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1995-261FILE REFERENCE FORM 95-261 X Additional File Exists Additional File Contains Records Not Public, According to the Public Records Act Other FILE(S) Date Initials Amendment to Lease Agreement - Ordinance No. 96-126 05/21/96 )R Assignment of Lease - Ordinance No. 2003-308 09/16/03 ) R Mutual Rescission of Assignment of Lease [original attached to Ordinance 2003-308] 12/30/04 )R Assignment of Lease and Conveyance of Ownership of Leasehold Improvements - Ordinance No. 2010-149 06/15/10 )R avionics, etd NOTE: Amendment to Lease Agreement - Ordinance No. 96-126. ORDINANOE NO. AN ORDINANCE AUTHORIZING THE CITY MANAGER OF THE CITY OF DENTON, TEXAS TO EXECUTE A COMMERCIAL LEASE AGREEMENT BETWEEN THE CITY OF DENTON, TEXAS AND AVIONICS INTERNATIONAL SUPPLY, INC. FOR APPROXI- MATELY 0.565 ACRES OF PROPERTY LOCATED AT THE DENTON MUNICIPAL AIRPORT, WITH OPTIONS ON THE LEASE OF ADDITIONAL PROPERTY COMPRIS- ING AN ADDITIONAL 1.745 ACRES; AND PROVIDING AN EFFECTIVE DATE. THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: ~ECTION I. That the City Manager is authorized to execute a commercial lease agreement between the City of Denton, Texas and Avionics International Supply, Inc. for approximately 0.565 acres of land located at the Denton Municipal Airport, 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 1995. BOB CASTLEBERRY, MA~ ~ ATTEST: ~ ~'~WALTERS, C~T~- SECRE 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 is made and executed this /~day of ~, 1995, at Denton, Texas, by and between the City of Denton, Texas, a municipal corporation, hereinafter referred to as "Lessor", and Avionics International Supply, Inc., having its principal offices at 1750 Underwood Road, Denton Municipal Airport, Denton, Texas 76207, 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 said airport and construct and maintain an office, warehouse, aircraft hangar and related aviation facilities thereon; and NOW, THEREPORE, for and in consideration of the promises and the mutual covenants contained in this agreement, the parties agree as follows: I. CONDITIONS OF AGREEMENT NOTWITHSTA~DINGANY LANGUAGE TO THE CONTRARY HEREINAPTER CONTAINED, THE LANGUAGE IN PARAGRAPHS A THROUGH D OP THIS SECTION SHALL BE BINDING. A. PRINCIPLES OF OPERATIONS. Does not grant Lessee the right to operate as a fixed base operation to serve the public. 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, religion, color, sex, or national origin shall be excluded from participation in, denied the benefits of, or be otherwise subjected to discrimination in the use of said facilities; and 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; and 3. Lessee shall use the premises in 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 Transpor- tation - 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 is clearly understood by Lessee that no right or privilege has been granted which would operate to prevent any person, firm or corporation operating aircraft on the airport from performing any services on its own aircraft with its own regular employees (including, but not limited to, maintenance and repair) that it may choose to perform. 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 it sees fit, regardless of the desires or views of Lessee, and without interference or hindrance. 2. Lessor shall be obligated to maintain and keep in repair the landing area of the airport and all publicly owned facili- ties 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. 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 right 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 limit 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. Avionics Lease ~reement - Page 2 II. LEASED PREMISES Lessor, for and in consideration of the covenants and agreements herein contained, to be kept by Lessee, does hereby demise and lease unto Lessee, and Lessee does hereby hire and take from Lessor, the following described land situated in Denton County, Texas: A. LAND. A tract of land measuring 170 feet × 145 feet, approximately 24,650 square feet in area, as drawn and outlined on Exhibit "A", incorporated herein by reference, denoted therein as Tract A (alternatively as Phase I) and legally described below: ALL that certain tract or parcel of land situated in the W. Neil Survey, Abstract Number 970, Denton County, Texas, and being part of a tract shown by deed to City of Denton, recorded in Volume 305, Page 216, Deed Records, and being more particularly described as follows: COMMENCING at an iron rod in the centerline of Underwood Road being 563.48 feet south of the south right-of-way of FM 1515: THENCE south 89© 54' 20" west a distance of 30.00 feet to a point for corner and a point of beginning; THENCE south 00© 22' 23" west a distance of 145.00 feet to a point for corner; THENCE south 89© 54' 20" west a distance of 170.00 feet to a point for corner; THENCE north 00© 22' 23" east a distance of 145.00 feet to a point for corner; THENCE north 89° 54' 20" east a distance of 170.00 feet to the Point of Beginning for a lot containing 24650.0 square feet and being 0.565 acres of land, more or less. 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 employ- ees, passengers, patrons and invitees. For purposes of this agreement, the term "Premises" shall mean all property located within the metes and bounds described and identified above, including leasehold improvements constructed by the Lessee, but not including certain easements or property owned or controlled by the Lessor. B. OPTION ON TRACT B (PHASE II). Lessee shall have the option of extending the terms of this lease to land depicted on the attached Exhibit A as Tract B {also shown as Phase II). Tract B Avionics Lease Agreement - Page 3 comprises two rectangular areas, one measuring 160 feet × 145 feet, and a taxiway extension measuring 25 feet × 134.5 feet, together comprising approximately 26,560 square feet in area, as drawn and outlined on Exhibit "A", incorporated herein by reference, and legally described below: ALL that certain tract or parcel of land situated in the W. Neil Survey, Abstract Number 970, Denton County, Texas, and being part of a tract shown by deed to City of Denton, recorded in Volume 305, Page 216, Deed Records, and being more particularly described as follows: COMMENCING at an iron rod in the centerline of Underwood Road being 563.48 feet south of the south right-of-way of FM 1515: THENCE south 89© 54' 20" west a distance of 200.00 feet to a point for corner and a point of beginning; THENCE south 00° 22' 23" west a distance of 145.00 feet to a point for corner; THENCE south 89© 54' 20" west a distance of 160.00 feet to a point for corner; THENCE north 00° 22' 23" east a distance of 145.00 feet to a point for corner; THENCE north 89© 54' 20" east a distance of 160.00 feet to the Point of Beginning for a lot containing 23,200 square feet and being 0.532 acres of land, more or less. PLUS, ALL that certain tract or parcel of land situated in the W. Neil Survey, Abstract Number 970, Denton County, Texas, and being part of a tract shown by deed to City of Denton, recorded in Volume 305, Page 216, Deed Records, and being more particularly described as follows: COMMENCING at an iron rod in the centerline of Underwood Road being 563.48 feet south of the south right-of-way of FM 1515: THENCE south 89° 54' 20" west a distance of 360.00 feet to a point for corner; THENCE south 00° 22' 23" west a distance of 76.81 feet to a point for corner and a point of beginning; THENCE south 00© 22' 23" west a distance of 25.00 feet to a point for corner; Avionics Lea~e ~reement - Page 4 THENCE north 88° 09' 02" west a distance of 134.65 feet to a point for a corner in the east boundary line of Lot 1, Block 1, Southeast Airport Addition, an addition to the City of Denton, Texas as recorded in cabinet G, Page 295, Real Property Records, Denton County, Texas; THENCE north 01© 45' 42" west along said east boundary line of said Lot 1, a distance of 25.00 feet to a point for a corner; THENCE south 88© 09' 02" east a distance of 134.20 feet to the Point of Beginning and containing 3360.6 square feet and being 0.077 acres of land, more or less. Said option on Tract B shall be subject to the same terms and conditions contained within this agreement as are applicable to Tract A at the time the option 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 adjustments, if any; and date of commencement, as if said addition were and had been within Tract A from the original date of execution of this lease. In no event shall this lease option extend more than two (2) years past the initial execution of this Agreement. C. RIGHT OF FIRST REFUSAL TO LEASE TRACT C. Provided that, and for so long as Lessee stays in lawful possession of the land denoted above as Tract A, Lessee shall have a right of first refusal on any lease negotiated within part or all of a tract of land identified on Exhibit "A" as Tract C, measuring 330 feet x 150 feet, approximately 49,500 square feet in area, and legally described below, ALL that certain tract or parcel of land situated in the W. Neil Survey, Abstract Number 970, Denton County, Texas, and being part of a tract shown by deed to City of Denton, recorded in Volume 305, Page 216, Deed Records, and being more particularly described as follows: COMMENCING at an iron rod in the center line of Underwood Road being 563.48 feet south of the south right-of-way of FM 1515: THENCE south 89© 54' 20" west a distance of 30.00 feet for corner; THENCE south 00° 22' 23" west a distance of 145.00 feet to a point for corner and a Point of Beginning; THENCE south 00° 22' 23" west a distance of 150.00 feet to a point for corner; Avionics Lease Agreement - Page 5 THENCE south 89© 54' 20" west a distance of 330.00 feet to a point for corner; THENCE north 00° 22' 23" East a distance of 150.00 feet to a point for corner; THENCE north 89° 54' 20" east a distance of 330.00 feet to the Point of Beginning for a lot containing 49,500.0 square feet and being 1.136 acres of land, more or less. Any future lease negotiated on Tract C shall be subject to whatever lease terms may be negotiated between Lessor and Lessee, and Lessee shall have no vested right to lease said tract under any particular terms of agreement, or specified rental, whether contained within this agreement or any other. Lessee's exercise of said right of first refusal is expressly conditioned upon Lessee's continuous and simultaneous rental of Tracts A and B, above. Unless otherwise agreed between Lessor and Lessee, Lessee shall have this right of first refusal on the entire square footage of Tract C. Should Lessee wish to claim the right on less than the entirety of Tract C, Lessee shall prepare and deliver to Lessor's Airport Manager a map and specific description of that portion for which Lessee wishes to claim the right. In no event shall this right of first refusal extend more than five (5) years past the initial execution of this Agreement. D. 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. E. IMPROVEMENTS PROVIDED BY LESSEE. On Tract A, Lessee shall construct a 9,000 square foot office and warehouse facility, with paving and other improvements as shown on the attached site plan Exhibit "B". Should Lessee exercise its option to lease Tract B, Lessee shall construct an additional 9,900 square foot hangar, dual 18" Class IV RCP culverts in the drainage channel located west of the western boundary of the taxiway extension, paving, and such other improvements as may be required by City ordinances. F. EASEMENTS. Lessor and Lessee by mutual agreement may establish, on the lease premises, easements for public access on roads and taxiways. Avionics Lease Agreement - Page 6 Go ACCESS TO UTILITIES. Lessor represents that there are water and 3-phase electricity lines within three hundred feet (300') of the leased premises available to "tap-in" by Lessee, and that the same are sufficient for usual and customary service on the leased premises. III. TERM The initial term of this agreement shall be for a period of thirty (30) years, commencing upon Lessor's delivery of a certifi- cate of occupancy to Lessee and continuing through the 12th day of December, 2025, unless earlier terminated under the provisions of the agreement. Any attempt by Lessee to renegotiate this Lease shall be in writing addressed to the City Manager at least one hundred eighty (180) days before the expiration of the stated term of this lease, and at least 180 days before the expiration of any additional renegotiated period. Lessee has the option to renew for two {2) additional ten (10) year terms. The rental and the provisions of the agreement to be negotiated for either of the additional terms shall be reasonable and consistent with the then value, rentals and provisions of agreement of similar property on the airport. IV. PAYMENTS, RENTALS AND FEES Lessee covenants and agrees to pay Lessor, as consideration for this lease, the following payments, rentals and fees: A. LAND RENTAL shall be due and payable in twelve {12) equal monthly installments in advance, on or before the first of each and every month during the term of this agreement in the amount of one- twelfth (1/12) of an annual rental payment based on the following formulae, calculated on the basis of minimum yearly rentals adjusted for inflation as per paragraph IV. C.: 1. Delivery of Certificate of Occupancy - 12/12/05 : $0.08 per square foot minimum yearly rental, adjusted annually per paragraph IV. C. 2. 12/13/05 - 12/12/15 : $0.10 per square foot minimum yearly rental, adjusted annually per paragraph IV. C. 3. 12__~_~15 - 12/12/25 : $0.12 per square foot minimum yearly rental, adjusted annually per paragraph IV. C. B. LESSOR IMPROVEMENTS RENTALS. NONE. There are no Lessor improvements on the leased premises. C. PAYMENT, PENALTY, ADJUSTMENTS. All payments due Lessor from Lessee shall be delivered to the Airport Manager, unless otherwise designated in writing by the Lessor. All rental or fee amounts paid by Lessee and received by Lessor after more than fifteen (15) days Avionics Lease Agreement - Page 7 after the date due shall automatically accrue and include an addi- tional monetary amount (penalty) equal to five percent (5%) of the rental or fee amount due. The yearly rental for land and improve- ments 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 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, 1995 index, which was 146.8 (1982- 84 = 100). Each rental adjustment, if any, shall occur on the 13th day of December, beginning 1996, and every year thereafter on such date. The adjustments 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 for October , 1995, which was 146.8 (1982-84 = 100). If the product of this multiplication is greater than the minimum yearly rent as set forth in Section IV.Ao, 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 this multiplication is 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 time, and Lessee shall pay the minimum yearly rent as set forth in Section IV.A., until the time of the next rental adjustment as called for in this section. In no event shall any rental adjustment called for in this section result in an annual rent less than the minimum yearly rent of as set forth in Section IV.A. The adjustment 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 percent (10%). 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 this lease, the remaining rental adjustments called for in this section shall be made using the formula set forth in Subsection (a) above, but substituting 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. City Average are discontinued 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 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 exist or ceases to publish statistics concerning the purchasing power of the consumer dollar during the term of this lease, the remaining rental adjustments called for in this section Avionics Lease ~reement - Page 8 shall be made using the most nearly comparable statistics published by a recognized financial authority selected by Lessor. V. RIGHTS AND OBLIGATIONS OF LESSEE A. USE OF LEASED PREMISES. Lessee is granted the non-exclusive privilege to use the leased premises for the manufacture and sale of aviation-related electronic equipment and storage of aircraft. Lessee may not use any portion of the Premises for any other use. Lessee, or sublessees shall not be authorized to conduct any services not specifically listed in this agreement. The use of the lease premises of Lessee, or sublessees shall be limited to only those private activities having to do with or related to airports and aviation. 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 commercial, retail or industrial activity. The Lessor shall not unreasonably withhold authorization to conduct aeronautical or related services. B. INDEPENDENT CONTRACTOR. During all times that this Lease is 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 City with respect to their acts or omissions hereunder. For all purposes hereunder, Lessee is and shall be deemed an independent contractor and it is mutually agreed that nothing contained herein shall be deemed or construed to constitute a partnership or joint venture between or among the parties hereto. C. STANDARDS. Lessee shall meet or exceed the following standards: 1. Address. Lessee shall file with the Airport Manager and keep current his mailing addresses, telephone numbers and contacts where he can be reached in an emergency. 2. List. 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 invitees) to abide by the provisions of the 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. Avionics Lease Agreement - Page 9 5. ~aws. Lessee shall comply with all current and future federal, state and local laws, rules and regulations which may apply to the conduct of business 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 licenses or permits. Lessee's use of the premises shall at all times be in compliance with and subject to any covenants, restrictions, and conditions of record pertaining to the use and occupancy of the leased premises and shall at all times comply with the laws, codes, ordinances, rules, and regulations , either existing or those promulgated in the future, by the City 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 permit the operation of any transmitter devices, electrical signal producers, or machinery on the leased premises which could interfere with the electronic aircraft navigation aids or devices located on or off Airport property. Lessee shall not be permitted to engage in any business or operation on the leased premises which would produce obstructions to visibility or violate height restrictions as set forth by the Federal Aviation Administration or the City of Denton. 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 in respectable condition, free from any objectional matter or thing. Lessee agrees not to utilize or permit others to utilize areas on the leased premises which are located on the outside of any hangar or building for the storage of wrecked or permanently disabled aircraft, aircraft parts, automo- biles, vehicles of any type, or any other equipment or items which would detract from the appearance of the leased premises. Lessee agrees that at no time shall the leased premises be used for a flea market type sales operation. 7. Unauthorized use of premises. Lessee may not use any of the leased land or premises for the operation of a motel, hotel, restaurant, private club or bar, apartment house, or for industrial, commercial or retail purposes, except as authorized herein. 8. Dwellinqs. It is expressly understood and agreed that no permanent dwelling or domicile may be built, moved to or established on or within the leased premises nor may lessee, his tenants, invitees, or guests be permitted to reside or remain as a resident on or within the leased premises or other airport premises. Avionics Lease ~reement - Page 10 9. Quit Possession. Lessee shall quit possession of all premises leased herein at the end of the primary term of this lease or any renewal or extension thereof, and deliver up the premises to Lessor in as good condition as existed when possession was taken by Lessee, reasonable wear and tear excepted. 10. HOLD HARMLESS. LESSEE SHALL INDEMNIFY AND HOLD HARMLESS LESSOR FROM AND AGAINST ALL LOSS AND DAMAGES, INCLUDING 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. 11. 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 chemi- cals and paints. 12. 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 naviga- tion, 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 notice 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 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 leased premises into conformance with the particular law, rule or aeronautical regulation being violated. Should Lessee, Lessee's agent, or the person(s) responsible for the violation(s) fail to cease and desist from said violation(s) and to immediately commence correcting the violation(s), and to complete said corrections 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. Avionics Lease Agreement - Page 11 D. ~IGNS. During the term of this agreement, Lessee shall have the right, at its own expense, to place in or on the lease Premises signs 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 with any overall directional graphics or sign program established by Lessor for the Airport. Lessor's approval shall not be withheld unreasonably. Said signs shall be maintained in good repair throughout the term of this agreement. Notwithstanding any other provision of this agreement, said signs shall remain the prop- erty of Lessee. Lessee shall remove, at its expense, all lettering, signs 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 enjoy the leased premises and all rights and privileges herein granted; B. COMPLIANCE. Lessor warrants and represents that in the establishment, construction and operation of said Denton Municipal Airport, that Lessor has heretofore and at this time is complying with all existing rules, regulations, and criteria distributed by the Federal Aviation Administration, or any other governmental authority relating to and including, but not limited to, noise abatement, air rights and easements over adjoining and contiguous areas, over-flight in landing or takeoff, to the end that Lessee will not be legally liable for any action of trespass or similar cause of action by virtue of any aerial operations of adjoining property in the course of normal take-off and landing procedures from said Denton Municipal Airport; Lessor further warrants and represents that at all times during the term hereof, or any renewal or extension of same, that it will continue to comply with the foregoing. VII. SPECIAL CONDITIONS It is expressly understood and agreed by and between Lessor and Lessee that this lease agreement is subject to the following special terms and conditions. A. RUNWAYS AND TAXIWAYS. That because of the present sixty thousand (60,000) pound continuous use weight bearing capacity of the runway and taxiways of the Airport, Lessee herein agrees to limit all aeronautical activity including landing, take-off and taxiing, to aircraft having an actual weight, including the weight of its fuel, of sixty thousand (60,000) pounds or less, until such time that the runway and designated taxiways on the Airport have been improved to handle aircraft of such excessive weights. It is Avionics Lease ~reement - Page 12 further agreed that, based on qualified 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 invitees, but shall not include those activities over which it has no solicitory 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 sufficient 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. RE~REMENTS: Before commencing the construction of any improvements upon the premises, Lessee shall submit: 1. Documentation, specifications, 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 its 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 fail 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 public areas only (such as taxiways) shall be delivered by Lessee to Lessor's City Manager from time to time as such costs are paid by Lessee, and Lessor's City Manager is hereby authorized to endorse upon a copy of this lease filed 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. B. ADDITIONAL CONSTRUCTION OR IMPROVEMENTS: Lessee is hereby authorized to construct upon the land herein leased, at his 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 Avionics Lease Agreement - Page 13 commencing the construction of any improvements upon the premises, Lessee shall submit plans and specifications for approval by Lessor as specified in Article VIII.A., above. 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 Buildinqs. No building or permanent fixture may be removed from the premises. 2. Assumption. All buildings and improvements of whatever nature remaining upon the leased premises at the end of the primary term, or any extension thereof, of this lease shall automatically become the property of Lessor absolutely in fee without any cost to Lessor. 3. ~Life. It is agreed that the life of the building to be constructed by Lessee on the property herein leased is forty-five (45) years. 4. Cancellation. Should this lease be cancelled for any reason before the end of the forty (45) year expected building life, it is especially understood and agreed that Lessor reserves the right to purchase all buildings, structures and improvements then existing upon the premises by tendering to Lessee one forty-fifth (1/45) of the undepreciated value of such building for each year remaining on the agreed life of such building. The undepreciated value of all improvements is to be determined by having such improvements appraised by three appraisers, one appointed by Lessor, one appointed by Lessee and one appointed by the two appraisers. IX. SUBROGATION OF MORTGAGEE Any person, corporation or institution that lends money to Lessee for construction of any hangar, structure, building or improvement and retains a security interest in said hangar, struc- ture, building or improvement shall, upon default of Lessee's obligations to said mortgagee, have the right to enter upon said leased premises and operate or manage said hangar, structure, building or improvement according to the provisions of the agree- ment, for a period not to exceed the term of the mortgage with Lessee, or until the loan is paid in full, whichever comes first, but in 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. Avionics Lease Agreemen~ - Page 14 X. RIGHT OF EASEMENT Lessor shall have the right to establish easements, at no cost to Lessee, upon the leased ground space for the purpose of providing underground utility services to, from or across the airport property or for the construction of public facilities on the Airport. How- ever, any such easements shall not interfere with Lessee's use of the leased premises and Lessor shall restore the property to orig- inal condition upon the installation of any utility services on, in, over or under any such easement or the conclusion of such construc- tion. 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 in his business, through the sale of stock or otherwise, transfer, license, nor sub- let the whole or any part of the said premises for any purpose, without the written consent of Lessor. Lessor agrees that it will not unreasonably withhold or delay its approval of such sale, sub- lease, 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 if the rental, fees or payments, received or charged are in excess of the rental or fees paid by Lessee to Lessor under the provisions of this lease, for such portion of the premises proposed to be assigned, subleased, transferred, licensed, or otherwise. The pro- visions of this lease shall remain binding upon the assignees, if any, of Lessee. XII. INSURANCE A. REQUIRED INSURANCE: Lessee shall maintain continuously in effect at all times during the term of this agreement, at Lessee's expense, the following insurance coverage: 1. Comprehensive general liability covering the leased premis- es, 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. Avionics Lease Agreement - Page 15 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 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 policy. 6. All policies must be approved by the Lessor. 7. The Lessor shall be provided with a copy of all such policies and renewal certificates. Products Liability insurance is not required by this lease for the operations herein allowed; however, Lessor reserves the right to require such insurance if any future modifications to the scope of allowed operations contained within Paragraph V.A. justify such a modification. During the 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 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 commensu- rate with insurance requirements at other public use airports similar to the Denton Municipal Airport in size and in scope of aviation activities, located in the southwestern region of the United States. 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 the receipt of a notice in writing from Lessor stating the increased or adjusted insurance requirements. Lessee shall have the right to maintain in 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. Avionics Lease Agreement - Page 16 XIII. INDEMNITY LESSEE AGREES TO INDEMNIFY AND HOLD HARMLESS CITY AND ITS 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 NEGLIGENT ACTS OR OMISSIONS ON THE PART OF LESSEE, ITS AGENTS, REPRESENTATIVES, EMPLOYEES, MEMBERS, PATRONS, VISITORS, CONTRACTORS AND SUBCON- TRACTORS, 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. THIS iNDEMNITY PROVISION EXTENDS TO ANYANDALL SUCH CLAIMS, SUITS, DEMANDS, AND/OR ACTIONS REGARDLESS OF THE TYPE OF RELIEF SOUGHT THEREBY, AND WHETHER SUCH RELIEF IS IN THE FORM OF DAMAGES, JUDGMENTS, AND COSTSANDREASONABLE ATTORNEY'S FEES ANDEXPENSES, 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 BASIS 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. FURTHER, CITY ASSUMES NO RESPONSIBILITY OR LIABILITY FOR HARM, INJURY, OR ANYDAMAGING EVENTS WHICH ARE DIRECTLY OR INDIRECT- LY ATTRIBUTABLE TO PREMISE DEFECTS OR CONDITIONS WHICHMAY NOW EXIST OR WHICH MAY HEREAFTER ARISE UPON THE PREMISES, ANY AND 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, CONTRACTORS AND SUBCONTRACTORS, IF ANY, AND/OR SUBLESSEES. IT IS EXPRESSLY UNDERSTOOD AND AGREED THAT THE LESSOR SHALL NOT BE LIABLE OR RESPONSIBLE FOR THE NEGLIGENCE OF LESSEE A~D/OR SUBLESSEES, ITS AGENTS, SERVANTS, EMPLOYEES AND CUSTOMERS. LESSEE FURTHER AGREES THAT IT SHALL AT ALL TIMES EXERCISE REASONABLE 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. LESSEE AR-D LESSOR EACH AGREE TO GIVE THE OTHER PARTY PROMPT AND TIMELY NOTICE OF ANY SUCH CLAIM MADE OR SUIT INSTITUTED WHICH IN ANYWAY, DIRECTLY OR INDIRECTLY, CONTINGENTLY OR OTHERWISE, AFFECTS Avionics Lease ~reement - Page 17 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 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 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 reorganization act, or Lessee shall be divested of its estate herein by other operation of law; or Lessee shall fail 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. The City 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 demised premises by Lessee. Upon termination of this Lease, Lessee shall remove all personal property from the demised premises within sixty (60) 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. If City has exercised its 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 improvements in place. 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 right of City to cancel this Lease by reason of any subsequent violation of the terms hereof. The acceptance of rentals and fees by City for any period or periods 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 failure by Lessee to so perform, keep or observe any of the terms, covenants or conditions hereof to be performed, kept and observed. Avionics Lease ~reement - Page 18 XV. 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 juris- diction of a permanent injunction in any way preventing or restrain- ing the use of said airport or any part thereof for airport pur- poses; (2) the breach by Lessor of any of the covenants or agree- ments 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 regula- tion 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 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. XVI. MISCELLANEOUS PROVISIONS A. ENTIRE AGREEMENT. This agreement constitutes the entire understanding between the parties and as of its 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 hav- ing 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. Avionics Lease Agreement - Page 19 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 mail, return receipt requested, with postage and registration fees prepaid as follows: 1. If to Lessor, addressed to: City Manager City of Denton Denton, Texas 76201 2. If to Lessee, addressed to: Andy Johnson or Don Hawkins Avionics International Supply, Inc. 1750 Underwood Road Denton Municipal Airport Denton, Texas 76207 Notices 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 AND VENUE. This agreement is to be construed in accordance with the laws of the State of Texas and venue for its enforcement shall lie in Denton County, Texas. IN WITNESS WHEREOF, the parties have executed this agreement as of the day and year first above written. CITY OF DENTON, TEXAS, LESSOR ATTEST: CASTLEBERRY, ~R~ Avionics Lease Agreement - Page 20 APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY CITY OF DENTON, TEXAS / AVIONICS INTERNATIONAL SUPPLY, INC., LESSEE BY: ~dy/~son, President T~ ~T~T~ O~ T~.=~ ~ COUNTY OF DENTON § /~ This instrument was acknowledged before me on the //-~- day of //~,;~.%~L~.~ , 1995 by Andy Johnson. ~'Iq~OTA~R~; PUBI~IC, S,T~ OF TEXAS My Commission Expires: Avionics Lease Agreement - Page 21 O0 ./2 0 Z'~ avionamd,ord ORDINANCE NO. ~& -/~ ~ AN ORDINANCE AUTHORIZING THE CITY MANAGER OF THE CITY OF DENTON, TEXAS TO EXECUTE AN AMENDMENT TO THE COMMERCIAL LEASE AGREEMENT BETWEEN THE CITY OF DENTON, TEXAS AND AVIONICS INTERNATIONAL SUPPLY, INC.; 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 amendment to the commercial lease agreement between the City of Denton, Texas and Avionics International Supply, Inc., under the terms and conditions contained within the amendment, which is attached hereto and made a part hereof. SECTION II. That this ordinance shall become effective immediately upon its passage and approval. AND APPROVED this the~//W~day of ~/'~__~'- , 1996.PASSED JA~ MILLER, MAYOR ATTEST: N~YF~-WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY AMENDMENT TO AIRPORT LEASE AGREEMENT BETWEEN AVIONICS INTERNATIONAL SUPPLY, INC. AND THE CITY OF DENTON, TEXAS THE STATE OF TEXAS § § KNOW ALL MEN BY THESE PRESENTS: COUNTY OF DENTON § WHEREAS, Lessee, Avionics International Supply, Inc. has indicated that certain provisions of the December 19, 1995 lease agreement between it and Lessor, City of Denton, Texas, are causing difficulty in securing financing for certain improvements to be constructed on the leased premises; and WHEREAS, Lessor desires to facilitate development at the Denton Municipal Airport by Lessee; This lease, amendment ("Amendment") is made and executed this ,~]~ day of ~, 199~, .at Denton, Texas, by and between the City ~f Denton, Texas,la municipal corporation, hereinafter referred to as "Lessor", and Avionics International Supply, Inc., having its principal offices at 1750 Westcourt Road, Denton Municipal Airport, Denton, Texas 76207, hereinafter referred to as "Lessee". This amendment amends the lease agreement executed on December 19, 1995 (the "Agreement") between Lessor and Lessee to the extent contained herein only; all other provisions of the Agreement not specifically modified herein remain in full force an effect as originally written. Article IX. of the agreement is hereby amended to read as follows: IX. SUBROGATION OF MORTGAGEE Any person, corporation or institution that lends money to Lessee for construction of any hangar, structure, building or improvement and retains a security interest in said hangar, struc- ture, building or improvement shall, upon default of Lessee's obligations to said mortgagee, have the right to enter upon that portion of said leased premises upon which said fixture is located and operate or manage said hangar, structure, building or improve- ment according to the provisions of the agreement, for a period not to exceed the term of the mortgage with Lessee, or until the loan is paid in full, whichever comes first, but in no event longer than the term of this lease. Mortgagee shall not be obligated to operate any business upon the leased premises during its tenancy of the leased premises, and mortgagee shall not conduct any business upon the leased premises which is not aviation related. If, during mort- gagee's occupation of the leased premises, mortgagee finds a suit- able substitute tenant to operate an aviation-related business on such portion of the leased premises, it may, with Lessor's consent, assign such portion of the lease to such assignee under the terms contained within Paragraph XI. It is expressly understood and agreed that the rights of the mortgagee referred to herein are limi- ted and restricted to those improvements constructed with funds borrowed from mortgagee, that mortgagee shall have no right to exer- cise, possess or assign any options or rights of first refusal not exercised by Lessee prior to default, and that mortgagee shall have no right to use, possess, occupy or assign any leased tracts upon which no mortgagee-financed fixtures are located. Article XI. of the Agreement is hereby amended to read as follows: XI. ASSIGNMENT OF LEASE Lessee expressly covenants that it will not assign this lease, convey more than ten percent (10%) of the interest in his business, through the sale of stock or otherwise, transfer, license, nor sub- let the whole or any part of the said premises for any purpose, without the written consent of Lessor. Lessor agrees that it will not unreasonably withhold or delay its approval of such sale, sub- lease, transfer, license, or assignment of the facilities for the airport related purposes. Ail options and rights of first refusal under this lease are personal to Lessee and are not assignable. In all other respects, all duties of Lessee shall remain binding upon any assignee. Solely to secure financing of buildings, structures or other fixtures on the leased premises, Lessee may assign to a mortgagee, as collateral only, such rights under the lease as are allowed under Article IX, herein. Paragraph XVI. D. of the Agreement is hereby amended to read as follows: XVI. MISCELLANEOUS PROVISIONS 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 mail, return receipt requested, with postage and registration fees prepaid as follows: 1. If to Lessor, addressed to: City Manager City of Denton Denton, Texas 76201 2. If to Lessee, addressed to: Andy Johnson or Don Hawkins Avionics International Supply, Inc. 1750 Westcourt Road Denton Municipal Airport Denton, Texas 76207 Avionics Lease Agreement - Page 2 Notices shall be deemed to have been received on the date of receipt as shown on the return receipt. No notice given to Lessee shall be effective unless similar notice is given to any mortgage holder having an interest on any improvements to the leased premises; provided, however, that Lessor's burden to deliver notification to mortgage holders shall be limited to mailing the mortgage holder a duplicate copy of all required notices to Lessee, at the last address furnished by Lessee to the Lessor's Airport Manager. LESSEE SHALL HAVE THE OBLIGATION TO NOTIFY LESSOR IN WRITING OF ANY ADDRESSES OF INTERESTED MORTGAGE HOLDERS, A~D SHALL INDEMNIFY AND HOLD HARMLESS LESSOR FROM ANYANDALL DAMAGES CLAIMED BY ANY THIRD PARTY MORTGAGE HOLDER DUE TO A LACK OR ALLEGED LACK OF NOTICE OF ANY ACTIONS TAKEN UNDER THE AGREEMENT. This provision shall not supersede any duties Lessee may otherwise have to notify any mortgage holder of any fact or circumstance under any other agreement. This provision creates no third party rights except to the extent stated in Paragraph IX and XI of the Agreement. IN WITNESS WHEREOF, the parties have executed this Amendment to the Agreement as of the day and year first above written. CITY OF DENTON, TEXAS, LESSOR BY: -'~K/MILLER, I MAYOR ATTEST: , CITY SECRETARY TEXAS APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY CITY OF DENTON, TEXAS Avionics Lease Agreement - Page AVIONICS INTERNATIONAL SUPPLY, INC., LESSEE BY: An y~J~on, President THE STATE OF TEXAS § COUNTY OF DENTON § This instrument was acknowledged before me on the /. ~ day of ~- , 1996 by Andy Johnson. ]/. (~ .~ Nom~ Publl~, State of Te~l ~ ~ _ _ _~,~ NOT~Y PUBLI~, STATE OF TE~S My Commission Expires: ~ -~ - 0 o Avionics Lease Agreement - Page 4