[LOGO]
GULFSTREAM AEROSPACE CORPORATION
OUTFITTED GULFSTREAM V SALES AGREEMENT
CONDITIONS
Subject to the Terms of Gulfstream V Sales Agreement contained in
Addendum I, which is incorporated herein and made a part hereof
by reference, the BUYER and GULFSTREAM AEROSPACE CORPORATION
("GULFSTREAM") agree as follows:
ARTICLE 1 DEFINITIONS
The following definitions shall apply to the following terms used
in the Terms and Conditions of the Gulfstream V Sales Agreement:
"Agreement" shall mean the Terms of the Gulfstream V Sales
Agreement and the Conditions of the Gulfstream V Sales Agreement.
"Aircraft" shall mean the Gulfstream V aircraft, more fully
described in Addendum I.
"Aircraft Service Changes" are GULFSTREAM published documents
under the same name which provide detailed instructions for
modifications to the Aircraft.
"Authorized Warranty Repair Facility" shall mean an independently
owned aircraft repair facility which has entered into a
Gulfstream Authorized Warranty Repair Agreement with GULFSTREAM
to provide certain warranty services at specific terms and
conditions. The identity and location of the current Gulfstream
Authorized Warranty Repair Facilities are available upon request
from GULFSTREAM. GULFSTREAM reserves the right to add and delete
facilities from its Gulfstream Authorized Warranty Repair
Facility list at its sole discretion.
"Certificate of Airworthiness" shall mean the FAA document
confirming the Aircraft has been inspected and found to conform
to the Type Certificate, is safe for operation, and has been
shown to meet the requirements of the applicable comprehensive
and detailed airworthiness code as provided by Annex 8 to the
Convention on International Civil Aviation.
"Components" shall mean components, systems, accessories,
equipment, or parts of the Aircraft not otherwise included in the
definition of Primary and Secondary Structure.
"Delivery Time" is the date the BUYER and GULFSTREAM execute the
Memorandum of Delivery pursuant to the terms of Article 2.
"Discrepancy" shall mean a condition in the Aircraft which does
not conform to the Product Specification or warranted condition
of the Aircraft.
"FAA" shall mean the United States of America, Department of
Transportation, Federal Aviation Administration.
"Operational Delivery" shall mean the first flight of the
Aircraft following the Aircraft's Outfitting.
"Outfitting" or "Outfitted" shall refer to the initial addition
of interior furnishings and equipment and external paint to the
Aircraft.
"Gulfstream Interior Interface Specification" is a document
licensed by aircraft serial number by GULFSTREAM entitled
Gulfstream Interior Interface Specification, which will be in
form and substance similar to GIV Outfitting Interface
Specification (Report #1159C-GER-023, Revision 4 dated November
2, 1993).
"Preliminary Acceptance Time" is the date the BUYER executes the
Memorandum of Preliminary Acceptance pursuant to the terms of
Article 2.
"Primary and Secondary Structure" shall mean the aluminum, steel,
and/or graphite or fiberglass composite materials, including the
fasteners attached thereto, which form the fuselage, wings,
vertical and horizontal stabilizers, flight control surfaces,
fairings, doors, and engine mounts including attachment and
support structures found within these areas.
"Service Bulletins" shall mean GULFSTREAM published documents
under the same name which give general advice to operators of the
Aircraft.
ARTICLE 2 DELIVERY
SECTION 2.1 PRELIMINARY DELIVERY AND ACCEPTANCE
(a) GULFSTREAM shall tender the Green Aircraft to BUYER for
Preliminary Acceptance at GULFSTREAM's plant in Savannah, Georgia
on or about the Scheduled Preliminary Acceptance Date.
GULFSTREAM shall give BUYER not less than five (5) days advance
written notice of the actual tender date at which time the
Aircraft shall have a valid Certificate of Airworthiness and be
available for immediate flight testing. Within fifteen (15) days
of receipt of GULFSTREAM's notice, BUYER, at its sole discretion,
shall elect either to inspect the Green Aircraft per the
procedures set forth below or accept the Aircraft for purposes of
identifying it as the Aircraft to be Outfitted under this
Agreement without inspection at this time by executing a
Memorandum of Preliminary Acceptance, reserving all BUYER's
rights to further inspections.
(b) If BUYER elects to inspect the Aircraft under Section
2.1(a), the Green Aircraft shall be made available for inspection
and initial flight test of not more than two (2) hours duration
participated in by not more than two (2) of the BUYER's
representatives to confirm that the Green Aircraft meets its
requirements as identified in this Agreement and is acceptable to
BUYER for further Outfitting. Following the completion of this
initial flight test and correction of Discrepancies, if any,
BUYER shall execute a Memorandum of Preliminary Acceptance which
may list deferred Discrepancies, but otherwise reserves BUYER's
rights to require that the identified Aircraft meet the terms of
this Agreement at the Delivery Time.
(c) The BUYER, at its sole election, may require GULFSTREAM
to deliver to BUYER an FAA Bill of Sale or a Warranty Bill of
Sale at the Preliminary Acceptance Time if all current payment
obligations under Addendum I have been met.
SECTION 2.2 FINAL DELIVERY AND ACCEPTANCE
(a) Following the completion of the Outfitting, GULFSTREAM
shall tender the Aircraft to BUYER for final inspection and
flight testing at the Completion Facility and delivery at the
Completion Facility or other mutually agreed location on or about
the Scheduled Delivery Date. GULFSTREAM shall give BUYER not less
than five (5) days advance written notice of the actual tender
date at which time the Aircraft will have been reissued a
Certificate of Airworthiness and be in the condition warranted by
GULFSTREAM under Article 6 hereof. Within fifteen (15) days of
receipt of GULFSTREAM's notice, BUYER shall commence inspection
of the Aircraft and flight testing of the Aircraft of not more
than two (2) hours duration by not more than two (2) of BUYER's
representatives to confirm that the Aircraft meets the terms of
this Agreement. Any Discrepancies discovered during this flight
test or inspection shall be promptly corrected by GULFSTREAM at
no cost to BUYER. Following the correction of a Discrepancy, the
Aircraft shall be reinspected or flight tested as appropriate.
(b) Upon the completion of the inspection and flight tests
reasonably required by BUYER to confirm that the Aircraft meets
the terms and conditions of this Agreement and is free of
Discrepancies, the BUYER shall execute a Memorandum of Delivery.
Upon BUYER's execution of the Memorandum of Delivery, BUYER shall
remit the balance of the Total Purchase Price as determined under
Addendum I, and GULFSTREAM shall deliver possession of the
Aircraft to BUYER together with the Bills of Sale required under
this Agreement to the extent not previously delivered.
SECTION 2.3 Upon delivery by GULFSTREAM to BUYER of a Bill of
Sale under either Section 2.1 or 2.2, all risks of loss or damage
to the Aircraft shall be borne by BUYER, and further, title to
the Aircraft shall pass from GULFSTREAM to BUYER. Upon BUYER's
execution of the Memorandum of Delivery and final payment under
Addendum I, title to all Outfitting shall pass to BUYER free and
clear of any security interest or other lien or encumbrance
liens. GULFSTREAM warrants that the transfer of title in the
Aircraft to BUYER under this Section shall vest full title in
BUYER free and clear of any security interest or other lien or
encumbrance against the Aircraft.
SECTION 2.4 If BUYER does not meet its obligations to execute
a Memorandum of Preliminary Acceptance, inspect or flight test
the Aircraft, or execute a Memorandum of Delivery, then (1) any
unpaid balance of the Total Purchase Price as determined under
Addendum I shall become due and payable, (2) all risk of loss or
damage to the Aircraft shall thereafter be borne by BUYER, and
(3) GULFSTREAM shall provide the Aircraft with suitable outside
storage and routine maintenance at the expense of BUYER.
Further, upon ten (10) days prior written notice to BUYER,
GULFSTREAM may terminate this Agreement no sooner than twenty-
five (25) days after the unpaid balance of the Total Purchase
Price has become due, and payable under this Section 2.4 and
pursue its remedies under Section 9.2.
SECTION 2.5 All fuel costs and pilot expenses associated with
flight tests conducted under this Article 2 shall be at the
expense of GULFSTREAM. All fuel costs and pilot expenses
associated with ferry flights conducted after the Preliminary
Acceptance Time shall be at the expense of BUYER.
SECTION 2.6 If after the Delivery Time, the Aircraft remains
in or is returned to GULFSTREAM's care, custody, or control for
any purpose, BUYER shall retain risk of loss and hereby agrees to
waive on behalf of itself and its insurance carrier(s) any
aircraft hull or property claim, by way of subrogation or
otherwise, against GULFSTREAM for damages to or loss of the
Aircraft while in flight arising out of or by reason of such
care, custody, or control, including claims that such damages or
loss are the result of GULFSTREAM' own negligence. Nothing in
this Section 2.6 shall be deemed to release GULFSTREAM of its
obligations for third parties claims for personal injuries or
deaths alleged to be caused by GULFSTREAM's negligence.
ARTICLE 3 TAXES AND PAYMENT OBLIGATIONS
SECTION 3.1 Time is of the essence in the payment of all
obligations under this Agreement. All payments not received when
due shall bear interest at two (2) percentage points above the
prime rate charged by the Chemical Bank, New York, New York or
its successor on the date due, provided such interest rate shall
not exceed the maximum rate permitted by law.
SECTION 3.2 A. The Total Purchase Price does not include any
sales, use, personal property, excise, or other similar taxes or
assessments which may be imposed by any governmental authority
upon this sales transaction, the Aircraft itself, or the use
thereof by BUYER. BUYER agrees to pay any and all such taxes or
assessments (or at its sole expense to defend against the
imposition of any such taxes) which it is or may be held
obligated by law to pay. GULFSTREAM shall notify BUYER of any
such tax that any governmental authority is seeking to collect
from GULFSTREAM, and BUYER may assume the defense thereof at its
sole expense. If BUYER does not defend, GULFSTREAM may pay the
asserted tax and BUYER shall thereupon be obligated to reimburse
GULFSTREAM for said tax and all reasonable expenses related
thereto.
B. The Total Purchase Price includes all sales, excise, or
similar taxes assessed on the sale of materials or equipment to
GULFSTREAM for incorporation into the Aircraft and any personal
property taxes assessed against the Aircraft or any part thereof
prior to the Delivery Time, and the BUYER is not responsible for
any additional payment in respect thereto. GULFSTREAM shall also
pay any taxes imposed by the United States government, or any
political subdivision thereof, on the income resulting from the
sale of the Aircraft.
ARTICLE 4 TECHNICAL DATA
SECTION 4.1 At the Delivery Time, GULFSTREAM shall deliver to
BUYER one (1) copy (together with all amendments to date, where
applicable) of each of the following:
(a) FAA Bill of Sale,
(b) Warranty Bill of Sale in the form attached hereto as
Appendix B,
(c) Flight Manual approved by the FAA (including a Cruise
Control Manual),
(d) Maintenance Manual (including Chapter 5 "Time Limits/
Maintenance Checks"),
(e) Wiring Diagrams,
(f) Parts Catalog,
(g) Service Bulletins and Aircraft Service Changes
currently applicable to the Aircraft,
(h) Airframe, Engines and Auxiliary Power Unit Logbook,
(i) FAA Certificate of Airworthiness,
(j) Weight and Balance Manual,
(k) Structural Repair Manual.
SECTION 4.2 Commencing on the date of execution of this
Agreement, GULFSTREAM will deliver to BUYER, from time to time,
printed copies of Service Bulletins and Aircraft Service Changes
applicable to the Aircraft. GULFSTREAM, from and after the
Delivery Time, will also furnish to BUYER, at no additional
charge, any amendments to the manuals and catalog described in
Section 4.1 applicable to the Aircraft for a period of ten (10)
years after the Delivery Time.
SECTION 4.3 It is understood that all of the publications,
data, drawings, or other information described in this Article 4
or in the Product Specification are proprietary to GULFSTREAM and
that all intellectual property rights belong to GULFSTREAM, shall
be kept confidential by BUYER, and shall not be disclosed, used,
or transmitted to others except for the purpose of permitting
BUYER or any subsequent owner to maintain, operate or repair the
Aircraft, or make any permitted installation or alteration
thereto.
ARTICLE 5 SPARE PARTS
SECTION 5.1 GULFSTREAM shall maintain a reasonable stock of
suitable and interchangeable spare parts for the Aircraft for
routine repairs and replacements for a period of twenty (20)
years after the date GULFSTREAM delivers its last production
model of the Gulfstream V Aircraft.
ARTICLE 6 WARRANTY
SECTION 6.1 GENERAL - A. Subject to the limitations and
conditions hereinafter set forth, GULFSTREAM warrants that the
Primary and Secondary Structure and the Components of the
Aircraft supplied hereunder shall
(a) at the Delivery Time be free from:
(i) defects in material or workmanship,
(ii) defects arising from the selection of material or
process of manufacture,
(iii) defects inherent in the design thereof in view of the
state of the art at the time of design thereof;
(b) at the Delivery Time and throughout the periods identified
in Section 6.2, be free from:
(i) defects arising from the failure to conform to the
Product Specification as it may be changed pursuant to
this Agreement, except failure to conform to such
portions of the Product Specification stated to be
estimates, approximations, design objectives or design
criteria, or described as not guarantees, and
(ii) defects arising from the failure to conform to the FAA
Type Certificate, as the Type Certificate existed at
the Delivery Time; and
(c) at the Delivery Time and throughout the periods identified
in the BMW Rolls-Royce GmbH warranty provided under Section
6.7, be free from:
(i) defects in workmanship furnished by GULFSTREAM in the
process of installation of the engines and nacelles,
and
(ii) defects inherent in the design of the installation of
the engines and nacelles in view of the state of the
art at the time of the design thereof.
B. Subject to the limitations and conditions hereinafter set
forth, GULFSTREAM warrants that the Outfitting of the Aircraft
supplied hereunder shall, at the Delivery Time, be free from:
(1) defects arising from the failure to conform to the
Completion Specification,
(2) defects in materials or workmanship of Primary or
Secondary Structure or Components manufactured by
GULFSTREAM,
(3) defects in workmanship furnished by GULFSTREAM in the
process of installation of Components, and
(4) defects inherent in the design of the installation of
Components, in view of the state of the art at the time
of the design thereof.
SECTION 6.2 DURATION - A. The extent of GULFSTREAM's liability
under Section 6.1 (A) Warranty as to defects in the Primary and
Secondary Structure is limited to the repair under Section 6.3 of
all such defects in the Aircraft which are discovered within a
period from the date the initial Certificate of Airworthiness is
issued of twenty (20) years or twenty thousand (20,000) hours of
flight operation of the Aircraft, whichever is shorter.
B. The extent of GULFSTREAM's liability under Section 6.1
(A) Warranty as to defects in all Components other than the
Components listed in Section 6.7 is limited to the repair under
Section 6.3 of all such defects which become apparent in the
Aircraft within a period of six years from the date the initial
Certificate of Airworthiness is issued.
C. Notwithstanding the foregoing Section 6.2(A) and (B), the
extent of GULFSTREAM's liability under Section 6.1(B) Warranty
for the Outfitting is limited to correction at its expense of all
such defects which become apparent in the Aircraft within a
period from the Delivery Time of twelve (12) months.
SECTION 6.3 REPAIRS - A. GULFSTREAM's obligation for a breach
of a warranty provided under Section 6.1 during the periods
described in Section 6.2 shall be to repair, replace, or correct,
at GULFSTREAM's sole election, the defective part or condition
with reasonable care and dispatch. All parts and labor required
to support the disassembly and/or removal of the defective
Primary or Secondary Structure or Component and installation and
reassembly of the corrected Primary or Secondary Structure or
Component shall be at GULFSTREAM's expense, provided such work is
performed at GULFSTREAM's facilities or an Authorized Warranty
Repair Facility.
B. The cost of a temporary or interim repair, replacement,
or correction of a defect covered under this Article 6 Warranty
and authorized by GULFSTREAM by facsimile, telex, or otherwise in
writing shall be at GULFSTREAM's expense.
C. GULFSTREAM's obligation under this Section 6.3 shall
include correction or repair for defects to the Primary and
Secondary Structure or Components documented by Service Bulletins
or Aircraft Service Changes to the extent such defects would
otherwise be covered under this Article 6 Warranty.
D. All transportation costs, including the costs associated
with ferrying the Aircraft to and from GULFSTREAM's facilities or
an Authorized Warranty Repair Facility or the shipment of
defective or repaired, replaced, or corrected parts or Components
under this Article 6 Warranty, shall be at BUYER's expense.
SECTION 6.4 EXCLUSIONS - GULFSTREAM's obligations under
Section 6.3 above exclude the following:
(a) Routine inspections other than those specifically required
by GULFSTREAM or a governmental authority to inspect for
known design or manufacturing defects,
(b) Routine maintenance as specified in the Aircraft's
Maintenance Manuals or GULFSTREAM's Computerized Maintenance
Program, including scheduled replacement of life limited
components,
(c) Repair or replacement due to normal wear and tear,
(d) Repair or replacement of consumable parts and materials,
(e) Repair or replacement of defective Components covered by the
BMW Rolls-Royce GmbH warranty identified in Section 6.7, or
(f) After expiration of the twelve (12) month warranty in
Section 6.2C above repair or replacement of defective
Components incorporated into the Aircraft as part of the
Outfitting that were not manufactured by GULFSTREAM.
SECTION 6.5 EXCLUSION FOR MISUSE - The warranties set forth in
this Section 6.1 shall not apply to any defect in the Aircraft or
parts thereof (1) which is the proximate result of an accident,
misuse, neglect, improper installation, improper repair, or
improper modification by persons other than GULFSTREAM, its
agents or employees, or an Authorized Warranty Repair Facility;
(2) if the Aircraft parts were not obtained by BUYER from
GULFSTREAM, its agents or employees, or an Authorized Warranty
Repair Facility or a source authorized by GULFSTREAM; or (3) if
the Aircraft or parts thereof have not been operated or
maintained in accordance with GULFSTREAM's approved operating and
maintenance manuals, instructions, or bulletins issued in respect
of the Aircraft.
SECTION 6.6 BUYER'S OBLIGATIONS - To be entitled to the
benefits of the warranty set forth in this Article 6,
(a) BUYER shall report all failures or defects in writing, by
telegram, or by facsimile to GULFSTREAM prior to the alleged
defect being corrected and within sixty (60) days following such
failure or defect becoming apparent, and
(b) BUYER shall maintain complete records of operations and
maintenance of the Aircraft and engines and make those records
available to GULFSTREAM for GULFSTREAM's inspection. Failure to
maintain such records shall relieve GULFSTREAM of its warranty
obligation hereunder.
SECTION 6.7 BMW ROLLS-ROYCE GMBH WARRANTY - Except to the
extent identified in Section 6.1(A)(C), GULFSTREAM's liability
under Section 6.1 and obligations under Sections 6.2 and 6.3 do
not apply to the BMW Rolls-Royce BR 710 Engines, nacelles, and
spare parts. However, GULFSTREAM represents that the separate
warranty from BMW Rolls-Royce GmbH is attached hereto and will be
extended by BMW Rolls-Royce GmbH for these items to BUYER.
SECTION 6.8 DISCLAIMER AND RELEASE OF OTHER OBLIGATIONS - A.
THE WARRANTIES SET FORTH IN THIS ARTICLE 6 ARE EXCLUSIVE AND IN
LIEU OF ALL OTHER WARRANTIES (EXCEPT FOR THE WARRANTY OF TITLE)
AND REPRESENTATIONS EXPRESS, IMPLIED, OR STATUTORY, INCLUDING BUT
NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS (INCLUDING FITNESS FOR A PARTICULAR PURPOSE). These
warranties are also in lieu of all other obligations and
warranties (including without limitation, the implied warranties
of merchantability and fitness for a particular purpose) related
to any modifications, repairs, replacement parts, or service
change kits which may hereafter be furnished by GULFSTREAM to
BUYER for use on the Aircraft either pursuant to this Article 6
or otherwise.
B. Except for the obligations expressly undertaken by
GULFSTREAM herein, BUYER hereby waives and releases all rights,
claims, and remedies with respect to any and all warranties
express, implied or statutory (including without limitation, the
implied warranties of merchantability and fitness), duties,
obligations, and liabilities in tort or contract arising by law
or otherwise including (1) liability for GULFSTREAM's own
negligence, (2) strict liability or product liability, and (3)
any obligations of GULFSTREAM with respect to incidental or
consequential damages, damages for loss of use, or change in
market value of the Aircraft.
C. If an alleged defect which would be covered by this
Article 6 Warranty causes the destruction of the Aircraft beyond
economical repair, then and only then, BUYER hereby waives and
releases for itself and its insurers all rights, claims, and
remedies with respect to any claims for the recovery of the value
of the Aircraft or for loss of use of the Aircraft with respect
to any and all warranties expressed (including those provided in
this Article 6), implied or statutory (including without
limitation, the implied warranties of merchantability and
fitness), duties, obligations, and liabilities in tort or
contract arising by law or otherwise including (1) liability for
GULFSTREAM's own negligence or (2) strict liability or product
liability. This Section 6.8 (C) shall not be interpreted to
affect in any way GULFSTREAM's obligations, if any, for third
party claims for property damage, personal injury, or wrongful
death.
SECTION 6.9 150 HOUR INSPECTION - GULFSTREAM shall perform
GULFSTREAM's recommended 150 hour post production warranty
inspection on the Aircraft at no charge to BUYER. Such
inspection shall be performed at GULFSTREAM's facility or an
Authorized Warranty Repair Facility. Transportation costs shall
be at BUYER's expense.
SECTION 6.10 ASSIGNMENT - The warranties set forth in this
Article 6 shall run to BUYER, its successors, assigns, and to all
persons whom title to the Aircraft may be transferred during the
warranty period set forth in this Article 6, provided that the
subsequent purchaser agrees in writing to all terms and
conditions contained within this Article 6 and performs all
obligations of BUYER hereunder.
SECTION 6.11 MODIFICATION - No agreement or understanding
varying or extending these warranties will be binding upon
GULFSTREAM unless in writing, signed by a duly authorized
representative of GULFSTREAM.
ARTICLE 7 CHANGES
SECTION 7.1 Prior to the Delivery Time, GULFSTREAM shall have
the right, without the prior written consent of BUYER, to make
changes in the Aircraft or Product Specification and to
substitute equivalent equipment, accessories or materials in the
Aircraft where such changes or substitutions are deemed necessary
by GULFSTREAM to prevent delays in manufacture or delivery or to
improve the performance, producibility, stability, control,
utility, safety, pilot workload, maintenance, or appearance of
the Aircraft provided that such changes or substitutions shall
not adversely affect the Delivery Time or the performance of the
Aircraft. All costs of any such changes shall be borne by
GULFSTREAM.
SECTION 7.2 GULFSTREAM will make any changes in the Aircraft
which are required by applicable law or interpretation thereof by
the FAA established after the execution date of this Agreement
and before the Delivery Time to permit GULFSTREAM to obtain the
appropriate Certificate of Airworthiness as referred to in
Section 2.1. GULFSTREAM will give notice to BUYER upon obtaining
knowledge of such requirement. BUYER shall remit to GULFSTREAM
at the Delivery Time one-half of the amount of the reasonable
costs incurred by GULFSTREAM to effect the change, or give
GULFSTREAM notice prior to the Delivery Time of its intention not
to remit its portion of such costs. Upon receiving such notice
GULFSTREAM may elect to either bear all costs arising under this
Section and complete performance under this Agreement or
terminate this Agreement by giving BUYER prompt notice of such
termination. If GULFSTREAM terminates this Agreement under this
Section, GULFSTREAM shall return to BUYER all payments (without
interest) previously made by BUYER which are applicable to the
Total Purchase Price of the Aircraft and neither party shall have
any further liability to the other resulting from this Agreement.
ARTICLE 8 EXCUSABLE DELAYS
SECTION 8.1 GULFSTREAM shall not be charged with any liability
for failure or delay in the performance of this Agreement when
the failure or delay is due to causes beyond the reasonable
control of GULFSTREAM or without its fault or negligence. Such
causes include but are not limited to: Acts of God; force
majeure; any act of government, including FAA certification
delays or delays in relevant non-U.S. government aviation
certification; delay in transportation; strikes or labor trouble
causing cessation, slow-down or interruption of work; or the
inability after due and timely diligence of GULFSTREAM to procure
materials, accessories, equipment, or parts. The occurrence of
such a cause of GULFSTREAM's failure or delay shall extend the
Scheduled Delivery Date by the period of time required for
GULFSTREAM to correct the cause of the failure or delay by using
its best efforts to eliminate such cause or to overcome the
effect thereof. However, if the period of time required for
correction shall be more than six (6) months, either party may
terminate this Agreement by giving written notice to the other
party within a fifteen (15) day period immediately following such
six (6) month period. In the event of a termination under this
Section 8.1, or if the cause of the failure or delay is such as
to render performance impossible, GULFSTREAM shall return to
BUYER all payments previously made by BUYER (without interest)
which are applicable to the Total Purchase Price of the Aircraft
and neither party shall have any further liability to the other,
resulting from this Agreement.
ARTICLE 9 TERMINATION
SECTION 9.1 This Agreement may be terminated by GULFSTREAM
prior to the Delivery Time:
(a) under Section 2.4,
(b) under Section 7.2,
(c) under Section 8.1,
(d) upon the failure of the BUYER to make payments as
specified in Addendum I,
(e) upon breach or default by BUYER of any other Terms or
Conditions of this Agreement and the failure of BUYER to
cure or remedy such breach or default promptly after
receipt of notice thereof from GULFSTREAM, or
(f) without prior notice to BUYER, upon the occurrence of any
of the following events:
(i) the insolvency of BUYER,
(ii) the institution by or against BUYER of any
involuntary proceedings not dismissed within sixty
(60) days or any voluntary proceeding under any
insolvency or bankruptcy law,
(iii) the adjudication of BUYER as a bankrupt or an
insolvent,
(iv) the appointment of a receiver of BUYER's property,
or
(v) an assignment by BUYER for the benefit of its
creditors.
SECTION 9.2 Upon the termination of this Agreement due to any
of the events set forth in Section 9.1(a), (d) or (e), GULFSTREAM
may elect, in GULFSTREAM's sole discretion:
(a) To resell the Aircraft to a third party in a commercially
reasonable transaction. Upon such a sale, GULFSTREAM will first
apply the amount received from the resale to satisfy GULFSTREAM's
reasonable expenses, including the expense of the sale of the
Aircraft (including sales commissions), storage charges, ordinary
maintenance expenses, and other costs which resulted from BUYER's
failure to commence flight testing and inspection or to accept
the Aircraft. GULFSTREAM shall refund to BUYER the amount
received through the resale up to the amount of payments made by
BUYER under Addendum I less reasonable expenses incurred in
resale as defined above and less the difference between the Total
Purchase Price and the resale price, if and only if, the latter
price is less than the former price;
(b) to recover, as liquidated damages and not as a penalty,
(i) prior to the Scheduled Preliminary Acceptance Date, the
amount of ONE MILLION U.S. DOLLARS ($1,000,000.00) by
retaining the non-refundable down payment,
(ii) after the Scheduled Preliminary Acceptance Date, FOUR
MILLION U.S. DOLLARS ($4,000,000.00), by:
(A) retaining the non-refundable down payment in the amount
of ONE MILLION U.S. DOLLARS ($1,000,000.00) and THREE
MILLION U.S. DOLLARS ($3,000,000.00) from the
previously received payments, or
(B) retaining the non-refundable down payment in the amount
of ONE MILLION U.S. DOLLARS ($1,000,000.00) and
returning to BUYER the Trade-In Aircraft, GIV Serial
Number 1042, upon receipt from BUYER of an additional
THREE MILLION U.S. DOLLARS ($3,000,000.00), or
(C) reselling the Trade-In Aircraft, GIV Serial Number
1042, free and clear of any and all other obligations
to BUYER and retaining from the non-refundable down
payment and proceeds from the resale FOUR MILLION U.S.
DOLLARS ($4,000,000.00) and returning to BUYER the
remaining proceeds collected from the resale.
(c) such other legal remedies as may be available to GULFSTREAM.
SECTION 9.3 This Agreement may be terminated by BUYER prior to
the Delivery Time:
(a) under Section 8.1;
(b) upon the default or breach by GULFSTREAM of any of the Terms
and Conditions hereof and the failure of GULFSTREAM to cure or
remedy such default or breach promptly after receipt of notice
thereof from BUYER provided, however, that a delay of less than
three (3) months beyond the Scheduled Delivery Date shall not be
deemed to be a default or breach within the meaning of this
paragraph (b) unless GULFSTREAM fails to use reasonable efforts
to remove the causes of the delay and to resume performance of
this Agreement with dispatch when such causes are removed; and
provided, further, that BUYER at all times shall have the right
to refrain from exercising its right to termination under this
paragraph (b), and, except as provided in Section 9.5, to require
specific performance by GULFSTREAM of this Agreement; and
(c) immediately, and without prior notice to GULFSTREAM, upon
the occurrence of any of the following events:
(i) the insolvency of GULFSTREAM,
(ii) the institution by or against GULFSTREAM of any
involuntary proceedings not dismissed within sixty
(60) days or any voluntary proceedings under any
insolvency or bankruptcy law,
(iii) the adjudication of GULFSTREAM as a bankrupt or an
insolvent,
(iv) the appointment of a receiver of GULFSTREAM'S
property, or
(v) an assignment by GULFSTREAM for the benefit of
creditors.
SECTION 9.4 In the event BUYER elects to terminate this
Agreement pursuant to Section 9.3 (b), GULFSTREAM shall promptly
return to BUYER all payments made by BUYER which are applicable
to the Total Purchase Price plus interest at the prime rate
charged by Chemical Bank, New York, New York or its successor
from the time of receipt the funds by GULFSTREAM to the time of
refund to BUYER, and neither party shall have any further
liability to the other resulting from this Agreement.
SECTION 9.5 This Agreement shall terminate upon the
destruction or damage beyond economic repair (as GULFSTREAM may
determine) of the Aircraft. In the event this Agreement is
terminated pursuant to this Section 9.5, GULFSTREAM shall
promptly return to BUYER all payments (without interest)
theretofore made by BUYER which are applicable to the Total
Purchase Price and neither party shall thereafter have any
further liability to the other resulting from this Agreement.
ARTICLE 10 MISCELLANEOUS
SECTION 10.1 Any notice given under this Agreement shall be
sent by registered or certified mail, air courier delivery
service, or telegraph to the recipient party at the address shown
on Addendum I or by facsimile to a telephone number provided by
the recipient party. A notice shall be deemed given when
received.
SECTION 10.2 The Terms and Conditions of this Agreement
constitute the entire agreement between the parties hereto with
respect to the purchase and sale of the Aircraft and shall
supersede all communications, representations or agreements,
either oral or written, between the parties hereto with respect
to the subject matter hereof. No agreement or understanding
varying the terms and conditions hereof shall be binding upon
either party hereto unless in writing attached hereto and signed
by duly authorized representatives of both parties.
SECTION 10.3 This Agreement shall be construed and interpreted
in accordance with the laws of the State of Georgia.
SECTION 10.4 This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective
successors and assigns, but this Agreement may not be voluntarily
assigned in whole or in part by BUYER without the prior written
consent of GULFSTREAM.
SECTION 10.5 Any controversy or claim between the parties
arising out of or relating to this Agreement, or the breach
thereof, shall be settled by arbitration in Savannah, Georgia by
three (3) arbitrators under the Commercial Arbitration Rules of
the American Arbitration Association ("AAA") and administered by
the AAA. Each party shall appoint one (1) arbitrator. The two
(2) arbitrators thus appointed shall choose the third arbitrator,
who shall act as chairman. If within thirty (30) days after the
receipt of a party's notification of the appointment of its
arbitrator the other party has not notified the first party of
the arbitrator he has appointed, the first party may request the
AAA to appoint the second arbitrator. If within thirty (30) days
after the appointment of the second arbitrator the two
arbitrators have not agreed on the choice of the third
arbitrator, either party may request the AAA to appoint the third
arbitrator from the panel of the AAA pursuant to Rule 15 of the
Commercial Arbitration Rules of the AAA.
GULFSTREAM AEROSPACE CORPORATION ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------- ------------------------------
(BUYER)
/s/ ▇.▇. ▇▇▇▇▇▇▇▇, ▇▇. /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------- ------------------------------
SIGNATURE OF GULFSTREAM's SIGNATURE OF BUYER's
AUTHORIZED REPRESENTATIVE AUTHORIZED REPRESENTATIVE
ADDENDUM I
TERMS OF
OUTFITTED GULFSTREAM V SALES AGREEMENT
THIS GULFSTREAM V SALES AGREEMENT is made and entered into
this 13th day of June, 1997,
BETWEEN: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
("BUYER")
AND: GULFSTREAM AEROSPACE CORPORATION, a Georgia
corporation, located at Savannah International
Airport, Savannah, Georgia, and its mailing
address at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇. ▇. Box 2206,
Savannah, Georgia 31402 - 2206 ("GULFSTREAM").
Subject to GULFSTREAM's Conditions of Contract, which are
incorporated herein and made a part hereof by reference,
BUYER hereby agrees to purchase the following described
Outfitted Aircraft from GULFSTREAM pursuant to the following
terms.
Terms defined in this Addendum I will have the same
definition for purposes of the Conditions of Outfitted
Gulfstream V Sales Agreement. If there is any inconsistency
between the Terms of Outfitted Gulfstream V Sales Agreement
and the Conditions of Outfitted Gulfstream V Sales
Agreement, these Terms of the Outfitted Gulfstream V Sales
Agreement shall control.
Section 1 SUBJECT MATTER OF SALE
Aircraft: One Gulfstream V manufactured by
GULFSTREAM in accordance with the Product
Specification, which specification is incorporated
herein and made a part hereof as Appendix A.
Product Specification: Gulfstream Product
Specification for Serial Number 501, dated
February 20, 1997.
Serial Number: Gulfstream V Flight Test Aircraft
Serial Number 501.
Completion Specification: Number 606060. The
Completion Specification number will be changed by
GULFSTREAM, without amendment to this Agreement,
to specifically identify BUYER's individual
specification. Any modification to the Completion
Specification will be treated as a Work Change
Request (WCR) with pricing and Delivery Date
adjusted accordingly.
Completion Facility: Gulfstream Aerospace
Corporation, Long Beach, California.
Scheduled Preliminary Acceptance Date: Fourth
Quarter 1997 or First Quarter 1998. The Scheduled
Preliminary Acceptance Date may be any date
designated by GULFSTREAM during the Fourth Quarter
1997 or First Quarter 1998. GULFSTREAM shall
provide BUYER with at least thirty (30) days prior
written notice of the Scheduled Preliminary
Acceptance Date.
Scheduled Delivery Date: Second Quarter 1998 or
Third Quarter 1998. The Scheduled Delivery Date
may be any date during the Second Quarter 1998 or
Third Quarter 1998. GULFSTREAM shall provide
BUYER with at least thirty (30) days prior written
notice of the Scheduled Delivery Date.
The Scheduled Delivery Date identified herein is
contingent upon BUYER's documented approval of the
following documents by the date identified:
(a) Completion Specification: No later than
sixteen (16) weeks prior to the Scheduled
Preliminary Acceptance Date;
(b) Design Package (includes 1/20 Scale Floor
Plan): No later than sixteen (16) weeks
prior to the Scheduled Preliminary
Acceptance Date;
(c) Material and Color Board: No later than
sixteen (16) weeks prior to the Scheduled
Preliminary Acceptance Date;
(d) External Paint Scheme: No later than
nine (9) weeks prior to the scheduled
induction of the Aircraft into the
Completion facility.
When the Aircraft completes its initial production schedule
it is commonly referred to as the "Green Aircraft." Upon
conclusion of the work defined in the Completion
Specification, the Aircraft is referred to as the "Outfitted
Aircraft." When necessary in the Agreement to differentiate
between the "Green Aircraft" and the "Outfitted Aircraft,"
these terms will be used. Upon definition of the work
requirements specified in the Completion Specification, such
work may be changed by mutual agreement of BUYER and
GULFSTREAM. Such an agreement shall be embodied in a Work
Change Request on a form to be provided by GULFSTREAM. In
the event of a conflict between the above-listed documents,
the more specific shall control the more general one,
provided that in all cases this Agreement shall ultimately
control unless otherwise expressly provided herein.
Section 2 PURCHASE PRICE AND PAYMENT TERMS
Section 2.1 Total Purchase Price: THIRTY-ONE MILLION FIVE
HUNDRED THOUSAND U.S. DOLLARS ($31,500,000.00).
Section 2.2 All cash payments of the Total Purchase Price
shall be paid in United States Dollars by wire
transfer to a bank specified by GULFSTREAM.
Section 2.3 The Total Purchase Price shall be paid in
accordance with the following schedule:
(A) A non-refundable down payment deposit of
ONE MILLION U.S. DOLLARS ($1,000,000.00)
shall be paid on execution of this
Agreement.
(B) A second payment of EIGHTEEN MILLION FIVE
HUNDRED THOUSAND U.S. DOLLARS
($18,500,000.00) shall be due on or before
the Scheduled Preliminary Acceptance Date.
To satisfy this payment obligation, BUYER
is granted the option to trade in
Gulfstream IV Aircraft, Serial Number 1042,
pursuant to Section 8.
(C) At the Delivery Time, the following shall
be due and payable:
(i) The unpaid balance of the Total
Purchase Price in the amount of TWELVE
MILLION U.S. DOLLARS ($12,000,000.00)
shall be due:
(aa) in cash, or
(bb) in accordance with the Promissory
Note attached at Exhibit B, so long as
the Marketing Services Agreement is in
full force and effect at the Delivery
Time.
(ii) Balance of any work change requests
shall be paid in cash.
This payment schedule is non-assignable.
Section 3 COMPUTERIZED MAINTENANCE PROGRAM ("CMP")
Section 3.1 GULFSTREAM shall provide BUYER, at no
additional charge, participation in the
Gulfstream V Computerized Maintenance Program
commencing at the Delivery Time and terminating
twenty-four (24) months after the Operational
Delivery. Thereafter, BUYER may elect to
continue such participation by the payment of
GULFSTREAM's customary charges in effect from
time to time.
Section 4 TRAINING
Section 4.1 GULFSTREAM shall provide at Savannah, Georgia,
to trainees as designated by BUYER, at no
additional charge to BUYER, the following
training for the Aircraft:
(a) an initial ground school course in the
operation and maintenance of the Aircraft
for up to three (3) pilots, including
simulator training, provided by a qualified
training organization designated by
GULFSTREAM; and
(b) an initial ground school course in the
operation and maintenance of the Aircraft
for up to three (3) mechanics, including
three (3) hours simulator training for each
mechanic, provided by a qualified training
organization designated by GULFSTREAM.
Section 4.2 After the Delivery Time, GULFSTREAM shall
provide through a qualified training
organization designated by GULFSTREAM initial
instruction to proficiency in BUYER's aircraft
for three (3) pilots designated by BUYER; such
instruction shall be conducted in Savannah,
Georgia. Such instruction shall be without
charge to BUYER except that BUYER shall
reimburse GULFSTREAM for cost of any fuel, oil
or maintenance furnished for the Aircraft
during the training period.
Section 4.3 GULFSTREAM's obligation to provide the training
described in Sections 4.1 and 4.2 above shall
expire twelve (12) months after the Operational
Delivery. No credit or other financial
adjustment shall be made for any unused
training as specified in this Section 4.
Section 5 IN SERVICE PILOT ASSISTANCE
Section 5.1 GULFSTREAM shall provide the following pilot
assistance with respect to Outfitting check
flights of the Aircraft:
If the Outfitting was performed at the
GULFSTREAM's facilities in Savannah, Georgia or
Long Beach, California, all pilot services
required by BUYER are provided free of any
further charge.
Section 5.2 Immediately following Outfitting, GULFSTREAM
shall provide five (5) days, excluding pilot
positioning travel days, of pilot services for
initial in-service assistance. The reasonable
expenses of GULFSTREAM's provided pilots for
travel, meals, lodging, and related expenses
shall be reimbursed to GULFSTREAM by BUYER.
Section 6 MEDAIRE, INC.
GULFSTREAM shall provide to BUYER, starting
upon delivery of the Outfitted Aircraft, to the
following services of MedAire, Inc., to the
extent then currently available:
1. A five (5) year subscription to MedLink
Worldwide.
2. Management of Inflight Illness and Injury
training for five crew members. (Training
for up to eight (8) crew members when the
session is held at the customer's site.
Travel expenses will be invoiced to the
customer).
3. One (1) MedAire Aircraft First Aid Kit
aboard each Gulfstream V.
4. Five (5) years of MedTrack service for the
Aircraft First Aid Kit. (MedTrack helps
keep kits up to date by monitoring and
replacing expired refill-type items, plus
replenishing used items with new supplies,
after notification of use.)
Section 7 INSURANCE
GULFSTREAM shall continue to insure the
Aircraft while in GULFSTREAM's Completion
Center; provided, however, that BUYER shall
reimburse GULFSTREAM for the reasonable costs
(not to exceed U.S. $40,000.00) of insuring the
Aircraft's hull while the Aircraft is in
GULFSTREAM's Completion Center and through the
Delivery Time.
Section 8 TRADE-IN OPTION
BUYER is granted the option, exercisable no
later than December 1, 1997, to trade in
Gulfstream IV Aircraft, Serial Number 1042 (the
"Trade-In Aircraft"), at the Scheduled
Preliminary Acceptance Date, for a Trade-In
Value of EIGHTEEN MILLION FIVE HUNDRED THOUSAND
U.S. DOLLARS ($18,500,000.00), pursuant to the
terms and conditions of the Aircraft Trade-In
Agreement attached at Exhibit A.
The Trade-In Value shall be applied to offset
any payment or appropriate part of any payment
owed at the Scheduled Preliminary Acceptance
Date.
Prior to the option exercise date, GULFSTREAM
is the exclusive representative for the Trade-
In Aircraft, except as provided in the
Remarketing Agreement, and will market the
Trade-In Aircraft at any price acceptable to
BUYER pursuant to the terms of the attached
Remarketing Agreement at no charge to BUYER
other than reimbursement of GULFSTREAM expenses
as defined in the Remarketing Agreement.
Should the Trade-In Aircraft be resold by
GULFSTREAM prior to the Scheduled Delivery
Date, then BUYER shall be entitled to receive,
in addition to the above Trade-In Value, an
additional amount, if any, by which the resale
price exceeds the Trade-In Value, after
deduction for GULFSTREAM's reasonable and
customary expenses associated with the resale,
which may include:
Advertising and marketing expenses;
A Standard Pre-Owned Aircraft Warranty
reserve;
Paint and training reserves or expenses;
GULFSTREAM internal sales force commission
expenses;
Third party brokerage commissions, if any;
Prepurchase inspection and discrepancy
expenses;
Non-reimbursable aircraft demonstration
expenses;
Aircraft modifications which are included in
the resale price; and
Any other expenses agreed to by the parties.
Section 9 FLIGHT TEST AIRCRAFT
BUYER acknowledges that the Aircraft purchased
pursuant to this Agreement is being used by
GULFSTREAM in its Gulfstream V Certification
Flight Test Program. GULFSTREAM estimates that
the Aircraft will have no more than 1200 flight
hours and 700 cycles on its airframe, and 900
flight hours and 1300 cycles on its engines as
of the Preliminary Acceptance Time. Actual
figures will be provided at the Preliminary
Acceptance Time.
Section 10 LETTER OF CREDIT
BUYER, at the Delivery Time, agrees to provide
GULFSTREAM a Letter of Credit in the initial
amount of TWELVE MILLION U.S. DOLLARS
($12,000,000.00) to secure payments under the
Promissory Note provided under Section
2.3(C)(i)(bb) of this Addendum I, so long as
such Promissory Note remains unpaid. Such
Letter of Credit will be in the form attached
at Exhibit C (Letter of Credit), or other form
satisfactory to GULFSTREAM in its sole
discretion. Prior to each renewal date of the
Letter of Credit (or at quarterly intervals at
the request of BUYER). GULFSTREAM shall review
the amounts then outstanding under the
Promissory Note, including any offsets for
amounts otherwise due BUYER from GULFSTREAM
under this Agreement or the Marketing Services
Agreement between the parties of even date
herewith, and permit the amendment or renewal
of the Letter of Credit to be in the maximum
amount then remaining due under the Promissory
Note. GULFSTREAM shall return the original
Letter of Credit to BUYER upon full payment of
the Promissory Note.
All costs of the Letter of Credit will be borne
by BUYER.
Section 11 GULFSTREAM'S USE OF THE AIRCRAFT
▇▇▇▇▇ agrees to provide GULFSTREAM with use of
the Aircraft subsequent to the Delivery Time
for a total of 200 hours per year for a term of
three (3) years in accordance with the terms
and conditions of the Non-Exclusive Use
Agreement attached at Exhibit D.
Section 12 LEASEBACK OF TRADE-IN AIRCRAFT
GULFSTREAM hereby agrees to lease back to
BUYER, at a nominal charge under an "Aircraft
Lease Agreement" attached at Exhibit E, GIV
Aircraft Serial Number 1042 from the acceptance
date of the Trade-In Aircraft as defined in
Exhibit A, through the Delivery Time of the
Gulfstream V Aircraft.
Section 13 CONFIDENTIALITY
The terms set out in this Agreement and the
information made available as a result of the
negotiations which preceded the consummation of
the transactions contemplated by this Agreement
are strictly confidential and are personal,
trade, or business secrets of the parties. The
parties shall not disclose to any other person
the nature, terms or conditions of this
Agreement or any information concerning the
respective parties unless necessary for either
party to carry out its obligations or enforce
its rights pursuant to this Agreement.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be signed by their duly authorized
representatives on the date first above written.
GULFSTREAM AEROSPACE CORPORATION ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------
(BUYER)
BY: /s/ ▇.▇. ▇▇▇▇▇▇▇▇, ▇▇. BY: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------- ----------------------
TITLE: TITLE:
--------------------- ---------------------
