HomeMy WebLinkAboutContract 49525 897 CITY SECRETARY
11#T SPINKS AIRPORT, FORT WORTH TEXAS CONTRACT NO.
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RFCEjV H AR SUBLEASE ESTOPPEL NON-DISTURBANCE AND ASSIGNMENT
a 8 J AGREEMENT
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t1 95 his ESTOPPEL, NON-DISTURBANCE, AND ASSIGNMENT AGREEMENT (the
�� 6 $" greement") is made and entered into by the CITY OF FORT WORTH, a Texas Home-Rule
Municipal Corporation ("City"), SPINKS WESTSIDE ASSOCIATES, LLC, a Texas Limited
Liability Company ("Lessee"), and TIGER AVIATION, LLC, a New Mexico Limited Liability
Company, acting by and through FRANK SEIDLER("Current Sublessee").
RECITALS
The following introductory provisions are true and correct and form the basis of this
Agreement:
A. On September 29, 2006, Lessee entered into an unimproved Ground Lease with Mandatory
Improvements (hereinafter the "Ground Lease") with the City (CSC No. 34065). On June
2, 2008, the Ground Lease was amended (hereinafter "Amended Lease") (CSC No.
37154). The Ground Lease and the Amended Lease are hereinafter collectively referred to as
the "Master Lease," attached hereto and incorporated herein as Exhibit "C." The real
property, which is the subject of the Master Lease, consists of four(4) hangar sites identified
as Lease sites W-3 through W-6 inclusive, located at Spinks Airport in the City of Fort
Worth.
B. On or about September 2008 Lessee completed construction of the aircraft storage hangar
building on Lease Site W-6, known and referred to as 13745 Wing Way, Fort Worth, Texas,
consisting of five (5) individual hangars within a multi-unit aircraft hangar building
identified as hangar units A-E.
C. On November 7, 2008, the City of Fort Worth Aviation Department approved, as to form
only, that certain HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY
AGREEMENT as an approved instrument to memorialize the sale to third persons of a
Leasehold Interest as a Sublessee in individual hangar units within the completed aircraft
storage hangar buildings defined in the Master Agreement as "Mandatory Improvements."
D. On January 22, 2009, Lessee and Sublessee entered into those certain Hangar Sublease and
Exclusive Occupancy Agreements governing Hangars A and B, attached hereto as Exhibit
"A-1" and Exhibit"A-2" (the "Hangar Leases").
E. Sublessee has assigned all rights under the Hangar Leases to Current Sublessee.
F. On December 6, 2016, the City Council of the City of Fort Worth adopted Mayor and
Council Communication(M&C) C-28022, authorizing the termination of thEOFFICIAL
er ease.
RECORD
SECRETARY WORTH,TX
G. City and Lessee have agreed to terminate the Ground Lease pursuant to that certain
termination Agreement attached as Exhibit"B"and incorporated herein.
H. It is the desire of the Parties that Current Sublessee be allowed to continue the terms of the
Hangar Leases and that City will assume the rights and obligations of Lessee under the
Hangar Leases.
THEREFORE, in considerations of the covenants and agreements contained below, the
parties to this Agreement agree as follows:
AGREEMENT
1. ESTOPPEL
Lessee and Current Sublessee hereby warrant and represent to and agree with City as
follows,with the understanding that City is relying on these warranties,representations,
and agreements in connection with its transaction as follows:
a. Current Sublessee is the tenant under the Hangar Leases,attached hereto as Exhibit
"A-1"and Exhibit"A-2"
b. The attached Exhibit"A-1"and Exhibit"A-2"contain true, correct, and complete
copies of the Hangar Leases and all amendments to the Hangar Leases.
c. The Hangar Leases are in full force and effect.
d. The Commencement Date of the term of the Hangar Leases are January 22, 2009,and
the term of the Hangar Leases will expire on December 31, 2036,unless Current
Sublessee exercises either or both 5 year renewal terms or the Hangar Leases are
sooner terminated as provided in the Hangar Leases.
e. Current Sublessee is in possession of the premises leased to it under the Hangar
Leases and Lessee has complied fully and completely with all of its covenants,
warranties and other undertakings and obligations under the lease to this date,with
the result that Sublessee is fully obligated to perform,and is performing, all of the
other obligations of Tenant under the Hangar Leases,without right of counterclaim,
offset,defense or otherwise.
f. Current Sublessee has not made any prepayment of rent under the Hangar Leases and
there are no offsets,defenses, counterclaims or credit against the rentals due under the
Hangar Leases.
g. A security deposit has been made with Lessee in the amount of$0.00.
h. There are no side letters or other agreements,whether or not constituting amendments
to the Hangar Leases, for tenant inducements such as rebates of or reductions in the
rental provided for in the Hangar Leases [except as follows:N/A]
i. Except as specified in the Hangar Leases,Current Sublessee has no rights of first
refusal in connection with the Leased Premises.
j. To Current Sublessee's knowledge, neither Lessee nor Sublessee is in default under
the Lease and no event has occurred which with notice or the passage of time will
become a default under the Hangar Leases.
k. Current Sublessee has not, and is not preparing to, declare bankruptcy or begin
reorganization proceedings.
1. This Agreement inures to the benefit of City and is binding upon Current Sublessee
and Current Sublessee's legal representatives, successors and assigns.
2. NON-DISTURBANCE AND ASSIGNMENT OF INTEREST
City, Lessee, and Current Sublessee, agree as follows:
a. Lessee agrees to release and assign all of its interest in the Hangar Leases from the
Effective Date forward to City.
b. City hereby accepts and assumes all obligations and liabilities of Lessee under the
terms of the Hangar Leases and agrees to be bound by all the terms,provisions, and
covenants thereof.
c. Current Sublessee agrees and acknowledges that all privileges,rights,obligations,
and responsibilities(including,but not limited to the payment of rent)owed to Lessee
under the Hangar Leases shall be owed to City,beginning on the Effective Date of
this Agreement.
d. City and Current Sublessee agree to be bound by all terms and conditions contained
in the Hangar Leases as though City were Lessee.
e. Notices to City shall be given at the following address:
Aviation Department
201 American Concourse
Suite 330
Fort Worth,Texas 76106
f. All other provisions of the Hangar Leases shall remain in full force and effect.
g. The Effective Date of this Agreement shall be February 1,2017.
CERTIFICATE OF INTERESTED PARTIES FORM 1295
1of1
Complete Nos.i-4 and 6 if there are interested parties. OFFICE USE ONLY
Complete Nos,1,2,3,5,and 6 if there are no interested parties. CERTIFICATION OF FILING
1 Name of business entity filing form,and the city,state and country of the business entity's place Certificate Number:
of business. 2017-212624
Tiger Aviation,LLC
Alto,NM United States Date Filed:
2 Name of governmental entity or state agency that is a party to the contract for tcthe form is 05/23/2017
being filed.
City of Fort Worth Date Acknowledged:
3 Provide the identification number used by the governmental entity or state agency to track or identify the contract,and provide a
description of the services,goods,or other property to be provided under the contract.
13745 Wing Way Hangar A and B
Non-Disturbance Agreement
4 Nature of interest
Name of Interested Party City,State,Country(place of business) (check applicable)
Controlling Intermediary
Seidler,Frank Alvarado,TX United States X
5 Check only if there is NO Interested Party. ❑
6 AFFIDAVIT
I swear,or affirm,u �pett�Tpequ-'ry,t a'Tie sure is true and correct.
CATHY SAVAGE
Notory Public,Stote of Texos J
/ My Commission Expires
February 19, 2019 Signature of autho zed agent of contracting business entity
AFFIX NOTARY STAMP/SEUL ABOVE
Sworn to and subscribed before me,by the said aftf" this the -day of
204_,to certify which,witness my hand and seal of office.
/Y O
Signature of o ring oath Printed n e of officer administering oath Tide of officer admini ring oath
Forms provided by Texas Ethics Commission www.ethics.state.tx.us Version V1.0.883
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the.l*
day of 2017.
CITY OF FORT WORTH:
By:
Fernando Costa
Assistant City Manager
Date: 8/177
STATE OF TEXAS §
COUNTY OF TARRANT §
BEFORE ME, the undersigned authority, a Notary Public in and for the State of Texas,
on this day personally appeared Fernando Costa, known to me to be the person whose name is
subscribed to this Agreement, and acknowledged to me that the same was the act of the City of
Fort Worth and that he executed the same as the act of the City of Fort Worth for the purposes
and consideration therein expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this W14 day
/7 , 2017.
TRIKINYA L JOHNSON _�_//,A/
?:°;' Notary Public, State of Texas
Comm.Expires 04-17-2018 Notary Publici d for the
°�•,,,,,,,,,•� Notary ID 1238832.0 State of Texas
APPROVED AS TO FORM ATTEST: OFFOR).�
A GALI Y:
By. By: AR, U 2
Paige bane MaryJ. r * :'
Assistant City Attorney City Secre ary
M&C: c_p�0 3D
Approval Date:
1295 Cert. No.: 617-2/a iP24
OFFICIA4 RECORD
CITY S
ECRETARY
T.WORTH,Tx
Contract Compliance Manager:
By signing, I acknowledge that I am the person responsible for the monitoring and
administ 'on of this contract, including ensuring all performance and reporting requirements.
.
Anne- rie Stowe /��✓U
Title
LESSEE: ATTEST:
SPINKS AIR CIATES,
By: By:
Darrell Clendene ,
Managing Member
Dater 7
STATE OF §
COUNTY OF §
BEFORE ME, the undersigned authority, a Notary Public in and for the State
of , on this day personally appeared Darrell Clendenen, known me to be
the person whose name is subscribed to this Agreement, and acknowledged to a that the same
was the act of Spinks Air Associates,LLC,and that s/he executed the s e as the act of Spinks
Air Associates, LLC, for the purposes and consideration therein ressed and in the capacity
therein stated.
GIVEN UNDER MY HAND AND SE OF OFFICE this day
7.
Notary Public in and for the
State of
.............................._.__-----__-----
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On before me, Gen Cress ,Notary Public,
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(Here insert name and title of the officer)
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j s
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph
is true and correct.
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comm.f 2041594 N
NOTARY PUBLIC-CALIFORNIA
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(Notary Seal)
OMY Comm.EXP.SEPI l
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SUBLESSEE:
TIGER AVIATION, C
By: l p
Name: f/^Q x � O�f 'G✓'
Title: fre�ftj"�-
Date:
T—12 17
STATE OF �r"4S §
COUNTY OF J,'jtA1.5,o §
BEFORE ME, the undersigned authority, a Notary Public in and for the State of Texas,
on this day personally appeared Frank Seidler, known to me to be the person whose name is
subscribed to this Agreement, and acknowledged to me that the same was the act of Tiger
Aviation, LLC, and that s/he executed the same as the act of Tiger Aviation, LLC, for the
purposes and consideration therein expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this /� day
QjL ,2017.
n�
CATHY SAVAGE
• TN. A
=_ Notary Public,state of Texas Notary Public in and for the
�- My Commission Expires
February 19, 2019 State of rd
Rmxhibi� A.-I
SPINKS AIRPORT, FORT WORTH, TEXAS
HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
This SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT (the "Sublease") is made and
entered into by and between SPINKS WESTSIDE ASSOCIATES, LLC a Texas Limited Liability Company
("Sublesssor")and NEWSTART CONSTRUCTION,INC.,a Texas Corporation("Sublessee"),and
WHEREAS, On September 29, 2006 Sublessor as the Lessee, entered into an unimproved Ground
Lease with Mandatory Improvements (hereinafter the "Ground Lease") with the City of Fort Worth, Texas
(hereinafter the "City"), which was entered into the books and records of the City as Contract No. 34065. On
June 2, 2008 the Ground Lease was amended (hereinafter "Amended Lease") and the Amended Lease was
entered into the books and records of the City as Contract No 37154. The Ground Lease and the Amended
Lease are hereinafter collectively referred to as the "Master Lease". The real property, which is the subject of
the Master Lease,is four(4)hangar sites identified as Lease sites W-3 through W-6 inclusive, located at Spinks
Airport in the City of Fort Worth, State of Texas, commonly known and referred to as 13601, 13655, 13701,
and 13745 Wing Way,Fort Worth, in the State of Texas(See Exhibit"A");and
WHEREAS, In or about September 2008 Lessee completed construction of the aircraft storage hangar
building on Lease Site W-6, known and referred to as 13745 Wing Way, Fort Worth, Texas (described in
Exhibit "B" attached hereto), consisting of five (5) individual hangars within a multi-unit aircraft hangar
building identified as hangar units A-E;and
WHEREAS, On November 7th, 2008 the Cb of Fort Worth Aviation Department approved, as to
form only, this HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT as an approved
instrument to memorialize the sale to third persons of a Leasehold Interest as a Sublessee in individual hangar
units within the completed aircraft storage hangar buildings("Mandatory Improvements").
NOW, THEREFORE, for adequate consideration given and received by the Sublessor and Sublessee,
the receipt of which is hereby acknowledged, and in further consideration of the mutual promises contained
herein, and in the paragraphs and provisions of the Master Lease, which are referred to in this Agreement and
thereby incorporated herein by reference as if set forth in its entirety, the Sublessor hereby subleases to the
Sublessee,and the Sublessee hires and takes from the Sublessor,the aircraft hangar identified as Hangar Unit A
13745 Wing Way,Fort Worth,State of Texas under the following terms and conditions:
1. PROPERTY LEASED.
Sublessor leases to Sublessee and Sublessee leases from Sublessor, the real property containing
approximately 3J80 square feet known and referred to as Hangar Unit& 13745 Wing Way,
Fort Worth, Texas (the "Premises") more fully described in Exhibit "B", attached and incorporated herein by
reference. The Premises, which are the subject of this Sublease, represent(20.52%)of Lease Site W-6 held by
Sublessor pursuant to the terms and conditions of the Master Lease
Page 1 of 16
IIANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
2. TERM OF LEASE.
2.1 Initial Term.
The Initial Term of this Sublease shall commence on the date of execution by both parties
("Effective Date") and expire at 11:59 P.M. on December 31, 2036, unless terminated earlier as
provided herein.
2.2 Renewals.
If Sublessee performs and abides by all provisions and conditions of this Sublease, upon
expiration of the Initial Term, Sublessee shall have two (2) consecutive options to renew this Sublease
for two(2)additional successive terms of five (5) years each (each a "Renewal Term") at a rental rate
based upon a prorata calculation in accordance with the Ground Lease escalation provisions contained in
Section 3.1 of the Master Lease. Sublessee shall notify Sublessor in writing of its intent to exercise a
respective option not less than ninety(90) and not more than one hundred eighty(180) days prior to the
expiration of the term then in effect. If Sublessee does not exercise its option for a first Renewal Term
within the time frame provided herein, Sublessee shall automatically and simultaneously forfeit its
second option to sublease the Premises for a second Renewal Term, and Sublessee shall no longer have
any rights or interest in the Premises following the expiration of the Initial Term. Notwithstanding
anything to the contrary contained herein, the term of this Sublease, including any extensions, shall not
go beyond the ultimate expiration date of the"Master Lease".
3. PURCHASE PRICE AND RENT.
(a) The purchase price payable in advance by Sublessee to Sublessor for the exclusive right to
occupy and use the Premises pursuant to the terms and conditions setforth in this Sublease is One
Hundred Sixty-Two Thousand Five Hundred Forty Dollars($162.540.00).
(b) In addition to the purchase price, Sublessee will pay to Sublessor as rent for the Premises,
Sublessee's prorata share of the Master Lease ground rent payable by Sublessor to the City of Fort
Worth which on the date of execution of this Sublease is Six Hundred Eighty Dollars and Thirty-Six
Cents ($680.36)annually, payable monthly at the rate of Fifty-Six Dollars and Seventy Cents ($56.70)
per month, and may be adjusted upward or downward as more fully set forth in Paragraph 3 of the
Master Lease.
4. USE OF PREMISES.
Sublessee will use the premises only for aviation purposes specified in the Master Lease and for uses
normally incident to such purposes.
5. ASSUMPTION AGREEMENT AND COVENANTS.
(a) Sublessee will comply with all the terms and conditions of the Master Lease that relate to the
Premises that are to be complied with by the Sublessor as Lessee during the Term of this Sublease,
including without limitation, the payment of Sublessee's prorata share of the Ground Lease to the City
Page 2 of It
HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
of Fort Worth,which may be adjusted from time to time by the City of Fort Worth.
(b) If the Master Lease is terminated or surrendered, whether voluntarily, involuntarily, or by
operation of law, Sublessee will make full attornment to the Lessor under the Master Lease for the
balance of the Term, including any extensions and renewals, based upon the covenants and conditions
set forth in this Sublease, so as to establish direct privity of estate and contract between the Lessor and
Sublessee, with the same force and effect as if this Sublease had originally been entered into by and
between the Lessor and Sublessee. In said event Sublessee will then make all rent payments directly to
Lessor, and providing Sublessee is not in default, Lessor shall accept the Sublessee, its successors and
assigns, as its Lessee for a period equal to the full un-elapsed portion of the Term of this Sublease,
including any extensions and renewals,under the terms and conditions set forth in this Sublease
(c) In addition to the restrictions and limitations upon the use, occupancy of the premises and
alienation of interest which are set forth in the Sublease,the restrictions and limitations upon the use and
occupancy of the Premises and alienation of interest which are set forth in the Master Lease shall be
incorporated into this Sublease by reference as if set forth herein in its entirety and Sublessee covenants
to comply with said provisions.
(d) Notwithstanding anything contained in this Sublease to the contrary, should a court of competent
jurisdiction determine Sublessor has defaulted under the terms of this Sublease and the default is
deemed incurable, Sublessee, may at any time thereafter, at the Sublessee's sole discretion, and subject
to the approval of the Lessor, require Sublessor to assign a portion of the Master Lease relating to the
Premises to Sublessee. Following such assignment, this Sublease shall terminate and be of no further
force and effect.
6. MONTHLY PRORATA EXPENSES.
(a) During the initial term of this sublease and any extensions thereof,Sublessee agrees to pay to the
Sublessor, Sublessee's Pro Rata Share of monthly expenses. Sublessee's Pro Rata share shall be 20.52%
of the annual expenses as estimated by Sublessor, including,but not limited to the following items:
(i) The cost of all operating expenses of the Premises and services furnished, including any
charges imposed upon the Sublessor pursuant to the Master Lease Agreement;
(ii) The cost of management and administration,whether or not the management or service is
provided by the Sublessor pursuant to a contract between the Sublessor and a third party. The
third party rendering the management and administration services may, or may not, be an officer
or director, or affiliated with an officer or director, of the Sublessor. Notwithstanding anything
to the contrary herein the charges and fees for management and administration shall not exceed
the customary fees and charges for the same or similar services rendered by other professionals
within the same geographic area;
(iii) The amount of all taxes and assessments levied against the Sublessor under the terms of
the Master Lease which it is required to pay,except that in the event the taxing authority makes a
separate assessment as to the assessed value of each aircraft Hangar Unit covered by the Master
Lease, the proportionate share of taxes to be paid as to the Premises shall be determined by the
ratio of the assessed value of the Premises to the total assessed value of all aircraft Hangar Units
included in the Master Lease, the Sublessee agrees to and shall pay the amount of said taxes
Page 3 of 16
IIANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
determined by the taxing authority for the said Sublessee's Premises, which shall be included in
the "Prorata Expenses" hereinabove referred to, in said amount as separately determined for the
Premises by the Sublessor;
(iv) The cost of fire and extended insurance on the Hangar Units and such other insurance as
the Sublessor may effect or as may be required pursuant to Paragraph l l of the Master Lease or
under any mortgage on the Premises;
(v) The cost of furnishing water, electricity, garbage, and trash collection, and any other
utilities to the extent furnished by the Sublessor(See Section 8);
(vi) All reserves set up by Sublessor, including the general operating reserve and the reserve
for replacements;
(vii) The estimated cost of repairs, maintenance, and replacement of the real and personal
property to be made by the Sublessor. The obligation of the Sublessor to make repairs, maintain,
and replace the Hangar Units shall be limited to the exterior of the Hangar Units covered by the
Master Lease. The interior of the Premises, including the operating mechanism for the bi-fold
door and the components contained therein, shall be maintained and repaired by the Sublessee
with the exclusive right to occupy said unit;
(viii) Any other expenses of the Sublessor, including operating deficiencies, if any, for prior
periods;
(ix) The Sublessor shall determine the Prorata Expenses from time to time. Said sum shall be
estimated on an annual basis and divided by the number of months remaining in the then current
fiscal year; but in no event shall the Sublessee be charged with more them his proportionate
share thereof as determined by the Sublessor. Until further notice from the Sublessor, the
Monthly Prorata Expenses for the above-mentioned aircraft Hangar Unit shall be($208.38).
(x) Sublessee shall commence the payment of Prorata Expenses thirty (30) days following
written notice from the Sublessor to the Sublessee that the Premises is available for occupancy,
or upon acceptance of occupancy, whichever is earlier, the Sublessee shall pay the payment for
Prorata Expenses covering the unexpired balance of the month in which notice was given or
occupancy occurred. Thereafter, the Sublessee shall pay Prorata Expenses each month in
advance;and
(xi) The Sublessor agrees on its part that: in the discretion of the Sublessor, the Sublessor may
within ninety (90) days after the end of each fiscal year either refund or credit to the Sublessee's
account, the Sublessee's proportionate share of Prorata Expenses that were collected in
anticipation of expenses, which are in excess of the amount actually paid for expenses of all
kinds, including reserves.
(b) Sublessee is granted the right not more frequently than once every calendar year to audit all
books, records and support documentation of Seller in connection with any charges assessed Sublessee
under this Sublease during the preceding calendar year. Seller shall make available to Buyer original
copies of all underlying documentation supporting any charges assessed Sublessee during the twelve(12)
months subject to review. Sublessee shall be permitted to conduct any such audit within two(2) business
Page 4 of 16
HANGAR SUBLEASE AND EXCLUSWE OCCUPANCY AGREEMENT
days notice to Seller. Any such audit shall be conducted at Sublessee's sole expense.
7. PAYMENT DATES AND LATE FEES.
Monthly Prorata Expenses are due on or before the first (1st) day of each month. Payments must be
received during normal working hours by the due date at the Sublessor's address set forth in Section 20(g).
Rent shall be considered past due if Sublessor has not received full payment on or before the tenth(10th)day of
the month for which payment is due. Without limiting Sublessor's termination rights as provided by this
Sublease, Sublessor will assess a late penalty charge of ten percent (10%) per month on the entire balance of
any overdue rent that Sublessee may accrue.
8. MANAGEMENT AND INSURANCE.
Notwithstanding the Sublessor's rights and obligations to provide the necessary management, operation,
and administration of the Hangar Units;and to be paid for said services,and the Sublessor's covenant to arrange
for the payment of all assessments levied against the project, and to secure insurance covering the repair and/or
replacement of the exterior and structural components of the "Mandatory Improvements" described in the
Master Lease and the minimum general liability insurance limits imposed upon the Sublessor under the terms of
the Master Lease. The Sublessor will not, however, under any circumstances, provide liability or personal
property insurance coverage which would insure the personal property or activities of Sublessee and/or
Sublessee's officers, employees, agents, or invitee, or repair or replace the interior build out of the Premises or
repair or replace any personal property stored within the Premises. Furthermore, the Sublessee herein agrees to
hold Sublessor, its agents,officers,directors,attorneys, heirs,and successors harmless and to indemnify each of
them from any loss or costs whatsoever,that may arise as a result of any action or inaction by Sublessee and/or
his agent, guest, or invitee relating to the use of the Premises or any aircraft or personal property that may be
used by the Sublessee or is stored in the Premises. Providing Sublessee is not in default, Sublessor herein
agrees to, defend, indemnify and hold Sublessee, its agents, officers, directors, attorneys, heirs, successors,
sublessees, and/or assigns harmless against and from any and all losses, costs, expenses and/or judgments
whatsoever, including, but not limited to,any actual attorneys fees and court costs, that any of said parties may
suffer, arising out of,related to or in connection with any action or inaction of Sublessor or any employee,agent
or third party acting on behalf or at or under the direction of Sublessor related to any matters under this
Sublease or the Master Lease that are the duties and/or responsibilities of Sublessor.
9. FURNITURE AND FIXTURES.
All furniture and fixtures and equipment placed in the Premises by Sublessee will remain Sublessee's
property. Sublessee may, when the Term of this Sublease expires, remove the furniture and fixtures, if removal
is done so as not to damage the Premises.
10. ASSIGNMENT AND SUBLETTING.
Lessee shall have the right to sublease the Premises to a third party under terms and conditions
acceptable to Sublessor; provided that all such arrangements shall be in writing, and shall be approved in
advance by the Sublessor and City as to form, and shall expressly incorporate by reference all limitations,
restrictions, and conditions upon the use of the Premises contained in this Sublease and the Master Lease.
Nothing contained in this Sublease shall be interpreted as limiting or prohibiting Lessee from time to time
subleasing or renting any portion of the Premises to any third party provided any such sublease or rental
between Sublessee and any third party is in full compliance with, and incorporates by reference, the conditions,
Page 5 of 16
HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
covenants and restrictions of that certain Master Lease between the City of Fort Worth, Texas and Sublessor
and; The Spinks Airport Rules and Regulations Sublessee and all Sublessee's successors and/or assigns are
hereby prohibited from non-aviation related uses, including, without limitation, the following: concessions;
ground transportation for rent or hire; including taxi and limousine service; food sales; barber and valet
services;alcoholic beverage sales;sales of pilot supplies;newsstands;and gift;and other retail shops.
(a) Notwithstanding the above, this Sublease may be assigned or the Premises sublet to any
corporation into which, Sublessee may be merged or consolidated or to any corporation that is a
majority-owned subsidiary,parent,or affiliate of Sublessee.
(b) Any proposed assignment shall be in writing, signed by assignee and assignor and submitted to
the Sublessor and the City for approval.The proposed assignment shall contain an affirmative statement
on the part of the assignee stipulating to the assumption of all the conditions,restrictions, and covenants
under this Sublease and the Master Lease that are to be performed by Sublessee. Within ten (10) days
following the approval of the proposed assignment by Sublessor and City, the approved proposed
assignment (the "Assignment") together with a duplicate original of this Sublease attached thereto as
Exhibit A will be delivered to Sublessor. '
(c) Violation of this Subletting or Assignment provision shall, in the absolute and sole discretion of
the Sublessor, result in termination and forfeiture of the Sublessee's rights under this Agreement. As a
condition to the approval of any sublease the rents and any other sums that may be payable by Sublessee
under this Sublease and/or the Master Lease shall be assigned to the Sublessor. A duplicate original of
any sublease or rental agreement between the Sublessee and any third party shall be delivered to the
Sublessor within ten (10) days following execution, and the Sublessor shall be irrevocably empowered
to collect rents and apply the rents in reduction of sums due from time to time under this Agreement.
(d) Any sublease or rental agreement between Sublessee and a third person shall be in a form
acceptable to the Sublessor, shall require the subtenant to abide by the terms of this Sublease and the
Master Lease during his subtenancy, and shall give to the Sublessor irrevocable power to dispossess or
otherwise act for the Sublessee in case of default under the subtenancy Agreement.
11. UTILITIES.
All electrical usage and phone shall be metered by Sublessee directly with such companies.
12. DEFINITION OF DEFAULT BY SUBLESSEE AND EFFECT THEREOF.
(a) Any action or inaction by Sublessee that causes the occurrence of any of the events detailed in
clauses (i) through (x) below shall constitute a default by Sublessee under this Sublease. It is hereby
mutually agreed that at any time after the happening of any of the events specified in Clauses(i)through
(vi) inclusive and/or Clauses (viii) through (x) inclusive of this Section, the Sublessor shall give to the
Sublessee a written notice (hereinafter"Notice of Default") sent via a nationwide overnight carrier with
recipient signature required that such a default has occurred and that Sublessee's right to occupy under
this Agreement will expire and the Sublease will be terminated at a date not less than thirty (30) days
after the date the Notice of Default is delivered, or delivery attempts have been unsuccessful as certified
by the nationwide overnight carrier. Upon the event of default as specified in Clause (vii) of this
Section, the Sublessor shall give to the Sublessee a Notice of Default sent via a nationwide overnight
carrier with recipient signature required that such a default has occurred and that Sublessee's right to
Page 6 of 16
HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
occupy under this Agreement will expire and the Sublease will be terminated at a date not less than ten
(10) days after the date the Notice of Default is delivered, or delivery attempts have been unsuccessful
as certified by the nationwide overnight carrier. The events constituting a default by Sublessee under
this Section 12(a)are as follows:
(i) In the event Sublessee shall attempt to transfer or assign its interest in this Sublease in a
manner that is prohibited hereunder. In the event Sublessee is not a natural person, nothing
contained in this Sublease shall be interpreted at any time or in any manner as limiting or
prohibiting any shareholder or equity interest owner of/in Sublessee from selling any or all of the
equity owned by said shareholder or equity interest owner to any third party nor shall any such
equity sale be interpreted as or constitute a breach of this Sublease, the Master Lease or the
Spinks Airport Rules and Regulations. Sublessee agrees to notify Sublessor in writing within 30
days after the occurrence of the sale of substantially all (i.e., 90% or greater) of the equity
ownership interest of Sublessee.
(ii) In the event Sublessee attempts to transfer or assign this Agreement in a manner
inconsistent with Paragraph 10 of this Sublease;
(iii) In the event at any time during the continuance of this agreement the Sublessee shall be
declared a bankrupt under the laws of the United States;
(iv) In the event at any time during the continuance of this agreement a receiver of the
Sublessee's property shall be appointed under any of the laws of the United States or of any
State;
(v) In the event at any time during the continuance of this agreement the Sublessee shall
make a general assignment for the benefit of creditors;
(vi) In the event the Sublessee fails to effect and/or pay for repairs and maintenance as
provided for in Section 6 hereof;
(vii) In the event the Sublessee shall fail to pay any sum due pursuant to the provisions of
Section 3,Section 6,and Section 12(g)hereof,
(viii) In the event Sublessee fails to pay any charge which, if not paid, could become a lien
against the Premises;
(ix) In the event Sublessee, without the prior written approval of the Sublessor, permits an
occupant or occupants to occupy the Premises;
(x) In the event the Sublessee shall act, or fail to act, pursuant to its obligations under this
Sublease and/or the Master Lease.
(b) Upon the occurance of an event of default as set forth hereinabove and the expiration of the
notice period as set forth in the Notice of Default describe in Section 12(a) the Sublessee's right to
occupy the Premises under this Sublease will automatically expire and terminate, unless during the
Page 7 of 16
HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
notice period the Sublessee provides Sublessor proof satisfactory to Sublessor, that the default has been
cured in a manner deemed satisfactory by the Sublessor, and/or that any and all money payable by the
Sublessee to the Sublessor has been paid in full.:
(c) The Sublessee hereby expressly waives any and all right of redemption in case he shall be
dispossessed by judgment or warrant of any Court or judge: the words "enter", "re-enter", and "re-
entry", as used in this Agreement are not restricted to their technical legal meaning, and the event of a
breach or threatened breach by the Sublessee of any of the covenants or provisions hereof,the Sublessor
shall have the right of injunction and the right to invoke any remedy allowed at law or in equity,as if re-
entry,summary proceedings,and other remedies were not herein provided for.
(d) The Sublessee expressly agrees that there exists under this Sublease a landlord-tenant
relationship and that in the event of a breach or threatened breach by the Sublessee of any covenant or
provision of this Agreement, there shall be available to the Sublessor such legal remedy or remedies as
are available to a landlord for the breach or threatened breach under the laws of the State of Texas by a
tenant of any provision of a lease or rental agreement.
(e) Notwithstanding any other provisions of this Agreement the Sublessee, in case he is in default
hereunder, hereby expressly waives any and all notices and demands for possession as provided by the
laws of the State of Texas.
(f) The failure on the part of the Sublessor to avail itself of any of the remedies given under this
Agreement shall not waive nor destroy the right of the Sublessor to avail itself of such remedies for
similar or other breaches on the part of the Sublessee.
(g) Upon the occurrence of any event of default and Sublessee's failure to cure said default within
the time limits set forth in the Notice of Default it shall thereupon be lawful for the Sublessor to re-
enter the Premises and remove all persons and personal property therefrom either by: (i)
summary dispossession proceedings or by suitable action or proceeding at law or in equity or;
(ii)by any other proceedings that may apply to the eviction of the occupants or; (iii) by force or
otherwise, and to repossess the Premises in its former state as if this Sublease had not been
made.
(h) If Sublessee breaches this Sublease, Sublessor may immediately or at any time thereafter,without
notice, cure the breach for the account and at the expense of Sublessee. If Sublessor at any time, by
reason of the breach, must pay,or elects to pay,any sum of money or do any act that will require paying
any sum of money, or must incur any expense, including reasonable attorney's fees, in instituting or
prosecuting any action or proceeding to enforce Sublessor's rights under this Sublease,the sums paid by
Sublessor will be considered additional rent and will be due from Sublessee to Sublessor on the first day
of the month following payment of the respective sums or expenses.
(i) All Sublessor's rights and remedies enumerated in the Sublease are cumulative and will not
exclude any other right or remedy allowed by law. These rights and remedies may be exercised and
enforced concurrently, whenever necessary. If Sublessor is in default under this Sublease, Sublessor
will have reasonable and adequate time to cure the default after written notice to Sublessor by Sublessee.
Page 8 of 16
HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
13. EMINENT DOMAIN.
If any public authority takes the whole or any part of the Premises under the power of eminent domain,
then the Sublease Term will cease with respect to that part from the date that its possession is required for any
public purpose, and the rent will be paid up to that day. If a portion of the Premises is taken so that the
remaining portion will not be reasonably adequate for operating Sublessee's business after Sublessor completes
such repairs or alternations as Sublessor is obligated to make, Sublessee may elect either to terminate this
Sublease or remain in possession of the remainder of the Premises. In the latter event,the rent will be equitably
adjusted to account for that portion of the Premises so taken. If Sublessee elects to remain in possession,all the
Terms of this Sublease will continue in effect except for the rent,and Sublessor will at its own cost and expense
make all necessary repairs or alterations to the building. Any money received by Sublessor as a result of a
taking of the Premises under eminent domain that is not used by Sublessor to restore or repair the Premises shall
be paid to Sublessee after deducting from said sum any and all money due Sublessor under the Sublease
Agreement and the reimbursement of all cost incurred by Sublessor relating to the Eminent Domain
proceedings.
14. SUBLESSEE TO COMPLY WITH ALL REGULATIONS.
The Sublessee covenants that he will abide by the rules and regulations established from time to time by
Spinks Airport; the City of Fort Worth Texas; and the restrictions, covenants and conditions set forth in the
Master Lease and/or Sublease, and by his acts of cooperation with other sublessees and individuals and entities
using the Spinks Airport bring about for himself and his co-sublessees a safe environment and a peaceful
enjoyment of the property rights of all sublessees.
15. REPAIRS AND ALTERATIONS.
(a) The Sublessee agrees to repair and maintain his Premises at his own expense as follows:
(i) Any routine maintenance to the inside of the Premises and any repairs or maintenance to
the exterior of the Premises necessitated by the members negligence or misuse;and
(ii) Any redecoration of the interior of the Premises;and
(iii) Any repairs or maintenance of all fixtures, appliances and other items within the interior
surfaces of the perimeter walls, floors and ceiling of the Premises.
(b) The Sublessor shall provide all necessary repairs, maintenance, and replacements to the exterior
of the Hangar Unit and shall pay for said Repairs and Maintenance from the assessments and pro rata
expense funds collected pursuant to Section 6 of this Agreement. The officers and employees of the
Sublessor and/or the management company shall have the right to enter the Premises of the Sublessee in
order to effect necessary repairs, maintenance, and replacements consistent with this Agreement, and to
authorize entrance for such purposes by employees of any contractor, utility company, municipal
agency,or others,at any reasonable hour of the day and in the event of emergency at any time.
(c) The Sublessor shall have the right to make repairs at Sublessee's expense should the Sublessee
fail to effect the repairs, maintenance, or replacements specified in this Section in a manner satisfactory
to the Sublesssor and add the cost thereof to the Sublessee's next required monthly payment under
Paragraph 3.
Page 9 or 16
HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
16. ALTERATIONS AND ADDITIONS.
The Sublessee shall not, without the written consent of the Sublessor, make any structural alterations in
the Premises,or in the water,electrical conduits,plumbing or other fixtures connected therewith,or remove any
additions, improvements,or fixtures from the premises.
(a) The Sublessee shall not, without the prior written consent of the Sublessor, the Fire Department,
EPA, and/or local planning department,use or store in his hangar any hazardous or flammable materials
or install or use in his aircraft Hangar Unit any paint booth or equipment or perform any activity that
emits fumes or could annoy or create a hazard for any other Sublessees'. The Sublessee agrees that the
Sublessor may require the prompt removal of any such materials and/or equipment at any time, and that
the Sublessee's failure to remove such equipment upon request shall constitute a default within the
meaning of Section 10 of this Agreement.
17. INDEMNIFICATION.
SUBLESSEE COVENANTS AND AGREES TO, AND DOES HEREBY, INDEMNIFY, HOLD
HARMLESS AND DEFEND SUBLESSOR AND THE CITY, ITS OFFICERS, AGENTS, SERVANTS,
AND EMPLOYEES FROM AND AGAINST ANY AND ALL CLAIMS OR LAWSUITS FOR EITHER
PROPERTY DAMAGE OR LOSS (INCLUDING ALLEGED DAMAGE OR LOSS TO LESSEE'S
BUSINESS AND ANY RESULTING LOST PROFITS) AND/OR PERSONAL INJURY, INCLUDING
DEATH, TO ANY AND ALL PERSONS, OF ANY KIND OR CHARACTER, WHETHER REAL OR
ASSERTED, ARISING OUT OF OR IN CONNECTION WITH THE USE, LEASING, MAINTENANCE,
OCCUPANCY, EXISTENCE, OR LOCATION OF THE PREMISES OR ANY IMPROVEMENTS
THEREON, EXCEPT TO THE EXTENT CAUSED BY THE GROSS NEGLIGENCE OR INTENTIONAL
MISCONDUCT OFSUBLESSOR,ITS OFFICERSAGENTS,SERVANTS, OR EMPLOYEES.
SUBLESSEE SHALL BE LIABLE TO SUBLESSOR AND/OR THE CITY FOR ANY AND ALL
INJURIES OR DAMAGES TO AIRPORT PROPERTY, THE PREMISES OR ANY IMPROVEMENTS
THEREON, WHICH ARISE OUT OF OR IN CONNECTION WITH ANY AND ALL ACTS OR
OMISSIONS OF SUBLESSEE, ITS OFFICERS, AGENTS, EMPLOYEES, CONTRACTORS,
SUBCONTRACTORS, LICENSEES, SUBLESSEES, OR INVITEES, EXCEPT TO THE EXTENT
CAUSED BY THE GROSS NEGLIGENCE OR INTENTIONAL MISCONDUCT OF SUBLESSOR, ITS
SERVANTS,AGENTS, OR EMPLOYEES.
NEITHER THE SUBLESSOR NOR THE CITY GUARANTEE POLICE PROTECTION TO
SUBLESSEE OR ITS PROPERTY. THE CITY IS OBLIGATED ONLY TO PROVIDE SECURITY
ADEQUATE TO MAINTAIN THE CITY'S CERTIFICATION UNDER FAA REGULATIONS.
SUBLESSEE SHALL COMPLY WITH ALL APPLICABLE REGULATIONS OF THE FAA RELATING
TO AIRPORT SECURITY. SUB LESSEE SHALL PAY ALL FINES IMPOSED BY THE FAA ON
SUBLESSOR AND/OR THE CITY RESULTING FROM SUBLESSEE'S FAILURE TO COMPLY WITH
SUCH FAA REGULATIONS OR TO PREVENT UNAUTHORIZED PERSONS OR PARTIES FROM
THEIR OBTAINING ACCESS TO THE AIR OPERATIONS AREA OF THE AIRPORT FROM THE
PREMISES.
Page 10 or 16
HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
18. ENVIRONMENTAL REMEDIATION.
To the best of Sublessor's knowledge, the Premises comply with all applicable federal, state, and local
environmental regulations or standards. Sublessee agrees that it has inspected the Premises and is fully advised
of its own rights without reliance upon any representation made by Sublessor concerning the environmental
condition of the premises.
SUBLESSEE, AT ITS SOLE COST AND EXPENSE, AGREES THAT IT SHALL BE FULLY
RESPONSIBLE FOR THE REMEDIATION OF ANY VIOLATION OF ANY APPLICABLE
FEDERAL,STATE, OR LOCAL ENVIRONMENTAL REGULATIONS OR STANDARDS THAT IS
CAUSED BY SUBLESSEE, ITS OFFICERS, AGENTS, SERVANTS, EMPLOYEES,
CONTRACTORS,SUBCONTRACTORS, OR INVITEES.
19. TERMINATION.
In addition to termination rights contained elsewhere in this Sublease, Sublessor shall have the right to
terminate this Sublease follows:
19.1. Failure by Lessee to Pay Rent,Fees or Other Charges.
If Sublessee fails to pay any rent, fees, or other charges due under this Sublease, Sublessor shall
deliver to Sublessee via a USA nationwide overnight courier service with signature being required
of the intended recipient an invoice and a written notice to pay the invoice within Fifteen(15)calendar
days from the date of receipt or when delivery has been attempted and was refused by the intended
recipient. If Sublessee fails to pay the balance outstanding plus any and all late charges and interest
within such time,Sublessor shall have the right to terminate this Sublease immediately.
19.2. Sublessee's Financial Obligations to Sublessor upon Termination,Breach or Default.
If Sublessor terminates this Sublease for any non-payment of fees or other charges or for any
breach or default as provided in Paragraph 12 and this Paragraph 19, then subject to offsets for rents
received by Sublessor from Sublessee subsequent to the breach, Sublessee shall be liable for and shall
pay to Sublessor all rent due Sublessor for the remainder of the term then in effect as well as all
arrearages of fees and charges payable hereunder. In no event shall a reentry onto or reletting of the
Premises by Sublessor be construed as an election by Sublessor to forfeit any of its rights under this
Sublease.
19.3. Rights of Sublessor Upon Termination or Expiration.
Upon termination or expiration of this Sublease, and any exercised option periods, title to all
improvements on the Premises and all fixtures and other items attached to any structure on the Premises
shall pass to Sublessor. In addition, all rights, powers, and privileges granted to Sublessee hereunder
shall terminate and Sublessee shall vacate the Premises. Within twenty(20)days following the effective
date of termination or expiration, Sublessee shall remove from the Premises all trade fixtures, tools,
machinery, equipment, materials, and supplies placed on the Premises by Sublessee pursuant to this
Sublease. After such time, Sublessor shall have the right to take full possession of the Premises, by
Pelle 11 of 16
HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
force if necessary,and to remove any and all parties and property remaining on any part of the Premises.
Sublessee agrees that it will assert no claim of any kind against Sublessor, its agents, servants,
employees or representatives, that may stem from Sublessor's termination of this Sublease or any act
incident to Sublessor's assertion of its right to terminate or Sublessor's exercise of any rights granted
hereunder.
20. MISCELLANEOUS PROVISIONS.
(a) Texas Law to Apply. This Sublease will be construed under Texas law, and all obligations of
the parties are performable in Tarrant County,Texas.
(b) Parties Bound. This Sublease will bind and inure to the benefit of the parties and their
respective heirs, executors, administrators, legal representative, successors, and assigns except as this
Sublease otherwise specifies.
(c) Legal Construction. If any one or more of the provisions of this Sublease is for any reason held
invalid, illegal, or unenforceable in any respect, that invalidity, illegality, or unenforceability will not
affect any other provision of this Sublease, which will be construed as if it had never included the
invalid, illegal, or unenforceable provision.
(d) Prior Agreements Superseded. This Sublease and the documents incorporated herein by
reference,constitute the sole agreement of the parties and supersede any prior understandings or written
or oral agreements between the parties respecting the subject matter.
(e) Attorney's Fees. If any action at law or in equity, including an action for declaratory relief, is
brought to enforce or interpret this Sublease, the prevailing party is entitled to recover reasonable
attorney's fees from the other. The fees may be set by the court in the trial of the action or may be
enforced in a separate action for that purpose,and the fees will be in addition to any other relief that may
be awarded.
(f) Counterparts, One Agreement. This Sublease and all other copies of it, as they relate to the
rights, duties, and remedies of the parties, will be considered one agreement. This Sublease may be
executed concurrently in one or more counterparts, each of which will be considered an original, but all
of which together will constitute one instrument.
(g) Notice. Unless this Sublease provides otherwise, any notice, tender, or delivery to be given by
either party to the other may be effected by personal delivery in writing or by registered or certified
mail, postage prepaid, return receipt requested, and will be considered received when actually delivered
in the case of personal delivery, and three days following the postmark of the U.S. Postal Service when
deposited in the U.S.Mail. Notices shall be given to the parties at the following address:
If to Sublessor:
Spinks Westside Associates
C/O Group Financial,Inc.
1215 Pomona Road Suite D
Corona,CA 92882.
Page 12 of 16
HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
If to Sublessee:
Newstart Construction, Inc.
450 Alsbury Court
Fort Worth,Texas 76028
(h) Time of Essence. Time is of the essence in this Sublease.
(i) Inconsistent Terms. Notwithstanding anything to the contrary contained herein any
inconsistency between the Restrictions and Limitations contained in the Master Lease and this Hangar
Sublease and Exclusive Occupancy Agreement shall be interpreted in favor of the Master Lease.
SUBLESSOR:
SPINKS WESTSIDE ASSOCIATES,LLC,
a Texas Limited Liability Compar),.0/O Group Financial,Inc.
1215 Pomona Road Suite II C'na,CA 92882
By: + �...
Bryan Clendenen
Its: President
SUBLESSEE:
NEWSTART CONSTRUCTION,INC.
a Texas Corporation
450 Alsbury Court,Fort Worth,TX 76028
By: _
hn L. Settle
Its: President
ACKNOWLEDGMENTS
STATE OF TEXAS )
COUNTY OF TARRANT )
This instrument is acknowledged before me on the day of January,2009, by Bryan
Clendenen,President of Spinks Westside Associates,LLC,on behalf of said entity.
SEAL -
��^ A.WALDE
(: MY COAuMgM1S31�ON SPIRES Notary Public in and for the State of Texas
Page 13 of 16
HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
STATE OF TEXAS )
COUNTY OF TARRANT )
This instrument is acknowledged before me on the day of January,2009, by John L.
Settle,President of Newstart Construction,Inc.,on behalf of said entity.
/1 I
SEAL
SlfE11A 60FF•,.,
, " Notary/ubllc, Notary Public in an f r the State of Texas
state of Texas
14.12
Page 14 of 16
HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
EXHIBIT"A"
Unimproved Ground Lease between City of Fort Worth and Spinks Westside Associates,LLC
to be inserted here
Page IS of 16
HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCV AGREEMENT
EXHIBIT"B"
Unit A, 3,780 square feet
SPINKS WESTSIDE ASSOCIATES
SPINKS AIRPORT
13745 WING WAY, FORT WORTH, TX
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SPINKS (PEST SIDE, INC.
UTILITY^"FOR
PHASE I — 18745 MNG WAY
Page 16 or 16
HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
EChi b��- Aa*Z
SPINKS AIRPORT, FORT WORTH, TEXAS
HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
This SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT (the "Sublease") is made and
entered into by and between SPINKS WESTSIDE ASSOCIATES, LLC a Texas Limited Liability Company
("Sublesssor")and NEWSTART CONSTRUCTION,INC.,a Texas Corporation("Sublessee"), and
WHEREAS, On September 29, 2006 Sublessor as the Lessee, entered into an unimproved Ground
Lease with Mandatory Improvements (hereinafter the "Ground Lease") with the City of Fort Worth, Texas
(hereinafter the "City"), which was entered into the books and records of the City as Contract No. 34065. On
June 2, 2008 the Ground Lease was amended (hereinafter "Amended Lease") and the Amended Lease was
entered into the books and records of the City as Contract No 37154, The Ground Lease and the Amended
Lease are hereinafter collectively referred to as the "Master Lease". The real property, which is the subject of
the Master Lease, is four(4)hangar sites identified as Lease sites W-3 through W-6 inclusive, located at Spinks
Airport in the City of Fort Worth, State of Texas, commonly known and referred to as 13601, 13655, 13701,
and 13745 Wing Way,Fort Worth, in the State of Texas(See Exhibit"A");and
WHEREAS, In or about September 2008 Lessee completed construction of the aircraft storage hangar
building on Lease Site W-6, known and referred to as 13745 Wing Way, Fort Worth, Texas (described in
Exhibit `B" attached hereto), consisting of five (5) individual hangars within a multi-unit aircraft hangar
building identified as hangar units A-E;and
WHEREAS, On November 7th, 2008 the City of Fort Worth Aviation Department approved, as to
form only, this HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT as an approved
instrument to memorialize the sale to third persons of a Leasehold Interest as a Sublessee in individual hangar
units within the completed aircraft storage hangar buildings("Mandatory Improvements").
NOW,THEREFORE, for adequate consideration given and received by the Sublessor and Sublessee,
the receipt of which is hereby acknowledged, and in further consideration of the mutual promises contained
herein, and in the paragraphs and provisions of the Master Lease, which are referred to in this Agreement and
thereby incorporated herein by reference as if set forth in its entirety, the Sublessor hereby subleases to the
Sublessee, and the Sublessee hires and takes from the Sublessor,the aircraft hangar identified as Hangar Unit B
13745 Wing Way,Fort Worth, State of Texas under the following terms and conditions:
1. PROPERTY LEASED.
Sublessor leases to Sublessee and Sublessee leases from Sublessor, the real property containing
approximately 3,660 square feet known and referred to as Hangar Unit B 13745 Wing Way,
Fort Worth, Texas (the "Premises") more fully described in Exhibit `B", attached and incorporated herein by
reference. The Premises, which are the subject of this Sublease, represent(19.87%)of Lease Site W-6 held by
Sublessor pursuant to the terms and conditions of the Master Lease
Page I of 16
HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
2. TERM OF LEASE.
2.1 Initial Term.
The Initial Term of this Sublease shall commence on the date of execution by both parties
("Effective Date") and expire at 11:59 P.M. on December 31, 2036, unless terminated earlier as
provided herein.
2.2 Renewals.
If Sublessee performs and abides by all provisions and conditions of this Sublease, upon
expiration of the Initial Term, Sublessee shall have two (2) consecutive options to renew this Sublease
for two(2)additional successive terms of five (5) years each (each a "Renewal Term") at a rental rate
based upon a prorata calculation in accordance with the Ground Lease escalation provisions contained in
Section 3.1 of the Master Lease. Sublessee shall notify Sublessor in writing of its intent to exercise a
respective option not less than ninety(90) and not more than one hundred eighty(180)days prior to the
expiration of the term then in effect. If Sublessee does not exercise its option for a first Renewal Term
within the time frame provided herein, Sublessee shall automatically and simultaneously forfeit its
second option to sublease the Premises for a second Renewal Term, and Sublessee shall no longer have
any rights or interest in the Premises following the expiration of the Initial Term. Notwithstanding
anything to the contrary contained herein, the term of this Sublease, including any extensions, shall not
go beyond the ultimate expiration date of the"Master Lease".
3. PURCHASE PRICE AND RENT.
(a) The purchase price payable in advance by Sublessee to Sublessor for the exclusive right to
occupy and use the Premises pursuant to the terms and conditions setforth in this Sublease is One
Hundred Fifty-Seven Thousand Three Hundred Eighty Dollars($157,380.00).
(b) In addition to the purchase price, Sublessee will pay to Sublessor as rent for the Premises,
Sublessee's prorata share of the Master Lease ground rent payable by Sublessor to the City of Fort
Worth which on the date of execution of this Sublease is Six Hundred Fifty-Eighty Dollars and Eighty
One Cents ($658.81) annually, payable monthly at the rate of Fifty-Four Dollars and Ninety Cents
54.90 per month,and may be adjusted upward or downward as more fully set forth in Paragraph 3 of
the Master Lease.
4. USE OF PREMISES.
Sublessee will use the premises only for aviation purposes specified in the Master Lease and for uses
normally incident to such purposes.
5. ASSUMPTION AGREEMENT AND COVENANTS.
(a) Sublessee will comply with all the terms and conditions of the Master Lease that relate to the
Premises that are to be complied with by the Sublessor as Lessee during the Term of this Sublease,
including without limitation, the payment of Sublessee's prorate share of the Ground Lease to the City
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HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
of Fort Worth,which may be adjusted from time to time by the City of Fort Worth.
(b) If the Master Lease is terminated or surrendered, whether voluntarily, involuntarily, or by
operation of law, Sublessee will make full attornment to the Lessor under the Master Lease for the
balance of the Term, including any extensions and renewals, based upon the covenants and conditions
set forth in this Sublease, so as to establish direct privity of estate and contract between the Lessor and
Sublessee, with the same force and effect as if this Sublease had originally been entered into by and
between the Lessor and Sublessee. In said event Sublessee will then make all rent payments directly to
Lessor, and providing Sublessee is not in default, Lessor shall accept the Sublessee, its successors and
assigns, as its Lessee for a period equal to the full un-elapsed portion of the Term of this Sublease,
including any extensions and renewals,under the terms and conditions set forth in this Sublease
(c) In addition to the restrictions and limitations upon the use, occupancy of the premises and
alienation of interest which are set forth in the Sublease,the restrictions and limitations upon the use and
occupancy of the Premises and alienation of interest which are set forth in the Master Lease shall be
incorporated into this Sublease by reference as if set forth herein in its entirety and Sublessee covenants
to comply with said provisions.
(d) Notwithstanding anything contained in this Sublease to the contrary, should a court of competent
jurisdiction determine Sublessor has defaulted under the terms of this Sublease and the default is
deemed incurable, Sublessee, may at any time thereafter, at the Sublessee's sole discretion, and subject
to the approval of the Lessor, require Sublessor to assign a portion of the Master Lease relating to the
Premises to Sublessee. Following such assignment, this Sublease shall terminate and be of no further
force and effect.
6. MONTHLY PRORATA EXPENSES.
(a) During the initial term of this sublease and any extensions thereof, Sublessee agrees to pay to the
Sublessor, Sublessee's Pro Rata Share of monthly expenses. Sublessee's Pro Rata share shall be 19.87%
of the annual expenses as estimated by Sublessor, including, but not limited to the following items:
(i) The cost of all operating expenses of the Premises and services furnished, including any
charges imposed upon the Sublessor pursuant to the Master Lease Agreement;
(ii) The cost of management and administration,whether or not the management or service is
provided by the Sublessor pursuant to a contract between the Sublessor and a third party. The
third party rendering the management and administration services may, or may not, be an officer
or director, or affiliated with an officer or director, of the Sublessor. Notwithstanding anything
to the contrary herein the charges and fees for management and administration shall not exceed
the customary fees and charges for the same or similar services rendered by other professionals
within the same geographic area;
(iii) The amount of all taxes and assessments levied against the Sublessor under the terms of
the Master Lease which it is required to pay,except that in the event the taxing authority makes a
separate assessment as to the assessed value of each aircraft Hangar Unit covered by the Master
Lease, the proportionate share of taxes to be paid as to the Premises shall be determined by the
ratio of the assessed value of the Premises to the total assessed value of all aircraft Hangar Units
included in the Master Lease, the Sublessee agrees to and shall pay the amount of said taxes
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HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
determined by the taxing authority for the said Sublessee's Premises, which shall be included in
the "Prorata Expenses" hereinabove referred to, in said amount as separately determined for the
Premises by the Sublessor;
(iv) The cost of fire and extended insurance on the Hangar Units and such other insurance as
the Sublessor may effect or as may be required pursuant to Paragraph 11 of the Master Lease or
under any mortgage on the Premises;
(v) The cost of furnishing water, electricity, garbage, and trash collection, and any other
utilities to the extent furnished by the Sublessor(See Section 8);
(vi) All reserves set up by Sublessor, including the general operating reserve and the reserve
for replacements;
(vii) The estimated cost of repairs, maintenance, and replacement of the real and personal
property to be made by the Sublessor. The obligation of the Sublessor to make repairs, maintain,
and replace the Hangar Units shall be limited to the exterior of the Hangar Units covered by the
Master Lease. The interior of the Premises, including the operating mechanism for the bi-fold
door and the components contained therein, shall be maintained and repaired by the Sublessee
with the exclusive right to occupy said unit;
(viii) Any other expenses of the Sublessor, including operating deficiencies, if any, for prior
periods;
(ix) The Sublessor shall determine the Prorata Expenses from time to time. Said sum shall be
estimated on an annual basis and divided by the number of months remaining in the then current
fiscal year; but in no event shall the Sublessee be charged with more them his proportionate
share thereof as determined by the Sublessor. Until further notice from the Sublessor, the
Monthly Prorata Expenses for the above-mentioned aircraft Hangar Unit shall be($201.76).
(x) Sublessee shall commence the payment of Prorata Expenses thirty (30) days following
written notice from the Sublessor to the Sublessee that the Premises is available for occupancy,
or upon acceptance of occupancy, whichever is earlier, the Sublessee shall pay the payment for
Prorata Expenses covering the unexpired balance of the month in which notice was given or
occupancy occurred. Thereafter, the Sublessee shall pay Prorata Expenses each month in
advance;and
(xi) The Sublessor agrees on its part that: in the discretion of the Sublessor,the Sublessor may
within ninety (90) days after the end of each fiscal year either refund or credit to the Sublessee's
account, the Sublessee's proportionate share of Prorata Expenses that were collected in
anticipation of expenses, which are in excess of the amount actually paid for expenses of all
kinds, including reserves.
(b) Sublessee is granted the right not more frequently than once every calendar year to audit all
books, records and support documentation of Seller in connection with any charges assessed Sublessee
under this Sublease during the preceding calendar year. Seller shall make available to Buyer original
copies of all underlying documentation supporting any charges assessed Sublessee during the twelve (12)
months subject to review. Sublessee shall be permitted to conduct any such audit within two(2) business
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HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEh1ENT
days notice to Seller. Any such audit shall be conducted at Sublessee's sole expense.
7. PAYMENT DATES AND LATE FEES.
Monthly Prorata Expenses are due on or before the first (1st) day of each month. Payments must be
received during normal working hours by the due date at the Sublessor's address set forth in Section 20(g).
Rent shall be considered past due if Sublessor has not received full payment on or before the tenth(10th)day of
the month for which payment is due. Without limiting Sublessor's termination rights as provided by this
Sublease, Sublessor will assess a late penalty charge of ten percent (10%) per month on the entire balance of
any overdue rent that Sublessee may accrue.
8. MANAGEMENT AND INSURANCE.
Notwithstanding the Sublessor's rights and obligations to provide the necessary management, operation,
and administration of the Hangar Units;and to be paid for said services,and the Sublessor's covenant to arrange
for the payment of all assessments levied against the project,and to secure insurance covering the repair and/or
replacement of the exterior and structural components of the "Mandatory Improvements" described in the
Master Lease and the minimum general liability insurance limits imposed upon the Sublessor under the terms of
the Master Lease. The Sublessor will not, however, under any circumstances, provide liability or personal
property insurance coverage which would insure the personal property or activities of Sublessee and/or
Sublessee's officers, employees, agents, or invitee, or repair or replace the interior build out of the Premises or
repair or replace any personal property stored within the Premises. Furthermore, the Sublessee herein agrees to
hold Sublessor, its agents,officers,directors,attorneys, heirs,and successors harmless and to indemnify each of
them from any loss or costs whatsoever,that may arise as a result of any action or inaction by Sublessee and/or
his agent, guest, or invitee relating to the use of the Premises or any aircraft or personal property that may be
used by the Sublessee or is stored in the Premises. Providing Sublessee is not in default, Sublessor herein
agrees to, defend, indemnify and hold Sublessee, its agents, officers, directors, attorneys, heirs, successors,
sublessees, and/or assigns harmless against and from any and all losses, costs, expenses and/or judgments
whatsoever, including, but not limited to,any actual attorneys fees and court costs,that any of said parties may
suffer,arising out of, related to or in connection with any action or inaction of Sublessor or any employee,agent
or third party acting on behalf or at or under the direction of Sublessor related to any matters under this
Sublease or the Master Lease that are the duties and/or responsibilities of Sublessor.
9. FURNITURE AND FIXTURES.
All furniture and fixtures and equipment placed in the Premises by Sublessee will remain Sublessee's
property. Sublessee may, when the Term of this Sublease expires, remove the furniture and fixtures, if removal
is done so as not to damage the Premises.
10. ASSIGNMENT AND SUBLETTING.
Lessee shall have the right to sublease the Premises to a third party under terms and conditions
acceptable to Sublessor; provided that all such arrangements shall be in writing, and shall be approved in
advance by the Sublessor and City as to form, and shall expressly incorporate by reference all limitations,
restrictions, and conditions upon the use of the Premises contained in this Sublease and the Master Lease.
Nothing contained in this Sublease shall be interpreted as limiting or prohibiting Lessee from time to time
subleasing or renting any portion of the Premises to any third party provided any such sublease or rental
between Sublessee and any third party is in full compliance with, and incorporates by reference,the conditions,
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HANGAR SUBLEASE AND EXCLUSIVE'.OCCUPANCY AGREEMENT
covenants and restrictions of that certain Master Lease between the City of Fort Worth, Texas and Sublessor
and; The Spinks Airport Rules and Regulations Sublessee and all Sublessee's successors and/or assigns are
hereby prohibited from non-aviation related uses, including, without limitation, the following: concessions;
ground transportation for rent or hire; including taxi and limousine service; food sales; barber and valet
services;alcoholic beverage sales; sales of pilot supplies; newsstands;and gift;and other retail shops.
(a) Notwithstanding the above, this Sublease may be assigned or the Premises sublet to any
corporation into which, Sublessee may be merged or consolidated or to any corporation that is a
majority-owned subsidiary,parent,or affiliate of Sublessee.
(b) Any proposed assignment shall be in writing, signed by assignee and assignor and submitted to
the Sublessor and the City for approval.The proposed assignment shall contain an affirmative statement
on the part of the assignee stipulating to the assumption of all the conditions, restrictions, and covenants
under this Sublease and the Master Lease that are to be performed by Sublessee. Within ten (10) days
following the approval of the proposed assignment by Sublessor and City, the approved proposed
assignment (the "Assignment") together with a duplicate original of this Sublease attached thereto as
Exhibit A will be delivered to Sublessor.
(c) Violation of this Subletting or Assignment provision shall, in the absolute and sole discretion of
the Sublessor, result in termination and forfeiture of the Sublessee's rights under this Agreement. As a
condition to the approval of any sublease the rents and any other sums that may be payable by Sublessee
under this Sublease and/or the Master Lease shall be assigned to the Sublessor. A duplicate original of
any sublease or rental agreement between the Sublessee and any third party shall be delivered to the
Sublessor within ten (10) days following execution, and the Sublessor shall be irrevocably empowered
to collect rents and apply the rents in reduction of sums due from time to time under this Agreement.
(d) Any sublease or rental agreement between Sublessee and a third person shall be in a form
acceptable to the Sublessor, shall require the subtenant to abide by the terms of this Sublease and the
Master Lease during his subtenancy, and shall give to the Sublessor irrevocable power to dispossess or
otherwise act for the Sublessee in case of default under the subtenancy Agreement.
11. UTILITIES.
All electrical usage and phone shall be metered by Sublessee directly with such companies.
12. DEFINITION OF DEFAULT BY SUBLESSEE AND EFFECT THEREOF.
(a) Any action or inaction by Sublessee that causes the occurrence of any of the cvents detailed in
clauses (i) through (x) below shall constitute a default by Sublessee under this Sublease. It is hereby
mutually agreed that at any time after the happening of any of the events specified in Clauses(i)through
(vi) inclusive and/or Clauses (viii) through (x) inclusive of this Section, the Sublessor shall give to the
Sublessee a written notice(hereinafter"Notice of Default") sent via a nationwide overnight carrier with
recipient signature required that such a default has occurred and that Sublessee's right to occupy under
this Agreement will expire and the Sublease will be terminated at a date not less than thirty (30) days
after the date the Notice of Default is delivered,or delivery attempts have been unsuccessful as certified
by the nationwide overnight carrier. Upon the event of default as specified in Clause (vii) of this
Section, the Sublessor shall give to the Sublessee a Notice of Default sent via a nationwide overnight
carrier with recipient signature required that such a default has occurred and that Sublessee's right to
Page 6 of 16
HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
occupy under this Agreement will expire and the Sublease will be terminated at a date not less than ten
(10) days after the date the Notice of Default is delivered, or delivery attempts have been unsuccessful
as certified by the nationwide overnight carrier. The events constituting a default by Sublessee under
this Section 12(a)are as follows:
(i) In the event Sublessee shall attempt to transfer or assign its interest in this Sublease in a
manner that is prohibited hereunder. In the event Sublessee is not a natural person, nothing
contained in this Sublease shall be interpreted at any time or in any manner as limiting or
prohibiting any shareholder or equity interest owner of/in Sublessee from selling any or all of the
equity owned by said shareholder or equity interest owner to any third party nor shall any such
equity sale be interpreted as or constitute a breach of this Sublease, the Master Lease or the
Spinks Airport Rules and Regulations. Sublessee agrees to notify Sublessor in writing within 30
days after the occurrence of the sale of substantially all (i.e., 90% or greater) of the equity
ownership interest of Sublessee.
(ii) In the event Sublessee attempts to transfer or assign this Agreement in a manner
inconsistent with Paragraph 10 of this Sublease;
(iii) In the event at any time during the continuance of this agreement the Sublessee shall be
declared a bankrupt under the laws of the United States;
(iv) In the event at any time during the continuance of this agreement a receiver of the
Sublessee's property shall be appointed under any of the laws of the United States or of any
State;
(v) In the event at any time during the continuance of this agreement the Sublessee shall
make a general assignment for the benefit of creditors;
(vi) In the event the Sublessee fails to effect and/or pay for repairs and maintenance as
provided for in Section 6 hereof;
(vii) In the event the Sublessee shall fail to pay any sum due pursuant to the provisions of
Section 3, Section 6,and Section 12(g)hereof;
(viii) In the event Sublessee fails to pay any charge which, if not paid, could become a lien
against the Premises;
(ix) In the event Sublessee, without the prior written approval of the Sublessor, permits an
occupant or occupants to occupy the Premises;
(x) In the event the Sublessee shall act, or fail to act, pursuant to its obligations under this
Sublease and/or the Master Lease.
(b) Upon the occurance of an event of default as set forth hereinabove and the expiration of the
notice period as set forth in the Notice of Default describe in Section 12(a) the Sublessee's right to
occupy the Premises under this Sublease will automatically expire and terminate, unless during the
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HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
notice period the Sublessee provides Sublessor proof satisfactory to Sublessor, that the default has been
cured in a manner deemed satisfactory by the Sublessor, and/or that any and all money payable by the
Sublessee to the Sublessor has been paid in full.:
(c) The Sublessee hereby expressly waives any and all right of redemption in case he shall be
dispossessed by judgment or warrant of any Court or judge: the words "enter", "re-enter", and "re-
entry", as used in this Agreement are not restricted to their technical legal meaning, and the event of a
breach or threatened breach by the Sublessee of any of the covenants or provisions hereof,the Sublessor
shall have the right of injunction and the right to invoke any remedy allowed at law or in equity,as if re-
entry,summary proceedings, and other remedies were not herein provided for.
(d) The Sublessee expressly agrees that there exists under this Sublease a landlord-tenant
relationship and that in the event of a breach or threatened breach by the Sublessee of any covenant or
provision of this Agreement, there shall be available to the Sublessor such legal remedy or remedies as
are available to a landlord for the breach or threatened breach under the laws of the State of Texas by a
tenant of any provision of a lease or rental agreement.
(e) Notwithstanding any other provisions of this Agreement the Sublessee, in case he is in default
hereunder, hereby expressly waives any and all notices and demands for possession as provided by the
laws of the State of Texas.
(f) The failure on the part of the Sublessor to avail itself of any of the remedies given under this
Agreement shall not waive nor destroy the right of the Sublessor to avail itself of such remedies for
similar or other breaches on the part of the Sublessee.
(g) Upon the occurrence of any event of default and Sublessee's failure to cure said default within
the time limits set forth in the Notice of Default it shall thereupon be lawful for the Sublessor to re-
enter the Premises and remove all persons and personal property therefrom either by: (i)
summary dispossession proceedings or by suitable action or proceeding at law or in equity or;
(ii)by any other proceedings that may apply to the eviction of the occupants or; (iii) by force or
otherwise, and to repossess the Premises in its former state as if this Sublease had not been
made.
(h) If Sublessee breaches this Sublease, Sublessor may immediately or at any time thereafter,without
notice, cure the breach for the account and at the expense of Sublessee. If Sublessor at any time, by
reason of the breach, must pay,or elects to pay, any sum of money or do any act that will require paying
any sum of money, or must incur any expense, including reasonable attorney's fees, in instituting or
prosecuting any action or proceeding to enforce Sublessor's rights under this Sublease,the sums paid by
Sublessor will be considered additional rent and will be due from Sublessee to Sublessor on the first day
of the month following payment of the respective sums or expenses.
(i) All Sublessor's rights and remedies enumerated in the Sublease are cumulative and will not
exclude any other right or remedy allowed by law. These rights and remedies may be exercised and
enforced concurrently, whenever necessary. If Sublessor is in default under this Sublease, Sublessor
will have reasonable and adequate time to cure the default after written notice to Sublessor by Sublessee.
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HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
13. EMINENT DOMAIN.
If any public authority takes the whole or any part of the Premises under the power of eminent domain,
then the Sublease Term will cease with respect to that part from the date that its possession is required for any
public purpose, and the rent will be paid up to that day. If a portion of the Premises is taken so that the
remaining portion will not be reasonably adequate for operating Sublessee's business after Sublessor completes
such repairs or alternations as Sublessor is obligated to make, Sublessee may elect either to terminate this
Sublease or remain in possession of the remainder of the Premises. In the latter event,the rent will be equitably
adjusted to account for that portion of the Premises so taken. If Sublessee elects to remain in possession,all the
Terms of this Sublease will continue in effect except for the rent,and Sublessor will at its own cost and expense
make all necessary repairs or alterations to the building. Any money received by Sublessor as a result of a
taking of the Premises under eminent domain that is not used by Sublessor to restore or repair the Premises shall
be paid to Sublessee after deducting from said sum any and all money due Sublessor under the Sublease
Agreement and the reimbursement of all cost incurred by Sublessor relating to the Eminent Domain
proceedings.
14. SUBLESSEE TO COMPLY WITH ALL REGULATIONS.
The Sublessee covenants that he will abide by the rules and regulations established from time to time by
Spinks Airport; the City of Fort Worth Texas; and the restrictions, covenants and conditions set forth in the
Master Lease and/or Sublease, and by his acts of cooperation with other sublessees and individuals and entities
using the Spinks Airport bring about for himself and his co-sublessees a safe environment and a peaceful
enjoyment of the property rights of all sublessees.
15. REPAIRS AND ALTERATIONS.
(a) The Sublessee agrees to repair and maintain his Premises at his own expense as follows:
(i) Any routine maintenance to the inside of the Premises and any repairs or maintenance to
the exterior of the Premises necessitated by the members negligence or misuse;and
(ii) Any redecoration of the interior of the Premises;and
(iii) Any repairs or maintenance of all fixtures, appliances and other items within the interior
surfaces of the perimeter walls, floors and ceiling of the Premises.
(b) The Sublessor shall provide all necessary repairs, maintenance, and replacements to the exterior
of the Hangar Unit and shall pay for said Repairs and Maintenance from the assessments and pro rata
expense funds collected pursuant to Section 6 of this Agreement. The officers and employees of the
Sublessor and/or the management company shall have the right to enter the Premises of the Sublessee in
order to effect necessary repairs, maintenance, and replacements consistent with this Agreement, and to
authorize entrance for such purposes by employees of any contractor, utility company, municipal
agency, or others,at any reasonable hour of the day and in the event of emergency at any time.
(c) The Sublessor shall have the right to make repairs at Sublessee's expense should the Sublessee
fail to effect the repairs, maintenance, or replacements specified in this Section in a manner satisfactory
to the Sublesssor and add the cost thereof to the Sublessee's next required monthly payment under
Paragraph 3.
Page 9 of 16
HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
16. ALTERATIONS AND ADDITIONS.
The Sublessee shall not, without the written consent of the Sublessor, make any structural alterations in
the Premises,or in the water, electrical conduits, plumbing or other fixtures connected therewith,or remove any
additions, improvements,or fixtures from the premises.
(a) The Sublessee shall not, without the prior written consent of the Sublessor, the Fire Department,
EPA,and/or local planning department,use or store in his hangar any hazardous or flammable materials
or install or use in his aircraft Hangar Unit any paint booth or equipment or perform any activity that
emits fumes or could annoy or create a hazard for any other Sublessees'. The Sublessee agrees that the
Sublessor may require the prompt removal of any such materials and/or equipment at any time, and that
the Sublessee's failure to remove such equipment upon request shall constitute a default within the
meaning of Section 10 of this Agreement.
17. INDEMNIFICATION.
SUBLESSEE COVENANTS AND AGREES TO, AND DOES HEREBY, INDEMNIFY, HOLD
HARMLESS AND DEFEND SUBLESSOR AND THE CITY, ITS OFFICERS, AGENTS, SERVANTS,
AND EMPLOYEES FROM AND AGAINST ANY AND ALL CLAIMS OR LAWSUITS FOR EITHER
PROPERTY DAMAGE OR LOSS (INCLUDING ALLEGED DAMAGE OR LOSS TO LESSEE'S
BUSINESS AND ANY RESULTING LOST PROFITS) AND/OR PERSONAL INJURY, INCLUDING
DEATH, TO ANY AND ALL PERSONS, OF ANY KIND OR CHARACTER, WHETHER REAL OR
ASSERTED, ARISING OUT OF OR IN CONNECTION WITH THE USE, LEASING, MAINTENANCE,
OCCUPANCY, EXISTENCE, OR LOCATION OF THE PREMISES OR ANY IMPROVEMENTS
THEREON, EXCEPT TO THE EXTENT CAUSED BY THE GROSS NEGLIGENCE OR INTENTIONAL
MISCONDUCT OFSUBLESSOR,ITS OFFICERSAGENTS,SERVANTS, OR EMPLOYEES.
SUBLESSEE SHALL BE LIABLE TO SUBLESSOR AND/OR THE CITY FOR ANY AND ALL
INJURIES OR DAMAGES TO AIRPORT PROPERTY, THE PREMISES OR ANY IMPROVEMENTS
THEREON, WHICH ARISE OUT OF OR IN CONNECTION WITH ANY AND ALL ACTS OR
OMISSIONS OF SUBLESSEE, ITS OFFICERS, AGENTS, EMPLOYEES, CONTRACTORS,
SUBCONTRACTORS, LICENSEES, SUBLESSEES, OR INVITEES, EXCEPT TO THE EXTENT
CAUSED BY THE GROSS NEGLIGENCE OR INTENTIONAL MISCONDUCT OF SUBLESSOR, ITS
SERVANTS,AGENTS, OR EMPLOYEES.
NEITHER THE SUBLESSOR NOR THE CITY GUARANTEE POLICE PROTECTION TO
SUBLESSEE OR ITS PROPERTY, THE CITY IS OBLIGATED ONLY TO PROVIDE SECURITY
ADEQUATE TO MAINTAIN THE CITY'S CERTIFICATION UNDER FAA REGULATIONS.
SUBLESSEE SHALL COMPLY WITH ALL APPLICABLE REGULATIONS OF THE FAA RELATING
TO AIRPORT SECURITY. SUB LESSEE SHALL PAY ALL FINES IMPOSED BY THE FAA ON
SUBLESSOR AND/OR THE CITY RESULTING FROM SUBLESSEE'S FAILURE TO COMPLY WITH
SUCH FAA REGULATIONS OR TO PREVENT UNAUTHORIZED PERSONS OR PARTIES FROM
THEIR OBTAINING ACCESS TO THE AIR OPERATIONS AREA OF THE AIRPORT FROM THE
PREMISES.
Page 10 of 16
HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
18. ENVIRONMENTAL REMEDIATION.
To the best of Sublessor's knowledge, the Premises comply with all applicable federal, state, and local
environmental regulations or standards. Sublessee agrees that it has inspected the Premises and is fully advised
of its own rights without reliance upon any representation made by Sublessor concerning the environmental
condition of the premises.
SUBLESSEE, AT ITS SOLE COST AND EXPENSE, AGREES THAT IT SHALL BE FULLY
RESPONSIBLE FOR THE REMEDIATION OF ANY VIOLATION OF ANY APPLICABLE
FEDERAL,STATE, OR LOCAL ENVIRONMENTAL REGULATIONS OR STANDARDS THAT IS
CAUSED BY SUBLESSEE, ITS OFFICERS, AGENTS, SERVANTS, EMPLOYEES,
CONTRACTORS,SUBCONTRACTORS, OR INVITEES.
19. TERMINATION.
In addition to termination rights contained elsewhere in this Sublease, Sublessor shall have the right to
terminate this Sublease follows:
19.1. Failure by Lessee to Pay Rent,Fees or Other Charges.
If Sublessee fails to pay any rent, fees, or other charges due under this Sublease, Sublessor shall
deliver to Sublessee via a USA nationwide overnight courier service with signature being required
of the intended recipient an invoice and a written notice to pay the invoice within Fifteen(15)calendar
days from the date of receipt or when delivery has been attempted and was refused by the intended
recipient. If Sublessee fails to pay the balance outstanding plus any and all late charges and interest
within such time,Sublessor shall have the right to terminate this Sublease immediately.
19.2. Sublessee's Financial Obligations to Sublessor upon Termination,Breach or Default.
If Sublessor terminates this Sublease for any non-payment of fees or other charges or for any
breach or default as provided in Paragraph 12 and this Paragraph 19, then subject to offsets for rents
received by Sublessor from Sublessee subsequent to the breach, Sublessee shall be liable for and shall
pay to Sublessor all rent due Sublessor for the remainder of the term then in effect as well as all
arrearages of fees and charges payable hereunder. In no event shall a reentry onto or reletting of the
Premises by Sublessor be construed as an election by Sublessor to forfeit any of its rights under this
Sublease.
19.3. Riahts of Sublessor Upon Termination or Expiration.
Upon termination or expiration of this Sublease, and any exercised option periods, title to all
improvements on the Premises and all fixtures and other items attached to any structure on the Premises
shall pass to Sublessor. In addition, all rights, powers, and privileges granted to Sublessee hereunder
shall terminate and Sublessee shall vacate the Premises. Within twenty(20)days following the effective
date of termination or expiration, Sublessee shall remove from the Premises all trade fixtures, tools,
machinery, equipment, materials, and supplies placed on the Premises by Sublessee pursuant to this
Sublease. After such time, Sublessor shall have the right to take full possession of the Premises, by
Page I I of 16
HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
force if necessary,and to remove any and all parties and property remaining on any part of the Premises.
Sublessee agrees that it will assert no claim of any kind against Sublessor, its agents, servants,
employees or representatives, that may stem from Sublessor's termination of this Sublease or any act
incident to Sublessor's assertion of its right to terminate or Sublessor's exercise of any rights granted
hereunder.
20. MISCELLANEOUS PROVISIONS.
(a) Texas Law to Apply. This Sublease will be construed under Texas law, and all obligations of
the parties are performable in Tarrant County,Texas.
(b) Parties Bound. This Sublease will bind and inure to the benefit of the parties and their
respective heirs, executors, administrators, legal representative, successors, and assigns except as this
Sublease otherwise specifies.
(c) Legal Construction. If any one or more of the provisions of this Sublease is for any reason held
invalid, illegal, or unenforceable in any respect, that invalidity, illegality, or unenforceability will not
affect any other provision of this Sublease, which will be construed as if it had never included the
invalid, illegal,or unenforceable provision.
(d) Prior Agreements Superseded. This Sublease and the documents incorporated herein by
reference,constitute the sole agreement of the parties and supersede any prior understandings or written
or oral agreements between the parties respecting the subject matter.
(e) Attorney's Fees. If any action at law or in equity, including an action for declaratory relief, is
brought to enforce or interpret this Sublease, the prevailing party is entitled to recover reasonable
attorney's fees from the other. The fees may be set by the court in the trial of the action or may be
enforced in a separate action for that purpose,and the fees will be in addition to any other relief that may
be awarded.
(1) Counterparts, One Agreement. This Sublease and all other copies of it, as they relate to the
rights, duties, and remedies of the parties, will be considered one agreement. This Sublease may be
executed concurrently in one or more counterparts, each of which will be considered an original, but all
of which together will constitute one instrument.
(g) Notice. Unless this Sublease provides otherwise, any notice, tender, or delivery to be given by
either party to the other may be effected by personal delivery in writing or by registered or certified
mail, postage prepaid, return receipt requested, and will be considered received when actually delivered
in the case of personal delivery,and three days following the postmark of the U.S. Postal Service when
deposited in the U.S.Mail. Notices shall be given to the parties at the following address:
If to Sublessor:
Spinks Westside Associates
C/O Group Financial,Inc.
1215 Pomona Road Suite D
Corona,CA 92882.
Page 12 or 16
HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
If to Sublessee:
Newstart Construction, Inc.
450 Alsbury Court
Fort Worth,Texas 76028
(h) Time of Essence. Time is of the essence in this Sublease.
(i) Inconsistent Terms. Notwithstanding anything to the contrary contained herein any
inconsistency between the Restrictions and Limitations contained in the Master Lease and this Hangar
Sublease and Exclusive Occupancy Agreement shall be interpreted in favor of the Master Lease.
SUBLESSOR:
SPINKS WESTSIDE ASSOCIATES,LLC,
a Texas Limited Liability Company CIO Group Financial, Inc.
1215 Pomona Road Suit® D C6r9na,CSA 92882
r
By: t:.
. $rygn tlet4enen
Its: President
SUBLESSEE:
NEWSTART CONSTRUCTION,INC.
a Texas Corporation
450 Alsbury Court,Fort yWorlth, 76,028
By:
ohn L. Settle
6
Its: President
ACKNOWLEDGMENTS
STATE OF TEXAS )
COUNTY OF TARRANT
This instrument is acknowledged before me on theme .�fday of January,2009, by Bryan
Ciendenen, President of Spinks Westside Associates,LLC,on behalf of said entity.
SEAL _¢ - =}
�....... .............. Notary Public inanjWr the State of Texas
SNEI A GOFF
Wary Pubk. Page 13 of 16
State at TdiANGARt BLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
DE
A.WADE
MY COMMISSION EXPIRES
'' ' ' August 29,2009 f t o Fa ry S��b 1----..._••
STATE OF TEXAS )
COUNTY OF TARRANT )
This instrument is acknowledged before me on the Yy-day of January,2009, by John L.
Settle,President of Newstart Construction,Inc.,on behalf of said entity.
SEAL .._.�•••••SHEIlA�60FF.•• _ _ C�•�
��� 6VOtgry PubUc,
Notary Public in and for the State of Texas
,; Comm.E .05.14-12
Peae 14 of 16
HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
Rxhibi� A-4
me
SPINKS AIRPORT, FORT WORTH, TEXAS
HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
This SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT (the "Sublease") is made and
entered into by and between SPINKS WESTSIDE ASSOCIATES, LLC a Texas Limited Liability Company
("Sublesssor")and NEWSTART CONSTRUCTION,INC.,a Texas Corporation("Sublessee"),and
WHEREAS, On September 29, 2006 Sublessor as the Lessee, entered into an unimproved Ground
Lease with Mandatory Improvements (hereinafter the "Ground Lease") with the City of Fort Worth, Texas
(hereinafter the "City"), which was entered into the books and records of the City as Contract No. 34065. On
June 2, 2008 the Ground Lease was amended (hereinafter "Amended Lease") and the Amended Lease was
entered into the books and records of the City as Contract No 37154. The Ground Lease and the Amended
Lease are hereinafter collectively referred to as the "Master Lease". The real property, which is the subject of
the Master Lease, is four(4)hangar sites identified as Lease sites W-3 through W-6 inclusive, located at Spinks
Airport in the City of Fort Worth, State of Texas, commonly known and referred to as 13601, 13655, 13701,
and 13745 Wing Way, Fort Worth, in the State of Texas(See Exhibit"A");and
WHEREAS, In or about September 2008 Lessee completed construction of the aircraft storage hangar
building on Lease Site W-6, known and referred to as 13745 Wing Way, Fort Worth, Texas (described in
Exhibit "B" attached hereto), consisting of five (5) individual hangars within a multi-unit aircraft hangar
building identified as hangar units A-E;and
WHEREAS, On November 7th, 2008 the City of Fort Worth Aviation Department approved, as to
form only, this HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT as an approved
instrument to memorialize the sale to third persons of a Leasehold Interest as a Sublessee in individual hangar
units within the completed aircraft storage hangar buildings("Mandatory Improvements").
NOW, THEREFORE, for adequate consideration given and received by the Sublessor and Sublessee,
the receipt of which is hereby acknowledged, and in further consideration of the mutual promises contained
herein, and in the paragraphs and provisions of the Master Lease, which are referred to in this Agreement and
thereby incorporated herein by reference as if set forth in its entirety, the Sublessor hereby subleases to the
Sublessee,and the Sublessee hires and takes from the Sublessor,the aircraft hangar identified as Hangar Unit A
I3745 Wing Way,Fort Worth,State of Texas under the following terms and conditions:
1. PROPERTY LEASED.
Sublessor leases to Sublessee and Sublessee leases from Sublessor, the real property containing
approximately 3,780 square feet known and referred to as Hangar Unit A 13745 Wing Way,
Fort Worth, Texas (the"Premises") more fully described in Exhibit "B", attached and incorporated herein by
reference. The Premises, which are the subject of this Sublease, represent(20.52%)of Lease Site W-6 held by
Sublessor pursuant to the terms and conditions of the Master Lease
Page 1 of 16
HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
2. TERM OF LEASE.
2.1 Initial Term.
The Initial Term of this Sublease shall commence on the date of execution by both parties
("Effective Date") and expire at 11:59 P.M. on December 31, 2036, unless terminated earlier as
provided herein.
2.2 Renewals.
If Sublessee performs and abides by all provisions and conditions of this Sublease, upon
expiration of the Initial Term, Sublessee shall have two (2) consecutive options to renew this Sublease
for two (2)additional successive terms Of five (5) years each (each a "Renewal Term") at a rental rate
based upon a prorata calculation in accordance with the Ground Lease escalation provisions contained in
Section 3.1 of the Master Lease. Sublessee shall notify Sublessor in writing of its intent to exercise a
respective option not less than ninety(90)and not more than one hundred eighty(180)days prior to the
expiration of the term then in effect. If Sublessee does not exercise its option for a first Renewal Term
within the time frame provided herein, Sublessee shall automatically and simultaneously forfeit its
second option to sublease the Premises for a second Renewal Term, and Sublessee shall no longer have
any rights or interest in the Premises following the expiration of the Initial Term. Notwithstanding
anything to the contrary contained herein, the term of this Sublease, including any extensions, shall not
go beyond the ultimate expiration date of the"Master Lease".
3. PURCHASE PRICE AND RENT.
(a) The purchase price payable in advance by Sublessee to Sublessor for the exclusive right to
occupy and use the Premises pursuant to the terms and conditions setforth in this Sublease is One
Hundred Sixty-Two Thousand Five Hundred Forty Dollars($162,540.00).
(b) In addition to the purchase price, Sublessee will pay to Sublessor as rent for the Premises,
Sublessee's prorata share of the Master Lease ground rent payable by Sublessor to the City of Fort
Worth which on the date of execution of this Sublease is Six Hundred Eighty Dollars and Thi -Six
Cents ($680.36)annually, payable monthly at the rate of Fifty-Six Dollars and Seventy Cents ($56.70)
per month, and may be adjusted upward or downward as more fully set forth in Paragraph 3 of the
Master Lease.
4. USE OF PREMISES.
Sublessee will use the premises only for aviation purposes specified in the Master Lease and for uses
normally incident to such purposes.
5. ASSUMPTION AGREEMENT AND COVENANTS.
(a) Sublessee will comply with all the terms and conditions of the Master Lease that relate to the
Premises that are to be complied with by the Sublessor as Lessee during the Term of this Sublease,
including without limitation, the payment of Sublessee's prorata share of the Ground Lease to the City
Page 2 or 16
HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
of Fort Worth,which may be adjusted from time to time by the City of Fort Worth.
(b) If the Master Lease is terminated or surrendered, whether voluntarily, involuntarily, or by
operation of law, Sublessee will make full attornment to the Lessor under the Master Lease for the
balance of the Term, including any extensions and renewals, based upon the covenants and conditions
set forth in this Sublease, so as to establish direct privity of estate and contract between the Lessor and
Sublessee, with the same force and effect as if this Sublease had originally been entered into by and
between the Lessor and Sublessee. In said event Sublessee will then make all rent payments directly to
Lessor, and providing Sublessee is not in default, Lessor shall accept the Sublessee, its successors and
assigns, as its Lessee for a period equal to the full un-elapsed portion of the Term of this Sublease,
including any extensions and renewals,under the terms and conditions set forth in this Sublease
(c) In addition to the restrictions and limitations upon the use, occupancy of the premises and
alienation of interest which are set forth in the Sublease,the restrictions and limitations upon the use and
occupancy of the Premises and alienation of interest which are set forth in the Master Lease shall be
incorporated into this Sublease by reference as if set forth herein in its entirety and Sublessee covenants
to comply with said provisions.
(d) Notwithstanding anything contained in this Sublease to the contrary, should a court of competent
jurisdiction determine Sublessor has defaulted under the terms of this Sublease and the default is
deemed incurable, Sublessee, may at any time thereafter, at the Sublessee's sole discretion, and subject
to the approval of the Lessor, require Sublessor to assign a portion of the Master Lease relating to the
Premises to Sublessee. Following such assignment, this Sublease shall terminate and be of no further
force and effect.
6. MONTHLY PRORATA EXPENSES.
(a) During the initial term of this sublease and any extensions thereof, Sublessee agrees to pay to the
Sublessor, Sublessee's Pro Rata Share of monthly expenses. Sublessee's Pro Rata share shall be 20.52%
of the annual expenses as estimated by Sublessor, including,but not limited to the following items:
(i) The cost of all operating expenses of the Premises and services furnished, including any
charges imposed upon the Sublessor pursuant to the Master Lease Agreement;
(ii) The cost of management and administration,whether or not the management or service is
provided by the Sublessor pursuant to a contract between the Sublessor and a third party. The
third party rendering the management and administration services may, or may not, be an officer
or director, or affiliated with an officer or director, of the Sublessor. Notwithstanding anything
to the contrary herein the charges and fees for management and administration shall not exceed
the customary fees and charges for the same or similar services rendered by other professionals
within the same geographic area;
(iii) The amount of all taxes and assessments levied against the Sublessor under the terms of
the Master Lease which it is required to pay,except that in the event the taxing authority makes a
separate assessment as to the assessed value of each aircraft Hangar Unit covered by the Master
Lease, the proportionate share of taxes to be paid as to the Premises shall be determined by the
ratio of the assessed value of the Premises to the total assessed value of all aircraft Hangar Units
included in the Master Lease, the Sublessee agrees to and shall pay the amount of said taxes
Page 3 of 16
IVLNGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
determined by the taxing authority for the said Sublessee's Premises, which shall be included in
the "Prorata Expenses"hereinabove referred to, in said amount as separately determined for the
Premises by the Sublessor;
(iv) The cost of fire and extended insurance on the Hangar Units and such other insurance as
the Sublessor may effect or as may be required pursuant to Paragraph 11 of the Master Lease or
under any mortgage on the Premises;
(v) The cost of furnishing water, electricity, garbage, and trash collection, and any other
utilities to the extent furnished by the Sublessor(See Section 8);
(vi) All reserves set up by Sublessor, including the general operating reserve and the reserve
for replacements;
(vii) The estimated cost of repairs, maintenance, and replacement of the real and personal
property to be made by the Sublessor. The obligation of the Sublessor to make repairs, maintain,
and replace the Hangar Units shall be limited to the exterior of the Hangar Units covered by the
Master Lease. The interior of the Premises, including the operating mechanism for the bi-fold
door and the components contained therein, shall be maintained and repaired by the Sublessee
with the exclusive right to occupy said unit;
(viii) Any other expenses of the Sublessor, including operating deficiencies, if any, for prior
periods;
(ix) The Sublessor shall determine the Prorata Expenses from time to time. Said sum shall be
estimated on an annual basis and divided by the number of months remaining in the then current
fiscal year; but in no event shall the Sublessee be charged with more them his proportionate
share thereof as determined by the Sublessor. Until further notice from the Sublessor, the
Monthly Prorata Expenses for the above-mentioned aircraft Hangar Unit shall be($208.38).
(x) Sublessee shall commence the payment of Prorata Expenses thirty (30) days following
written notice from the Sublessor to the Sublessee that the Premises is available for occupancy,
or upon acceptance of occupancy, whichever is earlier, the Sublessee shall pay the payment for
Prorata Expenses covering the unexpired balance of the month in which notice was given or
occupancy occurred. Thereafter, the Sublessee shall pay Prorata Expenses each month in
advance;and
(xi) The Sublessor agrees on its part that: in the discretion of the Sublessor,the Sublessor may
within ninety (90)days after the end of each fiscal year either refund or credit to the Sublessee's
account, the Sublessee's proportionate share of Prorata Expenses that were collected in
anticipation of expenses, which are in excess of the amount actually paid for expenses of all
kinds, including reserves.
(b) Sublessee is granted the right not more frequently than once every calendar year to audit all
books, records and support documentation of Seller in connection with any charges assessed Sublessee
under this Sublease during the preceding calendar year. Seller shall make available to Buyer original
copies of all underlying documentation supporting any charges assessed Sublessee during the twelve(12)
months subject to review. Sublessee shall be permitted to conduct any such audit within two(2)business
Page 4 of 16
HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
days notice to Seller. Any such audit shall be conducted at Sublessee's sole expense.
7. PAYMENT DATES AND LATE FEES.
Monthly Prorata Expenses are due on or before the first (1st) day of each month. Payments must be
received during normal working hours by the due date at the Sublessor's address set forth in Section 20(g).
Rent shall be considered past due if Sublessor has not received full payment on or before the tenth(10th)day of
the month for which payment is due. Without limiting Sublessor's termination rights as provided by this
Sublease, Sublessor will assess a late penalty charge of ten percent (10%) per month on the entire balance of
any overdue rent that Sublessee may accrue.
8. MANAGEMENT AND INSURANCE.
Notwithstanding the Sublessor's rights and obligations to provide the necessary management,operation,
and administration of the Hangar Units;and to be paid for said services,and the Sublessor's covenant to arrange
for the payment of all assessments levied against the project, and to secure insurance covering the repair and/or
replacement of the exterior and structural components of the "Mandatory Improvements" described in the
Master Lease and the minimum general liability insurance limits imposed upon the Sublessor under the terms of
the Master Lease. The Sublessor will not, however, under any circumstances, provide liability or personal
property insurance coverage which would insure the personal property or activities of Sublessee and/or
Sublessee's officers, employees, agents, or invitee, or repair or replace the interior build out of the Premises or
repair or replace any personal property stored within the Premises. Furthermore, the Sublessee herein agrees to
hold Sublessor, its agents,officers,directors,attorneys, heirs,and successors harmless and to indemnify each of
them from any loss or costs whatsoever,that may arise as a result of any action or inaction by Sublessee and/or
his agent, guest, or invitee relating to the use of the Premises or any aircraft or personal property that may be
used by the Sublessee or is stored in the Premises. Providing Sublessee is not in default, Sublessor herein
agrees to, defend, indemnify and hold Sublessee, its agents, officers, directors, attorneys, heirs, successors,
sublessees, and/or assigns harmless against and from any and all losses, costs, expenses and/or judgments
whatsoever, including, but not limited to,any actual attorneys fees and court costs,that any of said parties may
suffer,arising out of, related to or in connection with any action or inaction of Sublessor or any employee, agent
or third party acting on behalf or at or under the direction of Sublessor related to any matters under this
Sublease or the Master Lease that are the duties and/or responsibilities of Sublessor.
9. FURNITURE AND FIXTURES.
All furniture and fixtures and equipment placed in the Premises by Sublessee will remain Sublessee's
property. Sublessee may, when the Term of this Sublease expires, remove the furniture and fixtures, if removal
is done so as not to damage the Premises.
10. ASSIGNMENT AND SUBLETTING.
Lessee shall have the right to sublease the Premises to a third party under terms and conditions
acceptable to Sublessor; provided that all such arrangements shall be in writing, and shall be approved in
advance by the Sublessor and City as to form, and shall expressly incorporate by reference all limitations,
restrictions, and conditions upon the use of the Premises contained in this Sublease and the Master Lease.
Nothing contained in this Sublease shall be interpreted as limiting or prohibiting Lessee from time to time
subleasing or renting any portion of the Premises to any third party provided any such sublease or rental
between Sublessee and any third party is in full compliance with, and incorporates by reference, the conditions,
Page S of 16
HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
covenants and restrictions of that certain Master Lease between the City of Fort Worth, Texas and Sublessor
and; The Spinks Airport Rules and Regulations Sublessee and all Sublessee's successors and/or assigns are
hereby prohibited from non-aviation related uses, including, without limitation, the following: concessions;
ground transportation for rent or hire; including taxi and limousine service; food sales; barber and valet
services;alcoholic beverage sales;sales of pilot supplies;newsstands;and gift;and other retail shops.
(a) Notwithstanding the above, this Sublease may be assigned or the Premises sublet to any
corporation into which, Sublessee may be merged or consolidated or to any corporation that is a
majority-owned subsidiary,parent,or affiliate of Sublessee.
(b) Any proposed assignment shall be in writing, signed by assignee and assignor and submitted to
the Sublessor and the City for approval.The proposed assignment shall contain an affirmative statement
on the part of the assignee stipulating to the assumption of all the conditions,restrictions, and covenants
under this Sublease and the Master Lease that are to be performed by Sublessee. Within ten (10) days
following the approval of the proposed assignment by Sublessor and City, the approved proposed
assignment (the "Assignment") together with a duplicate original of this Sublease attached thereto as
Exhibit A will be delivered to Sublessor. '
(c) Violation of this Subletting or Assignment provision shall, in the absolute and sole discretion of
the Sublessor, result in termination and forfeiture of the Sublessee's rights under this Agreement. As a
condition to the approval of any sublease the rents and any other sums that may be payable by Sublessee
under this Sublease and/or the Master Lease shall be assigned to the Sublessor. A duplicate original of
any sublease or rental agreement between the Sublessee and any third party shall be delivered to the
Sublessor within ten (10) days following execution, and the Sublessor shall be irrevocably empowered
to collect rents and apply the rents in reduction of sums due from time to time under this Agreement.
(d) Any sublease or rental agreement between Sublessee and a third person shall be in a form
acceptable to the Sublessor, shall require the subtenant to abide by the terms of this Sublease and the
Master Lease during his subtenancy, and shall give to the Sublessor irrevocable power to dispossess or
otherwise act for the Sublessee in case of default under the subtenancy Agreement.
11. UTILITIES.
All electrical usage and phone shall be metered by Sublessee directly with such companies.
12. DEFINITION OF DEFAULT BY SUBLESSEE AND EFFECT THEREOF.
(a) Any action or inaction by Sublessee that causes the occurrence of any of the events detailed in
clauses (i) through (x) below shall constitute a default by Sublessee under this Sublease. It is hereby
mutually agreed that at any time after the happening of any of the events specified in Clauses(i)through
(vi) inclusive and/or Clauses (viii) through (x) inclusive of this Section, the Sublessor shall give to the
Sublessee a written notice (hereinafter"Notice of Default") sent via a nationwide overnight carrier with
recipient signature required that such a default has occurred and that Sublessee's right to occupy under
this Agreement will expire and the Sublease will be terminated at a date not less than thirty (30) days
after the date the Notice of Default is delivered, or delivery attempts have been unsuccessful as certified
by the nationwide overnight carrier. Upon the event of default as specified in Clause (vii) of this
Section, the Sublessor shall give to the Sublessee a Notice of Default sent via a nationwide overnight
carrier with recipient signature required that such a default has occurred and that Sublessee's right to
Page 6 of 16
HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
occupy under this Agreement will expire and the Sublease will be terminated at a date not less than ten
(10) days after the date the Notice of Default is delivered, or delivery attempts have been unsuccessful
as certified by the nationwide overnight carrier. The events constituting a default by Sublessee under
this Section 12(a)are as follows:
(i) In the event Sublessee shall attempt to transfer or assign its interest in this Sublease in a
manner that is prohibited hereunder. In the event Sublessee is not a natural person, nothing
contained in this Sublease shall be interpreted at any time or in any manner as limiting or
prohibiting any shareholder or equity interest owner of/in Sublessee from selling any or all of the
equity owned by said shareholder or equity interest owner to any third party nor shall any such
equity sale be interpreted as or constitute a breach of this Sublease, the Master Lease or the
Spinks Airport Rules and Regulations. Sublessee agrees to notify Sublessor in writing within 30
days after the occurrence of the sale of substantially all (i.e., 90% or greater) of the equity
ownership interest of Sublessee.
(iii) In the event Sublessee attempts to transfer or assign this Agreement in a manner
inconsistent with Paragraph 10 of this Sublease;
(iii) In the event at any time during the continuance of this agreement the Sublessee shall be
declared a bankrupt under the laws of the United States;
(iiv) In the event at any time during the continuance of this agreement a receiver of the
Sublessee's property shall be appointed under any of the laws of the United States or of any
State;
(v) In the event at any time during the continuance of this agreement the Sublessee shall
make a general assignment for the benefit of creditors;
(vi) In the event the Sublessee fails to effect and/or pay for repairs and maintenance as
provided for in Section 6 hereof;
(vii) In the event the Sublessee shall fail to pay any sum due pursuant to the provisions of
Section 3, Section 6,and Section 12(g)hereof;
(viii) In the event Sublessee fails to pay any charge which, if not paid, could become a lien
against the Premises;
(ix) In the event Sublessee, without the prior written approval of the Sublessor, permits an
occupant or occupants to occupy the Premises;
(x) In the event the Sublessee shall act, or fail to act, pursuant to its obligations under this
Sublease and/or the Master Lease.
(b) Upon the occurance of an event of default as set forth hereinabove and the expiration of the
notice period as set forth in the Notice of Default describe in Section 12(a) the Sublessee's right to
occupy the Premises under this Sublease will automatically expire and terminate, unless during the
Page 7 of 16
HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
notice period the Sublessee provides Sublessor proof satisfactory to Sublessor, that the default has been
cured in a manner deemed satisfactory by the Sublessor, and/or that any and all money payable by the
Sublessee to the Sublessor has been paid in full.:
(c) The Sublessee hereby expressly waives any and all right of redemption in case he shall be
dispossessed by judgment or warrant of any Court or judge: the words "enter", "re-enter", and "re-
entry", as used in this Agreement are not restricted to their technical legal meaning, and the event of a
breach or threatened breach by the Sublessee of any of the covenants or provisions hereof, the Sublessor
shall have the right of injunction and the right to invoke any remedy allowed at law or in equity,as if re-
entry,summary proceedings,and other remedies were not herein provided for.
(d) The Sublessee expressly agrees that there exists under this Sublease a landlord-tenant
relationship and that in the event of a breach or threatened breach by the Sublessee of any covenant or
provision of this Agreement, there shall be available to the Sublessor such legal remedy or remedies as
are available to a landlord for the breach or threatened breach under the laws of the State of Texas by a
tenant of any provision of a lease or rental agreement.
(e) Notwithstanding any other provisions of this Agreement the Sublessee, in case he is in default
hereunder, hereby expressly waives any and all notices and demands for possession as provided by the
laws of the State of Texas.
(f) The failure on the part of the Sublessor to avail itself of any of the remedies given under this
Agreement shall not waive nor destroy the right of the Sublessor to avail itself of such remedies for
similar or other breaches on the part of the Sublessee.
(g) Upon the occurrence of any event of default and Sublessee's failure to cure said default within
the time limits set forth in the Notice of Default it shall thereupon be lawful for the Sublessor to re-
enter the Premises and remove all persons and personal property therefrom either by: (i)
summary dispossession proceedings or by suitable action or proceeding at law or in equity or;
(ii)by any other proceedings that may apply to the eviction of the occupants or; (iii) by force or
otherwise, and to repossess the Premises in its former state as if this Sublease had not been
made.
(h) If Sublessee breaches this Sublease, Sublessor may immediately or at any time thereafter,without
notice, cure the breach for the account and at the expense of Sublessee. If Sublessor at any time, by
reason of the breach,must pay,or elects to pay,any sum of money or do any act that will require paying
any sum of money, or must incur any expense, including reasonable attorney's fees, in instituting or
prosecuting any action or proceeding to enforce Sublessor's rights under this Sublease, the sums paid by
Sublessor will be considered additional rent and will be due from Sublessee to Sublessor on the first day
of the month following payment of the respective sums or expenses.
(i) All Sublessor's rights and remedies enumerated in the Sublease are cumulative and will not
exclude any other right or remedy allowed by law. These rights and remedies may be exercised and
enforced concurrently, whenever necessary. If Sublessor is in default under this Sublease, Sublessor
will have reasonable and adequate time to cure the default after written notice to Sublessor by Sublessee.
Page B of IG
HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
13. EMINENT DOMAIN.
If any public authority takes the whole or any part of the Premises under the power of eminent domain,
then the Sublease Term will cease with respect to that part from the date that its possession is required for any
public purpose, and the rent will be paid up to that day. If a portion of the Premises is taken so that the
remaining portion will not be reasonably adequate for operating Sublessee's business after Sublessor completes
such repairs or alternations as Sublessor is obligated to make, Sublessee may elect either to terminate this
Sublease or remain in possession of the remainder of the Premises. In the latter event,the rent will be equitably
adjusted to account for that portion of the Premises so taken. If Sublessee elects to remain in possession,all the
Terms of this Sublease will continue in effect except for the rent,and Sublessor will at its own cost and expense
make all necessary repairs or alterations to the building. Any money received by Sublessor as a result of a
taking of the Premises under eminent domain that is not used by Sublessor to restore or repair the Premises shall
be paid to Sublessee after deducting from said sum any and all money due Sublessor under the Sublease
Agreement and the reimbursement of all cost incurred by Sublessor relating to the Eminent Domain
proceedings.
14. SUBLESSF,E TO COMPLY WITH ALL REGULATIONS.
The Sublessee covenants that he will abide by the rules and regulations established from time to time by
Spinks Airport; the City of Fort Worth Texas; and the restrictions, covenants and conditions set forth in the
Master Lease and/or Sublease,and by his acts of cooperation with other sublessees and individuals and entities
using the Spinks Airport bring about for himself and his co-sublessees a safe environment and a peaceful
enjoyment of the property rights of all sublessees.
15. REPAIRS AND ALTERATIONS.
(a) The Sublessee agrees to repair and maintain his Premises at his own expense as follows:
(i) Any routine maintenance to the inside of the Premises and any repairs or maintenance to
the exterior of the Premises necessitated by the members negligence or misuse;and
(ii) Any redecoration of the interior of the Premises;and
(iii) Any repairs or maintenance of all fixtures, appliances and other items within the interior
surfaces of the perimeter walls, floors and ceiling of the Premises.
(b) The Sublessor shall provide all necessary repairs, maintenance, and replacements to the exterior
of the Hangar Unit and shall pay for said Repairs and Maintenance from the assessments and pro rata
expense funds collected pursuant to Section 6 of this Agreement. The officers and employees of the
Sublessor and/or the management company shall have the right to enter the Premises of the Sublessee in
order to effect necessary repairs, maintenance, and replacements consistent with this Agreement, and to
authorize entrance for such purposes by employees of any contractor, utility company, municipal
agency,or others,at any reasonable hour of the day and in the event of emergency at any time.
(c) The Sublessor shall have the right to make repairs at Sublessee's expense should the Sublessee
fail to effect the repairs, maintenance, or replacements specified in this Section in a manner satisfactory
to the Sublesssor and add the cost thereof to the Sublessee's next required monthly payment under
Paragraph 3.
Page 9 of 16
HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
16. ALTERATIONS AND ADDITIONS.
The Sublessee shall not, without the written consent of the Sublessor, make any structural alterations in
the Premises,or in the water, electrical conduits,plumbing or other fixtures connected therewith,or remove any
additions, improvements,or fixtures from the premises.
(a) The Sublessee shall not, without the prior written consent of the Sublessor, the Fire Department,
EPA, and/or local planning department, use or store in his hangar any hazardous or flammable materials
or install or use in his aircraft Hangar Unit any paint booth or equipment or perform any activity that
emits fumes or could annoy or create a hazard for any other Sublessees'. The Sublessee agrees that the
Sublessor may require the prompt removal of any such materials and/or equipment at any time, and that
the Sublessee's failure to remove such equipment upon request shall constitute a default within the
meaning of Section 10 of this Agreement.
17. INDEMNIFICATION.
SUBLESSEE COVENANTS AND AGREES TO, AND DOES HEREBY, INDEMNIFY, HOLD
HARMLESS AND DEFEND SUBLESSOR AND THE CITY, ITS OFFICERS, AGENTS, SERVANTS,
AND EMPLOYEES FROM AND AGAINST ANY AND ALL CLAIMS OR LAWSUITS FOR EITHER
PROPERTY DAMAGE OR LOSS (INCLUDING ALLEGED DAMAGE OR LOSS TO LESSEE'S
BUSINESS AND ANY RESULTING LOST PROFITS) AND/OR PERSONAL INJURY, INCLUDING
DEATH, TO ANY AND ALL PERSONS, OF ANY KIND OR CHARACTER, WHETHER REAL OR
ASSERTED, ARISING OUT OF OR IN CONNECTION WITH THE USE, LEASING, MAINTENANCE,
OCCUPANCY, EXISTENCE, OR LOCATION OF THE PREMISES OR ANY IMPROVEMENTS
THEREON, EXCEPT TO THE EXTENT CAUSED BY THE GROSS NEGLIGENCE OR INTENTIONAL
MISCONDUCT OFSUBLESSOR,ITS OFFICERSAGENTS,SERVANTS, OR EMPLOYEES.
SUBLESSEE SHALL BE LIABLE TO SUBLESSOR AND/OR THE CITY FOR ANY AND ALL
INJURIES OR DAMAGES TO AIRPORT PROPERTY, THE PREMISES OR ANY IMPROVEMENTS
THEREON, WHICH ARISE OUT OF OR IN CONNECTION WITH ANY AND ALL ACTS OR
OMISSIONS OF SUBLESSEE, ITS OFFICERS, AGENTS, EMPLOYEES, CONTRACTORS,
SUBCONTRACTORS, LICENSEES, SUBLESSEES, OR INVITEES, EXCEPT TO THE EXTENT
CAUSED BY THE GROSS NEGLIGENCE OR INTENTIONAL MISCONDUCT OF SUBLESSOR, ITS
SERVANTS,AGENTS, OR EMPLOYEES.
NEITHER THE SUBLESSOR NOR THE CITY GUARANTEE POLICE PROTECTION TO
SUBLESSEE OR ITS PROPERTY. THE CITY IS OBLIGATED ONLY TO PROVIDE SECURITY
ADEQUATE TO MAINTAIN THE CITY'S CERTIFICATION UNDER FAA REGULATIONS.
SUBLESSEE SHALL COMPLY WITH ALL APPLICABLE REGULATIONS OF THE FAA RELATING
TO AIRPORT SECURITY. SUB LESSEE SHALL PAY ALL FINES IMPOSED BY THE FAA ON
SUBLESSOR AND/OR THE CITY RESULTING FROM SUBLESSEE'S FAILURE TO COMPLY WITH
SUCH FAA REGULATIONS OR TO PREVENT UNAUTHORIZED PERSONS OR PARTIES FROM
THEIR OBTAINING ACCESS TO THE AIR OPERATIONS AREA OF THE AIRPORT FROM THE
PREMISES.
Page 10 of 16
HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
EXHIBIT"A"
Unimproved Ground Lease between City of Fort Worth and Spinks Westside Associates,LLC
to be inserted here
Page IS of 16
HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
I
EXHIBIT"B"
Unit B,3,660 square feet
SPINKS WESTSIDE ASSOCIATES
SPINKS AIRPORT
13745 WING WAY, FORT WORTH, TX
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Page 16 of 16
HANGAR SUBLEASE AND EXCLUSIVE OCCUPANCY AGREEMENT
C"sFCRETARIi
CONTRACT N0, y
AGREEMENT
TERMINATING LEASE
FORT WORTH SPINKS AIRPORT
UNIMPROVED GROUND LEASE AGREEMENT
LEASE SITE 6W
This AGREEMENT TERMINATING LEASE ("Agreement") is made and
entered into by and between the CITY OF FORT WORTH ("Lessor"), a home rule
municipal corporation organized under the laws of the State of Texas, acting by and
through FERNANDO COSTA, its duly authorized Assistant City Manager and Spinks
West Side Associates, LLC, a Texas Limited Liability Company (Lessee), acting by and
through DARRELL CLENDENEN, its duly authorized Managing Member.
RECITALS
The following introductory provisions are true and correct and form the basis of
this Agreement:
A. Lessor previously entered into a Ground Lease Agreement ("Lease") at Fort
Worth Spinks Airport (the "Airport") known as City Secretary Contract No. 34065 on
June 14, 2006 with Spinks Air Associates, LLC. All defined terms used in this
Agreement that are not otherwise defined herein shall have the meaning as set forth in the
Lease.
B. Lessor and Lessee have decided to cancel and terminate the Lease and it is the
intention of Lessor and Lessee to effect the cancellation of the Lease by this instrument.
THEREFORE, in consideration of the covenants and agreements contained
below, and of the release and surrender by Lessee of the Lease and all of its rights in it
and all of its rights in and to Premises, of the release by Lessor of all Lessee's obligations
under the Lease, and for other valuable consideration, the receipt and sufficiency of
which are acknowledged here,the parties to this Lease agree as follows:
AGREEMENT
1. TERMINATION OF THE LEASE.
The Lease is hereby terminated effective as of January 31, 2017 ("Effective
Date"). Lessor hereby agrees to pay Lessee in the amount of $419,380.00 for the
termination of the Lease, which is intended to compensate Lessee for the leasehold
interest. Lessee and Lessee's heirs and assigns hereby forever releases, quitclaims, and
surrenders to Lessor the Lease and all rights of Lessee in and to the Premises and the
Agreement Terminating Lease
Fort Worth Spinks Airport EOFFICIALUnimproved Ground Lease Agreement—Spinks West Side Associates,LLC
Ramp Space. Lessee and Lessee's heirs further RELEASE, ACQUIT, AND FOREVER
DISCHARGE Lessor and Lessor's agents, servants, employees and all other persons from
any and all claims, demands, or causes of action of any kind whatsoever against Lessor
which Lessee may have now, known or unknown, existing, directly or indirectly
attributable to the Lease or this Agreement.
2. TERMINATION OF SUBLEASES
Lessee hereby agrees to cancel and terminate all existing subleases listed on the
attached Exhibit "A" no later than the Effective Date and to fulfill any requirements of
such termination, including the return of any deposits. Lessee certifies that all
requirements of the subleases listed on Exhibit "A" have been fulfilled and that neither
Lessee nor any subtenants are in default of the subleases. Lessor agrees to negotiate the
execution of month-to-month leases in good faith with current subtenants.
3. SURRENDER OF PREMISES.
Within 30 days following the Effective Date, the Premises shall be vacated of all
trade fixtures, tools, machinery, equipment, materials and supplies, furniture, and
personal property ("Tenant Property"). By entering into this Agreement, Lessee hereby
agrees that any Tenant Property remaining after this 30 day period shall become property
of the Lessor, and this Agreement constitutes a bill of sale for same to Landlord.
4. NOTICES TO LESSEE AFTER EFFECTIVE DATE.
All notices to Lessee after the Effective Date shall be addressed as follows:
Darrell Clendenen
41606 Date Street, Suite 203A
Murrieta, CA 92562
Agreement Terminating Lease
Fort Worth Spinks Airport
Unimproved Ground Lease Agreement—Spinks West Side Associates,LLC Page 2 of 4
IN WITNESS WHEREOF, the parties hereto have e ecuted this Agreement
Terminating Lease in multiples on this the day of 711,4 jq 1 , 2017.
CITY OF FORT WORTH:
By: �t 111
Fernando Costa
Assistant City Manager
Date: z1%I/`1"
STATE OF TEXAS §
COUNTY OF TARRANT §
BEFORE ME, the undersigned authority, a Notary Public in and for the State of
Texas, on this day personally appeared Fernando Costa, known to me to be the person
whose name is subscribed to this Agreement Terminating Lease, and acknowledged to
me that the same was the act of the City of Fort Worth and that he executed the same as
the act of the City of Fort Worth for the purposes and consideration therein expressed
and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this day
2017.
TRIKINYA L JOHNSON �-
;:; Notary Public,State of Texas
Comm.Expires 0417-201 B Notary!ublictin and fo'r the
Notary ID 1238832-0 State of Texas v
APPROVED AS TO FORM ATTEST:
AND—LEGALITY:
By: Z&—�' t By: arz l-
6 -'�-L'
aige Nfebane ary J. Kayser
Assistant City Attorney City Secretar V: T
M&C: C-28022
Approval Date: December 6,2016 :
Form 1295: 2016-130429
Agreement Terminating Lease
Fort Worth Spinks Airport
Unimproved Ground Lease Agreement—Spinks West Side Associates,LLC OFFICFALFR CORID
CITY SECRETARY
FT.WORTH,TX
A
Contract Compliance Manager:
By signing I acknowledge that I am the person responsible for the monitoring and
administration of this contract, including ensuring all performance and reporting
require nts.
Title
LESSEE: ATTEST:
Spinks Air Associ LLC
By: By:
arrel lendenen,
Managing, /Member
Date: Zo/
STATE OF §
COUNTY OF §
BEFORE ME, the undersigned authority, a Notary Public in and for the State of
Texas, on this day personally appeared Darrell Clendenen, known to me to be the
person whose name is subscribed to this Agreement Terminating Lease, and
acknowledged to me that the same was the act of Spinks Air Associates, LLC, and that
s/he executed the same as the act of Spinks Air Associates, LLC, for the purposes and
consideration therein expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this day
, 2017.
See following
notary certificate
Notary Public in and for the
State of
Agreement Terminating Lease
Fort Worth Spinks Airport
Unimproved Ground Lease Agreement—Spinks West Side Associates,LLC Page 4 of 4
A notary public or other officer completing this certificate verifies only the identity of California Certificate
the individual who signed the document to which this certificate is attached,and not of Acknowledgment
the truthfulness,accuracy,or validity of that document.
State of California ii )
County of iQtV2�S1/rC.� )
On` (2Clcat, ��' before me,Joanne Cooper, Notary Public,
personally appeared �f A 0'
who proved to me on the basis of satisfactory evidence to be the person(whose namejAlis/subscribed to the
within instrument and acknowledged to me that he/5W/may executed the same in his/hprffkrrrauthorized
capacity(es), and that by his/!)j�tXiir signaturej'on the instrument the personK,or the entity upon behalf of which
the person(a'racted,executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and
correct.
Witness my hand and official seal.
JOANNE COOPER
Z COMM.#2040227
s NOTARY PUBIIC CALIFORNIA Z
RIVERSIDE COUNTY
S i g n at u r My Commission Expres October 1,2011
(sea))
Optional Information
Description Of Attached Document
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containing pages and
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❑ Partner—Limited/General
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City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 12/6/2016 -Ordinance No. 22528-12-2016
DATE: Tuesday, December 6, 2016 REFERENCE NO.: C-28022
LOG NAME: 55FWS 3LEASETERM CLENDENEN
SUBJECT:
Authorize Termination of Three Ground Lease Agreements with Darrell Clendenen at Fort Worth Spinks
Airport, Authorize Amendment to the Municipal Airports Capital Improvement Plan for Fiscal Year 2016-
2017 to Increase Appropriations to $4,400,000.00 for the Acquisition of Leasehold Interests, Authorize
Payment of$1,660,120.00 to Spinks Air Associates, LLC, Authorize Payment of$419,380.00 to Spinks
West Side Associates, LLC, and Authorize Payment of$2,320,500.00 to Spinks East Side Executive
Hangars, Inc. to Acquire the Remaining Leasehold Interests, Authorize Use of Mineral Lease Revenue
from City Airports and Adopt Appropriation Ordinance (COUNCIL DISTRICT 6)
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize the termination of three Ground Lease Agreements with Spinks Air Associates, LLC, Spinks
West Side Associates, LLC, and Spinks East Side Executive Hangars, Inc.;
2. Authorize amendment to the Municipal Airports Capital Improvement Plan for Fiscal Year 2016-2017
to increase appropriations to $4,400,000.00 for the acquisition of leasehold interests;
3. Authorize payment of$1,660,120.00 to Spinks Air Associates, LLC, authorize a payment of
$419,380.00 to Spinks West Side Associates, LLC, and authorize a payment of$2,320,500.00 to Spinks
East Side Executive Hangars, Inc. to acquire the remaining leasehold interests; and
4. Authorize the use of mineral lease revenue from City Airports for the purchase of the leasehold
interests and adopt the attached appropriation ordinance increasing estimated receipts and appropriations
in the Airports Gas Lease Project Fund in the amount of$2,800,000.00.
DISCUSSION:
On February 24, 2004, (Mayor and Council Communication (M&C) L-13765), City Council approved an
unimproved ground lease, City Secretary Contract(CSC) 30198, with Darrell Clendenen with Spinks Air
Associates, LLC, at Fort Worth Spinks Airport(Spinks Airport). Spinks Air Associates, LLC, constructed
three hangar facilities, collectively consisting of 49,301 square feet, on the east side of Spinks Airport.
On July 19, 2005, (M&C C-20855) City Council approved an unimproved ground lease, CSC No. 34065,
with Darrell Clendenen with Spinks West Side Associates, LLC, which resulted in the construction of one
18,420 square foot hangar facility on the west side of Spinks Airport.
On March 4, 2008, (M&C C-22703) City Council approved an unimproved ground lease, CSC No. 36733,
with Darrell Clendenen with Spinks East Side Executive Hangars, LLC, which resulted in the construction
of two executive hangar facilities, collectively consisting of 54,600 square feet, on the east side of Spinks
Airport.
Logname: 55FWS 3LEASETERM CLENDENEN Page 1 of 3
Mr. Clendenen recently approached the City expressing his desire to terminate all of his Lease
Agreements. Mr. Clendenen asked if the City would be interested in purchasing the leasehold interests in
these properties. Recognizing the good condition and value that the hangar facilities possess, the
Aviation Department had the leasehold interests appraised to determine the appropriate value. Based on
the appraised value, the Aviation Department and Mr. Clendenen have tentatively agreed on a purchase
price of$4,400,000.00 for all three of the aforementioned leasehold interests, contingent on City Council
approval.
The net profit received from leasing these facilities will be approximately$327,600.00 annually, or
$27,300.00 per month. The annual net income will surpass the overall cost of the facilities in year 12.
These projected revenues are based in accordance with the Aviation Department's Schedule of Rates and
Charges. At present, all facilities are fully occupied and a waiting list has been established.
Spinks Airport is currently not financially self-sufficient and operates at a net deficit of approximately
$320,000.00 annually. It is being subsidized through Meacham Airport's revenue. With the acquisition of
these hangar facilities, revenue will increase and, in turn, bridge the budget gap for Spinks Airport. The
Federal Aviation Administration requires public use airports to try to be as self-sustaining as possible and
is documented through Grant Assurances. In particular, Grant Assurance No. 24 states, "Airport will
maintain a fee and rental structure for the facilities and services at the airport which will make the airport
as self-sustaining as possible."
On September 13, 2016, City Council (Ordinance 22394-09-2016) approved the Municipal Airports Capital
Improvement Plan for Fiscal Year 2016 - 2017 which included a project to acquire hangar leasehold
interest in the amount of$1,600,000.00. The Aviation Department would like to amend the plan to
increase the amount appropriated for this project by$2,800,000.00 for a total project cost of
$4,400,000.00. This increase will allow for the Aviation Department to purchase additional hangars.
Staff recommends approval to terminate the Ground Lease Agreements and approve the payment to
Spinks Air Associates, LLC, Spinks West Side Associates, LLC, and Spinks East Side Executive Hangars,
Inc. to purchase leasehold interest.
FISCAL INFORMATION/CERTIFICATION:
The Director of Finance certifies that upon approval of the above recommendations and adoption of the
attached appropriation ordinance,funds will be available in the current capital budget, as appropriated, of
the Airports Gas Lease Project Fund. The Aviation Department is responsible for the collection and
deposit of funds due to the City under this Agreement, if approved.
FUND IDENTIFIERS (FIDS):
TO
Fund Department ccoun Project JProgram ctivity Budget Reference# moun
ID ID Year Chartfield 2
FROM
Fund Department ccoun Project Program ctivity Budget Reference # moun
ID ID Year (Cha field 2
CERTIFICATIONS:
Submitted for City Manager's Office by: Fernando Costa (6122)
Logname: 55FWS 3LEASETERM CLENDENEN Page 2 of 3
Originating Department Head: Bill Welsted (5402)
Anne-Marie Stowe (5415)
Additional Information Contact: Aaron Barth (5434)
ATTACHMENTS
1. 55FWS 3LEASETERM CLENDENEN AO.docx (Public)
2. Form 1295 Clendenen.pdf (Public)
3. MAP Clendenen.pdf (Public)
Logname: 55FWS 3LEASETERM CLENDENEN Page 3 of 3
0 -As 001'a C."
CERTIFICATE OF INTERESTED PARTIES
FORM 1295
loft
Complete Nos.i-4 and 6 if there are interested parties. OFFICE USE ONLY
Complete Nos.1,2,31 5,and 6 if there are no Interested parties. CERTIFICATION OF FiLING
1 Name of business entity filing form,and the city,state and country of the business entity's place Certificate Number:
of business. 12016-130429
Spinks Air Associates LLC
Fort Worth,TX United States Date Flied:
2 Name of governmental entity or state agency that Is a party tot the contract for which the forms 10/30/2016
being filed.
City of Fort Worth Department of Aviation Date Acknowledged:
3 Provide the identification number used by the governmental entity or state agency to track or identify the contract,and provide a
description of the services,goods,or other property to be provided under the contract.
Lease Sites 6W,7E,8E,9E,10
Termination of Ground Lease Agreements at Fort Worth Spinks Airport
4 Nature of interest
Name of interested Party City,State,Country(place of business) (check applicable)
Controlling I Intermediary
5 Check only if there is NO Interested Party. ❑
X
6 AFFIDAVIT,t t t r t i,, I swear,or affirm,under penalty perj ry, a e a above disclosure is true and correct.
?� 'v PO'•�y i %r
.o F(( �� ign tGre q�uthorized agent of contracting business entity
AFF&;4OT/�RSi��t VX o* i0.�L ABOVE
,i�'ERSON����
Swo ahWA blAe'd before me,by the saidjV��t-( CA t 7this the day of�
20 to certify which,witness my hand and seal of office.
I n b
1�j
Signature of officer administering oath inted name of officer administering oath Title of officer administerinqdath
Forms provided by Texas Ethics Commission www.ethics.state.tx.us Version V1.0.277
C. Exhjli� CITY T SECRETARY
CONTRACT NO,
FORT WORTH SPINKS AIRPORT
UNIMPROVED GROUND LEASE AGREEMENT
AND ASSOCIATED MANDATORY IMPROVEMENTS
This UNIMPROVED GROUND LEASE AGREEMENT ("Lease") is made and
entered into by and between the CITY OF FORT WORTH ("Lessor"), a home rule municipal
corporation organized under the laws of the State of Texas and acting by and through Marc Ott, its
duly authorized Assistant City Manager, and Spinks West Side Associates,Ag� t "Lessee"), acting
by and through Darrell Clendenen,its duly authorized President.
In consideration of the mutual covenants, promises and obligations contained herein, the
parties agree as follows:
1. PROPERTY LEASED.
Lessor hereby demises to Lessee four (4) parcels of unimproved ground space at
Fort Worth SPINI S'Airport("Airport") in Fort Worth, Tarrant County, Texas, identified
as 13601; 13655; 13701; and 13745 Wing Way,Fort Worth Texas (hereinafter individually
referred to as a "Parcel" and collectively referred to as the "Premises"), as shown in
Exhibit"A",attached hereto and hereby made a part of this Tease for all purposes.
2. TERM OF LEASE.
2.1. initial Term.
The Initial Terni of this Lease shall conunence on the date of its execution
("Effective Date") and expire at 11:59 p.m. on December 31, 2036, unless terminated
earlier as provided herein.
2.2 Renewals.
Tf Lessee performs and abides by all provisions and conditions of this Lease, upon
expiration of the Initial Term of this Lease,Lessee shall have two (2)consecutive options to
renew this Lease for two (2) additional successive terms of five (5) years each (each a
"Renewal Term") at a rental rate calculated in accordance with Section 3.1 of this Lease
and on terms and conditions that may be prescribed by LesSOT at the time. Lessee shall
notify Lessor in writing of its intent to exercise a respective option not less than ninety(90)
nor more than one hundred eighty (180) days prior to the expiration of the term then in
effect. If Lessee does not exercise its option for a first Renewal Term within the time frame
provided herein, Lessee shall automatically and simultaneously forfeit its second option to
lease the Premises for a second Renewal Tenn, and Lessee shall no longer have any rights
or interest hi the Premises following the expiration of the Tnitial'Perm.
OFFICIAL HIC00
10-02-06A08:51 RCVD CRY ���1RARY
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A,.,VHj 7EX.
2.3. Holdover.
If Lessee holds over after the expiration of the Initial Term or any Renewal Term,
this action will create a month-to-month tenancy. In this event,for and during the holdover
period, Lessee agrees to pay all applicable rentals,fees and charges at the rates provided by
Lessors Schedule of Rates and Charges or similarly published schedule in effect at the time.
3. RENT.
3.1. Rates and Adjustments.
Lessee shall construct the Mandatory Improvements defined in Section 4.1 on
the Parcels referred to and described in Exhibit S in at least three (3) phases (the
construction of the Mandatory Improvements on any individual .Parcel within the
Premises shall hereinafter be referred to as a i'Phase").
Lessee shall commence the payment of rent, in accordance with this Section 3, on
the date that a certificate of occupancy is issued for the Mandatory Improvements
constructed in each Phase ("Occupancy Date"). From the Occupancy Date until (date)
September 30, of the year in which each Phase is completed,Lessee shall pay Lessor rent in
the amount of$0.18 per square foot on an annual basis,for each ground floor square foot in
each of the completed Phases. The rent shall be paid in monthly installments equal to 1/126'
of the annual rent. On October 1, 2008, and on October 1 st of each year thereafter during
both the Initial Tenn and any Renewal Term, Lessee's rental rate Ibr the Mandatory
Improvements on any Parcel completed as of that date shall be subject to increase by Lessor
to reflect the upward percentage change, if any, in the Consumer Price Index for the
Dallas/Fort Worth Metropolitan Area, as announced by the United States Department of
Tabor or successor agency (i), for the first increase, since the Effective Date of this Lease
and (ii) For each subsequent increase, since the effective dale of the last increase; provided,
however,that Lessee's rental rates shall not(i)be increased in any given year by more than
five percent (05%) over the rental rate paid by Lessee during the immediately preceding
twelve (12) months or (ii)exceed the then-current rates prescribed by Lessor's published
Schedule of Rates and Charges for the type or types of property at the Airport similar to the
type or types of properly that comprise the Premises. If the Occupancy Date of the
Mandatory Improvements on a Parcel occurs on or after October 1, 2007, Lessee's initial
payment of rent shall be calculated hi the same manner as it would have if the'Occupancy
Date and Lessee's initial payment ofrent had occurred prior to October 1,2007.
3.2. Payment Dates and Late Fees.
Monthly rent payments are due on or before the first (1 st) dayof ' ach month.
Payments must be received during normal working hours by the due date ai th location for
Lessor's Revenue Office set forth in Section 15. Rent shall be considered past ue if Lessor
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has not received full payment after the tenth(10th) day of the month for which payment is
due. Without limiting Lessor's termination rights as provided by this Lease, Lessor will
assess a late penalty charge of ten percent (10%) per month on the entire balance of any
overdue rent that Lessee may accrue.
3.3 Five-Year Adiustments.
In addition to the rental rate adjustments set forth in Section 4.3 of this Lease, on October 1,
2012, and every five(5)years thereafter, the various rental rates payable by Lessee pursuant
to Sections 4.1 and 4.2 shall automatically be adjusted to equal the then-current rates for the
same types of property as prescribed by Lessor's Schedule of Rates and Charges or similarly
published schedule in effect at the time.
4. CONSTRUCTION AND IMPROVEMENTS.
4.1. Mandatory Improvements.
As additional security for this lease Lessee covenants and agrees that it shall
construct the improvements on the Parcels which constitute the Premises owned by the
City of Fort Worth in a minimum of three Phases in accordance with the time (names,
milestones,specifications and other conditions of Exhibit "B",attached hereto and made a
part of this Agreement for all purposes. The improvements approved for each Parcel shalt
be rel'erred to as "Mandatory Improvements". Lessee shall diligently commence
construction of the Mandatory Improvements on at let3.sl one Parcel selected by Lessee
within twelve (12) months following the Effective Date of this Lease and Lessee shall
thereafter commence construction of the Mandatory Iimprovements on at least one
remaining unimproved Parcel within twelve (12) months following the issuance of the
certificate of Occupancy for the Mandatory Improvements completed in the preceding
Phase until each of the Parcels constituting the Premises are developed pursuant to Exhibit
13 .. Lessee shall fully comply with all provisions of this Section 4 in the perfonnancc of any
such Mandatory Improvements. In the event that Lessor and Lessee agree to deviate from
the terms, provisions, specifications or conditions of Exhibit "B" in any way, a revised
Exhibit"B"signed and dated by both Lessor and Lessee shall be attached to and made a part
of this Agreement and shall supersede the previous Exhibit "B". Upon completion of the
Mandatory Improvements in each of the Phases, or earlier termination of this Lease, or any
portion of this lease , and subject to Lessee's rights to receive insurance proceeds under
section 11.1,Lessor shall take full title to,and for all purposes be deemed the owner of, any
Mandatary improvements on the Premises.
4.2. Discretionary Improvements.
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In addition to the Mandatory Improvements, Lessee may, at its sole discretion,
perform modifications, renovations, improvements or other construction work on the
Premises. Any modifications,renovations,improvements or other construction work on the
Premises that do not constitute the Mandatory Improvements shall be referred to hereafter
as "Discretionary Improvements". Lessee may not initiate any Discretionary
improvement on or to the Premises-unless it first submits all plans, specifications and
estimates for the costs of the proposed work in writing and also requests and receives in
writing approval from the Director of Airport Systems or authorized representative
("Director"). Lessee covenants and agrees that it shall fully comply with all provisions of
this Section 4 in the performance of any such Discretionary Improvements. Upon
completion of any such Discretionary Improvements or earlier termination of this lease,
Lessor shall take full title to any Discretionary Improvements on the Promises.
4.3. Process for Annroval of Plans.
Lessee's plans for construction and improvements shall conform to the Airport's
architectural standards and must also receive written approval from the City's Departments
of Development, Engineering and 'Transportation and Public Works. All plans,
specifications and work shall conform to all federal, state and local laws, ordinances, rules
and regulations in force at the time that the plans are presented for review.
4.4, Documents.
i.essee shall supply the Director with comprehensive sets of documentation relative
to the Mandatory Improvements and any Discretionary Improvements, including, at a
minimum, as-built drawings of each project. As-built drawings shall be new drawings or
redline changes to drawings previously provided to the Director. Lessee shall supply the
textual documentation in computer format as requested by Lessor.
4S. Bonds Required of Lessee.
Prior to the commencement of the Mandatory Improvements or any Discretionary
Improvements, Lessee shall deliver to Lessor a bond, executed by a corporate surety in
accordance with Texas Government Code, Chapter 2253, as amended, in the full amount of
each construction contract or project. The bonds shall guarantee(i) satisfactory compliance
by L'essce with all requirements, terms and conditions of this Lease, including, but not
limited to, the satisfactory completion of the respective modifications, renovations,
construction projects or improvements; and (ii) full payments to all persons, firths,
corporations or other entities with whom Lessee has a direct relationship for the
performance of such modifications,renovations,construction projects or improvements.
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In lieu of the required bond, Lessee may provide Lessor with a cash deposit or an
assignment of a certificate of deposit in an.amount-equal to 125%of the full amount oi'eaeb
construction contract or project. If Lessee makes a cash deposit,Lessee shall not be entitled
to any interest earned thereon. Certificates of deposit shall be from a financial institution in
the Dallas-Fort Worth Metropolitan Area which is insured by the Federal Deposit Insurance
Corporation and acceptable to Lessor. The interest earned on the certificate of deposit shall
be the property of Lessee and Lessor shall have no rights in such interest. If Lessee fails to
complete the respective modifications, renovations, construction projects or improvements,
or if claims arc filed by third parties on grounds relating to such modifications,renovations,
construction projects or. improvements, Lessor shall be entitled to draw down the full
amount of Lessee's cash deposit or certificate of deposit.
4.6. Bonds Required of Lessec's Contractors.
Prior to the commencement or any modification, renovation, or subsequent
improvements, Lessee's respective general contractor, if any, shall execute and deliver to
Lessee surety performance and payment bonds in accordance with the Texas Government
Code, Chapter 2253, as amended, to cover the costs of all work performed under such
contractor's contract for such modifications, renovations, improvements or neve
construction. Lessee shall provide Lessor with copies of such bonds prior to the
commencement of such modifications, renovations, improvements or new construction.
The bonds shall guarantee (i) the faithful performance and completion of all construction
work in accordance with the final plans and specifications as approved by the City and (ii)
full payment for all wages for labor and services and of all bills for materials, supplies and
equipment used in the performance of the construction contract. Such bonds shall name to
both Lessor and Lessee as dual obligees. If Lessee serves as its own contractor, Section 4.5
shall apply.
4.7. Releases by Lessor.Upon Completion of Construction Work.
Lessor will allow Lessee a dollar-for-dollar reimbursement from its cash deposit
account or reduction of its claim upon Lessor's certificate of deposit to pay subcontractors
upon (i), where Lessee serves as its own contractor, verification that Lessee has completed
the constriction work for which payment is due or (ii), where Lessee uses a contractor,
receipt orthe contractor's invoice and verification that the contractor has completed its work
and released Lessee to the extent of Lessee's payment for such work, including bills paid,
affidavits.and waivers of liens.
5. USE OF PREMISES.
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Lessee hereby agrees to use the Premises for aviation-related purposes only and
strictly in accordance with the terms and conditions of this Lease. Lessee shall have the
right to sublease portions of the Premises, including individual hangars constructed
pursuant to the Mandatory Improvements, to various third parties ("Sublessees") under
terms and conditions acceptable to and determined by Lessee, provided thAt all such
arrangements shall be in writing and approved in advance by Lessor. All written
agreements executed by Lessee to Sublessees for any portion of the Premises shall contain
terms and conditions that (i) do not conflict with Lessee's duties and obligations under this
Lease; (ii) incorporate the terms and provisions of this Lease; (iii) restrict the use of the
Premises to aircraft storage or other aviation or aviation-related purposes acceptable to
Lessor; and (iv) treat users of the same or substantially similar facilities in a fair and non-
discriminatory manner. Lessee shall use a standard lease form for all Sublessees and shall
submit a copy of such standard lease form, including rental rates, to the Director or his
designated representative prior to Lessee's execution ol'its first lease and from time to time
thereafter following any material changes to such lease form, including, without limitation,
any changes to Lessee's rental rates for portions of the Premises. Lessee may make non-
material modifications to its standard lease to the extent that such are not contrary to
Lessor's Sponsor's Assurances.
6. REPORTS,AUDITS AND RECORDKEEPING.
Within thirty.(30)days following the end of each calendar year,Lessee shall provide
Lessor with a written annual report,in a form acceptable to the Director, that reflects Lessee'
s rental rates for the Mandatory Improvements and any Discretionary Improvements on the
Premises for the immediately preceding calendar year. Lessor may request,and Lessee shal I
promptly provide, similar reports on a more frequent basis that reflect Lessee's rental rates
for the Mandatory Improvements and any Discretionary Improvements on the Premises (br
the period requested by Lessor. 'These reports shall be delivered to Lessor's Department of
Aviation at the address provided in Section 15. in addition,Lessee shall keep and maintain
books and records pertaining to Lessee's operations at the Airport and other obligations
hereunder in a manner satisfactory to Lessor's Internal Auditor and at a location within the
City of Fort Worth. Upon Lessor's request and following reasonable advance notice,Lessee
will make such books and records available for review by Lessor during Lessee's normal
business hours. Lessor, at Lessor's sole cost.and expense, shall have the right to audit such
books and records in order to ensure compliance with the terms of this Lease and the
Sponsor's Assurances made by Lessor to the Federal Aviation Administration.
i
7. UTYLITIES.
Lessee, at Lessee's sole cost and expense, shall be responsible for the installation
and use of all utilities services within the Premises and for all other related utilities
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'CATS ',E,1r1_'P2MRUff
expenses.. Lossor covenants and agrees to pay all costs and expenses for any extension,
maintenance or repair of any and all utility main lines serving the Promises. Lessee agrees
that all utilities, air conditioning and heating equipment and other electrically-operated
equipment which may be used on the Promises shall fully comply with Lessor's Mechanical,
Electrical, Plumbing,Building and Fire Codes ("Codes"), as they exist or may herealler be
amended.
S. MAINTENANCE AND REPALRS.
8.1. Maintenance and Repairs by Lessee.
Lessee agrees to keep and maintain the Premises in a good, clean and sanitary
condition at all times. Lessee covenants and agrees that it will not make.or suffer My waste
of the Premises. Lessee, at Lessee's sole cost and expense, w411 snake all repairs necessary
to prevent the deterioration in condition or value of the Promises and any improvements
thereon,including,but not limited to,doors,windows and roofs for such improvements,and
all fixtures, equipment, modifications and pavement on the Promises. Lessee shall be
responsible for all damages caused by Lessee, its agents, servants, employees, contractors,
subcontractors, licensees or invitees, and Lessee agrees to fully repair or otherwise cure all
such damages at Lessee's sole cost and expense. 11
Lessee agrees that all improvements, trade fixtures, farnishings, equipment and
other personal property of every kind or description which may at any time be on the
Promises shall be at Lessee' sole risk or at the sole risk of those claiming under Lessee.
Lessor shall not be liable for any damage to such property or loss suffered by Lessee's
business or business operations which may be caused by the bursting, overflowing or
leaking of sewer or steam pipes, from water from any source whatsoever, or from any
heating fixtures,plumbing fixtures, electric wires,noise,gas or odors, or from causes of any
other matter.
8.2. Compliance with ADA.
Lessee,at its sole cost and expense, agrees to keep and maintain the Premises in full
compliance at all times with the Americans with Disabilities Act of 1990, as amended
("ADA"). In addition, Lessee agrees that all improvements it makes at the Airport shall
comply with all ADA requirements.
8.3. Inspections.
8-3.1. Lessor shall have the right and privilege, through its officers, agents,
servants or employees, to inspect the Premises. Except in the event of an
emergency, Lessor shall conduct such inspections during Lessee's Ordinary business
hours and shall use its best efforts to provide Lessee at least two (2) hours' notice
prior to any inspection.
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