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1999-055 O CENO AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE AN AIRPORT LEASE AGREEMENT BETWEEN THE CITY OF DENTON AND WAYNE ALLEN CONSTRUCTION, INC TO LEASE CERTAIN PREMISES OF THE MUNICIPAL AIRPORT FOR THE PURPOSE OF CONSTRUCTING AND MAINTAINING OFFICE AND HANGAR FACILITIES THEREON, AND PROVIDING AN EFFECTIVE DATE THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS SECTION I That the City Manager is authorized to execute an airport lease agreement between the City of Denton, Texas and Wayne Allen Construction, Ine, to lease certmn premises of the Mumclpal Airport for the purposes of and constructing and malntalmng an office and hangar facilities thereon, under the terms and conditions contained within this Agreement, which ts attached hereto and made a part hereof SECTION II That this ordinance shall become effective immediately upon its passage and approval PASSED AND APPROVED this the/~J~____~ day of--~,qdd~41~/--- , 1999 J~VlILLER, MAYOR ATTEST JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY AIRPORT LEASE AGREEMENT COMMERCIAL OPERATOR THE STATE OF TEXAS § § KNOW ALL MEN BY THESE PRESENTS COUNTY OF DENTON § This lease is made and executed thls/~ day of ~ 1999, at Denton, Texas, by and between the City of Dent'on, Texa~/. · a municipal corporation, hereinafter referred to as "Lessor", Wayne Allen Construction, Inc , having his principal offices at 100 North Locust, Suite 1, Denton, Texas 76201, hereinafter referred to as "Lessee" WITNESSETH~ 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 sa~d a~rport and construct and maintain an a~rcraft 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. CONDITIONS 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 OF OPERATIONS The right to conduct aeronautical activities for furnishing services to the public is granted to Lessee sub3ect to Lessee agreeing 1 To furnish said services on a fair, equal and not un3ustly discriminatory basis to all users thereof, and 2 To charge fair, reasonable and not un3ustly 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-DISCRIMINATION Lessee, for h~mself, 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 Page 1 of 18 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 OF INDIVIDUALS 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 T~tle 49 U S C Appendix §1349 E PUBLIC AREAS i Lessor reserves the right to further develop or ~mprove the landing area of the airport as it sees fit, regardless of the desires or v~ews 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 Page 2 of 18 provmszons of th~s mnstrument mnsofar as they are mncons~stent wmth the provmsmons of the lease to the Government, shall be suspended 4 Lessor reserves the rmght to take any actmon at considers necessary to protect the aermal approaches of the airport agamnst obstruction, together wzth the rmght to prevent Lessee from erectmng, or permmttmng to be erected, any building or other structure on or ad]acent to the amrport whmch, mn the oplnmon of Lessor, would lmmlt the usefulness or safety of the amrport or constmtute a hazard to amrcraft or to amrcraft navmgatmon 5 This Lease shall be subordmnate to the provmsmons of any exmstzng or future agreement between Lessor and the Unmted States or agency thereof, relatmve to the operatmon or mamntenance of the amrport II. LEASED PRAISES Lessor, for and mn conslderatmon of the covenants and agree- ments here~n contamned, to be kept by Lessee, does hereby demise and lease unto Lessee, and Lessee does hereby hare and take from Lessor, the followmng described land satuated an Denton County, Texas A LAND A tract of land, bemng approxzmately 11,000 square feet, or 0 253 acres, drawn and outlmned on Attachment "A" as Lot lA, and legally descrmbed mn Attachment "B," such attachments bemng ~ncorporated heremn by reference B A tract of land, being approxmmately 8,800 square feet, or 0 202 acres, drawn and outlmned on Attachment UA" as Lot lB, and legally descrabed mn Attachment KB," such attachments being mncorporated heremn by reference C Rmght ~ First Refusal to Lease Lot 2 and Lot 4 Provided that,6,,d for so long as Lessee constructs or has u~der construction a hangar fac~lmty no less than 3,500 square feet on Lot lA and a hangar facmlmty no less than 2,500 square feet on Lot lB, and mmprovements thereon, Lessee shall have a rmght of fmrst refusal on any lease negotiated on that tract of land mdentmfmed and descrmbed on Attachment nC" as Lot 2 and Lot 4, each measurzng 80 feet by 110 feet, approxmmately 8,800 square feet mn area or a total of 17,600 square feet The Lessor shall notify Lessee, mn wr~tmng, of any bonafmde offer on lease options wmth third partmes on the ~dentmfzed Lot 2 and Lot 4 Lessee shall have thirty (30) days to exercise mts rzght of flrst refusal on Lot 2 and Lot 4 Terms of the agreement shall be smmllar to those ~dent~fzed for Lot lB In no event Page 3 of 18 shall this right of first refusal extend more than two (2) years past the initial execution of this Agreement Together with the right of ingress and egress to said proper- ty, 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 C IMPROVEMENTS PROVIDED BY LESSOR NONE There will be no zmprovements 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 Ail Lessor improvements must be described in detail above, or above referenced and attached to this Agreement in an exhibit approved by Lessor D IMPROVEMENTS PROVIDED BY LESSEE On Lot lA, Lessee shall construct a hangar/office facility not less than 3,500 square feet with tax1way access and appropriate culverts or drainage as required by City ordinances in the utzllty right of way south and west of the proposed hangar as well as other improvements as determined necessary by City ordinances On Lot lB, Lessee shall also construct a hangar/office facility not less than 2,500 square feet with similar infrastructure improvements as outlined for Lot lA above E EASEMENTS Lessor and Lessee by mutual agreement may establish, on the leased premises, easements for public access on roads and taxlways F 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 for usual and customary service on the leased premises Lessor shall make required sewer l~nes available to Lessee by October 15, 1999 Sewer lines will be within one hundred (100) feet of the leased premises Lessee will be required to connect to said sewer line within slx (6) months of completion of said sewer line Page 4 of 18 III. TERM The term of this Agreement shall be for a period of thirty (30) years, commencln~ on the 1st day of March, 1999, and continu- ing through the 28th~ Day of February, 2029 , 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 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 RENTAL shall be due and payable in twelve (12) equal monthly installments in the sum in advance, on or before the 1'= 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 1"t day of March each and every year of this lease 1 3/1/99 $0 06 per square foot minimum yearly rental, ad3usted annually per paragraph IV C Lot lA and Lot lB 2a. 3/1/04 The current lease rate (previous year's rental) will be Increased by an additional $0 09 per square foot, and then adjusted annually per paragraph IV C for Lot iA 2b 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 IV C for Lot lB 3a 3/1/14 The current lease rate (previous year's rental) will be increased by an additional $0 03 per square foot, and then adjusted annually per paragraph IV C for Lot lA 3b 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 for Lot lB Notwithstanding the foregoing, the annual lease rental to be Page 5 of 18 reduced by the current lease rate per square foot, times the number of square feet comprising all easements established ~n accordance with Article II(D) B LESSOR IMPROVEMENTS RENTAL~ NONE There are no Lessor ~mprovements 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 C~ty of Denton, Accounts Receivable, 215 E McK~nney, Denton, Texas, unless otherwise deslgnated ~n writing by the Lessor If payments are not received before or on the 15th, a f~ve (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 w~ll be due A one (1) percent charge will be added on the 1st of each subsequent month until the unpaid rental/fee payment zs made Failure to pay the rent or penalty amounts on delinquent rent shall constitute an event of default of th~s lease The yearly rental for land and improvements herein leased shall be readjusted at the end of each one (1) year perlod during the term of this lease on the basis of the proportion that the then current Un,ted 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 ~s based upon the formulae set forth zn Sectzon IV A for the land herein leased Each rental adjustment, if any, shall occur on the 1st day of March, beginning 2000, and every year thereafter on such date The adjustments ~n the yearly rent shall be determined by multIplying the minimum yearly rent as set forth ~n Section IV A by a fraction, the numerator of which ls the zndex number for the last month prior to the adjustment, and the denominator of which · s the ~ndex number applicable at the execution of th~s lease If the product of th~s multiplication is greater than the m~n~mum yearly rent as set forth in Section IV A , Lessee shall pay th~s greater amount as the yearly rent until the time of the next rental ad]ustment as called for ~n this section If the product of this multiplication ~s less than the m~nlmum 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 previous year's annual rent untzl the t~me of the next rental ad3ustment as called for in th~s sectlon In no event shall any rental adjustment called for in th~s section result ~n an annual rent less than the previous year's annual rent The adjustment shall be lzmlted so that the annual rental payment determined for any g~ven year shall not exceed the annual rental payment calculated for the previous year by more than ten (10) percent Page 6 of 18 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 d~scontlnued during the term of th~s lease, the remaining rental adjustments called for in th~s section shall be made using the formula set forth ~n Subsectlon (a) above, but substituting the index numbers for the Consumer Price Index-Seasonally Adjusted U S City Average For Ail 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 th~s section shall be made using the statistics of the Bureau of Labor Statistics of the Un,ted 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 Un,ted States Department of Labor ceases to ex~st or ceases to publish statistics concerning the purchasing power of the consumer dollar during the term of th~s lease, the remaining rental adjustments called for ~n th~s 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 USE OF LEASED PREMISES Lessee ~s granted the non- exclusive pravilege to engage in or provide the following 1 Han~ar Leases and Rental The rental or lease of hangars and hangar space and related fac~l~tles upon the leased premises 2 Office Space Lease or Rental The rental or lease of office space in or adjoining Lessee's hangars 3 Aircraft and Storage To provide storage of both Lessee's and sublessee's 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 services not specifically listed ~n this agreement The use of the leased premises of Lessee, h~s tenants or sublessees shall be llmlted to only those private, commercial, retail or ~ndustrlal activities hav~ng to do w~th or related to airports and aviation No person, bus~ness or corporation may operate a commercial, retail or ~ndustr~al business upon the premises of Lessee or upon the Airport without a lease or l~cense from Lessor authorizing such commercial, retail or industrial actlvlty The Lessor shall not unreasonably withhold authorization to conduct aeronautical or related services Page 7 of 18 B STANDARDS Lessee shall meet or exceed the followang standards 1 Address Lessee shall file with the Airport Manager and keep current his ma~l~ng addresses, telephone numbers and contacts where he can be reached in an emergency 2 List Lessee shall file with the Airport Manager and keep current a llst of has tenants and sublessees 3 Conduct Lessee shall contractually require h~s employees and sublessees (and sublessee's lnvltees) to ab~de by the terms of thas agreement Lessee shall promptly enforce h~s contractual rights ~n the event of a default of such covenants 4 Utilities, Taxes and Fees Lessee shall meet all expen- ses and payments in connectaon with the use of the Premi- ses and the r~ghts and prlvaleges herein granted, zncludlng the tamely payment of utllat~es, taxes, permit fees, lzcense fees and assessments lawfully lev~ed or assessed 5 Laws Lessee shall comply with all current and future f-~-~ral, state and local laws, rules and regulatzons which may apply to the conduct of bus~ness contemplated, znclud~ng rules, regulations and ordanances promulgated by Lessor, and Lessee shall keep an effect and post in a promanent place all necessary and/or required lacenses or permits 6 Maintenance of Property Lessee shall be responsible for the maintenance, repair and upkeep of all property, buildings, structures and improvements, ~ncludlng the mowing or elimination of grass and other vegetation on the Premises, and shall keep saad Premises neat, clean and in respectable condition, free from any objectionable matter or thing Lessee agrees not to utal~ze or permit others to utilize areas on the leased premases whach are located on the outside of any hangar or bualdlng for the storage of wrecked or permanently d~sabled aircraft, aircraft parts, automobiles, vehicles of any type, or any other equipment or ~tems which would d~stract 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 7 Pamntln~ of Buald~n~s During the orlganal term of th~s Lease and during each extension, Lessor shall have the right to requlre, not more than once every flve years, that the metal exterior of hangar(s) or building(s) located on the premises be reviewed by the A~rport Page 8 of 18 Advisory Board for the purpose of determining whether painting of the exteriors of such buildings or hangars ~s necessary If the A~rport Advisory Board determines painting ~s necessary, ~t 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 ~n which the hangar(s) or building(s) are to be painted, ~f needed ) Lessee shall complete the painting ~n accordance with such specifications w~thln one (1) year of receipt of notice from lessor Lessee agrees to pay all costs and expense ~nvolved ~n the hangar or building painting process Failure of Lessee to complete the painting required by Lessor's Clty Council w~th~n one (1) year per~od shall constitute Lessee's default under this Lease 8 Unauthorized use 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 ~ndustr~al, commercial or retail purposes, except as authorized herein 9 Dwellings It ~s expressly understood and agreed that no permanent dwelling or domicile may be built, moved to or establlshed on or w~thln the leased premises nor may lessee, his tenants, lnv~tees, or guests be permItted to reslde or remain as a resident on or w~thln the leased premises or other a~rport premises 10. Qult Possession 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 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 ~ndemn~fy and hold harmless Lessor from and against all loss and damages, ~nclud~ng death, personal ln]ury, loss of property or other damages, arising or resulting from the operation of Lessee's business ~n and upon the leased premises 12 Chemicals Lessee agrees to properly store, collect and dispose of all chemicals and chemical residues, to properly store, confine, collect and dispose of all paint, including paint spray in the atmosphere, and palnt products, and to comply with all Local, State and Federal regulatlons governing the storage, handling or disposal of such chemicals and paints Page 9 of 18 13 Hazardous Activities Should Lessee violate any law, rule, restriction or regulation of the City of Denton or the Federal Aviation Admln~strat~on, or should the Lessee engage ~n or permit other persons or agents to engage in activities which could produce hazards or obstruction to air navigation, obstructions to visibility or ~nterference w~th any a~rcraft navigational aid station or device, whether a~rborne or on the ground, then Lessor shall state such violation in writing and deliver written not,ce 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 v~olatlon(s) cease and desist from all such activity creating the vlolat~on(s) In such event, Lessor shall have the right to demand that corrective action, as required, be commenced immediately to restore the leased premises ~nto 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 ~mmed~ately commence correcting the violation(s), and to complete sa~d corrections within twenty-four (24) hours following written not~f~catlon, 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 this Agreement, Lessee shall have theft, at its own expense, to place in or on the leased Premzses signs Identifying Lessee Said signs shall be of a size, shape and design, and at a location or locations, approved by the Lessor and ~n conformance with any overall d~rect~onal graphics or sign program established by Lessor for the Airport Lessor's approval shall not be withheld unreasonably Sa~d s~gns 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 1ts 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 r~ghts and privileges here~n granted, Page 10 of 18 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 ls 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 sixty thousand (60,000) pound continuous use weight bearing capacity of the runway and certain 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 wezght of Its fuel, of sixty thousand (60,000) pounds until such time that the runway and designated taxlways on the Airport have been improved to handle aircraft of such excessive weights Additionally, the weight bearing capacity of the access taxlway adjacent to Lot lA is 30,000 pounds or less and the access taxlway adjacent to Lot lB is 15,000 pounds or less 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. LEASEHOLD IMPROVEMENTS A REQUIREMENTS Before commencing the construction of any improvements upon the premises, Lessee shall submit Page 11 of 18 1 Documentation, specifications, or design work, to be approved by the Lessor, which shall establish that the amprovements to be built or constructed upon the leased premises are ~n conformance w~th the overall saze, shape, color, quality and desagn, in appearance and structure of the program established by Lessor on the A~rport 2 All plans and speclf~cataons showing the locataon upon the premises of the proposed construction, 3 The estimated cost of such construction No construction may commence until Lessor, acting by ~ts C~ty Council, has approved the plans and specifications and the location of the ~mprovements, the estimated costs of such construction and the agreed estimated l~fe of the building or structure Approval by the C~ty Council shall not be unreasonably w~thheld, should the Council fall to deny Lessee's plans and spec~f~cataons w~th~n saxty (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 tax,ways) shall be delivered by Lessee to Lessor's C~ty Manager from t~me to t~me as such costs are pa~d by Lessee, and Lessor's Clty Manager is hereby authorized to endorse upon a copy of this lease f~led w~th the C~ty Secretary of Lessor such actual amounts as he shall have found to have been paad by Lessee, and the fandangs of the Caty Manager when endorsed by ham upon saad contract shall be conclusive upon all part~es for all purposes of th~s agreement B ADDITIONAL CONSTRUCTION OR IMPROVEMENTS Lessee ~s hereby authorized to construct upon the land herein leased, at bls own cost and expense, buildings, hangars, and structures, that Lessor and Lessee mutually agree are necessary for use ~n connection w~th the operations authorized by th~s lease, provided however, before commencing the construction of any ~mprovements upon the premmses, Lessee shall submzt plans and specifications for approval by Lessor as specified an Article VIII A , above C OWNERSHIP OF IMPROVEMENTS All buildings and ~mprovements constructed upon the premises by Lessee shall remain the property of Lessee unless sa~d property becomes the property of Lessor under the following condzt~ons, terms and provzslons 1 Removal of Buzldan~s No building or permanent f~xture may be removed from the premises 2 Assumption All bulld~ngs and ~mprovements of whatever nature rema~nlng upon the leased premises at the end of the primary term, or any extension thereof, of th~s lease shall automatlcally become the property of Lessor Page 12 of 18 absolutely in fee without any cost to Lessor 3 Bulldln~ L1fe It is agreed that the life of the building to be constructed by Lessee on the property here~n leased is thirty (30) years 4 Cancellatlon Should th~s lease be cancelled for any reason before the end of the thirty (30) year expected building l~fe, it is especially understood and agreed that Lessor reserves the right to purchase all bu~ldlngs, structures and ~mproYements then existing upon the premises by tenderlng to Lessee one thirtieth (1/30) of the undepreclated value of such building for each year rema~nlng on the agreed life of such building The undeprec~ated value of all improvements is to be determined by hav~ng such improvements appraised by three appraisers, one appointed by Lessor, one appointed by Lessee and one appolnted 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 ~n sa~d hangar, structure, building or improvement shall, upon default of Lessee~s obligations to said mortgagee, have the right to enter upon said leased premlses and operate or manage sa~d hangar, structure, building or improvement according to the terms of this Agreement, for a per~od not to exceed the term of the mortgage w~th Lessee, or until the loan ~s 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 r~ght of the mortgagee referred to herein is l~m~ted and restricted to those improvements constructed with funds borrowed from mortgagee, those improvements purchased with the borrowed funds, and those ~mprovements pledged to secure the ref~nanclng of the improvements B Lessee shall have the right to place a first mortgage lien upon the leasehold ~n 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 a~rport property or for the construction of public facilities on the Airport However, any such easements shall not interfere w~th Lessee~s use of the leased premlses and Lessor shall restore the property to original condlt~on upon the installation of any Page 13 of 18 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 th~s 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 t~e-down space, without the written consent of Lessor Lessor agrees that ~t w~ll not unreasonably withhold 1ts 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, l~cense, 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 INSURANCE Lessee shall maintain continuously in effect at all times during the term of this agreement, at Lessee~s expense, the follow2ng insurance coverage 1 Comprehensive general liability covering the leased premises, the Lessee or ~ts company, its personnel, and · ts 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 Bodily In3ury and Property Damage One Million Dollars ($1,000,000) combined single limits on a per occurrence basis 5 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 Page 14 of 18 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 thls lease, Lessor here~n reserves the right to adjust or lncrease the l~abll~ty insurance amounts required of the Lessee, and to require any additional rider, provisions, or cert~flcates of ~nsurance, and Lessee hereby agrees to provide any such lnsurance requirements as may be requlred by Lessor, provided however, that any requirements shall be commensu- rate wlth ~nsurance requzrements at other public use airports similar to the Denton Municipal Airport ~n size and ~n scope of aviation actlv~t~es, located ~n the southwestern region of the United States Lessee herein agrees to comply with all increased or adjusted lnsurance requirements that may be requlred by the Lessor throughout the orlglnal or extended term of thls lease, including types of insurance and monetary amounts or limits of · nsurance, and to comply w~th sa~d insurance requirements w~thln sixty (60) days following the receipt of a not~ce ~n writing from Lessor stating the zncreased or adjusted ~nsurance requirements Lessee shall have the rzght to maintain ~n force both types of insurance and amounts of insurance which exceed Lessor's mlnlmum 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 Un,ted States of America, then in such event, Lessor shall have the right to require that Lessee maintain in force types of · nsurance and/or amount of insurance as specified by State law Failure of Lessee to comply w~th the minimum specified amounts or types of insurance as requlred by Lessor shall constitute Lessee's default of this Lease XIII. CANCELLATION BY LESSOR In the event that Lessee shall file a voluntary petition in bankrugtcy or proceedings in bankruptcy shall be instituted against ~t and Lessee thereafter ~s ad~udlcated bankrupt pursuant to such proceedings, or any court shall take jurisdiction of Lessee and 1ts assets pursuant to proceedings brought under the provisions of any Federal reorganization act, or Lessee shall be divested of 1ts estate herein by other operation of law, or Lessee shall fall 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 Page 15 of 18 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 in]unction 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 sa~d premises and facilities continuing for a longer period than n~nety (90) days due to any law or any order, rule or regulation of any appropriate governmental authority hav~ng 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 sa~d 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 avlatlon purposes, then the Lessee may cancel this lease as aforesaid, or may elect to continue this lease under its terms, except, however, that the use of the leased premises shall not be limited to aviation purposes, their use being only limited by such laws and ordinances as may be applicable at that time XV. MISCELLANEOUS PROVISIONS A ENTIRE AGREEMENT This Agreement constitutes the entire understanding between the parties and as of 1ts effective date supersedes all prior or independent Agreements between the parties covering the subject matter hereof Any change or modification hereof shall be in writing signed by both parties B BINDING EFFECT All covenants, stipulations and agree- ments 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 Page 16 of 18 having jurisdiction, the entire Agreement shall not be void, but the remaining provisions shall continue in effect as nearly as possible in accordance with the original intent of the parties D NOTICE Any not~ce given by one party to the other in connectzon ~-~h th~s agreement shall be in writing and shall be sent by registered mall, return receipt requested, wlth postage and registration fees prepaid 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 Mr Wayne Allen Wayne Allen Construction, Inc 100 North Locust, Suite 1 Denton, TX 76201 Notices shall be deemed to have been received on the date of receipt as shown on the return receipt E HEADINGS The headings used ~n this Agreement are · ntended--~ convenlence of reference only and do not define or limit the scope or meanlng of any provision of this Agreement F GOVERNING LAW This Agreement ~s to be construed in accordance with the laws of the State of Texas G MEDIATION The part~es may agree to settle any disputes under this lease by submzttlng the dispute to mediation or other means of alternate dispute resolution No mediation or alternate dispute resolution, arlsmng out of or relating to thls lease, involving one party's disagreement may include the other party to the disagreement without the other's approval 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 walver of any subsequent default or breach of the same or any other covenant or term of th~s Agreement I INDEPENDENT CONTRACTOR During all times that this Lease · s ~n 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 ~ndependent contractor and bt is mutually agreed that nothlng contained here~n shall be deemed or construed to Page 17 of 18 constitute a partnership or joint venture between the part~es IN WITNESS WHEREOF, the part~es have executed th~s Agreement as of the day and year f~rst above written CITY OF DENTON, TEXAS LESSOR JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY LESSEE PRESIDENT & TREASURER THE STATE OF TEXAS § COUNTY OF DENTON § lnstrument was acknowledged before me on the ~/C~day of ~c~ , 1999 by LESSEE Page 18 of 18 ATTACHMENT "A" / -'~- - ~- --"~' - ~7- ,.~ ~,,~ 888'30,0 Esooo ..,'"~'~"" ~-_ __~ - I I LOT 3 I LOT lA ~ LOT lB I ms,c.. ATTACHMENT "B" I)F,~( lllP I Lt)l IA AIl thai e~nln t~oI of I~nd ~lluat~l In ll~e ~lllt~m H~II ~'~y. Ah~l~I ~ ~70, City of Denlon~ Addition !o die Cily of Dent6n, De,lion Co~mly, I e~.~ ~ ~e~O~d~(I in ('~l~iuel (l, P~e ~9~ of Ihe ~ I rollowa B~OINNING for dm ~oull~e~l comes ~fflhe hnel being described Impel. r.d .el, flum wl,loh. ~nmele n mm,,,ent ro.,,d al Ihe Northwest c,~mer Hoflh 09 De~ees 41 ~nult~ I~ ~e~nd~ We~l n di~l~ne~ of 1701 91 ll~NCE Norlh 01 Degree, 21 Mlnules 50 Sece.d~ l'.sl a dhla.ce of ~pped bon tod scl for I11ENCE ~oull~ 88 De~ees 36 Minme~ 10 ~omh ~sl. dial.nee or 100 00 feet to. %" c~pp~ I~o,, rod scl R~ II~NCE 8otJll~ 01 Degrees 23 Mlnule~ s0 Seoond~ We~! a d~l~,toe ol 110 00 r~l Io a ~.~" capped ho. ~od sel For ~mer, ~]~NCB Notlh ~B Degrees t6 Mlnule~ 10 ~o~tds Wesl a dlslan~ PLACE OF UBOINNIHO a.d enclosing 0 25 .eres of I~,,d more or les. DE$CRIP rlON 0 20 ACRF LOT lB All II ,al collaln Iract of land ellualed .1 rite William Nell Survey, Abstract ti 9/'0, City of Denton, Denlon County, Texas and being a pad of Lol '1, Block 1 of $oulhea$l Alrpod Addlllon, an Addition Io Ihs City of Denton, Denton Counly, Texas as recorded In Cabinet O, Page 2g§ gl the Hal Records of Denlon Counly, Texas, Ihs subject tracl being more perbculerly described ae follows, D['GIl',ININO~for the Soulhwest comer of the Irecl being described herein al a ½" capped iron rod set for corner from which e concrete monument found at the Nodhwesl comer of ee~d Addition bears North 12 Degrees F:~ Minutes 52 Seconds Wesl a dlelance of 1125 93 loot fl IENCE North 01 Degree 23 M~nules 50 Seconds East a dislance of 1 i0 O0 feel Io a W' capped iron rod set for comer, I'l IENCE South 08 Degrees 36 Minutes 10 Seconds Easl a dmlance of 80 O0 feet Io a s,V' cappoJ ,,on rod Scl for corner, ]HE NCE South 01 Degree 23 Minute 50 Second West a dmlance o! 110 O0 foot to a ½" capped iron rod set for corner, ]'11ENCE N0dh 88 Degrees 36 M~nutes 10 Seconds West a distance of 80 00 feel to the PLACE OF BEGINNING and enclosing 0 20 of an acre of lend more or less