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2002-044FILE REFERENCE FORM 2002-044 X Additional File Exists Additional File Contains Records Not Public, According to the Public Records Act Other r~1Lr: ~ Date Initials Assignment of Lease to US Aviation Group LLC - Ordinance No. 2006-021 01/17/06 JR Assignment of Lease to Sykes-Vaughan Investments LLC - Ordinance No. 2008-229 09/23/08 J R Termination of Lease with Sykes-Vaughan Investments (LJS Aviation Group) & Execution of Fixed Base Operator Airport Lease Agreement with (LJS Aviation Group) -Ordinance No. 2009-018 01/06/09 )R S:\Our Documents\Ordinances\02\US Flight Academy.doc AN ORDINANCE APPROVING AN AIRPORT LEASE AGREEMENT BETWEEN THE CITY OF DENTON AND US FLIGHT ACADEMY FOR USE OF A PORTION OF THE DENTON MUNICIPAL AIRPORT FOR COMMERCIAL HANGAR/OFFICE AND RELATED SERVICES; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, The Denton Airport Advisory Board has recommended the approval of the herein described Airport Lease Agreement; and WHEREAS, the City Council of the City of Denton, Texas hereby finds that said Airport Lease Agreement is in the public interest; NOW, THEREFOR: THE COUNCIL OF THE CITY OF DENTON HEREBY ORDA1NS: SECTION 1. The City Manager is hereby authorized to execute an Airport Lease Agreement between the City of Denton and US Flight Academy in substantially the form of the Airport Lease Agreement which is attached to and made a part of this ordinance for all purposes, for the purpose of providing commercial hangar/office, flight instruction, aircraft maintenance related services at the Denton Municipal Airport. SECTION 2. This ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the /e~ day of ( '-~~~,2002. EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY AP~V~; A~S TO ~E~AL F;~M: AIRPORT LEASE AGREEMENT COMMERCIAL OPERATOR THE STATE OF TEXAS§ KNOW ALL MEN BY THESE PRESENTS: COUNTY OF DENTON§ This lease is made and executed this /~P~ day of February, 2002, at Denton, Texas, by and between.the City of Denton, Texas, a municipal corporation, hereinatter referred to as "Lessor", and U.S. Flight Academy, Limited Liability Company, having principal offices at 2020 Skylane, Denton, Texas 76207, hereinafter referred to as "Lessee". WITNESSETH: WHEREAS, Lessor now owns, contxols and operates the Municipal Airport (Airport) in the City of Denton, County of Denton, State of Texas; and WHEREAS, Lessee desires to lease certain premises on said 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 AGRRF, MF, NT NOTWITHSTANDING ANY LANGUAGE TO THE CONTRARY HEREINAFTER CONTAINED, THE LANGUAGE IN PARAGRAPHS A THROUGH D OF THIS SECTION SHALL BE BINDING. A. PR1NCJPTJ~..q OF OPRRATIONS. 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 milt 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-DIgC, RIMIlqATIONI: Lessee, for himself, his personal representatives, successors and interests, 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 othenvise subjected to discrimination in the use of said facilities; In the construction of any improvements on, over, or under such land and the furnishings 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; 3. 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, Nondiscrimination in Federally assisted · . · programs of the Department of Transportation - Effectual of Title VI of the Civil Rights Act of 1964, as said Regulations may be amended. C. RIGHT OF INDIVIDIIAT..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 from performing any services on its own aircraft with its own regular employees (including, but not limited to, maintenance and repair) that it may choose to perform. D. NON-F. XCI.II.qlVF. RIGHT. It is understood and agreed that nothing herein contained shall be construed to grant or authorize the granting of an exclusive fight within the meaning of Title 49 U.S.C. Appendix §1349. E. PIIBIJI2. ARRAS_ Lessor reserves the fight to further develop or improve the landing area of the ah'port as it sees fit, regardless of the desires or views of Lessee, and without interference or hindrance. Lessor shall be obligated to maintain and keep in good repair the landing area of the airport and all publicly owned facilities of the airport, together with the right to direct and control all activities of Lessee in this regard. During time of war or national emergency, Lessor shall have the right to lease the landing area or any part thereof to the United States Government for military or naval use, and, if such lease is executed, the provisions of this instrument insofar as they are inconsistent with the pmvisions of the lease to the Government, shall be suspended. Lessor reserves the right to take any action it considers necessary to protect the aerial approaches of the airport against obstruction, together with the right to prevent Lessee from erecting, or permitting to be erected, any building or other structure on or adjacent to the airport which, in the opinion of Lessor, would limit the usefulness or safety of the airport or constitute a hazard to aircraft or to aircraft navigation. o This Lease shall be subordinate to the provisions of any existing or future agreement between Lessor and the United States or agency thereof, relative to the operation or maintenance of the airport. U.S, FLIGHT ACADEMY L~AS~ AGREEMENT 2002.DOC - Pa~e 2 ~. T.I~,ARF. D PRI~,MTR~,R Lessor, for and in consideration of the covenants and agreements herein contained, to be kept by Lessee, does hereby demise and lease unto Lessee, and Lessee does hereby hire and take from Lessor, the following described land situated in Denton County, Texas: A. Land. A tract of land, being approximately 34,000 square feet, or 0.78 acres, drawn and outlined on Attachment "A", and legally described in Attachment "B," such attachments being incorporated.herein by reference: During the construction of the proposed facility, Lessee shall have accessto, the adjacent lot (east) for staging of construction equipment, material and a construction trailer. Lessee shall remove all material, equipment, construction trailer and any other approved property with/n thirty (30) days of the receipt of a Certificate of Occupancy. Unless approved by Lessor, Lessee shall not have access to said lot for more than a total of 365 days. Together with the fight of ingress and egress to said property; 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 Lcssee's employees, passengers, patrons and invitees. For purposes of this agreement, the term "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. B. IMPROVF, MF, NT,q PROVIDF,1-) BY I,R,qgOR: NONE: There will be no improvements provided by Lessor, except as set forth in Article II.E. "Access to Utilities" below. For the purpose of this Agreement, the term "Lessor improvements" shall mean those things on or adjacent to the Premises belonging to, constructed by, or to be constructed by the Lessor, which enhance or increase, the value or quality of the leased land or property. Unless otherwise noted herein, all Lessor improvements are and will remain the property of Lessor. All Lessor improvements must be described in detail above, or above referenced and attached to this Agreement in an exhibit approved by Lessor. C.. IMPROVF, MFZ, NT,q PROVIDF, DRY T,R.q,qF, l~. On described lot, Lessee shall construct a hangar/office facility not less than 12,000 square feet with taxiway access and appropriate culverts or drainage as required by City ordinances in the utility right of way south and north of the proposed hangar as well as other improvements as determined necessary by City ordinances. Said improvements shall be completed not less than 365 days from the date of this agreement. D. F,A,ql~Jv~NT.q. Lessor and Lessee by mutual agreement may establish, on the leased premises, easements for public access on roads and taxiways. E. AC, C,F,.R,q TO IITII,ITI'E,,q. Lessor represents that there are water, sewer and 3-phase electricity lines within three hundred feet (300') of the leased premises available to "tap-in" by Lessee, and that the same are sufficient for usual and customary service on the leased premises. U.S. FLIGHT ACADEMY LEASE AGREEMENT 2002.DOC - Page 3 ~. TFRM The term of this Agreement shall be for a period of thirty (30) years, commencing on the 1st day of March, 2002, and continuing through the last day of February of 2032, unless earlier terminated under the provisions of the Agreement. Any attempt by Lessee to renegotiate this Lease shall be in writing addressed to the City Manager or his designee at least one hundred eighty (180) days before the expiration of the stated term of this lease, 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 ~alue, rentals and terms of similar property on the airport. I~. PAYMI~,NTR; RRNTAI.R AND FF~,R Lessee covenants and agrees to pay Lessor, as consideration for this lease, the following payments, rentals and fees: A. I.AND RF. NTAL shall be due and payable in the sum of $0.15 per square foot or Five Thousand One Hundred Dollars ($5,100.00) per year, payable in twelve (12) equal monthly installments in the sum of Four Hundred Twenty-Five Dollars ($425.00) in advance, on or before the 1st day of each and every month during the term of this 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. Notwithstanding the foregoing, the annual lease rental to 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 II(D). B. I.F. RROR IMPROVF. ME. NTR R~.NTAI..q. NONE: There are no Lessor improvements on the leased premises. C. pAYMF, NT: Pp. NAT.TY: AD.11IRTM~NTR. All payments due Lessor from Lessee shall be made to Lessor at the offices of the Finance Department of the City of Denton, Customer Sen, ice Division, 601 West Hickory, Denton, Texas, unless otherwise designated in writing by the Lessor. If payments are not received on or before the 15th, 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 yearly rental for land and improvements herein leased shall be readjusted at the end of each one year period during the t,mt of this lease 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 2001 index, which was 168.9 (1982-84 = 100). The original land rental amount is based upon the formulae set forth in Section IV.A. for the land herein leased. Each rental adjustment, if any, shall occur on the 1st day of April, beginning 2004, and every other year thereafter on such date. However, in no event shall any of the rental adjustments exceed twenty percent (20%) of the original rental. Each rental adjustment, if any, shall occur on the first day of April 2004, and every other year thereafter. U,S. FLIGHT ACADEMY L~ASE AGREEMENT 2002.DOC - Page 4 The adjustments in the yearly rent shall be determined by multiplying the minimum yearly rent as set forth in Section IV.A. by a t~action, the numerator of which is the index number for the last month prior to the adjustment, and the denominator of wlfich is the index number applicable.attheexeeution of this lease. If the product of.this multiplication is greater than the minimum yearly rent as set forth in Section IV.A, 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 minimum yearly rent of as set forth in Section IV.A, there shall be .no adjustment in the annual rent at that time, and Lessee shall pay the previous year's .... annual rent.until, the t'une of the next rental adjustment as called for in this section. In no event · ~ shall any rental adjustment called' for in this section result in an annual rent less than the previous year's annual rent. The adjustment'shall be limited so that the annual rental payment determined for any given two-year period shall not exceed the annual rental payment calculated for the previous CPI adjustment by more than twenty percent (20%) percent. If the consumer price index for all urban consumers (CPI-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 term of this lease, the remaining rental adjustments called for in this section shall be made using the formula set forth in Subsection (a) above, but 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 term of this lease, 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 Depathnent 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 term of this lease, the remaining rental adjustments called for in this section shall be made using the most nearly comparable statistics published by a recognized financial authority selected by Lessor. V. RTGI-tT,q AND OI~IJGATION~q A. lISle. Ole I,F.A~qF, D PRFMI,q~,~q. Lessee is granted the non-exclusive privilege to engage in or provide the following: 1. Flight ln,qtmction_ Lessee is granted the non-exclnsive fight to operate a llight instruction operation. 2. Aircraft Rental. Lessee is granted the non-exclusive right to rent aircraft. 3. Airerat~ Repair Lessee is granted the right to perform aircraft maintenance on Lessees and General Aviation aircraft upon the leased premises. 4. FAA Te~t Adrnini,qtration_ Lessee is granted the fight to provide testing services. 5. Retail Pilnt ,qhnp Lessee is granted the right to operate a retail pilot shop. U.S. FLIGHT ACADEMY LEASE AGREEMENT 2002.DOC - Page 5 6. Flight .qimulatlon ~qervic. e.~ Lessee is granted the fight to offer flight simulation services. 7. Charter_F_lights. Lessee is granted.to operate a charter flight business. 8. Tie-Down ~qervieea. Lessee is granted the fight to charge for tie-down services on Lessee's property. - 9..,..~ Hangar ~qpaee. 1 .e.n nlng Lessee is granted the fight to rent hangar space. Lessee, his tenants and sublessees shall not be authorized to conduct any services not specifically listed in this agreement. The use of the leased premises of Lessee, his tenants or sublessees shall be limited to only those private, commercial, retail or industrial activities having to do with or related to airports and aviation. No person, business or corporation may operate a commercial, retail or industrial business upon the premises of Lessee 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. ~qTANDARD~q Lessee shall meet or exceed the following standards: 1. Address. Lessee shall file with the Airport Manager and keep current his mailing addresses, telephone numbers and contacts where he can be reached in an emergency. 2. list. Lessee shall file with the Airport Manager and keep current a list of his tenants and sublessees. Conrhmt. Lessee shall contractually require his employees and sublessees (and sublessee's invitees) to abide by the terms of this agreement. Lessee shall promptly enforce his contractual rights in the event of a default of such covenants. l[tilitle% Taxe~ and Fee~q. Lessee shall meet all expenses and payments in connection with the use of the 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. l.aw~. Lessee shall comply with all current and furore 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. ~. Lessee shall be responsible for the maintenance, repair and upkeep of all property, buildings, stnmtures and improvements, including the mowing or elimination of grass and other vegetation on the Premises, and shall keep said Premises neat, clean and in respectable condition, free from any objeefional matter or thing. 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 U.S. FLIG}IT ACADEMY LEASE AGREEMENT 2002.DOC - Page 6 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. 'Painting of lquildings.. During the original term of this Lease 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 premises be reviewed by the Airport Advisory Board for the purpose of determlning whether painting of the .. exteriors of.such buildings, or. hangars is necessary. If the Airport Advisory Board determines painting is necessary, it shall furnish a recommendation to this effect to the City Council. The Council, may, upon the Board's recommendation, require Lessee to repaint said exteriors according to Lessors specifications (to specify color of paint, quality of workmanship and the year and month in which the hangar(s) or building(s) are to be painted, if needed.) Lessee shall complete the painting in accordance with such specifications within one (1) year of receipt of notice from lessor. Lessee agrees to pay all costs and expense involved in the hangar or building painting process. Failure of Lessee to complete the painting required by Lessor's City Council within one (1) year period shall constitute Lessee's default under this Lease. llnanthorize~ use of' ?emi~e~ Lessee may not use any of the leased land or premises for the operation of a motel, hotel, restaurant, private club or bar, apartment house, or for industrial, commercial or retail purposes, except as authorized herein. Dwelling~q. It is expressly understood and agreed that no permanent dwelling or domicile may be built, moved to or established on or within the leased premises nor may lessee, his tenants, invitees, or guests be permitted to reside or remain as a resident on or within the leased premises or other airport premises. 10. QuiLP_maesaiun. Lessee shall quit possession of all premises leased herein at the end of the primary term of this lease or any renewal or extension thereof, and deliver up the premises to Lessor in as good condition as existed when possession was taken by Lessee, reasonable wear and tear excepted. lh l.lald l-larmlena. Lessee shall indemnify and hold harmless Lessor from and against all loss and damages, including death, personal injury, loss of property or other damages, arising or resulting from the operation of Lessee's business in and upon the leased premises. 12. ~. 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. 13. ' ' ' . Should Lessee violate any law, role, restriction or regulation of the City of Denton or the Federal Aviation Administration, or should the Lessee U.S. FLIGHT ACADEMY LEASE AGREEMENT 2002.DOC - Pa~e 7 engage in or p~mdt other persons or agents to engage in activities which could produce hazards or obstruction to air navigation, obstructions to visibility or interference with any aircraft navigational aid station or device, whether airborne or on the ground, then Lessor shall state such violation in writing and deliver written · 'notice to' Lessee or Lessee's agent on the leased premises, or to the person(s) on the leased premises who are causing said violation(s), and upon delivery of such written notice, Lessor shall have the fight to demand that the person(s) responsible for the .,violation(s) cease and desist fi:om 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, rule or aeronautical regulation being violated. Should Lessee, Lessee's agent, or the person(s) responsible for the violation(s) fail to cease and desist fi:om said violation(s) and to immediately commence correcting the violation(s), 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), 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. C. ~qlGN~q During the term of this Agreement, Lessee shall have the right, at its own expense, to place in or on the leased Pmmaises signs identifying Lessee. Said signs shall be of a size, shape and design, and at a location or locations, approved by the Lessor and in conformance with any overall directional graphics or sign pmgram established by Lessor for the Airport. Lessor's approval shall notbe withheld unreasonably. Said signs shall be maintained in good repair · ' throughout the term of this agreement. Notwithstanding any other provision of this agreement, said signs shall remain the property of Lessee. Lessee shall remove, at its expense, all lettering, signs and placards so erected on the premises at the expiration of the term of this Agreement or extensions thereof. VI. COVRNIANT,q 1:1¥ I.F.,qROR Lessor hereby agrees as follows: A. PF. ACF. FIII. F.N. IOYM~.NT. That on payment of 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. COMPl JANCR Lessor warrants and represents that in the establishment, construction and operation of said Denton Municipal 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 said Denton Municipal Airport; Lessor further warrants and represents that at all times during the term hereof, or any renewal or extension of same, that it will continue to comply with the foregoing. U.S. FLIGHT ACADEMY LEASE AGREEMENT 2002.DOC - Page 8 VII. gpRI2TAT, C~ONDTTTONS 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. A. RIINYgVAY,q AND TAXIX~VA¥,q That because of the present sixty thousand (60,000) .pound continuous use weight bearing capacity of the runway and taxiways of the Airport, Lessee herein agrees to limit all aeronautical activity including landing, take-off and taxiing, to aircraft having au actual weight, including the weight of its fuel, of sixty thousand (60,000) pounds or less, until such time that the runway and designated taxiways on the Airport have been improved to handle alrcrait 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 that activity of the Lessee or its agents or subcontractors, end 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 pattem of negligent disregard of the provisions of this section shall be sufficient to cause the immediate termination of this entire Agreement and subject Lessee to liability for any damages to the Airport that might result. VIII. T]~,A.qlqT-I'C~I.D TMPRC)VF, MF, NtT,q A.- RF, QI ITRRTvlF, lxIT,q: Before commencing the construction of any improvements upon the premises, Lessee shall submit: 1. Documentation, specifications, or design work, to be approved by the Lessor, which shall establish that the improvements to be built or constmcted upon the leased premises are in conformance with the overall size, shape, color, quality and design, in appearance and structure of the program estabkished by Lessor on the Airport. 2. All plans and specifications showing the location upon the premises of the proposed construction; 3. The estimated cost of such construction. No construction may commence until Lessor, att'rog by its City Council, has approved the plans and specifications and the location of the improvements, the est'maated costs of such construc- tion and the agreed estimated life of the building or structure. Approval by the City Council shall not be unreasonably withheld; should the Council fail to deny Lessee's plans and specifications within sixty (60) days of submission thereof to the Council, such plans and specifications shall be deemed approved. 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 from time to time as such costs are paid by Lessee, and Lessors City Manager or designee is hereby authorized to endorse upon a copy of this lease 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 agreement. U.S. FLIGHT ACADEMY LEASE AGREEMENT 2002.DOC - Page 9 B. ADDTTTONAI. C~ONLqTRIICTTON OR IMPROVI~,MFNT.q: Lessee is hereby authorized to construct upon the land herein leased, at his own cost and expense, buildings, hangars, and struc- tures, that Lessor and Lessee mutually agree are necessary for use in connection with the operations authorized by this lease, provided however,'before commencing the constxuction of any improve- ments upon'the premises, Lessee shall submit plans and specifications for approval by Lessor as specified in Article VIII.A, above. C: OWNFRRI-llPOFIMPROVFMF. NT.q: All buildings and improvements constructed upon the premises by Lessee shall remain the property of Lessee unless said property becomes the -property of Lessor under the following conditions, terms and provisions: 1. Removal of Fhfildings. No building or permanent fixture may be removed from the premises. Auuemptinn. All buildings and improvements of whatever nature remaining upon the leased premises at the end of the primary term, or any extension thereof, of this lease shall automatically become the property of Lessor absolutely in fee without any cost to Lessor. 3. [luilding life. It is agreed that the life of the building to be constructed by Lessee on the property herein leased is thirty (30) years. Cancellation. Should this lease be cancelled for any reason before the end of the thirty (30)year expected building life, it is especially understood and agreed that Lessor reserves the fight to purchase all buildings, structures and improvements then existing upon the premises by tendering to Lessee one thirtieth (1/30) of the undepre- ciated value of such building for each year remaining on the agreed life of such building. The undepreciated value of all improvements is to be determined by having such improvements appraised by three appraisers, one appointed by Lessor, one appointed by Lessee and one appointed by the two appraisers. IX. RTII~ROGATIC}N OF MORTGAGF. F. A. 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 said leased premises and operate or manage said hangar, structure, building or improvement according to the terms of this 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 term of this lease. 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 fi:om mortgagee, those improvements purchased with the borrowed funds, and those improvements pledged to secure the refinancing of the improvements. X. RIGI-I'T OF I~.A,qF~MFJqT Lessor shall have the right to establish easements, at no cost to Lessee, upon the leased U.S. FLIGHT ACADEMY LEASE AGREEMENT 2002.D0C - Page 10 ground space 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 original condition upon the installation of any utility services on, in, over or under any such easement or the conclusion of such construction. Construction in or at the easement shall be completed within a reasonable time. XI. A,q,qICtNTIM~,NT Old' Lessee expressly covenants that it will not assign th/s lease, convey more than fifty percent (50%) of the interest in his business, through the sale of stock or otherwise, transfer, license, nor sublet the whole or any part of the said premises for any purpose, except for rental of hangar space or tie-dom space, without the written consent of Lessor. Lessor agrees that it will not unreason- ably 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 premises proposed to be assigned, subleased, transferred, licensed, or otherwise. The provisions of this lease shall remain binding upon the assignees, if any, of Lessee. XII. lN~qI IR ANICF~ A. RFQIIlgF. D IN~qlIRANC. F.: Lessee shall maintain continuously in effect at all times during the term of this agreement, at Lessee's expense, the following insurance coverage: 1. Comprehensive general liability covering the leased .premises, the Lessee or its company, its personnel, and its operations on the airport. 2. Aircraft liability to cover all flight operations of Lessee. Fire and extended coverage for replacement value for all facilities used by the Lessee either as a part of this agreement or erected by the Lessee subsequent to this agreement. 4. Liability insurance limits shall be in the following minimum amounts: Bodily Injury and Property Damage: One Million Dollars ($1,000,000) combined single limits on a per occurrence basis. All policies shall name the City of Denton as an additional named insured and provide for a minimum of thirty (30) days written notice to the City prior to the effective date of any cancellation or lapse of such policy. 6. All policies must be approved by the Lessor. 7. The Lessor shall be provided with a copy of all such policies and renewal certificates. U.S. PLIGHT ACADEMY L~ABE AGREEMENT 2002.DOC - Page During the term of this lease, Lessor herein reserves the fight to 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. Lessee herein agrees to comply with all increased or adjusted insurance requirements that may be required by the Lessor throughout the original or extended term of this lease, including types of insurance and monetary amounts or limits of insurance, and to comply with said insurance requirements within sixty (60) days following the receipt of a not'lee in writing from Lessor stating the increased or adjusted insurance requirements. Lessee shall have the right to mainta'm in force both types of insurance and amounts of insurance which exceed Lessor's minimum insurance requirements. In the event that State law should be amended to require types of insurance and/or insurance amounts which exceed those of like or similar public use airports in the southwestern region of the United States of America, then in such event, Lessor shall have the right to require that Lessee maintain in force types of insurance and/or amount of insurance as specified by State law. Failure of Lessee to comply with the minimum specified amounts or types of insurance as required by Lessor shall constitute Lessee's default of this Lease. XIII. CANrCFJJ.ATION BY l.F.q~qOR In the event that Lessee shall file a voluntary petition in bankruptcy or proceed'rags 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 by written notice to Lessee. In the event of default, Lessor has the fight to purchase any or all structures on the leased premises under the provisions of Section VIII Paragraph C.4. (Cancellation) hereof. XIV. CANICEIJ.ATIONRY I.ERRF. F. Lessee may cancel this 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: (I) issuance by any court of competent jurisdiction of a permanent injunction in any way preventing or restraining the use of said akport or any part thereof for airport purposes; (2) the breach by Lessor of any of the covenants or agreements contained herein and the failure of Lessor to remedy such breach for a period of ninety (90) days after receipt of a written notice of the existence of such breach; (3) the inability of Lessee to use said premises and facilities confmuing 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, U.S. FLIGHT ACADEMY LEASE AGREEMENT 2002,DOC - Pa~e 12 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 as aforesaid, or may elect to continue this lease 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. TMT.q(21qT ,I .A1N-F. OI I,q pRC)VT,qIONT,q A. I~.NTIRF. AGREEMENT. This 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. BINDING F. FFF. C~T. 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. ~qF. V1RRABIIJT¥. If a provision hereof shall be finally declared void or illegal by any court or administrative agency having jurisdiction, the entire 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. NIOTtC. R. Any notice given by one party to the other in connection with this agreement shall be in writing and shall be sent by registered mail, return receipt requested, with postage and registration fees prepaid as follows: 1. If to Lessor, addressed to: City Manager City of Denton 215 E. McKinney Street Denton, Texas 76201 2. Ifto Lessee, addressedto: Todd Coffee U.S. Flight Academy 2712 Derby Court, Southlake, Texas 76092 Notices shall be deemed to have been received on the date of receipt as shown on the return receipt. U.S. FLIGHT ACADEMY LEASE AGP,~EMENT 2002.DOC - Page E. 14EAD1NG~ The headings used in this 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. GOVFRNI1NG I.AW This Agreement is to be construed in accordance with the laws of the State of Texas. G. lVgF. I')TATTON. Prior to instituting suit in a court of competent jurisdiction, the parties shall, in good faith attempt to settle any controversy or claim by any party hereto arising out of or relating to this Agreement by mediation in accordance with the laws and rules, then obtaining, of the State of Texas and the State Bar of Texas. H. NO WAIVER. No waiver by Lessor or Lessee of any default or breach of covenant or term of this lease may be treated as a waiver of any subsequent default or breach of the same or any other covenant or term of this Agreement. I. INDKPF. NT)F. NT CONTRACTOR. During all fumes that this Lease is in effect, the parties agree that Lessee is and shall be deemed to be an independent contractor and operator and not an agent or employee of the Lessor with respect to their acts or omissions hereunder. For all the purposes hereunder, Lessee is and shall be deemed an independent contractor and it is mutually agreed that nothing contained herein shall be deemed or construed to constitute a partnership or joint venture between the parties. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. CITY OF DENTON, TEXAS, LESSOR ATTEST: JENNIFER WALTERS, CITY SECRETARY CITY OF DENTON, TEXAS BY: I.S. FLIG~IT ACADEMY LEASE AGReEMeNT 2002.DOC - Page 14 TODD COFFEE, MANAGING DIRECTOR U.S. FLIGHT ACADEMY L.L.C., LESSEE LESSEE /ff// THE STATE OF TEXAS § COUNTY OF DENTON § Thi's instrument was acknowledged before me on the day of ~/c/Lo_ ~ ,2002 by L E S S ~~ ,z-_-_-_-_-_-_-_-_--_-~ !1 ,¢~JEANETTE SCOTT~ (' '%X"~. 'cc~/,'//~'~,_d(~ ' B ('~("~'~:/NOTARY PUBLIC ~ ["--- ' _ //' !~_%72':,: ' .,'::!;~ N~A~Y PUBLIC, STATE OF TEXAS My Commission Expires: U.S. FLIGHT ACADEMY LEASE AGREEMENT 2002.DOC - Page 15 ATTACHMENT A PO<: COR LOT 1 BLOCK1 SOUTHLakST AIRPORT ADDITION INTER PT 799.B8' VARIABLE WIDTH TAXIWAY, DRAINAGE, AND UTILITY EASEMENI' ~/2~ ~ IRF/C 0.78 ACRES  nael d. Kern RPLS'No. 4158 . This suwey was prepared wRhout benefit of o schedule B or title binder · ENGINEERING ~ GROUP, INC. Project C02000 DENTON AIRPORT DENTON, TX TODD COFFEE SOALE: 1"= 100' SHEET NO. FEB. 1,2002 ATTACHMENT B ISBELL ENGINEERING GROUP, INC. Project C02000 DENTON AIRPORT DENTON, TX TODD COFFEE SCALE: 1"= 100' SHEET NO. FEB. ~, 2002