AIRCRAFT JOINT OWNERSHIP AGREEMENT
This Agreement is made and entered into as of this 1st day of April, 2000,
by and among Ralston Purina Company, a Missouri corporation ("Ralston");
Eveready Battery Company, a Delaware corporation ("Eveready"); and Agribrands
International, Inc., a Missouri corporation ("Agribrands"). Ralston, Eveready
and Agribrands are sometimes herein referred to as "Owners" or individually as
"Owner."
WHEREAS, Ralston 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 Ralston); and
WHEREAS, the two aircraft referenced in the 1998 Agreement are registered
with the United States Federal Aviation Authority (the "FAA") as N607RP ("Old
Aircraft No. 1"), and N608RP ("Old Aircraft No. 2");
WHEREAS, Ralston has contracted for 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 Ralston 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 Old
Aircraft No. 2, and Ralston 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 Holdings, Inc., the sole shareholder of Eveready, and
Ralston have entered into an Agreement and Plan of Reorganization dated as of
April 1, 2000 (the "Agreement and Plan of Reorganization"), under which Ralston
has contributed to Eveready an ownership interest of 43.75% in Old Aircraft No.
1, Old Aircraft No. 2, and in the New Aircraft; and
WHEREAS, Ralston, Eveready and Agribrands desire to enter into an agreement
to operate both Old Aircraft No. 1 and Old Aircraft No. 2, 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, Ralston, Eveready and Agribrands desire to have Ralston undertake
the duties and responsibilities of operating both Old Aircraft No. 1 and
Aircraft No. 2, and the New Aircraft, and to divide the expenses of ownership
and operation, all as provided in the terms of this Agreement.
NOW THEREFORE, Ralston, Eveready 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 No. 1, Old Aircraft No. 2 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 Ralston, 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 Eveready 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 Ralston 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 Ralston and Eveready have paid (in
portions of 56.25% and 43.75%, respectively), under the terms of the New
Aircraft Purchase Agreement, two installments totaling four million five hundred
thousand dollars ($4,500,000) of the Purchase Price (as defined in the New
Aircraft Purchase Agreement). Promptly upon the execution of this Agreement,
Agribrands shall pay to Ralston its pro rata proportion of such installment
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payments, to reflect Agribrands' ownership interest in the New Aircraft,
together with interest thereon at the rate of six percent (6%) per annum from
the date of such respective installment payments. Future installments of the
Purchase Price (as are due under the terms of the New Aircraft Purchase
Agreement) shall be allocated among the Owners in proportion to each of the
Owners' interest in the New Aircraft.
5. Ralston agrees to employ and provide a fully qualified flight crew for
all operations of the Old Aircraft No. 1, Old Aircraft No. 2 and the New
Aircraft. Said flight crews shall be provided at Ralston's sole expense and
shall be under the direction of Ralston.
6. (a) As reimbursement for Ralston's yearly fixed costs (on a fiscal
year basis) for operation and maintenance of the Old Aircraft No. 1, Old
Aircraft No. 2 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
Ralston in connection with its operation of all Aircraft) each other Owner shall
pay Ralston, on a monthly basis, an amount equal to its ownership percentage
times Ralston's estimate of such yearly fixed costs for that year. Ralston
shall notify each Owner in writing prior to the beginning of each Ralston fiscal
year 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 Ralston for any additional amounts if actual yearly fixed
costs exceed the estimate for such year.
(b) Each other Owner shall reimburse Ralston for an amount equal to its
ownership percentage times any unbudgeted expenses associated with the repair of
any of the Aircraft or otherwise required to maintain either Aircraft in
operable condition. Each other Owner shall also reimburse Ralston 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
Ralston's 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 any of the
Aircraft during any Ralston fiscal year exceeds such Owner's percentage
ownership times Total Flight Hours for such 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, fixed
expenses for the fiscal year completed, which for the purposes of the
calculation shall include imputed interest expense at a compounded daily
interest rate of 7%, on imputed debt with respect to such Aircraft. This
imputed debt with respect to such Aircraft will be equal to sixty-four percent
(64%) of the total original purchase price of such Aircraft plus any other
capitalized costs. 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 any
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. Eveready and Agribrands shall also pay Ralston, on a monthly basis, an
hourly fee per their Flight Hour 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 one thousand
three hundred fifty dollars ($1,350.00) for travel in the United States, and one
thousand seven hundred dollars ($1,700.00) for all other international flights,
both of which are subject to adjustment by Ralston to reflect increases in such
expenses. Notice of any such adjustment shall be made by Ralston to Eveready
and Agribrands in writing at least 30 days in advance of the effective date of
such increase. In addition, Eveready 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 Ralston, 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 any of the 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 such
Aircraft shall be shared by all Owners based upon their relative flight usage of
such Aircraft from the time of the previously completed Major Maintenance
Expenditures. Ralston shall bill 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 Ralston, in its sole discretion, determines to make
other capital expenditures with respect to any of the Aircraft, such
expenditures shall be shared by all Owners based upon their respective
percentages of ownership of such Aircraft. Ralston 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. Ralston shall include the other Owners as additional insureds on
Ralston's aircraft liability insurance policy, but only in proportion to each
other Owner's interest in each of the Aircraft. Ralston will also include the
other Owners as loss payees on the aircraft hull coverage on all Aircraft. Upon
the request of each of the other Owners, Ralston will furnish a Certificate of
Insurance evidencing coverage as outlined above.
10. Eveready's Flight Hours for each of the Aircraft shall not exceed
forty-three and 75/100 percent (43.75%), and Agribrands Flight Hours for each of
the Aircraft shall not exceed twelve and a half percent (12.5%), of the greater
of (i) Total Flight Hours for such Aircraft during any six-month period, or
(ii) the pro rata Budgeted Flight Hours for such six-month period. Eveready and
Agribrands will provide Ralston 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 Eveready's or
Agribrands' planned departure, or such shorter time period in an individual
situation as may be acceptable to Ralston's 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, Eveready and Agribrands
will provide the following information to Ralston's 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 Ralston:
(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.
Ralston 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 Eveready's and Agribrands' Flight
Hours in any six month period, each Aircraft shall be scheduled for the party
first notifying Ralston's 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 Ralston, (B) the Chief Executive Officer of
Eveready, (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. Ralston shall be solely responsible for securing maintenance and
required or otherwise necessary inspections with respect to all of the 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 any of the 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
Ralston 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
any of the 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 the Aircraft for and on account of its own business only,
and will not use the 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 any of the
Aircraft, whether permissible or impermissible under this Agreement;
(c) it shall not convey, mortgage, assign, lease or otherwise alienate its
interest in any of the 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 any
of the Aircraft under this Agreement.
14. For purposes of this Agreement, the permanent base of operations of all
of the Aircraft shall be at Spirit of St. Louis Airport in Chesterfield,
Missouri.
15. Ralston shall bill 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 bill within 30 days of receipt shall result in such Owner owing Ralston
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 Ralston, Eveready nor
Agribrands may transfer its interest in any of the Aircraft to any other party,
other than a wholly owned subsidiary.
17. (a) If either Eveready or Agribrands wishes to transfer its
interest in any of the Aircraft to any third party (other than a wholly owned
subsidiary), it must first give written notice to Ralston, and within thirty
days following receipt of such notice, Ralston shall have the option of
acquiring Eveready's or Agribrands' entire interest in that Aircraft, at a price
equal to Eveready'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 Ralston, and such acquisition shall occur as soon as practicable thereafter.
In the event that Ralston does not wish to acquire the interest offered, then
the notifying Owner shall be free to proceed to sell all, but no less than all,
its entire interest in the Aircraft. Notwithstanding the above, however,
neither Eveready nor Agribrands may transfer its interest in any of 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 Ralston and the non-notifying Owner on terms reasonably acceptable
to Ralston, and (iii) without the written consent of Ralston and the
non-notifying Owner, which consent shall not be unreasonably withheld.
(b) If Ralston wishes to sell any of the Aircraft, but Eveready or
Agribrands object to such sale, Ralston may proceed to sell such Aircraft,
provided that the sale price is not less than the market value of the Aircraft,
as determined by an independent appraiser selected by Ralston and reasonably
acceptable to Eveready and Agribrands. The fees of such appraiser shall, in
such instance, be paid by Ralston. Ralston, Eveready and Agribrands will, in a
timely manner, execute and deliver such agreements and other instruments as
Ralston 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
Ralston from Eveready and Agribrands pursuant to this Agreement shall be
retained by Ralston from the proceeds of sale otherwise payable to Eveready or
Agribrands.
18. If Ralston, Eveready and Agribrands agree to sell any of the
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 Ralston from either
Eveready or Agribrands pursuant to this Agreement shall be retained by Ralston
from the proceeds of sale otherwise payable to Eveready or Agribrands.
19. This Agreement shall be in effect for as long as Ralston, Eveready
and Agribrands have joint ownership of either Aircraft, and the Agreement shall
terminate upon the completion of the sale or other transfer of all the 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 such Owner or 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 performed 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. Except as expressly provided in this Agreement, this Agreement
shall not be assignable by any party hereto, to any other person, firm or
entity, without the prior written consent of the other parties.
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 date
first above written.
RALSTON PURINA COMPANY EVEREADY BATTERY COMPANY
By:\s\ James R. Elsesser By: \s\ J. Patrick Mulcahy
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James R. Elsesser J. Patrick Mulcahy
AGRIBRANDS INTERNATIONAL, INC.
By: \s\ David R. Wenzel
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David R. Wenzel
Exhibit A - New Aircraft Purchase Agreement
