BeechTalk - BT

Username Protected · **Posted:** 30 Mar 2016, 22:12

I can see it now: One Aero purchases Icon aircraft.

Username Protected · **Posted:** 30 Mar 2016, 22:40

Eclipse ONE Aviation Kestrel Elcipse Icon Aviation. Totally Reliable and Trustworthy.

Insane. No one will put up with this.

Bail and buy a Searey!

Username Protected · **Posted:** 30 Mar 2016, 22:46

Jason, man I'm sorry. I know this is a really cool little machine, but nobody in their right mind would sign that agreement. I wouldn't sign it on principle alone, but as the purchaser? Bad, bad deal.

I want new aircraft makers to succeed, but not at the expense of our ability to freely own and control the thing we're buying. After reading this thread I actually find myself wanting them to fail both because they don't deserve to stay in business treating their customers that way, and because of the damaging precedent their success would have on other companies.

If the product is good, some savvy investors will step in and pick up the design and tooling for pennies at the liquidation and start over. Maybe then you can have what you thought you were getting without the million strings.

:thumbdown:

Username Protected · **Posted:** 30 Mar 2016, 23:05

Seems almost like they are intentionally trying to scare off all of their customers with this. Not sure what their end game is if that is the plan?

Username Protected · **Posted:** 30 Mar 2016, 23:08

Username Protected wrote:

Seems almost like they are intentionally trying to scare off all of their customers with this. Not sure what their end game is if that is the plan?

That thought crossed my mind too. Is there a strategy that takes the company into bankruptcy in order to start production with less debt?

Username Protected · **Posted:** 30 Mar 2016, 23:39

Username Protected wrote:

Seems almost like they are intentionally trying to scare off all of their customers with this. Not sure what their end game is if that is the plan?

That thought crossed my mind too. Is there a strategy that takes the company into bankruptcy in order to start production with less debt?

Username Protected · **Posted:** 30 Mar 2016, 23:41

Username Protected wrote:

Is there a strategy that takes the company into bankruptcy in order to start production with less debt?

Are they so stupid they can't even figure out how to go bankrupt in an aviation business without a bad purchase contract?

There are plenty of examples to help them along. I'm sure Mooney can offer a few tips having done it several times.

Mike C.

Username Protected · **Posted:** 31 Mar 2016, 00:20

You know, when they first announced they were setting up manufacturing in Vacaville, CA, I was puzzled -- who in their right mind would manufacture here?? I struggle to imagine a less friendly environment for a manufacturer in terms of taxes, operating, and labor costs.

Now I understand. They needed access to one of Cali's remaining natural resources: An assemblage of sharktastic lawyers who know how to wring blood from a turnip, then charge a fee for the wringer, then "offer" to reduce the fee if you covenant not to sue as wringee.

The stones on those guys. Unbelieveable. :doh:

Username Protected · **Posted:** 31 Mar 2016, 10:43

Username Protected wrote:

I'm not a lawyer but the paragraphs you've quoted seem to talk about 'purchase agreement' not the aircraft itself. Which to me means that you agree to not speculate with your purchase position (as in: I'll sell you #10 delivery spot for $5k). I see nothing about transferring the ownership of the airplane after all is said and done?

Here's the language on selling the aircraft.

Quote:

12. TRANSFER
a. Neither Owner nor Managing Pilot shall Transfer (as defined below) this Operating Agreement or any rights or obligations herein without the prior written consent of ICON (which consent may be withheld in its sole discretion) except in connection with a Transfer of the Aircraft in compliance with Paragraph 12.b.

b. Owner will not sell or otherwise Transfer the Aircraft or any interest therein unless (i) the transferee has agreed, by executing an owner Acknowledgement and Assignment Agreement form (a current version of which is attached as Annex B) (the “Assignment Form”), to be bound by this Operating Agreement as Owner and, if there will be a new Managing Pilot, such new Managing Pilot has signed an Acknowledgment and Joinder Agreement obtained from ICON agreeing to be bound by this Operating Agreement as Managing Pilot (a current version of which is attached as Annex A) and (ii) the signed Assignment Form and Acknowledgement and Joinder Agreement has been received by ICON. Owner’s responsibility for compliance with its obligations set forth in this Operating
Agreement shall continue without regard to a Transfer of the Aircraft unless
and until the Assignment Form has become effective and been received by
ICON. For the avoidance of doubt, receipt by ICON of an effective Assignment Form will not
relieve Owner of any obligations or liabilities under this Operating Agreement arising or accruing from events, acts or omissions occurring prior thereto.

c. In the event Owner Transfers the Aircraft or interest therein and fails to deliver to ICON an Assignment Form signed by the transferee as Owner (and/or the Acknowledgment and Joinder Agreement for a new Managing Pilot, if applicable) within 10 days after such Transfer, then Owner shall pay ICON an assignment fee of US $5,000.00 (the “Assignment Form Fee”), which shall be due 10 days after such Transfer, to compensate ICON for the costs and expenses of obtaining the Assignment Form from the new owner and/or the Acknowledgment and Joinder Agreement for a new Managing Pilot, if applicable, and other costs which are difficult to calculate. Late payment of the Assignment Form Fee shall accrue interest of 11⁄2% per month (or the maximum interest rate permitted by law, if less) compounding monthly, until paid. Owner’s payment of the Assignment Form Fee shall not relieve or diminish Owner’s obligations or liabilities under this Operating Agreement, including without limitation obligations under Paragraph 5 and the obligation to deliver an Assignment Form.

The original buyer indemnifies Icon elsewhere in the agreement. Does the indemnification last beyond the initial buyer's ownership term? In other words, if the second or third owner does something that causes Icon to be sued, does the first owner, and more importantly the first managing pilot, still indemnify Icon?

Quote:

Paragraph 6B:

b. Managing Pilot, on behalf of himself or herself and his or her Successors in Interest, agrees to defend, indemnify and hold the Released Parties harmless from and against any claims, actions, suits, proceedings, losses, damages, liabilities, costs and expenses (including, without limitation, reasonable attorney fees and costs) arising from or relating to any breach of any of the representations, warranties, covenants, or agreements of Managing Pilot or his or her Successors in Interest in this Aircraft Operating Agreement.

Username Protected · **Posted:** 31 Mar 2016, 11:58

The mother of all indemnity contracts would be if the A5 was equipped with an Avidyne panel.

Username Protected · **Posted:** 31 Mar 2016, 14:09

I didn't have to read beyond the words "Operating Agreement". They are not selling this aircraft, it's a dry lease at $62.50 per hour not including maintenance or insurance.

Username Protected · **Posted:** 31 Mar 2016, 14:31

Based on the fact that Icon is offering the chance to pay and move up the ladder, I read the excerpts here as prohibiting the transfer of the purchase contract rather than the actual aircraft. I believe there are laws that prohibit the manufacturer of a product from prohibiting the subsequent transfer of said product in this country. Icon just wants the right to profit from the position speculation rather than the ticket scalpers. Gulfstream does this as well.

How would the accounting look if Icon retained financial/operational control over all their airframes? I would want to limit liability and gather as much indemnity as possible, but I darn sure wouldn't want to be a leasing company if I were them, they'd have to book all their revenue over the life of the airframe!

Username Protected · **Posted:** 31 Mar 2016, 15:20

We don't have aviation journalism, I guess. If we did, we'd see articles written in the trades (in addition to this info on an Internet forum) about this practice emerging in the industry. Instead, we get re-writes of the Oshkosh press releases and a lot of yak about getting to go fly - and how fun it was to take cool pictures of it flying over a lake.

Username Protected · **Posted:** 31 Mar 2016, 16:41

Oh, and did you see this one? Apparently you need to be of good moral character to have the honor of owning an ICON.

Quote:

By entering into this Purchase Agreement, Buyer is part of the ICON pilot and owner
community. Promoting flight safety and responsible operations throughout that community is
a primary objective for ICON. A critical component of flight safety comes from the values,
attitudes, and behaviors of the pilot. ICON expects all ICON aircraft pilots and ICON aircraft
owners to demonstrate responsible, professional attitudes consistent with those of safely
piloting an aircraft. As set forth in the Aircraft Operating Agreement, Buyer and the Managing
Pilot agree and agree to cause pilots of the Aircraft (i) to behave professionally, respectfully
and with sound judgment in connection with use of Aircraft, and (ii) to participate within the
ICON community in a manner that is professional and does not adversely impact others within
the community.

These people are mad. :crazy:

Username Protected · **Posted:** 31 Mar 2016, 23:08

Yuri, that's just nuts. :crazy:

Icon A5