2012-110ox�rNaNCE No. 2012-110
AN ORDINANCE OF THE CITY OF DENTON, TEXAS APPROVING AN ESTOPPEL
CERTIFICATE TO HANGARS PLUS, LLC AND NSTIN STATE BANK FOR HANGARS
LOCATED AT 4846 LOCKHEED AND 4888 LOCKHEED AT DENTON AIRPORT; AND
PROVIDING AN EFFECTIVE DATE.
VVHEREAS, on March 15, 2012 the City of Denton, Texas (hereinafter the "City")
entered into that certain Airport Lease Agreement with Hangars Plus L.L,C. ("Hangars Plus") for
property located at 4846 and 4888 Locicheed at Denton Airport ("Lease"); and
WHEREAS, Hangars Plus has requested the City to enter into a Lease Estoppel
Agreement ("Lease Estoppel") with it and Justin State Bank ("JSB") to facilitate the financing of
a mortgage loan to Hangars Plus under the Lease; and
WHEREAS, at its meeting of May 8, 2012 the City of Denton Council Airport
Committee recommended that the City Council approve the Lease Estoppel; and
WHEREAS, the City Council deems it in the public interest to enter into a Lease
Estoppel with Hangars Plus and JSB, which will amend the Lease and will further facilitate the
financing of a mortgage loan to Hangars Plus under the Lease; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The City Manager or his designee is hereby authorized to execute a Lease
Estoppel between the City of Denton, Hangars Plus and JSB in substantially the form of the
Lease Estoppel, E�ibit A, which is attached hereto 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 �J! ��
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
day of , 2012.
--�%�
�
MARK A. B RR� GHS, MAYOR
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
L �
BY: �
Page 2
Exhibit A '
LEASE ESTOPPEL
This Lease Estoppel (this "Aqreement" dated �May, 2012, is entered into by the City of
Denton, Texas, a municipal corporation (hereinafter called "Lessor" and Hangars Plus, L.L.C.
(hereinafter called "Lessee), and Justin State Bank, (hereinafter called "Lender"
WITNESSETH:
WHEREAS, Lessee desires to obtain financing through Lender to finance purchase and improve
aircraft hangars and related aviation facilities located on the leased premises at the Airport; and
WHEREAS, Lender requires the parties to execute this Agreement before it will provide financing
to Lessee, the proceeds of which will be used to refinance the Improvements;
NOW THEREFORE, in consideration of the promises and mutual covenants contained in this
Agreement, the parties agree as follows:
ARTICLE 1 — DEFINITIONS
As used in this Agreement, the following terms shall have the following meanings:
Loan: the loan from Lender to Lessee extended pursuant to the Authorization,
Lease: The Airport Lease Agreement Commercial Operator dated March 15, 2012 by and
between the City of Denton, Texas, a municipal corporation, as lessor, and Hangars Plus LLC, a Texas
Limited Liability Company, as lessee,
Loan Documents: the documents that are now or hereafter executed in connection with or as
security for the Justin State Bank loan, including without limitation, any promissory notes, loan
agreements, servicing agent agreements, guarantees, deeds of trust, security agreements, certifications,
and affidavits.
Pro ert : The leasehold estates in all that certain parcel of land situated in the WILLIAM NEIL
SURVEY, Abstract Number 970, Denton County, Texas, and being located in the Southeast Airport
Addition, an addition in the City of Denton, Denton County, Texas, according to the Plat thereof recorded
in Cabinet C, Page 295, Plat Records of Denton County, Texas, and being also known as 4846 Lockheed
Lane and 4888 Lockheed Lane.
ARTICLE 2 — AGREEMENTS
1. Lessor's Consent to Grantinq and Existence of Liens. Lessor consents to the granting and
existence of liens against Lessee's leasehold estate in the Property to secure amounts due
under the Loan Documents,
2. Lease Modifications and Cancellations. The Lease will not be modified or cancelled without
Justin State Bank's prior written consent. In the event the Lease is cancelled or terminated
pursuant to Article II or XIII and any other provisions of the Lease, Justin State Bank shall
have the right to either (1) acquire the Lease and assume all the Lessee's rights and
obligations under the Lease, or (2) present to the Lessor a replacement Lessee acceptable to
Lessor in its reasonable approval, to assume all the Lessee's obligations under the Lease.
3. Justin State Bank's Riqht to Acquire Leasehold Estate. If there is a default under the Loan
Documents and the default continues without being cured, then Justin State Bank will have
the right to acquire the leasehold estate through foreclosure or assignment of lease in lieu of
foreclosure. Justin State Bank's acquisition of the leasehold estate will not constitute a
default or termination of the Lease.
4. Justin State Bank's Riqhts as Lessee. If Justin State Bank acquires the leasehold estate as
stated in paragraph 3 above, then it will succeed to the rights of Lessee under the Lease,
including without limitation, the right to exercise any options exercisable by the Lessee under
the Lease. And in addition, and notwithstanding anything contained in the Lease to the
contrary, Justin State Bank, as lessee under the Lease, will have the right (1) to assign the
Lease, or (2) to sublease all or any part of the leased premises to a lessee that is acceptable
to Lessor in its reasonable approval. Provided, however, in the event of a assignment of the
Lease, Justin State Bank or the assignee shall pay all of Lessor's administrative cost of
processing such assignment as described in paragraph 2.
5. Justin State Bank's Duties as Lessee: Lessor's Exclusive Remedy for Breach. If Justin State
Bank acquires the leasehold estate as stated in paragraph 3 above, then it will be obligated
to pay rent and to perform Lessee's other obligations under the Lease, including any
delinquent or back rental or other charges owed as a result of the default.
6. Notice of Material Defaults. Lessor agrees to provide Justin State Bank with written notice of
all material defaults under the Lease. A material default is any default upon which Lessor
intends to take action.
7. Justin State Bank's Riqht to Cure Defaults. Justin State Bank shall have the right to cure any
or all defaults under the Lease.
8. Opportunity to Cure Monetarv Defaults. In the event of a material monetary default under the
Lease, Lessor agrees to give Justin State Bank a period of 90 days to cure the default before
exercising any of its remedies under the Lease. The first day of the ninety day period is the
day Justin State Bank actually receives the default notice.
9. Opportunity to Cure Non-Monetarv Defaults. In the event of a material nonmonetary default
under the Lease, Lessor shall take no action to exercise its remedies under the Lease if
within forty-five (45) days following receipt by Justin State Bank of a default notice: (1) Justin
State Bank has cured any non-monetary defaults that are susceptible of being cured by it;
and (2) Justin State Bank has commenced all necessary action to obtain possession of the
Property, Justin State Bank is diligently proceeding to obtain possession of the Property, and
any rental and other amounts due under the Lease with all interest, penalties and other
charges that may be due under the Lease, have been and continue to be paid to Lessor.
10. Notices. All notices, requests, demands, and other communications under this Agreement
shall be in writing and shall be deemed to have been duly given on the date of service if
served personally, or on the day it is deposited in the United States mail, by first class mail,
registered or certified, postage prepaid, and properly addresses as follows:
Lessor: City Manager
City of Denton, Texas
215 E, McKinney St.
Fax No. (940) 349-8596
Lessee: Hangars Plus LLC
Anthony Montgomery
President
826 George St.
Lantana, TX 76226
Lender: Justin State Bank
Howard Young, President'
P. O. Box 97
Justin, TX 76247
11. Subordination of Landlord's Lien. Lessor subordinates all its liens and security interests in
each lessee's personal property located on the Property to the liens and security interest of
Justin State Bank in such personal property.
12. Condemnation Awards and Hazard Insurance Proceeds. Notwithstanding anything contained
in the Lease to the contrary, the provisions of the Loan Documents shall govern and control
the use and application of the proceeds of any condemnation award or casualty insurance
policy payable with regard to condemnation or casualty.
13. Conflicts. In the event of a conflict between the terms of the Lease and this agreement, the
terms of this agreement will control, provided all terms of the Lease which are not in conflict
with this Agreement shall remain in full force and effect.
14. Bindinq Effect. This agreement shall be binding upon the undersigned and their successors,
assigns, and legal representative. This agreement is intended to benefit and may be
enforced by the Lessor, Justin State Bank, and their successors, assigns, and legal
representative. This Agreement is given to assure the Lender, Justin State Bank, their
successors and assigns, as to the interpretation of certain Lease provisions affecting Justin
State Bank's interest. It is not intended to confer nor shall it confer any right or benefit upon
the Lessee or any third Party other than Justin State Bank.
CITY OF DENTON, TEXAS,
a municipai corporation
By:
GEORGE C. CAMPBELL, City Manager
Attest:
JENNIFER WALTERS,
City Secretary
By.
Approved as to legal form:
ANITA BURGESS
City Attorney
gy; ._. ��� �
STATE OF TEXAS
COUNTY OF DENTON
This instrument was acknowledged before me on � �
By GEORGE C. CAMPBELL, City Manager of CITY OF DENTON, EXAS, a municipal corporation, on
behalf of said municipal corporation.
Notary Public, State of Texas
•d�Y�Z'' JENNIFER K. WALTERS
,•��� a;�,.
_�°•' •°": Notary Public, 5tate of Texas
' �yc My Commission Expires
�':;;;Fa�S�;;' December l9, 2014
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Hangars Plus, LLC,
A Texas Limited Liability company
3���' � ���'
By: Anthony Montgomery
Its President
THE STATE OF TEXAS
COUNTY OF DENTON
BEFORE ME, the undersigned notary public on this day personally appeared ANTHONY
MONTGOMERY, known to me or proved to me through description of identity card or other document to
be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he
executed the same as President and as the act of Hangars Plus, LLC, a Texas limited liability company,
and for the purposes and consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this < day of � , 2012.
JUl1E fINM MULUNS
My Comn�=ion F.�ptns
Mn► 27, Z018
Notary Public, State of Texas
JUSTIN STATE BANK
a Texas
By:
THE STATE OF TEXAS
COUNTY OF DENTON
BEFORE ME, the undersigned notary public, on this day personally appeared HOWARD
YOUNG, proved to me through description of identity card or other document to be the person whose
name is subscribed to the foregoing instrument and acknowledged to me that she executed the same as
the act of JUSTIN STATE BANK, a Texas corporation, as its President and C. E. O. and for the purposes
and consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this � day of � ,
2012.
Notary Public, State of Texas
AFTER RECORDING, RETURN TO: � LESLtE ENRlOHT
�,..-•.'�
+���� Notery Public
�., � _ �; STATB OF 7EXAS
JUSTIN STATE BANK CNa �,iou
P. O. Box 97 -. �~.
Justin, TX 76247