FIRST AMENDED AND RESTATED AIRCRAFT JOINT OWNERSHIP AND MANAGEMENT AGREEMENT
Exhibit 10.18
FIRST AMENDED AND RESTATED
AIRCRAFT JOINT OWNERSHIP
AND MANAGEMENT AGREEMENT
This First Amended and Restated Aircraft Joint Ownership and Management Agreement (this “Agreement”) is made and entered into this 21st day of June, 2007, by and between Xxxxxxx Xxxxx Air Corp., a corporation incorporated under the laws of the State of New York with offices at 0000 Xxxxxx Xxxx, Xxxxx Xxxxxxx, Xxxxxxxxxxxx 00000 (hereinafter referred to as “CBAC”), and Xxxxxxx Xxxxx Air II Limited Partnership, a limited partnership organized under the laws of the State of Delaware, having its principal offices at 0000 Xxxxxx Xxxx, Xxxxx Xxxxxxx, Xxxxxxxxxxxx 00000 (hereinafter referred to as “Xxxxxxx Xxxxx XX”). CBAC and Xxxxxxx Xxxxx XX are sometimes collectively referred to in this Agreement as the “Owners.”
BACKGROUND STATEMENT
On December 18, 2006, the Owners entered into an Aircraft Joint Ownership and Management Agreement (the “Original Management Agreement”). On June 21, 2007, the limited partnership agreement of Xxxxxxx Xxxxx XX was amended and restated to reflect the (i) admission of Xxxxxx Hotel Group Limited Partnership, a Delaware limited partnership with an address at 0000 Xxxxxx Xxxx, Xxxxx Xxxxxxx, Xxxxxxxxxxxx00000 (“SHG”), and Xxx Energy Operating Corp., a Delaware corporation with an address at 0000 Xxxxxx Xxxx, Xxxxx Xxxxxxx, Xxxxxxxxxxxx 00000 (“Xxx”), as limited partners of Xxxxxxx Xxxxx XX and (ii) the withdrawal of Xxxxx X. Xxxxxx as a limited partner of Xxxxxxx Xxxxx XX. As a result of the amendment and restatement of the limited partnership agreement of Xxxxxxx Xxxxx XX, the Owners desire to supersede and replace the Original Management Agreement in its entirety by amending and restating the Original Agreement as follows:
W I T N E S S E T H:
WHEREAS, CBAC and Xxxxxxx Xxxxx XX intend to become the JOINT OWNERS of the following civil aircraft, (hereinafter referred to as “the Aircraft”):
| FAA Registration Number: | to be determined | |
| Serial Number: | EA500.000227 | |
| Make: | Eclipse Aviation | |
| Model: | 500 | |
| Year: | 2007 |
and,
WHEREAS, Xxxxxxx Xxxxx XX, as joint owner, intends to use the Aircraft as an industrial aid for purposes of its business and the business of its owners and entities in which they have an interest, which does not include the transportation of persons or cargo for compensation or hire; and
WHEREAS, CBAC has a lease for a hangar (“the Hangar”) at the University Park Airport (“UNV”), State College, Pennsylvania (“Lease”) where both parties intend to base the Aircraft, and has handling and maintenance equipment and maintenance services available at the Hangar to support and maintain the Aircraft; and
WHEREAS, CBAC owns one or more other aircraft and has available to its pilots capable of becoming qualified to operate the Aircraft on behalf of CBAC and Xxxxxxx Xxxxx XX; and,
WHEREAS, CBAC is willing to act as the “Managing Owner” of the Aircraft on behalf of itself and Xxxxxxx Xxxxx XX and, as such, is willing to: (a) oversee all routine and scheduled maintenance and inspections on the Aircraft and all unscheduled maintenance, (b) provide pilots for use of the Aircraft by Xxxxxxx Xxxxx XX and itself, (c) handle all scheduling of the Aircraft, and (d) handle all other routine and customary matters associated with corporate aircraft management; and
WHEREAS, the parties wish to define and regulate their respective benefits and liabilities as joint owners of the Aircraft and to define CBAC’s responsibilities as Managing Owner,
NOW, THEREFORE, in consideration of the mutual promises herein contained and other good and valuable consideration, the parties agree as follows:
AGREEMENT:
I. Use and Availability of the Aircraft. The parties agree that the Aircraft shall be available to Xxxxxxx Xxxxx XX and CBAC for use as an industrial aid; however, the parties agree that Xxxxxxx Xxxxx XX shall at all times have priority over CBAC in having the Aircraft available for its use. CBAC may use the Aircraft only if its use will not interfere with the Aircrafts’s use by Xxxxxxx Xxxxx XX. Notwithstanding Xxxxxxx Xxxxx II’s priority, the parties agree to cooperate in their scheduling of the use of the Aircraft and in the scheduling of maintenance for the Aircraft so as to maximize the Aircraft’s availability to both parties. When the Aircraft is used by Xxxxxxx Xxxxx XX, the xxxx for Direct Costs and Miscellaneous Expenses shall indicate the name of the limited partner of Xxxxxxx Xxxxx XX (or the limited partner’s affiliate) (hereinafter referred to as a “Limited Partner”) that used the Aircraft.
The parties agree that each party shall be responsible for dispatching and operating the Aircraft at all times that it is being used for that party’s purposes, and that each party shall thus retain “possession, command and control” of the Aircraft as that phrase is defined by the Internal Revenue Service in Revenue Ruling 58-215.
II. Managing Owner; Duties. CBAC shall act as Managing Owner of the Aircraft on behalf of both parties. As Managing Owner, CBAC shall be responsible for providing the following services:
A. Hangar and Related Services. CBAC shall provide space for the Aircraft in the Hangar (“the Hangar Space’) (as long as the Lease continues) and shall provide the service of moving the Aircraft from the Hangar Space onto the ramp area and from the ramp area into the Hangar Space. The term “Hangar Space” is not intended to define any fixed area within the Hangar and the Aircraft may be moved and relocated within the Hangar at any time as CBAC shall determine.
B. Fuel. The flight crews shall determine the need for and the amount of fuel to be purchased for the Aircraft at UNV and at all other airports. The fuel purchased by the flight crews for Xxxxxxx Xxxxx II’s operation of the Aircraft shall be covered in the Direct Cost billing to Xxxxxxx Xxxxx Air II.
C. Flight Crews. Flight crews will be arranged for by CBAC.
D. Flight Crew Training. Flight crew training will be arranged for by CBAC.
E. Maintenance.
1. CBAC will perform itself or cause to be performed by outside vendors all scheduled and unscheduled maintenance, including inspections, on the Aircraft. Routine maintenance shall be defined as all scheduled inspections to be performed under the Eclipse Aviation Maintenance Program (the “EAMP”), and daily maintenance and repairs and any other maintenance that should occur.
2. In the event CBAC is not equipped, or elects not to perform itself any routine maintenance or inspections, and in the event of any major inspections, avionics repairs or upgrades and engine overhauls, CBAC shall use its best efforts to ensure that the work is done in the safest, most expeditious and economical manner.
3. Xxxxxxx Xxxxx XX shall make the Aircraft available to CBAC for each inspection at the time intervals specified in the EAMP and for all other necessary inspections and repairs. In the event Xxxxxxx Xxxxx XX fails to do so, CBAC shall not be liable for any incidents, occurrences or damages that would pertain to maintenance performed prior to any such circumstance, any other provision of this Agreement to the contrary notwithstanding.
4. As part of its duties to perform or caused to be performed all maintenance on the Aircraft, CBAC shall be responsible for maintaining the Aircraft in compliance with all FAA airworthiness directives affecting the Aircraft and all manufacturer’s service bulletins affecting the Aircraft whose compliance is mandated by the FAA and/or by EAMP, and/or the insurance carriers and with all non-mandatory manufacturer’s service bulletins and instructions which CBAC, in its sole discretion, deems necessary for the safe operation of the Aircraft.
5. Except in the case of an emergency requiring such items to protect the passengers, crew or the Aircraft itself, CBAC shall notify Xxxxxxx Xxxxx XX before incurring any expenditures reasonably anticipated to exceed Ten Thousand and No/100 Dollars ($10,000.00) for any unscheduled or unusual maintenance items pertaining to the Aircraft. Should Xxxxxxx Xxxxx XX elect not to honor any expenditure deemed necessary by CBAC, Xxxxxxx Xxxxx XX agrees to notify CBAC, in writing, of its intent not to honor. Upon receipt of said notification, CBAC may, at its option, cancel this Agreement immediately.
F. Cleaning. CBAC shall clean the Aircraft on a regular basis and generally maintain the Aircraft in first class condition, minus any normal wear and tear.
G. Flight Operations and Scheduling.
1. The pilots, traffic coordinator (scheduler) and maintenance personnel shall have the sole discretion, which will be used in a reasonable manner, to cancel, delay or terminate a flight without liability for any loss or delay with respect to said cancellation, due to indicated or actual malfunctions of the Aircraft, weather conditions, acts of God, or other causes beyond their control.
2. CBAC shall be responsible for providing all charts, maps, navigational tools, maintenance manuals and aids it deems necessary for the safe operation of the Aircraft.
3. CBAC will perform all scheduling functions on behalf of the Owners and Limited Partners of the Owners. All trip requests will be made to CBAC by Xxxxxxx Xxxxx XX or any Limited Partners of Xxxxxxx Xxxxx XX at least 24 business hours in advance in order to avoid the Aircraft being unavailable due to maintenance or pilot duty time conflicts. CBAC’s performance of the scheduling functions shall not be construed as altering the parties’ agreement that each party, in using and operating the Aircraft, shall be exercising operational control over the Aircraft.
4. If there is a conflict in the scheduling of the Aircraft between the Owners, then the Owners shall attempt to resolve the conflict, but if they cannot, then the conflict shall be resolved by granting preference to Xxxxxxx Xxxxx XX. If there is a conflict in the scheduling of the Aircraft between any Owner and any Limited Partner of Xxxxxxx Xxxxx XX, then the parties shall attempt to resolve the conflict, but if they cannot, then the conflict shall be resolved by granting preference to the Limited Partner of Xxxxxxx Xxxxx XX.
5. If there is a conflict in the scheduling of the Aircraft between Limited Partners of Xxxxxxx Xxxxx XX, then the Limited Partners shall attempt to resolve the conflict, but if they cannot, then the conflict shall be resolved in the following manner:
a. If there is a conflict in the scheduling of the Aircraft between Xxxxx Xxxx, on the one hand, and either SHG or Xxx, on the other hand, then the conflict will be resolved, in the first instance, in favor of Xxxxx Xxxx, and in the second instance, in favor of SHG or Xxx (as the case may be), and thereafter, any such conflict shall be resolved by alternating in favor of Xxxxx Xxxx, on the one hand, and either SHG or Xxx (as the case may be), on the other hand; or
b. If there is a conflict in the scheduling of the Aircraft between SHG and Xxx, then the conflict will be resolved, in the first instance, in favor of SHG, and in the second instance, in favor of Xxx, and thereafter, any such conflict shall be resolved by alternating in favor of SHG and Xxx.
H. Insurance.
CBAC, throughout the term of this Agreement, shall arrange for and maintain in full force and effect insurance to be carried and maintained on the Aircraft in the following types and amounts:
1. All-risk aircraft hull insurance, including war and allied perils risks, with respect to the Aircraft against loss, theft, damage to the Aircraft (including any engine or parts while removed from the Aircraft), with an agreed value amount of Two Million Dollars ($2,000,000.00) and no deductible while in motion or not in motion. Such hull coverage shall remain unchanged by CBAC unless advised in writing by Xxxxxxx Xxxxx XX of a requested different hull value and subject to acceptance by applicable insurers.
2. Liability Insurance for bodily injury, death and property damage in an amount of not less than Two Million Dollars ($2,000,000.00), combined single limit coverage, each occurrence.
3. All insurance polices shall name CBAC as the named insured and shall name Xxxxxxx Xxxxx XX and CBAC’s and Xxxxxxx Xxxxx II’s respective parents, subsidiaries and affiliated companies, and their officers, directors, agents, employees, contractors and partners as additional insureds. (Each party hereto shall be responsible for providing the names of the parties to be insured.)
4. Xxxxxxx Xxxxx XX shall be named as “Loss Payee” for the hull coverage. Also, all insurance policies: (a) shall provide that if any premium is not paid when due, or is cancelled, terminated or materially changed for any reason whatsoever, the insurers will promptly notify each of the parties in writing and such cancellation, termination or change shall not be effective as of the parties for 60 days, except that the notice period shall be ten (10) days for non-payment of premium and seven (7) days as respects war and allied perils coverage; and (ii) shall contain a waiver by the underwriter thereof of any right of subrogation against Xxxxxxx Xxxxx XX. Each liability policy shall be primary without right of contribution from any other insurance which is carried by either Owner or Partner of Xxxxxxx Xxxxx XX and shall expressly provide that all of the provisions thereof, except the limits of liability, shall operate in the same manner as if there were a separate policy covering each insured.
5. In all cases, the parties agree that the proceeds of insurance to which each party is entitled shall be deemed to be accepted as that party’s sole recourse against the other for any loss and/or damage to the party and/or the Aircraft including, without limitation, consequential losses, any damages for loss of use, loss of profits, diminution in market value and/or any damages claimed by the party, additional interest holders, if any, and/or any other individual and/or entity upon the theories of negligence and/or strict liability in tort. Each Owner shall also bear the cost of paying any deductible amount under any policy of insurance in the event of a claim or loss occurring during its use or operation of the Aircraft. Payment of any hull claim will be made to the registered aircraft owner and applicable lien holder, if any, as of the date of loss, and as each owner’s interest would appear. If Xxxxxxx Xxxxx XX desires additional insurance coverage protecting Xxxxxxx Xxxxx XX for whatever peril, Xxxxxxx Xxxxx XX is required to provide a written request of such coverage desired. CBAC will advise the availability and possible additional cost, if any, of such additional coverage pending acceptance and approval by Xxxxxxx Xxxxx XX of such additional cost.
6. CBAC shall submit this Agreement for approval to the insurance carrier for each policy of insurance on the Aircraft. CBAC shall arrange for a Certificate of Insurance evidencing appropriate coverage as to the Aircraft and the satisfaction of the requirements set forth above to be given by its insurance carriers for each of the parties.
7. All aircraft coverages provided shall allow the Aircraft to be operated worldwide.
III. Compensation.
CBAC shall be entitled to receive from Xxxxxxx Xxxxx XX the following compensation and reimbursements for CBAC’s services as Managing Owner of the Aircraft:
A. Fixed Costs. Xxxxxxx Xxxxx XX agrees to pay CBAC the annual total set forth on the Management Program Cost Schedule attached hereto and made a part hereof. The annual total amount is to cover its priority, unrestricted use of the Aircraft for the term of this Agreement period and shall be paid in monthly installments of 1/12 of the annual total in advance.
B. Direct Costs. Xxxxxxx Xxxxx XX agrees to reimburse CBAC for all direct operating costs incurred by CBAC on behalf of Xxxxxxx Xxxxx XX during the term of this Agreement as set forth on the Management Program Cost Schedule attached hereto and made a part hereof.
C. Miscellaneous Expenses. Xxxxxxx Xxxxx XX agrees to reimburse CBAC as set forth on the Management Program Cost Schedule attached hereto and made a part hereof for all reasonable miscellaneous expenses incurred by CBAC on behalf of Xxxxxxx Xxxxx XX including, without limitation, all catering and telephone use, deicing and hangaring as required while away from the Facility, landing and parking of the Aircraft, International flight planning and handling fees, and for living expenses for the crew incurred by CBAC while on a trip at the specific direction of Xxxxxxx Xxxxx XX, and/or its authorized representative.
D. Invoices and Notices.
1. Invoices and any notices required under this Agreement shall be sent by CBAC to:
Xxxxxxx Xxxxx Air II Limited Partnership
and will become due in full on the 15th day after receipt by Xxxxxxx Xxxxx XX. Invoicing will be in three separate parts as follows:
a. Fixed costs;
b. Direct costs indicating the Limited Partner using the Aircraft;
c. Miscellaneous expenses indicating the Limited Partner using the Aircraft.
2. Remittances and any notices required under this Agreement shall be forwarded by Xxxxxxx Xxxxx XX to:
Xxxxxxx Xxxxx Air Corp.
IV. Miscellaneous.
A. This Agreement shall not be assigned or amended unless agreed to in writing by both parties and shall be governed by the laws of the Commonwealth of Pennsylvania.
B. The provisions of this Agreement shall be in effect for a period of twelve (12) months commencing on the date of this Agreement and shall supersede all prior agreements between CBAC and Xxxxxxx Xxxxx XX. This Agreement shall automatically renew at the expiration of each twelve (12) month term unless terminated by either party as provided in Article IV, subsection C below.
C. This Agreement may be cancelled by either party by giving one hundred twenty (120) days written notice prior to the expiration of the then current term.
[Remainder of Page Intentionally Left Blank. Signatures Follow.]
IN WITNESS WHEREOF, the parties have executed this First Amended and Restated Aircraft Joint Ownership Agreement as of the date first above written.
| XXXXXXX XXXXX AIR CORP. | ||
| By: | /s/ Xxxxx X. Xxxxxx | |
| Title: | President | |
| Name: | Xxxxx X. Xxxxxx | |
| XXXXXXX XXXXX AIR II LIMITED | ||
| PARTNERSHIP | ||
| By: | L & B Air LLC, its general partner | |
| /s/ Xxxxx Xxxx | ||
| Xxxxx Xxxx, Manager | ||
| /s/ Xxxxx X. Xxxxxx | ||
| Xxxxx X. Xxxxxx, Manager | ||
| /s/ Xxxxxxxx X. Xxxxxxx | ||
| Xxxxxxxx X. Xxxxxxx, Manager | ||
2006 Aircraft Joint Ownership and
Management Agreement
Management Program Cost Schedule
Eclipse 500
| I. | Fixed Costs incurred by CBAC on behalf of Xxxxxxx Xxxxx XX. |
Crew – Includes proportionate share of salaries, benefits, initial and recurrent training
Hangar – includes proportionate share of hangar leasing costs attributable to the property of Xxxxxxx Xxxxx XX, as well as proportionate share of cleaning, moving, lav and water service
Insurance costs
Any financing costs for the Aircraft
| II. | Direct Costs incurred by CBAC on behalf of Xxxxxxx Xxxxx XX. |
Labor— Charge per hour of operation of the Aircraft to be determined by CBAC consistent with current local market rates charged by similar companies. Must be uniformly charged to all Owners and Limited Partners of Xxxxxxx Xxxxx XX
Parts – The Cost to cover such items as EAMP, manuals and JEPP subscriptions)
| III. | Miscellaneous Expenses incurred by CBAC on behalf of Xxxxxxx Xxxxx XX. |
As defined in Article III (c)
