Document:

Exhibit 10.6

 

LIBERTY PROPERTY HOLDINGS, INC.

12300 LIBERTY BOULEVARD

ENGLEWOOD, CO 80112

 

September 23, 2011

 

Liberty Interactive Corporation

12300 Liberty Boulevard

Englewood, CO 80112

Attention: Legal Department

 

Re:                               Facilities Sharing Agreement.

 

Ladies and Gentlemen:

 

As you are aware, Liberty Interactive Corporation (f/k/a Liberty Media Corporation), a Delaware corporation (“Liberty”), and Liberty Media Corporation (f/k/a Liberty CapStarz, Inc.), a Delaware corporation (“Splitco”), have entered into a Reorganization Agreement, dated as of August 30, 2011 (the “Reorganization Agreement”), pursuant to which various assets and businesses of Liberty and its subsidiaries have been, or will be, transferred to Splitco and its subsidiaries.  Among the assets to be transferred to Splitco is all of the capital stock of Liberty Property Holdings, Inc., a Delaware corporation (“LPH”), which is the owner of 12300 Liberty Boulevard, Englewood, Colorado (the “Premises”).

 

The Reorganization Agreement contemplates that Liberty and Splitco will be separated into two independent public companies (the “Split-Off”) by means of the redemption of all of the issued and outstanding shares of Liberty’s Liberty Capital common stock and Liberty Starz common stock, in exchange for shares of a corresponding series of Splitco’s Liberty Capital common stock and Liberty Starz common stock, respectively, on the terms and subject to the conditions set forth in the Reorganization Agreement and the Restated Certificate of Incorporation of Liberty.  After the Split-Off, Splitco, through LPH, will own the Premises and will occupy the office facilities in the Premises that are currently occupied by Liberty.

 

In connection with the Split-Off, Liberty and Splitco have entered into a Services Agreement, dated the date hereof (the “Services Agreement”), pursuant to which Splitco will provide to Liberty certain services performed by Splitco’s insurance, risk management, IT, clerical, finance, accounting, payroll, treasury, cash management, legal, human resources, employee benefits, disclosure compliance, investor relations, tax and real estate management departments, as well as such other services as Liberty may from time to time request.  The persons who perform these services will be officers, employees or consultants of Splitco (each, an “Employee”). Each Employee will be paid his or her entire salary and bonus by Splitco and will receive health, welfare and other benefits directly from Splitco (in each case, other than in the limited circumstances described in the Services Agreement) (collectively, “Employee

 

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Compensation”).  In accordance with the Services Agreement, the Employee Compensation for each Employee will be allocated between Splitco and Liberty based on an estimate of the relative amount of time such Employee spends on matters for Splitco and Liberty, respectively (the percentage of time spent by an Employee on Liberty matters being referred to herein as his or her “Individual Liberty Percentage,” and the average percentage of time spent by all Employees on Liberty matters being referred to herein as the “Liberty Percentage”). The Individual Liberty Percentage for each Employee will be determined as set forth in Section 2.1 of the Services Agreement.

 

Liberty desires to continue to occupy and use the office and parking facilities that are currently utilized by it within the Premises (the “Shared Facilities”) following the Split-Off through a sharing arrangement, and Splitco and LPH are amenable to such a sharing arrangement, on the terms and subject to the conditions set forth herein.

 

Based on the premises and the mutual agreements of the parties, and for other good and valuable consideration the receipt of which is hereby acknowledged, Liberty and LPH hereby agree as follows:

 

Section 1. Use of Facilities. The Shared Facilities consist of 40,115 square feet, in the aggregate, of fully-furnished executive offices, working stations for secretarial and other support staff and common areas, including the main reception area, conference facilities, hallways, stairways, restrooms, kitchenettes, the employee cafeteria, the fitness area and parking facilities (collectively, the “Shared Facilities Space”), located within the Premises known as 12300 Liberty Boulevard, Englewood, CO 80112.

 

Section 2. Sharing Fee. Liberty will pay to LPH a monthly fee (the “Sharing Fee”), by wire or intrabank transfer of funds or in such other manner as may be agreed upon by the parties, in arrears on or before the last day of each calendar month beginning with the first full calendar month following the date of the Split-Off, equal to one-twelfth of the sum of (A) the product of (i) the then-current Liberty Percentage multiplied by (ii) the product of the total square footage of space within the Shared Facilities Space and the Square Foot Rate (as defined below), plus (B) the Annual Allocation Expense (as defined below). For this purpose, Liberty and LPH agree that, until December 31, 2011, the fair market “fully loaded” rental rate per square foot, including parking facilities, for space comparable to the Shared Facilities in Englewood, Colorado will be $30.00 per square foot (the “Square Foot Rate”). The Square Foot Rate will be automatically increased on the first day of the first month of each calendar year thereafter in an amount equal to the percentage increase in the U.S. Department of Labor Consumer Price Index All Items, All Urban Consumers Denver-Boulder-Greeley (“CPI”) for the same period. The Square Foot Rate will not decrease, notwithstanding any decrease in CPI for the same period. The Square Foot Rate does not include charges for expenses related to the use of the Shared Facilities, including, but not limited to, utilities, security and janitorial services, office equipment rent, office supplies, use of the cafeteria facilities onsite at the Shared Facilities, maintenance and repairs, telephone, satellite, video and information technology (including network maintenance and data storage, computer and telephone support and maintenance, and management and information systems (servers, hardware and related software)) (“Allocations”). With respect to each calendar year during the term of this Agreement, Liberty shall reimburse Splitco in an amount (the “Annual Allocation Expense”) equal to the

 

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product of (x) the aggregate amount of the estimated Allocations for such year, as determined in good faith by Splitco and notified to Liberty prior to the commencement of such calendar year, and (y) the Liberty Percentage applicable to such calendar year; provided that, if the Liberty Percentage changes during any calendar year, the Annual Allocation Expense applicable to such calendar year shall be appropriately adjusted.

 

The terms and conditions of this Section 2 will survive the expiration or earlier termination of this Agreement.

 

Section 3.  Term.

 

(i)                                     The term of this Agreement will commence on the Split-Off Effective Date (such term as defined in the Services Agreement) and will continue until the third anniversary of the Split-Off Effective Date (the “Term”).  This Agreement is subject to termination prior to the end of the Term in accordance with Section 3(ii).

 

(ii)                                  This Agreement will be terminated prior to the expiration of the Term in the following events:

 

·                  at any time upon at least 30 days’ prior written notice by Liberty to LPH;

·                  immediately upon written notice (or any time specified in such notice) by LPH to Liberty if Liberty shall default in the performance of any of its material obligations hereunder and such default shall remain unremedied for a period of 30 days after written notice thereof is given by LPH to Liberty;

·                  immediately upon written notice (or at any time specified in such notice) by LPH to Liberty if a Change in Control or Bankruptcy Event occurs with respect to Liberty; or

·                  immediately upon written notice (or at any time specified in such notice) by Liberty to LPH if a Change in Control or Bankruptcy Event occurs with respect to Splitco.

 

For purposes of this Section 3(ii), a “Change in Control” will be deemed to have occurred with respect to a party if a merger, consolidation, binding share exchange, acquisition, or similar transaction (each, a “Transaction”), or series of related Transactions, involving such party occurs as a result of which the voting power of all voting securities of such party outstanding immediately prior thereto represent (either by remaining outstanding or being converted into voting securities of the surviving entity) less than 75% of the voting power of such party or the surviving entity of the Transaction outstanding immediately after such Transaction (or if such party or the surviving entity after giving effect to such Transaction is a subsidiary of the issuer of securities in such Transaction, then the voting power of all voting securities of such party outstanding immediately prior to such Transaction represent (by being converted into voting securities of such issuer) less than 75% of the voting power of the issuer outstanding immediately after such Transaction).

 

For purposes of this Section 3(ii), a “Bankruptcy Event” will be deemed to have occurred with respect to a party upon such party’s insolvency, general assignment for the benefit of creditors, such party’s voluntary commencement of any case, proceeding, or other action

 

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seeking reorganization, arrangement, adjustment, liquidation, dissolution, or consolidation of such party’s debts under any law relating to bankruptcy, insolvency, or reorganization, or relief of debtors, or seeking appointment of a receiver, trustee, custodian, or other similar official for such party or for all or any substantial part of such party’s assets (each, a “Bankruptcy Proceeding”), or the involuntary filing against Liberty or Splitco, as applicable, of any Bankruptcy Proceeding that is not stayed within 60 days after such filing.

 

Section 4.  Miscellaneous.

 

(i)  Entire Agreement; Severability. This Agreement (including the schedules hereto), the Reorganization Agreement, the Services Agreement and the Tax Sharing Agreement constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and thereof, and supersedes all prior agreements and understandings, oral and written, among the parties hereto with respect to such subject matter. It is the intention of the parties hereto that the provisions of this Agreement will be enforced to the fullest extent permissible under all applicable laws and public policies, but that the unenforceability of any provision hereof (or the modification of any provision hereof to conform with such laws or public policies, as provided in the next sentence) will not render unenforceable or impair the remainder of this Agreement. Accordingly, if any provision is determined to be invalid or unenforceable either in whole or in part, this Agreement will be deemed amended to delete or modify, as necessary, the invalid or unenforceable provisions and to alter the balance of this Agreement in order to render the same valid and enforceable, consistent (to the fullest extent possible) with the intent and purposes hereof. If the cost of any service to be provided to Liberty under the Services Agreement is included in the Annual Allocation Expense payable hereunder, then the cost of such service shall not also be payable by Liberty under the Services Agreement.

 

(ii)  Notices.  All notices and communications hereunder will be in writing and will be deemed to have been duly given if delivered personally or mailed, certified or registered mail with postage prepaid, or sent by confirmed facsimile, addressed as follows:

 

If to LPH:

 

Liberty Property Holdings, Inc.

c/o Liberty Media Corporation

12300 Liberty Boulevard

Englewood, Colorado 80112

Attention:  General Counsel

Facsimile:  (720) 875-5401

 

If to Liberty:

 

Liberty Interactive Corporation

12300 Liberty Boulevard

Englewood, Colorado 80112

Attention:  General Counsel

Facsimile:  (720) 875-5401

 

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or to such other address (or to the attention of such other person) as the parties may hereafter designate in writing.  All such notices and communications will be deemed to have been given on the date of delivery if sent by facsimile or personal delivery, or the third day after the mailing thereof, except that any notice of a change of address will be deemed to have been given only when actually received.

 

(iii)  Governing Law.  This Agreement and the legal relations among the parties hereto will be governed in all respects, including validity, interpretation and effect, by the laws of the State of Colorado applicable to contracts made and performed wholly therein, without giving effect to any choice or conflict of laws provisions or rules that would cause the application of the laws of any other jurisdiction.

 

(iv)  No Third-Party Rights.  Nothing expressed or referred to in this Agreement is intended or will be construed to give any person other than the parties hereto and their respective successors and permitted assigns any legal or equitable right, remedy or claim under or with respect to this Agreement, or any provision hereof, it being the intention of the parties hereto that this Agreement and all of its provisions and conditions are for the sole and exclusive benefit of the parties to this Agreement and their respective successors and assigns.

 

(v)   Assignment.  This Agreement will inure to the benefit of and be binding on the parties to this Agreement and their respective legal representatives, successors and permitted assigns.  Except as expressly contemplated hereby, this Agreement, and the obligations arising hereunder, may not be assigned by either party to this Agreement, provided, however, that LPH and Liberty may assign their respective rights, interests, duties, liabilities and obligations under this Agreement to any of their respective wholly-owned Affiliates (as defined in the Services Agreement), but such assignment shall not relieve LPH or Liberty, as the assignor, of its obligations hereunder.

 

(vi)  Amendment. Any amendment, modification or supplement of or to any term or condition of this Agreement will be effective only if in writing and signed by both parties hereto.

 

(vii)  Further Actions.  The parties will execute and deliver all documents, provide all information, and take or forbear from all actions that may be necessary or appropriate to achieve the purposes of this Agreement.

 

(viii)  Force Majeure.  Neither party will be liable to the other party with respect to any nonperformance or delay in performance of its obligations under this Agreement to the extent such failure or delay is due to any action or claims by any third party, labor dispute, labor strike, weather conditions or any cause beyond a party’s reasonable control.  Each party agrees that it will use all commercially reasonable efforts to continue to perform its obligations under this Agreement, to resume performance of its obligations under this Agreement, and to minimize any delay in performance of its obligations under this Agreement notwithstanding the occurrence of any such event beyond such party’s reasonable control.

 

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If the foregoing meets with your approval, kindly execute below and return a copy to the undersigned.

 

	
 
    	
 
    	
Very   truly yours,
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
LIBERTY   PROPERTY HOLDINGS, INC.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Charles Y. Tanabe
    
	
 
    	
 
    	
 
    	
Name:
    	
Charles   Y. Tanabe
    
	
 
    	
 
    	
 
    	
Title:
    	
Executive   Vice President and General Counsel
    
	
 
    	
 
    	
 
    	
 
    
	
Accepted and agreed this 23rd day of September,   2011:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
LIBERTY INTERACTIVE CORPORATION
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Charles Y. Tanabe
    	
 
    	
 
    	
 
    
	
 
    	
Name:  Charles Y. Tanabe
    	
 
    	
 
    	
 
    
	
 
    	
Title:    Executive Vice President and General   Counsel
    	
 
    	
 
    	
 
    

 

6Exhibit 10.8

 

AIRCRAFT TIME SHARING AGREEMENT

 

This Aircraft Time Sharing Agreement (“Agreement”) is effective as of the 23rd day of September, 2011 (“Effective Date”), by and between Liberty Media Corporation (formerly known as Liberty CapStarz, Inc.), with an address of 12300 Liberty Boulevard, Englewood, Colorado 80112 (“Lessor”), and Liberty Interactive Corporation (formerly known as Liberty Media Corporation), with an address of 12300 Liberty Boulevard, Englewood, Colorado 80112 (“Lessee”).

 

RECITALS

 

WHEREAS, Lessor is the owner of that certain Dassault Falcon 900EX aircraft, bearing manufacturer’s serial number 101 (the “Aircraft”), currently registered with the Federal Aviation Administration (“FAA”) as N730LM;

 

WHEREAS, Lessor employs a fully qualified flight crew to operate the Aircraft;

 

WHEREAS, Lessor desires to lease the Aircraft to Lessee and to provide a fully qualified flight crew for all operations on a periodic, non-exclusive time sharing basis, as defined in Section 91.501(c)(1) of the Federal Aviation Regulations (“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.                                       Lessor agrees to lease the Aircraft to Lessee on a periodic, non-exclusive basis, and to provide a fully qualified flight crew for all operations, pursuant and subject to the provisions of FAR Section 91.501(c)(1) and the terms of this Agreement.  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, Lessor, as the party furnishing the Aircraft and flight crew and exercising complete control over all phases of aircraft operation, shall be deemed to have operational control of the Aircraft as such term is defined in 14 C.F.R. Section 1.1.  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.  Either party may at any time terminate this Agreement (including during the initial term) upon 30 days’ prior written notice to the other party.

 

2.                                       Lessee shall pay Lessor an amount equal to 200% of the actual expenses for fuel for each flight conducted under this Agreement, as permitted by FAR Section 91.501(d) (the “Time Sharing Charge”).  For clarification, in no event shall the Time Sharing Charge paid by Lessee exceed those charges specifically permitted in FAR Section 91.501(d), 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.

 

3.                                       Lessor will pay 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 Lessor 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, Lessor 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 Lessor 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 Lessor 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 Lessor otherwise agrees.  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 Lessor or Lessor’s 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 Lessor or Lessor’s flight crew.

 

5.                                       Lessor 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 Lessor will use commercially reasonable efforts to accommodate Lessee’s needs and to avoid conflicts in scheduling.

 

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6.                                       As between Lessor and Lessee, Lessor shall be solely responsible for securing 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, 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 judgment would compromise the safety of the flight.

 

7.                                       Lessor shall employ, pay for and provide to Lessee a qualified flight crew for each flight undertaken under this Agreement.

 

8.                                       In accordance with applicable FARs, the qualified flight crew provided by Lessor 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 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 Lessor 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 or any other event or circumstance beyond the reasonable control of Lessor.

 

9.                                       (a)                                  At all times during the term of this Agreement, Lessor shall cause to be carried and maintained, at Lessor’s cost and expense, 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 Lessor shall determine in its sole discretion.  Lessor shall also bear the cost of paying any deductible amount on any policy of insurance in the event of a claim or loss.

 

(b)                                 Any policies of insurance carried in accordance with this Agreement:  (i) shall name Lessee as an additional insured; (ii) shall contain a waiver by the underwriter thereof of any right of subrogation against Lessee; and (iii) shall require the insurers to provide at least 30 days’ prior written notice (or at least seven days’ in the case of any war-risk insurance) to Lessee if the insurers cancel insurance for any reason whatsoever; provided, however, that the insurers shall provide at least ten days’ prior written notice if the same is allowed to lapse for non-payment of premium.  Each liability policy shall be primary without right of contribution from any other insurance that is carried by Lessee or Lessor and shall expressly provide that all of the provisions thereof, except the limits of liability, shall operate in the same manner as if there were a separate policy covering each insured.

 

(c)                                  Lessor shall obtain the approval of this Agreement by the insurance carrier for each policy of insurance on the Aircraft.  If requested by Lessee, Lessor shall arrange for a Certificate of Insurance evidencing the insurance coverage with respect to the Aircraft carried and maintained by Lessor to be given by its insurance carriers to Lessee or will provide Lessee

 

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with a copy of such insurance policies.  Lessor will give Lessee reasonable advance notice of any material modifications to insurance coverage relating to the Aircraft.

 

10.                               (a)                                  Lessee agrees that the proceeds of insurance will be Lessee’s sole recourse against Lessor with respect to any claims that Lessee may have under this Agreement, except in the event of gross negligence or willful misconduct by Lessor.

 

(b)                                  THE PROVISIONS OF THIS SECTION 10 SHALL SURVIVE INDEFINITELY THE TERMINATION OR EXPIRATION OF THE AGREEMENT.

 

11.                                 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; and

 

(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.

 

12.                                 For purposes of this Agreement, the permanent base of operation of the Aircraft shall be Centennial Airport, Englewood, Colorado.

 

13.                                 A copy of this Agreement shall be carried in the Aircraft and available for review upon the request of the Federal Aviation Administration on all flights conducted pursuant to this Agreement.

 

14.                                 Lessee shall not assign this Agreement or its interest herein to any other person or entity without the prior written consent of Lessor, which may be granted or denied in Lessor’s 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.

 

15.                                 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

 

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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.”

 

16.                                 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 Lessor or Lessee at their respective addresses set forth above, or else as otherwise directed by the other party from time to time in writing.

 

17.                                 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.

 

18.                                 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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19.                                 TRUTH IN LEASING STATEMENT UNDER FAR SECTION 91.23

 

THE AIRCRAFT, A DASSAULT FALCON 900EX, MANUFACTURER’S SERIAL NO. 101, CURRENTLY REGISTERED WITH THE FEDERAL AVIATION ADMINISTRATION AS N730LM, HAS BEEN MAINTAINED AND INSPECTED UNDER FAR PART 91 DURING THE 12 MONTH PERIOD PRECEDING THE DATE OF THIS LEASE.

 

THE AIRCRAFT WILL BE MAINTAINED AND INSPECTED UNDER FAR PART 91 FOR OPERATIONS TO BE CONDUCTED UNDER THIS LEASE.  DURING THE DURATION OF THIS LEASE, LIBERTY MEDIA CORPORATION, 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 MEDIA CORPORATION, LOCATED AT 12300 LIBERTY BOULEVARD, ENGLEWOOD, COLORADO 80112, THROUGH ITS UNDERSIGNED AUTHORIZED SIGNATORY BELOW, CERTIFIES THAT LESSOR 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.

 

 

	
LESSOR
    	
 
    	
LESSEE
    
	
 
    	
 
    	
 
    
	
LIBERTY MEDIA CORPORATION
    	
 
    	
LIBERTY   INTERACTIVE
    
	
 
    	
 
    	
CORPORATION
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Charles Y. Tanabe
    	
 
    	
By:
    	
/s/   Charles Y. Tanabe
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Charles   Y. Tanabe
    	
 
    	
Name:
    	
Charles   Y. Tanabe
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
Executive   Vice President
    	
 
    	
Title:
    	
Executive   Vice President
    

 

 

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.

 

 

 

AIRCRAFT TIME SHARING AGREEMENT

 

This Aircraft Time Sharing Agreement (“Agreement”) is effective as of the 23rd day of September, 2011 (“Effective Date”), by and between Liberty Media Corporation (formerly known as Liberty CapStarz, Inc.), with an address of 12300 Liberty Boulevard, Englewood, Colorado 80112 (“Lessor”), and Liberty Interactive Corporation (formerly known as Liberty Media Corporation), with an address of 12300 Liberty Boulevard, Englewood, Colorado 80112 (“Lessee”).

 

RECITALS

 

WHEREAS, Lessor is the owner of that certain Dassault Falcon 900EX aircraft, bearing manufacturer’s serial number 74 (the “Aircraft”), currently registered with the Federal Aviation Administration (“FAA”) as N740LM;

 

WHEREAS, Lessor employs a fully qualified flight crew to operate the Aircraft;

 

WHEREAS, Lessor desires to lease the Aircraft to Lessee and to provide a fully qualified flight crew for all operations on a periodic, non-exclusive time sharing basis, as defined in Section 91.501(c)(1) of the Federal Aviation Regulations (“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.                                       Lessor agrees to lease the Aircraft to Lessee on a periodic, non-exclusive basis, and to provide a fully qualified flight crew for all operations, pursuant and subject to the provisions of FAR Section 91.501(c)(1) and the terms of this Agreement.  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, Lessor, as the party furnishing the Aircraft and flight crew and exercising complete control over all phases of aircraft operation, shall be deemed to have operational control of the Aircraft as such term is defined in 14 C.F.R. Section 1.1.  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.  Either party may at any time terminate this Agreement (including during the initial term) upon 30 days’ prior written notice to the other party.

 

2.                                       Lessee shall pay Lessor an amount equal to 200% of the actual expenses for fuel for each flight conducted under this Agreement, as permitted by FAR Section 91.501(d) (the “Time Sharing Charge”).  For clarification, in no event shall the Time Sharing Charge paid by Lessee exceed those charges specifically permitted in FAR Section 91.501(d), 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.

 

3.                                       Lessor will pay 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 Lessor 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, Lessor 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 Lessor 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 Lessor 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 Lessor otherwise agrees.  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 Lessor or Lessor’s 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 Lessor or Lessor’s flight crew.

 

5.                                       Lessor 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 Lessor will use commercially reasonable efforts to accommodate Lessee’s needs and to avoid conflicts in scheduling.

 

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6.                                       As between Lessor and Lessee, Lessor shall be solely responsible for securing 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, 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 judgment would compromise the safety of the flight.

 

7.                                       Lessor shall employ, pay for and provide to Lessee a qualified flight crew for each flight undertaken under this Agreement.

 

8.                                       In accordance with applicable FARs, the qualified flight crew provided by Lessor 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 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 Lessor 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 or any other event or circumstance beyond the reasonable control of Lessor.

 

9.                                       (a)                                  At all times during the term of this Agreement, Lessor shall cause to be carried and maintained, at Lessor’s cost and expense, 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 Lessor shall determine in its sole discretion.  Lessor shall also bear the cost of paying any deductible amount on any policy of insurance in the event of a claim or loss.

 

(b)                                 Any policies of insurance carried in accordance with this Agreement:  (i) shall name Lessee as an additional insured; (ii) shall contain a waiver by the underwriter thereof of any right of subrogation against Lessee; and (iii) shall require the insurers to provide at least 30 days’ prior written notice (or at least seven days’ in the case of any war-risk insurance) to Lessee if the insurers cancel insurance for any reason whatsoever; provided, however, that the insurers shall provide at least ten days’ prior written notice if the same is allowed to lapse for non-payment of premium.  Each liability policy shall be primary without right of contribution from any other insurance that is carried by Lessee or Lessor and shall expressly provide that all of the provisions thereof, except the limits of liability, shall operate in the same manner as if there were a separate policy covering each insured.

 

(c)                                  Lessor shall obtain the approval of this Agreement by the insurance carrier for each policy of insurance on the Aircraft.  If requested by Lessee, Lessor shall arrange for a Certificate of Insurance evidencing the insurance coverage with respect to the Aircraft carried and maintained by Lessor to be given by its insurance carriers to Lessee or will provide Lessee

 

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with a copy of such insurance policies.  Lessor will give Lessee reasonable advance notice of any material modifications to insurance coverage relating to the Aircraft.

 

10.                               (a)                                  Lessee agrees that the proceeds of insurance will be Lessee’s sole recourse against Lessor with respect to any claims that Lessee may have under this Agreement, except in the event of gross negligence or willful misconduct by Lessor.

 

(b)                                  THE PROVISIONS OF THIS SECTION 10 SHALL SURVIVE INDEFINITELY THE TERMINATION OR EXPIRATION OF THE AGREEMENT.

 

11.                                 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; and

 

(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.

 

12.                                 For purposes of this Agreement, the permanent base of operation of the Aircraft shall be Centennial Airport, Englewood, Colorado.

 

13.                                 A copy of this Agreement shall be carried in the Aircraft and available for review upon the request of the Federal Aviation Administration on all flights conducted pursuant to this Agreement.

 

14.                                 Lessee shall not assign this Agreement or its interest herein to any other person or entity without the prior written consent of Lessor, which may be granted or denied in Lessor’s 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.

 

15.                                 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

 

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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.”

 

16.                                 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 Lessor or Lessee at their respective addresses set forth above, or else as otherwise directed by the other party from time to time in writing.

 

17.                                 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.

 

18.                                 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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19.                                 TRUTH IN LEASING STATEMENT UNDER FAR SECTION 91.23

 

THE AIRCRAFT, A DASSAULT FALCON 900EX, MANUFACTURER’S SERIAL NO. 74, CURRENTLY REGISTERED WITH THE FEDERAL AVIATION ADMINISTRATION AS N740LM, HAS BEEN MAINTAINED AND INSPECTED UNDER FAR PART 91 DURING THE 12 MONTH PERIOD PRECEDING THE DATE OF THIS LEASE.

 

THE AIRCRAFT WILL BE MAINTAINED AND INSPECTED UNDER FAR PART 91 FOR OPERATIONS TO BE CONDUCTED UNDER THIS LEASE.  DURING THE DURATION OF THIS LEASE, LIBERTY MEDIA CORPORATION, 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 MEDIA CORPORATION, LOCATED AT 12300 LIBERTY BOULEVARD, ENGLEWOOD, COLORADO 80112, THROUGH ITS UNDERSIGNED AUTHORIZED SIGNATORY BELOW, CERTIFIES THAT LESSOR 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.

 

	
LESSOR
    	
 
    	
LESSEE
    
	
 
    	
 
    	
 
    
	
LIBERTY MEDIA CORPORATION
    	
 
    	
LIBERTY   INTERACTIVE
    
	
 
    	
 
    	
CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Charles Y. Tanabe
    	
 
    	
By:
    	
/s/   Charles Y. Tanabe
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Charles   Y. Tanabe
    	
 
    	
Name:
    	
Charles   Y. Tanabe
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
Executive   Vice President
    	
 
    	
Title:
    	
Executive   Vice President
    

 

 

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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