Outfitted Gulfstream V Sales Agreement - Gulfstream Aerospace Corp. and Riggs Bank NA
Gulfstream(R)
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.
"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.
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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 2.1A, 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 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.
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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's 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 Chase Manhattan 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
which GULFSTREAM will be obligated to collect. At its sole expense, BUYER may
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.
With respect to sales and use tax, BUYER agrees to either provide GULFSTREAM
with a sales and use tax certificate of exemption in the form attached hereto as
Appendix A at the Delivery Time or if no sales and use tax certificate of
exemption is provided to GULFSTREAM to pay GULFSTREAM the appropriate sales and
use taxes or assessments prior to the Delivery Time.
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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,
L. Operating Manual,
M. Quick Reference Handbook.
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.
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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
(1) at the Delivery Time be free from:
(a) defects in material or workmanship,
(b) defects arising from the selection of material or process of
manufacture,
(c) defects inherent in the design thereof in view of the state of the
art at the time of design thereof,
(2) at the Delivery Time and throughout the periods identified in Section
6.2 be free from:
(a) 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
(b) defects arising from the failure to conform to the FAA Type
Certificate, as the Type Certificate existed at the Delivery
Time; and
(3) at the Delivery Time and throughout the periods identified in the BMW
Rolls-Royce GmbH warranty provided under Section 6.7
be free from:
(a) defects in workmanship furnished by GULFSTREAM in the process
of installation of the engines and nacelles, and
(b) 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 6.1A 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 Delivery Time 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 6.1A 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 through seventy-two (72) months from the Aircraft
initial Certificate of Airworthiness.
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C. Notwithstanding the foregoing Section 6.2A and B, the extent of GULFSTREAM's
liability under Section 6.1B 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.
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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 6.1A(31. 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 6.8C
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.
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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.
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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:
(1) the insolvency of BUYER;
(2) 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;
(3) the adjudication of BUYER as a bankrupt or an insolvent;
(4) the appointment of a receiver of BUYER's property; or
(5) 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 9.1A, D, E or F. 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 retain, as liquidated damages and not as a penalty, the nonrefundable
deposit of TWO MILLION U.S. DOLLARS ($2,000,000.00) provided under Section 2 of
Addendum 1, and return the remaining balance of any payments received from BUYER
to BUYER, and GULFSTREAM shall have the right to resell the Aircraft, free and
clear of any and all other obligations to BUYER, or
C. Such other legal remedies as may be available to GULFSTREAM.
Section 9.3This 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 cases 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
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C. immediately, and without prior notice to GULFSTREAM, upon the
occurrence of any of the following events:
1. the insolvency of GULFSTREAM,
2. the institution by or against GULFSTREAM of any involuntary
proceedings not dismissed within sixty (60) days or any
voluntary proceeings under any insolvency or bankruptcy law,
3. the adjudication of GULFSTREAM as a bankrupt or an insolvent,
4. the appointment of a receiver of GULFSTREAM's property, or,
5. an assignment by GULFSTREAM for the benefit of creditors.
Section 9.4 In the event BUYER elects to terminate this Agreement pursuant to
Section 9.3B and C, 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 Chase Manhattan Bank, New York, New York or its successor
from the time of receipt of 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) therefore 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 1 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.
Notwithstanding all Terms and Conditions of this Agreement, this Agreement shall
become effective between the parties upon receipt by GULFSTREAM in the State of
Georgia of this Agreement executed by 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 voluntary assigned in whole or in part by BUYER without
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.
<PAGE>
GULFSTREAM AEROSPACE CORPORATION
--------------------------------
/s/ SHAWN VICK
--------------------------------
SIGNATURE OF GULFSTREAM'S AUTHORIZED REPRESENTATIVE
RIGGS BANK N.A.
---------------
(BUYER)
/s/ JOHN L. DAVIS
-----------------
SIGNATURE OF BUYER'S AUTHORIZED REPRESENTATIVE
<PAGE>
ADDENDUM I
TERMS OF
OUTFITTED GULFSTREAM V SALES AGREEMENT
Firm Fixed Price
THIS GULFSTREAM V SALES AGREEMENT is made and entered into this ____ day of June
1998,
BETWEEN: RIGGS BANK N.A.
808 17TH STREET NORTHWEST
WASHINGTON, DC 20006
("BUYER")
AND: GULFSTREAM AEROSPACE CORPORATION, a Georgia corporation, located
at Savannah International Airport, Savannah, Georgia, and its
mailing address at 500 Gulfstream Road, P. O. 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 V Product Specification
Revision C dated December 19, 1996.
Serial Number: GULFSTREAM shall provide the Serial Number
of the Aircraft to BUYER ninety (90) days prior to the
Scheduled Preliminary Acceptance Date.
Completion Specification: Number 804163A to include the
addition of SATCOM MCS 6000. 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: The completion facility may be any
GULFSTREAM completion facility designated by GULFSTREAM.
GULFSTREAM will provide BUYER with at least ninety (90) days
prior written notice of the location of the GULFSTREAM
Completion Facility.
Scheduled Preliminary Acceptance Date: Fourth Quarter 1998.
The Scheduled Preliminary Acceptance Date may be any date
designated by GULFSTREAM during the Fourth Quarter 1998.
GULFSTREAM shall provide BUYER with at least one hundred
twenty (120) days prior written notice of the Scheduled
Preliminary Acceptance Date.
Scheduled Delivery Date: Third Quarter 1999. The Scheduled
Delivery Date may be any date during the Third Quarter
1999. GULFSTREAM shall provide BUYER with at least ninety
(90) 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:
<PAGE>
A. Completion Specification: 804163A (includes Floor Plan). No
later than execution of this Agreement and attached as Exhibit
A. Any modification to the Completion Specification will be
treated as a Work Change Request (WCR) with pricing and
delivery date adjusted accordingly.
B. Design Package: No later than July 10, 1998.
C. Material and Color Board: No later than July 10, 1998.
D. External Paint Scheme: No later than July 10,1998.
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-NINE
MILLION TWO HUNDRED TWENTY-TWO THOUSAND U.S. DOLLARS
($39,222,000.00).
Section 2.2 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 down payment of EIGHTEEN MILLION THREE HUNDRED
SIXTY-ONE THOUSAND U.S. DOLLARS ($18,361,000.00),
less deposits previously received of TWO MILLION U.S.
DOLLARS ($2,000,000.00) of which TWO MILLION U.S.
DOLLARS ($2,000,000.00) is nonrefundable, shall be
paid on execution of this Agreement.
B. a second payment of EIGHTEEN MILLION THREE HUNDRED
SIXTY-ONE THOUSAND U.S. DOLLARS ($18,361,000.00),
shall be due and payable at the Scheduled Preliminary
Acceptance Date. TEN MILLION U.S. DOLLARS
($10,000,000.00) of this payment will be a refundable
deposit (the "Refundable Deposit"), will remain
fully refundable until BUYER receives proceeds in
accordance with Section 8, or until the date BUYER
executes the Memorandum of Delivery for the Aircraft,
whichever occurs first. At that time, GULFSTREAM will
refund all or a portion of the Refundable Deposit
to BUYER equal to the value or cash received by
GULFSTREAM from BUYER's qualified intermediary or
trustee, and GULFSTREAM will retain such proceeds
as a progress payment on account of the purchase of
the Aircraft. Any balance of the Refundable Deposit
remaining will become nonrefundable at that time and
shall be considered a progress payment on account of
the purchase of the Aircraft. If BUYER fails to
complete the transaction as contemplated by
Section 8, then the Refundable Deposit will be
deemed a payment on account of the Aircraft upon
the execution by BUYER of the Memorandum of
Delivery for the Aircraft. Any portion of the
payment under this section not otherwise denominated
as a Refundable Deposit will be deemed a progress
payment on account of the Aircraft and become a final
payment upon the execution by BUYER of the Memorandum
of Delivery for the Aircraft.
C. at the Delivery Time the following shall be due and payable:
<PAGE>
(1) a final payment of TWO MILLION FIVE HUNDRED
THOUSAND U.S. DOLLARS ($2,500,000.00),
(2) the balance of any Work Change Requests.
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 pilots to assist with respect
to Outfitting check flights of the Aircraft free of any
further charge for all aircraft outfitted at GULFSTREAM's
facilities in Savannah, Georgia, Long Beach, California, or
Brunswick, Georgia.
Section 5.2 Immediately following the Delivery Time, 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, the following services package from
MedAire, Inc., to the extent then currently available.
A. 24 Hour Worldwide MedLink Medical Hotline - five (5)
year subscription. Provides flight crew with direct
and immediate communication access to emergency
physicians in the event of a medical emergency
involving flight crew or passengers while they are in
flight or on the ground at an international
destination. Also manages coordination of ground
based medical care, if needed.
B. Medical and Immunization History Retention - five
(5) year subscription. Histories can be maintained
for flight crew and select passengers.
<PAGE>
C. Worldwide Travel Medicine Advisory Services - five
(5) year subscription. Medical related advisories and
immunization recommendations for any international
destinations.
D. Management of In-Flight Illness and Injury training -
up to five (5) crew members. Basic life support
training for the aircraft environment with
instruction by aero-medical professionals. Available
for up to eight (8) crew members when training is
held at the customer's site. BUYER shall be
responsible for payment directly to MedAire for all
of MedAire's travel expenses for onsite training.
E. MedAire Emergency First Aid Kit - one (1).
Designed for aviation and exceeds FAA requirements.
F. MedTrack - five (5) years. Automatically tracks and
replaces Emergency First Aid Kit supplies prior to
any expiration dates, plus replenishes used items
with new supplies, after notification of use.
Section 7 INSURANCE
GULFSTREAM shall continue to insure the Aircraft hull while
the Aircraft is in GULFSTREAM's Completion Center through the
Delivery Time of the Aircraft.
Section 8 LIKE-KIND EXCHANGE
BUYER hereunder desires to exchange other property of
like-kind and qualifying use within the meaning of Section
1031 of the Internal Revenue code of 1986, as amended, and the
Treasury Regulations promulgated thereunder, for all of
GULFSTREAM's right, title, and interest in the Aircraft. BUYER
expressly reserves the right to assign its rights, but not its
obligations, hereunder to a Qualified Intermediary as provided
in IRC Reg. 1.1031(k)-1(g)(4) on or before the Closing Date.
GULFSTREAM agrees to cooperate with BUYER if requested by
BUYER to structure the transaction in such manner, including,
without limitation, the execution of any documents, including
an amendment to this Sales Agreement, provided GULFSTREAM
incurs no additional cost or expense and is held harmless
against any liability arising because of the intended
like-kind exchange, or any challenge to or failure of this
transaction to qualify for such treatment. The conclusion of
such like-kind exchange shall not be a condition precedent to
the conclusion of this Sales Agreement, the acceptance of the
Aircraft, or payment for the Aircraft.
Section 9 CONFIDENTIALITY
The terms set out in this Agreement are strictly confidential
between GULFSTREAM and BUYER and shall not without the prior
written consent of the other party be disclosed by either
party, in whole or in part, to any third party except to such
party's accountants, lawyers, bankers, investors, and
shareholders insofar as may be 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 RIGGS BANK N.A.
(BUYER)
BY: /s/ SHAWN VICK BY: /S/ JOHN L. DAVIS
-------------------- --------------------------
TITLE: SENIOR VICE PRESIDENT, SALES TITLE: CHIEF FINANCIAL OFFICER
----------------------------------- ------------------------------
<PAGE>
Gulfstream(R)
AMENDMENT
The following will constitute an amendment (the "Amendment") to that certain
Outfitted Gulfstream V Sales Agreement dated June 23, 1998, by and between
GULFSTREAM AEROSPACE CORPORATION ("GULFSTREAM") and RIGGS BANK N.A. ("BUYER")
(the "Agreement") for the sale of one Gulfstream V aircraft (the "Aircraft").
WHEREAS, BUYER has approved the Completion Package in accordance with the
timeframe identified in the Agreement; and
WHEREAS, this Agreement is hereby amended by both GULFSTREAM and BUYER to
reflect revisions to Addendum I Terms of the Agreement as follows:
Section 1 - SUBJECT MATTER OF SALE
1. Delete the reference to Serial Number, in its entirety and replace with the
following:
The Serial Number of the Aircraft shall be 556.
2. Delete the reference to Completion Specification, in its entirety and replace
with the following:
Completion Specification: Number 804163B specifically
identifies BUYER's individual specification and reflects the
approved Completion Package. Any future modifications to the
Completion Package will be treated as a Work Change Request
(WCR) per the terms of the Agreement.
3. Delete the reference to Completion Facility, in its entirety and replace with
the following:
The Completion Facility shall be Gulfstream Aerospace
Corporation, Long Beach, California. The Delivery of this
Aircraft will be at a mutually agreed upon location.
Section 2 - PURCHASE PRICE AND PAYMENT TERMS:
This Section shall be revised to reflect a pricing adjustment in the amount of
FORTY EIGHT THOUSAND TWO HUNDRED THIRTEEN U.S. DOLLARS ($48,213.00) based upon
the approved Completion Package.
<PAGE>
1. Delete Section 2.1 in its entirety and replace with the following:
Section 2.1 Total Purchase Price: THIRTY NINE MILLION TWO
HUNDREDSEVENTY THOUSAND TWO HUNDRED THIRTEEN U.S.
DOLLARS ($39,270,213.00).
2. Delete Section 2.3C in its entirety and replace with the following:
C. at the Delivery Time, the following shall be due and payable:
(1) a payment of TWO MILLION FIVE HUNDRED FORTY EIGHT THOUSAND TWO HUNDRED
THIRTEEN U.S. DOLLARS ($2,548,213.00).
(2) the balance of any Work Change Requests.
All other Terms and Conditions of the Agreement shall remain the same.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized representatives.
GULFSTREAM AEROSPACE CORPORATION RIGGS BANK N.A.
-------------------------------- ---------------
(GULFSTREAM) (BUYER)
BY: /s/ ROBB K. SALLEE BY: /s/ JOHN L. DAVIS
----------------------- -----------------------
ITS: Vice President, Contract Management ITS: EVP and CFO
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DATE: 9/10/99 DATE: 9/9/99
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