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2001-081S \Our Documenls\0rdmanees\01WlcClendon Ordinance 01 doc ORDINANCE NO ~00/- O~ / AN ORDINANCE APPROVING AN AIRPORT LEASE AGREEMENT BETWEEN THE CITY OF DENTON AND MPM ENTERPRISES 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 A~rport Adwsory Board has recommended the approval of the here~n described A~rport Lease Agreement, and WHEREAS, the City Cotmml of the C~ty of Denton, Texas hereby finds that stud A~rport Lease Agreement ~s ~n the pubhc interest, NOW, THEREFOR THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS SECTION 1 The C~ty Manager is hereby authorized to execute an A~rport Lease Agreement between the C~ty of Denton and MPM Enterprises ~n substantmlly the form of the A~rport Lease Agreement whmh is attached to and made a part ofth~s ordinance for all purposes, for the purpose of prowd~ng commercml hangar/office and related servmes at the Denton Mumc~pal A~rport SECTION 2 Th~s ordinance shall become effective ~mmed~ately upon its passage and approval PASSED AND APPROVED this the ~'~0~ day of ~7~~'~ 2001 EULINE BROCK, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY APPII~'OVED AS TO LEGAL FORM AIRPORT LEASE AGREEMENT COMMERCIAL OPERATOR THE STATE OF TEXAS § § KNOW ALL MEN BY THESE PRESENTS COUNTY OF DENTON § ~ ru 2001 This lease m made and executed this ~ day of Feb ary, , at Denton, Texas, by and between the City of Denton, Texas, a mumclpal corporation, hereinafter referred to as "Lessor", and MPM Enterprises, having pnnclpal offices at 1116 Roadrunner Lane, Argyle, Texas 76226, hereinafter referred to as "Lessee" WITNESSETH WHEREAS, Lessor now owns, controls and operates the Municipal Airport (Anport) in the C~ty of Denton, County of Denton, State of Texas, and WHEREAS, Lessee desires to lease certain premises on smd airport and construct and maintain an aircraft hangar and related aviation facthtles thereon, and NOW, THEREFORE, for and in ennmderatlon of the promises and the mutual covenants comamed in ins Agreement, the parties agree as follows I (~f}NIDITION~q OF AGRERMRNT NOTWITHSTANDING ANY LANGUAGE TO THE CONTRARY HEREINAFTER CONTAINED, THE LANGUAGE IN PARAGRAPHS A THROUGH D OF THIS SECTION SHALL BE BINDING A pRINCIPI.R~q OF OPI~RATIONg The nght to conduct aeronautical and related activities for furmslung services to the public is granted to Lessee subject to Lessee agreemg 1 To furmsh smd services on a fmr, 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, promded, that Lessee may be allowed to make reasonable and non&scnmmatory discounts, rebates, or other similar types of price reductions to volume purchasers B NON-DLql2RIMINATION 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 framing with the land that 1 No person on the grounds of race, rehgion, color, sex, or national origin shall be excluded from particlpatmn in, demed the benefits of, or be otherwise subjected to chscnmmation m the use of smd facflmes, 2 In the constructmn of any ~mprovements on, over, or under such land and the furnishings of serwces thereon, no person on the grounds of race, religion, color, sex, or national ongm shall be excluded from part~capatmn m, denied the benefits of, or otherwise be subjected to discrimination, 3 Lessee shall use the premises m 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 C~wl Rights Act of 1964, as said Regulations may be amended C RICtl--IT OF INDIVIDI IAI .S TO MAINTAIN AIRCRAFT It is clearly understood by Lessee that no right or privilege has been granted winch would operate to prevent any person, firm or corporation operating mrcmft on the airport from performing any serwces on ~ts own alrcrafi w~th its own regular employees 0nclud~ng, but not hmtted to, mmmenance and repair) that ~t may choose to perform D NONI-R3(C.I I I.qlVF, R ICtl--IT It is understood and agreed that nothing hereto contmned shall be construed to grant or authorize the granting of an exclusive right w~th~n the meaning of Title 49 U S C Appendix §1349 E PlmtlC AIt~.AS 1 Lessor reserves the right to further develop or improve the landing area of the airport as it sees fit, regardless of the desires or wews of Lessee, and without interference or hindrance 2 Lessor shall be obligated to mmntmn and keep m good repair the landing area of the airport and all publicly owned famhties of the mrport, together w~th the right to darect and control all aetlwties of Lessee ~n this regard 3 Dunng 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 ~s executed, the provisions of this ~nstmment insofar as they are inconsistent with the provisions of the lease to the Government, shall be suspended 4 Lessor reserves the right to take any action ~t considers necessary to protect the aerial approaches of the an-port agmnst obstruction, together w~th the right to prevent Lessee from erecting, or permitting to be erected, any budding or other McClendon Lease DOC - Page 2 structure on or adjacent to the mrport which, in the oplmon of Lessor, would limit the usefulness or safety of the anport or constitute a hazard to aircraft or to mrcraft navlgatton 5 Tins 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 II T,EA~ql~T3 pRF, MI~q~q Lessor, for and an consideration of the covenants and agreements herein contmned, 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 t,and A tract of land, being approximately 8,800 square feet, or 0 202 acres, drawn and outlined on Attachment "A" as Lot 4, and legally described in Attachment "B,' such attachments being incorporated herein by reference Together with the right of ingress and egress to smd property, and the right in common with others so anthonzed 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 anvltees For purposes of tlus agreement, the term "Premises" shall mean all property located within the metes and bounds descnbed and identified wltinn Attachment "B", including leasehold improvements constructed by the Lessee, but not including certmn easements or property owned and/or controlled by the Lessor B !]MpR('')VF,MIRNTS PROVIDI~,D FlY l ,RgRCJR 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 ]MPROVRMRNTTg pRIDVIDRD BY I.F,,qSEE_ On Lot 4, Lessee shall construct a hangar/office faclhty not less than 3,000 square feet with taxiway access and appropriate culverts or drainage as required by City ordinances in the utthty right of way south and north of the proposed hangar as well as other unprovements as determined necessary by City ordinances Smd improvements shall be completed not less than 365 days from the date of tins agreement D 1RARF~MRNTR Lessor and Lessee by mutual agreement may establish, on the leased premises, easements for pubhc access on roads and taxlways McClendon Lease Doc - Page 3 E ACC, Egg TO ITTIT,TTTRS. Lessor represents that there are water and 3-phase electricity lines wltlun three hundred feet (300') of the leased prermses avmlable to "tap-in" by Lessee, and that the same are sufficient for usual and customary service on the leased premises Lessee will be required to connect to the sewer line located approximately filly (50) feet north of smd lot Ill TERM The term oftlus Agreement shall be for a penod of thirty (30) years, commencing on the 1st day of March, 2001, and continuing through the last day of February, 2031, unless earlier terminated under the provlmons of the Agreement Any attempt by Lessee to renegotlate this Lease shall be in writing addressed to the City Manager at least one hundred eighty (180) days before the expiration of the stated term of ttus lease, and at least 180 days before the expiration of any additional renegotlated period Lessee has the optaon to renew for two (2) additional ten (10) year terms The rental and terms to be negotiated shall be reasonable and consistent with the then value, rentals and terms of mnular property on the mrport IV PAYMENTS, RENTALS AND FEES Lessee covenants and agrees to pay Lessor, as consideration for this lease, the following payments, rentals and fees A LAND RENTAL shall be due and payable in twelve (12) equal monthly installments in the sum in advance, on or before the 1st day of each and every month dunng the term of this agreement Lessee may have the option to pay annual rentals and fees ~n whole on or before the 1 st day of October, at the beginning of the City's fiscal year, each and every year of this lease 1 3/1/01 $0 06 per square foot minimum yearly rental, adjusted annually per paragraph IV C 2 3/1/04 The current lease rate (previous year's rental) will be increased by an additional $0 06 per square foot, and then adjusted annually per paragraph IVC 3 3/1/14 The current lease rate (previous year's rental) wall be increased by an additional $0 02 per square foot, and then ad3usted annually per paragraph IV C Notwithstanding the foregoing, the annual lease rental to be reduced by the current lease rate per square foot, times the number of square feet comprising all easements established in accordance with Article II(C) B l.F.g~qOR IMPROVg, MF. NT,q RF, NTAI,,q NONE There are no Lessor improvements on the leased prermses McClendon Lease DOC - Page 4 C PAY]VtF~NIT; Pg',NIAI,TY: ADIII,qTMF, NTS All payments due Lessor from Lessee shall be made to Lessor at the offices of the F~nance Department of the C~ty of Denton, Customer Serwce Dlws~on, 601 West H~ckory, Denton, Texas, unless otherwise designated ~n writing by the Lessor If payments are not received on or before the 15th, a five (5) percent penalty wall be due as of the 16th If payments are not recmved by the 1st of the subsequent month, an additional penalty of one (1) percent of the unpmd rental/fee amount will be due A one (1) percent charge w~ll be added on the 1st of each subsequent month untd the unpmd rental/fee payment ~s made Fmlure to pay the rent or penalty amounts on dehnquent rent shall constitute an event of default of this lease The yearly rental for land and ~mprovements here~n leased shall be readjusted at the end of each one (1) year period dunng the term of tlus lease on the bas~s of the proportion that the then current Umted States Consumer Price Index for all urban consumers (CPI-U) for the Dallas-Fort Worth geographmal region, as compiled by the U S Department of Labor, Bureau of Labor Stat~stms bears to the apphcable index at the execution of th~s lease The original land rental amount ~s based upon the formulae set forth ~n Section IV A for the land here~n leased Each rental adjustment, ~f any, shall occur on the 1st day of March, begmmng 2002, and every year thereafter on such date The adjustments ~n the yearly rent shall be determined by multiplying the mtmmum yearly rent as set forth ~n Section IV A by a fractmn, the numerator of whmh ~s the index number for the last month prior to the adjustment, and the denominator of which ~s the ~ndex number apphcable at the execution of th~s lease If the product of th~s multlphcatmn ~s greater than the m~mmum yearly rent as set forth ~n Section IV A, Lessee shall pay th~s greater amount as the yearly rent until the t~me of the next rental adjustment as called for ~n th~s section If the product of th~s mult~phcat~on is less than the m~mmum yearly rent of as set forth in Section IV A, there shall be no adjustment ~n the annual rent at that t~me, and Lessee shall pay the prewous year's annual rent untd the time of the next rental adjustment as called for ~n th~s section In no event shall any rental adjustment called for m this section result ~n an annual rent less than the prewous year's annual rent The adjustment shall be hm~ted so that the annual rental payment determined for any g~ven year shall not exceed the annual rental payment calculated for the prewous year by more than ten (10) percent If the consumer price index for all urban consumers (CPI-U) for the Dallas-Fort Worth geographmal region, as complied by the U S Department of Labor, Bureau of Labor Statistics, ~s d~scontmued dunng the term of th~s lease, the remmmng rental adjustments called for m th~s section shall be made using the formula set forth m Subsection (a) above, but substituting the ~ndex numbers for the Consumer Price Index-Seasonally AdJusted U S City Average For All Items For All Urban Consumers (CPI-U) for the ~ndex numbers for the CPI-U apphcable to the Dallas-Fort Worth geograplucal region If both the CPI-U for the Dallas-Fort Worth geographmal region and the U S City Average are dmcontmued dunng the term of th~s lease, the remmnmg rental adjustments called for ~n tlus section shall be made using the statistics of the Bureau of Labor Stat~stms of the Umted States Department of Labor that are most nearly comparable to the CPI-U apphcable to the Dallas-Fort Worth geographical regmn If the Bureau of Labor Statistics of the Umted States Department of Labor ceases to ex~st or ceases to pubbsh stat~stms concem~ng the purchasing power of the consumer dollar dunng the term of th~s lease, the remmmng rental McClendon Lease Doc - Page 5 adjustments called for ~n tins section shall be made using the most nearly comparable statlstms published by a recognized financial authonty selected by Lessor V RIGHTS AND OBLIGATIONS OF LESSEE A I T~l~, O'~ T.lqA~ql~.D PRg. Ml,qg.~q Lessee m granted the non-exclusive pnwlege to engage in or provide the following 1 l-lan£ar l,eaaea and Rental. The rental or lease of hangars and hangar space and related faclht~es upon the leased premises 2 Office ,qpaee l.e,a~e ar Rental The rental or lease of office space ~n or adjolmng Lessee's hangars 3 ~o~.ratLaud~Si~ltg~ To prowde storage of both Lessee's and sublessees' mrcraft and aviation related eqmpment and supplies upon or w~thm the leased premises Lessee, Ins tenants and sublessees shall not be authorized to conduct any services not specifically hsted in tins agreement The use of the leased premmes of Lessee, Ins tenants or sublessees shall be hnuted to only those private, commereml, retml or ~ndustnal activities having to do w~th or related to mrports and awatlon No person, bus~ness or corporation may operate a commercial, retml or industrial business upon the premises of Lessee or upon the A~rport without a lease or license from Lessor authonzlng such commercml, retml or ~ndustnal act~wty The Lessor shall not unreasonably withhold authonzatton to conduct aeronautical or related services B RTANT)ARDg. Lessee shall meet or exceed the following standards 1 Addre~,q. Lessee shall file w~th the Airport Manager and keep current his mathng addresses, telephone numbers and contacts where he can be reached in an emergency 2 I.,at. Lessee shall file with the A~rport Manager and keep current a hst of Ins tenants and sublessees 3 Conduct Lessee shall contractually reqmre his employees and sublessees (and sublessee's ~nvitees) to abide by the terms of tins agreement Lessee shall promptly enforce Ins contractual rights m the event of a default of such covenants 4 1Tt,ht~ea: Ta~e~ and Feea. Lessee shall meet all expenses and payments in connection w~th the use of the Premises and the rights and privileges herein granted, ~ncluchng the t~mely payment of utilities, taxes, penmt fees, license fees and assessments lawfully levied or assessed 5 l.awa Lessee shall comply w~th all current and future federal, state and local laws, roles and regulations wluch may apply to the conduct of bus~ness contemplated, including rules, regulatmns and ordmances promulgated by Lessor, and Lessee shall McClendon Lease Doc - Page 6 keep m effect and post in a prominent place all necessary and/or reqmred hcenses or permits 6 Mmntenanee of Properly. Lessee shall be responsible for the mmntenance, repmr and upkeep of all property, bmkhngs, structures and improvements, including the mowmg or ehmmat~on of grass and other vegetation on the Premises, and shall keep smd Premises neat, clean and in respectable condltaon, free from any objectlonal matter or tlung 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 bmld~ng for the storage of wrecked or permanently disabled almmft, mrcraft parts, automobiles, vehicles of any type, or any other eqmpment or ~tems which would distract from the appearance of the leased premises Lessee agrees that at no time shall the leased premases be used for a flea market type sales operation 7 Pmntmg of lqmldlng~ Dunng the original term of this Lease and dunng each extension, Lessor shall have the right to reqmre, not more than once every five years, that the metal exterior of hangar(s) or bmlthng(s) located on the premises be reviewed by the An'port Advmory Board for the purpose of determlmng whether pmntlng of the exteriors of such bmld~ngs or hangars is necessary If the A~rport Advisory Board determmes pmntmg is necessary, it shall furnish a recommendation to this effect to the C~ty Councd The Council, may, upon the Board's recommendation, require Lessee to repaint smd exteriors according to Lessors spemficat]ons (to specify color ofpmnt, quality of workmansbap and the year and month in which the hangar(s) or braiding(s) are to be patnted, if needed ) Lessee shall complete the pmntlng in accordance w~th such specfficat]ons w]thm one (1) year of receipt of notice from lessor Lessee agrees to pay all costs and expense Involved in the hangar or bmld~ng pmntlng process Fmlure 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 8 1Tna]]thonzed n~e. ofpr~.mmv.~ 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 here~n 9 I)~.lbngs It as expressly understood and agreed that no permanent dwelling or domicile may be built, moved to or estabhshed on or within the leased premises nor may lessee, his tenants, mvatees, or guests be permitted to reside or remaan as a resident on or w~thln the leased premises or other airport premises 10 Qmt pa~e.qman Lessee shall quit possession of all premises leased here~n at the end of the primary term of th~s lease or any renewal or extension thereof, and deliver up the premmes to Lessor m as good condition as existed when possession was taken by Lessee, reasonable wear and tear excepted 11 lqold l-larmlaqg Lessee shall mdemmfy and hold harmless Lessor from and agmnst all loss and damages, mclurhng death, personal injury, loss of property or other McClendon Lease Doc - Page damages, arising or resulting from the operation of Lessee's business in and upon the leased premises 12 (2hemmal,q Lessee agrees to properly store, collect and d~spose of all chemicals and chemical residues, to properly store, confine, collect and dispose of all patnt, including pmnt spray in the atmosphere, and pmnt products, and to comply with all Local, State and Federal mgnlat~ons governing the storage, handling or disposal of such chemicals and patnts 13 lqas~ardmm Aet~whe~q Should Lessee violate any law, role, restriction or regulation of the City of Denton or the Federal Aviation Adrmmstratlon, or should the Lessee engage in or permit other persons or agents to engage in activities which could produce hazards or obstruction to mr navigation, obstructions to visibility or interference with any mreraft navigational and 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% agent on the leased premises, or to the person(s) on the leased premises who are causing smd violation(s), and upon dehvery of such written notice, Lessor shall have the right to demand that the person(s) responsible for the violation(s) cease and demst from all such activity creating the violation(s) In such event, Lessor shall have the nght to demand that corrective action, as required, be commenced lmmechately to restore the leased premises into conformance with the particular law, role or aeronautical regulation being violated Should Lessee, Lessee's agent, or the person(s) responsible for the violation(s) fml to cease and desist from smd violation(s) and to immediately commence correcting the violation(s), and to complete smd corrections wltlun twenty-four (24) hours following written notfficat~on, 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 tncurred to any improvements on the leased premises as a result of the corrective action process C SIGNS Dunng the term of this Agreement, Lessee shall have the right, at its own expense, to place m or on the leased Premises signs identifying Lessee Smd 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 program established by Lessor for the Airport Lessor's approval shall not be withheld unreasonably Said signs shall be mmntalned in good repmr throughout the term of tlus agreement Notwithstanding any other provision of this agreement, smd signs shall remmn the property of Lessee Lessee shall remove, at its expense, all lettenng, signs and placards so erected on the premises at the expiration of the term of this Agreement or extensions thereof VI COVENANTS BY LESSOR Lessor hereby agrees as follows A pI~,AC:RI~IrI, F, NJOYMF, NIT That on payment of rent, fees, and performance of the McClendon Lease DOC - Page covenants and agreements on the part of Lessee to be performed hereunder, Lessee shall peaceably hold and enjoy the leased premases and all rights and pnvtleges herean granted, B Cf~MPI,IANC, F, Lessor warrants and represents that tn the estabhshment, constructton and operatmn of smd Denton Mummpal Atrport, that Lessor has heretofore and at thas ttme ts complyang wath all extsttng rules, regulations, and criteria dtstnbuted by the Federal Avaatlon Admamstrataon, or any other governmental authority relattng to and mcludang, but not hmated to, norse abatement, air rights and easements over adjo~mng and conttguous areas, over-fltght tn landang or takeoff, to the end that Lessee wall not be legally hable for any actmn of trespass or sam~lar cause of action by wrtue of any aerial operations of adjmmng property tn the course of normal take-off and landing procedures from said Denton Muntclpal Aarport, Lessor further warrants and represents that at all times dunng the term hereof, or any renewal or extensaon of same, that it wtll continue to comply wxth the foregomg VII SPECIAL CONDITIONS It ~s expressly understood and agreed by and between Lessor and Lessee that thas lease agreement as subject to the followang spectal terms and conchttons A RIINWAY~q AND TAX'IWA¥~q That because of the present fifteen thousand (15,000) pound continuous use wetght beanng capactty of the runway and taxaways of the Aarport, Lessee herein agrees to hrmt all aeronautmal acttvtty tncludlng landtng, take-off and taxnng, to mrcraft havang an actual wetght, mcludmg the wetght of tts fuel, of fifteen thousand (15,000), untd such time that the nmway and destgnated taxtways on the Airport have been amproved to handle mreraft of such excesstve wexghts It ts further agreed that, based on quahfied engtneenng studies, the weaght restrictions and provtslons of this clause may be adjusted, up or down, and that Lessee agrees to ab~de by any such changes or revtstons as such studtes may dactate "Aeronautical Acttvtty" referred to in tlus clause shall include that activity of the Lessee or tts agents or subcontractors, and ats customers and mvttees, but shall not include those acttwttes over whmh tt has no sohmtory part or control, such as an unsohmted or unscheduled or emergency landing A pattern of neghgent dmregard of the prowstons of tlus section shall be sufficient to cause the rmmedtate termmatxon of th~s enttre Agreement and subject Lessee to hablhty for any damages to the Atrport~that mtght result VIII LEASEHOLD IMPROVEMENTS A RF. QIY[RRM~NIT,q. Before commenctng the construction of any ~mprovements upon the premases, Lessee shall submit 1 Documentatton, spemficat~ons, or design work, to be approved by the Lessor, which shall estabhsh that the nnprovements to be built or constructed upon the leased prermses are m conformance with the overall stze, shape, color, quahty and design, in appearance and structure of the program estabhshed by Lessor on the Aarport McClendon Lease DOC - Page 9 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, acting by its City Council, has approved the plans and specifications and the location of the improvements, the estimated 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 fml 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 taxlways) shall be delivered by Lessee to Lessor's City Manager from time to time as such costs are pand by Lessee, and Lessor's 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 pond by Lessee, and the findings of the City Manager when endorsed by him upon sand contract shall be conclusive upon all parties for all purposes of this agreement B ADDITIONAl, CONRTRITCTIf)N OR IMPROVF, M~NT~q Lessee is hereby authorized to construct upon the land herein leased, at his own cost and expense, bmldangs, hangars, and struc- tures, that Lessor and Lessee mutually agree are necessary for use in connection with the operations authorized by this lease, promded however, before commencing the construction of any improve- ments upon the premises, Lessee shall submit plans and specifications for approval by Lessor as specified m Article VIII A, above C OWN~,R~qI4TP C)FIMPROVRM1RNT~q All bmldlngs and ~mprovements constructed upon the premises by Lessee shall remann the property of Lessee unless smd property becomes the property of Lessor under the following conditions, terms and provisions 1 Removal of l:lmldmga NO bmldlng or permanent fixture may be removed from the premises 2 A~m~mptmn All bmldlngs and improvements of whatever nature remanmng 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 Rmlrhng I afc It iS agreed that the llfe of the bmldlng to be constructed by Lessee on the property herein leased is tlurty (30) years 4 (2anc, ellatmn Should this lease be cancelled for any reason before the end of the thirty (30) year expected bmldlng hfe, it is especially understood and agreed that Lessor reserves the right to purchase all braidings, structures and improvements then existing upon the premises by tendenng to Lessee one thirtieth (1/30) of the undepre- elated value of such bmkhng for each year remaamng on the agreed life of such bmkhng The undepreclated value of all Improvements is to be determined bY having McClendon Lease DOC - Page such improvements appraised by three apprmsers, one appointed by Lessor, one appointed by Lessee and one appointed by the two appraisers IX SUBROGATION OF MORTGAGEE 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 m 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 thru 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 thru 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 from mortgagee, those improvements purchased with the borrowed funds, and those improvements pledged to secure the refinancing of the improvements B Lessee shall have the right to place a first mortgage lien upon the leasehold in an amount not to exceed eighty-five percent (85%) of the construction cost or current market value of the leasehold improvements X RIGHT OF EASEMENT Lessor shall have the right to establish easements, at no cost to Lessee, upon the leased ground space for the purpose ofpromdmg underground utlhty services to, from or across the mrport 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 ongmal condmon upon the installation of any utility services on, m, over or under any such easement or the conclusion of such constmctlon Construction in or at the easement shall be completed within a reasonable time XI ASSIGNMENT OF LEASE r,essee expressly covenants that it will not assign this lease, convey mom than ten pement (10%) 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-down 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 asslgmnent of the facilities for the 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 prod by Lessee to Lessor under the terms of thas lease, for such portion of the premises proposed to be assigned, subleased, transferred, licensed, or otherwise The prowslons of McClendon Lease Doc - Pa~e 11 this lease shall remain blnchng upon the assignees, if any, of Lessee XII INSU1L~CE A Rg. QTrtl~g~D INRTIRANC.~. Lessee shall malntatn continuously in effect at all times dunng the term oftlus agreement, at Lessee% expense, the following insurance coverage 1 Comprehensive general hablhty covenng the leased premises, the Lessee or its company, its personnel, and its operations on the mrport 2 garcraff hablhty to cover all flight operations of Lessee 3 Fire and extended coverage for replacement value for all facilities used by the Lessee either as a part of ttus agreement or erected by the Lessee subsequent to this agreement 4 Liability insurance hmlts shall be m the following mlmmum amounts Bo(hly InJury and Property Damage One Mflhon Dollars ($1,000,000) combined single limits on a per occurrence basis 5 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 pohcy 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 Dunng the term of this lease, Lessor herein reserves the right to adjust or increase the liability insurance amounts required of the Lessee, and to reqmre any additional rider, provisions, or certificates of insurance, and Lessee hereby agrees to provide any such insurance requirements as may be reqmred by Lessor, provided however, that any requirements shall be commensurate with insurance reqmrements at other pubhc use airports similar to the Denton Municipal Anrport 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 smd insurance reqmrements wlthtn sixty (60) days following the receipt of a notice in writing from Lessor stating the increased or adjusted insurance requirements Lessee shall have the right to matntmn in force both types of insurance and amounts of insurance wtuch exceed Lessor's minimum insurance reqmrements In the event that State law should be amended to reqmre types of insurance and/or insurance amounts which exceed those of like or similar pubhc use mrports in the southwestem region of the McClendon Lease Doc - Page 12 Umted States of America, then in such event, Lessor shall have the right to require that Lessee mmntmn in force types of insurance and/or amount of insurance as specified by State law Fmlure of Lessee to comply with the mlnmlum specified amounts or types of insurance as required by Lessor shall constutute Lessee's default ofth~s Lease XIII CANCELLATION BY LESSOR In the event that Lessee shall file a voluntary petition in bankruptcy or proceedings in bankruptcy shall be mstltuted agmnst 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 herem by other operation of law, or Lessee shall fall to perform, keep and observe any of the terms, covenants, or conditions herein contmned, 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 contnnue 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 right to purchase any or all structures on the leased premises under the prowsions of Section VIII Paragraph C 4 (Cancellation) hereof XIV CANCELLATION BY LESSEE Lessee may cancel this Agreement, in whole or part, and terminate all or any of its obligations hereunder at any time, by tlurty (30) days written notice, upon or after the happening of any one of the following events (1) issuance by any court of competent junsdmtlon of a permanent injunction in any way preventing or restraining the use of smd mrport or any part thereof for mrport 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 penod ofmnety (90) days after receipt of a written notice of the existence of such breach, (3) the inability of Lessee to use smd premises and facilities continuing for a longer period than ninety (90) days due to any law or any order, role or regulatmn of any appropriate governmental authonty having junsdmtlon 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 auth0nzed agency thereof, of the mmntenance and operation of smd airport and facilities or any substantml 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 avmt~on purposes, then the Lessee may cancel flus lease as aforesmd, or may elect to continue fi'ns 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 orchnanees as may be applicable at that time XV MISCELLANEOUS PROVISIONS A F, NTIRFZ, AGRg, EMENT This Agreement constitutes the entire understanding between the parties and as of its effective date supersedes all prior or independent Agreements between the M¢Clendon Lease Doc - Pa~e 13 part~es covenng the subject matter hereof Any change or modfficatlon hereof shall be in writing s~gned by both part,es B BINDING F, FI~g,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 part~es hereto C Sg, V1RR Al:Ill JTY If a prowmon hereof shall be finally declared void or ~llegal by any court or admlmstratlve agency having junsdmt~on, the entire Agreement shall not be void, but the remmmng prows~ons shall continue m effect as nearly as possible in accordance with the original intent of the part,es D NOTICE Any not,ce given by one party to the other in connection with this agreement shall be m writing and shall be sent by registered mml, return recmpt requested, w~th postage and registration fees prepmd as follows 1 If to Lessor, addressed to City Manager City of Denton 215 E McKlnney Street Denton, Texas 76201 2 If to Lessee, addressed to D C McClendon, President MPM Enterprises 1116 Roadrunner Lane Argyle, TX 76226 Notices shall be deemed to have been received on the date of receipt as shown on the return receipt E 14F, AD1NGS 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 GOV1RRNING I,AW This Agreement is to be construed in accordance with the laws of the State of Texas G MI~,DIATIIDN Prior to instituting stat in a court of competent jurisdiction, the parties shall, in good faith attempt to settle any controversy or clmm by any party hereto arising out of or relating to thru Agreement by me(hatmn m accordance with the laws and roles, then obtalmng, of the State of Texas and the State Bar of Texas H NC) WAIVF, R No waiver by Lessor or Lessee of any default or breach of covenant or McClendon Lease Doc - Page 14 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 INDt~,PI~,N!DF, NT C(3NTRAt2TC}R Dunng all times that tins Lease ts 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 w~th respect to their acts or omissions hereunder For all the purposes hereunder, Lessee ~s and shall be deemed an independent contractor and ~t is mutually agreed that nothing contmned here~n shall be deemed or construed to constitute a partnership or joint venture between the parties IN WITNESS WHEREOF, the partaes have executed tins Agreement as of the day and year first above written CITY OF DENTON, TEXAS, LESSOR t,' I~c~ael W Jfiz, Clt~)~ana~er ATTEST APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY CITY OF DENTON, TEXAS BY MPM, Enterprises D C McClendon, President, Lessee McClendon Lease DOC - Page THE STATE OF TEXAS § COUNTY OF DENTON § This instrument was acknowledged before me on the--OU (~day of February, 2001 by LESSEE ~AO [~1 i~t~. ,&~ ~ N~RY PIJBLIC, STATE O My Comnnsslon Expires McClendon Lease DOC - Page 16 ATTACHMENT "A" conf .o7,i,~ ~ s ~ ~,~ ,oc,8 ~o - -- _~RF~CA~ 80 O0 LO'[ 3 ~ LOT 4 P 0 BOX 507 I(RUM, IX 76249 940)d82-6723 LIANCE ,~-117-ol AREA McClendon nease Page 17 ATTACHMENT "B" ALL that certo,n lot, tract, or parcel of land s,tuoted ,n the \VlLIIAM NElL SLIRVEY, AB%If'Ar I NUMBER 970, ~n the Cdy of Denton, Denton County, le),os and bern0 o port of Lot 1, Block 1 of the Soul. beast Airport AddR~on, on Add~bon to tile Cdy of Denton Denton Co,lnty, Texas, os recorded ,n Cabinet G, Page 29.5 of tile Plot Records of Denton County, Te~'os tile sub.leer tract bemg more porbculorly described os tallows BFOINNINO for the Southwest corner of the tract being closer,bed here~n at o copped Iron rod found for corner from which o concrete monume~lt found (-it the Nnrthwe~t corner of so,d Add~bon bears NorU~ 20 Degrees 21 MJnute~ 54 Seconds We',t o ti,stance of 1,°,OO98 feet TtlENCE North O'i Degrees 14 M~nutes .5.5 Seconds t-est o d~stonce of I10 17 feet to o copped ~ron rod found for corner, THENCE South 88 Degrees .30 Minutes .58 Seconds Fast, o chstonce of 80 O0 feet to o copped ~ron rod found for corner, TI4ENCE South 01 Degrees 2.3 M~nutes 50 Seconds '¢/e~.t, a d~stonce of 110 08 feet to a copped ~ron rod found for corner, II4ENCE North 88 Degrees .34- M~nutes 46 Seconds West o d,stnnce of /9 7'i feet to the PLACE OF BEOINNIN0, and enclosing 0 20 acres of land, more or less McClendon Lease Page 18