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2005-377S90ur Documents\0rdinances\05UVC ULM Agr.doc ORDINANCE NO. Z&0G5- 3'7'7 AN ORDINANCE OF THE CITY OF DENTON, TEXAS APPROVING A LETTER AGREEMENT BETWEEN THE CITY OF DENTON, JVC REAL ESTATE, L.L.C. AND FIRST UNITED BANK AND TRUST COMPANY; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, on September 21, 2004 the City of Denton, Texas (hereinafter the "City") entered into that certain Airport Commercial Operators Lease Agreement with JVC Real Estate, L.L.C. ("JVC") at the Denton Municipal Airport dated September 21, 2004 ("Lease"); and WHEREAS, JVC has requested the City to enter into a Letter Agreement ("Agreement') with it and First United Bank and Trust Company ("First United Bank") to facilitate the financing of improvements to be constructed by JVC under the Lease; and WHEREAS, at its meeting of November 17, 2005 the Airport Advisory Board recommended that the City Council approve the Agreement; and WHEREAS, the City Council deems it in the public interest to enter into a Agreement with JVC and First United Bank, which will amend the Lease and will father facilitate the financing of the improvements to be constructed by JVC under the Lease; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The City Manager or his designee is hereby authorized to execute an Agreement between the City of Denton, JVC and First United Bank that will amend the Lease, substantially in the form of the Agreement which is attached to and made a part of this Ordinance for all purposes. SECTION 2. This Ordinance shall become effective immediately upon its passage and approval. A day AND APPROVED this the Z day of 2005. EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: EDWIN M. SNYDER, CITY ATTORNEY BY:V,~ LETTER AGREEMENT Effective Date: December,, 2005 First United Bank and Trust Company 1517 Centre Place Drive, Suite 100 Denton, Texas 76205 JVC Real Estate, L.L.C., a Texas Limited Liability Company 1424 Gables Court Plano, Texas 75075 RE: The Airport Lease Agreement - Commercial Operator - dated September 21, 2004 (the "Lease") between the City of Denton, Texas, a municipal corporation, (the `Lessor), and JVC Real Estate, L.L.C., a Texas Limited Liability Company, (the "Lessee"), and all extensions and modifications thereof and future amendments thereto, covering the property described in Exhibit "A" (the "Project Property") Gentlemen: We understand that First United Bank and Trust Company (the "Lender") is proposing to make a loan to the Lessee in the amount not to exceed $880,000.00 (the "Loan"), the proceeds of which will be used by the Lessee to make certain improvements to the Project Property in connection with construction of hangar facilities at the Denton Municipal Airport, which airport is owned by the Lessor. Notwithstanding anything to the contrary contained in the Lease, this letter shall constitute our agreement and understanding as to the interpretation of the Lease and its application to the rights of the Lender. The Lessor represents to Lender and to Lessee that the Lease is not in default, that the Lessor is the owner in fee simple of the premises upon which the Project Property is situated, that the Lease is a valid and binding obligation of the Lessor and that the Lessee has the right to occupy the Project Property under the tenns of the Lease. 2. The Lessor hereby consents to the Loan, to be secured by a first lien on Lessee's leasehold interest in the Project Property and a security interest in all personal property of Lessee on the Project Property, (collectively, such liens and security interests, the "Liens"). The Lessor agrees that its landlord liens on the Lessee's personal property shall be subordinate to the Liens of Lender on such personal property. 3. In the event that the Lessor claims a default under the Lease subsequent to the date hereof, the Lessor agrees to send a copy to Lender of any default notice that is required to be sent or is sent to Lessee. The Lessor agrees that Lender shall have the right to cure any default by Lessee under the Lease. 4. In the event the Lease is cancelled or terminated pursuant to Article VI or Article XIII, or any other provisions of the Lease, or in the event the Lease is rejected in any bankruptcy or other legal proceeding, the Lessor agrees to allow Lender a period of sixty (60) days following such cancellation, termination or rejection (upon the condition that the Lender pays the Lessor during such period the monthly rental that would be payable had the Lease not been cancelled, terminated, or rejected) to either (i) assume the rights and obligations of the Lessee under the Lease, or (ii) without becoming liable under the Lease, present to the Lessor a replacement lessee, acceptable to the Lessor in its reasonable approval, for the purpose of reinstating the Lease with the replacement lessee or entering into a replacement lease having the same terms for the balance of the Lease term. In any event, the Liens of the Lender will continue unimpaired until foreclosed or released by Lender, so long as monthly rentals are timely paid. 5. Provided, however, in the event of any cancellation of the Lease, which is not caused by a default of Lessor, an assignment of the Lease or a replacement lessee, the Lessee, Lender, replacement lessee or any assignee or successor in interest to Lessee shall pay all Lessor's administrative costs of such cancellation, assignment or designation of a replacement lessee, including without limitation, all reasonable attorneys fees and Lessors staff time associated with the cancellation, assignment or replacement lessee. In the case of an assignment or transfer of the Lease to a replacement lessee, the Lessee, Lender, replacement lessee or any assignee or successor in interest to Lessee shall pay to Lessor a transfer fee of $500.00. 6. Lessor, Lessee and Lender agree that notwithstanding the provisions of the Loan Documents between Lender and Lessee dealing with the control and application of any causality insurance proceeds, that in the event of damage or loss to the Project Property which is covered by insurance , that the insurance proceeds shall be utilized to fully repair any loss or damage to the Project Property and the underlying premises to the condition it was in immediately prior to the event causing the loss or damage for which the insurance proceeds were received. 7. The exercise by Lender of its rights to foreclose any collateral interest in the Project Property and the property of Lessee shall not, itself, be a default under the Lease. 8. To the extent of any conflict between the terms of this Letter and the terms of the Lease, the Lessor agrees that as to the Lender, the terms of this Letter shall be controlling. 9. This Letter is given to assure the Lender, its successors and assigns, as to the interpretation of certain provisions affecting the interests of Lender; nothing in this Letter is intended to confer or shall confer any right or benefit upon Lessee or any third party other than Lender. If the above accurately reflects our understanding and agreement, please indicate by signing below and returning a counterpart to the Lessor. Sincerely, LESSOR: CITY OF DENTON, TEXAS, a municipal corporation BY MICHAEL A. CONDUFF, an er ATTEST: JENNIFER WALTERS, City Secretary BY: (AGw h(hwdM, Ual d, APPROVED AS TO LEGAL FORM: EDWIN M. SNYDER, City Attorney BY: t / LESSEE: JVC REAL ESTATE, LLC, a Texas Limited Liability Company LENDER: FIRST UNITED BANK AND TRUST COMPANY BY ITS STATE OF TEXAS COUNTY OFDENTON BEFORE ME, the undersigned, a Notary Public in and for the said County and State, on this date personally appeared Michael A. Conduff, City Manager of the City of Denton, Texas, a municipal corporation, known to me to be the person whose name is subscribed to the foregoing document and acknowledged to me that he executed the same in the capacity therein stated and for the purpose and consideration therein expressed.Q GIVEN UNDER MY HAND AND SEE OF OFFICE, this the 1 day of 2005. ~+?~JENNIFER K, WALTERS _ Notary Public, State of Texas on ` My commission Expires December 19, 2006 N R PUBLIC - STATE OF TEXAS STATE OF TEXAS COUNTY OF DENTON BEFORE ME, the undersigned, a Notary Public in and for the said County and State, on this date personally appeared, JOHN A. VANN, Manager/President of JVC REAL ESTATE, LLC, z Texas Limited Liability Company, known to me to be the person whose name is subscribed to the foregoing document and acknowledged to me that he executed the same in the capacity therein stated and for the purpose and consideration therein expressed. GIVEN UNDER MY HAND AND SEE OF OFFICE, this the 1 day of November, 2005. <P"` GAYLE GRUBBS Notary Public m9 STATE OF TEXAS My Comm. Exp. 03/24/2009 r I A, NOTAR UBLIC - STATE OF TEXAS STATE OF TEXAS COUNTY OF DENTON BEFORE ME, the undersigned, a Notary Public in and for the said County and State, on this date personally appeared, , ) i py\ f\11 0 G41&r SM f Aj ~i r yW of First United Bank and Trust Company, known to me to be the person whose name is subscribed to the foregoing document and acknowledged to me that he executed the same in the capacity therein stated and for the purpose and consideration therein expressed. GIVEN UNDER MY HAND AND SEE OF OFFICE, this the ~ day of November, 2005. GAYLE G NOTARY, PUBLIC - STATE OF TEXAS Notary PUublIC blic STATE En 0312412009 ty My Comm. Exp. }3 EXHIBIT "A" All that certain tract of parcel of land situated in the WILLIAM NEIL SURVEY, ABSTRACT NUMBER 970 in the City of Denton, Denton County, Texas, and being a part of Lot 1, Block 1 of Southeast Airport Addition, an addition to the City of Denton, Denton County, Texas, according to the Plat thereof recorded in Cabinet G, Page 295 of the Plat Records of Denton County, Texas, and being more particularly described as follows: Beginning at a 3/8" iron rod found at the northwest comer of the herein described tract and being South 21 Degrees 14 Minutes 54 Seconds East, a distance of 1884.01 feet from a found concrete monument at the northwest corner of said Addition at a found concrete monument; Thence South 89 Degrees 43 Minutes 31 Seconds East, a distance of 300.00 feet to a 1/2" capped iron rod set at the northeast corner of the herein described tract and under apparent public use posted as SKY LANE; Thence South 00 Degrees 16 Minutes 29 Seconds West, a distance of 180.00 feet to a 1/2" capped iron rod set at the southeast comer of the herein described tract; Thence North 89 Degrees 43 Minutes 31 Seconds West, a distance of 300.00 feet to a 1/2" capped iron rod set for the southwest corner of the herein described tract; Thence North 00 Degrees 16 Minutes 29 Seconds East, a distance of 180.00 feet to the POINT OF BEGINNING and containing 1.240 acres of land, more or less.