Aircraft Lease Agreement – GCI Communication Corp. (General Communication Inc.) and 560 Company, Inc.

Make/model:

Cessna Citation V (C560)

Registration:

N560ER

Serial no.:

560-0003

Engines:

Pratt & Whitney JT 15D-5A

Serial no.:

Left 108003 Right 108535

Make/model:

1997 Israel Aircraft Industries Astra SPX

Registration:

N89HS

Serial no.:

89

Engines:

Garrett Ai Research Jet Engine, Model No. TFE-731-40R-200G

Serial no.:

P113126 + P113125

Make/model:

CL 600-2B16 (Challenger 604)

Registration:

N134WN

Serial no.:

560-0003

Engines:

General Electric CF 34-3B

Serial no.:

872151 and 872150

1.

[IntentionallyOmitted]

2.

Term.

A.

The initial term of this Agreement shall be for thirty (30) days and shall
commence on the Effective Date. This Agreement shall continue unless terminated
pursuant to any provision of this Agreement. Either Lessee or Lessor may
terminate this Agreement upon twelve (12) months153 written notice as set forth in
Section 17, and as follows: If GCI elects to terminate this Agreement, Lessor
may within five (5) business days of the date of such notice provide GCI with
written notice of Lessor153s intent to put the Challenger up for sale. Then, this
Agreement shall terminate upon the earlier of (i) the later sale date of both
Aircraft, or (ii) twelve (12) months from the date of GCI153s termination notice.
If Lessor fails to give notice of its intent to sell the Aircraft within such
five (5) business days, then this Agreement shall terminate twelve (12) months
from the date of GCI153s written notice of its intent to terminate.

B.

Notwithstanding the provisions of Section 2(A), GCI may elect to terminate
its use of the Astra upon ninety (90) days153 written notice as set forth in
Section 17, and as follows: If GCI elects to terminate this Agreement as to the
Astra only, Lessor may within five (5) business days of the date of such notice
provide GCI with written notice of Lessor153s intent to put the Astra up for sale.
Then, GCI obligations hereunder relating to the Astra (other than the indemnity
provisions of Section 13) shall terminate upon the earlier of (i) the sale date
of the Astra, or (ii) ninety (90) days from the date of GCI153s termination notice
as to the Astra.

A.

GCI shall pay rent to Lessor at the dry lease rate of (a) forty-five thousand
dollars (US $45,000.00) per month on the Astra and (b) one hundred thirty-two
thousand dollars (US $132,000.00) per month on the Challenger, plus sales/use
tax if applicable, without demand, offset, deduction or counterclaim. Payments
of each month153s rental shall be made on or before the first (1st) day of each
month, in advance. The monthly rental payment for the first and last month shall
be prorated on an actual day’s basis, and any unused funds after a proper
termination shall be refunded to Lessee in full except as otherwise provided
herein.

B.

In addition to the above payments, GCI previously provided Lessor with a one
million five hundred thousand dollar ($1,500,000.00) damage deposit for the
Aircraft153s usage hereunder (“Deposit”). Not later than six (6) months after the
Agreement terminates, Lessor shall repay the Deposit to GCI.

4.

Use.

A.

Lessor hereby grants to Lessee the nonexclusive right to use the Aircraft on
the terms and conditions set forth in this Agreement.

B.

Lessee shall, at its sole expense, provide all crewmembers required for
operation of the Aircraft during the term of this Agreement. All crewmembers
must be qualified to Lessee’s insurance company’s standards to fly the Aircraft.

C.

Lessee shall pay all expenses in preparation for any GCI-usage flight and in
connection with GCI flights, including but not limited to expenses for fuel,
crew quarters, landing fees, imposts, duties, fines, meals, all other
out-of-pocket crew expenses, and the cost of any special equipment required for
Lessee’s business.

D.

Lessee shall, at its sole expense, provide hangar storage and line service
for the Aircraft in Anchorage, Alaska. Lessee shall also pay all maintenance
costs for the Aircraft during the term hereof.

E.

The Aircraft base when not in use shall be Anchorage, Alaska.

F.

Lessee has first priority use of the Aircraft. Lessor retains the right to
use the Aircraft when not scheduled for use by Lessee. Lessor is responsible for
all incremental costs incurred during Lessor153s use of the Aircraft.

G.

Lessee may not use the Aircraft for the purpose of providing transportation
of passengers or cargo in air commerce for compensation or hire, or permit any
other person or entity to use the Aircraft.

H.

GCI will operate the Aircraft in compliance with Part 91 and any other
applicable provision of the FARs, and all other Applicable Standards.
(“Applicable Standards” shall mean (i) Applicable Law (as defined below), (ii)
the requirements of the Required Coverages (as defined below), and (iii), with
respect to the Aircraft, all compliance requirements set forth in or under (A)
all maintenance manuals initially furnished with respect thereto, including any
subsequent amendments or supplements to such manuals issued by the manufacturer
or supplier thereof from time to time, (B) all mandatory service bulletins
issued, supplied, or available by or through the applicable manufacturer with
respect thereto, (C) all applicable airworthiness directives issued by the FAA
or similar regulatory agency having jurisdictional authority, (D) all conditions
to the enforcement of any warranties pertaining thereto, and (E) GCI153s FAA
approved maintenance program with respect to the Aircraft.) GCI shall not
operate or permit the Aircraft to be operated for air taxi operations or
otherwise under Part 135 of the FARs; and it shall at all times have, and
maintain, “operational control” of the Aircraft (as such term is then
interpreted by the FAA or such other applicable governmental authority), and no
other person or entity shall operate the Aircraft except when the Aircraft are
operated pursuant to Section 4(F). The Aircraft at all times will be operated by
duly qualified pilots having satisfied all requirements established and
specified by the FAA, the TSA, any other applicable governmental authority and
the required insurance under Section 8, Insurance, below (“Required Coverages”).

I.

GCI may fly the Aircraft temporarily to any country in the world, provided
that the Aircraft (i) shall at all times be based and predominantly used,
operated and located in the continental United States; and (ii) shall not be
flown, operated, used or located in, to or over any such country or area
(temporarily or otherwise) (A) that is excluded from the Required Coverages (or
specifically not covered by such insurance), (B) with which the United States
does not maintain favorable diplomatic relations, (C) in any area of recognized
or threatened hostilities, (D) to the extent that payment of any claim under the
Required Coverages directly or indirectly arising or resulting from or connected
with any such flight, operation, use or location would be prohibited under any
trade or other economic sanction or embargo by the United States of America, or
(E) in violation of any of the Required Coverages or any Applicable Standards.
GCI shall adopt, implement and comply with all security measures required by any
applicable law (as defined below), or by any Required Coverages, or that are
necessary or appropriate for the proper protection of the Aircraft (whether on
the ground or in flight) against theft, vandalism, hijacking, destruction,
bombing, terrorism or similar acts. (“Applicable Law” shall mean all applicable
laws, statutes, treaties, conventions, judgments, decrees, injunctions, writs
and orders of any governmental authority and rules, regulations, orders,
directives, licenses and permits of any governmental authority as amended and
revised, and any judicial or administrative interpretation of any of the same,
including the airworthiness certificate issued with respect to the Aircraft, the
Cape Town Convention, the UCC, the Transportation Code, all TSA regulations, all
FARs, airworthiness directives, and/or any of the same relating to the Aircraft
generally or to noise, the environment, security, public safety, insurance,
taxes and other Impositions, exports or imports or contraband.)

5.

Major Damage. If the Aircraft suffer any major damage or
loss of a type required to be reported to the FAA or recorded in the Aircraft
logbooks under FAA regulations governing the Aircraft use, and subsequently
shall have been returned to service, Lessor and Lessee shall upon delivery of
the Aircraft to Lessor under Section 9 below, determine the amount of loss in
value, if any, suffered by the Aircraft due to such damage or loss. Lessor and
Lessee shall determine such amount by requesting bids for the purchase of the
Aircraft from three (3) dealers in such aircraft, qualified to render such and
not affiliated with Lessor and Lessee. Lessor and Lessee shall each select one
(1) dealer, and the two dealers shall select the third dealer. Each dealer shall
render one (1) bid based upon a description of the Aircraft assuming no damage
history, and a second (2nd) bid based on the Aircraft153s actual condition. The
difference between the average of all bids received for the Aircraft assuming no
damage history, and the average of all bids received for the Aircraft including
the actual damage history, together with interest thereon from the period
between the end of the term of this Agreement until the date of payment, at a
rate equal to one (1) percentage point in excess of the prime rate announced
from time to time by the Royal Bank of Scotland, shall be paid by Lessee to
Lessor in the form of a lump sum payment within ten (10) days after the last of
the three (3) dealers renders its bid.

6.

Lessor’s Inspection. Lessor or its authorized
representatives may at all reasonable times inspect the Aircraft and Lessee153s
books and records relating to the Aircraft, provided such Aircraft is not
scheduled for use at the time requested for inspection. Lessor’s inspection will
not interfere with Lessee’s normal business operation.

A.

During the term of this Agreement, Lessee shall, at its sole expense,
maintain the Aircraft in good operating and airworthy condition, perform any
periodic inspections or service for the Aircraft recommended by the
manufacturers’ maintenance manual or service bulletins or required by law,
repair any uninsured damage to the Aircraft as a result of Lessee153s use thereof,
and maintain both Aircraft on their associated engine programs of MSP Gold
program for the Astra, JSSI for the Challenger C604 engines (all, collectively,
the “Engines”), and Maintenance Service Program (MSP) for the Challenger 604
APU. Lessor shall be responsible for any uninsured damage to the Aircraft as a
result of its use thereof. Prior to repairing any damage to the Aircraft, Lessee
will notify Lessor of such damage and obtain written approval of the repairs.
The performance of all maintenance and repair work shall be by or under the
supervision of properly qualified and trained personnel and in compliance with
FAA or other governmental requirements.

B.

Should any engine of the Aircraft become due for a hot section inspection or
major overhaul during the term of this Agreement, Lessee shall, at its sole
expense, perform such inspection or overhaul in accordance with the
manufacturer153s recommended procedures.

C.

GCI agrees that, with respect to the Aircraft, GCI will at its own expense,
(i) maintain, inspect, service, repair, overhaul and test the same in accordance
with Applicable Standards; (ii) make any alterations or modifications that may
at any time be required to comply with Applicable Standards, and to cause the
Aircraft to remain airworthy; (iii) furnish all required parts, replacements,
mechanisms, devices and servicing so that the condition and operating efficiency
thereof will at all times be no less than its condition and operating efficiency
as and when delivered to GCI, ordinary wear and tear from proper use alone
excepted; (iv) promptly replace all Aircraft parts (A) which become worn out,
lost, stolen, taken, destroyed, damaged beyond repair or permanently rendered or
declared unfit for use for any reason whatsoever, or (B) if not previously
replaced pursuant to clause (A), as and when required by any Applicable
Standards, including any applicable life limits; (v) maintain (in English) all
Records in accordance with Applicable Standards and (vi) enroll and maintain the
Aircraft in a Computerized Aircraft Maintenance Program, and the Engines in an
Engine Maintenance Program (“Computerized Aircraft Maintenance Program” shall
mean any automated on-line maintenance tracking program with respect to the
airframe provided by the manufacturer of the airframe or by a third party that
is approved by Lessor and which makes data with respect to the Aircraft
available to Lessor. “Engine Maintenance Program” shall mean the Engines153 and
APU power by the hour engine maintenance program provided by the engines153
manufacturer or by Jet Support Services, Inc.). All maintenance procedures shall
be performed by properly trained, licensed, and certified maintenance sources
and personnel utilizing replacement parts approved by the FAA and the
manufacturer of (as applicable) the Aircraft or any part thereof. Without
limiting the foregoing, GCI shall comply with all mandatory service bulletins
and airworthiness directives by causing compliance to such bulletins and/or
directives to be completed through corrective modification in lieu of operating
manual restrictions.

D.

On or before the tenth (10th) day after each annual anniversary of the
Effective Date, GCI shall provide to Lessor a report specifying the number of
flight hours on the Aircraft at the start of said year of operation and the
number of flight hours on the Aircraft at the end of said year of operation, in
each case as determined by the Aircrafts153 Hobbs meter.

E.

GCI will not make or authorize any improvement, change, addition or
alteration to the Aircraft that will impair the originally intended function or
use of the Aircraft, diminish the value of the Aircraft as it existed
immediately prior thereto, or violate any Applicable Standard. All repairs,
parts, replacements, mechanisms and devices added by GCI or on its behalf shall
immediately, without further act, become part of the Challenger or the Astra,
respectively and subject to the respective Lessor153s liens granted to its
lenders.

8.

Insurance.

A.

GCI agrees to maintain at all times, at its sole cost and expense, with
insurers of recognized reputation and responsibility satisfactory to Lessor (but
in no event having an A.M. Best or comparable agency rating of less than “A-“):

i.

(A) comprehensive aircraft liability insurance against bodily injury or
property damage claims including, without limitation, contractual liability,
premises liability, death and property damage liability, public and passenger
legal liability coverage, and sudden accident pollution coverage, in an amount
not less $200,000,000.00, and (B) personal injury liability in an amount not
less than $25,000,000.00; but, in no event shall the amounts of coverage
required by sub-clauses (A) and (B) be less than the coverage amounts as may
then be required by Applicable Law;

ii.

“all-risk” ground, taxiing, and flight hull insurance in the amount of
$11,000,000.00 for the Challenger and $4,000,000.00 for the Astra; and

iii.

war risk and allied perils (including confiscation, appropriation,
expropriation, terrorism and hijacking insurance) in the amounts required in
paragraphs (i) and (ii), as applicable.

B.

Any policies of insurance carried in accordance with this Section 8 and any
policies taken out in substitution or replacement of any such policies shall (i)
include Lessor and Lessor153s sole shareholder, Ronald A. Duncan, as additional
insureds without right of subrogation,(ii) be endorsed to name Lessor, and Wells
Fargo Bank for the Astra and RBS Asset Finance, Inc. (“RBS”) for the Challenger,
respectively, as an additional insured as its interests may appear (but without
responsibility for premiums), (iii) provide, with respect to insurance carried
in accordance with Section 8(a)(ii) or (a)(iii) above, that any amount payable
thereunder shall be paid directly to Wells Fargo Bank for the Astra and RBS for
the Challenger, respectively, and Lessor, as their interests may appear (but
without responsibility for premiums), (iv) provide for ten (10) days153 (seven (7)
days153 in the case of war, hijacking and allied perils) prior written notice by
such insurer of cancellation for non-payment, material adverse change to the
interests of Wells Fargo Bank or RBS, respectively, or non-renewal, (v) include
a severability of interest clause providing that such policy shall operate in
the same manner as if there were a separate policy covering each insured, (vi)
waive any right of set-off against Wells Fargo Bank for the Astra and RBS for
the Challenger, respectively, and any rights of subrogation against Wells Fargo
Bank or RBS, respectively, (vii) provide that in respect of the interests of
Wells Fargo Bank for the Astra and RBS for the Challenger, respectively, in such
policies, that the insurance shall not be invalidated by any action or inaction
of Lessor or GCI or any other person operating or in possession of the Aircraft,
regardless of any breach or violation of any warranties, declarations or
conditions contained in such policies by or binding upon Lessor or GCI or any
other person operating or in possession of the Aircraft, and (viii) be primary,
not subject to any co-insurance clause and shall be without right of
contribution from any other insurance.

C.

Neither Lessor nor GCI shall self-insure (by deductible, premium adjustment,
or risk retention arrangement of any kind) with respect to any of the risks
required to be insured pursuant to this Section 8. GCI agrees that it shall
obtain and maintain such other insurance coverages, or cause adjustments to be
made to the scope, amount or other aspects of the existing insurance coverages,
promptly upon Lessor153s request, as and when Lessor deems such additional
insurance coverages or modifications to be appropriate in light of any changes
in Applicable Law, prudent industry practices, the insurance market, GCI153s
anticipated use of the Aircraft or other pertinent circumstances. All of the
coverages required herein shall be in full force and effect worldwide throughout
any geographical areas to, in or over which the Aircraft is operated. All
insurance proceeds payable under the requisite policies shall be payable in U.S.
Dollars.

D.

At least ten (10) days prior to the policy expiration date for any insurance
coverage required by this Section 8, GCI shall furnish to Lessor evidence of the
renewal or replacement of such coverage, complying with the terms hereof, for a
twelve (12) month or greater period commencing from and after such expiration
date.

9.

Return of Aircraft.

A.

Upon the termination of this Agreement, Lessee shall, at its sole expense,
return the Aircraft forthwith to Lessor by delivering the Aircraft to Lessor at
Anchorage, Alaska, or at another agreed location. The Aircraft shall be returned
in the same condition as when delivered to Lessee hereunder, ordinary wear and
tear on the airframe and the Engines excepted, with paint and interior in the
same condition as when delivered to Lessor, no open or deferred maintenance
items, in airworthy condition, and free and clear of all liens, encumbrances or
rights of others whatsoever caused by Lessee.

B.

Not less than ten (10) days prior to the expiration or earlier termination of
the Agreement, Lessee shall make the Aircraft available to Lessor at Anchorage,
Alaska, or such other location as agreed to pursuant to Section 9(A), for the
purpose of permitting Lessor, at Lessor’s sole cost, to make an inspection of
the Aircraft. In connection with such inspection, Lessor shall, at Lessee’s
expense, be entitled to an acceptance flight check of not more than three (3)
hours153 duration. Lessor shall at Lessor’s expense be entitled to correct and
repair any condition of the Aircraft discovered on such inspection or flight
check which causes the Aircraft not to be in the condition prescribed above or
not airworthy; and Lessee shall reimburse Lessor upon demand for the cost of any
such repairs. If any corrections or repairs are necessary, the terms of the
Agreement shall be extended for the period required to enable Lessee to make
such corrections or repairs and to return the Aircraft in accordance with the
terms of this Section 9.

C.

During any extended term referred to in this Section 9, rent shall be paid by
Lessee to Lessor until the date of actual return at the rate specified in
Section 3(A) above.

D.

In consideration of $350,000 paid by Lessee to Lessor on or before December
31, 2010, the parties agree that the Astra may be returned to Lessor at any time
with the paint and interior in the same condition as it was in on December 27,
2010, ordinary wear and tear excepted.

10.

Taxes. Lessee shall pay, and indemnify and hold Lessor
harmless from, all license and registration fees and all sales, use,
operational, personal property, and other taxes, levies, duties, charges or
withholdings of any nature (together with any penalties, fines or interest
thereon and reasonable attorneys153 fees) imposed upon Lessor by any federal,
state or local government or taxing authority upon or with respect to the use or
operation of the Aircraft hereunder, upon the rentals, receipts, or earnings
arising there from, or with respect to this Agreement (other than taxes on, or
measured by, the net income of Lessor). The obligations of Lessee under this
Section shall survive the termination of this Agreement. Lessee shall only be
liable for the prorated portion of any taxes or fees not collected during the
term of this Agreement.

11.

Liens, Encumbrances and Rights of Others. Lessee will not
directly or indirectly create, incur, or permit any mortgage, pledge, lien
attachment, charge, encumbrance or right of others whatsoever on or with respect
to the Aircraft, title thereto or any interest therein, other than that arising
because of a debt or other obligation of the Lessor. Lessee will promptly, at
Lessee’s sole expense, cause any such mortgage, pledge, lien, attachment,
charge, encumbrance or right of another which may arise at any time to be duly
discharged, dismissed and removed as soon as possible, but in any event within
ten (10) days after the existence of the same shall have first become known to
Lessee.

12.

DISCLAIMER OF WARRANTIES. LESSEE ACKNOWLEDGE THAT LESSOR HAS NOT MADE
ANY REPRESENTATIONS OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE CONDITION,
AIRWORTHINESS, MERCHANTABILITY, DESIGN, OPERATION, OR FITNESS FOR USE OR A
PARTICULAR PURPOSE OF THE AIRCRAFT, AGAINST INTERFERENCE BY OTHERS (OTHER THAN
THAT ARISING BECAUSE OF A DEBT OR OTHER OBLIGATION OF THE LESSOR), OR ANY OTHER
REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE
AIRCRAFT. LESSOR WARRANTS THAT IT HAS GOOD TITLE TO THE AIRCRAFT AND THAT IT IS
FREE AND CLEAR OF LIENS AND ENCUMBRANCES EXCEPT THOSE CREATED BY
LESSOR.

13.

Indemnity. Lessee hereby assumes liability for, and shall
indemnify, protect, save and keep harmless Lessor, its shareholders, officers,
directors, and employees, from and against, and to pay Lessor promptly upon
demand the amount of, any and all liabilities, obligations, losses, damages,
penalties, claims, actions, suits, costs, expenses and disbursements, including
reasonable legal expense, of whatsoever kind and nature, imposed on, incurred by
or asserted against Lessor in any way relating to or arising out of this
Agreement or the possession, use or operation of the Aircraft by Lessee. Lessor
hereby assumes liability for, and shall indemnify, protect, save and keep
harmless GCI, its shareholders, officers, directors, and employees, from and
against, and to pay GCI promptly upon demand the amount of, any and all
liabilities, obligations, losses, damages, penalties, claims, actions, suits,
costs, expenses and disbursements, including reasonable legal expense, of
whatsoever kind and nature, imposed on, incurred by or asserted against GCI in
any way relating to or arising out of this Agreement or the possession, use or
operation of the Aircraft by Lessor. The indemnities contained in this Section
13 shall continue in full force and effect, notwithstanding the expiration or
other termination of this Agreement.

14.

Default. The following shall constitute Events of Default
hereunder: a) Lessee or Lessor shall fail to make any payment due to the other
party within five (5) days after the same shall become due; b) Lessor or Lessee
shall fail to perform or observe any other material covenant, condition or
agreement to be performed or observed by it hereunder, and such failure shall
continue unremedied for a period of twenty (20) days after written notice
thereof by Lessor or Lessee; c) Lessee or Lessor shall become insolvent or
bankrupt, or make an assignment for the benefit for creditors or consent to the
appointment of a trustee or receiver; or a trustee or receiver shall be
appointed for such party; or bankruptcy, reorganization or insolvency
proceedings shall be instituted by or against Lessee or Lessor, and, if
instituted against a party hereto, shall not be dismissed for a period of thirty
(30) days. Interest shall accrue for any payment not made when due hereunder at
ten and one-half (10.5%) percent per annum, beginning on the first day such
payment is late.

15.

Remedies. Upon the occurrence of any Event of Default,
Lessor or Lessee may, at its option, and at any time thereafter, do one or more
of the following:

A.

Require the defaulting party, upon the written demand of the non-defaulting
party and at non-defaulting party’s expense, to terminate this Agreement, if
such default shall continue unremedied for a period of ten (10) days after
written notice thereof by Lessor or Lessee. If this Agreement is terminated
because of a default, Lessee will promptly return the Aircraft to Lessor at the
location, in the condition, and otherwise in accordance with all of the terms,
specified in Section 9 of this Agreement.

B.

Exercise any other right or remedy which may be available to it at law or in
equity. In addition, the defaulting party shall reimburse the non-defaulting
party upon demand for all legal fees, other costs and expenses incurred by
reason of the occurrence of any Event of Default, or the exercise of the
non-defaulting party’s remedies with respect thereto, including all costs and
expenses incurred in connection with the return of the Aircraft in accordance
with the terms of Section 9 hereof or in placing such Aircraft in the condition
required by Section 9. No remedy referred to in this Section 15 is intended to
be exclusive, but each shall be cumulative in addition to any remedy referred to
above or available to the non-defaulting party at law or in equity; and the
exercise or beginning of exercise by the non-defaulting party of any one or more
of such remedies shall not preclude the simultaneous or later exercise by the
non-defaulting party of any or all such other remedies.

16.

Assignment. Lessee shall not, without the prior written
consent of Lessor (which may be withheld by Lessor in its absolute discretion)
assign any of its rights hereunder or permit the Aircraft to be operated or used
by, or in the possession of, any party other than Lessee, except that GCI may
assign its contract rights hereunder for security purposes only to its lenders.

17.

Notices. All notices, demands and requests contemplated by
this Agreement shall be deemed to have been delivered and received if served
personally, or sent by United States registered or certified mail, postage
prepaid, return receipt requested, or by courier service, addressed to the
addresses set forth below or such other addresses as either party may designate
by notice to the other:

If to Lessor:

560 Company, Inc.

Attention: Ronald Duncan, President

2550 Denali Street, Suite 1000

Anchorage, Alaska 99503

If to Lessee:

GCI Communication Corp.

Attention: Chief Financial Officer

2550 Denali Street, Suite 1000

Anchorage, Alaska 99503

18.

Attorneys153 Fees. In the event of any litigation or
arbitration between the parties with respect to this Agreement, the prevailing
party shall recover from the other party all costs and expenses, including
reasonable attorneys153 fees, incurred by the prevailing party, all of which shall
be included in and as a part of the judgment or award rendered in such
litigation or arbitration. The term “prevailing party” shall mean the party
which achieves substantially the relief sought, whether by judgment, order,
settlement, or otherwise.

19.

Further Instruments. Each party shall from time to time
execute and deliver such further instruments as the other party may reasonably
request to effectuate the intent of this Agreement.

20.

Execution and Counterparts. This Agreement may be executed
and delivered in counterparts and by each party hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original and all
of which taken together shall constitute one and the same instrument.

21.

Non-Waiver of Rights and Breaches. No failure or delay of
either party in the exercise of any right given to such party by this Agreement
shall constitute a waiver thereof, unless the time specified herein for the
exercise of such right has expired, nor shall any single or partial exercise of
any right preclude other or further exercise of that, or any other, right. The
waiver by a party hereto of any default of the other party shall not be deemed
to be a waiver of any subsequent default or other default of that party.

22.

Entire Agreement; Modification. This Agreement, as amended
and restated, constitutes the entire agreement between the parties pertaining to
the subject matter hereof, and supersedes all prior agreements, understandings
and representations of the parties with respect to the subject matter hereof.
This Agreement may not be modified, amended or supplemented or otherwise changed
except in writing, executed by each party. No such proposed amendment to this
Agreement shall be executed prior to giving seven (7) days153 written notice to
all entities listed in Section 17 hereof.

23.

No Agency or Partnership. Nothing in this Agreement shall be
deemed to make either Lessor or Lessee an agent, partner or joint venturer of
the other.

24.

Lessee Citizenship. Lessee hereby represents and warrants to
Lessor that Lessee is a citizen or permanent resident of the United States
within the meaning of Title 14, Section 375.36 of the Code of Federal
Regulations.

25.

Governing Law. This Agreement shall be governed by and
construed in accordance with the substantive law, but not the law regarding
conflicts or choice of law, of the State of Alaska, with venue at Anchorage,
Alaska.

26.

Counterpart Signatures. This Agreement can be signed in
multiple counterparts, the compilation of which shall be considered as one
document.

1.

Mail a copy of the Agreement to the following address via certified mail,
return receipt requested immediately upon the execution of the Agreement: (14
C.F.R. 91.23 requires that the copy be sent within twenty-four hours after it is
signed.)

2.

Telephone or fax the nearest Flight Standards District Office at least
forty-eight hours prior to the first flight under this Agreement.

3.

Carry a copy of the Agreement in the aircraft at all times.