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AGREEMENT AUTHORIZING USE OF AIRPORT PROPERTY FOR <br />OPERATION OF BUSINESS <br />Section 1. Parties. This agreement (this "Agreement") is made between Officers Club AeroVentures <br />San Marcos #2, LP, Blue Skies Aviation, LLC, and the City of San Marcos (the "City"). <br />Section 2. Background. The City is the owner of the San Marcos Municipal Airport (the <br />"Airport"), situated in San Marcos, Caldwell County, Texas. The City and Officers Club <br />AeroVentures San Marcos #1, LP previously entered into: a) a Lease of Unimproved Airport <br />Property For Construction and Operation of Business Facilities approved on April 19, 2005; b) <br />Amendment Number One To Lease of Airport property approved on September 20, 2005; c) <br />Amendment Number Two To Lease of Airport property, approved on December 11, 2007, to allow <br />business activities in addition to hangar rental; and d) Amendment Number Three To Lease of <br />Airport Property, approved on February 19, 2008, which added Officers Club AeroVentures San <br />Marcos #2, LP as an additional Lessee. The original lease and the three amendments just described <br />shall hereinafter be referred to as the "City Lease." Officers Club AeroVentures San Marcos #2, LP <br />has renovated a commercial facility (the "Facility") on the Property, and Officers Club AeroVentures <br />San Marcos #2, LP and Blue Skies Aviation, LLC have entered into an Amendment to Sublease of <br />Airport Property dated December 1, 2007 (the "Sublease"). <br />Section 3. Authorization for Operation of Airport Business by BLUE SKIES AVIATION, <br />LLC. This Agreement authorizes Blue Skies Aviation, LLC to operate a business within the Facility, <br />subject to the terms of this Agreement. <br />Section 4. Acceptance of Terms of City Lease. BLUE SKIES AVIATION, LLC acknowledges <br />that it has received a copy of the documents comprising the City Lease. Officers Club AeroVentures <br />San Marcos #1 and Blue Skies Aviation, LLC agree that the Sublease is subject to all terms and <br />conditions of the City Lease, and that any provision in the Sublease that conflicts with any provision <br />of the City Lease is null and void and of no force or effect. Officers Club AeroVentures San Marcos <br />#2, LP and BLUE SKIES AVIATION, LLC agree not to execute any amendment to the Sublease <br />without obtaining the prior written approval of the City. <br />Section 5. Continuing Responsibility of Officers Club AeroVentures San Marcos #2, LP under <br />City Lease. The City and Officers Club AeroVentures San Marcos #2, LP agree that the City's <br />approval of the Sublease, and its authorization in this Agreement for BLUE SKIES AVIATION, <br />LLC to conduct business at the Airport, do not affect Officers Club AeroVentures San Marcos #2, <br />LP's obligations under the City Lease. Officers Club AeroVentures San Marcos #2, LP remains fully <br />responsible to the City for compliance with all provisions of the City Lease. Officers Club <br />AeroVentures San Marcos #2, LP shall remain jointly responsible with Officers Club AeroVentures <br />San Marcos # 1, LP to continue making lease payments to the City in accordance with the City Lease. <br />Section 6. Acceptance of Facility by BLUE SKIES AVIATION, LLC. BLUE SKIES <br />AVIATION, LLC acknowledges that 1) neither the City nor Officers Club AeroVentures San Marcos <br /># 1, LP makes any warranty regarding the suitability of the Property or the Facility for BLUE SKIES <br />AVIATION, LLC' intended purposes, or the presence of environmental, geologic, or other site <br />