2017-177s:\Iegal\ourdocuments\ordin a nces\17\airport -consent to assignment of barn lease.doc
ORDINANCE NO, 2017-177
AN ORDINANCE OF THE CITY OF DENTON, TEXAS APPROVING A CONSENT TO
ASSIGNMENT OF AN AIRPORT LEASE BETWEEN BAM DENTON MANAGEMENT
VENTURES, LLC AND SYKES-VAUGHAN INVESTMENTS, LLC; AND PROVIDING AN
EFFECTIVE DATE.
WHEREAS, on August 4, 2015 the City of Denton, Texas (hereinafter the "City")
entered into that certain Airport Lease (the "Lease") with BM Denton Management Ventures,
LLC (hereinafter "BAM") at the Denton Enterprise Airport (hereinafter the "Airport"); and
WHEREAS, BAM has agreed to assign its interest in the Lease to Sykes -Vaughan
Investments, LLC (the "Sykes -Vaughan") as evidenced by that certain Assignment and
Assumption of Lease Agreement, dated June 15, 2017, attached hereto as Exhibit A; and
WHEREAS, the Lease requires written consent of the City for the Assignment to N.
effective and BAM has requested the City for such consent; and
WHEREAS, at the June 5, 2017 meeting of the Council Airport Committee, the
committee recommended that the City approve the Consent by a vote of 2 - 0; and
WHEREAS, the City Council deems it in the public interest to give consent to the
assignment contemplated above; NOW, THEREFORE,
SECTION 1. The findings and recitations contained in the preamble of this Ordinance
are incorporated herein by reference.
5--j-111SICTION 2, The City Manager or his designee is hereby authorized to execute a
Consent to the Assignment of Airport Lease in the form attached hereto as Exhibit A and made a
part of this Ordinance for all purposes.
SECTION 3. This Ordinance shall become effective immediately upon its passage and
approval.
1
PASSED AND APPROVED this the
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
AARON LEAL, INTERIM CITY ATTORNEY
BY:
day -F -T'.1, _ '1A1 -7
HIBIT
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AIRPORT LEASE
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement ("Agreement") dated as of June , 2017, between
BAM Denton Management Ventures, LLC, d/b/a Business Air, a Texas limited liability company
("Assignor"), and Sykes -Vaughn Investments, LLC, a Texas limited liability company ("Assignee"), subject
to the consent of City of Denton, Texas ("Lessor").
Recitals
A. Assignor as Seller and Assignee as Buyer have entered into an Asset Purchase Agreement
dated as of June 30, 2017 ("Purchase Agreement"), providing (among other things) for the assignment to
and assumption by Assignee of all rights and obligations of Assignor as lessee ("Lessee") under that certain
Airport Lease Agreement Fixed Base Operator, dated as of August 4, 2015, between the City of Denton,
Texas, a municipal corporation, as lessor ("Lessor"), and Assignor as Lessee, of real property at the Denton
Enterprise Airport commonly known as 5007 Airport Road, Denton, Texas (the "Airport Lease"). A true and
correct copy of the Airport Lease is attached hereto as Exhibit A.
B. Consent of Lessee is required under Section XI of the Airport Lease in order to effect the
assignment and assumption provided for herein, such consent to not be unreasonably withheld.
C. Subject to the closing of the transactions provided for in the Purchase Agreement and the
consent of the Lessor provided for herein, the parties desire to effectuate the assignment and assumption of
the Airport Lease as provided for herein.
Terms
Therefore, in consideration of the mutual promises and covenants contained in this Agreement, the
parties agree as follows:
1. Effective Time. The assignment and assumption of the Airport Lease described in this
Agreement shall become effective at 12:01 a.m. immediately following the Closing Date provided for in the
Purchase Agreement, subject to (a) Lessee consent from the City of Denton to the assignment of the Airport
Lease as provided for herein, and (b) fulfillment of all other Closing conditions provided for in the Purchase
Agreement.
2. AssiEnment. For valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Assignor does hereby assign, sell, convey, grant, bargain, deliver and confirm to Assignee, its
successors and assigns, forever, all of Assignor's right, title and interest under the Airport Lease on and after
the Effective Time.
3. Assumption. For valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Assignee does hereby assume and agree to pay, perform, and discharge all of the obligations
of Assignor under the Airport Lease arising on and after the Effective Time.
4. Limited Power of A: poinfinent. Assignor hereby constitutes and appoints Assignee, its
successors and assigns, the true and lawful attorney of Assignor, with full power of substitution, in the name,
for the benefit and at the expense of Assignee to take any and all reasonable action designed to provide
Assignee the benefits under the Airport Lease, including without limitation the enforcement for the account of
Assignee of any and all rights arising after the Effective Time against the other party thereto. Assignor
acknowledges that the foregoing powers are coupled with an interest and shall be irrevocable by it. Assignee
shall be entitled to retain for its own account any amounts properly collected pursuant to the foregoing
powers, including any amounts payable as interest with respect thereto, and attributable to periods on and
after the Effective Time but shall remit to Assignor any amounts payable attributable to periods prior to the
Effective Time.
5. Benefit. This instrument shall be binding upon and inure to the benefit of the respective
successors and assigns of the parties.
Executed as of the date set forth above.
Assignor:
Assignee:
BAM D ent Ventures, LLC, Sykes -Vaughn la„vestnients,,I C.,
dll"„W
BY m ...... BY -
....-.
CONSENT
The City of Denton, Texas, as Lessor does hereby consent to the foregoing assignment and
assumption of the Lessee's interest in the Airport Lease.
City of I1!enton, Texas ',Le, or
By �..
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:�
APPROVED D TO FORM:
i l`Y Nrl'ORNEY
CITY OF DE TO , TEXAS
BY.
2
Airport Lease Attached
BAM Denton Management Ventures, LLC
ORDINANCE NO, 2015-259
AN ORDINANCE APPROVING A FIXED BASE OPERATOR AIRPORT LEASE
AGREEMENT BETWEEN THE CITY OF DENTON, TEXAS AND BAM DENTON
MANAGEMENT VENTURES, LLC; 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 between the City of Denton and BAM Denton Management Ventures, LLC in
substantially the form of the Fixed Base Operator 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
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
AP f'1 y 1 a 1) A TO LEGAL FORM:
AN[TA' lll.114,i SSS, CITY ATTORNEY
B _
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day of 2015.
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11' WATTS, MAYOR
BAM Denton Management Ventures, LLC — August 2015
AIRPORT LEASE AGREEMENT
FIXED BASED OPERATOR
This Lease Agreement is made and executed to be effective as of the Fourth day of
August, 2015 (the "Effective Date") at Denton, Texas, by and between the City of Denton,
Texas, a municipal corporation, hereinafter referred to as "Lessor", and BAM Denton
Management Ventures, LLC, a Texas limited liability company, hereinafter referred to as
"Lessee".
WITNESSETH:
WHEREAS, Lessor now owns, controls and operates the Denton Enterprise Airport
(the "Airport") in the City of Denton, County of Denton, State of Texas; and
WHEREAS, Lessee is the current lessee pursuant to that certain Consent of Sale
Agreement dated October 29, 2014 for fixed base operations dated December 15, 2004 as
approved by Ordinance 2004-380 (the "Existing Lease"); and
WHEREAS, Lessee and Lessor desire to enter into this Lease Agreement (sometimes
called this "Lease Agreement", "Agreement", or "Lease") in order to extend and supercede
the Existing Lease subject to the terms and conditions contained in this Agreement; and
WHEREAS, pursuant to this Agreement Lessee is leasing the original 9.1 acres of
land as approved by City of Denton City Council Resolution R2001-063 dated October 16,
2001 and as described in Attachment `B" attached hereto and made a part hereof by
reference, and, Parcels A and B as described in Attachment "A" attached hereto and made a
part hereof by reference; and
WHEREAS, pursuant to this Agreement Lessee is also granted a lease of Parcels C
and D as described in Attachment "C" attached hereto and made a part hereof by reference;
and
WHEREAS, pursuant to this Agreement Lessee is leasing 2.519 acres of land as
approved by City of Denton City Council Ordinance 2005-376 dated December 13, 2005 as
subsequently amended and as described in Attachment "E" attached hereto and made a part
hereof by reference; and
WHEREAS, pursuant to this Agreement Lessee is leasing 21,842 square feet of land
as approved by City of Denton City Council Ordinance 2007-063 dated March 27, 2007 as
described in Attachment "F" attached hereto and made a part hereof by reference; and
WHEREAS, pursuant to this Agreement Lessee is leasing 1.338 acres of land as
approved by City of Denton City Council Ordinance 2010-194 dated August 17, 2010 as
described in Attachment "G" attached hereto and made a part hereof by reference;
NOW, THEREFORE, for and in consideration of the promises and the mutual
covenants contained in this Agrecinent, the parties agree as follows:
I.OND.ITII _OFL A L,_AQ71,
NOTWITHSTANDING ANY LANGUAGE TO THE CONTRARY HEREINAFTER
CONTAINED, THE LANGUAGE IN PARAGRAPHS A THROUGH D OF THIS
SECTION SHALL BE BINDING.
A TSR N'CI1?LES CSF' PERATIONN. The right to conduct aeronautical and related
activities for furnishing services to the public is granted to Lessee subject to Lessee
agreeing:
1. To furnish said services on a fair, equal and not unjustly discriminatory basis
to all users thereof; and
2. To charge fair, reasonable and not unjustly discriminatory prices for each unit
or service; provided, that Lessee may be allowed to make reasonable and
nondiscriminatory discounts, rebates, or other similar types of price reductions
to volume purchasers.
B NON-DISCRIMINATION: INATION: Lessee, for itself, its personal representatives,
successors, 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;
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 Title 49, Code of Federal Regulations, Department
of Transportation, Subtitle A, Office of the Secretary, Part 21, Nondiscrimi-
nation in Federally assisted programs of the Department of Transportation -
Effectual of Title VI of the Civil Rights Act of 1964, as said Regulations may
be amended.
C D rr'T-T' C)T TKU-ITUTT-NT J Arc R A T KYP A TAT A TD OD A r'T It is clearly
XF f�R. J,M i Y,..l� xA.1 p..d'A A� M0.��_�..v-, T�..,� �,..m �... ...... .......... .._..,_..,..—....rc..........,�.�...
AIRPORT LEASE AGREEMENT BAM DENTON MANAGEMENT VENTURES - Page 2
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.1QN-EX ; LtJSl F,' [M ITT. 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 good repair the landing area
of the Airport and all publicly owned facilities of the Airport, together with the
right to direct and control all activities of Lessee in this regard.
3. During time of war or national emergency, Lessor shall have the right to lease
the landing area or any part thereof to the United States Government for
military or naval use, and, if such lease is executed, the provisions of this
instrument insofar as they are inconsistent with the provisions of the lease to
the Government, shall be suspended.
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. The hangar/office/shop complex as currently proposed
as provided in Section II.D. does not violate this provision.
5. This Lease Agreement shall be subordinate to the provisions of any existing or
future agreement between Lessor and the United States or agency thereof,
relative to the operation or maintenance of the Airport.
II LEASED ASE PREMISES
Lessor, for and in consideration of the covenants and agreements herein contained, to
be kept by Lessee, and subject to the conditions contained herein, does hereby demise and
lease unto Lessee, and Lessee does hereby lease from Lessor, for the lease term described in
Article III, the following described land situated in the City of Denton, Denton County,
Texas:
AIRPORT LEASE AGREEMENT BAM DENTON MANAGEMENT VENTURES - Page 3
A. Land. The same 9.1 acre tract or parcel of land leased to Lessee under the Existing
Lease, together with improvements thereon, which property is more particularly described
in Attachment `B" attached hereto and incorporated herein by reference (the "Existing
Parcel"); and, Parcels A and B as shown in Attachment "A" attached hereto and
incorporated herein by reference; and, Parcels C and D as described in Attachment "C"
attached hereto and incorporated herein by reference; and, the tract as shown in Attachment
"E" attached hereto and incorporated herein by reference; and, the tract as shown in
Attachment "F" attached hereto and incorporated herein by reference; and, the tract as
shown in Attachment "G" attached hereto and incorporated herein by reference, all of the
Attachments "A — F" which are referenced herein as the "Leased Premises", together with
the right of ingress and egress to the Leased Premises; and the right in common with
others so authorized of passage upon the Airport property generally, subject to reasonable
regulations by the City of Denton and such rights shall extend to Lessee's employees,
passengers, patrons and invitees. For purposes of this Agreement, the term "Leased
Premises" shall include leasehold improvements constructed by the Lessee, but not
including certain easements or property owned and/or controlled by the Lessor.
B. Use of 14tel I^arin, Subject to the requirements of V.B.I., Lessee shall have the
right of ingress and egress and use of the fuel farm which is located on property that is
particularly described in Attachment "D" attached hereto and made a part hereof by
reference (the "Fuel Farm"). Lessee may in its discretion provide for the installation of one
additional 12,000 gallon above ground fuel facility at the Fuel Farm.
C I]"�°1P_1 OVEMENml PROVIDED -BY LESSOR: The only improvements provided by
Lessor, except as set forth in Article II.F. "Access to Utilities" below, shall be as follows:
Lessor shall continue to maintain the FBO Apron as depicted on Attachment `B" (the "FBO
Apron"). All maintenance costs for the FBO Apron under $2,000.00 shall be borne by
Lessor. For maintenance costs of $2,000.00 or over the cost of materials will be shared 50-
50 with the Lessor being responsible for 100% of the labor costs.
The term "Lessor improvements" shall mean those things on or adjacent to the Leased
Premises belonging to, constructed by, or to be constructed by the Lessor. 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.
D. IMPROVEMENTS 11ROVII`)IJ BY I ESS1;1'T.
1. Corlstriletioll of Unurk les. The following improvements are currently located on the
Existing Parcel: Six buildings as more particularly described in Attachment `B"
attached hereto and made a part hereof by references (the "Existing
Improvements"). The Lessee shall have the right to renovate Building 2 as described
in Attachment `B" hereto and which is owned by the City of Denton provided the
changes to Building 2 shall be approved by Lessor prior to any rehabilitation.
2 C.oiistr ucti ri of Parcel D Nivrovements. On Parcel D as shown on Attachment
"C" hereto, Lessee shall construct a commercial hangar/office facility of not less than
10,000 square feet with a minimum door height of 28 feet and a minimum door width of 90
feet, minimum aircraft staging apron of 9,000 square feet and appropriate taxiway access to
Taxiway H ("Parcel D Improvements"). Construction of Parcel D Improvements shall be
commenced no later than 360 days after the Effective Date of this Agreement and
completed no later than 540 days after the Effective Date (the "Construction Period").
Construction of Parcel D Improvements are considered commenced upon issuance of a
building permit and construction of any portion of the hangar/office facility. Construction
of Parcel D Improvements are considered complete upon the issuance of a certificate of
occupancy for the entire hangar/office facility.
Notwithstanding anything contained in this Lease Agreement to the contrary, a
failure to complete the Parcel D Improvements within the Construction Period may, at
the sole option and discretion of the Lessor, result in the immediate termination and
cancellation of this Lease Agreement only as to Parcel D upon 30 days written notice
of cancellation to Lessee. In such case Lessee's rights under the Lease Agreement as
to Parcel D will immediately cease and be forfeited, and all of Parcel D Improvements
shall immediately become the property of Lessor at no cost, expense or other
compensation paid by Lessor to Lessee; and Lessee shall immediately vacate the
Parcel D. In such case this Lease Agreement will remain in force and effect as to all
other parcels and tracts described in Attachments A — G of this Agreement.
E. EASEMENTS. Lessor and Lessee by mutual agreement may establish, on the
................
Leased Premises, easements for public access on roads and taxiways.
F Access _ l 11„ l lES. Lessor represents that there are water, sewer and 3-
phase electricity lines within close proximity to 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 term of this Lease Agreement shall be for a period of forty (40) years, com-
mencing on the 1 st day of September, 2015 and continuing through the 31 st day of August,
2055, unless earlier terminated or reduced under the provisions of the Lease Agreement (the
"Lease Term"). Lessee has the option to extend this lease under terms as provided in
Section VIII, C, 2 of this Agreement. The rental and terms to be negotiated for the option
term shall be reasonable and consistent with the then value, rentals and terms of similar
property on the Airport.
property on the Airport.
IV. PAYMP',NTS, 112mE hl,
Lessee covenants and agrees to pay Lessor, as consideration for this Lease Agreement,
the following payments, rentals and fees:
A. LAND RENTAL. Land rental shall be due and payable to Lessor in twelve (12)
equal monthly installments in the sums set forth below, on or before the 1 st day of
each and every month during the term of this Lease Agreement. Lessee has the
option to pay annual rentals and fees in whole on or before the 1 st day of October,
at the beginning of the City's fiscal year, each and every year of this Lease
Agreement.
Annual rent shall be a sum equal to $0.1942 per square foot annually for the land
area as described in Attachments "A - B" and Attachments "D - G" to this
Agreement. Monthly rental shall be 1/120' of the annual rent. However,
beginning August 1, 2017 the Original Rent will be adjusted in accordance with
Section IV.C.
Annual rent shall be a sum equal to $0.27 per square foot annually for the land
area described as Parcels C and D in Attachment "C" to this Agreement. Annual
rent for Parcel D as described in Attachment "C" shall not begin until the first of
the month following issuance of a building pennit for in provenlents as described
in Section II, D, 2 of this Agreement. Monthly rental shall be 1 /120' of the annual
rent. However, beginning August 1, 2017 the Original Rent will be adjusted in
accordance with Section N.C.
Notwithstanding the foregoing, the annual lease rental will be reduced by the current lease
rate per square foot, as adjusted by the CPI -U referenced in Section N.C., times the number
of square feet comprising all easements established in accordance with Section II.E..
B. LESSOR IMPROVEME J'S R.l ;N"I_ ` ��S. NONE: There are no Lessor
improvements on the Leased Premises. _ ..._.
C.1'AY til[^N"l",1'1:N 1 !, .,,ADJt.J,Yf rl .NFS. All payments due Lessor from Lessee
under this Lease Agreement shall be made to Lessor at the offices of the Finance
Department of the City of Denton, Customer Service Division, 601 West Hickory, Denton,
Texas, unless otherwise designated in writing by the Lessor. If payments are not received
on or before the 15th day of the month, a five percent (5%) penalty will be due as of the
16th. If payments are not received by the first of the subsequent month, an additional
penalty of one percent (1%) of the unpaid rental/fee amount will be due. A one percent
(1%) charge will be added on the first of each subsequent month until the unpaid rental/fee
payment is made. The Original Rent for the Leased Premises shall be readjusted at the end
of each one year period during the Lease Term on the basis of the proportion that the then
current United States Consumer Price Index for all urban consumers (CPI -U) for the Dallas -
AIRPORT LEASE AGREEMENT BAM DENTON MANAGEMENT VENTURES - Page 6
Fort Worth Bureau of Labor Statistics bears to the May 2015 index, which was -.,2'l .4'84'
(1982-84 = 100). Each rental adjustment, if any, shall occur on the 16th day of June,
beginning 2017, and every second year thereafter on such date.
The adjustments in the yearly rent shall be determined by multiplying the Original
Rent by a fraction, the numerator of which is the index number for the last month prior to
the adjustment, and the denominator of which is the index number applicable at the
execution of this Lease Agreement. If the product of this multiplication is greater than
the Original Rent, 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 Original Rent there shall be no adjustment in the annual rent at that time,
and Lessee shall pay the previous year's annual rent 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 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 adjustment by more than twenty percent (20%) percent.
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 Lease Term, the remaining rental adjustments called
for in this section shall be made using the formula set forth above, but by 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
Lease Term, 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 Lease Term, the remaining rental adjustments called for in this section shall be
made using the most nearly comparable statistics published by a recognized financial
authority selected by Lessor.
D ')11 l m AYME 1 S. "1° 1,1 SSOIZ,.
1. Hangar and Tic -Down own 1: ces. Lessee shall pay Lessor a percentage of all hangar
and tie -down rentals and fees collected by Lessee from persons renting facilities rendered to
Denton County Appraisal District as part of Lessee's Fixed Base Operator (FBO) service on
the Leased Premises. Such fees shall be equal to:
a. 11% of all hangar and tie -down fees through November 30, 2019.
b. 12% of all hangar and tie -down fees beginning December 1, 2019 through the
end of the Lease Term.
All such fees shall be paid monthly to Lessor on or before the 15th day of each month
during the Lease Term. The fees shall be accompanied by records showing the date and
location on the Airport where the aircraft was hangared or parked and the tail number, or
side number, of the aircraft.
2. Fuel Fees.
Lessee shall pay Lessor a fuel flow fee for use of the Fuel Farm equal to 7% of
the wholesale price per gallon of all fuel used by Lessee through June 30, 2019.
Thereafter, through the end of the Lease Term an adjustment will be made based on a
market analysis as of June 30, 2019.
E. IBESL.QR :1S. Lessee shall keep and maintain accurate records of wholesale
fuel delivered under this Agreement, and parking and hangar fees collected, for a period
of three (3) years from the date the record is made. Such records shall be kept according
to generally accepted accounting principles. Lessor or its duly authorized representatives
shall have the right at all reasonable times during business hours to inspect the books,
records and receipts of Lessee, for the purpose of verification.
FANNUAL TI I 1 1`,,'NJ. Within sixty (60) days after the end of each
calendar year, Lessee shall furnish to Lessor a certified statement of fuel deliveries, and
parking and hangar fees collected during the preceding calendar year. Lessor reserves the
right to audit said statement and Lessee's books and records, including examination of the
general ledger and all other supporting material, at any reasonable time during business
hours, for the purpose of verification.
If the audit establishes the Lessee has understated or overstated fuel sales, parking
fees, or hangar rentals collected by five percent (5%) or more, the entire expense of said
audit shall be borne by Lessee. Any additional payment due from Lessee shall forthwith
be paid to Lessor, with interest thereon at one percent (1%) per month from the date such
amount originally became payable to Lessor. Any overpayment by Lessee shall be
credited against further payments due to Lessor. Either party may refer the results of the
audit for resolution in accordance with Section W.G. (Disputes) below.
G. 1151'CJ 1. If any dispute arises as to the amount owed from fuel
deliveries or hangar or parking fees collected, the party disputing the amount and/or fee
shall notify the other, in writing, within thirty (30) days from the date the dispute arises.
Upon notification of the dispute, the disputed amount shall be submitted to a panel of
three (3) certified public accountants, one to be selected by Lessor, one to be selected by
Lessee and the third to be chosen by the first two accountants selected. This panel shall,
by majority vote, determine the rights of the parties hereunder in conformity with
generally accepted accounting principles. The fees due the accountants for such service
shall be paid by the unsuccessful party, or in the event the determination is partially in
favor of each party, the fee shall be borne equally by the parties.
AIRPORT LEASE AGREEMENT BAM DENTON MANAGEMENT VENTURES - Page 8
V. RIGHTS AND OBLIGAnON'S OFLESSEE
A 1JS 1+ 1:,P'. SED �'R WISES. . Lessee is granted the non-exclusive privilege to
engage in or provide the following on the Leased Premises:
1. The right and privilege to engage in commercial aviation activities, hereby
defined as those activities which involve the sale of aviation services for profit
to the general public and shall include the maintenance and servicing of aircraft,
which right shall include overhauling, rebuilding, repairing, inspection, and
licensing of same and the purchase and sale of parts, equipment, and accessories
therefore.
2. The sale of aircraft fuels, lubricants, and propellants within the leased area and
at such other areas that may be designated by the Airport Manager.
3. The storing of aircraft in hangars or on tie down areas owned or operated by
Lessees.
4. The sale of said fuels, lubricants, and propellants shall include the right to use
vehicles necessary for the servicing of aircraft.
S. The operation of a business of buying and selling, or renting new and used
aircraft, aircraft parts, and accessories therefore, and aviation equipment of all
descriptions either at retail, wholesale, or as a dealer.
6. The operation and sale of aerial survey, photograph, mapping, and spraying
services. (However, spraying services shall at all times comply with
applicable local, state, and national regulations pertaining to aerial spraying.)
7. The operation and sale of air taxi and sightseeing services.
8. The operation of schools for the instruction of the general public in flying,
navigation, mechanics, aerial survey, photography, aircraft design and/or
training of the general public in any art, science, craft, or skill pertaining
directly or indirectly to aircraft.
9. The operation of non-scheduled and charter air transportation of passengers.
10. The sale through coin operated vending machines of tobacco, confections, and
refreshments and the maintenance on the leased premises of appropriate
facilities therefore.
11. The undertaking of any phase of aviation activity for profit related to or in any
AIRPORT LEASE AGREEMENT BAM DENTON MANAGEMENT VENTURES - Page 9
way contributing to air transportation or aerial navigation, as long as such
activity in no way interferes or hinders any F.A.A. approved navigational aids
that may exist now or in the future at the Airport.
12. Ten years after the Effective Date of this Lease Agreement Lessee will begin
to pay a commission fee to Lessor for car rentals based on the then existing
market commission at similar sized airports.
13. The general use, in common with others authorized to do so, of all public
airport facilities and improvements which are now or may hereafter be
connected with or appurtenant to said Airport, except as hereinafter provided.
14. Ramp services, including loading and unloading of passengers, baggage, mail
and freight, and providing of ramp equipment, aircraft cleaning and other
services for persons, firms or air carriers.
No person, business or corporation other than Lessee may operate a commercial,
retail or industrial business upon the Leased Premises or upon the Airport, without prior
written consent from Lessor authorizing such commercial, retail or industrial activity.
Lessee shall be allowed to provide sleeping quarters and other accommodations
for use of an around-the-clock security guard. This provision shall not be construed to
allow family living on the leased premises, and 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 the Lessee, its tenants, invitees, or guests be permitted to reside
or remain as a resident on or within the leased premises or other airport premises.
Lessee shall file with the Airport Manager and keep current its mailing address,
telephone number(s) and contacts where he can be reached in an emergency.
Lessee shall file with the Airport Manager and keep current a list of its tenants
and sub -lessees.
Lessee shall require its employees and sub -lessees (and sub -lessee's invitees) to
abide by the terms of this Agreement. Lessee agrees it shall promptly correct or remedy
any breaches of any rules, regulations, terms, conditions or covenants by its employees or
sub -lessees.
Lessee, its tenants, employees, invitees and guests shall not be authorized to conduct
any services not specifically listed in this Lease Agreement. The use of the Leased Premises
by Lessee, its tenants, employees, invitees or guests shall be limited to only those private,
commercial, retail or industrial activities having to do with or related to airports and avia-
tion. Except as specifically authorized in this Lease Agreement, no person, business or
corporation may operate a commercial, retail or industrial business upon the Leased
Premises or upon the Airport without a lease or license from Lessor authorizing such
commercial, retail or industrial activity. The Lessor shall not unreasonably withhold
AIRPORT LEASE AGREEMENT BAM DENTON MANAGEMENT VENTURES - Page 10
authorization to conduct aeronautical or related services.
B. 1 L E jERKL(J,,,S. Lessee is required and is hereby granted the non-
exclusive privilege to engage in the business of and provide the services of a full and
complete fixed base operator. It is expressly understood and agreed that the non-exclusive
right to conduct aeronautical activities for furnishing services to the public, including the
delivery of fuel into aircraft is granted to the Lessee subject to the provisions set forth herein
and all applicable ordinances of the City of Denton. Lessee agrees to perform the following
services:
1. Fuel: To have available those grades and octanes of aviation gasoline, jet fuel
and other petroleum products normally found at similar airports, and to
provide ramp services including the sale and into -plane delivery of those
aviation fuels, lubricants and other related aviation products, and to provide
aircraft guidance and assistance within the areas of the leased premises, at least
during daylight hours, sunrise to sunset, three hundred sixty-five (365) days
per year. All fuels shall meet minimum F.A.A. requirements for aviation fuels
as set out in F.A.A. Circular 5230-4, Aircraft fuel storage handling and
dispensing, as the same may be revised, updated, or replaced by the F.A.A. or
the United States Government. All fuels which are a nationally known brand
shall meet the terms of this requirement. All fuels shall be made available
either by tank truck, stationary pump or other suitable equipment approved by
the Fire Marshall of the City of Denton and the Airport Manager; and in
accordance with the provisions of the Fire Code of the City of Denton. All
fueling operations and all fuel facilities owned or operated by the Lessee shall
be in compliance with the Minimum Fueling Standards Ordinance of the City
of Denton. All prices for fuels and other petroleum products shall be posted in
full public view at all times. Lessee agrees that it shall locate any new fuel
storage tanks in compliance with all local, State and Federal codes and
regulations. Except for major system failure not caused by Lessee's neglect,
Lessee shall maintain the Fuel Farm and its equipment in good repair
including the replacement of normal wear and tear items and making TCEQ
upgrades. Lessee's privilege to use the Fuel Farm to meet its fuel obligations
under this Agreement may be rescinded by Lessor should fuel levels at the
Fuel Farm fall below 2,000 gallons for more than 45 days.
2. RaM.Services: To provide ramp servicing of, and assistance to, aircraft,
including parking, storage and tie -down service, to both based and itinerant
aircraft upon or within facilities leased to Lessee or other areas designated by
the Lessor, at least during the Required Hours of Operation.
3. Pilot.. l,o���e: To provide a pilot lounge area, informational services, and
telephone service connections to the Flight Service Station at least during the
Required Hours of Operation.
4„ 1-Toui-s oftt LgLoru FBO will be open 6 a.m. to 10 p.m. Monday through
AIRPORT LEASE AGREEMENT BAM DENTON MANAGEMENT VENTURES - Page 11
Friday; 7:00 a.ni. to 7:00 pmi. Sauirday and Sunday, 365 days of the year.
I lowever, FBO may close on the following Holidays: Thanksgiving,
Christmas, New Year's Day, and, 4"' of ,lolly. Such hours of operation,$ are
herein called the "Required Hours of Operation".
5. Aditi n lervi es: Lessee may provide the following additional services:
a. Airframe and power plant repair (this service is the equivalent of
providing two services)
b. Flight instruction/aircraft rental
c. Aircraft sales
d. Air taxi and/or part 135 charter
e. Avionics and instrument shop/maintenance
£ Propeller repair
g. Pilot shop
h. Aircraft wash rack
i. Aircraft paint services
j. Aircraft upholstery
k. Other commercial aeronautical services as approved by Airport
Management
C. STANDARDS. Lessee shall meet or exceed the following standards:
1. Address. Lessee shall file with the Airport Manager and keep current its
mailing addresses, telephone numbers and contacts where it can be reached in
an emergency.
2. List. Lessee shall file with the Airport Manager and keep current a list of its
tenants and sublessees.
3. Conduct. Lessee shall contractually require its employees and sublessees (and
sublessee'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.
4. utilities 'saxes and , JZee . Lessee shall meet 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 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.
AIRPORT LEASF AGREEMENT EMEi BAM DENTON MANAGEMENT VENTURES -Fuge 12
6.:C Cl irltenance cel"j'ropclty. Lessee shall be responsible for the maintenance,
repair and upkeep of all property, buildings, structures and improvements,
including the mowing or elimination of grass and other vegetation on the
Leased Premises, and shall keep the Leased Premises neat, clean and in
respectable condition, free from any objectional 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. Lessee
agrees that at no time shall the Leased Premises be used for a flea market type
sales operation.
7. Exterior Mainteiiance of-Buildin915. 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 inspected to
identify any deterioration beyond normal wear. The Lessor may require
Lessee to repair said exteriors according to Lessor's reasonable specifications,
including paint and metal restoration, if needed. Lessee shall complete any
repair 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 restoration process.
Un atlth riled rias 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, storage of recreational
vehicles, automobiles, or marine vehicles, or for industrial, commercial, retail,
or other purposes, except as authorized herein.
9. Dwellii, . It is expressly understood and agreed that no dwelling or domicile
may be built, moved to or established on or within the Leased Premises nor
may lessee, its tenants, employees, invitees, or guests be permitted to reside or
remain as a resident on or within 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 Possessioij. Lessee shall quit possession of the Leased Premises at the
end of the Lease Term or any renewal or extension thereof, or upon
cancellation or termination of the Lease Agreement, and deliver up the Lease
Premises to Lessor in as good condition as existed when possession was taken
by Lessee, reasonable wear and tear excepted.
11. Inde mni . Lessee must indemnify, hold harmless and defend the Lessor, its
AIRPORT LEASE AGREEMENT BAM DENTON MANAGEMENT VENTURES - Page 13
officers, agents and employees, from and against liability for any and all
claims, liens, suits, demands and/or actions for damages, injuries to persons
(including death), property damage, (including loss of use), and expenses,
including court costs, attorneys' fees and other reasonable costs, occasioned
by or incidental to the Lessee's occupancy or use of the Leased Premises or
the Airport and/or activities conducted in connection with or incidental to this
Lease Agreement, including all such causes of action based on common,
constitutional or statutory law, or based in whole or in part upon the negligent
or intentional acts or omissions of Lessee, its officers, agents employees,
invitees or other persons. 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 their property, while in, on, or involved in any way with
the use of the Leased Premises. The Lessor is not liable or responsible for
the negligence or intentional acts or omissions of the Lessee, its officers,
agents, employees, agents, customers, visitors and other persons. 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 assumed
by the Lessee. The Lessee agrees that this indemnity provision applies to all
claims, suits, demands, and actions arising from all premise defects or
conditions.
"[l .',w. LESSOR _ AND ..THE
INDE ITYPROVISION TO REQ
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FAULTOF ANY 'I'll ,R PERSON OR ENTITY.,
12. Chemical . Lessee agrees to properly store, collect and dispose of all chemicals
and chemical residues; to properly store, confine, collect and dispose of all
paint, including paint spray in the atmosphere, and paint products; and to
comply with all Local, State and Federal regulations governing the storage,
handling or disposal of such chemicals and paints. Further, the Lessee shall be
solely responsible for all discharges, whether accidental or intentional, of any
chemical and for the costs associated with the cleanup, remediation and
disposal of said chemicals.
AIRPORT LEASE AGREEMENT BAM DENTON MANAGEMENT VENTURES - Page 14
13 .1„lazai'd,o.gs, Ag1h?_t . Should Lessee violate any law, rule, restriction or
regulation of the City of Denton or the Federal Aviation Administration, or any
other regulatory authority, or should the Lessee engage in or permit other
persons or agents to engage in activities which could produce hazards or
obstruction to air navigation, obstructions to visibility or interference with any
aircraft navigational aid station or device, whether airborne or on the ground,
then Lessor shall state such violation in writing and deliver written 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) at the sole cost and expense of Lessee, 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. In addition, such violation
shall be considered a material default by Lessee authorizing Lessor, at its sole
option and discretion, to immediately terminate and cancel this Lease
Agreement.
14.j'latae:. Lessee shall select, appoint, and designate to Lessor in writing, a
full-time Manager of business at the Leased Premises. The manager shall be
vested with full power and authority to act in the name of Lessee with respect
to the method, manner and conduct of the operation of the fixed base services
to be provided under this agreement. The manager shall be available during
regular business hours and during the manager's absence, a duly authorized
subordinate shall be in charge and available during Required Hours of
Operation, and on an on-call basis during other hours of the day.
15. Ellliplpygqs. Lessee shall provide, at its sole expense, the employees
necessary to provide effectively and efficiently the services required or
authorized in this Agreement. Lessee shall control the conduct, demeanor
and appearance of its employees, who shall possess such technical
qualifications and hold such certificates of qualification as may be required in
carrying out assigned duties. Lessee shall be responsible to supervise its
employees to assure a high standard of service to customers of the Lessee.
16. Qhargg by J ,ps.s : The Lessee agrees to furnish all services on a fair, equal,
and not unjustly discriminatory basis to all users thereof, and to charge fair,
AIRPORT LEASE AGREEMENT I AM.. DENTON MAN,hfTF:ME ' VENTUURES A Fags 1.5
reasonable, and not unjustly discriminatory prices for each unit or service,
provided, however, that the Lessee may be allowed to make reasonable and
nondiscriminatory discounts, rebates, or other similar types of price
reductions to volume purchasers.
17.1 O amort, , p_garaanc : Lessee shall at its sole cost and expense keep and
maintain the Leased Premises and all improvements, additions or alterations
thereto, equipment and landscaping constructed or installed upon the Leased
Premises, in first-class condition, which condition shall at all times be based on
a standard of care reflecting prudent property management.
D. SIGNS. No signs, posters, or other similar devices ("Signage") shall be placed on
the exterior of the Lease Improvements or on any portion of the Leased Premises or Airport
property without the prior written approval of Lessor. Lessee, at its sole expense, shall be
responsible for the creation, installation and maintenance of all such Signage. Lessee shall
pay to Lessor any and all damages, injuries, or repairs resulting from the installation,
maintenance or repair 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 removed from the Leased Premises by Lessee immediately upon receipt of
instructions for removal of same from Lessor, including without limitation, upon expiration
or termination of this Lease Agreement, If Lessee fails to remove the Signage then Lessor
may do so at the sole cost and expense of Lessee. Lessee shall be permitted the right to
place two wall signs, no greater than thirty-two square feet each, identifying the commercial
hangar operation. All signage shall comply with all applicable ordinances including the
City of Denton sign ordinance."
E. ENTRY. Lessor and its designees shall have the right to enter the Leased
Premises upon reasonable advance notice (written or oral) and at any reasonable times for
the purposes of inspecting the Leased Premises, performing any work which Lessor elects
to perform under this Lease Agreement, and exhibiting the Leased Premises for sale,
lease, or mortgage. Nothing in this section shall imply any duty upon Lessor to do any
work, which under any other provision of this Lease Agreement Lessee is required to
perform, and any performance by Lessor shall not constitute a waiver of Lessee's default.
VI. COVENANTS BYLESSOR
Lessor hereby agrees as follows:
A PEACEFUL ENJO M Ali"1". Upon on payment of all 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. QOMPLIANC-E. Lessor warrants and represents that in the establishment,
construction and operation of the Airport, that Lessor has heretofore and at this time is
complying with all existing rules, regulations, and criteria distributed by the Federal
AIRPORT LEASE AGREEMENT BAM DENTON MANAGEMENT VENTURES - Page 16
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 the
Airport; Lessor further warrants and represents that at all times during the Lease Term, or
any renewal or extension of same, that it will continue to comply with the foregoing.
VII.PF!'CIAi_.,COi
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.
RUNWAYS ANDTAXIWAYS. Because of the present sixty thousand (60,000)
pound continuous use weight bearing capacity of the taxiways, 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 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 any 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 violating the provisions of this section on
two or more occasions shall be sufficient to cause the immediate termination of this entire
Lease Agreement and subject Lessee to liability for any damages to the Airport that might
result.
VIII LEASEHOLDLFASEHOLD IMPROVEMENTS
A. B t (JR,E rlENTS; Before commencing the construction of any additional
improvements on the Leased Premises including the Parcel A Improvements (the "
Additional Lease Improvements"), 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
Leased 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 Leased Premises of
AIRPORT LEASE AGREEMENT BAM DENTON MANAGEMENT VENTURES - Page 17
the proposed construction and improvements;
3. The estimated cost of such construction.
No construction may commence until Lessor has approved the plans and
specifications and the location of the Lease Improvements, and the estimated costs of such
construction. Approval by the Lessor shall not be unreasonably withheld. 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 or designee is hereby authorized to endorse upon a copy
of this Lease Agreement 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 Lease Agreement.
No later than 30 days after completion of the Additional Lease Improvements, Lessee
shall submit to Lessor detailed as built plans of the Additional Lease Improvements and
documentary evidence acceptable to Lessor evidencing the total cost to construct the Lease
Improvements ("Cost to Construct Lease Improvements").
BADDITIONAL,._ CLO "I 1�(�:T-10N, )&.IMPROVEMENTS: Lessee is hereby
authorized to construct upon the Leased Premises, at its own cost and expense, buildings,
hangars, and structures, that Lessor and Lessee mutually agree are necessary for use in
connection with the operations authorized by this Lease Agreement, provided however,
Lessee shall comply with all of the requirements of Section VIII.A., above. Such additional
improvements shall be a part of the Additional Lease Improvements.
D QW;NE SHIP OF IMPROV : The Existing Improvements except for
the hangar constructed by Lessee in 2003 and which is identified on Attachment
"B" (the "2003 Hangar") and all improvements as described in Attachment `B"
are the property of the Lessor. The 2003 Hangar and the Additional Lease
Improvements, when completed by Lessee, (the "Lease Improvements") shall
remain the property of Lessee during the Lease Term subject to the following
conditions, terms and provisions:
1. Removal of l3u�ld Iii . No building or permanent fixture may be removed
from the Leased Premises except as provided in this Agreement.
2. Upon the termination of this Agreement, whether by expiration of the Term
hereof or by reason of default on the part of Lessee, or for any other reason
whatsoever, the improvements (including without limitation, the Lease
Improvements), and all parts 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 claiming under or through
Lessee (including, without limitation, any holder of a leasehold mortgage),
and shall become the property of Lessor; provided, however:
AIRPORT LEASE AGREEMENT BAM DENTON MANAGEMENT VENTURES - Page 18
(i) if Lessee is not then in default hereunder, Lessee shall have the right to
remove till personal property and trade fixtures owned by Lessee from, the
Leased Premises, but Lessee shall be required to repair any damage to the
Leased Premises caused by such removal in a good and workmanlike
manner and at Lessee's sole cost and expense; and
(ii) 'Lessor inay elect to require Lessee to remove all or part of the
improvements (other than, the Lessor Improvements) frOln the Leased
Premises prior to the expiration or earlier tennination of this Lease
Agreement and restore the Leased Premises to the condition in which the
same existed as of the Effective Date of this Lease, as concern.%, the
improvemcnts required to be removed by Lessor,, which said removal shall
be completed no later than the last, day of tlus Leave Agreement, whether
expired or earlier terminated, in which event Lessee shall promptly
perform such removal and restoration in as good and workmanlike manner
and at Lessee's sole cost and expense; and
(iii) Upon such expiration or earlier termination, Lessee shall deliver the
Leased Premises to Lessor in good condition, reasonable wear and tear
excepted, and shall, at Lessor's request, execute a recordable instrument
evidencing the termination of this Agreement, expressly stating the
termination or expiration date thereof.
3. The Lessor Improvements, if any, shall remain the property of Lessor at all
times during and after the expiration or earlier termination of this Lease
Agreement.
4. Nothing contained heroin shall be construed to limit or prohibit Lessor and
Lessee from mutually agreeing to either (i) amend or modify this Lease
Agreement or, (ii) enter into a new agreement to supersede and replace this
,Lease Agreement, which may, among other things, effectively extend or
otherwise det*er the transfer of title anti ownership of the Lease
Improverneirts to Lessor as provided, for in this Section VIII.C., prior to Ole
expiration of (his Lease Agreement, 1--lowever, nothing contitilied herein
shall be deemed or construed to require any anIC11dinent or niodificatioll of
this Lease or the entering into of a new lease agreement. Any such action
shall be at the sole and absolute discretion of Lessor and Lessee.
IX. SL)BROGATION 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, structure, building or improvement shall, upon default of Lessee's obligations to
said mortgagee, have the right to enter upon the Leased Premises and operate or manage
said hangar, structure, building or improvement according to the terms of this Lease
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 Lease Term. It
is expressly understood and agreed that the right of the mortgagee referred to hercin is
limited and restricted to those improvements constructed with funds borrowed from
mortgagee, those improvements purchased with the borrowed funds, and those
improvements pledged to secure the refinancing of the improvements.
X. RJGFI_i CDF E I ME;N.
Lessor shall have the right to establish easements, at no cost to Lessee, upon the
Leased Premises for the purpose of providing underground utility services to, from or
across the Airport property or for the construction of public facilities on the Airport.
However, any such easements shall not interfere with Lessee's use of the Leased Premises
and Lessor shall restore the property to the original condition as is reasonable practicable
upon the installation of any utility services on, in, over or under any such easement at the
conclusion of such construction. Construction in or at the easement shall be completed
within a reasonable time.
XI. ASI_GN :C 9 l GI ..L.ESIa,
Lessee expressly covenants that it will not assign this Lease Agreement, convey more
than fifty percent (501/o) of the interest in its business, through the sale of stock or otherwise,
transfer, license, nor sublet the whole or any part of the Leased Premises for any purpose,
except fbr, rental of hangar space or tic -down space for storage of aircraft only, without the
written consent of Lessor, Lessor agrees that it will not Unreasonably withhold its approval
of such sale, sublease, transfer, license, or assignment of the facilities for 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 terms of this lease, for such portion
of the Leased Premises proposed to be assigned, subleased, transferred, licensed, or
otherwise. The provisions of this Lease Agreement shall remain binding upon the
assignees, if any, of Lessee.
XII. INSURANCE
A jj 1 93I 1.LN1S, JI ` y ,: Regardless of the activities contemplated under this
Lease Agreement, Lessee shall maintain continuously in effect at all times during the term
of this agreement, at Lessee's sole expense, the following minimum insurance coverages:
Commercial (Public) General Liability covering the Lessee or its company, its
employees, agents, tenants and independent contractors, and its operations on the
airport. Coverage shall be in an amount not less than $1,000,000 per occurrence
and provide coverage for premises/operations and contractual liability AND where
exposure exists, coverage for: products/completed operations; explosion, collapse
and underground property damage.
AIRPORT LEASE AGREEMENT BAM DENTON MANAGEMENT VENTURES - Page 20
2. All risk property insurance on a replacement cost basis covering loss or damage to
all facilities used by the Lessee, either as a part of this agreement or erected by the
Lessee subsequent to this agreement. Under no circumstances shall the Lessor be
liable for any damages to fixtures, merchandise or other personal property of the
Lessee or its tenants.
3. Business Automobile Liability to include coverage for Owned/Leased Autos, Non -
Owned Autos and Hired Cars:
For operation in aircraft movement areas the limit of liability shall be $100,000
per occurrence.
For other operations the limit of liability shall be consistent with the amount set
by State Law.
B. ADDITIONAL C " EiRAGxE: In addition to the above referenced coverages, the
following insurance is required if the activity or exposure exists or is contemplated:
1. Aircraft Fuel/Oil Storage and Dispensing — Comprehensive Commercial (Public)
General Liability shall include coverage or separate coverage shall be provided for
Environmental Impairment Liability.
2. Aircraft Sales or Aircraft Charter and Air Taxi — Aircraft Liability in the amount of
$1,000,000 per occurrence to include Hull Coverage and Liability. In addition,
Passenger Liability in an amount of $100,000 per person (per passenger seat) shall
be provided.
3. Aircraft Rental or Flight Training - Aircraft Liability in the amount of $1,000,000
per occurrence to include Hull Coverage and Liability, Passenger Liability in the
amount of $100,000 per person (per passenger seat) and Student/Renter Liability
covering all users in the amount of $500,000 per occurrence.
4. Specialized Commercial Flying (including crop dusting, seeding, and spraying,
banner towing and aerial advertising, aerial photography and surveying, fire
fighting, power line or pipe line patrol) - Aircraft Liability in the amount of
$1,000,000 per occurrence to include Mill ,overage and Liability. III addition,
Passenger Liability in an amount of $100,000 per person (per passenger seat)
shall be provided.
5. Aircraft Storage, Maintenance and/or Repair - Aircraft Liability in the amount
of $1,000,000 per occurrence to include Hull Coverage and Liability. In
addition, Hanger Keepers Liability in the amount of $500,000 per occurrence
shall be provided. The requirement for Hangar Keepers Liability shall not
apply to individual owner/operators whose primary use of the hangar space is
the storage of their own aircraft. The requirement does not apply to such
AIRPORT LEASE AGREEMENT BAM DENTON MANAGEMENT VENTURES - Page 21
individuals notwithstanding the fact that they may, from time to time, permit
the storage of non -owned aircraft in the hangar space and charge a1ee for the
storage of such aircraft so long as such use is in the nature of a rent -sharing
agreement rather than a commercial aircraft storage business.
C,CDI^1ACl II`lJ1I ill ll�l'S'; All insurance coverages shall comply with the
following requirements:
1. All liability policies shall name the City of Denton, and its otlicers and employees
as an additional n.arned insured and provide for a Ininimurn of ail (Lays written
notice to the City of any cancellation or material change to the policy.
2. All insurance required by this Lease Agreement must be issued by a company or
companies of sound and adequate financial responsibility 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 Risk Management for their adequacy as to content,
form of protection and providing company.
3. Required insurance naming the City as an additional insured must be primary
insurance and not contributing with any other insurance available to the City
whether from a third party liability policy or other. Said limits of insurance 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. Failtue of lessee to comply with the ininitntim specified amounts or
types of insurance as required by Lessor shall constitute Lessee's default of this
Lease Agreement.
5. During the Lease Term, or any extension thereof, Lessor herein reserves the right
to, with 60 days notice, adjust or increase the liability insurance amounts required
of the Lessee, and to require any additional rider, provisions, or certificates of
insurance, and Lessee hereby agrees to provide any such insurance requirements as
may be required by Lessor; provided however, that any requirements shall be
commensurate with insurance requirements at other public use airports similar to
the Denton Municipal Airport in size and in scope of aviation activities, located in
the southwestern region of the United States.
XIII C<, N.C,', 3lJA ,I" QN,B I l ISISIQ
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
AIRPORT LEASE AGREEMENT BAM DENTON MANAGEMENT VENTURES - Page 22
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 Agreement by written notice to Lessee. However, if
Lessee provides written notice to Lessor within said 30 day cure period that it is impossible
to cure such default within said time period, then the Lessor may consent to an extension of
such time to cure, which consent will not be unreasonably withheld. In the event of
default, Lessor has the right to purchase any or all of the Lease Improvements under the
provisions of Section VIII.C.4. hereof.
XIV. Cr l CL -1 11 11SU
Lessee may cancel this Lease Agreement, in whole or part, and terminate 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 restraining the use of the Airport
or any part thereof for airport purposes; (2) the breach by Lessor of any of the covenants or
agreements contained herein and the failure of Lessor to remedy such breach for a period of
ninety (90) days after receipt of a written notice of the existence of such breach; (3) the
inability of Lessee to use the Lease Premises and facilities continuing for a longer period
than ninety (90) days due to any law or any order, rule or regulation of any appropriate
governmental authority having jurisdiction over the operations of Lessor or due to war,
earthquake or other casualty; or (4) the assumption or recapture by the United States
Government, or any authorized agency thereof, of the maintenance and operation of said
airport and facilities or any substantial part or parts thereof.
Upon the happening of any of the four events listed in the preceding paragraph, such
that the Leased Premises cannot be used for aviation purposes, then the Lessee may cancel
this Lease Agreement as aforesaid, or may elect to continue this Lease Agreement 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.
Should Lessor close the Airport and relocate the Airport to another location during the
primary term of this Lease Agreement, Lessee shall have the right to relocate its facilities to
the new airport at a suitable location under the same or similar terms of this Lease
Agreement. The cost of relocation of Lessee's facilities will be shared by Lessor and Lessee
in proportion to the number of years remaining on the primary term of this Lease
Agreement. In this regard Lessor will be responsible for 1/30 of the such costs for every
year remaining on the primary term.
XV MISCELLE1I S T'QW55JONS
AIRPORT LEASE AGREEMENT BAM DENTON MANAGEMENT VENTURES - Page 23
A. ENM _i EEMENT. This - Lease 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 BN)tN a Irl FEC. All 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 l V 1�,l�r I31L Y. If a provision hereof shall be finally declared void or illegal by
any court or administrative agency having jurisdiction, the entire Lease Agreement shall not
be void; but the remaining provisions shall continue in effect as nearly as possible in
accordance with the original intent of the parties.
D. NOTICE. Any notice given by one party to the other in connection with this
Lease Agreement shall be in writing and shall be sent by certified mail, return receipt
requested, with postage fees prepaid or via facsimile as follows:
1. If to Lessor, addressed to:
City Manager
City of Denton
215 E. McKinney Street
Denton, Texas 76201
Fax No.940.349.8596
2. If to Lessee, addressed to:
Chief Executive Officer
BAM Denton Management Ventures, L.L.C.
5007 Airport Road
Denton, Texas 76207
Phone (940) 898-1200
Fax No. (940) 382-5602
E. HEADINGS. The headings used in this Lease 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. f1C)VFRN1N tI. LAW AND ' EN I JE. This Lease Agreement is to be construed in
accordance with the laws of the State of Texas and is fully performable in Denton County,
Texas. Exclusive venue for any lawsuit to enforce the terms or conditions of this Lease
Agreement shall be a court of competent jurisdiction in Denton County, Texas.
G O. .A VE . No waiver by Lessor or Lessee of any default or breach of
AIRPORT LEASE AGREEMENT BAM DENTON MANAGEMENT VENTURES - Page 24
covenant or term of this Lease Agreement may be treated as a waiver of any subsequent
default or breach of the same or any other covenant or term of this Lease Agreement.
H. hLO_.ACI1r:N:C'y. During all times that this Lease Agreement is in effect, the parties
agree that Lessee is and shall not be deemed an agent or employee of the Lessor.
I. FORCE MAJEURE. None of the Parties shall be in default or otherwise liable for
any delay in or failure of performance under this Lease Agreement if such delay or failure
arises by any reason beyond their reasonable control, including any act of God, any acts of
the common enemy or terrorism, the elements, earthquakes, floods, fires, epidemics, riots,
failures or delay in transportation or communications. However, lack of funds shall not be
deemed to be a reason beyond a Parry's reasonable control. The Parties will promptly inform
and consult with each other as to any of the above causes, which in their judgment may or
could be the cause of a delay in the performance of this Lease Agreement.
J. SUPERCEDES EXISTING LEASE. This Lease Agreement supercedes and takes
the place of the Existing Lease as approved by City of Denton Ordinance 2004-380 in its
entirety.
IN WITNESS WHEREOF, the parties have executed this Lease Agreement as of the
Effective Date first above written.
CITY OF DENTON, TEXAS, LESSOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
w
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
BY:
1wr' C. cA M t4"l J J� s , CITY MANAGE�������.
AIRPORT LEASE AGREEMENT BAM DENTON MANAGEMENT VENTURES - Page 25
BAM Denton Management Ventures, L.L.C.,
a Texas Limited Liability Company
BY: .. . ............ . . . . .
0 , �
DAMON WARD, c Cl,,)
ACKNOWLEDGMENTS
TEXAS
THE STATE OF TEXAS
COUNTY OF DENTON
This instrument wasacknowledgwed b(,.-('6re, me on the day ot'..Q0
4�e& 2015, by
Georgre C. Canipbell, Cily Mmiaget- of the City of I)cnton, Tomi I s, on belialf'of said
municipality.
JANE E. RI&WR ON
Notafy Public, State of Texas
C, My Commisslon Expires
June 27, 2017
THE STATE OF TEXAS §
COUNTY OF DENTON
r/
N (YfAR N' PUBLIC, STATE OF TEXAS
Tkis insln'inwnt was acknowledged: befiore nie oti lbe."ZO day of,._j 2015 by
Damon Wcud, CE-(), BAM Dent , on Managenient Ventures, L.L.C., a 4rc'x-�w led liability
company, on behalf of said company.
4 4 NUIN7 POW,
.......... .
Wolf D(UlAw
NOT' RY III -Ill "Ic" FATI -OF TEXAS
lImpiroo: 86ASM19
AIRPORT LEASE AGREEMENT SAM DENTON MANAGEMENT VENTURES - Page 26
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ALL THAT CERTAIN TRACT OR PARCEL OF LAND LYING AND BEING SITUATED INTHE 0
NEIL SURVEY. ABSTRACT NUMBER 970. CITY OF DENTON, DENTON COUNTY. TEXAS
Al -40 BEING A PART OF A TRACT DESCRI13ED IN A DEED TO THE CITY OF DENTON,
RECORDED 114 VOLUMF 305, PACE 216, DEED RECORDS. DENTON COUNTY TEXAS.
AND KING MORE PA1171CULARLY DESCRIBED AS FOLLOWS -
COMMENCING AT A FOUND IRON PIN AT IHE NORTHEAST CORNER OF LOT 1. BLOCK. I
s0t,IIHEASTAIRPORT A00ITION, AN ADDITIC)NTO THE C'TY,'OF DENTON. DENTON
COUNTY. TEXAS. ACCORDING TO THE F,LjAT THEREOF RECOIRDEP ItICABINET G PCX.
29S PLAT RECORDS, DENTON COUNTY. TEXAS
rHENCE NORTH 89 DEGREES 56 MINUTES 21 SECONDS WEST WITH TmE NOR I Irl L INk"
Of SAID LOT I. A DISTANCE OF 199.47 FEET TO OF
BEGINN114G OF THE HEREIN OF -SCRIBED TRACT:
THENCE NORTH 89 DEGREES 56 MINUTES 21 SECONDS WEST. A DISTANCE OF 210 00
FEET TO A IQ INCH IRON PIN SET WITH A YELLOW PLASTIC CAP STAMPED
"METROPLF.X 1649":
THENCE NORTH 00 DEGREES 04 MINUTES 02 SECONDS WES'r A DISTANCE Or W 1 00
I`EET TO A 112 INCH IRON PIN SET NTH A YELLOWPLASTIC CAP STAMPED
'NIETROPLEX 1849".
THENCE SOUTH 89 DEGREES 56 MINUTES 21 SECONDS EAST. A DISTANCE OF 21t) 00
FEET TO A V2 INCH IRON PIN SET WITH A YELLOW PLASTIC CAP STAMPED
"METROPLEA la4g",
THENCE SOUTH 00 DEGREES 04 MINUTES 02 SECONDS EAST, A DISTANCE OF 151 U)O
FEET TO A U2 INCH IRON PIN SET WITH A YELLOW PLASTIC CAP STAMPED 0 7765 ACRI
'141ETROPLEX 1849" AT THE POINT OF BEGINNING AND CONTAINING IN ALL
OF LAND
NOTES
DME= DENTON MUNICIPAL ELECTRIC
THIS SUPVE'e WASMADE V07+10UT THE BFNEFIT OF A TITLE COMMITMENT THERE
MAY BE SETBACKS OR EASEmENTS AFFECTING THE SUBJECT PROPERTY NOTS-HOWN
HEREON
BEARINGS BASED ON CPO, OBSERVATIONS DATED MARCH �''% 2005
BY CRAPHIC PL(: VUNG Qfql.Y 'TH15 pRopC-Rj'y 15 VMTfll,! ZONE "Y" Af'Et,t=
()FrC.RmjNEoTo BE �)U TSIOE OFA DESt(p4ATED 1010 YEAR OR 500 YEAR FLOOL)PUk[N
AS SI, IOVVN BY FIRM NIAI"' COMMUNITY -PANEL t�JUMBER 4612 ICO,355 F DA E4'-1 MARCH
30, jqqa. NO SURVEYING WAS PERI`Of�MFO rO OETEPMINT)'+S FLOCID ZONE
I. BRAD G, SHELTON, 00 HEREBY CERTIFY THAT A SURVEY WAS MADE ON THE
GROUND THIS 21st DAY OF APRIL. 2005 OF THE PROPERTY DESCRIBED HEREON AND
THERE Atli de (VISIBLE) ENCROACHMENTS. Pffi,�OfllbstONS, OR OVERLAPPING OF
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MPROV OmrN'l ;X F PT A �31"l�loom "�Fjtt
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REGISTERED PROFESSIONAL LAND SURVEYOR OFA
STATE OF TEXAS NO 5452
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Bldg 3 - 1991 Hangar
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Bldg 5 - 1971 A 1972 T -Ranger
Bldg 6 - 1974 Hangar
ATTACHMENT B, Page
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