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2000-412ORDINANCE NO ~ - q I ..9_ AN ORDINANCE APPROVING A COMMERCIAL OPERATOR AIRPORT LEASE AGREEMENT BETWEEN THE CITY OF DENTON, TEXAS AND RON GOWAN, AND PROVIDING AN EFFECTIVE DATE THE COUNCIL OF THE CITY OF DENTON, TEXAS HEREBY ORDAINS SECTION 1 The C~ty Manager or Ns designee ~s hereby authorized to execute a mrport lease agreement for commercml operator between the C~ty of Denton and Ron Gowan, ~n substantmlly the form of the A~rport Lease Agreement whmh ~s attached to and made a part of tNs or&nance for all purposes SECTION 2 TNs or&nance shall become effective ~mmedlately upon ~ts passage and approval PASSED AND APPROVED thru the e7 ~ day of {X~O~,Ot~oF' ,2000 EULINE BROCK, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY APPRgVED ASYTO LEGAL FORM i ~RB~~.Y ATTORNEY AIRPORT LEASE AGREEMENT CO~4ERCIAL OPERATOR THE STATE OF TEXAS § ~ KNOW ALL MEN BY THESE PRESENTS COUNTY OF DENTON § This lease is made and executed this ~ day of/~~ 2000, at Denton, Texas, by and between the City of Denton, Texas, a municipal corporation, hereinafter referred to as "Lessor", and a Mr Ron Gowan having his principal offices at 316 Darrell Road, Roanoke, Texas 76262, hereinafter referred to as "Lessee" WITNESSETH WHEREAS, Lessor now owns, controls and operates the Airport (Airport) in the City of Denton, County of Denton, Texas, and Municipal State of 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 contamned in this Agreement, the parties agree as follows I CO_.~DITIONS OF AGI~EEMENT NOTWITHSTANDING ANY LANGUAGE TO THE CONTRARY HEREINAFTER CONTAINED, THE LANGUAGE IN PARAGRAPHS A THROUGH D OF THIS SECTION SHALL BE BINDING A PRINCIPLES OF OPERATIONS The rmght to conduct aeronautical and related activities for furnishing services to the public ms granted to Lessee subject to Lessee agreemng To furnmsh said services on a fair, equal and not unjustly discriminatory basis to all users thereof, and To charge fair, reasonable and not unjustly discriminatory prices for each unit or service, provided, that Lessee may be allowed to make reasonable and nondiscriminatory discounts, rebates, or other similar types of prmce reductions to volume purchasers B NON-DISCRIMINATION 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 w~th the land that 1 No person on the grounds of race, rel~gmon, color, sex, or national or~gln shall be excluded from participation in, denied the benefzts of, or be otherwmse subjected to dmscrmmmnatmon in the use of said facmlmtmes, In the construction of any improvements on, over, or under such land and the furnmshmngs of servmces thereon, no person on the grounds of race, relmgmon, color, sex, or national ormgln shall be excluded from partlcmpatmon in, denied the benefits of, or otherwmse be sub3ected to discrimination, 3 Lessee shall use the premmses mn complmance with all other requzrements imposed by or pursuant to Title 49, Code of Federal Regulations, Department of Transportation, Subtitle A, Office of the Secretary, Part 21, Nondlscrmmlnatlon mn Federally assisted programs of the Department of Transportation - Effectual of Title VI of the Civil Rights Act of 1964, as said Regulatmons may be amended C RIGHT OF INDIVIDUALS TO MAINTAIN AIRCRAFT It ms clearly understood by Lessee that no rmght or prmvmlege has been granted whmch would operate to prevent any person, firm or corporatmon operating aircraft on the airport from performing any servmces on mrs own amrcraft with its own regular employees (mncludlng, but not lmmlted to, maintenance and repair) that it may choose to perform D NON-EXCLUSIVE RIGHT It ms understood and agreed that nothmng heremn contained shall be construed to grant or authormze the granting of an exclusive right within the meaning of Title 49 U S C Appendix ~1349 E pUBLIC AREAS 1 Lessor reserves the right to further develop or improve the landmng area of the airport as mt sees fit, regardless of the desmres or vmews of Lessee, and wmthout interference or hindrance 3 Lessor shall be oblmgated to mamntamn and keep in good repair the landing area of the airport and all publicly owned facllmtmes of the amrport, together with the right to direct and control all actmvltmes 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 mllmtary or naval use, and, if such lease ms executed, the provisions of thms instrument insofar as they are mnconsmstent with the provmsmons of the lease to the Government, shall be suspended Lessor reserves the right to take any action it considers GOWAN lease doc- Page 2 5 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 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 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 Land A tract of land, being approximately 2,250 square feet, or 0 052 acres, drawn and outlined on Attachment "A" as Lot 9, 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 lnvltees 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 IMPROVEMENTS PROVIDED BY LESSOR NONE There will be no as set forth in Article improvements provided by Lessor, except 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 Ail Lessor improvements must be described in detail above, or above referenced and attached to this Agreement in an exhibit approved by Lessor C IMPROVEMENTS PROVIDED BY LESSEE On Lot 9, Lessee shall construct a hangar/office facility not less than 1,800 square feet GOWAN lease doc- Page 3 with taxlway access and appropriate culverts or drainage as required by City ordinances in the utility right-of-way north of the proposed hangar as well as other improvements as determined necessary by City ordinances Taxlway access shall be constructed to meet a 15,000 pound continuous use weight bearing capacity 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 taxlways E ACCESS TO UTILITIES Lessor represents that there are water 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 ~or usual and customary service on the leased premises III TERM The term of this Agreement shall be for a period of thirty (30) years, coramenclng on the 8th day of November, 2000, and continuing through the 7th Day of November, 2030 , unless earlier terminated under the provisions 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 this lease, and at least 180 days before the expiration of any additional renegotlated per~od Lessee has the option to renew for one (1) additional ten (10) year term The rental and terms to be negotiated shall be reasonable and consistent with the then value, rentals and terms of similar property on the a~rport 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 Lessee shall pay to the Lessor for the use and occupancy of the Premises the sum of eight cents ($0 08) per square foot per year, for a total of $180 00 per year and shall be due and payable in two equal installments in the sum of n~nety ($90 00) dollars each slx months, with the first payment to be made upon execution of this lease and the second payment due on or before May 1, 2001 Thereafter, payments shall be due on November 1 and May 1 of each year of the Lease 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(D) GOWAN lease doc- Page B LESSOR IMPROVEMENTS RENTALS mmprovements on the leased premises C PAYMENT~ PENALTY~ ADJUSTMENTS Lessee shall be made to Lessor at NONE There are no Lessor All payments due Lessor from the offices of the Fmnance Department of the Cmty of Denton, Accounts Receivable, 215 E McKmnney, Denton, Texas, unless otherwmse designated in wrmtlng by the Lessor If payments are not received on or before the 15th, a five {5) percent penalty wmll 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 unpamd 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 thms lease The yearly rental for land and mmprovements herein leased shall be readjusted at the end of each one (1) year period during the term of this lease on the basms of the proportion that the then current United States Consumer Price Index for all urban consumers (CPI-U) for the Dallas-Fort Worth geographmcal region, as compiled by the U S Department of Labor, Bureau of Labor Statmstlcs bears to the applicable index at the execution of this lease The ormglnal land rental amount ms based upon the formulae set forth mn Sectmon IV A for the land herein leased Each rental adjustment, if any, shall occur on the 1st day of December, begmnnlng 2001, and every year thereafter on such date The adjustments in the yearly rent shall be determined by multmplylng the minimum yearly rent as set forth in Sectmon IV A by a fraction, the numerator of whmch is the index number for the last month prior to the adjustment, and the denominator of which is the index number applicable at the executmon of thms lease If the product of this multiplication is greater than the minimum yearly rent as set forth mn 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 thms sectmon If the product of this multiplication ms 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 prevmous year's annual rent untml the tmme of the next rental ad]ustment 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 year shall not exceed the annual rental payment calculated for the prevmous year by more than ten (10) percent If the consumer price index for all urban consumers (CPI-U) for the Dallas-Fort Worth geographical regmon, as compmled by the U S Department of Labor, Bureau of Labor Statistics, is discontinued during the term of thms lease, the reraalnlng rental adjustments called for mn this section shall be made using the formula set GOWAN lease doc- Page 5 forth mn Subsection (a) above, but substztutmng the mndex nur~bers for the Consumer Price Index-Seasonally Ad3usted U S Cmty Average For All Items For All Urban Consumers (CPI-U) for the index numbers for the CPI-U applicable to the Dallas-Fort Worth geographmcal region If both the CPI-U for the Dallas-Fort Worth geographical region and the U S Cmty Average are dmscontmnued durmng the term of this lease, the remaining rental adjustments called for in thms section shall be made using the statmstlcs of the Bureau of Labor Statmstlcs of the United States Department of Labor that are most nearly comparable to the CPI-U applmcable to the Dallas-Fort Worth geographmcal region If the Bureau of Labor Statlstmcs of the Unmted 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 remamnmng rental adjustments called for in this section shall be made using the most nearly comparable statistics published by a recognmzed fmnanclal authority selected by Lessor V RIGHTS AND OBLIGATIONS OF LESSEE A USE OF LEASED PREMISES Lessee ms granted exclusmve prmvmlege to engage in or provmde the followmng the non- rental or lease of hangars facllmtmes upon the leased B STANDARDS standards 1 Address Lessee shall file wmth the Amrport Manager and keep current hms mamllng addresses, telephone numbers and contacts where he can be reached mn an emergency GOWAN lease doc- Page 6 1 Hanqar Leases and Rental The and hangar space and related premmses 2 Office Space Lease or Rental The rental or lease of offmce space mn or adjomnlng Lessee's hangars 3 Aircraft and Storaqe To provmde storage of both Lessee's and sublessees' aircraft and aviation related equipment and supplies upon or within the leased premises Lessee, his tenants and sublessees shall not be authorized to conduct any servzces not specmflcally lmsted in this agreement The use of the leased premises of Lessee, hms tenants or sublessees shall be lmmlted to only those private, commercmal, retaml or mn- dustrlal activities having to do wmth or related to amrports and aviation No person, business or corporation may operate a commer- cmal, retaml or mndustrlal business upon the premises of Lessee or upon the Amrport without a lease or lmcense from Lessor authormz~ng such commercial, retail or lndustrmal actmvmty The Lessor shall not unreasonably withhold authorization to conduct aeronautmcal or related servmces Lessee shall meet or exceed the followmng 2 3 List Lessee shall file with the Airport Manager and keep current a list of his tenants and sublessees Conduct Lessee shall contractually require his employees and sublessees (and sublessee's lnvltees) to abide by the terms of this agreement Lessee shall promptly enforce his contractual rights in the event of a default of such covenants Utllltlesf 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 Laws 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 Maintenance of Property Lessee shall be responsible for the maintenance, repair and upkeep of all property, build- lngs, 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 objectlonal 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 Palntlnq of Bulldlnqs 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 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 GOWAN lease doc- Page 7 year and month !n which the hangar{s) or bulldmng(s) are to be painted, zf needed ) Lessee shall complete the painting in accordance wmth such specifications wmthln one (1) year of receipt of notmce from lessor Lessee agrees to pay all costs and expense mnvolved mn the hangar or bumldlng palntmng process Famlure of Lessee to complete the pamntlng required by Lessor's Cmty Councml within one (1) year period shall constitute Lessee's default under thms Lease 8 10 11. 12 13 Unauthorized use of premises Lessee may not use any of the leased land or premmses for the operatmon of a motel, hotel, restaurant, private club or bar, apartment house, or for mndustrlal, commercmal or retail purposes, except as authorized herein Dwellmnqs It ms expressly understood and agreed that no permanent dwellmng or dommcmle may be bumlt, moved to or establmshed on or wlthmn the leased premmses nor may lessee, his tenants, lnvltees, or guests be permitted to reside or remain as a resident on or wmthln the leased premmses or other airport premises Quit Possession Lessee shall qumt possessmon of all premises leased heremn at the end of the prmmary term of this lease or any renewal or extensmon thereof, and deliver up the premises to Lessor in as good condmtlon as exmsted when possession was taken by Lessee, reasonable wear and tear excepted Hold Harmless Lessee shall mndemnmfy and hold harmless Lessor from and agamnst all loss and damages, mncludmng death, personal mn]ury, loss of property or other damages, armslng or resulting from the operation of Lessee's busmness mn and upon the leased premises Chemicals Lessee agrees to properly store, collect and dmspose of all chemicals and chemical resIdues, to properly store, confine, collect and dmspose of all paint, mncludlng pamnt spray mn the atmosphere, and paint products, and to comply wmth all Local, State and Federal regulations governing the storage, handlmng or dmsposal of such chemzcals and pamnts Hazardous Activities 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 permmt other persons or agents to engage mn activities which could produce hazards or obstruction to air navmgatlon, obstructions to vmsmbmllty or interference with any amrcraft navmgatmonal amd station or devmce, whether amrborne or on the ground, then Lessor shall state GOWAN lease doc- Page 8 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 not~ce, 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) fall 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 SIGNS During the term of th~s Agreement, Lessee shall have the right, at Its own expense, to place in or on the leased Premises signs ~dent~fylng 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 d~rectlonal 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 th~s 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 COVENANTS BY LESSOR Lessor hereby agrees as follows A PEACEFUL ENJOYMENT 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 th~s 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 GOWAN lease doc- Page 9 wzll not be legally liable for any action of trespass or similar cause of action by virtue of any aerzal 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 taxlways 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 taxlways 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 lnvltees, but shall not Include those activities over which it has no sollcltory 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 sub3ect Lessee to liability for any damages to the Airport that might result VIII LF2%SEHOLD 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 Ail 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 GOWAN lease doc- Page 10 Council, has approved the plans and speclflcatmons and the locatmon of the Improvements, the estimated costs of such constructmon and the agreed estimated lmfe of the bulldmng or structure Approval by the Cmty Councml shall not be unreasonably wmthheld, should the Council fall to deny Lessee's plans and specmfmcat~ons wmthln smxty (60) days of submission thereof to the Council, such plans and speclfmcatlons shall be deemed approved Documentary evmdence of the actual cost of constructmon on publac areas only (such as taxmways) shall be delmvered by Lessee to Lessor's Cmty Manager from time to tame as such costs are pamd by Lessee, and Lessor's Cmty Manager as hereby authormzed to endorse upon a copy of thms lease fmled wath the Cmty Secretary of Lessor such actual amounts as he shall have found to have been paad by Lessee, and the fmndmngs of the Caty Manager when endorsed by ham upon samd contract shall be conclusave upon all partmes for all purposes of thms agreement B ADDITIONAL CONSTRUCTION OR IMPROVEMENTS Lessee ms hereby authorazed to construct upon the land heremn leased, at his own cost and expense, bulldangs, hangars, and structures, that Lessor and Lessee mutually agree are necessary for use an connectmon wmth the operataons authormzed by this lease, provided however, before commencing the constructaon of any mmprovements upon the premises, Lessee shall submat plans and speclfacataons for approval by Lessor as speclfaed in Artacle VIII A , above C OWNERSHIP OF IMPROVEMENTS All bumldangs and improvements constructed upon the premises by Lessee shall remamn the property of Lessee unless samd property becomes the property of Lessor under the followang condatmons, terms and provasmons 1 Removal of Bulldanqs No bualdmng or permanent fmxture may be removed from the premases 2 Assumptaon All bualdangs and improvements of whatever nature remamnlng upon the leased premases at the end of the primary term, or any extensaon thereof, of thms lease shall automatmcally become the property of Lessor absolutely an fee wmthout any cost to Lessor 3 Bualdanq Lmfe It ms agreed that the lmfe of the bumldmng to be constructed by Lessee on the property herean leased ms thirty (30) years 4 Cancellataon Should thms lease be cancelled for any reason before the end of the thmrty (30) year expected bualdang lmfe, at ms especaally understood and agreed that Lessor reserves the raght to purchase all bumldmngs, structures and mmprovements then exlstmng upon the premises by tendermng to Lessee one thmrtmeth (1/30) of the undeprecmated value of such bualdang for each year remaanmng on the agreed lmfe of such bumldmng The undeprecmated value of all mmprovements as to be GOWAN lease doc- Page 11 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, 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, bulldzng 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 ~n 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 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 Azrport However, any such easements shall not mnterfere 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 GOWAN lease doc- Page 12 XI ASSIGNMENT OF T.~.~SE 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 ~f 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 INSURANCE 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 Liability insurance limits shall be in the following minimum amounts Bodlly Injury and Property Damage 5 One Million Dollars ($1,000,000) combzned single llmzts on a per occurrence basis Ail 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 polzcy 6 Ail policies must be approved by the Lessor GOWAN lease doc- Page 13 The Lessor shall be provided with a copy of all such pollcmes and renewal certmfmcates Durmng the term of this lease, Lessor herein reserves the rmght to ad]ust or increase the llabllmty mnsurance amounts requmred of the Lessee, and to require any addltmonal rider, provisions, or certmfmcates of mnsurance, and Lessee hereby agrees to provide any such mnsurance requirements as may be requmred by Lessor, provmded however, that any requirements shall be commensurate wmth mnsurance requmrements at other public use amrports smmmlar to the Denton Munmclpal Airport in size and mn scope of avmatmon actmvltles, located mn the southwestern regmon of the Unmted States Lessee heremn agrees to comply wmth all mncreased or adjusted insurance requirements that may be requmred by the Lessor throughout the ormgmnal or extended term of this lease, including types of insur- ance and monetary amounts or limits of insurance, and to comply with samd mnsurance requirements wmthmn sixty (60) days followmng the recempt of a notmce in writing from Lessor stating the increased or adjusted mnsurance requmrements Lessee shall have the rmght to mamntamn mn force both types of mnsurance and amounts of mnsurance which exceed Lessor's mmnlmum insurance requirements In the event that State law should be amended to requmre types of mnsurance and/or insurance amounts which exceed those of lmke or smmmlar publmc use amrports in the southwestern region of the United States of America, then in such event, Lessor shall have the right to requmre that Lessee mamntaln mn force types of mnsurance and/or amount of insurance as specmfmed 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 thms Lease XIII CANCELLATION BY LESSOR In the event that Lessee shall fmle a voluntary petmtmon bankruptcy or proceedings in bankruptcy shall be instituted against it and Lessee thereafter is ad]udmcated bankrupt pursuant to such proceedmngs, or any court shall take jurisdiction of Lessee and its assets pursuant to proceedings brought under the provisions of any Federal reorganmzatmon act, or Lessee shall be dmvested of its estate heremn by other operatmon of law, or Lessee shall fall to perform, keep and observe any of the terms, covenants, or condmtlons herein contamned, or on its part to be performed, the Lessor may gmve Lessee written notice to correct such condition or cure such default and, if any condmtlon or default shall continue for thmrty (30) days after the receipt of such notice by Lessee, then Lessor may terminate thms lease by written notice to Lessee In the event of default, Lessor has the right to purchase any or all structures on the leased premmses under the provmslons of Section VIII Paragraph C 4 (Cancellation) hereof GOWAN lease doc- Page 14 XIV CANCELLATION BY LESSEE Lessee may cancel thms Agreement, mn whole or part, and termm- hate all or any of mts obligations hereunder at any time, by thirty (30) days wrmtten notice, upon or after the happenmng of any one of the following events (1) issuance by any court of competent ]urlsdmctmon of a permanent injunction mn any way preventing or restraining the use of said amrport or any part thereof for amrport purposes, (2) the breach by Lessor of any of the covenants or agreements contained heremn and the famlure of Lessor to remedy such breach for a period of ninety (90) days after receipt of a wrmtten notice of the exmstence of such breach, (3) the lnabllmty of Lessee to use said premises and facllmtles continuing for a longer permod than nmnety (90) days due to any law or any order, rule or regulation of any appropriate governmental authority having ]urmsdlctlon 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 samd airport and facllmtles or any substantial part or parts thereof Upon the happenmng of any of the four events listed mn 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 lmmmted to aviation purposes, their use bemng only lmmlted by such laws and ordinances as may be applicable at that tmme XV MISCELLANEOUS PROVISIONS A ENTIRE AGREEMENT Thms Agreement constmtutes the entire understanding between the parties and as of mts effectmve date supersedes all prior or mndependent Agreements between the parties covering the subject matter hereof Any change or modlfmcatlon hereof shall be in writing signed by both partmes B BINDING EFFECT Ail covenants, stlpulatmons and agreements herein shall extend to, bind and inure to the benefmt of the legal representatIves, successors and assigns of the respective parties hereto C SEVERABILITY If a provmsmon hereof shall be finally declared void or illegal by any court or administrative agency hav- mng ~urmsdmctlon, the entire Agreement shall not be vomd, but the remaining provisions shall continue mn effect as nearly as possible in accordance wmth the orlgmnal mntent of the parties D NOTICE Any notice gmven by one party to the other mn connection with this agreement shall be in wrltmng and shall be sent by registered mall, return recempt requested, wmth postage and regzstratmon fees prepamd as follows GOWAN lease doc- Page 15 1 If to Lessor, addressed to City Manager City of Denton 215 E McKlnney Street Denton, Texas 76201 2 If to Lessee, addressed to Mr Ron Gowan 316 Darrell Road Roanoke, Texas 76262 Notices shall be deemed to have been received on the date of receipt as shown on the return receipt E HEADINGS 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 GOVERNING LAW This Agreement is to be construed in accordance with the laws of the State of Texas G MEDIATION 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 w~th 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 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 joint venture between the parties IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written GOWAN lease doc- Page 16 ATTEST ~TNI?ER~WALTERS, CITY SECRETARY Y OF ~DENTON, TEXAS CITY OF DENTON, TEXAS, LESSOR APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY CITYBY OF ~ DENTON,~.~ Ron Gowan, ~es§ee THE STATE OF TEXAS COUNTY OF DENTON § was acknowledged before me on the ~ay of ~000 ~ ~,~ss~~~ ~~s NO~PUBLIC, STATE OF TEXA My Commission Expires GOWAN lease doc- Page 17 ATTACHMENT A S 88'5,3'12" E Reference Beonng IRF/cop 0 o 1/2' IRr Bent LOT 7 LOCKHEAD LANE (Posted) 'fox~ Wo¥ B4 Aspholt I/2 IRF Bent IRS/cop LOT 9 0 05 ACRES !/2"'RF Bent 1/2 IRt Benl /2 IRt Bent RS"~'~cop 2 95 Ins/cop N 8899'17"W 50.12' IRs/cop ATTACHMENT B ]~