Exhibit 10.41
AGREEMENT
THIS AGREEMENT is entered into on November 10, 2004 and effective the 28
day of October, 2004 (the "Effective Date") by and between XXXXXX X. XXXXX, XX.,
M.D. ("Xx. Xxxxx") and MERCURY AIR GROUP, INC. ("Mercury").
RECITALS
A. Mercury and Xx. Xxxxx are the sole Members of MercMed, L.L.C., a Nevada
Limited Liability Company (the "Company).
B. The Company is the owner of a Cessna 501, bearing serial number
501-003, tail no. 911-MM (the "Aircraft"). The Aircraft is the sole asset of the
Company.
C. Mercury desires to sell and Xx. Xxxxx is willing to purchase Mercury's
Membership Interest in the Company.
D. The parties hereto have agreed that as of the Effective Date, the value
of the Aircraft is equal to the indebtedness owed to Salem Five Cents Savings
Bank for the aircraft in the amount of $657,000.
X. Xxxxx contends that additional consideration is owed to him arising out
of his actions as Chairman of the Board of Directors of Mercury, which
substantially enhanced the value of Mercury.
NOW, THEREFORE, the parties hereto agree as follows:
1. Mercury hereby sells, assigns and transfers to Xx. Xxxxx all of its
right, title and interest in and to the Company on the Effective Date.
2. Xx. Xxxxx shall pay the debt to Salem Five Cents Savings Bank in
accordance with its terms and all other expenses related to the Aircraft
incurred or outstanding commencing October 1, 2004, and hereby agrees to
indemnify and hold Mercury harmless from all costs and expenses, of every kind
and nature, related to the debt to Salem Five Cents Savings Bank.
3. Mercury agrees to pay all costs relating to the Aircraft incurred prior
to October 1, 2004, except for existing insurance policies which Mercury agrees
to pay through October 31, 2004, such costs including, but not limited to, Xxxxx
& Whitney and costs related to air conditioning on the Aircraft. Xx. Xxxxx shall
pay all costs and shall have responsibility for the Aircraft from the date
hereof.
4. Mercury agrees to provide Xx. Xxxxx with up to $75,000 in free jet fuel
for the Aircraft, to be provided at any MercFuel location over the next five
years. Fuel pricing and notice provisions shall be as set forth in Section 6.
5. Mercury agrees to provide Xx. Xxxxx with up to five (5) hours hours of
flight time per year, to be used until August 30, 2008, on Net Jet or Flight
Options or Citation Shares light jet aircraft (each of which shall be referred
to as a "Provider of Service) on an "as available" basis. Xx. Xxxxx shall pay
Mercury for such usage based on hourly rates then in effect (which are currently
approximately $1,360 for the Beachcraft, $1,360 for the Citation V, and $1,900
for the Hawker) plus fuel surcharges, fees and taxes as charged by the Provider
of Service with no administrative markup plus any additional charges incurred
but not limited to meals and special services provided by FBOs. Xx. Xxxxx shall
pay for the Provider of Services charges within five (5) business days of
presentment of an invoice by Mercury. If Xx. Xxxxx fails to do so, Mercury may,
among other remedies, terminate Xx. Xxxxx'x rights under this provision,
provided, however, prior to any such termination, Mercury shall provide Xx.
Xxxxx with an additional five (5) days notice to make the payment. Mercury shall
have no continuing obligation pursuant to this provision if it sells, in an arms
length transaction to a disinterested party, or terminates its fractional
interests with Net Jet, Flight Options or Citation.
6. Mercury agrees to provide Xx. Xxxxx with access to fuel at locations
where MercFuel maintains fuel inventory or has agreements to provide fuel to
aircraft. Mercury agrees to provide fuel at such locations at the most favorable
rates paid by its customers, plus in the case of Long Beach, MercFuel's cost of
fuel plus an into-plane fueling charge of $.25 per gallon, and in the case of
all other FBOs where MercFuel maintains inventory, or has arrangements as set
forth above, plus, if applicable, an into-plane fueling charge equivalent to the
into-plane fueling charge MercFuel is charged by the FBOs. The provisions in
this section shall apply for ten (10) years from the date hereof, but shall be
limited to three aircraft owned or partially owned by Xx. Xxxxx. Xx. Xxxxx shall
give the MercFuel dispatch center twenty-four (24) hours advance notice to
prearrange each fueling. Xx. Xxxxx shall pay for all fuel and into-plane charges
within thirty (30) days of presentment of an invoice by MercFuel. If Xx. Xxxxx
fails to do so, Mercury may, among other remedies, terminate Xxxxx'x rights
under this provision; provided, however, prior to any such termination, Mercury
shall provide Xx. Xxxxx with an additional five days notice and opportunity to
make the payment.
7. Xx. Xxxxx, on behalf of his spouse, assigns, affiliates, agents and
attorneys, hereby agrees to indemnify and hold harmless Mercury and its assigns,
affiliates, agents and attorneys from any and all debts, claims, demands,
liabilities, responsibilities, disputes, causes, damages, actions and causes of
action (whether at law or in equity) and obligations of every nature whatsoever,
whether liquidated or unliquidated, known or unknown, matured or unmatured,
fixed or contingent or whether direct, indirect or consequential, as a result of
or arising from or relating to any proceeding by, or on behalf of, any person,
whether threatened or initiated, asserting any claim for legal or equitable
remedy from or in connection with the Company or the Aircraft which arises from
or relates to any matter occurring after the date hereof.
8. Xx. Xxxxx will, within one year of the date of this Agreement,
refinance the indebtedness owed to Salem Five Cents Savings Bank so as to remove
Mercury as a party thereto. If Xx. Xxxxx fails to do so, Mercury may, among
other things, terminate Xxxxx'x rights under this agreement upon five (5)
business days notice, provided, however, prior to any such
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termination, Mercury shall provide Xx. Xxxxx with an additional five (5) days
notice to comply with this provision.
9. All notices or other communications, including invoices, that either
party may desire or may be required to give to the other party shall be by
either personal delivery or sent by facsimile transmission and by recognized
overnight carrier, addressed as follows:
If to Xxxxx: Xxxxxx X. Xxxxx, Xx., M.D.
0000 Xxxxx Xxxxxxxxx Xxx
Xxxxx 000
Xxxxxxx, XX 00000-0000
Copies to: Xxxxxxx X. Xxxxx
00000 Xxxxxxx Xxxxx Xxxxxxx
Xxxxx X-000
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Mercury: Xxxxxx X. Xxxxxx, President
Mercury Air Group, Inc.
0000 XxXxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Telephone No. (000) 000-0000
Facsimile No. (000) 000-0000
Any party may change the address to which notices are to be delivered by
giving notice as hereinabove provided.
10. Each of the parties hereto agrees to execute any and all documents
reasonably requested or deemed necessary by the other party to effect the terms
of this Agreement.
12. This Agreement may be executed in counterpart and by facsimile
signature.
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IN WITNESS WHEREOF, the parties have hereunto set their hands the day and
year written above.
MERCURY AIR GROUP, INC.
By:
_______________________ ______________________________
Xxxxxx X. Xxxxxx Xxxxxx X. Xxxxx, Xx., M.D.
President
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