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2010-055
s;lour dac~~mentslordinaucesllOlairport lase estoppel l~angars plus.doc ORDINANCE N0. ZOlO-OJT AN ORDINANCE OF THE CITY OF DENTON, TEAS APPROVING THE ISSUANCE OF AN ESTOPPEL CERTIFICATE TO HANGARS PLUS LLC AND JUSTIN STATE BANI~; AND PROVIDING AN EFFECTIVE DATE, wHEREAS, on June b, 200b the City of Denton, Texas thereinafter the "City") entered into that cet~tain Airport Lease Agreement with Hangars Plus L.L,C, ~"Hangars Plus"} at the Denton Municipal Airport dated June b, 200b ~"Lease"}; and wHEREAS, Hangars Plus has requested the City issue an Estoppel Certificate with it and Justin State Bank ~"JSB"} to facilitate the ~•efinancing of improvements const~~ucted by Hangars Plus under the Lease; and WHEREAS, at its meeting of January 13, 2010 the Airport Advisory Board recommended that the City Council approve the Estoppel Ce~~tif icate; and wHEREAS, the City Council deems it in the public interest to issue an Estoppel Certificate to Hangars Plus and JSB, which will amend the Lease and will further facilitate the ~4efinancing of the improvements constructed by Hangars plus under the Lease; NOw, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The City Manager or his designee is hereby authorized to issue an Estoppel Cez~tificate to Hangars Plus and JSB that will amend the Lease, said lease being attached hereto as Exhibit A and made a part of this ordinance, substantially in the form of the Lease Estoppel, Exhibit B 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 da of ~ ~ , 2010, y MA _A. OUGHS, MAYOR ATTEST; JENNIFER wALTERS, CITY SECRETARY BY: S.IOi~r DocumentslQrdinancesll~lAirport Lease Estoppel Hangars Plus.doc APPROVED AS T~ LEGAL FGRM: ANNA BURGESS, CITY ATTGRNEY BY: r, Pale 2 E~chibit A S:I~ur Documen~slCnntra;ctsla~ .,~r__ - AIRPORT LEASE AGREEMENT COMMERCIAL OPERATOR Thi ease A Bement is made and executed to be effective as of the ~ da ~ y of , ~~ti6 the Effective Date"} at Denton, Texas, by and between e City of Denton, Texas, a rnunicipal corporation, hereinafter referred to as "Lessor", and Hangars Plus L,L.G., hereinafter referred to as "Lessee", WITNES SETH: WHEREAS, Lessor now owns, controls and operates the Denton Municipal Airport the "Airport"~ in the City of Dentin, County of Denton, State of Texas; and WHEREAS, Lessee desires to lease certain premises at the Airport and construct and maintain an aircraft hangar and related aviation facilities thereon; NOW, THEREFORE, for and in consideration of the promises and the mutual covenants contained this Agreement, the partiies agree as follows; I, CC~NDTTT~N~ CAF T~F;A~SF~~,.~~~~RF~F.iVfF,NT NOTWITHSTANDING ANY LANGUAGE TO THE CONTRARY HEREINAFTER CONTAINED, THE LANGUAGE IN PARAGRAPHS A THROUGH D C]F THIS SECTION SHALL BE BINDING. A. .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, N~N~T]T~CRTMINATTCIN: Lessee, for itself, its personal representatives, successors, and assigns, as a paxt of the consideration hereof, does hereby covenant and agree as a covenant runni~a.g 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 af, or be otherwise subj ected to discrimination in the use of sand facilities; 2. In the construction of any improvements on, over, or under such land and the t . z 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 b e subj ected 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, Nondiscrirni~ nation in Federally assisted programs of the Department of Transportation W Effectual of Title VI of the Civil Rights Act of 1964, as said Regulations may be amended, C. It is clearly understood by Lessee that no right or privilege has been granted which would operate to . prevent any person, firm or corporation operating aircraft on the Airport from performing any services on its own aircraft with its own regular employees including, but not limited to, rnaintenance and repairs that it may choose to perform, D, ~t?NyFXC7~~T~TVF~ R7~~T. 1t 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, pt 1RT1TC AREA 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, Lessor shall be obligated to maintain and beep 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 tape any action it considers necessary to protect the aerial approaches of the Ahport 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 hangarlofficelshop 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 gage 2 i future agreement between Lessor and the United States or agency thereof, relative to the operation or maintenance of the Airrport, L E] E~ Lessor, for and in consideration of the covenants and agreements herein contained, to be kept by Lessee, does hereby demise and lease unto Lessee, and Lessee does hereby lease front Lessor, for the lease term described in Article I~, the following described land situated zn Denton County, Texas; A. A tract of land, being approximately 74 feet by 6D feet or 4,20o square feet, drawn and outlined on Attachment "A", and legally described in Attachment "B" as such attachments being incorporated herein by reference the "Leased Premises"}. Together with the right of ingress and egress to the Leased Premises; and the right in comn~.on 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 mean all property located within the metes and bounds described and identified within Attachment "B", including leasehold improvements constructed by the Lessee, but not including certain easements or property owned andlor controlled by the Lessor. B. NONE: There will be no improvements provided by Lessor, except as set forth in Article II,F, "Access to Utilities" below. 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, C,. The Lessee shall design, construct and maintain all drainage improvements to the Leased Premises and construct and maintain all apron approaches both to the north and south and provide a parking area on the Leased Premises. The Lessor will be responsible for keeping the drainage pipes cleared out and Lessee shall be responsible for improvements to the Leased Premises in compliance with Chapter 35, Subchapter l9 Drainage Standards} City of Denton Code of Ordinances Denton Development Code, latest edition, and the latest City of Denton Drainage Criteria Manual February 2~, 2Qa2}. Lessee shall provide complete construction plans prepared by an Engineer licensed in Texas for the Lessor's review and approval in accordance with Lessor's Planning Department procedures and requirements for similar private development projects within the City. Lessee shall prepare plans following the guidelines in the latest edition of the City of Denton Construction Criteria Manual and shall not commence construction until Lessor approves Lessee's construction plans, Lessee shall enter into a Page 3 S f / Development Contract with Lessor and pay Lessor for all inspection services for grading and drainage improvements for the property, All above described improvements to be constructed by Lessee are cared the "Lessee's Improvements"}, The Lessee shall submit a full drainage plan drawn up by Lessee's engineer as referenced above no later than 45 days from the date of execution the effective date} of this Lease Agreement, Construction of Lessee's Improvements shall be commenced no later than 270 days the "Commencement Period"} and completed no later than 720 days after the Effective Date (the "Construction Period"}. Construction of Lessee's Improvements is considered commenced upon issuance of a building permit and construction of any portion of the proposed improvements, Construction of Lessee's Improvements is considered complete upon the issuance of a Certih.cate of Occupancy for the entire hangar, drainage and utility .improvements, In addition, as a condition precedent to the effectiveness of this Lease Agreement, within 60 days after the Effective Date of this Lease Agreement, Lessee shall provide to Lessor ~i} a written estimate of the cost to construct Lessee's Improvements prepared by a contractor who has demonstrated experience in the successful construction of improvements similar to Lessee's Improvements the "Construction Cost Estimate"}, iii} a written schedule of construction to complete Lessee's Improvements, and viii} a written loan commitment from a lending institution providing far sufficient funding to cover the Construction Cost Estimate called "Conditions Precedent"}. Should the Conditions Precedent not be met either party may terminate this Lease Agreement by giving the other party written notice, in which case this Lease Agreement shall be null and void and of no further force and effect, Such termination shall not prevent the Lessee firom submitting a new proposed lease request at a later date. The parties may extend the 60~day time period if in writing signed by both parties. Lessee is not entitled to take possession of the Leased Premises under this Lease Agreement until the Conditions Precedent have been ful~,lled, Notwithstanding anything contained ~ this Lease Agreement to the contrary, a failure to deliver a full drainage plan, as referenced above within 45 days from the date of execution of this Lease Agreement, a failure tv commence the Lessee's Improvements within the Commencement Period or to complete the Lessee's 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 upon 3o days written notice of cancellation to Lessee and in the case of the failure to submit a drainage plan in the 45 days period, the Lease shall automatically terminate without notice and Lessee shall immediately remove itself from the premises, In such case Lessee's rights under the Lease Agreement will immediately cease and be forfeited, and all of Lessee's Improvements shall immediately become the property of Lessor at no cosh, expense or other compensation paid by Lessor to Lessee; and Lessee shall immediately vacate the Leased Premises. E, ,Lessor an ' d Lcsscc by mutual ~.~rccmcnt may establish, on ~hc Leased Premises, easements for public access on roads and taxiways. Page 4 i ~ ~ r rr I,' F. Lessor represents that there are water, sewer, natural gas and electricity lines within close proximity to the Leased Premises available to "tap-in" by Lessee, and that the same are cuff dent for usual and customary service on the Leased Prenuses. ~f The term of this Lease Agreement shall be for a period of thirty X30} years, com- mencing on the 15th day of June, 2006 and continuing through the 14th day of June of 203 6, unless ~ earlier terminated under the provisions of the Lease Agreement the "Lease Term"}, Lessee has the option to renew for two ~2} additional ten X10}year terms, In order to exercise the first option Lessee must provide written notice to Lessor of its intent to exercise the first 10 year option no later than 1S0 days before the expiration of the 30 year primary term. To exercise the second option such written notice must be provided no later than 180 days before the expiration of the first 10 year option term. The rental and terms to be negotiated for the option terms shall be reasonable and consistent with the then value, rentals and terms of similar property on the Avport. 1V. PAYNCENT~. RFNTAT,~ ,ANT~,~F~F~ Lessee covenants and agrees to pay Lessor, as consideration for this Lease Agreement, the following payments, rentals and fees; A. T~ANT) ANl7 RF.NTAT~. Rental shall be due and payable to Lessor in the sum of $0.12 per square foot or $504.00 per year the "anginal Rent"}, the first years rental is payable in advance by Lessee on or before the execution of this Lease Agreement and is nonrefundable in the event the Lease is ternvnated before the end of the ~.rst year. Thereafter rent is payable in twelve X12} equal monthly installments in the sum of $42.00 per month x$42.00} in advance, 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 1st day of actober, at the beginning of the City's fiscal year, each and every year of this Lease Agreement. Notwithstanding the foregoing, the annual rental will b e reduced by the current lease rate per square foot, as adjusted by the CPS U referenced in Section T~',C., times the number of square feet comprising all easements established in accordance with Article Il B, T~ES~C~R TMPR~VF,IVfF,NT~~,~,F~N_T. ~ NDNE: There are no Lessor improvements on the Leased Premises, C, .All payments due Lessor from Lessee shall be made to Lessor at the offices of the Finance Department of the City of Denton, Customer Service Division, 601 west Hicl~ory, 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 v~ill 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 ~aqe 5 I ~ I rentallfee amount will be due, A one percent charge will be added on the first of each subsequent month until the unpaid rentallfee 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 DallaswFart worth Bureau of Labor Statistics bears to the previous odd month 2006 index larch}, which was ~i~S2-$4 ~ 1fl0}. Each rental adjustment, if any, shall occur on the 1 st day of November, beginning in 2008, and every other year thereafter an 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 na 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, a~ compiled by the U.S. Department of Labor, Bureau of Labor Statistics, is discontinued during the Lean Team, 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 IndexySeasonally 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-Fart 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 sha11 be I~! made using the most nearly comparable :statistics published by a recognized fnaancial authority selected by Lessor. V. A. ~ NSF CAF LFA~F~D PRF,MT^~F~,~. Lessee is granted the nonexclusive .privilege to engage in ownerloperator activities providing the follawing aviation services; I. Har~^anct C~f~ce ~~ace ,eas~n~, Lessee is granted the non-exclusive right to gage 6 1 1 ~ . rent hangar and office space, Lessee, its tenants, employees, invitees and guests shall not be authorized to conduct any services not speci~.cally listed in this Lease Agreement. The use of the Leased Premises by Lessee, its tenants, employees, invitees or guests shall be limited to only Chase private, commercial, retail or industrial activities having to do with ar 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 authorization to conduct aeronautical or related services, B. STANi~ARDS. Lessee shall meet or exceed the following standards: l , 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. I~ Lessee shall file with the Airport Manager and keep current a list of its tenants and subleases, to include a list of aircraft and the aircraft's corresponding aircraft identification number. 3, ~~.u.~, Lessee shall contractually require its employees and sublessees hand 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, ' ' ` 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, Imo. Lessee sha11 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 andlor required licenses or permits, ~f ain~enance of Pr-~~. 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 beep the Leased Premises neat, clean and in respectable condition, free from any obi ectional 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 ar gage 7 r building for the storage of wrecked or permanently disabled aircra~, 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 far a flea market type sales operation. 7, P~,intin~ cif 13llil~jn~~, During the Lease Term of this Lease Agreement and during each extension, Lessor shall have the right to require, not more than once every hve years, that the metal exterior of hangars} or buildings} located on the Leased Premises be repainted, The Lessor may require Lessee to repaint said exteriors according to Lessor's specifications Ito specify color of paint, quality of workmanship and the year and month in which the hangars} or buildings} are to be painted, if needed.} Lessee shall complete the painting in accordance with such specifications within one ~l} year of receipt of notice from Lessor, Lessee agrees to pay all costs and expense involved in the hangar or building painting process, Failure of Lessee to complete the painting required by Lessor, within the one ~1}year period shall constitute Lessee's default under this Lease Agreement, S. .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. . ~t is expressly understood and agreed that no dwelling or domicile maybe 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 ar other Airport premises. Lessee may have a pilot lounge, including restroom and shower facilities for use by flight crew and passengers, 10, [~~i~_P~~~e~si~r~, Lessee shall quit possession of the Leased Premises at the end of the Lease Term or any renewal or extension thereof, ar 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, i 1, .Lessee must indemnify, hold harmless and defend the Lessor, its officers, agents and employees, from and against liability for any and all claims, liens, suits, demands andlor actions for damages, injuries to persons including death}, property damage, including loss of use}, and expenses, including court casts, attorneys' fees and other reasonable costs, occasioned by or incidental to the Lessee's occupancy or use of the Leased Premises or Page 8 i i the Airport andlor acti°ities 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 properly, 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 far 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. FAt ~T~T ~F ANY~~~.~TTTF,R PF.R~,S, , ~3R F, ,TAY. l~. ,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. 3. Ka~ardn~s Ac~ivitl~. 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 gage 9 r i ~ obstruction to air navigation, obstructions to visibility or interference with any aircra~ 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 persons} on the Leased Premises who are causing said violations}, and upon delivery of such written notice, Lessor shall have the right to demand that the persons} responsible for the violation~s~ cease and desist from all such activity creating the violations}, 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 persons} responsible far the violations} fail to cease and desist from said violations} and to immediately commence correcting the violations}, and to complete said corrections within twenty~four X24} hours following written notification, then Lessor shall have the right to enter onto the Leased Premises and correct the violation~s~ at the sole cast 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, C. ~I~. No signs, posters, or other similar devices ~"Signage"} shall be placed on the exterior of the Lease hmprovements or on~anypartion of the Leased Premises or Aizport property without the prior written approval of Lessor, Lessee, at its sale 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 te~ation of this Lease Agreement. If Lessee fails to remove the Signage then Lessor may do so at the sole cast 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." D. Lessor and its designees shall have the right to enter the Leased Premises upon reasonable advance notice written or oral} and at any reasonable tunes 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. Page 1.0 a i f .A-t Lessor hereby agrees as follows: A, PFACFIFTIT, F,N~C~YM~F,NT, Upon 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 enj oy the Leased Premises and all. rights and privileges herein granted, B, ~C~MFL~ANCE, Lessor warrants and represents that in the establishment, canst~ruction 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 Aviation Admini.stxation, 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~flig~t 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 canaply with the foregoing, VII. 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. . Because of the present thirty thousand ~Z0,4a4} pound continuous use weight bearing capacity of the taxiway, Lessee herein agrees to Limit all aeronautical activity including landing, take-off and taxiing, to aircra~ having an actual weight, including the weight of its fuel, of thirty thousand ~~O,ODO} pounds or less, until such time that the runway and designated taxiways on the Airport have been improved to handle aircra~ 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, ~ITQ, T~EA~F~N~Y,T~wTMPRC}VF~~`,NT~, A, RE(~T JTREMENT~. Before commencing the canstru.ction of any improvements on the Leased Premises including Lessee's Improvements the "Lease Improvements"}, Lessee shall submit: Page 1~. 1, 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. All plans and specifications showing the location upon the Leased Premises of 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 dime 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 far all purposes of this Lease Agreement. No later than 30 days after completion of the Lease Improvements, Lessee shall submit to Lessor detailed as built plans of the Lease Impravernents and documentary evidence acceptable to Lessor evidencing the total cost to construct the Lease Improvements ~"Cost to Construct Lease Improvements"}, B. : 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 Lease Improvements. C. ~~LINFR~HIP„~F~.T1~~VF~i1Cf~~~: Except as otherwise provided in this Lease Agreement, the Lease Improvements constructed upon the Leased Premises by Lessee shall remain the property of Lessee during the Lease Term. subject to the following conditions, terms and provisions: 1. No building ar permanent fixture may be removed from the Leased Premises. 2. The Lease Improvements shall automatically become the property of Lessor absolutely free, without any cost to Lessor, at the end of the Lease Term, or any extension thereof, Page 12 t, 4 f ' . 3. The Lease Improvements shah immediately become the property of Lessor at no cost, expense, or compensation to Lessee should Lessee fail to commence or complete the Lessee's Improvements within the Commencement Period or Construction Period as provided in Section II,D, of this Lease Agreement. 4, .Should this Lease Agreement be canceled or ten~unated before the end of the Lease Term, or extension thereof, Lessor shall have the right to purchase all of the Lease Improvements, In the event of a cancellation or termination, other then due to a default by Lessee that has not been cured as provided~below, the purchase price shall be equal to the most recent value of the Lease Improvements as determined by the Denton County Central Appraisal District ~"value of the Lease Improvements"} reduced by 1130 far each year of the Lease Term that has expired as of the date of temvnation (the "Purchase Price"}. Should the Denton County Central Appraisal District not determine a separate value for the Lease Improvements, or should such separate valuation be older than two years, then the Purchase Pace will be determined taping the Cost to Construct the Lease Improvements reduced by 1130 for each year the Lease Term has expired as of the date of termi.n.ation. If the termination or cancellation is due to a default by Lessee that has not been cured within 30 days after written notice of default to Lessee, then the Purchase Price as deterrnin.ed above shall be reduced by 50%. However, if Lessee provides written notice to Lessor within said 3 o 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, I~, Any person, corporation or institution that lends money to Lessee far 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 sand 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., Zt is expressly understood and agreed that the right of the mortgagee referred to herein is limited and restricted to those improvements constructed with funds borrowed from mortgagee, those improvements purchased with the borrowed funds, and those improvements pledged to secure the refinancing of the improvements, R~~rKT~S~~F~~~A~F~N~1T 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, ~ag~ r f.. 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 and 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, ~~.i~NT nF r ~F,a Lessee expressly covenants that it will not assign this Lease Agreement, convey more than ~i~y percent ~5a%} 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 far any ose, p~ except for rental of hangar space or tie-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 Tease, 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. In the event of an assignment or sublease of this Lease Agreement the Lessee, Assignee or Sub~Lessee will pay Lessor an administrative fee of $SOQ and shall also pay all of Lessor's administrative costs of processing such an assignment including, without limitation, all reasonable attorneys fees, administrative costs and Lessor's staff time associated with the assignment. ~~1R~~A~NCF. A, BE4tII1~E~ ,TN~~~ ~R~ ANCF.: 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: i. 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 $ i,o00,QQQ per occurrence and provide coverage for premisesloperatians and contractual liability AND where exposure exists, coverage for, productslcompletedoperotions; explosion, collapse and underground property damage: 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 awnedlLeased Autos, Non awned Autos and Hired Cars. Page 14 i r For operation in aircraft movement areas the limit of liability shall be $ X00,000 per occurrence. For other operations the limit of liability shall be consistent with the amount set by State Law. B. ; In addition to the above referenced coverages, the following insurance is required if the activity or exposure exists or is contemplated: ~ . Ai.rcrafi Fuellail Storage and Dispensing Comprehensive Commercial Public} General Liability shall include coverage or separate coverage shall be provided far Environmental Impairment Liability, 2, Aircraft Sales or Aircra~ Charter and Ai.r 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 $ i 00,000 per person per passenger seat} shall be provided, 3. Aircra~ Rental or Flight Training ~ Aircraft Liability in the amount of $ l,OOD,DOD per occurrence to include Hull Coverage and Liability, Passenger Liability in the amount of $100,000 per person per passenger seat} and StudentlRenter 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, ire fighting, power line or pipe line patrol} ~ Aircraft Liability in the amount of $1,ODD,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. 5, Aircra~ Storage, Maintenance andlor Repair -Aircraft Liability in the amount of $1,OOD,ODD per occurrence to include Hull Coverage and Liability. In addition, Banger Keepers Liability in the amount of $SOO,OOD per occurrence shall be provided. The requirement for Hangar Keepers Liability shall not apply to individual ownerloperators whose primary use of the hangar space is the storage of their own aircra~. The requirement does not apply to such individuals notwithstanding the fact that they may, from time to time, permit the storage of nonRowned aircra~ in the hangar space and charge a fee for the storage of such aircra~ so long as such use is in the nature of a rent~sharing agreement rather than a commercial aircra~ storage business. C. C~VERAC~F~ 7~,}~~F,. ,NTH; A11 insurance coverages shall comply with the gage 1.5 following requirements; 1, All liability policies shall name the City of Denton, and its of~.cers and employees as an additional named insured and provide for a minimum of 3 D days 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, farm 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 noway limit the liability of the Lessee hereunder. 4. The Lessor shall be provided with a copy of all such policies and renewal certificates. Failure of Lessee to comply with the minimum 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 6~ 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 N~unicipal Airport in size and in scope of aviation activities, located in the southwestern region of the United States. x~I. A. In the event that Lessee shall file a voluntary petition in bankruptcy or proceedings in bankruptcy shall be instituted against it and Lessee therea#~er is adjudicated bankrupt pursuant to such proceedings, or any court shall take jurisdiction of Lessee and its assets pursuant to proceedings brought under the provisions of any Federal reorganization act, or Lessee shall be divested of its estate herein by other operation of law; or Lessee shall fail to perform, keep and observe any of the terms, covenants, or conditions herein contained, or on its part ;to be performed except for defaults for failure to supply drainage plans or commencement period or construction period defaults described in Section I[. C. which are covered in subsection B of this Section, 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 ~3 U} days aver 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 Page ~.6 i i ~ ~ . 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 VIlI,C.4, hereof Lessee shall pay all of Lessor's costs associated with such cancellation including, without limitation, Lessee's attorneys fees, court costs, delinquent rental, staff time and other administrative costs and any other damages or lasses resulting from such cancellation, B, The Lessee shall quit and surrender the premises, The Lessor may, at its option, enter into and upon the leased premises, by force or otherwise, without being liable for any prosecution thereof, and without becoming liable to the Lessee, for any damages or for any payment of any kind whatsoever, and may at its uncontrolled discretion, as agent of the Lessee, relet the leased premises, or any part thereof, for the whole or any part or parts of the then un expired term. For purposes such reletting, the Lessor may make alterations and modifications of the leased premises, and may receive and collect all rent payable by virtue of said reletting. 7f Lessor shall, because of non- payment of rent or other breach of condition or covenant or agreement, re-enter and repossess the premises pursuant to the terms herein contained, by summary proceedings, force, or otherwise, the Lessor may at its option, hall the Lessee liable for the difference between the rent and other charges that would have been payable hereunder, during the remainder of the lease term if this Lease had continued in force, and the net rent realized by Lessor by means of re-letting to any other party or parties, on such terms and conditions as maybe in the uncontrolled discretion of the Lessor. The Lessee shall pay monthly in advance, at such periods as the rent hereunder would have fallen due if this Lease had continued, the differential between the original amount of each monthly payment as herein provided for plus such sums, if any, due from the Lessee as additional and augmented rent} and the new proceeds of re-letting aver deducting expenses of every kind and nature in description including without limitation, attorneys fees incurred by the Lessor, including late charges, commissions and the casts of alterations, modifications of the premises made in reletting same ar the expenses in removing or disposing any of Lessee's property which remains on the premises, gage ~,7 ~ k ~ i HIV, ~AN~~LT~TiC}~„~Y t~FS,~,F: Lessee may cancel thus Lease Agreement, in whole or part, and tez~.in.ate all or any of its obligations hereunder at any time, by thirty X30} days written notice, upon or after the happening of any one of the fallowing 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 X90} 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 X90} days due to any law or any order, rule or regulation of any appropriate governmental authority having jurisdiction aver 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 maybe applicable at that time. xV. MtS.~F~r1a~,~TT~.P1~G.~~ A. ,E~C~_ AC~RF,EMENT. 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, RTNT)TNCr FFFF.~'T, 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, ~FVFRABTL~'Y, If a provision hereof shall be finally declared void or illegal by any court or adm%rv.strative 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. .Any notice given by one part~r 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: gage 18 r ~ ~ ~ 4. 1. If to Lessor, addressed to: City N~anager City of Denton 215 E. McKinney Street Denton, Texas 76201 2. If to Lessee, addressed to: Hangars Plus L.L.C. Mr. Anthony Montgomery President 904 Frenchtown Road Argyle, Texas 76226 E, The headings used in this Lease Agreement are intended for convenience of reference only and do not define or Iimit the scope or meaning of any provision of this Agreement. F. ~T~VFRNTNCLT ~A ,Nt 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, N,~„ ~wATVF,R, No waiver by Lessor or Lessee of any default or breach of covenant or term of this Lease Agreement maybe treated as a waiver of any subsequent default or breach of the same or any other covenant or term of this Lease Agreement. H. N.~„ACTF~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. 1, Fn$ CF; M ~T TRF., 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 transportation or communications. However, lack of funds shall not be deemed to be a reason beyond a Party's reasonable con~ol. The Parties will promptly inform and consult with each other as to any of the above causes, which in their judgment mayor could be the cause of a delay in the performance of this Lease Agreement. gage ~.9 I I I IN ~LIT'TNESS WHEREOF, the parties have executed this Lease Agreement as of the Effective Date first above Written, CITY OF DENTON, TEAS, LESSOR BY: HOWARD MART]N, ER~M CITY MANAGER ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: EDW~T M. SNYDER, CITY AT ORNEY 1+ BY. LESSEE HANGARS PLUS, L,L.C. BY: TH MONT OME Y, PRESIDENT gage 2D < < ACKNOWLEDGMENTS THE STATE OF TE~A.S § COUNTY OF DENTON § This instrument was acknowledged before me on the day of b ~ , 2006, by Howard Martin, Interim City Manager of the City of Denton, T xas, on behalf of said municipality. t y1l11!!~ 4,,~a,~~; JANE ~ICwARDS4N - : Notary ~ubtlc s#ate of Texas N TARY PUBLIC, STATE OF TEAS Comm~o~(o~ x~ires r/~I~~Ilrf1111~~~~ ~1 ~ THE STATE OF TEAS § COUNTY OF DENTON § { This ~.strument was acknowledged before me on the , day of , 2006 b Y Anthony N~ontgom.ery, a Texas corporation on behalf of said corporation, z NOTARY PUBLIC, TATS OF TE~A.S C~~~ ~~ry ~~t~ x , ]~t~. ~ ~~S ~'~~a ~t,~ Comm. 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E f E ~ r~ SOB : X66314--D1 B~~ 116 . ,[T~, T~ "6249 SATE: .5 2B a~ . ~~48~~-6723: pFFI~E CRAFT: ~ ~i,~~ . ~~-4B2-3fi64 ~ ~ ~~1 r~M 1 ~ EXHlBiT B LEASE ESTaPPEL This Lease Estoppel this "A reement"dated February, 20~ 0, is entered into by the City of Denton, Texas, a municipal corporation thereinafter called "Lessor" and Hangars Plus, L.L.C. thereinafter called "Lessee}, and Justin State Bank, thereinafter called "Lender" vUITNESSETH: WHEREAS, Lessee desires to obtain financing through Lender to refinance construction of aircraft hangar and related aviation facilities located on the leased premises at the Airport; and WHEREAS, Lender requires the parties to execute this Agreement before it will provide financing to Lessee, the proceeds of which will be used to refinance the Improvements; NOW THEREFORE, in consideration of the promises and mutual covenants contained in this Agreement, the parties agree as follows: ARTICLE ~ -DEFINITIONS As used in this Agreement, the following terms shall have the following meanings: Loan: the loan from Lender to Lessee extended pursuant to the Authorization. Lease: The Airport Lease Agreement Commercial Operator dated June 6, X006, by and between the City of Denton, Texas, a municipal corporation, as lessor, and Hangars Plus LLC, a Texas Limited Liability Company, as lessee, Loan Documents, the documents that are now or hereafter executed in connection with or as security for the Justin State Bank loan, including without limitation, any promissory notes, loan agreements, servicing agent agreements, guarantees, deeds of trust, security agreements, certifications, and affidavits. Pr~ operty: The leasehold estates in all that certain parcel of land situated in the WILLIAM NEIL SURVEY, Abstract Number 91o, Denton County, Texas, and being a part of Lot Block 1, of Southeast Airport Addition, an addition in the City of Denton, Denton County, Texas, according to the Plat thereof recorded in Cabinet C, Page 295, Plat Records of Denton County, Texas, and being more particularly described in attached Exhibit "A.", incorporated herein for all purposes. ARTICLE 2 -AGREEMENTS ~ , Lessor's Consent to Grantin and Existence of Liens, Lessor consents to the granting and existence of liens against Lessee's leasehold estate in the Property to secure amounts due under the Loan Documents. Lease Modifications and Cancellations, The Lease will not be modified or cancelled without Justin State Bank's prior written consent, In the event the Lease is cancelled or terminated pursuant to Article II ar Xlll and any other provisions of the Lease, Justin State Bank shall have the right to either }acquire the Lease and assume all the Lessee's rights and obligations under the Lease, or ~2} present to the Lessor a replacement Lessee acceptable to Lessor in its reasonable approval, to assume ail the Lessee's obligations under the Lease. 3, Justin State Bank's Ri ht to Ac wire Leasehold Estate, If there is a default under the Loan Documents and the default continues without being cured, then Justin State Bank will have the right to acquire the leasehold estate through foreclosure ar assignment of lease in lieu of foreclosure, Justin State Bank's acquisition of the leasehold estate will not constitute a default or termination of the Lease. 4. Justin State Bank's Ri hts as Lessee, If Justin State Bank acquires the leasehold estate as stated in paragraph 3 above, then it will succeed to the rights of Lessee under the Lease, including without limitation, the right to exercise any options exercisable by the Lessee under the Lease, And in addition, and notwithstanding anything contained in the Lease to the contrary, Justin State Bank, as lessee under the Lease, will have the right } to assign the Lease, ar ~2} to sublease all or any part of the leased premises to a lessee that is acceptable to Lessor in its reasonable approval, Provided, however, in the event of a assignment of the Lease, Justin State Bank or the assignee shall pay all of Lessor's administrative cost of processing such assignment as described in paragraph 2, 5, Justin State Bank's Duties as Lessee; Lessor's Exclusive Remed far Breach, If Justin State Bank acquires the leasehold estate as stated in paragraph 3 above, then it will be obligated to pay rent and to perform Lessee's other obligations under the Lease, including any delinquent or back rental or other charges owed as a result of the default, 6. Notice of Material Defaults, Lessor agrees Justin State Bank written notice of all material defaults under the Lease, A material default is any default upon which Lessor intends to take action, 7. Justin State Bank's Ri ht to Cure Defaults, Justin State Bank shall have the right to cure any or all defaults under the Lease, S. ~ ortunit to Cure Monetar Defaults, In the event of a material mor~efary default under the Lease, Lessor agrees to give Justin State Bank a period of 9o days to cure the default before exercising any of its remedies under the Lease. The first day of the ninety day period is the day Justin State Bank actually receives the default notice, 9. ~ ortunit to Cure Non-Monetar Defaults, In the event of a material rrorrmonefary default under the Lease, Lessor shall take no action to exercise its remedies under the Lease if within forty-five X45}days following receipt by Justin State Bank of a default notice; }Justin State Bank has cured any non-monetary defaults that are susceptible of being cured by it; and ~Z}Justin State Bank has commenced all necessary action to obtain possession of the Property, Justin State Bank is diligently proceeding to obtain possession of the Property, and any rental and other amounts due under the Lease with all interest, penalties and other charges that may be due under the Lease, have been and continue to be paid to Lessor. ~ Notices. All notices, requests, demands, and other communications under this Agreement shall be in writing and shall be deemed to have been duly given on the date of service if served personally, or on the day it is deposited in the United States mail, by first class mail, registered or certified, postage prepaid, and properly addresses as follows. Lessor; City Manager City of Denton, Texas 2~ 5 E, McKinney St. Fax No. X940} 3498596 Lessee. Hangars Plus LLC Anthony Montgomery President 904 Frenchtown Road Argyle, TX 76226 Lender: Justin State Bank Howard Young, President' P, a. Box 9T Justin, TX 76247 11. Subordination of Landlord's Lien. Lessor subordinates all its liens and security interests in each lessee's personal property located on the Property to the liens and security interest of Justin State Bank in such personal property, 12. Condemnation Awards and Hazard Insurance Proceeds. Notwithstanding anything contained in the Lease to the contrary, the provisions of the Loan Documents shall govern and control the use and application of the proceeds of any condemnation award or casualty insurance policy payable with regard to condemnation or casualty. 3. Conflicts. In the event of a conflict between the terms of the Lease and this agreement, the terms of this agreement will control, provided all terms of the Lease which are not in conflict with this Agreement shall remain in full force and effect. 4. Binding Effect: This agreement shall be binding upon the undersigned and their successors, assigns, and legal representative. This agreement is intended to benefit and maybe enforced by the Lessor, Justin State Bank, and their successors, assigns, and legal representative. This Agreement is given to assure the Lender, Justin State Bank, their successors and assigns, as to the interpretation of certain Lease provisions affecting Justin State Bank's interest, It is not intended to confer nor shall it confer any right or benefit upon the Lessee or any third Party other than Justin State Bank. CITY OF DENT4N, TEXAS, a municipal corporation By; ~ GEORGE CAMPBELL, City Manager Attest: JENNIFER WALTERS, Gity Secretary B, Approved as to legal form: ANITA BURGESS City Attorney By; - STATE CAF TEXAS CGUNTY CF DENT4N This instrument was acknowledged before me on By GEORGE CAMPBELL, City Manager of CITY 4F DENTIN, TEXA , a municipal corporation, on behalf of said municipal corporation. t.- ,~~~,~pAY P~j®h~li ~4~tt~~~ri~ ~~r~~~~~~ w~~~~~~ b `"f Notary Public, State of Texas My Commission expires Notary Public, State of Texas '~-~;AfeFt~~~, Decer~b~r ~~1~ ~rrmti~~~~ Hangars Plus, LLC, A Texas Limited Liability company By: Anthony Montgomery Its President THE STATE DF TEXAS COUNTY DF DENTDN BEFORE ME, the undersigned notary public on this day personally appeared ANTHONY MONTGOMERY, known to me or proved to me through description of identity card or other document to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same as President and as the act of Hangars Plus, LLC, a Texas limited liability company, and for the purposes and consideration therein expressed. GIVEN UNDER MY HAND AND SEAL DF OFFICE this ~ da of 2010. Y ~u y c ~ Notary Public, State of Texas JUSTIN STATE BANK a Texas c rporation By: HOWARD YOUN ,Pre ident and C.E.O. THE STATE OF TEXAS Q~~,A~ p~~~ TINA IAA Mf~ONDS r COUNTY OF DENTON ~ ~ ~ Notary Public STATE OF T~~AS ~ o~ My comm. Exp. ~31051~0~2 BEFORE ME, the undersigned notary public, on this day personally appeared HOWARD YOUNG, proved to me through description of identity card ar other document to be the person whose name is subscribed to the foregoing instrument and acknowledged tv me that she executed the same as the act of JUSTIN STATE BANK, a Texas corporation, as its President and C, E. O. and for the purposes and consideration therein expressed. d ~ GIVEN UNDER MY HAND AND SEAL OF OFFICE this day of ~ ~ ~ 200. 5 Notary Public, State of Texas AFTER RECORDING, RETURN TO; JUSTIN STATE BANK P. O. Box 9~' Justin, TX T6241