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2004-079 FILE REFERENCE FORM 2004-079 X Additional File Exists Additional File Contains Records Not Public, According to the Public Records Act Other FILE(S) Date Initials Lease Assignment of Pad Site at Denton Municipal Airport is attached 10/15/04 JR S:\Our Documents\Ordinances\04\Group CBS Airport Lease.doc AN ORDINANCE APPROVING A COMMERCIAL OPERATOR AIRPORT LEASE AGREEMENT BETWEEN THE CITY OF DENTON, TEXAS AND GROUP CBS, INC.; AND PROVIDING AN EFFECTIVE DATE. THE COUNCIL OF THE CITY OF DENTON, TEXAS HEREBY ORDAINS: SECTION 1. The City Manager or his designee is hereby authorized to execute a airport lease agreement for commercial operator between the City of Denton and Group CBS, Inc., in substantially the form of the Airport Lease Agreement which is attached to and made a part of this ordinance for all purposes. SECTION 2. This ordinance shall become effective immediately upon its passage and approval. PASSED AND APeROVED this the ~ dayof ~ffff~ff///~ ,2004. EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY HERBERT L. PROUTY, CITY ATTORNEY BY: AIRPORT LEASE AGREEMENT COMMERCIAL OPERATOR This Lease Agreement is made and executed to be effective this First day of April, 2004 (the "Effective Date") at Denton, Texas, by and between the City of Denton, Texas, a nmnicipal corporation, hereinafter mfen:ed to as "Lessor", and Group CBS, Inc, hereinafter referred to as "Lessee". WITNESSETH: 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 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 in this Agreement, the parties agree as follows: I. CONDITIONS OF I.EARF. AGREEMENT NOTWITHSTANDiNG ANY LANGUAGE TO THE CONTRARY HEREINAFTER CONTAINED, THE LANGUAGE IN PARAGRAPHS A THROUGH D OF THIS SECTION SHALL BE BINDING. A. PRINClPI.ES OF OPERATIONS. The right to conduct aeronautical and related activities for fimfisbing se~,ices to the public is granted to Lessee subject to Lessee agreeing: 1. To fi~mish said services On a fair, equal and not tmjustly discriminatory basis to ail users thereof; and To charge fair, reasonable and not unjustly discriminatory prices for each unit or service; provided, that Les~see may be allowed to make reasonable and nondiscriminatory discounts, rebates, or other similar types of price reductions to volume purchasers. B. NON-DISCRIMINATION: Lessee, for itself, its personal representatives, successors, and assigns, as a part of the consideration hereof, does hereby covenant and agree as a covenant running with the land that: 1. No person on the grounds of race, religion, color, sex, or national origin shall be excluded fi'om participation in, denied the benefits of, or be otherwise subjected to discrimination in the use of said facilities; 2. In the construction of any improvements on, over, or under such land and the furnishing of services thereon, no person on the grounds of race, religion, color, sex, or national origin shall be excluded from participation in, denied the benefits of, or otherwise be subjected to discriminat!on; 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 SecretmT, Part 21, Nondiscrimi- nation in Federally assisted programs of the Department of Transportation - Effectual of Title VI of the Civil Rigbts Act of 1964, as said Regulations may be amended. C. RIGHT OF INDIVIDIIAI,S TO MAINTAIN AIRCRAFT. It is clearly understood by Lessee that no right or privilege has been granted which would operate to prevent any person, finn or cmporation operating aimra~ on the Airport from performing any services on its own aircraft with its own regular employees (including, but not limited to, maintenance and repai0 that it may choose to perform. D. NON-EXCIJI,RIVE RIGHT. It is understood and agreed that nothing herein contained shall be construed to grant or attthorize the granting of an exclusive right within the meaning of Title 49 U.S.C. Appendix § 1349. E. PI1511JC AREAS. 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 keep in good repair the landing area of the Airport and all publicly owned facilities of the Airport, together with the right to direct and control all activities of Lessee in this regard. 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. Lessor reserves the right to take any action it considers necessary to protect the aerial approaches of the Airport against obstruction, together with the right to prevent Lessee from erecting, or permitting to be erected, any building or other structure on or adjacent to the Airport which, in the opinion of Lessor, would limit the usefulness or safety of the Airport or constitute a hazard to aircraft or to aircraf~ navigation. 5. This Lease Agreement shall be subordinate to the provisions of any existing or future agreement between Lessor and the United States or agency thereof, FINALLEASEAGREEMENTGROUPCBS, INC - Page 2 relative to the operation or maintenance of the Airport. II. I.I~A~qF~D PRF, MI.qF,,R 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 fi'om Lessor, for the lease term described in Article IH, the following described land situated in Denton County, Texas: A. Land. A tract of lined, being approximately 90 feet by 180 feet, 16,200 square feet, or 0.3119 acres, drawn and outlined on Attachment "A", and legally described in Attactnuent "B," such attaclunents being incorporated herein by reference (the "Leased Premises"). Together with the right of ingress and egress to the Leased Premises; and the right in common with others so authorized of passage upon the Airport property generally, subject to reasonable regulations by the City of Denton and such rights shall extend to Lessee's employees, passengers, patrons and invitees. For purposes of this agreement, the term "Leased Premises" sbalI meau ali 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 and/or controlled by the Lessor. A legal description of the leased premises is not currently attached as Attachment "B". Lessee shall deliver to Lessor no later then 30 days after the date of this Agreement a legal description of the leased premises accurately describing the leased premises that is acceptable to Lessor. If Lessee fails to do so, Lessor at its option may terminate tl'fis Agreement, in which case it xvill have no further force and effect. The approved legal description will be attached to tbis Agreement as Attachment "B". B. IMPROVEMENTS PROVIDED 9~Y T.ER.qOR: NONE: There will be no improvements provided by Lessor, except as set forth in Article II.E. "Access to Utilities" below. For the purpose of this Lease Agreement, 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, which enhance or increase, the value or quality of the Leased Premises. 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.. IMPROVEMENTS PROVIDED FlY T,ER.qEE. On the Leased Premises, Lessee shall construct a hangar/office facility not less than 6,400 square feet with taxiway access and appropriate culverts or drainage as required by City ordinances in the utility right of way south and north of the proposed hangar as well as other improvements as determined necessary by City ordinances (the "Lessee's Improvements"). The Lessee's Improvements FINALLEASEAGREEMENTGROUPCBS, INC - Page 3 shall be completed not more than 720 days from the Effective Date of tlfis Lease Agreement as evidenced by the issuance of a certificate of occupancy (tbe "Construction Period"). Notwithstanding anything contained in this Lease Agreement to the contrary, a failure to complete the Lessee's Improvements within the Construction Period may, at the sole option and discretion of tile Lessor, result in the immediate termination and caucellation of this Lease Agreement upon 30 days written notice of cancellation to Lessee. In such case Lessce's rights under tile Lease Agreement will immediately cease and be forfeited, and all of Lessee's Improvements shall immediately become the property of Lessor at no cost, expense or other compensation paid by Lessor to Lessee; and Lessee shall immediately vacate the Leased Premises. D. EASEMENTS. Lessor and Lessee by mutual agreement may establish, on the Leased Premises, easements for public access on roads and taxiways. E. ACCESS TO IITIIJTIE,q Lessor represents that there are water, sewer and 3- phase electricity lines within close proximity to the Leased Premises available to "tap-in" by Lessee, and that the same am sufficient for usual and customary service on the Leased Prenrises. IH. TERM The term of this Lease Agreement shall be for a period of thirty (30) years, com- mencing on the 1st day of ApfiI, 2004 and continuing through the last day of March of 2034, unless earlier temfinated under the provisions of the Lease Agreement (the "Lease Term"). Any attempt by Lessee to mnegotiate this Lease Agreement shall be in writing addressed to the City Manager or his designee at least one hundred eighty (180) days before the expiration of the Lease Term, and at least 180 days before the expiration of any additional renegotiated period. Lessee has the option to renew for two (2) additional ten (10) year terms. The reutal and terms to be negotiated shall be reasonable and consistent with the then value, rentals and terms of similar property on the Airport. iV. PAYMENTS: RENTAl S AND FEF,~q Lessee covenants mid agrees to pay Lessor, as consideration for this Lease Agreement, the following payments, rentals and fees: A. T,ANT) RENTAT, shall be due and payable in the sum of $0.17 per square foot or $2,754 per year (the "Original Rent"), payable in twelve (12) equal monthly installments in the sum of Two Hundred and Twenty Nine and fifty cents ($229.50) in advance, on or before the I st day of each and every month during the term of this Lease Agreement. Lessee has the option to pay mmual rentals and fees in whole on or before the 1st day of April, at the begi~ming of the City's fiscal year, each and every year of this Lease Agreement. Notwithstanding the foregoing, the annual lease rental will be reduced by the current lease FINALLEASEAGREEMENTGROUPCBS, INC - Page 4 rate per square foot, as adjusted by the CPI-U referenced in Section 1V.C, times the number of square feet comprising ail easements established in accordance with Article II (D). B. [,ESS{DR IMPROVEMF, NT,q RENTAI,,q NONE: improvements on the Leased Prenfises. There are no Lessor C. PAYMENT, PF, NAI ,TV, AD.II ISTMF, NTS. All payments due Lessor fi'om Lessee shall be made to Lessor at the offices of the Finance Department of the City of Denton, Customer Service Division, 601 West Hickory, Denton, Texas, unless otherwise designated in writing by the Lessor. If payments are not received on or before the 15th day of the month, a five pement (5%) penalty will be due as of the 16th. If payments are not received by the first of the subsequent month, an additional penalty of one percent (1%) of the unpaid rental/fee alnount will be due. A one percent (1%) charge will be added on the first of each subsequent month until the unpaid rental/fee payment is made. The Original Rent for the Leased Premises shall be readjusted at the eud of each one year period during the Lease Term on the basis of the proportion that the tben current United States Consumer Phce h~dex for all urban consumers (CPI-U) for the Dallas-Fort Worth Bureau of Labor Statistics bears to the previous odd nmnth 2004 index, which was 175.7 (1982-84 = 100). Each rental adjustment, if any, shall occur on the 1st day of April, beginning 2006, and every other year thereafter on such date. The adjnstments in the yearly rent shall be detennined 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 denonfinator of which is the index nunther applicable at the execution of this Lease Agreement. If the product of this multiplication is greater than the Original Rent, Lessee shall pay this greater amount as the yearly rent until the time of the next rental adjustment as called for in this section. If the product of this multiplication is less than the Original Rent there shall be no adjustment in the annual rent at that time, and Lessee shall pay the previous year's annual rent until the time of the next rental adjustment as called for in this section. In no event shall any rental adjustment called for in this section result in an annual rent less than the previous year's annual rent. The adjustment shall be limited so that the annual rental payment determined for any given two-year period shall not exceed the mmual rental payment calculated for the previous CPI adjustment by more than twenty percent (20%) percent. If the consnn~er price index for all urban consumers (CPI-U) for the Dallas-Fort Worth geographical region, as compiled by the U.S. Department of Labor, Bureau of Labor Statistics, is discontinued duhng the Lease Term, the remaining rental adjustments called for in this section shall be made using the formula set forth above, but by substituting the index numbers for the Consumer Price Index-Seasonally Adjusted U.S. City Average For All Items For All Urban Consumers (CPI-U) for the index numbers for the CPI-U applicable to the Dallas-Fort Worth geographical region. If both the CPI-U for the Dallas- Fort Worth geographical region and the U.S. City Average are discontinued during the Lease Tem~, the remaining rental adjustments called for in this section shall be made using the statistics of the Bureau of Labor Statistics of the United States Department of Labor that are most nearly comparable to the CPI-U applicable to the Dallas-Fort Worth geographical FINALLEASEAGREEMENTGROUPCBS, INC - Page 5 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 Terns, 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. V. RTGI-IT,q AND OI:IT,IGATION~q OF I,F,~qSF, F~ A. l l,ql~ OF 1,12,A,~F,D PRF, MI,qF,q, Lessee is granted the non-exclusive privilege to engage in or provide the following: 1. ~-lflllgflr ,qpaee I ,e~ing Lessee is granted the non-exclusive right to rent hangar space. 2. Office S?ee l.e,~ing Lessee is granted the non-exclusive right to rent office space. 3. Avionics Repair and Installation Lessee is granted the non-exclusive right to install, remove and repair of radio, GPS equipment, electronics and avionics equipment on Lessees and General Aviation aircraft upon the leased premises. Avionic~ m~d Eqnipmeni ~q~le~ Lessee is granted the non-exclusive fight to engage in the sale and/or brokering of aircraft avionics, GPS equipment, electronics and radio components. 5. Tie-Dawn ,qerviee~ Lessee is granted the non-exclusive right to charge for tie- down services on Lessee's property. Lessee, its tenants, employees, invitees and guests shall not be authorized to conduct any services not specifically listed in this Lease Agreement. The use of the Leased Premises by Lessee, its tenants, employees, invitees or guests shall be limited to only those private, commemial, retail or industrial activities having to do with or related to airports and avia- tion. No person, business or corporation may operate a commercial, retail or industrial business npon the Leased Premises or upon the Airport without a lease or license from Lessor attthorizing such commercial, retail or industrial activity. The Lessor shall not unreasonably withhold authorization to conduct aeronautical or related services. B. ,qTANIDARDR. Lessee shall meet or exceed the following standards: I. Address. Lessee shall file with the Airport Manager and keep current its mailing addresses, telephone nnmbers and contacts where it can be reached in an emergency. 2. l,ist Lessee shall file with the Airport Manager and keep current a list of its tenants and sublessees. FINALLEASEAGREEMENTGROUPCBS, INC - Page 6 3. {Tonduet. Lessee shall contractually require its employees and sublessees (and sublessee's invitees) to abide by the terms of this Lease Agreement. Lessee shall promptly enforce its contractual rights in the event of a default of such covenants. 4. lltilitie% Taxes and Fees. Lessee shall meet all expenses and payments in connection with the use of the Leased Prenfises and the rights and phvileges herein granted, including the timely payment of utilities, taxes, permit fees, license fees and assessments lawfully levied or assessed. 5. l,aws. 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, re,rations and ordinances promulgated by Lessor, and Lessee shall keep in effect and post in a prominent place all necessary and/or required licenses or permits. 6. Maintenance of Property. Lessee shall be responsible for the maintenance, repair and upkeep of all property, buildings, structures and improvements, including the mowing or elimination of grass and other vegetation on the Leased Premises, and shall keep the Leased Premises neat, clean and in respectable condition, fi'ce fi'om auy objectional matter or tlfing, including trash or debris. Lessee agrees not to utilize or permit others to utilize areas on the Leased Premises which are located on the outside of any hangar or building for the storage of wrecked or permanently disabled aircraft, aircraft parts, atttomobiles, vehicles of any type, or m~y 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 Fhfildin£s. During the Lease Term of this Lease 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) or building(s) located on the Leased Premises 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 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 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. 8. 1 lnanthorized use of l.eased 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, FINALLEASEAGREEMENTGROUPCBS, INC - Page 7 restaurant, privae club or bar, apartment house, storage of recreational vehicles, automobiles, or maine vehicles, or for industrial, cm~mercial, retail, or other pm-poses, except as authohzed herein. :Dwellings. It is expressly understood and agreed that no dwelling or donficile 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. 10. Quit Pnssession. Lessee shall quit possession of the Leased Premises at the end of the Lease Term or any renewal or extension thereof, or upon cancellation or termination of the Lease Agn'eement, 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. 1 I. h~demnity 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 m~d/or actions for damages, injuries to persons (including death), property damage, (including loss of use), and expenses, including court costs, attorneys' fees and other reasonable costs, occasioned by or incidental to the Lessee's occupancy or use of the Leased Premises or the Ai¢ort and/or activities conducted in com~ection with or incidental to this Lease Agreement, including all such causes of action based on common, constitutional or statuto~ law, or based in whole or in pa~ upon the negligent or inteutional acts or omissions of Lessee, its officers, agents employees, iuvitees or other persons. Lessee must at all times exemise 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 prope~y, while in, on, or involved in any way with the use of the Leased Promises. 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 ha~, injuu, or any damaging events which are directly or indirectly attributable to premise defects, whether real or alleged, which may now exist or which may hereafter arise upon the Leased Premises, responsibility for all such defects being expressly assumed by the Lessee. The Lessee agrees that this indemnity provision applies to all claims, suits, demands, ~d actions arising from all premise defects or conditions. THE I,ES~OR A~D THE T,E~ ~PR~T,Y ~TE~ THIS ~DEMNITYPROVISION TO REQII~E I,ESR~E TO ~E~Y A~ P~OTECT THE I.ERROR FROM THE CONSRQI ~NCES OF THE I.ESSOR'S O~ NEGI.IGENCE WHII,E I,ESROR lS PARTIC~AT~G ~ THIS I,EASE AGREEMF~T WHERE THAT NEGIJGENCE lSA CONCI~R~G CAUSE OF THE ~JI~Y: DEATH; OR DAMAGE FINALLEASEAGREEMENTGROUPCBS, INC - Page NOTWITHSTANDING THE TERMS OF THE PRE. CEDING SENTENCE.q; THIS INDEMNITY PROVISION DOER NOT APPLY TO ANY CI,AIM; I,OSS; DAMAGE; CAIISF. OF ACTION SIIIT AND T,IABIIJTY WHERE THE INJIIRY; DEATH; OR DAMAGE RE, SIll,TS FROM THE ROT,E NEGI,IGENCE OF THE I,ESSOR {DR ANY OF ITS EMPT,OYEES~ CONTRACTORS: OR AGENTS~ UNMIXED WITH THE EAIII,T OF ANY OTHER PERSON OR ENTITY. 12. Chemic,~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 ail Local, State and Federal regulations goveruing 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. 13. Hazardous Acfivitie~ Should Lessee violate any la,v, rule, restriction or regulation of the City of Denton or the Federal Aviation Administration, or any other regulatory authority, or should the Lessee engage in or permit other persons or agents to engage in activities which could produce hazards or obstruction to air navigation, obstructions to visibility or interference with any aircraft navigational aid station or device, whether airborne or on the ground, then Lessor shall state such violation in writing and deliver written notice to Lessee or Lessee's agent on the Leased Premises, or to the person(s) on the Leased Premises who are causing said violation(s), and upon delivery of such written notice, Lessor shall have the right to demand that the person(s) responsible for the violation(s) cease and desist from ail such activity creating the violation(s). In such event, Lessor shall have the right to demand that corrective action, as required, be commenced immediately to restore the Leased Premises into conformance with the particular law, rule or aeronautical regulation being violated. Should Lessee, Lessee's agent, or the person(s) responsible for the violation(s) fail to cease and desist fi'om said violation(s) and to immediately commence correcting the violation(s), m~d to complete said corrections within twenty-four (24) hours following written notification, then Lessor shall have the fight to enter onto the Leased Premises and correct the violation(s) at the sole cost and expense of Lessee, and Lessor shall not be responsible for any damages incurred to any improvements on the Leased Premises as a result of the corrective action process, h~ 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. FINALLEASEAGREEMENTGROUPCBS, INC - Page 9 C. SIGNS. No signs, posters, or other similm' devices ("Signage") shall be placed on the exterior of the Lease hnprovemeuts or on any portion of the Leased Premises or Airport property without the prior written approval of Lessor. Lessee, at its sole expense, shall be responsible for the creation, installation and maintenance of all such Signage. Lessee shall pay to Lessor any and ail 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 fi'om the Leased Premises by Lessee immediately upon receipt of instrnctions for removal of same fi'om Lessor, including without limitation, upon expiration or temrination of this Lease Agreement. If Lessee fails to remove the Signage then Lessor may do so at the sole cost and expense of Lessee. D. ENTRY. Lessor and its designees shall have the right to enter the Leased Premises upon reasonable advance notice (written or oral) and at any reasonable times for the purposes of inspecting the Leased Premises, performing any work which Lessor elects to perform under this Lease Agreement, and exhibiting the Leased Premises for sale, lease, or mortgage. Nothing in this section shall imply any duty upon Lessor to do any work, which under any other provision of this Lease Agreement Lessee is required to perform, and any performance by Lessor shall not constitute a waiver of Lessee's default. VI. COVFNANTS FlY I,ESSOR Lessor hereby agrees as follows: A. pF. ACEFI 1[. F. Iq'JOYMF. NIT Upon on payment of all rent, fees, and performance of the covenants and agreements on the part of Lessee to be performed hereunder, Lessee shall peaceably hold and enjoy the Leased Promises and all rights and privileges heroin granted; B. COMPIJANCF.. 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 Administration, or any other governmental authohty relating to and including, but not limited to, noise abatement, air rights and easements over adjoining and contiguous areas, over-flight in landing or takeoff, to the end that Lessee will not be legally liable for any action of trespass or similar cause of action by virtue of any aerial operations of adjoining property in the course of normal take-off and landing procedures from the Airport; Lessor further warrants and represents that at all times during the Lease Term, or any renewal or extension of same, that it will continue to comply with the foregoing. VII. SPECIAl, CONDITIONS It is expressly understood and agreed by and between Lessor and Lessee that this Lease Agreement is snbject to the following special terms and conditions. FINALLEASEAGREEMENTGROUPCBS, INC - Page 10 RI JNWAYS AND TAXIWAYR. Because of the present thirty thousand (30,000) pound continuous use weigbt bearing capacity of tbe runway and taxiways of the Airport, Lessee herein agrees to limit all aeronautical activity including landing, take-off and taxiing, to aircraft haviug an actual weight, including the weight of its fuel, of thirty thousand (30,000) pounds or less, uutil such time that the runway and designated taxiways on the Airport have been improved to handle aircraft of such excessive weights. It is further agreed that, based on qualified engineering studies, the weight restrictions and provisions of this clause may be adjusted, up or down, and that Lessee agrees to abide by any such changes or revisions as such studies may dictate. "Aeronautical activity" referred to in this clause shall iuclude any activity of the Lessee or its agents or subcontractors, and its customers and invitees, but shall not include those activities over which it has no solicitory part or control, such as an unsolicited or unscheduled or emergency landing. A pattern of violating the provisions of this section on two or more occasions shall be sufficient to cause the immediate termination of this entire Lease Agreement and subject Lessee to liability for any damages to the Airport that might result. VIII. I,EASF, HOI,D IMPROVI:(MFNTS A. REQIIIREMENTS: Before commencing the construction of any improvements on the Leased Premises including Lessee's hnprovements (the "Lease Improvements"), Lessee shall submit: 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 am in conformance with the overall size, shape, color, quality and design, in appearance and structure of the program established by Lessor on tile Airport. 2. Ail 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 fi.om time to time as such costs are paid by Lessee, and Lessor's City Manager or designee is hereby authorized to endorse upon a copy of this Lease Agreement filed with the City Secretary of Lessor such actual amounts as he shall have found to have been paid by Lessee, and the findings of the City Manager when endorsed by him upon said contract shall be conclusive upon all parties for all purposes of this Lease Agreement. No later than 30 days after completion of the Lease Improvements, Lessee shall submit to Lessor detailed as built plans of the Lease Improvements and documentary FINALLEASEAGPdSEMENTGROUPCBS, INC - Page 11 evidence acceptable to Lessor evidencing the total cost to construct the Lease Improvements ("Cost to Construct Lease hnprovements"). B. ADDITIONAl, CONSTRIICTION OR TMPROVRMENTS: Lessee is hereby authorized to construct upon the Leased Premises, at its own cost and expense, buildings, hangars, aud structures, that Lessor and Lessee mutually agree are necessary for use in com~ection 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 pmJ. of the Lease Improvements. C. OWNERSHIP OF IMPRf3VEMENTS: 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, temps and provisions: 1. Remov,ql of Fhfilding~. No building or permanent fixture may be removed from the Leased Premises. Assm~?tim~. The Lease Improvements shall automatically become the property of Lessor absolutely fi'ee, without any cost to Lessor, at the end of the Lease Tem~, or any extension thereof. Failln'e ~o Complete T,es~ee's Improvement~. The Lease Improvements shall immediately become the property of Lessor at no cost, expense, or compensation to Lessee should Lessee fail to complete the Lessee's Improvements within the Construction Period as provided in Section II.C of this Lease Agreement. C~ane, ellatinn or Ten~n,tinn, Should this Lease Agreement be cancelled or temfinated before the end of the Lease Term, or extension thereof, Lessor shall have the right to pumhase 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 1/30 for each year of the Lease Tenn that has expired as of the date of tem~ination (the "Purchase Price"). Should the Denton County Central Appraisal District not determine a separate value for the Lease Improvements 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 as of the date of termination. 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 determined above shall be reduced by 50%. IX. ,qTIFIROGATTON OF MORTGAGF, E FINALLEASEAGREEMENTGROUPCBS, INC - Page 12 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 improvemeut shall, upon default of Lessee's obligations to said nrortgagee, 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 fidl, whichever conies first, but in no event longer than the Lease Term. It 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 pumhased with the borrowed funds, and those improvements pledged to secure the refinancing of the improvements. X. RIGHT OF F,A,qF, MF, 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 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 m~y utility services on, in, over or under any such easement at the conclusion of such construction. Construction in or at the easement shall be completed within a reasonable time. XI. A,q,qlGNMF, NT OF I,F,A.qF, Lessee expressly covenants that it will not assign this Lease Agreement, convey more than fifty pement (50%) 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 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 lease, for such portion of the Leased Premises proposed to be assigned, subleased, transferred, licensed, or otherwise. The provisions of this Lease Agreement shall remain binding upon the assignees, if any, of Lessee. XII. 1NRI IR ANCE A. REQI IIRED INSIIRANCE: Lessee shall maintain continuously in effect at all times during the term of this Agreement, at Lessee's expense, the following insurance coverage: FINALLEASEAGREEMENTGROUPCBS, INC - Page 13 1. Comprehensive general liability covering the leased premises, the Lessee or its company, its persounel, and its operations on the aiIport. 2. Aimraft liability to cover all flight operations of Lessee. Fire and. extended coverage for replacement valne for all facilities used by the Lessee either as a part of this Agree~nent or erected by the Lessee subsequent to this Agreement. 4. Liability insurance limits shall be in the following mininmm amounts: Bodily h~jury and Property Damage: One Million Dollars ($1,000,000) combined single linfits on a per occurrence basis. Ail policies shall name the City of Denton as an additional named insured and provide for a minimum of thirty (30) days written notice to the City prior to the effective date of any cancellation or lapse of such policy. 6. All policies nmst be approved by the Lessor. 7. The Lessor shall be provided with a copy of all such policies and renewal certificates. During the tem~ of~this lease, Lessor heroin reserves the right to adjust or increase the liability insurance amounts required of the Lessee, and to require any additional rider, provisioos, or certificates of insurance, mid Lessee hereby agrees to provide any such insurance requirements as may be required by Lessor; provided however, that any require- ments shall be commensurate with insurance requirements at other public use airports similar to the Denton Municipal Airport in size and in scope of aviation activities, located in the southwestern region of the United States. Lessee heroin agrees to comply with all increased or adjusted insurance requirements that may be required by the Lessor throughout the original or extended term of this lease, including types of insurance and monetary amounts or linfits of insurance, and to comply with said insurance requirements within sixty (60) days following the receipt of a notice in writing from Lessor stating the increased or adjusted insurance requirements. Lessee shall have the right to maintain in force both types of insurance and amounts of insurance which exceed Lessor's minimum insurance requirements. h~ the event that State law should be amended to require types of insurance and/or insurance amounts ~vhich exceed those of like or similar public use airports in the south- westem region of the United States of America, then in such event, Lessor shall have the right to require that Lessee maintain in fome types of insurance and/or amount of insurance as specified by State law. FINALLEASEAGR~EMENTGROUPCBS, INC - Page 14 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. XIII. CANCEI.I .ATION BY I .ER.qOR h~ the event that Lessee shall file a voluntary petition in bmC. ruptcy or proceedings in bankruptcy shall be instituted against it and Lessee thereafter is adjudicated bankrupt pursuant to such proceedings, or any court shall take jurisdiction of Lessee and its assets pursuant to proceedings brought under the provisions of any Federal reorganization act, or Lessee shall be divested of its estate herein by other operation of law; or Lessee shall fail to perform, keep and obse~we 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. h: the event of default, L6ssor has the right to purchase any or all of the Lease hnpmvements under the provisions of Section VIII.C.4. hereofi XIV. CANCRI.I.ATION AY T.E~q~qEF~ Lessee may cancel this Lease Agreement, in whole or part, and terminate all or any of its obligations hereunder at any time, by thirty (30) days written notice, upon or after the happening of any one of the following events: (1) issuance by any court of competent juris- diction ora permanent injunction in any way preventing or restraining the use of the Airport or any part thereof for airport purposes; (2) the breach by Lessor of any of the covenants or agreements contained herein and the failure of Lessor to remedy such breach for a period of ninety (90) days after receipt of a written notice of the existence of such breach; (3) the inability of Lessee to use the Lease Premises and facilities continuing for a longer period than ~finety (90) days due to any law or any order, rule or regulation of any appropriate govermnental authority having jurisdiction over the operations of Lessor or due to xvar, earthquake or other casualty; or (4) the assumption or recapture by the United States Government, or any authorized agency thereof, of the maintenance and operation of said airport and facilities or any substantial part or parts thereof. Upon the happening of any of the four events listed in the preceding paragraph, such that the Leased Premises cannot be used for aviation purposes, then the Lessee may cancel this Lease Agreement as aforesaid, or may elect to continue this Lease Agreement under its terms, except, however, that the use of the Leased Premises shall not be limited to aviation purposes, their use being only limited by such laws and ordinances as may be applicable at that time. XV. MIRCET.T.ANEOI Lq PRC~VIRTONS FINALLEASEAGREEMENTGROUPCBS, INC- Page 15 A. ENTIRE AGREEMENT. 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. RINrDING EFFECT. All covenants, stipulations and agreements herein shall extend to, bind and inure to the benefit of the legal representatives, successors and assiomas of the respective parties hereto. C. SEVER AI:/II,ITY. If a provision hereof shall be finally declared void or illegal by any court or administrative agency having jurisdiction, the entire Lease Agreement shall not be void; but the remaining provisions shall continue in effect as nearly as possible in accordance with the original intent of the parties. D. NOTICE. Any notice given by one party to the other in connection with this Lease Agreement shall be in writing mad shall be sent by certified mail, return receipt requested, with postage fees prepaid or via facsimile as follows: 1. If to Lessor, addressed to: City Manager City of Denton 215 E. McKitmey Street Denton, Texas 76201 Fax No.940.349.8596 2. Ifto Lessee, addressed to: Mr. Finley Ledbetter Chief Executive Officer Group CBS, Inc. P.O. Box 1557 Gainesville, Texas 76240 Phone (800) 232-5809 Fax No. (940) 665-4681 E. HEADINGS The headings used in this Lease Agreement are intended for convenience of reference only and do not define or limit the scope or meaning of any provision of this Agreement. F. GOVERNING T,AW AND VF, NI IE This Lease Agreement is to be constmed 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. FINALLEASEAGREEMENTGROUPCBS, INC - Page 16 G. NC) 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. NC)AGF. NCY 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. IN WITNESS WHEREOF, the pm-ties have executed this Lease Agreement as of the Effective Date first above written. CITY OF DENTON, TEXAS, LESSOR MICIJAEL A. COND '~~TY ANAGER ATTEST: JENNiFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY BY: ~~ GROUP CBS,/NC. :~LE~DBETTER, CHIEF EXECUTIVE OFFICER FINALLEASEAGREEMENTGROUPCBS, INC - ~age 17 ACKNOWLEDGMENTS THE STATE OF TEXAS § COUNTY OF DENTON § This instrumentwasacknowledgedbeforemeonthe~/~ddayof ~ff.4~/~ ,2004, by Michael A. Conduff, City Manager of the City of Denton, Texas, on behalf of said municipality. -' ~" : = Notary Public, State of Texas [ ~ My Commission Expires NO'i/ARY PUBLIC, STATE OF TEXAS THE STATE OF TEXAS § COUNTY OF DENTON § This instrument was aclmowledged before me on the ~ day of ~ t*J~ ,2004 by Finley Ledbetter, Chief Executive Officer, Group CBS, Inc. NOT~ARY PUI~LIC, STAT-E-OF-TEXAS FINALLEASEAGREEMENTGROUPCBS, INC - Page 18 · ATTACHHENT A Group CBS, inc. intends to iease ioL 112. ~eetcourt Road ~I-UL_.U L--.J [ L--J L--J I I ~ I 1.570' '~ ,. ~' Segemen led Cirde/Ligh t ed LEASE ASSIGNMENT OF PAD SITE AT DENTON MUNICPAL AIRPORT DATE: October 11, 2004 ASSIGNOR: Group CBS, Inc. ASSIGNEE: DERAFI Technology, LLC LEASE: Date: Landlord: Tenant: City of Denton Group CBS, Inc. Premises located at 4701 Spartan Drive Assignor assigns to Assignee Tenant's interest in the lease. A. Assignee Agrees To: 1. Assume Tenant's Obligations under the Lease 2. Accept the premises in their present "as is" condition B. Landlord Consems To This Assignment C. Assignor agrees that assignor remains liable on the lease should assignee default on the lease. Previous assignments: None Original Date of Lease: April 1, 2004 between City of Denton and Group CBS, Inc. APPROVED AS TO FORM: CITY ATTORNEY ,~ BY: ~'~'~"~  ~Finley L. Ledbetter, Assignor , LLC, ~Le~n';~ssignee MNT: CITY ~F DENTON, LAN~ LORD THE STATE OF TEXAS § COUNTY OF DENTON § This instmment was acknowledged before me on the ! 3 ~ 2004 by Finley L. Ledbetter, for Group CBS, Inc. __ day of October THE STATE OF TEXAS § COUNTY OF DENTON § This instrument was acknowledged before me on the ) ~ day of October 2004 by Finley L. Ledbetter, for DERAFI Technology, LLC. THE STATE OF TEXAS § COUNTY OF DENTON § This instmment was acknowledged before me onthe /.s'~ dayofOctober 2004 by Michael A. Conduff, City Manager of the City of Denton, Texas, a Municipal Corporation, on behalf of said corporation (, ~,~ Notary Public ~ ~ My Comm, Exp. 12-08-2005~ lqOI~AR~Y'PUBLIC, STATE OF TEI~s~S