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22-964ORDINANCE NO. 22-964 AN ORDINANCE OF THE CITY OF DENTON APPROVING AN ASSIGNMENT OFAIRPORT LEASE FROM PEDRON AIRCRAFT WORKS, LLC, TO DSR-CHEROKEE 180.LLC, OF AN AIRPORT LEASE COVERING PROPERTY LOCATED AT 926 AERONCADRIVE, DENTON, TEXAS AT THE DENTON ENTERPRISE AIRPORT; AUTHORIZINGTHE CITY MANAGER TO EXECUTE THE ASSIGNMENT OF AIRPORT LEASE; ANDPROVIDING AN EFFECTIVE DATE. WHEREAS, on March 7, 1995, the City of Denton, a Texas home-rule municipalcorporation (hereinafter the “City”), entered into that certain Airport Lease Agreement – Commercial Operator (the “Lease”) with John K. Selvidge, covering property located at 926 Aeronca Drive, Denton, Texas, as more fully described in the Lease (the “Property”), at the Denton Enterprise Airport (“Airport“), which Lease was approved by the City pursuant to Resolution No. 95-021; and WHEREAS, on January 15, 2013, John K. Selvidge assigned the interest in the Lease to Pedron Aircraft Works, LLC (“Assignor”); and WHEREAS, Assignor has agreed to assign its interest in the Lease, including certain improvements thereon, to DSR-Cherokee 180, LLC (“Assignee”); and WHEREAS, the Lease requires the written consent of the City for the proposed assignment to be effective, and Assignor has requested the City give such consent; and WHEREAS, at the May 11, 2022 meeting of the Airport Advisory Board, the Board recommended that the City approve the Assignment of Airport Lease for the Property by a vote of5 to 0; and WHEREAS, the City Council deems it in the public interest to enter into an Assignmentof Airport Lease giving consent to the assignment contemplated above; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The findings and recitations contained in the preamble of this Ordinance are incorporated herein by reference. SECTION 2. The Assignment of Airport Lease for the Property in the form attached hereto as Exhibit A is hereby approved and made a part of this Ordinance for all purposes. SECTION 3. The City Manager, or their designee, is hereby authorized to execute the approved Assignment of Airport Lease. SECTION 4. This Ordinance shall become effective immediately upon its passage and approval. 1 The motiorUo approve_this Ordinance was seconded by Rf tay\ eea the following vote [U - n: a a tv Lmade by and This Ordinance was passed Hd approved by Aye Nay Abstain Absent Mayor Gerard Hudspeth:Vicki Byrd, District 1 :Brian Beck. District 2: Jesse Davis, District 3 : Alison Maguire, District 4: Brandon Chase McGee, At Large Place 5 : Chris Watts, At Large Place 6: b/IZrZb/ V,/ PASSED AND APPROVED this the in+ d,y ,f bUs , 2022. GERARD HUDSPETH, MAYOR ATTEST: ROSA RIOS, CITY SECRETARY All 11111/1/ _ Ze/;aJ APPROVED AS TO LEGAL FORM: MACK REINWAND, CITY ATTORNEY Digitally signed by MarcellaLunn DN: cn=Marcella Lunn, o, }}JONrb ::==):fr:SLYun£n@dtyddenton.com, c=US Date: 2022.05.10 14:55:03 -05'00' IBY:\N Utah\ DocuSign Envelope ID: 2C174279-D98E4C29-97DE-CDE75BE384C4 ASSIGNMENT OF AIRPORT LEASE DENTON ENTERPRISE AIRPORT DATE: ASSIGNOR: ASSIGNEE: DSR-Cherokee 180, LLC LANDLORD :City of Denton, a Texas home-rule municipal corporation LEASE:Attachment 1 - Airport Lease Agreement (the “Lease”) – Commercial Operator, dated March 7, 1995; City of Denton Approval, Resolution 95-021 PREMISES :.615 acres, along with certain leasehold improvements, located at 926 Aeronca Drive, Denton, TX, Denton Enterprise Airport, all as described in the Lease Assignor hereby assigns to Assignee its interest in the Lease by the execution of this document (this “Assignment”) . A. Assignee agrees to: 1. Assume Tenant's obligations under the Lease. 2. Accept the Premises in their present "as is" condition. 3. Complete all obligations of transfer and purchase from Assignor prior to this Assignment becoming effective. B. Landlord consents to this Assignment: 1. Landlord agrees that following assignment, it shall look solely to Assignee for fulfillment of the Lease obligations. C. Assignor agrees that: 1. Assignor confirms that the Lease with respect to the Premises is to betransferred to DSR-Cherokee 180, LLC. 2. On or before the date of this Assignment, Assignor will pay or will cause the Assignee to pay to Landlord a $ 1,000 transfer fee. D. Capitalized terms not defined in this Assignment shall have the meaning ascribed to themin the Lease. E. The provisions of the Lease shall remain in full force and effect. Page 1 of 3 DocuSign Envelope ID: 2C174279-D98E4C29-97DE-CDE75BE384C4 PREVIOUS ASSIGNMENTS of the LEASE John K. Selvidge to Pedron Aircraft Works, LLC, dated January 15, 2013; City of Denton Approval Ord. 2013-006 [Signatures on following page] Page 2 of 3 DocuSign Envelope ID: 2C174279-D98E4C29-97DE-CDE75BE384C4 Assignee:DSR-Cherokee 180, LLC SLwhw& a&vImy Sherman Gardner, Managing Partner Assignor: Pedron Aircraft Works, LLC DocuSlgned by: phillip dt6rc ptJywlaTin Consent: Landlord: City of Denton Approved as to Legal Form Digitally signed by Marcella LunnDN: cn=Marcella Lunn, o, ou=City \}JLVtLU_! \ \JU,\fl ::,:F£',==;~„„„.„„„„“ Date: 2022.05.09 17:26:16 -05'00' Mack Reinwand, City Attorney n.com. c=US ity Mana Hr \\1111111/II ATTEST: Fos; Rios, CityTec;etary Page 3 of 3 term Leas . ord j fTI Attachment 1 KmORDINANCE NO + AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS,APPROVING THE WTUAL TERMINATION BY THE CITY OF DENTONI TEXAS ANDBRUCE BROWN OF THE IITRACT CII LEASE OF AIRPORT PROPERTY, SAIDpROPERTY 5 RNO. 94-229; AND PROVIDING FATE. WHEREAS , the City of Denton had authorized the City Manager inordinance 94-229 to execute a lease of airport property to BruceBrown, said leased premises being identified therein as "Tract C" ;and WHEREAS, John K. Selvidge wishes to enter into a lease with theCity of Denton f6r 26 , 791.04 square feet within this 11Tract C"property; and WHEREAS , Bruce Brown favors the assignment of his interest in26 , 791.04 square feet of the 11Tract C" tO John K. Selvidge, butdoes not wish to remain obligated under his lease for the remain-der; and WHEREAS, upon application by Bruce Brown and John K. Selvidge,it was the recornmendation of the Denton Airport Advisory Board tolease the 26 , 791.04 square feet of the 11Tract C" property tO JohnK. Selvidge and terminate by mutual agreenent the 11Tract C11 leasewith Bruce Brown; NOW, THEREFORE; THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION I . That the lease of airport property entered intobetween the City of Denton and Bruce Brown on December 6 , 1994 ,pursuant to Ordinance 94-229 , for 33 , 541, 20 square feet of airportproperty identified as "Tract C" is hereby terninated by mutualconsent upon the execution by the City of Denton and John K.Selvidge of a new lease for 26, 791.04 square feet of propertylocated therein, Mr. Brown’s consent being evidenced by thedocument attached hereto as Exhibit A. SECTION II . That Ordinance 94-229 , authorizing the CityManager tO execute the 11Tract C11 lease between the City of Dentonand Bruce Brown is hereby repealed. SECTION III . That this ordinance shall become effectiveimmediately upon its passage and approval. PASSED AND APPROVED this the dH J dav ATTEST :JENNIFER WALTERS, CITY SECRETARY APP MICHAEL A. BUCEK, ACTING CITY ATTORNEY a IEGAL FORM .T/ PAGE 2 2/10/95 This letter is to notify the city of Denton, Texas that I would like to relinquish my ground lease at the Denton airport known as “Tract C” drawn on the attached survey. The timing of this would coincide and become effective at the same time that John Selvage entered into a ground lease with the city of Denton, Texas on any of the same ground previously leased by Bruce Brownin “Tract C“. Bruce Brown mT RESOLUTION NO Rgs aA/ A RESOLUTION AUTHORIZING THE CITY MANAGER OF THE CITY OF DENTON,TEXAS TO EXECUTE A GROUND LEASE AGREWENT BETWEEN THE CITY OFDENTON, TEXAS AND JOHN K. SELVIDGE FOR APPROXIMATELY 0.615 ACRES OFPROPERTY LOCATED AT THE DENTON HUNICIPAL AIRPORT ; AND PROVIDING ANEFFECTIVE DATE o THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS : SECTION I . That the City Manager is authorized to execute aground lease agreement between the City of Denton, Texas and JohnK, Selvidge for approxinately 0, 615 acres of land located at theDenton Municipal Airport, under the terms and conditions containedwithin this agreement, which is attached hereto and nade a parthereof SECTION II . That thIs resolution shall beconeimmediately upon its passage and approval. PASSED AND APPROVED this the 7@ day of effective 1995 . VaH0 ATTEST : JENNIFER WALTERS I CITY SECRETARY LEGAL FORM MICHAEL A+ BUCEK, ACTING CITY ATTORNEY '1(r Z0g,1dCO<I7029n I g FrI<Bfr)P Ji elnM•BiBleb)aa crI .B+’ ,f '\t -.; - It / /1+ Ff '-%?? \t '+?; I '''--i qErnVa70,nHlBI< [Z mEm ( FIELD NOTES TO 0.615 ACRE TRACT ALL that certain lot , tract , or parcel of land situaEed in the T .Toby Survey A–1285 , DenEon County, Texas , being part of thatcertain 2.196 acre tract of land described in - a lease agreementbetween Brown & Brown, a partnership, and the City of Denton, Texasas shown on a plat showing 2.196 acres and signed by Jerald D .Yenson, R . P . L . S . No . 4561 dated September 6 , 1994 , Job No . 946269 ,and being a tract as calculated and compiled from the abovereferenced plat by Joy C . Green, R . P . L . S . No . 1797 on January 31,1995 and being more particularly described as follows , BEGINNING at the southwest corner of Tract C as shown on the above referenced plat ; THENCE north 0'’ 01 ' 22 " east a distance of 148.31- feet to a pointfor corner; THENCE north 89'’ 21 ‘for corner;10 " west a distance of 17.15 feet to a point THENCE north a distance of 11.3 feet to a point for corner ; THENCE east a distance of 145.18 feet to a point for corner; THENCE south 25 '’ 38 ’ 44l' east a distance of 177.27 feet tO a pointfor corner ; THENCE west a distance of 204.82 feet Lo the Point of Beginning andcontaining 0.615 acres of land . TEVfEEDR AEEO04CB 'CITY OF DENTONLEGAL DEPT.mmBRIg ; A„„ )„„-‘ i)TL2+:' ’ ;'Af # 7 7/ -Hull/\,b A. a Sq £:LLLbQD q, / ah' PG D% +t (( AIRPORT LEASE AGREEMENTCOWERCIAL OPERATOR THE STATE OF TEXAS S S SCOUNTY OF DENTON KNOW ALL MEN BY THESE PRESENTS : This lease is made and executed this al day of P1995, at Denton, Texas, by and between the City of Denton, Texas, amunicipal corporation, hereinafter referred to as 11Lessor'1, and JohnK. Selvidge, having his principal offices at Rt. 1, Box 330 , Sanger,Texas , hereinafter referred to as "Lessee" WIIFNE88ETH : WHEREAS, Less'or now owns , controls and operates the MunicipalAirport ( Airport) in the City of Denton, County of Denton, State ofTexas ; and WHEREAS, Lessee desires to lease certain premises on saidairport and construct and Inaintain an aircraft hangar and relatedaviation facilities thereon; and NOW, THEREFORE, for and in consideration of the pronises and themutual covenants contained in this Agreement, the parties agree asfollows : I + CONDIIFION8 OF AGREEMENT NOTWITHSTANDING ANY LANGUAGE TO THE CONTRARY HEREINAFTER CONTAINED ,THE LANGUAGE IN PARAGRAPHS A THROUGH D OF THIS SECTION SHA TIL BEBINDING A. PRINCIPLES OF OPERATIONS, The right to conduct aeronauticalactivities for furnishing services to the public is granted Lesseesubject to Lessee agreeing: 1+To furnish said services on a fair, equal and not unjustlydiscriminatory basis to all users thereof ; and 29 To charge fair, reasonable and not unjustly discriminatoryprices for each unit or service; provided, that Lessee maybe allowed to na Ice reasonable and nondiscriminatorydiscounts, rebates , or other similar types of pricereductions to volume purchasers. B . NON-DISCRIMINATION: Lessee, for himself , his personalrepresentatives , successors and interests, and assigns, as a part ofthe consideration hereof , does hereby covenant and agree as acovenant running with the land that : le No person on the grounds of race, religion, color, sex, ornational origin shall be excluded from participation in, tvI ( denied the benefits of , or be otherwise subjected todiscrimination in the use of said facilities; 2.In the construction of any improvements on, over, or undersuch land and the furnishings of services thereon, noperson on the grounds of race, -religion, color, sex, ornational origin shall be excluded fron participation in,denied the benefits of , or otherwise be subjected to discrimination ; 38 Lessee shall use the preInises in compliance with all otherrequirements imposed by or pursuant to Title 49 , Code ofFederal Regulations, Departnent of Transportation, SubtitleA, Office of the Secretary, Part 21, Nondiscrinination inFederally assisted prograns of the Department of Transpor-tatton - Effectual of Title VI of the Civil Rights Act of1964 , as said Regulations may be amended. C. RIGHT OF INDIVIDUALS TO MAINTAIN AIRCRAFT. It is clearlyunderstood by Lessee that no right or privilege has been grantedwhich would operate to prevent any person, finn or corporationoperating aircraft on the airport fron performing any services onits own aircraft with its own regular enployees (including, but notlimited to, naintenance and repair) that it may choose to perform. D, NON-EXCLUSIVE RIGHT . It is understood and agreed thatnothing herein contained shall be construed to grant or authorizethe granting of an exclusive right within the meaning of Title 49 U. S. C. Appendix 51349 . E e PUBLIC AREAS e le Lessor reserves the right to further develop or improve thelanding area of the airport as it sees fit, regardless ofthe desires or views of Lessee, and without interference orhindrance . 2.Lessor shall be obligated to maintain and keep in repairthe landing area of the airport and all publicly ownedfacilities of the airport, together with the right todirect and control all activities of Lessee in this regard. 38 During time of war or national eInergency, Lessor shall havethe right to lease the landing area or any part thereof tothe United States Governnent for nilitary or naval use,and, if such lease is executed, the provisions of thisinstrument insofar as they are inconsistent with theprovisions of the lease to the Governnent, shall besuspended . 4.Lessor reserves the right to take any actIon it considersnecessary to protect the aerial approaches of the airport SeLvidge Lease Agreerrent - Page 2 }a (( against obstruction, together with the right to preventLessee from erecting, or permitting to be erected, anybuilding or other structure on or adjacent to the airportwhich, in the opinion of Lessor, would limit the usefulnessor safety of the airport or constitute a hazard to aircraftor to aircraft navigation. 5+This Lease shall be subordinate to the provisions of anyexisting or future agreement between Lessor and the UnitedStates or agency thereof , relative to the operation ormaintenance of the airport. II e LEASED PREH18E8 Lessor,_ fQr and in consideration of the covenants and agreeInentsherein contained, to be kept by Lessee, does hereby demise and leaseunto Lessee, and Lessee does hereby hire and take from Lessor, thefollowing described land situated in Denton County, Texas : A. IAND: A tract of land, being approxirllately 26, 791 squarefeet, or 0.615 acres, drawn and outlined on Attachment 11 A11, andlegally described in Exhibit "B", such attachments being incorporat-ed herein by reference. Together with the right of ingress and egress to said property;and the right in common with others so authorized of passage uponthe Airport property generally, subject to reasonable regulations bythe City of Denton and such rights shall extend to Lessee/ s employ-ees , passengers, patrons and invitees. For purposes of thisagreement, the term "Premises" shall mean all property locatedwithin the metles and bounds described and identified within Exhibit"B" , including leasehold inprovements constructed by the Lessee, butnot including certain easenents or property owned and/or controlledby the Lessor. Lessee further agrees and grants to all otherproperties described or depicted on the survey plat of the T. TobySurvey A-1285, Denton County, Texas attached hereto as Exhibit 11C" ,(specifically including the property located in the northeastquadrant of the survey plat, not identified by a tract designationor defined by field notes) the right of ingress and egress acrossthe concrete taxiway as shown on Exhibit "C" , B. IMPROVEMENTS PROVIDED By LESSOR: NONE: There will be noimprovements provided by Lessor, except as set forth in ArticleII. D. 11Access to Utilities" below. For the purpose of this Agreement, the term lILessor improve-ments11 shall mean those things on the leased premises belonging to,constructed by, or to be constructed by Lessor, which enhances orincreases, or will enhance or increase, the value or quaIIty of theleased land or property. Unless otherwise noted herein, all Lessorimprovements are and will remain the property of Lesser. All Lessor Setvidge Lease Agreerrent ' Page 3 gXJ ( improvements must be described in detail above, or above referencedand attached to this Agreement in an exhibit approved by Lessor. C. BASEMENTS. Lessor and Lessee by mutual agreement mayestablish, on the lease premises, easeInents for public access onroads and taxiways. D, ACCESS TO UTILITIES . Lessor represents that there are waterand 3-phase electricity lines within three hundred feet (300 ’ ) ofthe leased premises available to 11tap-in11 by Lessee, and that thesame are sufficient for usual and customary service on the leasedprelnises . III © TERM The term of tllie 49reement sba11 be,for a period of years, com-nencing on the gW day of – , 1995 , and continuingthrough the 30th day of April, 1 arlier terminated underthe provisions of the Agreenent. Any attempt by Lessee to renegoti-ate this Lease shall be in writing addressed to the City Manager atleast one hundred eighty (180) days before the expiration of thestated term of this lease, and at least 180 days before the expira-tion of any additional renegotiated period. The rental and terms tobe negotiated shall be reasonable and consistent with the thenvalue, rentals and terns of sinilar property on the airport. IV © PAYMENTS f RENTALS ARD FEES Lessee covenants and agrees to pay Lessor, as consideration forthis lease, the following payments, rentals and fees : A, IAND RENTAL shall be due and payable in the sum of TwoThousand One Hundred One and 81/100 Dollars ($2 , 101.81) per year,payable in twelve ( 12) equal monthly installnents in the sum of OneHundred Seventy-five and 15/100 Dollars ($175.15) in advance, on orbefore the first day of each and every month during the term of thisagreement . Notwithstanding the foregoing, the annual lease rental is to bereduced by the product of $0.078452 per square foot, times thenumber of square feet comprising all easements established inaccordance with Article II (c) . B + LESSOR IMPROVEMENTS RENTALS einprovements on the leased premises .NONE :There are no Lessor C, PAYMENT , PENALTY , ADJUSTMENTS , All paynents due I,essor fromLessee shall be delivered to the Airport Manager, unless otherwisedesignated in writing by the Lessor. Payments which are more than15 days past due shall be assessed the penalty of one-half of onepercent (0 , 5%) per day, cornpounded daily, per each day or a fractionthereof which the payment or fee is nore than 15 days past due. The SeLvidge Lease Agrearent - Page 4 r yearly rental for land and improvements herein leased shall bereadjusted at the end of each five (5) year period during the terInof this lease on the basis of the proportion that the then currentUnited States Consumer Price Index for all urban consumers (CPI'-U)for the Dallas-Fort Worth geographical region, as compiled by theU. S . Departnent of Labor, Bureau of Labor Statistics bears to theApril 1990 index, which was 122.2 (1982-84 = 100) . The originalland rental amount is based upon $0.078452 per square foot per yearfor the land herein leased. However, in no event shall any of therental adjustments exceed fifty percent (508) of the originalrental. Each rental adjustnent, if any, shall occur on the firstday of May 1995 , and every five (5) years thereafter. The adjustments in the yearly rent shall be determined bymultiplying the minimum yearly rent as set- forth in Section IV. A. bya fraction, the numerator of which is the index number for the lastmonth prior to the adjustment, and the denominator of which is theindex number for April, 1990. If the product of this multiplicationis greater than the minimum 9early rent of as set forth in SectionIV. A. , Lessee shall pay this greater amount as the yearly rent untilthe tUne of the next rdntal adjustment as called for in thissection. If the product of this multiplication is less than themininun yearly rent of as set forth in Section IV. A. , there shall beno adjustment in the annual rent at that time, and Lessee shall paythe ninimun yearly rent as set forth in Section IV. A. , until thetine of the next rental adjustment as called for in this section. Inno event shall any rental adjustment called for in this sectionresult in an annual rent less than the minimum yearly rent of as setforth in Section IV. A. If the consumer price index for all urban consumers (CPI-U) forthe Dallas-Fort Worth geographical region, as compiled by the U. S ,Department of Labor, Bureau of Labor Statistics , is discontinuedduring the term of this lease, the renaining rental adjustmentscalled for in this section shall be made using the fornula set forthin Subsection (a) above, but substituting the index nurnbers for theConsumer Price Index-Seasonally Adjusted U. S. City Average For AllIterns For All Urban Consurners (CPI-U) for the index numbers for theCPI-U applicable to the Dallas-Fort Worth geographical region. Ifboth the CPI-U for the Dallas-Fort Worth geographical region and theU. S. City Average are discontinued during the term of this lease,the remaining rental adjustments called for in this section shall bemade using the statistics of the Bureau of Labor Statistics of theUnited States Department of Labor that are =lost nearly comparable tothe CPI-U applicable to the Dallas-Fort Worth geographical region.If the Bureau of Labor Statistics of the United States Departnent ofLabor ceases to exist or ceases to publish statistics concerning thepurchasing power of the consumer dollar during the term of thislease, the remaining rental adjustments called for in this sectionshall be made using the nost nearly comparable statistics publishedby a recognized financial authority selected by Lessor . Pb, / SeLvid9e Lease Agrearent - Page 5 iRa r ( RIGHTS ARD OBLIGATIONS OF LESSEE A. USE OF LEASED PREMISES. Lessee is granted the non-exclusiveprivilege to engage in or provide the following: 1. Hangar Leases and Rental. The rental or lease of hangarsand hangar space and related facilities upon the leasedpremises . Office Space Lease or Rental. The rental or lease of officespace in or adjoining Lessee's hangars . 3.Aircraft Storage and Tie Down. To provide parking, storageand tie down service, for both Lessee's and itinerantaircraft upon or within the leased premises. Lessee, his tenants and sublessees shall not be authorized toconduct any services not specifically listed in this agreement. Theuse of the lease premises of Lessee, his tenants or sublessees shallbe limited to only those private, commercial, retail or industrialactivities having to do with or related to airports and aviation.No person, business or corporation may operate a commercial, retailor industrial business upon the premises of Lessee or upon theAirport without a lease or license fran Lessor authorizing suchcomrnercia1, retail or industrial activity. The Lessor shall notunreasonably withhold authorization to conduct aeronautical orrelated servIces. B e STANDARDS estandards : Lessee shall meet or exceed the following 1.Address. Lessee shall file with the Airport Manager andkeep current his mailing addresses, telephone numbers andcontacts where he can be reached in an emergency. 2. 39 List, Lessee shall file withcurrent a list of his tenants the Airport Managerand sub les sees e and keep Conduct. Lessee shall contractually require his employersand sublessees (and sublessee’s invitees) to abide by theterms of this agreement. Lessee shall promptly enforce hiscontractual rights in the event of a default of suchcovenants . 4.Utilities , Taxes and Fees. Lessee shall neet all expensesand payments in connection with the use of the Premises andthe rights and privileges hereIn granted, including thetimely payment of utilities, taxes, perrnit fees, licensefees and assessments lawfully levied or assessed. 5.Laws. Lessee shall conply with all current and futurefederal, state and local laws, rules and regulations which SeLvid9e Lease Agreerrent - Page 6 JW i I nay apply to the conduct of business contemplated, includingrules, regulations and ordinances promulgated by Lessor, andLessee shall keep in effect and post in a prominent placeall necessary and/or required licenses or permits . 68 Maintenance of Property. Lessee shall be responsible forthe maintenance, repair and upkeep of all property, build-ings, structures and improvements, including the mowing orelimination of grass and other vegetation on the Premises,and shall keep said Premises neat, clean and in respectablecondition, free from any objectional matter or thing.Lessee agrees not to utilize or permit others to utilizeareas on the leased premises which are located on theoutside of any hangar or building for the storage of wreckedor permanently disabled aircraft, aircraft parts , automo-biles, vehicles of any type, or any other equipment or itenswhich would distract from the appearance of the leasedpremises. Lessee agrees that at no time shall the leasedpremises be used for a flea market type sales operation. 79 Unauthorized use of premises. Lessee may not use any of theleased land or premises for the operation of a motel, hotel,restaurant, private club or bar, apartment house, or forindustrial , commercial or retail purposes , except asauthorized herein. 8+Dwellings. It is expressly understood and agreed that nopermanent dwelling or domicile may be built, moved to orestablished on or within the leased premises nor nay lessee,his tenants, invitees, or guests be permitted to reside orremain as a resident on or within the leased premises orother airport premises. 9.Quiet Possession. Lessee shall quit possession of allpremises leased herein at the end of the primary term ofthis lease or any renewal or extension thereof , and deliverup the prenises to Lessor in as good condition as existedwhen possession was taken by Lessee, reasonable wear andtear excepted. 10 , Hold Harmless. Lessee shall indemnify and hold harmlessLessor fron and against all loss and damages, includingdeath, personal injury, loss of property or other damages,arising or resulting from the operation of Lessee’s businessin and upon the leased premises. 11. Chemicals. Lessee agrees to properly store, collect anddispose of all chemicals and chemical residues; to properlystore, confine, collect and dispose of all paint, includingpaint spray in the atmosphere, and paint products ; and tocomply with all Local, State and Federal regulations SeLvidge Lease Agreerrent ' Page 7 Wi (i governing the storage, handling or disposal of such chemi-cals and paints. 12 e Hazardous Activities . Should Lessee violate any law, rule,restriction or regulation of the City of Denton or theFederal Aviation Adninistration, or should the Lessee engagein or permit other persons or agents to engage in activitIeswhich could produce hazards or obstruction to air naviga-tion, obstructions to visibility or interference with anyaircraft navigational aid station or device, wither airborneor on the ground, then Lessor shall state such violation inwriting and deliver written notice to Lessee or Lessee/sagent on the leased prenises, or to the person (s) on theleased premises who are causing said violation(s) , and upondelivery of such written notice, Lessor shall have the rightto demand, that the person (s) responsible for the viola-tion (s) cease and desist fro=! all such activity creating theviolation (s) . In such event, Lessor shall have the right todemand that corrective action, as required, be commencedixunediately to restore the leased prenises into conformancewith the particular law, rule or aeronautical regulationbeing violated. Should Lessee, Lessee/s agent, or theperson(s) responsible for the violatIon (s) fail to cease anddesist from said violation(s) and to immediately commencecorrecting the violation (s) , and to cornplete said correc-tions within twenty-four (24) hours following writtennotification, then Lessor shall have the right to enter ontothe leased premises and correct the violation (s) , and Lessorshall not be responsible for any damages incurred to anyimprovements on the leased premises as a result of thecorrective action process. D. SIGNS. During the tern of this Agreenent, Lessee shall havethe right, at its own expense, to place in or on the lease Premisessigns identifying Lessee. Said signs shall be of a size, shape anddesign, and at a location or locations, approved by the Lessor andin conformance with any overall directional graphics or sign programestablished by Lesser for the Airport. Lessor’s approval shall notbe withheld unreasonably. Said signs shall be naintained in goodrepair throughout the term of this agreement. Notwithstanding anyother provision of this agreement , said signs shall remain the prop-erty of Lessee. Lessee shall remove, at its expense, all lettering,signs and placards so erected on the prenises at the expiration ofthe term of this Agreement or extensions thereof . VI + COVENANTS BY LB880R Lessor hereby agrees as follows: A. PEACEFUL EMPLOYMENT. That on payment of rent, fees, andperformance of the covenants and agreenents on the part of Lessee to Setvidge Lease Agrearent ' Page 8 XV r ( be performed hereunder,leased premises and all Lessee shall peaceably hold and enjoyrights and privileges herein granted;the B. COMPLIANCE. Lessor warrants and represents that in theestablishment, construction and operation of said Denton MunicipalAirport, that Lessor has heretofore and at this tine is complyingwith all existing rules, regulations, and criteria distributed bythe Federal Aviation Administration, or any other governmentalauthority relating to and including, but not limited to, noiseabatement, air rights and easementis over adjoining and contiguousareas, over-flight in landing or takeoff , to the end that Lesseewill not be legally liable for any action of trespass or similarcause of action by virtue of any aerial operations of adjoiningproperty in the course of nor=laI take-off and landing proceduresfrom_ said Denton Municipal Airport; Le$$or further warranEs andrepresents that at all times during the term hereof , or any renewalor extension of same, that it will continue to comply with theforegoing . VII a SPECIAL CONDITIONS It is expressly understood and agreed by and between Lessor andLessee that this lease agreeIrlent is subject to the following specialterms and conditions . A. RUNWAYS AND TAXIWAYS , That because of the present sixtythousand (60 , 000) pound continuous use weight bearing capacity ofthe runway and taxiways of the Airport, Lessee herein agrees tolimit all aeronautical activIty including landing, take-off andtaxiing, to aircraft having an actual weight, including the weightof its fuel, of sixty thousand (60, 000) pounds or less, until suchtime that the runway and designated taxiways on the Airport havebeen improved to handle aircraft of such excessive weights. It isfurther agreed that, based on qualified engineering studies, theweight restrictions and provisions of this clause may be adjusted,up or down, and that Lessee agrees to abide by any such changes orrevisions as such studies nay dictate. "Aeronautical Activity"referred to in thIs clause shall include that activity of the Lesseeor its agents or subcontractors, and its customers and invitees, butshall not include those activities over which it has no solicitorypart or control, such as an unsolicited or unscheduled or emergencylanding. A pattern of negligent disregard of the provisions of thissection shall be sufficient to cause the imnediate termination ofthis entire Agreement and subject Lessee to liability for anydamages to the Airport that might result. VIII w LEASEHOLD IMPROVEMENtF8 A. REQUIREMENTS: Before commencing the construction of anyirnprovenents upon the premises, Lessee shall sub gIlt: SeLvidge Lease Agreerrent - Page 9 9 XJ I ( 18 Documentation, specifications, or design work, to beapproved by the Lessor, which shall establish that theinprovenents to be built or constructed upon the leasepremises are in conformance with the overall size, shape,color, quality and design, in appearance and structure ofthe progran established by Lessor on the Airport . 2. 38 All plans and specifications showing the location upon thepremises of the proposed construction; The estimated cost of such construction. No construction nay commence until Lessor, acting by its CityCouncil, has approved the plans and specifications and the locationof the inprovement:s, the estimated costs of such construction andthe agreed estimated life of the building or structure. Approval bythe City Council shall not be unreasonably withheld; should theCouncil fail to deny Lessee/s plans and specifications within sixty(60) days of submission thereof to the Council, such plans andspecifications shall be deened approved. DocuInentary evidence ofthe aQtual cost of construction on public areas only (such astaxiways) shall be delivered by Lessee to Lessor’s City Manager frontime to time as such costs are paid by Lessee, and Lessor’s CityManager is hereby authorized to endorse upon a copy of this leasefiled with the City Secretary of Lessor such actual amounts as heshall have found to have been paid by Lessee, and the findings ofthe City Manager when endorsed by him upon said contract shall beconclusive upon all parties for all purposes of this agreement. B. ADDITIONAL CONSTRUCTION OR IMPROVEMENTS: Lessee is herebyauthorized to construct upon the land herein leased, at his own costand expense, buildings, hangars, and structures, that Lessor andLessee mutually agree are necessary for use in connection with theoperations authorized by this lease, provided however , beforecommencing the construction of any improvements upon the premises ,Lessee shall submit plans and specifications for approval by Lessoras specified in Article VIII . A. , above. C. OWNERSHIP OF IMPROVEMENTS: All buildings and improvementsconstructed upon the premises by Lessee shall remain the property ofLessee unless said property becomes the property of Lessor under thefollowing conditions, terns and provisions: Removal of Buildings. No building or permanent fixture maybe removed from the premises . 2.Assumption. All buildings and improvements of whatevernature renaining upon the leased premises at the end of theprinary term, or any extension thereof , of this lease shallautomatically become the property of Lessor absolutely infee without any cost to Lesser. SeLvidge Lease A9rearent - Page 10 wi f L 38 Building Life. It is agreed that the life of the buildingto be constructed by Lessee on the property herein leased isthirty (30) years. 4.Cancellation. Should this lease be cancelled for any reasonbefore the end of the thirty (3D) year expected buildinglife, it is especially understood and agreed that Lessorreserves the right to purchase all buildings, structures andimprovements then existing upon the premises by tendering toLessee one thirtieth (1/30) of the undepreciated value ofsuch building for each year rernaining on the agreed life ofsuch building. The undepreciated value of all improvenentsis to be determined by having such inprovements appraised bythree appraisers, one appointed by Lessor, one appointed byLessee and one appointed by the two appraisers. IX e 8UBROGAgIION OF MORTGAGEE Any person, corporation or institution that lends money toLessee for construction of any hangar, structure, building orimprovement and retains a security interest in said hangar, struc-ture, building or inprovement shall, upon default of Lessee’sobligations to said mortgagee, have the right to enter upon saidleased premises and operate or manage said hangar, structure,building or improvement according to the terms of this Agreement,for a period not to exceed the term of the mortgage with Lessee, oruntil the loan is paid in full, whichever comes first, but in noevent longer than the term of this lease. It is expressly under-stood and agreed that the right of the mortgagee referred to hereinis linited and restricted to those improvenents constructed withfunds borrowed from mortgagee . X e RIGHT OF EASEMENT Lessor shall have the right to establish easements , at no costto Lessee, upon the leased ground space for the purpose of providingunderground utility services to, from or across the airport propertyor for the construction of public facilities on the Airport. How-ever, any such easements shall not interfere with Lesseers use ofthe leased prenises and Lessor shall restore the property to orig-inal condition upon the installation of any utility services on, in,over or under any such ease=lent or the conclusion of such construe-tion, Construction in or at the easenent shall be completed withina reasonable tine, XI e ASSIGNMENT OF LEASE Lessee expressly covenants that it will not assign this lease,convey more than ten percent (108) of the interest in his business,through the sale of stock or otherwise, transfer, license, norsublet the whole or any part of the said prenises for any purpose,except for rental of hangar space or tie-down space, without the Setvidge Lease Agreerrent - Page 11 al?J (( except for rental of hangar space or tIe-down space, without thewritten consent of Lessor. Lessor agrees that it will not unreason-ably withhold its approval of such sale, sublease, transfer,license, or assignInent of the facilities for the airport relatedpurposes ; provided however, that no such assignment, sublease,transfer, license, sale or otherwise shall be approved if therental, fees or payments, received or charged are in excess of therental or fees paid by Lessee to Lessor under the terms of thislease, for such portion of the premises proposed to be assigned,subleased, transferred, licensed, or otherwise. The provisions ofthis lease shall remain binding upon the assignees, if any, ofLessee XII e INSURANCE A. REQUIRED INSURANCE: Lessee shall naintain continuously ineffect at all tUnes during the tern of this agreement, at Lessee’sexpense, the following insurance coverage: 1.Comprehensive general liability covering the leased premis-es, the Lessee or its company, its personnel, and itsoperations on the airport. 2. 3. Aircraft liability to cover all flight operations of Lessee. Fire and extended coverage for replacement value for allfacilities used by the Lessee either as a part of thisagreement or erected by the Lessee subsequent to thisagreement . 4+Liability insurance limits shall be in the following ninimumamounts : Bodily Injury and Property Damage: One Million Dollars ($1,000 , 000) combined single limits ona per occurrence basis. 5.All policies shall name the City of Denton as an addItionalnaned insured and provide for a minimum of thirty (3D) dayswritten notice to the City prior to the effective date ofany cancellation or lapse of such policy. 60 70 All policies itlust be approved by the Lessor. The Lesser shall be provided with a copy ofpolicies and renewal certificates.all such During the term of this lease, Lessor herein reserves the rightto adjust or increase the liability insurance amounts required ofthe Lessee, and to require any additional rider, provisions, orcertificates of insurance, and Lessee hereby agrees to provide any Selvidge Lease Agreement - Page 12 }%] ( such insurance requirements as nay be required by Lesser ; providedhowever, that any requirements shall be commensurate wIth insurancerequirements at other public use airports similar to the DentonMunicipal Airport in size and in scope of aviation actIvities,located in the southwestern region of the United States , Lesseeherein agrees to comply with all increased or adjusted insurancerequirements that nay be required by the Lessor throughout theoriginal or extended term of this lease, including types of insur-arIce and monetary amounts or limits of insurance, and to conply withsaid insurance requirenents within sixty (60) days following thereceipt of a notice in writing from Lessor stating the increased oradjusted insurance requirements. Lessee shall have the right tonaintain in force both types of insurance and amounts of insurancewhich exceed Lessor’s minimurn insurance requirements. In the event !hat State law should be amended to require typesof insurance and/or insurance amounts which exceed those of like orsinilar public use airports in the southwestern region of the UnitedStates of America, then in such event, Lessor shall have the rightto require that Lessee maintain in force types of insurance and/oramount of insurance as specified by State law. Failure of Lessee to conply with the minimun specified amountsor types of insurance as required by Lessor shall constituteLessee’s default of this Lease, XIII + CANCELLATION BY LE880R In the event that Lessee shall file a voluntary petition inbankruptcy or proceedings in bankruptcy shall be instituted againstit and Lessee thereafter is adjudicated bankrupt pursuant to suchproceedings , or any court shall take jurisdiction of Lessee and itsassets pursuant to proceedings brought under the provisions of anyFederal reorganization act, or Lessee shall be divested of itsestate herein by other operation of law; or Lessee shall fail toperform, keep and observe any of the terns, covenants, or conditionsherein contained, or on its part to be performed, the Lessor naygive Lessee written notice to correct such condition or cure suchdefault and, if any condition or default shall continue for thirty(30) days after the receipt of such notice by Lessee, then Lessermay terminate this lease by written notice to Lessee. In the eventof default, Lessor has the right to purchase any or all structureson the leased premises under the provisions of Section VIIIParagraph C. 4 . (Cancellation) hereof . XIV e CANCELLATION BY LESSEE Lessee nay cancel this Agreement, in whole or part, and terni-nate all or any of its obligations hereunder at any time, by thirty(30) days written notice, upon or after the happening of any one ofthe following events: (1) issuance by any court of competent juris-diction of a permanent injunction in any way preventing or restrain- SeLvidge Lease A9reerrent ' Page 13 aVJ I ing the use of said airport or any part thereof for airport pur-poses; (2) the breach by Lessor of any of the covenants or agree-ments contained herein and the failure of Lessor to remedy suchbreach for a period of ninety (90) days after receipt of a writtennotice of the existence of such breach; (3) the inability of Lesseeto use said premises and facilities continuing for a longer periodthan ninety (90) days due to any law or any order, rule or regula-tion of any appropriate governmental authority having jurisdictionover the operations of Lessor or due to war, earthquake or othercasualty; or (4) the assunption or recapture by the United StatesGovern=lent, or any authorized agency thereof , of the maintenance andoperation of said airport and facilities or any substantial part orparts thereof . Upon the happening of any of the four events listed in thepreceding paragraph, such that the leased premises cannot be usedfor aviation purposes, then the Lessee may cancel thIs lease asaforesaid, or may elect to continue this lease under its terms,except, however, that the use of the leased premises shall not belimited to aviation purposes, their use being only limited by suchlaws and ordinances as may be applicable at that time , XV B M18CELTIANEOtJ8 PROVISIONS As ENTIRE AGREEMENT, This Agreement constitutes the entireunderstanding between the parties and as of its effective datesupersedes all prior or independent Agreements between the partiescovering the subject matter hereof . Any change or nodificationhereof shall be in writing signed by both parties. B. BINDING EFFECT. All covenants, stipulations and agreementsherein shall extend to, bind and inure to the benefit of the legalrepresentatives, successors and assigns of the respective partieshereto C. SEVERABILITY. If a provision hereof shall be finallydeclared void or illegal by any court or administrative agency hav-ing jurisdiction, the entire Agreement shall not be void; but therenaining provisions shall continue in effect as nearly as possiblein accordance with the original intent of the parties . D. NOTICE. Any notice given by one party to the other inconnection with this agreernent shall be in writing and shall be sentby registered mail, return receipt requested, with postage andregistration fees prepaid as follows : 1+If to Lessor, addressed to: City ManagerCity of DentonDenton, Texas 76201 Setvidge Lease Agrearent ' Page 14 owl 2 , if to Lessee, addressed to: !!q: : 1L : IC) : :1 g =Lr : g g Ie / / ICIIaF) / 1(1yleWhad C#aaasangir, Texa, 76266 dkld£d / f/ /7&38£: Notices shall be deemed to have been received on the date ofreceipt as shown on the return receipt. E. HEADINGS. The headings used in this Agreement are intendedfor convenience of reference only and do not define or limit thescope or neaning of any provision of this Agreement. F. GOVERNING IAW. This Agreement is toaccordance with the laws of the State of Texas.be construed in IN WITNESS WHEREOF, the parties have executed this Agreement asof the day and year first above written. CITY OF DENTON, TEXAS, LESSOR ATTEST : &WALTERS , CITY SECRETARY ENTON , TEXAS APPROVED AS TO LEGAL FORM :MICHAEL A. BUCEK, ACTING CITY ATTORNEYCITY OF DENTONr TEXAS SeLvid9e Lease A9reerrent - Page 15 JU THE STATE OF TEXAS S COUNTY OF DENTON S ent was acknowledged before me1995 by John K. Selvidge.on the d3 day of My Commission Expires :j -3 l– ?? K,JEAN[rTE scarF NarARY PUBLIC, rarE OF TaB WI Cwnmbsim Expim March :1, 197 SeLvidge Lease Agreerrnnt - Page 16 9%!