Exhibit 10.105
AIRCRAFT LEASE AGREEMENT
This Aircraft Lease Agreement ("Agreement") is made effective as of January 22,
2001 ("Effective Date"), between GCI Communication Corp., an Alaska corporation
("GCI" and "Lessee") and 560 Company, Inc. an Alaska corporation ("Lessor").
560 Company, Inc. is the Lessor and owner of the following-described aircraft,
together with all equipment and accessories attached thereto or used in
connection therewith (collectively, "Aircraft"):
Make/model: Cessna Citation V (C560)
Registration: N560ER
Serial no.: 560-0003
Engines: Xxxxx & Xxxxxxx JT15D-5A
Serial no.: Left 108003 Right 108535
Lessee desires to use the Aircraft, and Lessor is willing to allow Lessee to use
the Aircraft, for the terms and purposes, and on the terms and conditions, set
forth in this Agreement.
Now, therefore, Lessor and Lessee agree as follows.
1. Location and Use of Aircraft. The Aircraft is physically located in
Alaska as of the Effective Date. Lessor hereby grants to Lessee the
right to use the Aircraft on the terms and conditions set forth in this
Agreement.
2. Term. The initial term of this Agreement shall be for thirty (30) days
and shall commence on the Effective Date. The lease shall automatically
continue on a month to month basis unless terminated pursuant to any
provision of this Agreement. Either Lessee or Lessor may terminate this
Agreement upon one hundred twenty (120) days' written notice as set
forth in Section 17, and as follows: If GCI elects to terminate this
Agreement, Lessor may within five (5) business days of the date of such
notice provide GCI with written notice of Lessor's intent to put the
Aircraft up for sale. Then, this Agreement shall terminate upon the
earlier of (i) the sale date, or (ii) one hundred and twenty (120) days
from the date of GCI's termination notice. If the Agreement is not
terminated within ninety (90) days from the date of GCI's termination
notice, then Lessor shall rebate any rental payment for the period
after the ninetieth (90) day until the date of the lease termination to
GCI on the same date and in addition to the deposit described in
Section 3(C). Additionally, Lessor shall rebate to GCI all costs GCI
incurs hereunder beginning on the ninety-first (91st) day after the
termination notice. If Lessor fails to give notice of its intent to
sell the Aircraft within such five (5) business days, then this
Agreement shall terminate ninety (90) days from the date of GCI's
written notice of its intent to terminate.
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3. Payments to Lessor.
A. GCI shall pay rent to Lessor at the rate of US$40,000.00 per
month "dry" plus sales/use tax if applicable, without demand,
offset, deduction or counterclaim. Payments of each month's
rental shall be made on or before the first (1st ) day of each
month, in advance. The monthly rental payment for the first
and last month shall be prorated on an actual day's basis, and
any unused funds after a proper termination shall be refunded
to Lessee in full except as otherwise provided herein.
B. In addition to the monthly payment, GCI shall grant to Lessor
an option to purchase 250,000 shares of General Communication,
Inc., Class A Common Stock, no par value, at $6.50 per share,
in the form set forth as Exhibit A hereto.
C. In addition to the above payments, GCI shall provide Lessor
with a one million five hundred thousand dollars ($1,500,000)
deposit for the Aircraft's usage hereunder ("Deposit"). Lessor
may utilize the Deposit for its general working capital needs.
Upon the earlier of (i) thirty-six (36) months from the
Effective Date, (ii) six (6) months after the Agreement
terminates, or (iii) nine (9) months after the date of the
termination notice, Lessor shall repay the Deposit to GCI,
without interest (except as set forth in Section 14), and in
addition to any rental rebate amount owing under Section 2.
4. Use.
A. Lessee shall, at its sole expense, provide all crewmembers
required for operation of the Aircraft during the term of this
Agreement, except as set forth in Section 4(E). All
crewmembers must be qualified to Lessee's insurance company's
standards to fly the Aircraft.
B. Lessee shall pay all expenses in preparation for any GCI-usage
flight and in connection with GCI flights, including but not
limited to expenses for fuel, crew quarters, landing fees,
imposts, duties, fines, meals, all other out-of-pocket crew
expenses, and the cost of any special equipment required for
Lessee's business, except as set forth in Section 4(E).
C. Lessee shall, at its sole expense, provide hangar storage and
line service for the Aircraft in Anchorage, Alaska. Lessee
shall also pay all maintenance costs for the Aircraft during
the term hereof, except that Lessor shall pay the cost of the
major overhaul due on the right engine approximately 170 hours
after the Effective Date. Lessor's obligation for the costs of
such overhaul shall be limited to the direct charges for the
existing engine and shall not include any transport costs of
the Aircraft to and from the overhaul site, any charge related
to the use of a loaner
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engine during the overhaul period, or any costs associated
with the Aircraft's down time during such overhaul.
D. The Aircraft's base when not in use shall be Anchorage,
Alaska.
E. This Aircraft is for Lessee's use, and Lessee has first
priority use of the Aircraft. However, GCI agrees that as
additional consideration for this Lease, if GCI does not then
need all or a portion of the Aircraft for its business
purposes, Lessor has a secondary right of use in (a) any empty
seats on any GCI flights, and (b) the entire Aircraft when GCI
does not require the Aircraft's use. Lessor's use of any empty
seats on a GCI flight shall be in partial consideration for
this Agreement. Lessor's right to use the entire Aircraft is
subject to Lessor's obligation to timely reimburse GCI for all
incremental costs incurred as a result of Lessor's usage, i.e.
the variable costs of fuel, landing fees and the daily
expenses of the pilots. Regardless of any such usage, as set
forth in Section 7, GCI remains obligated to pay all the fixed
costs of the Aircraft, e.g. its fixed and regular maintenance,
insurance, pilots' salaries, etc. The Aircraft cannot be
subleased, chartered or used by any other person or entity.
Lessor covenants and warrants to GCI that it shall only
utilize the Aircraft for its principal's business and personal
purposes, and no other party than the sole individual owner of
Lessor shall make payments to Lessor for the utilization of
the Aircraft.
5. Major Damage. If the Aircraft suffers any major damage or loss of a
type required to be reported to the FAA or recorded in the Aircraft's
logbooks under FAA regulations governing the Aircraft's use, and
subsequently shall have been returned to service, Lessor and Lessee
shall upon delivery of the Aircraft to Lessor under Section 9 below,
determine the amount of loss in value, if any, suffered by the Aircraft
due to such damage or loss. Lessor and Lessee shall determine such
amount by requesting bids for the purchase of the Aircraft from three
(3) dealers in such aircraft, qualified to render such and not
affiliated with Lessor and Lessee. Lessor and Lessee shall each select
one dealer, and the two dealers shall select the third dealer. Each
dealer shall render one bid based upon a description of the Aircraft
assuming no damage history, and a second bid based on the Aircraft's
actual condition. The difference between the average of all bids
received for the Aircraft assuming no damage history, and the average
of all bids received for the Aircraft including the actual damage
history, together with interest thereon from the period between the end
of the term of this Agreement until the date of payment, at a rate
equal to one percentage point in excess of the prime rate announced
from time to time by Xxxxx Fargo, shall be paid by Lessee to Lessor in
the form of a lump sum payment within ten (10) days after the last of
the three (3) dealers renders its bid.
6. Lessor's Inspection. Lessor or its authorized representatives may at
all reasonable times inspect the Aircraft and Lessee's books and
records relating to
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the Aircraft, provided the Aircraft is not scheduled for use at the
time requested for inspection. Lessor's inspection will not interfere
with Lessee's normal business operation.
7. Maintenance and Repairs; Modifications and Improvements.
A. During the term of this Agreement, Lessee shall, at its sole
expense, maintain the Aircraft in good operating and airworthy
condition, perform any periodic inspections or service for the
Aircraft recommended by the manufacturer's maintenance manual
or service bulletins or required by law, and repair any
uninsured damage to the Aircraft as a result of Lessee's use
thereof. Lessor shall be responsible for any uninsured damage
to the Aircraft as a result of its exclusive use thereof.
Prior to repairing any damage to the Aircraft, Lessee will
notify Lessor of such damage and obtain written approval of
the repairs. The performance of all maintenance and repair
work shall be by or under the supervision of properly
qualified and trained personnel and in compliance with FAA or
other governmental requirements.
B. Should either engine of the Aircraft become due for a hot
section inspection or major overhaul during the term of this
Agreement, other than the overhaul of the right engine
described in Section 4(C), Lessee shall, at its sole expense,
perform such inspection or overhaul in accordance with the
manufacturer's recommended procedures.
C. GCI, with Lessor's consent, may add equipment to or modify the
Aircraft at its expense during the term hereof. At the
termination of the Lease, GCI may, at its election and
expense, either (i) remove such equipment or modifications and
return it to its original and unmodified condition, or (ii)
abandon such modifications and improvements to Lessor.
8. Insurance.
A. Lessee shall maintain, at Lessee's expense, during the term of
this Agreement all risk aircraft physical damage (ground and
flight hull) insurance on the Aircraft in the amount of four
million five hundred thousand US Dollars ($4,500,000.). Lessor
and the National Bank of Alaska shall be additional insureds.
The hull insurance shall contain a breach of warranty clause
and loss payee in favor of Lessor in case Lessee breaches any
obligation under the insurance contract.
B. Lessee shall maintain, at Lessee's expense, during the term of
this Agreement aircraft liability insurance, including bodily
injury to passengers, in the amount of at least one hundred
million US dollars ($100,000,000.). Lessor and the National
Bank of Alaska shall be additional insureds. Assuming such
coverage is available under reasonable financial terms, the
liability insurance shall contain a breach of
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warranty clause and loss payee in favor of Lessor in case
Lessee breaches any obligation under the insurance contract.
X. Xxxxxx and Lessee each hereby waive any and all rights of
recovery against the other, or against the owners, officers,
servants, employees, agents and representatives of the other,
for loss or damage of such waiving party or its property, or
the property of others under its control, where such loss or
damage is insured against under any insurance policy in force
at the time of such loss or damage as required hereunder.
9. Return of Aircraft.
A. Upon the termination of this Agreement, Lessee shall, at its
sole expense, return the Aircraft forthwith to Lessor by
delivering the Aircraft to Lessor at Anchorage, Alaska, or at
another agreed location. The Aircraft shall be returned in the
same condition as when delivered to Lessee hereunder, ordinary
wear and tear excepted, no open or deferred maintenance items,
in airworthy condition, and free and clear of all liens,
encumbrances or rights of others whatsoever caused by Lessee.
B. Not less than three (3) days prior to the expiration or
earlier termination of the Agreement Lessee shall make the
Aircraft available to Lessor at Anchorage, Alaska, or such
other location as agreed to pursuant to Section 9A, for the
purpose of permitting Lessor, at Lessor's sole cost, to make
an inspection of the Aircraft. In connection with such
inspection, Lessor shall, at Lessee's expense, be entitled to
an acceptance flight check of not more than one hour's
duration. Lessor shall at Lessor's expense be entitled to
correct and repair any condition of the Aircraft discovered on
such inspection or flight check which causes the Aircraft not
to be in the condition prescribed above or not airworthy; and
Lessee shall reimburse Lessor upon demand for the cost of any
such repairs. If any corrections or repairs are necessary, the
terms of the Agreement shall be extended for the period
required to enable Lessee to make such corrections or repairs
and to return the Aircraft in accordance with the terms of
Section 9.
C. During any extended term referred to in this Section 9, rent
shall be paid by Lessee to Lessor until the date of actual
return at the rate specified in Section 3A above.
10. Taxes. Lessee shall pay, and indemnify and hold Lessor harmless from,
all license and registration fees and all sales, use, operational,
personal property, and other taxes, levies, duties, charges or
withholdings of any nature (together with any penalties, fines or
interest thereon and reasonable attorneys' fees) imposed upon Lessor by
any federal, state or local government or taxing
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authority upon or with respect to the use or operation of the Aircraft
hereunder, upon the rentals, receipts, or earnings arising there from,
or with respect to this Agreement (other than taxes on, or measured by,
the net income of Lessor). The obligations of Lessee under this Section
shall survive the termination of this Agreement. Lessee shall only be
liable for the prorated portion of any taxes or fees not collected
during the term of this Agreement.
11. Liens, Encumbrances and Rights of Others. Lessee will not directly or
indirectly create, incur, or permit any mortgage, pledge, lien
attachment, charge, encumbrance or right of others whatsoever on or
with respect to the Aircraft, title thereto or any interest therein,
other than that arising because of a debt or other obligation of the
Lessor. Lessee will promptly, at Lessee's sole expense, cause any such
mortgage, pledge, lien, attachment, charge, encumbrance or right of
another which may arise at any time to be duly discharged, dismissed
and removed as soon as possible, but in any event within ten (10) days
after the existence of the same shall have first become known to
Lessee.
12. DISCLAIMER OF WARRANTIES. LESSEE ACKNOWLEDGE THAT LESSOR HAS NOT MADE
ANY REPRESENTATIONS OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE
CONDITION, AIRWORTHINESS, MERCHANTABILITY, DESIGN, OPERATION, OR
FITNESS FOR USE OR A PARTICULAR PURPOSE OF THE AIRCRAFT, AGAINST
INTERFERENCE BY OTHERS (OTHER THAN THAT ARISING BECAUSE OF A DEBT OR
OTHER OBLIGATION OF THE LESSOR), OR ANY OTHER REPRESENTATION OR
WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT.
LESSOR WARRANTS THAT IT HAS GOOD TITLE TO THE AIRCRAFT AND THAT IT IS
FREE AND CLEAR OF LIENS AND ENCUMBRANCES EXCEPT THOSE CREATED BY
LESSOR.
13. Indemnity. Lessee hereby assumes liability for, and shall indemnify,
protect, save and keep harmless Lessor, its shareholders, officers,
directors, employees and agents, from and against, and to pay Lessor
promptly upon demand the amount of, any and all liabilities,
obligations, losses, damages, penalties, claims, actions, suits, costs,
expenses and disbursements, including reasonable legal expense, of
whatsoever kind and nature, imposed on, incurred by or asserted against
Lessor in any way relating to or arising out of this Agreement or the
possession, use or operation of the Aircraft by Lessee. Lessor hereby
assumes liability for, and shall indemnify, protect, save and keep
harmless GCI, its shareholders, officers, directors, employees and
agents, from and against, and to pay GCI promptly upon demand the
amount of, any and all liabilities, obligations, losses, damages,
penalties, claims, actions, suits, costs, expenses and disbursements,
including reasonable legal expense, of whatsoever kind and nature,
imposed on, incurred by or asserted against GCI in any way relating to
or arising out of this Agreement or the possession, use or operation of
the Aircraft by Lessor. The indemnities contained in this Section 13
shall continue in full force and effect, not withstanding the
expiration or other termination of this Agreement.
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14. Default. The following shall constitute Events of Default hereunder: a)
Lessee or Lessor shall fail to make any payment due to the other party
within five (5) days after the same shall become due; b) Lessor or
Lessee shall fail to perform or observe any other material covenant,
condition or agreement to be performed or observed by it hereunder, and
such failure shall continue unremedied for a period of twenty (20) days
after written notice thereof by Lessor or Lessee; c) Lessee or Lessor
shall become insolvent or bankrupt, or make an assignment for the
benefit for creditors or consent to the appointment of a trustee or
receiver; or a trustee or receiver shall be appointed for such party;
or bankruptcy, reorganization or insolvency proceedings shall be
instituted by or against Lessee or Lessor, and, if instituted against a
party hereto, shall not be dismissed for a period of thirty (30) days.
Interest shall accrue for any payment not made when due hereunder at
ten and one-half (10.5%) percent per annum, beginning on the first day
such payment is late.
15. Remedies. Upon the occurrence of any Event of Default, Lessor or Lessee
may, at its option, and at any time thereafter, do one or more of the
following:
A. Require the defaulting party, upon the written demand of the
non-defaulting party and at non-defaulting party's expense, to
terminate this Agreement. If this Agreement is terminated
because of a default, Lessee will promptly return the Aircraft
to Lessor at the location, in the condition, and otherwise in
accordance with all of the terms, specified in Section 9 of
this Agreement.
B. Exercise any other right or remedy which may be available to
it at law or in equity. In addition, the defaulting party
shall reimburse the non-defaulting party upon demand for all
legal fees, other costs and expenses incurred by reason of the
occurrence of any Event of Default, or the exercise of the
non-defaulting party's remedies with respect thereto,
including all costs and expenses incurred in connection with
the return of the Aircraft in accordance with the terms of
Section 9 hereof or in placing such Aircraft in the condition
required by Section 9. No remedy referred to in this Section
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in addition to any remedy referred to above or available to
the non-defaulting party at law or in equity; and the exercise
or beginning of exercise by the non-defaulting party of any
one or more of such remedies shall not preclude the
simultaneous or later exercise by the non-defaulting party of
any or all such other remedies.
16. Assignment. Lessee shall not, without the prior written consent of
Lessor (which may be withheld by Lessor in its absolute discretion)
assign any of its rights hereunder or permit the Aircraft to be
operated or used by, or in the possession of, any party other than
Lessee, except that GCI may assign its contract rights hereunder for
security purposes only to its lenders.
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17. Notices. All notices, demands and requests contemplated by this
Agreement shall be deemed to have been delivered and received if served
personally, or sent by United States registered or certified mail,
postage prepaid, return receipt requested, or by courier service,
addressed to the addresses set forth below or such other addresses as
either party may designate by notice to the other:
If to Lessor: 560 Company, Inc.
Attention: Xxxxxx Xxxxxx, President
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxx 00000
If to Lessee: GCI Communication Corp.
Attention: Chief Financial Officer
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxx 00000
Any such notice shall be deemed delivered and received upon such specified
delivery at the time of attempted delivery shown on such return or courier
receipt. Any notice hereunder shall also be sent to:
National Bank of Alaska
Commercial Loan Department
X/x Xxxxxxx Xxxx Xxxxxxxxx
X.X. Xxx 000000
Xxxxxxxxx, XX 99510-0600
18. Attorneys' Fees. In the event of any litigation or arbitration between
the parties with respect to this Agreement, the prevailing party shall
recover from the other party all costs and expenses, including
reasonable attorneys' fees, incurred by the prevailing party, all of
which shall be included in and as a part of the judgment or award
rendered in such litigation or arbitration. The term "prevailing party"
shall mean the party which achieves substantially the relief sought,
whether by judgment, order, settlement, or otherwise.
19. Further Instruments. Each party shall from time to time execute and
deliver such further instruments as the other party may reasonably
request to effectuate the intent of this Agreement.
20. Execution and Counterparts. This Agreement may be executed and
delivered in counterparts and by each party hereto in separate
counterparts, each of which when so executed and delivered shall be
deemed an original and all of which taken together shall constitute one
and the same instrument.
21. Non-Waiver of Rights and Breaches. No failure or delay of either party
in the exercise of any right given to such party by this Agreement
shall constitute a waiver thereof, unless the time specified herein for
the exercise of such right has
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expired, nor shall any single or partial exercise of any right preclude
other or further exercise of that, or any other, right. The waiver by a
party hereto of any default of the other party shall not be deemed to
be a waiver of any subsequent default or other default of that party.
22. Entire Agreement; Modification. This Agreement constitutes the entire
agreement between the parties pertaining to the subject matter hereof,
and supersedes all prior agreements, understandings and representations
of the parties with respect to the subject matter hereof. This
Agreement may not be modified, amended or supplemented or otherwise
changed except in writing, executed by each party.
23. No Agency or Partnership. Nothing in this Agreement shall be deemed to
make either Lessor or Lessee an agent, partner or joint venturer of the
other.
24. Lessee Citizenship. Lessee hereby represents and warrants to Lessor
that Lessee is a citizen or permanent resident of the United States
within the meaning of Title 14, Section 375.36 of the Code of Federal
Regulations.
25. Governing Law. This Agreement shall be governed by and construed in
accordance with the substantive law, but not the law regarding
conflicts or choice of law, of the State of Alaska, with venue at
Anchorage, Alaska.
26. Counterpart Signatures. This Agreement can be signed in multiple
counterparts, the compilation of which shall be considered as one
document.
TRUTH IN LEASING (See Federal Aviation Regulation (FAR) 91.23).
A. UPON INFORMATION AND BELIEF, FOR THE TWELVE MONTHS PRECEDING THE DATE OF THIS
AGREEMENT, THE AIRCRAFT LEASED HEREUNDER HAS BEEN MAINTAINED AND INSPECTED IN
ACCORDANCE WITH FEDERAL AVIATION REGULATION PART 91.1
B. THE AIRCRAFT WILL BE MAINTAINED AND INSPECTED UNDER PART 91 FOR OPERATIONS
UNDER THIS AGREEMENT, AND LESSEE CERTIFIES THAT IT IS RESPONSIBLE FOR THE
AIRCRAFT'S STATUS OF COMPLIANCE WITH APPLICABLE MAINTENANCE AND INSPECTION
REQUIREMENTS AS SET FORTH UNDER THE REQUIRED FAA REGULATIONS APPLICABLE TO
OPERATOR'S USE AND OPERATION OF THE AIRCRAFT. IN ADDITION, LESSEE AGREES TO
PROVIDE LESSOR WITH WRITTEN INSPECTION REPORTS FOR INSPECTIONS ACCOMPLISHED
UNDER SAID PROGRAM.
C. THE LESSEE IS SOLELY RESPONSIBLE FOR OPERATIONAL CONTROL OF THE AIRCRAFT, AND
CERTIFIES THAT IT WILL COMPLY WITH ALL REGULATIONS ISSUED DURING THE TERM OF
THIS AGREEMENT. LESSEE IS HEREBY ADVISED THAT AN EXPLANATION OF FACTORS BEARING
ON OPERATIONAL
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CONTROL AND PERTINENT FAA REGULATIONS CAN BE OBTAINED FROM THE NEAREST FAA
FLIGHT STANDARDS DISTRICT OFFICE, GENERAL AVIATION DISTRICT OFFICE, OR AIR
CARRIER DISTRICT OFFICE.
D. LESSEE AGREES TO KEEP A COPY OF THIS AGREEMENT IN THE AIRCRAFT AT ALL TIMES
DURING THE TERM OF THIS AGREEMENT.
In witness whereof, Lessor and Lessee have caused this Agreement to be duly
executed by their respective officers or representatives as of the Effective
Date.
560 Company, Inc.
By: /s/
Xxxxxx X. Xxxxxx, President
GCI Communication Corp.
By: /s/
Xxxx X. Xxxxxx
Senior Vice President, CFO & Treasurer
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