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2004-361S:\Our Documents\Ordinances\04\Weyer Living Trust Ordinance.doc AN ORDINANCE APPROVING A COMMERCIAL OPERATOR AIRPORT LEASE AGREEMENT BETWEEN THE CITY OF DENTON, TEXAS AND THE WEYER LIVING TRUST; AND PROVIDING AN EFFECTIVE DATE. THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The City Manager or his designee is hereby authorized to execute an airport lease agreement for commercial operator between the City of Denton and The Weyer Living Trust, 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 APPROVED this the /~5~ dayof ~/~b~,-~ ,2004. EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY APPROSYED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY AIRPORT LEASE AGREEMENT COMMERCIAL OPERATOR This Lease Agreement is made and executed to be effective this First day of December, 2004 (the "Effective Date") at Denton, Texas, by and between the City of Denton, Texas, a municipal corporation, hereinafSer referred to as "Lessor", and The Weyer Living Trust, dated January 12, 1995 hereinafter referred to as "Lessee". WlTNESSETH: WHEREAS, Lessor now owns, controls and operates the Denton Muhicipal 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,F. ASF, AGRI~I~MENT NOTWITHSTANDING ANY LANGUAGE TO THE CONTRARY HEREINAFTER CONTAINED, THE LANGUAGE 1N PARAGRAPHS A THROUGH D OF THIS SECTION SHALL BE BINDING. A. Pl~INCrPT.ES O1~ OPI~,RATTONIS. The right to conduct aeronautical and related activities for furnishing services to the public is granted to Lessee subject to Lessee agreeing: 1. To furnish said services on a fair, equal and not unjustly discriminatory basis to all users thereof; and To charge fair, reasonable and not unjustly discriminatory prices for each unit or service; provided, that Lessee may be allowed to make reasonable and nondiscriminatory discounts, rebates, or other similar types of price reductions to volume purchasers. B. NrSN-DT,qCRIM1NATION: 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 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 fi.om participation in, denied the benefits of, or otherwise be subjected to discrimination; Lessee shall use the premises in compliance with all other requirements imposed by or pursuant to Title 49, Code of Federal Regulations, Department of Transportation, Subtitle A, Office of the Secretary, Part 21, 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. I~IGI-I'T OF INDIVIDT IAI ..q TO MAINTAIN AIRCRAFT. It is clearly understood by Lessee that no right or privilege has been granted which would operate to prevent any person, firm or corporation operating aircraft on the Airport fi.om 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-EXCIII.qIVE. RIGI-IT 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. pT1RTJC ARF. A~q 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 fight 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 fi.om 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. 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, AGRWeyer Lease 04.DOC - Page 2 relative to the operation or maintenance of the Airport. H. T ,F,,A ~F,D 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 f~om Lessor, for the lease term described in Article 11][, the following described land situated in Denton County, Texas: A. Land. A tract of land, being approximately 60 feet by 283 feet, 16,980 square feet, or 0.3898 acres, drawn and outlined on Attachment "A" (Lot 127), and legally described in Attachment "B," such attachments being incorporated herein by reference (the "Leased Premises"). Together with the right of ingress and egress to the Leased Premises; and the right in 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" shall mean all property located within the metes and bounds described and identified within Attachment "B", including leasehold improvements eon- structed 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 than 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 this Agreement, in which case it will have no further fome and effect. The approved legal description will be attached to this Agreement as Attachment "B". B. llVIPI~OVI~MFNT~R PROVIDED BY l,RS~qOR: NONE: Them will be no improvements provided by Lessor, except as set forth in Article 1I.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 rema'm 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.. [IV[PROVFMFNT~q PROVIDF, D I~Y T.~q~FiF, On the Leased Premises, Lessee shall construct a 12 unit T-Hangar office facility not less than 13,500 square feet with taxiway access and appropriate culverts or drainage as required by City ordinances in the utility fight of way south and north of the proposed facility as well as other improvements as determined necessary by City ordinances (the "Lessee's Improvements"). The Lessee's AGRWeyerLease04.DOC - Page 3 Improvements shall be commenced no later than 270 days and completed no later than 720 days after the Effective Date of this Lease Agreement as evidenced by the issuance of a certificate of occupancy (the "Construction Period"). Commencement of construction shall be when a building pemait is issued for Lessee's Improvements and actual construction work has been done. Lessee shall also construct an access taxiway, south of the proposed T-hangar facilities, connecting the development to Taxiway J as shown on Attachment "A" (the "Access Taxiwaf'). The Access Taxiway shall be a minimum of twenty-five feet (25) wide, constructed of concrete and meet a weight beating capacity of at least 15,000. Lessee shall also provide at a minimum twenty foot wide concrete stub taxiway connecting each hangar unit on the south side of the T-hangar facilities to the Access Taxiway and connecting each hangar unit on the north side of the T-hangar facilities to the existing taxiway as shown on Attachment "A" (the "Stub Taxiways"). The Access Taxiway and the Stub Taxiways are collectively called the "Access Improvements". The Access Improvements shall be completed by Lessee within the Construction Period. When hangar facilities are developed adjacent to the south line of the Access Taxiway Lessor will give Lessee written notice of such development. Within six months of such notification Lessee shall install concrete pavement within the infill areas between the Stub Taxiways and to the ends of the T-hangar facilities so that the entire area between the south side of the T-hangar facilities and the Access Taxiway is concrete pavement. Notwithstanding anything contained in this Lease Agreement to the contrary, a failure to complete the Lessee's Improvements and Access Improvements within the Construction Period may, at the sole option and discretion of the Lessor, result in the immediate termination and cancellation of this Lease Agreement upon 30 days written notice of cancellation to Lessee. In such case Lessee's rights under the Lease Agreement will immediately cease and be forfeited, and all of Lessee's Improvements shall immediately become the property of Lessor at no cost, expense or other compensation paid by Lessor to Lessee; and Lessee shall immediately vacate the Leased Premises. D. EA,qFMF, NT,q. Lessor and Lessee by mutual agreement may establish, on the Leased Premises, easements for public access on roads and taxiways. E. ACCESS TO IITII.ITYF,,q Lessor represents that there are water and 3-phase electricity lines within close proximity to the Leased Premises available to "tap-in" by Lessee, and that the same are sufficient for usual and customary service on the Leased Premises. F. ]~Xt,qTING WATF, R 1JN-F, Lessor acknowledges that it is aware of an existing water line that will be approximately six (6) feet from the southwest comer of the proposed T-hangar facility. Lessee will hold harmless Lessor, its agents, officers and employees from and against any damages to the T-hangar facility resulting from tiffs water line including without limitation any damages that may be caused to the foundation of the T-hangar facility should the water line break causing water to flow under or near the foundation. AGRWeyerLease04.DOC - Page 4 I]I. TF. RM The term of this Lease Agreement shall be for a period of thirty (30) years, com- mencing on the 1st day of December, 2004 and continuing through the last day of November of 2034, unless earlier terminated under the provisions of the Lease Agreement (the "Lease Term"). Any attempt by Lessee to renegotiate this Lease Agreement shall be in whting 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 rental and terms to be negotiated shall be reasonable and consistent with the then value, rentals and terms of similar property on the Airport. IV. PAYMF, NT~q: RFNTAI,.q AND FF, I~.q Lessee covenants and agrees to pay Lessor, as consideration for this Lease Agreement, the following payments, rentals and fees: A. 1 .AND RF, NTAI, Commencing on the First day of December, 2004 through 30th day of November, 2012 land rental shall be due and payable from Lessee to Lessor in the annual rental sum equal to $0.12 per square foot of the land area within the Leased Premises (the "Original Rent") payable in twelve equal monthly installments on or before the 1st day of each and every month during the term of this Lease Agreement. Lessee has the option to pay armual rentals and fees in whole on or before the 1st day of November, at the beginning of the Lessor's fiscal year, each and every year of this Lease Agreement. From the First day of December, 2012 through the Last day of November, 2034 the annual rent will be adjusted in accordance with Section IV.C. Nothwithstanding the foregoing in order to compensate Lessee for the construction of the Access Taxiway, so long as Lessee complies with the construction requirements for Lessee's Improvements and the Access Improvements contained in Section II.C., and is not otherwise in default of any term or condition of this Lease Agreement, the annual rent shall be reduced to a sum equal to $0.01 per square foot of the land area contained in the Leased Premises for each of the first eight years of the Lease Agreement (the "Reduced Rent"). Until such time that the Lessee's Improvements and the Access Improvements are completed in accordance with Section II.C., Lessee shall pay the Original Rent. After Lessee's Improvements and Access Improvements are completed Lessee shall pay the Reduced Rent through the end of the eighth year of the Lease Agreement and will be entitled to a refund or credit for the mount paid in excess of the Reduced Rent for the period of this Agreement up to and through the date of completion of the Lessee's th Improvments and Access Improvements. At the beginning of the 9 year of this Lease Agreement the annual rental shall be reinstated as the Original Rent as adjusted in accordance with Section IV.C. Notwithstanding the foregoing, the annual lease rental will be reduced by the current lease AGRWeyerLease04.DOC - Pa§e 5 ~. ~ .:_nlXJ C ,timesthemtmber ~- ~pl U referenced m ..... ith Article 31 (D). ~ ad'uged by m~ ~. shed in accoraanc*" er sau~e loot, as. 3 n easements ~,auu ~e no Lessor rate P* ~et comprising a~t ~xm. ~ere B.~ ~ ~~ce Dep~em s-s oPe~ise 6esi~ate6 C. ~on Texas, ~e ~ ~5th da7 of sha[~ be made to ~o ~m ~est HickoU, ~. [~ on or bePre ut¢ ~ ~t reccl~ed ~ --ice DiVisiom v~ -- ~ntS ~e dot rece~W~ ~+h If pa~ents are ~}~j~ Customer ~er~ ~ Lessor. mu~'g~st of the supsequ T ~ A o~e percent t~ 7o) by the [~ -~o~t will be au .... 'ge pa~ent is made. ~ re~ta~/tee m~ "'~e unpaid renta, ' of each one 7em F_ Ies Consumer ~¢ . ent month ~}~ m a'ustea at the.en~ c~em udtea 5ta ~Xabor Statistics ~ubs~Upre~ses shall ~e r~o¢iOn that pe~}[i.FopWo~hB~(~ 179.~ (1982- ceas~ the basis of me W~p[_~ Pr me ~._mber g004), wnlc~w~c December, Te~ on ,~ ~ consumers k~)~ ~2nth index pept¢~" ~ the 1st day ~ lOllS ay . ' ~ ~ be~S to the pr~ ~ ~ent~ a6~st~e~t, 1~ . Jr oB sucB date. 84 ~ ~00). each ~'~ +her"e~ therea~e ..... ~- the OfiOaal ~aa6 ~d eve~ out~ J ~;~ed b7 ~ltlptym~ ~ ~6or to . ~ entS in the yeany ~ ,_. ~ ;s ~e index The ad~ustm~ ~ m~merator of winch ~ Rent b7 a fraction, the n~ber applicable at the .... ;s the index ~. ~:~ is ~eater tha~ . ~:~ator of w~cn · r m~s muRipucaum~ -- .~ time the Ofigmat. , adiustment as ca)lc -hall be no ad3ustme til the time of the ~ called e next rentm JS m1 pent there u , ual rent un ~{ak ad]Ustmem ~ and ces~o~ ~ called lot m u~ ~ ~ ~e~t less t~ m~ v ~e~t dete~meu ~ ~ ~reViOUS - e~t a~ ~- . ~uat ~ tal paTm~ for me v~ ad3ustm : ~ result m ~ .~.+ the ~ual ten ~-~ent calculated in t~s secu~-, ~e liraged so m¢~_ ~nnual rentat adjustment s. , ~hall ~ot exceed n -~ent (20%) percem. two-year pe~ou ~ ore th~ ~en~ per~ - Pr the Dallas-FOP CPI adjustment b? m index for all ~b~ consumers ~ ~abor, B~eaU of L~°r~ ~ ~ De~ent o~ -. ~entS calleo If t~e cons~er pdce-s compiled by the U.~}~ [~ak~kng re~tal aO]usun~" . _ ~ao~cal re~On,.a . ~ ~e Lease Te~, Wo~h pe~ '5 -+;hued d~n~ la set fo~h above, but b~ .substituting the all be mau* ~. dex-Seasona Y . ~ n~bers tot . for m ~ _ _ for the uons~"' ~s (CPI-U) ~ ~c~oththe~r~-~ ~ ~ a,~n~ the index numoer~ ~ Urb~ C°ns~' ~ao~cal re,on. ~' ~ -oe discontinueu ~11 Items For ~' ,,-~-~o~ Wo~h germ T~ c Ci~ Average. m .:~ shall be made ~' ~ the rem~m'~ ~-abor Stat~sucS m~ ge Dallas-FoP Wo~h geo~ap~cal Lease [~}~}] ~¢ me B~eau ol~he CPI-U applicable to the staUsnc: ~ comp~able to ~e most ~GRWeyer~ase04'DOC - page 6 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. V. R[GI-ITS AND ORI,IGATIONS OF I,ESSEE A. USE OF t,EASI~D PREMISES. Lessee is granted the non-exclusive privilege to engage in or provide the following: 1. Hangar I,ea~e~ and Rental. Lessee is granted the non-exclusive right to rent hangars and hangar space and related facilities on the leased premises. 2. Office Space l,easing. Lessee is granted the non-exclusive right to rent office space. Aircraft and ,qtnrage. Lessee is granted the non-exclusive right to provide storage of both Lessee's and sublessee's aircraft and aviation related equipment and supplies upon or within the leased premises. 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 upon the Leased Premises or upon the Airport without a lease or license from Lessor authorizing such commercial, retail or industrial activity. The Lessor shall not unreasonably withhold authorization to conduct aeronautical or related services. B. STANrDARDS. Lessee shall meet or exceed the following standards: Adrtre~ Lessee shall file with the Airport Manager and keep current its mailing addresses, telephone numbers and contacts where it can be reached in an emergency. 2. ! Jst. Lessee shall file with the Airport Manager and keep current a list of its tenants and sublessees. Conduct. 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. [~tilltie~: Taxe~ and Fees Lessee shall meet all expenses and payments in connection with the use of the Leased Premises and the rights and privileges AGR Weyer Lease 04.DOC Pacje 7 herein granted, including the timely payment of utilities, taxes, pemnit fees, license fees and assessments lawfully levied or assessed. 5. 1 .aws Lessee shall comply with all current and future federal, state and local laws, roles and regulations which may apply to the conduct of business contemplated, including roles, regulations and orcFmances promulgated by Lessor, and Lessee shall keep in effect and post in a prominent place all necessary and/or required licenses or permits. 6. MaJntenanne of Properly. Lessee shall be responsible for the maintenance, repair and upkeep of all property, buildings, structures and improvements, including the mowing or elknination of grass and other vegetation on the Leased Premises, and shall keep the Leased Premises neat, clean and in respectable condition, flee from any objectional matter or thing, including trash or debris. Lessee agrees not to utilize or permit others to utilize areas on the Leased Premises which are located on the outside of any hangar or building for the storage of wrecked or permanently 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. Pajnfin£ of' l:hfilrtin£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 build'rog(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 fi-om Lessor. Lessee agrees to pay all costs and expense involved in the hangar or building painting process. Failure of Lessee to complete the painting reqtfired by Lessor, within the one (1) year period shall constitute Lessee's default under this Lease Agreement. 8. l lnauIharized u~e 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, restaurant, private club or bar, apartment house, storage of recreational vehicles, automobiles, or marine vehicles, or for industrial, commercial, retail, or other purposes, except as authorized herein. 9. 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 AGR Weyer Lease 04.DOC Page remain as a resident on or within the Leased Premises or other Airport premises. 10. Quit Po~eg~irm 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 Agreement, and deliver up the Lease Premises to Lessor in as good condition as existed when possession was taken by Lessee, reasonable wear and tear excepted. 11. lndemni~y. 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 (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 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 statutoxy law, or based in whole or in part upon the negligent or intentional acts or omissions of Lessee, its officers, agents employees, invitees or other persons. Lessee must at all times exercise reasonable precautions on behalf of, and be solely responsible for, the safety of its officers, employees, agents, customers, visitors, invitees, licensees and other persons, as well as their 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 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, and actions arising from all premise defects or conditions. THE I.F. SSOR AND THE I.ERSF. E EXPRESSI.Y INTEND THIS INDEMNITYPROVISION! TO REQIIIRE I.ESSEE TO INDEMNTF¥ AND PROTECT T}-I~ I.ESSOR FROM THE. CONSEQI II~NCES OF THE I.F. SSOR'S OWN NEG[JGF. NCE WI-III.E I.ESSOR IS PARTICIPATING IN THIS I,EASE AGREF. MENT kVHF. RE THAT NEGIJGENCR IS A CONCIFRRING CAIISE OF THE IN.IIIRY: DEATH: OR DAMAGE. NOTWITHSTANDING THE TERMS OF THE PRECEDING SENTENCES; THIS INT)F. MNITY PROVISION DOES NOT APPI.Y TO ANY CI.AIM; I.OSS: DAMAGE; CAIJSR OF ACTION; SIIIT AND IJABII.ITY WHERE THE. INIIIRY; DEATH; OR DAMAGE RERIII.TS FROM THE SOLE NEGTJGRNCE OF TI-IR LESSOR OR ANY OF ITS EMPl .OYF. E~q: CONTRA CTOR S; OR AGENTS: l }NMIXED WITH THE FAI JI,T OF ANY OTHER PERSON OR ENTITY. AGRWeyerLease04.DOC - Page 9 12. Chemie,~ls, Lessee agrees to properly store, collect and dispose of all chemicals and chemical residues; to properly store, confine, collect and dispose of all paint, including paint spray in the atmosphere, and paint products; and to comply with all Local, State and Federal regulations governing the storage, handling or disposal of such chemicals and paints. Further, the Lessee shall be solely responsible for all discharges, whether accidental or intentional, of any chemical and for the costs associated with the cleanup, remediation and disposal of said chemicals. 13. l-lazar~tmm Ac, tivitie~. Should Lessee violate any law, role, 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 pemait other persons or agents to engage in activities which could produce hazards or obstruction to air navigation, obstructions to visibility or interference with any aimraft 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 fight 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 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 from said violation(s) and to immediately commence correcting 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 Lessee, and Lessor shall not be responsible for any damages incurred to any improvements on the Leased Premises as a result of the corrective action process. In addition, such violation shall be considered a mater/al default by Lessee authorizing Lessor, at its sole option and discretion, to immediately terminate and cancel this Lease Agreement. AGRWeyerLease04.DOC - Page 10 C. ,qlGNN. 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 maintenance of all such Signage. Lessee shall pay to Lessor any and all damages, injuries, or repairs resulting from the installation, maintenance or repair of any such Signage. Any Signage placed on the Leased Premises shall be maintained at all times in a safe, neat, sightly and good physical condition. All Signage shall be removed fi:om the Leased Premises by Lessee immediately upon receipt of instructions for removal of same fi:om Lessor, including without limitation, upon expiration or termination 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. COVENANTS PlY 1 Lessor hereby agrees as follows: A. PEACF, FIJl, F, NW~YMENT. 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 Premises and all rights and privileges herein granted; B. CO1MPlJ'ANCE. 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 authority 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 fi:om 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. VEl. SPECIAl. CONDITIONS It is expressly understood and agreed by and between Lessor and Lessee that this Lease Agreement is subject to the following special terms and conditions. AGR Weyer Lease 04.DOC Page 11 RIINYW'AYS AND TAXI'WAYS, Because of the present fifteen thousand (15,000) pound continuous use weight beating capacity of the runway and taxiways of the Airport, Lessee herein agrees to limit all aeronautical activity including landing, take-off and taxiing, to aimraft having an actual weight, including the weight of its fuel, of fifteen thousand (15,000) pounds or less, until 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 include any activity of the Lessee or its agents or subcontractors, and its customers and invitees, but shall not include those activities over which it has no solicitory part or control, such as an unsolicited or unscheduled or emergency landing. A pattern of violating the provisions of this section on two or more occasions shall be sufficient to cause the immediate termination of this entire Lease Agreement and subject Lessee to liability for any damages to the Airport that might result. VIII. 1 .F, ASF, HOI,D IMPROVEMENTS A. REQIIIRRMF, NTS: Before commencing the construction of any improvements on the Leased Premises including Lessee's Improvements (the "Lease hxtprovements"), 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 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 esthnated 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 AGR Weyer Lease 04.DOC 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 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 terms of this Lease Agreement, for a period not to exceed the term of the mortgage with Lessee, or until the loan is paid in full, whichever comes first, but in no event longer than tlie 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 purchased with the borrowed funds, and those improvements pledged to secure the refinancing of the improvements. X. RIGHT OF EAREMENT 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 any utihty 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. ASSIGNMENT O1~' T,EARE Lessee expressly covenants that it will not assign this Lease Agreement, convey more than fifty percent (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. 1NSI IR ANCE A. REQI Il-RED INSI IR ),NCR: Regardless of the activities contemplated under tiffs Lease Agreement, Lessee shall maintain continuously in effect at all times during the term of this agreement, at Lessee's sole expense, the following minimum insurance coverages: AGRWeyerLease04,DOC - Page 14 evidence acceptable to Lessor evidencing the total cost to construct the Lease Improvements ("Cost to Construct Lease Improvements"). B. ADDITIONAl, CONSTRTICTION OR IMPROVF, MF, NT,q; Lessee is hereby authorized to construct upon the Leased Premises, at its own cost and expense, buildings, hangars, and structures, that Lessor and Lessee mutually agree are necessary for use in connection with the operations authorized by this Lease Agreement, provided however, Lessee shall comply with all of the requirements of Section VIII.A., above. Such additional improvements shall be a part of the Lease Improvements. C. OWNF, R~Iq'IPOFIMPR{3V~MF. NTg: Except as otherwise provided in this Lease Agreement, the Lease Improvements constructed upon the Leased Premises by Lessee shall remain the property of Lessee during the Lease Term subject to the following conditions, terms and provisions: 1. Remnval of Fhfilding.q. No building or permanent fixture may be removed from the Leased Premises. Asm~mptinn The Lease Improvements shall automatically become the property of Lessor absolutely free, without any cost to Lessor, at the end of the Lease Term, or any extension thereof. Failure to Cnmplete l,e~.qee'~ lmprovernent~. 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. Cnncallntion nr Terminalinn, Should this Lease Agreement be cancelled or terminated before the end of the Lease Term, or extension thereof, Lessor shall have the right to purchase all of the Lease Improvements. In the event of a cancellation or termination, other then due to a default by Lessee that has not been cured as provided below, the purchase price shall be equal to the most recent value of the Lease Improvements as determined by the Denton County Central Appraisal District ("Value of the Lease Improvements") reduced by 1/30 for each year of the Lease Term that has expired as of the date of termmation (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%. AGR Weyer Lease 04,DOC Page 13 1. Comprehensive Commercial (Public) General Liability covering the Lessee or its company, its employees, agents, tenants and independent contractors, and its operations on the airport. Coverage shall be in an amount not less than $1,000,000 per occurrence and provide coverage for premises/operations, products/completed operations and contractual liability. 2. All risk property insurance on a replacement cost basis covering loss or damage to ail facilities used by the Lessee, either as a part of this agreement or erected by the Lessee subsequent to this agreement. Under no circumstances shall the Lessor be liable for any damages to fixtures, merchandise or other personal property of the Lessee or its tenants. 3. Business Automobile Liabihty to include coverage for Owned/Leased Autos, Non- Owned Autos and Hired Cars: For operation in aircraft movement areas the limit of liability shall be $100,000 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: Aircraft Fuel/Oil Storage and Dispensing - Comprehensive Commemial (Public) General Liability shall include coverage or separate coverage shall be provided for Environmental Impairment Liability. Aircraft Sales or Aircraft Charter and Air Taxi - Aircraft Liability in the amount of $1,000,000 per occurrence to include Hull Coverage and Liability. In addition, Passenger Liability in an amount of $100,000 per person (per passenger seat) shall be provided. Aircraft Rental or Flight Training - Aircraft Liability in the amount of $1,000,000 per occurrence to include Hull Coverage and Liability, Passenger Liability in the amount of $100,000 per person (per passenger seat) and Student/Renter Liabihty covering all users in the amount of $500,000 per occurrence. Specialized Commercial Flying (including crop dusting, seeding, and spraying, banner towing and aerial advertising, aerial photography and surveying, fire 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) shall be provided. AGRWeyer Lease 04,DOC - Page 15 AircraR Storage, Maintenance and/or Repair - Aircraft Liability in the amount of $1,000,000 per occurrence to include Hull Coverage and Liability. In addition, Hanger Keepers Liability in the amount of $500,000 per occurrence shall be provided. The requirement for Hangar Keepers Liability shall not apply to individual owner/operators whose primary use of the hangar space is the storage of their own aircraft. The requirement does not apply to such individuals notwithstanding the fact that they may, from time to time, permit 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 agreement rather than a commercial aircraft storage business. C. COVER A GF, RFQI IIRF, MFNT,q: All insurance coverages shall comply with the following requirements: Ail liability policies shall name the City of Denton, and its officers and employees as an additional named insured mad provide for a minimum of 30 days written notice to the City of any cancellation or material change to the policy. All insurance required by this Lease Agreement must be issued by a company or companies of sound and adequate financial responsibility and authorized to do business in the State of Texas. All policies are subject to the examination and approval of the City's office of Risk Management for their adequacy as to content, form of protection and providing company. Required insurance naming the City as an additional insured must be pr/mary insurance and not contributing with any other insurance available to the City whether from a third party liability policy or other. Said limits of insurance shall in no way limit the liability of the Lessee hereunder. The Lessor shall be provided with a copy of all such policies and renewal certificates. Failure of Lessee to comply with the minimum specified amounts or types of insurance as required by Lessor shall constitute Lessee's default of this Lease Agreement. During the Lease Term, or any extension thereof, Lessor herein reserves the fight 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 insurance, and Lessee hereby agrees to provide any such insurance requirements as may be required by Lessor; provided however, that any requirements shall be commensurate with insurance requirements at other public use airports similar to the Denton Municipal Airport in size and in scope of aviation activities, located in the southwestern region of the United States. AGRWeyerLease04.DOC - Page 16 XIII. CANCEl J,ATIC)N RY T,ERSOR In the event that Lessee shall file a voluntary petition in bankruptcy 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, er Lessee shall be divested of its estate herein by other operation of law; or Lessee shall fail to perform, keep and observe any of the terms, covenants, or conditions herein contimed, 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. In the event of default, Lessor has the right to purchase any or all of the Lease Improvements under the provisions of Section VIII.C.4. hereof. XIV. CANCEI J ,ATION FlY I,ESSF, F. 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 of a permanent injunction in any way preventing or restnf~ning the use of the A/rport or any part thereof for an'port 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 ninety (90) days due to any law or any order, role or regulation of any appropriate governmental 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 Government, or any authorized agency thereof, of the maintenance and operation of said dmport 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. MIRCETJ,ANEOIIS PROVISIONS A. ENTIRI~ 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 coveting the subject matter hereof. Any change or modification hereof shall be in writing signed by both parties. AGRWeyerLease04,DOC - Page 17 B. BINDING F~FFRCT All covenants, stipulations and agreements herein shall extend to, bind and inure to the benefit of the legal representatives, successors and assigns of the respective parties hereto. C. SF~VFRAI:IF[ JT¥. Ifa provision hereof shall be fmally 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. NOTICF, Any notice given by one party to the other in connection with this Lease Agreement shall be in writing and shall be sent by certified mail, return receipt requested, with postage fees prepaid or via facsimile as follows: 1. If to Lessor, addressed to: City Manager City of Denton 215 E. McKinney Street Denton, Texas 76201 Fax No.940.349.8596 2. If to Lessee, addressed to: The Doucglas C. Weyer Living Trust, Dated January 12, 1995 Douglas C. Weyer, Trustee Post Office Box 1322 Lake Dallas, Texas 75065 Phone 940.497.6126 E. FII~ADING,q. 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. GOVI~RN1NG I,AW AND VF. NI IF. 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 WAIVF. R 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 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 parties have executed this Lease Agreement as of the AGR Weyer Lease 04 DOC - Page 18 Effective date first above written. CITY OF DENTON, TEXAS, LESSOR MICHAEL A. ~N~Lr[/F,~AGER ATTEST: JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY BY: ~ THE WEYER LIVING TRUST, Dougla~(~. Weyer, Trustee AGRWeyerLease04,DOC - page 19 ACKNOWLEDGMENTS THE STATE OF TEXAS § COUNTY OF DENTON § This instrument was acknowledged before me on the /~)~ay of ~/~~2004, by Michael A. Conduff, City Manager of the City of Denton, Texas, on behalf of said municipahty. ,JAN[ £. RICHARDSON My Commission Expires June 27, 2005 N~TARY PUBLIC, STATE OF TEXAS THE STATE OF TEXAS § COUNTY OF DENTON § This instrument was acknowledged before me on the -~ day of ~b'¢¢WJcve~., 2004 by The Weyer Living Trust, dated January 12, 1995 Douglas C. Weyer, Trustee on behalf of said trust. NOTARY PUBLIC STATE OF TEXAS NOTARY PUBLIC State of Texas AGRWeyerLease04.DOC - Page 20 LOT 127 - "1 %..