515A S. Fry Rd.Ste 127
Katy, TX 77450
281-599-8841 or toll free 1-800-913-JETS
July 08, 2005
Dear Jeff:
Thank you for the opportunity to work with you on the aircraft we have discussed.
I am excited about how our marketing can reach the international market you need to have reached in order to get this job done.
I am proposing a NET TO SELLER AGREEMENT on this, but we can work whatever you want out. You seem to be very fair in your thinking.
We intend to be your aviation resource when it comes time to sell or trade your business aircraft.
Western Aviation, Inc. is a unique aircraft broker in the fact that we market in a very aggressive, yet pinpoint format that is welcomed by our clients and prospects alike. As our logo “Selling Aviation…with Innovation” suggests, we market and sell our aircraft like no one else in the industry can, and we spare no expense in doing so!
We use subscriber only tools such as Lexis-Nexis (and OneSource ( that are leaders in the business-to-business contact database industry.
Additionally, leading advertiser in AircraftMarketPlace, Inc. ( which is an industry leading General Aviation directory which sends out a newsletter to over 65000 aviation professionals weekly that desire to receive our newsletter.Through a prior arrangement with AircraftMarketPlace, Inc., Western Aviation also makes use of their highly specialized database contacts. This is something unique to Western Aviation and is not available at any price to any other company.
We also use JetNet, and Amstat, which are industry-leading databases which allows us to pinpoint corporate aircraft owners in specific geographies down to even a single airport identifier.
In addition, we advertise in several mediums including AircraftMarketPlace ( Controller Magazine (full page) Business Air (two full pages), ASO and Trade-A-Plane as appropriate.
In short, we market and sell your aircraft like no one else in the industry can. With corporate offices in HoustonTX and with additional sales offices in ColumbiaSC and AtlantaGA (and the soon to be opened SacramentoCA office), Western Aviation, Inc. has the staff and organization in place to serve your aviation needs. Our sales staff represents over forty years of combined aircraft sales experience, and we want to be your source of aviation expertise.
We are also members of the Diamond Aviation Group our reach – with the addition of 9 brokers around the country, plus their contacts around the world…. You can not beat it and most importantly it will result in a faster sale, with a better sales price in most cases!
Please review the attached documentation, sign and return. Let me be your broker!
Sincerely,
DAVID FISHER
David Fisher
WESTERN AVIATION, INC.
EXCLUSIVE AIRCRAFT SALES AGREEMENT
This AGREEMENT is made by and between WESTERN AVIATION, INC., (WAI) and The Penn Warranty Corporation (CLIENT) Whose address isHanoverInd. Est. 1081 Hanover St. Wilkes Barre, PA 18706-2028.
CLIENT represents and warrants that it is the owner of the aircraft and has legal authority to enter into this
Agreement. Year:1978
Make: Cessna
Model:Citation II
Serial Number:550-0029
Registration Number:N524MA
WAIshall have exclusive right to manage the sale of CLIENT’s aircraft for 280 days, beginning ______.
At the end of the “Term,” this Agreement shall automatically renew for an additional Term unless CLIENT gives WAI
Notice of its intent not to renew at least thirty (30) days prior to the end of the Term.
WAI will represent the above referenced aircraft in promotional efforts directed toward its sale. WAI’s sales specialists will circulate information regarding the CLIENT’s aircraft through advertising methods selected by WAI and will pay the costs of all such marketing and advertising. CLIENT acknowledges and understands the aircraft shall be advertised as deemed appropriate by WAIfor this particular aircraft market conditions. WAIshall not be required to present any certain number of potential buyers.
CLIENT agrees to make aircraft available for inspection (upon reasonable notice) and furnish WAI with information and photographs of the aircraft and its equipment. CLIENT acknowledges that WAI shall disseminate information the CLIENT provides regarding the aircraft and agrees to hold harmless and indemnify WAI from any liability, which might arise from such dissemination or from any information that CLIENT fails to provide. CLIENT agrees to refer all inquiries concerning the sale of the aircraft to WAI.
CLIENT agrees to accept a minimum of ______($ ) U.S. DOLLARS
Net price to CLIENT after any and all commissions paid to WAI, unless otherwise authorized. CLIENT agrees that WAI will retain all proceeds above the agreed net price of ______($ )
U.S. Dollars as its commission on the sale.
IF CLIENT a) directly or indirectly sells or leases the aircraft during the term of this Agreement to any third party outside of this Agreement; or b) directly or indirectly sells or leases the aircraft within six (6) months after the termination of this Agreement to any third party procured or contracted by WAI during the term of this Agreement; or c) refuses to accept a bona fide offer for the net purchase price amount stated above, or d) terminates this Agreement or withdraws the aircraft from sale prior to the expiration of this Agreement then CLIENT agrees to immediately pay WAI a commission of Fifty Thousand ($50,000) U.S. Dollars. If action is instituted on this Agreement to collect compensation or commissions.CLIENT agrees to pay such sums as the court may fix as reasonable attorney’s fees in addition to any damages or other relief sought by WAI.CLIENT agrees to release and hold harmless WAI, its agents and assigns, from and against any and all claims, damages, or liability suffered by WAIas a result of CLIENT taking action described in a), b) or c) above. It is agreed that the jurisdiction for this agreement is Harris County, Texas, USA.
CLIENT agrees to include the aircraft manuals (flight, maintenance, parts) all airframe and engine log books and records, and all support equipment, spare parts and other aircraft components, upon delivery of the aircraft to its new owner.
This agreement shall become effective and WAIshall begin its promotional efforts toward the dale of this aircraft upon execution by the CLIENT and acceptance by WAI.
WESTERN AVIATION, INC. Seller: ______
By: David Fisher Date: By: Date:
Mr. Jeff Luizza
The Penn Warranty Corporation
HanoverInd. Est., 1081 Hanover St.
Wilkes Barre, PA 18706
Dear Jeff:
Based on our conversation yesterday, I have created this report so that you could see how much of a great value the 1978 Cessna Citation II that you are considering selling.
There are 592 Cessna Citation 550 Class Aircraft in existence. As you can see, 115 for sale/lease/trade.
Ownership / Totals / For Sale / Leased / Dealer Owned / End User Owned / End User w/Exclusive / Domestic / InternationalWhollyOwned / 113 / 113 / 7 / 16 / 73 / 24 / 84 / 29
FractionallyOwned / 1 / 1 / 0 / 0 / 0 / 1 / 1 / 0
SharedOwnership / 1 / 1 / 0 / 0 / 2 / 0 / 2 / 0
Totals / 115 / 115 / 7 / 16 / 75 / 25 / 87 / 29
Low / High / Average
Asking Price / $799,000 / $2,650,000 / $1,675,947
AFTT / 1,023 / 16,611 / 7,678
Year Mfr / 1978 / 1993 / 1982
Landings / 1,326 / 14,852 / 7,462
Engine Total Time / 1,023 / 12,559 / 6,593
Days On Market / 1 / 2,399 / 489
Of those 115, 82 that are in the USA for sale comparing apples and apples, with similar times and equipment, I am looking at those in the 1978 year range only:
S/N 550-0028 has 10900TT, 2125/2125 hours on the engines, no damage, average avionics and good P/I. Asking $1,200,000 and will take $1,000,000 net.
S/N 550-00314720 TT with 1820/1820 engine times, good avionics, RVSM, TAWS, Cleveland Wheels and Brakes, EROS Oxygen masks, Fresh phase 1 – 5. Asking $1,650,000 Will take $1,550,000 and I think that is overpriced. I do not know condition of cosmetics but I see 2004 paint and 1999 interior.
S/N 550-0048 has 8200 TT 2887/2912 SMOH engines, no damage, 2004 paint and interior, Cleveland Wheels and Brakes, EROS Oxygen masks, Fantastic Sperry Avionics package, Fresh phase 1 – 5 and asking $1,300,000 and will take $1,195,000 net
Several others are available. You will see the prices really start at $799,000 - $2,650,000 net (not asking)
Yours has favorable times, favorable avionics and favorable modifications.
I have booked out aircraft in the latest edition of theAircraft Blue Book and Vref which is valued thru September 2005. Now it is important to remember, Blue Book/Vref areguides, however; if someone is financing the aircraft, finance companies require the aircraft to fall within guidelines less down payment.
Blue Book assumes the following: excellent paint/interior; no damage history, all logs; 6 month annual, all ADs/SBs complied with. Full compliment of avionics.
Based on this, your aircraft has an Aircraft Blue Bookvalue of:$1,236,012 marketable (what itshould sellfor)lower if you want it to move faster.... and$1,186,012 inventory (what a dealer would pay).
VRef, another value guide indicated this aircraft is valued at: $1,197,442
If someone is financing the aircraft, book value has to be considered and the value guides (both) are reviewed by the lenders as the data comes directly from the brokers/dealers on the sale amount including times and options.
In conclusion, this aircraft should be marketed for $1,295,000 and if an offer comes in at or near $1,200,000 we need to take it.
I am willing to list it for more or less depending on your desire, but my job initially is to inform you of the market and I will continue to do that while looking for the most money for your aircraft.
Western Aviation would be pleased to represent this aircraft for you and look forward to the opportunity to work with you at this time and in the future..
Kindest regards,
David Fisher
Western Aviation
MANUFACTURER / MAKE-MODEL /Cessna Aircraft Company / CITATION - II
YEARS BUILT / SERIALNUMBERRANGE
1978 - 1994 / 5500001 - 5500733
TYPE / WEIGHT CLASS
Jet / Light
PRICERANGE
$1,095,000 - $ 3,650,000
DESCRIPTION: By far the most popular of the Citations and perhaps the most popular corporate jet ever built. It is basically a Citation I stretched 4 feet with a 5-foot longer wing holding 272 more gallons of fuel and powered by larger JT15D-4 engines. The Citation II is primarily marketed against the King Air B200. This aircraft can be RVSM certified when Service Bulletin SB-550-34-79 is complied with.
ENGINE
NUMBER OF / 2
MODEL / JT15D-4
TBO / 3,500
HSI / 1,750
SHAFT
THRUST / 2,500
BASIC CONFIGURATION
Fuselage Dimensions / Weight / Climb
Length: 47.2 / Max. Ramp (lbs): 13,500 / Normal (fpm): 3,070
Height: 15 / Max Takeoff (lbs): 13,300 / Engine Out (fpm): 1,055
Wing Span: 52.2 / Zero Fuel (lbs): 9,500 / Ceiling: 43,000
Basic Operating (lbs): 8,200
Typical Configuration / Max. Landing (lbs): 12,700 / Landing Performance
Crew: 2 / FAA Field Length 2,270
Passengers: 7 / Speed (Knots)
Pressurization (PSI): 8.7 / Vs Clean: 94 / Takeoff Performance
Vso Landing: 84 / SL ISA BFL: 2,990
Fuel Capacity / Normal Cruise TAS: 384 / 500 +20C BFL: 6,300
Standard 4,971 lbs 742 gal / Vimo (Max Op) IAS: 275
Optional lbs gal / Range (Nautical Miles)
Range (nm): 1760
Configuration Notes: Aircraft serial numbers 0627 thru 0800 will have a increased max weights Ramp- 14,300 lbs Takeoff- 14,100 lbs Landing- 13,500 lbs Zero fuel- 11,000 lbs
MAKE - CITATION
MODEL - II
DIRECT COSTS PER HOUR
Fuel / $594.40
Fuel Cost Per Gallon / $3.60
Additive Cost Per Gallon / $0.00
Burn Rate (Gallons Per Hour) / 165.11
Maintenance / $251.62
Labor Cost Per Hour / $191.62
Parts Per Hour Cost / $60.00
Engine Overhaul / $126.85
Thrust Reverse Overhaul / $12.00
Miscellaneous Flight Expenses / $6.00
Landing-Parking Fee / $6.00
Crew Expenses / $0.00
Supplies-Catering / $0.00
Total Direct Costs / $990.87
Block Speed Statute Miles Per Hour / 395
Total Cost Per Statute Mile / $2.51
/ ANNUAL FIXED COSTS
Crew Salaries / $124,715.00
Capt. Salary / $62,000.00
Co-pilot Salary / $37,000.00
Benefits / $25,715.00
Hangar Cost / $28,000.00
Insurance / $29,841.00
Hull / $15,341.00
Legal Liability / $14,500.00
Misc. Overhead / $25,937.00
Training / $15,990.00
Modernization / $7,747.00
Nav. Equipment / $2,200.00
Depreciation / $53,267.00
Total Fixed Costs / $261,760.00
/ ANNUAL BUDGET
Number of Seats / 7
Miles / 200,000
Hours / 506
Total Direct Costs / $501,704.00
Total Fixed Costs / $261,760.00
Total Cost (Fixed & Direct) / $763,464.30
Cost/Hour / $1,507.84
Cost/Statute Mile / $3.82
Cost/Seat Mile / $0.55
Total Cost (No Depreciation) / $710,197.30
Cost/Hour / $1,403.55
Cost/Statute Mile / $3.55
Cost/Seat Mile / $0.51