Document:

Exhibit 10.15

 

Aircraft
Lease Agreement

 

Utilicraft Aerospace Industries, Inc.(UTILICRAFT)
agrees to lease Cessna 414A N4684N, Ser. No. 414-0074 from JD Aero, LLC
for a lease term of 5 years from this date, July 1, 2005.

 

Terms and Conditions:

 

	
  Monthly Lease Payment

  	
   

  	
  $2,500

  
	
   

  	
   

  	
   

  
	
  Term:

  	
   

  	
  60 Months

  

 

1.                                       In
addition to the monthly Lease payments, all cost of maintenance, inspections,
overhaul, repair, insurance, and cost of operation, is the sole responsibility
of UTILICRAFT, and will be paid as incurred.

 

2.                                       All
equipment installed on, and modifications of the Aircraft by UTILICRAFT
remains as permanent equipment on the Aircraft and the sole property of JD
Aero, LLC.

 

3.                                       JD
Aero, LLC, has the right to terminate this Lease at any time, with no penalties
or additional cost or fees to UTILICRAFT or JD Aero, LLC.

 

 

	
  For the Utilicraft Aerospace Industries,
  Inc. Board of Directors:

  
	
   

  
	
   

  
	
  /s/ Thomas A. Dapogny

  	
   

  
	
  Thomas A. Dapogny – Corporate Secretary

  
	
   

  
	
  For JD Aero, LLC:

  
	
   

  
	
   

  
	
  /s/John Dupont

  	
   

  
	
  John Dupont - ManagerExhibit 10.16

 

UTILICRAFT AEROSPACE INDUSTRIES, INC.

 

554
Briscoe Blvd. Lawrenceville, GA 30045

Phone:
(678) 376-0898  Fax: (678) 376-9093

 

Purchase
Order

 

	
  PO Number:

  	
   

  	
  AMI-03-05-SOW-2

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
  Mach 25, 2005

  
	
   

  	
   

  	
   

  
	
  Amount:

  	
   

  	
  $323,276

  
	
   

  	
   

  	
   

  
	
  Terms:

  	
   

  	
  Invoice Net 30 days (invoice schedule below)

  
	
   

  	
   

  	
   

  
	
  Deliverables:

  	
   

  	
  FF-1080-300 Config. Definition,
  Wing Design, & Wind Tunnel.

  

 

The costs and schedules are as follows:

 

	
  Configuration
  Definition

  	
   

  	
  1 mo.

  	
   

  	
  $

  	
  18,750

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wing Design

  	
   

  	
  2 mos.

  	
   

  	
  $

  	
  37,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wind Tunnel:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Model
  fabrication and test support by Aeronautical Testing Service, Inc.

  	
   

  	
  3 mos.

  	
   

  	
  $

  	
  178,778

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  UWAL 8 ft x
  12 ft tunnel – occupancy cost for 15 shifts

  	
   

  	
  1 mo.

  	
   

  	
  $

  	
  45,846

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AMI test
  support, data analysis and documentation

  	
   

  	
  1 mo.

  	
   

  	
  $

  	
  42,402

  	
   

  
	
   

  	
   

  	
  Total

  	
   

  	
  $

  	
  323,276

  	
   

  

 

Payment for the work will be on a monthly
basis.

 

	
  Invoice
  Schedule:

  	
   

  	
   

  
	
   

  	
   

  	
  $20,000 per
  month for 3 months,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $60,000 per
  mo for 3 months

  
	
   

  	
   

  	
  $41,638 per
  mo for 2 months.

  

 

 

	
  Authorized By:

  	
  John J. Dupont

  
	
   

  	
  President, CEOExhibit 10.17

 

MASTER
FINANCING AGREEMENT

 

BETWEEN

 

PACIFICORP
FUNDING PARTNERS TRUST

 

AND

 

UTILICRAFT
AEROSPACE CORPORATION

 

This Master
Financing Agreement (“Agreement”) is made effective this 6th of May 2005,
by and between PacifiCorp Funding Partners Trust (“Trust”), a trust formed
under the laws of the Republic of Mauritius, and Utilicraft Aerospace
Corporation (“Company), a Nevada corporation. Further consideration for this
Agreement has been provided by John J. Dupont and R. Darby Boland, as set out below.

BACKGROUND

 

WHEREAS, Trust
has contacts and relationships with brokers, investment bankers and qualified
investors throughout Europe, Asia and Africa who desire to fund start-up U.S.
business enterprises through the sale and purchase of securities issued by such
entities, and has agreed to employ these contacts and relationships to fund the
initiatives set out in this Agreement pursuant to the terms hereof.

 

WHEREAS,
Company, Dupont and Boland are willing and have agreed to contribute a total of
80 million shares of Company common stock, newly issued by the Company and
transferred from Dupont and Boland, to forward the initiatives set out in this
Agreement pursuant to the terms hereof.

 

WHEREAS,
Company is willing and has agreed to issue to Trust Warrants, in the form
provided herewith, for the purchase of 60 million shares of Company stock in
accordance with the schedule and at prices set out in this Agreement for
the purpose of providing capital to Utilicraft pursuant to the terms hereof.

 

AGREEMENT

 

NOW THEREFORE,
in consideration of the mutual covenants and undertakings and the terms and
conditions contained herein, the parties hereto agree as follows:

 

1.                                       General
Definitions and Terms; Rules of Construction.

 

1. General Definitions and Terms; Rules of
Construction.

 

(a)     General Definitions.
Capitalized terms used in this Agreement shall have the meanings assigned to
them in Annex A.

 

(b)    Accounting Terms. Any
accounting terms used in this Agreement that are not specifically defined shall
have the meanings customarily given them in accordance with GAAP and all
financial computations shall be computed, unless specifically provided herein,
in accordance with GAAP consistently applied.

 

(c)     Other Terms. All other terms
used in this Agreement and defined in the UCC or the United States Federal
Securities Laws, shall have the meaning given therein unless otherwise defined
herein.

 

(d)    Rules of Construction.
All Schedules, Addenda, Annexes and Exhibits hereto or expressly identified to
this Agreement are incorporated herein by reference and taken together with
this Agreement constitute but

 

 

a single agreement. The words “herein”, “hereof”
and “hereunder” or other words of similar import refer to this Agreement as a
whole, including the Exhibits, Addenda, Annexes and Schedules thereto, as the
same may be from time to time amended, modified, restated or supplemented, and
not to any particular section, subsection or clause contained in this
Agreement. Wherever from the context it appears appropriate, each term stated
in either the singular or plural shall include the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, the feminine and the neuter. The term “or” is not exclusive. The
term “including” (or any form thereof) shall not be limiting or exclusive. All
references to statutes and related regulations shall include any amendments of
same and any successor statutes and regulations. All references in this
Agreement or in any Schedules, Addenda, Annexes and Exhibits to this Agreement
to sections, schedules, disclosure schedules, exhibits, and attachments shall
refer to the corresponding sections, schedules, disclosure schedules, exhibits,
and attachments of or to this Agreement. All references to any instruments or
agreements, including references to any of this Agreement or the Ancillary
Agreements shall include any and all modifications or amendments thereto and
any and all extensions or renewals thereof. There are no Ancillary Agreements
at this time; any such Ancillary Agreements may, with the parties’ consent, be
made part of this Agreement and be subject to the terms and conditions hereof.
All references to monetary amounts in this Agreement shall refer to U.S.
Dollars.

 

2.                                       Funding
Facility.

 

(a)                                  Delivery of Shares;
Terms of Issuance.

 

Subject to the
terms and conditions set forth herein and in any Ancillary Agreements, Company,
Dupont and Boland shall deliver to Trust a total of 80 million common shares of
Company’s stock. As to these shares, 60,584,260 shall be newly issued by the
Company, 11,660,000 shall be transferred from Dupont, and 7,755,740 shall be
transferred by Boland (the “Shares”). The Shares shall be issued or transferred
are not and have not been subject of a registration statement deemed effective
by the Securities and Exchange Commission and are issued and transferred in
accordance with one or more exemptions provided under the Securities Act of
1933. The Shares will be issued or transferred to Trust, and registered on the
Company’s share ledger with restrictions on resale as set out in this
Agreement. The Shares will have full voting rights to be exercised by the
Trustee, as well as rights to any lawfully declared dividends, provided that in
the event of Trust’s failure to meet its funding obligations and the subsequent
return of any portion of the Shares that Trust will have an obligation to repay
any dividends on returned Shares to Company, Dupont and Boland, pro rata. The Shares will not have any
pre-emptive rights and will be subject to dilution upon the issuance of any
additional shares by the Company. Company specifically disclaims any obligation
to register the Shares in any registration statement filed with the Securities
and Exchange Commission, but the parties reserve the right, but not the
obligation, to negotiate such registration rights for some or all of the Shares
pursuant to an Ancillary Agreement.

 

(b)                                 Delivery of Warrants;
Terms of Issuance and Exercise.

 

Subject to the
terms and conditions set forth herein and in any Ancillary Agreements, Company
shall deliver to Trust Warrants for the purchase of 60 million common shares of
the Company’s stock. Such Warrants shall be in the form attached hereto and
shall be exercisable pursuant to the provisions of this Agreement. The shares
issued upon exercise of the Warrants shall have full voting rights, as well as
rights to any lawfully declared dividend, and shall have no pre-emptive rights.
Shares issued upon exercise of the Warrants shall be subject to dilution upon
the issuance of any additional shares by the Company. Shares to be issued upon
the exercise of the Warrants are not subject of a registration statement deemed
effective by the Securities and Exchange Commission and will be issued in
accordance with one or more exemptions provided under the Securities Act of
1933. The shares to be issued upon exercise of the Warrants will be registered
on the Company’s share ledger with restrictions on resale as set out in this
Agreement. Company specifically disclaims any obligation to register shares
issued upon exercise of the Warrants in any registration statement filed with
the Securities and Exchange Commission, but the parties reserve the right, but
not the obligation, to negotiate such registration rights for some or all of
such shares pursuant to an Ancillary Agreement.

 

2

 

Notwithstanding the limitations set forth
herein, Trust and Company may agree to the issuance and sale of additional
shares, warrants or other rights pursuant to any Ancillary Agreements.

 

(c)                                  Terms of the
Warrants.

 

Subject to the
terms and conditions set forth herein and in any Ancillary Agreement the
Warrants shall be exercised in accordance with the following provisions:

 

(i)                                     Warrants
for the purchase of 20 million shares shall be exercisable at $.50 per share; these
Warrants shall be exercisable for a period of 360 days after execution of this
Agreement.

 

(ii)                                  Warrants
for the purchase of 30 million shares shall be exercisable at $1.50 per share;
these Warrants shall be exercisable for a period of 540 days after execution of
this Agreement.

 

(iii)                               Warrants
for the purchase of 10 million shares shall be exercisable at $2.50 per share;
these Warrants shall be exercisable for a period of 720 days after execution of
this Agreement.

 

The Warrants are not assignable, nor can they
be resold, absent the parties’ execution of an Ancillary Agreement permitting
such assignment or sale.

 

Pursuant to this Agreement, Trust is to
provide a minimum of $40,000,000 in funding to Company and a maximum of
$80,000,000 by exercise of the Warrants. Further pursuant to this Agreement or
any Ancillary Agreement, in the event that Trust fails to exercise Warrants
sufficient to generate the minimum funding provided herein within 540 days
following execution of this Agreement, Trust shall, upon demand, return all
shares held by it to Company, Dupont and Boland, pro rata, and return all unexercised Warrants to the Company
for cancellation or resale. Company specifically disclaims any manner of
security interest in the Shares or Warrants, reserving the right only to return
of the Shares in the event of a funding obligation failure. The parties
expressly reserve the right, without obligation, to renegotiate the terms of exercise
of the Warrants, whether as to exercise price or period, in the event of the
establishment and based on the condition (price and volume) of a public market
for Company’s common stock.

 

4.                                       Resale of Shares
by Trust.

 

The parties
understand and agree that the Trust may, in its discretion offer and sell some
or all of the Shares in private transactions or in lawful public transactions,
so long as none of these transactions are effected with U.S. Persons, as that
term is defined in Securities and Exchange Commission Regulation S, do not
involve U.S.-directed selling efforts, and are effected in accordance with the
applicable laws of the jurisdiction in or from any such offer or sale is
effected.

 

(a)                                  Regulation S
Reselling.

 

Trust may,
from time-to-time, resell some or all of the Shares in qualifying transactions
effected pursuant to Securities and Exchange Commission Regulation S. In such
event, Trust shall have the sole responsibility to ensure, among other things,
that any sales made by it directly or by brokers employed by it will be
effected to non-U.S. Persons, that any brokers employed by it are qualified to
effect such resales by the applicable laws of the jurisdiction in which the
broker operates and the purchasers reside, and that it will provide
instructions to the Company’s transfer agent that the Shares shall contain an
appropriate legend restricting further resale. Trust furthermore agrees that
any disclosure statement used by it in connection with any such offer or sale
shall be limited solely to documents either prepared by the Company (although
the Company specifically disclaims any obligation to prepare such document), or
filed by the Company with the Securities and Exchange Commission. Company
agrees to register any Shares sold by Trust in its share ledger in the name of
the purchaser. Trust understands and agrees that the sale of any Shares under
these provisions will not establish any rights in favor of the purchaser beyond
those rights granted to Trust, and further agrees to inform any broker or
purchaser with respect to the rights, obligations and limitations applicable to
it as set out in this Agreement.

 

3

 

(b)                                 Private Reselling.

 

Trust may,
from time-to-time, resell, grant rights to, barter, swap or otherwise exchange
the Shares with qualified purchasers, partners or counter-parties on such terms
as Trust and such parties may agree. Trust agrees that it will not enter into
any such transaction with a U.S. Person or engage in U.S.-directed selling efforts
in connection with any such transaction, and that it will provide instructions
to the Company’s transfer agent that the Shares shall contain an appropriate
legend restricting further resale. Company agrees to register any Shares sold
by Trust in its share ledger in the name of the purchaser. Trust understands
and agrees that the sale of any Shares under these provisions will not
establish any rights in favor of the purchaser beyond those rights granted to
Trust, and further agrees to inform any broker or purchaser with respect to the
rights, obligations and limitations applicable to it as set out in this
Agreement.

 

(c)                                  Use of Shares as
Collateral.

 

In
consideration of the return provisions, Trust may not use the Shares or any
part thereof, as collateral for lending facilities absent consent of the
Company. Any such hypothecation of the Shares shall be effected in such a
manner that the Company’s rights to return of the shares in the event of a
funding obligation failure shall be primary to the collateral interest of a
lender. Furthermore, any such lending facility shall not be effected with a
U.S. Person, or by use of any U.S.-directed selling efforts.

 

5.                                       Conditions,
Representations and Warranties.

 

(a)                                  Financial Reporting.

 

Company will deliver, or cause to be
delivered, to Trust each of the following, which shall be in form and detail
acceptable to Trust:

 

(i) As
soon as available, and in any event within ninety (90) days after the end of
each fiscal year of Company (or to the extent an automatic filing extension has
been requested by Company required to deliver financial statements under this
section, 105 days after the end of each fiscal year of the Company, a copy of
its audited but “not as yet filed” draft 10-KSB, with auditor’s opinion, within
the initial ninety (90) day period) Company’s audited financial statements with
a report of PCAOB-approved independent certified public accountants of
recognized standing selected by Company (the “Accountants”), which annual
financial statements shall be without qualification, excepting a “going concern”
qualification, and shall include Company’s balance sheet as at the end of such
fiscal year and the related statements of Company’s income, retained earnings
and cash flows for the fiscal year then ended, prepared, on a consolidating and
consolidated basis to include all Subsidiaries and Affiliates of Company (if
any), all in reasonable detail and prepared in accordance with GAAP, together
with (i) if and when available, copies of any management letters prepared
by the Accountants; and (ii) a certificate of Company’s President, Chief
Executive Officer or Chief Financial Officer stating that such financial
statements have been prepared in accordance with GAAP and whether or not such
officer has knowledge of the occurrence of any Default or Event of Default
hereunder and, if so, stating in reasonable detail the facts with respect
thereto;

 

(ii) As
soon as available and in any event within forty five (45) days after the end of
each quarter, an unaudited/internal balance sheet and statements of income,
retained earnings and cash flows of Company as at the end of and for such
quarter and for the year to date period then ended, prepared on a consolidating
and consolidated basis to include all Subsidiaries and Affiliates of Company
(if any), in reasonable detail and stating in comparative form the figures for
the corresponding date and periods in the previous year, all prepared in
accordance with GAAP, subject to year-end adjustments and accompanied by a
certificate of Company’s President, Chief Executive Officer or Chief Financial
Officer, stating (i) that such financial statements have been prepared in
accordance with GAAP, subject to year-end audit adjustments, and (ii) whether
or not such officer has knowledge of the occurrence of any Default or Event of
Default hereunder not theretofore reported and remedied and, if so, stating in
reasonable detail the facts with respect thereto.

 

4

 

These obligations may be satisfied by provision
of copies of Company’s most recent registration statements and annual,
quarterly, monthly or other regular reports that Company files with the
Securities and Exchange Commission (the “SEC”), and (ii) the issuance
thereof, copies of such financial statements, reports and proxy statements as
the Company shall send to its stockholders.

 

6. Additional Representations and Warranties.

 

Company hereby represents and warrants to
Trust as follows:

 

(a)                                  Organization, Good
Standing and Qualification.

 

It is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of the State
of Nevada and, as the case may be, has the power and authority to own and
operate its properties and assets and, insofar as it is or shall be a party
thereto, to (i) execute and deliver this Agreement and any Ancillary
Agreements, (ii) to issue the Shares, (iii) to issue the Warrants and
the shares of common stock issuable upon conversion of the Warrants, and to (iv) carry
out the provisions of this Agreement and any Ancillary Agreements and to carry
on its business as presently conducted.

 

(b)                                 Capitalization; Voting
Rights.

 

(i)                                     The
authorized capital stock of the Parent, as of the date hereof consists of
300,000,000 shares, of which 275,000,000 are shares of Common Stock, par value
$0.0001 per share, 148,033,884 shares of which are issued and outstanding, and
25,000,000 are shares of preferred stock, par value $0.0001 per share of which
no shares of preferred stock are issued and outstanding.

 

(ii)                                  There
are no shares reserved for issuance under any stock option plans, although
Company reserves the right to adopt any such lawful plan.

 

(iii)                               There
are 17,287,664 shares reserved for issuance upon the exercise of warrants
granted by Company; these shares will be issued for cash at prices ranging from
$1.00 to $10.00, but without cashless exercise rights.

 

(iv)                              There
are no outstanding options, warrants, rights (including conversion or
preemptive rights and rights of first refusal), proxy or stockholder
agreements, or arrangements or agreements other than those set out herein, and
neither the issuance of the Shares or the issuance of shares upon the exercise
of the Warrants will result in a change in the price or number of any
securities of the Company outstanding under anti-dilution or other similar
provisions contained in or affecting any such securities.

 

(v)                                 All
issued and outstanding shares of the Company’s common stock; Have been duly authorized
and validly issued and are fully paid and non-assessable; and were issued in
compliance with all applicable state and federal laws concerning the issuance
of securities.

 

(vi)                              The
rights, preferences, privileges and restrictions of the Shares or shares to be
issued upon the exercise of the Warrants are as stated in Company’s Certificate
of Incorporation (the “Charter”), and the shares to be issued upon exercise of
the Warrants have been duly and validly reserved for issuance. When issued in
compliance with the provisions of this Agreement and Company’s Charter, the
Shares and shares to be issued upon exercise of the Warrants will be validly
issued, fully paid and non-assessable, and will be free of any liens or
encumbrances; provided, however, that such securities may be subject to
restrictions on transfer under state and/or federal securities laws as set
forth herein or as otherwise required by such laws at the time a transfer is
proposed.

 

(c)                                  Authorization;
Binding Obligations.

 

5

 

All corporate action necessary for the authorization of this Agreement
and any Ancillary Agreements, the performance of all of its obligations
hereunder on the Closing Date and the authorization, issuance and delivery of
the Shares and the Warrants has been taken or will be taken prior to the
Closing Date. This Agreement, when executed and delivered and to the extent it
is a party thereto, will be its valid and binding obligation enforceable in
accordance with the terms hereof, except:

 

(i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application affecting enforcement of creditors’ rights;
and

 

(ii) general
principles of equity that restrict the availability of equitable or legal
remedies.

 

(d)                                 Liabilities.

 

The Company has no liabilities, except current liabilities incurred in
the ordinary course of business, including, specifically, liabilities under its
lease agreement with the City of Albuquerque for the Diamond Eagle-II airport
hanger and office facilities, due to any officer, director or employee under
Employment Agreements, or due to related parties under an airplane lease
agreement.

 

(e)                                  Agreements; Action.

 

Excepting those liabilities set out herein,
there are no agreements, understandings, instruments, contracts, proposed transactions,
judgments, orders, writs or decrees to which it is a party or to its knowledge
by which it is bound which may involve:

 

(i)                                     Obligations
(contingent or otherwise) of, or payments to, it in excess of $50,000 (other than obligations of, or payments to, it
arising from purchase or sale agreements or agreements evidencing
Purchase Money Indebtedness, in each case, entered into in the ordinary course
of business); or the transfer or license of any patent, copyright, trade secret
or other proprietary right to or from it; or

 

(ii)                                  provisions
restricting the development, manufacture or distribution of the FF-1080-300
aircraft

 

(iii)                               indemnification
by it with respect to infringements of proprietary rights.

 

Since December 31, 2004, (the “Balance
Sheet Date”) the Company has not declared or paid any dividends, or authorized
or made any distribution upon or with respect to any class or series of its
capital stock; incurred any indebtedness for money borrowed or any other
liabilities (other than ordinary course obligations or as set out above)
individually in excess of $50,000 or, in the case of indebtedness and/or
liabilities individually less than $50,000, in excess of $100,000 in the
aggregate; made any loans or advances to any Person not in excess, individually
or in the aggregate, of $100,000, other than ordinary advances for travel
expenses; or sold, exchanged or otherwise disposed of any of its assets or
rights, other than the sale of its Inventory and/or disposition of outdated,
surplus or worn out equipment, so long as, in each case, such sale or
disposition is in the ordinary course of business.

 

(f)                                    The Company
maintains disclosure controls and procedures (“Disclosure Controls”) designed
to ensure that information required to be disclosed by the Company in the
reports that it may file or submit under the Securities Act or Exchange Act is
recorded, processed, summarized, and reported, within the time periods
specified in the rules and forms of the SEC.

 

(g)                                 The Company makes and
keeps books, records, and accounts that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of its assets. It maintains
internal control over financial reporting (“Financial Reporting Controls”)
designed by, or under the supervision of, its principal executive and principal
financial officers, and effected by its board of directors, management, and
other personnel, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial

 

6

 

statements for external purposes in
accordance with GAAP, including that:

 

(i) transactions
are executed in accordance with management’s general or specific authorization;

 

(ii) unauthorized
acquisition, use, or disposition of Company assets that could have a material
effect on the financial statements are prevented or timely detected;

 

(iii) transactions
are recorded as necessary to permit preparation of financial statements in
accordance with GAAP, and that its receipts and expenditures are being made
only in accordance with authorizations of Company’s management and board of
directors;

 

(iv) transactions
are recorded as necessary to maintain accountability for assets; and

 

(v) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals, and appropriate action is taken with respect to any
differences.

 

(h)                                 To the extent that the
rules issued by the SEC implementing Section 404 of the
Sarbanes-Oxley Act of 2002 are applicable to Company, there are no weaknesses
in any of its Disclosure Controls or Financial Reporting Controls that would be
required to be disclosed in any Securities Act or Exchange Act Filings, except
as so disclosed.

 

(i)                                     Obligations to
Related Parties.

 

Except as set forth above it has no
obligations to its officers, directors, stockholders or employees other than:

 

(i) for
payment of salary for services rendered and for bonus payments;

 

(ii) reimbursement
for reasonable expenses incurred on its behalf;

 

(iii) for
other standard employee benefits made generally available to all employees; and

 

(iv) obligations
listed in its financial statements or to be disclosed in any of Company’s
Securities Act or Exchange Act Filings.

 

Except as described above, none of its
officers, directors or, to the best of its knowledge, key employees or
stockholders, or any members of their immediate families, are indebted to it,
individually or in the aggregate, in excess of $50,000 or have any direct or
indirect ownership interest in any Person with which it is affiliated or with
which it has a business relationship, or any Person which competes with it,
other than passive investments in publicly traded companies (representing less
than one percent (1%) of such company) which may compete with it. Except as
described above, none of its officers, directors or stockholders, or any member
of their immediate families, is, directly or indirectly, interested in any
material contract with it and no agreements, understandings or proposed
transactions are contemplated between it and any such Person. Except as set
forth above, it is not a guarantor or indemnitor of any indebtedness of any
other Person.

 

(j)                                     Changes.

 

Since December 31, 2004, except as
disclosed above, there has not been:

 

(i) any
change in its business, assets, liabilities, condition (financial or
otherwise), properties, operations or prospects, which, individually or in the
aggregate, has had, or could reasonably be expected to have, a Material Adverse
Effect;

 

(ii) any
resignation or termination of any of its officers, key employees or groups of
employees;

 

7

 

(iii) any
material change, except in the ordinary course of business, in its contingent
obligations by way of guaranty, endorsement, indemnity, warranty or otherwise;

 

(iv) any
damage, destruction or loss, whether or not covered by insurance, which has
had, or could reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect;

 

(v) any
waiver by it of a valuable right or of a material debt owed to it;

 

(vi) any
direct or indirect material loans made by it to any of its stockholders,
employees, officers or directors, other than advances made in the ordinary
course of business;

 

(vii) any
material change in any compensation arrangement or agreement with any employee,
officer, director or stockholder;

 

(viii) any
declaration or payment of any dividend or other distribution of its assets;

 

(ix) any
labor organization activity related to it;

 

(x) any debt,
obligation or liability incurred, assumed or guaranteed by it, except those for
immaterial amounts and for current liabilities incurred in the ordinary course
of business;

 

(xi) any sale,
assignment or transfer of any Intellectual Property or other intangible assets;

 

(xii) any
change in any material agreement to which it is a party or by which either it
is bound which, either individually or in the aggregate, has had, or could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect;

 

(xiii) any
other event or condition of any character that, either individually or in the
aggregate, has had, or could reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect; or

 

(k)                                  Title to Properties
and Assets; Liens, Etc.

 

Except as set forth above, it has good and
marketable title to its respective properties and assets, and good title to its
leasehold interests, in each case subject to no Lien, other than Permitted
Liens.

 

All facilities, Equipment, Fixtures, vehicles
and other properties owned, leased or used by it are in good operating
condition and repair and are reasonably fit and usable for the purposes for
which they are being used subject to normal wear and tear. The Company is in
compliance with all material terms of each lease to which it is a party or is
otherwise bound.

 

(I)                                    Intellectual
Property.

 

The Company holds a license from Dupont for
certain Intellectual Property related to the development and manufacture of the
FF-1080-300 aircraft, and certain related systems. Subject to the terms of such
license and related Employment Agreement:

 

(i)                                     It
owns or possesses sufficient legal rights to all Intellectual Property
necessary for its businesses as now conducted and, to its knowledge as
presently proposed to be conducted, without any known infringement of the
rights of others. There are no outstanding options, licenses or agreements of
any kind relating to its Intellectual Property, nor is it bound by or a party
to any options, licenses or agreements of any kind with respect to the
Intellectual Property of any other Person other than as set forth above.

 

(ii)                                  It
has not received any communications alleging that it has violated any of the
Intellectual Property or other proprietary rights of any other Person, nor is
it aware of any basis therefore.

 

8

 

(iii)                               It
does not believe it is or will be necessary to utilize any inventions, trade
secrets or proprietary information of any of its employees made prior to their
employment by it, except for inventions, trade secrets or proprietary
information that have been rightfully licensed or assigned to it.

 

(m)                               Compliance with Other
Instruments.

 

It is not in violation or default of any term
of its Charter or Bylaws, or any provision of any indebtedness, mortgage,
indenture, contract, agreement or instrument to which it is party or by which
it is bound or of any judgment, decree, order or writ, which violation or
default, in the case of this clause, has had, or could reasonably be expected
to have, either individually or in the aggregate, a Material Adverse Effect.
The execution, delivery and performance of and compliance with this Agreement,
and the issuance of the Shares and Warrants each pursuant hereto and thereto, will
not, with or without the passage of time or giving of notice, result in any
such material violation, or be in conflict with or constitute a default under
any such term or provision, or result in the creation of any Lien upon any of
its properties or assets or the suspension, revocation, impairment, forfeiture
or nonrenewal of any permit, license, authorization or approval applicable to
it, its businesses or operations or any of its assets or properties.

 

(n)                                 Litigation.

 

There is no action, suit, proceeding or
investigation pending or, to its knowledge, currently threatened against it
that prevents it from entering into this Agreement or from consummating the
transactions contemplated hereby or thereby, or which has had, or could
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect, or could result in any change in its current equity
ownership, nor is it aware that there is any basis to assert any of the
foregoing. It is not a party to or subject to the provisions of any order;
writ, injunction, judgment or decree of any court or government agency or
instrumentality.

 

(o)                                 Tax Returns and
Payments.

 

It has timely filed all tax returns (federal,
state and local) required to be filed by it. All taxes shown to be due and
payable on such returns, any assessments imposed, and all other taxes due and
payable by it on or before the Closing Date, have been paid or will be paid
prior to the time they become delinquent. It has not been advised:

 

(i) that
any of its returns, federal, state or other, have been or are being audited as
of the date hereof; or

 

(ii) of
any adjustment, deficiency, assessment or court decision in respect of its
federal, state or other taxes.

 

(p)                                 Registration Rights
and Voting Rights.

 

Trust has been advised that Company intends
to file a Form SB-2 registration statement with the Securities and
Exchange Commission covering 118,043,884 of its common shares held by
non-affiliated shareholders. Excepting this registration statement, Company has
not granted any rights to register any of its presently outstanding securities
or any of its securities that may hereafter be issued. 20,000,000 of the shares
to be registered are subject to a voting agreement that reserves to Dupont the
right to vote such shares until such time as they are sold.

 

(q)                                 Compliance with Laws;
Permits.

 

Company is not in violation of the
Sarbanes-Oxley Act of 2002, to the extent applicable, or any SEC related
regulation or rule or any other applicable statute, rule, regulation,
order or restriction of any domestic or foreign government or any
instrumentality or agency thereof in respect of the conduct of its

 

9

 

business or the ownership of its properties
which has had, or could reasonably be expected to have, either individually or
in the aggregate, a Material Adverse Effect. No governmental orders,
permissions, consents, approvals or authorizations are required to be obtained
and no registrations or declarations are required to be filed in connection
with the execution and delivery of this Agreement and the issuance of any of
the Shares or Warrants, except such as have been duly and validly obtained or
filed, or with respect to any filings that must be made after the Closing Date,
as will be filed in a timely manner. It has all material franchises, permits,
licenses and any similar authority necessary for the conduct of its business as
now being conducted by it, the lack of which could, either individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(r)                                    Environmental and
Safety Laws.

 

Company is not in violation of any applicable
statute, law or regulation relating to the environment or occupational health
and safety, and to its knowledge, no material expenditures are or will be
required in order to comply with any such existing statute, law or regulation.
Except in the ordinary course of its business, no Hazardous Materials (as
defined below) are used or have been used, stored, or disposed of by it or any
of its Subsidiaries or, to its knowledge, by any other Person on any property
owned, leased or used by it or any of its Subsidiaries. For the purposes of the
preceding sentence, “Hazardous Materials” shall mean:

 

(i) materials
which are listed or otherwise defined as “hazardous” or “toxic” under any
applicable local, state, federal and/or foreign laws and regulations that
govern the existence and/or remedy of contamination on property, the protection
of the environment from contamination, the control of hazardous wastes, or
other activities involving hazardous substances, including building materials;
and

 

(ii) any petroleum products or nuclear materials.

 

(s)                                  Valid
Offering.

 

Assuming the accuracy of the representations
and warranties of Trust contained in this Agreement, the offer and issuance of
the Shares and Warrants to Trust will be exempt from the registration
requirements of the Securities Act of 1933, as amended (the “Securities Act”),
and will have been registered or qualified (or are exempt from registration and
qualification) under the registration, permit or qualification requirements of
all applicable state securities laws.

 

(t)                                    Full Disclosure.

 

It has provided Trust with all information
requested in connection with Trust’s decision to enter into this Agreement,
including all information Company believes is reasonably necessary to make such
investment decision. To the best of Company’s knowledge, neither this Agreement
nor any other document delivered by it or its attorneys or agents in connection
herewith or therewith or with the transactions contemplated hereby or thereby,
contain any untrue statement of a material fact nor omit to state a material
fact necessary in order to make the statements contained herein or therein, in
light of the circumstances in which they are made, not misleading. Any
financial projections and other estimates provided to Trust by it were based on
its experience in the industry and on assumptions of fact and opinion as to
future events which it, at the date of the issuance of such projections or
estimates, believed to be reasonable and have been prepared in accordance with
the standards applicable to the preparation of projections for publicly traded
companies.

 

(u)                                 Insurance.

 

It has general commercial, product liability,
fire and casualty insurance policies with coverages that it believes are
customary for companies similarly situated to it in the same or similar
business.

 

(v)                                 No Integrated
Offering.

 

10

 

Neither Company nor any Person acting on its
or their behalf has directly or indirectly made any offers or sales of any
security or solicited any offers to buy any security under circumstances that
would cause the offering of the Shares and Warrants pursuant to this Agreement
to be integrated with prior offerings by it for purposes of the Securities Act
which would prevent it from issuing the Securities pursuant to Rule 506
under the Securities Act, or any applicable exchange-related stockholder
approval provisions, nor will it or any of its Affiliates take any action or
steps that would cause the offering of the Securities to be integrated with
other offerings.

 

(w)                               Stop Transfer.

 

The Shares and Warrants, and any shares
issued upon exercise of the Warrants, are or will be restricted securities as
of the date of this Agreement. Company will not issue any stop transfer order
or other order impeding the sale and delivery of any of the Shares, Warrants,
and any shares issued upon exercise of the Warrants, at such time as these
securities are registered for public sale or an exemption from registration is
available, except as required by state and federal securities laws.

 

(x)                                   Dilution.

 

Company specifically acknowledges that its
obligation to issue shares of common stock upon exercise of the Warrants is
binding and enforceable regardless of the dilution such issuance may have on
the ownership interests of other shareholders of Company.

 

(y)                                 Patriot Act.

 

Company certifies that, to the best of its
knowledge, it has not been designated, nor is or shall be owned or controlled,
by a “suspected terrorist” as defined in Executive Order 13224. It hereby
acknowledges that Trust seeks to comply with all applicable laws concerning
money laundering and related activities. In furtherance of those efforts, it
hereby represents, warrants and covenants that: (i) none of the cash or
property that it will pay or will contribute to Trust has been or shall be
derived from, or related to, any activity that is deemed criminal under United
States law; and (ii) no contribution or payment by it to Trust to the
extent that they are within its control shall cause Trust to be in violation of
the United States Bank Secrecy Act, the United States International Money
Laundering Control Act of 1986 or the United States International Money
Laundering Abatement and Anti-Terrorist Financing Act of 2001. It shall
promptly notify Trust if any of these representations, warranties and covenants
ceases to be true and accurate.

 

7.                                       Additional
Representations and Warranties.

 

Trust represents and warrants to Company as
follows:

 

(a)                                  Organization, Good
Standing and Qualification.

 

It is a trust duly organized, validly
existing and in good standing under the laws of its jurisdiction of the
Republic of Mauritius and, as the case may be, has the power and authority to
own and operate its properties and assets and, insofar as it is or shall be a
party thereto, to (i) execute and deliver this Agreement and any Ancillary
Agreements, (ii) to receive and hold the Shares, (iii) to receive and
hold the Warrants and the shares of common stock issuable upon conversion of
the Warrants, and to (iv) carry out the provisions of this Agreement and
any Ancillary Agreements and to carry on its business as presently conducted.

 

(b)                                 Authorization; Binding
Obligations.

 

All action
necessary for the authorization of this Agreement and any Ancillary Agreements,
the performance of all of its obligations hereunder on the Closing Date and the
receipt of the Shares and the Warrants has been taken or will be taken prior to
the Closing Date. This Agreement, when executed and delivered and to the extent
it is a party thereto, will be its valid and binding obligation enforceable in
accordance with the terms hereof, except:

 

11

 

(i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application affecting enforcement of creditors’ rights;
and

 

(ii) general
principles of equity that restrict the availability of equitable or legal
remedies.

 

(c)                                  Compliance with Other
Instruments.

 

It is not in violation or default of any term
of its Trust Agreement, or any provision of any indebtedness, mortgage,
indenture, contract, agreement or instrument to which it is party or by which
it is bound or of any judgment, decree, order or writ, which violation or
default, in the case of this clause, has had, or could reasonably be expected
to have, either individually or in the aggregate, a Material Adverse Effect.
The execution, delivery and performance of and compliance with this Agreement,
and the receipt of the Shares and Warrants each pursuant hereto and thereto,
will not, with or without the passage of time or giving of notice, result in
any such material violation, or be in conflict with or constitute a default
under any such term or provision, or result in the creation of any Lien upon
any of its properties or assets or the suspension, revocation, impairment,
forfeiture or nonrenewal of any permit, license, authorization or approval
applicable to it, its businesses or operations or any of its assets or
properties.

 

(d)                                 Patriot Act.

 

Trust certifies that, to the best of its
knowledge, it has not been designated, nor is or shall be owned or controlled,
by a “suspected terrorist” as defined in Executive Order 13224. It hereby
acknowledges that Company seeks to comply with all applicable laws concerning
money laundering and related activities. In furtherance of those efforts, it
hereby represents, warrants and covenants that: (i) none of the cash or
property that it will pay or will contribute to Company has been or shall be
derived from, or related to, any activity that is deemed criminal under United
States law; and (ii) no contribution or payment by Trust to Company to the
extent that they are within its control shall cause Company to be in violation
of the United States Bank Secrecy Act, the United States International Money
Laundering Control Act of 1986 or the United States International Money
Laundering Abatement and Anti-Terrorist Financing Act of 2001. It shall
promptly notify Company if any of these representations, warranties and
covenants ceases to be true and accurate.

 

(e)                                  Investment
Representations.

 

Trust understands that the Shares and
Warrants are being offered pursuant to an exemption from registration contained
in the Securities Act based in part upon Trust’s representations contained in
this Agreement, including, without limitation, that Trust is an “accredited
investor” within the meaning of Regulation D under the Securities Act. Trust
has received or has had full access to all the information it considers
necessary or appropriate to make an informed investment decision with respect
to the Shares and Warrants to be issued to it under this Agreement and the
shares to be acquired by it upon the exercise of the Notes.

 

(f)                                    Trust Bears
Economic Risk.

 

Trust has substantial experience in
evaluating and investing in private placement transactions of securities in
companies similar to Company so that it is capable of evaluating the merits and
risks of its investment in Company and has the capacity to protect its own
interests. Trust must bear the economic risk of this investment until the
Shares, Warrants or shares issuable upon exercise of the Warrants are sold
pursuant to (i) an effective registration statement under the Securities
Act, or (ii) an exemption from registration is available.

 

(g)                                 Investment for Own
Account.

 

The Shares and Warrants are being issued to
Trust for its own account for investment only, and not as a nominee or agent
and not with a view towards or for resale in connection with their
distribution, except as

 

12

 

provided herein.

 

(h)                                 Trust Can Protect Its
Interest.

 

Trust represents that by reason of its, or of
its management’s, business and financial experience, it has the capacity to
evaluate the merits and risks of its investment in the Shares and Warrants and
to protect its own interests in connection with the transactions contemplated
in this Agreement. Further, Trust is aware of no publication of any
advertisement in connection with the transactions contemplated in the
Agreement.

 

(i)                                     Accredited
Investor.

 

Trust represents that it is an accredited
investor within the meaning of Regulation D under the Securities Act.

 

(j)                                     Shorting.

 

Neither Trust nor any of its Affiliates or
investment partners has, will, or will cause any Person, to directly engage in “short
sales” of Company’s common stock as long as any portion of the total funding
amount remains outstanding.

 

8.                                       Term of the
Agreement.

 

Trust’s agreement to exercise the Warrants
and otherwise extend financial accommodations under and in accordance with the
terms of this Agreement shall continue in full force and effect until the
expiration of the Term, 720 days from execution, unless such term is extended
by agreement of the parties. At Company’s election following the occurrence of
an Event of Default by reason of a failure of the funding obligation, Company
may terminate this Agreement, and demand return of all Shares and
unexercised Warrants, along with any dividend paid on such returned
Shares. The termination of the Agreement shall not affect any of Trust’s or
Company’s rights hereunder or any Ancillary Agreement and the provisions hereof
and thereof shall continue to be fully operative until all transactions entered
into, rights or interests created and the Obligations have been irrevocably
disposed of, concluded or liquidated.

 

8.                                       Events of
Default.

 

The occurrence of any of the following shall
constitute an “Event of Default”:

 

(a)                                  Failure by the Trust
to make payment of any of the Obligations by exercise of the Warrants necessary
to provide the minimum funding requirement by the 540th day following execution of
this Agreement, and such failure shall continue for a period of three (3) days
following the date upon which any such payment was due.

 

(b)                                 Failure by Company to
pay any taxes when due unless such taxes are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves are
promptly provided on Company’s books.

 

(c)                                  Failure to perform
under, and/or committing any breach of, in any material respect, this Agreement
or any covenant contained herein, which failure or breach shall continue
without remedy for a period of thirty (30) days after the occurrence thereof.

 

(d)                                 Any representation,
warranty or statement made by Company or Trust in any certificate, statement or
document delivered pursuant to the terms hereof, or in connection with the
transactions contemplated by this Agreement should prove to be false or
misleading in any material respect on the date as of which made or deemed made.

 

(e)                                  Attachments or levies
in excess of $ 100,000 in the aggregate are made upon Company’s assets or a
judgment is rendered against any Company’s property involving a liability of
more than $100,000 which

 

13

 

shall not have been vacated, discharged,
stayed or bonded within thirty (30) days from the entry thereof.

 

(f)                                    Any change in any
Company’s condition or affairs (financial or otherwise) which in Trust’s reasonable,
good faith opinion, could reasonably be expected to have a Material Adverse
Effect;

 

(g)                                 Company shall (i) apply
for, consent to or suffer to exist the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of itself or of all
or a substantial part of its property, (ii) make a general assignment for
the benefit of creditors, (iii) commence a voluntary case under the
federal bankruptcy laws (as now or hereafter in effect), (iv) be
adjudicated a bankrupt or insolvent, (v) file a petition seeking to take
advantage of any other law providing for the relief of debtors, (vi) acquiesce
to without challenge within ten (10) days of the filing thereof, or
failure to have dismissed within forty-five (45) days, any petition filed
against it in any involuntary case under such bankruptcy laws, or (vii) take
any action for the purpose of effecting any of the foregoing.

 

(h)                                 Company shall admit in
writing its inability, or be generally unable, to pay its debts as they become
due or cease operations of its present business.

 

(i)                                     Company directly
or indirectly sells, assigns, transfers, conveys, or suffers or permits to
occur any assignment, transfer or conveyance of any assets of Company or any
interest therein, except as permitted herein. 

 

(j)                                     The occurrence of (i) a
change in the controlling ownership of Company or (ii) the departure of either
Dupont or Boland from senior management of the Company; provided that, an Event
of Default under clause (j)(ii) shall not arise solely as a result of the
departure of either Dupont or Boland to the extent a successor thereto,
reasonably satisfactory to Trust, shall be appointed within ninety (90) days
thereof.

 

(k)                                  The indictment or
threatened indictment of Company or any executive officer of Company under any
criminal statute, or commencement or threatened commencement of criminal or
civil proceeding against Company or any executive officer of Company pursuant to
which statute or proceeding penalties or remedies sought or available include
forfeiture of any of the property of Company to the extent, in the case of
civil proceedings only, such forfeiture could reasonably be expected to result
in a Material Adverse Effect.

 

(l)                                     Company’s attempt
to terminate, challenges the validity of, or its liability under this Agreement
or any Ancillary Agreement, or any proceeding shall be brought to challenge the
validity, binding effect of any Ancillary Agreement or any Ancillary Agreement
ceases to be a valid, binding and enforceable obligation of Company (to the
extent such Persons are a party thereto).

 

(m)                               An SEC stop trade order
or trading suspension of the Common Stock shall be in effect for twenty (20)
consecutive days, excluding in all cases a suspension of all trading in the
trading markets, provided that Company shall not have been able to cure such
trading suspension within thirty (30) days of the notice thereof or list the
Common Stock on another principal market within sixty (60) days of such notice.

 

(n)                                 Company’s failure to
deliver common stock to Trust pursuant to and in the form required by the
Warrants and this Agreement, if such failure to deliver common stock shall not
be cured within two (2) Business Days.

 

10.                                 Remedies.

 

Following the occurrence and during the
continuance of an Event of Default, Company shall have the right to demand
repayment in full of all Obligations, whether or not otherwise due, and return
of all Shares and unexercised Warrants. Trust shall have, in addition to all
other rights provided herein and in each Ancillary Agreement, the rights and
remedies for breach, including for specific performance by delivery of shares
to be issued upon exercise of the Warrants under other applicable law, all
other legal and equitable rights to which Trust may be entitled, including the
right to take immediate possession of any Shares necessary to effect the
exercise. Trust further reserves the right to apply for the appointment of a
receiver for Company

 

14

 

or its property.

 

11.                                 Waivers.

 

To the full extent permitted by applicable
law, Company hereby waives (a) presentment, demand and protest, and notice
of presentment, dishonor, intent to accelerate, acceleration, protest, default,
nonpayment, maturity, release, compromise, settlement, extension or renewal of
any or all of this Agreement and any Ancillary Agreements or any other notes,
commercial paper, Accounts, contracts, Documents, Instruments, Chattel Paper
and guaranties at any time held by Trust on which Company may in any way be
liable, and hereby ratifies and confirms whatever Trust may do in this regard; (b) all
rights to notice and a hearing prior to Trust taking possession or control of
any Shares in equal amounts to any validly exercised Warrants; and (c) the
benefit of all valuation, appraisal and exemption laws. Company acknowledges
that it has been advised by counsel of its choices and decisions with respect
to this Agreement and the transactions evidenced hereby and thereby.

 

12.                                 Expenses.

 

Each party shall bear its own out-of-pocket
costs and expenses, including reasonable fees and disbursements of in-house or
outside counsel and appraisers, in connection with the preparation, execution
and delivery of this Agreement, and in connection with the prosecution or
defense of any action, contest, dispute, suit or proceeding concerning any
matter in any way arising out of, related to or connected with this Agreement
or any Ancillary Agreement. The parties shall each pay actual charges for all
bank related services (including wire transfers) performed or caused to be
performed by either of them, but Company shall be responsible for any fees
charged by its Transfer Agent in connection with its compliance with the terms
of this Agreement. If any tax by any Governmental Authority is or may be
imposed on or as a result of any transaction between any Company and Trust, the
parties each agree to pay such amounts as may be imposed or levied.

 

13.                                 Assignment By Trust.

 

Without consent of Company, Trust may not
transfer or assign the Warrants, or suffer the Shares to any manner of
hypothecation.

 

14.                                 No Waiver; Cumulative
Remedies.

 

Failure by Trust or Company to exercise any
right, remedy or option under this Agreement, any Ancillary Agreement or any
supplement hereto or thereto or any other agreement between or among Company
and Trust or delay by either of them in exercising the same, will not operate
as a waiver. No waiver will be effective unless it is in writing and then only
to the extent specifically stated. The parties’ rights and remedies under this
Agreement and any Ancillary Agreements will be cumulative and not exclusive of
any other right or remedy which either of them may have.

 

15.                                 Indemnity.

 

Each party Company hereby jointly and
severally indemnify and hold the other, and its respective affiliates,
employees, attorneys and agents (each, an “Indemnified Person”), harmless from
and against any and all suits, actions, proceedings, claims, damages, losses, liabilities
and expenses of any kind or nature whatsoever (including reasonable attorneys’
fees and disbursements and other costs of investigation or defense, including
those incurred upon any appeal) which may be instituted or asserted against or
incurred by any such Indemnified Person as the result of the other’s failure
with respect to the execution, delivery, enforcement, performance and
administration of, or in any other way arising out of or relating to, this
Agreement, any Ancillary Agreements or any other documents or transactions
contemplated by or referred to herein or therein and any actions or failures to
act with respect to any of the foregoing, except to the extent that any such
indemnified liability is finally determined by a court of competent
jurisdiction to have resulted solely from such Indemnified Person’s gross
negligence or willful misconduct. NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR
LIABLE TO ANY COMPANY OR TO ANY

 

15

 

OTHER PARTY OR TO ANY SUCCESSOR, ASSIGNEE OR
THIRD PARTY BENEFICIARY OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY
THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES
WHICH MAY BE ALLEGED AS A RESULT OF CREDIT HAVING BEEN EXTENDED, SUSPENDED
OR TERMINATED UNDER THIS AGREEMENT OR ANY ANCILLARY AGREEMENT OR AS A RESULT OF
ANY OTHER TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER.

 

16.                                 Revival.

 

The parties agree that to the extent any
delivery of securities or compliance with a funding obligation that is
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under
any bankruptcy act, state or federal law, common law or equitable cause, then,
to the extent of such payment or repayment, the obligation or part thereof
intended to be satisfied shall be revived and continued in full force and
effect as if said delivery or payment had not been made.

 

29. Notices. Any notice or request hereunder
may be given to Company, Company Agent or Trust at the respective addresses set
forth below or as may hereafter be specified in a notice designated as a change
of address under this Section. Any notice or request hereunder shall be given
by registered or certified mail, return receipt requested, hand delivery,
overnight mail or telecopy (confirmed by mail). Notices and requests shall be,
in the case of those by hand delivery, deemed to have been given when delivered
to any officer of the party to whom it is addressed, in the case of those by
mail or overnight mail, deemed to have been given three (3) Business Days
after the date when deposited in the mail or with the overnight mail carrier,
and, in the case of a telecopy, when confirmed.

 

Notices shall be provided as follows:

 

	
  If to Trust:

  	
   

  	
  PacifiCorp Funding Partners Trust

  
	
   

  	
   

  	
  c/o 40 Gerard Street

  
	
   

  	
   

  	
  London, England W1V 7 LP

  
	
   

  	
   

  	
  Attention: Fergus Anstock, Esq.

  
	
   

  	
   

  	
  Telephone:

  	
  +44(0)20 7287 5688

  	 

	
   

  	
   

  	
  Telecopier:

  	
  +44(0)14 8171 3112

  	 

	
   

  	
   

  	
   

  
	
  If to any Company, or

  	
   

  	
   

  	 

	
  Company Agent:

  	
   

  	
  c/o Utilicraft
  Aerospace Corp.

  	 

	
   

  	
   

  	
  554 Briscoe Boulevard

  	 

	
   

  	
   

  	
  Lawrenceville, GA 30045

  	 

	
   

  	
   

  	
  Attention:

  	
  John J. Dupont

  	 

	
   

  	
   

  	
   

  	
  R. Darby Boland

  	 

	
   

  	
   

  	
  Telephone:

  	
  (678) 376-0898

  	 

	
   

  	
   

  	
  Facsimile:

  	
  (678) 376-9093

  	 

	
   

  	
   

  	
   

  	 

	
  With a copy to:

  	
   

  	
  Phillip W. Offill, JR.

  	 

	
   

  	
   

  	
  Godwin Gruber LLP

  	 

	
   

  	
   

  	
  1201 Elm St., 17th
  Fl.

  	 

	
   

  	
   

  	
  Dallas, TX 75270

  	 

	
   

  	
   

  	
  Telephone:

  	
  (214) 939-4469

  	 

	
   

  	
   

  	
  Facsimile:

  	
  (214) 760-7332

  	 

 

or such other address as may be designated in
writing hereafter in accordance with this Section 16 by such

 

16

 

Person.

 

17. Governing Law, Jurisdiction and Waiver of
Jury Trial.

 

(a)       THIS AGREEMENT AND THE
ANCILLARY AGREEMENTS SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA APPLICABLE TO CONTRACTS MADE AND
PERFORMED IN SUCH STATE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

 

(b)      EACH COMPANY HEREBY CONSENTS
AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN LAS VEGAS, CLARK COUNTY,
NEVADA SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR
DISPUTES BETWEEN ANY COMPANY, ON THE ONE HAND, AND LAURUS, ON THE OTHER HAND,
PERTAINING TO THIS AGREEMENT OR ANY OF THE ANCILLARY AGREEMENTS OR TO ANY
MATTER ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OF THE ANCILLARY
AGREEMENTS; PROVIDED, THAT LAURUS AND EACH COMPANY ACKNOWLEDGE THAT ANY APPEALS
FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF THE
COUNTY OF NEW YORK, STATE OF NEW YORK; AND FURTHER PROVIDED, THAT NOTHING IN
THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE LAURUS FROM BRINGING SUIT
OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO COLLECT THE
OBLIGATIONS, TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF LAURUS.
EACH COMPANY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN
ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH COMPANY HEREBY WAIVES
ANY OBJECTION THAT IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION,
IMPROPER VENUE OR FORUM NON- CONVENIENS. EACH COMPANY HEREBY WAIVES PERSONAL
SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION
OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE
MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO COMPANY AGENT AT THE ADDRESS
SET FORTH IN SECTION 16 AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED
UPON THE EARLIER OF COMPANY AGENT’S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS
AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID.

 

(c)       THE PARTIES DESIRE THAT
THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE,
TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION,
SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER ARISING IN
CONTRACT, TORT, OR OTHERWISE BETWEEN LAURUS, AND/OR ANY COMPANY ARISING OUT OF,
CONNECTED WITH, RELATED OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN
THEM IN CONNECTION WITH THIS AGREEMENT, ANY ANCILLARY AGREEMENT OR THE
TRANSACTIONS RELATED HERETO OR THERETO.

 

18.                                 Limitation of
Liability.

 

Company and Trust acknowledge and understand
that in order to assure payment of the Obligations hereunder Trust may be
required to exercise any and all of its rights and remedies hereunder and agree
that, except as limited by applicable law, neither Trust nor any of Trust’s
agents shall be liable for acts taken or omissions made in connection herewith
or therewith except for actual bad faith.

 

19.                                 Entire Understanding;
Maximum Interest.

 

This Agreement and any Ancillary Agreements
contain the entire understanding among between Company and Trust as to the
subject matter hereof and thereof and any promises, representations, warranties
or guarantees not herein contained shall have no force and effect unless in
writing, signed by Company’s and

 

17

 

Trust’s respective officers. Neither this
Agreement, any Ancillary Agreements, nor any portion or provisions thereof may
be changed, modified, amended, waived, supplemented, discharged, cancelled or
terminated orally or by any course of dealing, or in any manner other than by
an agreement in writing, signed by the parry to be charged. Nothing contained in
this Agreement, any Ancillary Agreement or in any document referred to herein
or delivered in connection herewith shall be deemed to establish or require the
payment of a rate of interest or other charges in excess of the maximum rate
permitted by applicable law.

 

20.                                 Severability.

 

Wherever possible each provision of this
Agreement or any Ancillary Agreements shall be interpreted in such manner as to
be effective and valid under applicable law, but if any provision of this
Agreement or the Ancillary Agreements shall be prohibited by or invalid under
applicable law such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions thereof.

 

21.                                 Survival.

 

The representations, warranties, covenants
and agreements made herein shall survive any investigation made by Company or
Trust and the closing of the transactions contemplated hereby to the extent
provided therein. All statements as to factual matters contained in any
certificate or other instrument delivered by or on behalf of Company or Trust
pursuant hereto in connection with the transactions contemplated hereby shall
be deemed to be representations and warranties by Company or Trust hereunder
solely as of the date of such certificate or instrument. All indemnities set
forth herein shall survive the execution, delivery and termination of this
Agreement and any Ancillary Agreements and the making and payment of the
Obligations.

 

22.                                 Captions.

 

All captions are and shall be without substantive
meaning or content of any kind whatsoever.

 

23.                                 Counterparts;
Telecopier Signatures.

 

This Agreement may be executed in one or more
counterparts, each of which shall constitute an original and all of which taken
together shall constitute one and the same agreement. Any signature delivered
by a party via telecopier transmission shall be deemed to be any original
signature hereto.

 

24.                                 Construction.

 

The parties acknowledge that each party and
its counsel have reviewed this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement or
any amendments, schedules or exhibits thereto.

 

25.                                 Publicity.

 

Trust hereby authorizes Company to make
appropriate announcements of the financial arrangement entered into by and
between Company and Trust, including, without limitation, announcements which
are commonly known as tombstones, in such publications and to such selected
parties as Company shall in its sole and absolute discretion deem appropriate,
or as required by applicable law.

 

26.                                 Legends.

 

The Shares, Warrants and any shares issued
upon execution of the Warrants shall bear legends as follows;

 

(a) The Warrants shall bear
substantially the following legend:

 

“THIS WARRANT AND THE COMMON STOCK ISSUABLE
UPON EXERCISE OF THIS

 

18

 

WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE, STATE SECURITIES LAWS.
THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THE WARRANT MAY NOT
BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE OR SUCH SHARES UNDER SAID ACT
AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO UTILICRAFT AEROSPACE CORP. THAT SUCH REGISTRATION IS NOT
REQUIRED.”

 

(B) The Shares shall bear substantially
the following legend:

 

“THESE COMMON SHARES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE
SECURITIES LAWS. THESE COMMON SHARES MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
AS TO THESE COMMON SHARES UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS
OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO UTILICRAFT AEROSPACE CORP.
THAT SUCH REGISTRATION IS NOT REQUIRED.”

 

[Balance of page intentionally left
blank; signature page follows.]

 

19

 

IN WITNESS WHEREOF, the parties have executed
this Master Financing Agreement as of the date first written above.

 

 

	
   

  	
   

  	
  UTILICRAFT AEROSPACE CORP.

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ John J. Dupont

  	
   

  
	
   

  	
  Name: John J. Dupont

  
	
   

  	
  Title: President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  PACIFICORP FUNDING PARTNERS TRUST

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
  Name: Fergus Anstock

  
	
   

  	
  Title: Trustee/Protector

  
						

 

20

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