THIS LEASE AGREEMENT (the Agreement) is made and entered into effective the 1stday of January, 2005, by and between M.D.C. HOLDINGS, INC., a corporation organized and existingunder the laws of the State of Delaware with its principal place of business at 3600 SouthYosemite, Suite 900, Denver, CO 80237 (Company), M.D.C. LAND CORPORATION, a corporationorganized and existing under the laws of the State of Colorado with its principal place ofbusiness at 3600 South Yosemite, Suite 900, Denver, CO 80237 (Lessor), and David D. Mandarich,an individual, with an address of 3600 South Yosemite, Suite 900, Denver, CO 80237 (Lessee).
WHEREAS, M.D.C. Holdings, Inc. (Company) is the owner of the aircraft as further describedin Exhibit A attached hereto (the Aircraft);
WHEREAS, Lessor leases the Aircraft from the Company;
WHEREAS, Lessor desires to more efficiently utilize the Aircraft when they are not required byLessor in the conduct of its business;
WHEREAS, The board of directors of the Company has by formal resolutions determined that forthe safety, security, convenience, comfort and efficiency of the Chief Operating Officer of theCompany, it is in the best interests of the Company for its Chief Operating Officer to utilize theAircraft for non-Company business purposes, as well as Company business, when the Aircraft are notbeing utilized in the ordinary course of its business;
WHEREAS, Lessor contracts with Mountain Aviation, Inc. to manage and maintain the Aircraft andto provide fully qualified flight crews to fly the Aircraft;
WHEREAS, Lessor desires to lease said Aircraft to Lessee and Lessee desires to lease saidAircraft from Lessor pursuant to Section 91.501(c)(1) of the Federal Aviation Regulations (theFARs); and
WHEREAS, the Company consents to this Agreement providing its existing lease with the Lessoris not affected or impaired in any respect.
NOW THEREFORE, Lessor and Lessee declaring their intention to enter into and be bound by thisAgreement, and for the good and valuable consideration set forth below, hereby covenant and agreeas follows:
1. Lessor agrees to lease the Aircraft to Lessee pursuant to the provisions of FAR91.501(c)(1) and to provide a fully qualified flight crew for all operations on a non-exclusivebasis commencing on the first date set forth hereinabove and continuing unless and untilterminated. Either party may terminate this Agreement by giving thirty (30) days written notice tothe other party.
2. Lessee shall pay Lessor for each flight conducted under this Agreement an amount equal tothe maximum actual expenses incurred for each specific flight as permitted and authorized by FARPart 91.501(d), including the expense of any deadhead flights flown for the benefit of Lessee(the Incremental Expenses).
The Incremental Expenses permitted and authorized by FAR Part 91.501(d) are:
|(a)||Fuel, oil, lubricants and other additives.|
|(b)||Travel expenses of the crew, including food, lodging and groundtransportation.|
|(c)||Hangar and tie down costs away from the Aircrafts base ofoperations.|
|(d)||Insurance obtained for the specific flight.|
|(e)||Landing fees, airport taxes and similar assessments.|
|(f)||Customs, foreign permit, and similar fees directly related to theflight.|
|(g)||In flight food and beverages.|
|(h)||Passenger ground transportation.|
|(i)||Flight planning and weather contract services.|
|(j)||An additional charge equal to 100% of the expenses listed insubparagraph (a) of this paragraph.|
3. Lessor shall pay the Incremental Expenses related to the operation of the Aircraft pursuantto this Agreement monthly, as incurred. The Company shall provide the Lessee with an invoice on orbefore the fifteenth (15th) day of each month following a flight under this Agreement.Lessee shall pay the invoice on or before ten (10) days of receipt. Lessee shall include with eachpayment any federal transportation excise tax due with respect to such payment, and Lessor shall beresponsible for collecting, reporting and remitting such excise tax to the U.S. Internal RevenueService.
4. Lessor shall be responsible for all expenses related to the ownership, maintenance andoperation of the Aircraft and shall provide Lessee with a qualified flight crew for each flightundertaken under this Agreement.
5. Lessor shall be solely responsible for securing maintenance, preventive maintenance andrequired or otherwise necessary inspections on the Aircraft and shall take such requirements intoaccount in scheduling the Aircraft. No period of maintenance, preventive maintenance or inspectionshall be delayed or postponed for the purpose of scheduling the Aircraft, unless said maintenanceor inspection can be safely conducted at a later time in compliance with all applicable laws andregulations and within the sound discretion of the pilot in command. The pilot in command shallhave final and complete authority to cancel any flight for any reason or condition which in hisjudgment would compromise the safety of the flight.
6. In accordance with applicable FARs, the flight crew will exercise all of its duties andresponsibilities in regard to the safety of each flight conducted hereunder. Lessee specificallyagrees that the pilot in command, in his sole discretion, may terminate any flight, refuse tocommence any flight, or take other action that in the considered judgment of the pilot in commandis necessitated by considerations of safety. The parties agree that Lessor shall not be liable fordelay or failure to furnish the Aircraft and crew members pursuant to this Agreement when such
failure is caused by government regulation or authority, mechanical difficulty, war, civilcommotion, strikes or labor disputes, weather conditions, or acts of God.
7. Lessor will provide such additional insurance coverage as Lessee shall request or require;provided, however, that the cost of such additional insurance shall be borne by Lessee as set forthin paragraph 2(d) hereof.
8. Lessee warrants that:
|(a)||It will use the Aircraft for and on account of its own businessonly and will not use the Aircraft for the purposes of providing transportationfor passengers or cargo in air commerce for compensation or hire; and|
|(b)||During the term of this Agreement, it will abide by and conformto all such laws, governmental and airport orders, rules and regulations, asshall from time to time be in effect relating in any way to its operation anduse of the Aircraft by a time sharing Lessee.|
9. This Agreement is expressly subordinate to a lease of the Citation VII aircraft, S/N650-7056, N444EX, with the Company dated June 19, 2002, and subsequently modified on September 19,2002, and a lease of the Falcon 2000 aircraft, S/N 147, N999BE, with the Company dated July 21,2004 (the Master Leases). To the extent there may be any conflict with the rights, duties orobligations of the parties to such leases, or any inconsistency or conflict with any of the termsor conditions contained in Master Leases with this Agreement, the Master Leases shall govern andsupersede this Agreement.
10. Neither this Agreement nor either partys interest herein shall be assignable to any otherparty. This Agreement shall inure to the benefit of and be binding upon the parties hereto, theirheirs, representatives and successors.
11. Nothing herein shall be construed to create a partnership, joint venture, franchise,employer-employee relationship or to create any relationship of principal and agent.
12. This Agreement shall be governed by and construed in accordance with the laws of the Stateof Colorado.
13. TRUTH IN LEASING STATEMENT UNDER SECTION 91.23 (FORMERLY 91.54) OF THE FEDERAL AVIATIONREGULATIONS.
(A) M.D.C. LAND CORPORATION (LESSOR) HEREBY CERTIFIES THAT THE AIRCRAFT HAS BEENINSPECTED AND MAINTAINED WITHIN THE 12 MONTH PERIOD PRECEDING THE DATE OF THISAGREEMENT IN ACCORDANCE WITH THE PROVISIONS OF FAR PART 91 AND ALL APPLICABLEREQUIREMENTS FOR THE MAINTENANCE AND INSPECTION THEREUNDER HAVE BEEN MET.
(B) M.D.C. LAND CORPORATION (LESSOR) AGREES, CERTIFIES AND KNOWINGLY ACKNOWLEDGESTHAT WHEN THE AIRCRAFT IS
OPERATED UNDER THIS AGREEMENT, IT SHALL BE KNOWN AS, CONSIDERED, AND SHALL IN FACT BETHE LESSOR OF THE AIRCRAFT.
(C) THE PARTIES UNDERSTAND THAT AN EXPLANATION OF FACTORS AND PERTINENT FEDERALAVIATION REGULATIONS BEARING ON OPERATIONAL CONTROL CAN BE OBTAINED FROM THE LOCALFLIGHT STANDARDS DISTRICT OFFICE. LESSOR FURTHER CERTIFIES THAT IT WILL SEND A TRUECOPY OF THIS EXECUTED AGREEMENT TO: FLIGHT STANDARDS TECHNICAL DIVISION, P. O. BOX25724, OKLAHOMA CITY, OKLAHOMA, 73125, WITHIN 24 HOURS OF ITS EXECUTION, AS PROVIDEDBY FAR 91.23(c)(1).
IN WITNESS WHEREOF, the parties hereto have caused the signatures of their authorizedrepresentatives to be affixed below on the day and year set forth below, effective as of the dayand year first above written. The persons signing below warrant their authority to sign.
Lessor: M.D.C. LAND CORPORATION
|/s/ Michael Touff||/s/ David D. Mandarich|
|Michael Touff||David D. Mandarich|
|Vice President||Date: February 23, 2005|
|February 24, 2005|
Company: M.D.C. HOLDINGS, INC.
|/s/ Paris G. Reece III|
|Paris G. Reece III|
|Executive Vice President and|
|Chief Financial Officer|
|February 24, 2005|
A copy of this Agreement must be carried in the Aircraft while being operated hereunder.
INSTRUCTIONS FOR COMPLIANCE WITH
TRUTH IN LEASING REQUIREMENTS
|1.||Mail a copy of the agreement to the following address via certified mail, return receiptrequested, immediately upon execution of the agreement (14 C.F.R. 91.23 requires that the copybe sent within twenty-four hours after it is signed):|
Federal Aviation Administration
Aircraft Registration Branch
ATTN: Technical Section
P.O. Box 25724
Oklahoma City, Oklahoma 73125
|2.||Telephone or fax the nearest Flight Standards District Office at least forty-eight hoursprior to the first flight made under this agreement.|
|3.||Carry a copy of the agreement in the Aircraft at all times when the Aircraft is beingoperated under the agreement.|
Cessna 650 Citation VII Aircraft, U.S. Registration N444EX, S/N 650-7056, with two GarrettTFE-731-4R-2S engines, S/N 102203 and 102223
Dassault Aviation Falcon 2000 Aircraft, S/N 147, Registration No. N999BE, equipped with two (2)Honeywell CFE738-1-1B engines, S/N P105432 and P105465