2010-029
.\\codad\departments\legal\our documents\ordinances\10\lease estoppel Sykes-vauahn.doc
ORDINANCE NO. 2010-029
AN ORDINANCE OF THE CITY OF DENTON, TEXAS APPROVING THE ISSUANCE OF
AN ESTOPPEL CERTIFICATE TO SYKES-VAUGHN INVESTMENTS LLC AND
WESTERN PETROLEUM COMPANY; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, on March 1, 2009 the City of Denton, Texas (hereinafter the "City") entered
into that certain Airport Lease Agreement with Sykes-Vaughn Investments L. L.C. ("Sykes-
Vaughn") at the Denton Municipal Airport dated March 1, 2009 ("Lease"); .and
WHEREAS, Sykes-Vaughn has requested the City issue an Estoppel Certificate with it
and Western Petroleum Company ("Western") to facilitate the financing of improvements to be
constructed by Sykes-Vaughn under the Lease; and
WHEREAS, at its meeting of January 13, 2010 the Airport Advisory Board
recommended that the City Council approve the Estoppel Certificate; and
WHEREAS, the City Council deems it in the public interest to issue an Estoppel
Certificate to Sykes-Vaughn and Western, which will amend the Lease and will further facilitate
the financing of the improvements to be constructed by Sykes-Vaughn 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
Certificate to Sykes-Vaughn and Western 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 - day of , 2010.
MARK'* O~ S, MAYOR
ATTEST:
Page 1
\\cod ad\departments\l egal\ou r documents\ordinances\10\lease estoppel sylxs-vaughn.doc
JENNIFER WALTERS, CITY SECRETARY
BY:
APPR VED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
BY:
Page 2
Exhibit A
1kodad*part =mYegahour doeumen0or&nancesXWus aviation group ordinance 122208.doc
ORDINANCE N0. SOD /6
AN ORDINANCE APPROVING THE TERMINATION OF THAT CERTAIN LEASE OF
AIRPORT PROPERTY BETWEEN THE CITY OF DENTON, TEXAS, AND SYKES-
VAUGHAN INVESTMENTS (US AVIATION GROUP); AUTHORIZING THE CITY
MANAGER TO EXECUTE A FIXED BASED OPERATOR AIRPORT LEASE AGREEMENT
BETWEEN THE CITY OF DENTON, TEXAS, AND US AVIATION GROUP WHICH
INCLUDES AMONG OTHER PROVISIONS THE RIGHT TO SELL AVIATION FUEL TO
THE PUBLIC FOR A FIVE-PERCENT FUEL FLOW FEE, PROVIDE COMMERCIAL
HANGAR AND TIE-DOWN SERVICE AND 'THE EXPANSION OF THE US AVIATION
GROUP LEASEHOLD BY APPROXIMATELY 168,000 SQUARE FEET; AND PROVIDING
AN EFFECTIVE DATE.
WHEREAS, Lessor now owns, controls and operates the Denton Municipal Airport (the
"Airport') in the City of Denton, County of Denton, State of Texas; and
WHEREAS, Lessee is the current lessee pursuant to that certain assignment dated February
19, 2002 approved by Ordinance No. 2002-044 and of that certain Airport Lease Assignment dated
January 17, 2006 and approved by Ordinance 2006-021 and of that certain Airport Lease
Assignment dated July 1, 2008 and approved by Ordinance 2008-229
WHEREAS, Lessee and Lessor desire to enter into this Lease Agreement (sometimes called
this "Lease Agreement", "Agreement", or "Lease) in order to %Tercede the Existing-Lease subject
to the terms and conditions contained in this Agreement; and
WHEREAS, pursuant to this Agreement Lessee is also leasing those certain parcels or tracts
of land depicted as Parcels A, B, C, D, E and F on Attachment A attached hereto and made a part
hereof by reference;
WHEREAS, the City Council deems it in the public interest to supercede the existing US
-Aviation Group Lease and enter in to a Fixed Base Operator Airport Lease Agreement; NOW,
THEREFORE.,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The findings set forth in the preamble :of this Ordinance are incorporated
by reference into the body-of this Ordinance as if fully set forth herein.
SECTION 2. The US Aviation Group Lease, as described above, is hereby terminated
and the City Manager or his designee is hereby authorized to notify the Lessee, US Aviation
Group of the termination in accordance with the requirements of the Lease and to take all actions
necessary to effectively terminate this Lease.
SECTION 3. The City Manager or his designee is hereby authorized to execute a fixed
base operator commercial lease agreement with US Aviation Group in substantially the form of
the assignment attached to and made a part of this Ordinance for all purposes.
SECTION 4. This Ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the day of 2009.
ARK A. 0 G MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
i _
V
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
BY:
Page 2 of 2
pow 1cm 12.2348 C4doe
AIRPORT LEASE AGREEMENT
FMD BASED OPERATOR
This Lease Agre ment is made and executed to be effective as of the First day of
March, 2009 (the "Effective Date") at Denton, Texas, by and between the City of Denton,
Texas, a mumcW oorporation, hereinafter referred to as "Lessor", and Sykes-Vaughan
Investments, a Texas limited Liability company, hereinafter referred to as "Lessee".
WTINESSETH:
WHEREAS, Lessor now owns, controls and operates the Denton Municipal Airport
(tire "Airport") in the City of Denton, County of Denton, State of Texas; and
WIEREAS, Lessee is the current lessee pursuant to that certain &%sigadr& dated
February 19, 2002 approved by Ordinance No. 2002-044 and of that certain Airport Lease
Assignment dated January 17, 2006 and appmved by Ordinance 2006-021and of that certain
Airport Lease Assignment dated July 1, 2008 and approved by Ordinance 2008-229
WFfREAS, Lessee and Lessor desire to enter into this Lease Agreement (sometvmes
called this "Lease Agreement", "Agreement', or "Lease") in order to supercede the Existing
Lease subject to the teens and conditions contained in this Agreement; and
pursuant to this Agreement, Lessee is also leasing those certain parcels
or traces of land depicted as Parcels A, B, C, D, E and F on Auachmeat A attached hereto
and made a part hereof by reference;
NOW, THEREFORE, for and in consideration of the promises and the mutual
covenants contained in this Agreements the parties agree as follows:
L. CONDMONS OF LEASE AGREEMENT
NOTWITHSTANDING ANY LANGUAGE TO THE CONTRARY HERE NAFTER-
CONTAINED, THE LANGUAGE IN PARAGRAPHS A THROUGH D OF THIS
SECTION SHALL BE BINDING.
A. PRINCIPLES OF OPERATIONS. The right to conduct a,e:onautical and relaxed
activities for fumishing services to the public. is granted to Lessee subject to Lessee
agreeing:
1. To furnish said services on a fair, equal and not unjustly dis basis
to all users thereof; and
2. To charge fair, reasonable and not unjustly di prices for each unit
or service; provided, that Lessee may be allowed to make reasonable' and
nondiscriminatory discoumts, rebates, or other similar types of price reductions
to volume purchasers.
"vas,
B. NON DIS~ATION: Lessee, for itself, its personal Mr.
successors, and assigns, as a part of the consideration hereof; does hereby
covenant and agree as a covenant running with the land lb at:
1. No person on the grounds of race, religion, color, sex, or national origin shall
be excluded from participation in, denied the benefits of, or be otherwise
subjected to discrimination in the use of said facilities;
2. In the construction of any improvements on, over, or under such land and the
furnishing of services thereon, no person on the grounds of race, religion,
color, sex, or national origin shall be excluded from participation in, denied
the benefits o~ or otherwise be subjected to discrimination;
3. Lessee shall use the premises in compliance with all other requirements
imposed by or pursuant to Tide 49, Code of Federal Regulations, Department
of Transportation, Subtitle A, Office of the Secretary, Part 21, Nondiscrimi-
nation in Federally assisted programs of the Department of Transportation -
Effectual of Title VI of the Civil Rights Act of 1964, as said Regulations may
be amended.
C. RIGHT OF INDWIDUALS TO MAINTAIN AMCRAI'T. It is clearly
understood by Lessee that no right or privilege has been granted which would operate to _
prevent any person, fan or corporation operating airmafi on the Airport from performing
any services on its own aircraft with its own regular employees ('including, but not limited
to, maintenance and repair) that it may choose to perform.
D. NON ExCLUSIVE RIGHT. It is understood and agreed that nothing herein
contained shall be construed to grant or authorize the granting of an exclusive right within
the meaning of Title 49 U.S.C. Appendix $1349.
E. PUBLIC AREAS.
1. Lessor reserves the right to further develop or improve the lanJhng area of the
Airport as it sees fit, regardless of the desires or views of Lessee, and without .
intetfereaoe or hindrance.
2. Lessor shall be obligated to xnaintain and keep in good repair the landing area
of the Airport and all publicly owned facilities of dc 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
iosittment insofar as they are inconsistent with the provisions of the lease to
the Government, shall be suspended.
US AYIAMN GROUP FRO AGREE AWT - Page 2
4. Lessor reserves the right to take any action it considers necessary to protect the
serial approaches of the Airport against obstruction, together with the right to
prevent Lessee from erecting, or permitting to be erected, any building or other
structure on or adjacent to the Airport which, in the opinion of Lessor, would
limit the usefulness or safety of the Airport or constitute a hazard to aircraft or
! to aircraft navigation. The hangar/office/shop complex as cunwdy Proposed
as provided in Section II.C. does not violate this provision.
5. 'i'bis Lease Agreement shall be subordinate to the provisions of any CdsdM or
future agreement between Lessor and the United States or agency thereof
relative to the operation or nRintemance of the Airport
II. JJEASED PREMISES
Lessor, for and in consideration of the covenants and agreements herein contained, to
be kept by Lessee, and subject to the conditions contained herein, does hereby demise and
lease unto Lessee, and Lessee does hereby lease from Lessor,.for, the lease term described in
Article a the following described -land situated in the City of Denton, Denton County,
Texas: `
A. Land. The same .78 acre (34,000 square feet) tract or parcel of land leased to
Lessee under the Existing Lease identified as Parcel A, together with improvements
thereon, which property is more particularly described in Attachment "B", attached hereto
and kcorporaWd herein by reference (the "Existing Parcel"), and an additional approximate
168,208 square feet of land identified as Parcel B (13,448 square feet), Parcel C. (7,760
square feet), Parcel D (90,000 square feet), Parch E (50,000 square feet) and Parcel F
(2,000 square feet) on Attachment "C" (the "Ixased Premix a").
Together with the right of ingress and egress to the Leased Premises; and the right m
common with others so authorized of passage upon the Airport property generally, sabject
to reasonable regulations by the City of Denton and such rights shall extend to Lessee's
employees, passengers, patrons and invitees. For purposes of this Agreement, the'term
"Leased Premises" shall include leasehold improvements constructed by the Lessee, but not
including certain easements or property owned and/or controlled by the Lessor.
A legal description of Parcels B, C, D, E, and F is not miurently attached to this lease
Agreement. Lessee shall deliver to Lessor no later then 30 days after the Effective Date of
this Agreement a legal description of Parcels B through F accurately describing sw ne that is
acceptable to Lessor. If Lessee fails to do so, Lessor at its option may terminate this
Agreement as to Parcels A through F, in which case it will have no fiuther force and effect
The approved legal description will be attached to this Agreement as Attarchment "C".
U5 AVIATION GROUP nb AGiZEFdv M - Page 3
B.Il_UiPRO VEMEM PROVIDED BY LESSOR The only improvements provided by
Lessor, except as set forth in Article ME. "Access to Utilities" below, shall be as follows:
Lessor shall improve the current drainage structure along the east side of the expanded
aircraft apron proposed for Parcel Lessor shall relocate existing open drainage feature
(ditch) from the souk corner of the existing ramp (existing wash rack) to the existing
drainage ditch flowing west from John Carrell. The relocated flow line shall be
approximately twenty feet (20) east of the east edge of the proposed apron. Lessor shall
install approximately 160 linear feet of reinforced concrete pipe (RCP) connecting the
relocated drainage flow line to the existing 48 inch RCP that is routed generally to the west.
Lessor, at its discretion, may elect to direct drainage directly south utilizing an open ditch to
carry the water south past Taxiway L at the Taxiway Bravo intersection.
The tern 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. WROMARM PROVIDED BY LESSEE.
1. Constnection of U~g~ades, The following improvements are currently located on
the Existing Parcel: One 12,000 square foot bangar and office building with related aircraft
apron and auto pad ng located on Parcel A and described in Attachment "E" attached
hereto and made a part hereof by references (the "Existing Improvements'). The Lessee
shall make the following improvements and renovations to the Existing Improvements at an
estimated cost of $1,000,000.00: Expansion of approximately 5,000 square feet of office
and pilot lounge on west *ade of the existing hangar meeting all requisite developmental,
environmental and fire codes (the "Upgrades"). -Construction *of the Upgrades shall be
commenced no later than 270 days after the Effective Date of this Agreement and be
completed no later that 720 days after the Effective Date ("Construction Period for the
Upgrades"). Construction of the Upgrades are considered commenced upon issuance of a
building permit and commencement of construction of any portion of the Upgrades.
Construction of the Upgrades are considered complete when all of the Upgrades are actually
completed in full with a Certificate of Occupancy.
2. Construction of Parcel C Improvements. On Parcel C, Lessee shall construct
additional auto parking, solid waste revetments and associated infiwtructure (drainage,
sidewalks, etc) meeting City of Denton Development standards, to provide access to the
public aircraft apron located west of Parcel C. Construction of the Upgrades shall be
commenced no later than 270 days after the Effective Date of this Agreement and be
completed no later than 720 days 'after the Effective Date ("Construction Period for the
Upgrades').
3. Construction of Parcel D Improvements. _ Lessee shall be responsible for
Us AVIATION GROUP FBO AGREFdv EW - Page 4
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maintaining the public aircraft apron to meet the existing weight bemring capacity of aircraft
up to 60,000 pounds.
4. nstivction of Parcel F Improvements. On Parcel F, Lessee sball construct a fuel
farm consisting of two, 12,000 gallon above ground fuel tanks with 8ppropri.ate Fumes,
OVeIQoW/Contaft=ent !`omnnnentq- dive AnnrrwrhPe ^ft",V..,
maintaining the public aircraft apron to meet the existing weight bearing capacity of aircraft
up to 60,000 pounds.
4. ConsWaction of Parcel F Improvements. On Parcel F, Lessee shall construct a fuel
farm consisting of two, 12,000 gallon above ground fuel tanks with appropriate pumps,
' ovedlow/containment components, drive approaches, fencing and canopy. (Facility will
meet appropriate NFPA standards for above ground fuel systems as required by the City of
Denton Fire Department). Construction of Parcel F Improvements shall be commenced no
later than 270 days after the Effective Date of this Agreement and completed no later than
720 days after the Effective Date (the "Construction Period"). Construction of Parcel F
Improvements are considered commenced upon issuance of a building permit. Construction
of Parcel F lmprov ments are considered complete upon the issuance of a certificate of
occupancy or requisite permits that may necessary firom the Denton Fine Marshal's office.
5. Construction of Parcel E lm vements. On Parcel E, Lessee shall construct an
aircraft apron measvritag approximately 215 feet (=Ywest) by 250 feet (north/south)
com ctmg to the south edge of the existing public apron identified in Parcel D, extending
south as identified in Exhibit 3.The apron shall meet City of Denton development standards
for aircraft weighing 60,000 pounds. Lessee shall initiate construction wrbn 24 months of
the lease and complete within 36 months of effective date of this agreement.
Notwithstanding anything contained in this ioesse Agreement to the contrary, it
&Dun to complete the Improvements identified in Parcels B, C, E and F within the
Const ruclioa Period ahaH constitute a material breach and may, at the role option and
disc~ n of the Lessor, result In the tiermbnation and canneeDation of this I.ease
Agreement as to Payee! D, E and F upon 30 days writ be~a notice of canceDation to
L asm In such ease Lessee's rights under this Lease Agreew as to Farrel A, B and
C win anme~atelg cease and rcv+at to the previns lease- agreements es#abDshed by
Ordinances; 2002.044, 200"1 and 2008-230. Previous Lase Agreement
(ordi -2002-044, 2806421 and 2 &23M shall be-amended-to include Pared B
and C. Improvements of Pareeb D, E and F shall h=edbitely become the property of
Lessor at no cost, expense or other compensation paid by Lessor to Lessee; and Lessee
AAR immediately vacate the Parcels D, E and F.
Noriostanding anythiung contained in this Lease Ag mement to the contrary, a
falure to complete the Upgrades wlthm the Constracdon Period for Upgrades may, at
the sole option and discretion of the Lessor, result in the primary term-of the prior
Isms agmeements establshed in Ordinances; 2002.044, 2006-021 and 2008-230 will be
reduced from 30 years to 15 years.
D. EASEhIQM. Lessor and Lessee by mutual'agn=eent may establish, on the
Leased Premises, easements for public access on roads and taxiways. Lessee acknowledges
taxiway righi of ways exist through the existing aircraft apron identified in Parcel D.
E. ACCESS To UMIM. Lessor represents that there are water, sewer and 3-
phase electricity lines within 300 feet to the Leased Premises available, with the exclusion
US AWATM GROUP MO AGREEHWr - Page 5
of Parcel E to "tap-in" by Lessee, and that the same are sufficient for usual and customary
service on the Leased Premises.
. IIL TERM .
The term of this Lease Agreement shall be for a period of thirty (30) years, com-
mencing on the l' day of March, 2009 and continuing through the 'w day of February of
2039, unless earlier terminated or reduced under the provisions of the Lease Agreement (the
`T,ease Terns"). Lessee has the option to renew for one (1) additional ten (10) year team.
In order to exercise the option Lessee must provide written notice to Lessor of its intent to
exercise the 10 year option no later than 180 day before the exphv6on of. the 30 year
primary term. The rental and terms to be negotiated for the option term shall be reasonable
and consistent with the then value, rentals and tams of similar property on the Airport.
N. PAYMEM. RENTALS AND FEES
Lessee covenants and agrees to pay Lessor, as considm ion for this Lease Agreement,
the following payments, rentals and fees:
A. LAND RENTAL. Land retrtal shall be due and payable to Lessor m twelve (12)-
equal monthly installments in the sums set forth below, on or before the 1 st day of
each and every month during the term of this Lease Agreement. Lessee has the
option to pay annual rentals and fees in whole on or before the 1st day of October,
at the beginning of the City's fiscal year, each and every year of this Lease
Agreement
1. Parcel &-B, C and F. Annual rent shall be a sum equal to $0.17 per
square foot of the land area contained in the Leased Premises (the "Original
Rent" - Monthly mental shall be 1/1211 of the annual rent However,
bePinning March 1, 2011 the Original Rent will be adjusted in accordance
with Section N.C.
2. Parcel A and B. The adjusted Original Rent will be increased by $0.05
on March 1, 2032 and thereafter be adjusted in accordance with Section
N.C.
3. Parcel D and E. - Annual rent shall be a sum equal to $0.13 per square
foot of the land area contained in the Leased Premises (the "Original
Renf). Monthly rental shall be 1/126 of the annual rent However,
beginning March 1, 2011 the Original Rent will be adjusted in accordance
with Section IV.C. Rent on Parcel E shall not be initiated until six-months
after the effective date of this agreement.
Notwithstanding the foregoing, the annual lease rental will be reduced by the current dense
US AVIATION GROUP FBO AGREEMf.M - Page,6
rate per square foot, as adjusted by the CPI U referenced in Section W.C., times the number
of square feet comp 'using all easements established in accordance with Section RD.
B. LESSOR PaROVEMENI' RENTALS. There is cuffmdy a public use, public
managed aircraft apron located on Parcel D.
C. PAYMENT. PENALTY. ADJUSTM12M. All payments due Lessor from Lessee
under this Lease Agreement shall be made to Lessor at the offices of the Finance
Department of the City of Denton, Customer Service Division, 601 West Hickory, Denton,
Texas, unless otherwise designated in writing by the Lessor. If payments are not received
on or before the 15thday of the month, a five percent (5%) penalty will be'due as of the
16th. If payments are not received by the first of the subsequent month, an additional
penalty of one percent (11%) of the ' unpaid rental/fee amount will. be due. A one percent
(l%) charge will be added on the fast of each subsequent month until the unpaid r r&lMee
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 consu .men (CPI-LI) for the Dallas-
Fort Worth Bureau of Labor Statistics bears to the previous odd month 2008 index
(November), which was 200.051 (1982-84 = 100). Each rental adjustment, if any, shall
occur on the 1st day of February, beginning 2011, and every other year thereafter on such
date.
The adjustments in the yearly rent shall be determined by multiplying the Original
Rent by a fiaction, 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 thaw the Original Rent there shall be no adjustment in the annual rent at that time,
and Lessee shall- pay the previous year's annual rent until the time of the next rental
adjustment as called for in this section. In no event shall any rental adjustment called for
in this section result in an annual rent less than the previous year's annual rent. The
.adjustment shall be limited so that the annual rental payment determined for any given
two-year period shall not exceed the annual rental payment calculated for the previous
CPI adjustment by more than twenty percent (20%) percent.
If the consumer price index for all urban consumers (CPI for the Dallas Fort
Worth geographical region, as compiled by the U.S. Department of Labor, Bureau of Labor
Statistics, is discontinued during the Lease Tema, the remaining rental adjustments called
for in this section shall be made using the formula set forth above, but by substituting the
index numbers for the Consumer Price Index-Seasonally Adjusted U.S. City Average For
All Items For All Urban Consumers (CPI-U) for the index numbers for the CPI-U
applicable to the Dallas-sr-Fort Worth geographical region. If both the CPU for the Dallas-
Fort Worth geographical region and the U.S. City Average are discontinued during the
Lease Term, the remaimpgrental 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
US AVIATION GROUP FBO AGREWEN'f - Page 7
are most nearly comparable to the CPI-U applicable to the Dallas-Fort Worth geographical
region. If the Bureau of Labor Statistics of the United States Department of Labor ceases to
exist or ceases to publish statistics concerning the purchasing power of the consumer dollar
during the Lease Term, the remaining rental adjustments called for in this section shall be
made using the most nearly comparable statistics published by a recognized financial
authority selected by Lessor.
t
D. OTHER PAYMENTS TO LOSOR.
1. Hg= and Tie-Down Fees. - Lessee shall pay Lessor a percentage of all hangar
and tie-down rentals and fees collected by Lessee from- persons ranting facilities on the
Leased Premises. Such fees shall be equal to:
a 10% of all hangar and tie-down foes through November 30, 2009.
b. 11% of all hangar and tie-down fees through November 30, 2019.
c. 12% ofall hangar and tie-down fees through the end of the Lease Term.
All such fees shall be paid monthly to Lessor on or before the 15th day of each month
during the Lease Term. The fees shall be accompanied by records showing the date and
location on the Airport where the aircraft was hangared or parked and the tail number, or
side number, of the aircraft.
2. Fuel Fees.
Lessee shall pay Lessor a fuel flow fee equal to 5% of the wholesale price per-
gallon of all grades of aviation fuel (100 LL or Jet Fuel) used by Lessee through
November 30, 2019_ An adjustment will be made based on a market analysis as of
December 1, 2019.
Between March % 2009 and Febnsary 28, 2019 should the discounted fuel
credit account for more than $350,000 ($350,000 or verified construction cost and finance
fees of the fuel farm) in fuel fees, the fuel flowage fee will automatically be adjusted to
the fuel flow fee established with the existing FBO rate on the airfield.
E. RECORDS. Lessee shall keep and maintain accurate records of wholesale
fuel delivered under this Agreement, and parking and hangar fees collected, for a period
of three (3) years from the date the record is made. Such records shall be kept according
to generally accepted accounting principles. Lessor or its duly authorized representatives
shall have the right at all reasonable times during business hours to inspect the books,
records and receipts of Lessee, for the purpose of verification.
F. ANNUAL STATENEENNT. Within sixty (60) days after the end of each
calendar year, Lessee shall furnish to Lessor a certified statement of fuel deliveries, and
US AVI MON ORM EBO AGREEKWr - Page 8
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parldng and hangar fees collected during the preceding calendar year. Lessor reserves the
right to audit said statement and Lessee's books and records, including exarnination of the
general ledger and all other supporting material, at any reasonable time dulling business
hours, for the purpose of verification.
If the audit establishes the Lessee has understated or overstated fuel sales, paAcing
fees, or hangar rentals collected by five percent (S%) or more, the entire expense of said
audit shall be borne by Lessee. Any additional payment due from Lessee shall forthwith !
be paid to Lessor, with interest thereon at one percent (1%) per month from the date such
amount originally became payable to Lessor. Any overpayment by Lessee shall be
credited against further payments due to Lessor. Either party may refer the results of the
audit for resolution in accordance with Section W.G. {Disputes) below.
G. DISPUTES. If any dispute arises as to the amount owed from fuel
deliveries or hangar or parldng fees-collected, the party disputing the amount and/or fee
shall notify the other, m writing, within thirty (30) days from the date the dispute arises.
Upon notification of the dispute, the disputed amount shall be submitted to a panel of
three (3) certified public accountants, one to be selected by Lessor, one to be selected by
Lessee and the third to be chosen by the first two accountants selected. This panel shall,
by majority vote, determine the rights of the parties hereunder in conformity with
generally accepted accounting principles. The fees due the accountams for such service
shall be paid by the unsuccessful party, or in the event the determination is partially in
favor of each party, the fee shall be borne equally by the parties.
V.. RIGHTS AND OBLIGATIONS OF LESSEE
ARSE OF LEASED RUMSES. Lessee is granted the non-exclusive privilege to
engage in or provide the following on the Leased Premises:
1. The right and privilege to engage in commercial aviation activities, hereby
defined as those. activities which involve the sale of aviation services for profit
to the general public and shall include the maintenance and servicing of aircraft,
which right shall include overhauling, rebuilding, repairing, inspection, and
licensing of same and the purchase and sale of parts, equipment, and $ccessaries
therefore. .
2. The sale of aircraft fuels, lubricants, and propellants within the leased area and
at such other areas that may be designated by the Airport Manager.
3. The storing of aircraft in hangars or on tie down areas owned or operated by
Lessees.
4. The sale of said fuels, lubricants, and propellants shall include the right to- use
vehicles necessary for the servicing of aircraft.
US AVIATION GROUP FW AGRFEMEN17 - Page 9
5. The operation of a business of buying and selling, or renting new and. used
aircraft, airasft parts, and accessories therefore, and aviation equipment of all
descriptions either at retail, wholesale, or as a dealer.
6. The operation and sale of aerial survey, photograph, mapping, and spraying
services. (However, spraying services shall at all times comply with
applicable local, state, and national regulations pertaining to aerial spraying.)
7. The operation and sale of air taxi and sightseeing services.
8. The operation of schools for the instruction of the * general public in flying,
navigation, mechanics, aerial survey,. photography, aircraft design and/or
graining of the general public in any art, science, craft, or skill pertaining
directly or indirectly to aircraft.
9. The operation of non-scheduled and charter air transportation of hers.
10. The sale through coin operated vending machines of tobacco, confections, and
refreshments and the mainteaauce on the leased premises of appropriate
facilities therefore.
11. The undertaking of any phase of aviation activity for profit related to or in any
way contributing to air transportation or aerial navigation, as long as such
activity in no way interferes or hinders any F.A.A. approved navigational aids
that may exist now or in the future at the Airport.
12. Ten years after the Effective Date of this Lease Agreement, Lessee will begin
to pay a commission fee to Lessor for car rentals based on the then existing
market commission at similar sized airports.
13. The general use, in common with others authorized to do so, of all public
airport facilities and improvements which are now or may hereafter be
connected with or appurtenant to said Airport, except as hereinafter provided. _
14. Ramp services, including loading and unloading of passengers, baggage, mail
and freight, and providing of ramp equipment, aircraft cleaning and other
services for persons, firms or air carriers.
No person, business or corporation other than Lessee may operate a commercial,
retail or industrial business upon the Leased Premises or upon the Airport,. without prior
written consent from Lessor authorizing such commercial, retail or industrial activity.
Lessee shall be allowed to provide sleeping quarters and other accommodations
for use of an around-the-clock security guard. This provision shall not be construed to
allow residential living quarters on the leased premises, and it is expressly understood and
agreed that no permanent dwelling or domicile may be built, moved to or established on
US AVIATION GROUP FBO AGREEM -4r - Page 10
or within the leased premises nor may the Lessee, its tenants, invitees, or guests be
permitted to reside or remain as a resident on or within the leased premises or. other
airport premises.
Lessee shall file with the Airport Manager and keep current its mailing address,
telephone number(s) and contacts where he can be reached in an emergency.
Lessee shall file with the Airport Manager and keep current a list of its tenants
and sublessees.
Lessee shall require its employees and sub-lessees (and sub-lessee's invitees) to
abide by the terms of this Agreement. Lessee agrees it shall promptly correct or remedy
any breaches of any rules, regulations, terms, conditions or covenants.by its employees or
sub-lessees.
Lessee, its tenants, employees, invitees and guests shall not be sutharized to conduct
any services not specifically listed in this Lease Agreement The use of the used Premises
by Lessee, its tenants, employees, invitees or guests shall be limited to only those private,
commercial, retain or industrial activities having to do with or related to airports and avia-
tion. Except as specifically authorized in this Lease Agreement, no person, business or
corporation may operate a commercial, retail or industrial business upon the Leased
Premise or upon the Airport without a lease or license from Lessor authorizing such
commercial, retail or industrial activity. The Lessor shall not umreasonably withhold
authorization to conduct aeronautical or related services.
B. REOMM SERVICES. Lessee is required and is hereby granted the non-
exclusive privilege to engage in the business of and provide the services of a fuII and
complete fixed base operator. It is expressly understood and agreed that the non-exclusive
right to conduct aervnautical activities for furnishing services to the public, including the
delivery of fiiel into aircraft is granted to the Lessee subject to the provisions set forth herein
and all applicable ordinances of the City of Raton. Lessee agrees to perform the following
services:
1. Fuel: To have available those grades and octanes of aviation gasoline, jet fuel
and other petroleum products normally, found at similar airports, and to
provide ramp services including the sale and into-plane delivery of those
aviation fuels, lubricants and other related aviation products, and to provide
aircraft guidance and assistance within the areas of the leased premises, at least
during daylight hours, sunrise to sunset, three hundred sixty-five (365) days
per year. All fuels shall meet minimum F.A.A. requirements for aviation fuels
as set out in F.A.A. Circular 5230-4, Aircraft fuel storage handling and
dispensing, as the same may be revised, updated, or replaced by the F.A.A. or
the United States Govemment. All fuels which are a rationally known brand
shall meet the terms of this requirementt All fuels shall be made available
either by tank truck, stationary pump or other suitable equipment approved by
the Fire Marshall of the City of Denton acrd the Airport Manager and in
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accordance with the provisions of the Fire Code of the City of Denton. All
fining operations and all fuel fawilities owned or operated by the Lessee shall
be in compliance with the Minimum Fueling Standards Ordinance of the City
of Denton. All prices for fuels and other petroleum pests shall be pasted in
full public view at all times. Lessee agrees that it shall locate any new fuel
storage tanks-above ground and in compliance with all local, State and Federal
codes and regulations. Lessee shall maintain all components associated with
the Fuel Farm and its equipment shall be kept in good repair including the
replacement of normal wear and tear items and making TCEQ upgrades.
Lessee's privilege to use the-Fuel Farm to meet its fuel obligations under-this
Agreement may be rescinded by Lessor should fuel levels at the Fuel Fa= fall
below 2,000 gallons for more than 45 days.
2. Ramp Services: To provide ramp servicing of; and assistance to, aircraft,
including parldng, storage and ti"own service, to both based and itinerant
aircraft upon or within facilities leased to Lessee or other areas designated by
the Lessor, at least during the Required Hours of Operatiod.
3. Pilot Lounge: To provide a pilot lounge area, informational services, and
telephone service connections to the Flight Service Station at least during-the
Required Hours of Operation.
4. Hours of Operation: FBO will be open a minimum b am. to 8 p.m. Monday
through Friday; 7:00 a.m. to 7:00 p.m. Satu: day %and Sunday, 365 days of the
year. However, FBO may close on the following holidays: Thanksgiving,
Christmas, New Year's Day, and 4`b of July. Such hours of operations are
herein called the "Rap ired'Hours of Operation". Lessor reserves the right to
adjust R,mpi ed Hours of Operation to coincide with air traffic control tower
hours.
5. Additional Services: Lessee shall provide a minimum of three of the
following additional services:
a. Airframe and power ' plant repair (this service is the equivalent of
providing two services)
b. Flight instructionlaircra$ rental
e. Aircraft sales
d. Air taxi and/or part 135 charter
e. Avionics and instrument shop/maintcnance
f. Propeller repair -
g. Pilot shop
h. Aircraft wash rack
i. Aircmft paint services
j. Aircraft upholstery,
L Other commercial aeronautical services as approved by Airport
Management
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meet or exceed the following standards:
C. S"fArmARDS. Lessee shall
1. Address. Lessee shall file with the Airport Manager and keep current its
mailing addresses, telephone numbers and contacts where it can be reached in
an emesgency.
2. List Lessee shall file with the Airport Manager and keep current a list of its
tenants and sublessees.
3. Conduct. Lessee shall contractually require its employees and sublessees (and
svblessee's invitees) to abide by the terms of this Lease Agreement Lessee
shall promptly enforce its contractual rights in the event of a default of such
covenants.
4. Utilities, Tax and Fees. 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 assessnents lawfully levied or assessed.
5. Laws. Lessee shall comply with all current and future federal, state and local
laws, rules and regulations which may apply to the conduct of business
contemplated, including rules, reg lotions and ordinances promulgated by
Lessor, and Lessee shall keep in effect and post in a prominent place all
necessary andlor required licenses or permits.
6. Maintenance of Pro Lessee shall be responsible for the maiftnance,
repair and upkeep of all property, buildings, structcues* and improvements,
including the mowing or elimination of grass and other vegetation on the
Leased Pn muses, and shall keep the Leased Premises neat, clean and in
respectable condition, free from any objeetionel matter or thing, including
trash or debris. Lessee agrees not to uhlize or permit others to utilize areas on
the Leased. Premises which are located on the outside of any hangar or
building for the storage of wrecked or petmaaently disabled aircraft, aircraft .
parts, automobiles, vehicles of any type, or any other equipment or. items
which would distract from the appearance of the leased. premises. Lessee
agrees that at no time shall the Leased Premises be used for a flea market type
sales operation.
7.. Painting of Buildings. During the Lease Term of this Leese Agreement and
during each extension, Lessor shall have the right to require, not more than
once every five years, that the metal exterior of hangar(s), building(s) or
strixtur+es located on the Leased Preiises be repainted. The Lessor may
require Lessee to repaint said exteriors according to Lessor's specifications (to
specify color of paint, quality of workmanship and the year and month in
which the hangar(s) or building(s) are to be painted, if needed.) Lessee shall
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complete the painting in accordance with such specifications within one (1)
year of receipt of notice from Lessor. Lessee agrees *to pay all costs and
expense involved m the hangar or building painting process. Failure of Lessee
to complete the painting re *ed by Lessor, within the one (1) year period
shall constitute Lessee's default tinder this Lease Agreement.
8. Unauthwind use of Leased Premises. Lessee may not use any of the Leased
Premises for any use not authorized herein unless Lessor gives Lessee prior
written. approval of such additional use. Without limiting the foregoing the
Leased premises shall not be used for the operation of a motel, - hotel,
restu ant, private club or ba; apartment house, storage of recreational
vehicles, automobiles, or marine vehicles, or forindustrial, commercial, retail,
or other purposes, except as authorized herein.
9. Dwellings. It is expressly understood and agreed that no dwelling or domicile
may be built, moved to or established on or within the Leased Premises nor
may lessee, its tenants, employees, invitees, or guests be permitted to reside or
remain as a resident on or within the Leased Premises or other Airport
premises. . Lessee may have a pilot lounge, including restroom and shower
facilities for use by flight crew and passengers.
10. %ft Possession. Lessee shall quit possession of the Leased Premises at the
end of the Tease Tenn or any renewal' or extension thereof or upon
cancellation or temlination 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 exoepted.
11. In 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 and/or actions for damages, injuries to persons
Oicludiag death), property damage, (including loss of use), and expenses,
including court costs, attorneys' fees and other reasonable. costs, occasioned
by or incidental to the Lessee's occupancy or use of the Leased Premises or
the Airport and/or activities conducted in connection with or incidental to this
Lease Agreement, including all such causes of action based on common,
constitutional or stawory law, or based in whole or Mi part upon the negligent
or intentional acts or omissions of Lessee, its offs, agents employees,
invitees or other persons. Lessee must at all times exercise reasonable
precautions on behalf of, and be solely responsible for, the safety of its
officers, employees, agents, customers, visitors, invitees, licensees and other
persons, as well as their property, while in, on, or involved in any way with
the use of the Leased Premises. The Lessor is not liable or responsible for
the negligence or intentional acts or omissions of the Lessee, its officers,
agents, employees, agents, customers, visitors and other persons. The Lessor
shall assume no responsibility or liability for harm, injury, or any damaging
events which are direcdy or indirectly attributable to premise defects, whether
US AVIATION QAOUP FBO AGREEMM - Page 14
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real or alleged, which may now exist or which may hereafter arise upon the
Leased Premises, responsibility for all such defects being expressly assumed
by the Lessee. The Lessee agrees that this indemnity provision applies to all
claims, suits, demands, and actions arising from all premise defects or
conditions.
THE LESSOR AND THE LESSEE EXPRESSLY MEND THIS
1NDEMNITY PROVISION TO REQUIRE LESSEE TO INDEMNIFY
AND PROTECT THE LESSOR FROM THE CONSEQUENCES OF THE
LESSOR'S OWN NEGLIGENCE. INCLUDING LESSOR'S -SOLE
NEGLIGENCE. WHIM LESSOR IS PARTICIPATING IN THIS LEASE
AGREMENT WME THAT NEGLIGENCE Is A -CAUSE OF THE
INJURY. DEATH. OR DAMAGE. NOTWITHSTANDING THE TERMS
OF THE PRECEDING SENTENCES.
12. Chemicals. 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 LLesssee shall be
solely responsible for all discharges, whether accidental or intentional, of any
chemical and for the costs associated with the cleanup, r=adiation and
disposal of said chemicals.
13. Hazrdous Activities. 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 is activities which could produce bazrds- or
obstruction to air navigation, obstructions to visibility or interference with any
aircraft navigational aid station or device, whether airborne or on the gmncL
then Lessor shall state such violation in writing and deliver written notice to
Lessee or Lessee's agent on the Leased Premises, or to the person(s) on the
Leased Premises who are causing said violation(s), and upon delivery of such
written notice, Lessor shall bave -the right to demand that the person(s)
responsible for the violation(s) cease and desist from all such activity creating
the violation(s). In such event, Lessor shall have the right to demand that
conw ive action, as required, be commenced immediately to restore the Leased
Premises into conformance with the particular law, rule or aeronautical
regulation being violated. Should Lessee, Lessee's agent, or the person(s)
responsible for the violation(s) fail to cease and desist from said violation(s)
and to immediately commence ow=ting the violation(s), and to complete said
corrections within twenty-four (24) hours following written notification, then
Lessor shall have the right to enter onto the Leased Premises and correct the
violation(s) at the sole cost and expense of Lessees and Lessor shall not be
responsiible for any damages incurred to any improvements on the Leased
Premises as a result of the corrective action process. In addition, such violation
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shall be considered a material default by Lessee authoriz~mg Lessor, at its sole
option and discretion, to immediately terminate and cancel this Lease
Agreement
14. Mier. Lessee shall select, appoint, and designate to Lessor in writing,.a
full-time Manager of business at the Leased Premises. The manager shall- be
vested with full power and authority to act in the name of Lessee with respell
to the method, manner and conduct of the operation of the fixed base services
to be provided under this agreement. The manager shall be, available during
regular business hours and during the manager's absence, a duly authorized
subordinate shall be in charge and available during Required Hours of
Operation, and on an on-call basis during other hours of the day.
15. Employees. Lessee shall provide, at its sole expense, the employees
necessary to provide effectively and efficiently the services required or
authorized in this Agent. Lessee shall control the conduct, demeanor
and appearamce of its employees, who shall possess such technical
qualifications and hold such certificates of qualification as may be required in
carrying out assigned duties. Lessee shall be responsible to supervise its
employees to assure a high standard of service to customers of the Lessee.
16. Charges by Lessee: The Lessee agrees to famish all services on a fail equal,
and not unjustly discriminatory basis to all users thereof, and to charge fair,
reasonable, and not unjustly ry prices for each unit or service,
provided, however, that the Lessee may be allowed to make reasonable and
no ' cfiminatory discounts, rebates, or other similar types of price
reductions to volume purchasers.
17. PropertA
RMgmace: Lessee shall at its sole cost and expense keep and
maintain the Leased Premises and all improvements, additions or alterations
thereto, equipment and landscaping constructed or installed upon the Leased
Premises, in first-class condition, which condition shall at all tunes be based on
a standard of care reflecting prudent property management.
D. SIGNS. No signs, posters, or other similar devices ("Signage') shall be placed on
the exterior of the Lease Improvements or on any portion of the Leased Premises or Airport
property without the prior written approval of Lessor. Lessee, at its sole expense, shall be
responsible for the creation, installation and nrainte>rance of all such Some. Lessee shall
pay to Lessor any and all damages, injuuies, or repairs resulting from the installation,
maintertance, 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'
s. page shall be removed from the Leased Premises by Lessee ' y upon receipt of
instructions for removal of same from Lessor, including without iimitanom upon expiration
or termination of this Lease Agreement. If Lessee Us to remove the Signage then Lessor
may do so at the sole cost and expense of Lessee. Lessee shall be permitted .the right to
place two wall signs, no greater dm thirty-two square feet each, identifying the commercial
Us AVIATION GROUP M AGREES - Page 16
hangar operation. All signage shall comply with all applicable odinances including the
City of Denton' sign ordinance."
E. ENTRY. Lessor and its designees shall have the right to enter the Leased
Premises upon reasonable advance notice (written or oral) and at any reasonable 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,
i 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.
VL COVENANTS BY LESSOR
Lessor hereby agrees as follows:
A. PEACEFUL ENJOjail U. Upon payment of all rem, fees,,-and performance of
the coves and on the part of Lessee to be performed hereunder, Lessee shall
peaceably hold and enjoy the Leased Premises and all rights and privUeges herein granted.
B. COMPLIANCE. Lessor warrants and represents that in the establishment;
construction and operation of the Airport, that Lessor has heretofore and at this time is
complying with all
existing rules, regulations, and criteria distributed by the Federal
Aviation Admini 'on, or any other governmental authority relating to and including, but
not limited to, noise abatement, air rights and easements over adjoining and contiguous
areas, overflight in landing or takeoff, to the end that Lessee will not be legally liable for
any action of mss 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 wanza and represents that at all times during the Lease Term, or
any renewal or extension of same, that it will continue to comply with the foregoing.
VIL SPECIAL CONDITIONS
It is expressly understood and agreed by and between, Lessor and Lessee that this
Lease Agreement is subject to the following special bens and conditions.
RUNWAYS AND TAXIWAYS. Because of the present sixty thousand (60,000)
pound continuous use weight bearing capacity of the taxiways, and apron identified in
Parcels A and D. Lessee herein agrees to limit all aeronautical activity including landing,
take-off and taxiing, to aircraft having an actual weight, including the weight of its fuel, of
sixty thousand (60,000) pounds or less, until such tune that the runway 'and designated
taxiways on the Airport have been improved to handle aircraft of such excessive weights. It
is further agreed that, based on qualified engineering studies, the weight restrictions and
provisions of this clause may be adjusted, up or down, and that Lessee agrees to abide by
any such changes or revisions as such studies may dictate. "Aeronautical activity" refend
to in this clause shall include any activity of the Lessee or its agents or subcontractors, and
US AVUIION GROUP FBO AGREE K Nr - Page 17
its customers and 'invitees, but shall not include those activities over which it has no
solicitory part or control, such as an unsolicited or unscheduled or emergency landing. A
pattern of violating the provisions of this section on two or more occasions shall be
sufficient to cause the immediate termination of this entire Lease Agreement and.subject
Lessee to liability for any damages to the Airport that might result.
VIII. j.EASEHOLD D&ROVEMENTS
A. REQUIREMENTS: Before commencing the construction of any additional
improvements on the Leased Premises including the Parcel A. BC, E and F Improvements
(the " Additional Lease Improvements"), Lessee shall submit:
1. Doc on, specifications, or design work to be approved by the Lessor,
wbich shall establish bat the improvements to be built or consttueW upon the
Leased Premises are in conformance with the overall size, shape, color, quality
and design, in appearance and structure of the program established by Lessor
on the Airport.
2. All plans and specifications showing the location upon the Leased Premises of
the proposed construction and improvements;
3. The estimated cost of such construction.
No construction may comm=ce 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 ta)dways, aprons or
parking lots) shall be delivered by Lessee to Lessor's City Maaagea from time to time as
such costs are paid by Lessee, and Lessor's City Manager or designee is hereby authorized
to endorse upon a copy of this Lease Ag %mmnt filed with the City Sir of Lessor such
actual amoants as he shall have found to have been paid by Lessee, and the findings of the
City Manager when endorsed by him upon said contract shall be conclusive upon all parties
for all purposes of this Lease Agreement.
No later than 30 days after completion of the Additionml Lease Improvements, Lessee
shall submit to Lessor detailed as built plaars of the Additional Lease Improvements and
documentary evidence acceptable to Lessor evidencing the total, cost to construct the Lease
Improvements ("Cost to Construct Lease Improvements").
B. ADDITIONAL CONSTRUCTION OR IWRO : Lessee is hereby.
authorized to construct upon the Leased Premises, -at its own cost and expense, buildings,
hangars, and sue, that Lessor and Lessee mutually agree are necessary for use in
connection with the operations authorized by this Lease Agreemem, provided however,
Lessee shall comply with all of the requirements of Section VMA., above. Such additional
improvements shall be a part of the Additional Lease Improvements.
US AVIA71ON OROUP FBO AGBE DENT - Page 18
C. OVMMSHIP OF WRO : Ttie Existing Improvements except for
the hanger constructed by Lessee in 2002 which is identified on Atta~ment "A" (the '2002
Hangar') are the property of the Lessor. Lessee shall provide a legal desenption and survey
no later than 30 days from the effective date of this agreement identified as Attachment `B"
identifying Existing Parcel and the Existing Improvements in the Existing Parcel. The 2002
Hangar and the Additional Lease Improvements, when completed by Lessee, (the ".ease
improvements") shall remain the property of Lessee during the Lea.9e Term subject to the
following conditions, terms and provisions:
1. Removal of Bw'ldinas. No bulding or permanent fixture may be removed
from the Leased Premises.
2. Assumption. The .L ease Improvements shall s domatically become the
property of Lessor absolutely free, without any cost to Lessor, at the end of the
Lease Term, or any exteension thereof.
3. Failure to Complete Parcel A. B. C. E, and F Improvements. The
Improvements shall immediately become the property of Lessor at no cost,
expense, or 'on to Lessee should Lessee fail to complete the
Lessee's Improvemlents within the Construction'Period as provided in Section
ELC. of this Lease Agreement
4. Cancellation or Ternunat M Should this Lease Agreement be cancelled or
ternainated before the cad of the I== 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
regent value of the Lease Improvements as deteanined by the Denton County
Central Appraisal District ("Value of the Lease Improvements") reduced by
1/30 for each year of the Lease Te= that has expired as of the date of
termination (the "Purchase Price"). With regard to Additional Lease
Improvements, should the. Denton County Central Appraisal District not
determine a separate value for the Lease hgrovements, or should such
separate valuation be older than two yearn, then the Purchase Price will be
determined taking the Cost to Construct the Lease Improvements reduced by
1/30 for each year the Lease Term has expired ass of the date of termination, If
the termination or cancellation is due to a defarult by Lessee that has not been
cored within 30 days after written notice of default to Lessee, then the
Purchase Price as determined above shall be reduced by 50%. However, if
Lessee provides written notice to Lessor within said 30 day cure period that it
is imposamlale to cure sucb 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. This clause shall not apply to the Fuel Farm.
DL SUBROGATION OF MORTGAGEE
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Any person, corporation or institution that lends money to- Lessee for construction
of any hangar, structure, building or improvement and retains a security interest in said
hangar, structure, building or improvement shall, upon default of Lessee's obligations to
said mortgagee, have the right to enter upon the Leased Premises and operate or manage
said hangar, structure, building or improvement according to the teens of this Lease
Agreement, for a period not to exceed the term of the mortgage with Lessee, or until the
loan is paid in full, whichever comes first, but in no event longer than the Lease Term. It
is fly 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.
X RKiHT OF EASEM NT
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
i across the Airport property or for the construction of public facilities on the Airport.
However, any such easements shall not interfere with Lessee's use of the Leased Premises
and Lessor shall restore the property to the original condition as is reasonable practicable
upon the installation of any utility services on, in, over or under any such easement at the
conclusion of such construction. Construction in or at the easement shall be completed
within a reasonable time.
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XL ASSIG14NE T OF LEASE
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Lessee expressly covenants that it will not assign this Lease Agreement, convey more
than fif ty percent (5 No) of the interest in its business, through the sale of stock or otherwise,
transfer, license, nor sublet the whole or any part of the Leased Premises for any purpose,
except for rental of banger space or tie-down space for storage of aircraft only, without the
written consen! of Lessor. Lessor agrees-that it wi11 not tm tasonably withhold its approval .
of such sale subl transfer, license, or assignment of the t;acilities for Airport related
purposes; provided. howoever, 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 tenns of this lease, for such portion.
of the Leased Premises proposed to be assigned, subleased, transfared, licensed, or
otherwise. The provisions of this Lease Agreement shall remain binding upon the
assignees, if any, of Lessee.
XIL INSURANCE
A. REOUIRM INSURANCE: If at any time during the term of this agreement, any
insurance required by this agreement shell lapse or Lessor becomes aware of a pending
lapse, Lessor shalt have the right to purchase such insamaoe at Lessee's sole expense.
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
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sole expense, the followingmmimum insurraaoe coverages:
1. Commercial (Public) General Liability covering the Lessee or its company, its
employees, agents, temarts and independent contra ors, and its operations on the
airport, Coverage shall be in an amount not less than $1,000,000 per occurrence
and provide coverage for premiisestopearations and coatracttW liability AND where
exposure exists, coverage for. producWcompleted operations explosion, collapse
and underground property damage.
2. All risk property insurance on a replacement cost basis coveting loss or damage to
allfacilities used. by the Lessee, either as a part of this agreement or erected by the
Lessee subsequent to this agreement. Under no cucumstances sban the Lessor be
liable for any damages to ft uvs, mercbaadise or other petwnal property of the
Lessee or its tenants.
3. Business Automobile Liability to include coverage for OwnedIcased Autos, Non
Owned Autos and Fired Cars:
For operation in aircraft movement areas the limit of liability shall'be $1009000
per occurrence.
For other operations the limit of liability shall be consistent with the amount set
by State Law.
B. ADDITIONAL COVERAGES: In addition to the above referenced coverages, the
following insurance is required if the activity or exposure exists or is contemplated:
1. Aircraft Fuel/Oil Storage zmd Dim Q Con:gvehessive Commercial (Public)
General Liability shall include coverage or separate coverage shall be provided for
Environmental Imp Liability.
2. Aircraft Sales or Aircraft Charter and Air Taxi - Aacraft Liability in the amount of
$1,000,000 per oectarence to include Hull Coverage and Liability. In addition,
Passenger Liability in an-amount of $100,000 per person (per passenger seat) shall
be provided.
3. Aircraft Rental or Flight Training - Aircraft Liability in the amount of $1,000,000
per occurrence to include Hull Coverage and Liability, Fassengea Liability in the
amount of $1-00,000 per person (per passenger seat) and StudmMenter Liability
covering all users in the amount of $500,000 per owurence.
4. Specialized Commercial Flying (including crop dusting, seeding, and spraying,
banner towing and aerial advertising, aerial photography and surveying, fore
fighting, power line or pipe line patrol) - Aircraft Liability in the amount of
$1,000,000 per occurrence to include Hull Coverage and Liability. In addition,
Passenger Liability in an amount of $100,000 per person (per passenger seat)
US AVIATION GROUP M Air - Page 21
shall be provided
5. Aircraft Storage, Makftnance, and/or Repair - Aircraft Liability in the amount
of $1,000,000 per occturence to include Dull Coverage and Liability. In
addition, Hanger Keepers Liability in the amount of $500,000 per m amwce
shall be provided. The regaurement for Hangar Keepers Liability shall not
apply to individual owner/operators whosg,primmary use of the bangar space is
the storage of their own ainnaft. The requtrement does not apply to such
individuals notwithstanding the fact that they may, from time to time, pernut
the storage of non-owned aircraft in the hangar space and charge a fee for the
storage of such aircraft so long as such use is in the nature of a rent-sharing
went rattier than a camnmeacisi aircraft storage business.
C. COVERAGE REO : All insurance coverages shall comply with the
following requirements:
1. All liability policies shall name the- City of Denton, and its officers and employees
as an additional named koned and provide for a minimum of 30 days written
notice to the City of any cancellation or material. change to the policy.
I All insurance required by Ibis Lease went must be issued by a company or
c 4wnies of sound and adequate fmancW responsibility and authorized to do
baroness in the State of Texas. All policies are subject to the examination and
approval of the City's office of Risk Management for their adequacy as to content,
form of protection and p oviding company.
3. Required iasmance naming the City as an additional insured must be primary
insurance and not cant<ibutmg with any other insurance available to the City
whether from a third party liability policy or other. Said lunits of insurance shall in.
no wary limit the liability of &e 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 ice as required by Lessor shall constitute Lessee's default of this
Lease Agreement
5. During the Lease Term, or any extension thereof, Lessor herein reserves the right
to, with 60 days notice, adjust or increase the liability insurance amounts required
of the Lessee,, and to require any additional rider, provisions, or certificates of
and Lessee hereby agrees to provide any such insurance requirements as
may be required by Lessor, provided however, that any rogturemeds shall be
0o
Fit with insurance requirements at other public use airports similar to
the Denton Municipal Airport in size and in scope of aviation activities, located in
the southwestern region of the United States.
US AVIA'TW GROUP FBO A err - Page 22 "
XIII. CANCELLAn0 BY LESSOR
In the event that Lessee shall file a vohmtary petition in bankruptcy or
proceedings m bankruptcy shall be instituted against it and Lessee thereafter is
adjudicated bankrupt pursuant to such proceedings, or any court shall take jurisdiction of
Lessee and its assets pursuant to proceedings brought under the provisions of any Federal
reoigaaization act, or Lessee shall be divested of its estate herein by other operation of
law; or Lessee shall fail to perform, keep tad observe any of the terms, covenants, or
conditions herein contained, or on its part to be performed, the Lessor may give Lessee
written notice to correct such condition or cure such default and, if any condition or
default shall continue for thirty (30) days after the receipt of such notice by Lessee, then
Lessor may terminate this Lease Agreement by written notice to Lessee. However, if
Lessee provides written notice to Lessor within said 30 day cure period that it is impossible
to cure such default within said time period, then the Lessor may consent to an extension of
such time to cure, which consent will not be unreasonably withheld. In the event of
default, Lessor has the right to purchase any or all of the. Lease Improvements under the .
provisions. of Section VMCA. hereof.
MV. CANCELLATION BY LESSEE
Lessee may cancel this Lease Agreement, in whole or part, and terminate all or any of
its obligations hereunder at any time, by thirty (30) days written notice, upon or aft the
happening of any one of the following events: (1) issumce by any court of com t,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 reanedy such breach for a period of
ninety (90) days after receipt of a written notice of the existence of such breach; '(3) the .
inability of Lessee to use the Lease Premises and facilities contirnonng for a longer period
fl= ninety (90) days due to any law or any order, rule or regu afion of ww
govermnental authority having jurisdiction over the operations 'of Lessor or due to war,
earthquake or other casualty; .or (4) the assumption or recapture by the United States
a and operation of said
Covernuucet, or any authorized agency thereof,. of the 11
airport and facilities or any substantial part or parts ftreof
a0c
Upon the happening of any of the four events listed in the preceding paragraph, such
that the Leased Premises cannot be used for aviation purpose's, then the Lessee may cancel .
this Lease Agreement as aforesaid, or may elect to continue this Lease Agreement under its
terns, except, however, that the use of the Leased Premises shall not be limited to aviation
purposes, their use being only limited by such lam and ordinances as may be applicable at
that time.
Should lessor close the Airport and relocate the Airport to another locatioa during the
primary term of this Lease Agrecement, Lessee shall have the right to relocate its facilities to
the new airport at a suitable location under the same or similar terms of this Lease
Agreement The cost of relocation of Lessee's facilities will be sbared. by Lessor and Lessee
• US AVIAIMN GROUP FBO AGREDdENr - Page 23
in proportion to the number of years remaining on the primary tern of this Lease
Agreement In this regard Lessor will be responsible for 1130 of the such coats for every
year remaining on the primary term.
XV. M[S US PROVISIONS
A. ENTIRE AG This Lease Agreement constitutes the entire
understanding betweeri the parties and as of its Effective Date fides all prior or
indel~+dent Agreements between the parties covering the subjed matter hereof Any
change or modification hereof shall be in writing signed by both parties.
B. BINDWO M.CT. All coves, stipulations and agreements herein shall
extend to, bind and inure to the benefit of the legal retatives, successors and assig~Is
of the respective parties hereto.
G SEVERA.BILI'TY. If a provision hereof shall be finally declared void or illegal by
any court or admiaLstrative 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 ori ginal intent of the parties.' '
D. NOS Imo. Any notice given by one party to the other in connection- with this
Lease Agreement shall be in writing and shall be seat by certified mail; return receipt
r+egnested, with postage fees prepaid or via facsimile as follows:
1. If to Lessor, addressed to:
City Manager
City of Denton
215 E. McKinney Street.
Denton, Texas 76201 '
Fax No.940349.8596
2. If to Lessee, addressed to:
W.A. Roper Vaughn, Managing Pad=
SykesNaugban investments LLC .
4850 Spartan Drive
Denton, Texas 76207
Phone 940383.2484
Fax No. 940381-5383
E. HEADINGS. The headings used in this Lease Agreement are irrtended for-
convenience of reference only and do not define or limit the scope or meaning of any
provision of this Agreement.
US AVIATM CROUP FBO AGREEMENr - Page 24
~ wr _ -
F. GOVERNMO LAW AND VENUE. This Lease Agreement is to be construed in
accordance with the laws of the State of Texas and is fully performable in Denton County,
Texas. Exclusive venue for any lawsuit to enforce the terms or conditions of this Lease
Agreement shall be a court of competent jurisdiction in Denton County, Texas.
G. NO WAIVER. No waiver by Lessor or Lessee of any default or breach of
covenant or term of this Lease Agreement may be treated as a waiver of any subsequent
default or breach of the same or any other covenant or term of this Lease Agreement.
H. NO AGENCY. 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. FORCE MAJEURE. None of the Parties shall be in default or otherwise liable for
any delay in or failure of performance under this Lease Agreement if such delay or failure
arises by any reason beyond their reasonable control, including any act of Cod, any acts of
the common enemy or terrorism, the elements, earthquakes, floods, fires, epidemics, riots,
failures or delay in transportation or communications. However, lack* of funds shall not be
deemed to be a reason beyond a Party's reasonable control. The Parties will promptly inform
and consult with each other as to any of the above causes, which in their judgment ma' or
could be the cause of a delay in the performance of this Lease Agreement. .
J. SUPERCEDES EXISTING LEASE. This Lease Agreement supercedes and takes
the place of the Existing Lease in its entirety.
IN WTINESS WHEREOF, the parties have executed this Lease Agreement as of the
Effective Date first above written.
CITY OF DENTON, TEAS, -LESSM
BY:
bEftGE c_ cAwBELL, ary mmciER
ATTEST:
JENNWER. WALTERS, CITY SECRETARY
- °
BY: 041y
APPROVED AS TO LEGAL FORM:
ANTTA BURGESS, GTTY ATTORNEY
BY:
OOV
US AVIATION GROUP Fs0 AGREEMENT - page 25
i
i
sYKES-VALGHAN RW STMWIS, u;c
A Texas lorded Liability COMPRPY
BY:
ROPER VA PARTNM
US AVIATION GROUP FBO AGREEMENT - Page 26
ACKNOWIEDG -
THE SIAM OF TEXAS §
MUM OF DEMON §
This fimbmigmi was ed befomeme on thr-A of by
• CmPb4 'Mao of the G~ty of Dm*m Tee, Cm beW of said
N ARY P
JANE E. RICHARDSON CJBLI STATE ATE OF TEXAS
e•'.► ,o`,`~•
r+. Mary Public. State of Texas
My Commission Expires
June 27, 2004
R
TM STATE OF TKXU
COUNW OF DENI W .
This hftunwd vm acknowWged be,Gaie me (m tk Az day of ~ 2Mby.
Sykes-Y a "Co a Terms limited y company, an bAff of said
• Y Id 6°TA TEXAS.
SHARON K. HARRIS
s Notary bk of
Pu State Texas
My Commission Expires
October 30, 2011 . .
U5AVL4MWGR0UppB0 - ease 27 .
P
Exhibit B
of
E)enton Airport
The North Texas Airport of Choice
l 5000 AIRPORT RD -DENTON, TEXAS 76207 -(940)349-773 -FAX (940) 349-7289
DENTON MUNICIPAL AIRPORT
January 15, 2010
Denton Municipal Airport
5000 Airport Road
Denton, Texas 76207
Western Petroleum Company
Suite 102, Cabriole Center
9531 West 78th Street
Eden Prairie, MN 55344
Dear Mr. Jewett:
This letter is to confirm that Sykes-Vaughn Investments LLC dba U S Aviation Group, LLC 4850
Spartan Drive, Denton, TX 76207 ("Sykes-Vaughn") is presently in lawful possession of certain
premises at Denton Municipal Airport-. We agree that Western Petroleum Company (Western) has
and will have a first priority security interest in the Fuel Farm to be constructed by Sykes-Vaughn at
Denton Municipal Airport that will include one 12,000 gallon Avgas 100LL tank and one 12,000
gallon Aviation Jet Fuel tank (both tanks are UL2085 Fireguard Stainless Inner Tank with Porch and
Rainshield) including associated equipment, which will be located on the parcel of land at the
Airport further described and defined in Exhibit A. Further, we agree that if Sykes-Vaughn defaults
in any of its obligations to Western, Western will have the right to enter upon the property for the
purpose of foreclosing its liens and selling the fuel tanks and associated equipment and generally
enforcing its security interest in the collateral.
Very truly yours,
z/oz l~
eorge Campbell, City Manager bate
City of Denton, Texas
"Dedicated to Quality Service"
www.cityofdenton.com
Exhibit A
1
J
MON
~N S ~elO
SCALE 1' = W
count Btar:rp Dsturce
Lt •MTM 60.95•
L9 SOUTH 38. 000- ATMOS ENERGY I
L4
afST 49.00- BURIED PIPELINE
La SOUT,J 2.4.97-
LA N 69.66• a 36.00'
0.091 AC. I
TRACT 4
A.P.O. a
SOUTHEAST AIRPORT ADDITION I
CABINET G, PAGE 295 1 z
P.R.O.C.T. I cc: I N
IRS/CAP L2 IRS/CAP I I
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P° 25'
IRS/CAP L 4 IRS/CAP
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N 89.58'11' w 179.26'
CONCRETE
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(ASPHALT SURFACE) CULVERT
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(ji(1R1Si0aR (uR1 a : nnc't" TASp41l7 I c
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w(f) ' PUi1 OR OEFD CALL SUR+4,1 LINO - `
Pw Poo, Of etaRJamc I
RX - POWs OF CQXW4L4M
MOTE: THIS SURVEY HAS BEEN fitEPnRFD WITNOUi
THE BENEFIT OF TRLE%*Oc.
`~•0't fr F+ OBSERVAIMS. TEXAS NORT
A, H CE:MtAL NAO Bit <
ti; ?E P~ 9f
SOUTHEAST AIRPORT
J.E. THOMPSON ►
~r-', 5 ' PQ ADDITION EXHIBIT
0`1
CERTIFICATION: TRACT 4 (American' 1 HE
REBY CERTIFY MAT THIS SURVEY HAS BEEN PREPARED FROM AN veying .
ACCURATE ON-THE-GROUND SURVEY OF THE PREAOSES OEPICTED
HEREON AND DESCRISED IN THE LEGAL OESCRL°TION ATTACHED SHEET J O F Z PHOXE: 9.o-66S-91os
HERETO. CONDUCTED LWjXR MY olREcncN AND SUPERVISDIJ ON
it. $148 AND THAT THE FTND3NG8 ANO RESULTS OF SAID SuRvEY Aim FAX: 9.D-66.S-9106
TRUE AND CORRECT TO THE BEST of MY xA1D1vLEDGE AND BELIEF. 114.8 W. .%,6\IN SI ItEI r
E G.MNESVILU-Tx 76240
J.E. THOMPSON R "J.4. w %s-? JOB# OS07S3 va.d%-g
i
Estoppel ltr
Doc# 3130409\2
9/2002