EXHIBIT 99.3
SETTLEMENT AGREEMENT
Xxxxxx X. Xxxxxxx, Xx. ("Xxxxxxx") and Xxxxxxx Investment Corporation
("KIC") (collectively "Xxxxxxx/KIC") and WorldCom, Inc. ("WorldCom" or the
"Company") enter into this Settlement Agreement as of October 27, 2002,
reflecting the mutual settlement of certain potential claims relating to
Xxxxxxx'x compensation and to certain prior use of a specific aircraft owned
by WorldCom/MCI, a 1977 Dassault Falcon 20-F (the "Aircraft").
Aircraft Usage Under a lease agreement dated as of June 15, 2001 (the
Fee "Lease"), WorldCom and KIC agreed to lease the Aircraft to
KIC for its use at a rental of $400 per hour with certain
provisioning. A copy of the Lease is attached hereto. KIC
used the Aircraft during the period April 30, 2001, through
June 15, 2002, and returned the Aircraft to WorldCom on the
latter date. To avoid possible litigation and claims
regarding the charge for Xxxxxxx/KIC's use of the Aircraft
and certain other matters, WorldCom and Xxxxxxx/KIC have
agreed to a usage fee for the Aircraft of a total of $3,000
per hour, for a total usage fee during the period of KIC's
101.5 hours of use of the Aircraft, equal to $304,500.00 (the
"Usage Fee"). (KIC has previously tendered to the Company
payment by check at the stated Lease rental rate of $400 per
hour, which check WorldCom did not negotiate, and which may
hereafter be voided by KIC.) Xxxxxxx/KIC assert that the
terms of the Lease were fair to the Company and commercially
reasonable and that the Usage Fee provided herein exceeds
what was fair and reasonable. In order, however, to remove
controversy and to settle any claims concerning the
disclosure and terms of the Lease and Xxxxxxx/KIC's usage of
the Aircraft and the valuation thereof, Xxxxxxx has proposed
and the Company has accepted his payment of the Usage Fee,
less the Offset defined below.
Offset WorldCom and Xxxxxxx/KIC agree that the Usage Fee shall be
reduced by an offset that represents the sum of (i) certain
maintenance and other expenses Xxxxxxx/KIC have previously
paid or incurred with respect to the operation of the
Aircraft and for which, under the Lease, KIC was entitled to
reimbursement from WorldCom but has not been so reimbursed,
and (ii) the total amount of any unpaid director's fees or
other compensation or benefits owed Xxxxxxx by WorldCom (the
"Offset"). The agreed amount of the Offset is $147,940.26.
WorldCom has reviewed the documentation of the Offset and its
own records and agrees to the amount of the Offset.
Xxxxxxx/KIC agree that they will pay to the order of WorldCom
in readily available funds the net amount under this
paragraph $156,559.74 no later than November 7, 2002. The
parties agree that the Usage Fee and Offset, the limited
releases, and the covenants and provisions herein are full
and adequate consideration for their respective releases.
Limited Release
of WorldCom's
Claims WorldCom, for itself, its subsidiaries, any related entities,
including parent, divisions, subsidiaries, or affiliates, and
their present, former, and future employees, officers,
directors and counsel (collectively, "WorldCom and Its
Affiliates"), as a free and voluntary act, releases and
discharges Xxxxxxx Investment Corporation, Xxxxxx X. Xxxxxxx,
Xx., their subsidiaries, any related entities, including
parent, divisions, subsidiaries, or affiliates, and their
present, former, and future employees, officers, directors
and counsel (collectively, "Xxxxxxx/KIC and Their
Affiliates") from any and all actual or potential debts,
obligations, demands, claims, judgments or causes of action of
any kind whatsoever arising up to the date of this release,
whether now known or unknown, with respect to any
compensation or reimbursement for expenses owed or arguably
owed WorldCom and its subsidiaries by Xxxxxxx/KIC and Their
Affiliates that relates to disclosure of the fact or use of
the Aircraft, to the terms of Xxxxxxx'x/KIC's use and lease
of the Aircraft, or to Xxxxxxx/KIC's use and lease of the
Aircraft from April 30, 2001, through June 15, 2002.
Limited Release Xxxxxxx/KIC and Their Affiliates, as a free and voluntary act,
of Xxxxxxx/KIC release and discharge WorldCom and Its Affiliates, and Xxxxxxx
Claims X. Xxxxxxx, personally, from any and all actual or potential
debts, obligations, demands, claims, judgments or causes of
action of any kind whatsoever arising up to the date of this
release, whether now known or unknown, with respect to any
compensation or benefits owed or arguably owed Xxxxxxx or his
immediate family from WorldCom and Its Affiliates, and
Xxxxxxx X. Xxxxxxx, personally, for Xxxxxxx'x service on the
WorldCom Board of Directors (the "Board"), or in any other
capacity for WorldCom and Its Affiliates during Xxxxxxx'x
service on the Board (whether due before, on or after the
date of this release), and with respect to any entitlement of
Xxxxxxx or KIC to compensation or reimbursement for expenses
that relates to disclosure of the fact or use of the
Aircraft, to the terms of Xxxxxxx'x/KIC's use and lease of
the Aircraft, or to Xxxxxxx/KIC's use and lease of the
Aircraft from April 30, 2001, through June 15, 2002.
Indemnification To avoid any doubt about the effect of this Agreement,
WorldCom agrees that Xxxxxxx/KIC and Their Affiliates are not
releasing any claims they may have for indemnification under
state or other law or the charter, articles, or by-laws of
WorldCom and its affiliated companies with respect to
Xxxxxxx'x service as a WorldCom director, or under any
insurance policy providing directors' and officers' coverage
for any lawsuit or claim relating to the period when Xxxxxxx
was a director of WorldCom, and Xxxxxxx/KIC and Their
Affiliates agree that WorldCom and Its Affiliates are not
releasing any claims or defenses they may have to deny such
indemnification or resist such coverage.
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No Reliance Except as written into this Settlement Agreement, neither
Xxxxxxx/KIC nor WorldCom is relying or has relied upon any
statements, representations, warranties, or other promises,
express or implied, oral or written, as to fact or as to law,
made by the other party, or any other person, including,
without limitation, any attorney or agent of either party, or
upon any consideration of any form received or to be received
by any party from any other person, including, without
limitation, any attorney or agent of a party.
Settlement The parties have reached this Agreement and releases to
settle only claims and disputes relating to the terms of
payment for the use and lease, and relating to the use and
lease by Xxxxxxx/KIC of the Aircraft from April 30, 2001,
through June 15, 2002, relating to any issues relating to
disclosure of the fact or terms of the such use and lease,
and relating to any claims Xxxxxxx/KIC might have to
compensation from WorldCom and its affiliates. Neither this
Settlement Agreement, nor any other document or written or
oral statement prepared or made in connection with this
Agreement, nor any discussion of the matters referred to in
this Agreement, nor any action or payment under this
Agreement, constitutes, or should be deemed to constitute:
(A) an admission of law or fact or an admission of any
liability or wrongdoing by Xxxxxxx/KIC or WorldCom with
respect to any claims, unasserted claims, or demands relating
to or arising out of or in connection with any matter
whatsoever; or (B) evidence of any matter whatsoever, except
for the agreement expressly set forth in this Settlement
Agreement.
Binding This Agreement binds any and all successors and assigns of
Effect WorldCom and Its Affiliates (including any entity into which
it is reorganized) and the heirs, beneficiaries, successor and
assigns of Xxxxxxx/KIC and Their Affiliates.
Governing Law The laws of the State of Georgia (other than its conflict of
laws provisions) govern this Agreement.
Entire This is the entire agreement between (i) Xxxxxxx/KIC and (ii)
Agreement WorldCom and the other parties released by the releases, with
respect to matters explicitly described in this Agreement. No
promises have been made between the parties other than those
in this Settlement Agreement with respect to matters covered
by it. Excepting the subject matter of the Indemnification
provision of this Agreement, any other prior agreements, oral
or written, between Xxxxxxx/KIC and WorldCom or such other
parties with respect to disclosure of the fact or use, the
terms of Xxxxxxx'x/KIC's use and lease, Xxxxxxx/KIC's use and
lease of the Aircraft from April 30, 2001, through June 15,
2002, and the valuation thereof, or compensation to
Xxxxxxx/KIC from WorldCom are hereby terminated and shall
have no further force or effect.
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Authority WorldCom and Xxxxxxx/KIC represent and warrant that Xxxxxxx
to Agree and Xxxxxxxx and Xxxxxx X. Xxxxxxx, Xx. have full and specific
Execute authority to state each party's agreement to the terms hereof
and to execute this Settlement Agreement on behalf of each.
[Signatures on Page Following]
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Both parties acknowledge that they have read this Settlement Agreement,
understand it, and are voluntarily entering into it.
WorldCom, Inc.
________________________ By: _____________________________
Date Signed Xxxxxxx X. Xxxxxxxx
Executive Vice President
By the Special Committee of the
Board of Directors of WorldCom,
Inc.
________________________ By: _____________________________
Date Signed Xxxxxxxx xxX. Xxxxxxxxxx
Xxxxxx X. Xxxxxxx, Xx., and
Xxxxxxx Investment
Corporation
________________________ By: ______________________________
Date Signed Xxxxxx X. Xxxxxxx, Xx.
Witness:
________________________ Signed:_____________________________
Date Signed
Name: _____________________________
Attachment:
Lease between MCI Communications Corp. and Xxxxxxx Investment Corporation,
dated as of June 15, 2001.
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ATTACHMENT TO
EXHIBIT 99.3
AIRCRAFT LEASE AGREEMENT
UNITED STATES OF AMERICA
This agreement (hereinafter "Lease"), dated as of June 15, 2001, between MCI
Communications Corp., doing business at Dulles, Virginia (hereinafter "Lessor")
and Xxxxxxx Investment Corporation, a/an ________________ Corporation, doing
business at Atlanta, Georgia (hereinafter "Lessee").
W I T N E S S E T H :
WHEREAS, Lessor is the owner of a certain aircraft, which it desires to lease;
and
WHEREAS, Lessee desires to lease the aircraft from Lessor.
NOW, THEREFORE, in consideration of the mutual covenants set forth herein, the
parties hereto hereby agree as follows:
1. DEFINITIONS:
The following terms shall have the following meaning for all purposes of
this Lease.
"Aircraft" shall mean one (1) 1977 Falcon 20F-5 aircraft, Serial Number
355, Registration Number N803WC (hereinafter "Aircraft"), together with all
engines, appliances, parts, instruments, appurtenances, accessories,
furnishings, or other equipment of whatever nature from time to time
installed on or attached to Aircraft, more fully described in the attached
Exhibit "A" which is made a part hereof.
2. DEMISE.
Lessor hereby leases Aircraft to Lessee upon the terms, provisions, and
conditions set forth in this Lease.
3. TERM.
The term of this Lease shall be for 365 (days) unless an extension is
mutually agreed to in writing by Lessee and Lessor. This Lease shall
commence at 12:01 a.m. Eastern Daylight Time on June 15, 2001, and
shall terminate at 11:59 p.m. Eastern Daylight Time on June 15, 2002.
4 DEPOSIT.
Lessee shall pay Lessor a deposit equal to one month's rent which is One
and No/100 Dollars ($1.00). The deposit shall be returned to Lessee upon
termination of this Lease, less any amounts owing from Lessee to Lessor.
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5. RENT.
Lessee shall pay Lessor as rental for the use of Aircraft the sum of One
and No/100 Dollars ($1.00) per 30-day period of this Lease. Such payments
are payable in advance on the commencement date hereof and each 30-day
anniversary thereafter. In addition, Lessee shall pay to Lessor the sum
of Four Hundred and No/100 Dollars ($400) per flight hour for engine and
maintenance reserves. Such additional payments are to be paid at the end
of each 30-day period of this Lease or upon termination of this Lease,
whichever is sooner.
6. PAYMENT.
All payments herein provided for shall be made in United States Dollars at
such places Lessor shall direct. Lessee's obligation to pay rental
hereunder shall be absolute during the Lease term irrespective of any
contingency whatsoever, including total loss of Aircraft, or damages to or
repairs of Aircraft, which would render it unserviceable during any
portion of the Lease term.
7. PAYMENT OF SUMS DUE.
Lessee shall make all payments timely and in full in immediately available
funds without prior demand, without rights of offset or counter claims,
and free and clear of all deductions and withholdings. On any delinquent
payments, Lessee shall pay to Lessor interest thereupon at a rate of One
Percent (1%) per month.
8. DELIVERY, CARE, AND RETURN OF AIRCRAFT.
Aircraft shall be delivered to Lessee at Peachtree Dekalb Airport, United
States of America, or other place as mutually agreed to by Lessor and
Lessee. Lessee expressly assumes all risk of loss or damage to Aircraft
after delivery. It is agreed that at the time of delivery, Lessee shall
accept Aircraft by executing the Delivery And Acceptance Receipt which is
attached as Exhibit "B," and made a part hereof. The Delivery And
Acceptance Receipt shall note the total operating time and cycles on
Aircraft and its engines and the quantity of fuel and oil on board. Upon
the execution of Exhibit "B" by Lessee, it shall be conclusively presumed
between the parties that Lessee has fully inspected Aircraft and
acknowledges Aircraft is in good condition and repair, and that Lessee is
satisfied with and has accepted Aircraft in such condition and repair.
Upon termination of Lease, Lessee shall return Aircraft to Lessor at
Jackson, Mississippi, or at any other place in the United States of
America mutually agreed to by both parties, identically equipped, in like
appearance and in like condition as when delivered, reasonable wear and
tear excepted, and shall indemnify Lessor against any claims for loss or
damage for which Lessee is responsible pursuant to this Lease occurring
prior to the actual physical re-delivery of Aircraft to Lessor. At the
time of such return, Aircraft shall be free and clear of all liens,
encumbrances, and rights of others (except the rights of Lessor and liens
and encumbrances hereafter created by Lessor), including all engine, parts,
appliances, instruments, etc., which were included at the time of delivery
to Lessee.
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Upon return of Aircraft at the end of the Lease term, or as otherwise
provided in this Lease, each fuel tank and oil tank shall contain the same
quantity of fuel and oil as was contained therein at the time of delivery.
In the case of differences in any such quantities, an appropriate
adjustment will be made by payment at the then-current price of fuel or
oil, as the case may be.
A. REJECTION OF AIRCRAFT BY LESSEE.
If Lessee rejects Aircraft prior to delivery due to maintenance
defect which would make Aircraft unairworthy in accordance with its
maintenance program or United States Federal Aviation Administration
(hereinafter "FAA") directives, no rental shall be due from Lessee
to Lessor. It is expressly agreed, however, that Lessor shall not be
liable to Lessee in any way for any damage from loss of profit or
loss of use of Aircraft either before or after delivery to Lessee.
B. MODIFICATION OF AIRCRAFT.
There shall be no modifications of Aircraft, except those mandatory
inspections, modifications, or repairs required by the FAA or any other
government authority properly having justification.
C. MAINTENANCE OF AIRCRAFT.
Lessee shall accomplish and pay for any repairs or maintenance of
Aircraft that shall be required during the term of this Lease. In this
context, the term repairs shall include all necessary service, repairs,
tests, and maintenance of Aircraft as appropriate to maintain Aircraft
in accordance with FAA regulations as amended from time to time.
Lessee agrees to keep Aircraft in good operating condition, ordinary
wear and tear only excepted, and in accordance with the maintenance
standards and practices set forth in the FAA-approved maintenance
program and those standards and practices generally observed in the
operation and maintenance of similar aircraft, including without
limitation such action as may be necessary to comply with all mandatory
requirements of the manufacturer, the engine manufacturer, and the
manufacturer of any major component parts of Aircraft and to enable the
airworthiness certificate of Aircraft to be maintained at all times
under the FAA, Act of 1958, as amended, and to meet all requirements of
law. Lessee shall maintain or cause to be maintained all records, logs,
and other materials required by the FAA and the manufacturer, the
engine manufacturer, and the manufacturer of any major component part
of Aircraft to be maintained in respect to Aircraft and said records,
logs, and other materials shall be maintained in a current, accurate,
and complete manner and shall be available at all reasonable times for
examination and inspection by Lessor, and Lessee shall, at the end of
the term of this Lease, deliver all records to Lessor. Lessee also
agrees to use its best efforts promptly to furnish Lessor such
information as shall be required to enable Lessor to file all reports
required by any government authority relating to Lessor's ownership of
Aircraft. Lessor shall have no expense or liability for repair or
maintenance delays and shall not be liable to Lessee for any
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damage from loss of profit or loss of use of Aircraft either before or
after delivery of Aircraft to Lessee.
D. MAINTENANCE REIMBURSEMENT.
Lessor shall reimburse Lessee promptly by check for all reasonable
costs of repairs and maintenance to Aircraft including the cost
associated with repairs and maintenance performed by any mechanic
employed by Lessee during the term of this Lease which are incurred
as required by Paragraph 8(C), except such repairs as are
necessitated by Lessee's improper use of Aircraft.
E. COMPONENT REPAIR/REPLACEMENT.
In the event a component shall require repair or replacement costing
more than Ten Thousand and No/100 Dollars ($10,000), Lessee shall
first inquire if Lessor can provide a serviceable replacement
component at less cost within a reasonable period of time, and if
so, shall use such serviceable component. If Lessor does not
respond within a reasonable period of time, Lessee shall have the
right to make the repair or replacement and shall be reimbursed by
Lessor for the full cost of such repair or replacement.
9. ASSIGNMENT AND SUBLEASE.
Lessee shall not be entitled, without the prior written consent of
Lessor, to assign this Lease or any interest in Aircraft, its engines,
or any component thereof to any other party. Also, Lessee shall not
be entitled, without the prior written consent of Lessor, to sublease
Aircraft, its engines, or any component thereof to any other party.
10. FUEL, OIL, AND MISCELLANEOUS EXPENSES.
Lessee shall be solely responsible for and shall pay directly to the
supplier for fuel, lubricating oil, landing fees, and for other
expenses not involving maintenance, associated directly with operation
of Aircraft. Lessee shall, at its sole expense, maintain the interior
and exterior of Aircraft in like appearance and in the condition as
when delivered, reasonable wear and tear excepted, throughout the
term of this Lease commencing with the time of delivery of Aircraft
from Lessor to Lessee.
11. REPRESENTATIONS, WARRANTIES, AND COVENANTS OF LESSOR.
Lessor represents and warrants that at the time Aircraft becomes
subject to this Lease, Lessor shall have good title thereto and that
Lessor has the lawful right to lease Aircraft in accordance with the
terms hereof to Lessee. Aircraft shall at all times remain and be the
sole and exclusive property of Lessor. Lessee shall have no rights to
Aircraft other than the right to use same upon the conditions
herein contained.
So long as no default shall have occurred and be continuing, neither
Lessor nor any person claiming by, through or under Lessor shall take
any affirmative act which interferes with the peaceful and quiet
occupation and enjoyment of Aircraft by Lessee.
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THE WARRANTY SET FORTH IN THIS SECTION IS EXCLUSIVE AND IN LIEU OF ALL
OTHER WARRANTIES OF LESSOR WHETHER WRITTEN, ORAL, OR IMPLIED, AND
LESSOR SHALL NOT, BY VIRTUE OF HAVING LEASED AIRCRAFT UNDER THIS
LEASE, BE DEEMED TO HAVE MADE ANY REPRESENTATION OR WARRANTY (EXCEPT
ANY EXPRESS WARRANTY OF TITLE SET FORTH HEREIN), AND LESSEE HEREBY
WAIVES ALL OTHER WARRANTIES, GUARANTEES, OBLIGATIONS, LIABILITIES, AND
RIGHTS, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, INCLUDING BUT
NOT LIMITED TO THE IMPLIED WARRANTY OF MERCHANTABILITY, ANY IMPLIED
WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING
OR USAGE OF TRADE, ANY IMPLIED WARRANTY OF FITNESS FOR SPECIAL PURPOSE,
AND ANY OBLIGATION OR LIABILITY OF LESSOR ARISING FROM TORT, OR FOR
LOSS OF USE, REVENUE OR PROFIT, OR FOR INCIDENTAL OR CONSEQUENTIAL
DAMAGES. AIRCRAFT IS BEING LEASED TO LESSEE IN "AS IS" CONDITION AND
HAS BEEN INSPECTED BY LESSEE, BUT NOTHING HEREIN CONTAINED SHALL BE
DEEMED TO LIMIT LESSEE FROM AVAILING ITSELF OF ANY WARRANTIES,
COVENANTS AND REPRESENTATIONS OF ANY MANUFACTURER OR FROM ANY OF THE
PROVISIONS OF ANY MAINTENANCE CONTRACT APPLICABLE TO AIRCRAFT, THE
ENGINES OR ANY COMPONENTS THEREOF.
12. REPRESENTATIONS OF LESSEE.
Lessee covenants and agrees to comply with all the laws, rules, orders,
ordinances, and regulations of the United States of America, its
territories or possessions, and of any other nation, country, state,
municipality, or any duly constituted authority regarding the use,
operation, or possession of any aircraft and will indemnify Lessor
from any and all fines, forfeitures, or penalties arising out of any
violation thereof. Lessee further agrees not to use or operate
Aircraft in violation of any such law, rule, ordinance, order or
regulation.
Lessee shall be liable to Lessor for the loss of Aircraft,
or any parts thereof, caused by the confiscation or impoundment by any
public authority. Upon any such confiscation or impoundment, all
rentals remaining due hereunder shall be legally due and payable, in
addition to other remedies of Lessor to enforce rights and claims
arising by reason of such confiscation. Additionally, if Aircraft
is not serviceable for any reason, Lessee shall continue to pay the
rent provided herein for the term of the Lease, and until Aircraft is
re-delivered to Lessor under the provisions hereof.
In the event of any damage to Aircraft or its components, Lessee will
immediately notify Lessor of such damage by facsimile, Lessor's
facsimile number being (000) 000-0000.
This Lease has been duly entered into and delivered and constitutes the
legal, valid, and binding obligation of Lessee enforceable against
Lessee in accordance with the terms hereof.
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13. TAXES.
Lessee shall pay, before delinquency, all taxes including but not
limited to all operating taxes, fees, charges, gasoline sales tax,
state use taxes, and other taxes and fees not expressly enumerated
herein, assessed solely to Lessee's use of Aircraft under this Lease
and shall, upon request, submit to Lessor receipted tax bills
evidencing payment of same.
14. FLIGHT CREW.
In accordance with applicable FARs, Lessee, at its sole expense, shall
locate and retain (either through direct employment, or contracting
with an independent contractor for flight services) a duly-qualified
flight crew (the "Flight Crew"), and the Flight Crew will exercise all
of its duties and responsibilities in regard to the safety of each
flight conducted hereunder. The identity of the Pilot-In-Command, and
other crew members, shall be acceptable to the insurer of Aircraft.
THE PARTIES EXPRESSLY AGREE THAT LESSEE SHALL AT ALL TIMES, WHILE
AIRCRAFT IS IN ITS POSSESSION DURING THE TERM, MAINTAIN OPERATIONAL
CONTROL OF AIRCRAFT, AND THAT THE INTENT OF THE PARTIES IS THAT THIS
LEASE CONSTITUTES A "DRY" OPERATING LEASE.
The parties further expressly agree that the Flight Crew, in its sole
discretion, may terminate any flight, refuse to commence any flight,
or take any other flight-related action, which in the judgment of the
pilot-in-command, as such term is defined by the FAA (the
"Pilot-In-Command"), is necessitated by considerations of safety.
The Pilot-In-Command shall have final and complete authority to
postpone or cancel any flight, for any reason or condition, which, in
his or her judgment, would compromise the safety of the flight. No
such action of the Pilot-In-Command shall create or support any
liability for loss, injury, damage, or delay to Lessor. The Parties
further agree that Lessor shall not be liable for delay, or failure to
furnish Aircraft 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,
or acts of God.
15. INDEMNIFICATION.
A. Lessee covenants and agrees to be responsible and liable to
Lessor and indemnify Lessor against, any and all damage to
Aircraft and its components which occurs in any manner until
re-delivery of Aircraft to Lessor, and to indemnify and save
Lessor harmless from and against all claims, costs, expenses,
damages, and liabilities, including personal injury, death, or
property damage claims arising or in any manner occasioned by the
operation or use of Aircraft, during the term of this Lease and
until re-delivery of Aircraft to Lessor; and Lessee further
agrees to indemnify Lessor for all attorney's fees and all other
costs and expenses Lessor may incur in defending said claims, or
in asserting and pursuing any of Lessor's rights hereunder.
B. In the event of assertion by any government, nation, county,
person, entity, or authority or any claim, lien, penalty, seizure,
or forfeiture as to Aircraft caused by
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Lessee, whether groundless or not, arising out of an occurrence
or event during the Lease term, Lessee shall at its sole expense:
(i) take immediate steps to remove Aircraft from such impediment
and cause the same to be removed; and
(ii) immediately notify Lessor of the assertion of such claim,
etc., and invite Lessor to participate in the removal
proceedings and Lessor may so participate, but at Lessee's
sole expense.
16. INSURANCE.
A. INSURANCE.
Lessee shall place in effect insurance coverages covering Aircraft
to Lessor's satisfaction, and Lessee will continue to keep such
insurance throughout and during the term of this Lease. Copies of
the policies evidencing such coverages shall be attached hereto as
composite Exhibit "C" and made a part hereof. Lessee will have
said policies endorsed to include Lessor and Lessor's bank as an
additionally named insured and loss payee thereunder, including
loss from confiscation or breach of warranty. Insurance shall
provide at least thirty (30) days notice to Lessor and Lessor's
Bank prior to cancellation. Lessee shall pay for such coverages.
Lessee shall be permitted to obtain and provide additional
insurance coverage for its use of Aircraft at its own expense and
Lessor will be named as an additionally insured under the
policy(ies) obtained by Lessee. Copy(ies) of the additional
insurance policy(ies) shall be furnished to Lessor.
B. OPERATION AND USE OF AIRCRAFT IN ACCORDANCE WITH INSURANCE POLICY.
Lessee agrees not to fly Aircraft or suffer or permit Aircraft to
be flown or located in any area excluded from coverage from any
insurance policy required to be maintained hereunder or in any
manner not comply with the conditions thereof; and Lessee further
agrees it will not fly Aircraft or permit Aircraft to be flown or
located in any recognized area of hostilities unless fully covered
by war/risk insurance or unless Aircraft is operated or used under
contract with the United States Government under which contract the
government assumes liability for any damage, loss, destruction, or
failure to return possession of Aircraft at the end of the term
of such contract or for injury to persons or damage to property of
others.
C. PROCEEDS FROM LOSS.
All proceeds from insurance required to be maintained hereunder
which are received as a result of an insured loss shall be paid to
Lessor who shall at its election restore Aircraft to serviceable
condition if feasible. In the event, Lessee shall be liable to
Lessor for the payment of any sums deductible from the amount of
the loss(es) under said insurance policy(ies).
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D. LESSEE'S NOTICE TO UNDERWRITER(S).
Lessee shall in any event advise the insurance underwriter(s) of
the purposes and the use of Aircraft and will keep the
underwriter(s) advised as to any change in those purposes.
17. USE OF AIRCRAFT.
Lessee agrees Aircraft will not be used in violation of any law or any
rule, regulation, or order of any government or governmental authority
having jurisdiction, or any violation of any airworthiness
certificate, license, or registration relating to Aircraft issued by
any such authority. Lessee also agrees Aircraft will not be operated
directly or indirectly in the common carriage of passengers or freight
for hire.
18. JUSTIFICATION OF DISPUTE.
In the event of any disputes or controversies which may arise between
the parties under the terms hereof, it is agreed that such disputes or
controversies will be resolved under the laws of the state of
Georgia, or in the case of the applicability of the laws of the United
States of America, under those statutes and laws; and Lessee hereby
consents and submits itself (himself) to the jurisdiction of the
courts of the state of Georgia, and to the United States district
court for the southern district of Georgia for the adjudication and
resolution of such disputes, and appoints the Secretary of State of
Georgia Lessee's agent for service of complaints and summons.
19. SALE OF AIRCRAFT TO THIRD PARTY(IES) BY LESSOR.
Lessor and Lessee agree that should Lessor sell Aircraft to a third
party within the Lease term, Lessor shall give Lessee fifteen (15)
days' written notice of lease termination; and Lessor shall use its
best efforts to provide Lessee a comparable aircraft at the same terms
as this Lease. Acceptance of any substitute aircraft shall be solely
at Lessee's option.
20. NOTICES.
All notices to Lessor shall be addressed to Lessor at:
00000 Xxxxxxx Xxxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Telefax: _______________
And to Lessee at:
0000 Xxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Telefax: (000) 000-0000
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21. DAMAGE OR DESTRUCTION OF AIRCRAFT.
In the event Aircraft shall be damaged beyond economic repair as
determined by Lessor and the appropriate insurance carrier, then this
Lease shall terminate and possession of Aircraft shall be given to
Lessor at the then location of Aircraft and all insurance proceeds
relating to Aircraft hull available by reason of such damage shall be
payable to Lessor. In the event Aircraft shall be damaged, through
the fault of Lessee, to the extent it is not usable, while operated or
controlled by Lessee, including ground damage, rent due under this
Lease shall not xxxxx. Payment for any damage or loss to
Aircraft which is not covered by insurance shall be the sole
responsibility of Lessee, and Lessee shall promptly pay Lessor for
such damage or loss as and when occasioned.
22. DEFAULT.
If Lessee shall fail to make any Lease payment or any other payments
hereunder when due or shall fail to comply or threaten not to comply
with any of the other terms of this Lease, Lessor at its election may,
five (5) days after giving written notice of the claimed default,
declare the Lease terminated and re-claim possession of Aircraft
wherever it may be located, without any court order or any other
process of law, and to pursue any other remedy available to Lessor at
law or equity, whereupon, in addition to any amounts owing under the
provisions of the Lease, Lessee shall owe to Lessor all costs and
expenses, including legal fees and expenses which may be incurred by
Lessor, in recovering possession of Aircraft. Lessor's right of
repossession is to be in addition to every other power and remedy
specifically so given or hereafter existing at law or in equity.
23. TERMINATION FOR BANKRUPTCY OR INSOLVENCY.
Lessor shall have the right to terminate this Lease, without notice to
Lessee, if Lessee shall file a voluntary petition in bankruptcy, shall
make no assignment for the benefit of creditors, or shall be
voluntarily or involuntarily adjudicated as bankrupt by any court of
competent jurisdiction; or if voluntary or involuntary proceedings for
reorganization are filed by or against Lessee, or if a receiver
shall be appointed for Lessee's business and is not discharged within
thirty (30) days thereafter. If Lessor shall elect to terminate this
Lease by reason of any of the events herein described, the entire
unpaid rental shall become immediately due and payable. Lessee
acknowledges it has no equity in Aircraft.
24. SUCCESSORS.
This Lease shall inure to the benefit and shall be binding upon each
of the parties hereto and their respective successors and assigns.
25. NO CONTINUING WAIVER.
Waiver by Lessor of performance of any covenant or condition required
hereby shall not hereafter preclude Lessor from demanding, without
notice to Lessee, of performance according to the terms hereof.
9
26. HOLDING OVER.
Unless approved in writing by Lessor, any holding over of Aircraft by
Lessee beyond the term of this Lease shall be deemed not consented to
by Lessor; but should such holding over take place, the same shall be
subject to all the terms and conditions of this Lease except that in
addition Lessee shall pay to Lessor for each day of such hold over the
sum of Five Thousand and No/100 Dollars ($5,000) per day as
additional lease rent, in addition to the rental provided in
Paragraph 5, supra, which charge is deemed by parties not to be a
penalty but is instead deemed by them to represent the reasonable and
likely actual damage occasioned to Lessor's interest by reason of such
holding over and which also represents the parties' attempt to
ascertain a reasonable amount of additional liquidated damages in such
event.
27. RIGHT TO INSPECT.
Lessor shall have the right to inspect Aircraft at all reasonable
times upon reasonable notice to Lessee to ascertain the condition and
satisfy Lessor that Aircraft is being properly repaired and maintained
in accordance with the requirements of this Lease. The cost of the
inspection(s) shall be paid by Lessee if Aircraft or any parts thereof
are manifestly not in the condition required by this Lease, but shall
otherwise be paid by Lessor. All repairs which shall be shown by the
inspection to be required shall be performed to the satisfaction of
Lessor or its representative at Lessee's sole expense.
28. TIME IS OF THE ESSENCE.
Time is the essence of this Lease and of every provision herein
contained.
29. APPLICABLE LAW AND VARIANCES.
This Lease is complete and an exclusive statement of the terms and
conditions of the agreement between the parties hereto. This Lease
shall be construed and interpreted in accordance with the laws of the
state of Georgia as provided in Paragraph 17, supra. Neither this
Lease nor any term or condition hereof, shall be varied, contradicted,
explained or supplemented by an oral agreement or representation,
by course of dealing or performance or by usage of trade, or amendment
except by a document in writing duly executed by the parties. Any
provision found herein to be prohibited by law shall be ineffective
to the extent of such prohibition without invalidating the rest of this
Lease.
30. TRUTH IN LEASING.
TRUTH IN LEASING STATEMENT UNDER SECTION 91.23 OF THE FARs.
WITHIN THE TWELVE (12) MONTH PERIOD PRECEDING THE DATE OF THIS
AGREEMENT, THE FALCON 20 F-5 (Make Model) AIRCRAFT, N803WC, HAS BEEN
INSPECTED AND MAINTAINED AND IN ACCORDANCE WITH THE FOLLOWING
PROVISIONS OF FAR:
10
91.409(f)(3): A current inspection program recommended by the
manufacturer. THE PARTIES HERETO CERTIFY THAT DURING THE TERM OF THIS
AGREEMENT, AND FOR OPERATIONS CONDUCTED HEREUNDER, AIRCRAFT WILL BE
MAINTAINED AND INSPECTED IN ACCORDANCE WITH THE PROVISIONS OF FAR
91.409(f)(1)(2)(3)(4).
LESSEE ACKNOWLEDGES THAT WHEN IT OPERATES AIRCRAFT UNDER THIS
AGREEMENT, IT SHALL BE KNOWN AS, CONSIDERED, AND, IN FACT WILL BE, THE
OPERATOR OF SUCH AIRCRAFT. EACH PARTY HERETO CERTIFIES THAT IT
UNDERSTANDS THE EXTENT OF ITS RESPONSIBILITIES, SET FORTH HEREIN, FOR
COMPLIANCE WITH APPLICABLE FEDERAL AVIATION REGULATIONS.
AN EXPLANATION OF FACTORS, BEARING ON OPERATIONAL CONTROL AND
PERTINENT FEDERAL AVIATION REGULATIONS, CAN BE OBTAINED FROM THE
NEAREST FEDERAL AVIATION ADMINISTRATION FLIGHT STANDARDS DISTRICT
OFFICE, GENERAL AVIATION DISTRICT OFFICE, OR AIR CARRIER DISTRICT
OFFICE.
THE PARTIES HERETO CERTIFY THAT A TRUE COPY OF THIS AGREEMENT SHALL BE
CARRIED ON AIRCRAFT AT ALL TIMES, AND SHALL BE MADE AVAILABLE FOR
INSPECTION UPON REQUEST BY AN APPROPRIATELY CONSTITUTED IDENTIFIED
REPRESENTATIVE OF THE ADMINISTRATOR OF THE FAA.
IN WITNESS WHEREOF, the parties hereto have hereby executed this Lease on the
date first above written.
MCI Communications Corp. Xxxxxxx Investment Corporation
(Lessor) (Lessee)
By:__________________________ By:_____________________________
Title:_______________________ Title:__________________________
_____________________________ ________________________________
(Signature) (Signature)
_____________________________ ________________________________
(Signature) (Signature)
Notary Public Notary Public
State of ____________________ State of _______________________
My Commission Expires:_______ My Commission Expires:__________
