9
AIRCRAFT JOINT OWNERSHIP AGREEMENT
This Agreement is made and entered into this ___ day of ________, 2000, by
and among ▇▇▇▇▇▇▇ Purina Company, a Missouri corporation ("▇▇▇▇▇▇▇"); Energizer
Holdings, Inc., a _________ corporation ("Energizer"); and Agribrands
International, Inc., a Missouri corporation ("Agribrands"). ▇▇▇▇▇▇▇, Energizer
and Agribrands are sometimes herein referred to as "Owners" or individually as
"Owner."
WHEREAS, ▇▇▇▇▇▇▇ and Agribrands are parties to an Aircraft Joint Ownership
Agreement dated as of April 1, 1998 (the "1998 Agreement"), under which
Agribrands is acknowledged as an owner of a 12.5% interest in two aircraft (the
balance being owned by ▇▇▇▇▇▇▇); and
WHEREAS, one of the aircraft referenced in the 1998 Agreement is registered
with the United States Federal Aviation Authority (the "FAA") as N607RP (the
"Old Aircraft"), and the other is to be sold and replaced with a Canadair
Challenger aircraft model CL-600-2B16 variant 604 (the "New Aircraft"), which is
currently being constructed pursuant to terms of a contract between ▇▇▇▇▇▇▇ and
Bombardier Aerospace Corporation("Bombardier"); and
WHEREAS, Agribrands desires to acquire a 12.5% interest in the New
Aircraft, together with its existing 12.5% interest in the Old Aircraft, and
▇▇▇▇▇▇▇ and Agribrands desire that both aircraft be owned and managed under the
terms of this Agreement, in place of the 1998 Agreement; and
WHEREAS, Energizer and ▇▇▇▇▇▇▇ have entered into an Agreement and Plan of
Reorganization dated as of April 1, 2000 (the "Energizer Agreement and Plan of
Reorganization"), under which ▇▇▇▇▇▇▇ has contributed to Energizer an ownership
interest of 43.75% in both the Old Aircraft and in the New Aircraft; and
WHEREAS, ▇▇▇▇▇▇▇, Energizer and Agribrands desire to enter into an
agreement to operate the Old Aircraft and the New Aircraft with a flight crew on
a Joint Ownership basis as defined in Section 91.501(c) (3) of the Federal
Aviation Regulations (the "FAR"); and
WHEREAS, ▇▇▇▇▇▇▇, Energizer and Agribrands desire to have ▇▇▇▇▇▇▇ undertake
the duties and responsibilities of operating the Old Aircraft and the New
Aircraft, and to divide the expenses of ownership and operation, all as provided
in the terms of this Agreement.
NOW THEREFORE, ▇▇▇▇▇▇▇, Energizer and Agribrands hereby mutually agree as
follows
1. The 1998 Agreement is hereby cancelled and rescinded in all respects, and
this Agreement shall be the only agreement governing the ownership and operation
of the Old Aircraft and the New Aircraft.
2. The Owners acknowledge that the New Aircraft is being constructed under a
contract dated as of December 10, 1999, by and between ▇▇▇▇▇▇▇, as Buyer, and
Bombardier, as Seller (the "New Aircraft Purchase Agreement"), a copy of which
(including an Addendum and Schedules thereto) is attached to this Agreement as
Exhibit A. Notwithstanding the identity of the parties to the New Aircraft
Purchase Agreement, the Owners hereby agree that each Owner shall be entitled to
exercise rights and shall bear responsibilities under the New Aircraft Purchase
Agreement in proportion to its ownership interest in the New Aircraft as
provided in this Agreement and in the Energizer Agreement and Plan of
Reorganization.
3. The Owners further acknowledge that it may be necessary or practical for
certain performance under the New Aircraft Purchase Agreement to be undertaken
in the name of ▇▇▇▇▇▇▇ alone; however, to the extent practicable, any such
performance shall be undertaken in the name of all Owners and shall reflect
their respective ownership interests. In connection with any performance of the
New Aircraft Purchase Agreement (i) each of the Owners shall provide all
reasonable cooperation to the other Owners as may be requested; and (ii) each of
the Owners shall indemnify the other Owners as to any cost, liability or expense
reasonably incurred, all in order to assure that the obligations of Buyer under
the New Aircraft Purchase Agreement are borne in proportion to each of the
Owners' interests in the New Aircraft.
4. The Owners further acknowledge that ▇▇▇▇▇▇▇ has paid, under the terms of
the New Aircraft Purchase Agreement, a total of two million five hundred
thousand dollars ($2,500,000) of the Purchase Price (as defined in the New
Aircraft Purchase Agreement). Promptly upon the execution of this Agreement,
Energizer and Agribrands shall pay to ▇▇▇▇▇▇▇ their pro rata proportion of such
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payment to reflect their respective ownership interests in the New Aircraft,
together with interest thereon at the rate of six percent (6%) per annum.
Energizer and Agribrands further agree that future installments of the Purchase
Price (as are due under the terms of the New Aircraft Purchase Agreement) shall
be allocated among the Owners so that, as soon as is possible, the apportionment
of the Purchase Price, as paid in installments, is equivalent to each of the
Owners' interest in the New Aircraft.
5. ▇▇▇▇▇▇▇ agrees to employ and provide a fully qualified flight crew for
all operations of both the Old Aircraft and the New Aircraft. Said flight crews
shall be provided at ▇▇▇▇▇▇▇'▇ sole expense and shall be under the direction of
▇▇▇▇▇▇▇.
6. (a) As reimbursement for ▇▇▇▇▇▇▇'▇ yearly fixed costs (on a fiscal
year basis) for operation and maintenance of both the Old Aircraft and the New
Aircraft (including, but not limited to, annual fixed costs for pilot and
mechanic salaries, benefits and training costs, Flight Operation's
Administration account, taxes, insurance, Jeppesen subscription and hangar rent
with respect to both Aircraft, and any other fixed costs incurred by ▇▇▇▇▇▇▇ in
connection with its operation of both Aircraft) each other Owner shall pay
▇▇▇▇▇▇▇, on a monthly basis, an amount equal to its ownership percentage times
▇▇▇▇▇▇▇'▇ estimate of such yearly fixed costs for that year. ▇▇▇▇▇▇▇ shall
notify each Owner in writing prior to the beginning of each ▇▇▇▇▇▇▇ fiscal years
of its estimate of such yearly fixed costs for the new fiscal year; and each
Owner's monthly payments, commencing with the first month of the new fiscal
year, shall be adjusted to reflect the estimate for that year. Except as
provided in subparagraphs (b) and (c) below, the other Owners will not be
required to reimburse ▇▇▇▇▇▇▇ for any additional amounts if actual yearly fixed
costs exceed the estimate for such year.
(b) Each other Owner shall reimburse ▇▇▇▇▇▇▇ for an amount equal to its
ownership percentage times any unbudgeted expenses associated with the repair of
either Aircraft or otherwise required to maintain either Aircraft in operable
condition. Each other Owner shall also reimburse ▇▇▇▇▇▇▇ for its ownership
percentage times all expenses associated with the hiring and training of pilots.
Such reimbursement shall be made as soon as practicable following ▇▇▇▇▇▇▇'▇
written notification of such expenses, along with reasonable documentation
verifying such expenditures.
(c) Subject to the limitation on each Owner's Flight Hours set forth in
Paragraph 10 of this Agreement, in the event that any Owner's use of either
Aircraft during any ▇▇▇▇▇▇▇ fiscal year exceeds such Owner's percentage
ownership times Total Flight Hours for either Aircraft for that year, such Owner
shall reimburse the other Owners, on a monthly basis during the next succeeding
fiscal year, for an additional percentage of actual, not estimated, imputed
interest expense at a compounded daily interest rate of 7%, on imputed debt with
respect to each Aircraft. This imputed debt with respect to each Aircraft will
be equal to the total original purchase price of such Aircraft plus any other
capitalized costs less the tax (36%) shield of the depreciation stream related
to the total capitalized amount. The additional percentage to be reimbursed
shall be equal to the difference between the flight hours actually used by such
Owner, and such Owner's ownership percentage times the estimated total hours of
annual usage, divided by the actual total flight hours for that year (the
"Additional Reimbursement Percentage"). In addition, such Owner shall reimburse
the other Owners for an additional percentage of the expenses described in
subparagraph (b) above which were incurred during such fiscal year, which
percentage shall also be equal to the Additional Reimbursement Percentage. In
the event that either or both of the Aircraft are sold pursuant to Paragraphs 17
or 18 of this Agreement during such next succeeding fiscal year, all amounts to
be reimbursed by any Owner pursuant to this subparagraph (c), whether or not
otherwise payable at such time, shall be retained by the other Owners from the
proceeds otherwise payable to that Owner.
7. Energizer and Agribrands shall also pay ▇▇▇▇▇▇▇, on a monthly basis, an
hourly fee per their Flight Hours during the preceding month. Such fee shall
represent fuel, flight crew travel, landing fees, and maintenance, repair and
inspection. As of the date of this Agreement, the fee per hour is $ _________
for travel in the United States, and $ ________ for all other international
flights, both of which are subject to adjustment by ▇▇▇▇▇▇▇ to reflect increases
in such expenses. Notice of any such adjustment shall be made by ▇▇▇▇▇▇▇ to
Energizer and Agribrands in writing at least 30 days in advance of the effective
date of such increase. In addition, Energizer and Agribrands shall each pay, on
a per trip basis, any extraordinary international handling fees associated with
flights on their behalf or at their direction, including but not limited to,
international landing fees which are significantly in excess of the average
international landing fees historically incurred by ▇▇▇▇▇▇▇, and satellite
communication fees, if utilized.
8. (a) The expenses of the first engine hot section inspections, engine
overhauls, external painting and internal refurbishment for both the old
Aircraft and the New Aircraft ("Major Maintenance Expenditures") completed after
the date of this Agreement shall be shared by all Owners based upon their
respective percentages of ownership. Such expenses for subsequent Major
Maintenance Expenditures for each Aircraft shall be shared by all Owners based
upon their relative flight usage of each Aircraft from the time of the
previously completed Major Maintenance Expenditures. ▇▇▇▇▇▇▇ shall ▇▇▇▇ the
other Owners for their shares of such expenses and will provide upon request,
documentation as to the expenses incurred and the flight hour usage of the
Owners.
(b) In the event that ▇▇▇▇▇▇▇, in its sole discretion, determines to make
other capital expenditures with respect to either Aircraft, such expenditures
shall be shared by all Owners based upon their respective percentages of
ownership of each such Aircraft. ▇▇▇▇▇▇▇ shall notify the other Owners in
writing at least 30 days in advance of its election to make such capital
expenditures and of the estimated amount of such expenditures.
9. ▇▇▇▇▇▇▇ shall include the other Owners as additional insurers on
▇▇▇▇▇▇▇'▇ aircraft liability insurance policy, but only in proportion to each
other Owner's interest in both Aircraft. ▇▇▇▇▇▇▇ will also include the other
Owners as loss payees on the aircraft hull coverage on both Aircraft. Upon the
request of each of the other Owners, ▇▇▇▇▇▇▇ will furnish a Certificate of
Insurance evidencing coverage as outlined above.
10. Energizer's Flight Hours for each Aircraft shall not exceed
forty-three and 75/100 percent (43.75%), and Agribrands Flight Hours for each
Aircraft shall not exceed twelve and a half percent (12.5%), of the greater of
(i) Total Flight Hours for that Aircraft during any six-month period, or (ii)
the pro rata Budgeted Flight Hours for such six-month period. Energizer and
Agribrands will provide ▇▇▇▇▇▇▇ with requests for flight time and proposed
flight schedules for each Aircraft as far in advance of any given flight as
possible, and in any case, at least 24 hours in advance of Energizer's or
Agribrands' planned departure, or such shorter time period in an individual
situation as may be acceptable to ▇▇▇▇▇▇▇'▇ Director of Flight Operations in his
sole discretion. Requests for fight time shall be in a form, whether oral or
written, mutually convenient to, and agreed upon by the Owners. In addition to
proposed schedules and flight times for each Aircraft, Energizer and Agribrands
will provide the following information to ▇▇▇▇▇▇▇'▇ flight dispatcher at least
24 hours prior to the scheduled departure (or such shorter time period as may
be found acceptable as noted above) as well as such other information reasonably
required by ▇▇▇▇▇▇▇:
(a) proposed departure point;
(b) destination;
(c) number of anticipated passengers;
(d) any unusual luggage or cargo to be carried; and
(e) the date and time of return flight.
▇▇▇▇▇▇▇ shall have final authority over the scheduling of each Aircraft. In
addition, in the event of scheduling conflicts among the Owners, such conflicts
shall be resolved in accordance with the following guidelines:
(i) Subject to the restriction on Energizer's and Agribrands' Flight
Hours in any six month period, each Aircraft shall be scheduled for the party
first notifying ▇▇▇▇▇▇▇'▇ flight dispatcher of its intended use (a "Travel
Request") unless a Travel Request from another Owner involving a higher priority
traveler than any traveler from the first party shall be made at least 72 hours
prior to the proposed time of departure;
(ii) The priority assigned to travelers, in descending order, shall be
(A) the Chief Executive Officer of ▇▇▇▇▇▇▇, (B) the Chief Executive Officer of
Energizer, (C) the Chief Executive Officer of Agribrands, (D) all other
corporate officers of the Owners, and (E) all other potential passengers; and
(iii) Notwithstanding the above guidelines, any particular conflict in
use of the Aircraft may be resolved as agreed among the Chief Executive Officers
of the Owners.
11. ▇▇▇▇▇▇▇ shall be solely responsible for securing maintenance and
required or otherwise necessary inspections with respect to both Aircraft, and
shall make all such needs known to the other Owners for their use in scheduling
usage of the Aircraft. No maintenance or inspection shall be delayed or
postponed for the purpose of scheduling either Aircraft, unless said maintenance
or inspection can be safely conducted at a later time in compliance with all
applicable laws and regulations, and within the sound discretion of the pilot in
command. The pilot in command shall have final and complete authority to cancel
any flight for any reason or condition which in his or her judgment would
compromise the safety of the flight.
12. In accordance with applicable FAR, the qualified flight crew provided by
▇▇▇▇▇▇▇ will exercise all of its duties and responsibilities in regard to the
safety of each flight conducted hereunder. Each Owner specifically agrees that
the flight crew, in its sole discretion, may terminate any flight, refuse to
commence any flight or take any other action which in the judgment of the pilot
in command is necessitated by consideration of safety. No such action of the
pilot in command shall create or support any liability for loss, injury, damage
or delay to any Owner or any other person. The Owners further agree that none
shall be liable to the other Owners for delay or failure to furnish or return
either Aircraft pursuant to this Agreement when such failure is caused by
government regulation or authority, mechanical difficulty, war, civil commotion,
strikes or labor disputes, weather conditions or acts of God.
13. Each Owner represents and warrants that:
(a) it will use both Aircraft for and on account of its own business only,
and will not use either Aircraft for the purposes of providing transportation of
passengers or cargo in air commerce for compensation or hire;
(b) it shall not incur any mechanics' or other liens in connection with the
inspection, preventative maintenance, maintenance or storage of both Aircraft,
whether permissible or impermissible under this Agreement;
(c) it shall not convey, mortgage, assign, lease or otherwise alienate
either Aircraft or create any lien or security interest involving either
Aircraft or do anything or take any action that might mature into such a lien;
and
(d) during the term of this Agreement, it will abide by and conform to all
such laws, governmental and airport orders, rules and regulations, as shall from
time to time be in effect relating in any way to the operation and use of both
Aircraft under this Agreement.
14. For purposes of this Agreement, the permanent base of operations of both
Aircraft shall be at Spirit of St. Louis Airport in Chesterfield, Missouri.
15. ▇▇▇▇▇▇▇ shall ▇▇▇▇ the other Owners on a monthly basis for the amounts
due pursuant to this Agreement. All such bills shall contain reasonable detail
and shall be due 30 days after receipt. The failure of either other Owner to
pay any ▇▇▇▇ within 30 days of receipt shall result in such Owner owing ▇▇▇▇▇▇▇
an additional handling charge equal to 1% per month of the amount due from the
date due to the payment date.
16. Subject to paragraphs 17 and 18 below, neither ▇▇▇▇▇▇▇, Energizer nor
Agribrands may transfer its interest in either Aircraft to any other party,
other than a wholly owned subsidiary.
17. (a) If either Energizer or Agribrands wishes to transfer its
interest in either Aircraft to any third party (other than a wholly owned
subsidiary), it must first give written notice to ▇▇▇▇▇▇▇, and within thirty
days following receipt of such notice, ▇▇▇▇▇▇▇ shall have the option of
acquiring Energizer's or Agribrands' entire interest in that Aircraft, at a
price equal to Energizer's or Agribrands' percentage ownership interest
multiplied by the market value of the aircraft, as determined by an independent
appraiser reasonably acceptable to all Owners. The fees of such appraiser shall
be paid by ▇▇▇▇▇▇▇, and such acquisition shall occur as soon as practicable
thereafter. In the event that ▇▇▇▇▇▇▇ does not wish to acquire the interest
offered, then the notifying Owner shall be free to proceed to sell all, but no
less than, its entire interest in the Aircraft. Notwithstanding the above,
however, neither Energizer nor Agribrands may transfer its interest in the
Aircraft to any other party (other than a wholly owned subsidiary) (i) unless
all fees and charges owing by it pursuant to this Agreement have been paid, (ii)
unless such other party enters into a joint ownership agreement with respect to
the Aircraft with ▇▇▇▇▇▇▇ and the non-notifying Owner on terms reasonably
acceptable to ▇▇▇▇▇▇▇, and (iii) without the written consent of ▇▇▇▇▇▇▇ and the
non-notifying Owner, which consent shall not be unreasonably withheld.
(b) If ▇▇▇▇▇▇▇ wishes to sell either Aircraft, but Energizer or Agribrands
object to such sale, ▇▇▇▇▇▇▇ may proceed to sell the Aircraft, provided that the
sale price is not less than the market value of the Aircraft, as determined by
an independent appraiser selected by ▇▇▇▇▇▇▇ and reasonably acceptable to
Energizer and Agribrands. The fees of such appraiser shall, in such instance,
be paid by ▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇, Energizer and Agribrands will, in a timely manner,
execute and deliver such agreements and other instruments as ▇▇▇▇▇▇▇ may require
to transfer ownership of the Aircraft to the purchaser thereof. The net
proceeds of sale shall be divided among the Owners in the same proportion as
their respective ownership interests. Any amounts owing to ▇▇▇▇▇▇▇ from
Energizer and Agribrands pursuant to this Agreement shall be retained by ▇▇▇▇▇▇▇
from the proceeds of sale otherwise payable to Energizer or Agribrands.
18. If ▇▇▇▇▇▇▇, Energizer and Agribrands agree to sell either Aircraft,
such sale shall be at a price acceptable to all. The net proceeds of sale shall
be divided among the Owners in the same proportion as their respective ownership
interests. Any amounts owing to ▇▇▇▇▇▇▇ from either Energizer or Agribrands
pursuant to this Agreement shall be retained by ▇▇▇▇▇▇▇ from the proceeds of
sale otherwise payable to Energizer or Agribrands.
19. This Agreement shall be in effect for as long as ▇▇▇▇▇▇▇, Energizer
and Agribrands have joint ownership of either Aircraft, and the Agreement shall
terminate upon the completion of the sale or other transfer of both Aircraft and
the payment of their respective portions of net proceeds of sale or transfer to
each of the Owners.
20. The failure of any Owner at any time or times to enforce or require
performance of any provision hereof shall in no way operate as a waiver or
affect the right of any other Owner at a later time to enforce the same. No
waiver by any Owner of any condition or the breach of any provision contained in
this Agreement shall serve to waive any other condition or any other breach of
any provision contained herein.
21. If any provision of this Agreement shall hereafter be held to be
invalid or unenforceable for any reason, that provision shall be reformed to the
maximum extent permitted to preserve the original intent of this Agreement,
failing which it shall be severed from this Agreement with the balance of the
Agreement continuing in full force and effect. Such occurrence shall not have
the effect of rendering the provision in question invalid in any other
jurisdiction or in any other case or circumstances or of rendering invalid any
other provisions contained herein to the extent that such provisions are not
themselves actually in conflict with any applicable law.
22. Notwithstanding anything to the contrary in this Agreement, this
Agreement shall not be assignable by either party hereto, to any other person,
firm or entity, other than a wholly owned subsidiary, without the prior written
consent of the other party.
23. No waiver, amendment or modification of this Agreement shall be
valid unless in writing and duly executed by the Owner to be charged therewith.
24. This Agreement shall be governed by the laws of the State of
Missouri.
IN WITNESS WHEREOF, the Owners hereto have signed this Agreement as of the
_______ day of January, 2000.
▇▇▇▇▇▇▇ PURINA COMPANY ENERGIZER HOLDINGS, INC.
By: __________________________ By: __________________________
AGRIBRANDS INTERNATIONAL, INC.
By: __________________________
