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EXHIBIT 10.1
TIME SHARING AGREEMENT
This Time Sharing Agreement ("Agreement") is effective as of
January 30, 2006,
("Effective Date") by and between Oakley, Inc., a Washington
corporation with
its principal offices located at One Icon, Foothill Ranch,
California 92610
("Oakley") and Jim Jannard, an individual with a mailing address at
PO Box 1389,
Eastsound, Washington 98245 ("Jannard") (each a "Party" and
collectively the
"Parties").
A. Oakley and Jannard desire to enter into this Agreement to
provide for the
lease by Oakley of an aircraft with flight crew, to Jannard on an
as-needed,
as-available basis and on a time-sharing basis pursuant to Federal
Aviation
Regulation Part 91.501(b)(6) and (c)(1); and
B. Oakley and Jannard desire that Jannard will not be charged for
such flights
and that no amount will be collected by Oakley, other than the
amounts permitted
in Federal Aviation Regulation Part 91.501(d), as more fully set
forth in this
Agreement;
NOW THEREFORE, in consideration of the mutual provisions contained
herein, the
receipt and sufficiency of which are hereby acknowledged, the
Parties agree as
follows:
ARTICLE 1
DEFINITIONS
1.1
AIRCRAFT. The term "Aircraft" means that certain 2005
Bombardier
BD-700-1A10 aircraft, with a serial number of 9162, registered as
N2T and
operated by Oakley under its Operational Control, and all engines
and equipment,
avionics, accessories and furnishings, documentation and other
items which are
from time to time incorporated or installed in or attached
thereto.
1.2 FAR.
The term "FAR" means the Federal Aviation Regulations.
1.3 FLIGHT
CHARGE. The term "Flight Charge" means the aggregate of (Y) up
to 200 percent of the cost of fuel, oil, lubricants, and other
additives used
for a Time Sharing Flight based on the actual Flight Hours for such
flight; and
(Z) the following actual expenses, if applicable to a Time Sharing
Flight: (i)
travel expenses of the crew, including food, lodging, and ground
transportation;
(ii) hangar and tie-down costs away from the Aircraft's base of
operation; (iii)
insurance obtained for the specific Time Sharing Flight; (iv)
landing fees,
airport taxes, and similar assessments, including, but not limited
to, Internal
Revenue Code Section 4261 and related excise taxes; (v) customs,
foreign permit,
and similar fees directly related to the Time Sharing Flight; (vi)
in flight
food and beverages; (vii) passenger ground transportation; and
(viii) flight
planning and weather contract services for the specific Time
Sharing Flight.
1.4 FLIGHT
CREW. The term "Flight Crew" means employees of or other
persons under the control of Oakley which shall consist of a
properly rated and
qualified captain and a properly rated and qualified first
officer.
1.5 FLIGHT
HOURS. The term "Flight Hours" means actual flight time as
depicted in the aircraft flight logs for actual time that the
aircraft is aloft
(takeoff to landing) expressed in one-tenth of an hour
increments.
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1.6 HOME
BASE. The term "Home Base" means John Wayne-Orange County
Airport, Santa Ana, California.
1.7 LEASE
AGREEMENT. The term "Lease Agreement" means that certain Lease
Agreement between Oakley and N2T dated December 18, 2003, as
amended, with
respect to the Aircraft.
1.8 N2T.
The term "N2T" means N2T, Inc. a Washington corporation and
lessor of the Aircraft to Oakley.
1.9
OPERATIONAL CONTROL. The term "Operational Control" means being
the
legal operator, holding sole authority over initiating, conducting,
or
terminating a flight, and having command and control of the Flight
Crew.
1.10 TIME
SHARING FLIGHT. The term "Time Sharing Flight" means a specific
flight conducted by Oakley and involving the carriage of Jannard
and his
employees or guests pursuant to this Agreement as permitted under
FAR Part
91.501(b)(6) and (c)(1).
ARTICLE 2
TIME SHARING
2.1 TIME
SHARING ARRANGEMENT.
2.1.1 Subject to Jannard's performance of all of his
obligations
hereunder, including payment of all applicable Flight Charges,
Oakley hereby
grants to Jannard a non-exclusive, non-assignable,
non-transferable,
indivisible, terminable right to use the Aircraft, on an as-needed,
as-available
basis only, for Time Sharing Flights scheduled with Oakley pursuant
to this
Agreement.
2.1.2 For each Time Sharing Flight where the Aircraft was
available
and scheduled pursuant to this Agreement, provided that at such
time (i) no
event of default shall have occurred and be continuing under the
Lease
Agreement; and (ii) no event of default under the Lease Agreement
shall occur or
result from any such Time Sharing Flight, then Oakley shall provide
the Aircraft
to Jannard on a time-sharing basis under FAR Section 91.501(b)(6)
and (c)(1) for
such Time Sharing Flight subject to Section 2.1.3 below.
Accordingly, for each
such permitted Time Sharing Flight, Oakley shall lease to Jannard
and Jannard
shall lease from Oakley, the Aircraft with Flight Crew pursuant to
this
Agreement, at no charge; provided that Jannard shall pay to Oakley
the
applicable Flight Charge for such Time Sharing Flight.
2.1.3 Upon the request of Jannard, subject to the availability of
the
Aircraft as determined by Oakley in accordance with ARTICLE 3,
Oakley shall make
the Aircraft available to Jannard at the Home Base or at such other
location as
acceptable to Oakley, in its sole discretion. The repositioning,
ferry or dead
head flights of the Aircraft required in connection with Jannard's
flights of
the Aircraft under this Agreement, including delivery and
redelivery of the
Aircraft to the Home Base, or such other location as the Parties
may agree,
shall be deemed to be use of the Aircraft by Jannard (as a Time
Sharing Flight)
and at Jannard's expense subject to the Flight Charge.
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2.2 RIGHTS
RESERVED. Notwithstanding anything to the contrary herein, all
rights not specifically granted to Jannard shall be reserved and
remain always
with Oakley. This Agreement shall not be construed to confer any
rights upon
Jannard by implication, estoppel or otherwise as to the
Aircraft.
2.3 LEASE
ONLY. At all times during the term of this Agreement, full
legal
title to the Aircraft shall remain vested in Oakley to the
exclusion of Jannard.
This Agreement and any related documents shall in no way assign or
transfer any
right or interest in the Aircraft or any other property of
Oakley.
2.4 LEGAL
RELATIONSHIPS
2.4.1 With respect to the Aircraft, Oakley shall be deemed to
have
Operational Control of the aircraft at all times during the term of
this
Agreement, including but not limited to during all Time Sharing
Flights.
2.4.2 Oakley does not intend to enter into, and this Agreement is
not
intended to create or constitute, a joint ownership agreement, as
such term is
defined in FAR Section 91.501(c)(3), or a joint venture,
partnership, business
organization, association, cooperative arrangement or other
relationship by and
among Oakley and Jannard and through which any party may be held
liable for the
omissions or commissions of any other party. This Agreement is
intended to
create a time sharing agreement as such term is defined in FAR
Section
91.501(c)(1).
2.5
SUBORDINATE TO LEASE AGREEMENT.
2.5.1 Oakley and Jannard hereby acknowledge that this Agreement
(1)
does not convey any lien or other interest in or against the
Aircraft to
Jannard; and (2) expressly (A) remains, subject and subordinate to
the Lease
Agreement and the rights of N2T thereunder and in and to the
Aircraft; and (B)
does not permit any further disposition of the Aircraft.
2.5.2 Oakley and Jannard hereby acknowledge that to the extent
any
provision in this Agreement is inconsistent with the provisions of
the Lease
Agreement or cause Oakley to breach any of its representations,
warranties or
agreements under the Lease Agreement, then the provisions in the
Lease Agreement
shall control.
ARTICLE 3
SCHEDULING AND LOGISTICS
3.1
SCHEDULING
3.1.1 Jannard shall advise Oakley of his request for flight time
and
use of the Aircraft under this Agreement by giving Oakley advance
notice by
telephone and/or facsimile. Time Sharing Flight requests must be
made at least
two (2) hours prior to the scheduled take-off time of the first
leg. Each Time
Sharing Flight request shall include the information that is
reasonably required
by Oakley. If the Aircraft is not available, Oakley shall attempt
to advise
Jannard as soon as practicable. All requests for Time Sharing
Flights, unless
accepted by Oakley, shall be deemed rejected.
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3.1.2 In addition to the proposed schedules and flight times,
Jannard
shall provide at least the following information for each proposed
Time Sharing
Flight prior to the scheduled departure, as may be required by
Oakley or the
Flight Crew: (a) the number of anticipated passengers; (b) the
nature and extent
of luggage and/or cargo to be carried; and (c) the date and time of
return
flight, if any.
3.1.3 Oakley shall have final authority over the scheduling of
the
Aircraft, provided, however, that Oakley will try to accommodate
Jannard's needs
and avoid conflicts in scheduling. Oakley may cancel any scheduled
Time Sharing
Flight, with no liability to Jannard, should the Aircraft be no
longer available
for the Time Sharing Flight or otherwise unable to conduct the
scheduled Time
Sharing Flight. In the event of such cancellation, Oakley shall to
advise
Jannard as soon as practicable following the Aircraft becoming
unavailable of
unable to conduct the scheduled Time Sharing Flight.
3.2
MAINTENANCE
3.2.1 Oakley shall be responsible for arranging and paying for
all
maintenance, preventive maintenance and required or recommended
inspections.
Jannard shall have no rights or involvement with respect to any
maintenance or
other operational matters concerning the Aircraft.
3.2.2 Aircraft maintenance and inspections take precedence over
Aircraft scheduling unless such maintenance or inspections can be
safely
def
