2004-381S:\Our Documents\Ordinances\04\Beacon Air Airport Lease Ordinance.doc
O INANCENO. /
AN ORDINANCE APPROVING A COMMERCIAL OPERATOR AIRPORT LEASE
AGREEMENT BETWEEN THE CITY OF DENTON, TEXAS AND BEACON AIR
SERVICES (BCON), LLC; 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 Beacon Air Services
(BCON), LLC, 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 '~/~. day of ~t~f/~/77~(.~ ,2004.
EULINE BROCK, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM:
BY: if ~
Beacon Air Service LLC Lease 11-18-04.DOC
AIRPORT LEASE AGREEMENT
COMMERCIAL OPERATOR
This Lease Agreement is made and executed to be effective as of the Seventh day of
December, 2004 (the "Effective Date") at Denton, Texas, by and between the City of
Denton, Texas, a municipal corporation, hereinafter referred to as "Lessor", and Beacon Air
Services (BCON) LLC, a Texas corporation, 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
mainta'm 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. CONDITTONR OF I,l~Agl~ AGRI~I~MFNT
NOTWITHSTANDING ANY LANGUAGE TO THE CONTRARY HEREINAFTER
CONTAINED, THE LANGUAGE IN PARAGRAPHS A THROUGH D OF THIS
SECTION SHALL BE BIND1NG.
A. PRINClPI,Eg OF OPF, RATIONR. 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 fa'n:, equal and not unjustly discriminatory basis
to all users thereof; and
2. To charge fair, reasonable and not unjustly discriminatory prices for each unit
or service; provided, that Lessee may be allowed to make reasonable and
nondiscriminatory discounts, rebates, or other similar types of price reductions
to volume purchasers.
B. NON-D[qCRIMINATIC}N: 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 from 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 Tire VI of the Civil Rights Act of 1964, as said Regulations may
be amended.
C. RIGHT OF IND1VIDIJAI,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, firm or corporation operating aireraft on the Airport from performing
any services on its own aircraft with its own regular employees (including, but not limited
to, maintenance and repair) that it may choose to perform.
D. NION-EXCIJJSlVF. RIGHT. R 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. PIll:II,lC 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 mainta'm 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 permitt'mg to be erected, any building or other
structure on or adjacent to the Airport which, in the opinion of Lessor, would
limit the usefulness or safety of the Airport or constitute a hazard to aircraft or
to aircraft navigation. The hangar/office/shop complex as currently proposed
as provided in Section II.D. does not violate this provision.
5. This Lease Agreement shall be subordinate to the provisions of any existing or
Beacon Air Service LLC Lease 11-18-04.DOC Page 2
future agreement between Lessor and the United States or agency thereof,
relative to the operation or maintenance of the Airport.
H. T,~As~D pR~MIs~s
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 Ill, the following described land situated
in Denton County, Texas:
A. I.AND. A tract of land, being approximately 360 feet by 180 feet or 1.4876 acres,
drawn and outlined on Attachment "A", and legally described in Attachment "B' as Parcel
1, 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 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 this
Agreement, in which case it will have no further force and effect. The approved legal
description will be attached to this Agreement as Attachment "B".
B. I1VIPROVV. MFNTS PROVIDFD FlY I,ESSOR: NONE: There will be no
improvements provided by Lessor, except as set forth in Article II.E. "Access to Utilities"
below.
The term "Lessor improvements" shall mean those things on or adjacent to the
Leased Premises belonging to, constructed by, or to be constructed by the Lessor. Unless
otherwise noted herein, all Lessor improvements are and will remain the property of Lessor.
All Lessor improvements must be described in detail above, or above referenced and
attached to this Agreement in an exhibit approved by Lessor.
D. IMPROVEMENTS PROVIDED FlY I,ESSEE On the Leased Premises, Lessee
shall construct two hangar/office facilities not less than 10,000 square feet each with
taxiway access and appropriate culverts or dra'mage as required by City ordinances in the
utility right of way south and north of the proposed developments as well as other
improvements as determined necessary by City ordinances. A minimum of 10 percent of
total area "under roof' will be developed as office or shop space.
Beacon Air Service LLC Lease 11-18-04.DOC Page 3
Lessee shall also construct appropriate culverts or drainage as required by City
ord'mances in the utility right of way south and north of the proposed hangar as well as other
improvements as determined necessary by City ordinances (All above described
improvements to be constructed by Lessee are called the "Lessee's Improvements").
Construction of Lessee's Improvements shall be commenced no later than 270 days and
completed no later than 720 days alier the Effective Date (the "Construction Period").
Construction of Lessee's Improvements are considered commenced upon issuance of a
building permit and construction of any portion of the hangar/office/shop complex.
Construction of Lessee's Improvements are considered complete upon the issuance of a
Certificate of Occupancy for the entire hangar/office/shop complex, drainage and utility
improvements are completed.
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 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.
E. EASF[MFNTS Lessor and Lessee by mutual agreement may establish, on the
Leased Premises, easements for public access on roads and taxiways.
F. ACCESS TO IITIIJTIES. 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 are sufficient for usual and customary service on the Leased
Premises.
III. TERM
The term of this Lease Agreement shall be for a period of thirty (30) years, com-
. th . · ~th
mencmg on the 7 day of December, 2004 and contmumg through the 6 day of December
of 2034, unless earlier terminated under the provisions of the Lease Agreement (the "Lease
Term"). Lessee has the option to renew for two (2) additional ten (10) year terms. In order
to exercise the first option Lessee must provide written notice to Lessor of its intent to
exercise the first 10 year option no later than 180 day before the expiration of the 30 year
primary term. To exercise the second option such written notice must be provided no later
than 180 days before the expiration of the first 10 year option term. The rental and terms to
be negotiated for the option terms shall be reasonable and consistent with the then value,
rentals and terms of similar property on the Airport.
Beacon Air Service LLC Lease 11-18 04.DOC Page 4
IV. PAYMRNIT~q; RENTAI,~q ANTD I~q
Lessee covenants and agrees to pay Lessor, as consideration for this Lease Agreement,
the following payments, rentals and fees:
A. LAND AND RENTAl,. Shall be due and payable to Lessor in the sum of
$0.17 per square foot or $11,016 per year (the "Original Rent"), payable in twelve (12)
equal monthly installments in the sum of Nine Hundred and Eighteen Dollars ($918) in
advance, on or before the 1 st day of each and every month during the term of this Lease
Agreement. Lessee has the option to pay annual rentals and fees in whole on or before the
1st day of October, at the beginning of the City's fiscal year, each and every year of this
Lease Agreement.
Notwithstanding the foregoing, the annual rental will be reduced by the current lease rate
per square foot, as adjusted by the CPI-U referenced in Section IV.C., times the number of
square feet comprising all easements established in accordance with Article 1I (D).
B. t,F, ssor 1MPROV~MF. NT.q R~NTAT,~q. NONE:
improvements on the Leased Premises.
There are no Lessor
C. PAYMENT, PF, NAI,TY; ADJIIflTMENTS. All payments due Lessor from Lessee
shall be made to Lessor at the offices of the Finance Department of the City of Denton,
Customer Service Division, 601 West 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 percent (5%) penalty will be due as of the 16th. If payments are not received
by the first of the subsequent month, an additional penalty of one percent (1%) of the unpaid
rental/fee amount 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 end of each one year period during the Lease
Term on the basis of the proportion that the then current United States Consumer Price
Index for all urban consumers (CPI-U) for the Dallas-Fort Worth Bureau of Labor Statistics
bears to the previous odd month 2004 index (September), which was 179.7 (1982-84 =
100). Each rental adjustment, if any, shall occur on the 1st day of December, beginning
2006, and every other year thereafter on such date.
The adjustments in the yearly rent shall be determined by multiplying the Original
Rent by a fraction, the numerator of which is the index number for the last month prior to
the adjustment, and the denominator of which is the index number applicable at the
execution of this Lease Agreement. If the product of this multiplication is greater than
the Original Rent, Lessee shall pay this greater amount as the yearly rent until the time of
the next rental adjustment as called for in this section. If the product of this multiplication
is less than the Original Rent there shall be no adjustment in the annual rent at that time,
and Lessee shall pay the previous year's annual rent until the time of the next rental
adjustment as called for in this section. In 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
Beacon Air Service LLC Lease 11-18-04.DOC Page 5
two-year period shall not exceed the annual rental payment calculated for the previous
CPI adjustment by more than twenty percent (20%) percent.
If the consumer price index for all urban consumers (CPI-U) for the Dallas-Fort
Worth geographical region, as compiled by the U.S. Department of Labor, Bureau of Labor
Statistics, is discontinued during 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 Term, the remaining rental adjustments called for in this section shall be made using
the statistics of the Bureau of Labor Statistics of the United States Department of Labor that
are most nearly comparable to the CPI-U applicable to the Dallas-Fort Worth geographical
region. If the Bureau of Labor Statistics of the United States Department of Labor ceases to
exist or ceases to publish statistics concerning the purchasing power of the consumer dollar
during the Lease Term, the remaining rental adjustments called for in this section shall be
made using the most nearly comparable statistics published by a recognized financial
authority selected by Lessor.
V. RIGHTS AND OBI JGATIONS OF l
A. l J~qF. oF I,I~A~qF.D PRF. MI.ql~q Lessee is granted the non-exclusive privilege to
engage in owner/operator activities providing the following aviation services:
1. Hangar and Office ~qpace l.easing, Lessee is granted the non-exclusive right to
rent hangar and office space.
2. General Aireraf[ Maintenance. Lessee is granted the non-exclusive right to
conduct airframe and power plant maintenance services.
3. Aimrafl Management Services Lessee is granted the right to manage aircraft
and flight operations for third parties.
4. Aircraft ~qales and Brokerage. Lessee is granted the non-exclusive right to
engage in the sale and/or brokering of aircraft.
5. Tie-Down Services. 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,
commercial, retail or industrial activities having to do with or related to airports and avia-
tion. Except as specifically authorized in this Lease Agreement, no person, business or
corporation may operate a commercial, retail or industrial business upon the Leased
Beacon Air Service LLC Lease 11-18-04.DOC- Page 6
Premises or upon the Airport without a lease or license fi.om Lessor authorizing such
commercial, retail or industrial activity. The Lessor shall not unreasonably withhold
authorization to conduct aeronautical or related services.
B. ~qTANDARDS. Lessee shall meet or exceed the following standards:
Addre~a 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. list. Lessee shall file with the Airport Manager and keep current a list of its
tenants and sublessees.
~. Lessee shall contractually require its employees and sublessees (and
sublessee's invitees) to abide by the terms of this Lease Agreement. Lessee
shall promptly enfome its contractual rights in the event of a default of such
covenants.
l ltilities: Taxes and Fens Lessee shall meet all expenses and payments in
connection with the use of the Leased Premises and the rights and privileges
herein granted, including the timely payment of utilities, taxes, permit fees,
license fees and assessments lawfully levied or assessed.
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 rules, regulations 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.
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, free fi:om 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 fi:om 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.
painting of Rnildlngg, 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
Beacon Air Service LLC Lease 11-18-04.DOC- Page 7
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 required by Lessor, within the one (1) year period shall
constitute Lessee's default under this Lease Agreement.
I lnanthnHzed u~e nf I ~asexl Premi~e~. 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, apathnent house, storage of recreational
vehicles, automobiles, or marine vehicles, or for industrial, commercial, retail,
or other purposes, except as authorized herein.
o
D~w~ngs. It is expressly understood and agreed that no dwelling or domicile
may be built, moved to or established on or within the Leased Premises nor
may lessee, its tenants, employees, invitees, or guests be permitted to reside or
remain as a resident on or within the Leased Premises or other Airport
premises.. Lessee may have a pilot lounge, including restroom and shower
facilities for use by flight crew and passengers.
10.
Quit Possession. 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. Indemnity. 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 statutory law, or based in whole or in part upon the negligent
or intentional acts or omissions of Lessee, its officers, agents employees,
invitees or other persons. Lessee must at all times exercise reasonable
precautions on behalf of, and be solely responsible for, the safety of its
officers, employees, agents, customers, visitors, invitees, licensees and other
persons, as well as their 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,
Beacon Air Service LLC Lease 11-18-04.DOC- Pa~e 8
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 fi:om all premise defects or
conditions.
TglE I~ERSSOR AND THEE I.ERSSEER EXPRERSSI,Y INTEND THIS
INDEMNITYPROVISION TO REQIT1RE T,ERSSERER TO INDERMNIFY
AND PROTERCT THEE I,ESSOR FROM THE CONSEQIIENCERS OF THEE
I.ESSOR'S OWN NERGI,IGFNCER WHII,ER I,ERSSOR is PARTICIPATING
IN THIS I,ERASER AGRERERMENT WI-lESSER THAT NEGI,IGENCER IS A
CONC, TTRRING CAUSER OF THEE INJIJR¥; DEATH; OR DAMAGER
NOTWITHSTANDING THEE TERRMS OF THE PRERCF. DING
SENTENCERS: THIS INDERIV[NITY PROVISION DOES NOT APPI,¥ TO
ANY CI~AIM; I.OSS: DAMAGER: CAUSE OF ACTION; SUIT AND
I,IAFIIIJTY WHERRER THEE INJIIR¥; DERATH; OR DAMAGE RESIII.TS
FROM THEE SOl.ER NERGI,IGFNCER OF THEE T,ERSSOR Or ANY OF ITS
EMPI,OVERRS: CONTR ACTORS; OR AGENTS; 1 INMIXED WITH THEE
FAUI,T OF ANY OTHER PERRSON OR ENTITY
12. Chemicals. Lessee agrees to properly store, collect and dispose of all chemicals
and chemical residues; to properly store, confine, collect and dispose of all
paint, including paint spray in the atmosphere, and paint products; and to
comply with all Local, State and Federal regulations governing the storage,
handling or disposal of such chemicals and paints. Further, the 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. Hazardo, m Activltie~, Should Lessee violate any law, rule, restriction or
regulation of the City of Denton or the Federal Aviation Administration, or any
other regulatory authority, or should the Lessee engage in or permit other
persons or agents to engage in activities which could produce hazards or
obstruction to ak navigation, obstructions to visibility or interference with any
aircraft navigational aid station or device, whether akbome 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 fight to demand that
corrective action, as required, be commenced immediately to restore the Leased
Premises into conformance with the particular law, role or aeronautical
Beacon Air Service LLC Lease 11-18-04.DOC- Page 9
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 material default by Lessee authorizing Lessor, at its sole
option and discretion, to immediately terminate and cancel this Lease
Agreement.
C. SIGNS No signs, posters, or other similar devices ("Signage") shall be placed on
the exterior of the Lease Improvements or on any portion of the Leased Premises or Au-port
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 from the Leased Premises by Lessee immediately upon receipt of
instructions for removal of same from 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. Lessee shall be permitted the right to
place two wall signs, no greater than thirty-two square feet each, identifying the commercial
hangar operation. All signage shall comply with all applicable ordinances including the
City of Denton sign ordinance."
D. I~NITRY. 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. CIDVFNANTS I:tY 1 .RS~qOR
Lessor hereby agrees as follows:
A. PEACI~F111. FJqJOYMF~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 Premises and all rights and privileges herein
granted.
B. COMPIJANCI~. Lessor warrants and represents that in the establishment,
construction and operation of the Airport, that Lessor has heretofore and at this time is
Beacon Air Service LLC Lease 11-18-04.DOC- Page 10
complying with all existing roles, 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 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. ~qPI~,CIAI, 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.
RI INWAYS AND TAX'IWAYS Because of the present thirty thousand (30,000)
pound continuous use weight bearing capacity of the taxiway of Lockheed, Lessee herein
agrees to limit all aeronautical activity incluffmg landing, take-off and taxiing, to aircraft
having an actual weight, including the weight of its fuel, of thirty thousand (30,000) 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 .~ASEI-IOI ,D IMPROVF~MENTS
A. RF~QI IIREMFNTS: Before commencing the construction of any improvements
on the Leased Premises including Lessee's Improvements (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 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;
Beacon Air Service LLC Lease 11-18-04.D0C- Page 11
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
evidence acceptable to Lessor evidencing the total cost to constmct the Lease Improvements
("Cost to Construct Lease Improvements").
B. ADDITIONIAI, CON~qTRIICTIONI OR IMPROVEMFNT~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. OWNERSHIP OF IMPROVF. MF/NTS: 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. Removal nf ghfilding~. No building or permanent fixture may be removed
from the Leased Premises.
A~nmption. 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 Complete I.essee'~ Improvements. 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.D. of
this Lease Agreement.
Cancellation or Termination. Should this Lease Agreement be canceled 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
Beacon Air Service LLC Lease 11-18-04.D0C- Page 12
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
termination (the "Purchase Price"). Should the Denton County Central
Appraisal District not determine a separate value for the Lease Improvements,
or should such separate valuation be older than two years, then the Purchase
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 cancdlation 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%.
However, if Lessee provides written notice to Lessor within said 30 day cure
period that it is impossible to cure such default within said time period, then
the Lessor may consent to an extension of such time to cure, which consent
will not be unreasonably withheld.
IX. ,RI IRR OGATION OF MOR TGA GFF
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 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 purchased with the borrowed funds, and those
improvements pledged to secure the refinancing of the improvements.
X. RIGHT OF EASEMENT
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 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,R`RIGNMENIT OF
Lessee expressly covenants that it will not assign this Lease Agreement, convey more
Beacon Air Service LLC Lease 11-18-04.DOC Page 13
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. INgl JR ANIC,]?
A. r F. QI Till FD 1NS111~ ANCE: Regardless of the activities contemplated under this
Lease Agreement, Lessee shall maintain continuously in effect at all times during the term
of this agreement, at Lessee's sole expense, the following minimum insurance coverages:
1. 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 and contractual liability AND where
exposure exists, coverage for: products/completed operations; explosion, collapse
and underground property damage.
2. All risk property insurance on a replacement cost basis covering loss or damage to
all facilities used by the Lessee, either as a part of this agreement or erected by the
Lessee subsequent to this agreement. Under no circumstances shall the Lessor be
liable for any damages to fixtures, merchandise or other personal property of the
Lessee or its tenants.
3. Business Automobile Liability to include coverage for 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. COVERAGE~q: In addition to the above referenced coverages, the
following insurance is required if the activity or exposure exists or is contemplated:
1. Aircraft Fuel/Oil Storage and Dispensing - Comprehensive Commercial (Public)
General Liability shall include coverage or separate coverage shall be provided for
Beacon Air Service LLC Lease 11-18-04.DOC- Pa~e 14
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 Liability
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.
Aircraft 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. CDVF. RAG~ RV, QI IIRF. MF·NTS: All insurance coverages shall comply with the
following requirements:
All liability policies shall name the City of Denton, and its officers and employees
as an additional named insured and 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.
Beacon Air Service LLC Lease 11-18-04.DOC Page 15
Required insurance naming the City as an additional insured must be primary
insurance and not contributing with any other insurance available to the City
whether fi.om 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 right
to, with 60 days notice, adjust or increase the liability insurance amounts required
of the Lessee, and to require any additional rider, provisions, or certificates of
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.
XIII. CANCEl .I .ATIONI ltY 1 .F[~qROR
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,
or Lessee shall be divested of its estate herein by other operation of law; or Lessee shall
fail to perform, keep and observe any of the terms, covenants, or conditions herein
contained, or on its part to be performed, the Lessor may give Lessee written notice to
correct such condition or cure such default and, if any condition or default shall continue
for thirty (30) days after the receipt of such notice by Lessee, then Lessor may terminate
this Lease Agreement by written notice to Lessee. However, if Lessee provides written
notice to Lessor within said 30 day cure period that it is impossible to cure such default
within said time period, then the Lessor may consent to an extension of such time to cure,
which consent will not be unreasonably withheld. In the event of default, Lessor has the
right to purchase any or all of the Lease Improvements under the provisions of Section
VIII.C.4. hereof.
XIV. CAN!C.F,1,1 ,ATIC~NI RY 1
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 restraining the use of the Airport
or any part thereof for airport purposes; (2) the breach by Lessor of any of the covenants or
Beacon Air Service LLC Lease 11-18-04.DOC- Page 16
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, rule 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
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
proposes, their use being only limited by such laws and ordinances as may be applicable at
that time.
Should Lessor close the Airport and relocate the Airport to another location during the
primary term of this Lease Agreement, Lessee shall have the right to relocate its facilities to
the new airport at a suitable location under the same or similar terms of this Lease
Agreement. The cost of relocation of Lessee's facilities will be shared by Lessor and Lessee
in proportion to the number of years remaining on the primary term of this Lease
Agreement. In this regard Lessor will be responsible for 1/30 of the such costs for every
year remaining on the primary term.
XV. MISCEI J .ANEOI I.q PROVISIONS
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. R1ND1NG EFFECT, 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. SEVER Alqll JTY. 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 and shall be sent by certified mail, return receipt
requested, with postage fees prepaid or via facsimile as follows:
1. Ifto Lessor, addressedto:
Beacon Air Service LLC Lease 11-18-04.DOC- Page 17
City Manager
City of Denton
215 E. McKinney Street
Denton, Texas 76201
Fax No.940.349.8596
2. If to Lessee, addressed to:
Mr. Donald Wayne Back
President
Beacon Air Services (BCON) LLC
2216 Lookout Lane
Denton, Texas 762070
Fax No. 940-591-0888
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 VFNI IE, This Lease Agreement is to be construed in
accordance with the laws of the State of Texas and is fully performable in Denton County,
Texas. Exclusive venue for any lawsuit to enforce the terms or conditions of this Lease
Agreement shall be a court of competent jurisdiction in Denton County, Texas.
G. NO WAIVER. No waiver by Lessor or Lessee of any default or breach of
covenant or term of this Lease Agreement may be treated as a waiver of any subsequent
default or breach of the same or any other covenant or term of this Lease Agreement.
H. NO AGENCY. During all times that this Lease Agreement is in effect, the parties
agree that Lessee is and shall not be deemed an agent or employee of the Lessor.
I. FORCE MAJF, IIRF.. None of the Parties shall be in default or otherwise liable for
any delay in or failure of performance under this Lease Agreement if such delay or failure
arises by any reason beyond their reasonable control, including any act of God, any acts of
the common enemy or terrorism, the elements, earthquakes, floods, fires, epidemics, riots,
failures or delay in transportation or communications. However, lack of funds shall not be
deemed to be a reason beyond a Party's reasonable control. The Parties will promptly inform
and consult with each other as to any of the above causes, which in their judgment may or
could be the cause ora delay in the performance of this Lease Agreement.
IN WITNESS WHEREOF, the parties have executed this Lease Agreement as of the
Effective Date first above written.
CITY OF DENTON, TEXAS, LESSOR
Beacon Air Service LLC Lease 11-18-04.DOC- Page 18
BY'
~AGER
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM:
BEACON A~SERVICES(BCON)LLC
DONALD WAYNE BACK, PRESIDENT
Beacon Air Service LLC Lease 11-18-04.D0C- Page 19
ACKNOWLEDGMENTS
THE STATE OF TEXAS §
COUNTY OF DENTON §
This instrument was acknowledged beforemeonthe ff day of: _~/d~../~2. 004, by
Michael A. Conduff, City Manager of the City o,~Denton, Texas, on behalf of said
municipality.
11~%..'~% ANN r-0RSWI~E {1 NOTA~t'~PUBL~, S/I~ATE 01~ TEXAS
II~.i'~.[~ MY COMMISSION EXPIRES I //
THE STATE OF TEXAS §
COUNTY OF DENTON §
This instrument was acknowledged before me on the / (~ day of ¢0YeA44 ~t', 2004 by
Donald Wayne Back, President, Beacon Air Services (BCON) LLC, a Texas corporation,
on behalf of said corporation.
NOTARY PUBLIC, STATE OF TEXAS
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