Exhibit 10.11
AIRCRAFT REIMBURSEMENT AGREEMENT
This Agreement is entered into as of April 14, 1994, among Friendly Ice
Cream Corporation, a Massachusetts corporation ("Friendly"), and TRC Realty Co.,
a Vermont corporation ("Lessee").
R E C I T A L S
Lessee has entered into that certain Aircraft Lease Agreement dated as
of April 14, 1994 (as amended, supplemented or modified from time to time, the
"Lease") with General Electric Capital Corporation ("Lessor") providing for the
lease by Lessee from the Lessor of a certain Beechjet 400A aircraft, FAA
Registration Mark N998GP and Manufacturer's Serial Number RK-32, together with
two Pratt & Whitney JT-15D-5 engines and related accessories and optional
equipment (collectively, the "Aircraft"). Friendly is an Affiliate of Lessee,
will be using the Aircraft in its business from time to time as permitted by the
Lease, and desires under this Agreement to provide for its reimbursement of
Lessee for certain costs and expenses of its use of the aircraft.
It is hereby agreed as follows:
1. Terms used with initial capital letters in this Agreement and not
otherwise defined shall have the respective meanings given thereto in the Lease.
The following terms when used in this Agreement shall have the meanings
indicated below:
"Contract User" shall mean Friendly and any other Affiliate of
Lessee which has entered into an Aircraft Reimbursement Agreement with
Lessee on substantially the same terms and conditions as are contained
in this Agreement.
"Fixed Costs" shall mean, with respect to any month, those
costs and expenses associated with the possession and use of the
Aircraft for such month of the type which are reflected as "Fixed
costs" on Exhibit A hereto.
"Usage Share" shall mean, with respect to each Contract User,
such Contract User's share (expressed as a percentage) of the usage of
the Aircraft by all Contract Users during the preceding month, which
share shall be determined by dividing the number of hours of use of the
Aircraft by such Contract User during such month by the total number of
hours of use of the Aircraft during such month by all Contract Users.
"Variable Expenses" shall mean, with respect to any month, all
costs and expenses incurred in connection with the possession and use
of the Aircraft during such month other than Fixed Costs, and shall
include, without limitation, those costs and expenses of the type which
are reflected as "Variable Expenses" on Exhibit A.
2. Lessee agrees to make the Aircraft available for use by Friendly on
request, subject to the availability of the Aircraft and Lessee's customary
scheduling requirements. It is understood and agreed, however, that Lessee shall
be and remain solely responsible for the possession and use of the Aircraft and
for the payment and performance of all obligations under the Lease, and Friendly
shall have no responsibility or obligation with respect thereto except for the
reimbursement of costs as provided for in Section 4(a) of this Agreement.
3. This Agreement shall be for a term commencing on April 14, 1994 and
continuing to and through the Term of the Lease.
4. (a) Friendly shall reimburse Lessee monthly an amount equal to the
sum of (a) one-half (1/2) of the Fixed Costs of the Aircraft for the preceding
month, and (b) its Usage Share of the Variable Expenses of the Aircraft for the
preceding month; provided, however, that if there are more than two Contract
Users at any time during the term of this Agreement, the denominator in the
fraction in the foregoing clause (a) shall be increased to the total number of
Contract Users.
(b) For the purposes of this Agreement, Fixed costs and Variable
Expenses shall be Lessee's fully allocated costs, as determined by Lessee from
its books and records in accordance with generally accepted accounting
principles. The gross receipts received by Lessee with respect to any month from
the use of the Aircraft by a person other than a Contract User shall be credited
to Fixed Costs or Variable Expenses for such month in such consistent manner as
Lessee shall in good faith deem appropriate. All determinations of hourly use of
the Aircraft by Friendly for each month shall be made by Lessee in accordance
with its books and records.
(c) The Lessee will bill Friendly monthly, promptly after the last day
of the month, for the amount of its reimbursement amount for the Aircraft for
the preceding month, which bill will be due and payable within ten (10) days.
5. Lessee, if requested by Friendly shall permit Friendly to audit its
books and records relating to the costs and Aircraft usage being reimbursed
hereunder.
6. Nothing herein contained shall be construed as constituting a
partnership, joint venture or agency between Lessee and Friendly.
7. Each party hereto intends that this Agreement shall not benefit or
create any right or cause of action in or on behalf of any person other than the
parties hereto.
8. All terms and provisions of this Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and the respective successors
and assigns; provided, however, that this Agreement may not be assigned by
either party hereto without the written consent of the other party (which
consent shall not be unreasonably withheld).
9. This Agreement shall be governed by the laws of the State of
Illinois.
In witness whereof, the parties have signed this Agreement as of the
date first above written.
FRIENDLY ICE CREAM CORPORATION
By: /s/ George G. Roller
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Its: V.P. & Treasurer
TRC REALTY CO.
By: /s/ Larry W. Browne
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Its: Executive Vice President
EXHIBIT A
TRC REALTY CO.
AIRCRAFT REIMBURSEMENT ALLOCATION
FIXED COSTS
Lease Payments
Pilot (Salaries & Benefits)
Pilot Relocation
Hangar Rental
Property Taxes
Letter of Credit Fees
Set Up Expenses
Other Fees
Dues & Subscriptions
Supplies
Telephone
Amortization
Insurance
VARIABLE EXPENSES
Fuel
Maintenance
Engine
Landing Fees
Pilot Travel Expenses
Catering Costs