TIME SHARING AGREEMENT
Exhibit 10.9
THIS TIME SHARING AGREEMENT is entered into effective as of the date described in Section 13
below, by and between CSC TRANSPORT, INC., a Delaware corporation with a place of business at 0000
Xxxxxxxx Xxxxxxx, Xxxxxx 0, Xxxxxxxxxxx, Xxx Xxxx 00000 (“Lessor”), and RAINBOW MEDIA HOLDINGS LLC,
a Delaware limited liability company with a place of business at 00 Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000 (“Lessee”).
WITNESSETH:
WHEREAS, Lessor is the operator of the fixed-wing and rotary-wing aircraft set forth
on Exhibit A hereto, as amended from time to time (collectively, the “Aircraft”); and
WHEREAS, Lessor employs fully-qualified and credentialed flight crews to operate the Aircraft;
and
WHEREAS, Lessor has agreed to lease the Aircraft, with flight crew, to Lessee on a “time
sharing” basis as defined in Section 91.501(c)(1) of the Federal Aviation Regulations (“FAR”) upon
the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing premises, and the covenants and agreements
set forth herein, and for other good and valuable consideration, the receipt and sufficiency of
which are acknowledged, Lessor and Lessee, intending to be legally bound, hereby agree as follows:
1. Lease of Aircraft.
(a) Lessor agrees to lease the Aircraft to Lessee pursuant to the provisions of FAR Section
91.501(b)(6) and Section 91.501(c)(1) and this Agreement, and to provide a fully-qualified and
credentialed flight crew for all flights to be conducted hereunder during the Term (as defined in
Section 13) hereof. Lessor shall use the Aircraft pursuant to such lease solely for flights
conducted for business purposes of Lessor or its parent company or subsidiaries. The parties
acknowledge and agree that this Agreement did not result in any way from any direct or indirect
advertising, holding out or soliciting on the part of Lessor or any person purportedly acting on
behalf of Lessor. Lessor and Lessee intend that the lease of the Aircraft effected by this
Agreement shall be treated as a “wet lease” pursuant to which Lessor provides transportation
services to Lessee in accordance with FAR Section 91.501(b)(6) and Section 91.501(c)(1).
(b) If Lessor no longer is the operator of any one or more of the Aircraft,
Exhibit A shall be modified to delete any reference to such Aircraft and this Agreement
shall be terminated as to such Aircraft, but shall remain in full force and effect with respect to
each of the other Aircraft. No such termination shall affect any of the rights or obligations of
the parties accrued or incurred hereunder prior to such termination. If Lessor becomes the operator
of any aircraft not listed in Exhibit A hereto, subject in all respects to the FAR and any
other applicable law or regulation, Exhibit A shall be modified to include such aircraft,
and thereafter this Agreement shall remain in full force and effect with respect to such Aircraft
and each of the other Aircraft.
2. Payment for Use of Aircraft. Lessee shall pay Lessor the following actual expenses
of each flight conducted under this Agreement as provided below, not to exceed the maximum amount
legally payable for such flight under FAR Section 91.501(d)(1)-(10):
| (a) | fuel, oil, lubricants and other additives; | ||
| (b) | travel expenses of crew, including food, lodging and ground transportation; | ||
| (c) | hangar and tie-down costs away from the Aircraft’s base of operation; | ||
| (d) | additional insurance obtained for the specific flight at the request of Lessee; | ||
| (e) | landing fees, airport taxes and similar assessments; | ||
| (f) | customs, foreign permit and similar fees directly related to the flight; | ||
| (g) | in-flight food and beverages; | ||
| (h) | passenger ground transportation; | ||
| (i) | flight planning and weather contract services; and | ||
| (j) | an additional charge equal to 100% of the expenses listed in Section 2(a). |
In the case of flights conducted under this Agreement using rotary-wing aircraft, Lessee shall be
obligated to reimburse Lessor for the actual expenses set forth in Section 2(a)-(j) for occupied
legs only and not for deadhead flights. In the case of flights conducted under this Agreement
using fixed-wing aircraft, Lessee shall be obligated to reimburse Lessor for the actual expenses
set forth in Section 2(a)-(j) for all occupied legs and for deadhead flights to the extent
attributable to flights under this Agreement. Lessor and Lessee agree to allocate in good faith
the treatment of any flight or deadhead flight that may be for the joint benefit of Lessor and
Lessee (e.g., involving employees of both parties).
3. Operational Control of Aircraft. Lessor and Lessee intend and agree that on all
flights conducted under this Agreement, Lessor shall have complete and exclusive operational
control over the Aircraft, its flight crews and maintenance, and complete and exclusive possession,
command and control of the Aircraft. Lessor shall have complete and exclusive responsibility for
scheduling, dispatching and flight following of the Aircraft on all flights conducted under this
Agreement, which responsibility includes the sole and exclusive right over initiating, conducting
and terminating such flights. Lessee shall have no responsibility for scheduling, dispatching or
flight following on any flight conducted under this Agreement, nor any right over initiating,
conducting or terminating any such flight. Nothing in this Agreement is intended or shall be
construed so as to convey to Lessee any operational control over, or possession, command and
control of, the Aircraft, all of which are expressly retained by Lessor.
4. Scheduling.
(a) Lessee will provide Lessor with requests for flight time and proposed flight
schedules as far in advance of any given flight as possible. The designated authorized
representative(s) of Lessee shall submit scheduling requests under this Agreement to the designated
authorized representative(s) of Lessor. Requests for flight time shall be in such form (whether
oral or written) mutually convenient to, and agreed upon by, the parties. In addition to proposed
schedules and flight times, Lessee shall upon request provide Lessor with the following information
for each proposed flight prior to scheduled departure: (i) proposed departure point; (ii)
destination; (iii) date and time of flight; (iv) the number of anticipated passengers; (v) the
nature and extent of luggage to be carried; (vi) the date and time of a return flight, if any; and
(vii) any other pertinent information concerning the proposed flight that Lessor or the flight crew
may request.
(b) Subject to Aircraft and crew availability, Lessor shall use its good faith efforts in
order to accommodate the needs of Lessee, to avoid conflicts in scheduling, and to enable Lessee to
enjoy the benefits of this Agreement; however, Lessee acknowledges and agrees that notwithstanding
anything in this Agreement to the contrary, (i) Lessor shall have sole and exclusive final
authority over the scheduling of the Aircraft; and (ii) the needs of Lessor for the Aircraft
shall take precedence over Lessee’s rights and Lessor’s obligations under this Agreement.
(c) Although every good faith effort shall be made to avoid its occurrence, any flight
scheduled under this Agreement is subject to cancellation by either party without incurring
liability to the other party. In the event that cancellation is necessary, the canceling party
shall provide the maximum notice practicable.
5. Billing. Lessor shall pay all expenses relating to the operation of the Aircraft
under this Agreement. As soon as possible after the end of each calendar month during the Term,
Lessor shall provide to Lessee an invoice showing all use of the Aircraft by Lessee under this
Agreement during that month and a complete accounting detailing all amounts payable by Lessee
pursuant to Section 2 for that month, including such detail supporting all
expenses paid or
incurred by Lessor for which reimbursement is sought as Lessee may reasonably request. Lessee shall
pay all amounts due to Lessor under this Section 5 not later than 30 days after receipt of the
invoice therefor.
6. Maintenance of Aircraft. Lessor shall be solely responsible for securing
maintenance, preventive maintenance and inspections of the Aircraft (utilizing an inspection
program listed in FAR Section 91.409(f)), and shall take such requirements into account in
scheduling the Aircraft hereunder.
7. Flight Crew.
(a) Lessor shall employ or engage and pay all salaries, benefits and and/or compensation for a
fully-qualified flight crew with appropriate credentials to conduct each flight undertaken under
this Agreement. Lessor may use temporary flight crewmembers for a flight under this Agreement only
if any such temporary crewmember is FlightSafety (or SimuFlite) trained, is current on the Aircraft
and satisfies all of the requirements and conditions under the insurance coverage for the Aircraft.
All flight crewmembers shall be included on any insurance policies that Lessor is required to
maintain hereunder.
(b) The qualified flight crew provided by Lessor shall exercise all of its duties and
responsibilities with regard to the safety of each flight conducted hereunder in accordance with
applicable FAR’s. The Aircraft shall be operated under the standards and policies established by
Lessor. Final authority to initiate or terminate each flight, and otherwise to decide all matters
relating to the safety of any given flight or requested flight, shall rest with the
pilot-in-command of that flight. The flight crew may, in its sole discretion, terminate any
flight, refuse to commence any flight, or take any other action that, in the judgment of the
pilot-in-command, is necessitated by considerations of safety. No such termination or refusal to
commence by the pilot-in-command shall create or support any liability for loss, injury, damage or
delay in favor of Lessee or any other person. Lessor shall not be liable for delay or failure to
furnish the Aircraft and flight crew pursuant to this Agreement when such failure is caused by
government regulation or authority, mechanical difficulty, war, civil commotion, strikes or labor
disputes, weather conditions, acts of God, or other causes reasonably beyond the control of Lessor.
8. Insurance.
(a) At all times during the Term of this Agreement, Lessor shall maintain at its sole cost and
expense aircraft liability insurance against bodily injury and property damage claims, including,
without limitation, contractual liability, premises damage, personal property liability, personal
injury liability, death and property damage liability, public and passenger legal liability
coverage, in an amount not less than $100,000,000 for each single occurrence.
(b) Any policies of aircraft and liability insurance carried in accordance with this Section 8
and any policies taken out in substitution or replacement of any such policies (i) shall
name Lessee and its officers, directors, employees, agents, servants and guests as additional
insured; (ii) shall provide for 30 days written notice to Lessee by such insurer of cancellation,
change, non-renewal or reduction (seven days in the case of war risk and allied perils coverage
or
such shorter period as is customarily available in the industry); and (iii) shall permit the use
of the Aircraft by Lessor for compensation or hire to the extent required in order to perform its
obligations under this Agreement. Each shall be primary insurance, not subject to any co-insurance
clause and shall be without right of contribution from any other insurance.
(c) Lessor shall use reasonable commercial efforts to provide such additional insurance
coverage for specific flights under this Agreement, if any, as Lessee may request in writing.
Lessee acknowledges that any trips scheduled to the European Union may require Lessor to purchase
additional insurance to comply with local regulations. The cost of any such additional
flight-specific insurance shall be borne by Lessee as set forth in Section 2(d) hereof.
(d) Each party agrees that it will not do any act or voluntarily suffer or permit any
act to be done whereby any insurance required hereunder shall or may be suspended, impaired or
defeated. In no event shall Lessor suffer or permit the Aircraft to be used or operated under this
Agreement without such insurance being fully in effect.
(e) Lessor shall ensure that worker’s compensation insurance with all-states coverage is
provided for the Aircraft’s crew and maintenance personnel. In addition to and not in limitation
of the foregoing, each party shall maintain (or cause to be maintained) in full force and effect,
at its own expense, workers compensation insurance with all-states coverage covering all employees
whose work relates to or who travel on any one or more of the Aircraft.
(f) Each party shall deliver certificates of insurance to the other party with respect to the
insurance required or permitted to be provided by it hereunder not later than the first flight of
the Aircraft under this Agreement and upon the renewal date of each policy.
9. Taxes. Lessee shall be responsible for paying, and Lessor shall be responsible for
collecting from Lessee and paying over to the appropriate authorities, all applicable Federal
transportation taxes and sales, use or other excise taxes imposed by any governmental authority in
connection with any use of the Aircraft by Lessee hereunder. Each party shall indemnify the other
party against any and all claims, liabilities, costs and expenses (including attorney’s fees as and
when incurred) arising out of its breach of this undertaking.
10. Lessee’s Representations and Warranties. Lessee represents and warrants that:
(a) It will not use the Aircraft for the purposes of providing
transportation of passengers or cargo in air commerce for compensation or hire or for common
carriage.
(b) It shall refrain from incurring any mechanic’s or other liens in
connection with inspection, preventive maintenance, maintenance or storage of the Aircraft, and it
shall not attempt to convey, mortgage, assign, lease or in any way alienate the Aircraft or create
any kind of lien or security interest involving the Aircraft or do anything or take any action that
might mature into such a lien.
(c) It shall not lien or otherwise encumber, or create or place any lien or other
encumbrance of any kind whatsoever, on or against the Aircraft for any reason. It also will ensure
that no liens or encumbrances of any kind whatsoever are created or placed against the Aircraft for
claims against Lessee or by Lessee.
(d) It will abide by and conform to all laws, governmental and airport orders, rules and
regulations, as shall be imposed upon the lessee of an aircraft under a time sharing agreement.
11. Lessor’s Representations and Warranties. Lessor represents and warrants that:
(a) It will abide by and conform to all such laws, governmental and airport orders, rules and
regulations, as shall from time to time be in effect relating in any way to the operation and use
of the Aircraft pursuant to this Agreement.
(b) Lessor is, and at all times during the Term shall continue to be, a member in good
standing of the National Business Aviation Association that is eligible to take advantage of the
Small Aircraft Exemption with respect to the operation of rotary-wing Aircraft hereunder.
12. Disclaimer of Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, LESSOR
HAS MADE NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE AIRCRAFT,
INCLUDING ANY WITH RESPECT TO ITS CONDITION, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE.
IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR TO ANY OTHER PERSON FOR ANY
INCIDENTAL, CONSEQUENTIAL OR SPECIAL DAMAGES, HOWEVER ARISING.
13. Term. The term of this Agreement (the “Term”) shall commence on the effective date
of the contemplated “spin-off” of Lessee as a separate public company (and shall not become
effective if such spin-off does not occur in 2011) unless terminated in accordance with the
provisions hereof, shall remain in full force in effect for an initial term of five years and
thereafter shall automatically renew for successive one-year terms. Notwithstanding the foregoing,
either party shall have the right to terminate this Agreement for any reason or no reason effective
as of the last day of the initial term or any renewal term by written notice given to the other
party not less than 180 days prior to the last day of that term. In addition, this Agreement shall
terminate effective on the date specified in written notice from Lessor to Lessee to the effect
that Lessor no longer operates any aircraft, which notice shall be given by Lessor to Lessee as
soon as reasonably practicable after Lessor becomes aware that such is or will be the case.
14. Limitation of Liability. Lessee, for itself and on behalf of its principals,
members, managers, officers, directors, agents, guests, invitees, licensees and employees,
covenants and agrees that the insurance described in Section 8 hereof shall be its sole recourse
for any and all liabilities, claims, demands, suits, causes of action, losses, penalties, fines,
expenses or damages, including reasonable attorneys fees, court costs and witness fees attributable
to the use, operation or maintenance of the Aircraft pursuant to this Agreement or performance of
or failure to perform any obligation under this Agreement.
15. Relationship of Parties. Lessor is strictly an independent contractor
lessor/provider of transportation services with respect to Lessee. Nothing in this Agreement is
intended, nor shall it be construed so as, to constitute the parties as partners or joint
venturers or principal and agent. All persons furnished by Lessor for the performance of the
operations and activities contemplated by this Agreement shall at all times and for all purposes be
considered Lessor’s employees or agents.
16. Governing Law; Severability. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of New York, without regard to its choice of law rules.
If any provision of this Agreement conflicts with any statute or rule of law of the State of New
York, or is otherwise unenforceable, such provision shall be deemed null and void only the extent
of such conflict or unenforceability, and shall be deemed separate from, and shall not invalidate,
any other provision of this Agreement.
17. Amendment. This Agreement may not be amended, supplemented, modified or
terminated, or any of its terms varied, except by an agreement in writing signed by each of the
parties hereto.
18. Counterparts. This Time Sharing Agreement may be executed in counterparts, each
of which shall, for all purposes, be deemed an original and all such counterparts, taken together,
shall constitute one and the same agreement, even though all parties may not have executed the same
counterpart. Each party may transmit its signature by facsimile, and such faxed signature shall
have the same force and effect as an original signature.
19. Successors and Assigns. This Time Sharing Agreement shall be binding upon the
parties hereto, and their respective heirs, executors, administrators, other legal representatives,
successors and assigns, and shall inure to the benefit of the parties hereto, and, except as
otherwise provided herein, to their respective heirs, executors, administrators, other legal
representatives, successors and permitted assigns. Lessee agrees that it shall not sublease,
assign, transfer, pledge or hypothecate this Agreement or any part hereof (including any assignment
or transfer pursuant to or as a part of any merger, consolidation or transfer of assets) without
the prior written consent of Lessor, which may be given or withheld by Lessor in its sole and
absolute discretion.
20. Notices. All notices or other communications delivered or given under
this Agreement shall be in writing and shall be deemed to have been duly given if hand-delivered,
sent by certified mail return receipt requested or by nationally-utilized overnight delivery
service on a priority basis or confirmed facsimile transmission, as the case may be.
Such notices shall be addressed to the parties at the addresses set forth below, or to such
other address as may be designated by any party in a writing delivered to the other in the manner
set forth in this Section 20. Notices shall be deemed received on the date delivered. Routine
communications may be made by e-mail or fax to the addresses set forth therein.
Notices to Lessee:
|
Notices to Lessor: | |
Rainbow Media Holdings LLC
|
CSC Transport, Inc. | |
00 Xxxx Xxxxx
|
0000 Xxxxxxxx Xxxxxxx, Xxxxxx 5 | |
| Xxxxxxxxxxx, Xxx Xxxx 00000 | ||
Attn : Xxxx Xxxxxxxx, COO
|
Attn: Xxxxxx Prosedda | |
Telephone: (000) 000-0000
|
Telephone: (000) 000-0000 | |
Fax: (000) 000-0000
|
Fax: (000) 000-0000 | |
E-mail: xxxxxxxxx@xxxxxxx-xxxxx.xxx
|
E-mail: xxxxxxxx@xxxxxxxxxxx.xxx | |
and
|
and |
|
Rainbow Media Holdings LLC
|
CSC Holdings, Inc. | |
00 Xxxx Xxxxx
|
0000 Xxxxxxx Xxxxxx | |
Xxx Xxxx, Xxx Xxxx 00000
|
Xxxxxxxx, Xxx Xxxx 00000 | |
Attn : Xxxxx Xxxxxxxxx, EVP & GC
|
Attn: Xxxxx Xxxxx, General Counsel | |
Telephone: (000) 000-0000
|
Telephone: (000) 000-0000 | |
Fax: (000) 000-0000
|
Fax: (000) 000-0000 |
21. Small Aircraft Exemption and Truth-in-Leasing
Compliance.
(a) In order to satisfy the requirements of the Small Aircraft Exemption, Lessor shall with
respect to each rotary-wing Aircraft used in an operation under this Agreement: (i) provide to the
Farmingdale Flight Standards District Office the written notice of operations to be conducted under
this Agreement with a rotary-wing Aircraft required under such Exemption, a copy of this Agreement,
and a copy of the inspection program used to conform the rotary-wing Aircraft with the requirements
of FAR Section 91.409(f); and (ii) make all required logbook entries showing the provision of FAR
Section 91.501 pursuant to which the rotary-wing Aircraft is being operated hereunder. Lessor will
carry a copy of this Agreement and a copy of the NBAA Small Aircraft Exemption (a copy of the
current Small Aircraft Exemption is attached hereto as Exhibit B) in each rotary-wing
Aircraft at all times that such rotary-wing Aircraft is being operated hereunder.
(b) In order to satisfy the requirements of FAR 91.23 Lessor shall, on behalf of Lessee, (i)
mail a copy of this Agreement to the Aircraft Registration Branch, Technical Section, of the FAA in
Oklahoma City within 24 hours of its execution; and (ii) with respect to each Aircraft used in an
operation under this Agreement, notify the appropriate Flight Standards District Office at least 48
hours prior to the first flight of such Aircraft under this Agreement of the registration number of
the Aircraft, and the location of the airport of departure and departure
time of such first flight; and carry a copy of this Agreement on board the Aircraft at all times
when the Aircraft is being operated under this Agreement.
22. TRUTH IN LEASING STATEMENT UNDER FAR SECTION 91.23:
(A) LESSOR HEREBY CERTIFIES THAT EACH OF THE AIRCRAFT HAS BEEN MAINTAINED AND INSPECTED UNDER
FAR PART 91 DURING THE 12-MONTH PERIOD PRECEDING THE DATE OF EXECUTION OF THIS AGREEMENT. EACH
AIRCRAFT WILL BE MAINTAINED AND INSPECTED IN COMPLIANCE WITH THE MAINTENANCE AND INSPECTION
REQUIREMENTS OF FAR PART 91 FOR ALL OPERATIONS TO BE CONDUCTED UNDER THIS AGREEMENT.
(B) CSC
TRANSPORT, INC., 0000 XXXXXXXX XXXXXXX, XXXXXX 0, XXXXXXXXXXX, XXX
XXXX 00000, HEREBY
CERTIFIES THAT IT IS RESPONSIBLE FOR OPERATIONAL CONTROL OF THE AIRCRAFT FOR ALL OPERATIONS UNDER
THIS AGREEMENT.
(C) EACH PARTY HEREBY CERTIFIES THAT IT UNDERSTANDS ITS RESPONSIBILITIES FOR COMPLIANCE WITH
APPLICABLE FEDERAL AVIATION REGULATIONS.
(D) THE PARTIES UNDERSTAND THAT AN EXPLANATION OF THE FACTORS BEARING ON OPERATIONAL CONTROL
AND THE PERTINENT FEDERAL AVIATION REGULATIONS CAN BE OBTAINED FROM THE NEAREST FAA FLIGHT
STANDARDS DISTRICT OFFICE.
(signature page follows)
IN WITNESS WHEREOF, Lessor and Lessee have executed this Time Sharing Agreement effective as
of the date first above written.
| LESSOR: | ||||||||
| CSC TRANSPORT, INC. | ||||||||
| By: | ||||||||
| Name: | ||||||||
| Title: | ||||||||
| Date: | ||||||||
| LESSEE: | ||||||||
| RAINBOW MEDIA HOLDINGS LLC | ||||||||
| By: | ||||||||
| Name: | ||||||||
| Title: | ||||||||
| Date: | ||||||||
EXHIBIT A
AIRCRAFT
(as of , 2011)
Gulfstream Aerospace G-V, s/n 639, N501CV (fixed-wing)
Sikorsky S-76C, s/n 760453, N381CV
Sikorsky S-76C, s/n 760698, N301CV
Keystone Helicopter Corp. (Sikorsky) S-76C, s/n 760746, N401CV
EXHIBIT B
NBAA Exemption (#7897C)
