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HomeMy WebLinkAbout10740RESOLUTION NO. 10740 A RESOLUTION APPROVING AN AGREEMENT BETWEEN THE CITY OF PUEBLO AND PEDCO FOUNDATION, INC. AND AN AGREEMENT AND AIRPORT ACCESS PERMIT BETWEEN THE CITY OF PUEBLO AND DOSS AVIATION, INC. RELATING TO JOB CREATING CAPITAL IMPROVEMENT PROJECT, AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME, TRANSFERRING $11,150,000 FROM THE 1992 -2006 SALES AND USE TAX CAPITAL IMPROVEMENT PROJECTS FUND FOR THE PROJECT, RESERVING $2,000,000 IN THE 1992 -2006 SALES AND USE TAX CAPITAL IMPROVEMENT PROJECTS FUND FOR MAINTENANCE, OPERATING AND STAFFING EXPENSES ASSOCIATED WITH THE PUEBLO MEMORIAL AIRPORT FIRE STATION AND ACCEPTING THE LEASE BETWEEN PEDCO FOUNDATION AND DOSS AVIATION, INC. WHEREAS, Pueblo Economic Development Corporation ( "PEDCO ") has presented to City Council a proposed job creating capital improvement project ( "Project') whereby Doss Aviation, Inc. will conduct and operate an Initial Flight Screening Program for the U.S. Air Force at Pueblo Memorial Airport and commit to employ one hundred twenty -one (121) full -time employees at an average salary of $44,000 per year plus benefits, and WHEREAS, the Project will require renovation of an approximately 173,519 square foot building for the Initial Flight Screening Program to lodge and screen between 1200 -1700 students per year, construction of three (3) approximately 19,600 square foot hangars and ramp area, construction of a new taxiway to the existing concrete pad connected to Runway 35, Pueblo Memorial Airport and security fences at a total City funding of approximately $11,150,000.00, and WHEREAS, the Project and financial details thereof were negotiated and approved by PEDCO. and WHEREAS, PEDCO has recommended to the City Council that the City Council approve the Project and financial details thereof as negotiated by PEDCO. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1 In reliance upon the representations and recommendations of PEDCO, the City Council finds and determines that (a) the expenditure of $11,150,000.00 for the job creating capital improvement project with Doss Aviation, Inc. described herein and in the attachment Agreements between the City, PEDCO Foundation, Inc. and Doss Aviation, Inc. ( "Project') and the reservation of an additional $2 million as described in Section 4 hereof, meet and comply with the criteria and standards established by Ordinance No. 6381, (b) the Project will create employment opportunities for the citizens of the City of Pueblo thereby reducing unemployment and social evils associated therewith, (c) the Project will enhance the economic development of the City and the Pueblo Municipal Airport by the establishment of a new business resulting from Doss Aviation, Inc. making a commitment to operate a new business facility, and (d) the expenditure of funds for such job creating capital improvement project is a public purpose and municipal function and is in furtherance of the public health, safety and welfare. SECTION 2 The Agreement dated May 22, 2006 between the City and PEDCO Foundation, Inc., ( "Foundation Agreement "), a copy of which is attached hereto, having been approved as to form by the City Attorney, is hereby approved. The President of the City Council is authorized to execute and deliver the Foundation Agreement in the name of the City and the City Clerk is directed to affix the seal of the City thereto and attest same. SECTION 3 The Agreement dated May 22, 2006 between the City and Doss Aviation, Inc. ( "Doss Agreement ") and Access Permit attached thereto as Exhibit "A ", copies of which are attached hereto, having been approved as to form by the City Attorney, are hereby approved. The President of the City Council is authorized to execute and deliver the Doss Agreement and Access Permit in the name of the City and the City Clerk is directed to affix the seal of the City thereto and attest same. SECTION 4 The Lease dated as of May 22, 2006 between PEDCO Foundation as Lessor and Doss Aviation, Inc. as Lessee in substantially the same form and content as distributed to City Council at this meeting is hereby accepted. SECTION 5 Funds in the amount of $11,150,000.00 are hereby authorized to be transferred, expended and made available to PEDCO Foundation, Inc. out of the 1992 -2006 Sales and Use Tax Capital Improvement Projects Fund for the sole purpose of the job creating capital improvement project and in the manner described in the Foundation Agreement. The funds hereby authorized to be transferred and expended shall be released and paid by the Director of Finance to or for the benefit of PEDCO Foundation, Inc. after receipt by the Director of Finance of written requests for payment required by paragraph 3(b) of the Foundation Agreement. SECTION 6 Additional Funds in the amount of $2 million are hereby authorized to be transferred and reserved in the 1992 -2006 Sales and Use Tax Capital Improvement Projects Fund as and for capitalized and prepaid maintenance, operation and staffing expenses associated with the Pueblo Memorial Airport fire station to meet and comply with the United States Air Force's requirement that as a part of the Project fire /crash /response support shall be available. The $2 million transferred and reserved as above provided shall be designated and held as a separate reserve account in the 1992 -2006 Sales and Use Tax Capital Improvement Projects Fund ( "Reserve Account "). Funds in the Reserve Account shall be annually budgeted, appropriated and transferred to the City of Pueblo in annual increments of $200,000.00 for ten (10) successive fiscal years starting with fiscal year 2007 for maintenance, operating and staffing expenses associated with the Pueblo Memorial Airport fire station. SECTION 7 The officers and employees of the City are directed and authorized to perform any and all acts reasonably required consistent with the intent of this Resolution and attached Agreements necessary and reasonably required to effectuate the transactions described therein. SECTION 8 This Resolution shall become effective upon final approval and passage. BY Ray Aquilera Councilperson APPROVED: �•� President of City Council ATTESTED BY: CITY CLERK INTRODUCED May 22, 2006 [ID a ID D 0 Background Paper for Proposed RESOLUTION P160. 0l0-7vJ AGENDA ITEM # 1 9 A DATE: May 22, 2006 DEPARTMENT: Law Department TITLE A RESOLUTION APPROVING AN AGREEMENT BETWEEN THE CITY OF PUEBLO AND PEDCO FOUNDATION, INC. AND AN AGREEMENT AND AIRPORT ACCESS PERMIT BETWEEN THE CITY OF PUEBLO AND DOSS AVIATION, INC. RELATING TO JOB CREATING CAPITAL IMPROVEMENT PROJECT, AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME, TRANSFERRING $11,150,000FROM THE 1992 -2006 SALES AND USE TAX CAPITAL IMPROVEMENT PROJECTS FUND FOR THE PROJECT, RESERVING $2,000,000 IN THE 1992 -2006 SALES AND USE TAX CAPITAL IMPROVEMENT PROJECTS FUND FOR MAINTENANCE, OPERATING AND STAFFING EXPENSES ASSOCIATED WITH THE PUEBLO MEMORIAL AIRPORT FIRE STATION, AND ACCEPTING THE LEASE BETWEEN PEDCO FOUNDATION AND DOSS AVIATION, INC. ISSUE Should the City Council approve the Doss Aviation, Inc. job creating project at the Pueblo Memorial Airport and related documents? RECOMMENDATION None BACKGROUND Doss Aviation, Inc. ( "Company ") will conduct at the Pueblo Memorial Airport an initial flight screening program for the U.S. Air Force and has committed to employ 121 full -time employees at an average salary of $44,000 per year plus benefits. Since the hours of work for flight pilot instructors may vary depending on flight training activities, full -time employees can include full time equivalent employees computed on 32 hours per week for flight pilot instructors up to 20% of the total number of full -time employees actively employed by Company. The project requires the expenditure of $11,150,000 of City's one -half cent sales and use tax revenues ( "Sales Tax Fund ") as follows: (a) $2,420,000 employment incentive. If Company does not meet its employment commitment of 121 employees during the 7 year repayment period starting April 1, 2008, Company will repay City $714.29 on a quarterly basis for each full -time employee less than 121. (b) $6,870,000 for remodeling the 173,519 square foot building ( "Building "). (c) $3,570,000 for construction ofthree 19,600 square foot hangars, ramp areas, site preparation, drainage and security fence. (d) $710,000 for architect and engineering expenses PEDCO Foundation ( "Foundation ") will purchase the land and Building to be renovated for a purchase price of $3,350,000 from sources of funds other than City's one -half cent sales and use tax revenues. Foundation will lease the land and Building to Company under a 11 year binding lease with rent sufficient to repay the City $8,730,000 plus 3% interest and Foundation's $3,350,000 purchase price. The lease will grant Company an option to purchase the land and Building on any anniversary of the commencement date of the lease for a purchase price equal to the greater of (a) the then appraised value, or (b) $12,080,000. Company will receive a credit against the purchase price equal to 77% of rent paid. City and Foundation will receive at a minimum funds spent to acquire and improve the property. If purchased, Company will secure performance of its employment commitment by a first deed of trust on the property. All amounts received by Foundation under the lease including the purchase price from Company in excess of the amount required to repay the City and Foundation will be divided 77% to City and 23% to Foundation based on a total project cost of $14,500.000 of which $11,150,000 is City Funds. Foundation will give to the City its $8,730,000 ($11,150,000 less $2,420,000 Employment Incentive) promissory note which together with Foundation's performance will be secured by a first deed of trust lien on the land and Building. Additionally, $2,000,000 will be transferred and reserved in the Sales Tax fund as and for capitalized and prepaid maintenance, operation and staffing expenses associated with the Airport fire station to meet and comply with the U.S. Air Force's requirement that fire /crash /response support be available. $200,000 per year will be annually budgeted, appropriated and transferred to the City for 10 years starting with 2007 for such purposes. Since the Company's hangars and ramps are outside the airport on land not annexed to the City, Company and City will enter into an airport access permit allowing Company's aircraft used in the flight program to access and use the airport. Company will pay the City for the benefit of the airport an access fee in the amount of $5,000 per month in lieu of taxes and fees generally paid by fixed base operators -2- and hangar related operations. Company will install on the leased property a fuel storage facility, and will also pay a fuel flowage fee of 6¢ per gallon for each gallon of aviation fuel delivered to Company's fuel storage facility. Payment in lieu of taxes and fuel flowage fees will be increased every 2 years based on the increase in the consumer price index. The financial and otherdetails of the Company's project were negotiated by PEDCO and PEDCO recommends that City Council approve the project. FINANCIAL IMPACT See Background. -3- AGREEMENT THIS AGREEMENT entered into as of May 22, 2006 between Pueblo, a municipal corporation (the "City ") and Doss Aviation, Inc., a Texas corporation (the "Company "). WHEREAS, Company has expressed a willingness to locate its initial flight screening business within the Pueblo Memorial Airport Industrial Park, and in furtherance thereof has through the Pueblo Economic Development Corporation ( "PEDCO ") made application for funds with the City, and WHEREAS, PEDCO has recommended to the City Council that City approve such application, and WHEREAS, the City Council based on PEDCO's recommendations has approved such application and will make funds available to Company subject to and upon the terns and conditions of this Agreement. NOW, THEREFORE, in consideration of the foregoing and mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, City and Company agree as follows: 1. The following terms as used in this Agreement shall have the following meaning unless the context clearly indicates otherwise: "Access Permit" means the Access Permit attached hereto as Exhibit "A." "Employment Commitment Date" means April 1, 2008. "Facility" means the approximately 173,519 square foot building located on the Property ( "Building ") and three (3) hangars of approximately 19,600 square feet each ( "Hangars ") to be constructed on the Property wherein Company will conduct its business operations. "Full -Time Employee" means a person who actually performs work at the Facility for not less than thirty -two (32) hours per week at an average annual salary of not less than $44,000.00 per year plus benefits, whether employed by Company or by an outside entity acting as an agency to provide Full -Time Employees for Company. The term "Full -Time Employee" does not include independent contractors or subcontractors or their employees, such as food, cleaning or janitorial services employees, nor officers or shareholders of Company. Since the hours of employment for flight pilot instructors may vary depending on flight training activities, Full - Time Employees can include full -time equivalent employees computed on thirty -two (32) hours per week for flight pilot instructors up to twenty percent (20 %) of the total number of Full -Time Employees actually employed by Company. "Lease" means an enforceable long -term lease of the Property between Company, as Lessee and PEDCO Foundation, Inc. as Lessor for a term not less than eleven (11) years. "Property" means Parcel B, Lot Line Rearrangement 2005 -005 according to the recorded plat thereof filed in the records of the Pueblo County Clerk and Recorder, street address: No. 1 William White Boulevard, Pueblo, Colorado. "Quarter" means three consecutive calendar months commencing January 1, April 1, July 1 and October 1 of each calendar year. "Quarterly Employees" means the sum of the aggregate number of Full -Time Employees on each business day of a Quarter, divided by the number of business days in such Quarter. 2. City will advance to or for the benefit of Company funds in an amount not to exceed $2,420,000.00 (the "City Funds "), subject to and contingent upon the following conditions and covenants which Company agrees to perform and comply with: (a) Company shall use City Funds solely for the construction of the Hangars. (b) Company shall file in the office of the City Clerk copies of the following: (i) Company's certificate or other evidence of authority to transact business in the State of Colorado issued by the Colorado Secretary of State, (ii) certified copy of the resolution of the governing board of Company approving this Agreement, Lease and Access Agreement and authorizing its officers to execute and deliver this Agreement, Lease and Access Agreement in the name of Company, (iii) executed copy of the Lease, and (iv) executed copy of the Access Agreement. The date of the last to occur of the filings required under (i), (ii), (iii), and (iv) of this Paragraph 2(c) shall be referred to herein as "Closing." If Closing does not occur on or before July 1, 2006, or such later date as Company and City shall mutually agree, City, at its sole option, may terminate this Agreement and City and Company shall thereafter be released and discharged from all obligations hereunder. (c) As conditions precedent to disbursement or payment of City Funds, Company shall file (i) with the City Clerk the documents required by (b) above, and (ii) with City's Director of Finance written request for payment certified to be true and correct by an officer of Company or its representative that the amounts included in the request for payment have not been included in any prior request for payment and are for the actual cost of constructing the Hangars, identifying the construction work for which payment is sought, including certificates of the architect and contractor that the construction work for which payment is sought has been completed. All City Funds received by Company shall be deposited in a separate account and held in trust by Company for the sole and only purpose of paying for construction of the Hangars. 3. Company acknowledges and agrees that the primary purpose of City in entering into this Agreement and the sole benefit to the City for making City Funds available to Company hereunder is the creation of jobs. Therefore, Company represents, covenants, and agrees that it will after Commencement Date of the Lease continuously conduct its business operations and employ Full -Time Employees at the Facility as follows: (i) during the period from Commencement Date of the Lease to the Employment Commitment Date, Company shall use its best efforts in good faith to employ as many Full -Time Employees as reasonably justified by its business operations, and (ii) on and after the Employment Commitment Date, Company shall employ not less than one hundred twenty -one (121) Full -Time Employees at the Facility (the `Employment Commitment "). 4. Notwithstanding anything contained in this Agreement to the contrary, if Company shall for any reason default in its Employment Commitment set forth in Paragraph 3, Company shall repay to City a pro -rata share of the City Funds advanced by City under Paragraph 2 hereof based upon the number of Full -Time Employees employed by Company at the Facility (the "Repayment Obligation "), as follows: (a) During the seven (7) year period starting on the Employment Commitment Date and ending eighty -four (84) months thereafter (the "Repayment Period "), Company shall pay to City an amount each Quarter equal to the Quarterly Employees less than one hundred twenty -one (121) Full -Time Employees employed at the Facility by Company multiplied by $714.29 (the "Company's Quarterly Payments "). For example, if for the second Quarter of the third year after the Employment Commitment Date such Quarterly Employees is 100, the amount payable by Company to City on or before the fifteenth (15th) day of the next calendar month would be (121 - 100) x $714.29 = $15,000.09. (b) Company's Quarterly Payments, if any, shall be paid to the City without notice, demand, deduction or setoff on or before the fifteenth (15th) day of the month after the end of each Quarter during the Repayment Period and for one month thereafter at the office of the Director of Finance of City, 1 City Hall Place, Pueblo, Colorado, 81003, or such other person or location as the City may designate. All past due Company's Quarterly Payments shall bear interest at the rate of eight (8) percent per annum ( "Default Rate ") until paid. (c) Within fifteen (15) days after the end of each Quarter after the Employment Commitment Date and for one calendar month after the Repayment Period, Company will submit to City's Director of Finance Company's statements showing the Quarterly Employees and their aggregate salaries for the preceding Quarter and the basis upon which Quarterly Employees and Company's Quarterly Payment, if any, were computed certified by an officer of the Company to be true and correct. For purposes of verifying such employment, City shall have access to Company's records relating to Company's employees employed at the Facility. Except in the event of any action filed by City to enforce this Agreement, City shall treat such information as confidential and shall not disclose (except pursuant to a subpoena or court order) such information to any party other than those City employees who have a need to know such information. (d) Notwithstanding anything herein to the contrary, if Company defaults in 3 the performance of any material covenant or obligation under the Lease, the Access Permit, or this Agreement including, without limitation, its Repayment Obligation or its Employment Commitment, and such default is not cured within sixty (60) days after written notice specifying the default is given by City to Company, then in such event, City may declare the entire balance of Company's Repayment Obligation due and owing together with interest thereon from the date of default at the Default Rate, and for such purpose, the entire balance of Company's Repayment Obligation shall be an amount equal to 121 times $714.29 multiplied by the remaining Quarters of the Repayment Period plus the amount of Company's unpaid Quarterly Payments, if any. Company's Repayment Obligation is absolute and unconditional and shall not be abated, reduced, diminished, modified, withheld or otherwise offset for any cause or reason whatsoever. (e) Except as otherwise provided in Paragraphs 7 and 13 hereof, City's damages for breach of Company's Employment Commitment or Repayment Obligation shall not exceed $2,420,000.00 plus interest, provided, however, that the $2,420,000.00 shall be reduced by $86,429.09 for each Quarter Company meets its Repayment Obligation during the Repayment Period by either (i) employing one hundred twenty -one (121) Quarterly Employees at the Facility, or (ii) paying Company's Quarterly Payments as provided in Paragraph 4(a) above for such Quarter. 5. All City Funds advanced to Company by City under this Agreement shall be deemed to be a debt of Company payable to City until Company performs and discharges its obligations hereunder including its Repayment Obligation contained in Paragraph 4. 6. (a) Prior to instituting any proceeding to enforce Company's Repayment Obligation under Paragraph 4, City shall notify Company in writing of its intention to institute such proceedings. Company may request relief from its Repayment Obligation by delivering to City within thirty (30) days after date of City's notice, Company's written request for relief specifying the grounds upon which such relief is sought together with documents supporting said grounds. Within ninety (90) days after receipt of Company's request, City will schedule a meeting with the City Council at which Company may appear. City will notify Company of the time and place of the meeting at least ten (10) days before the meeting. Failure of Company to timely deliver its complete written request for relief or to appear at the scheduled meeting with the City Council shall entitle City to immediately institute proceedings to enforce Company's Repayment Obligation. (b) City Council may or may not, in its sole and absolute discretion, relieve Company, in whole or in part, from Company's Repayment Obligation. Any action taken by the City Council relating to a request for relief shall be final and binding on Company, and not subject to judicial review. Any such action by City Council is, and shall constitute, a legislative measure. Nothing contained in this Paragraph 6 shall grant or be construed to grant to Company any right or claim to relief from its Repayment Obligation or hearing with respect thereto. (c) No delay by the City in scheduling a meeting, or failure by City to 0 exercise its right to enforce this Agreement, including Company's Repayment Obligation, and no partial or single exercise of that right, shall constitute a waiver of that right. 7. In the event of any litigation arising under this Agreement, the court shall award to, and the prevailing party shall recover its costs together with all internal and out -of- pocket expenses of any kind relating to the litigation including, but not limited to, reasonable attorney fees. Venue for any such litigation shall be Pueblo County, Colorado. All such litigation shall be filed in the District Court, County of Pueblo, State of Colorado and each party submits to the jurisdiction of such District Court. To the extent allowed by law, each party waives its right to a jury trial. 8. This Agreement expresses the entire understanding of the parties and supersedes and abrogates any and all prior dealings and commitments, whether oral or written, with respect to the subject matter of this Agreement and may not be amended or modified except in writing signed by City and Company. Any waiver of any provision of this Agreement must be in writing and signed by the party whose rights are being waived. No waiver of any breach of any provision hereof shall be or be deemed to be a waiver of any preceding or subsequent breach of the same or any other provision of this Agreement. The failure of either party to enforce or seek enforcement of the terms of this Agreement following any breach shall not be construed as a waiver of such breach. 9. This Agreement shall be construed in accordance with and be governed by the laws of the State of Colorado without regard to conflict of law principles. 10. Any notices hereunder shall be sufficiently given if given in writing personally or mailed by first class, registered, or certified mail, postage prepaid, addressed: (a) if to City, City Manager, City of Pueblo, 1 City Hall Place, Pueblo, Colorado, 81003, with copy to Thomas E. Jagger, City Attorney, 127 Thatcher Building, 503 N. Main Street, Pueblo, Colorado, 81003, or (b) if to the Company, Doss Aviation, Inc., 3320 Carefree Circle West, Colorado Springs, Colorado, 80917, or to such other person or address as either party shall specify in written notice given to the other party pursuant to the provisions of this Paragraph 10. Notice shall be effective (i) upon receipt if delivered personally, or (ii) three (3) business days after deposit in the mails, if mailed. 11. Time is of the essence hereof. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns, provided Company may not assign this Agreement or any interest herein without the express written consent of the City which will not be unreasonably withheld or delayed. Any assignment or attempted assignment of this Agreement by Company without such consent shall be null and void. No assignment of 5 this Agreement or any interest herein by Company shall release or discharge Company from any of its obligations under this Agreement unless otherwise agreed by City at the time consent to assignment is given. 12. The persons signing this Agreement in the name of and on behalf of Company represent and warrant that they and Company have the requisite power and authority to enter into, execute, and deliver this Agreement, and that this Agreement is a valid and legally binding obligation of Company enforceable against Company in accordance with its terms. 13. Company represents and warrants that no person, entity, or organization has been employed or retained or will receive or be paid, directly or indirectly, any commission, percentage, contingent fee or any other remuneration payment or receipt of which is contingent upon approval of this Agreement by City or City's advancement of City Funds to Company hereunder. For breach or violation of this warranty, City shall have the right to terminate this Agreement, or recover the full amount of such commission, percentage, contingent fee or other remuneration, or to seek such other remedies legally available to City, which remedies shall be cumulative. 14. In no event shall City, its officers, agents or employees be liable to Company for damages, including without limitation, compensatory, punitive, indirect, special or consequential damages, resulting from or arising out of or related to this Agreement or the performance or breach thereof by City or the failure or delay of City in the performance of any covenant or provision under this Agreement on its part to be performed. In consideration of City entering into this Agreement, Company hereby waives and discharges City, its officers, agents and employees from all claims for any and all such damages. No breach, default, delay or failure of City under this Agreement shall be or be construed to be a waiver, discharge or release of Company's Repayment Obligation under Paragraph 4 hereof with respect to the amount of City Funds actually advanced or paid by City to or for the benefit of Company pursuant to Paragraph 2 hereof. 15. If any provision of this Agreement is declared by a court of competent jurisdiction to be invalid or unenforceable, such determination shall not affect the other provisions of this Agreement which shall remain in full force and effect. 16. Neither party shall be, or hold itself out as, agent of the other or as joint ventures under this Agreement. 17. Each party acknowledges that this Agreement was fully negotiated by the parties and, therefore, no provision of this Agreement shall be interpreted against any party because such party or its legal representative drafted such provision. 18. The provisions of this Agreement are for the exclusive benefit of the parties hereto and their successors and permitted assigns, and no third party shall be a beneficiary, or G have any rights by virtue of, this Agreement. 19. This Agreement may be executed in any number of counterparts, and each such counterpart shall be deemed for all purposes to be an original, and all such counterparts shall together constitute but one and the same original. Executed at Pueblo, Colorado, the day and year first above written. [SEAL] Attest: Z City erk Pueblo, a Municipal Corporation B Pr ent of the City Council [SEAL] ` Attest: Name: David M. Nicola Title: Vice President STATE OF COLORADO ) ss. COUNTY OF PUEBLO 1 DOSS AVIATION, INC., a Texas corporation By Name: Frank G. Hunter Title: President/CEO foregoing instrument was acknowledged before me this LgT( day of 2006 by Michael Occhiato as President of the City Council and Gina Dutcher as ity Clerk Pueblo, a municipal corporation. hand and official seal. My ion expires: - 21 -2Cn7 AL] BL1G Oha� �V..}'1OIlJr7'' Notary Public ST COUNTY OF ) ss. 7 The foregoing instrument was acknowledged before me this IS' day of 2006 by Frank G. Hunter as President /CEO and David M. Nicola as Vice President o Doss Aviation, Inc., a Texas corporation. Witness my hand and official seal. My commission expires: [SEAL] ��rrr.� i�rri Ell ACCESS PERMIT EXHIBIT "A" ACCESS PERMIT THIS ACCESS PERMIT is entered into as of May 22, 2006 between the City of Pueblo, a municipal corporation ( "City ") and Doss Aviation, Inc , a Texas corporation ( "Permittee ") Recitals A. City owns and operates the Pueblo Memorial Airport ( "Airport") B Permittee occupies Parcel B, Lot Line Rearrangement No 2005 -005, Pueblo County, Colorado, street address No 1 William White Boulevard, Pueblo, Colorado, adjacent to the Airport ( "Leased Premises ") under Lease dated as of May 22, 2006 between PEDCO Foundation, Inc., as Lessor and Permittee, as Lessee ( "Lease ") C Permittee will conduct and operate on the Leased Premises an initial flight screening program ( "Program ") under contract with the United States Air Force ( "Air Force Contract ") D There is or will be located on the Leased Premises an aircraft ramp and three (3) approximately 16,900 square foot hangars as depicted on Exhibit "A" ( "Aircraft Area ") for the movement, parking and repair of Permittee owned or leased aircraft used in the Program pursuant to the Air Force Contract. E. The term "Authorized Aircraft" as used herein means (i) Permittee owned or leased aircraft located on the Aircraft Area used in the Program pursuant to the Air Force Contract, and (ii) subject to written certification received by City from a qualified engineer acceptable to City that the taxiway connecting the Aircraft Area to Runway 35 is structurally and otherwise capable of handling such aircraft, aircraft having a gross weight of less than 12,500 pounds used by military personnel who on occasion will visit the Leased Premises in conjunction with the Program. F Permittee desires that City permit Authorized Aircraft located on the Aircraft Area to access the Airport and City is willing to permit Authorized Aircraft access to the Airport subject to and upon the conditions hereinafter set forth. NOW, THEREFORE, in consideration of the foregoing Recitals and mutual covenants contained herein, City and Permittee agree as follows 1 Fencing. It is the responsibility of Permittee to control the unauthorized access of persons and vehicles entering the Airport from the Leased Premises. Therefore, Permittee shall install and maintain in good repair and condition a security fence along the entire perimeter of the Leased Premises ( "Security Fence ") The Security Fence and access to the Leased Premises will meet the security fence requirements of the Federal Aviation Administration and approval of the City The Security Fence shall only allow access to the Leased Premises at two locations, one off William White Boulevard and parking lot which will be restricted by a guard station manned 24 -hours each day during the first two days of the amval of a new class of students and restricted by motorized gate, access badges and security cameras the remainder of the time as described in the Air Force Contract ( "Guard Station "), the other as described in Paragraph 2 below 2 Access Gate. Permittee shall install in the Security Fence at a location approved by City on the easterly boundary of the Aircraft Area a secure access gate for Authorized Aircraft access to the Airport along a taxiway connecting the Aircraft Area to the existing concrete pad adjacent to Runway 35 ( "Aircraft Access Gate ") The Aircraft Access Gate shall only be opened and used by Permittee's personnel approved by City only for movement of Authorized Aircraft and shall be kept closed and secured by Permittee at all other times. All points of access to the Aircraft Area shall be secured or guarded by Permittee during all times the Aircraft Access Gate is open. 3 Airport Use. Authorized Aircraft shall only be permitted to travel on the Airport on taxiways and runways designated and approved by City In the use of the airport, Permittee, its officers, agents, employees and students (i) shall faithfully observe and comply with all applicable federal, state, and local laws, rules and regulations, including, without limitation, ordinances and rules regulating operations and activities from and upon the Airport adopted from time to time by City, and (ii) shall not use the Airport in any manner which would interfere with the landing and taking off of aircraft at the Airport or otherwise constitute a hazard to aviation. City shall be the sole fudge of whether any use or activity is or has constituted such hazard or interference 4 Term The term of this Permit shall be ten (10) years commencing on date hereof and ending one hundred twenty (120) calendar months thereafter, unless sooner terminated as hereinafter provided ( "Term ") This Permit shall automatically terminate upon the occurrence or any one or more of the following events (a) The expiration of the Term, (b) Mutual agreement of City and Permittee, (c) Expiration or termination for any reason of the Air Force Contract; (d) Expiration or termination for any reason of the Lease, or, (e) Failure of Permittee to correct and remedy any breach of this Permit within sixty (60) days after notice of default is given to Permittee by City describing the breach, provided, however, if the breach relates to payment in lieu of taxes and fees Airport Use, Security Fence, Guard Station and/or Access Gate, such breach shall be corrected and remedied immediately after notice is given by City to Permittee. 5 Payment in Lieu of Taxes and Fees. Permittee shall pay to City in advance on or before the tenth (10` day of each calendar month during the effective period of this Permit the sum of Five Thousand and Noll 00 Dollars ($5,000 00) in lieu of general property and sales and use taxes, and other fees and charges normally paid for similar or like uses of the incorporated area of Airport; for example, fixed base operators and hangar related operations. In addition, if Permittee constructs, installs or operates an aviation fuel storage or dispensing facility for Authorized Aircraft on the Leased Premises ( "Fuel Facility "), Permittee shall pay a fuel flow fee of six (6) cents for each gallon of aviation fuel delivered to the Fuel Facility The fuel flow fee shall be paid on the 10 of each calendar month for all aviation fuel delivered to the Fuel Facility during the preceding calendar month. Payments in lieu of taxes and fees and fuel flow fee ( "Payments ") shall be paid without notice, demand, offset or deduction at the office of the City's Director of Finance and shall be accompanied by such reporting forms as the Director of Finance shall determine. City shall have the right to examine and audit Permittee's books and records relating to fuel flow fee, if any All overdue Payments shall accrue interest at the rate of eight percent (8 %) per annum. Payments shall be increased every two (2) years based upon the increase in the Consumer Price Index during each prior two (2) year period. 6 Indemnification. Permittee shall indemnify, defend and save harmless City, its officers, agents and employees from all demands, claims, costs, causes of action or judgments, and from all expenses incurred by City, in investigating or resisting the same, including reasonable attorney fees, arising from or growing out of the acts or omissions of Permittee, its officers, agents, students, employees, successors or assigns in connection with its use or occupancy or their use or occupancy of any portion of the Airport. The provision of this Section shall survive the termination of this Permit. 7 Insurance. At all times during the Term of this Permit, Permittee agrees that it will, at its own costs and expense, provide and keep in force aircraft public and passenger liability insurance and commercial liability insurance which includes personal injury, products liability, hangar keepers liability, aircraft operators liability, contractual coverage and property damage with a combined single limit of not less than one million dollars ($1,000,000) per occurrence naming the City as an additional insured. Permittee shall provide workers' compensation insurance complying with the Colorado Workers' Compensation Act. Permittee shall provide City with copies showing proof of such insurance and subsequent renewals or changes as might occur during the Term of this Permit. 8 Inconvenience DurmR Construction. Permittee recognizes that from time to time it will be necessary for City in its sole discretion to initiate and carry forward programs of construction, reconstruction, expansion, relocation, maintenance and repair at and to the Airport ( "Construction Work ") in order that the Airport and its facilities may be suitable for the volume and character of air traffic and flight activity which will require accommodation, and that such Construction Work may inconvenience or interrupt Permittee's operations at the Airport. Except in emergencies, City will give written notice to Permittee at least twenty -one (21) calendar days prior to commencement of Construction Work which may inconvenience or interrupt Permittee's operations at the Airport Permittee agrees that no liability shall attach to City, its officers, agents, employees, contractors, subcontractors and representatives by reason of such inconvenience or interruption, and for and in further consideration of the premises, Permittee 3 waives any right to claim damages or other consideration therefor 9 Assignment. This Permit is appurtenant to the Program and is limited to access by Authorized Aircraft, therefore this Permit may not be separated from the Program or assigned or transferred independent of the Program, but may be assigned in conjunction with the Program, and then only with the prior written consent of City which consent will not be unreasonably withheld or delayed. No assignment of this Permit shall release or discharge Permittee from its obligations under this Permit unless City at the time of consent to assignment shall determine otherwise. 10 Agreements with United States. This Permit is subject and subordinate to the terms, reservations, restrictions, provisions, and conditions of the deed of conveyance from the United States Government to City and of any other existing or future agreement between City and the United States, relative to the use, operation or maintenance of the Airport and its appurtenant facilities. 11 Notices. All notices, required to be given to City hereunder, shall be in writing and personally served or be sent by certified mail to City Manager, 1 City Hall Place, Pueblo, Colorado, 81003, and to Airport Administration Office, 31201 Bryan Circle, Pueblo, Colorado 81001 All notices required to be given to Permittee hereunder shall be in writing and personally served or sent by certified mail, addressed to Doss Aviation, Inc., 3320 Carefree Circle West, Colorado Springs, Colorado, 80917, provided, that the parties, or either of them, may designate in writing from time to time subsequent or supplementary persons or address in connection with said notices. The effective date or service of any such notice shall be the date such notice is personally served on City or Permittee, or the date such notice is mailed by City or Permittee, whichever is the case. 12 F.A.A. Lease Regulations. City reserves the right, without any obligation on its part to do so, to develop, modify, change, improve or abandon the Airport or any part thereof, as it may determine in its sole discretion, at any time, regardless of the desires or view of, and without interference or hindrance from Permittee or liability to Permittee. City reserves the right, without any obligation on its part to do so, to maintain and keep in repair the landing area of the Airport and all publicly owned facilities of the Airport, together with the right to direct and control all activities of Permittee in this regard. It is understood and agreed that nothmg contained in this Permit shall be construed to grant or authorize the granting of an exclusive right within the meaning of Section 308 of the Federal Aviation Act. 13 Miscellaneous. (a) This Permit and all of its covenants and provisions shall be binding upon and inure to the benefit of the parties hereto and their respective successors and, subject to section 9, approved assigns. (b) No waiver by City of any failure by Permittee to comply with any term or LI condition of this Permit shall be or shall be construed to be a waiver by City of any other failure by Permittee to comply with any term or condition of this Permit. (c) This Permit is subject to prior approval of the Federal Aviation Administra -tion. (d) In the event of any litigation ansmg under this Permit, the court shall award the prevailing party its costs and expenses of litigation including without limitation, reasonable attorney and expert witness fees. Exclusive venue for any such litigation or other proceedings ansmg under this Permit shall be in the District Court, Pueblo County, Colorado and the parties consent and submit to the jurisdiction of that Court. IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed as of the day and year first above written. CITY OF PUEBLO, A MUNIC AL CO B RPORATION � J Y Title Pre si dent of Ci tv Council DOSS AVIATION, INC By re t Attest Vice Pre derj/ Attest: J\_..,,�� tisz ►t City CVrk Approved as to form. ,57 City Attorr�j'' 5 Pueblo County Online Map Output Page Page I of 1 Roads O Parcels 0 R -1 Other /Unmaintain ad 0 Lots Zoning L�I R -2 feV lnte Ystate CD Blocks (_1 A -1 ] R_3 /0/F$)or Road 0 Building Footprints n A -2 ; 9-1 / ✓Local Street Rip Enterprise Tone La A -3 EC R -S Access Ramp I!' City of Pueblo AN A -4 M R -6 service DriW < pueblo West IM R -A 13 R Alley do Colorado City IN 0-1 No R -6 county Road u - Own of Avondale WX 6-4 & 5 -1 Private Read Town of Boone f"] 0 -1 C 5 -3 -H- Railroads Town of Rye # I -1 �fl 5 -3 04 ico Year Floodplain IN San Isabel National Forest IN I -2 n 5 -4 SOO Year FloodplaIn County Boundaries 1 -3 C- PUD ,..T Lakes, Streams b Rivers [`l RLUP The Pueblo County GIS Center makes no claims as to the accuracy of the information portrayed in this document. For further information, please contact the Pueblo County GIS Center. 215 W 10th St, Pueblo CC 81003 719.583.6240 (v) 719.583.6249 (f) http: //W W W. g is. CO. pLleblo.co. u slsei esri map.Esritnap ?Sery iceName= PuebloCounty &... 05/18/2006 AGREEMENT THIS AGREEMENT entered into as of May _. , 2006 between the City of Pueblo, a municipal corporation ( "City ") and PEDCO Foundation, Inc., a Colorado nonprofit corporation ( "Foundation "), WITNESSETH: WHEREAS, Doss Aviation, Inc. intends to conduct and operate an initial flight screening program for the U.S. Air Force at the Pueblo Memorial Airport, and WHEREAS, City will advance funds to Foundation for renovation, development and construction of facilities for the flight screening program as hereinafter provided, and WHEREAS, Foundation is willing to accept City's Funds for the flight screening program and undertake the acquisition, renovation, development and construction of such facilities. NOW, THEREFORE, in consideration of the foregoing and mutual covenants contained herein, City and Foundation agree as follows: 1. Property Purchase Foundation will purchase and acquire for lease to Doss Aviation, Inc. for a purchase price of $3,350,000.00 ( "Purchase Price ") marketable fee simple title to Parcel B, Lot Line Rearrangement No. 2005 -005 containing approximately 44.52 acres (the "Land ") together with all fixtures and improvements located thereon including, without limitation, an approximately 173,519 square foot building (the "Building "), street address: No. 1 William White Boulevard, Pueblo, Colorado. The Land and Building are collectively referred to herein as the "Property." City Funds as herein defined shall not be used for the purchase and acquisition of the Property. 2. City Funds City will make available and advance to Foundation, as needed, an amount not to exceed $11,150,000,00 from the City's 1992 -2006 Sales and Use Tax Capital Improvement Fund (the "City Funds ") to be used and expended solely for the following purposes: (a) $6,870,000.00 for remodeling the Building to meet and conform with the requirements of the U.S. Air Force Initial Flight Screening Program No. FA 3002 -04 -R -009, including, without limitation, training facilities, physical and personal security, lodging, dining and physical fitness facilities to house and screen between 1200 -1700 Air Force officer students per year and office space for a permanent -party military cadre that will oversee the students while they are in residence at the Building (the "Building Remodeling "). (b) $3,570,000.00 for site preparation, drainage, and construction of three (3) approximately 19,600 square foot hangars (the "Hangars ") and ramp on the Land to park, store and repair aircraft used in training students assigned to the Initial Flight Screening Program, construction of a new taxiway from the Easterly boundary of the Land to the existing concrete pad connected to Runway 35, Pueblo Memorial Airport, and necessary and required security fences (collectively the "Hangar Construction "). (c) $710,000.00 for architect and engineering fees and geotechnical material and testing (the "A and E Fees "). (d) Foundation acknowledges and agrees that the $11,150,000.00 City Funds includes the $2,420,000.00 to be advanced to Doss Aviation, Inc. by City under separate agreement between City and Doss Aviation, Inc.. 3. Conditions to Advancement of City Funds City Funds will be advanced and paid in the amounts and for the purposes set forth in paragraph 2 hereof, subject to and contingent upon the following conditions and covenants which Foundation agrees to meet and comply with: (a) All contracts for the Building Remodeling and Hangar Construction shall be awarded after competitive proposals which allows qualified local contractors to participate in the competitive proposal procedures. (b) As a condition precedent to the disbursement of City Funds, Foundation shall file with the City's Director of Finance written requests for payment certified to be true and correct by an officer of Foundation or its representative that the amounts included in the request for payment have not been included in any prior request for payment and are for the actual cost of Building Remodeling, or Hangar Construction, whichever the case may be, identifying the cost incurred and purpose thereof, including certificates of the architect or contractor that the Building Remodeling or Hangar Construction work for which payment is sought has been completed and, if the request is for payment of A &E Fees, identifying the services performed, including invoices therefor. All City Funds disbursed directly to Foundation shall be deposited in a separate account and held in trust by Foundation for the sole and only purpose for which City Funds were disbursed. (c) City Funds will not be disbursed or made available to Foundation under this Agreement until after (i) Foundation has purchased and acquired marketable fee simple title to the Property, (ii) Foundation and Doss Aviation, Inc. have entered into a lease for the Property and use of the Hangars for a minimum binding term of eleven (11) years upon terms and conditions approved by Resolution of the City Council (the "Lease "), (iii) City and Doss Aviation, Inc. have entered into an employment commitment agreement and airport access permit approved by Resolution of the City Council, (iv) City has received from Foundation a certificate of good standing of Foundation issued by the Colorado Secretary of State, and certified copy of the resolution of the governing body of Foundation approving this Agreement, the Lease and Foundation's Promissory Note and Deed of Trust and authorizing its officers to execute and deliver the same in the name of Foundation, and (v) Foundation has executed and delivered to City the Promissory Note and Deed of Trust described in (d) below. (d) $8,730,000.00 of City Funds to be advanced by City to Foundation hereunder plus interest at the rate of three percent (3 %) per annum shall be evidenced by Foundation's promissory note ( "Promissory Note "). The Promissory Note and Foundations' obligations hereunder -2- shall be secured by a first deed of trust or mortgage lien on the Property superior to Foundation's Deed of Trust hereinafter described ( "Deed of Trust "), both in form and content approved by the City Attorney of City. The Promissory Note and Deed of Trust shall provide that Foundation's obligation in respect to the indebtedness secured thereby shall be limited solely to the value of the Property encumbered thereby, without right to any deficiency claim or judgment against Foundation. (e) The rent and option to purchase, if any, under the Lease shall be structured so that City will be paid $8,730,000.00 ($11,150,000.00 less $2,420,000.00 employment incentives) plus three percent (3 %) interest per annum in one hundred thirty-two (132) equal consecutive monthly payments out of the monthly rent, or if purchased, the balance thereof will be paid out of the purchase price paid by Doss Aviation, Inc. for the Property ( "City's Share "). All rent and other payments received by Foundation under the Lease representing City's Share shall be held in trust by Foundation for the benefit of the City and, immediately after receipt thereof by Foundation, Foundation shall deliver and, pay City's Share of the rent and other payments to City's Director of Finance ( "Director ") for deposit in the 1992 -2006 Sales and Use Tax Capital Improvement Project Fund. All City's Share of such rent or other payments received by City shall be applied first to interest, and the balance, in reduction of principal of Foundation's Promissory Note. (f) In the event Doss Aviation, Inc. purchases the Property pursuant to any option under the Lease, and the purchase price paid by Doss Aviation, Inc. is more than the then balance of principal and interest on the Promissory Note plus the then balance of the Purchase Price plus accrued interest secured by Foundation's Deed of Trust ( "Excess Amount "), seventy -seven percent (77 %) of the Excess Amount shall paid to City at closing of the purchase of the Property by Doss Aviation, Inc. (g) If Doss Aviation, Inc. performs its obligations under the Lease including payment of rent thereunder during the original eleven (11) year term of the Lease but does not purchase the Property pursuant to any option under the Lease, immediately upon the expiration of the original term of the Lease, Foundation shall convey to City marketable fee simple title in and to an undivided seventy -seven percent (77 %) interest in the Property free of liens and encumbrances. (h) If the Lease is extended by Doss Aviation, Inc. beyond the original eleven (11) year term of the Lease, seventy -seven percent (77 %) of the rent payable during the extended term(s) shall be paid to City immediately upon receipt thereof by Foundation. 4. Foundation's Enforcement of Lease The primary purpose of City in entering into this Agreement and the sole consideration for making City Funds available to Foundation is the creation of jobs and the economic development of the City and the Pueblo Municipal Airport. The enforcement of the Lease and Lessee's obligations thereunder will help and promote the accomplishments of such purposes. Therefore, Foundation shall timely, promptly and continuously monitor the performance of the Lessee under the Lease and enforce the terms, conditions and covenants of the Lease. In the event Foundation defaults in its performance of this Agreement or under the Lease, or refuses to enforce the Lease, then, in either event, Foundation does appoint City its true and lawful attomey -in -fact for Foundation and in Foundation's name, place and stead, to -3- enforce the performance of the Lessee under the Lease and the terms, conditions and covenants of the Lease, and for such purpose to bring any action or proceedings in any court of competent jurisdiction and to take all such steps as may be necessary with respect to such enforcement. The power of attorney hereby granted shall be deemed to be coupled with an interest and irrevocable. 5. Inalienability of Property Foundation will not voluntarily or involuntarily mortgage, encumber, lease or sublease, or extend or renew any lease or sublease, assign, sell or otherwise transfer the Property, or any part thereof, or any of its right, title or interest therein or in the Lease, without the prior written consent of the City Council of City. Any such mortgage, encumbrance, lease or sublease or renewal or extension, assignment, sale or other transfer without the prior written consent of the City Council of City shall be void and unenforceable. The City Council of City does hereby consent to (a) Foundation encumbering the Property by its deed of trust securing payment of an amount equal to the Purchase Price for the Property which is inferior to the Deed of Trust ("Foundation's Deed of Trust "), and (b) the Lease and the terms thereof, but retains the discretion to approve any Lease amendment, assignment, the amount of the rent in the event of extension, and the purchase price in the event of a sale of the Property as therein contemplated. If an event of default described in paragraph 7 hereof shall have happened, Foundation, at City's option, upon written request and in lieu of foreclosure on the Deed of Trust, will convey marketable fee simple title to the Property to City or such person or entity as City may designate by special warranty deed free of all liens and encumbrances, except the Lease, Deed of Trust, Foundation's Deed of Trust, general taxes for the year in which such conveyance takes place, and liens and encumbrances created or caused by the acts or defaults of City. The covenants of this paragraph shall be and construed to be covenants running with the land, and Foundation shall at the request of City execute and record an instrument to that effect in form and substance approved by the City Attorney. 6. Events of Default The following shall be "events of default" under this Agreement and the term "event of default" and "default" shall mean any one or more of the following events: (a) Failure of Foundation to deposit with the Director any Rent or other payments received by Foundation under the Lease representing City's Share as soon as reasonably possible after receipt by Foundation. (b) Failure of Foundation to observe and perform any covenant, condition or agreement on its part to be observed or performed under this Agreement, Promissory Note, Deed of Trust, Lease and/or Foundation's Deed of Trust other than as referred to in (a) above, for a period of sixty (60) days after written notice specifying such failure and requesting that it be remedied is given to Foundation by City; provided, however, that if the failure stated in the notice cannot be corrected within the sixty day period and corrective action is instituted by Foundation within the sixty day period and diligently pursued until the failure is corrected, no event of default shall have happened. (c) Failure of Doss Aviation, Inc. to comply with the Repayment Obligation and/or Employment Commitment as described in the separate agreement between the City and Doss Aviation, Inc. 10 7. Remedies on Default Whenever any event of default shall have happened and be continuing, City shall have the right, at its option, without any further notice or demand, to take whatever action at law or in equity may appear necessary or desirable to enforce its rights and Foundation's obligations hereunder, including without limitation, foreclosure of the Deed of Trust. No remedy herein conferred or reserved to City is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement and the Deed of Trust or now or hereafter existing at law or in equity. No delay or omission to exercise any right or power occurring upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right or power may be exercised from time to time and as often as may be deemed expedient. 8. Entire Understanding This Agreement expresses the entire understanding of the parties and supersedes any and all prior dealings and commitments with respect to the subject matter of this Agreement and may not be amended except in writing signed by City and Foundation. 9. Applicable Law This Agreement shall be construed in accordance with and governed by the laws of the State of Colorado, without regard to conflict of laws principles. 10. Notices Any notices hereunder shall be sufficiently given if given personally or mailed by certified mail, postage prepaid, addressed: (a) if to City, City Manager, City of Pueblo, 1 City Hall Place, Pueblo, Colorado, 81003, with a copy to Thomas E. Jagger, City Attorney, 503 N. Main Street, Suite 127 Thatcher Building, Pueblo, Colorado, 81003, or (b) ifto the Foundation, 301 N. Main Street, Pueblo, Colorado, 81003, Attention: President, or to such other address as either parry shall specify in written notice given to the other parry. 11. Representations of Foundation (a) The persons signing this Agreement, Promissory Note and Deed of Trust in the name of and on behalf of Foundation represent and warrant that they and Foundation have the requisite power and authority to enter into, execute, and deliver this Agreement, Promissory Note and Deed of Trust, and that this Agreement, Promissory Note and Deed of Trust are valid and legally binding obligations of Foundation enforceable against Foundation in accordance with their terms. (b) Foundation represents and warrants that no person, entity, or organization has been employed or retained or will receive or be paid, directly or indirectly, any commission, percentage, contingent fee or any other remuneration, payment or receipt of which is contingent upon approval of this Agreement by City or City's advancement of City Funds to Foundation hereunder. For breach or violation of this warranty, City shall have the right to terminate this Agreement, or recover the full amount of such commission, percentage, contingent fee or other remuneration, or :3 to seek such other remedies legally available to City, which remedies shall be cumulative. 12. City's Liability In no event shall City, its officers, agents or employees be liable to Foundation for damages, including without limitation, compensatory, punitive, indirect, special or consequential damages, resulting from or arising out of or related to this Agreement or the performance or breach thereof by City or the failure or delay of City in the performance of any covenant or provision under this Agreement on its part to be performed. In consideration of City entering into this Agreement, Foundation hereby waives and discharges City, its officers, agents and employees from any and all claims for any and all such damages. 13. Severability If any provision of this Agreement is declared by a court of competent jurisdiction to be invalid or unenforceable, such determination shall not affect the other provisions of this Agreement which shall remain in full force and effect. 14. No Third Party Beneficiary The provisions of this Agreement are and will be for the benefit of City and Foundation only and not for the benefit of any third party, and accordingly, no third party shall have any right or remedy hereunder or the right to enforce any provision of this Agreement. 15. Bindin Eg ffect Time is of the essence hereof. This Agreement shall be binding up and inure to the benefit of the City and Foundation and their respective successors. Foundation may not assign this Agreement or any of its rights hereunder. 16. Execution in Counterparts This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. Executed at Pueblo, Colorado, the day and year first above written. PUEBLO, A MUNICIPAL CORPORATION PEDCO FOUNDATION, INC. By P dent of the City Council Attest: \ __ ,�,c -�_. ar Attest: City i&erk Approved as to form: City Attorney G: \CITY ,.ft\.m AVietionV.greemen [(City- PEDCO)(Rev d5- 8- 06).wpd —6— LEASE THIS LEASE entered into as of May 22, 2006, 2006 by and between PEDCO Foundation, a Colorado nonprofit corporation (the "Lessor ") and Doss Aviation, Inc., a Texas corporation (the "Lessee "), WITNESSETH WHEREAS, Lessor is or will be the owner of Parcel B, Lot Line Rearrangement No 2005 -005 containing approximately 44 52 acres together with all fixtures and improvements located thereon including, without limitation, an approximately 177,927 square foot building and three (3) approximately 19,600 square foot hangers ( "Hangers "), Fences and other improvement located thereon at the Overall Commencement Date, street address No 1 William White Boulevard, Pueblo, Colorado, (collectively the Land, Hanger, Fences, Building and other improvements are referred to herein as the "Leased Premises "), and WHEREAS, subject to the covenants and conditions of this Lease, Lessor will remodel the Building, construct the Hangers and other improvements in accordance with plans and specifications therefore prepared by Hurtig, Gardner, Froelich Architects, Inc.(the "Architect ") and approved by Lessor and Lessee, and WHEREAS, Lessee is desirous of leasing and obtaining the option to purchase the Leased Premises upon the terms and conditions hereinafter set forth, NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions contained herein, Lessor and Lessee hereby agree as follows Article 1. Leased Premises. 101 Lessor hereby leases to Lessee and Lessee hereby leases from Lessor, subject to the covenants, provisions and conditions herein, the Leased Premises. 102 This Lease and Lessee's use of the Leased Premises are subject to the easements, rights -of -way, covenants, conditions, restrictions, reservations and limitations appearing of record, and all applicable zoning and land use laws, ordinances, codes and regulations governing and regulating the Leased Premises and its use Article 2. Building Construction 2.01 Lessor shall cause the Building remodeling, Hanger Construction, fencing and other improvements to be completed as herein provided (the "Remodeling ") and shall pay the actual cost of Remodeling, including architectural and engineering feesup to but not to exceed $11,150,000 00 (the "Maximum Construction Costs ") The Maximum Construction Costs consist of the $11,150,000 00 to be advanced by City to be used for Remodeling pursuant to an Agreement between Lessor and City of Pueblo (the "City ") dated as of May 22, 2006, ( "Lessor's City Agreement), and the separate agreement between the City of Pueblo and Lessee dated May 22, 2006 A copy of the Agreement between Lessee and the city of Pueblo is attached hereto as Exhibit "A" and incorporated herein (the "City Agreement ") Capitalized terms used in this Lease shall have the same meaning as those terms are used in the City Agreement and Lessor's City Agreement or otherwise defined herein 2 02 All costs and expenses of Remodeling in excess of the Maximum Construction Costs ( "Excess Construction Costs ") shall be the sole responsibility of Lessee and shall be paid by Lessee to Lessor in cash or certified funds within five (5) days after such Excess Construction Costs are incurred 2 03 The Remodeling shall be designed and constructed (a) in accordance with the plans, specifications therefore prepared by the Architect (the "Architect's Plans ") and the construction contract documents with the General Contractor approved by Lessee and Lessor (the "Construction Documents ") The Architect's Plans and Construction Documents after approval in writing by both Lessor and Lessee shall be incorporated herein by reference, as if set out herein in full, and (b) by a general contractor selected by Lessor after competitive bidding which allow qualified local contractors to participate in the competitive bidding procedures (the "General Contractor ") The General Contractor shall to the extent feasible use local subcontractors and suppliers. The term "local" means companies having their principal places of business in the City of Pueblo 2 04 Lessor and Lessee shall cooperate in good faith to cause the Remodeling to be substantially completed on or before December 15, 2006 Lessor shall cause remodeling to, and Lessee shall pay rent for, occupancy of approximately 24,448 square feet of the facility on or before September 15, 2006 ( "Phase One Commencement Date" or "Phase One ") The failure for any reason to substantially complete the Remodeling by December 15, 2006 or the Phase One remodeling by September 15, 2006 shall not affect the validity of this Lease nor the obligations of Lessor and Lessee hereunder, and shall not constitute a breach or default by Lessor hereunder, unless such failure is caused by the direct actions of Lessor 2 05 All changes in the approved Architect's Plans and Construction Documents shall be approved by Lessor and Lessee. The failure of Lessor or Lessee to approve or reject any proposed change in the Architect's Plans or Construction Documents, or any modification thereto, or any proposed change in the work within the general scope of construction contemplated by the Construction Documents, within five (5) days after receipt thereof shall constitute approval thereof, provided, however, that all changes which result in the construction costs to be greater than the Maximum Construction Costs must be approved in writing by both Lessor and Lessee, and Lessee shall pay to Lessor the cost of such change in cash or certified funds within five (5) days after the approval of such change by Lessor and Lessee 2.06 Whenever in this Article 2 or in any other Article of this Lease, the approval or consent of Lessor or Lessee is required, such approval or consent shall not be unreasonably withheld, conditioned or delayed Article 3. Term The Term of this Lease shall be eleven (11) years commencing upon the date that Lessor notifies Lessee that Remodeling has been substantially completed (the "Overall Commencement Date ") and ending eleven (11) years thereafter, unless sooner terminated as provided herein (the "Termination Date") If Lessee does not agree that the Remodeling has been substantially completed on the date specified in the notice from Lessor, Lessee shall promptly notify Lessor of its objection to those matters which are not substantially completed Lessor shall consider, in good faith, Lessee's objections and shall either (i) extend the Overall Commencement Date, or (ii) respond with an explanation of why substantial completion has occurred and the Overall Commencement Date shall be the same as previously stated in Lessor's original notice. Lessor and Lessee acknowledge and agree that certain obligations under various Articles of this Lease shall commence prior to Overall Commencement Date, including but not limited to Article 2, Building Construction, and Lessor and Lessee agree to and are bound by any such Articles prior to the Overall Commencement Date Article 4. Rent. 4 01 Lessee shall pay rent in the total amount of $14,197,524, payable, in advance and without notice, in one hundred thirty (132) equal monthly payments of $107,557 00 commencing on the Overall Commencement Date and continuing on the same day of each consecutive month thereafter during the eleven (11) year term of this Lease For the period beginning on the Phase One Commencement Date and ending on the Overall Commencement Date, Lessee shall pay rent in the amount of $14,668 per month ($ 60 per square foot per month) based on 24,448 square feet. City's share of rent and other payments received by Lessor under this Lease shall be held in trust for the benefit of City, and immediately after receipt thereof shall be paid to City as provided in the Lessor's City Agreement. 4 02 All monthly rent and other payments required to be made by Lessee hereunder which shall remain unpaid fifteen (15) days after their due dates shall bear interest at the rate of eight percent (8 %) per annum until paid All rent and other payments shall be made at or mailed by United States mail to the following address P O Box 1663, Pueblo, Colorado, 81002, or such other address as Lessor may from time to time designate to Lessee in writing 4 03 Lessee's obligation to pay rent to Lessor hereunder is absolute and unconditional and rent shall not be offset, abated, reduced or withheld for any cause or reason whatsoever 4 04 It is the intent of the parties hereto that this Lease be a "triple net" lease with Lessor incurring no obligation, monetary or otherwise, except for Remodeling under Article 2 hereof The "triple net" lease shall apply during the Phase One Period 405 Lessee shall pay, in addition to the rental amount and interest described in paragraph 4 01 above, a monthly lease management fee of $ 03 per square foot, based on 237,642 square feet at the Overall Commencement Date, and a monthly lease management fee of $ 03 per square foot based on 24,448 square feet at the Phase One Commencement Date. Said monthly maintenance payments shall be retained by Lessor and shall not be paid in accordance with paragraph 4 01 Article 5. Use of Leased Premises. 5 01 The Leased Premises shall be used and occupied by Lessee exclusively for commercial purposes associated with or incident to Lessee's business activities. 5 02 Lessee shall use the Leased Premises in a careful, safe and proper manner in compliance with all laws and regulations applicable to the Leased Premises and Lessee's use thereof Lessee shall not cause, maintain or permit any nuisance or waste in, on, or about the Leased Premises. 5 03 Lessee shall not abandon nor cease to conduct business on the Leased Premises for any period longer than 180 consecutive days Article 6. Condition of Premises. 6 01 EXCEPT AS SPECIFICALLY SET FORTH IN THIS LEASE, IT IS UNDER -STOOD AND AGREED THAT LESSOR IS NOT MAKING AND HAS NOT AT ANY TIME MADE ANY WARRANTY OR REPRESENTATION OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT TO THE LEASED PREMISES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY OR REPRESENTATION AS TO HABITABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE (OTHER THAN THE COVENANT OF QUIET POSSESSION SET FORTH IN ARTICLE 20), ZONING, PHYSICAL OR ENVIRONMENTAL CONDITIONS, UTILITIES, GOVERNMENTAL APPROVALS, THE COMPLIANCE OF THE LEASED PREMISES WITH GOVERNMENTAL LAWS, THE TRUTH, ACCURACY OR COMPLETENESS OF ANY DOCUMENT OR OTHER INFORMATION PROVIDED TO LESSEE BY ANY OTHER PERSON, OR ANY OTHER MATTER OR THING REGARDING THE LEASED PREMISES 6 02 The taking of possession of the Leased Premises by Lessee after both Phase One Commencement Date and Overall Commencement Date shall be conclusive evidence that the Remodeling has been substantially completed for both phases in compliance and accordance with the approved Architect's Plans and Construction Documents, that Lessee accepts the Leased Premises in its then present condition "As Is, Where Is, With All Faults ", with the exception of final cosmetic work/detail and that the Leased Premises are in good and satisfactory condition at the time such possession was taken. Article 7. Alterations and Imorovements. 7 01 Lessee shall not make any additions, alterations or improvements in or to the Leased Premises ( "Alterations ") without Lessor's prior written consent. Lessee shall not permit or allow any lien to be filed or recorded against the Leased Premises or Lessor's interest therein, and Lessee shall fully cooperate with Lessor in obtaining the protection afforded Lessor under Section 38 -22 -105, C R.S All Alterations made in or to the Leased Premises by Lessee shall become part of the Leased Premises and be surrendered with the Leased Premises at the termination of this Lease 7 02 All equipment, fixtures and improvements of a detachable or temporary nature installed or placed upon the Leased Premises by Lessee, including trade fixtures, shall remain the property of Lessee, subject to Lessee's right, at its option, to remove same not later than ten (10) days after termination of this Lease. Lessee, at its expense, shall promptly repair any damage resulting from such removal. The failure of Lessee to remove its equipment, fixtures and detachable improvements within ten (10) days after termination of this Lease shall, at the option of Lessor, be deemed an abandonment of such property and Lessor may dispose of such property as the Lessor, in its sole discretion, may determine. Article 8. Repairs and Maintenance 8 01 Except for Remodeling as provided in Article 2 hereof, Lessor shall not be obligated to repair, maintain or alter the Leased Premises or any part thereof Lessee, at its expense, shall keep and maintain the Leased Premises, including, without limitation, the Building and Hangers, structural components, roofs, walls, fixtures, and electrical, heating, mechanical, plumbing and air conditioning systems, fences and adjacent sidewalks and parking area, in good condition and repair and in a good, clean and safe condition at all times during the effective term of this Lease and return the same to Lessor at Termination Date in as good condition and state of repair as the same were in as of Overall Commencement Date, except for ordinary wear This obligation by Lessee shall begin after the Phase One Commencement Date 8 02 If Lessee becomes obligated to make repairs which are or may be covered by any manufacturer's or General Contractor's warranty issued to or for the benefit of Lessor, Lessor will assign and transfer to Lessee its interest in any such warranty for the purpose of making such repairs If any such warranty may not be legally assigned, Lessor, at the request and expense of Lessee, will in good faith enforce such warranty on behalf of Lessee 8 03 If Lessee becomes obligated to make repairs caused by an occurrence covered by the insurance described in Article 12, the net proceeds of such insurance shall be made available to Lessee to offset the cost of such repairs Article 9. Right of Entry Lessor, or Lessor's officers, employees, agents and representatives, as the case may be, may enter the Leased Premises during normal business hours upon forty -eight (48) hours prior written notice to Lessee (to accommodate necessary procedures), except notice shall not be required in case of emergency, such as fire Article 10. Assignment. Lessee shall not voluntarily or by operation of law assign all or any part of the Lease or Lessee's interest therein without the express written consent of Lessor and the City of Pueblo, which consent will not be unreasonably withheld Lessor or the City of Pueblo may withhold its consent if the proposed assignee's financial standing and responsibility at the time of the proposed assignment is insufficient in the Lessor's or City of Pueblo's sole discretion to give assurance of performance and compliance with all terms and conditions of this Lease and the City Agreement. Upon such an assignment and consent, Lessee shall be released from all obligations arising or occurring under this Lease after the effective date of such assignment and consent, provided that such assignee shall execute, acknowledge and deliver to Lessor an assumption agreement in form and substances satisfactory to Lessor and the City of Lessor within thirty (30) days after date of this Lease, and thereafter the Lessee will furnish to Lessor evidence of the continuance of the insurance coverage required herein within a reasonable time after the same has been issued 11 06 Lessee's obligations under this Article 11 during the Phase One Period shall be for a prorated portion of the square footage that Lessee will occupy Article 12. Fire and Extended Coveraae Insurance 12 01 Lessee shall, at its expense, during the Term of this Lease, secure and maintain in full force and effect "All- Risk" casualty insurance (including, without limitation, fire, extended coverage and boiler insurance) upon the Leased Premises Such insurance shall be in an amount not less than the full replacement value of the Building and improvements (without deduction for physical depreciation), and issued by an insurance company or association authorized to issue such policies under the laws of the State of Colorado and approved by Lessor, shall contain a deductible of not more than $15,000 00 and a standard Colorado mortgagee clause in favor of Lessor and the City of Pueblo, and shall not be subject to cancellation, reduction or modification upon less than thirty (30) days' written notice to Lessor Such insurance, by its terms or by endorsement, shall waive any right of subrogation of the insurer against Lessor and the City of Pueblo, its officers, agents and employees and their representatives, for any loss or damage resulting from covered perils Lessee will furnish to Lessor evidence of such insurance and its continuance during the Term of this Lease 12 02 Lessee shall, at its expense, secure and maintain fire and extended coverage insurance on all fixtures, equipment and improvements installed by Lessee on the Leased Premises Such insurance, by its terms or by endorsement, shall waive any right of subrogation of the insurer against Lessor and City of Pueblo and their representatives its officers, agents and employees, for any loss or damage resulting from covered perils 12 06 Lessee's obligations under this Article 12 during the Phase One Period shall be for a prorated portion of the square footage that Lessee will occupy Article 13. Taxes and Assessments 13 01 Lessee, shall promptly pay and discharge as they become due and before delinquency any and all property taxes, assessments, charges, liens, levies or excises, whether general or special or ordinary or extraordinary, of every name, nature and kind whatsoever, including all governmental charges of whatsoever name, nature or kind, which may be levied, charged or imposed, or which may become a lien or charge on or against the Leased Premises or any part thereof, the leasehold interest of Lessee herein, or the improvements situated on the Leased Premises during the effective period of this Lease General property taxes shall be prorated for periods falling within the Term of this Lease Notwithstanding the foregoing, Lessee shall have no responsibility to pay and /or discharge any mechanics' liens arising out of or relating to failure to pay for Remodeling made by Lessor prior to Overall Commencement Date, provided Lessee has paid to Lessor all Excess Construction Costs. 13 02 Lessee shall pay before delinquency any and all property taxes levied or charged against any of the personal property belonging to it and situated on the Leased Premises or used in connection with the operation and maintenance of the Building on the Leased Premises 13 03 Lessee shall have the right to contest or review, by legal proceedings at its own expense, and if necessary in the name of Lessor, or in such other manner as it may deem suitable, any tax, assessment, levy or charge herein agreed to be paid by Lessee under this Article 13 Lessee may defer payment of any such contested item if in connection with the proceeding instituted by Lessee there shall have been obtained a stay of the collection of the item so contested In the event of such contest, Lessee shall give Lessor written notice prior to the commencement of any such contest which shall be at least ten (10) days prior to delinquency of the item in contest and, on request of Lessor, Lessee shall give to Lessor a good and sufficient surety bond indemnifying Lessor and the Leased Premises against any such tax, assessment, levy or other charge and from any cost, liability or damage arising out of such contest. In the event any notices of proposed increases in taxes, assessments, levies or charges which are the obligation of Lessee are received by Lessor, it shall promptly, but in no event later than 45 days after receipt thereof, forward the same to Lessee in order that Lessee may proceed with payment or contest procedures within the periods provided for such purposes 13 04 All rebates or refunds on account of any tax assessments, levy or charge required to be paid and paid by Lessee shall belong to Lessee, and Lessor will, on request of Lessee, execute any documents which may be necessary in order to secure the recovery of any such rebates or refunds and shall promptly pay over to Lessee any such rebates or refunds that may be received by Lessor whether received before or after the end of this Lease 13 05 Lessee shall furnish Lessor within thirty (30) days after any amount is payable by Lessee under this Article 13, official receipts of the appropriate taxing authority or lienholder or other proof satisfactory to Lessor evidencing such payments as are required under this Article 13 13 06 Lessee's obligations under this Article 13 during the Phase One Period shall be for a prorated portion of the square footage that Lessee will occupy Article 14. Utilities 14 01 Lessee shall pay before delinquent City of Pueblo's combined service fee and all charges for sewer, water, gas, electricity, telephone and all other utility services furnished to or used in or supplied to the Leased Premises Lessor shall not be obligated to furnish or provide any utilities, facilities or services of any kind 14 02 Lessee's obligations under this Article 14 during the Phase One Period shall be for a prorated portion of the square footage that Lessee will occupy Article 15. Damaqe to or Destruction of Premises 1.5 01 If, during the Term of this Lease, the Leased Premises shall be damaged to such an extent that the repair of such damage and the restoration of the Leased Premises can be accomplished, with reasonable diligence, within one hundred eighty (180) days after such damage, Lessee shall promptly repair such damage and cause the Leased Premises to be restored to their condition prior to the event causing the damage If, during the Term of this Lease, the Leased Premises shall be destroyed or damaged, or partially destroyed or damaged, without Lessee's fault to such an extent that the repair of such destruction or damage and the restoration of the Leased Premises cannot be accomplished, with reasonable diligence, within one hundred eighty (180) days after destruction or damage, then Lessee shall promptly notify Lessor in writing of such fact within forty-five (45) days after the date of such destruction or damage, and Lessee shall thereafter have the right, during a period of thirty (30) days following such notification, to terminate this Lease by written notice to the Lessor, declaring this Lease to be terminated provided, however, that, as a condition precedent to such termination, all proceeds of insurance required to be maintained by Lessee under Article 12 01 shall be paid to Lessor and the City of Pueblo, or, if Lessee fails to maintain the insurance required to be maintained by Lessee under Article 12.01, an amount equal to the insurance proceeds which would have been available but for such failure shall be paid by Lessee to Lessor and City of Pueblo Unless such notice of immediate termination shall be given within such 30-day period, this Lease shall continue in full force and effect and Lessee shall promptly repair such destruction or damage and cause the Leased Premises to be restored to their condition prior to the event causing the destruction or damage In the event the Leased Premises are destroyed or damaged, or partially destroyed or damaged without Lessee's fault, the monthly rent payable by Lessee shall be abated proportionately according to the floor area of the Leased Premises which is useable by Lessee Such abatement shall continue for the period commencing with such damage or destruction and ending when Lessee completes repair work or reconstruction, provided Lessee diligently commences and expeditiously completes the repair work or reconstruction 15 02 Lessee shall make the repairs, restoration or rebuilding as expeditiously as possible in accordance with plans and specifications submitted to and approved in writing by Lessor and in compliance with all applicable laws, regulations and codes Article 16. Eminent Domain If the whole or substantial part of the Leased Premises shall be taken or condemned by any competent authority for any public or quasi - public use or purpose under any statute or by the right of eminent domain, or purchased under threat of such taking, then this Lease shall terminate on the date when the condemning authority takes possession of the Leased Premises or the substantial part thereof so taken There shall be no apportionment of the award for taking or condemnation, the entire award going to Lessor and City of Pueblo, provided Lessee shall have the right to recover any award which may be made for damages to or condemnation of Lessee's movable trade fixtures, equipment, furniture and furnishings or payments for relocation, if any In the event that Lessee has exercised it's option to purchase, as contained in Article 17 below, prior to the notification of the condemnation, the reward shall be divided according to the provisions set forth in Article 17 below Article 17. Option to Purchase Leased Premises 17 01 If Lessee is not in default hereunder or under the City Agreement, and has met and then meets its Employment Commitment as therein defined, Lessee shall have the option to purchase the Leased Premises on any anniversary of the Overall Commencement Date upon the terms and conditions contained in this Article 17 and Article 18 17 02 The option to purchase hereby granted shall be exercised by Lessee by delivering to Lessor and City of Pueblo written notice of Lessee's intent to exercise the option at least ninety (90) days prior to any anniversary of the Overall Commencement Date ( "Designated Purchase Date") 17 03 Closing and payment of the purchase price as determined in Article 17 04 in U S Dollars, in cash or certified funds to the City of Pueblo by Lessee shall be held and made on the Designated Purchase Date If the Designated Purchase Date is on a Saturday, Sunday or Holiday, the closing and payment shall take place on the next business day 17 04 The purchase price shall be the greater of (a) an amount equal to the appraised value of the Leased Premises on or not more than ninety (90) days prior to the Designated Purchase Date as determined by an independent appraiser qualified in appraising commercial real property who is a Colorado certified general appraiser and Member Appraisal Institute (MAI), selected by mutual agreement of Lessor, Lessee and City of Pueblo, or (b) $12,080,000 00 If Lessor, Lessee, and City of Pueblo are unable to mutually agree as to such appraiser within twenty (20) days after delivery of Lessee's notice of exercise of option, Lessee may, at its cost and expense (including attorney fees), petition the District Court, County of Pueblo, State of Colorado, to select after notice and hearing an appraiser from a list of three (3) appraisers consisting of the appraisers designated by Lessor, Lessee and City of Pueblo All fees and costs of the appraiser selected by mutual agreement or by the Court shall be paid by Lessee After receipt of the appraisal made by the selected appraiser, Lessee may decline to purchase the Leased Premises upon written notice given to Lessor and City of Pueblo prior to the Designated Purchase Date Such declination shall not prevent Lessee from purchasing the Leased Premises in accordance with the provisions of this Article 17 and Article 18 on any subsequent anniversary of the Commencement Date 17 05 Lessee shall be granted a credit against the purchase price in an amount equal to seventy -seven percent (77 %) of the rental payments made by Lessee pursuant to Article 4 01 hereof during the term of this Lease up to the Designated Purchase Date 17 06 As a condition precedent to the closing, at closing of the purchase of the Leased Premises by Lessee, Lessee shall execute and deliver to City of Pueblo its Deed of Trust on the Leased Premises securing performance by Lessee of the City Agreement in form and content acceptable to the City Attorney of Pueblo Such Deed of Trust shall be a first and valid lien on the Leased Premises Article 18. Conditions of Purchase Options. 18 01 Upon valid exercise of the purchase option, the terms of purchase and sale shall include the following conditions and requirements. (a) Conveyance shall be made by special warranty deed free of liens, except those for general property taxes and those created by the acts or defaults of Lessee, subject to easements, rights -of -way, conditions, covenants, restrictions, reservations, and limitations of record and those created by acts of defaults of Lessee, any matters contained in the Subdivision Plat for Pueblo Memorial Airport Industrial Park, and standard printed exceptions 1 through 4 contained in owner's title insurance customarily issued in Pueblo County, Colorado (b) LESSEE ACKNOWLEDGES AND AGREES THAT UPON CLOSING LESSOR SHALL SELL AND CONVEY TO LESSEE AND LESSEE SHALL ACCEPT THE LEASED PREMISES "AS IS, WHERE IS, AND WITH ALL FAULTS " LESSEE HAS NOT RELIED AND WILL NOT RELY ON, AND LESSOR IS NOT LIABLE FOR OR BOUND BY, ANY EXPRESS OR IMPLIED WARRANTIES, GUARANTIES, STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE LEASED PREMISES OR RELATING THERETO MADE OR FURNISHED BY LESSOR, OR AGENT REPRESENTING OR PURPORTING TO REPRESENT LESSOR, TO WHOMEVER MADE OR GIVEN, DIRECTLY OR INDIRECTLY, VERBALLY OR IN WRITING LESSEE REPRESENTS TO LESSOR THAT LESSEE HAS CONDUCTED, OR WILL CONDUCT PRIOR TO CLOSING, SUCH INVESTIGATIONS OF THE LEASED PREMISES, INCLUDING BUT NOT LIMITED TO, THE PHYSICAL AND ENVIRONMENTAL CONDITIONS THEREOF, AS LESSEE DEEMS NECESSARY TO SATISFY ITSELF AS TO THE CONDITION OF THE LEASED PREMISES AND THE EXISTENCE OR NONEXISTENCE OR CURATIVE ACTION TO BE TAKEN WITH RESPECT TO ANY HAZARDOUS OR TOXIC SUBSTANCES ON OR DISCHARGED FROM THE LEASED PREMISES, AND WILL RELY UPON SAME AND NOT UPON ANY INFORMATION PROVIDED BY OR ON BEHALF OF LESSOR OR ITS AGENTS OR EMPLOYEES WITH RESPECT THERETO LESSEE SHALL ASSUME THE RISK THAT ADVERSE MATTERS, INCLUDING BUT NOT LIMITED TO, CONSTRUCTION DEFECTS AND ADVERSE PHYSICAL AND ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN REVEALED BY LESSEE'S INVESTIGATIONS, AND, UPON CLOSING, SHALL BE DEEMED TO HAVE WAIVED, RELINQUISHED AND RELEASED LESSOR FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION (INCLUDING CAUSES OF ACTION IN TORT), LOSSES, DAMAGES, LIABILITIES, COSTS AND EXPENSES (INCLUDING ATTORNEYS' FEES AND COURT COSTS) OF ANY AND EVERY KIND OR CHARACTER, KNOWN OR UNKNOWN, WHICH LESSEE MIGHT HAVE ASSERTED OR ALLEGED AGAINST LESSOR AT ANY TIME BY REASON OF OR ARISING OUT OF ANY CONSTRUCTION DEFECTS, PHYSICAL CONDITIONS, VIOLATIONS OF ANY APPLICABLE LAWS (INCLUDING ANY ENVIRONMENTAL LAWS) AND ANY AND ALL OTHER ACTS, OMISSIONS, EVENTS, CIRCUMSTANCES OR MATTERS REGARDING THE LEASED PREMISES LESSOR AGREES THAT SHOULD ANY CLEANUP, REMEDIATION OR REMOVAL OF HAZARDOUS SUBSTANCES OR OTHER ENVIRONMENTAL CONDITIONS ON THE LEASED PREMISES BE REQUIRED BY ANY GOVERNMENTAL ENTITY AFTER THE DATE OF CLOSING, SUCH CLEAN -UP, REMOVAL OR REMEDIATION SHALL, AS BETWEEN LESSOR AND LESSEE, BE THE RESPONSIBILITY OF AND SHALL BE PERFORMED AT THE SOLE COST AND EXPENSES OF LESSEE. THE COVENANTS AND REPRESENTATIONS OF LESSEE SET FORTH IN THIS ARTICLE 18 01(c) SHALL SURVIVE THE RECORDATION OF THE SPECIAL WARRANTY DEED AND CLOSING AND SHALL NOT BE MERGED INTO THE SPECIAL WARRANTY DEED UPON ITS RECORDATION Article 19. Holding Over In the event that Lessee does not exercise its option to purchase under Article 17 and Lessee shall, with the consent of Lessor, retain possession of the Leased Premises after the expiration of the Term of this Lease, this Lease shall continue on a month -to -month basis at a rental equal to the fair market monthly rental value of the Leased Premises and upon all other terms, covenants and conditions herein specified, except Articles 17 and 18 Article 20. Quiet Possession Lessee shall, and may peacefully have, hold and enjoy the Leased Premises, subject to the other terms hereof, provided that Lessee pays the monthly rent herein recited and performs all of Lessee's covenants and agreements contained herein and in the City Agreement. Article 21. Default. 21 01 In the event of default at any time by Lessee in the payment of the monthly rent herein provided for or in the performance of any other of its covenants herein contained or contained in the City Agreement. Lessor shall have the right, after thirty (30) days' notice in writing to Lessee and Lessee's failure within said thirty (30) day period to cure said default, or if said default does not relate to the payment of money and cannot by its nature be cured within said thirty (30) day period, to undertake and diligently pursue action to cure said default, to either (a) terminate this Lease and re -enter and take possession of the Leased Premises, and /or (b) pursue any remedy whatsoever provided by law; and /or (c) re -enter and take possession of the Leased Premises and use its best efforts to relet the same for and on account of Lessee for the then full remaining portion of the unexpired Term of this Lease or for any shorter period, and to collect and receive payment of rent therefore, but no such re -entry or re- letting shall be construed as a termination of this Lease or as a release of Lessee from Lessee's obligation to pay monthly rent provided for in this Lease, or from Lessee's obligation to perform any other covenant herein contained It expressly being understood and agreed that in the event of any such re -entry or re- letting by Lessor such re -entry or re- letting shall not operate to terminate this Lease or alter the obligation of Lessee to perform its covenants and to pay monthly rent pursuant to the terms hereof unless Lessor expressly so elects pursuant to paragraph 22 01(a) above Lessor shall in noway be responsible or liable for any failure to re -let the Leased Premises, or any part thereof, or for any failure to collect any rent due upon such re- letting No notice from lessor hereunder or under a forcible entry and detainer statute or similar law constitutes an election by Lessor to terminate this Lease unless such notice specifically so states Lessor reserves the right following any such re -entry and /or reletting to exercise its right to terminate this Lease, and /or (d) cure the default on Lessee's behalf and at Lessee's expense, in which event, all costs, expenses and reasonable attorney's fees incurred by Lessor in curing the default together with interest thereon at the rate of eight (8) percent per annum shall constitute additional rent payable to Lessor by Lessee upon demand 2102 If Lessor does not elect to terminate this Lease but takes possession as provided for in Article 2101 (c), Lessee shall pay to Lessor the monthly rent and other charges at the times and in the manner as herein provided which would be payable if such repossession had not occurred, less the net proceeds, if any, of any re- letting of the Leased Premises after deducting all Lessor's reasonable expenses including, without limitation, all repossession costs, brokerage commissions, legal expenses, attorneys' fees, alteration and repair costs and expenses of preparation for such re- letting 21 03 In the event the parties hereto become involved in a dispute arising out of this Lease, or the performance or breach thereof, the Court shall award costs, expenses, and attorney fees to the prevailing party 2104 If Lessee violates any of the terms and provisions of this Lease or defaults in any of its obligations hereunder other than the payment of monthly rent or other sum payable hereunder, such violation may be restrained or such obligation enforced by injunction at the instance and request of Lessor without the showing of any special damages or an inadequate remedy at law 21 05 In the event of default by Lessor of any terms and obligations of this Lease hereunder, Lessee shall provide notice to Lessor of said default. If default cannot be cured within a thirty (30) day period after receipt of notice from Lessee to Lessor, Lessee shall have the right to (a) seek any remedy allowed by law; and/or (b) cure the default on Lessor's behalf and at Lessor's expense, in which event, the total costs and expenses incurred by Lessee in curing the default may be withheld from any monthly rent or maintenance fee payments until such time as all costs and expenses incurred have been paid by Lessor Article 22. Waiver and Time of Essence No waiver of any breach or breaches of any provision, covenant or condition of this Lease shall be construed to be a waiver of any preceding or succeeding breach of such provision, covenant or condition, or of any other provision, covenant or condition Acceptance of monthly rent or partial monthly rent by Lessor shall not constitute a waiver of any then existing or subsequent breach or default. Time is of the essence for each and every provision, covenant and condition herein contained and on the part of Lessee to be done and performed Article 23. Assiqnment by Lessor Lessor shall have the right to transfer and assign, in whole or in part, all its right and obligations hereunder and in the Leased Premises with the consent of the City of Pueblo, and in such event and upon Lessor's transferee assuming Lessor's obligations hereunder no further liability or obligation shall thereafter accrue against Lessor hereunder Lessor shall give Lessee written notice of its intent to make an assignment or transfer of this Lease and a copy of the express (written) assumption agreement between Lessor and assignee or transferor Article 24. Subordination to Mortgage This Lease shall be and is hereby made subordinate to any mortgage or deeds of trust of Lessor which may now or hereafter encumber the Leased Premises and to all renewals, modifications, consolidations, replacements and extensions thereof This clause shall be self - operative and no further instrument of subordination need be required by any mortgagee This clause shall be for the benefit of any mortgagee In confirmation of such subordination, however, Lessee shall, at Lessor's request, execute promptly any appropriate certificate, subordination agreement or instrument that Lessor may request. Lessee hereby constitutes and appoints Lessor the Lessee's attorney -in- fact to execute any such certificate, subordination agreement or instrument for and on behalf of Lessee Notwithstanding the fact that this Lease is and shall be subordinate as provided above, Lessee will as a result of the enforcement of the default or foreclosure provisions of such mortgage or deed of trust, including conveyance by deed in lieu of foreclosure, automatically become the Lessee of the person or party succeeding to the interest of Lessor without change in the terms or other provisions of this Lease and Lessee agrees to attorn to such party; provided, however, that such mortgagee or successor in interest shall not (i) be bound by any amendment or modification to this Lease made without the written consent of such mortgagee or such successor in interest; (ii) be liable for any previous act or omission by Lessor under this Lease, or (iii) be subject to any offset which shall theretofore have accrued to Lessee against Lessor Lessee further agrees, upon demand, to execute such nondisturbance and attornment agreements as any such mortgagee or successor shall request. The provisions of this Article shall not alter or otherwise affect or modify the option to purchase granted by Articles 17 and 18 of this Lease nor shall the provisions of this Article operate to increase or otherwise alter the purchase price to be paid by Lessee upon exercise of the option in accordance with the provisions of Articles 17 and 18 Article 25. Estoppel Certificate At Lessor's request, Lessee will execute either an estoppel certificate addressed to Lessor's mortgagee or any prospective successor of Lessor, or a third -party agreement among Lessor, Lessee and said mortgagee or successor, certifying to such facts (if true) regarding the status and terms of this Lease as may be requested, and agreeing to such notice provisions and other matters as such mortgagee or successor may reasonably require in connection with Lessor's financing or the conveyance of the Leased Premises. Article 26. Notices All notices, demands or communications of any kind which may be required or desired to be served, given or made by Lessee upon or to Lessor, under the terms of or in connection with this Lease, shall be sufficiently served, given or made (as an alternative to personal service upon Lessor) if such notice, demand or communication is sent by certified United States mail, addressed to PEDCO Foundation Inc c/o President of PEDCO Foundation Inc. 301 N Main St. Pueblo, CO 81003 (or to such other person or address as may hereafter from time to time be designated for this purpose by Lessor to Lessee in writing) All notices, demands or communications of any kind which may be required or desired to be served, given or made by Lessor upon or to Lessee, under the terms of or in connection with this Lease, shall be sufficiently served, given or made (as an alternative to personal service upon Lessee) if such notice, demand or communication is sent by certified United States Mail, addressed to Doss Aviation, Inc. 3320 Carefree Circle West Colorado Springs, CO 80917 (or to such other person or address as may hereafter from time to time be designated for this purpose by Lessee to Lessor in writing) Article 27. Environmental Provisions 27 01 For the purpose of this Lease, "Hazardous Materials" means any hazardous or toxic substance, material or waste which is or become regulated by any local government authority, the State of Colorado or the United States government and shall include, but not be limited to (1) substances defined as "hazardous waste," "restricted hazardous waste," "hazardous substance" or "hazardous material" under any applicable federal, state or local law or regulation ( "Environmental Regulations "), (2) asbestos - containing materials, (3) PCBs, (4) petroleum or petroleum based products, and (5) lead 27 02 Lessee will comply with Environmental Regulations that are applicable to the Lessee and its use of the Leased Premises. No activity shall be undertaken by the Lessee, its employees, agents, licensees, invitees, contractors or subcontractors, on all or any portion of the Leased Premises which would cause or permit: (i) the presence, use, generation, release, discharge, storage or disposal of any Hazardous Material in, on, under, about, or from the Leased Premises or any part thereof in violation of any Environmental Regulations, (ii) any portion of the Leased Premises to become a hazardous waste treatment, storage or disposal facility without receiving proper governmental authorization, and in compliance with all Environmental Regulations, or (iii) the discharge of pollutants or effluents into any water source or system, or the discharge into the air of any emissions without receiving proper governmental authorization, and in compliance with all Environmental Regulations, including, without limitation, the Federal Water Pollution Control Act, U S C Section 1251 et seg. and the Clean Air Act, 42 U S C Section 7401 et seg. 27 03 Lessee agrees to defend, indemnify and forever hold harmless the Leased Premises, City and Lessor, and their respective agents, successors, and assigns, as their interest may appear, from all claims, losses, damages, penalties, expenses and costs, including, but not limited to, attorneys' fees, remedial, and cleanup costs, incurred by reason of the use, storage, generation, release, discharge, maintenance, disposal, or removal of Hazardous Materials in, on, under, about, or from the Leased Premises, or any part thereof, by Lessee, its employees, agents, licensees, invitees, contractors and subcontractors. The provisions of Article 27 shall expressly survive the expiration of the Term or other termination of this Lease. Article 28. Miscellaneous Provisions 28 01 Colorado Law This Lease shall be governed by the laws of the State of Colorado and shall be construed in accordance therewith without reference to such State's choice of law and /or conflict of law principles 28 02 Writinq for Waiver or Modification No provision of this Lease may be waived or modified except by an agreement in writing signed by the waiving party A waiver of any term or provision shall not be construed as a waiver of any other term or provision Any waiver or modification by Lessor must be first approved in writing by the City of Pueblo 28 03 Bindinq Effect. This Lease sets forth the entire and complete understanding and agreement of the parties hereto Lessee acknowledges and agrees that it has not relied upon any statements, representations, agreements or warranties of Lessor except such as are expressed herein This Lease shall be binding on the parties, their successors and approved assigns. 28 04 Construction Throughout this Lease, the singular shall include the plural, the plural shall include the singular; and the masculine and neuter shall include the feminine, wherever the context so requires 28 05 Text to Control. The headings of sections are included solely for convenience of reference If any conflict between any heading and the text of this Lease exists, the text shall control 28 06 Severabilitv If any provisions of this Lease is declared by any court of competent jurisdiction to be invalid for any reason, such invalidity shall not effect the remaining provisions. On the contrary, such remaining provisions shall be fully severable, and this Lease shall be construed and enforced as if such invalid provisions had never been inserted in the Lease 28 07 Venue and Jury Trial. Lessor and Lessee agree that the venue for all actions or causes of action relating to this Lease or the Leased Premises shall be in Pueblo County, Colorado All such actions shall be filed in the District Court, County of Pueblo, State of Colorado and Lessor and Lessee submit to the jurisdiction of that Court. To the extent allowed by law, each party waives its right to a jury trial 28 08 Lessee's Warranties The persons signing this Lease on behalf of Lessee represent and warrant that such parties and Lessee have the requisite power and authority to enter into, execute and deliver this Lease and that this Lease is a valid and legally binding obligation of Lessee enforceable against Lessee in accordance with its terms 28 09 Time of Essence Time shall be of the essence as to the performance of all terms, conditions and obligations under this Lease. 28 10 Third Parties. The provisions of this Lease are and will be for the benefit of Lessor, Lessee and the City of Pueblo only and not for the benefit of any third party, except the City of Pueblo, and accordingly, no third party, except the City of Pueblo shall have any right or remedy hereunder or the right to enforce any provision of this Lease 28 11 Brokerage Commission Lessor and Lessee each represent to the other that they have not entered into any agreement or incurred any obligation in connection with this Lease transaction which might result in the obligation to pay a brokerage commission to any brother Each party shall indemnify and hold the other party harmless from and against any claim or demand by any broker or other person for bringing about this Lease who claims to have dealt with such indemnifying party, including all expenses incurred in defending any such claim or demand (including reasonable attorney's fees) 28 12 Representatives Lessee designates Frank G Hunter as its representative with authority to act for and on behalf of Lessee Lessor designates James E Spaccamonti its representative with authority to act for and on behalf of Lessor Either party may, by written instrument given to the other party pursuant to Article 26, change such party's designated representative. IN WITNESS WHEREOF, Lessor and Lessee, by their duly authorized representatives, have executed this Lease on the day and year first above written PEDCO Foundation, Inc. DOSS Aviation, Inc. a STATE OF COLORADO ) ss COUNTY OF PUEBLO ) The foregoing instrument was acknowledged before me this day of , 2006 by James Dudley as Chairman of PEDCO Foundation, a Colorado nonprofit corporation Witness my hand and official seal. My commission expires. 2/14/07 [SEAL] C No�.Pdblic STATE OF C01 Ann ) ) ss COUNTY OF PUEBLO ) The foregoing instrument was acknowledged before me this day of , 2006 by Frank G. Hunter as President of Doss Aviation Inc., a Texas corporation Witness my hand and official seal My commission expires 2/14/07 [SEAL] m � EXHIBIT "A" AGREEMENT BETWEEN CITY OF PUEBLO AND DOSS AVIATION, INC PROMISSORY NOTE US $8,730,000 00 Pueblo, Colorado May 22, 2006 FOR VALUE RECEIVED, the undersigned, PEDCO Foundation, Inc., a Colorado nonprofit corporation, 301 N Main Street, Pueblo, Colorado, 81003 (Borrower), promises to pay to the City of Pueblo, a municipal corporation, 1 City Hall Place, Pueblo, Colorado, 81003, or order (Note Holder) the principal sum of $8,730,000 00 U S Dollars, with interest on the unpaid principal balance from date hereof, until paid, at the rate of three percent (3 %) per annum. Principal and interest shall be payable at 1 City Hall Place, Pueblo, Colorado, 81003, Attention. Director of Finance, or such other place as Note Holder may designate, in one hundred thirty-two (132) consecutive monthly payments of $77,730 00 on the first day of each month hereafter, commencing January 1, 2007 Such monthly payments of principal and interest shall continue until the entire indebtedness evidenced by this Note is fully paid, provided, if not sooner paid or accelerated as herein provided, the entire principal amount outstanding and accrued interest thereon, shall be due and payable on January 1, 2018 Payments received for application to this Note shall be applied first to the payment of accrued interest and the balance applied in reduction of the principal amount hereof. Borrower agrees to pay and Note Holder shall be entitled to collect all reasonable costs and expense of collection, including but not limited to attorney fees. If any payment required by this Note is not paid when due, the entire principal amount outstanding and accrued interest thereon shall at once become due and payable at the option of Note Holder without notice, notice being hereby expressly waived. Borrower may prepay the principal amount outstanding under this Note, in whole or in part, at any time without penalty Presentment, notice of dishonor, and protest are hereby waived by Borrower and all other makers, sureties, guarantors and endorsers hereof This Note shall be the point and several obligation of Borrower and all other makers, sureties, guarantors and endorsers, and their respective heirs, personal representatives, successors and assigns. Borrower agrees to remain and continue to be bound for the payment of the principal, interest and other sums provided for by the terms of this Note notwithstanding any assignment of this Note by Note Holder, any extension or extensions of the time of or for the payment of said principal, interest or other sums due and payable hereunder, or any change or changes in the amount or amounts to be paid under and by virtue of the obligation to pay provided for in this Note, or any change or changes by way of release or surrender of any collateral held as security for the payment of this Note, or any change or changes by way of release of, agreement not to sue or suspension of rights against any other person. Borrower hereby waives all and every kind of notice of such assignment, extension or extensions, change or changes, release, surrender, agreement and suspension and agrees that the same may be made without the joinder or approval of Borrower No delay or omission on the part of Note Holder in exercising any right hereunder or under the Deed of Trust shall operate as a waiver of such right. Any notice to Borrower provided for in this Note shall be in writing and shall be given and be effective upon (1) delivery to Borrower or (2) mailing such notice by certified mail, addressed to Borrower at Borrower's address stated in the first paragraph of this Note, or to such other address as Borrower may designate by notice to Note Holder Any notice to Note Holder shall be in writing and shall be given and be effective upon (1) delivery to Note Holder or (2) by mailing such notice by certified mail, to Note Holder at the address stated in the first paragraph of this Note, to such other address as Note Holder may designate by notice to Borrower The indebtedness evidenced by this Note is secured by a Deed of Trust of even date and until released said Deed of Trust contains additional rights of the Note Holder Such rights may cause acceleration of the indebtedness evidenced by this Note. Reference is made to said Deed of Trust for such additional terms. Said Deed of Trust grants rights to the real property located in the County of Pueblo, State of Colorado described in Exhibit "A" attached hereto and incorporated herein as if set out herein in full. Notwithstanding anything contained in this Note to the contrary, Borrower's obligation in respect to the indebtedness shall be limited wholly and solely to the value of the real property described in the Deed of Trust, without any right in Note Holder to any deficiency claim or judgment. This Note shall be governed by and construed in accordance with the laws of the State of Colorado, without regard to conflict of laws principles. Venue for any action under this Note shall be Pueblo County, Colorado As used herein, the singular shall include the plural. (Corporate Seal) Attest: �_ �lJ' Name: Bill C�tolev Title: Secretary PEDW Foundation, In . r By Name: T\ James Dudley Title- v Chairman EXHIBIT "A" Parcel B, Lot Line Rearrangement No 2005 -005, a vacation and replat of Lots 23 and 24, Pueblo Memorial Airport Industrial Park Subdivision, Pueblo County, State of Colorado, according to the plat thereof filed for record , 2006 at Reception No in the office of the Pueblo County Clerk and Recorder, Street Address No 1 William White Boulevard, Pueblo, Colorado, 81001 1678266 Page 1 of 2 06/05/2006 02 45P _ Chris C Munoz PuebloCtyClk &Rec TD R 11 00 D 0 00 DEED OF TRUST THIS DEED OF TRUST, Dated May 22, 2 0 0 6 between PEDCO Foundation, Inc a cor oration organized and existing under the laws o the State of Colorado the grantor herein whose address is 301 N Main Street, Pueblo, Colorado, 81003 *County of Pueblo and State of Colorado and the PUBLIC TRUSTEE of the County or City and County in which the property described below is situated, in the State of Colorado Witness: The grantor, to secure a promissory note or notes, hereinafter referred to in the singular, dated for the total principal sum of $8,730,000 0 0 dollars payable to the order of City of Pueblo, a municipal corporation the beneficiary herein whose address is 1 City Hall Place, Pueblo, Colorado, 81003 after the date thereof, with interest thereon from the date thereof at the rate of three (3) percent per annum principal and interest payable in 132 consecutive monthly installments of $77,730 00 does hereby grant and convey unto said Public Trustee the f0flM0gKb0XkW property situate in the County of Pueblo State of Colorado >lbozkx described in Exhibit "A" attached hereto and incorporated herein as if set forth herein in full The Deed of Trust also secures Grantor's performance under that certain Agreement dated May 22, 2006 between Grantor and Beneficiary Any default in the Agreement by Grantor shall be deemed to be a default under the Promissory Note and give rise to all rights and remedies of Beneficiary hereunder also known by street and number as: No 1 William White Boulevard, Pueblo, CO 81001 assessor's schedule or parcel number TO HAVE AND TO HOLD the same together with all appurtenances, in trust nevertheless, that in case of default in the payment of said note or any part thereof or interest thereon, or in the performance of any covenants hereinafter set forth, then upon the beneficiary (note holder) filing notice of election and demand for sale, said Public Trustee after advertising notice of said sale weekly, for not less than four weeks, in some newspaper of general circulation in said county, shall sell said property in the manner provided by law in effect at the time of filing said notice and demand, at public auction for cash, at any proper place designated in the notice of sale. Out of the proceeds of said sale said Trustee shall retain or pay first all fees, charges and costs and all moneys advanced for taxes, insurance and assessments, or on any prior encumbrance, with interest thereon, and pay the principal and interest due on said note, rendering the overplus (if any) unto the grantor and after the expiration of the time of redemption, said Trustee shall execute and deliver to the purchaser a deed to the property sold. The beneficiary may purchase said property or any part thereof at such sale. The grantor covenants that at the time of delivery of these presents, he is seized of said property in fee simple, and that said property is free of encumbrances, except easements, rights of way, conditions, restrictions and covenants of record The grantor also covenants that he will keep all buildings insured with a company approved by the beneficiary for fire and extended coverage in an amount equal to the unpaid balance of said note with loss payable to the beneficiary, will deliver a copy of the policy to the beneficiary and will pay all taxes and assessments against said property and amounts due on prior encumbrances. If grantor shall fail to pay insurance premiums, taxes or amounts due on prior encumbrance, the beneficiary ma pay the same and all amounts shall become additional indebtedness due hereunder and in case of foreclosure, he will pay an attorney s fee of a reasonab amount Should the beneficiary hereunder be made a party to any action affecting this deed of trust or the title to said property. the grantor agrees that all court costs and a reasonable attorney's fee paid by the beneficiary shall become additional indebtedness due hereunder and the grantor does hereby release and waive all claims in said property as a homestead exemption or other exemption now or hereafter provided by law. If all or any part of the property or an interest therein is sold or transferred by the grantor without beneficiary s prior written consent, excluding (a) the creation of a lien or encumbrance subordinate to this Deed of Trust, (b) the creation of a purchase money security interest for household appliances, (c) a transfer by devise, descent or by operation of law upon the death of a joint tenant or (d) the grant of any leasehold interest of three years or less not containing an option to purchase, beneficiary may, at beneficiary s option, declare all the sums secured by this Deed of Trust to be immediately due and payable. Beneficiary shall have waived such option to accelerate if, prior to the sale or transfer, beneficiary and the person to whom the property is to be sold or transferred reach agreement in writing that the credit of such person is satisfactory to beneficiary and that the interest payable on the sums secured by this Deed of Trust shall he at such rate as beneficiary shall request. It is agreed that in case of default in payment of said principal or interest or a breach of any of the covenants herein, then said principal sum hereby secured and interest thereon may at the option of the beneficiary become due and payable at once, anything in said note to the contrary notwithstanding and possession of said property will thereupon be delivered to the beneficiary, and on failure to deliver such possession the beneficiary shall be entitled to a receiver for said property, who may be appointed by any court of competent jursidiction. Whenever used herein the singular number shall include the plural, the plural the singular, and the use of any gender shall be applicable to all genders. All of the covenants herein shall be binding upon the respective heirs, personal representatives, successors and assigns of the parties hereto. Executed the day and year first above written. (SEAL) ,ttest. " Secr�t{ary lame. STATE OF COLORADO Countyof Pueblo ss PEDCm Foundation. Inc. By ( ,Q,v4l �\ Titit Chairman v The foregoing instrument was acknowledged before me this 18th day of May 2006 MR by as Chairman and Bill Croley a''pf PEDCO Foundation, Inc , a Colorado nonprofit Witness my hand and official seal -• _ � _ d Notary Public �lftn � 7ris�t#�.Eitu�and, A %6m0 jt Newly Created Legal Description (§ 18 -35- 106.5, C.R.S.) No. 923C. Rev. 4 4 <. DEED OF TRUST (Public 7tustee) with Due on Sa e © Bradford Publishing, 1743 W 80202 — (303 ) 292 -2500 — 8 -98 1678296 Page 2 of 2 06/05/2006 02 45P Chris C Munoz PuebloCtyClk &Rec TD R 11 00 D 0 00 EXHIBIT "A" Parcel B, Lot Line Rearrangement No 2005 -005, a vacation and replat of Lots 23 and 24, Pueblo Memorial Airport Industrial Park Subdivision, Pueblo County, State of Colorado, according to the plat thereof filed for record 6- , 2006 at Reception No 16 7 ;9 ;� ?C1 in the office of the Pueblo County Clerk and Recorder, Street Address No I William White Boulevard, Pueblo, Colorado, 81001 also known b street and imthber as 1 William Whrie= Boulevard, Auelilo, Coiomd assessor's schedule or parcel number: 425004037 - W-63 1894441 TD 12/23/2011 11:19:24 AM Page: 2 of 15 R 81.00 D 0.00 T 81.00 F 61 art Ortiz Clerk /Recorder, Pueblo County, Cc II! FANAII&W. 1�4C(�� 4Ct �l 114 11111 TD TIAVE AND TO 146ib the same, to ethbi with all and sin lar the nv11e es and g bn?. P.,.. n u attt✓es file P D rettAto bblongltig, in trust ti et theless, that: a) in case of default liv •Grantor of theblgatlons under the lgrocnnent or'irr flee payanc�tit of any interest thereon according to the tenor aiic�- ffect of said Agieeinent, or, to the l aynient of agy prior encum rances; principal or ,_.._. inter st; if any, subject to any applicable cure provision in the At,�rebment or b) in case default shape made or violation 'or breach of any'of the terms conditions, covenants or agreements I<rerein econtained, file beneficiary hereunder or it }t;. Iegal holder of the iridebtednu.tis secured lierel3y may 4eclarc: a vio}ation :of any of the' covenants herein contained 'and may elect to iidvertise seat3 pl'bpbrty for sale, and demand such sale by filing a rioilce of election aiid demand fix sa wvltli the Public Trustee Upon receipt of such notice of election and demand forsale, the: Public `l'ruste sha31 cause such notice to be recorded: iri:tlie recorder's office ofa}ie cciutty in whk said pioptrrty is situated L . The I'ublie4 Trustee. shall then give puhl ( notice .of t`tie: time and place of -sale by dvertiselnotiti. to be }iiibtished for ftur weeks (once eatli week for fire .successive weeks) iii some newspaper of geneiai cireiilatibn at that time published in the county or counties in which:. said property. is lt�cated A copy of stack ilotice: shall be tnai}ed to all persons entitled to receive. . rlotice as provided by 1aw. It shall and luny theft be awfiil for the Public 1'n�stee to sell said property for lii g : the }lcst and best pri ce the'propel`ty will bring In cas}i artd to dispose of the said ro ere arate ar c els,. as ;the s aid I?ubliC Trustee may think best); together P..:.p y ( en masse or i n Se p .... p Wit W te. right, title and interest of'the Grantor therein, at pul llc auction at any place as maybe; specified by statute aiid designated 1i tI 6tice of sate: The Public Trustee' shall make' and give to the purchaser of such property at such sale, .a peffificate of.purehase. As required b law Unless t}it property -is cicemctl, t pil is trustee. shall execute: and `rcccird a Wnfirtr a #ion clued io:the holder of the ceru.fi of purchase iio less tilall 'fi Coen days after the date of siile or, if later, the expiration o „i alt redcinption periods and the reC ipt tifall statutory fecs,.and ensts The Public . Trustee shall, 'out o f the; proceeds of stick sale:.an4 -aft or .first :paying and. . retailiiitg ill fees, charges acid .costs of k said sale, pay to the Yienef ciary hereunder or to any of "the benefici'ary's rights under the Agrodment Any amounts d iie pursuant to. the' bbligtrtions under the Agreement; and all' moneys advanced `by such beneficiary for iilst ranee;. taXeS ant aSSessrnents with interest thereon at eight per celi't pel` annum rendering the overplu5, if any, 11rtto those persons. entitled thereto as a.: matter': of law. Said sale a s evidenced by the: coiifirniation deed_ execti #e.. and recorded liy the t'ubtic Trustee shall operate as a perpetual bar; Both in.law and equity, against the Granter and all other persons claiming the said. property, or any prirf'thereo 1, liy; from; throubh qr under the Grantor. The ity of Pueblo or its assignee may purchase.said property or any part thereof; and it shall not be obligatory upon the purchaser at. q ny such sale to see to the application of the purchase money. The Orrantor covenants with and warrants to "the Public Trustm, that at the time of the enstalin :of and delivery of these presents the Grantor is well seized of the said lands, tenements artd property in fee simple; and. has good right, full power and lawful authority to grain, bargiiin,. sell and convey, the same in the manner and form as aforesaid; herby filly and absolutely waiving and releasing all rights and claims the Grantor lnay have in or to said lands, tenements, . and property as �IOmestddd Ekernption, or other exemption, wider and by Artuc.pf any act of • DL1- 63$7104x5 189444 1 TD 12/23/2011 11:19:24 AM Page: of 15 R 00 81. D 0.00 T 81.00 Gilbert Ortiz Clark/Recorder, Pueblo County, Cc WA FAINAWKY&W WWOWN WIN 11111 ' e Gentza4 A s e'M yof the State of Colorado of of tbe*Vnitbd St ales Co ngress, now existing of s - d at t c same be phis oli � �jtl tfflon I crcto� till same fire free and clear of all liens Whf* b In he : . .q . ..... ay d­6 s �bk le. date erix e tired en'iftbro'n., what d ti h A c 'iftnients . conditions, retirlOtionis, tovennritg-and reservations of record.: The 7 7 in ' t , t th p ubl ic 1r:.-­i th of Grantor 6f warra o e u ic rus w ic quid and peaceabl possession too Y a Ell 11.8; all am I y cWi i14 or any part thereof; thereof; and that 9 - y W 1 :9� .3 - 6ndihefi I' said w forever def C it e to §ai" property against su persom person8, iTrifil Full tidl t s an messm Tor shall Oil. y*pay a axe d "ients ' I m­ anee the Gran p 4fid a ll amt .#lo� prb 'orty;" aby if; a itbts. on atootint o, princip nd ixi(erest or ot or sums: on any n y"', an W** - ill keep A1.1 improvements. ',ifta may y Dd Oil sa id t ii 0 pinst any' cas'u'alty" loss, including ditehded covie'ragri r conipanic. 8: 4, in. A company meeting the. on ci b of! �'a h in an amount ic wil I ��qtlircnients ry b t 41 1 yield ne t.: Wo eb of the bolder of ' , Wdrioss after reduction less flia n educ ion b -insurance pro the policy, i any, lio y m j ebte policy loss' payahle clau nauj jig rile he thip s ; * shall c a i 144,.-Ifid dnes' 9 1 vendf i gry - as. . 1hortga . And $half fUrther provide tbi'i fisUri M%* t b * ce may no q canceled up �� � A— a *e ' ra t6r i to insure and deliver 'leis an teftidys wrif en n6fide to e fi ary. ShoUl' 'th''Gin f� 0 a mfificate 6id - cing the req uired coverag 'd - 11'' - 1 - taxes or assessniebt§ as on 1 V tin dr.'pippo icies or o the -s W! due. 'or to pay A amounts p any, the gene ame. p upori'seni encumbrances. i f sij6h'i6suranc and' all nionleg so P idi a' ey 'm a pyems or prOCUTC•any mayi Rke any u� With. Mere S thereon at M6 rate , of eig ht ce nt per annum shall added to and.. b6conilp a part �9 per - Trdst�pd may.. epal.,, pi;. the 0. in d ne if notpdid by scOttretl this De6d oi t of of the pal " th Gr antor. d t y b raht . In a -a its option, the beneficiary may declare .th indebtedness stcumd* hereby And this Deed of. Trust -to be.. in default The f4ilure to. procurainsur n a.rice or make . 0 6 6 efits femilf Y is para8p. pn. 1f till nr.t3ny part of the O-P . I., terest therein .is sold. or transferred.by the Grantor without be' e'Ac crea o n ry's prior on consent. excluding ton a lien. or encumbrance stilsortliittife 'to tbis Deed Ti;d' st ) t , h h m on ey SCC interest fbr ho o. cr eation 9 .4 pUrc W M-on p 'i, w : o the li1§61ibld AppliAnces, 0 ' a transfer ' devise, descent or by o 'on of la u . up nn e li 0 . joint tenant, or fa the - grant of arty l easehol d d i nicrest of Abre'e yea rs less con taining an ars.. 60."..s 61 top option toi-purchue, ben efi'ciar .1114 - beneficiary's opfibil 'do durdd by this -,y, at s furth MAP e o C; e ru immediately. Y_ uQ an ay4b! rysliall' have waived such opfion to 0 i# p p ate' r the sale o f tfan.qf6t bcnofieiar)� And trio ' ' person to whom the property is to lie sold. or krarisfcricd resell a�*3'eelnent in writing that rile p erson t 17 , to is - s satisfacto beneficiary and that the interest :payable on the sunis secured by this Deed of Trust shall be at such rate as beneficiary'sliall request: TN CASE - OTC' ANY DEFAULT whereby the-right of foreclosure occurs hereunder, the holder of said certificate of 'purchase shall at once becoriie - entitled to the possession, use and enjoyment of the property aforesaid.. to the Tents, issue.-, and profits thereof, :from the accruing of such right 4P 'd during during the pendency of foreclosure - proceedings and the period of redenip 6 .;on if any. S oeb posses ­ ion..sha once be delivered to the. holder o,. said certi.fi cote -of il at f purchase-.on request, Upon refusal, delivery cif such S ma .posses ]on be. by the holder of ... - said certificate of purdiase 'by any Appropriate civil suit o.r.procep The holder of said certificate of purcha'so shall be en Wadi to a Receiver for said. property, and of the rents, issues DIA-61,813045 1894441 TD 12/23/2011 11:19 :24 AM Page: 5 of 15 R 81.00 D 0.00 T 81.00 Gilbert Ortle Clerk /Reoorder, Pueblo County, Co Executed on the date first above written. DOSS AVTATIO:N1, TNC„ a Tcxas Corporation ATTEST: _..... ... ,.. _...- — - By: _ Y NZ As P resident. of Doss Aviation. The. �_.. STATE OF COLORADO ) ) ss. County of 4AA00 The foregoing instrument was acknowledged before me this 2 +�day of December, 2011, by �p� ���"•as President of Doss Aviation, Inc., and by as Secretary of Boss Aviation, Inc. Witness my hand and official seal. My commission expires....__.11.' -... • �•.•�•• -- CAROLYN PETE Notary_ Pu . o _. __..._ State ofK�kgr My Commission Exolres December 07, 2015 DU- 6381304vS BY- W`fMRBAS, the Cify- Couincil. Based orx PEDCO's r- fitindAdations has approved such applioatton and will rnalte funds . available to Company sulijecf to and upon the tern2s and . eondiddhi dttlii5 AgM.6 nti NOW- Tl=M% I? t , iri eonsiderafion of ihp foregoing and mutual covenants'contained': herein, and father goon Arid va�uxlsis aorta "tderafion, Bie`re eipt and su# iciency of w}iich..is. hereby ac]criowledged, City and Company agree as follows: 1. The fvllowir4 tenris as used in this Agreement shall have :the following - meaning nnless the. context clearly indicates of ciMso: "AccCSS Poiinit means the'. Acces Perii}it`aCtaehei;♦ Hereto as Exhibit "A." "W*npnt Comi; itment Dote" means- ApriFl: 2408_. "' acility" means the approdmately 173,510 square foot building located on the Property .( fhree. (3) hangars of approximately 19' 0fl square feet each ``Hangs V to be constructed. on the Property ivlioiein Cgr4par ywill conduct its busiziess operations. `Full - Ime Employee. means a person who actually performs work at the Facility for not less than ' tliiriy =twti (32) hours per week at a' average annual salary of not less than $44,000.00 par year pies �ienefits ; whether employed by Company or by an outside on . acting as an agency to provide.. FuI1� Th Time Employees for Company. e term "Full -Time Employee" does. not include independent contractors or subcontractors or their employees, such as food, cleaning or janitoriO services employees, nor officers or shareholders of Company, Since the fours of employment for flight .pilot instructors may vary depending on flight training activities, Full - Time Employees can include full -time equivalent employees computed on thirty -two (32) hours psi week for flight pilot instructors up to twenty percent (20 %) of the total number. of Full - Time Employees actually employed by Company. "Lease ' .means an enforceable .long -term lease of the Property between Company, as 1894441 To 12/23/2011 11:19:24 AM Page: 9 of 15 R 81.00 D 0. 00 T B1.00 Gi art Ortiz Clerk/R000rder, Pueblo County, Co EPA M c at hessor for a ferni no ess thgn 0 evpp Ara. yq ;t A*n$ t 2065-005 'ordi _46 1 )p6:_ . Lifte Rd ? " pr o p 6: to e re corded it 'thdre"' df fi in lh6'tec oxOs - of the Pueblo County Clerk and Recorder, street adOqss: No. .1 Willi am White Boul6vard,.Pueblo, CQl44dP. calendar months commencing anuary. Qlwtef�-. 084s three dotsecutiv& c Pril 1, July, 00i ca.en Ar , mp means th6ttffo the aggregate inlitiiber - Y on day 6f - a Quarter, dlyided. by the number of.business days in such Q11wer. z csty will :adva to for the benefit" of Company 14nds in an amount not 0 6 . 'boed 000.00 (t4 ` City . ' Funds - subject to d k $2,420 an -co rigen - up rollowil* ogre conditions covenantsWhich Company es to perform and comply with, C o mpany l. Shol Lide MY 60 n f e k "P B ffie hstructio o, the Hang ars th . ebfli6e of t -the f 6 h6tii - deri , ids dt tow4i (b h y cop Company all file 'in 'Cbmpan?s certificate - ' or' o ther &nce of authority to transact business In aid - State of evi - ' 'd b iffid t6lorad6 6 Sta Colorado: *ISSUC de, (fi) certified copy of the resolution Agr of n of the y ;g6*6tr6ig. board * Company kdocis t . and . y. -approving this� Agee =6nt, Lease and authoin g, . its officers to execute deliver this -Agreement, Lease and Access Agreement in the name of t . f the Acc .- onlpag' a copy 0 C y; (iii) - cx��ctiid c6* Leas Vian ex ecut e d py o the e, 09 ex Th e date the l ast to - c ir of the filizigs under I (iii),: an (iy) of i - Agreetnent.. 1, 1 quired und (i thil s - 2( d 46 bex . tin as 69001 If Clog* d or am9tv 0) ihill. �be gn - in Ods hot Occur on g 9, -woft'July I,. -2006,or-such-Uterdate as Cornpanyarld.,City sba1J-mutua.JJy.*oe,- City, -adtS.Spip pti6n, m ay 0 : , '­ O: . b hAtd this g6deineht and Cxft� A and Company shall thereafter be released and he reun d er: rn ll'obligations iercup dri - 1 6 ) As coridi#ions pretedent to d16urs'ement of payment: of City. Funds: Clerk th d - urn Co k4y iha file (iywithlb6 City e, 6 c e pired y (b)'a, a and (U) with City Director of Fiba tten rqqu for tmvment certified to be truer an b correct y ap . officer Of C ! *0 al its representative th9t'the' amounts included in the request for, p yment mp V O� #3 not been inicluded in any or request for paym'on't and are for the aetual cost. of - Han identifying the construction _k. for wbi6h payment is sought.. constructing the 9= , w or k. including certificates of the architect ' an - d contractor that the construction work for which payment sought has been completed. All City Funds - received by Company shall be deposited in a separate account and held in trust by Company for the sole and only purpose of paying for construction of the Hangers, 3. Qbmpany acknowledg6s and agrees that the primary purpose of City in entering into - this Agrderntnt and the sold benefit to the City for mWng.City Funds available to Company hereunder is t1w creation of jobs, lhere&Tc, Company represeiits, covenants, and agrees that it 1894441 TD 12/23/2011 11:19:24 AM Page: 10 of 15 R 81.00 D 0.00 T 81.00 G1 ert Ortiz Clerk /Recorder, Pueblo County, Cc III K FAINNY MA lM W1 RIVAL 114 11 1111 n1] after Cominencelnent :3ate of the. ] pease coutm�uQUSIy conduct Its itiusingss operations and employ Full; Tame" Etri 10 aes - : at 'the Facilit as followm. 1 during the eriod from. P Y Y O. g P z, cortubencenlent Date of the Lease to the Employment Corninitment bate, Company shall use its best efforts in good faith to employ as many Full- 'Time gnvployees as reasnn$bly justified by its bil operations, and iii) on and after the Employment .Commitment Date, Company shall employ . not less than, one hundred twenty -one (12I) Full -Time. Employees at the.Facility (the "E ,ployment (}OtIUIl "). otwithstatidln any th ing - corifained iri !his 4 8 y h la Agre ement to tote contrary, i Company shall for an efa y reason dult in its Employment Commitment set fortU rag in Paaph 3, Ctiriitiany shag! repay to., City a..pro�tata share, of the-City Funds advanced, by City under Paragrsph Z hereof based upon the number of Full - Time Employees emp]oyed by Company 'at die F�aciIity (the "Repayment Obligation', a follows; (l) putilig t1C severs . (7) year period'starting on f>emp]oymenf Commitment Date -and ending eigbty=four (84). months thereafter (6e "Repayment Period'% Company shall pay-to City an amount each Quarter eq.a.l to the Quarterly Employees less than one hundred tvtvlity -one (121) Full -Tune Employees employed at, the - Facilit y by Company multiplied by f 29 (the "Conipany`s Qu arterly Payments" ). For.example,I for the second Quarter of the thud year after fhe 1mployment Comnutment Date sugl? Qu2irtterly Enrlplgyees is 1 00, the amount pa.y . e by Company id City on ox before the fifteenth (15th) day of the. next calendar month would be (12:1., 100) x (b)' Campaiy}r's Quarterly Payments; if any, shall° 6e paid to the. City without notice; demand, deduction or setoff on or before the fifteenth (156) day of t e month after the e of each.Quartar durin :.,. g the repayment Period.and: for 'one. month. thereaftert.'the office of : the Director of Finance of Ci , 1 City Hall Place Pueblo, Colorado, or such other person oir ]ocatir�n as the' City miry :tlesignate= . All past k Campariy s Qiiarterly`Payments "shall be.' " *tgost• at tha`rate of eight (8) percent per annum (" pefault Rate. �. until paid.;. . (c} Within :fifteen (15) days after fhe _ end of each Quarter after the Bmploymezit. Commitment Date and for one calendar mouth after the Repayment :Period, Company will suliinif to City's Director of Finance Company's statements showing the Quarterly Lliipioyees and their aggregate salaries for the prece0ing Quarter and the. basis upon which Quarterly Employees and Company's Quartei]y Payment, if any, were computed certified by an officer of the Company to be true and correct. For purposes of verifying such employment, City shall have access to Company's records relating to Company's employees employed at the Facility. Except in the-event of any action filed by Ci io enforce this Agreement, City shall treat spch'information as confidential and shall not disclose (except pursuant to a subpoena or court. order) such information to any party other than those City employees who have a need to know such information. (d) Notwithstanding anything herein to the contrary, if Company defaults in 3 1894441 TD 12/23/2011 11:19:24 AM Page: 11 of 15 R 81.00 D 0.00 T 81.00 Gi lb e rt d 411 Pue Co IW Iii H 11111 b t s ihc. performance of any matenal 'covenant or obligation under the lease, .the Access Permit, or lltis Agreement including, without 2irri tation,� its Repaymer t'Obligation or its .$mployment . tornmitinent, and such default: is not cured within? sixty (6.0) days after written notice specifying the defsul. is given by City to Company, then in such event, City may declare the entire balance iofChiiipaiiy's Repayment Obligation. due and owing;together with interest thereon from the date of iefault at the Default Rate, and fo ° such rise, the entire balance of'C -om :an s Rc a PmP p Y ' P Yrnent • 01igahari:'ehgh be an amount equal to..I.21 times $714,29 multiplied. by the remaining Quarters,. of #. Repayment Pcriod plus. the: amount of Company's .unpaid Quarterly Payments, if any: Company' Repayirient Obligation is absolute . and unconditional and snail not be abated, iiioad, i%}niizished; modified; withheld or otherwise 9ffset for any cause or :reason whatsoever. i)., Bxcopt at; otherwise provided in Paragraphs '7' acid 13' Hereof, (;try's darns es'for breac�i of Cora ariy's'�. to :„ g p mp. yinent Commitment & . epayment Obligation shall " ek- Wed $2; 10,000.00 plus. inteiest,:provided; however, that the $2,420,000.00 . - shall be reduced $86;42Y.09 fqr each Quarter.C6- 'any meets its. Repayment 9bligaV..on during the Repayment Peiiod by" either (i) employing one hundred twentx -one - (12X) Quarterly at the Facility; or (n paying CQinpany's Quarter Payments as provided in Paragraph. 4(a) above fo suc] Qua3rter: , All. dt Puncls advanced to Company b Ci tinder` this A am S: ty . P Y Y tY' 8T e ent shall .be. dfmod to be a debt of Company. payable to. City until' Company performs. and disc]larges its obligations b.crednder including its Repayment Obligation coptaiiied in Paragraph 4.. 1?nor, tit 'instituting any proeeeahig to enforce Company's Repayment Obligation cinder Paragraph 4, City shall notify Company'in.writing oif its intention to institute such proceedtngs...COmpiy maY:requeat'reliel' lxom'its.i7epayment (Jbiigatioli.by delivering to City within thirty. 00) days after date of City's notice, Company's written request for relief sped g the.gr.pp s upon, which such relief is sought together with documents supporting said. groilnds �Tit]iin� ninety (90) days after receipt of Company's request, qity will spbedule a meeting =with the Ci ty Council at which Y m Com an a p pear. City will notify Company of the p Y PP time ifid place of the meeting tit Ieast ton (10) days before the i eeting: Failure of C6mpany'to timely A ver its complete written request for relief or to appear at the scheduled meeting with. fhe:City Council steel] entitle City to immediately institute proceedings to. enforce Company's Repayment Obligation. (b) City Council may or may not, in its sole and absolute discretion, relieve Company, in whole or in part, from Company's Repayment Obligation. Ariy'action taken by the City Council relating to a request for relief shall be final and binding on Company, and not subject to judicial review. Any such action by City Council is, and shall constitute, a legislative measure. Notliing contained iii this Paragraph 6 shall grant or be construed to grant to Company any righ or claim to relief from its.Repayment Obligation or hearing with respect thereto. (c) No delay by the City in scheduling a meeting; or failure by City to 4 1894441 TD 12/23/2011 11:19:24 AM Pa 12 of 18 R 81.00 D 0.00 T 81.00 Gilbert Ortiz Clerk /Recorder, Pueblo County, Cc Ill 1 PAMMI %461 KHM I h 11111 `.axercise its fight enforoe thus Agreement, including Company's Repayment Cbligatlon, and no partial :orslraglc "exgrcise ofthat right, shall.coistitute a waiver of that right. In the event of any litigation arising "under this Agreement; the .court shad award to mild the prevailutg .party shall recover its costs together with all internal and out - of- pocket'• exptris s. Hof any kind. relating to. the litigation including, but,not limitgd" to, reasonable attorney. fern; Y hue. for such'littgat on.6b6l be Pueblo County, Colorado. All such lid "on' shall be filed 1n the District :Court, County or Pueblo, State of Colorado and each party"aubmyta to the aunsdiction lofsuch District Court: To the extent allowed bylaw, each party waives its right to a J, and 8: This Agreement expresses' °the entire understanding of the parties 'and supersedes and. alirjo " ates en ' slid" all ' prior deallrl s and corivzutmenfs, whether "bi al or writtelt, with respect xo fhe subject matter of thus Agreement and may not b.e.;amended or modifaed exaept'in writng S1 a" lay City - and Company. waiver of any provision of this Agreement must be in writutg -. , and signed. by._ lie V, ose .lI is are "bein waived. No waiver o . arl 'b eac of any:. p 3'... > .. S f Y. r . Y provision hereof shall be or be deemed to boa waiver of any precedia a 'illbsequent breach of thty some or any other provision of this Agreement. T}ie failure of either party to enforce or seek enforpeimant of the terms of this Agreement 66b ring any breach, shall not be construed as a: waiver of such Breach. p, Mus' Agreemenrt shall be construed tt� it ';' ' ante with and be govem$d by the WSW* State of Gtolomdo , ); h ut regardto conflict oflaw principles.. T0: " Any no ises here nder shall .be sufficiently given if given in writing personally or rnalled,b first class, registered, a * r certified mail postage prepaid, addressed: to 'City, qty Manager, city of Pueblo, 1 City . Hall Place, Pueblo, C oi'orado; $1003, with copy to Thomas E. _agger, Clty Attoiney,'127 Thatcher Builclin , 503 N Maim Street, Pueblo, Colorado; 8 "1003, or if :.to. e;.:Company pos$ Aviation,. Inc:, .3320 Carefree .C..irc16 West, C Colorado, -t 17 or to such other person or address as either party shall . specify in written notice given to the other party'pursuant to the provisions of this Paragraph 10, Notice shall be effective (i) upon receipt if delivered personally, or (ii) three (3) business days after deposit ia the mails, if mailed. 11. Time is of the essence hereof, This. Agreement shall be binding upon and inure to the benefit of'theparties andtheir respective successors and assigns, provided Company may not assign" .this Agreement or any interest' herein without the express written consent of the City whidh will no:t be withheld or delayed. Any assignment or attempted assignment of this Agreement by Company without such consent shall be null and void. No assignment of S 1894441 TD 12/23/2011 11:19:24 AM Page: 13 of 15 R 81.00 D 0.00 T 81.00 e G rt Ortiz Clark/R000rder, Pueblo County, Co Bill IV, FANNIN, .10( WkIN11WIfth 11111 this Agreement or any int6rost erein b ' Company shall release or discharge 'Company fro any of'its obligations agreed this Agreaniant,unless otherwise C ity at the.1im*o'consent to y Q as signment is.-given— h 'the o of and ft'bohalf of onipany 12'. 'persons. sigo this re ng Agmement.1 _...,.V.res-dnV and warrant that and Company have the requisite . power and "authority to enter & &s Agreement call e, and And that this A greement is A valid and legall binding s y gre obl igation of U bmpany eaforceablo Against Company in accordance with its: te rmsr Cofiipany represents* and warrants that 60 person, entity, or organization has been . or jndiredty�­ any comimission�. ro hoO or wil receive or.: be paid, directly ploy.. or pereprifa, ...go,.contifigm 66 or tiny otberfetnunerati6n payment or receipt ofw1dQhU Contingent upon -a greenl. ent of this A by City or City's advancement of City - Funds , fd y City Co hefeunddr, For brooh orviolation of warratity, city Shall lf the night- to t6niiinato this Agf Tvdo thp� ful iaboilnt T ss P other. or, 0 Such b6mmi l 1 9ni p ercentage; contingent: hot, 'eration,* or to seek such other l rqmm,. 9 y avai . lAb16 to City; which.remedips.sliall be 141 -In no S ent. shall City, it offi qg6xits or enlp]6 ypqs be liable to 0ompany for , Mcluding without fjm#tion, Compensatory, p unitive, indjreqi, . special or co q damages,: o,sulti from or arising, out of or related to this Agre. e t or the performano or - 9"b'h thereof by City or tho' Or delay of City in the performance of any covenant or Provi sion under this Agreement Art to be b.'consideration of. City Conj)any hereb pity, its offipors, agent; City 6ntid info this , greer y waives an es and Vinp trorri all claimi'for any And All such damages. No breach, default, delay or failure of City unde' this Agree;fic�it shall - be, , or be construed to be, a waiver , dis r is . rge or .rel . .o Company 9 Repayment (kUptiorn under Paragraph 4 hereof with. respect to the amount of 'C ty -FullO actually ad vanced , cod or' 'd b 'Cit y van pill . ,y y to or for the benefit of Company P�10..t , . .. pant to Paragraph hereof, i6noftfii: A greement it declared b 'uft of co juri 15. . 'llf-anyproV14 S,A . em _y a co competent P to be invalid or unenforceable, such determiriation shall not affect: the other provisions. of this. Agreement which shaltremainin full force and effect. 16, Neither party shall be, or hold itself out as, agent. of the other or as joint ventures.. under this Agreement, 17..- . Each party aclaiowledges, that this Agooment was fully negotiated by thepArties and, therefore, - no provJ6 Dn of this Agreement shall be interpreted against any party because such party or its legal representative drafted such provision, 18, The provisions of this Agreement are for the exclusive benefit of the parties hereto and their successors and permitted assigns, and no third party shall be a bcneifldiary, o r 6 1 COUNT' 7 a � r AMENDMENT NO. 1 TO ACCESS PERMIT THIS AMENDMENT NO. 1 to Access Permit ( "Amendment No. V) is made and entered into this day of December, 2011, by and between the City of Pueblo, a Municipal Corporation ( "City ") and Doss Aviation, Inc., a Texas Corporation ( "Permittee "). WHEREAS, City and Permittee entered into an Access Permit dated as of May 22, 2006 (the 'Permit ") to allow certain access to the Pueblo Memorial Airport ( "Airport ") from certain Premises described as Parcel B, Lot Line Rearrangement No. 2005 -005, a vacation and replat of Lots 23 and 24, Pueblo Memorial Airport Industrial Park Subdivision, Pueblo County, Colorado (the 'Premises "); and WHEREAS, Permittee intends to exercise an option to purchase the Premises under the provisions of its Lease of the Premises dated May 26, 2006, and subsequent Lease Amendments Nos. 1 and 2 thereto (collectively, the "Lease "); and WHEREAS, the expiration or termination of the Lease would cause the automatic termination of the Permit as provided by section 4(d) thereof; and WHEREAS, Permittee intends to continue its flight screening program on the Premises and desires to maintain access to the Airport for the purposes described in the Permit; and WHEREAS, the City and Permittee are willing to amend the Permit to allow such access, subject to the terms and conditions of the Permit as hereby modified; and WHEREAS, this Amendment No. 1 constitutes a "minor amendment" to an agreement within the meaning of Section 1- 5- 2(2)(o of the Pueblo Municipal Code, as amended, under which the City Manager has authority to make minor amendments to contracts without obtaining the approval of City Council. NOW, THEREFORE, in consideration of the foregoing and the terms and conditions set forth herein, the parties agree as follows: 1. Section 4 of the Permit is amended to read as follows: 4. Term The terms of this Permit shall be ten (10) years commencing on May 22, 2006 and ending one hundred twenty (120) calendar months thereafter, unless sooner terminated as hereinafter provided ( "Term "). This Permit shall automatically terminate upon the occurrence or any one or more of the following events: (a) sixty (60) days after the expiration of the Term, (b) mutual agreement of City and Permittee, BHM-#2263384-v I -Amendment No 1 to Access Permit.DOC (c) sixty (60) days after expiration or termination for any reason of the Air Force Contract; or (d) Failure of Permittee to correct and remedy any breach of this Permit within sixty (60) days after notice of default is given to Permittee by City describing the breach, provided, however, if the breach relates to payment in lieu of taxes and fees, Airport Use, Security Fence, Guard Station and /or Access Gate, such breach shall be corrected and remedied immediately after notice is given by City to Permittee. 2. Except as expressly modified by this Amendment No. 1, the Permit shall remain in full force and effect. Except as modified by this Amendment No. 1, any obligations to be performed under the Permit by either party are not waived nor excused in any manner, but shall be performed in accordance with the terms and conditions of the Permit as it existed prior to this Amendment No. 1. IN WITNESS WHEREOF, Permittee and City have executed this Amendment No. 1 as of the date first written. above. ATTEST: 0 APPROVED AS TO FORM: City Attorney DOSS AVIATION, INC. Name: Title: 2 sixty Air Force Contract (60) days after expiration or termination for Any reason 617 thd or (d) Failure of Pcrnjitt-cc to correct and remody arty breach of thht Pehtfit wuIfiiti, (60), days after n6fli ce- of defauh is..pvam to Perthittee by City ed vlhe bmoch,o hoWivver, if - the 4tvoch Mmes topayniontAft'heo oftww =4 I!z%,Airp6rt U.qe, Security Fenee ', Gerard' 8 u Access Gaw� 'such , U , bf be ll e e4ite& W. and remedied i'm m tdaral y ago` I o ti Is : gi veh (a Croy to Permittea. Vx asexpmmly mo by this Amendment No,- I.- - the Permit: Mialtrqrnal , cept 7 , tin: in full Ibree and eMet. Except as modified by this Amendment No. 1, any obligations'lo be perfliTmed under the Permit by either party arc: not waived nor excused in any manner, bw, gh, all be performed in accordance with the terins and conditions of (lie Penuit;as it existed prior to this Affieridtisant W WTTNESS W-140JEOf. Po'rnlitteo and City,havc, extaited flils, Amendment No I. 'of"the data - A"t w.60-on. ahavq, ATTES1 City Clerk APPROVEIY AS TO FORM?" City At CITY OV IMIJIgut 10, a Municipal O)II-for'llion 13Y City Manager DOSS AVIATMX INC,'.. 13Y Natile-, Pr Title: boss, Amlaffon, Inc. AMENDMENT NO.2 TO ACCESS PERMIT THIS AMENDMENT NO. 2 to Access Permit ("Amendment No. 2") is made and entered into this 18th day of April, 2016, by and between the City of Pueblo, a Municipal Corporation ("City") and Doss Aviation, Inc., a Texas Corporation("Permittee"). WHEREAS, City and Permittee entered into an Access Permit dated as of May 22, 2006 (the "Permit") to allow certain access to the Pueblo Memorial Airport ("Airport") from certain Premises described as Parcel B, Lot Line Rearrangement No. 2005-005, a vacation and replat of Lots 23 and 24, Pueblo Memorial Airport Industrial Park Subdivision, Pueblo County, Colorado (the "Premises"); and WHEREAS, Permittee intends to continue its flight screening program on the Premises and desires to maintain access to the Airport for the purposes described in the Permit; and WHEREAS, the City and Permittee are willing to amend the Permit to allow such access, subject to the terms and conditions of the Permit as hereby modified; and WHEREAS, this Amendment No. 2 constitutes a "minor amendment" to an agreement within the meaning of Section 1-5-2(2)(f) of the Pueblo Municipal Code, as amended, under which the City Manager has authority to make minor amendments to contracts without obtaining the approval of City Council. NOW, THEREFORE, in consideration of the foregoing and the terms and conditions set forth herein, the parties agree as follows: 1. Section 4 of the Permit is amended to read as follows: 4. Term. The terms of this Permit shall be ten (10) years commencing on May 23, 2016 and ending one hundred twenty (120) calendar months thereafter, unless sooner terminated as hereinafter provided ("Term"). This Permit shall automatically terminate upon the occurrence or any one or more of the following events: (a) sixty (60) days after the expiration of the Term, (b) mutual agreement of City and Permittee, (c) sixty (60) days after expiration or termination for any reason of the Air Force Contract; or (d) Failure of Permittee to correct and remedy any breach of this Permit within sixty (60) days after notice of default is given to Permittee by City describing the breach, provided, however, if the breach relates to payment in lieu of taxes and fees, Airport Use, Security Fence, Guard Station and/or Access Gate, DOSS-Amendment No 2 to Access Permit such breach shall be corrected and remedied immediately after notice is given by City to Permittee. 2. Except as expressly modified by this Amendment No. 2, the Permit shall remain in full force and effect. Except as modified by this Amendment No. 2, any obligations to be performed under the Permit by either party are not waived nor excused in any manner, but shall be performed in accordance with the terms and conditions of the Permit as it existed prior to this Amendment No. 2. IN WITNESS WHEREOF, Permittee and City have executed this Amendment No. 2 as of the date first written above. CITY OF PUEBLO, ATTEST: a Municipal Co ,'oration By City rk City •1 ager APPROVED AS TO FORM: City Attorney DOSS AVIATION, INC. By 4\,us-Q-A -t--- Name:LuAnn D. Hanson Title:Chief Financial Officer 2 i1