/4
acre tracts The option on the 3/4 acre tract
closest to the A~rport's runway facal~t~es shall be
exercised no later than four (4) years from the
execution of th~s Lease If the option on the 3/4
acre tract above is timely exercased, then Lessee
shall have an addltaonal optaon on the remalnang
3/4 acre tract, and th~s optaon shall be exercised
Page 4
no later than eight (8) years from the execution of
this Lease
3 After the options have been timely exercised on the
two 3/4 acre tracts comprising Parcel 2 in Attach-
ment "C", Lessee shall have the option of extending
the terms of this lease to an additional 1 7 acres
of land or 74,052 square feet depicted as Parcel 3
on Attachment "C" (and described by metes and
bounds in Attachment "E"), if same is not under a
lease and remains unimproved at such time This
last option shall be exercised no later than twelve
(12) years from the execution of this lease
4 The 1 7 acre option tract outlined in Attachment
"C" as Parcel 3 may be leased by Lessor to other
than Lessee during the above twelve-year period,
provided that, and for so long as Lessee stays
lawful possession of the land denoted above
Attachment "C" as Parcel 1 and Parcel 2,1f appli-
cable, Lessee shall have a right of first refusal
on any lease negotiated by Lessor within part or
all of the tract of land outlined on Attachment "C"
as Parcel 3 In the event the Lessor shall receive
an offer to lease all or a portion of the 1 7
acres, Lessor shall deliver such written offer to
Lessee Lessee shall have the right, exercisable
wlthln thirty (30) days after receipt of such
written notice, to lease the 1 7 acres or portion
thereof, if applicable, upon the same terms and
conditions as set forth in such written offer In
the event the Lessee falls to deliver to Lessor Its
acceptance of such terms and conditions within such
thirty (30) day period, the Lessor shall be enti-
tled to lease the 1 7 acres pursuant to the terms
of such written offer
5 Lessee agrees that ~f Lessee falls to exercise the
option on the 1 7 acres outlined in Parcel 3 of
Attachment "C", or falls to utilize its right of
first refusal above, then the tenant ultimately
leasing such tract from Lessor will be allowed
uninterrupted access for ingress and egress of
airplanes to the taxlway constructed by Lessee
under this Lease without assessment of a pro-rata
charge or any charge against such tenant or opera-
tors of airplanes utilizing such tenant's property
Lessor agrees that Lessee may deny access to the
proposed taxlway Lessee constructs pursuant to this
Lease to the tenants, their lnvltees, and custom-
ers, of the property d~rectly across from Lessee's
Page 5
two one and one-half (1 1/2) acre tracts under this
Lease (Parcels 1 and 2 of Attachment "C") Howev-
er, Lessee shall provide access in the same manner
provided to the 1 7 acre tract tenant referenced
above if such tenants agree to pay to Lessee an
assessment for use of such taxlway in the amount of
50% of the certified costs (as mutually determined
by Lessee and Lessor after completion of taxlway
improvements and including interest on such costs)
of the construction of such taxlway adjacent to
such tenants' properties, based on a front footage
charge as used in City of Denton Street Paving
Projects If Lessee exercises its option on the
1 7 acres within twelve (12) years of the execution
of this Lease or leases same under its right of
first refusal, then Lessee may assess the tenant(s)
across from the 1 7 acres the applicable front
footage charge if such tenant(s) desire access to
the taxlway constructed by Lessee
6 The options, on the two 3/4 acre parcels, compris-
ing the 1 and 1/2 acres outlined in Attachment "C"
as Parcel 2 and on the 1 7 acres, if applicable,
outlined in Attachment "C" as Parcel 3, shall be
subject to the same terms and conditions contained
within this agreement as are applicable to the one
and one-half acres outlined in Attachment "C" as
Parcel 1, at the time the option(s) is exercised,
including, but not limited to land rental rates
as computed on a cents per square foot per year
basis, term of lease, consumer price index adjust-
ments already implemented, if any, and date of
commencement, as if said option were and had been
within Parcel 1 of Attachment "C" from the original
date of execution of th~s lease
B Improvements Provided By Lessor
1 Lessor agrees to provide, at Lessor's sole cost and
expense, the following public improvements
(a) construction of improvements to Westcourt
Road from its intersection with Airport
Road to the point in which the Premises
shall have access to Westcourt Road, and
(b) repair/replacement of entrance gate at
Westcourt Road providing access to the
Premises via a locked gate, key provided
to Lessees, Lessor to provide gate to be
open dally from 8 00 a m to 5 00 p m
Page 6
Monday through Friday
2 For the purposes of this Lease, the term "Lessor
improvements" shall mean those things on or ad~a-
cent to the Premises belonging to, constructed by,
or to be constructed by the Lessor, which enhance
or increase, or will enhance or increase, the value
or quality of the Premises Unless otherwise noted
herein, all Lessor improvements are and will remain
the property of the Lessor All Lessor improve-
ments must be described in detail above, or above
referenced and attached to this Lease ~n an exhibit
approved by the Lessor
C Public Improvements Provided by Lessee Lessee agrees to
provide, at Lessee's sole cost and expense, the following public
improvements
1 utlllty services ~ncludlng, without limitation,
water, gas, electricity, and telephone sufficient
to service Lessee's business wlthmn the Premmses to
be constructed from the boundary of Parcel 3 lden-
tlfmed in Attachment "C" closest to Westcourt Road
to the Premises, and
2 Constructzon of taxlway from the Premises to the
Airport taxlway
The consideration for the construction of these public
improvements is the reduction in the rental under this Lease from
fzfteen cents ($0 15) per square foot to five ($0 05) cents per
square foot for the first three (3) years
III TERM
The term of this Lease shall be a period of thirty (30) years,
commencing on date upon which all of the Contlngencmes (as defined
in Section XVI(K) below) have been satisfied or waived in wrltmng
by Lessee, and endzng at midnight on the last day of the 30th year
of the term of this Lease, unless earlier terminated under the
provisions of the Lease Lessee shall have the option to extend
the term of this Lease for an additional period of ten (10) years
upon the same terms and conditions as set forth in this Lease
Should Lessee elect to exercise ~ts optzon to extend the term of
this Lease, Lessee shall give written notice of its intention to
Lessor not less than one hundred eighty (180) days before the
expiration of the ~nltmal term of thirty (30) years At the end of
the initial ten (10) year extension, Lessee shall have the option
to extend the term of this Lease for an additional ten (10) year
term upon the same terms and conditions as set forth in this Lease
Should Lessee elect to exercise its option to extend the term of
Page 7
this Lease, Lessee shall give written notice of its intent to
Lessor not less than one hundred eighty (180) days before the
initial ten (10) year extension due to expire
IV PAYMENTS, RENTALS AND FEES
Lessee covenants and agrees to pay to Lessor, as consideration
for this Lease, payments, rentals and fees as follows
A Rent Lessee shall pay to the Lessor for the use and
occupancy of the Premises the sum of five cents ($0 05) per square
foot per year for the first three (3) years of the Lease (to
compensate Lessee for taxlway to be constructed), for a total of
Three Thousand Two Hundred Sixty Seven Dollars ($3,267) per year,
to be paid in twelve (12) equal monthly installments in the sum of
Two Hundred Seventy-two Dollars and Twenty-five Cents ($272 25) per
month in advance, with the first installment being due on or before
the first day of the month following the execution of this Lease
For years four (4) through thirty (30) of this Lease, the rental
will be fifteen cents ($0 15) per square foot per year The rental
for years two (2) through thirty (30) of initial Lease and for the
two ten (10) year renewal periods will be adjusted annually based
on the consumer price index criteria in Section IV E
B Lessor ImDrovement Rentals The Lessor improvement
rentals or fees are described as follows None
C Additional Fees And Rentals No additional fees will be
charged for use of the premises
D Payment, Penalty, Adlustments All payments made
hereunder by Lessee shall be made to Lessor at the offices of the
Finance Department of the City of Denton, Accounts Receivable, 215
E McKlnney, Denton, Texas 76201, unless Lessee is notified to the
contrary in writing by Lessor
All monthly rental payments shall be due and payable on or
before the first day of each month and shall be paid by Lessee
without demand or notice from Lessor All rental amounts paid by
Lessee after the tenth (10) day of the month will be delinquent and
shall include an additional monetary amount (penalty) which shall
equal five percent (5%) of the rental amount due Failure of
Lessee to pay the five percent (5%) monetary penalty on delinquent
rent shall constitute an event of default of this Lease
E CPI
1 The yearly rental for land and improvements herein
leased shall be readjusted at the end of each year
period during the term of this Lease on the basis
of the proportion that the then current United
Page 8
States Consumer Price Index 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 bears to the
October, 1996, index Each rental adjustment, If
any, shall occur on the 13th day of December,
beginning 1997, and every year thereafter on such
date
2 The adjustments ~n the yearly rent shall be deter-
mined by multiplying the minimum yearly rent as set
forth in Section IV A by a fraction, the numerator
of which ls the ~ndex number for the last month
prlor to the adjustment, and the denominator of
which is the ~ndex number for October. 1996 If
the product of this multiplication ~s greater than
the m~nlmum yearly rent as set forth ~n Section
IV A , Lessee shall pay th~s greater amount as the
yearly rent until the time of the next rental
adjustment as called for ~n this section If the
product of this multiplication ~s less than the
minimum yearly rent of as set forth in Section
IV A , there shall be no adjustment In the annual
rent at that t~me, and Lessee shall pay the minimum
yearly rent as set forth in Section IV A , until
the t~me of the next rental adjustment as called
for ~n th~s section In no event shall any rental
adjustment called for ~n this section result in an
annual rent less than the m~n~mum yearly rent of as
set forth in Section IV A The adjustment shall be
l~mlted so that the annual rental payment deter-
m~ned for any given year shall not exceed the
annual rental payment calculated for the previous
year by more than ten percent (10%)
3 If the consumer price index 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 discontinued
during the term of th~s lease, the remaining rental
adjustments called for ~n this section shall be
made using the formula set forth above, but sub-
st~tutlng the index numbers for the Consumer Price
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 applicable to the Dallas-Fort
Worth geographical region If both the CPI-U for
the Dallas-Fort Worth ~eographlcal region and the
U S Clty Average are dlscont~nued during the term
of th~s lease, the remaining rental ad3ustments
called for in th~s section shall be made using the
Page 9
statistics of the Bureau of Labor Statistics of the
United States Department of Labor that are most
nearly comparable to the CPI-U applicable to the
Dallas-Fort Worth geographical region If the
Bureau of Labor Statistics of the United States
Department of Labor ceases to ex~st or ceases to
publish statistics concernIng the purchasing power
of the consumer dollar during the term of this
lease, the rema~nlng rental adjustments called for
in thls 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 prlvllege to engage in or provide the following
1 sale of a~rplanes, ~ncludlng maintenance of air-
planes of lessee and its tenants,
2 hangar, wlth office and maintenance shop,
3 sale of fuel, ~ncludlng Jet A and Av Fuel
(a) Sale of fuel to be provided via skid tanks or
fuel trucks and for the express use of Lessee
and Lessee's tenants Fuel purchased by
Lessee from a non-Fixed Base Operator shall be
assessed a fuel fee of five cents ($0 05) per
gallon Sale of fuel from skid tanks and
purchase of fuel from wholesaler to be discon-
tinued after Lessor's fuel farm is relocated
and becomes operational Lessee may purchase
fuel from Lessor's fuel farm under the same
terms and conditions mentioned above
(b) Fuel fees shall be paid monthly to Lessor on
the 15th day of each month during the term of
th~s Lease Lessee shall keep and maintain
accurate records of fuel purchases, fuel
sales, fuel delIveries, fuel disbursements,
and fuel inventories (fuel records) under th~s
agreement for a period of three (3) years from
the date the record is made Such records
shall be kept according to generally accepted
accounting principles Lessor, or ~ts duly
authorized representatives, shall have the
right at all reasonable times during business
hours to inspect the books, fuel records, and
receipts of Lessee, including examination of
Page 10
the general ledger and all other supporting
material, for the purpose of verification
(c) Lessee agrees that all fuel fees are due and
payable and shall be paid by Lessee without
demand or notice in writing from Lessor
Lessee shall provade Lessor a breakdown of the
fee payments monthly All fees paad by Lessee
and receaved by Lessor after more than fafteen
(15) days after the due date shall automata-
cally accrue and anclude an addataonal mone-
tary amount (penalty) equal to fave percent
(5%) of the fuel fee amount due At any time
after any fee becomes due, the Lessor may
notafy Lessee in writing of the delinquency
Faalure to pay fuel fees wath accrued penal-
taes wathan seven (7) days of receipt of such
notace wall constatute a default under the
Lease Fuel fees shall be paad to the same
address to whach rental fees are payable
(d) Wathan fafteen (15) days after the end of each
month, Lessee shall furnash to Lessor a certl-
faed statement of fuel records duranG the
precedang month If an audat establishes the
Lessee has understated fuel sales by five
percent (5%) or more, the entare expense of
saad audat shall be borne by Lessee Any
addatlonal payment due from Lessee shall
forthwath be paad to Lessor, w~th interest
thereon at one percent (1%) per month from the
date such amount oraganally became payable to
Lessor Any overpayment by Lessee shall be
credated aGaanst future payments due to
Lessor
(e) Lessee, ats tenants and sublessees shall not
be authorized to conduct any servaces not
specafacally listed in this agreement The
use of the Premises of Lessee, its tenants or
sublessees shall be limited to only those
pravate, commercaal, retaal or andustrlal
actavltaes having to do with or related to
aarports and avaatlon In connectaon wath all
permitted uses of the Premises provided by the
terms of this Lease, Lessor agrees to issue or
cause to be issued to Lessee any and all
applacable permlts or lacenses necessary for
Lessee to conduct the business operations as
contemplated in the terms of thas Lease,
provaded Lessee complies with all applicable
Page 11
codes and ordinances No person, business or
corporation may operate a commercial, retail
or industrial business upon the premises of
Lessee or upon the Airport without a lease or
license from Lessor authorizing such commer-
cial, retail or industrial activity
B Independent Contractor During all times that this Lease
zs in effect, the parties agree that Lessee is and shall be deemed
to be an independent contractor and operator and not an agent or
employee of the Lessor with respect to their acts or omissions
hereunder For all the purposes hereunder, Lessee is and shall be
deemed an independent contractor and it ~s mutually agreed that
nothing contalned hereln shall be deemed or construed to constitute
a partnership or joint venture between the parties hereto
C Standards Lessee shall meet or exceed the following
standards
1 Address, Lessee shall file w~th the Airport Manag-
er, or authorized City representative, hereinafter
referred to as "A~rport Manager" and keep current
its mailing address, telephone number(s) and con-
tacts where ~ts authorized official can be reached
in an emergency
2 List, Lessee shall file with the Airport Manager
and keep current a list of its tenants and subles-
sees
3 Conduct Lessee shall contractually require its
employers and sublessees (and sublessee's lnvltees)
to abide by the terms of thzs Lease Lessee shall
promptly enforce its contractual rights in the
event of a default of such covenants
4 Utllztles, Taxes and Fees Lessee shall meet all
expenses and payments in connection with the use
and occupancy of the Premises and the rights and
privileges herein granted, including the t~mely
payments of utilities, taxes, permit fees, lzcense
fees and assessments lawfully levied or assessed
Lessee here~n agrees to pay to all lawful taxing
authorities an ad valorem property tax on all
improvements constructed by the Lessee on the
Premises, and to comply with all tax laws pertain-
lng to the Premises, zncludlng those promulgated ~n
the future Lessee may initiate or prosecute any
proceedings permitted by law for obtaining an
abatement, reduction or withdrawal, or otherwzse
contesting the validity or amount, or any taxes for
Page 12
which Lessee is alleged to be responsible Lessee
shall ~ndemnzfy and save Lessor from and agalnst
all loss, cost, damage and expense as a result of
any such proceedzng
5 Rules, Reaulatlons and Restrictions Lessee shall
comply w~th all federal, state and local laws and
rules and regulations which may apply to the con-
duct of bus~ness contemplated, including rules,
regulatzons and ordinances promulgated by Lessor,
and Lessee shall keep ~n effect and post in a
prominent place all necessary and required lacenses
or permits
Lessee's use of the Premises shall at all tzmes be
in complzance wzth and sub3ect to any covenants,
restrictions, and condztlons of record pertalnzng
to the use and occupancy of the Premises and shall
at all tames comply wzth the laws, codes, ordinanc-
es, rules, and regulataons, e~ther exastlng or
those promulgated ~n the future, by the C~ty of
Denton, the County of Denton, the State of Texas,
the United States of America, and the Federal
Aviation Administration, or their successors
Lessee shall not operate or permzt the operatzon of
any transmztter devices, electrical s~gnal produc-
ers, or machinery on the Premises which could
anterfere wath the electronac aarcraft navagatlon
azds or devzces located on or off Azrport property
Lessee shall not be permitted to engage ~n any
busaness or operation on the Premises which would
produce obstructlons to the Vzslbll~ty or vzolate
height restractzons as set forth by the Federal
Aviation Admlnzstratlon and/or the C~ty of Denton
6 Helqht Restriction And Airspace Protection The
Lessee agrees for itself, and zts successors and
assagns, to restrict the height of structures,
ob3ects of natural growth and other obstructions on
the Premases to a height as establashed an C~ty of
Denton Ordinance 81-1, as the same may be amended
from time to t~me The Lessee also agrees for
itself, and ~ts successors and assigns, to prevent
any use of the Premises whzch would ~nterfere wath
landzng or takang off of aircraft at the Denton
Munzclpal Aarport, or otherwise constitute an
aarport hazard Lessee hereby forfeits all claims
to aviation r~ghts over the Premises
7 Maintenance Lessee shall be responsible for all
mazntenance and repair of the premises, zncludlng
Page 13
buildings, structures, grounds, pavements, and
utilities Lessee shall be responsible for grass
cutting, collection and removal of trash and for
such other maintenance requirements as may arise
Lessee agrees to keep the Premises, together with
all improvements, in a safe, clean and attractive
condition at all times Lessee shall not change the
original color or texture of the exterior walls of
any structure or improvements without the written
consent from Lessor, such consent to not be unrea-
sonably withheld or delayed
(a) Painting of Buildings During the original
term of this Lease and during each extension,
Lessor shall have the right to require, not
more than once every five years, that the
metal exterior of hangar(s) or building(s)
located on the premises be reviewed by the
Airport Advisory Board for the purpose of
determining whether painting of the exteriors
of such buildings or hangars is necessary If
the Airport Advisory Board determines painting
is necessary, it shall furnish a recommenda-
tion to this effect to the City Council The
Council, may, upon the Board's recommendation,
require Lessee to repaint said exteriors
accordinG to Lessor's specifications (to
specify color of paint, quality of workmanship
and the year and month in which the hangar(s)
or building(s) are to be painted, if needed)
Lessee shall complete the paintinG in accor-
dance with such specifications within slx (6)
months of receipt of notice from Lessor
Lessee agrees to pay all costs and expense
involved in the hangar or buildinG painting
process Failure of Lessee to complete the
paintinG required by Lessor's City Council
within the slx (6) month period shall consti-
tute Lessee's default under this Lease
(b) Storage Lessee herein agrees not to utilize
or permit others to utilize areas on the
Premises which are located on the outside of
the hangar(s) and/or building(s) for the
storage of wrecked or permanently disabled
aircraft, aircraft parts, automobiles, vehi-
cles of any type, or any other equipment or
items which would distract from the appearance
of the Premises
8 Unauthorized Use of Premises Lessee may not use
Page 14
any portion of the Premises for the operation of a
motel, hotel, restaurant, private club or bar,
apartment house, or for ~ndustr~al, commercial or
retail purposes, except as authorized herein
9 Dwellings It ~s expressly understood and agreed
that no permanent dwelling or domicile may be
built, moved to or established on or wlthln the
Premises nor may Lessee, its tenants, lnvltees, or
guests be permitted to reside or remain as a res~-
dent on or within the Premises or other airport
premises
10 Quit Possesslon Lessee shall quit possession of
the Premlses at the end of the primary term of this
Lease or any renewal or extension thereof, and
deliver up the Premises to Lessor ~n as good condi-
tion as existed when possession was taken by Les-
see, reasonable wear and tear excepted
11 Chemicals Lessee agrees to store properly, col-
lect and dlspose of all chemicals and chemical
residues, to store properly, confine, collect and
d~spose of all paint, ~ncludlng paint spray ~n the
atmosphere, and palnt products, and to comply w~th
all local, state and federal laws and regulations
governing the storage, handling or disposal of such
chemicals and paints Lessee further agrees that
at no time during the term of this Lease shall any
material, fluids, sol,ds or gaseous substances
(except aircraft fuel utilized by the Lessee as
provided here~n) be utilized, stored, disposed of
or transported on the Premises which are considered
by the Environmental Protection Agency to be a
hazard to the health of the general public and that
no activity shall be permitted on the Premises that
would produce noxious odors
12 Siena During the term of this Lease, Lessee shall
have the right, at its own expense, to place ~n or
on the Premises s~gns identifying Lessee Said
signs shall be of a size, shape and design, and at
a location or locations, reasonably approved by the
Lessor and ~n conformance w~th any overall direc-
tional graphlcs or s~gn program established by
Lessor on the Airport Lessor's approval shall not
be unreasonably withheld Said s~gns shall be
maintained ~n good repair throughout the term of
th~s Lease Notwithstanding any other provision of
this Lease, said s~gns shall remain the property of
Lessee Lessee shall remove, at ~ts expense, all
Page 15
lettering, signs and placards so erected on the
premmses at the expiration of the term of this
Lease or extensions thereof
D Should Lessee vmolate any law, rule, restrlctmon or
regulation of the City of Denton or the Federal Avmatmon Admmnms-
tratlon, or should the Lessee engage mn or permmt other persons or
agents to engage mn actlvmtles which could produce hazards or ob-
structions to amr navigation, obstructions to visibility or inter-
ference with any aircraft navigational aid station or device,
emther airborne or on the ground, then Lessor shall state such vmo-
latlon in writing and deliver wrmtten notice to Lessee or Lessee's
agent on the Premises, or to the person(s) on the Premmses who are
causmng said violation(s), and upon delmvery of such wrmtten
notice, Lessor shall have the right to demand that the person(s)
responsible for the violation(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 Premises into conformance wmth
the particular law, rule or aeronautical regulation being violated
Should Lessee, Lessee's agent, or the person(s) responsible for the
vmolat~on{s) fall to cease and desist from samd vmolatmon(s) and to
lmmedmately commence correctmng the v~olatlon(s), and to complete
said corrections within twenty-four (24) hours following wrmtten
notification, then Lessor shall have the right to enter on to the
Premmses and correct the violation(s), and Lessor shall not be
responsible for any damages incurred to any improvements on the
Premises as a result of the corrective action process Lessor
shall submit an invoice to Lessee for the cost of the repamrs and
Lessee shall pay said ~nvolce within thirty (30) days
VI COVENANTS BY LESSOR
Lessor hereby agrees as follows
A Peaceful Enlovment 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 Premises and all r~ghts and privileges here~n granted
B Compliance Lessor warrants and represents that mn the
establishment, construction and operation of the Airport, that Les-
sor has heretofore and at this t~me is complying wmth all existing
rules, regulations, and criteria distributed by the Federal
Avmatlon Administration, or any other governmental authormty
relatmng to and including, but not limited to, no~se abatement, air
rmghts and easements over ad]olnmng and contmguous areas, over-
flmght mn landing or takeoff, to the end that Lessee wmll not be
legally liable for any action of trespass or similar cause of
action by vmrtue of any aerial operations over adjoining property
in the course of normal takeoff and landing procedures from the
Amrport Lessor further warrants and represents that at all times
Page 16
durzn9 the term hereof, or any renewal or extenszon of same, that
it will contanue to comply wath the foregoang
VII SPECIAL CONDITIONS
It as expressly understood and agreed by and between Lessor
and Lessee that thas Lease as subject to the followang specaal
terms and conditions
A Runways and Taxawavs That because of the present 60,000
pound contanuous use weaght bearing capacity of the runway and
taxaways of the Aarport, Lessee herein agrees to llmat all
aeronautacal actlvaty ancludang landing, takeoff and taxiing, to
aircraft havang an actual weaght, ancludang the weaght of zts fuel,
of 60,000 pounds or less, untal such tame that the runway and
deszgnated taxaways on the Aarport have been zmproved to handle
aircraft of such excesszve wezghts It is further agreed that,
based on quallfaed enganeerlng studzes, the wezght restrzctaons and
provasaons of this clause may be adjusted, up or down, and that the
Lessee agrees to abide by any such changes or revisions as such
studies may dictate "Aeronautical Activity" referred to in this
clause shall anclude that actavaty of the Lessee or ars agents or
subcontractors, and ars customers and anvatees, but shall not
include those actavataes over whach it has no sollcatlng part of
control, such as an unsollcated or unscheduled or emergency
landzng A pattern of neglagent disregard of the provisions of
thzs sectzon shall be sufflczent to cause the zmmedlate termlnatzon
of thas entare agreement and subject Lessee to laabalaty for any
damages to the Aarport that might result
VIII LEASEHOLD IMPROVEMENTS
A Reauared Improvements As part of the conszderatlon for
the pravalege herean granted, Lessee zs requared to and hereby
agrees to construct or otherwise make zmprovements to the premases,
as speczfzed herein, but not lamlted to, the following
The constructaon of an offzce and hangar facility for storage
and maantenance of azrcraft
Lessee shall provade Lessor wzth tentatave plans for the
development of the entire Premises together wath a proposed
tzmetable or schedule for sazd development
1 Plans, Lessee agrees that it shall, wlthzn one
hundred eaghty (180) calendar days from the date of
thas Lease, submit to Lessor for approval detailed
plans and speczflcataons for the above-listed
anltaal proposed leasehold zmprovements Lessor
agrees that at shall ezther approve the plans and
specifications as submatted, or transmat proposed
Page 17
revisions to Lessee within forty-five (45) calendar
days of receipt of the plans and specifications
from Lessee In the event that Lessor requires
revisions of the original plans and specifications,
Lessee shall have forty-five (45) calendar days
from the date of receipt of the proposed revisions
to resubmit the plans and specifications for Les-
sor's approval Lessee shall commence construction
within forty-five (45) calendar days of Lessee's
receipt of Lessor's final approval of the plans and
specifications, hereinafter referred to as "Ap-
proval Date") and the improvements shall be sched-
uled for completion not later than two hundred
seventy (270) days after commencement of construc-
tion
2 Additional Requirements Before commencing the
construction of any improvements upon the Premises,
Lessee shall submit
(a) Documentation, specifications, or design work, to
be approved by the Lessor, which shall establish
that the improvements to be built or constructed
upon the Premises are in conformance with the
overall size, shape, color, quality and design, ~n
appearance and structure, of the program estab-
lished by the Lessor's Master Plan for the Airport
The Master Plan shall be approved by the Lessor and
copies shall be on file at the Office of the Air-
port Manager and the City Secretary
(b) All information required by the City of Denton
Subdivision and Land Development Regulations an
outline of such requirements is on file in the
Planning Department of Lessor
(c) The estimated cost of such construction
No constructIon may commence until Lessor 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 Lessor shall not be
unreasonably withheld Should the Lessor fall to deny Lessee's
plans and specifications wlthln sixty days of submission thereof to
the Lessor, such plans and specifIcations shall be deemed approved
B Additional Construction or Improvements Lessee is hereby
authorized to construct upon the land herein leased, at its own
cost and expense, buildings, hangars, and structures, that Lessor
and Lessee mutually agree are necessary for use in connection with
the operations authorized by this Lease, provided however, before
Page 18
commencing the construction of any improvements upon the premises,
Lessee shall submit plans and specifications as specified in
Article VIII, Paragraph 2 (Additional Requirements)
C Ownership of Improvements All buildings and improvements
constructed upon the Premises by Lessee shall remain the property
of Lessee, unless said property becomes the property of Lessor
under the following conditions, terms, and provisions
1 Removal of Hanqars and/or Buildings In the event
that Lessee should elect to terminate this Lease
pursuant to Article XV and remove the building or
hangar from the Premises, then in such event,
Lessee herein agrees to comply with the following
terms and conditions during the hangar or building
removal process
(a) Prior to commencing the hangar or building
removal process, the Lessee and Lessor shall
agree on the best method to remove the build-
lng, including where to cut water lines,
electrical wire, plumbing and other fixtures
or utilities, so as to cut said fixtures to
allow the future use of these fixtures
(b) The building shall be removed completely from
the surface of the concrete slab and up, w~th
the exception of cut utility lines All
interior fixtures shall be removed including
sinks, commodes, dividing walls and all other
items or fixtures that would prevent the
concrete slab from being as free as possible
from all obstructions
(c) Removal of hangars or buildings shall be
completed prior to Lessee's designated termi-
nation date
(d) The hangar or building slab, the aircraft
parking apron, the taxlway, and all the im-
provements on the Premises shall remain on the
Premises and shall become the property of the
Lessor without costs to Lessor
(e) Lessee shall be responsible for the removal of
all refuse and debris from the Premises prior
to vacating the Premises
(f) Lessee shall be responsible for all costs
involved in the removal of the hangar or
building, including costs of permits or fees
Page 19
(g) Lessee shall be responsible for any damage
caused to any improvements on the Premises
during the bulldlng or hangar removal process,
and Lessee herezn agrees to repair or replace,
at Lessee's expense, any zmprovement(s) dam-
aged by Lessee during the removal of sa~d
structures
2 AssumDtzon All buzldlngs and ~mprovements of
whatever nature remaining upon the Premises at the
end of the primary term, or any extension thereof,
of this Lease shall automatzcally become the prop-
erty of Lessor absolutely in fee w~thout any cost
to Lessor
3 Bulldln~ L~fe It ~s agreed that the l~fe of any
building to be constructed by Lessee on the Premis-
es is twenty-five (25) years
IX SUBROGATION OF MORTGAGEE
Lessee shall have the r~ght to place a first mortgage l~en
upon its leasehold ~n an amount not to exceed eighty-five percent
(85%) of the cost of the capital improvements
Lender's duties and rights are as follows
1 The Lender shall have the rzght, ~n case of de-
fault, to assume the rzghts and obllgatzons of
Lessee herein and become a substituted Lessee, with
the further right to assign the Lessee's interest
to a third party, subject to approval of the Les-
sor, such approval to not be unreasonably w~thheld
or delayed Lender's obligations under th~s Lease
as substituted Lessee shall cease upon assignment
to a third party and approval by the Lessor
2 As a condition precedent to the exercise of the
right granted to Lender by th~s paragraph, Lender
shall notify the Lessor of all action taken by ~t
zn the event payments on such loans shall become
delinquent Lender shall also notify the Lessor,
in writing, of any change in the ~dentlty or ad-
dress of the Lender
3 All notices of default, as well as all notices
requzred by Article XIV here~n (Cancellatzon by
Lessor) to be given by the Lessor to Lessee shall
also be given by the Lessor to Lender at the same
tzme and in the same manner, provided the Lessor
has been furnished wzth written notice of Lender's
Page 20
interest and its address Such notice shall be
g~ven to the C~ty Secretary and the Airport Manag-
er Upon recezpt of such not~ce, Lender shall have
the same rights as Lessee to correct any default
4 The Letter of Understand~nq executed by Lender and
Lessee, which is attached hereto, is hereby incor-
porated here~n by reference
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 pro-
riding utllzty servlces to, from or across the A~rport or for the
construction of public facllltles on the A~rport However, any
such easements shall not ~nterfere wzth Lessee's use of the Pre-
m~ses and Lessor shall restore the property to its original con-
dzt~on upon the lnstallatzon of any utility services on, ~n, over
or under any such easement at the conclusion of such construction
Lessee shall not have the r~ght to levy fees or charges for any
exercised rzght of easement by Lessor or Lessor's authorized agent
XI SUBLETTING AND ASSIGNMENT OF LEASE
A The Lessee may rent or sublease the Premises for the
storage of lndlvldual aircraft without prior written consent of the
Lessor, but Lessee shall not rent or sublease all or any part of
the Premises or the ~mprovements located thereon for any other
purpose without the prlor written consent of the Lessor, such
consent to not be unreasonably w~thheld or delayed Any tenant or
sublessee shall be subject to the same conditions, obligations and
terms a set forth herein Lessee shall be responszble for the
observance by its tenants and sublessees of the terms and covenants
of thzs Lease It is the lntentlon of the C~ty that the subleases
not be misused as a method to avoid compliance with the minimum
standards herein
In the event that the Lessor determines that a sublease
operatzng an aviation-related buszness wzthout complying with the
minimum standards applicable thereto, the sublease may be terminat-
ed in the same manner as provlded by Artzcle XIV herein for leases
B Lessee expressly covenants that it w~ll not assign this
Lease, convey more than forty-nlne percent (49%) of the interest in
· ts buslness, deemed herein to mean the controllzng interest
buszness, through the sale of stock or otherwzse, nor sublet,
assign, transfer, nor l~cense the whole or any part of the said
Premises for any purpose, except for rental of hangar space or tie-
down space, w~thout the wrltten consent of the Lessor Lessor
agrees that it will not unreasonably withhold its approval of the
sale or sublease of the facilities for a~rport related purposes
Page 21
The provisions of this Lease shall remain binding upon the
assignees, if any, or Lessee
XII INSURANCE
A Lessee shall maintain continuously in effect at all times
during the term of this Lease or any extension thereof, at Lessee's
expense, the following insurance coverages
1 Comprehensive General Liability Insurance covering
the Premises, the Lessee, 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 Lease or erected by the Lessee subse-
quent to the execution of this Lease
4 Liability insurance limits shall be in the follow-
lng minimum amounts
Bodily Injury and Property Damage
$1,000,000 combined single limits on a per occur-
rence basis
5 All policies shall name the Lessor as an additional
named insured 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
policies
6 All policies must be approved by the Lessor
7 The Lessor shall be provided with a copy of all
such policies
B Durzng the original or extended term of this Lease, Lessor
herein reserves the right to adjust or increase the liability
insurance amounts required of the Lessee, and to require any
additional rzder, 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 similar to the Airport in size and in scope of
aviation activities, located in the Southwestern region of the
United States For the purpose of this Lease, the Southwestern
region of the United States shall be the states classified as the
Page 22
Southwestern region by the Federal Aviation Administration
C Lessee herein agrees to comply with all increased or
adjusted Insurance requirements that may be required by the Lessor
throughout the original or extended term of this Lease, including
types of insurance and monetary amounts or limits of insurance, and
to comply with said insurance requirements within sixty (60) days
following receipt of a notice in writing from Lessor stating the
increased or ad3usted insurance requirements Lessee shall have
the right to maintain in force types of insurance and amounts of
insurance which exceed Lessor's minimum insurance requirements
D 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 or America, then in such event, Lessor shall have
the right to require that Lessee maintain in force types of
· nsurance and/or amount of insurance as specified by State Law
XIII. INDEMNITY
A. Lessee agrees to indemnify and hold harmless Lessor and
Kts agents, employees, and representatives from and against all
liability for any and all claims, suits, demands, and/or actions
arising from or based upon intentional or neglKgent acts or
omissions on the part of Lessee, its agents, representatives,
employees, members, patrons, visitors, contractors and subcontrac-
tors, if any, and/or sublessees, which may arise out of or result
from Lessee's occupancy or use of the Premises and/or activities
conducted in connection with or incidental to this Lease.
B. This Indemnity Provision extends to any and all such
claims, suits, demands, and/or actions regardless of the type of
relief sought thereby, and whether such relief Ks in the form of
damages, judgments, and costs and reasonable attorney's fees and
expenses, or any other legal or equitable form of remedy. This
Indemnity Provision shall apply regardless of the nature of the
injury or harm alleged, whether for injury or death to persons or
damage to property, and whether such claims be alleged at common
law, or statutory or constitutional claims, or otherwise. This
Indemnity Provision shall apply whether the basks for the claim,
suit, demand, and/or action may be attributable in whole or in part
to the Lessee, or to any of its agents, representatives, employees,
members, patrons, visitors, contractors, and subcontractors, if
any, and/or sublessees, or to anyone directly or indirectly
employed by any of them.
C. Further, Lessor assumes no responsibility or liability for
harm, injury, or any damaging events which are dKrectly or
Kndirectly attributable to premise defects or conditions which may
now exist or which may hereafter arise upon the Premises, any and
Page 23
all such defects being expressly waived by Lessee. Lessee
understands and agrees that this Indemnity Provision shall apply to
any and all claims, suits, demands, and/or actions based upon or
arising from any such claim asserted by or on behalf of Lessee or
any of its members, patrons, visitors, agents, employees, contrac-
tors and subcontractors, if any, and/or sublessees
D. It is expressly understood and agreed that the Lessor
shall not be liable or responsible for the negligence of Lessee
and/or sublessees, its agents, servants, employees and customers.
Lessee further agrees that it shall at all times exercise reason-
able precautions for the safety of, and shall be solely responsible
for the safety of its agents, representatives, employees, members,
patrons, visitors, contractors and subcontractors, if any, and/or
sublessees, and other persons, as well as for the protection of
supplies and equipment and the property of Lessee or other persons.
E. Lessor and Lessee each agree to gave the other party
prompt and timely notice of any such claim made or suit instituted
which in any way, directly or indirectly, contingently or other-
wise, affects or might affect the Lessee or the Lessor. Lessee
further agrees that this Indemnity Provision shall be considered as
an additional remedy to Lessor and not an exclusive remedy.
XIV CANCELLATION BY LESSOR
Ail the terms, restrictions, covenants and conditIons of
record pertaining to the use and occupancy of the Premises are
conditions of this Lease and failure of the Lessee to comply with
any of the terms, conditIons, restrictions, covenants and condi-
tions of record shall be considered a default of this Lease, and
upon default, the Lessor shall have the right to invoke any one or
all of the following remedies
A Should Lessee fall to pay the monthly rental amounts
and/or fees prescribed in Article IV hereof, such failure shall
constitute a default of thms Lease, and Lessor may give written
notice to Lessee of Lessee's failure to pay and demand payment in
accordance with the Lease terms Should Lessee fall to pay the
monthly rental amount within twenty (20) days following receipt of
written notice from Lessor, then Lessor may terminate this Lease
B In the event that Lessee falls to comply with any other
terms, conditions, restrictions and covenants pertaining to this
Lease Agreement then in such event, Lessor shall give Lessee not~ce
of said breach, and request Lessee to cure or correct the same
Should Lessee fall to correct sa~d violation(s) or breach within
thirty (30) days following receipt of sa~d notice, except that this
thirty (30) day period shall be extended for a reasonable period of
time if the alleged default is not reasonably capable of cure
within said thirty (30) day period and Lessee proceeds to diligent-
Page 24
ly cure the default, then Lessor shall have the right to terminate
this Lease
C In addition to termination of this Lease for the breach of
terms and conditions herein, the Lessor shall have the right to
terminate this Lease for the following reason(s)
1 The Lease has reached the termination date of the
original thirty (30) year term or any extended term
thereof
2 In the event that Lessee shall f~le a voluntary
petition in bankruptcy or proceedings ~n bankruptcy
shall be instituted against Lessee and Lessee
thereafter is adjudicated bankrupt pursuant to such
proceedings, or any court shall take jurisdiction
of Lessee and its assets pursuant to proceedings
brought under the provisions of any federal reorga-
nization act, or if a receiver shall take juris-
diction of Lessee and its assets pursuant to pro-
ceedlngs brought under the provisions of any feder-
al reorganization act, or if a receiver for Les-
see's assets is appointed
3 In the event that Lessee should make an assignment
of this Lease, for any reason, without the approval
of and written consent from Lessor
Upon termination or cancellation of this Lease and provided
all monies due Lessor have been paid, Lessee shall have the right
to remove its personal property, provided such removal does not
cause damage to any part of the hangar, structure or improvements
D The Lessor shall have a lien as security for the rent
aforesaid upon all goods, wares, chattels, implements, fixtures,
furniture, tools, and other personal property which are or may be
put or caused to be put on the premises by Lessee
E Upon termination of this Lease, Lessee shall remove all
personal property from the Premises w~thln thirty (30) days after
said termination If Lessee fails to remove its personal property
as agreed, City may elect to retain possession of such property or
may sell the same and keep the proceeds, or may have such property
removed at the expense of Lessee
F If Lessor has exercised ~ts option to take title to fixed
improvements as provided, Lessee shall repair, at its own expense,
any damage resulting from said removal of personal property and
shall leave the leased premises in a neat and clean condition with
all other ~mprovements in place
Page 25
G Failure of City to declare this Lease terminated upon the
default of Lessee for any of the reasons set out shall not operate
to bar, destroy or waive the r~ght of C~ty to cancel th~s Lease by
reason of any subsequent violation of the terms hereof The
acceptance of rentals and fees by City for any per~od or per~ods
after a default of any of the terms, covenants, and conditions
herein contained to be performed, kept and observed by Lessee shall
not be deemed a waiver of any rights on the part of the City to
cancel this Agreement for fallure by Lessee to so perform, keep or
observe any of the terms, covenants and conditions hereof to be
performed, kept and observed
XV CANCELLATION BY LESSEE
Lessee may cancel this Lease, ~n whole or part, and terminate
all or any of its obl~gatlons hereunder at any time, by thirty (30)
days written not~ce, upon or after the happening of any one of the
following events (1) issuance by any court of preventing or
restraining the use of sa~d a~rport or any part thereof for a~rport
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 per~od than n~nety (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, earth-
quake or other casualty, or (4) the assumption or recapture by the
United States Government or any authorized agency thereof the
maintenance and operation of sa~d airport and facilities or any
substantial part or parts thereof
Upon the happening of any of the four events l~sted ~n the
preceding paragraph, such that the Premises cannot be used for
aviation purposes, then Lessee may cancel th~s Lease as aforesaid,
or may elect to continue th~s Lease under its terms except however
that the use of the Premises shall not be l~m~ted to aviation
purposes, their use being only limited by such laws and ordinances
as may be applicable at that t~me
XVI MISCELLANEOUS PROVISIONS
a Entire aareement Thzs Lease constitutes the entire
understandzng between the partzes and as of zts effectIve date
supersedes all prior or independent agreements between the part~es
covering the subject matter hereof Any change or modzf~catzon
hereof shall be zn writing s~gned by both partmes
B Lease Bzndznq on Successors and Assz~ns All covenants,
agreements, provlsmons and conditions of thms Lease shall be
binding upon and ~nure to the benefit of the respectzve partmes
Page 26
hereto, that is both Lessor and Lessee jointly and severally, and
their legal representatives, successors or assigns, and/or any
grantee or assignees of the Lessor and Lessee No modification of
this Lease shall be binding upon either party unless written and
signed by both parties
C Effect of Condemnation If the whole or any part of the
Premises shall be condemned or taken by eminent domain proceedings
by any city, county, state, federal or other authority for any
purpose, then the term of this Lease shall cease on the part so
taken from the day the possession of that part shall be required
for any purpose and the rent shall be paid up to that day, and from
that day, Lessee shall have the right to continue in the possessIon
of the remainder of the premises under the terms herein provided,
except that the rent shall be adjusted to such amount as the
parties hereto shall negotiate, but, under no circumstances shall
the rent be greater than the rental per square foot provided for
herein All damages awarded for such taking of and for any public
purpose shall belong to and be the property of Lessor All damages
awarded for such taking structures, improvements or businesses that
were constructed by Lessee shall be reflective of their value for
the remainder of the Lease term and be awarded to Lessee, the
remaining to be awarded to Lessor
D Severabll~tv If an provision hereof shall be finally
declared void or illegal by any court or administrative agency
having jurisdiction, the entire Lease shall not be void, but the
remaining provisions shall continue in effect as nearly as possible
in accordance with the original lntent of the parties
E Notlce Any notice ~lven by one party to the other in
connection with this Lease shall be in writing and shall be sent by
re9zstered mall, return receipt requested, with postage and
registration fees prepaid
1 If to Lessor, addressed to
C~ty Manager
C~ty of Denton
215 E McKlnney
Denton, Texas 76201
2 If to Lessee, addressed to
Nebrlg & Associates, Inc
Attn Mike Nebrl9
7515 Lemmon Avenue
Dallas, TX 75209
Notices shall be deemed to have been received on the date of
receipt as shown on the return receipt
Page 27
F Headings The headings used in this Lease are intended
for convenience of reference only and do not define or l~mlt the
scope or meaning of any provision of this Agreement
G Governln~ Law This Lease is to be construed in accor-
dance w~th the laws of the State of Texas
H Park~n~ Lessor reserves the right to restrict and
designate parking areas for all surface vehicles on all areas of
the Airport, except the Premises
I Attorne's Fees In any action brought by Lessor in which
a judgment is awarded in favor of Lessor for the enforcement of the
oblagatlons of the Lessee, Lessor shall be entitled to recover all
costs from Lessee, ancludlng attorney's fees, involved in the
enforcement of this Lease A reciprocal agreement w~ll be enforced
on behalf of the Lessee
J Title Commitment and Survey Within fifteen (15) days
after the Effective date, Lessee may procure a TLTA form current
leasehold title commitment (the "Title Commitment") from a title
Insurance company reasonably acceptable to Lessee (the "Title
Company") for the issuance of a leasehold policy of title insurance
("Title Policy") to Lessee from the Title Company, together with
good legible copies of all permitted exceptions (the "Underlying
Documents") and, a survey of the premises (the "Survey")
K Cont______%D_~gncaes Lessee's obligations under th~s Lease are
contingent on the satisfaction of the following matters (herein
referred to as the "Contingencies")
Lessee's revaew and approval of the Title Commitment,
Survey and the Underlying Documents
Lessor agrees that Lessee shall have a period of forty-
five (45) days after the Effective Date of th~s Lease
(the "Revaew Period") an which to inspect the condatlon
of the Premises and conduct an examination of the
Premises to determine if improvements may be constructed
which will comply with generally accepted engineering
principles and which are allowed by law If wlthan the
Review Period, at is discovered by Lessee that it is
illegal to construct ~mprovements (e g so~l contains
hazardous wastes) or improvements are ~ncapable of being
constructed (e g ansuff~clent bearing strength), then
Lessee shall be entitled to terminate this Lease by
giving written not~ce thereof to Lessor prior to the
expiration of the Review Per~od
L Term The effective date of this Agreement as September
30, 1996
Page 28
IN WITNESS WHEREOF, the partzes have executed thzs Agreement
as of the day and year flrst above written
CITY OF DENTON, LESSOR
TED BENAVIDES, CITY MANAGER
ATTEST
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM
HERBERT L PROUTY, CITY ATTORNEY
BY ¢ c
NEBRIG & ASSOCIATES, INC ,
LESSEE
ATTEST
THE STATE OF TEXAS §
COUNTY OF DENTON §
On thzs ~2~ day of .~<~Jl~ ,
before
the
me,
Page 29
undersigned Notary Public, personally appeared Ted Benavldes,
personally known to me to be the person and officer who executed
the wlthln lnstrument as Czty Manager of the C~ty of Denton, Texas,
on behalf of the Municipal Corporation therein named and acknowl-
edged to me that the corporatlon executed
w~T_~F~ _~l_~. ll~ 1 c la 1 seal
il ~%~ M~lS, I~ II ~ PUBLIC. ATE OF TE~S
My Commission expires
THE STATE OF TEXAS
COUNTY OF DENTON §
BEFORE ME, the undersigned authorzty, zn and for said County,
Texas, on thls day personally appeared /~//~
known to me to be the person and officer whos~ ~ame'ls subscribed
to the foregoing instrument and acknowledged to me that the same
was the act of the said Nebr~q & Assoczates, Inc , a corporation of
the State of Texas, and that he executed the same as the act of
sa~d corporation for the purposes and conszderat[on therein
expressed, and in the capaclty there~n stated
/_ GIV_~DER MY HA~D AND SE~ OF OFFICE, this the /~ day of
I t~'~ NOIARY PUBLIC ~
~%~ b~ArEOFTE~S ~T~? PUBCICI ST~ OF TE~S
My Commission expires ~ _
Page 30
LETTER OF UNDERSTANDING
September l~, 1996
Provident Bank
13655 Preston Road
Dallas, Texas 75240
Re Airport Lease Agreement dated September I [5, 1996 (the "Lease") by and
between the City of Denton (the "City"), as lessor, and Nebng & Associates, Inc
("Nebrlg'), as lessee
Gentlemen
We understand that you, Provident Bank (the "Lender") are proposing to make a loan
to Nebng an the amount not to exceed $440,000 00 (the "Loan") for the purpose of constructing
certain improvements to the real estate that is the leased premises under the Lease (the
"Premises") and connecting taxiways Notwithstanding anything to the contrary contained an the
Lease, this letter shall consUtute our agreement and understanding as to the interpretation of the
Lease in ars application to your rights as Lender
1 The City hereby consents to the Loan to be secured by a first lien on Nebrag's
leasehold interest m the Premises and a first priority security interest in all personal property of
Nebrag on the Premises (collectively, such hens and security interest, the "Liens")
2 The Lease Article IX, Paragraph numbered 2, wall be deemed satisfied if the Lender
sends to the City a copy of all written communication from the Lender to Nebng regarding
default in the Loan and enforcement of any rights of Lender with respect to the Loan or the
Lender's interest in the Premises or other collateral
3 In the event that the Lease as canceled pursuant to Article XIV or other provisions
of the Lease, the City agrees to allow the Lender a period of sixty (60) days following such
cancellation (upon the condition that the Lender pays the City during such period the monthly
rental that would be payable to the City had the Lease not been canceled), to either (i) assume
the rights and obligations of lessee under the Lease In accordance with the Paragraph numbered
1 of Article IX of the Lease, 0a) or, without becoming liable under the Lease, present to the
City a replacement lessee, acceptable to the City m its reasonable approval, for the purpose of
reinstating the Lease with the replacement lessee or entering into a replacement lease hawng the
same terms for the balance of the lease term In any event, the Liens of the Lender would
continue ununpaared until foreclosed or released by Lender, so long as monthly rentals are
timely pa~d
4 The exercise by Lender of ItS rights to foreclose any collateral interest in the Prennses
or the property of Nebrag shall not, ~tself, be a default under the Lease
pro168\lease Itt
5 To the extent of any conflict between the terms of th~s Letter and the terms of the
Lease, the C~ty agrees that as to the Lender, the terms of th~s Letter shall be controlling
6 Th~s letter ~s g~ven to assure the Lender as to the mterpretauon of certmn prows~ons
affecting the mtemst of the Lender, nothmg m th~s Letter ~s ~ntended to confer or shall confer
any right or benefit upon Nebng or any third party other than Lender
If the above accurately reflects our understanding and agreement, please ~nd~cate by
s~gmng below and returmng a counterpart to the C~ty
S~ncerely,
C~ty of Denton, Texas
Agreed and Accepted ttus~
day of September, 1996
Prowdent Bank
Receipt Acknowledged th~s
day of September, 1996
Nebng & Associates, Inc
pro168\lease Ih'
J
~$ ~ ATTACHMENT
to~~
ATTACI~4ENT D
Being all that certain tract, parcel, or lot of land out of Lot 1,
Block 1, SOUTHEAST AIRPORT ADDITION, an addition to the City of
Denton, Denton County, Texas accordIng to the plat thereof recorded
in Cabinet G, Page 295, Plat Records of Denton County, Texas and
more particularly described as follows
BEGINNING at a poznt for corner that is located S08°36'21"W, and
588°36'10"E, 426 80 feet from the northwest corner of the said
addztzon,
THENCE: S88°36'10"E, along the south line of an Access, Drainage
and Utility easement at 217 8 feet to a point for a corner,
THENCE: leaving the south line of the Access, DraInage, and utility
Easement, S01o23'50"W, 300 00 feet to a point for a corner,
THENCE: N88°36'10'' W, 217 8 feet to a point for corner,
THENCE~ N08°36'21"E, 300 00 feet to the place of beginning and
containing 1 5 acres of land more or less
ATTACHMENT E
Being all that certain tract, parcel, or lot of land out of Lot 1,
Block 1, SOUTHEAST AIRPORT ADDITION, an addition to the City of
Denton, Denton County, Texas according to the plat thereof recorded
in Cabinet G, Page 295, Plat Records of Denton County, Texas and
more particularly described as follows
BEGINNING at a point for corner that is located S08°36'21"W, 915 7
feet, and S88°36'10"E, 644 6 feet from the northwest corner of the
said addition,
THENCE~ S88°36'10"E, along the south line of an Access, Drainage
and Utility easement at 246 84 feet, to a point for a corner,
THENCE~ leaving the south line of the Access, Drainage, and Utility
Easement, S01023'50"W, 300 00 feet to a point for a corner,
THENCE: N88°36'10'' W, 246 84 feet to a point for corner,
THENCE~ N08o36'21"E, 300 00 feet to the place of beginning and
containing 1 7 acres of land more or less