2012-012s:llegallour documentslordinances112\first financial resources airport lease.doc
ORDINANCE NO. 2O 12-� 12
AN ORDINANCE APPROVING A COMMERCIAL OPERATOR AIRPORT LEASE
AGREEMENT BETWEEN THE CITY OF DENTON, TEXAS AND FIRST FINANCIAL
RESOURCES,INC.; AND PROVIDING AN EFFECTIVE DATE.
THE COUNCIL OF THE CITY OF DENTON, TEXAS HEREBY ORDAINS:
SECTION 1. The City Manager or his designee is hereby authorized to execute an airport
lease agreement for commercial operator between the City of Denton and First Financial
Resources, Inc. in substantially the form of the Airport Lease Agreement which is attached to
and made a part of this ordinance for all purposes.
SECTION 2. This ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the � day of � , 2012,
MA A. BU UG S, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
: ��.�t� ,�'1`� , � �% 1 I
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. . . . . �.
,
BY:
s:\legal\our documents\contracts\11\Eirat financial airport lease-Einal.doc
AIRPORT LEASE AGREEMENT
COMMERCIAL OPERATOR
This Lease Agreement (the "Lease Agreement" or "Agreement") is made and
executed to be effective as of the 12`�` day of January 2012 (the "Effective Date") at Denton,
Texas, by and between the City of Denton, Texas, a inunicipal coxporation, liereinafter
refei7ed to as "Lessor", arid First Financial Resotuces, Inc, hereinafter refeixed to as
"Lessee".
WITNESSETH:
WHEREAS, Lessor now owns, controls and operates the Denton Muiucipal Airport
(the "Airport") in the City of Denton, County of Denton, State of Texas; and
WHEREAS, Lessor a.ud. Lessee first entered into a cei�ain Corrunercial Operator
Lease Agreemenf that became effective Septembez• 15, 1987 (the "Origina( Lease") and as
the result of various amendmeiits and modifications made thereto, the Original Lease is due
to expire Januaiy 12, 2012 and, this Lease Agreement is inteiided by the parties to become
efFective irmnediately upon and subsaquent to the expiration, without inter�vption, of the
Original Lease as amended or modified;
WHEREAS, Lessee desues to lease certain preinises at the Aiiport and const�•uct and
maintain an aircraft hangar an.d related aviation facilities thereon;
NOW, THEREk'ORE, fox• and in consideration of the promises az�d t1�e mutual
covenants contained in this Agreement, �lie parties agree as follows:
I. GENERAL CONDITIONS OF LEASE AGREEMENT
A. PRINCIPLES OF OPERA.TIONS. The zight to eonduct aeronautical and related
activities for fiunishing services to the public is granted to Lessee subject to the terms hereof
and to Lessee agreeiilg:
To fuxiusli said services. on a fair, equal and not unjustly discriminatory basis
to all users tlzereof; and V
2, To cha�ge fair, reasonable and not urijustly discriminatory prices for each unit
or seivice; provided, that Lessee may be allowed to malce reasonable and
nondiscriminatozy discounts, rebates, or other simila�• types of price reductions
to volume purchasers.
B, NON-DISCRIMINATION. Lessee, for itself, its personal representatives,
successors, and assigiis, as a part of the considezataon llereof, does hereby covenant and
agree as a covenant ruruung with the land that;
1. No person on the grounds of race, religion, color, sex, ox• national origin shall
be excluded from participation in, 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, religion,
color, sex, or national origin shall be excluded from participation in, denied
the benefits of, or otherwise be subjected to discrimination;
3. Lessee shall use the premises in compliance with all other requirements
imposed by or pursuant to Tit1e 49, Code of Federal Regulations,
Department of Transportation, Subtitle A, Office of the Secretary, Part 21,
Nondiscrimination in Federally Assisted Programs of the Department of
Transportation - Effecivation of Title VI of the Civil Rights Act of 1964, as
said Regulations may be amended.
G RIGHT OF INDIVIDUALS TO MAINTAIN AIRCRAFT. It is clearly understood
by Lessee that no right or privilege has been granted in this Agreement 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 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. §40103.
E. PUBLIC AREAS.
"Public Areas" or "Public Area" is that portion of the Airport, which is now or
hereafter considered by the FAA, TxDOT, the City of Denton, or any other regulatory
agency with oversight of the Airport to be the obligation and responsibility of the Lessor to
operate and maintain for the common use and benefit of the general aviation public. The
Airport Public Area includes, without limitation, any air navigation facility or structure
designed and intended to serve the general public not specifically subject to an exclusive use
agreement such as a lease agreement, license or permit. The Airport Public Areas include
all runways, t�iways and other common-use paved, graveled or turfed areas and their
respective protection zones, safety areas and/or object free areas; any other facility or
facilities at the A.irport that are eligible for federal or state grants or subsidies awarded on the
basis of their serving the benefit of the public (including runways, t�iways, vehicle streets
and alleys, public aircraft aprons/tarmac, vehicle parking areas, and drainage structures);
field lighting and associated beacon and lighted wind and landing direction indicators;
security, fire, and emergency medical facilities; directional signs; and perimeter or restricted
access fences. Generally, the Public Area is the total area and facilities of the Airport
exclusive of all non-public airport facilities, and may vary from time to time depending on
the total land comprising the Airport and the change of land use at the Airport.
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F, LESSOR AND THIlZD PARTY RIGHTS.
Lessox reseives the right to further develop or improve the Public A.rea of the
Aiipoi�t and any other property at t�ie Airport not pat�t oithe Leased Preinises
as it sees fit, regardless of the desires ox views of Lessee, and without
iutei�ference or lundrance.
2. Lessor shall be obligated to maintain and lceep in good repair the Public
Atea, together with the right to direct and control al1 activities of Lessee in
tkus regard.
During tiule of war or national emergency, Lessor shall have the right to
lease tlie Fublic Area or any pa��t thereof to ihe United States Government for
militazy or naval use, and, if such lease is executed, filie provisions of this
inst�•ument insofar as they are inconsistent with the provisions of the Lease
Agreement to the Government, shall be suspended.
4, Lessor reserves the nght to talca any action it considers necessazy to protect
the aerial approaches of tlie Aiipoit against obstructioi�, together with the
right to pxevent Lessee froin erecting, or pez•mitting to be erected, any
building or other sttucture on or adjacent to the Airport which, in the opinion
of Lessor, would limit the itsefulness or safety of the Airpoi�t or constitute a
hazard to ait•craft or to aireraft navigation. The Lessee Inlprovements as
cunently provided in Section II.D. do not violate this pzovision,
5. This Lease Agreetneiit sliall 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.
6. This Lease is given and entered into and subject to all laws, ordinances,
statutes, rules, regulations, directives, peimits, or standards of any
govei7unental authoriiy, entity, or agency (including, without lunitatioia, �1ie
City of Denton, Texas, tlie State of Texas, the Federal Aviation
Admiiust�ation, and ihe Texas Department of Transpoi�tation), whether now
in existence or hereafter enacted, adopted or imposed, and including, without
linutation, any and all grant agreements or grant assi.uances now existing or
as hereafter agreed to, adopted or imposed.
II. LEASED PREM[SES
Lessor, for and in consideration of, and subject to, the terms, covenants a��d conditions
set foi�th in tlus Lease Agreement to be lcept by Lessee, does hereby denlise and lease u,uto
Lessee, and Lessee does hereby lease from Lessor, for the lease tertn described in Article
III, the following described land situated iii Denton Couniy, Texas:
A. LAND. A tract of land, being approxirnately 23,915 square %et or 0,508 acres, as
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descz•ibed on Attachment "A", and showr� as Tract II therein, such attachment being
incorporated l�erein by reference (the "Leased Premises").
Togetl�er witl� the right of ingress and egress to the Leased Premises; and the right in
common with others so authorized of passage upon the Public Area, subject to reasonable
regulations by the City of Denton and such rights shall extend to Lessee's employees,
passengers, pat�ons and invitees. For puiposes of this Lease Agreement, the texm "Leased
Premises" shall mean all property located within the metes and bounds described in
Attaclunent "A", including all Lease Improvements (as defined below) constructed or
assumed by the Lessee, but not includ'vng easements or properiy owned and/or conirolled by
the Lessor, if any, as described on: Attaclmlent "A".
B. LESSEE ACCEPTS LEASED PREMISES.
EXCEPT' AS EXPRESSLY PROVIDED IN THIS LEASE AGREEMQ�iT, LFSSOR
MAKES NO REPRESENTATIONS OR WARR.ANTTES WHATSOEVER,
EXPRESSED, STATUTORY, OR IMPLIED, INCLUDING, WITHOUT LIMITATION,
AS TO THE DESCRIPTION, TITLE, VALUE, QUALITX, QUANTITY, PHYSICAL
AND ENVIRONMENTAL CONDITION OF THE LEASED PREMTSES AND/OR
MATERIALS CONTAINED OR LOCATED IN, ON OR UNDER THE LEASED
PREMISES, THE NATURE OF THE PAST OR HISTORIC USE OF THE LEASED
PREMISES, AND/OR MERCHANTABILITY, SUITABILITY OR FITNESS FOR
PURPOSE OF ANY OF THE LEASED PREMISES, ABSENCE OF LATENT
DEFECTS AND COMPLIANCE WITH LAWS AND REGULATIONS RELATED TO
THE LEASED PREMISES. Lessee further aclulowledges that, in executing and
accepting this Lease Agreement, it has relied solely upon its independent evaluation and
examiziation of tlie Leased Premises, and public records xelating to the Leased Pre�nises
and the independent evaluations and studies based thereon. Lessor znalces no warranty or
representation as to the accuracy, completeness or usefulness of any information
furnished to Lessee, if aixy, whether furnished by Lessor or any third party, Lessox, its
officers, employees, elected ofiicials and agents ass�.una no liability for the accuracy,
coxnpleteness oz• use.fulness of any material fiu�nished by Lessor, if any, or any of its
o�cers, employaes, elected officials and/or agents, and/or any othez person or party, if
any and Lessee hereby releases such pariies fron� and against any claims zelated to such
nZatters, Reliance on any material so furnished shall not give rise to aily cause, c�aim or
action against Lessor, its of�icers, employees, elected officials and/or agents, and any
such reliance shall be at Lessee's sole rislc,
TH� EXECUTION AND DELIVERY OF THIS LEASE AGREEMENT IS ON A
"WHERE TS", "AS IS", AND "WITH ALL FAULTS" BASIS, AND IS WITHOUT
REPRESENTATION OR WARRANTY, EXPRESSED, STA,TUTORY �R IMPLIED,
INCLUDING, BUT WITHOUT LIMTTATION, AS TO TITLE, THE DESCRTPTION,
PHYSICAL AND ENVIRONMENTAL CONDITION OF THE LEASED PREMISES
AND/OR MATERIALS CONTAINED OR LOCATED 1N, ON OR UND�R THE
LEASED PREMIS�S, THE NATURE OF THE PAST OR HISTORIC USE OF THE
LEASED PREMISES, THE QUALITY, QUANTITY AND VALUE OF THE LEASED
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PREMISES, FITNESS FOR PURPOSE, SUITABILITY, MERCHANTABILITY,
ABSENCE OF LATENT DEFECTS AND COMPLIANCE WITH LAWS AND
REGULATIONS RELATED TO THE LEASED PREMISES. Lessee has satisfied itself
as to tlie title, type, condition, quality and extent of the property and property intez•ests
which comprise the Leased Premises and the xnterests and rights provided by this Lease
Agreement.
C, IMPROVEMENTS PROVIDED BY LESSOR, NONE: There will be no
unprovements pz�ovided by Lessor, except as may be set forth in Article ILF., "Access to
Utilities",
D. IMPROVEMENTS PROVIDED BY LESSEE. Lessee has previously constructed
a building consisting of approximately 8,OOp square t'eet and other improvements oi1 the
Leased Premises and the applicable portion of the Public Area, if any, (tl�e "Lessee
Improveinents") as described in Attachtnent "B", at Lessee's sole cost, expense and rislc.
The terin "Lessee Improvements" shall include all real propei�ty and structural
improveinents llaving been made prior to the Effective Date and now existing on the
Leased Premises, other ihan Lessor Improvements, if azxy, Lessee shall own such Lessee
Improvements during the Lease Term, as provided in Article VIII. E�cept as provided
otherwise in this Agreement, Lessee may not const�uct, locate, install, place or erect any
other improvements upon the Leased Premises or the Public Area. Lessee shall also
eonstruct appropriate culverts or drainage as required by Ciiy ordinances on the Leased
Premises, as well as othei� improvem�ents as determined necessary by Lessoz� or as required
by City ordinaiices,
E, EASEMENTS. Lessor and Lessee by mutual agxeeinent may establish, on the Leased
Premises, easements for public access on roads aud taxiways. Nothing contained herein
shall be deemed to afFect Lessor's rights provided in Article X, below.
F. UTILITIES.
Lessor represents that there are water, sewer and 3-phase electricity lines within
two hundred feet (200') of the Leased Premises available to "tap-in" by Lessee,
and that the same are su;f#icient for usual arad customary seivice on the Leased
Prernises.
2. Lessee shall be responsible, at Lessee's sole cost aud ex�ei�se, :for obtauung all
utiliiy connections at or for ihe Leased Premises and Lessee shall pay all
charges for water, elecix7ciiy, gas, sewex, telecoirununications or any other
utility connectious, tap-in fees, impact fees, other fees or expenses of any ki�d
and for services fui7ushed to the Leased Prenuses dueing the Term hereof.
Lessee agreas to contact all utility service providers and all �ther parCies that
may own or claim to own underground pipelines, telecommuiucations, cable or
any othez• st��.icttu•e ox facility, prior to any excavatzon ox boring on or under the
Leased Pr•elnises. Lessor shall in no event be liable or zesponsible for any
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cessation or interruption in any such uiility seiwices,
III. TERM
A. TERM. The term of this Lease Agreement sha11 be for a period of twenty (20) yea�s,
commencing on the 12th day of Januaty, 2012 (the "Commencement Date") and continuing
tlu•ough the 12th day of Januaiy 2032, unless earlier terminated under the provisions of the
Lease Agreement (the "Lease Term" or "Terni").
B. HOLDING OVER, If Lessee holds over and continues in possession of the Leased
Premises after the Tei�n of t�us Lease Agreement expires, the holduig over may be
considered by the Lessor, at the Lessor's option, a month to month tenancy binding Lessee
to alI tezrns ai�d conditioi�s as set foitl� herein with the following exception; The rental
payznent due Lessox herein shall be the amount pex montla at the last inonth prior to
expi��ation of this Lease Agreement, payable on the first day of each month thei•eafter, until
fihe tenancy is tei7nu�ated as provided herein, The holding over tenancy may be tei�rninated
at aiiy fiime by Lessor or Lessee upon thirty (30) days written notice to the other party, or
may be tei�ninated by Lessor as a rernedy in accordance with the tei7ns of this Lease, as
elected by Lessor,
IV, PAYMENTS RENTALS AND FEES
Lessee covenants and agrees to pay Lessor, as consideration for ihis Lease Agreement,
the follow�ing paymen�s, rentals and fees;
A. LAND AND RENTAL Rental shall be due and payable to Lessor in the sum of
$0,5569 per gross square foot, as determined and provided in Attachment "A", said sum
beiilg stipulated herain as $13,381.32 per year (the "Original Rent"), payable in twelve (12)
equal monthly installments in the sum of $1,109.86 in advance, oil or before the 1 Sth day of
each and every month dtuing the tez•m of tlus Lease Agreement, through and including
November 15, 2031, and the sutn of $1,035.86 on or before Deceinber 15, 2031, all as may
be adjusted as provided ui this Lease. Lessee has the optzon to pay annual rentals and fees uz
whole on or before the lst day of October, at the begirming of the City's fscal year, each
arzd every year of this Lease Agreemeiifi,
Notwithstarxding the foregoiuig, the annual rental will be reduced by the cutrent lease rate
per squaz�e foot, as adjusted by the CPI-U referenced in Section IV.C., tin�es the number of
sqtiare feet comprising all easements established in accordance with Section II.E.
The rent provided herein shall be net return to Lessor, fiee of any loss, expense or• charge,
including without linutation, maintenance, constrvction, recoi�shuction, repairs,
replacement, insuraizce, taxes and assessments.
B, LESSOR IMPROVEMENTS RENTALS. Nona, There are no Lessor
Improvements on the Leased Premises as of the Effective Date.
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C. PAYMENT PENALTY A.DJUSTMENTS, All payments due Lessor fi om Lessee
sha11 be made to Lessor at the of#"ices of fl1e Finauce Depai�tinent of the City of Denton,
Customer Service Division, 601 West Hicicoiy, Denton, Texas, unless otherwise designated
in writing by the Lessor. If payments are not received on or before the 15�' day of the
month, a five parcent (5%) penalty will be due as of the 16th. If payxneiits a�•e not received
by ihe first of the subsequent month, an additional penalty of tlie lesser of the ma�cimum
amount provided by law and one perce��t (1%) of the unpaid rentaUfee amount will be due.
Tlie lessex of tl�e maximum amount provided by law and ane percent (1 %) will be added on
the �1P5t of each subsequent month until the unpaid reiitaUfee payinent is made.
Notwithstanding �uiything herein to the contrary, any such penalty shall be limited to but not
exceed the maximum a�noi.uit provided by law, if any
The Original Rent for the Leased Premises shall be readjusted at the end of each
two (2) year period during the Lease Terni, starting on the 13th day of January 2014 and
every two (2) years thereafter, on the basis of the proportion that the then current United
States Consumer Price Index fox all tuban consumers (CPI-U} for the Dallas-Fort Worth
Bureau of Labor Statistics bears to the Septeinber 2011 index, which was 209.255 (1982-84
= 100). Each rental adjust�nent, if any, shall occur on the 13th day of Jai�uary, beginning
2014, and every second year thereafter on such date.
The adjustments in the yearly rent shall be deternnined by multiplying the Original
Rent by a fraction, the numerator of which is the index number for the last inonth prior to
the adjustment, and the denominator of which is the index number applicable at the
execution of this Lease Agreement. If the product of tliis multiplication is greater than
the O�•iginal Rent, Lessee shall pay tlus greater amount as the yeat�ly rent until the tin�e of
the next rental adjustment as called for in tlus section, If the product of this multiplication
is less than the Original Rent there shall be no adjustment in the annual zent at that tiine,
and Lessee sha11 pay the previous year's anmial rant until tlie time of the next rental
adjustment as called for in this section. In no event shall any rental adjustinent called for
in this section result in an annual rent less than the previous year's annual rent, The
adjustment shall be limited so that the annual rental payment determined for any given
two-year period shall not exceed the annual rental payment calculated for the previous
CPI adjustriient by more than twentypercent (20%) percen.t,
If the consumez• price index for all urban consutners (CPI-U) for the Da11as-Foi�
Worth geogt�aplucal region, as compiled by the U,S, Department of Labor, Bureau of Labor
Statistics, is discontinued during the Lease Term, the remaining rental adjustments called for
in this section shall be made using the foimula set foi�th above, bi�t by substituting the index
numbers for the Consumer Price Iudex-Seasonally Adjusted U.S, City Average For A11
Items For All Urban Consu�ners (CPI-U) for the index numbers for the CPI-U applicable to
the Dallas-Foi�t Worth geographical region. If both the CPI-U for the Dallas-Foi�t Worth
geographical region and the U.S. City Average axe discontinued during the Lease Tez7n, tlie
remaining rental adjushnents called for in this section shall be zn�ade using the statistics of
the Bureau of Labor Statistics of the United States Department of Labor ihat a��e xnost nearly
compa�•able to the CPI-U applicable to the Dallas-Foi�t Woi�th geographical region. If the
Bureau of Labor Statistics of the Uxuted States Department of Laboz• ceases to exist or
Page 7
ceases to publish statistics concerning the pi.uchasing power of the constuner dollar during
the Lease Term, the remaining rental adjushnents called for in this section shall be made
using the most nearly comparable statistics published by a recognized financial authority
selected by Lessox.
V, RIGHTS AND OBLIGATIONS OF LESSEE
A, USE OF LEASED PREMISES. Lessee is granted the non-exclusive privilege to
ex�zgage in owner/operator activities providing only the following aviation se�vices:
1. Han�ar and Office Space Leasin�, Lessee is granted the non-exclusive right
to rent hangar and office space.
2. General Aucraft Maintenance. Lessee is granted the non-exclusive right to
conduct airframe and power plant maintenance services,
Aircraft Mana�ement Services Lessee is granted the non-exclusive right to
manage aircraft and flight operations fox third parties.
4. Aircraft Sa1es and Brolcera P Lessee is granted the non-exclusive right to
engage in the sale and/or brolcez�ing of aircraft.
Tie-Down Sei-vices. Lessee is granted the non-exclusive right to chatge fox
tie-down services on Lessee's propei�ty.
Lessee, its tenants, employees, invitees and guests shall not be authorized to conduct
any seivices not specifically listed in this Lease Agreement. The use of the Leased Preinises
by Lessee, its tena.uts, err�ployees, invitees or guests shall be limited to oi�ly those private,
commercial, retail or industrial activities having to do with ox related to aitports and avia-
tion, as provided herein. Except as specifically authorized in this Lease Agreement, no
person, business or corporation nnay operate a commercial, retail or industrial business upon.
the Leased Premises or upon the Airport without a lease or license fiom Lessor authorizing
such commercial, retail or indusnial activity.
B, STANDARDS. Lessee shall meet or exceed the following standards atid perform
the following activities or actions:
Address. Lessee shall file with the Airport Manager and lceep ci,u7•ent its
mailing addresses, telephor�e numbers and contacts where it can be reached in
an emergency.
2. List, Lessee shall file with tlie Aiipoi�t Managex and lceep current a list of its
sub-lessees and shall lceep cuix�ent and provide to the Auport Manager, as
requested, a list of all aircxaft hangared or tied down on the Leased Premises
within the previous twelve (12) month period.
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3. Conduct. Lessee shall contractually require its employees and sub-lessees (and
sub-lessee's invitees) to abide by the terms of this Lease Agreement. Lessee
shall promptly enforce its contractual rights in the event of a default of such
covenants by such employees and sub-lessees (and sub-lessee's invitees).
4. Utilities, Taxes and Fees. Lessee shall meet and pay all expenses and
payments in connection with the use of the Leased Premises and the rights and
privileges herein granted, including the timely payment of utilities, taxes,
permit fees, license fees and assessments lawfully levied or assessed.
5. Laws. Lessee, at Lessee's sole cost and expense, shall comply with all current
and future federal, state and local laws, rules and regulations which may apply
to the conduct of business contemplated and/or occupation of the Leased
Premises, 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.
6. Maintenance of Propertv. Lessee sha11 be responsible for the maintenance,
repair and upkeep of all property, buildings, paving, structures and
improvements, including the mowing or elimination of grass and other
vegetation on the Leased Premises and the Lessee Improvements constructed
on the Public Area, if any, and shall keep the Leased Premises neat, clean and
in respectable condition, free from any objectionable matter or thing, including
trash or debris. 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, automobiles, vehicles of any type, or any other equipment or items
which would distract from the appearance of the Leased Premises.
7. Painting of Buildin�s. During the Lease Term, Lessor shall have the right to
require, not more than once every five years, that the metal exterior of
hangar(s) and building(s) located on the Leased Premises be repainted. The
Lessor may 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) and building(s) are to be painted, if needed.)
Lessee shall complete the painting in accordance with such specifications
within one (1) year of receipt of notice from Lessor, Lessee shall pay all costs
and expenses involved in the hangar or building painting process.
8. Unauthorized Use of Leased Premises. Lessee may not use any of the Leased
Premises for any use not authorized herein unless Lessor gives Lessee prior
written approval of such additional use. Without limiting the foregoing, the
Leased Premises shall not be used for the operation of a motel, hotel,
restaurant, private club or bar, apartment house, flea market type sales,
industrial, commercial, retail sales, storage of recreational vehicles,
automobiles, or marine vehicles not incidental to uses permitted by this Lease,
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s:llegal\our dooumentslcontracts111�first financial aitport lease-final.doc
or any other use or purpose not expressly authorized by this Lease.
9. Dwellin�s. No dwelling or domicile may be built, moved to or established on
or within the Leased Premises, nar may Lessee, its tenants, employees,
invitees, or guests be permitted to reside or remain as a resident on or wittun
the Leased Premises or other Airport premises. Lessee may have a pilot
lounge, including restroom and shower facilities, for use by flight crew and
passengers.
10. Quit Possession. Lessee shall quit possession of the Leased Premises at the
end of the Lease Term, or upon cancellation or termination of the Lease
Agreement, and deliver up the Lease Premises to Lessor in as good condidon
as existed when possession was taken by Lessee and as Lessee has
constructed, or accepted at the beginning of the Term, including the Lessee
Improvements and Lease Improvements provided in Section II.D. and Article
VIII, hereof, reasonable wear and tear excepted.
11. Indemnitv and Release. Lessee shall indemnify, hold harmless and defend
the Lessor, its officers, agents, elected officials and employees, and hereby
releases Lessor, its officers, agents, elected officials and employees, from
and against any and all claims, liens, suits, liabilities, causes of action,
demands, losses, damages and/or actions for damages, injuries to persons
(including death), properiy damage (including loss of use), lost profits, and
expenses, including court costs, attorneys' fees and other reasonable costs
(collectively, "Claims"), occasioned by, arising from or incidental or related
to the Lessee's occupancy or use of the Leased Premises or the Airport, the
activities of Lessee and/or any party acting under the authority of, or rights
granted by, Lessee conducted in connection with or incidental to this Lease
Agreement, and/or Lessees' breach or default under this Lease Agreement,
including without limitation all such Claims based on common,
constitutional or statutory law or regulation, whether existing as of the date
hereof or as may be created or recognized hereafter. Lessee must at all
times exercise reasonable precautions on behalf of, and be solely responsible
for, the safety of its officers, employees, agents, customers, visitors,
invitees, licensees and other persons, as well as the Leased Premises and
Lease Improvements, while in, on, or involved in any way with the use or
occupation of the Leased Premises.
Without limiting the indemnity and release provided herein, the Lessor shall
assume no responsibility or liability for harm, injury, or any damaging events
which are directly or indirectly attributable to premise defects, whether real
or alleged, which may now exist or which may hereafter arise upon the
Leased Premises, responsibility for all such defects being expressly assunned
by the Lessee. The Lessee agrees that, without limiting the indemnity and
release provided herein, this indemnity and release provision applies to all
Claims arising from all premise defects or related to the condition of the
Page 10
Leased Premises and/or the Lease Improvements, of aiiy lcind or type,
THE LESSOR AND THE LESSEE EXPRESSLY 1NTEND THIS
PROVISION TO RELEASE LESSOR IT5 OFFICERS AGENTS
ELECTED OFFICIALS AND EMPLOYEES AND TO RE UIRE
LESSEE TO 1NDEMNIFY AND DEFEND THE LESSOR ITS
OFFICERS AGENTS ELECTED OFFICIALS AND EMPLOYEES
FROM AND AGAINST ALL MATTERS SET FORTH TN THIS
SECTION V.B.11. FROM THE CONSEOUENCES OF CAUSED BY
OR RELATED TO THE LESSOR'S OWN NEGLIGENCE OF ANY
KIND TYPE OR DEGREE EXCEPT AS SPECIFICALLY PROVIDED
BELOW. NOTWITHSTANDING THE TERMS OF THE PRECEDING
SENTENCES THIS INDEMNITY AND RELEASE PROVISION DOES
NOT APPLY '�'O ANY CLAIM WHERE THE INNRY DEATH OR
DAMAG� RESULTS FROM THE SOLE NEGLIGENCE OF THE
LESSOR UNMIXED WITH THE FAULT OF ANY OTHER PERSON OR
ENTITY,
The provisions of this Section V.B.11, sliall survive the expixaiion and
termination of tlus Lease Agreement.
12. Cheniicals and Other Substances. Lessee shall properly store, use, collect and
dispose of aIl chemicals, chemical residues, paints and/or any other pollutant,
contaminairt, intermediate, hazardous substance, waste, asbestos containing
material, petroleum product and any substance contauung any of t11e above
("Chemical"); to properly store, confine, collect and dispose of Chemicals,
including without limitation, paiut spray in the atmosphere; and to comply
with all local, staie and %deral statutes, rules, regulafions and oz•dinances
governing the storage, handling, use or disposal of such Cllenlicals. Further,
the Lessee sha11 be solely responsible for, and without limiting the provisions
of Article V.B.11., shall indemnify Lessor against any and a11 claims, losses,
liens, suits, fines, penalties, liabilities, damages, causes of actioii and
demands, including without limitation, costs, liabilities and damages
associated with the cleanup, remediation and disposal of said Chernicals,
damage to the enviz•onment or natural resources, property damage and/or
injuiy, disease or death of any person, related to discharges or xeleases,
whether accider�tal or intentional, of any Chemical or any other matter, claun,
loss, lien, suit, liability, damage, demand or cause of action associated with or
related to the Cliemicals.
13. Haza�dous Activities. Should Lessee violate any statute, iule, restriction,
oz�der, ordinance or regulation of the City of Denton or• the Federal Aviatioii
Adtninist�ation, or any other regulato�y authority, or should the Lessee
engage iix or pei7nit other persons or agents to engage in activities wlucll
could produce hazards or obstruction to air navigation, obstructions to
visibility or ulterfet•ence with any aucraft navigational aid statiou or device,
Page 11
whether airborne or on the groiuld, then Lessor shall state such violation in
wxiting and deliver written notice to Lessee or, if so elected by Lessor,
Lessee's agent on the Leased Premises, or 1;o the person(s) on the Leased
Premises who are causing said violation(s), and upon delivery of such vv�itten
notice, Lessor shall have the right to demand that the person(s) responsible for
the violation(s) cease and desist from all such activity cz•eatiiig t11e
violation(s), In such event, Lessor shall have the right to demand that
coixective action, as requu�ed, be coixunenced immediately to restore the
Leased Premises into canformance wiih the particulax statute, rule, restriction,
order, ordinan.ce or regulation being violated or to remove or remediate any
hazard described herein, 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 immedzately commence correcting the violation(s), and to complete
said coi7ections within twenty-four (24} houi•s following w�ritten notification,
then Lessor shall have the xzght to enter onto the Leased Premises and coi7ect
the violation(s) at the sole cost a�1d expense of Lessee, and Lessor shall not be
responsible %r any damages incurred to any improvements on the Leased
Prelnises as a result of tlie coxrective action process. In addition, such
violation shall be considered a material default by Lessee authorizing Lessor,
at its sole option and disc�etioii, to immediately termulate and cancel this
Lease Agreement and to exercise any and a11 other rights a��d remedies
available to it under this Lease Agreeznent.
C. SIGNS. No signs, posters, or other sunilar devices ("Signage") shall be placed on
the exterior of the Lease Itnprovements, Lessor Improvements, if applicable, or on any
portion of the Leased Pz•emises or Airport property without the prior vv�itten approval of
Lessor. Lessee, at its sole expense, shall be responsible for the creation, installation and
�naintex�ance of all such Signage, Lessee, without limiting the general nature of Section
V.B,11., s11a11 pay to Lessor any and all damages, injtuies, or repairs resulting from the
installatioi�, maintenance or repaia• of any such Signage. Any Signage placed on the Leased
Premises shall be maintained at all times in a safe, neat, sightly and good physical condition.
All signage shall be renaoved fiom the Leased Premises by Lessee immedaately upon receipt
of instructions for removal of sanne from Lessor, including without limitation, upon
expiration or termination of this Lease Agreeznent. If Lessee fails to remove the Signage
then Lessor may do so at the sole cost and expense of Lessea. Subject to approval by Lessor
as provided l�erein, Lessee may place two wall signs, no greater than thirty-two square feet
each, identifying the comulercial hanga� operation, Notwithsfiauding airything contained
hereizi to the contra�y, all sign.age shall comply with all applicable City of Denton
oxdinances, including tlie Cify of Denton sign ordinance.
D. ENTRY, Lessor and zts designees shall hava tl�e right to enter the Leased
Premises upon reasonable advance notice (written or oral) and at a.i1y rcasonable times for
the piu�poses of inspecting tlie Leased Premises, performing any worlc which Lessor
elects to perform under this Lease Agreement, and exhibiting the Leased Preznises for
sa1e, leASe, or moi�tgage. Nothing in this section sl�all imply any duty upon Lessor to do
any worlc or perform any activity, which under any other provision of this Lease
Page 12
Agreement Lessee is required to perform, and a��y performance by Lessor shall not
constitute a waiver of any default by Lessee he�•eunder.
VI. COVENANTS BY LESSOR
Lessor hereby agxees as follows:
A, PEACEFUL ENJOYMENT, Upon payment of all z•ent, fees and perfoimance of
the covenants and agreements on tlie �art of Lessee to be performed hereunder, Lessee
(subject to the te�xns a.tzd conditions of this Lease Agreement) shall peaceably l�old and
enjoy the Leased Premises and all rights and privileges herein grairted; however, Lessee
accepts this Lease Agreement subject and subordinate to any recorded rx�.ortgage, deed of
tiust, or other lien presently existing upon, or to any other matter of record in the Real
Propeifiy Records of Denton County, Texas and/or that Lessee is otherwise charged with
notice or ulquiry notice, affecting the Leased Premises.
B. COMPLIANCE. Lessee will not be legally lzable for any actioii of trespass ox
sunilar cause of action by vu�tue of any aerial operations of adjoining property in the course
of normal talte-off and landing procedures from the Aitport,
VII. WEIGHT LIMIT OF AIRCRAFT
A. RI7NWAYS AND TAXIWAYS. Lessee shall limit all aeronautical activity,
including without limitatiozi, landing, talce-off and taxiing, to aircraft having an acival
weight, uicluding the weight of its fuel, of thirty thousand (30,000) pouzids or less, unless
and until such tune that the runway and designated taxiways on the Airpoi�t have been
iznproved to handle aircxaft of such excessive weights. It is fiu�ther agreed that, based on
qualified engineer:ing studies, the weight restrictions ar�d provisions of 1:his clause may be
adjusted, up or down, and that Lessee agrees to abide by any such cl�a�iges or revisions as
such studies may dictate. "Aeronautical activity" referred to in this clause shall include azry
activity of the Lessee or its agents or subcontractors, and its customers aud 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. Violation of the provisions of this section
on two or more occasions during the Term shall be sufficiea�t to cause (i) the imrnediate
teimination of this Lease Agreement, witl�out opportunity to cure by Lessee; (ii) shall
otherwise constitute a default hereunder wl�erein Lessor may resoi�t to all other remedies
provided in this Lease Agreement; and (iii) withoitt limiting the provisions of Section
V.B11., subject Lessee to liability for any danlages to the Aitport that inight result,
Nothing contained herein shall be conshued as creating any obligation on the pa��t of Lessor
to improve or modify aiiy part of the Aiipoi�t.
Page 13
VIII. LEASEHOLD IMPROVEMENTS
A, ADDITIONAL CONSTRUCTION OR 1MPROVEMENTS. It� addition to the
Lessee Improvements, subject to the teirns of this Article VIII, Lessee may construct upon
the Leased Premises, at its own cost a�id expense, buildings, hanga��s and st�uctures, that
Lessor and Lessee inutually agree in their disc�•etion, are necessary for t�se in connectiozi
with t1�e operations authorized by tlus Lease Agiee�nent ("Additional Improvenients"); pro-
vided however, Lessee shall comply with �11 of the requuements of tlus Article VIII.
B. REQUIIZEMENTS FOR LEASE IMPROVEMENTS Befoz•e coirunencing
constiuction actxvzties related to the Lessee Improvements an�.d/or the Additional
I�n.provements upon the Leased Premises (the Additional Improvements and the Lessee
Improvemezits are collectively refeired to in tlus Lease Agreement as the "Lease
Improveinents"), Lessee shall submit to Lessor:
1, Documentation, specifications, or design work, pz•epa�•ed by an architect
and/or engineer selected by Lessee which shall be reviewed and appi•oved by
the Lessor, which shall establish that the improvements to be built or
consu�u.cted upon the Leased Premises and Public Area, if applicable, are in
confoi�nauce with the overall size, shape, color, quality and design, in
appearance and structure of the program established by Lessor on the
Aitport.
2, All plans and specifications showing the location upon the Leased Premises
and Public Area, if applicable, of the proposed constxuction and
improvements.
Tlie estimated cost of such constructio�n,
No const�uction may commence until Lessor has approved the plans and specifications and
the location of the Lease I�nprovements and the Public Area, if applicable, and the estimated
costs of such construction. Approval by the Lessor of consi�•uction in conformity with the
teirns of this Lease Agreenient shall not be unx•easonably withheld,
B,1. CONSTRUCTION OF LEASE IMPROVEMENTS
Const�•uction and modzfication o;f the Lease I�nproverr►ents shall be
pei�foi7ned i�z a good atad worlcmanlilce manner and in compliance with all
applicable building codes, iules, standa�ds; zonuig and other ordinances and
all state and federal standaxds (including, without limitation, Title ITT of the
Americans With Disability Act of 1990, any state statutes, governing
han.dicapped access or architectural barriers, a�id all rules, regulations and
guidelines promulgated under such laws, as amezlded from tinle to time).
Z. Without 1'unituig the provisions of Section V.B.11., Lessee shall promptly
pay and dischar�e all costs, expenses, claims for damages or injuiy
Page 14
(including without limitation. clainns for personal injury or death, or property
damage or desh�uctioii, or economic loss), liens and any And all othex
liabilities a�id obligations which arise in connection with such construction.
3, Lessee shall cause each con�ractor performing any worlc or otherwise
occupying the Leased Premises or Public Area and/or Aitport related to the
Lease Improvements or puxsuant to the authority provicled to Lessee
hereunder, to indernnify the Lessor and its officers, agents, elected officials
and employees to the same extent provided by Lessee to Lessor i.n Section
V.B11..
4, Lessee sha11 properly azxd t'vnely submit to the FAA, TxDOT, and any other
governmental entity or agency having jurisdiction regarding the Aitport, a
Notice of Proposed Conshuction and any and all other docuziaents or
rnaterials as may be requued, when and as required.
5, Without limiting the rights to Lessor provided in Section V.D., Lessor has
the right and is authorized by Lessee at all times during a�ry consttuction
project to enter upon the Leased Prenuses to observe the performance af
such construction. Nothing contained herein shall be construed as an
obligation, of any lcind ox type, on the part of Lessor related to the
construction activities and/or to assure Lessee's compliance with the
provisions of this Lease Agreement.
6, No later than thirty (30) days after completion of the Lease T�nproveinents,
Lessee shall submit to Lessor detailed as-built plans of the Lease
Iznprovements and documeuta�y evidence acceptable to Lessor evidencing
the total cost to construct the Lease Improvements ("Cost to Constxuct Lease
Improvements").
7. No improvements to ihe Leased Premises, including without limitation, tkie
Lease Improvements, may be removed fiom the Leased Premises during the
Tet•m hereof, unless otherwise specifically authorized llerein.
8. Lessae sl�all cause the general contractor to obtain (i) payment bonds for
const��tzction contzacts greater than Fifty Thoilsand and z�o/100 Dolla�s
($50,000); and (ii) payment and perfortna�ice bonds for consh�uction
cont�acts greater than One Hundred Thousand and �no/100 Dolla�rs
($100,000), for each construction activity on the Leased Premises and Public
Area, if applicable, each naming the Lessor as an Addiiional Obligee.
Lessee shall fiu�nish such bonds to Lessor prior to any work on the Leased
Preinises or Public Area, if applicable. Additionally, any and all insurance
provided by the general contractor to Lessee shall name the Lessox as an
Additioiial Insuxed and/or Loss Payee, as applicable, and provide the
followiiig coverages, at a mininium:
Page 15
• Corrunercial Geueral Lzability -$1,000,000 per occurrence and $2,000,000 aggregate
• Business Automobile Liability -$500,000 per occutx�ence and $1,000,000 aggregate
• Worlcers' Compensation — Statutory Limits
• Buildex's Rislc (if applicable) —100% of the completed value
C. OWNERSHIP OF IMPROVEMENTS. Except as otherwise pz•ovided in this Lease
Agreement, the improvements now located, o:t constructed or to be const�ucted upon the
Leased Premises by Lessee (including without limitation, the Lease Improve�tnents), but
excluding tlie Lessor Improvements, if any, shall remain the property of Lessee during the
Lease Tei�rn subj ect to the following conditions, terms and provisions:
1. Upoi� tlie terinination of this Agreeinent, whether by expiration of the Term
hereof or by reason of default on the part of Lessee, or for any other reason
whatsoever, the improvenients (including without limitation, the Lease
I�nprovements}, and all paz�ts thereof, shall merge with the title of, or be
otherwise considered and deemed a part of the real property, free and clear
of any claim of Lessee and all persons or entities claunuig under or tluough
Lessee (including, without limitatioii, any holder of a leasehold moi�tgage),
a�id shall become the property of Lessor; pxovided, however:
(i) if Lessee is not then in default hereunder, Lessee shall have the right to
remove all personal property and t�ade fixiures owned by Lessee from the
Leased Pzemises, but Lessee shall be required to repair any damage to the
Leased Premises caused by such removal in a good arzd worlcmanlil{e
manuier and at Lessee's sola cost and expense; and
(ii) Lessor may elect to requue Lessee to remove all or part of tlie
improvements (other than the Lessox Improvements) froni the Leased
Premises prior to the expiration or earlier termination of this Lease
Agreement a��d restoxe the Leased Premises to the condition in wluch the
sa�ne existed as of the Ef%ctive Date of the Original Lease (or as otherwise
specified by Landlord in writing), which said retiioval shall be completed
no later tlian tlle last day of this Lease Agreement, whether expired or
earliez tex�ninated, in wkuch eveiit Lessee sha11 promptly perform such
removal and restoration in a good and worlcma��like maniier and at Lessee's
sole cost and expense; and
(iii) Upon such expiration or earlier termination, Lessee shall deliver tha
Leased Premises to Lessor in good condition, reasonable weas and tear
excepted, and shall, at Lessor's request, execute a recordable insh2unent
evidencing tkze tei7nination of this Agreement, expressly stating the
termination or expiration date thereof.
2, The Lessor Improvements, if any, shall rexnain the property of Lessor at all
times during and a$er the expiration or eulier tez7nination of this Lease
Agreement,
Page 16
3. Noihing contained hereu� s11a11 be construed to limit or pz•ohibit Lessor and
Lessee fior� mutually agreeing to either (i) amend or modify this Lease
Agreeinent or, (ii) enter iuto a new agreement to supersede and replace this
Lease Agreem.ent, which may, among other things, effectively extend or
otherwise defer the transfer of title and ownership of the Lease
Improvements to Lessor as pz•ovided fo� in this Section VIII.C., prior to the
expiration of this Lease Agreement. However, nothing contained herein
shall be deemed or construed to tequire any amendment or modification of
tlus Lease or the entering into of a new lease agreement. Any such actioii
shall be at the sole and absolute discretion of Lessor a�id Lessee.
IX. COLLATERAL ASSIGNMENT
A. CONSENT TO ENCUMBER. Lessee shall not collaterally assign this Lease or
otherwise encumber the estate created by this Lease Agreement without the written
consent of Lessor, which suclx consent shall be at Lessor's sole discretion. As conditions
to such consent, Lessor may require fi•om Lessee and/or the Sec�.u•ed Pai�ty (herein so
called) any coiiunitxnent, condition or requirement deeined ilecessary or advisable by
Lessor, including without limitation, provision for:
Express agreement that the Lessee shall in no way be released fronl any of
its obligations under this Lease Agreement, including without limitation,
the obligation to pay rent;
2. The Secured Paz�ty to promptly provide Lessor notice of any default by
Lessee in any obligation to Secured Pai�ty;
The Secured Party to provide notice to Lessor at least fifteezx (15) days
pxior to (i) accelexating any indebtedness owed by Lessee to Secured
Party; (ii) initiation of any fot�eclosure proceedings; and/oz• (iii) any other
actions to enforce any �nancial obligation of Lessee to Secu�ed Par�y.
B, USE OF LOAN PROCEEDS.
1. Any funds borrowed by Lessee in which this Lease Agreement or the
estate created by this Lease Agreemeni are utilized as security or
collatexal, in whole or in part, may be used only for (i) obtaining funds for
the construction o£ the Lease Improvements, as described in Section II.D.
and Artxcle VTII hereof; (ii) for acquisition of the laasehold estate created
by this Lease; or (iii) any other purpose wluch inay be approved from tiine
to time by Lessor, in writing, in its sole discretion.
C. LIEN. No lien contemplated by this Article TX shall constitute a lien on
Lessor's fee title. Aiiy indebtedness secured by a lien against or on the estate created by
this Lease Agreemeiit or this Lease shall at all tuiies be and remain inferior and
Page 17
subordi�iate to conditions, covenants and obligations of this Lease Agreeinent and to all
of Lessor's rights under this Lease Agree�neiit,
X, RIGHT OF EASEMENT
Lessor shall liave tlie right to establish easernents, at no cost to Lessor, upon the
Leased Premises for tlie piu�ose of (i) providing uiiderground utility services to, froin or
across the Airpoi� propexty; or (ii) for the construction of public facilities and/or
infi�astructure on tlie Aiz�ort. However, any such easements shall not interfere with
Lessee's use of the Leased Premises and Lessor shall restore the Leased Preznises to as
close to its original conditiozz as is reasozaable practicable upon the installation of any utility
services oiz, in, over or under any such easeinent at the conclusion of such const�uction.
Conshuction wi�lun the easenlent upon the Leased Premises shall be completed within a
cotmuercially reasonable time.
XI. ASSIGNMENT OF LEASE
Lessee expressly covenants that it (i) wi11 not assign this Lease Agreement; (ii) convey
more ihan �ifty percent (50%) of the voting interest in its business or entity as of the
Effective Date of dus Lease Agreement, through the sale of stoclt or otherwise; or ui
t��ansfer, license, or sublet the whole or any pat�t of the Leased Premises for any purpose,
except for rental of hangar space or tie-down space for storage of aircraft oiily, without the
prior written consent of Lessor. Lessor agrees fl�at it will not unreasonably withhold its
approval of such sa,le, sublease, transfer, license, or assignment of the facilities for Airport
related purposes. The provisions of this Lease Agreemeni: sha11 remain binding upon �lie
Lessee and the sublessees and assignees, if any, of Lessee,
XII. CASUALTY LOSS/CONDEMNATION
A, CASUALTY/TOTAL OR PARTIAL DESTRUCT.ION, In the event t11e Leased
Pramises, or any improvernents located thereon, are damaged by casualty, regardless of the
extent of the damage o�• destruction or whether insurance proceeds, if any, are sufficient,
Lessee shall, at ifis sole cost, rislc and expanse, promptly, but in no event to be later than six
(6) months after such casualty, coinmence and conlplete with diligence, the restoration,
repair a.ud/or replacement of any such improvements to substaniially the same condition as
they existed prior to the casualty loss, conditioned upon the �ollowing provisions:
Any and all activities related to the restoration, repair and replacement of the
damaged improvements, shall be subject to (i) Lessor's prior approval, as
provided in Section II.D. and Article VIII, as applicable to the
improvement affected by casualty; and (ii) the provisions set forth iii tkus
Section XII,.A,
2, Lessor, as loss payee under the all zislc property insurance covezage requzx•ed
by tliis Lease Agreenient, shall be entitled to approve disbut•sements of the
insurance proceeds as restoration, repair and replacement activities are
Page 18
completed by Lessee.
3, Lessee shall talce and complete whatever actions are necessaty, if applicable,
to obtain disbursement authoiity of insurance proceeds from any secured
pat�ty possessing a lien on the leasehold estate created by this Lease
Agreeznent.
4, In the event Lessee fails to promptly commence restaration, repair and/or
replaceinent of tlie damaged improvements in confoimaiice with the
provisions hereof, Lessee shall be in default under this Lease Agreexnent, in
which event Lessor may seelc atxy remedies available hereunder, and Lessee
shall provide such endorsements or talce any other actions necessary,
including without limitation, any action required of any secured pai�ty, to
cause all of the insurance proceeds payable due to such damage or casualty
loss to be paid to Lessor.
B, TOTAL OR PARTIA.L, CONDEMNATION,
If �11e Leased Pz•ernises or any pai�t oi them are talcen by condeintzation as a
result of any action or proceeding in eminent domain, or axe transferred in
lieu of condemnation to any authoi7ty entitled to exercise the power of
eminent domain, this Asticle goveins Lessor's a�ld Lessee's interest in the
award or consideration for the ha�1sfer and the af'fect of the talcing or transfer
of tlus Lease Agreement.
2. In the event the entire Leased Preiziises are taken or t�ansferxed as described
in Section XII.B.1., above, this Lease Agreement and all the rights, titles
and interest under it will cease on the date that title to tlie Lease Premises
vests in the condemning authoi7ty, at�d the proceeds of the condemnation
shall be the property of Lessor.
3. If only part of the Leased Premises is talcen or transferred, as described in
Section XII.B,1., above, this Lease Agreeinent sha11 terminate if, in Lessee's
reasonable judgtnent, the remainder of the Leased Premises is in such a
location, or is in such form, shape or reduced size, that Lessee's operations
cannot be effectively and practicably operated upon the re�naining poi�ion of
the Leased Prenuses. In such event, this Lease Agreement and all rights,
title and interest wider it will cease on the date that the title to the pol�tion of
the Leased Pz•emises talcen or t�ansfei7�ed vests in tl�e condemning authority.
The proceeds of the condemnation sha11 be owned by Lessor.
4. Izx the event part of the Leased Prenuses is talcen or transfei7�ed as described in
Section XII,B.1., abova, and, in Lessee's reasonable judgment, tha remauider
of the Leased Premises is in such a location and ii� suc11 foi7ii, shape or size,
that Lessee's operations may be effectively and practicably operated on the
reinaining poi�tion of the Leased Premises, this Lease shall terminate with the
Page 19
respect to the portion of the Leased Pxemises talcen or transfei7ed as of the
clate iitle to such portion vests ui the condemning authority, but sha11 continue
in full %rce with respect to the portion of the Leased Pramises not talcen or
transfeired, Notwithstanding the pa��tial telrnina�ion of this Lease Agreeinent,
Lessee shall pay to I.,essor One Hundred Percent (100%) of the rent due and
payaUle under this Lease Ageeement as if sucl� partial talcing had not
occui7ed. The proceeds of the condemnation shall be ot�nied by Lessox.
5� Nothu�g contained in tlus Article XII shall be construed to prohibit Lessox
fi'om voluntarily conveyizig all or pa��t of the Leased Premises to any part�,
with condemning authority un.der state or federal laws, however, any such
voluntary conveyance shall be treated as a taldng within the ineaning of this
Article X1I.
6. Notwithstanding the above, in the event the condemuing authoi7ty, as
described in Seetion XII.B.1., above, is the Lessor, the proceeds of the
condeiruiatioii attributable to the Leased Premises shall be the pxoperty of
Lessee,
XIII. INSURANCE
A• REOTJIRED INSURANCE, Regaxdless of tl�e activities contemplated under tlus
Lease Agreement, Lessee shall maintain continuously in effect at all times during the term
of t�iis Lease Agreexnent, at Lessee's sole expense, the following minimum insurance
coverage:
1. Commercial General Liability coverii�g t11e Lessee, its employees, agents,
tenants and independei�t contractors, and its operations on the Airport,
Coverage shall be in an amount not less than $1,00�,000 per occunence and
provide coverage for premises/operations and cont�actual liability AND
where exposure exists in the opuuon of Lessor, coverage for;
products/completad operations; explosion, collapse and underground
property damage; and envu�onmental impairment.
2• All risk property insurance on a oiie-lituidred percent (100%) replacetnent
cost basis covez•ing loss or damage to all facilities and improvements
located on the Leased Premises, either as a part of tlus Lease Agreement oz•
erected by the Lessee subsequent to this Lease Agreeinent. Under no
circumstances shall the Lessor be liable for any damages to fixtures,
n�erchandise or other personal property oithe Lessee or ifis sub-lessees.
3• Busi�less Automobile Liability to include coverage for Owned/Leased Autos,
Non-Owned Autos and Hired Cars:
For operation in aircraft movement areas the lixnit of liability shall be
$100,000 per occurrence.
Page 20
For other operations the limit of liability shall be consistent with the amount
set by State Law.
B. ADDITIONAL COVERA,GrES. In addition to tlie above referenced coverage, the
following insi.uance is required if, ui the opinion of Lessor, the activity or exposure exists or
is contemplated:
1, Aircxaft FueU0i1 Storage and Dispensing — Comprehensi�ve Coznmercial
General Liability shall include coverage or separate coverage for
Environmental Impairment Liability.
2. Aircraft Sales oz• Aucraft Cl�u-ter and Air Taxi — Aircraft Liability in the
amount of $1,000,000 per occuz�rence to include Hull Coverage and
Liability. In additaon, Passenger Liability in an amount of $100,000 per
person (per passenger seat) shall be provided.
Aircraft Rental or Flight Traiz�ing - Aircraft Liability in the arnount of
$1,�00,000 per occiurence to include Hull Coverage and Liability, Passenger
Liability in the amount of $100,000 per person (per passenger seat) and
Student/Reiiter Liability covering all users in the amount of $500,000 pez•
occui7�ence,
4, Specialized Commercial Flying (including crop dusting, seeding, and
spraying, banner towing and aexial advertising, aerial photography and
surveying, fire fighting, power line or pipe line pahol) - Aircraft Liability in
the amount of $1,000,000 per occurrence to include Hu11 Coverage and
Liabiliiy. In addition, Passenger Liability in an amount of $100,000 pez•
person (per passenger seat) shall be provided,
Aizcraft Storage, Maintenance a�id/oz Repair - Aircraft Liability in the
amount of $1,000,000 per occurrence to include Hu11 Coverage and
Liability, In addition, Hanger I�eepers Liability iii the amount of
$500,000 per occurrence shall be provided.
The requireinent foz• Hangar Keepers Liability shall not apply to individual
owller/operators wliose prin�►aty use of ihe hangar space is the storage of tlleir own
aircraft. The requireznent does not apply to such individuals notwithstanding the fact that
they may, fi�om time to time, perznit the storage of non-owi�ed ait•craft in the hangar space
and charge a fee for the storage of such aircraft so long as such use is iii the nature of a
rent-sl�aring agreement rather than a commercial aircxaft storage business.
C. COVERAGE REpUIREMENTS ,All uisurance covez•age shall conlply with the
followuig requirements:
All liability policies shall be endorsed to include the City of Denton, and its
officers a�id employees as an Additional Insured. All all-risk properiy
Page 21
policies shall be endorsed to name the City of Denton as a loss payee, A11
required insurance policies shall provide for a minimum of 30 days written
notice to tlze City of any cancellation or niaterial change to tl�e policy,
2, All insurance required by this Lease Agreement must be issued by a
company o�• companies of sound and adequate financial t•esponsibility and
authorized to do business in the State of Texas. All policies are subject to
the examination and approval of the City's office of Rislc Management for
theiY adequacy as to conteiit, form ofprotection andproviding company,
3, Required ins�.uance naming the City as an additional insured must be
primary iusurance and not contributai�g with a�iy other insura�ICe available to
the City whether from a thud party liability policy or othex, Said limits of
u�surance shall in no way limit the liability of the Lessee hereunder.
4, The Lessor shall be provided with a copy of all such policies and renewal
certificates. Failure of Lessee to comply with the minimunn speci£'ied amounts
or types of insurance as required by Lessox shall constitute Lessee's default of
this Lease Agi•eemeni,
5, Duriug the Lease Term, or any extension thereof, Lessor herein resezves the
right to, with 60 days notice, adjust or increase the liability insurance amounts
required of the Lessee, and to require any additional rider, endorsement,
provisions, or cei�tificates of insurance, and Lessee hereby agrees to p:rovide
any sucl� insuz'ance requirements as may be required by Lessor,
XTV, DEFAULT BY LESSEE AND LESSOR
A. EVENTS OF DEFAULT OF LESSEE. The term "Event o� Default", as used
lierein, shall mean the occuirence of any one or more of the following events:
1. Failuxe of Lessee (i) to pay any installment of rent oz• any otlier sum
payable to Lessor hereunder; or (ii) to pay or cause to be paid ad valorein
taxes (to the extent Lessor is obligated to pay or cause same to be paid),
utilities oi• iilsurance pxemiums, or any othcr payment which Lessee is to
malce under this Lease Agreement, on the date that same is due and such
failure shall continue for a period of ten (10) days after the date on which
such payment is due;
Lessee shall become insolvent, apply for or consent to tl�e appointment of a
z•eceiver, trustee, cttstodian, intervenor, liquidator or other similar official of
itself, the Leased Premises, or all or substa�itial part of Lessee's assets,
make a general assigntnent for the benefit of creditors, or coinmeiice a
voluntary case or action under any applicable banlu�uptcy, rehabilitatzon,
insolvency or other siznila�• law now or hereafter in ef%ct;
Page 22
A court having jurisdiction of or over the Leased Premises or Lessee sha11
enter a decree or order for relief in respect of Lessee in aily case or
proceeding uzider any applicable banl�uptcy, rehabilitation, insolveiicy or
other similar law now or liereafter in effect, or appointing a receiver,
ti�ustee, custodian, intezvenor, liquidator or other similar official for Lessee,
the Leased Premises, or all or a substantial part of Lessee's assets, or
ordering the winding up or liqnidation of Lessee's affairs and such decz•ee
or order shall remain unstayed and in effect for a period of sixty (60)
co��secutive days;
4. Lessee shall ma�ce a transfer in fraud of creditoz•s;
5, Abandonmezzt or cessation of use of the Leased Pxemises For the purposes
leased by Lessee, as pxovided hei•ein, for a period of thit�ty (30) consecutive
days; or
6, Lessee fails to punctually and properly perform, lceep or observe any of the
terms, covenants, agreements or conditions herein coiitained and such
failure shalI not be cured within thirty (30) days after written notice tllereof
to Lessee, unless a shortez� notice period, or no requirement of notice, is
otherwise specifically prescribed herein.
B. TERMINATION AND REMEDIES ON DEFAULT BY LESSEE.
1. In tlie event of an Event of Default by Lessee, if such Event of Default
shall be continuing after the applicable notice of default period provided in
this Lease Agreement, if applicable, Lessor may declat•e this Lease
Agreement, and all riglits and interests cz�eated by it, te�•minated. If Lessee
elects to terminate, this Lease Agreement will cease as if the day of
Lessee's election were the day originally fixed in the Lease Agreement for
its expiration. Lessor, at its option, nlay resurne possession of the Leased
Premises and re-let them for the rennainder of the Tez•m at the xent
obtainable for the account of Lessee, who shall malce good any deficiency
therein.
2. Any termination oithis Lease Agreement shall not relieve Lessee fi•oin the
obligation oipaying any sum or si.uns due and payable to Lessor under the
Lease Agreement at the time of termination and/or any claim for damages
then or previously accruing against Lessee under this Lease Agreement,
Any such termination shall not prevent Lessor from enforcing the payment
of any suck� sum or sums or claim foz damages by any remedy provided by
law, coiit�act, equity, ox otherwise, including without linutation,
recovering dainages from Lessee arising froni or related to any defauli
under this Lease Agreement, All Lessor's rights, options and remedies
under this Lease Agreement shall be consti�ued to be cumulative, and no
one of then� is exclusive of the other. Lessor may pursue any or all such
Page 23
remedies or any otl�er remedy or relief provided bq law, contract, equity or
otherwise, whether or not expressly stated in this Lease Agreement.
3, In the event of an Event of Default by Lessee, Lessor inay, but shall not be
z•equired, reinedy ihe Event of Default by any necessary action and, in
connection with such remedy, may pay expenses and costs related to such
curative efforts. In such event, Lessee sha11 pay Lessor fox all sums
expended or obligations incurred by Lessor in connection with curing
Lessee's defauli.
4. Lessor and Lessee agree tliat, for the puiposes of posting notice presci�ibed
by Section 93.002 (� of the Texas Property Code, the fxont door of the
Leased Premises is the south facing entry to the building at 910 Aeronca,
Denion, Texas.
C. EVENTS OI' DEFAULT OF LESSOR. The term "Event of Default", as used
herein, shall mean that Lessor defaults in performing a�iy term, agreement or covenant
that Lessor is required to perform undex the Lease Agreement, and such default shall not
be cured within ninety (90) days after written notice thexeof to Lessor describing with
specif'icity the claim of default, along with all required actions of Lessor to cure such
default. It is expressly agreed and stipulated that until such notice of default is provided,
and such cure period has expired, no such act or event shall be deemed an Event of
Default by Lesso� hereunder.
D• REMEDIES ON DEFAULT BY LESSOR, If Lessor defaults in performing any
terin, agreeix�ent or covenant that Lessor is required to perform under this Lease
Agreement, Lessee tnay, after notice to Lessor, as provided in Section XIV,C,, reinedy
the Event of Default by any necessary action and, in connection with such remedy, may
pay expenses. Lessor shall pay Lessee all sums reasonably expended or reasonable
obligations incuxred by Lessee iia connection with remedying Lessee's default, so long as
such claimed default is an Event of Default hereundex•. Lessee may, if not so reiinbursed,
deduct the costs az�d expenses from rent subsequently due under this Lease Agreement.
XV. ASSUMPTION BY UNITED STATES GOVERNMENT
Lessee, subject to the terms hereof, inay tet7ninate this Lease Agreement and its
obligatioi�s hereunder, by providing thirty (30) days written notice, upon or within thirty
(30) days after the assumption or recaptut�e by the United States Gove�nment, or any
autliorized agency thereof, of the operation of the Airport and the Leased Preinises, to the
resulting extent that the uses of the Leased Premises, as prescribed in this Lease Agreement,
cannot effectively and practicably be operated by Lessee, in the reasonable judgment o:f
Lessor.
Page 24
XVI. MISCELLANEOUS PROVISIONS
A. ENTTRE AGREEMENT, Tkus Lease Agreement constitutes the entire
understanding between the pa��ties and as of its Effective Date supe�•sedes all prior oz•
independent agreements between the �at�ties covering the subject matter hereof Any change
or modificatioil hereof shall be in writin.g duly authoz•ized and signed by both pat�ties,
B, BINDING EFFECT, All covenants, stipulations and agreements lierein shall run
with tlie la.nd and extend to, bind and inure to, the benefii 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 administxative agency having jurisdiction, the entire Lease Agreement shall not
be void; but the zemaining provisions shall continue in ef,fect as nearly as possible in
accordance with the oi7ginal intent of the parties.
D. NOTICE. Notices or othex communications required or pernlitted to be given under
this Lease Agreement must be (i) given in writiiig and personally delivered or mailed by
prepaid certified or registered mail, rettun xeceipt requested; or (ii) transmitted by telephonic
facsimile, as follows:
1. If to Lessor, addressed to:
City Manager
City of Denion
21 S E. McI�inney Street
Denton, Texas 76201
Fax No.940.349.8596
With copies to:
Airport Manager
5000 Aizport Road
Denton, Texas 76207'
Fax No. 940.
City Attorney
215 E. McKinney
Denton, Texas 76201
Fax No, 940.382.7923
2. If to Lessee, addressed to:
Pz•esident
Fiz•st Fuiancial Resources, Inc.
Page 25
611 Ki.tnberly Drive
P,O. Box 271
Denton, Texas 76202
Fax No.: 940.383.2499
With Copies to;
Any notice provided herein shall be deemed to have been given (whether actually
received or not) on the day it is personally delivered as aforesaid, or, if niailed, on the tlzu�d
day after it is mailed as aforesaid, or, zf t�•ansnutted by telephonic facsimile, on the day such
iiotice is transmitted, wlucheve�• is earliest to occur. Any party may change its address for
the ptuposes of this Lease Agreement by giving r�otice ai such chaz�ge to the othei• pat�ties
pursua�lt to this Sechon XVI.D,
E. HEADINGS. The headings used it� this Lease Agreement are intended for
coilvenience of re%rence only and do not define or limit the scope or meaning of any
provision of this Agreement.
F. GOVERNING LAW AND VENUE, THIS LEASE AGREEMENT IS T� BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS
AND IS FULLY PERFORMABLE IN DENTON COUNTY, TEXAS. EXCLUSNE
VENUE FOR ANY ACTION RELATED TO THIS LEASE AGREEMENT SHALL BE
1N A COURT OF CQMPETENT NRISDICTION 1N DENTON COUNTY, TEXAS,
G, NO WAIVER. No waiver by Lessor or Lessee of any de£ault or breach of covenant
or teirii of this Lease Agreement may be heated as a waiver of any subsequent default or
breach of the same or any other covenant or term of this Lease Agreement.
H. NO AGENCY, During all times that this Lease Agreemeni is in effect, the pai�ies
agree ihat Lessee shall not in any event be deemed an agent or employee of the Lessor, nor
shall this Lease Agreement be construed to create or constitute a joint enierprise.
I. FORCE MAJEURE, None of the Parties shall be in default or otlierwise liable for
any delay in or failure of performance under this Lease Agreement if such delay or failure
arises by any reason beyoz�d their reasonable contxol, including any act of God, any acts o�
the common enemy or tez7�orism, the eleinents, eaxthqualtes, floods, fires, epidemics, riots,
failures or delay in transpoi�tation or communications. However, lacic of fiinds shall not be
deemed to be a reason beyond a party's reasonable control. In the event either party herato
is not able to perform undex� fi�us Lease Agreement due to an alleged event of force majeure,
as set foi�th herein, such party shall provide notice to the othei• party, on or before five (5)
calendar days after the occu�t�•ence of such event (i) specifically describing such force
majeiue event; (ii) describing witli specificiiy the acts to be talcen by the party claimulg
kage 26
force rz�ajeure to remedy the force majeure event; and (iii) the estimated time to remedy the
force majeui•e event. In the event the notice as set %rth hez�ein is not provided it shall be
deemed for all ptuposes that no such force m�ajeure event has occul7�ed.
r. RELEASE OF LESSOR. If Lessor sells or transfers all or part of the Leased
Premises a�1d as a part of the transaction assigns its interests as Lessor in tlus Lease
Agreemei�t, then as of the effective date of the sale, assignment or transfer, Lessor shall have
no fiu-ther Iiability under this Lease to Lessee, except with respect to liability matters that
have accrued and are unsatisfied as of such date, Underlying this release is the pai�ties'
intent that Lessor's covenants and obligations, express and iznplied, uvder this Lease
Agreement will bind Lessor and its successors and assigns only during and in respect of
their successive periods of ownership of the underlying fee estate of the Leased Preznises.
K, LESSE� REFERENCES. In the event requested by Lessor, Lessee shall deliver,
fi•om time to time as requested, credit and baril�ing references as Lessor may reasonably
request, dl.uing the term of this Lease Agreement.
L. MEMOR.ANDITIVI OF LEASE, Upon reqtiest of eitl�er pat�ty hereto, fihe pai�ties
sha11 execute a Memorandum of Lease for il�e purpose of imparting to the public notice of
the existence of this Lease Ag7•eement, and/or its subsequent amendnient, modification or
early teitininatioii, to be filed in the Real Property Records of Denton County, Texas.
M. AIRPORT SPONSOR. Notwithstauding any provision contained herein to the
conha�y, Lessor may liiiiit or temporarily obsnuct access to the Leased Premises a�id/or
Public Areas of the Airpoi�t in connection with or related to events occut�ng at the Airpoi�t.
Lessee stipulates that Lessor shall have such right to limit or temporarily obst�uct such
access and hexeby releases Lessor, its officers, elected officials, agents and employees from
any losses, damages or claims of any lcind or type that Lessee may have related to such
limited or obst�ucted access. Unless this Lease Agreement otherwise allows such
obstiuciion or Lessor and Lessee otherwise agree, Lessor shall not completely obstruct
access to the Leased Premises for a period in excess of twenty-four (24) consecutive hours
related to such special events.
N, SUBLESSEES AIVD ASSIGNEES. In the event this Lease Agreement provides
applicability of any of its pz•ovisions to sub-lessees or assigns, such provision shall be
deemed to mean solely ihe sub-lessees or assignees of Lessee, as may be permitted by
Lessor,
�. TIME OF ESSENCE. It is expressly agreed by Lessor and Lessee that time is of the
essence with respect to this Lease Agreement.
IN WI'TNESS 'WHEREOF, the parties have executed this Lease Agreement as of tk�e
Effective Date first above w�itten.
Page 27
CITY OF DENTON, TEXAS, LESSOR
BY: �
GEORGE ,C�MPBELL
ATTEST:
J�NNIFER WALT'ERS, CITY SECRETARY
ANITA BURGESS, CITY ATTORNEY
BY: � i ,,� �
,
�
ITRST FINANCIAL .RESOURCES,INC., LESSEE
BY: .
�.�� n
Page 2g
ACKNOWLEDGMENTS
THE STATE OF TEXAS
COUNTY OF DENTON
�f� 2. ���
Tlus instrumeiit was acltnowledged before xne on the %� � day o �- b
George C, Campbell, City Manager of tha City of Denton, exas, on ehalf of said
niunicipality.
.
� ,,,�„��,,,
,�e.a�Y��.;; JANE E. RICHARDSON
�=ai 'O� Notary Public, State of Texas
� :,,���.,r ,My Cammission Expires
+
'•'„�� �it; � June 27, 2013
THE STATE OF TEXAS §
COUNTY OF DENTON §
� �� �.
N ARY PUBLIC, STATE OF TEXAS
�
This inst�umeiit was acicnowledged befoze me oi� the �v�day of �iu , 2011 by
�^ L � ��
,
� � ������.
NOT Y PUBLIC, STATE OF TEXAS
AILIE 1WN �plllll�
NAr Co�ton Et�inr
M.r t�, soTa
a
Page 29,