FLIGHT TRAINING CENTER MANAGEMENT AGREEMENT
FLIGHT TRAINING CENTER MANAGEMENT AGREEMENT ("Agreement"),
dated January 1, 1996, by and between BRITISH AEROSPACE HOLDINGS,
INC., a Delaware corporation ("BAHI"), and REFLECTONE TRAINING
SYSTEMS, INC., a Delaware corporation ("RTS").
WITNESSETH:
WHEREAS, BAHI is the owner of a flight training center located
at 00000 Xxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx 00000; and
WHEREAS, BAHI wishes to engage RTS to manage the Center and
RTS wishes to accept such engagement upon the terms of this
Agreement.
WHEREAS, British Aerospace, Inc., a predecessor of BAHI, and
RTS entered into a Flight Training Center Management Agreement,
dated as of April 1, 1993, which agreement, the parties hereto
agree, is superseded by this Agreement and terminated by the
execution of this Agreement.
NOW THEREFORE, in consideration of the foregoing, of the
mutual covenants herein contained, and of other good and valuable
consideration, the receipt, adequacy, and sufficiency of which is
hereby acknowledged, the parties, intending legally to be bound
hereby, agree as follows:
1. DEFINITIONS.
For the purposes of this Agreement, the following definitions
shall apply:
(a) "Center", shall mean the business known as "Reflectone
Training Center-Dulles" currently operated by RTS at the Center
Facility utilizing the Center Assets.
(b) "Center Assets" shall mean all of the machinery,
equipment (including, but not limited to FTD's and mock-up training
equipment), furniture, fixtures, courseware, training materials,
data, and other documentation used by RTS in the operation of the
Center immediately prior to the effective date of this Agreement,
including, but not limited to the Existing Simulators.
(c) "Center Facility" shall mean the real property and
improvements thereto (and common areas associated, directly or
indirectly therewith, including, but not limited to, hallways,
walkways, lobbies, elevators, parking lots and similar areas)
located at 00000 Xxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx 00000, used
for the Center (including both the training center and the office
and classroom facilities located in the BAHI corporate office
building) and more fully described on Exhibit A hereto.
(d) "Direct Operating Expenses" shall mean direct operating
expenses of RTS incurred in the operation of the Center by RTS
employees located at the Center Facility. In no event shall Direct
Operating Expenses include the general and administration or
overhead expenses incurred by RTS or any of its affiliates
supporting the operation of the Center.
(e) "Existing Simulators" shall mean the aircraft flight
simulators described on Exhibit B hereto.
(f) "New Simulators" shall mean any and all aircraft flight
simulators utilized in the Center at any time during the term of
this Agreement other than the Existing Simulators.
2. ENGAGEMENT OF RTS.
BAHI hereby engages RTS to operate and manage the Center, and
RTS hereby accepts such engagement, upon the terms and conditions
set forth below.
3. DUTIES AND OBLIGATIONS OF BAHI.
(a) Except as otherwise provided in Section 8(b) hereof, at
all times during the term of this Agreement, BAHI, at BAHI's cost
and expense (except as otherwise stated in this Agreement), shall
make the Center Facility and the Center Assets exclusively
available to RTS for the conduct of the business operations of the
Center. Anything to the contrary herein notwithstanding, nothing
herein shall be construed as a sublease or other assignment of any
lease relating to any Existing Simulator.
(b) BAHI, in its sole discretion may require RTS to occupy
alterative office and/or classroom facilities during the Term. In
the event BAHI requires RTS to occupy alterative facilities such
alternative facilities shall then constitute a part of the "Center
Facility".
(c) BAHI shall cooperate with RTS, if necessary, in the
maintenance of all licenses and permits necessary or required to
operate the Center in compliance with applicable laws, including
without limitation, all licenses and permits required by the FAA.
4. DUTIES AND OBLIGATIONS OF RTS.
During the term of this Agreement:
(a) RTS shall operate and manage the Center.
(b) RTS shall provide, at its expense, all of the employees
deemed necessary by RTS for the operation of the Center.
(c) RTS shall, during the term of this Agreement, maintain
the same casualty and liability insurance (including but not
limited to using its best efforts to maintain the same type of
coverage, limits and deductibles) covering the operations of the
Center as were carried by RTS immediately prior to the date of this
Agreement. Such insurance shall name BAHI as an additional insured.
(d) RTS shall maintain all licenses and permits necessary or
required to operate the Center in compliance with applicable laws,
including, without limitation, all licenses and permits required by
the FAA.
(e) RTS shall invoice and collect payments from the Center's
customers for services performed by the Center. Such payments shall
be solely for the account of BAHI and remitted monthly by RTS as
instructed by BAHI from time to time. Amounts not collected within
twelve (12) months of providing services shall be turned over to
BAHI for collection or other disposition.
5. CENTER OPERATIONS.
During the term of this Agreement, RTS may make such
additions, deletions and alterations to the operations of the
Center as RTS shall, in its sole discretion, deem necessary;
provided, however, except as otherwise agreed in writing by BAHI,
RTS shall, continue to utilize the Existing Simulators at the
Center throughout the current term of any lease through which the
device is being provided to the Center and shall not alter the
overall general nature of the business of the Center.
6. REPRESENTATIONS, WARRANTIES AND COVENANTS OF BAHI.
BAHI hereby represents, warrants and covenants to RTS as
follows:
(a) Authority. BAHI has full power, right, and authority to
execute and perform this Agreement in accordance with the terms
hereof
(b) Validity. This Agreement has been duly and validly
executed by BAHI and, upon delivery thereof by BAHI, will
constitute a legal, valid, and binding obligation of BAHI
enforceable against BAHI in accordance with its terms.
(c) Compliance With Laws and Contracts. The execution,
delivery, and performance of this Agreement by BAHI in compliance
with the terms and provisions hereto does not conflict with, or
result in a breach of, any of the terms, conditions, or provisions
of any mortgage, lien, or other security arrangement or any
agreement, instrument, order, judgment, decree, or any other
restriction of similar kind or character to which BAHI is a party
or is otherwise bound which will result in any material adverse
effect upon the Center Facility or the Center Assets.
(d) No Violation. BAHI is not in violation of, or, to the
knowledge of BAHI, under investigation with respect to or
threatened to be charged or given notice with respect to, any
statute, rule, regulation, order, judgment, injunction, decree, or
other law, of any court or governmental authority relating directly
or indirectly to the business of the Center which would have a
material adverse effect on the business of the Center.
(e) Legal Proceedings. There are no claims, actions, suits,
inquiries, investigations, or other proceedings, pending or, to the
best knowledge of BAHI, threatened or imminent, relating to the
Center before any court or governmental body; nor is there any
reasonable basis for any such proceedings. BAHI is not subject to
any judgment, order, decree, or any governmental restriction which
is likely to result in any change in or effect on the Center that
is materially adverse to the business, properties, earnings,
prospects, or condition (financial or otherwise) of the Center.
7. REPRESENTATIONS AND WARRANTIES OF RTS.
RTS hereby represents and warrants to BAHI as follows:
(a) Authority. RTS has full power, right and authority to
execute and perform this Agreement in accordance with the terms
hereof
(b) Validity. This Agreement has been duly and validly
executed by RTS and, upon delivery thereof by RTS, will constitute
a legal, valid, and binding obligation of RTS enforceable against
in accordance with its terms.
(c) Compliance with Law and Contracts. The execution,
delivery, and performance of this Agreement by RTS in compliance
with the terms and provisions hereof does not conflict with, or
result in a breach of, any of the terms, conditions, or provisions
of any mortgage, lien, or other security arrangement or any
agreement, instrument, order, judgment, decree, or any other
restriction of similar kind or character to which RTS is a party or
is otherwise bound and will not result in the declaration of
imposition of any lien, charge, or other encumbrance of any nature
whatsoever upon the Center Facility or the Center Assets.
(d) No Violation. RTS is not in violation of or to the best
in knowledge of RTS, under investigation with respect to or
threatened to be charged or given notice with respect to, any
statute, rule, regulation, order, judgment, injunction, decree, or
other law, of any court or governmental authority which would have
a material adverse effect upon the business of the center.
(e) Legal Proceedings. There are no claims, actions, suits,
inquiries, investigations or other proceedings, pending or, to the
best knowledge of RTS, threatened or imminent relating to the
Center before any court or government body, nor is there any
reasonable basis for any such proceedings. RTS is not subject to
any judgment, order, decree, or any governmental restriction which
is likely to result in any change in or effect on the Center that
is materially adverse to the business, properties, earnings,
prospects, or condition (financial or otherwise) of the Center.
8. TERM; EVENTS OF Termination.
(a) Term. The term of this Agreement shall commence on the
date of this Agreement and, subject to early termination pursuant
to the terms of this Agreement, terminate on the three (3) year
anniversary of such date.
(b) Events of Termination. The obligations of the parties
under this Agreement shall terminate upon the earliest to occur of
the following:
(i) the delivery of a written termination notice by
either party six (6) months prior to the effective
date thereof;
(ii) either party's delivery of notice to the other to
the effect that an Event of Cause (as hereinafter
defined) has occurred;
(iii)either party's delivery of notice to the other
to the effect that a Force Majeure Event (as
hereinafter defined) has occurred; or
(iv) the mutual written agreement of the parties.
(c) For purposes of this Section 8, the following terms shall
have the following meanings:
(i) "Event of Cause" shall mean the commission by
either party hereto of a material breach of any
representation, warranty, agreement, covenant,
provision, term, condition, or undertaking set
forth in this Agreement and such material breach is
not cured within sixty (60) days after receipt of
written notice from the non-breaching party.
(ii) "Force Majeure Event" shall mean any event not
within either party's reasonable control which has
the effect of rendering the performance by the
affected party of its obligations under this
Agreement impossible, impracticable or which
substantially frustrates the purpose of this
Agreement, including, without limitation, accident,
fire, casualty, riot, war, medical epidemic, civil
disturbance, strike, lockout or other labor
dispute, act of God, order, rule, regulation, or
other act of any governmental body or authority or
absence of power or essential utility or other
essential services, in each case in respect of the
Center or operation or management hereof
9. COMPENSATION.
(a) Direct Operating Expenses. RTS's budget for Direct
Operating Expenses for the first twelve (12) months of the Term of
this Agreement has been approved by BAHI and is listed in Exhibit
C. During the term of this Agreement, revisions to the operating
budget may be made for unbudgeted scope changes with the prior
approval of BAHI. Thereafter during the Term of this Agreement, RTS
shall submit a budget for RTS's Direct Operating Expenses and a
business plan for the Center for the upcoming year by November 1 of
the current year. Such budget for Direct Operating Expenses and
business plan for the Center must be approved in writing by BAHI
prior to December 30 of such current year. No RTS Direct Operating
Expenses shall be reimbursed by BAHI to RTS until such budget and
business plan are approved, in writing by BAHI. BAHI shall
reimburse RTS for the Direct Operating Expenses that have been
budgeted, incurred and approved by BAHI, monthly, in arrears, after
submission of such Direct Operating Expenses to BAHI by RTS. RTS
shall, upon the request of BAHI, supply BAHI with all information
requested by BAHI concerning the Direct Operating Expenses.
(b) Annual Fee. In addition to payment referred to in Section
9(a), BAHI shall pay to RTS an annual fee of five hundred thousand
dollars ($500,000), payable in advance, in equal quarterly
installments.
(c) Revenues. All revenues earned by the operation of the
Center shall be for the account of BAHI and the resulting cash
collections from customers shall be remitted monthly by RTS as
instructed by BAHI from time to time. RTS shall use its best
efforts to collect such amounts from customers. Accounts which are
over ninety (90) days overdue will be reviewed jointly by BAHI and
RTS with BAHI ultimately determining the disposition of accounts.
10. CENTER FACILITY.
(a) Use. RTS shall use and occupy the Center Facility for the
operation of the Center and for no other purpose. BAHI represents
that the premises may lawfully be used for such purpose.
(b) Care of Premises. RTS shall commit no act of waste and
shall take good care of the Center Facility and the fixtures and
appurtenances therein, and shall, in the use and occupancy of the
Center Facility, conform to all laws, orders, and regulations of
the federal, state, and municipal governments or any of their
departments. Except where the repair has been made necessary by
misuse or neglect by RTS or RTS's agents, employees, visitors, or
licensees, BAHI shall maintain and repair the Center Facility at
BAHI's sole expense.
All improvements made by RTS to the Center Facility which are
so attached to the Center Facility such that they cannot be removed
without material injury to the Center Facility, shall become the
property of BAHI upon installation. The above notwithstanding, all
training equipment, including any simulators owned by RTS shall at
all times remain the property of RTS, absent specific written title
transfer to BAHI, whether or not attached to the Center Facility.
Not later than ninety (90) days after the last day of this
Agreement, RTS shall, a RTS's expense, remove all of RTS's personal
property and those improvements made by RTS which have not become
the property of BAHI, including trade fixtures, cabinetwork,
movable paneling, partitions, and the like; repair all injury done
by or in connection with the installation or removal of such
property and improvements; and surrender the Center Facility in as
good condition as it was at the beginning of the term, reasonable
wear and tear excepted. All property of RTS remaining on the
premises after ninety (90) days following the last day of the term
of this Agreement shall be conclusively deemed abandoned and may be
used or removed by BAHI, and RTS shall reimburse BAHI for the cost
of such removal.
(c) Alterations. RTS shall not, without first obtaining the
written consent of BAHI, make any material alterations, additions,
or improvements in, to, or on and about the Center Facility.
11. CENTER ASSETS.
Assets Necessary to the Business. BAHI owns or leases all of
the properties, assets, and rights which are currently used or
which are reasonably necessary to carry on its business and
operations as currently conducted and all such properties, assets,
and rights will be made available by BAHI to RTS for the management
and operation of the Center as described herein.
12. INDEMNIFICATION.
(a) Indemnification.
(i) BAHI shall indemnify, defend, and hold harmless RTS
from and against any and all losses, liabilities,
damages, obligations, payments, costs, and expenses
(including, without limitation, the costs and
expense of any and all actions, suits, proceedings,
judgments, settlements, and compromises relating
thereto, and reasonable attorneys' fees in
connection therewith) (collectively, "Indemnifiable
Losses" and each an "Indemnifiable Loss") of RTS
arising, directly or indirectly, not of or due to a
breach of any of the representations, warranties,
covenants, agreements, or undertakings of BAHI
contained in this Agreement.
(ii) RTS shall indemnify, defend, and hold harmless BAHI
from and against any and all Indemnifiable Losses
of BAHI arising, directly or indirectly, out of or
due to a breach of any of the representations,
warranties, covenants, agreements, or undertakings,
of RTS contained in this Agreement.
(b) Procedure for Indemnification. If a party entitled to
indemnification pursuant to Section 12(a)(i) or Section 12(a)(ii)
(the "Indemnitee") receives notice of the assertion by a person who
is not a party to this Agreement of any claim or of the
commencement by any such person of any action or proceeding (a
"Third Party Claim") with respect to which another party to this
Agreement (the "Indemnifying Party") is obligated to provide
indemnification, the Indemnitee shall give the Indemnifying Party
notice thereof after becoming aware of such Third Party Claim. Such
notice shall describe the Third Party Claim in reasonable detail,
and shall indicate the amount (estimated if necessary) of the
Indemnifiable Loss that has been or may be sustained by the
Indemnitee. The Indemnifying Party may elect to compromise or
defend, at such Indemnifying Party,s own expense and by such
Indemnifying Party's own counsel, any Third Party Claim. If the
Indemnifying Party elects to compromise or defend such Third Party
Claim, it shall within thirty (30) days (or sooner if the nature of
the Third Party Claim so requires) notify the Indemnitee of its
intent to do so, and the Indemnitee shall cooperate, at the expense
of the Indemnifying Party, in the compromise of, or defenses
against, such Third Party Claim. If the Indemnifying Party elects
not to compromise or defend against the Third Party Claim, or fails
to notify the Indemnitee of its election as herein provided, the
Indemnitee may pay, compromise, or defend such Third Party Claim
without waiving its claim for indemnification hereunder.
Notwithstanding the foregoing, neither the Indemnifying Party nor
the Indemnitee shall settle or compromise any claim over the
objection of the other; provided, however, that consent to
settlement or compromise shall not be unreasonably withheld. In any
event, the Indemnitee and the Indemnifying Party may each
participate, at its own expense, in the defense of such Third Party
Claim. If the Indemnifying Party chooses to defend any claim, the
Indemnitee shall make available, on a reasonable basis to the
Indemnifying Party, any personnel or any books, records, or other
documents within its control that are necessary for such defense.
Any claim on account of an Indemnifiable Loss which does not
result in a Third Party Claim shall be asserted by written notice
given by the Indemnitee to the Indemnifying Party. The Indemnifying
Party shall have a period of thirty (30) days within which to
respond thereto. If the Indemnifying Party does not respond within
such thirty (30) day period, the Indemnifying Party shall be deemed
to have accepted responsibility to make payment, and shall have no
further right to contest the validity of such claim. If the
Indemnifying Party does respond within such thirty (30) day period
and rejects such claim in whole or in part, the Indemnitee shall be
free to pursue such remedies as may be available to such party by
applicable law.
(c) Remedies Cumulative. The remedies provided in Section 12
shall be cumulative and shall not preclude assertion by an
Indemnitee of any other rights or the seeking of any and all other
remedies against an Indemnifying Party.
13. MISCELLANEOUS PROVISIONS.
(a) Relationship of the Parties. The parties hereby
understand and agree that the relationship between BAHI and RTS
created by this Agreement shall be that of an independent
contractor or an independent subcontractor and that nothing
contained herein shall create a partnership, joint venture, or
relationship of principal and agent between BAHI and RTS.
(b) Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if
hand delivered, transmitted by telegram, telex or telecopy or
mailed by registered or certified mail, postage prepaid, return
receipt requested, as follows:
(i) If to BAHI to:
00000 Xxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxx
Senior Vice President and General Manager
(ii) If to RTS to:
0000 Xxxxx Xxxx Xxxxxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Executive Vice President
or to such other address as the person to whom notice is given may
have previously furnished to the other parties in writing in
accordance herewith, except that notice of change of address shall
be effective only upon receipt.
(c) Successors. This Agreement and all terms and provisions
hereof shall be binding upon and shall inure to the benefit of all
of the parties hereto, and their legal representative, heirs,
successors, and assigns, except as expressly herein otherwise
provided.
(d) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws, but not the rules relating
to choice of laws, of the Commonwealth of Virginia.
(e) Assignability. Either party may assign this Agreement
and its right and obligations hereunder, to an affiliate thereof
(including Aero International (Regional)) without the prior consent
of, but upon notice to, the other party, but neither party may
otherwise assign this Agreement without the prior written consent
of the order.
(f) Counterparts. This Agreement may be executed in
counterparts, each of which shall be an original, but all of which
shall constitute one and the same instrument.
(g) Entire Understanding. This Agreement constitutes the
entire understanding between the parties hereto and supersedes any
prior understandings and agreements, written or oral, between them
respecting the subject matter hereof.
(h) Severability. If any provision of this Agreement, or the
application of such provision to any person or circumstance, shall
be held invalid by a court of competent jurisdiction, the remainder
of this Agreement, or the application of such provision to persons
or circumstances other than those to which it is held invalid by
such court, shall not be affected thereby.
(i) Amendments. This Agreement may only be amended upon the
prior written agreement of BAHI and RTS.
(j) Further Assurances. Each of the parties shall hereafter
execute and deliver such further instruments and do such further
acts and things as may be required or useful to carry out the
intent and purpose of this Agreement and as are not inconsistent
with the terms hereof
(k) Attorneys' Fees. In the event of litigation between the
parties arising directly or indirectly pursuant to this Agreement,
the prevailing party shall be entitled to the reimbursement of all
costs (including reasonable attorneys' fees at the trial and
appellate court levels) from the non-prevailing party.
(l) Headings and Captions. The titles or captions of section
and subsections contained in this Agreement are provided for
convenience of reference only, and shall not be considered a part
hereof for purposes of interpreting or applying this Agreement,
and, therefore, such titles or captions do not define, limit,
extend, explain, or describe the scope or extent of this Agreement
or any of its terms, provisions, representations, warranties,
conditions, etc., in any manner or way whatsoever.
(m) Gender and Number. All pronouns and variations thereof
shall be deemed to refer to the masculine, feminine or neuter, and
to the singular or plural, as the identity of the person or entity
or person or entities may required.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement or caused this Agreement to be executed as of the date
and year first above written.
BRITISH AEROSPACE HOLDINGS, INC.
By: Xxxx X. Xxxxxx
-----------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President and
General Manager
Date: 21 December 1995
REFLECTONE TRAINING SYSTEMS, INC.
By: Xxxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Executive Vice President
Date: 21 December 1995
