Aircraft Purchase Agreement: Definition & Sample

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What is an Aircraft Purchase Agreement?

An aircraft purchase agreement is one of a suite of legal documents required for the purchase of an aircraft. The aircraft purchase agreement lays out the terms and conditions between parties to transfer ownership of an aircraft from the seller to the buyer.

It is important to make sure that an aircraft purchase agreement is airtight as the purchase of an aircraft is governed by a whole host of complex regulations and laws. This agreement often contains inspection details, closing costs and date, and what the rights and responsibilities of both parties would be in the event of a termination of the agreement.

Common Sections in Aircraft Purchase Agreements

Below is a list of common sections included in Aircraft Purchase Agreements. These sections are linked to the below sample agreement for you to explore.

Aircraft Purchase Agreement Sample

AIRCRAFT PURCHASE AGREEMENT

This Aircraft Purchase Agreement (the “ Agreement ”) is made and entered into effective as of February 2, 2005 by and between Krispy Kreme Doughnut Corporation, a North Carolina corporation (“ Seller ”) and PPD Aeronautics, LLC, a North Carolina limited liability company (“ Buyer ”), and is made and entered into with reference to the following facts and objectives:

A. Seller is the beneficial owner of the following described aircraft, engines and auxiliary power unit:

B. Buyer has offered to purchase the above-referenced Aircraft (as such term is defined below) from Seller for a purchase price of Thirty Million Four Hundred Eighty Five Thousand Dollars (US$30,485,000.00) subject to certain terms and conditions.

C. Buyer and Seller now desire to enter into this Agreement for the purpose of setting forth all of the terms and conditions pursuant to which Buyer shall buy and accept and Seller shall sell and deliver the Aircraft.

NOW, THEREFORE, in consideration of the mutual covenants, conditions and agreements contained herein, the parties hereto agree as follows:

SECTION 1. PURCHASE AND SALE OF AIRCRAFT

1.1 Purchase and Sale . Subject to the terms and conditions set forth herein, Seller hereby agrees to sell and deliver, and Buyer hereby agrees to buy and accept, the Airframe, Auxiliary Power Unit and Engines in accordance with the specifications attached hereto as Exhibit A (the “ Specifications ”), together with all avionics, equipment, components, appliances, accessories, instruments and other items installed in or attached to the Airframe, Auxiliary Power Unit and/or Engines (collectively the “ Aircraft Components ”), together with all loose equipment, engine covers, tool kits and any other associated accessories, and all and all Aircraft records required to be maintained or in Seller’s possession (including without limitation all manuals, the maintenance logs, log

books for the Airframe, Engines, Auxiliary Power Unit and Aircraft Components, parts catalogs, interior and wiring diagrams, electrical prints and supporting technical publications, and any maintenance and other historical records) (collectively, the “ Aircraft ”).

1.2 Assignment of Warranties and Service Contracts.

1.2.1 Transfer of Warranties . To the extent that any warranties from manufacturers, prior owners of the Aircraft, service providers or suppliers with respect to the Aircraft are still in effect and are assignable, all rights under such warranties are hereby assigned and transferred to Buyer effective as of the Closing Date. Seller shall reasonably assist Buyer, at Buyer’s expense, in maintaining continuity of and transferring any such warranties by executing whatever documents or agreements may be necessary to vest all rights under such warranties in Buyer. Buyer shall be responsible for and shall pay any fees associated with the transfer of such warranties.

1.2.2 Service Contracts . Effective as of the Closing Date, Seller shall cause to be transferred and assigned to Buyer (to the extent transferable and assignable), any of its rights with respect to any repair or maintenance agreements or programs relating to the Aircraft that are in effect, including without limitation, any subscription maintained by Seller to any computerized maintenance program and any maintenance service program for the Engines or other similar agreements, including, without limitation, the contract described on Schedule 1 (collectively, the “ Service Contracts ”). Seller shall be responsible for and shall have paid any and all sums owing to providers of Service Contracts with respect to all periods prior to the Closing Date. Seller shall reasonably assist Buyer, at Buyer’s expense, in maintaining continuity of and transferring any such Service Contracts by executing whatever documents or agreements may be necessary to vest all rights under such Service Contracts in Buyer. Buyer shall be responsible for and shall pay any fees associated with the transfer of such Service Contracts. Buyer, at its election, may terminate any Service Contracts.

1.3 Purchase Price; Payment Terms . The purchase price for the Aircraft (the “ Purchase Price ”) is Thirty Million Four Hundred Eighty Five Thousand Dollars (US$30,485,000.00). Buyer shall pay the Purchase Price to Seller in accordance with the following schedule:

1.3.1 Deposit . Buyer has previously deposited or contemporaneously with the execution by Seller of this Agreement will deposit the sum of Five Hundred Thousand Dollars (US$500,000.00) (the “ Deposit ”) with Insured Aircraft Title Services, 4848 SW 36 th Street, Oklahoma City, OK 73179 (“ Escrow Agent ”) as and for a deposit against the Purchase Price.

1.3.2 Deposit of Purchase Price . Except as provided below, the balance of the Purchase Price shall be deposited with Escrow Agent on or prior to one (1) business day prior to the Closing Date. On or prior to the Closing Date, Buyer shall submit written instructions to Escrow Agent instructing Escrow Agent to disburse the Purchase Price to the Seller, upon satisfaction by Seller or waiver by Buyer, of each of the conditions, covenants and agreements to be performed by Seller herein.

1.4 Condition of the Aircraft at Delivery . Seller shall deliver the Aircraft to Buyer on the Closing Date in the following condition: (i) with complete and original log

books and all records required to be maintained or in Seller’s possession (which shall be in English, properly maintained, consecutive and continuous from the date of manufacture through and including the Closing Date) (ii) up to date and current on all airworthiness directives and mandatory service bulletins, and mandatory inspections; (iii) airworthy and fully operative to or exceeding manufacturer’s specifications and tolerances; (iv) up to date and current on all calendar and hourly inspections; (v) all payments and other obligations due to providers of Service Contracts under such contracts, if any, with respect to periods prior to the Closing Date shall have been paid or performed, (vi) the Aircraft will be in the same condition as at the completion of the Pre-Purchase Inspection, ordinary wear and tear excepted, taking into account any additional hours, cycles and/or time incurred in connection with the performance of this Agreement and (vii) the Aircraft will have no Damage (as such term is defined in Section 2.4 hereof) .

1.5 DISCLAIMER AND LIMITATION OF LIABILITY . BUYER ACKNOWLEDGES THAT THE AIRCRAFT IS BEING SOLD AND DELIVERED TO BUYER IN “AS IS, WHERE IS, AND WITH ALL FAULTS” CONDITION. EXCEPT AS SET FORTH HEREIN OR IN ANY BILL OF SALE PROVIDED TO BUYER IN CONNECTION WITH THE SALE OF THE AIRCRAFT, SELLER DOES NOT MAKE, GIVE, OR EXTEND, AND BUYER HEREBY DISCLAIMS AND RENOUNCES, ANY AND ALL WARRANTIES OR REPRESENTATIONS OF ANY KIND OR NATURE WHATSOEVER, EXPRESS OR IMPLIED, WHETHER ARISING IN LAW, IN EQUITY, IN CONTRACT, OR IN TORT, AND INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY, AIRWORTHINESS, DESIGN, CONDITION, OR FITNESS FOR A PARTICULAR USE. IN NO EVENT MAY SELLER BE HELD LIABLE TO BUYER FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL OR PUNITIVE DAMAGES OF ANY KIND.

SECTION 2. PRE-PURCHASE INSPECTION .

2.1. Pre-Purchase Inspection . Buyer’s has caused Garrett Aviation in Augusta, Georgia (the “ Inspection Facility ”) to perform a pre-purchase inspection of the Aircraft (the “ Pre-Purchase Inspection ”) including the delivery to Buyer of the Pre-Purchase Inspection report (the “ Inspection Report ”). Seller has received a copy of the Inspection Report.

2.2 [Intentionally Left Blank.]

2.3 [Intentionally Left Blank.]

2.4 No Prior Damage History . It shall be a condition precedent to Buyer’s obligation to pay the Purchase Price and accept delivery of the Aircraft that the Aircraft shall not have any prior Damage nor shall the Aircraft experience any Damage on or prior to the Closing Date. Pursuant to Section 8.1.2 hereof, Buyer shall have the right to terminate this Agreement, in the event the Aircraft has any prior Damage or incurs any Damage in any respect prior to the Closing Date. For purposes of this Agreement, the term “ Damage ” means any damage the repair of which would constitute a “major repair” as such term is defined in 14 C.F.R. Part 43, Appendix A, Paragraph (b), excluding damage caused by Buyer or its agents.

2.5 Acceptance of the Aircraft . Contemporaneously with the execution of this Agreement, Buyer shall deliver a notice to Seller (the “ Acceptance Notice ”) substantially in the form of Exhibit B conditioned only on (i) the Aircraft conforming to the conditions

set forth in Section 1.4 of this Agreement and (ii) satisfaction of the closing conditions set forth in Section 5 of this Agreement. Should Buyer fail to accept the Aircraft for any reason other than the failure of the Aircraft to conform to the conditions set forth in Section 1.4 hereof, Buyer shall compensate Seller for expenses incurred in connection with the return flight to the Aircraft’s operating base at Smith-Reynolds Airport, Winston-Salem, NC at a flat rate of $2000.00 per flight hour.

The Deposit shall, subject to performance of Seller’s obligations hereunder, be deemed non-refundable upon delivery by Buyer of an Acceptance Notice and the delivery by Seller to Buyer of a countersigned counterpart thereof. The Deposit shall, at Buyer’s option, be immediately released from escrow and returned to Buyer (i) in the event that Seller fails to deliver title to the Aircraft after satisfaction of the conditions precedent to closing set forth in Section 5.3, (ii) upon termination of this Agreement pursuant to Sections 8.1.1 or 8.1.2 or (iii) as a result of Seller’s non-performance pursuant to Section 8.1.4.

SECTION 3. DELIVERY AND TRANSFER OF TITLE .

3.1 Location of Closing . On the Closing Date, Seller shall at its expense, tender the Aircraft to Buyer, in the condition required by this Agreement in Wilmington, North Carolina, or such other location as is mutually acceptable to the parties. If the closing is to occur at any site other Wilmington, North Carolina, Buyer shall compensate Seller for expenses incurred in connection with the flight to the site where the closing is to occur at a flat rate of $2000.00 per flight hour.

3.2 Final Inspections by Buyer . Buyer shall, at the time of transfer of title to the Aircraft, make a reasonable inspection of the Aircraft and its documentation, which inspection shall, at Buyer’s option, include an acceptance flight to determine that the Aircraft has not suffered any Damage and conforms to the conditions required by this Agreement. If in the course of conducting the final inspection, Buyer determines that the Aircraft has suffered any Damage or does not conform to the conditions required by this Agreement, Seller shall correct or caused to be corrected such conditions, at its cost and expense, to the satisfaction of the Buyer on or prior to the transfer of title contemplated hereunder. The acceptance flight will be conducted during the flight to Wilmington, North Carolina where the closing is to occur.

3.3 U.S. Registration. It shall be a condition precedent to Buyer’s obligation to pay the Purchase Price and accept delivery of the Aircraft that prior to Closing Date the Aircraft will have US registration, and be a US-owned and FAA registered aircraft and the FAA shall have issued a Standard Airworthiness Certificate for the Aircraft and such Standard Airworthiness Certificate shall be without any restrictions or limitations of any kind or nature and be current and valid on the Closing Date.

3.4 Aircraft Bills of Sale . Prior to the Closing Date, Seller shall submit to Daugherty, Fowler, Peregrin & Haught, 204 North Robinson, Suite 900, Oklahoma City, OK 73102-6800 (“ FAA Counsel ”) all such documentation as may be required by the Federal Aviation Administration (the “ FAA ”) to transfer good and marketable title to the Aircraft in the name of the Buyer, or any permitted transferee of the Buyer, including without limitation, (i) a properly executed FAA approved form of Aircraft Bill of Sale (AC Form 8050-2) transferring title and ownership of the Aircraft to the Buyer, free and clear of all liens or encumbrances of any kind whatsoever, (ii) a Warranty Bill of Sale in the form of that attached hereto as Exhibit C and (iii) releases, in form and substance satisfactory to Buyer and its counsel, of any liens, encumbrances or security interests in

favor of any third party on the Aircraft and/or interests in favor of any third party in the Airframe and/or Engines (collectively, the “ Liens ”) (jointly, the “ Title Documents ”).

3.5 Delivery and Acceptance Certificate . Buyer shall signify its acceptance of the Aircraft and the condition thereof by deposit of the Purchase Price for the Aircraft and by executing a delivery and acceptance certificate acknowledging delivery and acceptance of the Aircraft (the “ Delivery and Acceptance Certificate ”). The Delivery and Acceptance Certificate shall be substantially in the form as set forth in Exhibit D that is attached hereto and made a part hereof.

3.6 Risk of Loss . Risk of loss, damage or destruction to the Aircraft shall pass from Seller to Buyer upon Buyer’s execution and delivery of the Delivery and Acceptance Certificate.