AMENDED AND RESTATED AIRCRAFT JOINT OWNERSHIP AGREEMENT
Exhibit 10.33
AMENDED AND RESTATED AIRCRAFT JOINT OWNERSHIP AGREEMENT
THIS AMENDED AND RESTATED AIRCRAFT JOINT OWNERSHIP AGREEMENT (the “Agreement”) is made and
entered into as of the 30th day of September, 2008, by and between National Education
Loan Network, Inc. (“Nelnet”), and Union Financial Services, Inc. (“UFS”) (Nelnet and UFS being
referred to herein individually as a “Joint Owner” and collectively as the “Joint Owners”) and is
made with reference to the following:
A. Joint Owners are the registered joint owners, as tenants in common in the proportions
provided for herein, of that certain Cessna Citation VI model aircraft, Serial No. 650-0232, U.S.
Registration No. N711LV (the “Aircraft”).
B. Joint Owners wish to enter into an agreement pursuant to the provisions of Section 91.501
of the Federal Aviation Regulations for the use, operation and maintenance of the Aircraft and for
the allocation of the costs associated therewith.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants contained herein,
and intending to be legally bound hereby, the parties agree as follows:
1. Joint Ownership.
(a) Allocation. Notwithstanding the designation of any Joint Owner as a
registered joint owner of the Aircraft on the records of the Federal Aviation Administration, the
parties agree that all of their respective rights and obligations with respect to the Aircraft
shall be determined solely and entirely by the terms of this Agreement. Each of the Joint Owners
is the owner, as a tenant in common, of the following undivided interest in the Aircraft (such
interest being referred to herein as the “Ownership Percentage”):
Nelnet |
74.753 | % | ||
UFS |
25.247 | % |
(b) Rights to Aircraft. Joint Owners hereby acknowledge that, the Joint Owners, to
the extent of their respective Ownership Percentages own the Aircraft, free and clear of any lien,
security interest or encumbrance of any nature.
2. Relationship of Parties. The relationship among the parties is as tenants in
common of a chattel (the Aircraft). Notwithstanding the foregoing, each Joint Owner waives any
right it may have to demand the partition, or sale for partition, of the Aircraft under any law of
the State of Nebraska, or any other jurisdiction, and hereby agrees that the sole means by which a
Joint Owner may divest itself of its interest in the Aircraft is as provided for in Section 10
hereof. No partnership, joint venture or other relationship between the parties whereby any party
may be held liable for the acts or omissions of any other party is intended or created by this
Agreement or by virtue of the designation of any party as a registered joint owner of the Aircraft.
Each Joint Owner shall be entitled to its pro rata share (based on its Ownership Percentage) of
the depreciation, gain, loss or deduction with respect to the Aircraft and shall be severally
liable for all costs and expenses chargeable to such Joint Owner under the Management Agreement (as defined
herein) and incurred with respect to the Aircraft.
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3. Management Agreement. Each Joint Owner agrees that it will enter into an agreement
with Xxxxxx Aviation, Inc. (“Xxxxxx”) to operate and manage the Aircraft on the Joint Owners’
behalf (the “Management Agreement”). Each Joint Owner shall perform their respective obligations
pursuant to the Management Agreement during the term of this Agreement. Each Joint Owner hereby
acknowledges that, in order to provide each Joint Owner with sufficient use of the Aircraft, no
Joint Owner shall be entitled to utilize the Aircraft in excess of such Joint Owner’s Allocated
Flight Hours (as defined in Section 5(b) hereof) during any given year, except to the extent
provided for herein or in the Management Agreement. Each Joint Owner further acknowledges that in
the event any Joint Owner fails to utilize its Allocated Flight Hours during any year hereunder,
such Joint Owner will be deemed to have waived its rights to such hours thereafter.
4. Representations, Warranties and Covenants. Each Joint Owner represents, warrants
and covenants to the other Joint Owners that the:
(a) Joint Owner is, and for so long as this Agreement remains in effect will be, a citizen of
the United States as described in 49 U.S.C. § 40101, et seq., as amended;
(b) Joint Owner will not utilize the Aircraft for any illegal purposes or for purposes of
providing transportation of passengers or cargo in air commerce for compensation or hire except as
permitted under Section 91.501 of the Federal Aviation Regulations;
(c) Joint Owner shall not operate the Aircraft unless appropriate insurance coverage, as
detailed in the Management Agreement, is in effect.
5. Scheduling. Xxxxxx shall have the exclusive right to schedule use of the Aircraft
in accordance with the following criteria:
(a) Use will be scheduled among the Joint Owners, on a “first-come, first served” basis.
(b) Each Joint Owner will be entitled to use the Aircraft in an amount consistent with their
Ownership Percentages (“Use Amount”) in each twelve (12) month period, unless otherwise agreed.
(c) Each party shall in any case be responsible for all actual expenses incurred as a result
of its use of the Aircraft. Use of the Aircraft shall be deemed to commence at the time the
Aircraft takes off and shall terminate when the Aircraft lands at the destination Airport. Flight
Hours for one way trips shall include, as applicable, the time required to return the Aircraft from
the point of destination to Lincoln, Nebraska or the time required to position the Aircraft from
Lincoln, Nebraska to the point of origin.
(d) Subject to the Aircraft’s availability for use by another Joint Owner for its Use Amount,
a Joint Owner may make reasonable use of the Aircraft for more than the Joint Owner’s Use Amount.
In such situations the Joint Owners will reconcile actual use as compared to Use Amount of the
Aircraft on an annual basis as contemplated by Section 6(b) below.
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6. Operating Cost Allocation. The Joint Owners will share the costs of operating the
Aircraft as follows:
(a) Monthly Fixed Cost Payment. The Joint Owners will each make a monthly fixed cost
payment to Xxxxxx as provided for in the Management Agreement. It is agreed and understood that
the proportion of the total monthly fixed costs initially paid by each Joint Owner is based on the
Joint Owner’s respective Ownership Percentages. If any Joint Owner uses the Aircraft in excess of
its annual Use Amount, as soon as practicable after December 1 of each year, commencing with
December 1, 2008, the Joint Owners will determine the percentage of each Joint Owner’s actual use
of the Aircraft during the 12-month period ending on November 30 of such year (the “Actual Use
Percentage”). If the Actual Use Percentages are different than the Ownership Percentages, the
amount of the total monthly fixed cost payments made during such 12-month period will be adjusted
among the Joint Owners on the basis of the Actual Use Percentages.
(b) Maintenance, Repair and Refurbishment Costs. Each Joint Owner will be responsible
and liable for its pro-rata portion (based on the Joint Owner’s Ownership Percentage) of the cost
of maintaining, repairing and refurbishing the Aircraft and its components. To the extent a Joint
Owner’s Actual Use Percentage at the end of a twelve-month period exceeds the Joint Owner’s
Ownership Percentage, the Joint Owners will complete a reconciliation.
(c) Fuel and Out of Pocket Costs. Each Joint Owner will be responsible and liable to
Xxxxxx for the cost of fuel and other consumables in connection with all flight hours charged to
such Joint Owner and for all out-of-pocket expenses incurred by Xxxxxx in connection with the Joint
Owner’s use of the Aircraft such as, but not limited to, catering, landing fees and crew expenses.
(d) Personal Property Tax. Each Joint Owner will be responsible and liable for, and
will indemnify, defend and hold the other Joint Owners harmless from liability for, personal
property taxes assessed on such Joint Owner’s interest in the Aircraft.
7. Insurance. Each Joint Owner shall, pursuant to the Management Agreement, cause
Xxxxxx to provide and keep in force a policy or policies of liability insurance covering Aircraft
operations with coverage limits of not less than $100,000,000 per occurrence, single limit bodily
injury and property damage, including passengers. Each Joint Owner will be endorsed as an
additional insured under such policies. Each Joint Owner shall, pursuant to the Management
Agreement, cause Xxxxxx to obtain hull insurance coverage on the Aircraft in an amount equal to the
value of the Aircraft.
8. Maintenance and Repair. Each Joint Owner shall, pursuant to the Management
Agreement, cause Xxxxxx to be responsible for maintaining the Aircraft in a serviceable and
airworthy condition in accordance with applicable regulations, requirements and directives. Joint
Owners shall not be entitled to any abatement of their fixed cost payment obligation by reason of
the unavailability of the Aircraft due to the performance of any repair or maintenance activities.
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9. Taxes. Each Joint Owner will be responsible for, and will indemnify and hold the
other Joint Owner’s harmless from liability for, any excise, sales or similar taxes (including
interest and penalties) assessed as the result of the ownership or use of the Aircraft by such
Joint Owner.
10. Alienation of Ownership Interest.
(a) Each Joint Owner hereby covenants and agrees that, except as specifically authorized
herein or by agreement of the Joint Owners holding a majority of the Ownership Percentages, it will
not voluntarily encumber, sell, transfer, assign or otherwise convey, directly or indirectly, any
portion of its interest in the Aircraft to anyone other than a current Joint Owner and that any
attempt to do so will be void and of no force or effect.
(b) In the event a Joint Owner wishes to voluntarily sell or otherwise transfer all (but not
less than all) of its interest in the Aircraft to someone other than a current Joint Owner, such
Joint Owner (the “Selling Joint Owner”) shall notify the other Joint Owner (the “Buying Joint
Owner”) in writing of its intent. In such event, the Buying Joint Owner shall have the right, but
not the obligation, for a period of thirty (30) days following receipt of such notice to purchase
(for cash or its equivalent) the interest of the Selling Joint Owner in the Aircraft for an amount
equal to the Selling Joint Owner’s pro rata portion (determined on the basis of its Ownership
Percentage) of the Aircraft’s then current fair market value as determined by mutual agreement. If
the Buying Joint Owner and the Selling Joint Owner are unable to agree on the Aircraft’s fair
market value within thirty (30) days, fair market value will be determined by three (3) qualified
appraisers of used aircraft, one of whom shall be designated by the Selling Joint Owner, one by the
Buying Joint Owner and one by the two appraisers selected by the Joint Owners. In the event the
Buying Joint Owner do not exercise such right in connection with a proposed voluntary sale or
transfer, the interest of the Selling Joint Owner may be transferred to a third party
provided, however, that such purchaser or transferee, as a condition of the sale or
transfer, shall execute this Agreement and the Management Agreement and become fully subject to the
terms thereof.
(c) In the event of any change in the ownership of the controlling interest in a Joint Owner
or in the event of an attempted involuntary sale or transfer of the interest of any Joint Owner (in
either case, the “Selling Joint Owner”) in the Aircraft, whether directly or indirectly, the other
Joint Owner (the “Buying Joint Owner”) shall have the right, but not the obligation, for a period
of thirty (30) days following receipt of notice of such change in ownership or attempted
involuntary sale or transfer to purchase (for cash or its equivalent) the interest of the Selling
Joint Owner in the Aircraft for an amount equal to the Selling Joint Owner’s pro rata portion
(determined on the basis of its Ownership Percentages) of the Aircraft’s then current fair market
value as determined by mutual agreement. If the Buying Joint Owner and the Selling Joint Owner are
unable to agree on the Aircraft’s fair market value within thirty
(30) days, fair market value will be determined by three (3) qualified appraisers of used aircraft,
one of whom shall be designated by the Selling Joint Owner, one by the Buying Joint Owner and one
by the two appraisers selected by the Joint Owners. In the event the Buying Joint Owner do not
exercise such right in connection with a proposed involuntary sale, the interest of the Selling
Joint Owner may be sold to a third party provided, however, that such purchaser or
transferee, as a condition of the sale or transfer, shall execute this Agreement and the Management
Agreement and become fully subject to the terms thereof.
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11. Term and Termination. This Agreement is effective as of the date first written
above and will continue in effect on a month to month basis until terminated by mutual agreement.
At anytime hereunder, UFS shall have the right to require Nelnet to purchase UFS’s interest in the
Aircraft for an amount equal to UFS’s pro rata portion (determined on the basis of its Ownership
Percentage) of the Aircraft’s then current fair market value as determined by mutual agreement. If
the parties are unable to agree on the Aircraft’s fair market value within thirty (30) days, fair
market value will be determined by three (3) qualified appraisers of used aircraft, one of whom
shall be designated by Nelnet, one by UFS and one by the two appraisers selected by the Joint
Owners. If so agreed by the Joint Owners, the Joint Owners shall cause Xxxxxx, as agent for the
Joint Owners, to sell the Aircraft in a commercially reasonable manner. The net proceeds from such
sale will be distributed to each Joint Owner in proportion to their Ownership Percentages. The
good faith decision of Xxxxxx regarding the terms and conditions of such sale shall be conclusive
and binding on each of the Joint Owners.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written
above.
| National Education Loan Network, Inc. | Union Financial Services, Inc. | |||||
By:
|
/s/ Xxxxxxx X. Xxxx | By: | /s/ Xxxxxxx X. Xxxxxx | |||
Its:
|
Its: | |||||
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