Aircraft
Co-ownership Agreement
This agreement is effective the first day of the signing of this agreement, by and between the persons who have signed it.
Jerry L. Mahurin
924 Spring Drive, Lugoff, SC 29078
Daniel R. Heath
129 Karr Ct, Lexington, SC 29072
With regard to this aircraft:
MAKE: Jerry Mahurin – Dan Heath
MODEL: JD- KR2
SERIAL #: 64-6941-1984
REGISTRATION #: N64KR
and is effective as of the first day of the signing of this agreement.
ARTICLE I
Purpose & Term
The parties named above elect to form a co-ownership for the purpose of owning an aircraft as tenants in common and operating the aircraft for the co-owner(s) training and pleasure. The name of the co-ownership shall be Black Bird Flyers. The co-ownership shall commence on the effective date, and shall continue until terminated by mutual consent of the co-owner(s) or by the provisions of this Agreement.
ARTICLE II
Base of Operations
The principal base of operations for this co-ownership shall be Columbia-Owens Downtown Airport, where the aircraft will be hangared. Each co-owner shall have complete and unrestricted access to and use of the hangar and agrees to maintain the hangar in a neat and orderly manner. The hangar rent shall be borne equally by the co-owner(s). Costs attributable to storage, parking, tie-down or landing fees while the aircraft is being operated away from the home base shall be borne solely by the co-owner operating the aircraft away from the home base. The decision to change the base of operations requires the mutual consent of the co-owner(s).
ARTICLE III
Assets, Equity, and Valuation Dates
The total value of the aircraft and related property is agreed upon by the co-owner(s) to be $10,000 as of the effective date of this agreement. Each co-owner is an equal co-owner of the property. This constitutes the basis for the beginning balance of each co-owner's equity which will be periodically adjusted as per this agreement. Assets of the co-ownership may be added to or deleted as agreed upon by the co-owner(s).
The net value of the co-ownership assets shall be determined by mutual consent of the co-owners as of the second Saturday in December each year. Such date shall be known as the “Valuation Date”. The equity of each co-owner shall consist of the net value of the co-ownership assets on any Valuation Date less any outstanding bills owed to the co-ownership divided by the number of co-owners. The value will be entered in the aircraft log book upon each valuation.
If a lien is levied for a debt which did not have the consent of all of the co-owner(s), the costs required to satisfy the lien shall come out of the share of the consenting co-owner.
Any tools, materials, publications, or other assets purchased by or obtained through the co-ownership shall remain the property of the co-ownership and the use of such assets shall be shared by all co-owner(s).
The total assets of this co-ownership as of the date of this agreement are listed below:
Aircraft $10,000
Article IV
Records
An accounting co-owner shall be selected by mutual consent of the co-owner(s). The accounting co-owner shall maintain possession of the books and records of the co-ownership and shall perform the necessary administrative accounting functions of the co-ownership. He shall be responsible for the receipt and disbursement of all moneys relating to co-ownership .
Complete accounting records of such administrative accounting functions shall be kept and shall be open to review by the other co-owner(s) upon request.
Copies of the registration certificate, bills of sale, or any other evidence of ownership of the aircraft relating to the co-ownership shall be maintained by the accounting co-owner and made available to the other co-owner(s) upon request.
The aircraft owned by this co-ownership shall be co-owned and co-registered. One of the co-owner(s), as selected by the co-ownership, shall affix his address to the registration solely for the purpose of satisfying legal registration requirements.
All requests for such documentation will be made available for presentation by the responsible co-owner, within seven days of the receipt of the request, which may be given through any means.
Article V
Management and Administration
Except as otherwise stated in this agreement, decisions regarding the purchase/sale of the co-ownership assets and the operation of the aircraft shall be made by mutual consent. Meetings of the co-ownership members shall be held at least once each year, during the month of December, or more often as agreed upon by the co-owner(s). Special meetings may be called by the accounting co-owner as he may deem necessary for the continued welfare of the co-ownership. Notice of the time and place of each meeting shall be given by the accounting co-owner to the other co-owner(s) at least fourteen days prior to the meeting, unless such notice period is waived by all co-owner(s).
Notification of co-ownership matters relating to this agreement are to be in writing and may be mailed to the co-owner(s) or by e-mail or by US mail. The co-owner(s) shall give notice of any change of address to each other within 30 days of such change. The co-owner must be present to vote.
Two co-owner(s) shall be present at each meeting to constitute a legal meeting for the continuance of the affairs of the co-ownership . Each co-owner will have an equal vote in the affairs of the co-ownership .
Article VI
Restriction of Co-owner(s)
No co-owner, without the consent of the other co-owner(s), shall:
(a) Sell, assign, hypothecate, encumber or pledge his equity in any of the co-ownership assets, including but not limited to a spouse or any other relative, except as provided for in this agreement;
(b) Borrow or lend money on behalf of the co-ownership;
(c) Transfer, sell, consign or grant release of any claim of the co-ownership or consent to an arbitration on any dispute involving the co-ownership;
(d) Commit an act detrimental to any co-ownership activity which would make it difficult or impossible to continue conduct of the co-ownership 's stated objectives;
(e) Contract or obligate the co-ownership to the payment of any sum of money in excess of $100.00;
(f) Suffer any lien to be levied against the aircraft or other co-ownership assets.
Article VII
Rules and Regulations
These rules and regulations refer to the “pilot” as the co-owner or other approved person, as stated in Article IX, Operation by Other Pilots, who was or will be acting as pilot in command at the time of the event.
The aircraft shall at all times be flown and maintained in accordance with all applicable regulations and requirements of the Federal Aviation Administration (FAA) or other duly constituted authority. Any civil penalties levied as a result of deficiencies in this area shall be borne by the co-owner responsible for the violation. In the event that the violation is not directly attributable to the responsibility of one of the co-owner(s), the cost shall be borne equally by all co-owner(s). Any dispute will be resolved according to Article XXIII, Dispute Resolution.
Any co-owner finding an equipment condition that presents a hazard to further use shall have the right and duty to declare the aircraft disabled, grounded and incapable of further flight (or ground movement, as the case may be) until the condition is remedied. The pilot first noticing a significant equipment deficiency shall note the problem in the flight record, which remains in the aircraft. If, in his opinion, the aircraft is unsafe to operate, he will placard the aircraft instrument panel to that effect and notify the other co-owner(s) verbally or by e-mail as soon as practical.
All Airworthiness Directives affecting the aircraft equipment and safety of operation will be instituted as soon as notification is received. Service Bulletins issued by the aircraft manufacturer shall be reviewed immediately, by the accounting co-owner, for implementation, if necessary for safe operation.
The aircraft may be flown to a foreign country only if the pilot makes the required documentary arrangements for the trip. Insurance necessary to comply with the destination country's laws must be arranged at the sole expense of the pilot prior to entering the airspace of that country. Under no circumstances will a country not honoring U. S. passports, or a country that the US government has identified as one that may not be visited, be entered.
Any co-owner who shall lose certification or otherwise be incapacitated shall loose the right to operate the aircraft.
Any individual co-owner may loan a tool or asset (with the exception of the aircraft) to someone other than a co-owner, but is fully responsible for the replacement or replacement value of that item, to the co-ownership. Each co-owner is fully responsible for any damage that he may cause to any co-ownership asset and to any other person or property, that is beyond the insurance coverage of the co-ownership.
Article VIII
Damage to Aircraft & Equipment
Damage resulting from faulty flying and/or handling technique will be the responsibility of that individual co-owner causing such damage, except as may be paid by insurance on the aircraft. Damage caused by the negligence of a co-owner not indemnified by insurance (such as a deductible) will be repaired at his sole expense and in an expeditious manner so as to permit the operations of the co-ownership to continue without undue delay or inconvenience. Penalties levied against any co-owner for acts in violation of any law governing the operation of the aircraft shall be borne solely by the co-owner causing the violation. Any disputes regarding the assignment of responsibility for such damage will be resolved according to article XXIII, Dispute Resolution.
Damage to the aircraft due to unforeseeable and unexpected mechanical break-down, as well as that caused by normal wear and tear, except that caused by faulty technique, shall be the joint responsibility of all co-owner(s).
Article IX
Operation by Other Pilots
Without the express consent of all the co-owners, no person other than a co-owner shall be authorized to operate the aircraft, except for flights and operation by authorized personnel incidental to testing after maintenance and repair. In addition, any person operating the aircraft must meet all requirements of the FAA and be approved by the underwriter for the insurance policy in force.
Article X
Severability
If any part of this Agreement is found to violate any laws governed by the state of South Carolina, and is therefore rendered unenforceable, the balance of the Agreement shall remain unaffected and in full force.
Article XI
Scheduling Use of Aircraft
The procedure for scheduling the use of the aircraft will be determined by a majority vote of the co-owners.
Article XII
Expenses
Expenses incurred from the ownership and operation of the aircraft and equipment will be categorized as follows:
Fixed Expenses - expenses that are not directly related to the time of operation of the aircraft. These expenses include, but are not limited to: taxes, insurance, annual inspection, repairs and hangar rent, or tie down fees at the home base if applicable.
Variable Expenses - expenses that are directly related to the operation of the aircraft. These include, but are not limited to: fuel, oil, engine maintenance, tires and brakes.
Fixed expenses will be paid equally by all co-owner(s), except as stated in article XVI. The fixed expenses will be paid at the time they are due.
Variable expenses will be paid by each co-owner in direct proportion to the amount of time he operates the aircraft. Any time of aircraft operation that is required for maintenance and testing will not be included. The per hour rate will be set by mutual consent of the co-owner(s) and will be revised as necessary. As fuel is directly related to each use of the aircraft, it will be the responsibility of the co-owner, who has operated the aircraft, to leave the fuel tank at a level of FULL, upon the completion of each use unless fuel is not available at the time. In such cases where the fuel tank is found not to be at a level of FULL, the last co-owner who operated the aircraft, will reimburse the co-owner who restores the fuel tank to a level of FULL for the expense of doing so. These re-imbursements must be reconciled no less than 30 days from the date that the expense was incurred.
Upon mutual consent, special assessments may be made against the co-owner(s) for such uses as the co-ownership may decide. Each special assessment so made, shall be payable on a date established by the co-owner(s).
Before the 10th day of each month the accounting co-owner will prepare a statement for each co-owner, showing an amount equal to the co-owner's share of the fixed expenses for the previous month and the variable expenses incurred by the co-owner during the previous month. Before the last day of the month each co-owner will convey to the accounting co-owner payment equal to the amount shown on his statement, for deposit into the co-ownership reserve. The accounting co-owner will pay the co-ownership bills from the reserve as the expenses are incurred. The accounting co-owner will credit each co-owner in an amount equal to any co-ownership bills paid directly by the respective co-owner.
ARTICLE XIII
DELINQUENCIES
Each co-owner agrees and promises not to operate the aircraft or use the property or equipment if he is 90 days or more late with the payment of his fixed and/or variable expenses.
Any delinquency that continues thereafter for a period of sixty (60) days shall be grounds for involuntary withdrawal at the option of the non-delinquent co-owner(s) pursuant to the terms herein specified for involuntary withdrawal as specified in Article XVII, Involuntary Withdrawal.
Article XIV
VOLUNTARY WITHDRAWAL
A co-owner may withdraw from the co-ownership upon submitting written notice in person or by US mail, to the other co-owner(s). In the case of voluntary withdrawal, the other co-owner(s) shall have the right to purchase the withdrawing co-owner's equity.
The buy out shall be paid in cash and shall be equal to 100% of the value of the withdrawing co-owner's equity. It is therefore essential that the valuation be kept current. The purchasing co-owner(s) shall pay the buy out price within thirty (30) days after the exercise of the option to purchase. If the co-owner(s) do not exercise the option to purchase created by these events, the withdrawing co-owner’s equity may be purchased by another party. For another party to purchase the co-owner’s equity, that party must pass a credit check and supply at least 3 personal references who are not relatives.
If a withdrawing co-owner is in arrears in the payment of any of his monthly contributions for fixed expenses, operating expenses, or special assessments as specified in this agreement, these delinquencies shall be deducted from the amounts paid above.
ARTICLE XV
RIGHT OF FIRST REFUSAL
No co-owner shall sell his interest in the co-ownership except under the following terms:
1. The withdrawing co-owner shall offer his interest to the co-ownership at the lesser of the value of his equity or any amount tendered by a third party's offer for that co-owner's interest. The value of his equity is determined as described in Article III.
2. The selling co-owner shall give the co-ownership and the co-owner(s) a written notice identifying the buyer, price and terms of sale, credit check, and personal references as described in article XIV.
- The remaining co-owner(s) shall have fifteen (15) days following said Notice within which to give written notice in person or by US mail, of their election to purchase the share of the aircraft at the lesser of the selling co-owner's equity or the offer made by the third party.
- Unless the withdrawal is being executed as an involuntary withdrawal, the withdrawing co-owner retains the right to rescind the withdrawal and remain in the co-ownership.
ARTICLE XVI
DEATH OF A CO-OWNER
The purpose of this article is to allow the co-ownership to determine how and when the shares of a co-owner will be handled, in the event of the death of a co-owner.
In the event of the death of a co-owner the deceased co-owner's share of the co-ownership will be retained by the co-ownership, and, all rights and responsibilities of the deceased co-owner are to be ended as of the time of his death.
Immediately upon the death of a co-owner, the power of attorney over the decedants share of the co-ownership will be passed to the co-ownership. Power of attorney over a co-owners share of this co-ownership may not be given to any individual other than to all of the living persons named in the co-ownership.
For one year from the death of a co-owner, the valuation of the co-ownership shall remain as it was on the day of the death of that co-owner. If, for any reason, shares of the co-ownership are sold, transferred, or otherwise liquidated during that time, the deceased co-owners share shall be returned to his estate. At the end of the one year time period, the deceased co-owners shares will become the property of the co-ownership and equally divided among the remaining co-owners.
In the event that all co-owner(s) become deceased, the assets of the co-ownership will be divided equally among the estates of the, then, co-owners and the co-ownership will be terminated.