Document:

ex10-3.htm

Exhibit 10.3

TREDEGAR CORPORATION

NOTICE OF NONSTATUTORY STOCK OPTION GRANT

You have been granted the following stock option by the Executive Compensation Committee of the Board of Directors of Tredegar Corporation (“Tredegar”):

	
Name of Participant:

	
[Name]

	  	  
	
Date of Grant:

	
February 15, 2011

	  	  
	
Number of Shares:

	
[Number] Shares of Common Stock

	  	  
	
Option Price:

	
$________ per share

	  	  
	
Type of Grant:

	
Nonstatutory Stock Option

	  	  
	
Vesting:

	
100% after two years of continued employment by Tredegar or one of its subsidiaries (February 15, 2013)

	  	  
	
Expiration Date:

	
February 15, 2018, unless terminated earlier in accordance with the attached Nonstatutory Stock Option Terms and Conditions.  Please note that the event that most commonly triggers an early termination of your option is the termination of employment with Tredegar.  There are, however, other triggering events, so be sure to review the attached Nonstatutory Stock Option Terms and Conditions carefully.

	  	  
	
Transferability:

	
This Option is transferable by will or by the laws of descent and distribution. This Option is also transferable in accordance with the provisions of Section 6.05 of the Plan, but any such transferee may not subsequently transfer this Option except by will or by the laws of descent and distribution.

In addition to the foregoing terms, your stock option grant is subject to all of the terms and conditions contained in the attached Nonstatutory Stock Option Terms and Conditions which are incorporated in this Notice of Nonstatutory Stock Option Grant by this reference.

Please acknowledge your acceptance of this stock option grant and the attached Nonstatutory Stock Option Terms and Conditions by signing and returning one copy of this Notice of Nonstatutory Stock Option Grant to Pat Thomas, Tredegar Corporation, 1100 Boulders Parkway, Richmond, Virginia, 23225.

 

	 	 	 	TREDEGAR CORPORATION 
	 	 	 	 
	 	 	 	 
	 	 	 	By: 	 
	 	 	 	 
	 	 	 	 
	 	 	 	Participant
	 	 	 	 
	 	 	 	 
	 	 	 	Date: 	 
	 	 	 	 

 

  

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TREDEGAR CORPORATION

NONSTATUTORY STOCK OPTION TERMS AND CONDITIONS

THESE NONSTATUTORY STOCK OPTION TERMS AND CONDITIONS (“Terms and Conditions”) effective as of the 15th day of February, 2011, govern the nonstatutory stock option grant made by Tredegar Corporation, a Virginia corporation (the “Company”), to the participant (the “Participant”) named in the Notice of Stock Option Grant to which these Terms and Conditions are attached (the “Grant Notice”), and are made in accordance with and subject to the provisions of the Company’s Amended and Restated 2004 Equity Incentive Plan (the “Plan”).  A copy of the Plan has been made available to Participant.  All terms used in these Terms and Conditions that are defined in the Plan have the same meaning given them in the Plan.

1.             Grant of Option.  In accordance with the Plan, and effective as of the Date of Grant specified in the Grant Notice (the “Date of Grant”), the Company granted to Participant, subject to the terms and conditions of the Plan and these Terms and Conditions, the right and option to purchase from the Company all or part of the number of shares of Common Stock specified in the Grant Notice (the “Option”) at the option price specified in the Grant Notice (the “Option Price”).  This Option is not an “incentive stock option” under Section 422 of the Code.  This Option may be exercised in accordance with these Terms and Conditions.  “Exercising” this Option means purchasing all or part of the shares of Common Stock specified in the Grant Notice at the Option Price.

 

2.             Terms and Conditions.  This Option is subject to the following additional terms and conditions:

 

(a)           Expiration Date.  The Expiration Date of this Option shall be as specified in the Grant Notice.

 

(b)           Exercise of Option.  This Option shall be exercisable or vested if Participant remains in the continuous employ of the Company or an Affiliate from the Date of Grant until the earlier of (i) the second anniversary of the Date of Grant, (ii) the date of Participant’s death, (iii) the date that Participant’s employment with the Company and its Affiliates ends on account of Disability, (iv) the Participant’s Normal Retirement or (v) a Control Change Date.  Once this Option has become exercisable or vested it shall continue to be exercisable, in whole or in part, until the earlier of the Expiration Date or the termination of Participant’s rights hereunder pursuant to paragraph 4, 5, 6, 7, 8 or 9.  A partial exercise of this Option shall not affect Participant’s right to exercise this Option with respect to the remaining shares, subject to the conditions of the Plan and these Terms and Conditions.

 

(c)           Method of Exercising and Payment for Shares.  This Option must be exercised by written notice delivered to the attention of the Company’s Secretary at the Company’s principal office in Richmond, Virginia.  The exercise date shall be (i) in the case of notice by mail or nationally recognized courier, the date of postmark or (ii) in the case of notice by any other means, the date of receipt by the Company’s Secretary.  The notice must be accompanied by payment of the Option Price in full, in cash or cash equivalent acceptable to the Committee, or by the surrender of shares of Common Stock with an aggregate Fair Market Value (determined as of the day preceding the exercise date) which cannot be less than the Option Price.

 

  

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(d)           Transferability.  This Option is transferable by will or by the laws of descent and distribution.  During the Participant’s lifetime, this Option is also transferable in accordance with the provisions of Section 6.05 of the Plan, but any such transferee may not subsequently transfer this Option except by will or by the laws of descent and distribution.

 

3.             Termination Before Vesting.  This Option shall automatically expire and be of no force or effect if Participant’s employment with the Company and its Affiliates ends before this Option has become vested in accordance with paragraph 2(b).

 

4.             Termination Generally.  If Participant’s employment with the Company and its Affiliates ends on or after this Option has become vested in accordance with paragraph 2(b), Participant may exercise this Option for all or part of the vested shares that remain subject to this Option until the earlier of (i) the Expiration Date or (ii) the date that is three months after the date of termination of Participant’s employment with the Company and its Affiliates.  If the preceding sentence applies to Participant and Participant dies before the termination of Participant’s rights under the preceding sentence, Participant’s Beneficiary may exercise this Option for all or part of the vested shares that remain subject to this Option until the earlier of (i) the Expiration Date or (ii) the date that is three months after the date of termination of Participant’s employment with the Company and its Affiliates.  This paragraph shall not apply if Participant’s employment ends on account of Participant’s Normal Retirement, Early Retirement, death or Disability as provided in paragraphs 5, 6, 7 and 8, respectively.

 

5.             Normal Retirement.  If Participant remains in the continuous employ of the Company or an Affiliate from the Date of Grant until Participant’s Normal Retirement, Participant may exercise this Option for all or part of the vested shares that remain subject to this Option until the earlier of (i) the Expiration Date or (ii) the second anniversary of the date of Participant’s Normal Retirement.  If the preceding sentence applies to Participant and Participant dies before the termination of Participant’s rights under the preceding sentence, Participant’s Beneficiary may exercise this Option for all or part of the vested shares that remain subject to this Option until the earlier of (i) the Expiration Date, (ii) the second anniversary of the date of Participant’s Normal Retirement and (iii) the ninetieth day after Participant’s death.

 

6.             Early Retirement.  If Participant (i) remains in the continuous employ of the Company or an Affiliate from the Date of Grant until Participant’s Early Retirement and (ii) such Early Retirement becomes effective on or after the second anniversary of the Date of Grant, Participant may exercise this Option for all or part of the vested shares that remain subject to this Option in accordance with paragraph 2 above until the earlier of (i) the Expiration Date or (ii) the second anniversary of the date of Participant’s Early Retirement.  If the preceding sentence applies to Participant and Participant dies before the termination of Participant’s rights under the preceding sentence, Participant’s Beneficiary may exercise this Option for all or part of the vested shares that remain subject to this Option until the earlier of (i) the Expiration Date, (ii) the second anniversary of the date of Participant’s Early Retirement and (iii) the ninetieth day after Participant’s death.

 

  

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7.             Termination On Account of Death.  If Participant remains in the continuous employ of the Company or an Affiliate from the Date of Grant until Participant’s death, Participant’s Beneficiary may exercise this Option for all or part of the vested shares that remain subject to this Option until the earlier of (i) the Expiration Date or (ii) the first anniversary of the date of Participant’s death.

 

8.             Termination on Account of Disability.  If Participant remains in the continuous employ of the Company or an Affiliate from the Date of Grant until the date Participant’s employment with the Company and its Affiliates ends on account of Disability, Participant may exercise this Option for all or part of the vested shares that remain subject to this Option until the earlier of (i) the Expiration Date or (ii) the first anniversary of the date of Participant’s termination of employment on account of Disability.  If the preceding sentence applies to Participant and Participant dies before the termination of Participant’s rights under the preceding sentence, Participant’s Beneficiary may exercise this Option until the earlier of (i) the Expiration Date or (ii) the first anniversary of the date of Participant’s termination of employment on account of Disability.  For purposes of this Agreement, a termination of employment shall be on account of Disability if Participant’s employment with the Company and its Affiliates ends because Participant is permanently and totally disabled within the meaning of Section 22(e)(3) of the Code.

 

9.             Cancellation or Substitution.  Notwithstanding any other provision of this Agreement, upon a Change in Control the Company, in its discretion, may (i) cancel this Option in exchange for a cash payment equal to the excess of the Fair Market Value on the Control Change Date over the Option Price multiplied by the number of shares of Common Stock for which this Option remains unexercised on the Control Change Date or (ii) provide that this Option shall be assumed by, or replaced with a substitute option granted by, the Company’s successor in the manner described in Section 424 of the Code.

 

10.           Participant’s Misconduct.  Notwithstanding any other provision in these Terms and Conditions to the contrary, this Option may not be exercised after Participant’s termination of employment with the Company and its Affiliates if during such employment or thereafter, Participant has engaged in actions or conduct that are harmful or in any way contrary to the best interests of the Company or an Affiliate.

 

11.           Definitions.  The following definitions shall apply to these Terms and Conditions:

 

(a)           Beneficiary means Participant’s estate or the person or persons or entity or entities to whom Participant’s rights under this Option pass by will or the laws of descent and distribution.

 

(b)           Control Change Date means the date on which a Change in Control (as defined below) occurs.  If a Change in Control occurs on account of a series of trans­actions, the Control Change Date is the date of the last of such transactions.

 

(c)           Change in Control means the occurrence of any of the following events:

 

  

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(1)

	
any Person or group (within the meaning of Sections 13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934, as amended) (other than a Person who is not an Acquiring Person), at any time becomes the Beneficial Owner of 50% or more of the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Voting Securi­ties”), other than (i) through an acquisition of Voting Securities directly from the Company, (ii) as a result of the Company’s repur­chase of Voting Secu­rities if, thereafter, such Benefi­cial Owner pur­chases no additional Voting Securities, or (iii) pur­suant to a Business Combina­tion (as defined below) that does not constitute a Change in Control pursuant to subparagraph 8(b)(3) below;

 

	
  

	
(2)

	
Continuing Directors cease to constitute a majority of the members of the Board other than pur­suant to a Business Combination that does not constitute a Change in Control pursuant to subparagraph 8(b)(3) below;

 

	
  

	
(3)

	
the shareholders of the Company approve a reorganization, merger, share exchange or consoli­dation (a “Business Combination”), in each case, unless immedi­ately following such Business Combina­tion, (i) all or substantially all of the Persons who were the Beneficial Owners, respectively, of the Common Stock and Voting Securities outstanding imme­diately prior to such Business Combination Benefi­cially Own more than 80% of, respec­tively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securi­ties entitled to vote generally in the election of directors, as the case may be, of the corporation result­ing from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company through one or more Subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combina­tion, of the Common Stock and Voting Securities, as the case may be, (ii) no Person (other than a Person who is not an Acquiring Person) Beneficially Owns 50% or more of, respectively, the then outstanding shares of common stock of the cor­poration resulting from such Business combination or the combined voting power of the then outstanding voting securities of such corporation and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination are Continuing Directors; or

 

	
  

	
(4)

	
the shareholders of the Company approve a complete liquidation or dissolution of the Company or the sale or other disposition of all or substan­tially all of the assets of the Company, in each case, unless immediately following such liquidation, dissolution, sale or other disposition, (i) more than 80% of, respectively, the then outstanding shares of common stock of such cor­poration and the combined voting power of the then out­standing voting securities of such corporation entitled to vote generally in the election of directors is then Bene­fi­cially Owned by all or substantially all of the Persons who were the Beneficial Owners, respec­tively, of the Common Stock and Voting Securities outstanding immedi­ately prior to such sale or other disposition in substan­tially the same proportion as their ownership, immedi­ately prior to such sale or other disposition, of such Common Stock and Voting Securities, as the case may be, (ii) less than 20% of, respectively, the then out­standing shares of common stock of such corporation and the com­bined voting power of the then outstanding voting securi­ties of such corporation entitled to vote generally in the election of directors is then Beneficially Owned by any Person (other than any Person who is not an Acquiring Person), and (iii) at least a majority of the members of the board of directors of such corporation are Continuing Directors immedi­ately following such sale or disposition.

 

  

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For purposes of the definition of Change of Control, the terms Acquiring Person, Beneficial Owner, Company, Continuing Director, and Person shall have the same definitions given them in the Amended and Restate Rights Agreement between Tredegar Corporation and National City Bank, dated as of June 30, 2009, as amended.

(d)           Early Retirement means the voluntary separation by Participant from the employment with the Company or an Affiliate on or after the date Participant has attained age fifty-five and has ten years of service with the Company or an Affiliate but before the date Participant has reached age sixty-five.

 

(e)           Normal Retirement means the voluntary separation by Participant from the employment with the Company or an Affiliate on or after the date Participant has reached age sixty-five.

 

12.           Fractional Shares.  Fractional shares shall not be issuable hereunder, and when any provision hereof may entitle Participant to a fractional share such fraction shall be disregarded.

 

13.           No Right to Continued Employment.  This Option does not give Participant any right with respect to continuance of employment by the Company or an Affiliate, nor shall it interfere in any way with the right of the Company or an Affiliate to terminate his or her employment at any time.

 

14.           Change in Capital Structure.  The terms of this Option shall be adjusted as the Committee determines is equitably required in the event the Company effects one or more stock dividends, stock split-ups subdivisions or consolidations of shares, other similar changes in capitalization or such other events as are described in the Plan.

 

15.           Governing Law.  These Terms and Conditions and the Grant Notice shall be governed by the laws of the Commonwealth of Virginia.

 

16.           Conflicts.  In the event of any conflict between the provisions of the Plan as in effect on the Date of Grant and the provisions of these Terms and Conditions or the Grant Notice, the provisions of the Plan shall govern.  All references herein to the Plan shall mean the plan as in effect on the Date of Grant.

 

  

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17.           Participant Bound by Plan.  Participant hereby acknowledges that a copy of the Plan has been made available to him or her and agrees to be bound by all the terms and provisions of the Plan.

 

18.           Binding Effect.  Subject to the limitations stated above and in the Plan, these Terms and Conditions and the Grant Notice shall be binding upon Participant and his or her successors in interest and the successors of the Company.

 

19.           Effectiveness.  These Terms and Conditions and the Grant Notice shall be of no force or effect and no option shall be granted unless Participant is an employee of the Company or an Affiliate on the Date of Grant.

 

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EXHIBIT 10.68

AIRCRAFT DRY LEASE AGREEMENT

THIS AIRCRAFT DRY LEASE AGREEMENT (“Lease”) is entered into effective as of February 16, 2011, by and between STERLING AVIATION LLC, a New York limited liability company with an address at 340 Crossways Park Drive, Woodbury, New York 11797 (“Lessor”), and CSC TRANSPORT, INC., a Delaware corporation with an address at 8000 Republic Airport, Hangar 5, Farmingdale, New York 11735 (“Lessee”).

W I T N E S S E T H:

WHEREAS, Lessor is the lessee of a Gulfstream Aerospace G-IV aircraft, manufacturer’s serial number 1313, United States registration N100DF (the “Aircraft”); and

WHEREAS, Dolan Family Office LLC (“DFO”), an affiliate of Lessor, and Lessee have entered into a Time Sharing Agreement dated as of July 10, 2009 (the “Time Sharing Agreement”) pursuant to which DFO agreed to wet lease the Aircraft to Lessee in accordance with the provisions of Section 91.501(b)(6) of the Federal Aviation Regulations (“FARs”); and

WHEREAS, DFO and Lessee have agreed to terminate the Time Sharing Agreement effective as of the date first set forth above; and

WHEREAS, the parties to this Agreement have agreed that Lessor shall sublease the Aircraft to Lessee on a non-exclusive dry lease basis for use by Lessee upon the terms and subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants, agreements, representations and warranties set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, Lessor and Lessee, intending to be legally bound, agree as follows:

1.             Lease of Aircraft.

(a)            This Lease sets forth the exclusive terms and conditions under which Lessee is entitled to use the Aircraft, and Lessee shall have no right to use the Aircraft except as expressly set forth herein.  Lessor shall sublease the Aircraft to Lessee, and Lessee shall sublease the Aircraft from Lessor, during all Lease Periods throughout the Term (as defined in Section 12) of this Lease as provided hereunder.  “Lease Periods” shall mean those times, if any, when the Aircraft is being utilized by Lessee hereunder, with the consent of Lessor as provided in Section 1(e), for flight operations conducted by Lessee under Part 91 of the FARs, including any deadhead, ferry or repositioning flights to return the Aircraft to the airport at which the Lease Period commenced or to pick up Lessee’s passengers at a remote location away from Republic Airport, Farmingdale, New York (FRG), but excluding any deadhead, ferry and repositioning flights described in Section 1(b) below (“Lessee Flights”).  Lessee’s right to use the Aircraft hereunder during the Term shall be non-exclusive and is subject in all respects to Lessor’s right to use the Aircraft at all times during the Term other than during such Lease Periods under its exclusive operational control and possession, command and control and Lessor’s right to permit other non-exclusive lessees to use the Aircraft under their operational control and possession, command and control.

  

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(b)            Notwithstanding the foregoing, the parties agree that if a trip by Lessee causes or will cause the Aircraft to be at a remote location away from FRG (“Lessee’s Location”), Lessee shall, at Lessor’s request, permit the Aircraft to be relocated from Lessee’s Location to FRG or other location designated by Lessor (and thereafter shall be returned to Lessee’s Location) if Lessor requires use of the Aircraft for one of its affiliated non-exclusive lessees, but only if such itinerary will not unreasonably delay or interfere with any scheduled flight by Lessee. In that event, (i) Lessee’s then-current Lease Period shall terminate effective as of initial engine start-up for the departure flight from Lessee’s Location; (ii) Lessor or its affiliated non-exclusive lessee shall pay all costs incurred during the period in which the Aircraft is away from Lessee’s Location, including all occupied and deadhead legs to ferry the Aircraft from Lessee’s Location and back; and (iii) a new Lease Period shall begin effective as of final engine shut-down upon return of the Aircraft to Lessee’s Location.

(c)            Transfer of the Aircraft from Lessor to Lessee to commence a Lease Period hereunder, and transfer of the Aircraft from Lessee to Lessor to terminate a Lease Period hereunder, shall be evidenced by the entry of appropriate notations of such transfer on the Aircraft's logs.  Upon the commencement or termination of any Lease Period hereunder, the party transferring possession of the Aircraft shall deliver the Aircraft to the other party at FRG or such other location as the parties may agree.  In the case of a transfer of possession from Lessee to Lessor, the Aircraft shall be in at least the same operating condition, order, repair and condition as when received by Lessee at the commencement of the Lease Period, reasonable wear and tear excepted.

(d)            Subject to Aircraft and crew availability, Lessor shall use its good faith efforts, consistent with Lessor’s approved policies, in order to accommodate the needs of Lessee, to avoid conflicts in scheduling with Lessor’s other affiliated non-exclusive lessees’ use of the Aircraft, and to enable Lessee to enjoy the benefits of this Agreement; however, Lessee acknowledges and agrees that notwithstanding anything in this Agreement to the contrary, Lessor shall have sole and exclusive final authority over the scheduling of the Aircraft and Lessor’s other affiliated non-exclusive lessees’ needs for the Aircraft shall take precedence over Lessee’s rights and Lessor’s obligations under this Agreement.

(e)            Lessee shall use its best efforts to give Lessor as much notice as possible of Lessee’s proposed utilization hereunder. If Lessee notifies Lessor pursuant to Section 15 of Lessee’s proposed use of the Aircraft and Lessor consents thereto, the period described in such notice of proposed use may be scheduled by Lessee (unless such proposed use is cancelled by Lessee by like notice to Lessor).  Notwithstanding anything herein to the contrary, all Lessee Flights approved by Lessor and scheduled by Lessee are subject to the absolute right of Lessor to revoke such approval at any time prior to 24 hours before the scheduled departure of the initial flight of the approved itinerary, without liability, upon notice to Lessee. Any notice under this Section 1(e) may be either written or oral, but shall be given only to or by individuals designated by each party from time to time as authorized to act on its behalf for purposes of this Section 1(e).

  

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2.             Rent.

(a)            Lessee shall remit to Lessor as rent for the use of the Aircraft by Lessee during each Lease Period under this Agreement an amount equal to one time (1x) the actual fuel costs for each occupied Lessee Flight during such Lease Period.

(b)            Not later than 30 days after the end of each calendar month during the Term, Lessor shall provide to Lessee a statement showing all use of the Aircraft for Lessee Flights during that month, and a complete accounting detailing any rent due from Lessee for that month.  Notwithstanding anything in this Agreement to the contrary, Lessee shall have no obligation to utilize the Aircraft hereunder, and there shall be no rent payable to Lessor hereunder with respect to any calendar month if Lessee does not use the Aircraft hereunder during such month. All payments of rent due for any month shall be made at Lessor’s address set forth above or at such other place as Lessor may designate to Lessee from time to time, not later than 30 days after receipt of Lessor’s statement.

3.             Expenses.  Lessor shall pay the entire cost of insuring and maintaining the Aircraft during the Term.  Lessee shall be responsible for and shall pay directly or reimburse Lessor for the following trip-specific costs of operating the Aircraft during Lease Periods under this Lease:

	
  

	
(a)

	
travel expenses of crew, including food, lodging and ground transportation;

	
  

	
(b)

	
hangar and tie-down costs away from the Aircraft's base of operation;

	
  

	
(c)

	
additional insurance obtained for the specific flight at the request of    Lessee;

	
  

	
(d)

	
landing fees, airport taxes and similar assessments;

	
  

	
(e)

	
customs, foreign permit and similar fees directly related to the flight;

	
  

	
(f)

	
in-flight food and beverages;

	
  

	
(g)

	
passenger ground transportation;

	
  

	
(h)

	
flight planning and weather contract services; and

	
  

	
(i)

	
fuel costs.

4.             Flight Crew.

(a)            Lessee shall obtain at its sole cost and expense the services of a fully qualified and properly certificated flight crew to operate the Aircraft under this Lease.  All flight crew provided by Lessee to operate the Aircraft during any Lease Period hereunder shall be employees or contractors of Lessee, and Lessee shall be solely responsible for their compensation.

  

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(b)            Only fully-qualified and properly-credentialed flight crews who are included under the insurance coverage required to be maintained hereunder shall be permitted to operate the Aircraft during any Lease Period.  All flight crew utilized by Lessee hereunder shall comply with all applicable regulations, and the requirements of all applicable operations and maintenance manuals.  Lessee shall bear the cost of all initial and recurrent training of the flight crewmembers.

5.             Operational Control; Operations.

(a)            Lessor and Lessee intend that the lease of the Aircraft effected hereby shall be treated as a “dry lease”. Notwithstanding anything in this Lease to the contrary, Lessee shall have complete and exclusive operational control, and complete and exclusive possession, command and control, of the Aircraft for all flights during each Lease Period under this Lease.  Lessee shall have complete and absolute control of the crewmembers in preparation for and in connection with the operation of all flights during each Lease Period under this Lease.  Lessee shall have complete and exclusive responsibility for scheduling, dispatching and flight following of the Aircraft on all flights conducted during Lease Periods under this Lease, which responsibility includes the sole and exclusive right over initiating, conducting and terminating any such flights.  Lessee shall have no operational control over, nor any responsibility for scheduling, dispatching or flight following of, any flights of the Aircraft not conducted during Lease Periods under this Lease, nor any right over initiating, conducting or terminating any such flights.

(b)            Lessee shall use and operate the Aircraft under this Lease only in accordance with applicable manufacturers’ recommendations and airport and climatic conditions. Lessee shall not permit the Aircraft to be maintained, used or operated in violation of any law, rule, regulation, ordinance or order of any governmental authority having jurisdiction, or in violation of any airworthiness certificate, license or registration relating to the Aircraft.

6.             Regulatory.  Lessee shall obtain and maintain in full force and effect any necessary certificates, licenses, permits and authorizations required for its use and operation of the Aircraft hereunder.  Lessee agrees to conduct all operations contemplated by this Lease in compliance with all applicable provisions of the FARs, including, but not limited to, Part 91 thereof.

7.             Records.  Lessee shall maintain any records required by applicable laws, rules or regulations in connection with the operation of the Aircraft during any Lease Period hereunder.  Without limiting the generality of the foregoing, Lessee shall maintain or cause to be maintained flight log books showing the full flight time of the Aircraft during each Lease Period hereunder, and shall keep such logs available for inspection by Lessor or its representatives at all reasonable times.  Lessor shall be entitled to access, upon reasonable notice to Lessee, to inspect any books or records of Lessee that relate to the Aircraft.

8.             Base; Hangarage.  Lessor agrees to provide (or cause to be provided) hangar space for the Aircraft at FRG during the Term.  While the Aircraft is at its home base, the Aircraft shall be kept in an enclosed hangar space at all times overnight, which hangar space shall be heated as required during cold weather for the proper maintenance, security and appearance of the Aircraft.  Lessee shall pay the cost of hangaring the Aircraft at remote locations during any Lease Periods hereunder.

  

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9.             Insurance.  Lessor shall cause the Aircraft to be insured, at its sole cost and expense, in accordance with the requirements of the Aircraft Management Agreement for the Aircraft dated July 9, 2010 among Lessee and the other parties specified therein.  From time to time during the Term, Lessor shall, upon the request of Lessee, cause its insurer to provide Lessee with certificates of insurance or other evidence reasonably satisfactory to Lessee that the insurance coverage required to be furnished by Lessor hereunder is in effect.

10.            Maintenance.  Lessor shall, at its sole cost and expense, (i) enroll or cause the Aircraft to be enrolled on an FAA-approved or manufacturer-approved maintenance and inspection program under Part 91 of the FARs, and (ii) maintain or cause the Aircraft to be maintained in accordance with the requirements of the approved maintenance and inspection program and all applicable FAA regulations.  Lessor represents and warrants that at all times during the Term of this Agreement, the Aircraft will be in airworthy condition and current on the approved maintenance program.

11.            Default.  In addition to the termination rights set forth in Section 12, the non-defaulting party shall have the right to terminate this Lease immediately (without prejudice to any other rights that such party may have) upon written notice to the defaulting party in the event of any one or more of the following Events of Default:

(i)             failure of the defaulting party to make a payment due hereunder within ten (10) days following notice from the non-defaulting party that such payment was not timely made when due;

(ii)            except as provided in Section 11(iii) - (vii), violation or default of any material term, obligation or condition of a non-monetary nature set forth in this Lease, together with a failure to cure within ten (10) days after receipt of written notice of such violation;

(iii)           if Lessee operates or maintains the Aircraft in violation of any law, regulation, directive or order of any governmental authority or in violation of any provision of any insurance policy contemplated by this Lease;

(iv)           if any representation or warranty made in this Lease by Lessee is or becomes false, misleading or incorrect in any material respect;

(v)            lapse of insurance coverage required to be kept in force hereunder;

(vi)           if Lessee or Lessor shall make a general assignment for the benefit of creditors, or be declared insolvent or bankrupt under any bankruptcy, insolvency or other similar law, or commence a voluntary proceeding seeking liquidation, reorganization or other relief under any such law or seeking the appointment of a receiver or liquidator over any substantial portion of its respective assets; or

  

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(vii)          assignment by Lessee of this Lease or any right or interest created hereunder without the prior written consent of Lessor.

12.            Term.  The term of this Agreement (the “Term”) shall commence on the effective date hereof and, unless sooner terminated in accordance with the provisions hereof, shall remain in full force and effect for an initial term ending July 10, 2011 and thereafter shall automatically renew for successive one-year terms upon the same terms and conditions as set forth herein.  Notwithstanding the foregoing, either party shall have the right to terminate this Lease at any time for any reason or no reason by written notice given to the other party not less than 30 days prior to the proposed termination date.  Further, this Lease shall terminate upon the occurrence of a total loss or destruction of the Aircraft, damage to the Aircraft that causes it, in the opinion of Lessor, to be irreparable, or sale or theft of the Aircraft.  Lessee shall promptly notify Lessor of any loss or damage to, or theft of, the Aircraft during any Lease Period hereunder.

13.            Remedies on Default or Termination.  In the event of a termination of this Lease, whether as a result of a default or the expiration of its Term, Lessee shall immediately cease its use of the Aircraft and, if in Lessee’s custody, return the Aircraft and all records pertaining thereto to the custody of Lessor or its agents or representatives as set forth herein at such airport as Lessor and Lessee may agree. Not later than 30 days after the termination, a full accounting shall be made between Lessee and Lessor and all accounts settled between the parties.  In no event shall any termination affect the rights and obligations of the parties arising prior to the effective date of such termination.

14.            Cross Indemnities; LIMITATION ON LIABILITY.

(a)            Without limiting their respective obligations hereunder, each party (in each case, the “Indemnitor”) hereby indemnifies and holds harmless the other party and its affiliates and their respective officers, di­rec­tors, partners, employees, shareholders, members and managers (in each case, collectively, the “Indemnitee”) for any claim, damage, loss, or reasonable expense, includ­ing reasonable attor­neys’ fees (an “Indemnified Loss”), result­ing from bodily injury or property damage aris­ing out of the ownership, maintenance or use of the Aircraft which results from the gross negligence or willful misconduct of such party; pro­vided, however, that neither party will be liable for any In­demnified Loss to the extent:

	
  

	
(i)

	
Such loss is covered by the insurance policies de­scribed in Section 9 (the “Policies”);

	
  

	
(ii)

	
Such loss is covered by the Policies but the amount of such loss exceeds the policy lim­its specified by Lessor;

  

6

  

	
  

	
(iii)

	
Such loss consists of expenses incurred in connection with any loss covered in whole or in part by the Poli­cies but such expenses are not fully covered by the Policies; or

	
  

	
(iv)

	
Such loss is caused by the gross negligence or willful mis­con­duct of the Indemnitee.

(b)           EACH PARTY ACKNOWLEDGES AND AGREES THAT:

	
  

	
(i)

	
THE PROCEEDS OF INSURANCE TO WHICH IT IS ENTITLED;

	
  

	
(ii)

	
ITS RIGHTS TO INDEMNIFICATION FROM THE OTHER PARTY UNDER THIS SECTION 14; AND

	
  

	
(iii)

	
ITS RIGHT TO DIRECT DAMAGES ARISING IN CONTRACT FROM A BREACH OF THE OTHER PARTY’S OBLIGATIONS UNDER THIS AGREEMENT

ARE THE SOLE REMEDIES FOR ANY DAMAGE, LOSS, OR EXPENSE ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEM­PLATED HEREBY.

EXCEPT AS EX­PRESSLY SET FORTH IN THIS SECTION 14, EACH PARTY WAIVES ANY RIGHT TO RECOVER ANY DAMAGE, LOSS OR EXPENSE ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.  IN NO EVENT SHALL EI­THER PARTY BE LIABLE FOR OR HAVE ANY DUTY FOR INDEMNIFI­CATION OR CONTRIBU­TION TO THE OTHER PARTY FOR ANY CLAIMED INDIRECT, SPE­CIAL, INCIDENTAL, CON­SEQUENTIAL, OR PUNI­TIVE DAMAGES, OR FOR ANY DAMAGES CONSIST­ING OF DAMAGES FOR LOSS OF USE, REVENUE, PROFIT, BUSINESS OP­PORTUNITIES AND THE LIKE, OR DEPRE­CIA­TION OF VALUE OF THE AIRCRAFT, OR IN­SUR­ANCE DE­DUCTIBLE, EVEN IF THE PARTY HAD BEEN AD­VISED, OR KNEW OR SHOULD HAVE KNOWN, OF THE POSSI­BILITY OF SUCH DAMAGES.

NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, NEITHER PARTY SHALL HAVE ANY LIABILITY TO THE OTHER PARTY FOR ITS PERFORMANCE OR FAILURE TO PERFORM ANY OF ITS OBLIGATIONS UNDER THIS AGREEMENT (INCLUDING, WITHOUT LIMITATION, IN THE CASE OF ITS NEGLIGENCE) EXCEPT IN THE CASE OF ITS GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

(c)            The provisions of this Section 14 shall survive the termi­nation or expiration of this Agreement.

15.            Notices.  Unless otherwise expressly specified herein, all notices or other communications delivered or given under this Lease shall be in writing and shall be deemed to have been duly given if hand-delivered, sent by certified or registered mail, return receipt requested, by nationally-utilized overnight delivery service, or by confirmed facsimile transmission.  Such notices shall be addressed to the parties at the addresses set forth above, or to such other address as may be designated by any party in a writing delivered to the other in the manner set forth in this Section 15.  Notices shall be deemed to have been given and made on the business day on which hand-delivered or sent by confirmed facsimile, one business day following the date on which sent by nationally-utilized overnight delivery service, or four days following the date on which sent by certified or registered mail, return receipt requested.

  

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16.            Relationship of Parties.  The relationship of the parties created by this Lease is strictly that of lessor and lessee.  Nothing in this Lease is intended, nor shall it be construed so as, to constitute the parties as partners or joint venturers or as principal and agent.

17.            Taxes.  Lessor shall pay all taxes, assessments and charges imposed by any Federal, state, municipal or other public authority upon or relating to the ownership of the Aircraft generally during the Term of this Lease (other than any taxes, fines or penalties imposed upon Lessor as a result of a breach of this Lease by Lessee).  Lessee shall pay all taxes, assessments, and charges imposed by any national, federal, state, municipal or other public authority upon or relating to the rental, use or operation of the Aircraft by Lessee during the Term of this Lease (including any sales or use tax imposed by the State of New York on any lease payment hereunder), other than income taxes of Lessor.  Lessee shall also be liable for any federal excise tax imposed under Internal Revenue Code Section 4261 if such tax is applicable to any or all amounts paid (or deemed to be paid) by Lessee to Lessor hereunder.  Lessee shall pay such tax to Lessor within thirty (30) days after receipt of Lessor’s written invoice therefor.  Each party agrees to indemnify and hold the other harmless against any and all liabilities, costs and expenses (including attorneys' fees) resulting from a breach of its respective undertaking hereunder.

18.            Severability.  Any provision of this Lease that is prohibited or unenforceable shall be ineffective only to the extent of such prohibition or unenforceability.  The invalidity or unenforceability of any term or provision of this Lease shall not affect the validity or enforceability of any other term or provision hereof.

19.            Governing Law.  This Lease shall be governed by and construed in accordance with the law of the State of New York, without regard to its choice of law rules.

20.            Amendment.  This Lease may not be amended, supplemented, modified or terminated, or any of its terms varied, except by an agreement in writing signed by each of the parties hereto.

21.            Counterparts.  This Lease may be executed in counterparts, each of which shall, for all purposes, be deemed an original and all such counterparts, taken together, shall constitute one and the same agreement, even though all parties may not have executed the same counterpart.  Each party may transmit its signature by fax to the other party, and any faxed signature and/or faxed counterpart of this Lease shall have the same force and effect as an original.

  

8

  

22.            Successors and Assigns; Third-Party Beneficiaries.  This Lease shall be binding upon the parties hereto and their respective successors and assigns, and shall inure to the benefit of the parties hereto and, except as otherwise provided herein, to their respective successors and assigns.  Lessee shall not sublease, assign, transfer, pledge or hypothecate the Aircraft or any part thereof, or any of Lessee's interest in this Lease or the Aircraft (including, without limitation, any assignment or transfer pursuant to or as part of any merger, consolidation or other transfer of assets), without the prior written consent of Lessor, which may be given or withheld by Lessor in its sole and absolute discretion.  This Lease shall not be construed to create any third-party beneficiary rights in any person not a party hereto (or a successor to or permitted assign of any such party).

23.            Integration.  This Lease sets forth the entire agreement between the parties with respect to the lease of the Aircraft and supersedes any and all other agreements, understandings, representations, warranties or negotiations by or between the parties with respect thereto, all of which are hereby cancelled.  There are no other agreements or representations, whether oral or written, express or implied, with respect to the subject matter of this Lease that are not expressly set forth in this Lease.

24.            TRUTH IN LEASING.  TRUTH IN LEASING STATEMENT UNDER SECTION 91.23 OF THE FEDERAL AVIATION REGULATIONS:

	
  

	
(a)

	
STERLING AVIATION LLC HEREBY CERTIFIES THAT THE AIRCRAFT HAS BEEN MAINTAINED AND INSPECTED UNDER FAR PART 91 DURING THE 12-MONTH PERIOD PRECEDING THE DATE OF EXECUTION OF THIS AGREEMENT. THE AIRCRAFT WILL BE MAINTAINED AND INSPECTED UNDER FAR PART 91 FOR ALL OPERATIONS TO BE CONDUCTED DURING LEASE PERIODS UNDER THIS LEASE.

	
  

	
(b)

	
CSC TRANSPORT, INC., 8000 REPUBLIC AIRPORT, HANGAR 5, FARMINGDALE, NEW YORK 11735, HEREBY CERTIFIES THAT IT IS RESPONSIBLE FOR OPERATIONAL CONTROL OF THE AIRCRAFT DURING ALL LEASE PERIODS UNDER THIS LEASE.

	
  

	
(c)

	
EACH OF LESSOR AND LESSEE CERTIFIES THAT IT UNDERSTANDS ITS RESPONSIBILITIES FOR COMPLIANCE WITH APPLICABLE FEDERAL AVIATION REGULATIONS.

	
  

	
(d)

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

(SIGNATURE PAGE FOLLOWS)

  

9

  

IN WITNESS WHEREOF, the parties hereto have executed this Aircraft Dry Lease Agreement this 16th day of February, 2011, effective as of the date first above written.

	  	
LESSOR:

	  	  	 	  	  	 
	  	
STERLING AVIATION LLC

	  	  	 	  	  	 
	  	
By:  

	 	  	/s/ Renzo R. Mori	 
	  	  	 	
Name:  

	Renzo R. Mori	 
	  	  	 	
Title:

	Vice President	 
	  	  	 	  	  	 
	  	
LESSEE:

	  	  	 	  	  	 
	  	
CSC TRANSPORT, INC.

	  	  	 	  	  	 
	  	
By:

	 	  	/s/ James Nuzzo	 
	  	  	 	
Name:

	James Nuzzo	 
	  	  	 	
Title:

	EVP, Business Planning	 

The undersigned hereby agree that the Time Sharing

Agreement between them dated as of July 10, 2009 referred

to above is hereby terminated effective as of  the effective

date of the above Aircraft Dry Lease Agreement:

	
DOLAN FAMILY OFFICE LLC

	  	 	  	  	 
	
By:  

	 	  	/s/ William A Frewin	 
	  	 	
Name:  

	William A Frewin	 
	  	 	
Title:

	President	 
	  	 	  	  	 
	
CSC TRANSPORT, INC.

	  	 	  	  	 
	
By:

	 	  	/s/ James Nuzzo	 
	  	 	
Name:

	James Nuzzo	 
	  	 	
Title:

	EVP, Business Planning	 

 

 

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