Sample Business Contracts

 

THIS TIME-SHARING AGREEMENT (this “Agreement”) is made effective as of                                  (the “Effective Date”), by and between KENNEDY AVIATION LLC, a                              limited liability company (“Owner”) and OPENWAVE SYSTEMS INC., a Delaware corporation (“Lessee”) and is made and entered into with reference to the following facts and objectives:

 

 

A.    WHEREAS, Owner is the owner of that certain aircraft identified as a                          engines and auxiliary power unit, avionics, equipment, components, accessories, instruments and other items installed in or attached to the airframe, the engines or the auxiliary power unit, together with all spare parts, manuals and log books carried on board and including any replacement part(s) or engine(s) which may be installed on the Aircraft from time to time, and all logs, manuals and other records relating to such Aircraft (collectively, the “Aircraft”); and

 

B.    WHEREAS, Owner has heretofore contracted for a fully qualified flight crew to operate the Aircraft; and

 

C.    WHEREAS, Lessee desires to lease the Aircraft and flight crew from Owner on a time-sharing basis, as defined in Section 91.501(c)(1) of the Federal Aviation Regulations (“FAR”).

 

NOW, THEREFORE, for and in consideration of the mutual promises, covenants and conditions herein set forth, Owner and Lessee agree as follows:

 

1.    LEASE OF AIRCRAFT.    Owner agrees to lease the Aircraft to Lessee pursuant to the provisions of FAR 91.501(c)(1) and to provide a fully qualified flight crew for all operations for the period commencing on the Effective Date of this Agreement and terminating on the date Kevin Kennedy ceases to serve in the capacity of at least Chief Operating Officer of Lessee, or sooner pursuant to Section 18.

2.    LESSEE’S PAYMENT OBLIGATIONS.    Lessee shall pay Owner for each flight conducted under this Agreement an amount equal to the sum of each category of expense set forth below, provided, however, that such cost shall in no event exceed the sum of the following expenses authorized by FAR Part 91.501(d);

 

(a)    Fuel, oil, lubricants, and other additives;

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(b)    Travel expenses of the crew, including food, lodging and ground transportation;

 

(c)    Hangar and tie down costs away from the Aircraft’s base of operation;

 

(d)    Insurance obtained for the specific flight;

 

(e)    Landing fees, airport taxes and similar assessments including, but not limited to IRC Section 4261 and related excise taxes;

 

(f)    Customs, foreign permit, and similar fees directly related to the flight;

 

(g)    In-flight food and beverages;

 

(h)    Passenger ground transportation;

 

(i)    Flight planning and weather contract services; and

 

(j)    An additional charge equal to one hundred percent (100%) of the expenses listed in subsection (a) of this Section.

 

3.    INVOICING FOR FLIGHTS.    Owner shall pay all expenses related to the operation of the Aircraft when incurred, and will provide, or contract with third parties to provide, a monthly invoice to Lessee setting forth the cost of each specific flight through the last day of the month in which any flight or flights for the account of Lessee occur, which costs shall not exceed (a) the sum of actual flight expenses set forth in Section 2 or (b) the amount permitted under FAR 91.501(d); provided, however, that Lessee’s maximum payments under this Agreement and any similar agreement prior to or subsequent to this Agreement (for this Aircraft or another aircraft), collectively, shall not exceed $360,000 per calendar year (pro-rated for any partial year) excluding taxes that Lessee has agreed to pay under Section 4. Lessee shall pay Owner for the total expenses set forth on each such invoice within thirty (30) days of receipt of such invoice. Should Owner receive from Lessee any amounts under this Agreement not otherwise allowed under the applicable FAR provisions, Owner shall refund such amounts to Lessee promptly after discovering such unauthorized payments.

 

4.    TAXES.    The parties acknowledge that reimbursement of all items specified in Section 2, except for subsections (g) and (h) thereof, are subject to the federal excise tax imposed under Internal Revenue Code §4261 (the “Commercial Transportation Tax”). Lessee shall pay to Owner (for payment to the appropriate governmental agency) any Commercial Transportation Tax applicable to flights of the Aircraft conducted hereunder. Lessee shall indemnify Owner for any claims related to the Commercial Transportation Tax to the extent that Owner has paid Lessee the amounts necessary to pay such taxes.

 

5.    REQUEST FOR FLIGHTS BY LESSEE.    Lessee will provide Owner with requests for flight time and proposed flight schedules as far in advance of any given flight as is reasonably possible. Requests for flight time shall be in a form, whether written or oral, mutually convenient to, and agreed upon by the parties. In addition to the proposed schedules and flight

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times, Lessee shall provide at least the following information for each proposed flight at some time prior to scheduled departure as required by the Owner or Owner’s flight crew:

 

(a)    proposed departure point;

 

(b)    destination;

 

(c)    date and time of flight;

 

(d)    the number of anticipated passengers;

 

(e)    the nature and extent of luggage and/or cargo to be carried;

 

(f)    the date and time of return flight, if any; and

 

(g)    any other information concerning the proposed flight that may be pertinent or required by Owner or Owner’s flight crew.

 

6.    SCHEDULING FLIGHTS.    Owner shall have final authority over the scheduling of the Aircraft, provided, however, that Owner will use its best efforts to accommodate Lessee’s needs and to avoid conflicts in scheduling.

 

7.    MAINTENANCE OF AIRCRAFT.    Owner shall be solely responsible for securing maintenance, preventive maintenance and all required or otherwise necessary inspections on the Aircraft, and shall take such requirements into account in scheduling the Aircraft. No period of maintenance, preventative maintenance or inspection shall be delayed or postponed for the purpose of scheduling the Aircraft, unless said maintenance or inspection can be safely conducted at a later time in compliance with all applicable laws and regulations, and within the sound discretion of the pilot in command. The pilot in command shall have final and complete authority to cancel any flight for any reason or condition that in his or her judgment would compromise the safety of the flight.

 

8.    OPERATIONAL CONTROL.    “Operational Control” as defined in 14 C.F.R. Paragraph 1.1 and for the purposes of this Agreement, with respect to a flight, means the exercise of authority over initiating, conducting, or terminating a flight. Owner shall have operational control of the Aircraft, which shall include, without limitation, providing the flight crew, selecting the Pilot-in-Command and all other physical and technical operations of the Aircraft.

 

9.    FLIGHT CREW.    Owner shall employ or contract with others to employ, pay for and provide to Lessee a qualified flight crew for each flight undertaken under this Agreement.

 

10.    SAFETY OF FLIGHTS.    In accordance with applicable FAR, the qualified flight crew provided by Owner will exercise all of its duties and responsibilities in regard to the safety of each flight conducted hereunder. Lessee specifically agrees that the flight crew, in its sole discretion, may terminate any flight, refuse to commence any flight, or take other action that in the considered judgment of the pilot in command is necessitated by considerations of safety. No such action of the pilot in command shall create or support any liability for loss, injury, damage

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or delay to Lessee or any other person. The parties further agree that Owner shall not be liable for delay or failure to furnish the Aircraft and crew 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.

 

11.    TITLE.    Legal title to the Aircraft shall remain in the Owner at all times.

 

12.    HULL AND LIABILITY INSURANCE.    Owner hereby agrees to arrange for and maintain at all time during the term of this Agreement at its expense (a) aircraft liability insurance for the Aircraft in the form and substance and with such insurers as is customary for large corporate aircraft of the type similar to the Aircraft, but in any event with limits of not less than Three Hundred Million Dollars ($300,000,000) single limit and shall cause Lessee to be named as an additional insured thereunder and (b) aircraft hull insurance for the Aircraft with limits of not less than the then current fair market value of the Aircraft. A certificate of insurance (and, upon request, a copy of the insurance policy(ies)) shall be furnished to Lessee’s Treasurer after the execution of this Agreement and prior to flights being undertaken under this Agreement. In addition, Owner shall provide Lessee’s Treasurer with advance written notice prior to amending or terminating any insurance on the Aircraft and shall provide Lessee with a certificate of insurance promptly after entering into any amended or newly issued insurance policy.

 

13.    ADDITIONAL INSURANCE.    Owner will provide such additional insurance coverage as Lessee shall request or require, provided, however, that the cost of such additional insurance, if any, shall be borne by Lessee as set forth in Section 2(d) hereof.

 

14.    REPRESENTATIONS OF OWNER.    Owner represents and warrants that:

 

(a)    It has the absolute and unrestricted right, power and authority to enter into and perform its obligations under this Agreement, and the execution and delivery of this Agreement by Owner have been duly authorized by all necessary action on the part of Owner. This Agreement constitutes a legal, valid and binding obligation of Owner, enforceable in accordance with its terms;

 

(b)    It is a limited liability company duly organized, existing and in good standing under the laws of the State of                          and has all necessary power and authority under applicable law and its organizational documents to own or lease its properties and to carry on its business as presently conducted;

 

(c)    It is a “citizen of the “United States” as defined in Section 40102(a)(15) of Title 49, United States Code.

 

15.    REPRESENTATIONS OF LESSEE.    Lessee represents and warrants that:

 

(a)    It will use the Aircraft for and on account of its own business only, and will not use the Aircraft for the purpose of providing transportation of passengers or cargo in air commerce for compensation or hire;

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(b)    It shall refrain from incurring any mechanics or other lien in connection with inspection, preventative maintenance, maintenance or storage of the Aircraft, whether permissible or impermissible under this Agreement, nor shall there be any attempt by any party hereto to convey, mortgage, assign, lease or any way alienate the Aircraft or create any kind of lien or security interest involving the Aircraft, or do anything or take any action that might mature into such a lien; and

 

(c)    During the term of this Agreement, it will abide by and conform to all such laws, governmental and airport orders, rules and regulations, as shall from time to time be in effect relating in any way to the operation and use of the Aircraft by a time-sharing Lessee.

 

16.    AIRCRAFT BASE.    For purposes of this Agreement, the permanent base of operation of the Aircraft shall be in the                                  Airport in                                 . Notwithstanding the basing provisions contained herein, Lessee acknowledges that Owner will require that the Aircraft be operated in accordance with 18 CCR 1620(b)(4)(A) in order to qualify for exclusion from the California use tax. Lessee hereby acknowledges and agrees that this compliance may cause occasional scheduling disruption or delays.

 

17.    LIMITATION OF LIABILITY; INDEMNIFICATION.    Each party to this Agreement agrees to indemnify and hold harmless the other party and its respective officers, directors, partners, employees, shareholders, and affiliates from any claim, damage, loss, or reasonable expense, including reasonable attorney’s fees resulting from the bodily injury or property damage caused by an occurrence and arising out of the ownership, maintenance, or use of the Aircraft which results from the gross negligence or willful misconduct of such party, provided that neither party shall be liable for any such loss to the extent such loss: (a) is covered by the insurance policies described in Sections 12 and 13; (b) is covered by such policies but the amount of such loss exceeds the policy limits; or (c) consists of expense incurred in connection with any loss covered, in whole or in part, by such policies but such expenses are not payable under such policies.

 

EACH PARTY AGREES THAT (A) THE PROCEEDS OF INSURANCE TO WHICH IT IS ENTITLED, (B) ITS RIGHTS TO INDEMNIFICATION FROM THE OTHER PARTY UNDER THIS SECTION, AND (C) ITS RIGHT TO DIRECT DAMAGES ARISING IN CONTRACT FROM A MATERIAL BREACH OF THE OTHER PARTY’S OBLIGATIONS UNDER THIS AGREEMENT ARE THE SOLE REMEDIES FOR ANY DAMAGE, LOSS, OR EXPENSE ARISING OUT OF THIS AGREEMENT OR THE SERVICES PROVIDED HEREUNDER OR CONTEMPLATED HEREBY. EXCEPT AS SET FORTH IN THIS SECTION, EACH PARTY WAIVES ANY RIGHT TO RECOVER ANY DAMAGE, LOSS, OR EXPENSE ARISING OUT OF THIS AGREEMENT OR THE SERVICES PROVIDED HEREUNDER OR CONTEMPLATED HEREBY. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR OR HAVE ANY DUTY FOR INDEMNIFICATION OR CONTRIBUTION TO THE OTHER PARTY FOR ANY CLAIMED INDIRECT, SPECIAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES, OR FOR ANY DAMAGES CONSISTING OF DAMAGES FOR LOSS OF USE OR DEPRECIATION OF VALUE OF THE AIRCRAFT, LOSS OF PROFIT OR INSURANCE DEDUCTIBLE.

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Each party is aware of the provisions of Civil Code Section 1542, which reads as follows:

 

 

Notwithstanding the provisions of Civil Code Section 1542, each party fully and completely waives its protections.

 

The provisions of this section shall survive the termination or expiration of this Agreement.

 

18.    TERMINATION.    Either party may terminate this Agreement upon five (5) business days’ prior written notice to the other party; provided, however, the Agreement shall automatically terminate on the sale of the Aircraft by Owner.

 

19.    NOTICES

 

If to Lessee:		Openwave Systems Inc.
		1400 Seaport Boulevard
		Redwood City, California 94063
		Attn: Chief Financial Officer
		Facsimile: (650) 480-4295

 

With a copy to the General Counsel of Openwave Systems Inc. at the same address and facsimile number.

 

In the case of notices with respect to changes in insurance covering the Aircraft, notice shall also be provided to the Treasurer of Openwave Systems Inc. at the same address and facsimile number.

 

If to Owner:		Kennedy Aviation LLC
		[Address]
		Facsimile:

 

20.    NO ASSIGNMENT.    Neither this Agreement nor any party’s interest herein shall be assignable to any other party whatsoever. This Agreement shall inure to the benefit of and be binding upon the parties hereto, their heirs, representatives and successors.

 

21.    TRUTH IN LEASING STATEMENT

 

OWNER HAS REVIEWED THE AIRCRAFT’S MAINTENANCE RECORDS AND OPERATION LOGS AND HAS FOUND THAT DURING THE PERIOD BETWEEN

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THE MANUFACTURE OF THE AIRCRAFT AND THE DATE OF THIS AGREEMENT THE AIRCRAFT HAS BEEN MAINTAINED AND INSPECTED IN ACCORDANCE WITH FAR PART 91. OWNER CERTIFIES THAT:

 

THE AIRCRAFT WILL BE MAINTAINED AND INSPECTED UNDER FAR PART 91 FOR OPERATIONS TO BE CONDUCTED UNDER THIS AGREEMENT.

 

OWNER AND LESSEE CERTIFY THAT OWNER AND NOT LESSEE IS RESPONSIBLE FOR OPERATIONAL CONTROL OF THE AIRCRAFT UNDER THIS AGREEMENT THROUGHOUT THE TERM HEREOF. OWNER FURTHER CERTIFIES THAT OWNER UNDERSTANDS ITS RESPONSIBILITY FOR COMPLIANCE WITH APPLICABLE FEDERAL AVIATION REGULATIONS AND COVENANTS THAT IT SHALL COMPLY WITH SUCH REGULATIONS.

 

LESSEE AND OWNER UNDERSTAND THAT AN EXPLANATION OF FACTORS BEARING ON OPERATIONAL CONTROL AND PERTINENT FEDERAL AVIATION REGULATIONS CAN BE OBTAINED FROM THE NEAREST FAA FLIGHT STANDARDS DISTRICT OFFICE.

 

THE “INSTRUCTIONS FOR COMPLIANCE WITH TRUTH IN LEASING REQUIREMENTS” ATTACHED HERETO ARE INCORPORATED HEREIN BY REFERENCE.

 

IN WITNESS WHEREOF, the parties have executed this Time-Sharing Agreement.

 

 

a Delaware corporation,

 

By:
		Alan Black Chief Financial Officer Senior Vice President, Corporate Affairs						Date and Time of Execution

 

 

a                                                                                                                          ,

By:
Name:                                                                                                                 Title:								Date and Time of Execution

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1.    Mail a copy of the lease to the following address via certified mail, return receipt requested, immediately upon execution of the lease (14 C.F.R. 91.23 requires that the copy be sent within twenty-four hours after it is signed):

 

Federal Aviation Administration

Aircraft Registration Branch

ATTN: Technical Section

P. O. Box 25724

Oklahoma City, Oklahoma 73125

 

2.    Telephone the nearest Flight Standards District Office at least forty-eight hours prior to the first flight under this lease.

 

3.    Carry a copy of the lease in the aircraft at all times.

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