2000-224FILE REFERENCE FORM 2000-224
X Additional File Exists
Additional File Contains Records Not Public, According to the Public Records Act
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FILE(S) Date Initials
Assignment of Lease 06/09/04 )PI
NTH WDVOLIsxn~e~UWTN=wuwdnflwoA am Uu WPn Oat ao~
ORDINANCENO aooo-aa
AN ORDINANCE APPROVING AN AIRPORT LEASE AGREEMENT FOR A
COMMERCIAL OPERATOR BETWEEN THE CITY OF DENTON AND KPD INC, AND
PROVIDING AN EFFECTIVE DATE
THE COUNCIL OF THE CITY OF DENTON, TEXAS HEREBY ORDAINS
SECTION 1 The City Manager or his designee is hereby authorized to execute a airport
lease agreement for commercial operator between the City of Denton and KPD, Inc, in
substantially the form of the Airport Lease Agreement which is attached to and made a part of
this ordinance for all purposes
SECTION 2 This ordinance shall become effective immediately upon its passage and
approval
PASSED AND APPROVED this the O~o day of LFi 12000
A,&
EULINE BROCK, MAYOR
ATTEST,
JENNIFER WALTERS, CITY SECRETARY
BY!°,
OVED AS TO LEGAL FORM
HERBERT L PROUTY, CITY ATTORNEY
BY
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 19 a day of ,
2000, at Denton, Texas, by and between the City of Dento Texas, a
municipal corporation, hereinafter referred to as "Lessor", and
KPD, Inc a Texas corporation having principal offices at 30
Wellington Oaks, Denton, Texas 76205, hereinafter referred to as
"Lessee"
WHEREAS, Lessor now owns, controls 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, and
NOW, THEREFORE, for and in consideration of the promises and
the mutual covenants contained in this Agreement, the parties agree
as follows
I, VQNDTmrnuc OF AGREEMENT
NOTWITHSTANDING ANY LANGUAGE TO THE CONTRARY HEREINAFTER CONTAINED,
THE LANGUAGE IN PARAGRAPHS A THROUGH D OF THIS SECTION SHALL BE
BINDING
A PRINCIPLES O OPERATIONS 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
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-DIS RIMINATION 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 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 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 O INDIVIDUAL(; 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-EXCLUSIVE RIGHT It is understood and agreed that
nothing herein contained shall be construed to grant or authorize
the granting of an exclusive right within the meaning of Title 49
U S C Appendix §1349
E P B -TC AREAS
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 views of Lessee, and without
interference or hindrance
2 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
3 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
Dugan Lease doc- Page 2
4 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
5 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
II.
Lessor, for and in consideration of the covenants and agree-
ments 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 Lanni A tract of land, being approximately 8,800 square
feet, or 0 202 acres, drawn and outlined on Attachment "A" as Lot
2, and legally described in Attachment "B," such attachments being
incorporated herein by reference
Together with the right 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 Lessee'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 TM OVEMENTS PRDVTDED BY LESSOR 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 improve-
ments" 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
O IMPROVEMENTS PROVIDED BY LESSEE. On Lot 2, Lessee shall
Dugan Lease doc- Page 3
construct a hangar/office facility not less than 3,000 square feet
with taxiway access and appropriate culverts or drainage as
required by City ordinances in the utility right of way south and
west 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 EASEMENTS Lessor and Lessee by mutual agreement may
establish, on the leased premises, easements for public access on
roads and taxiways
E AC'C'ESS TO UTILITIES- Lessor represents that there are
water and 3-phase electricity lines within three hundred feet
(3001) 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 Lessee will be required to connect to the sewer
line located approximately fifty (50) feet north of said lot
III. TERM
The term of this Agreement shall be for a period of thirty (30)
years, commencing on the 1st day of July, 2000, and continuing
through the 30thth Day of June, 2030 , 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 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 value, rentals and terms of similar
property on the airport
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 RENTATj 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 during the term of this agreement
Lessee may have 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
1 7/1100" $0 06 per square foot minimum yearly
rental, adjusted annually per paragraph IV C
2 3/7/04. 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 IV C
Dugan Lease doc- Page 4
3 3/1/14. The current lease rate (previous year's
rental) will be increased by an additional $0 02
per square foot, and then adjusted 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 LESSOR IMPROVEMENTS RENTALS NONE There are no Lessor
improvements on the leased premises
C PAYMENT PENALTY ADJUSTMENTS All payments due Lessor from
Lessee shall be made to Lessor at the offices of the Finance
Department of the City of Denton, Accounts Receivable, 215 E
McKinney, Denton, Texas, unless otherwise designated in writing by
the Lessor If payments are not received on or before the 15th, a
five (5) percent penalty will be due as of the 16th If payments
are not received by the 1st of the subsequent month, an additional
penalty of one (1) percent of the unpaid rental/fee amount will be
due A one (1) percent charge will be added on the 1st of each
subsequent month until the unpaid rental/fee payment is made
Failure to pay the rent or penalty amounts on delinquent rent shall
constitute an event of default of this lease
The yearly rental for land and improvements herein leased shall
be readjusted at the end of each one (1) year period during the
term 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 geographical region, as compiled
by the U S Department of Labor, Bureau of Labor Statistics bears
to the applicable index at the execution of this lease 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 July, beginning 2001, and
every year thereafter on such date
The adjustments in the yearly rent shall be determined by
multiplying the minimum yearly rent as set forth in Section IV A
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 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 time of the next rental adjustment as called for in
this section In no event shall any rental adjustment called for
Dugan Lease doc- Page 5
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 year shall not
exceed the annual rental payment calculated for the previous year
by more than ten (10) 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 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 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. RIGHTS AND OBLIGATIONS OF LESSEE
A URF. O ,.AR.D PRFMTSR Lessee is granted the non-
exclusive privilege to engage in or provide the following
1 Hangar Leases and Rental. The rental or lease of hangars
and hangar space and related facilities upon the leased
premises
2 office Rnac Leas or Rental The rental or lease of
office space in or adjoining Lessees hangars
3 Aircraft and storage. To provide storage of both Lessee's
and sublessees' aircraft and aviation related equipment
and supplies upon or within the leased premises
4 Incidental flight instruction, and incidental sales and
rental of aircraft
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 in-
Dugan Lease doc- Page 6
dustrial activities having to do with or related to airports and
aviation No person, business or corporation may operate a commer-
cial, 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
g STANDARDS. 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 To st.. Lessee shall file with the Airport Manager and keep
current a list of his tenants and sublessees
3 Conduct 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
4 Ut-jlit-ig-s, Taxes and Fees. 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
5 Latta Lessee shall comply with all current and future
federal, state and local laws, rules and regulations which
may apply to the conduct of business contemplated,
including rules, 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
6 Main Pnance of pmjiPr- Lessee shall be responsible for
the maintenance, repair and upkeep of all property, build-
ings, structures 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 ob]ectional 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
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
Dugan Lease doc- Page 7
7 Painting of Buildings 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 determining whether
panting 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
8 Unauthorized ,se of premises 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
9 Dw~gs 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 hunt Possession 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
11 Hold Harmless 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 (chemicals Lessee agrees to properly store, collect and
dispose of all chemicals and chemical residues, to
Dugan Lease doc- Page 0
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 Hazardous A trv t Pa Should Lessee violate any law,
rule, restriction or regulation of the City of Denton or
the Federal Aviation Administration, or should the Lessee
engage in or permit other persons or agents to engage in
activities which could produce hazards or obstruction to
air navigation, obstructions to visibility or interference
with any aircraft navigational aid station or device,
whether airborne or on the ground, then Lessor shall state
such violation in writing and deliver written notice to
Lessee or Lessee's agent on the leased premises, or to the
person(s) on the leased premises who are causing said
violation(s), and upon delivery of such written notice,
Lessor shall have the right to demand that the person(s)
responsible for the violation(s) cease and desist from all
such activity creating the violation(s) In such event,
Lessor shall have the right to demand that corrective
action, as required, be commenced immediately to restore
the leased premises into conformance with the particular
law, rule or aeronautical regulation being violated
Should Lessee, Lessee's agent, or the person(s)
responsible for the violation(s) fail to cease and desist
from said violation(s) and to immediately commence
correcting the violation(s), and to complete said correc-
tions 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
D STGNIg During the term of this Agreement, Lessee shall
have the right, at its own expense, to place in or on the leased
Premises 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 program established by Lessor for the Airport Lessor's
approval shall not be 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
Dugan Lease doc- Page 9
VI COVENANTS BY LESSOR
Lessor hereby agrees as follows
A PEACEFUL EN,IOYM.Nm 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 COMPLIANCE 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
from 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
VII. SPECIAL CONDITIONS
It is expressly understood and agreed by and between Lessor and
Lessee that this lease agreement is subject to the following
special terms and conditions
A RUNWAYS AND TAXIWAYS That because of the present fifteen
thousand (15,000) 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 an actual weight, including the weight
of its fuel, of fifteen thousand (15,000), 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 that 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 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
Dugan Lease doc- Page 10
VIII. LEASEHOLD IMPROVEMENTS
A REQUIREMENTS. 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 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
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 construction 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 Lessor's
City Manager 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
B ADDITIONAL CONSTRUCTION OR IMPROVEMENTS Lessee is hereby
authorized to construct upon the land herein leased, at his 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, provided however, before
commencing the construction of any improvements upon the premises,
Lessee shall submit plans and specifications for approval by Lessor
as specified in Article VIII A , above
C OWN SHr O rMPROV M NT 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 n „ld nggg No building or permanent fixture
may be removed from the premises
2 Assu=t on All buildings and improvements of whatever
Dugan Lease doc- Page 11
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 Building Life It is agreed that the life of the building
to be constructed by Lessee on the property herein leased
is thirty (30) years
4 Cancel la ion 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 right to purchase all buildings,
structures and improvements then existing upon the
premises by tendering to Lessee one thirtieth (1/30) of
the undepreciated 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 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 in said hangar, struc-
ture, budding 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 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
Dugan Lease doc- Page 12
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 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. ASSIGNMENT OF LEASE
Lessee expressly covenants that it will not assign this lease,
convey more than ten percent (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
unreasonably withhold its approval of such sale, sublease,
transfer, license, or assignment 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 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. INSURANCE
A REQUIRED TNST ANCR 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
3 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
Dugan Lease dOC- Page 13
r
Bodily Injury and Property Damage
One Million Dollars ($1,000,000) combined single limits on
a per occurrence basis
S 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
During the term of this lease, Lessor herein reserves the right
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 insur-
ance and monetary amounts or limits of insurance, and to comply
with said insurance requirements within sixty (60) days following
the receipt of a notice in writing from Lessor stating the
increased or adjusted insurance requirements Lessee shall have
the right to maintain in force both types of insurance and amounts
of insurance which exceed Lessor's minimum insurance requirements
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
Dugan Lease doc- Page 14
XIII CANCELLATION BY LESSOR
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 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 provisions of
Section VIII Paragraph C 4 (Cancellation) hereof
XIV. CANCELLATION BY LESSEE
Lessee may cancel this Agreement, in whole or part, and termi-
nate 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
jurisdiction of a permanent injunction in any way preventing or
restraining the use of said airport or any part thereof for airport
purposes, (2) the breach by Lessor of any of the covenants or
agreements contained herein and the failure of Lessor to remedy
such breach for a period of ninety (90) days after receipt of a
written notice of the existence of such breach, (3) the inability
of Lessee to use said 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 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
Dugan Lease doc- Page 15
XV. MISCELLANEOUS PROVISIONS
A ENTIRE 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 BINDTN, RPFRrT 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 SEVERABILITY If a provision hereof shall be finally
declared void or illegal by any court or administrative agency hav-
ing 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 NOTICE 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 If to Lessee, addressed to
Mr Rick Dugan
30 Wellington Oaks
Denton, TX 76205
Notices shall be deemed to have been received on the date of
receipt as shown on the return receipt
E HRAnTNGS 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 roV NTNr. LAW This Agreement is to be construed in
accordance with the laws of the State of Texas
G MEDTATTON 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
Dugan Lease doc- Page 16
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 INDEPENDENT CONTRACTOR During all times 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 point 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
BY
ATTEST
RNNIF8 WAL E RS, CITY SECRETARY
TY OF NTON, TEXAS
APPROVED AS TO LEGAL FORM
HERBERT L PROUTY, CITY ATTORNEY
CITY OF DFIDUON, TEXAS
BY
z,/j%1t& Manager
Dugan Lease doc- Page 17
LESSEE
KPD, Inc
By G '
Rick Dugan
President
THE STATE OF TEXAS §
COUNTY OF DENTON § n
his instrument was acknowledged before me on the 7 day of
, 2000 by Rick Dugan, President of KPD, Inc on
be J.f of said corporation
N Y PUBLIC, STATE OF TEXAS
JEANETTE SCOTT
IS NOTARYPUBLIO My Commission Expires QOM
STATE OF TEXAS
My COMIN88lon Eolres 0331-2001-1
Dugan Lease doc- Page 18
ATTACHMENT A
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SEE A T 7 A CHED 'EXHIBI T A
The ple, hareon IS s true and accurate ropresentatlon c' the F epe to a$ da n m'^od b, su vov made
on the g ound the Ilnes and dl-renslons Or said props rv as behg Indloctsd cr the Pin TI,' sizo loca'lon
and typo of bulldlrgs and Improvamonts are as e'own ai' Improver^ontc bong wi hln the bourda les or
the property oxcep as shown so' back from the p cps 11 ties Is as show, aid d stsvo Iron, the
nearest street or road is as shown on the Plar Theree are no vm'blo enao <_~n s visible D etrvsio^e
or apparent easements except as shown on the Platy t ¢~b D'
I further car ttly that no Donlon of subject preps tv R,
Iles wirhin a special flood hazard area according to '
the FLOOD INSURANCE RATE MAP for Denton Cat,Nv ~ YrV 1
and Incorporated A sea Nap Number 481210035
^ Z'~ D Y SRCy+pyp
Dated March 30 1998 (SubJocl Property Iles 'o^e oROFE$ tONA `116~~ $ticf"/TOR
E2 8 1-36-*WO`4TF.
,1,=NT6\, T'FXf S 75207
ANA R .40) 382^4056
SURVEYORS, INC FAX (940) 587^9784
DPAV/N BY 8TH SCALE 1'=20' DATE G6 JUNE 2000 JOB NO 0012226 J
ATTACHMHN7 B
"EXHIBIT A"
FILLD NOTES
0 202 ACRE
BEING all that certain lot, tract or parcel of land situated in the William Neil
Survey Abstract Number 970 in the City of Denton, Denton County, Texas,
being a part of Lot 1, Block 1 of Southeast Airport Addition, an addition to the
City of Denton, Denton County, Texas according to the plat thereof recorded in
Cabinet G, Page 295, Plat Records Denton County, Texas, and being more
particularly described as follows
COMMENCING at a concrete monument, said point being the northwest corner
of said Southeast Airport Addition,
THENCE S 15° 29' 24" E, 1747 47 feet to an iron rod found for PLACE OF
BEGINNING, said point being the southeast corner of a tract designated as Lot
1 B, as surveyed by J E Thompson, Registered Professional Land Surveyor
Number 4857, dated September 25, 1998,
THENCE N 01 ° 23' 50" E. 110 06 feet with the east line of said Lot 1 B to an iron
rod found for corner, said point being the northeast corner of said Lot 1 B,
THENCE S 88° 38' 02" E, 79 88 feet to an iron rod found for corner,
THENCE S 01 ° 19' 53" W, 109 89 feet to an iron rod found for corner,
THENCE N 88° 45'23" W, 80 00 feet to the PLACE OF BEGINNING and
containing 0 202 acre of land
ATTACHMENT C
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()RIVAL
June 02, 2004
Mr. Mark Nelson, Airport Director:
Mr. Nelson, per earlier discussions concerning the sale of my portion of the KPD, Inc.
hangar, located at 4817 Lockheed Lane, Denton, TX, I formally request approval to sell
my entire interest, (33 1/3%). The buyer is Mr. Marcus Lewis, 301 Regency Ct,'Denton,
TX 76201. Although there will be no change in the corporate structure, I seek this
approval to satisfy section XI, `Assignment of Lease', located in the KPD, Inc lease
agreement.
Thank
Richard Dugan
30 Wellington Oaks Circle
Denton, TX 76210
940-367-4525
APPROVED:
CITY OF D
BY:
City Manager
DATE : V V/ " 7T
APPROVED AS TO FORM:
CITY ATTORNEY
CITY OF D'~ *TON, TEXAS