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Aircraft Parts Purchase Agreement

This is an actual contract by International Airline Support Group.
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THIS AIRCRAFT PARTS PURCHASE AGREEMENT, is entered into as of this 16th day of May, 1996 between PAXFORD INT'L, INC., (the "Seller"), and International Airline Support Group, Inc. (the "Buyer");


RECITALS:


Seller has purchased an inventory of aircraft parts, identified on the 18 page Parts Inventory and related Records (the "Parts"), attached to this Agreement as Exhibit "A," less Excluded Parts AND RELATED RECORDS identified on the attached Exhibit "B," from Pt. Garuda Indonesia a/k/a/ Garuda Airlines (the "Airline").


Buyer desires to purchase from Seller and Seller desires to sell to Buyer certain of such Parts upon the terms and conditions hereinafter set forth.


NOW, THEREFORE, in consideration of the premises and of the mutual promises and agreements contained herein, the parties hereto, intending to be legally bound, hereby agree as follows.


Section 1. Purchase of Aircraft Parts.


1.1 PURCHASED PARTS. Subject to the terms and conditions of this Agreement, Seller shall sell, assign, transfer and deliver to Buyer, and Buyer shall purchase from Seller, all of Seller's right, title and interest in and to the Parts less the Excluded Parts and related records, together with all overhaul and maintenance records related thereto that are available from the Airline (the "Records").


1.2 DISCLAIMER OF WARRANTIES. THE PARTS AND THE RECORDS ARE BEING SOLD TO BUYER "AS IS" AND "WITH ALL FAULTS," AND THE BUYER ACKNOWLEDGES THAT NO WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE ARE TO BE IMPLIED IN THIS TRANSACTION.


1.3 BILL OF SALE. Seller will deliver to Buyer a bill of sale, substantially in the form of Exhibit "C" to this Agreement, with respect to the Parts upon payment of all sums due hereunder. Subject to Section 2.5, until such time as all payments due hereunder have been made, in full, Seller shall retain title to the Parts. Seller shall from time to time, at Buyer's request and expense, execute and deliver to Buyer such additional instruments of transfer, conveyance and assignment as Buyer may request to evidence more effectively the transfer, conveyance and assignment of the Parts and the Records to Buyer.


Section 2. Purchase Price.


2.1 PURCHASE PRICE. Buyer hereby agrees to pay or deliver to Seller the following as full and final payment of the purchase price (the "Purchase Price") for the Parts (other than the Excluded Parts):


(a) The sum of One Million United States Dollars ($1,000,000)
which is now on deposit in escrow with King & Spalding in
Atlanta, GA ("Escrow Agent").


(b) The additional sum of Three Hundred Thousand Dollars
($300,000) upon execution of this Agreement.


(c) The additional sum of Three Hundred Fifty Thousand Dollars
($350,000) immediately upon U.S. Customs clearance.


(d) The additional sum of Three Hundred Fifty Thousand Dollars
($350,000) thirty (30) days after U.S. Customs clearance.


(e) Title, naming the Buyer as the Seller and the Seller as the
Buyer in the form of a commercial bill of sale, to a ship
set of DC9 Stage II nose cowls and thrust reversers
currently in the possession of Seller. Such bill of sale to
be delivered to the Seller upon execution of this Agreement
at which time title will pass to Seller.


(f) Title, naming the Buyer as the Seller and the Seller as the
Buyer in the form of a commercial bill of sale, to a second
ship set of serviceable DC9 Stage II nose cowls and thrust
reversers currently in the possession of Buyer. Title and
possession to the second ship set to pass on closing. Buyer
will release the ship set to Seller at its Miami warehouse
on Sellers demand. Such nose cowls and thrust reversers
will be delivered FOB the Buyers Miami facility at such time
as Seller shall specify.


(g) All of the above referred to collectively as the "Purchase
Price."


(h) All payments due hereunder to Seller shall be in U.S.
dollars, made by wire transfer of immediately available
funds and shall be made to the following account:


Bank Marine Midland Bank
Scarsdale Branch
24 Chase Road, Scarsdale, NY
ABA Number 021001088


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Account Name Paxford Int'l Inc.
Account Number 537467688


2.2 ESCROW.


(a) Buyer has deposited with the Escrow Agent the sum of One
Million Dollars ($1,000,000.00) USD and has instructed the
Escrow Agent to disburse such funds to Seller upon receipt
of notice of Buyer's acceptance of the Parts as evidenced by
the Certificate of Inspection and Acceptance of the Parts
substantially in the form of Exhibit "D."


(b) Seller will preposition a commercial bill of sale for the
Parts with its attorney Myron H. Budnick in Miami, FL to be
released to the Buyer upon receipt by Seller of all the
escrowed items set out above and payment in full of the
purchase price.


2.3 CLOSING DATE. The Closing, unless the parties agree to extend the time for closing, shall occur not later than close of business EDT on May 16, 1996 (the "Closing Date"), following the execution of this Agreement and by the Buyer executing the Certificate of Inspection and Acceptance of the Parts, which Certificate of Inspection and Acceptance shall be substantially in the form attached as Exhibit "D" to this Agreement.


2.4 RELATED TRANSACTIONS.


(a) Provided that the Buyer shall have made all of the payments
due to the Seller pursuant to this Agreement and there is no
uncured default in payment of amounts due Seller pursuant to
this Agreement, Buyer shall have the right to purchase, for
cash, from Seller two (2) ship sets of DC9 Stage II Nose
Cowls and Thrust Reversers for a period of ninety (90) days
from the date of U.S. Customs Clearance of this Agreement
for the sum of US $300,000 per ship set.


(b) Buyer shall arrange for the shipment of all of the Parts and
the Excluded Parts to Miami, at Buyers sole cost, in the
name of the Seller.


(c) Seller shall use reasonable efforts to assist Buyer to
obtain any overhaul and/or maintenance records in the
possession of the Airline, but not delivered to Buyer on the
Closing Date. Buyer will shall reimburse Seller for all
reasonable out of pocket expenses incurred in so assisting
the Buyer.


2.5 SALE OF PARTS. Notwithstanding anything to the contrary set forth in this Agreement, Buyer shall have the right to sell the Parts (together with related records), in the ordinary course of business, to unrelated third parties. Further, Seller agrees that title to any Parts


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(together with related records) sold by Buyer in accordance with the preceding sentence shall pass upon such sale to the purchaser of the Parts (together with related records) without further action by Seller or Buyer. So long as there is no uncured default in the payments of amounts due Seller pursuant to this Agreement, buyer shall be entitled to retain the proceeds of all sales of the Parts. Following the occurrence of a default in payments due to Seller pursuant to this Agreement that remains uncured for the applicable grace period, all cash received by the Buyer from the sale of Parts shall be promptly remitted by the Buyer to the Seller and all such cash and other proceeds of the sales of Parts shall be held by the Buyer in trust for the benefit of the Seller until the same is remitted to the Seller.


Section 3. Delivery and Inspection.


3.1 INSPECTION. Seller has made the Parts and Records available to the Buyer for Inspection at the Airline Facility in Jakarta, Indonesia. Buyer shall have completed inspection and execute the Certificate of Inspection and Acceptance concurrent with the execution of this Agreement.


3.2 DELIVERY. Seller will provide to Buyer the necessary Indonesian Tax and Customs clearance. Seller will deliver the Parts including the Excluded Parts to a shipper selected by the Buyer at the Airline facilities in Jakarta, Indonesia after receipt by Seller of the escrowed funds, additional payments due on execution and the bills of sale due to Seller hereunder.


3.3 TITLE, RISK OF LOSS. Title to the Parts (other than the Excluded parts) and Records shall pass to Buyer upon full payment of all sums due hereunder. However, Buyer shall bear all risk of loss or damage to the Parts and Records during shipment from the Airline's facility in Jakarta, Indonesia to Miami, Florida from and after Delivery to Buyer shipping agent.


3.4 EXCLUDED PARTS. Buyer shall at its expense pack and ship the Excluded Parts to Miami, Florida as part of the consideration for the purchase of the Parts. Title AND RIS
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