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2006-064FILE REFERENCE FORM 2006-064 X Additional File Exists Additional File Contains Records Not Public, According to the Public Records Act Other FILES liate in~na~s Consent to Assignment of Sub-Lease [original is attached] 04/30/08 ) R ' S:\Our Documents\Ordinances\06\ASSignmen[ of pad site 1VG4845.doc ORDINANCE NO. ~OD~G AN ORDINANCE APPROVING ASSIGNMENTS OF A CERTAIN COMMERCIAL AIRPORT OPERATOR'S LEASE BETWEEN JVC REAL ESTATE, L.L.C. AND 4845 LOCTHEED ASSOCIATES, LTD. AND APPROVING A SUBSEQUENT ASSIGNMENT AND SUBLEASE FROM 4845 LOCKHEED ASSOCIATES, LTD. TO JVC HANGARS, L.L.C.; APPROVING A FRACTIONAL INTEREST CONCEPT WHICH SUBDIVIDES THE JVC REAL ESTATE, L.L.C. LEASE INTO THREE SEPARATE UNITS ALLOWING A PARTIAL TRANSFER, SUBLEASE AND ASSIGNMENT OF THESE UNITS SUBJECT TO ALL IMPROVEMENTS COMPLYING WITH APPLICABLE CITY CODE REQUIREMENTS; DELEGATING TO THE CITY MANAGER THE AUTHORITY TO APPROVE ASSIGNMENTS FROM JVC HANGARS, L.L.C. OR ANY SUCCESSOR IN INTEREST OF THE FRACTTONAL UNITS; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, John Vann, President of J VC Real Estate, L.L.C. has proposed a "Fractional Interest Concept" ("Concept") whereby the hangar and office improvements erected on JVC Real Estate, L.L.C.'s Commercial Operator's Lease ("Lease") at the Airport dated September 21, 2004 of .455 acres of land would be split into three separate units which could be subsequently assigned, conveyed or subleased under a partnership agreement; and WHEREAS, the Airport Advisory Board ("Airport Board"), at its meeting of January 27, 2006, recommended the City Council approve this Concept and the Assignment of the Lease from JVC Real Estate, L.L.C. to a partnership known as 4845 LOCKHEED ASSOCIATES, LTD. ("Partnership") and a subsequent assignment and sublease from the Partnership to JVC Hangars, L.L.C., subject to the improvements meeting all applicable City Code requirements, including applicable fire suppression and/or area separation requirements; and WHEREAS, the Concept involves the ultimate transfer and sublease of the separate hangar/office units to limited partners of the Partnership provided that the Partnership and previous assignors remain fully liable and responsible for compliance with all the terms of the Lease in case of a default and the Partnership will remain primarily responsible for paying the rent and performing all the lessee's obligations under the Lease; and WHEREAS, the City Council deems it in the public interest to approve the Concept and the requested assignments and sublease and to delegate to the City Manager the authority to approve the assignment transfer and sublease of the separate units under the Lease to the limited partners; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The findings set forth in the preamble of this Ordinance are incorporated by reference into the body of this Ordinance as if fully set forth herein. SECTION 2. The City Council approves the Concept set forth above subject to the hangar/office improvements meeting all applicable City Code requirements including, without limitation, applicable fire suppression and/or area separation requirements, the City Manager, or his designee, is hereby authorized to execute an Assignment of a leasehold interest in the Airport Lease Agreement Commercial Operator at the Denton Municipal Airport described above from ' S:\pur Documents\Ordinances\ObWssignment of pad site NC-484Sdoc JVC Real Estate, L.L.C. to 4845 LOCKHEED ASSOCIATES, LTD., in substantially the form of the Assignment attached to and made a part of this Ordinance for all purposes, to evidence the City's consent to the Assignment. SECTION 3. After the improvements have met all applicable City Code requirements and the Lease has been assigned to 4845 LOCKHEED ASSOCIATES, LTD., the City Manager, or his designee is hereby authorized to execute an Assignment of a leasehold interest in the Airport Lease Agreement Commercial Operator at the Denton Municipal Airport described above and a Sublease of that interest from 4845 LOCKHEED ASSOCIATES, LTD. to JVC Hangars, L.L.C., in substantially the form of the Sublease and Assignment attached to and made a part of this Ordinance for all purposes, to evidence the City's consent to the Assignment. SECTION 4. The City Council hereby delegates the authority to the City Manager to approve the assignments and subleases, and transfers of the separate hangar/office units under the Lease from JVC Hangars, L.L.C. to limited partners under the Concept provided that all previous assignors, including JVC Real Estate, L.L.C., the 4845 LOCKHEED ASSOCIATES, LTD. Partnership and JVC Hangars, L.L.C. shall remain fully responsible for compliance with the Lease terms and conditions in the event of a default and the Partnership shall remain primarily responsible for performance of all the obligations of the Lease. SECTION 5. Save and except as amended hereby, all the remaining clauses, sentences, paragraphs, sections and subsections of Chapter 3 of the City Code shall remain in full force and effect. SECTION 6. This Ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the~~day of ~ , 2006. Cam ~~~ EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED ASfiO LEGAL FORM: EDWIN M. SNYDER, CITY ATTQ~ BY: Page 2 of 2 C:\Documents and Settings\karen\LOCaI Settings\Temporary Interne[ Files\OLK2CWVC-0845 Lockheed AssignmentLdoc LEASE ASSIGNMENT OF COMMERCIAL OPERATORS LEASE AT DENTON MUNICIPAL AIRPORT DATE: February 'L3 , 2006 ASSIGNOR: JVC Real Estate, L.L.C. ASSIGNEE: 4845 LOCKHEED ASSOCIATES, LTD. LEASE: Date: September 21, 2004 Landlord: City of Denton, Texas Tenant: JVC Real Estate, L.L.C. Premises: Approximately .455 acres of land located at 4845 Lockheed Lane, Denton, Texas 76207 and more fully described in the Attachment A and B which is made a part of this Assignment for all purposes. Assignor assigns to Assignee Tenant's interest in the lease. A. Assignee Agrees To: 1. Assume Tenant's Obligations under the Lease. 2. Accept the premises in their present "as is" condition. 3. Complete all obligations of purchase from Assignor prior to this Assignment becoming effective. Landlord consents to this assignment. Landlord agrees to notify Assignor within 30 days of any Assignee default. B. Assignor agrees as a condition of Landlord's consent to this Assignment that: 1. Assignor will remain liable on the Lease should Assignee default on the Lease. 2. Assignor will pay or will have the Assignee pay the Landlord a $500 transfer fee. 3. Assignor will pay or will have the Assignee pay all the Landlord's administrative costs of handling and processing this assignment, including without limitation, all Landlord's reasonable attorneys fees and Landlord's staff time associated with this assignment. PREVIOUS ASSIGNMENTS: None For JVC'Re~l Estate L.L.C., Assignor By: John C:\Documents and SettingsUcaren\Local SettingslTemporary In[emet Files\OLK2CUVC-4845 Lockheed Assignmentl.doc For 4845 LOCKHEED ASSOCIATES, LTD., Assignee A Texas Limited Partnership By: LOCKHEED INVESTORS, L.L.C. A Texa invited Liability Company Genera P ner By: John nn, Manager City of Denton, Landlord /r l Howard Martin, Inter' City Manager Attest: Jennifer Walters, City Secretary Approved as to Legal Form: Edwin M. Snyder, City Attorney '~ BY~ STATE OF TEXAS COUNTY OF DENTON This instrument was acknowledged before me on the ~3~ day of G~lv 2006, by John Vann, President of JVC Real Estate, L.L.C., a State of Texas Corporati n, on behalf of said Corporation. [SEAL] ,.~o,:"~t~~+'~'~ BRANDY HEITZMAN " Notery Public, State of Taxes ~'' , My Commission Expires '~ ``° \ May t2. 2008 ary ublic, State ofTe as y Commission Expires (or Notary Stamp) Page 2 of 3 C:\Documents and Settings\karen\Local Settings\Temporary Interne[ Files\OLK2CUVC-4845 Lockheed Assignmentl.doc STATE OF TEXAS COUNTY OF DENTON This instrument was acknowledged before me on the 23~dday of /'C~r~r~ 2006, by John Vann, Manager of LOCKHEED INVESTORS, L.L.C., a State of T xas Corporation, on behalf of said corporation, and the corporation acknowledged this instrument as General Partner on behalf of 4845 LOCKHEED ASSOCIATES, LTD., a Texas Limited Partnership. .,.'.: .•:•. °~""°" BRANDi HEITZMAN ~~'/, j [SEAL] •:;' a Naary Public, State of~Te~gas oY ry Pubhc; State of .¢. a My Commission E "N~~;m May 12, 2008 My Commission Expiry (or Notary Stamp) STATE OF TEXAS COUNTY OF DENTON This instrument was acknowledged before me on the day of ~~.,,~ 2006, by Howard Martin, Interim City Manager on behalf the City of Denton, T as~, a munle-ipal corporation. [SEAL] ~"~~ ~w+~xecor NOTAgY PIlIJC STA1[ lr TIaG/ /h.~ Notary Public, Sta e of 7 as My Commission Expires J' ~ (or Notary Stamp) Page 3 of 3 ti' iv .f-CN O Tdl2^ a~5 - T7diC 21lN Y ---I O 1 ~ m I I 1 i O ~ I J I - O I r L I I n I m _ A C _ i ~ Z j-d-) ? is 1 O I.y ~ 1 ~ T W OfL u 1 1 Q ~+ I~ Z-V ~ Ouiz=O .. j - W 6 ON z.,opm - I - a m LLKLK I d I b .~ N 1 W u m I W ~ Is L C d p I x of I u ~ + I p m I O O 1 d C C I CD W d 1 .7 O Q ~ I g I p I ~ I m p ~ , _ ~ k z i-Q ~ m b I H O 1 ~ X i ~ ~L I Z-4 Y ~ vO~~p Oz1~0 I ~~Opm LLKWK I I 1 I ~ W KL ~ry.~T I I I 1 vJ?~O I U ~?=C Oy. I H j-~_ I ~ Oj~rcm C 0 ~ X Q' p 1 .~ 0>tl LLKI~K ~ O I 1 ' Z-~ 9 ~ ~ i ~ I m 1 ~ n - ~ A - 1 U I O I v I I ~ L f I ~ J ~ 0\ I I ~ _( ~ y O I __ -I ~ ~ Q \ m 1IV 130 335 - Tld 111 321h r11 C1 LLI N h - ' i ,~~ ~ C:\DOCUments and Settings\karen\Local SettingslTemporary ln[ernet Files\OLK2C\4545 Lockheed-JVC hangars Assignmentl.doc LEASE ASSIGNMENT OF COMMERCIAL OPERATORS LEASE AT DENTON MUNICIPAL AIRPORT DATE: February Z3 2006 ASSIGNOR: 4845 LOCKHEED ASSOCIATES, LTD. ASSIGNEE: JVC Hangars, L.L.C. LEASE: Date: September 21, 2004 Landlord: City of Denton, Texas Tenant: 4845 LOCKHEED ASSOCIATES, LTD. Premises: Approximately .455 acres of land located at 4845 Lockheed Lane, Denton, Texas 76207 and more fully described in the Attachment A and B which is made a part of this Assignment for all purposes. Assignor assigns to Assignee Tenant's interest in the lease. A. Assignee Agrees To: 1. Assume Tenant's Obligations under the Lease but Assignor shall remain primarily responsible for the performance of the obligations of the Lease. 2. Accept the premises in their present "as is" condition. 3. Complete all obligations of purchase from Assignor prior to this Assignment becoming effective. Landlord consents to this assignment. Landlord agrees to notify Assignor within 30 days of any Assignee default and to notify Assignee in the event of Assignor's default. B. Assignor agrees as a condition of Landlord's consent to this Assignment that: 1. Assignor will remain liable on the Lease and, should Assignor default on the Leasc, Assignee wiL' remain iiable-i~:r performing aii obligations under the Lease. 2. Assignor will pay or will have the Assignee pay the Landlord a $500 transfer fee. 3. Assignor will pay or will have the Assignee pay all the Landlord's administrative costs of handling and processing this assignment, including without limitation, all Landlord's reasonable attorneys fees and Landlord's staff time associated with this assignment. PREVIOUS ASSIGNMENTS: Assignment of the same date from JVC Real Estate, L.L.C. to 4845 LOCKHEED ASSOCIATES, LTD. C:\Documen[s and Settings\karen\Local Set[ingslTemporary In[eme[ Files\OLK2C\4845 Lockheed-JVC Hangars Assignmentl.doc For 4845 LOCKHEED ASSOCIATES, LTD., Assignor A Texas Limited Partnership By: LOCKHEED INVESTORS, L.L.C. A Te~Limited Liability Company By: John For JV By: John Manager L.L.C., Assignee President Attest: Jennifer Walters, City Secretary By: ~ ) Appr ed as to Legal Form: Edwin M. Snyder, City Attorney By: STATE OF TEXAS COUNTY OF DENTON City of Denton, Landlord wv\ Howard Martin, Interim ity Manager This instrument was acknowledged before me on the~3Y~day of lwu 2006, by John Vann, Manager of LOCKHEED INVESTORS, L.L.C., a State of exas Corporation, on behalf of said corporation, and the corporation acknowledged this instrument as General Partner on behalf of 4845 LOCKHEED ASSOCIATES, LTD., a Texas Limited Partnership. :~~"` ~:;°*~ BRANDT HEITZMAN ?'•' ~€ Notery Public, State of Texas [SEAL] 3?i~/ e~~:` My Commission Expires "• ,„..~~ Mav f z. zoos otary Public, State of Texa My Commission Expires (or Notary Stamp) Page 2 of 3 • C:\DOCUmen[s and Scttings\karen\Local SettingslTemporary Interne[ Files\OLK2C\4845 Lockheed-1VC Hangars Assignmentl.doc STATE OF TEXAS COUNTY OF DENTON This instrument was acknowledged before me on the 23r~day of G~ ~ ~"-~"1"~ 2006, by John Vann, President of JVC Hangazs, L.L.C., a State of Texas Corporation, on behalf of said Corporation. [SEAL] STATE OF TEXAS COUNTY OF DENTON ~~*':; ~; BRANDT HEITZMAN k e Notary Public, Stete of Texas ?.e • e My Commission Expires ;~"c "~•;;;;`,r May 12. 2008 a~'y Public, State of T. Commission Expires (or Notary Stamp) This instrument was acknowledged before me on thea3 ~ day of ~~~ 20~, by Howard Martin, Interim City Manager on behalf the City of ntoa municipal corporation. >s [SEAL] ~ •r=w Notary ublic, State of ea s My Commission Expires o2/ p (or Notary Stamp) Page 3 of 3 . ~ •. .E-.[Yl O llYl3p 33S - TIYIE 3MN i . -_I O I ~ n I i I O I I I I I ~ p 1 r ~ I - n m I b < I i C7 z T-d' ? a e 1 t. i p ~ Y ~ o t W Kt ~° I a I in 1~ Z-d _Rl ui ~a = ~ i m ~~, o ¢ ~ jal 7 H I C ~D p>>Km I N .y t~ ~~opW t a m LLK LR' I 6 I v .~ W I v u m _ x I v ~~ s c v 4 I .y ^ F. I u E o ~ I o I a ^ c m I O O 1 V1 L L I d C C I CO N N I J Q Q OI I I O i p LL m I 'f ~ , k - ~ ~ z i-4 ~ ~ o ~ H O I 6 Z-Q 'Lyi QiZ~O ~ .. I G. 1~ JLLF I ~ O~ LL'm K~Opm ~ LLLLLLK I 1 1 1 W I ~ . 1 ~= 1 ~ yJ?~p 1 p?~~O I t-~ o>>~m Y O I Z X p I ~ pL LLOCWS I I Z-~ ~ O I - G I~ ~ I i I n V m I LL ~ _ T n U - - * ~ i O I ~t I `/ 1 ~ 0 . I ~ I Q J ~ 1 1 ~ ~ O I - --I ~ ~ Q m 1IY130 335 - T1Y111 321FJ rfl U 1L N r = I r 1 CONSENT TO SUBLEASE The City of Denton, Texas (the "Master Landlord") is the sole landlord under that certain Airport Lease Agreement -Commercial Operator dated September 21, 2004, entered into between the Master Landlord, as landlord, and JVC Real Estate, L.L.C. ("JVC"), as tenant (the "Ground Lease"). The interest of JVC as tenant under Ground Lease was assigned to 4845 Lockheed Associates, Ltd. (the "Tenant") with the approval and consent of Master Landlord. The Ground Lease covers approximately .455 acres of land located at 4845 Lockheed Lane, Denton, Texas, and being more particularly described in the Ground Lease (the "Leased Premises"). The Master Landlord hereby consents to the sublease of a portion of the Leased Premises known as Unit A (the "Subleased Premises"), being depicted on Exhibit "A" attached hereto, by Tenant to JVC Hangars, L.L.C., a Texas limited liability company ("Subtenant") pursuant to that Sublease Agreement dated June 28, 2006, between Tenant and Subtenant (the "Sublease"), on the following terms and conditions: 1. Tenant shall remain fully liable for the performance of each and every term, provision, covenant, duty and obligation of the Tenant under the Ground Lease, including, without limitation, the duty to make any and all payments of rent. This Consent to Sublease shall in no way release Tenant from any of its covenants, agreements, liabilities and duties under the Ground Lease. Nothing herein contained shall be deemed a waiver or release of any of the Master Landlord's rights under the Ground Lease; and 2. Subtenant's use and occupancy of the Subleased Premises shall be subject to all of the terms and conditions of the Ground Lease, and in the event of any conflict between the terms of the Ground Lease and the terms of the Sublease, the terms of the Ground Lease shall control. 3. Subtenant shall pay to the Master Landlord a transfer Fee equal to $250.00 in connection with Master Landlord providing its consent to the sublease. This Consent to Sublease is made in lieu of and shall take the place of that certain Lease Assignment of Commercial Operators Lease at Denton Municipal Airport dated February 23, 2006 wherein Tenant assigned the Ground Lease to Subtenant (the "Assignment"). By execution of this Consent to Sublease below, the parties agree that the Assignment is null and void and that the Ground Lease remains in Tenant as the tenant thereunder. In the event of any conflict between the terms and provisions of the Assignment and this Consent to Sublease, the terms and provisions of [his Consent to Sublease shall control. [Signa[ure pages !o fo11oN~] CONSENT TO SUBLEASE -Page I Attest: Jennifer Walters, City Secretary By: ~ /C~fi L ~~~a'l/ ' Approved as to Legal Form: Edwin M. Snyder, City Attorney By: '~ . CONSENT TO SUBLEASE -Page 2 City of Denton, Texas ACKNOWLEDGED AND AGREED: Tenant: 4548 LOCKHEED ASSOCIATES, LTD., a Texas limited partnership By: LOCKHEED INVESTORS, L.L.C., a Texas limited liability company, General Partner Subtenant: JVC HANGARS, L.L.C., a Tex~s'ti~iiited liability company vann\denton county airport hangar\consent [o sublease-A-2.nf CONSENT TO SUBLEASE -Page 3 EXHIBIT "A" EXHIBIT "A" -Page Solo u V 0 R 3. P rI Q a .c r+ G .6 ro~~ J m a. v •~ m ~ a m 93 .rj sq .C C G/ x ~F u k. 4 a a c 0 0 ~ ~ ,~ ^ G co m -:t qp W O y~ 6 -~ iu ~~~ m~v CONSENT TO SUBLEASE The City of Denton, Texas (the "Master Landlord") is the sole landlord under that certain Airport Lease Agreement -Commercial Operator dated September 21, 2004, entered into between the Master Landlord, as landlord, and JVC Real Estate, L.L.C. ("JVC"), as tenant (the "Ground Lease"). The interest of JVC as tenant under Ground Lease was assigned to 4845 Lockheed Associates, Ltd. (the "Tenant") with the approval and consent of Master Landlord. The Ground Lease covers approximately .455 acres of land located at 4845 Lockheed Lane, Denton, Texas, and being more particularly described in the Ground Lease (the "Leased Premises"). The Master Landlord hereby consents to the sublease of a portion of the Leased Premises known as Unit B (the "Subleased Premises"), being depicted on Exhibit "A" attached hereto, by Tenant to JVC Hangars, L.L.C., a Texas limited liability company ("Subtenant") pursuant to that Sublease Agreement dated June 28, 2006, between Tenant and Subtenant (the "Sublease"), on the following terms and conditions: 1. Tenant shall remain fully liable for the performance of each and every term, provision, covenant, duty and obligation of the Tenant under the Ground Lease, including, without limitation, the duty to make any and all payments of rent. This Consent to Sublease shall in no way release Tenant from any of its covenants, agreements, liabilities and duties under the Ground Lease. Nothing herein contained shall be deemed a waiver or release of any of the Master Landlord's rights under the Ground Lease; and 2. Subtenant's use and occupancy of the Subleased Premises shall be subject to all of the terms and conditions of the Ground Lease, and in the event of any conflict between the terms of the Ground Lease and the terms of the Sublease, the terms of the Ground Lease shall control. 3. Subtenant shall pay to the Master Landlord a transfer fee equal to $250.00 in connection with Master Landlord providing its consent to the sublease. This Consent to Sublease is made in lieu of and shall take the place of that certain Lease Assignment of Commercial Operators Lease at Denton Municipal Airport dated February 23, 2006 wherein Tenant assigned the Ground Lease to Subtenant (the "Assignment"). By execution of this Consent to Sublease below, the parties agree that the Assignment is null and void and that the Ground Lease remains in Tenant as the tenant thereunder. In the event of any conflict between the terms and provisions of the Assignment and this Consent to Sublease, the terms and provisions of this Consent to Sublease shall control. [Signature pages to_follou~] CONSENT TO SUBLEASE -Page I Attest: Jennifer Walters, City Secretary Approved as to Legal Form: Edwin M. Snyder, City Attorn By: CONSENT TO SUBLEASE -Page 2 City of Denton, Texas ACKNOWLEDGED AND AGREED: Tenant: 4548 LOCKHEED ASSOCIATES, LTD., a Texas limited partnership By: LOCKHEED INVESTORS, L.L.C., a Texas limited liability company, General Partner Subtenant: JVC HANGARS, L.L.C., a Tex~imited liability company By: ~~~ vann\denton county airport hangar\consent to sublease-A-2.rtf CONSENT TO SUBLEASE -Page 3 EXHIBIT "A" EXHIBIT "A" -Page Solo u v O 0. ~+ P ,ti p 9} C N G tiC} LQ ^i t`~ ~ ro ~ . v •~ m ~ a m w •,a x t C N ~ ~ F+ u ~ q r7 C C D O u~ i.i ..i ~.t C C ~ v y sctq ~. O ~; ,p .~ R V CONSENT TO SUBLEASE The City of Denton, Texas (the "Master Landlord") is the sole landlord under that certain Airport Lease Agreement -Commercial Operator dated September 21, 2004, entered into between the Master Landlord. as landlord, and JVC Real Estate, L.L.C. ("JVC"), as tenant (the "Ground Lease"). The interest of JVC as tenant under Ground Lease was assigned to 4845 Lockheed Associates, Ltd. (the "Tenant") with the approval and consent of Master Landlord. The Ground Lease covers approximately .455 acres of land located at 4845 Lockheed Lane, Denton, Texas, and being more particularly described in the Ground Lease (the "Leased Premises"). The Master Landlord hereby consents to the sublease of a portion of the Leased Premises known as Unit C (the "Subleased Premises"), being depicted on Exhibit "A" attached hereto, by Tenant to JVC Hangars, L.L.C., a Texas limited liability company ("Subtenant") pursuant to that Sublease Agreement dated June 28, 2006, between Tenant and Subtenant (the "Sublease"), on the following terms and conditions: 1. Tenant shall remain fully liable for the performance of each and every term, provision, covenant, duty and obligation of the Tenant under the Ground Lease, including, without limitation, the duty to make any and all payments of rent. This Consent to Sublease shall in no way release Tenant from any of its covenants, agreements, liabilities and duties under the Ground Lease. Nothing herein contained shall be deemed a waiver or release of any of the Master Landlord's rights under the Ground Lease; and 2. Subtenant's use and occupancy of the Subleased Premises shall be subject to all of the terms and conditions of the Ground Lease, and in the event of any conflict between the terms of the Ground Lease and the terms of the Sublease, the terms of the Ground Lease shall control. 3. Subtenant shall pay to the Master Landlord a transfer fee equal to $250.00 in connection with Master Landlord providing its consent to the sublease. This Consent to Sublease is made in lieu of and shall take the place of that certain Lease Assignment of Commercial Operators Lease at Denton Municipal Airport dated February 23, 2006 wherein Tenant assigned the Ground Lease to Subtenant (the "Assignment"). By execution of this Consent to Sublease below, the parties agree that the Assignment is null and void and that the Ground Lease remains in Tenant as the tenant thereunder. In the event of any conflict between the terms and provisions of the Assignment and this Consent to Sublease, the terms and provisions of this Consent to Sublease shall control. [Signature pages to follow] CONSENT TO SUBLEASE -Page I Attest: Jennifer Walters, City Secretary BY•_~~~l~W /C~GC~~G2'~~K,f//lam GG~ Approved as to Legal Form: Edwin M. Snyder, Citv Attorney By CONSENT TO SUBLEASE -Page 2 City of Denton, Texas ACKNOWLEDGED AND AGREED: Tenant: 4548 LOCKHEED ASSOCIATES, LTD., a Texas limited partnership By: LOCKHEED INVESTORS, L.L.C., a Texas limited liability company, General Partner By. 1!U~.~ 11!~ Jo Vann, Manager Subtenant: JVC HANGARS, L.L.C., a Texas limited liability company By: Manager ~~ vann\denton county airport hangar\conscnt [o sublease-C-2.rlf CONSENT TO SUBLEASE -Page 3 EXHIBIT "A" EXHIBIT "A" -Page Solo k 4 a ~. ~~ m c cv ~~~ ~ro ~, . .~ v 4 N N .~ k .^~ C7 N ?L ~ [- U } O .-a C C O O u1 u u v C C] cp w y J G1Q G'~7 z <t J 6 c ~ ~ ~ d 3 CONSENT TO SUBLEASE The City of Denton, Texas (the "Master Landlord") is the sole landlord under that certain Airport Lease Agreement -Commercial Operator dated September 21, 2004, entered into between the Master Landlord, as landlord, and JVC Real Estate, L.L.C. ("JVC"), as tenant (the "Ground Lease"). The interest of JVC as tenant under Ground Lease was assigned to 4845 Lockheed Associates, Ltd. (the "Tenant") with the approval and consent of Master Landlord. The Ground Lease covers approximately .455 acres of land located at 4845 Lockheed Lane, Denton, Texas, and being more particularly described in the Ground Lease (the "Leased Premises"). The Master Landlord hereby consents to the sublease of a portion of the Leased Premises known as Unit C (the "Subleased Premises"), being depicted on Exhibit "A" attached hereto, by Tenant to Willowbend Development L.L.C., a Texas limited liability company ("Subtenant") pursuant to that Sublease Agreement dated April 1, 2007, between Tenant and Subtenant (the "Sublease"), on the following terms and conditions: 1. Tenant shall remain fully liable for the performance of each and every term, provision, covenant, duty and obligation of the Tenant under the Ground Lease, including, without limitation, the duty to make any and all payments of rent. This Consent to Sublease shall in no way release Tenant from any of its covenants, agreements, liabilities and duties under the Ground Lease. Nothing herein contained shall be deemed a wavier of release of any of the Master Landlord's rights under the Ground Lease; and 2. Subtenant's use and occupancy of the Subleased Premises shall be subject to all of the terms and conditions of the Ground Lease, and in the event of any conflict between the terms of the Ground Lease and the terms of the Sublease, the teens of the Ground Lease shall control. 3. Subtenant shall pay to the Master Landlord a transfer fee equal to $250.00 in connection with Master Landlord providing its consent to the sublease. CITY OF DENTON George C. Campbell, City Man er BY~ L---- ATTEST: JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM: EDWIN M. SNYDER, CITY ATTORNEY BY: WILLOWBEND DEVELOPMENT, L.L.C. A Texas Limited Liability Company Michael Roehrs, Manager BY: ~~ ~i9w,~IG~L, x w a a M ~f pG 4 H i 0. 20/L0 9`JVd Mtl ANI ~OWFSfR! L0 39tld Ntl~tl C N 0 a 1a r ..a p w c er e w W N h ~~ d C ri~N m V ~ V*~ M .C C Q~' ~d 7 6'+ U S O ~ [ e O O M /aN .Y d C (O d V vF~p .Z ' J Q~ M i LL 8Z6L496ZL6 bb :80 L00Z/9L/70 LEEOSELZL6 SE :8L L00Z/SL/b0 SUB-LEASE I. PARTIES 1.1 The parties to this Sub-Lease are: 1.1.1 4845 Lockheed Associates, Ltd., a Texas limited partnership whose address is 1424 Gables Court, Plano, Texas 75075 (Attn: John Vann) ("Lessor"), and 1.1.2 JVC Hangars, L.L.C., whose address for purposes hereof is 1424 Gables Court, Plano, Texas 75075 (Attn: John Vann) ("Lessee") 2. GROUND LEASE; PARTNERSHIP; PREMISES 2.1 Lessor is the Lessee under that certain Airport Lease Agreement-Commercial Operator (the "Ground Lease") dated effective as of September 21, 2004, by and between the City of Denton, Texas, as Lessor, and JVC Real Estate, LLC, as Lessee, as assigned to Lessor, leasing and demising the real property and improvements described in Exhibit A (the "Property") attached hereto and made a part hereof. This Sub-Lease is subject to the provisions of the Ground Lease as it exists or may from time to time be amended. 2.2 This Sub-Lease is executed in connection with Lessee's acquisition of the Class A Limited Partner partnership interest in Lessor. This Sub-Lease is also subject to the provisions of the 4845 Lockheed Associates, Ltd. partnership agreement (the "Partnership Agreement") as it exists or may from time to time be amended. 2.3 The "Premises" means and consists of "Unit A " as defined and described in the Partnership Agreement and as shown on the plat attached hereto as Exhibit B. In the event of conflict between the unit description in the Partnership Agreement and in this Sub-Lease, Exhibit B shall control. The "Premises" also includes the exclusive use of the two L2~ parking spaces numbered A-1 and A-2, inclusive, as shown on Exhibit B. 3. DEMISE; QUIET ENJOYMENT; SUITABILITY 3.1 Lessor hereby LEASES and DEMISES the Premises to Lessee for the remaining term of the Ground Lease (that is, through September 20, 2034) and any renewals or extensions thereof (the "Sub-Lease Term"). TO HAVE AND TO HOLD the same unto Lessee, its successors and assigns for the Sub-Lease Term. And Lessor does hereby bind itself, its successors and assigns to WARRANT and DEFEND for the Sub-Lease Term the Premises unto Lessee, its successors and assigns against the claims of all persons claiming by, through or under Lessor, but not otherwise, and subject, however, to the Ground Lease and Partnership Agreement. 3.2 Upon the condition that Lessee shall timely and fully keep and perform all its covenants and fulfill all conditions imposed thereunder, Lessee shall have and enjoy the peaceable and quiet possession of the Premises for the Sub-Lease Term, subject only to the Ground Lease, the Partnership Agreement, Lessor's right of entry provided in 9.2.4 hereof and the rights of Lessor's mortgagee, if any, under Article 10 hereof relating to subordination of this Sub- Lease to mortgages of the Property. This express covenant of quiet enjoyment is in lieu of and supersedes any implied covenant of quiet enjoyment. 3.3 Lessee aclaiowledges that it has inspected the Premises and has determined that the Premises are suitable for its intended use. Lessee further acknowledges that Lessor has made no representations or warranties concerning the suitability of the Premises or regarding the soundness, quality or condition of the Premises or any component thereof or of the Property. Lessor hereby disclaims any implied warranties regarding the Premises or the Property, including any implied warranties of suitability. -2- 4. RENT 4.1 Beginning February 7, 2006, Lessee shall pay as rent to Lessor at its offices on or before the first day of each month during the Sub-Lease Term an amount equal to 33.33% ("Lessee's Percentage@) of the monthly rent and any other recurring monthly charges due under the Ground Lease for that month Lessor will not charge a premium or a mark-up or profit on it's Master Lease from the City of Denton. 4.2 Lessee shall also pay to Lessor on request as additional expenses, Lessee's Percentage of (a) ad valorem taxes assessed against the Property; (b) any other rents, expenses or other charges payable by Lessor as Lessee under the Ground Lease; (c) any insurance (hazard or liability) maintained by Lessor with respect to the Property; (d) costs incurred and reserves created by Lessor for repair, restoration and maintenance of the Property; and (e) any other cost or expenses for which Lessee as a limited partner of the Lessor is obligated under the Partnership Agreement, including, not exclusively, administrative expenses. Lessor will not charge a premium or a mark up or profit on it's Master Lease from the City of Denton. 4.3 Lessor, at its option may require Lessee to pay each month along with Lessee's Percentage of the Ground Lease rent, an amount equal to one-twelfth (1/12`h) of the annual amount of the additional expenses for which Lessee is obligated under the preceding 4.2 as estimated by Lessor in good faith. If this option in exercised, the amounts paid by Lessee pursuant to the 4.3 shall be held by Lessor in a separate account (with any interest earned thereon accruing to Lessee as its interest may appear) and the account shall be charged from time to time as necessary to pay 4.2 expenses. If there are insufficient funds in the account standing to the credit of Lessee to pay any 4.2 expenses due or to come due, Lessee shall pay the deficit to Lessor on request. -3- 5. USE 5.1 Lessee shall use the Premises only as an aircrafr hanger is ordinarily used, and for other aviation-related purposes as permitted by the Ground Lease Lessor, and for no other purpose. 5.2 Lessee shall at all time strictly abide by all rules and regulations of the Ground Lease lessor, and shall not act or fail to act, or suffer on permit to suffer any act or omission in violation of such rules or regulation or in such a manner as to cause Lessor to be in violation of or suffer any penalty or sanction under the Ground Lease. 5.3 Lessee shall have, in common with the Lessees of Units B and C, the non-exclusive right to use the Property except for those portions set apart for the exclusive use of the Lessees of Units B and C respectively, subject, however, to such rules and regulations as Lessor may in its reasonable discretion establish from time to time, and provided that any such rules and regulations are nondiscriminatory and apply to all Lessees of the Property uniformly. 5.4 Any violation of the Ground Lease or the rules and regulations of the Ground Lease caused or suffered by any employee, licensee or invitee of Lessee shall he deemed to be a violation by the Lessee, regardless of whether Lessee has or exercises any control over the person causing or suffering the violation. 6. IMPROVEMENTS 6.1 Lessee shall make no alterations or improvements to the structural components of Premises or to the Property without Lessor's prior written consent which may be given or withheld in Lessor's arbitrary discretion. Unattached, moveable trade fixtures shall not be considered as improvements, provided that they can be removed without injury either to the Premises or to the fixtures. HV AC equipment, communications antennae and any other device or equipment the installation of which requires penetration of the roof, foundation or exterior walls shall be -4- deemed improvements which require Lessor's consent. 6.2 Upon termination of this Sub-Lease, all structural alterations or improvements shall remain on the Premises and become the property of Lessor unless Lessor requests their removal. If Lessor requests removal Lessee shall remove same within seven days and shall repair to Lessor's satisfaction any penetrations or damage to the Premises caused by the installation, maintenance or removal. 7. MAINTENANCE; REPAIRS 7.1 Lessor shall maintain the roof, foundation and exterior walls of the hanger building and all other portions of the Property other than those required to be maintained by any unit Lessee in good condition and working order. 7.2 Lessee shall maintain in good condition and working order the following: 7.2.1 aircraft ingress/egress door and all other exterior doors providing access to the Premises and all exterior windows (including glass replacement); 7.2.2 all lighting and electrical fixtures affixed to that part of the hanger building enclosing Lessee's unit; 7.2.3 any fixtures attached to or improvements contained in the Premises or installed by Lessee; 7.2.4 all HVAC equipment, plumbing, conduits, pipes or wires providing service to the Premises to the extent that same are located in, above, below or adjacent to the Premises; 7.2.5 those portions of the Property set apart for Lessee's exclusive use; and 7.2.6 Lessee's portion of the interior demising wall(s). 7.3 In the event of fire or other casualty to the Property, Lessor will repair or replace those parts -5- of the Property which it is obligated to maintain and Lessee will repair or replace those parts which is obligated to maintain. There shall be no abatement of rent as a result of any fire or other casualty to the Property or Premises. Each party shall commence its work promptly and diligently prosecute same to completion. Lessor shall have and there is hereby created in its favor a security interest in any insurance proceeds which may become payable to Lessee as a result of any casualty to the Premises, to secure Lessor in Lessee's performance of its obligations to repair or replace. Lessor is appointed as Lessee's agent and attorney-in-fact to submit proofs of loss, adjust claims and to receive insurance proceeds. Any such proceeds shall be held by Lessor and applied to the cost of repair or restoration. 8. INSURANCE; SUBROGATION WAIVER; INDEMNITY 8.1 Lessor and Lessee shall each maintain all-risks insurance in amounts sufficient to provide 100% of replacement cost for those portions of the Property which each is respectively obligated to maintain and repair. Lessor's and Lessee's deductible shall not exceed $5,000, and each party and such parties as is required by Article XII of the Ground Lease, shall be named as an additional insured on the other's casualty loss and liability policies. Liability coverage shall be not less than the amount and type of coverage required under Article XII of the Ground Lease for the lessee thereunder. If Lessee, Lessor and Lessor's insurance carrier agree, in lieu of Lessee obtaining separate insurance for the casualty loss or liability protection, Lessee shall be named as an additional insured on Lessor's policy. In such event: 8.1.1 Lessee shall pay directly or reimburse Lessor for Lessee's percentage of the premiums on request; 8.1.2 Lessee shall pay in connection with any loss or claim Lessee's percentage or any deductible or retention; -6- 8.1.3 In the case of a casualty loss policy proceeds shall be allocated first to the costs in excess of Lessor's portion of the deductible for repair or replacement of the portions of the Property which Lessor is obligated to maintain, and then to Lessee's repair or replacement cost in excess of Lessee's percentage of the deductible, with any surplus being allocated as provided in 8.1.2 with reference to deductible; 8.1.4 Lessee shall maintain separate casualty insurance for the Premises contents not covered by the joint policy and its own liability coverage for claims; and 8.1.5 Nothing in 8.1.1 - 8.1.4 shall affect the subrogation waiver in 8.2 or the claim waiver and indemnity provided in 8.3 not within the scope of coverage provided by the joint policy. 8.2 Lessor and Lessee on behalf of themselves and their respective insurance carriers each waive in favor of the other any claims for damages or reimbursement for or on account of any loss to the extent of insurance coverage required hereunder and also to the extent of any deductible and any excess or umbrella coverage. 8.3 LESSEE WAIVES ANY CLAIM NOW OR LATER ARISING AGAINST LESSOR, LESSOR'S GENERAL PARTNER, ANY MANAGER OR MEMBER OF THE GENERAL PARTNER AND ANY AGENT OR EMPLOYEE OF THEM FOR ANY LOSS OR DAMAGES, INCLUDING INCIDENTAL AND CONSEQUENTIAL DAMAGES SUFFERED OR INCURRED BY LESSEE AS A RESULT OF ANY ACT OR OMISSION BY ANY THIRD PARTY (THE "WAIVED CLAIMS") AND AGREES TO INDEMNIFY LESSOR, LESSOR'S GENERAL PARTNER, ANY MANAGER OR MEMBER OF THE GENERAL PARTNER AND ANY AGENT OR EMPLOYEE OF ANY OTHER THEM FOR ANY LOSS, DAMAGE OR LIABILITY 7- (INCLUDING COSTS OF DEFENSE AND AMOUNTS PAID IN GOOD FAITH IN SETTLEMENT) INCURRED BY REASON OF ANY CLAIM MADE BY LESSEE, ANY MEMBER, PARTNER, OFFICER, DIRECTOR, EMPLOYEE, AGENT, LICENSEE OR INVITEE OF LESSEE BASED IN WHOLE OR IN PART ON ANY OF THE WAIVED CLAIMS. 9. DEFAULT: REMEDIES 9.1 Lessor's Default; Remedies. 9.1.1 If Lessor shall fail to pay any rents or other amounts when due under the Ground Lease or if Lessor shall fail to perform any other covenant under the Ground Lease, Lessee may pay the amount due or perform Lessor's obligation. The amounts so expended by Lessee shall be paid to Lessee by Lessor on demand, and maybe set- off by Lessee against any amounts next coming due Lessor under this Sub-Lease until the entire amount is reimbursed. 9.1.2 If Lessor shall default in the performance of any obligation under this Sub-Lease, Lessee shall have the right to perform Lessor's obligation. The amounts so expended by Lessee shall be reimbursable on demand, and may be set-off by Lessee against any amounts next coming due Lessor under this Sub-Lease until the entire amount is reimbursed. 9.1.3 The right to cure and to receive reimbursement shall be Lessee's sole remedies in the event of Lessor's breach. 9.2 Lessee's Default; Remedies. 9.2.1 If Lessee shall default in the payment of rent and such default shall continue for more than five (5) business days after written notice to Lessee, or if Lessee shall -8- default in the payment of any other amount owing to the Lessor hereunder and such default shall continue for more than ten (10) business days after written demand is made upon Lessee, then and in either event, Lessor may exclude Lessee and any sub-tenant or licensee from the Premises and may continue to so exclude Lessee (or its subtenant or licensee) from the Premises pursuant to and in accordance with the provisions of the Texas Property Code applicable in such cases to commercial tenancies. If Lessee shall fail to pay all amounts due and owing by 5:00 p.m. on the second business day following exclusion of Lessee from the Premises, then Lessor shall have the right, without further notice or demand, to terminate this Sub-Lease and to recover possession of the Premises throughjudicial process. 9.2.2 It Lessee shall fail to keep or perform any covenant or obligation imposed under Article 5 hereof Lessor shall have the right exercisable without notice or demand to cure the breach or default of Lessee's behalf. Any amounts so expended by Lessor shall become indebtedness due and owing on demand, and if not paid within the grace period under 9.2.1, Lessor shall have the rights and remedies provided in 9.2.1. If a breach of this Sub-Lease by Lessee in Lessor's judgment creates a risk of default under the Ground Lease then Lessor shall in addition to all other rights and remedies be entitled to immediate, ex parse injunctive relief and in any such proceeding, the existence of irreparable harm and the absence of adequate remedy at law shall be conclusively presumed. 9.2.3 Lessor may bring an action in debt to recover amounts due and owing by Lessee at any time without prejudice to the rights and remedies provided in 9.2.1, such remedies being cumulative and exercisable concurrently or consecutively. -9- 9.2.4 Lessor shall have the right, without notice or demand to enter the Premises to inspect same or in the exercise of its rights and remedies under 9.2.1 or 9.2.2. In its exercise of rights under this 9.2.4 or under 9.2.1 Lessor (its general partner, any member of its general partner and any of its or their agents or employees) shall not be liable for trespass or conversion of either the Premises or personal property contained therein, and shall not be liable for incidental, consequential or penal damages for breach of this Sub-Lease or on account of any act or omission in the exercise of rights hereunder or provided by law. 10. MORTGAGES; ALIENATION 10.1 By Lessor. Lessee agrees that this Sub-Lease is and shall remain subordinate to any existing or future mortgage of the Property by Lessor provided that Lessee and any mortgagee shall have entered into anon-disturbance and attornment agreement. The execution of such agreement is a condition precedent to the effectiveness of this Sub-Lease. 10.2 By Lessee. Lessee shall not transfer or encumber its interest in the Premises without Lessor's prior written consent which consent shall not be unreasonably withheld. Any absolute transfer shall be subject to the provisions of the Partnership Agreement imposing restrictions on transfer of partnership interests. Lessor's consent to an encumbrance shall not be unreasonably withheld. Lessor's consent may be conditioned upon receipt of a written undertaking from Lessee's mortgagee to provide Lessor with a copy of any notice of delinquency, default, intent to accelerate or acceleration of the mortgage debt. Lessor's consent to the mortgage includes its consent to foreclosure thereof in the event to Lessee's default. A mortgagee, trustee or receiver in possession of the Premises shall keep and perform all of Lessee's obligations hereunder and shall be subject to all the provisions of this Sub-Lease. The mortgagee or other purchaser at -lo- foreclosure shall take its interest subject to this Sub-Lease and shall upon acquisition of Lessee's interest keep and perform all of Lessee's obligations thereunder. If at the time of foreclosure Lessee is in default in the payment of any obligation hereunder, the mortgagee or other purchaser at foreclosure shall have until the last business day of the month in which the foreclosure occurs to cure such default. Any subsequent transfer of this Sub-Lease by Lessee's mortgagee or purchaser at foreclosure shall be subject to and on the same terms as the provisions of the Partnership Agreement relating to transfer of interests in Lessor. 10.3 Estoppel Letters. Lessor and Lessee shall on request by either or by any mortgagee or prospective mortgagee orinterest-transferee or either, furnish an Estoppel letter confirming that the Ground Lease and this Sub-Lease is in force according to its terms (if that is in fact the case) and stating whether, to the current, actual knowledge of the party providing the letter, there exists any event of default or condition which with the passage of time, the giving of notice or both, would constitute an event of default on the part of the other party. If the letter is not provided within 10 days after receipt of a written request, then the requesting person may conclusively presume that the Ground Lease and this Sub-Lease are in effect according to their teens, that the Lessor or Lessee as the case may be is not in default and that no potential default exists. 11. NOTICES 11.1 All notices by or to a party shall be in writing and shall be deemed received when actually received if delivered by commercial courier, or in the case of mail, on the next delivery day after deposit of the notice in the custody of the U.S. Postal Service in afirst-class, certified mail, return receipt requested, postage pre-paid envelope correctly addressed to the recipient at the addresses stated in 1.1 hereof or such other address as either may designate by Notice in accordance herewith. _~z_ EXECUTED to be effective February 7, 2006. 4845 LOCKHEED ASSOCIATES, LTD., a Texas limited partnership By: LOCKHEED INVESTORS, L.L.C a~exas limited liability company, ral Partner By: V, JVC HANGARS, L.L.C., a T~ limited liability company Vann, vane\denton county airport hangarlsublease-Lrtf e:ar~o~^~ BRANDI HEITZMAN =" Notary Public, State of Tezas 3;.~' My Commission Expires ':'~"~~~` May 12, 2008 4~ ~in.~~ ~~ -13- r i .~_~ i O 1IY 13C a S - T~YT 3b'N I ~ -- IL ~ O T 1 i I I i I I I I I I ~I I O I I ~ I I I` m l ~_;~ A I I U z [-Vi I I u 0 Y o ~ W 1° I I ~ G Z-d ~ ttL v I 4 f~ 4' ^ i ~O O_ ~ Y I W Q N ~OUa Oj~ttw I C ~C ~J .-+!~ c~OOW 1 .~ N LLttWK I G I d '~ N I C1 V tD I d .ti N t C y I O I Y o F ~ I u E O I I C ..] c c ^~ I O C /1 .~ ., I d C C I ~ W y I I voo I Qi I J I ° I p I ~ I v ~ m R z i-fl i ~ ~ l b I I-, O .. I I s w ~r I K Z-fl ! 4 ~ ~ o°=~o I ~ I x ~ I z~00W ttrc~~K i I i (~ I I W ~ ~ I I ~ I 1 ,.. uJ?r0 Oox~rc I I I X p r~CCu 1LIY U.Y I I I I I ~ a ml j -T =1 I nI U i O e I i I I I I I 1 ~ 0 J I I _ Q ~ O I ~ I ~ ~ ~ I --I ~ Q ~( m '.IY 130 335 - TYT 3b!d ~ ifll U C LLLLl1 N I ~I I SUB-LEASE 1. PARTIES 1.1 The parties to this Sub-Lease are: 1.1.1 4845 Lockheed Associates, Ltd., a Texas limited partnership whose address is 1424 Gables Court, Plano, Texas 75075 (Attn: John Vann) ("Lessor"), and 1.1.2 JVC Hangars, L.L.C., whose address for purposes hereof is 1424 Gables Court, Plano, Texas 75075 (Attn: John Vann) ("Lessee") 2. GROUND LEASE; PARTNERSHIP; PREMISES 2.1 Lessor is the Lessee under that certain Airport Lease Agreement-Commercial Operator (the "Ground Lease") dated effective as of September 21, 2004, by and between the City of Denton, Texas, as Lessor, and JVC Real Estate, LLC, as Lessee, as assigned to Lessor, leasing and demising the real property and improvements described in Exhibit A (the "Property") attached hereto and made a part hereof. This Sub-Lease is subject to the provisions of the Ground Lease as it exists or may from time to time be amended. 2.2 This Sub-Lease is executed in connection with Lessee's acquisition of the Class B Limited Partner partnership interest in Lessor. This Sub-Lease is also subject to the provisions of the 4845 Lockheed Associates, Ltd. partnership agreement (the "Partnership Agreement") as it exists or may from time to time be amended. 2.3 The "Premises" means and consists of "Unit B " as defined and described in the Partnership Agreement and as shown on the plat attached hereto as Exhibit B. In the event of conflict between the unit description in the Partnership Agreement and in this Sub-Lease, Exhibit B shall control. The "Premises" also includes the exclusive use of the two L2~ parking spaces numbered B-land B-2, inclusive, as shown on Exhibit B. 3. DEMISE; QUIET ENJOYMENT; SUITABILITY 3.1 Lessor hereby LEASES and DEMISES the Premises to Lessee for the remaining term of the Ground Lease (that is, through September 20, 2034) and any renewals or extensions thereof (the "Sub-Lease Term"). TO HAVE AND TO HOLD the same unto Lessee, its successors and assigns for the Sub-Lease Term. And Lessor does hereby bind itself, its successors and assigns to WARRANT and DEFEND for the Sub-Lease Term the Premises unto Lessee, its successors and assigns against the claims of all persons claiming by, through or under Lessor, but not otherwise, and subject, however, to the Ground Lease and Partnership Agreement. 3.2 Upon the condition that Lessee shall timely and fully keep and perform all its covenants and fulfill all conditions imposed thereunder, Lessee shall have and enjoy the peaceable and quiet possession of the Premises for the Sub-Lease Term, subject only to the Ground Lease, the Partnership Agreement, Lessor's right of entry provided in 9.2.4 hereof and the rights of Lessor's mortgagee, if any, under Article 10 hereof relating to subordination of this Sub- Lease to mortgages of the Property. This express covenant of quiet enjoyment is in lieu of and supercedes any implied covenant of quiet enjoyment. 3.3 Lessee acknowledges that it has inspected the Premises and has determined that the Premises are suitable for its intended use. Lessee further acknowledges that Lessor has made no representations or warranties concerning the suitability of the Premises or regarding the soundness, quality or condition of the Premises or any component thereof or of the Property. Lessor hereby disclaims any implied warranties regarding the Premises or the Property, including any implied warranties of suitability. -2- 4. RENT 4.1 Beginning February 7, 2006, Lessee shall pay as rent to Lessor at its offices on or before the first day of each month during the Sub-Lease Term an amount equal to 33.33% ("Lessee's Percentage@) of the monthly rent and any other recurring monthly charges due under the Ground Lease for that month Lessor will not charge a premium or a mark-up or profit on it's Master Lease from the City of Denton. 4.2 Lessee shall also pay to Lessor on request as additional expenses, Lessee's Percentage of (a) ad valorem taxes assessed against the Property; (b) any other rents, expenses or other charges payable by Lessor as Lessee under the Ground Lease; (c) any insurance (hazard or liability) maintained by Lessor with respect to the Property; (d) costs incurred and reserves created by Lessor for repair, restoration and maintenance of the Property; and (e) any other cost or expenses for which Lessee as a limited partner of the Lessor is obligated under the Partnership Agreement, including, not exclusively, administrative expenses. Lessor will not charge a premium or a mark up or profit on it's Master Lease from the City of Denton. 4.3 Lessor, at its option may require Lessee to pay each month along with Lessee's Percentage of the Ground Lease rent, an amount equal to one-twelfth (1/12`h) of the annual amount of the additional expenses for which Lessee is obligated under the preceding 4.2 as estimated by Lessor in good faith. If this option in exercised, the amounts paid by Lessee pursuant to the 4.3 shall be held by Lessor in a separate account (with any interest earned thereon accruing to Lessee as its interest may appear) and the account shall be charged from time to time as necessary to pay 4.2 expenses. If there are insufficient funds in the account standing to the credit of Lessee to pay any 4.2 expenses due or to come due, Lessee shall pay the deficit to Lessor on request. -3- 5. USE 5.1 Lessee shall use the Premises only as an aircraft hanger is ordinarily used, and for other aviation-related purposes as permitted by the Ground Lease Lessor, and for no other purpose. 5.2 Lessee shall at all time strictly abide by all rules and regulations of the Ground Lease lessor, and shall not act or fail to act, or suffer on permit to suffer any act or omission in violation of such rules or regulation or in such a manner as to cause Lessor to be in violation of or suffer any penalty or sanction under the Ground Lease. 5.3 Lessee shall have, in common with the Lessees of Units A and C, the non-exclusive right to use the Property except for those portions set apart for the exclusive use of the Lessees of Units A and C respectively, subject, however, to such rules and regulations as Lessor may in its reasonable discretion establish from time to time, and provided that any such rules and regulations are nondiscriminatory and apply to all Lessees of the Property uniformly. 5.4 Any violation of the Ground Lease or the rules and regulations of the Ground Lease caused or suffered by any employee, licensee or invitee of Lessee shall he deemed to be a violation by the Lessee, regardless of whether Lessee has or exercises any control over the person causing or suffering the violation. 6. IMPROVEMENTS 6.1 Lessee shall make no alterations or improvements to the structural components of Premises or to the Property without Lessor's prior written consent which maybe given or withheld in Lessor's arbitrary discretion. Unattached, moveable trade fixtures shall not be considered as improvements, provided that they can be removed without injury either to the Premises or to the fixtures. HVAC equipment, communications antennae and any other device or equipment the installation of which requires penetration of the roof, foundation or exterior walls shall be -4- deemed improvements which require Lessor's consent. 6.2 Upon termination of this Sub-Lease, all structural alterations or improvements shall remain on the Premises and become the property of Lessor unless Lessor requests their removal. If Lessor requests removal Lessee shall remove same within seven days and shall repair to Lessor's satisfaction any penetrations or damage to the Premises caused by the installation, maintenance or removal. 7. MAINTENANCE; REPAIRS 7.1 Lessor shall maintain the roof, foundation and exterior walls of the hanger building and all other portions of the Property other than those required to be maintained by any unit Lessee in good condition and working order. 7.2 Lessee shall maintain in good condition and working order the following: 7.2.1 aircraft ingress/egress door and all other exterior doors providing access to the Premises and all exterior windows (including glass replacement); 7.2.2 all lighting and electrical fixtures affixed to that part of the hanger building enclosing Lessee's unit; 7.2.3 any fixtures attached to or improvements contained in the Premises or installed by Lessee; 7.2.4 all HVAC equipment, plumbing, conduits, pipes or wires providing service to the Premises to the extent that same are located in, above, below or adjacent to the Premises; 7.2.5 those portions of the Property set apart for Lessee's exclusive use; and 7.2.6 Lessee's portion of the interior demising wall(s). 7.3 In the event of fire or other casualty to the Property, Lessor will repair or replace those parts -5- ofthe Property which it is obligated to maintain and Lessee will repair or replace those parts which is obligated to maintain. There shall be no abatement of rent as a result of any fire or other casualty to the Property or Premises. Each party shall commence its work promptly and diligently prosecute same to completion. Lessor shall have and there is hereby created in its favor a security interest in any insurance proceeds which may become payable to Lessee as a result of any casualty to the Premises, to secure Lessor in Lessee's performance of its obligations to repair or replace. Lessor is appointed as Lessee's agent and attorney-in-fact to submit proofs of loss, adjust claims and to receive insurance proceeds. Any such proceeds shall be held by Lessor and applied to the cost of repair or restoration. 8. INSURANCE; SUBROGATION WAIVER; INDEMNITY 8.1 Lessor and Lessee shall each maintain all-risks insurance in amounts sufficient to provide 100% of replacement cost for those portions of the Property which each is respectively obligated to maintain and repair. Lessor's and Lessee's deductible shall not exceed $5,000, and each party and such parties as is required by Article XII of the Ground Lease, shall be named as an additional insured on the other's casualty loss and liability policies. Liability coverage shall be not less than the amount and type of coverage required under Article XII of the Ground Lease for the lessee thereunder. If Lessee, Lessor and Lessor's insurance carrier agree, in lieu of Lessee obtaining separate insurance for the casualty loss or liability protection, Lessee shall be named as an additional insured on Lessor's policy. In such event: 8.1.1 Lessee shall pay directly or reimburse Lessor for Lessee's percentage of the premiums on request; 8.1.2 Lessee shall pay in connection with any loss or claim Lessee's percentage or any deductible or retention; -6- 8.1.3 In the case of a casualty loss policy proceeds shall be allocated first to the costs in excess of Lessor's portion of the deductible for repair or replacement of the portions of the Property which Lessor is obligated to maintain, and then to Lessee's repair or replacement cost in excess of Lessee's percentage of the deductible, with any surplus being allocated as provided in 8.1.2 with reference to deductible; 8.1.4 Lessee shall maintain separate casualty insurance for the Premises contents not covered by the joint policy and its own liability coverage for claims; and 8.1.5 Nothing in 8.1.1 - 8.1.4 shall affect the subrogation waiver in 8.2 or the claim waiver and indemnity provided in 8.3 not within the scope of coverage provided by the joint policy. 8.2 Lessor and Lessee on behalf of themselves and their respective insurance carriers each waive in favor of the other any claims for damages or reimbursement for or on account of any loss to the extent of insurance coverage required hereunder and also to the extent of any deductible and any excess or umbrella coverage. 8.3 LESSEE WAIVES ANY CLAIM NOW OR LATER ARISING AGAINST LESSOR, LESSOR'S GENERAL PARTNER, ANY MANAGER OR MEMBER OF THE GENERAL PARTNER AND ANY AGENT OR EMPLOYEE OF THEM FOR ANY LOSS OR DAMAGES, INCLUDING INCIDENTAL AND CONSEQUENTIAL DAMAGES SUFFERED OR INCURRED BY LESSEE AS A RESULT OF ANY ACT OR OMISSION BY ANY THIRD PARTY (THE "WAIVED CLAIMS") AND AGREES TO INDEMNIFY LESSOR, LESSOR'S GENERAL PARTNER, ANY MANAGER OR MEMBER OF THE GENERAL PARTNER AND ANY AGENT OR EMPLOYEE OF ANY OTHER THEM FOR ANY LOSS, DAMAGE OR LIABILITY -7- (INCLUDING COSTS OF DEFENSE AND AMOUNTS PAID IN GOOD FAITH IN SETTLEMENT) INCURRED BY REASON OF ANY CLAIM MADE BY LESSEE, ANY MEMBER, PARTNER, OFFICER, DIRECTOR, EMPLOYEE, AGENT, LICENSEE OR INVITEE OF LESSEE BASED IN WHOLE OR IN PART ON ANY OF THE WAIVED CLAIMS. 9. DEFAULT; REMEDIES 9.1 Lessor's Default; Remedies. 9.1.1 If Lessor shall fail to pay any rents or other amounts when due under the Ground Lease or if Lessor shall fail to perform any other covenant under the Ground Lease, Lessee may pay the amount due or perform Lessor's obligation. The amounts so expended by Lessee shall be paid to Lessee by Lessor on demand, and may be set- off by Lessee against any amounts next coming due Lessor under this Sub-Lease until the entire amount is reimbursed. 9.1.2 If Lessor shall default in the performance of any obligation under this Sub-Lease, Lessee shall have the right to perform Lessor's obligation. The amounts so expended by Lessee shall be reimbursable on demand, and may be set-off by Lessee against any amounts next coming due Lessor under this Sub-Lease until the entire amount is reimbursed. 9.1.3 The right to cure and to receive reimbursement shall be Lessee's sole remedies in the event of Lessor's breach. 9.2 Lessee's Default; Remedies. 9.2.1 If Lessee shall default in the payment of rent and such default shall continue for more than five (5) business days after written notice to Lessee, or if Lessee shall -8- default in the payment of any other amount owing to the Lessor hereunder and such default shall continue for more than ten (10) business days after written demand is made upon Lessee, then and in either event, Lessor may exclude Lessee and any sub-tenant or licensee from the Premises and may continue to so exclude Lessee (or its subtenant or licensee) from the Premises pursuant to and in accordance with the provisions of the Texas Property Code applicable in such cases to commercial tenancies. If Lessee shall fail to pay all amounts due and owing by 5:00 p.m. on the second business day following exclusion ofLessee from the Premises, then Lessor shall have the right, without further notice or demand, to terminate this Sub-Lease and to recover possession of the Premises through judicial process. 9.2.2 It Lessee shall fail to keep or perform any covenant or obligation imposed under Article 5 hereof Lessor shall have the right exercisable without notice or demand to cure the breach or default of Lessee's behalf. Any amounts so expended by Lessor shall become indebtedness due and owing on demand, and if not paid within the grace period under 9.2.1, Lessor shall have the rights and remedies provided in 9.2.1. If a breach of this Sub-Lease by Lessee in Lessor's judgment creates a risk of default under the Ground Lease then Lessor shall in addition to all other rights and remedies be entitled to immediate, ex parte injunctive relief and in any such proceeding, the existence of irreparable harm and the absence of adequate remedy at law shall be conclusively presumed. 9.2.3 Lessor may bring an action in debt to recover amounts due and owing by Lessee at any time without prejudice to the rights and remedies provided in 9.2.1, such remedies being cumulative and exercisable concurrently or consecutively. -9- 9.2.4 Lessor shall have the right, without notice or demand to enter the Premises to inspect same or in the exercise of its rights and remedies under 9.2.1 or 9.2.2. In its exercise of rights under this 9.2.4 or under 9.2.1 Lessor (its general partner, any member of its general partner and any of its or their agents or employees) shall not be liable for trespass or conversion of either the Premises or personal property contained therein, and shall not be liable for incidental, consequential or penal damages for breach of this Sub-Lease or on account of any act or omission in the exercise of rights hereunder or provided by law. 10. MORTGAGES; ALIENATION 10.1 By Lessor. Lessee agrees that this Sub-Lease is and shall remain subordinate to any existing or future mortgage of the Property by Lessor provided that Lessee and any mortgagee shall have entered into anon-disturbance and attornment agreement. The execution of such agreement is a condition precedent to the effectiveness of this Sub-Lease. 10.2 By Lessee. Lessee shall not transfer or encumber its interest in the Premises without Lessor's prior written consent which consent shall not be unreasonably withheld. Any absolute transfer shall be subject to the provisions of the Partnership Agreement imposing restrictions on transfer of partnership interests. Lessor's consent to an encumbrance shall not be unreasonably withheld. Lessor's consent may be conditioned upon receipt of a written undertaking from Lessee's mortgagee to provide Lessor with a copy of any notice of delinquency, default, intent to accelerate or acceleration of the mortgage debt. Lessor s consent to the mortgage includes its consent to foreclosure thereof in the event to Lessee's default. A mortgagee, trustee or receiver in possession of the Premises shall keep and perform all of Lessee's obligations hereunder and shall be subject to all the provisions of this Sub-Lease. The mortgagee or other purchaser at -10- foreclosure shall take its interest subject to this Sub-Lease and shall upon acquisition of Lessee's interest keep and perform all of Lessee's obligations thereunder. If at the time of foreclosure Lessee is in default in the payment of any obligation hereunder, the mortgagee or other purchaser at foreclosure shall have until the last business day of the month in which the foreclosure occurs to cure such default. Any subsequent transfer of this Sub-Lease by Lessee's mortgagee or purchaser at foreclosure shall be subject to and on the same terms as the provisions of the Partnership Agreement relating to transfer of interests in Lessor. 10.3 Estoppel Letters. Lessor and Lessee shall on request by either or by any mortgagee or prospective mortgagee orinterest-transferee or either, furnish an Estoppel letter confirming that the Ground Lease and this Sub-Lease is in force according to its terms (if that is in fact the case) and stating whether, to the current, actual knowledge of the party providing the letter, there exists any event of default or condition which with the passage of time, the giving of notice or both, would constitute an event of default on the part of the other party. If the letter is not provided within 10 days after receipt of a written request, then the requesting person may conclusively presume that the Ground Lease and this Sub-Lease are in effect according to their terms, that the Lessor or Lessee as the case may be is not in default and that no potential default exists. 11. NOTICES 11.1 All notices by or to a party shall be in writing and shall be deemed received when actually received if delivered by commercial courier, or in the case of mail, on the next delivery day after deposit of the notice in the custody of the U.S. Postal Service in afirst-class, certified mail, return receipt requested, postage pre-paid envelope correctly addressed to the recipient at the addresses stated in 1.1 hereof or such other address as either may designate by Notice in accordance herewith. _~Z_ EXECUTED to be effective February 7, 2006. 4845 LOCKHEED ASSOCIATES, LTD., a Texas limited partnership By: LOCKHEED INVESTORS, L.L.C., a Texas limited liability company, Ga[1era1 Partner By: Vann, NGARS, L.L.C., limited liability company By: Vann, vann\demon county airport hangar\sublease-Lrtf >e~~"`1pe%y BRANDi HFITZMAN •' ` r Notary Pu61ic, State of Taxas _,~ ; My Commission Expires ' "%\N~` May 12, 2008 -13- V Z Y Q ~. R U z Y z X Z i .i_~ o ,IY_3o »s - ~Ym anti 0 ~r r -d i Z O z-n O O n l-fl O I W ~ YL Z-fl i ? I uJrFa L` Q LL 1 ~ ; tt pj~ttn ¢~Opw 1l,R ILK 4~. KL a: u J?~p O~i~pa' l-J _ o ~ Oj71'N p e~Jpu 1LIY SLY ~1 Z-J I I 7 ~ T ~ ~ I U p O LT m '.IY L3O 335 - T;vT 3n!d CI '---- I I ~ '. I I I ~I 1 I I 1 I I of 1 m 1 . ~ - 1 I u y u I O I C I 4 I r C I W 2 N I C ~p N .~ 1~ 1 a m I I c I b .' N I v u as d .i k t C d I Y o F I U E 1 - O 1 .-1 C C 1 O C I vl ~ ~+ I d C C 1 m v y 1 ~ o 0 1 I Q I J 1 0 a I I I m 7 1 I 1 wl o I I I 1 I I I I I j I I 1 I _ I 1 1 I I I I I z OI I Q ~ I I LL I 1 m I l I -T - I I ~~ I O e I 1 I 1 R v I I I z a . I I ~ I Q J ~ 1 --1 ~ Q I I ~ ~ SUB-LEASE 1. PARTIES 1.1 The parties to this Sub-Lease are: 1.1.1 4845 Lockheed Associates, Ltd., a Texas limited partnership whose address is 1424 Gables Court, Plano, Texas 75075 (Attn: John Vann) ("Lessor"), and 1.1.2 JVC Hangars, L.L.C., whose address for purposes hereof is 1424 Gables Court, Plano, Texas 75075 (Attn: John Vann) ("Lessee") 2. GROUND LEASE; PARTNERSHIP; PREMISES 2.1 Lessor is the Lessee under that certain Airport Lease Agreement-Commercial Operator (the "Ground Lease") dated effective as of September 21, 2004, by and between the City of Denton, Texas, as Lessor, and JVC Real Estate, LLC, as Lessee, as assigned to Lessor, leasing and demising the real property and improvements described in Exhibit A (the "Property") attached hereto and made a part hereof. This Sub-Lease is subject to the provisions of the Ground Lease as it exists or may from time to time be amended. 2.2 This Sub-Lease is executed in connection with Lessee's acquisition of the Class C Limited Partner partnership interest in Lessor. This Sub-Lease is also subject to the provisions ofthe 4845 Lockheed Associates, Ltd. partnership agreement (the "Partnership Agreement") as it exists or may from time to time be amended. 2.3 The "Premises" means and consists of "Unit C " as defined and described in the Partnership Agreement and as shown on the plat attached hereto as Exhibit B. In the event of conflict between the unit description in the Partnership Agreement and in this Sub-Lease, Exhibit B shall control. The "Premises" also includes the exclusive use of the two L2~ parking spaces numbered C-land C-2, inclusive, as shown on Exhibit B. 3. DEMISE; QUIET ENJOYMENT; SUITABILITY 3.1 Lessor hereby LEASES and DEMISES the Premises to Lessee for the remaining term of the Ground Lease (that is, through September 20, 2034) and any renewals or extensions thereof (the "Sub-Lease Term"). TO HAVE AND TO HOLD the same unto Lessee, its successors and assigns for the Sub-Lease Term. And Lessor does hereby bind itself, its successors and assigns to WARRANT and DEFEND for the Sub-Lease Term the Premises unto Lessee, its successors and assigns against the claims of all persons claiming by, through or under Lessor, but not otherwise, and subject, however, to the Ground Lease and Partnership Agreement. 3.2 Upon the condition that Lessee shall timely and fully keep and perform all its covenants and fulfill all conditions imposed thereunder, Lessee shall have and enjoy the peaceable and quiet possession of the Premises for the Sub-Lease Term, subject only to the Ground Lease, the Partnership Agreement, Lessor's right of entry provided in 9.2.4 hereof and the rights of Lessor's mortgagee, if any, under Article 10 hereof relating to subordination of this Sub- Lease to mortgages of the Property. This express covenant of quiet enjoyment is in lieu of and supercedes any implied covenant of quiet enjoyment. 3.3 Lessee acknowledges that it has inspected the Premises and has determined that the Premises aze suitable for its intended use. Lessee further acknowledges that Lessor has made no representations or warranties concerning the suitability of the Premises or regarding the soundness, quality or condition of the Premises or any component thereof or ofthe Property. Lessor hereby disclaims any implied warranties regarding the Premises or the Property, including any implied warranties of suitability. -2- 4. RENT 4.1 Beginning February 7, 2006, Lessee shall pay as rent to Lessor at its offices on or before the first day of each month during the Sub-Lease Term an amount equal to 33.33% ("Lessee's Percentage@) of the monthly rent and any other recurring monthly charges due under the Ground Lease for that month Lessor will not charge a premium or a mark-up or profit on it's Master Lease from the City of Denton. 4.2 Lessee shall also pay to Lessor on request as additional expenses, Lessee's Percentage of (a) ad valorem taxes assessed against the Property; (b) any other rents, expenses or other charges payable by Lessor as Lessee under the Ground Lease; (c) any insurance (hazard or liability) maintained by Lessor with respect to the Property; (d) costs incurred and reserves created by Lessor for repair, restoration and maintenance of the Property; and (e) any other cost or expenses for which Lessee as a limited partner of the Lessor is obligated under the Partnership Agreement, including, not exclusively, administrative expenses. Lessor will not charge a premium or a mark up or profit on it's Master Lease from the City of Denton. 4.3 Lessor, at its option may require Lessee to pay each month along with Lessee's Percentage of the Ground Lease rent, an amount equal to one-twelfth (1 /12`h) of the annual amount of the additional expenses for which Lessee is obligated under the preceding 4.2 as estimated by Lessor in good faith. If this option in exercised, the amounts paid by Lessee pursuant to the 4.3 shall be held by Lessor in a separate account (with any interest earned thereon accruing to Lessee as its interest may appear) and the account shall be charged from time to time as necessary to pay 4.2 expenses. If there are insufficient funds in the account standing to the credit of Lessee to pay any 4.2 expenses due or to come due, Lessee shall pay the deficit to Lessor on request. -j- 5. USE 5.1 Lessee shall use the Premises only as an aircraft hanger is ordinarily used, and for other aviation-related purposes as permitted by the Ground Lease Lessor, and for no other purpose. 5.2 Lessee shall at all time strictly abide by all rules and regulations ofthe Ground Lease lessor, and shall not act or fail to act, or suffer on permit to suffer any act or omission in violation of such rules or regulation or in such a manner as to cause Lessor to be in violation of or suffer any penalty or sanction under the Ground Lease. 5.3 Lessee shall have, in common with the Lessees of Units A and B, the non-exclusive right to use the Property except for those portions set apart for the exclusive use of the Lessees of Units A and B respectively, subject, however, to such rules and regulations as Lessor may in its reasonable discretion establish from time to time, and provided that any such rules and regulations are nondiscriminatory and apply to all Lessees of the Property uniformly. 5.4 Any violation of the Ground Lease or the rules and regulations of the Ground Lease caused or suffered by any employee, licensee or invitee of Lessee shall he deemed to be a violation by the Lessee, regardless of whether Lessee has or exercises any control over the person causing or suffering the violation. 6. IMPROVEMENTS 6.1 Lessee shall make no alterations or improvements to the structural components of Premises or to the Property without Lessor's prior written consent which maybe given or withheld in Lessor's arbitrary discretion. Unattached, moveable trade fixtures shall not be considered as improvements, provided that they can be removed without injury either to the Premises or to the fixtures. HVAC equipment, communications antennae and any other device or equipment the installation of which requires penetration of the roof, foundation or exterior walls shall be -4- deemed improvements which require Lessor's consent. 6.2 Upon termination of this Sub-Lease, all structural alterations or improvements shall remain on the Premises and become the property of Lessor unless Lessor requests their removal. If Lessor requests removal Lessee shall remove same within seven days and shall repair to Lessor's satisfaction any penetrations or damage to the Premises caused by the installation, maintenance or removal. 7. MAINTENANCE; REPAIRS 7.1 Lessor shall maintain the roof, foundation and exterior walls of the hanger building and all other portions of the Property other than those required to be maintained by any unit Lessee in good condition and working order. 7.2 Lessee shall maintain in good condition and working order the following: 7.2.1 aircraft ingress/egress door and all other exterior doors providing access to the Premises and all exterior windows (including glass replacement); 7.2.2 all lighting and electrical fixtures affixed to that part of the hanger building enclosing Lessee's unit; 7.2.3 any fixtures attached to or improvements contained in the Premises or installed by Lessee; 7.2.4 all HVAC equipment, plumbing, conduits, pipes or wires providing service to the Premises to the extent that same are located in, above, below or adjacent to the Premises; 7.2.5 those portions of the Property set apart for Lessee's exclusive use; and 7.2.6 Lessee's portion of the interior demising wall(s). 7.3 In the event of fire or other casualty to the Property, Lessor will repair or replace those parts -5- of the Property which it is obligated to maintain and Lessee will repair or replace those parts which is obligated to maintain. There shall be no abatement of rent as a result of any fire or other casualty to the Property or Premises. Each party shall commence its work promptly and diligently prosecute same to completion. Lessor shall have and there is hereby created in its favor a security interest in any insurance proceeds which may become payable to Lessee as a result of any casualty to the Premises, to secure Lessor in Lessee's performance of its obligations to repair or replace. Lessor is appointed as Lessee's agent and attorney-in-fact to submit proofs of loss, adjust claims and to receive insurance proceeds. Any such proceeds shall be held by Lessor and applied to the cost of repair or restoration. 8. INSURANCE; SUBROGATION WAIVER; INDEMNITY 8.1 Lessor and Lessee shall each maintain all-risks insurance in amounts sufficient to provide 100% of replacement cost for those portions of the Property which each is respectively obligated to maintain and repair. Lessor's and Lessee's deductible shall not exceed $5,000, and each party and such parties as is required by Article XII of the Ground Lease, shall be named as an additional insured on the other's casualty loss and liability policies. Liability coverage shall be not less than the amount and type of coverage required under Article XII of the Ground Lease for the lessee thereunder. If Lessee, Lessor and Lessor's insurance carrier agree, in lieu of Lessee obtaining separate insurance for the casualty loss or liability protection, Lessee shall be named as an additional insured on Lessor's policy. In such event: 8.1.1 Lessee shall pay directly or reimburse Lessor for Lessee's percentage of the premiums on request; 8.1.2 Lessee shall pay in connection with any loss or claim Lessee's percentage or any deductible or retention; -6- 8.1.3 In the case of a casualty loss policy proceeds shall be allocated first to the costs in excess of Lessor's portion of the deductible for repair or replacement of the portions of the Property which Lessor is obligated to maintain, and then to Lessee's repair or replacement cost in excess of Lessee's percentage of the deductible, with any surplus being allocated as provided in 8.1.2 with reference to deductible; 8.1.4 Lessee shall maintain separate casualty insurance for the Premises contents not covered by thejoint policy and its own liability coverage for claims; and 8.1.5 Nothing in 8.1.1 - 8.1.4 shall affect the subrogation waiver in 8.2 or the claim waiver and indemnity provided in 8.3 not within the scope of coverage provided by the joint policy. 8.2 Lessor and Lessee on behalf of themselves and their respective insurance carriers each waive in favor of the other any claims for damages or reimbursement for or on account of any loss to the extent of insurance coverage required hereunder and also to the extent of any deductible and any excess or umbrella coverage. 8.3 LESSEE WAIVES ANY CLAIM NOW OR LATER ARISING AGAINST LESSOR, LESSOR'S GENERAL PARTNER, ANY MANAGER OR MEMBER OF THE GENERAL PARTNER AND ANY AGENT OR EMPLOYEE OF THEM FOR ANY LOSS OR DAMAGES, INCLUDING INCIDENTAL AND CONSEQUENTIAL DAMAGES SUFFERED OR INCURRED BY LESSEE AS A RESULT OF ANY ACT OR OMISSION BY ANY THIRD PARTY (THE "WAIVED CLAIMS") AND AGREES TO INDEMNIFY LESSOR, LESSOR'S GENERAL PARTNER, ANY MANAGER OR MEMBER OF THE GENERAL PARTNER AND ANY AGENT OR EMPLOYEE OF ANY OTHER THEM FOR ANY LOSS, DAMAGE OR LIABILITY ~- (INCLUDING COSTS OF DEFENSE AND AMOUNTS PAID IN GOOD FAITH IN SETTLEMENT) INCURRED BY REASON OF ANY CLAIM MADE BY LESSEE, ANY MEMBER, PARTNER, OFFICER, DIRECTOR, EMPLOYEE, AGENT, LICENSEE OR INVITEE OF LESSEE BASED IN WHOLE OR IN PART ON ANY OF THE WAIVED CLAIMS. 9. DEFAULT; REMEDIES 9.1 Lessor's Default; Remedies. 9.1.1 If Lessor shall fail to pay any rents or other amounts when due under the Ground Lease or if Lessor shall fail to perform any other covenant under the Ground Lease, Lessee may pay the amount due or perform Lessor's obligation. The amounts so expended by Lessee shall be paid to Lessee by Lessor on demand, and maybe set- off by Lessee against any amounts next coming due Lessor under this Sub-Lease until the entire amount is reimbursed. 9.1.2 If Lessor shall default in the performance of any obligation under this Sub-Lease, Lessee shall have the right to perform Lessor's obligation. The amounts so expended by Lessee shall be reimbursable on demand, and may be set-off by Lessee against any amounts next coming due Lessor under this Sub-Lease until the entire amount is reimbursed. 9.1.3 The right to cure and to receive reimbursement shall be Lessee's sole remedies in the event of Lessor's breach. 9.2 Lessee's Default; Remedies. 9.2.1 If Lessee shall default in the payment of rent and such default shall continue for more than five (5) business days after written notice to Lessee, or if Lessee shall -8- default in the payment of any other amount owing to the Lessor hereunder and such default shall continue for more than ten (10) business days after written demand is made upon Lessee, then and in either event, Lessor may exclude Lessee and any sub-tenant or licensee from the Premises and may continue to so exclude Lessee (or its subtenant or licensee) from the Premises pursuant to and in accordance with the provisions of the Texas Property Code applicable in such cases to commercial tenancies. If Lessee shall fail to pay all amounts due and owing by 5:00 p.m. on the second business day following exclusion of Lessee from the Premises, then Lessor shall have the right, without further notice or demand, to terminate this Sub-Lease and to recover possession of the Premises through judicial process. 9.2.2 It Lessee shall fail to keep or perform any covenant or obligation imposed under Article 5 hereof Lessor shall have the right exercisable without notice or demand to cure the breach or default of Lessee's behalf. Any amounts so expended by Lessor shall become indebtedness due and owing on demand, and if not paid within the grace period under 9.2.1, Lessor shall have the rights and remedies provided in 9.2.1. If a breach of this Sub-Lease by Lessee in Lessor'sjudgmentcreates arisk of default under the Ground Lease then Lessor shall in addition to all other rights and remedies be entitled to immediate, ex parte injunctive relief and in any such proceeding, the existence of irreparable harm and the absence of adequate remedy at law shall be conclusively presumed. 9.2.3 Lessor may bring an action in debt to recover amounts due and owing by Lessee at any time without prejudice to the rights and remedies provided in 9.2.1, such remedies being cumulative and exercisable concurrently or consecutively. -9- 9.2.4 Lessor shall have the right, without notice or demand to enter the Premises to inspect same or in the exercise of its rights and remedies under 9.2.1 or 9.2.2. In its exercise of rights under this 9.2.4 or under 9.2.1 Lessor (its general partner, any member of its general partner and any of its or their agents or employees) shall not be liable for trespass or conversion of either the Premises or personal property contained therein, and shall not be liable for incidental, consequential or penal damages for breach of this Sub-Lease or on account of any act or omission in the exercise of rights hereunder or provided by law. 10. MORTGAGES; ALIENATION 10.1 By Lessor. Lessee agrees that this Sub-Lease is and shall remain subordinate to any existing or future mortgage of the Property by Lessor provided that Lessee and any mortgagee shall have entered into anon-disturbance and attornment agreement. The execution of such agreement is a condition precedent to the effectiveness of this Sub-Lease. 10.2 By Lessee. Lessee shall not transfer or encumber its interest in the Premises without Lessor's prior written consent which consent shall not be unreasonably withheld. Any absolute transfer shall be subject to the provisions of the Partnership Agreement imposing restrictions on transfer of partnership interests. Lessor's consent to an encumbrance shall not be unreasonably withheld. Lessor's consent may be conditioned upon receipt of a written undertaking from Lessee's mortgagee to provide Lessor with a copy of any notice of delinquency, default, intent to accelerate or acceleration of the mortgage debt. Lessor's consent to the mortgage includes its consent to foreclosure thereof in the event to Lessee's default. A mortgagee, trustee or receiver in possession of the Premises shall keep and perform all of Lessee's obligations hereunder and shall be subject to all the provisions of this Sub-Lease. The mortgagee or other purchaser at -10- foreclosure shall take its interest subject to this Sub-Lease and shall upon acquisition of Lessee's interest keep and perform all of Lessee's obligations thereunder. If at the time of foreclosure Lessee is in default in the payment of any obligation hereunder, the mortgagee or other purchaser at foreclosure shall have until the last business day of the month in which the foreclosure occurs to cure such default. Any subsequent transfer of this Sub-Lease by Lessee's mortgagee or purchaser at foreclosure shall be subject to and on the same terms as the provisions of the Partnership Agreement relating to transfer of interests in Lessor. 10.3 Estopnel Letters. Lessor and Lessee shall on request by either or by any mortgagee or prospective mortgagee orinterest-transferee or either, furnish an Estoppel letter confirming that the Ground Lease and this Sub-Lease is in force according to its terms (if that is in fact the case) and stating whether, to the current, actual knowledge of the party providing the letter, there exists any event of default or condition which with the passage of time, the giving of notice or both, would constitute an event of default on the part of the other party. If the letter is not provided within 10 days after receipt of a written request, then the requesting person may conclusively presume that the Ground Lease and this Sub-Lease aze in effect according to their terms, that the Lessor or Lessee as the case may be is not in default and that no potential default exists. 11. NOTICES 11.1 All notices by or to a party shall be in writing and shall be deemed received when actually received if delivered by commercial courier, or in the case of mail, on the next delivery day after deposit of the notice in the custody of the U.S. Postal Service in afirst-class, certified mail, return receipt requested, postage pre-paid envelope correctly addressed to the recipient at the addresses stated in 1.1 hereof or such other address as either may designate by Notice in accordance herewith. 12- EXECUTED to be effective February 7, 2006. 4845 LOCKHEED ASSOCIATES, LTD., a Texas limited partnership By: LOCKHEED INVESTORS, L.L.C., a T s limited liability company, Ge er 1 Partner By: HANGARS, L.L.C., ~s limited liability company By: Vann, vann\den[on county airport hangarlsublease-Lrtf d:'"`lt~.`,, ' ~ ` BRANDY NEITZMAN ~ ~ Notary Public, State of Texas ' ~ - ~ "~°' My Commission Expires ;; 4~ I1~11~~~" May 72, 2008 ice, -13- .i~G9 o rvlac ~~s - ;,vm aati 0 ~r r r A Z ~-d~ ~_ ~; I ~ O W Y ~_ ¢ Z-d~ '.~~ vz=~00 D. - 0_I>rc >~u"~ O~JQ'N rc~00w ~LKLLtt i O ~o ~~- U - i z i-f1 na ~ O X C y K 7_fl ~ i` L O O K F K W KL uJ?r0 ., OZ ~ JO Z p ti t-J ~ >° '~ Ojj U~i x ~ V ~~~~~ ~ ~ z z-~ I ~~ a ^I 0 a ~ ~ m 'IY 130 335 - ^vm 3a!d I rl I ---I i ~ I I I ~ I I ~ I I p i ~ LL 1 m~~ ~ - u V ~ I O I C I ~ 4 !~ I ti r_ I N 6 N I c .c W .-1 1~ I ..] cp ~ G I b .' N I d u m I d -i w t C Ql i x of i u E I I O i ..~ C C ` I O C I N ~ ~ I ~? C C I ~ N y ~ ~T ~ C] ~ I 0 ~ J ~ I m I ~ +I O ~ i I I ~ I 1 I I I I I I ~ ~ I I ~ I z ~ ~ I o ' W I I ~ I I m , I r -~ ~ I ~ u i I o i i ~ = I I z " . I I ~ . J I ~ ~ I _~ ~ l ~ m r~ .~ CONSENT TO ASSIGNMENT OF SUB-LEASE The City of Denton, Texas (the "Master Landlord") is the sole landlord under that certain Airport Lease Agreement -Commercial Operator-dated September 21, 2004, entered into between the Master Landlord, as landlord, and JVC Real Estate, L.L.C.. ("JVC"), as tenant (the "Ground Lease"). The interest of JVC as tenant under Ground Lease was assigned to 4845 Lockheed Associates, Ltd. (the "Tenant") with the approval and consent of Master Landlord. The Ground Lease covers approximately .455 acres of land located at 4845 Lockheed Lane, Denton, Texas, and being more particularly described in the Ground Lease (the "Leased Premises"). By Consent to Sublease dated August 16, 2006, the City of Denton, Texas consented to the sublease of a portion of the Leased Premises known as Unit A (the "Sub-Leased Premises")being depicted on Exhibit "A" attached hereto, by Tenant to JVC Hangars, LLC, a Texas limited liability company, to that Sub-Lease Agreement effective January 26, 2006 (but mistakenly referred to in the Consent to Sublease as being dated June 28, 2006) (the "Sublease Agreement"). The Master Landlord and Tenant hereby consent to the assignment of the Sub-Lease Agreement on Unit A to Stecklein Aviation, LLC, a Kansas limited liability company ("Stecklein") pursuant to the Assignment of Sublease dated Apri128, 2008 between JVC Hangars, LLC, and Stecklein, on the following terms and conditions: 1. Tenant shall remain fully liable for the performance of each and every tern, provision, covenant, duty, and obligation of the Tenant under the Ground Lease, including, without limitation, the duty to make any and all payments of rent. This Consent to Assignment of Sub-Lease shall in no way release Tenant from any of its covenants, agreements, liabilities, and duties under the Ground Lease. Nothing herein contained shall be deemed a waiver of release of any of the Master Landlord's rights under the Ground Lease; and 2. Stecklien's use and occupancy of the Sub-Leased Premises shall be subject to all of the terms and conditions of the Ground Lease, and in the event of any conflict between the terms of the Ground Lease and the terms of the Sub-Lease, the terms of the Ground Lease shall control. 3. Stecklein shall pay to the Master Landlord a transfer fee equal to $250.00 in connection with Master Landlord providing its consent to the Assignment of Sub-Lease. SIGNATURE PAGE TO FOLLOW City of Denton Consent to Assignment of Sub-Lease City of Denton, Tex Name: G ~~h,.G 6 G - ~P~ ~z-i Title: c. ~ r~ ~n~t.~A~ L~- Date: N-3o-od' Attest: Je 'fer Walters, City ecretary By. Approved as o Legal Form Edwin M. Snyder, City Attorney By: ACKNOWLEDGED AND AGREED: TENANT: 4845 Lockheed Associates, Ltd. a Texas limited partnership By: Loc~eed Invest~ers, LLC, General Partner . By: '~-- o Vann, Manager SUB JVC Hangars, LLC, a Texas limited liability company By: J ann, Manager SUB-L~~E ASSIGNEE: Stecklein Aviation LL a ' ed liability company By: Bern d Stecklein, Member By: o e Stecklein, ember .; EXHIBIT A i ~~ ' 'i .~ ~. .Cl ~ RiRfi tiAl1 - 5~' DE';A~ - ~ ~ 1--- m r- 1 .~ i 1 ~a 1 n - 1 1, '_ ~ } 1 1 ~. a ~ i ~` (~ i ~ 1't 1 C! U 1 ~ ~ '+0 ~}~ j 1 O g..' 1 {.~~~'. ~ aid 1 ~~~ p,•; ~~+ 1 : 1 1 ~ •~ 1 ~ . t 1 .. - 1 1 +. ~~ 1 - ~~ ~ 1 - ~~ ~, ~3: ~ 1 1 a re 1 ~„ ~. T- 3 ,i~:. (. =O 1 r t ~ p . C! .d ~ 1 ' ' fD (D OD 1 ~ ' rF r• tJ~ i 1 M. 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