Exhibit 10.5

 

NETJETS CHALLENGER 650
N212QS

 

AIRCRAFT TIME SHARING AGREEMENT

 

This Aircraft Time Sharing Agreement (“Agreement”) is effective as of the
4th day of November, 2016 (“Effective Date”), by and among Liberty Citation,
Inc., with an address of 12300 Liberty Boulevard, Englewood, Colorado 80112
(“Owner”), Liberty Denver Arena LLC, with an address of 12300 Liberty Boulevard,
Englewood, Colorado 80112 (the “Sublessor”), and Liberty Expedia Holdings, Inc.,
with an address of 12300 Liberty Boulevard, Englewood, Colorado 80112
(“Lessee”).

 

RECITALS

 

WHEREAS, Owner is the owner of an undivided 12.5% interest in that certain 2016
Bombardier CL-600-2B16 (Challenger 650) aircraft, bearing manufacturer’s serial
number 6066 (the “Aircraft”), currently registered with the Federal Aviation
Administration (“FAA”) as N212QS;

 

WHEREAS, Owner has dry leased the Aircraft to Sublessor pursuant to an Aircraft
Dry Lease dated March 28, 2016 (the “Dry Lease”); and

 

WHEREAS, Owner is a party to a NetJets Fractional Program Agreement dated March
28, 2016 (the “Program Agreement”), with NetJets Sales, Inc. (“Sales”), NetJets
Aviation, Inc. (“NJA”) and NetJets Services, Inc. (“NJS,” and collectively with
NJA and Sales, “NetJets”);

 

WHEREAS, Owner has assigned Exhibit B (the “Management Terms”) and Exhibit C
(the “Exchange Terms”) of the Program Agreement to Sublessor (with the consent
of NetJets); and

 

WHEREAS, Sublessor has signed an “Acknowledgement of Fractional Owner Lessee’s
Operational Control Responsibilities” with NetJets and exercises operational
control over the Aircraft when Sublessor is operating the Aircraft in accordance
with 14 C.F.R. Sections (“FAR”) 91.1003 through 91.1013; and

 

WHEREAS, pursuant to the Management Terms, the Sublessor (as assignee of Owner)
has contracted with NJA to manage the use, maintenance and other matters
pertaining to the operation of the Aircraft, including providing a fully
qualified flight crew to operate the Aircraft; and

 

WHEREAS, pursuant to the Exchange Terms, the Sublessor (as assignee of Owner)
has contracted with NJS with respect to matters related to the joint ownership
and operation of the Aircraft and the inclusion of the Aircraft in the aircraft
exchange program operated by NetJets, and the term “Aircraft,” when used in this
Agreement, shall include the Aircraft and any other

 

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aircraft made available by NetJets to Sublessor (through the Dry Lease with
Owner) under the Management Terms and the Exchange Terms; and

 

WHEREAS, Sublessor desires to lease the Aircraft, including the flight crew
provided to Sublessor pursuant to the Management Terms, to Lessee on a time
sharing basis as defined in Section 91.501(c)(1) of the FAR; and

 

WHEREAS, the use of the Aircraft by Lessee shall at all times be pursuant to and
in full compliance with the requirements of FAR Sections 91.501(b)(6),
91.501(c)(1) and 91.501(d).

 

NOW, THEREFORE, in consideration of the mutual promises and considerations
contained in this Agreement, the parties agree as follows:

 

1.                                      Sublessor agrees to lease the Aircraft
to Lessee on a periodic, non-exclusive basis, and to arrange with NJS through
the Management Terms to provide a fully qualified flight crew for all operations
of the Aircraft, pursuant and subject to the provisions of FAR Section
91.501(c)(1) and the terms of this Agreement, the Management Terms and the
Exchange Terms.  The parties expressly acknowledge and agree that, regardless of
any employment, contractual or other relationship of any kind or nature, at all
times that the Aircraft is operated under this Agreement, Sublessor, as the
party furnishing the Aircraft and flight crew and exercising complete control
over all phases of aircraft operation through the Management Terms, shall be
deemed to have operational control of the Aircraft as such term is defined in
FAR Section 1.1 and 91.1003 through 91.1013.  This Agreement will commence on
the Effective Date and continue until the first anniversary of the Effective
Date.  Thereafter, this Agreement shall be automatically renewed on a
month-to-month basis, unless sooner terminated by either party as hereinafter
provided.  Any party may at any time terminate this Agreement (including during
the initial term) upon 30 days’ prior written notice to the other parties.

 

2.                                      Lessee shall pay Sublessor an amount
equal to (i) 200% of the actual expenses for fuel for each flight conducted
under this Agreement, and (ii) those charges specifically permitted in FAR
Section 91.501(d) that are separately invoiced by NetJets to Owner, Sublessor or
any of their respective affiliates for any flight conducted under this
Agreement, as permitted by FAR Section 91.501(d) and in no event an amount in
excess of such charges (the “Time Sharing Charge”), which are as follows:

 

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

(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;

(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 100% of the
expenses listed in subparagraph (a) of this paragraph.

 

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3.                                      Sublessor will pay (directly or through
the Owner) all expenses related to the operation of the Aircraft when incurred,
and will bill Lessee on a monthly basis as soon as practicable after the last
day of each calendar month for the Time Sharing Charge for any and all flights
for the account of Lessee pursuant to this Agreement during the preceding
month.  Lessee shall pay Sublessor for all flights for the account of Lessee
pursuant to this Agreement within 30 days of receipt of the invoice therefor. 
If requested by Lessee, Sublessor will provide Lessee with a detailed accounting
of the expenses composing the Time Sharing Charge for each flight for the
account of Lessee pursuant to this Agreement.  Without limiting the foregoing,
amounts payable by Lessee to Sublessor under this Agreement may include any
federal excise tax that may be imposed under Internal Revenue Code Section 4261
or any similar excise taxes, if any.

 

4.                                      Lessee will provide Sublessor with
requests for flight time and proposed flight schedules as far in advance of any
given flight as possible, and in any case, at least 24 hours in advance of
Lessee’s planned departure unless Sublessor agrees otherwise.  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 times, Lessee shall provide at least the following information for each
proposed flight at some time prior to scheduled departure as required by the
Sublessor or the flight crew:

 

(a)                                 proposed departure point;

(b)                                 destinations;

(c)                                  date and time of flight;

(d)                                 the number of anticipated passengers;

(e)                                  the identity of each anticipated passenger;

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

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

(h)                                 any other information concerning the
proposed flight that may be pertinent or required by the Sublessor or the flight
crew.

 

5.                                      Sublessor shall have sole and exclusive
authority over the scheduling of the Aircraft, including any limitations on the
number of passengers on any flight; provided, however, that Sublessor will use
commercially reasonable efforts to accommodate Lessee’s needs and to avoid
conflicts in scheduling between Sublessor and Lessee.

 

6.                                      As between Sublessor and Lessee, 
Sublessor shall be solely responsible for causing NetJets to secure maintenance,
preventive maintenance and required or otherwise necessary inspections on the
Aircraft, and shall take such requirements into account in scheduling the
Aircraft.  No period of maintenance, preventive 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 judgment would
compromise the safety of the flight.

 

7.                                      In accordance with applicable FARs, the
qualified flight crew provided pursuant to this Agreement 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,

 

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may terminate any flight, refuse to commence any flight or take other action
which 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 or delay to Lessee or any
other person.  The parties further agree that neither Owner nor the Sublessor
shall be liable for delay or failure to furnish the Aircraft and crew pursuant
to this Agreement when such failure is caused by NetJets, government regulation
or authority, mechanical difficulty, war, civil commotion, strikes or labor
disputes, weather conditions, or acts of God or any other event or circumstance
beyond the reasonable control of Owner or the Sublessor.

 

8.                                      At all times during the term of this
Agreement, Owner or the Sublessor shall cause to be carried and maintained
through NetJets, at the cost and expense of Owner or Sublessor, physical damage
insurance with respect to the Aircraft, third party aircraft liability
insurance, passenger legal liability insurance, property damage liability
insurance, and medical expense insurance in such amounts and on such terms and
conditions as Owner or the Sublessor shall determine in its sole discretion in
amounts no less than those required under the Program Agreement.  Owner or the
Sublessor shall also bear the cost of paying any deductible amount on any policy
of insurance in the event of a claim or loss.

 

9.                                      (a)                                
Except for the gross negligence or willful misconduct of Owner or Sublessor,
Lessee agrees that the proceeds of insurance will be Lessee’s sole recourse
against Owner and the Sublessor with respect to any claims that Lessee may have
under this Agreement.

 

(b)                                 THE PROVISIONS OF THIS SECTION 9 SHALL
SURVIVE INDEFINITELY THE TERMINATION OR EXPIRATION OF THIS AGREEMENT.

 

10.                               Lessee warrants that:

 

(a)                                 It will not use the Aircraft for the purpose
of providing transportation of passengers or cargo in air commerce for
compensation or hire, for any illegal purpose, or in violation of any insurance
policies with respect to the Aircraft;

 

(b)                                 It will refrain from incurring any
mechanics, international interest, prospective international interest or other
lien and shall not attempt to convey, mortgage, assign, lease or grant or obtain
an international interest or prospective international interest or in 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;

 

(c)                                  It will comply with all applicable 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 under this Agreement; and

 

(d)                                 It will not use the Aircraft in any manner
that would result in a violation of any of the requirements of the Management
Terms or the Exchange Terms, as the same may be amended and in effect from
time-to-time, to the extent notified of such requirements from time-to-time.

 

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11.                               Lessee shall not assign this Agreement or its
interest herein to any other person or entity without the prior written consent
of Owner and the Sublessor, which may be granted or denied in their sole
discretion.  Subject to the preceding sentence, this Agreement shall inure to
the benefit of and be binding upon the parties hereto, and their respective
heirs, representatives, successors and assigns, and does not confer any rights
on any other person.

 

12.                               This Agreement constitutes the entire
understanding between the parties with respect to the subject matter hereof and
supersedes any prior understandings and agreements between the parties
respecting such subject matter.  This Agreement may be amended or supplemented
and any provision hereof waived only by a written instrument signed by all
parties.  The failure or delay on the part of any party to insist on strict
performance of any of the terms and conditions of this Agreement or to exercise
any rights or remedies hereunder shall not constitute a waiver of any such
provisions, rights or remedies.  This Agreement may be executed in counterparts,
which shall, singly or in the aggregate, constitute a fully executed and binding
Agreement.  Words of gender used in this Agreement may be read as masculine,
feminine or neuter as required by the context.  Words of number may be read as
singular or plural, as required by the context.  The word “include” and
derivatives of that word are used in this Agreement in an illustrative sense
rather than a limiting sense.  The word “or” is not exclusive and shall be
interpreted as meaning “and/or.”  The words “shall” and “will” are used
interchangeably and are intended to have the same meaning.  Where applicable,
this Agreement may be referred to as “this Lease.”

 

13.                               Except as otherwise set forth in Section 4,
all communications and notices provided for herein shall be in writing and shall
become effective when delivered by facsimile transmission or by personal
delivery, Federal Express or other overnight courier or four days following
deposit in the United States mail, with correct postage for first-class mail
prepaid, addressed to the parties at their respective addresses set forth above,
or else as otherwise directed by any party from time-to-time in writing.

 

14.                               If any one or more provisions of this
Agreement shall be held invalid, illegal or unenforceable by a court of
competent jurisdiction, the remaining provisions of this Agreement shall be
unimpaired, and the invalid, illegal or unenforceable provisions shall be
replaced by a mutually acceptable provision, which, being valid, legal and
enforceable, comes closest to the intention of the parties underlying the
invalid, illegal or unenforceable provision.  To the extent permitted by
applicable law, the parties hereby waive any provision of law that renders any
provision of this Agreement prohibited or unenforceable in any respect.

 

15.                               This Agreement is entered into under, and is
to be construed in accordance with, the laws of the State of Colorado, without
reference to conflicts of laws.

 

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

 

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16.                               TRUTH IN LEASING STATEMENT UNDER FAR SECTION
91.23

 

THE AIRCRAFT, A 2016 BOMBARDIER CL-600-2B16 (CHALLENGER 650), MANUFACTURER’S
SERIAL NO. 6066, CURRENTLY REGISTERED WITH THE FEDERAL AVIATION ADMINISTRATION
AS N212QS, EITHER HAS BEEN DELIVERED FROM ITS MANUFACTURER OR HAS BEEN
MAINTAINED AND INSPECTED UNDER FAR PART 91 SUBPART K DURING THE 12 MONTH PERIOD
PRECEDING THE DATE OF THIS LEASE, BASED ON REQUIREMENTS UNDER THE MANAGEMENT
TERMS.

 

THE AIRCRAFT WILL BE MAINTAINED AND INSPECTED UNDER FAR PART 91 SUBPART K FOR
OPERATIONS TO BE CONDUCTED UNDER THIS LEASE, BASED ON REQUIREMENTS UNDER THE
MANAGEMENT TERMS.  DURING THE DURATION OF THIS LEASE, LIBERTY DENVER ARENA LLC,
12300 LIBERTY BOULEVARD, ENGLEWOOD, COLORADO 80112 IS CONSIDERED RESPONSIBLE FOR
OPERATIONAL CONTROL OF THE AIRCRAFT UNDER THIS LEASE.

 

AN EXPLANATION OF THE 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.

 

LIBERTY DENVER ARENA LLC, LOCATED AT 12300 LIBERTY BOULEVARD, ENGLEWOOD,
COLORADO 80112, THROUGH ITS UNDERSIGNED AUTHORIZED SIGNATORY BELOW, CERTIFIES
THAT IT IS RESPONSIBLE FOR OPERATIONAL CONTROL OF THE AIRCRAFT AND THAT IT
UNDERSTANDS ITS RESPONSIBILITIES FOR COMPLIANCE WITH APPLICABLE FEDERAL AVIATION
REGULATIONS.

 

IN WITNESS WHEREOF, the parties have executed this Agreement to be effective as
of the date first above written.

 

OWNER

 

SUBLESSOR

 

LESSEE

 

 

 

 

 

LIBERTY CITATION, INC.

 

LIBERTY DENVER ARENA LLC

 

LIBERTY EXPEDIA HOLDINGS, INC.

 

 

 

 

 

 

 

 

 

 

By:

/s/ Craig Troyer

 

By:

/s/ Craig Troyer

 

By:

/s/ Craig Troyer

Name:

Craig Troyer

 

Name:

Craig Troyer

 

Name:

Craig Troyer

Title:

Vice President

 

Title:

Vice President

 

Title:

Vice President

 

[Signature Page — Aircarft Time Sharing Agreement (NETJETS CHALLENGER 650
N212QS)]

 

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INSTRUCTIONS FOR COMPLIANCE WITH “TRUTH IN LEASING” REQUIREMENTS

 

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 24
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 48 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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