Exhibit 10.01

 

AIRCRAFT SALE AND PURCHASE AGREEMENT

 

THIS AIRCRAFT SALE AND PURCHASE AGREEMENT (“Agreement”), dated as of March 4,
2005, is by and between TAXI AEREO DE VERACRUZ, S.A. de C.V., a corporation
organized under the laws of Mexico, located at Privada Antonio Chedraui Caram
#248, Colonia Encinal, C.P. 91180, Xalapa, Veracruz, MEXICO, as seller
(“Seller”), and Guitar Center, Inc., a corporation organized under the laws of
the State of Delaware, located at 5795 Lindero Canyon Road, Westlake Village,
CA, 91362, as buyer (“Buyer”).  Buyer and Seller are collectively referred to
herein as the “Parties”, or individually as a “Party,” as context requires.

 

RECITALS:

 

A.                                   Seller is the legal and beneficial owner of
the Aircraft (as defined below), and

 

B.                                     Buyer wishes to purchase the Aircraft
from Seller, and Seller is willing to sell the Aircraft to Buyer, on the terms
and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the mutual covenants and promises contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties intending to be
legally bound hereby agree as follows:

 

1.               Definitions.  The following terms, when capitalized, shall have
the following meanings for all purposes of this Agreement:

 

“Acceptance Certificate” shall mean the document evidencing receipt and
acceptance of the Aircraft by Buyer, in the form attached hereto as Exhibit A.

 

“Aircraft” shall mean the Airframe, Engines, Parts, and Records.

 

“Aircraft Registry” shall mean the Federal Aviation Administration of the United
States.

 

“Airframe” shall mean one (1) Falcon 50 aircraft, excluding the Engines, and
bearing manufacturer’s serial number 210 and bearing Mexican Registration
XA-TXB.

 

“Bills of Sale” shall mean (a) a Federal Aviation Administration Bill of Sale;
and (b) a Warranty Bill of Sale, in the form attached hereto as Exhibit B,
conveying full legal and beneficial title of the Aircraft, free and clear of any
and all liens, to Buyer.

 

“Business Day” shall mean a day other than a Saturday or a Sunday on which the
banks in the State of Minnesota are open for business.

 

“Closing” shall mean the closing of the sale and purchase of the Aircraft
hereunder on the

 

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Closing Date.

 

“Closing Date” shall mean a date on or before March 31, 2005, as agreed by the
Parties, or otherwise as the Parties may mutually agree, at the time at which
the transfer of title, possession, and risk of loss to the Aircraft takes place
pursuant to this Agreement, which transfer shall occur when the Aircraft is
located in Portland, Oregon and the Purchase Price, as defined herein, has been
paid by Buyer to Seller.  The transfer of title, possession, and risk of loss
shall be evidenced by the delivery of the Bills of Sale by Seller to Buyer, and
delivery of the Certificate of Acceptance by Buyer to Seller.

 

“Delivery Conditions” shall mean those conditions set forth in Exhibit C
attached hereto.

 

“Engines” shall mean the three Garrett TPE-731-3-1C engines installed on the
Airframe, with manufacturer’s serial numbers P76784, P76735, P76783,
respectively.

 

“Escrow Account” shall mean the following bank account:

 

U.S. Bank, N.A.

ABA 091 000 022

Bnf Acct - 180121167365

BNF NAME:  USBANK CT WIRE CLRG

 

Bnf Address:  60 Livingstone Avenue, St. Paul, MN 55107-2292

OBI:  Aero Records & Title Co. Trust Account

Account No. 75-R064-009

Reference: XA-TXB

 

“Escrow Agent” shall mean Aero Records & Title Company, 3300 South Lakeside
Drive, Oklahoma City, OK 73179.

 

“FAA” shall mean the Federal Aviation Administration.

 

“Parts” shall mean any and all equipment, appliances, parts, instruments,
appurtenances, accessories, furnishings, seats, and other property of whatever
nature (other than Engines), relating to the Airframe and Engines, including (i)
any such items that may be loose on the Airframe on Closing Date, and (ii) any
such items that are incorporated or installed in or attached to the Airframe or
any Engine installed on such Airframe on the Closing Date.

 

“Person” shall mean any individual, firm, partnership, joint venture, trust,
corporation, government entity, committee, department, authority, or any body,
incorporated or unincorporated, whether having distinct legal personality or
not.

 

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“Purchase Price” is defined in Paragraph 3(a) hereof.

 

“Records” shall mean (i) all historical maintenance records of the Airframe,
Engines and Parts; (ii) all logbooks and inspection, modification and overhaul
records, if any, relating to the Airframe, Engines, and Parts; (iii) all
required manuals that are in Seller’s possession for operation, maintenance and
servicing of the Airframe, Engines, and Parts; and (iv) manufacturer service
agreements or warranties relating to the Airframe, Engines, and Parts. 
“Records” do not include any proprietary information, trade secrets, or patents,
copyrights, trademarks, or other intellectual property of Seller or of any third
party.

 

“Transaction Documents” shall mean this Agreement, the Bills of Sale, the
Acceptance Certificate, and any other document executed and delivered pursuant
hereto by Buyer, on the one hand, and Seller, on the other hand, to each other
on the Closing Date.

 

2.                                       Sale of Aircraft.  Pursuant to all of
the terms and conditions specified herein, Seller hereby agrees to sell the
Aircraft to Buyer, and Buyer hereby agrees to purchase the Aircraft from Seller,
on the Closing Date.  It is the express intent of the Parties that the
conveyances contemplated hereby be, and be construed as, an absolute sale of the
Aircraft.  Upon execution and delivery of the Bills of Sale to Buyer hereunder,
Seller shall have transferred to Buyer (a) full legal and beneficial title to
the Aircraft, free and clear of any and all liens whatsoever, and (b) to the
extent assignable, all rights of Seller to service and warranty rights with
respect to the Aircraft.  The sale of the Aircraft does not include any
proprietary information, trade secrets, or patents, copyrights, trademarks, or
any other intellectual property of Seller or of any third party.

 

3.                                       Purchase Price.

 

(a)                                  The purchase price (“Purchase Price”) for
the Aircraft shall be Ten Million Five Hundred Thousand U.S. Dollars (US
$10,500,000.00).  The Purchase Price shall be paid in full to Seller, without
any deduction or withholding whatsoever, whether in respect of set-off,
counterclaim, duties, or taxes of any kind.

 

(b)                                 Prior to the date of this Agreement, Buyer
shall have deposited into the Escrow Account an initial payment in the amount of
Fifty Thousand U.S. Dollars (US $50,000.00) in cash (“Initial Deposit”).  The
Initial Deposit shall be applied to the Purchase Price at Closing.  Of the
Initial Deposit, Twenty-One Thousand U.S. Dollars ($21,000.00) shall be
non-refundable and was transferred to the Seller prior to the date of this
Agreement.  The remaining Twenty-Nine Thousand Dollars ($29,000.00) shall be
refunded to Buyer if the Closing does not occur for any reason by March 31,
2005.

 

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(c)                                  Upon completion of the pre-purchase
inspection pursuant to Paragraph 4(a) and compliance by Seller with Paragraph
4(b), Buyer shall make a further deposit of One Million U.S. Dollars (U.S.
$1,000,000.00) into the Escrow Account (“Second Deposit”).  The Second Deposit
shall be fully refundable until applied to the Purchase Price at Closing.

 

(d)                                 Buyer shall deposit the balance of the
Purchase Price by wire transfer to the Escrow Account at least 48 hours prior to
the Closing Date.

 

(e)                                  Prior to the Closing Date, the Parties
shall position with Escrow Agent fully executed copies of the Bills of Sale,
Acceptance Certificate, and proof of Seller’s status as an additional insured on
Buyer’s aviation liability insurance policy.

 

(f)                                    Delivery and acceptance of the Aircraft,
and transfer of title, risk of loss, and possession of the Aircraft shall occur
in Portland, Oregon.

 

(g)                                 Subject to the fulfillment of the Conditions
to Closing set out in Paragraph 7, the following events shall occur in the
following sequence at Closing:

 

(i)                                     Buyer shall deliver to Seller the
Acceptance Certificate.

 

(ii)                                  Buyer shall deliver to Seller proof of
Seller’s status as an additional insured on Buyer’s aviation liability insurance
policy as required by Paragraph 11.

 

(iii)                               Seller shall deliver to Buyer the Bills of
Sale.

 

(iv)                              Buyer shall pay to Seller the Purchase Price
for the Aircraft.

 

(v)                                 Seller shall deliver and Buyer shall accept
delivery of the Aircraft in Portland, Oregon.

 

Completion of the steps specified in this Paragraph 3(g) shall be deemed to have
occurred simultaneously.

 

4.                                       Buyer’s Inspection.

 

(a)                                  Buyer has performed a preliminary visual
inspection and a pre-purchase inspection of the Aircraft at an FAA certificated
repair station to which Seller moved the Aircraft at its sole expense prior to
the date of this Agreement.

 

(b)                                 Seller shall cure at its expense prior to
Closing (i) any discrepancy discovered

 

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during the pre-purchase inspection that would render the Aircraft ineligible for
a certificate of airworthiness, and (ii) any system determined during the
pre-purchase inspection not to be within maintenance manual limits.

 

(c)                                  Seller in its sole discretion may elect not
to meet the requirement of the preceding Paragraph 4(b) and to terminate this
Agreement.  In the event of such termination, Seller shall return to Buyer all
deposits in the Escrow Account, less the $21,000 non-refundable portion of the
Initial Deposit, and neither Party shall have any further obligation to the
other under this Agreement.

 

5.                                       Condition of Aircraft.

 

(a)                                  ON THE CLOSING DATE, THE AIRCRAFT SHALL BE
SOLD TO BUYER “AS IS, WHERE IS,” EXCEPT TO THE EXTENT THIS AGREEMENT MAY
SPECIFICALLY PROVIDE OTHERWISE.

 

SELLER HEREBY DISCLAIMS ANY AND ALL OBLIGATIONS AND LIABILITIES TO BUYER IN TORT
WITH RESPECT TO THE AIRCRAFT, INCLUDING BUT NOT LIMITED TO NEGLIGENCE AND STRICT
LIABILITY.

 

EXCEPT AS SET FORTH IN PARAGRAPH 6(a), SELLER ALSO DISCLAIMS ANY AND ALL
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT,
INCLUDING BUT NOT LIMITED TO

 

(A) ANY IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE OR USE (INCLUDING
THE ABILITY TO OPERATE OR REGISTER THE AIRCRAFT) OR ANY WARRANTY OF
MERCHANTABILITY;

 

(B) ANY REPRESENTATION REGARDING THE ABSENCE OF ANY DEFECTS IN THE AIRCRAFT,
REGARDLESS OF WHETHER ANY DEFECTS THAT MAY EXIST ARE DISCOVERABLE, ARE KNOWN OR
UNKNOWN, OR ARE APPARENT OR CONCEALED;

 

(C) ANY REPRESENTATION REGARDING THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT,
TRADEMARK, OR COPYRIGHT OR OF ANY OTHER INTELLECTUAL PROPERTY;

 

(D) ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE OR DEALING OR USAGE
OF TRADE; AND

 

(E) ANY REPRESENTATION AS TO (i) THE CAPACITY, AGE, VALUE, QUALITY,

 

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DESCRIPTION, WORKMANSHIP, MATERIALS, CONSTRUCTION, PERFORMANCE, AIRWORTHINESS,
CONDITION, DESIGN, OR OPERATION OF THE AIRCRAFT OR OF ANY PART THEREOF, OR (ii)
THE CONDITION OR THE COMPLETENESS OF AIRCRAFT RECORDS.

 

BUYER HEREBY WAIVES, RELEASES, RENOUNCES AND DISCLAIMS EXPECTATION OF, OR
RELIANCE UPON, ANY SUCH OBLIGATIONS, LIABILITIES, WARRANTIES, OR
REPRESENTATIONS.

 

(b)                                 In the event of a total loss or constructive
total loss of the Aircraft prior to Closing, this Agreement shall terminate,
Seller shall instruct the Escrow Agent to return to Buyer all deposits in the
Escrow Account, less the $21,000 non-refundable portion of the Initial Deposit
which has been transferred to Seller, and neither Buyer nor Seller shall have
any further obligation to the other Party under this Agreement or the Term Sheet
and Letter of Intent between Seller and Buyer dated January 12, 2005.

 

(c)                                  If Seller does not satisfy the Delivery
Conditions listed in Exhibit C hereto, Buyer shall have the right to terminate
this Agreement.  In the event of such termination, Seller shall return to Buyer
all deposits in the Escrow Account, less the $21,000 non-refundable portion of
the Initial Deposit, and neither Buyer nor Seller shall have any further
obligation to the other under this Agreement.

 

6.                                       Representations and Warranties.

 

(a)                                  Seller represents and warrants to Buyer as
of the date hereof and on the Closing Date that:

 

(1)                                  it is a corporation duly organized, validly
existing, and in good standing under the laws of Mexico and has the power and
authority to execute and deliver the Transaction Documents to which it is a
party and to perform its obligations thereunder;

 

(2)                                  Seller has duly authorized by all necessary
action the execution, delivery, and performance of the Transaction Documents to
which it is a party and the consummation of the transactions contemplated
thereby;

 

(3)                                  assuming the validity of execution and
delivery by any other parties, the Transaction Documents executed and delivered
by Seller constitute legal, valid and binding obligations of Seller enforceable
in accordance with their respective terms, except to the extent that such
enforceability may be limited by general principles of equity or by laws of
bankruptcy or insolvency or similar laws respecting creditors’ rights generally;

 

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(4)                                  the execution and delivery of, the
performance of its obligations under, and compliance by Seller with, the
Transaction Documents to which it is a party will in no way exceed the powers
granted to Seller by, or violate in any respect any provision of, or cause a
breach or default of:

 

(i)                                     any law or regulation or any order or
decree of any governmental authority, agency, or court, or generally accepted
interpretation thereof, or any judgment, decree or permit to which Seller is
subject;

 

(ii)                                  the constitutional documents of Seller; or

 

(iii)                               any existing agreement of Seller with any
other party;

 

(5)                                  Seller has full legal and beneficial title
to and beneficial ownership of the Aircraft, free and clear of all liens,
encumbrances and security interests; and the Aircraft is currently registered in
the name of Seller by the Dirección General de Aeronautica Civil (“DGAC”) of
Mexico;

 

(6)                                  Seller has not received notice of, and is
not aware of, any outstanding notices or demands from any governmental entity or
from any other Person claiming authority in respect of such Aircraft that would
require any work or other action to be taken in respect of the Aircraft or that
would require the payment of any taxes or charges or the expenditure of any
money in respect of the Aircraft;

 

(7)                                  all of Seller’s liabilities for taxes and
other governmental, quasi-governmental and other charges with regard to the
Aircraft that are due for payment have been paid, or the same have been properly
accrued for in accordance with generally accepted accounting principles and
will, if due for payment, be paid prior to the Closing Date;

 

(8)                                  Seller is not aware of any outstanding
claims, whether or not asserted, related to the Aircraft;

 

(9)                                  no warranty claims are pending against the
manufacturers of the Aircraft or against any other Person in respect of the
Aircraft, including the Engines;

 

(10)                            to the best of Seller’s knowledge, the Aircraft
logbook and Aircraft modification and overhaul records are true, accurate, and
complete;

 

(11)                            the Aircraft has a current valid certificate of
airworthiness issued in the name of Seller by the DGAC;

 

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(12)                            to the best of Seller’s knowledge, the Aircraft
has never been registered in the United States;

 

(13)                            Since 1996 the Seller has held Mexican license
No. 102.419-3356 from the Dirección General Aeronática de Civil of Mexico to
conduct international charter transportation of passengers as an air taxi;

 

(14)                            Since 1997, Seller has held exemption authority
from the U.S. Department of Transportation to conduct charter passenger
operations between Mexico and the United States;

 

(15)                            Seller holds operations specifications from the
U.S. Federal Aviation Administration under Part 129 of Title 14 of the Code of
Federal Regulations; and

 

(16)                            Seller purchased the Aircraft in 2003 and
exported the Aircraft from France to Mexico in 2003.

 

(b)                                 Buyer represents and warrants to Seller as
of the date hereof and on the Closing Date that:

 

(1)                                  it is a corporation duly organized and
validly existing under the laws of the governmental jurisdiction in which it is
incorporated and has the power and authority to execute and deliver the
Transaction Documents to which it is a party and to perform its obligations
thereunder;

 

(2)                                  Buyer has duly authorized by all necessary
action the execution, delivery, and performance of the Transaction Documents to
which it is a party and the consummation of the transactions contemplated
thereby;

 

(3)                                  assuming the validity of execution and
delivery by any other parties, the Transaction Documents executed and delivered
by Buyer constitute legal, valid and binding obligations of Buyer enforceable in
accordance with their respective terms, except to the extent that such
enforceability may be limited by general principles of equity or by laws of
bankruptcy or insolvency or similar laws respecting creditors’ rights generally;

 

(4)                                  the execution and delivery of, the
performance of its obligations under, and compliance by Buyer with, the
Transaction Documents to which it is a party will in no way exceed the powers
granted to Buyer by, or violate in any respect any provision of, or cause a
breach or default of:

 

(i)                                     any law or regulation or any order or
decree of any governmental authority, agency, or court, or generally accepted
interpretation thereof, or any judgment, decree or permit

 

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to which Buyer is subject;

 

(ii)                                  the constitutional documents of Buyer; or

 

(iii)                               any existing agreement of Buyer with any
other party;

 

(5)                                  to the knowledge of Buyer, no actions or
proceedings are pending or threatened against Buyer or any of its property
before any court, arbitrator or administrative agency that, if adversely
determined, would materially adversely affect the ability of Buyer to perform
its obligations under this Agreement or any of the other Transaction Documents
to which it is a party;

 

(6)                                  neither the execution and delivery by Buyer
of this Agreement nor the consummation of any of the transactions by Buyer
contemplated hereby requires the consent or approval of, the giving of notice
to, or the taking of any other action in respect of, any trustee or holder of
any indebtedness or obligation of Buyer or of any governmental authority or
agency, except such as has been, or will be, obtained, given, or taken by the
Closing Date;

 

(7)                                  Buyer has independently, without reliance
on Seller, and based upon such information and materials as it deems
appropriate, made its own appraisal of and investigation into the condition and
value of the Aircraft, the results of which are satisfactory to Buyer in its
sole discretion.

 

(c)                                  The representations of Seller in Paragraph
6(a) and the representations of Buyer in Paragraph 6(b) shall survive for two
years from the Closing Date.

 

7.                                       Conditions to Closing.

 

(a)                                  It is a condition to the Buyer’s obligation
to close on the Aircraft on the Closing Date that:

 

(1)                                  Seller’s representations and warranties
contained in Paragraph 6(a) shall be true and correct in all material respects;

 

(2)                                  Seller shall have performed or shall tender
performance of its obligations hereunder with respect to the Aircraft and the
Transaction Documents;

 

(3)                                  The Aircraft shall conform to the Delivery
Conditions and there shall be no deterioration in the condition of the Aircraft
(normal wear and tear excepted) since the date of Buyer’s inspection pursuant to
Paragraph 4;

 

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(4)                                  The Aircraft shall have been deregistered
by the DGAC, and Buyer shall have received written evidence from the FAA of such
deregistration as of the Date and Time of Closing.

 

(b)                                 It is a condition to the Seller’s obligation
to close on the Aircraft on the Closing Date that:

 

(1)                                  Buyer’s representations and warranties
contained in Paragraph 6(b) shall be true and correct in all material respects;
and

 

(2)                                  Buyer shall pay the Purchase Price for the
Aircraft as provided in Paragraph 3(a) and shall have performed or shall tender
performance of its other obligations hereunder with respect to the Aircraft and
Transaction Documents.

 

(3)                                  Buyer shall pay Seller U.S. $25,500 to
compensate Seller for costs associated with transportation of the Aircraft from
Mexico to Portland, Oregon via an intermediate stop in Arizona.

 

(4)                                  Buyer shall provide proof of Seller’s
status as an additional insured on Buyer’s aviation liability insurance policy
as required by Paragraph 11.

 

8.                                       Buyer’s Indemnity.  Buyer agrees to
indemnify, reimburse and hold harmless Seller and each of its shareholders,
directors, beneficiaries, affiliates, servants, agents, employees, successors
and assigns (the “Seller Indemnitees”), from and against any and all claims,
damages, losses, liabilities, demands, suits, judgments, causes of action, legal
proceedings, whether civil or criminal, penalties, fines, other sanctions, and
any costs and expenses in connection therewith, including costs of investigation
and reasonable attorneys’ fees and expenses, that may result from or arise in
any manner out of or in relation to an event occurring from and after the
Closing and that arise out of or relate to (i) the condition, ownership,
leasing, subleasing, purchase, possession, disposition, use or operation of the
Aircraft, either in the air or on the ground, or (ii) any proprietary rights,
trade secrets, or patent, copyright, trademark, or other intellectual property
of Seller or of a third party that may be associated with ownership or operation
of the Aircraft, or (iii) any defect in the Aircraft arising from any material
or article used therein, from the design, testing, or use thereof, or from any
maintenance, service, repair, overhaul, or testing of the Aircraft, regardless
of when such defect shall be discovered, whether or not such Aircraft is at the
time in the possession of Buyer, and regardless of where such Aircraft may then
be located.

 

9.                                       Seller’s Indemnity.  Seller agrees to
indemnify, reimburse and hold harmless Buyer and each of its shareholders,
directors, beneficiaries, affiliates, servants, agents, employees, successors
and assigns (the “Buyer Indemnitees”), from and against any and all

 

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claims, damages, losses, liabilities, demands, suits, judgments, causes of
action, legal proceedings, whether civil or criminal, penalties, fines, other
sanctions, and any costs and expenses in connection therewith, including costs
of investigation and reasonable attorneys’ fees and expenses, which may result
from or arise in any manner out of or in relation to good and marketable
Aircraft title, free and clear of all liens and security interests.

 

10.                                 Taxes and Costs and Expenses.

 

(a)                                  Buyer shall assume responsibility for and
indemnify Seller for any and all federal, state and local taxes and like
charges, duties, fees, and assessments of any kind, including, but not limited
to, value added, property, ad valorem, franchise, consumption, sales, or use
taxes, that may be assessed, imposed, or levied

 

(i) by the United States or its political subdivisions as a result of or in
connection with

(A) the purchase, acceptance, or registration of the Aircraft pursuant to this
Agreement,

(B) the ownership or operation of the Aircraft at or after Closing; provided,
however, that, in the case of clauses (A) and (B), Buyer shall not be
responsible for or required to indemnify Seller for U.S. federal, state or local
taxes on Seller’s income or Seller’s capital gains, or

 

(ii) by Mexico or its political subdivisions as a result of or in connection
with ownership or operation of the Aircraft at or after Closing.

 

(b)                                 Seller shall assume responsibility for and
indemnify Buyer for any and all federal, state and local taxes and like charges,
duties, fees, and assessments of any kind, including, but not limited to, value
added, property, ad valorem, franchise, consumption, sales, or use taxes, that
may be assessed, imposed, or levied

 

(i) by Mexico or its political subdivisions as a result of or in connection with

(A) the sale, delivery, or deregistration of the Aircraft pursuant to this
Agreement, or

(B) the ownership or operation of the Aircraft before the Closing Date;
provided, however, that, in the case of clauses (A) and (B), Seller shall not be
responsible for or required to indemnify Buyer for Mexican federal, state or
local taxes on Buyer’s income or Buyer’s capital gains, or

 

(ii) by the United States or its political subdivisions as a result of or in
connection with ownership or operation of the Aircraft before Closing.

 

(c)                                  Notwithstanding Paragraphs 4(a) and 4(b),
Buyer shall assume responsibility for and shall indemnify Seller for any import
duties, fees or costs assessed, imposed, or levied in connection with importing
the Aircraft into the United States for sale to Buyer, regardless of

 

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whether such import is deemed to have occurred at, before, or after Closing.

 

(d)                                 Seller and Buyer shall cooperate to minimize
any tax liability that might arise as a result of the transaction contemplated
by this Agreement.

 

(e)                                  Except as otherwise provided herein, Buyer
and Seller shall each pay their own costs and expenses (including legal costs)
relating to this transaction.  Buyer and Seller shall share equally the fees,
costs and expenses of the Escrow Agent.  Seller shall bear any fees, costs and
expenses due to Fernandez Aviation or Gaston Fernandez for broker or other
services provided in connection with this Agreement and the transactions
contemplated hereunder.

 

Buyer shall bear any fees, costs and expenses due to Edward Kapitanski for
broker services provided in connection with this Agreement and the transactions
contemplated hereunder.

 

11.                                                                                
Insurance.  For a period of two (2) years from the Closing Date, Buyer, either
directly or through any subsequent purchasers or lessees of the Aircraft, shall
provide and maintain third-party liability insurance on the Aircraft and shall
include Seller as an additional insured on each such aviation liability
insurance policy, which policy or policies shall provide not less than Fifty
Million US Dollars (US $ 50,000,000) in third-party liability coverage.  Buyer
shall provide, or cause any subsequent purchasers or lessees of the Aircraft to
provide, proof of Seller’s status as such additional insured.

 

12.                                                                                
Miscellaneous.

 

(a)                                  Notice.  All notices required or permitted
hereunder shall be in writing and may be delivered in person, faxed, sent by
email, or sent by a reputable international courier service using the following
information or comparable information that either party may give to the other
from time to time through proper notice.  Any such notice shall be effective
when received by the other party.

 

Notice Information for Seller:

 

Taxi Aero de Veracruz, S.A. de C.V.

Privada Antonio Chedraui Caram #248

Colonia Encinal

C.P. 91180, Xalapa, Veracruz

MEXICO

Attention: Mr. Antonio Chedraui

Tel:

011-52-228-814-1667

Fax:

011-52-228-814-4957

Email:

antonio@chedraui.com.mx

 

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Notice Information for Buyer:

 

Guitar Center, Inc.

5795 Lindero Canyon Road

Westlake Village, CA 91362

Attention: Mr. Bruce Ross

Tel:

818-735-8888

Fax:

818-735-4923

Email:

bross@guitarcenter.com

 

(b)                                 Assignment of Records.  Effective as of
Closing, Seller hereby assigns to Buyer all of Seller’s right, title and
interest in and to all Records.

 

(c)                                  Remedies Cumulative.  No right or remedy of
any Party provided for herein is exclusive of any other right or remedy, but all
such rights and remedies are cumulative of every other right and remedy provided
for herein, at law, in equity, by statute, or otherwise, and may be exercised
concurrently or separately from time to time.

 

(d)                                 Applicable Law.  This Agreement shall in all
respects be governed by, and construed in accordance with, the laws of the State
of New York (without regard to any conflicts of law rule which might result in
the application of the laws of any other jurisdiction), including all matters of
construction, validity and performance.

 

(e)                                  Severability.  Any provision of this
Agreement that may be prohibited or unenforceable in any jurisdiction shall be
ineffective to the extent of such prohibition or unenforceability in such
jurisdiction only, without invalidating the remaining provisions hereof in such
jurisdiction and without invalidating any of the provisions hereof in any other
jurisdiction.

 

(f)                                    Further Assurances.  Each Party will
promptly, at any time and from time to time, execute and deliver to the other
Party such further instruments and documents, and take such further action as
the requesting Party may from time to time reasonably request, as necessary to
carry out this Agreement or to establish and protect the rights, interests, and
remedies created hereunder.

 

(g)                                 Written Changes Only.  No term or provision
of this Agreement may be changed or waived orally, but only by an instrument in
writing signed by both Parties.

 

(h)                                 Exclusivity.  This Agreement is the complete
and exclusive statement of the Parties with respect to the subject matter hereof
and supersedes all prior oral and written

 

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communications, proposals, agreements, representations, statements, letters of
intent, negotiations, and undertakings among Seller and Buyer and their
respective agents and representatives with respect to the subject matter hereof.

 

(i)                                     No Broker.  Except as provided in
Paragraph 10(e), neither Party has employed or retained any broker or
remarketing agent in connection with the sale of the Aircraft.  Each Party
agrees to pay, indemnify, and hold harmless the other Party from and against any
and all liabilities, losses, costs, damages, claims and expenses (including
reasonable attorneys’ fees and litigation costs) that the other Party shall ever
suffer or incur because of any claim by any broker or agent claiming by,
through, or under the indemnifying Party, whether or not meritorious, for any
fee, commission or other compensation with respect to the sale or purchase of
the Aircraft.

 

(j)                                     Confidentiality.  This Agreement and
each of the other Transaction Documents are privileged and confidential. 
Neither Party will disclose, or cause to be disclosed, the contents of this
Agreement or of any of the other Transaction Documents to any Person, except (a)
to the extent necessary to enforce a Party’s rights under any of the Transaction
Documents, (b) to a Party’s agents, attorneys and accountants, (c) to the extent
required by law, (d) to the extent that such information is publicly available
prior to such disclosure, or (e) with the prior written consent of the other
Party.  Seller acknowledges that Buyer will attach a copy of this Agreement to
an 8-K filing with the United States Securities and Exchange Commission to be
made shortly after execution of this Agreement.

 

(k)                                  Counterparts.  This document may be
executed in counterparts, each of which shall be deemed an original and all of
which together shall constitute but one and the same original.

 

IN WITNESS WHEREOF, the Parties hereto have executed this Aircraft Sale and
Purchase Agreement on the date first set forth above.

 

 

 

TAXI AERO DE VERACRUZ, S.A. de C.V., as Seller

 

 

 

 

 

By:

/s/ Antonio Chedraui

 

 

 

 

Name:

Antonio Chedraui

 

 

 

Title:

President

 

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GUITAR CENTER, INC., as Buyer

 

 

 

 

 

By:

/s/ Bruce Ross

 

 

 

 

Name:

Bruce Ross

 

 

 

Title:

Chief Financial Officer

 

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Exhibit A

to Aircraft Sale and Purchase Agreement

 

ACCEPTANCE CERTIFICATE

 

THIS ACCEPTANCE CERTIFICATE is delivered on March     , 2005, by, GUITAR CENTER,
INC. (“BUYER”), to TAXI AEREO DE VERACRUZ, S.A. de C.V. (“SELLER”), pursuant to
the Aircraft Sale and Purchase Agreement, dated as of March 4, 2005, between
SELLER and BUYER (the “Agreement”).

 

Capitalized terms used in this Certificate shall have the meaning given to such
terms in the Agreement.

 

1.                                       DETAILS OF ACCEPTANCE:

 

BUYER confirms to SELLER that BUYER has at            o’clock on this
             day of March 2005 (the “Effective Time”), at Portland, Oregon
accepted the following, in accordance with the provisions of the Agreement:

 

a.  One Falcon 50 Aircraft, Manufacturer’s Serial Number 210, including all
associated Parts;

 

b.  Three Garrett TPE-731-3-1C Engines; Manufacturer’s Serial Numbers P76784,
P76735, P76783, including all associated Parts;

 

c.  The Records related to the Airframe, Engines, and Parts.

 

2.                                       ACCEPTANCE:

 

BUYER hereby confirms that the Aircraft and Records (identified in 1(a), (b),
and (c) above) are acceptable to it for all purposes and satisfy the Delivery
Conditions as required under the Agreement.

 

IN WITNESS WHEREOF, BUYER has, by its duly authorized representative, executed
this Certificate of Acceptance on the date stated in Paragraph 1 above.

 

GUITAR CENTER, INC.

 

 

By:

 

 

 

Name:Bruce RossTitle:

Chief Financial Officer

 

 

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Exhibit B to Aircraft Sale and Purchase Agreement

 

WARRANTY BILL OF SALE

 

Taxi Aereo de Veracruz, S.A. de C.V., a corporation organized under the laws of
Mexico and located at Privada Antonio Chedraui Caram #248, Colonia Encinal, C.P.
91180, Xalapa, Veracruz, MEXICO (“Seller”), is the legal and beneficial owner of
that certain Falcon 50 aircraft bearing manufacturer’s serial number 210, and
last bearing Mexican registration XA-TXB, consisting of

(a)          said aircraft excluding the Engines (the “Airframe”);

(b)         three Garrett TPE-731-3-1C engines with manufacturer’s serial
numbers P76784, P76735, P76783 installed thereon (the “Engines”);

(c)          all equipment, appliances, parts, instruments, appurtenances,
accessories, furnishings, seats, and other property that may be loose on,
incorporated in, installed on, or attached to the Airframe or Engines on the
date hereof (the “Parts”); and

(d)         all historical maintenance records of the Airframe, Engines, and
Parts; all logbooks and inspection, modification and overhaul records, if any,
relating to the Airframe, Engines, and Parts; all required manuals that are in
Seller’s possession for operation, maintenance, and servicing of the Airframe,
Engines, and Parts; and manufacturer service agreements or warranties relating
to the Airframe, Engines, and Parts (the “Records”);

as provided in the Aircraft Sale and Purchase Agreement dated March 4, 2005,
between Seller and Guitar Center, Inc., a corporation organized under the laws
of Delaware, and located at 5795 Lindero Canyon Road; Westlake Village, CA 91362
(“Buyer”).  The Airframe, Engines, Parts, and Records are collectively
hereinafter referred to as the “Aircraft.”

 

In consideration of the Purchase Price and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Seller does this             day of March 2005, grant, convey, transfer,
bargain, sell, assign, and deliver all of Seller’s right, title, and interest in
and to the Aircraft unto Buyer, its successors and assigns, forever.

 

Seller hereby warrants to Buyer that, immediately prior to the delivery of this
Warranty Bill of Sale, Seller held good and lawful right to sell the Aircraft,
and that there is hereby conveyed to Buyer on the date hereof legal and
beneficial title to the Aircraft free and clear of all liens, claims, and
encumbrances; and that Seller hereby warrants that it shall defend such title
against all claims and demands whatsoever of any Person.

 

IN WITNESS WHEREOF, Seller has caused this instrument to be executed by its duly
authorized officer this         day of March, 2005.

 

TAXI AEREO DE VERACRUZ, S.A. de C.V.

 

 

By:

 

 

 

Name:  Antonio Chedraui

Title:

 

 

 

 

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Exhibit C to

Aircraft Sale and Purchase Agreement

 

DELIVERY CONDITIONS

 

1.                                       The Aircraft shall be in good working
order and have no airworthiness defects.

 

2.                                       Seller shall have completed all
mandatory Airworthiness Directives, mandatory service bulletins, and mandatory
maintenance inspections on the Aircraft that require compliance as of the
Closing Date.

 

3.                                       The total time on the Aircraft shall be
less than 3,500 hours.

 

4.                                       Each engine shall have a minimum of 700
hours remaining until the next scheduled overhaul.

 

5.                                       Any fuel, hydraulic, pneumatic, water,
and waste systems leaks shall be within maintenance manual limits.

 

6.                                       Any Aircraft corrosion shall be within
maintenance manual limits.

 

7.                                       All Delivery Conditions shall be
extinguished upon Buyer’s acceptance of the Aircraft.

 

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