Document:

Exhibit 10.13

 

Double
Eagle II Airport

Hangar
Lease

 

Utilicraft
Aerospace Industries, Inc.

 

Table of
Contents

 

	
  Section 1.

  	
  Recitals

  	
   

  
	
  Section 2.

  	
  Premises

  	
   

  
	
  Section 3.

  	
  Tenant’s Use of Premises

  	
   

  
	
  Section 4.

  	
  Assignment and Subletting

  	
   

  
	
  Section 5.

  	
  Construction of Improvements

  	
   

  
	
   

  	
  5.1

  	
  Improvements

  	
   

  
	
   

  	
  5.2

  	
  Approval by the Director

  	
   

  
	
   

  	
  5.3

  	
  Construction Plans and
  Specifications

  	
   

  
	
   

  	
  5.4

  	
  Permits, License, and Approvals

  	
   

  
	
   

  	
  5.5

  	
  Notice to Proceed, Construction Bonds, and
  Insurance

  	
   

  
	
   

  	
  5.6

  	
  Contractor Indemnification

  	
   

  
	
   

  	
  5.7

  	
  Coordination of Construction

  	
   

  
	
   

  	
  5.8

  	
  Certificate of Occupancy

  	
   

  
	
   

  	
  5.9

  	
  As-Built/Certified Drawings

  	
   

  
	
   

  	
  5.10 

  	
  Improvements by Tenant to Remain
  Throughout Term

  	
   

  
	
   

  	
  5.11

  	
  Ownership of Improvements

  	
   

  
	
   

  	
  5.12

  	
  Removal of Unapproved Improvements

  	
   

  
	
   

  	
  5.13

  	
  Future Improvements

  	
   

  
	
  Section 6. 

  	
  Maintenance of Premises

  	
   

  
	
  Section 7. 

  	
  Damage or Destruction of Premises

  	
   

  
	
   

  	
  7.1

  	
  Minor Damage

  	
   

  
	
   

  	
  7.2

  	
  Extensive Damage

  	
   

  
	
   

  	
  7.3

  	
  Alternative Space

  	
   

  
	
   

  	
  7.4

  	
  Limits of City’s Obligations Defined

  	
   

  
	
  Section 8.

  	
  Term

  	
   

  
	
  Section 9.

  	
  Rents and Fees

  	
   

  
	
   

  	
  9.1

  	
  Rents

  	
   

  
	
   

  	
  9.2

  	
  Other Airport Fees

  	
   

  
	
   

  	
  9.3

  	
  Rents and Fees Prorated

  	
   

  
	
   

  	
  9.4

  	
  Place of Payment

  	
   

  
	
   

  	
  9.5

  	
  Late Payment Fees

  	
   

  
	
  Section 10.

  	
  Security Deposit

  	
   

  
	
  Section 11.

  	
  Insurance

  	
   

  
	
   

  	
  11.1

  	
  General Requirements

  	
   

  
	
   

  	
  11.2

  	
  Approval of Insurance

  	
   

  
	
   

  	
  11.3

  	
  Comprehensive General Liability Including
  Automobile Liability 

  	
   

  

 

1

 

	
   

  	
  11.4

  	
  Aircraft Liability

  	
   

  
	
   

  	
  11.5

  	
  Hangarkeeper’s Liability Insurance

  	
   

  
	
   

  	
  11.6

  	
  Increased Limits

  	
   

  
	
   

  	
  11.7

  	
  Additional Insured

  	
   

  
	
   

  	
  11.8

  	
  Workers’ Compensation Insurance

  	
   

  
	
   

  	
  11.9

  	
  Property Insurance

  	
   

  
	
   

  	
  11.10

  	
  Failure to Maintain Insurance

  	
   

  
	
   

  	
  11.11

  	
  Additional Requirements

  	
   

  
	
  Section 12.

  	
  Termination of Lease

  	
   

  
	
   

  	
  12.1

  	
  Termination by City: 15-Day Cure Period

  	
   

  
	
   

  	
  12.2

  	
  Other Termination by City

  	
   

  
	
   

  	
  12.3

  	
  Termination by Either Party Without Cause

  	
   

  
	
   

  	
  12.4

  	
  City’s Non-Waiver

  	
   

  
	
  Section 13.

  	
  Surrender of Premises

  	
   

  
	
   

  	
  13.1

  	
  Removal of Personal Property

  	
   

  
	
   

  	
  13.2

  	
  Ownership of Property Not Removed

  	
   

  
	
  Section 14.

  	
  Signs

  	
   

  
	
  Section 15.

  	
  Access

  	
   

  
	
  Section 16.

  	
  Quiet Enjoyment

  	
   

  
	
  Section 17.

  	
  City’s Right to Enter

  	
   

  
	
  Section 18.

  	
  General Conditions

  	
   

  
	
   

  	
  18.1

  	
  Rules and Regulations

  	
   

  
	
   

  	
  18.2

  	
  Hazardous Materials

  	
   

  
	
   

  	
  18.3

  	
  Indemnification Agreement

  	
   

  
	
   

  	
  18.4

  	
  Applicable Law

  	
   

  
	
   

  	
  18.5

  	
  Non-liability of Agents and Employees

  	
   

  
	
   

  	
  18.6

  	
  No Partnership or Agency

  	
   

  
	
   

  	
  18.7

  	
  Forum Selection

  	
   

  
	
   

  	
  18.8

  	
  Compliance with Law

  	
   

  
	
   

  	
  18.9

  	
  Contract Interpretation

  	
   

  
	
   

  	
  18.10

  	
  Subordination

  	
   

  
	
   

  	
  18.11

  	
  Discrimination Prohibited

  	
   

  
	
   

  	
  18.12

  	
  No Exclusive Rights

  	
   

  
	
   

  	
  18.13

  	
  Construction Inconvenience

  	
   

  
	
   

  	
  18.14

  	
  Financial Responsibility

  	
   

  
	
   

  	
  18.15

  	
  Ethics

  	
   

  
	
   

  	
  18.16

  	
  Approvals, Consents and Notices

  	
   

  
	
   

  	
  18.17

  	
  Lease Subject to Avigation Priority

  	
   

  
	
   

  	
  18.18

  	
  Force Majeure

  	
   

  
	
   

  	
  18.19

  	
  Non-Waiver

  	
   

  
	
   

  	
  18.20

  	
  Administration of Lease

  	
   

  
	
   

  	
  18.21

  	
  Approval of Lease

  	
   

  
	
   

  	
  18.22

  	
  Savings

  	
   

  

 

2

 

	
  Exhibit A

  	
  Airport

  	
   

  
	
  Exhibit B

  	
  Premises

  	
   

  
	
  Exhibit C

  	
  Other Airport Fees

  	
   

  
	
  Exhibit D

  	
  Performance Bond and Letter of Credit Formats

  	
   

  
	
  Exhibit E

  	
  Insurance Certificate Format

  	
   

  

 

3

 

Double
Eagle II Airport

Hangar
Lease

 

Utilicraft
Aerospace Industries, Inc.

 

This Hangar Lease (“Lease”)
is made and entered into by and between the City
of Albuquerque, a New
Mexico municipal corporation (“City”)
and Utilicraft Aerospace Industries, Inc.,
a corporation organized and existing under the laws of the
state of Nevada (“Tenant”).

 

In consideration of the rights, privileges, and
mutual obligations contained in this Lease, City and Tenant agree as follows:

 

Section 1.
Recitals.

 

1.1                               City owns and operates through its Aviation
Department the Double Eagle II Airport (“Airport”) as shown in Exhibit A, located in the County of
Bernalillo, State of New Mexico; and

 

1.2                               Tenant desires to lease, and City desires to
grant the lease of, certain space at the Airport for the purpose of the
development of the FF-1080 Prototype Aircraft, and storage of Utilicraft
Aerospace Industries, Inc. corporate aircraft, in an enclosed hangar at the
Airport, upon the terms and conditions stated in this Lease; and

 

1.3                               City and Tenant have the right and power to
enter into this Lease.

 

Section 2.
Premises. City, for
and in consideration of the rents and fees reserved in this Lease and each of
the covenants, conditions, and agreements set forth in this Lease to be kept
and performed by Tenant, hereby leases to Tenant for its exclusive use, and
Tenant leases from City, upon the conditions, covenants, and agreements set
forth in this Lease, all of which Tenant accepts, that certain aircraft hangar
(“Premises”) as depicted in Exhibit B attached
hereto and incorporated herein.

 

Premises
shall be used and occupied by Tenant solely for the purpose of development of
the FF-1080 Prototype Aircraft, and storage of Utilicraft Aerospace Industries, Inc.
corporate aircraft, and for no other purpose. Tenant shall provide to City an
Aircraft Identification List (“List”) identifying those aircraft anticipated to
be stored on the Premises (“Aircraft”). The List shall include all stored
aircraft identification numbers, makes and models of aircraft, and number of
engines per aircraft. Tenant shall be allowed to store similar aircraft owned
or leased by Tenant (“Substitute Aircraft”), provided that Tenant has obtained
the written consent of City to store the Substitute Aircraft on the Premises.
In the event Tenant is permitted to store a Substitute Aircraft on the
Premises, all provisions of this Lease applicable to Aircraft shall also be applicable
to Substitute Aircraft.

 

4

 

At
the commencement of this Lease, Tenant shall accept the Premises in its “as is”
condition without any liability or obligation on the part of City to make any
alterations, improvements or repairs of any kind on or about the Premises.
Tenant has inspected and accepts the Premises in its “as is” condition, and
upon taking possession at the commencement of this Lease, has provided to City
in writing any comments concerning the condition of the Premises, and has
deemed same suitable for the intended use of Tenant. City shall not be liable
to Tenant or its officers, employees, agents, contractors, or invitees for any
damage or injury caused by the condition of the Premises.

 

Section 3.
Tenant’s Use of Premises. Premises shall be used only for the purpose of the development of the
FF-1080 Prototype Aircraft, and storage of Utilicraft Aerospace Industries, Inc.
corporate aircraft pursuant to Section 2 above, or the vehicle used by
Tenant for transportation to and from Airport. No public commercial activity of
any kind shall be conducted by Tenant, or permitted by Tenant, in or from the
Premises. Public commercial activity includes, but is not limited to, aircraft
rental or leasing, any concession agreements, aircraft painting (and associated
activities, e.g., sandblasting), aircraft maintenance and repair except as
permitted herein, aircraft charter, flight instruction, scenic flights, rental
or leasing of other personal property, the sale of other goods or services, or
limousine, courtesy vehicle or taxicab service picking up at or delivering
passengers to Airport.

 

No maintenance on
Aircraft shall be performed within the Premises without the prior written
approval of City except minor or preventative maintenance as would normally be performed by an aircraft owner without the
assistance of an aircraft mechanic. Tenant shall take steps to ensure that the
performance of any allowed maintenance work does not damage the Premises. Tenant
shall keep the Premises at all times clean and free of debris, aircraft parts,
or other parts (except while undertaking the maintenance allowed herein), and
accumulation of oil, lubricants, solvents, paints, grease, and other hazardous
materials as set forth in subsection 18.2 of this Lease.

 

Tenant
agrees to abide by all applicable ordinances, rules and regulations
established by any federal, state or local government agency or by City in
connection with Tenant’s occupancy and use of the Premises. Any activity or
operation of Tenant permitted pursuant to this Lease that is a spark producing
or open flame activity, including but not limited to welding, grinding,
brazing, or cutting with a torch, must be performed using extreme caution and
with all appropriate safety equipment immediately available to the operation.
Fueling of Aircraft while any portion of Aircraft is within the Premises is
prohibited. Electrical outlets, if provided in the Premises, are provided for
the occasional use of small electrical hand tools and appliances. The use of
electrical and/or other heating devices is prohibited. Upon expiration of the
term of this Lease, or by earlier termination, Tenant shall immediately
surrender possession of the Premises and shall immediately remove, at its sole
expense, Aircraft and all personal or other property

 

5

 

therefrom,
leaving the Premises in the same condition as when received, ordinary wear and
tear excepted.

 

Tenant
shall be liable for any and all damage to the Premises and remediation costs
caused by Tenant’s use or occupancy of the Premises, including, but not limited
to, damage to interior walls, damage to unsealed floors due to fuel, oil or
other spillage, or damage to doors due to Tenant’s improper or negligent
operation within the Premises.

 

Section 4.
Assignment and Subletting. Tenant shall not assign, sublet, mortgage, or otherwise transfer, in
whole or in part, any of the rights granted in this Lease without the prior
written approval of City. Such approval shall not be unreasonably withheld.

 

Section 5.
Construction of Improvements.

 

5.1                               Improvements. Tenant, at its sole risk and expense, shall
completely construct all leasehold improvements or additional improvements (“Improvements”),
in strict compliance with the Aviation Department Development Guidelines, and
this Section 5, and shall obtain necessary City permits, licenses, and
approvals from City’s building officials or other governmental agencies as
required.

 

5.2                               Approval by the Director. Tenant shall submit to City’s Director of Aviation
(“Director”), complete plans and specifications for all Improvements Tenant
makes to the Premises. Tenant shall obtain written approval for same from
Director prior to beginning construction and installation. Approval by Director
shall included architectural and aesthetic matters, and Director shall be
entitled to reject designs submitted and require Tenant to re-submit designs
until approval by Director is given. First-class standards of design and construction
are required, and all Improvements shall conform with the Aviation Department
Development Guidelines, and all applicable laws. City agrees to act promptly
upon Tenant’s request for approval of plans, specifications, and modifications
thereto.

 

Any
review or approval by Director of Tenant’s plans or any inspection by City of
the Improvements work or materials, shall not be deemed to constitute a waiver
or release by City of any obligation or responsibility of Tenant under this
Lease, or an assumption of any risk or liability by City with respect thereto;
and Tenant shall make no claim against City on account of such review,
approval, or inspection. City reviews, approvals, and inspections shall not
constitute assumption by City of any responsibility for the adequacy of the
design or construction. Such responsibility shall remain totally with Tenant
and Tenant’s architects, engineers, and contractors. Tenant shall cause all
Improvements authorized under this Lease to be constructed only by a contractor
properly licensed by the State of New Mexico to construct such Improvements.

 

6

 

5.3                               Construction Plans and
Specifications. No
Improvements of any kind shall be erected, placed, assembled, constructed or
permitted on the Premises until preliminary and final plans showing the type of
use, location, size, and design prepared by an architect and/or engineer
licensed to practice in the State of New Mexico have been approved by City.
Prior to the preparation of preliminary plans, Tenant shall contact Director to
schedule a pre-project meeting to brief City staff on the proposed
Improvements.

 

5.3.1                     Preliminary Plans. Tenant shall, within thirty (30) days
following the Effective Date of this Lease, deliver to Director for approval
four (4) sets of preliminary plans for the Improvements, prepared and
stamped by an architect or engineer licensed to practice in the State of New
Mexico.

 

Such
preliminary plans shall show the full extent of the Improvements to be constructed,
including but not limited to, grading, drainage, landscaping, paving, signs,
structural details and utility locations, showing the relationship of the
proposed Improvements to all adjacent Airport parcels, public roadways, or
service roadways. Civil engineering plans shall include drawings submitted on a
scale not smaller than one (1) inch equals fifty (50) feet. Architectural
plans shall include plan drawings at a suitable scale but in no event shall the
scale be smaller than one sixteenth (1/16) inch equal to one (1) foot.
Plans shall include complete specifications in sufficient detail for Director
to determine compatibility with Aviation Department Development Guidelines, and
their overall objectives for the aesthetic character and quality of the
Improvements. Architectural submittals shall include an accurate architectural
perspective color rendering of the Improvements, including the proposed
exterior color, scheme, style, materials, and wording and placement of all
signs.

 

Within
ten (10) days following receipt thereof, Director shall review such
preliminary plans, and transmit to Tenant written approval or rejection
thereof, in whole or in part. In the event of rejection, within fifteen (15)
days after receipt of the rejection notice, Tenant shall amend such plans to
comply with the items set forth in the rejection notice, and re-submit them to
Director for approval. Director shall notify Tenant within ten (10) days
thereafter of his decision regarding the revised plans.

 

Tenant
warrants that City may use all plans and specifications submitted by or on
behalf of Tenant, only for purposes relevant to and consistent with this Lease.

 

5.3.2                     Final Plans and Construction
Schedule. Within thirty (30)
days following Tenant’s receipt of Director’s approval of the preliminary
plans, Tenant shall deliver to Director for approval four (4) sets of
final construction plans and specifications for construction of the
Improvements, together with a schedule for construction of the Improvements.
Such final plans and specifications shall substantially conform to the preliminary
plans previously approved by Director and shall be submitted to Director prior to
submitting the plans to other applicable agencies. There shall be no
substantial changes

 

7

 

or
alterations made in the final plans and specifications after the approval by
Director without the advance written approval of Director. Director’s approval
of such plans shall not infer approval by other City or controlling agencies.
After approval of the plans by Director, Tenant will have complete
responsibility for obtaining all other required approvals and permits for the
Improvements.

 

5.3.3                     Modification of Final Plans.
Any modifications to the
approved final plans and specifications, which may be required following review
by the City of Albuquerque Code Enforcement Division, the New Mexico
Environment Department, the City of Albuquerque Planning Department, the City
of Albuquerque Fire Department, or other governmental agencies, shall be
submitted to Director for approval prior to construction.

 

5.4                               Permits, Licenses, and
Approvals. Tenant shall, at
its sole expense, obtain all necessary licenses, permits, and approvals
required for construction of the Improvements on the Premises from City, state,
and federal agencies. These shall include, but not be limited to:

 

5.4.1                     Permits, licenses, and approvals for fuel
storage tanks; and

 

5.4.2                     Permits, licenses, and approvals of a) the
City of Albuquerque Planning Department, the City of Albuquerque Fire
Department, and the City of Albuquerque Building and Safety Division and b) the
National Board of Fire Underwriters or other similar organizations for the
prevention of fire or for the correction of unhealthy of hazardous conditions;
and

 

5.4.3                     Permits, licenses, and approvals for
compliance with storm water management, sediment, and erosion control
requirements pursuant to the regulations of the New Mexico Environment
Department; and

 

5.4.4                     Submittal of a Notice of Intent (“NOI”) to
the Federal Environmental Protection Agency (“EPA”) prior to the start of site
development and construction and shall provide, implement, and be responsible
for, a Storm Water Pollution Prevention Plan (“SWPPP”) during all phases of the
work. Tenant shall provide a copy of the NOI to City prior to the start of any
work at the site.

 

Upon
completion of the construction, Tenant will be responsible for submitting a
Notice of Termination (“NOT”) to the EPA, and will provide a copy of the NOT to
City.

 

5.4.5                     City’s approval of its Spill Prevention
Controls and Countermeasures Plan.

 

8

 

5.5                               Notice to Proceed,
Construction Bonds, and Insurance. Director’s approval of Tenant’s final plans and specifications and time
schedule shall constitute Tenant’s notice to proceed with construction of
Improvements, provided that all the following requirements have been satisfied:

 

5.5.1                     Tenant has delivered to Director for
approval, and Director has approved, certificates of insurance for coverage
evidencing Tenant’s construction contractor’s a) “all risk” type builders’ risk
insurance coverage and workers’ compensation insurance coverage and b)
compliance with the applicable insurance provisions of Section 11 below;
and

 

5.5.2                     Tenant’s construction contractor has duly
executed a Labor and Materials Payment Bond with a surety authorized to do so
in the State of New Mexico, in an amount equal to the value of its contract for
construction of the Improvements to insure City against loss by reason of any
lien or liens that may be filed against the Premises or Airport property.
Tenant shall provide City with a true copy of such executed bond, upon request
by Director.

 

Tenant
shall be solely responsible for payment and pay promptly, when due, all persons
supplying labor and materials to its contractor for all elements of
construction of Improvement on the Premises. Tenant shall keep the Premises
free and clear of all 

mechanics
liens resulting from any construction and shall permit no lien or claim to be
filed or prosecuted against City on account of any such construction or
materials furnished. Tenant may contest the correctness or validity of any such
lien, but Tenant shall indemnify, defend, and hold harmless City, its elected
representatives, officers, agents, and employees, and the Premises from any and
all claims and liability for payment of any such lien, and related attorneys’
fees; and

 

5.5.3                     Tenant has delivered to Director a
Performance Bond executed by Tenant’s construction contractor and a surety
acceptable to City, in a form acceptable to City, securing contractor’s
performance of its obligations relating to the construction of the Improvements,
in an amount equal to the value of its construction contract, naming City as obligee
thereunder. In the alternative, Tenant may, submit to Director in lieu of a Performance
Bond, a deposit in an amount equal to the total value of Tenant’s construction contract,
subject to the approval of City; and

 

5.5.4                     Tenant has obtained at its sole expense all
necessary licenses and permits required for construction of Improvements on the
Premises; and

 

5.5.5                     Tenant shall submit to Director a copy of the
building permits issued to Tenant by the City of Albuquerque Building
Inspection Division; and

 

9

 

5.5.6                     Tenant shall notify Director of Tenant’s
intention to commence construction of the Improvements at least forty-eight
(48) hours before commencement of such work or delivery of any material to be
used in such work at the Premises.

 

5.6                               Contractor Indemnification. Tenant shall include in all construction contracts
entered into in connection with the construction of the Improvements, a provision
requiring the contractor and subcontractors to indemnify, hold harmless, defend
and insure Airport, City, and their directors, officers, and employees, from
and against the risk of third party legal liability for death, injury or damage
to persons or property, direct or consequential, arising or alleged to arise out
of, or in connection with, the performance of any or all of such construction
work, whether the claims and demands made are just or unjust, unless same are
caused by the negligence or willful act of the indemnified parties.

 

5.7                               Coordination of Construction.
Tenant shall cooperate with
the City of Albuquerque Aviation Department in the construction of the
Improvements. Tenant agrees that all construction and installation of said
Improvements at the Airport shall be accomplished without interfering with other
users of the Airport.

 

Tenant
shall be responsible for obtaining and paying for any temporary utilities
needed during construction of the Improvements.

 

Tenant and its
construction contractor and subcontractors shall at all times keep the
construction sites and surrounding areas clean, orderly, safe free of
accumulated construction
debris and waste materials, and shall be solely responsible for removal of all
construction debris and waste materials to a suitable licensed landfill away
from the Airport.

 

5.8                               Certificate of Occupancy. Within ten (10) days after the
completion of the construction of the Improvements, Tenant shall submit a copy
of the City of Albuquerque Certificate of Occupancy to Director. Within ten (10) days
after receipt of the Certificate of Occupancy, Director may schedule an
inspection of the Improvements to be accompanied by Tenant for purposes of
confirming compliance with the final plans and any subsequent modifications to
the final plans.

 

5.9                               As-Built/Certified Drawings.
Within sixty (60) days after
receipt of a Certificate of Occupancy, Tenant shall furnish to City, one (1) set
of original reproducible record drawings on reproducible mylar sheets
(twenty-four (24) inches by thirty-six (36) inches) showing the “as-built”
improvements, and one (1) set of first generation plain bond photo copy.
Certified drawings shall be dated and stamped by the engineer or architect of record.
A complete set of digital format Auto CAD 2000 or earlier version drawings, reflecting
the same information as the certified drawings, shall be delivered at the same time.
Delivery of the Auto CAD drawings shall be on CD (compact disc), along with necessary
printing/plotting information to allow City to reproduce drawings as originally

 

10

 

designed.
If Tenant fails to provide said “as-built” drawings, City may hire a registered
architect or registered engineer to provide the same and shall recover the cost
of the said drawings, plus a fifty percent (50%) overhead administrative fee,
from Tenant. Upon request of City, Tenant shall inspect the Improvements
jointly with City to verify compliance with the “as-built” drawings.

 

5.10                        Improvements by Tenant to
Remain Throughout Term. All
of Tenant’s Improvements, pursuant
to this Section 5 shall remain on the Premises throughout the term of this
Lease, unless otherwise approved in writing by the Director.

 

5.11                        Ownership of Improvements. All Improvements existing or constructed on
the Premises by Tenant, shall be owned by Tenant until expiration of the term
or earlier termination of this Lease. Tenant shall not, however, remove any of
the Improvements from the Premises, nor waste, destroy, demolish or alter, any
of the Improvements on the Premises except as permitted by this Lease. All
Improvements on the Premises at the expiration of the term, or the earlier
termination of this Lease, shall, without compensation to Tenant, become the
property of City, provided Tenant shall have the right to remove any and all
trade fixtures, fixtures, or similar improvements on the Premises provided for
in Section 13, but Tenant shall repair all damage to the Premises or
Improvements caused by such removal. Except as otherwise expressly provided in
this Lease, upon expiration of the term or the earlier termination of this
Lease, the Improvements shall become the property of City free and clear of any
and all rights to possession and all claims to or against them created by
Tenant.

 

5.12                        Removal of Unapproved Improvements. Improvements made on the Premises without the
Director’s written approval as required under this Section 5 or portions
of the Improvements that are not constructed as indicated and specified on approved
plans will be considered to be unapproved Improvements constructed in violation
of the provisions of this Lease. Unapproved Improvements shall be removed by
Tenant, at Tenant’s sole expense, within ninety (90) calendar days after Tenant’s
receipt of written notice to do so from the Director.

 

5.13                        Future Improvements. Tenant shall make no alterations to the Premises,
following completion of the construction of the Improvements, nor construct additional
improvements upon the Premises without the prior written approval of Director, in
accordance with the procedures set forth in this Section 5.

 

Section 6.              Maintenance of Premises. During the term of this Lease, it shall be
Tenant’s obligation, without cost to City, to maintain the Premises. Tenant
shall at all times keep the Premises neat, orderly, sanitary, and presentable.
Tenant shall cause to be removed at Tenant’s own expense from the Premises all
waste, garbage, and rubbish, collectively referred to herein as refuse, and
agrees not to deposit same on any part of Airport. City shall be entitled to
remove Tenant’s refuse from the Premises and charge

 

11

 

Tenant
a reasonable fee if Tenant fails to remove such refuse within one (1) day
after receiving written or verbal notice from City of improper disposal.

 

Tenant
shall perform, at its sole expense, ordinary preventative maintenance and
ordinary upkeep and repair of the Premises. In addition, Tenant shall maintain,
repair and, when necessary, replace all personal property, trade fixtures,
equipment, and other Tenant improvements placed or installed in the Premises by
Tenant.

 

City
shall maintain and repair the structural components of the Premises including
the exterior roof, walls, hangar door, floors and dividing walls, except that,
Tenant shall be responsible for repairing any damage to the Premises caused by
Tenant’s activity.

 

Section 7.              Damage or Destruction of Premises.
If, for any reason the
Premises are damaged to such an extent that it is untenantable in whole or in
substantial part, then:

 

7.1                               Minor Damage. If the repairs, rebuilding, or construction
necessary to restore the Premises to its condition prior to the occurrence of
the damage can, in the judgment of City, be completed within a reasonable
period of time, City shall so notify Tenant, in writing, consult with Tenant,
and shall proceed promptly with such repairs, rebuilding, or construction at
City’s sole cost and expense, provided that Tenant shall be responsible for,
and bear the cost of, replacing and rebuilding all Tenant improvements. In such
event, Tenant shall receive a pro rata abatement of the rents due under Section 9
of this Lease, based only on the reduction of usable square feet in the
Premises. If applicable, this abatement shall be allowed only for the period
from the date of the occurrence of such damage to the date upon which repairs,
rebuilding, or construction is completed. Thereafter, the rents and fees due
under Section 9 shall be calculated without regard to the period such rent
was reduced.

 

Notwithstanding
the above provisions, if the damage is caused by the intentional or negligent
act or omission of Tenant, its officers, agents, employees, contractors,
subcontractors, licensees or invitees, Tenant shall be responsible for
reimbursing City for the cost and expense incurred in such repair, rebuilding,
or construction. In order to expedite such repair, rebuilding, or construction,
Tenant shall apply all insurance proceeds paid on account of such damage or
destruction under the policies of insurance required in Section 11 below.
If the insurance proceeds are not sufficient to pay the entire cost of such
repairs, rebuilding, or construction, Tenant shall pay the amount of any such
deficiency and shall apply the same to the payment of the cost of the repairs,
rebuilding, or construction. In the event the cause of the damage or
destruction is by risk, which is or was uninsurable, then Tenant shall have the
same responsibility to provide the funds necessary to pay the cost of the
repairs, rebuilding, or construction. In the event of such minor damage, there
shall be no abatement of the rents payable by Tenant to City under this Lease.

 

12

 

7.2                               Extensive Damage. If repairs, rebuilding, or construction
would, in the judgment of City, require an extended period of time to complete,
City, at its option, to be evidenced by notice in writing to Tenant, may:

 

7.2.1                     seek Tenant’s consent and cooperation, and
proceed promptly with repairs, rebuilding, or construction at City’s sole cost
and expense, in which event abatement of rents shall be allowed, as described
in subsection 7.1 above, or

 

7.2.2                     terminate the letting of the Premises, in
which event the rents and fees due under Section 9 of this Lease shall be
eliminated beginning from the date of the occurrence of the damage. City shall
not be deemed in default under this Lease in the event it elects to terminate
the letting of the damaged or destroyed Premises.

 

7.2.3                     in the event the Premises are destroyed or so
damaged and rendered untenantable as a result of the intentional or negligent
act or omission of Tenant, its officers, agents, servants, employees,
contractors, subcontractors, licensees, or invitees, City may repair, rebuild,
or construct, and Tenant shall be responsible for reimbursing City for the
costs and expenses incurred in such repair, rebuilding, or construction. In
order to expedite such repair, rebuilding, or construction, Tenant shall apply
all insurance proceeds paid on account of such damage or destruction under the
policies of insurance required in Section 11 below. If the insurance
proceeds are not sufficient to pay the entire cost of such repairs, rebuilding,
or construction, Tenant shall pay the amount of any such deficiency and shall
apply the same to the payment of the cost of the repalrs, rebuilding, or
construction. In the event the cause of the damage or destruction is by risk,
which is or was uninsurable, then Tenant shall have the same responsibility to
provide the funds necessary to pay the cost of the repairs, rebuilding, or
construction. In the event of such extensive damage, there shall be no
abatement of the rents payable by Tenant to City under this Lease.

 

7.3                               Alternative Space. In the event the repairs, rebuilding, or
construction is required pursuant to subsections 7.1 and 7.2 above, City shall
use reasonable efforts to provide Tenant with alternative space, if necessary,
during any repairs, rebuilding, or construction of the Premises. City shall
advise Tenant as soon as may be practicable regarding City’s intention with
respect to any necessary repairs, rebuilding, or construction.

 

In
the event City provides alternative space to Tenant, City shall be responsible
for those costs directly associated with moving Tenant to the temporary space
and back to restored space, except in the event that such repair, rebuilding,
or construction is required as a result of the intentional or negligent act or
omission of Tenant, its officers, agents, employees, contractors,
subcontractors, licensees, or invitees, in which case Tenant shall bear the entire
cost of moving. Should smaller square footage space be provided by City to
Tenant, the rents and fees due under Section 9 below shall be reduced pro
rata to the reduction of square footage of the alternative space. All
reductions of rents shall be

 

13

 

allowed
only for the period from the date of the occurrence of such damage to the date
repairs and rebuilding are completed. Thereafter, the rents and fees due under Section 9
shall be calculated without regard to the period such rent was reduced.

 

7.4                               Limits of City’s Obligations
Defined. In the application
of the provisions of subsection 7.1 and 7.2 above, City shall not be
obligated to repair, rebuild, or construct the Premises to an extent greater
than its original obligation to provide facilities and service to the Premises
as set forth in this Lease.

 

Section 8.                                          Term. The term of this Lease (“Term”) shall begin
on the date of completion of the Premises (“Effective Date”) and terminate six (6) months
from the Effective Date, unless earlier terminated pursuant to any provisions
of this Lease. Following the expiration of the Term, Tenant shall have the
option to extend the Term for an additional period of six (6) months, or
portion thereof, provided that Tenant is not in default of any of the
provisions of this Lease.

 

Holding
over by Tenant after the expiration of the Term, whether with or without the
consent of City, shall not operate to extend or renew this Lease. Any such
holding over shall be construed as a month-to-month lease on the same terms and
conditions of this Lease then in effect; provided, however, that the monthly
rent during such tenancy shall be equal to one hundred fifty percent (150%) of
the monthly rent paid by Tenant during the preceding month.

 

Section 9.                                          Rents
and Fees.

 

9.1                               Rents. Tenant agrees to pay City, in advance without
invoice, on the first day of each calendar month, for the use of the Premises
and for the rights granted pursuant to this Lease, Three Thousand Seven Hundred Fifty and 00/100 Dollars ($3,750.00) per
month, Forty-five Thousand and 00/100 Dollars ($45,000.00) per year. Said rents
are based on Three and 00/100 Dollars ($3.00) per square foot per year for
fifteen thousand (15,000) square feet of aircraft hangar space. City reserves
the right to adjust the rent annually effective July 1 of each year in an
amount equal to three percent (3%) of the previous year’s annual rent amount.

 

If
the Effective Date, expiration date, or earlier termination of this Lease
occurs on a date other than the first or last day of a calendar month, rents
shall be prorated according to the number of days in that month during which
the Premises and rights were enjoyed.

 

9.2                                 Other Airport Fees. Tenant’s obligation to pay Other Airport Fees
shall commence on the Effective Date of this Lease and shall be due and payable
by Tenant monthly for the preceding month no later than the fifteenth (15th)
day of each month, unless otherwise specifically provided for in this Lease.
Other Airport Fees are outlined in Exhibit C, attached hereto and incorporated herein.

 

14

 

9.3                               Rents and Fees Prorated. If the expiration date or earlier termination
of this Lease occurs on a date other than the first or last day of a calendar
month, Rents and Fees shall be prorated according to the number of days in that
month during which the Premises and rights were enjoyed.

 

9.4                               Place of Payment. Tenant shall deliver payments of rents and
fees to the office of the Director or at such other place as may be designated
by City from time to time. Payment shall be made to the order of the “City of
Albuquerque”.

 

9.5                               Late Payment Fees. If rents and fees required by this Lease are
not received by City on or before the date specified in this Lease, Tenant
shall pay an interest charge to City of one and one-half percent (11/2%)
per month (eighteen (18%) annually) for each month or partial month that any
payment due is not paid. In addition, Tenant shall pay an administrative fee to
City of Fifty and 00/100 Dollars ($50.00) if
City sends Tenant a late payment notice.

 

Section 10.                                   Security Deposit. Prior to the Effective Date, Tenant shall
deposit at the office of Director an Irrevocable Letter of Credit (“LOC”)
issued exclusively to City, or a Performance Bond (“Bond”) in a form
substantially the same as Exhibit D, attached
hereto and incorporated herein, in the amount of Eleven Thousand Two Hundred Fifty and 00/100 ($11,250.00), which
amount is based on rent for three (3) months. The LOC or Bond will be held
by City as security for the full and faithful performance of all the terms,
covenants and conditions to be performed by Tenant under this Lease. The LOC shall
be made to the order of the City of Albuquerque. The Bond shall be made payable
on demand to the City of Albuquerque. The amount of the security deposit may
increase in the event that the rent payable pursuant to this Lease increases,
provided however that there will be no decrease in the security deposit.

 

The
LOC or Bond shall expressly permit partial payment and shall be issued
exclusively to City of Albuquerque. LOCs or Bonds shall allow presentment of
claims under the LOC or Bond by City by mail and shall not restrict such
presentment to in-person appearances at a particular place. If a Bond is
provided, such Bond shall be issued with City of Albuquerque as obligee by a
surety licensed to conduct business in the State of New Mexico and which has
sufficient bonding capacity for the amount of the Bond and is named in the
current list of “Companies Holding Certificates of Authority as Acceptable
Sureties on Federal Bonds and as Acceptable Reinsuring Companies” as published
in the Federal Register by the U.S. Treasury Department or its successor
agency.

 

Document(s)
evidencing the security deposit shall provide that it remain in full force and
effect for a period of sixty (60) days following termination or cancellation of
this Lease, and shall allow City to make a partial draw on such security
deposit. In the event of a partial draw, Tenant shall immediately reinstate the
security deposit to the full amount required herein. Documents establishing the
continuation or replacement of the LOC or Bond shall

 

15

 

be received by the
Aviation Department no less than thirty (30) days prior to the expiration of
the existing LOC or Bond. If payments required by Tenant under the terms of
this Lease are not made in accordance with the payment provisions set forth in Section 9
above, City shall have the right to forfeit, take, and use as much of such
security deposit as may be necessary to make such payment in full and to
exercise any other legal remedies to which it may be entitled. In the event
Tenant fails to maintain insurance pursuant to Section 11 below, City
shall be entitled to obtain such insurance, and City shall have the right to
forfeit, take and use as much of such security deposit as may be necessary to
make payment for such insurance coverage in full and to exercise any other
legal remedies to which it may be entitled. The LOC or Bond shall be released
by City within sixty (60) days following expiration or termination of this
Lease, provided Tenant has fully performed.

 

City
shall have the option of accepting cash security deposits. City shall not be
required to place cash security deposits in interest-bearing accounts; however,
should City elect to do so, City shall be entitled to all interest earned from
such account as compensation for handling such account. City shall not be
required to keep cash security deposits in separate accounts.

 

Section 11.
Insurance.

 

11.1                        General Requirements. Tenant shall, procure and maintain in full
force and effect during the Term, the insurance required in this Lease.
Policies of insurance shall be written by companies authorized to write such
insurance in New Mexico, and policies of insurance shall be on forms properly
filed and approved by the Superintendent of Insurance, State of New Mexico.
When requested by City, Tenant shall provide to City copies of any or all
policies of insurance for the insurance coverage required in this Section.
Policies of insurance shall be procured for all insurance required herein and
coverage limits of such policies of insurance shall not be reduced or replaced
in part or in whole by self-insurance, including self-insurance retention
amounts.

 

Tenant
shall not violate the terms or conditions of insurance policies required to be
furnished by Tenant. Tenant shall promptly notify City of any claim of loss
exceeding the amount of the deductible under such insurance policies, and
certify that proper notice has been given the appropriate insurance carrier.

 

Tenant
shall furnish City with certificates of insurance by sending the certificates
to the Director of Aviation, Albuquerque International Sunport, P.O. Box
9948, Albuquerque, New Mexico 87119. All insurance certificates shall provide
that thirty (30) days written notice be given to the Director of Aviation
before a policy is canceled, materially changed, or not renewed. The form of certificates
of insurance shall be substantially the same as Exhibit E attached hereto. Documents establishing the
continuation or replacement of insurance shall be received by the Aviation
Department no less than thirty (30) days prior to the continuation or
replacement of the insurance coverage.

 

16

 

11.2                        Approval of Insurance. Although this Lease may have been fully
executed by all parties, Tenant shall not occupy the Premises pursuant to this
Lease until the required insurance has been obtained and proper certificates of
insurance delivered to the Director of Aviation. Neither approval nor failure
to disapprove insurance certificates of insurance by City shall relieve Tenant
of full responsibility to maintain the required insurance in full force and
effect.

 

11.3                        Comprehensive General
Liability Including Automobile Liability. Tenant shall procure and maintain policies of insurance for
comprehensive general liability as well as automobile liability for all vehicles
used in or about the Premises, as further described below. All such policies of
insurance shall have liability limits in amounts not less than One Million and 00/100 Dollars ($1,000,000.00) single
limit liability for bodily injury, including death, and property damage in any
one occurrence. The insurance policies shall
include coverage for one hundred percent (100%) of the replacement value of the
Premises and Tenant’s contractual liability to City hereunder. Contractual
liability coverage shall specifically insure the Indemnification provision of
this Lease. The insurance policies shall contain “products” and “completed
operations” coverage (if applicable) and shall not be written on a “claims made”
form. The insurance policies shall include coverage for all use of, activities
on, or operations with respect to the Airport, coverage for the use of all
owned, non-owned, hired automobiles, vehicles, and other equipment, both on and
off work. City reserves the right to review and modify the limits stated above
at one (1) year intervals to give effect to the changing risk management
environment and inflationary trends.

 

* Should Tenant require
access to the Air Operations Area (“AOA”) of the Airport, the limit of
liability would increase to Five Million and 00/100 Dollars ($5,000,000.00).

 

11.4                        Aircraft Liability. Tenant shall at all times maintain in full force and effect, a policy
or policies of aircraft liability insurance covering bodily injury and properly
damage arising from operation of the Aircraft or any Substitute Aircraft and
Tenant’s activities on or about the Premises. Policies shall be in amounts not
less than a combined single limit of One
Million and 00/100 Dollars ($1,000,000.00) for injury to or death of
one or more persons (including occupants) and not less than One Million and
00/100 Dollars ($1,000,000.00) for damage to property.

 

11.5                        Hangarkeeper’s Liability Insurance. Tenant shall be solely responsible for
obtaining hangarkeeper’s liability insurance in the amount of at least Two Million and 00/100 Dollars ($2,000,000.00) per
occurrence.

 

11.6                        Increased Limits. If, during the term of this Lease, the legislature of the State of New
Mexico increases the maximum limits of liability under the Tort Claims Act

 

17

 

(Sections
41-4-1 through 41-4-27, NMSA 1978) to an amount greater than that required for
comprehensive general liability including automobile above, City shall be
entitled to require Tenant to increase the limits of any insurance required
herein to an amount equal to such increased Tort Claim Act maximum limits of
liability.

 

11.7                        Additional Insured. City of Albuquerque shall be named as an additional insured on each
insurance policy required above.

 

11.8                        Workers’ Compensation Insurance. Tenant shall comply with the provisions of
the New Mexico Workers’ Compensation Act, the Subsequent Injury Act, and the
New Mexico Occupational Disease Disablement Law. Tenant shall procure and maintain
during the Term of this Lease complete Workers’ and Employer’s Liability Insurance
in accordance with New Mexico laws and regulations. Such insurance shall include
coverage permitted under Section 52-1-10, NMSA 1978, for safety devices. In
addition, Tenant shall procure and maintain Employer’s Liability Coverage in an
amount not less than One Million and 00/100 Dollars ($1,000,000.00) per
occurrence.

 

With
respect to Workers’ Compensation Insurance, if Tenant elects to be
self-insured, Tenant shall comply with the applicable requirements of law. If
any portion of the work is to be sublet, Tenant shall require the subtenants
similarly to provide such coverage (or qualify as a self-insured) for all the
letter’s employees to be engaged in such work. Tenant hereby covenants and
agrees that City, its officers, or employees will not be liable or responsible
for any claims or actions occasioned by Tenant’s failure to comply with the provisions
of this subparagraph and that the Indemnification provision of this Lease shall
apply to this paragraph. It is expressly agreed that the employees of Tenant
are not City employees for any purpose.

 

11.9                        Property Insurance. Tenant shall be solely responsible for obtaining insurance policies
that provide coverage for losses of Tenant-owned property.

 

11.10                 Failure to Maintain Insurance.
In the event Tenant shall at
any time fail to have in effect the insurance required under the provisions of
this Lease, City shall be entitled to terminate this Lease in accordance with Section 12
below.

 

11.11                 Additional Requirements. Insofar as the above-described insurance provides
protection against liability for damages to third parties for personal injury,
death, and property damage, City shall be included as an additional insured;
provided such liability insurance coverage shall also extend to damage,
destruction and injury to City-owned or City-leased property and City
personnel, and caused by or resulting from work, acts, operations or omissions
of Tenant, its officers, agents, employees and independent contractors. City
shall have no liability for any premiums charged for such coverage, and inclusion
of City as an additional insured is not intended to and shall not make City a partner
or joint venturer with Tenant in its operations at the Airport.

 

18

 

Section 12.
Termination of Lease.

 

12.1                        Termination by City: 15-Day Cure Period. This Section shall govern Tenant’s
failure to comply with the following provisions (hereafter, “Events of Default”):

 

12.1.1              pay rents and fees pursuant to Section 9
above;

 

12.1.2              provide and maintain a security deposit
pursuant to Section 10 above;

 

12.1.3              provide and maintain insurance pursuant to Section 11
above.

 

In
the event Tenant fails to comply with any or all of the aforementioned Sections
for a period of fifteen (15) days after receipt by Tenant of City’s written
notice of an Event of Default, City shall be entitled to terminate this Lease,
provided that no notice of termination shall be effective if Tenant has fully
cured all Events of Default identified in the fifteen (15) day notice prior to
Tenant’s receipt of the notice of termination. Termination of this Lease will
take effect immediately upon Tenant’s receipt of notice of termination unless
stated otherwise in the notice of termination.

 

12.2                        Other Termination by City.   Except for Events of Default, which are addressed in subsection 12.1
above, City shall be entitled to terminate this Lease in the event of default
by Tenant in the performance of any covenant or agreement herein required to be
performed by Tenant, including but not limited to: 1) transfer or attempted
transfer of Tenant’s interest in this Lease, 2) vacating or abandoning the
Premises by Tenant, for a period of thirty (30) consecutive days, 3)
divestiture of Tenant’s estate herein by other operation of law, 4) use of the
Premises for any purpose other than set forth in this Lease,  and the failure of Tenant to remedy such
default for a period of fifteen (15) days after receipt of City’s written
notice to remedy the same; provided, however that no notice of termination, as
above provided, shall be of any force or effect if Tenant has remedied the
default prior to Tenant’s receipt of City’s notice of termination. Termination
shall take effect immediately upon Tenant’s receipt of the notice of termination
unless stated otherwise in the notice of termination.

 

12.3                        Termination by Either Party Without Cause.   Either party shall be entitled to terminate this Lease by providing the
other party with thirty (30) days advance written notice of termination,
specifying the date of surrender of use rights by Tenant. In the event of
termination by either party, Tenant shall not be relieved of liability to City
for any rents and fees due to City as of the effective date of the termination.

 

12.4                        City’s Non-Waiver. City’s performance of all or any part of this Lease for or during any
period or periods after a default of any of the terms, covenants, and
conditions herein contained to be performed, kept and observed by Tenant, shall
not be deemed a

 

19

 

waiver
of any rights on the part of City to terminate this Lease for failure by Tenant
to perform, keep or observe any of the terms, covenants or conditions hereof to
be performed, kept and observed by Tenant and shall not be construed to be or
act as a waiver by City of any subsequent default of any of the terms,
covenants, and conditions herein contained to be performed, kept, and observed
by Tenant.

 

Section 13.
Surrender of Premises. Tenant
covenants and agrees that on expiration of the Term, or earlier termination as
provided in this Lease, Tenant will peaceably surrender possession of the
Premises in good condition, reasonable wear and tear, acts of God, fire, and
other casualties excepted, and City shall have the right to take possession of
the Premises. City shall not be required to give notice to quit possession at
the expiration date of Term.

 

13.1                        Removal of Personal Property. Upon expiration of the Term or earlier
termination of this Lease, Tenant shall, immediately, remove any and all
non-permanent equipment, trade fixtures, materials, supplies, and other
personal property on or about the Premises, subject to any valid lien that City
may have thereon for unpaid rents and fees, provided, however, that City shall
have the right to occupy and use the Premises immediately upon the expiration
of the Term.   Following the removal of
the personal property, Tenant shall be required to return the Premises to the
same or comparable condition as existed on the Effective Date of this Lease,
reasonable wear and tear excepted.

 

13.2                        Ownership of Property Not Removed.   In the event Tenant fails to remove its personal property, City shall
have the options of; a) removing Tenant’s personal property at Tenant’s expense
but only in the event Tenant takes possession of such personal property
immediately upon such removal; or b) taking title to Tenant’s personal property
in lieu of Tenant’s removal.

 

In
the event City takes title to such personal property, City shall be entitled to
all proceeds of sale of such Tenant personal property as liquidated damages for
the breach of Tenant’s covenant to remove.

 

Section 14.
Signs. Tenant agrees
to obtain written approval by Director of all signs prior to installation of
any signs.

 

Section 15.
Access. Subject to
applicable City, state and federal rules and regulations, Tenant shad have
for itself and its officers, agents, employees and invitees reasonable rights
of access to and from the Premises.

 

Section 16.
Quiet Enjoyment. Upon
payment of rents and fees, and performance of the covenants and agreements by
Tenant, and subject to the terms and conditions of this

 

20

 

Lease,
Tenant shall peaceably have and enjoy the Premises and all of the rights,
privileges and appurtenances granted herein.

 

Section 17.
City’s Right to Enter. City,
by its authorized officers, employees, agents, contractors, subcontractors, and
other representatives, shall have the right, but not the obligation, at such
times as may be reasonable under the circumstances and with as little
interruption of Tenant’s operations as possible, to enter upon the Premises,
accompanied by an authorized Tenant representative, if practicable, to inspect
such space to determine whether Tenant is in compliance with the terms and
conditions of this Lease, including inspection for safety, fire protection, or
security purposes.

 

Tenant
further agrees to make any and all corrections of violations observed by City
as a result of this inspection within ten (10) calendar days following
notice of violation by City.

 

Section 18.
General Conditions.

 

18.1                        Rules and Regulations. During the Term, Tenant shall observe and
obey all Rules and Regulations promulgated from time to time by City
governing conduct on and operations at the Airport.   Tenant shall not violate, nor knowingly
permit its officers, employees, agents, or invitees to violate any such Rules and
Regulations.

 

18.2                        Hazardous Materials.

 

18.2.1              Tenant’s Compliance with
Environmental Laws. Tenant shall
at all times in all respects comply with all environmental laws, and any
amendments thereto affecting Tenant’s activities on the Airport, including, but
not limited to, all federal, state and local laws, ordinances and regulations
relating to Hazardous Materials as defined in subsection 18.2.2.

 

18.2.2              Indemnification by
Tenant.   Tenant shall not cause or permit any
Hazardous Material, as defined below in this Lease, to be brought upon, kept or
used in or about the Premises by Tenant, its officers, employees, agents, or
invitees without the prior written consent of City.

 

As
used herein the term “Hazardous Material” means any hazardous or toxic
substance, material or waste which is or becomes regulated by any local
governmental authority, the State of New Mexico or the United States
government. The term “Hazardous Material” includes, without limitation, any
material or substance which is 1) defined as a “Hazardous Waste,” under Section 74-4-3
of the New Mexico Statutes (NMSA1978), 2) designated as a “Hazardous Substance”
pursuant to Section 311 of the Federal Water Pollution Control Act (33 USC
Section 1317), 3) defined as a “Hazardous Waste” pursuant to Section 1004
of the Federal Resource Conservation and Recovery Act, 42 USC Section 6901
et seq. (42 USC Section 6903) or 4) defined as a “Hazardous Substance”
pursuant to Section 101 of the

 

21

 

Comprehensive
Environmental Response, Compensation and Liability Act, 42 USC Section 9601
et seq. (42 USC Section 9601).

 

City
shall not unreasonably withhold or delay consent of Tenant’s use of such
Hazardous Material if Tenant can demonstrate to City’s reasonable satisfaction
that such Hazardous Material is necessary or useful to Tenant’s activities, and
will be used, kept and stored in a manner that complies with all laws
regulating any such Hazardous Material so brought upon, used or kept in or
about the Premises.

 

If
Tenant breaches the obligations stated in the preceding paragraph, or if the
presence or release of Hazardous Material on or about the Premises caused or
permitted by Tenant results in contamination of the Premises, or if
contamination of the Premises by Hazardous Material otherwise occurs for which
Tenant is legally liable to City for damages resulting from such contamination,
then Tenant shall indemnify, defend and hold City harmless from any claims,
judgments, damages, penalties, fines, costs, liabilities or losses (including
but not limited to, diminution in value of the Premises and sums paid in
settlement of claims, reasonable attorney’s fees, consultant fees and expert
fees) which arise during or after the Term as a result of such contamination.
This indemnification of City by Tenant includes, but is not limited to, costs
incurred in connection with any investigation of site conditions or any
clean-up, remediation, removal or restoration work required by any federal,
state or local governmental agency or political subdivision because of
Hazardous Material present in the air, soil, ground water on or under the
Premises. Without limiting the foregoing, if the presence of any Hazardous
Material on or about the Premises caused or permitted by Tenant results in any
contamination of the Premises, Tenant shall promptly take all corrective
actions at its sole expense as are necessary to clean up the Premises to the
extent required by a governmental agency having jurisdiction. Tenant shall, in
consultation with City, determine the schedule, technique, method, and design
of the corrective action, subject to governmental agency requirements and
approval; and Tenant may contest and appeal any governmental agency decision or
directive.

 

Tenant
shall not be liable to City for any environmental, investigatory, monitoring,
or cleanup costs except as ordered by a federal, state, or local agency of
competent jurisdiction. In the event such an order is issued, City shall
immediately notify Tenant and provide it the opportunity to negotiate with the
acting government authority and enter the Premises to conduct investigatory,
monitoring, or cleanup work. In the event Tenant is responsible for any
remediation or cleanup work on or about the Premises after termination of the
Term, Tenant shall have the right to enter the Premises for performance of such
obligation.

 

The
indemnification required by this subsection 18.2 shall not apply to any
Hazardous Material existing on, under or about the Premises prior to occupancy
by Tenant. However, the parties recognize that there has been no environmental
assessment establishing the presence or absence of any Hazardous Material on,
under or about the Premises as of the

 

22

 

Effective
Date of this Lease. Even so, the parties agree that, as of the Effective Date
of this Lease, they are not aware of the existence of any Hazardous Material
on, under or about the Premises.

 

18.2.3              Notices. Tenant shall immediately notify City in
writing of any enforcement, cleanup, removal or other governmental or
regulatory action instituted, completed, or threatened pursuant to any
Hazardous Materials laws. Tenant shall also supply to City as promptly as
possible, and in any event within five (5) business days after receipt,
copies of all reports, complaints, notices, or warnings or asserted violations
relating in any way to the Premises or Tenant’s use thereof. City and Tenant
each shall promptly provide the other with a copy of 1) any claim or demand for
corrective action that any Environmental Agency issues and 2) any other claim
giving rise to either party’s indemnification obligations under subsection 18.2.2
or subsection 18.2.4.

 

18.2.4              City’s Right of Entry.  During the Term, Director, or those authorized by Director, shall have
the right of entry to test and determine the extent of any contamination of the
Premises.  Request for entry for this
purpose shall be provided in writing to Tenant with advance notice, at
reasonable times, and shall not unreasonably interfere with Tenant’s use of the
Premises.

 

18.2.5              National Pollutant Discharge
Elimination System. Tenant
shall comply with all federal and state regulations governing the National
Pollutant Discharge Elimination System (NPDES) and applicable sections of
Airport’s Storm Water Pollution Prevention Plan, including all future
amendments of said regulations and procedures as may be adopted by federal,
state or local agencies.

 

18.3                        Indemnification Agreement. Tenant covenants that it and all of its
officers, agents, and invitees will use due care and diligence in all of its or
their activities at the Airport. Tenant agrees to and recognizes the broad
nature of this indemnification provision pursuant to subsection 18.2.2 and
18.3.1 (hereafter the “Indemnification Agreement”) and voluntarily makes this
covenant and expressly acknowledges the receipt of adequate consideration by
City in support of this Indemnification Agreement.

 

18.3.1              General Indemnification. Tenant agrees to defend, indemnify and hold
harmless City, its officers and employees from and against all suits, actions,
claims, demands, penalties, fines, liabilities, settlements, damages, costs and
expenses (including but not limited to consultants’ fees, reasonable fees of
attorneys, court costs and litigation expenses) of whatever kind or nature,
known or unknown, contingent or otherwise, brought against City because of any
injury, including death at any time resulting from bodily injury, damages for
care and loss of services, or damage received or sustained by any person,
persons or property arising out of or resulting from any negligent act, error,
or omission of Tenant, its officers, agents, or invitees arising out of the
activities

 

23

 

of
Tenant or Tenant’s performance, purported performance, or non-performance of
this Lease or Tenant’s activities at the Premises and Airport.

 

18.3.2              Scope of
Indemnification.   With respect to any claims, actions, suits,
damages or judgments caused by or resulting from acts, omissions or activities
of Tenant, its officers, agents, or invitees, Tenant shall

 

18.3.2.1                   investigate or cause the investigation of
accidents involving such injuries;

 

18.3.2.2                   negotiate or cause to be negotiated
settlement of all claims made as may be deemed expedient by Tenant, and defend,
or cause to be defended, suits for damages, even if groundless, false or
fraudulent, brought on account of such injuries or damages against City;

 

18.3.2.3                   pay and satisfy judgments finally
establishing the liability of City in all actions defended by Tenant pursuant
to this subsection 18.3.2.3; and

 

18.3.2.4                   pay, or cause to be paid: a) all costs taxed
against City in any legal proceeding defended or caused to be defended by
Tenant as aforesaid; b) any interest accruing up to the date of payment by
Tenant; c) all premiums charged upon appeal bonds required in such proceedings;
and d) all expenses incurred by City for investigation, negotiation, and
defense, including but not limited to expert witnesses’ and attorneys’ fees
incurred, should Tenant fail to provide the defense and indemnification
required herein.

 

18.3.3              Miscellaneous.   City shall, promptly upon receipt of a notice
of claim, deliver to Tenant every demand, notice, summons, or other process
received in any claim or legal proceeding contemplated therein.  In the event City fails to give Tenant notice
of any such demand, notice, summons, or other process received by City and such
failure to give notice results in prejudice to Tenant in the defense of any
action or legal proceeding contemplated herein, such failure or delay shall
release Tenant of its liability as set forth in this paragraph insofar as only
the particular claim or legal proceeding is concerned, and only to the extent
of such prejudice. Nothing in this subsection shall be deemed a change or
modification in any manner whatsoever of the method or condition of preserving,
asserting, or enforcing any claim or legal liability against City. This subsection shall
not be construed as a waiver of City’s immunity. The provisions of this subsection shall
not be construed to prohibit Tenant from seeking contribution or indemnity from
any third party that may have caused or contributed to the event for which
Tenant indemnified City.

 

18.3.4              Term of Indemnification.   Tenant’s obligations and liabilities under this subsection 18.3
shall survive the termination or expiration of this Lease.

 

24

 

18.4                        Applicable Law.  
This Lease shall be
governed by and construed and enforced in accordance with the laws of the State
of New Mexico, and the laws, rules and regulations of the City of
Albuquerque.

 

18.5                        Non-liability of Agents and Employees.  City shall not in any event be liable for any acts or omissions of
Tenant, Its officers, agents, or invitees, or for any condition resulting from
the activities of Tenant, Tenant’s officers, employees, agents, or invitees
either to Tenant or to any other person.

 

18.6                        No Partnership or Agency.  Nothing contained in this Lease is intended or shall be construed in
any respect to create or establish any relationship other than that of owner
and Tenant, and nothing herein shall be construed to establish any partnership,
joint venture or association between or among City and Tenant, or any agency by
or in favor of the other, or to make Tenant the general representative or agent
of City for any purpose whatsoever.

 

18.7                        Forum Selection. Any cause of action, claim, suit, demand, or
other case or controversy arising from or related to this Lease shall only be
brought in the New Mexico Second Judicial
District Court located in Bernalillo County, New Mexico or in the United States
District Court located in Albuquerque, New Mexico. The parties irrevocably
admit themselves to, and consent to, the jurisdiction of either or both of said
courts.   The provisions of this subsection shall
survive the termination or expiration of this Lease.

 

18.8                        Compliance with Law. 
Tenant shall comply
with all applicable laws, ordinances, rules, regulations and procedures of
Federal, State, and local governments related to this Lease and Tenant’s use of
the Premises and the Airport, including, but not limited to Aviation Department
rules.

 

18.9                        Contract Interpretation.

 

18.9.1              Severability.   In the event any covenant, condition or provision herein is held to be
invalid, illegal, or unenforceable by any court of competent jurisdiction, such
covenant, condition or provision shall be deemed amended to conform to
applicable laws so as to be valid or enforceable or, if it cannot be so amended
without materially altering the intention of the parties, it shall be
stricken.  If stricken, all other
covenants, conditions and provisions of this Lease shall remain in full force
and effect provided that the striking of such covenants, conditions or
provisions does not materially prejudice either City or Tenant in its respective
rights and obligations contained in the valid covenants, conditions or
provisions of this Lease.

 

18.9.2              Waiver.   No provision of this Lease shall be deemed to have been waived by
either party unless such waiver is in writing, signed by the party making the
waiver and addressed to the other party, nor shall any custom or practice which
may evolve

 

25

 

between
the parties in the administration of the terms of this Lease be construed to
waive or lessen the right of either party to insist upon the performance of the
other party in strict accordance with the terms of this Lease. Further, the
waiver by any party of a breach by the other party or any term, covenant, or
condition hereof shall not operate as a waiver of any subsequent breach of the
same or any other term, covenant, or condition thereof.

 

18.9.3              Gender, Singular/Plural.   Words of any gender used in this Lease shall be held and construed to
include any other gender, and words in the singular number shall be held to
include the plural, unless the context otherwise requires.

 

18.9.4              Captions and Section Headings.   The captions, section headings, and table of contents contained in
this Lease are for convenience of reference only, and in no way limit, define,
or enlarge the terms, scope, and conditions of this Lease.

 

18.9.5              Entire Agreement.   This Lease represents the entire contract between the parties and,
except as otherwise provided herein, may not be amended, changed, modified, or
altered without the written consent of the parties hereto. This Lease
incorporates all of the conditions, agreements, and understandings between the
parties concerning the subject matter of this Lease, and all such conditions,
understandings and agreements have been merged into this Lease.    No prior condition, agreement, or
understanding, verbal or otherwise, of the parties or their agents shall be
valid or enforceable unless embodied in this Lease.

 

18.9.6              Relationship of Contract
Documents.   All documents attached to this Lease or incorporated into this Lease
are complementary, and any requirement of one contract document shall be as
binding as if required by all.

 

18.9.7              Exhibits, Certificates,
Documents Incorporated, and Attachments.   All certificates, documents, exhibits, attachments, riders, and addenda
referred to in this Lease, including but not limited to the attached exhibits,
are hereby incorporated into this Lease by reference and made a part hereof as
though set forth in full in this Lease to the extent they are consistent with
its conditions and terms.

 

18.9.8              Applicable Law.   This Lease shall be governed by and construed and enforced in
accordance with the laws of the State of New Mexico, and the ordinances, laws, rules and
regulations of the City of Albuquerque.

 

18.9.9              Successors.   All covenants, stipulations and agreements in this Lease shall extend
to and bind the legal representatives, successors, and assigns of the
respective parties hereto.

 

18.9.10       Governmental Rights and
Powers.   Nothing in this Lease shall be construed or
interpreted as limiting, relinquishing or waiving any rights of

 

26

 

ownership
enjoyed by City in the Airport; except as specifically provided in this Lease;
or impairing, exercising or defining governmental rights and the police powers
of City.

 

18.9.11       Cross References.  References in the text of this Lease to articles, sections or exhibits
pertain to articles, sections or exhibits of this Lease unless otherwise
specified.

 

18.9.12       Relation to Other
Tenants.   This Lease is separate and distinct from, and
shall be construed separately from any other agreement between City and any
other Tenant at the Airport.   The fact
that such other agreement contains provisions, which differ from those
contained in this Lease shall have no bearing on the construction of this
Lease.

 

18.9.13       Time is of the Essence.   Time is of the essence in the performance of this Lease.

 

18.10               Subordination.

 

18.10.1       Subordination to Agreements
with the U.S. Government.   This Lease is subject and subordinate to the
provisions of any agreements heretofore or hereafter made between City and the
United States, relative to the operation or maintenance of the Airport, the
execution of which has been required as a condition precedent to the transfer
of federal rights or property to City for Airport purposes, or to the
expenditure of federal funds for the improvement or development of the Airport,
including the expenditure of federal funds for the development of the Airport
in accordance with the provisions of the Federal Aviation Act of 1958, as
amended, or in accordance with successive airport development acts. City
covenants that it has no existing agreements with the United States in conflict
with the express provisions hereof.

 

18.10.2       Other Subordination.   The Premises and Airport are, and this Lease is, subject to and
subordinate to the terms of all deeds from the United States of America to
City, including but not limited to that certain deed from the United States of
America to City dated December 15, 1962, and filed for record on December 19,1962,
in Volume 672 of Records, Folio 469, with the records of the County Clerk of
the County of Bernalillo, New Mexico, wherein City agreed to hold title to
certain property upon certain terms and which also provides that the United
States may regain title should City not cure any default within sixty (60) days
of notice thereof.

 

18.10.3       Airport Revenue Bond
Ordinances.   This Lease is subject to and subordinate to any
and all City Ordinances pertaining to Airport Revenue Bonds.

 

27

 

18.11      Discrimination
Prohibited.

 

18.11.1       General.   In the use and occupation of the Premises by Tenant, Tenant shall not
discriminate against any person or class of persons by reason of race, color,
religion, sex, national origin or ancestry, age, or physical or mental handicap
in violation of any federal, state or local law.

 

18.11.2       Civil/Human Rights Laws. In the operation and use of the Premises,
Tenant shall not on the grounds of race, color, religion, sex, national origin
or ancestry, age, or physical or mental handicap, discriminate or permit
discrimination against any person or group of persons in any manner prohibited
by Title 49 CFR Parts 21, 23 and
26, the Civil Rights Act of 1964, as amended, the Equal Pay Act of 1963, the
Rehabilitation Act of 1973, the New Mexico Human Rights Act, and the
Albuquerque Human Rights Ordinance. Tenant agrees to take affirmative action to
ensure that applicants are employed, and that employees are treated during
employment without regard to their race, color, religion, sex, national origin
or ancestry, age, or physical or mental handicap. Such action shall include,
but not be limited to: employment, upgrading, demotion, or transfer;
recruitment or recruitment advertising; layoff or termination; rates of pay or
other forms of compensation; selection for training; and disciplinary actions
and grievances. Tenant agrees to post in conspicuous places available to
employees, and applicants for employment, notice to be provided setting forth
the provisions of this non-discrimination clause.

 

18.11.3       Covenants of Tenant. Tenant, for itself, its successors in
interest, and assigns, as a part of the consideration of this Lease, does
hereby covenant and agree that: a) no person on the grounds of race, color,
religion, sex, national origin or ancestry, age, or physical or mental handicap
shall be excluded from participation in, denied the benefits of, or otherwise be
subjected to discrimination in the use of said Lease Property, b) that in the
construction of any improvements on, over, or under such land and the
furnishing of services thereon, no person on the grounds of race, color,
religion, sex, national origin or ancestry, age, or physical or mental handicap
shall be excluded from participation in, denied the benefits of, or otherwise
be subjected to discrimination, c) that Tenant shall use the Premises in
compliance with all other requirements imposed by, or pursuant to, the New
Mexico Human Rights Act, the Albuquerque Human Rights Ordinance, and 49 CFR
Parts 21, 23 and 26, and as said regulations may be amended; and Tenant assures
that it will undertake an affirmative action program as required by 14 CFR Part 152
Subpart E, Nondiscrimination Airport in Aid Program, to ensure that no person
shall on the grounds of race, color, religion, national origin or ancestry,
sex, age, or physical or mental handicap be excluded from participating in any
employment activities covered in 14 CFR Part 152 Subpart E, or such
employment activities covered in the New Mexico Human Rights Act, or the
Albuquerque Human Rights Ordinance. Tenant assures 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 this subpart. Tenant assures

 

28

 

that
it will require that any covered sub-organization similarly will undertake
affirmative action programs and that the sub-organization will require
assurance from the sub-organization, as required by 14 CFR Part 152
Subpart E, to the same effect.

 

18.12                 No Exclusive Rights. Nothing herein contained shall be deemed to
grant to Tenant any exclusive right or privilege within the meaning of FAA
Advisory Circular 150/5190-5 for the conduct of any activity on the Airport.

 

18.13                 Construction
Inconvenience.  Tenant agrees that from time to time during
the Term, City shall have the right to initiate and carry forward programs of
construction, reconstruction, expansion, relocation, maintenance, and repair of
the various buildings, infrastructure and facilities on the Airport (“Construction”),
including but not limited to terminal facilities, roadways, parking areas for
aircraft and ground vehicles, runways, and taxiway areas.   Tenant agrees that it shall not hold City
(including its officers, agents, employees and representatives) liable for
damages of any nature whatsoever to Tenant due to Construction. In the event
construction results in a total denial of access to the Premises by Tenant,
Tenant shall be entitled to an abatement of the rents during the time access is
denied. The amount of abatement for each calendar day shall be the pro rata
share of rent for one day to the monthly minimum rent.

 

18.14                 Financial Responsibility. Tenant shall not permit any mortgage,
judgment, execution or mechanic’s or materialman’s or any other lien to become
attached to or be foreclosed upon the Premises or Airport real property by
reasons of work, labor performed or materiaIs or equipment furnished to Tenant.

 

18.15                 Ethics.

 

18.15.1       Conflict of Interest. Upon execution of this Lease, or within five (5) days
after the acquisition of any interest described in this Section 18 during
the Term, Tenant shall disclose in writing to City whether any City Councilor,
Albuquerque Airport Advisory Board member, officer or employee of City has or
hereafter acquires any direct, indirect, legal, or beneficial interest in
Tenant or in any contract, lease, or agreement between City and Tenant, or in
any franchise, concession, right, or privilege of any nature granted by City to
Tenant in this Lease or otherwise.

 

18.15.2       Fair Dealing. Tenant covenants and warrants that the only
entity interested in this Lease is named in this Lease and that no other person
or firm has any interest in this Lease, and this Lease is entered into by such
Tenant without collusion on the part of such Tenant with any person or firm,
without fraud and in good faith. Tenant also covenants and warrants that no
gratuities, in the form of entertainment, gifts or otherwise, were, or during
the Term, will be, offered or given by such Tenant, or any agent or
representative of such Tenant, to any officer or employee of City with a view
towards securing this Lease or for securing more favorable treatment with
respect to

 

29

 

making
any determinations with respect to performing this Lease.

 

18.15.3       Board of Ethics and Campaign
Practices. Tenant agrees to
provide the Board with any records or information pertaining in any manner to
this Lease, or both, whenever such records or information are within Tenant’s
custody, are germane to an investigation authorized by the Board, and are
requested by the Board. Tenant further agrees to appear as a witness before the
Board as required by the Board in hearings concerning ethics or campaign
practices charges heard by the Board. Tenant agrees to require that all
subcontractors employed by Tenant for services performed for this Lease shall
agree to comply with the provisions of this subsection 18.5.3.   Tenant and its subcontractors shall not be
compensated under this Lease for its time or any costs incurred in complying
with this subsection 18.5.3.

 

18.15.4       Harassment. Tenant shall not harass or annoy City
Councilors of the City of Albuquerque or officers or employees of City with
requests for modifications resulting in more favorable treatment under this
Lease than the treatment accorded other tenant.

 

18.16                 Approvals, Consents, and
Notices.

 

18.16.1       All notices, consents, and approvals required by this Lease shall be in
writing arid shall be given by registered or certified mail by depositing the
same in the U.S. mail in the continental United States, postage prepaid, return
receipt requested, or by personal delivery, or by facsimile transmission to the
“FAX” number given below, provided that the completed transmission is
electronically verified. Either party shall have the right, by giving written
notice to the other, to change the address at which its notices are to be
received. Until any such change is made, notices shall be delivered as follows:

 

	
  City:

  	
   

  	
  Director of Aviation

  
	
   

  	
   

  	
  Albuquerque International Sunport

  
	
  Certified Mail;

  	
   

  	
  PO Box 9948

  
	
   

  	
   

  	
  Albuquerque, New Mexico 87119-1048

  
	
  Personal Delivery:

  	
   

  	
  2200 Sunport Blvd. SE, 3rd Floor

  
	
   

  	
   

  	
  Albuquerque, NM 87106

  
	
  Telephone:

  	
   

  	
  (505) 244-7700

  
	
  FAX Transmission:

  	
   

  	
  (505) 842-4278

  

 

30

 

	
  Tenant:

  	
   

  	
  Utilicraft Aerospace Industries, Inc.

  
	
  Tenant Official:

  	
   

  	
  John J. Dupont

  
	
  Title:

  	
   

  	
  Chairman, President-CEO

  
	
  Certified Mail and

  	
   

  	
  554 Briscoe Boulevard

  
	
  Personal Delivery:

  	
   

  	
  Lawrenceville, GA 30045

  
	
  Telephone:

  	
   

  	
  (678) 376-0898 X2201

  
	
  FAX:

  	
   

  	
  (678) 376-9093

  
	
  Email:

  	
   

  	
  jdupont@utilicraft.com

  

 

18.16.2       If notice, consent or approval is given in any other manner or at any
other place, it will also be given at the place and in the manner specified
above.

 

18.16.3       The effective date of such notice, consent or approval shall be the
date of the receipt as shown by the U.S. Postal Service Return Receipt, or the
date personal delivery is certified, or the date of electronic verification of
the facsimile transmission, unless provided otherwise in this Lease.

 

18.17                 Lease Subject to Avigation
Priority. Tenant’s right to
use the Premises for the purposes as set forth in this Lease shall be secondary
to and subordinate to the operation of the Airport. Tenant acknowledges that
due to the location of the Premises at the Aiport, there may be an impact to
the use of the Premises as a result of the noise, Vibrations, fumes, debris and
other interference caused by Airport operations. Tenant hereby waives any and
all rights or remedies against City arising out of any noise,  vibration, fumes, debris, and/or interference
that is caused by the operation of the Airport. City specifically reserves for
itself, and for the public, a right of flight for the passage of aircraft in
the airspace above the surface of the Premises together with the right to cause
in said airspace such noise, vibration, fumes, debris, and other interferences
as may be inherent in the present and future operation of aircraft.

 

18.18                 Force Majeure. Except as expressly provided in this Lease,
neither City nor Tenant shall be deemed to be in default hereunder if either
party is prevented from performing any of the obligations, other than payment
of rentals, fees and charges hereunder, by reason of strikes, boycotts, labor
disputes, embargoes, shortages of energy or materials, acts of a public enemy,
acts of terrorism or threatened acts of terrorism, weather conditions and the
results of acts of nature, riots, rebellion, sabotage, or other causes similar
to those enumerated for which it is not responsible or which are not within its
control.

 

18.19                 Non-Waiver. The failure of City to insist upon prompt and
strict performance of any of the terms, conditions or undertakings of this
Lease, or to exercise any right herein conferred, in any one or more instances,
shall not be construed as a waiver of the same or any other term, condition,
undertaking, right or option.

 

31

 

18.20                 Administration of Lease. The Chief Administrative
Officer of the City of Albuquerque or his authorized representative
shall administer this Lease for the City of Albuquerque.

 

18.21                 Approval of Lease. This Lease
shall not become effective or binding until signed by the Chief
Administrative Officer of the
City of Albuquerque.

 

18.22      Savings. City and Tenant acknowledge that they have
thoroughly read this Lease, including all Exhibits hereto, and have sought and received whatever competent advice
and counsel that was necessary for them
to form a full and complete understanding of all rights and obligations herein.
City and Tenant further acknowledge that this Lease is the result of extensive
negotiations between them and that this Lease shall not be construed against either
party by reason of that party’s preparation of all or part of this Lease.

 

IN WITNESS WHEREOF, City has caused this Lease to be executed by its Chief
Administrative Officer, and Tenant has caused the same to be executed by its
appropriate and authorized officers.

 

	
  City of Albuquerque:

  
	
   

  
	
  By:

  	
  /s/ James B. Lewis

  	
   

  	
  Date:

  	
       3/31/05

  	
   

  
	
   

  	
  James B. Lewis

  	
   

  	
   

  	
   

  
	
   

  	
  Chief Administrative
  Officer

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Recommended:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ John D. Mike Rice,
  Director

  	
   

  	
  Date:

  	
       2/15/05

  	
   

  
	
   

  	
  John D. Mike Rice,
  Director

  	
   

  	
   

  	
   

  
	
   

  	
  Aviation Department

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Tenant:

  	
  Utilicraft
  Aerospace Industries, Inc.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  John J. Dupont

  	
   

  	
  Date:

  	
       Feb
  3, 2005

  	
   

  
	
   

  	
  John J. Dupont

  	
   

  	
   

  
	
   

  	
  Chairman, President-CEO

  	
   

  
	
   

  	
   

  
	
  City of Albuquerque
  Business Registration No.:

  	
   

  	
  pending

  	
   

  
	
  NM State Taxation and
  Revenue Taxpayer I.D. No.:

  	
   

  	
  pending

  	
   

  
	
  Federal Taxpayer ID
  Number:

  	
   

  	
  pending

  	
   

  
									

 

32

 

Acknowledgements

 

	
  State
  of New Mexico

  	
  )

  
	
   

  	
  )   ss.

  
	
  County
  of Bernalillo

  	
  )

  

 

This
instrument was acknowledged before me this 31st day of March 2005, by James B. Lewis, Chief Administrative Officer, for the  City of Albuquerque,
a New Mexico municipal corporation, on behalf of said corporation

 

	
   

  	
  Felicia
  Dixon

  	
   

  
	
   

  	
  Notary
  Public

  
	
   

  	
   

  
	
  My
  Commission Expires:

  	
   

  
	
  1-27-06

  	
   

  	
   

  
				

 

	
  State
  of New Mexico

  	
  )

  
	
   

  	
  )   ss.

  
	
  County
  of Bernalillo

  	
  )

  

 

This
instrument was acknowledged before me this 3rd day of February 2005 by John J.
Dupont, Chairman, President-CEO, Utilicraft Aerospace Industries, Inc., a
Nevada corporation, on behalf of said corporation.

 

	
   

  	
  [ILLEGIBLE]

  	
   

  
	
   

  	
  Notary
  Public

  
	
   

  
	
  My
  Commission Expires:

  
	
      4/21/2005

  	
   

  
				

 

33

 

Exhibit A

 

Airport

 

34

 

Exhibit B

 

Premises

 

35

 

Exhibit C

 

Other
Airport Fees

 

36

 

Exhibit D

 

Performance
Bond and Letter of Credit Formats

 

37

 

Exhibit E

 

Insurance
Certificate Format

 

38Exhibit
10.14

 

SUBLEASE
AGREEMENT BETWEEN

AMERICAN
UTILICRAFT CORPORATION (lessor)

And
UTILICRAFT AEROSPACE INDUSTRIES, Inc. (lessee)

 

American Utilicraft Corporation (AUC) holds a lease on the property on
Gwinnett County Airport at 554 Briscoe Blvd, Lawrenceville, Georgia 30045.

 

Utilicraft Aerospace Industries, Inc. (Utilicraft) desires to
occupy and use this property for business purposes.

 

This document attests that:

 

(1)                                  Utilicraft agrees to
sublease the property at 554 Briscoe Blvd on a month-to-month basis from AUC.

 

(2)                                  Utilicraft agrees to
pay $19,000 on the lease of the property for each month of occupancy.

 

(3)                                  Both
parties agree that AUC will maintain insurance on the facilities until or
unless some time as both parties agree otherwise.

 

(4)                                  Utilicraft
agrees to pay for the month of April 2005,

 

(5)                                  Utilicraft
agrees to begin its payments on a month-to-month basis in June 2005.

 

 

	
  For American Utilicraft Corporation:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Darby Boland

  	
   

  	
  March 28, 2005

  
	
   

  	
  Darby Boland - VP, General Manager (AUC)

  	
  Date

  
					

 

 

	
  For Utilicraft Aeros pace Industries, Inc:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ John S. Dupont

  	
   

  	
  March 28, 2005

  
	
   

  	
  John S. Dupont – President, CEO
  (Utilicraft)

  	
  Date

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00091-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00091-of-00352.parquet"}]]