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 


 





















 


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


 


13





















 


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

  



 


14





















 


	
   

  	
  GUITAR
  CENTER, INC., as Buyer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bruce Ross

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  Bruce
  Ross

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Chief
  Financial Officer

  



 


15





















 


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

  	
   

  
					



 


16





















 


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:

  	
   

  	
   

  	
   

  
							



 





















 


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.