Document:

Exhibit 10.2

 

PAYING
AGENT AGREEMENT

 

This
PAYING AGENT AGREEMENT entered into as of November 17, 2022 (this “Agreement”), is made by and among Affordable Connectivity
Financing V Limited Liability Company, a Texas limited liability company (the “Seller” or “ACP”),
SurgePhone Wireless, LLC, a Nevada limited liability company and Torch Wireless, a Wyoming corporation (collectively, the “Purchaser”),
and Ivy Dallas Funding, LLC a Texas limited liability company (the “Lender”) (together with its successors and assigns,
the “Paying Agent”).

 

RECITALS

 

WHEREAS,
Seller has provided to Purchaser, a line of credit of up to $25,000,000 and certain other financial accommodations (the “Senior
Liability”), which Senior Liability will be governed pursuant to the terms of that certain Installment Sale Agreement, dated
as of November 17, 2022 (as amended, restated or otherwise modified from time to time, the “Installment Sale Agreement”);

 

WHEREAS,
Lender has provided to ACP a credit facility and certain other financial accommodations (the “ACP Loan”), which ACP
Loan will be governed by the terms of that certain Loan Agreement, to be dated on or about the date hereof (the “ACP Loan Agreement”);

 

WHEREAS,
the Purchaser and Seller desire that Lender acts as the Paying Agent for administration and remittance of all cash received from all
sources, in accordance with the terms thereof; and

 

WHEREAS,
Lender desires to accept the appointment of Paying Agent as set forth in this Agreement.

 

NOW,
THEREFORE, it is mutually agreed by the parties hereto as follows:

 

1. APPOINTMENT;
DURATION AND REMOVAL

 

1.1
Appointment and Acceptance. The Purchaser and Seller hereby appoint Lender, and Lender hereby accepts its appointment, as Paying
Agent with respect to all accounts for receiving, disbursing and making of payments from the Depository Account, based on the priority
of payments as outlined in Section 3.3.

 

1.2
Compensation. As compensation for Lender’s services as Paying Agent, the Purchaser hereby agrees to pay the Lender a fee
according to the Lender’s fee schedule set forth in Exhibit A hereto. Such compensation shall remain fixed for the term
of this Agreement in accordance with Exhibit A.

 

1.3
Duration. Lender shall remain the Paying Agent for the Purchaser and Seller, until the amounts due under the Installment Sale
Agreement are paid in full, either at maturity or upon prepayment, and the Installment Sale Agreement is cancelled, unless Seller and
Lender (i) consent to the appointment of a successor paying agent, or (ii) Lender becomes insolvent, enters into receivership or bankruptcy,
or (iii) Lender acts in bad faith, or (iv) Lender otherwise resigns, as further set forth in the provisions of Section 1.4 hereof.

 

    	 

     

    

 

1.4
Removal; Resignation. The Seller shall have the right to remove Paying Agent at any time by giving ten (10) Business Days’
prior written notice of such removal to Paying Agent and the Purchaser, and further subject to the approval of the Paying Agent and Lender
in their sole and absolute discretion. Paying Agent may resign at any time by giving at least ten (10) Business Days’ advance written
notice of such resignation to the Purchaser and Seller. The Seller and Purchaser each hereby agree, promptly following delivery of such
removal notice, to use commercially reasonable efforts to identify and appoint a successor paying agent to replace the Paying Agent,
cause such successor to accept such appointment, and cause evidence of such acceptance to be delivered to the Paying Agent in writing.
Upon acceptance of such appointment by the Paying Agent and the successor paying agent, the removed or resigning Paying Agent, without
any recourse against it, shall cause all documents necessary for the successor paying agent to perform its role hereunder to be delivered
to Purchaser and Seller, all as directed in writing by the Purchaser or Seller. Upon the effectiveness of such removal or resignation,
such successor paying agent shall enter into this Agreement and succeed to all the rights, powers, and duties hereunder of the predecessor
Paying Agent, and the predecessor Paying Agent’s rights (except as otherwise specifically provided herein), powers and duties hereunder
shall be terminated. Paying Agent hereby agrees that Paying Agent shall continue to perform its duties under this Agreement until such
successor paying agent is identified, appointed to replace the Paying Agent, and has commenced performing its duties as successor paying
agent. Notwithstanding the foregoing, the Purchaser shall have no right to remove Paying Agent while balances under the Installment Sale
Agreement remain outstanding.

 

2. DEFINITIONS

 

2.1
Definitions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:

 

“ACP
Loan” shall have the meaning assigned to such term in the recitals hereto.

 

“ACP
Loan Agreement” shall have the meaning assigned to such term in the recitals hereto.

 

“ACP
Program” shall mean, collectively, those certain programs administered by certain state and/or federal authorities or bodies,
including, without limitation, the Universal Services Administrative Company (“USAC”), which programs provide certain
eligible, low income customers with broadband and telephone services.

 

“Agreement”
shall have the meaning assigned such term in the preamble hereto.

 

“Depository
Account” shall mean that certain cash deposit account established in the name of the Purchaser for the for the benefit of Seller
and Lender, subject to the control and administration of the Paying Agent in accordance with the terms of this Agreement, for the purposes
of receiving cash billed by Purchaser for its ACP Program and other government programs.

 

“Installment
Sale Credit Documents” shall mean the Installment Sale Agreement, and those other documents, instruments, affidavits, security
agreements and certificates executed by the Purchaser for the benefit of the Seller, detailing the terms and conditions of the Installment
Sale Agreement between the Purchaser and the Seller.

 

“Lender”
shall have the meaning assigned such term in the preamble hereto.

 

“Lender
Office” means the address of the principal corporate trust office of the Lender as set forth on the signature page of this
Agreement. The Lender will notify the Seller and Purchaser in writing of any change in location of the Lender Office.

 

“Lifeline
Program” shall mean the program administered by USAC pursuant to which certain voice and internet services are provided at
a lower cost to qualifying families.

 

    	2

     

    

 

“Lifeline
Receivables” shall mean the state and/or federal government receivables generated through the Purchaser’s request for
reimbursement subsidies for providing services to eligible customers participating in the Lifeline Program and ACP Program (including
from USAC), that are deemed as such by the appropriate state and/or federal government agency or by proxy through an administrative entity
contracted with the state and/or federal government.

 

“Paying
Agent” means initially Lender, or such other party as the Seller designates as Paying Agent, as approved by Lender in its sole
and absolute discretion, according to the provisions of this Agreement.

 

“Responsible
Officer” means, when used with respect to the Lender, any officer with that maintains responsibility for client relationship
management or the administration of Lender’s asset-based lending function.

 

“Seller”
shall have the meaning assigned to such term in the preamble hereto.

 

“Senior
Liability Documents” shall mean, collectively, the Installment Sale Credit Documents and those certain other documents, instruments,
affidavits, security agreements and certificates executed by the Purchaser for the benefit of Lender, detailing the terms and conditions
of the credit facility between Seller and Purchaser.

 

 3. PAYMENT MECHANICS; PAYING AGENT DUTIES; PRIORITY OF PAYMENT

 

3.1
Lifeline Invoices; Payment Mechanics. Purchaser shall deliver invoices to (i) USAC, in connection with its participation
in the Lifeline Program and the ACP Program (“USAC Invoices”), and (ii) the California Public Utility Commission,
in connection with its participation in the CA Lifeline Program (“CAPUC Invoices” and together with the USAC Invoices,
collectively, the “Lifeline Invoices”). Such Lifeline Invoices shall be delivered by the Purchaser to each of USAC
and the California Public Utility Commission by no later than the tenth (10th) day of each month (or if such day of the month is not
a business day, the next succeeding business day) for the prior months’ business in accordance with the terms of the Purchaser’
participation in each of the Lifeline Program, the ACP Program and the CA Lifeline Program. All payments on account of Lifeline Receivables
received from USAC or the California Public Utility Commission as a result of the submission of the Lifeline Invoices shall be deposited
into the Depository Account.

 

3.2
Duties of Paying Agent. The Paying Agent, subject to the terms of this Agreement, shall administer all cash inflows and outflows
from the Depository Account. In addition, the Paying Agent shall also administer the receipt of any payments on account of Lifeline Receivables
due and payable to the Purchaser in connection with the submission of all Lifeline Invoices.

 

3.3
Priority of Payment. Upon receipt of a Notice of Borrowing, and in connection with the Seller/Purchaser Reporting to be delivered
to the Paying Agent pursuant to Section 4.3 hereof, the Paying Agent shall, with respect to such cash inflows and outflows deposited
into or withdrawn from the Depository Account, direct applicable inflows and outflows (including, with respect to outflows to pay amounts
due under the Installment Sale Agreement (which in turn, will be used to pay installments due under the ACP Loan Agreement), in accordance
with the wiring instructions and to the account as detailed in Exhibit B attached hereto), based on the following priority of payments:

 

(a) first,
to Lender, to pay the current amount due to Seller under the monthly submitted invoice under the Installment Sale Agreement;

 

    	3

     

    

 

(b) next,
to the Seller to pay then outstanding amounts due and payable under the Installment Sale Agreement (including, without limitation, any
Profit Margin, Credit Availability Fee, Minimum Purchase Volume Deficiency Fee or Cancellation Fee (as each such term is defined in the
Installment Sale Agreement)) in accordance with the terms and conditions of the Installment Sale Credit Documents.

 

(c) next,
so long as no Event of Default (as defined in the Senior Liability Documents) shall have occurred or be continuing, any remaining amounts
are to be remitted to the Purchaser as soon as commercially reasonable but in no event greater than 72 hours from receipt in accordance
with the terms of the Installment Sale Credit Documents.

 

4. DEPOSITORY
ACCOUNT; LOCKBOX ACCOUNT

 

4.1
Purpose. All cash inflows and outflows shall occur first within the Depository Account at the direction of the Paying Agent
based on the terms and conditions agreed to in this Agreement.

 

4.2
Administration. The Depository Account shall be solely administered by the Paying Agent in accordance with the agreement in respect
of such account between Paying Agent and Purchaser, as such agreement may be amended, supplemented, or modified from time to time in
accordance with the terms thereof. Replacement of Lender as Paying Agent may be performed solely at the discretion of the Seller and
consent of Purchaser, to the extent approved by Lender in its sole and absolute discretion, or resignation of the Lender in accordance
with Section 1.4 hereof.

 

4.3
Reporting.

 

(a) Paying
Agent Reporting. By the fifteenth (15th) of each calendar month during the term of this Agreement, the Paying Agent will provide
monthly reporting of cash receipts and collections and cash payments and funding disbursements for the preceding month to Seller and
Purchaser. Also, by the fifteenth (15th) of each calendar month during the term of this Agreement, the Seller and Purchaser will receive
monthly bank statements for the preceding month reflecting activity in the Depository Account.

 

(b) Seller/Purchaser
Reporting. Concurrent with the execution of any Installment Sale Agreement, Purchaser and Seller shall provide the Paying Agent with
an update as to any amounts due and payable under the Installment Sale Agreement, which amounts shall be thereafter due and payable in
accordance with the instructions provided by Lender on Exhibit B hereto.

 

4.4
Modification of Depository Account. None of the parties hereto will, in any way, redirect funds, including, without limitation,
any Lifeline Receivables, to any other account other than the Depository Account, through submission of a request to the government entity
administering such disbursements or otherwise, without the written consent of the Seller and Lender.

 

5. PAYING
AGENT

 

5.1
Duties of the Paying Agent. As Paying Agent, Lender undertakes to perform the duties set forth herein and agrees to use commercially
reasonable care in the performance thereof.

 

    	4

     

    

 

5.2
Reliance on Documents, etc.

 

(a) Lender
may conclusively rely, as to the truth of the statements and correctness of the opinions expressed therein, on the Senior Liability Documents,
the Installment Sale Credit Documents or any legal or other opinions furnished to Lender.

 

(b) Lender
shall not be liable for any error of judgment made in good faith by a Responsible Officer unless it shall be proved in a court of competent
jurisdiction that any such error in judgment was based on the gross negligence or willful misconduct of Lender.

 

(c) No
provisions of this Agreement shall require Lender to expend or risk its own funds or otherwise incur any financial liability for performance
of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity satisfactory to it against such risks or liability is not assured to it.

 

(d) Lender
may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, note security, or other paper or document believed by it to be genuine and
to have been signed or presented by the proper party or parties. Lender shall not be bound to make any investigation into the facts or
matters stated in a resolution, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, security
or other paper or document supplied by the Lender.

 

(e) Lender
may consult with counsel, and the written advice of such counsel or any opinion of counsel shall be full and complete authorization and
protection with respect to any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.

 

(f) Lender
may exercise any of the powers and perform any of the duties hereunder either directly or by or through agents or attorneys of Lender.

 

6. REPRESENTATIONS
OF SELLER, PURCHASER AND PAYING AGENT

 

6.1
Representations of the Seller.

 

(a) The
Seller is validly formed, and existing in good standing in its state of formation.

 

(b) The
Seller has the full limited liability company power and authority and legal right to enter into this Agreement, and to perform its respective
obligations hereunder. The execution, delivery and performance of this Agreement (i) are within the Seller’s limited liability
company powers, (ii) have been duly authorized by all necessary limited liability company action, (iii) are not in contravention of any
applicable law, or to the conduct of such person’s business or any contract or undertaking which the Seller is party or which the
Seller is bound, and (iv) will not require the consent of any Governmental Body (as defined in the Installment Sale Agreement).

 

(c) This
Agreement has been, duly executed and delivered by the Seller and will constitute the legal, valid and binding obligation of the Seller,
enforceable against the Seller in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization (by way of voluntary arrangement, schedule or arrangement or otherwise), examination, administration, judicial management,
moratorium or similar debtor relief laws (in any applicable jurisdiction) relating to or limiting creditors’ rights generally or
by equitable principals relating to enforceability.

 

    	5

     

    

 

6.2
Representations of the Purchaser.

 

(a) The
Purchaser is validly formed, and existing in good standing in its state of incorporation.

 

(b) The
Purchaser has full corporate power and authority and legal right to enter into this Agreement, and to perform its respective obligations
hereunder. The execution, delivery and performance of this Agreement (i) are within the Purchaser’s corporate powers, (ii) have
been duly authorized by all necessary corporate action, (iii) are not in contravention of any applicable law, or to the conduct of such
person’s business or any contract or undertaking which the Purchaser is party or which the Purchaser is bound, and (iv) will not
require the consent of any Governmental Body (as defined in the Installment Sale Agreement).

 

(c) This
Agreement has been duly executed and delivered by the Purchaser, and will constitute the legal, valid and binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization (by way of voluntary arrangement, schedule or arrangement or otherwise), examination, administration, judicial management,
moratorium or similar debtor relief laws (in any applicable jurisdiction) relating to or limiting creditors’ rights generally or
by equitable principals relating to enforceability.

 

6.3
Representations of Lender.

 

(a) Lender
is validly formed, and existing in good standing in its state of formation.

 

(b) Lender
has full limited liability company power and authority and legal right to enter into this Agreement, and to perform its respective obligations
hereunder. The execution, delivery and performance of this Agreement (i) are within Lender’s limited liability company powers,
(ii) have been duly authorized by all necessary limited liability company action, (iii) are not in contravention of any applicable law,
or to the conduct of such person’s business or any contract or undertaking which Lender is party or which Lender is bound, and
(iv) will not require the consent of any Governmental Body (as defined in the Senior Credit Documents).

 

(c) This
Agreement has been duly executed and delivered by Lender, and will constitute the legal, valid and binding obligation of Lender, enforceable
against Lender in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization (by
way of voluntary arrangement, schedule or arrangement or otherwise), examination, administration, judicial management, moratorium or
similar debtor relief laws (in any applicable jurisdiction) relating to or limiting creditors’ rights generally or by equitable
principals relating to enforceability.

 

7. INDEMNIFICATION

 

7.1 Indemnification.
Each of Seller and Purchaser shall indemnify Lender against, and hold it harmless from, any and all liabilities, claims, costs, expenses
and damages of any nature (including but not limited to reasonable attorneys’ fees and expenses incurred in enforcing this Agreement)
in any way arising out of or relating to disputes or legal actions concerning this Agreement. This section does not apply to any cost
or damage attributable to the gross negligence or intentional misconduct of Lender. Each of Seller’s and Purchaser’s and
Lender’s obligations under this section shall survive termination.

 

    	6

     

    

 

8. MISCELLANEOUS
PROVISIONS

 

8.1
Amendments. This Agreement may be amended provided such amendment is mutually agreed upon by Seller and Lender, and evidenced
by a signed agreement of Seller, Purchaser, and Lender.

 

8.2
Assignment. This Agreement may not be assigned by Lender or the Seller without the prior written consent of the Purchaser,
which consent shall not be unreasonably conditioned, delayed or withheld.

 

8.3
Notices. Any request, demand, authorization, direction, notice, consent, waiver or other document provided or permitted hereby
to be given or furnished to the Seller, Purchaser, or Lender shall be mailed or delivered to the Seller, Purchaser, or Lender, respectively,
at the addresses shown on the signature page of this Agreement.

 

8.4
Effect of Headings. The Article and Section headings herein are for convenience only and shall not affect the construction
hereof.

 

8.5
Successors and Assigns. All covenants and agreements herein by the Purchaser and the Lender shall bind its successors and
assigns, whether so expressed or not.

 

8.6
Severability. In case any provision herein shall be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired thereby.

 

8.7
Benefits of Agreement. Nothing herein, express or implied, shall give to any person, other than the parties hereto and
their successors hereunder, any benefit or any legal or equitable right, remedy or claim hereunder.

 

8.8
Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto relative to Lender acting
as Paying Agent.

 

8.9
Counterparts. This Agreement may be executed in any number of counterparts, each which shall be deemed an original and
all of which shall constitute one and the same Agreement.

 

8.10
Termination. This Agreement will terminate on the date on which both the Installment Sale Agreement and the ACP Loan have
been both paid in full and terminated in accordance with the terms and conditions of each of the Installment Sale Credit Documents and
the Senior Liability Documents. This Agreement may be terminated at any time with the mutual consent of the Lender, Purchaser, and the
Seller. The provisions of Sections 1.2 and 7.1 shall survive, and remain in full force and effect following the termination of
this Agreement.

 

8.11
Reinstatement. This Agreement shall remain in full force and effect and continue to be effective should any petition be
filed by or against the Purchaser or Seller for liquidation or reorganization, should the Purchaser or Seller become insolvent or make
an assignment for the benefit of any creditor or creditors or should a receiver or trustee be appointed for all or any significant part
of any Purchaser’s or Seller’s assets, and shall continue to be effective or be reinstated, as the case may be, if at any
time payment and performance of the obligations or the ACP Loan, or any parts thereof, are, pursuant to applicable law, rescinded or
reduced in amount, or must otherwise be restored or returned by any oblige of the obligations or the ACP Loan, whether as a “voidable
preference,” “fraudulent conveyance,” or otherwise, all as though such payment or performance had not been made. In
the event, that any payment, or any part thereof, is rescinded, reduced, restored or returned, then that amount of the Obligations or
ACP Loan, as applicable, shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

 

8.12 Governing
Law. This Agreement shall be construed in accordance with and governed by the laws of the State of New York.

 

    	7

     

    

 

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

 

	 	SELLER:
	 	 
	 	Affordable Connectivity Financing V
    Limited Liability Company, a Texas limited liability company
	 	 
	 	By:	/s/ William Pettinati
	 	Name: 	William Pettinati
	 	Title: 	Manager

 

	 	Address for Notices:
	 	 	 
	 	Telephone No.: 	 
	 	Attention:	Bill Pettinati
	 	e-mail:	 

 

SIGNATURE
PAGE TO PAYING AGENT AGREEMENT

 

    	 

     

    

 

	 	PURCHASER:
	 	 
	 	SurgePhone Wireless, LLC, as Purchaser
    a Nevada limited liability company
	 	 	 
	 	By:	/s/ Kevin Brian Cox
	 	Name:	Kevin Brian Cox
	 	Title:	Chief Executive Officer
	 	 	 
	 	Torch Wireless, as Purchaser a Wyoming
    corporation
	 	 
	 	By:	/s/ Kevin Brian Cox
	 	Name:	Kevin Brian Cox
	 	Title:	Chief Executive Officer

 

	 	Address
    for Notices:	3124
    Brother Blvd, Suite 104
	 	 	Bartlett,
    TN 38133
	 	 	Attn:
    K. Brian Cox, CEO
	 	 	 
	 	Telephone No.:	 
	 	Attention:	K. Brian Cox
	 	e-mail:	 

 

SIGNATURE
PAGE TO PAYING AGENT AGREEMENT

 

    	 

     

    

 

	 	PAYING AGENT/LENDER:
	 	 
	 	Ivy Dallas Funding, LLC, a Texas
    limited liability company 
	 	 
	 	By: 	/s/ John C. Hoof
	 	Name: 	John C. Hoof               
	 	Title: 	Manager

 

	 	Address for Notices:
	 	 
	 	Telephone No.	 
	 	Attention:	Ivy Administration
	 	e-mail:	 

 

SIGNATURE
PAGE TO PAYING AGENT AGREEMENT

 

    	 

     

    

 

Exhibit
A – Paying Agent Compensation

 

$1,000
per month.

 

    	 

     

    

 

Exhibit
B– Wiring Instructions

 

	Institution:	 
	 	 
	Account
    Holder Name: 	 
	Routing
    Number for Wires: 	 
	Routing
    Number for ACH: 	 
	Account
    Number: 	 

 

    	 

     

    

 

Exhibit
C – Illustrative Installment Sale Credit Repayment Schedule by MonthDocument

EXHIBIT (10)BB

AIRCRAFT TIME SHARING AGREEMENT
This Aircraft Time Sharing Agreement (“Agreement”) is made and effective as of the 4th day of October, 2022 (“Effective Date”), by and between Target Corporation, a Minnesota corporation (“Operator”), and Brian C. Cornell (“Lessee”), who are sometimes also referred to herein individually as a “Party” or collectively as the “Parties.”
W I T N E S S E T H:
WHEREAS, Lessee is an employee of Operator who is required to use the Aircraft for business and personal travel whenever possible;
WHEREAS, Lessee desires to lease the Aircraft, with a flight crew, on a non-exclusive basis, from Operator on a time sharing basis as defined in Section 91.501(c)(1) of the FAR;
WHEREAS, Operator is willing to lease the Aircraft, with a flight crew, on a non-exclusive basis, to Lessee on a time sharing basis; and
WHEREAS, during the Term, the Aircraft will be subject to use by Operator and may be subject to use by one or more other third-parties.
NOW, THEREFORE, in consideration of the mutual promises herein contained and other good and valid consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1.    Definitions.  The following terms shall have the following meanings for all purposes of this Agreement:
“Aircraft” means, individually and collectively, as the context requires, the aircraft listed on Exhibit A, including each aircraft’s respective airframe, engines, appliances, components, parts, instruments, appurtenances, accessories, furnishings or other equipment attached thereto or incorporated therein and Aircraft Documents.  
“Aircraft Documents” means all flight records, maintenance records, historical records, modification records, overhaul records, manuals, logbooks, authorizations, drawings and data relating to the Aircraft or any part thereof, or that are required by Applicable Law to be created or maintained with respect to the maintenance and/or operation of the Aircraft.
“Applicable Law” means, without limitation, all applicable laws, treaties, international agreements, decisions and orders of any court, arbitration or governmental agency or authority and rules, regulations, orders, directives, licenses and permits of any governmental body, instrumentality, agency or authority, including, without limitation, the FAR and 49 U.S.C. § 41101, et seq., as amended.
“DOT” means the United States Department of Transportation or any successor agency.
“FAA” means the Federal Aviation Administration or any successor agency.
Target Aircraft Time Sharing Agreement with Cornell     
Page 1

“FAR” means collectively the Aeronautics Regulations of the FAA and the DOT, as codified at Title 14, Parts 1 to 399 of the United States Code of Federal Regulations.
“Operating Base” means Minneapolis-St. Paul International Airport, Minneapolis, Minnesota.  
“Operational Control” has the same meaning given the term in Section 1.1 of the FAR.
“Pilot in Command” has the same meaning given the term in Section 1.1 of the FAR.
“Taxes” means all taxes of every kind (excluding any tax measured by or assessed against a taxpayer’s income, including, without limitation, any income tax, gross income tax, net income tax, or capital gains tax, and any tax measured by or assessed against the Aircraft’s value, including, without limitation, any personal property or ad valorem tax) assessed or levied by any federal, state, county, local, airport, district, foreign, or other governmental authority, including, without limitation, sales taxes, use taxes, retailer taxes, federal air transportation excise taxes, federal aviation fuel excise taxes, and other similar duties, fees, and excise taxes.
“Term” is defined in Section 3.
2.    Agreement to Lease.  Operator agrees to lease the Aircraft to Lessee from time to time on an “as needed and as available” basis, and to provide a fully qualified flight crew for all Lessee’s flights, in accordance with the terms and conditions of this Agreement.  Nothing contained herein shall obligate or entitle Lessee to any minimum usage of the Aircraft.
3.    Term and Termination.  The initial term of this Agreement shall commence on the Effective Date and continue for a period of one year.  Thereafter, this Agreement shall renew for additional and successive one year periods, until terminated as provided below.  For purposes of this Agreement “Term” means the initial term and all successive one year renewal periods until this Agreement is terminated as provided below.  This Agreement may be terminated by either Party at any time upon thirty (30) days prior written notice to the other Party, and this Agreement shall terminate automatically: (i) upon a final determination that there has been a total loss of all of the Aircraft; and (ii) on the date that Lessee ceases to be employed by Target Corporation or any of its affiliated companies, whether as a result of resignation, retirement, death or other termination.
4.    Applicable Regulations.  The Parties hereto intend that this Agreement shall constitute, and this Agreement shall be interpreted as, a Time Sharing Agreement as defined in Section 91.501(c)(1) of the FAR.  The Parties agree that for all flights under this Agreement, the Aircraft shall be operated under the pertinent provisions of Subpart F of Part 91 of the FAR.  If any provision of this Agreement is determined to be inconsistent with any of the requirements of the provisions of Subpart F of Part 91 of the FAR, such provision shall be deemed amended in any respect necessary to bring it into compliance with such requirements.
5.    Non-Exclusivity.  Lessee acknowledges that the Aircraft is leased to Lessee hereunder on a non-exclusive basis, and that the Aircraft will also be subject to use by Operator, and may also be subject to non-exclusive leases and lease to others during the Term.
Target Aircraft Time Sharing Agreement with Cornell     
Page 2

6.    Flight Charges.  For each “flight” (which as used in this Agreement will mean a flight from a departure point to a single destination) conducted under this Agreement, Operator will keep a log of the flight, and Lessee will pay Operator an amount (the “Flight Charge”) not to exceed the sum of the following expenses of operating the flight to the extent prescribed by FAR § 91.501(d) or any successor provision (i.e. which will not exceed the sum of the expenses set forth in Subsections 6.(i) - 6.(x) below, collectively the “Flight Charge Cap”):
6.1    fuel, oil, lubricants, and other additives;
6.2    travel expenses of the crew, including food, lodging and ground transportation;
6.3    hangar and tie down costs away from the Aircraft’s Operating Base;
6.4    insurance obtained for the specific flight;
6.5    landing fees, airport taxes and similar assessments;
6.6    customs, foreign permit, and similar fees directly related to the flight;
6.7    in-flight food and beverages;
6.8    passenger ground transportation;
6.9    flight planning and weather contract services; and
6.10    an additional charge equal to 100% of the expenses listed in Section 6.1.
Operator may elect, in its sole discretion, to charge a Flight Charge that is less than the Flight Charge Cap upon prior coordination with Lessee for specific flights conducted pursuant to this Agreement.  All flights that are conducted solely to reposition the Aircraft for the purposes of, or are related to, conducting a flight for the benefit of Lessee hereunder shall be deemed to be flights, and as such all expenses of said repositioning flights will be included on the invoice related to the associated passenger-carrying flight
7.    Invoices and Payment.  Operator will initially pay all expenses related to the operation of the Aircraft when and as such expenses are incurred, provided that within thirty (30) days after the last day of any calendar month during which any flight for the account of Lessee has been conducted, Operator shall provide an invoice to Lessee for an amount determined in accordance with Section 6 above; provided that with regard to expenses that remain indeterminable as of the date of any invoice, such expenses shall be included in the next regularly-provided invoice after such expenses have been determined. Lessee shall remit the full amount of any such invoice, together with any applicable Taxes under Section 8, to Operator promptly within sixty (60) days following Lessee’s receipt of the invoice date.  Payment shall be made in the form of a check payable to “Target Corporation” at the following address:
Target Hangar
Flight Operations
6925 34th Avenue South
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TFC-6925
Minneapolis, MN 55450

Or to such other address as Operator may direct from time-to-time, or in the form the Parties may agree from time to time, including but not limited to credit card, payroll deduction or electronic payment via ACH.

8.    Taxes.  Lessee shall be responsible for, shall indemnify and hold harmless Operator against, any Taxes which may be assessed or levied as a result of the lease of the Aircraft to Lessee, or the use of the Aircraft by Lessee, including without limitation, any “federal excise tax” or “FET” imposed under Internal Revenue Code §4261 resulting from Lessee’s (or his guests’) use of the Aircraft under this Agreement.  Lessee shall remit to Operator all such Taxes together with each payment made pursuant to Section 7.
9.    Scheduling Flights.  Lessee shall submit requests for flight time and proposed flight schedules to the Operator as far in advance of any given flight as reasonably possible.  Lessee shall provide at least the following information for each proposed flight as far in advance as reasonably possible prior to scheduled departure: departure airport; destination airport; date and time of departure; the names of all passengers; the nature and extent of luggage and/or cargo to be carried; the date and time of return flight, if any; and any other information concerning the proposed flight that may be pertinent or required by Operator or Operator’s flight crew.
10.    Title and Registration.  Operator has exclusive legal and equitable title to the Aircraft.  Lessee acknowledges that title to the Aircraft shall remain vested in Operator.  Lessee undertakes, to the extent permitted by Applicable Law, to do all such further acts, deeds, assurances or things as may be necessary or desirable, in Operator’s reasonable opinion, to protect or preserve Operator’s title to the Aircraft.
11.    Aircraft Maintenance.  Operator shall be solely responsible for maintenance, preventive maintenance and required or otherwise necessary inspections of 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 Law, and within the sound discretion of the Pilot in Command.
12.    Flight Crews.  Operator shall provide, at its sole cost, to Lessee a qualified flight crew for each flight conducted in accordance with this Agreement.  The members of the flight crew may be either employees or independent contractors of Operator.  In either event, the flight crew shall be and remain under the exclusive command and control of Operator in all phases of all flights conducted hereunder.
13.    OPERATIONAL CONTROL.  THE PARTIES EXPRESSLY AGREE THAT OPERATOR SHALL HAVE AND MAINTAIN SOLE OPERATIONAL CONTROL OF THE AIRCRAFT AND EXCLUSIVE POSSESSION, COMMAND AND CONTROL OF THE AIRCRAFT FOR ALL FLIGHTS OPERATED UNDER THIS AGREEMENT, AND THAT THE INTENT OF THE PARTIES IS THAT THIS AGREEMENT CONSTITUTE A “TIME SHARING AGREEMENT” AS SUCH TERM IS DEFINED IN SECTION 91.501(C)(1) OF THE
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FAR.  OPERATOR SHALL EXERCISE EXCLUSIVE AUTHORITY OVER INITIATING, CONDUCTING, OR TERMINATING ANY FLIGHT CONDUCTED ON BEHALF OF LESSEE PURSUANT TO THIS AGREEMENT.
14.    Authority of Pilot In Command.  Notwithstanding that Operator shall have Operational Control of the Aircraft during any flight conducted pursuant to this Agreement, Operator and Lessee expressly agree that the Pilot in Command, in his or her 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 is necessary to ensure the safety of the Aircraft, the flight crew, the passengers, and persons and property on the ground. The Pilot in Command shall have final and complete authority to postpone or cancel any flight for any reason or condition that 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 of Operator to Lessee for loss, injury, damage or delay.
15.    Passengers and Baggage.  Lessee may carry on the Aircraft on all flights under this Agreement such passengers and baggage/cargo as Lessee in its sole but reasonable discretion shall determine; provided, however, that the passengers to be carried on such flights shall be limited to those permitted under the pertinent provisions of Part 91 of the FAR, and that the number of such passengers shall in no event exceed the number of passenger seats legally available in the Aircraft and the total load, including fuel and oil in such quantities as the Pilot in Command shall determine to be required, shall not exceed the maximum allowable load for the Aircraft.
16.    Prohibited Items.  Lessee shall not cause or permit to be carried on board the Aircraft, and shall not cause or permit any passenger to carry on board the Aircraft, any contraband, prohibited dangerous goods, or prohibited controlled substances on the Aircraft at any time.
17.    Force Majeure.  Operator shall not be liable for delay or failure to furnish the Aircraft and/or flight 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, acts of God or other unforeseen or unanticipated circumstances.
18.    Lessee Representations and Warranties.  Lessee represents and warrants that:
18.1    Lessee will use the Aircraft solely for and on account of his own personal use, and will not use the Aircraft for the purpose of providing transportation of passengers or cargo for compensation or hire.
18.2    Lessee shall refrain from incurring any mechanic’s 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 Lessee to convey, mortgage, assign, lease, sublease, 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.
18.3    During the Term of this Agreement, Lessee will abide by and conform to 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 use of the Aircraft by a time sharing lessee.
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19.    No Assignments. Neither this Agreement nor any Party’s interest herein shall be assignable to any other party whatsoever.
20.    Modification.  This Agreement may not be modified, altered, or amended except by written agreement executed by both Parties.
21.    Notices.  All notices and other communications under this Agreement shall be in writing (except as otherwise permitted herein) and shall be given (and shall be deemed to have been duly given upon receipt or refusal to accept receipt) by personal delivery, by first class mail properly addressed and postage prepaid or by a reputable overnight courier service, addressed as follows:
If to Lessee:        Brian C. Cornell
            c/o Target Corporation
1000 Nicollet Mall
TPS-2673
Minneapolis, MN 55403
            
If to Operator:        Target Corporation
            6925 34th Avenue South
            TFC-6925
            Minneapolis, MN 55450
            Attn: Director, Flight Services

or to such other person or address as either party shall from time to time designate in writing to the other party.
            
22.    Entire Agreement.  This Agreement constitutes the entire agreement of the Parties as of the Effective Date and supersedes all prior or independent, oral or written agreements, understandings, statements, representations, commitments, promises, and warranties made with respect to the subject matter of this Agreement.
23.    Prohibited or Unenforceable Provisions.  Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibitions or unenforceability in any jurisdiction.  To the extent permitted by Applicable Law, each of Operator and Lessee hereby waives any provision of Applicable Law which renders any provision hereof prohibited or unenforceable in any respect.
24.    Governing Law.  This Agreement has been negotiated and delivered in the State of Minnesota and shall in all respects be governed by, and construed in accordance with, the laws of the State of Minnesota, including all matters of construction, validity and performance, without giving effect to its conflict of laws provisions.
25.    DISCLAIMER.  THE AIRCRAFT IS BEING LEASED BY THE OPERATOR TO THE LESSEE HEREUNDER ON A COMPLETELY “AS IS, WHERE IS,” BASIS, WHICH IS ACKNOWLEDGED AND AGREED TO BY THE LESSEE.  THE WARRANTIES AND REPRESENTATIONS SET FORTH IN THIS AGREEMENT ARE EXCLUSIVE AND IN LIEU
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OF ALL OTHER REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, AND OPERATOR HAS NOT MADE AND SHALL NOT BE CONSIDERED OR DEEMED TO HAVE MADE (WHETHER BY VIRTUE OF HAVING LEASED THE AIRCRAFT UNDER THIS AGREEMENT, OR HAVING ACQUIRED THE AIRCRAFT, OR HAVING DONE OR FAILED TO DO ANY ACT, OR HAVING ACQUIRED OR FAILED TO ACQUIRE ANY STATUS UNDER OR IN RELATION TO THIS AGREEMENT OR OTHERWISE) ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR TO ANY PART THEREOF, AND SPECIFICALLY, WITHOUT LIMITATION, IN THIS RESPECT OPERATOR DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES CONCERNING THE TITLE, AIRWORTHINESS, VALUE, CONDITION, DESIGN, MERCHANTABILITY, COMPLIANCE WITH SPECIFICATIONS, CONSTRUCTION AND CONDITION OF THE AIRCRAFT, OR FITNESS FOR A PARTICULAR USE OF THE AIRCRAFT AND AS TO THE ABSENCE OF LATENT AND OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AND AS TO THE ABSENCE OF ANY INFRINGEMENT OR THE LIKE, HEREUNDER OF ANY PATENT, TRADEMARK OR COPYRIGHT, AND AS TO THE ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT, OR AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP OF THE AIRCRAFT OR ANY PART THEREOF OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED (INCLUDING ANY IMPLIED WARRANTY ARISING FROM A COURSE OF PERFORMANCE OR DEALING OR USAGE OF TRADE), WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF. LESSEE HEREBY WAIVES, RELEASES, DISCLAIMS AND RENOUNCES ALL EXPECTATION OF OR RELIANCE UPON ANY SUCH AND OTHER WARRANTIES, OBLIGATIONS AND LIABILITIES OF OPERATOR AND RIGHTS, CLAIMS AND REMEDIES OF LESSEE AGAINST OPERATOR, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, INCLUDING BUT NOT LIMITED TO (I) ANY IMPLIED WARRANTY OF MERCHANTABILITY OF FITNESS FOR ANY PARTICULAR USE, (II) ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE, (III) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN TORT, WHETHER OR NOT ARISING FROM THE NEGLIGENCE OF OPERATOR, ACTUAL OR IMPUTED, AND (IV) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OF OR DAMAGE TO THE AIRCRAFT, FOR LOSS OF USE, REVENUE OR PROFIT WITH RESPECT TO THE AIRCRAFT, OR FOR ANY OTHER DIRECT, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES.
26.    COUNTERPARTS.  This Agreement may be executed by the Parties hereto in two (2) or more separate counterparts, each and all of which when so executed and delivered shall be an original, and all of which shall together constitute but one and the same instrument.
[Signatures and Truth-in-Leasing Follow]
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27.    TRUTH IN LEASING.
OPERATOR HEREBY CERTIFIES THAT, DURING THE TWELVE (12) MONTH PERIOD PRECEDING THE DATE OF THIS AGREEMENT, EACH AIRCRAFT HAS BEEN INSPECTED AND MAINTAINED IN ACCORDANCE WITH THE PROVISIONS OF PART 91 OF FAR.  THE PARTIES HERETO CERTIFY THAT DURING THE TERM OF THIS AGREEMENT AND FOR OPERATIONS CONDUCTED HEREUNDER, THE AIRCRAFT WILL BE MAINTAINED AND INSPECTED IN ACCORDANCE WITH THE PROVISIONS OF PART 91 OF FAR.  OPERATOR ACKNOWLEDGES THAT WHEN IT OPERATES THE AIRCRAFT ON BEHALF OF LESSEE UNDER THIS AGREEMENT, OPERATOR SHALL BE KNOWN AS, CONSIDERED, AND IN FACT WILL BE THE OPERATOR OF THE AIRCRAFT AND SOLELY RESPONSIBLE FOR OPERATIONAL CONTROL OF THE 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.  THE PARTIES HERETO CERTIFY THAT A TRUE COPY OF THIS AGREEMENT SHALL BE CARRIED ON THE 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 have executed this Aircraft Time Sharing Agreement as of the date and year first written above.
OPERATOR:
TARGET CORPORATION

By:  /s/ James Duffey    
Printed: James Duffey            
Title: Sr. Director Flight Services    

LESSEE:
BRIAN C. CORNELL

/s/ Brian C. Cornell    

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“TRUTH IN LEASING” REQUIREMENTS
FAR §91.23(c)
(1)    The Lessee or Operator must mail a copy of the Lease within 24 hours of its execution, to the Aircraft Registration Branch, Attn:  Technical Section, P.O. Box 25724, Oklahoma City, Oklahoma 73125.
(2)    A copy of the Lease must be carried in the Aircraft.  The copy of the Lease shall be made available for review upon request by the Administrator.
(3)     The Lessee or Operator must notify by telephone or in person the FAA Flight Standards district office nearest the airport where the flight will originate.  Unless otherwise authorized by that office, the notification shall be given at least 48 hours before takeoff in the case of the first flight of that aircraft under the Lease or contract and inform the FAA of:
(i) The location of the airport of departure;
(ii) The departure time; and
(iii) The registration number of the aircraft involved.
(4)     The copy of the Lease furnished to the FAA is commercial or financial information obtained from a person. It is, therefore, privileged and confidential and will not be made available by the FAA for public inspection or copying under 5 U.S.C. 552(b)(4) unless recorded with the FAA under Part 49 of the U.S. Code.

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