Document:

Exhibit 10.44

 

 

SHORT TERM

 

LEASE AGREEMENT

 

by and between

 

INDIANAPOLIS AIRPORT AUTHORITY

 

and

 

CHAUTAUQUA AIRLINES, INC.

 

Dated as of December 17, 2004

 

 

Index to IMC Lease Agreement

 

	
  ARTICLE
  I – DEFINITIONS

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  II – LEASE OF LEASED PREMISES; OWNERSHIP OF IMPROVEMENTS AND EQUIPMENT; USE
  OF LEASED PREMISES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 201

  	
  LEASE OF LEASED PREMISES

  	
   

  
	
  SECTION 202

  	
  OWNERSHIP OF
  IMPROVEMENTS AND EQUIPMENT

  	
   

  
	
  SECTION 203

  	
  CONDITION OF LEASED PREMISES

  	
   

  
	
  SECTION 204

  	
  USE OF LEASED
  PREMISES; PROHIBITED USES

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  III – REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 301

  	
  REPRESENTATIONS
  AND WARRANTIES BY AUTHORITY

  	
   

  
	
  SECTION 302

  	
  REPRESENTATIONS,
  WARRANTIES AND COVENANTS BY TENANT

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IV – INTENTIONALLY DELETED

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 401

  	
  INTENTIONALLY DELETED

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  V – TERM; EXTENSION PERIODS; TERMINATION RIGHT

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 501

  	
  TERM

  	
   

  
	
  SECTION 502

  	
  HOLDING
  OVER

  	
   

  
	
  SECTION 503

  	
  RIGHT TO
  TERMINATE UPON CERTAIN EVENTS

  	
   

  
	
  SECTION 504

  	
  RIGHTS AT EXPIRATION

  	
   

  
	
  SECTION 505

  	
  INTENTIONALLY DELETED

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VI – RENTALS, FEES AND RECORDS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 601

  	
  RENTAL

  	
   

  
	
  SECTION 602

  	
  FIELD USE CHARGE

  	
   

  
	
  SECTION 603

  	
  TIME AND PLACE OF PAYMENTS

  	
   

  
	
  SECTION 604

  	
  DELINQUENT RENTALS.

  	
   

  
	
  SECTION 605

  	
  INTENTIONALLY DELETED

  	
   

  
	
  SECTION 606

  	
  OBLIGATIONS
  OF TENANT HEREUNDER UNCONDITIONAL.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VII – OBLIGATIONS OF TENANT

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 701

  	
  PAYMENT OF RENTAL
  AND OTHER AMOUNTS

  	
   

  
	
  SECTION 702

  	
  OPERATION AND USE
  OF LEASED PREMISES

  	
   

  
	
  SECTION 703

  	
  TRASH,
  GARBAGE, AND OTHER REFUSE; OUTSIDE STORAGE

  	
   

  
	
  SECTION 704

  	
  LICENSES AND PERMITS

  	
   

  
	
  SECTION 705

  	
  HAZARDOUS MATERIALS

  	
   

  
	
  SECTION 706

  	
  SIGNS

  	
   

  
	
  SECTION 707

  	
  RULES AND REGULATIONS

  	
   

  
	
  SECTION 708

  	
  TAXES

  	
   

  
	
  SECTION 709

  	
  INTENTIONALLY DELETED

  	
   

  
	
  SECTION 710

  	
  NONDISCRIMINATION

  	
   

  
	
  SECTION 711

  	
  CIVIL
  RIGHTS

  	
   

  
	
  SECTION 712

  	
  AFFIIRMATIVE ACTION

  	
   

  
	
  SECTION 713

  	
  OBSERVANCE OF STATUTES

  	
   

  
	
  SECTION 714

  	
  HAZARD LIGHTS

  	
   

  
	
  SECTION 715

  	
  LIENS

  	
   

  
	
  SECTION 716

  	
  TENANT
  TO MAINTAIN ITS ORGANIZATIONAL EXISTENCE

  	
   

  
	
  SECTION 717

  	
  ADVANCES BY AUTHORITY

  	
   

  
	
  SECTION 718

  	
  WAIVER OF PARTITION

  	
   

  

 

2

 

	
  ARTICLE
  VIII – OBLIGATIONS OF AUTHORITY

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 801

  	
  INGRESS AND EGRESS

  	
   

  
	
  SECTION 802

  	
  QUIET ENJOYMENT
  OF THE LEASED PREMISES

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IX – COMPLIANCE WITH SECURITY REQUIREMENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 901

  	
  SECURITY AGREEMENT

  	
   

  
	
  SECTION 902

  	
  SECURITY
  RULES AND REGULATIONS OF AUTHORITY, FAA AND TSA

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  X – MAINTENANCE, REPAIRS AND REPLACEMENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1001

  	
  MAINTENANCE,
  REPAIRS AND REPLACEMENTS TO LEASED PREMISES AND FACILITIES

  	
   

  
	
  SECTION 1002

  	
  MAINTENANCE
  REPAIRS AND REPLACEMENTS OF AND TO EQUIPMENT

  	
   

  
	
  SECTION 1003

  	
  PROMPT
  NOTIFICATION OF DAMAGE, DEFECTS OR MALFUNCTION

  	
   

  
	
  SECTION 1004

  	
  ACCESS TO LEASED PREMISES

  	
   

  
	
  SECTION 1005

  	
  INVENTORY OF
  EQUIPMENT AT LEASED PREMISES

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XI – FACILITIES OPERATIONS AND SERVICES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1101

  	
  SERVICES

  	
   

  
	
  SECTION 1102

  	
  AUTHORITY NOT
  LIABLE FOR MALFUNCTIONS

  	
   

  
	
  SECTION 1103

  	
  ENERGY AND UTILITY
  CONSERVATION

  	
   

  
	
  SECTION 1104

  	
  REIMBURSEMENT OF TENANT

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XII – INTENTIONALLY DELETED

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XIII – AUTHORITY’S RESERVATIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1301

  	
  IMPROVEMENT,
  RELOCATION OR REMOVAL

  	
   

  
	
  SECTION 1302

  	
  INSPECTION OF LEASED
  PREMISES

  	
   

  
	
  SECTION 1303

  	
  SUBORDINATION TO U.S.
  GOVERNMENT

  	
   

  
	
  SECTION 1304

  	
  WAR OR NATIONAL EMERGENCY

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XIV – COMMON AREAS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1401

  	
  DEFINITION

  	
   

  
	
  SECTION 1402

  	
  TENANT’S USE OF COMMON
  AREAS

  	
   

  
	
  SECTION 1403

  	
  MAINTENANCE

  	
   

  
	
  SECTION 1404

  	
  RESERVATION OF RIGHTS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XV – INSURANCE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1501

  	
  AUTHORITY’S INSURANCE

  	
   

  
	
  SECTION 1502

  	
  TENANT’S INSURANCE

  	
   

  
	
  SECTION 1503

  	
  APPLICATION OF
  INSURANCE PROCEEDS

  	
   

  
	
  SECTION 1504

  	
  RELEASE AND WAIVER OF
  SUBROGATION

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XVI – CASUALTY DAMAGE AND CONDEMNATION

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1601

  	
  DAMAGE BY CASUALTY

  	
   

  
	
  SECTION 1602

  	
  CONDEMNATION

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XVII – GENERAL INDEMNITY

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1701

  	
  INDEMNITY

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XVIII – EVENTS OF DEFAULT BY AUTHORITY

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1801

  	
  EVENTS OF DEFAULT BY
  AUTHORITY

  	
   

  
	
  SECTION 1802

  	
  REMEDIES OF TENANT ON
  DEFAULT

  	
   

  
	
  SECTION 1803

  	
  NO
  ADDITIONAL WAIVER IMPLIED BY ONE WAIVER; CONSENTS TO WAIVER

  	
   

  
	
  SECTION 1804

  	
  DELAY NOT A WAIVER

  	
   

  

 

3

 

	
  ARTICLE
  XIX – EVENTS OF DEFAULT BY TENANT

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1901

  	
  EVENTS OF DEFAULT BY TENANT

  	
   

  
	
  SECTION 1902

  	
  CERTAIN
  REMEDIES OF THE AUTHORITY ON RENTAL DEFAULT

  	
   

  
	
  SECTION 1903

  	
  ADDITIONAL
  REMEDIES OF AUTHORITY ON DEFAULT

  	
   

  
	
  SECTION 1904

  	
  TENANT TO
  REMAIN LIABLE FOR PAYMENTS; RELETTING

  	
   

  
	
  SECTION 1905

  	
  INTENTIONALLY DELETED

  	
   

  
	
  SECTION 1906

  	
  NO REMEDY EXCLUSIVE

  	
   

  
	
  SECTION 1907

  	
  NO
  ADDITIONAL WAIVER IMPLIED BY ONE WIAVER; CONSENTS TO WAIVER

  	
   

  
	
  SECTION 1908

  	
  WAIVER OF STATUTORY
  NOTICE TO QUIT

  	
   

  
	
  SECTION 1909

  	
  INTENTIONALLY
  DELETED

  	
   

  
	
  SECTION 1910

  	
  SUSPENSION OF LEASE
  AGREEMENT

  	
   

  
	
  SECTION 1911

  	
  DELAY NOT A WAIVER

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XX – RIGHTS UPON TERMINATION

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2001

  	
  IMPROVEMENTS

  	
   

  
	
  SECTION 2002

  	
  EXCLUDED PROPERTY

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XXI – ASSIGNMENT AND SUBLETTING

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2101

  	
  SUBLEASES AND ASSIGNMENTS

  	
   

  
	
  SECTION 2102

  	
  SUBLETTING

  	
   

  
	
  SECTION 2103

  	
  MORTGAGES,
  LIENS, AND SECURITY INTERESTS PROHIBITED

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XXII – GENERAL PROVISIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2201

  	
  NON-INTERFERENCE
  WITH OPEERATION OF AIRPORT

  	
   

  
	
  SECTION 2202

  	
  BINDING
  UPON SUCCESSORS AND ASSIGNS; NO INTENT TO BENEFIT THIRD PARTIES

  	
   

  
	
  SECTION 2203

  	
  ENTIRE AGREEMENT;
  AMENDMENTS

  	
   

  
	
  SECTION 2204

  	
  WAIVER

  	
   

  
	
  SECTION 2205

  	
  SECTION HEADINGS

  	
   

  
	
  SECTION 2206

  	
  GOVERNING LAW;
  INTERPRETATION

  	
   

  
	
  SECTION 2207

  	
  RELATIONSHIP

  	
   

  
	
  SECTION 2208

  	
  NOTICES

  	
   

  
	
  SECTION 2209

  	
  COUNTERPARTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNATURE
  PAGE

  	
   

  

 

4

 

LEASE AGREEMENT

 

THIS LEASE
AGREEMENT (hereinafter called this “Lease Agreement” or this “Lease”) is made
and entered into as of the 17th day of December, 2004, by and
between the INDIANAPOLIS AIRPORT AUTHORITY, a municipal corporation existing
under and by virtue of the laws of the State of Indiana (“Authority”), and
Chautauqua Airlines, Inc. with its principal office at Indianapolis, IN, an
Indiana corporation (“Tenant”).

 

WITNESSETH THAT:

 

WHEREAS, the
Authority owns and operates the Airport; and

 

WHEREAS, the
Authority owns and holds a leasehold interest in the Site and the Facilities
that have been developed on the Site; and

 

WHEREAS, the
Authority shall lease to Tenant pursuant to this Lease Agreement the leasehold
interests of the Authority in the Leased Premises, which constitute a portion
of the Site and Facilities; and

 

WHEREAS,
Tenant is primarily engaged in the business of transporting passengers and
providing aircraft maintenance, repair and overhaul services to its own
aircraft; and

 

WHEREAS,
Tenant desires to lease the Leased Premises upon the terms and conditions hereinafter
stated:

 

NOW,
THEREFORE, in consideration of the mutual covenants and payments herein
contained, the Authority and Tenant hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 101.                                Definitions.  In addition to terms specifically defined
elsewhere in this Lease Agreement, the following terms, for the purposes of
this Lease Agreement, shall have the meanings set forth below:

 

“145
Certificate” has the meaning set forth in Section 302(G) of this Lease.

 

“Act” means
Indiana Code 8-22-3, as amended.

 

“Affiliate”
means any entity, directly or indirectly, controlled by, controlling, or under
common control with Tenant.

 

“Air
Operations Area” means any portion of the Airport designed and used for
landing, taking off, or surface maneuvering of airplanes.

 

“Airport”
means the Indianapolis International Airport.

 

“Airport
Director” means the Airport Director of the Airport.

 

5

 

“Authority”
means the Indianapolis Authority, a municipal corporation duly organized and
operating under the laws of the State, including the Act, or any successor
thereto or assignee thereof.

 

“BAA” means
BAA Indianapolis LLC, an Indiana limited liability company.

 

“BAA USA”
means BAA USA (Holdings), Inc., a Delaware corporation.

 

“Business”
means the maintenance by Tenant and/or Tenant’s
employees, agents or contractors of aircraft owned or operated by Tenant.

 

“Casualty” has
the meaning set forth in Section 1601(A)(1) of this Lease.

 

“Change of
Control” has the meaning set forth in Section 2101(B) of this Lease.

 

“Claims” has
the meaning set forth in Section 1403 of this Lease.

 

“Commission”
means the Metropolitan Development Commission of Marion County, Indiana, acting
as the Redevelopment Commission of the City of Indianapolis, Indiana.

 

“Common Area”
has the meaning set forth in Section 1401 of this Lease.

 

“Condemnation”
has the meaning set forth in Section 1602(A) of this Lease.

 

“DOT” means
the United States Department of Transportation.

 

“Effective
Date” means December 17, 2004.

 

“Entity” means
any corporation, partnership, limited partnership, limited liability
partnership, joint venture, association, limited liability company, joint-stock
company, trust, or other entity or unincorporated association, or any
Governmental Entity.

 

“Environmental
Laws” means and shall include, but not be limited to, the Comprehensive
Environmental Response, Compensation and Liability Act, the Solid Waste
Disposal Act, the Occupational Safety and Health Act, the Federal Water
Pollution Control Act, the Clean Air Act, the Safe Drinking Water Act, the
Toxic Substances Control Act, the Refuse Act, the Hazardous Materials
Transportation Act, the Emergency Planning and Community Right-to-Know Act, the
Federal Insecticide, Fungicide and Rodenticide Act, the Endangered Species Act,
the National Environmental Policy Act, the Indiana Air and Water Pollution
Control Law, the Indiana Groundwater Protection Act, the Indiana Hazardous
Waste Law, the Indiana Underground Storage Tanks Act, the Indiana Wastewater
Management Law, the Indiana Fish and Wildlife Act, the Indiana Flood Control
Act, and the Indiana Environmental Policy Act, and any amendments or
supplements thereto or rules or regulations promulgated pursuant thereto or in
connection therewith.

 

“Environment,
Health and Safety Requirements” means all of the terms and conditions of all
permits, licenses, and other authorizations which are required under, and all
other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules, and

 

6

 

timetables
which are contained in, any and all Laws relating to public health and safety,
worker health and safety, or pollution or protection of the environment,
including without limitation Laws relating to emissions, discharges, releases,
or threatened releases of Hazardous Materials into ambient air, surface water,
ground water, or lands, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
Hazardous Materials.

 

“Equipment”
means any equipment, fixtures, permanent inventory, or tangible personal
property, including, without limitation, the types of equipment, fixtures,
permanent inventory or tangible personal property made available by the
Authority to Tenant, including but not limited to those items set forth by an
Addendum hereto, whether now owned or hereafter acquired, as the same shall be
substituted or replaced from time to time in accordance with Article X and products
and proceeds thereof.

 

“Event of
Default” means, with respect to Tenant, any of the Events of Default set forth
in Section 1901 hereof and, with respect to the Authority, any of the Events of
Default set forth in Section 1801 hereof.

 

“Event of Force
Majeure” means any delays due to adverse weather conditions, strikes,
unavailability of labor or materials, acts of God, acts of war, invasion,
terrorism, riots, civil commotion or vandalism, actions or inactions of
Governmental Entities, or any other cause outside of the reasonable control of
the party claiming delays.

 

“Excluded
Property” means the equipment, removable fixtures (subject to Tenant’s
obligation to restore the Leased Premises), permanent inventory or tangible
personal property of Tenant acquired and installed into the Facilities or
otherwise located on the Leased Premises, as set forth by an Addendum hereto.

 

“FAA” means
the Federal Aviation Administration.

 

“Facility” or “Facilities”
means (a) the buildings, structures, improvements and facilities located on the
Site, whether now or hereafter existing and wherever located; and (b) any
extensions, improvements, replacements, and additions to or personal property
(including, without limitation, equipment, fixtures or permanent inventory) for
such buildings, structures, improvements and facilities, whether now or
hereafter existing and whether located on the Site.

 

“Government”
or “Governments” means each or all of the City of Indianapolis, the State and
the Authority.

 

“Governmental
Entity” means any court, government agency, department, commission, board,
bureau, office, officer or instrumentality of the United States, any local,
county, state, federal or political subdivision thereof, or any foreign
governmental entity of any kind, including but not limited to the Authority.

 

“Hazardous
Materials” means any hazardous or toxic substance, material or waste which is
or becomes regulated by any local governmental entity, the State of Indiana or
the United States Government, including, without limitation, any material or
substance which is (a) petroleum, batteries, or liquid solvents or similar
chemicals, (b) asbestos, (c) radioactive material

 

7

 

or waste, (d)
polychlorinated biphenyls (“PCBs”), (e) designated as a “hazardous substance”
pursuant to Section 311 of the Federal Water Pollution Control Act (33 U.S.C.
§ 1317), (f) defined as a “hazardous waste” pursuant to Section 1004 of
the Federal Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et
seq. (42 U.S.C. § 6903), or pursuant to Section 13-11-2-99 of the
Indiana Code, or determined to be a “hazardous waste” under Section
13-22-2-3(b) of the Indiana Code, (g) defined as a “hazardous substance”
pursuant to Section 101 of the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. § 9601 et  seq. (42
U.S.C. § 9601), or pursuant to Section 13-7-1.5-1 of the Indiana Code, (h)
regulated under the Toxic Substances Control Act (15 U.S.C. § 2601 et
seq.) or defined as a PCB pursuant to Section 13-11-2-155 of the Indiana
Code, (i) defined as a “contaminant” pursuant to Section 13-11-2-42 of the
Indiana Code, or (j) any other substance or material similarly classified by
any other federal, state or local statute or ordinance or by any rule or
regulation promulgated or adopted pursuant thereto, whether now existing or
hereinafter enacted.

 

“Indemnified
Parties” has the meaning set forth in Section 705(B) of this Lease.

 

“ITFA” means
the Indiana Transportation Finance Authority created under IC 8-9.5-8 and
acting pursuant to IC 8-21-12.

 

“Laws” means any and all applicable local, county, state, federal,
foreign or other laws, statutes, codes, regulations, ordinances, conditions,
requirements, rules, orders, decrees, consent decrees, judgments, writs,
settlement agreements, stipulations, injunctions, guidelines, demand letters,
or other governmental requirements enacted, promulgated, entered into, agreed
or imposed by any Governmental Entity from time to time.

 

“Lease
Agreement” or “Lease” means this Lease Agreement, as the same may be amended
and supplemented.

 

“Leased
Premises” means (a) that portion of the Facilities shown on Exhibit B attached hereto; and (b) the
Equipment.

 

“Liability”
means any liability (whether known or unknown, whether absolute or contingent,
whether liquated or unliquated, and whether due or to become due), including,
without limitation, responsibility under Environment, Health and Safety
Requirements for cleanup, containment, restoration, remival, remediation,
investigation, fines, penalties or monitoring relating thereto (collectively, “Remedial
Work”), liability for costs of Remedial Work, liability for costs of government
oversight and other expenses incidental to Remedial Work, liability for natural
resources damage, liability for illness, bodily injury, personal injury and/or
the increased risk of or fear of illness, bodily injury or personal injury, and
liability for property damage or other economic losses.

 

“Net Proceeds”
means the gross proceeds derived from insurance or any eminent domain or
condemnation award, or from any agreement in lieu of an eminent domain or
condemnation award, less payment of attorneys’ fees and expenses properly
incurred in the collection of those gross proceeds.

 

“Permitted Encumbrances”
means those matters listed in the attached Exhibit
C.

 

8

 

“Person” means any individual or Entity.

 

“Redevelopment
Authority” means the Marion County Convention and Recreational Facilities Authority
created under IC 36-10-9.1 and acting pursuant to IC 36-7-15.3.

 

“Rental” means
rent payable by Tenant pursuant to Article VI.

 

“Site” means
the real estate located at the Airport, as described in the attached Exhibit A, as the same may be amended or supplemented
by an Addendum hereto signed by the Authority and Tenant, consisting of
approximately 217 acres.

 

“State” means
the State of Indiana.

 

“Tenant” means
Chautauqua Airlines, Inc., an Indiana corporation.

 

“Term” and “Term
of this Lease Agreement” means, collectively, the period beginning on December
17, 2004 and ending six (6) calendar months thereafter.

 

“TSA” means
Transportation Security Administration.

 

ARTICLE II

 

LEASE OF LEASED PREMISES; OWNERSHIP OF IMPROVEMENTS AND EQUIPMENT; USE
OF LEASED PREMISES

 

Section 201.                                Lease
of Leased Premises.  Subject to and
upon the terms, covenants, conditions and provisions hereinafter set forth, and
each in consideration of the duties, covenants and obligations of the other
hereunder, the Authority hereby leases, demises and lets to Tenant, and Tenant
hereby leases from the Authority, the Leased Premises totaling 48,923.33 square
feet of hangar and support space, apron area
and parking lot as shown on Exhibit B
and equipment specified on Exhibit E.

 

Section 202.                                Ownership
of Improvements and Equipment.  The
Leased Premises, including without limitation any buildings, fixtures,
facilities, structures, additions, Equipment or improvements in, on or to the
Leased Premises, are and shall remain the property of the Authority, subject to
Tenant’s rights hereunder to use the same during the Term of, and in accordance
with, this Lease Agreement. 
Notwithstanding the foregoing to the contrary, the Excluded Property is
and shall remain the property of Tenant, subject to Section 1201 below.  Simultaneously with the execution and
delivery of this Lease Agreement, Tenant shall deliver to the Authority a true,
complete, and correct itemized list of the Excluded Property, in a form acceptable
to the Authority, and certified to the Authority as true, complete and correct
by the Chief Executive Officer of Tenant. 
Tenant shall have the right to supplement such itemized list from time
to time during the Term to include additional equipment, removable fixtures,
inventory and/or personal property of Tenant used and/or installed at the
Leased Premises.

 

Section 203.                                Condition
of Leased Premises.  Subject to
Section 201 of this Lease, Tenant accepts the Leased Premises in its “AS-IS”
condition, and acknowledges and agrees that Authority shall have no obligation
to perform or complete any alterations, improvements or

 

9

 

modifications to the Leased
Premises.  Notwithstanding anything in
this Lease to the contrary, and in addition to the other obligations of the
Authority under this Lease, the Authority shall be liable for all costs,
expenses, fees and disbursements related to remedying, curing or remediating
any condition existing at or on the Leased Premises on or prior to date Tenant
first occupies the Leased Premises, necessary to comply with Environmental, Health and Safety Requirements.

 

Section 204.                                Use
of Leased Premises; Prohibited Uses.

 

(A)                              Tenant
shall use the Leased Premises for conducting maintenance on aircraft owned or
operated by Tenant and related activities or aircraft owned or operated by
other air carriers.  In the event Tenant
conducts maintenance and related activities on aircraft owned or operated by
other air carriers, the parties will negotiate an Airport Use Agreement for
such activities which may include payment of the appropriate use fees.

 

(B)                                Tenant
shall not use the Leased Premises for any purpose other than those identified
in subsection (A) above without the Authority’s prior written consent, which consent
shall not be withheld.  Without limiting
the generality of this restriction, the following conditions shall apply to the
use and operation of the Leased Premises:

 

(1)                                  Tenant
shall not store aviation fuel, except in connection with the defueling and
refueling of maintained aircraft and only in those areas that have been
expressly designated for such purposes by the Authority and in accordance with
Airport ordinances; shall not block any common use taxiway; and shall not park
any aircraft upon the apron portion of the Leased Premises hereto in a manner
that would constitute a violation of any Laws or regulations concerning Airport
operations.  Passenger loading and
unloading is prohibited.  Aircraft ramp
and service equipment may be stored only within the Leased Premises.  All refueling trucks moving to and from the
Leased Premises, including their routing and parking, must be approved by the
Authority.  Tenant shall not store any
Class-A explosives (as defined by the United States Department of
Transportation) on the Leased Premises. 
All vehicles used in Air Operations Areas shall be equipped and operated
in accordance with applicable Laws and the regulations of the Authority and
FAA.  Tenant shall not use or place any
temporary structures or improvements on the Leased Premises without the prior
written approval of the Authority, not to be unreasonably withheld.

 

(2)                                  Tenant
shall be permitted to park aircraft on the apron area designated and shown on Exhibit D.

 

(C)                                Except
as otherwise expressly provided in this Lease, the rights granted in this Lease
Agreement shall not be construed as permitting any Person to conduct any
business at the Airport (including without limitation on the Leased Premises)
except after first securing from the Authority a license and/or other form of
permission to conduct that business and paying applicable fees and charges
therefore.

 

10

 

ARTICLE III

 

 REPRESENTATIONS AND WARRANTIES

 

Section 301.                                Representations
and Warranties by Authority.  The
Authority makes the following representations and warranties to Tenant as the
basis for the Authority’s undertakings herein:

 

(A)                              The
Authority is duly organized as a municipal corporation pursuant to the laws of
the State and has the power to execute, deliver and enter into this Lease
Agreement and to carry out its obligations hereunder.  By proper action of its board, the Authority
has been duly authorized to execute, deliver and perform its obligations under
this Lease Agreement.

 

(B)                                This
Lease Agreement constitutes the valid and binding obligation of the Authority,
enforceable against the Authority in accordance with its terms, subject to (i)
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
creditors’ rights generally heretofore or hereafter enacted; (ii) the exercise
of judicial discretion in accordance with the general principles of equity; and
(iii) the valid exercise of the constitutional powers of the Authority, the
State and the United States of America.

 

(C)                                No
approvals or consents, other than those that have been obtained, are necessary
in order for the Authority to adopt, execute and deliver this Lease Agreement.

 

(D)                               The
Authority has a valid leasehold interest in the Facilities, subject to
Permitted Encumbrances.

 

(E)                                 The
Authority has full right and authority to lease the Leased Premises to Tenant
as set forth herein for the full Term, including the Extension Periods.

 

(F)                                 This
Lease Agreement has been duly executed and delivered by duly authorized
officers of the Authority.

 

(G)                                Neither
the execution and delivery of this Lease Agreement, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the
terms and conditions of this Lease Agreement, will conflict with or result in a
material breach of any of the terms, conditions or provisions of any
restriction, ordinance, agreement or instrument to which the Authority is now a
party or by which it is bound, or constitute a material default under any of
the foregoing, or result in the creation or imposition of any material lien,
charge or encumbrance of any nature whatsoever upon any of the property or
assets of the Authority under the terms of any instrument or agreement.

 

(H)                               There
is no litigation pending or, to the knowledge of the Authority, threatened that
challenges or would challenge the execution of this Lease Agreement or that
could reasonably be expected to have a material adverse effect on the
operations or finances of the Authority.

 

(I)                                    Neither
the Site nor the Leased Premises contains any Hazardous Materials requiring
remediation or which is present in violation of applicable law, whether brought
brought

 

11

 

to the Site as waste materials,
used on the Site, spilled or leached onto the Site from neighboring lands
generated on the Site as a product or by-product of activities on the Site,
stored on the Site or otherwise present, except in each case in quantities and
concentrations routinely occurring in nature or as a result of aircraft
maintenance or repair activities at the Site or at the Facility. The
Authority to the extent permitted by law agrees to indemnify and hold Tenant
harmless from and against any and all suits or other claims, losses, damages or
liability, and costs and expenses ( including but not limited to attorneys’
fees, costs of legal proceedings, environmental audits and/or remediation)
incurred by Tenant as a result of any breach of Authority’s representation set
forth in this Subsection 301(I).

 

Section 302.                                Representations,
Warranties and Covenants by Tenant. 
Tenant makes the following representations and warranties to the
Authority as the basis for its undertakings herein:

 

(A)                              Tenant
is a corporation duly organized under the laws of the State of Indiana and is
duly qualified to do business in the State, is in good standing and has power
to execute, deliver and enter into this Lease Agreement and to carry out its
obligations hereunder.  By proper
organizational action, Tenant has been duly authorized to execute, deliver and
perform its obligations under this Lease Agreement.

 

(B)                                This
Lease Agreement constitutes the valid and binding obligation of Tenant,
enforceable against Tenant in accordance with its terms, subject to (i)
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
creditors’ rights generally heretofore or hereafter enacted, and (ii) the
exercise of judicial discretion in accordance with the general principles of
equity.

 

(C)                                No
approvals or consents, other than those that have been obtained, are necessary
for Tenant to execute and deliver this Lease Agreement.

 

(D)                               This
Lease Agreement has been duly executed and delivered by the duly authorized
officer of Tenant.

 

(E)                                 There
is no litigation now pending or, to Tenant’s knowledge, threatened that
challenges or would challenge the existence or powers of Tenant in any way
affecting this Lease Agreement, or that challenges or would challenge the
execution of this Lease Agreement, or that could reasonably be expected to have
a material adverse effect on the operations or finances of Tenant.

 

(F)                                 Neither
the execution and delivery of this Lease Agreement, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the
terms and conditions of this Lease Agreement, will conflict with or result in a
breach of the of Tenant or in a material breach of any of the terms, conditions
or provisions of any agreement or other instrument to which Tenant is now a
party or by which it is bound, or constitute a material default under any of
the foregoing, or result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever upon any of the property or assets of
Tenant under the terms of any instrument or agreement.

 

12

 

(G)                                Tenant
has duly and validly obtained, and shall maintain in full force and effect
during the Term, all certificates, licenses and permits from all Governmental
Entities, required or appropriate to enable Tenant to carry on its business as
it is now conducted and/or to enter into this Lease Agreement, including
without limitation a “repair station certificate” as required under 14 CFR Part
145 (the “145 Certificate”).

 

ARTICLE IV

 

Intentionally Deleted.

 

ARTICLE V

 

TERM; EXTENSION PERIODS; TERMINATION RIGHT

 

Section 501.                                Term.  The term of this Lease Agreement shall
consist of the Term.

 

Section 502.                                Holding
Over.  In the event Tenant shall
continue to occupy the Leased Premises beyond the Term of this Lease Agreement
or any extension thereof without Authority’s written renewal thereof, such
holding over shall not constitute a renewal or extension of this Lease
Agreement, but shall create a tenancy from month to month which may be
terminated at any time by Authority or Tenant by giving thirty (30) days
written notice to the other party.

 

Section 503.                                Right
to Terminate Upon Certain Events.  In
addition to any other provisions of this Lease that expressly grant either
party the right to terminate this Lease prior to the expiration of the Term,
either the Authority or the Tenant shall have the right, upon written notice to
the other party, to terminate this Lease upon the occurrence of either of the
following events or circumstances:

 

(A)                              The
assumption by the United States Government or any authorized agency thereof of
the operation, control, or use of the Airport and facilities, or any
substantial part or parts thereof, in a manner that substantially restricts
Tenant, as reasonably determined by Tenant, from full use of a material portion
of the Leased Premises for a period of at least ninety (90) consecutive days.

 

(B)                                The
issuance by any court of competent jurisdiction of an injunction in any way
preventing or restraining the use of the Airport, so as to substantially and
adversely affect Tenant’s use of a material portion of the Leased Premises, as
reasonably determined by Tenant, for a period of at least ninety (90)
consecutive days; provided, that the injunction is not due to Tenant’s
operations at the Airport.

 

Section 504.                                Rights
at Expiration.

 

(A)                              In
no event shall Tenant continue to occupy the Leased Premises beyond the end of
the Term without the Authority’s written consent, which consent may be withheld
in the Authority’s sole and absolute discretion.

 

13

 

(B)                                Tenant
further agrees that upon the expiration of the Term, the Leased Premises shall
be delivered to the Authority in substantially the same condition as originally
delivered to Tenant, reasonable wear and tear, casualty, condemnation and
matters covered by insurance excepted, and subject to performance by the
Authority of its obligations pursuant to Sections 1001 and 1002 below.

 

Section 505.                                Intentionally
deleted.

 

ARTICLE VI

 

RENTALS, FEES AND RECORDS

 

Section 601.                                Rental.

 

Tenant shall
pay to Authority during the Term of this Lease monthly rental in the amount of
$35,224.80 (48,923.33 sq. ft. x $8.64 per sq. ft. ÷ 12).  Tenant shall not be charged rental on the
space designated as additional space.

 

Tenant shall
pay the foregoing fixed rentals, in arrears, on or before the fifteenth day of
each calendar month of the term, at the office of the Airport Director,
Indianapolis Airport Authority, 2500 S. High School Road, Suite 100,
Indianapolis, IN 46241-4941.

 

Section 602.                                Field
Use Charge.  Except for Tenant’s
right to use those areas designated on Exhibit E free of charge for aircraft
parking purposes, this Lease Agreement does not and shall not be deemed to
grant Tenant the right to use any aircraft parking apron or taxiway not on the
Leased Premises.  Any use of aircraft
operational areas outside of the Leased Premises, or other Airport property not
included in the Leased Premises, or the areas designated on Exhibit E, by Tenant, its employees or its agents
shall be by separate agreement and only upon payments of appropriate fees.  Nothing in this Section, however, shall
prohibit Tenant, its employees or its agents from the joint use with others at
the Airport of interior and exterior roadways serving the Leased Premises as
granted herein and in accordance with Airport rules, regulations and/or
restrictions.

 

Section 603.                                Time
and Place of Payments.  The Rental
due under Section 601 (A) hereof shall be payable to the Authority, at the
office of the Airport Director at the address set forth in Section 601 (C).

 

Section 604.                                Delinquent
Rentals.  If Tenant does not pay the
Rental described in Section 601 (A) hereof within thirty (30) days following
Tenant’s receipt of written notice of delinquency, there shall be added to all
such delinquent sums due the Authority and unpaid, as may be established by
Authority, under this Lease an interest charge of the principal sum for each
full calendar month of delinquency computed as simple interest.  The interest amount charged shall be
established by Authority as set forth in Authority’s rates and Charges
Ordinance or as such ordinance may hereafter be amended but shall in any event
not exceed 18% or established per annum. 
No interest shall be charged upon that portion of any debt which, in
good faith, is in dispute.  No interest
shall be charged upon any account until payment is thirty (30) days overdue,
but such interest, when assessed thereafter, shall be computed from the due
date until the delinquent payment, together with accrued interest, is paid in
full.  The interest rate,

 

14

 

established by Ordinance by the
Airport Authority Board, may change from time to time but shall in any event
not exceed 18% per annum.

 

Section 605                                   Intentionally
deleted.

 

Section 606                                   Obligations
of Tenant Hereunder Unconditional. 
The obligation of Tenant to make the payments required under Article VI
hereof and to pay the premiums or charges necessary to maintain or cause to be
maintained the insurance required by Article XV shall be absolute and
unconditional and shall not be subject to any defense (other than full payment)
or any right of setoff, counterclaim, abatement or otherwise.  Tenant shall not suspend, postpone or
discontinue any such payments for any cause whatsoever.

 

ARTICLE VII

 

OBLIGATIONS OF TENANT

 

Section 701.                                Payment
of Rental and Other Amounts.  Tenant
hereby agrees and covenants to pay or provide for the payment of all Rental
described in Article VI as and when due hereunder.  All Rental payments shall be absolutely free
from all claims, demands or offsets against the Authority of any kind or nature
whatsoever and without relief from valuation or appraisement laws.

 

Section 702.                                Operation
and Use of Leased Premises.

 

(A)                              Tenant
shall at its own expense (i) keep the Leased Premises in a safe, neat and
attractive condition, and (ii) not permit the accumulation of any trash, paper
or debris on the Leased Premises or trash, paper or debris belonging to Tenant
on any other property of the Authority.

 

(B)                                Tenant,
upon written notice by the Authority to Tenant, shall be required to perform
whatever maintenance is reasonably necessary to comply with the provisions of
Subsection (A) hereof.  If Tenant does
not undertake that maintenance within thirty (30) days after receipt of written
notice, the Authority shall have the right to enter upon the Leased Premises or
in the Facilities and perform the necessary maintenance, the actual and
reasonable out-of-pocket cost of which shall be paid by Tenant within thirty
(30) days after notice of the cost thereof is provided by the Authority.

 

(C)                                Tenant
shall not abuse, misuse, or commit or allow any waste or damage to the Leased
Premises and/or the other property of the Authority, including without
limitation the Equipment.  Without
limiting the foregoing, Tenant shall operate and use all Equipment only in a
manner that complies with applicable manufacturer’s instructions, guidelines,
and warranties.

 

(D)                               Tenant
shall not occupy or use, or permit any portion of the Leased Premises to be
occupied or used, for any business or purpose which is unlawful, disreputable,
or deemed to be extra-hazardous on account of fire, or do or permit anything to
be done that would in any way increase the cost of the Authority’s casualty
insurance coverage on the Facilities, the Leased Premises, the Equipment, or
their contents.

 

15

 

(E)                                 Excluding
regional jet sized aircraft, Tenant shall not place any objects in any part of
the Leased Premises that would place an excessive load on the floors of the
Leased Premises without the prior written approval of the Authority.  The Authority shall have the right to have a
floor load analysis of any part of the Leased Premises made at any time.  If such analysis should indicate that Tenant
has exceeded the foregoing limitations, Tenant shall immediately take such
actions as may be required to eliminate the overloading condition and shall
reimburse the Authority for the expense incurred in completing the analysis and
for the cost and expense of any damage arising from such overloading condition.

 

(F)                                 Tenant
shall conduct and operate its Business in a manner so as to prevent the voiding
of any roof warranties with respect to the Facilities of which Tenant is made
aware, and shall maintain true, complete and correct records for the Authority
with respect thereto.

 

(G)                                Tenant
shall comply with all applicable Laws relating to the use, condition and/or
occupancy of the Leased Premises.

 

(H)                               Tenant
shall conduct its business and control its agents, employees, invitees,
contractors and visitors in such a manner as to not create any nuisance to the
Authority or its other tenants.  Tenant
shall use commercially reasonable efforts to not interfere with, annoy or
disturb any other tenant, or the Authority in its operation of the Facilities.

 

(I)                                    Tenant
shall not make any alterations, modifications, improvements or additions of or
to the Leased Premises without the prior written consent of the Authority not
to be unreasonably withheld, conditioned or delayed.  Subject to the foregoing, any permanently
affixed alterations, modifications, improvements and/or additions by Tenant of
or to the Leased Premises shall be deemed a part of the Leased Premises and
shall belong to the Authority unless otherwise agreed by the parties.

 

Section 703.                                Trash,
Garbage and Other Refuse; Outside Storage.

 

(A)                              Tenant
shall pick up, and provide for, a complete and proper arrangement for the
adequate sanitary handling and disposal, away from the Airport, of all trash,
garbage, and other refuse caused as a result of its operation occupancy of and
on the Leased Premises.  Tenant shall
provide and use suitable covered outdoor receptacles for all such garbage,
trash, and other refuse on the Leased Premises. 
Tenant shall dispose of medical or biohazardous waste, regulated waste
or any Hazardous Materials recovered or generated as a result of its operations
off of the property of the Airport and in accordance with all applicable Laws
and subject to Section 705.

 

(B)                                Other
than aircraft waiting for the completion of servicing and vehicles, no outside
storage shall be permitted, except in the locations specified on Exhibit E.

 

Section 704.                                Licenses
and Permits.  Tenant shall obtain and
maintain in full force and effect, at its cost and expense, any and all
certificates, approvals, consents, authorizations, licenses, and permits under
any applicable Law that are necessary to comply with this Lease Agreement and
the privileges extended hereunder and/or that are necessary or appropriate for
Tenant to obtain and maintain in connection with the conduct and operation of
its Business at the Leased Premises, including without limitation the 145
Certificate.

 

16

 

Section 705.                                Hazardous
Materials.

 

(A)                              Tenant
shall use, store, handle, load, unload and dispose of any Hazardous Materials
only in compliance with all Laws and only after Tenant has furnished to
Authority a list of such Hazardous Materials. In no event shall Tenant use,
store, handle, load, or unload any Hazardous Materials which Authority’s
insurance company has notified Authority in writing will void
Authority’s insurance coverages with respect to the Leased Premises or result
in an increased premium. Tenant agrees to pay to Authority any increase in
Authority’s insurance coverage premium which directly results from Tenant’s
use, storage, handling, loading, unloading, and disposition of Hazardous
Materials. Tenant shall, at its expense, remediate any Hazardous Materials or
cause any Hazardous Materials to be remediated so as to avoid Liability under
any Environmental, Health and Safety Requirements, but only to the extent the
Hazardous Materials were first placed on, present at, manufactured at, stored
at, disposed from, released from or emitted from the Leased Premises or
associated apron area by Tenant after the Effective Date of Occupancy. If
the placement, presence, manufacture, storage, disposal, release or emission of
any such Hazardous Materials by Tenant in, or or at the Leased Premises and
associated apron area, or in, on or at the Facilities or Site results in
any contamination, Tenant shall promptly take all actions at is sole expense as
are necessary to return the Leased Premises, the Facilities, or Site in a
commercially reasonable manner to substantially the conditions which existed
prior to the placement, presence, manufacture, storage, disposal, release or
emission of such Hazardous Materials and such action or actions shall be in
compliance with applicable Environmental, Health, and Safety Requirements and
Environmental Laws. If the presence of such Hazardous Materials on or the
release of such Hazardous Materials from the Leased Premises resulted from any
person or entity other than Tenant, its employees, agents, contractors,
invitees or visitors or Authority the parties agree to co-operate with each
other in pursuing such person or entity to recover any remediation costs or
other damages that may have been incurred by Authority or Tenant. Authority and
Tenant shall each be entitled to recover proportionately their
respective expenses and costs incurred to pursue such person or entity.

 

(B)                                Tenant
shall indemnify, defend and hold harmless Authority, BAA Indianapolis LLC, BAA
USA (Holdings), Inc., the Redevelopment Authority, the IFTA and the Commission
and each and all of their respective members, directors, officers, employees,
agents, successors and assigns (collectively, the “Indemnified Parties”) from
and against any and all claims, judgments, damages, penalties, fines, costs,
liabilities or losses and damages asserted against, resulting to, imposed upon
or suffered by the Indemnified Parties or any of them or for damage
to their respective property interests, to the extent arising from,
attributable to, or relating in any manner to (i) a breach by Tenant
of its obligations as specified in Subsection (A) of this
Section 705 or (ii) injury to person or property as a result of a breach by
Tenant of its obligations as specified in Subsection (A) of this Section
705. This indemnification shall survive the cancellation, termination or
expiration of the Term of this Lease.

 

(C)                                Tenant
covenants and agrees to comply with all applicable Environmental Laws to to
provide Authority, immediately upon receipt, copies of any correspondence,
notice or document of any character from any source alleging a circumstance or
condition that requires or may require, a clean up, removal, remedial action,
or other response by or on the part of Tenant at the Leased Premise, Faculties
or Site or alleges a violation of Environmental Laws either civil or criminal.

 

17

 

(D)                               The
Authority, to the extent permitted by law, shall indemnify, defend and hold
harmless Tenant, and each and all of its members, directors, officers,
employees, agents, successors and assigns ( collectively, the “Tenant
Indemnified Parties”) from and against any and all claims, judgments, damages,
penalties, fines, costs, liabilities or losses, and damages asserted against,
resulting to, imposed upon or suffered by the Tenant Indemnified Parties or any
of them to the extent arising from, attributable to, or directly relating to
the presence of Hazardous Materials on or the release of Hazardous Materials at
or from the Leased Premises, Facilities, or Site other than those caused by the
Tenant Indemnified Parties or their respective directors, officers, members,
 employees, agents, contractors, invitees, or visitors which result from
the acts or omissions of Authority.  This
indemnification shall survive the cancellation, termination, or expiration of
the Term of this Lease.

 

(E)                                 Tenant
agrees, and at the reasonable request of Authority, to permit, once per
calendar year, an environmental audit solely for the benefit of Authority, to
be conducted by Authority or an independent agent selected by Authority,
provided, however, that such an audit will not unreasonably interfere with
Tenant’s operations. Tenant and Authority shall share the reasonable audit
costs.  Authority shall, immediately
after completion of such an audit, provide Tenant with a complete copy of the
results, findings, recommendations or any report or summary of the audit
generated by or received by Authority. This provision shall not relieve Tenant
from conducting its own environmental audits or taking any other steps to
comply with Environmental laws.

 

(F)                                 If
in the reasonable opinion of Authority, there exists any uncorrected violation
by Tenant of an Environmental Law or any condition which requires, or may
require, a clean up, removal or other remedial action by Tenant under any
Environmental Laws, and such cleanup, removal or other remedial action is not
completed within ninety (90) days from the date of written notice from Authority
to Tenant, the same shall, at the option of Authority, constitute an event of
default.

 

Section 706.                                Signs.  Tenant shall not erect, maintain, or display
upon the outside of any buildings, structures or other improvements on the
Leased Premises or the Facilities any billboards or advertising signs without
the Authority’s consent. However, that Tenant may, at its sole cost and
expense, install and maintain, on the exterior walls of the Facilities within
its Leased Premises, signage for its business at the Facilities, provided that
the quantity, size, location, content, design and appearance of such signage
shall be in compliance with Laws and subject to prior written approval by the
Authority.  Tenant shall be responsible,
at its sole cost and expense, for ensuring that the signage complies with any
and all applicable Laws, and Tenant shall be responsible, at its cost and
expense, before erecting any signage, for obtaining any and all necessary or
appropriate approvals, permits, consents, and/or licenses from any applicable
Governmental Entities with respect to such signage.  The Authority’s approval of such signage
shall not, and shall not be deemed to, constitute a representation or
acknowledgement by the Authority that Tenant’s proposed signage complies with
any Laws, nor shall such approval by the Authority relieve Tenant of any of
Tenant’s obligations under the preceding sentences.

 

Section 707.                                Rules
and Regulations.  Tenant shall comply
with, and shall cause its employees, agents, contractors, invitees and visitors
to comply with, such rules and regulations of the Facilities as are adopted by
the Authority from time to time for safety, care and cleanliness

 

18

 

of the Leased Premises and the
Facilities and preservation of good order therein, all of which shall be sent
by the Authority to Tenant in writing and shall thereafter be carried out and
observed by Tenant and its employees, agents, contractors, invitees and
visitors provided such rules and regulations do not materially diminish or
materially increase Tenant’s rights or increase Tenant’s obligations
hereunder.  The Authority shall not be
held responsible or liable for any other tenant’s failure to observe any such
rules or regulations or any provision of its lease.  Tenant shall also comply with all applicable
FAA and TSA security regulations, orders, or security direction.

 

Section 708.                                Taxes.
Tenant shall be responsible for and shall pay before delinquent all municipal,
county, federal or state taxes coming due during or after the Term of this
Lease Agreement against Tenant’s leasehold interest under this Lease Agreement
or against personal property (including without limitation the Excluded
Property) of any kind owned or placed in, upon or about the Leased Premises by
Tenant, except to the extent that personal property is the property of the
Authority and part of the Equipment pursuant to the terms of this Lease
Agreement.

 

Section 709.                                Intentionally
deleted.

 

Section 710.                                Nondiscrimination.

 

(A)                              Tenant,
for itself, its personal representatives, successors in interest, and assigns,
as part of the consideration hereof, does hereby covenant and agree that (i) no
Person shall be excluded from participation in, denied the benefits of, or
otherwise subjected to discrimination in the use of the Leased Premises on the
grounds of race, creed, color, national origin, gender, age or handicap; (ii)
in the construction of any improvements on, over, or under the Leased Premises
and the furnishing of services thereon, no Person shall be excluded from
participation in, denied the benefits of, or otherwise subjected to
discrimination on the grounds of race, creed, color, national origin, gender,
age or handicap; and (iii) Tenant shall use the Leased Premises in compliance
with all other requirements imposed by or pursuant to Title 49, Code of Federal
Regulations, Department of Transportation, Subtitle A, Office of the Secretary,
Part 21, Nondiscrimination in Federally-assisted programs of the Department of
Transportation, Effectuation of Title VI of the Civil Rights Act of 1964, as
said Regulations may be amended, to the extent that said requirements are
applicable, as a matter of law, to Tenant.

 

(B)                                With
respect to the Leased Premises, Tenant agrees to furnish services on a fair,
equal and not unjustly discriminatory basis to all users thereof, and to charge
fair, reasonable and not unjustly discriminatory prices for each unit or
service; provided, that Tenant may be allowed to make reasonable and
nondiscriminatory discounts, rebates or other similar types of price reductions
to volume purchasers consistent with the limitations set forth in Section 601.

 

Section 711.                                Civil
Rights.  Tenant assures the Authority
that Tenant shall comply with pertinent statutes, executive orders, and such
rules as are promulgated to assure that no Person shall, on the grounds of
race, creed, color, national origin, gender, age, or handicap be excluded from
participating in any activity conducted with or benefiting from federal
assistance.  This Section obligates
Tenant, for the period during which federal assistance is provided to the
Airport program, except where federal assistance is to provide, or is in the
form of, personal

 

19

 

property or real property or
interests therein or structures or improvements thereon.  In these excepted cases, this Section shall
obligate Tenant for the longer of the following periods: (A) the period during
which the property is used by the sponsor or any transferee for a purpose for
which federal assistance is extended, or for another purpose involving the
provision of similar services and benefits; or (B) the period during which the
Airport sponsor or any transferee retains ownership or possession of the
property.  In the case of contractors,
this Section shall bind the contractors from the bid solicitation period
through the completion of the contract.

 

Section 712.                                Affirmative
Action.

 

(A)                              With
respect to the Leased Premises, Tenant agrees to undertake anaffirmative action
program as required by 14 CFR Part 152, subpart E, to ensure that no Person
shall, on the grounds of race, creed, color, national origin or gender, be
excluded from participating in any employment activities covered in 14 CFR Part
152, Subpart E; and that no Person shall be excluded on these grounds from
participating in or receiving the services or benefits of any program or
activity covered by that Subpart.

 

(B)                                In
order to further the foregoing objectives, Tenant agrees that with respect to
the operation of its Business at the Leased Premises, Tenant shall use commercially
reasonable efforts to engage the services of and to procure goods and services
from minority business enterprises and women business enterprises (pursuant to
certifications from the City of Indianapolis or the State), at levels not less
than the following percentages during each year of the Initial Term or
Extension Period:

 

(i)                                     minority
business enterprises: at least fourteen percent (14%) of all goods and services
purchased by Tenant in connection with the operation of its Business at the
Leased Premises; and

 

(ii)                                  women
business enterprises:  at least four
percent (4%) of all goods and services purchased by Tenant in connection with
the operation of its business at the Leased Premises.

 

Tenant shall
annually issue a statement to Authority reporting minority and business women
purchase percentages.

 

No contractual requirements or penalties shall be imposed if Tenant
does not meet the percentage targets set forth in this Section 712.

 

Section 713.                                Observance
of Statutes.  Subject to Section 602
hereof, Tenant shall have the right to use the Airport or its facilities
located on the Airport property in common with others authorized to do so;
provided, however, that Tenant shall observe and comply with any and all
requirements of the constituted public authorities and with all federal, state
or local statutes, ordinances, regulations and standards applicable to Tenant
for its use of the Airport, including but not limited to, rules and regulations
promulgated from time to time by the Airport Director for the general
administration of the Airport.

 

20

 

Section 714.                                Hazard
Lights.  Tenant shall, at its
expense, provide and maintain hazard lights on any structure it erects on the
Leased Premises, if required by Authority or Federal Aviation Administration (“FAA”)
regulations.  Any hazard lights so
required shall comply with the specifications and standards established for
installation by the FAA.

 

Section 715.                                Liens.

 

(A)                              Tenant
shall not permit any employee lien or mechanic’s, materialmen’s or similar lien
for labor or materials furnished or alleged to have been furnished to the
Leased Premises to attach to any portion of the Leased Premises, the
Facilities, or any other part of the Airport, and Tenant herein agrees that if
any such lien is filed, Tenant shall: 
(i) notify the Authority of the pendency of such lien, and (ii)
indemnify, protect, defend and save harmless the Indemnified Parties from and
against any loss, liability or expense whatsoever by reason thereof, and shall
proceed with and defend, at Tenant’s expense, such action or proceedings as may
be necessary to remove any lien from the records.

 

(B)                                Tenant
may, however, in good faith and with due diligence, contest any such lien filed
or established against all or any portion of the Leased Premises.  Tenant may permit any such lien or charge to
remain undischarged and unsatisfied during the period of such contest and
appeal therefrom, if and only if (i) Tenant effectively prevents or stays the
execution, foreclosure or enforcement of the lien or charge, or (ii) the
contest or appeal prevents or stays the execution or enforcement or foreclosure
of the lien or charge.  If any lien or charge
is so stayed and that stay thereafter expires or the Authority gives Tenant
written notice that by nonpayment of any items the Leased Premises or any
portion thereof will be subject to loss or forfeiture, then Tenant shall
forthwith pay and cause to be satisfied and discharged any lien or charge or
secure payment by posting a bond, in form satisfactory to the Authority.  At the expense of Tenant, the Authority shall
cooperate fully with Tenant in any contest.

 

(C)                                If
Tenant shall fail to contest, discharge or pay any such lien as required by
subsections (A) and (B) hereof, the Authority may contest, discharge or pay any
such lien which the Authority may determine to be necessary in order to protect
its interest in the Leased Premises, the Facilities and/or the Site.  In such event, Tenant agrees to reimburse the
Authority for any and all actual and reasonable out-of-pocket expenses and
costs incurred by the Authority in respect thereto including Authority’s
reasonable attorney fees.

 

Section 716.                                Tenant
to Maintain its Organizational Existence. 
Tenant shall maintain its organizational existence, shall remain duly
qualified to do business in the State, shall not dissolve or otherwise dispose
of all or substantially all of its assets.

 

Section 717.                                Advances
by Authority.  If Tenant fails to
maintain full insurance coverage as required by this Lease Agreement, or
otherwise fails to comply with any covenant or agreement set forth in this
Lease Agreement, the Authority may (but shall be under no obligation to) take
out the required policies of insurance or otherwise comply with those covenants
and agreements after providing Tenant with notice and an opportunity to cure
such failure.  Tenant agrees to pay all
amounts advanced by the Authority in payment of the required premiums for
insurance or to comply otherwise with such agreements and covenants, which
amounts, together

 

21

 

with interest thereon at the
rate of one and one half percent (1.5%) per month, shall become an additional
rental obligation of Tenant to the Authority.

 

Section 718.                                Waiver
of Partition.  Tenant
waives any right to partition the Leased Premises.

 

ARTICLE VIII

 

OBLIGATIONS OF AUTHORITY

 

Section 801.                                Ingress
and Egress.  Tenant shall have the right
of pedestrian, vehicular and aircraft ingress to and egress from the Leased
Premises for Tenant and its officers, employees, agents, servants, customers,
vendors, suppliers, patrons, and invitees over the roadway provided by the
Authority serving the Leased Premises, which roadway provides access to the
Leased Premises from a public right-of-way. 
The Authority’s roadway outside the Leased Premises shall be used
jointly with other tenants at the Airport, and Tenant shall not interfere with
the rights and privileges of other Persons using these facilities and shall be
subject to those weight and type use restrictions as Authority deems necessary.

 

Section 802.                                Quiet
Enjoyment of the Leased Premises.

 

(A)                              By
keeping and performing its covenants and agreements herein contained, Tenant
shall have the right, during the Term and subject to the provisions of this
Lease Agreement, to peaceably and quietly possess and enjoy the Leased
Premises.

 

(B)                                The
simultaneously held interests of the Authority in the Leased Premises shall not
be merged, but shall be separate and distinct. 
In addition, notwithstanding that the Term may exceed the term of the
lease agreements or sublease agreements by which, directly or indirectly, the
Authority subleases the Leased Premises from other Persons, this Lease
Agreement constitutes a sublease and not an assignment, and Tenant’s rights in
the Leased Premises are limited to the subleasehold estate granted hereby and
there shall be no merger with any interest of the Authority created by any
instrument described herein.  However, if
any leasehold interest held by the Authority terminates and as a result thereof
or thereafter any other interest of the Authority in and to the Leased Premises
becomes a present interest, and the Authority thereby succeeds to such interest
by reason of other interests it holds in the Leased Premises, then the
Authority shall be deemed to have leased such other interest to Tenant on the
terms set out herein.  In the event the
change of interest described herein occurs, Tenant’s Lease shall remain in full
force and effect.

 

ARTICLE IX

 

COMPLIANCE WITH SECURITY REQUIREMENTS

 

Section 901.                                Security
Agreement.  Tenant shall have
entrances and gates to the Air Operations Area and shall execute, in connection
with this Lease Agreement, an Airport Security Agreement as required by the
Authority in accordance with TSA regulations, Title 49 CFR Part

 

22

 

1542, which Airport Security
Agreement requires Tenant to control and regulate any doors, openings or
entrances to the Air Operations Area.  

 

Section 902.                                Security
Rules and Regulations of Authority, FAA and TSA.  Tenant shall comply with, and shall cause its
subtenants (and its and their respective Employees, agents, contractors and
Invitees) to comply with, such reasonable rules and regulations of the
Facilities and other portions of the Airport as are adopted by the Authority
from time to time, in the authority’s reasonable discretion, for safety and
security of the Leased Premises and the Facilities and other portions of the
Airport and preservation of good order therein, all of which shall be sent by
the Authority to tenant in writing and shall thereafter be carried out and
observed by Tenant and its subtenants and its and their respective Employees,
agents, contractors and Invitees (the “Facilities Security Rules and
Regulations”).  Tenant acknowledges that
the Facilities Security Rules and Regulations may, among other things, include
requirements regarding use of cards, keys or other access devices to access
certain portions of the Leased Premises or other portions of the Facilities,
requirements regarding Tenant’s obligations for securing the Equipment,
provisions restricting Tenant and its subtenants and any of its or their
respective Employees, agents, contractors or Invitees from accessing or
entering into certain portions of the Facilities, requirements that any
visitors to the Facilities register at the entrance to the Facilities, wear
identification and be accompanied by a representative of the tenant whom they
are visiting, and, other similar requirements. 
The Authority hereby agrees that it will in good faith, as part of the
process of the Authority’s development of the Facilities Security Rules and
Regulations with Regulations and will give reasonable consideration to Tenant’s
comments and concerns regarding those Facilities Security Rules and Regulations
prior to their implementation by the Authority. 
In addition to the Facilities Security Rules and Regulations, Tenant
shall also comply with, and cause its subtenants, and its and their respective
Employees, agents, contractors, and Invitees to comply with, all applicable FAA
and TSA security regulations, orders or security direction as in effect or
mandated from time to time.

 

ARTICLE X

 

MAINTENANCE, REPAIRS AND REPLACEMENTS

 

Section 1001.                          Maintenance,
Repairs and Replacements to Leased Premises and Facilities.  Except as otherwise provided in this Article
X, the Authority shall, subject to Section 702 (A) and 702 (B), at its cost and
expense, be responsible during the Term for (a) performing all structural maintenance,
repairs and replacements with respect to the Facilities and the Leased Premises
(other than Equipment, which is covered under Section 1002 below), including
without limitation foundations, exterior Facility walls (including door frames,
window frames, doors and windows), exteriors of the Facilities, interior
demising walls (including door frames and window frames), roof, drains,
gutters, and all structural parts of the Facilities, and all (b) periodically
painting the interior walls, and sealing the concrete floors, within the Leased
Premises in order to maintain them in a reasonably neat, safe condition, and
(c) performing all maintenance, repairs and replacements with respect to the
air conditioning, electrical, heating, mechanical and plumbing systems in the
Facilities, all in at least as good condition as exists on the Effective Date
or in such condition as may be required by applicable Law.  The Authority shall not be required to pay
for, and Tenant shall indemnify, defend, save and hold harmless the Authority
from and against the cost and expense, including without limitation reasonable
attorneys’ fees, of any such

 

23

 

maintenance, repairs or
replacements that become necessary as a result of or by reason of Tenant’s, or
its agent’s, contractor’s, employee’s, invitee’s or visitor’s, neglect or
willful misconduct, except to the extent covered by insurance maintained by the
Authority pursuant to this Lease Agreement against such hazards however caused.

 

Section 1002.                          Maintenance
Repairs and Replacements of and to Equipment.

 

(A)                              Repairs,
Replacements and Maintenance by the Tenant. Except as otherwise provided in
this Article X, the Tenant shall, at its cost and expense, be responsible
during the Term of this Lease Agreement for performing all maintenance and repairs
with respect to the Equipment furnished by the Authority to Tenant, including
without limitation preventive maintenance upon a periodic schedule to be
reasonably and mutually determined by the Authority. The Authority shall not be
required to pay for, and Tenant shall indemnify, defend, save and hold harmless
the Authority from and against the cost and expense, including without
limitation reasonable attorneys’ fees, of any such maintenance, repairs or
replacements that become necessary by reason of Tenant’s, or its agent’s,
contractor’s, employee’s, invitee’s or visitor’s, neglect or willful misconduct,
except to the extent covered by insurance maintained by the Authority pursuant
to this Lease Agreement against such hazards however caused. and Tenant, such schedule
to minimally be in accordance with manufacturers’ recommendations.

 

Section 1003.                          Prompt
Notification of Damage, Defects or Malfunction.  Tenant shall promptly notify the Authority or
designated agent of the Authority, in writing, as soon as Tenant becomes aware
of any damage, defect or malfunction in or to any portion of the Facilities
and/or the Leased Premises, including without limitation the Equipment
(according to Section1002).

 

Section 1004.                          Access
to Leased Premises.  The Authority
reserves the right to enter the Leased Premises as may be necessary or
appropriate from time to time for the purpose of general inspections and for
making the repairs, replacements, or maintenance required for safety,
protection and preservation of the Leased Premises (including without
limitation the Equipment) and the Facilities. 
Reservation of such right of entry shall not enlarge in any way the
Authority’s obligations for maintenance, repairs, or replacements as otherwise
provided in this Lease Agreement.  The
Authority shall use commercially reasonable efforts (except in the event of an
emergency) to provide Tenant with reasonable advance notice regarding the
repairs, replacements or maintenance and to perform the repairs, replacements
or maintenance at reasonable times and in a manner that will not materially
interfere with the operation by Tenant of its Business.

 

Section 1005.                          Inventory
of Equipment at Leased Premises.

 

(A)                              Identification
of Equipment.  Prior to the
commencement of the Term, the Authority shall identify the Equipment by tags or
other means of identification as deemed appropriate by the Authority in its
sole discretion.  The Authority may also
similarly identify (or may require Tenant to identify) any Equipment that is
obtained by the Authority or by the Tenant pursuant to Section 1002, to replace
any Equipment.  Tenant shall not remove
any tags or other identification from the Equipment unless instructed to do so
by the Authority.

 

24

 

(B)                                Annual
Itemized List; Audit of Equipment at Leased Premises.  The Authority may, during the Term of this
Lease and within ninety (90) days after the expiration of the Term or earlier
termination of this Lease Agreement, and at the Authority’s cost and expense,
conduct (or cause the Authority’s third party contractor to conduct) an audit
with respect to any and all items of Equipment with an individual value in
excess of Two Thousand Five Hundred Dollars ($2,500) and with respect to any
and all items of Excluded Property.  Tenant
agrees to cooperate with the Authority and its third party contractor during
any audit.  The Authority shall furnish
Tenant with a copy of written report and list of Equipment generated as a
result of the audit.

 

ARTICLE XI

 

FACILITIES OPERATIONS AND SERVICES

 

Section 1101.                          Services.  Except as otherwise provided in this Article
XI and subject to Section 702 (A) and 702 (B), the Authority shall, at its cost
and expense, furnish the following services to Tenant during the Term of this
Lease Agreement:

 

(A)                              Supply
and replacement of light bulbs and tubes in and on all buildings, obstruction
lights and replacement of all glass in the Facilities, including plate glass.

 

(B)                                Provide
janitorial services in the Common Area.

 

(C)                                Cleaning
of stoppages in plumbing fixtures, drain lines and septic and sewage disposal
system to the Leased Premises.

 

(D)                               Maintenance
of all building and overhead doors and door operating systems including weather
stripping and glass replacement.

 

(E)                                 Interior
and exterior maintenance to all components of the Facilities, including
painting, repairing and replacement, as necessary or appropriate, , as
reasonably determined by the Authority in its sole discretion.

 

(F)                                 Maintenance,
repair or replacement of utilities (other than Excluded Property) and Facility
systems serving the Facilities and/or the Leased Premises, to include, without
limitation, sprinkler, life-safety, electrical, mechanical and plumbing in the
Facilities, including but not limited to air conditioning and heating equipment.

 

(G)                                Snow
removal from apron areas, parking areas and roadways, at such time and in such
a manner as determined by the Authority in its reasonable discretion.

 

(H)                               Landscaping,
at such times an in such manner as determined by the Authority in its sole but
reasonable discretion.

 

(I)                                    Provision
and maintenance of hand fire extinguishers for the Facility interior of the
Facilities, excluding Tenant’s Leased Premises, including all shops, parking
and storage areas in accordance with applicable safety codes.

 

25

 

(J)                                   Subject
to such stoppages as are necessary in order to maintain, repair or replace the
pipes, wires, lines, ducts and other related fixtures and equipment relating
thereto, and subject to Section 1102 below, furnish central heat, air
conditioning, and ventilation to the Leased Premises twenty-four (24) hours a
day, seven (7) days a week; provided, however, that the temperatures to be
maintained at particular times during the day, and/or in particular portions of
the Leased Premises, and/or on particular days of the week, shall be as
mutually determined by the Authority and Tenant and failure to do so shall
constitute a default hereunder.

 

Section 1102.                          Authority
Not Liable for Malfunctions.  Should
any of the machinery or equipment utilized in supplying the services listed above
cease to function properly, the Authority shall use diligence to repair the
same within a reasonable time under the circumstances, but Tenant shall have no
right to terminate this Lease Agreement and shall have no claim for rebate of
Rental or damages against the Authority on account of any interruptions of
service occasioned thereby or resulting therefrom unless the interruption
persists for in excess of 7 days. 
Notwithstanding any other provisions hereof, in the event that any Law
now or hereafter in effect shall impose a limit or allocation on the Facilities
of any utility or other service, whether or not the same is to be supplied to
the Facilities or the Leased Premises by the Authority pursuant to this
Section, Tenant shall not use or cause to be consumed on the Leased Premises,
nor shall the Authority be required to provide to the Leased Premises
hereunder, such utility or other service in an amount or in a manner that would
result in violation by the Authority or Tenant of such Law.

 

Section 1103.                          Energy
and Utility Conservation.  Tenant
agrees to cooperate with the Authority and to abide by all rules and
regulations which the Authority may from time to time reasonably prescribe for
the proper function and protection of the heating, air-conditioning and utility
systems and in order to maximize the effect thereof and to conserve and
preserve heat,  air-conditioning and
utilities.  Notwithstanding anything to
the contrary in this Lease Agreement, the Authority may institute such
policies, programs and measures as may be, in Authority’s reasonable judgment,
desired, necessary, required or expedient for the conservation and/or
preservation of energy, energy services, and/or utilities which do not
materially affect Tenant’s business operations, and/or as may be necessary to
comply with applicable Laws.

 

Section 1104.                          Reimbursement
by Tenant.  Tenant shall reimburse the
Authority for any cost or expense incurred by the Authority for services that
are provided by the Authority as a result of the neglect or willful misconduct
of Tenant, its employees, agents, contractors, invitees and/or visitors.

 

ARTICLE XII

 

Intentionally
Deleted

 

26

 

ARTICLE XIII

 

AUTHORITY’S RESERVATIONS

 

Section 1301.                          Improvement, Relocation or Removal.

 

The Authority,
at its sole discretion, reserves the right to further develop or improve the
Air Operations Areas and other portions of the Airport, including without
limitation the right to remove or relocate any structure on the Airport, as it
sees fit, and to take any action it considers necessary to protect the aerial
approaches of the Airport against obstructions, together with the right to
prevent Tenant from erecting or permitting to be erected any building or other
structure on the Airport which, in the opinion of the Authority, would limit
the usefulness of the Airport or constitute a hazard to aircraft.

 

Section 1302.                          Inspection
of Leased Premises.  The Authority,
through its duly authorized agent or agents, shall have at any reasonable time
the full and unrestricted right to enter the Leased Premises for the purpose of
periodic inspection for fire protection, environmental law compliance, for the
purpose of repairs, replacements, and maintenance, for the purpose of
performing the Authority’s obligations under this Lease Agreement, and for the
purpose of investigating compliance by Tenant with the terms of this Lease
Agreement; provided, however, that except in the case of emergency, this right
shall be exercised only upon reasonable prior notice to Tenant.

 

Section 1303.                          Subordination
to U.S. Government.  This Lease
Agreement shall be subordinate to the provisions of any existing or future
agreements between Authority and the United States Government relative to the
operation and maintenance of the Airport, the terms and execution of which have
been or may be required as a condition precedent to the expenditure or
reimbursement to the Authority for Federal funds for the development,
maintenance or operation of the Airport.

 

Section 1304.                          War
or National Emergency.  During the
time of war or national emergency, the Authority shall have the right to lease
the Airport or any part thereof to the United States Government for military
use or otherwise grant it the right to use all or any part of the Airport, and
if any such lease is executed or such right of use granted, the provisions of
this Lease Agreement insofar as they are inconsistent with the lease to the
United States Government shall be suspended.

 

ARTICLE XIV

 

COMMON AREAS

 

Section 1401.                          Definition.  As used in this Lease Agreement, the term “Common
Area” shall mean those portions of the Facilities designated by the Authority,
from time to time, for the common use of all tenants, their agents,
contractors, employees, invitees and visitors, but always including, among
other facilities, the main entrance lobby to the Facilities, hallways,
stairways, access driveways, sidewalks, landscaping, curbs,
Authority-designated loading areas and freight elevators, private streets and
alleys, other areas and improvements provided and designated by

 

27

 

the Authority as being for the
common use of all tenants, their agents, contractors, employees, invitees and
visitors, all of which shall be subject to the Authority’s reasonable
management and control.

 

Section 1402.                          Tenant’s
Use of Common Areas.  The Authority
hereby grants to Tenant, and its agents, contractors, employees, invitees and
visitors, the nonexclusive right to use the Common Areas, as from time to time
constituted, in common with the Authority and all other tenants, and its and
their respective agents, contractors, employees, invitees and visitors.  No portion of the Common Areas shall be used
by Tenant for any purpose whatsoever other than those uses permitted by the
Authority from time to time.

 

Section 1403                             Maintenance.  The Authority shall, at its sole cost and
expense, operate, maintain and repair, or cause to be operated, maintained or
repaired, the Common Areas in such condition and repair which the Authority
reasonably deems prudent or advisable in the exercise of its sole
discretion.  Notwithstanding the
foregoing, Tenant shall fully indemnify, defend, save, and hold harmless the
Indemnified Parties from and against any and all claims, demands, suits,
proceedings, expenses, penalties, fines, damages, losses, attorneys’ fees, and
liabilities (collectively, “Claims”) for damage to any portion of the Common
Areas or any furniture, fixtures, equipment or other personal property of the
Indemnified Parties or any other Person located therein, which result from the
negligence or willful misconduct of Tenant, its employees, contractors,
visitors, agents, and/or invitees, to the extent those Claims are not covered
by the proceeds of insurance maintained by the Authority under this Lease
Agreement.

 

Section 1404.                          Reservation
of Rights.  The Common Areas shall at
all times be subject to the exclusive control and management of the
Authority.  The Authority reserves the
right to perform the following, as and to the extent the Authority reasonably
deems necessary or appropriate from time to time in its sole discretion: to
enter into, modify and terminate licenses, easements and other agreements
pertaining to the operation, maintenance and use of the Common Areas; to change
the area, level, location, size and arrangement of parking areas and other
facilities located in the Common Areas; to designate tenants, their agents,
employees, customers and invitees to use particular parking areas; to close
portions of the Common Areas in order to make changes, additions, deletions,
alterations, improvements or repairs thereto; and to do and perform such other
acts in, to and/or with respect to the Common Areas as the Authority shall
reasonably determine, in its sole discretion, to be necessary or appropriate;
provided, however, that in connection therewith, the Authority shall use
commercially reasonable efforts to prevent obstruction of Tenant’s (or its
employees’, agents’, visitors’, invitees’, and contractors’) right of ingress
to and egress from the Leased Premises and to preserve Common Areas which,
taken as a whole, are functionally equivalent or better than the Common Areas
as they existed on the date of this Lease. 
The Authority shall have the right from time to time to establish,
modify and enforce reasonable rules and regulations regarding the use of Common
Areas and to cause its tenants, concessionaires and suppliers, including
without limitation Tenant, and their respective agents, employees, invitees, visitors,
and contractors to so abide and conform; provided, that such rules and
regulations do not conflict with any term or provision specifically provided in
this Lease Agreement.  The Authority
reserves the right to change the Site and the Facilities, including without
limitation the Common Areas, by adding land and/or buildings thereto and/or by
changing therein the number and location of buildings, building dimensions, the
exterior facade of buildings, the number of floors in any of the buildings, dimensions,
changing the

 

28

 

location and arrangement of
facilities located in the Common Areas, changing the identity and type of other
tenancies, and to do and perform such other acts in and to the Facilities and
Common Areas as the Authority shall determine to be advisable; provided only
that (i) the gross leaseable area of the Leased Premises shall not be
substantially changed, (ii) access to the Leased Premises shall not be
materially impaired, (iii) Tenant’s signage shall not be materially adversely
affected, and (iv) the Common Areas, taken as a whole, remain functionally
equivalent or better than the Common Areas as they existed on the date of this
Lease.  The rights herein conferred upon
and reserved to the Authority do not impose any obligations upon the Authority
to observe or perform those rights, which rights may be observed or performed
as the Authority, in its sole discretion, may determine to be necessary or
appropriate under the circumstances.

 

ARTICLE XV

 

INSURANCE

 

Section 1501                             Authority’s
Insurance. The Authority shall, at its expense, procure, maintain and keep
in force during the Term of this Lease Agreement from a financially secure and
reputable company, (A) casualty insurance insuring the Facilities, including
without limitation the Leased Premises, for such amount as the Authority
determines to be necessary or appropriate but in no event less than the greater
of (i) replacement cost and (ii) the sum of the outstanding balances of the
bond issues of the City of Indianapolis, State of Indiana, and Indianapolis
Airport Authority Special Purpose Facility bonds utilized to finance the Site
and Facilities; and (B) commercial general liability insurance with respect to
the Site and the Facilities and the operation thereof by the Authority,
covering any and all claims for injuries to (including personal injury), or
death of, persons and damage to, or loss of, property, occurring in, on, or
about the Site and Facilities (excepting the Leased Premises), which insurance
shall have a minimum limit of combined coverage of bodily and personal injury,
death and property damage of not less than $100,000,000.00.

 

Section 1502                             Tenant’s
Insurance.

 

(A)                              Casualty
Insurance.   Tenant shall, at its expense, procure, maintain
and keep in force, at all times during the Term of this Lease Agreement,
casualty insurance covering Tenant’s Personal Property, including but not
limited to the Excluded Property, located on, in, or about the Leased Premises,
in such amounts as Tenant determines to be necessary or appropriate.  Tenant acknowledges and agrees that all of
the Personal Property, and all property that Tenant stores for third parties,
shall be kept on, in, or about the Leased Premises at Tenant’s sole risk and
expense.

 

(B)                                Tenant
shall carry comprehensive airline commercial comprehensive general
liability insurance, including aircraft liability, products liability, hangar
keepers liability, and automobile liability coverage with a financially
secure and reputable company, insuring Tenant against liability for personal
injury and bodily injury (including wrongful death) and damage to property
caused by Tenant’s use, occupancy, activities or operations at or on the Leased
Premises and associated apron area, the policy limits thereof to be a combined
single limit of at least $100,000,000.00 for any one occurrence. Tenant shall
name the Indemnified Parties as additional insureds on all such policies of
insurance to the extent Tenant is required to indemnify the

 

29

 

Indemnified Parties, pursuant to Section
1701herein and shall furnish Authority with certificates issued by the
insurance underwriters evidencing the existence of valid policies as aforesaid.
Such certificates shall state that the coverage will not be amended so as to
decrease the protection below the limits specified therein or be subject to
cancellation without 30 days prior written notice to Authority.

 

(C)                                Tenant
shall maintain Workmen’s Compensation insurance in a minimum amount as required
by Indiana Law. Tenant’s comprehensive automobile liability coverage should be
in the minimum amount of $10,000,00 for vehicles with airfield access and
$5,000,000 for vehicles without airfield access for both bodily injury and property
damage.

 

(D)                               In
at any time Tenant shall fail to obtain or maintain in force the insurance
required herein, Authority may notify Tenant of its intention to purchase such
insurance for Tenant’s benefit, and, if Tenant has not delivered evidence of insurance
coverage to Authority before the date on which the current insurance expires,
Authority may effect such insurance by taking our policies in companies
satisfactory to Authority, such insurance to be in amounts no greater than
those specified in this Section 1502 or as may be in effect from time to time.
The amount of the premiums paid for such insurance obtained by Authority shall
be payable by Tenant upon receipt of Authority’s invoice therefor, with
interest at the rate of 18% per year commencing on the date of payment by
Authority.

 

Section 1503.                          Application
of Insurance Proceeds.  The proceeds
of the insurance required to be maintained in accordance with the provisions of
Section 1501 hereof shall be paid and disbursed in accordance with the provisions
of Article XVI hereof.

 

Section 1504.                          Release
and Waiver of Subrogation.  The
Authority and Tenant each hereby mutually release and discharge one another,
and their respective owners, officers, directors, managers, employees and
agents, from any and all liability for loss or damage to their respective
property arising from or caused by any casualty or hazard covered or required
under this Lease Agreement to be covered in whole or in part by insurance on
the Leased Premises, the Facilities or the Site, or the contents thereof, that
is required to be maintained by the releasing party (other than liability for
any deductibles that the releasing party may be required to pay with respect to
such insurance) and hereby waive any right of subrogation which might otherwise
exist in or accrue to any Person (including without limitation their respective
insurers) on account hereof, REGARDLESS OF ANY NEGLIGENCE (except gross or
willful negligence) on the part of the released persons which may have
contributed to or caused such loss or damage, but only to the extent that
proceeds for such loss or damage are actually collectable under said policies.
If the policies of insurance provided for under this Article XV require an
endorsement to provide for continued coverage where there is a waiver of
subrogation, the Authority and Tenant will, respectively, cause their
respective policies to be so endorsed.

 

ARTICLE XVI

 

CASUALTY DAMAGE AND CONDEMNATION

 

Section 1601. Damage
by Casualty. In the event of fire or other casualty in or to any portion of
the Leased Premises, Tenant shall give prompt notice thereof to Authority.

 

30

 

(A)                              Repair
and Restoration.

 

(1)                                  If,
by reason of any casualty cause, the Leased Premises is damaged to such an
extent that the Leased Premises are untenantable in whole, or in substantial
part, then:

 

(a)   If the repairs and
rebuilding necessary to restore the Leased Premises to substantially its
condition prior to the occurrence of the damage can, in the reasonable judgment
of Authority, be completed within 180 days from the date on which the
damage occurred, Authority shall so notify Tenant in writing, and shall proceed
promptly with such repairs and rebuilding, and in such event, the rental for
the Leased Premises shall be abated pro rata for the period from the date of
the occurrence of such damage to the date upon which such repairs and
rebuilding are completed.

 

(b)   If such repairs and
rebuilding cannot, in the reasonable judgment of Authority be completed with
the aforesaid 180 days, Authority or Tenant, at its option, to be
evidenced by notice in writing to the other party, may either: (i) proceed
promptly with said repairs and rebuilding, in which event Tenant’s rental shall
be abated as stated in subparagraph (a) above, or (ii) terminate this Lease
Agreement in which event Tenant’s rental shall be abated from and after the
date of occurrence of the casualty damage.

 

(c)   Authority shall use its
best efforts to assist Tenant with locating alternative space, if
necessary, during any repairs, rebuilding or reconstruction of the Leased
Premises.

 

(d)   Authority shall have no
obligation to repair, restore, or replace any of Tenant’s Personal Property
(including without limitation the Excluded Property) or to make repairs or
restoration beyond the extent of the gross proceeds derived from insurance less
payment of attorneys’ fees and expenses properly incurred in the collection of
those gross proceeds.

 

(e) In no event shall the Authority be liable
to Tenant by reason of any injury to or interference with Tenant’s business or
property arising from a Casualty or by reason of any repairs or restoration to
any part of the Facilities (including without limitation the Leased premises)
necessitated by the Casualty.

 

Section 1602.                          Condemnation.

 

(A)                              Condemnation;
Termination; Restoration.  In the event
of a taking or appropriation of property in the exercise of the power of
eminent domain for a public or quasi-public use or a transfer in lieu of the
exercise of the power of eminent domain (a “Condemnation”) of the entire Leased
Premises or the entire Facilities, this Lease Agreement shall terminate on the
date of the vesting of title to the condemned property or on the date of the
taking of possession of such property by the condemning authority, whichever
shall first occur.

 

31

 

In the event (i) of a Condemnation with
respect to the Leased Premises that exceeds twenty percent (20%) of the Leased
Premises, or (ii) the proceeds available to the Authority from the Condemnation
(and not applied by any lender to then-outstanding indebtedness) are not, in
the Authority’s sole judgment, adequate for the restoration, the Authority
shall have the right to terminate this Lease Agreement by written notice to
Tenant within thirty (30) days after the vesting of title to the condemned
property or the taking of possession of the property by the condemning
authority, whichever is earlier.  In the
event of a Condemnation affecting a portion of the Leased Premises, Tenant
shall have the right to terminate this Lease Agreement if more than twenty
percent (20%) of the Leased Premises then Occupied by Tenant is taken as part
of the Condemnation, by providing written notice of termination to the
Authority within thirty (30) days after the vesting of title to the condemned
property or the taking of possession of the property by the condemning
authority, whichever is earlier.  Such
termination as to the portion of the Leased Premises that is taken by the
condemning authority shall be effective as of, and retroactive to, the earlier
of the date when the condemning authority takes possession or the date when
title to the condemned property vests in the condemning authority.  If less than all of the Leased Premises is
taken, such termination as to that portion of the Leased Premises not taken
shall be effective as of the later of (1) the date when exclusive possession of
that portion of the Leased Premises not subject to the Condemnation is surrendered
by Tenant to the Authority, or (2) the date of vesting of title to the
condemned property or the date of taking of possession of the property by the
condemning authority (whichever is earlier). 
Until such time as this Lease Agreement is fully terminated pursuant to
the preceding sentences, Tenant shall be obligated to continue to pay Rental equitably
and proportionately abated to reflect any untentable portions of the Leased
Premises and all other payments specified in Article VI hereof.  If the Authority elects to continue this
Lease Agreement in effect, the Authority shall be responsible, to the extent of
Net Proceeds available (and not applied by any lender to then-outstanding
indebtedness), for performance of all work necessary to make the Leased
Premises (or such portion thereof as was not taken in Condemnation) usable by
Tenant in addition to all work necessary in other portions of the Facilities as
a result of such taking.

 

(B)                                Application
of Proceeds.  The Net Proceeds from the
Condemnation may be applied in one or more of the following ways as determined
by the Authority:

 

(1)           To
the extent neither party terminates this Lease Agreement as provided above,
toward the restoration of the Leased Premises (or such portion thereof that
were not taken in Condemnation) and Facilities (or such portion thereof that
were not taken in Condemnation) to substantially the same condition as existed
prior to the exercise of the power of eminent domain, to the extent of Net
Proceeds available from the Condemnation (and not applied by any lender to
then- outstanding indebtedness);

 

(2)           To
the extent neither party terminates this Lease Agreement as provided above,
toward the construction or acquisition of other improvements suitable for
Tenant’s operations on the remaining portion of the Leased Premises (which
improvements shall be deemed a part of the Facilities and available for use and
occupancy by Tenant without the payment of any rent other than as herein
provided to the same extent as if such other improvements were specifically
described herein and demised hereby), to the extent of Net Proceeds available
from the Condemnation (and not applied by any lender to then-outstanding
indebtedness); or

 

32

 

(3)           To
the extent either party terminates this Lease Agreement as provided above,
payment of such proceeds to the Authority.

 

(C)                                Condemnation
of Tenant’s Personal Property.  All
compensation awarded for any such taking or conveyance of the Authority’s
interest shall be the property of the Authority without deduction therefrom for
any present or future estate of Tenant, and Tenant hereby assigns to the
Authority all right, title and interest in and to such award.  However, Tenant shall have the right to
recover from the condemning authority, but not from the Authority, such
compensation as may be awarded to Tenant, if applicable, on account of moving
and relocation expenses and depreciation to and removal of Tenant’s property.

 

(D)                               Taking
or Condemnation by the Authority.  If the
Authority exercises its right of condemnation or eminent domain with respect to
all or substantially all of the Leased Premises for the purposes set forth in
Section 1301 hereof, the Authority reserves the right, on eighteen (18) months
notice, to relocate or replace the Facilities in substantially similar form at
another comparable location on the Airport or to replace such portion of the
Leased Premises; provided, however, Tenant shall have the right to terminate
this Lease Agreement as and to the extent permitted pursuant to Section 1602;
and provided further, that if Tenant does not exercise such termination right
pursuant to Section 1602, that following such relocation or replacement, the
Leased Premises are substantially similar to and can be operated in a manner
substantially similar to the Leased Premises prior to such relocation or
replacement and Tenant’s Business can be operated in a manner substantially
similar to Tenant’s Business prior to such relocation or replacement.  The new location shall constitute thereafter
the Leased Premises and the facilities or improvements located thereon, and
equipment thereof, shall thereafter constitute the Facilities for purposes of
this Lease Agreement.  The relocation of
the Leased Premises shall be at no cost to Tenant and the new Facilities must
be ready for occupancy by Tenant prior to the date of required relocation
subject to moving Tenant’s Excluded Property and the Equipment to the new
relocated Facilities.  If the Authority
complies with the provisions of this Section, such remedies shall be in lieu of
any remedies Tenant may have pursuant to law or equity with respect to the
actions taken by the Authority in condemning the Leased Premises or relocating
the Leased Premises.

 

ARTICLE XVII

 

GENERAL INDEMNITY

 

Section 1701.                          Indemnity.  Except as provided in Section 705 (B) hereof,
Tenant agrees fully to indemnify, defend, save and hold harmless the
Indemnified Parties and their respective representatives, director, officers,
employees or agents from and against all liabilities, losses, Claims, actions,
judgments, administrative proceedings, fines, settlement demands, penalties,
and damages of any nature or character ( and all reasonable expenses incidental
to the investigation and defense thereof including Indemnified Parties’
reasonable attorney fees) based on or arising out of personal injury or bodily
injury ( including wrongful death) to person or persons or damage to property
caused by, or arising out of the use, occupancy, activities or operations of
Tenant, its owners, managers, officers, directors, employees, invitees, agents
or representatives at or on the Leased Premises, associated apron area, or
Airport, including without limitation,

 

33

 

Claims based
on or arising out of a breach by Tenant of this Lease Agreement or of any
applicable Laws; provided that Tenant shall not be liable for any injuries,
death, damage or loss to the extent that such injury, death, damage or loss is
caused by the fault or negligence of Indemnified Parties, their respective
agents or employees; and provided further that Authority shall give to tenant
prompt and reasonable notice of any such claims or actions. The provisions of
this Section shall survive the expiration or early termination of this Lease
Agreement.

 

ARTICLE XVIII

 

EVENTS OF
DEFAULT BY AUTHORITY

 

Section 1801.                          Events
of Default by Authority.  It shall
constitute an Event of Default by the Authority if the Authority fails to
observe and perform any covenant, condition or agreement on its part to be
observed or performed in this Lease Agreement for a period of thirty (30) days
after Tenant gives written notice to the Authority, specifying the failure and
requesting that it be remedied.  If a
failure under this subsection is such that it cannot be corrected within the
applicable period, it shall not constitute an Event of Default under this
Article XVIII if corrective action is instituted by the Authority within the
applicable period and is diligently pursued until the failure is corrected, but
such additional applicable period shall not exceed sixty (60) days without the
written consent of Tenant.

 

Section 1802.                          Remedies
of Tenant on Default.  If any Event
of Default referred to in Section 1801 occurs, Tenant may institute any action
at law or in equity against the Authority as may appear necessary or desirable
to enforce the performance and observance of any covenant, condition or
obligation of the Authority hereunder, to recover damages for the Authority’s
non-performance or non-observance of the same.

 

Section 1803.                          No
Additional Waiver Implied By One Waiver; Consents to Waiver.  The waiver by Tenant of any breach by the
Authority of any of its covenants, conditions or obligations under this Lease
Agreement shall not operate as a waiver of any subsequent breach of the same or
a waiver of any breach of any other covenant, condition, or obligation under
this Agreement.  Tenant’s forbearance to
seek a remedy for any breach by the Authority shall not be a waiver by Tenant
of any of its rights and remedies with respect to the breach or any subsequent
breach of the same covenant, condition or obligation or with respect to any
other breach.

 

Section 1804.                          Delay
Not a Waiver.  No delay or omission
by Tenant to exercise any right or power accruing upon any Event of Default by
the Authority shall impair any such right or power of Tenant or be construed to
be a waiver of any Event of Default by the Authority or any acquiescence
therein, and every power or remedy given by this Lease Agreement to Tenant may
be exercised from time to time and as often as may be deemed expedient.  Tenant may waive any Event of Default by the
Authority that in its opinion has been remedied before the entry of final
judgment or decree in any suit, action or proceeding instituted by it under the
provisions of this Lease Agreement or before the completion of the enforcement
of any other remedies under this Lease Agreement, but no such waiver shall
extend to or affect any other existing or subsequent Event of Default by the
Authority or impair any rights or remedies consequent thereon.

 

34

 

ARTICLE XIX

 

EVENTS OF DEFAULT BY TENANT

 

Section 1901                             Events
of Default By Tenant.  The following
shall constitute Events of Default by Tenant:

 

(A)                              The
failure to pay all installments of Rental when due (with interest) if
applicable under Article VI hereof on the date required for such payment., and
Tenant fails to cure that failure within thirty (30) days after Tenant’s
receipt of written notice from the Authority.

 

(B)                                Intentionally
deleted.

 

(C)                                Intentionally
deleted.

 

(D)                               The
entry of an order for relief against Tenant as a debtor pursuant to any
involuntary bankruptcy proceedings.

 

(E)                                 The
taking of control of Tenant or its assets by a court of competent jurisdiction
pursuant to proceedings brought under the provisions of any Federal
reorganization act.

 

(F)                                 The
appointment of a receiver or a trustee for Tenant’s assets by a court of
competent jurisdiction or a voluntary agreement with Tenant’s creditors.

 

(G)                                The
failure by Tenant to obtain, maintain, and keep in force at all times during
the Term of this Lease Agreement the insurance coverages that Tenant is
required to obtain, maintain and keep in force pursuant to Article XV
above.  , and Tenant fails to cure that
failure within thirty (30) days after Tenant’s receipt of written notice from
the Authority.  

 

(H)                               Abandonment
or vacation of the Leased Premises without payment of rental by Tenant for a
period of more than sixty (60) consecutive days without the prior written
consent of the Authority.

 

(I)                                    The
failure by Tenant to observe and perform any covenant, condition or agreement
on its part to be observed or performed pursuant to this Lease Agreement (other
than those sections referred to in subsections (A) through (H) above) for a
period thirty (30) days after written notice to Tenant specifying such failure
and requesting that it be remedied, given to Tenant by the Authority unless the
Authority shall agree in writing to an extension of such time prior to its
expiration.  If a failure under this Section
is such that it cannot be corrected within the applicable period, it shall not
constitute an Event of Default under this Article XIX if corrective action is
instituted by Tenant within the applicable period and diligently pursued until
the failure is corrected, but such additional applicable period shall not
exceed sixty (60) additional days without the written consent of the Authority.  . 
Notwithstanding the foregoing, if any failure by Tenant to observe and
perform any covenant, condition or agreement on its part to be performed
pursuant to this Lease Agreement would materially impact the fundamental
operational

 

35

 

capability of the Facilities or Airport
operations, it shall be an Event of Default if Tenant does not cure such
failure within three (3) days after written notice from the Authority.

 

Section 1902.                          Certain
Remedies of the Authority on Rental Default.

 

(A)                              Upon
the occurrence of any Event of Default by Tenant, the Authority may, without
giving Tenant notice, except as required in Section 1901:  (i) declare all amounts payable under Article
VI to be due and payable immediately; and (ii) may take whatever action at law
or in equity as may appear necessary or desirable to collect the Rentals, and
any other amounts then due and thereafter to become due pursuant to Article VI
hereof, to recover damages for Tenant’s non-payment or to terminate this Lease
Agreement without terminating Tenant’s obligations to pay damages or Rentals.

 

(B)                                If,
at any time after the has filed any suit, action or proceeding instituted on
account of the default and before the final adjudication of the termination of
this Lease Agreement, every default in the observance or performance of any
covenant, condition or agreement contained in this Lease Agreement has been
remedied to the satisfaction of the Authority, then and in every such case the
Authority may, by written notice to Tenant, rescind and annul the declaration
and its consequences, but no rescission or annulment shall extend to or affect
any subsequent Event of Default or impair any right consequent thereon.

 

Section 1903.                          Additional
Remedies of Authority on Default.

 

(A)                              If
any Event of Default referred to in Section 1901 occurs, the Authority may, in
its own name and for its own account, in addition to any exercise by the
Authority of any other remedy provided for in this Lease Agreement or by
statute, institute any action at law or in equity against Tenant as may appear
necessary or desirable to collect such Rentals and any other amounts then due
under this Lease Agreement, or to enforce the performance and observance of any
covenant, condition or obligation of Tenant hereunder, or to recover damages
for Tenant’s nonpayment, non-performance or non-observance of the same or to
terminate Tenant’s right to possession or terminate this Lease Agreement
subject, however, to Authority’s obligation to mitigate damages.

 

(B)                                If,
at the time the Authority elects to proceed to enforce its remedies pursuant to
subsection (A) hereof for an Event of Default under Section 1901, the Authority
may by appropriate judicial proceedings also proceed to evict Tenant from
possession of the Leased Premises and the Authority may thereafter retake
possession of the Leased Premises while the Event of Default continues.  Notwithstanding these actions, Tenant shall
continue to be obligated to make the Rental payments due pursuant to Article VI
hereof.

 

Section 1904                             Tenant
to Remain Liable for Payments; Reletting.

 

(A)                              Notwithstanding
the exercise by the Authority of its remedies under Sections 1902 or 1903
hereof, Tenant shall continue to be liable for the payment of all Rentals
payable under Article VI hereof and other amounts payable under this Lease
Agreement and Tenant shall make such payments at the same times and in the same
manner as provided in this Lease Agreement, except as provided in Section
1904(B) hereof.

 

36

 

(B)                                The
Authority shall use reasonable efforts to relet the Leased Premises for rentals
equal to the full Rentals due from Tenant pursuant to Article VI hereof.

 

Section 1905                             Intentionally
deleted.

 

Section 1906                             No
Remedy Exclusive.  No remedy herein
conferred upon the Authority is intended to be exclusive of any other available
remedy or remedies, and each remedy shall be cumulative and shall be in
addition to every other remedy given under this Lease Agreement or now or
hereafter existing at law or in equity or by statute.  No delay or omission to exercise any right or
power accruing upon any default granted under this Lease Agreement shall impair
any right or power or shall be construed to be a waiver thereof, and any such
right or power may be exercised from time to time and as often as may be deemed
expedient, and the exercise of any one right or remedy shall not impair the
right of the Authority, to exercise any or all other remedies under this Lease
Agreement.

 

Section 1907                             No
Additional Waiver Implied By One Waiver; Consents to Waiver.  The waiver by the Authority of any breach by
Tenant of any of its covenants, conditions or obligations under this Lease
Agreement shall not operate as a waiver of any subsequent breach of the same or
a waiver of any breach of any other covenant, condition, or obligation under
this Lease Agreement.  Nor shall the
Authority’s forbearance to seek a remedy for any breach by Tenant be a waiver
by the Authority of any of its rights and remedies with respect to the breach
or any subsequent breach of the same covenant, condition or obligation or with
respect to any other breach.

 

Section 1908                             Waiver
of Statutory Notice to Quit.  If the
Authority exercises its right to terminate this Lease Agreement upon the
happening of any Event of Default or other provision to which such right of
termination applies, a notice of termination shall be sufficient to terminate
this Lease Agreement; and, upon receipt of the same, Tenant hereby agrees that
it will forthwith surrender possession of the Leased Premises to the
Authority.  In this connection, Tenant
hereby expressly waives the receipt of any notice to quit or notice of
termination that would otherwise be given by the Authority.  In addition, all rights of Tenant to the
Leased Premises shall be forfeited; provided, however, that the Authority shall
have and reserve all of its available remedies at law as a result of said
breach of this Lease Agreement.  Failure
of the Authority to declare this Lease Agreement terminated upon any event
described in Section 1908 hereof shall not operate to bar, destroy or waive the
right of the Authority to cancel this Lease Agreement by reason of any
subsequent or other event described in Section 1908 hereof.

 

Section 1909.                          Intentionally
deleted.

 

Section 1910.                          Suspension
of Lease Agreement.  During the time
of war or national emergency, the Authority shall have the right to lease or
grant the right of use over the landing area or any part of the Airport to the
United States Government for military use. 
If any such lease is executed or grant given, any provisions of this
instrument which are inconsistent with the provisions of the agreement or
arrangement with the United States Government shall be suspended, provided that
the term of this Lease Agreement shall be extended by the amount of the period
of suspension; provided, however, that during any such suspension which shall

 

37

 

prevent Tenant from use of the
Leased Premises Tenant’s obligations to pay Rentals pursuant to Article VI
shall likewise be suspended.

 

Section 1911.                          Delay
Not A Waiver.  No delay or omission
by the Authority to exercise any right or power accruing upon any Event of
Default by Tenant shall impair any such right or power of the Authority or be
construed to be a waiver of any Event of Default by Tenant or any acquiescence
therein, and every power or remedy given by this Lease Agreement to the
Authority may be exercised from time to time and as often as may be deemed
expedient.  The Authority may waive any
Event of Default by Tenant that in its opinion has been remedied before the
entry of final judgment or decree in any suit, action or proceeding instituted
by it under the provisions of this Lease Agreement or before the completion of
the enforcement of any other remedies under this Lease Agreement, but no such
waiver shall extend to or affect any other existing or subsequent Event of
Default by Tenant or impair any rights or remedies consequent thereon.

 

ARTICLE XX

 

RIGHTS UPON TERMINATION

 

Section 2001.                          Improvements.  It is the intent of this Lease Agreement that
the Leased Premises, including without limitation all improvements and
Equipment, shall be and remain the property of Authority both during the entire
Term of this Lease Agreement, subject to Tenant’s

 

leasehold estate, and after the expiration of the Term.

 

Section 2002.                          Excluded
Property.  Upon expiration or earlier
termination of this Lease Agreement, Tenant shall remove all of Tenant’s
Personal Property, including without limitation Excluded Property, from the
Leased Premises within thirty (30) days after the effective date of the
termination and make all necessary or appropriate repairs to the Leased
Premises resulting from such removal so as to restore the Leased Premises to
proper operating condition, ordinary wear and tear, casualty and condemnation
excepted.  If Tenant fails to timely
remove all or any portion of the Excluded Property, the Authority may
thereafter elect to remove the Excluded Property (or any part thereof) at
Tenant’s expense or elect to deem such excluded Property or any part thereof as
abandoned by Tenant to the Authority.

 

ARTICLE XXI

 

ASSIGNMENT AND SUBLETTING

 

Section
2101.                          Subleases and Assignments.

 

(A)                              Tenant shall not assign this Lease Agreement or
any part thereof in any manner whatsoever or assign any of the privileges
recited herein without the prior written consent of the Authority, which shall
not be unreasonably withheld.  In the
event of an assignment, Tenant shall remain liable to the Authority to perform
all of the obligations of Tenant hereunder upon failure of the assignee to
perform the same,, unless the Authority has agreed to release Tenant.  The assignee shall not assign this Lease
Agreement except with the prior written approval of the

 

38

 

Authority, which shall not be unreasonably witheld; and any assignment
by Tenant shall contain a clause to this effect.

 

(B)                                If a change of control (by way of merger,
consolidation, or other business combination, or by way of one or more
issuances or transfers of ownership interests) in Tenant or in any Entity that
directly or indirectly controls the day-to-day operations and management of
Tenant and/or directly or indirectly owns a controlling voting or equity
interest in Tenant (a “Change of Control”) occurs, Tenant shall immediately
notify the Authority, in writing, of the occurrence thereof and shall promptly
provide the Authority with such non-confidential and non-proprietary
information (including, without limitation, financial statements and other
financial information, and copies of documents executed and delivered by the
parties to the Change of Control) as the Authority shall reasonably request.
Change of Control shall not be deemed to constitute a consent or approval by
the Authority to additional or future Changes of Control.

 

(C)                                Notwithstanding anything contained in this Lease
to the contrary, the Authority’s consent shall not be required in the event of
an assignment or subletting to (i) a parent, subsidiary, or affiliated
corporation of Tenant or Tenant’s parent, (ii) in connection with a merger,
consolidation, or reorganization of Tenant, or (iii) in connection with a sale
of all or substantially all of Tenant’s assets or stock provided, however, that
Tenant provides prior notice of such assignment or subletting.

 

Section
2102                             Subletting.  Except as permitted in Section
2101 above, Tenant shall not sublease or permit any part of the Leased Premises
to be occupied by others without the prior written consent of Authority, which
consent shall not be unreasonably withheld, conditioned or delayed.  In the event of a sublease, Tenant shall
remain liable to the Authority to perform all of the obligations of Tenant
hereunder upon failure of the subtenant to perform the same.  The subtenant shall not assign or sublease
this Lease Agreement except with the prior written approval of the Authority,
which shall not be unreasonably withheld; and any sublease shall contain a
clause to this effect.

 

Section 2103.                          Mortgages,
Liens, and Security Interests Prohibited. 
Tenant agrees not to place any that there shall be no leasehold lien,
mortgage, security interest, claim, charge or other encumbrance granted or
permitted on the Site, the Facilities, the Leased Premises or Tenant’s
leasehold estate in favor of any third party other than the Authority.

 

ARTICLE XXII

 

GENERAL PROVISIONS

 

Section 2201.                          Non-Interference
with Operation of Airport.  Tenant,
by accepting this Lease Agreement, expressly agrees for itself and its
successors and assigns that it will not make use of the Leased Premises in any
manner that might interfere with the landing and taking off of aircraft at the
Airport or otherwise might constitute a hazard. 
If this covenant is breached, the Authority reserves the right to enter
upon the Leased Premises, and cause the abatement of any interference at the
expense of Tenant.

 

39

 

Section 2202.                          Binding
Upon Successors and Assigns; No Intent to Benefit Third Parties.  All of the terms and conditions of this Lease
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and assigns. 
Except as otherwise expressly provided in this Lease Agreement, the
provisions of this Lease Agreement are not intended to, and shall not, benefit
any person other than the parties to this Lease Agreement, and the provisions
hereof are not intended to, and shall not create any third party beneficiary
right in any person.

 

Section 2203.                          Entire
Agreement; Amendments.  This Lease
Agreement, and the Exhibits and Addenda referred to herein which form a part of
this Lease Agreement, contain the entire understanding of the parties hereto
with respect to the subject matter hereof. 
There are no representations, promises, warranties, covenants or
undertakings of the parties other than those expressly set forth or provided
for herein or therein.  This Lease
Agreement supersedes all prior agreements and understandings between the
parties with respect to the transactions contemplated by this Lease
Agreement.  No provision of this Lease
Agreement may be amended except in a writing signed by both parties, and no
such amendment shall extend to anything other than the specific subject matter
thereof.

 

Section 2204.                          Waiver.  The party for whose benefit a warranty,
representation, covenant or condition is intended may in writing waive any
inaccuracies in the warranties and representations contained in this Lease
Agreement or waive compliance with any of the covenants or conditions contained
herein and so waive performance of any of the obligations of the other party
hereto and any defaults hereunder; provided, however, that such waiver must be
in writing, and shall not affect or impair the waiving party’s rights with
respect to any other warranty, representation, condition or covenant or any
default hereunder, nor shall any waiver constitute a continuing waiver.

 

Section 2205.                          Section
Headings.  The Section headings
contained herein are for convenience of reference and are not intended to
define or limit the scope of any provision of this Lease Agreement.

 

Section 2206.                          Governing
Law; Interpretation.  This Lease
Agreement and all transactions contemplated hereby shall be governed, construed
and enforced in accordance with the Laws of the State of Indiana, and shall be
treated in all respects as a State of Indiana contract, without regard to any
state’s Laws related to choice or conflict of laws. The terms and conditions of
this Lease Agreement represent the results of bargaining and negotiations
between the parties, each of which has been represented by counsel of its own
selection, and neither of which has acted under duress or compulsion, whether
legal, economic, or otherwise, and represent the results of a combined
draftsmanship effort.  The terms and
conditions hereof shall be interpreted and construed in accordance with their
usual and customary meanings and the parties hereby expressly waive and
disclaim any rule of law or procedure requiring otherwise, specifically
including but not limited to any rule of law to the effect that ambiguous or
conflicting terms or conditions shall be interpreted or construed against the
party who (or whose counsel prepared this Lease Agreement or any earlier draft
hereof.

 

40

 

Section 2207.                          Relationship.
Nothing contained in this Lease shall be deemed to constitute a partnership,
joint venture, agency, or any other relationship between the Authority and
Tenant, other than the relationship of landlord and tenant.

 

Section
2208.                          Notices.  Whenever any notice, consent,
approval, or payment is required by this Lease Agreement to be made, given or
transmitted to the parties hereto, that notice or payment shall be enclosed in
an envelope with sufficient postage attached to insure delivery and deposited
in the United States Mail, certified or registered mail, addressed to:

 

	
  (a)

  	
  If to the Authority:

  	
  Indianapolis Airport Authority

  
	
   

  	
   

  	
  Indianapolis International Airport

  
	
   

  	
   

  	
  2500 S. High School Road

  
	
   

  	
   

  	
  Suite 100

  
	
   

  	
   

  	
  Indianapolis, Indiana 46241-4941

  
	
   

  	
   

  	
  Attention: Airport Director

  
	
   

  	
   

  	
   

  
	
  (b)

  	
  If to Tenant:

  	
  Chautauqua Airlines, Inc.

  
	
   

  	
   

  	
  8909 Purdue Rd., Suite 300

  
	
   

  	
   

  	
  Indianapolis, IN 46268

  
	
   

  	
   

  	
  Attention:  CFO

  

 

or to such
other or different address as either party shall by written directive designate
in the manner herein provided.

 

Section 2209                             Counterparts.  This Lease Agreement may be simultaneously
executed in two or more counterparts, and by each of the parties on separate
counterparts, each of which shall be deemed an original and all of which shall
constitute but one and the same instrument.

 

41

 

	
  Exhibit A -

  	
  Site

  
	
  Exhibit B -

  	
  Facilities;
  Portion to Be Leased to Tenant

  
	
  Exhibit C -

  	
  Permitted
  Encumbrances

  
	
  Exhibit D -

  	
  Prohibited
  Aircraft Parking Area

  
	
  Exhibit E -

  	
  Equipment

  

 

42

 

IN WITNESS
WHEREOF, the parties hereto have caused this instrument to be executed as of
the Effective Date at Indianapolis, Indiana.

 

	
   

  	
  INDIANAPOLIS AIRPORT AUTHORITY

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Lacy M. Johnson, President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  H. Patrick Callahan, Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  David E. Mansfield, Secretary

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Michael W. Wells, Member

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Shirley M. Haflich, Member

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Robert H. Voorhies, Member

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  N. Stuart Grauel, Member

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AUTHORITY

  

 

 

	
  CHAUTAUQUA
  AIRLINES, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
  TENANT

  	
   

  
					

 

43

 

Attest:

 

 

                             ,

 

	
  STATE OF INDIANA

  	
  )

  
	
   

  	
  ) SS:

  
	
  COUNTY OF MARION

  	
  )

  

 

Before me, a
Notary Public in and for said County and State, personally appeared Lacy M.
Johnson, H. Patrick Callahan, David E. Mansfield, Michael W. Wells, Shirley M.
Haflich, Robert H. Voorhies, and N. Stuart Grauel, respectively, of the
Indianapolis Authority, and acknowledged the execution of the foregoing
instrument as such officers acting for and on behalf of the Indianapolis
Authority.

 

WITNESS my
hand and Notarial Seal this                      
day of                                 ,
2004.

 

	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Printed

  	
  Notary
  Public

  	
   

  
	
   

  	
   

  
	
  My Commission Expires:

  	
  My County of Residence:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						

 

SEAL

 

44

 

	
  STATE OF INDIANA

  	
  )

  
	
   

  	
  ) SS:

  
	
  COUNTY OF MARION

  	
  )

  

 

Before me, a
Notary Public in and for said County and State, personally appeared                        
the                         
of                                                ,
and acknowledged the execution of the foregoing instrument as such officer
acting for and on behalf of said                   .

 

WITNESS my
hand and Notarial Seal this            
day of                  ,
2004.

 

	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Printed

  	
  Notary
  Public

  	
   

  
	
   

  	
   

  
	
  My Commission Expires:

  	
  My County of Residence:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						

 

SEAL

 

KJS – 12/16/04

 

45

 

EXHIBIT B

 

DESCRIPTION OF
FACILITIES TO BE LEASED TO TENANT

 

Hangar 7 (consisting of “ground level” and Bays 7A and 7B, and
associated office, storage and employee support space), all as shown in more
detail in the drawings attached hereto as Exhibits B-1 – B-7.  The approximate square footage of each Bay is
shown on Exhibits B-1 – B-7 attached hereto.

 

 

Square footage:  approximately
48,923.33 square feet

 

Additional square footage: 
approximately 26,069

 

Mezzanine square footage:  not in
use

 

46

 

EXHIBIT E

 

EQUIPMENT

 

 

Tenant shall
be allowed to use tables, chairs and lockers located in Leased Premises.

 

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EXHIBIT 4.3  

 
 

AMENDMENT NO. 3 TO
  RIGHTS AGREEMENT    
    

        The Rights Agreement, dated as of January 31, 1994, by and between Ultimate Electronics, Inc., a Delaware corporation (the
"Company"), and Norwest Bank Minnesota, National Association, as rights agent (the "Rights Agent"), as
amended by Amendment No. 1 to Rights Agreement, dated January 31, 1995, and by Amendment No. 2 to Rights Agreement dated September 7, 2004 (the
"Rights Agreement"), is hereby amended as of January 11, 2005. Capitalized terms used without definition herein are as defined in the Rights
Agreement. 

        WHEREAS,
the Company has entered into a Stock Purchase Agreement (the "Purchase Agreement") dated as of January 11, 2005 between
the Company and Mark Wattles Enterprises, LLC, a Delaware limited liability company (the "Purchaser"), pursuant to which the Purchaser will acquire
6,850,000 shares of the Company's common stock, $0.01 par value per share (the "Common Shares"), from the Company, and has granted Purchaser an option
to purchase 1,850,000 Common Shares (the "Company Option") pursuant to an Option Agreement between the Company and Purchaser (the
"Company Option Agreement"). 

        WHEREAS,
as a condition to Purchaser's consummation of the transactions contemplated by the Purchase Agreement, William Pearse, a director and stockholder of the Company, and his spouse
Barbara Pearse ("the Pearses"), has granted Purchaser an option (the "Stockholder Option") to purchase
1,804,324 Common Shares beneficially owned by them pursuant to the Option Agreement dated January 11, 2005 between the Purchaser and the Pearses (the "Option
Agreement"). 

        WHEREAS,
upon the issuance of the 6,850,000 Common Shares (the "Shares") to the Purchaser pursuant to the Purchase Agreement, and the
acquisition of the Company Option and the Stockholder Option, the Purchaser will beneficially own in excess of 15% of the issued and outstanding Common Shares of the Company. 

        WHEREAS,
in connection with its approval of the Purchase Agreement and The Company Option Agreement, and the transactions contemplated thereby, the Company's Board of Directors has
authorized amendments to the Rights Agreement necessary to make the provisions of the Purchase Agreement, the Company Option Agreement and the Stockholder Option Agreement, and the transactions
contemplated thereby, inapplicable to the Purchaser's acquisition of the Shares pursuant to the Purchase Agreement and of the option and the Option Shares pursuant to the Option Agreement. 

        WHEREAS,
the Company and the Rights Agent desire to amend the Rights Agreement as set forth herein in accordance with Section 27 of the Rights Agreement. 

        NOW,
THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the Company and the Rights Agent hereby amend the Rights Agreement and agree as follows: 

        1.    Amendment to Add New Subsections to Section 1.    Section 1 of the Rights Agreement is
hereby amended to add the following new subsections in alphabetical order thereto: 

        (s)   "Company
Option Agreement" shall mean the Option Agreement dated January 11, 2005 between MWE and the Company, as the same may be amended from time to time in
accordance with the terms thereof. 

        (t)    "Option
Shares" shall mean, collectively, up to 1,850,000 Common Shares purchasable upon exercise of the option granted by the Company to MWE under the Company Option
Agreement and up to 1,804,324 Common Shares purchasable upon exercise of the Stockholder Option Agreement, pursuant to the terms and conditions thereof. 

        (u)   "Purchase
Agreement" shall mean the Stock Purchase Agreement dated January 11, 2005 between the Company and MWE, as the same may be amended from time to time in
accordance with the terms thereof. 

 

        (v)   "Shares"
shall mean 6,850,000 Common Shares purchased by MWE from the Company pursuant to the terms and conditions of the Purchase Agreement. 

        (w)  "Stockholder
Option Agreement" shall mean the Option Agreement dated January 11, 2005 among William Pearse, Barbara Pearse and Purchaser, as the same may be
amended from time to time in accordance with the terms thereof. 

        (x)   "MWE"
shall have the meaning given such term in Section 1(i). 

        2.    Amendment to Section 1(i).    The definition of "Exempt Person" in Section 1(i) of the
Rights Agreement is hereby amended to add the following at the end of the first sentence preceding the proviso in Section 1(i): "or Mark Wattles Enterprises, LLC, a Delaware limited liability
company (together with its Affiliates, "MWE")". 

        3.    Amendment to Section 1(q).    Current Section 1(q) of the Rights Agreement is hereby amended to
add the following sentence at the end of the current last sentence thereof: 

"Notwithstanding
anything to the contrary herein, no Shares Acquisition Date shall occur as a result of the approval, execution, delivery, announcement or performance of the Purchase Agreement, the
Company Option Agreement or the Stockholder Option Agreement, or the consummation of the transactions contemplated thereby, including the purchase of the Shares and the acquisition of the Option
Shares upon exercise of the Company Option Agreement and the Stockholder Option Agreement." 

        4.    Amendment to Section 3(a).    Section 3(a) of the Rights Agreement is hereby amended to add
the following sentence at the end of the current last sentence thereof: 

"Notwithstanding
anything to the contrary herein, no Distribution Date shall occur, and no provisions of this Section 3(a) shall become applicable, as a result of the approval,
execution, delivery, announcement or performance of the Purchase Agreement, the Company Option Agreement or the Stockholder Option Agreement, or the consummation of the transactions contemplated
thereby, including the purchase of the Shares and the acquisition of the Option Shares upon exercise of the Company Option Agreement and the Stockholder Option Agreement." 

        5.    Amendment to Section 11.    Section 11 of the Rights Agreement is hereby amended to add the
following sentence at the end of the current last sentence of the introductory paragraph thereof: 

"Notwithstanding
anything to the contrary herein, no Section 11(a)(ii) Trigger Date shall occur, and no provisions of this Section 11 shall become applicable (and no notice
obligations under Section 25(b) shall become applicable), as a result of the approval, execution, delivery, announcement or performance of
the Purchase Agreement, the Company Option Agreement or the Stockholder Option Agreement, or the consummation of the transactions contemplated thereby, including the purchase of the Shares and the
acquisition of the Option Shares upon exercise thereof of the Company Option Agreement and the Stockholder Option Agreement." 

        6.    Amendment to Section 13.    Section 13 of the Rights Agreement is hereby amended to add the
following sentence as the introductory paragraph thereof: 

"Notwithstanding
anything to the contrary herein, no provisions of this Section 13 shall become applicable (and no notice obligations under Section 25(b) shall become applicable)
as a result of the approval, execution, delivery, announcement or performance of the Purchase Agreement, the Company Option Agreement or the Stockholder Option Agreement, or the consummation of the
transactions contemplated thereby, including the purchase of the Shares and the acquisition of the Option Shares upon exercise of the Company Option Agreement and the Stockholder Option Agreement." 

2

 

        7.    Effect of Amendment.    Except as expressly modified herein, the Rights Agreement shall remain in full force and
effect. 

        8.    Counterparts.    This Amendment No. 3 to Rights Agreement may be executed in any number of counterparts,
and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 

[SIGNATURE
PAGES FOLLOW] 

3

 

        IN
WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to Rights Agreement to be duly executed, all as of the day and year first above written. 

	

 	
 	
ULTIMATE ELECTRONICS, INC.
	
 	
 	

By:	
 	

/s/  DAVID A. CARTER      

	 	 	Name:	 	David A. Carter
	 	 	Title:	 	Chief Financial Officer
	

 	
 	
NORWEST BANK MINNESOTA, NA as Rights Agent
	
 	
 	

By:	
 	

/s/  CHERYL KELLY      

	 	 	Name:	 	Cheryl Kelly
	 	 	Title:	 	Officer

4

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AMENDMENT NO. 3 TO RIGHTS AGREEMENT

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