EXHIBIT 10.69
AIRCRAFT SALES AGREEMENT
THIS AIRCRAFT SALES AGREEMENT (the "AGREEMENT") is made and entered into as of
this 1st day of October, 2004, by and between Nelnet Corporate Services, Inc.,
121 South 13th Street, Suite 201, Lincoln, Nebraska 68508, and Union Financial
Services, Inc. (herein collectively referred to as "Purchaser"), and Mobek
Investments, LLC, 2501 Expedition Court, Sioux City, Iowa 51111, (herein
referred to as "Seller"), with respect to the following Aircraft and Engines
(collectively, the "Aircraft") as represented per Exhibit A. attached hereto.
MANUFACTURER Cessna Aircraft Company
MODEL Citation VI
SERIAL NUMBER. 650-0232
REGISTRATION NUMBER N711LV
ENGINES SERIAL NUMBERS P-108115 / P-108128
NOW, THEREFORE, in consideration of the mutual covenants hereafter contained,
the parties hereto agree as follows:
1. Seller hereby agrees to sell, assign, transfer and deliver to Purchaser
and Purchaser hereby agrees to purchase from the Seller, under and
pursuant to the terms and conditions hereafter set forth, the above
referenced Aircraft.
2. The Purchase Price is agreed upon by the parties to be Four Million
Eight Hundred Thousand US Dollars ($4,800,000.00USD).
3. The Purchaser has remitted a refundable deposit in the amount of
$100,000.00 USD, (One Hundred Thousand U. S. Dollars), to Insured
Aircraft Title Service (herein after referred to as "IATS") at 4848
Southwest 36th Street, Oklahoma City, OK, 73179, Attn: Mr. Kirk Woford,
(800)654-4882, as Escrow Agent.
4. This Agreement is subject to a Test Flight and Prepurchase Inspection,
to be performed at Duncan Aviation, Lincoln, NE, to start on or about
September 21, 2004. Seller at its expense will deliver the Aircraft to
Duncan Aviation, Lincoln, NE. The Prepurchase Inspection shall be at
Purchaser's sole expense, and shall be comprised of an industry standard
Pre-purchase Inspection, including but not limited to engine boroscope,
windshield thickness check, under potty area check for corrosion, fuel
leak check, pressurization check, etc. All such inspections are hereby
approved by the Seller. Acceptance or rejection of the Aircraft shall be
at the sole discretion of the Purchaser. Purchaser shall advise both
Seller and Escrow Agent of the results of the Prepurchase Inspection
within 24 hours after its completion. The Prepurchase Inspection
facility shall provide Purchaser with a list of discrepancies noted. The
Purchaser and its representative reserve the right to perform a Post
Prepurchase Inspection Test Flight (PPITF) if the Prepurchase Inspection
Facility determines that a discrepancy or multiple discrepancies noted
during the Prepurchase Inspection warrant that a PPITF be performed. If
the PPITF is performed, it is not to exceed two hours in duration, and
the cost of the fuel and MSP expenses are to be paid by the Purchaser.
Aircraft shall remain in the care and custody and be flown by the
Seller's pilot (as PIC) during the PPITF. Purchaser and Seller shall
execute Exhibit B, Notification of Results of Aircraft Prepurchase
Inspection, on the later of (i) within 24 hours following the completion
of the Prepurchase Inspection and (ii) October 1, 2004.
(a) Rejection. Upon receipt of notification from Purchaser that
the Prepurchase Inspection has been completed and that the Aircraft has
been rejected, Seller shall cause the Escrow Agent to immediately
refund, in full, the deposit to Purchaser (minus fuel and MSP expense
incurred by Seller to return the aircraft to its base airport in Sioux
City, IA), and this Agreement will be terminated.
(b) Acceptance. Upon receipt by the Escrow Agent of notification
from Purchaser that the Prepurchase Inspection has been completed and
that the Aircraft has been accepted, subject to Seller at its expense
repairing the discrepancies noted, Purchaser and Seller shall execute
Exhibit B, Aircraft Acceptance/Rejection Form, the deposit will become
non refundable, except as provided herein, and should Purchaser
thereafter fail to complete the purchase, unless such failure is the
result of Seller's failure to perform or the breach of Seller's
obligations or warranties, the Seller shall be entitled to receive the
escrow deposit as its sole and exclusive remedy as liquidated damages in
satisfaction of any and all claims and in lieu of any other damages or
remedies. The aggregate cost of correcting the discrepancies set forth
in Exhibit B shall reduce the Purchase Price by the amount of such cost.
5. The Purchaser and its representative shall be permitted to perform a
Post Prepurchase Inspection Test Flight, if required, as per Paragraph 4
above, not to exceed two hours in duration, upon the conclusion of the
Prepurchase Inspection and the repair of noted discrepancies, to
determine that the Aircraft conforms to the delivery requirements per
Paragraph 6 below. Seller shall correct, at Seller's sole expense, any
airworthiness discrepancies which may be noted during the PPITF prior to
closing and delivery to Purchaser. The cost of the fuel and MSP expenses
are to be paid by the Purchaser. Aircraft shall remain in the care and
custody and be flown by the Seller's pilot (as PIC) during the PPITF.
SIC must meet open pilot warranty of Sellers Insurance Co.
6. The Aircraft will be delivered free and clear of all security interests,
liens or encumbrances of any nature whatsoever to Purchaser in Lincoln,
Nebraska, with a US FAA Certificate of Airworthiness, in an airworthy
condition, with: all systems operating normally and meeting
manufacturers specifications; no damage history or corrosion history
which requires or has required a repair that has entailed the completion
of an FAA Form 337; 8110-3, or Cessna Engineering Repair Order through
delivery, all Airworthiness Directives and Mandatory Service Bulletins
complied with, complete, continuous, up-to-date set of original aircraft
and engine logbooks; loose equipment; a paid in full and transferable
MSP engine program; and fully in compliance with current maintenance and
inspection requirements per the US Federal Aviation Administration (FAA)
and the Manufacturers approved maintenance program with all required
time and calendar actions completed through closing without deferment or
extension, or increased frequency of any inspections, whether cycles,
calendar, or hours; and recommendations thereof.
7. The Closing and Delivery shall be set to occur no later than 2 business
days after the Aircraft has been returned to service as per this
agreement, and the Purchaser has conducted the PPITF, if required, as
per Paragraph 4 above. Prior to Closing, Seller will forward to IATS all
document(s) necessary or required to convey a clear, free and marketable
title to the "Aircraft", to include but not be limited to a Bill of
Sale, FAA Form 8050-2, Warranty Bill of Sale (as per Exhibit C), and
applicable Lien Release(s), the Purchaser will make, through escrow, a
final payment in full for the Aircraft in the amount of $4,700,000.00
US. Dollars. Delivery shall take place as evidenced by executing
Appendix 1, Aircraft Delivery Receipt, and being sent via facsimile to
IATS, IATS will then proceed to simultaneously file the Bill of Sale and
Lien release with the FAA Registry on behalf of Purchaser, and wire
transfer the Purchase Price to Seller, per their written instructions,
and send Purchaser via overnight mail the Warranty Bill of Sale.
8. With Seller's full and complete compliance with the terms and conditions
contained herein and with written notification that the Aircraft is
ready for delivery, should the Purchaser fail to close for any reason
other than provided for herein, then, Seller may retain the deposit of
$100,000.00, as its sole and exclusive remedy as liquidated damages in
satisfaction of any and all claims and in lieu of any other damages or
remedies. If Seller fails to provide the Aircraft pursuant to the terms
and conditions herein and not close for any reason, Seller shall
immediately refund the deposit to Purchaser, and reimburse Purchaser the
cost of the Prepurchase Inspection.
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9. Seller shall not disclose the price or terms of this AGREEMENT to third
parties except as required to complete the purchase, or as may be
required by law.
10. Risk of loss, damage, or destruction of the Aircraft shall pass from
Seller to Purchaser upon Delivery and Closing of the sale of the
Aircraft.
11. Seller represents and warrants that it is the sole owner of the
Aircraft, that it has good and merchantable title to the Aircraft, and
that the Aircraft upon delivery will be free and clear of all security
interests, liens, claims, and encumbrances whatsoever. Seller further
represents and warrants that it has no knowledge of any defect or
deficiency with respect to the Aircraft and that all records maintained
with respect thereto are true, accurate and complete.
12. EXCEPT FOR THE WARRANTY OF TITLE EXPRESSLY SET FORTH HEREIN, "SELLER"
MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE REGARDING
THE "AIRCRAFT" OR RECORDS, WHICH ARE DELIVERED HEREUNDER IN AN "AS IS,
WHERE IS" CONDITION. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
"SELLER" DISCLAIMS ALL OTHER WARRANTIES, GUARANTEES OR LIABILITIES,
WHETHER EXPRESS OR IMPLIED OR STATUTORY, SUCH AS THE CONDITION OF THE
"AIRCRAFT" OR RECORDS AIRWORTHINESS, DESIGN, QUALITY OF WORKMANSHIP OR
MATERIALS, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
13. Seller shall not be liable for any failure to perform under this
agreement due to force majeure which shall include accidents, acts of
God, fire, explosion, riot, looting, civil commotion, failure of
machinery or plant, shortages of materials, restrictions by government
or any competent authority or any other similar circumstances of
whatsoever kind and howsoever caused beyond control of Seller. If, due
to force majeure, Seller is unable to deliver the Aircraft as provided
herein, IATS shall return the deposit, in which event this agreement
shall terminate and be of no further force and effect.
14. Seller and Purchaser each represent and warrant to the other that they
have taken no action which would obligate the other party to a valid
claim for a broker's fee in connection with this transaction and each
party agrees to indemnify and forever hold the other harmless from and
against any claims for brokers' compensations, fees, or commissions
arising out of the indemnifying party's actions. Seller has engaged
Jeteffect, Inc. as its broker in this transaction and Seller is solely
responsible for fees and commissions charged by such broker. Purchaser
has engaged Duncan Aviation, Inc. as its broker in this transaction and
Purchaser is solely responsible for fees and commissions charged by such
broker.
15. To the extent that any manufacturer's warranties, express or implied,
are still in effect with respect to the Aircraft (other than warranties
which by their terms are unassignable or which would be extinguished by
their assignment), Seller hereby assigns such warranties to the
Purchaser at the time of delivery.
16. Purchaser shall pay, and shall indemnify and hold the Seller harmless
from all sales, use, property, ad valorem, value added, or other similar
taxes, fees, or other charges of any nature (excluding taxes on net or
gross income or gain realized by the Seller) together with any
penalties, fines, or interest thereon which may be assessed or levied by
the U.S. Government or other U.S. taxing authority as a result of the
Purchaser's acquiring the Aircraft. Seller shall be responsible for any
taxes, fees, or charges assessed against the aircraft prior to delivery
and shall indemnify and hold Purchaser harmless from these taxes.
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17. Seller agrees to sign and deliver to Purchaser at Closing a Nebraska
Resale or Exempt Certificate Form 13 to be filed with the Nebraska State
Department of Revenue and any other document reasonably requested by
Purchaser in order to exempt this transaction from Nebraska sales tax.
This provision shall not affect Purchaser's responsibilities under
Section 16 hereof. 18. Seller and Purchaser shall split 50/50 all escrow
fees associated with this transaction.
19. This AGREEMENT sets forth the entire contract between the parties and
supersedes all previous communications, representations, or agreements,
whether oral or written, between the parties with respect to the sale
and purchase of the Aircraft.
20. This AGREEMENT may be amended only by a written instrument executed by
both parties.
21. Seller and Purchaser each warrant to the other that the execution,
delivery, and performance of this AGREEMENT has been authorized and
approved by all required corporate action, and the parties executing
this document warrant their authority to so bind the respective parties.
22. This AGREEMENT may be executed in two or more counterparts, each of
which shall be deemed an original and shall be effective when executed
by both parties.
23. This contract shall be deemed to have been made, executed under and
governed by the law of the State of Nebraska, USA.
24. Seller and/or Purchaser may structure the transaction herein
contemplated as the receipt of replacement property pursuant to a
like-kind exchange under the provisions of Section 1031 of the Internal
Revenue Code of 1986, as amended, and the Treasury Regulations
promulgated thereunder (the "Regulations"). It is expressly acknowledged
that Seller and/or Purchaser may assign its rights in this AGREEMENT to
a qualified intermediary as defined in the Regulations ("Qualified
Intermediary") and at Closing, at the request of Purchaser or the
Qualified Intermediary, Seller will transfer title to the Aircraft to
Purchaser, the Qualified Intermediary or to an "Exchange Accommodation
Titleholder" as defined in Revenue Procedure 2000-37, 2000-2 C.B. 38.
Any assignment of this AGREEMENT shall be in writing and notification of
the assignment shall be given to Seller and/or Purchaser in writing at
or before Closing. Seller and/or Purchaser will cooperate with Seller
and/or Purchaser if requested by Seller and/or Purchaser to structure
the transaction in such manner, and will execute any documents that
Seller and/or Purchaser may be reasonably requested to sign that are
consistent with this AGREEMENT, provided Seller and/or Purchaser 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 AGREEMENT, the acceptance of the Aircraft or
payment for the Aircraft.
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IN WITNESS WHEREOF, the parties hereto have executed this AIRCRAFT SALES
AGREEMENT by their duly authorized representative, the day and year first above
written.
Nelnet Corporate Services, Inc. Mobek Investments, LLC.
By: /s/ Terry J. Heimes By: /s/ Greg Deman
-------------------------- -----------------------------
Chief Financial Officer
-------------------------- -----------------------------
Name and Title Name and Title
Union Financial Services, Inc.
By: /s/ Michael S. Dunlap
-----------------------
- -----------------------
Name and Title
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EXHIBIT A.
1993 CITATION VI
SERIAL NUMBER: 650-0232 REGISTRATION: N711LV
AIRFRAME & ENGINES
AIRFRAME TOTAL TIME: 3300 HOURS
LANDINGS: 2300
ENG MODEL: TFE-731-3C-100S ON MSP
APU: SUNDSTRAND PATS INSTALLATION
RVSM CERTIFIED
AVIONICS
F/DIR: HONEYWELL SPZ 650 COMPASS: DUAL HONEYWELL C-14D
EFIS: FIVE TUBE 5"x5" W/MFD RMI: DUAL COLLINS RMI 36
AUTOPILOT: HONEYWELL SPZ 650 RADIO ALT: COLLINS ALT 55B
COMMS: DUAL COLLINS PROLINE VHF 22B RADAR: SPERRY PRIMUS 650
NAVS: DUAL COLLINS PROLINE VIR 32A FMS: DUAL GLOBAL GNS-XLS
ADF: DUAL COLLINS PROLINE ADF 462 CVR: SUNDSTRAND 557
DME: DUAL COLLINS PROLINE DME 42 COLLINS PROLINE TDR 94D
HF: KING KHF 950 TCAS-II
ALTIMETER: HONEYWELL SPZ 650 HONEYWELL SAT/TAS/TAT SYSTEM
INTERIOR: New 9/1/2000- interior is fireblocked. Tan leather AMP seats
w/corporate tailoring, storage drawers and seat back pockets. Cabinetry is in a
light Burlwood and the carpet is a tan cut pile. Six individual passenger seats
in a center club configuration and forward R/H two-place couch for eight
passenger seating. RH, forward, 16.5" closet, two executive and two slim-line
tables, special LH forward refreshment center. Special aft vanity with closet,
toilet and dividers with sliding doors. Auxiliary passenger seat with (belted
toilet), for ninth passenger.
EXTERIOR: New 9/1/2000- overall snow white with black/gold/grape stripes.
NOTES: Phase 5 completed February 2003, Sundstrand APU (PAT's installation), B&D
cabin display, fuel quantity totalizer, dual 40 amp batteries, 76 cubic ft.
oxygen system, EROS oxygen masks, RVSM compliant, CESSNA Pro Parts.
ALL SPECIFICATIONS SUBJECT TO VERIFICATION UPON INSPECTION
AIRCRAFT SUBJECT TO PRIOR SALE, OR WITHDRAWAL FROM MARKET
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EXHIBIT B
NOTIFICATION OF RESULTS OF AIRCRAFT PREPURCHASE INSPECTION
Pursuant to the provisions of the Aircraft Sales Agreement dated October 1, 2004
(the "Agreement"), between Mobek Investments, LLC ("Seller"), Union Financial
Services, Inc. and Nelnet Corporate Services, Inc. (collectively, the
"Purchaser"), Seller is hereby notified that Purchaser has performed its
pre-purchase inspection of Cessna Citation VI s/n 650-0232 (N711LV), at Duncan
Aviation, Inc., Lincoln, NE, and has (initial whichever box is applicable):
[ ] REJECTED THE AIRCRAFT. Upon Escrow Agent's receipt from
Purchaser of this Exhibit B, Escrow Agent shall immediately
refund to Purchaser the full amount of the deposit, (minus the
fuel and MSP expense incurred by Seller to return Aircraft back
to Sioux City, IA.) The Agreement is terminated.
[ ] ACCEPTED THE AIRCRAFT. Escrow Agent will be notified
and Purchaser's deposit from this point on is to be held on a
non-refundable basis, unless Seller fails to perform or Seller
breaches its obligations or warranties.
[ ] ACCEPTED THE AIRCRAFT, SUBJECT TO SELLER'S AGREEMENT TO
CORRECT THE AIRWORTHINESS DISCREPANCIES LISTED BELOW. Upon Seller
executing below, agreeing to repair the airworthiness
discrepancies listed below, Purchaser will notify Escrow Agent
and Purchaser's deposit from this point on is to be held on a
non-refundable basis, unless Seller fails to perform or Seller
breaches its obligations or warranties.
List of Discrepancies to be Corrected:
(1)__(See List Attached)_________________
Dated:___________ Nelnet Corporate Services, Inc. Union Financial Services,
Inc.
______________________________ __________________________
______________________________ __________________________
Name & Title Name & Title
Seller hereby agrees to the conditions set forth above and agrees to correct the
airworthiness discrepancies listed herein, at Seller's expense.
Dated:_______________ Mobek Investments, LLC
__________________________
__________________________
Name & Title
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Exhibit C
WARRANTY BILL OF SALE
KNOW ALL MEN BY THESE PRESENTS:
That Mobek Investments, LLC. ("SELLER"), in consideration of the sum of ONE
DOLLAR ($1.00) and other good and valuable consideration paid to it by Nelnet
Corporate Services, Inc. and Union Financial Services, Inc. (collectively, the
"Purchaser"), the receipt of which is hereby acknowledged, hereby sells, grants,
transfers and delivers to Purchaser, its successors and assigns all of SELLER's
right, title and interest in and to the airframe described as Cessna Citation VI
Serial Number 650-0232, together with the engines installed thereon, described
as Honeywell TFE-731-3C-100S, Serial Numbers P-1081158 and P-108128, together
also with all equipment, components, appliances, parts, instruments, avionics,
appurtenances, accessories, furnishings and other equipment of whatever nature
installed in or attached to the airframe or the engines ("Components"), together
also with all loose equipment and documents in the airframe and spare parts
associated with the airframe, engines or components, together with all repair or
maintenance agreements or programs relating to the airframe, engines or
components, all pursuant to that Aircraft Purchase Agreement dated as of October
1, 2004 (collectively, the "Aircraft").
That SELLER hereby warrants to PURCHASER, its successors and assigns
that it is the holder of title to the Aircraft and has the right to sell the
same as aforesaid and that this Bill of Sale conveys to PURCHASER good and
marketable title to the Aircraft, free and clear of all security interests,
liens, claims, charges and encumbrances of any nature whatsoever, and that
SELLER will warrant and defend such title forever against all claims and demands
whatsoever.
That SELLER agrees and acknowledges that the terms and conditions of
this Bill of Sale shall survive the delivery of the Aircraft and the delivery
and recording of this or any Federal Aviation Administration Bill of Sale.
IN WITNESS WHEREOF, SELLER has caused this Warranty Bill of Sale to be
signed by its duly authorized officer this ________ day of
______________________, 2004.
Mobek Investments, LLC
By:____________________________
Its:____________________________
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Appendix 1
AIRCRAFT DELIVERY RECEIPT
Acknowledgment is made that the following Aircraft:
MANUFACTURER Cessna Aircraft Company
MODEL Citation VI
SERIAL NUMBER. 650-0232
REGISTRATION NUMBER N711LV
ENGINES SERIAL NUMBERS Honeywell (P-108115 / P-108128)
is hereby delivered to Purchaser at: Lincoln, NE this _____ day of ________,
2004 and that the Aircraft fully meets the terms and conditions of the AIRCRAFT
SALES AGREEMENT dated, October 1, 2004, and fully complies with the
representations therein.
Seller has delivered said Aircraft to Purchaser this date and has collected no
State or Local Taxes. Purchaser is solely responsible for any present or future
taxes or duties that may be levied on Purchaser in connection with the sale of
said "Aircraft".
Nelnet Corporate Services, Inc. Mobek Investments, LLC
- ----------------------------- -----------------------------
- ----------------------------- -----------------------------
Name and Title Name and Title
Union Financial Services, Inc.
By:
--------------------------
- -----------------------------
Name and Title
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ADDENDUM TO AIRCRAFT SALES AGREEMENT
Mobek Investment, LLC, ("Seller"), and Nelnet Corporate Services, Inc. and Union
Financial Services, Inc. ("Purchaser") hereby agree that Purchaser has per the
Aircraft Purchase Agreement signed by Seller on September 29, 2004, and signed
by Purchaser on September 29, 2004, had Duncan Aviation, Inc., Lincoln, NE,
perform a Pre-Purchase Inspection of the Aircraft (Cessna Aircraft Company,
Cessna Citation VI s/n 650-0232, N711LV), and the Pre-Purchase Inspection has
been completed.
Purchaser hereby agrees to waive the Seller agreeing to repair at Seller's
expense the Airworthy Discrepancies noted during the Prepurchase Inspection
agreed upon in Exhibit B in exchange for a reduction in the Purchase Price of
the Aircraft by the amount of $21,000.00 ($21,000 Thousand U.S. Dollars). The
Purchase Price now being $4,779,000.00 (Four Million Seven Hundred Seventy Nine
Thousand U. S. Dollars). All other terms and conditions to both Purchaser and
Seller shall still be in effect.
Purchaser: Seller:
Nelnet Corporate Services, Inc. Mobek Investments, LLC
By: /s/ Terry J. Heimes By: /s/ Greg Deman
---------------------------- ---------------------------
Union Financial Services, Inc.
By: /s/ Michael S. Dunlap
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